PRINTER'S NO. 792
THE GENERAL ASSEMBLY OF PENNSYLVANIA
SENATE BILL
No.
752
Session of
2015
INTRODUCED BY WILLIAMS, FONTANA, TEPLITZ, HUGHES, COSTA AND
FARNESE, APRIL 21, 2015
REFERRED TO STATE GOVERNMENT, APRIL 21, 2015
AN ACT
Amending Titles 18 (Crimes and Offenses) and 62 (Procurement) of
the Pennsylvania Consolidated Statutes, in forgery and
fraudulent practices, further providing for deception
relating to certification of minority business enterprise or
women's business enterprise; in general provisions, further
providing for definitions; in procurement organization,
further providing for powers and duties, providing for
contractor responsibility program and further providing for
Office of the Budget; in small and disadvantaged businesses,
further providing for policy and for definitions, repealing
provisions relating to regulations, providing for department
regulations and statements of policy, repealing provisions
relating to duties of department, providing for
administration, for enforcement and legal remedies, for
duties of the bureau, for duties of the certification and
verification unit and for duties of the compliance unit,
further providing for bonding and progress payments and for
report to General Assembly and providing for certification,
for verification, for small diverse business compliance, for
contractor compliance, for contractor diversity plan and for
contract provisions protecting small diverse businesses as
subcontractors; in antibid-rigging, further providing for
definitions and for prohibited activities; and making
editorial changes.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Section 4107.2 of Title 18 of the Pennsylvania
Consolidated Statutes is amended to read:
§ 4107.2. Deception relating to [certification] certifications
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or verifications of minority business enterprise
[or], women's business enterprise, small businesses
or small diverse businesses.
(a) Offense defined.--A person commits a felony of the third
degree if, in the course of business, he:
(1) Fraudulently obtains or retains certification as a
minority business enterprise [or], a women's business
enterprise, a small business or a small diverse business.
(2) Willfully makes a false statement, whether by
affidavit, report or other representation, to an official or
employee of a public body for the purpose of influencing the
certification or denial of certification of any business
entity as a minority business enterprise [or], a women's
business enterprise[.], a small business or small diverse
business, or for the purpose of influencing the verification
or denial of verification as a small diverse business.
(3) Willfully obstructs or impedes any agency official
or employee who is investigating the qualifications of a
business entity which has requested certification as a
minority business enterprise [or], a women's business
enterprise, a small business or verification as a small
diverse business.
(4) Fraudulently obtains public moneys reserved for or
allocated or available to minority business enterprises [or],
women's business enterprises[.], small businesses or small
diverse businesses.
(5) Fraudulently uses a certification or verification of
a small business or small diverse business to gain an
advantage in an invitation for bid or request for proposal.
(a.1) Enforcement.--The Department of General Services may
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enforce this section in accordance with 62 Pa.C.S. Ch. 45
(relating to antibid-rigging).
(b) Definitions.--As used in this section the following
words and phrases shall have the meanings given to them in this
subsection:
"Certification." A determination made by a [public body]
purchasing agency that a business entity is a minority business
enterprise [or], a women's business enterprise or small business
for whatever purpose[.], or a determination made by a
certification entity that a business entity is a diverse
business for whatever purpose.
"Certification entity." A third-party entity that certifies
whether a business is a diverse business. The term includes the
following entities:
(1) The National Minority Supplier Development Council.
(2) The Women's Business Enterprise National Council.
(3) The United States Department of Veterans Affairs.
(4) The United States Small Business Administration's
8(a) Program.
(5) The Department of Transportation's Unified
Certification Program for Disadvantaged Business Enterprises.
"Control." The exclusive or ultimate and sole control of the
business including, but not limited to, capital investment and
all other financial, property, acquisition, contract
negotiation, legal matters, officer-director-employee selection
and comprehensive hiring, operating responsibility, cost-control
matters, income and dividend matters, financial transactions and
rights of other shareholders or joint partners. Control shall be
real, substantial and continuing not pro forma. Control shall
include the power to direct or cause the direction of the
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management and policies of the business and to make the day-to-
day as well as major decisions in matters of policy, management
and operations. Control shall be exemplified by possessing the
requisite knowledge and expertise to run the particular business
and control shall not include simple majority or absentee
ownership. Further, control by a socially and economically
disadvantaged individual or woman shall not be deemed to exist
in any case where any nonminority owner or employee of the
business is disproportionately responsible for the operation of
the firm.
"Diverse business." A business which is owned or controlled
by a majority of persons, not limited to members of minority
groups, who have been deprived of the opportunity to develop and
maintain a competitive position in the economy because of social
disadvantages.
"Minority business enterprise." [A small business concern
which is:
(1) A sole proprietorship, owned and controlled by a
socially and economically disadvantaged individual.
(2) A partnership or joint venture controlled by
socially and economically disadvantaged individuals in which
51% of the beneficial ownership interest is held by socially
and economically disadvantaged individuals.
(3) A corporation or other entity controlled by socially
and economically disadvantaged individuals in which at least
51% of the voting interest and 51% of the beneficial
ownership interest are held by socially and economically
disadvantaged individuals.] A small, for-profit business
which is controlled by one or more minorities. In the case of
a corporation, at least 51% of the stock must be owned by one
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or more minorities.
["Public body." A department, bureau, agency, commission or
other instrumentality of the Commonwealth, political
subdivision, municipal authority or any wholly or partially
owned government corporation which enters into contracts.]
"Purchasing agency." A department, bureau, agency,
commission or other instrumentality of the Commonwealth which
enters into contracts.
"Service-disabled veteran." A veteran who possesses either a
disability rating letter issued by the United States Department
of Veterans Affairs or a disability determination from the
United States Department of Defense. In the case of a veteran
with a permanent and severe disability, the term includes the
spouse or permanent caregiver of that veteran.
"Service-disabled veteran-owned business enterprise." A
small, for-profit business that is controlled by one or more
service-disabled veterans. In the case of a corporation, at
least 51% of the stock must be owned by one or more service-
disabled veterans. For procurement, a service-disabled veteran-
owned business enterprise shall be certified by the United
States Department of Veterans Affairs according to its
regulations as a small business which is controlled by one or
more service-disabled veterans.
"Small business." A business in the United States which is
independently owned, is not dominant in its field of operation
and employs 100 or fewer employees.
"Small diverse business." A small business which is owned or
controlled by a majority of persons, not limited to members of
minority groups, who have been deprived of the opportunity to
develop and maintain a competitive position in the economy
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because of social disadvantages.
"Socially and economically disadvantaged individuals."
Persons who are citizens of the United States and who are Black
Americans, Hispanic Americans, Native Americans, Asian-Pacific
Americans, women and other minorities or persons found to be
disadvantaged by the Small Business Administration pursuant to
the Small Business Act (15 U.S.C. § 631 et seq.). The term
includes veterans and service-disabled veterans.
"Verification." The process through which a small diverse
business is verified by the department that it is certified
through one or more certification entities as a diverse business
for the purpose of procurement.
"Veteran." An individual who served on active duty in the
United States Armed Forces, including any of the following:
(1) A reservist or member of the National Guard who was
discharged or released from the service under honorable
conditions.
(2) A reservist or member of the National Guard who
completed an initial term of enlistment or qualifying period
of service.
(3) A reservist or member of the National Guard who was
disabled in the line of duty during training.
(4) An eligible surviving spouse of a veteran.
"Veteran-owned business enterprise." A small, for-profit
business which is controlled by one or more veterans. In the
case of a corporation, at least 51% of the stock must be owned
by one or more veterans. For procurement, a veteran-owned
business enterprise shall be certified by the United States
Department of Veterans Affairs according to its regulations as a
small business concern which is controlled by one or more
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veterans.
"Women's business enterprise." A small business concern
which is at least 51% owned and controlled by women, or, in the
case of any publicly owned business, at least 51% of the stock
of which is owned by one or more women and whose management and
daily business operations are controlled by one or more of the
women who own it.
Section 2. Section 103 of Title 62 is amended by adding a
definition to read:
§ 103. Definitions.
Subject to additional definitions contained in subsequent
provisions of this part which are applicable to specific
provisions of this part, the following words and phrases when
used in this part shall have the meanings given to them in this
section unless the context clearly indicates otherwise:
* * *
"Contractor responsibility file." A business' record in the
contractor responsibility program established under section 323
(relating to contractor responsibility program).
* * *
Section 3. Section 321(6) of Title 62 is amended and the
section is amended by adding a paragraph to read:
§ 321. Powers and duties.
Except as otherwise specifically provided in this part, the
department shall have the following powers and duties:
* * *
(6) Participate in the management and maintenance of a
contractor responsibility program as provided in section 323
(relating to contractor responsibility program) in
coordination with the Office of the Budget and other agencies
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as may be directed by the Governor.
(7) Establish policies and promulgate regulations
concerning the administration of a contractor responsibility
program subject to the review of the Office of the Budget and
other agencies as directed by the Governor.
Section 4. Title 62 is amended by adding a section to read:
§ 323. Contractor responsibility program.
(a) Program.--A contractor responsibility program shall be
established by the department.
(b) Objectives.--The contractor responsibility program
established under subsection (a) shall, at a minimum, provide
for all of the following:
(1) Mandating agency reporting of nonresponsible
contractors.
(2) Securing of information on contractor responsibility
from the Federal Government.
(3) Agency investigations of allegations of contractor
nonresponsibility.
(4) Standards and procedures for agency determinations
of contractor responsibility.
(5) Centralizing the collection and dissemination of
information concerning unsatisfactory or deficient
performance and nonresponsible contractors.
(6) Maintaining the confidentiality of the information
contained in the Commonwealth contractor responsibility files
and sanctions for the unauthorized use or disclosure of the
information.
(7) Collecting Commonwealth liabilities.
(c) Use.--For a procurement exceeding an amount to be
determined by the department, a purchasing agency shall access
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the contractor responsibility file of the bidder or offeror to
gather and analyze all of the following information regarding
the bidder or offeror:
(1) Current responsibility status.
(2) Past performance.
(3) Identification of tax delinquencies or other
liabilities.
(d) Violations.--All purchasing agencies shall maintain
contractor responsibility files and update the files for
violations of any of the following provisions:
(1) 18 Pa.C.S. § 4107 (relating to deceptive or
fraudulent business practices).
(2) 18 Pa.C.S. § 4107.2 (relating to deception relating
to certifications or verifications of minority business
enterprise, women's business enterprise, small businesses or
small diverse businesses).
(3) Section 2111 (relating to small diverse business
compliance).
(4) Section 2111.1 (relating to relating to contractor
compliance).
(5) Chapter 23 (relating to ethics in public
contracting).
(6) Any other evidence of a business' nonresponsibility
that a purchasing agency may consider in selecting the
business as a contractor.
(e) Penalties.--The following apply:
(1) The department may impose a fine of no more than
$1,000 on a business for a negative entry in the business'
contractor responsibility file under the following
circumstances:
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(i) The business has a total of three or more
negative entries in its contractor responsibility file.
(ii) The business has incurred any single negative
entry in the business' contractor responsibility file for
which the department or a purchasing agency determines in
its discretion that the underlying nonresponsible conduct
is egregious.
(2) Penalties assessed through the contractor
responsibility program do not preclude the Commonwealth from
imposing debarment, suspension, other penalties or further
legal action under this title for the same underlying
nonresponsible conduct in a business' contractor
responsibility file.
(3) Fines shall be payable to the department and may be
waived by the department for cause shown.
Section 5. Section 327(b) of Title 62 is amended to read:
§ 327. Office of the Budget.
* * *
(b) Contractor responsibility program.--The Office of the
Budget shall participate in the management and maintenance of a
contractor responsibility program as provided in section 323
(relating to contractor responsibility program) in coordination
with the department and other agencies as may be directed by the
Governor.
* * *
Section 6. The heading of Chapter 21 of Title 62 is amended
to read:
CHAPTER 21
SMALL BUSINESSES AND [DISADVANTAGED] SMALL DIVERSE BUSINESSES
Section 7. Sections 2101 and 2102 of Title 62 are amended to
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read:
§ 2101. Policy.
The policy of this Commonwealth is to assist small and
[disadvantaged] small diverse businesses in learning how to do
business with [Commonwealth] purchasing agencies. The department
shall implement this policy in accordance with regulations
promulgated by the department.
§ 2102. Definitions.
[Subject to section 2103 (relating to regulations), the]
Subject to section 2103.1 (relating to department regulations
and statements of policy), the following words and phrases when
used in this chapter shall have the meanings given to them in
this section unless the context clearly indicates otherwise:
"Audit." An investigation of business records in accordance
with section 552 (relating to right to audit records).
"Bureau." The Bureau of Small Business Opportunities within
the department established under section 2104.1 (relating to
administration).
"Business." A contractor or subcontractor for procurement.
"Certification." A determination made by a purchasing agency
that a business entity is a small business for whatever purpose,
or a determination made by a certification entity that a
business entity is a diverse business for whatever purpose.
"Certification entity." A third-party entity that certifies
whether a business is a diverse business. The term includes the
following entities:
(1) The National Minority Supplier Development Council.
(2) The Women's Business Enterprise National Council.
(3) The United States Department of Veterans Affairs.
(4) The United States Small Business Administration's
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8(a) program.
(5) The Department of Transportation's Unified
Certification Program for Disadvantaged Business Enterprises.
"Control." The exclusive or ultimate and sole control of the
business including, but not limited to, capital investment and
all other financial, property, acquisition, contract
negotiation, legal matters, officer, director, employee
selection and comprehensive hiring, operating responsibility,
cost-control matters, income and dividend matters, financial
transactions and rights of other shareholders or joint partners.
Control shall be real, substantial and continuing not pro forma.
Control shall include the power to direct or cause the direction
of the management and policies of the business and to make both
the day-to-day and major decisions in matters of policy,
management and operations. Control shall be exemplified by
possessing the requisite knowledge and expertise to run the
particular business and control shall not include simple
majority or absentee ownership. Further, control by a socially
and economically disadvantaged individual or woman shall not be
deemed to exist in any case where any nonminority owner or
employee of the business is disproportionately responsible for
the operation of the firm.
["Disadvantaged business."] "Diverse business." A [small]
business which is owned or controlled by a majority of persons,
not limited to members of minority groups, who have been
deprived of the opportunity to develop and maintain a
competitive position in the economy because of social
disadvantages.
"Diversity plan." A plan submitted to the department by a
business that establishes a separate goal of diversity in
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control, ownership, participation, operation and employment when
fulfilling the obligations of an invitation for bid or request
for proposal.
"Inspection." An on-site investigation of the place of
business or worksite of a contractor or any subcontractor that
is related to the performance of any contract awarded or to be
awarded by the purchasing agency.
"Minority business enterprise." A small, for-profit business
which is controlled by one or more minorities. In the case of a
corporation, at least 51% of the stock must be owned by one or
more minorities.
"Self-certification." The process through which a business
obtains certification as a diverse business through a
certification entity.
"Service-disabled veteran." A veteran who possesses either a
disability rating letter issued by the United States Department
of Veterans Affairs or a disability determination from the
United States Department of Defense. In the case of a veteran
with a permanent and severe disability, the term includes the
spouse or permanent caregiver of that veteran.
"Service-disabled veteran-owned business enterprise." A
small, for-profit business that is controlled by one or more
service-disabled veterans. In the case of a corporation, at
least 51% of the stock must be owned by one or more service-
disabled veterans. For procurement, a service-disabled veteran-
owned business enterprise shall be certified by the United
States Department of Veterans Affairs according to its
regulations as a small business which is controlled by one or
more service-disabled veterans.
"Small business." A business in the United States which is
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independently owned, is not dominant in its field of operation
and employs 100 or fewer employees.
"Small Business Procurement Initiative." The process through
which a small business concern is certified by the department as
a small business and thereby registers as a small business
eligible for the purpose of procurement.
"Small diverse business." A small business which is owned or
controlled by a majority of persons, not limited to members of
minority groups, who have been deprived of the opportunity to
develop and maintain a competitive position in the economy
because of social disadvantages.
"Socially and economically disadvantaged individuals."
Persons who are citizens of the United States and who are
African Americans, Hispanic Americans, Native Americans, Asian-
Pacific Americans, women and other minorities or persons found
to be disadvantaged by the Small Business Administration
pursuant to the Small Business Act (15 U.S.C. § 631 et seq.).
The term includes veterans and service-disabled veterans.
"Verification." The process through which a small diverse
business is verified by the department that it is certified
through one or more certification entities as a diverse business
for the purpose of procurement.
"Veteran." An individual who served on active duty in the
United States Armed Forces, including any of the following:
(1) A reservist or member of the National Guard who was
discharged or released from the service under honorable
conditions.
(2) A reservist or member of the National Guard who
completed an initial term of enlistment or qualifying period
of service.
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(3) A reservist or member of the National Guard who was
disabled in the line of duty during training.
(4) An eligible surviving spouse of a veteran.
"Veteran-owned business enterprise." A small, for-profit
business which is controlled by one or more veterans. In the
case of a corporation, at least 51% of the stock must be owned
by one or more veterans. For procurement, a veteran-owned
business enterprise shall be certified by the United States
Department of Veterans Affairs according to its regulations as a
small business concern which is controlled by one or more
veterans.
"Women's business enterprise." A small business concern
which is at least 51% owned and controlled by women, or, in the
case of any publicly owned business, at least 51% of the stock
of which is owned by one or more women and whose management and
daily business operations are controlled by one or more of the
women who own it.
Section 8. Section 2103 of Title 62 is repealed:
[§ 2103. Regulations.
The department shall establish policy for executive and those
independent agencies for which the department acts as purchasing
agency and may promulgate regulations establishing detailed
definitions of the words and phrases defined in section 2102
(relating to definitions) using, in addition to the criteria set
forth in section 2102, other criteria as it deems appropriate,
including the number of employees and the dollar volume of
business. State-affiliated entities shall implement the policy
for their procurement programs.]
Section 9. Title 62 is amended by adding a section to read:
§ 2103.1. Department regulations and statements of policy.
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(a) Regulations.--The department shall promulgate
regulations in accordance with this chapter. Regulations shall
be sufficient to ensure reasonable predictability in small
diverse business procurement for contractors and subcontractors.
Regulations shall establish all of the following:
(1) Certification procedures as provided in section 2109
(relating to certification).
(2) Verification procedures as provided in section 2110
(relating to verification).
(3) Compliance as provided in sections 2111 (relating to
small diverse business compliance) and 2111.1 (relating to
contractor compliance).
(b) Statements of policy.--The department shall establish
policies for purchasing agencies for which the department acts
as a purchasing agency. Purchasing agencies shall implement the
policies for their procurement programs.
Section 10. Section 2104 of Title 62 is repealed:
[§ 2104. Duties of department.
The department shall have the following duties:
(1) Where feasible, provide appropriate staff who shall
be responsible to the department and who shall serve within
designated Commonwealth agencies to assist small and
disadvantaged businesses in this Commonwealth in learning how
to do business with Commonwealth agencies.
(2) Give special publicity to procurement procedures and
issue special publications designed to assist small and
disadvantaged businesses in learning how to do business with
Commonwealth agencies.
(3) Compile, maintain and make available source lists of
small and disadvantaged businesses for the purpose of
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encouraging procurement from small and disadvantaged
businesses.
(4) Include small and disadvantaged businesses on
solicitation mailing lists.
(5) Assure that small and disadvantaged businesses are
solicited on each procurement for which the businesses may be
suited.
(6) Develop special training programs to assist small
and disadvantaged businesses in learning how to do business
with Commonwealth agencies.]
Section 11. Title 62 is amended by adding sections to read:
§ 2104.1. Administration.
(a) Bureau of Small Business Opportunities.--The department
shall establish the Bureau of Small Business Opportunities to
administer this chapter.
(b) Certification and verification unit.--The department
shall establish a staffed certification unit within the bureau
that shall assist small businesses obtain or renew certification
for procurement and small diverse businesses obtain or renew
verification for procurement in accordance with this chapter. At
least one employee of the unit shall be fluent in both English
and Spanish.
(c) Compliance unit.--The department shall establish a
staffed compliance unit within the bureau that shall ensure all
small businesses, small diverse businesses and businesses that
subcontract or plan to subcontract with a small business or
small diverse business maintain compliance with this chapter. At
least one employee of the compliance unit shall be fluent in
both English and Spanish.
(d) Duties of the department.--The department shall have the
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following duties:
(1) Provide appropriate staff who shall be responsible
to the department and who shall serve within designated
purchasing agencies to assist small businesses and small
diverse businesses in learning how to do business with
purchasing agencies and to enforce the provisions of this
chapter.
(2) Assure that participation by small businesses and
small diverse businesses is, if appropriate, factored into
the evaluation of proposals for supplies, services or
construction when a purchasing agency uses the competitive
sealed proposals method under section 513 (relating to
competitive sealed proposals).
(3) Exercise authority over the bureau to carry out the
provisions of this chapter.
(4) Approve or reject any contract modification
regarding the respective responsibilities of contractors and
subcontractors in an existing contract before such contract
modification is accepted and enforceable.
(5) Determine the employment data that shall be included
in a business' performance report that demonstrates its
achievement of a diversity plan in accordance with section
2112 (relating to contractor diversity plan).
§ 2104.2. Enforcement and legal remedies.
(a) Enforcement.--The following apply:
(1) The bureau shall monitor and enforce contractor
compliance, contractor responsibility and may recommend a
case of noncompliance or nonresponsibility to the department
for further action.
(2) The department may develop other enforcement
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mechanisms that are derived from the provisions of this
chapter.
(b) Legal remedies.--At the department's discretion, a
business may be subject to legal action by the Attorney General
for c ivil liability or c riminal prosecution, including, but not
limited to, the following:
(1) A violation of 18 Pa.C.S. § 4107.2 (relating to
deception relating to certifications or verifications of
minority business enterprise, women's business enterprise,
small businesses or small diverse businesses).
(2) A violation of Chapter 45 (relating to antibid-
rigging).
(3) Any other legal remedies provided by law.
§ 2104.3. Duties of the bureau.
(a) Duties.--The bureau shall have the following duties:
(1) Give special publicity to procurement procedures and
issue special publications designed to assist small
businesses and small diverse businesses in learning how to do
business with purchasing agencies.
(2) Compile, maintain and make available source lists of
verified small diverse businesses for the purpose of
encouraging procurement from small diverse businesses.
(3) Include verified small diverse businesses on
solicitation mailing lists.
(4) Ensure that verified small diverse businesses are
solicited on each procurement for which the businesses may be
suited.
(5) Develop and publicize training programs to assist
small businesses and small diverse businesses in learning how
to do business with purchasing agencies, including assistance
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with certification, verification, compliance, bonding and
diversity plans.
(6) Conduct regular meetings with all purchasing
agencies to monitor compliance with this chapter.
(7) Develop and publicize educational initiatives
including, but not limited to, informational sessions,
programs and courses designed to educate small diverse
businesses on the processes and benefits of doing business
with purchasing agencies.
(b) Hotline.--The bureau shall establish a hotline telephone
number for contractors, subcontractors and the public to connect
with the bureau for all of the following purposes:
(1) Obtaining guidance on the certification process.
(2) Obtaining guidance on contractor compliance.
(3) Reporting any of the following suspected activities:
(i) Abuse or misuse of one's certified status as a
small diverse business in procurement.
(ii) A violation of any of the provisions of this
chapter.
(iii) A violation of 18 Pa.C.S. § 4107.2 (relating
to deception relating to certifications or verifications
of minority business enterprise, women's business
enterprise, small businesses or small diverse
businesses).
(iv) Fraud.
(c) Distribution.--The bureau shall distribute the hotline
established under subsection (b) to all contractors and
subcontractors engaging in procurement in accordance with this
chapter.
(d) Maintenance.--The bureau shall maintain the contractor
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responsibility file within the contractor responsibility program
as provided in section 323 (relating to contractor
responsibility program) of the following entities:
(1) A small diverse business.
(2) A business as a prime contractor that uses or plans
to use a small diverse business as a subcontractor.
(3) A small business.
(4) A business as a prime contractor that uses or plans
to use a small business as a subcontrator.
(e) Enforcement.--If the bureau finds a business is in
noncompliance, then the bureau may take the following actions:
(1) Record a negative entry in the business' contractor
responsibility file.
(2) Cancel the contract.
(3) Suspend the business for a period of no more than 90
days.
(4) Debar the business for a period of no more than
three years.
(5) Decertify the business from the Small Business
Procurement Initiative.
(6) Withdraw verification of the business.
(7) Impose fines.
(8) Make a recommendation to the department to refer the
case to the Attorney General for legal action.
(9) Exercise authority over the certification and
verification unit and the compliance unit to ensure this
chapter is effective.
§ 2104.4. Duties of the certification and verification unit.
(a) Duties.--The certification and verification unit shall
have the following duties:
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(1) Assist small businesses in obtaining certification.
(2) Certify and decertify small businesses through the
Small Business Procurement Initiative.
(3) Assist small diverse businesses in obtaining
verification.
(4) Verify or withdraw verification of a business
seeking or relying on verification as a small diverse
business.
(b) Decertification and withdrawal of verification.--The
certification and verification unit may decertify a business'
certification as a small business or withdraw verification of a
small diverse business for any of the following reasons:
(1) The business received certification or verification
by knowingly submitting false and misleading information.
(2) The business knowingly allowed the abuse or misuse
of its certification or verification status.
(3) The business failed to cooperate with or respond to
a request for information from the department or other
purchasing agency or official.
(4) A certification entity decertifies the business.
(5) The business otherwise violates any of the following
provisions:
(i) 18 Pa.C.S. § 4107.2 (relating to deception
relating to certifications or verifications of minority
business enterprise, women's business enterprise, small
businesses or small diverse businesses).
(ii) Section 2111 (relating to small diverse
business compliance).
(iii) Section 4503 (relating to prohibited
activities).
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(iv) The certification unit shall give the business
notice of proposed decertification or withdrawal of
verification and the right to due process through
regulations promulgated by the department.
(v) The certification unit shall record a
decertification or withdrawal of verification in the
business' contractor responsibility file within the
contractor responsibility program as provided in section
323 (relating to contractor responsibility program).
(c) Audit and inspection.--The certification and
verification unit shall audit and inspect a business for proper
certification and verification according to the following:
(1) An inspection shall be performed during verification
to ensure proper certifications of a small diverse business
in accordance with this chapter. The certification and
verification unit may perform any subsequent inspection at
the discretion of the bureau to ensure proper certifications
and verification.
(2) The certification and verification unit may
recommend the grounds for decertifying a small business or
not verifying a small diverse business to the department for
further action.
§ 2104.5. Duties of the compliance unit.
(a) Duties.--The compliance unit shall have all of the
following duties:
(1) Assist contractors and subcontractors in maintaining
compliance with this chapter.
(2) Conduct an audit or an inspection of the business
when it is suspected of noncompliance.
(b) Audits and inspections.--The compliance unit shall audit
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or inspect a small diverse business according to the following:
(1) The compliance unit shall audit or inspect a
business suspected of noncompliance under section 2111
(relating to small diverse business compliance) or
noncompliance under section 2111.1 (relating to contractor
compliance).
(2) The compliance unit may conduct further audits or
inspections at its discretion to ensure compliance with this
chapter.
(c) Negative entry.-- The compliance unit may report a
negative entry in the business' contractor responsibility file
to the department and the purchasing agency for further action.
(d) Noncompliance.--The compliance unit may impose any other
consequences for noncompliance at its discretion in accordance
with this chapter.
Section 12. Sections 2105 and 2107 of Title 62 are amended
to read:
§ 2105. Bonding and progress payments.
(a) Bonding.--Notwithstanding other provisions of this part,
a purchasing agency may reduce the level or change the types of
bonding normally required or accept alternative forms of
security to the extent reasonably necessary to encourage
procurement from small businesses and [disadvantaged] small
diverse businesses.
(b) Progress payments.--A purchasing agency may make special
provisions for progress payments as it deems reasonably
necessary to encourage procurement from small businesses and
[disadvantaged] small diverse businesses.
§ 2107. Report to General Assembly.
The department shall annually, before October 1, report in
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writing [to the General Assembly concerning the awarding of
contracts to small and disadvantaged businesses during the
preceding fiscal year. The report shall include a list of all
small and disadvantaged businesses that participated as
contractors, subcontractors or suppliers during the preceding
fiscal year for contracts if the number of contractors under a
previously existing contract for the same supply or service is
reduced to a single contractor or reduced by more than 50% of
the number existing on September 30, 2003.] on the actual
utilization of small businesses and small diverse businesses as
contractors, subcontractors, suppliers and professional service
providers. The department shall annually, before October 1,
deliver the report in writing to the General Assembly and post
the report on the bureau's Internet website. In preparing the
report, the department shall [verify whether commitments made to
small and disadvantaged businesses in the course of awarding
these contracts have been maintained.] include the following
data from the preceding fiscal year:
(1) A list of all small businesses and small diverse
businesses that participated as contractors, subcontractors,
suppliers or professional service providers utilized by
purchasing agencies.
(2) The dollar amounts spent on the actual utilization
of small businesses and small diverse businesses as
contractors, subcontractors, suppliers or professional
service providers, including the following categories:
(i) The total amount spent by the Commonwealth on
small business and small diverse business procurement,
including, but not limited to, the following:
(A) A comparison with the total amount spent by
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the Commonwealth on all procurement contracts.
(B) The total amounts spent by the Commonwealth
on all contracts awarded to minority business
enterprises, women's business enterprises, veteran-
owned business enterprises and service-disabled
veteran-owned business enterprises.
(ii) The amount spent by each purchasing agency on
small business and small diverse business procurement,
including, but not limited to, the following:
(A) A comparison with the total amount spent by
each purchasing agency on all of its procurement
contracts.
(B) The amounts spent by each purchasing agency
on all contracts awarded to minority business
enterprises, women's business enterprises, veteran-
owned business enterprises and service-disabled
veteran-owned business enterprises.
(3) The percentages of actual utilization of small
businesses and small diverse businesses as contractors,
subcontractors, suppliers or professional service providers
as compared to the actual utilization of businesses,
including, but not limited to, the following categories:
(i) The percentage of small business and small
diverse business procurement out of the total amount
spent by the Commonwealth on procurement, including, but
not limited to, the percentages of total amounts spent by
the Commonwealth on all contracts awarded to minority
business enterprises, women's business enterprises,
veteran-owned business enterprises and service-disabled
veteran-owned business enterprises.
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(ii) The percentage of small business and small
diverse business procurement out of the total amount
spent by each purchasing agency on all procurement,
including, but not limited to, the percentages of the
amounts spent by each purchasing agency on all contracts
awarded to minority business enterprises, women's
business enterprises, veteran-owned business enterprises
and service-disabled veteran-owned business enterprises.
(4) Confirmation of whether commitments made to small
businesses and small diverse businesses in the course of
awarding these contracts have been maintained.
Section 13. Title 62 is amended by adding sections to read:
§ 2109. Certification.
(a) Requirements.--A small diverse business shall be
certified by the department as a small business and self-
certified pursuant to subsection (d) as a diverse business
before being verified by the department to engage in
Commonwealth procurement as a small diverse business.
(b) Supplier registration.--The business shall register as a
supplier with the Commonwealth through the Pennsylvania Supplier
Portal before obtaining certification as a small business.
(c) Certification as a small business.--A business shall be
certified by the department as a small business through the
Small Business Procurement Initiative by proving the following
criteria:
(1) The business is a for-profit United States business.
(2) The business is independently owned.
(3) The business is not dominant in its field of
operation.
(4) The business does not exceed more than 100 full-time
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equivalent employees.
(5) The average gross income sales of the business do
not exceed an amount to be determined by the department.
(d) Self-certification as a diverse business.--A business
self-certifies as a diverse business by completing all of the
following steps:
(1) Obtaining certification that the business is a
diverse business through one or more of the following
certification entities:
(i) The National Minority Supplier Development
Council.
(ii) The Women's Business Enterprise National
Council.
(iii) The United States Department of Veterans
Affairs.
(iv) The United States Small Business
Administration's 8(a) program.
(v) The Department of Transportation's Unified
Certification Program for Disadvantaged Business
Enterprises.
(2) Submitting proof of self-certification as a diverse
business by presenting diverse business certification through
a certification entity to the department.
§ 2110. Verification.
(a) Obtaining verification.--To obtain verification as a
small diverse business, a business shall perform all of the
following:
(1) Complete the process of certification in accordance
with section 2109 (relating to certification).
(2) Pay a first-time verification fee of $40 to the
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department.
(3) Allow the bureau to conduct an audit and an
inspection.
(4) Submit any other documentation the bureau may
request to the bureau for verification.
(5) Complete a training program provided by the bureau
concerning small diverse business procurement that includes,
but is not limited to, training in certifications,
verification, compliance, bonding and diversity plans.
(b) Renewing verification.--Verification shall be renewed
annually. To renew verification as a small diverse business, a
small diverse business shall perform all of the following:
(1) Maintain certification in accordance with section
2109.
(2) Pay an annual verification fee of $25 to the
department.
(3) Allow the bureau to conduct annually an audit and an
inspection and to conduct additional audits or inspections at
the bureau's discretion.
(4) Submit any other documentation the bureau may
request to the bureau for verification.
(5) Complete an annual training program provided by the
bureau concerning small diverse business procurement that
includes, but is not limited to, training in certification,
verification, compliance, bonding and diversity plans.
(6) Maintain a record of good standing in the small
diverse business' contractor responsibility file as
determined by the bureau.
(7) Maintain small diverse business compliance in
accordance with section 2111 (relating to small diverse
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business compliance) or maintain contractor compliance in
accordance with section 2111.1 (relating to contractor
compliance).
§ 2111. Small diverse business compliance.
(a) Compliance.--A small diverse business that contracts
with a purchasing agency shall do all of the following:
(1) Maintain a record of good standing in the contractor
responsibility file as determined by the compliance unit.
(2) Allow any audits or inspections by the department.
(3) Annually attend a training program provided by the
department on small diverse business procurement procedures
and maintaining compliance.
(b) Display and distribute the hotline.--The following
apply:
(1) A small diverse business shall display the hotline
on-site and distribute the hotline to all contractors,
subcontractors and employees.
(2) A small diverse business or any other person may use
this hotline for any of the following purposes:
(i) Obtaining guidance on certification and
verification processes.
(ii) Obtaining guidance on contractor compliance.
(iii) Reporting any of the following suspected
activities:
(A) Abuse or misuse of one's certified status as
a small business or of one's verified status as a
small diverse business.
(B) A violation of 18 Pa.C.S. § 4107.2 (relating
to deception relating to certifications or
verifications of minority business enterprise,
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