ATTACHMENT_DVBE_Incentive_12-30-2020.doc

The State has established goals for the Disabled Veteran Business Enterprise (DVBE) Program participating in State contracts. For the purpose of this solicitation, the DVBE Program participation requirement is waived; however, this solicitation does provide a:

CALIFORNIA DVBE INCENTIVE

PLEASE READ INSTRUCTIONS THROUGHLY

(Revised December 30, 2020)

AUTHORITY: The Disabled Veteran Business Enterprise (DVBE) Program is established in Military and Veteran Code (MVC) 999 §§ et seq., Public Contract Code (PCC) 10115 §§ et seq., and California Code of Regulations (CCR) Title 2, 1896 §§ et seq.

PURPOSE: The MVC 999 (a), known as the DVBE Program is established to address the special needs of disabled veterans seeking rehabilitation and training through entrepreneurship and to recognize the sacrifices of Californians disabled during military service. It is the intent of the Legislature that every state procurement authority honor California's disabled veterans by taking all practical actions necessary to meet or exceed the DVBE Program participation requirements (percentage/goal), hereafter referred to as DVBE participation, of at least the minimum of total contract value. (Refer to Section H, DVBE Program Definitions.)

INTRODUCTION: The DVBE Incentive is a state agency’s option to formally exempt the legislatively mandated DVBE Participation Program requirements. However, the California Highway Patrol (CHP) is providing the prime contractor/bidder the opportunity to take advantage of the DVBE Incentive. Choosing this option, the prime contractor/bidder shall be required to commit to subcontracting with a California-certified DVBE to perform a Commercially Useful Function (CUF) of at least the minimum DVBE Incentive percentage goal. (Refer to Section H, DVBE Program Definitions.)

Information submitted by the prime contractor/bidder to comply with the DVBE Incentive requirements will be verified by the CHP. If, during the verification process, evidence of an alleged violation is found, the State shall initiate an investigation in accordance with the requirements of MVC 999 §§ et seq., PCC 10115 §§ et seq., and follow investigatory procedures by the CCR 1896.80. Prime contractors/bidders found to be in violation of certain provisions may be subject to loss of certification, monetary and/or civil penalties, and/or contract termination.

Only DVBE’s certified by the State of California Department of General Services (DGS) Office of Small Business and DVBE Services (OSDS) may be used to satisfy the DVBE participation.

A. THE DVBE INCENTIVE. Under CCR, Title 2, 1896.99.100, PCC 10115, and MVC 999 – 999.6, the DVBE Incentive provides responsive and responsible contractors the opportunity to receive additional incentive calculations. The DVBE Incentive is applied at the time the solicitation is evaluated; and when a bidder/contractor selects a DGS-certified DVBE subcontractor to provide commodities and/or services in support of the overall contract effort. Application of the DVBE Incentive may place the bidder/contractor in line for contract award. The following are key elements of the DVBE Incentive program:

1. The DVBE Incentive is applied during the evaluation process and is only applied to responsive bids from responsible bidders/contractors proposing the required DVBE participation for the incentive specified in this solicitation.

2. When requesting the incentive application, the prime contractor/bidder must complete and return the required forms identified in Section C, Required DVBE Forms. The prime contractor/bidder who fails to submit all required forms and confirm the level of DVBE participation will be ineligible for the DVBE Incentive application.

B. Meeting DVBE Participation REQUIREMENTS. In accordance with MVC 999 §§ et seq and PCC 10115 §§ et seq, as the prime bidder/contractor, you MUST be certified as a DVBE in good standing by DGS OSDS, as defined in MVC 999.2 or have selected and mutually agreed to partner with a certified DVBE subcontractor/supplier to provide commodities and/or services related to the performance of services identified in this solicitation.

1. Submission of the required DVBE form, Department of General Services Procurement Division (DGS PD) 843, Disabled Veteran Business Enterprise Declarations constitutes an agreement between the prime bidder/contractor and the certified DVBE subcontractor/supplier to fulfill the DVBE participation related to the final executed contract.

Any change, including substitution, to the DVBE subcontractor/supplier must be submitted in writing to the CHP Certified Business Advocate. (Refer to Section E, DVBE Substitutions.)

2. The DVBE subcontractor/supplier identified in this bid MUST meet the definition of a “CUF” as defined under MVC 999‑999.6. A DVBE subcontractor/supplier not meeting CUF regulations will render the responding prime contractor/bidder ineligible for the DVBE Incentive application.

3. When returning the solicitation to CHP, prime contractors/bidders are to include a valid DVBE subcontractor/supplier’s certification for each DVBE subcontractor/supplier to be used in the performance of this contract. DVBE certification status can be verified at https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx.

C. REQUIRED DVBE FORMS. The following required DVBE forms, also attached at the end of this document and can be view/downloaded at the CHP web site, www.chp.ca.gov/programs-services, click on Certified Business Advocate Program.

1. DGS PD 843, Disabled Veteran Business Enterprise Declarations. A properly completed DGS PD 843, shall be included when returning the solicitation to CHP. The DGS PD 843 MUST be signed by each subcontractor/supplier used in the performance of this contract.

2. DGS PD 810P, Prime Contractor's Subcontracting Report. A properly completed DGS PD 810P shall be promptly submitted to CHP at the end of the contract term.

3. DGS PD 05-105, Bidder Declaration. A properly completed DGS PD 05-105, if required, shall be included when returning the solicitation to CHP.

D. THE DVBE INCENTIVE APPLICATION IS BASED ON LOW BID METHOD. The DVBE Incentive amount for awards based on low bid will vary in conjunction with the DVBE commitment. For evaluation purposes only, the net bid price of responsive bids will be reduced by the Small Business Preference amount, if applicable, and the DVBE Incentive amount as applied to the lowest responsive net bid. The DVBE Incentive adjustment for awards based on low bid cannot exceed five (5) percent or $100,000, whichever is less, of the number one ranked net bid price. When used in combination with a preference adjustment, the cumulative adjustment amount cannot exceed $100,000. The following percentages will apply for awards based on the low bid method:

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1. DVBE INCENTIVE TABLE

2. SAMPLE OF LOW BID METHOD CALCULATIONS:

SB/MB Preference Amount

5%

Results: Following the application of the SB preference, the lowest responsive, responsible bidder is a certified SB, Bidder B. All three bidders are eligible to receive the DVBE Incentive; therefore, the incentive calculation is performed.

Bidder A and B have 3% = $243; Bidder C has 5% = $405

Bidder A $8100 - $243 = $7857

Bidder B $8150 - $405 - $243 = $7502 Bidder C $8300 - $405 - $405 = $7490

AWARD: The award is to Bidder C.

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E. DVBE SUBSTITUTIONS. Per CCR Title 2, Division 2, Chapter 3, Subchapter 10.5: A DVBE subcontractors shall be used per § 1896.70 unless a substitution request is submitted to CHP and subsequently approved by the Department of General Services. A DVBE subcontractor shall be replaced by another DVBE to perform the work originally stated. The substitution shall maintain, at minimum, the level of participation goal stated in the bid. In the absence of a DVBE, the replacement shall be a certified small business. The contractor shall simultaneously notify the DVBE and the awarding department of the intended substitution. The written notice shall contain the reasons for the substitution and be sent by certified mail. The contractor shall submit the following to the awarding department:

1. A copy of the written notice issued to the DVBE with proof of delivery. In the absence of proof of delivery, provide the certified mail receipts.

2. A copy of the DVBE’s consent or opposition to the substitution. In the absence of the consent or opposition, provide the returned and unopened certified mail.

3. The name and supplier/certificate number of the business being substituted and the name and supplier/certificate number of the proposed replacement. If a DVBE cannot be identified as a replacement, the contractor shall document the absence of DVBEs. In this case, the replacement shall be a certified small business. This documentation shall include but is not limited to:

(a) Contact with the SB/DVBE Advocates, CertifiedBusiness@chp.ca.gov, from awarding department and the Department of Veterans Affairs regarding the absence of DVBEs to perform the specific work.

(b) Search results from the Department of General Services website for DVBEs to perform the specific work.

(c) Communication with a DVBE Community Organization nearest the worksite regarding the absence of DVBEs, if applicable.

(d) Documented communication with DVBEs and small businesses describing the work to be performed, its percentage of the overall contract, the corresponding dollar amount, and their responses to the request.

4. The DVBE shall have up to five (5) business days from the postmark date to consent or oppose the substitution. A copy of the DVBE's reply shall be sent simultaneously by certified mail to the contractor and awarding department.

5. The awarding department shall review and compile the documents for submission to DGS for final approval/denial.

6. The DVBE substitution process shall not be used as an excuse for noncompliance with any provision of law. This includes, but is not limited to, the Subletting and Subcontracting Fair Practices Act (§ 4100 et seq., Public Contract Code) or any contract requirements relating to substitution of subcontractors.

7. Contractors who proceed with work pending a substitution decision may be subject to contract termination, recovery of damages under rights, remedies and penalties. This is outlined in MVC 999.9, PCC 4110, or 10115.10 (applies to public works only).

F. REPORTING REQUIREMENTS AND PROCEDURES.

1. REPORTING REQUIREMENTS. Upon completion of an awarded contract for which a commitment to achieve a DVBE goal was made, the awarding agency is required to submit and collect from the prime contractor/bidder that entered into a contract with a DVBE subcontractor the prime contractor/bidder’s DVBE DGS PD 810P form certifying all payments have been made to DVBE subcontractors pursuant to MVC 999.5.

Pursuant to MVC 999.7, the awarding agency is required to withhold $10,000 from the final payment or the full payment if less than $10,000 on contracts until the prime contractor/bidder complies with the certification requirements of MCV 999.5(d).

If the prime contractor/bidder, upon notification, does not comply with the certification requirements, the final payment is permanently deducted. The withholding applies to all procurement approaches with a DVBE subcontractor, as defined by MVC 999(b)(4).

Notwithstanding any other law, an awarding agency shall not withhold more than the amount specified on the final payment of any DVBE contract for the purposes of ensuring compliance with the certification requirements of MVC 999.5.

(a) Prime contractors/bidder is required to maintain records supporting the information submitted on the DGS PD 810P form.

(b) A person or entity that knowingly provides false information shall be subject to a civil penalty for each violation in the minimum amount of $2,500 and the maximum amount of $25,000. An action for a civil penalty under this subdivision may be brought by any public prosecutor in the name of the people of the State of California and the penalty imposed shall be enforceable as a civil judgment.

(c) The DGS PD 810P is to be forwarded to the California Highway Patrol’s Business Services Section, Certified Business Advocate via U. S. mail at 601 North 7 Street, Sacramento, CA 95811, electronically at Certifiedbusiness@chp.ca.gov, or facsimile at 916 322-3166, for processing and inclusion in the contract file.

2. PROCEDURE. Prior to completion of any contract with the prime contractor/bidder that commit to achieve a DVBE participation goal, the awarding agency is required to withhold $10,000 from the final payment or the full payment if less than $10,000 until the prime contractor submits the DGS PD 810P form certifying all payments have been made to the DVBE subcontractors.

Prime contractor/bidder is responsible for submitting the completed DGS PD 810P to the awarding agency within 60 days from the completion of the contract.

The awarding agency must give notice to prime contractor/bidder that fail to comply with the above reporting requirements. The prime contractor/bidder has 15 to 30 calendar days from date of notice to cure the defect or $10,000 from the final payment or the full payment if less than $10,000 is permanently deducted. The withholding applies to all procurement approaches with a DVBE subcontractor, as defined by MVC 999(b)(4).

The DGS PD 810P form shall be retained in the procurement file.

G. RESOURCE AND INFORMATION. Should you have questions regarding the DVBE Incentive, documentation requirements, or assistance identifying and/or developing search criteria for potential DVBE contractor/suppliers for this solicitation, contact:

CHP Certified Business Advocate E-mail: Certifiedbusiness@chp.ca.gov Business: 916 843-3616 Facsimile: 916 322-3166

H. DVBE PROGRAM DEFINITIONS.

Agent/Broker – Pursuant to MVC 999.2, any individual, entity, or any combination thereof, that does not have title, possession, control, and risk of loss of materials, supplies, services, or equipment provided to an awarding department, unless one or more certified disabled veterans has 51 percent ownership of the quantity and value of the materials, supplies, services, and of each piece of equipment provided under the contract.

Commercially Useful Function - Pursuant to MVC 999 §§ et seq., a person or an entity is deemed to perform a CUF if a person or entity does all the following:

1. Is responsible for the execution of a distinct element of the work of the contract.

2. Carries out the obligation by performing, managing, or supervising the work involved.

3. Performs work that is normal for its business services and functions.

4. Is not further subcontracting a portion of the work that is greater than that expected to be subcontracted by normal industry practices.

5. A subcontractor will not be considered as performing a CUF if its role is limited to that of an extra participant in a transaction, agreement, or project through which funds are passed in order to achieve the appearance of DVBE participation.

Note: A subcontractor will not be considered as performing a CUF if its role is limited to that of an extra participant in a transaction, agreement, or project through which funds are passed in order to achieve the appearance of DVBE participation.

Disabled Veteran – A disabled veteran, for purposes of DVBE certification eligibility, is defined as a veteran of the military, naval, or air services of the United States (US), with at least a ten percent service-connected disability and who is a resident of the State of California.

Disabled Veteran Business Enterprise (DVBE) – Pursuant to the CCRS, Title 2, 1896.61(l): A DVBE is a business enterprise certified by the DGS OSDS as meeting all of the following criteria:

1. Any person or entity that satisfies the ownership (or management) and control requirements of CCR 1896.61(f); is certified in accordance with CCR 1896.70; and provides services or commodities that contributes to the fulfillment of the contract requirements by performing a CUF.

2. Sole proprietorship owned by a disabled veteran; or a firm or partnership, 51 percent of the stock or partnership interests of which are owned by one or more disabled veterans.

3. Managed by and with the daily business operations controlled by one or more disabled veterans.

4. Sole proprietorship, corporation, or partnership with its home office located in the US which is not a branch or subsidiary of a foreign corporation, firm or other business.

DGS PD 843, DVBE Declarations – Upon award of a contract the prime contractor/bidder shall forward a copy of the DGS PD 843, DVBE Declaration to the DVBE subcontractor(s)/supplier(s) for completion and return to the bidder. Bidder must submit the completed DGS PD 843 at the same the bid is submitted to CHP. Bidders awarded a contract are contractually obligated to use the DVBE subcontractor/supplier for the work identified unless the DGS agrees to a substitution. The CHP shall be notified in writing that a substitution is requested, in turn, CHP shall forward all DVBE substitution request to DGS for final approval.

DGS PD 05-105, Bidder Declaration – All bidders responding to this solicitation must complete the DGS PD 05-105, Bidder Declaration and include it with their bid response. When completing the declaration, bidders responding to the solicitation must identify all DVBE subcontractor/supplier proposed for DVBE participation in the contract. Bidder must submit the completed DGS PD 05-105 at the time the bid is submitted to CHP. Bidders awarded a contract are contractually obligated to use the DVBE subcontractor/supplier identified on this form for the work identified unless the DGS agrees to a substitution. The CHP shall be notified in writing that a substitution is requested, in turn, CHP shall forward all DVBE substitution request to DGS for final approval.

Percentage/Goals – Pursuant to MVC 999 (b)(9), means a numerically expressed objective that awarding departments and contractors are required to make efforts to achieve.