December 19, 1991
Subject: Minority, Women, and Disabled Veterans Business Participation Goals in State Contracts
Within the last six months, we have begun to see the requirements of State Administrative Manual (SAM) Section 1266 implemented in requests for proposals (RFPs) from some State agencies. (Copy attached.) The subject of this SAM section is Statewide Participation Goals for Disabled Veterans, Minority, and Women Business Enterprises. The requirements in Section 1266 are based on the language in AB 1933 as implemented in Public Contract Code 10115.
While these requirements are not in all State RFPs, the agencies which have included them have made no exception to them for proposals which contain no possibility of subcontracting. In particular, for the University of California, this has created problems as our proposals are for research or services conducted on behalf of the State and, therefore, do not usually include any subcontracts. Where a contractor has no subcontracting possibilities or where the State is purchasing from a contractor to provide a good or service which the contractor would not normally subcontract, the narrow language of AB 1933 did not allow for such necessary and reasonable exceptions.
This problem has now become apparent to the State officials responsible for implementing these requirements. Many businesses which provide the State with goods or services have complained about the irrational way these participation goals have been implemented. The State is now working on an additional piece of legislation which would amend the language of AB 1933 to allow for such exceptions. However, in the meantime, the University would still have to respond to this requirement in State RFPs.
As a result of a discussion of this problem with the State Department of General Services (DGS) legal staff responsible for SAM 1266, RAO was told that DGS has informed State agencies that SAM 1266 does not apply to any government entity. If an award is on an Interagency Agreement rather than a Standard Form 2, it would not contain these requirements. However, DGS has not put this information in writing. So agencies which use the Standard Form 2 for awards may have this requirement in their RFPs.
Therefore, in response to any business participation goal requirements in a State RFP, campus should indicate that this requirement in not applicable to the University of California as an entity of the State in accordance with Department of General Services guidance. Secondly, it could be noted that the University has voluntarily implemented these goals on a campus basis.
Obviously, the fact that DGS has not put this information in writing may put a campus proposal in question. To alleviate concerns that an RFP would be considered non-responsive or in response to questions from a particular agency, agency staff should be referred to the Department of General Services, Office of Legal Services, which is responsible for writing and implementing SAM 1266.
Refer: Samuela A. Evans (510) 987-9849
Subject Index: 16
Organization Index: S-001
David F. Mears