Report 2018-114 Recommendation 1 Responses

Report 2018-114: Disabled Veteran Business Enterprise Program: The Departments of General Services and Veterans Affairs Have Failed to Maximize Participation and to Accurately Measure Program Success (Release Date: February 2019)

Recommendation #1 To: General Services, Department of

To increase the number of DVBE firms that awarding departments can contract with when required to use LPAs, General Services should develop and implement a plan to encourage DVBE firms to participate in LPAs.

1-Year Agency Response

DGS Procurement Division (PD) has developed and fully implemented a plan to encourage DVBE firms to participate in LPAs.

1) DGS-PD created checklists for buyers to maximize opportunities for DVBE participation on Statewide Contracts. These checklists guide buyers through the process of identifying potential DVBE participants, both as prime contractors and as sub-contractors. Specific steps include targeted searches of the OSDS database and review of the identified DVBE's business and product information.

2) DGS-PD is awarding contracts by group or line item when appropriate to keep the size of contract awards to a level at which SBs (most DVBEs are also SBs) can comfortably participate. Examples include:

- Newsprint and Carbonless Paper Rolls

- Forklifts

- Traffic Control Modules

- Renewable Diesel

- Enterprise Technology

- Sand and Cinders

3) DGS-PD continues to educate DVBEs about tools available for their use within the California State Contracts Register (CSCR) called Vendor Ads to assist them to market their business or indicate a willingness to participate on a contract within the solicitation when advertised. LPA contracting opportunities are advertised on the CSCR. Information was presented about Vendor Ads and links to tutorials for their use at the Small Business Advisory Council on June 26, 2019, September 4, 2019, and December 4, 2019.

4) DGS-PD encourage DVBE participation in LPA bidding opportunities by informing them of upcoming solicitations and identifying those commodities where participation by DVBEs has historically been lower, where the bidder pool has shrunk, where group/line item awards exist or where there is ample subcontracting opportunity. This has been accomplished by posting upcoming bid opportunities on the DGS-PD website. DGS-PD presents this information quarterly at the Small Business Advisory Council. This information was presented on June 26, 2019, September 4, 2019, and December 4, 2019.

California State Auditor's Assessment of 1-Year Status: Fully Implemented

6-Month Agency Response

The Contracts Management Section (CMS) has created checklists outlining the steps to maximize opportunities for DVBE participation on Statewide Contracts. These checklists guide buyers through the process of identifying potential DVBE participants, both as prime contractors and as sub-contractors. Specific steps include targeted searches of the OSDS database and review of the identified DVBE's business and product information.

DGS/PD has continued to award contracts by group or line item when appropriate to keep the size of contract awards to a level at which SBs (most DVBEs are also SBs) can comfortably participate. Examples of such contract awards in the past six months include:

- Newsprint and Carbonless Paper Rolls

- Forklifts

- Traffic Control Modules

- Renewable Diesel

- Enterprise Technology

- Sand and Cinders

Solicitations are advertised on the CSCR through the Cal eProcure portal. One of the features of the CSCR is the posting of Vendor Ads soliciting or announcing availability as a sub-contractor. Post and View Vendor Ads is accessible from several different training modules. Training is also provided for user support, navigating the website, how to view solicitations, and utilizing Vendor Ads. Vendor Ads were discussed at the April 9, 2019, PART meeting, familiarizing state purchasing officials with the offered functionality. Additionally, the DGS/PD website features a page to familiarize vendors with the Cal eProcure portal, providing videos guiding users through the registration process and fully utilizing the CSCR.

DVBE inclusion in LPA Contracts was presented at the June 26, 2019, Small Business Advisory Committee meeting. The information provided included finding upcoming solicitations prior to advertisement in the CSCR, an overview of Vendor Ads, and introduced the new features of the State Contract Index Listing that detail remaining contract extensions and links to related solicitation postings.

California State Auditor's Assessment of 6-Month Status: Pending

General Services' response does not address our recommendation. Specifically, General Services did not address whether it has developed and implemented a plan to encourage DVBE firms to participate in LPAs. Until it addresses the recommendation, we will continue to report the status as not fully implemented.

60-Day Agency Response

The Department of General Services (DGS) continues to explore opportunities for Disabled Veteran Business Enterprise (DVBE) firms to participate in Leveraged Procurement Agreements (LPA) and identify services or goods that can be made available to DVBE firms in large scale contracts. Although LPAs are created to increase the buying power of the state and leverage economies of scale in purchasing goods and services, DGS is committed to encouraging DVBE firms to participate in LPAs.

DGS' plan to encourage DVBE participation on LPAs including where appropriate, breaking awards into groups or line items for smaller contract award amounts, which in turn will lead to the increased likelihood that Small Businesses (which includes most DVBEs) can successfully perform on the contracts. In industry conditions that are limited, DVBE participation incentives will be included to account for as much as five percent participation by DVBEs.

DGS created a tool in the Cal eProcure, California State Contracts Register (CSCR) solicitation advertisements, to include the ability for DVBE suppliers to post attachments to the solicitation ads announcing their availability to participate as primes or subcontractors.

Further, DGS' Procurement Division (PD) is increasing the regularity of sharing upcoming solicitations with DGS' Office of Small Business and DVBE Services (OSDS) and the DVBE Advisory Committee quarterly by attending all meetings. Upcoming solicitation opportunities will also be posted on PD's website.

DGS' Contract Management Units recently started to spend more time during the contract development phase identifying certified DVBEs that perform work within the scope of the procurement and will be sending out a notification when the solicitation is released.

California State Auditor's Assessment of 60-Day Status: Pending

All Recommendations in 2018-114

Agency responses received are posted verbatim.