SENATE BILL REPORT

ESB 5041

This analysis was prepared by non-partisan legislative staff for the use of legislative members in their deliberations. This analysis is not a part of the legislation nor does it constitute a statement of legislative intent.

Background: State agencies must use a competitive bidding process when purchasing goods and services. Agencies must perform a public solicitation for bidders and award contracts to the lowest responsible bidder. Agencies are authorized, however, to use an alternative process for contracts worth less than $35,000. With few exceptions, agencies must solicit three bids from venders on a list of pre-approved venders maintained by the Department of General Administration. For these contracts, an agency may consider other factors besides price and is not required to award the contract to the lowest bidder.

The Office of Minority & Women's Business Enterprises (OMWBE), for example, assists small businesses in Washington owned by minorities, women, and the socially and economically disadvantaged. OMWBE's services include certifying minority and women-owned businesses, and collecting recorded information from state agencies. State agencies must report to OMWBE what percentage of their goods and services are purchased from minority and women-owned businesses.

In 2007 the Legislature enacted a bill requiring the Department of Veterans Affairs (DVA) to develop and maintain a list of veteran-owned businesses on the DVA website. The purpose of the bill is to mitigate economic impacts incurred by veteran-owned businesses as a result of military service. To qualify as a veteran-owned business, the business must be 51 percent owned and controlled by a veteran or an active or reserve member in any branch of the armed forces of the United States, including the National Guard, Coast Guard, and Armed Forces Reserves.

Summary of Engrossed Bill: A statewide program is created to increase state procurement contracts with veteran-owned businesses. Agency duties to implement the program are as follows:

Department of Veterans Affairs (DVA). DVA must:

certify veteran-owned businesses;
maintain a list of certified veteran-owned businesses on its public website;
collaborate with other state agencies in implementing outreach to veteran-owned businesses;
collect information from state agencies tracking goods and services contracts awarded to veteran-owned businesses;
consult agencies to determine what specific information they must report to the DVA; and
report to the Legislature on the progress of the program by October 2012, and every two years thereafter.

Department of General Administration (GA). GA must identify DVA-certified veteran-owned businesses in its vendor registry for state agency purchasing.

All State Agencies. State agencies are encouraged to award 3 percent of all procurement contracts under $35,000 to veteran-owned businesses. In addition, state agencies must:

perform outreach to veteran-owned businesses to increase opportunities for veterans to provide goods and services to the state;
work to match agency procurement records with the DVA's database of certified veteran-owned businesses to establish how many procurement contracts are being awarded to those businesses.

Staff Summary of Public Testimony: PRO: This legislation replicates at the state level a program implemented previously at the federal level. This is a good bill and anything that can be done to help the veterans is a good thing. The bill needs to go further and have more teeth to it. Many veterans were not given the option of going into service for the country. The state should not have the option of helping the veterans or meeting the criteria set forth in this bill. We were mandated to serve, they should be mandated to assist. Roughly 12 percent of businesses in this country are veteran owned. It is vital that we assist now with so many returning troops coming back from the Iraq and Afghanistan wars.