California Hispanic Chambers Commend Governor for Signing AB 2019

California small businesses will now have an opportunity to compete for millions of dollars in state contracts thanks to Governor Newsom signing AB 2019. The California Hispanic Chambers of Commerce (CHCC), a key supporter and co-sponsor of AB 2019 (Petrie-Norris and Holden) commends Governor Newsom for signing the bill to ensure that small business owners now have an equitable chance of being considered in State contracts.

The bill declares that the state economy is strengthened by the diversity and resiliency of its small businesses and that it is essential to ensure all small businesses can fully participate in the domestic and global markets, including businesses owned by women and other specified groups. California is currently home to 3.9 million small businesses, which make up 99.8% of all businesses, of which 1.6 million are minority-owned. Small businesses not only contribute significantly to the tax base of the State but also accounted for 7 million Californians or 48.8% of all employment in the State.

“CHCC believes the State of California needs to ensure a fair share of State procurement spending is directed and dedicated as a matter of policy to small and diverse businesses and we commend Governor Newsom for signing AB 2019,” said Julian Canete, CHCC President and CEO. “We’d also like to thank the bill’s author Assemblymember Cottie Petrie-Norris for having the vision of expanding opportunities to California’s small and minority-owned businesses. Although California small businesses regularly provide an array of goods and services that would certainly benefit the state, they need a real opportunity to compete with larger businesses that have traditionally monopolized state contracts. Thanks to Governor Newsom, small and minority-owned businesses are now provided with that opportunity and advances the goal of equity and inclusion when it comes to small businesses seeking to do state business.”

AB 2019 creates accountability and establishes steps to increase participation by businesses owned by disadvantaged individuals by officially establishing a 25% procurement goal in statute along with an accountability mechanism. Additionally, it creates further plans, transparency, and pertinent data to encourage participation in the state process. Setting this goal in procurement is a giant step in acknowledging the importance of small businesses in California. The bill establishes economic equity in State contracting by doing three primary things:

1. Codifying the goal of 25% of State procurement to be directed toward small businesses.
2. Fast-tracking of small business certification for “Disadvantaged Business Enterprises” (DBEs).
3. Establishing accountability within the Administration and throughout the state bureaucracy, to enforce the intent of meeting that goal, while directing all State agencies to develop and enact an education and outreach plan, which will inform their communication strategy to minority and hard-to-reach businesses.

The bill requires each state agency’s small business liaison to develop an “economic equity first” action plan and policy for the agency to provide direction, recommendations, and strategies as to how to ensure that small businesses are effectively involved and benefiting from the agency’s procurement process. It also requires an action plan and policy is adopted by January 1, 2024. The action plan will include general outreach to all small businesses, education and outreach, and stakeholder engagement with representative business organizations and business enterprises owned by women, minorities, and members of the LGBT community.

AB 2019 also requires the department to contract for a statewide procurement and contracting disparity study, to guide outreach strategies, state government program development, and improvements to contracting policies. The department would be required to post the report, with prescribed content, to its internet website on or before January 1, 2025.

Finally, AB 2019 now requires an annual report from state agencies to include details regarding the agency’s activities to support procurement participation by small businesses, micro-businesses, disabled veteran business enterprises, and businesses owned by women, minorities, and members of the LGBT community that also qualify as a small business, micro business, or disabled veteran business enterprise, as well as compliance and implementation of specified action plans and policies by a state agency. The bill would also require each state agency to provide information regarding its activities upon request to the Office of the Small Business Advocate in the Governor’s Office of Business and Economic Development.