California Disabled Veteran Business Enterprise Program

The Disabled Veteran Business Enterprise participation goal program sits in Public Contract Code section 10115 and following, Military and Veterans Code section 999 and following, and title 2 of the California Code of Regulations section 1896.61 and following. Military and Veterans Code section 999.2 requires each state awarding department to hold a DVBE participation goal of at least 3% per year of the overall dollar amount it spends. The 3% figure is a goal, not a quota, a set-aside, or a rigid proportion. For a specific solicitation, the highest ranking executive of the awarding department or a designee sets a goal that can be above or below 3%. Section 999 defines a disabled veteran as a veteran of the military, naval, or air service of the United States who has at least a 10% service-connected disability and who is domiciled in California. A disabled veteran business enterprise is a sole proprietorship, corporation, or partnership at least 51% owned by one or more disabled veterans, whose daily business operations are managed and controlled by one or more disabled veterans, with its home office located in the United States and not a branch or subsidiary of a foreign corporation, foreign firm, or other foreign-based business. The statute sets no size cap, no gross receipts limit, and no employee limit. Only a business certified by the Office of Small Business and DVBE Services counts toward the goal, and only when it performs a commercially useful function as section 999(B) defines that term. Section 999(B) requires the firm to be responsible for a distinct element of the work, to actually perform, manage, or supervise it, to do work normal for its business, to handle price, quality, quantity, ordering, installation, and payment for the materials it supplies, and not to subcontract more of the work than normal industry practice. A firm that is not certified at the time of award, or that does not keep certification current, cannot count toward the 3% goal. The State applies an incentive to bids that propose certified DVBE participation, unless a solicitation exempts it. A bidder has to document that the required minimum DVBE participation will be met, or the bid can be found non-responsive. The State verifies what the bidder submits. A bidder found in violation can face suspension from doing business with the State, contract termination, civil penalties, and loss of state certifications, following the investigatory procedure in 2 CCR section 1896.91. The 10% rating floor is much lower than most disabled-veteran programs in this catalog. This is a business certification and a contracting preference, not a payment to the veteran.