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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS

     Introduced By: Representatives Morin, Casey, Phillips, Barros, and McLaughlin

     Date Introduced: January 27, 2017

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 37 of the General Laws entitled "PUBLIC PROPERTY AND

WORKS" is hereby amended by adding thereto the following chapter:

CHAPTER 14.3

VETERAN-OWNED BUSINESS ENTERPRISES

     37-14.3-1. Purpose.

     The purposes of this chapter are to honor veterans of the United States armed services for

their service and to assist them by increasing opportunities for veteran-owned small businesses to

participate in state agency contracts and subcontracts, and to carry out the state's policy of

supporting the fullest possible participation of firms owned and controlled by certified veterans in

state-funded and state-directed public works projects and in-state purchases of goods and

services. This includes assisting such businesses throughout the life of contracts in which they

participate.

     37-14.3-2. Applicability.

     This chapter shall apply to any and all state procurements, including, but not limited to,

the procurement of goods, services, public works projects, or contracts funded in whole or in part

by state funds, or funds which, in accordance with a federal grant or otherwise, the state expends

or administers or in which the state is a signatory to the construction contract.

     37-14.3-3. Definitions.

     As used in this chapter, the following words shall have the following meanings:

     (1) "Compliance" means the condition existing when a contractor has met and

implemented the requirements of this chapter.

     (2) "Contract" means a mutually binding legal relationship or any modification thereof

obligating the seller to furnish supplies or services, including construction, and the buyer to pay

for them. For purposes of this chapter, a lease is a contract.

     (3) "Contractor" means one who participates, through a contract or subcontract, in any

procurement or program covered by this chapter and includes lessees and material suppliers.

     (4) "Economically disadvantaged" means that the veteran's personal net worth is not in

excess of the economic disadvantaged criteria as established in 49 CFR part 26.

     (5) "Noncompliance" means the condition existing when a recipient or contractor has

failed to implement the requirements of this chapter.

     (6) "Small business concern" means a concern, including its affiliates, that is

independently owned and operated, not dominant in the field of operations in which it is bidding

on state government contracts, and qualified as a small business under the criteria and size

standards in 13 CFR part 121.

     (7) "Veteran" means a person who served on active duty with the U.S. Army, Air Force,

Navy, Marine Corps or Coast Guard, for a minimum of one hundred eighty (180) days and who

was discharged or released under conditions other than dishonorable. Reservists or members of

the National Guard called to federal active duty (for other than training) or disabled from a

disease or injury incurred or aggravated in the line of duty or while in training status also qualify

as a veteran pursuant to 38 CFR part 74.

     (8) "Veteran-owned small business enterprise" means a small business concern, not less

than fifty-one percent (51%) of which is owned and controlled by one or more economically

disadvantaged veterans, and may include a business owned by a surviving spouse or permanent

caregiver of a veteran as provided by 38 CFR part 74.

     37-14.3-4. Veteran-owned small business enterprise participation.

     (a) The state's annual goal for veteran-owned small business enterprises to participate in

state procurements shall be no less than three percent (3%) of the total value of all contracts

available to businesses in each fiscal year. The director of the department of administration is

authorized and directed to establish by rules and regulations formulas for giving veteran-owned

small business enterprises a preference in all procurements and public works projects and in

contract and subcontract awards.

     (b) The director of the department of administration is further authorized to establish, by

rules and regulations adopted in accordance with chapter 35 of title 42, compliance formulas,

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procedures for implementation, and procedures for enforcement.

     37-14.3-5. Establishment of criteria, guidelines and certification.

     The director of the department of administration shall, in consultation with the office of

veterans' affairs, establish, by rules and regulations adopted in accordance with chapter 35 of title

42, criteria to certify veteran-owned small business enterprises and maintain and update

publically accessible lists of veteran-owned small business enterprises that are certified by the

department.

     37-14.3-6. Sanctions.

     (a) The director of the department of administration shall have the power to impose

sanctions upon contractors not in compliance with this chapter and shall include, but not be

limited to:

     (1) Suspension of payments;

     (2) Termination of the contract;

     (3) Recovery by the state of ten percent (10%) of the contract award price as liquidated

damages; and

     (4) Denial of right to participate in future projects for up to three (3) years.

     (b) As to Rhode Island department of transportation contracts, the director of the

department of administration may delegate this authority to the director of the department of

transportation.

     37-14.3-7. Reporting.

     By August 1, 2018 and each August 1 thereafter, the department of administration shall

submit an annual report to the governor, speaker of the house, senate president and director of the

office of veterans' affairs for the period from July 1 to June 30 on the actual utilization of veteran-

owned small business enterprises as contractors, subcontractors, suppliers and professional

service providers for the state. The annual report shall include a list of all veteran-owned small

businesses that participated as contractors, subcontractors, suppliers and professional service

providers for the state during the previous fiscal year.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC PROPERTY AND WORKS

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     This act would create a veteran's preference in the issuance of state contracts.

     This act would take effect upon passage.

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