Full Text of HB0102 98th General Assembly
HB0102ham001 98TH GENERAL ASSEMBLY | Rep. William Davis Filed: 3/5/2013
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| 1 | | AMENDMENT TO HOUSE BILL 102
| 2 | | AMENDMENT NO. ______. Amend House Bill 102 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Public Utilities Act is amended by adding | 5 | | Section 4-503 as follows: | 6 | | (220 ILCS 5/4-503 new) | 7 | | Sec. 4-503. Procurement from female owned, minority owned, | 8 | | and qualified service-disabled veteran-owned small businesses; | 9 | | goals; reports. | 10 | | (a) Definitions. For the purpose of this Section: | 11 | | "Certification" means a determination made under the | 12 | | Business Enterprise for Minorities, Females, and Persons with | 13 | | Disabilities Act, Section 45-57 of the Illinois Procurement | 14 | | Code, or the Clearinghouse that a business entity is a female | 15 | | owned, minority owned, or qualified service-disabled | 16 | | veteran-owned small business for whatever purpose. A business |
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| 1 | | owned and controlled by females shall select and designate | 2 | | whether such business is to be certified as (i) a female owned | 3 | | business or minority owned business if the females are also | 4 | | minorities or (ii) a female owned business or qualified | 5 | | service-disabled veteran-owned small business if the females | 6 | | are qualified service-disabled veterans. | 7 | | "Clearinghouse" means the Commission-supervised entity | 8 | | authorized under subsection (d) of this Section whose primary | 9 | | purpose is to audit and verify the status of female and | 10 | | minority owned businesses, and to establish and maintain a | 11 | | database of female, minority, and service-disabled | 12 | | veteran-owned businesses that is accessible to the Commission | 13 | | and participating entities. | 14 | | "Commission" means the Illinois Commerce Commission. | 15 | | "Control" has the meaning given to that term in the | 16 | | Business Enterprise for Minorities, Females, and Persons with | 17 | | Disabilities Act. | 18 | | "Executive Director" means the Executive Director of the | 19 | | Illinois Commerce Commission. | 20 | | "Female owned business" has the meaning given to that term | 21 | | in the Business Enterprise for Minorities, Females, and Persons | 22 | | with Disabilities Act. | 23 | | "Goal" means a target that, when achieved, indicates | 24 | | progress in
a preferred direction. A goal is neither a | 25 | | requirement nor a quota. | 26 | | "Long-term goal" means a goal applicable to a period of 5 |
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| 1 | | years. | 2 | | "Mid-term goal" means a goal applicable to a period of
3 | 3 | | years. | 4 | | "Minority owned business" has the meaning given to that | 5 | | term in the Business Enterprise for Minorities, Females, and | 6 | | Persons with Disabilities Act. | 7 | | "Participating entity" means a public utility, as defined | 8 | | in this Section, that is required to participate in this | 9 | | procurement program as well as any other entity, including | 10 | | cable and wireless operators, that may voluntarily participate | 11 | | in this procurement program. | 12 | | "Product and service categories" means product and service
| 13 | | categories as defined by the Standard Industrial | 14 | | Classification (SIC)
system maintained by the United States | 15 | | Department of Labor,
Occupational Safety and Health | 16 | | Administration. | 17 | | "Public utility" means all regulated gas, electric, water | 18 | | companies and incumbent local exchange telecommunications | 19 | | carriers with at least 100,000 customers. | 20 | | "Qualified service-disabled veteran-owned small business" | 21 | | has the meaning given to that term in Section 45-57 of the | 22 | | Illinois Procurement Code. | 23 | | "Qualifying business" means a female owned business, | 24 | | minority owned business, or qualified service-disabled | 25 | | veteran-owned small business. | 26 | | "Short-term goal" means a goal applicable to a period of
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| 1 | | one year. | 2 | | "Subcontract" means an agreement or arrangement between a
| 3 | | contractor and any party or person in which the parties do not
| 4 | | stand in the relationship of an employer and an employee
(i) | 5 | | for the furnishing of supplies or services for the use
of real | 6 | | or personal property, including lease
arrangements, which, in | 7 | | whole or in part, is
necessary to the performance of any one or | 8 | | more
contracts or
(ii) under which any portion of the | 9 | | contractor's
obligation under any one or more contracts is
| 10 | | performed, undertaken, or assumed. | 11 | | (b) Annual reporting requirement. Within 90 days after the | 12 | | effective date of this amendatory Act of the 98th General | 13 | | Assembly, the Commission shall enter an order to establish a | 14 | | format for participating entities' annual reports required by | 15 | | subsection (h) and annual plans required by subsection (k). | 16 | | (c) Verification rules and guidelines regarding | 17 | | eligibility of business enterprises. | 18 | | (1) The Clearinghouse, as described in subsection (d), | 19 | | shall supply a
verification form to applicants. An | 20 | | applicant may complete the verification
forms and return | 21 | | them to the Clearinghouse for processing and inclusion in
| 22 | | the database. In addition to verification by the | 23 | | Clearinghouse, a participating entity may accept | 24 | | verification of a qualifying female or minority owned | 25 | | business's status made under the Business Enterprise for | 26 | | Minorities, Females, and Persons with Disabilities Act or |
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| 1 | | Section 45-57 of the Illinois Procurement Code or, for | 2 | | verification of a qualifying service-disabled | 3 | | veteran-owned business, under Section 45-57 of the | 4 | | Illinois Procurement Code. | 5 | | (2) In assessing the suitability of a qualifying | 6 | | business to bid for procurement contracts, a
participating | 7 | | entity may require additional information or the | 8 | | completion of additional forms
to comply with specific | 9 | | requirements created by the unique character of its
| 10 | | business, including, but not limited to, insurance | 11 | | requirements, product and service codes,
and bonding | 12 | | limits. A participating entity may not, however, require | 13 | | such additional
information in order to verify that a | 14 | | business is in fact a qualifying business. | 15 | | (3) Female owned businesses and minority owned | 16 | | businesses shall be required to submit verification forms | 17 | | at least once every
3 years. | 18 | | (4) Service-disabled veteran-owned businesses must | 19 | | present proof of certification as determined by the | 20 | | Illinois Department of Veterans' Affairs. | 21 | | (5) Completion of the verification application only | 22 | | initiates a verification of the
business's status as a | 23 | | female owned business or minority owned business. Filing of | 24 | | an application does not guarantee
verification. | 25 | | (6) The fact that a verified qualifying business is | 26 | | included in the Clearinghouse database
shall not be |
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| 1 | | construed as an endorsement of its ability to perform, nor
| 2 | | shall such inclusion guarantee it business with the | 3 | | participating entities. | 4 | | (7) Verification forms for female owned businesses or | 5 | | minority owned businesses shall be available for | 6 | | inspection by the
Commission. | 7 | | (8) Falsification of information on the verification | 8 | | form shall disqualify owners from reapplying for | 9 | | verification for 5 years after the date the falsification | 10 | | is discovered. | 11 | | (d) Clearinghouse for the sharing of identification and | 12 | | verification information of qualifying businesses. The | 13 | | Commission shall within 90 days after the effective date of | 14 | | this amendatory Act of the 98th General Assembly, after hearing | 15 | | and by order, authorize a participating entity-formed entity or | 16 | | arrangement whereby participating entities shall operate and | 17 | | fund the operation of a Commission-supervised Clearinghouse. | 18 | | In authorizing a participating entity-formed
entity or | 19 | | arrangement, the Commission must identify sufficient terms and
| 20 | | conditions to specify how verifications and audits shall be | 21 | | performed, to develop a Request for Proposals to solicit bids | 22 | | from vendors who will design and maintain the Clearinghouse | 23 | | website, and to
ascertain and ensure that the Clearinghouse is | 24 | | operated in accordance with this
Section and other applicable
| 25 | | legal requirements. | 26 | | The primary purpose of the Clearinghouse shall be to audit |
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| 1 | | and verify the status
of qualifying businesses and to establish | 2 | | and maintain a database of qualifying businesses that is
| 3 | | accessible to the Commission and to participating entities. | 4 | | The Clearinghouse auditing and verification program shall | 5 | | preclude the need for
an individual participating entity to | 6 | | audit and verify the status of the qualifying businesses it | 7 | | does
business with. | 8 | | The Clearinghouse shall distribute renewal verification | 9 | | forms to female owned businesses or minority owned businesses | 10 | | at least
once every 3 years. If the renewal is not completed | 11 | | and returned within a
reasonable time, the Clearinghouse shall | 12 | | notify the female owned business or minority owned business and | 13 | | participating entities that the
female owned business or | 14 | | minority owned business will not be listed as a verified female | 15 | | owned business or minority owned business in the shared | 16 | | database until the
renewal is completed. | 17 | | (e) Participating entity implementation. | 18 | | (1) Each participating entity's program shall be | 19 | | designed to ensure that qualifying businesses are | 20 | | encouraged to become potential suppliers of products and | 21 | | services to the participating entities
subject to this | 22 | | Section. Nothing in this Section authorizes or permits a | 23 | | participating entity to utilize set asides,
preferences, | 24 | | or quotas in administration of its program. The | 25 | | participating entity
retains its authority to use its | 26 | | legitimate business judgment to select the supplier
for a |
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| 1 | | particular contract. | 2 | | (2) Each participating entity shall maintain an | 3 | | appropriately sized staff to provide overall
program | 4 | | direction and guidance and to implement program | 5 | | requirements. Each participating entity shall ensure that | 6 | | its employees with procurement
responsibilities receive | 7 | | training in the implementation of its
program. | 8 | | (3) Each participating entity shall implement an | 9 | | outreach program to inform and recruit
qualifying | 10 | | businesses to apply for procurement contracts.
Outreach | 11 | | activities may vary for each participating entity | 12 | | depending on its size,
service territory, and specific | 13 | | lines of business. However, each
participating entity | 14 | | shall, at a minimum: | 15 | | (A) actively seek out opportunities to identify | 16 | | qualifying businesses and to expand qualifying | 17 | | business source pools; | 18 | | (B) actively support the efforts of organizations | 19 | | experienced in
the field who promote the interests of | 20 | | qualifying businesses; | 21 | | (C) work with qualifying businesses to facilitate | 22 | | contracting
relationships by explaining participating | 23 | | entity qualification requirements,
bid and contracting | 24 | | procedures, materials requirements,
invoicing and | 25 | | payment schedules, and other procurement
practices and | 26 | | procedures; |
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| 1 | | (D) at the request of any unsuccessful qualifying | 2 | | business bidder, provide
information concerning the | 3 | | relative range or ranking of the
qualifying business's | 4 | | bid as contrasted with the successful
bid; information | 5 | | on additional selection criteria, such as
warranty | 6 | | periods, maintenance costs, and delivery capability,
| 7 | | shall be provided when requested if disclosure would | 8 | | not
violate the proprietary nature of the specific | 9 | | contract element; | 10 | | (E) to the extent possible, make available to | 11 | | qualifying businesses lists of participating entity | 12 | | purchase and contract categories that
offer them the | 13 | | best opportunity for success; | 14 | | (F) encourage employees involved in procurement | 15 | | activities to
break apart purchases and contracts as | 16 | | appropriate to
accommodate the capabilities of | 17 | | qualifying businesses; and | 18 | | (G) summarize this Section in its outreach program
| 19 | | handouts. | 20 | | Each participating entity is directed to offer the same | 21 | | assistance set forth in
this subsection (e) to entities that | 22 | | are not qualifying businesses, upon request. | 23 | | (f) Subcontracting. Each participating entity shall | 24 | | establish and maintain a subcontracting program for the
purpose | 25 | | of encouraging its prime contractors to utilize qualifying | 26 | | businesses. The subcontracting program shall serve as an |
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| 1 | | enhancement to, and
not as a replacement for, the participating | 2 | | entity's prime contractor
outreach program. The subcontracting | 3 | | program shall apply to: | 4 | | (A) purchases or contracts exceeding $500,000 for | 5 | | products and
services; | 6 | | (B) construction contracts exceeding $1,000,000; and | 7 | | (C) purchases or contracts that offer subcontracting
| 8 | | opportunities to qualifying businesses, regardless of | 9 | | value, where appropriate. | 10 | | The subcontracting program need not be applied to the
| 11 | | procurement of products manufactured for general consumption,
| 12 | | such as paper, pens, and the like. | 13 | | Each participating entity shall encourage and assist its | 14 | | prime contractors to
develop plans to increase the utilization | 15 | | of qualifying businesses as
subcontractors. Prime contractors | 16 | | shall be encouraged to submit
to the participating entity plans | 17 | | that include goals for the utilization of
qualifying businesses | 18 | | as subcontractors. These plans may be incorporated
into the | 19 | | contract between the participating entity and the prime | 20 | | contractor. The
prime contractor may submit periodic reports on | 21 | | its compliance
with the plan to the participating entity. | 22 | | Each participating entity is encouraged to incorporate in | 23 | | all purchase orders,
requests for bid proposals, and other | 24 | | appropriate procurement
documents related to procurement | 25 | | efforts subject to the
subcontracting program, a statement in | 26 | | substantially the following form: |
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| 1 | | "UTILIZATION OF FEMALE OWNED BUSINESSES, MINORITY | 2 | | OWNED BUSINESSES, AND QUALIFIED SERVICE-DISABLED | 3 | | VETERAN-OWNED SMALL BUSINESSES | 4 | | (1) It is the policy of (insert the name of the | 5 | | participating entity) that female owned businesses, | 6 | | minority owned businesses, or qualified service-disabled | 7 | | veteran-owned small businesses shall have the
maximum | 8 | | practicable opportunity to participate in the
performance | 9 | | of contracts. However, this policy shall not be
used to | 10 | | exclude other qualified businesses from participating
in | 11 | | participating entity contracting. | 12 | | (2) The contractor agrees to use his or her best | 13 | | efforts to carry
out this policy in the award of | 14 | | subcontracts to the fullest
extent consistent with the | 15 | | efficient performance of this
contract. | 16 | | (3) The contractor agrees to inform prospective female | 17 | | owned businesses, minority owned businesses, or qualified | 18 | | service-disabled veteran-owned small businesses of their | 19 | | opportunity to request from the
Clearinghouse a | 20 | | verification application form and to return
the completed | 21 | | form to the Clearinghouse for processing and
inclusion in | 22 | | the database.". | 23 | | Each participating entity is encouraged to inform | 24 | | suppliers of products and
services that suppliers' good faith | 25 | | efforts to subcontract with
qualifying businesses is a factor | 26 | | that will be considered in the bid evaluation
process. A |
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| 1 | | statement to that effect could be included in all
appropriate | 2 | | procurement documents. | 3 | | Each participating entity shall monitor and include in its | 4 | | annual report to the
Commission a summary of prime contractor | 5 | | progress in increasing
the participation of qualifying | 6 | | businesses. Each participating entity shall include in its | 7 | | annual plan a description of future
plans for encouraging prime | 8 | | contractors to
engage qualifying businesses in all procurement | 9 | | categories
that provide subcontracting opportunities. Each | 10 | | participating entity may include awards to verified qualifying | 11 | | businesses in its results. | 12 | | (g) Goals. Each participating entity shall set substantial | 13 | | and verifiable short-term, mid-term, and long-term goals for | 14 | | the utilization of qualifying businesses. Goals shall
be set | 15 | | annually for each major product and service category that | 16 | | provides
opportunities for procurement. A goal shall be | 17 | | considered substantial if it is realistic
and clearly | 18 | | demonstrates a participating entity's commitment to encourage | 19 | | the participation of
qualifying businesses in participating | 20 | | entity purchases and contracts. The participating entities | 21 | | shall consider the following factors in setting their goals: | 22 | | (A) total participating entity purchasing and | 23 | | contracting projections; | 24 | | (B) availability of qualifying businesses and | 25 | | competitiveness in the geographical
area served by the | 26 | | participating entity; |
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| 1 | | (C) market dynamics based on historical data and | 2 | | trends; and | 3 | | (D) other appropriate factors that would increase the | 4 | | qualifying businesses' share
of participating entity | 5 | | business. | 6 | | Each participating entity shall establish initial minimum | 7 | | long-term goals for each major
category of products and | 8 | | services the participating entity purchases from outside | 9 | | vendors
of not less than 11% for minority owned businesses and | 10 | | not less
than 7% for female owned businesses. For the purposes | 11 | | of this
Section, contracts with minority female owned | 12 | | businesses can be
counted toward either the minority owned | 13 | | business goal or the
female owned business goal, but not toward | 14 | | both. Similarly,
contracts with qualified service-disabled | 15 | | veteran-owned small businesses can be counted either as
| 16 | | service-disabled veteran-owned small business procurement or | 17 | | the appropriate female
or minority business goal, but not | 18 | | toward both. The goal for
qualified service-disabled | 19 | | veteran-owned small business participation in procurement
| 20 | | programs of the participating entities is set at 3%. | 21 | | The specification of initial long-term goals in this | 22 | | subsection shall not prevent the
participating entities from | 23 | | seeking to reach a goal of awarding
20% or more of their | 24 | | contracts to female owned, minority owned, and | 25 | | service-disabled veteran-owned businesses. | 26 | | Goals shall also be established for both minority female |
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| 1 | | owned businesses and non-minority female owned businesses. | 2 | | These goals
are to be a subset of the overall goal for female | 3 | | owned businesses and minority owned businesses established by | 4 | | this subsection (g). These goals are intended to ensure that | 5 | | participating entities
do not direct their female owned | 6 | | business and minority owned business procurement programs | 7 | | toward non-minority
female owned businesses and minority male | 8 | | owned businesses to the detriment or
exclusion of minority | 9 | | female owned businesses. | 10 | | Goals shall be set for each major category of products or | 11 | | services.
For each major category of
products and services | 12 | | where the minimum long-term goals required by
this subsection | 13 | | (g) are not met, the participating entity shall include a | 14 | | comprehensive discussion
and detailed description of any | 15 | | efforts made to find or recruit qualifying businesses'
| 16 | | suppliers of products or services in areas where qualifying | 17 | | businesses' suppliers are
currently the only available | 18 | | procurement method. The participating entity may also explain
| 19 | | in detail in its annual report how its ability to meet its | 20 | | qualifying business's goals are
affected because the | 21 | | qualifying businesses capable of supplying certain products | 22 | | and
services are unavailable, or because sole source | 23 | | procurement is the only
available procurement method. | 24 | | A participating entity that, on the effective date of this | 25 | | Section, is purchasing products or services from affiliates
may | 26 | | subtract the dollars paid to affiliates for these products or |
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| 1 | | services from
the total dollars used as the basis for | 2 | | establishing goals for purchases from
qualifying businesses of | 3 | | these categories of products or services, provided that the | 4 | | participating entity
encourages the affiliate to establish an | 5 | | appropriate subcontracting program
where such affiliate | 6 | | employs subcontractors. Any participating entity that | 7 | | subtracts these dollars must, in its annual report to the | 8 | | Commission, state
whether the affiliates have established a | 9 | | subcontracting program and describe
the results of any such | 10 | | program. The participating entity's annual plan must
describe | 11 | | any future plans to encourage such a subcontracting program. | 12 | | Goals for each specific product or service category shall | 13 | | be expressed as a
percentage of total dollars awarded by a | 14 | | participating entity to outside vendors in that
category; | 15 | | however, where appropriate, non-numeric goals may also be
| 16 | | included. | 17 | | Overall program goals shall be expressed as a percentage of | 18 | | total dollars
awarded to outside vendors in all categories of | 19 | | products and services
purchased by a participating entity other | 20 | | than products and services related to fuel procurement. | 21 | | Payments to other public utilities, franchise tax fees, | 22 | | other taxes, and postage need
not be included in the standard | 23 | | procurement base used to establish goals. | 24 | | Each participating entity shall make special efforts to | 25 | | increase utilization and encourage
entry into the marketplace | 26 | | of qualifying businesses in product or service categories
where |
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| 1 | | there has been low utilization of qualifying businesses, such | 2 | | as legal and financial
services and areas that are considered | 3 | | technical in nature. | 4 | | No penalty shall be imposed for failure of any | 5 | | participating entity to meet or
exceed goals. | 6 | | Participating entities shall report their goals in an | 7 | | annual report. | 8 | | (h) Annual report. Each participating entity shall submit | 9 | | its annual report on its qualifying business program to the | 10 | | Executive Director by February 1 of each
year beginning in | 11 | | 2015.
The annual report shall contain at least: | 12 | | (1) a description of the activities of its qualifying | 13 | | business program engaged in during the
previous calendar | 14 | | year, including both internal
and external activities; | 15 | | (2) a summary of purchases and contracts with | 16 | | qualifying businesses, with
breakdowns by qualifying | 17 | | business (female, minority, service-disabled veteran), | 18 | | product, and service categories compared
with total | 19 | | contract dollars awarded to outside vendors in
those | 20 | | categories; | 21 | | (3) an itemization of its qualifying business program | 22 | | expenses, provided in the
format required by the | 23 | | Commission; | 24 | | (4) a description of its progress in meeting or | 25 | | exceeding set goals and an
explanation of any circumstances | 26 | | that may have caused the participating entity
to fall short |
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| 1 | | of its goals; | 2 | | (5) a summary of prime contractor utilization of | 3 | | qualifying business subcontractors; and | 4 | | (6) a description of any efforts made to recruit | 5 | | qualifying business suppliers of
products or services in | 6 | | procurement categories where qualifying business
| 7 | | utilization has been low, such as legal and financial | 8 | | services and areas that are considered highly technical in
| 9 | | nature. | 10 | | Participating entities shall retain all documents and data | 11 | | they rely on in
preparing their annual report for the longer of | 12 | | either
3 years or in conformance with the a participating | 13 | | entity's individual
document retention policies, and shall | 14 | | provide these documents and
data to the Commission upon | 15 | | request. | 16 | | (i) Complaint process. The Commission shall within 90 days | 17 | | after the effective date of this amendatory Act of the 98th | 18 | | General Assembly establish, after hearing and by order, a | 19 | | complaint process that addresses: | 20 | | (A) complaints by business enterprises whose status | 21 | | has been denied by the Clearinghouse, or who have been | 22 | | deverified by the Clearinghouse; | 23 | | (B) third-party complaints challenging the status of a | 24 | | business whose verification is pending or who has already | 25 | | been verified by the Clearinghouse; and | 26 | | (C) the complaint and appeal process. |
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| 1 | | (j) Limitation. Nothing in this Section shall prohibit any | 2 | | participating entity from breaking down
specific categories | 3 | | further than specifically required under this Section. | 4 | | (k) Annual plan. Participating entities shall also submit a | 5 | | detailed and verifiable plan for encouraging qualifying | 6 | | business procurement in all categories to the Executive | 7 | | Director by February 1 of each
year, beginning in 2015. The | 8 | | annual plan shall contain at least: | 9 | | (A) the short-term, mid-term, and long-term goals set | 10 | | as required by this Section; | 11 | | (B) a description of qualifying business program | 12 | | activities planned for the next
calendar year, which shall | 13 | | include both internal and
external activities; | 14 | | (C) plans for recruiting qualifying business suppliers | 15 | | of products or services
where utilization of qualifying | 16 | | businesses has been low, such as legal and financial
| 17 | | services and areas that are considered highly
technical in | 18 | | nature; | 19 | | (D) plans for seeking and recruiting qualifying | 20 | | business suppliers of products or
services where | 21 | | qualifying business suppliers are currently unavailable; | 22 | | (E) plans for encouraging prime contractors to
engage | 23 | | qualifying businesses in subcontracts in all categories | 24 | | that provide
subcontracting opportunities; and | 25 | | (F) plans for complying with the qualifying business | 26 | | program guidelines
established by the Commission. |
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| 1 | | (l) Commission report. The Commission shall provide a | 2 | | report to the General Assembly on or before January 31, 2014, | 3 | | describing the Commission's and participating entities' | 4 | | progress toward implementing this Section. Thereafter, the | 5 | | Commission shall provide an annual report to the General | 6 | | Assembly, beginning with the first such report on or before May | 7 | | 1, 2015, on the progress of activities undertaken by each | 8 | | participating entity to implement
this Section.
In this report, | 9 | | the Commission shall recommend a program to enhance | 10 | | implementation of
the policy declared in this Section, together | 11 | | with recommendations for legislation it deems necessary or
| 12 | | desirable to further that policy. This report shall include | 13 | | recommendations to the participating entities for the | 14 | | achievement
of maximum results in implementing this Section.
| 15 | | Section 99. Effective date. This Act takes effect upon | 16 | | becoming law.".
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