THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY WHEATLEY, CALTAGIRONE, HORNAMAN, PAYTON AND YOUNGBLOOD, DECEMBER 20, 2011

REFERRED TO COMMITTEE ON LOCAL GOVERNMENT, DECEMBER 20, 2011  

AN ACT

Amending Title 62 (Procurement) of the Pennsylvania Consolidated

Statutes, further providing for definitions; providing for

authority to waive employee limit, for alternative

certification, for contractor performance and general

conditions, for mentor-protégé program and for small business

reserve program; establishing a surety bond guarantee

program; and further providing for contractors' and

subcontractors' payment obligations.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Section 2102 of Title 62 of the Pennsylvania

Consolidated Statutes is amended to read:

§ 2102.  Definitions.

[Subject] Notwithstanding section 103 (relating to

definitions) and subject to section 2103 (relating to

regulations), the following words and phrases when used in this

chapter shall have the meanings given to them in this section

unless the context clearly indicates otherwise:

"Commonwealth agency."  The term shall include the following:

(1)  Any office, department, authority, board, multistate

agency or commission of the executive branch, including:

(i)  The Office of the Governor.

(ii)  The Office of Attorney General, the Department

of the Auditor General and the Treasury Department.

(iii)  An organization established by the

Constitution of Pennsylvania or a statute or executive

order that performs or is intended to perform an

essential governmental function.

(2)  The term shall not include a judicial or legislative

agency.

"Disadvantaged business."  A small business which is owned or

controlled by a majority of persons, not limited to members of

minority groups, who:

(1)  have been deprived of the opportunity to develop and

maintain a competitive position in the economy because of

social disadvantages[.]; or

(2)  are veterans, including service-disabled veterans.

"Governmental agency."  A Commonwealth agency, local agency,

independent agency, State-affiliated entity or State-related

institution. The term shall not include any local library,

county library, library system, district library center or

Statewide library resource center as those terms are defined in

the act of June 14, 1961 (P.L.324, No.188), known as The Library

Code, or to any nonprofit organization that performs or is

intended to perform an essential governmental function.

"Independent agency."  Any board, commission or other agency

or officer of the Commonwealth that is not subject to the policy

supervision and control of the Governor. The term shall not

include a legislative agency or a judicial agency.

"Judicial agency."  A court of the Commonwealth or any other

entity or office of the unified judicial system.

"Legislative agency."  Any of the following:

(1)  The Senate.

(2)  The House of Representatives.

(3)  The Capitol Preservation Committee.

(4)  The Center for Rural Pennsylvania.

(5)  The Joint Legislative Air and Water Pollution

Control and Conservation Committee.

(6)  The Joint State Government Commission.

(7)  The Legislative Budget and Finance Committee.

(8)  The Legislative Data Processing Committee.

(9)  The Independent Regulatory Review Commission.

(10)  The Legislative Reference Bureau.

(11)  The Local Government Commission.

(12)  The Pennsylvania Commission on Sentencing.

(13)  The Legislative Reapportionment Commission.

(14)  The Independent Fiscal Office.

(15)  The Legislative Audit Advisory Commission.

(16)  Any other office, commission, committee or agency

of the General Assembly, or a caucus thereof, whose general

operation is funded separately through a General Fund

appropriation.

"Local agency."  Any of the following:

(1)  Any political subdivision, intermediate unit,

charter school, cyber charter school or public trade or

vocational school.

(2)  Any local, intergovernmental, regional or municipal

agency, authority, council, board, commission or similar

governmental entity.

"Service-disabled veteran."  A veteran who possesses either

an adjudication letter from the United States Veterans'

Administration establishing a service-connected disability

rating or a disability determination from the Department of

Defense.

"Small business."  A business in the United States which is

independently owned, is not dominant in its field of operation

and employs 100 or fewer employees.

"State-affiliated entity."  A Commonwealth authority or

Commonwealth entity. The term includes the Pennsylvania Higher

Education Assistance Agency and any entity established thereby,

the Pennsylvania Gaming Control Board, the Pennsylvania Game

Commission, the Pennsylvania Fish and Boat Commission, the

Pennsylvania Housing Finance Agency, the Pennsylvania Municipal

Retirement Board, the State System of Higher Education, a

community college, the Pennsylvania Turnpike Commission, the

Pennsylvania Public Utility Commission, the Pennsylvania

Infrastructure Investment Authority, the State Public School

Building Authority, the Pennsylvania Interscholastic Athletic

Association and the Pennsylvania Higher Educational Facilities

Authority. The term shall include a State-related institution.

"State-related institution."  Includes:

(1)  Temple University.

(2)  The University of Pittsburgh.

(3)  The Pennsylvania State University.

(4)  Lincoln University.

"Veteran."  An individual who:

(1)  Served in the active United States military in any

of the four current branches and all previous branches,

including a reserve component or the National Guard.

(2)  Was released or discharged from active military

service under conditions other than dishonorable.

(3)  Possesses a certificate of release or discharge from

active duty.

Section 2.  Title 62 is amended by adding sections to read:

§ 2104.1.  Authority to waive employee limit.

(a)  Authority to waive.--The department or a Commonwealth

agency may, at its discretion and where it is determined to be

in the best interest of this Commonwealth, waive the small

business employee limit requirement as established in the

definition of "small business" in section 2102 (relating to

definitions) in order to promote and create economic

opportunities for disadvantaged businesses.

(b)  Inclusion of employee limit in bid document.--The

department or a Commonwealth agency shall inform prospective

bidders of the decision to waive the small business employee

limit for disadvantaged businesses by including notice of the

waiver in the invitation for bid, request for proposal or any

other document that is subject to an employee limit waiver,

prior to its release for bidding or solicitation purposes by the

department or a Commonwealth agency.

(c)  Subsequent determination to waive notice.--If the

department or a Commonwealth agency determines that the small

business employee limit should be waived subsequent to the

release of an invitation for bid, request for proposal or any

other such document, the department or Commonwealth agency shall

take appropriate action to ensure the inclusion of disadvantaged

businesses in bidding requirements or solicitation of proposals

and provide prompt notice to all prospective bidders and

offerors of the determination to waive the small business

employee limit.

(d)  Report.--The department shall include in its annual

report to the General Assembly information on its use of the

small business employee limit waiver authorized under this

section. The report shall include, but may not be limited to,

the following information for the preceding calendar year:

(1)  The number of times the employee limit was waived

prior to the release of an invitation for bid, request for

proposal or other document and the reason for imposing the

waiver.

(2)  The number of times the employee limit was waived

following the release of an invitation for bid, request for

proposal or other document and the reason for the subsequent

determination to waive the small business employee limit

requirement.

(3)  The identity and geographic location of the

disadvantaged businesses subject to an employee limit waiver.

(4)  The number of employees of each disadvantaged

business subject to an employee limit waiver.

(5)  The dollar amount of each contract awarded which

included a small business employee limit waiver.

(e)  Applicability.--The provisions of this section shall

apply to any eligible "disadvantaged business" as defined under

section 2102.

§ 2109.  Alternative certification.

(a)  Acceptance of alternative certification authorized.--To

establish greater uniformity in the Commonwealth's disadvantaged

business certification process, the department may accept the

certification of any eligible disadvantaged business certified

under the Pennsylvania Unified Certification Program as

established by the department in accordance with the

requirements of 49 CFR Subtitle Pts. 23 (relating to

participation of disadvantaged business enterprise in airport

concessions) and 26 (relating to participation by disadvantaged

business enterprises in Department of Transportation financial

assistance programs). However, the department shall not certify

or accept any certification from an owner of a disadvantaged

business who is not a citizen or lawful permanent resident of

the United States.

(b)  Reciprocity.--Notwithstanding any provision of law,

regulation, guideline or policy statement to the contrary, the

certification of any disadvantaged business enterprise by the

department in accordance with subsection (a) shall be accepted

and used by a governmental agency as adequate certification for

the purpose of bidding on or participating in any public bid,

contract or award, the execution of which involves the use of

Commonwealth funds.

(c)  Disadvantaged business utilization program.--

(1)  Each governmental agency receiving Commonwealth

funds may establish a disadvantaged business utilization

program which encourages the participation and use of

disadvantaged businesses in the performance of Commonwealth-

funded contracts.

(2)  A governmental agency that fails to establish a

disadvantaged business utilization program in accordance with

paragraph (1) shall adopt and implement the program

established by the department.

(d)  Adoption of procurement practices.--The department shall

provide assistance to the Auditor General, the State Treasurer,

the Attorney General and appropriate officers in the legislative

and judicial agencies to develop best procurement practices

specific to the constitutional and statutory functions of each

office and agency and consistent with the provisions of this

title and regulations related to procurement by disadvantaged

businesses. To facilitate participation by disadvantaged

businesses in procurement by constitutional offices and the

judicial and legislative agencies, such constitutional officers

and purchasing agents of any judicial agency or legislative

agency may adopt the procurement practices and utilization

program used by the department to promote participation by

disadvantaged businesses in contracting, subcontracting and

purchasing.

§ 2110.  Contractor performance; general conditions.

Each Commonwealth agency taking bids in connection with the

award of any contract shall provide in the general conditions,

under which a bid will be received, that any person making a bid

as a prime contractor shall, in his bid or offer, set forth the

following information:

(1)  The name and business address of the place of

business of each subcontractor certified as a disadvantaged

business that will perform work or labor or render service to

the prime contractor in connection with the performance of

the contract and that will be used by the prime contractor to

fulfill disadvantaged business participation goals.

(2)  The portion of the contract that will be performed

by each subcontractor under paragraph (1). Except that, in

the case of an emergency where a contract is necessary and

essential for the immediate preservation of the public

health, welfare or safety or the protection of State

property, the prime contractor shall list only one

subcontractor for each portion of the contract as is defined

by the prime contractor in his bid or offer.

(3)  A statement of the efforts made to negotiate with

disadvantaged businesses, including the name, address and

telephone number of any disadvantaged business contacted by

the prime contractor; the date the negotiations took place,

if any; and a description of the information provided to the

disadvantaged businesses regarding the plans, specifications

and requirements for the portion of the contract proposed to

be performed by the disadvantaged business.

(4)  The bid or offer may also set forth any of the

following information:

(i)  Whether the person or a representative of the

person attended any prebid or preproposal conferences.

(ii)  A copy of any written notification of the bid

or offer to perform a contract sent by certified mail,

return receipt requested, or electronic mail, read

receipt, to disadvantaged businesses that perform the

type of work to be subcontracted in sufficient time to

allow the disadvantaged businesses to participate

effectively.

(iii)  The specific work the person intends to

subcontract, that interest in the project is being

solicited and how to obtain information for the review

and inspection of the plans, specifications and

requirements of the invitation for bids or requests for

proposals.

(iv)  A statement of whether economically feasible

portions of the contract will be performed by

disadvantaged businesses, including, where appropriate,

segmenting or combining elements of a contract into

economically feasible units.

(v)  Information on whether the person or a

representative of the person consulted with the Bureau of

Minority and Women Business Opportunities to ensure

significant contracting, subcontracting and purchasing

opportunities for disadvantaged businesses.

(vi)  Information on whether the person or a

representative of the person participated in any outreach

activities or events to increase disadvantaged business

interest and participation in contracting, subcontracting

and purchasing opportunities.

(vii)  Information on use of the department's

Internet website to identify certified disadvantaged

businesses as prospects for contracting, subcontracting

and purchasing opportunities in connection with a bid or

offer.

(viii)  Any solicitation of certified disadvantaged

businesses for contracting, subcontracting or purchasing

opportunities and inclusion of certified disadvantaged

businesses on solicitation lists.

(ix)  Records of solicitations, including a bid

tabulation, showing the names of all disadvantaged

businesses solicited and the dollar amount of the bid,

quote or proposal, as well as copies of all bids, quotes

and proposals received.

(x)  Any quarterly reports or other report provided

to the Bureau of Minority and Women Business

Opportunities depicting disadvantaged business

utilization.

(xi)  Evidence demonstrating any good faith effort in

the oversight of and timely payment, as provided under

Subchapter D of Chapter 39 (relating to prompt payment

schedules), to disadvantaged businesses and to maintain

the commitment made to any disadvantaged business that

served as a subcontractor at the time the subcontract was

awarded, and thereafter.

§ 2111.  Mentor-protégé program.

(a)  Establishment and purpose of program.--

(1)  The department shall establish a mentor-protégé

program to assist disadvantaged businesses in enhancing their

capabilities to compete for and perform prime contracts and

subcontracts awarded by a Commonwealth agency.

(2)  The purpose of the mentor-protégé program is to

foster long-term business relationships between disadvantaged

businesses and prime contractors in order to facilitate their

growth and development and increase their prime contracting

and subcontracting opportunities with Commonwealth agencies.

(b)  General rule.--A prime contractor that is approved as a

mentor by the department may enter into a written agreement with

a disadvantaged business to provide developmental assistance to

enhance the disadvantaged business's contracting and

subcontracting capabilities. Developmental assistance provided

by a mentor prime contractor to its protégé disadvantaged

business may include, but not be limited to, the following:

(1)  Management assistance, including financial

management, organizational management, business management

and planning and business development.

(2)  Technical assistance.

(3)  Financial assistance.

(4)  Temporary employee assistance.

(5)  Use of facilities, equipment or property without

charge.

(6)  Any other type of developmental assistance as

approved by the department.

(c)  Factor to be considered.--Notwithstanding any other

provision of this title to the contrary, the mentor-protégé

arrangement between a prime contractor and a disadvantaged

business whereby the disadvantaged business serves as a joint

venture partner or subcontractor to the prime contractor shall

be an important factor to be considered or weighed by a

Commonwealth agency in awarding a contract under sections 513

(relating to competitive sealed proposals), 517 (relating to

multiple awards), 518 (relating to competitive selection

procedures for certain services) and 519 (relating to selection

procedure for insurance and notary bonds).

(d)  Guidelines.--The department shall adopt and publish

guidelines to enforce and carry out the requirements of this

section. The guidelines shall be published in the Pennsylvania

Bulletin and shall include, but may not be limited to, the

following:

(1)  Selection criteria for mentor and protégé

businesses.

(2)  An application process, including an application

form to be used by prime contractors seeking to participate

in the mentor-protégé program and time frame for review.

(3)  Criteria for measuring program impact and success.

(4)  The required contents of a mentor-protégé written

agreement. Each written agreement shall specify the type of

developmental assistance that will be provided by the mentor

to the protégé disadvantaged business.

§ 2112.  Small business reserve program.

(a)  Small business reserve.--The department shall establish

a small business reserve program for the purpose of increasing

economic opportunities for small and disadvantaged businesses

and affording small and disadvantaged businesses the opportunity

to bid on State government contracts without competing with

larger businesses. All procurement by the department shall be

eligible for designation for the small business reserve program

and shall be published in the same manner as required for a

request for proposal or an invitation for bid.

(b)  Reserve account.--Notwithstanding any other provision of

this title to the contrary, the department shall structure its

procurement procedures to reserve up to 10% of the total dollar

value of its procurement contracts, including public works,

construction and professional services and designed professional

services contracts, to be made directly to qualified small and

disadvantaged businesses. However, the total dollar value of

procurements by the department shall not include the value of

any contract to which this subsection would not apply because of

a conflict with Federal law.

(c)  Awards.--The department shall award a procurement

contract designated for a small business reserve to the small

and disadvantaged business that submits a bid or proposal that:

(1)  is the lowest bid price;

(2)  is the lowest evaluated bid price, if the invitation

for bid or request for proposal so provides; or

(3)  is in the best interest of the Commonwealth.

(d)  Other Commonwealth agencies.--

(1)  A Commonwealth agency may collaborate with the

department to structure its procurement procedures to provide

for a small business reserve program which shall be subject

to the requirements of this section.

(2)  Upon request, the department shall assist the

procurement unit of a Commonwealth agency with the

development and implementation of a small business reserve.

(e)  Construction and application.--

(1)  The provisions of this section shall not be

construed to preclude any small and disadvantaged business

from competing for any other contracts that is not

specifically designated for the small business reserve

program.

(2)  The provisions of this section shall apply to any

eligible small business as defined under section 2102

(relating to definitions).

(f)  Regulations.--The department shall adopt and promulgate

regulations to govern the provisions of this section. The

regulations shall:

(1)  Establish a comprehensive bidder's list of eligible

small and disadvantaged businesses.

(2)  Provide procedures for maintaining the list in

paragraph (1).

(3)  Include any other information the department

determines necessary and appropriate to carry out the

provisions of this section.

(g)  Reports.--On or before December 31, 2014, and on or

before each December 31 thereafter, the department shall submit

a report to the Chief Clerk of the Senate and the Chief Clerk of

the House of Representatives on the operation and effectiveness

of the small business reserve program. The department may submit

the report electronically. The report shall include the

following:

(1)  The total number and dollar value of payments the

department made to small and disadvantaged businesses

pursuant to designated small business reserve contracts.

(2)  The total number and dollar value of payments the

department made to small and disadvantaged businesses that

were not designated as small business reserve contracts.

(3)  The total dollar value of payments made by the

department under procurement contracts.

(4)  Information on any Commonwealth agency that has

implemented a small business reserve program, including

information required under paragraphs (1), (2) and (3).

(5)  Any other information or recommendations the

department determines necessary.

Section 3.  Title 62 is amended by adding a chapter to read:

CHAPTER 21-A

SURETY BOND GUARANTEE PROGRAM

Sec.

2101-A.  Definitions.

2102-A.  Establishment of program.

2103-A.  Surety Bond Guarantee Fund.

2104-A.  Contract eligible for guarantee.

2105-A.  Disadvantaged business participation.

2106-A.  Criteria for denying program participation.

2107-A.  Duties of department.

2108-A.  Regulations.

§ 2101-A.  Definitions.

The following words and phrases when used in this chapter

shall have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Applicant."  A disadvantaged business as defined in this

chapter.

"Department."  The Department of Community and Economic

Development of the Commonwealth.

"Disadvantaged business."  A small business which is owned or

controlled by a majority of persons, not limited to members of

minority groups, who have been deprived of the opportunity to

develop and maintain a competitive position in the economy

because of social disadvantages. The term shall include a small

business which is owned or controlled by a majority of persons

who are veterans, including service-disabled veterans.

"Fund."  The Surety Bond Guarantee Fund established in

section 2103-A (relating to Surety Bond Guarantee Fund).

"Program."  The Surety Bond Guarantee Fund Program

established in this chapter.

"Secretary."  The Secretary of Community and Economic

Development of the Commonwealth.

"Service-disabled veteran."  A veteran who possesses either

an adjudication letter from the Department of Veterans' Affairs

establishing a service-connected disability rating or a

disability determination from the Department of Defense.

"Small business."  A business in the United States which is

independently owned, is not dominant in its field of operation

and employs 100 or fewer employees.

"Surety bond."  A guarantee in which the surety guarantees

that the contractor or principal in the bond will perform the

obligation stated in the bond. The term shall include the

following types of bonds:

(1)  Bid bonds that guarantee the bidder will enter into

a contract and furnish the required payment and performance

bonds.

(2)  Payment bonds that guarantee payment from the

contractor to parties who furnish labor, materials, equipment

and supplies.

(3)  Performance bonds that guarantee the contractor will

fulfill the contract in accordance with terms and conditions.

(4)  Ancillary bonds which may be incidental and

essential to the performance of the contract.

"Veteran."  An individual who:

(1)  Served in the active United States military in any

of the four current branches and all previous branches,

including a reserve component or the National Guard.

(2)  Was released or discharged from active military

service under conditions other than dishonorable.

(3)  Possesses a certificate of release or discharge from

active duty.

§ 2102-A.  Establishment of program.

The Surety Bond Guarantee Fund Program is established, to the

extent funds are appropriated specifically for the purposes of

this act, in the department. The purpose of the program is to

assist disadvantaged businesses to competitively bid for

governmental contracts.

§ 2103-A.  Surety Bond Guarantee Fund.

(a)  Fund established.--There is established the Surety Bond

Guarantee Fund within the State Treasury for the purpose of

assisting disadvantaged businesses to competitively bid for

certain Commonwealth contracts.

(b)  Fund administration.--The fund shall be administered by

the department. All moneys in the fund shall be used to finance

guarantees to bonding companies against percentages of losses

sustained as a result of defaults by qualified disadvantaged

businesses on a contract or project.

(c)  Payments from fund.--Surety bond guarantees made with

payments from the fund under the program shall not exceed the

sum of $1,000,000 for any one disadvantaged business.

§ 2104-A.  Contract eligible for guarantee.

(a)  Eligibility.--A bond guaranteeing the performance of a

contract or project shall be qualified and eligible for a surety

bond guarantee under the program if:

(1)  The bond is listed in the contract bonds section of

the Surety Association of America's "Manual of Rules,

Procedures and Classifications."

(2)  The bond is required by the contract, invitation for

bid or request for proposal.

(3)  The bond is executed by a surety company that is

acceptable to the Treasury Department and qualified by the

department.

(4)  The bond meets any other requirements established by

the department.

(b)  Required provision; notice of cancellation.--No bond

shall qualify or be eligible for a guarantee under the program

unless it contains a provision affirming that the bond shall not

be canceled for any cause unless notice of intention to cancel

is given to the department at least 30 days before the day upon

which cancellation shall take effect. Cancellation of the bond

shall not invalidate the bond regarding the period of time it

was in effect.

§ 2105-A.  Disadvantaged business participation.

(a)  Application process.--A disadvantaged business may apply

to participate in the program by filing an application with the

department. The department shall review the application to

determine if the applicant is eligible to participate in the

program within 30 days of receipt of the completed application.

The department may extend the review period for an additional 30

days if it determines that additional time is needed to complete

the review process. The department shall notify the applicant in

writing of the extended period, including the date it will reach

its final decision.

(b)  Investigation.--Upon receipt of a completed application,

the department may conduct an investigation of the applicant,

including an investigation of its owners, officers, directors,

principals or agents, in order to determine whether the

applicant is eligible to participate in the program. If the

investigation finds and the department determines that an

applicant is not eligible to participate in the program, it

shall notify the applicant in writing that the applicant will

not be approved for program participation. The notification of

ineligibility shall include the reason the application was not

approved and that the applicant has the right to appeal the

department's determination to the secretary within 30 days of

the date of the notice.

(c)  Criteria for determining eligibility.--An applicant

shall be deemed eligible to participate in the program if the

department determines that an applicant meets all of the

following qualifications:

(1)  The applicant is a disadvantaged business certified

by the Department of General Services.

(2)  The applicant is in the construction or building

trade industry.

(3)  The applicant has been actively operating its

business for at least one year prior to the application date.

(4)  The applicant has the experience and financial

fitness appropriate to a qualified contract.

(5)  The applicant has agreed to subcontract no more than

75% of the work to be performed under a qualified contract or

project.

(6)  The applicant has demonstrated an inability to

secure bonding under normal market conditions.

(7)  The applicant or one of its owners, officers,

directors, principals or agents has not committed or been

convicted of any of the activities set forth in section 2106-

A (relating to criteria for denying program participation).

(8)  The applicant meets any other program requirements

that establish criteria for eligibility that the department

shall adopt by regulation, guideline or statement of policy

within 180 days of the effective date of this chapter.

§ 2106-A.  Criteria for denying program participation.

The department may not approve an application for program

participation if it determines that the applicant or one of its

owners, officers, directors, principals or agents committed or

has been convicted of the following:

(1)  Made a material misstatement in the application or

any other document required to be submitted by the

department, under a provision of this chapter or by the

Department of General Services under the provisions of this

title.

(2)  Failed to comply with or violated any provision of

this chapter or any regulation, order or statement of policy

issued by the department under this chapter or any

regulation, order or statement of policy issued by the

Department of General Services under this title.

(3)  Engaged in unfair or unethical conduct in connection

with the construction or building trade industry or in

violation of Chapter 23 (relating to ethics in public

contracting).

(4)  Does not possess the financial fitness, character,

reputation, integrity and general fitness sufficient to

warrant reasonable belief that the applicant's business will

be conducted lawfully, honestly and in the public interest.

(5)  Notwithstanding any other provision of law to the

contrary, been convicted of or pleaded guilty or nolo

contendere to a crime of moral turpitude or to an offense

graded as a felony.

(6)  Been enjoined by a court of competent jurisdiction

from engaging in the construction or building trade industry.

(7)  Has had a license issued by the department or any

other Federal, State or local agency denied, not renewed,

suspended or revoked.

(8)  Has had the certification as a disadvantaged

business issued by the Department of General Services

revoked.

(9)  Became the subject of a United States Postal Service

fraud order.

(10)  Demonstrated negligence or incompetence in

performing, or failure to perform, an act for which the

applicant is required to hold a license under any law of

this Commonwealth.

(11)  Has an outstanding debt to the Federal Government,

the Commonwealth or any Federal or Commonwealth agency or a

political subdivision of the Commonwealth or agency of a

political subdivision.

(12)  Became insolvent at any time prior to the

application date, meaning that the liabilities of the

applicant exceeded the assets of the applicant or that the

applicant could not meet the obligations of the applicant as

they matured or was in such financial condition that the

applicant could not continue in business without jeopardizing

the health, safety and welfare of its customers and

employees.

(13)  At any time prior to application, has failed to

disburse payments to subcontractors in a timely manner as

agreed to under a contract for any reason other than the

owner's failure to make the agreed-to payments to the

applicant or because such disbursement would constitute a

violation of applicable law or an order issued by a court or

administrative body of competent jurisdiction.

§ 2107-A.  Duties of department.

(a)  Technical assistance.--The department, in consultation

with the Department of General Services, shall provide technical

assistance to enable disadvantaged businesses to competitively

bid on State and other governmental contracts. Technical

assistance shall include, but not be limited to, assisting

disadvantaged businesses in responding to bid requests,

strengthening financial condition and addressing other concerns

raised or likely to be raised by a bonding company.

(b)  Monitoring program.--The department shall establish a

monitoring program to monitor the activities of disadvantaged

businesses participating in the program. The monitoring program

shall include inspections of projects approved for bond

guarantees to minimize the risk of calls on the fund. The

department shall promptly advise the disadvantaged business of

any deficiencies identified during an inspection. In the event

the deficiencies noted in the report are not promptly addressed

by the disadvantaged business to the satisfaction of the

department, the department may give the disadvantaged business a

reasonable period to correct the deficiencies or may report such

deficiencies to the issuing bond company.

§ 2108-A.  Regulations.

(a)  Adoption of regulations.--The department shall

administer and enforce the provisions of this chapter and shall

adopt and promulgate regulations, guidelines or policy

statements necessary to carry out the provisions of this

chapter.

(b)  Department of General Services.--The department shall

consult or collaborate with the Department of General Services

to carry out the provisions of this chapter. The Department of

General Services shall from time to time provide any technical

or staff assistance as may be required to assist the department

in carrying out the provisions of this chapter.

Section 4.  Section 3933(c) of Title 62 is amended to read:

§ 3933.  Contractors' and subcontractors' payment obligations.

* * *

(c)  Payment.--When a subcontractor has performed in

accordance with the provisions of the contract, a contractor

shall pay to the subcontractor, and each subcontractor shall in

turn pay to its subcontractors, the full or proportional amount

received for each such subcontractor's work and material, based

on work completed or services provided under the subcontract,

[14] seven days after receipt of a progress payment. Payment

shall be made under this section unless it is being withheld

under section 3934 (relating to withholding of payment for good

faith claims).

* * *

Section 5.  The provisions of this act are severable. If any

provision of this act or its application to any person or

circumstance is held invalid, the invalidity shall not affect

other provisions or applications of this act which can be given

effect without the invalid provision or application.

Section 6.  This act shall take effect as follows:

(1)  The following provisions shall take effect

immediately:

(i)  The amendment of 62 Pa.C.S. § 3933(c).

(ii)  This section.

(2)  The addition of 62 Pa.C.S. Ch. 21-A shall take

effect upon publication by the department in the Pennsylvania

Bulletin of the appropriation referenced in section 2102-A.

(3)  The remainder of this act shall take effect in 60

days.