Public Contract Code

§ 100 Division 1 The Legislature finds and declares that placing all public contract law in one code will make that law clearer and easier to find. Further, it is the intent of the Legislature in enacting this code to achieve the following objectives: (a) To clarify the law with respect to competitive bidding requirements. (b) To ensure full compliance with competitive bidding statutes as a means of protecting the public from misuse of public funds. (c) To provide all qualified bidders with a fair opportunity to enter the bidding process, thereby stimulating competition in a manner conducive to sound fiscal practices. (d) To eliminate favoritism, fraud, and corruption in the awarding of public contracts. (Amended by Stats. 1990, Ch. 485, Sec. 2.) § 101 Division 1 California public contract law should be efficient and the product of the best of modern practice and research. (Added by Stats. 1984, Ch. 42, Sec. 1.) § 102 Division 1 To encourage competition for public contracts and to aid public officials in the efficient administration of public contracting, to the maximum extent possible, for similar work performed for similar agencies, California’s public contract law should be uniform. (Added by Stats. 1984, Ch. 42, Sec. 1.) § 1100 Division 2, Part 1, Chapter 1 “Public entity,” as used in this part, means the state, county, city, city and county, district, public authority, public agency, municipal corporation, or any other political subdivision or public corporation in the state. (Added by Stats. 1982, Ch. 1120, Sec. 3.) § 1100.7 Division 2, Part 1, Chapter 1 This code is the basis of contracts between most public entities in this state and their contractors and subcontractors. With regard to charter cities, this code applies in the absence of an express exemption or a city charter provision or ordinance that conflicts with the relevant provision of this code. (Added by Stats. 2001, Ch. 832, Sec. 1. Effective January 1, 2002.) § 1101 Division 2, Part 1, Chapter 1 “Public works contract,” as used in this part, means an agreement for the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind. (Added by Stats. 1982, Ch. 1120, Sec. 3.) § 1102 Division 2, Part 1, Chapter 1 “Emergency,” as used in this code, means a sudden, unexpected occurrence that poses a clear and imminent danger, requiring immediate action to prevent or mitigate the loss or impairment of life, health, property, or essential public services. (Added by Stats. 1994, Ch. 803, Sec. 1. Effective January 1, 1995.) § 1103 Division 2, Part 1, Chapter 1 “Responsible bidder,” as used in this part, means a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the public works contract. The Legislature finds and declares that this section is declaratory of existing law. (Added by Stats. 1999, Ch. 972, Sec. 2. Effective January 1, 2000.) § 1104 Division 2, Part 1, Chapter 1 No local public entity, charter city, or charter county shall require a bidder to assume responsibility for the completeness and accuracy of architectural or engineering plans and specifications on public works projects, except on clearly designated design build projects. Nothing in this section shall be construed to prohibit a local public entity, charter city, or charter county from requiring a bidder to review architectural or engineering plans and specifications prior to submission of a bid, and report any errors and omissions noted by the contractor to the architect or owner. The review by the contractor shall be confined to the contractor’s capacity as a contractor, and not as a licensed design professional. (Added by Stats. 1999, Ch. 875, Sec. 1. Effective January 1, 2000.) § 1600 Division 2, Part 1, Chapter 1.6 Notwithstanding any other provision of law, counties, a city and county, and state agencies may enter into and make payment on contracts by way of electronic transmission, including, but not limited to, the issuance of solicitation documents, and the receipt of responses thereto. (Amended by Stats. 1998, Ch. 876, Sec. 15. Effective January 1, 1999.) § 1601 Division 2, Part 1, Chapter 1.6 (a) Any public entity may adopt methods and procedures to do any of the following: (1) Receive bids on public works or other contracts over the internet, but only if no bid can be opened before the bid deadline and all bids can be verified as authentic. (2) Receive supporting materials submitted pursuant to a public works or other contract over the internet. For purposes of this section, “supporting materials” includes, but is not limited to, resumes, references, licenses, specifications, certifications, applications, payment requests, shop drawings, schedules, notices of claims, and certified payrolls. (b) If a public entity allows or requires bids or supporting materials to be submitted over the internet, pursuant to this section, the public entity shall provide an electronic receipt to the contractor showing the date and time the submission was received. The public entity shall provide the electronic receipt to the contractor either by immediate transmission to the contractor or by providing the contractor access to an electronic file online that contains this information and that can be viewed and printed by the contractor. (Amended by Stats. 2026, Ch. 84, Sec. 23. (SB 172) Effective July 13, 2026.) § 1602 Division 2, Part 1, Chapter 1.6 The Department of General Services may develop, implement, and maintain secure electronic procurement platforms for use by public entities. These platforms may support the full life cycle of procurement, including, but not limited to, solicitation posting, bid submission, bid opening, evaluation, award, catalog-based ordering, and contract management. (Added by Stats. 2026, Ch. 84, Sec. 24. (SB 172) Effective July 13, 2026.) § 1603 Division 2, Part 1, Chapter 1.6 As used in this chapter: (a) “Bid” may include, but is not limited to, an offer, quote, or proposal. (b) “Catalog-based ordering” means the purchase of goods or services from electronic catalogs. (c) “Digital bid opening” means the process of unsealing and accessing bid information through secure electronic methods at a designated time. (d) “Electronic procurement platform” means a secure, web-based system to facilitate procurement activities. (e) “Secure platform” means a system with encryption, role-based access controls, automated audit logs, and data integrity protections. (Added by Stats. 2026, Ch. 84, Sec. 25. (SB 172) Effective July 13, 2026.) § 1604 Division 2, Part 1, Chapter 1.6 (a) A public entity posting solicitations and receiving bids through an electronic procurement platform shall still satisfy all statutory requirements for public advertising, bid submission, and document retention under this code, including the procurement platform requirements set forth in this chapter. (b) Nothing in this section is intended to waive or otherwise eliminate requirements, including requirements to print in newspapers or to advertise or otherwise post notices for solicitations, as may be required by this code. (Amended by Stats. 2026, Ch. 255, Sec. 18. (AB 184) Effective September 18, 2026.) § 1605 Division 2, Part 1, Chapter 1.6 An electronic procurement platform authorized under this chapter shall satisfy all of the following requirements: (a) Include time-stamped bid submissions and acknowledgments. (b) Maintain automated audit trails. (c) Comply with applicable state information security standards. (d) Allow vendors to access their submission history and receipts. (Added by Stats. 2026, Ch. 84, Sec. 27. (SB 172) Effective July 13, 2026.) § 1606 Division 2, Part 1, Chapter 1.6 Bid openings may be conducted electronically. The platform shall ensure that no bid is viewable before the deadline and that a verifiable digital record of the opening is maintained and made publicly accessible. (Added by Stats. 2026, Ch. 84, Sec. 28. (SB 172) Effective July 13, 2026.) § 1607 Division 2, Part 1, Chapter 1.6 This chapter shall supersede any conflicting provisions in code with respect to electronic procurement activities by public entities. (Added by Stats. 2026, Ch. 84, Sec. 29. (SB 172) Effective July 13, 2026.) § 2000 Division 2, Part 1, Chapter 2 (a) Notwithstanding any other provision of law requiring a local agency to award contracts to the lowest responsible bidder, a local agency may require that a contract be awarded to the lowest responsible bidder who also does either of the following: (1) Meets goals and requirements established by the local agency relating to participation in the contract by minority business enterprises and women business enterprises. If the bidder does not meet the goals and requirements established by the local agency for that participation, the local agency shall evaluate the good faith effort of the bidder to comply with those goals and requirements as provided in paragraph (2). (2) Makes a good faith effort, in accordance with the criteria established pursuant to subdivision (b), prior to the time bids are opened, to comply with the goals and requirements established by the local agency relating to participation in the contract by minority or women business enterprises. (b) (1) The bidder attended any presolicitation or prebid meetings that were scheduled by the local agency to inform all bidders of the minority and women business enterprise program requirements for the project for which the contract will be awarded. A local agency may waive this requirement if it determines that the bidder is informed as to those program requirements. (2) The bidder identified and selected specific items of the project for which the contract will be awarded to be performed by minority or women business enterprises to provide an opportunity for participation by those enterprises. (3) The bidder advertised, not less than 10 calendar days before the date the bids are opened, in one or more daily or weekly newspapers, trade association publications, minority or trade oriented publications, trade journals, or other media, specified by the local agency for minority or women business enterprises that are interested in participating in the project. This paragraph applies only if the local agency gave public notice of the project not less than 15 calendar days prior to the date the bids are opened. (4) The bidder provided written notice of the bidder’s interest in bidding on the contract to the number of minority or women business enterprises required to be notified by the project specifications not less than 10 calendar days prior to the opening of bids. To the extent possible, the local agency shall make available to the bidder not less than 15 calendar days prior to the date the bids are opened a list or a source of lists of enterprises which are certified by the local agency as minority or women business enterprises. If the local agency does not provide that list or source of lists to the bidder, the bidder may utilize the list of certified minority or women business enterprises prepared by the Department of Transportation pursuant to Section 14030.5 of the Government Code for this purpose. (5) The bidder followed up initial solicitations of interest by contacting the enterprises to determine with certainty whether the enterprises were interested in performing specific items of the project. (6) The bidder provided interested minority and women business enterprises with information about the plans, specifications, and requirements for the selected subcontracting or material supply work. (7) The bidder requested assistance from minority and women community organizations; minority and women contractor groups; local, state, or federal minority and women business assistance offices; or other organizations that provide assistance in the recruitment and placement of minority or women business enterprises, if any are available. (8) The bidder negotiated in good faith with the minority or women business enterprises, and did not unjustifiably reject as unsatisfactory bids prepared by any minority or women business enterprises, as determined by the local agency. (9) Where applicable, the bidder advised and made efforts to assist interested minority and women business enterprises in obtaining bonds, lines of credit, or insurance required by the local agency or contractor. (10) The bidder’s efforts to obtain minority and women business enterprise participation could reasonably be expected by the local agency to produce a level of participation sufficient to meet the goals and requirements of the local agency. (c) The performance by a bidder of all of the criteria specified in subdivision (b) shall create a rebuttable presumption, affecting the burden of producing evidence, that a bidder has made a good faith effort to comply with the goals and requirements relating to participation by minority and women business enterprises established pursuant to subdivision (a). (d) “Local agency,” as used in this section, means a county or city, whether general law or chartered, city and county, school district, or other district. “District,” as used in this section, means an agency of the state, formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries. (e) “Minority or women business enterprise,” as used in this section, means a business enterprise that meets both of the following criteria: (1) A business that is at least 51 percent owned by one or more minority persons or women or, in the case of any business whose stock is publicly held, at least 51 percent of the stock is owned by one or more minority persons or women. (2) A business whose management and daily business operations are controlled by one or more minority persons or women. (f) “Minority person,” for purposes of this section, means Black Americans, Hispanic Americans, Native Americans (including American Indians, Inuit, Aleuts, and Native Hawaiians), Asian-Pacific Americans (including persons whose origins are from Japan, China, the Philippines, Vietnam, Korea, Samoa, Guam, the United States Trust Territories of the Pacific, Northern Marianas, Laos, Cambodia, and Taiwan), or any other group of natural persons identified as minorities in the project specifications by the local agency. (g) This section does not apply to any of the following: (1) A contract, funded in whole or in part by the federal government, to the extent of any conflict between the requirements imposed by this section and any requirements imposed by the federal government relating to participation in a contract by a minority or women business enterprise as a condition of receipt of the federal funds. (2) The San Francisco Bay Area Rapid Transit District, the Los Angeles County Transportation Commission, or any other local agency that has authority to facilitate the participation of minority or women business enterprises substantially similar to the authority granted to the San Francisco Bay Area Rapid Transit District pursuant to Section 20229 of this code or the Los Angeles County Transportation Commission pursuant to Section 130239 of the Public Utilities Code. (Amended by Stats. 2024, Ch. 104, Sec. 4. (AB 2287) Effective January 1, 2025.) § 2001 Division 2, Part 1, Chapter 2 (a) Any local agency, as defined in subdivision (d) of Section 2000, that requires that contracts be awarded to the lowest responsible bidder meeting, or making a good faith effort to meet, participation goals for minority, women, or disabled veteran business enterprises shall provide in the general conditions under which bids will be received, that any person making a bid or offer to perform a contract shall, in his or her bid or offer, set forth the following information: (1) The name and the location of the place of business of each subcontractor certified as a minority, women, or disabled veteran business enterprise who will perform work or labor or render service to the prime contractor in connection with the performance of the contract and who will be used by the prime contractor to fulfill minority, women, and disabled veteran business enterprise participation goals. (2) The portion of work that will be done by each subcontractor under paragraph (1). The prime contractor shall list only one subcontractor for each portion of work as is defined by the prime contractor in his or her bid or offer. (b) The Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100) shall apply to the information required by subdivision (a) relating to subcontractors certified as minority, women, or disabled veteran business enterprises. (c) For purposes of this section, “subcontractor” and “prime contractor” shall have the same meaning as those terms are defined in Section 4113. (d) As used in this section, “contract” does not include a contract negotiated pursuant to Chapter 10 (commencing with Section 4525) of Division 5 of Title 1 of the Government Code. (Added by Stats. 1993, Ch. 1032, Sec. 4. Effective January 1, 1994.) § 2002 Division 2, Part 1, Chapter 2 (a) Notwithstanding any other provision of law requiring a local agency to award contracts to the lowest responsible bidder, any local agency may do any of the following in facilitating contract awards to small businesses: (1) Provide for a small business preference in construction, the procurement of goods, or the delivery of services where responsibility and quality are equal. The local agency shall set the percent and financial value of a preference. The maximum percentage of a preference shall be 7 percent of the lowest responsible bidder meeting specifications and the maximum financial value shall be one hundred fifty thousand dollars ($150,000) for any bid. (2) Establish a subcontracting participation goal for small businesses on contracts and grant a preference, pursuant to paragraph (1), to those bidders who meet the goal. (3) (A) Require bidders to make good faith efforts to meet a subcontracting participation goal for small business contracts. Bidders that fail to meet the goal established by the local agency, shall demonstrate that they made good faith efforts to meet the goal. (B) A prime contractor may, subject to the approval of the local agency, substitute a subcontractor with another small business as applicable. A local agency shall approve the substitution of a subcontractor only in the instance where the substitution meets the requirements of paragraph (6) of subdivision (d) and the local agency’s adopted policy. (4) Set additional guidelines for local preference purposes. (b) (1) The local agency shall define the eligibility for a preference authorized pursuant to this section. (2) In defining eligibility for a “small business,” a local agency shall, at a minimum, include businesses meeting the requirements of a small business enterprise certified pursuant to Article 1 (commencing with Section 14835) of Chapter 6.5 of Part 5.5 of Division 3 of Title 2 of the Government Code. (c) Every local agency that offers a preference, pursuant to this section, shall, prior to offering a preference, adopt a procurement policy that includes, at a minimum, all of the following: (1) A definition of an eligible entity for each preference category being utilized by the local agency. (2) The percentage and maximum financial value of a single preference. (3) A requirement that a preference only be awarded to a small business that performs a commercially useful function, as defined in subdivision (e). (4) A policy regarding oversight and potential fraudulent behavior on the part of a contractor, subcontractor, or individual for the purpose of qualifying as a small business and being awarded a preference. (5) A policy for determining whether a contractor has made a good faith effort, pursuant to paragraph (3) of subdivision (a). (6) A policy on how a prime contractor may substitute a subcontractor, pursuant to subparagraph (B) of paragraph (3) of subdivision (a). This policy shall, at a minimum, include all of the following: (A) The identification of the condition or conditions for which a substitution of subcontractors is authorized. (B) A requirement that construction subcontractors awarded construction subcontracts under this section shall be afforded all the protections of the Subletting and Subcontracting Fair Practices Act (Chapter 4 (commencing with Section 4100)). (C) A requirement that a subcontractor that served to qualify the bid package for a preference shall be replaced only with a subcontractor meeting the eligibility requirements of subdivision (b). (D) A requirement that the condition qualifying the substitution be verified with the subcontractor. (d) Every entity used to qualify a bid for a preference pursuant to this section shall perform a commercially useful function. A “commercially useful function” means: (1) A contractor is deemed to perform a commercially useful function if the contractor, including a subcontractor, does all of the following: (A) Is responsible for the execution of a distinct element of the work of the contract. (B) Carries out its obligation by actually performing, managing, or supervising the work involved. (C) Performs work that is normal for its business services and functions. (D) Is responsible, with respect to products, inventories, materials, and supplies required for the contract, for negotiating price, determining quality and quantity, ordering, installing, if applicable, and making payment. (E) Is not further subcontracting a portion of the work that is greater than that expected to be subcontracted by normal industry practices. (2) A contractor or subcontractor shall not be considered to perform a commercially useful function if the contractor’s or subcontractor’s role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of a small business. (Amended by Stats. 2018, Ch. 654, Sec. 1. (AB 2762) Effective January 1, 2019.) § 2010 Division 2, Part 1, Chapter 2 A person that submits a bid or proposal to, or otherwise proposes to enter into or renew a contract with, a state agency with respect to any contract in the amount of one hundred thousand dollars ($100,000) or more shall certify, under penalty of perjury, at the time the bid or proposal is submitted or the contract is renewed, all of the following: (a) That they are in compliance with the Unruh Civil Rights Act (Section 51 of the Civil Code). (b) That they are in compliance with the California Fair Employment and Housing Act (Chapter 7 (commencing with Section 12960) of Part 2.8 of Division 3 of Title 2 of the Government Code). (c) (1) That any policy that they have against any sovereign nation or peoples recognized by the government of the United States, including, but not limited to, the nation and people of Israel, is not used to discriminate in violation of the Unruh Civil Rights Act (Section 51 of the Civil Code) or the California Fair Employment and Housing Act (Chapter 7 (commencing with Section 12960) of Part 2.8 of Division 3 of Title 2 of the Government Code). (2) Any policy adopted by a person or actions taken thereunder that are reasonably necessary to comply with federal or state sanctions or laws affecting sovereign nations or their nationals shall not be construed as unlawful discrimination in violation of the Unruh Civil Rights Act (Section 51 of the Civil Code) or the California Fair Employment and Housing Act (Chapter 7 (commencing with Section 12960) of Part 2.8 of Division 3 of Title 2 of the Government Code. (Added by Stats. 2016, Ch. 581, Sec. 2. (AB 2844) Effective January 1, 2017.) § 2050 Division 2, Part 1, Chapter 2.5 It is the intent of the Legislature that any awarding department shall accept for purposes of public contract work any state or local agency certification for minority, women, and disadvantaged business enterprises if that certification meets the certification criteria contained in Part 23 of Title 49 of the Code of Federal Regulations. It is also the intent of the Legislature that definitions for minority and women business enterprises, as specified in subdivisions (e) and (f) of Section 10115.1, shall constitute a clarification of, rather than a change in, existing law. (Added by Stats. 1992, Ch. 1329, Sec. 2. Effective January 1, 1993.) § 2051 Division 2, Part 1, Chapter 2.5 As used in this chapter, the following definitions apply: (a) “Awarding department” means any state agency, department, governmental entity, including the California State University, or officer or entity empowered by law to enter into contracts on behalf of the State of California. (b) “Department” means the Department of Transportation. (c) “Minority,” for purposes of this section, means a citizen or lawful permanent resident of the United States who is an ethnic person of color and who is: Black (a person having origins in any of the Black racial groups of Africa); Hispanic (a person of Mexican, Puerto Rican, Cuban, Central or South American, or other Spanish or Portuguese culture or origin regardless of race); Native American (an American Indian, Inuk, Aleut, or Native Hawaiian); Pacific-Asian (a person whose origins are from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, Guam, or the United States Trust Territories of the Pacific, including the Northern Marianas); Asian-Indian (a person whose origins are from India, Pakistan, or Bangladesh); or any other group of natural persons identified as minorities in the respective project specifications of an awarding department or participating local agency. (d) “Minority business enterprise” means a business concern that meets all of the following criteria: (1) The business is at least 51 percent owned by one or more minorities or, in the case of any business whose stock is publicly held, at least 51 percent of the stock is owned by one or more minorities. (2) A business whose management and daily operations are controlled by one or more minorities who own the business. (3) A business concern with its home office located in the United States which is not a branch or subsidiary of a foreign corporation, firm, or other business. (e) “Women business enterprise” means a business concern that meets all of the following criteria: (1) The business is at least 51 percent owned by one or more women or, in the case of any business whose stock is publicly held, at least 51 percent of the stock is owned by one or more women. (2) A business whose management and daily operations are controlled by one or more women who own the business. (3) A business concern with its home office located in the United States which is not a branch or subsidiary of a foreign corporation, firm, or other business. (f) A “disadvantaged business enterprise” means a business concern that is all of the following: (1) A “disadvantaged business” as that term is used in Part 23 of Title 49 of the Code of Federal Regulations. (2) An individual proprietorship, partnership, corporation, or joint venture. (3) Organized for profit, with a place of business located in the United States and which makes a significant contribution to the United States economy through payment of taxes or use of American products, materials, or labor. (g) “Participating state or local agency” means any state or local agency that elects to participate in the certification process pursuant to this chapter. For purposes of this subdivision, the following definitions apply: (1) “District” means an agency of the state, formed pursuant to general law or special act, for the local performance of governmental or proprietary functions within limited boundaries. (2) “Local agency” means a county or city, whether general law or chartered, city and county, school district, or other district. (3) “State agency” means any department, division, board, bureau, commission, or agency of the executive branch of government. (Amended by Stats. 2025, Ch. 67, Sec. 160. (AB 1170) Effective January 1, 2026.) § 2052 Division 2, Part 1, Chapter 2.5 (a) All awarding departments and local agencies shall accept a certification by any participating state agency whose certification criteria complies with Part 23 of Title 49 of the Code of Federal Regulations. All awarding departments shall, and local agencies may, accept a certification by any participating local agency whose certification criteria complies with Part 23. Those participating state or local agency certifications shall be deemed sufficient to qualify minority, women, and disadvantaged business enterprises for purposes of contracts that are fully or partially funded by the federal government, contracts fully or partially funded by all state agencies, and contracts fully or partially funded by all local agencies, as defined in Part 3 (commencing with Section 20100). (b) All awarding departments and local agencies shall accept the certification of a minority, women, or disadvantaged business enterprise made by a participating state agency as valid status of that enterprise, with respect to the identities of the persons certified as having ownership and control of the business enterprise, when awarding contracts to minority, women, and disadvantaged business enterprises. All awarding departments shall, and local agencies may, accept this certification when made by a participating local agency. No awarding department shall require a business enterprise, which has complied with the certification criteria of a participating state or local agency, to comply with any other certification process for certifying minority, women, and disadvantaged business enterprises. However, a participating local agency may impose additional conditions for certification of a business enterprise concerning its status as a minority, women, or disadvantaged business enterprise relating to ethnicity, business size, and business location for participation in local programs. (Amended by Stats. 1994, Ch. 210, Sec. 1. Effective January 1, 1995.) § 2053 Division 2, Part 1, Chapter 2.5 (a) A participating state or local agency shall certify a business enterprise as a minority or women business enterprise if that business enterprise meets the definition of a minority or women business enterprise specified in subdivisions (d) and (e) of Section 2051 in accordance with the eligibility standards set forth in Section 23.53 of Title 49 of the Code of Federal Regulations. (b) A participating state or local agency shall certify a business enterprise as a disadvantaged business enterprise if that business enterprise meets the definition of a disadvantaged business enterprise specified in subdivision (f) of Section 2051, in accordance with the “Guidance for Making Determinations of Social and Economic Disadvantage” set forth in Appendix C to Subpart D of Part 23 of Title 49 of the Code of Federal Regulations. (c) The participating state or local agency may include a site visit as part of its certification process. However, if a participating state or local agency certifies an applicant without conducting a site visit, any other participating state or local agency may conduct a site visit to verify ownership and control of the minority, women, or disadvantaged business enterprise. For purposes of conducting a site visit, certification documentation retained by the participating state or local agency shall be provided, upon request, to any other participating state or local agency. The applicant shall be subject to only one site visit per year, unless ownership and control changes have occurred in the business within the 12-month period following a site visit. Nothing in this chapter shall prohibit a participating state or local agency from conducting a site visit for purposes of preparing a response to an appeal from a notice of intent to decertify pursuant to Section 2055. (d) A participating state or local agency shall complete the certification process, including verification of information submitted by the applicant and the performance of a site visit, if applicable, within 60 working days after receipt of a completed application, and shall submit the appropriate information to the Department of Transportation for insertion into the computerized data bank created pursuant to Section 2056. (e) The grant of certification of a business enterprise by a participating state or local agency shall be valid for two years. A business enterprise that has been denied certification by a participating state or local agency may reapply for certification after six months have elapsed since the date of the denial of certification. (f) A participating state or local agency shall provide adequate security methods to prevent contamination and unauthorized access to the information gathered during the verification process. (Amended by Stats. 1993, Ch. 433, Sec. 12. Effective September 24, 1993.) § 2054 Division 2, Part 1, Chapter 2.5 (a) The department shall develop and make available to all awarding departments and local agencies a directory of all state and local agencies participating in the standardized certification process pursuant to this chapter. An awarding department may count, for purposes of meeting statewide participation goals, those business enterprises that have been certified by a participating state or local agency. (b) The certification shall be under penalty of perjury. The certification application form shall include, but not be limited to, the following information: (1) Name of firm and address. (2) Name of person to contact. (3) Business telephone. (4) Type of ownership. (5) Controlling interest (ethnicity and citizenship). (6) Documentation or evidence of minority ethnicity. (7) Name of owners, general partners, and officers of firm and their percent of ownership in the firm. If a corporation, total outstanding stock and a percentage breakdown of ownership. (8) Management control of firm in the following areas: (A) Financial decisions. (B) Estimating. (C) Marketing and sales. (D) Hiring and dismissal of management. (E) Purchasing of major equipment and supplies. (9) Documentation of identity of owner or management official who is, or has been, within the last three years, an owner, manager, or employee of another firm that has an ownership interest or a present business relationship with the firm. Present business relationships include shared space, employees, equipment, or financing. Explanation of these relationships. (10) Bonding capabilities. (11) Questions regarding whether the firm has been denied certification, or any of the individuals listed in paragraph (7) have been involved with a firm that has been denied certification, as a minority, women, or disadvantaged business enterprise by a participating state or local agency. (12) Type of business (for example, service, goods, construction). (13) Provision for the attachment of a copy of an active business and contractor’s license, or any other pertinent license or permit. (14) Location area of state to be considered for work. (15) Other documentation required to verify ownership and control of a certification applicant in accordance with Sections 23.51 and 23.53 of Title 49 of the Code of Federal Regulations, and with Publication No. FHWA-CR-90-003, dated April 1990, entitled “Disadvantaged Business Enterprise Program Administration Participant’s Manual” published by the Federal Highway Administration in the United States Department of Transportation. (16) Affidavit that all information is true and correct, including statement under penalty of perjury. (c) A participating state or local agency granting or denying the certification shall compile and maintain documentation supporting each of the criteria set forth in subdivision (b) for a minimum of two years. The documentation shall include, but not be limited to, one copy of the issued certification with the name of the person or persons responsible for reviewing and authorizing the certification and the date on which each review and authorization occurred. (d) The minority, women, or disadvantaged business enterprises seeking certification shall designate on the application form the information that they consider proprietary. Any information so designated shall be confidential. However, if notice is given by a participating state or local agency of its intention to decertify a business enterprise certified pursuant to this chapter, the participating state or local agency that granted the original certification shall provide access to all of its certification documentation to a participating state or local agency seeking to decertify the business enterprise, if the participating state or local agency seeking to decertify the business enterprise agrees to honor the confidentiality of the information designated as proprietary. (Added by Stats. 1992, Ch. 1329, Sec. 2. Effective January 1, 1993.) § 2055 Division 2, Part 1, Chapter 2.5 A participating state or local agency may challenge the certification of a business enterprise made by another participating state or local agency as follows: (a) The participating state or local agency seeking to challenge the certification determination made by another participating state or local agency shall give written notice to the certifying agency of its intention to challenge the certification determination. The certifying agency shall reexamine its certification determination and submit written notice to the challenging agency and the business enterprise of its findings after reexamination within 30 days from the date of receipt of the notice. (b) If the challenging agency is not satisfied with the finding of the certifying agency after reexamination, the challenging agency shall submit written notice to the business enterprise, with a copy to the certifying agency, of its intention to decertify the business enterprise. (c) A business enterprise that has received notice of decertification by an agency may appeal that decertification decision in accordance with the procedures of the agency that made the decertification decision. (Added by Stats. 1992, Ch. 1329, Sec. 2. Effective January 1, 1993.) § 2056 Division 2, Part 1, Chapter 2.5 (a) The department shall establish and administer a computerized databank containing a list of certified minority, women, and disadvantaged business enterprises. On or before July 1, 1993, the data shall be made accessible to all awarding departments, local agencies, and the public for use in contracting for goods, construction, and services with those business enterprises. (b) The databank shall include, but not be limited to, the following information: (1) Name, address, and telephone number. (2) Ethnicity. (3) Gender. (4) Name of the participating state or local agency that conducted a site visit, and date of site visit, if applicable. (5) Type of ownership. (6) Product or service categories. (7) Geographical area. (8) Name of the participating state or local agency that performed the certification. (9) Any additional local requirements met by the enterprise, if applicable. (10) A record of actions by a participating state or local agency resulting in certification denial or decertification. (c) Information from the databank shall be made available to local public agencies and the public by the date specified in subdivision (a). (d) The database developed to implement this section shall enable the department to monitor changes to this information and to issue any reports as may be required. (Amended by Stats. 2002, Ch. 168, Sec. 6. Effective January 1, 2003.) § 2057 Division 2, Part 1, Chapter 2.5 This chapter shall not apply to any professional services contract subject to Chapter 6 (commencing with Section 16850) of Part 3 of Division 4 of Title 2 of the Government Code. (Added by Stats. 1992, Ch. 1329, Sec. 2. Effective January 1, 1993.) § 2200 Division 2, Part 1, Chapter 2.7 This chapter shall be known and may be cited as the Iran Contracting Act of 2010. (Added by Stats. 2010, Ch. 573, Sec. 1. (AB 1650) Effective January 1, 2011. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2201 Division 2, Part 1, Chapter 2.7 The Legislature hereby finds and declares all of the following: (a) In imposing United States sanctions on Iran, Congress and the President have determined that the illicit nuclear activities of the Government of Iran, combined with its development of unconventional weapons and ballistic missiles, and its support of international terrorism, represent a serious threat to the security of the United States, Israel, and other United States allies in Europe, the Middle East, and around the world. (b) On September 9, 2009, it was reported that American intelligence agencies have concluded that Iran has already created enough nuclear fuel to develop a nuclear weapon, and United States Ambassador to the International Atomic Energy Agency Glyn Davies declared that Iran had achieved “possible breakout capacity.” (c) On September 21, 2009, Iran sent a letter to the International Atomic Energy Agency acknowledging that it is considering a previously undeclared “new pilot fuel enrichment plan.” (d) On Sept. 25, 2009, President Barack H. Obama, joined by Prime Minister Gordon Brown of Britain and President Nicolas Sarkozy of France, stated that the secret plant “represents a direct challenge to the basic foundation of the nonproliferation regime” and “deepens a growing concern that Iran is refusing to live up to those international responsibilities, including specifically revealing all nuclear-related activities. As the international community knows, this is not the first time that Iran has concealed information about its nuclear program.” (e) The International Atomic Energy Agency has repeatedly called attention to Iran’s unlawful nuclear activities, and, as a result, the United Nations Security Council has adopted a range of sanctions designed to encourage the Government of Iran to cease those activities and comply with its obligations under the Treaty on the Non-Proliferation of Nuclear Weapons (commonly known as the “Nuclear Non-Proliferation Treaty”). (f) On July 1, 2010, President Barack Obama signed into law H.R. 2194, the “Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010” (Public Law 111-195), which expressly authorizes states and local governments to prevent investment in, including prohibiting entry into or renewing contracts with, companies operating in Iran’s energy sector with investments that have the result of directly or indirectly supporting the efforts of the Government of Iran to achieve nuclear weapons capability. (g) On October 7, 2008, then-Senator Obama stated, “Iran right now imports gasoline, even though it’s an oil producer, because its oil infrastructure has broken down. If we can prevent them from importing the gasoline that they need and the refined petroleum products, that starts changing their cost-benefit analysis. That starts putting the squeeze on them.” (h) The serious and urgent nature of the threat from Iran demands that states, local governments, educational institutions, and private institutions work together with the federal government and American allies to do everything possible diplomatically, politically, and economically to prevent Iran from acquiring a nuclear weapons capability. (i) There are moral and reputational reasons for this state and local governments to not engage in business with foreign companies that have business activities benefiting foreign states, such as Iran, that commit egregious violations of human rights, proliferate nuclear weapons capabilities, and support terrorism. (j) It is the responsibility of the state to decide how, where, and by whom its financial resources should be invested. It also is the prerogative of the state to not invest in, or do business with, companies whose investments with Iran place those companies at risk from the impact of economic sanctions imposed upon the Government of Iran for sponsoring terrorism, committing egregious violations of human rights, and engaging in illicit nuclear weapons development. (k) The human rights situation in Iran has steadily deteriorated in 2009, as punctuated by transparently fraudulent elections and the brutal repression and murder, arbitrary arrests, and show trials of peaceful dissidents. (l) During the postelection protests in June 2009, the Iranian government imposed widespread and unjustifiable restrictions on telecommunications services, denying the citizens of Iran their rights and liberties to free speech. (m) On October 14, 2007, Governor Arnold Schwarzenegger stated his intention to support “efforts to further prevent terrorism” when signing Assembly Bill 221, which prohibits the state’s pension funds from investing in companies with active business in Iran. (n) This state currently honors contracts with foreign companies that may be at financial risk due to business ties with foreign states, such as Iran, that are involved in the proliferation of weapons of mass destruction, commit human rights violations, and support terrorism. (o) The concerns of the State of California regarding Iran are strictly the result of the actions of the Government of Iran. (p) The people of the State of California declare all of the following: (1) We have feelings of friendship for the people of Iran. (2) We regret that developments in recent decades have created impediments to that friendship. (3) We hold the people of Iran, their culture, and their ancient and rich history in the highest esteem. (q) In order to effectively address the need for the governments of this state to respond to the policies of Iran in a uniform fashion, prohibiting contracts with persons engaged in investment activities in the energy sector of Iran must be accomplished on a statewide basis, and, therefore, the subject is a matter of statewide concern rather than a municipal affair. (r) It is the intent of the Legislature to implement the authority granted under Section 202 of the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (Public Law 111-195). (Added by Stats. 2010, Ch. 573, Sec. 1. (AB 1650) Effective January 1, 2011. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2202 Division 2, Part 1, Chapter 2.7 As used in this chapter, the following definitions apply: (a) “Awarding body” means a department, board, agency, authority, or officer, agent, or other authorized representative of the public entity awarding a contract for goods or services. (b) “Energy sector” of Iran means activities to develop petroleum or natural gas resources or nuclear power in Iran. (c) “Financial institution” means the term as used in Section 14 of the Iran Sanctions Act of 1996 (Public Law 104-172; 50 U.S.C. 1701 note). (d) “Iran” includes the Government of Iran and any agency or instrumentality of Iran. (e) “Person” means any of the following: (1) A natural person, corporation, company, limited liability company, business association, partnership, society, trust, or any other nongovernmental entity, organization, or group. (2) Any governmental entity or instrumentality of a government, including a multilateral development institution, as defined in Section 1701(c)(3) of the International Financial Institutions Act (22 U.S.C. 262r(c)(3)). (3) Any successor, subunit, parent entity, or subsidiary of, or any entity under common ownership or control with, any entity described in paragraph (1) or (2). (Added by Stats. 2010, Ch. 573, Sec. 1. (AB 1650) Effective January 1, 2011. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2202.5 Division 2, Part 1, Chapter 2.7 For purposes of this chapter, a person engages in investment activities in Iran if any of the following is true: (a) The person provides goods or services of twenty million dollars ($20,000,000) or more in the energy sector of Iran, including a person that provides oil or liquefied natural gas tankers, or products used to construct or maintain pipelines used to transport oil or liquefied natural gas, for the energy sector of Iran. (b) The person is a financial institution that extends twenty million dollars ($20,000,000) or more in credit to another person, for 45 days or more, if that person will use the credit to provide goods or services in the energy sector in Iran and is identified on a list created pursuant to subdivision (b) of Section 2203 as a person engaging in investment activities in Iran as described in subdivision (a). (Added by Stats. 2010, Ch. 573, Sec. 1. (AB 1650) Effective January 1, 2011. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2203 Division 2, Part 1, Chapter 2.7 (a) (1) A person that, at the time of bid or proposal for a new contract or renewal of an existing contract, is identified on a list created pursuant to subdivision (b) as a person engaging in investment activities in Iran as described in subdivision (a) of Section 2202.5, is ineligible to, and shall not, bid on, submit a proposal for, or enter into or renew, a contract with a public entity for goods or services of one million dollars ($1,000,000) or more. (2) A person that, at the time of bid or proposal for a new contract or renewal of an existing contract, engages in investment activities in Iran as described in subdivision (b) of Section 2202.5, is ineligible to, and shall not, bid on, submit a proposal for, or enter into or renew, a contract with a public entity for goods or services of one million dollars ($1,000,000) or more. (b) (1) By June 1, 2011, the Department of General Services shall, using credible information available to the public, develop, or contract to develop, a list of persons it determines engage in investment activities in Iran as described in subdivision (a) of Section 2202.5. (2) The Department of General Services shall update the list every 180 days. (3) Before finalizing an initial list pursuant to paragraph (1) or an updated list pursuant to paragraph (2), the Department of General Services shall do all of the following before a person is included on the list: (A) Provide 90 days’ written notice of its intent to include the person on the list. The notice shall inform the person that inclusion on the list would make the person ineligible to bid on, submit a proposal for, or enter into or renew, a contract for goods or services of one million dollars ($1,000,000) or more with a public entity. The notice shall specify that the person, if it ceases its engagement in investment activities in Iran as described in subdivision (a) of Section 2202.5, may become eligible for a future contract, or contract renewal, for goods or services of one million dollars ($1,000,000) or more with a public entity upon removal from the list. (B) The Department of General Services shall provide a person with an opportunity to comment in writing to the Department of General Services that it is not engaged in investment activities in Iran. If the person demonstrates to the Department of General Services that the person is not engaged in investment activities in Iran as described in subdivision (a) of Section 2202.5, the person shall not be included on the list, and shall be eligible to enter into or renew a contract for goods or services of one million dollars ($1,000,000) or more with a public entity, unless the person is otherwise ineligible to bid on a contract as described in paragraph (3) of subdivision (a) of Section 2205. (4) The Department of General Services shall make every effort to avoid erroneously including a person on the list. (5) The Department of General Services may assess a fee upon persons that use this list to comply with the provisions of this act, in order to pay for the necessary, actual costs of creating and maintaining this list. The Department of General Services shall provide the list free of charge to any public entity and to the Legislature, upon request. (6) A person that has a contract with CalPERS or CalSTRS, or both, shall not be deemed a person that engages in investment activities in Iran on the basis of those investments with CalPERS or CalSTRS. (c) Notwithstanding subdivision (a), a public entity may permit a person engaged in investment activities in Iran, on a case-by-case basis, to be eligible for, or to bid on, submit a proposal for, or enter into or renew, a contract for goods or services of one million dollars ($1,000,000) or more with a public entity if either of the following are true: (1) All of the following occur: (A) The investment activities in Iran were made before July 1, 2010. (B) The investment activities in Iran have not been expanded or renewed after July 1, 2010. (C) The awarding body determines that it is in the best interest of the state or local public entity to contract with the person. For purposes of state contracts for goods or services of one million dollars ($1,000,000) or more, “awarding body” means the Department of General Services. For purposes of local contracts for goods or services of one million dollars ($1,000,000) or more, “awarding body” means the representative of the local public entity awarding the contract, as described in subdivision (a) of Section 2202. (D) The person has adopted, publicized, and is implementing a formal plan to cease the investment activities in Iran and to refrain from engaging in any new investments in Iran. (2) One of the following occurs: (A) For a contract for goods or services of one million dollars ($1,000,000) or more with a local public entity, the local public entity makes a public finding that, absent such an exemption, the local public entity would be unable to obtain the goods or services for which the contract is offered. (B) For a contract for goods or services of one million dollars ($1,000,000) or more with a state agency, other than the office of a state constitutional officer, the Governor makes a public finding that absent such an exemption, the state agency would be unable to obtain the goods or services for which the contract is offered. (C) For a contract for goods or services of one million dollars ($1,000,000) or more with an office of a state constitutional officer, if the state constitutional officer makes a public finding that, absent such an exemption, his or her office would be unable to obtain the goods or services for which the contract is offered. (d) Notwithstanding subdivision (a), a public entity shall permit a financial institution described in subdivision (b) of Section 2202.5 to be eligible for, or to bid on, submit a proposal for, or enter into or renew, a contract for goods or services of one million dollars ($1,000,000) or more with a public entity if the person using the credit to provide goods or services in the energy sector of Iran is a person permitted to submit a bid or proposal to the public entity pursuant to subdivision (c). (e) The prohibition described in paragraph (1) of subdivision (a) applies on and after June 1, 2011. The prohibition described in paragraph (2) of subdivision (a) applies on and after July 1, 2011. (Amended by Stats. 2011, Ch. 296, Sec. 246. (AB 1023) Effective January 1, 2012. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2204 Division 2, Part 1, Chapter 2.7 (a) A public entity shall require a person that submits a bid or proposal to, or otherwise proposes to enter into or renew a contract with, a public entity with respect to a contract for goods or services of one million dollars ($1,000,000) or more to certify, at the time the bid is submitted or the contract is renewed, that the person is not identified on a list created pursuant to subdivision (b) of Section 2203 as a person engaging in investment activities in Iran described in subdivision (a) of Section 2202.5, or as a person described in subdivision (b) of Section 2202.5, as applicable. (b) A public entity shall not require a person that submits a bid or proposal to, or otherwise proposes to enter into a contract with, the public entity with respect to a contract for goods or services of one million dollars ($1,000,000) or more to certify that the person is not identified on a list created pursuant to subdivision (b) of Section 2203 as a person engaging in investment activities in Iran described in subdivision (a) of Section 2202.5, or as a person described in subdivision (b) of Section 2202.5, as applicable, if the person has been permitted to submit a bid or proposal to the public entity pursuant to subdivision (c) or (d) of Section 2203. (c) (1) Subject to paragraph (2), the certification requirement described in subdivision (a) applies on and after June 1, 2011. (2) A person that is a financial institution shall not be required to certify as provided in subdivision (a) until July 1, 2011. For any subsequent list created pursuant to subdivision (b) of Section 2203, a person that is a financial institution shall not be required to certify with respect to that subsequent list until 30 days after that list becomes available, but shall certify with respect to the immediately prior list for those 30 days. (Amended by Stats. 2026, Ch. 84, Sec. 30. (SB 172) Effective July 13, 2026. Conditionally inoperative as prescribed by Stats. 2010, Ch. 573, Sec. 2.) § 2205 Division 2, Part 1, Chapter 2.7 (a) If the local public entity, or the Department of General Services in the case of state contracts, determines, using credible information available to the public and after providing 90 days written notice and an opportunity to comment in writing for the person to demonstrate that it is not engaged in investment activities in Iran, that the person has submitted a false certification under Section 2204, and the person fails to demonstrate to the local public entity or the Department of General Services that the person has ceased its engagement in the investment activities in Iran within 90 days after the determination of a false certification, the following shall apply: (1) Pursuant to an action under subdivision (b), a civil penalty in an amount that is equal to the greater of two hundred fifty thousand dollars ($250,000) or twice the amount of the contract for which the false certification was made. Only one civil penalty may be imposed with respect to one or more certifications made to any public entity that are false as a result of a particular investment. (2) Termination of an existing contract with the awarding body at the option of the awarding body or the Department of General Services. (3) Ineligibility to bid on a contract for a period of three years from the date of the determination that the person submitted the false certification. (b) The local public entity, or the Department of General Services in the case of state contracts, shall report to the Attorney General the name of the person that the local public entity, or the Department of General Services in the case of state contracts, determines has submitted a false certification under Section 2204, together with its information as to the false certification, and the Attorney General shall determine whether to bring a civil action against the person to collect the penalty described in paragraph (1) of subdivision (a). The awarding body of a local public entity may also report to the city attorney, county counsel, or district attorney the name of the person that the awarding body determines has submitted a false certification under Section 2204, together with its information as to the false certification