Remedies and Penalties in State Contracting

California’s Public Contract Code, in Division 2, Part 2, Chapter 2, Article 9, concerns remedies and penalties in the state’s acquisition of goods and services in contracting by state agencies. Section 10420 specifies that every contract or other transaction entered in violation of any provision of this chapter is void, unless the violation is technical or nonsubstantive.

Section 10421 authorizes the state, or any person acting on behalf of the state, to bring a civil action seeking a determination by the Superior Court that a contract or other transaction has been entered in violation of any provision of this chapter. If the court finds substantial evidence of a violation, it may issue a temporary injunction to prevent any further dealings upon the contract or other transaction, pending a final determination on the merits of the case.

Section 10422 states that any officer or employee of the department who corruptly performs any official act under this chapter to the injury of the state is guilty of a felony.

Section 10423 provides that any person contracting with the state by oral or written contract who corruptly permits the violation of any contract made under this chapter is guilty of a felony.

Section 10424 says that persons convicted under the above sections are also liable to the state for double the amount the state may have lost, or be liable to lose by reason of the acts made crimes by this article.

Section 10425 provides that the violation of any other provision of this chapter constitutes a misdemeanor.

Section 10425 makes it unlawful for a person to intentionally disclose proprietary information obtained in the negotiation, execution, or performance of a consulting services contract, or an information technology contract, with a state agency when the contracting party knew or should have known that the disclosure was likely to cause harm.

A violation of this section is punishable as a misdemeanor and may be prosecuted by the Attorney General or by a local district attorney in the district in which the disclosure took place. The term “proprietary information” is defined. A contracting state agency must specifically identify in the contract any information that is considered to be proprietary.

A contracting state agency is required to provide written notification to a contracting party of any information that, subsequent to the execution of the contract, is identified to be proprietary. A contracting party is not in violation of this section if that party discloses information prior to the receipt of the written notification.