Contracts with Veteran Service Entities

California’s Military and Veterans Code, in Division 4, Chapter 6, Article 7, provides for contracts with nonprofit veteran service agencies for providing state benefits for veterans.

Section 999.50 states that it is the intent of the Legislature in enacting this article to encourage state agencies, cities, counties, districts, and other political subdivisions to purchase goods manufactured by, and services provided by, a nonprofit veteran service agency whenever it is both feasible to do so and the location of the nonprofit veteran service agency makes the purchases reasonably convenient.

Section 999.51 requires a nonprofit veteran service agency to be eligible for certification as a small business under the Small Business Procurement and Contract Act, and may be granted a small business bid preference if it meets all of the three specified conditions.

In addition, the nonprofit veteran service agency is required to employ veterans receiving services from the nonprofit veteran service agency for not less than 75% of the person-hours of direct labor required for the production of goods and the provision of services performed pursuant to a contract under this section.

The nonprofit veteran service agency must agree to make those elections permitted of any nonprofit corporation under the Federal Insurance Contributions Act and the Unemployment Insurance Code in order to provide social security and unemployment and disability benefits for its employees. And, the nonprofit veteran service agency cannot commit any unfair labor practices.

The terms “nonprofit veteran service agency” and “direct labor” are defined. Also, a veteran receiving services from the nonprofit veteran service agency is considered an employee when performing productive work.