California Code of Regulations
Title 2 - Administration
Division 2 - Financial Operations
Chapter 3 - Department of General Services
Subchapter 10.5 - Disabled Veteran Business Enterprise Participation Goal Program for State Contracts
Article 2 - DVBE Participation in State Contracting
Section 1896.73 - Substitution of a DVBE Subcontractor

(a) Any substitution of a DVBE subcontractor shall be by another DVBE subcontractor. The substitution shall be to perform work stated in the original bid and can occur only if approved by OSDS in writing prior to the commencement of any work by another DVBE subcontractor. The substitution shall maintain, at minimum, the level of DVBE participation stated in the original bid.

(b) The contractor shall concurrently by certified mail notify in writing both the original DVBE and the proposed replacement DVBE, along with the awarding department, of the intended substitution and the reasons for the substitution. The awarding agency will provide written notice of the DVBE substitution request to both the original and proposed replacement, including instructions for objecting to the substitution.

(c) The contractor shall provide the awarding department a copy of the written notice issued to the original DVBE, specifying the situation or situations justifying replacement, with proof of delivery. In the absence of a proof of delivery, the applicable certified mail receipt will be sufficient proof of attempted delivery for documentation purposes.

(d) The DVBE subject to replacement shall have up to five business days from receipt of the notice to express their consent or opposition to the substitution. The DVBE's reply shall be sent simultaneously by certified mail to the contractor and awarding department. In the absence of a consent or opposition reply, the returned and unopened certified mail from the contractor will be sufficient documentation.

(e) When a written opposition to a substitution is filed, the DVBE subject to substitution is entitled to a hearing, to be conducted by the awarding department. The hearing notice shall be issued by the awarding department within five business days from the awarding department's receipt of the written opposition and shall provide the DVBE subject to replacement a minimum of five business days' notice prior to the hearing. All essential hearing time and place details will be provided to the applicable DVBE, including the reasons for the hearing, the name of the person hearing the issue, and applicable accessibility information.

(f) Upon the awarding department's determination that there are legitimate reasons for a DVBE subcontractor replacement, the awarding department shall submit a substitution request to the OSDS:

(g) OSDS will respond to substitution requests within three (3) business days. Consent to replacement of another DVBE subcontractor shall be in any of the following situations consistent with, or conforming to the public works substitution provisions of Public Contract Code section 4107, and in accordance with the replacement authority granted DGS by Military and Veterans Code section 999.5, subdivision (g):

(h) The DVBE subcontractor replacement process shall not be used as an excuse for noncompliance with any provision of law. This includes, but is not limited to, the Subletting and Subcontracting Fair Practices Act provisions of the Public Contract Code or any contract requirements relating to substitution of subcontractors.

(i) Contractors who proceed with work without OSDS's approval of a substitution decision may be subject to contract termination, and/or the recovery of damages and penalties under the statutory provisions, including those outlined in Military and Veterans Code section 999.9, Public Contract Code section 10115.10, or Public Contract Code section 4110(applies to public works only).