Background

General Order (GO) 156 Section 6, states:

"Each utility's WMDVBE program shall be designed to ensure hat WMDVBEs are encouraged to become potential suppliers of products and services the utilities subject to GO 156. Nothing in GO 156 authorizes or permits a utility to utilize set-asides, preferences, or quotas in administration of its WMDVBE program. The utility retains its authority to use its legitimate business judgment to select the supplier for a particular contract."

GO 156 requires each utility to maintain an appropriately sized staff to implement WMDVBE program requirements (Section 6.1) and ensure that its employees with procurement responsibilities receive WMDVBE program

training program (Section 6.1.1). Utilities are also required to implement an outreach program to inform and recruit WMDVBEs to apply for procurement contracts and to offer this same type of assistance to non-WMDVBEs upon request (Section 6.2).

Utilities are required to establish a subcontracting program for the purpose of encouraging prime contractors to utilize WMDVBE subcontractors as an enhancement to their prime contractor outreach programs (Sections 6.3 and 6.3.1), and to encourage and assist prime contractors to develop plans to increase the utilization of WMDVBEs as subcontractors (Section 6.3.4).

Utilities are required to monitor and include in their annual reports to the Commission a sumary of prime contractor progress in increasing the participation of WMDVBE subcontractors (Section 6.3.7) and to include in their annual WMDVBE plans a description of future plans for encouraging both prime contractors and grantees to engage WMDVBE subcontractors (Section 6.3.8). Utilities are authorized to include awards to verified WMDVBE subcontractors in their WMBE results (Section 6.3.9).

While GO 156 requires utilities to establish initial minimum long-term goals (Section 8.2), and to annually set short, mid, and long term goals (Section 8), there are no penalties for failure to achieve such goals (Section 8.12). Utilities voluntarily, and in good faith, strive to meet these target goals. (Order Instituting Rulemaking on the Commission's own motion to revise General Order 156 [Decision (D.)98-11-030] (1998) 1998 Cal.PUC LEXIS 1022, * 28-29; see also, Systems Analysis and Integration, Inc. v. Southern California Edison [D.96-12-023] (1996) 69 CPUC2d 516, at 526).

In Order Instituting Rulemaking on the Commission's own motion to revise General Order 156, [D.95-12-045] (1995) 63 CPUC2d 203, at 208-209, the Commission stated that goals are neither floors nor ceilings:

"[T]he Commission clarifies that goals are neither floors nor ceilings. The Commission directs the parties to § 1.3.13 of GO 156 which defines goal in the following manner: `"Goal" means a target which, when achieved, indicates progress in a preferred direction. A goal is neither a requirement nor a quota.' Thus, goals are targets that utilities voluntarily, and in `good faith,' strive to meet. There are no repercussions if a utility falls below desired goals."

D.95-12-045 amended Section 8.12 of GO 156 to read: "[n]o penalty shall be imposed for failure of any utility to meet and/or exceed goals." (63 CPUC2d at 209 and 216 (Ordering Paragraph 1).)

GO 156 does not dictate that goals be met in each procurement contract or in any particular way:

"The utility may satisfy its yearly WMBE goal by the award of a single contract to a WMBE, or it may meet its goal through a number of small contracts awarded to many WMBEs. In fact, subcontracts awarded to a WMBE by a non-WMBE prime contractor who receives a procurement contract qualif[y] toward meeting the utility's yearly goal. ... It is entirely up to the utility to determine how the goal is to be met as long as the process is fair and all bidders for any contract are treated equally. We term this as a level playing field." (D.96-12-023, supra, 69 CPUC2d at 526.)

In Re Rulemaking to Revise General Order 156 [D.96-04-018] (1996) 65 CPUC2d 265, 274, the Commission noted that:

"The Commission does not generally review nor approve the procurement decisions of utilities, except where there has been an allegation that the utility has engaged in unlawful discrimination or has in some other manner violated a statute, rule, or order of the Commission. We have always recognized that the utilities must use their best business judgment to select the best person for the particular procurement need. We also believe that the utilities are in the best position to design whatever incentives a utility deems necessary, to promote equal opportunity."

In CMS Group, Inc. v. Pacific Bell [D.98-07-024] (1998) 1998 Cal. PUC LEXIS 562, the Commission notes:

"[W]e have pointed out on several prior occasions that the submission of a proposal or bid by a WMDVBE, like a submission by any other bidder, is no guaranty that that particular bidder will be awarded the contract. Being a WMDVBE or having WMDVBE status gives no special privileges or advantages insofar as contract awards are concerned. The purpose of the WMDVBE program is to `level the playing field' so as to give minority vendors and contractors knowledge of and a fair opportunity to compete for the provision of goods and services to covered utilities. It does not guarantee success in the effort to obtain a contract." (D.98-07-024, mimeo. at pp. 5-6; 1998 Cal. PUC LEXIS 562, *10-11.)

In this proceeding, Complainants offer the services of providing temporary personnel. Complainants desired to provide services to PG&E under the WMDVBE program.

Since January 1996, PG&E has contracted with a company called CORESTAFF² to provide and manage the temporary workforce that PG&E needs from time to time to augment its clerical and technical staff. In order to receive PG&E business, other vendor firms and individuals filling temporary personnel needs must associate with CORESTAFF or one of its subcontractors. Prior to contracting with CORESTAFF, PG&E contracted directly with numerous companies.

Under the CORESTAFF contract, PG&E submits job orders for temporary clerical or technical personnel as needed, and CORESTAFF is expected to fill those job orders with candidates meeting PG&E's qualifications. CORESTAFF itself fills some job orders either directly or through its division, CORESTAFF Technology Group. Other orders are filled by referral to one or more CORESTAFF approved secondary vendors. Under the CORESTAFF agreement there is no requirement that all vendors on the secondary list be contacted about all or any orders. PG&E states that the secondary list of vendors changes with CORESTAFF's business needs.