Joseph

This case involves the California Disabled Veteran Business Enterprise (DVBE) program within the Department of General Services (Department), which is designed to benefit qualified disabled veterans and their businesses by giving them preferences in state contracting. (Mil. & Vet. Code, § 999 et seq.; further unspecified section references are to this code.)

Daniel Moody and Niles Freeman each had a contracting business, Moody Construction and Niles Freeman Excavating (NFX), respectively. Moody is a qualified disabled veteran, but Freeman is not. Moody and Freeman created a partnership, Niles Freeman Enterprises (NFE), certified as a DVBE by the Department. Freeman ran NFE, and derived most of its profits.

The Department “decertified” NFE as a DVBE, after an administrative law judge (ALJ) upheld the Department’s conclusion that NFE did not meet the definition of a DVBE.

The Department later suspended plaintiffs NFE, Moody, Moody Construction, Freeman, and NFX from participating in any state contracts for three years. Plaintiffs appealed and lost at an administrative hearing, except that the period of suspension was reduced to one year. All then filed this unsuccessful…