(a) Upon award of a contract by the city that includes a business equity goal, such business equity goal becomes a covenant of performance by the contractor in favor of the city.
(b) Contracts shall incorporate the ordinance and this article by reference, and shall provide that the contractor's violation of the ordinance and this article shall constitute a breach of such contract and may result in debarment in accordance with the procedures outlined in this article.
(c) The contractor shall provide a list of all subcontractors to be used in the performance of the contract, and detailed subcontractor information to the city with each request for payment submitted to the city or as otherwise directed by the DVIN.
(d) The DVIN shall monitor subcontractor participation and business equity goal attainment during the course of the contract.
(e) The DVIN shall have full and timely access to view the contractor's relevant books and records relating to each specific contract with the city to determine the contractor's compliance with its commitment to business equity firm participation and the status of any business equity firms performing any portion of the contract. The DVIN shall not record, maintain copies, or disclose industry or trade secrets of a contractor or vendors books and records in its execution of this duty. This provision shall be in addition to, and not a substitute for, any other provision allowing inspection of the contractor's records by any officer or official of the city for any purpose.
(f) Business equity firm subcontractor substitution.
(1) The contractor shall not make changes to the utilization plan or substitute business equity firms named in the utilization plan without the prior written approval of the DVIN. Unauthorized changes or substitutions shall be a violation of this article and a breach of contract, and may constitute grounds for rejection of the bid or cause termination of an executed contract for breach, the withholding of payment and/or subject the contractor to certain sanctions.
(2) A contractor shall not substitute a business equity firm subcontractor or perform the work designated for a business equity firms with its own forces unless and until approval has been received in writing by the DVIN.
(3) The facts supporting the request for substitution of a business equity firm must not have been known nor reasonably should have been known by the contractor before the submission of the utilization plan.
(4) Bid shopping as a part the substitution of a business equity firm is prohibited.
(5) The contractor must negotiate in good faith with the business equity firm subcontractor to resolve any issues between the contractors and business equity firm subcontractor. Where there has been a mistake or disagreement about the scope of work, the business equity firm can be substituted only where an agreement cannot be reached for a reasonable price for the corrected scope of work.
(6) Substitutions of the business equity firm subcontractor shall be permitted only after submission of a request for subcontractor substitution in the business equity management system and only on the following bases:
a. Unavailability after receipt of reasonable notice to proceed;
b. Failure of performance;
c. Financial incapacity;
d. Refusal by the subcontractor to honor the bid or proposal price;
e. Mistake of fact or law about the elements of the scope of work of a solicitation where agreement upon a reasonable price cannot be reached;
f. Failure of the subcontractor to meet insurance, licensing or bonding requirements; or
g. The subcontractor's withdrawal of its bid or proposal.
(7) The DVIN's final decision whether to permit or deny the proposed substitution, and the basis of any denial, shall be communicated to the contractor and business equity firm subcontractor in writing within seven business days of receipt of the request for substitution in the business equity management system.
(8) Where the contractor has established the basis for the substitution to the satisfaction of the city, the contractor shall make good faith efforts to fulfill the utilization plan. The contractor may seek the assistance of the city in obtaining a new business equity firm.
(9) If the business equity goal cannot be reached and good faith efforts have been made, the contractor may substitute with a non-business equity firm.
(g) Contract amendment/change order. The contractor shall comply with the provisions of this article with respect to any contract amendments, change orders, or extra work orders.
(1) If a contract has been assigned a business equity goal and requires a reduction in work or additional work through a change order, contract amendment or other mechanism, the contractor shall notify DVIN.
(2) If the contract amendment, change order, or extra work adds work to a project that is already being performed by a business equity firm, such firm shall be given the opportunity to perform the additional work.
(3) If the amendment, change order, or extra work adds work that like or similar work is not already being performed by a business equity firm and the amount of such additional work is greater than or equal to $100,000.00, the contractor shall comply with good faith effort requirements of this article (exclusive of the time requirements stated therein) with respect to such additional work.
(4) A contractor may submit an Acceptance of Previous Commitment Form (APCF) for contract amendments and change orders in which the contractor agrees to the original business equity goal for the project, inclusive of any prior change orders or amendments.
(h) Prior to contract closeout, the DVIN shall evaluate the contractor's fulfillment of the business equity goal, considering all approved substitutions, terminations and changes to the contract's scope of work. If the city determines that good faith efforts to meet the business equity goals were not made, or that fraudulent misrepresentations have been made, or any other breach of the contract or violation of this article has occurred, a remedy or sanction may be imposed, as provided in this article.
(i) Contract payment procedures.
(1) For vertical construction contracts, the contractor shall submit an invoice at least monthly and the city will pay the invoice as required by the Texas Prompt Payment Act (Tex. Gov't. Code, Chap. 2251) or any successor statute. The contractor shall pay subcontractors as required by the Texas Prompt Payment Act or any successor statute. The contractor's failure to make payments as provided by state law shall, in addition to any other remedies provided by law, authorize the city to withhold future payments and/or reject future bids from the contractor until compliance with this article is attained.
(2) For horizontal construction contracts, procedures will be established to ensure that all progress payments are made twice a month and that subcontractors are paid in accordance with the provisions of the Texas Prompt Payment Act (Tex. Gov't. Code, Chap. 2251) or any successor statute. A Contractor's failure to make payments as required by state law shall, in addition to any other remedies provided by state law, authorize the city to withhold future payments and/or reject future bids from the contractor until compliance with this article is attained.
(3) For all other contracts, the contractor shall pay subcontractors as required by the Texas Prompt Payment Act (Tex. Gov't. Code, Chap. 2251) or any successor statute. The contractor's failure to make payments as provided by state law shall, in addition to any other remedies provided by law, authorize the city to withhold future payments and/or reject future bids from the contractor until compliance with this article is attained.
(j) Payment compliance procedures.
(1) Contractors shall report receipt of all payments from the city in the business equity management system related to contracts for which a business equity goal was established within 30 days of receipt of such payment.
(2) Contractors shall report all payments made to each business equity firm utilized by the contractor as a subcontractor related to contracts for which a business equity goal was established within 30 days of making such payment.
(3) Business equity firm subcontractors shall confirm the accuracy and date of all payments made by contractors related to contracts for which a business equity goal was established in the city's business equity management system within 30 days of receipt of payment.
(4) If prompted by the city's business equity management system, contractors and business equity firm subcontractors shall confirm notice and receipt of all payments.
(5) The contractor shall notify each business equity firm subcontractor that does not confirm receipt of payment from the contractor of its responsibility to do so in the city's business equity management system and provide proof of such notification to DVIN.
(k) Contract close-out procedure. At the completion of a contract, the following procedures shall be followed by the contractor. The program contains further requirements of city departments for close-out procedures.
(1) The contractor shall submit a notice of final payment in the business equity management system.
(2) The contractor shall work with DVIN to correct any discrepancies in payments made under a contract.
(3) If DVIN determines that the contractor failed to meet the business equity goal and the city made no changes that impacted the contractor's ability to meet the business equity goal, it shall be considered a breach of the contract and DVIN may impose sanctions in accordance with this article.
(l) Counting business equity firm's participation.
(1) In order for a business equity firm to count toward a business equity goal, such firm must be certified at the time of bid submission. Business equity firms that are scheduled to become certified in an additional NAICS area during execution of the contract may count participation towards the business equity goal for the additional certified work upon notifying DVIN with proof of such certification prior to completion of the work under the contract.
(2) The entire amount of that portion of a contract that is performed by the business equity firm's workforce shall be counted toward a business equity goal, including the cost of supplies and materials obtained for the work performed by the business equity firm's workforce.
(3) The entire amount of fees or commissions charged for providing a bona fide service, such as professional, technical, consultant or managerial services, or for providing bonds or insurance specifically required for the performance of a contract, shall be counted toward the business equity goal, provided the fee is reasonable and not excessive as compared with fees customarily charged for similar services.
(4) When a business equity firm performs as a participant in a joint venture, only the portion of the total dollar value of the contract equal to the distinct, clearly defined portion of the work of the joint venture's contract that is performed by the business equity firms with its own forces and for which it is separately at risk, shall be counted toward the business equity goal.
(5) Only expenditures to a business equity firm that is performing a commercially useful function shall be counted. To determine whether a business equity firm is performing a commercially useful function, the city may evaluate the amount of work subcontracted, industry practices, whether the amount the registered firm is to be paid under the contract is commensurate with the work it is actually performing and other relevant factors. A business equity firms does not perform a commercially useful function if its role is limited to that of an extra participant in the contract through which funds are passed in order to obtain the appearance of participation. When a business equity firm is presumed not to be performing a commercially useful function, the contractor or business equity firm may present evidence to rebut this presumption.
(6) In determining achievement of a business equity goal, the participation of a business equity firm shall not be counted toward the business equity goal until the respective amount has been paid to the business equity firm.
(7) Business equity firms that meet the significant business presence definition and bid as a contractor or subcontractor may count their participation towards the goal. Acceptance is on a contract-by-contract basis.
(Ord. 24534-11-2020, § 1, passed 11-17-2020, eff. 1-1-2021; Ord. 25165-10-2021, § 1, passed 10-19-2021)