173.04 MBE ELIGIBILITY AND CERTIFICATION.
(a) Each business, including the MBE partner in a joint venture, wishing to participate in City contracts as a MBE, shall complete and submit an MBE application. Each entity wishing to participate as a joint venture MBE shall in addition complete and submit a MBE joint venture application. The application shall be signed by the authorized representative of the business entity and shall be sworn to before a notary public. A business seeking certification as an MBE shall submit the required application with its bid.
(b) The MBE Officer shall apply the following standards in determining whether a business enterprise qualifies for MBE status:
(1) Bona fide minority group membership shall be established on the basis of the individual's claim that he or she is a member of a minority group and is so regarded by that particular minority community.
(2) An eligible MBE under this part shall be an independent business. The ownership and control by minorities shall be real, substantial and continuing and shall be beyond the pro forma ownership of the firm as reflected in its ownership documents. The minority owners shall enjoy the customary incidents of ownership and shall share in the risks and profits commensurate with their ownership interests, as demonstrated by an examination of the substance rather than form of arrangements. Recognition of the business as a separate entity for tax or corporate purposes is not necessarily sufficient for recognition as a MBE. In determining whether a potential MBE is an independent business, the MBE Officer shall consider the date the business was established, the adequacy of its resources for the work of the contract, and the degree to which financial, equipment leasing and other relationships with non-minority firms vary from industry practice.
(3) The minority owners shall also possess the power to direct or cause the direction of the management and policies of the firm and to make the day- to-day as well as major decisions on matters of management, policy and operations. The firm shall not be subject to any formal or informal restrictions which limit the customary discretion of the minority. There shall be no restrictions through, for example, bylaw provisions, partnership agreements or requirements in articles of incorporation for cumulative voting rights or otherwise that prevent the minority owners, without the cooperation or vote of any owner who is not a minority, from making a business decision of the firm.
(4) If the owners of the firm who are not minorities are disproportionately responsible for the operation of the firm, then the firm is not controlled by minorities and shall not be considered an MBE within the meaning of this chapter. Where the actual management of the firm is contracted out to individuals other than the owner, those persons who have the ultimate power to hire and fire the managers can, for the purpose of this part, be considered as controlling the business.
(5) All securities which constitute ownership and/or control of a corporation for purposes of establishing it as an MBE under this part shall be held directly by minorities. No securities held in trust, or by any guardian for a minor, shall be considered as held by a minority in determining the ownership or control of a corporation.
(6) Newly formed firms and firms whose ownership and/or control has changed since the date of the advertisement of the contract shall be reviewed to determine the reasons for the timing of the formation of or change in the firm.
(7) A previous and/or continuing employer-employee relationship between or among present owners shall be reviewed to ensure that the employee-owner has management responsibilities and capabilities discussed in this section.
(8) Any relationship between an MBE and a business which is not an MBE, but which has an interest in the MBE, shall be reviewed to determine if the interest of the non-MBE conflicts with the ownership and control requirements of this section.
(c) A joint venture is eligible under this section if the MBE partner of the joint venture meets the standards for an eligible MBE set forth above and the MBE partner is responsible for a clearly defined portion of the work to be performed and shares in the ownership, control, management responsibilities, risks and profits of the joint venture.
(d) A business wishing to be certified as an MBE or joint venture MBE shall provide such additional information to the City as the MBE Officer shall request.
(e) If after review and applying the above standards, the MBE Officer determines that applying business enterprise is a bona fide MBE, he shall certify the business enterprise as an MBE firm and issue an MBE certification number to the firm. The certification shall be effective as long as the information in the relevant MBE application continues to be true, but no longer than for a period of twelve months.
(f) Once certified, an MBE shall update its MBE application annually. If at any time there is a change in ownership or control of the firm, the MBE shall submit a new MBE application.
(Ord. 93-001. Passed 1-5-93.)