SEC. 12D.11. ADDITIONAL FINDINGS SUPPORTING THE RACE- AND GENDER-CONSCIOUS BID PREFERENCESAND PROFESSIONAL SERVICES.

1. By July 1st of each fiscal year subject to this ordinance, issue notices to all City departments informing them of their duties under this ordinance. The notice shall contain the following information: (1) the City-wide MBE/WBE participation goals that departments are expected to use good-faith efforts to attain during the fiscal year and that a department's failure to use good-faith efforts to attain the MBE/WBE participation goals shall be reported to the Board of Supervisors in the Commission's annual report; and (2) the data each department is required to provide the Controller on each contract award;

2. Coordinate and enforce cooperation and compliance by all departments with this ordinance;

3. Establish a three-member Contract Review Committee who shall have the authority to review contracts proposed by the Director or a department to be set aside, where competition for these contracts is limited to MBEs, WBEs and/or joint ventures with MBE/WBEs. The three-member Contract Review Committee shall be composed of the HRC Director, an individual appointed by the Board of Supervisors and an individual appointed by the Mayor. The Board and the Mayor shall appoint individuals who are knowledgeable about contracting practices of the City and of the industry or profession affected by the set-aside of the contract;

4. Establish a three-member Subcontracting Goals Committee which shall have the authority to review decisions by the Director denying a contractor's request, pursuant to Section 12D.9(D)-(4) or 12D.11(A)-(6), to waive or reduce subcontractor participation goals. The three-member Subcontracting Goals Committee shall be composed of an individual appointed by the Commission, an individual appointed by the Board of Supervisors and an individual appointed by the Mayor. The Commission, the Board of Supervisors and the Mayor shall appoint individuals who are knowledgeable about the City's contracting and subcontracting practices and the relevant construction or professional service industry. The Commission, the Board of Supervisors, or the Mayor may not appoint to the Subcontracting Goals Committee the Director or any employee of the Human Rights Commission.

(B) Contract awarding authorities or in the case of a professional services contract, the department making the contract award recommendation, shall:

1. Use good-faith efforts to solicit and obtain quotes, bids or proposals from MBEs and WBEs on all solicitations, or document their unavailability;

2. Unless otherwise indicated in this ordinance and except where prohibited by State or Federal law or regulation, extend a preference in all bids and contracts and in the composition of rating scales as follows: (1) a five-percent preference to (i) a local business or (ii) a joint venture with local MBE or local WBE participation which equals or exceeds 35 percent but is under 40 percent; or (iii) where a joint venture is composed of only local businesses with no local MBE or WBE participation or where the local MBE or local WBE participation is less than 35 percent; (2) a seven and one-half percent (7.5%) preference to (i) a joint venture with local MBE or WBE participation which equals or exceeds 40 percent but is less than 51 percent; (3) a 10-percent preference to (i) a local MBE or local WBE or (ii) a joint venture with local MBE or local WBE participation which equals or exceeds 51 percent.

A joint venture shall receive the aforementioned appropriate bid preference when the MBE or WBE is an active partner in the joint venture and performs work, manages the job and takes financial risks in proportion to the required level of participation stated in the bid documents and 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. The portion of the MBE or WBE joint venturer's work shall be set forth in detail separately from the work to be performed by the nonMBE or nonWBE joint venture partner. The MBE or WBE joint venturer's portion of the contract must be assigned a commercially reasonable dollar value;

3. Arrange contracting by size and type of work to be performed so as most effectively to enhance the opportunity for participation by MBEs and WBEs to the maximum extent feasible. As soon as practical before soliciting quotes, bids or proposals, all contract awarding authorities or in the case of a professional services contract, the department making the contract award recommendation, shall submit all large proposals to the Director for review. The purpose of the Director's review is to determine whether the proposed project can be divided into smaller projects so as to enhance the opportunity for participation by MBEs and WBEs in the project. For purposes of this subsection, the term "large project" shall mean the following: (1) any public works/construction project estimated to cost more than $5,000,000; (2) any professional services contract estimated to cost more than $50,000. If the Director determines, after consulting with the contract awarding authority or department responsible for the project, that the project can be divided into smaller projects, the contract awarding authority or department shall comply with the Director's determination and issue the solicitation for quotes, bids or proposals in accordance with the Director's determination;

4. Adjust bid bonding and insurance requirements as recommended by the City Risk Manager in his May 2, 1989 "Contract Insurance Manual";

5. Utilize a revolving fund as may be established by the City to assist MBEs and WBEs to meet bonding, insurance and other fee-related requirements;

6. Submit to a central office all current bids, requests for proposals, and solicitations with sufficient lead time to provide adequate notice and opportunity to MBEs and WBEs to participate;

7. Impose such sanctions or take such other actions as are designed to ensure compliance with the provisions of this ordinance, which shall include, but are not limited to:

(a) Refusal to grant the award of a contract;

(b) Order the suspension of a contract;

(d) Order the revision of a contract based upon a material breach of contract provisions pertaining to MBE or WBE participation;

(e) Disqualification of a bidder, contractor, subcontractor, or other business from eligibility for providing goods or services to the City for a period not to exceed five years, with a right to review and reconsideration by the Commission after two years upon a showing of corrective action indicating violations are not likely to recur;

8. Not award any contract to a person or business which is disqualified from doing business with the City under the provisions of this ordinance, nor shall any contract be awarded to any person or business which is disqualified from doing business with any governmental agency based on failure to comply with Minority or Women Business Enterprise or contract compliance requirements which are substantially the same as those of this ordinance;

9. Designate a staff person to be responsible for responding to the Director and Commission and to the requirements of this ordinance;

10. Maintain accurate records for each contract awarded, its dollar value, the nature of the goods or services to be provided, the name of the contractor awarded the contract, the efforts made by a construction, architect/engineer contractor to solicit bids from and award subcontracts to MBEs and WBEs;

11. Where feasible, provide technical assistance to MBEs and WBEs to increase their ability to compete effectively for the award of City contracts;

12. Work with the Director and the Controller to implement a City-wide prompt-payment policy requiring that MBEs, WBEs and LBEs be paid by the City within 30 days of the date on which the City receives an invoice from an MBE, WBE or LBE for work performed for the City;

13. Provide the Director with written notice of all contract modifications which result in an increase or decrease of the contract's dollar amount of more than 10 percent. Such notice shall be provided within 30 days of each such contract modification.

(C) Subject to the prior approval of the Director, contract awarding authorities or departments may invite, encourage or request businesses to joint venture on any contract to promote MBE or WBE participation.

(D) For the purpose of determining Minority and Women Business Enterprise participation:

Contracts awarded to joint ventures in which one or more MBEs or WBEs are combined with one or more businesses which are not Minority or Women Business Enterprises shall be deemed to be awarded to Minority or Women Business Enterprises only to the extent of the Minority or Women Business Enterprises' participation in the joint venture.

(E) All contracts subject to this ordinance shall include the following requirements, in addition to such other requirements as may be set forth elsewhere:

1. Bidders and contractors on all contracts shall be required to sign before a notary an affidavit prepared by the City Attorney, declaring under penalty of perjury their intention fully to comply with the provisions of the ordinance;

2. Contracts shall incorporate this ordinance by reference and shall provide that the wilful failure of any bidder or contractor to comply with any of its requirements shall be deemed a material breach of contract;

3. Contracts shall provide that in the event that the Director finds that any bidder, subcontractor or contractor wilfully fails to comply with any of the provisions of this ordinance, rules and regulations implementing the ordinance or contract provisions pertaining to MBE or WBE participation the bidder, subcontractor or contractor shall be liable for liquidated damages for each contract in an amount equal to the bidder's or contractor's net profit on the contract, or 10 percent of the total amount of the contract or $1,000, whichever is greatest, said amount to be determined by the Director pursuant to Section 12D.14(C). All contracts shall also contain a provision in which the bidder, subcontractor or contractor acknowledges and agrees that the liquidated damages assessed shall be payable to the City upon demand and may be set off against any monies due to the bidder, subcontractor or contractor from any contract with the City;

4. Contracts shall require bidders, contractors and subcontractors to maintain records necessary for monitoring their compliance with this ordinance;

5. Contracts shall require that during the term of the contract, the prime contractor shall fulfill the MBE and WBE participation commitments submitted with their bid;

6. Contracts shall require prime contractors to include a contract provision in any subcontract with an MBE or WBE which provides MBE and WBE subcontractors with a remedy for a prime contractor's noncompliance with his or her commitment to utilize MBE and WBE subcontractors. This contractual provision shall include an agreement by the prime contractor to compensate any MBE or WBE subcontractor if the prime contractor does not fulfill its commitment to utilize the MBE or WBE subcontractor. This contractual provision shall also state that it is enforceable in a court of competent jurisdiction;

7. Whenever contract supplements, amendments or change orders are made which cumulatively increase the total dollar value of a construction contract by more than 10 percent, the contractor shall comply with those MBE and WBE provisions of this ordinance which applied to the original contract with respect to the supplement, amendment, or change order;

8. Contracts in which subcontracting is utilized shall prohibit back contracting to the prime contractor or lower-tier subcontracting for any purpose inconsistent with the provisions of this ordinance, rules and regulations adopted pursuant to this ordinance, or contract provisions pertaining to MBE and WBE utilization.

9. Contracts in which subcontracting is utilized shall require the prime contractor/consultant to pay its MBE or WBE subcontractor/subconsultants within three working days after receiving payment from the City unless the prime contractor/consultant notifies the Director in writing within 10 working days prior to payment that there is a bona fide dispute between the prime contractor/consultant and the MBE or WBE subcontractor/subconsultant. The Director may, upon making a determination that a bona fide dispute exists between the prime contractor/consultant and subcontractor, waive this contract requirement. In making the determination as to whether or not a bona fide dispute exists, the Director will not consider the merits of the dispute.

(F) All contracts or other agreements between the City and County of San Francisco and persons or entities, public or private, where such persons or entities receive money from or through the City for the purpose of contracting with businesses to perform public improvements, shall require such persons or entities to comply with the provisions of this ordinance in awarding and administering such contracts, except where prohibited by State or Federal law or regulation.

(G) Where a department can demonstrate, despite its good-faith efforts and application of the bid preference(s), that it has failed substantially to eliminate the exclusion of MBEs or WBEs from City contracting, the department, after consulting with the Director, may request the Contract Review Committee established in Section 12D.8(A)(3) to review and approve the proposed project(s) selected by the department for a set-aside.

(H) City department heads and commissioners shall attend a one-hour mandatory training session on an annual basis. The training session shall be organized and conducted by the Director and shall inform City department heads and commissioners of the requirements of this ordinance.

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 190-91, App. 5/31/91; Ord. 76-92, App. 3/13/92; Ord. 155-92, App. 5/29/92; Ord. 284-92, App. 9/16/92; Ord. 399-95, App. 12/22/95; Ord. 278-96, App. 7/3/96)

SEC. 12D.9. ADDITIONAL FINDINGS SUPPORTING RACE- AND GENDER-CONSCIOUS BID PREFERENCES AND SUBCONTRACTOR PARTICIPATION GOALSWORKS/CONSTRUCTION; SUBCONTRACTING PROGRAM.

(A) In addition to the general findings set forth in Sections 12D.2, 12D.2-1, 12D.2-2, 12D.2-3, 12D.2-4, 12D.2-5 and 12D.2-6 and based upon the record before this Board, the Board hereby makes these additional findings in support of the race- and gender-conscious bid preference provisions and subcontractor participation goals for public works/construction contracts:

1. In Ordinance No. 139-84 this Board identified discriminatory procurement practices against MBEs and WBEs in the award of prime public works/construction contracts.

2. The evidence before this Board relating to the award of prime public works/construction contracts for fiscal year 1987-1988 reflects that MBEs (each ethnic group identified as a minority) and WBEs continue to be awarded contract dollars in amounts that are disproportionately lower than the available number of MBE and WBE prime public works/construction contractors willing and able to perform City construction work. The evidence before this Board relating to the participation of MBE/WBE prime and subcontractors on City construction contracts for fiscal year 1989-1990 reflects that MBEs (each ethnic group identified as a minority) and WBEs continue to be awarded contract dollars in amounts that are disproportionately lower than the available number of MBE and WBE prime and subcontractors willing and able to perform construction work. The statistical results are the same for MBEs for fiscal year 1990-91. These results cannot be attributed to chance. In light of the testimony before this Board and the Commission in 1983, 1984, 1988, 1989 and 1992, and the Redevelopment Agency in 1991, this Board finds that these results can be attributed in part to discriminatory procurement practices and in part to discrimination in the local construction industry against MBEs and WBEs that is manifested in and perpetuated and exacerbated by the City's procurement practices.

3. The evidence before this Board supports the conclusion that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for City prime construction contracts. The weight of the testimony and other evidence before this Board supports the conclusion that nonminority construction contractors competing for or doing business with the City and/or in the public sector limit the participation of MBE and WBE subcontractors on construction contracts by engaging in discriminatory business practices.

4. Race-neutral measures employed by the City in the past for those construction contracts subject to the "lowest, reliable, responsible bidder" standard did not prevent the discriminatory practices from occurring. Since February 1989 the City has pursued race-neutral measures to facilitate MBE/WBE subcontractor participation in construction contracts. From about February 1st to June 30, 1989 the City adopted a race-neutral disadvantaged business program for its construction contracts. Since July 1, 1989 the City has urged prime construction contractors to voluntarily extend subcontracting opportunities to MBE/WBE subcontractors on City construction contracts. These race- and gender-neutral measures employed by the City have not been successful in increasing MBE/WBE subcontractor participation in City construction contracts.

5. The Board is granting a competitive advantage, the bid preference, to prime MBEs and WBEs to offset the identified competitive disadvantage caused by the City's discriminatory procurement practices.

6. The evidence before this Board relating to the award of prime public works/construction contracts for fiscal year 1990-1991 reflects that WBEs have improved their participation in City construction contracts. However, based on the testimony and other evidence before this Board, the Board concludes that remedial action continues to be necessary for WBEs competing for construction contracts to overcome past discrimination in the award of construction prime and sub-contracts. The Director shall closely monitor the participation of WBEs in construction contracts and report the results of such monitoring to the Board pursuant to Section 12D.6(B)2.

(B) For all public works/construction contracts, the contract awarding authority shall furnish the Director with an informational copy of all bid conditions and requests for proposals, along with a statement identifying all funds provided by any other governmental agency which will be used in payment of the contract.

(C) Architect and engineer services provided to the City in connection with a public works/construction contract are governed by Section 12D.11.

(D) MBE/WBE Subcontracting Program. For all public works/construction contracts in which the contract awarding authority reasonably anticipates will include subcontractor participation, the contract awarding authority, prior to the solicitation of bids, shall provide the Director with a proposed job scope, and may submit written recommendations to the Director regarding MBE and WBE subcontractor participation goals to be set for the contract. The Director shall set the participation goals pursuant to Section 12D.9.(D)-(1).

(D)-(1) Upon receipt of a proposed job scope and/or a written recommendation from a contracting awarding authority pursuant to Section 12D.9.(D), the Director shall set the MBE and WBE participation goals for each construction contract based upon the following factors:

1. The extent of subcontracting opportunities presented by the contract;

2. The availability of MBE/WBE subcontractors capable of providing goods and services on the construction contract.

The Director shall set the MBE and WBE participation goals within 10 working days of the date the Director receives from a contract awarding authority a proposed job scope and/or written recommendation. If the Director fails to act within 10 days, and if the contract awarding authority submitted to the Director recommended goals pursuant to Section 12D.9.(D), the recommended goals shall be deemed approved by the Director, provided that the recommended goals are based upon the factors identified in Subsections (D)-(1) 1 and 2 above.

(D)-(2) Bid conditions shall require bidders on prime construction contracts to do the following:

1. Demonstrate in their bid that they have used good-faith efforts to utilize MBE and WBE subcontractors;

2. Identify the particular MBEs and WBEs subcontractors to be utilized in performing the contract, specifying for each the dollar value of the participation, the type of work to be performed and such information as may reasonably be required to determine the responsiveness of the bid.

Except as provided in Section 12D.9.(D)-(5), bids not meeting the requirements of Section 12D.9.(D)-(2) shall be declared non-responsive.

(D)-(3) A contract awarding authority may request that the Director waive or reduce the MBE and WBE subcontractor participation goals on construction contracts by submitting the reasons therefor in writing to the Director prior to the solicitation of bids.

(D)-(4) A bidder or contractor may request that the Director waive or reduce the amount of MBE or WBE subcontractor participation goals on a construction contract by submitting the reasons therefor in writing to the contract awarding authority with its bid.

(D)-(5) The Director may grant the request for waiver or reduction made pursuant to Sections 12D.9(D)-(3) and (D)-(4) upon a determination that:

1. The reasonable and necessary requirements of the construction contract render subcontracting or the participation of businesses other than bidder unfeasible;

2. Qualified MBEs and/or WBEs capable of providing the goods or services required by the contract are unavailable, despite the prime contractor's or the department's good-faith efforts to locate MBEs and WBEs to meet the participation goals; or

3. The available MBEs and WBEs have given price quotes which are unreasonably high in that they exceed competitive levels beyond amounts which can be attributed to cover costs inflated by the present effects of discrimination.

(D)-(6) Whenever the Director denies a contractor's request to waive or reduce the participation goals, the contractor may appeal that denial to the Subcontracting Goals Committee established pursuant to Section 12D.8(A)4. The Subcontracting Goals Committee's decision on the request shall be final. In reviewing the Director's denial of a contractor's request to waive or reduce participation goals, the Subcontracting Goals Committee shall consider the extent of subcontracting opportunities presented by the contract and the availability of MBE/WBE subcontractors capable of providing goods and services on the construction contract.

The Subcontracting Goals Committee may overrule the Director and grant the request for waiver or reduction only upon finding that:

1. The reasonable and necessary requirements of the construction contract render subcontracting or the participation of businesses other than bidder unfeasible;

(D)-(7) Prior to entering into any prime construction contract, the contract awarding authority shall require bidders on the contracts to contact all MBEs and WBEs before the MBE/WBEs are listed as subcontractors in the bid.

(D)-(8) During the term of the contract, any failure to comply with the level of MBE and WBE subcontractor participation specified in the contract shall be deemed a material breach of contract.

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 76-92, App. 3/13/92; Ord. 155-92, App. 5/29/92; Ord. 210-97, App. 5/30/97; Ord. 457-97, App. 12/15/97; Ord. 82-98, App. 3/6/98; Ord. 186-98, App. 6/5/98; Ord. 256-98, App. 7/31/98)

SEC. 12D.10. ADDITIONAL FINDINGS SUPPORTING RACE- AND GENDER-CONSCIOUS BID PREFERENCESCONTRACTS.

1. In Ordinance No. 139-84 this Board identified discriminatory procurement practices in the award of purchasing contracts.

2. The evidence before this Board relating to the award of contracts for fiscal year 1987-1988 reflects that MBEs (each ethnic group listed as a minority) and WBEs continue to be awarded contract dollars in certain categories of purchasing contracts in dollar amounts that are disproportionately lower than the available number of MBEs and WBEs in the private sector. These results cannot be attributed to chance. In light of the testimony before this Board and the Commission in 1983, 1984, 1988 and 1989, this Board finds that these results can only be attributed to discriminatory procurement practices.

3. The evidence before this Board supports the conclusion that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for the aforementioned purchasing contracts.

4. Race-neutral measures employed by the City in the past for those purchasing contracts subject to the "lowest, reliable, responsible bidder" standard did not prevent the discriminatory practices from occurring.

5. The Board is granting a competitive advantage, the bid preference, to MBEs and WBEs to offset the identified competitive disadvantage caused by the City's discriminatory procurement practices.

6. The evidence before this Board relating to the award of purchasing contracts for fiscal years 1989-1990 and 1990-1991 reflects that certain minority groups have improved their participation in City purchasing contracts. However, based on the testimony and other evidence before this Board, the Board concludes that remedial action continues to be necessary to enable these groups to overcome past discrimination in the award of purchasing contracts. The Director shall closely monitor the participation of these groups in purchasing contracts and report the results of such monitoring to the Board pursuant to Section 12D.6(B)(2).

(B) Equipment and supplies contracts or general services contracts as defined herein awarded by the purchaser shall be subject to the race- and gender-conscious bid preferences of this ordinance.

(C) In addition to the duties given the purchaser elsewhere, the purchaser shall maintain, with the assistance of the Director, a current list of Minority and Woman Business Enterprises certified by the Commission to provide each of those commodities or services subject to this ordinance which the purchaser indicates are required by the City. The purchaser shall notify the Director prior to solicitation of bids or quotations whenever no such certified businesses are available for a contract subject to the race- and gender-conscious bid preferences of this ordinance, unless the Director waives such notification based on the known unavailability of such qualified businesses to perform a particular contract. The Director shall attempt to identify qualified businesses, and if successful, shall notify the purchaser of their availability; the purchaser shall provide such MBEs and WBEs every practical opportunity to submit bids or quotations.

(D) The purchaser shall also maintain a central office where all bids, requests for proposals and solicitations will be listed and kept current.

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 155-92, 5/29/92; Ord. 210-97, App. 5/30/97; Ord. 457-97, App. 12/15/97; Ord. 82-98, App. 3/6/98; Ord. 186-98, App. 6/5/98; Ord. 256-98, App. 7/31/98)

SEC. 12D.11. ADDITIONAL FINDINGS SUPPORTING THE RACE- AND GENDER-CONSCIOUS BID PREFERENCESAND PROFESSIONAL SERVICES.

(A) In addition to the general findings set forth in Sections 12D.2, 12D.2-1, 12D.2-2, 12D.2-3, 12D.2-4, 12D.2-5 and 12D.2-6 and based upon the record before this Board, the Board hereby makes additional findings in support of the race- and gender-conscious bid preferences for the following specifically enumerated professional services contracts:

Legal, architect and engineer, computer systems, management consulting, medical services.

1. In Ordinance No. 139-84 this Board identified discriminatory procurement practices against MBEs and WBEs in the award of prime professional services contracts.

2. The evidence before this Board relating to the award of prime legal services contracts for fiscal year 1987-1988 reflects that Black law firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Black law firms willing and able to perform legal services for the City. These results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

The statistical evidence before this Board reflects that there are few Asian, Black, Latino and woman owned law firms certified by the Director to provide legal services to the City. An April 1988 San Francisco Bar Association study concludes that there is significant disparity between equally qualified white and minority lawyers in terms of income, current employment positions, hiring, promotion and retention in San Francisco. The study also concludes that a high percentage of white and minority lawyers believe that racial discrimination plays a role in the employment practices of San Francisco legal employers. The report of the Judicial Council Advisory Committee on Gender Bias in the Courts on Civil Litigation and Courtroom Demeanor concludes, among other points, that opportunities for advancement and promotion in the legal profession appear less available to women than to men. In view of these studies, the Board finds that minority lawyers are excluded from employment opportunities due to discriminatory employment practices in San Francisco and that women lawyers are excluded from employment opportunities due to discriminatory practices in California. These employment practices prevent minority and women lawyers from gaining the necessary experience that would enable minority and women lawyers to compete for City legal services contracts. The City in its award of legal services contracts will become a passive participant in those practices.

The City is granting Asian, Black, Latino and woman owned law firms a bid preference pursuant to Section 12D.8.(B)2 to encourage majority law firms to joint venture with these minority and woman owned law firms when competing for the award of City contracts for legal services. Department shall also grant a seven and one-half percent (7.5%) bid/rating preference to any majority owned law firm based in San Francisco that enters into an affirmative action program with the Director and agrees to take affirmative action to perform the following: (1) increase the recruitment, hiring, retention and advancement to partnership of minority lawyers within the firm; (2) have minority lawyers within the firm capable of providing the required services included among those who represent the City; (3) maintain and expand existing joint ventures or other formal associations with minority owned law firms, and retain and otherwise enter into joint ventures or other formal associations with minority owned law firms with which the firm does not currently have such a relationship, on legal matters of the law firm clientele calling for such a relationship; (4) request all law firms which serve as associate counsel, co-counsel or local counsel to the firm to adopt in principle these goals; (5) refer conflict of interest situations to minority owned law firms; and (6) take such additional steps as are practicable to foster and enhance relations between the majority firm and minority owned law firms, including but not limited to providing educational and training opportunities in furtherance of the objectives of this Ordinance as it relates to the legal profession. The affirmative action program developed pursuant to this subsection shall be effective for a period of 12 months after the date of agreement in writing by the law firm and the Director or the term of the legal services contract, whichever term is greater.

3. The evidence before this Board relating to the award of prime architect and engineering contracts for fiscal year 1987-1988 reflects that Black and woman owned architectural/engineering firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Black and woman owned architectural/engineering firms willing and able to perform these services for the City. The evidence before this Board relating to the award of prime architect and engineering contracts for fiscal year 1989-1990 reflects that Asian owned architectural/engineering firms have been awarded contract dollars in amounts that are disproportionately lower than the available numbers of Asian owned architectural/engineering firms willing and able to perform these services for the City. Given that Asian owned architectural/engineering firms enjoy a relatively large share of this market, these statistically significant results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

The evidence before this Board relating to the award of prime architect and engineering contracts for fiscal year 1989-90 reflects that Latino owned architectural/engineering firms have not been awarded any contract dollars notwithstanding the available numbers of Latino owned architectural/engineering firms willing and able to perform these services for the City. Based on the statistical and other evidence before this Board, the Board concludes that the lack of participation by Latino owned architectural and engineering firms on prime architectural/engineering contracts cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

4. The evidence before this Board relating to the award of prime computer systems services contracts for fiscal year 1987-1988 reflects that Asian, Black and woman owned computer systems firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Asian, Black and woman owned computer systems firms willing and able to perform these services for the City. These results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

5. The evidence before this Board relating to the award of prime management consulting services contracts for fiscal year 1987-1988 reflects that Asian, Black and woman owned management consulting firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Asian, Black and woman owned management consulting firms willing and able to perform these services for the City. These results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

6. The evidence before this Board relating to the award of prime medical services contracts for fiscal year 1987-1988 reflects that Asian, Latino and woman owned medical services firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Asian, Latino and woman owned medical services firms willing and able to perform these services for the City. The evidence before this Board relating to the award of prime medical services contracts for fiscal year 1989-90 reflects that Black owned medical services firms are awarded contract dollars in amounts that are disproportionately lower than the available numbers of Black owned medical services firms willing and able to perform these services for the City. These results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

7. The evidence before this Board relating to the award of prime miscellaneous professional services contracts for fiscal year 1989-1990 reflects that Asian, Latino, Black and woman owned firms which provide miscellaneous professional services are awarded contract dollars in amounts that are disproportionately lower than the available numbers of Asian, Latino, Black and woman owned firms willing and able to perform these services for the City. These results cannot be attributed to chance. This Board finds that these results can only be attributed to discriminatory procurement practices.

8. The evidence before this Board supports the conclusion that aforementioned MBEs and WBEs are disadvantaged by discriminatory practices when competing for City prime professional services contracts.

9. The Board is granting a competitive advantage, the bid preference, to the MBEs and WBEs identified as having been subject to the identified competitive disadvantage caused by the City's discriminatory procurement practices in the award of the aforementioned professional services contracts.

10. The evidence before this Board relating to the award of professional services contracts for fiscal year 1990-1991 reflects that certain minority groups have improved their participation in certain City professional services contracts. However, based on the testimony and other evidence before this Board, the Board concludes that remedial action continues to be necessary to enable these groups to overcome past discrimination in the award of professional services contracts. The Director shall closely monitor the participation of these groups in professional services contracts and report the results of such monitoring to the Board pursuant to Section 12D.6(B)2.

(A)-(1) In addition to the general findings set forth in Section 12D.2 and the findings set forth in 12D.2-2, 12D.2-3, 12D.2-4, 12D.2-5 and 12D.2-6 and 12D.11(A)3, and based upon the record before this Board, the Board hereby makes these additional findings in support of establishing subcontractor participation goals for architectural/engineering contracts:

a. The evidence before this Board relating to the award of architectural and engineering prime contracts and subcontracts for fiscal years 1989-1991 shows that Black, Asian, Latino and woman owned architectural and engineering firms continue to be awarded contract dollars in amounts that are disproportionately lower than the available numbers of Black, Asian, Latino and woman owned architectural and engineering firms willing and able to perform these services for the City. These statistically significant disparities exist despite the fact that Black, Asian, Latino and woman owned firms are entitled to a bid preference on prime architectural and engineering contracts. In light of the testimony before this Board and the Commission in 1983, 1984, 1988, 1989, 1991 and 1992, the San Francisco Redevelopment Agency in 1991, and the San Francisco Unified School District in 1991 and 1992, this Board finds that these results can be attributed in part to discriminatory contracting practices and in part to discrimination in the local architectural and engineering industries against MBE and WBE architects and engineers. This discrimination is manifested in, and perpetuated and exacerbated by, the City's contracting practices.

b. The evidence before this Board supports the conclusion that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for City architectural and engineering contracts, and when competing to provide subcontractor services on City architectural and engineering contracts. The weight of the testimony and other evidence before this Board supports the conclusion that nonminority architects and engineers competing for or doing business with the City and/or in the private sector limit the participation of MBE and WBE subcontractors on architectural and engineering contracts by engaging in discriminatory business practices.

c. Race-neutral measures employed by the City in the past did not prevent the discriminatory practices from occurring. Since February 1989 the City has pursued race-neutral measures to facilitate MBE/WBE subcontractor participation in architectural and engineering contracts. From about February 1st to June 30, 1989 the City adopted a race-neutral disadvantaged business program for its architectural and engineering contracts. Since July 1, 1989 the City has urged prime architects and engineers to voluntarily extend subcontracting opportunities to MBE/WBE subcontractors on City architectural and engineering contracts. These race- and gender-neutral measures employed by the City have not been successful in increasing MBE/WBE participation in City architectural and engineering contracts.

(A)-(2) MBE/WBE Subcontracting Program. For all architectural and engineering contracts which the contract awarding authority reasonably anticipates will include subcontractor participation involving architectural/engineering and related services, the contract awarding authority, prior to requesting proposals, shall provide the Director with a proposed job scope, and may submit written recommendations to the Director regarding MBE and WBE subcontractor participation goals to be set for the contract. The Director shall set the participation goals pursuant to Section 12D.11(A)-(3).

(A)-(3) Upon receipt of a proposed job scope and/or a written recommendation from a contract awarding authority pursuant to Section 12D.11(A)-(2), the Director, shall set the MBE and WBE participation goals for each architectural and engineering contract based on the following factors:

1. The extent of subcontracting opportunities presented by the contract for architectural/engineering and related services;

2. The availability of MBE/WBE subcontractors capable of providing such services on the contract.

The Director shall set the MBE and WBE participation goals within 10 working days of the date the Director receives from a contract awarding authority a proposed job scope and/or written recommendation. If the Director fails to act within 10 days, and if the contract awarding authority submitted to the Director recommended goals pursuant to 12D.11(A)-(2), the recommended goals shall be deemed approved by the Director, provided that the recommended goals are based upon the factors identified in this subsection.

(A)-(4) Requests for proposals shall require bidders on architectural and engineering contracts to do the following:

1. Demonstrate in their proposal that they have used good-faith efforts to utilize MBE and WBE subcontractors;

2. Identify the particular MBE and WBE subcontractors (which may include lower-tier MBE and WBE subcontractors) to be utilized in performing the contract, specifying for each the dollar value of participation, the type of work to be performed and such information as may reasonably be required to determine the responsiveness of the proposal.

Except as provided in Section 12D.11(A)-(7), proposals not meeting the requirements of Section 12D.11(A)-(4) shall be declared nonresponsive.

(A)-(5) A contract awarding authority may request that the Director waive or reduce the MBE and WBE subcontractor participation goals on architectural and engineering contracts by submitting the reasons therefor in writing to the Director prior to requesting proposals.

(A)-(6) A bidder may request that the Director waive or reduce the MBE and WBE subcontractor participation goals on an architectural or engineering contract by submitting the reasons therefor in writing to the contract awarding authority with its bid.

(A)-(7) The Director may grant the request for waiver or reduction made pursuant to Sections 12D.11(A)-(5) and (A)-(6) upon a determination that:

1. The reasonable and necessary requirements of the architectural or engineering contract render subcontracting or the participation of businesses other than the bidder unfeasible;

2. Qualified MBEs and/or WBEs capable of providing the services required by the contract are unavailable, despite the bidder's or the department's good-faith efforts to locate MBEs and WBEs to meet the participation goals; or

(A)-(8) Whenever the Director denies a bidder's request to waive or reduce the participation goals, the bidder may appeal that denial to the Subcontracting Goals Committee established pursuant to Section 12D.8(A)4. The Subcontracting Goals Committee's decision on the request shall be final. In reviewing the Director's denial of a bidder's request to waive or reduce participation goals, the Subcontracting Goals Committee shall consider the extent of subcontracting opportunities presented by the contract and the availability of MBE/WBE subcontractors capable of providing services on the contract.

The Subcontracting Goals Committee may overrule the Director and grant the request for waiver or reduction only upon finding that:

1. The reasonable and necessary requirements of the contract render subcontracting or the participation of businesses other than bidder unfeasible;

(A)-(9) The contract awarding authority shall require bidders on architectural and engineering contracts to contact all MBEs and WBEs listed as subcontractors in proposals before listing such MBEs and WBEs.

(A)-(10) During the term of the contract, any failure to comply with the level of MBE and WBE subcontractor participation specified in the contract shall be deemed a material breach of contract.

(A)-(11) In implementing this subcontracting program, the Director may encourage contract awarding authorities and prime contractors to take into consideration when recruiting subcontractors the degree of underutilization of MBEs and WBEs within the specific industries or subindustries called for by the contract.

(B) For all professional services contracts as defined herein, the contract awarding authority or the department making the contract award recommendation shall furnish the Director with an informational copy of all bid conditions and requests for proposals, if any, along with a statement identifying all funds provided by any other governmental agency which will be used in payment of the contract. Prior to solicitation of bids or proposals, the Director may make recommendations to the contract awarding authority with respect to provisions pertaining to MBE and WBE participation.

(C) Professional services contracts, the estimated cost of which exceeds $10,000, shall be awarded and administered in accordance with the following standards and procedures:

1. The contract awarding authority or the department making the contract award recommendation shall use good-faith efforts to solicit bids or proposals from MBEs and WBEs certified to provide the specified services. MBEs and WBEs shall be provided every practical opportunity to submit bids or proposals;

2. City departments shall include amongst consultant selection panelists individuals who are women and minorities;

3. All consultant selection panels and awarding officers shall apply the bid/rating preferences to each stage of the selection process, e.g., qualifications, proposals and interviews. Each evaluator shall score each consultant on a point system based on a predetermined evaluation criteria and predetermined point value. The selection criteria shall be based solely on objective factors that are related to the ability of the contractor to perform the proposed project. The bid/rating preference shall be applied to the score attained by the MBE, WBE, and/or LBE as set forth in this ordinance. If the highest score is attained by a MBE or WBE, the department shall enter into good-faith negotiations with that consultant. Subject to the prior approval of the Director and upon a showing that those negotiations were undertaken in good faith with the aforementioned MBE or WBE consultant, a department may award the contract to another competing consultant.

4. The Director is empowered to take actions as are designed to ensure compliance with the provisions of this Section, which shall include, but are not limited to:

(a) Order the suspension of the selection process;

(b) Intervene in the selection process to correct contracting practices which hinder equal business opportunities for MBEs and WBEs.

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 190-91, App. 5/31/91; Ord. 344-91, App. 9/19/91; Ord. 155-92, App. 5/29/92; Ord. 284-92, App. 9/16/92; Ord. 210-97, App. 5/30/97; Ord. 457-97, App. 12/15/97; Ord. 82-98, App. 3/6/98; Ord. 186-98, App. 6/5/98; Ord. 256-98, App. 7/31/98)

SEC. 12D.12. GOOD-FAITH EFFORTS REQUIRED FOR OTHER CONTRACTS.

(A) All City and County departments, commissions, boards, officers and employees, in the deposit of City funds and performance of their other official duties, and in the award of leases, franchises, concessions, and contracts not subject to the race- and gender-conscious bid preferences of this ordinance shall make every good-faith effort to use the services of Minority Business Enterprises and Women Business Enterprises. Such services shall include, but are not limited to, the financial services of banks, savings and loan companies and other commercial financial institutions, arrangement of travel and accommodations when traveling on official City business and such other services needed by City departments. Commissions and boards shall submit to the Director on an annual basis a written report on the efforts made pursuant to this Subsection.

(B) The City Treasurer, the Controller, the Health Service System and the Retirement Board shall report annually to the Director, with copies to the Mayor and the Board of Supervisors, their utilization of MBEs and WBEs.

(Added by Ord. 175-89, App. 5/30/89; Ord. 278-96, App. 7/3/96)

SEC. 12D.13. EXCEPTIONS AND WAIVERS.

(A) The Director shall waive the race- and gender-conscious bid preferences and good-faith efforts requirements of this ordinance under the following circumstances:

1. Whenever the Director finds, with the advice of the contract awarding authority, that needed goods or services are available only from a sole source and the prospective contractor is not currently disqualified from doing business with the City, or from doing business with any governmental agency based on a failure to comply with Minority or Women Business Enterprise or contract compliance requirements;

2. If the contract awarding authority certifies in writing to the Director that: (1) pursuant to Administrative Code Section 6.30 the contract is necessary to respond to an emergency which endangers the public health or safety and (2) there is no time to apply the bid preference(s) and no MBEs or WBEs capable of performing the emergency work are immediately available; provided that such certification shall be made prior to the Controller's contract certification.

(B) The Director shall waive the five-percent LBE bid preference for contracts in excess of $5,000,000 whenever a contract awarding authority establishes that: (1) sufficient qualified Local Business Enterprises capable of providing the needed goods and services required by the contract are unavailable and (2) sufficient qualified businesses located outside of San Francisco capable of providing the needed goods and services required by the contract are available; or (3) the application of the five-percent LBE preference will result in significant additional costs to the City if the waiver of the bid preference is not granted.

(C) Pursuant to Administrative Code Section 6.29-2, the bid preference provisions of this ordinance are not applicable to any contract for the construction, reconstruction or repair of public buildings, streets, utilities or other public work or improvement estimated to cost in excess of $10,000,000.

(D) Pursuant to Administrative Code Section 21.11-2, the bid preference provisions of this ordinance are not applicable to any contract for the purchase of materials, supplies or equipment estimated to cost in excess of $10,000,000.

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 190-91, App. 5/31/91)

SEC. 12D.14. MONITORING AND COMPLIANCE.

(A) The Director shall monitor the City's progress toward achievement of the goals stated in Section 12D.3 (declaration of policy). The Director shall issue an exit report for any contract which includes MBE/WBE prime contractor participation as a joint venture partner. The purpose of the exit report is to ensure that MBE/WBEs are actually performing services on joint ventures.

(B) Noncompliance By Contractors. In cases where the Director has cause to believe that a contractor acting in good faith has failed to comply with any of the requirements of this ordinance, rules and regulations adopted pursuant to this ordinance, or contract provisions pertaining to MBE or WBE participation, the Director shall notify the contract awarding authority and shall attempt to resolve the noncompliance through conciliation. If the noncompliance cannot be resolved, the Director shall submit to the Commission and the contractor a written Finding of Noncompliance. The Human Rights Commission shall give the contractor an opportunity to appeal the Finding, and if the Commission concurs with the finding of the Director, it shall take such action as will effectuate the purposes of this ordinance.

(C) Wilful or Bad Faith Noncompliance by Contractors. In cases where the Director has cause to believe that any bidder or contractor has wilfully failed to comply with any of the provisions of this ordinance, rules and regulations adopted pursuant to this ordinance, or contract provisions pertaining to MBE or WBE participation, the Director shall be empowered to conduct an investigation and after affording the contractor notice and an opportunity to be heard, may impose sanctions for each violation of this subsection. Such sanctions shall include but are not limited to:

(a) Declare the bidder or contractor non-responsive and ineligible to receive the award of the contract;

(b) Declare the bidder or contractor an irresponsible bidder and disqualify the bidder or contractor from eligibility for providing goods or services to the City and County for a period of five years, with a right of review and reconsideration by the Commission after two years upon a showing of corrective action indicating violations are not likely to reoccur;

(d) Determine that the bidder or contractor has wilfully failed to comply with the provisions of this ordinance and pursuant to the provision in the contract contemplated by Section 12D.8(E)3 of the ordinance, calculate the liquidated damages for which the bidder or contractor shall be liable.

Thereafter the Director shall send a written notice to the Controller, the Mayor and to all contract awarding authorities or City department officials overseeing any contract with the bidder or contractor that a determination of a bad-faith compliance has been made and that all payments due the bidder or contractor shall be withheld as agreed to by the bidder or contractor and the City pursuant to Section 12D.8(E)3.

In addition, the Director shall transmit to the Bureau of Delinquent Revenues a report of the determination of liability and ask the Bureau of Delinquent Revenues to coordinate efforts with the Controller and other applicable City departments to ensure that the liquidated damages are paid to the City.

The bidder or contractor may appeal the Director's decision to the Human Rights Commission, which may sustain, reverse or modify the Director's findings and sanctions imposed or take such other action as will effectuate the purposes of this ordinance.

An appeal by a contractor under this subsection shall not stay the Director's findings.

(D) The Director may require such reports, information and documentation from contractors, bidders, contract awarding authorities and the head of any department, division, or office of the City as are reasonably necessary to determine compliance with the requirements of this ordinance.

(E) Noncompliance by City Departments. Whenever the Director finds after investigation that a contract awarding authority has wilfully failed to comply with the provisions of this ordinance, a written Finding of Noncompliance specifying the nature of the noncompliance shall be transmitted to the contract awarding authority, the Commission, the Mayor and Board of Supervisors; and

The Director shall attempt to resolve any noncompliance through conference and conciliation. Should such attempt fail to resolve the noncompliance, the Director shall transmit a copy of the Finding of Noncompliance along with a finding that conciliation was attempted and failed to the Commission which shall notify the contract awarding agency to take appropriate action to secure compliance.

The Finding of Noncompliance shall be communicated to the Mayor and the Board of Supervisors.

(F) If the Director has reason to believe that any person has knowingly made, filed, or caused to be filed with the City any materially false or misleading statement or report made in connection with this ordinance, the Director shall report that information to the City Attorney or the District Attorney for appropriate action. The Director shall be empowered to conduct an investigation and for each violation of this subsection, 12D.14(F), to impose sanctions as set forth in Section 12D.14(C).

(Added by Ord. 175-89, App. 5/30/89; amended by Ord. 278-96, App. 7/3/96)

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