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The race- and gender-conscious bid discounts of this ordinance shall be afforded only to economically disadvantaged minority- and women-owned businesses in all specifically enumerated categories of City contracts for the procurement of goods and services subject to exemptions hereinafter specifically enumerated. The local business bid discount shall be afforded to all economically disadvantaged local businesses in the award of all City contracts for the procurement of goods and services subject to exceptions hereinafter specifically enumerated in Section 12D.A.15.
(Added by Ord. 296-98, App. 10/5/98)
"Architect/Engineering Contracts" shall mean an agreement for architects, engineers, and other outside temporary professional design, consultant or construction management services for a public work project.
"Back contracting" shall mean any agreement or other arrangement between a prime contractor and its subcontractor that requires the prime contractor to perform or to secure the performance of the subcontract in such a fashion and/or under such terms and conditions that the prime contractor enjoys the financial benefits of the subcontract. Such agreements or other arrangements include, but are not limited to, situations in which either a prime contractor or subcontractor agrees that any term, condition or obligation imposed upon the subcontractor by the subcontract shall be performed by or be the responsibility of the prime contractor.
"Best efforts" when required of contract awarding authority shall mean reasonable efforts to include minorities, MBEs, women, or WBEs in City contracting.
"Bid" shall mean and include a quotation, proposal, solicitation or offer by a bidder or contractor to perform or provide labor, materials, equipment, supplies or services to the City and County of San Francisco for a price.
"Bidder" shall mean any business that submits a quotation, bid or proposal to provide labor, materials, equipment, supplies or services to the City and County of San Francisco.
"City" shall mean the City and County of San Francisco.
"Commercially useful function" shall mean that the business is directly responsible for providing the materials, equipment, supplies or services to the City as required by the solicitation or request for quotes, bids or proposals. MBEs, WBEs or LBEs that engage in the business of providing brokerage, referral or temporary employment services shall not be deemed to perform a "commercially useful function" unless the brokerage, referral or temporary employment services are those required and sought by the City. When the City requires and seeks specialty products made to order for the City or otherwise seeks products which, by industry practice, are not regularly stocked in warehouse inventory but instead are purchased directly from the manufacturer, the value of the "commercially useful function" provided by a supplier or distributor shall be valued at no more than five percent of the cost of the product. When the City requires and seeks products which are, by industry practice, stocked in warehouse inventory and are in fact, regularly stocked by the listed supplier or distributor, the value of the "commercially useful function" provided by the supplier or distributor shall not exceed sixty percent of the cost of the product. If the listed supplier or distributor does not regularly stock the required product, the value of the "commercially useful function" provided by the supplier or distributor shall be valued at no more than five percent of the cost of the product.
"Commission" shall mean the Human Rights Commission of the City and County of San Francisco.
"Commodity" shall mean products, including materials, equipment and supplies, purchased by the City.
"Concession" shall mean any privilege conferred by the City on a person to engage in business on property owned or leased by the City.
"Contract" shall mean and include any agreement between the City and a person to provide or procure labor, materials, equipment, supplies or services to, for or on behalf of the City. A "contract" shall include an agreement between the City and a person or nonprofit entity to perform construction-related services or fund the performance of such services. A "contract" does not include: (1) awards made by the City with federal/State grant or City funds to a nonprofit entity where the City offers assistance, guidance, or supervision on a project or program and the recipient of the grant award uses the grant monies to provide services to the community; (2) sales transactions where the City sells its personal or real property; (3) a loan transaction where the City is acting as a debtor or a creditor; (4) lease, franchise, or concession agreements; (5) agreements to use City real property; (6) gifts of materials, equipment, supplies or services to the City; or (7) agreements with a public agency except as provided in Section 12D.A.9(E).
"Contract awarding authority" shall mean the City officer, department, commission, employee or board authorized to enter into contracts on behalf of the City. In the case of an agreement with a person or nonprofit entity to perform or fund the performance of construction-related services, the term "contract awarding authority" shall mean the person or nonprofit entity receiving funds from the City to perform or fund the performance of such services.
"Contractor" shall mean any person(s), firm, partnership, corporation, or combination thereof, who submits a bid or proposal to perform, performs any part of, agrees with a person to provide services relating to and/or enters into a contract with department heads and officers or contract awarding authorities empowered by law to enter into contracts on the part of the City for public works or improvements to be performed, or for goods or services or supplies to be purchased at the expense of the City or to be paid out of monies deposited in the treasury or out of trust monies under the control of or collected by the City.
"Control" of a business shall refer to the possession of the legal authority and power to manage business assets, good will and daily operations of the business, and the active and continuous exercise of such authority and power in determining the policies and directing the operations of the business.
"Director" shall mean the Director of the Human Rights Commission of San Francisco.
"Discount" shall mean an upward or downward price adjustment, according to the context, that is made for the purpose of remedying, in the case of MBEs and WBEs, identified discrimination, and, in the case of LBEs, the competitive disadvantage caused by the higher administrative costs of doing business in the City.
"Economically disadvantaged business" shall mean a business whose average gross annual receipts in the three fiscal years immediately preceding its application for certification as a MBE, WBE or LBE do not exceed the following limits: (1) public works/construction; specialty construction contractors; (2) goods/materials/equipment and general services suppliers; (3) professional services and architect/engineering; (4) trucking; and (5) telecommunicationsAny business under common ownership, in whole or in part, with any other business(es) shall be considered an "economically disadvantaged business" only if the aggregate gross annual receipts of all the businesses under such common ownership do not exceed the limits specified in this section. All businesses owned by married spouses or domestic partners shall be considered under common ownership unless the businesses are in unrelated industries and no community property or other jointly owned assets were used to establish or are used to operate either business.
"Franchise" shall mean and include the right or privilege conferred by grant from the City, or any contracting agency thereof, and vested in and authorizing a person to conduct such business or engage in such activity as is specified in the grant. A "franchise" shall not include an agreement to perform construction-related services.
"General services contract" shall mean an agreement for those services that are not professional services. Examples of "General Services" include: janitorial, security guard, pest control, parking lot management and landscaping services.
"Good-faith efforts" when required of a contract awarding authority or department shall mean the actions undertaken by a department to obtain MBE or WBE participation in a contract as prime contractors, and shall include the following efforts: (1) encouraging MBE/WBEs to attend prebid meetings scheduled by a department or the Commission to inform potential contractors of contracting opportunities; (2) advertising in general circulation media, trade association publications and minority/woman business focused media and posting the contacting opportunity on the Office of Contract Administration's website pursuant to Section 12.D.A.9(A)6; (3) notifying MBE/WBEs that are available to perform the work contemplated in a contract and soliciting their interest in the contract; (4) dividing the contract work into economically feasible units to facilitate MBE/WBE participation in the contract; (5) pursuing solicitations of interest by contacting MBE/WBEs to determine whether these businesses are interested in participating on the contract; (6) providing MBE/WBEs with adequate information about the plan, specifications and requirements of the contract; (7) where applicable, negotiating with MBE/WBEs in good faith and demonstrating that MBE/WBEs were not rejected as unqualified without sound reasons based on a thorough investigation of their capabilities; and (8) using the services of available community and contractors' groups, local, State or federal minority and woman business assistance offices that provide assistance in the recruitment of MBE/WBEs for public sector contracts.
"Good-faith efforts" when required of a prime city contractor shall mean the steps undertaken to comply with the goals and requirements imposed by the City for participation by MBE/WBEs as subcontractors, and shall include the following:
(1) Attending any presolicitation or prebid meetings scheduled by the City to inform all bidders of MBE/WBE program requirements for the project for which the contract will be awarded;
(2) Identifying and selecting specific items of the project for which the contract will be awarded to be performed by MBE/WBEs to provide an opportunity for participation by those enterprises;
(3) Advertising for MBEs or WBEs that are interested in participating in the project, not less than 10 calendar days before the date the bids can first be submitted, in one or more daily or weekly newspapers, trade association publications, minority or trade-oriented publications, trade journals, or other media, specified by the City. This paragraph applies only if the City gave public notice of the project not less than 15 calendar days prior to the date the bids can first be submitted;
(4) Providing, not less than 10 calendar days prior to the date on which bids can first be submitted, written notice of his or her interest in bidding on the contract to the number of MBEs or WBEs required to be notified by the project specifications. The City shall make available to the bidder not less than 15 calendar days prior to the date the bids are opened a list or a source of lists of enterprises that are certified by the Director as MBE/WBEs;
(5) Following up initial solicitations of interest by contacting potential MBE/WBE subcontractors to determine with certainty whether those enterprises were interested in performing specific items of the project;
(6) Providing interested MBE/WBEs with information about the plans, specifications, and requirements for the selected subcontracting or material supply work;
(7) Requesting assistance from minority and women community organizations; minority and women contractor or professional groups; local, State or federal minority and women business assistance offices; or other organizations that provide assistance in the recruitment and placement of minority or women business enterprises, if any are available;
(8) Negotiating in good faith with interested MBEs or WBEs, and not unjustifiably rejecting as unsatisfactory bids or proposals prepared by any MBEs or WBEs, as determined by the City;
(9) Where applicable, advising and making efforts to assist interested MBE/WBEs in obtaining bonds, lines of credit, or insurance required by the City or contractor;
(10) Making efforts to obtain MBE/WBE participation that the City could reasonably expect would produce a level of participation sufficient to meet the City's goals and requirements.
"Human Rights Commission (HRC)" shall mean the Human Rights Commission of San Francisco, hereinafter referred to as the "Commission."
"Joint venture" shall mean an association of two or more businesses acting as a contractor and performing or providing services on a contract, in which each joint venture partner combines property, capital, efforts, skill, and/or knowledge and each joint venture partner shares in the ownership, control, management responsibilities, risks and profits of the joint venture in proportion to its claimed level of participation.
"Lease" shall mean and include an agreement by which the City or any contracting agency thereof, grants to a person the temporary possession and use of property for consideration.
"Local business" or "Local business enterprise (LBE)" shall mean an economically disadvantaged business that is an independent and continuing business for profit, performs a commercially useful function and is a firm that:
(1) Has fixed offices or distribution points located within the geographical boundaries of the City where a commercially useful function is performed. Businesses that supply commodities must continuously maintain warehouses stocked with inventory within the geographical boundaries of the City. Truckers must park their registered vehicles and trailers within the geographical boundaries of the City. Post office box numbers or residential addresses shall not suffice to establish status as a "Local Business";
(2) Is listed in the Permits and License Tax Paid File with a San Francisco business street address; and
(3) Possesses a current Business Tax Registration Certificate at the time of the application for certification as a local business;
(4) Has been located and doing business in the City for at least six months preceding its application for certification as a local business; and
(5) Is certified as an LBE pursuant to Section 12D.A.6(B)(1).
No business that is owned in part or in whole by a full time City employee or City officer shall be considered a "local business" or "local business enterprise (LBE)" within the meaning of this ordinance.
"Lower-tier subcontracting" shall mean any agreement or other arrangement between a sub-contractor and a person as defined herein where it is agreed that said person shall to perform any term, condition or obligation imposed by the subcontract upon the subcontractor.
"Minority," "minorities," or "minority person" shall mean members of one or more of the following ethnic groups:
African Americans: (defined as persons whose ancestry is from any of the Black racial groups of Africa or the Caribbean);
Arab Americans: (defined as persons whose ancestry is from an Arabic speaking country that is a current or former member of the League of Arab States);
Asian Americans (defined as persons with Chinese, Japanese, Korean, Pacific Islander, Samoan, Filipino, Asian Indian, and Southeast Asian ancestry);
Iranian Americans (defined as persons whose ancestry is from the country of Iran);
Latino Americans (defined as persons with Mexican, Puerto Rican, Cuban, Central American or South American ancestry. Persons with European Spanish ancestry are not included as Latino Americans); and
Native Americans (defined as any person whose ancestry is from any of the original peoples of North America, and who maintains cultural identification through tribal affiliation or community recognition.
"Minority business enterprise (MBE)" shall mean an economically disadvantaged local business that is an independent and continuing business for profit, performs a commercially useful function, is owned and controlled by one or more minority persons residing in the United States or its territories and is certified as an MBE pursuant to Section 12D.A.6(B).
"Office" or "offices" shall mean a fixed and established place where work is performed of a clerical, administrative, professional or production nature directly pertinent to the business being certified. A temporary location or movable property or one that was established to oversee a project such as a construction project office does not qualify as an "office" under the ordinance. Work space provided in exchange for services (in lieu of monetary rent) does not constitute an "office." The office is not required to be the headquarters for the business but it must be capable of providing all the services to operate the business for which LBE certification is sought.
"Owned," for purposes of determining whether a business is a MBE or WBE shall mean that minorities or women, as the context requires:
(1) Possess an ownership interest of at least 51 percent of the business;
(2) Possess incidents of ownership, such as an interest in profit and loss, equal to at least the required ownership interest percentage; and
(3) Contribute capital, equipment to the business equal to at least the required ownership percentage. Promissory notes are not sufficient to constitute capital contributions.
(4) Contribute expertise relevant to the business' essential functions at least equivalent to the ownership interest.
For an individual seeking MBE or WBE certification, ownership shall be measured as though the applicant's ownership were not subject to the community property interest of a spouse, if both spouses certify that (a) only the woman or minority spouse participates in the management of the business and the nonparticipating spouse relinquishes control over his/her community property interest in the subject business or (b) both spouses have bona fide management and control of the business.
"Participation commitment" shall mean the targeted level of MBE/WBE subcontractor participation that each prime city contractor has designated in its bid.
"Participation goals" shall mean the targeted levels of City-wide MBE/WBE participation in City prime contracts that reflect the relevant share of MBEs or WBEs in a given industry or profession referred to as "percent availability" in the utilization indices contained on file with the Clerk of this Board in File No. 98-0612.
"Percent availability" shall mean the relevant share of MBEs or WBEs in a given industry or profession.
"Person" includes one or more individuals, partnerships, associations, organizations, trade or professional associations, corporations, cooperatives, legal representatives, trustees, trustees in bankruptcy, receivers, or any group of persons, including any official, agent or employee of the City.
"Professional services contract" shall mean an agreement for services which require extended analysis, the exercise of discretion and independent judgment in their performance, and/or the application of an advanced, specialized type of knowledge, expertise, or training customarily acquired either by a prolonged course of study or equivalent experience in the field. Examples of professional service providers include licensed professionals such as accountants, and non-licensed professionals such as software developers and financial and other consultants, except that services of architects, engineers, and other outside temporary professional design, consultant or construction management services for a public work project shall be considered architect/engineering contracts and shall not be considered professional services contracts for the purpose of this Ordinance.
"Public works/construction contract" shall mean an agreement for the erection, construction, renovation, alteration, improvement, demolition, excavation, installation, or repair of any public building, structure, infrastructure, bridge, road, street, park, dam, tunnel, utility or similar public facility performed by or for the City and County of San Francisco, the cost of which is to be paid wholly or partially out of moneys deposited in the treasury of the City and County.
"Services" shall mean Professional Services and General Services.
"Subcontractor" shall mean any business providing goods or services to a contractor for profit, if such goods or services are procured or used in fulfillment of the contractor's obligations arising from a contract with the City.
"Subcontractor participation goals" shall mean the targeted level of MBE/WBE subcontractor participation designated by the Director for prime city contracts.
"Woman business enterprise (WBE)" shall mean an economically disadvantaged local business that is an independent and continuing business for profit, performs a commercially useful function, is owned and controlled by one or more women residing in the United States or its territories and is certified as a WBE pursuant to Section 12D.A.6(B).
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 210-99, File No. 990266, App. 7/30/99; Ord. 283-99, File No. 991326, App. 11/5/99; Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) In addition to the duties and powers given to the Human Rights Commission elsewhere, the Commission shall:
1. Collect, analyze and periodically report to this Board relevant data that will assist this Board in determining whether (a) the scope of this ordinance in terms of race- or gender-conscious remedies shall be expanded to include new contract areas or minority groups and (b) whether the scope of this ordinance should be limited because the City has met its obligation to adopt and to implement necessary measures to remedy both its active discrimination and its passive perpetuation of private discrimination;
2. Levy the same sanctions that a contracting awarding authority may levy as specified in Section 12D.A.9(A)(7);
3. When necessary, subpoena persons and records, books and documents for a proceeding of the Commission or an investigation by the Director or an audit pursuant to Section 12D.A.6(E) conducted to further the purposes of this ordinance;
4. Adopt rules and regulations establishing standards and procedures for effectively carrying out this ordinance. Among other things, the rules and regulations shall provide for administrative procedures that will allow a business to prove and the Commission to recommend to this Board that the ordinance's remedial measures should not be applied to an industry or profession because MBE/WBE participation in City prime contracts has reached parity with MBE/WBE participation in the relevant business community and that MBE/WBEs no longer suffer from a discrimination-induced competitive disadvantage in the applicable industry or profession. The regulations shall also provide a mechanism for contractors to seek a determination by the Director that a MBE or WBE may not be granted a race- or gender-conscious bid discount where it is demonstrated that the MBE's or WBE's bid price is not attributable to the effects of past discrimination;
5. Issue forms for the Controller or contract awarding departments to collect information from contractors as prescribed by this ordinance;
6. Hear appeals challenging: (i) the Director's disqualification of a bidder or Contractor as specified in Section 12D.A.16(b), (ii) the Director's denial of an application for or revocation of the certification of a business as an MBE, WBE, or LBE, as specified in Section 12D.A.6(B)(2), or (iii) the Director's denial of a request to waive or to reduce subcontractor participation goals as specified in Section 12D.A.17(H);
7. By regulation require contract awarding authorities, departments and the Controller to provide to the Director such information as will be necessary to enable the Director to keep a database from which discrimination can be identified, to report to the Mayor and the Board of Supervisors at the end of each fiscal year on the progress each City department has made towards the achievement of MBE and WBE participation goals and to perform his/her other duties. The database is a public record available to the public as provided by state and local law;
8. Adopt rules and regulations as deemed necessary by the Director to ensure that the joint venture bid/ratings discount is applied only to joint ventures where the MBE, WBE or LBE has sufficient skill, experience, and financial capacity to perform the portion of the work identified for the MBE, WBE or LBE.
9. Consistent with the provisions of the ordinance make such other rules and regulations as are necessary to guide its implementation.
(B) In addition to the duties and powers given to the Director elsewhere, the Director shall have the following duties and powers:
1. Through appropriately promulgated procedures, the Director shall certify businesses as bona fide MBEs/WBEs/LBEs. These procedures shall provide that any business seeking certification as an LBE shall meet the definition of an LBE and possess or establish all of the following: (1) business cards for the San Francisco office; (2) business stationery for the San Francisco office; (3) a written agreement for occupancy of a San Francisco office including documentation of payment of monetary rent (receipts and copies of cancelled checks); (4) a listing of the business in an appropriate business buyers guide such as a telephone yellow pages listing San Francisco based businesses; (5) a San Francisco office in which business is transacted that is appropriately equipped for the type of business for which the enterprise seeks certification as an LBE; (6) a conspicuously displayed business sign at the San Francisco business premises except where the business operates out of a residence; and (7) licenses issued to the business owner appropriate for the type of business for which the enterprise seeks certification;
2. Except where the Director cannot certify a business because the business has not been established in San Francisco for the requisite six months, whenever the Director denies an application for or revokes the certification of a business as a MBE, WBE, LBE because the business is not eligible to be certified as a bona fide MBE, WBE, LBE, the Director shall, within three working days of his/her decision, notify the aggrieved business in writing of the basis for revocation or denial of certification and the date on which the business will be eligible to reapply for certification. The notice shall be transmitted to the business via certified mail or via facsimile. The Director shall require a business to wait at least six months but not more than two years after the denial or revocation before reapplying to the Director for certification as a MBE, WBE or LBE. The Director shall provide any business whose certification is revoked an opportunity to be heard within three business days of the revocation. A business may appeal the Director's denial or revocation of certification of a business as an MBE, WBE, or LBE to the Commission. The appeal must be filed with the Commission within three business days following receipt of the Director's decision. Notice by the Director to the business of denial or revocation of certification as an MBE, WBE or LBE shall apprise the business of its right to appeal the decision;
3. The Director shall have the ultimate responsibility for ensuring that the necessary data is collected and analyzed. Annually, and more often if the Director deems necessary, the Director shall analyze the most recently available data of MBEs and WBEs in the various industries and professions doing business with the City. Applying statistically sound methods of analysis and considering other evidence of discrimination, the Director shall identify areas of contracting where the City or any of its departments (a) is failing to meet the participation goals to such an extent that an inference of discrimination can be made, or (b) is otherwise discriminating in its contracts. In addition, the Director shall identify areas of contracting where the City is meeting and/or exceeding participation goal to such an extent that the MBE or WBE bid discounts can no longer be justified. The results of this study shall be included in the Commission's annual report required by Section 12D.A.18(B);
4. Not later than July 1st of each fiscal year, the Director shall transmit to this Board proposed amendments to this ordinance that the Director deems necessary to ensure that the ordinance provides adequate remedies for identified discrimination while going no further than necessary to remedy the identified discrimination;
5. The Director shall work with the Controller and City departments to implement a City-wide prompt-payment policy requiring that MBEs, WBEs and LBEs be paid by the City, within 30 days after the date on which the City receives an invoice from an MBE, WBE or LBE for work performed for the City;
6. The Director shall provide information and other assistance to MBEs and WBEs to increase their ability to compete effectively for the award of City contracts;
7. The Director shall assist the City to increase participation by MBEs and WBEs in City contracts;
8. The Director shall continue to develop and to strengthen education and training programs for MBEs and WBEs and City contract awarding personnel;
(C) The requirements of this ordinance are in addition to those imposed by the United States or the State of California as a condition of financial assistance or otherwise. In contracts which involve the use of any funds furnished, given or loaned by the government of the United States or the State of California, all laws, rules and regulations of the government of the United States or the State of California or of any of its departments relative to the performance of such work and the conditions under which the work is to be performed, shall prevail over the requirements of this ordinance when such laws, rules or regulations are in conflict. In addition, the Director may authorize the substitution of such State or federal minority business enterprise and women business enterprise requirements for the requirements of this ordinance whenever such State or federal requirements are substantially the same as those of this ordinance.
(D) The Director, with the approval of the Commission, may enter into cooperative agreements with agencies, public and private, concerned with increasing the use of MBEs and WBEs in government contracting, subject to the approval of this Board.
(E) The Director, in cooperation with the Controller, shall randomly audit at least three prime contractors each fiscal year in order to insure their compliance with the provisions of this ordinance. The Director, in cooperation with the Controller, shall furthermore randomly audit 10 percent of the joint ventures granted bid discounts in each fiscal year. The Controller shall have the right to audit the books and records of the contractors, joint venture participants, and any and all subcontractors to insure compliance with the provisions of this ordinance.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) In addition to the duties given to the Controller elsewhere, the Controller shall work cooperatively with the Director to provide such contractual encumbrance and payment data as the Director advises are necessary to form the basis of the Commission's report to the Mayor, this Board and the public on the participation of MBEs and WBEs in City prime contracts. If any department refuses or fails to provide the required data to the Controller, the Controller shall immediately notify the Mayor, this Board and the Director.
(B) The Controller shall not certify the award of any contract subject to this ordinance where the Director has notified the Controller that the contract awarding authority has not provided the information the Director advises is necessary under this ordinance.
(C) Each request for payment to a City contractor submitted to the contract awarding authority shall be accompanied by a subcontractor participation form approved by the Commission. That form shall contain information that the Commission has determined is necessary to enable the Commission and the Director (1) to monitor compliance by City departments and their prime contractors with their obligations under this ordinance (2) to determine whether City departments are achieving their prime and subcontracting goals under this ordinance, (3) to determine whether to recommend changes in this ordinance to ensure that the ordinance continues to serve as a remedy for discrimination in contracting while going no further than necessary to remedy that discrimination, and (4) to make such other reports and analyses as are required by this ordinance.
In the event that a request for payment fails to include the information required pursuant to this Section, the contract awarding authority shall, within two working days, notify the Director and the affected prime contractor[s] of the failure and afford each affected prime contractor an opportunity to be heard promptly. That notice shall inform the contractor that the contract awarding authority has tentatively determined that the information has not been provided, what information is missing and that if this failure is substantiated, then the Controller will be notified to withhold 20 percent of the payment until the information is provided. If the Controller finds, after consultation with the Director and the notice and opportunity to be heard, that the information has not been provided, the Controller shall withhold 20 percent of the payment otherwise due until the information is provided.
(D) It is the City's policy that MBEs, WBEs and LBEs should 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. The Controller shall work with the Director and representatives of City departments to implement this City-wide prompt-payment policy.
(E) The contract awarding authority shall require all prime contractors to submit, within 10 days following payment to the prime contractor of moneys owed for work completed on a project, an affidavit under penalty of perjury, that all subcontractors on the project or job have been paid and the amounts of each of those payments. The name, telephone number and business address of every subcontractor shall be listed on the affidavit. If a prime contractor fails to submit this affidavit, the contract awarding authority shall notify the Director who shall take appropriate action as authorized under Section 12D.A.16(B) and (F).
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 134-03, File No. 030347, App. 6/1/2003)
In addition to the duties given to the Mayor elsewhere, the Mayor shall:
1. By July 1st of each fiscal year, 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 this Board 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.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) Contract awarding authorities shall:
1. Use good-faith efforts for all contracts subject to the bid/ratings discount provisions of this ordinance to solicit and to obtain quotes, bids or proposals from MBEs and WBEs on all solicitations, or document their unavailability;
2. Unless otherwise indicated in this ordinance, extend a discount in all bids, proposals and contracts and in the composition of rating scales as follows: (1) a five percent discount to (i) an LBE or (ii) a joint venture with MBE or WBE participation that equals or exceeds 35 percent but is under 40 percent; or (iii) where a joint venture is composed of only LBEs with no MBE or WBE participation or where the MBE or WBE participation is less than 35 percent; (2) a seven and one-half percent bid discount to a joint venture with MBE or WBE participation that equals or exceeds 40 percent; (3) a 10 percent discount to (i) an MBE or WBE or (ii) a joint venture between or among MBEs or/and WBEs.
The contracting awarding authority shall apply the aforementioned appropriate bid/ratings discount only to a joint venture (1) that meets the requirements of Section 12D.A.6(A)7 and (2) 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 proportionately in the ownership, control, management responsibilities, risks, and profits of the joint venture. The portion of the MBE or WBE joint venture'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 venture'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 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; and (2) any professional services contract estimated to cost more than $100,000. 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 in accordance with the most current version of the City's "Contract Insurance Manual" or as otherwise authorized by the City Risk Manager, Department of Administrative Services;
5. Use the City's Surety Bonding Program set forth in Administrative Code Section 12D.A.10 to assist MBEs, WBEs and LBEs bidding on and performing City pubic works contracts to meet bonding requirements and/or obtain construction loans;
6. Submit to the Office of Contract Administration (OCA) in electronic format or a format specified by the all bid opportunities, requests for proposals and Solicitations for which published notice or advertising is required, no later than 10 calendar days prior to the announcement of the bid opportunity, request for proposal or Solicitation. A contract awarding authority must obtain a waiver from its commission, or in the case of a department that has no commission, from the Board of Supervisors, if it cannot meet the requirements of this Section 12D.A.9(A)6. The OCA shall cause to be posted upon a website the following information concerning current bids, requests for proposals and Solicitations: the title and number; the name of the contract awarding authority; and the name and telephone number of the person to be contacted for further information. Such information shall be posted with sufficient lead time to provide adequate notice and opportunity to potential City contractors and vendors to participate in the bid opportunity, request for proposals or Solicitation, but in no event less than 10 calendar days prior to the due date for such bid opportunity, request for proposals or Solicitation;
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) Refuse to award a contract,
(b) Order the suspension of a contract,
(c) Order the withholding of funds,
(d) Order the revision of a contract based upon a material breach of contract provisions pertaining to MBE or WBE participation,
(e) Disqualify 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, based on the standards set forth in this ordinance and rules and regulations promulgated by the Commission. Any business disqualified under this subsection shall have a right to review and reconsideration by the Commission after two years upon a showing of corrective action indicating that violations are not likely to recur;
8. Not award any contract to a person or business that is disqualified from doing business with the City under the provisions of this ordinance;
9. Designate a staff person to be responsible for responding to the Director and Commission regarding the requirements of this ordinance;
10. Maintain accurate records as required by the Director and the Commission 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 contractor to solicit bids from and award subcontracts to MBEs and WBEs and LBEs;
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 amendments, modifications, supplements and change orders that cumulatively result in an increase or decrease of the contract's dollar amount of more than 10 percent. Such notice shall be provided within 10 days of each such contract modification;
14. Whenever contract amendments, modifications, supplements or change orders cumulatively increase the total dollar value of a contract by more than 10 percent, the contract awarding authority shall require compliance with those MBE and WBE provisions of this ordinance that applied to the original contract;
15. All contract amendments, modifications, supplements or change orders that cumulatively increase by more than 20 percent the total dollar value of all contracts originally valued at $50,000 or more shall be subject to prior approval of the Director, who shall review the proposed amendment, modification, supplement or change order to correct contracting practices that exclude women or minorities from new contracting opportunities.
(B) Contract awarding authorities or departments may invite, encourage or request businesses to joint venture on any contract to promote MBE or WBE participation.
(C) For the purpose of determining MBE and WBE participation, contracts awarded to joint ventures in which one or more MBEs or WBEs are combined with one or more businesses that are not MBEs or WBEs shall be deemed by the contract awarding authority to be awarded to MBEs or WBEs only to the extent of the MBEs or WBEs participation in the joint venture. MBE and/or WBE participation in the supply of goods shall be included in determining MBE and/or WBE participation in a joint venture if the goods are supplied in accordance with established general industry practice.
(D) Contract awarding authorities shall ensure that all contracts subject to this ordinance include the following requirements, in addition to such other requirements as may be set forth elsewhere:
1. Each bidder, proposer and contractor shall be required to sign an affidavit, declaring under penalty of perjury, attesting to its intention to comply fully with the provisions of this ordinance and attesting to the truth and accuracy of all information provided regarding such compliance;
2. Each contract 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 that wilfully fails to comply with any of the provisions of this ordinances, rules and regulations implementing the ordinance or contract provisions pertaining to MBE or WBE participationbidder, 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, 10 percent of the total amount of the contract or $1,000, whichever is greatest, as determined by the Director pursuant to Section 12D.A.16(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 all contractors to maintain records, including such information requested by the Director or Commission, necessary for monitoring their compliance with this ordinance and shall require prime contractors to include in any subcontract with an MBE or WBE a provision requiring the subcontractor to maintain the same records;
5. Contracts shall require prime contractors, during the term of the contract, to fulfill the MBE and WBE participation commitments submitted with their bids;
6. Contracts shall require prime contractors to include in any subcontract with an MBE or WBE a provision requiring the prime contractor to compensate any MBE or WBE subcontractor for damages for breach of contract or liquidated damages equal to 5% of the subcontract amount, whichever is greater, if the prime contractor fails to comply with its commitment to use MBE and WBE subcontractors as specified in the bid/proposal unless the Commission and the contract awarding authority both give advance approval to the prime contractor to substitute subcontractors or otherwise modify the commitments in the bid/proposal documents. Contracts shall also require prime contractors to compensate any MBE or WBE subcontractor for breach of contract or liquidated damages equal to 5% of the subcontract amount, whichever is greater, if the prime contractor does not fulfill its commitment to use the MBE or WBE subcontractor as specified in the bid/proposal unless the Commission and the contract awarding authority both give advance approval to the prime contractor to substitute subcontractors or otherwise modify the commitments in the bid/proposal documents. This provision shall also state that it is enforceable in a court of competent jurisdiction;
7. Contracts shall require prime contractors, whenever amendments, modifications, supplements, or change orders cumulatively increase the total dollar value of a construction contract by more than 10 percent, to comply with those MBE and WBE provisions of this ordinance that applied to the original contract with respect to the amendment, modification, supplement or change order;
8. Contracts shall require prime contractors to submit to the Director for approval all contract amendments, modifications, supplements, and change orders that cumulatively increase by more than 20 percent the total dollar value of all contracts originally valued at $50,000 or more. The Director shall review the proposed amendment, modification, supplement or change order to correct any contracting practices that exclude women and minorities from new contracting opportunities;
9. Contracts in which subcontracting is used 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;
10. Contracts in which subcontracting is used shall require the prime contractor to pay its subcontractors within three working days after receiving payment from the City unless the prime contractor notifies the Director in writing within 10 working days prior to receiving payment from the City that there is a bona fide dispute between the prime contractor and the subcontractor, in which case the prime contractor may withhold the disputed amount but shall pay the undisputed amount. The Director may, upon making a determination that a bona fide dispute exists between the prime contractor and subcontractor, waive this three day payment requirement. In making the determination as to whether a bona fide dispute exists, the Director shall not consider the merits of the dispute. Contracts in which subcontracting is used shall also require the contractor/consultant, within 10 working days following receipt of payment from the City, to file an affidavit, under penalty of perjury, that he or she has paid all subcontractors. The affidavit shall provide the names and address of all subcontractors and the amount paid to each;
11. Contracts shall require contractors and subcontractors to maintain records necessary for monitoring their compliance with this ordinance for three years following completion of the project and shall permit the Commission and Controller to inspect and audit such records.
(E) All contracts or other agreements between the City and persons or entities, public or private, in which 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.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 174-00, File No. 001105, App. 7/14/2000; Ord. 189-02, File No. 021095, App. 9/27/2002; Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) In addition to the general findings set forth in Section 12D.A 2, and based upon the record before this Board, the Board hereby finds that the evidence before the Board relating to the award of prime public works contracts for fiscal years 1992-93, 1993-94, 1994-95, 1996-97, 1997-98 and 1998-2003 reflects that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for City prime public works contracts. Further, the Board finds that race-neutral measures employed by the City have not prevented such discrimination against MBEs and WBEs from occurring.
(B) Contract awarding authorities shall apply bid discounts as enumerated in Section 12D.A.9(A) to all public work contracts the estimated cost of which exceeds $10,000.
(C) Bonding and Financial Assistance Program.
1. Program Description. The City and County of San Francisco, acting through its Human Rights Commission ("HRC"), intends to provide guarantees to private bonding companies and financial institutions in order to induce those entities to provide required bonding and financing to eligible contractors and subcontractors bidding on and performing City public work contracts. This bonding and financial assistance program is subject to the provisions of this Subsection 12D.A.10(C).
3. Eligible Businesses. Businesses must meet the following criteria to qualify for assistance under this Subsection 12D.A.10(C):
(a) The business may be either a prime contractor or subcontractor; and
(b) The business must be certified by the HRC as a Minority Business Enterprise ("MBE"), Woman Business Enterprise ("WBE") or Local Business Enterprise ("LBE") according to the requirements of San Francisco Administrative Code Chapter 12D.A;
(c) The business may be required to participate in a "bonding assistance training program" as offered by the HRC, which is anticipated to provide the following:
(i) Bond application assistance,
(ii) Assistance in developing financial statements,
(iii) Assistance in development of a pre-bond surety profile,
(iv) Identification of internal financial control systems,
(v) Development of accurate financial reporting tools, and
4. Agreements Executed by the Human Rights Commission. The HRC is hereby authorized to enter into the following agreements in order to implement the bonding and financial assistance program described in this Subsection 12D.A.10(C):
(a) With respect to a surety bond, the agreement to guaranty up to 40 percent of the face amount of the bond or $750,000, whichever is less;
(b) With respect to a construction loan to be made to a contractor or subcontractor, an agreement to guaranty up to 50 percent of the original principal amount of the construction loan or 50 percent of the actual loss suffered by the financial institution as a result of a loan default, whichever is less; provided that in any event the City's obligations with respect to a guaranty shall not exceed $750,000;
(c) Any other documents deemed necessary by the HRC to carry out the objectives of this program, provided that such documents shall be subject to review and approval by the City Attorney's Office.
5. Monitoring and Enforcement. The HRC shall maintain records on the use and effectiveness of this program, including but not limited to (1) the identities of the businesses and bonding companies participating in this program, (2) the types and dollar amounts of public work contracts for which the program is utilized, and (3) the types and dollar amounts of losses which the City is required to fund under this program. The HRC shall submit written reports to the Board of Supervisors every six months beginning January 1, 2001, advising the Board of the status of this program and its funding capacity, and an analysis of whether this program is proving to be useful and needed.
6. Funding and Accounts. As of July 1, 2001, funding for this program may be derived from the following sources:
(a) The Board of Supervisors has appropriated or will appropriate funds for the operation of this program.
(b) Each Department authorized to contract for public works or improvements pursuant to San Francisco Administrative Code Chapter 6 shall commit to this program up to ten percent (10%), but not less than one percent (1%), of the budget for every public work or improvement undertaken. (A "public work or improvement" is defined in San Francisco Administrative Code Chapter 6.) This subsection is effective for those public works or improvements where the award of the construction contract (as defined and regulated by Administrative Code Chapter 6) occurs after July 1, 2001.
(c) The Treasurer of the City and County of San Francisco is hereby authorized to negotiate a line(s) of credit or any credit enhancement program(s) or financial products(s) with a financial institution(s) to provide funding; the program's guaranty pool may serve as collateral for any such line of credit.
In the event the City desires to provide credit enhancement under this Subsection for a period in excess of one fiscal year, the full aggregate amount of the City's obligations under such credit enhancement must be placed in a segregated account encumbered solely by the City's obligations under such credit enhancement.
7. Term of Bonding Assistance Program. The HRC is authorized to enter into the agreements described in this Subsection for a period ending on the earlier of (1) June 30, 2008 or (2) the date on which the Controller is no longer able to certify the availability of funds for any new guarantee agreement.
8. Default on Guarantees. The Human Rights Commission shall decertify any contractor that defaults on a loan or bond for which the City has provided a guarantee on the contractor's behalf. However, the Human Rights Commission may in its sole discretion refrain from such decertification upon a finding that the City has contributed to such default.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 174-00, File No. 001105, App. 7/14/2000; Ord. 255-00, File No. 001353, App. 11/3/2000; Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) In addition to the general findings set forth in Section 12D.A.2, and based upon the record before this Board, the Board finds that the evidence before the Board relating to the award of prime contracts for commodities and general services for fiscal years 1992-93, 1993-94, 1994-95, 1996-97, 1997-98 and 1998-2003 reflects that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for such contracts. The Board further finds that race-neutral measures employed by the City have not prevented such discriminatory practices from occurring.
(B) Contract awarding authorities shall apply all bid discounts as enumerated in Section 12D.A.9(A) to all commodities contracts the estimated cost of which exceeds $2,500 and general services contracts the estimated cost of which exceeds $10,000.
(C) In addition to the duties given the Office of Contract Administration elsewhere in this Section, the Office of Contract Administration shall maintain, with the assistance of the Director, a current list of MBEs and WBEs to provide each of those commodities or services subject to this ordinance that the Office of Contract Administration indicates are required by the City.
(D) The Office of Contract Administration shall also maintain a central office where all bids, requests for proposals and solicitations will be listed and kept current.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 134-03, File No. 030347, App. 6/1/2003)
(A) In addition to the general findings set forth in Section 12D.A.2, and based upon the record before this Board, the Board hereby finds that the evidence before this Board relating to the award of prime architect/engineering contracts for fiscal years 1992-93, 1993-94, 1994-95, 1996-97, 1997-98 and 1998-2003 reflects that MBEs and WBEs continue to be disadvantaged by discriminatory practices when competing for City prime architect/engineering contracts. The Board further finds that race-neutral measures employed by the City have not prevented these discriminatory practices from occurring.
(B) Contract awarding authorities and architect/engineering selection panels shall apply all bid/rating discounts as enumerated in Section 12D.A.9(A) to all bids and proposals for architect/engineering contracts, the estimated cost of which exceeds $10,000. Where Architect/Engineering contracts are formally bid, all consultants selection panels and awarding officers shall apply the bid/rating discounts to each stage of the selection process, e.g., qualifications, proposals and interviews. Minorities and women shall be included on consultant selection panels.
(C) The Director is empowered to take actions to ensure compliance with the provisions of this ordinance, including, without limitation, intervening in the selection process, by modifying the criteria used for selecting selection panelists or prime architect/engineering contractors to correct any contracting practices that hinder equal business opportunities for MBEs and WBEs.
(Added by Ord. 296-98, App. 10/5/98; amended by Ord. 134-03, File No. 030347, App. 6/1/2003)
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