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(A) Quarterly Reports by CMD. By July 1, October 1, January 1, and April 1 of each fiscal year, CMD shall issue quarterly written reports for the prior fiscal quarter to the Mayor and the Board of Supervisors. The report shall document:
(1) Each Contract Awarding Authority's progress toward achieving the goals of this Chapter, including, among other things, each Contract Awarding Authority's progress in meeting the City-wide LBE Participation Goal, individual Contract LBE participation requirements, and ensuring non-discrimination against MBEs, WBEs and OBEs. The report shall also document the level of participation of all categories of LBEs, and whether or not each Contracting Awarding Authority has fully reported all data required by this Chapter or requested by CMD, the City Administrator, or the Controller.
(a) Whenever CMD's report concludes that a Contract Awarding Authority has intentionally disregarded or negligently performed any obligation imposed by this Chapter, finds consistent non-compliance with this Chapter by a Contract Awarding Authority's Prime Contractors, or concludes that a Contract Awarding Authority failed to provide any data required by this Chapter or requested by CMD, the City Administrator, or the Controller, a member of the Board may schedule before the appropriate Committee of the Board a hearing on that report. At the hearing, the Department heads must be prepared to respond to the Director's finding of intentional disregard and/or negligent performance and to explain what steps they intend to take to forestall repetition of the problems identified in CMD's report.
(B) Annual Report by City Departments. As part of their annual report to the Board of Supervisors, City departments shall report:
(1) On their progress toward achievement of the City-wide LBE Participation Goal and Contract-specific LBE subcontracting participating requirements and steps to ensure non-discrimination against MBEs, WBEs, and OBEs in the preceding year; and
(2) On their compliance with the Micro-LBE Set Aside Program in accordance with Section 14B.7(K)(3).
(C) Annual Report by the City Administrator. By July 1st of each fiscal year, the City Administrator shall submit an annual report to the Mayor and Board of Supervisors on the progress of the City toward achieving the goals of this Chapter, together with an identification of problems and specific recommendations for improving participation by all categories of LBEs in City contracting. The report shall include an analysis of the availability of MBEs, WBEs, and OBEs and the bidding environment in the various industries that participate in City contracts.
(D) Board of Supervisors Public Hearing. Each year, after receiving CMD's quarterly reports and the annual reports of CMD and City departments, the Board may hold a hearing to review the City's performance under this Chapter, the administration of this Chapter by CMD, and the progress of City departments towards achieving the purposes of this Chapter, and other subjects pertaining to the Chapter.
(A) San Francisco Bonding and Financial Assistance Program.
(1) Program Description. The City and County of San Francisco, acting through the City Administrator, or, in the City Administrator’s discretion, as delegated to the Risk Manager, 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 Works/Construction Contracts, and, upon the approval of the Risk Manager and provided that funds are available, projects subject to development agreements or other agreements for construction of facilities where the City and County of San Francisco is partially or wholly funding the project. This bonding and financial assistance program is subject to the provisions of this Section 14B.16(A).
(2) Eligible Contracts. The assistance described in this Section 14B.16(A) shall be available for any City Public Works/Construction Contract to which this Chapter 14B applies.
(3) Eligible Businesses. Businesses must meet the following criteria to qualify for assistance under this Section 14B.16(A).
(a) The business may be either a prime Contractor or Subcontractor; and
(c) The business may be required to participate in a “bonding assistance training program” as offered by the Risk Manager, 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, and
(v) Development of accurate financial reporting tools.
(4) Agreements Executed by the Risk Manager. The Risk Manager is hereby authorized to enter into the following agreements in order to implement the bonding and financial assistance program described in this Section 14B.16(A):
(a) With respect to a surety bond, the agreement to guaranty up to 40% 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% of the original principal amount of the construction loan or 50% 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 $1,000,000;
(c) Any other documents deemed necessary by the Risk Manager 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 Risk Manager 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 Risk Manager shall submit written reports to the Board of Supervisors every six months beginning January 1, 2015, 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) Contributions to the San Francisco Self-Insurance Surety Bond Fund. Subject to the budgetary and fiscal provisions of the Charter, each department that conducts public works or improvements under Chapter 6 of the Administrative Code shall contribute annually to the San Francisco Self-Insurance Surety Bond Fund (“the Fund”) an amount that is set by multiplying the annual contribution rate set pursuant to Administrative Code Section 10.100-317(c) times its total appropriations for capital construction and improvement.
(7) Annual Certification of Funds. The Risk Manager shall seek annual certification of funds from the Self Insurance Bond Fund and approval as to form of such certification from the Controller and City Attorney. Such certification shall be monitored by the Risk Manager to ensure the program operates within the transactional bounds of the Self Insurance Bond Fund and the appropriated budget for its administration. The Risk Manager will review the amount certified each fiscal year with the Controller and City Attorney, should there be a call on any bond funded through the program.
(8) Line of Credit; Credit Enhancement Program. The Risk Manager is hereby authorized to negotiate a line(s) of credit or any credit enhancement program(s) or financial product(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.
(9) Default on Guarantees. The Director 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 Director may in the Director’s sole discretion refrain from such decertification upon a finding that the City has contributed to such default.
(B) Education and Training. The City Administrator and Director shall continue to develop and strengthen existing education and training programs for LBEs and City Contract awarding personnel.
(C) Cooperative Agreements. With the approval of the Board of Supervisors, the City Administrator may enter into cooperative agreements with agencies or entities, public and private, concerned with increasing the use of LBEs in government contracting or in private developments within San Francisco.
(D) Mentor-Protégé Program.
(1) The Director shall establish a Mentor-Protégé Program (MPP) to foster partnerships between established, successful contractors and LBEs to provide training, networking, and mentoring opportunities with the goal to improve LBE MPP participants’ ability to compete effectively for City contracts. As a benefit to participating in the MPP, the Director may, pursuant to duly promulgated rules and regulations, exempt mentor Contractors from the good faith outreach requirements in Section 14B.8.
(2) Pilot Mentor-Protégé Expansion Program. The Director shall develop and implement an expansion of the Mentor-Protégé Program to better incentivize participation by prime contractors in the program. This expansion program shall apply to mentor Contractors bidding on Administrative Code Chapter 6 public works construction projects who the Director determines have meaningfully participated in the MPP for a minimum period of time not less than three months. The expansion program shall provide mentor Contractors with (i) up to a 1% Bid Discount, not to exceed $300,000, provided that the Bid Discount shall not result in an LBE losing status as the apparent low bidder or highest ranked proposer; and/or (ii) a waiver of the good faith outreach requirements in Section 14B.8. The Director shall apply the mentor benefit in consultation with the Contract Awarding Authority, and cannot combine the benefit with any other available Chapter 14B preference. This pilot program shall sunset five years from the operative date of the ordinance in Board File No. ______, which created the pilot program. Four years and six months after the start of the pilot program, the Director shall prepare a report on the efficacy of the program to the City Administrator.
(E) Reserved.
(F) City Lease and Concession Agreements. The Office of Economic and Workforce Development shall convene a working group with members including but not limited to representatives from the Real Estate Division, Port, Municipal Transportation Agency, Airport, Recreation and Park Department, and the LBE community, to investigate a local business enterprise preference program for City leases and concession agreements. The working group shall submit its program recommendations to the Mayor and Board by June 1, 2015.
(G) The City Administrator shall convene a working group to investigate whether there are barriers to participation by LBE firms in specific industries such as architecture. The working group shall report any findings to the Mayor and Board by September 1, 2015.
(H) Pilot Trucking Program. The Director shall develop and implement a set-aside utilization program for Micro-LBE certified trucking firms. This pilot program shall apply to public works projects where trade subcontractors are procured under Administrative Code subsections 6.61(c)(5) and 6.68(c). This pilot program shall sunset five years from the operative date of the Ordinance in Board File No. ______ establishing the program. Four years and six months after the start of the pilot program, the Director shall prepare a report on the efficacy of the program to the City Administrator.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 314-08, File No. 081443, App. 12/19/2008; Ord. 8-11, File No. 101006, App. 1/7/2011; Ord. 40-13
, File No. 121211, App. 3/28/2013, Eff. 4/27/2013; Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. (in part)* 7/1/2015; Ord. 203-21, File No. 210835, App. 11/12/2021, Eff. 12/13/2021, Oper. 7/1/2022)
* Editor's Note:
Section 3 of Ord. 250-14 provides, in part, that "[e]xcept for Sections 14B.16(E) and 14B.16(F) of the Administrative Code which shall become operative on the effective date, this ordinance shall become operative on July 1, 2015 . . . ."
Section 3 of Ord. 250-14 provides, in part, that "[e]xcept for Sections 14B.16(E) and 14B.16(F) of the Administrative Code which shall become operative on the effective date, this ordinance shall become operative on July 1, 2015 . . . ."
(A) The Director shall monitor the City's utilization of Small-MBEs, Micro-LBEs, MBEs, WBEs, and OBEs in City contracting. The Director shall issue Contract exit reports for any Contract with LBE subcontracting participation requirements and/or LBE participation as a Joint Venture partner. The purpose of this exit report is to verify that Contractors satisfied their LBE Subcontractor participation requirements and LBEs Joint Venture partner commitments, if applicable.
(B) Investigations. The Director shall, at his or her discretion, investigate instances of potential noncompliance with this Chapter.
Bidders, Contractors, and Subcontractors shall cooperate in all respects with such an investigation. The Director may issue a written request for information to a Bidder, Contractor, or Subcontractor that identifies the records and any other information CMD requires and impose a reasonable deadline for responding. A Bidder, Contractor, or Subcontractor that fails to respond to the Director's request for information, or otherwise fails to cooperate in the investigation, or any such party who the Director determines, after investigation, has not complied with the Chapter, shall be subject, after notice and a full and adequate opportunity to be heard, to appropriate sanctions, including but not limited to the sanctions set forth in Section 14B.17(D).
(C) Conference and Conciliation. In the Director's sole discretion, the Director may attempt to resolve noncompliance with this Chapter by any Bidder, Contractor, or Subcontractor through informal processes, including conference and conciliation.
(D) Sanctions. The City, including the Director and Contract Awarding Authorities, as appropriate, may after affording notice of the alleged noncompliance and full and adequate due process, impose any of the following sanctions on a Bidder, Contractor, or Subcontractor who fails to comply with this Chapter:
(1) Declare a Bid non-responsive;
(2) Suspend a Contract;
(3) Withhold Contract payments;
(4) Assess contractual or statutory penalties;
(5) Debar a Bidder under Chapter 28;
(6) Revoke certification.
(E) Referral to Human Rights Commission. The City, including the Director and Contract Awarding Authorities, as appropriate, shall refer instances of alleged discrimination in contracting to the Human Rights Commission for investigation as set forth in 14B.9 and, as appropriate, imposition of sanctions under Administrative Code Chapter 12A.
(F) Notwithstanding any other provision of this Chapter, a Bidder, Contractor, or Subcontractor who demonstrates by clear and convincing evidence that such person or entity made reasonable efforts to comply with, and monitor its compliance with, the provisions of this Chapter, that its failure to fully comply occurred in spite of such measures, that such party or entity acted at all times in good faith and without knowledge of its noncompliance, and that it has taken corrective steps to remedy future noncompliance, shall not be subject to Sanctions.
(G) Procedures for Revocation of Certification and Appeals Thereof. The procedures for appealing the Director's denial of an application for certification or nonrenewal upon expiration of the Certification term, shall be governed by Section 14B.4(C). The procedures for appealing the revocation or suspension of Certification during the Certification term shall be governed by Section 14B.17(I).
(H) Procedures for Debarment. The Director shall have the authority to act as a charging official under San Francisco Administrative Code Chapter 28 to debar a Bidder, Contractor, or certified LBE for violations of this Chapter. The debarment procedures of Chapter 28 shall govern.
(I) City Administrator to Hear Appeals. Except as provided in Sections 14B.4(C) and 14B.17(H), the City Administrator or Hearing Officer appointed by the City Administrator shall hear appeals challenging any determination of the Director under this Section 14B.17. The City Administrator or Hearing Officer appointed by the City Administrator may sustain, reverse or modify the Director's findings and sanctions imposed, or take such other action to effectuate the purpose of this Chapter. Unless the City Administrator or Hearing Officer appointed by the City Administrator so orders, an appeal shall not stay the Director's determination and the imposition of sanctions.
(J) Willful Noncompliance by Contract Awarding Authority. Whenever the Director determines that a Contract Awarding Authority has willfully failed to comply with its duties under this Chapter, the Director shall attempt to resolve the matter informally with the Contract Awarding Authority. Should such attempt fail to resolve the issue, the Director shall inform the City Administrator of the Director's determination and the impasse in resolving the matter. If the City Administrator confirms the noncompliance and also is unable to resolve the matter informally, the City Administrator shall issue a written finding of noncompliance specifying the nature of the noncompliance, to the Contract Awarding Authority, the Mayor and the Board of Supervisors.
(K) Reporting Improper Government Activity; Protection of Whistleblowers. Complaints that a City officer or employee has engaged in improper government activity, including acts of reprisal, retaliation, threats, coercion, or similar acts, shall be made in accordance with the provisions of Article IV of the Campaign and Governmental Conduct Code.
(Added by Ord. 92-06, File No. 050784, App. 5/11/2006; amended by Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015)
(A) State or Federal Provisions. 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 Chapter when such laws, rules or regulations are in conflict.
(B) Severability. The provisions of this Chapter are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section, or portion of this Chapter, or the invalidity of the application thereof to any Person or circumstances shall not affect the validity of the remainder of this Chapter, or the validity of its application to other persons or circumstances.
(C) General Welfare Clause. In undertaking the enforcement of this Chapter, the City is assuming an undertaking only to promote the general welfare. It is not assuming, nor is it imposing on its officers and employees, an obligation for breach of which it is liable in money damages to any person who claims that such breach proximately caused injury.
(D) Municipal Transportation Agency. Consistent with Charter Section 8A.101(d), the Municipal Transportation Agency shall comply with the provisions of this Chapter and shall be solely responsible for its administration and enforcement with respect to matters within the Municipal Transportation Agency's jurisdiction.
LBE Subcontracting participation requirements shall be implemented for Design-Build and Integrated Project Delivery Contracts as follows:
(A) Design-Build Contracts.
(1) The Director shall establish separate LBE participation requirements for the design and construction portions of the Design-Build Contract.
(B) Integrated Project Delivery Contracts. The Director shall establish a project-wide LBE subcontracting participation requirement.
(C) LBE Subcontracting Participation Requirements for Trade Subcontractors. LBE Subcontracting participation requirements for trade package subcontracts awarded under Design-Build Contracts under Administrative Code Section 6.61(L) and Integrated Project Delivery contracts under Administrative Code Section 6.68 shall be as follows:
(1) Prior to the advertisement of any trade packages, the Design-Builder or Construction Manager/General Contractor (Prime Contractor), in consultation with the Director, shall establish a written plan for achieving the LBE subcontracting participation requirement. The plan shall be based on the availability of LBEs who could perform the work or supply materials and equipment for each trade package. In the case of a Design-Build Contract, the professional design services such as architectural or engineering performed by LBE firms will be credited toward the established LBE participation requirement on the design portion of the Contract. In the case of a trade package subcontract where some or all of the work is design-build, the plan should credit professional design services such as architectural or engineering performed by LBE firms toward the established trade package LBE participation requirement.
(2) The Prime Contractor shall set forth the applicable LBE subcontracting participation requirements in the bid specifications for each trade package. The Prime Contractor shall undertake the good faith outreach required in Section 14B.8(D) for each trade package until the cumulative trade package LBE utilization commitments meet the project-wide subcontracting participation requirements.
(3) The Director shall have sole authority for determining whether or not each trade package low bidder has met the applicable LBE subcontracting participation requirement.
(4) In the event a trade package apparent low bid does not meet the LBE subcontracting participation requirement, the Prime Contractor shall allow the bidder up to ten business days after bid opening to amend the bid to make up the shortfall, provided that the amendment conforms with CMD Rules and Regulations and does not violate the California Subletting and Subcontracting Fair Practices Act (Public Contract Code Section 4100 et seq.). The Prime Contractor shall deem an apparent low bid that does not make up a shortfall in LBE subcontracting participation requirements within the ten day extension, or such additional time as the Director may, in writing, allow, non-responsive and ineligible for award of the trade package subcontract. In such an instance, the Director and the Prime Contractor shall proceed to evaluate the second low bidder in the same manner, and so on for potential contract award.
(5) The Director shall monitor the Prime Contractor's actual LBE subcontracting participation as the trade package bids are received. In the event the Director determines that LBE subcontracting participation commitments at a particular time in the bidding of trade packages are materially lower than stated in the Prime Contractor's plan prepared under Section (C)(1) above, the Prime Contractor shall make all efforts to take immediate corrective steps, including to negotiate and award trade packages to LBEs using the seven and one half percent (7½%) of total trade package costs available to it for negotiating subcontracts under Administrative Code Sections 6.61(L)(3) or 6.68(H)(3), as applicable. The Prime Contractor shall be solely responsible for complying with the LBE subcontracting participation requirements and may be subject to sanctions as described herein in Section 14B.17 for failure to do so.
(Added by Ord. 18-10, File No. 091404, App. 2/10/2010; amended by Ord. 250-14
, File No. 140999, App. 12/17/2014, Eff. 1/16/2015, Oper. 7/1/2015)
In addition to any requirement in Section 56.7 of the Administrative Code, a development agreement entered into by the City under Chapter 56 of the Administrative Code shall require a detailed LBE utilization plan. The plan shall require compliance with the Good Faith Outreach requirements in Section 14B.8(D), the nondiscrimination provisions in Section 14B.9, and shall include a LBE utilization requirement set by the Director in conformance with the City-wide LBE Participation Goal, a reporting and monitoring program as approved by the Director, and an enforcement plan that allows the Director to assess penalties or other sanctions as provided in Section 14B.17.
(a) Joint Venture Incentives For Use By Contract Awarding Authorities.
(1) Prime Professional Services Contracts. For Professional Services and Architecture/Engineering prime Contracts estimated by the Contract Awarding Authority to cost in excess of $20,000,000, the Contract Awarding Authority may apply a rating bonus as described in subsection (a)(3) to proposals from Joint Ventures with Small and/or Micro-LBE Joint Venture partners. The applicability of the rating bonus shall be clearly identified in the request for qualifications/proposals or other solicitation document.
(2) Design-Build Contracts. For Design-Build Contracts estimated by the Contract Awarding Authority to cost in excess of $20,000,000, Contract Awarding Authorities may apply a rating bonus as described in subsection (a)(3) to proposals from design-builders where the lead designer is a Joint Venture with a Small and/or Micro-LBE Joint Venture partner. The applicability of the rating bonus shall be clearly identified in the request for qualifications/proposals or other solicitation document.
(3) Rating Bonus. The following rating bonus may apply where the Director finds that the Small and/or Micro LBE Joint Venture Partner (i) will be responsible for, and has sufficient skill, experience, and financial capacity to perform a clearly defined portion of the work, (ii) shares in the Ownership, Control, management responsibilities, risks, and profits of the Joint Venture at least in proportion to the value of its assigned Joint Venture work, and (iii) performs a Commercially Useful Function:
(A) Up to 2% rating bonus to a Joint Venture with LBE prime Contractor or lead design partner participation that equals or exceeds 5% but is less than 10% of the prime level work or design portion of a Design-Build Contract.
(B) Up to 4% rating bonus to a Joint Venture with LBE prime Contractor or lead design partner participation that equals or exceeds 10% but is less than 15% of the prime level work or design portion of a Design-Build Contract.
(C) Up to 6% rating bonus to a Joint Venture with LBE prime Contractor or lead design partner participation that equals or exceeds 15% of the prime level work or design portion of a Design-Build Contract.
(4) The rating bonus shall not apply to any cost portion of the selection or evaluation process.
(5) For prime Professional Services Contracts, LBE prime Joint Venture partner participation cannot be used towards meeting the Contract’s LBE Subcontractor Participation Requirement. For Design-Build Contracts, LBE lead design Joint Venture partner participation can be used towards meeting the Contract’s LBE Subcontractor Participation Requirement. For both Contract types, LBE Joint Venture partner participation can be used towards meeting the good faith outreach exemption in Section 14B.8(B)(1).
(b) Core Discipline Incentives For Use by Contract Awarding Authorities. For all Professional Services and Architecture/Engineering prime Contracts, Contract Awarding Authorities may, in consultation with the Director, include as evaluation or selection criteria in the Contract procurement, a prime Contractor’s use of Micro and/or Small-LBEs in core disciplines to meet the Contract’s LBE Subcontractor Participation Requirement. The Contract Awarding Authority shall specify in the request for qualifications/proposals or other solicitation document what trades, scopes of work, or discipline areas will be considered core disciplines for a Contract. The weight of this core discipline selection criteria in the overall selection process will be at the discretion of the Contract Awarding Authority, and shall be clearly identified in the request for qualifications/proposals or other solicitation document.
(Ord. 213-17, File No. 170921, App. 11/3/2017, Eff. 12/3/2017)
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