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Sec. 28-143(1). Federally funded contracts shall be exempt from the provisions of this article.
Sec. 28-143(2). A contract otherwise subject to the provisions of this article may be exempt by the equal opportunity office director from compliance with its provisions in the case of an emergency or when special circumstances exist which, in the interest of the city, compel such exemption.
(Ord. No. 9913, § 1, 11-17-03)
Any contractor who knowingly submits a false statement under this article, or any contractor who fails to comply with the provisions of the affirmative action plan submitted, or with any other requirements of this article, may be subject to those sanctions allowed by law, including but not limited to cancellation, termination, suspension of the contract or debarment in accordance with section 28-97.
(Ord. No. 9913, § 1, 11-17-03)
ARTICLE XIII.
SMALL BUSINESS ENTERPRISE PROGRAM*
SMALL BUSINESS ENTERPRISE PROGRAM*
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*Editor's note – Ord. No. 10993, § 1, adopted June 12, 2012 and effective July 1, 2012, amended Art. XIII in its entirety as set out herein. Former Art. XIII pertained to the small, minority and women-owned business enterprise program and derived from Ord. No. 10634, § 1, adopted Feb. 10, 2009, as amended by Ord. No. 10703, § 1, adopted August 5, 2009.
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The application of definitions specifically included herein is limited to contracts initiated under the Small Business Enterprise (SBE) program. The following terms shall have the following meanings for article XIII:
(1) Arizona Unified Certification Program (AZUCP) is a reciprocity DBE certification program and is comprised of the Arizona Department of Transportation, City of Phoenix, and the City of Tucson as the sole DBE certifying agencies within Arizona.
(2) Certified small business enterprise (SBE) shall mean a local small business that is an independent and continuing enterprise for profit performing a commercially useful function, that has completed the application process for certification, has met the requirements set forth in 49 CFR part 26, and holds a current City of Tucson business license.
(3) Commercially useful function shall mean the performance of real and actual services in the discharge of any contractual endeavor. An SBE contractor is performing a commercially useful function when it is responsible for execution of a distinct element of a contract and carries out its responsibilities by actually performing, managing, and supervising the work involved. In determining whether an SBE is performing a commercially useful function, factors including, but not limited to, the following will be considered:
(a) If a Certified SBE does not perform or exercise responsibility for at least thirty (30) percent of the total cost of its contract with its own work force.
(b) The type of prime contract;
(c) Whether the business has the skill and expertise to perform work for which it is being/has been certified;
(d) Whether the business actually performs, manages and supervises the work for which it is being or has been certified;
(e) Whether the business purchases goods and/or services from a non-SBE owned business enterprise and resells goods to the city, city contractor, or other person doing business with the city for the purpose of allowing these goods to be counted towards the fulfillment of SBE utilization goals; and
(f) Standard industry practices.
(4) Construction project shall mean a contract that has been awarded in accordance with A.R.S. title 34 and the Tucson Procurement Code.
(5) Construction services project shall mean a contract that has been awarded using one of the following alternative project delivery methods as prescribed in A.R.S. title 34:
(a) Construction-manager-at-risk;
(b) Design-build; or
(c) Job-order-contracting.
(6) Controlled shall mean the SBE owner(s) possess the legal authority to manage business assets, goodwill and daily operations of the business and actively and continuously exercise managerial authority in determining the policies and in directing the operations of the business.
(7) Disadvantaged business enterprise (DBE) shall mean a for-profit business concern that is at least fifty-one (51) percent owned by one or more individuals who are both socially and economically disadvantaged consistent with 49 CFR part 26.
(8) Eligible contract for general procurement shall mean any contract for goods, materials, or services that meets the city's needs for purchases in accordance with section 28-16(1) (small purchases) except as otherwise provided for in sections 28-21 (sole source procurements), 28-22 (emergency procurements) and 28-23 (special procurements) or contracts with nonprofit agencies..
(9) Eligible contract for professional design services shall mean any contract for professional design services, unless otherwise precluded by law, estimated above the amount specified in section 28-16(1), except as otherwise provided for in sections 28-21 (sole source procurements), 28-22 (emergency procurements) and 28-23 (special procurements).
(10) Eligible construction or construction services project shall mean any construction or construction services project, unless otherwise precluded by law, provided that the estimate for construction exceeds the amount specified in section 28-16(1) except as otherwise provided for in sections 28-21 (sole source procurements), 28-22 (emergency procurements) and 28-23 (special procurements). This term does not include any construction project in which the estimated value is below the formal solicitation threshold or projects which require a DBE goal pursuant to federal law.
(11) Joint venture shall mean an association of two (2) or more persons, partnerships, corporations, business enterprises, or any combination of these entities established to form a single business enterprise but limited in scope and duration for the purpose of carrying out a business activity. The agreement establishing the joint venture shall be in writing. The SBE partner(s) must be responsible for a clearly defined portion of the work performed which is set forth in detail and separately from the work to be performed by the non-SBE partner and is assigned a commercially reasonable dollar value. Furthermore, the SBE interest shall be based on sharing real economic interest in the venture, include proportionate control over management, and interest in capital acquired by the joint venture and interest in earnings. Only the portion of work, supplies, and/or services attributed to the SBE, as a member of the joint venture, may be counted towards relevant SBE participation goals.
(12) Local shall mean that the principal place of business of the enterprise is physically located within the Tucson/Pima County metropolitan area.
(13) Office shall mean a fixed established place where work of a clerical, administrative, professional or production nature is carried on and directly related to the business being certified. A temporary location, movable property, or location established to oversee a project does not qualify as an office.
(14) Owned, for purposes of determining whether an enterprise is owned by an SBE, shall mean that the small business owner(s) meet the ownership requirements in accordance with 49 CFR part 26:
(a) Possesses interest in the business, along with the incidents of ownership;
(b) Contributed capital, equipment, and expertise to the business;
(c) Acquired the interest with his or her own financial resources or has put his or her own financial resources at risk in the operation of the enterprise; and
(d) Enjoys the customary incidents of ownership and shall have a risk in profits commensurate with the ownership interest, as demonstrated by an examination of the substance, rather than the form, of ownership arrangements.
(15) Professional design services contract shall mean a contract that has been solicited and awarded for architect services, engineer services, landscape architect services, surveyor services, or assayer services in accordance with A.R.S. title 34.
(16) Small business enterprise (SBE) shall mean a business that meets the North American Industry Classification System (NAIC) size standard adopted by the city for purposes of qualifying for SBE certification.
(Ord. No. 10993, § 1, 6-12-12, eff. 7-1-12; Ord. No. 11296, § 1, 8-5-15)
Sec. 28-148(1). Duties of the director. The director shall implement and monitor the SBE program. The director shall be the chief administrative officer for the program and shall have the following duties and authority:
(1) The administration and enforcement of this article.
(2) Coordination of the development of administrative procedures and policies with the applicable department(s) to effectuate this article.
(3) Coordination of outreach efforts, including increased working relationships with local community organizations to identify and increase the availability of SBE firms.
Sec. 28-148(2). Records retention requirements.
(1) The director shall, ensure that data and records are maintained in order to conduct on-going analysis and evaluation of the SBE program and its objectives and may make recommendations to the city manager and mayor and council regarding additional efforts necessary to ensure SBE participation.
(2) All city departments shall maintain and retain complete and accurate records relating to any professional design, construction, or construction services procurements.
(3) The director of the procurement department shall maintain records of source selection and record of the inclusion of SBEs for awarded procurements.
Sec. 28-148(3). Administrative provisions for certification. The director shall be responsible for the certification and verification of program eligibility. DBE and SBE criteria and definitions shall be applied in accordance with 49 CFR part 26 to establish eligibility for certification of local firms as a SBE. Only local firms shall qualify for certification as a SBE. Firms outside of the Tucson/Pima metropolitan area meeting the eligibility criteria for DBE certification will qualify only as a DBE and are not eligible to participate in the local SBE program. The director shall:
(1) Maintain a listing of certified SBEs segmented into specified trades or lines of business to be maintained as public record; and
(2) Participate and effectuate reciprocity of DBE certification through the AZUCP.
Sec. 28-148(4). Standards for SBE certification. The director shall certify and monitor contractors, subcontractors, professional services consultants, professional services subcontractors, vendors, and suppliers as a bona fide SBE for participation in the SBE program based on the certification criteria and definitions as set forth in 49 CFR part 26, including, but not limited to, the following standards:
(1) A SBE shall be an independent business enterprise, continuing in operation for profit, performing a commercially useful function. The ownership and control shall be real and substantial and be indicated by customary incidents of ownership, as demonstrated by an examination of the substance rather than the form of ownership and operating arrangements.
(2) A certified SBE shall have a valid City of Tucson business license.
(3) A certified SBE shall be a local enterprise as defined by this article and an active participant within the Tucson/Pima County metropolitan area.
(4) The SBE applicant(s) must not exceed the personal net worth standard as defined in 49 CFR part 26.
(5) The SBE applicant is responsible for cooperating and providing all necessary documentation in support of all eligibility as set forth in 49 CFR part 26 and this article. A complete certification application is required along with supportive documents including, but not limited to, three (3) years of income tax records (personal and business), bank signature card, a current personal net worth statement, and various other documents confirming ownership, management, and control of the SBE applicant firm. Additionally, an on-site audit is required at the firm's place of business.
Sec. 28-148(5). Certification investigations. In accordance with 49 CFR part 26, the director may investigate SBE ownership, contract transactions, and other relevant arrangements beyond formal documentation at initial certification, during certification, during the annual update, or based on a complaint submitted to the director. To the extent reasonably necessary to ensure compliance, such investigations may include, but are not limited to, the following:
(1) Personal interviews with persons having knowledge or relevant information relating to an SBE's eligibility, certification, or decertification.
(2) Personal interviews with bidders, contractors, vendors, and/or suppliers involved in a contractual relationship with the SBE.
(3) Reviewing records pertaining to certification.
(4) Conducting random on-site visits, audits, and/or relevant inquiries.
Sec. 28-148(6). Certification period. In accordance with 49 CFR part 26, the director shall grant certification to an approved SBE with the requirement for an annual update affirming there have been no changes in the firm's circumstances affecting its ability to meet size, ownership, or control requirements or material changes in the information provided in its application form. If an SBE is denied certification on the basis of the information submitted, the entity may not reapply for a period of one (1) year from the date of the notice of denial provided that such firm shall have the right to appeal such denial to the director in accordance with the process specified in section 28-148(9).
Sec. 28-148(7). Continuing certification. All certified SBEs must annually re-submit disclosure affidavits and any other required documents.
Sec. 28-148(8). Decertification. The director may decertify a business enterprise because of, but not limited to, the following, in accordance with 49 CFR part 26 where applicable, or demonstrates continued poor performance on contracts as determined by City of Tucson staff:
(1) A change in ownership and/or control.
(2) A change in management structuring.
(3) Exceeding small business administration size limits by industry designation.
(4) Exceeding program standard for owner(s) personal net worth.
(5) Fails to comply with annual reporting requirements.
(6) Fails to fulfill the requirements of 28-148(4).
(7) Fails to cooperate as directed in 28-148(5).
(8) Continued poor performance ratings.
Sec. 28-148(9). Protest procedures for SBE certification and decertification decisions.
(1) SBE certification/decertification decisions. All decisions regarding certifications and decertifications made by the director shall be made in writing and shall include the reasons for the decision. The notice shall be sent to the affected party and the affected party shall have the right to seek administrative review as provided herein.
(a) An aggrieved party may submit protest in writing to the director within ten (10) days from the date of notice of the adverse decision. The protest must include the legal and factual basis for the protest along with any supporting documents.
(b) Within fifteen (15) days of receipt of the protest, the director shall review the protest and all relevant supporting documents and render a decision notice in writing which includes the basis for the decision.
(2) Appeal of director’s certification and decertification decisions. If the protest is denied, the aggrieved party may request an appeal review through the director. The request must be in writing and received by the director within seven (7) days of the aggrieved party’s receipt of the decision notice. The aggrieved party shall set forth the legal and factual basis for the appeal of the decision. The director shall retain an independent hearing officer who will have knowledge of the certification standards/criteria as set forth in 49 CFR part 26, construction and procurement law and the small business enterprise program.
(a) Within seven (7) days of receipt of the notice of appeal from the aggrieved party, the director shall forward the notice to the independent hearing officer.
(b) The independent hearing officer shall make a decision based solely on the administrative record.
(c) The independent hearing officer shall make a written decision on the appeal, as soon as practical. The decision may affirm, modify, or reverse the decision by the director.
(d) The independent hearing officer’s decision will be forwarded to the director for a final decision regarding certification or decertification.
(Ord. No. 10993, § 1, 6-12-12, eff. 7-1-12; Ord. No. 11296, § 1, 8-5-15)
Sec. 28-149(1). Eligible projects for subcontractor SBE participation goals.
(1) All eligible projects shall be reviewed by the director or designee for determination of subcontracting opportunities for SBE participation. Where there is sufficient availability of SBEs, the director or designee may establish individual project participation goals.
(2) Specific participation SBE goals are to be established on eligible projects that are estimated above the amount specified in section 28-16(1) and according to the criteria established by the director including, but not be limited to, the following:
(a) The present availability of certified SBEs ready, willing, and able to provide labor and/or material on a particular project in the profession or industry/trade classifications relevant to the project.
(b) The ability of certified SBE firms to readily expand their capacity to meet additional demand.
(c) The level of participation by such firms in past projects awarded by the city.
(d) The design scope of work, plans, and project specifications.
(3) SBE goals for a construction contract must be clearly published as part of the solicitation requirements issued with each invitation for bid (IFB).
(4) SBE goals or requirements for construction services shall be issued in the request for qualifications (RFQ).
(5) SBE goals shall apply to the initial contract award for construction contracts and to the individual project or phase awards for construction services.
(Ord. No. 10993, § 1, 6-12-12, eff. 7-1-12; Ord. No. 11296, § 1, 8-5-15)
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