Current through Register Vol. 51, No. 19, September 20, 2024
A. General. When a
certified MBE participates in a contract, the procurement agency shall consider
§§B, C, D, and E of this regulation in determining whether and the
extent to which the certified MBE's participation may be counted toward the MBE
participation goals.
B.
Commercially Useful Function. A procurement agency may count participation of a
certified MBE contractor toward MBE goals only if the certified MBE is
performing a commercially useful function on that contract.
(1) Commercially Useful Function.
(a) A certified MBE performs a commercially
useful function when it is responsible:
(i)
For execution of the work of the contract and is carrying out its
responsibilities by actually performing, managing, and supervising the work
involved; and
(ii) With respect to
materials and supplies used on the contract, for negotiating price, determining
quality and quantity, ordering the material, and installing (where applicable)
and paying for the material itself.
(b) To determine whether a certified MBE is
performing a commercially useful function, the procurement agency shall
evaluate:
(i) The amount of work
subcontracted;
(ii) Industry
practices;
(iii) Whether the amount
the certified MBE is to be paid under the contract is commensurate with the
work it is actually performing; and
(iv) Other relevant factors.
(2) A certified MBE
does not perform a commercially useful function if its role is limited to that
of an extra participant in a transaction, contract, or project through which
funds are passed in order to obtain the appearance of MBE participation. In
deciding whether a certified MBE is such an extra participant, the procurement
agency may examine similar transactions, particularly those in which MBEs do
not participate.
(3) A certified
MBE is presumed not to perform a commercially useful function if it does not
perform or exercise responsibility for at least 30 percent of the total dollar
value of its contract with its own work force, or the certified MBE
subcontracts a greater portion of the work of a contract than would be expected
on the basis of industry practice for the type of work involved. A procurement
agency may, however, upon evaluation of the work involved and industry
practices, decide that the certified MBE is performing a commercially useful
function.
C. Joint
Venture. When a certified MBE performs as a participant in a joint venture, a
procurement agency may count, subject to §D of this regulation, a portion
of the total dollar value of the contract equal to the distinct, clearly
defined portion of the work of the contract that the certified MBE performs
with its own forces toward fulfilling the contract goal and not more than one
of the contract subgoals, if any.
D. Counting Participation of Certified MBE
Prime.
(1) This section shall apply to
contracts that are solicited and awarded on or after June 9, 2014.
(2) Subject to the requirements of §B of
this regulation and Regulation .09C of this chapter, when a certified MBE
participates as a prime contractor on a contract, a procurement agency may
count the distinct, clearly defined portion of the work of the contract that
the certified MBE performs with its own forces toward fulfilling up to 50
percent of the MBE participation goal and up to 100 percent of not more than
one of the MBE participation subgoals, if any, established for the contract,
provided that the certified MBE prime contractor is:
(a) Identified on the MBE participation
schedule pursuant to Regulation .09C(3)(b) of this chapter, including the
certification category under which the MBE prime is self-performing and the
percentage of the contract value attributed to that work; and
(b) Certified by the certification agency to
provide the services, materials, or supplies that it has committed itself to
self-perform on the MBE participation schedule.
E. Counting Value of Supplies and Equipment.
(1) For purposes of this section, "regular
dealer" means:
(a) A firm that owns, operates,
or maintains a store, a warehouse, or any other establishment in which the
materials, supplies, articles, or equipment are of the general character
described by the specifications required under the contract and are bought,
kept in stock, or regularly sold or leased to the public in the usual course of
business; and
(b) Does not include
a packager, a broker, a manufacturer's representative, or any other person that
arranges or expedites transactions.
(2) If the certified MBE is a regular dealer,
then a procurement unit may apply only 60 percent of the costs of the materials
and supplies provided by the regular dealer toward the MBE participation
goal.
(3) If the certified MBE is
neither a regular dealer nor a manufacturer, a procurement unit:
(a) May not count any portion of the costs of
the materials and supplies toward the MBE participation goal; and
(b) May count the entire amount of the fees
or commissions charged for assistance in procuring materials and supplies,
fees, or transportation charges for delivering the materials and supplies
required on a procurement toward the MBE participation goal if the procurement
unit determines the fees:
(i) Are reasonable;
and
(ii) Not excessive as compared
with fees customarily allowed for similar services.
F. Counting
Participation of a Certified Business Owned by a Woman of an Ethnic or Racial
Group for Subgoals. A certified MBE may be counted to meet a subgoal for
woman-owned businesses, a subgoal for businesses owned by a member of an ethnic
group or racial group, or both, if the business has been certified in both
subgoal categories. The participation of an MBE certified in both categories
may only be counted once for purposes of meeting the overall MBE contract
goal.
