SUBSTITUTE ORDINANCE NO. BL2007-1552
An ordinance amending Title 4 of the Metropolitan Code to establish a commercial nondiscrimination program, all of which is more particularly described herein.
BE IT ENACTED BY THE COUNCIL OF THE METROPOLITAN GOVERNMENT OF NASHVILLE AND DAVIDSON COUNTY:
Section 1. That Title 4 of the Metropolitan Code of Laws is hereby amended by adding the following new Chapter 4.46:
CHAPTER 4.46 COMMERCIAL NONDISCRIMINATION PROGRAM
4.46.010 Policy and objectives.
A. Policy Statement. It is the policy of the Metropolitan Government of Nashville and Davidson County to promote full and equal business opportunities for all persons doing business with the Metropolitan Government by increasing the purchase of goods and services from small businesses within the area of the Metropolitan Government.
B. Promotion of Equal Opportunity. Discrimination against businesses based on race, color, national origin, or gender is strictly prohibited. No person shall be denied the benefit of, or otherwise discriminated against, on the grounds of race, color, national origin or gender in connection with the award and/or performance of contracts or modification of a contract between a vendor or contractor and the Metropolitan Government which contract is paid for, in whole or in part, with monetary appropriations by the Metropolitan Government.
C. Program Objectives. The objective of the Commercial Nondiscrimination Program (“the Program”) is: to promote and encourage full and open competition in Metropolitan Government procurement and purchasing; to encourage all Metropolitan Government personnel involved with procurement and contracting activities to maintain good faith efforts and appropriate purchasing procedures; to protect the Metropolitan Government from becoming a passive participant in any unlawful discrimination; and to otherwise spur economic development in the public and private sectors of the local economy.
For the purpose of this Chapter, the following words, terms, phrases and abbreviations shall have the following meanings:
“Appeals Board” means the Metropolitan Government Procurement Appeals Board established pursuant to Section 4.36.070 of the Metropolitan Code.
“Benchmarks” means the method which enables the Metropolitan Government to track the inclusion of LSBEs in the procurement process. Benchmarks are not quotas or goals, rather, they are percentage ranges based on a LSBE availability, current LSBE participation, and previous LSBE participation in Metropolitan Nashville and Davidson County (“Nashville”).
“Board” means the Metropolitan Government Procurement Standards Board.
“Certification” means the qualifying process that ensures buyers and local, state, and federal agencies that a particular business is a LSBE which performs a commercially useful function.
“Commercially Useful Function” means performance of real and actual services by a Participant who contracts with the Metropolitan Government, or subcontracts with another business enterprise which contracts with the Metropolitan Government. A business enterprise serving as a conduit for another business shall not be deemed to perform a commercially useful function. In determining whether a business is performing a commercially useful function, factors, including but not limited to the following, will be considered:
i) the nature and amount of work contracted;
ii) whether the LSBE has the skill and expertise to perform work for which it has been certified;
iii) whether the LSBE actually performs, manages and supervises the work;
iv) whether the LSBE intends to purchase commodities and/or services from a non-LSBE and simply resell same to the general or prime contractor for the purpose of allowing those commodities and/or services to be counted towards assessment of a Benchmark or fulfillment of a goal (if implemented);
v) standard industry practices relating to the use of the subcontractors. Consistent with standard industry practices, a LSBE subcontractor may enter into second tier subcontracts. If a LSBE subcontractor subcontracts a significantly greater portion of the work of its subcontract to a non-LSBE inconsistent with standard industry practices, the LSBE subcontractor shall be presumed not to be performing a commercially useful function.
“Compliance” means the condition existing when a Participant has met the requirements of this Program.
“Conduit” means a business which purchases goods or services that are not normally purchased or sold as part of its daily business from another business(es) for the sole purpose of resale to the Metropolitan Government or a contractor doing business with the Metropolitan Government.
“Contract” means any mutually binding legal obligation of the Metropolitan Government created to acquire some good and/or service from one or more Participants, which is paid or which is to be paid for, in whole or in part, with monetary appropriations of the Metropolitan Government. In this context, the terms “contracting”, “purchasing”, and “procurement” are synonymous and refer to the process or processes under which the Metropolitan Government undertakes such acquisitions.
“DMSBA” means the Metropolitan Finance Department Division of Minority and Small Business Assistance, which is a part of the office of the Metropolitan Purchasing Agent.
“Goal” means the race/gender-conscious measures established in the event that the scheduled periodic review of LSBE Benchmarks reveal continuing underutilization of LSBEs. Race/gender-conscious measures will not be established unless the Metropolitan Government discovers a compelling interest to do so and only if race-neutral efforts have been exhausted.
“Good Faith Efforts” means the voluntary actions of a Participant undertaken in good faith to ensure that it does not discriminate in its contracting practices.
“Independent” means, with respect to the ownership, control and activity of a LSBE, that the business shall operate separate and apart from the ownership, control or undue influence of another business owned and controlled by one or more non-LSBEs.
“Joint Venture” means an association of two or more independent persons, partnerships, corporations (or any combination of them) formed, consistent with the laws of the State of Tennessee, to perform one or more specific contracts limited in scope and duration.
“Local Small Business Enterprise” (“LSBE”) refers to a business enterprise maintaining a significant business presence in Davidson County, and performing a commercially useful function, which is owned by the one or more of the following: (1) African Americans (persons having origins in any of the Black racial groups of Africa); (2) Native Americans; (3) Hispanic Americans; (4) Asian Americans; (5) Women; and (6) White American Males. LSBE also includes Small Business Enterprises as defined in the Metro Small Business Standards contained in the Procurement Regulations adopted by the Procurement Standards Board, as said Standards may be amended from time to time. Racial and gender categories are separated for monitoring and tracking purposes only.
“Metropolitan Government” means the Metropolitan Government of Nashville and Davidson County, including any of its operating elements, officers, and/or employees acting with authority.
“Non-Compliance” means the condition existing when a Participant has failed to meet the requirements of this Program.
“Purchasing Agent” means the Purchasing Agent of the Metropolitan Government of Nashville and Davidson County.
“Owned”: For purposes of determining whether a business is Local Small Business Enterprise, “owned” shall mean that the African American, Native American, Hispanic American, Asian American or female owner(s) possess an ownership interest of at least fifty-one percent (51%) of the business. The majority owner of the business enterprise must be a citizen or a permanent resident of the United States. For the purposes of this Program, one or more of the identified groups collectively owning at least 51% of an independent business and meeting the small business requirements may be considered a LSBE.
“Participant” means any contractor, vendor, supplier, or other person, partnership, joint venture, corporation or other business entity that submits a bid or proposal to the Metropolitan Government or expressed interest in submitting a bid or proposal in response to competitive solicitation issued by the Metropolitan Government.
“Program” means the Metropolitan Government Commercial Nondiscrimination Program.
“Promise of Non-Discrimination” means, collectively, one or more contractual affirmative promises: (1) to adopt the policies of the Metropolitan Government relating to the participation of LSBEs in the procurement process; (2) to undertake certain good faith efforts to solicit LSBE participation; and (3) not to otherwise engage in discriminatory conduct against LSBEs.
“Proposal” means a quotation, proposal, bid or offer by a Participant to perform or provide labor, materials, supplies, or services to the Metropolitan Government in response to competitive solicitation issued by the Metropolitan Government.
“Race/Gender-Conscious” means any governmental or legislative policy or programmatic action that uses race or gender as criteria for participation.
“Race/Gender-Neutral” means any governmental or legislative policy or a programmatic action in which race or gender is not among the criteria for participation.
“Significant Business Presence” means that a business enterprise with an established place of business in Nashville at which one or more of its employees is regularly based and that such place of business has a substantial role in the business’ performance of a commercially useful function as herein defined. A location utilized solely as a post office box, mail drop or telephone message center or any combination thereof, with no other substantial work function, shall not constitute a significant business presence.
“Small Business Enterprise” (“SBE”) means a locally-owned business, meeting the Metro Small Business Standards contained in the Procurement Regulations adopted by the Procurement Standards Board, as said Standards may be amended from time to time.
“Underutilization” means the percentage of dollars spent by the Metropolitan Government with LSBE which is less than would be expected based on LSBE availability in Nashville.
4.46.030 Program Scope and Applicability.
The following categories identify the natures and types of Metropolitan Government contracting:
Category A -- Construction: Includes any and all contracting relating to buildings, facilities and other erected structures on real estate owned by the Metropolitan Government such as new construction, rehabilitations, remodeling and repairs.
Category B -- Non-professional Services: Encompasses the procurement of advertising, printing, non-construction repairs, janitorial services, training seminars and workshops, computer and information systems, security, shipping and mailing, microfiche and microfilm, courier, storage, travel, consulting and other non-professional services.
Category C -- Professional Services: Includes the purchase of any or all services for which applicable selection criteria may require a Participant to possess a license or other certificate of competency such as accounting, auditing, architectural, engineering, insurance, laboratory, legal, lifeguard, medical, dental and nursing.
Category D – Commodities: Includes the purchase of all goods, equipment, food, office and other supplies, art, furniture, textbooks and other materials, and other tangible personal property not associated with the services identified in Categories A, B or C.
4.46.040 LSBE Designation.
A. Certification. Certification is the qualifying process that ensures that a particular business is a LSBE which performs a commercially useful function. The screening mechanism for certification assures that interested LSBEs have the proper ownership, size, control and management as defined in the Program. Current contact information about the certifying agency shall be maintained by the DMSBA and provided to all interested persons upon request.
B. Affidavit of Certification. A LSBE shall not be precluded from the Program for lack of certification. A LSBE may sign a form approved by the DMSBA under notary oath claiming LSBE status. Any LSBE submitting such a statement must submit proper certification from an appropriate certifying agency within thirty (30) days after submitting a Proposal.
C. Reciprocal Certification. The Metropolitan Government may accept certification of a LSBE if the LSBE contemporaneously possesses certification from another public and/or private entity. The certification standards utilized by the public and/or private entity must sufficiently ensure that only legitimate LSBEs are certified. Acceptance of another entity’s certification shall be within the sound discretion of the DMSBA.
A. Definition and Purpose. The Metropolitan Government maintains a compelling interest in providing equal business opportunities for all persons wishing to do business with it. Therefore, the Metropolitan Government will continue to monitor and track LSBE participation in the procurement process through Benchmarks. Benchmarks are determined by comparing the percentage level of actual procurement to the measure of LSBE availability in Nashville. Benchmarks are not quotas, but rather a method enabling the Metropolitan Government to track the inclusion of LSBEs in the procurement process. The DMSBA shall establish annual Benchmark ranges for LSBEs.
B. Procedure for Establishing Benchmarks. To establish Benchmarks, the DMSBA shall conduct an annual review. First, the DMSBA shall evaluate the levels of LSBE participation for the Metropolitan Government overall procurement program. As part of the review, the DMSBA may consider data regarding LSBE participation for the past three fiscal years for a more accurate portrayal of LSBE participation. Secondly, the DMSBA shall review available LSBE totals and percentages for Nashville.
An independent consultant may be hired to calculate proposed availability estimates per current legal, economic, statistical, and social science standards and to make a recommendation to the DSMBA regarding the Benchmark ranges. Upon completion, copies of the independent consultant’s report will be made available to the public for purchase.
C. Comment Period. After the independent consultant presents its report to the DMSBA, there will be a ten (10) day public comment period. During this time frame, the DMSBA may receive written comments from any interested individual or entity regarding the consultant’s findings and recommendations.
D. Review of Benchmarks. The Benchmarks shall be in effect for a period of one (1) year and shall be reviewed by the Purchasing Agent on a semiannual basis. All total contract dollars awarded to LSBEs, whether payments are made to non-certified LSBEs or certified LSBEs, shall count towards Benchmark percentages.
4.46.060 Requirements of Prime Contractors.
In consideration of, and as condition precedent to, the right and privilege to submit a Proposal on construction projects and other procurement contracts with the Metropolitan Government, at the time of submitting a Proposal each Participant shall be required to present appropriate documentation. The documents described below must be completed and signed by each Participant before a Proposal can be considered responsive.
A. Promise of Non-Discrimination. Each Participant must submit a duly executed and attested Promise of Non-Discrimination. This written instrument shall contain promises, averments and/or affirmations made by the Participant:
(1) to adopt the policies of the Metropolitan Government relating to equal opportunity in contracting on projects and contracts funded, in whole or in part, with monetary appropriations of the Metropolitan Government;
(2) to attempt certain good faith efforts to solicit LSBE participation on projects and contracts in addition to regular and customary solicitation efforts;
(3) not to otherwise engage in discriminatory conduct;
(4) that this Promise of Non-Discrimination shall be continuing in nature and shall remain in full force and effect without interruption;
(5) to provide a discrimination-free working environment;
(6) that the purpose of the Promise of Non-Discrimination shall be incorporated by reference into any contract or portion thereof which the Participant may hereafter obtain; and
(7) that the failure of the Participant to satisfactorily discharge any of the promises of non-discrimination as made and set forth herein shall constitute a material breach of contract permitting the Metropolitan Purchasing Agent to declare the contract in default and to exercise any and all applicable rights and remedies, including but not limited to, cancellation of the contract, termination of the contract, suspension and debarment from future contracting opportunities, and withholding and/or forfeiture of compensation due and owing on a contract.
B. Statement of Successful Subcontractors. Each Participant shall submit a Statement of Subcontractors. The Statement must be filed on company letterhead and shall include each successful subcontractor’s name, NAISC Code (or other applicable industry code utilized by the Metropolitan Government), race, gender, national origin, approximate business size, business location, work to be performed, dollar value of the project, and percentage attributable to each subcontractor. In addition, copies of each successful subcontractor’s price quotes must be submitted by the close of business on the second business day following submission of a Proposal.
C. Statement of Interested Subcontractors/Vendors. Each Participant shall submit a Statement of Interested Subcontractors/Vendors on company letterhead which shall include each individual or entity requesting information about the project or solicited for participation on the project. The list of subcontractors shall include those persons who did not actually submit a price quotation or a bid, rather just requested information. The statement shall include the individual’s or entity’s name, NAISC Code, race, gender, national origin, approximate business size, business location, and information requested.
D. Statement of Bid Proposals/Price Quotations. Each Participant shall submit a Statement of Bid Proposals/Price Quotations. The Statement must be filed on company letterhead and shall include each potential subcontractor’s vendor’s name, NAISC Code (or other applicable industry code utilized by the Metropolitan Government), race, gender, national origin, approximate business size, business location, work requested to be performed, and price quotation and/or bid. The statement shall include only those persons or entities who actually submitted a bid or proposal for the project and were not selected.
E. Letter of Intent to Perform as a Subcontractor/Joint Venture. In the event that subcontractor or joint ventures are utilized on a project, each Participant shall be required to submit to the DMSBA a letter of intent signed by both the subcontractor/joint venturer and Participant. This form is to be completed and submitted by the apparent successful Participant by the end of the second business day following notice of award of contract.
Failure on the part of a Participant to submit the Promise of Non-discrimination, Statement of Successful Subcontractors, the Letter of Intent to Perform as a Subcontractor/Joint Venturer, the Statement of Interested Subcontractors/Vendors and the Statement of Bid Proposals/Price Quotations shall render the proposal non-responsive.
The DMSBA shall have the authority to use the attached forms, and otherwise create sample forms for the above required documentation so long as they remain consistent with the purpose and requirements of this Chapter.
F. Other Information and Data. The DMSBA may request additional information and data prior to a contract award. This information may include, but is not limited to, information regarding business ownership of all subcontractors to be utilized on the project, all of which shall reflect the race, gender, ethnic origins, location, size and structure of the identified businesses, in order to be eligible for contract award.
A Contractor’s failure or refusal to provide information and data required by this Program and requested by the DMSBA shall subject the contractor to having a proposal deemed non-responsive.
G. Reporting Subcontractor Substitution or Replacement. The prime contractor shall report any replacements or substitutions of the use of subcontractors. For reporting purposes, the prime contractor shall report to the DMSBA statistical data pertaining to the new subcontractor, including race, gender, national origin, business size and business location.
H. Use of Sub-subcontractors. In the event that a subcontractor portions out work and utilizes the services of a sub-subcontractor or sub-vendor, the prime contractor shall be required to report this use to the DMSBA. For reporting purposes, the prime contractor shall report statistical data for the sub-subcontractor or sub-vendor, including race, national origin, gender, business size and business location.
4.46.070 Good Faith Efforts.
A. Good Faith Efforts to include LSBEs in the procurement process are requested of all Participants. These Good Faith Efforts should be in addition to the Participant’s regular and customary solicitation process of contact with potential subcontractors and/or vendors.
B. Written Notice to LSBEs. To demonstrate good faith efforts, a Participant shall deliver written notice to at least three (3) available certified LSBEs. This notice requirement shall not be applicable to those Participants who will not utilize the services of outside subcontractors or vendors in performance of the Contract (i.e. those Participants that are “self-performing”). Names, addresses, and telephone numbers for available LSBEs shall be provided by the DMSBA to all Participants for each potential subcontracting or supply category in the Contract. In addition, a Participant must deliver written notice to all individuals or entities requesting information on the Contract.
The written notice sent to potential subcontractors or vendors shall contain the following:
(1) Sufficient information about the plans, specifications, and relevant terms and conditions of the Contract. This may include information about the work which will be subcontracted or the goods which will be obtained from subcontractors and suppliers;
(2) A contact person knowledgeable of the project documents within the Participant’s office to answer questions about the conditions of the contract;
(3) Information as to the Participant’s bonding requirements, the procedure for obtaining any needed bond and the name and telephone number of one or more acceptable surety companies; and
(4) The deadline for price quotations.
C. Additional Good Faith Efforts. In addition to the Participant’s regular and customary solicitation process, the Participant may also demonstrate good faith efforts by:
(1) Attending informational meetings to update potential subcontractors or vendors of subcontracting or supply opportunities;
(2) Dividing the contract, in accordance with normal industry practice, into small, economically feasible segments that could be performed by a LSBE. Under no circumstances, however, shall a Participant segment work solely for the purpose of utilizing LSBEs as subcontractors where such segmentation is not in accordance with common and accepted industry practices relating to the utilization of other firms as subcontractors;
(3) Providing a written explanation for rejection of any potential subcontractor or vendor to the DMSBA, including the name of the firm awarded the subcontract or supply agreement. The DMSBA will maintain these records and make same available to any subcontractor or vendor rejected on the project;
(4) Providing a non-discriminatory work site. Participant shall ensure and maintain a work environment free of harassment, intimidation and coercion at all construction sites, offices and other facilities at which the Participant’s employees are assigned to work. The Participant shall specifically ensure that all labor supervisors, superintendents, and other on-site supervisory personnel are aware of and carry out the Participant’s obligation to maintain a non-discriminatory work environment; or
(5) Reporting improper conduct. Participants shall report all known improper activity and all known violations of this Program.
D. Optional Good Faith Efforts. In addition to, but not in lieu of the above-mentioned good faith efforts and in addition to a Participant’s regular and customary solicitation process, a Participant may, at its option, also make a showing of good faith by providing evidence that it performed the following tasks:
(1) Soliciting specific individual LSBEs whose availability as potential sources of goods or services can be reasonably ascertained. This measure includes sending letters or making other personal contacts with specific certified LSBEs including those that the Participant has contracted with in the past as well as other LSBEs that the Participant may be unfamiliar, but whose identities can be ascertained from a directory of certified LSBEs maintained by the DMSBA.
(2) Sending letters or making other personal contacts with other programs as well as private trade associations in Nashville which are known to publicize contracting and procurement opportunities for the benefit of their respective associates and/or members.
(3) Advertising in trade publications of general circulation in Nashville. The advertisement shall identify and describe the specific subcontracting or other opportunity in reasonable detail.
(4) Following up on initial solicitations by contacting potential subcontractors or vendors to determine, with certainty, whether these firms are interested in participating on the contract.
(5) Thoroughly investigating the potential subcontractor or vendor’s capabilities in good faith.
(6) Providing reasonable assistance to a LSBE in need of equipment, supplies, bonding, letters of credit and/or insurance.
(7) Providing reasonable technical assistance to LSBEs to ameliorate any deficiencies of technical knowledge or advance skill, where such assistance is undertaken by the Participant to facilitate the LSBE’s successful participation on a project or contract.
E. Evaluation of Good Faith Efforts. In order to assure that Participants comply with the Program, all Participants must demonstrate good faith efforts. In evaluating good faith efforts, the DMSBA will determine whether the apparent low Participant has made reasonable good faith efforts to obtain LSBE participation as part of its proposal. The DMSBA may evaluate not only the different kinds of efforts made by a Participant, but also the quantity and intensity of those efforts.
The DMSBA will accept the Good Faith Efforts Checklist in the form adopted by the DMSBA as evidence of a Participant’s good faith in trying to obtain LSBE participation. The Participant may also submit any additional documentation demonstrating good faith efforts.
F. Required Documentation. To demonstrate good faith efforts, Participants shall keep detailed records of all correspondence and responses thereto, logs of all telephone calls made and received regarding the project or contract, copies of advertisements in publications and other media, and other relevant papers required by this Program. Such documents shall be maintained for a minimum of five (5) years.
G. Contractors’ Post-Award Reporting. Successful Participants who are awarded contracts must submit reports at the end of the project if requested by the DMSBA. These reports shall summarize the number and dollar amounts of payments made during the term of the contract to all subcontractors and shall reflect the LSBE designation of the subcontractor if any.
4.46.080 Division of Minority Business Assistance.
A. The Purchasing Agent, by and through the Metropolitan Finance Division of Minority and Small Business Assistance (“DMSBA”), shall administer and enforce the Program.
B. The DMSBA shall continue to encourage equal business opportunities and to achieve the policies and objectives of the Program by:
(1) Establishing written rules, regulations and procedures consistent with this Program;
(2) Publishing and making public said rules, regulations and procedures at least thirty (30) days prior to consideration by the Board;
(3) Verifying certification of LSBEs;
(4) Maintaining outreach and assistance programs to promote equal contracting opportunities for small businesses that wish to do business with the Metropolitan Government;
(5) Maintaining a current database of certified and available LSBEs and making this database accessible to interested parties;
(6) Monitoring, for data gathering and informational purposes, utilization of LSBE participation on projects;
(7) Assessing the reasonableness of LSBE Benchmark ranges (and/or goals, if established), and make recommendations to the Metropolitan Council regarding the same;
(8) Attending conferences regarding the contract;
(9) Investigating written complaints;
(10) Notifying affected parties in writing as to the right to review an adverse decision of the DMSBA;
(11) Preparing semiannual and annual reports; and
(12) Performing other tasks as may be required to fulfill the above-stated duties of the DMSBA.
C. DMSBA Authorization to Monitor. The DMSBA shall be authorized to collect from all Participants such data and information as is necessary to monitor this Program. This information may include information as to business ownership, supplier information, subcontractor information, all of which shall reflect the race, gender, ethnic origin, business location and business size of the identified businesses.
The DMSBA shall continuously monitor the participation of LSBEs in the procurement of goods and services for Metropolitan Government. Such monitoring shall include, but is not necessarily limited to, a statistical analysis of each construction trade, non-professional service, professional service and commodity to determine whether there is utilization of LSBEs in a manner that is proportionate to the identified availability range. The DMSBA will provide written reports to the Board semiannually.
D. Duty to Report. The Board shall submit an annual report to the Metropolitan Council regarding the effectiveness of the Program. Such report shall include, but not be limited to, a summary of the purchases and contracts placed with LSBEs for the period and the relative percentage to the total of purchases and contracts for that period. The reports shall also emphasize quantity and quality of LSBE involvement by dollar volume. The report shall specify the race, gender, national origin, size, and NAICS (or other applicable industry code utilized by the Metropolitan Government) with each category reported separately. Payments made to non-certified LSBEs shall be included as a separate set of figures for purposes of tabulating the total contract dollars going to LSBEs.
E. Contractors’ Closeout Activity Reports: To further monitor LSBE participation, closeout activity reports will be required from project prime contractors and prime consultants identifying activities of all subcontractors and sub-consultants. Interim reports will not be required unless requested by the DMSBA.
F. Authority to Investigate Discriminatory Practices. Should a Participant submit a written complaint of discrimination, the DMSBA shall be authorized to investigate the complaint. An investigation cannot be initiated solely based on a finding of a statistical disparity in the Participant’s utilization of LSBEs. Further, such investigations may be initiated when the DMSBA receives information which provides a reasonable basis to believe that an individual contractor seeking to contract or contracting with Metropolitan Government may be engaging in public or private discriminatory conduct.
4.46.090 Written Complaint and Post-Award Review.
A. Any Participant or other party allegedly aggrieved by the provisions of this Program may submit a written complaint to the Metropolitan Government Procurement Standards Board (“the Board”).
B. Consideration of Proposals. The DMSBA shall evaluate the apparent low Participant’s good faith efforts to determine non-discrimination as described in the Program. Upon a determination of compliance by the apparent low Participant, the DMSBA shall forward the Proposal to the Purchasing Agent as the recommended low Proposal. If there is an issue of non-compliance within the meaning of this Program, or for any other written complaint alleging any violations or non-compliance with this Program, the DMSBA shall notify the affected party in writing and by registered mail (“Notice of Non-Compliance Review”). The Notice of Non-Compliance Review shall set forth with particularity the reasons for the review and shall schedule a Post-Award Review Conference.
(1) Post-Award Review Conference: A Post-Award Review Conference shall be held with the DMSBA, the apparent low Participant, and if applicable, the project manager.
(2) Declaration of Non-Responsiveness: Upon a Declaration of Non-Responsiveness, the DMSBA shall forward a Notice of Determination to the allegedly aggrieved party and the Board.
C. Time for Filing Notice of Request for Review. Any party may seek review of an DMSBA determination by filing a written Notice of Request for Review with the DMSBA within seven (7) days of receipt of the Notice of Determination.
D. Notice of Hearing. Upon receipt of the Notice of Request for Review from the allegedly aggrieved party, the DMSBA shall forward the Notice to the Appeals Board within three (3) business days of receipt.
(i) Within ten (10) days of the date of receipt of the Notice of Request for Review from the DMSBA, the Appeals Board shall set the matter for hearing, which shall be held not more than twenty (20) days from the date the Board received the Notice of Request for Review.
(ii) The Appeals Board shall issue a written Notice of Hearing to be served upon all parties by registered mail, which shall state the date, time and place of hearing.
E. Hearing. Hearings before the Appeals Board shall be informal. Participants shall include a representative from the DMSBA and the allegedly aggrieved person or a representative of the allegedly aggrieved person. Said hearing shall comply with State of Tennessee law relative to the Open Meetings Act.
(1) Contract Advisory Review Panel: The Review Panel shall have authority to render advisory recommendations to the Appeals Board. The Review Panel shall consist of the following: (a) one representative of the local chapter of Associated Builders and Contractors or the Association of General Contractors; (b) one representative of the Middle Tennessee Diversity Contractors’ Association; and (c) one representative of the Board. Each association shall have only one representative on the panel in a term and shall rotate its position with the corresponding association listed above on a yearly basis.
(2) Term of Service: Each representative on the Review Panel shall serve a term of one year. This term shall expire upon submission of a formal request by the sponsoring trade organization or agency. This request shall detail that a vacancy has been created by the representative’s death, resignation, or inability to perform the duties of the office due to any other good or just cause and shall nominate a successor. In such event, the recommended successor representative shall be nominated, upon recommendation of the applicable sponsoring entity, and appointed to the Review Panel by the Appeals Board.
(3) Active Participation: In order to maintain a representative on the Review Panel, all sponsoring trade entities shall have members who have actively participated in the Program within the preceding year.
(4) Advisory Status: In addition to the above-named organizations represented on the Review Panel, advisory status shall be extended to any trade organization representing at least ten (10) members, of which half actively engage in contracting with the Metropolitan Government, and which submits an application to the Board for representation on the Review Panel.
F. Decision. The Review Panel shall issue an advisory recommendation at the conclusion of the hearing which may approve or disapprove the Declaration of Non-Responsiveness. The recommendation of the Review Panel shall be forwarded for action to theAppeals Board within five (5) business days.
G. Review Before Full Board. If the Appeals Board affirms the Declaration of Non-Responsiveness, the DMSBA shall then recognize the second low Participant as the recommended low Participant for the contract, provided the second low Participant has complied with this Program and submitted a responsive Proposal.
H. Exhaustion of Legal Remedies. An aggrieved person or entity must comply with the review process as outlined herein. Once a person or entity has exhausted the administrative remedies outlined in the Program, that person or entity may seek any other statutory, legal or equitable remedies that may be available. Failure to exhaust all administrative remedies listed above is an affirmative defense to any statutory, legal or equitable proceeding that may arise.
4.46.100 Sanctions and Penalties for Non-Compliance.
A. The Purchasing Agent shall have the authority and power to enforce the provisions of this Program. Failure of a Participant to comply with the requirements shall subject it to administrative sanctions. In addition, a violation of this Program shall constitute a material breach of contract enforceable at law or in equity as will all other contract provisions, including the imposition of penalties.
B. The following sanctions and penalties are established for the enforcement of this Program:
(1) Declaration of Non-Responsiveness: In addition to standard factors in its evaluation, the Metropolitan Government may declare a Proposal non-responsive where it is determined that a Participant has not filed with Metropolitan Government a duly executed “Promise of Non-Discrimination.”
(2) Cancellation of Contract: The Metropolitan Government may declare a contract null and void where, after such contract has been awarded, an investigation determines that the Participant’s documents contain false, fictitious, or fraudulent information.
(3) Rejection of Future Proposals: The Metropolitan Government may reject any or all future Proposals of a Participant until such time as the Participant demonstrates that it is or shall come into compliance.
(4) Limited Suspension: For falsifications, misrepresentations, or deception to obtain a contract, the Metropolitan Government may remove a Participant from its list of pre-qualified or otherwise eligible firms entitled to do business with the Metropolitan Government for a period not to exceed one (1) year.
(5) The Metropolitan Government may withhold payment, if the Participant receives notice and opportunity for a due process hearing.
(6) Permanent Debarment: For repeated violations, the Metropolitan Government may remove a Participant from its list of firms entitled to do business with the Metropolitan Government.
C. Sanctions shall not be imposed unless there is evidence of specific conduct on the part of Participant that is inconsistent with or in direct contravention of the applicable provisions of this Program. Furthermore, the imposition and enforcement of sanctions shall be consistent with applicable state and federal law.
D. Severity of Sanctions. In determining the length of any suspension, the Purchasing Agent shall consider the following factors:
(1) whether the failure to comply with applicable requirements involved intentional conduct or, alternatively, may be reasonably concluded to have resulted from a misunderstanding on the part of the Participant of the duties imposed on them by this Program;
(2) the number of specific incidences of failure by the Participant to comply;
(3) whether the Participant has been previously suspended;
(4) whether the Participant has failed or refused to provide the DMSBA or the Board with any information required or requested by this Program;
(5) whether the Participant has materially misrepresented any applicable facts in any filing or communication to the DMSBA; and
(6) whether any subsequent restructuring of the subject business or other action has been undertaken to cure the deficiencies in meeting applicable requirements.
E. Length of Suspension. Suspensions may be for any length of time not to exceed one (1) year. Suspensions in excess of one year may be imposed only in cases involving intentional or fraudulent misrepresentation or concealment of material facts, multiple acts in breach of the Program, cases where the Participant has been previously suspended, or other similarly egregious conduct.
A. Definition and Purpose. Goals are race/gender-conscious measures established in the event that the periodic review of the Metropolitan Government procurement practices reveal a continuing pattern of underutilization of and discrimination against LSBEs by the Metropolitan Government. Goals shall only be implemented in the event that the Metropolitan Government has exhausted all race/gender-neutral remedies and continues to fall below the identified benchmarks in contracting.
In the event the DMSBA semiannual review shows continuing underutilization of LSBEs, the DMSBA may implement goals for selected contracts in identified subcategories if it can demonstrate a compelling interest to support such an imposition. Prior to adoption of any goals, the DMSBA will hold a ten (10) day comment period to receive written comments from any interested individual or entity regarding implementation of a race/gender-conscious program.
B. Goals in Bids/Proposals. Should the DMSBA determine that goals need to be imposed, the inclusion or underutilization of LSBEs in specific industry subcategory may be considered as an additional factor in the evaluation of a Proposal.
The DMSBA and the Board may consider the following types of participation toward achievement of a goal:
1) The total dollar value of the contract may be counted toward the specified goal. This includes the fees and commissions charged for professional services, legal counsel, manufacturers, financial consultants, and insurance agents.
2) Participation by LSBE females may be counted only toward the accomplishment of the specified goals for women-owned businesses.
3) The actual portion of LSBE participation in a joint venture is counted toward the goal.
C. LSBE Participation in Meeting Goals. In the event that goals are established, all Participants, including LSBE Participants, shall make good faith efforts to attain goals through all subcontractor work.
(1) Prime Contractors: A Participant may subcontract portions of its contract consistent with industry standards. However, should a prime contractor subcontract greater portions of the project than are consistent with industry standards, then the LSBE will not have performed a commercially useful function as defined herein. Therefore, such participation by a LSBE will not be counted towards any goal.
(2) Subcontractor Participation: Where a Participant utilizes one or more subcontractors or sub-subcontractors to attain any goal(s) for an underutilized subcategory, the prime contractor may count said subcontractor or sub-subcontractor work toward goals. In no way shall subcontractors’ or sub-subcontractors’ work or dollar amount be construed to count toward said goal more than once. Only expenditures to LSBE subcontractors that perform a commercially useful function in the work of the project or contract may be counted.
(3) Supplier Participation: Where a Participant utilizes suppliers to satisfy the goal(s) in whole or in part, the LSBE suppliers must perform a commercially useful function. Supplier participation may be approved upon review of the following factors:
(a) the nature and amount of supplies to be furnished;
(b) whether the LSBE is a manufacturer, wholesaler or distributor of the supplies and has the capabilities to deliver same in accordance with its certification;
(c) whether the LSBE actually performs, manages and supervises the work to furnish the supplies; and
(d) whether the LSBE intends to purchase supplies from a non-LSBE and simply resell same to the general or prime contractor for allowing those supplies to be counted towards fulfillment of the goal(s).
(4) Joint Venture Participation: Where Participants engage in a joint venture to meet a goal, the prime contractor shall demonstrate that the LSBE joint venturer’s participation meets the standards for a commercially useful function. The DMSBA shall review and approve all contractual agreements and other supporting documentation to determine the percentage of LSBE participation resulting from the joint venture which may be credited towards any applicable goals of the project; and shall determine same based on the following factors:
(a) the initial capital investment of each venture partner;
(b) the proportional allocation of profits and losses to each venture partner;
(c) the sharing of the right to control the ownership and management of the joint venture;
(d) actual participation of the venture partners in the performance of work under the project or contract; and
(e) other pertinent factors of the joint venture.
The degree to which any goals have been attained by joint ventures between LSBE firms, and between LSBE and non-LSBE firms, shall be calculated as follows:
(a) A joint venture consisting of a LSBE and non-LSBE firm functioning as a prime contractor will be credited with LSBE participation based on the percentage of the dollar amount of the work to be performed by the LSBE.
(b) In joint venture Proposals in which all joint venture Participants are LSBEs, the joint venture will be credited with LSBE participation for that portion of the dollar amount of the contract which LSBEs perform and that portion subcontracted to LSBE firms.
(c) In joint venture Proposals, Participants will receive credit toward the goal for the dollar amount purchased from LSBE suppliers. However, where the supplier is the manufacturer of the product supplied, Participants will receive credit for 100% of the dollar amount of the supply contract.
D. Program Graduation. Graduation from the Program applies only to goals should they be implemented. A participating LSBE shall graduate from this Program upon achieving certain levels of average annual receipts or other indicia of growth in its respective industry as specified below and shall be presumed to have reached a competitive status in the marketplace:
(1) Where federal or state income tax returns evidence that the firm has earned average annual receipts for two consecutive years that are in excess of the average annual receipts of a Small Business Enterprise; or
(2) Where, by virtue of its size, a firm exceeds the definition and standards of a “small business enterprise” as herein defined; or
(3) Where a firm’s primary industry classification falls within an industry subcategory in which the Benchmarks for that subcategory have been achieved consistently for the past three (3) fiscal years, and that firm has meaningfully participated in Metropolitan Government contracting and procurement, as determined by a designated amount of purchasing dollars going to that firm during that period.
If a LSBE is engaged in more than one industry, then its graduation levels shall be determined by a weighted average of sales for all industries in which the LSBE is engaged.
E. Re-entry After Graduation. Upon achieving of the above-described status, said firms shall be deemed to have graduated from the Program and shall thereafter be ineligible for LSBE status. Generally, a graduated LSBE may not subsequently re-enter the Program. However, after graduation, a LSBE may re-enter the Program after two (2) years if the firm demonstrates:
(1) That its average annual receipts have declined to levels below those as identified above, and
(2) That during said two (2) calendar years, it was unable to meaningfully participate in Metropolitan Government contracting/procurement and/or in the public and private sectors of the largest local economy despite its good faith efforts to do so.
F. Training. The Metropolitan Government remains committed to implementing a procurement program that maximizes the participation of small businesses in Davidson County and including LSBEs in Metropolitan Government procurement opportunities. To ensure that all Metropolitan Government employees involved in purchasing decisions are appropriately informed, certain personnel will undergo training to increase sensitivity regarding utilization of LSBEs. Internal training shall ensure that all staff with purchasing authority has the capacity and capability to engage in a consistent, fair and open acquisition process. Training sessions shall occur at least once a year.
The training will focus on two areas: 1) program requirements and procedures associated with the Metropolitan Government Commercial Nondiscrimination Program; and 2) other training experiences.
(1) Program Requirements and Procedure Training: The objective of this training is to effectively communicate the importance of the Program and mechanics of how the Program operates. The training shall address the following topics, among others:
(a) Understanding the benefits of doing business with LSBEs.
(b) Understanding the purpose of the Program.
(c) Understanding how the Program is administered.
(d) Developing innovative techniques to achieve LSBE participation in a race/gender-neutral environment.
(2) Other Training Experiences: The Metropolitan Government’s personnel shall, in addition to other unique opportunities that will be explored over time:
(a) Attend various business trade association meetings for LSBEs and non-LSBEs.
(b) Annually, or semi-annually, conduct in-house seminars/workshops on “how to do business” with the Metropolitan Government.
(c) Tour the facilities and visit with owners of successful LSBE and non-LSBE businesses. The business may be either current or potential vendors of the Metropolitan Government.
(d) Host vendor fairs for LSBE and non-LSBE providers of select products and services. This will provide division personnel an opportunity to meet and interact with community businesses that may contract with the Metropolitan Government in the future.
G. BONDING ISSUES. Bonds are usually required on large projects. The ability to qualify for bonds is often a problem for LSBEs. Therefore, these firms often miss out on substantial business opportunities. As an initiative to enhance LSBE participation, the Board is investigating the possibility of implementing a bonding assistance program. Bonding assistance is not currently available through the Metropolitan Government.
(1) Bond: A bond is required in the amount of five percent (5%) for all construction projects over $100,000.00. For projects under $100,000.00, bond requirements are set at the discretion of the Board.
(2) Bonding Assistance: The DMSBA shall work closely with local governmental entities in providing: i) individualized counseling; ii) conducting seminars and workshops relating to bonding; iii) alternate forms of bonding such as the use of bank certificates of deposits; and iv) advice and information to the construction program management division or the appropriate user department as to the level of bonding generally available to subcontractors, so that such information may be considered in determining the process of reducing such projects to a size that small business concerns may successfully participate.
(3) Additional Bonding Assistance: IN addition, the Purchasing Agent, in conjunction with the DMSBA, shall develop rules and regulations to implement a policy minimizing the adverse impact of the Metropolitan Government bonding requirements including:
(a) Waiving payment and performance bond requirements on service contracts. Upon review and approval by the Board (or its designee), the Purchasing Agent may recommend such waivers based on the dollar amount of the contract, the potential exposure to liability and other pertinent criteria.
(b) Increasing bond waiver limit on construction projects to maximum amount allowable under law.
(c) Encouraging prime contractors to extend practices to all, such as:
(i) accepting increment bonding for subcontractors;
(ii) accepting the maximum bond that the subcontractor can provide for the job, in circumstances where the subcontractor cannot provide a bond to cover the total amount of the subcontract; and
(iii) waiving bonding requirements for subcontractors where feasible.
H. Prompt Payment Program. All Participants are required to pay subcontractors a minimum of their pro-rata share of progress payments made by Metropolitan Government to the prime contractor. The pro-rata share will be based on all work completed and materials furnished by the subcontractor in the period for which the progress payment was made. The contracts will also require the prime contractor certify that the previous progress payments have been paid to all subcontractors, unless the contractor demonstrates good cause, as determined by the DMSBA, for not making any such payments and furnishes written notification of this cause to the DMSBA and the subcontractor involved.
Any payment not made in accordance with this provision shall accrue interest, from the date due until the date paid, at the rate of interest identified in a written agreement. If no interest rate is specified, the interest rate shall be set in accordance with the Tennessee Prompt Pay Act, Tennessee Code Annotated §66-34-101. Any vendor not receiving prompt payment should notify the DMSBA for resolution. This section is not applicable if failure to promptly pay the subcontractor is the result of a dispute between the contractor and the subcontractor over the amount due or compliance with the contract.
I. Mobilization Fee. For good cause shown, the Purchasing Agent may evaluate, on an individual basis, a mobilization fee to assist LSBEs in financing. The purpose of this fee is to assist LSBEs with initial project costs, such as personnel, supplies and equipment.
For consideration under this provision, each LSBE must apply for the Program, be certified, meet the requirements outlined in the Program, and indicate a financial need for such assistance.
The amount of the fee received by the contractors and professional service providers would be based on the list of documented needs in the contract. The mobilization fee would not affect the pay application procedures between Metropolitan Government and the prime contractor until the final pay application where credit would be given for the mobilization fee. The prime contractor would not be financially responsible or liable for mobilization fees advanced to its subcontractors by Metropolitan Government. The subcontractor would credit the mobilization fee on its final application for payment to the prime contractor. The awarding of any mobilization fee would be considered payment for services rendered and would be deducted from the final payment of the contract as a payment for services. The award of any mobilization fee shall not have any impact on the terms and conditions of the project contract documents except as provided herein.
J. Outreach Program. To ensure that opportunities to participate in Metropolitan Government contract are available to the widest feasible universe of willing, available and qualified businesses, the DMSBA shall develop and engage in outreach designed to increase public awareness of the Program. This outreach may consist of any of the following:
(1) Public Awareness of the Program. To increase the visibility of the DMSBA and to increase the awareness of the Program, the DMSBA shall disseminate at community events, trade shows, and other appropriate business functions, and publish at regular intervals information describing the Program. This information shall also identify ongoing contracting opportunities.
(2) Outreach to LSBEs. The DMSBA shall assist LSBEs in obtaining certification by disseminating information, providing individualized counseling, and/or conducting seminars regarding the certification process.
4.46.120 Mentor-Protégé Program.
The DMSBA shall encourage all contractors and subcontractors to participate in a Mentor/Protégé program on a voluntary basis. As such, any interested contractor or subcontractor may submit with their Proposals a completed Mentor/Protégé Promise demonstrating that such a relationship has been formed. The DMSBA shall make available a database of potential Mentor and Protégé firms. Participation in this program is strictly voluntary. No contractor or vendor shall be penalized or preferred based upon participation or non-participation in the program.
The objective of this voluntary program is to enhance the potential of all LSBEs by building business capability to expand contracting opportunities within an agreed framework of conditions. The Program is designed to integrate on-the-job training for all emerging businesses and would allow a prime contractor to offer assistance on a limited term agreement, generally one project.
All administrative functions should be performed by the Protégé personnel. The Protégé is expected to maintain final decision-making responsibilities regarding the scope of its work.
4.46.130 Geographic Scope
The provisions of this Program shall apply to businesses that maintain a significant business presence in Davidson County. Participants outside Davidson County must also adhere to the provisions of this Program. All LSBEs must maintain a significant business presence within Davidson County.
If any of the provisions set forth in this Program or any section, subsection, paragraph, sentence, clause, phrase, or word thereof shall be found to be invalid, illegal or unenforceable for any reason, the application of the remainder of this Program shall not be affected by such invalidity.
4.46.150 Sunset Provision
The race/gender-conscious elements of this Program, if implemented, shall expire five (5) years from the date of implementation. However, all elements of this Program may be extended if the Board, after review and consideration of all Annual Reports as provided herein, completion of a follow-up Disparity Study, assessment of other relevant information, and public hearing testimony, finds that there is a continuing need for this Program.
Section 2. This Ordinance shall take effect from and after its passage, the welfare of The Metropolitan Government of Nashville and Davidson County requiring it.
Sponsored by: Ludye Wallace,Jamie Isabel, Brenda Gilmore, Vivian Wilhoite
Attachment(s) on file in the Metropolitan Clerk's Office
|Introduced:||July 3, 2007|
|Passed First Reading:||July 3, 2007|
|Referred to:||Budget & Finance Committee|
|Substitute Introduced:||July 17, 2007|
|Deferred:||July 17, 2007|
|Second Substitute Introduced:||August 7, 2007|
|Passed Second Reading:||August 7, 2007|
|Deferred:||August 21, 2007|
|Withdrawn:||August 21, 2007|