District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill B25-0701 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1	MURIEL BOWSER
2	2	MAYOR
3	3	February 27, 2024
4	4	The Honorable Phil Mendelson, Chairman
5	5	Council
6	6	of the District of Columbia
7	7	John
8	8	A. Wilson Building
9	9	1350 Pennsylvania Avenue, NW
10	10	Washington, DC 20004
11	11	Dear Chairman Mendelson:
12	12	Enclosed for consideration by the Council is the "Certified Business Enterprise Program
13	13	Compliance and Enforcement Support Emergency Declaration Resolution
14	14	of 2024", the
15	15	"Certified Business Enterprise Program Compliance and Enforcement Support Emergency
16	16	Amendment Act
17	17	of 2024" and the "Certified Business Enterprise Program Compliance and
18	18	Enforcement Support Temporary Amendment Act
19	19	of 2024."
20	20	The resolution and accompanying emergency and temporary bills close gaps in the District's
21	21	Certified Business Enterprise (CBE) Program
22	22	by making critical amendments to sections 2302,
23	23	2346, and 2363
24	24	of the Small and Certified Business Enterprise Development and Assistance Act
25	25	of 2005 ("the Act").
26	26	More specifically, these amendments will: (1) establish uniform hearing procedures for all
27	27	departmental enforcement actions before OAH; (2) expand the scope
28	28	of DSLBD's complaint
29	29	hotline for the public reporting
30	30	of issues beyond allegations of potential certified business
31	31	enterprise program fraud; (3) add penalties for any person that violates section 2363
32	32	of the Act;
33	33	( 4) increase the penalty for beneficiaries who fail
34	34	to show commercially reasonable best efforts
35	35	to meet required CBE subcontracting requirements; (5) establish minimwn periods
36	36	of
37	37	departmental suspensions and revocations for violations under the Act; and ( 6) expand the
38	38	statutory definition
39	39	of "beneficiary" to include non-profit entities, ensuring that all prime
40	40	contractors on government-assisted projects are subject
41	41	to the Act's CBE subcontracting and
42	42	reporting requirements.
43	43	These necessary, time-sensitive changes will allow the District to more effectively and
44	44	efficiently enforce the District's CBE compliance requirements.
45	45	I urge the Council
46	46	to take prompt and favorable action on the enclosed legislation. 1
47	47	2
48	48	3
49	49	4 ~~
50	50	A BILL
51	51	Chairman Phil Mendelson
52	52	at the request
53	53	of the Mayor
54	54	5
55	55	6
56	56	7
57	57	8 IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
58	58	9
59	59	10
60	60	11 To amend, on an emergency basis, the Small and Certified Business Enterprise Development and
61	61	12 Assistance Act of 2005 to establish uniform hearing procedures for enforcement actions
62	62	13 under the act, to expand the scope of the Department of Small and Local Business
63	63	14 Development's complaint hotline, to add penalties for any business enterprise that
64	64	15 violates section 2363 of the act, to increase the penalty for beneficiaries who fail to show
65	65	16 commercially reasonable best efforts to meet required certified business enterprise
66	66	17 subcontracting requirements, to include non-profit entities as beneficiaries subject to
67	67	18 certified business enterprise subcontracting and reporting requirements, and to establish
68	68	19 minimum and maximum periods of revocations for violations under the act.
69	69	20
70	70	21 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this
71	71	22 act may be cited
72	72	as the "Certified Business Enterprise Program Compliance and Enforcement
73	73	23 Support Emergency Amendment Act of 2024".
74	74	24 Sec.
75	75	2. The Small and Certified Business Enterprise Development and Assistance Act of
76	76	25 2005, effective October 20, 2005 (D.C. Law 16-33; D.C. Official Code§ 2-218. 01 et seq.), is
77	77	26 amended as follows:
78	78	27 (a) Section 2302 (D.C. Official
79	79	Code§ 2-218.02) is amended as follows:
80	80	28 (1) Paragraph
81	81	(lB) is amended to read as follows:
82	82	29 " (lB) "Beneficiary" means a business enterprise, not-for-profit business, or other
83	83	30 person that
84	84	is the prime contractor or developer on a government-assisted project.".
85	85	31 (2) A new paragraph (9A) is added to read as follows: “(9A) “Formal complaint” means a complaint that is submitted to the Department 32
86	86	in writing, sworn to by the complainant, and notarized.”. 33
87	87	(3) A new paragraph (10A) is added to read as follows: 34
88	88	“(10A) “Informal complaint” means a complaint other than a formal complaint 35
89	89	and includes complaints submitted in person, by email, by tele phone, or through the 36
90	90	Department’s complaint hotline.”. 37
91	91	(4) Paragraph (13B) is redesignated as paragraph (13D). 38
92	92	(5) New paragraphs (13B) and (13C ) are added to read as follows: 39
93	93	“(13B) “Person” means any individual, firm, partnership, joint venture, general 40
94	94	partner of a partnership, limited liability company, registered limited liability partnership, foreign 41
95	95	limited liability partnership, association, corporation, unincorporated business, company, 42
96	96	syndicate, estate, trust, business trust, trustee, trustee in bankruptcy, receiver, executor, 43
97	97	administrator, assignee, fiduciary, or entity of any kind. 44
98	98	“(13C) “Principal office” means the location where the central operational, 45
99	99	financial, and recordkeeping functions of the business occur.”. 46
100	100	(b) Section 2363 (D.C. Official Code § 2- 218.63) is amended as follows: 47
101	101	(1) Subsection (a) is amended as follows: 48
102	102	(A) Paragraph (3) is amended as follows: 49
103	103	(i) Subparagraph (B) is amended by striking the word “city” and 50
104	104	inserting the phrase “District government” in its place. 51
105	105	(ii) Subparagraph (C) is amended as follows: 52
106	106	(I) Sub-subparagraph (i ii) is amended by striking the word 53
107	107	“Made” and inserting the phrase “Willfully made” in its place. 54 (II) Sub-subparagraph (iv) is amended to read as follows: 55
108	108	“(iv) Used a document that the person knows to contain a false 56
109	109	statement or entry; or”. 57
110	110	(III) A new sub -subparagraph (v) is added to read as 58
111	111	follows: 59
112	112	“(v) Willfully omitted a material fact in a submission to the 60
113	113	Department.”. 61
114	114	(iii) Subparagraph (H) is amended to read as follows: 62
115	115	“(H) Substantially failed to operate and manage a certified joint venture in 63
116	116	accordance with section 2339; provided, that: 64
117	117	“(i) There shall be a rebuttable presumption that the failure to 65
118	118	operate and manage the joint venture in accordance with the joint venture application was the 66
119	119	parties’ intent; and 67
120	120	“(ii) If the joint venture demonstrates that the failure to operate and 68
121	121	manage the joint venture in accordance with the joint venture application was necessary due to 69
122	122	unforeseen business or operational issues, the failure shall not be a violation of this act.”. 70
123	123	(iv) Subparagraph (I) is amended by striking the word “submits” 71
124	124	and inserting the word “submitted” in its place. 72
125	125	(v) Subparagraph (J) is amended by striking the period at the end 73
126	126	and inserting the phrase “; or” in its place. 74
127	127	(B) A new paragraph (4) is added to read as follows: 75
128	128	“(4) A business enterprise: 76 “(A) Willfully obstructed or impeded, or attempted to obstruct or impede, 77
129	129	a District government official or employee investigating the qualifications of a business 78
130	130	enterprise that has requested certification; or 79
131	131	“(B) In any certified business enterprise matter administered under this 80
132	132	act: 81
133	133	“(i) Fraudulently obtained, attempted to obtain, or aided another 82
134	134	person in fraudulently obtaining or attempting to obtain, public moneys to which the person is 83
135	135	not entitled; 84
136	136	“(ii) Willfully falsified, concealed, or covered up a material fact by 85
137	137	any scheme or device; 86
138	138	“(iii) Willfully made a materially false statement or representation; 87
139	139	“(iv) Used a document that the business enterprise knows to 88
140	140	contain a false statement or entry; or 89
141	141	“(v) Willfully omitted a material fact in a submission to the 90
142	142	Department.”. 91
143	143	(2) Subsection (b) is amended by striking the phrase “an individual or business” 92
144	144	and inserting the phrase “a person” in its place. 93
145	145	(3) Subsection (c) is amended as follows: 94
146	146	(A) The lead-in language is amended to read as follows: 95
147	147	“(c) If the Department determines, in accordance with procedures set forth in subsection 96
148	148	(g) of this section, that a person:”. 97
149	149	(B) Paragraph (1)(C) is amended as follows: 98
150	150	(i) Sub-subparagraph (i) is amended to read as follows: 99 “(i) Assess a civil penalty of not more than $25,000 for the third 100
151	151	and any subsequent offense.”. 101
152	152	(ii) Sub-subparagraph (ii) is repealed. 102
153	153	(C) Paragraph (2) is amended to read as follows: 103
154	154	“(2) Has committed a violation of subsection (a)(2) or (a)(3) of this section and is 104
155	155	a certified business enterprise or certified joint venture, the Department shall suspend or revoke 105
156	156	its certification;”. 106
157	157	(D) Paragraph (3) is repealed. 107
158	158	(E) Paragraph (4) is amended as follows: 108
159	159	(i) Strike the word “reasonably” and insert the word “reasonable” 109
160	160	in its place. 110
161	161	(ii) Strike the phrase “10% of the dollar volume of the contract that 111
162	162	the beneficiary or certified joint venture was required but failed to subcontract.” and insert the 112
163	163	phrase “the difference between the dollar volume the beneficiary or certified joint venture was 113
164	164	required to subcontract to certified business enterprises under section 2346 and the actual dollar 114
165	165	volume subcontracted to certified business enterprises.” in its place. 115
166	166	(iii) Strike the phrase “; and” and insert a semicolon in its place. 116
167	167	(F) Paragraph (5) is amended by striking the period at the end and 117
168	168	inserting the phrase “; and” in its place. 118
169	169	(G) A new paragraph (6) is added to read as follows: 119
170	170	“(6) Ceases to meet the requirements of a particular category of certification and 120
171	171	is a certified business enterprise, the Department may change the business enterprise’s certificate 121
172	172	of registration by removing the category of certification for which the business enterprise no 122 longer meets the requirements of certification; provided, that this paragraph shall not apply if a 123
173	173	certified business enterprise ceases to qualify as a local business enterprise.”. 124
174	174	(4) New subsections (d- 1) and (d-2) are added to read as follows: 125
175	175	“(d-1) The Department may refer matters to the Office of Contracting and Procurement, 126
176	176	including matters involving agencies not subject to the Office of Contracting and Procurement’s 127
177	177	authority pursuant to section 201(b) of the Procurement Practices Reform Act of 2010, effective 128
178	178	April 8, 2011 (D.C. Law 18- 371; D.C. Official Code § 2- 352.01(b)), for investigation. If the 129
179	179	Office of Contracting and Procurement through its hearing procedures determines that a 130
180	180	beneficiary, business enterprise, or certified joint venture has committed more than 2 violations 131
181	181	of subsection (a)(1) of this section, or any violations of subsections (a)(3) or (a)(4) of this 132
182	182	section, the beneficiary, business enterprise, or certified joint venture shall be: 133
183	183	“(1) Debarred from consideration of award of contracts or subcontracts with the 134
184	184	District government for a period of no more than 5 years; and 135
185	185	“(2) Deemed ineligible from consideration for government-assisted projects with 136
186	186	the District government for a period of no more than 5 years. 137
187	187	“(d-2) The Department may refer any suspected violation of subsection (a)(3) or (a)(4) of 138
188	188	this section to the Attorney General for the District of Columbia, who may bring a civil action in 139
189	189	the Superior Court of the District of Columbia against any person, including the directors or 140
190	190	officers of a business enterprise, alleged to have committed the violation. A person alleged to 141
191	191	have violated subsection (a)(3) or (a)(4) of this section shall be subject to civil penalties of 142
192	192	$100,000, or triple the profit earned by the person on all contracts awarded, whichever is greater. 143
193	193	If the Department does not refer the violation to the Attorney General or if the Attorney General 144 does not timely bring an action following a referral, the Department may assess a fine in 145
194	194	accordance with subsection (c) of this section.”. 146
195	195	(5) Subsection (e) is amended as follows: 147
196	196	(A) Paragraphs (1) through (3) are amended to read as follows: 148
197	197	“(1) Any person may file with the Department a formal or informal complaint 149
198	198	alleging a violation of this act. The Department shall maintain a hotline for the filing of informal 150
199	199	complaints. 151
200	200	“(2) The Department shall investigate each formal or informal complaint filed 152
201	201	with it, except as provided in paragraph (3) of this subsection. 153
202	202	“(3) The Department may dismiss a complaint without conducting an 154
203	203	investigation if the Department determines the complaint is f rivolous or otherwise without merit. 155
204	204	If the Department dismisses a formal complaint as frivolous or otherwise without merit, the 156
205	205	Department shall prepare a report documenting the following: 157
206	206	“(A) A statement detailing the formal complaint, including the name, 158
207	207	address, and telephone number of the person filing the complaint; 159
208	208	“(B) The name of the person or certified joint venture alleged to be in 160
209	209	violation of this act ; 161
210	210	“(C) The facts and law considered in rendering the determination; and 162
211	211	“(D) Any other information considered in rendering the determination.”. 163
212	212	(B) Paragraph (4) is repealed. 164
213	213	(C) New paragraphs (5) and (6) are added to read as follows: 165
214	214	“(5) After the completion of an investigation conducted pursuant to this 166
215	215	subsection, the Department shall take such enforcement action, if any, as it deems appropriate. 167 “(6) The Department shall maintain a record listing all formal complaints, which 168
216	216	shall contain the following information: 169
217	217	“(A) The name of the person alleged to be in violation of this act; 170
218	218	“(B) The date the formal complaint was made to the Department; and 171
219	219	“(C) A description of the formal complaint. ”. 172
220	220	(6) Subsection (f) is repealed. 173
221	221	(7) Subsection (g) is amended to read as follows: 174
222	222	“(g)(1) Except as provided in paragraph (8) of this subsection, before issuing a civil 175
223	223	penalty to, or denying, suspending, changing, or revoking a certification of, a person or a 176
224	224	certified joint venture, the Department shall issue a notice of determination to the person or 177
225	225	certified joint venture. The notice of determination shall describe the basis for the Department’s 178
226	226	determination; the proposed penalty , if any; and the process and timeline by which the person or 179
227	227	certified joint venture may request a hearing. 180
228	228	“(2) The person or designated representative on behalf of a certified joint venture 181
229	229	may request a hearing before the Office of Administrative Hearings, pursuant to paragraph (3) of 182
230	230	this subsection, within 10 calendar days after receiving the notice. If the person or certified joint 183
231	231	venture does not request a hearing within that time, the civil penalty, denial, suspension, change, 184
232	232	or revocation shall become final, and the person or certified joint venture shall be deemed to 185
233	233	have waived the opportunity for judicial review. 186
234	234	“(3) If a hearing is requested, the Office of Administrative Hearings shall consider 187
235	235	the matter pursuant to the provisions of the Office of Administrative Hearings Establishment Act 188
236	236	of 2001, effective March 6, 2002 (D.C. Law 14- 76; D.C. Official Code § 2 -1831.16.), and the 189 rules promulgated thereunder . The Department shall bear the burden of establishing the 190
237	237	violation by a preponderance of the evidence. 191
238	238	“(4) The decision of the Office of Administrative Hearings shall be the final 192
239	239	administrative decision for purpose of judicial review. 193
240	240	“(5) Notice of a final suspension or revocation of a certification shall be published 194
241	241	on the Department’s website. 195
242	242	“(6) A business enterprise or joint venture whose certification has been revoked 196
243	243	shall not be eligible to apply for a new certification from the Department until 36 months after 197
244	244	the date that the revocation became final. 198
245	245	“(7) The Department may at any time, upon motion by a business enterprise or 199
246	246	joint venture whose certification has been suspended or revoked, remove the suspension or 200
247	247	reissue a certification, if the Department determines that it is in the District government's interest 201
248	248	to remove the suspension or reissue the certification before the end of the 36-month period and 202
249	249	such removal or reissuance does not endanger the health, safety, or welfare of the general public. 203
250	250	In determining whether to remov e a suspension or reissuance a certification, the Department 204
251	251	shall consider in part whether the business enterprise or joint venture submitted satisfactory 205
252	252	proof that conditions within, or actions by, the business enterprise or joint venture that led to the 206
253	253	suspension or revocation have been corrected. A business enterprise or joint venture whose 207
254	254	certification is reissued shall cease to be subject to the 36-month waiting period established in 208
255	255	paragraph (5) of this subsection. 209
256	256	“(8) If, after an investigation, the Department determines that a business 210
257	257	enterprise or joint venture certified under this act has violated any provision of this act in such a 211
258	258	manner as to present an imminent danger to the health, safety, or welfare of any person or the 212 general public, the Department may summarily suspend the certification of the business 213
259	259	enterprise or joint venture upon issuing the notice of determination described in paragraph (1) of 214
260	260	this subsection. The notice of determination shall inform the business enterprise or joint venture 215
261	261	of the reason for the summary suspension and the right to request a hearing before the Office of 216
262	262	Administrative Hearings pursuant to paragraph (1) of this subsection. If a business enterprise or 217
263	263	joint venture timely requests a hearing on a summary suspension, the Office of Administrative 218
264	264	Hearings shall conduct the hearing within 14 days after receiving the request, unless a longer 219
265	265	period of time is agreed to by the business enterprise or joint venture, and shall issue a decision 220
266	266	within 14 days after the record for the hearing closes.”. 221
267	267	(c) Section 2375(c)(2) (D.C. Official Code § 2- 218.75(c)(2)) is amended by striking the 222
268	268	phrase “pursuant to section 2363(c)” and inserting the phrase “pursuant to section 2363(d- 2)” in 223
269	269	its place. 224
270	270	Sec. 3. Fiscal i mpact s tatement. 225
271	271	The Council adopts the fiscal impact statement in the committee report as the fiscal 226
272	272	impact statement required by section 4a of the General Legislative Procedures Act of 1975, 227
273	273	approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1- 301.47a). 228
274	274	Sec. 4. Effective date. 229
275	275	The act shall take effect following approval by the Mayor (or in the event of veto by the 230
276	276	Mayor, action by the Council to override the veto), a 30- day period of congressional review as 231
277	277	provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 232
278	278	24, 1973 (87 Stat. 813; D.C. Official Code § 1- 206.02(c)(1)), and publication in the District of 233
279	279	Columbia Register. 234 2
280	280	GOVERNMENT OF THE DISTRICT OF COLUMBIA
281	281	O
282	282	FFICE OF THE ATTORNEY GENERAL
283	283	BRIAN L. SCHWALB
284	284	ATTORNEY GENERAL
285	285	LEGAL COUNSEL DIVISION
286	286	MEMORANDUM
287	287	TO: T ommy Wells
288	288
289	289	Director
290	290	Office of Policy and Legislative Affairs
291	291	FROM: Megan D. Browder
292	292	Deputy Attorney General
293	293	Legal Counsel Division
294	294
295	295	DATE: September 5, 2023
296	296	SUBJECT: Legal Sufficiency Review – Draft “ Certified Business Enterprise Program
297	297	Compliance and Enforcement Support Emergency Amendment Act of 2023,”
298	298	“Certified Business Enterprise Program Compliance and Enforcement Support
299	299	Temporary Amendment Act of 2023,” and “Certified Business Enterprise Program
300	300	Compliance and Enforcement Support Emergency Declaration Resolution of 2023”
301	301
302	302	(AE-23-284)
303	303	_____________________________________________________________________________________
304	304	This is to Certify that this Office has reviewed the above- referenced draft
305	305	legislation and found it to be legally sufficient. If you have any questions in this regard, please do
306	306	not hesitate to call me at (202) 724-5524.
307	307	_________________________________ M
308	308	egan D. Browder