District Of Columbia 2023-2024 Regular Session

District Of Columbia Council Bill PR25-0142 Compare Versions

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

Old	New	Differences
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3	3	MURIELBOWSER
4	4	MAYOR
5	5	March8,2023
6	6	TheHonorablePhilMendelson,Chairman
7	7	CounciloftheDistrictofColumbia
8	8	JohnA.WilsonBuilding
9	9	1350PennsylvaniaAvenue,NW,Suite504
10	10	Washington,DC20004
11	11	DearChairmanMendelson:
12	12	EnclosedforconsiderationandapprovalbytheCounciloftheDistrictofColumbiaisthe
13	13	“SmallandLocalBusinessDevelopmentRulemakingApprovalResolutionof2023”,
14	14	ThisresolutionwouldapproveaproposedfinalrulemakingoftheDepartmentofSmalland
15	15	LocalBusinessDevelopmentamendingChapter8(Local,Small,andDisadvantagedBusiness
16	16	EnterprisesContracting)ofTitle27(ContractsandProcurement)oftheDistrictofColumbia
17	17	MunicipalRegulations,whichwouldreplaceregulationsoriginallyissuedin2009.
18	18	LurgetheCounciltotakepromptandfavorableactionontheenclosedresolution.
19	19	Sinceyely,
20	20	Muri¢lBower
21	21	Enclosure
22	22	ScarsH»saone
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46	46	ChairmanPhilMendelson
47	47	attherequestoftheMayor
48	48	APROPOSEDRESOLUTION
49	49	INTHECOUNCILOFTHEDISTRICTOFCOLUMBIA
50	50	ToapproveaproposedfinalrulemakingoftheDepartmentofSmallandLocalBusiness
51	51	DevelopmentamendingTitle27oftheDistrictofColumbiaMunicipalRegulations.
52	52	RESOLVED,BYTHECOUNCILOFTHEDISTRICTOFCOLUMBIA,Thatthis
53	53	resolutionmaybecitedasthe“SmallandLocalBusinessDevelopmentRulemakingApproval,
54	54	Resolutionof2023”
55	55	Sec.2.Pursuanttosection2372oftheSmallandCertifiedBusinessEnterprise
56	56	DevelopmentandAssistanceActof2005,effectiveOctober20,2005(D.C.Law16-33;D.C.
57	57	OfficialCode§2-218.72),theCouncilapprovestheproposedfinalrules,publishedat67DCR
58	58	8465,toamendTitle27oftheDistrictofColumbiaMunicipalRegulations.
59	59	Sec.3.Transmittal.
60	60	TheCouncilshalltransmitacopyofthisresolution,uponitsadoption,totheOfficeof
61	61	theMayor.
62	62	Sec.4.Fiscalimpactstatement.
63	63	‘TheCounciladoptsthefiscalimpactstatementoftheChiefFinancialOfficerasthefiscal
64	64	impactstatementrequiredbysection4aoftheGeneralLegislativeProceduresActof1975,
65	65	approvedOctober16,2006(120Stat.2038;D.C.OfficialCode§1-301.47a)
66	66	Sec.5.Effectivedate.
67	67
68	68	33 Thisresolutionshalltakeeffectimmediately.
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72	72	DEPARTMENT OF SMALL AND LOCAL BUSINESS DEVELOPMENT
73	73
74	74	NOTICE OF FINAL RULEMAKING
75	75
76	76	The Director of the Department of Small and Local Business Development (“Director”),
77	77	pursuant to the authority set forth in the Small and Certified Business Enterprise Development
78	78	and Assistance Act of 2005, effective October 20, 2005 (D.C. Law 16-33; D.C. Official Code § 2-218.01 et seq. (“Act”), and Mayor’s Order 2009- 58, dated April 15, 2009, hereby gives notice
79	79	of her adoption of the following amendments to Chapter 8 (Local, Small, and Disadvantaged
80	80	Business Enterprises Contracting) of Title 27 (Contracts and Procurement) of the District of
81	81	Columbia Municipal Regulations (“DCMR”).
82	82	A Notice of Proposed Rulemaking was published in the D.C. Register on July 10, 2020, at 67
83	83	DCR 8465. No written comments on the proposed rules were received during the public
84	84	comment period. Minor changes were made to the rules as proposed that were in keeping with
85	85	the statute, including grammatical or punctuation changes, and changes that added clarity.
86	86	These rules replace the Department’s current regulations (27 DCMR § 800 et seq.), originally
87	87	issued in 2009, and reflect the significant changes to the certified business enterprise program
88	88	made by the Small and Certified Business Enterprise Development and Assistan ce Amendment
89	89	Act of 2014 (“2014 Act”), effective June 10, 2014 (D.C. Law 20- 108; 61 DCR 3892).
90	90	The following summarizes some of the major aspects of the rules:
91	91
92	92	Small and Local Business Opportunity Commission
93	93	The rules delete all references to the Small and Local Business Opportunity Commission, which
94	94	no longer exists. A business may now appeal the denial of an application for certification, the revocation or chang e to a previously issued certification, or an enforcement action taken pursuant
95	95	to the Act directly to the Office of Administrative H earings (OAH).
96	96
97	97	Subcontracting Requirements for Construction & Non-Construction Contracts and
98	98	Subcontracting Plans
99	99	The rules reflect changes in the 2014 Act requiring that all construction and non-construction
100	100	contracts for government-assisted projects in excess of $250,000 include at least 35% of the
101	101	dollar volume of the contract be subcontracted to small busin ess enterprises (SBEs). If there are
102	102	insufficient qualified SBEs to completely fulfill the 35% subcontracting requirement, the subcontracting requirement may be satisfied by subcontracting 35% of the dollar volume to any
103	103	qualified certified business enterprise (C BE), provided that all reasonable efforts shall be made
104	104	to ensure that qualified SBEs are significant participants in the overall subcontracting work.
105	105
106	106	Enforcement and Penalties for Breach of Subcontracting Plan
107	107	Under the r ules, for any subcontracting plan required by law, the beneficiary shall be deemed to
108	108	have breached the subcontracting plan for utilization of SBEs or CBEs in the performance of the
109	109	contract if the beneficiary fails to submit subcontracting plan monitoring or compliance reports
110	110	or other required subcontracting information in a reasonably timely manner, submits a
111	111	monitoring or compliance report or other required subcontracting information containing a 2
112	112
113	113
114	114	materially false statement , or fails to meet the subcontracting requirements outlined in section
115	115	2346 of the Act (D.C. Official Code § 2-218.46).
116	116
117	117	A contractor that is found to have breached a subcontracting plan for utilization of CBEs shall be
118	118	subject to the imposition of penalties, including monetary fines, pursuant to section 2363 of the
119	119	Act (D.C. Official Code § 2-218.63).
120	120
121	121	The Department may conduct periodic spot checks of CBE s, now defined in the Pr oposed Rules
122	122	as an unannounced cursory, on- site inspection of a CBE headquarters to ensure continued
123	123	compliance with eligibility requirements of the Act and these regulations. The Department may
124	124	revoke CBE certification upon discovery of non-compliance.
125	125
126	126	The 30-day notice to cure given to non-compliant entities is eliminated and replaced by a notice
127	127	of corrective action before the Department would implement any sanctions.
128	128
129	129	The Department may refer a matter to the Attorney General for the District of Colum bia for civil
130	130	action, or the Office of Contracting and Procurement (“OCP”) for investigation and possible
131	131	debarment, if it is found that a CBE, certified joint venture, or beneficiary has engaged in
132	132	conduct in violation of section 2363(a)(3) of the Act (D.C. Official Code § 2-218.63(a)(3)).
133	133
134	134	Waiver of Subcontracting Requirements
135	135	The rules require that a waiver request must come from an agency, not the beneficiary. For
136	136	public-private development projects the Department may exclude acquisition costs and related
137	137	financing fees from the total development budget amount when determining the 35% SBE
138	138	subcontracting requirement of section 2346 of the Act (D.C. Official Code § 2-218.46).
139	139
140	140	Enforcement Mechanism Against an Agency
141	141	Under the rules, the performance plan for each agency shall include a metric for compliance with the provisions of the Act and the performance evaluation for each agency director shall reflect
142	142	the agency’s success in meeting those compliance goals.
143	143	Certification and Subs equent Certificate of Registration (Recertification) Process
144	144	The rules extend the ce rtification period from two (2) years to three (3) years, provide guidance
145	145	on shared work spaces, define “Principal Office” as the “headquarters for the business”, provide
146	146	guidance on demonstrating that the chief business officer and highest level managers perform
147	147	functions in the Principal Office, and provide guidance on how affiliation with another business
148	148	is reviewed by the Department. Under the rules, a CBE that has had no material change in its business status can obtain
149	149	recertification by submitting a sworn affidavit attesting that the CBE has had no material change
150	150	and still meets the certification requirements; and, has clean hands and is in good st anding
151	151	required by D.C. Official Code §§ 47- 2861 and 29-102.08. “Material change” is defined as a
152	152	change in a business’ ownership, address, or size (if an SBE). A CBE that meets the
153	153	requirements above is deemed recertified upon the submission of the written application.
154	154	Small Business Capital Access Fund 3
155	155
156	156
157	157	In keeping with the 2014 Act, the r ules convert references to the Microloan Fund into references
158	158	to the Small Business Capital Access Fund and delete all references to the Collateral Support
159	159	Loan Guarantee Program, which is a program run by the Department of Insurance, Securities,
160	160	and Banking (DISB).
161	161
162	162	Equity and Development Participation
163	163	The rules define the requirements for certification as a Small Investor, Disadvantaged Investor
164	164	and Certified Equity Participant.
165	165	Pursuant to the Small and Local Business Development Rulemaking Approval Resolution of 2023 (Prop. Res. 25- XXX), these final rules were submitted to the Council of the District of
166	166	Columbia for its review and approval, in accordance with section 2372 of the Act (D.C. Official
167	167	Code § 2-218.72). The rules were [deemed] approved by the Council on [date to be inserted] .
168	168	The Director adopted these final rules on [date to be inserted], and they shall become effective
169	169	upon the date of publication of hits notice in the D.C. Register .
170	170	Chapter 8, LOCAL, SMALL, AND DISADVANTAGED BUS INESS ENTERPRISES
171	171	CONTRACTING, of Title 27 DCMR, CONTRACTS AND PROCUREMENT S, is
172	172	amended to read as follows:
173	173	800 GENERAL PROVISIONS
174	174	800.1 This chapter is promulgated pursuant to the Small and Certified Business
175	175	Enterprise Development and Assistance Act of 2005 (Act), effective October 20,
176	176	2005 (D.C. Law 16-33; D.C. Official Code § 2-218.01 et seq .).
177	177	801 APPLICATION FOR CERTIFIED BUSINESS ENTERPRISE STATUS
178	178	801.1 An applicant for certification with the Department shall submit, via the
179	179	Department’s website or as otherwise directed by the Department, a completed
180	180	application that is signed and sworn to by the applicant, setting forth the basis for certification as a cer tified business enterprise (“CBE”), accompanied by
181	181	documentation requested by the Department.
182	182	801.2 An appl icant for certification shall also submit the following documentation:
183	183
184	184	(a) Business documentation, including business licenses or authorization t o
185	185	operate in the District, by-laws, operating agreements, certificates of clean
186	186	hands and good standing, partnership agreements, joint venture
187	187	agreements, and tax returns;
188	188
189	189	(b) Copies of current financial or operating statements, including balance
190	190	sheets, income statements, statements of retained earnings, and statements
191	191	of cash flows, all of which must be current up to the ni nety (90)-day
192	192	period prior to the application date, along with federal and District of 4
193	193
194	194
195	195	Columbia and applicable state tax returns, in cluding all forms, schedules,
196	196	worksheets and statements filed with the Internal Revenue Service, the
197	197	District of Columbi a and applicable states, for the three most recent years;
198	198
199	199	(c) Type, quantity, and location of equipment owned, and equipment which
200	200	has been transferred or donated, including the supporting documents of
201	201	these transfer or donation transactions, if applicab le;
202	202
203	203	(d) Lease or ownership information for every location at which the applicant
204	204	maintains an office as well as any space that the applicant has leased or
205	205	purchased in the District relating to the business including, but not limited
206	206	to, a warehouse, stor age space, storage lots, and land;
207	207
208	208	(e) A list of all employees, including name, title, home address, and the office
209	209	to which each emp loyee reports; and
210	210
211	211	(f) Any other documentation the Department may require.
212	212
213	213	801.3 An applicant may also be required to demonstrate compliance with the
214	214	requirements of the Act, this chapter, and other laws of the District of Columbia.
215	215	In furtherance of such demonstration, the applicant shall:
216	216
217	217	(a) Permit the Department to enter and conduct an on- site inspection of the
218	218	applicant's business premises and any affiliated locations;
219	219
220	220	(b) Provide the Department, during the on-site inspection, with immediate
221	221	access to any records or area of the premises that the Department deems
222	222	necessary to review to determine wheth er the applicant is in compliance
223	223	with the Act and these regulations; and
224	224
225	225	(c) Provide any other information the Department deems necessary to
226	226	demonstrate compliance with the Act and these regulations.
227	227
228	228	801.4 An applicant currently certified as a CBE seeking to update their CBE certificate
229	229	shall submit, via the Department’s website or as otherwise directed by the
230	230	Department, a complete application of changes requested that is signed and sworn
231	231	to by the applicant and shall provide additional information an d/or documentation
232	232	required by the Act and this chapter, and any other information requested by the
233	233	Department.
234	234
235	235	801.5 An applicant may withdraw an application submitted for certification, except that:
236	236
237	237	(a) An applicant that withdraws an application may not file an other
238	238	application for thirty (30) days from the date of withdrawal; and
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240	240
241	241
242	242	(b) An applicant may not withdraw an application after the De partment
243	243	notifies the applicant that the Department intends to deny the application.
244	244
245	245	801.6 If the Department determines that the application submitted for certification is
246	246	incomplete, the application shall be deemed deficient, and returned to the
247	247	applicant until the applicant cures the deficiencies and resubmits the application.
248	248
249	249	802 LOCAL BUSINESS ENTERPRIS E REQUIREMENTS
250	250
251	251	802.1 An applicant for certification as a local business enterprise must demonstrate,
252	252	inter alia, that the principal office of the business enterprise is located in the
253	253	District of Columbia. To be considered the principal office:
254	254
255	255	(a) The space must be a dedicated suite, office, or desk that the applicant
256	256	owns, or that the applicant leases for a minimum of twelve (12) months;
257	257
258	258	(b) To the extent that the space is an office space that the applicant shares
259	259	with other businesses:
260	260
261	261	(1) There must be a clear s eparation between the businesses;
262	262
263	263	(2) The applicant must have a dedicated office or desk for exclusive
264	264	use of the business seekin g certification;
265	265
266	266	(3) Assets and business functions of the business shall not be
267	267	commingled with other businesses; and
268	268
269	269	(4) The lease or addendum to the membership agreement must identify
270	270	the desk or office number the applicant is occupying; and
271	271
272	272	(c) Legal documents, and if applicable,
273	273	the website, insignia, signs, printed
274	274	material, business cards, and letterh ead where the principal office or
275	275	headquarters is identified, must indicate that the office, located in the
276	276	District of Columbia, is the applicant’s principal office.
277	277
278	278	802.2 In determining the principal office for the business enterprise, the Department
279	279	may also consider:
280	280
281	281	(a) The totality of the business activities in which routine and essential
282	282	business functions occur such as the following:
283	283
284	284	(1) Bookkeeping and other recordkeeping;
285	285
286	286	(2) Payroll maintenance;
287	287
288	288	(3) Receipt of business telephone calls; 6
289	289
290	290
291	291
292	292	(4) Receipt of correspondence and bills;
293	293
294	294	(5) Storing of books and records; and
295	295
296	296	(6) Directing, controlling and coordinating activities and policies by
297	297	officers, principals and managers; and
298	298
299	299	(b) The number of vehicles owned by the applicant that a re registered in
300	300	jurisdictions outside of the District of Columbia in comparison to the
301	301	number of such vehicles registered in the District of Columbia. The
302	302	Department reserves the right to request copies of the vehicle registrations
303	303	for all company- owned vehicles.
304	304
305	305	802.3 (a) An applicant for certification as a local business enterprise must also
306	306	demonstrate that its chief executive officer and th e highest-level
307	307	managerial employees perform their managerial functions in their
308	308	principal office located in the Distric t.
309	309
310	310	(b) The principal office in the District must be a dedicated space with size and
311	311	functionality that enables the chief executive officer and highest-level
312	312	managerial employees to perform their managerial functions.
313	313
314	314	802.4 The Department will rely on an applicant’s filed District and federal taxes, among
315	315	other things, to calculate the applicant’s gross receipts and to determine whether
316	316	the applicant meets the requirements of section 2331(2A)(C) and (D) of the Act
317	317	(D.C. Official Code § 2-218.31(2A)(C) and (D)).
318	318
319	319	(a) Pursuant to section 2331(2A)(C) of the Act (D.C. Official Code § 2-
320	320	218.31(2A)(C)), in determining whether the applicant ha s more than fifty
321	321	percent (50%) of the assets of the business enterprise located in the
322	322	District, the Department will co nsider:
323	323
324	324	(1) The location of fixed assets, including property, plant, and
325	325	equipment, and exclude bank accounts, accounts receivable, and
326	326	intangible assets, such as goodwill, patents, copyrights, or
327	327	trademarks; and
328	328
329	329	(2) The number of vehicles owned by the appl icant and used for the
330	330	business enterprise that are registered in jurisdictions inside and
331	331	outside of the District of Columbia.
332	332
333	333	(b) The Department will evaluate whether the applicant meets the local
334	334	business enterprise category pursuant to section 2331(2A)(C) of the Act
335	335	(D.C. Official Code § 2-218.31(2A)(C)) by relying on the following:
336	336	7
337	337
338	338
339	339	(1) The applicant’s detailed list of fixed assets in the District to
340	340	include:
341	341
342	342	(A) Type, quantity, location and value of equipment owned;
343	343
344	344	(B) Real estate properties and corresponding recent property
345	345	tax bills; and
346	346
347	347	(C) List of vehicles, year, make and model and Kelley Blue
348	348	Book
349	349	®
350	350	values;
351	351
352	352	(2) The Department’s site visit(s) to verify fixed assets located in the
353	353	District; and
354	354
355	355	(3) The Department may require an audited or certified financial
356	356	statement by an independent auditor that attests to the statement’ s
357	357	compliance with generally accepted ac counting principles.
358	358
359	359	803 SMALL BUSINESS ENTERPRISE; ADDITIONAL REQUIREMENTS
360	360
361	361	803.1 Pursuant to section 2332(a)(3)(B) of the Act (D.C. Official Code § 2-
362	362	218.32(a)(3)(B)), a n applicant seeking certification as a small business enterprise
363	363	(“SBE”) shall, in addition to satisfying other requirements of the Act, demonstrate
364	364	to the Department that the business enterprise has had averaged annualized gross
365	365	receipts for the three ( 3) years preceding certification not exceeding the following
366	366	limits:
367	367
368	368	Construction, Heavy (Street and Highways,
369	369	Bridges, etc.) $23 million
370	370	Construction, Building (General Construction, etc.) $21 million
371	371	Construction, Specialty Trades $13 million
372	372	Goods and Equipment $20 million
373	373	General Services $19 million
374	374	Professional Services, Personal Services (Hotel, Beauty,
375	375	Laundry, etc.) $5 million
376	376	Professional Services, Business Services $10 million
377	377	Professional Services, Health and Legal Services $10 million
378	378	Professional Services, Health Facilities Management $19 million
379	379	Manufacturing Services $ 10 million
380	380	Transportation and Hauling Services $13 million
381	381	Financial Institutions $ 300 million
382	382	804 DISADVANTAGED BUSINESS ENTERPRISE; ADDITIONAL REQUIREMENTS
383	383	8
384	384
385	385
386	386	804.1 An applicant seeking certification as a disadvantaged business enterprise ("DBE")
387	387	shall demonstrate to the Department that the individuals representing more than
388	388	fifty percent (50%) of those who own, operate, and control the business enterprise
389	389	are:
390	390
391	391	(a) Socially disadvantaged because those individuals have reason to believe
392	392	that they have faced instances of prejudice or bias without regard to their
393	393	qualities as individuals due to their identity as members of a group, as
394	394	evidenced by documentation that the individuals seeking socially
395	395	disadvantaged status as members of a group hold themselves out as
396	396	members of that group; and
397	397
398	398	(b) Economically disadvantaged because of diminished opportunities
399	399	(specifically, lack of access to credit and capital as compared to others in
400	400	the same line of business) related to their status as socially disadvantaged
401	401	as described in paragraph (a) of this subsection, that have precluded these
402	402	individuals from successfully competing in the open marketplace, as
403	403	evidenced by documentati on of the following:
404	404
405	405	(1) The personal financial statement of the individuals seeking
406	406	economically disadvantaged status; and
407	407
408	408	(2) The financial condition of the individual s or of business enterprises
409	409	the individuals own or operate.
410	410
411	411	804.2 An individual seeking DBE certification for a business enterprise shall provide
412	412	the Department with a narrative describing how the owner or owners of more than
413	413	fifty percent (50% ) of the business enterprise are socially and economically
414	414	disadvantaged as described in this section. The individual may also provide the
415	415	Department with the personal financial statement of the owner or owners claiming
416	416	to be economically disadvantaged, demonstrating that the personal net worth of
417	417	each owner, excluding the value of his or her primary residence and the value of
418	418	his or her ownership interest in the certified business enterprise (“CBE ”), is less
419	419	than one million dollars ( $ 1 million).
420	420
421	421	804.3 An individual seeking DBE certification pursuant to section 2333(b) of the Act
422	422	(D.C. Official Code § 2-218.33(b)) for a business enterprise must demonstrate
423	423	that the business enterprise’s annualized gross receipts for the tax year prior to
424	424	seeking certification do not exceed the limits enumerated in § 803.1, as evidenced
425	425	by District and federal tax returns filed.
426	426
427	427	805 RESIDENT-OWNED BUSINESS ENTE RPRISE; ADDITIONAL
428	428	REQUIREMENTS
429	429
430	430	805.1
431	431	An applicant requesting certification as a resident-owned business enterprise must
432	432	provide proof of residency, including federal and District of Columbia personal 9
433	433
434	434
435	435	income tax returns solely in the District;a deed, mortgage, or lease for his or her
436	436	primary residence; a District of Columbia driver's license or identification card;
437	437	and recent utility bills listing the applicant associated with the residence or the
438	438	applicant’s current voter registration listing the District of C olumbia address. The
439	439	Department may use other information to corroborate or disprove claims of
440	440	residency.
441	441
442	442	806 [RESERVED]
443	443
444	444	807 DEPARTMENT PROCESS FOR CERTIFIED BUSINESS ENTERPRISE
445	445	STATUS
446	446
447	447	807.1
448	448	Upon receipt of an application for certification as a certified business enterprise
449	449	(“CBE”), the Department will conduct a preliminary review of the submission for
450	450	compliance with the requirements of the Act and this chapter and take one of the
451	451	following actions:
452	452
453	453	(a) If the application is complete, it will be accepted for review by the
454	454	Department; or
455	455
456	456	(b) If the application is incomplete or lacks the required verification,
457	457	the Departme nt shall notify the applicant of the need for additional actions
458	458	or materials in order for the application to be accepted for review.
459	459
460	460	807.2 The Department may conduct site inspections and hold interviews or discussions
461	461	with an applicant or applicant's representative(s) as part of the review process.
462	462
463	463	807.3 In addition to the information supplied in the application and documents
464	464	accompanying the application, the Department may require an applicant to supply
465	465	or provide access to additional information and documents relevant to the
466	466	Department's investigation and determination of the applicant's eligibility as a
467	467	CBE.
468	468
469	469	807.4 While the ap plication is under review by the Department, an applicant shall report
470	470	to the Department any material change as defined by t he Act, and any other
471	471	change that may affect the eligibility for certification of the applicant, within five
472	472	(5) days of the change.
473	473
474	474	807.5 (a) Upon completion of the Department's review of an application for
475	475	certification, the Department shall determine the eligibility of the applicant
476	476	and advise the applicant in writing of the determination regarding its
477	477	application.
478	478
479	479	(b) The Department shall deny an application if the applicant fails to
480	480	demonstrate eligibility for certification.
481	481	10
482	482
483	483
484	484	808 SCOPE AND TERM OF CERTIFICATE OF REGISTRATION
485	485
486	486	808.1
487	487	A certificate issued to a c ertified business e nterprise (“CBE”) shall:
488	488
489	489	(a) Authorize the CBE to receive the benefits as outlined in the Act and this
490	490	chapter on all applicable District government solicitations; and
491	491
492	492	(b) Be effective for a period of three (3) years from the date of issuance,
493	493	provided that the CBE remains in compliance with the Act and this
494	494	chapter.
495	495
496	496	809 APPLICATION FOR JOINT VENTURES
497	497
498	498	809.1 An applicant for certification as a joint venture sha ll:
499	499
500	500	(a) Submit a complete application, as prescribed by the Department, no later
501	501	than fifteen (15) business days before the solicitation closes;
502	502
503	503	(b) Submit an executed copy of the applicant's joint venture agreement which
504	504	must:
505	505
506	506	(1) Specify in reasonable detail the purpose of the joint venture,
507	507	including the specific procurement, solicitation, or project the
508	508	applicant wishes to be certified to perform;
509	509
510	510	(2) Identify the parties to the joint venture and define their respective
511	511	obligations, rights, and resp onsibilities, including the management
512	512	structure, control of the joint venture, financial contributions,
513	513	bonding requirements, service and labor contributions, revenue or
514	514	fees for services or labor, and distribution of profits;
515	515
516	516	(3) Demonstrate that one of the joint venture members is a certified
517	517	business enterprise (“CBE”) or an applicant for CBE certification;
518	518
519	519	(4) Provide for the establishment and administration of a separate bank
520	520	account in the name of the joint venture into which all f unds
521	521	received will be deposited and through which all expenses will be
522	522	paid, and which requires all withdrawals and deposits to be
523	523	approved by the CBE member of the joint venture management
524	524	committee;
525	525
526	526	(5) Contain an itemized description of all major equipment, facilities,
527	527	and other resources to be furnished by each participant in the joint
528	528	venture with a detailed schedule of costs;
529	529	11
530	530
531	531
532	532	(6) Contain a provision indicating that the CBE's interest in the joint
533	533	venture shall not be reduced or diluted;
534	534
535	535	(7) Contain a provision indicating that the CBE's financial risk is
536	536	commensurate with its percentage interest in the joint venture;
537	537
538	538	(8) Contain a provision indicating that the joint venture agreement is
539	539	the controlling agreement between the parties regarding int erest,
540	540	ownership, control, responsibilities, duties, and functions of the
541	541	parties and the joint venture agreement shall prevail if there is any
542	542	conflict between the joint venture agreement and any other
543	543	agreement between the parties;
544	544
545	545	(9) Contain a provision that all other agreements between the joint
546	546	venture parties, concerning the joint venture and the joint venture
547	547	seeking certification, has been provided to the Department;
548	548
549	549	(10) Specify the responsibilities of the parties in at least the areas of
550	550	negotiations with t he owners, subcontract negotiation, contract and
551	551	subcontract performance; and
552	552
553	553	(11) Indicate that the CBE shall perform services of the joint venture,
554	554	receive profits of the joint venture, provide labor hours required of
555	555	the joint venture, and perform other work for the joint venture as
556	556	approved by the Department that is at a minimum equal to its
557	557	percentage of ownership interest in th e joint venture.
558	558
559	559	(c) Submit additional information that must:
560	560
561	561	(1) Inform the Department of whether the CBE has relinquished its
562	562	ownership interest in any joint venture within the one (1)-year
563	563	period prior to the application date; and
564	564
565	565	(2) Demonstrate that each participant in the joint venture has the
566	566	competence and expertise necessary to perform the type of work in
567	567	connection with which the joint venture wishes to be certified.
568	568
569	569	(d) Submit all other agreements between the parties regarding the operations
570	570	of the joint venture;
571	571
572	572	(e) Submit the most current audited or certified financial statement for the
573	573	non-CBE participant by an independent auditor that attests to the
574	574	statement’s compliance with generally accepted accounting principles.
575	575
576	576	(f) Submit its certified payroll upon request;
577	577	12
578	578
579	579
580	580	(g) Submit, if applicable, its bonding limit and the name of its bonding
581	581	company; and
582	582
583	583	(h) Permit the Department to enter and conduct an onsite inspection or re-
584	584	inspection of the proposed joint venture’s business premises.
585	585
586	586	809.2 An application for joint venture certification may be submitted to and reviewed by
587	587	the Department simu ltaneously with an application for certification of one or
588	588	more of the individual members as a CBE.
589	589
590	590	809.3 Unless a joint venture's certification is revoked or relinquished pursuant to the Act
591	591	and this chapter, a certified joint venture will re tain its certification for the
592	592	duration of the contract awarded through the solicitation for which it was
593	593	certified, including any extension of the contract.
594	594
595	595	809.4 The Department shall deny certification of any joint venture whose joint venture
596	596	agreement lacks any o f the provisions in § 809.1.
597	597
598	598	809.5 The joint venture shall make its records available to the Department at any time
599	599	deemed necessary by the Department.
600	600
601	601	809.6 Upon receipt of an application for certification as a joint venture, the Department
602	602	will follow the process outlined in § 807.
603	603
604	604	809.7 If the joint venture, having the same participants and structure, has been
605	605	certified by the De partment on a previous government-assisted project within the
606	606	last calendar year, and submits a complete application at least seven (7) business
607	607	days before the solicitation closes , the Department will make an expedited
608	608	determination; provided; that.
609	609
610	610	(a) If the application is incomplete or lacks the required documentation and
611	611	verification, the Department shall notify the join t venture that additional
612	612	actions or materials are needed in order to complete the application; and
613	613
614	614	(b) Within three (3) calendar days of any notification from the Department
615	615	requesting additional actions or materials under paragraph (a) of this
616	616	subsection, the joint venture shall complete any requested actions and
617	617	provide any requested materials.
618	618
619	619	809.8 Section 801.5(a) of this chapter shall not apply to applications for joint venture
620	620	certifications.
621	621
622	622	810 REPORTING REQUIREMENTS FOR JO INT VENTURES
623	623
624	624	810.1 The joint venture shall notify the Department within five (5) days of the award of
625	625	the contract whether the joint venture was awarded the contract. 13
626	626
627	627
628	628
629	629	810.2 The joint venture shall notify the Department within five (5) days of the
630	630	solicitation being w ithdrawn or cancelled.
631	631
632	632	810.3 A joint venture shall submit to the Department quarterly reports showing all
633	633	income and contract and subcontract receipts, all expenses (including fees for
634	634	services and labor, salaries of the joint venture principals, and distribution of
635	635	profits) no later than sixty (60) days after the end of each operating quarter of the
636	636	calendar year.
637	637
638	638	810.4 A joint ve nture shall submit to the Department the information contained in §
639	639	810.3 for the final quarter and a project-end income statement no later than forty-
640	640	five (45) days after completion of the contract with a statement of final profit
641	641	distribution.
642	642
643	643	810.5 Information provided under §§ 810.3 and 810.4 could be commercial or financial
644	644	information which, if disclosed, could result in substantial harm to the
645	645	competitive position of the provider of the information and, accordingly, may be
646	646	exempt from disclosure under section 204(a)(1) of the District of Columbia
647	647	Administrative Procedure Act, effective March 25, 1977 (D.C. Law 1 -96; D.C.
648	648	Official Code § 2-534(a)(1)).
649	649
650	650	811 BID AND PROPOSAL PREFERENCES FOR JOINT VENTURE
651	651
652	652	811.1 If the Department determines that a certified business enterprise (“CBE”) owns a
653	653	majority interest in the joint venture, the Department shall assign bid and proposal
654	654	preferences, as provided in section 2339a(h) of the Act (D.C. Official Code § 2-
655	655	218.39a(h)), upon certification of the joint v enture.
656	656
657	657	811.2 If the Department determines that a CBE owns a minority interest in the joint
658	658	venture, the Department shall assign bid and proposal preferences if the
659	659	percentage of ownership of the CBE(s) in the joint venture is as follows:
660	660
661	661	(a) Greater than or equal to thirty- five percent (35%) and less than or equal to
662	662	fifty percent (50%), the joint venture shall receive up to four (4)
663	663	preferences;
664	664
665	665	(b) Greater than or equal to twenty percent (20%) and less than thirty- five
666	666	percent (35%), the joint venture shall receive up to two (2) preferences; or
667	667
668	668	(c) Less than twenty percent (20%), the joint venture shall receive zero (0)
669	669	preferences.
670	670
671	671	811.3 Notwithstanding subsection 811.2, and pursuant to section 2339a(h)(2) of the Act
672	672	(D.C. Official Code § 2-218.39a(h)(2)), in no event shall the preference exceed 14
673	673
674	674
675	675	fifty percent (50%) of the preference that would otherwise be applicable t o the
676	676	CBE joint venture partner.
677	677	812 [RESERVED]
678	678	813 COMPLIANCE REVIEW AND ENFORCEMENT
679	679	813.1 The Department may conduct periodic compliance reviews of certified business
680	680	enterprises (“CBEs ”), certified joint ventures , and beneficiaries
681	681	to confirm
682	682	ongoing compliance with the requirements of the Act and this chapter, including
683	683	continuing certification eligibility and confirmation that CBEs are performing a
684	684	commercially useful function.
685	685	813.2 In conducting a compliance review, the Department may perform spot checks and
686	686	site visits, review documents, take photographs, and interview witnesses.
687	687	813.3 If, through a compliance review, the Department finds that a beneficiary, certified
688	688	business enterprise (“CBE”), or certified joint venture has not complied with the
689	689	Act and this chapter, the Department shall issue a notice which shall specify:
690	690
691	691	(a) The nature of the non-compliance;
692	692	(b) The corrective action that must be taken; and either
693	693	(c) The date by which the deficiencies must be corrected; or
694	694	(d) The Department’s intent to issue a fine and/or revoke CBE certification in
695	695	accordance with the Act and this chapter if the Department determines the
696	696	deficiencies cannot be corrected.
697	697	813.4 In the event that a CBE or certified joint venture fails to take corrective action
698	698	within the timeframe specified in the notice, the Department may issue a notice to revoke the certification. The Department may also issue a fine to the CBE or
699	699	certified joint venture in accordance with section 2363 of the Act (D.C. Official
700	700	Code § 2-218.63).
701	701
702	702	813.5 A s part of confirming compliance, CBE subcontractors must cooperate with
703	703	beneficiaries in the preparation of Quarterly Reports by submitting
704	704	notarized/electronic Vendor Verification Forms (VVFs) confirming receipt of
705	705	payment; and must immediately notify the Department in writing if there is reason
706	706	to suspect a breach of the subcontracting plan.
707	707	813.6 The Department shall issue and serve on the beneficiary, CBE, or joint venture
708	708	alleged to have committed a violation a written notice of violation, which shall
709	709	explain the violation and related penalties, as well as procedures for seeking
710	710	reconsideration and appeal. 15
711	711
712	712
713	713
714	714	813.7 Within twenty (20) days of receiving a notice of violation of sections 2346 or
715	715	2348 of the Act, a respondent may submit a Request for Reconsideration,
716	716	including any additional information that justifies modifying or rescinding the
717	717	notice. Requests for Reconsideration received by the Department after twenty
718	718	(20) days will not be considered. If, following receipt of the Department’s
719	719	response to the Request for Reconsideration, the Respondent disagrees with the
720	720	Department’s decision, the Respondent may submit a written appeal to the Office
721	721	of Administrative Hearings, within twen ty (20) days of receipt, pursuant to
722	722	instructions included in the Notice.
723	723
724	724	813.8 Upon a finding that a CBE, certified joint venture, or beneficiary has engaged in
725	725	conduct in violation of section 2363(a)(3) of the Act (D.C. Official Code § 2-
726	726	218.63(a)(3)), the Department may refer the matter to the Attorney General for
727	727	the District of Columbia for civil action, and shall refer the matter to the Office of
728	728	Contracting and Procurement (“OCP”) for investigation and possible debarment,
729	729	as well as a possible determination that the CBE, joint venture, or beneficiary
730	730	shall be ineligible to be considered for government-assisted project with the
731	731	District government for up to five (5) years.
732	732
733	733	814 COMPLAINT PROCEDURE AND DEPARTMENT INTERNAL
734	734	HEARING
735	735
736	736	814.1 Any perso n may file a complaint with the Department, pursuant to section
737	737	2363(e)(1) of the Act (D.C. Official Code § 2- 218.63(e)(1)), by submitting to the
738	738	Department a completed written notarized complaint form, provided by the
739	739	Department, identifying the nature of the complaint and swearing to the truth of
740	740	the allegations in the complaint.
741	741
742	742	814.2 The Department shall review the complaint and determine the action to be taken
743	743	as outlined in the Act and these regulations.
744	744
745	745	814.3 (a) If the Department determines that a complaint is not frivolous or otherwise
746	746	without merit, it shal l investigate the facts surrounding the allegations,
747	747	including reviewing the file and all paperwork contained therein,
748	748	interviewing witnesses, or any other reasonable action necessary given the
749	749	nature of the allegations in the complaint.
750	750
751	751	(b) Within three (3) months of the filing of the complaint, the Department
752	752	shall:
753	753
754	754	(1) Conduct an internal hearing at a location and time determined by
755	755	the Department if it does not determine that there was no violation
756	756	of the Act or these regulations upon completing its investigation;
757	757	or
758	758	16
759	759
760	760
761	761	(2) If the Department determines there was no violation of the Act or
762	762	these regulations upon completing its investigation , to the
763	763	Department shall notify the complainant and the business entity of
764	764	that determination.
765	765
766	766	814.4 An internal hearing conducted by the Department conducted pursuant to
767	767	subsection 814.3(b)(1):
768	768
769	769	(a) Shall be open to the public;
770	770
771	771	(b) The complainant and the business entity shall be given notice to attend at
772	772	least thirty ( 30) days before the hearing date;
773	773
774	774	(c) The complainant shall testify;
775	775
776	776	(d) The respondent shall have a right to:
777	777
778	778	(1) Be present in person;
779	779
780	780	(2) Designate a representative or representatives to appear on their
781	781	behalf;
782	782
783	783	(3) Present oral and documentary evidence;
784	784
785	785	(4) Submit rebuttal evidence; and
786	786
787	787	(5) Cross-examine opposing witnesses.
788	788
789	789	(e) The Department may exclude or order the removal of any participant in an
790	790	internal hearing who becomes disruptive to the internal hearing process.
791	791
792	792	814.5 The Department shall is sue a decision in writing no later than thirty (30) days
793	793	after the conclusion of the internal hearing.
794	794
795	795	814.6 A decision of the Department that is adverse to a business entity shall contain the
796	796	following:
797	797
798	798	(a) Findings of fact;
799	799
800	800	(b) Conclusions of law;
801	801
802	802	(c) Final decision; and
803	803
804	804	(d) A statement informing the business entity that pursuant to section 2363(g)
805	805	of the Act (D.C. Official Code § 2- 218.63(g)), the business entity has a
806	806	right to file an appeal with the Office of Administrative Hearings 17
807	807
808	808
809	809	(“OAH”) within twenty (20) calendar days after service of the
810	810	Department’s decision.
811	811
812	812	814.7 The Department shall serve a copy of the decision on the business entity,
813	813	representative and counsel if any, and the complainant within ten (10) days of the
814	814	date the Department issues the decision.
815	815
816	816	814.8 Upon appeal of the Department’s decision, the decision of OAH shall be the final
817	817	administrative decision for judicial review in accordance with section 2363(g)(3)
818	818	of the Act (D.C. Official Code § 2-218.63(g)(3)).
819	819
820	820	815 GROUNDS FOR REVOCATION
821	821
822	822	815.1 Upon a finding that a certified business enterprise (“CBE ”) or certified joint
823	823	venture engaged in condu ct in violation of section 2363(a)(2) or (3) of the Act
824	824	(D.C. Official Code § 2- 218.63(a)(2) or (3)), the Dep artment may issue an intent
825	825	to revoke the certificate of registration for the CBE or certified joint venture under
826	826	procedures set forth in section 2363 of the Act.
827	827
828	828	815.2 In considering whether the certificate of registration should be revoked, in
829	829	addition to any other consideration, the Department shall consider whether any
830	830	member of the CBE or certified joint venture has been charged or convicted of a
831	831	crime that bears directly on the fitness of the CBE or certified joint venture to
832	832	participate in programs established pursuant to the Act and these regulations. The
833	833	Department’s findings related to offenses bearing on fitness for a CBE licensure
834	834	are sufficient for a revocation without the disposition of a conviction.
835	835
836	836	815.3 Upon revocation, the Department shall not accept, or evaluate for a period of
837	837	twelve (12) months from the date the CBE and certified joint venture receives
838	838	notice of the decision to revoke:
839	839
840	840	(a) Amendments to or new information on the revoked certification; or
841	841
842	842	(b) A new certification application from the CBE and certified joint venture,
843	843	their agent(s), representative(s), or other members of the public on their
844	844	behalf.
845	845
846	846	816 OPPORT UNITY FOR A HEARING: REVOCATION
847	847
848	848	816.1 If the Department issues an intent to revoke the certification of a certified
849	849	business enterprise (“CBE”) or certified joint ve nture, the CBE or certified joint
850	850	venture may request a hearing before OAH.
851	851
852	852	816.2 The procedures described in this section shall apply to a CBE or certified joint
853	853	venture when the Department issues an intent to revoke the certificate of
854	854	registration. The Department shall give the CBE or certified joint venture written 18
855	855
856	856
857	857	notice of an opportunity for a hearing prior to the revocation of its certificate of
858	858	registration. The Department shall serve that intent to revoke notice on the CBE
859	859	or certified joint venture, and the notice shall include:
860	860
861	861	(a) The intended action;
862	862
863	863	(b) The basis for the intended action in the Act or this chapter;
864	864
865	865	(c) A brief summary of the deficiencies or factual allegations in support of the
866	866	intended action; and
867	867
868	868	(d) A statement which informs the CBE or certified joint venture that the
869	869	Department's decision will be final unless, pursuant to section 2363(g) of
870	870	the Act (D.C. Official Code § 2-218.63(g)) , the CBE: or certified joint
871	871	venture files an appeal with OAH within twenty (20) calendar days after
872	872	service of the Department’s intent to revoke notice.
873	873
874	874	816.3
875	875	If a CBE or certified joint venture does not timely appeal to OAH, the
876	876	Department's intent to revoke action shall be final and the CBE’s or certified joint venture’s certification shall be revoked.
877	877	816.4 Pursuant to section 2363(g) of the Act (D.C. Official Code § 2-218.63(g)), the
878	878	CBE or certified joint venture may appeal the final revocation action by filing a
879	879	written appeal with OAH within twenty (20) calendar days after th e date on which
880	880	the Department’s revocation is final.
881	881	816.5 The decision of OAH shall be the final administrative decision for judicial review
882	882	in accordance with section 2363(g)(3) of the Act (D.C. Official Code § 2- 218.63(g)(3)).
883	883	817 OPPORTUNITY FOR A HEARING: DENIAL
884	884	817.1 The procedures described in this section shall apply to an applicant for
885	885	certification whose cert ification application has been denied. The Department
886	886	shall serve written notice of the denial on the applicant, which shall inclu de the
887	887	following:
888	888
889	889	(a) The basis for the denial in the Act or these regulations;
890	890	(b) A brief summary of the deficiencies or factual allegations in support of the
891	891	denial; and
892	892	(c) A statement which informs the applicant that he or she may appeal the Department's denial of certification by submitting a written request to
893	893	appeal, pursuant to section 2363(g) of the Act (D.C. Official Code § 2- 19
894	894
895	895
896	896	218.63(g)), to OAH within twenty (20) days after service of the
897	897	Department’s notice.
898	898
899	899	817.2 The Department shall in clude in the denial notice the applicant’s right to appeal to
900	900	OAH.
901	901
902	902	817.3 Any decision issued by OAH will be the final administrative decision for the
903	903	purposes of judicial review, in accordance with section 2363(g)(3) of the Act
904	904	(D.C. Official Code § 2-218.63(g)(3)).
905	905
906	906	818 COMPUTATION OF TIME
907	907
908	908	818.1 In computing any period of time specified in this chapter, the day of the act,
909	909	event, or default shall not be counted, and the last day of the period shall be
910	910	counted unless it is not a business day, in whi ch event the time period shall
911	911	continue until the next business day. When the period of time prescribed or
912	912	allowed is less than 11 days, intermediate Saturdays, Sundays, and legal holidays
913	913	shall be excluded in the computation.
914	914
915	915	818.2 Where the Department or a respondent to an action pursuant to this chapter has
916	916	the right or is required to perform some act within a specified period of time, and
917	917	that act is completed by mail, three (3) days shall be added to the prescribed
918	918	period.
919	919
920	920	819 SERVICE
921	921
922	922	819.1 Documentation that is required by this chapter to be served on an applicant or a
923	923	respondent shall be served at the last known address of the applicant or
924	924	respondent on file with the Department, or any representative thereof.
925	925
926	926	819
927	927	.2 Service shall be to :
928	928
929	929	(a) The business enterprise or majority owners or any representative’s mailing
930	930	address as provided on the application or otherw ise updated with the
931	931	Department by:
932	932
933	933	(1) Personal delivery;
934	934
935	935	(2) Use of a process server;
936	936
937	937	(3) Certified or registered mail, return receipt requested; or
938	938
939	939	(b) The business enterprise or majority owners or any representative’s email
940	940	address as provided o n the application or otherwise updated with the
941	941	Department. The Department will maintain an email - generated delivery
942	942	receipt system. 20
943	943
944	944
945	945
946	946	820 JUDICIAL REVIEW
947	947
948	948	820.1 A party suffering a legal wrong or adversely affected or aggrieved by a final
949	949	decision of the OAH may seek review of the decision by the District of Columbia
950	950	Court of Appeals pursuant to section 19(c) -(e) of the Office of Administrative
951	951	Hearings Establishment Act of 2001, effective March 6, 2002 (D.C. Law 14- 76;
952	952	D.C. Official Code § 2-1831.16(c) -(e)).
953	953
954	954	821 LIST OF CERTIFIED BUSINESS ENTERPRISES
955	955
956	956	821.1 The Department shall establish and maintain a centralized list of certified business
957	957	enterprises (“CBEs ”).
958	958
959	959	821.2 The Department's centralized list of CBEs shall set forth the name of each CBE,
960	960	contact information for each CBE, the CBE's business certification categories
961	961	(e.g., Small Business Enterprise, Resident Owned Business), and the expiration
962	962	date of the CBE's registration.
963	963
964	964	822 AGENCY EXPENDABLE BUDGETS ; SMALL BUSINESS ENTERP RISE
965	965	EXPENDITURE
966	966
967	967	822.1 No later than one hundred twenty (120) days (June 1
968	968	st
969	969	) prior to the beginning of
970	970	each fiscal year, the Department shall me et and confer with the Office of the
971	971	Chief Financial Officer (“OCFO ”), the Office of Contracting and Procurement
972	972	(“OCP”), the Office of the City Administrator (“OCA”), and independent
973	973	agencies regarding the total appropriated budget, comptroller object cod es to be
974	974	excluded from agencies’ expendable budgets, and anticipated requests for special
975	975	exceptions.
976	976
977	977	822.2 No later than eighty- five (85) days prior to the beginning of each fiscal year, the
978	978	Department shall review the appropriated budget data received from OCFO and
979	979	update the list of the comptroller object codes that shall be excluded from the
980	980	agency's expendable budget .
981	981
982	982	822.3 No later than eighty (80) days prior to the beginning of each fiscal year, each
983	983	agency shall itemize its total appropriated budget as prescribed by the
984	984	Department.
985	985
986	986	822.4 (a) No later than sixty (60) days (August 1
987	987	st
988	988	) prior to the beginning of each
989	989	fiscal year, each agency may request special exceptions not included in the
990	990	list provided by the Department for exclusion from th e amount of the
991	991	expendable budget for the agency.
992	992
993	993	(b) Any requests for special exceptions shall be submit ted in a manner
994	994	prescribed by the Department and must include supporting documentation. 21
995	995
996	996
997	997
998	998	822.5 The Department shall approve a special exception requested under subsection
999	999	822.4 if :
1000	1000
1001	1001	(a) No small business enterprises (“SBEs”) or certified business enterprises
1002	1002	(“CBEs”) can provide the required goods or services;
1003	1003
1004	1004	(b) The expenditure cannot be made to an SBE or CBE because the goods or
1005	1005	services ar e proprietary;
1006	1006
1007	1007	(c) The line item is not for goods or services;
1008	1008
1009	1009	(d) There are federal or other restrictions on how the funds may be expended;
1010	1010	or
1011	1011
1012	1012	(e) The goods or services must be provided by an organization not certified by
1013	1013	the Department.
1014	1014
1015	1015	822.6 Prior to the beginning of each fiscal year, the Department will make a
1016	1016	determination on each request for special excepti on timely submitted by an
1017	1017	agency.
1018	1018
1019	1019	822.7 Only budget items listed in sections 822.1, and either excluded under 822.2 or
1020	1020	approved for ex clusion under 822.6, shall be excluded from the agency's
1021	1021	expendable budget.
1022	1022
1023	1023	822.8 If an agency receives unanticipated funding or funding transferred from another
1024	1024	agency, experiences a reduction in funding, or experiences any other change in
1025	1025	circumstances that affects its expendable budget, such changes shall be included
1026	1026	in the proceeding quarterly updated appropriated budget data provided by OCFO
1027	1027	to the Department. Quarterly, each agency shall make any additional special
1028	1028	exception requests based on changes to the agency’s expendable budget. The
1029	1029	Department will process additional special exceptions requested by an agency.
1030	1030
1031	1031	822.9 The Department shall inform each agency of the agency's projected expendable
1032	1032	budget and its projected goals under section 2341 of the Act (D.C. Official Code §
1033	1033	2-218.41); and, make available to Council information on each agency's total
1034	1034	appropriated budget, exclusions from the agency's total appropriated budget by
1035	1035	comptroller object code, list of exclusions in sections 822.1 and 822.2, approved
1036	1036	special exceptions, each agency's expendable budget, and the projected goal for
1037	1037	each agency under section 2341 of the Act.
1038	1038
1039	1039	822.10
1040	1040	Pursuant to section 2341(a-3)(2) of the Act (D.C. Official Code § 2- 218.41(a-
1041	1041	3)(2)), each agency shall complete the annual allocation process at least one (1)
1042	1042	month prior to the beginning of each fiscal year by submitting in the District
1043	1043	Enterprise System (DES) an allocation confirmation that details the following: 22
1044	1044
1045	1045
1046	1046
1047	1047	(a) The name of the agency;
1048	1048
1049	1049	(b) The fiscal year;
1050	1050
1051	1051	(c) The budget of the agency approved by the Council for the fiscal year;
1052	1052
1053	1053	(d) The expendable budget of the agency for the fiscal year, as approved by
1054	1054	the Department; and
1055	1055
1056	1056	(e) The agency's projected small business enterprise (“ SBE”) expenditure
1057	1057	goal for the fiscal year.
1058	1058
1059	1059	823 [RESERVED]
1060	1060
1061	1061	824 AGENCY SPENDING PLAN
1062	1062
1063	1063	824.1 No later than fourteen (14) days prior to the beginning of each fiscal year, each
1064	1064	agency shall submit its spending plan as described in section 824.5 for the fiscal
1065	1065	year, in a manner designated by the Department. Spending plans for agencies that
1066	1066	contract or procure via the Office of Contracting and Procurement (“OCP ”) shall
1067	1067	be submitted via the Procurement Automated Support System Acquisition
1068	1068	Planning Tool.
1069	1069
1070	1070	824.2 Failure of an ag ency to timely submit spending plan for the fiscal year shall be
1071	1071	reported to the City Administrator no later than thirty (30) days after the start of
1072	1072	the fiscal year; and
1073	1073
1074	1074	824.3 A report to the City Administrator under section 824.2, an agency’s failure to
1075	1075	report an increase in its agency's set-aside, or the Department’s failure to provide
1076	1076	an agency allocation letter shall not eliminate the requirement for the agency to
1077	1077	submit a spending plan to the Department.
1078	1078
1079	1079	824.4 The Department may consider the quarterly reports submitted by the agency for
1080	1080	the previous fiscal year in determining the set-aside for the agency.
1081	1081
1082	1082	824.5 An agency spending plan shall specifically set forth the following information for
1083	1083	the fiscal year covered by the spending plan:
1084	1084
1085	1085	(a) Contracts or procurements that the agency intends to award, and the
1086	1086	source funding for each contract and procurement;
1087	1087
1088	1088	(b) Contracts or procurements that the agency has set aside for small business
1089	1089	enterprises (“SBEs ”);
1090	1090
1091	1091	(c) A description of the contract or procurement; 23
1092	1092
1093	1093
1094	1094
1095	1095	(d) Whether the contract or procurement is a new or existing contract or
1096	1096	procurement;
1097	1097
1098	1098	(e) The anticipated start and end date for each procurement; and
1099	1099
1100	1100	(f) Particular dollar amounts relating to the procurements specified in each of
1101	1101	the above paragraphs of this subsection.
1102	1102
1103	1103	824.6 If an agency cannot include with its spen ding plan all of the information required
1104	1104	by this section, it shall submit with its spending plan a statement and supporting
1105	1105	documentation which establishes good cause fo r the failure, as well as a request
1106	1106	for an extension of time for submission of the required information.
1107	1107
1108	1108	824.7 If an agency fails to meet the goals set forth in section 2341 of the Act (D.C.
1109	1109	Official Code § 2-218.41), the Department may, pur suant to section 2352(a) of
1110	1110	the Act (D.C. Official Code § 2- 218.52(a)), require that a portion of the agency’s
1111	1111	contracts and procurem ents be made part of a set-aside program for SBEs.
1112	1112
1113	1113	825 AGENCY PROGRAM REPORTS
1114	1114
1115	1115	825.1
1116	1116	Quarterly reporting periods are as follows: October 1 through December 31,
1117	1117	January 1 through March 31, April 1 through June 30, and July 1 through
1118	1118	September 30.
1119	1119
1120	1120	825.2 An agency shall provide the Department with a quarterly program report,
1121	1121	containing information provided by the Office of Co ntracting and Procurement
1122	1122	(“OCP”) and the Office of the Chief Financial Officer (“OCFO”), within thirty
1123	1123	(30) days after the end of each q uarter. Agencies with independent contracting
1124	1124	authority shall submit quarterly reports from their financial system. Ea ch
1125	1125	quarterly report submitted pursuant to this subsection must:
1126	1126
1127	1127	(a) Include funding source, vendor name, description of the expendi ture,
1128	1128	proof of payment, the identities of active SBEs, and the dollar amount ; and
1129	1129
1130	1130	(b) Be submitted within thirty (30) days after the end of each quarter, except
1131	1131	in the case of the fourth (4
1132	1132	th
1133	1133	) quarter report, which shall be submitted
1134	1134	along with the annual report .
1135	1135
1136	1136	825.3 The Department shall notify the agency in writing of any discrepancies in the
1137	1137	agency’s quarterly report within f ifteen (15) days of its receipt of the report.
1138	1138
1139	1139	825.4 If an agency's quarterly report indicates that the agency is not curren tly meeting
1140	1140	its SBE contracting and procuring requirements under section 2341 of the Act
1141	1141	(D.C. Official Code § 2- 218.41) and its s pending plan, the agency may submit to
1142	1142	the Department: 24
1143	1143
1144	1144
1145	1145
1146	1146	(a) An explanation for the projected shortfall;
1147	1147
1148	1148	(b) The specific steps the agency will take to remedy the shortfall, along with
1149	1149	supporting documentation; and
1150	1150
1151	1151	(c) Evidence of compliance with section 2341(a -2) of the Act.
1152	1152
1153	1153	825.5 The Department will reply to an agency’s submission in response to a sectio n
1154	1154	825.3 notification within fifteen (15) days of its receipt of the response. The
1155	1155	Department’s reply may include recommendations concerning how be st to
1156	1156	remedy the discrepancies identified in the report, including a scheduled meeting
1157	1157	with the OCFO and the Department.
1158	1158
1159	1159	826 AGENCY SET-ASIDE AND PREFERENCE PROGRAM
1160	1160	IMPLEMENTATION
1161	1161
1162	1162	826.1 When an entire solicitation has been placed in the sm all business enterprise
1163	1163	(“SBE”) set-aside program pursuant to sections 2344 and 2345 of the Act (D.C.
1164	1164	Official Code §§ 2- 218.44 and 2- 218.45), the solicitation shall:
1165	1165
1166	1166	(a) State that it is a set- aside for SBE and certified business enterprise
1167	1167	(“CBE”) offerors under th e provisions of the Act; and
1168	1168
1169	1169	(b) Require that responses include a copy of the certification letter/email
1170	1170	issued by the Department.
1171	1171
1172	1172	826.2 (a) Once a solicitation has been placed in the SBE set-aside program as
1173	1173	required by sections 2344, 2345 and 2345a of the Act (D.C. Official Code
1174	1174	§§ 2-218.44, 2- 218.45, and 2- 218.45a), the agency shall not remove it
1175	1175	from the set-aside prog ram unless:
1176	1176
1177	1177	(1) There are no SBEs that qualify for the procurement;
1178	1178
1179	1179	(2) The prices of the bids or proposals from SBEs are 12% or more
1180	1180	above the likely price on the open market; or
1181	1181
1182	1182	(3) The removal is otherwise authoriz ed by law.
1183	1183
1184	1184	(b) Each solicitation removed from the SBE set-aside program shall be posted
1185	1185	on the Department’s website.
1186	1186
1187	1187	(c) Pursuant to section 2345a of the Act (D.C. Official Code § 2-218.45a), a
1188	1188	follow-on and renewable acquisition must obtain the Director’s approval
1189	1189	to waive the SBE set -aside requirements.
1190	1190	25
1191	1191
1192	1192
1193	1193	826.3 Each agency shall provide to the Department, if requested, the following types of
1194	1194	procurement records:
1195	1195
1196	1196	(a) Small purchase sources;
1197	1197
1198	1198	(b) Term contracts;
1199	1199
1200	1200	(c) Blanket purchases orders;
1201	1201
1202	1202	(d) Repetitive or recurring procurement; and
1203	1203
1204	1204	(e) GSA Schedule procurement.
1205	1205
1206	1206	826.4 If an agency with independent contracting authority, or the Office of Contr acting
1207	1207	and Procurement (“OCP”), intends to place a solicitation covered under sections
1208	1208	2344, 2345 and 2345a of the Act (D. C. Official Code §§ 2- 218.44, 2- 218.45, and
1209	1209	2-218.45a) on the open market, the agency or OCP shall provide a written notice
1210	1210	to the Department as so on as practicable that the agency intends to exclude the
1211	1211	contract or procurement from its SBE set -aside program. The written notice shall
1212	1212	be posted on the Department’s website and include, at a minimum, a description
1213	1213	of:
1214	1214
1215	1215	(a) The steps taken to identify SBEs and CBEs that may be able to provide the
1216	1216	goods or services;
1217	1217
1218	1218	(b) A list of all SBEs and CBEs that were contacted by the agency;
1219	1219
1220	1220	(c) The information contained in the written determination(s) required under
1221	1221	sections 2344 and 2345, if applicable ; and
1222	1222
1223	1223	(d) If applicable, the agency’s request to the Director pursuant to section
1224	1224	2345a to waive the SBE set -aside requirement for foll ow-on and
1225	1225	renewable acquisitions.
1226	1226
1227	1227	827 GOVERNMENT -ASSISTED PROJECT CERTIFIED BUSINESS
1228	1228	ENTERPRISE SUBCONTRACTING
1229	1229
1230	1230	827.1 Pursuant to section 2346(a)(3) of the Act (D.C. Official Code § 2- 218.46(a)(3)), a
1231	1231	small business enterprise (“SBE”), local business enterprise (“LBE”), or
1232	1232	disadvantaged business enterprise (“DBE”) shall not be required to comply with
1233	1233	the requirements set forth in section 2346(a)(1) and (2) of the Act (D.C. Official
1234	1234	Code § 2- 218.46(a)(1) and (2)).
1235	1235
1236	1236	827.2 Pursuant to section 2346(d)(3) of the Act (D.C. Official Code § 2- 218.46(d)(3)),
1237	1237	the subcontracting plan required by section 2346(d)(2) of the Act shall, to the
1238	1238	extent consistent with section 2346(d- 1), be provided before the District accepts 26
1239	1239
1240	1240
1241	1241	the submission of the bid or proposal for all government-assisted projects as
1242	1242	defined in section 2302(9A)(A) of the Act (D.C. Official Code § 2-
1243	1243	218.02(9A)(A)).
1244	1244
1245	1245	827.3
1246	1246	When determining enforcement and penalties following a beneficiary ’s breach of
1247	1247	a subcontracting plan under section 2348 of the Act (D.C. Official Code § 2-
1248	1248	218.48), the Department shall consider:
1249	1249
1250	1250	(a) Whether the beneficiary notified the Department prior to the breach;
1251	1251
1252	1252	(b) The beneficiary's efforts at replacing the CBE subcontractor with another
1253	1253	subcontractor certified by the De partment in the same categories;
1254	1254
1255	1255	(c) Changes in the business operation or certification of the CBE
1256	1256	subcontractor; and
1257	1257
1258	1258	(d) Changes in economic conditions from the time the subcontracting plan
1259	1259	was developed.
1260	1260
1261	1261	827.4 (a) An agency seeking a waiver of the subcontracting requirements of
1262	1262	section 2346 of the Act (D.C. Official Code § 2- 218.46) under section
1263	1263	2351 of the Act (D.C. Official Co de § 2- 218.51), for government-assisted
1264	1264	projects described in section 2302(9A)(A) of the Act (D.C. Official Code
1265	1265	§ 2-218.02(9A)(A)), including contracts executed by an agency on behalf
1266	1266	of the District, shall submit a waiver request to the Department no less
1267	1267	than twenty (20) days prior to issuance of a solicitation or the exercise of
1268	1268	an option.
1269	1269
1270	1270	(b) If a bid or proposal require s a small business enterprise (“SBE”)
1271	1271	subcontracting plan, and no SBE subcontracting plans are submitted, that
1272	1272	bid or proposal sha ll, pursuant to section 2346(d)(1) of the Act (D.C.
1273	1273	Official Code § 2-218.46(d)(1)), be deemed nonresponsive and be
1274	1274	rejected. However, an agency may seek a waiver of the subcontracting
1275	1275	requirements, and if a waiver is approved, the solicitation shall be revised
1276	1276	and reissued or extended to allow for new responses to be submitted by
1277	1277	the public in accordance with that waiver.
1278	1278
1279	1279	827.5 (a) Pursuant to section 2341(c) of the Act (D.C. Official Code § 2- 218.41(c)),
1280	1280	the following types of contracts for governm ent-assisted projects
1281	1281	identified in section 2302(9A)(A) of the Act (D.C. Official Code § 2-
1282	1282	218.02(9A)(A)), are not required to seek a waiver and will be exempted
1283	1283	from the 35% SBE subcontracting requirement of section 2346 of the Act
1284	1284	(D.C. Official Code § 2-218.46):
1285	1285	27
1286	1286
1287	1287
1288	1288	(1) Direct travel purchases, including airline tickets, train tickets,
1289	1289	metro tickets, bus tickets, taxi fares, and accommodation costs
1290	1290	while on travel;
1291	1291
1292	1292	(2) Human Care Agreements that require consumer/client choice
1293	1293	without any input, manipula tion, or selection by the awarding
1294	1294	agency. The exemption excludes those instances where the
1295	1295	awarding agency selects the entities that are able to participate in
1296	1296	the pool from which the consumer/client chooses;
1297	1297
1298	1298	(3) Contracts in which the Distr ict is a tenant and pays costs to a
1299	1299	landlord for use of private property, which may include paying for
1300	1300	rent or lease, taxes, parking, paying the costs of existing building
1301	1301	service contracts, paying operating costs, or paying information
1302	1302	technology and other costs;
1303	1303
1304	1304	(4) Contracts for proprietary goods and services procured by an
1305	1305	agency from a documented patent/copyright/licen se holder; and
1306	1306
1307	1307	(5) Contracts for projects with federal restrictions on how the funds
1308	1308	may be expended, as documented by the agency and confirmed by
1309	1309	the Department.
1310	1310
1311	1311	(b) An agency seeking s pecific exemptions pursuant to this subsection shall
1312	1312	submit to the Department a determination and finding, or similar
1313	1313	justification memo, in a manner prescribed by the Department. Any
1314	1314	determination and finding or justification memo received by the
1315	1315	Department shall be posted on the Department’s webs ite.
1316	1316
1317	1317	828-837 [RESERVED ]
1318	1318
1319	1319	838 EQUITY AND DEVELOPMENT PARTICIPATION
1320	1320
1321	1321	838.1 Small investors, disadvantaged investors, or certified equity participants shall
1322	1322	receive a m inimum of 20% Equity Participation in any Covered Project.
1323	1323
1324	1324	(a) Small investor as defined by section 2302 of the Act (D.C. Official Code §
1325	1325	2-218.02) means:
1326	1326
1327	1327	(1) An SBE pursuant to section 2332 of the Act; or
1328	1328
1329	1329	(2) A District- domiciled individual with a personal ne t worth that does
1330	1330	not exceed five (5) million dollars, excluding the value of his or
1331	1331	her primary residence.
1332	1332
1333	1333	(b) (1) To be a District- domiciled individual: 28
1334	1334
1335	1335
1336	1336
1337	1337	(A) The District of Columbia must be the present fixed place of
1338	1338	residence of the individual to which he or she returns
1339	1339	following temporary absences and at which he or she
1340	1340	intends to reside indefinitely; and
1341	1341
1342	1342	(B) The District of Columbia must be the individual’s only
1343	1343	domicile.
1344	1344
1345	1345	(2) For an individual to establish that he or she is domiciled in the
1346	1346	District, the individual must submit sufficient evidence to the
1347	1347	Department, including providing the following:
1348	1348	(A) Copies of a District of Columbia deed or lease in the
1349	1349	District of Columbia covering the twelve (12) consecutive months preceding the Department’s evaluation for premises
1350	1350	at which the individual resides;
1351	1351	(B) Copies of utility bills for utility services provided in the
1352	1352	District of Columbia residence covering the twelve (12)
1353	1353	consecutive months preceding the Department’s evaluation;
1354	1354	(C) Copies of earnings and leave statements (i.e., pay stubs)
1355	1355	that show residency in the District of Columbia and the
1356	1356	withholding of District of Columbia income tax covering
1357	1357	the twelve (12) consecutive months preceding the Department’s evaluation;
1358	1358	(D) Certified copies of District of Columbia and federal income
1359	1359	tax returns for the tax year preceding the Department’s
1360	1360	evaluation;
1361	1361	(E) Copies of voter registration, motor vehicle registration,
1362	1362	driver's license, and non-driver's identification; and
1363	1363	(F) Copies of any other documents required by the Department
1364	1364	that demonstrate that the District is the domicile of the
1365	1365	individual.
1366	1366	(c) (1) Disadvantaged investor as defined by section 2302 of the Act
1367	1367	(D.C. Official Code § 2-218.02) means:
1368	1368
1369	1369	(A) A disadvantaged business enterprise (“ DBE”) pursuant to
1370	1370	section 2333 of the Act (D.C. Official Code § 2-218.33); or
1371	1371
1372	1372	(B) A District-domiciled economically disadvantaged 29
1373	1373
1374	1374
1375	1375	individual.
1376	1376
1377	1377	(2) To be a District-domiciled economically disadvantaged individual,
1378	1378	an individual must be:
1379	1379
1380	1380	(A) A District-domiciled individual , as defined by § 838.1(b) ;
1381	1381	and
1382	1382
1383	1383	(B) Economically disadvantaged, as defined by § 804.1(b).
1384	1384
1385	1385	(d) (1) Certified equity participant as defined by section 2302 of
1386	1386	the Act means a single- purpose legal entity created to participate in
1387	1387	real estate development projects and includes members that are
1388	1388	small investors or disadvantaged investors.
1389	1389
1390	1390	(2) The Department sh all verify that each single-purpose legal entity
1391	1391	meets the definition of certified equity participant to be designated
1392	1392	as such.
1393	1393
1394	1394	(e) The Department will determine the manner in which the documents
1395	1395	required in this section shall be submitted.
1396	1396
1397	1397	(f) The documents required to prove District domicile under this section must
1398	1398	be submitted to the Department in a single submission.
1399	1399	(g) Each year throughout the duration of the Covered Project, each small
1400	1400	investor and disadvantaged investor shall provide the Departme nt in a
1401	1401	single submission updated documents proving District-domicile status.
1402	1402	These updated documents shall be submitte d by the end of the same month
1403	1403	as the initial submission required by § 838.1(f) ( e.g., if the initial
1404	1404	submission was in February, by the end of each February thereafter) .
1405	1405	(h) A certified equity participant, small investor, or disadvantaged investor
1406	1406	will retain its designation for the duration of the Covered Project in which
1407	1407	it is an Equity Participant, as required by section 2349a of the Act (D.C.
1408	1408	Official Code § 2-218.49a) and this chapter, provided the entity or
1409	1409	individual remains in compliance with the Act and thi s chapter.
1410	1410	838.2 As appropriate, the Department may provide guidance to District agencies,
1411	1411	business enterprises, and interested members of the public regarding the equity
1412	1412	and development participation requirements.
1413	1413	838.3 An agency considering a solicitation for a Covered Project may contact the
1414	1414	Department as needed to coordinate outreach efforts to Equity Par ticipants and
1415	1415	Development Participants and provide the Department with the specific details
1416	1416	regarding the Covered Project. 30
1417	1417
1418	1418
1419	1419
1420	1420	838.4 With respect to public and private development (PPD) related solicitations,
1421	1421	including Requests for Proposals ("RFPs"), Invita tions for Bids ("IFBs"),
1422	1422	Requests for Qualifications ("RFQs"), and Calls for Expressions of Interest,
1423	1423	issued by District agencies in connection with Covered Projects, to the extent
1424	1424	required by the Act and these rules, the solicitation shall include t he Equity
1425	1425	Participation and Development Participation requirements and a requirement that
1426	1426	the party responding to the solicitation agrees to comply with the Equity
1427	1427	Participation and Development Participation requirements, including submission
1428	1428	to the Department of a separat e “Service Agreement” detailing the specifics of the
1429	1429	terms, conditions and financial requirements of the equity involvement.
1430	1430
1431	1431	838.5 Not more than one (1) business day after the issuance of any request for
1432	1432	proposals, request for qualifications, call for ex pressions of interest or other
1433	1433	similar document relating to any Covered Project, the District agency involved
1434	1434	shall provide the Department with an electronic copy of the document, which the
1435	1435	Department shall post on the Department’s website.
1436	1436
1437	1437	839 EQUITY AND DE VELOPMENT PARTICIPATION REQUIREMENTS
1438	1438
1439	1439	839.1 The Equity Participant(s) shall receive a return on investment in a Covered
1440	1440	Project that is pari passu with all other sources of Sponsor Equity.
1441	1441
1442	1442	839.2 The Equity Participation shall be maintained for the durat ion of the Covered
1443	1443	Project. Completion of the Covered Project shall be measured by the issuance of
1444	1444	one or more certificates of occupancy, certifications of completion, or other
1445	1445	documents evidencing completion as determined by the Department.
1446	1446
1447	1447	839.3 Pursuant to section 2349a(b) of the Act (D.C. Official Code § 2- 218.49a(b)), the
1448	1448	Department shall measure the Development Participation in addition to the
1449	1449	general SBE subcontracting requirements of section 2346 of the Act (D.C.
1450	1450	Official Code § 2-218.46). The Development Participation shall not be used to
1451	1451	satisfy the general SBE subcontracting requirements of section 2346 of the Act.
1452	1452
1453	1453	839.4 The Department may require a beneficiary of a development project that is subject
1454	1454	to section 2349a(b) of the Act to submit a form, provided by the Department, to
1455	1455	calculate and track the Development Participation.
1456	1456
1457	1457	840 EVALUATION OF EQUITY AND DEVELOPM ENT PARTICIPATION
1458	1458
1459	1459	840.1 When evaluating the percentage of Equity Participation by an Equity Participant
1460	1460	in a Covered Project , the Department will take the following into account:
1461	1461
1462	1462	(a) The financing plan for the Covered Project;
1463	1463	31
1464	1464
1465	1465
1466	1466	(b) The amount and nature of leverage in the form of debt or other sources
1467	1467	incurred by the Sponsor Entity;
1468	1468
1469	1469	(c) The amount of institutional equity being provided for the benefit of the
1470	1470	Sponsor Entity;
1471	1471
1472	1472	(d) The amount of mezzanine financing being provided for the benefit of the
1473	1473	Sponsor Entity, including the roles and rights of the mezzanine financer;
1474	1474
1475	1475	(e) The total amount of equity required from the Sponsor Entity;
1476	1476
1477	1477	(f) The percentage of the Sponsor Entity's equity being provided by an Equity
1478	1478	Participant and the terms thereof;
1479	1479
1480	1480	(g) The percentage of institutional equity being provided by an Equity
1481	1481	Participant;
1482	1482
1483	1483	(h) Provisions in funding documents r elated to the sale, dilution, or
1484	1484	conversion of equity interests prior to project completion that may result
1485	1485	in a change in the amount of the Equity Participant's Equity Participation
1486	1486	and ownership;
1487	1487
1488	1488	(i) Whether Equity Participants are treated similarly, w ith respect to the
1489	1489	determination of returns, as compared to other entities with similar risk
1490	1490	profiles on a Covered Project; and
1491	1491
1492	1492	(j) The amount of sweat equity and the categories in which the Equity
1493	1493	Participant(s) is (are) certified.
1494	1494
1495	1495	841 [RESERVED]
1496	1496
1497	1497	842 CHANGES IN EQUITY AND DEVELOPMENT PARTICIPATION
1498	1498
1499	1499	842.1 Once the selection of an Equity Participant or a Development Participant to
1500	1500	participate in a Covered Project has been approved by the Department, there can
1501	1501	be no change in the Equity Participant or Development Participant and no dilution
1502	1502	of a participant's Equity Participation without the express written consent of the
1503	1503	Director.
1504	1504
1505	1505	843 CLOSING REQUIREMENTS REGARDING EQUITY PARTICIPATION
1506	1506
1507	1507	843.1 The closing documents executed in connection with any Covered Project shall
1508	1508	contain provisions indicating there can be no change of the Equity and no dilution
1509	1509	of a participant's Equity Participation without the Director's express written
1510	1510	consent.
1511	1511	32
1512	1512
1513	1513
1514	1514	843.2 The closing documents shall expressly c ovenant and agree that the Department
1515	1515	shall have third- party beneficiary rights to enforce the provisions, for and in its
1516	1516	own right.
1517	1517
1518	1518	843.3 The agreements and covenants in the closing documents shall expressly run in
1519	1519	favor of the Department for the entire period during which the agreements and
1520	1520	covenants shall be in force and effect, without regard to whether the District was
1521	1521	or is an owner of any la nd or interest therein or in favor of which the agreements
1522	1522	and covenants relate.
1523	1523
1524	1524	843.4 The closing documents shall expressly covenant and agree that the Department
1525	1525	shall have the right, in the event of a breach of the agreement or covenant in the
1526	1526	closing documents, to exercise all the rights and remedies – and to maintain any
1527	1527	actions or suits, at law or in equity, or other proceedings to enforce the curing of
1528	1528	the breach of agreement or covenant – to which it may be entitled.
1529	1529
1530	1530	844 EQUITY AND DEVELOPMENT P ARTICIPATION RESTRICTIVE
1531	1531	COVENANT
1532	1532
1533	1533	844.1 If there is a transfer of title to any District-owned land that will become part o f a
1534	1534	Covered Project, the Department may require that a restrictive covenant be filed
1535	1535	on that land requiring compliance with the Equity Participation and Development
1536	1536	Participation requirements of the Act, if applicable.
1537	1537
1538	1538	844.2 A restrictive covenant requir ing compliance with the Equity Participation and
1539	1539	Development Participation requirements of the Act shall run with the land and
1540	1540	otherwise remain in effect until released by the Department following the
1541	1541	completion of construction of and the is suance of certificates of occupancy for the
1542	1542	Covered Project. A release of the restrictive covenant shall be executed by the
1543	1543	Department only after either the developer and the Equity and Development
1544	1544	Participants submit a sworn certification together with documentation
1545	1545	demonstrating to the satisfaction of the Department that, or the Department
1546	1546	otherwise determines that:
1547	1547
1548	1548	(a) The Development Particip ants received at least 20% of the non-
1549	1549	construction development goods and services for the Covered Project, in
1550	1550	addition to the general SBE subcontracting requirements of section 2346
1551	1551	of the Act; and
1552	1552
1553	1553	(b) The Equity Participant has maintained at least a 20% ownership interest in
1554	1554	the Sponsor Entity in the Covered Project throughout its development.
1555	1555
1556	1556	845 [RESERVED]
1557	1557
1558	1558	846 DEPARTMENT ASSISTANCE FOR COVERED PROJECTS
1559	1559	33
1560	1560
1561	1561
1562	1562	846.1 If a District agency receives no response from prospective Equity Participants or
1563	1563	Development Participants to develop a Covered Project, it may contact the
1564	1564	Department for further assistance. The Department may:
1565	1565
1566	1566	(a) Post on its website notices of Equity and Development Participation
1567	1567	opportunities for Covered Projects; and
1568	1568
1569	1569	(b) Assist the Distri ct agency in identifying qualified Equity Participants and
1570	1570	Development Participants by hosting outreach sessi ons.
1571	1571
1572	1572	847 EQUITY OR DEVELOPMENT PARTICIPANT LOSS OF
1573	1573	CERTIFICATION
1574	1574
1575	1575	847.1 If an Equity Participant or Development Participant loses its certified business
1576	1576	enterprise (“CBE”) certification, or an individual no longer qualifies to be an
1577	1577	Equity Participant, during the c ourse of a Covered Project, and the loss of
1578	1578	certification or qualification results in the Covered Project failing to meet t he
1579	1579	minimum Equity Participation or Development Participation requirements under
1580	1580	section 2349a of the Act (D.C. Official Code § 2- 218.49a), the Department will
1581	1581	evaluate whether another Equity Participant or Development Participant can
1582	1582	participate in the Covered Project without causing any detriment to the overall
1583	1583	project or the lead developer, so that the 20% Equity Participation and 20%
1584	1584	Development Participation requirements are met.
1585	1585
1586	1586	848 EQUITY AND DEVELOPMENT REPORTS
1587	1587
1588	1588	848.1 Beneficiaries must submit quarterly reports to the Department regarding the
1589	1589	fulfillment of the Equity Participation and Development Participation Program
1590	1590	requirements on such forms as determined by the Department. The reports shall
1591	1591	include, at a minimum, information regarding:
1592	1592
1593	1593	(a) Changes in own ership interest of the owners/partners;
1594	1594
1595	1595	(b) Additions or deletions of an owner/partner;
1596	1596
1597	1597	(c) Changes in the legal status of an existing owner/partner;
1598	1598
1599	1599	(d) Changes in the percentage of revenue distribution to an owner/partner; and
1600	1600
1601	1601	(e) Each Development Participant, their certified business enterprise (“ CBE”)
1602	1602	certification number, a description and dates of the non- construction
1603	1603	development good and service they provided, the contract amount, a copy
1604	1604	of the executed contract, and any other information required by the
1605	1605	Department.
1606	1606	34
1607	1607
1608	1608
1609	1609	848.2 Information provided under § 848.1(a)-(d) may be considered commercial or
1610	1610	financial information which could result in substantial harm if disclosed to the
1611	1611	competitive position of the provider of the information, and may be exempt from
1612	1612	disclosure under section 204(a)(1) of the District of Columbia Administra tive
1613	1613	Procedure Act, effective March 25, 1977 (D.C. Law 1- 96; D.C. Official Code § 2-
1614	1614	534(a)(1)) .
1615	1615
1616	1616	849 [RESERVED]
1617	1617
1618	1618	850 [RESERVED]
1619	1619
1620	1620	851 SMALL BUSINESS CAPITAL ACCESS FUND
1621	1621
1622	1622	851.1
1623	1623	The Department shall implement and administer the Small Business Capital
1624	1624	Access Fund ("Fund") established purs uant to section 2375 of the Act (D.C.
1625	1625	Official Code § 2-218.75). The Fund is a financing tool designed to sustain and/or
1626	1626	increase the le vel of business activity, job creation and retention, and provide
1627	1627	access to capital for the sustainability and expansion of designated categories of
1628	1628	certified business enterprises (“CBEs ”).
1629	1629
1630	1630	851.2 Monies issued from the Fund may be structured as a grant, loan loss reserve
1631	1631	funding, senior or subordinated secured or unsecured loan, loan guarantee,
1632	1632	collateral, surety, or any other financial assistance, and any issuance of monies
1633	1633	from the Fund shall serve a public purpose identified by the Department. The
1634	1634	Department may, in its discretion, issue grants to assist qualified businesses with
1635	1635	credit facility origination or the provisi on of financial-based professional services
1636	1636
1637	1637	(e.g., grants to assist with hiring a certified public accountant, bookkeeper,
1638	1638	escrow agent, bonding agent, qualified non-profit organization, financial
1639	1639	institution, or professional service provider).
1640	1640
1641	1641	851.3 To be eligible for funding from the Fund a recipient must:
1642	1642
1643	1643	(a) Be certified or eligible to be certified, pursuant to the Act as a small
1644	1644	business enterprise (“SBE”) or disadvantaged business enterprise
1645	1645	(“DBE”);
1646	1646
1647	1647	(b) Be independently owned, operated, and controlled;
1648	1648
1649	1649	(c) Be in good standing with the Department of Consumer and Regulatory
1650	1650	Affairs; and
1651	1651
1652	1652	(d) Have a Certificate of Clean Hands from the Office of Tax and Revenue.
1653	1653
1654	1654	851.4 The following business enterprises are ineligible to receive funding from the
1655	1655	Fund: consumer and marketing cooperatives; dealers of rare coins and stamps;
1656	1656	enterprises engaged in gambling; enterprises engaged in illegal activity; lending 35
1657	1657
1658	1658
1659	1659	firms and loan packaging firms; enterprises engaged in multi-sales distribution;
1660	1660	nonprofits; enterprises engaged in pyramid schemes or multi-level marketing
1661	1661	schemes; real estate investment firms; non-profit institutions; and businesses
1662	1662	engaged in speculation.
1663	1663
1664	1664	851.5 To the extent consistent with the grant agreement or other agreement between the
1665	1665	Department and an eligible recipient, the recipient may use proceeds from the
1666	1666	Fund for the following purposes:
1667	1667
1668	1668	(a) Working capital;
1669	1669
1670	1670	(b) Inventory;
1671	1671
1672	1672	(c) Acquisition or repair of furniture, fixtures, machinery, or equipment;
1673	1673
1674	1674	(d) Ecologically efficient improvements;
1675	1675
1676	1676	(e) Purchase or implementation of financial management systems (e.g., point
1677	1677	of sale, upgrades to meet prime contractor standards);
1678	1678
1679	1679	(f) Leasehold improvements;
1680	1680
1681	1681	(g) Property renovation; or
1682	1682
1683	1683	(h) Financial and/or Procurement-based professional services.
1684	1684
1685	1685	851.6 The Department will develop underwriting criteria and rates and terms for
1686	1686	funding from the Fund. Such cri teria will include, at minimum, the maximum
1687	1687	funding amount(s), interest rate(s) and any applicable deferral per iods, term
1688	1688	limits, security or collateral requirements and fees and costs. The Department will
1689	1689	include the underwriting criteria with the application and/or publish the
1690	1690	underwriting criteria on its website. The Department may modify the
1691	1691	underwriting criteria as necessary to account for changes in budgeted amounts of
1692	1692	the Fund or changing needs of the local business community. The Department
1693	1693	may work with a qualified non- profit organization or financial institution to
1694	1694	develop or modify, as necessary , the underwriting criteria.
1695	1695
1696	1696	851.7 An eligible recipient seeking funding from the Fund shall submit a written
1697	1697	application to the Department or to a qualified non- profit organization and/or
1698	1698	financial institution designated by the Department on such form or forms as may
1699	1699	be prescribed or approved by the Department. The application shall include, at a
1700	1700	minimum, submission of the following documents and information:
1701	1701
1702	1702	(a) Current CBE Certification and evidence that the applicant is certified as an
1703	1703	SBE or DBE or evidence that the ap plicant is eligible to be certified as a
1704	1704	SBE or DBE; 36
1705	1705
1706	1706
1707	1707
1708	1708	(b) Clean Hands Certification from the Office of Tax and Revenue;
1709	1709
1710	1710	(c) Certificate of Good Standing from the Department of Consumer and
1711	1711	Regulatory Affairs;
1712	1712
1713	1713	(d) Financial status of the applicant, including current and past tax returns,
1714	1714	balance sheet(s) and profit and loss statements;
1715	1715
1716	1716	(e) Amount of funding from the Fund requested by the applicant;
1717	1717
1718	1718	(f) Reason for requesting funding from the Fund; and
1719	1719
1720	1720	(g) Any other information or documents the Departme nt may require in order
1721	1721	to assess the applicant's eligibility and/or credit worthiness.
1722	1722
1723	1723	851.8 Within sixty (60) days of receipt of a complete application, the Department or its
1724	1724	non-profit or financial institution partner shall notify the applicant whether the
1725	1725	funding request has been approved, denied, or if additional information is needed
1726	1726	to make a determination. If an application is denied, the Department or its non-
1727	1727	profit/financial institution partner shall provide the applicant an explanation of t he
1728	1728	underwriting determination.
1729	1729
1730	1730	851.9 The Department may, in its discretion, require the potential borrower or borrower
1731	1731	to participate in targeted training, technical assistance, and/or periodic monitoring
1732	1732	to help strengthen business operations as a condition of funding from the Fund or
1733	1733	as a pre-condition for future funding.
1734	1734
1735	1735	899 DEFINITIONS
1736	1736
1737	1737	899.1 The definitions set forth in the Act ar e incorporated by reference into this chapter.
1738	1738	As used in this chapter, the following words and phrases shall have the meanings
1739	1739	ascribed:
1740	1740
1741	1741	Act – the Small and Certified Business Enterprise Development and Assistance
1742	1742	Act of 2005, effective October 20, 2005 (D.C. Law 16- 33; D.C. Official Code §
1743	1743	2-218.01).
1744	1744
1745	1745	Application date - the date on which the Department receives an application.
1746	1746
1747	1747	Certificate - a letter issued by the Department indicating that a firm is a business
1748	1748	enterprise or joint venture certified pursuant to Part D of the Act (D.C. Official
1749	1749	Code § 2- 218.31 et seq.).
1750	1750
1751	1751	Contractor - any natural person or business organization, such as a corporation,
1752	1752	partnership, joint venture, limited liability company, or similar enterprise that 37
1753	1753
1754	1754
1755	1755	enters into a contract wi th the District, a public employee, or private developer to
1756	1756	provide goods or services.
1757	1757
1758	1758	Construction - the building, alteration, repair, or improvement of real property.
1759	1759	This term does not include the operation or routine maintenance of real property.
1760	1760
1761	1761	Covered Project - any development project conducted pursuant to a disposition
1762	1762	under section 1 of An Act Authorizing the sale of certain real estate in the District
1763	1763	of Columbia no longer required for public purposes, approved August 5, 1939 (53
1764	1764	Stat. 1211; D .C. Official Code § 10-801).
1765	1765
1766	1766	Day - a calendar day.
1767	1767
1768	1768	Development Participant - a small business enterprise (“SB E”) or certified
1769	1769	business enterprise (“CBE”) that participates in one or more phases of project
1770	1770	development in a Covered Project in accordance with section 2349a(b) of the Act
1771	1771	(D.C. Official Code § 2-218.49a(b)).
1772	1772
1773	1773	Development Participation - participation on a Covered Project performed by a
1774	1774	small business enterprise (“SBE”) or certified business enterprise (“CBE”) in
1775	1775	accordance with section 2349a(b) of the Act (D.C. Official Code § 2- 218.49a(b)).
1776	1776
1777	1777	Development Project –
1778	1778
1779	1779	(a) Means a government -assisted project involving either:
1780	1780
1781	1781	(1) The private development or redevelopment of real property
1782	1782	improvements conducted pursuant to a disposition under
1783	1783	section 1 of An Act Authorizing the sale of certain real
1784	1784	estate in the District of Columbia no longer required for
1785	1785	public purpos es, approved August 5, 1939 (53 Stat. 1211;
1786	1786	D.C. Official Code § 10- 801); or
1787	1787
1788	1788	(2) Private development or redevelopment of real property
1789	1789	improvements to which the District has contributed through
1790	1790	a grant at least 15% of the development costs or $500,000,
1791	1791	whichever is less.
1792	1792
1793	1793	(b) Shall not include improvements on real property where the owner
1794	1794	will occupy at least 25% of the real property and the development
1795	1795	budget is $ 500,000 or less.
1796	1796
1797	1797	Eligible Recipient - a business enterprise as defined in section 2375(a)(1) of the
1798	1798	Act (D.C. Official Code § 2- 218.75(a)(1)).
1799	1799	38
1800	1800
1801	1801
1802	1802	Entity - an organization, including a corporation, partnership, limited liability
1803	1803	company, sole proprietor, or trust.
1804	1804
1805	1805	Equity Participant - a small investor, disadvantaged investor or certified equity
1806	1806	participant that, in accordance with the Act , provides capital or other monetarily
1807	1807	valued services in exchange for an ownership interest in a Covered Project.
1808	1808
1809	1809	Equity Participation - an ownership interest acquired by an Equity Participant in a
1810	1810	Covered Project.
1811	1811
1812	1812	Fiscal year - October 1 of each year through September 30 of the following year.
1813	1813
1814	1814	Fixed Assets - Any long-term item of economic value owned by an individual or
1815	1815	corporation, especially that which could be converted to cash, that the owner does
1816	1816	not expect to convert into cash in less than one year . Examples are buildings,
1817	1817	office equipment (not supplies), vehicles, computers, and other property.
1818	1818
1819	1819	Good Faith Efforts - a bidder/offeror’s unsuccessful actions to meet established
1820	1820	goals, including all necessary and reasonable steps taken, such as conducting
1821	1821	market research, strategic outreach, advertisements, and contacting the
1822	1822	Department’s Business Opportunities Division for assistance.
1823	1823
1824	1824	Grant - a public subsidy for which the District does not anticipate repayment, such
1825	1825	as a cash contribution, tax increment financing, payment in lieu of taxes, or
1826	1826	similar programs or agreements. A grant shall not include a public contribution
1827	1827	for which the District anticipates repayment, such as a loan.
1828	1828
1829	1829	Legal Holiday – a public holiday observed by the District of Columbia, on which
1830	1830	the District of Columbia government is closed.
1831	1831
1832	1832	Principal Office – a business’s corporate headquarters where the central
1833	1833	operational, financial and recordkeeping functions of the business occur.
1834	1834
1835	1835	Respondent - an applicant for or holder of a certificate against whom a denial or
1836	1836	adverse action is proposed or taken.
1837	1837
1838	1838	Site Visit - an announced or unannounced, on- site, comprehensive review of a
1839	1839	business operation to determine compliance or continued eligibility for
1840	1840	certification as a local business enterprise.
1841	1841
1842	1842	Sponsor Equity - the equity that is intended to be contributed by the non-
1843	1843	institutional investors or by the private developer, excluding debt financing,
1844	1844	mezzanine financing, or other equity contributions by limited or institutional
1845	1845	investors.
1846	1846	39
1847	1847
1848	1848
1849	1849	Sponsor Entity - an individual or an entity with the day- to-day responsibilities for
1850	1850	a development project (e.g., a Managing Member, or a General Partner).
1851	1851
1852	1852	Spot Check - an unannounced cursory, on- site inspection of a certified business
1853	1853	enterprise (“C BE”) headquarters to ensure continued compliance with eligibility
1854	1854	requirements of the Act and these regulations.
1855	1855	2
1856	1856
1857	1857	GOVERNMENT OF THE DISTRICT OF COLUMBIA
1858	1858	O
1859	1859	FFICE OF THE ATTORNEY GENERAL
1860	1860
1861	1861	BRIAN L. SCHWALB PRIVILEGED AND CONFIDENTIAL
1862	1862	ATTORNEY GENERAL ATTORNEY-CLIENT COMMUNICATION
1863	1863
1864	1864
1865	1865
1866	1866	LEGAL COUNSEL DIVISION
1867	1867
1868	1868	MEMORANDUM
1869	1869
1870	1870	TO: Tommy Wells
1871	1871
1872	1872	Director
1873	1873	Office of Policy and Legislative Affairs
1874	1874
1875	1875
1876	1876	FROM: Megan D. Browder
1877	1877	Deputy Attorney General
1878	1878	Legal Counsel Division
1879	1879
1880	1880	DATE: March 7, 2023
1881	1881
1882	1882	SUBJECT: Legal Sufficiency Certification – “Small and Local Business Development
1883	1883	Rulemaking Approval Resolution of 2023”
1884	1884
1885	1885	(AE-19-754 C)
1886	1886	_____________________________________________________________________________________
1887	1887
1888	1888	This is to Certify that this Office has reviewed the above- referenced draft
1889	1889	resolution and found it to be legally sufficient. If you have any questions in this regard, please do
1890	1890	not hesitate to call me at (202) 724-5524.
1891	1891
1892	1892
1893	1893
1894	1894
1895	1895	_________________________________
1896	1896	Megan D. Browder
1897	1897
1898	1898
1899	1899