NOTICE Ordinance #5959 AN ORDINANCE TO AMEND THE CODE OF ORDINANCES OF MEMPHIS, TENNESSEE REGARDING THE SMALL BUSINESS ENTERPRISE OPPORTUNITY PROGRAM WHEREAS, from time to time it is necessary to amend the Code of Ordinances to meet the current needs of the citizens of Memphis; and WHEREAS, NOW, THEREFORE, BE IT RESOLVED that the Memphis City Council hereby amends the Code of Ordinances to add Article XI to Chapter 2 relative to the Small Business Enterprise Opportunity Program as follows: Sec. 6-2-407. — Short Title. This chapter shall be known as the "City of Memphis Small Business Enterprise Program." Sec. 6-2-408. — Definitions. The following words, terms and phrases, when used in this chapter, shall have the meanings ascribed to them in this section, except where the context clearly indicates a different meaning: Bid means a quotation, proposal, sealed bid or offer to perform or provide labor, materials, supplies or services to the city for a price on an eligible project, or for an eligible project that generates revenue for the City. Bidder means any individual, sole proprietorship, partnership, joint venture, or corporation that submits a bid to the City. Certification or recertification means official recognition and approval by the entity designated by the City of Memphis (“Certifying Entity”) that a business meets the qualification criteria of a small business enterprise, as set forth in this chapter. Certification or recertification relates to qualifications regarding ownership, control, and not the quality of the service or product. City means the City of Memphis. Commercially useful function. To determine whether a business enterprise is performing a commercially useful function, the Certifying Entity shall consider all the facts in the record, viewed as a whole, including without limitation the following: 1. A small business enterprise (“SBE”) performs a commercially useful function when it is responsible for execution of the work of the contract and is carrying out its responsibilities by performing, managing, and supervising the work involved. 2. To perform a commercially useful function, the SBE must be responsible, with respect to material and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself. 3. To determine whether an SBE is performing a commercially useful function, the Certifying Entity will evaluate the amount of work subcontracted by the SBE, industry practices regarding subcontracting, whether the amount the SBE is to be paid under the contract is commensurate with the work it is performing, the SBE credit claimed for its performance of the work, and other relevant factors. 4. An SBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed to obtain the appearance of SBE participation. In determining whether an SBE is such an extra participant, the Certifying Entity will examine similar transactions, particularly those in which SBEs do not participate. Contract means and includes any agreement between the City and a person or business enterprise to provide or procure labor, materials, equipment, supplies and services to, for or on behalf of the City. The term "contract" shall include an agreement between the City and a person or business enterprise to perform professional architectural and engineering services, construction related services or fund the performance of such services, non-professional services and/or goods. Except as otherwise specifically defined in this section, the term "contract" does not include: 1. Awards made by the City to a nonprofit entity which the City offers assistance, guidance, or supervision on a project or program and the recipient of the grant award uses the grant moneys to provide services to the community; 2. Sales transactions where the City sells its personal or real property; 3. A loan transaction where the City is acting as a debtor or a creditor; 4. Lease and franchise agreements; 5. Agreements to use City real property; or 6. Gifts of materials, equipment, supplies or services to the City. Contractor means a prime contractor or vendor on a City contract. Control or controlled. To determine whether the owner or owners of a potential SBE (as used in this definition, "SBE owner," which shall denote one or more owners) controls the potential SBE, the Certifying Entity shall consider all the facts in the record, viewed as a whole, including without limitation the following: 1. For a SBE owner to be deemed to control, the potential SBE must be independent. An independent business enterprise is a business whose viability does not depend on its relationship with another firm. a. In determining whether a potential SBE is independent, the Certifying Entity will scrutinize affiliate relationships the SBE has with other firms, in such areas as personnel, facilities, equipment, financial and/or bonding support, and other resources. The Certifying Entity will consider whether present or recent employer/employee relationships between the SBE owner and other firms or persons associated with other firms compromise the independence of the potential SBE. b. The Certifying Entity will examine the potential SBE's relationships with prime contractors to determine whether a pattern of exclusive or primary dealings with a prime contractor compromises the independence of the potential SBE. c. In considering factors related to the independence of a potential SBE, the Certifying Entity will consider the consistency of relationships between the potential SBE and other firms with normal industry practice. 2. A potential SBE must not be subject to any formal or informal restrictions which limit the customary discretion of the SBE owner. There can be no restrictions through corporate charter provisions, bylaw provisions, contracts or any other formal or informal devices (e.g., cumulative voting rights, voting powers attached to different classes of stock, employment contracts, requirements for concurrence by persons other than the SBE owner, conditions precedent or subsequent, executory agreements, voting trusts, restrictions on or assignments of voting rights) that prevent the SBE owner, without the cooperation or vote of any other individual, from making any business decision of the business enterprise. This subsection does not preclude a spousal co-signature on documents. 3. The SBE owner must possess the power to direct or cause the direction of the management and policies of the business enterprise and to make day-to-day as well as long-term decisions on matters of management, policy and operations. a. An SBE owner must hold the highest officer position in the company (e.g., chief executive officer or president). b. In a corporation, the SBE owner must control the board of directors. c. In a partnership, the SBE owner must serve as a general partner, with control over all partnership decisions. 4. Individuals who are not the SBE owner may be involved in an SBE as owners, managers, employees, stockholders, officers, and/or directors. Such individuals must not, however, possess or exercise the power to control the business enterprise, or be disproportionately responsible for the operation of the business enterprise. 5. The SBE owner may delegate various areas of the management, policymaking, or daily operations of the business enterprise to other participants in the firm. Such delegations of authority must be revocable, and the SBE owner must retain the power to hire and fire any person to whom such authority is delegated. The managerial role of the SBE owner in the business enterprise's overall affairs must be such that the Certifying Entity can reasonably conclude that the SBE owner exercises control over the business enterprise's operations, management, and policy. 6. The SBE owner must have an overall understanding of, and managerial and technical competence and experience directly related to the type of business in which the business enterprise is engaged and the business enterprise's operations. The SBE owner is not required to have experience or expertise in every critical area of the business enterprise's operations, or to have greater experience or expertise in a given field than managers or key employees. The SBE owner must have the ability to intelligently and critically evaluate information presented by other participants in the business enterprise's activities and to use this information to make independent decisions concerning the business enterprise's daily operations, management, and policymaking. Generally, expertise limited to office management, administration, or bookkeeping functions unrelated to the principal business activities of the business enterprise is insufficient to demonstrate control. 7. If state or local law requires the owner of a particular type of firm to have a particular license or other credential, then the SBE owner of that type of firm must possess the required license or credential to be deemed in control. If state or local law does not require an owner to have such a license or credential, the Certifying Entity will not deny certification solely on the ground that the SBE owner lacks the license or credential. However, the Certifying Entity may consider the absence of the license or credential as one factor in determining whether the SBE owner controls the firm. 8. The Certifying Entity may consider differences in remuneration between the SBE owner and other participants in the business enterprise in determining whether the SBE owner controls the business enterprise. Such consideration shall be in the context of the duties of the persons involved, normal industry practices, the business enterprise's policy and practice concerning reinvestment of income, and any other explanations for the differences proffered by the business enterprise. The Certifying Entity may determine that a business enterprise is controlled by its SBE owner although the SBE owner's remuneration is lower than that of some other participants in the business enterprise. In a case where someone other than the SBE owner formerly controlled the business enterprise, and the SBE owner now controls it, the Certifying Entity may consider a difference between the remuneration of the former and current owner of the business enterprise as a factor in determining who controls the business enterprise, particularly when the former owner remains involved with the business enterprise and continues to receive greater compensation than the current SBE owner. 9. To be viewed as "controlling" a business enterprise, an SBE owner cannot engage in outside employment or other business interests that conflict with the management of the business enterprise or prevent the SBE owner from devoting sufficient time and attention to the affairs of the business enterprise to control its activities. For example, absentee ownership of a business and part-time work in a full-time firm are not viewed as constituting control. However, an SBE owner could be viewed as "controlling" a part-time business that operates only on evenings and/or weekends, if the SBE owner controls the business enterprise when it is operating. 10. An SBE owner may control a business enterprise even though one or more of the SBE owner's immediate family members participate in the business enterprise as a manager, employee, owner, or in another capacity. Except as otherwise provided in this subsection, the Certifying Entity must make a judgment about the control the SBE owner exercises vis-a-vis other persons involved in the business enterprise as it does in other situations, without regard to whether or not the other persons are immediate family members. If the Certifying Entity cannot determine that the SBE owner—as distinct from the family as a whole—controls the business enterprise, then the SBE owner has failed to carry her/his burden of proof concerning control, even though he/she may participate significantly in the business enterprise's activities. Day or days refers to calendar days. Eligible project means: 1. Any City contract with a participation goal attached as identified by the Division of Finance, through its Business Services department (“Business Services”) or designee thereof, excluding sole source procurement, emergency procurement, and contracts governed by 49 CFR 23 and 26. 2. For purposes of this chapter, contract or project "value" shall mean either the expenditure of funds by the City, or the generation of revenue for the City by a contractor as a direct result of a City contract. Joint venture means an association of two or more persons, partnerships, corporations, or any combination of them, established to carry on a single business activity that is limited in scope and duration. The agreement establishing the joint venture, partnership or other multi-entity relationship shall be in writing. Further, participation in a joint venture shall be based on the sharing of real economic interest in the venture and shall include proportionate control over management, interest in capital acquired by the joint venture and interest in earnings. Local business means that the vendor or contractor has a valid domestic type County and state business license, issued at least one year prior to the bid or proposal opening date, to do business in said locality that authorizes the business to provide the goods, services, or construction to be purchased, and the physical principal business address located within the city limits, in an area zoned for the conduct of such business, from which the vendor operates or performs the majority of its business on a day-to-day basis, and also from which the vendor conducts 100 percent of the necessary functions to maintain or fulfill the contract with the city. Post office boxes are not verifiable and shall not be used for the purpose of establishing said address. Memphis MSA means the geographical area consisting of the following counties: Shelby, Fayette, Tipton, Desoto, Marshall, Tate, Tunica, and Crittenden. Business Services means the Business Services Department of the Finance Division of the City of Memphis. The duties and functions of Business Services shall be defined and amended as needed by the Director of the City division in which the office operates. Owned or ownership. In determining whether a potential SBE is owned and operated by an individual or individuals, the Certifying Entity will consider all of the facts in the record, viewed as a whole, including, without limitation, the following: 1. The Certifying Entity shall deem the owner of a business enterprise to be whoever possesses at least 51 percent of the business enterprise. There may be more than one owner. a. In the case of a corporation, such an individual must possess at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding. b. In the case of a partnership, such individual must possess at least 51 percent of each class of partnership interest. Such ownership must be reflected in the business enterprise's partnership agreement. c. In the case of a limited liability company, such individual must possess at least 51 percent of each class of member interest. 2. The Certifying Entity must find that the individual's ownership is real, substantial, and continuing, going beyond proforma ownership of the business enterprise as reflected in ownership documents. The individual must enjoy the customary incidents of ownership and share in the risks and profits commensurate with their ownership interests, as demonstrated by the substance, not merely the form, of arrangements. Purpose and intent. The City shall give a local preference to local businesses within its geographical limits in awarding City contracts and making purchases whenever the application of such a preference is reasonable in light of the dollar value of the proposal received in relation to such expenditures. SBE Status means whether a firm meets the qualification criteria of a small business enterprise, as set forth in this chapter. Small Business Enterprise (SBE) means a firm with its headquarters and/or principal office located in the City and is an independent and continuing enterprise for profit, performing a commercially useful function which is owned and controlled by one or more persons and for which the gross revenues or number of employees averaged over the past three years, inclusive of any affiliates as defined by 13 CFR 121.103, does not exceed ten million dollars ($10,000,000) or three hundred (300) employees. Small Business Owner means a person who owns the business enterprise for which the owner is seeking SBE certification from the City or approved certifying agencies. Supplier means a warehouse or manufacturer of materials, supplies or equipment which contracts directly with a bidder to provide such materials, supplies or equipment on an eligible project which involves a trade or service. For purposes of measuring the total contract dollars awarded or paid to suppliers on eligible projects, only amounts paid to suppliers of goods customarily and ordinarily used based upon standard industry or trade practices shall be counted. Sec. 6-2-409. — Statement of policy. It is the purpose of this chapter to promote the economic welfare of the people of the City, to promote business opportunity for all persons doing business with the City, and to promote commerce by assisting SBEs to actively participate in the City’s procurement process. SBEs represent 89 percent of the businesses in the United States and 30 percent of the business revenue nationwide, according to the United States Bureau of Census. Also, according to the United States Bureau of Census, in the Memphis metropolitan statistical area, 73 percent of establishments have less than ten employees and 94 percent of establishments have less than 50 employees. The City, through Business Services, shall develop a policy and manual to detail the process, procedure, and methodology for setting SBE goals and utilization of the designated SBE sheltered market. Business Services shall set annually, at the beginning of each fiscal year, an aspirational SBE goal for certain designated categories of prime contracts. The annual aspirational SBE goal may be broken down by Division as outlined in the Business Services policy and manual. Additionally, Business Services shall set SBE subcontracting goals based on SBE availability for construction, architecture, engineering, surveying, commodities, and services in accordance with the Business Services policy and manual. Sec. 6-2-410. — Duties of Business Services. Under this chapter, Business Services shall have the following authority and duties for the implementation of the Small Business Enterprise program under this chapter: 1. Administration and enforcement of this chapter and of the federal disadvantaged business enterprise program as per 49 CFR parts 23 & 26. 2. Establishment of written policy, manual, procedures, informal guidelines, and forms as may be necessary to effectuate this chapter. 3. Monitoring compliance with the requirements of this chapter. 4. Accept valid and current proof of certification of businesses as SBEs from approved certifying entities in accordance with the standards set forth in this chapter. 5. Development of databases to be maintained as a public record of certified SBEs. 6. Investigation of alleged violations of this chapter, and the issuance of written statements following any determination of such investigation, stating the reasons therefor and any penalty to be imposed. 7. Collaborating with the various City divisions to ensure maximum outreach to SBEs. 8. Determination of whether any of the penalties set forth in Section 6-94-17 should be applied to a business. 9. Attendance at pre-bid, pre-proposal, pre-construction and pre-work conferences. 10. Provision to business entities of all forms, applications, documents and papers necessary to comply with this chapter. 11. Provision of information to potential bidders, upon request by the potential bidder, which shall include names and contact information of certified SBEs, to reinforce and support outreach efforts by potential bidders. 12. Notification by certified mail that a bidder who has bid on and who otherwise would have been awarded a contract has the right to appeal a determination of noncompliance with this chapter, with said appeal to be decided by Business Services within seven calendar days of receipt of the notice of noncompliance. 13. Notification by certified mail that an applicant who has been denied certification as an SBE has the right to appeal such determination, said appeal to be determined by Business Services within seven calendar days of receipt of the notice of such determination. 14. Notification to the purchasing agent of any determination of noncompliance with this chapter, and of any appeal from any such determination. 15. Monitoring, for data gathering and informational purposes, utilization of SBEs on eligible projects. 16. Maintenance of documents, forms, records or data regarding this program as provided in this chapter including: a. Documents, forms, records or data regarding the dollar amounts subcontracted to or expended for services performed by subcontractors and suppliers on eligible projects, including the SBE status of each subcontractor and supplier; and b. Documents, forms, records or data regarding certified SBEs. 17. Development and implementation of outreach and assistance programs to promote contracting opportunities for all businesses that wish to do business with the City, regardless of SBE status. 18. Establishment of SBE citywide aspirational goals and project specific goals. 19. Identify targeted procurements for SBE-only competition, depended on SBE availability. 20. The duties of Business Services should include supporting the various City divisions in achieving their established Small Business Enterprise goals, as well as providing business development assistance to the local business community. This support should cover, but not be limited to, the following activities: (a) Supply comprehensive resources, including informational materials, toolkits, and training sessions to assist divisions in meeting SBE goals. (b) Offer expert advice and consulting services to help divisions understand and navigate SBE objectives effectively. (c) Collaborate with divisions to develop strategic plans that align with SBE goals, ensuring a clear path to success. (d) Facilitate the identification and establishment of partnerships with potential small businesses, promoting mutual benefits and collaboration. (e) Organize and conduct training sessions and workshops focused on best practices for engaging with small businesses and achieving SBE objectives. (f) Implement monitoring and evaluation processes to assess progress towards SBE goals and provide feedback for continuous improvement. (g) Create and promote networking events to encourage interaction among divisions and small business partners, enhancing collaboration and opportunities. (h) Maintain open lines of communication with all divisions to ensure they are informed about available resources and opportunities related to SBE initiatives. (i) Act as an advocate for small business interests within the organization, ensuring that their needs and contributions are recognized and valued. (j) Keep detailed records of activities, partnerships, and progress toward SBE objectives, providing regular reports to leadership on outcomes and areas for development. (k) Conduct research to identify trends, challenges, and opportunities in the small business landscape to inform strategies and support for divisions. (l) Establish a system for gathering feedback from divisions and small business partners to inform ongoing improvements and tailor support services accordingly. (m) Establish mentorship opportunities that connect new business owners with experienced entrepreneurs for guidance and support. (n) Provide resources and connections to funding sources, such as grants, loans, and investment opportunities. (o) Serve as a central resource for local entrepreneurs by offering access to information and tools that foster business growth. Sec. 6-2-411. — Small business assistance. Business Services shall act as a resource for information on small business enterprises and entrepreneurs. Business Services shall also undertake to raise the consciousness of SBEs about City business opportunities and provide information on taking advantage of the program benefits. Further, the City shall provide the following assistance to small business enterprises: 1. Access to training; technical assistance. Business Services shall act as a resource for technical assistance. The office shall collect, organize and disseminate information regarding available technical assistance providers in the Memphis market area. 2. Capital; financing assistance. Business Services shall act as a resource for financial assistance. The office shall collect, organize and disseminate information regarding available capital or financing sources in the Memphis market area. 3. Bonding assistance. Business Services shall provide SBEs with information regarding bonding including, providing a list of qualified service providers that supply bonding services. 4. Access to markets. Business Services will work to facilitate access to markets for SBEs, working with the office of planning and development (OPD) and other development entities to connect eligible businesses to City, state and federal programs that promote investment and encourage employment, including but not limited to the various hub zone, enterprise zone, and tax allocation districts. Business Services may monitor in conjunction with OPD SBE involvement in procurement opportunities generated by OPD. Sec. 6-2-412. — City-maintained records and reports. The effectiveness of the SBE Program will be measured by a review of data indicating prime, subcontractor and supplier awards to SBEs. Program effectiveness measurements will also include efforts by City staff to provide prime contracting opportunities for SBEs. In order to ensure the effective tracking of these efforts, the following shall be done: 1. Each contractor shall continuously maintain, compile, and provide to Business Services, monthly, information relating to its use of SBEs on the City project. This information shall include without limitation the following information for each of the SBE subcontractors and suppliers utilized by the contractor on the City project: a description of the categories of contracts awarded to SBEs; the dollar value of contracts awarded to SBEs; and contact information for the SBEs. Additionally, the contractor shall provide information regarding its progress toward attaining the SBE goal on the city project. 2. Within 30 days after the end of a contract in which there was an SBE goal, each contractor shall provide Business Services with a report that summarizes the outcome of the project information, including without limitation: the identity of and contract information for each SBE to whom the contractor has awarded a subcontract or supplier agreement; the type of work performed or supplies provided by each subcontractor/supplier; the dollar value of each of the subcontracts/supplier agreements; and the total percentage of the value of the City contract subcontracted to SBE subcontractors and/or suppliers. 3. The purchasing department shall provide Business Services with information regarding every City contract on which the prime contractor is an SBE or on which an SBE is part of a joint venture or mentor protege team serving as the prime contractor. The information shall include the name and contact information of the SBE, the type of contract, and the dollar value of the contract. 4. Business Services shall prepare a consolidated report based on a compilation and analysis of the reports submitted by each contractor and information from the purchasing department regarding the City’s use of SBEs as prime contractors. The consolidated report will identify and assess the awards to SBEs of City contracts, prime contractors' use of SBE subcontractors and suppliers, prime contractors' progress in achieving SBE subcontract goals, and other SBE development and contracting efforts. Specifically, Business Services will maintain records and prepare reports showing: (a) Awards to SBE subcontractors and suppliers, including names of contractors and subcontractors, nature of the work/services performed, and the percentage of SBE participation per contract. The City will obtain regular reports from prime contractors on their progress in meeting contractual SBE commitments; (b) Specific efforts by contractors to identify and award contracts to SBEs; (c) Copies of direct mailings by contractors to SBEs; (d) City contracts awarded to SBEs or prime contractors in which an SBE was a joint venture partner or part of a mentor protege team. This information shall include without limitation the name and contact information of the SBEs, the type of contract, and the dollar value of the contract; (e) Pre-bid conference information as it relates to the SBE program; (f) Requests for assistance from SBEs interested in bidding/proposing on city contracts and subcontracts; (g) Workshops, seminars and training programs conducted for SBEs; and (h) Efforts to assist SBEs in acquiring bonding and insurance. 5. Business Services will submit annual SBE participation reports to the Council. These reports shall include a summary of the information described in this section, plus an analysis of the total dollar value of City contracts/subcontracts awarded to SBEs during the preceding year, categorized by prime contracting dollars, subcontracting dollars, and supplier dollars. The percentage of the total dollar value of these contracts that was awarded to SBEs during the preceding year shall also be provided. Sec. 6-2-413. — Small business enterprise program goals and counting procedures. A. The Business Services Manager or appropriate designee in conjunction with the purchasing agent will set an SBE subcontracting goal based on the established goal-setting methodology in the Business Services policy and manual for each specific prime contract with subcontracting and/or supplier possibilities, but shall have the authority to reduce or eliminate such SBE goal on a contract-bycontract basis based upon the type of contract, the type of subcontracting work that will be required, and the availability of SBEs therefor. Every bidder on an eligible project shall be required to submit, with its bid submission, the names, address, certification numbers, if applicable, of certified SBEs or firms that have applied for SBE certification at the time of the bid submission, and any other information required by Business Services as set forth in the project's solicitation documents. B. SBE participation is counted as follows: 1. The City will only give bidders credit toward the SBE goal(s) for those SBEs that are certified as of the bid or proposal due date. 2. Once a firm is certified as an SBE, the total dollar value of the subcontractor or supplier contract awarded to the SBE by the contractor is counted toward the applicable SBE goal. However, if a firm who is listed on the contract as having its SBE certification pending has its certification denied, or if an SBE fails to be recertified during the term of the contract, or if an SBE is decertified during the term of the contract, the dollar value of the contract awarded to that SBE cannot be counted toward the applicable SBE goal. 3. The City will count toward its SBE goal a portion of the total dollar value of a contract with a joint venture equal to the percentage of the ownership and contractual commitment to the SBE partner in the joint venture. 4. The City will count toward the SBE goal a portion of the total dollar value of a contract with a mentor protege team equal to the percentage of the project self-performed by the SBE member of the team. 5. The City will count toward its SBE goal only expenditures to SBEs that perform a commercially useful function in the work of the contract. 6. The City will count toward its SBE goals the following expenditures to SBE firms that are not suppliers: a. The fees or commissions charged for providing a bona fide service, such as professional, technical, consultant or managerial services and assistance in the procurement of essential personnel, facilities, equipment, materials or supplies required for performance of the contract, provided that the fee or commission is determined by the City to be reasonable and not excessive as compared with fees customarily allowed for similar services. b. The fees charged for delivery of materials and supplies required on a job site (but not the cost of the materials and supplies themselves) when the hauler, trucker, or delivery service is not also the manufacturer of, or a regular dealer in, the materials and supplies, provided that the fee is determined by the City to be reasonable and not excessive as compared with fees customarily allowed for similar services. The fees or commissions charged for providing any bonds or insurance specifically required for the performance of the contract, provided that the fee or commission is determined by the City to be reasonable and not excessive as compared with fees customarily allowed for similar services. C. Goal Setting Committee: Each Goal Setting Committee or series of Goal Setting Committees is to be appointed and chaired by the Business Services Manager or designee. The committee shall include, at a minimum, the Purchasing Agent or designee, the Business Services Manager or designee, the Chief Financial Officer or designee, the Director or designee of the originating department. The committee will determine which goals will be applied to specific contracts based on various criteria. D. Sheltered market. 1. Business Services, in consultation with the purchasing department will designate certain procurements as sheltered market procurement opportunities, which will only be open for competition by and between SBEs. a. Contracts of $2,500.00 to $100,000.00. Under the sheltered market program, every acquisition of goods or services that has an anticipated dollar value between $2,500.00 and $100,000.00 is automatically reserved exclusively for small businesses, except for those contracts pertaining to street projects, as described in the CIP budget. The Business Services designee and the purchasing agent may agree to exclude any procurement in this category from the sheltered market at their joint discretion. The sheltered market procurement requirement will only apply when there is a reasonable expectation that offers will be obtained from three or more SBEs that are competitive in terms of market prices, quality, and delivery. If only one acceptable offer is received from a responsible SBE, the sheltered market procurement will be withdrawn and the product or service, if still needed, will be solicited on an unrestricted basis. b. Contracts over $100,000.00. In addition, the Business Services designee and purchasing agent may agree to designate any contract over $100,000.00 for SBEs, except for those contracts pertaining to street projects, pertaining to public works construction, or other projects for which a sheltered market would conflict with state law. The sheltered market designation shall be made only when there is a reasonable expectation that bids will be obtained from at least three responsible SBEs and that the award will be made at a fair market price. 2. Partial sheltered market procurements. A sheltered market procurement of a single acquisition or a class of acquisitions may be total or partial. The Business Services designee and the purchasing agent may designate a portion of an acquisition as sheltered market procurement, except for construction. 3. To obtain sheltered market procurement, an SBE must perform at least a given percentage of the contract. This provision limits the amount of subcontracting an SBE may enter into with other firms when performing these types of contracts. The provisions are as follows: a. Construction. For general and heavy construction contractors, at least 15 percent of the cost of the contract, not including the cost of materials, must be performed by the SBE prime contractor with its own employees. For special trade construction, such as plumbing, electrical, or tile work, this requirement is 25 percent. b. Manufacturing. At least 50 percent of the cost of manufacturing, not including the cost of materials, must be performed by the SBE prime contractor. c. Services. At least 50 percent of the contract cost for personnel must be performed by the SBE prime contractor's own employees. Sec. 6-2-414. — Certification as a Small Business Enterprise. A. A business seeking certification or recognition of certification from the City as an SBE must submit documentation as designated by the City on the prescribed form, affirming under penalty of perjury that the business qualifies as an SBE. In order to qualify as an SBE, the potential SBE owner must meet the following requirements: 1. Demonstrate that the firm's gross revenues or number of employees averaged over the past three years, inclusive of any affiliates as defined by 13 CFR 121.103 do not exceed ten million dollars ($10,000,000) or three hundred (300) employees; 2. Demonstrate that the SBE owners listed on the certification application own and control the business; 3. Demonstrate that it is or will be performing a commercially useful function; 4. Demonstrate that it is located in the City; and 5. Demonstrate that the principal owner maintains a residence in the Memphis MSA. B. Business Services or the Certifying Entity may also, if it deems it necessary, perform an on-site review of the potential SBE owner's business prior to approving an application for certification. C. A firm that is denied certification may not reapply for certification for a period of 12 months from the date of the denial. D. Firms certified by other government agencies will be required to be certified under this chapter regardless of previous certification. E. When a firm which has previously been designated an SBE exceeds either the gross revenue or the number of employees provision, it will be deemed to have graduated from the SBE Program with no right of reentry. 1. Graduation procedures. Any interested party may request an evaluation of an SBE firm. That evaluation will be performed at the time of the recertification for the SBE. Upon recertification, a firm will be evaluated for graduation from the program. Once Business Services has been notified by the certifying agency that the firm has exceeded the size standards established by the NAICS, the following steps will be followed: a. Notification. Business Services shall issue a letter of notification to the firm detailing its intent to graduate the firm from the program. The letter of notification shall set forth findings, based on the facts and in accordance with law and regulations, for every material issue relating to the basis of the program graduation with specific reasons for each finding. b. Appeal. The firm will be allowed 45 days from the date of the letter to appeal the decision. To appeal the decision, the firm must submit in writing to Business Services, information which would explain why the proposed basis of graduation is not warranted. Upon receipt of the appeal, Business Services will notify the firm in writing of the receipt of the appeal. c. Review. If the firm appeals its graduation from the program within the requisite 45 days, the appeal will be reviewed by a committee composed of the director of finance, purchasing agent, and city engineer. Within 15 days of receipt of the appeal, a written decision will be issued to the firm by the committee via Business Services. 2. Post graduation. After the effective date of firm's graduation from the program as provided for herein, a firm is no longer eligible to participate in or receive assistance from the SBE program. However, such firm is obligated to complete previously awarded contracts and/or subcontracts, including any priced bids that may be exercised. Upon graduation there will be no right of reentry. Sec. 6-2-415. — Recertification. Once certified as an SBE by the City or approved certifying entities, the certification is valid for a period of one year from the date the City or approved certifying entity certified the applicant as an SBE. Prior to the expiration of the one-year period, a business that desires to be recertified by the City or approved certifying entity shall: 1. File an application to renew with the City or approved certification entity as designated by the City; and 2. Meet the requirements specified in this chapter for certification as an SBE. Sec. 6-2-417. — Decertification of Small Business Enterprise. A. The City or approved certifying entities may decertify the SBE for any of the following reasons: 1. Changes in the firm’s circumstances since the certification of the firm that render the firm unable to meet the eligibility standards; 2. Information or evidence that was not available to the City at the time the firm was certified that, if available, would have resulted in a denial of certification; 3. Information that was concealed or misrepresented by the firm in connection with the certification application or review conducted by the City; 4. A change in the certification standard or requirements of the City since the certification of the firm; 5. Prior to taking formal action, Business Services staff shall provide the business with written notice of the proposed revocation. During the pendency of the proceeding, the SBE firm's certification shall remain valid. Business Services staff shall then prepare a recommendation regarding the proposed revocation for review and approval by the chief operating officer. If approved by the chief operating officer, Business Services shall issue an initial notice of decertification to the SBE owner by certified mail. The SBE may appeal the initial notice of decertification within seven days of the receipt of the initial notice of decertification. If the SBE owner fails to appeal the initial notice of decertification within the period set forth in this section, the decertification shall be final and take effect immediately. 6. If Business Services decertifies an SBE proposed to work, or currently working, on a contract, the decertified SBE's participation on the contract may no longer be counted toward fulfillment of the City’s SBE goals. If the contractor no longer meets the City’s SBE goals after the decertification of the former SBE, the contractor shall be required, within 30 days after notification by Business Services, to demonstrate good faith efforts to substitute the decertified SBE. Failure to demonstrate good faith efforts to substitute a decertified SBE will result in the bidder being declared nonresponsive, if done prior to the award of the contract, or the contractor being held in default of the contact, if done after the award of the contract. Sec. 6-2-418. — Certification reviews. In addition to reviewing firms for cause, Business Services will conduct random certification reviews of certified SBEs by auditing them to verify that the information submitted by a business is accurate, and that the business remains eligible after certification has been granted. Certification is subject to revocation if it is determined that a business no longer qualifies as an SBE under the terms of this chapter. Certification reviews may be conducted for any business for which Business Services determines a certification review is warranted. Businesses subject to certification reviews must provide Business Services with any information requested to verify the certification eligibility of the business. Sec. 6-2-419. — Appeals. A. Determination of noncompliance. A responsible bidder that is determined to be nonresponsive to the requirements of this chapter, and that otherwise would have been awarded a contract, as determined in consultation with the purchasing agent, shall receive a written determination by the Business Services designee , via certified mail, setting forth the reasons for the determination of nonresponsiveness. B. Denial of certification as an SBE. Upon a denial of certification as an SBE, Business Services shall notify the affected party in writing, via certified mail, setting forth the reasons for the denial of certification. C. Time for filing notice of appeal. Any business that has been denied certification as an SBE, or against whom a final determination of nonresponsiveness to the requirements of this chapter has been made by Business Services, may appeal the final determination of nonresponsiveness or denial of SBE certification by filing a notice of appeal with Business Services in writing within seven (7) calendar days of receipt of the notice of the final determination of noncompliance or denial of certification. D. Posting of appeal security. Any bidder that files an appeal to a final determination of nonresponsiveness by Business Services must, at the time of filing, post security in the amount of one percent of the financial offer of the appellant. If the Business Services hearing officer upholds the determination of the office of contract compliance, he or she shall assess against the appellant reasonable attorneys' fees and other administrative costs incurred by the City in reviewing and responding to the appeal. If the City is represented by its law department, such fees and costs will be calculated at the hourly rate of each attorney participating in the review and response to the appeal set forth in each attorney's most recent City paycheck times the number of hours worked by such participating attorneys on the appeal. If the City is represented by outside counsel, such fees and costs will be calculated at the billing rates of the firm's attorneys, plus all out-of-pocket costs of the firm concerning the appeal. Within 15 days of ruling against the appellant, the Business Services hearing officer, in consultation with the City’s law department and outside counsel, if any, will calculate the City’s cost in reviewing and responding to the appeal and will apply the appellant's bond or certified check to the costs. Any remaining balance of the bond or certified check will be returned to the appellant. E. Notice of hearing date and hearing. Within three (3) calendar days of receipt of a notice of appeal from an aggrieved party, excluding official holidays, the Business Services designee shall forward the notice to the Business Services hearing officer. F. Exhaustion of administrative remedies. A protester shall be required to exhaust its administrative remedies before filing suit in any state or federal court based on a determination of nonresponsiveness or denial of certification by Business Services rendered pursuant to this chapter. G. Duties of office of business services hearing officer. The duties of the Business Services hearing officer shall be as follows:: 1. The Business Services hearing officer shall have exclusive jurisdiction to determine all appeals arising under this chapter. 2. The Business Services hearing officer shall set a hearing date not more than seven (7) calendar days from the date of receipt of the notice of appeal from the Business Services designee, excluding official holidays. The hearing officer shall cause notice of the hearing to be served upon all parties by certified U.S. mail. Such notice shall set forth with particularity the decision being appealed by the aggrieved business and shall include the hearing date, time and place. 3. At the hearing, all parties shall be provided a fair and impartial hearing and shall be allowed to produce any and all evidence in either party's possession concerning the final determination of nonresponsiveness with the requirements of this chapter, or the denial of certification as an SBE. H. Decision. Within seven (7) calendar days after conclusion of the hearing, excluding official holidays, the Business Services hearing officer shall make a written decision on the appeal, which decision shall affirm, alter or reverse the final determination of nonresponsiveness or the denial of certification by Business Services. The hearing officer shall decide whether the final determination of nonresponsiveness or the denial of certification being appealed was in accordance with the law in existence at the time that the bidder was found to be nonresponsive, at the time that certification was denied, or at the time the penalties were imposed. I. Notice of decision. Within seven calendar days after conclusion of the hearing, excluding official holidays, the Business Services hearing officer shall issue written notice of the decision on the appeal to all parties. The notice of the decision shall be sent to all parties by certified U.S. mail and shall set forth the reasons for the decision. J. Appeal. The decision of the hearing officer shall be binding on all parties, subject to the right of appeal to the chief operating officer or its designee. Sec. 6-2-420. — Small business enterprise directory. The City will create an SBE directory that lists SBEs categorized by types of firms to facilitate identifying businesses with capabilities relevant to a particular specification. Each business listing will contain the business name, contact person, address, phone number, legal structure of the business, and details concerning the company's business specialties. North American Industrial Classification System (NAICS) codes will be identified for each company. Business Services will develop and continuously maintain a database as a public record of certified SBE firms. In compiling this directory, Business Services will identify and certify as many SBEs as possible that perform the types of work or provide the types of supplies needed by the City. The City will maintain and have available an updated SBE directory and source lists for each bid/proposal solicitation to facilitate identifying SBEs working in areas relevant to general contracting requirements and to particular solicitations. Sec. 6-2-421. — Procedures to ensure that SBEs have an equitable opportunity to compete for contracts and subcontracts. A. Procedures to ensure opportunities. The City shall utilize the following measures to ensure maximum practicable opportunities for SBE participation on city contracts: 1. Assist SBE in obtaining insurance and surety bonds where necessary in the performance of contracts, including but not limited to: a. Encouraging prime contractors to assist SBE subcontractors in obtaining bonding; b. Encouraging staged bonding where feasible, when bonding is carried over from one project stage to the next; and c. Relaxing bonding requirements for projects less than $100,000.00. 2. Encourage the formation of joint ventures between SBEs. Business Services will also assist prime contractors in identifying interested SBEs for subcontracts; 3. Provide information on the City’s organization and contractual needs and offer instructions on bid specifications, procurement policy, procedures, and general bidding requirements; 4. Provide specifications and requests for proposals to the SBE community in a timely manner to allow SBEs adequate time to develop responsible and responsive bids. In instances where the cost of obtaining specifications or requests for proposal is prohibitive, copies of the material will be made available at no charge to SBE development agencies; 5. Establish prorated payment and delivery schedules where feasible, to minimize cash flow problems faced by small firms. The City will provide guidance to SBE contractors regarding maintenance of positive flow in order that current obligations can be met; 6. Hold pre-bid conferences to explain SBE requirements as well as forms that must be submitted with a bid; 7. Permit bidders to review and evaluate successful bid documents of similar procurements and use debriefing sessions to explain why certain bids were unsuccessful; 8. Provide projected procurement information and contracting schedules through the office of contract compliance and other outreach efforts; 9. Conduct internal information workshops to inform and acquaint City staff with the goals and objectives of the City’s small business enterprise program, and to sensitize them to the challenges faced by SBEs; 10. Maintain records showing specific efforts to identify and award contracts to SBEs and establish a monitoring system to ensure that all contractors, subcontractors, consultants, and vendors comply with contracts specifications related to SBE utilization; and 11. Inform SBEs of bid notices and specifications related to their capability by placing bid notices in major local newspapers and other periodicals. Bid notices will also be sent to local trade associations, technical assistance agencies, economic development groups, and SBEs with capabilities that may be relevant to the bid notice as identified by the City’s SBE database. Bid specifications will be made available to SBE contractor associations and technical assistance agencies. Lists of potential firms bidding as primes will also be made available to SBEs. B. Direct assistance to SBEs. In addition to the procedures set forth in subsection A of this section, Business Services shall also undertake special measures to assist SBEs in overcoming barriers to participation on City contracts. This assistance will be offered directly by the City, as well as by City referral to other assistance agencies with established, comprehensive, and continuous SBE development programs. Businesses requiring management and technical assistance will be identified through a questionnaire, through personal experience with these businesses, and through requests for assistance. Business Services will offer the following direct assistance to SBEs: 1. Provide counseling and training sessions for SBEs. City staff will be available to interested business representatives to explain (in detail) instructions for preparation of bid specifications, the City’s procurement policies, procedures and general bid requirements. The Business Services designee will coordinate and follow up on all requests for assistance to ensure that all necessary information was provided. 2. Provide coordination and referral to existing business development organizations. 3. Sponsor intensive workshops and training sessions on identified SBE problem areas (i.e., pricing and estimating, joint venture formation, accounting principles, marketing, etc.). Sec. 6-2-422. — Methods by which the city will require contractors and subcontractors to comply with applicable SBE requirements. The City’s staff is available to assist contractors and subcontractors in implementing this program. As a standard procedure, such assistance includes: 1. Clearly set forth the City’s SBE Program goals in all City solicitations. 2. Attend pre-proposal/bid conferences to explain the City’s SBE Program. 3. Identify certified SBEs in the City’s database and providing a list of available, certified SBEs upon request. 4. Provide plan holder lists and pre-bid sign-in sheets made available to interested SBEs upon request. 5. Assist bidders with developing their SBE Programs. 6. Monitor SBE participation levels on projects throughout the duration of a contract. Contractors violating contract provisions regarding SBE participation are subject to the sanctions set forth in Section 6-94-17. Sec. 6-2-423. — Means to ensure that bidders make good faith efforts to meet SBE contract goals. A. For all contracts for which SBE contract goals have been established, the bidder shall be required to submit SBE participation information to the City and any other information required by Business Services as set forth in the project's solicitation documents. The award of the contract will be conditioned upon satisfaction of the requirements established by the City. The bidder shall submit, with its bid submission, the following information: 1. The name, address and certification number, if applicable, of the SBE firms that will participate in the contract; 2. The description of the work each named SBE will perform; and 3. The dollar amount of participation by each named SBE firm. B. If the SBE participation submitted by the bidder does not meet the SBE contract goals, the bidder must submit with its bid submission evidence demonstrating that good faith efforts were made to meet the goals. The City will review documents submitted at the time of the bid and make its determination of good faith efforts based on those submitted documents. Additional submissions will not be permitted. To determine sufficient good faith efforts to meet the SBE contract goal, a bidder/proposer shall document the steps it has taken to obtain SBE participation, including but not limited to the following: 1. Attendance at a pre-bid meeting, if any, scheduled by the City to inform SBEs of subcontracting opportunities under a given solicitation. 2. Provide copies of advertisements in general circulation media, trade association publications, and other media for at least 15 days before bids or proposals are due. 3. Copies of written notification sent to all City certified SBEs that perform the type of work to be subcontracted, in sufficient time to allow said SBEs to participate effectively, soliciting said SBEs' interest in working on the project and advising the SBEs: a. Of the specific work the bidder intends to subcontract; b. That their interest in the project is being solicited; and c. How to obtain information for the review and inspection of the plans, specifications and requirements of the bid. 4. A written statement that economically feasible portions of work were selected to be performed by SBEs, including, where appropriate, segmenting elements of work or combining elements of work into economically feasible units. The ability of the bidder to perform the work with its own work force will not in itself excuse the bidder from making good faith efforts to meet participation goals. 5. A statement of the good faith efforts to negotiate with SBEs for specific subcontracts, including at a minimum: a. The names, addresses, and telephone numbers of SBEs that were contacted. b. A description of the information provided to SBEs regarding the plans and specifications for portions of the work to be performed. c. A statement of why additional agreements with SBE were not reached. d. Concerning each SBE, the SBE contacted but rejected as unqualified, and the reasons for the bidder's conclusion. e. Efforts made to assist the SBEs contacted that needed assistance in obtaining bonding or insurance required by the competitor or the City. 6. Outreach efforts documentation. A statement describing the bidder's outreach efforts to identify, contact, contract with, or utilize businesses, including certified SBEs, as subcontractors or suppliers on the eligible project. Business Services shall set forth in the solicitation document the documents that a bidder may submit to demonstrate its outreach efforts, and such documentation may include, without limitation, evidence of the following: a. The bidder contacted Business Services to identify available businesses to work on the eligible project, including certified SBEs, regardless of race, gender or ethnicity. Business Services will supply a letter to be included in the bid of the efforts rendered by the bidder as it relates Business Services recommendations. b. The bidder placed notices of opportunities for qualified businesses to perform subcontracting work on the eligible project in newspapers, trade journals, and other relevant publications, including publications specifically targeted to SBEs, or communicated such notices of opportunities via the Internet or by other available media or means. c. The bidder submitted invitations to bid for work on the eligible project to qualified businesses, including certified SBEs. d. The bidder included in such notices and invitations a full disclosure of the criteria upon which bids, proposals or quotes would be evaluated, and also included contact information for inquiries, submissions, or requests to review any necessary bid documents. e. The bidder promptly responded to inquiries, provided necessary physical access and time for interested businesses to fully review all necessary bid documents, and otherwise provided information, access and time necessary to allow all interested businesses to prepare bids and quotes. f. For each business which contacted or was contacted by the bidder regarding subcontracting or other services on the eligible project but was not contracted with or otherwise utilized on the eligible project, the bidder shall provide a written statement setting forth the dates of such contacts, the nature of such contacts, and the reasons why an agreement was not reached regarding work to be performed on the project. The bidder shall maintain all written documents reflecting such contacts, including bids, quotes and proposals. 7. To determine whether a bidder that has failed to meet SBE goals may be awarded the contract, the Business Services Manager, the director of finance and the purchasing agent, prior to the award of the project, will determine whether the efforts the bidder made to obtain SBE participation were good faith efforts. Efforts that are merely pro forma are not good faith efforts to meet the goals. In order to award a contract to a bidder that has failed to meet SBE contract goals, the Business Services Manager, the director of finance and the purchasing agent will determine whether the bidder actively and aggressively made efforts to meet the City’s SBE goals. A bidder making a good faith effort would consider a number of factors in negotiating with subcontractors, including SBE subcontractors, and would take a firm's price and capabilities as well as contract goals into consideration. However, the fact that there may be some additional costs involved in finding and using SBEs is not in itself sufficient reason for a bidder's failure to meet the contract SBE goal, as long as such costs are reasonable. Also, the ability or desire of a prime contractor to perform the work of a contract with its own organization does not relieve the bidder of the responsibility to make good faith efforts. Prime contractors are not, however, required to accept higher quotes from SBEs if the price difference is excessive or unreasonable. In determining whether a bidder has made good faith efforts, the Office of Business Services will take into account the performance of other bidders in meeting the contract. For example, when the apparent successful bidder fails to meet the contract goal, but others meet it, the Office of Business Services may reasonably raise the question of whether, with additional reasonable efforts, the apparent successful bidder could have met the goal. If the apparent successful bidder fails to meet the goal but meets or exceeds the average SBE participation obtained by other bidders, the City may view this, in conjunction with other factors, as evidence of the apparent successful bidder having made good faith efforts. Businesses that fail to meet SBE goals and fail to demonstrate good faith efforts shall be deemed nonresponsive to the City’s SBE requirements and shall not be eligible to be awarded the contract. 8. To ensure that all obligations under contracts awarded to SBEs are met, the City shall review the contractor's SBE involvement efforts during the performance of the contract. The contractor shall bring to the attention of the City any situation in which regularly scheduled progress payments are not made to SBE subcontractors. C. Bidders shall not terminate, replace, or reduce the work of the SBE that the bidder has counted toward meeting the committed SBE goal unless: 1. The SBE refuses to enter into a contract consistent with the Letter of Intent. 2. The SBE’s certification expires. 3. The SBE materially breaches its contract with the bidder. In addition to post-award terminations, the provisions of this section apply to pre-award deletions of or substitutions for SBE firms put forward by bidders. Sec. 6-2-424. — Penalties for noncompliance. A contractor who fails to comply with any portion of this chapter, and whose failure to comply continues for a period of 30 calendar days after the contractor receives written notice of such noncompliance from the director of Business Services, shall be subject to any or all of the following penalties: 1. Withholding of ten percent of all future payments for the eligible project until Business Services determines that the contractor is in compliance with this chapter. 2. Withholding of all future payments under the eligible project until it is determined that the contractor is in compliance with this chapter. 3. Cancellation of the eligible project. 4. Refusal of all future contracts or subcontracts with the City for a minimum of one year and a maximum of five years from the date upon which this penalty is imposed. Sec. 6-2-425. — Outreach to SBEs. The City considers information dissemination and communication with SBEs as an integral part of the city's SBE Program. As a part of its outreach program, Business Services will solicit input from representatives of SBEs, trade associations and community organizations. This input will serve several important functions, including: 1. Providing information to identify additional SBE firms; 2. Assisting in refining SBE Program goals and procedures; and 3. Providing an independent assessment of the effectiveness of the City’s SBE program. Sec. 6-2-426. — Procedures to require that participating SBEs are identified by name by competitors for contracts. A. The City shall indicate, in solicitations for contracts that provide opportunities for SBE participation, goals for the use of SBE firms. Solicitations shall require all bidders to submit a written assurance of meeting the goals in their bids or proposals. Bids must also include a proposed schedule of SBE participation that lists the names of SBE subcontractors, a description of the work each is to perform, and the dollar value of each proposed SBE subcontract. If the SBE participation does not meet the SBE contract goals, the bidders must submit sufficient information and evidence demonstrating that the bidder made good faith efforts to meet the goals. B. Bidders are required to submit this information with their bids and bidders are so informed at the time of solicitation. Agreements between a bidder and an SBE in which the SBE promises not to provide subcontracting quotations to other bidders shall be prohibited. Sec. 6-2-427. — Local preference for award of city contracts. Purpose and intent. The City shall give a local preference to local businesses in the city limits in awarding City contracts and making purchases whenever the application of such a preference is reasonable in light of the dollar value of the proposal received in relation to such expenditure. 1. Local preference. a. In order to be eligible for the local preference, the vendor must provide a copy of the domestic County and state business license and shall also provide proof that County personal property taxes and all other necessary local business operational taxes inherent to businesses whose principal base of operations is located within the city limits were appropriately paid and/or authorize the governing bodies of each agency to release such information to the city. b. In the bidding of, or letting contracts for procurement of supplies, materials, equipment and services, with a total price of $10,000.00 or more, local preference shall mean that if the lowest responsive bidder is a regional or non-local business, then all bids received from responsive local businesses are decreased by five percent. The original bid is not changed; the five percent decrease is calculated only for the purposes of determining the local preference. The local preference cost differential is not to exceed $100,000.00. c. In the case of a request for proposal, letters of interest, best evaluated bids, qualifications or other solicitations and competitive negotiation and selection in which objective factors are used to evaluate the responses, local businesses are assigned five percent of the total points of the total evaluation points up to a maximum of five points. d. In the event of a tie between a local business and one or more non-local business meeting specifications, the ties shall be broken in favor of the local business. 2. Local presence. a. In the event there is no local business preference designation, either due to non-participation or non-eligibility after the five percent differential or five-point assignment, then local presence will be considered for the procurement of goods and services over the amount of $2,000,000.00. b. Local presence will be demonstrated by the total number of individuals a business employs within the County. For procurements, a five percent differential, which is not to exceed $200,000.00, shall be granted for the business that demonstrates the highest number of total employees located within the County at the time of the bid response. For request for proposals or matters for which factors are evaluated, local presence at the time of the response will be a weighted criterion. In no event shall the local presence designation be allowed for a business with less than 25 local employees at the time of the bid response. 3. Exceptions. a. The local business preference or presence criteria shall not apply to purchases or contracts which are funded, in whole or in part, by a governmental entity and the laws, regulations, or policies governing such funding prohibit application of the local preference, nor shall the local preference apply to purchases made or contacts let under emergency or noncompetitive situations. b. Application of the local preference or local presence criteria to a particular purchase, contract or category of contracts for which the city is the awarding authority may be waived upon written justification and recommendation of the city to compare qualification, character, responsibility and fitness of all persons, firms, or corporations submitting bids or proposals. Further, the preference or presence criteria established herein in no way prohibit the right of the city from giving any other preference permitted by law in addition to the preference authorized herein. Section 2. — Severability. BE IT FURTHER ORDAINED, That if any provision of this chapter or any application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provisions or applications and are to this end declared to be severable. Section 3. — Codification. BE IT FURTHER ORDAINED, That this ordinance amends Chapter 2 of the Official City Code. The City has authorized the Municipal Code Corporation to provide a republication of the City's Ordinances in the Official City Code, as amended from time to time, for the convenience of the public. The Official City Code and the official version of all new, amending, repealing and clarifying ordinances adopted by the City Council are maintained by the City's Comptroller in the Office of Council Records. Section 4. –Effective Date. BE IT FURTHER ORDAINED, That this Ordinance shall take effect after having been passed by City Council, signed by the Chair of Council, certified and delivered to the office of the Mayor in writing by the comptroller, and becomes effective as otherwise provided by law and shall remain effective and operative unless and until the City Council alters, amends clarifies or repeals it by a superseding, amending, clarifying or codifying ordinance. Nov. 7, 2025 Md111271 ... more |