Chairman Linda W. Cropp, at the request of the Mayor
A BILL IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
Chairman Linda W. Cropp, at the request of the Mayor, introduced the following bill,
which was referred to the Committee on _____.
To amend the Equal Opportunity for Local, Small, and Disadvantaged Business Enterprise
Act of 1992 to establish new size standards for small business enterprise categories,
require an assessment every three years of the continued need for the local, small, and
disadvantaged programs, establish a two-tier set-aside program for small business
enterprises, establish affiliated interest standards for small and disadvantaged business
enterprises, and to amend the Minority Contracting Act of 1976 to authorize board members
participation at Local Business Opportunity Commission meetings by conference telephone
solely for the certification of joint ventures.
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA,
That this act may be cited as the "Equal Opportunity for Local, Small, and
Disadvantaged Business Enterprises Amendment Act of 1998".
Sec. 2. Section 5 of the Minority Contracting Act of 1976, effective
March 29, 1977 (D.C. Law 1-95; D.C. Code sec. 1-1144), is amended as follows:
(a) The last sentence in subsection (c) is amended by striking the phrase "those
present" and inserting the phrase "the members participating at the
meeting" in its place.
(b) Add a new subsection (c-l) to read as follows:
"(c-l) The Commission may permit members to participate in meetings for the
certification of joint ventures by means of a conference telephone or other similar
communications equipment when it is otherwise difficult or impossible for the members to
attend the meeting in person, provided that each member participating by conference
telephone can be identified when speaking, all participants are able to hear each other at
the same time, and members of the public attending the meeting are able to hear any member
of the Commission who speaks during the meeting.".
Sec. 3. The Equal Opportunity for Local, Small, and Disadvantaged
Business Enterprises Act of 1992, effective March 17, 1993 (D.C. Law 9-217; D.C. Code
§1-1152 et seq.) is amended as follows:
(a) Section 3 (D.C. Code §1-1152.1) is amended as follows:
(1) Paragraph (2) is amended to read as follows:
"(2) "Small business enterprise" means a local business enterprise, or a
business enterprise that has satisfied the requirement, established in subsection 7(13),
which is independently owned, operated, and controlled and which has had average
annualized gross receipt, or average numbers of employees (for 3 years preceding
certification) not exceeding the following limits:
Construction: Heavy (Street and Highways, Bridges, etc.) $23 million Building (General Construction, etc.) $21 million Specialty Trades $13 million Goods and Equipment $8 million General Services $19 million Professional Services: Personal (Hotels, Beauty, Laundry, etc.) $5 million Business Services $10 million Health and Legal Services $10 million Health Facilities Management $19 million Manufacturing Services $10 million Transportation and Hauling Services $13 million Financial Institutions $300 million in assets". (2) Paragraph (3) is amended to insert after the phrase "local business
enterprise" the phrase ", or a business enterprise that has satisfied the
requirements established in subsection 7(13),".
(b) Subsection 4(b) (D.C. Code §1-1152.2(b)) is amended by adding a new sentence to
the end to read as follows: "Every 3 years following the effective date of the Equal
Opportunity for Local, Small, and Disadvantaged Business Enterprises Amendment Act of
1996, the Council shall also review the goals, intent, and purpose of this act to assess
the continued need for the local, small, and disadvantaged business enterprise
programs.".
(c) Subsection 5(b) (D.C. Code §1-1152.3(b)) is amended by deleting the phrase "a
set-aside program for small business enterprises at the contract level" and inserting
in its place the phrase "a two tier small business set-aside program at the contract
level, which shall include a separate set-aside program for small business enterprises
with gross revenues of $1,000,000 or less, which shall provide that a business becomes
ineligible for participation in this set-aside program when the business has gross revenue
in excess of $1,000,000 for 2 consecutive years, and a separate set-aside program for all
small business enterprises," .
(d) Section 7 (D.C. Code §1-1152.5) is amended by adding new paragraphs
"(14)", "(15)", and "(16)" to read as follows:
"(14) Determine according to rule" adopted by the Mayor that a small business
enterprise affiliated with other business enterprises through common ownership,
management, or control is a small enterprise if:"(A) The consolidated financial statements of the affiliated companies do not
exceed the limits established in subsection 3(2); and"(B) In the event of a parent/subsidiary affiliation, the parent company qualifier
for certification as a small business."(15) Determine according to rule" adopted by the Mayor that a disadvantaged
business enterprise affiliated with other companies through common ownership, management,
or control is a disadvantaged business enterprise provided that, in the event of a
parent/subsidiary affiliation, both companies meet the requirements of subsection 3(3)."(16) Whenever a small business enterprise is affiliated with a business that is
in a different line of business, paragraph (14) of this subsection shall not be
applicable, and such affiliate shall be eligible for certification as a small business
enterprise if it meets the requirements of subsection 3(2).".
Sec. 4. Subsection 9(b) (D.C. Code §1-1152 note) is repealed.
Sec. 5. This act shall take effect following approval by the Mayor (or
in the event of veto by the Mayor, action by the Council of the District of Columbia to
override the veto), approval by the Financial Responsibility and Management Assistance
Authority as provided in section 203(a) of the District of Columbia Financial
Responsibility and Management Assistance Authority Act of 1995, approved April 17, 1995
(109 Stat. 116; D.C. Code S 47-392.3(c)), and a 30-day period of Congressional review as
provided in section 602(c)(1) of the District of Columbia Self-Government and Government
Reorganization Act, approved December 24, 1973 (87 Stat. 813; D.C. Code §233(c)(1), and
publication in either the District of Columbia Register, the District of Columbia
Statutes-at-Large, or the District of Columbia Municipal Regulations.
Section by Section Analysis
Section 2 of the Bill would amend section 5 of the Minority Contracting Act to allow
the members of the Minority Business Opportunity Commission to vote by telephone
conference call on joint venture certifications. This amendment is necessary because joint
ventures are contract specific and must be acted upon within a short period of time. If
the Commission is unable to consider an application in a timely manner, the applicant is
unable to participate in the bidding.
Subsection 3(a) of the Bill would amend the definitions of "small business
enterprise. and disadvantaged business enterprise" to be consistent with section
7(13) of the LSDBE Act which authorize. the Commission to determine that a business
enterprise is small or disadvantaged if it can demonstrate a significant presence or close
economic ties to the District. Additionally, subsection 3(a) would increase the size
standards for certification of a small business enterprise in the various procurement
categories. The new size standards in the Bill are based on a derivation of the Small
Business Administration size standards.
Subsection 3(b) of the Bill would require the Council to review the LSDBE programs
every 3 years to asses. whether there is still a need for the programs.
Subsection 3(c) of the Bill would require the establishment of a two-tier small
business enterprise set-aside program. One set-aide program would apply to businesses with
gross revenues of $1,000,000 or less. Any business that has gross revenues exceeding
$1,000,000 for two consecutive years would be ineligible to continue participating in this
tier of the set-aside program, but may participate in the larger small business set-aside
program as long a. the business meets the size standard for the procurement categories
established in the Bill. As has been mentioned during a previous public hearing before the
Council, the two tier set-aside program is intended to assure that sufficient contracting
opportunities are available to smaller businesses that are sometimes unable to
successfully compete against larger small businesses.
Subsection 3(d) of the Bill would establish guidelines for determining when affiliated
companies qualify for certification as a small or disadvantaged business enterprise. The
Bill generally would require the aggregation of the revenues of affiliated companies for
the purpose of determining eligibility for certification as a small business enterprise.
However, the Bill would allow affiliates in unrelated lines of business, though under
common ownership, management, and control to be certified as small business enterprises
without aggregating the assets of the affiliates.
Section 4 of the Bill would repeal the sunset provision of the LSDBE Act.
OFFICE OF THE CHIEF FINANCIAL OFFICER
OFFICE OF BUDGET AND PLANNING
1. SPONSOR: Transmitted by Chairman Linda W. Cropp at the request of
the Mayor
2. PROPOSED BILL NO.
3. TITLE: Equal Opportunity for Local, Small, and
Disadvantaged Business Enterprises Amendment Act of 1998
4. OVERVIEW:
This legislation provides guideline for District Government agencies in
awarding or doing business with small business enterprises, local or disadvantaged
business enterprises. It establishes a three year assessment by the Council, based on
information received from the District of Columbia Local Business Opportunity Commission
(the "Commission), on the need for local, small and disadvantaged business enterprise
programs. It establishes regulations, bid preference mechanisms, set aside programs and
contract participation guideline for local disadvantaged and small business contractors.
It establishes criteria for certification of a business. Finally, it establishes
procedures and guidelines for actions of the Commission and allows telephone participation
in meetings by members of the Commission.
5. FISCAL IMPACT:
Implementation of this legislation is not expected to have an impact on
the Financial Plan and Budget. There is, however, the potential for an upward movement of
costs because of a possible increase in the number of expenditures awarded to
disadvantaged businesses. This may come about because the legislation provides an increase
in the average annualized gross receipts a business can have and still meet the threshold
to become certified. This will result in more businesses becoming certified, and
therefore, becoming eligible for "sheltered market" bid awards.