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Legislation #: 110970 Introduction Date: 12/15/2011
Type: Ordinance Effective Date: 1/29/2012
Sponsor: COUNCILMEMBER SHARP AND COUNCILMEMBER BROOKS
Title: Amending Chapter 38, Code of Ordinances, by repealing Section 38-84 in its entirety; subsection (a) of Section 38-85; subsections (c) and (d) of Section 38-88; subsection (a) of Section 38-90; subsection (a) of Section 38-91; subsection (a) of Section 38-98; Section 38-99 in its entirety; Section 38-100.1 in its entirety; and subsection (s) of Section 38-100.4, and enacting in lieu thereof new provisions of like designation and subject matter for the purpose of updating the MWBE program with regard to certification of firms, goal setting procedures, participation credit allowances and appeals.

Legislation History
DateMinutesDescription
12/9/2011 Filed by the Clerk's office
12/8/2011 Referred to Transportation & Infrastructure Committee
12/15/2011 Hold On Agenda (1/5/2012)
1/5/2012 Hold On Agenda (1/12/2012)
1/12/2012 Do Pass as a Second Committee Substitute
1/12/2012 Assigned Third Read Calendar as Substituted
1/19/2012 Councilmember Johnson Move to Amend
1/19/2012 Passed as Second Substitute as Amended

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SECOND COMMITTEE SUBSTITUTE TO ORDINANCE NO. 110970, AS AMENDED

 

Amending Chapter 38, Code of Ordinances, by repealing Section 38-84 in its entirety; subsection (a) of Section 38-85; subsections (c) and (d) of Section 38-88; subsection (a) of Section 38-90; subsection (a) of Section 38-91; subsection (a) of Section 38-98; Section 38-99 in its entirety; Section 38-100.1 in its entirety; and subsection (s) of Section 38-100.4, and enacting in lieu thereof new provisions of like designation and subject matter for the purpose of updating the MWBE program with regard to certification of firms, goal setting procedures, participation credit allowances and appeals.

 

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That Chapter 38, Code of Ordinances, is hereby amended by repealing Section 38-84, Definitions, and enacting in lieu thereof a new Section 38-84 to read as follows:

 

Sec. 38-84. Definitions.

The following definitions apply to this article, except where an alternate definition has specifically been made applicable:

 

(1) Affidavit of intended utilization: An affidavit, in a form prescribed by the director, stating the bidder’s intent to meet the MBE/WBE goals or to timely request a waiver of the MBE/WBE goals.

 

(2) Agency: Any public or private entity that receives 66 percent of its funding from the city or any entity with the authority to recommend city tax increment financing or city tax abatements.

 

(3) Agency head: Person authorized to act on behalf of an agency as defined in section 38-84(2).

 

(4) Award of contract: Execution of a contract and, if necessary, city council or park board authorization.

 

(5) Bid: An offer to enter into a contract submitted pursuant to an invitation for bid.

 

(6) Bidder: Any person who submits a bid to the city or an agency in response to an invitation for bid.

 

(7) Bid opening: The event whereby bids are opened and read aloud at the place, date and time specified in the invitation for bid and any subsequent amendment thereto.

 

(8) Bid shopping: The practice whereby a person divulges or requires another to divulge a subcontractors bid or proposal for the purpose of securing a lower bid or proposal.

 

(9) City: City of Kansas City, Missouri.

 

(10) City department: Department of the city or the division of procurement services when acting on behalf of a department director.

 

(11) Commercially useful function: Real and actual services that are a distinct and verifiable element of the contracted work based upon private sector trade or industry standards. Determination that an enterprise performs a commercially useful function will be made based on the following considerations:

 

a. An MBE or WBE performs a commercially useful function when it is responsible for execution of the ordinary and necessary work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, the MBE or WBE must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining the quality and quantity, ordering the material, installing (where applicable) and paying for the material itself. To determine whether an MBE or WBE is performing a commercially useful function, one must evaluate the following:

 

1. The amount of work subcontracted; and

 

2. Industry practices; and

 

3. Whether the amount the enterprise is to be paid under the contract is commensurate with the work it is actually performing; and

 

4. Whether the MBE or WBE has the skill and expertise to perform work for which it is being utilized; and

 

5. The credit claimed for its performance of the work; and

 

6. Other relevant factors.

 

b. An MBE or WBE 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 in order to obtain the appearance of MBE or WBE participation. In determining whether an MBE or WBE is such an extra participant, one must examine similar transactions, particularly those in which MBEs or WBEs do not participate.

 

c. An MBE or WBE firm is not performing a commercially useful function if the MBE or WBE subcontracts a greater portion of the work on a contract or purchases a greater amount of material than would be expected on the basis of normal industry practice for the type of work involved.

 

d. Whether the MBE or WBE is participating in the contract as a middle person or broker in the normal course of that business or trade by purchasing the goods and/or services from another business, thereby qualifying expenditures for such goods and/or services to be counted toward utilization requirements for MBEs and WBEs.

 

e. Whether the MBE or WBE is responsible for the purchase and quality of, and payment for, materials used to perform its work under the contract.

 

There shall be a rebuttable presumption that, when the MBE or WBE subcontracts a greater portion of the contract work than normal industry practice, the MBE or WBE is not performing a commercially useful function.

 

(12) Construction contract: A contract for the construction, reconstruction, improvement, enlargement or alteration of any fixed work or construction site preparation, the majority of which is paid for out of city or agency funds.

(13) Contract: Any city or agency construction contract more than $300,000.00, and all other city or agency contracts more than $117,000.00 the majority of either of which is paid for out of city funds or in which an agency is a party, except the following:

 

a. Personal services contracts; and

 

b. Emergency contracts; and

 

c. Imprest accounts in the nature of petty cash funds.

 

(14) Contractor: Any person who enters into a contract with the city or an agency.

(15) Contractor utilization plan: The statement, in a form prescribed by the director, that must be submitted by a bidder or proposer pursuant to section 38-89 and that states its plan to utilize qualified MBEs and/or WBEs in the performance of a contract.

 

(16) Day: A calendar day, except as otherwise indicated.

 

(17) Department: The human relations department (HRD), or the division within the city manager's office that is assigned to perform the tasks delegated to the human relations department by this article.

 

(18) Department director: Person appointed by the city manager to be responsible for a city department or the manager of procurement services when acting on behalf of a department director or the city.

 

(19) Director: The director of the human relations department or his authorized representative, or the person designated by the city manager to perform the tasks delegated to the director of the human relations department by this article.

 

(20) Disadvantaged business enterprise (DBE): A business concern that meets the federal requirements for certification as a DBE.

 

(21) Expertise: Experience or training in a specialized field that is critical to the firm’s operations, indispensable to the firm’s potential success, and specific to the type of work the firm performs.

 

(22) Goal: A numerical objective stated as a percentage of contract dollars for participation by qualified MBEs and WBEs in contracts.

 

(23) Invitation for bid: A request or invitation for submission of an offer to enter into a contract pursuant to a competitive bidding process.

 

(24) Kansas City metropolitan area: The Missouri counties of Cass, Clay, Jackson and Platte and the Kansas counties of Johnson, Leavenworth and Wyandotte.

 

(25) Letter of intent to subcontract: A document, in a form prescribed by the director that demonstrates the prime contractor’s intent to enter a contractual agreement with a selected MBE/WBE.

 

(26) M/W/DBE Kansas City Mo. Online Directory: A source list compiled by the human relations department containing names and addresses of MBE/WBE/DBEs in the business of providing construction, professional services and other services and goods from whom bids and proposals can be solicited. The directory is to facilitate identifying MBE/WBE/DBE subcontractors with capabilities relevant to general contracting requirements and to particular solicitations.

 

(27) Mentor/protégé: A relationship between an MBE or WBE (protégé) and a person in the same trade or industry (mentor). The mentor/protégé relationship is to provide technical, financial, bonding, equipment and personnel assistance. The purpose of the relationship is to increase the capacity of MBE/WBEs to perform contracts.

 

(28) Minority: A person who is a citizen or lawful permanent resident of the United States and who is:

 

a. African American, a person whose origins are in any of the Black racial groups of Africa, and who has historically and consistently identified himself or herself as being such a person; or

 

b. Hispanic American and/or Latino American, a person whose origins are in Mexico, Central or South America, or any of the Spanish speaking islands of the Caribbean, (for example Cuba and Puerto Rico) regardless of race, and who has historically and consistently identified himself or herself as being such a person; or

 

c. Asian and/or Pacific Islander American, a person whose origins are in any of the original peoples of the Far East, Southeast Asia, the islands of the Pacific or the Northern Marianas, or the Indian Subcontinent, and who has historically and consistently identified himself or herself as being such a person; or

 

d. Native American, a person having origins in any of the original peoples of North America, and who maintains tribal affiliation or demonstrates at least one-quarter descent from such groups, and who has historically and consistently identified himself or herself as being such a person.

 

(29) Minority Business Enterprise (MBE): A for-profit small business concern that:

 

a. Is at least 51 percent owned, managed, and independently controlled by one or more minorities; and

 

b. Has a real and substantial presence in the Kansas City metropolitan area as defined by section 38-100.4(c); and

 

c. Meets the business size standards imposed by 13 CFR 121.201 and as subsequently amended and this ordinance; and

 

d. Performs a commercially useful function; and

 

e. Is certified by the human relations department.

 

Only persons meeting each of the above criteria shall be deemed an MBE for purposes of this article. Except as provided in section 38-90(c), any person listed as an MBE on the M/W/DBE Kansas City Mo. Online Directory on the date a contractor utilization plan is submitted is eligible to participate as an MBE on a particular contract.

(30) Person: One or more individuals, corporations, partnerships, associations, labor organizations, legal representatives, mutual companies, joint stock companies, trusts, unincorporated organizations, trustees, trustees in bankruptcy, receivers, fiduciaries and other organizations; except "person" does not include any local, state or federal governmental entity.

 

(31) Personal services contract: A contract or agreement of employment with an individual who is not acting as an independent contractor and who is not part of the city's classified or unclassified service.

 

(32) Principal place of business: The location at which the business records of the MBE/WBE applicant concern are maintained and the location at which the individual who manages the concern's day-to-day operations spends the majority of his/her working hours.

 

(33) Proposal: Any offer or list of qualifications submitted to the city in response to a request for proposal.

 

(34) Proposer: Any person who submits a proposal to enter into a contract, either in response to a request for proposals, request for qualifications or otherwise, but not pursuant to an invitation for bid.

 

(35) Qualified: Possessing the demonstrated ability to perform the contracted task.

 

(36) Request for proposals: An invitation for submission of an offer to enter into a contract pursuant to a negotiated process and not a competitive bid, including requests for qualifications.

 

(37) Supplier: An enterprise that owns, operates or maintains a store, warehouse or other establishment in which materials, supplies, articles or equipment of the general character described by the specifications and required under the contract are bought, kept in stock and regularly sold or leased to the public in the usual course of business.

 

(38) Supply Broker: An enterprise that acts as an agent in negotiating contracts for the purchase of materials, supplies, articles or equipment but does not itself own, operate or maintain a store, warehouse or other establishment where such materials, supplies, articles or equipments are bought, kept in stock and regularly sold or leased to the public in the usual course of business.

 

(39) Woman: A person who is a citizen or lawful permanent resident of the United States and who is a female.

 

(40) Women's Business Enterprise (WBE): A for-profit small business concern that:

 

a. Is at least 51 percent owned, managed, and independently controlled by one or more women; and

 

b. Has a real and substantial presence in the Kansas City Metropolitan Area as defined by section 38-100.4(c); and

 

c. Meets the business size standards imposed by 13 CFR 121.201 and as subsequently amended and this ordinance; and

 

d. Performs a commercially useful function; and

 

e. Is certified by the human relations department.

 

Only persons meeting each of the above criteria shall be deemed a WBE for purposes of this article. Except as provided in section 38-90(c), any person listed as a WBE on the M/W/DBE Kansas City Mo. Online Directory on the date a contractor utilization plan is submitted is eligible to participate as a WBE on a particular contract.

 

Section 2. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsection (a) of Section 38-85, Application of ordinance, and enacting in lieu thereof a new subsection (a) to read as follows:

 

Sec. 38-85. Application of ordinance.

 

(a) The provisions of this article shall apply to all contracts, as defined in section 38-84(13), entered into by the city or an agency. Federal or state requirements for minority or women business enterprise participation or disadvantaged business enterprise participation shall supersede this article when required by law or federal or state contract.

 

Section 3. That all other subsections of Section 38-85 not repealed and reenacted above shall remain in effect.

 

Section 4. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsections (c) and (d) of Section 38-88, Setting goals for individual contracts, and enacting in lieu thereof a new subsection (c) and (d) to read as follows:

 

Sec. 38-88. Setting goals for individual contracts.

 

(c) When goals for individual city contracts are set, they shall be set as follows:

(1) For city construction contracts with an estimated cost of more than $300,000.00, by the fairness in construction board upon recommendation of the director; and

 

(2) For all other city contracts, by the director.

 

(d) When goals are established for a contract, such goals shall be stated in any invitation for bid or request for proposals.  No invitation for bid or request for proposals shall be released until goals have been requested and set in accordance with subsection (c) of this section, or until the city department soliciting the contract has been notified by the director that goals will not be established.  If the goals are to be set by the fairness in construction board and the board shall have failed to meet for any reason within thirty working days from the date upon which the board shall have last convened, then the invitation for bid or request for proposals may be released with the goals as recommended by the director and an addendum thereto shall be issued setting forth the goals once established by the board.

 

Section 5. That all other subsections of Section 38-88 not repealed and reenacted above shall remain in effect.

 

Section 6. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsection (a) of Section 38-90, Determining contract participation credit for MBEs and WBEs, and enacting in lieu thereof a new subsection (a) to read as follows:

 

Sec. 38-90. Determining contract participation credit for MBEs and WBEs.

 

(a) The following contract amounts shall be credited toward achieving the goals:

 

(1) The total contract dollar amount that a prime contractor has paid or is obligated to pay to a subcontractor that is a qualified MBE or WBE, except as otherwise expressly provided for herein.

 

(2) Twenty-five percent of the total dollar amount paid or to be paid by a prime contractor to obtain supplies or goods from a supplier who is a qualified MBE or WBE.

 

(3) Ten percent of the total dollar amount paid or to be paid by a prime contractor to obtain supplies or goods from a supply broker who is a qualified MBE or WBE.

 

(4) One hundred percent of the total dollar amount paid or to be paid by a prime contractor to a manufacturer of construction supplies who is a qualified MBE or WBE.

 

(5) Subcontractor participation with a lower tier MBE/WBE subcontractor by the subcontractor using one of the above methods of participation.

 

Section 7. That all other subsections of Section 38-90 not repealed and reenacted above shall remain in effect.

 

Section 8. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsection (a) of Section 38-91, Waiver of MBE/WBE goals, and enacting in lieu thereof a new subsection (a) to read as follows:

 

Sec. 38-91. Waiver of MBE/WBE goals.

 

(a) When a request for waiver has been filed, the director may grant a full or partial waiver of contract goals when the director has determined a bidder or proposer has not met the goals despite its good faith efforts, as defined in section 38-93.

 

Section 9. That all other subsections of Section 38-91 not repealed and reenacted above shall remain in effect.

 

Section 10. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsection (a) of Section 38-98, Fairness in construction board, and enacting in lieu thereof a new subsection (a) to read as follows:

 

Sec. 38-98. Fairness in construction board.

 

(a) There is hereby established the city fairness in construction board. The board’s jurisdiction is limited to city construction bids, proposals and contracts in which the estimated cost thereof is more than $300,000.00. The board’s authority is limited to setting goals for each such city contract and hearing and investigating appeals set forth in section 38-99 hereof arising from bids, proposals and contracts under its jurisdiction.

 

Section 11. That all other subsections of Section 38-98 not repealed and reenacted above shall remain in effect.

 

Section 12. That Chapter 38, Code of Ordinances, is hereby amended by repealing Section 38-99, Responsibilities of the fairness in construction board, and enacting in lieu thereof a new Section 38-99 to read as follows:


Sec. 38-99. Responsibilities of the fairness in construction board.

 

(a) Goal setting. Prior to solicitation, the department and appropriate city staff shall present to the board recommended MBE/WBE goals for each proposed construction contract. The board shall determine whether any goals are appropriate and, if so, shall set the goals in conformance with section 38-88 hereof. The goals shall be included in the invitation for bid or request for proposals. Except as otherwise provided in Section 38-88(d) hereof, no invitation for bid or request for proposals shall be released until goals have been requested and set, or until the city department soliciting the contract has been notified by the director that goals will not be established.

 

(b) Any bidder or proposer on a city construction project that has an estimated cost of over $300,000.00 may, prior to award of the construction contract, appeal to the board any determination by the director concerning the following issues:

 

(1) Waiver of the individual contract goals pursuant to section 38-91(a); or

 

(2) Substitution of an MBE/WBE listed on a contractor utilization plan pursuant to section 38-94; or

 

(3) Modification of the percentage of the participation on a contractor utilization plan pursuant to section 38-94.

 

(c) Any contractor on a city construction contract over $300,000.00 may appeal to the board any determination by the director concerning the following issues:

 

(1) MBE/WBE contract credit towards meeting the percentage of MBE/WBE participation identified in the contractor utilization plan; or

 

(2) Liquidated damages; or

 

(3) Substitution of an MBE/WBE listed on a contractor utilization plan pursuant to section 38-94; or

 

(4) Modification of the percentage of the participation on a contractor utilization plan pursuant to section 38-94.

 

(d) Appeals shall be made to the fairness in construction board by filing with the director within ten working days after notice of the director's determination a written request for review by the board, stating the grounds of such appeal with specificity. The director shall promptly forward a copy of any appeal to the chairperson and members of the board.

 

(e) Failure to file a timely appeal shall constitute a waiver of the right of a bidder, proposer or contractor to appeal the director's determination and such person shall be estopped to deny the validity of any determination which could have been timely appealed.

 

(f) Authority of board. The board shall hold a hearing within twenty working days of the date of filing of a timely appeal. The failure to hold the hearing within the prescribed time shall result in the director’s determination being overturned without further action, unless the delay was requested or caused by the party filing the appeal. The board shall have authority to investigate appeals, rejecting those it determines to be frivolous and without merit. The board shall have the power to inquire into all the facts and circumstances of appeals within its jurisdiction and may hold investigative hearings for such purpose. The board may reverse, affirm or modify determinations of the director set forth in subsections (b) and (c) hereof. The board shall issue a written report of its decision within ten working days from the start of the hearing and its decision shall be final for all purposes. Notwithstanding the foregoing, the city council shall retain the right to waive any provision of this article in accordance with section 38-91(b).

 

(g) Intervention. Any bidder, proposer or contractor whose interests will be affected by any appeal may be permitted by the board to intervene in the appeal.

 

(h) In the event an appeal is pending before the fairness in construction board and the project is presented to the city council for consideration prior to the board's issuance of its decision, the city council shall be notified by including in the fact sheet notification that there is an appeal pending before the board. The city council may elect to delay award of the project until after the board issues its decision.

 

(i) Any bidder, proposer or contractor may notify the board of the director's failure to make a determination or take action within the time required by this article and the board has the authority to inquire into the circumstances of the matter.

 

Section 13. That Chapter 38, Code of Ordinances, is hereby amended by repealing Section 38-100.1, Procedures for construction contracts, and enacting in lieu thereof a new Section 38-100.1 to read as follows:

 

Sec. 38-100.1. Procedures for construction contracts.

 

The following shall apply to construction contracts in which the estimated cost thereof is more than $300,000.00:

 

(1) Bid submissions. Bidders shall submit an affidavit of intended utilization with their bid.

 

(2) Forty-eight hour submissions. Bidders shall submit the following within 48 hours after bid opening:

 

a. A notarized contractor utilization plan in conformance with section 38-89 hereof; and

 

b. Letters of intent to subcontract; and

 

c. A request for waiver of the contract goals pursuant to section 38-91(a) if the bidder failed to meet or exceed the goals.

 

(3) Timely submission of the contractor utilization plan is a material element of the submission.

 

(4) The apparent successful bidder shall submit documentation of good faith efforts made prior to 48 hours after bid opening when requested by the city or the agency. The director is authorized to extend the 48 hour deadline for the letters of intent to subcontract but not the deadline for submission of the contractor utilization plan.

(5) A notarized affidavit certifying actual MBE/WBE participation in the contract, including the names of such MBE/WBEs and the participation amount, and a certification that all MBE/WBE subcontractors and other subcontractor have been paid must be submitted by the contractor prior to the city's release of retainage under the contract.

 

(6) Any increase in the amount of MBE/WBE participation after submission of the contractor utilization plan shall not count toward meeting the contract goals, unless otherwise permitted under section 38-94 hereof.

 

(7) Bid shopping is prohibited.

 

Section 14. That Chapter 38, Code of Ordinances, is hereby amended by repealing subsection (s) of Section 38-100.4, Certification and appeals, and enacting in lieu thereof a new subsection of like letter and subject matter, to read as follows:

 

Sec. 38-100.4. Certification and appeals.

 

(s) The city manager is authorized to revoke MBE and WBE certification for cause. The certification of a person who has been debarred by the city in a debarment proceeding shall be automatically terminated or modified in a manner provided by the debarment ordinance. If an MBE/WBE has its DBE or MBE/WBE certification revoked by another governmental entity after a hearing, its MBE/WBE certification shall automatically be terminated with the city unless the MBE/WBE's certification was revoked for violating a certification requirement that is not a violation of the city's MBE/WBE certification requirements. No individual, corporation, partnership, limited liability company or any other business entity whatsoever shall be certified as an MBE or WBE if the minority or female whose ownership interest would serve as the basis for obtaining certification, or who would control the entity seeking certification, presently owns or previously owned a majority interest in or controlled an MBE or WBE whose certification has been revoked for cause within the five year period immediately preceding the submittal of the certification application. No individual, corporation, partnership, limited liability company or any other business entity whatsoever shall be certified as an MBE or WBE if the minority or female whose ownership interest would serve as the basis for obtaining certification, or who would control the entity seeking certification, presently owns or previously owned a majority interest in or controlled an MBE or WBE whose certification has been suspended for cause, provided however that this restriction shall last no longer than the term of the suspension.

 

Section 15. That all other subsections of Section 38-100.4 not repealed and reenacted above shall remain in effect.

 

_________________________________________

 

Approved as to form and legality:

 

 

_______________________________

Brian T. Rabineau

Assistant City Attorney