(9) Certified WBE: A
business enterprise certified by the Human Relations Department pursuant to
this Article II as a woman-owned business enterprise. Except as provided in
38-90(3), such business shall be deemed certified for a particular contract if
it is certified or if it is listed on the most current MBE/WBE Directory or
addendum thereto on the date the contractor utilization plan is submitted.
City of Kansas City, Missouri.
(11) City Department: Department of the
City of Kansas City, Missouri or the Division of Purchases and Supplies when
acting on behalf of a Department Director.
(12) Commercially useful function:
A certified MBE or WBE is providing a commercially useful function when it is
performing real and actual services that are a distinct and verifiable element
of the contracted work based upon private sector trade or industry standards.
In determining whether a certified MBE/WBE is performing a commercially useful
function, factors including but not limited to the following will be
(a) Whether the MBE or
WBE has the skill and expertise to perform work for which it is being utilized;
(b) Whether the cost of
materials is an ordinary and necessary part of the subcontractors
(c) Whether the MBE or
WBE is in the business of performing, managing or supervising the work for
which it has been certified and is being utilized;
(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 certified MBEs and
(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.
(13) Construction Contract
shall mean a contract for the construction, reconstruction, improvement,
enlargement or alteration of any fixed work the majority of which is paid for
out of city or agency funds, and which fixed work shall include any building,
road, street, public utility or other public facility owned by the city.
(14) Contract: Any
construction contract more than $300,000.00 and all other contracts more than
$50,000.00 the majority of which is paid for out of city funds or in which an
Agency is a party, except the following:
accounts in the nature of petty cash funds.
(15) Contractor: Any person
who enters into a contract with the City or an Agency.
(16) Contractor Utilization Plan:
The statement that must be submitted by a bidder or proposer pursuant to
Section 38-89 that states its plan to utilize qualified, certified MBEs and/or
WBEs in the performance of a contract.
A calendar day, except as otherwise indicated.
The Human Relations Department (HRD).
(19) Department Director:
Person appointed by the City Manager to be responsible for a City Department or
the Commissioner of Purchases and Supplies when acting on behalf of a
Department Director or the City.
(20) Director: The Director of
the Human Relations Department or his authorized representative.
(21) Goal: A numerical
objective stated as a percentage of contract dollars for participation by
qualified, certified MBEs and WBEs in contracts.
(22) Invitation for Bid: A
request or invitation for submission of an offer to enter into a contract
pursuant to a competitive bidding process.
(23) Kansas City Metropolitan Area:
The Missouri counties of Cass, Clay, Jackson and Platte and the Kansas counties
of Johnson, Leavenworth and Wyandotte.
(24) MBE/WBE Directory: A
source list compiled by the Department containing names and addresses of
certified MBEs and WBEs 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 MBEs and WBEs with
capabilities relevant to general contracting requirements and to particular
(25) Mentor/Protg: A
relationship between a Minority or Women*s
Business Enterprise (Protg) certified by the Human Relations Department for a
minimum of one (1) year and a person (Mentor) in the same trade or industry as
the Protg. The Mentor/Protg relationship is not to exceed three (3) years
and is to provide technical, financial, bonding, equipment and personnel
assistance. The purpose of the relationship is to increase the capacity of
certified MBE/WBEs to perform contracts. A person is limited to one
Mentor/Protg relationship per lifetime.
(26) Minority: A person who
is a citizen or lawful permanent resident of the United States and who is:
(a) Black, a person
having origins in any of the Black racial groups of Africa;
(b) Hispanic, a person
having origins of Mexican, Puerto Rican, Cuban, Central or South American
regardless of race;
(c) Asian, a person
having origins in any of the original peoples of the Far East, Southeast Asia,
the Indian subcontinent or Pacific Islands; or
(d) American Indian,
Eskimo, Aleut, or those who maintain cultural identification through tribal
affiliation or community recognition; or those who demonstrate at least one-quarter
descent from such groups.
(27) Minority business enterprise
(MBE) means a for-profit small business concern that is:
(a) at least 51 percent
owned and independently controlled by one or more minorities; and
(b) either has its
principal place of business in the Kansas City Metropolitan Area or has made
substantial efforts to become a market participant in Kansas City, Missouri;
(c) who meets the size
standards imposed by 13 CFR 121.201.
(28) 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.
(29) 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 Citys classified or
(30) 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 concerns
day-to-day operations spends the majority of his/her working hours.
(31) Proposal: Any offer or
list of qualifications submitted to the City in response to a Request for
(32) 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.
(33) Qualified: The
demonstrated ability to perform the contracted task.
(34) 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
(35) Woman: A person who is a
citizen or lawful permanent resident of the United States and who is a female.
(36) Women's business enterprise
(WBE) means a for-profit small business concern that is:
(a) at least 51 percent
owned and independently controlled by one or more women; and
(b) either has its
principal place of business in the Kansas City Metropolitan Area or has made
substantial efforts to become a market participant in Kansas City, Missouri;
(c) who meets the size
standards imposed by 13 CFR 121.201.
Sec. 38-85. Application
(1) The provisions of this Article
II shall apply to all Contracts, as defined in Section 38-84(14), 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 supercede this Article when required by law or federal or
(2) Each Department Director and
Agency Head is responsible for using best efforts to achieve the City-wide MBE
and WBE goals set forth in Section 38-86.
(3) Each person with whom the City
or an Agency enters into a contract for which goals have been set shall either:
or exceed the goals set for that contract; or
(b) Make and provide
evidence of best faith efforts to achieve the goals and request a waiver of the
Sec. 38-88. Setting goals
for individual contracts.
(1) Goals shall be established for
individual contracts when deemed practical by the Director, as
determined pursuant to this section.
(2) Individual contract goals shall
be flexible and are to be determined on a contract-by-contract basis. In
determining whether goals should be established for an individual contract or
in setting the specific goal for an individual contract, the following shall be
scope of work;
(b) The number and
types of qualified, certified MBEs and WBEs available to perform such work, or
portions of it;
(c) Whether the
contract can be structured to create potential opportunities for qualified,
certified MBEs and WBEs to participate as subcontractors, service providers
(d) The level of
participation of qualified, certified MBEs and WBEs in similar contracts
awarded by other City Departments and Agencies, and on local projects awarded
by the state and federal governments in the previous and current fiscal years;
(e) The City Departments
or Agencys progress toward meeting its annual MBE/WBE goals and its
expectations as to how future contracts will be used toward meeting such goals;
potential dollar amount of the contract;
goals for individual City contracts are set, they shall be set as follows:
(a) 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;
(b) For City
construction contracts with an estimated cost over $300,000.00 but less than
$500,000.01, by the director if no MBE/WBE goal is set for the project;
(c) For all other City
contracts, by the director.
(4) When goals are established for
a contract, such goals shall be stated in any Invitation for Bid or Request for
(5) For contracts other than
construction contracts, the director is authorized to require a bidder or
proposer to make best faith efforts to achieve MBE/WBE participation without
setting a numerical MBE/WBE goal on the solicitation as long as the director
could have set an MBE/WBE goal based on the factors in section 38-88(2).
Sec. 38-92. Reserved.
Sec. 38-93. Standards to
determine best faith efforts.
(1) Best faith efforts are efforts
that, given all relevant circumstances, a bidder or proposer actively and
aggressively seeking to meet the goals can reasonably be expected to make. In
evaluating best faith efforts made toward achieving the goals, the Director may
consider whether the bidder or proposer has performed the following, along with
any other relevant factors:
opportunities to participate in the contract in general circulation media,
trade and professional association publications, small and minority business
media, and publications of minority and women*s business organizations in sufficient time to allow MBE and WBE firms
to participate effectively;
(b) Provided notice to
a reasonable number of minority and womens business organizations of specific
opportunities to participate in the contract in sufficient time to allow MBE
and WBE firms to participate effectively;
(c) Sent written
notices, by certified mail, e-mail or facsimile, to qualified, certified
MBEs and WBEs soliciting their participation in the contract in sufficient time
to allow them to participate effectively;
(d) Attempted to
identify portions of the work for qualified, certified MBE and/or WBE
participation in order to increase the likelihood of meeting the goals,
including breaking down contracts into economically feasible units;
(e) Requested assistance in achieving the goal
from the Director and acted on the Directors recommendations;
(f) Conferred with
qualified, certified MBEs and WBEs and explained the scope and requirements of
the work for which their bids or proposals were solicited;
(g) Attempted to
negotiate in good faith with qualified, certified MBEs and WBEs to perform
specific subcontracts; not rejecting them as unqualified without sound reasons
based on a thorough investigation of their capabilities.
(2) Additional standards for construction
contracts: Within five (5) working days after drawing the bid specifications,
bidder sent certified letters, e-mails or facsimiles to qualified, certified
MBEs and WBEs listed by the MBE/WBE Directory.
(3) A bidder or proposer shall submit
documentation of its best faith efforts when requested by the City or Agency.
(4) Best faith efforts shall be
made prior to submission of the contractor utilization plan.
Sec. 38-97. Fairness in
City Contracts Board.
There is hereby
established a fairness in city contracts board, consisting of seven members,
including a chairperson, appointed by the mayor. Members of the city council
and employees of the city are ineligible for appointment. The board may make
recommendations to the director on methodology to increase the utilization of
MBEs/WBEs in professional services contracts, other services contracts, goods,
materials and supplies contracts. The board is hereby authorized to establish
its own rules and regulations to implement this charge.
Sec. 38-98. Fairness in
(1) There is hereby established the
Kansas City Fairness in Construction Board. The Boards jurisdiction is
limited to City construction bids, proposals and contracts in which the estimated
cost thereof is more than $300,000.00. The Boards 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.
(2) Board Composition: The Board
shall be composed of seven members and six alternates appointed by the Mayor,
(a) One member and one
alternate recommended by the Builders Association,
(b) One member and one
alternate recommended by the Heavy Constructors Association,
(c) One member and one
alternate recommended by the Minority Contractors Association of Kansas City,
(d) One member and one
alternate recommended by the Kansas City Hispanic Association Contractors Enterprise,
(e) One member and one
alternate recommended jointly by the Women Construction Owners and Executives
and National Association of Women in Construction,
(f) One member and one
alternate recommended by Allied Professional Specialty Contractors Association,
appointed by the Mayor and submitted to the entities named in Section
38-98(2)(a) - (2)(f) for approval. Any one of the named entities can veto the
Mayors submission and require another submission.
(3) Board members who were serving
on the Fairness in Construction Board as it was constituted prior to March 1,
1998, shall remain members and shall have new terms which expire as follows:
For Board members recommended pursuant to subsection (2)(a), (c) and (f), their
initial term shall expire on March 1, 2000; for all other Board members, March
1, 2002. The terms of all subsequent Board members shall be for a period of
four (4) years.
(4) Alternates. In the event a
Board member is unable to attend a meeting of the Board or has a conflict of
interest with regard to a particular contract or issue, the alternate shall
temporarily serve in such members stead. The term of an alternate shall
expire at the expiration of the term of the Board member.
(5) Ineligible for appointment.
The following are ineligible to serve on the Fairness in Construction Board:
(a) Staff or board
members of the entities named in Section 38-98(2)(a)-(2)(f);
of City of Kansas City Council;
of City of Kansas City.
(6) Conflict of interest. In the
event a Board member has a conflict of interest in a contract or issue that
comes before the Board, the elected member shall be temporarily replaced by the
alternate. In the event an alternate has a conflict of interest in a bid,
contract or issue that comes before the Board, the alternate shall recuse
(7) In the event the Chairperson is
not in attendance at any Board meeting, a majority of Board members shall
select a member to act as chairman for that meeting.
(8) Quorum. Four members of the
Board shall constitute a minimum quorum unless otherwise increased by Board
Responsibilities of the Fairness in Construction Board.
(1) Goal setting. Prior to release
for bid, 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 bid specifications.
(2) Any bidder or proposer on a
City construction project that has an estimated cost of over $300,000.00 may
appeal to the Board any recommendations by the Director concerning the
of bid informalities with respect to this Article II;
of the individual contract goals pursuant to section 38-91(1);
(c) Substitution for an
MBE/WBE listed on a contractor utilization plan prior to bid award pursuant to
(d) Modification of the
percentage of the participation on a contractor utilization plan prior to bid
award pursuant to section 38-94;
(e) Award of a contract
to or continued performance by a person who has violated this Article II.
(3) Any contractor on a City
construction contract over $300,000.00 may appeal to the Board from
determinations or recommendations of the Director concerning the following
(a) Determinations of
MBE/WBE contract credit towards meeting the percentage of MBE/WBE participation
in the contractor utilization plan;
to assess liquidated damages;
(c) Determinations to
approve or deny a substitution for an MBE/WBE listed on a contractor
utilization plan pursuant to section 38-94;
(d) Determinations to
approve or deny modifications of the percentage of the participation on a
contractor utilization plan pursuant to section 38-94.
(4) Appeals shall be made to the
Fairness in Construction Board by filing with the Director within ten (10)
working days after notice of the Directors determination or recommendation
appealed from, a written request for review by the Board, stating the grounds
of such appeal with specificity. The Director shall promptly forward to the
Chairperson and members of the Board a copy of any appeal.
(5) Failure to file a timely appeal
shall constitute a waiver of the right of a bidder, proposer or contractor to
appeal the Directors recommendation or determination and such person shall be
estopped to deny the validity of any order, recommendation, determination or
action which could have been timely appealed.
(6) Authority of Board. The Board
shall hold a hearing within ten (10) working days of the date of filing of 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
shall have the authority to issue advisory opinions concerning appeals of the
Directors recommendations to the appropriate committee of the City Council,
including making recommendation that the City reverse, affirm or modify
recommendations of the Director concerning the issues set forth in subsections
(2) and (3) hereof. The Board may reverse, affirm or modify determinations of
the Director set forth in subsections (2) and (3) hereof. The Board shall
issue a written report of its opinion or determination within ten (10) days of
the start of the hearing. The report will be filed with the appropriate
committee of the City Council. The Boards decisions on recommendations of the
Director are advisory and are not binding on the City Council.
(7) Intervention. A bidder who has
been declared an apparent successful bidder shall have the right to intervene
in any appeal filed on that project. Any bidder, proposer or contractor whose
interests will be affected by any appeal may be permitted by the Board to
intervene in the appeal.
(8) For purposes of this section
only, bidder shall mean any person who submits to the City or an Agency in
response to a Invitation for Bid, a competitive bid that is opened and read
(9) Notwithstanding any other
provision of this Article II, a bidder shall have the right to seek and the
Board shall have the authority to issue advisory opinions as set forth in
subsection (6) to the City Council even when the City rejects any and all bids
and regardless of whether the contract is awarded.
(10) 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 Boards issuance of an
advisory opinion, the City Council shall be notified by including in the fact
sheet that there is an appeal pending before the Board and that the Board
requests the City Council to delay award of the project until after the Board
issues its advisory opinion.
(11) Any bidder, proposer or
contractor may notify the Board of the Directors failure to make a
determination or recommendation or take action within the time required by this
Ordinance and the Board has the authority to inquire into the circumstances of
Sec. 38-100. Procedures
for construction contracts.
(1) The following shall apply to
construction contracts in which the estimated cost thereof is more than
(a) Bid Submissions. Bidders
shall submit an affidavit of intended utilization at bid opening.
(b) Forty- Eight (48)
Hours Submission. All Bidders shall submit the following within forty-eight
(48) hours after bid opening:
notarized contractor utilization plan in conformance with Section 38-89
hereof, except the requirements of Section 38-89(3) shall be submitted when
requested by the City or the Agency;
request for waiver of the contract goals pursuant to Section 38-91(1) if
the bidder failed to meet or exceed the goals,
(c) The apparent
successful bidder shall submit documentation of best faith efforts made prior
to 48 hours after bid opening when requested by the City or the Agency.
(d) A notarized
affidavit certifying actual MBE/WBE participation in the contract, including
the names of such MBE/WBEs and the participation amount, must be submitted by
the contractor prior to final payment under the contract.
(2) No increase in MBE/WBE participation.
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.
Certification of eligibility of minority and women business enterprises.
(1) To ensure that this Article II benefits
only MBEs and WBEs that are owned and controlled by bona fide MBE/WBEs, the
Director shall certify MBEs and WBEs and Mentor/ Protgs who wish to participate
in the program.
(2) Each person that seeks certification as an
MBE/WBE, must demonstrate by written documentation or affidavit that it has
suffered from past race or gender discrimination in the City of Kansas City and
in the applicable trade or industry. A Unified Certification Process (UCP)
certificate, a Missouri Highway and Transportation Department certification or
a Kansas Department of Transportation certification along with the
documentation stated in this subsection, is sufficient for certification as an
MBE/WBE so long as the firm is in the construction business, has never been
denied certification by any federal, state or local authority at any time and
meets the definitions of section 38-84(27) and 38-84(36). In addition, each
person that seeks certification must either:
(a) have its principal
place of business in the Kansas City Metropolitan Area; or
(b) prove by a
preponderance of the evidence it has made substantial efforts to become a
market participant in Kansas City, Missouri. Such evidence may include, but is
not limited to: contracts with entities located in Kansas City, Missouri;
attempts to bid on or respond to solicitations from entities in Kansas City
Missouri; advertising the firms goods or services in Kansas City, Missouri; or
any other activity designed to continually seek business opportunities in
Kansas City, Missouri, such that the firm would likely be subject to the
discrimination sought to be remedied by this Article II.
(3) Burdens of proof in the certification
(a) The firm seeking
certification has the burden of demonstrating to the Director, by a
preponderance of the evidence, that it meets all the requirements for
(b) The Director shall
make determinations concerning whether individuals and firms have met their
burden of demonstrating minority and woman status, business size, ownership and
control by considering all the facts in the record, viewed as a whole.
(4) Determination of minority and
(a) If the Director has
reason to question whether an individual is a minority or woman, the Director
shall require the individual to demonstrate, by a preponderance of the
evidence, that he or she is a minority or woman.
(b) In making such a
determination, the Director must consider whether the person has held himself
or herself out to be a minority or woman over a long period of time prior to
application for certification and whether the person is regarded as such by the
relevant community. The Director may require the applicant to produce
(5) Business size determinations.
(a) To be an eligible MBE/WBE, a firm
(including its affiliates) must be an existing small business. The Director
shall apply current SBA business size standard(s) found in 13 CFR part 121.201
appropriate to the type(s) of work the firm seeks to perform.
(6) Determination of Ownership
(a) In determining
whether the minority or women participants in a firm own the firm, the Director
shall consider all the facts in the record, viewed as a whole.
(b) To be an eligible
MBE/WBE, a firm must be at least 51 percent owned by minority and women
1. In the case of a corporation, such
individuals must own at least 51 percent of each class of voting stock
outstanding and 51 percent of the aggregate of all stock outstanding.
2. In the
case of a partnership, 51 percent of each class of partnership interest must be
owned by minority and women. Such ownership must be reflected in the firm's
3. In the
case of a limited liability company, at least 51 percent of each class of
member interest must be owned by the minority and women individuals.
(c) The firm's
ownership by minority or women must be real, substantial, and continuing, going
beyond pro forma ownership of the firm as reflected in ownership documents.
The minority or women owners 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
(d) All securities that
constitute ownership of a firm shall be held directly by the minorities or
women. Except as provided in this subsection (d), no securities or assets held
in trust, or by any guardian for a minor, are considered as held by minority or
women individuals in determining the ownership of a firm. However, securities
or assets held in trust are regarded as held by a minority or woman for
purposes of determining ownership of the firm, if
1. The beneficial owner of securities or
assets held in trust is a minority or woman, and the trustee is the same or
another such individual; or
beneficial owner of a trust is a minority or woman who, rather than the
trustee, exercises effective control over the management, policy-making, and
daily operational activities of the firm. Assets held in a revocable living
trust may be counted only in the situation where the same minority or woman is
the sole grantor, beneficiary, and trustee.
(e) The contributions
of capital or expertise by the minority or women owners to acquire their
ownership interests must be real and substantial. Examples of insufficient
contributions include a promise to contribute capital, an unsecured note
payable to the firm or an owner who is not a disadvantaged individual, or mere
participation in a firm's activities as an employee. Debt instruments from
financial institutions or other organizations that lend funds in the normal
course of their business do not render a firm ineligible, even if the debtor's
ownership interest is security for the loan.
(f) The following
requirements apply to situations in which expertise is relied upon as part of a
minority or woman owner's contribution to acquire ownership:
owner's expertise must be
a specialized field;
areas critical to the firm's operations;
to the firm's potential success;
(v) Specific to the type of work the firm
in the records of the firm. These records must clearly show the contribution
of expertise and its value to the firm.
individual whose expertise is relied upon must have a significant financial
investment in the firm.
(g) The Director shall
always deem as held by a minority or woman individual, for purposes of
determining ownership, all interests in a business or other assets obtained by
1. As the
result of a final property settlement or court order in a divorce or legal
separation, provided that no term or condition of the agreement or divorce
decree is inconsistent with this section; or
inheritance, or otherwise because of the death of the former owner.
(h) 1. The
Director shall presume as not being held by a minority or woman individuals,
for purposes of determining ownership, all interests in a business or other
assets obtained by the individual as the result of a gift, or transfer without
adequate consideration, from any non-minority or male individual or non-MBE/WBE
firm who is
in the same firm for which the individual is seeking certification, or an affiliate
of that firm;
in the same or a similar line of business; or
(iii) Engaged in an ongoing business
relationship with the firm, or an affiliate of the firm, for which the
individual is seeking certification.
overcome this presumption and permit the interests or assets to be counted, the
minority or woman individual must demonstrate to the Director, by clear and
convincing evidence, that
gift or transfer to the disadvantaged individual was made for reasons other
than obtaining certification as a MBE/WBE; and
minority or woman individual actually controls the management, policy, and
operations of the firm, notwithstanding the continuing participation of
non-minority or male individual or non-MBE/WBE firm who provided the gift or
(i) The Director shall
apply the following rules in situations in which marital assets form a basis
for ownership of a firm:
marital assets (other than the assets of the business in question), held
jointly or as community property by both spouses, are used to acquire the
ownership interest asserted by one spouse, the Director shall deem the
ownership interest in the firm to have been acquired by that spouse with his or
her own individual resources, provided that the other spouse irrevocably
renounces and transfers all rights in the ownership interest in the manner
sanctioned by the laws of the state in which either spouse or the firm is
domiciled. The Director shall not count a greater portion of joint or
community property assets toward ownership than state law would recognize as
belonging to the minority or woman owner of the applicant firm.
2. A copy
of the document legally transferring and renouncing the other spouse's rights in
the jointly owned or community assets used to acquire an ownership interest in
the firm must be included as part of the firm's application for MBE/WBE
(j) The Director may
consider the following factors in determining the ownership of a firm.
However, the Director must not regard a contribution of capital as failing to
be real and substantial, or find a firm ineligible, solely because
minority or woman individual acquired his or her ownership interest as the
result of a gift, or transfer without adequate consideration, other than the
types set forth in subsection (h) of this section;
is a provision for the co-signature of a spouse who is not a minority or woman
individual on financing agreements, contracts for the purchase or sale of real
or personal property, bank signature cards, or other documents; or
of the firm in question or its assets is transferred for adequate consideration
from a spouse who is not a minority or woman to a spouse who is such an
individual. In this case, the Director must give particularly close and
careful scrutiny to the ownership and control of a firm to ensure that it is
owned and controlled, in substance as well as in form, by a minority or woman
(7) Determinations concerning
(a) In determining
whether the minority or women owners control a firm, the Director must
consider all the facts in the record, viewed as a whole.
(b) Only an independent
business may be certified as a MBE/WBE. An independent business is one the
viability of which does not depend on its relationship with another firm or
determining whether a potential MBE/WBE is an independent business, the
Director must scrutinize relationships with non-MBE/WBE firms, in such areas as
personnel, facilities, equipment, financial and/or bonding support, and other
Director must consider whether present or recent employer/employee
relationships between the minority or woman owner(s) of the potential MBE/WBE
and non-MBE/WBE firms or persons associated with non-MBE/WBE firms compromise
the independence of the potential MBE/WBE firm.
Director must examine the firm'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 MBE/WBE firm.
considering factors related to the independence of a potential MBE/WBE firm,
the Director must consider the consistency of relationships between the
potential MBE/WBE and non-MBE/WBE firms with normal industry practice.
(c) A MBE/WBE firm must
not be subject to any formal or informal restrictions which limit the customary
discretion of the minority or women owners. There can be no restrictions
through corporate charter provisions, by-law 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 non-disadvantaged partners, conditions precedent or subsequent,
executory agreements, voting trusts, restrictions on or assignments of voting
rights) that prevent the minority or women owners, without the cooperation or
vote of any non-minority or male, from making any business decision of the
firm. This paragraph does not preclude a spousal co-signature on documents as
provided for in subsection (j)(2).
(d) The minority and
women owners must possess the power to direct or cause the direction of the
management and policies of the firm and to make day-to-day as well as long-term
decisions on matters of management, policy and operations.
minority or women owner must hold the highest officer position in the company
(e.g., chief executive officer or president).
2. In a
corporation, minority or women owners must control the board of directors.
3. In a
partnership, one or more minorities or women owners must serve as general
partners, with control over all partnership decisions.
(e) Individuals who are
not minorities or women may be involved in a MBE/WBE firm as owners, managers,
employees, stockholders, officers, and/or directors. Such individuals must
not, however, possess or exercise the power to control the firm, or be
disproportionately responsible for the operation of the firm.
(f) The minority and
women owners of the firm may delegate various areas of the management,
policymaking, or daily operations of the firm to other participants in the
firm, regardless of whether these participants are minority or women. Such
delegations of authority must be revocable, and the minority and women owners
must retain the power to hire and fire any person to whom such authority is
delegated. The managerial role of the minority and women owners in the firm's
overall affairs must be such that the recipient can reasonably conclude that
the minority and women owners actually exercise control over the firm's
operations, management, and policy.
(g) The minority and
women owners must have an overall understanding of, and managerial and
technical competence and experience directly related to, the type of business
in which the firm is engaged and the firm's operations. The minority and women
owners are not required to have experience or expertise in every critical area
of the firm's operations, or to have greater experience or expertise in a given
field than managers or key employees. The minority and women owners must have
the ability to intelligently and critically evaluate information presented by
other participants in the firm's activities and to use this information to make
independent decisions concerning the firm's daily operations, management, and
policymaking. Generally, expertise limited to office management,
administration, or bookkeeping functions unrelated to the principal business
activities of the firm is insufficient to demonstrate control.
(h) If state or local
law requires the persons to have a particular license or other credential in order
to own and/or control a certain type of firm, then the minority or women
persons who own and control a potential MBE/WBE firm of that type must possess
the required license or credential. If state or local law does not require
such a person to have such a license or credential to own and/or control a
firm, the Director must not deny certification solely on the ground that the
person lacks the license or credential. However, the Director may take into
account the absence of the license or credential as one factor in determining
whether the minority or women owners actually control the firm.
(i) 1. The
Director may consider differences in remuneration between the minority and
women owners and other participants in the firm in determining whether to certify
a firm as a MBE/WBE. Such consideration shall be in the context of the duties
of the persons involved, normal industry practices, the firm's policy and
practice concerning reinvestment of income, and any other explanations for the
differences proffered by the firm. The Director may determine that a firm is
controlled by its minority or woman owner although that owner's remuneration is
lower than that of some other participants in the firm.
2. In a
case where a non-minority or non-woman individual formerly controlled the firm,
and a minority or women individual now controls it, the Director may consider a
difference between the remuneration of the former and current controller of the
firm as a factor in determining who controls the firm, particularly when the
non-minority or non-woman individual remains involved with the firm and
continues to receive greater compensation than the minority or woman
(j) In order to be
viewed as controlling a firm, a minority or woman owner cannot engage in
outside employment or other business interests that conflict with the
management of the firm or prevent the individual from devoting sufficient time
and attention to the affairs of the firm 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 individual could be
viewed as controlling a part-time business that operates only on evenings
and/or weekends, if the individual controls it all the time it is operating.
(k) 1. A
minority or woman individual may control a firm even though one or more of the
individual's immediate family members (who themselves are not minorities or
women) participate in the firm as a manager, employee, owner, or in another
capacity. Except as otherwise provided in this paragraph, the Director must
make a judgment about the control the minority or woman owner exercises
vis-a-vis other persons involved in the business as in other situations,
without regard to whether or not the other persons are immediate family
2. If the
Director cannot determine that the minority or woman owners--as distinct from
the family as a whole--control the firm, then the minority or woman owners have
failed to carry their burden of proof concerning control, even though they may
participate significantly in the firm's activities.
(l) Where a firm was
formerly owned and/or controlled by a non-minority or non-woman individual
(whether or not an immediate family member), ownership and/or control were
transferred to a minority or woman individual, and the non-minority or
non-woman individual remains involved with the firm in any capacity, the
minority or woman individual now owning the firm must demonstrate to the
Director, by clear and convincing evidence, that:
transfer of ownership and/or control to the minority or woman individual was
made for reasons other than obtaining certification as a MBE/WBE; and
minority or woman individual actually controls the management, policy, and
operations of the firm, notwithstanding the continuing participation of a
non-minority or non-woman individual who formerly owned and/or controlled the
(m) In determining
whether a firm is controlled by its minority or women owners, the Director
shall consider whether the firm owns equipment necessary to perform its work.
However, the Director must not determine that a firm is not controlled by
minority or women individuals solely because the firm leases, rather than owns,
such equipment, where leasing equipment is a normal industry practice and the
lease does not involve a relationship with a prime contractor or other party
that compromises the independence of the firm.
(n) The Director shall
grant certification to a firm only for specific types of work in which the
minority or women owners have the ability to control the firm. To become
certified in an additional type of work, the firm need demonstrate to the
Director only that its minority or women owners are able to control the firm
with respect to that type of work. The Director may not, in this situation,
require that the firm be recertified or submit a new application for
certification, but must verify the minority or women owner's control of the
firm in the additional type of work.
(o) A business
operating under a franchise or license agreement may be certified if it meets
the standards in this subpart and the franchiser or licenser is not affiliated
with the franchisee or licensee. In determining whether affiliation exists,
the Director should generally not consider the restraints relating to
standardized quality, advertising, accounting format, and other provisions
imposed on the franchisee or licensee by the franchise agreement or license,
provided that the franchisee or licensee has the right to profit from its
efforts and bears the risk of loss commensurate with ownership. Alternatively,
even though a franchisee or licensee may not be controlled by virtue of such
provisions in the franchise agreement or license, affiliation could arise
through other means, such as common management or excessive restrictions on the
sale or transfer of the franchise interest or license.
(p) In order for a partnership to be controlled
by minority or women individuals, any non-minority or non-women partners must
not have the power, without the specific written concurrence of the minority or
women partner(s), to contractually bind the partnership or subject the
partnership to contract or tort liability.
(q) The minority or
women individuals controlling a firm may use an employee leasing company. The
use of such a company does not preclude the minority or woman individuals from
controlling their firm if they continue to maintain an employer-employee
relationship with the leased employees. This includes being responsible for
hiring, firing, training, assigning, and otherwise controlling the on-the-job
activities of the employees, as well as ultimate responsibility for wage and
tax obligations related to the employees.
(r) The Director may
consider, in making certification decisions, whether a firm has exhibited a
pattern of conduct indicating its involvement in attempts to evade or subvert
the intent or requirements of the MBE/WBE program.
(s) The Director shall
evaluate the eligibility of a firm on the basis of present circumstances. The
Director shall not refuse to certify a firm based solely on historical
information indicating a lack of ownership or control of the firm by the
minorities or women at some time in the past, if the firm currently meets the
ownership and control standards of this part. The Director shall not refuse to
certify a firm solely on the basis that it is a newly formed firm.
(t) MBE/WBE firms and
firms seeking MBE/WBE certification shall cooperate fully with the Directors
requests (and DOT requests) for information relevant to the certification
process. Failure or refusal to provide such information is a ground for a
denial or removal of certification.
(u) An eligible MBE/WBE
firm must be owned by individuals who are minorities and women. Except as
provided in this paragraph, a firm that is not owned by such individuals, but
instead is owned by another firm -- even an MBE/WBE firm -- cannot be an
1. If the
minorities or women own and control a firm through a parent or holding company,
established for tax, capitalization or other purposes consistent with industry
practice, and the parent or holding company in turn owns and controls an operating
subsidiary, the Director may certify the subsidiary if it otherwise meets all
requirements of this section. In this situation, the individual owners and
controllers of the parent or holding company are deemed to control the
subsidiary through the parent or holding company.
Director may certify such a subsidiary only if there is cumulatively 51 percent
ownership of the subsidiary by the minority and women individuals. The
following examples illustrate how this cumulative ownership provision works:
1: Minority and women individuals own 100 percent of a holding company, which
has a wholly-owned subsidiary. The subsidiary may be certified, if it meets all
Minority and women individuals own 100 percent of the holding company, which
owns 51 percent of a subsidiary. The subsidiary may be certified, if all other
requirements are met.
Minority and women individuals own 80 percent of the holding company, which in
turn owns 70 percent of a subsidiary. In this case, the cumulative ownership of
the subsidiary by minority and women individuals is 56 percent (80 percent of
the 70 percent). This is more than 51 percent, so the Director may certify the
subsidiary, if all other requirements are met.
Same as Example 2 or 3, but someone other than minorities or women owners of
the parent or holding company controls the subsidiary. Even though the
subsidiary is owned by minority or women individuals, through the holding or
parent company, the Director cannot certify it because it fails to meet control
5: Minority or women individuals own 60 percent of the holding company, which
in turn owns 51 percent of a subsidiary. In this case, the cumulative ownership
of the subsidiary by minority or women individuals is about 31 percent. This is
less than 51 percent, so the Director cannot certify the subsidiary.
The holding company, in addition to the subsidiary seeking certification, owns
several other companies. The combined gross receipts of the holding companies
and its subsidiaries are greater than the size standard for the subsidiary
seeking certification and/or the gross receipts cap. Under the rules concerning
affiliation, the subsidiary fails to meet the size standard and cannot be
(v) Recognition of a
business as a separate entity for tax or corporate purposes is not necessarily
sufficient to demonstrate that a firm is an independent business, owned and
controlled by minority and women individuals.
(8) An MBE/WBEs certification shall expire three years from the
date of certification effective immediately. An application for renewal shall
be submitted on forms provided by the Director. The Director is authorized to
require MBE/WBEs firms to submit yearly updates of information.
(9) If there is a change in ownership or control of the MBE/WBE
firm, the MBE/WBE shall notify the Department within a reasonable time
(10) The Director shall safeguard information that reasonably may
be regarded as confidential business information from disclosure to
unauthorized persons consistent with federal, state and local law.
(11) If the United States Department of Transportation changes the
requirements for certifications, the City Council shall re-examine the
certification requirements imposed by this Section.
(12) If the City denies a request
for MBE/WBE certification from a firm which is not currently certified by the
City, there shall be no right to appeal and the firm shall be ineligible to
reapply for two years from the later of the date of the denial of certification
or the final date of any court decision. Persons who have been denied MBE/WBE
recertification or who have had their MBE/WBE certification revoked by the
City, shall be reinstated if they successfully appeal their DBE certification
and they have their principal place of business in the Kansas City Metropolitan
Area or are a market participant in Kansas City, Missouri.
(13) The director 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/WBEs certification
was revoked for violating a certification requirement that is not a violation
of the Citys MBE/WBE certification requirements.
Sec. 38-100.5. Escalation of dollar limits.
At the beginning of each city fiscal year,
the monetary amounts specified in Code sections 38-84(14), 38-88, 38-98, 38-99
and 38-100 shall automatically be adjusted and shall be announced by the city
manager to reflect an increase equal to an increase in the consumer price index
(all items/all urban consumers/Kansas City, Missouri-Kansas) published by the
United States Department of Labor, Bureau of Labor Statistics Consumer Price
Index for all urban consumers to eliminate the effects of inflation on
purchasing power. Such monetary amount, as adjusted, shall be rounded upwards
to the nearest $1,000.00.
as to form and legality: