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The Oregon Administrative Rules contain OARs filed through April 15, 2016
 
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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 200

CERTIFICATION PROCEDURES

123-200-1000

Purpose

(1) The purpose of OAR 123-200-1000 to 123-200-2200 is to adopt a standard application form and procedure designed to provide complete documentation for certification of businesses as minority, woman, or service-disabled veteran owned business or an Emerging Small Business and to adopt a procedure for handling complaints, investigations, and issuing sanctions.

(2) The Certification Office for Business Inclusion and Diversity (COBID) is the sole certification agency for the State of Oregon and all political subdivisions. To the extent there is any reference to the Office of Minority, Women, and Emerging Small Business from the implementation of these rules forward, all references defer to the agency’s new name, COBID.

(3) The COBID shall certify Minority Business Enterprises (MBE), Woman Business Enterprises (WBE), and businesses owned by service-disabled veterans (SDV) under the State of Oregon certification program based on ORS 200.055. The COBID shall also certify Emerging Small Businesses (ESB) under the State of Oregon certification program based on ORS 200.170. Any public contracting agency shall consider an enterprise certified by the COBID as eligible to participate in the certification programs pursuant to these rules in the State of Oregon as defined in ORS 279.011(5).

(4) Certified firms are eligible to participate on state funded projects to meet commitment requirements. Any certified firm is eligible to participate in private or non-state funded projects.

(5) These rules also cover publication of a directory, ineligibility complaints, and representation of the COBID in contested case hearings.

(6) In making a determination as to whether a firm qualifies for certification, in addition to the rules contained herein, the COBID defers to the Code of Federal Regulations 49 CFR part 26.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055, ORS 200.170, ORS 279.011
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0005, OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1100

Definitions

As used in these rules, the following terms shall have the following definitions, unless the context requires otherwise:

(1) “Agency” means the Oregon Business Development Department.

(2) “COBID” means the Certification Office for Business Inclusion and Diversity in the Oregon Business Development Department.

(3) “Commercially Useful Function” or “CUF” means function the firm performs when it is responsible for execution of the work of the contract and carries out its responsibilities by actually performing, managing, and supervising the work involved. The firm must also be responsible, with respect to materials 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. 49 CFR § 26.55(c)(1) (e-CFR 2015 Edition)

(4) “Contribution” means a real and substantial contribution of money, tangible personal assets, and expertise to acquire ownership interest in the firm. A contribution is not a promise to contribute, 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.

(5) “Control” or “controlled” means that operational and managerial control of all aspects of the business is true, real, and exercised by one or more socially disadvantaged individual(s) as further defined in 49 CFR § 26.71 (2013 Edition).

(6) “Disadvantaged Business Enterprise” or “DBE” means a business that meets the eligibility standards for participation in United States Department of Transportation (USDOT) federally-funded projects set out in 49 CFR parts 23 and 26 (2013 Edition).

(7) “Emerging Small Business” or “ESB” means an independent business or firm that meets the requirements as defined under OAR 123-200-1600.

(8) “Independence” or “Independent” means the business is not dependent upon any non-disadvantaged, non-minority or non-woman owned firm.

(9) “Management Control” or “Management” means that the applicant has responsibility for the critical areas of business operations and has the demonstrated ability to make independent and unilateral business decisions needed to guide the future of the business.

(10)”Minority” means a person who is a citizen or lawful permanent resident of the United States and who is one of the persons described in (a) through (f) below.

(a) Black American includes persons having origins in any of the Black racial groups of Africa;

(b) Hispanic American includes persons of Mexican, Puerto Rican, Cuban, Central or South American or other Spanish or Portuguese culture or origin, regardless of race;

(c) Native American includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians;

(d) Asian-Pacific American includes persons whose origin is from Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the United States Trust Territories of the Pacific Islands, the Commonwealth of the Northern Marianas Islands, Macao, Fiji, Tonga, Kiribati, Tuvalu, Nauru, Federated States of Micronesia, or Hong Kong;

(e) Subcontinent Asian Americans includes persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal, or Sri Lanka;

(f) Any additional groups whose members are designated as socially disadvantaged by the Small Business Administration and/or as designated under 49 CFR Part 26 (2013 Edition).

(g) Other minority group membership as established by the applicant. Membership is based on evidence provided by the applicant to support the applicant’s claim he or she is a member of a minority group and the particular minority community recognizes the individual to be a member of the community. It is in COBID’s discretion to determine if the applicant’s claim is valid. If the minority community does not exist in Oregon, the burden of proof shifts to the applicant to prove he or she is a socially and economically disadvantaged individual.

(11) “Minority Business Enterprise” or “MBE” means a business owned and operated by a minority who meets the eligibility standards set out in OAR 123-200-1210 through 123-200- 1240. For the purposes of the certification programs, the rules recognize women as a separate group and not as a “minority” group.

(12) “Ownership” or “Owned” has the meaning set out in 49 CFR § 26.69 (e-CFR 2015 Edition).

(13) “Public agency” or “agency” means every government officer, board, commission, department, institution, branch or agency of the government, whose costs are paid wholly or in part from funds held in the federal, state, county, or city treasury.

(14) “Principal place of business” means the place where the firm directs, controls, and coordinates its primary, high-level business activities; the address the firm uses to file Federal income taxes. If the firm uses a P.O. Box, the COBID may request additional documentation to verify location.

(15) “Service Disabled Veteran” or “SDV” means a veteran who possesses either a disability rating letter issued by the United States Department of Veterans Affairs, establishing a service-connected rating between 0 and 100 percent, or a disability determination from the United States Department of Defense. 38 CFR § 74.1 (e-CFR 2015 Edition)

(16) “Small Business” means a small business as defined pursuant to 13 CFR part 121 (e-CFR 2015 Edition). A small business shall not include any concern or group of concerns controlled by the same socially disadvantaged individual or individuals that have average annual gross receipts over the previous three fiscal years (including its affiliates) that exceed the cap as established yearly by the Small Business Administration (SBA).

(a) Firms seeking certification must also meet the business and NAICS size standards set yearly by the SBA.

(b) The COBID will utilize federal tax information, submitted by the applicant along with new applications, No Change Statements, and certification review applications, to determine annual gross receipts for the business.

(17) “Socially Disadvantaged Individuals” means individuals who are minorities, women, service disabled veterans or any other individuals found to be disadvantaged by the SBA pursuant to Section 8(a)(5) of the Small Business Act and has the meaning set out in 49 CFR § 26.67 (e-CFR 2015 Edition).

(18) “Timely notice” as used in ORS 200.035, shall mean at the time the state agency publicly releases the contract and bid request solicitations.

(19) “Woman Business Enterprise” or “WBE” means a business owned and operated by a woman who meets the eligibility standards set out in OAR 123-200-1210 through 123-200-1240.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 200.005
Stats. Implemented: ORS 200.005
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0010, OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

Minority and Women Business Enterprise Certification

123-200-1210

Determination of Socially and Economically Disadvantaged

(1) It is a rebuttable presumption that minorities, women, and service-disabled veterans are socially and economically disadvantaged.

(2) The COBID may also determine on a case-by-case basis other individuals who are socially and economically disadvantaged. These individuals claiming disadvantaged status are required to submit a socially and economically Disadvantaged Questionnaire administered by COBID.

(3) Socially disadvantaged individuals are people subject to racial or ethnic prejudice or cultural bias because of their identity as members of a group without regard to individual qualities.

(a) The social disadvantage must stem from the individual’s color, national origin, gender, physical handicap, long-term residence in an environment isolated from the mainstream of American society, or other similar cause beyond the individual’s control.

(b) The applicant must demonstrate:

(A) He or she personally suffered the disadvantage because of treatment in the United States; and

(B) The disadvantage was chronic, long-standing, and substantial, and was not fleeting or insignificant.

(4) Social disadvantage does not include factors common to small business.

Stat. Auth.: ORS 200.005 & 200.055
Stats. Implemented: ORS 200.005 & 200.055
Hist.: OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1220

Determination of Ownership

(1) In determining whether the socially disadvantaged individual(s) in a firm owns the firm, the COBID must consider all the facts in record viewed as a whole.

(2) One or more socially disadvantaged individuals must own at least 51% of the business. COBID will apply the standards a criteria for ownership as set out in 49 CFR § 26.69 (e-CFR 2015 Edition).

(a) In the case of a corporation, such individual(s) must own 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, the socially disadvantaged individual(s) must own 51 percent of each class of partnership interest. The ownership must also reflect in the firm’s partnership agreement.

(3) In the case of a limited liability company, the socially disadvantaged individual(s) must own at least 51 percent of each class of member interest.

(4) If a firm is owned equally (i.e., 50/50) by a combination of socially or economically disadvantaged individuals, the COBID will determine whether a firm is certified as a MBE, WBE, or SDV based on which individual possesses overall management and control of the firm. Evidence in support of management and control may include one or more of the following:

(a) Professional licensing as generally required by the industry (e.g., engineer, architect, plumber, electrician, landscape architect, etc.)

(b) Control of day-to-day operations of the firm

(c) Position held in the firm

(d) Ability to hire and fire staff

(5) The business must be controlled by one or more socially disadvantaged individual(s). COBID will apply the standards and criteria set out in 49 CFR § 26.71 (e-CFR 2015 Edition).

(6) One or more of the socially disadvantaged individual(s) must have made a substantial contribution of capital to the business, which is commensurate with his or her ownership interest.

(a) The COBID may consider differences in compensation between the potentially certified owner(s) and other participants in the firm to determine whether to certify a firm. Such consideration shall encompass 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.

(b) A contribution is not a promise to contribute capital, an unsecured note payable to the firm or to an owner who is not a socially 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.

(7) The socially disadvantaged individual’s ownership in the firm must be real, substantial, and continuing, going beyond pro forma ownership and reflected as such in all business documents. The socially disadvantaged owner(s) must enjoy the customary incidents of ownership, and share the risks and profits commensurate with their ownership interest, as demonstrated by the substance, not merely the form, or arrangements.

(8) The socially and economically disadvantaged individuals must directly hold all securities that constitute ownership of a firm.

(a) Except as provided in this paragraph, the COBID does not consider securities or assets held in trust, or by any guardian for a minor, as owned or held by the socially disadvantaged persons in determining the ownership of a firm.

(b) The COBID does recognize securities or assets held in trust by a socially disadvantaged individual for purposes of determining ownership of the firm, if:

(A) The beneficial owner of securities or assets held in trust and the trustee are both socially disadvantaged individuals; or

(B) The beneficial owner of a trust is a socially disadvantaged individual who, rather than the trustee, exercises effective control over the management, policymaking, and daily operational activities of the firm. The applicant may count assets held in a revocable living trust only in the situation where he or she is the sole grantor, beneficiary, and trustee.

(9) If the applicant is relying on his or her expertise for certification, he or she must have a significant financial investment in the firm.

(10) The COBID will consider the following requirements as they apply to situations in which the applicant relies on his or her expertise as a contribution to acquire ownership. The owner’s expertise must be:

(a) In a specialized field;

(b) Of outstanding quality;

(c) In areas critical to the firm’s operations;

(d) Indispensable to the firm’s potential success;

(e) Specific to the type of work the firm performs; and

(f) The records of the firm must reflect the applicant’s expertise. These records must clearly show the contribution of expertise and its value to the firm. The applicant may quantify his or her expertise in years of experience, education, and accomplishments related to the types of services the firm offers.

(11) When an applicant receives majority stock ownership or control of a firm from a non-qualifying applicant within two years prior to submitting an application and the non-qualifying applicant remains involved in the firm as a stockholder, officer, director, or key employee the COBID will presume that the applicant does not control the firm. The applicant may rebut this presumption by showing that he or she has independent management experience necessary to control the operation of the firm and indeed is participating in the management of the firm.

(12) Assets held by a socially disadvantaged individual(s) as result of a final property settlement; court order in a divorce or, legal separation from a non-socially disadvantaged individual; through inheritance; or following the death of the former owner, are assets of the socially disadvantaged individual. The terms and conditions of legal documentation governing that transaction (i.e. divorce settlement, legal will, etc.) support the transfer of ownership to them.

(13) The COBID will not consider as evidence of ownership interest or assets in a firm obtained by a socially disadvantaged individual through gift or transfer from a non-socially disadvantaged individual unless there is evidence to support the transfer of interest and assets occurred for reasons other than obtaining certification.

(14) To overcome this presumption and permit the COBID to count interests or assets, the socially disadvantaged individual must demonstrate by clear and convincing evidence that:

(a) The gift or transfer to the socially disadvantaged individual was made for reasons other than obtaining certification as a MBE, WBE, and/or SDV; and

(b) The socially disadvantaged individual actually controls the management, policy, and operations of the firm, notwithstanding the continuing participation of a non-socially disadvantaged individual who provided the gift or transfer.

(15) The COBID will closely scrutinize such transfers when the socially disadvantage individual and non-socially disadvantaged individual are:

(a) Directly affiliated and involved in the same firm for which the socially disadvantaged individual is seeking certification;

(b) Involved in the same or a similar line of business; or

(c) Engaged in an ongoing business relationship related to the types of services in which the socially disadvantaged individual is seeking certification.

(16) In situations in which marital assets form a basis for ownership of a firm, the COBID considers the following:

(a) When 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 COBID must deem the ownership interest in the firm to have been acquired by that spouse with his or her own individual resources. In doing so, the other spouse must irrevocably renounce and transfer all rights in the ownership interest of the applicant in the manner sanctioned by the laws of the state in which either spouse or the firm is domiciled. The COBID does not count a greater portion of joint or community property assets toward ownership than state law would recognize as belonging to the socially disadvantaged owner of the applicant firm.

(b) The COBID will require a fully executed Non-participation Statement renouncing the non-qualifying spouse or domestic partner’s rights in the jointly owned or community asset used to acquire an ownership interest in the firm.

(17) The COBID must not regard a contribution of capital as failing to be real and substantial, or find a firm ineligible, solely because:

(a) A socially disadvantaged 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 paragraph (12) of this section;

(b) There is a provision for the co-signature of a spouse who is not a socially disadvantaged individual on financing agreements, contracts for the purchase or sale of real or personal property, bank signature cards, or other documents; or

(c) An applicant receives ownership of the firm in question or its assets for adequate consideration from a spouse who is not a socially disadvantaged individual to a spouse who is such an individual.

Stat. Auth.: ORS 200.005 & 200.055
Stats. Implemented: ORS 200.005 & 200.055
Hist.: OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1230

Determination of Independence

(1) The business must be a “for profit” independent, properly licensed and registered with the Secretary of State in the State of Oregon.

(2) In determining whether a certified firm is an independent business, the COBID must scrutinize relationships with non-certified firms in such areas as personnel, facilities, equipment, financial and/or bonding support, and other resources.

(3) The COBID may consider whether present or recent employer/employee relationships between the owner(s) of the certified firm and non-certified firms, or persons associated with non-certified firms, compromise the independence of the certified firm.

(a) The COBID may examine the certified firm’s relationship with prime contractors to determine whether a pattern of exclusive or primary dealings with a prime contractor compromises the independence of the certified firm.

(b) While reviewing factors related to the independence of a certified firm, the COBID must consider the consistency of relationships between the firm and non-certified firms with normal industry practice.

(4) The COBID will consider whether owner(s) of the business owns or leases equipment and resources necessary to perform the services provided. If the business leases equipment, leasing must follow normal industry practice and the lease must not involve a relationship with a prime contractor or non-disadvantaged individual that compromises the control and independence of the firm.

(5) The COBID may certify a business operating under a franchise or license agreement if it meets the standards in this subpart and the franchiser or licenser does not have an affiliation with the franchisee or licensee. The franchisor or license issuer must not have the ability to control employees, location, or prevent the certified owners from making any business decision for the firm without the cooperation or vote of any non-certified individual.

Stat. Auth.: ORS 200.005 & 200.055
Stats. Implemented: ORS 200.005 & 200.055
Hist.: OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1240

Determination of Management Control

(1) All legal documents and financial statements must clearly document that the socially disadvantaged individual has management control of the firm.

(2) A certified owner must hold the highest officer position in the company (e.g. chief executive officer or president).

(a) In a corporation, the certified owner(s) must control the Board of Directors.

(b) In a partnership, one or more certified owner(s) must serve as general partners, with control over all partnership decisions.

(c) In order for a certified individual(s) to control a partnership, any non-certified partners must not have the power, without the specific written concurrence of the certified partner(s), to contractually bind the partnership or subject the partnership to contract or tort liability.

(d) Certified owners and/or firms must not be subject to any formal or informal restrictions, which limit the customary discretion of the certified owner(s). There can be no restrictions (i.e. through corporate charter provisions, by-laws, contracts, or any other formal or informal devices) preventing the certified owners from making any business decision for the firm without the cooperation or vote of any non-certified individual. This paragraph does not preclude a spousal co-signature on documents as provided for in 49 CFR § 26.69(j)(2) (2013 Edition).

(3) The socially disadvantaged individual(s) must possess sufficient knowledge, managerial and technical competence, and experience, and have an overall understanding directly related to the type of business in which the firm seeks certification. The socially disadvantaged individual(s) must also be able to maintain day-to-day control over all operational aspects of the business.

(a) The COBID will evaluate the training and experience of the applicant based on a variety of factors. The list is not exclusive and COBID may take additional training and experience into consideration when making a determination regarding the owner’s qualifications. Factors include:

(A) A college degree in the field of expertise;

(B) Essential license in Oregon in the field in which the firm operates (e.g. electrician, plumber, engineer, or landscape architect, etc.) that is current and up-to-date;

(C) Experience and/or training in the primary field of expertise;

(D) Experience in project management in the primary field of expertise;

(E) Individual’s presence and activity on work site and ability to determine if work is proceeding in accordance with plans and to supervise field operations, resolve problems, and answer technical questions for subordinates;

(F) Individual’s demonstration of knowledge in area of expertise during the certification interview process; and

(G) Additional training and experience related specifically to construction firms.

(i) Has ability to read and interpret blueprints and specifications.

(ii) Has independently done take offs and can prepare estimates and bids.

(iii) Can operate necessary equipment (e.g. excavator, backhoe, dump truck, etc.)

(b) Quality of work performed does not determine an applicant’s eligibility for certification.

(c) In order to determine that the socially disadvantaged individual(s) has the technical expertise and competence to maintain operational control, the socially disadvantaged individual(s) may be required to submit proof of expertise to include:

(i) A copy of his or her essential license(s).

(ii) His or her resume.

(4) The socially disadvantaged applicant(s) must have responsibility for the critical areas of business operations and demonstrate the ability to make independent and unilateral business decisions needed to guide the future of the business.

(5) The certified owner(s) 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.

(6) The socially disadvantaged applicant(s) is not required to have hands-on, direct control or expertise in every aspect of the business’ affairs so long as the owner is able to intelligently use discretion, critically evaluate, and determine appropriate course of action based on information presented by employees.

(7) In order to substantiate management and control of a firm, a certified owner(s) cannot engage in outside employment or other business interests that conflict with the management of the firm or prevent the applicant from devoting sufficient time and attention to the affairs of the firm to control its activities.

(8) If an individual is required to hold a specific license (e.g. engineer, electrician, or plumber, etc.) or other credential in order to legally provide the goods or services in areas of work in which the firm seeks certification, the certified owner(s) who control a firm of that type must possess the required license or credential.

(a) If a trade or industry requires a specific license or credential (e.g., landscape architecture, plumber’s license, etc.) in order to provide services in Oregon, general licensing provided by the Construction Contractor’s Board (CCB) does not meet this prerequisite without the necessary trade or industry license.

(b) If the CCB requires a firm appoint a Responsible Managing Individual (RMI), this individual can be an owner or a manager of the firm and must be able to manage or supervise its construction activities.

(9) A socially disadvantaged individual may control a firm even though one or more of the individual’s immediate family members (who themselves are not socially disadvantaged individuals) participate in the firm as a manager, employee, owner, or in another capacity.

(10) When a socially disadvantaged individual obtains ownership or control of a firm and the previous owner or individual in control is not a socially disadvantaged individual but remains active in some role at the firm, the socially disadvantaged individual must demonstrate to the COBID, by clear and convincing evidence, that:

(a) The transfer of ownership or control to the applicant was made for reasons other than obtaining certification; and

(b) The applicant actually controls the management, policy, and operations of the firm, notwithstanding the continuing participation of a non-certified individual who formerly owned and/or controlled the firm.

(11) In considering a MBE, WBE, or SDV certification where a non-disadvantaged individual was formerly controlling the firm, the COBID may consider the difference between the compensation of the non-disadvantaged individual and the socially disadvantaged applicant as a factor in determining control.

(12) If the COBID is unable to determine that the socially disadvantaged owner(s) control the firm, as distinct from the family as a whole, then the socially disadvantaged owner(s) have failed to carry their burden of proof concerning control even though they may participate significantly in the firm’s activities.

(13) Individuals who are not socially disadvantaged may be involved in a MBE, WBE, and/or SDV firm as owners, managers, employers, 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.

(14) The certified owner(s) of the firm may delegate various areas of management, policymaking, or daily operations of the firm to other participants in the firm, regardless of whether these participants are socially disadvantaged individuals. Such delegation of authority must be revocable and the certified owner(s) must retain the power to hire and fire any person to whom they delegate such authority. The managerial role of the certified owner(s) in the firm’s overall affairs must be such that the COBID can reasonably conclude that the certified owner(s) actually exercises control over the firm’s operations, management, and policy.

(15) The certified individual(s) controlling a firm may use an employee leasing company. The use of such a company does not preclude the certified individual(s) from controlling the firm if he or she continues to maintain an employer-employee relationship with the leased employees.

(16) When a firm contracts out the actual management of the business to individuals other than the owner or delegates the management to employees, those persons who have the power to hire and fire these managers exercise management control.

(17) In determining whether a certified owner(s) controls a firm, the COBID may consider whether the firm owns equipment necessary to perform its work.

(a) The business must own or lease sufficient machinery, equipment, and employees to operate. In making this determination, the COBID shall compare the operations of the certified firm to a non-certified firm in the same or similar business. If leasing, it must be a normal industry practice and the lease must not involve a relationship with a prime contractor or non-disadvantaged individual that compromises the control or independence of the firm as referenced under OAR 123-200-1100(2).

(18) The COBID may grant certification to a firm only for specific types of work in which the certified owner(s) has the ability to control the firm. To gain certification in an additional type of work, the firm needs to demonstrate to the COBID that only its certified owner(s) controls the firm with respect to that type of work.

(a) The North American Industry Classification System (NAICS) codes assigned to the firm must describe the types of work an applicant can control and manage and must directly relate to the services provided.

(b) The applicant bears the burden of providing the necessary, detailed company information to COBID for it to make an appropriate NAICS code designation and is primarily responsible to ensure the codes remain current to reflect services provided.

(c) In order for certified individuals to control a partnership, any non-certified partners must not have the power, without the specific written concurrence of the certified partner(s), to contractually bind the partnership or subject the partnership to contract or tort liability.

Stat. Auth.: ORS 200.005 & 200.055
Stats. Implemented: ORS 200.005 & 200.055
Hist.: OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1300

Certification: Application and Procedure

(1) Businesses seeking certification as a DBE, MBE, WBE, SDV, or ESB must complete the Certification Application provided by the COBID.

(2) Applicants seeking certification as a DBE through COBID must meet the eligibility criteria set out in 49 CFR parts 23 and 26 and any written directives, administrative guidelines, and written decisions of the US Department of Transportation.

(3) The COBID will make certification determinations based on the eligibility standards included in these rules and apply written directives of the administrative guidelines, Oregon Revised Statutes, 49 CFR part 26, and written appeal decisions regarding state certification so long as they are in accord with these rules.

(4) The completed application, together with all required supporting documentation, shall be submitted through the e-application process, by mail or in person to the Certification Office for Business Inclusion and Diversity, 775 Summer St. NE, Suite 200, Salem OR 97301. The COBID will not process incomplete applications.

(5) The COBID will take action on completed applications as promptly as its resources permit. The order of priority for processing applications shall be the date the COBID receives the complete application including all supporting documentation.

(6) The COBID may conduct a phone interview or on-site investigation at the owner’s place of business and/or jobsite if applicable. The purpose of the interview and/or site visit is to verify material submitted with the application and to substantiate eligibility.

(7) As part of its investigation, the COBID may require firms to provide information in addition to that requested on the application. The applicant has the burden of proving that he or she is eligible for certification.

(8) The applicant must cooperate fully with the investigation and make available any additional information requested by the COBID.

(9) The COBID shall notify applicants promptly by mail after making a decision. When the COBID denies an application, the letter shall set forth the specific reasons for the denial.

(10) In making certification determinations under this section, the COBID does not consider whether the business has previously performed or would be able to perform a commercially useful function. Repeated failure by a business to perform a commercially useful function may indicate, however, that the business is not independent, owned, or controlled by a socially disadvantaged individual.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0040, OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1400

Certification Review

(1) All certifications are valid for three years.

(2) The COBID will send an annual “no change” statement to firms, approximately 30 days prior to the one-year and two-year anniversaries of the certification date. The applicant must complete the statement, provide federal tax information for the previous year, and provide documentation supporting any changes prior to the anniversary date, or the COBID will decertify the firm.

(3) The COBID will send a certification review notice to certified firms approximately two months prior to the firm’s anniversary date. The applicant shall promptly return the application along with any requested documentation (e.g. by-law amendments, evidence of changes in ownership, etc.). The COBID will review the signed application to determine continued eligibility and may conduct an on-site investigation to verify information submitted.

(4) A firm owner must demonstrate that his or her business currently meets the qualifications for the requested certification. It is the responsibility of the firm to provide the information deemed necessary by the COBID to ascertain eligibility. Failure to return the certification review form or provide supporting documentation may lead to decertification.

Stat Auth.: ORS 200.005
Stats Implemented: ORS 200.006
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1500

Denial and Decertification of MBE, WBE, and SDV Firms

(1) The COBID may deny or decertify a firm at any time it determines that the firm does not or no longer meets the eligibility standards set out in OAR 123-200-1000 through 123-200-2300 and ORS 200.005. The procedure is as follows:

(a) In the case of denial of initial certification, the COBID will notify the applicant in writing of the denial and provide a detailed explanation supporting the reasons for denial.

(b) In the case of decertification, the COBID shall issue a Notice of Intent to Decertify the firm 21 days prior to the date of decertification and provide a detailed explanation to support the reasons for the determination.

(c) In the event of a denial or decertification, the applicant or certified firm has 21 calendar days from the date of notice in which to submit a written appeal to the manager of the COBID. Following the review of the applicant’s written appeal, the manager of the COBID will issue a decision.

(d) If the applicant or certified firm does not agree with the manager’s decision, he or she may request a contested case hearing. The COBID will conduct a contested case hearing in accordance with ORS 183.310 to 183.550. Following the contested case hearing, the Hearings Officer will forward a proposed order to the manager of the COBID for issuance of a final order.

(e) If the applicant or certified firm files an appeal in writing or requests a contested case hearing, the COBID will stay the denial or decertification pending the issuance of the final order. If the applicant or certified firm does not submit a written appeal or request for a contested case hearing to the COBID within the 21-day period, the denial or decertification shall be final.

(2) The COBID may decertify a firm if the socially disadvantaged individual leaves the business or dies.

(3) An individual may withdraw his or her application or certification if he or she no longer wishes to participate in the program. The applicant must complete a notarized withdrawal form provided by the COBID.

(4) Any business denied initial certification is ineligible to reapply for a period of 12 months.

Stat Auth.: ORS 200.055
Stats. Implemented: ORS 200.005
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

Emerging Small Business (ESB) Certification Procedures

123-200-1600

Eligibility Standards

(1) The ESB program is race and gender neutral and is based on the size of the business, not the individual applicant.

(2) A firm’s certification as an ESB may only last for a maximum of 12 consecutive years from the original certificate date and qualify as a tier one or tier two firm.

(a) A certified firm may only remain in each tier for a period of six years.

(b) If the firm graduates to a tier two status, due to size, before exhausting six years of certification under tier one, the firm’s certification in tier two must not exceed a period of six years, regardless of the firm’s certification period as tier one.

(c) If an applicant provides compelling information to show, to the satisfaction of the COBID, that he or she has not received an opportunity to bid on ESB projects during the 12 years of eligibility, the COBID will extend the certification of the firm for one additional year. A firm may receive the extension only once. The firm must provide a written request for an extension to the COBID, including any supporting documentation.

(3) To be eligible for certification as an ESB, a firm must meet the following criteria:

(a) Be in existence, operational, and in business for a profit.

(b) The principal place of business must be located in the State of Oregon as determined by the address used to file federal income taxes. If the business uses a P.O. Box, the COBID may require additional documentation to verify location.

(c) Be properly licensed and legally registered with the Secretary of State in the State of Oregon (i.e. registered as a domestic corporation, limited liability corporation, partnership, or assumed business name, etc.).

(d) Must not be a subsidiary or parent company belonging to a group of firms that are owned or controlled by the same individuals if, taken together, the group of firms do not qualify.

(e) Have average, annual gross receipts over the last three years that do not exceed monetary limitations determined by OBDD/COBID annually based on the Consumer Price Index.

(f) If state or local law requires a person to have a particular license or other credential in order to own and/or control a certain type of firm, then the certified applicant(s) who owns and controls an ESB must possess the required license or credential.

(g) The owner(s) must work a minimum of 20 hours per week for the business.

(h) The business must have 19 or fewer full-time employees to qualify for tier one or have 29 or fewer full-time employees to qualify to tier two. The COBID calculates a full-time employee as follows:

(A) Hours worked by all employees (part-time, seasonal, or full-time) shall be converted into equivalent hours; dividing the total hours worked by 2080.

(B) The COBID does not consider owners of the business in the calculation of the equivalent employees.

(C) The period of calculation shall be the same as the business’ tax year.

Stat Auth.: ORS 200.055
Stats. Implemeted: ORS 200.055
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1700

ESB Certification: Application Form and Procedure

(1) The COBID will utilize ORS 200.170 to review a business’ eligibility for certification as an ESB.

(2) A firm wishing to apply for certification in the ESB program shall complete the application provided by the COBID.

(3) The completed application, together with all required supporting documentation, shall be submitted to the Certification Office for Business Inclusion and Diversity at 775 Summer Street NE, Suite 200, Salem, OR 97301. The COBID will not process incomplete applications.

(4) The COBID will conduct a review and take action on completed applications as promptly as resources permit. The order of priority for processing applications shall be the date the COBID receives the completed application with all supporting documentation.

(5) The COBID shall make a determination based on the eligibility standards included in these rules and the applicable laws of the State of Oregon. As part of its investigation, the COBID may require the applicant firm to provide information in addition to that requested on the application. The applicant(s) has the burden of proving the firm is eligible for certification and meets all the requirements of the program. If the COBID certifies the firm, the agency will send a confirmation letter.

(6) The applicable emerging small business size standard for each applicant set out in ORS 123-200-1600 shall be determined by the business’ primary service offered.

(7) Registration of the business with the Construction Contractors Board and/or Landscape Contractors Board will establish a firm as a construction firm. For the purposes of this program, the COBID will consider a construction-related trucking business as a construction firm. The COBID does not consider Engineering and Architecture firms as construction firms.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055, 200.170
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1800

Certification Review

(1) Certification as an ESB is valid for three years from the date of certification.

(2) The COBID will send an annual “no-change” statement to firms approximately 30 days prior to the one-year and two-year anniversaries of the certification date. The applicant must submit a completed statement, along with federal tax information for the previous year and documentation of any changes, prior to the anniversary date or the firm will be decertified.

(3) The ESB shall notify the COBID within 30 days of any changes, which may affect its continued eligibility in the program. Failure to notify the COBID may result in denial or decertification.

(4) The COBID will send a certification review notice and application to certified firms 60 days prior to expiration of current certification. The applicant shall promptly return the completed application along with any requested documentation (i.e. evidence of change in ownership, federal tax returns for the last year, etc.). Continued certification is not automatic. The applicant must demonstrate that his or her business still meets the criteria set out in OAR 123-200-1600 through 123-200-1700.

(5) The COBID staff shall review the signed application to determine the firm has continued eligibility. The COBID may also request additional information to verify the firm has continued eligibility.

(6) Failure to return the completed review application by the expiration date shall result in decertification.

Stat Auth.: ORS 200.055
Stats. Implemented: ORS 200.055
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-1900

Denial and Decertification of ESB Firms

(1) This rule applies only to the denial and decertification of a firm’s ESB status under Oregon law. The COBID may deny certification or decertify a firm at any time if the agency determines that the firm no longer meets eligibility standards set out in OAR 123-200-1600. The procedure is as follows:

(a) The COBID will issue a Notice of Intent to Deny Certification in the case of denial of initial certification and the reasons therefore.

(b) In the case of decertification, the COBID shall issue a Notice of Intent to Decertify the firm 21 days prior to the date of decertification, and indicate the specific reasons for the decision.

(c) In the event of a denial or decertification, the applicant or firm representative has 21 calendar days from the date of notice in which to submit a written appeal to the manager of the COBID. Following the review of the applicant’s written appeal, the manager of COBID will issue a decision.

(d) If the applicant or firm representative does not agree with the manager’s decision, he or she may request a contested case hearing. The COBID will conduct a contested case hearing in accordance with ORS 183.310 to 183.550. Following the contested case hearing, the Hearings Officer will forward a proposed order to the COBID. The manager of the COBID will issue a final order.

(e) If the applicant or firm representative files an appeal in writing or requests a contested case hearing, the COBID will stay the denial or decertification pending the issuance of the final order. If the applicant or certified firm does not submit a written appeal or request for a contested case hearing to the COBID within the 21-day period, the denial or decertification shall be final.

(2) An applicant or firm representative may withdraw an application or certification if there is no longer a desire to participate in the program. The applicant or firm representative must complete a withdrawal form provided by the COBID.

(3) Any business denied initial certification would be ineligible to reapply for a period of 12 months.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055, 183.310 - 183.550
Hist.: OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-2000

Complaints of Ineligibility for All Programs

(1) A complainant must submit a Complaint of Ineligibility regarding certification of an individual or firm to the COBID. The COBID will process complaints according to the following procedure:

(a) Any individual or agency who believes that an individual or certified firm does not qualify under the standards of eligibility for certification may file a complaint of ineligibility. The complainant(s) must fill out a formal complaint form provided by the COBID. The purpose of the complaint process is to maintain the transparency of all programs.

(b) The complainant must use the form provided and submit the document to the COBID setting forth facts, which indicate that the applicant or certified firm is not eligible. The complaint must include copies of any supporting documents the complainant(s) may possess. The complainant(s) shall describe the facts in as much detail as possible.

(c) The COBID will only investigate complaints based on firsthand knowledge and those that contain allegations supported by evidence. The COBID will not investigate anonymous or third party complaints. Complaints based on hearsay (i.e. third person account, general assumption, word-of-mouth, and/or speculation) will not be investigated. The COBID does not accept general allegations. The COBID will not investigate unsupported complaints and will return the document to the complainant.

(2) The COBID will notify the complainant(s) in writing when it refuses to investigate a complaint. The notification may include:

(a) The initial complaint filed by the complainant(s);

(b) Explanation of why the complaint is not being investigated; and

(c) A request for additional information, when applicable.

(3) The complainant(s) may submit a revised complaint addressing the COBID’s concerns.

(4) The complainant(s) must sign the complaint and provide a physical mailing and email address, and telephone number where the COBID may reach the individual during the investigation.

(5) While responding to requests for information concerning any aspect of the programs, the COBID complies with provisions of the Federal Freedom of Information and Privacy Acts. The COBID may make available to the public any information concerning the programs not prohibited by federal or state law. Information submitted to the COBID is subject to public record law, ORS 192.410, 192.501, 192.502, and 192.505. The public may inspect certain information in the agency’s possession. The information may include names of the complainant. Certain other records the COBID may keep confidential, under certain circumstances. These may include, but are not limited to: reports from creditors, employers, customers, suppliers, financial statements, tax returns, business records, employment history and other personal data submitted by the applicant, customer lists, bids, proposals, and contracting information, production, sales or cost data, and marketing strategy information. Although the agency will attempt to keep the information submitted confidential, it cannot guarantee confidentiality in all cases.

(6) The COBID may keep the identity of the complainant(s) confidential, at the complainant(s) election, throughout the course of the investigation. A complainant(s) may waive this privilege of confidentiality at any time. If such confidentiality will hinder the investigation, proceeding, hearing, or result in a denial of appropriate administrative due process to other parties, the COBID will advise the complainant(s) that, in some circumstances, failure to waive the privilege of confidentiality may result in the closure of the investigation or dismissal of the proceeding or hearing.

(7) The COBID will investigate each complaint as promptly as resources allow. If preliminary investigative results show good cause for in-depth investigation, the COBID will notify the applicant or certified firm identified in the complaint by certified mail. The notice will summarize the grounds for the challenge and will require the applicant or certified firm to provide to the COBID, within a reasonable period of time, information sufficient to permit the agency to evaluate the complaint and the application or certified firm’s qualifications for the programs. The applicant, certified firm, and complainant(s) shall cooperate fully in the COBID's investigation.

(8) After the investigation is complete, the COBID will issue a written decision in the form of a rejection of the complaint, Notice of Intent to Deny, or Notice of Intent to Decertify. The decision will address each issue raised in the complaint and throughout the investigation and the reasoning for the decision. The COBID will mail the written decision to the applicant or certified firm and to the complainant(s). The COBID will not deny or decertify a firm based on a complaint without first giving the firm an opportunity to respond.

(9) The applicant or certified firm has 21 calendar days from the date of Notice of Intent to Deny or Notice of Intent to Decertify in which to submit a written appeal to the manager of the COBID. Following the review of the applicant’s written appeal, the manager of COBID will issue a decision.

(10) If the applicant or certified firm does not agree with the manager’s decision, he or she may request a contested case hearing. The COBID will conduct a contested case hearing in accordance with ORS 183.310 to 183.550. Following the contested case hearing, the Hearings Officer will forward a proposed order to the manager of the COBID for issuance of a final order.

(11) If the applicant or certified firm files an appeal in writing or requests a contested case hearing, the COBID will stay the denial or decertification pending the issuance of the final order. If the applicant or certified firm does not submit a written appeal or request for a contested case hearing to the COBID within the 21-day period, the denial or decertification shall be final.

(12) The COBID will not consider opposing information received about an applicant prior to the initial certification as a complaint, but will consider the information in the investigation of the application for certification.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0090, OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-2100 [Renumbered to 123-200-2300]

123-200-2200

Representation of the COBID by Officer or Employee in Contested Case Hearings

(1) An officer or employee of the COBID may appear on behalf of the COBID in contested case hearings, subject to the approval and authorization of the Attorney General.

(2) The COBID representative may not make legal argument on behalf of the COBID.

(a) "Legal argument" includes arguments on:

(A) The jurisdiction of the COBID to hear the contested case;

(B) The constitutionality of a statute, rule, or the application of a constitutional requirement to the COBID; and

(C) The application of court precedent to the facts of the particular contested case proceeding.

(b) "Legal argument" does not include presentation of evidence, examination and cross-examination of witnesses, presentation of factual arguments, or arguments on:

(A) The application of the facts to the statutes or rules directly applicable to the issues in the contested case;

(B) Comparison of prior actions of the COBID in handling similar situations;

(C) The literal meaning of the statutes or rules directly applicable to the issues in the contested case; and

(D) The admissibility of evidence of the correctness of procedures followed.

(3) When an officer or employee of the COBID represents the agency, the presiding officer shall advise the representative of the manner in which to make objections and which matters to preserve for appeal. Such advice is of a procedural nature and does not change applicable law on waiver of the duty to make timely objection. Where such objections involve legal argument, the presiding officer shall provide reasonable opportunity for the agency officer or employee to consult legal counsel and permit such legal counsel to file written legal argument within a reasonable time after conclusion of the hearing.

Stat. Auth.: ORS 183.450(7) & 183.450(8)
Stats. Implemented: ORS 183.450(7)(b)
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0190, OBDD 7-2013, f. & cert. ef. 9-3-13; OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-2210

Contracting Agency Responsibilities

(1) It is the public agency’s sole responsibility to perform commercially useful function (CUF) reviews.

(2) The COBID may consider and review the CUF reviews completed by the public contracting agency or any other relevant factors when determining whether the certified firm has exhibited a pattern of failing to perform CUFs.

(3) Notwithstanding any other part of this section, the COBID and a public contracting agency may enter into an agreement to share and protect information and otherwise cooperate in order to facilitate the enforcement of ORS 200.065 and ORS 200.075, as permitted by ORS 192.410 to 192.505.

(a) The COBID, for purposes of an investigation regarding certification, will consider CUF reviews under the following circumstances:

(i) During the course of a project

(ii) When multiple reviews occur over an extended period suggesting reoccurring violations

(iii) Within three years of the discovery of an alleged CUF failure.

(4) CUF reviews and investigations shall consider the following:

(a) Whether the certified firm is responsible for execution of the work outlined in the public contract and carries out its responsibilities by actually performing, managing, and supervising the work involved. The public agency may evaluate the amount of work contracted and standard industry practices.

(b) Whether a certified firm is responsible, with respect to materials 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.

(c) Whether a certified firm has a role that is limited to that of an extra participant in a transaction, contract, or project through which participants pass funds in order to obtain the appearance of involvement by the certified firm. In determining whether a certified firm is such an extra participant and thus not performing a CUF, the public agency may examine similar transactions, particularly those in which non-certified firms participate.

(d) Whether a certified firm performs or exercises responsibility for at least 30 percent of the total cost of its contract with its own work force or subcontract with another firm certified by the State of Oregon. If it does not, the public agency may presume the certified firm is not performing a CUF. The firm must not subcontract a greater portion of the work of a contract to a non-certified firm than would be expected based on normal industry practice for the type of work involved.

(5) If a public agency determines that a certified firm is not performing a CUF as provided in paragraph (4) (b), (c), and (d) of this section, the certified firm may present evidence to rebut this presumption. The public agency may determine that the firm is performing a CUF given the type of work involved and normal industry practices.

(6) A public agency shall notify the COBID if the agency investigates a certified firm.

(7) The COBID may not decertify a firm based solely on a public agency’s investigation.

(8) COBID, at its discretion, may perform its own investigation of a certified firm if it receives a complaint or notification that alleges a certified firm has failed to perform a CUF. As part of its investigation, COBID may request information from the complainant or author of the notification unless such requirements violate an agreement entered into by the public contracting agency and COBID under (3) of this section. If COBID does not receive sufficient information to conduct an investigation, COBID may in its discretion close the investigation without taking further action. Requested information may include:

(a) All documentation gathered by the public contracting agency during the CUF review and any additional documentation related to the complaint or investigation.

(b) Disclosure of all participants in a complaint or investigation.

(c) Confirmation that the public contracting agency notified the firm in question that it failed a CUF review and provided the firm an opportunity to present evidence to rebut the claim.

(d) List of current, open contracts let to the firm in question by the public contracting agency.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055, 200.065 and ORS.075
Hist.: OBDD 1-2016, f. & cert. ef. 1-5-16

123-200-2300

Directory

The COBID shall maintain a statewide-unified directory of certified firms as follows:

(1) Certified firms shall use the current business name as registered with the Secretary of State, Corporation Division. Businesses operating under the owner’s individual name shall use the name listed on the business license. The firm may not use other names when contracting business. A firm may use an Assumed Business Name for contracting purposes, but only if the name is in conjunction with the registered business name.

(2) The directory will be maintained in an electronic format and available on-line. The directory shall indicate the certification status of each firm for all programs. The directory shall also include the firm’s telephone numbers, fax number, and mailing address and list the firm's capabilities.

(3) The COBID shall update the directory on a daily basis including changes in business and email addresses and phone number(s).

(4) It is the responsibility of the applicant and certified business to notify the COBID within 30 days of any changes in its ownership or management, which may affect eligibility. Failure to notify the COBID may result in denial or decertification.

Stat. Auth.: ORS 200.055
Stats. Implemented: ORS 200.055
Hist.: OBDD 17-2010, f. 4-30-10, cert. ef. 5-1-10; Renumbered from 123-200-0180, OBDD 7-2013, f. & cert. ef. 9-3-13; Renumbered from 123-200-2100, OBDD 1-2016, f. & cert. ef. 1-5-16

The official copy of an Oregon Administrative Rule is contained in the Administrative Order filed at the Archives Division, 800 Summer St. NE, Salem, Oregon 97310. Any discrepancies with the published version are satisfied in favor of the Administrative Order. The Oregon Administrative Rules and the Oregon Bulletin are copyrighted by the Oregon Secretary of State. Terms and Conditions of Use