Attachment A - Combined Chapter 18-Proposed Changes.pdf

City of Phoenix — Formal (2020-05-06)

Extracted text (via pymupdf) 65382 characters

ARTICLE VI. THE SMALL BUSINESS ENTERPRISE PARTICIPATION PROGRAM1
18-100 Rationale and adoption of findings.
A. Rationale. In 1993 and 1999, the City commissioned and completed disparity studies that revealed
underutilization of local minority-owned and woman-owned business enterprises (M/WBE) in
business opportunities for goods and general services procurement and construction subcontracting
with the City. As a result of the 1993 study, the City established the Minority-owned and Woman-
owned Business Enterprise Program (M/WBE Program). In response to the 1999 study, the M/WBE
Program was revised to include the Small Business Enterprise Program (SBE Program).
In 2005, the City completed a study to review the M/WBE and SBE Programs (2005 Program Update
Study). The 2005 Program Update Study documented substantial progress made by the City in
eliminating disparity and identified the need to continue the M/WBE Program with significant
revisions. The revisions adopted by the City included, but were not limited to, the transition of the
goods and general services procurement program to a race- and gender-neutral small business
enterprise (SBE) program. Further, in response to evidence in the 2005 Program Update Study
showing that some groups participating in the construction subcontracting goals program were near
parity, the City increased the number of construction projects with SBE goals relative to construction
projects with M/WBE goals as a means to transition to a full race- and gender-neutral SBE program.
Statistical evidence gathered from M/W/SBE utilization data from July 1, 2005 through June 30, 2009,
does not support the continuation of a race- and gender-based program:
1. M/W/SBEs earned $53.3 million in 2005-09 on goods and general services contracts, with M/WBEs
earning $48.4 million (91%) of the total;
2. M/W/SBEs firms earned $79.2 million on construction subcontracts, with M/WBEs earning $75.1
million (95%) of the total; and
3. M/WBEs comprised 90% of all certified firms in the City’s M/W/SBE Program prior to May 1, 2010.
STATISTICAL AND OTHER EVIDENCE GATHERED FROM JULY 1, 2010 THROUGH JUNE 30,
2019, SUPPORTS THE CONTINUATION OF A RACE- AND GENDER-NEUTRAL PROGRAM:
IN FISCAL YEAR 2018-2019, SBE FIRMS EARNED 7.54% OF ALL CONSTRUCTION DOLLARS
SPENT ON LOCALLY FUNDED CONTRACTS.
On March 10, March 30, April 21, and April 26, 2010, the City hosted several informational forums for
citizens, advocacy groups and stakeholders to gather evidence required to continue with an
expanded SBE Program. A public hearing was held on April 28, 2010. In addition, the City
established an open comment period from March 30, 2010, through April 30, 2010.
ON JANUARY 15, JANUARY 21, JANUARY 28, AND FEBRUARY 6, 2020, THE CITY HOSTED
SEVERAL INFORMATIONAL FORUMS FOR CITIZENS, ADVOCACY GROUPS AND
STAKEHOLDERS TO GATHER INFORMATION REQUIRED TO CONTINUE WITH A SBE
PROGRAM.

The information gathered at the forums, public hearing, and from the COMMENTS SUBMITTED
DURING THE COMMENT PERIOD REVEALED THAT SMALL BUSINESSES AND PRIME
CONTRACTORS ARE SUPPORTIVE OF THE PROGRAM. continue to face obstacles to full
participation in the marketplace. These obstacles include, but are not limited to, difficulties in
obtaining: To be determined based on public comment.
B. Adoption of Findings. Based on the statistical evidence compiled by the City and the anecdotal
evidence gathered from the public through the above mentioned forums, hearing, and comment
period, the City Council hereby adopts the following findings:
1. The relevant geographic market for construction services purchased by the City is Maricopa
County, Arizona.
2. The available evidence suggests that small businesses continue to experience difficulties
competing in the relevant geographic market, including competing for City construction contracts.
3. A CONTINUING A race- and gender-neutral SBE program would further the mission to increase
business opportunities for all small business enterprises.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)

1
Editor's note—Ord. No. G-5518, § 1, adopted May 19, 2010, effective July 1, 2010, amended the title
of said article to read as herein set out. Formerly said article was entitled Minority-owned Business
Enterprise, Woman-owned Business Enterprise and Small Business Enterprise Participation Program
and derived from Ord. No. G-4697, § 1, 5-18-2005, eff. 7-1-2005.
Cross reference—Public works contracts, § 2-187 et seq.; prequalification of contractors, ch. 31A.
18-101 Definitions.
For the purposes of this article, the following terms shall have the following meanings:
A. Bid means: a quotation, bid, statement of qualifications or proposal by a bidder or contractor to
perform or provide labor or materials to the City.
B. Bidder means: any person, partnership, corporation or other business entity that submits a bid
FOR A CITY CONTRACT or has been selected as a construction manager at risk, design builder or
job order contractor. THE BIDDER CAN BE AN INDIVIDUAL FIRM OR A JOINT VENTURE.
C. Certified SBE means: an SBE that meets the requirements of and has been granted status as a
certified small business enterprise by the City Manager.
D. City means: the City of Phoenix.

E. City Council means: the City Council of the City of Phoenix.
F. City Manager means: the City Manager of the City of Phoenix, or a person designated by THE
such City Manager to implement any or all portions of this article delegated to the City Manager.
G. Commercially Useful Function means: the performance of real and actual services in the
discharge of any contractual endeavor, as stated in Code of Federal Regulations, Title 49, Part 26.
An SBE subcontractor is considered to perform a commercially useful function when the
subcontractor is responsible for execution of a distinct element of the work of a contract and carries
out its responsibilities by actually performing, managing and supervising the work involved with its
own resources. In determining whether an SBE subcontractor is performing a commercially useful
function, factors including but not limited to, the following will be considered:
1. The amount of work subcontracted;
2. Whether the amount the SBE is to be paid is commensurate with the work it will actually perform;
3. Whether the business will perform work in the trade area where experience and expertise has been
demonstrated and for which it is seeking to be or has been certified;
4.Whether the business actually performs, manages and supervises the work for which it has been
contracted to perform;
5. Whether the business purchases goods and/or services from a non-SBE-certified firm and simply
resells goods to the City, City contractor, or other person doing business with the City for the purpose
of allowing those goods to be counted towards fulfillment of SBE utilization goals; and
6.Standard industry practices. Controlled, for purposes of determining whether a business is an SBE
means: the small business owner(s) shall possess and exercise the legal authority and power to
manage business assets, good will and daily operations in the primary trade area for which
certification is sought and apart from administrative functions and they shall actively and continuously
exercise this managerial authority and power in determining the policies of and directing the day-to-
day operations of the business.
H. Eligible project means: any construction contract undertaken by the City unless otherwise
precluded by law.
I. Good faith efforts or good faith participation means: the bidder/ OR PRIME CONTRACTOR must
show that the bidder OR PRIME CONTRACTOR took all necessary and reasonable steps to achieve
an SBE goal or other requirement of this article which steps, by their scope, intensity, and
appropriateness to the objective, could reasonably be expected to obtain sufficient SBE participation,
even if such steps were not fully successful. A list of the types of steps that the City may consider as
part of the bidder’s OR PRIME CONTRACTOR’S good faith efforts to obtain SBE participation may
be found in the administrative rules published by the City Manager and the instructions to bidders for
the respective project.

J. Joint Venture means: an association of two or more persons, or business organization or any
combination of these entities, established to carry on a single business activity limited in scope and
duration to a specific contract with the City.
Local SBE means: an SBE whose principal place of business is located in Maricopa County, Arizona.
K. Owned for purposes of determining whether a business is an SBE means that:
1. The small business owner(s) as the context requires, shall possess 100% ownership interest in the
applicant firm.;
2. This ownership shall be real and continuing, and shall go beyond mere indicia of ownership of the
business reflected in ownership documents; and
3. The small business owner(s) shall enjoy the customary incidents of ownership and shall share in
the risks and profits commensurate with their ownership interests, as demonstrated by an
examination of the substance, rather than the form, of ownership arrangements.
L. Personal Net Worth means: the net value of the assets of an individual remaining after total
liabilities are deducted. An individual’s personal net worth does not include: tThe individual’s
ownership interest in an applicant or participating SBE firm; or the individual’s equity in his or her
primary place of residence. An individual’s personal net worth includes only his or her own share of
assets held jointly or as community property with the individual’s spouse.
M. PRIME CONTRACTOR: SELECTED BIDDER THAT ENTERS INTO A CONSTRUCTION
CONTRACT WITH THE CITY AND HAS THE FULL RESPONSIBILITY FOR ELIGIBLE PROJECT
COMPLETION AND DELIVERY. A SELECTED BIDDER THAT UNDERTAKES TO PERFORM A
COMPLETE CONTRACT AND MAY EMPLOY AND/OR MANAGE ONE OR MORE
SUBCONTRACTORS TO CARRY OUT SPECIFIC PARTS OF THE CONTRACT. THE PRIME
CONTRACTOR CAN BE AN INDIVIDUAL FIRM OR A JOINT VENTURE.
N. Small Business Size means: the size standard as defined in the Small Business Administration
Size Regulations 13 CFR Part 121.
O. Small Business Enterprise (SBE) means: a small business THAT HAS ITS PRINCIPAL PLACE
OF BUSINESS IN MARICOPA COUNTY; that is an independent and continuing enterprise for profit;
performing THAT PERFORMS a Commercially Useful Function; IS owned and controlled by one or
more persons each of whose Personal Net Worth does not exceed LIMITS IDENTIFIED BY U.S.
DOT REGULATIONS-49 CFR, PARTS 23 AND 26 seven hundred fifty thousand dollars; and meets
the current Small Business Size standard in its primary industry or trade area.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-102 Statement of policy.
The City is determined:

A. To expand opportunities for SBE subcontractors on eligible contracts awarded by the City; and
B. To promote full and equal business opportunity for all persons doing business with the City.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-103 Duties of the City Manager for the implementation of SBE Participation Program in City
construction contracting.
The City Manager shall have the following authority and duties:
A. The administration and enforcement of this article.
B. The establishment of written procedures to effectuate this article.
C. The development of a database of certified SBEs across all construction categories to be
maintained as a public record.
D. The establishment and review of applicable SBE goals on a project-by-project basis.
E. The investigation of alleged violations of this article including a party’s failure to act in good faith,
and the issuance of written determinations following these investigations stating the reasons for each
determination, and which may include the imposition of sanctions.
F. The review of cases where PRIME contractors fail to implement previously made SBE
commitments to determine whether there should be further efforts or alternative approaches,
including but not limited to, contact with industry, associations, or any pertinent federal agency, for
information concerning the availability of qualified SBEs.
G. The investigation and determination of whether, in the case of a PRIME contractor’s failure to act
in good faith any of the penalties set forth in Section 18-110 (Failure to meet SBE participation goals)
are appropriate.
H. The certification of contractors, subcontractors or bidders as bona fide SBEs, in accordance with
the standards set forth in Article VIII.
I. The notification to an affected party that the party has the right to appeal a determination of
noncompliance with this article.
J. The maintenance of annual statistical databases on availability and utilization of certified SBEs and
non-SBEs including:
1. The level of SBE participation achieved in contracts subject to this article; and
2. The estimated availability of certified SBEs and non-SBE subcontractors ready, able and willing to
perform work on City projects.

(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-104 Project SBE participation goals.
To determine SBE subcontracting participation goals on eligible projects, the City Manager may
consider:
A. The availability of certified SBEs in various industry classifications who are qualified, willing, and
able to provide labor and materials on the particular contract;
B. The level of participation by such firms in past contracts awarded by the City;
C. The design plans and contract specifications;
D. The annual SBE participation goals; and
E. Any other relevant factors.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-105 Bidder’s requirements regarding submission of an SBE Utilization Plan.
A. Notwithstanding a bidder’s compliance with any other requirement of City ordinances, if SBE
participation goals have been set for an eligible project, no bidder shall be awarded a contract for the
project unless the City Manager has approved the bidder’s SBE Utilization Plan or granted the bidder
a waiver on the project. The bidder’s SBE Utilization Plan shall demonstrate how the bidder will meet
the applicable SBE participation goals set for the project and shall be incorporated into the contract.
B. Each bidder shall submit a completed SBE plan or fully documented waiver request with the bid
submission. The plan shall contain, at a minimum, the names, addresses, and contact persons of the
SBEs to be used in the contract, the type of work or service each business will perform, and the dollar
value of the SBE subcontract. These requirements may be changed by the City Manager from time to
time. PRIME CONTRACTORS/Bidders may meet the applicable SBE project goals through a variety
of methods, as follows:
1. Subcontractor participation. Where a prime contractor utilizes one or more subcontractors to satisfy
its SBE participation commitment, the prime contractor may claim only expenditures to certified SBE
subcontractors performing a commercially useful function in the work of the contract and performing
work in the trade area where SBE certification has been granted.
2. Non-SBE firms not counted. Work subcontracted BY SBE SUBCONTRACTORS to non-SBE firms
will not be counted towards achieving the SBE utilization goal established for the project.
3. Supplier participation. Where a prime contractor utilizes one or more SBE suppliers to satisfy its
SBE commitment, in whole or in part, the SBE supplier participation may be credited towards the
applicable SBE participation goal as follows:

a. If SBE suppliers manufacture the goods supplied, then one hundred percent of the contract amount
is credited towards the applicable SBE participation goal.
b. If the SBE suppliers are wholesalers warehousing the goods supplied, then one hundred percent of
the contract amount is credited towards the applicable SBE participation goal; but only twenty-five
percent of the applicable SBE goal may be attained by non-manufacturing supplier contracts to SBEs.
4. Joint ventures and mentor-protege programs.
a. The City Manager shall encourage, where economically feasible, establishment of joint ventures
and mentor-protege programs to promote prime contracting opportunities for SBEs on all eligible
projects.
b. Where a PRIME contractor/BIDDER engages in a joint venture to satisfy its SBE commitment, the
City Manager shall review and approve all joint venture agreements. On the basis of these
agreements, the City Manager shall determine the degree of SBE joint venture participation that may
be credited towards applicable SBE project goals.
c. The PRIME CONTRACTOR/bidder shall permit the City Manager to review all records pertaining to
joint venture agreements before and after the contract award, to the extent reasonably necessary to
assess compliance with this article.
d. The degree to which a joint venture may satisfy relevant SBE participation goals cannot exceed the
proportionate interest held by the SBE as a member of the joint venture as demonstrated in the
written agreement establishing the joint venture. Further, SBE economic interest in the joint venture
shall be based on sharing of real economic interest in the joint venture and shall include proportionate
control over management, interest in capital acquired by the joint venture, and participation in the joint
venture’s profit or loss.
e. The City Manager shall also encourage mentor-protege programs to assist SBEs on financing,
bonding, construction management, and technical matters. The City Manager shall review and
approve the following terms of each mentor-protege agreement:
i. Type of technical assistance to be provided by mentor;
ii. Rights and responsibilities of each mentor and protege for each contracting activity;
ii. The specific duration of the agreement, which shall not exceed three years; AND
iv. The amount of the protege participation that may be credited toward the applicable SBE goal.
C. After the City executes the project contract, the successful PRIME CONTRACTOR/bidder may not
alter the SBE utilization plan as submitted at the time of the bid without prior written consent of the
City Manager.
D. Subcontractor goals packet SBE Plan.

1. The City will publish its SBE subcontracting goals in the project specifications and the instructions
to bidders. All bidders shall submit at the time of bid a subcontractor goals packet containing their
proposed SBE utilization plan and Letter(s) of Intent for the project, a complete list of SBE
subcontractors, and the dollar value and participation percentage of each SBE proposed subcontract,
a complete list of subcontractors/suppliers contacted in preparation for bid, or a good-faith request for
waiver or both as applicable.
2. Each bidder shall certify on the subcontractor goals packet that the bidder has met the established
SBE project participation goals; or notwithstanding good-faith efforts to meet the goals, the bidder has
been unable to do so and therefore is entitled to a waiver. If this certification is not included as part of
the bid for any reason, the bid shall not be read. In addition, the bid shall not be read or as applicable,
deemed non-responsive unless it includes either the complete subcontractor goals packet if the
bidder has met the established SBE project participation goals; or a fully documented waiver request
if, notwithstanding good-faith efforts, the bidder has failed to meet the goals. All bids that include the
certification and either the complete subcontractor goals packet or a fully documented waiver request
shall be read, unless otherwise deemed nonresponsive.
E. Waiver.
1. All waiver requests shall indicate whether a complete or partial waiver is sought and shall indicate
the scope of any partial-waiver request. The waiver request shall provide evidence of the PRIME
CONTRACTOR’S/bidder’s efforts to meet the project goals, and the waiver will be resolved in the
manner described below.
2. The PRIME CONTRACTOR’S/bidder’s application for waiver of the project goals shall include full
documentary evidence of the PRIME CONTRACTOR’S/bidder’s good-faith efforts to meet the project
goals, and the application shall state why the request for waiver should be granted. The application
shall be in writing and shall include a narrative, affidavits and/or exhibits that explain in detail and
verify the actions taken by the PRIME CONTRACTOR/bidder to meet the goals. The fact that other
PRIME CONTRACTORS/bidders could meet, or claim to meet, the project goals shall not by itself
constitute grounds for denying a waiver request. All requests for waivers shall be evaluated on the
basis of the objective criteria set forth below.
3. The PRIME CONTRACTOR/bidder shall provide as part of the waiver request the following
evidence of its good-faith efforts, and the request will be evaluated on these items:
a. Copies of written notifications to SBEs that their interest in the subcontract is solicited;
b. Evidence of the efforts made to divide the work into small, economically feasible units in order to
increase the likelihood of achieving the stated PROJECT goals;
c. Evidence of efforts made to negotiate with SBEs including at a minimum:
i. The names, addresses and telephone numbers of SBEs that were contacted;
ii. A description of the information provided to SBEs regarding the plans and specifications for
portions of the work to be performed;

iii. A statement of the reasons why additional agreements with SBEs if needed to meet the stated
goals, were not reached;
d. Evidence of efforts made to help SBEs contacted that need assistance in obtaining bonds and
insurance required by the PRIME CONTRACTOR/bidder;
e. As to each contacted SBE, the PRIME CONTRACTOR/bidder considered unqualified, a written
statement of the reasons for the PRIME CONTRACTOR’S/bidder’s conclusion;
f. Written quotes or records of verbal quotes solicited from all SBEs seeking subcontract work with the
PRIME CONTRACTOR/bidder.
4. The City shall waive a project goal, at least in part, if the quotes or proposals received by the
PRIME CONTRACTOR/bidder requesting a waiver from all SBEs in one trade exceed the quote or
proposal of the lowest non-SBE competing for the same work by the lesser of twenty percent or one
hundred thousand dollars. The City shall adopt administrative rules, with input from the Small
Business Enterprise Subcontracting Goals Oversight Committee, to implement the waiver criteria
specified above.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-106 Small Business Enterprise Subcontracting Goals Oversight Committee
A. THE CITY MANAGER SHALL APPOINT A SMALL BUSINESS ENTERPRISE
SUBCONTRACTING GOALS OVERSIGHT COMMITTEE (OVERSIGHT COMMITTEE) TO
MONITOR IMPLEMENTATION OF THE SBE PARTICIPATION PROGRAM ESTABLISHED BY THIS
ARTICLE VI. THE OVERSIGHT COMMITTEE SHALL REVIEW AND COMMENT ON THE CITY
MANAGER’S ADMINISTRATIVE RULES DESIGNED TO IMPLEMENT THIS ORDINANCE AND
PERIODICALLY REVIEW AND COMMENT ON THE CITY’S PROGRESS IN MEETING THE
OBJECTIVES OF THE SBE SUBCONTRACTING GOALS PROGRAM. SBE OVERSIGHT
COMMITTEE MEMBERSHIP SHALL CONSIST OF UP TO EIGHT PERSONS AND WILL BE
COMPOSED OF STANDING AND AD HOC MEMBERS. THERE WILL BE FOUR STANDING
MEMBERS WHO ARE PERMANENT REPRESENTATIVES AND WILL INCLUDE: THE CITY
ENGINEER; THE EQUAL OPPORTUNITY DEPARTMENT DIRECTOR; A MANAGEMENT/BOARD
REPRESENTATIVE OF THE ARIZONA CHAPTER, ASSOCIATED GENERAL CONTRACTORS OF
AMERICA (AZAGC), AND ASSOCIATED MINORITY CONTRACTORS OF ARIZONA (AMCA).
THERE WILL BE UP TO FOUR AD HOC MEMBERS WILL CONSIST OF UP TO TWO
REPRESENTATIVES EACH FROM THE AZAGC AND THE AMCA.
A. The City Manager shall appoint a Small Business Enterprise Subcontracting Goals Oversight
Committee (Oversight Committee) to monitor implementation of the SBE Participation Program
established by this Article VI. The Oversight Committee shall review and comment on the City
Manager’s administrative rules designed to implement this ordinance and periodically review and
comment on the City’s progress in meeting the objectives of the SBE Subcontracting Goals Program.
The Oversight Committee shall be comprised of up to eight persons. A minimum of two members
shall be appointed from City departments that participate in the program and a minimum of three
members shall be appointed from the following organizations or their successors in interest: the

Associated General Contractors of America, Arizona Chapter; and established minority/woman/small
business construction contractor or subcontractor organizations. Committee members shall serve
without compensation.
B. The revisions herein to Article VI shall not apply to any contract publicly advertised before the
effective date of this ordinance or to any contract executed before the effective date of this ordinance.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-107 Review of bid submission and SBE Plan.
A. Bid submission.
1. The City Manager shall review each subcontractor goals packet submitted with the bid to
determine if the bidder included in its submission a completed and signed SBE plan that meets the
SBE goals for the contract. The City Manager shall approve or reject the plan.
2. The City Manager may declare the bid nonresponsive if the City Manager determines a bidder
failed:
a. To provide a completed SBE Plan;
b. To identify all SBEs by name, scope of work and value of work sufficient to meet the applicable
SBE goals for that project;
c. To achieve the dollar value of creditable participation by certified SBEs necessary to meet the SBE
project goals; or
d. To act in good faith; or
e. To meet all requirements for a good-faith waiver of the SBE goals all as determined by the City
Manager.
3. The City Manager may declare the bid nonresponsive if the City Manager determines that a PRIME
CONTRACTOR/bidder furnished false, fraudulent, misleading or materially inaccurate, incomplete
information in the plan, or as part of a bid submission, proposal, or statement of qualifications.
4. If, after consulting with the appropriate City departments, the City Manager determines that the
SBE plan submitted by a PRIME CONTRACTOR/bidder has been altered without prior written
consent or is false or fraudulent, the City Manager shall be authorized to reject the bid, or, if the
determination is made after an award, the City Manager may declare the contract null and void or
may cancel it.
B. Waivers.

1. If a PRIME CONTRACTOR/bidder requests a waiver of project SBE goals, the City Manager shall
determine whether the PRIME CONTRACTOR/bidder has made a good-faith effort to meet the
project goals and whether a waiver of the goals should be granted in whole or in part.
2. In cases where a waiver is requested because SBEs are unavailable to deliver the specified labor
and materials, the City Manager shall determine whether SBEs are not in fact available to provide the
needed labor and materials at competitive prices.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-108 SBE Participation Clause.
Every contract with the City on an eligible project shall include an SBE clause. The SBE clause shall
read as follows:
The contractor agrees to meet the goals of this Agreement by making available opportunities for
Small Business Enterprises (SBEs), as defined in Chapter 18, Article VI of the Phoenix City Code, for
utilization in the work set forth within this Agreement. For this purpose, the PRIME contractor, at
minimum, shall undertake the following:
A. Notify SBEs that the PRIME contractor has subcontracting opportunities available and maintain
records of all SBE and all non-SBE subcontractor responses.
B. Maintain a file of names and addresses of each SBE and non-SBE subcontractor contacted and
action taken with respect to each such contact.
C. Disseminate the PRIME contractor’s SBE participation policy within the contractor’s management
and externally communicate this policy to all subcontractors and suppliers.
D. Undertake and continue specific and personal recruitment efforts (both written and oral) directed at
SBEs as well as SBE contractor trade and assistance organizations.
E. Subdivide the contract into economically feasible segments to facilitate SBE participation.
F. Adopt and comply with the SBE participation plan submitted with its response to the Invitation for
Bids, Request for Qualifications or Request for Proposals, as approved by the City Manager.
G. The PRIME contractor further agrees that any breach of the SBE provisions of this Agreement
shall be material and shall entitle the City to any or all of the following remedies, in addition to all
other remedies allowed by law:
1. In addition to the applicable retention or securities-in-lieu of retention authorized by statute, to
withhold up to ten percent more of all future payments on the involved eligible project until it is
determined that the PRIME contractor is in compliance;
2. To withhold all future payments on the project until it is determined that the PRIME contractor is in
compliance;

3. To reject all future bids for all projects or other procurements with the City of Phoenix until such
time that the PRIME contractor has cured its breaches and demonstrates that it has adopted and
faithfully performed its approved SBE Plan and all other provisions contained in the Agreement; or
4. If any breach of the SBE provisions is discovered or has not been cured by substantial completion
of the project, to reject all of THE PRIME contractor’s future bids, CONTRACTS AWAITING
ISSUANCE OF A NOTICE TO PROCEED (NTP), OR BID OPENINGS for all projects or other
procurements with the City of Phoenix for a period of NOT TO EXCEED one year from the date of
substantial completion of the project. THIS REMEDY WOULD BE AT THE DISCRETION OF THE
CITY MANAGER.; or
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-109 Maintenance of SBE records and reports by contractors.
PRIME Contractors/BIDDERS THAT ARE awarded contracts on eligible projects incorporating SBE
requirements must submit monthly updated participation reports, designed by the City Manager,
which summarize the number and dollar amounts of subcontract awards made during the contract
term and the actual participation of SBE firms that occurred during the report period. These reports
shall be submitted to the City Manager with the monthly pay request.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-110 Failure to meet SBE participation goals.
If the City Manager determines that the PRIME contractor has failed to comply with any provision of
this article, the City Manager may take any or all of the following actions, IN ADDITION TO ALL
OTHER REMEDIES ALLOWED BY LAW:
A. In addition to the applicable retention or securities-in-lieu of retention as authorized by statute, to
withhold from the contractor up to ten percent more of all future payments on the involved eligible
project until it is determined that the PRIME contractor is in compliance;
B. To withhold from the contractor all future payments on the involved project until it is determined
that the PRIME contractor is in compliance;
C. To reject all future bids or offers for all projects or other procurements with the City until such time
that the PRIME contractor has cured its breaches and demonstrates that it has faithfully performed its
approved SBE plan and all other provisions of this article; or
D. If any breach of the SBE provisions is discovered or has not been cured by substantial completion
of the project, to reject all of THE PRIME contractor’s future bids, CONTRACTS AWAITING
ISSUANCE OF A NOTICE TO PROCEED (NTP), OR BID OPENINGS for all projects or other
procurements with the City of Phoenix for a period of NOT TO EXCEED one year from the date of
substantial completion of the project. THIS REMEDY WOULD BE AT THE DISCRETION OF THE
CITY MANAGER.;

(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
Sec. 18-111 – PRIME CONTRACTOR CORRECTIVE ACTION AND APPEALS.
A. IF THE CITY MANAGER DETERMINES THAT A PRIME CONTRACTOR’S OR BIDDER’S
BREACH OF THE SBE PROVISIONS CANNOT BE REMEDIED TO ACHIEVE COMPLIANCE, THE
CITY MANAGER SHALL NOTIFY THE AFFECTED PARTY IN WRITING BY CERTIFIED MAIL OF
THE CORRECTIVE ACTION AS SET FORTH IN EITHER SECTION 18-108(G)(4) OR SECTION 18-
110(D) AND THE REASONS FOR THE CORRECTIVE ACTION.
B. ANY PRIME CONTRACTOR OR BIDDER WHO HAS BEEN DEEMED IN BREACH OF THE SBE
PROVISIONS AND WHO HAS RECEIVED NOTICE OF CORRECTIVE ACTION IDENTIFIED IN
EITHER SECTION 18-108(G)(4) OR SECTION 18-110(D) MAY APPEAL THE DECISION BY FILING
A WRITTEN NOTICE OF APPEAL WITH THE CITY MANAGER WITHIN FOURTEEN (14)
CALENDAR DAYS OF RECEIPT OF THE NOTICE OF CORRECTIVE ACTION. THE WRITTEN
NOTICE MUST STATE THE REASONS FOR THE APPEAL. IMPOSITION OF THE CORRECTIVE
ACTION SET FORTH IN SECTIONS 18-108(G)(1)-(3) AND SECTIONS 18-110(A)-(C) IS NOT
SUBJECT TO THIS APPEAL PROCESS.
C. WITHIN FIVE (5) CALENDAR DAYS OF RECEIPT OF THE NOTICE OF APPEAL FROM THE
AFFECTED PARTY, THE NOTICE OF APPEAL SHALL BE FORWARDED TO THE PERSON
DELEGATED BY THE CITY MANAGER’S OFFICE, WHO SHALL SERVE AS HEARING OFFICER
FOR THE APPEAL. THE HEARING OFFICER SHALL NOT BE A MEMBER OF THE SBE
OVERSIGHT COMMITTEE.
D. THE HEARING OFFICER SHALL:
1. SET A HEARING DATE NOT MORE THAN FOURTEEN (14) CALENDAR DAYS FROM THE
DATE OF RECEIPT OF THE NOTICE.
2. CAUSE A NOTICE OF THE HEARING, WHICH SHALL INCLUDE THE HEARING DATE, TIME
AND PLACE, TO BE SERVED UPON ALL PARTIES BY CERTIFIED MAIL. SUCH NOTICE SHALL
SET FORTH WITH PARTICULARITY THE REASONS FOR THE APPEAL.
3. CONDUCT A HEARING CONCERNING THE DETERMINATION OF NONCOMPLIANCE AND
IMPOSITION OF THE CORRECTIVE ACTION SET FORTH IN EITHER SECTION 18-108(G)(4) OR
SECTION 18-110(D). ALL PARTIES SHALL BE PROVIDED A FAIR AND IMPARTIAL HEARING
AND SHALL BE ALLOWED TO PRODUCE ANY AND ALL RELEVANT EVIDENCE IN EITHER
PARTY'S POSSESSION CONCERNING THE DETERMINATION OF NONCOMPLIANCE WITH THE
REQUIREMENTS OF THIS ARTICLE AND/OR THE ISSUANCE OF CORRECTIVE ACTION. FOR
THE APPEAL, THE BURDEN OF PROOF RESTS ON THE PRIME CONTRACTOR/BIDDER TO
SHOW THAT ESTABLISHED CRITERIA FOR SBE PROVISIONS HAVE BEEN MET; THAT IT CAN
BRING THE CONTRACT INTO SBE UTILIZATION INTO COMPLIANCE; OR THAT MORE THAN
ADEQUATE CORRECTIVE ACTION HAS BEEN TAKEN TO ACHIEVE SBE UTILIZATION
COMPLIANCE.
4. ISSUE A WRITTEN REPORT ON THE APPEAL TO ALL PARTIES THAT SHALL AFFIRM,
ALTER, OR REVERSE THE CORRECTIVE ACTION. THE WRITTEN REPORT SHALL BE SENT

TO ALL PARTIES BY CERTIFIED MAIL WITHIN FOURTEEN (14) CALENDAR DAYS OF THE
HEARING AND SHALL SET FORTH THE REASONS FOR THE DECISION.
E. THE HEARING OFFICER’S DETERMINATION IS FINAL AND MAY NOT BE APPEALED.
18-111 112 Failure of SBE to comply with program requirements.
If the City Manager determines that an SBE has: failed to comply with any provision of this article;
improperly altered bid documents; or submitted false, fraudulent, misleading or materially inaccurate
information, the City Manager may take any or all of the following actions with regard to such THE
SBE:
A. With the City Manager’s prior written consent, allow the contractor to substitute another SBE on
the project;
B. Suspend the SBE’s certification until such time that the SBE has cured its breaches and
demonstrates that it has complied with this article; AND
C. To Decertify the SBE for a period of one year from the date the City Manager discovers the
improper conduct.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-112113 Repeal; exemptions; sunset; severability.
A. Repeal. All resolutions or ordinances and parts of resolutions or ordinances in conflict with this
article VI are hereby repealed.
B. Exemptions. This article shall not apply to any of the following:
1. Any contract publicly advertised prior to the effective date of this article; or
2. Any contract executed prior to the effective date of this article.
C. Sunset rule. Article VI shall expire on June 30, 2020 2025, unless the City Council finds that the
purposes identified in Section 18-102 of this article have not yet been achieved in which case this
article may be extended for up to an additional five-year period.
D. Severability. If any provisions of this article or any application thereof to any person or
circumstance is held invalid, the invalidity shall not affect other provisions or applications of this article
that can be given effect without the invalid provisions or applications, and to this end the provisions of
this article are declared to be severable.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)
18-113114—18-199 Reserved.

Article VII. THE SMALL BUSINESS ENTERPRISE PROCUREMENT PROGRAM*
18-200 Rationale and adoption of findings.
A. Rationale. In 1993 and 1999, the City commissioned and completed disparity studies that revealed
underutilization of local minority-owned and woman-owned business enterprises (M/WBE) in
business opportunities for goods and general services procurement and construction subcontracting
with the City. As a result of the 1993 study, the City established the Minority-owned and Woman-
owned Business Enterprise Program (M/WBE Program). In response to the 1999 study, the M/WBE
Program was revised to include the Small Business Enterprise Program (SBE Program).
In 2005, the City completed a study to review the M/WBE and SBE Programs (2005 Program Update
Study). The 2005 Program Update Study documented substantial progress made by the City in
eliminating disparity, and identified the need to continue the M/WBE Program with significant
revisions. The revisions adopted by the City included, but were not limited to, the transition of the
goods and general services procurement program to a race- and gender-neutral small business
enterprise (SBE) program. Further, in response to evidence in the 2005 Program Update Study
showing that some groups participating in the construction subcontracting goals program were near
parity, the City increased the number of construction projects with SBE goals relative to construction
projects with M/WBE goals as a means to transition to a full race- and gender-neutral SBE program.
Statistical evidence gathered from M/W/SBE utilization data from July 1, 2005 through June 30, 2009,
does not support the continuation of a race- and gender-based program:
1. M/W/SBEs earned $53.3 million in 2005-09 on goods and general services contracts, with M/WBEs
earning $48.4 million (91%) of the total;
2. M/W/SBEs firms earned $79.2 million on construction subcontracts, with M/WBEs earning $75.1
million (95%) of the total; and
3. M/WBEs comprised 90% of all certified firms in the City’s M/W/SBE Program prior to May 1, 2010.
STATISTICAL AND OHER EVIDENCE GATHERED FROM JULY 1, 2010 THROUGH JUNE 30,
2019, SUPPORTS THE CONTINUATION OF A RACE- AND GENDER-NEUTRAL PROGRAM:
IN FISCAL YEAR 2018-2019, SBE FIRMS EARNED 7.54% OF ALL CONSTRUCTION DOLLARS
SPENT ON LOCALLY FUNDED CONTRACTS.
On March 10, March 30, April 21, and April 26, 2010, the City hosted several informational forums for
citizens, advocacy groups and stakeholders to gather evidence required to continue with an
expanded SBE Program. A public hearing was held on April 28, 2010. In addition, the City
established an open comment period from March 30, 2010, through April 30, 2010.
ON JANUARY 15, JANUARY 21, JANUARY 28, AND FEBRUARY 6, 2020, THE CITY HOSTED
SEVERAL INFORMATIONAL FORUMS FOR CITIZENS, ADVOCACY GROUPS AND
STAKEHOLDERS TO GATHER INFORMATION REQUIRED TO CONTINUE WITH AN EXPANDED
SBE PROGRAM.

The information gathered at the forums, public hearing, and from the comments submitted during the
comment period revealed that small businesses continue to face obstacles to full participation in the
marketplace. These obstacles include, but are not limited to, difficulties in obtaining: These obstacles
include, but are not limited to, difficulties in obtaining: 1) credit and financing; 2) similar pricing for
supplies and services; 3) participation in informal networks through which business opportunities are
established; 4) notification of business opportunities; and 5) participation in the bidding process.
B. Adoption of Findings.
Based on the statistical evidence compiled by the City and the anecdotal evidence gathered from the
public through the above mentioned forums, hearing, and comment period, the City Council hereby
adopts the following findings:
1. The relevant geographic market for construction services purchased by the City is Maricopa
County, Arizona.
2. The available evidence suggests that small businesses continue to experience difficulties
competing in the relevant geographic market, including competing for City construction contracts.
3. CONTINUING A race- and gender-neutral SBE program would further the mission to increase
business opportunities for all small business enterprises.
(Ord. No. G-5518, § 1, adopted 5-19-2010, eff. 7-1-2010)

Sec. 18-201. – Definitions.
For the purposes of this article, the following terms shall have the following meanings:
A. Bid means: a quotation, bid, statement of qualifications or proposal by a bidder or contractor to
perform or provide labor or materials to the City.
B. Bidder means: any person, partnership, corporation or other business entity that submits a bid
FOR A CITY CONTRACT or has been selected as a construction manager at risk, design builder or
job order contractor. THE BIDDER CAN BE AN INDIVIDUAL FIRM OR A JOINT VENTURE.
C. Certified SBE means: an SBE that meets the requirements of and has been granted status as a
certified small business enterprise by the City Manager.
D. City means: the City of Phoenix.
E. City Council means: the City Council of the City of Phoenix.
F. City Manager means: the City Manager of the City of Phoenix, or a person designated by THE
such City Manager to implement any or all portions of this article delegated to the City Manager.

G. Commercially Useful Function means: the performance of real and actual services in the
discharge of any contractual endeavor, as stated in Code of Federal Regulations, Title 49, Part 26.
An SBE subcontractor is considered to perform a commercially useful function when the
subcontractor is responsible for execution of a distinct element of the work of a contract and carries
out its responsibilities by actually performing, managing and supervising the work involved with its
own resources. In determining whether an SBE subcontractor is performing a commercially useful
function, factors including but not limited to, the following will be considered:
1. The amount of work subcontracted;
2. Whether the amount the SBE is to be paid is commensurate with the work it will actually perform;
3. Whether the business will perform work in the trade area where experience and expertise has been
demonstrated and for which it is seeking to be or has been certified;
4.Whether the business actually performs, manages and supervises the work for which it has been
contracted to perform;
5. Whether the business purchases goods and/or services from a non-SBE-certified firm and simply
resells goods to the City, City contractor, or other person doing business with the City for the purpose
of allowing those goods to be counted towards fulfillment of SBE utilization goals; and
6.Standard industry practices. Controlled, for purposes of determining whether a business is an SBE
means: the small business owner(s) shall possess and exercise the legal authority and power to
manage business assets, good will and daily operations in the primary trade area for which
certification is sought and apart from administrative functions and they shall actively and continuously
exercise this managerial authority and power in determining the policies of and directing the day-to-
day operations of the business.
H. Eligible contract means: any contract for goods, supplies or general services for use in City
operations unless otherwise precluded by law. Eligible contract does not include sole source
contracts, petty cash purchases, emergency purchases as defined by the City Manager in the City's
administrative regulations, contracts for professional services, contracts for architectural and
engineering services or contracts for the following items: City utility payments, phone payments, rent,
professional association fees, magazine subscriptions, payments to other governmental entities, and
bank transfers. Professional services, which are not affected by this article, refer to infrequent
technical or unique services or functions performed by independent contractors whose profession or
occupation is the rendering of these services.
I. General service means: the furnishing of labor, time or effort by a vendor which does not involve
the delivery of a specific end product other than any requested report or documentation as required
by the service agreement. General service also includes the installation of personal property only;
and to maintenance and repair functions for all City facilities, equipment, property and improvements,
including the replacement of parts and the providing of materials incorporated into City property as a
function of the maintenance or repair service.

J. Good faith efforts or good faith participation means: the bidder must show that the bidder took all
necessary and reasonable steps to achieve an SBE goal or other requirement of this article which
steps, by their scope, intensity, and appropriateness to the objective, could reasonably be expected
to obtain sufficient SBE participation, even if such steps were not fully successful. A list of the types of
steps that the City may consider as part of the bidder's good faith efforts to obtain SBE participation
may be found in the administrative rules published by the City Manager and the instructions to
bidders for the respective project.
K. Goods or supplies means: equipment, products, commodities, or operating supplies purchased by
the City for its operations in the ordinary course of business.
L. Joint Venture means: an association of two or more persons, or business organization or any
combination of these entities, established to carry on a single business activity limited in scope and
duration to a specific contract with the City.
Local SBE means: an SBE whose principal place of business is located in Maricopa County, Arizona.
M. Owned for purposes of determining whether a business is an SBE means that:
1. The small business owner(s) as the context requires, shall possess 100% ownership interest in the
applicant firm.;
2. This ownership shall be real and continuing, and shall go beyond mere indicia of ownership of the
business reflected in ownership documents; and
3. The small business owner(s) shall enjoy the customary incidents of ownership and shall share in
the risks and profits commensurate with their ownership interests, as demonstrated by an
examination of the substance, rather than the form, of ownership arrangements.
N. Personal Net Worth means: the net value of the assets of an individual remaining after total
liabilities are deducted. An individual’s personal net worth does not include: tThe individual’s
ownership interest in an applicant or participating SBE firm; or the individual’s equity in his or her
primary place of residence. An individual’s personal net worth includes only his or her own share of
assets held jointly or as community property with the individual’s spouse.
O. Procurement means: buying, purchasing, renting, leasing or otherwise acquiring goods, supplies
or general services. It also includes all functions that pertain to the obtaining of any good, supply or
general service, including description of requirements, selection and solicitation of sources,
preparation and award of contract, and all phases of contract administration.
P. Request for proposals (RFP) means: all documents, whether attached or incorporated by
reference, utilized for soliciting proposals for goods, supplies and general services.
Q. Small Business Enterprise (SBE) means: a small business THAT HAS ITS PRINCIPAL PLACE
OF BUSINESS IN MARICOPA COUNTY; that is an independent and continuing enterprise for profit;
performing THAT PERFORMS a Commercially Useful Function; IS owned and controlled by one or
more persons each of whose Personal Net Worth does not exceed seven hundred fifty thousand

dollars 1.32 MILLION DOLLARS; and meets the current Small Business Size standard in its primary
industry or trade area.
R. Small Business Size means: the size standard as defined in the Small Business Administration
Size Regulations 13 CFR Part 121.
S. Sole source means: a procurement for which clear and convincing evidence exists that there is
only one source from which the City may obtain goods, supplies or general services suitable for the
City's intended purpose.
T. Vendors means: suppliers, firms, entities, or individuals furnishing goods, supplies or general
services directly to the City.
Sec. 18-202. – Statement of policy.
The City is determined:
A. To expand opportunities for eligible goods, supplies and general services contracts with SBEs
awarded by the City; and
B. To promote full and equal business opportunity for all persons doing business with the City.

Sec. 18-203. – Duties of City Manager to SBE Procurement Program.
The City Manager shall have the following authority and duties:
A. The administration and enforcement of this article.
B. The establishment of written procedures to effectuate this article.
C. The development of a database of SBEs, non-SBE vendors and non-SBE suppliers that
provide goods, supplies and general services to be maintained as a public record.
D. The notification to an affected party that it has the right to appeal the determination of
noncompliance with this article.
E. The investigation of alleged violations of this article, and the issuance of written determinations
following these investigations, stating the reasons for each determination.
F. The coordination of expanded SBE procurement efforts.
G. The maintenance of annual statistical databases on availability and utilization of SBEs
including:
1. The level of SBE participation achieved in the contracts subject to this article; and
2. The estimated availability of SBEs and non-SBE vendors to perform contracts.
H. The assistance and encouragement of City departments in the use of SBEs for requirements
contracts.

I. The requirement of City departments to use good faith efforts to include SBEs in their
contracting practices. In keeping with this objective, contract awarding authorities, including the
Finance Department, shall use good faith efforts to solicit and obtain bids from SBEs on all
solicitations or document their unavailability,

Sec. 18-204. – SBE Reserve Contract Program for goods, supplies and general services.
A. The City Manager shall promptly implement, continue and expand as appropriate an SBE
participation program for procurement of goods, supplies and general services in accordance
with this section.
B. The City Manager may reserve up to ten percent of the solicitation of all goods, supplies and
general services procurements for competition exclusively among certified SBEs. Before the
City Manager may reserve goods, supplies and general services procurements for competition
exclusively among certified SBEs, the City Manager shall consider the availability of certified
SBEs who are qualified, willing and able to provide materials or services in connection with the
particular procurement.

Sec. 18-205. – Conflicts; exemptions; sunset; severability;
A. Conflicts. All resolutions or ordinances and parts of resolutions or ordinances in conflict with
this article are repealed.
B. Exemptions. This article shall not apply to any of the following:
1. Any invitation for bid or request for proposal publicly advertised before the effective date
of this article; or
2. Any contract executed before the effective date of this article.
C. Sunset Rule. Article VII shall expire on June 30, 2015 2025, unless the City Council finds that
the purposes identified in Section 18-202 of this article have not yet been achieved in which
case this article may be extended for up to an additional five-year period.
D. Severability. If any provisions of this article or any application thereof to any person or
circumstance is held invalid, the invalidity shall not affect other provisions or applications of this
article that can be given effect without the invalid provisions or applications, and to this end the
provisions of this article are declared to be severable.

Secs. 18-206. – 18-299. Reserved.

ARTICLE VIII. CERTIFICATION OF SMALL BUSINESS ENTERPRISES
Sec. 18-300. – Definitions.
All definitions in Articles VI and VII of this chapter shall be incorporated into this article, unless
the context otherwise requires.

Sec. 18-301. – City Manager Authority.
The City Manager shall have the following authority and duties for the certification of small business
enterprises (SBEs):

A. The administration and enforcement of this article.
B. The establishment of written procedures to effectuate this article.
C. The certification of contractors, subcontractors, vendors, and suppliers as bona fide SBEs, in
accordance with the standards set forth in this article.
D. The notification to an affected party by certified mail that it has the right to appeal to the City
Manager a denial of certification or decertification as an SBE, as provided in section 18-303.
E. The notification to the Public Works STREET TRANSPORTATION Department or Finance
Department of any denial of certification as an SBE and any appeal of such refusal to certify.
F. The development of a database of certified SBEs to be maintained as a public record.
G. The maintenance of statistical data on the availability of SBEs, non-SBE construction
subcontractors and non-SBE vendors and suppliers.

Sec. 18-302. – Small Business Enterprise Certification.
A. The burden of proof rests on the applicant to establish that the standards and criteria have
been met to obtain SBE certification. The City Manager shall certify SBEs for the SBE
participation programs consistent with the standards set forth in 49 CFR Parts 23 and 26 as
established by the U.S. Department of Transportation for the Federal Disadvantaged Business
Enterprise Program as follows:
1. An eligible SBE under this program shall be an independent and continuing operation
for profit, performing a commercially useful function, and which is owned and controlled
by one or more eligible small business owners respectively. The ownership and control
by a small business owner shall be real and substantial, and shall be indicated by
customary incidents of ownership, as demonstrated by an examination of the substance
rather than the form of ownership and operating arrangements.

2. A small business owner must possess the authority to direct or cause the direction of
the management and policies of the firm critical to the operation of the primary business
of the firm and the trade areas in which the firm is certified and apart from administrative
duties and functions, and to make day-to-day decisions, on such matters of
management, policy and operations. The firm shall not be subject to any formal or
informal restrictions that limit the customary discretion of a small business owner. There
shall be no restrictions by partnership agreements, charter requirements or other
arrangements that prevent a small business owner from making a business decision of
the firm without the cooperation or vote of any owner or other party who is not a small
business owner.
3. An SBE applicant shall satisfy business size standards commensurate with small
business status. Except as required otherwise by law, to determine small business
status for each trade, the City Manager shall adopt the annual gross receipt limitation
for each trade as established by the United States Small Business Administration
("SBA") 13 CFR Part 121, Small Business Size Regulations, Subpart A, Size Eligibility
Provisions and Standards for participation in SBA Programs, as such SBA limitations
are amended from time to time.
4. An SBE applicant shall satisfy an individual personal net worth standard $750,000 SET
BY FEDERAL REGULATION which is commensurate with small business status. The
City Manager shall adopt the personal net worth limitation for each individual owner(s)
as established by the 49 CFR, Parts 23 and 26, Participation by Disadvantaged
Business Enterprises in DOT Financial Assistance programs, as such limitations are
amended from time to time. To determine personal net worth, each SBE applicant shall
submit to the City, and the City Manager will examine, a personal net worth financial
statement including supportive documentation and evidence.
5. For purposes of this program, the applicant must be actively involved in the day-to-day
management of the firm. If the actual management of an SBE firm is contracted out to
individuals other than the owner, those persons who have the ultimate authority to hire
and fire the managers or who can obligate the firm in financial and contractual matters
will for the purpose of this article, be considered as controlling the business.
6. To determine the ownership or control of a business, all securities or other interests that
constitute ownership or control of a business for purposes of establishing it as an SBE
must be held directly by a small business owner. No securities or other ownership
interests held in trust or by any guardian for a minor shall be considered held by a small
business owner.
7. Ownership and control shall be measured as though not subject to the community
property interest of a spouse.
8. A business will be declared ineligible for certification when a reasonable and prudent
determination cannot be made as to ownership and control for a family-owned
enterprise where the members of the family actively involved in the business are not the
qualifying individuals for certification.

B. The City Manager shall investigate SBE applications for certification. Failure to cooperate and
provide all information and documentation required to make a determination of eligibility under
this article will disqualify the applicant for certification. The investigation of ownership
arrangements may exceed the review of formal documents submitted by each entity if:
1. The firm is applying for certification with the City for the first time;
2. The firm is newly formed or it has small business ownership of less than one hundred
percent;
3. There is a previous or continuing employer-employee relationship between or among
present owners;
4. A business which is not an SBE has an interest in the firm;
5. The ownership of the firm has changed since documents have been submitted to the
City Manager;
6. A review of the documents submitted with the application raises serious objective
concerns regarding either ownership or control of the firm; or
7. Information provided in the application process is found to be false, fraudulent,
misleading or materially inaccurate.
C. The City Manager shall grant certification to an approved SBE for a period of five years with
annual updates of the applicable information A FIRM THAT CONTINUES TO MEET
CERTIFICATION ELIGIBILITY REQUIREMENTS WHICH INCLUDES AN ANNUAL REVIEW
OF APPLICABLE INFORMATION. If an SBE A FIRM is denied certification, the business
cannot reapply for certification for a period of twelve months from the date of the notice of
denial; but the business shall have the right to appeal the denial and to be certified if the
appeal is decided in its favor.
D. To remain certified, all SBEs appearing in the certification database will be required to submit a
new affidavit with required documentation every five years ON AN ANNUAL BASIS on an
annual basis to the City Manager as follows:
1. All documentation required as part of the annual update process or five-year
recertification will be evaluated for completeness and accuracy to determine whether
any changes have occurred that affect the status of the business as a bona fide SBE.
An investigation may be conducted to evaluate an applicant for continuing certification
or recertification as deemed appropriate by the City Manager.
2. All certified SBEs are subject to monitoring by the City Manager to assure that the
required ownership and control shall continue.
E. The City Manager may immediately remove or decertify a business that the City Manager finds
is no longer a bona fide SBE. Any of the following reasons, which are not intended to be all-
inclusive, are sufficient grounds for decertification:
1. The business no longer satisfies the ownership, control, or size requirements.

2. The SBE fails to submit, within a reasonable time period, information requested by the
City Manager.
3. The business defaults and is terminated for cause on two or more City contracts within
a one-year period.
4. The SBE is found to have provided false, fraudulent, misleading or materially inaccurate
information to obtain certification that affects the eligibility status of the firm for
certification.
F. Businesses decertified for reasons other than the business's voluntary request may not apply
for recertification for one year from the date of notice of decertification or removal. A business
that is decertified may file an appeal under section 18-303.
Sec. 18-303. – Appeals.
A. Upon a denial of certification or decertification as an SBE by the City Manager, the City
Manager shall notify the BUSINESS affected party in writing by certified mail, setting forth the
reasons for the denial of certification or decertification.
B. Any contractor, subcontractor, vendor, or supplier who BUSINESS THAT has been denied
certification as an SBE or who has been decertified by the City Manager may appeal the
decision by filing a written notice of appeal as designated by the City Manager within seven
working days of receipt of the notice of the denial of certification or decertification. This written
notice must state the reasons for the appeal.
C. Within three working days of receipt of the notice of appeal from the affected party, the City
Manager shall forward the notice to a hearing officer.
D. The hearing officer shall:
1. Set a hearing date not more than seven working FOURTEEN BUSINESS DAYS from
the date of receipt of the notice from the City Manager.
2. Cause a notice of the hearing, which shall include the hearing date, time and place, to
be served upon all parties by certified mail. Such notice shall set forth with particularity
the REASON FOR THE APPEAL charges filed by the affected business.
3. Conduct a hearing concerning the determination of noncompliance. At the hearing, all
parties shall be provided a fair and impartial hearing and shall be allowed to produce
any and all relevant evidence in either party's possession concerning the determination
of noncompliance with the requirements of this article or the denial of certification as an
SBE. For the appeal, the burden of proof rests on the affected party BUSINESS to show
that established criteria for SBE certification have been met.
4. Issue written notice of the decision on the appeal to all parties and shall affirm, alter, or
reverse the denial of certification by the City. The notice of decision shall be sent to all
parties by certified mail within seven working TWENTY BUSINESS days of the hearing
and shall set forth the reasons for the decision.

E. If the decision on appeal reverses the denial of certification or alters the denial of certification
in favor of the BUSINESSaffected party, the affected party’s business shall be certified as an
SBE and added to the certification database maintained by the City. The decision of the
hearing officer is final and shall be binding on all parties, subject to the right of appeal as
provided by law.

PASSED by the Council of the City of Phoenix this -------day of May, 2020.

M A Y O R

ATTEST:

_________________________ City Clerk

APPROVED AS TO FORM:

_________________________ Acting City Attorney

REVIEWED BY:

_________________________ City Manager
HG:tru:860164:CM 85, Item 32