Kansas City - File #: 260692

Date	Ver.	Action By	Action	Result	Action Details	Meeting Details	Video
7/30/2026	1	Council	Move To Introduce		Action details	Meeting details	Not available
7/30/2026	1	Council	referred		Action details	Meeting details	Not available

ORDINANCE NO. 260692

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Sponsor: Mayor Lucas, Councilmembers Bough, O’Neill, Dunca, Robinson, Patterson Hazley, Curls, French and Bunch

An ordinance enacting the small business program.

***** THIS ITEM WILL BE HELD UNTIL AUGUST 11, 2026 *****

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Sec 3-421 Definitions.

(a) The following definitions apply to this division 2, except where an alternate definition has specifically been made applicable:

(1) Affidavit of intended utilization: An affidavit, in a form prescribed by the director, stating the bidder's intent to meet the Local Business Enterprise/Local Small Business Enterprise (LBE/LSBE) goals or to timely request a waiver of the LBE/LSBE goals.

(2) Affiliates / Affiliation - See 13cfr part 121:103

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

(4) Agency head. The individual authorized to act on behalf of an agency.

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

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

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

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

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

(10) Board or boards: CREO Appeals Panel as applicable.

(11) Budget: The total costs reflected within a contract for which LBE/LSBE goals are to be set pursuant to this division.

(12) Business. An individual, corporation, partnership, limited liability company, or other recognized business association that may lawfully be established for the purpose of conducting a for-profit business within the state.

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

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

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

1. The amount of work subcontracted; and

2. Industry practices; and

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

4. Whether LBE/LSBE/EBE has the skill and expertise to perform work for which it is being utilized; and

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

6. Other relevant factors.

b. An LBE/LSBE/EBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of LBE/LSBE/EBE participation. In determining whether an LBE/LSBE/EBE is such an extra participant, one must examine similar transactions, particularly those in which LBE/LSBE/EBEs do not participate.

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

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

e. Whether the LBE/LSBE/EBE is responsible for the purchase and quality of, and payment for, materials used to perform its work under the contract.

There shall be a rebuttable presumption that, when the LBE/LSBE/EBE subcontracts a greater portion of the contract work than normal industry practice, the LBE/LSBE/EBE is not performing a commercially useful function.

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

(16) Construction supply contract. A contract for the purchase of construction materials, supplies, articles or equipment intended to be used or consumed on a construction contract, the majority of which is paid for out of city or agency funds.

(17) Contract:

1. LSBE Eligible Contract: Any contract over $400,000.00 or more, except the

following:

a. Personal services contracts; and

b. Emergency contracts as defined in Code Section XXXX Chp 2

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

d. Land Acquisitions

e. Previously existing external government contracts

f. Inter-governmental Contracts

g. Sole source & Sole brand contracts

2. EBE Eligible Contract: Any contract estimated by the city or agency prior to

solicitation as having a value less than $400,000.00,

a. WSDEPS Eligible Contract: Water Services Dept. contracts for Professional Services under $750,000 as agreed upon by the Dept Director & the CREO Director.

3. LBE Contract: Any construction contract estimated over $25 million

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

(19) Contractor utilization plan or CUP: The statement, in a form prescribed by the director, that must be submitted by a bidder or proposer pursuant to section 3-433 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-433COUTPL> and that states its plan to utilize qualified LBE/LSBE/EBEs in the performance of a contract.

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

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

(22) Department: The civil rights and equal opportunity department

(23) Developer: Entity seeking tax increment financing or city tax abatement incentives from an incentive agency described in subsection 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(b) or 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(c).

(24) Director: The director of the civil rights and equal opportunity department or his authorized representative,

(25) EBE program. The emerging business enterprise program as enacted in this division.

(26) EBE- WSDEPS Program: Expansion of the EBE Program for Water Services Department Professional Services contracts

(27) Economic disadvantage: A diminished ability to compete in the free enterprise system due to diminished capital and credit opportunities as compared to others in the same or similar line of business. In determining whether an individual is economically disadvantaged, the director shall follow the guidance provided in appendix E to 49 CFR Part 26.

(28) Emerging business enterprise (EBE). A for-profit business that:

a. Is at least 51 percent owned, managed and independently controlled by the economically disadvantaged applicant(s); and

b. Exists independently. The firm may have affiliated businesses or subsidiaries but may not be controlled by an affiliated business or subsidiary.

c. Is able to demonstrate that they have the skill and expertise to perform in the particular area(s) of work for which they are seeking certification; and

d. Has a real and substantial presence in the Kansas City metropolitan area. A business enterprise shall be deemed to have a real and substantial presence in the Kansas City metropolitan area if:

1. The business' principal place of business is in the Kansas City metropolitan area (see (19) below): and

2. The business maintains the majority of its full-time employees in the Kansas City metropolitan area: and.

3. The business has transacted business more than once in within the last two years; and

e. Has annual gross receipts that, when added with those of its affiliates or subsidiaries and averaged over three / five consecutive years or life of business if less than three years, do not exceed five (5) percent of the applicable business size standard for the SBA General Contractor Classification which is equivalent of the NAICS code 236220 as established in 13 CFR 121.201, as amended; and

1. For EBE-WSDEPS firms, the firm’s three / five year average gross receipts cannot exceed $9,000,000.

2. For EBE-WSDEPS firms, the firm must be certified for Engineering and/or other professional services.

f. Is certified by the civil rights and equal opportunity department as an emerging business enterprise.

g. The firm’s owner or each individual owner who collectively hold at least 51% ownership interest in the firm owner's personal net worth (as defined in this section) is equal to or less than the permissible personal net worth amount determined by the U.S. Department of Transportation to be applicable to its DBE/SBE programs.

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

(30) Goal: A numerical objective stated as a percentage of contract dollars for participation by qualified LBE/LSBE/EBEs in contracts.

(31) Incentive agency or agency: Each of the commissions, agencies and authorities described in subsection 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(b) or 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(c), or any entity with the authority to recommend to the city tax increment financing or tax abatement.

(32) Incentive agency head: Person authorized to act on behalf of an incentive agency.

(33) Incentive project: A project receiving tax increment financing or tax abatement or exemption from an incentive agency pursuant to contracts described in sections 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(b) and 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(c).

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

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

(36) Letter of intent to subcontract: A document, in a form prescribed by the director that demonstrates the prime contractor or developer's intent to enter a contractual agreement with a selected LBE/LSBE/EBE.

(37) Local Business Enterprise (LBE): A for-profit small business concern that:

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

b. Has a real and substantial presence in the Kansas City metropolitan area as defined by section 3-461 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-461CEAP>(c) and

c. Meets the business size standards for the scopes of work performed by the firm imposed by 13 CFR 121.201 as subsequently amended and this division. Firms which have entered the Three Year Graduation Period are exempted from this requirement for the duration of this requirement for the duration of the Graduation Period.

d. Only firms which have three (or five) years average gross receipts of $10,000,000 or more qualify for certification as an LBE (Tier 1), and

e. Performs a commercially useful function; and

f. Is certified by the civil rights and equal opportunity department.

g. Whose owner or each individual owner who collectively hold at least 51% ownership interest in the firm owner's personal net worth (as defined in this section) is equal to or less than the permissible personal net worth amount determined by the U.S. Department of Transportation to be applicable to its SBE programs. A multiplier of 1.5% will apply to the personal net worth calculation for the owner(s) holding at least a 51% majority ownership in the LBE firm.

Only persons meeting each of the above criteria shall be deemed an LBE for purposes of this division. In order to be credited towards the goals on a particular solicitation for a particular scope of work, the LBE shall be certified as of or listed on the directory on the date a contractor utilization plan is submitted.

(38) Local small business enterprise (LSBE): A for-profit small business concern that:

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

b. Has a real and substantial presence in the Kansas City metropolitan area as defined by section 3-461 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-461CEAP>(c) and

c. Meets the business size standards for the scopes of work performed by the firm imposed by 13 CFR 121.201 as subsequently amended and this division; and

d. Performs a commercially useful function; and

e. Is certified by the civil rights and equal opportunity department.

f. Whose economically disadvantaged owner or owners who collectively hold at least 51% ownership interest in the firm's personal net worth (as defined in this section) is equal to or less than the permissible personal net worth amount determined by the U.S. Department of Transportation to be applicable to its DBE/SBE programs. Only persons meeting each of the above criteria shall be deemed an LSBE for purposes of this division

(39) LBE/LSBE/EBE/DBE/SBE Kansas City, MO. online directory or directory: A source list compiled, maintained and updated by the civil rights and equal opportunity department containing (when provided) the names, mailing addresses, e-mail addresses and facsimiles of certified LBE/LSBE /EBE/DBE/SBE and the NAICS codes denoting scopes of work for which each such LBE/LSBE /EBE/SBE is certified, which LBE/LSBE /EBE/DBE/SBE are in the business of providing construction, professional services and other services and goods from whom bids and proposals can be solicited. The directory is to facilitate identifying LBE/LSBE/EBE/DBE/SBE subcontractors with capabilities relevant to general contracting requirements and to particular solicitations.

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

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

(42) Personal net worth: The net value of the assets of an individual after total liabilities is deducted. An individual's personal net worth does not include the individual's ownership interest in a certified M/WBE or applicant for such certification or the individual's equity, if any, in his or her primary place of residence, or the value of any personal retirement accounts. An individual's personal net worth includes only his or her share of assets held individually or jointly with the individual's spouse.

a. Except as set forth in subsection b, an individual's personal net worth also includes any assets which that individual has transferred to an immediate family member, to a trust a beneficiary of which is the individual or an immediate family member, or to the certified LBE/LSBE/EBE or applicant firm for less than fair market value, within two years prior to an application for certification as an LBE/LSBE/EBE or within two years of submission of the firm's annual affidavit, unless the individual can demonstrate that the transfer is to or on behalf of an immediate family member for that family member's education, medical expenses, or some other form of essential support.

b. Any assets transferred by an individual to an immediate family member that are consistent with the customary recognition of special occasions, such as, but not limited to, birthdays, graduations, weddings, anniversaries, and retirements shall not be included in the personal net worth calculation.

For the LBE program only, the economically disadvantaged owner(s)’ personal net worth limit will receive a 1.5% multiplier.

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

(44) PNW Multiplier: Personal Net Worth Multiplier applicable to firms certified as LBEs participating on LBE contracts.

(45) Principal place of business: The location at which the business records of the LBE/ LSBE /EBE applicant concern are maintained and the location at which the minority or woman individual owner who manages and controls the day-to-day operations spends the majority of his/her working hours.

(46) Professional services or supplies. The term includes contracts for purely labor-related services up to and including highly technical or specialized services and design professional services, as well as contracts for the purchase of materials, supplies, articles or equipment intended to be used or consumed by the city or agency procuring the same, provided however that the term excludes construction contracts and construction supply contracts.

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

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

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

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

(51) Small business enterprise (SBE): A business concern that meets the federal requirements for certification as an SBE (Federal / DOT)

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

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

Sec. 3-422. - Reserved.

Sec. 3-423. - Application of division to LBE / LSBE/EBE Programs .

1. LBE/LSBE Program:

(a) The provisions of this division shall apply to all contracts, as defined in section 3-421 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-421DE>, entered into by the city or incentive agency. Federal or state requirements for disadvantaged business enterprise participation (DBE/SBE) shall supersede this division when required by law or federal or state contract.

(b) Each department director and agency head is responsible for using good faith efforts to achieve the city-wide LBE/LSBE goals set forth in section 3-427 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-427CIDEGO>.

(c) Each contractor or developer with whom the city or an incentive agency enters into a contract for which goals have been set shall either:

(1) Meet or exceed the goals set for that contract; or

(2) Make and provide evidence of good faith efforts to achieve the goals and request a waiver of the contract goals, which waiver shall be granted in the event the contractor or developer has demonstrated that it has made a good faith effort to meet or exceed the goals.

2. EBE Contracts:

(a) The EBE program is intended to provide opportunities by limiting solicitations to EBEs or providing EBEs a bid incentive, as provided in section 3-607 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV4SMLOBUENSL_S3-607SLIN>. The EBE program is not a goal-based program, nor shall it be extended to every contract. Application of the EBE program shall be limited to those eligible contracts in which the director has determined it to be proper as provided herein.

(b) The EBE program, when determined to be applicable by the director, shall extend to eligible contracts solicited by the city or any agency. Every agency shall adopt an emerging business enterprise program that is substantially consistent in every material respect with this division, as determined and approved by the director of civil rights and equal opportunity. No ordinance shall be passed to approve any development plan, redevelopment plan, urban renewal plan, or particular project arising under any such plan and for which economic incentives have been approved or recommended for approval by an agency, nor shall the city execute a contract with an agency for the purpose of providing funds for their development and redevelopment services, unless the agency has first adopted and implemented an emerging business enterprise program in the manner provided for herein.

(c) The director shall review the EBE program annually and make recommendations to the city council as to whether the EBE program should be maintained or modified, but the failure of the director to do so shall not invalidate the EBE program.

(d) The city council shall have the authority to waive the applicability of the EBE program in its entirety, or any portion thereof, if it determines that doing so is in the city's best interests.

Sec. 3-424. - Reserved.

Sec. 3-425. - Application to leases, tax increment financing and tax abatement entities.

(a) Lease of city property for development. The provisions of this division shall apply to all projects on property leased by the city to any person for development of the property by that person or any other authorized person.

(b) Projects under tax increment financing. The tax increment financing commission shall adopt the city's affirmative action program and the city's LBE/LSBE program which shall apply to all projects financed in whole or in part by tax increment financing as that term is used in RSMo § 99.800 et seq. All redevelopment agreements between the tax increment financing commission and a developer must contain LBE/LSBE goals and workforce utilization goals which are approved by the board, as applicable, and which are applicable to 100 percent of all redevelopment project costs, identified within a tax increment financing plan approved by the city council. For purposes of this subsection, the "city's affirmative action program" and "LBE/LSBE program” shall have the same meaning as used in this division.

(c) Projects under tax abatement entities. All corporations organized under RSMo § 353.010 et seq. for the purpose of redevelopment within the city limits, land clearance for redevelopment authority with an area of operation within the city, enhanced enterprise zone boards with an area of operation within the city and planned industrial expansion authority for the city shall adopt the city's affirmative action program and the city's LBE/LSBE program which shall apply to all projects receiving city tax abatement in whole or in part.

Sec. 3-426. - Reserved.

Sec. 3-427. - City-wide goals.

(a) The goals set forth in this section are city-wide annual goals to be used by city departments and incentive agencies. The city-wide goals are not goals for individual contracts. They are goals for total LBE/LSBE participation in all contracts entered into each year. The city-wide goals are established as follows:

Classification	Annual Goal
LBE/LSBE 35%	14.7
	14.4

(b) The LBE and LSBE programs will continue as described by this division with the city-wide goals adjusted annually unless the director has undertaken a comprehensive disparity study, and upon completion of the disparity study, presented the study results to the city council to consider whether to maintain, modify, or terminate the business enterprise programs described by this division.

(c) Neither city-wide annual goals nor individual contract goals should be construed as a limitation on contracting opportunities for the above listed classifications. Such classifications shall be eligible to be awarded contracts consistent with bidding or other contract procedures over and above the percentages listed.

Sec. 3-428. - Reserved.

Sec. 3-429. - City department and incentive agency LBE/LSBE utilization plan.

(a) Each city department and incentive agency shall prepare and submit to the director by April 1, unless otherwise extended by the director, an annual LBE/LSBE utilization plan for the next city fiscal year. Each city department and agency LBE/LSBE utilization plan shall include:

(1) Separate city department or incentive agency goals for participation by qualified LBE/LSBEs as prime contractors and subcontractors in the procurement of goods, professional services, services and construction for the upcoming fiscal year. The goals should be expressed as a percentage of the city department or incentive agency's total fiscal year contract expenditures; and

(2) Any other information that the city department or incentive agency or the director deems relevant or necessary.

(b) A city department or incentive agency may amend its LBE/LSBE utilization plan during the fiscal year to reflect changes in its projected contract expenditures or other relevant circumstances, and shall inform the director of such changes.

(c) In planning its individual contracts, each city department and incentive agency shall utilize the methodologies described in this division and use its good faith efforts to encourage and attempt to obtain participation of qualified LBE/LSBE contractors and shape the scope, specifications and size of a contract to enhance such participation.

(d) City departments and incentive agencies shall encourage eligible businesses to:

(1) Apply to the city's department, or Missouri Department of Transportation (MODOT) for certification; and

(2) Have their names included on departmental bidders and proposers lists in the directory; and

(3) Seek pre-qualification when applicable; and

(4) Compete for city business as prime contractors, subcontractors and suppliers.

(e) City departments and incentive agencies shall make reasonable efforts to:

(1) Advertise contract opportunities in general circulation media, trade and professional association publications, and small business media ; and

(2) Send written notice of specific contract opportunities to small business organizations and those entities on the departmental bidder's and proposer's list; and

(3) With the assistance of the director, shape the scope, specifications and size of a contract to enhance participation opportunities for qualified LBE/LSBEs.

(f) Each city department, as part of his or her annual evaluation, shall be reviewed concerning the implementation of the city's LBE/LSBE program. In the event a deficiency is found, the director of civil rights and equal opportunity or his or her designee will work with the city department to identify prohibiting factors and offer any assistance necessary to successfully implement these Local business enterprise (LBE) and Local Small business enterprise (LSBE) programs.

Sec. 3-430. - Reserved.

Sec. 3-431. - Setting goals for individual contracts.

(a) Goals shall be established for individual contracts by the director, as determined pursuant to this section. Goals shall be applied to the total dollar value of the contract, unless otherwise authorized by the director.

(b) Individual contract goals shall be flexible and are to be determined on a contract-by-contract basis. In determining whether goals should be established for an individual contract or in setting the specific goal for an individual contract, the following shall be considered:

(1) The scope of work; and

(2) The number and types of qualified LBE/LSBE/EBEs available to perform such work, or portions of it; and

(3) Whether the contract can be structured to create potential opportunities for qualified LBE/LSBE/EBEs to participate as subcontractors, service providers and/or suppliers; and

(4) The level of participation of certified LBE/LSBE/EBEs in similar contracts awarded by other city departments and incentive agencies, and on local projects awarded by the state and federal governments in the previous and current fiscal years; and

(5) The city department's or incentive agency's progress toward meeting its annual LBE/LSBEE goals and its expectations as to how future contracts will be used toward meeting such goals; and

(6) The potential dollar amount of the contract.

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

(1) For all city and incentive agency professional service and goods and services contracts with an estimated cost of more than $400,000.00, upon the recommendation of the director, as provided in section 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO>.

(d) When goals are established for a contract, such goals shall be stated in any invitation for bid or request for proposals. No invitation for bid or request for proposals shall be released until goals have been requested and set in accordance with subsection (b) of this section, or until the city department or incentive agency soliciting the contract has been notified by the director that goals will not be established.

(e) For contracts other than construction contracts and contracts for projects leased for development or receiving economic development incentives or tax abatement as described in section 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>, the director is authorized to require a bidder or proposer to make good faith efforts to achieve LBE/LSBE participation without setting a numeric LBE/LSBE goal on the solicitation as long as the director could have set an LBE/LSBE goal based on the factors in section 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO> (b).

Sec. 3-432. - Reserved.

Sec. 3-433. - Contractor utilization plan.

(a) When goals have been established for a contract, each bidder, proposer, contractor, or developer shall submit a contractor utilization plan in the manner required by the department to the director, or agency for incentive agency projects, which shall include the following:

(1) Names and addresses of each qualified LBE/LSBE/EBE that will participate in the contract; and

(2) The work to be performed by each qualified LBE/LSBE, and the amounts each is to be paid for such work.

(c) Bid shopping is prohibited.

(d) At the time of submission of the CUP, the bidder, proposer, contractor or developer, shall also provide to the director, and the incentive agency for incentive projects, a letter of intent signed by each LBE/LSBE/EBE included in the CUP and by the bidder, proposer, contractor or developer. The director must approve or reject the CUP within 30 calendar days of receiving the CUP.

(e) Prior to an incentive agency providing tax incentives to a developer, including the issuance of a tax abatement certificate or the payment or reimbursement of redevelopment project costs, the developer shall have provided to the incentive agency and the incentive agency shall have incorporated within the incentive agency contract a CUP for construction services and professional services that has been approved or deemed approved by the director or the board, as applicable, or in the event a CUP has not been approved or deemed approved by the director or the board, then the incentive agency or city department shall incorporate within the incentive agency contract a CUP which provides for goals established pursuant to section 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO>.

(f) Predevelopment (Place holder)

Sec. 3-434. - Reserved. - Proposed Retainage Section

(a) Do not count the participation of a LBE/LSBE/EBE subcontractor toward a contractor’s final compliance with its obligations until the contractor has paid the LBE/LSBE/EBE the full amount being counted.

Based on 49 CFR 26.55(h) Do not count the participation of a DBE subcontractor toward a contractor's final compliance with its DBE obligations on a contract until the contractor has paid the DBE the amount being counted.

Sec. 3-435. - Determining contract participation credit for LBE/LSBE/EBEs.

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

(1) The total contract dollar amount that a prime contractor has paid or is obligated to pay to a subcontractor that is a certified LBE/LSBE/EBE, except as otherwise expressly provided for herein.

(2) The total contract dollar amount that a prime contractor that is a certified LBE/LSBE performed itself.

(3) Sixty percent of the total dollar amount paid or to be paid by a prime contractor to obtain supplies or goods from a supplier who is a certified LBE/LSBE/EBE.

(4) Forty percent of the total dollar amount paid or to be paid by a prime contractor to obtain supplies or goods from a supplier who is a certified LBE/LSBE/EBE who is acting as a broker on the transaction.

(5) Ten percent of the total dollar amount paid or to be paid by a prime contractor to obtain supplies or goods from a supply broker who is a certified LBE/LSBE/EBE.

(6) One hundred percent of the total dollar amount paid or to be paid by a prime contractor to a manufacturer or fabricator of construction supplies who is a certified LBE/LSBE/EBE.

(7) Subcontractor participation with a lower tier LBE/LSBE/EBE subcontractor by the subcontractor using one of the above methods of participation.

(8) EBE certified firms are permitted to participate as subcontractors on projects with LBE/LSBE goals.

(b) Notwithstanding any other provision of this section, no credit toward achieving the goals on an individual contract shall be given for:

(1) Participation in a contract by any qualified LBE/LSBE/EBE that does not perform a commercially useful function. The prime contractor shall have the burden of proving that an LBE/LSBE/EBE is performing a commercially useful function.

(2) Any portion of the value of the contract that an LBE/LSBE/EBE subcontractor subcontracts back to the prime contractor or any other contractor who is not a qualified LBE/LSBE/EBE.

(3) Materials and supplies used on the contract unless the LBE/LSBE/EBE is responsible for negotiating price, determining quality and quantity, ordering the materials and installing (where applicable) and paying for material itself.

(4) Work performed by an LBE/LSBE/EBE in a scope of work other than that in which the LBE/LSBE/EBE is currently certified.

(c) In order to be credited towards the LBE/LSBE/EBE goals on a particular solicitation for a particular scope of work, the applicable LBE/LSBE/EBE shall be certified by the date on which the CUP is due.

(d) All prime contractors on a city or incentive agency contract or development agreement are to report names, address, scope of work, contract value of each subcontractor retained by them or other subcontractors for the project and the amount paid to each respective subcontractor.

(e) Joint ventures and mentor-protégé participation for credit will be based on the work performed by the certified LBE/LSBE/EBE.

Sec. 3-436. - Reserved.

Sec. 3-437. - Waiver of LBE/LSBE goals.

(a) When a request for waiver has been filed on a city contract, the director may grant a full or partial waiver of contract goals when the director has determined a bidder or proposer has not met the goals despite its good faith efforts, as defined in section 3-441. When a request for waiver been filed on an incentive agency contract, the director and incentive agency shall make a mutual determination as to whether the developer or its prime contractor has made good faith efforts, as defined in section 3-441 to meet the contract goals, and to the extent the director and incentive agency fail to mutually agree within 30 calendar days, the applicable board as determined by sections 3-449 and 3-451 shall determine whether good faith efforts were exerted and its determination shall be final, and upon such determination that the developer or its prime contractor has made good faith efforts with respect to such request for waiver, the request for waiver shall be deemed approved by the director. The process for such determination shall be as described in sections 3-450 and 3-453.

(b) Notwithstanding any other provision of this division, the city council may waive the requirements of this article and award a city contract to a lowest and best bidder or a best proposer if the council created by the city determines it is in the best interests of the city. Moreover, the city council or any city incentive agency may waive the requirements of this division and authorize a city incentive, as defined in Sec. 3-623(a)(3), if the council or any city incentive agency determines it is in the best interests of the city. If the request for waiver comes to any city incentive agency, the incentive agency shall inform the director no less than 30 days before considering the request for waiver. The director shall then make a written recommendation regarding the request for waiver to the city incentive agency for its consideration. The director shall provide a copy of their recommendation to the city manager and the members of the city council.

(c) Each city incentive agency shall annually, on or before May 1st, report in writing to the city manager on the number of waivers the city incentive agency has granted pursuant to subsection (b). The report shall identify each project for which a waiver was granted, along with a description of the incentive provided to the project.

Sec. 3-438. - Reserved.

Sec. 3-439. - Joint venture and mentor-protégé programs.

(a) The joint venture relationship. The department shall encourage voluntary establishment of joint ventures on all request for proposals (RFP) and requests for qualifications (RFQ). Joint ventures have the potential to create prime contracting opportunities for businesses that include LBE/LSBE/EBEs on eligible projects.

(1) A written joint venture agreement must be completed by all parties to the joint venture and executed before a notary public, which clearly delineates the rights and responsibilities of each member or partner, complies with any requirements of the department, as set forth in RFP or RFQ documents, and provides that the joint venture shall continue for the duration of the project. The department shall review joint venture agreements prior to the award of a contract to determine whether the partners, in fact, share a mutual interest in the operation and success or failure of the joint venture. The department may consider:

a. The initial capital investment of each joint venture partner; and

b. The proportional allocation of profits and losses to each venture partner, at least 40 percent of which must be allocated to the LBE/LSBE/EBE partners; and

c. The partners rights to management, control, and ownership; and

d. Whether the partners maintain a joint checking account; and

e. The method of and responsibility for accounting; and

f. The method by which disputes are resolved; and

g. Any additional or further information required by the director or department as set forth in the request for qualifications or proposal documents or otherwise.

(2) The joint venture, and each member of the joint venture, shall provide the department access to review all records pertaining to joint venture agreements before and after the award of a contract in order to reasonably assess compliance with this division.

(3) The failure of any joint venture partner to comply with this section shall render the joint venture agreement invalid and subject the joint venture partners to any or all of the penalties contained in section 3-465 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-465PENONORE>.

(b) The mentor/protégé certification. Mentor/protégé certifications are voluntary and designed to provide LBE/LSBE/EBE firms with advice, technical assistance and/or training. The program is not intended to remove the responsibility of the economically disadvantaged owner(s) from the actual day-to-day management of their firm. The mentor/protégé team shall perform work as designated by the mentor within its relevant scope of work, provided however that the mentor cannot be responsible for the management of the LBE/LSBE/EBE firm and the mentor and the LBE/LSBE/EBE must remain separate and independent business entities.

(1) Mentor companies shall require approval by the department to participate in the program; protégé companies must meet the certification requirements of section 3-461 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-461CEAP> to participate in the program.

(2) The mentor/protégé relationship must be established by a written agreement, completed by both parties to the relationship, and executed before a notary public. This agreement shall clearly delineate the rights and responsibilities of the mentor/protégé.

(3) The department shall review the mentor/protégé agreement for compliance with this section prior to certifying a mentor/protégé relationship.

(4) The mentor/protégé relationship shall exist at least three years, but no more than five years as agreed to by the mentor/protégé team with approval by the department. Both the mentor and protégé can terminate the relationship at any time for any reason and must notify the director of the termination in writing.

(5) A mentor may utilize multiple protégés on a city contract but may have no more than three protégés at any one time, each of which shall be mentored in different commercially useful functions.

(6) A protégé is limited to two mentor/protégé relationships as a participant in the LBE/LSBE/EBE program, and each relationship must be with a different mentor.

(7) During the term of the mentor/protégé certification, the mentor and protégé businesses must each provide to the department a quarterly summary of the mentor skills provided to the protégé, which shall include:

a. The time spent between mentor and protégé business in furtherance of the mentor/protégé relationship; and

b. The nature and extent of managerial, technical, financial and/or bonding assistance provided; and

c. A summary and explanation of any projects bid on or undertaken by the mentor-protégé team in the private sector or for a governmental entity other than the city; and

d. Any additional or further information required by the department or incentive agency as set forth in bid documents or otherwise.

(8) Assistance the mentor may provide the protégé includes, but is not limited to, the following:

a. Extending financial assistance, in the forms of time notes, loans and stock purchases; and

b. Providing technical advice, including cost accounting, estimating, training, plan interpretation, business management, loan packaging, financial counseling, and advice relevant to the success of the particular type of business concern; and

c. Providing equipment and personnel for specific and limited purposes, provided that the equipment and personnel are clearly identified through lease agreements and personnel records, and the protégé exercise the necessary control of personnel and equipment within the normal course of business practice regardless of how the personnel and equipment are acquired; and

d. Providing bonding by either bonding or guaranteeing the bonding on a project-by-project basis, provided that the mentor and protégé create a development plan that includes provisions for ensuring that the protégé acquires the ability to independently bond its projects; and

e. Providing office space, clerical assistance, and other assistance at below market rates.

(9) The following practices within the mentor/protégé relationship are prohibited:

a. A mentor requiring, or a protégé voluntarily entering, an agreement with the mentor to have an exclusive bidding agreement; and

b. Subcontracting arrangements created to artificially inflate LBE/LSBE participation; and

c. Formal or informal agreements that unreasonably limit the protégés control or management of its company; and

d. A mentor entering into any agreement on behalf of the protégé; and

e. An employer/employee relationship between the mentor and protégé at any time during the term of the mentor/protégé relationship.

(10) Termination of the mentor/protégé relationship. Either party to the mentor/protégé relationship may terminate the relationship at will. The department may terminate the mentor/protégé relationship for good cause shown. At the end of the certification, the mentor shall no longer provide the protégé with any assistance and a protégés acceptance of such assistance shall result in the protégé not meeting the eligibility requirements for LBE/LSBE/EBE certification.

(11) Mentor/protégé business thresholds.

a. Notwithstanding anything to the contrary herein, a mentor's business with a protégé shall not exceed the following amounts:

1. End of year 1: 80 percent of the protégé's gross receipts;

2. End of year 2: 70 percent of the protégé's gross receipts;

3. End of year 3: 60 percent of the protégé's gross receipts;

4. End of year 4: 50 percent of the protégé's gross receipts;

5. End of year 5: 50 percent of the protégé's gross receipts; unless the director approves a waiver for good cause or the protégé does not exceed the limitation applicable to the previous year.

b. If the protégé is in its second mentor/protégé relationship, a mentor's business with a protégé shall not exceed the following amounts:

1. End of year 1:50 percent of the protégé's gross receipts;

2. End of year 2: 50 percent of the protégé's gross receipts;

3. End of year 3: 40 percent of the protégé's gross receipts;

4. End of year 4: 30 percent of the protégé's gross receipts;

5. End of year 5:30 percent of the protégé's gross receipts.

Sec. 3-440. - Reserved.

Sec. 3-441. - Standards to determine good faith efforts.

(a) Good faith efforts are efforts that, given all relevant circumstances, a bidder, proposer, contractor, or developer actively and aggressively demonstrates in attempting to meet the prescribed goals. Good faith efforts must be demonstrated to be meaningful and not merely formalistic compliance. Notwithstanding the foregoing or anything in this division to the contrary, to the extent a bidder, proposer, contractor or developer, as applicable, has performed the following, the bidder, proposer, contractor or developer, as applicable, shall be presumptively determined to be in compliance with this section and only determined not to be in compliance upon a clear and convincing showing of an affirmative act or omission that is intentionally contrary to the spirit of this division:

(1) Advertised for at least 15 calendar days prior to the bid or proposal due date opportunities to participate in the contract in general circulation media, trade and professional association publications, small business media, and publications of small business organizations which are included in a list along with their contact information identified on the directory as the list of publications available to publish such advertisements, which list shall be updated by the department no less than every three months, and such 15 calendar days shall be deemed sufficient time to allow LBE/LSBE/EBE firms to participate effectively. Each advertisement shall contain the information required by subsection 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>(a)(9); and

(2) Sent written notices at least 15 calendar days prior to the bid or proposal due date containing the information required by subsection 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>(a)(9), by certified mail, e-mail or other electronic means, to at least 80 percent of the small business organizations which are included in a list along with their contact information identified on the directory as the list of organizations available to receive such notices, which list shall be updated by the department no less than every three months, and such 15 calendar days shall be deemed sufficient time to allow LBE/LSBE/EBE firms to participate effectively; and

(3) Sent written notices, containing the information required by subsection 3-441(a)(9), by certified mail, e-mail or other electronic means, to at least 80 percent of LBE/LSBE/EBEs listed on the directory certified in the applicable scopes of work for the particular bid soliciting their participation in the Contract at least 15 calendar days prior to the bid or proposal due date and such 15 calendar days shall be deemed sufficient time to allow them to participate effectively; and

(4) Attempted to identify portions of the work for qualified LBE/LSBE/EBE participation in order to increase the likelihood of meeting the goals, including breaking down contracts into economically feasible units that take into consideration the capacity of available LBE/LSBE/EBEs appearing on the directory; and

(5) At any time prior to submission of the CUP or submittal of a request for modification of a CUP, requested assistance in writing in achieving the LBE/LSBE goals from the director and acted on the director's recommendations; and

(6) Conferred with certified LBE/LSBE/EBEs which inquired about or responded to the bid solicitation and explained to such LBE/LSBE/EBEs the scope and requirements of the work for which their bids or proposals were solicited, and if not all certified LBE/LSBE/EBEs in the particular scopes listed on the directory have inquired about or responded to the bid solicitation for each scope of work, then contact by certified mail, e-mail or telephone the greater of ten or 80% of additional certified LBE/LSBE/EBEs in the particular scopes listed on the directory and offer to confer with such LBE/LSBE/EBEs for such particular scope of work and request such LBE/LSBE/EBEs to submit a proposal; and

(7) Attempted to negotiate in good faith with certified LBE/LSBE/EBEs which responded to the bid solicitation or those certified LBE/LSBE/EBEs that were conferred with as contemplated by section 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>(a)(6), and other qualified LBE/LSBE/EBEs, at the option of the bidder, proposer, contractor or developer, as applicable, to perform specific subcontracts, not rejecting them as unqualified without sound reasons based on a thorough investigation of their capabilities by the bidder, proposer, contractor or developer; in the event an LBE/LSBE/EBE is the low bid, but rejected as unqualified, the bidder, proposer, contractor or developer and the director or board, as applicable, shall provide sound reasons for rejecting such LBE/LSBE/EBE; and

(8) Attended pre-bid meetings when such meetings were indicated in the solicitation of bids or otherwise by the bidder, proposer, contractor or developer, as applicable or by the director provided the director provides written direction to the bidder, proposer, contractor or developer at the time the goals are recommended by the director pursuant to section 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO> to provide for a pre-bid meeting(s); and

(9) Written notices and advertisements to be provided pursuant to (1), (2) and (3) above shall include the following information:

a. The bid due date;

b. The name of the project;

c. The address or general location of the project;

d. The location of plans and specifications for viewing;

e. Contact information of the prime contractor or developer, as applicable;

f. A general description of the scopes of work that are the subject of the solicitation;

g. The goals established for the applicable contract, and if the goals are still subject to board approval, then a statement that the goals as stated are preliminary and are subject to board approval;

h. If the project or any portion of the project is subject to prevailing wage then a statement that all or a portion of the project will be subject to prevailing wage, as applicable; and if only a portion of the scopes are subject to prevailing wage, then identification of such scopes provided that such scopes are known as of the time of bid solicitation;

i. The date and time of any pre-bid meeting(s), if any, which have been scheduled by the bidder, proposer, contractor or developer as of the bid solicitation; and

j. Any other information deemed relevant by the bidder, proposer, contractor or developer, as applicable, or the director to the extent the director provides written direction to the bidder, proposer, contractor or developer of such additional information at the time the goals are recommended by the director pursuant to section 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO>.

k. In the event the bidder, proposer, contractor or developer amends the scopes previously bid or decides to further open bids, and determines that further notice is necessary, the time for giving notices as provided in (1), (2) and (3) above shall be deemed sufficient if given seven business days in advance of the applicable updated bid due; and

(10) For city construction contracts only, within five business days after drawing the bid specifications, sent certified letters, verifiable e-mails or proof of facsimiles to qualified LBE/LSBE/EBEs listed on the LBE/LSBE/EBE/SBE/DBE Kansas City, MO Online Directory.

(b) Good faith efforts analysis may be performed (1) in the event a CUP is rejected, (2) a request for modification is rejected, or (3) as of the completion of the project, if the bidder, proposer, contractor or developer is not able to meet the goals following the approval of a CUP or request for modification. In the event of one of the foregoing events, a bidder, proposer, or developer or its prime contractor shall submit documentation of its good faith efforts when requested by the city or incentive agency.

(c) Good faith efforts shall be made prior to submission of the contractor utilization plan to the director; provided however efforts made to increase participation of LBE/LSBE/EBEs following submission of the CUP can be considered as evidence of good faith efforts to meet the goals.

(d) For incentive projects, the director shall submit to the relevant incentive agency, his or her initial findings of good faith prior to sending the final good faith efforts finding to the developer and as soon as practicable thereafter the director and incentive agency shall mutually agree as to whether good faith efforts were exerted prior to submitting a final determination to the developer. To the extent the director and incentive agency fail to agree within 30 calendar days, the applicable board as determined by sections 3-449 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-449FAPRSEGOBO> and 3-451 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-451FACOBO> shall determine whether good faith efforts were exerted and the board's determination shall be final. The process for such determination shall be as described in sections 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO> and 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO> (remove?).

(e) Notwithstanding anything herein to the contrary, to the extent the proposer, bidder, contractor or developer or its prime contractor has not met each of the criteria set forth in section 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>(a) for a presumptive determination that the bidder, proposer, contractor, developer, or its prime contractor has exerted good faith efforts, the director, incentive agency or applicable board, nonetheless, may determine, given all relevant circumstances, that good faith efforts were exerted by the proposer, bidder, contractor, developer or its prime contractor. To the extent good faith efforts are determined with respect to the contractor utilization plan, modification or waiver submitted by a bidder, proposer, or developer or its prime contractor, such contractor utilization plan, modification or waiver, shall be deemed approved by the director and the applicable waiver granted (remove?).

Sec. 3-442. - Reserved.

Sec. 3-443. - Modification or substitution.

(a) A bidder, proposer, contractor, or developer shall not make any modification or substitution with regard to an approved contractor utilization plan unless the modification or substitution has first been requested of the director and approved. For city contracts after bid or proposal opening or after a contract is awarded, the director may approve substitutions of other qualified LBE/LSBE/EBEs for those listed in the contractor utilization plan or approve modifications of the amount of participation listed in the contractor utilization plan, if the director determines or, in the case of incentive projects, the applicable incentive agency and the director mutually determine, except in the event the incentive agency and director fail to mutually agree, in which case the applicable board as determined by sections 3-449 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-449FAPRSEGOBO> and 3-451 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-451FACOBO> determines that the bidder, proposer, contractor, or developer made and provided evidence of good faith efforts to substitute the listed LBE/LSBE/EBE with other qualified MBE/WBEs for the listed scope of work or any other scope of work in the project, finds that the bidder, proposer, or contractor has not attempted intentionally to evade the requirements of this division and it is in the best interests of the city and the applicable incentive agency to allow a modification or substitution, and also finds one of the following:

(1) The listed LBE/LSBE/EBE is non-responsive or cannot perform; or

(2) The listed LBE/LSBE/EBE has increased its previously quoted price to the bidder, proposer, contractor, or developer without a corresponding change in the scope of the work; or

(3) The listed LBE/LSBE/EBE has committed a material default or breach of its contract with the contractor or developer; or

(4) Requirements of the scope of work of the contract have changed and render subcontracting not feasible or not feasible at the levels required by the goals established for the contract; or

(5) The listed LBE/LSBE/EBE is unacceptable to the contracting department, department must provide written explanation/justification of unacceptability; or

(6) The listed LBE/LSBE/EBE thereafter had its certification revoked.

The process for such determination by the applicable board in those circumstances in which the director and applicable incentive agency fail to mutually agree on an incentive project shall be as described in sections 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO> and 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO>.

(b) If there is an increase in the quantity of the scope of work performed by an LBE/LSBE/EBE, contractor or developer shall make good faith efforts to use such LBE/LSBE/EBE for the increased work. If extra work not within the general scope of the contract and in excess of $400,000.00 is required, the director shall assign LBE/LSBE goals for the extra work, if appropriate, and the contractor or director shall make good faith efforts under the circumstances to achieve the goal.

(c) Bid shopping is prohibited.

(d) For incentive projects, the director shall submit to the relevant incentive agency, his or her initial determination of whether a modification or substitution is appropriate to the developer and as soon as practicable thereafter the director and the incentive agency shall mutually agree as to whether a modification or substitution is appropriate prior to submitting final determination to the developer; provided, however, to the extent the incentive agency and director fail to agree within 30 calendar days, the applicable board determined by sections 3-449 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-449FAPRSEGOBO> and 3-451 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-451FACOBO> shall determine good faith efforts and the board's determination shall be final. The process for such determination shall be as described in sections 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO> and 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO>.

Sec. 3-444. - Reserved.

Sec. 3-445. - Contract award process.

(a) Whenever a bidder or proposer has submitted a bid or proposal that is not in material compliance with the requirements of this division, the contracting department or incentive agency shall reject the bid or proposal unless the goals are waived pursuant to section 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>.

(b) If, after a contract is awarded, it is determined that a solicitation or award is in violation of this division, the contractor or developer may continue performance if the department director makes a written determination that it is in the best interests of the city, without prejudice to any other legal remedies available to it under the contract.

Sec. 3-446. - Reserved.

Sec. 3-447. - Liquidated damages.

(a) All city and incentive agency contracts which contain goals shall contain a provision which provides for liquidated damages in the event the contractor or developer fails to achieve the LBE/LSBE participation specified in the contractor utilization plan as finally approved by the director or the goals established pursuant to 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO>, whichever is lower, and fails to exert good faith efforts, as determined by the director or, in the case of incentive projects, the mutual determination of the director and the applicable incentive agency; except in the event the director and incentive agency fail to mutually agree, in which event, the determination of the applicable board determined by sections 3-449 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-449FAPRSEGOBO> and 3-451 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-451FACOBO>. The process for such determination shall be as described in sections 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO> and 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO>.

(b) The amount of liquidated damages for city contracts shall be in an amount as determined by the director. For incentive agency contracts, the director and incentive agency shall jointly agree on the amount of liquidated damages and may jointly agree to a remedy alternative to liquidated damages which promotes the goals of the city's LBE/LSBE program. For incentive agency contracts, should the incentive agency and director fail to come to an agreement on the amount of the liquidated damages or a remedy alternative to liquidated damages, the applicable board's determination (pursuant to sections 3-449 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-449FAPRSEGOBO> and 3-451 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-451FACOBO>) of liquidated damages or other alternate remedy under the incentive agency contract shall be final. The process for such determination shall be as described in sections 3-450 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-450REFAPRSEGOBO> and 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO>.

(c) The liquidated damages may not exceed the difference between the monetary amount of the LBE/LSBE participation finally approved, and as may be modified or waived, in accordance with this division, and the amount actually paid to certified LBE/LSBE/EBEs appearing on a CUP or modification approved by the director, unless waived pursuant to section 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>. In determining the amount actually paid to qualified LBE/LSBE/EBEs, no credit shall be given for that portion of the LBE/LSBE participation that was not approved in accordance with the provisions of section 3-435 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-435DECOPACRMBWB>, provided however that the director, director and incentive agency, or board, as appropriate may allow credit if they determine, in their sole discretion, that the contractor or developer acted in good faith. Notwithstanding the foregoing, in the event the CUP anticipated that the contractor or developer would exceed the goals established prior to the submission of the CUP, the liquidated damages may not exceed the difference between the monetary amount of the LBE/LSBE participation pursuant to such goals established prior to the submission of the CUP and the amount actually paid to LBE/LSBE/EBEs.

Sec. 3-448. - Reserved.

Sec. 3-449. - T

Sec. 3-450. -

Sec. 3-451. - Appeals board.

(a) Establishment and authority. There is hereby established the appeals board. The board's authority is limited to city bids, proposals and contracts, and those incentive projects, in which the estimated cost thereof is more than $400,000.00. The board's authority is limited to making determinations as to whether good faith efforts have been made and the assessment and amount of liquidated damages on incentive agency projects when the applicable agency and the director fail to mutually agree, and hearing and investigating appeals set forth in section 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO> hereof arising from city bids, proposals and contracts under its jurisdiction. The board is also authorized, pursuant to sections 3-453 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-453REFACOBO> and 3-622 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV5PRWA_S3-622PRWAAPINPL>, to hear appeals regarding penalties imposed by the director for failure to pay prevailing wage or otherwise engaging in wage theft.

(b) Board composition. The board shall be composed of three members and one alternates appointed by the city manager as follows:

(1) One standing member to form the board on an ongoing basis; and

(2) One standing member appointed from the City’s Law Department; and

(2) One rotating member related to the industry of the contractor or subcontractor; and

(9) One alternate from the community at large; and

(10) The Chairperson shall be selected by the panel to serve a term pursuant to section 3-451(c)

(c) Term. The terms of all board members shall be for a period of four years.

(d) Alternates. In the event a board member is unable to attend a meeting of the board or has a conflict of interest with regard to a particular contract or issue, the alternate shall temporarily serve in such member's stead.

(e) Ineligibility. The following persons are ineligible to serve on the board:

(1) Members of the city council; and

(2) (3) Nonresidents of the city.

(f) Conflict of interest. In the event a board member has a conflict of interest in a contract or issue that comes before the board, the member shall be temporarily replaced by the alternate. In the event an alternate has a conflict of interest in a bid, contract or issue that comes before the board, the alternate shall recuse himself. In the event both the board member and alternate are both unable to serve, the city manager shall appoint an alternate to serve specific to that issue before the board.

(g) Quorum. Three members of the board shall constitute a minimum quorum.

Sec. 3-452. - Reserved.

Sec. 3-453. - Responsibilities of the appeals board.

(a) Any bidder or proposer on a city project having a contract for which the estimated cost thereof is more than $400,000.00 may, prior to award of the contract (except in the case of a substitution, which shall necessarily occur after the award of a contract), appeal to the board any determination by the director concerning the following issues:

(1) Waiver of the individual contract goals pursuant to section 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>(a); or

(2) Substitution of an LBE/LSBE/EBE listed on a contractor utilization plan pursuant to section 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>; or

(3) Substitution of an LBE/LSBE/EBE listed on a contractor utilization plan pursuant to section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU>; or

(4) Modification of the percentage of the participation on a contractor utilization plan pursuant to section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU>.

(b) Any contractor having a contract for which the estimated cost thereof is more than $400,000.00 may prior to the award of a contract (except in the case of a substitution, which shall necessarily occur after the award of a contract) appeal to the board any determination by the director concerning the following issues:

(1) LBE/LSBE/EBE contract credit towards meeting the percentage of LBE/LSBE/EBE participation identified in the contractor utilization plan; or

(2) Substitution of an LBE/LSBE/EBE listed on a contractor utilization plan pursuant to section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU>; or

(3) Modification of the percentage of participation on a contractor utilization plan pursuant to section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU>; or

(4) The assessment or amount of liquidated damages.

(c) Any entity subject to a penalty for failure to pay prevailing wage or otherwise engaging in wage theft pursuant to section 3-622 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV5PRWA_S3-622PRWAAPINPL> may appeal to the board any such determination by the director.

(d) Appeals shall be made to the board by filing with the director within 10 calendar days after notice of the director's determination through a written request for review by the board, stating the grounds of such appeal with specificity. The director shall promptly forward a copy of any appeal to the chairperson and members of the board.

(e) To the extent a bidder, proposer, or contractor is notified that any determination made by the director is final and appealable to the board, and such bidder, proposer, or contractor fails to file an appeal of such final determination within 10 calendar days of such final determination, such failure to file a timely appeal shall constitute a waiver of the right of a bidder, proposer, or contractor to appeal the director's determination and such person shall be estopped to deny the validity of any determination which could have been timely appealed.

(f) Authority of board.

(1) The board shall have authority to decide appeals, and may reverse, affirm, or modify determinations of the director pursuant to section 3-453(a) (b), and (c). The board shall have the power to inquire into all the facts and circumstances of appeals within its jurisdiction and may hold hearings for such purpose. The board shall not hold hearings to inquire into those matters which the board, upon recommendation by the city attorney or their designee, deems to be frivolous and without merit and whose determination shall be final.

(2) Except for those appeals which are found to be frivolous in accordance with section 3-453(f)(1), the board shall hold a hearing within 30 calendar days of the date of filing of a timely appeal. The failure to hold a hearing or determine an appeal frivolous within the prescribed time shall result in the director's determination being overturned without further action, unless the delay was requested or caused by the party filing the appeal. Continuations shall be submitted in writing to the director and shall be limited to one 10-day continuation.

(3) The board shall issue a written report of its decision within 14 calendar days from the conclusion of the hearing. The board’s decision shall be final for all purposes. Notwithstanding the foregoing, the city council shall retain the right to waive any provision of this article in accordance with section 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>(b).

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

(h) For incentive agency projects, when the applicable incentive agency and the director are unable to reach a mutual determination within 30 days, the board shall have the authority to make determinations as to whether good faith efforts have been made and on the assessments and amount of liquidated damages, pursuant to sections 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>, 3-441 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-441STDEGOFAEF>, 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU>, and 3-447 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-447LIDA>. The board shall have the power to inquire into all the facts and circumstances and hold hearings for such purpose. When agreement cannot be reached after the requisite 30 days, the director or applicable agency shall notify the board of such disagreement within five days. Upon notification by the director or applicable agency, the board shall hold a hearing within 30 calendar days. The board shall issue its determination as to whether good faith efforts have been made within 14 calendar days from the conclusion of the hearing and its decision shall be final for all purposes. Notwithstanding the foregoing, the city council shall retain the right to waive any provision of this section.

Sec. 3-454. - Reserved.

Sec. 3-455. - Procedures for construction contracts.

The following shall apply to construction contracts in which the estimated cost thereof is more than $400,000.00:

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

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

a. A contractor utilization plan in conformance with section 3-433 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-433COUTPL> hereof; and

b. Confirmation of subcontractor participation or letters of intent to subcontract; and

c. Good faith efforts documentation pursuant to subsections 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO> and 3-441 if the bidder failed to meet or exceed the goals.

(3) Timely submission of the contractor utilization plan is a material element of the submission. The director is authorized to extend the 48-hour deadline for confirmation of participation or letters of intent to subcontract but not the deadline for submission of the contractor utilization plan.

(4) The apparent successful bidder shall submit documentation of good faith efforts made prior to 48 hours after bid opening when requested by the city or the incentive agency.

(5) A notarized affidavit certifying actual LBE/LSBE/EBE participation in the contract, including the names of such LBE/LSBE/EBEs and the participation amount, and a certification that all LBE/LSBE/EBE subcontractors and other subcontractor have been paid must be submitted by the contractor prior to the city's release of retainage under the contract. Partial release of retainage for subcontractors whose work is completed may be approved with the submission of a notarized affidavit certifying that their work under the contract is complete.

(6) Any increase in the amount of LBE/LSBE/EBE participation after submission of the contractor utilization plan shall not count toward meeting the contract goals, unless otherwise permitted under section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU> hereof.

(7) Bid shopping is prohibited.

Sec. 3-456. - Procedures for incentive agency agreements.

For incentive projects, the incentive agency shall require that the CUP be approved prior to granting the applicable incentive. If the incentive project is bid in phases, the developer(s) shall submit an estimated timetable for additional phases. The director shall approve or reject the CUP within 30 calendar days of receiving the same and, if rejected, provide a written explanation for such rejection. If the director fails to reach a decision within 30 calendar days of receiving the CUP, the CUP will be deemed approved by the director or in the event a CUP has not been approved or deemed approved by the director then the incentive agency shall incorporate within the incentive agency contract a contractor utilization plan which provides for goals established pursuant to section 3-431 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-431SEGOINCO>.

Sec. 3-457. - Procedures for all other contracts.

The following procedures shall apply to all contracts not covered by section 3-455 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-455PRCOCO> and 3-456 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-456PRINAGAG>, and for which goals have been established:

(1) For contracts awarded pursuant to competitive bidding, bidders shall submit an affidavit of intended utilization with their bid. Within 48 hours after bid opening, they shall submit the following additional documentation:

a. A contractor utilization plan in conformance with section 3-433 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-433COUTPL> hereof; and

b. Confirmation of subcontractor participation or letters of intent to subcontract for each certified LBE/LSBE/EBE firm utilized; and

c. Good faith efforts documentation pursuant to subsections 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO> and 3-441 if the bidder failed to meet or exceed the goals.

(2) For contracts awarded pursuant to requests for proposals, proposers shall submit an affidavit of intended utilization with their proposal. Prior to the award of any contract, they shall submit the following additional documentation:

a. A contractor utilization plan in conformance with section 3-433 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-433COUTPL> hereof; and

b. Confirmation of subcontractor participation or letters of intent to subcontract for each certified LBE/LSBE/EBE firm utilized; and

c. Good faith efforts documentation pursuant to subsections 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO> and 3-441 if the bidder failed to meet or exceed the goals.

(3) Timely submission of the contractor utilization plan is a material element of the bid or proposal submission. The director is authorized to extend the 48-hour deadline for the confirmation of participation or letters of intent to subcontract but not the deadline for submission of the contractor utilization plan. However, for contracts for the award of grant funds or contracts for the sale of real property, the director may waive the requirements of subsection (1) or (2), provided that the contract requires that all documentation be submitted and approved prior to the city reimbursing or paying any funds under the contract.

(4) Documentation of good faith efforts shall be submitted when requested by the city or an incentive agency.

(5) Any increase in the amount of LBE/LSBE/EBE participation after submission of the contractor utilization plan shall not count toward meeting the contract goals, unless otherwise permitted under section 3-443 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-443MOSU> hereof.

LBE Contracting Incentives

1. LBE (Large) Contracts

a. LBE Incentives are applicable on City and Agency contracts estimated at $25 million and over. The incentives have been established to encourage the utilization of LBE/LSBE/EBE firms on these large contracts and to allow LBE firms who are approaching or who have entered the 3-year Graduation period continuing opportunities to participate on these large projects.

b. LBEs, LSBEs and EBEs are eligible to participate on LBE contracts.

i. Prime contractors on LBE contracts can receive a credit of 0.25% for each EBE included on the CUP. The total credit will serve to increase the participation toward the goal percentage established for the project.

Sec. 3-458. - Required reporting for city departments.

City departments engaging in contracting shall provide any and all information required by the director in a format prescribed by the director in such intervals are the director may determine, including but not limited to the following:

(a) Contract awards;

(b) Contractor utilization plans;

(c) Contract amendments;

(d) Contract change orders;

(e) Requests for modification or substitution;

(f) Partial releases of retainage;

(g) Contract renewals;

(h) Contract closeouts.

Sec. 3-459. - Required reporting for contractors and developers.

All contractors and developers with a contractor utilization plan shall provide any and all information required by the director in a format prescribed by the director in such intervals as the director may determine.

Sec. 3-461. - Certification and appeals.

(a) To ensure that this article benefits only LBE/LSBE/EBEs that are owned and controlled by bona fide economically disadvantaged owners, the director shall certify LBE/LSBE/EBEs and joint ventures who wish to participate in the program. Any person not certified by the civil rights and equal opportunity department shall not be regarded as an LBE/LSBE/EBE or joint venture under this division.

(b) Each entity seeking certification as an LBE/LSBE/EBE must demonstrate by written documentation or affidavit that it's owner’s (or each individual owner who collectively holds at least 51% ownership interest in the firm) personal net worth is equal to or less than the permissible amount determined by 49 CFR 26.68. Entities seeking certification as an LBE/LSBE/EBE shall submit all information or documentation requested by the city's civil rights and equal opportunity department in determining whether the entity complies with this subsection.

(c) Each person that seeks certification as an LBE/ LSBE/EBE in the Kansas City metropolitan area must demonstrate the business enterprise has a real and substantial presence. Any business enterprise shall be deemed to have a real and substantial presence in the Kansas City metropolitan area if:

(1) The firm's principal office or place of business is in the Kansas City metropolitan area; and

(2) The firm maintains full-time employees in one or more of the firm's offices within the Kansas City metropolitan area to conduct or solicit business in the Kansas City metropolitan Area the majority of their working time; and

(3) The firm has transacted business more than once in the Kansas City metropolitan area within the last three years; and

(4) The firm's principal office or place of business has been in existence in the Kansas City metropolitan area at least six months prior to application for participation in the LBE/LSBE /EBE program.

(d) All applicants and certified businesses shall be subject to an audit by the director at any time. An applicant's or certified business' refusal to facilitate an audit shall be grounds for denial of its certification application or revocation of its certification.

(e) All applicants and certified businesses shall be required to demonstrate and prove that the business has the skill and expertise to perform as a subcontractor in the particular area of work for which it is requesting listing or is listed on the LBE/LSBE/EBE/DBE/SBE Kansas City Online Directory.

(f) All applicants and certified businesses shall submit such information or documentation as may be required by the director in connection with its certification as an LBE/LSBE/EBE, including, but not limited to current licenses and federal, state and local tax returns and schedules (business and personal) for all owners holding an ownership interest in the firm of 5% or more, and all other forms that are required to be included with or attached to the return at the time of filing. Failure to submit such information or documentation shall result in the denial of its certification application or revocation of its certification.

(g) A certification application may be withdrawn by an applicant without prejudice at any time prior to a final determination. All applications and documentation submitted to support an application will not be returned to the applicant.

(h) Burden of proof in the certification process. The firm seeking certification has the burden of demonstrating to the director, by a preponderance of the evidence, that it meets all the requirements for certification. The director shall make determinations concerning whether individuals and firms have met their burden of demonstrating economically disadvantaged status, business size, expertise, commercially useful function, ownership, management, independence and control by considering all the facts in the record, viewed as a whole.

(i) Business size determinations. To be an LBE/LSBE,/EBE a firm (including its affiliates as defined by 13 CFR 121.103) must be an existing and currently functioning small business. The director shall apply the SBA business size standard(s) found in 13 CFR 121.201 and as amended as of the date of application and appropriate to the type(s) of work the firm seeks to perform.

1. LBE Certification: Firms with 3-year (or 5-year) average gross receipts of over $10,000,000 and meeting the SBA size standards for the scopes of work performed by the firm. Firms currently in the 3-year Graduation Period are exempt from the requirement to meet the SBA size standards for the scopes of work performed for the duration of the Graduation Period.

2. LSBE Certification: Firms with 3-year (or 5-year) average gross receipts of less than $10,000,000 and meeting the SBA size standards for the scopes of work performed by the firm.

3. EBE Certification: Firms with 3-year (or 5-year) average gross receipts of less than five (5) percent of the SBA size standard for NAICS 236220).

4. EBE-WSDEPS Certification; Firms with 3-year (or 5-year) average gross receipts under $9,000,000 and meeting the SBA size standards for the scopes of work performed.

(l) Determination of ownership. In determining whether the economically disadvantaged participants in a firm own the firm, the director shall consider all the facts in the record, viewed as a whole.

(2) To be an LBE/ LSBE,/ EBE, a firm must be at least 51 percent owned by one or more economically disadvantaged individuals, reflected as follows:

a. In the case of a corporation, such individuals must own at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding.

b. In the case of a partnership, 51 percent of each class of partnership interest must be owned by economically disadvantaged individuals. Such ownership must be reflected in the firm's partnership agreement.

c. In the case of a limited liability company, at least 51 percent of each class of member interest must be owned by the economically disadvantaged individuals.

(3) The firm's ownership by economically disadvantaged owner(s) must be real, substantial, and continuing, going beyond pro forma ownership of the firm as reflected in ownership documents. The economically disadvantaged owner(s) must enjoy the customary incidents of ownership and share in the risks and profits commensurate with their ownership interests, as demonstrated by the substance, not merely the form, of arrangements.

(4) All securities that constitute ownership of a firm shall be held directly by the economically disadvantaged owner(s). Except as provided in this subsection (3), no securities or assets held in trust, or by any guardian for a minor, are considered as held by economically disadvantaged individual(s) in determining the ownership of a firm. However, securities or assets held in trust are regarded as held by an economically disadvantaged individual(s) for purposes of determining ownership of the firm, if:

a. The beneficial owner of securities or assets held in trust is an economically disadvantaged individual, and the trustee is the same or another such individual; or

b. The beneficial owner of a trust is an economically disadvantaged individual who, rather than the trustee, exercises effective control over the management, policy-making, and daily operational activities of the firm. Assets held in a revocable living trust may be counted only in the situation where the same economically disadvantaged individual is the sole grantor, beneficiary, and trustee.

(5) The contributions of capital or expertise by the economically disadvantaged owner or owners to acquire their ownership interests must be real and substantial. Examples of insufficient contributions include a promise to contribute capital, an unsecured note payable to the firm or an owner who is not an economically 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.

(6) In situations where expertise is relied upon as part of an economically disadvantaged owner's contribution to acquire ownership:

a. The owner's expertise must be:

1. In a specialized field; and

2. In areas critical to the firm's operations; and

3. Indispensable to the firm's potential success; and

4. Specific to the type of work the firm performs; and

5. Documented in the records of the firm. These records must clearly show the contribution of expertise and its value to the firm.

b. The individual whose expertise is relied upon must have a significant financial investment in the firm.

(7) The director shall always deem as held by an economically disadvantaged individual, for purposes of determining ownership, all interests in a business or other assets obtained by the individual:

a. As the result of a final property settlement or court order in a divorce or legal separation, provided that no term or condition of the agreement or divorce decree is inconsistent with this section; or

b. Through inheritance, or otherwise because of the death of the former owner.

(8) Presumptions regarding interests obtained without consideration:

a. The director shall presume as not being held by an economically disadvantaged individual, for purposes of determining ownership, all interests in a business or other assets obtained by the individual as the result of a gift, or transfer without adequate consideration, from any non-economically disadvantaged individual or non-LBE/LSBE/EBE/EBE-WSDEPS firm who is:

1. Involved in the same firm for which the individual is seeking certification, or an affiliate of that firm; or

2. Involved in the same or a similar line of business; or

3. Engaged in an ongoing business relationship with the firm, or an affiliate of the firm, for which the individual is seeking certification.

b. To overcome this presumption and permit the interests or assets to be counted, the economically disadvantaged individual must demonstrate to the director, by clear and convincing evidence, that:

1. The gift or transfer to the economically disadvantaged individual was made for reasons other than obtaining certification as an LBE/LSBE/EBE; and

2. The economically disadvantaged individual actually controls the management, policy, and operations of the firm, notwithstanding the continuing participation of non-economically disadvantaged individuals or non- LBE/LSBE/EBE; firm who provided the gift or transfer.

(9) The director shall apply the following rules in situations in which marital assets form a basis for ownership of a firm:

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 director shall deem the ownership interest in the firm to have been acquired by that spouse with his or her own individual resources, provided that the other spouse irrevocably renounces and transfers all rights in the ownership interest in the manner sanctioned by the laws of the state in which either spouse or the firm is domiciled. The director shall not count a greater portion of joint or community property assets toward ownership than state law would recognize as belonging to the economically disadvantaged owner of the applicant firm.

b. A copy of the document legally transferring and renouncing the other spouse's rights in the jointly owned or community assets used to acquire an ownership interest in the firm must be included as part of the firm's application for LBE/LSBE/EBE certification.

(10) The director may consider the following factors in determining the ownership of a firm. However, the director must not regard a contribution of capital as failing to be real and substantial, or find a firm ineligible, solely because:

a. An economically 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 subsection (7) of this section; or

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

c. Ownership of the firm in question or its assets is transferred for adequate consideration from a spouse who is not a economically disadvantaged to a spouse who is such an individual. In this case, the director must give particularly close and careful scrutiny to the ownership and control of a firm to ensure that it is owned and controlled, in substance as well as in form, by a economically disadvantaged individual.

(j) Determinations concerning control. In determining whether the economically disadvantaged owner controls a firm, the director must consider all the facts in the record, viewed as a whole.

(k) Only an independent business may be certified as an LBE/LSBE/EBE. An independent business is one whose viability does not depend on its relationship with another firm or firms.

a. In determining whether a potential LBE/LSBE/EBE is an independent business, the director must scrutinize relationships with non-LBE/LSBE/EBE firms, in such areas as personnel, facilities, equipment, financial and/or bonding support, and other resources.

b. The director must consider whether present or recent employer/employee relationships between the economically disadvantaged owner(s) of the potential LBE/LSBE/EBE and non-LBE/-LSBE/EBE firms or persons associated with non-LBE/-LSBE/EBE firms compromise the independence of the potential LBELSBE/EBE firm.

c. The director must examine the firm's relationships with prime contractors to determine whether a pattern of exclusive or primary dealings with a prime contractor compromises the independence of the potential LBE/LSBE/EBE firm.

d. In considering factors related to the independence of a potential LBE/LSBE/EBE firm, the director must consider the consistency of relationships between the potential LBE/LSBE/EBE and non-LBE/LSBE/EBE firms with normal industry practice.

(1) An LBE/LSBE/EBE firm must not be subject to any formal or informal restrictions which limit the customary discretion of the economically disadvantaged owners. There can be no restrictions through corporate charter provisions, by-law provisions, contracts or any other formal or informal devices (e.g., cumulative voting rights, voting powers attached to different classes of stock, employment contracts, requirements for concurrence by non-disadvantaged partners, conditions precedent or subsequent, executory agreements, voting trusts, restrictions on or assignments of voting rights) that prevent the economically disadvantaged owners, without the cooperation or vote of any non-economically disadvantaged owners, from making any business decision of the firm. This paragraph does not preclude a spousal co-signature on documents.

(2) The economically disadvantaged owners must possess the power to direct or cause the direction of the management and policies of the firm and to make day-to-day as well as long-term decisions on matters of management, policy and operations.

a. An economically disadvantaged owner must hold the highest officer position in the company (e.g., chief executive officer or president).

b. In a corporation, economically disadvantaged owners must control the board of directors.

c. In a partnership, one or more economically disadvantaged owners must serve as general partners, with control over all partnership decisions.

(3) Individuals who are not economically disadvantaged may be involved in an LBE/LSBE/EBE firm as owners, managers, employees, stockholders, officers, and/or directors. Such individuals must not, however, possess or exercise the power to control the firm, or be disproportionately responsible for the operation of the firm.

(4) The economically disadvantaged owners of the firm may delegate various areas of the management, policymaking, or daily operations of the firm to other participants in the firm, regardless of whether these participants are economically disadvantaged owners. Such delegations of authority must be revocable, and the economically disadvantaged owners must retain the power to hire and fire any person to whom such authority is delegated. The managerial role of the economically disadvantaged owners in the firm's overall affairs must be such that the recipient can reasonably conclude that the economically disadvantaged owners actually exercise control over the firm's operations, management, and policy.

(5) The economically disadvantaged owners must have an overall understanding of, and managerial and technical competence and experience directly related to, the type of business in which the firm is engaged and the firm's operations. The economically disadvantaged owners are not required to have experience or expertise in every critical area of the firm's operations, or to have greater experience or expertise in a given field than managers or key employees. The economically disadvantaged owners must have the expertise, technical competence, and ability to intelligently and critically evaluate information presented by other participants in the firm's activities and to use this information to make independent decisions concerning the firm's daily operations, management, and policymaking. Generally, expertise limited to office management, administration, or bookkeeping functions unrelated to the principal business activities of the firm is insufficient to demonstrate control.

(6) If state or local law requires the persons to have a particular license or other credential in order to own and/or control a certain type of firm, then the economically disadvantaged persons who own and control a potential LBE/LSBE/EBE firm of that type must possess the required license or credential. If state or local law does not require such a person to have such a license or credential to own and/or control a firm, the director must not deny certification solely on the ground that the person lacks the license or credential. However, the director may take into account the absence of the license or credential as one factor in determining whether the economically disadvantaged owners actually control the firm.

(8) The director may consider differences in remuneration between the economically disadvantaged owners and other participants in the firm in determining whether to certify a firm as an LBE/ LSBE/EBE. Such consideration shall be in the context of the duties of the persons involved, normal industry practices, the firm's policy and practice concerning reinvestment of income, and any other explanations for the differences provided by the firm. The director may determine that a firm is controlled by its economically disadvantaged owner although that owner's remuneration is lower than that of some other participants in the firm. In a case where a non-economically disadvantaged individual formerly controlled the firm, and a economically disadvantaged owner individual now controls it, the director may consider a difference between the remuneration of the former and current controller of the firm as a factor in determining who controls the firm, particularly when the non-economically disadvantaged individual remains involved with the firm and continues to receive greater compensation than the economically disadvantaged individual.

(9) In order to be viewed as controlling a firm, an economically disadvantaged owner cannot engage in outside employment or other business interests that conflict with the management of the firm or prevent the individual from devoting sufficient time and attention to the affairs of the firm to control its activities. For example, absentee ownership of a business and part-time work in a full-time firm are not viewed as constituting control. However, an individual could be viewed as controlling a part-time business that operates only on evenings and/or weekends, if the individual controls it all the time it is operating.

(10) A economically disadvantaged individual may control a firm even though one or more of the individual's immediate family members (who themselves are not economically disadvantaged) participate in the firm as a manager, employee, owner, or in another capacity. Except as otherwise provided in this paragraph, the director must make a judgment about the control the economically disadvantaged owner exercises vis-à-vis other persons involved in the business as in other situations, without regard to whether or not the other persons are immediate family members. If the director cannot determine that the economically disadvantaged owners, as distinct from the family as a whole, control the firm, then the economically disadvantaged owners have failed to carry their burden of proof concerning control, even though they may participate significantly in the firm's activities.

(11) Where a firm was formerly owned and/or controlled by a non-economically disadvantaged individual (whether or not an immediate family member), ownership and/or control were transferred to an economically disadvantaged individual, and the non-economically disadvantaged individual remains involved with the firm in any capacity, the economically disadvantaged individual now owning the firm must demonstrate to the director, by clear and convincing evidence, that:

a. The transfer of ownership and/or control to the economically disadvantaged individual was made for reasons other than obtaining certification as an LBE/LSBE/EBE; and

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

(12) In determining whether a firm is controlled by its economically disadvantaged owners, the director shall consider whether the firm owns equipment necessary to perform its work. However, the director must not determine that a firm is not controlled by economically disadvantaged individuals solely because the firm leases, rather than owns, such equipment, where leasing equipment is a normal industry practice and the lease does not involve a relationship with a prime contractor or other party that compromises the independence of the firm.

(13) The director shall grant certification to a firm only for specific types of work in which they are currently functioning and in which the economically disadvantaged owners have the ability to control the firm. To become certified in an additional type of work, the firm needs to demonstrate to the director that its economically disadvantaged owners are able to control the firm with respect to that type of work. The director may not, in this situation, require that the firm be recertified or submit a new application for certification, but must verify the economically disadvantaged owner's control of the firm in the additional type of work.

(14) A business operating under a franchise or license agreement may be certified if it meets the standards in this subpart and the franchiser or licenser is not affiliated with the franchisee or licensee. In determining whether affiliation exists, the director should generally not consider the restraints relating to standardized quality, advertising, accounting format, and other provisions imposed on the franchisee or licensee by the franchise agreement or license, provided that the franchisee or licensee has the right to profit from its efforts and bears the risk of loss commensurate with ownership. Alternatively, even though a franchisee or licensee may not be controlled by virtue of such provisions in the franchise agreement or license, affiliation could arise through other means, such as common management or excessive restrictions on the sale or transfer of the franchise interest or license.

(15) In order for a partnership to be controlled by economically disadvantaged individuals, any non-economically disadvantaged partners must not have the power, without the specific written concurrence of the economically disadvantaged partner(s), to contractually bind the partnership or subject the partnership to contract or tort liability.

(16) The economically disadvantaged individuals controlling a firm may use a professional and commercial employee leasing company. The use of such a company does not preclude the economically disadvantaged individuals from controlling their firm if they continue to maintain an employer-employee relationship with the leased employees. This includes being responsible for hiring, firing, training, assigning, and otherwise controlling the on-the-job activities of the employees, as well as ultimate responsibility for wage and tax obligations related to the employees.

(17) The director may consider, in making certification decisions, whether a firm has exhibited a pattern of conduct indicating its involvement in attempts to evade or subvert the intent or requirements of the LBE/LSBE/EBE program.

(18) The director shall evaluate the eligibility of a firm on the basis of present circumstances. The director shall not refuse to certify a firm based solely on historical information indicating a lack of ownership or control of the firm by the economically disadvantaged owners at some time in the past, if the firm currently meets the ownership and control standards of this part.

(19) LBE/LSBE/EBE firms and firms seeking LBE/LSBE/EBE certification shall cooperate fully with the director's requests. Failure or refusal to provide such information is a ground for a denial or removal of certification.

(20) An eligible LBE/ LSBE/EBE firm must be owned by individuals who are economically disadvantaged. Except as provided in this paragraph, a firm that is not owned by such individuals, but instead is owned by another firm-even an LBE/LSBE/EBE firm-cannot be an eligible LBE/ LSBE/EBE.

a. If the economically disadvantaged individuals own and control a firm through a parent or holding company, established for tax, capitalization or other purposes consistent with industry practice, and the parent or holding company in turn owns and controls an operating subsidiary, the director may certify the subsidiary if it otherwise meets all requirements of this section. In this situation, the individual owners and controllers of the parent or holding company are deemed to control the subsidiary through the parent or holding company.

b. The director may certify such a subsidiary only if there is cumulatively 51 percent ownership of the subsidiary by the economically disadvantaged individuals. The following examples illustrate how this cumulative ownership provision works:

Example 1: Economically disadvantaged individuals own 100 percent of a holding company, which has a wholly-owned subsidiary. The subsidiary may be certified, if it meets all other requirements.

Example 2: Economically disadvantaged individuals own 100 percent of the holding company, which owns 51 percent of a subsidiary. The subsidiary may be certified, if all other requirements are met.

Example 3: Economically disadvantaged individuals own 80 percent of the holding company, which in turn owns 70 percent of a subsidiary. In this case, the cumulative ownership of the subsidiary by economically disadvantaged individuals is 56 percent (80 percent of the 70 percent). This is more than 51 percent, so the director may certify the subsidiary, if all other requirements are met.

Example 4: Same as example 2 or 3, but someone other than economically disadvantaged owners of the parent or holding company controls the subsidiary. Even though the subsidiary is owned by economically disadvantaged individuals, through the holding or parent company, the director cannot certify it because it fails to meet control requirements.

Example 5: Economically disadvantaged individuals own 60 percent of the holding company, which in turn owns 51 percent of a subsidiary. In this case, the cumulative ownership of the subsidiary by economically disadvantaged individuals is about 31 percent. This is less than 51 percent, so the director cannot certify the subsidiary.

Example 6: The holding company, in addition to the subsidiary seeking certification, owns several other companies. The combined gross receipts of the holding companies and its subsidiaries are greater than the size standard for the subsidiary seeking certification and/or the gross receipts cap. Under the rules concerning affiliation, the subsidiary fails to meet the size standard and cannot be certified.

(21) Recognition of a business as a separate entity for tax or corporate purposes is not necessarily sufficient to demonstrate that a firm is an independent business, owned and controlled by economically disadvantaged individuals.

(l) The director is authorized to require LBE/LSBE/EBE firms to submit yearly updates of information including, but not limited to, current licenses and federal, state and local tax returns and schedules (business and personal), and all other forms that are required to be included with or attached to the return at the time of filing. An LBE/LSBE/EBE shall remain certified as an LBE/LSBE/EBE as long as the firm continues to meet the requirements for certification as an LBE/LSBE/EBE and the firm files timely yearly updates.

(m) Once certified, an LBE/LSBE/EBE must notify the department in writing within 30 calendar days of any change(s) in circumstances affecting the firm's ability to meet ownership, control, or size requirements or any material change(s) in the information provided in the certification application process. The statement must include supporting documentation describing in detail the nature of such changes. Change(s) in management responsibility among members of a limited liability company are also covered by this requirement. If the LBE/LSBE/EBE fails to make timely notification of such change(s), it will be deemed to have failed to cooperate and certification may be revoked.

(o) The director shall safeguard information that reasonably may be regarded as confidential business information from disclosure to unauthorized persons consistent with federal, state and local law.

(p) Appeals of denials or revocations of certification.

(1) If the city denies a request for LBE/ LSBE/EBE certification from a firm which is not currently certified by the city, then the firm shall be ineligible to reapply for LBE/ LSBE /EBE certification for six months from the later of the date of the denial of certification or the final date of any decision on an appeal.

(2) In circumstances where a firm has failed to submit required documentation, failed to demonstrate real and substantial presence, or exceeded business size standards, there will be no administrative re-consideration of a denial or revocation of LBE/LSBE/EBE certification.

(3) Upon the denial or revocation of certification as an LBE/LSBE/EBE or joint venture by the department, the director shall notify the affected party in writing setting forth the reason(s) for the revocation of certification. Except as provided in (2) of this subsection, any firm who has had certification as an LBE/ LSBE/EBE or joint venture revoked or denied by the department may appeal the decision by filing a written notice of appeal as designated by the director within 10 business days of receipt of the notice of the revocation of certification. The procedures applicable to any appeal shall be as follows:

a. The written notice of appeal must state the reason(s) for the appeal and include all supporting documentation to be considered for the appeal. The information or documentation submitted is limited to the issue(s) raised in the written notice of appeal. Additional documentation or information may be considered for the appeal depending on the reasons for which the documentation was not submitted during the application process. The written notice must specify whether the firm wishes to appeal in writing or appear personally for a hearing and if they intend to be accompanied by counsel.

b. Within ten business days of receipt of the notice of appeal from the aggrieved party, the director shall forward the notice to the appeals board.

c. Within ten business days from the date of receipt of the notice from the director, the appeals board shall set a hearing date. The chairperson of the appeals board shall notify all parties in writing. Such notice shall set forth with particularity the charges filed by the aggrieved business and shall include the hearing date, time, and place.

d. At the hearing, all parties shall be provided a fair and impartial hearing and shall be allowed to make a presentation concerning the determination of noncompliance with the requirements of this article or the revocation of certification as an LBE/LSBE/EBE or joint venture. Legal counsel may accompany the firm during the hearing, speak on behalf of the firm, respond to questions, and otherwise make a presentation. Each owner will be provided time by the appeals board to state their case and address the board. Reasonable accommodations will be made for those with disabilities and/or limited language proficiency. For the appeal, the burden of proof rests on the LBE/LSBE/EBE or joint venture to show that the denial or revocation of certification was improper.

e. The appeals board shall, within 10 business days of the hearing or within 10 days of the deadline set by the appeals board for the submission of any additional documentation, if applicable, make a written decision on the appeal, which decision shall affirm, alter, or reverse the denial or revocation of certification by the department. Written notice of the decision shall be sent to all parties setting forth the reasons for the decision.

f. If the hearing officer finds for the aggrieved party, as appropriate, the business shall be reinstated as an LBE/LSBE/EBE or joint venture and added to the certification database maintained by the department. The decision of the hearing officer shall be binding on all parties, subject to the right of appeal as provided by law.

g. The firm that receives a decision from the hearing officer upholding the denial or revocation of certification is ineligible to reapply for LBE/LSBE/EBE certification for one year from the later of the date of the denial or revocation of certification, or the final date of any court decision.

(q) The city manager is authorized to revoke LBE/LSBE/EBE certification for cause. The certification of a person who has been debarred by the city in a debarment proceeding shall be automatically terminated or modified in a manner provided by the debarment ordinance. No individual, corporation, partnership, limited liability company or any other business entity whatsoever shall be certified as an LBE/LSBE/EBE if the economically disadvantaged individuals whose ownership interest would serve as the basis for obtaining certification, or who would control the entity seeking certification, presently owns or previously owned a majority interest in or controlled an LBE/LSBE/EBE whose certification has been revoked for cause within the five year period immediately preceding the submittal of the certification application. No individual, corporation, partnership, limited liability company or any other business entity whatsoever shall be certified as an LBE/LSBE/EBE if the economically disadvantaged individuals whose ownership interest would serve as the basis for obtaining certification, or who would control the entity seeking certification, presently owns or previously owned a majority interest in or controlled an LBE/LSBE/EBE whose certification has been suspended for cause, provided however that this restriction shall last no longer than the term of the suspension.

(r) LBE/LSBE program graduation.

(1) If an LBE/LSBE has been certified by the city in more than one North American Industry Classification System (NAICS) code or has an affiliate which has been certified by the city in a NAICS code other than that of the LBE/LSBE, then the annual receipt level used as the graduation criterion for such LBE/LSBE shall apply separately to each NAICS code for which the LSBE/LSBE and its affiliate have been certified subject to the business size standards in this division. Such an LBE/LSBE and any affiliate that has exceeded the graduation criteria in one NAICS code shall be deemed to be graduated from the LBE/LSBE contracting program as to that major groupand may continue to be certified in another NAICS code having a higher monetary graduation level but shall no longer be considered eligible to be or remain certified in the NAICS code with the lower size standard. An LBE/LSBE that has exceeded the graduation criteria for the largest NAICS code applicable to its activities shall be deemed to be graduated from the LBE/LSBE program for all purposes.

(2) The department shall send a graduation determination in writing which shall serve to notify the LBE/LSBE that it has graduated from the LBE/LSBE program. The notice of the graduation determination letter shall trigger a three-year graduation period. During the graduation period, an LBE/LSBE may bid and perform work to the same extent it was able to do so before graduation, and its utilization may be applied towards satisfaction of contract goals, if any, to the extent it is performing a commercially useful function corresponding to a NAICS code in which it was certified prior to graduation.

(3) The graduation period shall expire three years from the date of notice of the graduation determination. Any work bid by the graduated LBE/LSBE after expiration of the graduation period shall not be applied towards satisfaction of contract goals, if any. Any work performed by the graduated LBE/LSBE after expiration of the graduation period shall not be applied towards satisfaction of contract goals, if any, unless the work was commenced or is scheduled to commence pursuant to solicitation made prior to the expiration of the graduation period.

(4) During the graduation period, the LBE/LSBE shall comply with the requirements of this article to the same extent it was required to comply prior to graduation. A failure to do so may result in the reduction or elimination of the graduation period.

Sec. 3-462. - Reserved.

Sec. 3-463. - Duties and authority of director.

(a) The director is hereby authorized to establish rules and regulations to implement this division, such rules and regulations shall be submitted to the city council for its approval and shall be in writing and published.

(b) Notwithstanding any other section to the contrary, the director is hereby authorized to establish rules and regulations to implement the city's LBE/LSBE program requirements into contracts that utilize alternative construction delivery methods pursuant to chapter 3 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE>, Code of Ordinances, or other alternative procurement or contracting methods if the contract would be subject to LBE/LSBE goals under this division.

(c) The director shall, in addition to any other duties specified herein:

(1) Administer and enforce this article to ensure that LBE/LSBE/EBEs have equal opportunity to participate in city contracts and subcontracts and work with all city department directors and agency heads to implement the city's LBE/LSBE program.

(2) Coordinate the establishment of LBE/LSBE/EBE methodologies with all city departments and incentive agencies including establishment of goals as may be appropriate to remedy underutilization of LBE/LSBE/EBEs.

(3) Update the LBE/LSBE/EBE/DBE/SBE Kansas City MO Online Directory available to all bidders, proposers, the general public, city departments, and incentive agencies no less frequently than every three months.

(4) Assist city departments, incentive agencies, bidders, proposers, contractors, and developers in finding qualified LBE/LSBE/EBEs to participate on contracts.

(5) Identify appropriate participation opportunities for qualified LBE/LSBE/EBEs in contracts.

(6) Publish an annual report for the city's fiscal year which states for each city department and agency:

a. The number of contracts awarded and the total contract dollars awarded pursuant to such contracts; and

b. The number of prime contracts awarded to LBE/LSBE/EBEs and the total dollars awarded and paid pursuant to such contracts; and

c. The number of subcontracts awarded to LBE/LSBE/EBEs as and the total contract dollars awarded and paid pursuant to such contracts; and

d. A summary of total waiver requests submitted that are granted or denied and the reasons for the grant or denial; and

e. The number of LBE/LSBE/EBE firms certifiedby the department

(7) Provide a compliance report to the city manager within 30 days after the end of each quarter which shall include:

a. The total number of contracts awarded and the total contract dollar amount awarded pursuant to such contracts; and

b. The number of contracts awarded to qualified LBE/LSBE/EBEs and the total contract dollar amount awarded and paid pursuant to such contracts; and

c. An evaluation of the city's progress toward meeting LBE/LSBE/EBE utilization plans and any actions they intend to take to address any shortfall in meeting the goals established in such plans; and

d. Any other information as may be required by the city manager.

(8) Provide monthly compliance reports to the applicable incentive agency for contracts entered into in connection with sections 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(b) and 3-425 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-425APLETAINFITAABEN>(c) updating the incentive agency as to the project developer's compliance with the LBE/LSBE goals and work with the applicable incentive agency to assist developers who are not compliant. Failure of the director to furnish these reports does not absolve incentive agency or developer from complying with the processes outlined by agreement with the incentive agency.

(9) Provide the city council a report outlining the effects of any revisions to this division within 18 months of their effective date. The purpose of this report is to ensure that such revisions promote increased opportunities for small business enterprise participation on contracts.

(10) Develop and maintain relationships with organizations representing contractors, including small business organizations, and solicit their support for the city's program.

(11) Furnish staff assistance to the board established in this division. This shall include but not be limited to providing to the board within 30 days following the end of each quarter interim reports containing the information described in subsection (6) and such other reports and information as the board, from time to time, may request.

(12) Implement any federal or state economically (?) disadvantaged business enterprise program required by law or federal or state contract.

Sec. 3-464. - Reserved.

Sec. 3-465. - Penalties for noncompliance; no retaliation.

(a) Whenever a bidder, proposer or contractor has submitted a bid that is not in material compliance with the requirements of this Division, the contracting department or agency shall reject the bid or proposal unless the goals are waived pursuant to section 3-437 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-437WAMBWBGO>.

(b) The director is authorized to recommend suspension, revocation, sanction, or debarment of any contract or contractor, as appropriate, for providing false or misleading information to the department, purposefully omitting or refusing to provide information requested by the department, or otherwise violating any provision of this division.

(c) The director is authorized to suspend or revoke the certification of an LBE/LSBE/EBE or joint venture, as appropriate, for providing false or misleading information to the department, purposefully omitting or refusing to provide information requested by the department, or otherwise violating any provision of this division, without having to make a recommendation to any other person or department.

(d) Sanctions shall be imposed in conformity with any applicable federal, state, or local laws. In determining whether to suspend or revoke the certification of an LBE/LSBE/EBE or joint venture, the director shall consider the following factors:

(1) Whether the failure to comply with applicable requirements involved intentional conduct or, alternatively, may be reasonably concluded to have resulted from a misunderstanding on the part of the LBE/LSBE/EBE or joint venture; and

(2) The number of specific incidents of failure by the LBE/LSBE/EBE or joint venture to comply; and

(3) Whether the LBE/LSBE/EBE or joint venture has been previously suspended; and

(4) Whether the LBE/LSBE/EBE or joint venture has failed or refused to provide the director with any information requested by the director or required to be submitted to the director pursuant to law or these procedures; and

(5) Whether the LBE/LSBE/EBE or joint venture has materially misrepresented any applicable facts in any filing or communication to the director; and

(6) Whether any subsequent restructuring of the subject business or other action has been undertaken to cure the deficiencies in meeting applicable requirements.

(e) Suspensions may be for any length of time not to exceed two years. Suspensions in excess of one year and revocations of certification shall be reserved for cases involving intentional or fraudulent misrepresentation or concealment of material facts, multiple acts in contravention of applicable requirements, cases where the LBE/LSBE/EBE or joint venture has been previously suspended, or other similarly egregious conduct.

(f) The making of any false or misleading statements shall be grounds for application of any applicable criminal and/or civil penalties in addition to the grounds for sanction.

(g) No person shall intimidate, threaten, coerce, or discriminate against any individual or business for the purpose of interfering with the implementation or enforcement of any provision of this article because such individual or business filed a complaint or cooperated in the investigation of a complaint.

Sec. 3-466. - Reserved.

Sec. 3-467. - Mediation of disputes.

(a) Any claim or dispute between a contractor, subcontractor, or supplier that remains unresolved after 30 calendar days shall be subject to mandatory mediation conducted in accordance with the rules of the Uniform Mediation Act. The mediation shall be conducted by an impartial mediator appointed by the department, who shall render his or her services with full regard for each party's interests. If the subject matters of the dispute or the parties to the dispute are such that the assigned mediator would have a conflict of interest or personal interest in the outcome of the mediation, he or she shall immediately be recused and another mediator shall be appointed.

(b) The procedures for the mediation shall be established by the appointed mediator in conjunction with the parties, who shall attempt to resolve their dispute in good faith.

(c) Except to the extent disclosure is otherwise required by law, the mediation and the terms of any settlement reached by the parties shall remain confidential.

(d) The mediation provided for by this section shall be a condition precedent to the initiation or pursuit of any other lawful means of resolving the dispute, including arbitration and other legal proceedings.

(e) If a third-party mediation service is requested by either party, the requesting party shall be responsible for the expense of the mediator’s fee. Agreements reached in mediation shall be enforceable as settlement agreements in any court having jurisdiction thereof.

(f) Every contractor entering into a contract as defined by section 3-421 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV2MIWOBUENMWB_S3-421DE>(a)(13) shall incorporate the provisions of this section into each related agreement with a subcontractor or supplier, but the failure to do so shall not alleviate the obligation of the parties to utilize the mediation provided for herein as a condition precedent to the initiation or pursuit of any other lawful means of resolving the dispute, including arbitration and other legal proceedings. The requirements of this section shall be deemed incorporated into each related agreement by operation of law and shall supplant any term or provision, written or oral, to the contrary.

(g) Notwithstanding the foregoing, for incentive projects any arbitration or mediation between the prime contractor or developer and the LBE/LSBE/EBE firm shall be in accordance with the arbitration or mediation provisions, as applicable, contained in the contract between the prime contractor or developer and the LBE/LSBE/EBE firm. The provision shall not serve to inhibit the director's ability to assist the prime contractor or developer and the LBE/LSBE/EBE firm in reaching a compromise in matters of dispute.

Sec. 3-468. - Reserved.

Sec. 3-469. - Severability.

The provisions of this division are severable. If any provision or its application to any person or circumstance is held invalid by a court of competent jurisdiction, the remaining provisions, including the application of such provisions to other persons or circumstances, shall continue in full force and effect.

Sec. 3-605. - Applicability of EBE program to eligible contract solicitations.

(a) Prior to issuing any invitation for bid or request for proposal for any eligible contract, the department director or agency head shall confer with the director for purposes of determining whether the eligible contract is one whose solicitation shall be limited to EBEs or, otherwise required, as provided in section 3-607 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV4SMLOBUENSL_S3-607SLIN>.

(b) The director shall give consideration to the input of the department director or agency head and shall make the final determination as to which EBE incentive, if any, shall be applicable to the particular solicitation. Any invitation for bid or request for proposal shall be solicited in compliance with the city's Code of Ordinances or the procurement policies and procedures of the relevant agency and shall clearly and conspicuously be delineated with the applicable provision, which shall read substantially as follows:

[Applicable to Construction Contracts, Construction Supply Contracts and Professional Services or Supplies Contracts]

This Invitation for Bid/Request for Proposal is limited to those entities that are certified by the City of Kansas City, Missouri as an Emerging Business Enterprise (EBE) by the date on which the bid/proposal/qualification is due. Any bid/proposal/qualification received from any entity not certified as an EBE on the due date shall be rejected and will not be considered.

(c) No person shall be entitled to participate in any solicitation as an EBE or receive the benefit of any incentive reserved for an EBE unless the person has received EBE certification by the date on which the bid or proposal is due.

(d) In the event any person that is not certified as an EBE submits a bid or proposal in response to a solicitation that has been limited to EBEs and did not receive its certification within the time periods provided for herein, the bid or proposal shall be summarily rejected as non-responsive.

Sec. 3-607. - EBE incentives.

(a) The director is authorized to encourage the utilization of EBEs on any eligible contract except as otherwise limited in section 3-609 <https://library.municode.com/mo/kansas_city/codes/code_of_ordinances?nodeId=PTIICOOR_CH3COLE_ARTIVCOPRRE_DIV4SMLOBUENSL_S3-609LIUSSLIN> through the utilization of the following EBE incentives:

(1) Limiting solicitation to EBEs. The director is authorized to limit an invitation for bid or request for proposal to EBEs, and shall consider the following factors in making a determination:

a. The estimated or potential dollar amount of the contract; and

b. The scopes of work to be performed; and

c. The availability of EBEs certified in the primary scope of work to be performed; and

d. The city's utilization of EBEs to date.

(2) Bid incentives. The director is authorized to allow a bid incentive to EBEs not to exceed five percent on contracts based on price, and shall consider the following factors in making a determination as to whether to allow the incentive and establishing the amount thereof:

a. The estimated or potential dollar amount of the contract; and

b. The primary scope of work to be performed; and

c. The city's utilization of EBEs to date; and

d. The amount of the bid incentive awarded on past contracts of a similar nature; and

e. The amount of the bid incentive reasonably anticipated as being needed for purposes of enabling EBEs to effectively compete for the contract; and

f. The ability of the city department or agency to fund any increased cost that may reasonably be expected to arise as a result of the application of a bid incentive.

Any bid eligible for the bid incentive shall be adjusted for evaluation purposes by reducing the bid by the percentage of the incentive. This adjustment shall be used solely for the purpose of establishing the apparent low bidder. The actual value of the contract, if awarded to the EBE shall be the amount of the actual bid submitted by the EBE.

(3) Required solicitation. Where the director determines that the contract is not suitable for solicitation limited to EBEs, the department or agency must include any available EBEs in the solicitation.

(b) Any contract awarded to an EBE pursuant to the EBE program shall contain provisions providing for the following, notwithstanding the application of any other EBE incentive as provided in subsection (a) of this section:

(1) Pre-payment of up to ten (10) percent of the contract amount to be tendered upon city's issuance of notice to proceed; and

(2) The elimination of any retainage requirement, if applicable; and

(3) Payment every two weeks provided the EBE has requested payment in the manner required by its contract with the city and is otherwise entitled to receive payment thereunder.

(c) Exemptions. Any exemptions to the EBE incentives or requirements may be granted for certain circumstances, including, but not limited to the following:

(1) Contracts whose primary scope has no current availability of certified EBEs; or

(2) Contracts where solicitation has been waived; or

(3) Specialized contracts or cooperative agreements; or

(4) As determined by the director.

Sec. 3-609. - Limitations on use of EBE incentives.

(a) Notwithstanding anything contained within this division:

(1) No bid incentive shall be awarded to any EBE submitting a bid in response to any invitation for bids that has been expressly limited to EBEs.

(2) No solicitation shall be limited to EBEs unless the same has been clearly and conspicuously noted in the invitation for bid or request for proposal and no bid incentive shall be allowed for any EBE unless the same has been clearly and conspicuously noted in the invitation for bid.

(3) No solicitation shall be limited to EBEs unless there is a minimum of three eligible EBEs capable of performing the work and certified in the primary scope of work to be performed.

(4) No bid incentive shall be allowed on any construction contract or construction supply contract.

(5) No bid incentives shall be allowed on any other eligible contract unless there are fewer than three eligible EBEs capable of performing the work and certified in the primary scope of work to be performed.

(6) No contract shall be awarded to an EBE who, taking into consideration the applicability of any bid incentive, is not the lowest and best bidder or is not the best proposer.

(7) No contract shall be awarded to an EBE responding to any invitation for bid or request for proposal that has been limited to EBEs if it is in the city's or agency's best interest to reject all bids or proposals. In the event the city or agency elects to re-solicit the goods or services, the applicability of any provision of the EBE program to the re-solicitation shall be determined anew.

(8) No solicitation or contract shall be subject to any provision of the EBE program if doing so would cause the city or agency to violate the requirements of any grant or otherwise violate any provision of state or federal law.

Sec. 3-611. - Emerging business enterprise development program.

(a) The director shall establish a small local business enterprise development program designed to assist EBEs in identifying those organizations that have identified themselves as being able and willing to provide financial and other assistance to EBEs including, but not limited to, bonding; financing; technical and managerial training and assistance; and referral, networking, and outreach activities. The director may provide small business development services through the department but shall not provide financial assistance to any EBE or take any action that would purport to obligate the city to guarantee or repay any debt incurred by any EBE.

(b) The emerging business enterprise development program shall include, but shall not be limited to, facilitation of the following services:

(1) Surety bond pre-qualification program through a third-party source; and

(2) Working capital loans through a third-party source; and

(3) On-site construction management services; and

(4) Technical and managerial training and assistance; and

(5) Referral, networking, and outreach activities.

EBE- WSDEPS Certification- previously SLBE-WSDEPS

This expansion of the SLBE program was approved as an AR (130371).

The program includes Water Services Design, Engineering & Professional Services contracts. The original requirements mirrored the requirements for SLBE certification with the following differences:

1. The firm must be certified to provide professional services including engineering, architectural, landscape architectural services.

2. Contract values under $759,000. Recommend increasing this to $750,000.

3. Average Annual Gross Receipts under $7 M. Increase? Increase suggested to $9M to not create a discrepancy with SBA size standards for 541320 (Landscape Architectural Services)

4. WSD and CREO worked together to select contracts for the program.

If contract exceeds $750,000, the Dept. is required to submit for goals.

end

______________________________________________________

Approved as to form:

______________________________

Julian Langenkamp

Associate City Attorney

Legislation Details