Increasing Diversity in Commonwealth Contracting: A Guide for Commonwealth Agencies on Contracting with Minority and Women Business Enterprises

Increasing Diversity in Commonwealth Contracting: A Guide for Commonwealth Agencies on Contracting with Minority and Women Business Enterprises

TABLE OF CONTENTS INTRODUCTION 1 MBE/WBE PROGRAM RESPONSIBILITIES 2 Department of General Services 2 Bureau of Minority & Women Business Opportunities 2 Agency Staff 3 AGENCY ACTION STEPS 10 Construction IFB $50,000 or more 10 Services IFB $50,000 or more 10 Materials IFB 10 Material and Service RFPs, ITQs, and RFQs 10 Sole Source Procurements Construction or Services - $250,000 or more 11 Competitive Sealed Bidding and Sole Source Procurements Services 11 Competitive Sealed Bidding and Sole Source Procurements Construction 12 Notification of Contract Commitments 12 Contract Compliance Program 13 Exemptions 13 CONTRACT PROVISIONS 14 Required Clauses 14 Termination Provisions 14 Subcontracting Requirements 14 MBE/WBE UTILIZATION INFORMATION 16 Notice to Contractors 16 Notice to Subcontractors 17 ANNUAL MBE/WBE UTILIZATION REPORTS 18 DGS Annual Report to Legislature 18 Agency Annual Report to its Secretary, BMWBO and Commissions 18 Agency Annual Report to Other Agency Staff 19 DEFINITIONS 20 REFERENCES 24

INTRODUCTION This handbook sets forth best practices for commonwealth agencies to uniformly and consistently implement policies, programs and goals for contracting and subcontracting with Minority Business Enterprises (MBEs) and Women Business Enterprise (WBEs). Each agency under the Governor s jurisdiction has responsibility for ensuring and increasing MBE/WBE participation in the agency's contracting opportunities. Although agencies have historically encouraged the principle of Equal Opportunity, special efforts are needed to increase the level of participation by MBEs and WBEs in the commonwealth contracting process. Although the commonwealth has implemented a number of reforms to increase opportunities for MBEs and WBEs, agencies should strive for a climate that encourages MBE/WBE participation and one that eliminates barriers that impede MBE/WBE access to contracting opportunities. This handbook should be used in conjunction with agency procurement guidelines or manuals. If any policy, procedure, or guideline in this handbook conflicts with the Commonwealth Procurement Code or other procurement statute, the DGS Procurement Handbook, or any DGS regulation, the DGS Procurement Handbook and any DGS regulation shall prevail. The Commonwealth Procurement Code and DGS Procurement Handbook can be accessed at www.dgs.state.pa.us. This handbook is provided by the Office of Diversity Management pursuant to Executive Order 2008-6, which states that existing policies and practices of agencies under the Governor s jurisdiction shall comply with commonwealth-wide diversity objectives, and Executive Order 2004-6, which authorizes the formulation of policies and implementation of initiatives to increase participation by minority, women, and socially disadvantaged businesses in commonwealth contracts. p. 1

MBE/WBE PROGRAM RESPONSIBILITIES Department of General Services (DGS) The Department of General Services (DGS) formulates procurement policy, procedures, and guidelines for the procurement of supplies, services, and construction under the authority of the Commonwealth Procurement Code, 62 Pa.C.S. Sections 101 et seq. and disposal of supplies, services, and construction for agencies. Except as authorized by DGS or by law, DGS acts as the purchasing agency for all agencies for supplies, services, and construction. Independent agencies are authorized by the Commonwealth Procurement Code to act as their own purchasing agency for services. DGS participates in the management and maintenance of the Contractor Responsibility Program, which is designed to make sure that the commonwealth works with responsible contractors. DGS shall maintain a current list of suspended and debarred commonwealth contractors and/or subcontractors and distribute this information to agencies upon request. The MBE/WBE program ensures nondiscrimination in the awarding of contracts. The Contract Compliance Program ensures nondiscrimination in the execution of awarded contracts. Bureau of Minority & Women Business Opportunities (BMWBO) The Bureau of Minority & Women Business Opportunities (BMWBO) is the office within DGS that provides technical assistance to MBEs and WBEs regarding the commonwealth's contracting process. BMWBO carries out its mission through three organizational divisions: Certification Division By becoming certified, minority and women businesses can more readily identify and benefit from opportunities available to small businesses through state contracting. The certification application process assures only qualified companies are approved. Entities can be certified as either an MBE or a WBE. The BMWBO Certification Division generally completes a full review of certification applications in 30-35 days. Business Development Division The Business Development Division promotes the successful involvement of MBEs and WBEs in state contracting through education and information. Free training programs, consulting, and resource materials are made available to certified companies, the business community, and organizations assisting small businesses. p. 2

The division provides guidance to all small business owners, especially minority and women owned businesses, to increase their opportunities to compete successfully in the state contracting process. This Division conducts numerous workshops throughout the commonwealth every year. Supplier Diversity Division The Supplier Diversity Division reviews bid submissions to ensure that they comply with commonwealth programs to promote opportunities for MBEs and WBEs. The division determines the responsiveness of bidders and scores bid submissions from disadvantaged businesses. BMWBO also oversees the Contract Compliance Program within agencies under the Governor s jurisdiction. Pursuant to 4 Pa Code 1.511-1.513, commonwealth agencies shall establish contract compliance programs to ensure: The commonwealth does not discriminate in the award of contracts and grants Those who are awarded commonwealth contracts and grants do not discriminate in their award of subcontracts and supply contracts for the performance under commonwealth contracts. Those who are awarded commonwealth contracts and grants do not discriminate in the hiring and treatment of their employees. A Contract Compliance Dispute Advisory Committee meets periodically to review agency concerns and issues. BMWBO welcomes participation by other commonwealth agencies. Agency Staff Secretary The Secretary of each agency has primary responsibility for ensuring that all procurement and contracting actions comply with the Commonwealth Procurement Code and the DGS Procurement Handbook. Additionally, the Secretary is responsible for: Ensuring that the agency's commitment to the MBE/WBE program is clearly understood and appropriately implemented and enforced by all employees. Designating a responsible official to supervise the agency MBE/WBE program and ensure compliance within the agency. Recommending sanctions to the Secretary of General Services, as may be appropriate, against businesses that fail to comply with the policies of the commonwealth s MBE/WBE program. p. 3

Deputy Secretary for Administration The Deputy Secretary for Administration is responsible for the overall implementation of the agency s MBE/WBE program and will be held accountable for ensuring agency compliance with applicable federal, state, and departmental regulations regarding contracting with MBEs and WBEs. Other Agency Deputy Secretaries All deputy secretaries are responsible for ensuring that the bureaus and offices under their jurisdiction work individually, as well as with BMWBO, to maximize MBE/WBE participation in contracting activities. Evaluation Committee Chairperson The Evaluation Committee Chairperson is appointed by the agency and is responsible for: Submitting IFBs, RFPs, ITQs, and RFQs to BMWBO for review. If BMWBO deems it necessary, it will participate in proposal/quote evaluation and contract negotiation with the agency. Receiving and reviewing Form STD-168 (MBE/WBE Subcontractor and Supplier Solicitation & Commitment) and any supporting MBE/WBE documentation for contracts for services between $50,000 and $250,000 to determine the contractor s responsibility in regard to nondiscrimination. Forwarding a copy of Form STD-168 and any supporting MBE/WBE documentation for contracts for services over $250,000 to BMWBO, which will determine the contractor's responsibility in regard to nondiscrimination. The Disadvantaged Business and EZSB portion of all proposals (originals and best and final offers) and quotes regardless of the procurement amount shall be forwarded to BMWBO for review and scoring. Inviting BMWBO to participate in contract negotiations in an effort to increase MBE/WBE participation in the executed contract. Other responsibilities as dictated in any agency procurement guidelines or manuals. Equal Opportunity/Contract Compliance Officer The Equal Opportunity/Contract Compliance Officer is responsible for managing the duties related to the MBE/WBE Program and Contract Compliance Program. These responsibilities include: MBE/WBE Program Reporting MBE/WBE expenditures by contractors on a quarterly basis to the Secretary and Deputy Secretary for Administration and annually to BMWBO. p. 4

Monitoring contractor compliance and working with bureau supply designees to resolve contractor compliance issues. Unresponsiveness to compliance standards will result in the reporting of non-compliance to the Secretary, Deputy Secretary for Administration, Office of Chief Counsel and the DGS Contract Compliance Dispute Advisory Committee. Ensuring that staff responsible for the MBE/WBE program attend annual training on purchasing, procurement, and supplier diversity. Attending kick-off meetings, pre-proposal conferences and contract negotiations, as appropriate, in consultation with BMWBO. Providing guidance to small business owners, especially minority and women owned businesses to increase their opportunities to compete successfully in the state purchasing system. Actively participating in supplier diversity workshops, trade fairs and similar outreach events on behalf of the agency. Handling inquiries from agency contractors and subcontractors. Contract Compliance Program Ensuring that staff responsible for contract compliance attend annual training on the implementation of the Contract Compliance Program in accordance with the DGS Contract Compliance Program. Receiving and analyzing Contract Compliance Initial Data forms (Form STD- 21) in the DGS Contract Compliance Computerized Monitoring System for all agency non-construction contracts $50,000 and over and all construction contracts and grants $100,000 and over to determine work force parity. Conducting on-site and full document contract compliance audits of contractors as necessary. Submitting quarterly contract compliance reports and annual contract compliance plans to BMWBO. Procurement Office The agency s procurement office is responsible for: MBE/WBE Program Working with BMWBO in the selection and award of contracts. p. 5

Furnishing to DGS and the Equal Opportunity/Contract Compliance Officer, upon request, all requested information or assistance relating to the MBE/WBE Program. Attending training offered on purchasing and procurement as it relates to MBE/WBE Program. The purchasing agency must also ensure that the contractor completes and returns form STD-21 within 10 business days. Contract Compliance Program Initiating Form STD-21 through the DGS Contract Compliance Computerized Monitoring System on qualifying awards. Completing contract compliance initiator training. Office of Chief Counsel The agency s Office of Chief Counsel is responsible for reviewing IFBs, RFPs, ITQs, and RFQs and participating in proposal/quote evaluation and contract negotiation along with the Procurement Office, bureau supply designees, and BMWBO. The Office of Chief Counsel will: Review and approve, for form and legality, all contracts entered into by the agency. Such review shall go to the statutory or other legal authority of the agency or official to enter into the contract, the legality of contract provisions, and the form and manner of its execution. Identify contracts requiring review by the Office of General Counsel and the Office of Attorney General and electronically route those contracts to those offices for review. Advise the contracting officer and agency in all legal matters surrounding contractor performance. Ensure that the Nondiscrimination/Sexual Harassment Clause is included in every contract. Contracting Officer The contracting officer will: Submit copies of executed contracts to the Procurement Office and the Equal Opportunity/Contract Compliance Officer for processing and monitoring. Notify the Office of Chief Counsel and BMWBO regarding the selected offeror and provide a copy of the disadvantaged business commitments made in the contract, once the contract has been executed. The information shall be p. 6

forwarded to BMWBO within 10 days of sending the fully executed contract to the selected offeror. Submit, in a timely manner, any proposed change to the contractual disadvantaged business participation commitments for review and comment to the Office of Chief Counsel and BMWBO, prior to formal approval by the BMWBO Director. Bureau/Office Directors Bureau/office directors are to be knowledgeable of their contracting needs and responsible for communicating the agency s commitment to the Minority and Women Business Enterprise Program to their staff. They will consult with the procurement office, Office of Chief Counsel, and their bureau supply designees to assure that all competitive contract opportunities issued by their bureau/office seek to maximize participation by MBEs and WBEs. Bureau Supply Designees Bureau supply designees are responsible for ensuring that all competitive contract opportunities issued by their bureau/office seek to maximize participation by MBEs and WBEs. The bureau supply designees will: Give consideration, when possible and cost effective, to contractors offering to utilize MBEs and WBEs in the selection and award of contracts. Notify the agency s procurement office and Equal Opportunity/Contract Compliance Office before a solicitation is issued. Initiate the MBE/WBE Subcontractor and Supplier Solicitation & Commitment (Form STD-168) for all services procurements over $50,000. Work with the Office of Chief Counsel and BMWBO to review RFPs, ITQs, and RFQs and to participate in proposal/quote evaluation and contract negotiation. Actively participate in supplier diversity workshops, trade fairs and similar events on behalf of the agency. Serve as the contact person for the contract. The contact person is the individual who manages the contract and monitors the contractor's performance and reports performance to the bureau/office director, Deputy Secretary for Administration, procurement office, and Equal Opportunity/Contract Compliance Officer. Manage the contract from time of execution until the supply and/or services have been delivered and accepted or until final acceptance of the work effort has been accomplished and the contract closed with final payment to the contractor, in accordance with the DGS Procurement Handbook. p. 7

Prepare a final evaluation of the contractor s performance and forward it to the Office of Chief Counsel for inclusion with the agency s record copy of the contract. A copy of the final evaluation should also be forwarded to the procurement office and the Equal Opportunity/Contract Compliance Office. Other Responsibilities In addition to the responsibilities of agency staff described above, agencies will also conduct the following activities to ensure MBE/WBE participation for purchases, contracts, and subcontracts: Monitor MBE/WBE utilization on a quarterly basis and update the Secretary and Deputy Secretary for Administration, as necessary. Report MBE/WBE participation on an annual basis to the Secretary, Deputy Secretary for Administration, Office of Chief Counsel, Procurement Office, and Bureau Supply Designees. Report MBE/WBE utilization on an annual basis to BMWBO and the Governor s Advisory Commissions. Adhere to commonwealth and agency contract compliance policies. Communicate MBE/WBE program and contract compliance training opportunities to agency staff. Provide MBE/WBE Program training to agency Bureau Supply Designees annually. Whenever possible, agency staff will also conduct the following activities: Ensure Equal Opportunity/Contract Compliance Office attendance at conferences focused on minority and woman-owned business opportunity and development. Ensure Equal Opportunity/Contract Compliance Office attendance at supplier diversity conferences. Become a member of a minority purchasing council or minority contractor association. Maintain a subscription to at least one publication focused on the development of and issues concerning minority and women business enterprises. Provide minority and women referral lists to current and potential agency contractors upon request. p. 8

Participate in outreach efforts to promote attitude of MBE/WBE inclusion in state contracts. Encourage mentoring and the cultivation of MBE/WBE relationships with prime contractors. p. 9

AGENCY ACTION STEPS As noted in the DGS Procurement Handbook, the purchasing agency will give BMWBO the opportunity to participate and provide input throughout all procurement processes, including reviewing IFBs, RFPs, Invitations to Qualify (ITQs), and Requests for Quotation (RFQs); responding to questions concerning MBE/WBE utilization; evaluating and scoring disadvantaged business participation submissions and negotiating contracts. Construction IFB - $50,000 or more The purchasing agency will notify BMWBO electronically of IFBs that the agency intends to issue for construction, where the contract is estimated to exceed $50,000. BMWBO will provide the agency with minimum participation levels for MBEs and WBEs. For all IFBs for services where the contract amount is estimated to exceed $50,000, the purchasing agency will require bidders to complete and submit Form GSMWBE- 16 (MBE/WBE Subcontractor and Supplier Certification, Solicitation and Commitment) and any supporting MBE/WBE documentation with their bids. The purchasing agency will forward these documents to BMWBO, which will determine the contractor's responsibility regarding nondiscrimination and make recommendations to the purchasing agency regarding bidders responsiveness to the requirements of Form GSMWBE-16. Services IFB - $50,000 or more For all service IFBs where the contract is estimated to exceed $50,000, the purchasing agency will also require bidders to complete and submit Form STD-168 (MBE/WBE Subcontractor and Supplier Solicitation and Commitment) and any supporting MBE/WBE documentation with their bids. If the contract is less than $250,000, the purchasing agency will determine the contractor's responsibility in regard to nondiscrimination and the bidders responsiveness to the requirements of Form STD-168. If the contract is greater than $250,000, the purchasing agency will submit copies of the completed Form STD-168 and any supporting MBE/WBE documentation to BMWBO, which will determine the contractor's responsibility in regard to nondiscrimination and make recommendations to the purchasing agency in regard to bidders responsiveness to the requirements of Form STD-168. Materials IFB Form STD-168 is not applicable. Material and Service RFPs, ITQs, and RFQs The purchasing agency shall invite BMWBO to participate in the kick-off meeting, development of the RFP, ITQ or RFQ for materials and services, the pre-proposal conference, the drafting of the responses to offeror questions, and in contract negotiations in an effort to increase disadvantaged business participation. The Disadvantaged Business Participation submittal and the EZSB portion of all proposals (originals and best and final offers) and quotes regardless of the procurement amount shall be forwarded to BMWBO for review and scoring. Upon p. 10

the request of BMWBO, the agency will brief BMWBO on the technical aspects of the RFP. The entire proposal, including the cost submittal, shall be made available to BMWBO upon request. Sole Source Procurements Construction or Services- $250,000 or more Prior to awarding sole source contracts for construction or services which exceed $250,000, the purchasing agency must forward Form GSMWBE-16 (for construction) or Form STD-168 (for services) and any supporting MBE/WBE documentation to BMWBO. BMWBO will determine the sole source contractor's responsibility in regard to nondiscrimination for contracts, renewals, and amendments and request the purchasing agency to obtain additional information from the supplier in regard to disadvantaged business participation prior to award of the contract. Competitive Sealed Bidding and Sole Source Procurements - Services Purchasing agencies shall include a determination of contractor responsibility in regard to nondiscrimination with respect to the contractor's proposed use of MBEs and WBEs in the performance of the contract. $50,000 or more If the award amount is estimated to exceed $50,000 (including any renewal options), the IFB must include Special Provisions for IFBs, Certified Minority and Women Business Utilization, and Form STD-168 (MBE/WBE Contact/Solicitation and Commitment Statement). These forms may be accessed via the following hyperlink: "STD-168, MBE/WBE Subcontractor and Supplier Solicitation and Commitment Form". Inclusion of the form in the IFB is not required for contracts with an estimated value of $50,000 or less. If the total sole source procurement is estimated to be more than $50,000 annually for single or multiple year awards, the Special Provisions for IFBs, Certified Minority and Women Business Utilization, and Form STD-168 are to be included in the contract. $250,000 or more Before processing a contract in the amount exceeding $250,000 (or such higher amount as BMWBO may establish for a particular agency), including those amendments and change orders that directly affect MBE/WBE participation, the purchasing agency is required to forward the bidder-completed Form STD-168 to BMWBO, which will determine the contractor's responsibility in regard to nondiscrimination unless exempted from the BMWBO Program requirements. Contracts of $250,000 or less do not require BMWBO review. Responsibility If BMWBO determines the contractor is nonresponsive and/or not responsible, and the agency decides to make an award, the agency must consult with its Office of Chief Counsel, and its agency head or appropriate Deputy Secretary and fully justify, in writing, its reasons for proceeding with award. The agency must forward a copy of this justification to BMWBO. p. 11

Competitive Sealed Bidding and Sole Source Procurements - Construction Purchasing agencies shall include a determination of contractor responsibility in regard to nondiscrimination with respect to the contractor's proposed use of MBEs and WBEs in the performance of the contract. $50,000 or more If the award amount is estimated to exceed $50,000 (including all renewal options), the IFB must include Form GSMWBE-16 (MBE/WBE Subcontractor and Supplier Certification Solicitation and Commitment Form). Inclusion of this form in the IFB is not required for contracts with an estimated value of $50,000 or less. BMWBO shall establish minimum participation levels for MBEs/WBEs. Form GSMWBE-16 (MBE/WBE Subcontractor and Supplier Certification Solicitation and Commitment Form) is to be included in contracts with sole source contractors when the total procurement is estimated to be more than $50,000 annually for single or multiple year awards. The contractor must complete Form GSMWBE-16. Before processing a contract in an amount exceeding $50,000 (or such higher amount as BMWBO may establish for a particular agency), including those amendments and change orders that directly affect MBE/WBE participation, the purchasing agency is required to forward the bidder-completed Form GSMWBE- 16 to BMWBO which will determine the contractor's responsibility in regard to nondiscrimination unless exempted from the BMWBO Program requirements. Responsibility If BMWBO determines the contractor is nonresponsive and/or not responsible, and the agency decides to make an award, the agency must consult with its Office of Chief Counsel and its agency head or appropriate Deputy Secretary and fully justify, in writing, its reasons for proceeding with award. The agency must forward a copy of this justification to BMWBO. Notification of Contract Commitments Once the contract has been executed, the purchasing agency must notify BMWBO regarding the selected bidder/offeror and provide a copy of the disadvantaged business commitments made in the contract. The information shall be forwarded to BMWBO within 10 days of sending the fully executed contract to the selected bidder/offeror. The purchasing agency must, on a quarterly basis, submit to BMWBO the quarterly Disadvantaged Business and EZSB activity reports submitted by each offeror. The agency contracting officer must submit any proposed change to the contractual disadvantaged business participation commitments to BMWBO. Contract Compliance Program The Contract Compliance Program is enforced after an award is made and the vendor has been notified in writing of their award and term of contract dates. p. 12

Conditions that are monitored, checked and reported are: Use and hiring of a diverse work force during the time the contract is in force. It also ensures that a written sexual harassment policy is in force, with stated consequences if their workforce fails to follow those guidelines while at work. Additionally, this program applies to the subcontractor workforce, which works under the guidance and direction of a prime contract holder. The purchasing agency must ensure that all non-construction contracts, including service contracts and material contracts, $50,000 and above and all construction contractors that are awarded contracts $100,000 and above, receive Form STD-21 (Initial Contract Compliance Data). The purchasing agency (or in the case of a Department of General Services purchase order, the using agency) must also ensure that the contractor completes and returns the form within 10 days. The purpose of Form STD-21 is to assist in determining the company's compliance with the Nondiscrimination/Sexual Harassment clause contained in its contract. When the completed Form STD-21 is received from the contractor, the purchasing agency contract compliance officer shall review the form and enter the data into the Contract Compliance Computerized Monitoring System to determine workforce parity. Workforce parity is the equitable utilization of minorities and females in a state contractor's workforce, according to the local labor market availability. BMWBO shall monitor agencies' adherence to the program requirements. The Contract Compliance Program and the MBE/WBE Program have separate and different requirements since they monitor different aspects of non-discrimination. However, both work to guard against discrimination in government contracting. Exemptions The MBE/WBE Program requirements do not apply to the following: Contracts awarded to agencies for persons with disabilities pursuant to Act 57, 520. Grants and licenses. Pursuant to the Stimulus Executive Order 2009-2, BMWBO Program Requirements will now be extended to grants involving the expenditure of federal stimulus monies. Contracts with political subdivisions of the commonwealth including county and municipal governments. Contracts awarded to licensed medical professionals when subcontracting opportunities are not available and where the work is performed at commonwealth facilities. Situations where application would jeopardize the receipt of federal funds. p. 13

CONTRACT PROVISIONS Required Clauses Nondiscrimination/Sexual Harassment Clause Every agency contract shall contain the DGS Nondiscrimination/Sexual Harassment clause (Nondiscrimination & Sexual Harassment Clause), which bars discrimination in employment because of gender, race, religious creed, or color. The DGS Nondiscrimination/Sexual Harassment clause includes the Act 57 required contract provisions prohibiting discrimination found at 62 Pa.C.S. Section 3701 and Management Directive 215.16. The Nondiscrimination/Sexual Harassment clause requires contractors to complete and submit Form STD-21 (Initial Contract Compliance Data) to the purchasing agency (or the using agency, in the case of a Department of General Services purchase order). The information provided by contractors on the form provides agencies with the capability to determine if contractors are complying with the Nondiscrimination/Sexual Harassment clause. Contractor Responsibility Provisions Required by Management Directive 215.9, Contractor Responsibility Program (unless waived) Contractor Integrity Provisions Required by Management Directive 215.8, Contractor Integrity Provisions for Commonwealth Contracts (unless waived). Termination Provisions Contracts shall contain provisions allowing the commonwealth to terminate the contract for: Unacceptable contractor performance. Non-appropriation of funds. For the commonwealth s convenience, where appropriate. Subcontracting Requirements As noted in the DGS Procurement Handbook, contracts shall identify any known subcontractor, including federal identification number, and shall contain a provision requiring the prime contractor to obtain prior agency approval of other subcontracts or the assignment of any rights or responsibilities. All contractors obtaining disadvantaged business utilization must clearly and concisely set forth how each Disadvantaged Business will be utilized. It is p. 14

important to carefully review the RFP requirements. For example, the contractor must indicate specific Disadvantaged Businesses to which it is making commitments. Keep in mind that credit will not be given for stating that a Disadvantaged Business will be selected after the contract is awarded. The contractor must describe also the goods or services to be provided by the Disadvantaged Business, including the percentage of the total value of services or products purchased under the proposal that the Disadvantaged Business will provide. For assistance with finding qualified Disadvantaged Businesses, go to www.dgsweb.state.pa.us/mbewbe/vendorsearch.aspx. All contracts containing disadvantaged business and EZSB participation must also include a provision requiring the contractor to meet and maintain those commitments made to disadvantaged businesses at the time of submittal or contract negotiation, unless a change in the commitment is approved by the Agency Head upon recommendation by BMWBO. In addition, RFP language provides that [t]o the extent that an Offeror qualifies as a Small Disadvantaged Business or a Socially Disadvantaged Business, the Small Disadvantaged Business or Socially Disadvantaged Business cannot enter into subcontract arrangements for more than 40% of the total estimated dollar amount of the contract. All contracts must require that disadvantaged business and EZSB utilization be reported to the agency on a quarterly basis. Commitments to disadvantaged businesses and EZSB firms made at the time of bidding must be maintained throughout the term of the contract. Disadvantaged Business commitments are binding. Any proposed change or request to withdraw a Disadvantaged Business commitment must be submitted to BMWBO for approval. BMWBO will make a recommendation as to a course of action to the contracting officer. If a contract is assigned to another contractor, the new contractor must maintain the commitments to disadvantaged businesses and EZSB participation of the original contract. When federal funds are involved, the contracts shall include any required federal aid conditions. p. 15

MBE/WBE UTILIZATION INFORMATION Notice to Contractors After a contract/bid over $50,000 has been executed, the Equal Opportunity/Contract Compliance Office will issue a letter to the contractor advising it of its responsibility to report MBE/WBE utilization to the agency. All contractors will be required to submit reports of their minority and women business utilization on a quarterly basis to the agency's Equal Opportunity/Contract Compliance Office until the end of the contract. Contractors may submit reports on a monthly basis if they so choose. Reports submitted by contractors must include the following information: Contractor name, address & phone number Contract number Reporting period Name, address & phone number of all MBE/WBE subcontractors identified and not identified in the executed contract Expenditures to those subcontractors during the reporting period Explanations for any lack of expenditures to identified MBE/WBE subcontractors during the reporting period MBE/WBE Utilization Reports are to be submitted to the agency's Equal Opportunity/Contract Compliance Office no later than the tenth business day after the end of the quarter. Agencies operate on a fiscal year calendar beginning July 1 st and ending June 30 of the following year. Therefore, if a contractor opts to submit quarterly reports, they will be due 10 business days after the following dates: September 30, December 31, March 31, and June 30. Contractors submitting monthly reports should report expenditures from the first day of the month to the last day of that month (i.e. July 1-31). Contractors should not submit monthly reports that extend beyond one calendar month (i.e. June 15-July 15). MBE/WBE Utilization Reports are required even when contractors are under an emergency contract. The Secretary, Deputy Secretary for Administration, 1 Office of Chief Counsel, procurement office, and bureau supply designees will be notified of contractors who fail to submit MBE/WBE Utilization Reports by the due dates listed above. Failure to submit MBE/WBE Utilization Reports in the specified timeframes may result in sanctions imposed by the agency and the Department of General Services, up to and including, suspension, debarment, and termination of the contract. 1 In some agencies, the Deputy Secretary for Administration oversees MBE/WBE matters, while DGS has a Deputy Secretary for Minority, Women-Owned and Disadvantaged Business Development. p. 16

Notice to MBE/WBE Subcontractors Another quality control and compliance measure is to contact subcontractors identified in the contract to ensure that prime contractors are in compliance with the terms of their contract. Subcontractors should be advised that, if their services are not being utilized in accordance with the terms of the contract, they should notify the agency in writing. * If assistance is needed regarding any of the notices or utilization reports mentioned in this section, please contact BMWBO at (717) 783-3119. p. 17

ANNUAL MBE/WBE UTILIZATION REPORTS DGS Annual Report to Legislature The Department of General Services (DGS) is required to provide a written report annually (prior to October 1) to the General Assembly concerning the awarding of contracts to small and disadvantaged businesses during the preceding fiscal year. Agency Annual Report to its Secretary, BMWBO and Commissions The agency's Equal Opportunity/Contract Compliance Office will issue an Annual MBE/WBE Utilization Report, which will provide the agency s MBE/WBE utilization in contracts over $50,000 in the preceding fiscal year, with the exception of statewide requirements contracts. Statewide requirements contracts are monitored by the Department of General Services for compliance to MBE/WBE program policy. This annual report will be submitted by August 15 each year to the following persons/entities: Secretary of Agency, Deputy Secretaries, and Chief Counsel DGS Bureau of Minority and Women Business Opportunities Governor s Advisory Commissions on African-American, Latino, and Asian Affairs Pennsylvania Legislative Black Caucus The Agency s MBE/WBE Annual Utilization Report will include: Agency Data: Agency & MBE/WBE Program Overview Contracts Issued by the Agency in the Preceding Fiscal Year Types of Contracts Total Number of Contracts (including statewide requirements contracts) Agency Total Contract Expenditures Total MBE/WBE expenditures vs. annual contract award amounts Percentage of MBEs, WBEs, and majority subcontractors Percent MBE/WBE expenditure change from the previous year, if applicable MBE/WBE Contracting Activities in the Preceding Fiscal Year p. 18

Contractor Data: Contractor Overview & Description of Services Provided Type of Contract & Annual Expenditure to Contractor MBE/WBE Utilization by Contract, including: Listing of MBE/WBE subcontractors Total MBE/WBE expenditures vs. annual contract award amount Percentage of MBEs, WBEs, and majority subcontractors Percent MBE/WBE expenditure change from the previous year, if applicable Agency Annual Report to Individual Contractors The Agency s Equal Opportunity/Contract Compliance Office will provide an annual report of the contractors MBE/WBE Utilization for the preceding fiscal year by August 15. Contractors with statewide requirements contracts will not receive a report, as the Department of General Services monitors these contracts for compliance to MBE/WBE program policy. The contractor s Annual MBE/WBE Utilization Report will include: Type of Contract & Annual Expenditure to Contractor MBE/WBE Utilization by Contract, including: Total MBE/WBE expenditures vs. annual contract award amount Percentage of MBEs, WBEs, and majority subcontractors Percent total expenditure change from previous year, if applicable Recommendations, if applicable Agency Annual Report to Other Agency Staff The agency's Equal Opportunity/Contract Compliance Office will provide an annual report of an individual contractors MBE/WBE Utilization for the preceding fiscal year by August 15 to the bureau/office director, bureau supply designees, and procurement office. Agency staff will not receive a report of contractors with statewide requirements contracts, as the Department of General Services monitors these contracts for compliance to MBE/WBE program policy. The contractor s Annual MBE/WBE Utilization Report will include: Type of Contract & Annual Expenditure to Contractor MBE/WBE Utilization by Contract, including: Total MBE/WBE expenditures vs. annual contract award amount Percentage of MBEs, WBEs, and majority subcontractors Percent total expenditure change from previous year, if applicable Recommendations, if applicable. p. 19

DEFINITIONS As used in this handbook, the following words shall have the meanings provided unless otherwise noted. African-Americans: Persons having origins from any of the Black groups of Africa, including persons having origins in any of the original peoples of the Cape Verde Islands. Agency Head: The Secretary, or other official, who is first in responsibility within an agency. Asian-Americans: Persons having origins from one or more of the original peoples of the Far East, Southeast Asia including China, Japan, Korea, India, Pakistan and Bangladesh. Bureau of Minority and Women Business Opportunities (BMWBO): An office within the Department of General Services with the responsibility to assure participation by, and the fair treatment of, minority and women owned businesses and other disadvantaged businesses in commonwealth contracting opportunities. BMWBO also has responsibility for the Commonwealth s Contract Compliance Program. Debarment: Action taken by the head of the purchasing agency to remove a person or entity from consideration for an award of any commonwealth contract or subcontract for a specified period of time. Designated Enterprise Zone: An economically disadvantaged area within a municipality that has been designated as such by the Pennsylvania Department of Community and Economic Development. DGS: The Department of General Services. Enterprise Zone Small Businesses (EZSB): A small business whose economic growth and development has been restricted based on an economic bias. Such businesses are small businesses whose primary or headquarter facilities exist within designated enterprise zones. Businesses seeking to become classified as an EZSB by the Commonwealth of Pennsylvania must submit with their proposals evidence that such business has its primary or headquarter facility within a designated enterprise zone. Such evidence shall include a copy of the lease or deed for the company s primary or headquarters locations and a letter from the local enterprise zone coordinator verifying that the address is in an enterprise zone. They shall also submit proof of gross annual revenues from the most recent tax year. Hispanic Americans: Persons having their origins from one or more of the Spanish-speaking peoples of Mexico, Puerto Rico, Cuba, Central or South American or the Caribbean Islands. p. 20

Invitation For Bids (IFB): All documents, including those either attached or incorporated by reference, used for soliciting bids. Invitation To Qualify (ITQ): This term has a dual meaning. It is a commonlyused name for the invitation for bids or request for proposals that is used to solicit bids or proposals for the multiple award method of procurement. It is also sometimes used to identify the document that solicits applications or proposals for qualification of bidders/offerors. Issuing Office: The sole point of contact for the offerors to contact the purchasing agency with any questions in regard to a request for proposals. Joint Venture: A joining of two separate legal entities to work together on a technically challenging or unique procurement. It is simply a partnership for a particular project and terminates on the cessation of that project. Management Control: The minority or women owners must possess the power to make day-to-day and long-term decisions on matters of management, policy, and operations. The firm must not be under any formal or informal restrictions (such as bylaws, partnership agreements, etc.) that limit the authority of the minority and/or women owners to make decisions and determine the future of the business. Minority: A person who is a citizen of the United State who is a Black American, Hispanic American, Native American, Asian-Pacific American, or Asian-Indian American. Minority Business Enterprise (MBE): A small for-profit business concern that is one of the following: 1. A sole proprietorship owned and controlled by a minority. 2. A partnership or joint venture controlled by minorities in which at least 51% of the beneficial ownership interest is held by minorities. 3. A corporation or other entity controlled by minorities in which at least 51% of the voting interest and 51% of the beneficial ownership interest are held by minorities. Native Americans (Alaskans): Persons having origins from one or more of the original peoples of North America and who are recognized as an Indian by a tribe or tribal organization. Operational Control: Minority and/or women owners must demonstrate that they possess the experience, expertise, and knowledge to operate their particular business. Women and/or minority owners must also verify that they hold any licenses or certifications required by the type of business in which they are engaged. Ownership: Capitalization of the company, stock ownership (if applicable), and the distribution of risks and profits must substantiate that the minorities and/or p. 21

women applying for certification really own the business. Companies acquired as gifts, without sufficient consideration, will be closely examined to assure they meet the requirements of the certification program. Pacific Islanders: Persons having origins from one or more of the original peoples of the Pacific Islands, including Samoa and the Philippine Islands. Procurement: Buying, purchasing, renting, leasing, licensing, or otherwise acquiring any supplies, services, or construction. The term also includes all functions that pertain to the obtaining of any material, service or construction, including description of requirements, selection and solicitation of sources, preparation and award of contract, and all phases of contract administration. Proposal: An offer made in response to a request for proposal which may be subject to negotiation and award criteria set forth in the request for proposal. Request for Proposals (RFP): All documents, including those either attached or incorporated by reference, used for soliciting proposals. Responsible Bidder: A bidder that has submitted a responsive bid and that possesses the capability to fully perform the contract requirements in all respects and the integrity and reliability to assure good faith performance. Responsive Bid: A bid which conforms in all material respects to the requirements and criteria in the invitation for bids. Small Business: A business in the United States which is independently owned, is not dominant in its field of operation, employs no more than 100 full-time or fulltime equivalent employees, and earns less than $20 million in gross annual revenues ($25 million for businesses in IT sales or service). Small Disadvantaged Business: A small business which is owned or controlled by a majority of persons, not limited to members of minority groups, who have been deprived of the opportunity to develop and maintain a competitive position in the economy because of social disadvantages. The term includes MBEs and WBEs. With RFPs for materials, services, and construction, one of the criteria for evaluation of proposals will be disadvantaged business participation. This criterion must be included in all RFPs regardless of the amount of the procurement. Disadvantaged business participation can be reflected in the following ways: 1. Prime Proposer. Proposals submitted by disadvantaged businesses. 2. Joint Venture. Proposals submitted by suppliers who are in joint ventures with disadvantaged businesses. 3. Subcontractor. Proposals reflecting subcontracting commitments with disadvantaged business. p. 22

Statewide Requirements Contract: A contract entered into by the Department of General Services as purchasing agent which covers the annual, semiannual, or quarterly contract requirements of all commonwealth agencies and allows the agencies to order needed materials, services, or construction directly from the contractor. Subcontractor: An individual, business, university, governmental entity, or nonprofit organization contracting to perform part, or all, of another entity's contract. Supplier: A bidder, offeror, or contractor offering to provide materials and/or services to the commonwealth. A supplier may also be referred to as a vendor. Suspension: The temporary disqualification of a person or entity from consideration for an award of any commonwealth contract or subcontract for a period of up to three (3) months pending further investigation or the completion of legal proceedings if there is probable cause for debarment. Women: United States citizens who are of the female gender. Women Business Enterprise (WBE): A small business that is one of the following: 1. A sole proprietorship owned and controlled by a woman. 2. A partnership or joint venture controlled by women in which at least 51% of the beneficial ownership interest is held by women. 3. A corporation or other entity controlled by women in which at least 51% percent of the voting interest and 51% percent of the beneficial ownership interest are held by women. p. 23

HANDBOOK REFERENCES Executive Order 2008-6 - Office of Diversity Management Executive Order 2004-6 - Minority & Women-Owned Business Opportunities Executive Order 2006-2 - Contract Compliance Commonwealth Procurement Code, 62 Pa.C.S. Section 101 et seq. Pennsylvania Procurement Handbook Nondiscrimination/Sexual Harassment Clause Management Directive 215.8 - Contractor Integrity Provisions for Commonwealth Contracts Management Directive 215.9 - Contractor Responsibility Program Management Directive 215.16 - Contract Compliance Program Statement of Policy at 4 Pa. Code Chapter 58 Bureau of Minority and Women Business Opportunities Website **Acknowledgements to: PA Department of Revenue and Eboni Braxton for previous draft, Roxana Dietz for editing previous draft, and Mary Ann Jordano for her time in drafting and reviewing this document. p. 24