Chapter 200 — Disadvantaged Business Enterprises;

Minority-Owned Businesses; Woman-Owned Businesses; Businesses

Owned by Service-Disabled Veterans; Emerging Small Businesses

 

 

2015 EDITION

 

CERTAIN DISADVANTAGED BUSINESS ENTERPRISES

 

MISCELLANEOUS MATTERS

 

GENERAL PROVISIONS

 

200.005     Definitions for ORS 200.005 to 200.075, 200.160 to 200.200 and 279A.105

 

200.015     Legislative findings

 

200.025     Governor’s Policy Advisor for Economic and Business Equity; Certification Office for Business Inclusion and Diversity; duties

 

200.035     Notice to Governor’s Policy Advisor for Economic and Business Equity

 

200.045     Required participants; rebuttable presumption of responsibility and good faith efforts to encourage participation in public contracts

 

CERTIFICATION

 

200.055     Certification as disadvantaged business enterprise, minority-owned business, woman-owned business, business that service-disabled veteran owns or emerging small business; fees; rules; appeal

 

200.057     Designation of certified emerging small business as tier one or tier two firm

 

200.065     Fraudulent conduct prohibited; penalty and other sanctions

 

200.075     Prohibited conduct; suspension of right to participate in public contracts; revocation of certification

 

RESPONSIBILITY OF CONTRACTING AGENCIES

 

200.090     Contracting agencies to pursue policy of providing opportunities

 

MENTOR RELATIONSHIP

 

200.110     Mentor relationship; guidelines; eligibility

 

200.120     Development plan for mentor relationship; contents; review; termination

 

EMERGING SMALL BUSINESS ASSISTANCE PROGRAM

 

200.160     Transportation Commission duties; report

 

200.170     Eligibility for participation

 

200.180     Emerging Small Business Account; uses

 

200.190     Deposit of one percent of highway construction contract amount

 

200.200     Security for performance by emerging small business

 

GENERAL PROVISIONS

 

      200.005 Definitions for ORS 200.005 to 200.075, 200.160 to 200.200 and 279A.105. As used in ORS 200.005 to 200.075, 200.110, 200.120, 200.160 to 200.200 and 279A.105:

      (1) “Contracting agency” has the meaning given that term in ORS 279A.010.

      (2) “Contractor” means a person that agrees to legally enforceable terms and conditions under which the person performs services or supplies materials in accordance with a contracting agency’s specifications and for the purpose of accomplishing results the contracting agency intends, while retaining control of the means, methods and manner of performing the services or supplying the materials.

      (3) “Disadvantaged business enterprise” means a small business concern:

      (a) At least 51 percent of which one or more socially and economically disadvantaged individuals own; or

      (b) At least 51 percent of the stock of which, if the small business concern is a corporation, is owned by one or more economically disadvantaged individuals who also control and manage the daily business operations of the small business concern.

      (4) “Economically disadvantaged individual” means a socially disadvantaged individual for whom diminished capital and credit opportunities have impaired the individual’s ability to compete in the free enterprise system as compared to other individuals in the same business area who are not socially disadvantaged individuals.

      (5) “Emerging small business” means an independent business concern that:

      (a) Has a principal place of business located in this state;

      (b) Qualifies as a tier one firm or a tier two firm;

      (c) Is properly licensed and legally registered in this state; and

      (d) Is not a subsidiary or parent company that belongs to a group of firms that the same individuals own or control if, in the aggregate, the group of firms does not qualify as a tier one firm or a tier two firm.

      (6) “Minority individual” means an individual who is a citizen or lawful permanent resident of the United States and is:

      (a) African American, having origins in any of the original peoples of Africa;

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

      (c) Asian American, having origins in any of the original peoples of East Asia, Southeast Asia, the Indian subcontinent or the Pacific Islands;

      (d) Portuguese, having Portuguese, Brazilian or other Portuguese culture or origin, regardless of race;

      (e) American Indian or Alaskan Native, having origins in any of the original peoples of North America; or

      (f) Any other individual or member of another group that the Certification Office for Business Inclusion and Diversity determines is socially and economically disadvantaged.

      (7) “Minority-owned business,” “woman-owned business” or “business that a service-disabled veteran owns” means, as appropriate, a small business concern:

      (a) At least 51 percent of which one or more minority individuals, women or service-disabled veterans own and control; or

      (b) At least 51 percent of the stock of which, if the small business concern is a corporation, is owned by one or more minority individuals, women or service-disabled veterans who also control and manage the daily business operations of the small business concern.

      (8) “Responsible bidder or proposer” means a bidder or proposer that the Governor’s Policy Advisor for Economic and Business Equity determines has undertaken both a policy and practice of actively pursuing participation by minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own or emerging small businesses in all of the bidder’s or proposer’s bids or proposals, both public and private.

      (9) “Service-disabled veteran” means a veteran who has a United States Department of Veterans Affairs disability rating of at least zero percent as a result of an injury or illness that the veteran incurred, or that was aggravated, during active military service and who received a discharge or release under other than dishonorable conditions.

      (10) “Small business concern” means a small business, as defined by the United States Small Business Administration in 13 C.F.R. part 121, as in effect on January 1, 2016.

      (11) “Socially disadvantaged individual” means an individual who has been subjected to racial or ethnic prejudice or cultural bias, without regard to individual qualities, because of the individual’s identity as a member of a group.

      (12) “State contracting agency” has the meaning given that term in ORS 279A.010.

      (13) “Subcontractor” means a contractor that does not have a direct contractual relationship with a contracting agency.

      (14) “Tier one firm” means a business that employs not more than 19 full-time equivalent employees and has average annual gross receipts for the last three years that do not exceed an amount that the Oregon Business Development Department specifies by rule.

      (15) “Tier two firm” means a business that employs not more than 29 full-time equivalent employees and has average annual gross receipts for the last three years that do not exceed an amount that the Oregon Business Development Department specifies by rule.

      (16) “Woman” means a person of the female gender who is a citizen or lawful permanent resident of the United States. [1987 c.893 §2; 1989 c.1043 §1; 1991 c.517 §9; 2001 c.104 §71; 2003 c.794 §213; 2005 c.22 §§150,151; 2005 c.683 §§4,5; 2015 c.565 §1]

 

      200.015 Legislative findings. (1) The Legislative Assembly supports the aspirations of minorities, women and emerging small businesses to enter the mainstream of Oregon social, political and economic life.

      (2) The Legislative Assembly finds:

      (a) The opportunity for full participation in our free enterprise system by minorities, women and emerging small businesses is essential;

      (b) Greater economic opportunity for minorities, women and emerging small businesses is essential;

      (c) Review of public programs to remedy historical patterns of exclusion of and discrimination against racial or ethnic groups and women is needed;

      (d) Public policies and programs to eliminate the effects of long-term, open and pervasive exclusion of and discrimination against minorities and women from the business sector, including increased opportunities to integrate minorities and women into the full economic life of the community should be reviewed; and

      (e) In cooperation with the private sector, the affected populations, interested groups and appropriate governmental entities, a program of review should be established to recommend remedies for the unfortunate effects of social, political and economic inequity that still exist.

      (3) Women and minorities are rebuttably presumed to be:

      (a) Economically disadvantaged.

      (b) Socially disadvantaged. [1987 c.893 §3; 1989 c.1043 §2]

 

      200.025 Governor’s Policy Advisor for Economic and Business Equity; Certification Office for Business Inclusion and Diversity; duties. (1) The Governor shall appoint a Governor’s Policy Advisor for Economic and Business Equity within the office of the Governor.

      (2) The Certification Office for Business Inclusion and Diversity is created within the Oregon Business Development Department, and the Director of the Oregon Business Development Department shall appoint the employees of the office.

      (3) The Governor’s Policy Advisor for Economic and Business Equity shall:

      (a) Advise the Governor and the director on activities and initiatives that may promote the economic integration of minorities, women, service-disabled veterans and emerging small businesses into the business sector;

      (b) Prepare an annual report to the Governor, director and Legislative Assembly on disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses that examines:

      (A) The status of the enterprises and businesses in the marketplace;

      (B) Accomplishments and resolutions that have occurred with respect to issues that concern the enterprises and businesses; and

      (C) Recommendations for executive and legislative action; and

      (c) Carry out other duties that the Governor may assign.

      (4) The Certification Office for Business Inclusion and Diversity shall:

      (a) Provide information to minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses;

      (b) Assist in developing and implementing an aggressive strategy for this state, based on research and monitoring, that encourages minorities, women, service-disabled veterans and emerging small businesses to participate in the state’s economy;

      (c) Recommend to the director methods for researching, developing and implementing a plan to involve minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses in all state programs;

      (d) Maintain, in consultation with the Department of Transportation, public universities listed in ORS 352.002 and other entities, an Oregon Opportunity Register and Clearinghouse for information about contracting agency solicitations and other opportunities to submit bids or proposals to contracting agencies to provide goods, supplies and services, including professional services;

      (e) Monitor the certification and compliance program under ORS 200.055 for:

      (A) Disadvantaged business enterprises;

      (B) Minority-owned businesses, woman-owned businesses and businesses that service-disabled veterans own; and

      (C) Emerging small businesses;

      (f) Investigate complaints and possible abuses of the certification program; and

      (g) Assist in promoting and coordinating plans, programs and operations of state government that help minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses to participate in the economic life of this state. [1987 c.893 §4; 1989 c.1043 §3; 1993 c.500 §7; 1993 c.744 §§189,189a; 2003 c.794 §214; 2005 c.683 §§6,7; 2009 c.830 §135; 2015 c.565 §2; 2015 c.767 §§60,224,225]

 

      200.035 Notice to Governor’s Policy Advisor for Economic and Business Equity. (1) A state contracting agency shall give timely notice and information to the Governor’s Policy Advisor for Economic and Business Equity if the state contracting agency intends to advertise or solicit bids or proposals for a public contract with a contract price of $10,000 or more and shall notify the policy advisor when the state contracting agency has awarded the contract.

      (2) Each state contracting agency shall, in consultation with the policy advisor, establish a process and timeline for providing the policy advisor with the notice and information required by subsection (1) of this section. [1987 c.893 §5; 1997 c.145 §1; 1997 c.802 §10; 2005 c.351 §1; 2015 c.565 §3]

 

      200.045 Required participants; rebuttable presumption of responsibility and good faith efforts to encourage participation in public contracts. (1) As used in this section, “required participant” means:

      (a) A disadvantaged business enterprise;

      (b) A minority-owned business, a woman-owned business or a business that a service-disabled veteran owns; or

      (c) An emerging small business.

      (2) If a public contract requires participation from a required participant and a bidder or proposer for the public contract is not a required participant, a contracting agency may award the public contract to the bidder or proposer only if the bidder or proposer:

      (a) Demonstrates that the bidder or proposer is responsible; and

      (b) Has made good faith efforts to encourage required participants to participate in the public contract.

      (3) A contracting agency may rebuttably presume that for the purposes of this section a bidder or proposer is responsible and has made good faith efforts to encourage required participants to participate in the public contract if the bidder or proposer takes all of these actions:

      (a) Attends presolicitation or prebid meetings that the contracting agency scheduled to inform disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses of contracting and subcontracting or material supply opportunities available in connection with a public contract;

      (b) Identifies and selects specific economically feasible units of the public contract that disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses may perform in order to increase the likelihood that required participants will participate in the public contract;

      (c) Advertises the opportunities described in paragraphs (a) and (b) of this subsection in general circulation publications, trade association publications and publications that serve an audience or readership that consists primarily of minorities, women, service-disabled veterans and emerging small businesses;

      (d) Provides written notice of the opportunities described in paragraphs (a) and (b) of this subsection to a reasonable number of specific disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses that the bidder or proposer identified from a list of enterprises or businesses that the Certification Office for Business Inclusion and Diversity certified under ORS 200.055, in sufficient time to allow the enterprises or businesses to participate effectively;

      (e) Follows up on the bidder’s or proposer’s initial solicitations of interest by contacting the enterprises or businesses to which the bidder or proposer provided notice under paragraph (d) of this subsection to determine with certainty whether the enterprises or businesses are interested in the opportunities described in paragraphs (a) and (b) of this subsection;

      (f) Provides interested disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses with adequate information about plans, specifications and requirements for subcontracting or material supply work in connection with the public contract;

      (g) Negotiates in good faith with interested disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses, and did not without justifiable reason reject as unsatisfactory bids or proposals that the enterprises or businesses prepared;

      (h) Advises and assists interested disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses to obtain, when necessary, bonding, lines of credit or insurance that the contracting agency or contractor requires;

      (i) Makes efforts to encourage disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses to participate in the public contract that the contracting agency may reasonably expect will produce a level of participation that meets the contracting agency’s goals or requirements; and

      (j) Uses the services of minority community organizations, minority contractor groups, local, state and federal minority business assistance offices and other organizations that the Governor’s Policy Advisor for Economic and Business Equity identifies as providing assistance in recruiting disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses for participation in public contracts.

      (4) A contracting agency may rebuttably presume that for the purposes of this section a bidder or proposer is not responsible and has not made good faith efforts to encourage required participants to participate in a public contract if the bidder or proposer does not take all of the actions required under subsection (3) of this section. Superficial or pro forma efforts do not demonstrate responsibility or constitute adequate good faith efforts under this section. [1987 c.893 §7; 1989 c.1043 §8; 1997 c.145 §2; 2003 c.794 §215; 2009 c.830 §136; 2015 c.565 §4]

 

CERTIFICATION

 

      200.055 Certification as disadvantaged business enterprise, minority-owned business, woman-owned business, business that service-disabled veteran owns or emerging small business; fees; rules; appeal. (1)(a) An enterprise or business may apply to the Certification Office for Business Inclusion and Diversity for certification as:

      (A) A disadvantaged business enterprise;

      (B) A minority-owned business;

      (C) A woman-owned business;

      (D) A business that a service-disabled veteran owns; or

      (E) An emerging small business.

      (b) An enterprise or business shall submit a separate application for each category of certification the enterprise or business seeks under paragraph (a) of this subsection.

      (c) If an enterprise or business qualifies under ORS 200.005 to 200.075 and if the office approves an application from the enterprise or business, the office shall certify the enterprise or business under one or more of the categories described in paragraph (a) of this subsection.

      (d) For purposes of awarding a public contract, a contracting agency shall recognize an enterprise or business with a certification from the office as the category of enterprise or business described in the certification and as having met the requirements set forth in ORS 200.005 to 200.075. For purposes of awarding a subcontract in connection with a public contract, a contractor may recognize a subcontractor with a certification from the office as the category of enterprise or business described in the certification and as having met the requirements set forth in ORS 200.005 to 200.075.

      (2) In consultation with public universities listed in ORS 352.002 and the Department of Transportation, and with the approval of the Governor’s Policy Advisor for Economic and Business Equity, the Oregon Business Development Department by rule shall adopt a uniform standard form and procedure to provide complete documentation of an enterprise’s or a business’ status as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business. The department shall compile and make available a list of enterprises and businesses that the Certification Office for Business Inclusion and Diversity certifies under this section.

      (3) If the Certification Office for Business Inclusion and Diversity denies a certification as, or decertifies, a disadvantaged business enterprise, an affected business enterprise may appeal directly to the United States Department of Transportation.

      (4) If the Certification Office for Business Inclusion and Diversity denies, revokes or refuses to renew a business’s certification as a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business, the business may request a contested case hearing as provided in ORS chapter 183.

      (5) The Oregon Business Development Department, through the Certification Office for Business Inclusion and Diversity, is the sole agency that may certify enterprises and businesses as disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses that are eligible to perform public contracts in this state.

      (6) The Oregon Business Development Department by rule may establish a fee not to exceed $100 for a copy of the list described in subsection (2) of this section and may assess contracting agencies for services under ORS 200.005 to 200.075.

      (7) The Department of Transportation may collect a fee, not to exceed $200, from a bidder or proposer at the time the bidder or proposer prequalifies to perform public contracts to cover the costs of the Oregon Business Development Department in administering ORS 200.005 to 200.075. The Department of Transportation shall transfer fees that the Department of Transportation collects under this subsection to the credit of the account established under subsection (8) of this section.

      (8) The Oregon Business Development Department shall establish a special account in which to deposit fees and assessments. The special account is continuously appropriated to the Oregon Business Development Department to meet the Oregon Business Development Department’s expenses in administering ORS 200.005 to 200.075. [1987 c.893 §8; 1989 c.1043 §4; 1993 c.500 §8; 1997 c.145 §3; 2003 c.794 §216; 2009 c.830 §137; 2015 c.148 §1; 2015 c.565 §5; 2015 c.767 §61]

 

      200.057 Designation of certified emerging small business as tier one or tier two firm. (1) A business may be certified as an emerging small business by the Oregon Business Development Department for up to 12 years and may be:

      (a) Designated a tier one firm for up to six years unless the business no longer qualifies as a tier one firm.

      (b) Designated a tier two firm for up to six years unless the business no longer qualifies as a tier two firm.

      (2) The department shall adjust annually the amount of the average annual gross receipts required to qualify as a tier one firm or a tier two firm using the most recent three-year average of the Portland-Salem Consumer Price Index for All Urban Consumers for All Items, as reported by the United States Bureau of Labor Statistics.

      (3) Notwithstanding the time limits established by subsection (1) of this section, if a tier one firm provides compelling information showing, in the judgment of the department, that the firm has not been afforded an opportunity to bid on emerging small business projects during a year of eligibility, the department shall extend the tier one designation of the firm for one year. A tier one firm may receive the extension described in this subsection only once. [2005 c.683 §2; 2009 c.830 §138]

 

      Note: 200.057 was added to and made a part of 200.005 to 200.075 by legislative action but was not added to any other series. See Preface to Oregon Revised Statutes for further explanation.

 

      200.065 Fraudulent conduct prohibited; penalty and other sanctions. (1) A person may not fraudulently obtain or retain, attempt to fraudulently obtain or retain or aid another person in fraudulently obtaining or retaining or attempting to fraudulently obtain or retain certification as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business.

      (2) A person may not knowingly make a false claim that any person is qualified for certification or is certified under ORS 200.055 for the purpose of obtaining a public contract or subcontract or other benefit.

      (3) An affected contracting agency may withhold payment, may suspend or terminate a public contract and may impose on any person a civil penalty that does not exceed 10 percent of the contract or subcontract price or $5,000, whichever is less, for each violation of subsection (1) or (2) of this section. The person shall pay the penalty to the affected contracting agency. If the affected contracting agency does not impose a civil penalty on the person under this subsection, the Oregon Business Development Department may independently impose a civil penalty that does not exceed $5,000 for each violation of subsection (1) or (2) of this section. The person shall pay a penalty that the department imposes to the Certification Office for Business Inclusion and Diversity.

      (4) The department or an affected contracting agency shall investigate violations of subsection (1) or (2) of this section. In investigating a violation, the department or an affected contracting agency may require any additional information, administer oaths, take depositions and issue subpoenas to compel witnesses to attend and compel the production of books, papers, records, memoranda or other information necessary to carry out the department’s or the affected contracting agency’s duties. If a person fails to comply with any subpoena that the department or the affected contracting agency issued under this subsection or refuses to testify on any matter on which a person may lawfully be interrogated, the department or the affected contracting agency shall follow the procedure provided in ORS 183.440 to compel compliance.

      (5) The department or an affected contracting agency may disqualify from submitting a bid or proposal or receiving an award of a public contract, for a period of not more than three years, any person that under oath during the course of an investigation admits to violating subsection (1) or (2) of this section or that the department or the affected contracting agency finds to have violated subsection (1) or (2) of this section. Any contracting agency that has notice of the finding of the fraudulent certification may also disqualify the person from bidding on or participating in any public contract. [1987 c.893 §9; 1989 c.1043 §5; 1997 c.145 §4; 2009 c.830 §139; 2013 c.1 §21; 2015 c.148 §2; 2015 c.565 §6]

 

      200.075 Prohibited conduct; suspension of right to participate in public contracts; revocation of certification. (1) An affected contracting agency shall suspend any bidder’s, proposer’s, contractor’s or subcontractor’s right to submit a bid or proposal for, or receive an award of, a public contract in the future if the bidder, proposer, contractor or subcontractor knowingly commits any of the acts listed in this subsection. The affected contracting agency shall suspend the right only after providing notice and opportunity for hearing in a manner that the affected contracting agency provides by rule. The affected contracting agency shall specify a time for the suspension that is up to one year for a first violation, up to three years for a second violation and up to five years for a third violation. Each violation must remain on record for five years. After five years the affected contracting agency may not consider the violation in reviewing future violations. A bidder, proposer, contractor or subcontractor may not:

      (a) Enter into any agreement to represent that a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business certified under ORS 200.055 will perform work or supply materials under a public contract without the knowledge and consent of the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business.

      (b) Exercise or permit another bidder, proposer, contractor or subcontractor to exercise management and decision making control over the internal operations of a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business, other than the bidder’s, proposer’s, contractor’s or subcontractor’s own enterprise or business. As used in this paragraph, “internal operations” does not include normal scheduling, coordination, execution or performance as a subcontractor on a public contract.

      (c) Use a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business to perform a public contract or subcontract or to supply material under a public contract to meet an established goal or requirement if the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business does not perform a commercially useful function in carrying out responsibilities and obligations under the public contract.

      (d) Fail to perform a commercially useful function in performing a public contract or subcontract or in supplying material to a contractor or subcontractor that is performing a public contract or subcontract if the bidder, proposer, contractor or subcontractor is presented as a certified disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business to meet an established goal or requirement.

      (2) The Certification Office for Business Inclusion and Diversity shall revoke an enterprise’s or a business’s certification under ORS 200.055 as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business if, after conducting an investigation in a manner similar to the manner provided in ORS 200.065 (4) for investigating a violation of ORS 200.065 (1) or (2), the Oregon Business Development Department finds that the enterprise or business allows or commits any of the acts listed in this subsection. A disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business may not:

      (a) Use the enterprise’s or business’s name to meet a goal or requirement for disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own or emerging small businesses to participate in a public contract or subcontract if the enterprise or business does not in fact intend to or does not actually perform work under the public contract or subcontract or does not intend to or does not purchase and supply material under a public contract or subcontract to supply material.

      (b) Use personnel of an uncertified enterprise or business to operate, manage or otherwise control the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business.

      (c) Exhibit a pattern of failing to perform a commercially useful function in performing a public contract or subcontract or supplying material to a contractor or subcontractor on a public contract if the enterprise or business is represented as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business certified under ORS 200.055 for the purpose of meeting an established goal or requirement.

      (3)(a) An affected contracting agency shall notify the department if the affected contracting agency investigates a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business for failing to perform a commercially useful function.

      (b) The department may conduct an independent investigation of a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business for exhibiting a pattern of failing to perform a commercially useful function in response to notifications from one or more affected contracting agencies under paragraph (a) of this subsection.

      (4) As used in this section, “commercially useful function”:

      (a) Means a function or service:

      (A) That the enterprise or business actually performs;

      (B) For which a demand exists in the marketplace; and

      (C) For which the enterprise or business receives payment that is proportionate to the work that the enterprise or business performs or that conforms with industry standards.

      (b) Does not include acting as a broker to provide for others to perform work. [1987 c.893 §11; 1989 c.1043 §6; 1991 c.91 §1; 1995 c.452 §21; 2015 c.148 §3; 2015 c.565 §7]

 

      200.085 [1987 c.893 §1; repealed by 1989 c.1043 §14]

 

RESPONSIBILITY OF CONTRACTING AGENCIES

 

      200.090 Contracting agencies to pursue policy of providing opportunities. Contracting agencies shall aggressively pursue a policy of providing opportunities for disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses and shall cooperate with the Governor’s Policy Advisor for Economic and Business Equity to determine the best means by which to make such opportunities available. [1989 c.1043 §10; 2015 c.565 §8]

 

      200.100 [1991 c.559 §1; 2005 c.22 §152; repealed by 2015 c.565 §24]

 

MENTOR RELATIONSHIP

 

      200.110 Mentor relationship; guidelines; eligibility. (1) The Oregon Business Development Department may recognize a mentor relationship between contractors and disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses that are certified under ORS 200.055. In order to qualify for the department’s recognition, the mentor relationship must offer the opportunity for the contractor to foster and encourage disadvantaged business enterprises, minority-owned businesses, woman-owned businesses, businesses that service-disabled veterans own and emerging small businesses to expand the capacity of existing enterprises and businesses and to offer the opportunity for less experienced enterprises and businesses to gain training and assistance.

      (2) To have the department recognize the mentor relationship described in subsection (1) of this section, a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business must follow guidelines that include, but are not limited to:

      (a) Meeting the certification requirements of the U.S. Department of Transportation or ORS 200.055. The Certification Office for Business Inclusion and Diversity may approve an application for certification under ORS 200.055 at the same time the department approves a mentor arrangement.

      (b) Remaining independent from the contractor and maintaining a minority individual’s, woman’s or service-disabled veteran’s actual ownership of the enterprise or business. A minority individual, woman or service-disabled veteran who owns the enterprise or business may have other employment and business interests if the employment or business interests do not conflict with the minority individual’s, woman’s or service-disabled veteran’s power to direct the management and policies of the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business and to make day-to-day and major decisions on matters of management, policy and operations. A contractor may provide facilities to the enterprise or business if the contractor and the enterprise or business maintain a separate lease agreement.

      (c) Complying with 49 C.F.R. 26 as to an individual’s or entity’s part ownership in a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business if the individual or entity is not certified under ORS 200.055. The enterprise or business shall report any property, equipment, supplies or other services that the enterprise or business buys, rents or receives as a donation and any investment that an individual or entity makes in the enterprise or business if the individual or entity is not certified under ORS 200.055. The report must include bills of sale, lease agreements or similar documents.

      (3) A mentor relationship may include an arrangement with an independent third party, such as a bank or accountant, to act as an agent. A third party may receive progress payments for work that a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business accomplishes, made out jointly to the third party and the enterprise or business, and may make payments on behalf of the enterprise or business to material suppliers or for federal and state payroll taxes.

      (4) Types of assistance that a contractor may provide in a mentor relationship to a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business include:

      (a) Financial assistance;

      (b) Technical and management assistance;

      (c) Equipment rental and use of personnel; and

      (d) Bonding assistance. [1991 c.559 §2; 2009 c.830 §140; 2015 c.565 §9]

 

      200.120 Development plan for mentor relationship; contents; review; termination. (1) The Oregon Business Development Department, in consultation with the Oregon Association of Minority Entrepreneurs, may approve a written development plan as part of a mentor relationship. The development plan must:

      (a) Clearly set forth the objectives and roles of the parties;

      (b) Be for a specified length of time;

      (c) Determine measurable goals that the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business must reach; and

      (d) Provide that if a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business uses a mentor’s resources in performing contracts or subcontracts for the mentor or for another contractor, the enterprise or business shall separately identify, account for and directly compensate the mentor for the resources. The department may closely monitor a development plan that provides that the enterprise or business will use the mentor’s resources extensively.

      (2) The development plan may also provide for the mentor to train the disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns, or emerging small business. Training may include:

      (a) Business planning;

      (b) Record keeping;

      (c) Technical training;

      (d) Capital formation;

      (e) Loan packaging;

      (f) Financial counseling;

      (g) Bonding; and

      (h) Equipment utilization.

      (3) The Oregon Business Development Department and the Oregon Association of Minority Entrepreneurs may review the development plan annually to monitor progress.

      (4) The development plan must provide that the mentor relationship may be terminated by mutual consent or if:

      (a) An enterprise or a business no longer qualifies for certification under ORS 200.055 as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, a business that a service-disabled veteran owns or an emerging small business;

      (b) Either party has failed or is unable to meet the party’s obligations under the development plan;

      (c) The disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business is not progressing or is not likely to progress in accordance with the development plan;

      (d) The disadvantaged business enterprise, minority-owned business, woman-owned business, business that a service-disabled veteran owns or emerging small business has reached a satisfactory level of self-sufficiency to compete without resorting to special treatment provided in the development plan; or

      (e) The plan or provisions of the plan are contrary to the requirements of federal, state, or local law or regulation, or otherwise contrary to public policy.

      (5) The parties to the development plan, the Oregon Business Development Department and the Oregon Association of Minority Entrepreneurs shall retain copies of the plan.

      (6) The development plan may provide that either party may dissolve the plan for any reason by notifying the Oregon Business Development Department and the Oregon Association of Minority Entrepreneurs. [1991 c.559 §3; 2009 c.830 §141; 2015 c.565 §10]

 

      200.150 [1991 c.517 §1; repealed by 2005 c.683 §13]

 

EMERGING SMALL BUSINESS ASSISTANCE PROGRAM

 

      200.160 Transportation Commission duties; report. The Oregon Transportation Commission shall appoint a committee to recommend plans whereby the Department of Transportation may assist emerging small businesses in overcoming barriers to participation in state public improvement and maintenance projects. The committee shall report biennially its recommendation to the commission and to the appropriate legislative committee. [1991 c.517 §2; 2005 c.683 §8]

 

      200.170 Eligibility for participation. (1) Subject to subsection (2) of this section, to participate in the emerging small business program under ORS 200.160 to 200.200, an applicant must:

      (a) Be certified by the Oregon Business Development Department under ORS 200.005 to 200.075 as an emerging small business;

      (b) Show that the applicant’s place of business and the work in which the applicant seeks to participate are located in this state; and

      (c) Show that the applicant is in compliance with applicable licensing and registration requirements.

      (2) The Department of Transportation may limit eligibility for participation on a specific project or contract to emerging small businesses that are located in or draw a part of their workforce from economically distressed areas or enterprise zones in this state, as designated by the Oregon Business Development Department in consultation with the Employment Department.

      (3) An applicant who participates under ORS 200.160 to 200.200 must perform at least 51 percent of the labor provided by the applicant on a public improvement or maintenance project using the applicant’s own workforce. [1991 c.517 §§3,6; 2005 c.103 §1; 2005 c.683 §9; 2009 c.830 §142]

 

      200.180 Emerging Small Business Account; uses. The Emerging Small Business Account is established within the State Highway Fund. The Emerging Small Business Account is an investment fund for purposes of ORS 293.701 to 293.857. Moneys in the account are continuously appropriated to the Department of Transportation for the purpose of assisting emerging small businesses under the plans recommended under ORS 200.160. Interest earnings on moneys in the account are credited to the account. [1991 c.517 §4; 1993 c.744 §189b; 2005 c.683 §10]

 

      200.190 Deposit of one percent of highway construction contract amount. The Department of Transportation, when undertaking a public improvement highway construction contract, shall deposit with the State Treasurer an amount equal to not more than one percent of the contract award amount. The State Treasurer shall credit the amount reserved to the Emerging Small Business Account established in the State Highway Fund. The deposit must be made within 30 days of the date on which the contract award is made. [1991 c.517 §5; 1993 c.744 §189c; 2005 c.683 §11]

 

      200.200 Security for performance by emerging small business. (1) When any requirement exists under ORS 279.835 to 279.855 or ORS chapter 279A, 279B or 279C to provide a surety bond or other security for the faithful performance of a public contract, an emerging small business may provide:

      (a) A surety bond issued by a corporate surety qualified by law to issue surety insurance as defined in ORS 731.186;

      (b) A stipulation or undertaking with one or more individual sureties; or

      (c) Any other form of security specified in the statute requiring the security.

      (2) When the security for the faithful performance of a public contract is in the form of a stipulation or undertaking with one or more individual sureties, the individual sureties must be residents of this state. The total net worth of all the individual sureties on the stipulation or undertaking must be at least twice the sum specified in the stipulation or undertaking. The public agency requiring the security shall determine if the sureties possess the qualifications prescribed by this subsection. [1991 c.517 §8; 2003 c.794 §217]

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