Section 25 IAC 5-3-6 - Other factors considered for certificationAuthority: IC 4-13-1-4; IC 4-13-1-7; IC 4-13-2-9; IC 4-13.6-3-1
Affected: IC 4-13-1; IC 4-13.6-4; IC 5-22
Sec. 6.
(a) The department will consider whether an enterprise performs a commercially useful function in making decisions about whether to certify an enterprise as an MBE or a WBE. Determination that an enterprise performs a commercially useful function will be made based on the following considerations: (1) An MBE or a WBE performs a commercially useful function when it is responsible for execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, the MBE or WBE must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself. To determine whether an MBE or a WBE is performing a commercially useful function, one must evaluate the following: (A) The amount of work subcontracted.(C) Whether the amount the enterprise is to be paid under the contract is commensurate with the work it is actually performing.(D) The credit claimed for its performance of the work.(E) Other relevant factors.(2) An MBE or a WBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of MBE or WBE participation. In determining whether an MBE or a WBE is such an extra participant, one must examine similar transactions, particularly those in which MBEs or WBEs do not participate.(3) In the case of construction contracts, if:(A) an MBE or a WBE does not perform or exercise responsibility for at least the agency's requisite percent of the total cost of its contract with its own workforce; or(B) the MBE or WBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved; it is presumed that the enterprise is not performing a commercially useful function.(b) The department may consider, in making certification decisions, whether an enterprise has exhibited a pattern of conduct indicating prior involvement in attempts to evade or subvert the intent or requirements of the MBE or WBE program.(c) The department shall evaluate the eligibility of an enterprise on the basis of present circumstances. It will not refuse to certify an enterprise based solely on historical information indicating a lack of ownership or control by qualifying members in the past, if the enterprise currently meets the ownership and control standards of this part.(d) The department will not require an MBE or a WBE enterprise to be: (2) certified under the division of public works; as a condition for certification. Standards for prequalification and certification are made under 105 IAC 11 and IC 4-13.6-4, respectively. However, if the prequalification (certification) is industry/trade-specific, the department will require all enterprises that participate in its contracts and subcontracts related to that area to be prequalified. (e) The applicant for MBE or WBE certification must possess reasonable prospects for success in competing in the public sector.(1) The department will deem an enterprise that has been in business for two (2) full years immediately before its date of application as possessing reasonable prospects for success in competing in the public sector if income tax returns for each of the two (2) previous tax years show operating revenues in the selected types of work for which the applicant is seeking certification.(2) The department may waive the two (2) years in business requirement if one (1) of the following conditions is met: (A) The qualifying member or members have demonstrated management experience.(B) The qualifying member or members have demonstrated technical experience to carry out the type of business for which certification is sought.(C) The qualifying member has a record of successful performance on contracts from governmental or nongovernmental sources in its primary area of certification.(D) The applicant for certification as an MBE or a WBE has demonstrated, or can demonstrate, its ability to timely obtain the personnel, facilities, equipment, and any other requirements needed to perform contracts.Indiana Department of Administration; 25 IAC 5-3-6; filed May 30, 2003, 11:00 a.m.: 26 IR 3302; filed Sep 16, 2005, 8:50 a.m.: 29 IR 453; readopted filed Oct 6, 2009, 9:04 a.m.: 20091104-IR-025090572RFAReadopted filed 12/2/2015, 2:41 p.m.: 20151230-IR-025150342RFAReadopted filed 10/19/2021, 9:13 a.m.: 20211117-IR-025210389RFA