La. Admin. Code tit. 70 § XIX-121

Current through Register Vol. 50, No. 11, November 20, 2024

Section XIX-121 - Guidelines for Certification

A. Determination of Business Status

1. The CRT will first determine if the business is in existence, operational, and for profit. A business that is in the early stages of organization and not set up to do business, does not qualify. If the business is not yet operational, it is not eligible to participate as a SDBE and no further determinations need be made.

2. The business must provide more than prima facia evidence that it does not just exist on paper and was not organized merely in an attempt to take advantage of SDBE goals.

3. The minority owner(s) must possess the resources, license, if required by law, and expertise to operate in the business' field of work.

B. Determination of Business Size

1. Business size standards established by 13 Code of Federal Regulations, Part 121, as amended, will be applied to determine business size.

2. Necessary evidence to determine business size includes certified income tax statements and federal tax returns for the most recent three years as well as information regarding the business-owners, managers, and key personnel; location and ownership of facilities; source and size of work force and equipment; and the extent to which the business relies on other companies for services.

C. Determination of Social or Economic Disadvantage

1. Social disadvantage is evidenced by systematic exclusion, based solely upon racial, ethnic or cultural bias, from those opportunities and institutions which afford individuals the chance to improve and advance themselves. This includes the following:

a. evidence of educational discrimination in professional and business schools in comparison to educational opportunities available to individuals who are not members of the minority group;

b. evidence of employment discrimination suffered by the individual minority member in comparison to employment opportunities available to individuals who are not members of the minority group;

c. evidence of the kinds of businesses and business transactions in which group members are engaged in comparison to the kinds of businesses and business transactions engaged in by individuals who are not members of the minority group;

d. evidence of denial of access to organizations, groups, or professional societies whether in business or in school, based solely upon racial and/or ethnic considerations;

e. any other evidence of denial of opportunity or access to those things which would enable the individual to advance the quality of his life, available to individuals who are not members of the minority group.

2. Economic disadvantage is evidenced by an inability of the individual to compete in the industry due to impaired capital and credit opportunities. Evidence includes:

a. statistical profile outlining the income level and standard of living enjoyed by individuals who are members of the minority group in comparison to that enjoyed by individuals who are not minority group members;

b. availability of capital and credit to minority group members in comparison to that of individuals who are not minority group members;

c. availability of technical and managerial resources to minority group members in comparison to those available to individuals who are not minority group members;

d. any other evidence of impaired capital or credit opportunities.

D. Determination of Ownership and Control

1. An independent business is one that is not inextricably associated with another through ownership, affiliation, sharing of employees, facilities, profits and losses.

2. Factors which are reviewed to determine SDBE ownership and control include the date the business was established, adequacy of resources for the work involved, and the degree to which financial, equipment, leasing, business and other relationships with non-minority businesses vary from normal industry practice.

3. The SDBE applicant must be knowledgeable in all aspects of the business and must independently make daily operational decisions. Also, the SDBE applicant must demonstrate that he/she possesses the power to make independent and unilateral business decisions which guide the business. The applicant must have experience, technical competence, and must personally hold any license required by law, in the business' major area of work.

E. Determination of Commercially Useful Function

1. A commercially useful function is performed when a SDBE is responsible for execution of a distinct element of the work of a contract and carries out its responsibilities by actually managing, performing, and supervising the work involved in accordance with normal industry practice, except where such practices are inconsistent with these regulations or other directives issued by LA DOTD. The SDBE shall not relinquish control of the work. Likewise, the SDBE contractor/subcontractor must perform the work under contract and must receive payment proportionate to the work performed.

2. The SDBE must manage the contracted work. The management of the work must include but is not limited to scheduling work operations, ordering equipment and materials, preparing and submitting payrolls, reports, and forms, and hiring and firing employees including supervisory positions.

3. The SDBE must perform the work of its subcontract with its own forces. SDBE subcontractors are prohibited from further subcontracting any portion of an authorized subcontract.

4. The SDBE must supervise the daily operations of the work contracted. The SDBE owner may act as superintendent and directly supervise his/her employees or a skilled and knowledgeable superintendent/foreman employed and paid by the SDBE must directly supervise the SDBE's employees.

5. A SDBE manufacturer is performing a commercially useful function when all of the following criteria are met:

a. is an operational and functional business;

b. operates or maintains a factory or establishment;

c. produces on the premises the materials or supplies obtained by the contractor.

6. A SDBE regular dealer or supplier is performing a commercially useful function when all of the following categories are present:

a. is an operational and functional business;

b. owns, operates or maintains a store, warehouse or other establishment in which materials or supplies required for the performance of the contract are bought, kept in stock and regularly sold to the public in the usual course of business;

c. a dealer or supplier of bulk items must also own and/or operate distribution equipment.

La. Admin. Code tit. 70, § XIX-121

Promulgated by the Department of Transportation and Development, LR 19:507 (April 1993).

AUTHORITY NOTE: Promulgated in accordance with R.S. 48:234(C).