N.Y. Executive Law § 313: Opportunities for minority and women-owned business enterprises

* § 313. Opportunities for minority and women-owned business

enterprises. 1. Goals and requirements for agencies and contractors.

Each agency shall structure procurement procedures for contracts made

directly or indirectly to minority and women-owned business enterprises,

in accordance with the findings of the disparity study, consistent with

the purposes of this article, to attempt to achieve the recommended

results with regard to total annual statewide procurement in the

following industries:

(a) construction industry for certified minority-owned business

enterprises;

(b) construction industry for certified women-owned business

enterprises;

(c) construction related professional services industry for certified

minority-owned business enterprises;

(d) construction related professional services industry for certified

women-owned business enterprises;

(e) non-construction related services industry for certified

minority-owned business enterprises;

(f) non-construction related services industry for certified

women-owned business enterprises;

(g) commodities industry for certified minority-owned business

enterprises;

(h) commodities industry for certified women-owned business

enterprises;

(i) overall agency total dollar value of procurement for certified

minority-owned business enterprises;

(j) overall agency total dollar value of procurement for certified

women-owned business enterprises; and

(k) overall agency total dollar value of procurement for certified

minority, women-owned business enterprises.

1-a. The director shall ensure that each state agency has been

provided with an electronic copy of the disparity study.

1-b. Each agency shall develop and adopt agency-specific goals based

on the findings of the disparity study.

1-c. The goals set pursuant to subdivision one of this section shall

be consistent with the findings of the disparity study.

2. The director shall promulgate rules and regulations based on

subdivision one of this section and the findings of the disparity study

that provide measures and procedures to ensure that certified minority

and women-owned businesses shall be given the opportunity for maximum

feasible participation in the performance of state contracts and to

assist in the agency's identification of those state contracts for which

minority and women-owned certified businesses may best bid to actively

and affirmatively promote and assist their participation in the

performance of state contracts so as to facilitate the agency's

achievement of the maximum feasible portion of the goals for state

contracts to such businesses.

2-a. The director shall promulgate rules and regulations that will

accomplish the following:

(a) provide for the certification and decertification of minority and

women-owned business enterprises for all agencies through a single

process that meets applicable requirements;

(b) require that each contract solicitation document accompanying each

solicitation set forth the expected degree of minority and women-owned

business enterprise participation based, in part, on:

(i) the potential subcontract opportunities available in the prime

procurement contract;

(ii) the availability, as contained within the study, of certified

minority and women-owned business enterprises to respond competitively

to the potential subcontract opportunities as reflected in the

division's directory of certified minority and women-owned business

enterprises; and

(iii) the findings of the disparity study;

(c) require that each agency provide a current list of certified

minority business enterprises to each prospective contractor or direct

them to the division's directory of certified minority and women-owned

business enterprises for such purpose;

(d) allow a contractor that is a certified minority-owned or

women-owned business enterprise to use the work it performs to meet

requirements for use of certified minority-owned or women-owned business

enterprises as subcontractors;

(e) establish criteria for agencies to credit the participation of

minority and women-owned business enterprises towards the achievement of

the minority and women-owned business enterprise participation goals on

a state contract based on the commercially useful function provided by

each minority and women-owned business enterprise on the contract;

(f) provide for joint ventures, which a bidder may count toward

meeting its minority and women-owned business enterprise participation;

(g) consistent with subdivision six of this section, provide for

circumstances under which an agency may waive obligations of the

contractor relating to minority and women-owned business enterprise

participation;

(h) require that an agency verify that minority and women-owned

business enterprises listed in a successful bid are actually

participating to the extent listed in the project for which the bid was

submitted;

(i) provide for the collection of statistical data by each agency

concerning actual minority and women-owned business enterprise

participation;

(j) require each agency to consult the most current disparity study

when calculating agency-wide and contract specific participation goals

pursuant to this article; and

Such rules shall set forth the maximum personal net worth of a

minority group member or woman who may be relied upon to certify a

business as a minority-owned business enterprise or women-owned business

enterprise, and may establish different maximum levels of personal net

worth for minority group members and women on an industry-by-industry

basis for such industries as the director shall determine. Such

regulations relating to the classification of the industry-by-industry

personal net worth thresholds above the fifteen million dollar threshold

shall consider the personal net worth of the owners of both certified

and non-certified businesses, including but not limited to, prime

contractors and subcontractors, as well as any such other factors needed

to establish such thresholds. The provisions of the regulations

pertaining to personal net worth shall, to the extent practicable, be

implemented by June thirtieth, two thousand twenty and shall consider

adjustments for inflation annually on January first of the previous year

according to the consumer price index.

3. Solely for the purpose of providing the opportunity for meaningful

participation by certified businesses in the performance of state

contracts as provided in this section, state contracts shall include

leases of real property by a state agency to a lessee where: the terms

of such leases provide for the construction, demolition, replacement,

major repair or renovation of real property and improvements thereon by

such lessee; and the cost of such construction, demolition, replacement,

major repair or renovation of real property and improvements thereon

shall exceed the sum of one hundred thousand dollars. Reports to the

director pursuant to section three hundred fifteen of this article shall

include activities with respect to all such state contracts. Contracting

agencies shall include or require to be included with respect to state

contracts for the acquisition, construction, demolition, replacement,

major repair or renovation of real property and improvements thereon,

such provisions as may be necessary to effectuate the provisions of this

section in every bid specification and state contract, including, but

not limited to: (a) provisions requiring contractors to make a good

faith effort to solicit active participation by enterprises identified

in the directory of certified businesses; (b) requiring the parties to

agree as a condition of entering into such contract, to be bound by the

provisions of section three hundred sixteen of this article; and (c)

requiring the contractor to include the provisions set forth in

paragraphs (a) and (b) of this subdivision in every subcontract in a

manner that the provisions will be binding upon each subcontractor as to

work in connection with such contract. Provided, however, that no such

provisions shall be binding upon contractors or subcontractors in the

performance of work or the provision of services that are unrelated,

separate or distinct from the state contract as expressed by its terms,

and nothing in this section shall authorize the director or any

contracting agency to impose any requirement on a contractor or

subcontractor except with respect to a state contract.

4. In the implementation of this section, the contracting agency shall

(a) consult the findings contained within the disparity study evidencing

relevant industry specific disparities in the utilization of minority

and women-owned businesses relative to their availability;

(b) implement a program that will enable the agency to evaluate each

contract to determine the appropriate goal for participation by

minority-owned business enterprises and women-owned business

enterprises;

(c) consider where practicable, the severability of construction

projects and other bundled contracts; and

(d) consider compliance with the requirements of any federal law

concerning opportunities for minority and women-owned business

enterprises which effectuates the purpose of this section. The

contracting agency shall determine whether the imposition of the

requirements of any such law duplicate or conflict with the provisions

hereof and if such duplication or conflict exists, the contracting

agency shall waive the applicability of this section to the extent of

such duplication or conflict.

5. (a) Contracting agencies shall administer the rules and regulations

promulgated by the director in a good faith effort to achieve the

maximum feasible participation by minority and women owned business

enterprises adopted pursuant to this article and the regulations of the

director. Such rules and regulations: shall require a contractor to

submit a utilization plan after bids are opened, when bids are required,

but prior to the award of a state contract; shall require the

contracting agency to review the utilization plan submitted by the

contractor and to post the utilization plan and any waivers of

compliance issued pursuant to subdivision six of this section on the

website of the contracting agency; shall require the contracting agency

to notify the contractor in writing within a period of time specified by

the director as to any deficiencies contained in the contractor's

utilization plan; shall require remedy thereof within a period of time

specified by the director; shall require the contractor to submit

compliance reports relating to the operation and implementation of any

utilization plan; shall not allow any automatic waivers but shall allow

a contractor to apply for a partial or total waiver of the minority and

women-owned business enterprise participation requirements pursuant to

subdivisions six and seven of this section; shall allow a contractor to

file a complaint with the director pursuant to subdivision eight of this

section in the event a contracting agency has failed or refused to issue

a waiver of the minority and women-owned business enterprise

participation requirements or has denied such request for a waiver; and

shall allow a contracting agency to file a complaint with the director

pursuant to subdivision nine of this section in the event a contractor

is failing or has failed to comply with the minority and women-owned

business enterprise participation requirements set forth in the state

contract where no waiver has been granted.

(b) The rules and regulations promulgated pursuant to this subdivision

regarding a utilization plan shall provide that where enterprises have

been identified within a utilization plan, a contractor shall attempt,

in good faith, to utilize such enterprise at least to the extent

indicated. A contracting agency may require a contractor to indicate,

within a utilization plan, what measures and procedures he or she

intends to take to comply with the provisions of this article, but may

not require, as a condition of award of, or compliance with, a contract

that a contractor utilize a particular enterprise in performance of the

contract.

(c) The rules and regulations promulgated pursuant to this subdivision

regarding compliance reports shall provide that such reports shall

include a standardized prepayment declaration, to be completed before

each payment to a contractor, in which: (i) a representative of the

contractor lists any business that was or shall be relied upon for

credit toward minority and women-owned business enterprise participation

and states under penalty of perjury that such business or businesses

appeared on the division's directory of certified minority and

women-owned business enterprises at the time of contracting and that

each business performed or shall perform a commercially useful function

on the contract; and (ii) a representative of any business that was or

shall be relied upon for credit toward minority and women-owned business

enterprise participation states under penalty of perjury that it

appeared on the division's directory of certified minority and

women-owned business enterprises at the time of contracting and

performed or shall perform a commercially useful function on the

contract. Such standardized prepayment declarations shall be submitted

electronically on a centralized state registry designated by the

division prior to any payment to a contractor. The rules and regulations

promulgated pursuant to this subdivision may also require the contractor

or subcontractor to submit documentation, as needed, to support any

statements made in such standardized prepayment declarations.

(d) Without limiting other grounds for the disqualification of bids or

proposals on the basis of non-responsibility, a contracting agency may

disqualify the bid or proposal of a contractor as being non-responsible

for failure to remedy notified deficiencies contained in the

contractor's utilization plan within a period of time specified in

regulations promulgated by the director after receiving notification of

such deficiencies from the contracting agency. Where failure to remedy

any notified deficiency in the utilization plan is a ground for

disqualification, that issue and all other grounds for disqualification

shall be stated in writing by the contracting agency. Where the

contracting agency states that a failure to remedy any notified

deficiency in the utilization plan is a ground for disqualification the

contractor shall be entitled to an administrative hearing, on a record,

involving all grounds stated by the contracting agency. Such hearing

shall be conducted by the appropriate authority of the contracting

agency to review the determination of disqualification. A final

administrative determination made following such hearing shall be

reviewable in a proceeding commenced under article seventy-eight of the

civil practice law and rules, provided that such proceeding is commenced

within thirty days of the notice given by certified mail return receipt

requested rendering such final administrative determination. Such

proceeding shall be commenced in the supreme court, appellate division,

third department and such proceeding shall be preferred over all other

civil causes except election causes, and shall be heard and determined

in preference to all other civil business pending therein, except

election matters, irrespective of position on the calendar. Appeals

taken to the court of appeals of the state of New York shall be subject

to the same preference.

6. (a) Where it appears that a contractor cannot, after a good faith

effort, comply with the minority and women-owned business enterprise

participation requirements set forth in a particular state contract, a

contractor may file a written application with the contracting agency

requesting a partial or total waiver of such requirements setting forth

the reasons for such contractor's inability to meet any or all of the

participation requirements together with an explanation of the efforts

undertaken by the contractor to obtain the required minority and

women-owned business enterprise participation. In implementing the

provisions of this section, the contracting agency shall consider the

number and types of minority and women-owned business enterprises

available to provide goods or services required under the contract in

the region in which the state contract is to be performed, the total

dollar value of the state contract, the scope of work to be performed

and the project size and term. If, based on such considerations, the

contracting agency determines there is not a reasonable availability of

contractors on the list of certified business to furnish services for

the project, it shall issue a waiver of compliance to the contractor. In

making such determination, the contracting agency shall first consider

the availability of other business enterprises located in the region and

shall thereafter consider the financial ability of minority and

women-owned businesses located outside the region in which the contract

is to be performed to perform the state contract.

(b) Upon the issuance of all waivers of compliance as provided in

paragraph (a) of this subdivision, the contracting agency shall: (i)

report the issuance of the waiver to the director; and (ii) publish on

the contracting agency's website on a monthly basis, if practicable, but

no less than on a quarterly basis, in a location easily accessible to

the general public: (1) information identifying the contract, including

the value of the contract; (2) the name of the contractor receiving the

waiver; (3) the date of the waiver; (4) whether the waiver was a partial

or total waiver; and (5) the specific contract provisions to which the

waiver applies.

7. For purposes of determining a contractor's good faith effort to

comply with the requirements of this section or to be entitled to a

waiver therefrom the contracting agency shall consider:

(a) whether the contractor has advertised in general circulation

media, trade association publications, and minority-focus and

women-focus media and, in such event, (i) whether or not certified

minority or women-owned businesses which have been solicited by the

contractor exhibited interest in submitting proposals for a particular

project by attending, or having attended, a pre-bid conference, if any,

scheduled by the state agency awarding the state contract with certified

minority and women-owned business enterprises; and

(ii) whether certified businesses which have been solicited by the

contractor have responded in a timely fashion to the contractor's

solicitations for timely competitive bid quotations prior to the

contracting agency's bid date; and

(b) whether the contractor provided timely written notification of

subcontracting opportunities on the state contract to appropriate

certified businesses that appear in the directory of certified

businesses prepared pursuant to paragraph (f) of subdivision three of

section three hundred eleven of this article; and

(c) whether the contractor can reasonably structure the amount of work

to be performed under subcontracts in order to increase the likelihood

of participation by certified businesses.

8. In the event that a contracting agency fails or refuses to issue a

waiver to a contractor as requested within twenty days after having made

application therefor pursuant to subdivision six of this section or if

the contracting agency denies such application, in whole or in part, the

contractor may file a complaint with the director pursuant to section

three hundred sixteen of this article setting forth the facts and

circumstances giving rise to the contractor's complaint together with a

demand for relief. The contractor shall serve a copy of such complaint

upon the contracting agency by personal service or by certified mail,

return receipt requested. The contracting agency shall be afforded an

opportunity to respond to such complaint in writing.

9. If, after the review of a contractor's minority and women-owned

business utilization plan or review of a periodic compliance report and

after such contractor has been afforded an opportunity to respond to a

notice of deficiency issued by the contracting agency in connection

therewith, it appears that a contractor is failing or refusing to comply

with the minority and women-owned business participation requirements as

set forth in the state contract and where no waiver from such

requirements has been granted, the contracting agency may file a written

complaint with the director pursuant to section three hundred sixteen of

this article setting forth the facts and circumstances giving rise to

the contracting agency's complaint together with a demand for relief.

The contracting agency shall serve a copy of such complaint upon the

contractor by personal service or by certified mail, return receipt

requested. The contractor shall be afforded an opportunity to respond to

such complaint in writing.

* NB Repealed July 1, 2028