§ 2–218.46. Performance and subcontracting requirements for construction and non-construction contracts; subcontracting plans.

(a)(1) All construction contracts for government-assisted projects in excess of $250,000 shall include the following requirements unless a waiver has been approved in accordance with § 2-218.51:

(A) At least 35% of the dollar volume of the contract shall be subcontracted to small business enterprises; or

(B) If there are insufficient qualified small business enterprises to completely fulfill the requirement of subparagraph (A) of this paragraph, then the subcontracting requirement may be satisfied by subcontracting 35% of the dollar volume to any qualified certified business enterprises; provided, that all reasonable efforts shall be made to ensure that qualified small business enterprises are significant participants in the overall subcontracting work.

(2) All non-construction contracts for government-assisted projects in excess of $250,000 shall include the following requirements unless a waiver has been approved in accordance with § 2-218.51:

(A) At least 35% of the dollar volume of the contract shall be subcontracted to small business enterprises; or

(3) For the purposes of this section, a business enterprise certified as a small business enterprise, local business enterprise, or disadvantaged business enterprise shall not have to comply with the requirements set forth in paragraphs (1) or (2) of this subsection.

(b)(1)(A) Each government-assisted construction and non-construction contract for which a certified business enterprise is selected as a beneficiary and is granted points or a price reduction pursuant to § 2-218.43 or is selected through a set-aside program under this subpart shall include a requirement that the certified business enterprise perform at least 35% of the contracting effort with its own organization and resources and, if it subcontracts, 35% of the subcontracted effort shall be with certified business enterprises.

(B) If the total contracting effort performed by the certified business enterprise is less than the amount required by subparagraph (A) of this paragraph, then the business enterprise shall be subject to enforcement pursuant to § 2-218.63.

(2)(A) Each government-assisted construction and non-construction contract for which a certified joint venture is selected as a beneficiary and is granted points or a price reduction pursuant to § 2-218.43 or is selected through a set-aside program under this subpart shall include a requirement that the certified business enterprise perform at least 50% of the contracting effort with its own organization and resources and, if it subcontracts, 35% of the subcontracted effort shall be with certified business enterprises.

(b-1) Each government-assisted construction and non-construction project for which a certified business enterprise is utilized to meet the subcontracting requirements pursuant to subsections (a) and (b) of this subsection shall include a requirement that the certified business enterprise perform at least 35% of the contracting effort with its own organization and resources.

(c) Each government-assisted construction and non-construction project of $1 million or less for which a certified business enterprise is selected as a beneficiary and is granted points or a price reduction pursuant to § 2-218.43 or is selected through a set-aside program under this subpart shall include a requirement that the certified business enterprise perform at least 50% of the on-site work with its own workforce.

(d)(1) Bids or proposals responding to a solicitation, including an open market solicitation, shall be deemed nonresponsive and shall be rejected if a subcontracting plan is required by law and the beneficiary fails to submit a plan that meets the criteria set forth in paragraph (2) of this subsection.

(2) A subcontracting plan shall include the following information:

(A) The name and address of each subcontractor;

(B) A current certification number of the small or certified business enterprise;

(D) The price to be paid by the beneficiary to each subcontractor.

(3) The subcontracting plan required by paragraph (2) of this subsection shall be provided before the District accepts the submission of the bid or proposal.

(d-1) Notwithstanding subsection (d) of this section, a design-build project shall not be required to identify specific subcontractors as a condition precedent to performing preconstruction services; provided, that a detailed subcontracting plan that meets the requirements of subsection (d) of this section shall be submitted before entering into a guaranteed maximum price or such other contractual action authorizing the contractor to commence construction.

(e) No beneficiary shall be allowed to amend the subcontracting plan filed as part of its bid or proposal except with the consent of the Director. Any reduction in the dollar volume of the subcontracted portion resulting from such amendment of the plan shall inure to the benefit of the District.

(f) No multiyear contracts or extended contracts which are not in compliance with this subchapter at the time of the contemplated exercise of the option or extension, shall be renewed or extended, and any such option or extension shall be void.

(g) The subcontracting requirements of this section may be waived pursuant to § 2-218.51.

(h) A beneficiary shall submit to the agency contracting officer, project manager, and Director copies of the executed contracts with the subcontracts identified in the subcontracting plan. Failure to submit copies of the executed contracts shall render the underlying contract voidable by the District.

(i)(1) A beneficiary shall provide a quarterly report to the Department, agency contracting officer, and project manager. The quarterly report shall include the following information for each subcontract with a subcontractor identified in the subcontracting plan:

(A) The price to be paid by the beneficiary to the subcontractor under the subcontract;

(B) A description of the goods procured or the services subcontracted for;

(D) A copy of the fully executed subcontract, if the fully executed subcontract was not provided in a prior quarterly report.

(2) If the fully executed subcontract is not included with a quarterly report, the beneficiary shall not receive credit toward the subcontracting requirements of this section for that subcontract.

(j)(1) The beneficiary shall meet on an annual basis with the Department, agency contracting officer, and project manager to provide an update of the subcontracting plan for utilization of small business enterprises and certified business enterprises.

(2) The beneficiary shall be given a 30-day written notice of the meeting by the Department.

(k) The beneficiary shall provide written notice to the Department upon the initiation and completion of a project.

(l) If a certified business enterprise or certified joint venture is the beneficiary and must meet the subcontracting requirements as set forth in this section, it shall fulfill the requirements of subsections (h), (i), (j), and (k) of this section.

(m) A beneficiary, certified business enterprise, or member of a certified joint venture that fails to meet the requirements of this section shall be subject to the penalties set forth in § 2-218.63.

(n) With regard to government-assisted projects, the obligations under this section shall expire upon completion of the development or other activity that serves as the basis for such activity qualifying as a government-assisted project; provided, that the Mayor shall have the authority to negotiate any extensions under this section in the transaction documents that qualify an activity as a government-assisted project.

(Oct. 20, 2005, D.C. Law 16-33, § 2346, 52 DCR 7503; Mar. 2, 2007, D.C. Law 16-192, § 2132(e), 53 DCR 6899; July 18, 2008, D.C. Law 17-207, § 2(i), 55 DCR 6107; Apr. 20, 2010, D.C. Law 18-141, § 2(i), 57 DCR 1485; May 27, 2010, D.C. Law 18-159, § 2(b), 57 DCR 3006; Sept. 26, 2012, D.C. Law 19-171, § 12(c), 59 DCR 6190; June 10, 2014, D.C. Law 20-108, § 2(x), 61 DCR 3892; Dec. 13, 2017, D.C. Law 22-33, § 1103(a), 64 DCR 7652.)

Section References

This section is referenced in § 2-218.12, § 2-218.51, § 47-4652, and § 47-4656.

Effect of Amendments

D.C. Law 16-192, in the section heading, inserted “and non-construction” following “construction”; added subsec. (a)(3); in subsec. (e), substituted “dollar volume” for “dollar value”; and added subsec. (h).

D.C. Law 17-207 rewrote subsec. (a); and, in subsecs. (b), (c), and (d), substituted “certified” for “small, local, or disadvantaged”.

D.C. Law 18-141, in subsec. (a)(2), substituted “excess of $250, 000, unless a waiver has been approved by the Office of Contracting and Procurement,” for “which a portion of the work is subcontracted”; added subsec. (a)(3); in subsec. (d), substituted “the law requires subcontracting” for “the solicitation requires submission of a certified business enterprise subcontracting plan”; and added subsec. (i).

D.C. Law 18-159, in subsec. (i), substituted “each contractor or beneficiary shall provide a copy of the contract,” for “each developer or beneficiary shall provide a copy of the certified business agreement,”.

The 2012 amendment by D.C. Law 19-171 substituted “contractor” for “developer” in the second sentence of the introductory language of (i).

The 2014 amendment by D.C. Law 20-108, in the introductory paragraph of (a)(1), substituted “contracts for government-assisted projects in” for “contracts in” and added “unless a waiver has been approved in accordance with § 2-218.51”; rewrote (a)(1)(A); substituted “qualified certified” for “certified” in (a)(1)(B); rewrote (a)(2), (b)(1)(A), (b)(1)(B), (b)(2)(A) and (b)(2)(B); added (b-1); rewrote (c) and (d); added (d-1); in (e), substituted “beneficiary” for “prime contractor” and deleted “the contracting officer and” preceding “the Director”; deleted “in which the options or extensions exceed $1 million in value” following “extended contracts” in (f); substituted “beneficiary shall submit to the agency contracting officer, project manager, District of Columbia Auditor, and” for “prime contractor shall submit to the contracting officer and the” in (h); rewrote (i); and added (j), (k), (l), (m), and (n).

Emergency Legislation

For temporary (90 days) amendment of this section, see § 1103(a) of Fiscal Year 2018 Budget Support Congressional Review Emergency Act of 2017 (D.C. Act 22-167, Oct. 24, 2017, 64 DCR 10802).

For temporary (90 days) amendment of this section, see § 1103(a) of Fiscal Year 2018 Budget Support Emergency Act of 2017 (D.C. Act 22-104, July 20, 2017, 64 DCR 7032).

For temporary (90 day) addition, see § 2346 of Fiscal Year 2006 Budget Support Emergency Act of 2005 (D.C. Act 16-168, July 26, 2005, 52 DCR 7667).

For temporary (90 day) amendment of section, see § 2(a) of Department of Small and Local Business Development Clarification Emergency Act of 2005 (D.C. Act 16-191, October 28, 2005, 52 DCR 10026).

For temporary (90 day) amendment of section, see § 2(a) of Department of Small and Local Business Development Clarification Congressional Review Emergency Act of 2006 (D.C. Act 16-301, February 27, 2006, 53 DCR 1883).

For temporary (90 day) amendment of section, see § 2132(e) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068).

For temporary (90 day) amendment of section, see § 2132(e) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845).

For temporary (90 day) amendment of section, see § 2(d) of Department of Small and Local Business Development Subcontracting Clarification Emergency Amendment Act of 2006 (D.C. Act 16-513, October 25, 2006, 53 DCR 9091).

For temporary (90 day) amendment of section, see § 2(d) of Department of Small and Local Business Development Subcontracting Clarification Congressional Review Emergency Amendment Act of 2006 (D.C. Act 16-575, December 19, 2006, 54 DCR 24).

For temporary (90 day) amendment of section, see § 2132(e) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165).

For temporary (90 day) amendment of section, see § 2(i) of Department of Small and Local Business Development Subcontracting Clarification, Benefit Expansion, and Grant-making Authority Emergency Amendment Act of 2007 (D.C. Act 17-156, October 18, 2007, 54 DCR 10919).

For temporary (90 day) amendment of section, see § 2(i) of Department of Small and Local Business Development Subcontracting Clarification, Benefit Expansion, and Grant-making Authority Congressional Review Emergency Amendment Act of 2008 (D.C. Act 17-251, January 23, 2008, 55 DCR 1259).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).

Temporary Legislation

For temporary (225 day) amendment of section, see § 2(a) of Department of Small and Local Business Development Clarification Temporary Amendment Act of 2005 (D.C. Law 16-49, February. 9, 2006, law notification 53 DCR 1457).

For temporary (225 day) amendment of section, see § 2(d) of the Department of Small and Local Business Development Subcontracting Clarification Temporary Amendment Act of 2006 (D.C. Law 16-214, March 6, 2007, law notification 54 DCR 2761).

For temporary (225 day) amendment of section, see § 2(i) of the Department of Small and Local Business Development Subcontracting Clarification, Benefit Expansion, and Grant-making Authority Temporary Amendment Act of 2007 (D.C. Law 17-96, January 29, 2008, law notification 55 DCR 3403).

Editor's Notes

Applicability of D.C. Law 20-108: Section 4(a) of D.C. Law 20-108 provided that applications pending as of June 10, 2014, shall not be subject to the provisions of the act.

Section 4(b) of D.C. Law 20-108 provided that, except as provided in § 2-218.46(f), contracts existing or pending as of June 10, 2014, shall not be affected by the provisions of the act.

Section 4(c) of D.C. Law 20-108 provided that the act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan, as certified by the Chief Financial Officer to the Budget Director of the Council in a certification published by the Council in the District of Columbia Register.

Section 4(c) of D.C. Law 20-108 was repealed by D.C. Law 20-155, § 7005.