§ 58.412. Small diverse business program.
(a) Scope. The provisions of this subchapter shall apply to all procurements within the scope of this policy except for procurements for construction and design professional services.
(b) Purpose. To attain the SDB aspirational target, BDISBO, with the cooperation of the issuing agency, shall attempt to set, where required, contract-specific goals for SDB participation. Each contract-specific goal shall be expressed within the solicitation as a percentage of the dollar value of the contract.
(c) Waivers. Bidders or offerors may in all instances request a partial waiver or full waiver of a contract-specific goal for SDB participation, as set forth in § 58.415 (relating to good faith efforts waiver).
(d) Contract-specific goal setting.
(1) The BDISBO, with the cooperation of the issuing agency, shall assess the potential for an SDB prime contractor and subcontractor participation in each procurement and estimate the amount of participation if any before the solicitation is issued.
(2) In setting a contract-specific goal, the BDISBO and agencies:
(i) May not set a goal that solely relies on the Commonwealth’s overall aspirational target or any other jurisdiction’s overall percentage goal.
(ii) Must incorporate an analysis of all of the following:
(A) The potential subcontract opportunities available in the procurement, which shall include the provision of supplies or services.
(B) The availability percentages for those subcontract opportunities as derived from the Commonwealth’s most recent disparity study.
(C) The number of SDBs listed in the online searchable database of SDBs or otherwise identified as being certified to provide those subcontract opportunities.
(D) The availability of SDBs to respond competitively to the potential subcontract opportunities including geographical proximity, when relevant, and desired work location of SDBs identified under clause (C) to the location of the work to be performed.
(E) The feasibility of subcontracting opportunities given the nature and extent of the proposed contract.
(F) Participation of SDBs on past contracts of similar size, scope and location.
(G) Other factors that contribute to constitutional goal setting.
(e) Solicitation documentation.
(1) Each solicitation containing contract-specific goals for SDB participation shall contain those terms, conditions and forms related to SDB participation as required by the Department.
(2) When a contract-specific goal for SDB participation is set for a procurement, a bidder or offeror shall submit with its bid or proposal a completed SDB participation submittal. A bidder or offeror must indicate one of the following on the SDB participation submittal:
(i) Agreement to meet the contract-specific goal for SDB participation in full. In this instance, a bidder or offeror must provide an SDB utilization schedule which identifies how the bidder or offeror will meet the contract-specific goal.
(ii) Agreement to meet a portion of the contract-specific goal for SDB participation and request a partial waiver for the remainder of the contract-specific goal. In this instance, a bidder or offeror must provide an SDB utilization schedule which identifies how the bidder or offeror will meet a portion of the contract-specific goal and also provide documentation of the bidder or offeror’s good faith efforts waiver to meet the unmet portion of the contract-specific goal as set forth in § 58.415.
(iii) Request for a good faith efforts waiver from all of the contract-specific goals. In this instance, a bidder or offeror must provide documentation of the bidder or offeror’s good faith efforts to meet the contract-specific goals for SDB participation as set forth in § 58.415.
(3) The failure to complete and submit the SDB participation submittal and additional required documentation as set forth in the solicitation documents may result in a determination that the bid or proposal is not responsive.
(f) SDB subcontracting provisions.
(1) A bidder or offeror that is an SDB may satisfy a contract-specific goal for SDB participation through their own self-performance.
(2) When an SDB performs as a participant in a joint venture, the Commonwealth may count a portion of the total dollar value of the contract equal to the distinct, clearly defined portion of the work of the contract that the SDB performs with its own forces toward fulfilling the SDB participation goal, subject to the requirements of paragraph (4).
(3) Because the contract-specific goal for SDB participation is independent of any contract-specific goal for VBE participation, work performed by an SDB that is also a VBE can be used to meet both a contract-specific goal for SDB participation and a contract-specific goal for VBE participation through the same work.
(4) A contractor may only count dollar amounts actually paid to an SDB for performance of a commercially useful function towards satisfying its SDB participation commitments. In addition, the SDB subcontractor, through its own employees, must perform at least 50% of the amount of the subcontract.
(g) Contract requirements.
(1) A prime contractor’s commitments to meet contract-specific goals and to utilize SDBs listed within the SDB utilization schedule shall become contractual obligations of the prime contractor. A prime contractor’s failure to meet the SDB commitments may result in the imposition of sanctions as set forth in § 58.417(d) (relating to compliance with SDB and VBE commitments), 62 Pa.C.S. § 531 (relating to debarment or suspension) and any additional sanctions available under the contract.
(2) Solicitation documents completed and submitted by the selected bidder or offeror in connection with its SDB participation commitments including the SDB participation submittal, SDB utilization schedule and, if applicable, any documentation supporting a request for a good faith efforts waiver shall be made part of the contract.
(h) Subcontract requirements.
(1) The selected bidder or offeror and the SDBs that will be used to satisfy the selected bidder or offeror’s SDB commitments must enter a final, definitive subcontract agreement signed by the selected bidder or offeror and the SDB within the time frame specified in the solicitation document. The subcontract agreement must contain those items as specified in the solicitation document.
(2) If a subcontract agreement is required by the solicitation document but the selected bidder or offeror and the SDB listed on the SDB utilization schedule cannot agree upon a definitive subcontract within the required time frame specified in the solicitation, the selected bidder or offeror must provide written notification to the issuing agency and the BDISBO to assist with resolution.
(3) The prime contractor must provide a copy of any required subcontract with an SDB to the BDISBO or the agency within 10 business days of receiving the request.
Cross References This section cited in 4 Pa. Code § 58.414 (relating to veteran business enterprise program).
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