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Small Diverse Business Construction FAQs

What is the Small Diverse Business Program?

The Small Diverse Business program is intended to ensure that open and equitable contracting practices are utilized in construction activities to promote the solicitation and utilization of Minority, Women, Veteran, Service Disabled Veteran, Disability-Owned, and LGBT Business Enterprises subcontractors, manufacturers, and suppliers (together referred to hereafter as “Small Diverse Businesses” or SDB) on applicable Commonwealth construction projects.

Must the bidder submit any information regarding the Small Diverse Business Program at bid submittal?

No. The contractor is required to address the project Small Diverse Business MPLs after “Notice of Award” and receipt of contract by completing Article 9 “Small Diverse Business Participation” on the standard form of contract and submitting within the provided time period.

Must the contractor submit a Small Diverse Business Utilization Report regardless of its selected option (Opt-in or Provide Good Faith Efforts) via the Small Diverse Business Participation form?

Yes. The contractor must submit a Small Diverse Business Utilization Report (SDBUR) with each project Application for Payment, regardless of the chosen option (Opt-In or Provide Good Faith Effort).

Will the commonwealth accept an Application for Payment and pay a contractor for the payment application if it is submitted without a Small Diverse Business Utilization Report?

No. The commonwealth will not accept an Application for Payment or pay a contractor for payment applications submitted without a completed SDBUR.

When must the contractor begin submitting the Small Diverse Business Utilization Report (SDBUR)?

A contractor must submit its first SDBUR within the first full month after the initial job conference or with the first Application for Payment, whichever is earlier. Thereafter, an up to date SDBUR must be submitted with every Application for Payment or as requested by the department.

When must contractors selecting the “Opt-In” option regarding the Small Diverse Business Minimum Participation Level (MPL) achieve the commonwealth established MPL?

Contractors selecting the “Opt In” option must meet or exceed the project Small Diverse Business MPLs by the Project Close Out Inspection.

Must contractors selecting the “Good Faith Efforts” option submit Good Faith Effort Minimum Documentary Evidence with each application for payment?

No. Contractors selecting the “Good Faith Efforts” option are not required to submit “Good Faith Effort Minimum Documentary Evidence” with each Application for Payment, but instead are required to submit this information within 10 Calendar Days from the date in which it receives DGS’s request for such information. This information must be maintained by the contractor and made available in accordance with the commonwealth’s request as outlined.

Are there enforceable sanctions for contractors that select the “Good Faith Efforts” option, but do not provide DGS with requested “Good Faith Efforts Minimum Documentary Evidence” within the required time frame specified within the program guidelines?

Yes. Non-compliant contractors are subject to a non-compliance entry and placement into the commonwealth's Contractor Responsibility Program (CRP) and/or may be deemed in breach of contract.

Must a contractor secure a minimum level of Small Diverse Business Participation within any one of the available Small Diverse Business designations?

No. Contractors selecting the “Opt-In” option may achieve the project Small Diverse Business MPLs through any combination of commitments to Small Diverse Businesses; Minority Business Enterprise, Woman Business Enterprise, Veteran Business Enterprise, Service Disabled Veteran Business Enterprise, Disability-Owned Business Enterprise, and/or LGBT Business Enterprise.

If the Good Faith Effort option was chosen, must a contractor commit to Small Diverse Businesses from which it has received quotes in relation to a subcontract or purchase order opportunity?

No. However, in such instances where subcontracts and/or purchase orders are not committed to Small Diverse Businesses, the contractor must document evidence that such non-commitments were a result of the SDBs capability or price.

In regard to the content of the Small Diverse Business Utilization Report must contractors provide information on their self- performed work?

Yes. The contractor must provide detailed information regarding any work that is to be self-performed by the contractor and therefore not eligible for subcontracting to a Small Diverse Business.

May a contractor receive credit for commitments to Small Diverse Businesses that are not considered commonwealth Small Diverse Businesses at the time the subcontract or purchase order is executed with the Small Diverse Business?

No. In order to receive credit towards the Small Diverse Business MPLs, the Small Diverse Businesses must submit to the contractor a copy of their current commonwealth Small Diverse Business Certificate. The certificate must be current as of the subcontract/ purchase order execution date, not revoked, lapsed or pending.

Do contractors receive the same level of credit towards project MPLs for commitments to small diverse business subcontractors, manufacturers, stocking suppliers, and non-stocking suppliers?

No. Subcontractors and manufacturers commitments are valued at 100 percent of the dollar value of the subcontract/purchase order. Stocking Supplier commitments are valued at 60 percent of the dollar value of the stocking supplier subcontract/purchase order and Non-Stocking Supplier commitments are valued at and can count only the “Fee or Commission” charged by the non-stocking Small Diverse Business supplier so long as the non-stocking supplier provides a useful business function by engaging in meaningful work (that is, negotiating price; determining quality and quantity; ordering materials; and paying for the materials).

Does a commonwealth small diverse business contractor that is awarded a contract as the prime receive credit towards the SDB MPLs as a result of their small diverse business designation?

No. No credit towards the project SDB MPLs is granted for Small Diverse Businesses awarded prime contracts for which the Small Diverse Business program applies. Such contractors must address the Small Diverse Business MPL as any other Non-Small Diverse Business must.