137-046-0210 Subcontracting to and Contracting with Emerging Small Businesses; Disqualification (1) For purposes of ORS 279A.105, a subcontractor certified under 200.055 as an emerging small business is located in or draws its workforce from economically distressed areas if: (a) Its principal place of business is located in an area designated as economically distressed under administrative rules adopted by the Oregon Business Development Department; or (b) The Contractor certifies in a Signed Writing to the Contracting Agency that a substantial number of the subcontractor's employees or subcontractors that will manufacture or provide the Goods or perform the Services or Personal Services under the Contract reside in an area designated as economically distressed under administrative rules adopted by the Oregon Business Development Department. For the purposes of making the foregoing determination, the Contracting Agency shall determine in each particular instance what proportion of a Contractor’s subcontractor's employees or subcontractors constitutes a substantial number. (2) Contracting Agencies shall include in each Solicitation Document a requirement that Offerors certify in their Offers, in a form prescribed by the Contracting Agency, that the Offeror has not discriminated, and will not discriminate, against a subcontractor in the awarding of a subcontract because the subcontractor is certified under ORS 200.055 as a disadvantaged business enterprise, a minority-owned business, a woman-owned business, an emerging small business, or a Veteran-owned business . (3) Disqualification. (a) A Contracting Agency may disqualify a Person from consideration for Award of the Contracting Agency's Contracts under ORS 200.065(5), or suspend a Person’s right to bid on or participate in any Contract under ORS 200.075(1), after providing the Person with notice and a reasonable opportunity to be heard in accordance with subsections (b) and (c) of this Section. (b) The Contracting Agency shall provide Written notice to the Person of a proposed Disqualification. The Contracting Agency shall deliver the Written notice by personal service or by registered or certified mail, return receipt requested. This notice shall: (A) State that the Contracting Agency intends to disqualify or suspend the Person; (B) Set forth the reasons for the Disqualification; (C) Include a statement of the Person's right to a hearing if requested in Writing within the time stated in the notice and that if the Contracting Agency does not receive the Person’s Written request for a hearing within the time stated, the Person shall have waived the right to a hearing; (D) Include a statement of the authority under which the hearing will be held; (E) Include a reference to the particular sections of the statutes and rules involved; (F) State the proposed Disqualification period; and (G) State that the Person may be represented by legal counsel. (c) Hearing. The Contracting Agency shall schedule a hearing upon the Contracting Agency’s receipt of the Person’s timely hearing request. Within a reasonable time prior to the hearing, the Contracting Agency shall notify the Person of the time and place of the hearing and provide information on the procedures, right of representation and other rights related to the conduct of the hearing. (d) Notice of Disqualification. The Contracting Agency shall provide Written notice of the Disqualification to the Person. The Contracting Agency shall deliver the Written notice by personal service or by registered or certified mail, return receipt requested. The notice shall contain: (A) The effective date and period of Disqualification; (B) The grounds for Disqualification; and (C) A statement of the Person’s appeal rights and applicable appeal deadlines. (4) Contract and Subcontract Conditions. If a Contracting Agency awards a Contract to an Offeror that has been determined to be responsible under ORS 200.005(8) and 200.045(3), or awards a Contract under ORS 279A.100: (a) The Contracting Agency must provide, as a material condition of the Contract: (A) That the Contractor must maintain its certification under ORS 200.055 throughout the term of the Contract and any extensions (if the Contracting Agency used the certification as a factor in or as a basis for the award of the Contract); (B) That the Contractor must promptly pay each subcontractor that is certified under ORS 200.055 in accordance with ORS 279B.220, or 279C.570 and ORS 279C.580, whichever apply to the Contract; (C) That the Contractor must include, in any subcontract the Contractor establishes in connection with the Contract, a provision that requires the subcontractor to maintain the subcontractor’s certification under ORS 200.055 throughout the term of the subcontract and any extensions (if the Contractor used the certification as a factor in or as a basis for the award of the subcontract); (D) That the Contracting Agency may require the Contractor to terminate a subcontract with a subcontractor that fails to maintain its certification under ORS 200.055 throughout the term of the subcontract and any extensions. (b) In the administration of Contracts that are subject to section (4) of this rule, the Contracting Agency must verify the Contractor’s and any subcontractor’s compliance with subsection (4)(a) of this rule. (c) Subparagraph (4)(a)(A) of this section does not apply to an emerging small business that ceases to qualify as a tier one firm or a tier two firm (as ORS 200.005 defines those terms) due to the growth in the business’s number of full-time equivalent employees or in average annual gross receipts during the term of the Contract. This section (4) does not apply to an emerging small business for which a certification under ORS 200.055 expires during the term of the Contract or any extensions. Statutory/Other Authority: ORS 279A.065 Statutes/Other Implemented: ORS 200.065, ORS 200.075, ORS 279A.065, ORS 279A.105, ORS 279A.110, OL 2015, ch 325 (HB 2716), OL 2015 & ch 565 (HB 3303) History: DOJ 24-2023, amend filed 12/22/2023, effective 01/01/2024 DOJ 18-2015, f. 12-31-15, cert. ef. 1-1-16 DOJ 15-2009, f. 12-1-09, cert. ef. 1-1-10 DOJ 20-2005, f. 12-27-05, cert. ef. 1-1-06 DOJ 11-2004, f. 9-1-04, cert. ef. 3-1-05