State Codes and Statutes
Statutes > Connecticut > Title4a > Chap058 > Sec4a-60gSec. 4a-60g. (Formerly Sec. 32-9e). Set-aside program for small contractors, minority business enterprises, individuals with disabilities and nonprofit corporations. Exceptions. (a) As used in this section and sections 4a-60h to 4a-60j, inclusive, the following terms have the following meanings:
(1) "Small contractor" means any contractor, subcontractor, manufacturer or service company (A) that has been doing business under the same ownership or management and has maintained its principal place of business in the state, for a period of at least one year immediately prior to the date of application for certification under this section, (B) that had gross revenues not exceeding fifteen million dollars in the most recently completed fiscal year prior to such application, and (C) at least fifty-one per cent of the ownership of which is held by a person or persons who exercise operational authority over the daily affairs of the business and have the power to direct the management and policies and receive the beneficial interests of the business, except that a nonprofit corporation shall be construed to be a small contractor if such nonprofit corporation meets the requirements of subparagraphs (A) and (B) of this subdivision.
(2) "State agency" means each state board, commission, department, office, institution, council or other agency with the power to contract for goods or services itself or through its head.
(3) "Minority business enterprise" means any small contractor (A) fifty-one per cent or more of the capital stock, if any, or assets of which are owned by a person or persons (i) who exercise operational authority over the daily affairs of the enterprise, (ii) who have the power to direct the management and policies and receive the beneficial interest of the enterprise, and (iii) who are members of a minority, as such term is defined in subsection (a) of section 32-9n, (B) who is an individual with a disability, or (C) which is a nonprofit corporation in which fifty-one per cent or more of the persons who (i) exercise operational authority over the enterprise, and (ii) have the power to direct the management and policies of the enterprise are members of a minority, as defined in this subsection, or are individuals with a disability.
(4) "Affiliated" means the relationship in which a person directly, or indirectly through one or more intermediaries, controls, is controlled by or is under common control with another person.
(5) "Control" means the power to direct or cause the direction of the management and policies of any person, whether through the ownership of voting securities, by contract or through any other direct or indirect means. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, twenty per cent or more of any voting securities of another person.
(6) "Person" means any individual, corporation, limited liability company, partnership, association, joint stock company, business trust, unincorporated organization or other entity.
(7) "Individual with a disability" means an individual (A) having a physical or mental impairment that substantially limits one or more of the major life activities of the individual, or (B) having a record of such an impairment.
(8) "Nonprofit corporation" means a nonprofit corporation incorporated pursuant to chapter 602 or any predecessor statutes thereto.
(b) It is found and determined that there is a serious need to help small contractors, minority business enterprises, nonprofit organizations and individuals with disabilities to be considered for and awarded state contracts for the construction, reconstruction or rehabilitation of public buildings, the construction and maintenance of highways and the purchase of goods and services. Accordingly, the necessity, in the public interest and for the public benefit and good, of the provisions of this section, sections 4a-60h to 4a-60j, inclusive, and sections 32-9i to 32-9p, inclusive, is declared as a matter of legislative determination. Notwithstanding any provisions of the general statutes to the contrary, and except as set forth herein, the head of each state agency and each political subdivision of the state other than a municipality shall set aside in each fiscal year, for award to small contractors, on the basis of competitive bidding procedures, contracts or portions of contracts for the construction, reconstruction or rehabilitation of public buildings, the construction and maintenance of highways and the purchase of goods and services. Eligibility of nonprofit corporations under the provisions of this section shall be limited to predevelopment contracts awarded by the Commissioner of Economic and Community Development for housing projects. The total value of such contracts or portions thereof to be set aside by each such agency shall be at least twenty-five per cent of the total value of all contracts let by the head of such agency in each fiscal year, provided that neither: (1) A contract that may not be set aside due to a conflict with a federal law or regulation; or (2) a contract for any goods or services which have been determined by the Commissioner of Administrative Services to be not customarily available from or supplied by small contractors shall be included. Contracts or portions thereof having a value of not less than twenty-five per cent of the total value of all contracts or portions thereof to be set aside shall be reserved for awards to minority business enterprises.
(c) The head of any state agency or political subdivision of the state other than a municipality may, in lieu of setting aside any contract or portions thereof, require any general or trade contractor or any other entity authorized by such agency to award contracts, to set aside a portion of any contract for subcontractors who are eligible for set-aside contracts under this section. Nothing in this subsection shall be construed to diminish the total value of contracts which are required to be set aside by any state agency or political subdivision of the state other than a municipality pursuant to this section.
(d) The heads of all state agencies and of each political subdivision of the state other than a municipality shall notify the Commissioner of Administrative Services of all contracts to be set aside pursuant to subsection (b) or (c) of this section at the time that bid documents for such contracts are made available to potential contractors.
(e) The awarding authority shall require that a contractor or subcontractor awarded a contract or a portion of a contract under this section perform not less than fifteen per cent of the work with the workforces of such contractor or subcontractor and shall require that not less than twenty-five per cent of the work be performed by contractors or subcontractors eligible for awards under this section. A contractor awarded a contract or a portion of a contract under this section shall not subcontract with any person with whom the contractor is affiliated. No person who is affiliated with another person shall be eligible for awards under this section if both affiliated persons considered together would not qualify as a small contractor or a minority business enterprise under subsection (a) of this section. The awarding authority shall require that a contractor awarded a contract pursuant to this section submit, in writing, an explanation of any subcontract to such contract that is entered into with any person that is not eligible for the award of a contract pursuant to this section, prior to the performance of any work pursuant to such subcontract.
(f) The awarding authority may require that a contractor or subcontractor awarded a contract or a portion of a contract under this section furnish the following documentation: (1) A copy of the certificate of incorporation, certificate of limited partnership, partnership agreement or other organizational documents of the contractor or subcontractor; (2) a copy of federal income tax returns filed by the contractor or subcontractor for the previous year; and (3) evidence of payment of fair market value for the purchase or lease by the contractor or subcontractor of property or equipment from another contractor who is not eligible for set-aside contracts under this section.
(g) The awarding authority or the Commissioner of Administrative Services or the Commission on Human Rights and Opportunities may conduct an audit of the financial, corporate and business records and conduct an investigation of any small contractor or minority business enterprise which applies for or is awarded a set-aside contract for the purpose of determining eligibility for awards or compliance with the requirements established under this section.
(h) The provisions of this section shall not apply to any state agency or political subdivision of the state other than a municipality for which the total value of all contracts or portions of contracts of the types enumerated in subsection (b) of this section is anticipated to be equal to ten thousand dollars or less.
(i) In lieu of a performance, bid, labor and materials or other required bond, a contractor or subcontractor awarded a contract under this section may provide to the awarding authority, and the awarding authority shall accept a letter of credit. Any such letter of credit shall be in an amount equal to ten per cent of the contract for any contract that is less than one hundred thousand dollars and in an amount equal to twenty-five per cent of the contract for any contract that exceeds one hundred thousand dollars.
(j) (1) Whenever the awarding authority has reason to believe that any contractor or subcontractor awarded a set-aside contract has wilfully violated any provision of this section, the awarding authority shall send a notice to such contractor or subcontractor by certified mail, return receipt requested. Such notice shall include: (A) A reference to the provision alleged to be violated; (B) a short and plain statement of the matter asserted; (C) the maximum civil penalty that may be imposed for such violation; and (D) the time and place for the hearing. Such hearing shall be fixed for a date not earlier than fourteen days after the notice is mailed. The awarding authority shall send a copy of such notice to the Commission on Human Rights and Opportunities.
(2) The awarding authority shall hold a hearing on the violation asserted unless such contractor or subcontractor fails to appear. The hearing shall be held in accordance with the provisions of chapter 54. If, after the hearing, the awarding authority finds that the contractor or subcontractor has wilfully violated any provision of this section, the awarding authority shall suspend all set-aside contract payments to the contractor or subcontractor and may, in its discretion, order that a civil penalty not exceeding ten thousand dollars per violation be imposed on the contractor or subcontractor. If such contractor or subcontractor fails to appear for the hearing, the awarding authority may, as the facts require, order that a civil penalty not exceeding ten thousand dollars per violation be imposed on the contractor or subcontractor. The awarding authority shall send a copy of any order issued pursuant to this subsection by certified mail, return receipt requested, to the contractor or subcontractor named in such order. The awarding authority may cause proceedings to be instituted by the Attorney General for the enforcement of any order imposing a civil penalty issued under this subsection.
(k) On or before January 1, 2000, the Commissioner of Administrative Services shall establish a process for certification of small contractors and minority business enterprises as eligible for set-aside contracts. Each certification shall be valid for a period not to exceed two years. Any paper application for certification shall be no longer than six pages. The Department of Administrative Services shall maintain on its web site an updated directory of small contractors and minority business enterprises certified under this section.
(l) On or before August 30, 2007, and annually thereafter, each state agency and each political subdivision of the state other than a municipality setting aside contracts or portions of contracts shall prepare a report establishing small and minority business set-aside program goals for the twelve-month period beginning July first in the same year. Each such report shall be submitted to the Commissioner of Administrative Services, the Commission on Human Rights and Opportunities and the cochairpersons and ranking members of the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and government administration and elections.
(m) On or before November 1, 1995, and quarterly thereafter, each state agency and each political subdivision of the state other than a municipality setting aside contracts or portions of contracts shall prepare a status report on the implementation and results of its small business and minority business enterprise set-aside program goals during the three-month period ending one month before the due date for the report. Each report shall be submitted to the Commissioner of Administrative Services and the Commission on Human Rights and Opportunities. Any state agency or political subdivision of the state, other than a municipality, that achieves less than fifty per cent of its small contractor and minority business enterprise set-aside program goals by the end of the second reporting period in any twelve-month period beginning on July first shall provide a written explanation to the Commissioner of Administrative Services and the Commission on Human Rights and Opportunities detailing how the agency or political subdivision will achieve its goals in the final reporting period. The Commission on Human Rights and Opportunities shall: (1) Monitor the achievement of the annual goals established by each state agency and political subdivision of the state other than a municipality; and (2) prepare a quarterly report concerning such goal achievement. The report shall be submitted to each state agency that submitted a report, the Commissioner of Economic and Community Development, the Commissioner of Administrative Services and the cochairpersons and ranking members of the joint standing committees of the General Assembly having cognizance of matters relating to planning and development and government administration and elections. Failure by any state agency or political subdivision of the state other than a municipality to submit any reports required by this section shall be a violation of section 46a-77.
(n) On or before January 1, 2000, and annually thereafter, the Department of Administrative Services shall establish a precertification list of small contractors and minority business enterprises who have established a principal place of business in the state but have not maintained such place of business for one year and are not in the directory prepared pursuant to subsection (k) of this section. An awarding agency may select a small contractor or minority business enterprise from such precertification list only after such awarding agency makes a good faith effort to find an eligible small contractor or minority business enterprise in the directory and determines that no small contractor or minority business enterprise is qualified to perform the work required under the contract.
(o) Nothing in this section shall be construed to apply to the four janitorial contracts awarded pursuant to subsections (b) to (e), inclusive, of section 4a-82.
(P.A. 76-185, S. 1; P.A. 77-425, S. 1; 77-614, S. 73, 135, 284, 587, 610; P.A. 79-631, S. 11, 111; P.A. 82-358, S. 3, 10; P.A. 83-390, S. 1; P.A. 84-412, S. 7, 8; P.A. 85-364; 85-370, S. 1, 2; P.A. 87-577, S. 1, 5; P.A. 88-351, S. 11, 16; P.A. 90-253, S. 1, 4; P.A. 92-189, S. 2; P.A. 93-359; 93-409, S. 1; P.A. 95-79, S. 119, 189; 95-250, S. 1; 95-334, S. 6-8, 13; P.A. 96-211, S. 1, 5, 6; 96-256, S. 187, 209; P.A. 99-233, S. 1, 7; P.A. 00-199, S. 1, 3; P.A. 01-195, S. 101-103, 181; P.A. 06-129, S. 7; June Sp. Sess. P.A. 07-4, S. 65, 66.)
History: P.A. 77-425 replaced references to "departments" with references to "commissioners" throughout section and included director of purchases, amended Subsec. (a) to add exception re conflict with federal law to make set-aside duty mandatory rather than optional, to include contracts for purchase of supplies, materials, equipment or contractual services, to specify minimum set-aside percentage of 15% and to clarify method of calculation and amended Subsec. (c) to change contract value limit from $250,000 to $500,000 and to substitute "fiscal" for "calendar" year; P.A. 77-614 replaced commissioner of public works and director of purchases with commissioner of administrative services and, effective January 1, 1979, replaced commissioner of commerce with commissioner of economic development; P.A. 79-631 substituted reference to Sec. 32-23o for reference to Sec. 8-168(e) in Subsec. (e); P.A. 82-358 amended Subsec. (b) to require that contracts or portions of them valued at 25% of the total contract value be reserved for minority business enterprises; P.A. 83-390 added new Subsec. (a) containing definitions and amended Subsecs. (b) to (d), inclusive, relative to procedures and limits of set aside program; P.A. 84-412 included political subdivisions of the state other than municipalities, amended Subsec. (b) to read "the head of each state agency" rather than "the heads of all state agencies," inserted Subsec. (c) concerning set asides by general contractors and Subsec. (f) concerning an exemption for certain agencies and political subdivisions, relettering previously existing Subsecs. as necessary; P.A. 85-364 inserted new Subsec. (f) awarding authority to require a contractor or subcontractor to perform not less than 15% of the work with his own forces and requiring at least 25% of the work to be performed by contractors or subcontractors, relettering remaining Subsecs. accordingly; P.A. 85-370 amended Subsec. (b) to insert provision allowing set-aside based on current year if average presents an extremely high or low range; P.A. 87-577 amended Subsec. (a) by adding subparagraph lettering, substituting $3,000,000 for $1,500,000 and adding requirement that at least 51% ownership be held by persons active in the affairs of the business in the definition of "small contractor" and redefining "minority business enterprise" to delete requirements that majority holder of stock or assets be active in daily affairs of the enterprise and have power to direct management and policies of enterprise, amended Subsec. (e) by substituting $1,500,000 for $750,000, amended Subsec. (f) by making mandatory the requirement that party awarded contract perform not less than 15% of work with own forces and added prohibition on subcontracting with business having interlocking ownership, management or employees, redesignated existing Subsec. (g) as Subsec. (i) and added new Subsecs. (g), (h) and (j) re required documentation, audits and procedures and penalties when section provisions are violated; P.A. 88-351 redefined "minority business enterprise" to require minority owners to be active in daily affairs of enterprise and to have power to direct management and policies, required total value of set-aside contracts to be at least 25% of average of total value of all contracts, deleting prior minimum of 15% in Subsec. (b), amended Subsec. (c) to specify applicability to "trade" contractor "or other entity authorized by such agency to award contracts", and amended Subsec. (b) to permit commission on human rights and opportunities to conduct audit of financial records; P.A. 90-253 amended Subsec. (a) by adding definitions of "affiliated", "control" and "person", amended Subsec. (f) by deleting provisions re interlocking ownership, management or employees and adding provisions re subcontracting with affiliates and eligibility of affiliated persons for contract awards, and amended Subsec. (h) by adding provisions re audit of corporate and business records and investigations; P.A. 92-189 amended Subsec. (a) by adding any small contractor "who is an individual with a disability" to definition of "minority business enterprise" in Subdiv. (3) and adding Subdiv. (7) defining "individual with a disability"; P.A. 93-359 amended Subsec. (a) to redefine "small contractor" and "minority business enterprise" to include certain nonprofit corporations and to add a definition of "nonprofit corporation" and amended Subsec. (b) to limit eligibility of nonprofit corporations to predevelopment contracts awarded by the commissioner of housing; P.A. 93-409 redefined "small contractor" to raise maximum gross revenues from $3,000,000 to $10,000,000, amended Subsec. (e) by increasing the maximum contract award from $1,500,000 to $10,000,000, inserted new Subsec. (j) concerning a letter of credit, relettering former Subsec. (j) as (k), and added new Subsecs. (l) to (n), inclusive, re establishment by economic development commissioner of a certification process, re annual reports and re status reports, respectively; P.A. 95-79 amended Subsec. (a) to redefine "person" to include a limited liability company, effective May 31, 1995; P.A. 95-250 and P.A. 96-211 replaced Commissioner and Department of Economic Development and Commissioner and Department of Housing with Commissioner and Department of Economic and Community Development; P.A. 95-334 amended Subsec. (a) to redefine "small contractor" by inserting "under the same ownership and management" and "immediately", amended Subsec. (j) by inserting reference to "bid, labor and materials or other required" bonds, amended Subsec. (m) by changing reporting deadline from July first to September thirtieth, annually, and amended Subsec. (n) by changing reporting deadline from October first to November first, quarterly, and requiring that reports be submitted to Commission on Human Rights and Opportunities, effective July 13, 1995; P.A. 96-256 amended definition of "nonprofit corporation" in Subsec. (a) by replacing reference to "chapter 600" with "chapter 602 or any predecessor statutes thereto", effective January 1, 1997; P.A. 99-233 amended Subsec. (a)(1) and (3) to revise the definition of "small contractor" and "minority business enterprise" to include a business where at least 51% is owned by persons with operational authority over daily affairs instead of owned by persons active in daily affairs, amended Subsec. (b) to add provisions re serious need, amended Subsecs. (d), (e) and (h) to transfer authority from the Department of Economic and Community Development to the Department of Administrative Services, amended Subsec. (l) to require the Department of Administrative Services to establish a process for certification and added new Subsec. (o) concerning a precertification list, effective June 29, 1999; P.A. 00-199 amended Subsecs. (b)(2), (m) and (n) by replacing references to Commissioner of Economic and Community Development with references to Commissioner of Administrative Services, and further amended Subsec. (m) by adding reference to the committee on government administration and elections, and further amended Subsec. (n) by requiring that the Commission on Human Rights and Opportunities monitor the achievement of the annual goals established by each state agency and political subdivision of the state other than municipalities and prepare a quarterly report concerning such goal achievement, and by requiring that the report be submitted to each agency submitting a report and to the Commissioners of Economic and Community Development and Administrative Services, and providing that failure to submit reports shall be a violation of Sec. 46a-77, effective June 1, 2000; Sec. 32-9e transferred to Sec. 4a-60g in 2001; P.A. 01-195 made technical changes in Subsecs. (a)(3), (a)(5) and (j), effective July 11, 2001; P.A. 06-129 added Subsec. (p) re janitorial contracts awarded pursuant to Sec. 4a-82(b) to (e), inclusive; June Sp. Sess. P.A. 07-4 redefined "small contractor" in Subsec. (a)(1) and "individual with a disability" in Subsec. (a)(7), amended Subsec. (b) to eliminate provision re ability of agency head to set aside an amount based on the amount of all contracts not excluded from the calculation which are anticipated to be let in any fiscal year, deleted former Subsec. (e) re limitation on total amount of contract recommended or awarded, redesignated existing Subsecs. (f) to (p) as Subsecs. (e) to (o), amended Subsec. (e) to require written explanation of any subcontract entered into with a person not eligible for award of a contract under section, amended Subsec. (j) re duties of awarding authority, amended Subsec. (k) to replace provisions re printed directory and quarterly update with provision re updated directory maintained on web site, amended Subsec. (l) to replace "September 30, 1995," with "August 30, 2007," amended Subsec. (m) to require written explanation of how an agency will achieve its goals in the final reporting period if not reached by the end of the second reporting period and made technical changes, effective July 1, 2007, and further redefined "small contractor" in Subsec. (a)(1) to increase gross revenues under Subpara. (B) from $10,000,000 to $15,000,000, effective January 1, 2008.
