Mayor Gray Vetoes Business Reform Bill

D.C. Mayor, Vincent Gray (D), vetoed a bill the second week of February that would have begun reform for small business owners across the city.

An ambitious bill was proposed by At-Large Councilmember Vincent Orange (D),that proposed to reform the Certified Business Enterprise (CBE) program.  His bill, the “Small and Certified Business Enterprise Development and Assistance Amendment Act of 2012.”

In a letter to the D.C. Council, the mayor said the final CBE-reform bill is “unworkable” and “falls short of the mark.”  The letter further said, “I appreciate that the council’s work here was well intentioned, however, it is critical that we get reform of this important program right.”  He said the new system would be difficult to manage and could unwittingly give an advantage to larger companies.

The 28-page bill included an array of changes to the CBE program, including a requirement that 50 percent of the value of major contracts go to certified businesses, up from 35 percent. Additionally, the bill proposed the CBE participation requirement not only on the total dollar value of city construction contracts but also on the individual components of construction contracts — including electrical, plumbing, HVAC, drywall and other trades.

In a statement, after the news of Gray’s veto, Orange said that Gray “caved to non-District based business interests.”  The council could move to override the veto, requiring the vote of nine of the council’s 13 members.

Orange’s legislation if passed, would have mandated:

  1. Contracts under $250,000 set-aside for Certified Business Enterprises (CBE);
  2. Allow CBE contracts $1 million or less to waive the 35% subcontracting requirement if a CBE company self-performs the entire contract;
  3. Require 35% CBE utilization across all division codes on a government-assisted construction project for CBE contractors;
  4. Require 50% CBE utilization across all division codes on a government-assisted project for non-CBE and non-District based contractors;
  5. Clarify that CBEs and certified joint ventures who commit fraud shall be subject to fines, penalties, suspension, and debarment;
  6. Require the Director of the Department of Small & Local Business Development (DSLBD) to determine certification suspension or revocation and to require Office of Administrative Hearings to address appeals from that determination;
  7. Abolish the Small and Local Business Opportunity Commission;
  8. Require local business enterprises to maintain offices and perform managerial functions in their principal office located in the District;
  9. Mandate that only the DSLBD Director may waive or modify subcontracting requirements;
  10. Clarify that providing false information in response to a bid or proposal or making false statements as to certification status shall be subject to fines and criminal penalties;
  11. Require all fines, fees and penalties be deposited into the Small Business Development Fund; and,
  12. More efficient and effective reporting requirements.