Common use of Commercially Useful Function Clause in Contracts

Commercially Useful Function. A D/M/WBE is considered to perform a commercially useful function when it is responsible for the execution of a distinct element of work on a contract and carries out its responsibilities by actually performing, managing, and supervising the work involved in accordance with normal industry practice. Regardless of whether an arrangement between the Contractor and the D/M/WBE represent standard industry practice, if the arrangement erodes the ownership, control or independence of the D/M/WBE or in any other way does not meet the commercially useful function requirement, the Contractor will receive no credit toward the goal(s) and may be required to backfill the participation. A D/M/WBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction or contract through which funds are passed in order to obtain the appearance of D/M/WBE participation. A DBE may present evidence to rebut a determination by the Department that the DBE is not performing a commercially useful function. Commercially useful function determinations by the Department are subject to review by the Federal Highway Administration (FHWA) but the determination may not be administratively appealed to USDOT. An M/WBE may rebut a determination by the Department that the M/WBE is not performing a commercially useful function to the NYS Department of Economic Development.