Common use of Commercially Useful Function Clause in Contracts

Commercially Useful Function. A prime consultant can credit expenditures to a DBE subconsultant toward DBE goals only if the DBE performs a Commercially Useful Function (CUF). A DBE performs a CUF when it is responsible for execution of the work of a contract and carries out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, the DBE must also be responsible, with respect to materials and supplies on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself that it uses on the project. To determine whether a DBE is performing a commercially useful function, the Department will evaluate the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance of the work, and other relevant factors. A DBE will not be considered to perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is such an extra participant, the Department will examine similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, the Department will presume that the DBE is not performing a commercially useful function. When a DBE is presumed not to be performing a commercially useful function as provided above, the DBE may present evidence to rebut this presumption. The Department will determine if the firm is performing a CUF given the type of work involved and normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF. The consultant will be notified within seven calendar days of the Department’s decision. Decisions on CUF may be appealed to the ADOT State Engineer. The appeal must be in writing and personally delivered or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are not administratively appealable to USDOT. The BECO may conduct project site visits on the contract to confirm that DBEs are performing a CUF. The consultant shall cooperate during the site visits and the BECO’s staff will make every effort not to disrupt work on the project.

Commercially Useful Function. A prime consultant can credit expenditures to a DBE subconsultant toward DBE goals only if the DBE performs a Commercially Useful Function (CUF). A DBE performs a CUF when it is responsible for execution of the work of a contract and carries out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, the DBE must also be responsible, with respect to materials and supplies on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself that it uses on the project. To determine whether a DBE is performing a commercially useful function, the Department will evaluate the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance of the work, and other relevant factors. A DBE will not be considered to perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is such an extra participant, the Department will examine similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, the Department will presume that the DBE is not performing a commercially useful function. When a DBE is presumed not to be performing a commercially useful function as provided above, the DBE may present evidence to rebut this presumption. The Department will determine if the firm is performing a CUF given the type of work involved and normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF. The consultant will be notified within seven calendar days of the Department’s decision. Decisions on CUF may be appealed to the ADOT State Engineer. The appeal must be in writing and personally delivered or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are not administratively appealable to USDOT. The BECO may conduct project site visits on the contract to confirm that DBEs are performing a CUF. The consultant shall cooperate during the site visits and the BECO’s staff will make every effort not to disrupt work on the project.

Commercially Useful Function. A prime consultant Developer can credit expenditures payments to a DBE subconsultant Subcontractor toward the DBE goals Goals only if the DBE performs a Commercially Useful Function (CUF)) on the Project. A DBE performs a CUF when it is responsible for execution of the work of a contract Work under its Subcontract and carries out its responsibilities by actually performing, managing, and supervising supervising, the work Work involved. To perform a commercially useful function, the DBE must also be responsible, with respect to materials and supplies used on the contractProject, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) materials, and paying for the material materials itself that it uses on the projectProject. To determine whether where a DBE is performing a commercially useful function, the Department ADOT will evaluate the amount of work Work subcontracted, industry practices, whether the amount the firm is to be paid under the contract Agreement is commensurate with the work Work it is actually performing and performing, the DBE credit claimed for its performance of the workWork, and other relevant factors. A DBE will not be considered to perform a commercially useful function CUF if its role is limited to that of an extra participant in a transaction, contract, transaction or project contract through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is such an extra participant, the Department ADOT will examine similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract Subcontract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract under its Subcontract than would be expected on the basis of normal industry practice for the type of work involved, the Department ADOT will presume that the DBE is not performing a commercially useful functionCUF. Developer shall ensure and confirm that all DBEs selected for Subcontract work on the Project, for which it seeks to claim credit toward the DBE Goals, perform a CUF. Further, Developer shall verify that each DBE fully performs its designated tasks in accordance with the provisions of this section of these DBE Special Provisions. For the purposes of determining a CUF, the DBE’s equipment will mean either equipment directly owned by the DBE as evidenced by title, xxxx of sale or other such documentation, or leased by the DBE firm, and over which the DBE has exclusive use and control, and absolute priority, as evidenced by the leasing agreement from a firm not owned in whole or part by Developer or its Affiliate. If Developer becomes aware of any change in the nature of a DBE’s Work (for example, a DBE Subcontractor issues a second tier Subcontract to a non-DBE), Developer shall promptly report the change to ADOT and BECO. When a DBE is presumed not to be performing a commercially useful function CUF as provided above, the DBE or Developer may present evidence to rebut this presumption. The Department ADOT will determine if the firm is not performing a CUF given the type of work involved and based on normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF. The consultant will be notified within seven calendar days of the Department’s decision. Decisions on CUF may be appealed to the ADOT State Engineer. The appeal must be in writing and personally delivered or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are subject to review by the FHWA, but are not administratively appealable to USDOT. The BECO may conduct project site visits on In order to obtain this review, the contract affected party must contact ADOT in writing to confirm that DBEs are performing request a CUFreview within seven days after ADOT delivers written notice of its decision. The consultant shall cooperate during request must be accompanied with any documentation to support the site visits and affected party’s case. ADOT will transmit the BECO’s staff will make every effort not request for review with any supporting documentation to disrupt work on the projectFHWA.

Commercially Useful Function. A prime consultant can credit expenditures It is the Contractor’s obligation to a ensure that each DBE subconsultant toward DBE goals only if the DBE used on federal-assisted contracts performs a Commercially Useful Function (commercially useful function on the Contract. The Department will monitor performance during the Contract to ensure each DBE is performing a CUF). A Under the terms established in 49 CFR 26.55, a DBE performs a CUF when it is responsible for execution of the work of a contract the Contract and carries is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform With respect to material and supplies used on the Contract, a commercially useful function, the DBE must also be responsible, with respect to materials and supplies on the contract, responsible for negotiating price, determining quality and quantity, ordering the material, and installing (where the material, if applicable) , and paying for the material itself that it uses itself. With respect to trucking, the DBE trucking firm must own and operate at least one fully licensed, insured, and operational truck used on the projectContract. To determine whether The DBE may lease trucks from another DBE firm, including an owner-operator who is certified as a DBE. The DBE who leases trucks from another DBE receives credit for the total value of the transportation services the lessee DBE provides on the Contract. The DBE may also lease trucks from a non-DBE firm, including from an owner-operator. The DBE that leases trucks equipped with drivers from a non-DBE is performing entitled to credit for the total value of transportation services provided by non- DBE leased trucks equipped with drivers not to exceed the value of transportation services on the Contract 000-394 provided by DBE-owned trucks or leased trucks with DBE employee drivers. Additional participation by non- DBE owned trucks equipped with drivers receives credit only for the fee or commission it receives as a commercially useful function, the Department will evaluate the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance result of the work, and other relevant factorslease arrangement. A DBE will does not be considered to perform a commercially useful function if CUF when its role is limited to that of an extra participant in a transaction, contractContract, or project through which funds are passed in order to obtain the appearance of DBE participation. In determining The Department will evaluate similar transactions involving non-DBEs in order to determine whether a DBE is such an extra participant, the Department will examine similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for at least 30 percent 30% of the total cost of its contract Contract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, the Department will presume that the DBE is not performing a commercially useful functionCUF. When If the Department determines that a DBE is presumed not to be performing a commercially useful function as provided above, the DBE may present evidence to rebut this presumption. The Department will determine if the firm is performing a CUF given the type of work involved and normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF, no work performed by such DBE will count as eligible participation. The consultant denial period of time may occur before or after a determination has been made by the Department. In case of the denial of credit for non-performance of a CUF, the Contractor will be notified within seven calendar days of required to provide a substitute DBE to meet the Department’s decision. Decisions on CUF may be appealed to the ADOT State Engineer. The appeal must be in writing and personally delivered Contract goal or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are not administratively appealable to USDOT. The BECO may conduct project site visits on the contract to confirm that DBEs are performing a CUF. The consultant shall cooperate during the site visits and the BECO’s staff will make every provide an adequate good faith effort not to disrupt work on the projectwhen applicable.

Commercially Useful Function. A prime consultant Developer can credit expenditures payments to a DBE subconsultant Subcontractor toward the DBE goals Goals only if the DBE performs a Commercially Useful Function (CUF)) on the Project. A DBE performs a CUF when it is responsible for execution of the work of a contract Work under its Subcontract and carries out its responsibilities by actually performing, managing, and supervising supervising, the work Work involved. To perform a commercially useful function, the DBE must also be responsible, with respect to materials and supplies used on the contractProject, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) materials, and paying for the material materials itself that it uses on the projectProject. To determine whether where a DBE is performing a commercially useful function, the Department ADOT will evaluate the amount of work Work subcontracted, industry practices, whether the amount the firm is to be paid under the contract Agreement is commensurate with the work Work it is actually performing and performing, the DBE credit claimed for its performance of the workWork, and other relevant factors. A DBE will not be considered to perform a commercially useful function CUF if its role is limited to that of an extra participant in a transaction, contract, transaction or project contract through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is such an extra participant, the Department ADOT will examine similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract Subcontract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract under its Subcontract than would be expected on the basis of normal industry practice for the type of work involved, the Department ADOT will presume that the DBE is not performing a commercially useful functionCUF. Developer shall ensure and confirm that all DBEs selected for Subcontract work on the Project, for which it seeks to claim credit toward the DBE Goals, perform a CUF. Further, Developer shall verify that each DBE fully performs its designated tasks in accordance with the provisions of this section of these DBE Special Provisions. For the purposes of determining a CUF, the DBE’s equipment will mean either equipment directly owned by the DBE as evidenced by title, bill of sale or other such documentation, or leased by the DBE firm, and over which the DBE has exclusive use and control, and absolute priority, as evidenced by the leasing agreement from a firm not owned in whole or part by Developer or its Affiliate. If Developer becomes aware of any change in the nature of a DBE’s Work (for example, a DBE Subcontractor issues a second tier Subcontract to a non-DBE), Developer shall promptly report the change to ADOT and BECO. When a DBE is presumed not to be performing a commercially useful function CUF as provided above, the DBE or Developer may present evidence to rebut this presumption. The Department ADOT will determine if the firm is not performing a CUF given the type of work involved and based on normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF. The consultant will be notified within seven calendar days of the Department’s decision. Decisions on CUF may be appealed to the ADOT State Engineer. The appeal must be in writing and personally delivered or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are subject to review by the FHWA, but are not administratively appealable to USDOT. The BECO may conduct project site visits on In order to obtain this review, the contract affected party must contact ADOT in writing to confirm that DBEs are performing request a CUFreview within seven days after ADOT delivers written notice of its decision. The consultant shall cooperate during request must be accompanied with any documentation to support the site visits and affected party’s case. ADOT will transmit the BECO’s staff will make every effort not request for review with any supporting documentation to disrupt work on the projectFHWA.

Commercially Useful Function. A prime consultant can credit expenditures to a DBE subconsultant toward DBE goals only if the DBE an S/M/WBE firm performs a Commercially Useful Function (CUF). A DBE performs a CUF when it is responsible for execution of a distinct element of the work of a the contract and carries is carrying out its responsibilities by actually performing, managingstaffing, managing and supervising the work involved. To perform a commercially useful functionCommercially Useful Function, the DBE S/M/WBE firm must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality quantity and quantityquality, ordering the material, and installing (where applicable) and paying for the material itself that it uses on the projectitself. To determine whether a DBE an S/M/WBE firm is performing a commercially useful functionCommercially Useful Function, the Department will evaluate an evaluation must be performed of the amount of work subcontracted, normal industry practices, whether the amount the S/M/WBE firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE S/M/WBE credit claimed for its performance of the work, and other relevant factors. A DBE will Specifically, an S/M/WBE firm does not be considered to perform a commercially useful function Commercially Useful Function if its role is limited to that of an extra participant in a transaction, contract, contract or project through which funds are passed in order to obtain the appearance of DBE meaningful and useful S/M/WBE participation. In determining whether a DBE is such an extra participant, the Department will examine when in similar transactions, particularly those transactions in which DBEs S/M/WBE firms do not participate, there is no such role performed. If a DBE does The use of S/M/WBE firms by CONSULTANT to perform such “pass-through” or “conduit” functions that are not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force, or if the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, the Department will presume that the DBE is not performing a commercially useful functionshall be viewed by the CITY as fraudulent if CONSULTANT attempts to obtain credit for such S/M/WBE participation towards the satisfaction of S/M/WBE participation goals or other API participation requirements. When a DBE is presumed not to be performing As such, under such circumstances where a commercially useful function as provided aboveis not actually performed by the S/M/WBE firm, the DBE may present evidence to rebut this presumption. The Department will determine if CONSULTANT shall not be given credit for the participation of its S/M/WBE subconsultant or joint venture partner towards attainment of S/M/WBE utilization goals, and the CONSULTANT and S/M/WBE firm is performing a CUF given the type of work involved and normal industry practices. The Department will notify the consultant, in writing, if it determines that the consultant’s DBE subconsultant is not performing a CUF. The consultant will be notified within seven calendar days of the Department’s decision. Decisions on CUF may be appealed subject to sanctions and penalties in accordance with the SBEDA Ordinance. Evaluation Preference – an API that may be applied by the Goal Setting Committee (“GSC”) to Construction, Architectural & Engineering, Professional Services, Other Services, and Goods and Supplies contracts that are to be awarded on a basis that includes factors other than lowest price, and wherein responses that are submitted to the ADOT State Engineer. The appeal must City by S/M/WBE firms may be awarded additional Points in writing the evaluation process in the scoring and personally delivered ranking of their proposals against those submitted by other prime CONSULTANTs or sent by certified mail, return receipt requested, to the State Engineer. The appeal must be received by the State Engineer no later than seven calendar days after the decision of XXXX. XXXX’s decision remains in place unless and until the State Engineer reverses or modifies BECO’s decision. ADOT State Engineer will promptly consider any appeals under this subsection and notify the consultant of ADOT’s State Engineer findings and decisions. Decisions on CUF matters are not administratively appealable to USDOT. The BECO may conduct project site visits on the contract to confirm that DBEs are performing a CUF. The consultant shall cooperate during the site visits and the BECO’s staff will make every effort not to disrupt work on the projectRespondents.