03_Subcontractor_Addition_and_Subtraction_Policy.pdf

policy update 093022twj

Subcontractor Addition and Substitution

Policy and Procedure

Mayor Justin M. Bibb

Direct questions to the Division of Purchases and Supplies Purchasing@clevelandohio.gov.

mailto:Purchasing@clevelandohio.gov

Sub-contractor Addition and Substitution

Purpose

The purpose of this Policy is to state the policies and practices which all City departments should follow to obtain the previous written Board of Control consent required for a City contractor to add a subcontractor, or to substitute one subcontractor for another subcontractor, under a City contract.

Each subcontractor proposed for a City contract, whether for a purchase, public improvement, or professional services, must be approved by the Board of Control (the

“BOC”) prior to the commencement of work and or services by the subcontractor.

Subcontractor approval will be considered by the BOC upon recommendation of the department Director. A subcontractor identified as a certified Cleveland-Area Small

Business (“CSB”), a Minority Business Enterprise (“MBE”), or a Female Business

Enterprise (“FBE”) (each generically also a “certified sub-contractor”) proposed for a contract, whether as an additional or substitute subcontractor, must also be verified as such by the Office of Equal Opportunity (“OEO”).

Note: The City assumes no obligation to pay, and will not pay, a contractor for any work and or services performed by a sub-contractor on the contract prior to

Board of Control approval of that sub-contractor.

Except upon occurrence of an emergency requiring immediate use of a subcontractor to prevent an interruption of public service or endangerment of public health, safety or welfare as declared and determined solely by the Director, the prime contractor is responsible for submitting all required supporting documentation to the contracting department Director, through the designated Project Manager for the contract (the

“Project Manager”), if any, no less than 3 (three) weeks in advance of the date the additional or substitute subcontractor is needed on the project, to allow time for internal and BOC approvals without delay or interruption of the project.

Note: The Director will not grant any City contractor additional time to meet project deadlines, and will not authorize or pay additional compensation or delay damages of any kind arising from the contractor’s inability to add or substitute a subcontractor because the contractor failed to submit the approval request and supporting documentation at least 3 (three) weeks in advance of the date the additional or substitute sub-contractor is needed.

The contracting department Project Manager, if any, for a particular contract will serve, on behalf of the department Director, as the primary contact for the prime contractor. The contracting department Director is responsible for assessing the completeness and sufficiency of the supporting documentation received from the prime contractor and subcontractor, for timely processing of the documentation through the appropriate internal department review(s) and approval(s) and forwarding to the OEO, if required, for evaluation and approval prior to any placement on the Board of Control agenda and for submitting the appropriate Board of Control resolution for approval.

Substitution of a Certified Subcontractor.

If, after a contract is awarded, a contractor is unable to utilize a CSB, MBE, or FBE identified in the contractor’s bid or proposal, it shall make a good- faith effort to identify and propose, and request the Director of the Office of Equal Opportunity’s approval of, a substitute CSB, MBE, or FBE, respectively, to fulfill its utilization commitment. (Section

187.13(b) C.O.)

A contractor must provide the contracting department Director, through the Project

Manager, written justification for any proposed substitution for a certified sub-contractor.

In addition, the contractor shall document its good-faith effort by submitting complete, revised OEO Schedules 2 and 3 to the contracting department Director, through the

Project Manager, with its request to the City for approval. The contracting department

Director, through the Project Manager, shall submit the written justification and revised

OEO Schedules to OEO.

The Director of OEO shall evaluate the proposed subcontractor substitution for approval, and will advise the contracting department Director, through the Project Manager, of the decision.

Federally Funded Projects. For projects funded directly or indirectly by the federal government where the contracting department is responsible for monitoring

Disadvantaged Business Enterprise ("DBE") participation, the department’s monitoring unit shall perform the role otherwise performed by OEO. The supporting documentation for the evaluation and approval of an additional or substitute DBE subcontractor must be forwarded to OEO for information purposes. The department Director shall also submit any necessary supporting documentation with its request for Board of Control approval.

Monitoring and Enforcement. The Project Manager shall, under direction of the department Director, verify that the contractor’s subcontractor utilization complies with the Board of Control’s subcontractor approval(s) by reviewing the contractor’s documentation and by worksite visits. The presence on the Project worksite of any subcontractor not previously approved by the Board of Control shall be immediately reported to the department Director for action.

The Project Manager shall maintain copies of all verification records in the contracting department.

Penalties for Non-Compliance. The Project Manager will document and report any findings of non-compliance with this Policy by a contractor to the contracting department

Director. The department Director will then submit a copy of the findings, and a recommendation for action or no action, to the Director of Law. If non-compliance with

Chapter 187 C.O. is found regarding a certified sub-contractor, the department Director must also submit a copy of the findings to the Director of the OEO for determination of sanction(s) or penalty(ies) under that chapter and/or under the contract terms.