§ 3-439. Joint venture and mentor-protégé programs.

(a)

The joint venture relationship. The department shall encourage voluntary establishment of joint ventures on all request for proposals (RFP) and requests for qualifications (RFQ). Joint ventures have the potential to create prime contracting opportunities for businesses that include MBE/WBEs on eligible projects.

(1)

A written joint venture agreement must be completed by all parties to the joint venture and executed before a notary public, which clearly delineates the rights and responsibilities of each member or partner, complies with any requirements of the department, as set forth in RFP or RFQ documents, and provides that the joint venture shall continue for the duration of the project. The department shall review joint venture agreements prior to the award of a contract to determine whether the partners, in fact, share a mutual interest in the operation and success or failure of the joint venture. The department may consider:

a.

The initial capital investment of each joint venture partner; and

b.

The proportional allocation of profits and losses to each venture partner, at least 40 percent of which must be allocated to the MBE or WBE partners; and

c.

The partners rights to management, control, and ownership; and

d.

Whether the partners maintain a joint checking account; and

e.

The method of and responsibility for accounting; and

f.

The method by which disputes are resolved; and

g.

Any additional or further information required by the director or department as set forth in the request for qualifications or proposal documents or otherwise.

(2)

The joint venture, and each member of the joint venture, shall provide the department access to review all records pertaining to joint venture agreements before and after the award of a contract in order to reasonably assess compliance with this division.

(3)

The failure of any joint venture partner to comply with this section shall render the joint venture agreement invalid and subject the joint venture partners to any or all of the penalties contained in section 3-465.

(b)

The mentor/protégé certification. Mentor/protégé certifications are voluntary and designed to provide MBE/WBE firms with advice, technical assistance and/or training. The program is not intended to remove the responsibility of the minority or women owner from the actual day-to-day management of their firm. The mentor/protégé team shall perform work as designated by the mentor within its relevant scope of work, provided however that the mentor cannot be responsible for the management of the MBE/WBE firm and the mentor and the MBE/WBE must remain separate and independent business entities.

(1)

Mentor companies shall require approval by the department to participate in the program; protégé companies must meet the certification requirements of section 3-461 to participate in the program.

(2)

The mentor/protégé relationship must be established by a written agreement, completed by both parties to the relationship, and executed before a notary public. This agreement shall clearly delineate the rights and responsibilities of the mentor/protégé.

(3)

The department shall review the mentor/protégé agreement for compliance with this section prior to certifying a mentor/protégé relationship.

(4)

The mentor/protégé relationship shall exist at least three years, but no more than five years as agreed to by the mentor/protégé team with approval by the department. Both the mentor and protégé can terminate the relationship at any time for any reason and must notify the director of the termination in writing.

(5)

A mentor may utilize multiple protégés on a city contract but may have no more than three protégés at any one time, each of which shall be mentored in different commercially useful functions.

(6)

A protégé is limited to two mentor/protégé relationships as a participant in the MBE/WBE program, and each relationship must be with a different mentor.

(7)

During the term of the mentor/protégé certification, the mentor and protégé businesses must each provide to the department a quarterly summary of the mentor skills provided to the protégé, which shall include:

a.

The time spent between mentor and protégé business in furtherance of the mentor/protégé relationship; and

b.

The nature and extent of managerial, technical, financial and/or bonding assistance provided; and

c.

A summary and explanation of any projects bid on or undertaken by the mentor-protégé team in the private sector or for a governmental entity other than the city; and

d.

Any additional or further information required by the department or incentive agency as set forth in bid documents or otherwise.

(8)

Assistance the mentor may provide the protégé includes, but is not limited to, the following:

a.

Extending financial assistance, in the forms of time notes, loans and stock purchases; and

b.

Providing technical advice, including cost accounting, estimating, training, plan interpretation, business management, loan packaging, financial counseling, and advice relevant to the success of the particular type of business concern; and

c.

Providing equipment and personnel for specific and limited purposes, provided that the equipment and personnel is clearly identified through lease agreements and personnel records, and the protégé exercise the necessary control of personnel and equipment within the normal course of business practice regardless of how the personnel and equipment are acquired; and

d.

Providing bonding by either bonding or guaranteeing the bonding on a project-by-project basis, provided that the mentor and protégé create a development plan that includes provisions for ensuring that the protégé acquires the ability to independently bond its projects; and

e.

Providing office space, clerical assistance, and other assistance at below market rates.

(9)

The following practices within the mentor/protégé relationship are prohibited:

a.

A mentor requiring, or a protégé voluntarily entering, an agreement with the mentor to have an exclusive bidding agreement; and

b.

Subcontracting arrangements created to artificially inflate MBE/WBE participation; and

c.

Formal or informal agreements that unreasonably limit the protégés control or management of its company; and

d.

A mentor entering into any agreement on behalf of the protégé; and

e.

An employer/employee relationship between the mentor and protégé at any time during the term of the mentor/protégé relationship.

(10)

Termination of the mentor/protégé relationship. Either party to the mentor/protégé relationship may terminate the relationship at will. The department may terminate the mentor/protégé relationship for good cause shown. At the end of the certification, the mentor shall no longer provide the protégé with any assistance and a protégés acceptance of such assistance shall result in the protégé not meeting the eligibility requirements for MBE/WBE certification.

(11)

Mentor/protégé business thresholds.

a.

Notwithstanding anything to the contrary herein, a mentors business with a protégé shall not exceed the following amounts:

1.

End of year 1: 80 percent of the protégé's gross receipts;

2.

End of year 2: 70 percent of the protégé's gross receipts;

3.

End of year 3: 60 percent of the protégé's gross receipts;

4.

End of year 4: 50 percent of the protégé's gross receipts;

5.

End of year 5: 50 percent of the protégé's gross receipts; unless the director approves a waiver for good cause or the protégé does not exceed the limitation applicable to the previous year.

b.

If the protégé is in its second mentor/protégé relationship, a mentors business with a protégé shall not exceed the following amounts:

1.

End of year 1:50 percent of the protégé's gross receipts;

2.

End of year 2: 50 percent of the protégé's gross receipts;

3.

End of year 3: 40 percent of the protégé's gross receipts;

4.

End of year 4: 30 percent of the protégé's gross receipts;

5.

End of year 5:30 percent of the protégé's gross receipts.

(Ord. No. 180535 , § 1, 10-25-18)