MWBE certification; eligibility of applicant business enterprises.
Denver Revised Municipal Code § 28-53
in effectSec. 28-53. - MWBE certification; eligibility of applicant business enterprises.
(a) Procedures and methods. The director shall, by rule and regulation or policies relating solely to internal management and procedure, establish reasonable procedures and methods for the certification of applicant business enterprises as an MWBE in order to effectuate the purposes of this article III and its divisions. The director may seek input and advice from appropriate industry sources as to appropriate aspects of work performance, equipment and staffing in these industry areas in which certification is being sought.
(b) Only applicant business enterprises that meet the criteria for certification as an MWBE may participate in the goals program established under this article III and its divisions. The applicant business enterprise has the burden of persuasion by a preponderance of the evidence. Only an applicant business enterprise owned and managed and controlled by socially and economically disadvantaged individual(s) may be certified as an MWBE, as applicable. MWBEs may be certified only for specific types of work for which they apply and in which they have had sustained business activity for a minimum of six (6) months. Certification areas shall correspond to the codes set forth in North American Industrial Classification Standard (NAICS) Codes, or successor classification system, Code of Federal Regulations § 121.201, as amended, or successor regulation.
(c) To determine whether the requirements set forth below are met, the DSBO must consider all of the facts in the record, viewed as a whole.
(1) Ownership. In order for the socially and economically disadvantaged owner(s) to be found to own the applicant business enterprise for purposes of certification, as applicable, the applicant business enterprise or socially and economically disadvantaged owner(s) must meet the requirements set forth below.
a. To be an eligible MWBE, each socially and economically disadvantaged owner must:
(i) Own in his or her own name the legal and equitable interest in the applicant business enterprise;
(ii) Have acquired the interest in a verifiable and substantial arms-length transaction, utilizing verifiable, substantial, and continuing consideration; going beyond pro forma ownership of the applicant business enterprise as reflected in ownership documents;
(iii) Enjoy customary incidents of ownership and share in the risks and profits commensurate with their ownership interests in practice, not merely in the form of arrangements; and
(iv) Have acquired the interest with a contribution of his or her own capital resources, by having put his or her own financial resources at risk in the operation of the applicant business enterprise, or, subject to requirements below, with a contribution of expertise. All contributions by the socially and economically disadvantaged owner(s) to acquire the ownership interest in the applicant business enterprise must be verifiable, substantial, and continuing, which in part, requires that it be commensurate with the ownership interest acquired. All contributions to acquire an ownership interest, including any portion of it, must have been made at the time the socially and economically disadvantaged individuals acquired the interest in business enterprise.
(A) If expertise is relied upon as part of a socially and economically disadvantaged owner's contribution to acquire ownership, the expertise must be of the requisite quality generally recognized in a specialized field, in areas critical to the operations of the applicant business enterprise, indispensable to the applicant business enterprise's potential success, specific to the type of work the applicant business enterprise performs, and is documented in the applicant business enterprise's records. These records must clearly show the contribution of expertise, including its equivalent monetary value. The socially and economically disadvantaged individual(s) whose expertise is relied upon must have a commensurate capital investment in the applicant business enterprise.
(B) Examples of insufficient contributions include a promise to contribute capital, an unsecured note payable to the business enterprise or to an owner who is not socially and economically disadvantaged individual, or mere participation in the business enterprise as an employee. Debt instruments from financial institutions or other organizations that lend funds in the normal course of their business do not render an applicant business enterprise ineligible, even if the debtor's ownership interest is security for the loan.
(2) Management and control. Only an applicant business enterprise that is managed and controlled by a socially and economically disadvantaged individual(s) may be certified as an MWBE. The socially and economically disadvantaged minority or woman owner(s) shall direct the management, policies, and day-to-day business operations of the applicant business enterprise and shall have the power to make, and shall in fact make, routine and major decisions on matters of management, policy, and operations. The socially and economically disadvantaged minority or woman owner's(s') management and control must be verifiable, substantial, and continuing and go beyond the pro forma ownership of the applicant business enterprise as reflected in its ownership documents. Ownership alone is not sufficient to establish management and control. To determine whether each socially and economically disadvantaged individual satisfies these requirements, the DSBO shall consider the criteria below:
a. If federal or state law or city ordinance requires the owner(s) to have a particular license or other credential in order to own or control a certain type of business enterprise, then the socially and economically disadvantaged owner(s) must possess the required license or credential. If federal or state law or city ordinance does not require that the owner possess the license or other credential to own or control the business enterprise, to determine whether the socially and economically disadvantaged owner(s) manage and control the business enterprise, DSBO may consider whether the socially and economically disadvantaged owner(s) hold the license or other credential required to conduct the specific type of work in which certification is sought as a factor. If there is not a legal requirement for the owner to hold the license or other credential to own or control a certain type of business enterprise, failure of the owner to hold the license or other credential does not by itself indicate lack of management and control of a business enterprise without other factors indicating to the contrary.
b. The socially and economically disadvantaged minority or woman owner(s) shall have substantial experience in the trade or industry that would be necessary to make routine and major decisions for the applicant business enterprise.
c. The socially and economically disadvantaged minority or woman owner(s) shall regularly make decisions, hold themselves out to the public, and sign important documents and financial instruments in a manner that is indicative of primary management and control of daily business operations and responsibility for routine and major decisions.
d. No restriction through corporate charter provisions, by-law provisions, contracts, or any other formal or informal devices may prevent the socially and economically disadvantaged owner(s), without the cooperation or vote of any non-socially and economically disadvantaged owner, from making any business decision of the applicant business enterprise, including the making of obligations or the disbursing of funds.
e. The socially and economically disadvantaged owner(s) must possess the power to direct or cause the direction of the management and policies of the applicant business enterprise and to make day-to-day as well as long-term decisions on management, policy, and operations.
f. The socially and economically disadvantaged owner(s) may delegate various areas of the management, policymaking or daily operations of the applicant business enterprise to other participants who are not socially and economically disadvantaged owner(s). Such delegations of authority must be revocable, and the socially and economically disadvantaged owner(s) must retain the power to hire and fire any such persons. The socially and economically disadvantaged owner(s) must actually exercise control over the applicant business enterprise's operations, management, and policies.
g. The socially and economically disadvantaged owner(s) must have an overall understanding of, and managerial and technical competence, experience and expertise regarding, matters directly related to the type of business in which the applicant business enterprise is engaged and its operations. The socially and economically disadvantaged owner(s) is not required to have experience or expertise in every critical area of the applicant business enterprise's operations or have greater experience or expertise in a given field than managers or key employees. The socially and economically disadvantaged owner(s) must have the ability to intelligently and critically evaluate information presented by other participants in the applicant business enterprise's activities and to make independent decisions concerning the applicant business enterprise's daily operations, management, and policymaking. Generally, expertise or responsibilities primarily in office management, administration, bookkeeping, or other functions unrelated to the principal business activities of the applicant business enterprise are insufficient to demonstrate management and control.
h. A socially and economically disadvantaged owner(s) may not engage in outside employment or other business interests that conflict with the management of the applicant business enterprise or prevent the owner(s) from devoting sufficient time and attention to the affairs of the applicant business enterprise to manage and control its day to day activities. For example, absentee ownership of a business and part-time work in a full-time applicant business enterprise are not viewed as constituting management and control. An individual, however, could be viewed as controlling a part-time business that operates only evenings or weekends or both, provided the individual manages and controls it throughout all hours of operation.
i. An applicant business enterprise may be certified only for specific types of work in which the socially and economically disadvantaged owner(s) has the ability and expertise to manage and control the applicant business enterprise's operations and work. To become certified in an additional type of work, the enterprise must sufficiently demonstrate only that its socially and economically disadvantaged owners are able to control the enterprise with respect to that type of work. It is not required to be recertified, unless it is also seeking renewal, or submit a new application for certification, but DSBO must be able to verify that the socially and economically disadvantaged owner(s) manages and controls the enterprise with regard to the additional type of work.
(3) Independence. Only an independent applicant business enterprise may be certified as an MWBE. An independent applicant business enterprise viability cannot depend on its relationship with another business enterprise. Recognition of an applicant business enterprise as a separate entity for tax or corporate purposes is not necessarily sufficient to demonstrate that the applicant business enterprise is independent and not an affiliate. In determining whether an applicant business enterprise is an independent business, the DSBO shall, at minimum:
a. Examine whether there is actual or potential affiliation between the applicant business enterprise and individuals or non-certified business enterprises. To determine whether affiliation exists, the DSBO considers factors such as ownership, management, previous relationships with or ties to another individual or non-certified business entity, and contractual relationships. Affiliation may be based on common management, identity of interest, the newly-organized-concern rule, joint venture, or any combination thereof;
b. Scrutinize relationships with non-certified business enterprises in areas of personnel, finance, facilities, other resources. The DSBO may consider shared employees (including administrative staff), office space, phone numbers, and equipment and whether there is any support or sharing of bonding capacity, lines of credit, and other resources;
c. Consider present or recent employer/employee relationships between the socially and economically disadvantaged individuals of the applicant and non-certified business enterprises or persons associated with non-certified business enterprises;
d. Examine the applicant business enterprise's relationships with non-certified business enterprises to determine whether there is a pattern of exclusive or primary dealings with non-certified business enterprises; and
e. Consider whether relationships between the applicant business enterprise and non-certified business enterprises are consistent with normal industry practice.
(4) Actively in business for six (6) months. The applicant business enterprise may not be certified until six (6) months after the satisfaction of each of the following:
a. Formation of the applicant business enterprise;
b. Commencement of sustained business activity in the trade or profession described on the certification application; and
c. Commencement of ownership, management and control of daily business operations by the identified socially and economically disadvantaged minority or woman owner(s).
(5) Lawfully present in the United States. The socially and economically disadvantaged owner(s) must be a citizen of the United States or a lawfully admitted permanent resident of the United States, and must not have the status of an unauthorized worker or otherwise be disqualified from lawfully residing in the United States, engaging in business and seeking this certification. As a condition of certification, owner(s) must comply with all reporting, submittal and other requirements that may be imposed by the city, State of Colorado or United States governments regarding such lawful presence.
(6) Eligibility; rebuttable presumption of social disadvantage; individualized showing of social disadvantage; evidence of discrimination.
a. Rebuttably presumed social disadvantage. A socially and economically disadvantaged minority individual or woman upon whom the certification application is based must supply credible evidence, by sworn affidavit, that such individual has suffered from past race- or gender-based (as applicable) discrimination in association with the conduct of business or the attempted conduct of business as a business enterprise, in the construction or the professional design and construction services industries in the city's marketplace; provided that, any applicant business enterprise owned and controlled by, or any socially and economically disadvantaged minority individual or woman upon whom certification of such applicant business enterprise is sought, who is a member of the racial or ethnic minority groups referenced in section 28-35(36)(a), or is a woman, is rebuttably presumed to be socially disadvantaged under the provisions of section 28-35(37) and (49) and, if such minority individual or woman further demonstrates that such minority individual or woman so conducted business or attempted to conduct business in the construction or professional design and construction services industries in the city's marketplace prior to January 1, 2006, such minority individual or woman shall in addition be rebuttably presumed to have suffered from discrimination within the city's marketplace and to therefore be eligible to be certified as an MWBE under this article III and its divisions, subject to compliance with all other requirements of sections 28-53 and 28-55.
b. Individualized social disadvantage. An individualized socially disadvantaged minority individual upon whom the certification application is based pursuant to section 28-35(37)(b) shall supply credible evidence, by sworn affidavit, (i) that such individual has suffered from past individualized discrimination in association with the conduct of business or the attempted conduct of business as a business enterprise, in the construction or the professional design and construction services industries in general; (ii) that he or she has in addition suffered from such individualized discrimination within the city's marketplace; and (iii) that he conducted business or attempted to conduct business in the city's marketplace as set out in a., above. An individual who makes such a showing shall be deemed to have suffered from individualized discrimination and social disadvantage within the city's marketplace, and therefore be deemed eligible to be certified as an MWBE under this article III and its divisions, subject to compliance with all other requirements of sections 28-53 and 28-55.
(7) Eligibility; showing of economic disadvantage. A socially and economically disadvantaged minority individual or woman upon whom the certification application is based shall also supply credible evidence, by personal financial statement or as otherwise required by the director, that such individual has a personal net worth equal to or less than the permissible personal net worth amount determined by the U.S. Department of Transportation to be applicable to its DBE programs, or as otherwise determined by the director by rule and regulation as defined in section 28-35(25). An individual who makes such a showing shall be deemed to have been economically disadvantaged within the city's marketplace and to therefore be eligible to be certified as an MWBE under this article III and its divisions, subject to compliance with all other requirements of sections 28-53 and 28-55.
(8) Threshold size; continued eligibility and renewal of certification. No applicant business enterprise or MWBE shall be eligible for initial certification or subsequent certification renewal if such business enterprise, MWBE or SBE combined with any affiliates meets the criteria set forth in section 28-55 for graduation from participation in the goals program established by this article III and its divisions. An MWBE will be certified for a three-year period. Following initial certification, an MWBE that desires to continue its certification shall, no later than thirty (30) days prior to each three-year anniversary of the certification, submit a certification renewal application, which shall update and reaffirm all requirements for certification. No later than thirty (30) days prior to each annual anniversary of the certification, an MWBE shall submit an affidavit certifying that there has been no change in any information affecting certification eligibility, along with other required tax or other financial information and documents. A certification may be terminated by the director upon the failure of the MWBE to satisfy any certification requirement set forth in this article III and its divisions.
(9) City officials, officers, and employees ineligible. No applicant business enterprise shall be eligible to be certified as an MWBE if ownership or control of such business enterprise is held by a current official, officer or employee of the city.
(10) Interviews, investigation, and onsite visits. The DSBO shall personally interview all persons upon whom eligibility for certification is based, and is empowered to interview such other persons and conduct such onsite visits and investigations as may be appropriate in its sole discretion to verify eligibility for certification. An applicant business enterprise wishing to be certified as an MWBE shall cooperate with the DSBO in supplying additional information that may be requested in order to make a determination.
(Ord. No. 286-20, § 2, 4-13-20)
Source: City and County of Denver, Revised Municipal Code and Charter (Municode Library, library.municode.com)URL: https://library.municode.com/co/denver/codes/code_of_ordinances?nodeId=TITIIREMUCO_CH28HURI_ARTIIINOCOCOREREPRDECOSE_DIV3NOCOCOREREPRDECOSE_SDIMWPRCOCOREREPRDECOSE_S28-53MWCEELAPBUENFetched: 10/27/2026