2 Colo. Code Regs. § 604-1, ch. 3

Current through Register Vol. 47, No. 20, October 25, 2024

Chapter 3 - Certification

3.1. Certification Procedures

A. Certification and Annual Update of Certification. CDOT will establish reasonable procedures and methods for the Certification and Annual Update of Certification of Businesses in order to effectuate the purposes of these Rules.

B. Application. At a minimum, all Applicants will be required to complete the prescribed CDOT application to be considered for Certification. The application will include questions regarding ethnicity and gender for the purpose of reporting the diversity of race-neutral participation in the ESB Program and on CDOT Contracts. CDOT may investigate the information provided in the application through reasonable means, including, but not limited to interviews and on-site investigations.

C. Requests for Information. The Applicant must respond to all written requests for information within fifteen (15) calendar days of such request being made by CDOT, unless additional time is requested and granted in writing. If the Applicant does not respond within the prescribed timeframe to CDOT's requests for information, CDOT may, at its sole discretion, make a determination based upon the information provided or deem the application incomplete. Incomplete applications are administratively closed. Applicants whose applications are administratively closed may reapply for Certification at any time by submitting a new application.

D. Notice of Determination. CDOT will issue a written Certification decision within ninety (90) calendar days of receipt of a complete application. CDOT may extend this time period once, for no more than an additional sixty (60) calendar days, upon written notice to the Applicant explaining the reasons for the extension. In the event that an Applicant is denied Certification, CDOT's written Certification decision must explain the reasons for the denial.

E. Appeal. Any Applicant that is denied Certification may appeal such denial pursuant to §§ 24-4-104 and 105, C.R.S.

F. Reapplication. Any Applicant that is denied Certification must wait at least one (1) year from the date of denial in order to reapply for Certification. This waiting period will not apply to Applicants that were denied Certification based on a size limit under paragraph (E) of Rule 3.2 . that is no longer applicable (e.g., following a change in the U.S. Small Business Administration size standards).

3.2. Minimum Certification Requirements

A. Burden of Proof. The Applicant has the burden of demonstrating, by a Preponderance of the Evidence, proof that it meets the Certification criteria, as determined by CDOT.

B. Registration. Applicants must be in good standing with the Colorado Secretary of State to transact business or conduct its activities within the state of Colorado as applicable. CDOT may require all Applicants to register and maintain registration in an information database.

C. Independence. The Applicant must be an independent Business. To be independent, the Business must demonstrate that its viability does not depend upon a relationship with another Business or Businesses. In determining whether a Business is independent, CDOT may consider, but is not limited to, evaluating the quality and consistency of relationships with other Businesses and individuals in comparison to normal industry practices.

D. Qualifying Area of Business. The Applicant must be able to participate in the performance of Professional Services, Practice of Research, or Construction work on CDOT's transportation Contracts, including Contracts for aeronautic, transit and highway transportation.

1. Primary Industry Determination. All Applicants and ESBs will be assigned a primary industry using a NAICS Code. The NAICS Code will describe the primary services and/or goods provided by the Applicant or ESB as determined by CDOT. The primary industry determination will be based on a number of factors, including but not limited to, the ESB's revenue, equipment, expertise, marketing materials, and the amount of time and labor dedicated to a specific area of work as compared to other services being offered by the ESB. The primary industry determination will be the basis for categorizing the ESB as a Construction, Professional Services, or Practice of Research firm. The ESB's designation as a Construction, Professional Services, or Practice of Research firm will be listed on CDOT's ESB directory.

2. Size Limit. The primary industry determination will be the basis for evaluating the Applicant's or ESB's ability to meet the ESB Program's size limit as described in paragraph (E) of this Rule.

3. Notice. The Applicant or ESB must be notified in writing by CDOT of its primary industry determination at the time of initial Certification and with each Annual Update of the ESB's Certification. The ESB's designated primary industry at the time of initial Certification will remain in effect for the duration of the ESB's participation in the ESB Program except as provided in subparagraphs (4) and (5) of paragraph (D) of this Rule.

4. Reevaluation. The Applicant or ESB may make a written request that CDOT reevaluate its primary industry determination at any time but may not make more than one (1) request in a given Certification Year. The reevaluation request must include all supporting information the Applicant or ESB would like for CDOT to consider as part of its request. CDOT may request additional information from the Applicant or ESB as part of its reevaluation. CDOT will notify the Applicant or ESB in writing of its determination within thirty (30) calendar days of the reevaluation request. If the request is denied, CDOT's written notice must explain the reasons for the denial. If approved, the new primary industry designation will remain in effect and not be modified except as provided in this subparagraph or subparagraph (5) of paragraph (D) of this Rule.

5. Appeal. The Applicant may appeal a primary industry determination or the denial of a reevaluation request pursuant to §§ 24-4-104 and 105, C.R.S.

E. Size Limit. The average annual Receipts of the Applicant or ESB for the preceding three (3) years, combined with the average annual Receipts of all Affiliates for the preceding three (3) years, will not exceed the current Overall Cap. The Applicant or ESB must also be a small Business for its primary industry as determined by the U.S. Small Business Administration pursuant to 13 C.F.R. § 121.201.

1. Levels. Certified ESBs will be divided into three categories: Level 1, Level 2, and Small Business Enterprise (SBE).

a. Level 1. Professional Services and Practice of Research ESBs whose average annual Receipts, as defined under 13 C.F.R. 121.104(c), do not exceed one million dollars ($1,000,000) will be designated as a Level 1 ESB. Construction ESBs whose average annual Receipts, as defined under 13 C.F.R. 121.104(c), do not exceed three million dollars ($3,000,000) will be designated as a Level 1 ESB.

b. Level 2. ESBs whose average annual Receipts, as defined under 13 C.F.R. 121.104(c), surpass the Level 1 thresholds set forth in subparagraph (1)(a) of paragraph (E) of this Rule but do not exceed fifty percent (50%) of the small business size standard set by the U.S. Small Business Administration under 13 C.F.R. 121.201 for its primary industry will be designated as a Level 2 ESB. ESBs with primary industries that have a U.S. Small Business Administration small business size standard based on the number of employees pursuant to 13 C.F.R. 121.201 will be designated as a Level 2 ESB if its average annual Receipts, as defined under 13 C.F.R. 121.104(c), surpass the Level 1 thresholds set forth in subparagraph (1)(a) of paragraph (E) of this Rule but do not exceed fifty percent (50%) of the Overall Cap.

c. Small Business Enterprise (SBE). ESBs that exceed the Level 1 threshold under subparagraph (1)(a) of paragraph (E) of this Rule and Level 2 threshold under subparagraph (1)(b) of paragraph (E) of this Rule will be designated as a SBE provided that its average annual Receipts, as defined under 13 C.F.R. 121.104(c), does not exceed the small business size standard established by the U.S. Small Business Administration for its primary industry under 13 C.F.R. 121.201 and the Overall Cap. ESBs with primary industries that have a U.S. Small Business Administration small business size standard based on the number of employees pursuant to 13 C.F.R. 121.201 will be designated as a SBE if its average annual Receipts, as defined under 13 C.F.R. 121.104(c), surpass fifty percent (50%) of the Overall Cap but do not exceed the Overall Cap.

2. Notice. CDOT must notify all Applicants or ESBs of its Level in writing at the time of Certification and with each Annual Update of the ESB's Certification.

3.. The assigned ESB Level will be listed on CDOT's ESB directory.

F. Training and Development. CDOT may establish minimum training and business development criteria for Certification and Annual Update of Certification, including but not limited to CDOT-facilitated courses, financial or business courses, milestones demonstrating business development and management, and/or or any other requirement related to the ability to successfully perform on CDOT Contracts. All training and development requirements will be detailed in the Certification application.

G. Debarment and Conviction. The Applicant or ESB or any Principal thereof must not have been debarred or convicted of bid-related crimes or violations within the past six (6) years in any state or federal jurisdiction or be under notice of intent to debar in any jurisdiction.

H. Truth and Honesty. The Applicant or ESB or any Principal thereof must not have provided false, deceptive, or fraudulent statements in the application for ESB Certification or in any other information, statements, or documents submitted to CDOT.

I. Cooperation and Complete Disclosure. The Applicants must respond timely to and fully comply with all requests for information that are made by CDOT regarding participation and/or Certification in the ESB Program. If the Business fails to cooperate or to fully disclose any information relevant to participation in the ESB Program, CDOT will have the right to deny or revoke the Certification.

J. Additional Information. In addition to the minimum eligibility requirements listed above, CDOT may request additional information for Certification in accordance with these Rules.

3.3. Annual Update of ESB Certification

A. Each ESB must annually update its ESB Certification with CDOT by submitting an affidavit sworn to by the ESB's owners before a person who is authorized by state law to administer oaths or an unsworn declaration executed under penalty of perjury of the laws of Colorado prior to the end of the ESB's Certification Year. This affidavit must affirm that there have been no changes in the ESB's circumstances affecting its continued ability to meet the eligibility requirements of the ESB Program.

B. Responsibility of ESB. The ESB is responsible for submitting Annual Update information to CDOT before the end of its Certification Year. CDOT will send a notice regarding the Annual Update approximately forty-five (45) calendar days in advance, but it is the ESB's responsibility to ensure that all materials are submitted before the end of the Certification Year. If the ESB does not timely submit its Annual Update information, CDOT will initiate revocation procedures in accordance with paragraph (B) of Rule 3.4.

C. Additional Investigation. If CDOT has reason to believe that an ESB may no longer be eligible for Certification or that a substantial change has occurred in the ownership or operation of the Business, it may further investigate the circumstances of the ESB and its owners.

D. Extensions. At its discretion, CDOT may provide an extension to the ESB for submitting Annual Update information of no more than one (1) month past the end of the Certification Year. Such extension is only valid if requested by the ESB and confirmed by CDOT in writing. A request for an extension will only be granted when the ESB has demonstrated extenuating circumstances requiring an extension.

E. ESBs must inform CDOT in writing of any change in circumstances affecting its ability to meet the eligibility requirements of these Rules or any material change in the information provided in its application form. ESBs must include supporting documentation demonstrating or describing in detail the nature of such changes. The written notification must be provided to CDOT within thirty (30) calendar days of the occurrence of the change. Failure to make a timely notification of such change may be grounds for revocation in accordance with paragraph (B) of Rule 3.4.

3.4. Graduation and Revocation of ESB Certification

A. Graduation. An ESB will be deemed to have graduated from the ESB Program if the average annual Receipts of the ESB (including its Affiliates), as defined under 13 C.F.R. 121.104(c), exceeds the small business size standard established by the U.S. Small Business Administration for its primary industry or if the ESB's average annual gross receipts, as defined under 13 C.F.R. 121.104(a), for the three (3) most recent fiscal years exceeds the Overall Cap.

1. Timing. Graduation will only occur upon the Annual Update of Certification.

2. Notice. CDOT will provide the ESB with written notice that the ESB has graduated from the ESB Program and state the reasons why CDOT believes the ESB is no longer eligible for the ESB Program.

3.. Effect on Participation. Graduation will not affect the ESB's status for Contracts that were bid for or awarded prior to the ESB's graduation from the ESB Program. Upon graduation, the Business will be removed from the ESB Program and ESB directory.

B. Revocation.

1. Reasons for Revocation. CDOT may revoke the Certification of an ESB if:

a. The ESB fails to comply with the procedures for Annual Update of Certification or any other requirements for continued ESB Program participation;

b. The ESB continuously fails to cooperate with CDOT;

c. The ESB or any Principal thereof is reasonably believed to have made false, deceptive, or fraudulent statements on its application for Certification, in the course of any determination or hearing associated with Certification, or in any documents or any other information submitted to CDOT;

d. The Business or any Principal thereof commits any action or omission which evidences a lack of integrity or honesty in performing public projects; or

e. CDOT has reasonable grounds to believe that the public health, welfare, or safety imperatively requires immediate suspension of Certification.

2. Notice. Revocation may occur at any time. Except as provided in subparagraph (3) of paragraph (B) of this Rule, CDOT must provide written notice to the ESB that CDOT is revoking the Business from the ESB Program and state the reasons why CDOT believes the Business is no longer eligible for the ESB Program.

3. Effect on Participation. Revocation will not affect the ESB's status for Contracts that were bid for or awarded prior to the ESB's revocation from the ESB Program. Upon revocation, the Business will be removed from the ESB Program and ESB directory.

C. Reapplication. If its previous ESB Certification is revoked, the Business must wait a period of twelve (12) months from the date of revocation before reapplying for certification. If an ESB graduates from the ESB Program, neither the Business, nor any Affiliate thereof, will be eligible for recertification.

D. Appeals. The procedures contained in §§ 24-4-104 and 24-4-105, C.R.S. will apply to any graduation from or revocation of ESB Certification.

2 CCR 604-1, ch. 3

44 CR 12, June 25, 2021, effective 7/15/2021