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Mayor Bowser Introduces Legislation to Strengthen CBE Law and Increase Access to Opportunities for District-Based Businesses

Tuesday, September 29, 2020
Proposed Legislation Filed Today Would Close Loopholes and Increase Access to Business for CBEs

(Washington, DC) – Today, Mayor Muriel Bowser introduced the “Supporting Local Business Enterprises Amendment Act of 2020” to increase access to opportunities for the District’s robust small and local business community. Reflecting feedback from the local business community, the legislation will eliminate loopholes and close gaps in the current Certified Business Enterprise (CBE) Law and further protect the District’s annual spending with District-based businesses.

“Small and local businesses are the backbone of our economy and they represent the dreams and livelihoods of DC residents. With this legislation, we can better ensure that the investments we are making as a District, stay in and benefit our community,” said Mayor Bowser. “This is about giving small and local businesses a fair shot.”

Every year, the District Government spends hundreds of millions of dollars with small and local businesses. Last fiscal year, Mayor Bowser reported that the District Government spent over $890 million with CBEs and announced a goal to spend $910 million in Fiscal Year 2020. This legislation builds on a series of initiatives from the Bowser Administration to better support small and local businesses, including the District’s annual Green Book: Small Business Enterprise (SBE) Opportunity Guide, the District of Columbia Power Line Undergrounding (DC PLUG), and the District’s newly announced Mentor Protégé, created through a partnership between the Department of Small and Local Business Development (DSLBD) and the Department of General Services (DGS).

“Upon my appointment by Mayor Bowser, I quickly learned that DSLBD would only ever be as strong as the laws that govern us,” said DSLBD Director Kristi Whitfield. “This comprehensive reform will further ensure that the District keeps local dollars local and will build up the vigor of our small and local business community.”

The Supporting Local Business Enterprises Amendment Act of 2020 includes the following reforms and provisions:

  1. Ensure District Spending Benefits Local CBEs
  • Businesses applying for and maintaining certification as a local business enterprise will need to be independently owned and operated to ensure no controlling interest exists from out-of-state parent companies.
  • Businesses will no longer be able to utilize the “asset test” as a qualification for eligibility as a local business enterprise to thwart out-of-state, larger businesses from establishing local offices for the purpose of gaining preference for District contracts and procurements.
  • Beneficiaries awarded a contract over $250,000 will be prohibited from fulfilling the mandated 35% subcontracting requirement by subcontracting to a business enterprise that it has an ownership or financial interest in.
  1. Strengthen the District’s Prompt Payment requirements for all CBE subcontractors
  • Beneficiaries will be required to invoice the District every 30 days for work performed by any subcontractor on a government-assisted project, and following receipt of payment by the District, to pay subcontractors for work properly invoiced and satisfactorily performed, further guaranteeing that subcontractors are paid timely and at a regular cadence.
  1. Protect District CBE Spending
  • Beneficiaries who fail to use commercially reasonable best efforts to meet subcontracting requirements will be required to make the CBE community whole by closing the gap between what they should have spent and what they actually spent.

DSLBD will hold a series of CBE Stakeholder Meetings in the coming weeks, and District residents and businesses can visit the DSLBD Website to view the legislation.