Title of Regulation: 7VAC13-20. Regulations to Govern the Certification of Small, Women-Owned, and Minority-Owned Businesses (amending 7VAC13-20-80, 7VAC13-20-140, 7VAC13-20-150, 7VAC13-20-160, 7VAC13-20-200; adding 7VAC13-20-155).

Statutory Authority: § 2.2-1606 of the Code of Virginia.

Effective Date: October 4, 2017.

Agency Contact: Reba O'Connor, Regulatory Coordinator, Department of Small Business and Supplier Diversity, 101 North 14th Street, 11th Floor, Richmond, VA 23219, telephone (804) 593-2005, or email reba.oconnor@sbsd.virginia.gov.

Summary:

The amendments are promulgated as a result of legislation enacted at the 2017 Session of the General Assembly. The amendments (i) extend the small, women-owned, and minority-owned (SWaM) certification period from three years to five years (Chapter 836); (ii) provide that any out-of-state business applying for certification in Virginia as a SWaM business must possess the equivalent certification in its home state as a prerequisite for approval in Virginia and provide that an out-of-state business with a state of origin that does not have a SWaM business certification program is exempt from the requirements of this provision (Chapter 573); and (iii) mandate certification without any additional paperwork of any SWaM business that has obtained certification under any federal SWaM business certification program (Chapter 380).

7VAC13-20-80. Eligible out-of-state business enterprise.

The department may certify a non-Virginia-based business if:

1. It meets the applicable eligibility standards for certification as a small, women-owned, or minority-owned business; and

2. The state in which the business has its principal place of business does not deny a like certification to a Virginia-based small, women-owned, or minority-owned business or provide a preference to small, women-owned, or minority-owned firms that is not available to Virginia-based businesses.

3. Effective July 1, 2017, any out-of-state business applying for certification in Virginia as a small, women-owned, or minority-owned business must have the equivalent certification in the state in which the business has its principal place of business. An out-of-state business that has its principle place of business in a state that does not have a small, women-owned, or minority-owned business certification program shall be exempt from the requirements of this provision.

7VAC13-20-140. Procedures for initial certification of businesses previously certified by other qualifying local, state, or private sector, or federal certification programs.

A. A business certified by the department under this section shall be certified for a period of up to three five years unless:

1. The certification is revoked by the department or the program issuing the original certification;

2. The business is no longer in business; or

3. The business is no longer eligible as a small, women-owned, or minority-owned business.

B. A business certified under this section is responsible for notifying the department of any change in legal structure, ownership, control, management, or status of the business or its certification within 30 calendar days of such change. Failure to do so may be grounds for revocation of certification.

C. It shall be the responsibility of the certified business to notify the department of any change of name, address, or contact information and to keep the department informed of its current address and contact information. Changes of name and address must be reported to the department in writing within 30 calendar days of such change. Failure to do so may be grounds for revocation of certification. The department shall not be liable or responsible if a certified business fails to receive notices, communications, or correspondence based upon the certified business's failure to notify the department of any change of address or to provide correct address and contact information.

7VAC13-20-150. Procedures for initial certification.

A. Any business that meets the criteria for certification may file an official application with the department.

B. The application will be reviewed initially for completeness. The department may conduct an onsite visit of the business to obtain or clarify any information. The onsite visit may be scheduled or unannounced.

C. The department may request the applicant to provide additional information or documentation to provide clarification and substantiation of certain criteria or to resolve any ambiguities or inconsistencies in an application.

D. The department may impose a time limit in which the applicant must provide the requested information. A reasonable extension may be given by the department for good cause shown by the applicant. Requests for time extensions must be made to the department in writing and should specify the length of time for which the extension is being requested and the reasons for the request. Failure to provide such information or documentation shall render the application administratively closed.

E. After reviewing the application, the department shall issue either a notice of certification or a notice of denial of certification stating the reasons for denial.

F. A business certified by the department under this section shall be certified for a period of three five years unless (i) the certification is revoked before the end of the three-year five-year period, (ii) the business is no longer in business, or (iii) the business is no longer eligible as a small, women-owned, or minority-owned business.

G. The applicant shall be responsible for notifying the department immediately of any change in legal structure, ownership, control, management, or status of the business within 30 calendar days of such change. Failure to do so may be grounds for revocation of certification.

H. It shall be the responsibility of the applicant, the certified business, or both to notify the department of any change of name, address, or contact information and to keep the department informed of the current address and contact information. Changes of name and address must be reported to the department in writing within 30 calendar days of such change. Failure to do so within 30 calendar days of such change may be grounds for revocation of certification. The department shall not be liable or responsible if a certified business fails to receive notices, communications, or correspondence based upon the certified business's failure to notify the department of any change of address or to provide correct address and contact information.

7VAC13-20-155. Procedures for initial certification of businesses certified under certain federal certification programs.

A. Any business that has obtained certification as a small, women-owned, or minority-owned business from an agency of the United States government through a formal, regulatory certification process, other than a self-certification process, may receive the corresponding certification as a small, women-owned, or minority-owned business from the department by filing an application with the department.

B. The application will be reviewed initially for completeness. The application need not include additional paperwork beyond that necessary to (i) accurately identify the business name, type, location, and ownership; (ii) provide proof of the corresponding federal certification, including the duration of such certification; and (iii) provide contact information for the designated representative of the business.

C. After reviewing the application, the department shall issue either a notice of certification or a notice of denial of certification stating the reasons for denial.

D. A business certified by the department under this section shall be certified for a period of five years unless (i) the certification is revoked before the end of the five-year period, (ii) the business is no longer in business, or (iii) the corresponding federal certification of the business expires or is otherwise revoked or terminated.

E. The applicant shall be responsible for notifying the department immediately of any change in status of the business or its corresponding federal certification within 30 calendar days of such change. Failure to do so may be grounds for revocation of certification.

F. It shall be the responsibility of the applicant, the certified business, or both to notify the department of any change of name, address, or contact information and to keep the department informed of the current address and contact information. Changes of name and address must be reported to the department in writing within 30 calendar days of such change. Failure to do so within 30 calendar days of such change may be grounds for revocation of certification. The department shall not be liable or responsible if a certified business fails to receive notices, communications, or correspondence based upon the certified business's failure to notify the department of any change of address or to provide correct address and contact information.

7VAC13-20-160. Procedures for renewal of certification or recertification.

A. To maintain its certification status, a certified business must apply to renew its certification prior to the end of the three-year five-year certification period using the forms and procedures specified by the department.

B. The certification of a business that fails to apply for renewal or recertification prior to the end of the three-year five-year certification period shall terminate automatically on the expiration of the certification.

C. The department may, but in no event shall be required to, notify the business of the pending expiration of its certification prior to the certification expiration.

7VAC13-20-200. Criteria for revocation of certification.

The department may revoke the certification of a business that it finds no longer qualifies as a small, women-owned, or minority-owned business. Grounds for revocation of certification may include the following:

1. The organization, structure, management, or control of the certified women-owned or minority-owned business has changed to the extent that it no longer satisfies the requirement of ownership, control, and active management of the business by women or minority individuals.

2. The number of employees or revenues exceeds the requirements for certification of a small business or the small business no longer satisfies the requirements to be independently owned and operated.

3. The business fails to submit the required documentation or to comply with a reasonable request from the department for records or information within the allotted time.

4. The business knowingly provides false or misleading information in support of its initial application or its application for recertification or in response to the department's request for records or information.

5. The business is based in a state that denies like certifications to Virginia-based small, women-owned, or minority-owned businesses or that provides a preference for small, women-owned, or minority-owned businesses that is not available to Virginia-based businesses.

6. Effective July 1, 2017, any out-of-state business applying for recertification in Virginia as a small, women-owned, or minority-owned business must have the equivalent certification in the state in which the business has its principal place of business. An out-of-state business which has its principle place of business in a state that does not have a small, women-owned, or minority-owned business certification program shall be exempt from the requirements of this provision.