Purchasing Goods and Services from Targeted Group Businesses
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Last Updated: June 2008

Responsible University Officer:
  • Senior VP System Academic Administration,Chief Financial Officer

Procedure Contact:
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PROCEDURE

Introduction
Annually, the President establishes a goal for procurement from historically underutilized businesses, that is, certified small businesses owned by women, minorities or persons with a disability. The focus of this goal is Minnesota, state certified, Targeted Group Businesses (TGBs).

The success of the TGB program depends primarily on buyers who purchase goods and services for the University. This includes college and departmental buyers and Purchasing Services buyers.

Purchases under $10,000
College and departmental buyers determine the vendor from which the purchase should be made. If the goods and services are available from an Internal Service Organization (ISO), the buyer should contact the ISO to place an order or obtain a price quote. If the goods or services are available on a U-wide contract, the buyer should contact the contract holder to place an order or obtain a price quote.

Note: Some TGBs have University-wide contracts. These contracts will be designated as woman, minority or disability owned business in the U-wide Contract book.

If the goods and services are not offered by an ISO or U-wide contract holder, the buyer should make every effort to determine if a certified TGB is available AND offers competitive pricing.

TGB Directory
To determine if a certified TGB is available for the goods or services you are purchasing, refer to the Directory of Minority, Women and Disability Owned Businesses. The directory is available in paper format from the small Business Office (624-0575 or 624-2095).

The directory is also published electronically at Materials Management Division, State of Minnesota.

Purchasing Procedure

  1. Choose a category from the directory that fits the description of your purchase.

  2. Select one or more TGBs with which to place an order or obtain a price quote.

    When an invoice to a TGB has been paid, credit towards the college or department TGB goal is acknowledged in the area report that is sent to each Super User. This report will include purchases from businesses owned by women, minorities and people with disabilities who are NOT certified as TGBs but are certified by other approved agencies.

    Requisitions for orders of $10,000 or more are handled by the Purchasing Services department unless the purchase is being made from a U-wide contract.

    Purchases of $10,000 or More
    Purchasing Services reviews all requisitions and prepares them for bidding. TGBs will be included in the bidding process whenever applicable. If a qualified EDB bid falls within 4% of the lowest non-EDB or non-TGB vendor, the department is expected to accept the bid of the EDB vendor. If a qualified TGB bid falls within 6% of the lowest non-EDB or non-TGB vendor, the department is expected to accept the bid of the TGB vendor.

    Purchasing Services may "set aside" certain requisitions for TGB vendors only. The buyer must obtain permission from the requesting department before setting aside any purchase.

    When the anticipated purchase is of a complicated nature, departments may prepare a Request For Proposal (RFP) in lieu of the bidding process. Purchasing Services will determine if TGBs or WMDBEs should be included in the RFP process as subcontractors. Standard language will be added to the RFP which instructs the proposers on how to include TGBs and WMDBEs. The process of including TGBS and WMDBEs as subcontractors is known as "Second Tier Contracting".

    Purchasing Construction
    All construction projects over $10,000 will have language pertaining to the Targeted Group Business Program. Projects from $1000,000 and up will contain bidding instructions about the Penalties and Incentives Plan. Certain exceptions to the aforementioned will be kept current according the the availability of TGBs.

    Construction Bid Opening:

    A representative of the Small Business Office will:
    - attend bid openings when there is a goal to tabulate bids according to the penalties/incentives plan.
    - tabulate inclusions of alternates
    - advise the project manager of the lower bidder.

    Determining awarded construction bid with goal.

    The Small Business Office will:
    - tabulate inclusions of alternates
    - communicate with project manager throughout awarding and progress of project
    - verify that listed TGBs are certified to do the work listed on the bid
    - contact each TGB subcontractor to verify agreement with prime contractor.
    - send Ògo aheadÓ letter to project manager when all TGBs have been verified.

    Construction Project Progress Tracking:

    The Small Business Office will:
    - follow up with prime contractor for progress of project utilization of TGBs every three months until completion.
    - contact project manager when all affidavits have been received or check off on final payment list.
    - report all subcontracting activities on the quarterly reports.

    The Project Manager will not authorize final payment until all affidavits have been received and are considered acceptable. Should the affidavits prove noncompliance with the original submitted bid, deductions equal to the shortfall in final TGB results will be deducted from the prime contractors payment.

    Monitoring Contract Compliance
    The Small Business office will enter all of the aforementioned steps into the 4-D Data Base for use by the Equal Opportunity Affirmative Action compliance officer. The primary function of the Contract Compliance Office is to ensure that contractors who have an agreement with the University of Minnesota are equal opportunity/affirmative action employers. This is accomplished by monitoring the contractor's Affirmative Action Plan and monthly employment utilization reports as required by state statutes.

    Minnesota statute 363.073 Requirements for EEO / AA states that a contractor and/or subcontractor with awards exceeding $50,000 and who has employed more than twenty full time employees on a single working day in the previous year the contractor will:

    1. designate an Equal Opportunity Officer
    2. submit for approval a written copy of its Affirmative Action Plan or certificate of compliance from the State of Minnesota within fourteen (14) days after receipt of the notice to proceed from the University.
    Along with an Affirmative Action Plan the prime contractor must submit employment utilization reports to the Contract Compliance Coordinator monthly. Subcontractors must submit reports to the prime contractor. The reports are due by the tenth day of each month until the project is completed. This time frame is designed to allow prime contractors to assemble all of the reports from subcontractors so that the summary of the month's employment is accurate and complete. Failure to submit reports may result in the imposition of contract sanctions.

    Problem Resolution
    Problems arising between the University of Minnesota and a Targeted Group Business are normally handled according to Purchasing Services procedures described in the current Vendor Performance Program Policy.

    Occasionally, problems may arise that are TGB specific. If you have a problem with a TGB vendor, call a Purchasing Services buyer or the Small Business Coordinator.

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