Or. Admin. Code § 123-200-1240 - Determination of Management Control
(1) All legal documents and financial
statements must clearly document that the qualifying individual has management
and control of the firm.
(2) The
qualifying individual(s) must hold the highest officer position in the company
(e.g. chief executive officer or president).
(a) In a corporation, the qualifying
individual(s) must control the Board of Directors.
(b) In a partnership, one or more qualifying
owner(s) must serve as general partners, with control over all partnership
decisions.
(c) In order for a
qualifying individual to control a partnership, any non-qualifying partners
must not have the power, without the specific written concurrence of the
qualifying partner(s), to contractually bind the partnership or subject the
partnership to contract or tort liability.
(d) Qualifying individuals and/or firms must
not be subject to any formal or informal restrictions, which limit the
customary discretion of the qualifying owner(s). There can be no restrictions
(i.e., through corporate charter provisions, by-laws, contracts, or any other
formal or informal devices) preventing the qualifying owners from making any
business decisions for the firm without the cooperation or vote of any
non-certified individual.
(3) The qualifying individual must possess
sufficient knowledge, managerial and technical competence, experience, and have
an overall understanding directly related to the type of business in which the
firm seeks certification. The qualifying individual(s) must also be able to
maintain day-to-day control over all operational aspects of the business.
(a) The COBID will evaluate the training and
experience of the qualifying individual based on a variety of factors. In
determining whether qualifying individual controls the applicant firm, COBID
will consider all the facts in the record, viewed as a whole. The qualifying
individual must be able to demonstrate clearly that he or she meets the
following factors. The list is not exclusive and COBID may take additional
training and experience into consideration when making a determination
regarding the qualifying applicant 's qualifications. Factors include:
(A) A college degree in the field of
expertise;
(B) Essential license in
Oregon in the field in which the firm operates (e.g. electrician, plumber,
engineer, or landscape architect , etc.) that is current and
up-to-date;
(C) Experience and/or
training in the primary field of expertise;
(D) Experience in project management in the
primary field of expertise;
(E)
Individual's presence and activity on work site and ability to determine if
work is proceeding in accordance with plans and to supervise field operations,
resolve problems, and answer technical questions for subordinates;
(F) Individual's demonstration of knowledge
in area of expertise during the certification interview process;
(G) Letters of reference from individuals
providing same or similar types of work;
(H) Contracts, proposals, or other related
documents; and
(I) Additional
training and experience related specifically to construction firms.
(i) Has ability to read and interpret
blueprints and specifications.
(ii)
Has independently done take offs and can prepare estimates and bids.
(iii) Can operate necessary equipment (e.g.
excavator, backhoe, dump truck, etc.)
(b) Quality of work performed does not
determine an applicant 's eligibility for certification.
(c) In order to determine that the qualifying
individual(s) has the technical expertise and competence to maintain
operational control , he or she may be required to submit proof of expertise to
include:
(A) A copy of his or her essential
license(s).
(B) His or her
resume.
(4)
The qualifying individual(s) must have responsibility for the critical areas of
business operations and demonstrate the ability to make independent and
unilateral business decisions needed to guide the future of the
business.
(5) The qualifying
individual(s) must possess the power to direct or cause the direction of the
management and policies of the firm and to make day-to-day as well as long-term
decisions on matters of management , policy, and operations.
(6) The qualifying individual is not required
to have hands-on, direct control or expertise in every aspect of the business'
affairs so long as the qualifying individual is able to intelligently use
discretion, critically evaluate, and determine appropriate course of action
based on information presented by employees.
(7) In order to substantiate management and
control of a firm, a qualifying individual(s) cannot engage in outside
employment or other business interests that conflict with the management of the
firm or prevent the applicant from devoting sufficient time and attention to
the affairs of the firm to control its activities.
(8) A qualifying individual may control a
firm even though one or more of the individual's immediate family members (who
themselves are not qualifying individuals) participate in the firm as a
manager, employee, owner, or in another capacity.
(9) When a qualifying individual obtains
ownership or control of a firm and the previous owner or individual in control
is a non-qualifying individual but remains active in some role at the firm, the
qualifying individual must demonstrate to the COBID , by clear and convincing
evidence, that:
(a) The transfer of ownership
or control to the applicant was made for reasons other than obtaining
certification; and
(b) The
applicant actually controls the management , policy, and operations of the firm,
notwithstanding the continuing participation of a non-qualifying individual who
formerly owned or controlled the firm.
(10) In considering an MBE , WBE , or VBE
certification where a non-qualifying individual was formerly controlling the
firm, the COBID may consider the difference between the compensation of the
non-qualifying individual and the qualifying individual as a factor in
determining control .
(11) If the
COBID is unable to determine that the qualifying individual controls the firm,
as distinct from the other individuals, then the qualifying individual has
failed to carry his or her burden of proof concerning control even though they
may participate significantly in the firm's activities.
(12) Non-qualifying individuals may be
involved in an MBE , WBE , and/or VBE firm as owners, managers, employers,
stockholders, officers, and/or directors. Such individuals must not, however,
possess or exercise the power to control the firm or be disproportionately
responsible for the operation of the firm.
(13) The qualifying individual may delegate
various areas of management , policymaking, or daily operations of the firm to
other participants in the firm, regardless of whether these participants are
qualifying individuals. Such delegation of authority must be revocable, and the
certified owner(s) must retain the power to hire and fire any person to whom
they delegate such authority. The managerial role of the certified owner(s) in
the firm's overall affairs must be such that the COBID can reasonably conclude
that the certified owner(s) actually exercises control over the firm's
operations, management , and policy.
(14) The qualifying individual controlling a
firm may use an employee leasing company. The use of such a company does not
preclude the certified individual(s) from controlling the firm if he or she
continues to maintain an employer-employee relationship with the leased
employees.
(15) When a firm
contracts out the actual management of the business to individuals other than
the owner or delegates the management to employees, those persons who have the
power to hire and fire these managers exercise management control .
(16) In determining whether qualifying
individual controls a firm, the COBID may consider whether the firm owns
equipment necessary to perform its work. The business must own or lease
sufficient machinery, equipment, and employees to operate. In making this
determination, the COBID shall compare the operations of the certified firm to
a non-certified firm in the same or similar business. If leasing, it must be a
normal industry practice and the lease must not involve a relationship with a
prime contractor or non-qualifying individual that compromises the control or
independence of the firm as referenced under OAR 123-200-1100(5).
(17) The COBID may grant certification to a
firm only for specific types of work in which the qualifying individual has the
ability to control the firm. To gain certification in an additional type of
work, the qualifying individual needs to demonstrate to the COBID that only its
certified owner(s) controls the firm with respect to that type of work.
(a) The North American Industry
Classification System (NAICS) codes assigned to the firm must describe the
types of work the qualifying individual can control and manage and must
directly relate to the services provided by the firm.
(b) The applicant bears the burden of
providing the necessary, detailed company information to COBID for it to make
an appropriate NAICS code designation and is primarily responsible to ensure
the codes remain current to reflect services provided.
(c) In order for certified individuals to
control a partnership, any non-certified partners must not have the power,
without the specific written concurrence of the certified partner(s), to
contractually bind the partnership or subject the partnership to contract or
tort liability.
Notes
Statutory/Other Authority: ORS 285A.070, 285A.075(1)(a) & ORS 200.025(2)
Statutes/Other Implemented: ORS 200.005, 200.055 & Oregon Laws 2023, Chapter 497
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