Chapter Adm 84

Adm 84.07(1)(c) (c) Holdings by minority persons of the voting interests in the firm.

Adm 84.07(1)(d) (d) The managerial experience, knowledge and expertise of the minority owner or owners in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.07(1)(e) (e) Whether the minority owner or owners have the authority to make policy decisions in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.07(1)(f) (f) The existence of working agreements with nonminority firms.

Adm 84.07(1)(g) (g) The existence of restrictive financing agreements with nonminority firms or financial institutions which impose undue limitations on the minority firm.

Adm 84.07(2) (2) Absentee ownership or titular ownership by an individual who does not take an active role in controlling the business is not consistent with the eligibility criteria for certification as a minority business enterprise.

Adm 84.07 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.08 Adm 84.08 Documentation of control. The department shall require evidence that the minority owner or owners have at least 51% control over the business. Such evidence may include, but is not limited to, the following:

Adm 84.08(1) (1) Documentation that the minority owner or owners have the authority to:

Adm 84.08(1)(a) (a) Solicit, negotiate and sign bids and contracts.

Adm 84.08(1)(b) (b) Incur liabilities for the firm.

Adm 84.08(1)(c) (c) Make final staffing decisions.

Adm 84.08(1)(d) (d) Control savings, checking and other financial accounts.

Adm 84.08(2) (2) Documentation, such as a resume, that the minority owner or owners have managerial experience, knowledge and expertise in such areas as finance, budgeting, personnel, production, marketing and research.

Adm 84.08(3) (3) Documentation that the minority owner’s or owners’ authority to control the business is not restricted in any way.

Adm 84.08 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.09 Adm 84.09 Determination of active management.

Adm 84.09(1) (1) Factors which shall be considered in determining whether the applicant meets the active management requirement include, but are not limited to, the following:

Adm 84.09(1)(a) (a) Whether the minority owner or owners are responsible for making business decisions affecting the day-to-day operations of the firm, such as the purchase of goods, equipment, business inventory and services.

Adm 84.09(1)(b) (b) Whether the minority owner or owners have the responsibility for the supervision of the firm’s employees.

Adm 84.09(1)(c) (c) Whether the minority owner or owners have a working knowledge of the technical requirements of the business.

Adm 84.09(2) (2) Where the actual day-to-day management is delegated to a nonminority individual, the minority management requirement may be met if the minority owner or owners have the ultimate power to hire and fire the manager.

Adm 84.09 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.10 Adm 84.10 Documentation of active management.

Adm 84.10(1) (1) The department shall require evidence that the minority owner or owners actively manage the business. Such evidence may include, but is not limited to, the following:

Adm 84.10(1)(a) (a) Signed purchase orders, invoices and contracts.

Adm 84.10(1)(b) (b) Evidence that the minority owner or owners have delegated work assignments to the firm’s employees.

Adm 84.10(1)(c) (c) Documentation, such as a resume, that the minority owner or owners have the education or work experience in the skill areas required to produce the product or service provided by the business.

Adm 84.10(2) (2) Where the actual day-to-day management is delegated to a nonminority individual, documentation, such as a signed contract, that the minority owner or owners have the ultimate power to hire and fire the manager.

Adm 84.10 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.11 Adm 84.11 Determination of performance of a useful business function. Factors which shall be considered in determining whether the applicant is performing a useful business function include, but are not limited to, the following:

Adm 84.11(1) (1) The degree to which the business has customers other than the state.

Adm 84.11(2) (2) The adequacy of the business’ resources to carry out its business functions.

Adm 84.11(3) (3) The degree to which the business is independent of control or substantial influence by another business. Business relationships which tend to defeat the useful business function include, but are not limited to, shared space, equipment, employees or other resources and financing agreements.

Adm 84.11(4) (4) Whether the business acts as a conduit to transfer funds to a nonminority business, unless doing so is a normal industry practice.

Adm 84.11 Note Note: Brokering arrangements are an example of the type of business activity which might be considered to be acting as a conduit. However, if such brokering arrangements are prevalent within the industry, such as in the oil distribution industry, the department would not consider the business to be acting as a conduit.

Adm 84.11 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.12 Adm 84.12 Documentation of performance of a useful business function. The department shall require evidence that the business is performing a useful business function. Such evidence may include, but is not limited to, the following:

Adm 84.12(1) (1) Contracts, purchase orders, invoices and other documents demonstrating that the business has customers other than the state.

Adm 84.12(2) (2) Evidence that the quantity, type and condition of the business’ equipment and inventory are adequate to carry out its business functions.

Adm 84.12(3) (3) Loan and other financing agreements, leases, employee contracts, payroll records and other documents demonstrating that the business relationships with a nonminority business do not preclude it from performing a useful business function.

Adm 84.12(4) (4) Contracts, purchase orders, invoices and other documents showing that the business has a diversity of suppliers and is not acting as a conduit for a single supplier.

Adm 84.12 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.13 Adm 84.13 Special circumstances. Any one of the following circumstances creates a presumption that the minority business does not satisfy the eligibility standards for certification as a minority business enterprise. In such instances, the applicant has the burden of establishing to the department’s satisfaction that the minority owner or owners meet the eligibility standards despite the existence of one or more of the following factors:

Adm 84.13(1) (1) Firms formed within one year prior to an application for certification.

Adm 84.13(2) (2) Firms whose ownership or control has changed within one year prior to an application for certification.

Adm 84.13(3) (3) Transfers of shares of stock from nonminorities to minorities that occur within one year prior to an application for certification.

Adm 84.13(4) (4) Firms with authorized but unissued shares which, if issued, could result in less than 51% minority ownership of the business or in less than dominant control by minority owners.

Adm 84.13(5) (5) Firms subject to conversion rights which, if exercised, would result in less than 51% minority ownership of the business or in less than dominant control by minority owners.

Adm 84.13(6) (6) Firms in which one or more of the minority owners is a former or current employee of a nonminority person or business firm which has an ownership interest in or a business relationship with the applicant firm, particularly if the nonminority person or firm is in a substantially similar line of business.

Adm 84.13(7) (7) Firms whose directors, management or both, are substantially the same as those of a nonminority firm which has an ownership interest in, an investment in, or a business relationship with the applicant firm, particularly if the nonminority firm is in a substantially similar line of business.

Adm 84.13(8) (8) Firms which share indistinguishable facilities, such as office space, production, distribution or storage facilities, machinery and equipment or employees with a nonminority firm.

Adm 84.13 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87.

Adm 84.14 Adm 84.14 Certification procedure for Wisconsin businesses.

Adm 84.14(1) (1) Certification procedure.

Adm 84.14(1)(a) (a) Any business that meets the standards for certification may file an official application with the department.

Adm 84.14 Note Note: Application forms are available from and should be submitted to: WI Supplier Diversity Program, Department of Administration, P.O. Box 7970, Madison, WI 53707-7970.

Adm 84.14(1)(b) (b) Upon receipt of the application, the department shall review the application for completeness and for compliance with the requirements of s. 16.287, Stats., and s. Adm 84.03.

Adm 84.14(1)(c) (c) The department may request applicants to provide additional information or documentation to provide clarification and substantiation of or to resolve any ambiguities or inconsistencies in their application form.

Adm 84.14(1)(d) (d) The department may impose a time limit of not less than 30 days 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 should be made to the program and should specify the length of time for which the extension is being requested and the reasons for the request.

Adm 84.14(1)(e) (e) The department may conduct an on-site visit of the applicant’s operations. The on-site visit may be scheduled or unannounced. The visit may include, but is not limited to, the following:

Adm 84.14(1)(e)1. 1. A discussion of business operations with the owners;

Adm 84.14(1)(e)2. 2. An examination of the applicant’s physical plant, inventory, machinery and equipment, financial records, customer accounts, and legal records.

Adm 84.14(1)(e)3. 3. A review of the business organizational structure, management responsibilities and labor force characteristics.

Adm 84.14(1)(f) (f) After reviewing and evaluating the entire application, the department shall issue either a notice of certification or a notice of intent to deny certification stating the reasons for denial and offering the applicant the opportunity for an informal hearing under s. Adm 84.18.

Adm 84.14(1)(g) (g) Applicants shall have 30 days from the date of the department’s notification of intent to deny certification to submit a written request for an informal hearing. If no request for an informal hearing is made, the determination to deny certification shall become final and a final notice of denial shall be sent to the applicant within 30 days. The notice shall state the reason for denial and notify the applicant of its appeal rights under ch. 227, Stats., and s. Adm 84.19.

Adm 84.14(1)(h) (h) Each applicant denied certification may reapply for certification no earlier than 12 months from the date of the final notice of denial of certification.

Adm 84.14(2) (2) Denial of certification. The department shall deny certification for any of the following reasons:

Adm 84.14(2)(a) (a) The department determines that the applicant fails to meet the eligibility standards for certification.

Adm 84.14(2)(b) (b) The applicant fails to furnish the department with requested information within the allotted time period.

Adm 84.14(2)(c) (c) The applicant knowingly provides false or misleading information to the department.

Adm 84.14(2)(d) (d) The applicant shares indistinguishable facilities, such as office space, production, distribution or storage facilities, machinery and equipment, or employees with a nonminority firm which is in a substantially similar line of business.

Adm 84.14(3) (3) Length of certification. Once certified, an applicant shall remain certified until the designated expiration date, unless certification is revoked as provided for under s. Adm 84.17.

Adm 84.14 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87; correction in (1) (b), (d), (f), (g), (3) made under s. 13.92 (4) (b) 6., 7., Stats., Register December 2011 No. 672.

Adm 84.15 Adm 84.15 Procedure for certification renewal.

Adm 84.15(1) (1) To maintain its minority business enterprise status, a business must renew its certification prior to the designated expiration date. Failure to do so shall result in decertification.

Adm 84.15 Note Note: The purpose of the certification renewal process is to review a business’ circumstances, organization, ownership, control and management to ensure that it continues to satisfy the eligibility requirements for certification as a minority business enterprise.

Adm 84.15(2) (2) The department shall send the business a certification renewal application form at least 60 days prior to the expiration date of its certification.

Adm 84.15(3) (3) The completed renewal application form must be returned to the department within 30 days of receipt. A reasonable extension may be given by the department for good cause shown by the business. Requests for time extensions should be made to the program and should specify the length of time for which the extension is being requested and the reason for the request.

Adm 84.15(4) (4) The certification procedures described in s. Adm 84.14 shall be followed for processing renewal applications.

Adm 84.15 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87; correction in (3), (4) made under s. 13.92 (4) (b) 6., 7., Stats., Register December 2011 No. 672.

Adm 84.16 Adm 84.16 Decertification criteria.

Adm 84.16(1) (1) The department may decertify a business which it finds no longer qualifies as a minority business enterprise under s. Adm 84.03. Sufficient reasons for decertification include the following:

Adm 84.16(1)(a) (a) The status of the minority business has changed to the extent that it no longer satisfies the requirement of ownership, control and active management of the business or the requirement of performance of a useful business function.

Adm 84.16(1)(b) (b) The minority business fails to submit an application for certification renewal within the allotted time period.

Adm 84.16(1)(c) (c) The minority business fails to comply with a reasonable request from the department for records or information within the allotted time period.

Adm 84.16(1)(d) (d) The minority business knowingly provides false or misleading information in support of its renewal application or in response to the department’s request for records or information.

Adm 84.16(2) (2) A decertified business may reapply for certification no earlier than 12 months from the date of the final notice of decertification. A new application and appropriate documentation shall be submitted to the department as if the business were requesting initial certification. The previous decertification shall be noted in the application.

Adm 84.16 History History: Cr. Register, September, 1987, No. 381, eff. 10-1-87; correction in (1) (intro.) made under s. 13.92 (4) (b) 7., Stats., Register December 2011 No. 672.