(a) It shall be a violation of this subchapter and penalties shall be assessed if the Department determines that:

(1) A beneficiary, certified business enterprise, or certified joint venture fails to comply with the requirements set forth in § 2-218.46, § 2-218.48, or § 2-218.49a;

(2) A certified business enterprise:

(A) Acted with gross negligence, financial irresponsibility, or misconduct in the practice of a trade or profession;

(B) No longer qualifies as a local business enterprise; or

(C) Misrepresents its capability to the Department; or

(3) A beneficiary, certified business enterprise, or certified joint venture has:

(A) Fraudulently obtained or held certification;

(B) Willfully obstructed or impeded, or attempted to obstruct or impede, a city official or employee investigating the qualifications of a business enterprise that has requested certification;

(C) In any certified business enterprise matter administered under this subchapter:

(i) Fraudulently obtained, attempted to obtain, or aided another person in fraudulently obtaining or attempting to obtain, public moneys to which the person is not entitled under this subsection;

(ii) Willfully falsified, concealed, or covered up a material fact by any scheme or device;

(iii) Made a materially false statement or representation;

(iv) Used a false writing or document that the person knows to contain a false statement or entry;

(D) Aided another person in performing an act prohibited under subparagraphs (A), (B) or (C) of this paragraph;

(E) Furnished substantially inaccurate or incomplete ownership or financial information;

(F) Failed to report changes that affect its eligibility for certification, including relocation of its principal office or change in ownership or control;

(G) Willfully violated any provision of this subchapter or rules adopted pursuant to this subchapter;

(H) Substantially failed to operate and manage a certified joint venture in accordance with § 2-218.39a; There shall be a rebuttable presumption that the failure to operate and manage the joint venture in accordance with the joint venture application was the parties' intent. If the joint venture demonstrates that the failure to operate and manage the joint venture in accordance with the joint venture application was necessary due to unforeseen business or operational issues, the failure shall not be a violation of this subchapter.

(I) Knowingly and willfully submits a monitoring or compliance report or other required subcontracting information containing a materially false statement or knowingly and willfully violates the terms of a subcontracting plan; or

(J) Committed any other cause the Department determines to be sufficiently serious and compelling to affect responsibility as a District government contractor, including revocation, suspension, or debarment by another governmental enterprise for any cause listed in rules and regulations.

(b) It shall be a violation of this subchapter and penalties may be assessed if the Department determines that an individual or business enterprise has willfully failed to cooperate in an audit or investigation conducted by:

(1) The District of Columbia Auditor pursuant to 1-204.55; or

(2) The Chairman of the Councilor the chairperson of the committee of the Council that conducts an investigation pursuant to § 1-204.13.

(c) If the Department determines, in accordance with the procedure set forth in subsection (e) of this section, that an individual or business enterprise:

(1) Has committed a violation of subsection (a)(1) of this section, the Department shall:

(A) Assess a civil penalty of not more than $5,000 for the first offense;

(B) Assess a civil penalty of not more than $15,000 for the second offense; and

(C)(i) For each offense thereafter, the Director shall refer the matter to the Attorney General for the District of Columbia, who may bring a civil action under paragraph (3)(A) of this subsection; provided, that if the Attorney General for the District of Columbia does not bring an action under paragraph (3)(A) of this subsection, the Department shall assess a civil penalty of not more than $25,000 against the beneficiary, certified business enterprise, or certified joint venture; and

(ii) The Department shall refer the matter to the Office of Contracting and Procurement, including matters involving agencies not subject to the Office of Contacting and Procurement authority pursuant to § 2-352.01(b), for investigation. If the Office of Contracting and Procurement determines that more than 2 violations of subsection (a)(1) of this section have occurred, the beneficiary, certified business enterprise, or certified joint venture shall be:

(I) Debarred from consideration of award of contracts or subcontracts with the District government for a period of no more than 5 years; and

(I) Deemed ineligible from consideration for government-assisted projects with the District government for a period of no more than 5 years;

(2) Has committed a violation of subsection (a)(2) or (a)(3) of this section, the Department shall suspend or revoke the certification of the beneficiary, certified business enterprise, or certified joint venture;

(3) Has committed a violation of subsection (a)(3), in addition to the penalties set forth in paragraph (2) of this subsection:

(A) The Attorney General for the District of Columbia may bring a civil action in the Superior Court of the District of Columbia against the beneficiary, certified business enterprise, or certified joint venture and its directors, officers, or principals. An individual, beneficiary, certified business enterprise, or certified joint venture found to be in violation under subsection (a)(3) of this section shall be subject to a civil penalty of the greater of $100,000 or triple the profit earned by the individual, beneficiary, certified business enterprise, or certified joint venture on all contracts awarded; and

(B) The Department shall refer the matter to the Office of Contracting and Procurement, including matters involving agencies not subject to the Office of Contacting and Procurement authority pursuant to § 2-352.01(b), for investigation. If the Office of Contracting and Procurement determines there has been a violation of subsection (a)(3) of this section, the beneficiary, certified business enterprise, or certified joint venture shall be:

(i) Debarred from consideration of award of contracts or subcontracts with the District government for a period of no more than 5 years; and

(ii) Deemed ineligible from consideration for government-assisted projects with the District government for a period of no more than 5 years;

(4) Has failed to use commercially reasonably best efforts to meet the subcontracting requirements established in § 2-218.46, the Department, notwithstanding the penalties in paragraph (1) of this subsection, shall assess a civil penalty equal to 10% of the dollar volume of the contract that the beneficiary or certified joint venture was required but failed to subcontract. For the purposes of this paragraph, the term “commercially reasonable best efforts” shall require that the beneficiary or certified joint venture take all actions that a similarly situated beneficiary or certified joint venture would take to accomplish the goal; provided, that the beneficiary or certified joint venture shall not be required to expend amounts that are disproportionate to the benefit being obtained; and

(5) Has committed a violation of subsection (b) of this section, the Department shall assess a civil penalty of not more than $5,000.

(d) The penalties provided for in subsection (c) of this section shall be in addition to any other causes of action or remedies, legal or equitable, that may be available.

(e)(1)(A) Any person may file with the Department a complaint alleging a violation of this subchapter against an applicant for registration as a certified business enterprise or certified joint venture registered pursuant to this subchapter. The complaint shall be in writing, sworn to by the complainant, and notarized.

(B) The Department shall establish a fraud hotline for reporting violations of this section.

(2) The Department, without a hearing, may dismiss a complaint which it determines to be frivolous or otherwise without merit. If the Department dismisses a complaint, the Department shall prepare a report documenting the following:

(A) A statement detailing the complaint, including the name, address, and telephone number of the person filing the complaint;

(B) The name of the applicant for registration, the certified business enterprise, or the certified joint venture alleged to be in violation of this section;

(C) The facts and legal history considered in rendering the determination; and

(D) Any other information considered in rendering the determination.

(3) The Department shall maintain a record listing all complaints, which shall contain the following information:

(A) The name of the applicant, certified business enterprise, or certified joint venture alleged to be in violation of this subchapter;

(B) The date the complaint was made to the Department; and

(C) A description of the complaint.

(4)(A)(i) If the Department does not determine that a complaint is frivolous or without merit in accordance with paragraph (2) of this subsection, it shall hold a hearing on the complaint within 3 months of the filing of the complaint. The Department shall determine the time and place of the hearing.

(ii) The Department shall cause to be issued and served on the person, the certified business enterprise, or certified joint venture alleged to have committed the violation, hereafter called the “respondent”, a written notice of the hearing together with a copy of the complaint at least 30 days before the scheduled hearing. Notice shall be served by registered or certified mail, return receipt requested, or by personal service.

(iii) At the hearing, the respondent shall have the right to appear personally or by a representative and to cross-examine witnesses and to present evidence and witnesses.

(B) If, after the conclusion of the hearing, the Department determines that the respondent has violated the provisions of this subchapter or regulations issued pursuant to this subchapter, the Department shall issue, and cause to be served on the respondent, a decision and order, accompanied by findings of fact and conclusion of law, and any penalty permitted by subsection (c) of this section.

(C) The Department may at any time reissue a certificate of registration to any business enterprise or joint venture whose certificate has been revoked. The Department may consider whether the business enterprise or joint venture should be required to submit satisfactory proof that conditions within the company that led to the violation have been corrected.

(D) The Department shall have the authority to issue subpoenas requiring the attendance of witnesses and to compel the production of records, papers, and other documents.

(f) The Department may downgrade the certification of registration of a certified business enterprise that ceases to meet the requirements of a particular category of certification; provided that this subsection shall not apply where a certified business enterprise ceases to qualify as a local business enterprise.

(g)(1) A certified business enterprise or certified joint venture may appeal to the Office of Administrative Hearings:

(A) The denial by the Department of an application for certification;

(B) The revocation or change to a previously issued certification; or

(C) An enforcement action taken pursuant to this section.

(2) The Office of Administrative Hearings shall consider the appeal pursuant to Chapter 18A of this title [§ 2-1831.01 et seq.] and Chapter 18 of this title [§ 2-1801.01 et seq.], and to rules promulgated pursuant to those chapters.

(3) The Office of Administrative Hearings shall conduct such hearing based on the record developed by the Department. The decision of the Office of Administrative Hearings shall be the final administrative decision.

(Oct. 20, 2005, D.C. Law 16-33, § 2363, 52 DCR 7503; Mar. 2, 2007, D.C. Law 16-192, § 2132(k), 53 DCR 6899; Sept. 18, 2007, D.C. Law 17-20, § 2062(i), 54 DCR 7052; Apr. 20, 2010, D.C. Law 18-141, § 2(o), 57 DCR 1485; May 27, 2010, D.C. Law 18-159, § 2(e), 57 DCR 3006; June 10, 2014, D.C. Law 20-108, § 2(ii), 61 DCR 3892.)

This section is referenced in § 2-218.75.

D.C. Law 16-192 added subsec. (e).

D.C. Law 17-20, in subsec. (c), substituted “to the Department or to the Commission” for “to the Commission”; and, in subsec. (e), deleted “by the commission” following “denied”.

D.C. Law 18-141 rewrote the section.

D.C. Law 18-159, in subsec. (a-1)(1), substituted “business enterprise” for “person or business enterprise”; in subsec. (b)(1)(A), substituted “the Commission through the Department” for “the Department”; in subsec. (b)(2), substituted “Commission” for “Department” and “Commission” for “Director”; in subsec. (b)(3), substituted “Commission” for “Director”; added subsecs. (b)(4), (5), and (6); and repealed subsec. (d-1), which had read as follows: “(d-1) The Department may at any time reissue a certificate of registration to any firm or joint venture whose certificate has been revoked. The Department may consider whether the firm or joint venture should be required to submit satisfactory proof that conditions within the company that led to the violation have been corrected.”

The 2014 amendment by D.C. Law 20-108 rewrote the section.

For temporary (90 day) addition, see § 2363 of Fiscal Year 2006 Budget Support Emergency Act of 2005 (D.C. Act 16-168, July 26, 2005, 52 DCR 7667).

For temporary (90 day) amendment of section, see § 2132(k) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068).

For temporary (90 day) amendment of section, see § 2132(k) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845).

For temporary (90 day) amendment of section, see § 2132(k) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165).

For temporary (90 day) amendment of section, see § 2062(i) of Fiscal Year 2008 Budget Support Emergency Act of 2007 (D.C. Act 17-74, July 25, 2007, 54 DCR 7549).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).

For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).

Applicability of D.C. Law 20-108: Section 4(a) of D.C. Law 20-108 provided that applications pending as of June 10, 2014, shall not be subject to the provisions of the act.

Section 4(b) of D.C. Law 20-108 provided that, except as provided in § 2-218.46(f), contracts existing or pending as of June 10, 2014, shall not be affected by the provisions of the act.

Section 4(c) of D.C. Law 20-108 provided that the act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan, as certified by the Chief Financial Officer to the Budget Director of the Council in a certification published by the Council in the District of Columbia Register.

Section 4(c) of D.C. Law 20-108 was repealed by D.C. Law 20-155, § 7005.