1. Evaluating Commercially Useful Function
Business Services
Small Business and DVBE Program
Department of Water Resources
Commercially Useful Function (CUF)
CCR
Government Code 14837
Military and Veterans Code 999

2. Commercially Useful Function (CUF) legislation was enacted in January 2006 and relates to the department’s procurement and contracting evaluation and award activities.
CUF evaluation is required when certified small / micro or DVBE businesses respond to department solicitations, or are identified as subcontractors, in relation to DWR procurements for commodities, IT goods / services, personal services (including A&E) and construction contracts.
CUF is an evaluation that establishes whether the SB/MB or DVBE firm meets established CUF criteria (CCR ).
What is CUF?

3. To prevent SB/DVBE Businesses from acting as a “pass-through” or “front”.
To prevent contractors from using SB or DVBE contractors or suppliers who artificially meet SB and DVBE socio-economic objectives.
To assure the selected SB or DVBE firm meets CUF regulatory requirements.
WHY IS CUF EVALUATED?

4. Performs work that is normal for its business services and functions1.
Is responsible for the execution of a distinct element of work for the contract 2.
Carries out contractual obligations by actually performing, managing, or supervising the work involved 3.
Performs work that is normal for its business services and functions 4.
Is not further subcontracting a portion of the work that is greater than expected to be subcontracted by normal industry practices 5.
Is responsible, with respect to products, inventories, materials, and supplies required for the contract, for negotiating price, determining quality and quantity, ordering, installing, if applicable, and making payment 6.
Its role is not an extra participant in the transaction, contract or project through which funds are passed in order to obtain the appearance of DVBE participation
A certified SB/MB and or DVBE is must meet each of the above points to be considered CUF compliant. CUF Evaluation Criteria

5. Who does the CUF Evaluation?
CUF evaluation is conducted by the DWR contract specialist, buyer or DWR SB/DVBE Advocate during a bid award evaluation to determine a proposed bidder or supplier has met the definition of providing a commercially useful function in relation to the bid for services or goods.
Who does the CUF Evaluation?

6. Affected Solicitations
The following solicitation categories require a CUF review prior to contract award:
Informal services or commodities less than $5,000
SB Option (services and goods)
DVBE Option (services and goods)
Invitation for Bid
Request for Proposal (Primary)
Request for Proposal Secondary
Request for Quote (IT)
Request for Qualifications (A&E)
Commodities Procurements
Rule: CUF is evaluated whenever there are SB/MB or DVBE prime of subcontractors involved in the contract award process.
Affected Solicitations

7. Capturing CUF Information

8. CUF information is obtained when the contractor or supplier completes the following:
Bidder Declaration Form GSPD , Written Version, or
Bidder Declaration Form GSPD , Verbal Version
DVBE Declaration Std. 843
DWR 9526 (pg. 6), Bidder Certification of DVBE Participation
DWR 9666, (pg. 6) Bidder Certification of DVBE Participation
CUF Forms

9. GSPD /106

10. GSPD-05-105/106 Bidder Declaration
Provides centralized location to evaluate the various factors required by law and policy as it relates to small/micro- business and DVBE programs. Contractors must complete this form. During formal bid situations non-compliant bidders are disqualified if they do not complete the subcontractor information.
GSPD /106 Bidder Declaration

11. Bidder Declaration GSPD-05-105 / GSPD-05-106
Identifies the prime as SB/MB or DVBE
Identifies the prime as a broker
Identifies subcontractors
Identifies sub work to be performed or goods provided
Identifies SB/MB or DVBE designated subs
Identifies prime’s SB/DVBE commitment level
Identifies if Sub(s) is in good standing
Identifies level of equipment rental, if applicable

13. DVBE Declaration, Std. 843
The purpose of the Std. 843 is to distinguish DVBE equipment rental brokers from DVBE equipment owners.
Bidders must declare whether or not they are an equipment owner
DVBE equipment owners must have 51% ownership of the equipment.
Bidders are non-compliant if they utilize a DVBE that identifies themselves as an equipment broker in response to DWR equipment rental companies.
The DVBE Declaration must indicate whether the firm is a broker or owner, it must be completed by the DVBE firm. If the Std.843 is not submitted and signed by the DVBE, the bid is rejected.

14. DWR 9526/9666

15. Be sure that information on the 9526/9666 is consistent with the GSPD /106 and vice versa. Review the following and compare between the two document sets:
Contractor information
DVBE subcontractor information
Services/goods provided
Commitment level
Certification information
If you have any questions about the any of the above, don’t hesitate to question the prime firm regarding their services or that of their subcontractor(s). Document in , or file documentation what was said and determined.
DWR 9526/9666

16. CUF EVALUATION

17. Evaluating the Bidder Declaration
Review for
Buyer/Contract Specialist/Advocate
Evaluates
Contract Dynamics
Relationship factors
Consistency with stated CUF regulations
Determines whether the circumstances dictate eligibility to contract with at prime and/or transact business with subcontractors
Who is involved in the contract as:
The prime/subs listed
Relationships between suppliers identified
Role and responsibility of each supplier is described
Business eligibility to contract with the State based upon:
State imposed sanctions resulting in suspension
Possession of applicable licenses and permits
Valid Secretary of State standing for corporations
Certification Factors
Validates bidder claims for preferences and adherence to certain laws
Validity of identified certifications
Certified firms are CUF compliant
Suppliers claiming preference qualify Suppliers proposing DVBE goals qualify
Broker status of DVBE firms
DVBE equipment rental requirements are met
Documenting Defects
Must document all defects found during the evaluation contained in the Bidder Declaration
Subsequent determination can be made as to whether or not it’s material or immaterial
Evaluation Approach
Review form and any attachments for proper completion
Analyze information provided on the form and attachments

18. CUF Evaluation Test Questions2 3
Is the supplier responsible for execution of a distinct element of the contract?
Will the supplier actually be performing, managing, or supervising the contract?
Is the supplier performing work that is normal for its business, services and function?
Is there any further subcontracting that is greater than that expected to be subcontracted by normal industry practices?
Is the supplier responsible for products, inventories, materials and supplies required for the contract, for negotiating price, determining quality and quantity, ordering, installing, and if applicable, and making payment
The supplier/contractor is not an extra participant in the transaction, contract or project through which funds are passed in order to obtain the appearance of DVBE participation
CUF Evaluation Test Questions

19. File documentation cannot be stressed enough when determining a firm’s CUF compliance. Negative CUF evaluations may lead to a bidder’s disqualification from award of contract. This may be followed by a bidder’s protest.
DWR must be able to defend the negative CUF evaluation by fully documenting the reasons for the determination. Therefore, files should include as much information as possible:
Timeline
Phone conversations
Written correspondence
Face-to-face meeting content: minutes/discussion
Additional research and supporting documentation
Contract specialists, buyers and DWR’s SB/DVBE Program Manager must document the procurement/contract file. The rationale for a conclusion and any follow-up measure taken to verify compliance must also be included.
File Documentation

20. File Documentation DWR 9526/9666 DVBE Documentation (pgs 5/6)
Completed Bidder Declaration (GSPD or GSPD )
SB or DVBE Certification
Notes, s, phone call logs with Prime or Subs establishing CUF or non-CUF situations
Web research to determine prime or subcontractor services are consistent with certification UNSPNC Codes and Key Words
File Documentation

21. If you suspect violations of the SB or DVBE program take immediate action. Consult with the DWR Program Manager/Advocate immediately
Document your concerns
Notify the DWR SB/DVBE Program Manager
The SB/DVBE Program Manager must document and notify DGS if the department finds that a bidder has committed any of the following:
Knowingly and with intent to defraud, fraudulently represent that a CUF is being performed by a certified SB/MB in order to obtain or retain a bid preference
Knowingly and with intent to defraud, fraudulently represent participation of a DVBE in order to obtain or retain a bid preference
Suspected Violations

22. Need Assistance?
This address is the centralized contact point for SB/DVBE program information and is monitored by two site administrators.
SB/DVBE Program Manager
You may also call the SB/DVBE program manager directly at:
, or the Advocate Assistant at: