Supporting Local Business Enterprises Emergency Declaration Resolution
Summary
The DC Council adopted emergency legislation (PR26-0559) amending the Certified Business Enterprise (CBE) Act of 2005 to strengthen requirements for local business enterprises. The resolution establishes new penalty structures requiring beneficiaries to pay the difference between required and actual CBE subcontracting amounts, prohibits subcontracting to entities with ownership interests, and expands the definition of beneficiary to include non-profit entities. The legislation also creates uniform enforcement hearing procedures and invoicing requirements.
What changed
The DC Council passed emergency legislation introducing eight key amendments to the CBE Act affecting government-assisted projects. Key changes include: (1) a new penalty structure requiring beneficiaries to pay the dollar difference between required and actual CBE subcontracting for the 35% spending goal; (2) prohibition on subcontractors holding ownership interests in the enterprise they subcontract to; (3) waiver authority for developer, acquisition, and general contractor fees disproportionate to equity investment; (4) uniform hearing procedures for CBE Act enforcement; (5) expanded beneficiary definition to include non-profits; (6) 30-day invoicing requirement for undisputed work on government projects with mandatory subcontractor payment upon District payment; (7) independent ownership/operation requirement for local business enterprise certification; (8) CBE joint venture interest holders must perform work equal to or greater than their percentage ownership.
Beneficiaries of District-assisted projects must immediately review and update subcontracting policies to ensure compliance with the new 35% CBE spending goal, verify no prohibited ownership interests exist in subcontractors, and implement 30-day invoicing cycles with timely payment to subcontractors. Certified business enterprises in joint ventures should confirm their work percentage matches or exceeds their ownership interest. Non-profit entities newly defined as beneficiaries should assess their compliance obligations under the CBE Act.
What to do next
- Review and update subcontracting policies to ensure compliance with the 35% CBE spending goal
- Verify that no prohibited ownership interests exist in proposed subcontractors
- Implement 30-day invoicing cycles for undisputed work on government-assisted projects
Penalties
Beneficiaries must pay the difference between the dollar amount required for CBE subcontracting and the actual dollar amount subcontracted to CBEs
Source document (simplified)
Under Council Review
- LIMS Home
- Legislation Detail
PR26-0559 - Supporting Local Business Enterprises Emergency Declaration Resolution of 2026
- Introduced
- Final Reading
- Adopted
Introduced by Chairman Mendelson at the request of the Mayor Committee Referral Retained by the Council with comments from the Committee on Committee of the Whole, Subcommittee on Local Business Development
Legislative History
Feb 26, 2026
PR26-0559 Introduced by Chairman Mendelson at Office of the Secretary View Introduction
Mar 03, 2026
Retained by the Council with comments from the Committee on Committee of the Whole, Subcommittee on Local Business Development
Mar 31, 2026
Legislative Meeting
- └ Postponed to: Next Legislative Meeting
Other Documents
Legislation Text
Page 1 / 4 Zoom 100% MURIEL BOWSER MAYOR February 26, 2026 ‘The Honorable Phil Mendelson Chairman Council of the District of Columbia John A. Wilson Building 1350 Pennsylvania Avenue, NW, Suite 504 Washington, DC 20004 Dear Chairman Mendelson: Enclosed for consideration and adoption by the Council of the District of Columbia is the “Supporting Local Business Enterprises Emergency Declaration Resolution of 2026,” the “Supporting Local Business Enterprises Emergency Amendment Act of 2026,” the “Supporting Local Business Enterprises Temporary Amendment Act of 2026,” and the “Supporting Local Business Enterprises Amendment Act of 2026.” The resolution and accompanying emergency, temporary and permanent bills amend the Small and Certified Business Enterprise Development and Assistance Act of 2005 (“CBE Act”), by clarifying the qualifications for certain certified business enterprise (“CBE”) categories, enhancing existing penalties, clarifying relevant contracting and subcontracting requirements, and establishing invoicing and payment requirements. More specifically, these amendments: (1) propose a new penalty structure that would require a beneficiary to pay the difference between the dollar amount it was required to subcontract to CBEs and the actual dollar amount subcontracted to CBEs; (2) prohibit beneficiaries from subcontracting any of their 35% spending goal to an enterprise in which the beneficiary has an ownership interest; (3) waive developer, acquisition, and general contractor fees that, when totaled, are unreasonably disproportionate to the percentage of its equity investment in the project; (4) establish uniform hearing procedures for enforcement actions under the CBE Act; (5) expand the definition of beneficiary to include non-profit entities; (6) require beneficiaries to invoice the District for undisputed work performed on a government assisted project every 30 days, and following receipt of payment by the District, to pay subcontractors for work properly invoiced and satisfactorily performed; (7) require applicants for certification as a local business enterprise to be independently owned and operated: (8) require each CBE holding an interest in a certified joint venture that is selected as a beneficiary to perform a percentage of the work that is equal to or greater than its percentage interest in the joint venture. These changes will strengthen the Distriet’s CBE laws and help strengthen the local business community. urge the Council to take prompt and favorable action on the enclosed legislation. Sincerely, 5
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