Common use of Commercially Useful Function Requirement Clause in Contracts

Commercially Useful Function Requirement. Pursuant to 5 NYCRR § 140.1(f), a MWBE performs a commercially useful function when it is responsible for execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, a MWBE must, where applicable and in accordance with any State Agency specifications, also be responsible, with respect to materials and supplies used on the contract, for ordering and negotiating price, determining quality and quantity and installing. A MWBE does not perform a commercially useful function if its role adds no substantive value and is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of participation. OGS will assess whether a MWBE is performing a commercially useful function by considering the following: 1. the amount of work subcontracted; 2. industry practices; 3. whether the amount the MWBE is to be paid under the contract is commensurate with the work it is to perform; 4. the credit claimed towards MWBE utilization goals for the performance of the work by the MWBE; and 5. any other relevant factors.

Commercially Useful Function Requirement. Pursuant to 5 NYCRR § 140.1(f), a MWBE performs a commercially useful function when it is responsible for execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform a commercially useful function, a MWBE must, where applicable and in accordance with any State Agency specifications, also be responsible, with respect to materials and supplies used on the contract, for ordering and negotiating price, determining quality and quantity and installing. A MWBE does not perform a commercially useful function if its role adds no substantive value and is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of participation. OGS will assess whether a MWBE is performing a commercially useful function by considering the following: (1. ) the amount of work subcontracted; (2. ) industry practices; (3. ) whether the amount the MWBE is to be paid under the contract is commensurate with the work it is to perform; (4. ) the credit claimed towards MWBE utilization goals for the performance of the work by the MWBE; and (5. ) any other relevant factors.