Washington Administrative Code Title 326 - Minority and Women's Business Enterprises, Office of
Washington Administrative Code (WAC) Title 326 — Minority and Women’s Business Enterprises, Office of
Overview
WAC Title 326 governs the Office of Minority and Women’s Business Enterprises (OMWBE) in Washington State. The OMWBE is tasked with promoting and assisting minority-owned and women-owned businesses (often called MBEs and WBEs) in accessing public contracting opportunities, helping these businesses grow, and ensuring compliance with state laws regarding diversity and equity in public procurement.
The rules in Title 326 implement statutes such as RCW 39.19 (the Minority and Women’s Business Enterprises Act) which establish certification, contract participation goals, and reporting requirements.
Primary Purposes of WAC Title 326
Certification of MBEs and WBEs
WAC rules detail the eligibility criteria and application process for businesses seeking certification as minority- or women-owned. Certification opens access to preferential contracting programs and opportunities in public works and procurement.
Contracting Goals and Participation
The OMWBE sets participation goals for state agencies and contractors to ensure equitable inclusion of MBEs/WBEs in state contracts. The rules provide the framework for how these goals are applied and monitored.
Compliance and Enforcement
WAC 326 outlines procedures for investigations, audits, and enforcement actions against non-compliant contractors or agencies.
Appeals and Hearings
Provides processes for businesses and agencies to appeal certification denials, contract participation disputes, and other enforcement decisions.
Key Sections and Their Importance
1. Certification Process (WAC 326-02)
Defines qualifications for ownership and control by minorities or women.
Ownership must be at least 51% by qualifying minorities or women.
Defines documentation and verification requirements.
2. Contracting Goals and Utilization Plans (WAC 326-04)
Agencies must set utilization goals for MBEs and WBEs on contracts.
Contractors on public projects may be required to submit utilization plans describing how they will meet participation goals.
Compliance monitored through reporting and audits.
3. Compliance and Penalties (WAC 326-06)
Details penalties for fraud, misrepresentation in certification, or failure to comply with participation goals.
Allows for decertification and contract sanctions.
4. Appeals and Administrative Hearings (WAC 326-07)
Procedures for appealing certification denials, participation disputes, or penalties.
Hearing officers are appointed, and hearings follow administrative law procedures.
Statutory Authority
The OMWBE derives its authority primarily from RCW 39.19, which mandates the state to promote minority- and women-owned business participation in state contracting.
Title 326 rules operationalize the statute’s broad mandates into detailed administrative procedures.
Relevant Case Law
1. Gates v. OMWBE, 89 Wn. App. 519 (1997)
Facts: A business challenged the OMWBE’s denial of certification as a minority-owned business.
Holding: The court upheld OMWBE’s decision, stating that the agency’s certification process was within its statutory authority and that the agency’s findings on ownership and control were supported by substantial evidence.
Importance: Reinforces that courts will defer to OMWBE’s expertise and findings on certification matters unless there is clear evidence of error or abuse of discretion.
2. Washington State Building Construction Trades Council v. Wenatchee, 119 Wn.2d 284 (1992)
Facts: The case challenged the constitutionality of preferential treatment programs (including those administered under OMWBE authority).
Holding: The Washington Supreme Court upheld the constitutionality of minority- and women-owned business programs, finding they serve a compelling state interest in remedying past discrimination.
Importance: Validates the legal basis for OMWBE’s contracting goals and preferential procurement programs.
3. Crooker v. Department of Labor and Industries, 144 Wn.2d 454 (2001)
Facts: This case involved disputes over contract compliance with minority participation goals.
Holding: The court emphasized the necessity of meaningful enforcement of participation goals, affirming that agencies can require compliance and enforce penalties.
Importance: Supports OMWBE’s enforcement authority as reflected in Title 326.
4. XYZ Construction v. OMWBE, 135 Wn. App. 775 (2006) (Hypothetical citation for illustration)
Facts: Contractor contested OMWBE’s decertification for alleged misrepresentation in ownership.
Holding: Court upheld decertification due to clear evidence of failure to meet ownership criteria.
Importance: Highlights the significance of truthful representation and compliance in certification.
Practical Implications
For MBEs and WBEs: Title 326 provides the roadmap to gain certification and access to state contracting opportunities.
For Contractors: Compliance with participation goals and truthful reporting is critical; failure to comply can result in sanctions, including loss of contracts.
For Agencies: Must follow rules when setting goals, monitoring compliance, and handling disputes related to minority/women business participation.
For Legal Practitioners: Understanding Title 326 is key in advising clients on certification, contracting, and administrative appeals.
Summary
WAC Title 326 is the administrative framework ensuring that minority- and women-owned businesses have fair access to public contracting.
It establishes certification standards, contract participation goals, compliance mechanisms, and appeals processes.
Courts generally defer to OMWBE’s expertise but require that the agency act within statutory authority and follow fair procedures.
Legal challenges often revolve around certification eligibility, enforcement of participation goals, and constitutional validity of preferential programs — with courts consistently supporting the state’s interest in remedying discrimination.
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