Commercially useful function: making sure your DVBE supplier counts

The standard

Military and Veterans Code §999(b)(5)(B) defines the test. The DVBE must be responsible for executing a distinct element of the contract work; actually perform, manage or supervise it; perform work normal for its business; and — for products and materials — be responsible for negotiating price, determining quality and quantity, ordering, and making payment. It also may not subcontract more than normal industry practice, and a firm that only passes funds through to create the appearance of DVBE involvement does not qualify.

What a supplier’s CUF looks like

For materials, the DVBE should be the one doing the buying and taking the risk. On every order Tower:

• Negotiates price and sets quantities with you and with the manufacturer or distributor
• Places the order in its own name
• Takes title to the goods
• Pays the manufacturer or distributor itself, whether or not you have paid yet
• Invoices you and stands behind delivery, returns and warranty issues

Red flags that can cost you the credit

Reviewers look for arrangements where the DVBE adds no real function:

• The prime negotiates price directly with the manufacturer and the DVBE only processes paperwork
• The prime pays the manufacturer directly instead of paying the DVBE
• The DVBE does not normally sell the type of goods it is quoting

Documentation to keep

Keep the DVBE’s written quote (it backs the Certified DVBE Summary), purchase orders issued to the DVBE, the DVBE’s invoices, and your proof of payment to the DVBE. Those records feed the CEM-2402S final utilization report at the end of the contract.