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    Subdivision 1. Definitions. For purposes of this section the following terms have the
meanings given them, except where the context clearly indicates a different meaning is intended.
(a) "Award" means the granting of a contract in accordance with all applicable laws and rules
governing competitive bidding except as otherwise provided in this section.
(b) "Contract" means an agreement entered into between a business entity and the state of
Minnesota for the construction of transportation improvements.
(c) "Subcontractor" means a business entity which enters into a legally binding agreement
with another business entity which is a party to a contract as defined in paragraph (b).
(d) "Targeted group business" means a business designated under section 16C.16,
subdivision 5
    Subd. 2. Small business set-asides. (a) The commissioner may award up to a six percent
preference in the amount bid for specified construction work to small targeted group businesses.
(b) The commissioner may designate a contract for construction work for award only to
small targeted group businesses if the commissioner determines that at least three small targeted
group businesses are likely to bid.
(c) The commissioner, as a condition of awarding a construction contract, may set goals
that require the prime contractor to subcontract a portion of the contract to small targeted
group businesses. The commissioner must establish a procedure for granting waivers from the
subcontracting requirement when qualified small targeted group businesses are not reasonably
available. The commissioner may establish financial incentives for prime contractors who exceed
the goals for use of subcontractors and financial penalties for prime contractors who fail to meet
goals under this paragraph. The subcontracting requirements of this paragraph do not apply to
prime contractors who are small targeted group businesses.
(d) The commissioner may award up to a four percent preference in the amount bid on
procurement to small businesses located in an economically disadvantaged area as defined in
section 16C.16, subdivision 7.
    Subd. 3. Awards to small businesses. At least 75 percent of subcontracts awarded to small
targeted group businesses must be performed by the business to which the subcontract is awarded
or another small targeted group business.
    Subd. 4. Awards, limitations. Contracts awarded pursuant to this section are subject to all
limitations contained in rules adopted by the commissioner of administration.
    Subd. 5. Recourse to other businesses. If the commissioner is unable to award a contract
pursuant to the provisions of subdivisions 2 and 3, the award may be placed pursuant to the
normal solicitation and award provisions set forth in this chapter and chapter 16C.
    Subd. 6. Rules. The rules adopted by the commissioner of administration to define small
businesses and to set time and other eligibility requirements for participation in programs under
sections 16C.16 to 16C.19 apply to this section. The commissioner may promulgate other rules
necessary to carry out this section.
    Subd. 7. Noncompetitive bids. The commissioner is encouraged to purchase from small
targeted group businesses designated under section 16C.16 when making purchases that are
not subject to competitive bidding procedures.
    Subd. 8. Report by commissioner. The commissioner of transportation shall report to
the commissioner of administration on compliance with this section. The information must be
reported at the time and in the manner requested by the commissioner.
History: 1977 c 222 s 1,2; 1978 c 506 s 1; 1979 c 246 s 1; 1980 c 361 s 1,2; 1984 c 544 s
89; 1989 c 352 s 14-17,25; 1990 c 541 s 17-24,29; 1998 c 386 art 2 s 59-63

Official Publication of the State of Minnesota
Revisor of Statutes