Code of Massachusetts Regulations 425 CMR - STATE OFFICE OF MINORITY AND WOMEN BUSINESS ASSISTANCE (SOMBWA)

26 Jun 2025 --
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425 CMR – State Office of Minority and Women Business Assistance (SOMBWA)

1. Overview

425 CMR governs the State Office of Minority and Women Business Assistance (SOMBWA), which oversees programs that:

Promote equal opportunity for minority- and women-owned businesses (M/WBEs) in Massachusetts

Administer certification, contracting, and compliance programs for state-funded projects

Monitor and enforce participation goals for public contracts

The regulations ensure fair access, accountability, and transparency in state contracting and procurement.

2. Key Provisions

A. Certification of M/WBEs

SOMBWA certifies businesses as minority-owned or women-owned based on ownership, control, and size standards.

Certification is required to participate in state contracts and procurement programs.

B. Contracting Requirements

State agencies and contractors must meet participation goals for M/WBEs.

Contractors must report subcontracting activities and comply with SOMBWA guidelines.

C. Compliance and Reporting

SOMBWA monitors contract compliance, goal achievement, and subcontractor utilization.

Contractors submit periodic reports on M/WBE participation.

D. Enforcement Authority

SOMBWA may:

Investigate non-compliance or fraudulent certification

Impose corrective actions or penalties

Suspend or revoke certification of businesses

Recommend contract termination or financial sanctions for non-compliant contractors

3. Enforcement Mechanisms

Audits and Reviews

SOMBWA audits contracts and business records to ensure compliance with M/WBE participation goals.

Investigations

Complaints or evidence of misrepresentation trigger investigations into certification fraud or contract non-compliance.

Administrative Hearings

Businesses or contractors may contest enforcement actions or decertification through formal hearings.

Sanctions

Penalties include:

Fines or monetary penalties

Contract termination or suspension

Revocation of M/WBE certification

4. Illustrative Cases

Case 1 – Fraudulent Certification

Facts:
A business falsely claimed minority ownership to obtain M/WBE certification.

Issue:
Violation of 425 CMR certification rules.

Action:

SOMBWA investigated ownership documents, tax records, and control of the business.

Outcome:

Certification revoked, business barred from state contracts for 3 years, and fines imposed.

Significance:

Protects integrity of the M/WBE program.

Case 2 – Failure to Meet Contracting Goals

Facts:
A prime contractor failed to meet the required M/WBE subcontracting percentage on a state construction project.

Issue:
Violation of 425 CMR contract participation rules.

Action:

SOMBWA audited subcontracting records and interviewed subcontractors.

Outcome:

Contractor required to pay liquidated damages and submit a plan to achieve M/WBE goals on future projects.

Significance:

Enforces fair opportunity for minority- and women-owned businesses.

Case 3 – Misrepresentation of Subcontractor Participation

Facts:
A contractor falsely reported M/WBE participation to appear compliant with contract requirements.

Issue:
Violation of 425 CMR reporting and compliance rules.

Action:

SOMBWA conducted a field audit and verified subcontractor activity.

Outcome:

Contractor fined, required to correct reporting, and placed on probation for future contracts.

Significance:

Ensures accurate reporting and accountability in public contracting.

Case 4 – Improper Termination of M/WBE Subcontractor

Facts:
A prime contractor terminated an M/WBE subcontractor without cause.

Issue:
Violation of 425 CMR subcontracting and fair treatment rules.

Action:

SOMBWA reviewed contract terms, correspondence, and evidence of performance.

Outcome:

Prime contractor required to reinstate subcontractor, provide financial restitution, and submit compliance training documentation.

Significance:

Protects M/WBE subcontractors from unfair treatment.

Case 5 – Non-Compliance with Reporting Requirements

Facts:
A certified M/WBE failed to submit required annual utilization reports.

Issue:
Violation of 425 CMR reporting regulations.

Action:

SOMBWA notified the business, conducted follow-up review, and requested missing reports.

Outcome:

Business fined and required to submit overdue reports; failure to comply could lead to decertification.

Significance:

Ensures transparency and compliance monitoring.

Case 6 – Denial of Certification Appeal

Facts:
A business denied M/WBE certification appealed the decision, claiming partial minority ownership met requirements.

Issue:
Interpretation of 425 CMR ownership and control standards.

Action:

SOMBWA held an administrative hearing, reviewed corporate documents, and examined decision criteria.

Outcome:

Denial upheld; business advised on corrective measures for future application.

Significance:

Ensures certification integrity and adherence to legal standards.

5. Summary Table of Enforcement Cases

Case	Violation	Enforcement Action	Significance
Fraudulent Certification	False minority claim	Revocation, fines, bar from contracts	Integrity of M/WBE program
Failure to Meet Goals	Subcontracting % not met	Liquidated damages, compliance plan	Fair opportunity for M/WBEs
Misrepresentation	False reporting of M/WBE participation	Fines, corrected reporting, probation	Accountability & transparency
Improper Termination	Subcontractor terminated unfairly	Reinstatement, restitution, training	Protects M/WBE subcontractors
Reporting Non-Compliance	Missing utilization reports	Fines, overdue report submission	Transparency & monitoring
Denial of Certification Appeal	Ownership/control standards dispute	Denial upheld	Certification integrity