Disadvantaged Business Enterprises (DBE) Program Construction Administration Metro State-Aid Program...
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Disadvantaged Business Enterprises (DBE) Program Construction Administration Metro State-Aid Program March 7, 2013 Terrina White-Vasser/Andrea Robinson MnDOT Office of Civil Rights Slide 2 Global leader in transportation committed to upholding public needs and collaboration with internal and external partners to create a safe, efficient and sustainable transportation network. Core Values Value diversity and cultural capital through inclusion and opportunity and promote collaboration, research and innovation. Critical Issue : Maintain a workforce that reflects the communities we serve. MnDOT Strategic Vision Slide 3 DBE Program Purpose The U.S. DOT Disadvantaged Business Enterprise program provides a vehicle for increasing the participation of Minority Business Enterprises in state and local procurement. U.S. DOT DBE regulations require state and local transportation agencies that receive DOT financial assistance, to establish goals for the participation of DBEs. To ensure that certified DBEs can compete fairly for federally funded transportation-related projects. To assist DBE firms in competing outside the DBE Program. Slide 4 Policy Statement It is the policy of the Minnesota Department of Transportation (MnDOT) that DBEs, as defined in 49 C.F.R. Part 26, and other small businesses, shall have the maximum feasible opportunity to participate in contracts financed in whole or in parts with federal funds. Consistent with this policy and Title VI of 1964 Civil Rights Act, MnDOT will not allow any person or business to be excluded from participation in, denied the benefits of, or otherwise be discriminated against in connection with the award and performance of any U.S. Department of Transportation (USDOT) assisted contract because of sex, race, color, or national origin. MnDOT has established a Disadvantaged Business Enterprise (DBE) program in accordance with the regulations of the DOT, 49 C.F.R. Part 26 to implement this policy. Slide 5 DBE Project Life-Cycle: Beginning to End DBE Project goals (Planning) - When do DBE goals apply? When are they set within MnDOTs procurement process? How are goals set for projects? Contract Clearance - Who is responsible for ensuring goals are met? Commercially Useful Function (CUF) Counting DBE Credit/Trucking Submitting a Responsible Bid (Good Faith Efforts) The Good Faith Effort(GFE) review by DBE Specialist Items which may be reviewed in assessing GFEs Slide 6 DBE Project Life-Cycle (Cont.) Reconsideration Process - Contract Compliance (Post Award DBE Monitoring) On-Site Reviews Replacement of DBEs Prompt Payment Contractor Payment Forms - Final Payment Affidavit DBE Commitments vs. Payments Slide 7 Process Flow Prime Solicit DBEs Request Return Goal OCR Staff Final Payment Submit GFE Post Award Project Clearance Project Letting Project Goal Prime OCR Staff Project Engineer OCR Staff Prime Project Engineer Submit TPA Submit CPF Prime OCR Staff Slide 8 DBE Goals must be set on any contract(s) financed in whole or in part with federal funds. We review the following when setting goals on any given project on a case by case basis; [project location, project size, sub contracting opportunities, work types & availability (ready, willing & able) of DBEs] Ultimately the Prime Contractors are held to meet the goals identified on the project. However, it is the responsibility of all subs to work closely with the Prime in meeting those goals. What happens if a goal is not met at the time one is set; What happens if a goal is not met throughout the monitoring of the project; DBE Project Goals When do they apply? How and when are they set? Who is responsible for compliance? What if they are not met? Slide 9 Goal Setting Protocol: Step One Office of Civil Rights (OCR) receives required information from District/State-Aid Office and Special Provisions Engineer Project Breakdown Scopes of Work Cost Estimate Advertisement Date Letting Date Anticipated Start Working Days Any Pertinent Project-related Information Slide 10 Goal Setting Protocol (Cont.): Step Two Identifying Scopes of Work DBEs Can perform Bituminous (Pavement, Sawing, Mill, Seal Coats, etc.) Concrete (Bridge, Pavement, Sawing, etc.) Electrical (Supplies Installation, Signals, etc.) Excavation (Clear & Grub, Demolition, Removal of Curb & Gutter, etc.) Fencing (Ornamental, Wire, Chain, Wood, Guardrails, etc.) Landscaping (Mulching, Silt fence, Erosion Control, etc.) Pavement Marking (Interim, Removal, Epoxy, etc.) Materials (Aggregate, RipRap, Oil, etc.) Misc. (Utilities, Drainage, Painting Planning (Traffic Control, Signing, Surveying, Consulting, etc.) Slide 11 Goal Setting Protocol (Cont.): Step Two (Cont.) Identifying Scopes of Work DBEs Can perform Sewer (Installation, RC Pipe, Irrigation, etc,) Rebar/Steel (Installation, Erection, Placement, etc.) Trucking (Grading, Hauling, etc.) Walls (Noise, Retaining, etc.) Other (Any other scopes that may be a part of THIS project) Slide 12 Goal Setting Protocol (Cont.): Step Three Arriving at an Overall DBE Project Goal How is it done? What is the Purpose? Step Four Exclusion of Scopes of Work Why? What are the key factors to consider when excluding work Step Five Establishing a final Project Goal Slide 13 Goal Setting Protocol (Cont.): Step Six Final Approval and Signature from OCR Director Step Seven DBE Project Goal is sent to MnDOT Special Provisions Engineer/State-Aid Engineer Step Eight Project is advertised according to relevant schedule and appropriate Letting Slide 14 Goal Setting Protocol (Cont.): Questions? Slide 15 Contract Clearance: Meet The Established Goal On The Project!!!!! Meet the DBE goal on a project or demonstrate Good Faith Efforts. The bidder must show that it took all necessary and reasonable steps to achieve a DBE goal or other requirements of 49 C.F.R. Part 26 which, by their scope, intensity, and appropriateness to the objective, could reasonably be expected to obtain sufficient DBE participation. (49 C.F.R. 26.53) Slide 16 Contract Clearance (Cont.): Goal Is Met Commercial Useful Function (CUF) DBE firms must perform at least 30% of subcontract 26.55 (1) A DBE 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, the DBE must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself. To determine whether a DBE is performing a commercially useful function, you must evaluate the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance of the work, and other relevant factors. (2) A DBE does not perform a commercially useful function if its role 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 DBE participation. In determining whether a DBE is such an extra participant, you must examine similar transactions, particularly those in which DBEs do not participate. (3) If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force, or the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, you must presume that it is not performing a commercially useful function. Slide 17 Contract Clearance (Cont.): Bottom Line MnDOT OCR must determine the value of the work actually performed by the DBE(s) with their own equipment and forces in order to apply it towards the DBE Goal. Forms (Assist OCR in the determination) Exhibit As Bidders List Advertisements and Quotes Slide 18 Counting DBE Credit/Trucking (Cont.): 26.55 How is DBE participation counted toward goals? (a) When a DBE participates in a contract, you count only the value of the work actually performed by the DBE toward DBE goals. (1) Count the entire amount of that portion of a construction contract (or other contract not covered by paragraph (a)(2) of this section) that is performed by the DBE's own forces. Include the cost of supplies and materials obtained by the DBE for the work of the contract, including supplies purchased or equipment leased by the DBE (except supplies and equipment the DBE subcontractor purchases or leases from the prime contractor or its affiliate). (2) Count the entire amount of fees or commissions charged by a DBE firm for providing a bona fide service, such as professional, technical, consultant, or managerial services, or for providing bonds or insurance specifically required for the performance of a DOT-assisted contract, toward DBE goals, provided you determine the fee to be reasonable and not excessive as compared with fees customarily allowed for similar services. (3) When a DBE subcontracts part of the work of its contract to another firm, the value of the subcontracted work may be counted toward DBE goals only if the DBE's subcontractor is itself a DBE. Work that a DBE subcontracts to a non-DBE firm does not count toward DBE goals. (b) When a DBE performs as a participant in a joint venture, count a portion of the total dollar value of the contract equal to the distinct, clearly defined portion of the work of the contract that the DBE performs with its own forces toward DBE goals. Slide 19 Counting DBE Credit/Trucking (Cont.): 26.55 d) Use the following factors in determining whether a DBE trucking company is performing a commercially useful function: (1) The DBE must be responsible for the management an