Understanding Disadvantaged Business Enterprise Interstate Certification

Wednesday, May 1, 20191:00-3:00 PM ET

TRANSPORTATION RESEARCH BOARD

The Transportation Research Board has met the standards and

requirements of the Registered Continuing Education Providers Program.

Credit earned on completion of this program will be reported to RCEP. A

certificate of completion will be issued to participants that have registered

and attended the entire session. As such, it does not include content that

may be deemed or construed to be an approval or endorsement by RCEP.

Purpose

To discuss interstate certification challenges within the U.S. DOT’s Disadvantaged Business Enterprise (DBE) program.

Learning Objectives

At the end of this webinar, you will be able to:

• Discuss uniform practices in the DBE program• Describe how to make well-reasoned decisions with

interstate certification issues• Identify misunderstandings about interstate

certification• Identify ways to that interstate certification may

streamlined to decrease burdens on DBEs and DOT Recipients

Webinar Outline

Webinar Presenters• Marc Pentino, U.S. DOT Departmental Office of Civil Rights• Martha Kenley, U.S. Federal Highway Administration Department of Civil Rights

ModeratorRuth Byrd-Smith, Allegheny County, Pennsylvania

Webinar Outline• Purpose of interstate certification• Interstate certification data collected by the U.S. Department of Transportation• Interstate certification options• Requesting additional information from the DBE firm• Good cause findings and procedures• Entering interstate certification rejection dispositions into the USDOT database• Question and answer session

The DBE Universe

38,465 Total DBEs As Of 2017

(4.02% increase from 2016)

2017: 18,398 out of state (4.5% increase from 2016)

32.35% of DBE certs are out of state

DBEs Seeking Work in Multiple States Is Expanding

APPLICANTS CERTIFIED DBES

First time applicants are applicants.

Certification Procedures of §26.83 Apply

DBEs are firms that a recipient has determined meet all eligibility requirements.

Interstate Rules Apply:

•Limits what DBEs must submit,•Limits how State B can object to the DBE’s certification;• Procedural protections are in place to ensure DBEs are afforded a

meaningful ability to challenge an objection.

See: 14-0119: Native Sons, Ltd. (Dec. 5, 2015).17-0054: Othon, Inc. (Aug. 14, 2017)17-0117: DES Wholesale, LLC (Mar. 16, 2018) 17-0125: Foursquare Integrated Transport. Planning (May 11, 2018) 18-0071: Subsurface & Tunnel Engineering (Mar. 18, 2019)

Basic Interstate Certification Rule Mechanics

• When a firm is certified in its home state, a UCP may accept the certification without further procedure, but must confirm the firm has a valid certification in its home state. DBEs submit a copy of its home state certification notice; and state B verifies the home state directory or obtains a written confirmation from the home state.

26.85(b)

•If you do not accept a firm’s home state certification, then applicant must provide §26.85(c) materials:

•1. A complete copy of the application form, supporting documentation, and any other information submitted to the home state or any other state related to your certification. •2. Notices (affidavits of no change and any notices of changes) and/or correspondence, the firm has had with State A or other states. This includes denials or decertifications, from any other states where the applicant has applied for certification.• 3. Any appeals to DOT and decisions rendered as a result of appeals.•4.Notarized affidavit or a declaration executed under penalty of perjury affirming that all required information has been submitted and is complete and the information is an identical copy of the information submitted to the home state.

26.85(c)

Certify the firm in your state

•Request a site visit report from the firm’s home state within 7 days of receipt of the required information.

•Determine if you agree with the home state certification decision

Election of §26.85(b) or (c)

UCPs may elect to use either b or c to apply to all interstate applications it receives from a particular state in cases where a reciprocity agreement exists.

In the absence of an agreement, each interstate application must be evaluated on a case-by-case basis.

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§26.85(c) and (e)Request a site visit report, any updates to the site review, and any evaluations, from the firm’s home state within 7 days of receipt of §26.85(c) materials. (If the on-site report is more than 3 years old, as of the date of the firm’s application, State B may require the applicant to affirm that the facts in the on-site report remain true and correct).

Send the firm notice that they are certified in your state and place the firm in the directory within 60 days of receipt of all required information unless you have good cause to believe that the firm’s certification is erroneous or shouldn’t apply in your state.

Section 26.85(e): If you have not received a copy of the site visit review report from State A by a date 14 days after you timely requested it, you may hold action required in abeyance pending receipt of the site visit review report. In this event, you must, no later than 30 days from the date on which you received from an applicant firm all the information required by §26.85(c), notify the firm in writing of the delay in the process and the reason for it.

The §26.85(c) Items1. A complete copy of the application form, supporting documentation, and any other information submitted to the home state or any other state related to your certification. 2. Notices (affidavits of no change and any notices of changes) and/or correspondence, the firm has had with State A or other states. This includes denials or decertifications, from any other states where the applicant has applied for certification.3. Any appeals to DOT and decisions rendered as a result of appeals.4. Notarized affidavit or a declaration executed under penalty of perjury affirming

that all required information has been submitted and is complete and the information is an identical copy of the information submitted to the home state.

Ok to ask for more? No. May firms provide this information electronically? Yes

See: 13-0273: Chartwell Staffing Solutions (Oct. 24, 2014)16-0146: Doon Technologies, Inc. (Feb. 27, 2017) 16-0164: JP and Concepts Company (Mar. 20, 2017)17-0079: DBF Flooring, LLC (Mar. 9, 2018)

The DBE or Recipient Lost or Did Not Keep Information

The rule does not prohibit state B from conveying to the firm that the information it provided from its home state is missing 26.85(c) items and encouraging to submit them if they are in their possession.

In addition, the rule encourages State B to attempt to obtain the information directly from State A

See:17-0103: Tarra Enterprises, Inc. (Dec. 18, 2017)16-0165: Northwest Rubber Extruders, Inc. (Apr. 6, 2017).

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Notice of Good Cause To Deny Interstate Application

The notice informing the firm that you have determined the home state certification is erroneous or does not apply in your state must include the following:

-- The specific reasons (with particularity) why your determination was made.-- An opportunity for the firm to respond to the determination in writing, in-person at

an informal meeting, or both. The firm may elect to have its meeting by phone.

The applicant firm has the burden of demonstrating that it meets the eligibility requirements with respect to the specific issues raised by the reviewer in State B.

See:18-0072: JDC Secure Solutions, LLC (Mar. 20, 2019)17-0117: DES Wholesale, LLC (Mar. 16, 2018) 17-0125: Foursquare Integrated Transportation Planning, Inc. (May 11, 2018)18-0071: Subsurface & Tunnel Engineering, LLC (App. E.) (Mar. 18, 2019)15-0127: Parr Industries, II, Inc., (Feb. 11, 2016).

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Notice and Related Procedures, cont’d

• If the firm requests a meeting, as State B you must schedule the meeting to take place within 30 days of receiving the request.

• The decision maker for this action must be an individual who is thoroughly familiar with DBE certification standards.

• The application is stayed pending the outcome of this process. • Firms are permitted to proffer new documents in response to the notice of

intent; the rule expressly provides this as an option. • You must consider the information the firm provides in making your final

decision and must consider the firm’s “present circumstances.” • A firm’s response could, in rare cases, form the basis for an additional objection

See:15-0044: Three Oaks Engineering, Inc. (Oct. 16, 2015)15-0046: Belle Fontaine Interests, LLC (Apr. 25, 2016) 17-0041: Power Tool and Supply, Co. (Sept. 1, 2017)

Notice and a Final Decision

TWO LETTERS:

(1) a written notice, specifying good cause reasons;

(2) a final written decision within 30 days of receiving a written response from the firm and/or the meeting with the decision maker, whichever is later.

A final decision is appealable to U.S. DOT in the same manner as any other denial.

See:17-0005: Hawkins Development Group, LLC (April 28, 2017)15-0146: Belle Fontaine Interests, LLC (Apr. 25, 2016)

Good Cause Reasons Reasons for making such a determination may include the following:(i) Evidence that State A's certification was obtained by fraud;(ii) New information, not available to State A at the time of its certification, showing that the firm does not meet all eligibility criteria;(iii) State A's certification was factually erroneous or was inconsistent with the requirements of this part;(iv) The State law of State B requires a result different from that of the State law of State A.(v) The information provided by the applicant firm did not meet the requirements of §26.85(c).

See:17-0053: D.M. Conlon, Inc. (Nov. 21, 2017)18-0129: Porter Construction, Co. Inc. (Feb. 21, 2019)

Good Cause Reasons , cont’d

Reasons for making such a determination may include the following:(i) Evidence that State A's certification was obtained by fraud;(ii) New information, not available to State A at the time of its certification, showing that the firm does not meet all eligibility criteria;(iii) State A's certification was factually erroneous or was inconsistent with the requirements of this part;(iv) The State law of State B requires a result different from that of the State law of State A.(v) The information provided by the applicant firm did not meet the requirements of §26.85(c).

Good Cause Reasons , cont’dReasons for making such a determination may include the following:(i) Evidence that State A's certification was obtained by fraud;(ii) New information, not available to State A at the time of its certification, showing that the firm does not meet all eligibility criteria;(iii) State A's certification was factually erroneous or was inconsistent with the requirements of this part;(iv) The State law of State B requires a result different from that of the State law of State A. (professional versus business)(v) The information provided by the applicant firm did not meet the requirements of §26.85(c).

See:16-0036: Powers Hill Design (July 27, 2016)

NAICS Codes assigned by the home state travel with the DBE firm seeking interstate certification.

A DBE may request additional codes it believes apply to the work it may already perform or seek to perform in the future in State B. You are not to wait for the home state to give the code first.

State B should treat this as a request for an expansion of their assigned codes per §26.71(n).

State B may require an onsite review (including on-line meetings) and request additional information. The home state is under no obligation to perform an additional onsite review, but may do so.

Firm is Certified in State B – Now What?

• The firm is now in your directory.• The requirements of §26.83(i) “notice of

material change” and §26.83(j) the annual affidavit of no change remains a requirement.

• DBE retains its eligibility unless and until a §26.87 proceeding is completed.

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Items on the Horizon

Guidance What steps should a UCP take to ensure that its DBE/ACDBE certification application-review staff are properly trained? (August 2018):

A UCP is responsible for ensuring and documenting the following:The current certification application-review staff successfully complete all 9 certification training modules provided by DOCR before they begin to review certification applications.

Current certification application-review staff view DOCR’s “Recorded Presentation of the Rule,” which describes changes to the DBE rules instituted by the October 2, 2014 final rule before they begin to review certification applications.

The current certification application-review staff complete all new, revised, or updated training modules or materials when DOCR makes them available through its website. Keep accurate training records for all certification application-review staff.

UCP Staff who have not documented their completion of the mandatory training and viewing of the “Recorded Presentation of the Rule,” should not be permitted to review certification applications.

Questions

Marc.Pentino@DOT.GOV

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Martha.Kenley@DOT.GOV

Today’s Speakers

• Ruth Byrd-Smith, Allegheny County, ruth.byrd-smith@alleghenycounty.us

• Marc Pentino, DOT Department of Civil Rights, marc.pentino@dot.gov

• Martha Kenley, FHWA Department of Civil Rights, martha.kenley@dot.gov

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• Credits will be reported two to three business days after the webinar

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