Download - NYSDOT 2010 DBE Program PlanThe NYSDOT Disadvantaged Business Enterprise (DBE) Program seeks to achieve the following objectives (49 CFR §26.1): A. To ensure nondiscrimination in

New York State Department of Transportation

2010

“Disadvantaged Business Enterprise (DBE) Program Plan”

DRAFT COPY

In Association withFederal Highway Administration (FHWA)

In Accordance withCode of Federal Regulations (CFR)Title 49–Transportation, Part 26

Draft Date: January 2010

i

DBE Program Plan

TABLE OF CONTENTS

1 Program Policy, Purpose, Scope and Authority ..............................................................................1—1

1.1 Policy........................................................................................................................................1—1

1.2 Program Objectives .................................................................................................................1—1

1.3 Purpose of DBE Program Plan .................................................................................................1—2

1.4 Prohibited Discrimination........................................................................................................1—2

1.5 Scope .......................................................................................................................................1—2

1.6 Authority and Applicable Laws................................................................................................1—2

1.7 Program Regulations ...............................................................................................................1—3

1.8 Definition of Terms..................................................................................................................1—3

2 Program Responsibilities................................................................................................................... 2-1

2.1 New York State Department of Transportation (NYSDOT)........................................................ 2-1

2.1.1 Audit & Civil Rights Division (ACRD) .................................................................................. 2-1

A. DBE Program Policy and Procedures.................................................................................... 2-1B. DBE Goal Setting and Good Faith Efforts ............................................................................ 2-1C. DBE Reporting ...................................................................................................................... 2-2D. DBE Eligibility and Certification .......................................................................................... 2-2E. NYSDOT’s External DBE Spokesperson............................................................................. 2-2

2.1.2 NYSDOT Contracting Offices.............................................................................................. 2-2

A. Office of Construction........................................................................................................... 2-2B. Office of Design .................................................................................................................... 2-3C. Contract Management Bureau ............................................................................................... 2-3D. A&E or Non-A&E Contract Sponsoring Groups .................................................................. 2-3E. Purchasing Unit ..................................................................................................................... 2-3

2.2 Sub-recipients (including Government Organizations, Non-Government Organizations andMetropolitan Planning Organizations) .................................................................................................. 2-3

2.2.1 Sub-recipient Adoption of NYSDOT DBE Program Policy & Procedure ............................. 2-4

2.2.2 Sub-recipient Preparation/Submission of DBE Program Document to NYSDOT forApproval.2-4

3 DBE Goal Development.................................................................................................................... 3-1

3.1 Overall Annual DBE Goal ........................................................................................................... 3-1

3.1.1 Establishing Base Figure - Determining Relative DBE Availability ..................................... 3-1

3.1.2 Adjustment to Base Figure ................................................................................................ 3-2

3.1.3 Race Neutral Analysis ........................................................................................................ 3-2

ii

3.1.4 Public Participation and Outreach Efforts ......................................................................... 3-2

3.1.5 Goal Submission ................................................................................................................ 3-3

3.2 Contract Specific Goals .............................................................................................................. 3-3

3.2.1 Construction Contract Goals ............................................................................................. 3-4

3.2.2 A&E Professional Services Contracts ................................................................................. 3-7

3.2.3 Non-A&E Professional Services Contracts ......................................................................... 3-7

3.3 Counting DBE Participation Towards Meeting Goals ................................................................ 3-8

3.4 Counting DBE Participation of Sub-recipients Towards Meeting Annual Goals........................ 3-9

3.4.1 Sub-recipients Adopting the NYSDOT DBE Program ......................................................... 3-9

3.4.2 Sub-recipients With Their Own Approved DBE Program .................................................. 3-9

4 Ensuring DBE Participation (Contract Compliance Oversight) ........................................................ 4-1

4.1 Overall Policy Statement ........................................................................................................... 4-1

4.2 Procedures to Ensure DBE Participation ................................................................................... 4-1

4.2.1 Pre-Bid Procedures ............................................................................................................ 4-1

A. DBE Contractor Notification................................................................................................. 4-1B. DBE Waivers–Pre-Bid Construction Contracts................................................................... 4-1C. DBE Contract Submission Requirements.............................................................................. 4-2D. NYS UCP Directory of Certified DBEs ................................................................................ 4-2E. Recording DBE Commitments.............................................................................................. 4-2

4.2.2 Bid Opening and Contract Award...................................................................................... 4-2

A. DBE Commitment for Contract Award................................................................................. 4-2B. DBE Commitments ............................................................................................................... 4-3C. DBE Waivers–Pre-Bid or Pre-Proposal Submission........................................................... 4-3D. DBE Participation Conditions ............................................................................................... 4-3E. Good Faith Efforts Methodology .......................................................................................... 4-4F. Good Faith Efforts Documentation ....................................................................................... 4-5G. Review of DBE Good Faith Efforts (GFE) ........................................................................... 4-6H. Good Faith Efforts Review Process....................................................................................... 4-9I. Contractor Appeal and Administrative Reconsideration ..................................................... 4-10

4.2.3 DBE Participation Towards Contract Specific Goals (DBE Attainments) ......................... 4-10

A. Credit towards contract specific goals................................................................................. 4-10B. Good Faith Efforts for Substituting DBEs........................................................................... 4-11C. Crediting for DBE Prime Contractors ................................................................................. 4-11

4.3 Contract Performance ............................................................................................................. 4-11

4.3.1 DBE Approval ................................................................................................................... 4-11

4.3.2 Commercially Useful Function......................................................................................... 4-11

A. DBE Management ............................................................................................................... 4-12B. DBE Workforce................................................................................................................... 4-12C. DBE Equipment................................................................................................................... 4-13

iii

D. Equipment Leased From the Prime Contractor ................................................................... 4-134.3.3 Multi-Tier Subcontracting................................................................................................ 4-13

4.3.4 Substitution ..................................................................................................................... 4-13

4.4 Timely Payments ..................................................................................................................... 4-14

5 Monitoring Performance (Contract Compliance).............................................................................. 5-1

5.1 Project Management and Contract Administrative Staff .......................................................... 5-1

5.2 ACRD.......................................................................................................................................... 5-1

5.2.1 Race-conscious Methods (generally construction contracts on which a goal is set) ........ 5-1

5.2.2 Race-neutral Methods (generally contracts on which a goal is 0% or DBE commitmentsand/or attainments exceed the assigned goal)................................................................................. 5-1

5.3 Prime Contractor (Construction Contracts)............................................................................... 5-1

5.3.1 Contractor's DBE Liaison Officer........................................................................................ 5-1

5.3.2 DBE Subcontracts .............................................................................................................. 5-2

5.3.3 DBE Utilization Reporting .................................................................................................. 5-2

5.4 Non-A&E Contracts.................................................................................................................... 5-2

5.5 Sub-Recipients or Project Sponsors........................................................................................... 5-2

5.5.1 Local Sponsor's DBE Coordinator ...................................................................................... 5-2

6 Guidelines for DBE Certification ...................................................................................................... 6-1

6.1 Unified Certification Program (UCP).......................................................................................... 6-1

6.2 UCP Responsibilities .................................................................................................................. 6-1

6.3 Certification Eligibility Requirements ........................................................................................ 6-1

6.3.1 Burden of Proof ................................................................................................................. 6-1

6.3.2 Business Size...................................................................................................................... 6-2

6.3.3 Disadvantaged Group Membership .................................................................................. 6-2

6.3.4 Small Business Administration 8(a) Program .................................................................... 6-2

6.3.5 Individual Determination of Social and Economic Disadvantage...................................... 6-2

A. Socially Disadvantaged ......................................................................................................... 6-2B. Economically Disadvantaged ................................................................................................ 6-3

6.3.6 Independence.................................................................................................................... 6-3

6.3.7 Ownership ......................................................................................................................... 6-3

A. For-Profit Firms..................................................................................................................... 6-3B. Subsidiaries and Affiliates..................................................................................................... 6-4C. Tribal Organizations .............................................................................................................. 6-4

6.3.8 Control ............................................................................................................................... 6-4

iv

6.3.9 Other Considerations......................................................................................................... 6-5

A. Commercially Useful Function ............................................................................................. 6-5B. Pattern of Conduct ................................................................................................................. 6-5C. Present Circumstances........................................................................................................... 6-5D. DBE Cooperation .................................................................................................................. 6-5E. Pre-qualification .................................................................................................................... 6-5

6.3.10 Joint Venture ..................................................................................................................... 6-5

6.4 Application Procedure............................................................................................................... 6-6

6.4.1 Supplemental Documentation .......................................................................................... 6-6

A. Sole Proprietor....................................................................................................................... 6-6B. Limited Liability Company (LLC) ........................................................................................ 6-7C. Corporations .......................................................................................................................... 6-7D. Partnerships ........................................................................................................................... 6-7

6.4.2 On-site Reviews ................................................................................................................. 6-8

6.4.3 On-Site Review Observations and Special Considerations................................................ 6-9

6.4.4 Criteria for Evaluating an Applicant's Eligibility............................................................... 6-10

A. Business Size ....................................................................................................................... 6-10B. Socially and Economically Disadvantaged Status............................................................... 6-10C. SBA Section 8(a) Status ...................................................................................................... 6-11D. Minority Group Membership............................................................................................... 6-11E. Rebuttable Presumption of Disadvantage Status................................................................. 6-12F. Ownership and Control........................................................................................................ 6-12G. Personal Net Worth ............................................................................................................. 6-12

6.4.5 Notification of Certification Determination .................................................................... 6-13

6.4.6 Reciprocal Certification ................................................................................................... 6-13

6.4.7 Renewal of Certification .................................................................................................. 6-13

A. Notification of Change in Circumstances............................................................................ 6-13B. Annual Affidavit of Continuing Eligibility ......................................................................... 6-14

6.4.8 Denials and Reapplication Procedures ............................................................................ 6-14

6.4.9 Removal Procedures (De-certification/Denial) ............................................................... 6-14

A. Initiating Removal ............................................................................................................... 6-146.4.10 Certification Appeal to USDOT ........................................................................................ 6-15

6.4.11 NYSDOT Commodity Code/North American Industry Classification System (NAICS) ..... 6-16

7 Monitoring and Record Keeping ....................................................................................................... 7-1

7.1 Civil Rights Reporting System (CRRS) ........................................................................................ 7-1

7.2 Monitoring Payments to DBEs................................................................................................... 7-1

7.3 Reporting to USDOT .................................................................................................................. 7-1

1—1

Draft Dated: January 2010

1 Program Policy, Purpose, Scope and Authority

1.1 Policy

The New York State Department of Transportation (NYSDOT) is committed to a Civil Rights Programwhich administers and promotes participation of Disadvantaged Business Enterprises (DBEs) inNYSDOT contracting opportunities in accordance with 49 Code of Federal Regulations (CFR) § 26, ascurrently revised.

It is the policy of NYSDOT to ensure nondiscrimination on the basis of race, color, sex or national originin the award and administration of the U.S. Department of Transportation (USDOT) assisted contracts. Itis the intention of NYSDOT to create an equitable environment in which DBEs can compete fairly forcontracts and subcontracts relating to the procurement, contracting and professional service activities ofUSDOT-assisted work.

The Commissioner of NYSDOT is responsible for establishing DBE policy and procedure for theDepartment. The Director of the Division of Audit and Civil Rights, in coordination with all DepartmentDivisions and personnel, is responsible for the development, implementation, administering andmonitoring of the DBE Program for contracts in accordance with this policy. All Department personnel,and local sub-recipients of USDOT assisted contracts, shall adhere to the intent and requirements of thisDBE Program.

This Program applies to all NYSDOT Divisions and local municipalities who are involved with USDOTassisted work and to members of the community that perform or are interested in performing work onNYSDOT contracts. This Program is also applies to NYSDOT’s grant recipients, including MPOs who receive USDOT funding. To obtain additional information on this program, please contact the Audit &Civil Rights Division at:

Audit & Civil Rights DivisionNYS Department of Transportation50 Wolf RoadAlbany, New York 12232

1.2 Program Objectives

The NYSDOT Disadvantaged Business Enterprise (DBE) Program seeks to achieve the followingobjectives (49 CFR §26.1):

A. To ensure nondiscrimination in the award and administration of NYSDOT-assisted contracts inthe Department's highway, transit, and airport financial assistance programs;

B. To create a level playing field on which DBEs can compete fairly for NYSDOT-assistedcontracts;

C. To ensure that the Department's DBE program is narrowly tailored in accordance with applicablelaw;

D. To ensure that only firms that fully meet this part's eligibility standards are permitted toparticipate as DBEs;

1—2


E. To help remove barriers to the participation of DBEs in NYSDOT-assisted contracts;

F. To assist the development of firms that can compete successfully in the marketplace outside theDBE program; and

G. To provide appropriate flexibility to sub-recipients of federal financial assistance in establishingand providing opportunities for DBEs.

This program plan also provides assurance to the USDOT that NYSDOT complies with federal mandatesregarding the Assistance Program for DBEs.

1.3 Purpose of DBE Program Plan

The purpose of this plan is to document:A. Guidance on the regulations as to when, where and by who the program will be administered

B. Interpretations of the regulations for use on NYSDOT or sub-recipient contracts

C. The procedures and criteria for setting department and project level DBE goals

D. The procedures and criteria for evaluating contractor and consultant commitments to DBE goals

E. The procedures to ensure contract level and program level DBE utilization and compliance

F. The procedures for certifying DBE firms

This plan in intended to cover all aspects of the DBE Program which apply to Highway and Bridge Fundswhich are administered through the Federal Highway Administration (FHWA). NYSDOT also receivesUSDOT funding through the Federal Transit Administration (FTA) and the Federal AviationAdministration (FAA), but those programs are not covered in this document.

1.4 Prohibited DiscriminationThe NYSDOT shall not exclude persons from participation in, deny benefits to, or otherwise discriminateagainst any persons in connection with the award and performance of any contract governed by 49 CFR §26 on the basis of race, color, sex, and national origin. The NYSDOT shall not directly, or throughcontractual or other arrangements, use criteria or methods of administration that have the effect ofdefeating or substantially impairing accomplishment of the purpose of this program with respect toindividuals of a particular race, color, sex, or national origin (49 CFR §26.7)

1.5 Scope

This program applies to all USDOT financial assistance (49 CFR §26.3) where the New York StateDepartment of Transportation (NYSDOT) expends federal-aid highway funds authorized under Section1003(b) of the Inter-modal Surface Transportation Efficiency Act of 1991 (ISTEA), Section 1101 (b) ofthe Transportation Equity Act for the 21st Century (TEA-21) in 1998, Pub. L. 105-178, 112 Stat. 107, theSafe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) in2005.

1.6 Authority and Applicable Laws

The USDOT Regulations (49 CFR §26) published in the Federal Register, and as amended, established arequirement that all recipients of USDOT funds establish a Disadvantaged Business Enterprise Program.The regulations are applicable both to NYSDOT's Federal-aid construction and to the non-constructionactivities including consultant and personal service contracts.

1—3


The USDOT's legal authority for its DBE regulations includes Executive Order 11625 (October 13,1971), which required that federal executive agencies develop comprehensive plans and programs toencourage minority business participation. USDOT requires NYSDOT to establish a DBE Program as acondition for receiving USDOT federal funds.

Title VI, Civil Rights Act of 1964. This Act requires non-discrimination in federally assisted programs oractivities on the grounds of race, color, sex, or national origin.

New York Codes, Rules and Regulations (17 NYCRR 35) states: "It is the policy of the New York StateDepartment of Transportation to afford the opportunity for full participation in our free enterprise systemto socially and economically disadvantaged persons by encouraging the utilization of disadvantagedbusiness enterprises in New York State Department of Transportation construction programs."

1.7 Program Regulations

All recipients of USDOT funds are required by 49 CFR § 26 to adopt a DBE Program. The USDOT ischarged with the responsibility and authority for interpreting and regulating the federal DBE related laws.Title 49 of the Code of Federal Regulations (CFR), Part 26 pertains to Transportation and therequirements of the DBE program. Please refer to the USDOT website below for the most currentinformation.http://www.dotcr.ost.dot.gov/asp/dbe.asp

1.8 Definition of Terms

The terms used in this program conform with and have the same meanings as those terms defined in 49CFR §26.1. (See also, NYSDOT Standard Specifications Section 101-02 [current version] for additionaldefinitions of terms.) This partial list of terms is repeated here for reference purposes.

Affiliation has the same meaning the term has in the Small Business Administration (SBA)regulations, 13 CFR § 121.

(1) Except as otherwise provided in 13 CFR § 121, concerns are affiliates of each other when, eitherdirectly or indirectly:(i) One concern controls or has the power to control the other; or(ii) A third party or parties controls or has the power to control both; or(iii) An identity of interest between or among parties exists such that affiliation may be found.

(2) In determining whether affiliation exists, it is necessary to consider all appropriate factors,including common ownership, common management, and contractual relationships. Affiliatesmust be considered together in determining whether a concern meets small business size criteriaand the statutory cap on the participation of firms in the DBE program.

Attainment means the actual percentage of entire value of the contract that a Prime Contractor hasactually paid to certified DBE firms.

Commercially Useful Function (CUF) means that a DBE is considered to perform a CUF when it isresponsible for the execution of a distinct element of work on a contract and carries out itsresponsibilities by actually performing, managing and supervising the work involved in accordancewith normal industry practice. (See NYSDOT Standard Specifications–§ 102-12.)

Commitment means the percentage of entire value of the contract that a Prime Contractor orConsultant has committed to provide to certified DBE firms at the time of the award of the contract.

Compliance means that a recipient has correctly implemented the requirements of the DBE Program.

1—4


Disadvantaged Business Enterprise or DBE means a for-profit small business concern --(1) That is at least 51 percent owned by one or more individuals who are both socially and

economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock isowned by one or more such individuals; and

(2) Whose management and daily business operations are controlled by one or more of the sociallyand economically disadvantaged individuals who own it.

Goal - Contract Level means the specific race conscience goal set for a contract, whichestablishes a percentage of entire value of the contract, work that a Prime Contractor orConsultant would strive to commit to certified DBE firms.

Goal - Overall means a Department wide DBE goal, which accounts for the availability of ready,willing and able DBEs relative to all businesses ready, willing and able to participate on USDOT-assisted contracts (hereafter, the "relative availability of DBEs) which can be adjusted to reflectchanging market conditions, changing DBE capacity, and disparity studies.

Good Faith Efforts (GFE) means the effort necessary to achieve a DBE goal or other requirementof this part which, by their scope, intensity, and appropriateness to the objective, can reasonablybe expected to fulfill the program requirement.

Immediate family member means father, mother, husband, wife, son, daughter, brother, sister,grandmother, grandfather, grandson, granddaughter, mother-in-law, or father-in-law.

Indian tribe means any Indian tribe, band, nation, or other organized group or community ofIndians, including any ANC, which is recognized as eligible for the special programs and servicesprovided by the United States to Indians because of their status as Indians, or is recognized assuch by the State in which the tribe, band, nation, group, or community resides.

Joint venture means an association of a firm and one or more other firms to carry out a single,for-profit business enterprise, for which the parties combine their property, capital, efforts, skillsand knowledge, and in a case which includes a DBE they are responsible for a distinct, clearlydefined portion of the work of the contract and whose share in the capital contribution, control,management, risks, and profits of the joint venture are commensurate with its ownership interest.

NYS Unified Certification Program (NYSUCP) means that New York State utilizes a single DBEcertification process under which a firm would apply to only one agency for DBE certification,and that agency's decision would be honored by all other DBE certifying agencies and all entitieswithin the state that receive USDOT funding assistance (for example, Metropolitan PlanningOrganizations and most airports). There are four agencies in New York State that administer aDBE certification program. They are: NYS Department of Transportation; the Port Authority ofNew York and New Jersey; the Metropolitan Transit Authority; and the Niagara FrontierTransportation Authority.

Noncompliance means that a recipient has not correctly implemented the requirements of theDBE Program.

Operating Administration or OA means any of the following parts of USDOT: the FederalAviation Administration (FAA), Federal Highway Administration (FHWA), and Federal TransitAdministration (FTA). The "Administrator" of an operating administration includes his or herdesignees.

Personal net worth means the net value of the assets of an individual remaining after totalliabilities are deducted. An individual's personal net worth does not include: The individual'sownership interest in the applicant DBE firm; or the individual's equity in his or her primaryplace of residence. An individual's personal net worth includes only his or her own share of assetsheld jointly or as community property with the individual's spouse.

1—5


Primary industry classification means the North American Industry Classification System(NAICS) designation which best describes the primary business of a firm. The NAICS isdescribed in the North American Industry Classification Manual -- United States, current versionwhich is available from the National Technical Information Service, 5285 Port Royal Road,Springfield, VA, 22161; by calling 1 (800) 553-6847; or via the Internet at:http://www.naics.com/search.htm.

Primary recipient means a recipient which receives DOT financial assistance and passes some orall of it on to another recipient.

Principal place of business means the business location where the individuals who manage thefirm's day-to-day operations spend most working hours and where top management's businessrecords are kept. If the offices from which management is directed and where business recordsare kept are in different locations, the recipient will determine the principal place of business forDBE program purposes.

Race-conscious measure or program is one that is focused specifically on assisting only DBEs,including women-owned DBEs.

Race-neutral measure or program is one that is, or can be, used to assist all small businesses. Forthe purposes of this part, race-neutral includes gender-neutrality.

Recipient is any entity, public or private, to which DOT financial assistance is extended, whetherdirectly or through another recipient, by the programs of the FAA, FHWA, or FTA, or who hasapplied for such assistance.

Set-aside means a contracting practice restricting eligibility for the competitive award of acontract solely to DBE firms.

Small Business Administration or SBA means the United States Small Business Administration. SBA certified firm refers to firms that have a current, valid certification from the SBA under the

8(a) BD or SDB programs. Small business concern means, with respect to firms seeking to participate as DBEs in DOT-

assisted contracts, a small business concern as defined pursuant to section 3 of the Small BusinessAct and Small Business Administration regulations implementing it (13 CFR § 121) that alsodoes not exceed the cap on average annual gross receipts specified in 49 CFR §26.65(b).

Socially and economically disadvantaged individual means any individual who is a citizen (orlawfully admitted permanent resident) of the United States and who is --(1) Any individual who a recipient finds to be a socially and economically disadvantaged

individual on a case-by-case basis.(2) Any individual in the following groups, members of which are rebuttable presumed to be

socially and economically disadvantaged:(i) "Black Americans," which includes persons having origins in any of the Black racial

groups of Africa;(ii) "Hispanic Americans," which includes persons of Mexican, Puerto Rican, Cuban,

Dominican, Central or South American, or other Spanish or Portuguese culture or origin,regardless of race;

(iii) "Native Americans," which includes persons who are American Indians, Eskimos, Aleuts,or Native Hawaiians;

(iv) "Asian-Pacific Americans," which includes persons whose origins are from Japan, China,Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand,Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories ofthe Pacific Islands (Republic of Palau), the Commonwealth of the Northern Marianas

1—6


Islands, Macao, Fiji, Tonga, Kirbati, Juvalu, Nauru, Federated States of Micronesia, orHong Kong;

(v) "Subcontinent Asian Americans," which includes persons whose origins are from India,Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal or Sri Lanka;

(vi) Women;(vii) Any additional groups whose members are designated as socially and economically

disadvantaged by the SBA, at such time as the SBA designation becomes effective. Sub-recipient (for the purposes of this document) is any entity, public or private, who receives

USDOT financial assistance through NYSDOT (sometimes referred to as a Local Sponsor). USDOT-assisted contract means any contract between a recipient and a contractor or consultant

(at any tier) funded in whole or in part with DOT financial assistance, including letters of creditor loan guarantees, except a contract solely for the purchase of land.

2-1


2 Program Responsibilities

2.1 New York State Department of Transportation (NYSDOT)

As a recipient of USDOT financial assistance on contracted services and materials, NYSDOT is requiredto implement and administer a DBE program according to the requirements described in 49 CFR 26 on allcontracts which contain any USDOT financial assistance (49 CFR §26.3). As provided within 49 CFR §26, only firms owned and controlled by socially and economically disadvantaged persons are to benefitfrom the DBE Program.

2.1.1 Audit & Civil Rights Division (ACRD)

The NYSDOT’s Audit & Civil Rights Division (ACRD) is responsible for ensuring general compliancewith these federal regulations in determining the eligibility of applicant firms seeking participation in theprogram. The Audit & Civil Rights Division (ACRD) is also responsible for establishing a minimumexpected participation goal on a yearly basis for the NYSDOT then determining credit towards meetingthe assigned DBE participation goal on federally assisted contracts by the NYSDOT contract awards.Credit will be given only for utilization of firms who are certified as DBEs.

The Director of ACRD shall serve as the Department’s DBE Liaison Officer, and is delegated by the Commissioner the responsibility of developing, implementing and monitoring civil rights policy and theDBE Program. The DBE liaison officer will have direct access to the Commissioner as needed to consulton DBE issues which may arise, (49 CFR §26.25).

A. DBE Program Policy and Procedures

The ACRD is responsible for interpretation of USDOT 49 CFR 26 regulations throughdevelopment, review and implementation of Department wide policy, procedures and guidance.ACRD is also responsible to monitor and update this policy in keeping with federal regulationchanges or case law interpretations (49 CFR §26.37 (a)).

B. DBE Goal Setting and Good Faith Efforts

The ACRD is responsible for establishing annual NYSDOT DBE Goals (in conjunction withFHWA, FTA, FRA & FAA) in an annual DBE Goal Plan. ACRD will monitor and annuallyupdate these goal setting requirements to ensure they remain current with market conditions andwith the changing availability of DBEs. ACRD also establishes the criteria and procedure forsetting contract level DBE goals, where required, and monitor the goal attainment to update thecontract level goals when needed. The procedures and criteria for contract level goals should berecorded within established NYSDOT policy and procedures such as the Highway DesignManual and within this document.

The ACRD shall work with the Office of Construction and the Contract Management Bureau todocument proper procedures and best practices to be used for evaluating Good Faith Efforts(GFE) submitted by prospective Contractors and Consultants on available contracts. Theseprocedures and criteria should be recorded within established Department policy and proceduressuch as the Standard Specifications and the Contract Administration Manual.

2-2


C. DBE Reporting

The ACRD is responsible for collecting and reporting on semi-annual DBE goals, commitmentsand attainments to FHWA (as well as other USDOT Administrations). Each individual contractsponsor is responsible for ensuring the collection and reporting of DBE commitments andattainments by their respective contractors or consultants, (49 CFR §26.37(c)). This DBEutilization data is reported semi-annually to the USDOT Agencies. The NYSDOT is in theprocess of developing and instituting a web-based Civil Rights Reporting System, which willenable electronic reporting.

The NYSDOT is required to collect and maintain the following information (49 CFR §26.11(c)): DBE program participation data as directed by USDOT administrations.

Maintain current bidder’s lists. The purpose of these lists are to provide as accurate data as possible about the universe of DBE and non-DBE contractors and subcontractors who seek towork on federally-assisted contracts for use in helping set overall goals. The ContractManagement Bureau maintains these lists.

Maintain the following information on all DBE and non-DBE prime and sub contractors(including consultants) who seek to work on all federally assisted contracts. The DBEinformation is collected and maintained as part of the NY State DBE certification process.

a. Firm name and addressb. Firm’s status as a DBE or non-DBEc. Age of the firmd. The annual gross receipts of the firm

D. DBE Eligibility and Certification

The Certification Unit within ACRD represents NYSDOT as one of four responsible partners fordetermining DBE firms’ eligibility to be certified in NY State, and to maintain the Unified Certification Process database of all certified DBEs in NY State.

E. NYSDOT’s External DBE Spokesperson

The Director of the ACRD is the NYSDOT’s point of contact for external inquiries or complaints concerning the DBE program policy, procedures, and oversight of compliance. The ACRDcoordinates all DBE related communications with USDOT organizations.

2.1.2 NYSDOT Contracting Offices

Various offices within the NYSDOT manage USDOT assisted contracts and are responsible toadminister, document and ensure compliance with NYSDOT’s civil rights policy, procedures andguidance.

A. Office of Construction

The Office of Construction administers the statewide review of all pre-award activities onNYSDOT administered, FHWA funded, capital construction contracts. This includes evaluationsof DBE utilizations (commitments), and review of Good Faith Efforts (GFE) of the apparent lowbid contractors who propose to utilize a lower DBE participation than the contract goal. TheRegional Construction Groups are responsible for monitoring and enforcing contractor

2-3


compliance with the DBE program and ensuring that the contractor attains their DBE goalcommitments, as well as monitors the use of certified DBE and the appropriate payment to allDBEs. The Office of Construction maintains, supports and monitors the current constructioncontracts’ civil rights reporting system which collects DBE goal, commitment and attainment data from prime contractors and subcontractors, and reports out the summarized data for theappropriate oversight organizations.

B. Office of Design

The Office of Design administers the setting of contract level DBE Goals on all NYSDOT letcapital construction contracts, based upon the goal setting policies established by ACRD. TheDesign Quality Assurance Bureau manages the assembly of state-let construction contracts andensures the appropriate use of DBE goals on those contracts. The DBE goals are stated in thecontract advertisements and in the contract documents.

C. Contract Management Bureau

The Contract Management Bureau (CMB) administers the documentation and finance of allNYSDOT administered architectural and engineering contracts (A&E, including licensedprofessional services such as Engineering, Land Surveying, Architectural and LandscapeArchitectural) and all non-architectural and engineering contracts (non-A&E including all othernon-licensed professional services) for other contract sponsors within NYSDOT. CMB receivescontract DBE Goals from the contract sponsoring group, and reviews any Good Faith Efforts forthe contract sponsor.

D. A&E or Non-A&E Contract Sponsoring Groups

An A&E or Non-A&E contract sponsoring group could be any group within the NYSDOT whohas the need to contract for professional licensed or professional non-licensed services whichutilize USDOT assisted funding (ex: Consultant Management Bureau, Office of TechnicalServices and the Office of Structures). These groups would have the technical expertise to befamiliar with the service being requested and would be responsible for establishing the contractDBE Goal based on goal setting policy described in this and other related documents. Theresponsibility for monitoring compliance of DBE utilization for these types of contracts rests withthe project manager of the sponsoring group, whether they reside in the Main Office or theRegion.

E. Purchasing Unit

All low bid procurement of services or materials is administered by the Purchasing Unit. ThePurchasing Unit is responsible for the setting of contract goals, evaluating Good Faith Efforts,and monitoring compliance in cooperation with the sponsoring group on all low bid federallyassisted procurement contracts.

2.2 Sub-recipients (including Government Organizations, Non-Government Organizationsand Metropolitan Planning Organizations)

A sub-recipient is defined for the purposes of this document as any entity, public or private who receivesUSDOT financial assistance, which is administered through the NYSDOT.

2-4


All sub-recipients that administer contracts with any USDOT funding assistance are required to fullyconform to the federal requirements in 49 CFR §26. Sub-recipients shall either develop their own DBEProgram where required, or endorse and fully conform to the NYSDOT's DBE Program (49 CFR §26.21).NYSDOT will ensure the sub-recipients comply with all requirements. All sub-recipients shall placeappropriate DBE clauses in their federally assisted contracts and assign local responsibility to ensurecompliance with the enclosed policy (49 CFR §26.13).

Upon FHWA approval of this NYSDOT DBE Program document, or approval of any changes to thedocument, all affected sub-recipients will be notified in writing by NYSDOT that they must either adoptthis document or prepare their own and submit it to NYSDOT for approval within 3 months of thebeginning of the federal fiscal year (begins October 1 of each year).

Sub-recipients, who receive funds through FHWA for bridge and highway capital improvement contractsshall coordinate all DBE related activities, questions or complaints with their appropriate NYSDOTRegional Local Project Liaison (RLPL). Any questions or complaints requiring additional technicalassistance can be forwarded to the Main Office Local Programs Bureau, who in turn may consult with theACRD. Questions on the good faith effort evaluations should be forwarded by the Regional Local ProjectLiaison to the Office of Construction.

2.2.1 Sub-recipient Adoption of NYSDOT DBE Program Policy & Procedure

NYSDOT will conduct an annual review of sub-recipients having adopted the NYSDOT document toensure program compliance prior to submitting its annual update to FHWA. NYSDOT'’s annual updates shall include a status statement regarding sub-recipients' performance and compliance with the NYSDOTprogram.

NYSDOT shall provide sub-recipients written notice of all document amendments.

Any sub-recipient who fails to comply and enforce this DBE program policy and procedure may besubject to formal enforcement action under 49 CFR §26.103 or 49 CFR §26.105 or appropriate programsanctions by the concerned operating administration. This could include withdrawal of funding by theNYSDOT or FHWA.

Sub-recipients are required to oversee compliance by any contractor who performs work on a USDOTassisted contract, which has a DBE goal assigned to it.

2.2.2 Sub-recipient Preparation/Submission of DBE Program Document to NYSDOT forApproval.

Sub-recipients who choose to prepare their own program documents shall submit (signed by theappropriate executive officer) the documents to NYSDOT Audit & Civil Rights Division for review andapproval. NYSDOT shall provide written notice to sub-recipients of any document deficiencies to becorrected prior to approval. Once approved by NYSDOT, the sub-recipient's document will be forwardedto FHWA for concurrence.

After approval of the document by NYSDOT and FHWA, sub-recipients shall submit written requests toNYSDOT for approval of all proposed amendments. Sub-recipients will be required to submit annualupdates to NYSDOT reflecting program activities for the reporting period.

3-1


3 DBE Goal Development

3.1 Overall Annual DBE Goal

The NYSDOT shall establish an overall NYSDOT goal on an annual basis for the participation of DBEsin all contracts utilizing USDOT fund sources, (49 CFR §26.45). For use of FHWA funds, the goal shallbe expressed as a percentage of all Federal-aid highway funds expended on FHWA-assisted contracts inthe forthcoming fiscal year.

NYSDOT's overall goal is based on demonstrable evidence of ready, willing and able DBEs available toparticipate on USDOT assisted contracts.

NYSDOT intends to meet this goal to the maximum extent feasible through the race-neutral measuresdescribed in sections following of this document. Where race-neutral measures are inadequate to meetthe overall goal, NYSDOT may establish specific contract goals for particular projects withsubcontracting opportunities (race conscious method). NYSDOT shall not use quotas for DBEs onUSDOT-assisted contracts, nor shall it allow set-aside contracts for DBEs on DOT-assisted contractssubject to this part, (49 CFR §26.43).

ACRD should be an active participant in providing input into the NYSDOT Capital Program to developan appropriate mix of contract size and work type to promote higher utilization of DBE firms and othersmaller firms both as subcontractors and as prime contractors.

ACRD should also monitor DBE concentration and discrimination possibilities across the state and takesteps to adjust these imbalances, if necessary.

3.1.1 Establishing Base Figure - Determining Relative DBE Availability

The base figure will be calculated by using the number of ready, willing and able DBEs and dividing bythe number of all available firms within the New York State geographical area.

The source of available DBEs is the New York State Unified Certification Program (NYSUCP) DBEDirectory, (accessed at: http://biznet.nysucp.net ). The number of available certified DBEs is derivedfrom the firms listed with applicable NYSDOT Work Codes for the types of work for which may becontracted.

The source of all available firms is County Business Patterns data from U.S. Census Bureau (CBP), whichlists firms by North American Industry Classification System (NAICS) Codes. The total number of allavailable firms is derived from all firms listed which have applicable NAICS Codes for the types of workon contracts which the NYSDOT might outsource. The market area for this search is New York State.

NYSDOT annually outsources four primary types of federal aid contracts. The largest type (about 88%by federal dollar value) of contracts is for the highway and bridge capital construction program which areused to build or rebuild the transportation infrastructure and the contractor is selected by the lowestresponsible bid. The second type of contract is the Architectural & Engineering (A&E) Contract (alsoknown as professional services is about 10% by federal dollar value), which primarily providesengineering related services for the design or inspection of the transportation projects and are selected bythe most qualified. The third type of contract is the Non-Architectural & Engineering (Non-A&E)Contract (also known as non-professional services and is about 1% by federal dollar value), provides awide variety of non-engineering related operational services, and the selection of the responsive

3-2


consultant is determined on an overall best value approach. The fourth type of contract is theProcurement Contract (also known as commodity purchases at less than 1% by federal dollar value),which provides either goods or services, and the vendor is solely determined by the lowest responsiblebid.

3.1.2 Adjustment to Base Figure

NYSDOT will adjust the base figure on demonstrable evidence indicating that the relative availability ofDBEs for USDOT assisted contracts for the fiscal year may be higher or lower than the base figureindicates. At a minimum, NYSDOT will analyze the results of its efforts to contract with DBEs for themost recent three years, any available and relevant disparity studies (to the extent that they are notaccounted for in the base figure), and any available and relevant results from other interested agencies ororganizations.

3.1.3 Race Neutral Analysis

Once the overall annual program goal is calculated, NYSDOT will analyze and project the maximumfeasible portion of that goal that can be achieved by using race-neutral methods. Examples of race neutralattainments would be contracts on which the prime is a DBE; contracts which have a DBE goal and theamount of DBE utilization exceeds the DBE goal; and all contracts which have a 0% DBE goal or no goal(such as A&E contracts) and there is DBE participation. When the projected portion of the goal usingrace-neutral methods is less than the overall annual goal, the remaining portion will be achieved byestablishing race conscience contract goals for particular projects that have subcontracting opportunities.The analysis includes a review of past contracting history with information including, but not limited to:

A. DBE participation on USDOT assisted Construction type contractsB. DBE participation on USDOT assisted A&E type contractsC. DBE participation on USDOT assisted Non-A&E type contractsD. DBE participation on USDOT assisted Procurement type contracts

3.1.4 Public Participation and Outreach Efforts

In establishing an overall NYSDOT DBE goal, NYSDOT will provide for public participation, (49 CFR§26.45). This will include:

Prior to finalizing the Annual Department Goals Analysis Report, NYSDOT will consult with USDOTrecipients, minority, women, and general contractors groups, community organizations, or other officialsor organizations which could be expected to have information concerning the availability ofdisadvantaged and non-disadvantaged businesses, the effects of discrimination on opportunities for DBEs,and NYSDOT's efforts to establish a level playing field for the participation of DBEs.

NYSDOT will publish public notices announcing its proposed overall annual goals, informing the publicthat NYSDOT's annual DBE goal report is available for inspection during normal business hours at theACRD for a period of thirty (30) days, and that NYSDOT and the USDOT will accept comments on theproposed goals for forty-five (45) days from the date of the notice. The notice will be published on theNYSDOT website and in minority/women focused and other major media across New York State.

NYSDOT will participate in outreach sessions held by other entities (if invited) to inform the public ofthe proposed DBE goal and the goal setting methodology. It will also inform contractor and consultantengineer associations, D/M/WBE-focused associations, and the identified ready, willing and able DBEs inwriting of the public notice, the comment period, and where the goal and the goal setting methodology

3-3


may be reviewed. The NYSDOT will inform appropriate USDOT Operating Administrations accordinglyof any comments received during this public participation process and its responses.

3.1.5 Goal Submission

NYSDOT’s overall program goals will be submitted to FHWA for review by August 1 of each year. The goal will also be published on the NYSDOT ACRD web page. The program goal submission will includea description of the methodology used to establish the goal, including the base figure (3.1.1 above); thesupporting data with which it was calculated, with any adjustment; a projection of the portions of theoverall goal which will be met by race-neutral means; and the basis for that projection.

The program goals will take effect on October 1 of each year, unless NYSDOT receives other instructionsfrom USDOT Operating Administrations. The goal will not be finalized until after consideration of allcomments from the USDOT Operating Administrations and the public.

3.2 Contract Specific Goals

DBE participation goals will only be assigned on Federal-aid highway (construction/non-A&Eprofessional services) contracts that have subcontracting opportunities, and have DBE firms available toparticipate. Unless prohibited, contract goals will be established to meet any portion of the NYSDOT’s overall goal not met by using race-neutral means (49 CFR §26.51(d)). Contract level goals must providefor participation by all certified DBEs and must not be subdivided into group-specific goals, unlessverified data, (e.g., through a disparity study), supports the need to more narrowly tailor the goals forspecific groups. Contract level goals apply to all construction contracts, including locally administeredfederal-aid contracts, and all non-professional services contracts.

Contract level goals are calculated based on one of two methods. Goals can be estimated or adjustedbased upon historical DBE utilization achieved over the most recent 2-3 year history. Goals can also becomputed by determining the total value of all potential work items which could be subcontracted toDBEs, and dividing it by the total contract award amount, which includes pay items on constructioncontracts which are non-work items to the contractor. These non-work items which can not besubcontracted are already accounted for in the calculation of the goals. The non-work items include:

proprietary or sole source items fixed price items asphalt, fuel and steel price adjustment items incentive and disincentive items field change payment item

Prior to solicitation of bids, all proposed federal-aid contracts (not including race neutral consultant A&Econtracts) will be reviewed by the contract sponsor to identify work that could be performed by DBEs.The criteria used in assigning project level goals include:

A. Project geographical location (more important on construction contracts).

B. Size or scale (in dollars) of the contract and of the subcontracted work.

3-4


C. Historical trends of work subcontracted to DBEs, which may reflect changes in the industry onthe availability of DBEs, or localized trends, which demonstrate difficulty in attracting DBEs.

D. The type, complexity and specialization of work, as well as potential scheduling and coordinationissues with work operations, which may render the operation not conducive to subcontracting.

E. Industry or geographical shortages of required materials by all suppliers, or contract imposedlimitations, which require the use of sole sources.

F. Availability of DBE firms who are certified to work on NYSDOT contracts and who perform thetypes of work available for subcontracting and who are within a reasonable distance (based on thetype of work) from the project location. (See Section 3.2.1.E below.)

3.2.1 Construction Contract Goals

The ACRD shall document and issue DBE goal policy, procedures and supporting documentation for useon construction type contracts. This goal setting procedure shall be utilized by the project designer withavailable guidance from ACRD for setting DBE goals on all federal aid construction contracts. Contractgoals should not be set higher than what is attainable as determined by the NYSDOT’s methodology. The DBE program does not require recipients…“to set a contract goal on every USDOT-assistedcontract” (49 CFR §26.51.e.2). The methodology to set goals requires some understanding as to the relative availability of DBEs to perform specified work, due to the unknown or difficult to measuremarket factors common in low bid contracting such as volume of all work available to bid upon in theindustry at a specific point in time (both public and private contracts), established business relationshipsbetween firms, and the technical challenges of the work of each specific location which are unique to eachcontract. The NYSDOT methodology used to determine the contract level DBE goals is as follows.

A. Construction contracts with an Engineer’s Estimate of less than $500,000 for Contract Groups 1-5, and of less than $1,000,000 for Contract Groups 6-8, shall not require a DBE Goal.Subcontracting the small amounts of secondary work operations on contracts of less than thethreshold is generally not economically beneficial for the DBE firms and costly to administerrelative to the benefit provided. DBE contract goals shall only be used…“on those USDOT assisted contracts that have subcontracting possibilities” (49 CFR§26.51.e.1). Since thesecontracts have a lower cost and thereby a lower bonding requirement they may provideopportunities for DBE firms to bid as the prime contractors.

B. All construction contracts will generally be assigned as one of the nine-contract group typesbased upon the “primary work operations” to be accomplished by the contract. (See Appendix Afor “Construction Contract Groups” which describes the nine contract group types.) Group types one through five are the more routine work operations with a broader mix of pay items, whichcould allow for more subcontracting. The remaining group types six through nine include moreunique construction types of projects including specialized construction techniques, materialinstallations or services, or offer special contracting mechanisms to address unexpected oremergency situations.

C. The “primary work operation” of a contract shall include all pay items, which are integral and inseparable to safely and effectively construct the primary feature(s) of the project [as determinedby the Department]. Therefore, these pay items would not be considered for subcontracting sinceconstructing them by a separate workforce might adversely affect [as determined by theDepartment] the quality of work, safety of employees and to the public, or the contract schedule.These pay items would be considered part of the same logistical work operation for constructingthe primary feature(s) being addressed by the contract. (See Appendix A for “Construction

3-5


Contract Groups” to view examples of primary vs. secondary work operations on the ninecontract groups.) DBEs are encouraged to bid as prime contractors on contracts which includework for which they are experienced and have adequate bonding capacity.

D. “Secondary work operations” on construction contracts include pay items which could beconsidered for subcontracting, including work for DBEs. All work for DBEs needs to becategorized under the published NYSDOT DBE work codes to ensure only certified DBEsperform the required work. These work codes generally align with the 3-digit root of theNYSDOT pay item number. DBE work codes are used in the certification of DBEs to qualifythem to perform certain types of work under the DBE program. Individual secondary workoperations which are valued at less than $10,000 will not be considered in DBE goal calculationssince associated overhead and mobilization costs for small operations result in little or no profit.(They may still be utilized for contract goal commitments and attainments.)

E. “Secondary work operations” shall be evaluated within the geographical area that the contractwork is assigned, to determine the availability of a sufficient number of DBEs to perform thework considered for subcontracting. A “Reasonable” minimum distance of 75-300 miles shall beassumed when estimating how far a DBE may be willing to travel depending which is based upontheir limitations of material deliveries, requirements for mobilization of heavy equipment, orwhether a significant number of employees would be in overnight travel status.

a. A distance of 75 miles from a project location shall be used in the determination of thenumber of DBE available on a contract for work operations including the following. Earthwork–DBE Work Codes in 200s Bases & Sub-bases–DBE Work Codes in 300s Asphalts–DBE Work Codes in 400s Concrete & Structures–DBE Work Codes in 500s Incidental Construction –DBE Work Codes in 600s, except those described in

subsections b and c below

b. A distance of 150 miles from a project location shall be used in the determination of thenumber of DBE available on a contract for work operations including the following. Guiderailing–DBE Work Code 606 Fencing–DBE Work Code 607 Landscaping–DBE Work Codes 610-615 Work Zone Traffic Control–DBE Work Code 619 Survey Operations & Markers–DBE Work Code 625 Sign and Marker Installations–DBE Work Codes 645 & 646 Highway Lighting, Traffic Signals and ITS–DBE Work Codes 670, 680 & 683

c. A distance of 300 miles from a project location (can assumed to be statewide) shall be used inthe determination of the number of DBE available on a contract for work operationsincluding the following. Pavement Marking Paint–DBE Work Codes in 640 Epoxy, Thermoplastic & Preformed Pavement Markings–DBE Work Codes in 685, 687

& 688

3-6


Material Suppliers–DBE Work Codes in 700s

d. The downstate area of NY State, which includes the lower Hudson River Valley, NY Cityand Long Island, presents unique challenges in the estimation of DBE availability by firmswho historically do not cross over between the NY City and Long Island area (includingWestchester County), and the remaining counties in Region 8 and upstate. Historical DBEutilization records show limited evidence of DBEs crossing over either direction between theNY City/Long Island areas (including Westchester County), and the remaining Hudson RiverValley area and upstate. Therefore, goal determinations will assume minimal cross over ofDBEs between the NY City/Long Island areas and the remaining upper Hudson River Valleyarea.

F. Contract level DBE goals should be set as follows:a. Contracts designated as groups 1-8 shall have the DBE goal set by one of two methods. If the

contract is considered routine in that it is broad enough to provide some subcontractingopportunities (the majority of contracts), then the DBE goal shall be set by the Designer ofthe project from the “NYSDOT DBE Goal Table”. If the project is not deemed routine (not broad enough to have sufficient DBE subcontracting opportunities) or is unclear whether ithas sufficient DBE subcontracting opportunities, then the Designer (with available assistancefrom ACRD) should estimate the value of potential subcontracted items for the contract anddivide it by the total contract value to determine the DBE Goal. In all cases, a constructioncontract’s goal should not exceed the values indicated on the “NYSDOT DBE Goal Table”.

b. All contracts designated into group 9 shall have a DBE goal of 0%.

c. The “NYSDOT DBE Goal Table” will be maintained by ACRD on their external web site to ensure access by both internal and external interests.

d. All contracts which have a greater than $100,000,000 estimated cost should have the DBEgoal calculated manually by the Designer with assistance from ACRD. As with all contracts,the goal shall not exceed the values indicated on the NYSDOT DBE Goal Table.

G. The “NYSDOT DBE Goal Table” is based and updated upon 1) the average historical (3 years) percentages of a contract’s work (for each group type) that has been subcontracted out to DBEs; 2) the current regional availability of DBE firms to perform the types of work which could besubcontracted; and 3) historical averages of contract attainments over various geographicallocations and the ability to achieve goals and commitments on various types of contracts. Thishistorical data considers the geographical locations of contracts verses the DBE firm locations,the types of secondary work operations included verses the types of certified DBEs available, andalso industry labor restrictions such as those with union verses non-union influence.

H. In the estimating of DBE goals, there are many hard to estimate factors which can influence theprediction of the types and quantities of work which might be subcontracted to DBEs. The primecontractor who is awarded the contract may have specialties of work that they routinely performand on which they need to employ their staff. They may also have stockpiles of specificmaterials, which they already own and can bid at a lower price. The materials used on a contractmay or may not be available from DBE material suppliers. DBE goals attempt to average thevariations in quantities or types of work that a prime contractor should make available towardsachieving goals, with the additional availability of DBE material suppliers, and DBE trucking orprofessional services (required for special approvals of items or installations). These factors are

3-7


assumed to be taken into account within the goal setting since they cannot be accurately estimatedto prove otherwise.

The data formulated to determine construction contract goals should be re-evaluated by the ACRDannually to compare it to updated historical DBE participation and industry changes in DBE availabilityin order to ensure it is applicable in the current marketplace.

3.2.2 A&E Professional Services Contracts

All NYSDOT A&E consultant contracts utilize an A&E Industry accepted 18% DBE target participation.This target is not required, but historically has been attained by the A&E consultant industry. Since thetarget is not a condition of award of contract, it is considered race neutral.

3.2.3 Non-A&E Professional Services Contracts

A. Non-A&E contracts will utilize a contract level DBE goal. The exact goal will be determinedduring the final stages of drafting the RFP (Request for Proposals), as the scope and cost of workbecome more clearly defined. The contract sponsor will determine an appropriate DBE goal (incooperation with the Contract Management Bureau) based on the value of the contract, the typesof work involved that could be subcontracted, and the availability of DBEs to accomplish thework, as follows.

1. Non-A&E contracts which are estimated to cost less than $500,000 shall not include a DBEcontract goal. Contracts of less than this minimum provide opportunities for DBE firms tosubmit proposals as prime contractors.

2. Contract goals should only be set on contracts, which contain subcontracting opportunities.Contract goals should provide for participation by all available certified DBEs.

3. Contract goals should not be set higher than what is attainable as determined by theNYSDOT’s methodology.

B. The procedure for establishing Non-A&E contract goals is as follows. The Contract ManagementBureau is administratively responsible for assuring that DBE goals and requirements areappropriately included within the contract documentation (RFP). The DBE goal determinationwill be documented by the contract sponsor for future reference and possible audit.

1. Identify the work types being specified in the Scope of Services that might providesubcontracting opportunities. Identify the corresponding NYSDOT or NAICS code for eachwork type, (refer to web site: http://www.census.gov/epcd/www/naics.html for NAICScodes, or to https://www.nysdot.gov/main/business-center/audit/dbe-certification and selectWork Code Chart for NYSDOT codes).

2. For location specific contracts, which are material or equipment intensive, identify theavailability of certified DBEs located in the NYSDOT Region in which the contract islocated, and each adjacent region to where the contract is located. Available DBEs can beidentified by the required work types through the use of the NYS UCP Directory at:http://biznet.nysucp.net . For contracts covering the entire state (those which are not materialor equipment intensive or location specific), a statewide search of available DBEs should beconducted. Also, consider the proximity of out-of-state DBEs as available for subcontracting(only those out-of-state DBEs who are certified by a NYS Certifying Partner).

3-8


3. Estimate the dollar value of each of the anticipated work types or material supply types whichmight be performed or provided by DBEs. Include the value of each work/material type onlyif there is reasonable confidence that there are two or more DBEs which are certified andavailable for the work. This does not exclude soliciting uniquely certified firms (only onefirm available) for utilization; but due to statistically low occurrence, uniquely certified firmsare not considered in goal calculation.

4. Determine the contract DBE goal by dividing the sum of all DBE subcontractingopportunities by the total estimated contract amount, and round down to the next wholenumber.

5. If this type of contract has been offered previously, review the historical DBE participation todetermine if an adjustment to the proposed DBE goal is necessary. Adjustments should onlybe made if variances from historical records were found.

3.3 Counting DBE Participation Towards Meeting Goals

DBE participation is credited using the following procedures. For construction contracts, refer also to thecurrent NYSDOT Standard Specifications, Section 102-12.

A. Only the work actually performed by a DBE will be counted towards DBE attainments (49CFR§ 26.55.a). All work performed by a certified DBE firm will be counted as long as the DBEperforms a Commercially Useful Function (CUF). The cost of supplies and materials obtained bythe DBE or equipment leased (except from prime contractor or its affiliate, unless it is at thecurrent common rate) and used directly in the performance of the work (not overhead type items)will also be counted.

B. All work by certified DBEs on USDOT funded contracts shall be documented and reported semi-annually to the ACRD for inclusion in the semiannual DBE Report to FHWA. This includes alllocally administered (sub-recipient) contracts from which funding is administered through theNYSDOT.

C. Work that a DBE prime subcontracts out to a non-DBE firm, does not count towards the DBEgoal.

D. If materials or supplies are obtained from a DBE manufacturer, one hundred percent of the costwill be counted. If the materials and supplies are purchased from a DBE regular dealer, sixtypercent of the cost will be counted. If services are brokered or materials or supplies arepurchased from a broker, only the brokerage fee will be credited.

E. The entire amount of fees or commissions charged by a DBE for providing a service such asprofessional, technical, consultant, or managerial services, or for providing bonds or insurancespecifically required for the performance of the contract will be counted towards the DBE goal,provided the fee is consistent with fees for that industry and geographical area.

F. Equipment rental firms: equipment that is owned, leased or rented and operated by the DBE’s employees or another DBE qualifies for 100% credit.

G. Prime/DBE Joint Venture: The contractor may count toward its DBE goal only that portion of thework that the DBE firm actually does with its own forces. Should the joint venture be comprised

3-9


of DBEs only, the entire contract award amount shall be counted toward meeting the DBEassigned goal on the project.

H. DBE participation will not be counted toward the contract attainment until the DBE actuallyreceives payment from the prime. Documentation must be maintained (as part of the contractrecords) of the participation by and payments to all DBEs on all contracts.

I. When the certification of the DBE has been removed or has expired (decertified) during theperformance of a contract (after execution of a subcontract with that DBE), the DBE participationshall not be counted as part of the overall annual goal, but may be counted towards the contractgoal (49 CFR §26.55.g and 49 CFR §26.87.j). Should a DBE not be certified at the time ofexecution of their subcontract with the prime, that DBE’s participation shall not count towardsthe contract goal, and not count towards the overall annual goal.

3.4 Counting DBE Participation of Sub-recipients Towards Meeting Annual Goals.

3.4.1 Sub-recipients Adopting the NYSDOT DBE Program

Credit shall be counted in accordance with Section 3.3 regardless of whether the NYSDOT or the Sub-recipient is the contracting agency. All goal setting requirements described above apply to locally ormunicipal administered projects which use federal aid for any portion of their contract funding. Sub-recipients are required to report to NYSDOT their goal attainments in a manner consistent with therequirements of 49 CFR §26 reporting requirements.

3.4.2 Sub-recipients With Their Own Approved DBE Program

Should a sub-recipient develop and obtain approval for their own DBE Program from NYSDOT with theconcurrence of FHWA, they shall be required to submit semiannual reports (every 6 months) to NYSDOTdemonstrating their goal attainment in a manner consistent with the requirements of 49 CFR 26 reportingrequirements. Sub-recipients shall count credit for work performed by DBEs per the requirements ofSection 3.3 regardless of whether they or NYSDOT is the contracting agency. NYSDOT shall include inits semiannual reports to Federal Agencies the status of sub-recipient goal activities falling within thiscategory.

4-1


4 Ensuring DBE Participation (Contract Compliance Oversight)

4.1 Overall Policy Statement

The New York State Department of Transportation (NYSDOT) is committed to a Civil Rights Programfor the participation of Disadvantaged Business Enterprises (DBEs) in all of the federally fundedcontracting opportunities in accordance with Title 49 Code of Federal Regulations (CFR) Part 26, asamended.

4.2 Procedures to Ensure DBE Participation

4.2.1 Pre-Bid Procedures

A. DBE Contractor Notification1. All bid documents, including plans, specifications & estimate for construction contracts,

Requests for Qualifications, and Requests for Proposals are available for inspection orpurchase at NYSDOT's Main Office (and at Regional Plan Sale locations for ConstructionContracts only). Projects with special Homeland Security considerations may have specialrequirements limiting access to contract documents. All NYSDOT contracts are advertised inthe New York State Contract Reporter (http://www.nyscr.org/) and/or on the NYSDOT website at https://www.nysdot.gov/business. All race conscious DBE goals which have been seton NYSDOT federally funded contracts are included in the advertisements posted on theNYS Contract Reporter and on the NYSDOT web site. Downstate construction contracts,located in NYSDOT’s Regions 8, 10 and 11, are also advertised in Department-approvedminority newspapers, for four or more weeks prior to letting.

2. All construction contract bid documents are also made available for submission of electroniccontract bids through the Bid Express (Bid-X) web site service athttps://www.bidx.com/index.html. The “Small Business Network” portion of this application provides a quick method by which prime contractors can electronically solicit bids fromsubcontractors, including DBEs, and document the responses for their good faith efforts.This service provides an automated solicitation method which helps to level the field ofopportunity for all ready, willing and able DBEs to participate as a subcontractor onNYSDOT construction contracts.

B. DBE Waivers–Pre-Bid Construction ContractsFor state let construction contracts, the Regional Design/Structures Engineers may submit a DBE“Request for Change in Goal” waiver form HC-258 to DQAB prior to advertising the contract tochange the DBE goal from what is prescribed by the construction contract goal settingprocedures. All of these waivers for changes to the goal require approval by both the Office ofConstruction and the Audit & Civil Rights Division.

For local let contracts, the local project sponsor (sub-recipient of Federal funds) may submit asigned DBE “Request for Change in Goal” waiver form HC-258 along with their PS&E letter(but prior to advertising the contract) to change the DBE goal from what is prescribed by theconstruction contract goal setting procedures. These waiver requests for changes to the goalshould be submitted to the Regional Local Projects Liaison (RLPL), require signature by theRegional Planning & Program Manager (RPPM) and are approved by both the Office ofConstruction and the Audit & Civil Rights Division.

4-2


C. DBE Contract Submission Requirements1. For construction contracts, refer to Section 102-12 of the current NYSDOT Standard

Specifications for the submission requirements pertaining to DBE utilization on constructioncontracts (refer to https://www.nysdot.gov/main/business-center/engineering/specifications,for Standard Specs). For additional submission information, refer to the Office ofConstruction’s web site at https://www.nysdot.gov/main/business-center/contractors/construction-division/construction-civil-rights .

2. For non-A&E Consultant Services Contracts, refer to the RFPs for the submissionrequirements pertaining to documenting DBE utilization in the proposals.

D. NYS UCP Directory of Certified DBEsThe New York State Unified Certification Program Directory of DBE firms are available on thefollowing web site. Every DBE who is certified to do work within NY State is listed with thework codes for which they are certified to perform work, (49 CFR §26.31).

http://biznet.nysucp.net

DBEs must be certified at the time of submission of bids or proposals to count towards thecontract goal.

E. Recording DBE Commitments

1. Construction Contracts –Within seven calendar days after the opening of bids on a constructioncontract, the apparent low bidder must enter its DBE commitment information into theNYSDOT’s civil rights reporting system.

2. Non-A&E Contracts –The Contract Management Bureau is responsible for documenting andreporting all non-A&E contract’s DBE goal and commitment information.

4.2.2 Bid Opening and Contract Award

For the purposes of this section, the apparent low bidder on a construction contract and all respondents(consultants) to Request for Proposals (RFP) shall be considered the “prospective contractor”.

A. DBE Commitment for Contract Award

Prospective contractors may be awarded a contract, which includes a DBE goal, if they (49 CFR§26.53(a)):

1. Meet the goal, documenting commitments for participation by DBE firms sufficient for thispurpose; or

2. Document adequate good faith efforts to meet the goal, even though it did not succeed inobtaining enough DBE participation to do so. This means that the bidder must show that ittook all necessary and reasonable steps to achieve a DBE goal by their scope, intensity, andappropriateness to the objective, could reasonably be expected to obtain sufficient DBEparticipation, even if they were not fully successful (49 CFR §26 Appendix A-I). Prospectivecontractors who do not demonstrate good faith efforts shall be deemed non-responsive andtherefore shall be ineligible for award of the contract (49 CFR §26.53(c)).

DBEs listed by the prospective contractors for participation in the contract must be certified aseligible DBEs (for work in NY State) as of the submittal date of the bid or the proposal, for the

4-3


type of work they are expected to perform. Each prospective contractor’s submittal shall be reviewed to confirm each DBE firm's certification status.

All prospective contractors shall note that utilization of DBE certified firms on USDOTassisted contracts can not be combined or mixed with the utilization of NYS Minority BusinessEnterprise (MBE) or Women-Owned Business Enterprise (WBE) certified firms.

B. DBE Commitments

All prospective contractors (including DBEs), shall submit the required DBE utilizationdocumentation within the timeframe stipulated in the contract.

Contract level DBE commitments are computed by determining the total value of all work itemswhich have been committed to be subcontracted to DBEs, and dividing it by the total contractamount, (shall include all pay items on construction contracts which are to be bid upon, includingproprietary items, sole source items, incentives/disincentives, mobilization, fixed price and priceadjustment items). Non-A/E contracts, shall include all direct technical labor (fully loaded) andany materials provided by DBE suppliers which provide a CUF.

Credit toward meeting the contract goal varies with the type of work being performed by the DBEfirm. For construction contracts, the requirements of Section 102 of the NYSDOT StandardSpecifications shall apply.

C. DBE Waivers–Pre-Bid or Pre-Proposal Submission

1. For NYSDOT administered construction contracts, a prime contractor, defined as one whosubmits a bid/proposal upon a contract, may request a waiver to change all or part of acontract's DBE goal by submitting a written request to the Office of Construction - CivilRights Unit. All waiver requests for NYSDOT administered construction contracts to changethe goal shall require approval by both the Office of Construction and the ACRD.Contractors have to submit waiver requests to the Office of Construction no later than 25calendar days prior to the contract letting. (As required in Section 102-12 of the NYSDOTStandard Specifications).

2. For local let construction contracts, a prime contractor, defined as one who will be submittinga bid upon a contract or has requested an RFP, may request a waiver to change all or part of acontract's DBE goal by submitting a written request to the Project Sponsor (sub-recipient ofFederal funds). The Project Sponsor shall forward the request to the ACRD with aninformational copy to the Local Programs Bureau. All waivers for local let contract changesto the goal shall require approval by both the local project sponsor, the applicable NYSDOTRPPM, and by the NYSDOT ACRD. Contractors have to submit waiver requests to theNYSDOT no later than 30 calendar days prior to the contract letting.

3. There is no opportunity on non-A&E Consultant Services Contracts for a firm submitting aproposal to request for waiver to change the DBE goal.

D. DBE Participation Conditions

DBE participation towards achieving DBE goals is subject to the following conditions (asoutlined for construction contracts in Section 102-12 of the NYSDOT Standard Specifications).

4-4


1. DBE participation shall perform a commercially useful function (CUF). A DBE isconsidered to perform a commercially useful function when it is responsible for the executionof a distinct element of work on a contract and carries out its responsibilities by actuallyperforming, managing, and supervising the work involved in accordance with normalindustry practice. Regardless of whether an arrangement between the Contractor and theDBE represent standard industry practice, if the arrangement erodes the ownership, control orindependence of the DBE or in any other way does not meet the commercially useful functionrequirement, the Contractor shall receive no credit toward the goal(s) and may be required tobackfill the participation. A DBE does not perform a commercially useful function if its roleis limited to that of an extra participant in a transaction or contract through which funds arepassed in order to obtain the appearance of DBE participation.

2. The DBE shall employ a work force, (including administrative and clerical) separate andapart from that employed by the Contractor, other Subcontractors on the contract, or theiraffiliates. This does not preclude the employment by the DBE of an individual that has beenpreviously employed by another firm involved in the contract, provided that the individualwas independently recruited by the DBE in accordance with customary industry practice.The routine transfer of work crews from another employer to the DBE shall not be allowed.

3. All work performed by the DBE must be controlled and supervised by the DBE withoutduplication of supervisory personnel from the Contractor, other Subcontractors on thecontract, or their affiliates. This does not preclude routine communication between thesupervisory personnel of the D/M/WBE and other supervisors necessary to coordinate thecontract work.

4. DBE Subcontractors may supplement their equipment by renting or leasing additionalequipment in accordance with customary industry practice. However, no more than 50% ofthe equipment required to perform the work of the Subcontractor may be obtained from theContractor, other Subcontractors on the contract, or their affiliates. If the DBE obtainsequipment from any of those sources, the DBE shall provide documentation to the NYSDOTdemonstrating that similar equipment and terms could not be obtained at a lower cost fromother customary sources of equipment. The required documentation shall include, but not belimited to, copies of the rental or leasing agreements, and the names, addresses, and termsquoted by other sources of equipment.

E. Good Faith Efforts Methodology

The methodology to produce a good faith effort requires a similar approach and uses similarevaluation criteria as used for setting DBE goals, except many of the business assumptions usedto set goals can now be specifically determined by the contractor through direct solicitations withDBE firms. The following recommended methodology is critical to substantiating a prospectivecontractor’s good faith efforts.

1. Identify all potential work items, which are not part of the “primary work operation” and could potentially be subcontracted to DBEs. Selecting portions of the work to be performedby DBEs in order to increase the likelihood that the DBE goals will be achieved. Thisincludes, where appropriate, breaking out contract work items into economically feasibleunits to facilitate DBE participation, even when the prime contractor might otherwise preferto perform these work items with its own forces (49 CFR §26, Appendix A-IV.B). For worktypes that are not conducive to subcontracting, consideration is to be given for materialsmanufacturing, supply, brokerage, and trucking opportunities.

4-5


2. Consult the NYS Unified Certification Program (UCP) Directory to identify all DBEs whoperform the types of work which could be subcontracted, as well as the materials that couldbe manufactured, supplied, or provided via brokerage, and for trucking firms.

3. Solicit the above identified DBEs by …“all reasonable and available means… (e.g. attendance at pre-bid meetings, written correspondence, phone calls)” (49 CFR §26, Appendix A-IV.A). Second follow up attempts (if no initial response) by different medias ofcommunication will be necessary to document and confirm DBE interest in participation.

4. Solicitations to identified DBEs should be for the same relative geographic area of thecontract. That area would include within 75 miles for work types which are materialintensive, require heavy equipment, or would require multiple employees in overnight travelstatus; or within 150 miles for work types which have limited material delivery or handling,do not require heavy equipment, or require only a few employees to deliver or install. Whenthe work type includes light duty installations or specialty services which are very mobile andnot material or heavy equipment dependant, the prospective contractor should seek certifiedDBEs out to a larger geographical area (300 miles or statewide). For non-constructioncontracts, there should be in most cases no limit over the geographical area on which DBEsare to be sought. (See Section 3.2.1.E for further discussion of which areas for which worktypes.)

5. As with goal setting, the downstate area of NY State, which includes the lower Hudson RiverValley, NY City and Long Island, presents unique challenges in the expectation of DBEavailability by firms who historically do not work outside of these three geographical areas.Historical DBE utilization records show limited evidence of DBEs crossing over eitherdirection between the NY City/Long Island area (including Westchester County), and theremaining Hudson River Valley area and upstate. Therefore, the good faith effortexpectations should assume little or no cross over of DBEs between the NY City/Long Islandareas (including Westchester County) and the remaining upper Hudson River Valley andupstate.

6. Document communications, including both responses or lack of responses, and the resultingcommitments.

7. Complete all contract required forms for the utilization plan and good faith efforts. Includerequired information such as work item numbers, material names or services and amount ofDBE program commitment claimed.

8. Submit completed forms and all backup documentation such as trucking plans, joint ventureplans, and explanations of partially-subcontracted work items, by contract deadlines. ForNYSDOT administered contracts, all information should be submitted to the Office ofConstruction. For local administered contracts, all information should be submitted to theProject Sponsor.

F. Good Faith Efforts Documentation

In the event a prospective contractor has determined that they are unable to meet the DBE goalset for a contract, that prospective contractor shall provide complete information anddocumentation regarding their “good faith efforts” towards achieving the DBE goal (49 CFR §26.53(b.2)). The following list of information and documentation is to be provided by the

4-6


prospective contractor of their proposed DBE utilization. Non-A&E RFPs include a form forconsultants to use and submit.

1. The names, addresses and contact information of all certified DBE firms that were contacted.This list should include the number of attempted contacts and the mode of attempted contact,and the reason for rejection or non-use of each DBE.

2. For each DBE to be utilized during the contract, include a description of the work that theywill perform (item numbers), and the DBE work code under which they are certified toperform this work.

3. Indicate the applicable percentage of each work code claimed towards the DBE commitment,and state the total dollar value of the participation for each DBE firm.

4. Include documentation of each DBE subcontractor commitment to be utilized. Also providesupporting documentation when applicable, such as trucking plans, joint venture plans, andexplanations of partially-subcontracted work items.

5. Include example copies of each type of solicitation letters, faxes, emails, or phone logs whichdescribe what information or contract clarification assistance was provided to the DBE.

6. Include copies of newspaper advertisements if used to solicit for DBEs.

7. For each case when a DBE quote not accepted and a non-DBE firm was selected, a writtenexplanation is required of why the DBE was not selected.

For construction contracts, see the following web site for applicable forms required as part of thedocumentation for DBE utilization and good faith effort.

https://www.nysdot.gov/main/business-center/contractors/construction-division/forms-manuals-computer-applications-general-information/civil-rights

G. Review of DBE Good Faith Efforts (GFE)

The prospective contractor must show that it took all necessary and reasonable steps to achievethe DBE goal which, by their scope, intensity, and appropriateness to the objective, couldreasonably be expected to obtain sufficient DBE participation, even if they were not fullysuccessful (49 CFR §26, Appendix A-I). The following steps are paraphrased from 49 CFR §26,Appendix A-IV with some additional guidance added (quoted portions of the CFR are in italics).Review and evaluation of Good Faith Efforts shall consider the following:

1. The efforts employed by the prospective contractor should be that one could reasonablyexpect a bidder to take if the bidder were actively and aggressively trying to obtain DBEparticipation sufficient to meet the DBE contract goal. Mere pro forma efforts are not goodfaith efforts to meet the DBE contract requirements (49 CFR §26, Appendix A-II).

2. Ensure that all information is complete and accurate and adequately documents theprospective contractor’s good faith efforts. This mayrequire follow-up confirmations withDBEs of solicitation attempts.

4-7


3. The prospective contractor shall not be required to… meet a contract goal (i.e., obtain a specified amount of DBE participation) in order to be awarded a contract, even though thebidder makes an adequate good faith efforts showing (49 CFR §26, Appendix A-III).

4. Securing participation by only certified DBE firms for work that they are listed to performthat is in the contract. Only DBEs certified by the NYS Unified Certification Program(NYSUCP) shall be used to fulfill the established goal on Federal-Aid contracts. Firmscertified only as Minority or Women Owned Business Enterprises by the NY Empire StateDevelopment Authority cannot be credited towards achieving a contract’s DBE goal. Whenusing the UCP for searches of available DBEs, each investigation should be performed bysearches by possible both work codes and by business descriptions. Construction andengineering consultant contracts should initially search by applicable NYSDOT work codes,and non-A&E contracts should search either by applicable NYSDOT work codes or byNAICS work codes and business descriptions.

5. Solicitations should be targeted for specific work items to be offered to those DBEs who arecertified in those work items.

6. Soliciting through all reasonable and available means (e.g., attendance at pre-bid meetings…solicitation letters, phone calls, email, and faxes) …the interest of all certified DBEs who have the capability to perform the work of the contract. The prospective contractor …must solicit this interest within sufficient time to allow the DBEs to respond to the solicitation. Theprospective contractor …must determine with certainty if the DBEs are interested by taking appropriate steps to follow up initial solicitations, …and document the results. Reasonablyattempts by the prospective contractor to solicit quotes from DBEs shall include the use of aleast two different communication medias to contact each DBE by at least two separateattempts (49 CFR §26, Appendix A-IV.A).

7. DBEs also have a responsibility (prior to Bid or Proposal Opening) to respond to prospectivecontractor’s solicitations within a reasonably timely manner. DBEs should be allowed five business days upon receipt of a solicitation to respond. Once two solicitations have beenattempted to the same DBE by two different medias, and five business days have passed afterthe second attempt, further solicitation of that DBE is not necessary.

8. Prospective contractors on construction contracts should, at a minimum, seek certified DBEsin the same relative geographic area on a construction contract. That area would includewithin 75 miles for work types, which are material intensive or require heavy equipment; orwithin 150 miles for work types, which have limited material delivery or handling, do notrequire heavy equipment, or require only a few employees to deliver or install. When thework type includes light duty installations or specialty services which are very mobile and notmaterial or heavy equipment dependant, the prospective contractor should seek certifiedDBEs out to a larger geographical area (generally statewide). For non-construction non-A&Econtracts, there should be in most cases no limit over the geographical area on which DBEsare to be sought. (See Section 3.2.1.E for further discussion of which geographic areas forwhich work types.) For non-A&E contracts, any geographical limitations should be noted inthe RFP.

9. The prospective contractor should select definable… portions ofthe work to be performed byDBEs in order to increase the likelihood that the DBE goal(s) will be achieved. Thisincludes, where appropriate, breaking out contract work items … (decoupling) or combininglike or related operations …into economically feasible separate work units to facilitate DBE

4-8


participation, even when the prime contractor might otherwise prefer to perform these workitems with its own forces …or with their own materials, (49 CFR §26, Appendix A-IV.B).

10. The prospective contractor should provide …interested DBEs with adequate informationabout the plans, specifications, and requirements of the contract in a timely manner to assistthem in responding to a solicitation …and assist with any questions asked by a DBE, (49 CFR §26, Appendix A-IV.C).

11. It is the prospective contractor’s …responsibility to make a portion of the work available toDBE subcontractors and suppliers and to select those portions of the work or material needsconsistent with the available DBE subcontractors and suppliers, so as to facilitate DBEparticipation. In addition to the list of proposed DBEs to be used during the contract, theprospective contractor shall provide additional documentation of attempts to solicit additionalDBEs … includes the names, addresses, and telephone numbers of each DBE that wasconsidered; a description of the information provided to the DBEs regarding the plans andspecifications for the work selected for subcontracting …(eg: copy of solicitation letter); …the work codes for which they are certified; and evidence as to why additional agreementscould not be reached for DBEs to perform the work …(eg: response letters, emails, faxes or phone logs), (49 CFR §26, Appendix A-IV.D.1).

12. A prospective contractor using good business judgment would consider a number of factorsin negotiating with subcontractors, including DBE subcontractors, and would take a firm'sprice and capabilities as well as contract goals into consideration. However, the fact thatthere may be some additional costs involved in finding and using DBEs is not in itselfsufficient reason for a…prospective contractor’s… failure to meet the contract DBE goal, aslong as such costs are reasonable. Also, the ability or desire of a prospective contractor toperform the work of a contract with its own organization does not relieve the …prospective contractor… of the responsibility to make good faith efforts. Prospective contractors …are not, however, required to accept higher quotes from DBEs if the price difference is excessiveor unreasonable, (49 CFR §26, Appendix A-IV.D.2) (excessive or unreasonable is defined byNYSDOT as when the difference between the total price of the quote exceeds anothersubcontractor quote or the total cost of the equivalent bid prices of the prospective contractorby one of the following:

a. If the DBE quote is up to $50,000, then the difference should not exceed 10%, or

b. If the DBE quote is greater than $50,000, then the difference should not exceed 5%.

13. Prospective contractors shall not reject DBEs as being unqualified without sound reasonsbased on a thorough investigation of their capabilities…from multiple references and which shall be documented in the GFE. The contractor's standing within its industry, membershipin specific groups, organizations, or associations and political or social affiliations (forexample union vs. non-union employee status) are not legitimate causes for the rejection ornon-solicitation of bids in the prospective contractor's efforts to meet the project goal (49CFR §26, Appendix A-IV.E).

14. Prospective contractors should make …efforts to assist interested DBEs in obtainingbonding, lines of credit or insurance as required by the recipient or contractor (49 CFR §26,Appendix A-IV.F).

4-9


15. Prospective contractors shall only use of the NY State Directory of Certified DBEs, which iscalled the “New York Sate BizNet UCP Directory”, located at: http://biznet.nysucp.net. Thisis the only official and accepted source of certified DBEs to perform work on Federal Aidcontracts in New York State. Searches can be made on work codes, firm names, companydescriptions, counties and on key words. Prospective contractors should also leverage theDBE solicitation capability of Bid Express/Small Business Network service. Bid Express isNYSDOT’s electronic bidding service, and the Small Business Network is an included module which provides a method for primes to electronically solicit quotes from DBEs andother subcontractors. Use of the Small Business Network will electronically help prospectivecontractors to more reliably and quickly solicit quotes from DBEs. When used as part of thegood faith effort, Bid Express can provide DOT program administrators with documentationof solicitations made to participating DBEs.

16. Prospective contractors should make …efforts to assist interested DBEs in obtainingnecessary equipment, supplies, materials, or related assistance or services, (49 CFR §26,Appendix A-IV.G).

17. Prospective contractors should …effectively use the services of available minority/womencommunity organizations, local, state, and Federal minority/women business assistanceoffices; and other organizations as allowed on a case-by-case basis to provide assistance inthe recruitment and placement of DBEs (49 CFR §26, Appendix A-IV.H). All outreach efforts(including participation at pre-bid meetings or industry-sponsored DBE targeted outreachmeetings) can be documented as part of good faith efforts. Newspaper ads are no longerrequired for DBE outreach, but can be useful especially in the downstate areas and are stillencouraged as part of EEO outreach.

18. As part of the evaluation of good faith efforts, consideration should be made as to thehistorical performance of all contractors in meeting the contract goal for similar types ofcontracts and within similar geographical location. For example, when the apparentsuccessful bidder fails to meet the contract goal, but others meet it, you may reasonably raisethe question of whether, with additional reasonable efforts, the apparent successful biddercould have met the goal. If the apparent successful bidder fails to meet the goal, but meets orexceeds the average DBE participation obtained by other bidders, you may view this, inconjunction with other factors, as evidence of the apparent successful bidder having madegood faith efforts (49 CFR §26, Appendix A-V).

H. Good Faith Efforts Review Process

1. A prospective contractor shall not be required to “…meet a contract goal in order to beawarded a contract, even though the bidder makes an adequate good faith efforts showing”.(49 CFR §26 Appendix A.III)

2. The Office of Construction’s Civil Rights Pre-Award Unit will review all good faith effortssubmitted for NYSDOT let construction contracts. The ACRD shall provide a second levelreview of all good faith efforts on contracts to which the award has been delayed, or isnearing a delay of 45 days due to issues related to no decision on the good faith effort, or oncontracts that the Office of Construction requests concurrence from ACRD.

3. For locally administered contracts, the Project Sponsor shall review all good faith effortssubmitted for local let construction contracts. The Regional Local Programs Unit willcoordinate any requested assistance with the ACRD to provide a second level review of good

4-10


faith efforts. The ACRD will provide a second level review when requested to do so by theProject Sponsor, the Regional Local Programs Bureau; or when the Department believes asecond review would help to ensure the credibility of the program. On all locallyadministered contracts, the Department reserves the right to review any good faith effortwhich has been approved by a local Project Sponsor.

4. NYSDOT can choose to request an additional review of a good faith effort by FHWA. Thatregulatory level review should not be routine, but only requested on an exception basis whenthe NYSDOT desires a second opinion for a challenging evaluation. The FHWA can at anytime request to review a good faith effort on any federally aided contract.

5. The Contract Management Bureau (CMB) shall review all good faith efforts submitted forNYSDOT administered non-A&E contracts. The ACRD can provide a second level reviewof any good faith efforts when requested by CMB.

I. Contractor Appeal and Administrative Reconsideration

The prospective contractor may directly contact either the Chief Engineer, Engineering Division(construction contracts), or the Chief Administrative Officer, Administrative Services Division(non-A&E contracts), to appeal the review process (49 CFR §26.53(d)). The appeal process forconstruction contracts is covered in Section 102-12 of the NYSDOT Standard Specifications, andthe appeal process is delegated within NYSDOT by Departmental Official Order #1682. Theappeal process is limited to:

1. The prospective contractor must have the opportunity to provide written documentation orargument concerning the issue of whether it met the goal or made adequate good faith effortsto do so. The prospective contractor has 5 business days from receipt of notification fromNYSDOT to submit an appeal of the decision.

2. The decision on reconsideration must be made by an official who did not take part in theoriginal determination that the prospective contractor failed to meet the goal or makeadequate good faith efforts to do so.

3. The prospective contractor must have the opportunity to meet in person with thereconsideration official to discuss the issue of whether it met the goal or made adequate goodfaith efforts to do so.

4. A written decision on reconsideration shall be sent to the prospective contractor, whichexplains the basis for finding that the prospective contractor did or did not meet the goal ormake adequate good faith efforts to do so.

5. The NYSDOT shall determine at their discretion if a good faith effort is adequate andreasonable on all federal funded contracts. The result of the reconsideration process is notadministratively appealable to the U.S. Department of Transportation.

4.2.3 DBE Participation Towards Contract Specific Goals (DBE Attainments)

A. Credit towards contract specific goals

1. For construction contracts, refer to Section 105 of the current NYSDOT StandardSpecifications.

4-11


2. The contractor shall count DBE participation toward meeting its DBE goal for only thoseexpenditures originally committed to DBEs prior to contract award (pre-award) and thosenegotiated with NYSDOT after award (post-award).

3. Credit shall be authorized for DBE subcontractor participation only when the DBE provides acommercially useful function.

4. If a DBE is no longer certified at the time of payment for the work by the contractor, then thedollar value of the payment for work performed under the contract after the date ofdecertification will not be counted towards the overall annual goal, (except when removal isbased upon size standard (49 CFR §26.87.j.3)).

5. The participation of a DBE subcontractor will not be credited towards the prime contractor'sDBE achievement of the overall project goal until the amount payable to the DBE hasactually been paid (49 CFR §26.55(h)).

B. Good Faith Efforts for Substituting DBEs

If a DBE subcontractor withdraws from the contract, is terminated, or fails to complete its workon the contract for any reason, the prime contractor shall make good faith efforts to find anotherDBE subcontractor to substitute for the original DBE. These good faith efforts shall be directedat finding another DBE to perform at least the same amount of work or value of work under thecontract as the DBE that was terminated, to the extent needed to meet the contract goalestablished for the project (49 CFR §26.53(f.2)).

C. Crediting for DBE Prime Contractors

In determining whether a DBE prospective contractor for a contract has met a contract goal, onlythe work the DBE has committed with its own forces as well as the work that it has committed tobe performed by DBE subcontractors or suppliers will be counted.

4.3 Contract Performance

4.3.1 DBE Approval

Every DBE proposed for use on a contract towards meeting a DBE goal, requires approval by the contractsponsor/manager. Criteria for approval of participation of a DBE includes that they shall be certifiedunder the NYSUCP either with NYSDOT work codes, or if not applicable, with NAICS work codes orbusiness descriptions which are consistent with the work activities being performed under the contractand provide a CUF. DBE firms shall adhere to the following requirements.

4.3.2 Commercially Useful Function

The contractor is responsible for ensuring that DBEs working on the project perform a commerciallyuseful function (CUF). The contractor shall receive credit toward meeting the assigned DBE goal andpayment for DBE commercially useful function performed work only.

49 CFR §26.55 (c.1) defines commercial useful function as "A DBE is considered to perform acommercially useful function when it is responsible for execution of the work of the contract and iscarrying out its responsibilities by actually performing, managing, and supervising the work involved."

The actual CUF review/audit will be performed by the contract owner/sponsor. On construction projectsthis is usually the Engineer-in-Charge of the contract, assisted by the Regional Compliance Specialist, or

4-12


the Project Manager for non-construction contracts. CUF reviews will be performed on a routine basisand: whenever there is any indication that a DBE may not be performing a CUF; whenever a DBEperforms work which varies from the bid items indicated in the contractor’s commitment forms; whenever a change in the performance of the DBE occurs; whenever a substitution of work or a changeorder occurs which affects the work to be accomplished by a DBE and, whenever a replacement orsubstitution of a DBE occurs.

When a DBE is initially determined not to be performing a CUF as defined above, the DBE may presentevidence to rebut this determination. The NYSDOT will determine if firm is performing a CUF given thetype of work involved and normal industry practices.

Decisions on CUF matters are subject to review by the concerned operating administration, (FHWA), butare not appealable to USDOT.

For construction contracts, refer to current NYSDOT Standard Specifications Section 102-12, which takeprecedence over this document should there be a discrepancy between the guidance.

A. DBE Management

The DBE majority owner(s) must manage the work contracted. The management shall includescheduling work operations, ordering equipment and materials (if materials are part of thecontract), preparing and submitting payrolls and all other required reports and forms, and hiringand firing employees, including supervisory employees.

Daily work operations must be under the direct supervision of the DBE majority owner(s) or a jobsite supervisor (on a full-time basis) who is in the employ and under the direct control of the DBEmajority owner(s) only. If the non-socially and economically disadvantaged owners of the firmare disproportionately responsible for the operation of the firm, then the firm is not controlled bysocially and economically disadvantaged person, shall not be considered a DBE, and constitutes afailure to perform a CUF.

The supervision of the work by personnel normally employed by another contractor or bypersonnel not under the control of the DBE constitutes a failure to perform a CUF.

For locally administered contracts that allow second-tier subcontracting, DBE subcontractorsshall be responsible for the continuous management, direction, and control of their sub-subcontractors.

B. DBE Workforce

The DBE must solicit, hire, place on its payroll, direct, and control all workers performing workunder its contract. The DBE owner or its job site supervisor must, on a full-time basis, superviseand control the work of the contract.

The DBE may, with the prior written consent of the contract engineer-in-charge or manager,augment its work force with personnel of another firm. The project manager shall approve therequest only when:

(1) Specialized skills are required, and(2) The use of such personnel is for a limited time period.

4-13


C. DBE Equipment

The DBE is expected to perform the work with its own operators and with equipment that isowned, being purchased, leased or rented by the DBE under a written agreement that has beenconsented to by the Engineer-in-Charge/Project Manager prior to the DBE starting work.

No credit will be given, nor payment made for the cost of equipment leased or rented and used inthe DBE firm's work when payment for those costs is made by a deduction from the primecontractor's payment(s) to the DBE firm.

D. Equipment Leased From the Prime Contractor

The DBE may lease equipment from the prime contractor provided a written rental agreement,separate from the subcontract specifying the terms of the lease arrangement, is consented to bythe project manager prior to the DBE starting work.

The DBE must hire, direct, supervise, control and carry the operator of the equipment on itspayroll. The cost of leasing or renting from the prime contractor shall only be approved if it is atthe accepted or going industry rates.

Specialized equipment and operator leased from the prime contractor: The DBE may leasespecialized equipment, provided a written rental agreement, separate from the subcontractspecifying the terms of the lease arrangement, is consented to by the project manager prior to theDBE starting work.

The NYSDOT shall consent to the lease agreement only when:(1) the equipment is of a specialized nature,(2) the equipment is readily available at the job site,(3) the operation of the equipment is under the full control of the DBE,(4) the lease arrangement is for a short term, and(5) the lease arrangement is a normal industry practice.

4.3.3 Multi-Tier Subcontracting

Multi-tier subcontracting is not allowed on NYSDOT let construction contracts. Suppliers and servicesmay be credited at the second tier level. For locally administered contracts that allow second-tiersubcontracting, second tier DBE subcontracts may be counted toward the prime contractor's DBE goalprovided it was listed in the original DBE commitment prior to bid award. Requirements forsubcontracting on non-A&E contracts are included in the RFP.

4.3.4 Substitution

On construction contracts, the Engineer-in-Charge monitors the performance of the work items sub-contracted to DBEs to ensure that the commitments are being met by the prime contractor. On non-construction contracts, the project manager similarly monitors that the commitments to DBEs are beingmet.

The contractor must notify and obtain the written approval of NYSDOT prior to replacing a DBE ormaking any other change in the participation. For non-A/E contracts, substitute DBEs rates or costsshould not exceed those of the original DBE. Exceptions require justifications subject to NYSDOTapproval.

4-14


Approval for replacement will be granted only if it is demonstrated that the DBE is unable or unwilling toperform and that the contractor exercised good faith efforts to enable the DBE to perform, and thework/amount is being replaced by another certified DBE or the contractor has submitted writtendocumentation of good faith efforts to obtain a substitute DBE.

The contractor's ability to negotiate a more advantageous contract with another subcontractor will not beconsidered a valid basis for replacement. Requests to substitute committed DBEs will be scrutinizedclosely. The contractor must document efforts made at the time of commitment to determine that theDBE was capable of performing the work and subsequent efforts made to enable the DBE to perform.The evidence must show that the contractor investigated the DBE's capacity and capability of performingat the time of the commitment. The DBE must have possessed or have had access to adequate resourcesand workforce. The evidence must also show that the contractor assisted the DBE with supportive actionsto enable the DBE to perform.

The notice from the contractor requesting replacement must include the following:

A. Documentation as to the contractor's investigation at the time of the commitment of the DBE'scapacity to perform work;

B. Documentation as to the contractor's good faith efforts to enable the DBE to perform;

C. All documentation describing and citing specifications or inaction of the DBE, which constitutetheir unwillingness or inability to perform;

D. Identification of the DBE proposed for replacement with the work codes, pay items and amountsto be performed by the replacement; and

E. The total dollar amount, per pay item, paid to date to the DBE to be replaced.

4.4 Timely Payments

Federal laws governing USDOT funded contracts …“require prime contractors to pay subcontractors for satisfactory performance of their contracts no later than 30 calendar days from receipt of eachpayment”…the project sponsor…“makes to the prime contractor (49 CFR §26.29.a). In New York State, the revised 2009 state general business law requires prime contractors to approve or disapprove asubcontractor’s invoice within 12 business days of receipt of the invoice; and upon approval of theinvoice, make payment to the subcontractor no later than 30 days after approval of the invoice.Contractors who work on NYSDOT administered contracts are required by the contract specificationssection 109-07 (under NYS Finance Law Section 139-f(2)) to pay subcontractors and material suppliersno later than 7 calendar days from the receipt of each payment the contractor receives from the State.

Contract sponsors/managers, both state and local, are expected to monitor timely payments to ensureDBEs are paid in a timely fashion. NYSDOT’s Civil Right’s Reporting System assists with the monitoring of construction contractors’ compliance with these requirements.

5-1


5 Monitoring Performance (Contract Compliance)

5.1 Project Management and Contract Administrative Staff

NYSDOT contract management personnel, in consultation with the ACRD, are responsible for ensuringthat contracts are executed fully in compliance with all federal and state requirements.

On construction contracts, the Engineer in Charge working with the Regional Compliance Specialist areresponsible for all monitoring and reviews of compliance, including possible recommendations to theRegional Construction Engineer as to a DBE’s right to participate on a contract and any compliance actions against the prime contractor. Procedures such as those described below pertaining to highwayconstruction projects will also be followed similarly in monitoring compliance on all types of USDOTfunded contracts.

On non-A&E contracts, the project manager of the sponsoring group is responsible for reviews ofcompliance and DBE utilization.

5.2 ACRD

ACRD staff will monitor both overall race-neutral and race-conscious methods of DBE utilization.Adjustments to race-conscious goals may be necessary to assure achievement of overall department goals,(49 CFR §26.37 (b)).

5.2.1 Race-conscious Methods (generally construction contracts on which a goal is set)

When a DBE goal is set on a construction contract, the Regional Compliance Specialist (RCS) will attendthe pre-bid and pre-construction meetings when scheduled. Once the contractor begins work, the RCS incooperation with the Engineer in Charge will monitor the amount actually paid to the DBEsubcontractors. Payment updates are required each month from the prime contractor on the amount paidto each DBE. On non-A&E contracts, a Compliance Specialist from CMB will attend any pre-proposalconference and be a principal civil rights agent during contract negotiations with the designatedconsultant (or consultant team).

5.2.2 Race-neutral Methods (generally contracts on which a goal is 0% or DBEcommitments and/or attainments exceed the assigned goal)

All Architectural and Engineering (A&E) Contracts have a race-neutral goal of 18% as agreed to by theA&E Industry. This participation shall be monitored by the project manager as the project progresses.Participation amounts (attainments) shall be reported by the prime consultant to the NYSDOT each time apayment request is submitted.

5.3 Prime Contractor (Construction Contracts)

5.3.1 Contractor's DBE Liaison Officer

Section 105 of the Standard Specifications requires the contractor to designate a DBE Liaison Officer toadminister the contractor's DBE Program. The DBE Liaison Office shall have the authority to makedecisions and speak on behalf of the contractor regarding the contractor’s DBE Program. The name of this individual will be provided to NYSDOT Engineer-in-Charge at the pre-construction meeting.

5-2


5.3.2 DBE Subcontracts

The contractor must enter into subcontracts, purchase orders, etc with all DBEs identified in theContractor's Utilization Worksheet. All Federal and State provisions must be included in thesubcontracts.

5.3.3 DBE Utilization Reporting

For construction contracts, and in accordance with Section 102 & 105 of the current StandardSpecifications, contractors are required to report DBE utilization in the Department’s approved civil rights reporting system. Contractor reporting is required to be completed each month by the 15th day ofthe following month. DBEs are required to provide confirmations of payments.

5.4 Non-A&E Contracts

Prime contractors or consultants are required to report DBE utilization on non-A&E contracts to theproject manager of the sponsoring group as part of their regular bill and progress report submissions asrequired by the contract’s terms and conditions. The project manger should review to ensure proper DBE utilization over the life of the contract. The Accounting Bureau is responsible for capturing all DBEpayments from paid invoices and entering that data into the Department’s civil rights reporting system.

5.5 Sub-Recipients or Project Sponsors

5.5.1 Local Sponsor's DBE Coordinator

Local municipalities shall designate a person to review, coordinate and manage all activities relating tooversight of DBE commitments, attainments and compliance. The DBE Coordinator shall have theauthority to make decisions and speak on behalf of the local sponsor regarding its DBE Program. Thatperson shall review good faith efforts and monitor DBE utilization for the municipality throughout the lifeof the contract. Should this person need technical assistance on DBE topics, they should contact theRegional Local Projects Liaison of the appropriate NYSDOT regional office. The Regional LocalProjects Liaison can, in turn, contact ACRD for additional assistance.

6-1


6 Guidelines for DBE Certification

6.1 Unified Certification Program (UCP)

A Disadvantaged Business Enterprise (DBE) Unified Certification Program (NYSUCP) has beenestablished in New York State (NYS) in accordance with Title 49 Part 26 of the Code of FederalRegulations (49 CFR 26). Pursuant to a Memorandum of Understanding (MOU) signed by all recipientsrequired to participate in the NYSUCP, the Metropolitan Transportation Authority (MTA), the NiagaraFrontier Transportation Authority (NFTA), the New York State Department of Transportation(NYSDOT) and the Port Authority of New York & New Jersey (PANYNJ) have been designated asCertifying Partners for the NYSUCP.The NYSUCP maintains a Unified DBE Directory in accordance with 49 CFR §26.31, the directoryincludes the following publicly available information for each firm: Name, address, and telephonenumber of firm, Contact person for firm, Types of work performed by the firm with appropriate 6 digitNorth American Industry Classification System (NAICS) code and description. The NYSUCP DBEDirectory contains additional information including but not limited to the following: geographic locationof the firm (i.e., county), web site address of the firm, and e-mail address of the firm and/or contactperson. Users will be able to sort by county or type of work, either for a single county/work type ormultiple counties/work types. There will be links to and from the NYSUCP Certifying Partners’ respective web sites and the New York State M/WBE Directory.

6.2 UCP Responsibilities

As provided under 49 CFR 26, only firms owned and controlled by socially and economicallydisadvantaged person(s) are to benefit from the DBE Program. NYSDOT’s Audit and Civil Rights Division is responsible for ensuring compliance with the federal regulations in the determination of aDBE certification.

6.3 Certification Eligibility Requirements

Eligibility standards for certification as a DBE and participation in the NYSUCP are governed by federalregulations set forth at 49 CFR 26 Subpart D. Only those firms who can demonstrate that they meet therequirements for certification will be granted DBE certification.

6.3.1 Burden of Proof

The firm seeking certification has the burden of demonstrating to the certifying partner, by apreponderance of the evidence, that it meets the requirements concerning group membership or individualdisadvantage, business size, ownership, and control. The certifying partner will make determinationsconcerning whether individuals and firms have met the burden of demonstrating group membership,ownership, control, and social and economic disadvantage by considering all the facts in the record,viewed as a whole. A record is defined as all material submitted to the certifying partner by the firmseeking certification and any other information available to the certifying partner in performing itsinvestigation.

6-2


6.3.2 Business Size

The firm's size (including its affiliates), cannot exceed the following limits:

Average Annual Gross ReceiptType of Firm for three preceding years

General Contractor $22.41 MillionSpecial Trade Contractor $14.0 MillionEngineering, Architectural $4.5 Million

General Contractor's standards are established by Section 106(c) of the State Transportation and Uniformand Relocation Assistance Act (STURAA) and reviewed by the US Department of Transportation. Allother standards are those established by the Small Business Administration (SBA) and apply to allgovernment subcontractors (See 13 CFR §121). A firm that exceeds these gross receipts levels is noteligible for certification.

6.3.3 Disadvantaged Group Membership

For the purposes of certification, the certifying partner will presume that individuals who are UnitedStates citizens (or lawfully admitted residents) who are also members of the groups identified in 49 CFR§26.5 are socially and economically disadvantaged unless the presumption is rebutted. These individualsdo not have the burden to prove they are socially and economically disadvantaged. However, if thecertifying partner has reason to question whether an individual is a member of such a group, the certifyingpartner will require the individual to produce appropriate documentation of group membership. Inmaking a group membership determination, the certifying partner will consider: 1) whether or not theperson has held himself/herself out to be a member of the group over a long period of time prior toapplication for certification; and 2) whether the person is regarded as a member of the group by therelevant community. If the certifying partner determines an individual is not a member of a designatedgroup, the individual must demonstrate on an individual basis that they are socially and economicallydisadvantaged. The certifying partner's decision concerning membership in a designated group may besubject to certification appeal procedures.

6.3.4 Small Business Administration 8(a) Program

Applicant firms found to be disadvantaged by the Small Business Administration (SBA) pursuant toSection 8(a) of the Small Business Act shall be presumed by the state to be socially disadvantaged. Aspart of the application process, the SBA firm must submit a copy of a firm’s application package that was submitted to the SBA and a copy of their certification letter to substantiate they are sociallydisadvantaged. In addition, SBA firms will be required to demonstrate their economically disadvantagedeligibility, and must undergo a site visit.

6.3.5 Individual Determination of Social and Economic Disadvantage

If an individual is not a member of a designated group, s/he must demonstrate that s/he is socially andeconomically disadvantaged in accordance with 49 CFR 26, Appendix E.

A. Socially Disadvantaged

Socially disadvantaged individuals are those who have been subjected to racial or ethnicprejudice or cultural bias within American society because of their identities as members ofgroups and without regard to their individual qualities. The certifying partner will consider any

6-3


relevant evidence in its assessment of this element, and in every case the certifying partner willconsider education, employment, and business history to see if the totality of circumstancesshows disadvantage in entering into or advancing in the business world.

B. Economically Disadvantaged

Economically disadvantaged individuals are socially disadvantaged individuals whose ability tocompete in the free enterprise system has been impaired due to diminished capital and creditopportunities as compared to others in the same or a similar line of business who are not sociallydisadvantaged. In considering diminished capital and credit opportunities, the certifying partnerwill examine all factors relating to personal financial condition including personal income for thepast two years, personal net worth, and the fair market value of all applicable assets. Thecertifying partner will also consider the financial condition of applicants compared to financialprofiles of small businesses in the same primary industry classification(s) or similar lines ofbusiness.

6.3.6 Independence

49 CFR §26.71 (b) states, in part that, "Only an independent business may be certified as a DBE. Anindependent business is one the viability of which does not depend on its relationship with another firm orfirms. "

6.3.7 Ownership

To be an eligible DBE, a sole proprietor firm must be owned by socially and economically disadvantagedindividuals. In the case of a corporation, such individuals must own at least 51 percent of each class ofvoting stock outstanding and 51 percent of the aggregate of all stock outstanding. In the case of apartnership, 51 percent of each class of partnership interest must be owned by socially and economicallydisadvantaged individuals and must be reflected in the firm's partnership agreement. In the case of alimited liability company, at least 51 percent of each class of member interest must be owned by sociallyand economically disadvantaged individuals.

The firm's ownership by socially and economically disadvantaged individuals must be real, substantial,and continuing, going beyond pro forma ownership of the firm as reflected in the ownership documents.The disadvantaged owners must enjoy the customary incidents of ownership and share in the risk andprofits commensurate with their ownership interest, as demonstrated by the substance, not merely theform, of arrangements. The certifying partner will consider factors such as whether the disadvantagedindividual made contributions of capital and/or expertise that were substantial, and that the disadvantagedindividual's business interests were not gifted or transferred from a non-DBE firm or non-disadvantagedindividual related to the applicant DBE, or acquired through the improper counting of marital assets.

The specific considerations for determining ownership by socially and economically disadvantagedindividuals are outlined in the regulations as may be supplemented by written procedures issued byUSDOT from time to time.

A. For-Profit Firms

Only firms organized for profit may be eligible DBEs. Not-for-profit organizations, even thoughcontrolled by socially and economically disadvantaged individuals, are not eligible to be certifiedas DBEs.

6-4


B. Subsidiaries and Affiliates

An eligible DBE firm must be owned by individuals who are socially and economicallydisadvantaged. Except as provided by this policy, a firm that is not owned by such individuals,but instead is owned by another firm, even a DBE firm, cannot be an eligible DBE.

C. Tribal Organizations

The Certifying Partner recognizes that a firm owned by an Indian tribe, Alaska NativeCorporation, or Native Hawaiian organization as an entity, rather than by Indians, AlaskaNatives, or Native Hawaiians as individuals, may be eligible for certification as long as such firmmeets the size standards and is controlled by socially and economically disadvantagedindividuals.

Each socially and economically disadvantaged individual owner must demonstrate that s/he doesnot have a personal net worth exceeding $750,000. In determining net worth, the CertifyingPartner will exclude an individual's ownership interest in the applicant firm and the individual'sequity in his/her primary residence. If the individual's personal net worth exceeds $750,000, theindividual's presumption of economic disadvantage based on group membership or theindividual's demonstration of economic disadvantage will be conclusively rebutted without anyfurther formal proceedings.

When an individual's presumption of social and/or economic disadvantage has been rebutted, his/herownership and control of the firm cannot be used for the purpose of DBE eligibility unless and until s/hemakes an individual showing of social and or economic disadvantage in the future. If the basis forrebutting the presumption is a determination that the individual's personal net worth exceeds $750,000,the individual will no longer be eligible for participation in the program and cannot regain eligibility bymaking an individual showing of disadvantage.

A verification of Personal Net Worth will be included with the application form submitted to thecertifying partner for consideration. Personal financial information will be considered confidential andwill not be disclosed without the express written consent of the applicant (except as allowed by law.)

6.3.8 Control

Only an independent business may be certified as a DBE. An independent business is one the viability ofwhich does not depend on its relationship with another firm or firms. In determining whether a potentialDBE is an independent business, the certifying partner will scrutinize relationships with non-DBE firmsin such areas as personnel, facilities, equipment, financial and/or bonding support, and other resources.The certifying partner will consider present or recent employer/employee relationships, the firm'srelationship with prime contractors, and factors related to the independence of a potential DBE firm.Further, the certifying partner will consider the consistency of relationships between the potential DBEand non-DBE firms with normal industry practice.

A DBE firm must not be subject to any formal or informal restrictions, which limit the customarydiscretion of the socially and economically disadvantaged owners. The socially or economicallydisadvantaged owners must possess the power to direct or cause the direction of the management andpolicies of the firm and to make day-to-day as well as long-term decisions on matters of management,policy and operations. The certifying partner will consider factors such as the position, managerial role,time commitment and competence in the types of work the firm conducts of the disadvantaged individualowners, the delegation of authority to non-disadvantaged individuals, licensing, and the firm's capacity to

6-5


do the work. The certifying partner will consider whether any non-disadvantaged owner or individual isdisproportionately responsible for directing the daily operations of the firm.

The specific considerations for determining control by socially and economically disadvantagedindividuals are outlined in the regulations as may be supplemented by written procedures issued byNYSUCP from time-to-time.

6.3.9 Other Considerations

A. Commercially Useful Function

The certifying partner will not consider commercially useful function issues in any way inmaking decisions about whether to certify a firm as a DBE. Consideration of whether a firmperforms a commercially useful function pertains solely to counting toward DBE goals for theparticipation of any firms, which have already been certified as DBEs.

B. Pattern of Conduct

In making certification decisions, the certifying partner will consider whether a firm has exhibiteda pattern indicating its involvement in attempts to evade or subvert the intent or requirements ofthe DBE program.

C. Present Circumstances

The certifying partner will evaluate the eligibility of a firm on the basis of present circumstancesand will not refuse to certify a firm based solely on historical information indicating lack ofownership or control by socially and economically disadvantaged individuals at some time in thepast. If the firm currently meets ownership and control standards the certifying partner will notrefuse to certify a firm solely on the basis that it is a newly formed entity.

D. DBE Cooperation

The certifying partner expects DBE firms and firms seeking DBE certification to cooperate fullywith requests for information relevant to the certification process. Failure or refusal to providesuch information is grounds for denial or removal of certification.

E. Pre-qualification

Certifying partner will not require a DBE firm to be pre-qualified as a condition for certificationunless NYSDOT requires all firms that participate in its contracts and subcontracts to be pre-qualified.

6.3.10 Joint Venture

A joint venture is eligible if the DBE partner of the joint venture is a state certified DBE and the DBEpartner is responsible for a clearly defined portion of the work to be performed and shares accordingly inthe ownership, control, management responsibilities, risks, and profits of the joint venture.

Joint venture applications are certified by the NYSDOT on a project by project basis. Applications shallbe submitted to the NYSDOT Office of Contracts and the Office of Civil Rights will evaluate anddetermine compliance in accordance with established procedures.

6-6


6.4 Application Procedure

All firms seeking DBE certification are required to submit a signed and notarized application to acertifying partner and attest to the accuracy and truthfulness of the information provided. For firmscurrently certified 8(a), the certifying partner will accept a copy of a firm’s application package that was submitted to the SBA and a copy of their certification letter. The certifying partner will review allinformation in the Application, as well as the supporting documentation, prior to making a decision aboutthe DBE eligibility of the firm.

The applicant must submit the following:

A. A signed, notarized certification of being disadvantaged (including a narrative if the individual isdemonstrating a disadvantage on an individual basis); and

B. A signed, notarized statement of personal net worth with supporting documentation.

The certifying partner will not impose an application fee for firms to participate in the DBEcertification process.

The certifying partner will safeguard from disclosure to unauthorized persons all informationgathered as part of the certification process that may be regarded as proprietary or theirconfidential business information, consistent with applicable federal, and state laws.

Failure of the applicant to provide all necessary information and documentation as required shallconstitute the basis for denying certification.

6.4.1 Supplemental Documentation

The following documents are required to be provided by all business types:

Resumes of majority owner(s) and key employees. Please include previous work experiencewith dates and specific duties within this business.

Rental or lease agreements, and professional service agreements (for office space, equipment,related to the business).

Company profile including a brief description of the firm's product or services.

Additional documentation is required for the various businesses as follows:

A. Sole Proprietor

Proof of ethnicity/gender (birth certificate, tribal enrollment documents, passport, driver'slicense, etc.)

Individual federal tax returns for the last three (3) years (Schedule C, Profit and LossStatement).

Necessary licenses to conduct the business, e.g., contractor's license (construction,landscaping, electrical, plumbing, welding, engineering), city business license (if required),Department of Environmental Quality license, professional license, etc.

Certification letter from the individual's home state, if the business is not located in NewYork.

6-7


Assumed Business Name registration, if applicable.

B. Limited Liability Company (LLC)

Proof of ethnicity/gender (birth certificate, tribal enrollment documents, passport, driver'slicense, etc.) This is to be provided for the each class of member’s interest that is at least 51 percent.

Federal tax returns for the last three (3) years. Necessary licenses to conduct the business, e.g., contractor's license (construction,

landscaping, electrical, plumbing, welding), SSPC certification (structural parity,)professional license (engineering, survey, landscape, architecture,) etc.

Articles of Organization. Operating Agreement. Minutes of the most recent company meetings affecting ownership, management, and control. Certification letter from the state of incorporation, if the business is not located in New York.

C. Corporations

Proof of ethnicity/gender (birth certificate, tribal enrollment documents, passport, driver'slicense, etc.) This is to be provided for individuals owning at least 51 percent of each class ofvoting stock outstanding and 51 percent of the aggregate of all stock outstanding.

Corporate federal tax returns for the last three (3) years (first two pages.) Necessary licenses to conduct a business, e.g., contractor's license (construction, landscaping,

electrical, plumbing, welding, engineering), professional license of the principal firm owner. Articles of Incorporation AND amendments, including date approved by State. Minutes of the most recent corporate meetings affecting ownership, management, and

control. Corporation by-laws. Copy of stock certificates issued (not specimen copy, both sides). Stock transfer ledger. Certification letter from the home state, if the business is not located in New York.

D. Partnerships

Proof of ethnicity/gender (birth certificate, tribal enrollment documents, passport, driver'slicense, etc.) This is to be provided for partners with a 51 percent of each class of partnershipinterest.

Federal, partnership tax returns for the last three (3) years (first two pages). Necessary licenses to conduct the business, e.g., contractor's license (construction,

landscaping, electrical, plumbing, welding, engineering), professional license, etc. Partnership agreement including buy-out rights and profit sharing agreement (signed and

dated). Certification letter from the home state, if the business is not located in New York.

6-8


NOTE: New businesses may not have federal tax information available at the time of application. Thisneeds to be indicated on the application. As such, the applicant firm must provide documentation of allincome since its formation up to the time of application (e.g., executed contracts, invoices, receipts, etc.).The applicant firm must also provide documentation that it is actively seeking work (e.g., responding tosolicitations, evidence of contacting contractors or consultants, etc.)

6.4.2 On-site Reviews

The certifying partner schedules an on-site review when it is satisfied that the application and supportingdocumentation have been received and are complete. An on-site review of the applicant firm isconducted in accordance with 49 CFR §26.83 (1) of the regulations.

A. The reviewer assigned to the DBE file will schedule an on-site interview with the DBE applicantfirm.

B. The reviewer will review the application prior to the on-site interview to assist in developing anyadditional questions that will help clarify the applicant's status.

C. The reviewer normally contacts the DBE applicant firm, by phone, to advise of and arrange forthe review. If the DBE applicant is unable to be contacted by phone or mail, or delays the date ofthe review without good reason, or fails to appear for the scheduled review, every effort is madeto reschedule the on-site review. A DBE applicant’s failure to permit an on-site review will begrounds for denial of DBE certification for failure to cooperate.

D. The reviewer conducts on-site reviews by inquiring of and obtaining information as follows:

(1) Firm name.(2) Directions to firm's location.(3) Principal contact and phone number.(4) Organizational structure.(5) Persons interviewed and position with firm.(6) Firm's primary line of business.(7) Identities of the firm's board of directors.(8) Frequency that board meets.(9) Firm's bonding/insurance company.(10) Current bonding limitation(11) Determine:

(a) Firm's bond/insurance agent(b) Firm's attorney(c) Firm's Certified Public Accountant(d) Firm's banker(s)

(12) Number of permanent employees.(13) Who approves:

(a) Hiring and dismissal of employees(b) In this person's absence

(14) Employee recruiting.(15) Supervisors employed.

6-9


(16) Explanation of supervisor's duties and responsibilities.(17) Determine how the disadvantaged owner acquired interest in the firm.(18) Who contributes capital, equipment, real estate, inventory, etc.(19) Technical assistance provided by others.(20) Total hours per day and days per week DBE owner actively engaged in firm's business.(21) DBE owner's daily duties.(22) Is DBE owner employed elsewhere - if yes, where?(23) Who makes major business decisions (i.e. expansion, diversifying)?(24) Marketing of the firm, (how and who's responsible).(25) Dispersal of funds, (how and under whose approval).(26) Signatures on payroll and other checks, (who signs).(27) Any loan negotiation/arrangement information (who does this).(28) Firm's line of credit and its limits.(29) Contracts currently active.(30) Business tax return information (who prepares, who signs).(31) Description of firm's bidding/estimating process.(32) Description of firm's process of monitoring job costs.(33) Description of methods used to resolve field problems.(34) Who negotiates contract disputes.(35) Explanation of relationships with other firms who might provide;

(a) Manpower/personnel(b) Equipment(c) Office space(d) Yard or warehouse space

(36) Information which might show the DBE owner was employed by any board member orofficer of this firm.

(37) Average length of time firm's products are stored/inventoried.(38) Salaries paid to management personnel.(39) Explanation of spouse's relationship to firm - other firms.(40) Review firm's business plan (goals for future growth, etc.).

6.4.3 On-Site Review Observations and Special Considerations

When conducting on-site reviews, Reviewers actively observe various activities and items to aid indetermining certification eligibility. In addition to visiting the business office, the Reviewer willaccompany the applicant to a job site, if one is available, and observe the work in progress. If theapplicant firm is out-of-state, the Certifying Partner requests a copy of the on-site review document fromthe state in which the applicant's principal place of business is located. Activities and items include:

A. Photos of signage in front of applicant firm’s building.B. Photos of vehicles and equipment including company logo and license plates.C. Photos of office arrangements and equipment.D. Nearby businesses; sharing of office space or building with other businesses.E. Workers present.

6-10


F. Who dominates conversation?G. Who appears to have expertise and control?H. Photos of business location and principal.I. Samples of business cards, brochures, and marketing materials.J. Other relevant items and activities.

Reviewers also observe closely those situations where:

An applicant has a relative or other individual who is not eligible that has extensiveexperience in the same line of work and may also be actively involved in the applicant's firm.

An applicant has close ties with a prime contractor, e.g. previously worked only for thatcontractor, or a prime contractor is owner of the firm.

The on-site review form is signed and dated by the reviewer conducting the review.

6.4.4 Criteria for Evaluating an Applicant's Eligibility

A. Business Size

To be an eligible DBE, a firm (including its affiliates) must be an existing small business asdefined by SBA standards. The Certifying Partner will apply current SBA business sizestandards found in 13 CFR §121 appropriate to the types of work the firm seeks to perform. Evenif the firm meets the SBA requirements, a firm is not an eligible DBE if the firm (includingaffiliates) has had average annual gross receipts as defined by SBA regulations over the firm'sprevious three (3) fiscal years in excess of $22.41 Million, as adjusted for inflation from time totime by USDOT.

B. Socially and Economically Disadvantaged Status

Once an applicant firm is determined to be a small business, social and economic disadvantage isto be reviewed. Guidance for determining social and economic disadvantage is provided under 49CFR 26 Appendix E. Social and economic disadvantage status may be conferred upon applicantfirms in instances where the firm:

(1) Has been granted Section 8(a) certification by the Small Business Administration (SBA).

(2) Is owned and controlled by one or more women or a member(s) of one of the minority groupsdesignated in 49 CFR §26.5.

(3) Is owned and controlled by an individual(s) who, although not a woman or member of one ofthe minority groups designated in 49 CFR §26.5, establishes socially and economicallydisadvantaged based on 49 CFR 26 Appendix E.

(4) Does the individual have a chronic physical handicap, which has restricted and still restrictsprofessional acceptance, employment or business mobility? If so, explain fully.

(5) Has the individual's cultural or social background resulted in chronic underemployment,limited educational opportunities or personal deprivation? If so, explain fully.

6-11


(6) Has the individual experienced low-income status because of apparent discriminatorypractices? If so, explain precisely how such discriminatory practices led to the individualhaving limited access to needed technical, financial, or management resources and equalopportunity in obtaining contracts.

Outline other specific and pertinent examples of chronic social and economic disadvantage notcovered above.

C. SBA Section 8(a) Status

SBA 8(a) Small Business Development and SDB Small Disadvantaged Business programscertified firms, applicants requesting DBE certification must submit and the certifying partnerwill accept a copy of a firm’s application package that was submitted to the SBA and a copy oftheir certification letter. The certifying partner will accept the SBA’s determination of socially disadvantaged status; however, SBA firms will be required to demonstrate economicallydisadvantaged eligibility and must undergo a site visit.

If a firm has previously filed for, and been denied, DBE certification with a Certifying Partnerother than the one with which it is filing the application with, that application may be forwardedto the original reviewing Certifying Partner.

Dependent upon the service provided by the firm and/or its location, an application for DBEcertification may be transferred and processed by a Certifying Partner other than the one withwhich the application was filed.

With the exception of SBA 8(a) and SDB certified firms, a complete certification applicationpackage consists of the following:

USDOT Uniform Application SBA Personal Financial Statement for each qualifying socially and economically

disadvantaged owner Required basic and support documentation as determined by business structure

The verification page of the USDOT Uniform Application and the SBA Personal FinancialStatement must all be signed and notarized.

Immediately upon receipt, the application package will be reviewed for completeness.Specifically, the USDOT Uniform Application and SBA Personal Financial Statement arereviewed for original signatures and notarization, and a determination as to whether the basicrequired supporting documents have been submitted.

D. Minority Group Membership

In cases where the applicant claims social and economic disadvantage based on membership inone of the designated minority groups, the state shall ensure that the applicant's minority status isclearly established. Once minority status is established, the applicant shall be rebuttablepresumed to be socially and economically disadvantaged. This means that the applicant's socialand economic disadvantage status is established as a fact until the presumption is effectivelyrebutted. However, the state is expected to require even members of the designated minoritygroups to prove their disadvantaged status if reasonable evidence to rebut the presumption isavailable to the state.

6-12


E. Rebuttable Presumption of Disadvantage Status

The presumption of social and economic disadvantage operating in favor of the designatedminority groups may be rebutted at any time before or after certification.

If the state comes into possession of credible information that would lead a reasonable person tobelieve that a minority individual is not socially or economically disadvantaged, the presumptionis no longer operative and the burden of proof shifts back to the applicant. The existence of thepresumption does not mean that the certifying agency must ignore obvious evidence that anyapplicant for certification is not socially or economically disadvantaged unless a third partybrings a challenge. It means, rather, that in the absences of such evidence, it must presume that aminority or woman applicant is socially and economically disadvantaged, and cannot require theapplicant to prove it.

Practically speaking, the existence of clear evidence that an otherwise qualified minorityapplicant is not disadvantaged puts such applicant in a position similar to a challenged minorityor an individual claiming disadvantaged who is not a member of a designated group. If the statetentatively determines, on its own initiative based on such clear evidence, that the owner of thefirm is not socially and economically disadvantaged, the state should ensure that the owner(s) areafforded procedural safeguards equivalent to that provided in the case of third party challenges.

F. Ownership and Control

Once business size and social and economic disadvantage status has been determined, ownershipand control must be evaluated to ensure that firms applying for DBE certification are in factindependent firms, owned and controlled by one or more socially and economicallydisadvantaged individuals. Similarly, firms applying for DBE certification on the basis of femaleownership must be evaluated to ensure that they are independent and are owned and controlled bywomen. An independent firm is one the viability of which does not depend on its relationshipwith another firm or firms.

Under operational control, the applicant must have an overall understanding of and managerialand technical competence and experience directly related to the business operations.

To determine managerial control, the applicant must demonstrate that they possess the power todirect or cause the direction of the management and policies of the firm.

Applicant firms jointly owned by husband and wife will be treated the same irrespective ofwhether the state has a community property law. The Certifying Partner will determineeligibility by ensuring that the firm is in fact at least 51 percent owned by the woman and thefirm's management and daily business operations are controlled by the woman who owns it. Inreaching that conclusion, the Certifying Partner will determine whether the firm meets theeligibility standards contained in 49 CFR 26.

G. Personal Net Worth

An individual, whose personal net worth exceeds $750,000.00, excluding personal residence andinterest in the business, shall not be deemed to be economically disadvantaged.

The Certifying Partner will obtain a signed and notarized statement of personal net worth from allpersons who claim to own and control a firm applying for DBE certification and whose

6-13


ownership and control are relied upon for DBE certification. These statements will beaccompanied by appropriate supporting documentation.

6.4.5 Notification of Certification Determination

The applicant firm will receive notification, in writing, from the Certifying Partner, of the CertifyingPartner certification determination.

If a firm is granted DBE certification by the CERTIFYING PARTNER, it shall remain certifiedfor a period of at least three years, unless and until its certification has been removed inaccordance with procedures set forth in 49 CFR §26.87. If a firm is denied DBE certification bythe CERTIFYING PARTNER, it shall be provided a written explanation of the reasons for denial,specifically referencing the evidence in the record that supports each reason for the denial. Theapplicant, upon written request to the Certifying Partner, will make all documents andinformation used to render a determination of denial available for inspection.

Certification Appeal –A firm denied DBE certification may appeal the denial of DBEcertification to the United States Department of Transportation (USDOT) in accordance with 49CFR §26.89 of the regulation. Such appeal must be filed within 90 days of the date of thedetermination letter. Pending a determination by USDOT, the decision rendered by theCertifying Partner remains in effect for the NYSUCP. A firm that is denied DBE certificationmay not again apply for certification with the NYSUCP for a period of one year.

6.4.6 Reciprocal Certification

NYSUCP does not have reciprocal certification with any other state UCPs. When another UCP, inconnection with its consideration of the eligibility of a firm, makes a written request for certificationinformation NYSUCP has obtained about that firm, NYSUCP will promptly make the informationavailable to the other UCP.

6.4.7 Renewal of Certification

Once The Certifying Partner certifies a firm as an eligible DBE, it shall remain certified for a period of atleast three (3) years unless its certification is removed. The Certifying Partner will not require DBEs toreapply for certification as a condition of continuing to participate in the program during this three (3)year period. The DBEs must reapply and be re-certified if their certification is removed. The CertifyingPartners will update the DBE Directory regularly with new certification actions.

A. Notification of Change in Circumstances

Firms inform the Certifying Partner, in writing, of any changes in circumstances affecting thefirm's ability to meet disadvantaged status, business size, ownership, control requirements, or anymaterial change in the information provided in the certification application process, and attachsupporting documentation describing in detail the nature of such changes. Such notice of changefrom the DBE firm must take the form of an unsworn declaration executed under penalty ofperjury. The written notification shall be provided by the DBE within thirty (30) days ofoccurrence of the change(s). If the DBE fails to make timely notification of such changes, it willbe deemed to have failed to cooperate under the regulations.

6-14


B. Annual Affidavit of Continuing Eligibility

Annual Submission Requirement: A certified DBE firm must submit annually, on theanniversary of their DBE certification, a No Change Affidavit, an SBA Personal FinancialStatement, and supporting documentation including but not limited to personal and business taxreturns, vehicle registrations, etc. A No Change Affidavit is a sworn affidavit affirming that therehave been no changes in the firm’s circumstances affecting its ability to meet size, disadvantagedstatus, ownership or control requirements of the regulation, or any material change in theinformation provided in its application for DBE certification, along with supportingdocumentation.

The certified firm will not be required to submit a new USDOT Uniform Application or undergoan on-site review as part of the annual affidavit process.

6.4.8 Denials and Reapplication Procedures

If a firm is denied certification, it must wait at least twelve (12) months before it may reapply for DBEcertification with NYSUCP. The time period for reapplication begins to run on the date the explanationfor denial of certification is received by the applicant firm. The firm may file an appeal for any denial ofcertification to USDOT in accordance with section 6.4.9 of this document.

6.4.9 Removal Procedures (De-certification/Denial)

A DBE firm which no longer meets the eligibility standards (or misrepresented information during thecertification process) will be removed from the DBE program by having its certification removed. A firmshall remain certified during the removal process, until an administratively final decision is rendered toremove the firm’s DBE status. The date of the letter notifying the firm of such decision shall be effective date of loss of DBE status.

A. Initiating Removal

(1) The Certifying Partners shall accept written complaints from any person, including USDOT,and/or a Certifying Partner, alleging that a currently certified DBE firm is ineligible. Thecomplainant must state the specific reasons for the challenge and submit any documentation insupport of the complaint. The complainant’s identity shall be protected as provided for in 49 CFR §26.109(b). The challenged firm shall be notified, in writing, by the Certifying Partnerassigned to the DBE, of the challenge, the basis for the challenge, and the relevant sections of theregulation(s).

(2) The Certifying Partner assigned to the DBE shall thoroughly investigate the complaint within areasonable time, not to exceed 60 days. The Certifying Partner shall notify the challenged firm,in writing, by certified mail, of the preliminary findings. If reasonable cause to remove DBEcertification eligibility is found, the original Certifying Partner will notify the complainant of thespecific grounds for removal and will inform the challenged firm of its right to request an appealof the preliminary findings to the Certifying Partner.

(3) The challenged firm may request reconsideration, in writing, of the intent to remove certificationeligibility, within 15 days of the date of the notice. The request for reconsideration must be madeto the investigating Certifying Partner and must state if the firm wishes to file a written defense orappear in person for a hearing.

6-15


(4) The NYSUCP will be the hearing board for all challenges to certified firms. The CertifyingPartner conducting the investigation and making the preliminary determination for eligibilityremoval will not serve as a voting member on the hearing board. The investigating CertifyingPartner must notify the NYSUCP Hearing Panel within 5 days of receipt of the request forreconsideration from the challenged firm. In the event that a firm requests the opportunity toappear before the NYSUCP Hearing Panel, the request for reconsideration must state whether thefirm will be represented by counsel.

If the challenged firm requests reconsideration in person, the chair of the NYSUCP Hearing Panelwill contact the firm and the members of the NYSUCP Hearing Panel to set a date at a mutuallyagreed upon time.

(5) USDOT may notify the original Certifying Partner of reasonable cause to find a certified DBEfirm to be ineligible. In such cases, the Certifying Partner shall without delay begin a proceedingto determine whether the firm’s eligibility should be removed, as providedin 49 CFR §26.87.

(6) Notice of Decision–Upon notification by USDOT, the Certifying Partner will forward a copy ofthe complete administrative record for review. All appeal decisions rendered by USDOT areadministratively final and are not subject to petitions for reconsideration.

(a) The Certifying Partner assigned to the firm will update the DBE Directory accordingly.(b) For NYSDOT contracts, NYSDOT will determine whether the decertified firm is currently

participating in a NYSDOT contract or has been included in a recent bid;(c) If a contract that has not been executed before the removal notice involves a commitment by

the prime contractor to use the ineligible firm or by NYSDOT to use the ineligible firm as aDBE prime contractor, the ineligible firm cannot be counted toward the contract goal or theoverall annual goal. NYSDOT will direct the prime contractor to meet the contract goal withanother eligible DBE subcontractor or to demonstrate that it has made sufficient good faithefforts to do so;

(d) If a subcontract has been executed by a prime contractor or a prime contract has beenexecuted by NYSDOT with the ineligible firm before the removal notice, the primecontractor or NYSDOT may continue to use the firm on the contract and may continue tocount the firm's participation toward the contract goal. NYSDOT will not count that portionof the ineligible firm's performance remaining on the contract or subcontract after theremoval notice toward the overall annual goals; and

(e) If the DBE's ineligibility is caused solely by its having exceeded the size standard during theperformance of the contract, NYSDOT will continue to count its participation on that contracttoward overall and contract goals.

6.4.10 Certification Appeal to USDOT

A firm that has been denied certification, or whose eligibility has been removed, may make anadministrative appeal to the USDOT. Pending the USDOT appeal decision, NYSUCP's decision shallremain in effect. All Appeals shall be sent to:

U.S. Department of TransportationOffice of Civil Rights400 Seventh Street, SWRoom 2401Washington, D.C. 20590

6-16


All requests for an appeal must be sent, in writing, within 90 days of NYSUCP's final decision on thematter. The USDOT may accept an appeal filed later than 90 days after the date of the decision if itdetermines that there was good cause for the late filing of the appeal. The appeal request shall includeinformation and arguments regarding why the decision should be reversed. If the appeal is from a firm,the request must include information regarding certification with other USDOT recipients. If the appealis from a third party; the party will be requested to provide the same information.

The Certification Manager shall provide a copy of a complete, well-organized administrative recordwithin twenty (20) days of a request from USDOT. USDOT will make its decision based solely on theentire administrative record without conducting a hearing. The firm and complainants shall have accessto any information reviewed by USDOT in accordance with public records and privacy laws.

USDOT will affirm NYSUCP's decision if it determines based on the entire administrative record that thedecision is supported by substantial evidence or is consistent with the substantive or proceduralprovisions or procedural provisions concerning certification. USDOT shall send written notification of itsdecision including the reasons therefore to the Certifying Partner, the firm and any complainant. IfNYSUCP's decision is reversed, the Certification Manager will take all appropriate actions to conformwith the USDOT's decision immediately upon receiving the written notice. USDOT decisions areadministratively final, and are not subject to petitions for reconsideration.

6.4.11 NYSDOT Commodity Code/North American Industry Classification System(NAICS)

During the certification process for firms indicating a desire to participate in federal aid highwaycontracts, a DBE will be assigned a commodity/NAICS code by the Certifying Partner which is indicativeof the type of work the firm has shown that it can perform at the time the certification or re-certification isrequested. The Certifying Partner uses the commodity/NAICS codes in its process of evaluating projectsto identify work, which may be accomplished by DBEs, and for the evaluation of work actuallyperformed by DBEs.

7-1


7 Monitoring and Record Keeping

7.1 Civil Rights Reporting System (CRRS)

The Civil Rights Reporting System (CRRS) is envisioned to be a web-enabled civil rights data collectionand reporting system, which collects and manages civil rights data for all NYSDOT administeredconstruction contracts. One of the purposes of this reporting system is to monitor DBE commitments andattainments, while tracking compliance over the life of each contract. NYSDOT’s current system tracks only state contracted construction contracts. It requires contractors (both primes and subcontractors) toinput DBE commitments and payments (as well as other EEO data). DBE subcontractors are required toenter their independent confirmations of payments by the prime contractor. The system then automatesthe summation of amounts paid to all contractors (primes and subs), generates the rolled up data for theFederal semi annual reports.The Department is in the process of upgrading and/or expanding this system to eventually collect andtrack all NYSDOT administered construction and consultant contract data as well as locally administeredcontract data.

7.2 Monitoring Payments to DBEs

It is the contractor's responsibility (both prime and subcontractors) to maintain records and documents forseven (7) years following the performance of the contract. These records will be made available forinspection upon request by any authorized representative of NYSDOT or USDOT.NYSDOT will monitor the continuous summation of payments actually made to DBE firms and requireprime contractors and DBE subcontractors and suppliers to input appropriate information for verificationof such payments into the civil rights reporting system. Credit toward overall Department or individualcontract goals will only be given upon satisfactory evidence that payments were actually made to DBEswho were certified at the time of payment.NYSDOT may perform interim audits of contract payments to DBEs. The audit will review payments toDBE subcontractors to verify that the actual amount paid to DBE subcontractors equals or exceeds thedollar amounts stated in the report of proposed DBE participation.

7.3 Reporting to USDOT

NYSDOT will continue to report DBE participation and overall annual goal setting methods to USDOTagencies as directed. Statistical data will be maintained and reported on a semi-annual basis to USDOTagencies reflecting the DBE participation on all federally assisted contracts. The Department intends tomove towards all electronic submissions of civil rights data in an effort to improve data integrity,accuracy and timeliness. These automated reports will provide DBE participation information on race-neutral and gender-neutral contracts; race-conscious contracts; and the combined DBE participation on allfederally assisted procurement activities.

Appendix A


APPENDIX A