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Disadvantaged Business Enterprises (DBE) Program Minnesota Department of Transportation

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Title: Disadvantaged Business Enterprises (DBE) Program Minnesota Department of Transportation


1
Disadvantaged Business Enterprises (DBE) Program
Minnesota Department of Transportation April
25, 2013
Minnesota County Highway Accountants Association,
Best Western Plus Kelly Inn St. Cloud,
Minnesota Presented By Ashanti Payne Office
of Civil Rights
2
  • DBE Project Life-Cycle Beginning to End
  • MnDOTs Policy Statement
  • DBE Project goals (Planning) -
  • When do DBE goals apply?
  • When are they set within MnDOTs procurement
    process?
  • How are goals set for projects?
  • Contract Clearance - Who is responsible for
    ensuring goals are met?
  • Commercially Useful Function (CUF)
  • Counting DBE Credit/Trucking
  • Submitting a Responsible Bid (Good Faith Efforts)
  • The Good Faith Effort(GFE) review by DBE
    Specialist
  • Items which may be reviewed in assessing GFEs

3
DBE Project Life-Cycle (Cont.)
  • Reconsideration Process -
  • Contract Compliance (Post Award DBE Monitoring)
  • On-Site Reviews
  • Replacement of DBEs
  • Prompt Payment
  • Contractor Payment Forms -
  • Final Payment Affidavit
  • DBE Commitments vs. Payments

4
Policy Statement
  • It is the policy of the Minnesota Department of
    Transportation (MnDOT) that DBEs, as defined in
    49 C.F.R. Part 26, and other small businesses,
    shall have the maximum feasible opportunity to
    participate in contracts financed in whole or in
    parts with federal funds. Consistent with this
    policy and Title VI of 1964 Civil Rights Act,
    MnDOT will not allow any person or business to be
    excluded from participation in, denied the
    benefits of, or otherwise be discriminated
    against in connection with the award and
    performance of any U.S. Department of
    Transportation (USDOT) assisted contract because
    of sex, race, color, or national origin. MnDOT
    has established a Disadvantaged Business
    Enterprise (DBE) program in accordance with the
    regulations of the DOT, 49 C.F.R. Part 26 to
    implement this policy.

5
Disadvantaged Business Enterprise (DBE)
Current Overall DBE Goal 10.3 DBE participation
on federally funded projects FHWA 2009 - 3.9
2010 - 5.6 2011 7.6 2012
6.6 Transit Projects 2009 0 2010
3.6 2011 0 2012 8.7
6
DBE Project Goals When do they apply? How and
when are they set? Who is responsible for
compliance? What if they are not met?
  • DBE Goals must be set on any contract(s) financed
    in whole or in part with federal funds.
  • We review the following when setting goals on any
    given project on a case by case basis project
    location, project size, sub contracting
    opportunities, work types availability (ready,
    willing able) of DBEs
  • Ultimately the Prime Contractors are held to meet
    the goals identified on the project. However, it
    is the responsibility of all subs to work closely
    with the Prime in meeting those goals.
  • What happens if a goal is not met at the time one
    is set
  • What happens if a goal is not met throughout the
    monitoring of the project

7
Goal Setting Protocol
  • Step One Office of Civil Rights (OCR) receives
    required information from District Office and
    Special Provisions Engineer
  • Project Breakdown
  • Scopes of Work
  • Cost Estimate
  • Advertisement Date
  • Letting Date
  • Anticipated Start
  • Working Days
  • Any Pertinent Project-related Information

8
Goal Setting Protocol (Cont.)
  • Step Two Identifying Scopes of Work DBEs Can
    perform
  • Bituminous (Pavement, Sawing, Mill, Seal Coats,
    etc.)
  • Concrete (Bridge, Pavement, Sawing, etc.)
  • Electrical (Supplies Installation, Signals, etc.)
  • Excavation (Clear Grub, Demolition, Removal of
    Curb Gutter, etc.)
  • Fencing (Ornamental, Wire, Chain, Wood,
    Guardrails, etc.)
  • Landscaping (Mulching, Silt fence, Erosion
    Control, etc.)
  • Pavement Marking (Interim, Removal, Epoxy, etc.)
  • Materials (Aggregate, RipRap, Oil, etc.)
  • Misc. (Utilities, Drainage, Painting
  • Planning (Traffic Control, Signing, Surveying,
    Consulting, etc.)

9
Goal Setting Protocol (Cont.)
  • Step Two (Cont.) Identifying Scopes of Work
    DBEs Can perform
  • Sewer (Installation, RC Pipe, Irrigation, etc,)
  • Rebar/Steel (Installation, Erection, Placement,
    etc.)
  • Trucking (Grading, Hauling, etc.)
  • Walls (Noise, Retaining, etc.)
  • Other (Any other scopes that may be a part of
    THIS project)

10
Goal Setting Protocol (Cont.)
  • Step Three Arriving at an Overall DBE Project
    Goal
  • How is it done?
  • What is the Purpose?
  • Step Four Exclusion of Scopes of Work
  • Why?
  • What are the key factors to consider when
    excluding work
  • Step Five Establishing a final Project Goal

11
Goal Setting Protocol (Cont.)
  • Step Six Final Approval and Signature from OCR
    Director
  • Step Seven DBE Project Goal is sent to MnDOT
    Special Provisions Engineer
  • Step Eight Project is advertised according
    relevant schedule and appropriate Letting

12
Goal Setting Protocol (Cont.)Questions?
13
Contract Clearance
  • Meet The Established Goal On The Project!!!!!
  • Meet the DBE goal on a project or demonstrate
    Good Faith Efforts.
  • The bidder must show that it took all necessary
    and reasonable steps to achieve a DBE goal or
    other requirements of 49 C.F.R. Part 26 which, by
    their scope, intensity, and appropriateness to
    the objective, could reasonably be expected to
    obtain sufficient DBE participation. (49 C.F.R.
    26.53)

14
Contract Clearance (Cont.)
  • Goal Is Met
  • Commercial Useful Function (CUF)
  • DBE firms must perform at least 30 of
    subcontract
  •  26.55   
  • (1) A DBE performs a commercially useful function
    when it is responsible for execution of the work
    of the contract and is carrying out its
    responsibilities by actually performing,
    managing, and supervising the work involved. To
    perform a commercially useful function, the DBE
    must also be responsible, with respect to
    materials and supplies used on the contract, for
    negotiating price, determining quality and
    quantity, ordering the material, and installing
    (where applicable) and paying for the material
    itself. To determine whether a DBE is performing
    a commercially useful function, you must evaluate
    the amount of work subcontracted, industry
    practices, whether the amount the firm is to be
    paid under the contract is commensurate with the
    work it is actually performing and the DBE credit
    claimed for its performance of the work, and
    other relevant factors.
  • (2) A DBE does not perform a commercially useful
    function if its role is limited to that of an
    extra participant in a transaction, contract, or
    project through which funds are passed in order
    to obtain the appearance of DBE participation. In
    determining whether a DBE is such an extra
    participant, you must examine similar
    transactions, particularly those in which DBEs do
    not participate.
  • (3) If a DBE does not perform or exercise
    responsibility for at least 30 percent of the
    total cost of its contract with its own work
    force, or the DBE subcontracts a greater portion
    of the work of a contract than would be expected
    on the basis of normal industry practice for the
    type of work involved, you must presume that it
    is not performing a commercially useful function.

15
Contract Clearance (Cont.)
  • Bottom Line MnDOT OCR must determine the value
    of the work actually performed by the DBE(s) with
    their own equipment and forces in order to apply
    it towards the DBE Goal.
  • Forms (Assist OCR in the determination)
  • Exhibit As
  • Bidders List
  • Advertisements and Quotes

16
Counting DBE Credit/Trucking (Cont.)
  •  26.55   How is DBE participation counted toward
    goals?
  • (a) When a DBE participates in a contract, you
    count only the value of the work actually
    performed by the DBE toward DBE goals.
  • (1) Count the entire amount of that portion of a
    construction contract (or other contract not
    covered by paragraph (a)(2) of this section) that
    is performed by the DBE's own forces. Include the
    cost of supplies and materials obtained by the
    DBE for the work of the contract, including
    supplies purchased or equipment leased by the DBE
    (except supplies and equipment the DBE
    subcontractor purchases or leases from the prime
    contractor or its affiliate).
  • (2) Count the entire amount of fees or
    commissions charged by a DBE firm for providing a
    bona fide service, such as professional,
    technical, consultant, or managerial services, or
    for providing bonds or insurance specifically
    required for the performance of a DOT-assisted
    contract, toward DBE goals, provided you
    determine the fee to be reasonable and not
    excessive as compared with fees customarily
    allowed for similar services.
  • (3) When a DBE subcontracts part of the work of
    its contract to another firm, the value of the
    subcontracted work may be counted toward DBE
    goals only if the DBE's subcontractor is itself a
    DBE. Work that a DBE subcontracts to a non-DBE
    firm does not count toward DBE goals.
  • (b) When a DBE performs as a participant in a
    joint venture, count a portion of the total
    dollar value of the contract equal to the
    distinct, clearly defined portion of the work of
    the contract that the DBE performs with its own
    forces toward DBE goals.

17
Counting DBE Credit/Trucking (Cont.) 26.55
  • d) Use the following factors in determining
    whether a DBE trucking company is performing a
    commercially useful function
  • (1) The DBE must be responsible for the
    management and supervision of the entire trucking
    operation for which it is responsible on a
    particular contract, and there cannot be a
    contrived arrangement for the purpose of meeting
    DBE goals.
  • (2) The DBE must itself own and operate at least
    one fully licensed, insured, and operational
    truck used on the contract.
  • (3) The DBE receives credit for the total value
    of the transportation services it provides on the
    contract using trucks it owns, insures, and
    operates using drivers it employs.
  • (4) The DBE may lease trucks from another DBE
    firm, including an owner-operator who is
    certified as a DBE. The DBE who leases trucks
    from another DBE receives credit for the total
    value of the transportation services the lessee
    DBE provides on the contract.
  • (5) The DBE may also lease trucks from a non-DBE
    firm, including from an owner-operator. The DBE
    who leases trucks from a non-DBE is entitled to
    credit for the total value of transportation
    services provided by non-DBE lessees not to
    exceed the value of transportation services
    provided by DBE-owned trucks on the contract.
    Additional participation by non-DBE lessees
    receives credit only for the fee or commission it
    receives as a result of the lease arrangement. If
    a recipient chooses this approach, it must obtain
    written consent from the appropriate Department
    Operating Administration.
  • Example to this paragraph (d)(5) DBE Firm X uses
    two of its own trucks on a contract. It leases
    two trucks from DBE Firm Y and six trucks from
    non-DBE Firm Z. DBE credit would be awarded for
    the total value of transportation services
    provided by Firm X and Firm Y, and may also be
    awarded for the total value of transportation
    services provided by four of the six trucks
    provided by Firm Z. In all, full credit would be
    allowed for the participation of eight trucks.
    With respect to the other two trucks provided by
    Firm Z, DBE credit could be awarded only for the
    fees or commissions pertaining to those trucks
    Firm X receives as a result of the lease with
    Firm Z.

18
Counting DBE Credit/Trucking (Cont.)
  • (e) Count expenditures with DBEs for materials or
    supplies toward DBE goals as provided in the
    following
  • (1)(i) If the materials or supplies are obtained
    from a DBE manufacturer, count 100 percent of the
    cost of the materials or supplies toward DBE
    goals.
  • (ii) For purposes of this paragraph (e)(1), a
    manufacturer is a firm that operates or maintains
    a factory or establishment that produces, on the
    premises, the materials, supplies, articles, or
    equipment required under the contract and of the
    general character described by the
    specifications.
  • (2)(i) If the materials or supplies are purchased
    from a DBE regular dealer, count 60 percent of
    the cost of the materials or supplies toward DBE
    goals.
  • (ii) For purposes of this section, a regular
    dealer is a firm that owns, operates, or
    maintains a store, warehouse, or other
    establishment in which the materials, supplies,
    articles or equipment of the general character
    described by the specifications and required
    under the contract are bought, kept in stock, and
    regularly sold or leased to the public in the
    usual course of business.
  • (A) To be a regular dealer, the firm must be an
    established, regular business that engages, as
    its principal business and under its own name, in
    the purchase and sale or lease of the products in
    question.
  • (B) A person may be a regular dealer in such bulk
    items as petroleum products, steel, cement,
    gravel, stone, or asphalt without owning,
    operating, or maintaining a place of business as
    provided in this paragraph (e)(2)(ii) if the
    person both owns and operates distribution
    equipment for the products. Any supplementing of
    regular dealers' own distribution equipment shall
    be by a long-term lease agreement and not on an
    ad hoc or contract-by-contract basis.
  • (C) Packagers, brokers, manufacturers'
    representatives, or other persons who arrange or
    expedite transactions are not regular dealers
    within the meaning of this paragraph (e)(2).
  • (3) With respect to materials or supplies
    purchased from a DBE which is neither a
    manufacturer nor a regular dealer, count the
    entire amount of fees or commissions charged for
    assistance in the procurement of the materials
    and supplies, or fees or transportation charges
    for the delivery of materials or supplies
    required on a job site, toward DBE goals,
    provided you determine the fees to be reasonable
    and not excessive as compared with fees
    customarily allowed for similar services. Do not
    count any portion of the cost of the materials
    and supplies themselves toward DBE goals,
    however.

19
Counting DBE Credit/Trucking (Cont.)
  • Mentor Protégé Arrangement(s)
  • May be used to fulfill part or all of the DBE
    goal
  • Formal Arrangement(s)/Agreement(s)
  • Prior Approval from MnDOT Office of Civil Rights
  • Includes both DBE Protégé and Mentor
  •  26.55   
  • (b) When a DBE performs as a participant in a
    joint venture, count a portion of the total
    dollar value of the contract equal to the
    distinct, clearly defined portion of the work of
    the contract that the DBE performs with its own
    forces toward DBE goals.

20
Contract ClearanceIf everything adds up The
Project is cleared for Award and gets built -
On Time - On Budget
21
Discussion/Questions?
22
Submitting A Responsible Bid/Good Faith Effort
(GFE)
23
Good Faith Efforts - Forms
  • Narrative
  • a letter explaining in detail the efforts the ALB
    made to meet the DBE goal
  • Exhibit A
  • Certificate of Good Faith Efforts Consolidated
    Form
  • Bidders List
  • Good Faith Efforts Affidavit
  • GFE Materials must be submitted within five (5)
    business days after notification of being the
    Apparent Low Bidder (ALB)

24
Submitting A Responsible Bid/GFE (Cont.)
  • MnDOT Office of Civil Rights Evaluation 5 Key
    Factors
  • Solicitation
  • Negotiation
  • Assistance (Materials, Supplies, Plans, Bonding,
    etc.)
  • Breaking out Portions of Work Being
    Self-performed
  • De-bundling

25
Reconsideration Process
26
Post Award DBE Monitoring
27
Post Award
  • On-Site Reviews
  • Monitoring DBE Field Work- Exhibit A.
  • Competed/executed by DBE Principal
  • DBE resources Capacity (i.e, people, equipment,
    etc.)
  • DBE subcontractors- Controlling own work, using
    own resources doing the work
  • Consistent with Exhibit A
  • Replacement of DBEs
  • Contractor Payment Form
  • Complete, Consistent, Accurate
  • Final Payment Affidavit
  • Standard Specifications for Construction, Section
    1908
  • A Contractor must submit a Final Payment
    Affidavit showing amounts paid to a DBE before
    final payment can be made on a project.
  • Affidavit must be approved by OCR before final
    payment.
  • Affidavit sent to Project Engineer the Office
    of Civil Rights.

28
Contractor Payment Form
29
DBE Total Payment Form
30
DBE Commitments vs. PaymentsWhat Does This Mean?
31
Dont Forget
  • Your Responsibilities
  • Fulfill DBE Commitment
  • Prompt Payment
  • DBE Replacement
  • Award of Contract (After receiving clearance
    letter)
  • Exhibit A submittal.
  • Trucking Guidelines
  • EEO Office Responsibilities
  • Good Faith Affidavit
  • Certificate of Good Faith Efforts
  • Bidders List
  • Contractor Payments
  • Contract Clearance (timely mannered, 3-5 days)

32
MnDOT Office of Civil Rights
  • Small Business Contracting Section, Supervisor
  • Ashanti Payne ashanti.payne_at_state.mn.us
    651-366-3071
  • DBE Specialists
  • Andrea Robinson (East Metro) andrea.robinson_at_stat
    e.mn.us 651-366-3353
  • Cole Busch (MnDOT Districts 1,2,3,4) cole.busch_at_st
    ate.mn.us 651-366-3332
  • Sheila Scott (MnDOT Districts 6,7,8) sheila.scott
    _at_state.mn.us 651-366-3323
  • Terrina White-Vasser (West Metro)
    terrina.white-vasser_at_state.mn.us 651-366-3074
  • Targeted Group Business (TGB) and Veterans
    Programs
  • Michael Johnson (Team Lead) michael.allan.johns
    on_at_state.mn.us 651-366-3329
  • Joyce Brown-Griffin (TGB Specialist)
    joyce.brown-griffin_at_state.mn.us 651-366-3350
  • Michelle Reynolds (Veterans Specialist) michelle.r
    eynolds_at_state.mn.us 651-366-3335
  • DBE Administration Contact
  • Diane Clark diane.clark_at_state.mn.us 651-366-429
    0
  • Heidi Audette heidi.audette_at_state.mn.us 651-366
    -3328
  • http//www.dot.state.mn.us/civilrights/index.html

33
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