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Transportation TRB 89 th Annual Meeting Session 294 Issues That Will Shape DBE Programs in the Future Public-Private Partnerships: Lessons from the Virginia.

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Presentation on theme: "Transportation TRB 89 th Annual Meeting Session 294 Issues That Will Shape DBE Programs in the Future Public-Private Partnerships: Lessons from the Virginia."— Presentation transcript:

1 Transportation TRB 89 th Annual Meeting Session 294 Issues That Will Shape DBE Programs in the Future Public-Private Partnerships: Lessons from the Virginia DOT Experience Shay Hope Assistant Division Administrator Civil Rights Division Leslie Martin Northern Virginia District Civil Rights Manager Civil Rights Division

2 2 Public Private Partnership (PPP) Public-private partnerships are defined by the US DOT as follows: –A contractual agreement formed between public and private sector partners. –The agreement usually involves a government agency contracting with a private company to renovate, construct, operate, maintain, and/or manage a facility or system. –While the public sector usually retains ownership in the facility or system, the private party will be given additional decision rights in determining how the project or task will be completed.

3 3 VDOT PPP Projects At-a-Glance VDOT is establishing itself as a national leader in Public Private Partnerships PPTA Projects Two (2) Active Proposals –Downtown Tunnel/Midtown Tunnel/MLK Extension – Portsmouth, VA – $1.4M –US Route 460 Corridor Improvements – Petersburg/Suffolk – $1.6M Five (5) Active PPP Projects –Route 28 – Northern Virginia - $326M –I-95/395 HOT Lanes Proposals – Northern Virginia/Fredericksburg - $913M –Capital Beltway I-495 HOT Lanes – Northern Virginia - $1.4B –Coalfields Expressway – Southwestern Virginia - $2.6M –Route 58, Hillsville to Stuart – Phase 2 - $ 83 M Four (4) Completed Projects –Route 288 - $237 M –Pocahontas Parkway - $346 M –Jamestown 2007 (Route 199) - $32 M –Route 58, Meadows of Dan – Phase 1 - $20M

4 4 PPP DBE Goals Project DBE Goals Capital Beltway I-495 HOT Lanes Estimated Cost: $1.4B DBE Goal:15% DBE Goal Amount: $210M I-95/395 HOT Lanes Estimated Cost: $ 1.0B DBE Goal: 15% Proposed DBE Goal Amount: $150M

5 5 DBE Goals A Challenge in Partnering Establishing the DBE Goal –Private Sector contractor already has a DBE goal percent in mind. –DBE community has a DBE goal percent in mind. –VDOT establishes goals through FHWA approved project goal setting methodology. VDOT Consensus on DBE Goal VDOT Commitment to Goal –Governor Kaine –Secretary of Transportation, Pierce Homer –VDOT Commissioner, David Ekern –Private Sector Contractor and VDOT agree on DBE Goal

6 6 DBE Goal Negotiation Pros and Cons Private Sector Favors Large Subcontracting Contracts Reluctance to debundle large work item packages DBE Program drives cost of project delivery up Prime contractors may have to reach out to business entities which they do not have a prior or on-going relationship VDOT Encourages the debundling of contracts to allow for more DBE participation Large work item packages presents a barrier for many DBEs with limited capacity Encourages Teaming/Partnering on large work item packages Encourage DBEs to maximize outreach and networking opportunties

7 7 Challenges Big Projects – Small DBE Contractors Barriers Lack of Working Capital Lack of Experience Stereotyped perception that DBE program is a burden or liability Readiness of DBEs to pursue large contracting opportunities Senior Management Support

8 8 CAPITAL BELTWAY HOT LANES Transit and HOV Service to Virginia’s Busiest Highway $1.4 Billion Private, Federal and State Funding Construction Partnership “The Capital Beltway HOT Lanes Project demonstrates what can be achieved when the government and the private sector work in partnership to deliver much-needed improvements to the transportation network. PPTA balances the public needs with the private sector’s ability to deliver high quality construction and operations. The private sector is accepting significant risk to demonstrate that these partnerships do have a role in moving the U.S. transportation system into the future. The Commonwealth does not have the funding or debt capacity to finance a project of this magnitude given its other unmet transportation needs.”

9 9

10 10 Participation of DBEs What level of commitment has been made by the proposer to use DBEs in developing and implementing the project? –How does the proposer address meeting the established DBE goal? –Has the DBE Liaison Officer been identified? Level of authority? Scope of responsibilities? –Have plans been made to utilize DBEs in both design and construction phases?

11 11 The PPP DBE Challenge What makes the DBE Program different in a PPP? Negotiated agreement If Design- Build, no fully documented DBE plan upfront Usual tools to ensure compliance may not be available –Withholding monthly estimates –Losing other bidding opportunities of little or no consequence Partnership to meet the goal

12 12 DBE Program Plan Fail to Plan, Plan to Fail PURPOSE AND OBJECTIVES Documented Intent and Planned Actions to Meet the Goal Statement of General Contractor Commitment Statements of Corporate Commitment Definitions, Acronyms and References Key Personnel – Roles and Responsibilities Statement of DBE Goal The Goal to be Achieved The Strategies to be Employed Timelines Plan Revisions Submittals/Reviews/Approvals Good Faith Effort Reviews

13 13 DBE Program Plan Counting Participation toward the goal Preconstruction –Approval of DBE Firm by VDOT –Participation Credit Sub-consultants –Design –Survey –Quality Control (Inspection) Regular Dealers Subcontractors Manufacturers Haulers Ancillary Services During Construction –Commercially Useful Function Post Construction –Goal Achievement

14 14 DBE Plan Plan to meet DBE goal during the work period –DBE Partners prior to Financial Close –Plan to attain DBE Goal during Work Period Timely notification of opportunities through Outreach Adjust procurement packages so that a larger number of firms may participate –Professional Services –Construction Subcontracts –Material Purchase Orders –Good Faith Efforts

15 15 DBE Outreach Solutions Meet with anyone, anywhere, anytime Early and continuous communication Develop outreach plans Disseminate information about project and bring issues back for consideration for plan and project developments efforts Identify potential DBE contract opportunities Create numerous outreach meetings to maximize DBE interest Provide training and tools to submit successful bids and perform on the job Use of mandatory pre-bid meetings Initiate discussions with individual DBEs Identify potential DBE packages How to bid training workshops Conduct targeted personal marketing campaign to align supply DBE capacity with demand of contracting opportunities Presentations at contractor meetings Determine capacity of DBEs Provide technical assistance early to DBEs – estimating, bidding, record keeping, project tracking Database of prequalified DBEs DBE certification Pre-bid technical assistance

16 16 DBE Program Plan Addressing Barriers to DBE Participation Use of Unit Price Contracts vs. Lump Sum Contracts Bonding & Insurance Requirements Assistance Business Management Assistance Capacity Building Assistance –Size of Bid Packages –Sequence of Construction –Adequate notice for partnering and/or financing growth DBE Cash-Flow –Written Agreements –Standardized Invoicing Template –Prompt Payment – Quick Resolution of Payment Issues

17 17 Outreach Scope of Work Packages Bid Package –Package Description –Key Dates –Type of Contract (Unit Price/Lump Sum) –Bid Item Work Description –Location of Work –Planned schedule/sequence of work –Approximate quantity per item –Estimated value of work/supply –Amount attributed to DBE/SWaM vendors in SOW Package –Special Jobsite Conditions –Standard Terms –Other Notes

18 18 Potential Contract Opportunities Design Survey Geotechnical Traffic Studies Inspection Clearing and Grubbing Water, Sewer and Utility Lines Retaining Walls, Noise Barriers and Landscaping Signage and Lighting Fencing Earthwork and Drainage Highway Construction, Paving and Striping Traffic Control Highway Bridge Construction Demolition, Hauling and Disposal Services Mechanical Contracting Curb and Sidewalk Construction related support and more

19 19 Potential Supportive Service Opportunities Reprographics Office Supply Cleaning & Janitorial Service Administrative Staffing Services Lunch Wagon Catering Service (office meetings) IT Software & Support Service Courier Service Copier Service Marketing & Communications Services Security Local Community Opportunities Day care discounts Dog walking Flower discounts Hotel/motel discounts

20 20 VDOT’s DBE Outreach Program The DBE Program is managed in part by the General Engineering Consultant (GEC) for the Mega Projects through the Civil Rights Program Office. The office is supported by: A Civil Rights Council consisting of representatives from VDOT and the FHWA to ensure uniform procedures for administration of the Projects DBE programs. A Community Resource Board (CRB) which consists of individual representing organizations and associations throughout Northern Virginia to serve as liaisons to the communities regarding business and employment opportunities.

21 21 VDOT’s DBE Outreach Bid Opportunities –Assist the General Contractor and any Subcontractors with seeking DBEs or potential DBEs capable of performing the work –Serve as liaison to communicate concerns, issues, and contract terms of bid packages –Advertise opportunities via website and organizations –Cross state lines to find capable DBE firms –Provide pre-bid session on behalf of contractor Work Shops –Bonding –Capacity Building Designated DBE Outreach Coordinators –Seek potential DBE firms for future opportunities –Assist with the certification process and other VDOT requirements

22 22 DBE Business Questionnaire Do The Homework Name and Contact Information of DBE DBE Certification # Identify type of work DBE can perform Bonding Capacity –Single Job Bonding Limit Average Annual Dollars –Volume of Firm Bidding Interest –Subcontractor –Supplies Service Provider

23 23 Lessons Learned Preparing and Identifying DBEs to do business –Company Profiles/Documented Experience –Prices –Mobilization –Safety Rating –Partnering with other DBE Firms –VDOT approved Suppliers –VDOT Prequalified –Transfer of Warranty –Workmanship Guarantee –Incentive –Personnel and Equipment New Bids –Pre-Bid Meetings –Questions and Answers –Assumptions, Constraints, Concessions of Bid –De-Briefings

24 24 Lessons Learned Teaming –Time Constraints Get past egos Determine leadership role and associated cost Business license/tax impact; DBE certification impact Business & Logistics Considerations –Higher pricing (Labor rates, equipment rentals, fuel) –Impact of congestion (time and fuel) –Impact of possible housing costs, equipment and material storage Pricing –Lack of completed plans –Lack of planned schedule –Number of crews/amount of equipment needed at one time –Lack of fuel/steel adjustment clauses –Unanticipated schedule delays –Invoice schedule

25 25 Supportive Services Outreach Events for the DBE Community at Large During negotiation, conduct a Meet and Greet event Prepare the DBE community to start thinking differently BOWD Center Sponsored Workshops –Partnering For Success Contract Management and Pitfalls DBE Teaming, Building Capability and Capacity Getting the Job Done (Prime Contractor’s Prospective

26 26 Best Practices for DBE Success Provide Supportive Services to DBEs –Bonding Requirements –Skills to Perform Work –Proper paperwork –Communication and interaction with Prime Contractor –Contract Proposal –Work most suitable to DBE firm’s capabilities –Pre-proposal conferences and workshops –Certification Agreements between States –Good Reputation and outstanding work performance –Technical and business assistance to help DBEs build capacity to deliver work Understand Contract Proposal – seek legal assistance Bid on work most suitable to company’s capabilities to maximize profit and minimize time and additional expense Attend Pre-proposal meetings and DBE Workshops

27 27 “Outside of traffic, there is nothing that has held this country back as much as committees.” Will Rogers


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