DBE Compliance Made E-Z

This session will address the following: Fostering Small Business Participation Monitoring and Enforcement DBE Goal Methodology Friendly Reminders 2

DBE Program Objectives ensure nondiscrimination create a level playing field narrowly tailored meet the eligibility standards are permitted to participate as DBEs remove barriers assist the development of firms provide appropriate flexibility to recipients 3

Fostering Small Business Participation Main Components – Size standards for determining which small businesses are eligible to participate in your initiatives and methods of verifying business size – Method(s) for facilitating small business competition – Outreach efforts – Implementation Schedule NOTE: The Small Business Element (“SBE”) was due on February 28, 2012

Fostering Small Business Participation What can a small business program include? – Establishing race-neutral set-asides for prime contracts under $1M – For large contracts requiring bidders on the prime contract to specify elements of the contract or specific subcontracts that are of a size that small businesses can reasonably perform – On contracts with no contract goals, have the prime provide subcontracting opportunities of a size that small businesses can perform – Identify alternative acquisition strategies and structuring procurements to facilitate the ability of consortia or joint ventures by small businesses to compete for and perform prime contracts – Unbundle contracts whenever possible!

Monitoring and Enforcement Prompt Payment Contract Provision Prime contractors must pay subcontractors for satisfactory performance on contracts no later than 30 days from receipt of each payment made by the transit agency or TVM to the prime contractor Must also address prompt return of retainage payments from the prime contractor to the subcontractor within 30 days. – Retainage: Funds withheld from contractors until a project has been satisfactorily completed Must conduct on-site monitoring of DBEs to ensure DBEs are performing the work they were contracted to perform. Be careful not to have contractors monitoring on-site performance of contractors! Avoid the appearance of conflict of interest.

DBE Goal Methodology 7

DBE Goal A DBE Goal is the percentage of all FTA assisted projects that a TVM or transit agency anticipates utilizing ready, willing, and able DBEs to provide products or services. 8

Who Must Submit a DBE Goal? You are required to develop an overall DBE goal if you are an FTA recipient who reasonably anticipates awarding (excluding transit vehicle purchases) more then $250,000 in FTA funds towards capital, operating assistance, or planning in prime contracts in a Federal fiscal year. – Goals are submitted triennially on August 1 st If you are a transit vehicle manufacturer, you must establish and submit for FTA's approval an annual overall percentage goal. You should be guided, to the extent applicable, by the principles underlying § – Goals are submitted August 1 st of each fiscal year

Goal Setting Methodology Minimum Requirements At a minimum, your goal methodology should include: – Thorough breakdown of projects/components – Your geographic market area(s) – The relative availability of DBEs compared to All Firms – Consultation with advocacy organizations and general business groups and what comments were provided – Proof of goal publication and any comments received – The amount of FTA funds received for the respective reporting period – Race conscious/race neutral breakdown – All sources used in establishing your goal 10

Goal Setting Methodology Made E-Z Detailed List of Contracting Opportunities – Consult with the respective offices within your agency/company (i.e. procurement staff, project management staff, etc.) who have direct access to upcoming contracting opportunities and determine what materials or services will be purchased with FTA funds – Can any of these contract opportunities be unbundled? – Compile a list of these materials and services 11

Goal Setting Methodology Made E-Z 12 * Enter all the FTA-assisted projects below. Project amounts should be assigned relevant NAICS Code(s). Project NAICS Codes Project Description Amount of DOT funds on project:% of total DOT funds (weight) 1) Utopia Central Subway StationInclude all NAICS codes used for this project Brief describe what the project will accomplish (i.e. Constructing parking garage, etc.) 2) 3) 4) 5) 6) 7) 8) 9) 10) Total FTA-Assisted Contract Funds$0.000 Step 2 - Determine the relative availability of DBE's by NAICS Code: * Use DBE Directory, census data and/or a bidders list to enter the number of available DBE firms and the number of available firms. NAICS CodeNAICS Code Description Specific Contracting Opportunity Number of DBEs available to perform this work in WXY market area Number of all firms available (including DBEs) in WXY market area Relative Availability All Other Specialty Trade ContractorsFence installation Combined Totals00 Overall availability of DBEs

Goal Setting Methodology Made E-Z North American Industry Classification System (“NAICS”) – NAICS Codes are the standards used to classify businesses for federal agencies in collecting, analyzing, tabulating and presenting statistical information on the U.S. economy – Visit This website provides a list of all NAICS codes and a brief description of what each encompasses 13

Goal Setting Methodology Made E-Z Things to Consider: – Classify your contracting opportunities according to NAICS Code – List the numerical NAICS Code and the title of each NAICS Code – Choose the NAICS codes that best describes your contracting opportunities – Avoid broad generalized NAICS codes when possible 14

Goal Setting Methodology Made E-Z Determine Your Geographic Market Area – Your geographic market area is the area(s) (i.e. county, city, state(s), region, etc.) where you award a substantial majority of your contracting opportunities. – As illustrated above, a vast majority of this recipient’s products 15

Goal Setting Methodology Made E-Z Locate DBE and non-DBE Firms in your Geographic Market Area – Consult the Unified Certification Program (“UCP”) directories for DBE firms in your geographic market area – Consult your Office of Civil Rights/Diversity Offices and transit agencies’ DBE liaison officer(s) – Consult your bidder’s list to determine DBE and non-DBE firms in your market area – Consult Census Bureau data for non-DBE firms in your geographic market area 16

Goal Setting Methodology Made E-Z Determine Relative Availability – An evaluation/analysis of DBE and non-DBE firms who may be “ready, willing, and able” to provide a product or services to your company or agency – There can be other methods of calculating your goal. You are permitted to use other methods—as long as it is based on demonstrable evidence of local market conditions and designated to ultimately attain a goal that is rationally related to the relative availability of DBE in your market 17

Goal Setting Methodology Made E-Z Calculating the DBE Goal: (USDOT Approved Method) (Number of DBE’s/Total number of all firms)= Base Figure (15 DBEs) \ (185 non-DBE firms + 15 DBEs) = 0.075% x 100= 7.5%

Goal Setting Methodology Made E-Z Performing Step 2 Adjustments – The Step 2 Adjustment is the area where you consider any additional information that may cause your DBE goal to differ from your calculated projections (upwards or downwards). – If you use a vetting process as a means for adjusting your goal to ensure that all DBEs listed are truly “ready, willing, and able” you should also perform a similar vetting process for non-DBEs as well. 19

Goal Setting Methodology Made E-Z Performing Step 2 Adjustments – Goal adjustments are not required, but are recommended to ensure your goal is narrowly tailored Types of Evidence to Consider: Current capacity of DBEs to perform the work Are contracting opportunities similar to past years? Disparity studies (if not used in Step One). Adjustments for your market if your Step One goal is that of another DOT recipient. Statistical data on the ability of DBEs to get financing, bonding, insurance, etc. Input from interested parties (e.g. local chambers of commerce, NAACP, minority business associations, majority contractor associations) 20

Goal Setting Methodology Made E-Z Defining Race Neutral Race/Race Conscious – Race Neutral: Outreach, technical assistance, procurement process modification, or other measures which can be used to increase opportunities for all small businesses, not just DBEs, and do not involve setting specific goals for the use of DBEs on individual contracts. – Race Conscious: Any measure that seeks to assists DBEs only. Presently, contract goals are the only FTA approved race conscious contracting measures. (Must seek FTA approval prior to establishing any other DBE focused initiatives that you would categorize as race conscious measures) See USDOT Question and Answers: What Means Do Recipients use to Meet Overall Goal, 21

Goal Setting Methodology Made E-Z Race Neutral Race/Race Conscious Breakdown – The RC/RN breakdown is where you identify the percentage of your goal that will be attained using race neutral measures and the percentage that will be attained used race conscious measures. – This section of your goal must also include what types of race neutral measures will be used as a part of your Program (e.g. outreach, technical assistance, etc.). – A 100% race neutral DBE Program requires continued use of race neutral measures throughout the entire triennial cycle for transit agencies and fiscal year for TVMs 22

Goal Setting Methodology Made E-Z Required Race Neutral Measure The Small Business Element is an additional race neutral element of your overall DBE Program that exposes DBEs to additional contracting opportunities. It requires that you include an element of your DBE Program that is geared toward small business independent of DBE or non-DBE statuses. Implementing your small business element in good faith is a requirement of implementing your DBE program (i.e. No lip service!) 23

Goal Setting Methodology Made E-Z 24

Goal Setting Methodology Made E-Z Identify Your Sources – Provide the names and locations of the sources used when establishing your goal. Source Title: XYZ Disparity Study; Source Location: Source Title: Utopia UCP Directory Source Location: 25

Friendly Reminders Do not leave template language in Program Plan Most Recipients’ DBE Programs include contract goals, and, must therefore, enforce Good Faith Efforts (“GFEs”) A prime contractor cannot replace DBEs for convenience absent proper due process,when contract goals are used A Recipient or TVM cannot award a contract to a firm that has not met the contract goal nor provided sufficient GFEs showing its efforts to meet the contract goal

Friendly Reminders Consultation: FTA will be hosting its Opening DOORS DBE networking event on September 25, 2012 in Indianapolis, IN – Visit Your Program must specify what race neutral measures will be used to achieve your overall DBE Goal Recipients in the 9 th Circuit must not use race-conscious measures (i.e., contract goals) absent proof of discrimination Be sure to include the specific legal remedies that may be applied against entities that have not complied with your approved DBE Program 27

Notice of Proposed Rule Making (NPRM II) The DBE NPRM II has been released and is available for public comment – Please visit the site below : OST OST

Federal Transit Administration