1. U.S. DOT’s Disadvantaged Business Enterprise (DBE) Program: The Basics Region VI Webinar Training 1

2. Web Conference Rules Please download the filesPlease download the files Call the Conference Number for the Audio Portion!Call the Conference Number for the Audio Portion! –1-877-873-8017 –Passcode:8204467 File Share Boxes Here 2

3. Web Conferences Rules During the presentation: –All phone lines will be muted! –Enter questions in the Chat Window –Question will be answered in chat window Or relayed to me 3

4. Web Conference Rules Plenty of time to ask questions: –Use the “Raise Hand” button during open question periods –You will be called on to ask your question in the order received. 4

5. 5 Raise hand

6. Web Conference Rules 6

7. Why Are We Here? Update on recent DBE rule changes Assist recipients achieve full compliance with 49 C.F.R. Part 26 7

8. Basic Terms 8 DBE –Small business (as defined by SBA) owned and controlled by a socially and economically disadvantaged individual UCP –State-level entity responsible for certifying eligible firms as DBEs

9. Basic Terms (Cont’d) Race conscious –A measure or program that is focused specifically on assisting only DBEs Includes DBEs owned by women Contract goals Race Neutral –A measure or program that is, or can be, used to assist all small businesses 9

10. DBE Program: 4 Key Elements 10

11. DBE Program Document Who must have a DBE program? FTA recipients receiving planning, capital, or operating assistance who will award prime contracts exceeding $250,000 in FTA funds in a Federal fiscal year −49 C.F.R. Part 26.21(a)(2) 11

12. Key Elements of a DBE Program Document Policy Statement Standard Contract Assurances DBE Liaison Officer Prompt Payment/Retainage Provision(s) Good Faith Efforts Criteria Monitoring Mechanisms Small Business Provision Goal Setting Methodology 12

13. Policy Statement General statement, signed by your organization’s CEO/highest officer, confirming commitment to the DBE program Use the language from your financial assistance agreement! –Also appears in 49 C.F.R. Part 26.13(a) 13

14. Contract Assurance Non-discrimination clause Must be in every contract you sign with a prime contractor, and every contract your prime contractors sign with subcontractors Use exact language from 49 C.F.R. Part 26.13(b) 14

15. DBE Liaison Officer (DBELO) Individual within your organization primarily responsible for properly implementing the DBE program Must have: –Direct, independent access to CEO –Adequate staff and resources to administer the program in compliance with the DBE rule 15

16. Prompt Payment/Retainage Must have clause in prime contracts requiring the prime to pay subcontractors for satisfactorily completed work no later than 30 days from receipt of payment from the recipient Must have a mechanism to monitor/ensure prompt payment occurs 16

17. Good Faith Efforts Criteria Must have process/criteria in place for evaluating bids on solicitations with DBE contract goals –If don’t meet stated goal, did bidder make and document “good faith efforts” to meet the goal? See Appendix A for guidance, additional information 17

18. Monitoring Mechanisms In the past, the DBE rule required that recipients monitor contracts/projects with DBE participation, but without specifying what must be done Now, must perform site visits and certify to FTA (or FHWA, FAA) that the DBEs are performing the work assigned to them 18

19. Small Business Provision New Rule! Recipients must add an element to their DBE programs which fosters small business participation Must submit plan to relevant operating administration by February 12, 2012 19

20. Goal Setting Methodology What must I submit? Letter to FTA stating your overall goal, including the race conscious/race neutral split A copy of the published notice A copy of the methodology and any worksheets used to calculate the goal 20

21. What is a DBE goal? Key Points Should be based on demonstrable evidence of ready, able and willing DBE firms relative to all firms available to perform on your contracts Your overall DBE goal should reflect what you’d expect DBE participation to be absent the effects of discrimination 21

22. Step 1: Base Figure All FirmsFormula DBEs ÷ All Firms = Relative Availability 22

23. Step 1 Considerations Do: Use all current, available data Accurately account for all contracting opportunities Use weighting whenever possible 23

24. Step 1 Considerations Don’t: Use past participation as your base figure Utilize local preference Exclude some contracts/contracting opportunities because you don’t think there will be DBE participation 24

25. Where do I find DBEs? State UCP Directory Provides “one stop shopping” for recipients, prime contractors, DBEs, and the general public 25

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27. UCP Directory Sample Page 27

28. Step 1 Example NAICS 423120 –2 DBEs in La. Using census data, state business directory, and prior bidders lists, you’ve identified 18 non- DBEs in La. under NAICS 423120 28

29. Step 1 Example Formula Base Figure = DBEs ÷ All Firms Remember, All Firms = DBEs + non-DBEs Calculation 2 DBEs ÷ (2 DBEs + 18 non-DBEs) = 10% 29

30. Weighting The process by which you consider DBE availability relative to your anticipated available contracting opportunities May weight goals on either a project-by-project basis, or based on individual contracting opportunities derived from a single project 30

31. Weighting Formula Weighted Base Figure = (Projects % of total budget) x (Relative Availability) 31

32. Weighting Example In addition to your contract for vehicle parts, you are also letting a contract for electrical services –Parts = 75% of total budget –Electric = 25% of total budget Searching the La. UCP directory, you find 26 firms under NAICS 238210 (Electrical Contractors) Using census data, state business directory, and prior bidders lists, you’ve identified 374 non-DBEs in La. under NAICS 238210 32

33. Weighting Example Contract # 1Contract # 2 33 2 DBEs ÷ (2 DBEs + 18 non-DBEs) = 10% 26 DBEs ÷ (26 DBEs + 374 non- DBEs) = 6.5%

34. Weighting Example Un-weightedWeighted 34 (2 + 26 DBEs) ÷ (28 DBEs + 392 non- DBEs) = 6.6%.75 x (2 DBEs ÷ 20 All Firms) +.25 x (26 DBEs ÷ 400 All Firms) = 9.2%

35. Step 2: Adjust Your Base Figure Evidence to Consider Current capacity of DBEs to perform work Disparity studies Input from interested parties –Local chambers of commerce –NAACP –Minority business associations –Contracting associations 35

36. Step 2: Past Participation May use past participation as Step 2 adjustment if contracting opportunities are the same/similar to those in prior years If use, determine median past participation, then average with base figure determined in Step 1 36

37. Past Participation Formula Adjusted DBE Goal = (Step 1 Base Figure + Historic Median) ÷ 2 37

38. Past Participation Example Data Base Figure: 15% Participation: –FFY2008: 7% –FFY2009: 22% –FFY2010: 11% Calculation 15% + 11% = 26% 26% ÷ 2 = 13% Adjusted Goal: 13% 38

39. Race Conscious-Race Neutral Split Using past DBE achievement, determine what amount of overall goal will be met via race neutral means 39

40. RC/RN Formula Race Neutral Projection = Adjusted Base Figure x (Past RN Achievement ÷ Past Total Achievement) 40

41. RC/RN Split Example Using prior example, we know the adjusted goal is 13% Using FFY2010 DBE reporting data, you also know the following: –FFY10 Goal: 10% –Achievement: 12% –Race Conscious: 5% –Race Neutral: 7% 41

42. RC/RN Split Example Calculation 13% x (7 ÷ 12) = 7.6% Final Result Goal: –13% Race Neutral –7.6% Race Conscious –5.4% 42

43. Accountability and Goal Submissions New Rule! If a recipient fails to meet its overall DBE goal, it must analyze the shortfall, develop corrective actions and submit the plan to the relevant operating administration (FTA, FHWA, or FAA) for approval 43

44. Monitoring and Oversight Historically under-enforced area of the DBE program Why important? –Root out fraud—no DBE “fronts”! –Ensure DBEs are getting the opportunity to perform work committed to them 44

45. New Monitoring Requirements New Rule! Recipients must monitor and provide written certification for every contract/project on which DBEs are participating, ensuring the DBE(s) are in fact performing the work 45

46. Monitoring: Removal of DBE Firms New Rule! Prime contractors may not terminate DBE subcontractors from projects without “good cause” and approval from the project sponsor/recipient 46

47. Find Help! On the web: –Federal Transit Administration’s DBE Page www.fta.dot.gov/dbe –Office of Small & Disadvantaged Business Utilization www.osdbu.dot.gov –TEAM Help Desk 888-443-5305 Team.HelpDesk@DOT.GOV Call your Regional Civil Rights Officer! 47

48. Need more information/assistance? Contact: Federal Transit Administration Office of Civil Rights 1200 New Jersey Ave. SE East Building, 5 th Floor Washington, D.C. 20590 Office: (202) 366-4018 48

49. Questions? ¿Las preguntas? Your phones will now be returned to open talk mode. 49