ERM #8: Disadvantaged Business Enterprise

Management of the DBE Program

1.Based on responses to the baseline review, how does the grantee demonstrate that the personnel and departments identified as being integral to the implementation of its DBE plan actually perform those roles?

Grantee Response:

Reviewer Comments:

2.If the grantee is a city, county, or state, how does the DBE Liaison Officer (DBELO) interface with staff from applicable offices regarding the DBE program, DBE complaints, and/or DBE bid protests?

Grantee Response:

Reviewer Comments:

3.If grantee is a state DOT, how does the DBELO interface with its subrecipients?

Grantee Response:

Reviewer Comments:

DETERMINATION

Analysis of the information and deficiencies from the baseline review and ERM may indicate that the grantee does not have adequate resources to implement the DBE program. A staffing problem or coordination problems among responsible offices could lead to a finding of deficiency. Consult with the RCRO prior to making this deficiency. (DEFICIENCY CODE 303: Inadequate staff to administer DBE program)

Deficient Not Deficient

Project Specific Goals

4.Has the grantee established a DBE project-specific goal for any FTA-funded project? If so, when did FTA review and concur with the project-specific goal?

Grantee Response:

Reviewer Comments:

5.How does the grantee submit its semi-annual Uniform Reports on these projects?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it has established a project-specific goal, but did not receive FTA’s prior concurrence (Deficiency Code 784: DBE project-specific goal not approved)

The grantee is deficient if it has not submitted Uniform Reports semi-annually for a project-specific goal, has not submitted them timely, or is not using the electronic module in FTA EAMS (DEFICIENCY CODE 786: DBE uniform reports for project-specific goals not submitted semi-annually)

The grantee is deficient if its Uniform Reports for a project-specific goal do not include the applicable FTA-funded contracting activity undertaken or if achievements on project covered by a project-specific goal have been included in the grantee’s overall reports. (DEFICIENCY CODE 787: DBE project level uniform reports do not include required information)

Certification

6.What certifying authorities make up the grantee’s state’s UCP? How is certification responsibility divided among the UCP certifying members?

DBE Certification File
Check List / 1 / 2 / 3 / 4 / Evaluation/Comments
DBE Listed in UCP Directory [26.31]
(Print UCP Screen)
You must maintain and make available to interested persons a directory identifying all firms eligible to participate as DBEs in your program. In the listing for each firm:
a)you must include its address, phone number, and the types of work the firm has been certified to perform as a DBE.
b) you must list each type of work for which a firm is eligible to be certified by using the most specific NAICS code available to describe each type of work.

Grantee Response:

Reviewer Comments:

7.How often does the UCP convene as a group to discuss certification processes, changes to procedures or issues?

Grantee Response:

Reviewer Comments:

8.What is the UCP’s process to remove a firm from the directory? Are non-certifying authorities contacted?

Grantee Response:

Reviewer Comments:

9.Does the grantee ensure that it or another representative of the UCP reviews the US DOT Departmental Office of Civil Rights (DOCR) DBE Appeals and Denials website to determine whether any firm that is applying for certification or that has already been certified by their UCP has been denied?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it does not check the DOCR website monthly. (DEFICIENCY CODE 785: DOCR website not checked for denials)

Deficient Not Deficient

Overconcentration

10.How and how often does the grantee perform analyses to determine if overconcentration exists?

Grantee Response:

Reviewer Comments:

11.What steps are implemented to mitigate overconcentration?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it has identified overconcentration, but has not taken steps to mitigate it. The grantee is deficient if it has not taken any steps to analyze DBE achievements in order to conduct an overconcentration analysis. (DEFICIENCY CODE 562: Overconcentration analysis incomplete)

Deficient Not Deficient

Goal Setting and Reporting

12.If the grantee did not meet its overall goal in fiscal years 2013, 2014, or 2015, How were corrective steps detailed in its shortfall analysis implemented?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it completed a shortfall analysis, but the corrective steps have not been implemented. (DEFICIENCY CODE 563:Shortfall analysis or corrective steps inadequate)

Deficient Not Deficient

13.What is the source of the information included on the Uniform Report of DBE Awards or Commitments? Does the report contain the appropriate information?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if the Uniform report does not include the required information in accordance to Appendix B to 49 CFR Part 26 – Uniform Report of DBE Awards or Commitments and Payments Form (DEFICIENCY CODE 329: DBE uniform reports do not include required information)

Deficient Not Deficient

Race-neutral Measures

14.What are the specific race-neutral measures used to help meet the overall goal?

Grantee Response:

Reviewer Comments:

15.How often does the grantee access the effectiveness of its race-neutral measures?

Grantee Response:

Reviewer Comments:

16.What efforts has the grantee taken to improve its race-neutral measures?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it is not meeting the race-neutral portion of its overall goal and cannot provide documentation of implementing or assessing the measures it described in its goal submission or DBE program plan. (DEFICIENCY CODE 656: Inadequate implementation of race-neutral measures)

Deficient Not Deficient

Good Faith Efforts

17.Does the grantee issue its final good faith efforts determination before the contract isawarded?

Grantee Response:

Reviewer Comments:

18.Is the administrative reconsideration official involved in the process of initially determining whether contract goals are met? How is the administrative reconsideration process implemented?

Grantee Response:

Reviewer Comments:

19.Since the last Comprehensive Review, has the grantee had to implement its administrative reconsideration process?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it awarded or did not award a contract which had a DBE goal without considering good faith efforts. The grantee is deficient if it awarded a contract before determining the sufficiency of a bidder’s good faith efforts. The grantee is deficient if it did not offer an opportunity for reconsideration in its solicitation or for a requesting firm bidding on a contract with a DBE goal. (DEFICIENCY CODE 565: Inadequate good faith effort consideration)

Deficient Not Deficient

Required Contract Provisions

20.How are DBE nondiscrimination requirements included in prime contracts and in the subcontracts each prime contractor signs? A sample of contracts and subcontracts will be reviewed to determine if they include DBE requirements.

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it has not included the nondiscrimination assurance clause (verbatim) in its program plan, prime contracts and/or required the prime to include in their subcontracts. (DEFICIENCY CODE 566: Inadequate incorporation of DBE nondiscrimination assurance clause)

Deficient Not Deficient

Record Keeping, Monitoring and Enforcement

21.If the DBE department outsources monitoring activities, how and when is the DBE department notified of irregularities on ongoing projects?

Grantee Response:

Reviewer Comments:

22.How does the grantee ensure the timely payment of DBEs on projects?

Grantee Response:

Reviewer Comments:

23.How and how often do prime contractors submit DBE participation reports? Who is responsible for reviewing and approving the participation reports?

Grantee Response:

Reviewer Comments:

24.How does the grantee assess successful completion of work for release of retentions, if retention is withheld?

Grantee Response:

Reviewer Comments:

DETERMINATION

The grantee is deficient if it has no process to verify that projects are being monitored or that subcontractors are promptly paid for performance and/or completion of work. The grantee is deficient if it has no proactive monitoring mechanism for prompt payment and solely relies on the subcontractor to notify them of problems with the promptness of payment from prime contractors. (DEFICIENCY CODE 162: Grantee does not monitor DBE compliance)(DEFICIENCY CODE 268: Grantee not ensuring prompt payment)

Deficient Not Deficient

TRIGGERS

Record the triggers identified as a result of the analysis conducted.

Triggers / Y/N / Triggers / Y/N
The prior ComprehensiveReview had deficiencies in the DBE area / The grantee’s semi-annual reports have been late or the FTA Regional Civil Rights Officer (RCRO) has identified issues with submissions
A DBE Compliance Review, Unified Certification Program (UCP) Review, or Procurement System Review (PSR) identified weaknesses or has open deficiencies related to DBE / The grantee is a certifying entity in its state’s UCP and certification issues have been identified
The grantee has entered into a DBE conciliation agreement with FTA / The grantee does not demonstrate it has adequate expertise or resources to implement the program
There are recent or active DBE fraud investigations, lawsuits, or settlement activities with the grantee’s FTA-funded projects / The grantee’s goal achievement for the past three completed fiscal years did not meet the applicable overall annual goal.
DBE issues have been identified in FTA’s grantee Oversight Assessment Tool (OAT) / The grantee did not achieve its overall goal for FY 2015 (and/or FY 2016 if completed) and did not complete a shortfall analysis
There are complaints or protests in this area against the grantee / The grantee is one of the top 50 grantees, did not achieve its overall goal for FY 2015 (and/or FY 2016 if completed) and the shortfall analysis was not submitted, was submitted late, or was incomplete
The grantee does not have a DBE program on file with FTA and the amount of FTA funding indicates that the grantee meets the threshold for a DBE program / The grantee is one of the top 50 grantees, and has received an FTA Shortfall Corrective Action letter for the most recently completed fiscal year
The grantee’s submission of its three-year goals was late or incomplete

Exhibit 1

DBE Review- Certification File Required Elements
Recipient:______Date: ______
File #1: ______File #2: ______
File #3: ______File #4: ______
DBE Certification File
Check List / 1 / 2 / 3 / 4 / Evaluation/Comments
  1. DBE Listed in UCP Directory [26.31]
(Print UCP Screen)
You must maintain and make available to interested persons a directory identifying all firms eligible to participate as DBEs in your program. In the listing for each firm:a) you must include its address, phone number, and the types of work the firm has been certified to perform as a DBE.
b) you must list each type of work for which a firm is eligible to be certified by using the most specific NAICS code available to describe each type of work.
  1. NAICS Code Accurate [26.65 & 26.71]
The North American Industrial Classification System (NAICS) replaces the SIC system.
You must apply current SBA business size standard(s) found in 13 CFR part 121 appropriate to the type(s) of work the firm seeks to perform in DOT-assisted contracts.
(n) You must grant certification to a firm only for specific types of work in which the socially and economically disadvantaged owners have the ability to control the firm. To become certified in an additional type of work, the firm need demonstrate to you only that its socially and economically disadvantaged owners are able to control the firm with respect to that type of work.
  1. Onsite Visit Conducted [26.83]
(c)(1) Perform an on-site visit to the offices of the firm. You must interview the principal officers of the firm and review their resume´s and/or work histories. You must also perform an onsite visit to job sites if there are such sites on which the firm is working at the time of the eligibility investigation in your jurisdiction or local area. You may rely upon the site visit report of any other recipient with respect to a firm applying for certification.
  1. Personal Net Worth within Threshold [26.67]
You must require each individual owner of a firm applying to participate as a DBE whose ownership and control are relied upon for DBE certification to certify that he or she has a personal net worth that does not exceed $1.32 million.
  1. Business and Personal Tax Returns Collected [Appendix F]
All applicants must submit personal tax returns for each owner claiming disadvantaged for the past three-years.
All applicants must submit the firm’s tax returns and all related schedules for the past three-years.
  1. Annual No-Change Affidavit Collected [26.83]
(j) If you are a DBE, you must provide to the recipient, every year on the anniversary of the date of your certification, an affidavit sworn to by the firm’s owners before a person who is authorized by state law to administer oaths or an unsworn declaration executed under penalty of perjury of the laws of the United States. This affidavit must affirm that there have been no changes in the firm’s circumstances affecting its ability to meet size, disadvantaged status, ownership, or control requirements of this part or any material changes in the information provided in its application form, except for changes about which you have notified the recipient under paragraph (i) of this section.
  1. Small Business Size [26.65]
(a) To be an eligible DBE, a firm (including its affiliates) must be an existing small business, as defined by Small Business Administration (SBA) standards. You must apply current SBA business size standard(s) found in 13 CFR part 121 appropriate to the type(s) of work the firm seeks to perform in DOT-assisted contracts.
(b) Even if it meets the requirements of paragraph (a) of this section, a firm is not an eligible DBE in any Federal fiscal year if the firm (including its affiliates) has had average annual gross receipts, as defined by SBA regulations (see 13 CFR 121.402), over the firm’s previous three fiscal years, in excess of $22.41 million. The Secretary adjusts this amount for inflation from time to time.
  1. Certification Removal Process Followed [26.87]
(b) Recipient-initiated proceedings. If, based on notification by the firm of a change in its circumstances or other information that comes to your attention, you determine that there is reasonable cause to believe that a currently certified firm is ineligible, you must provide written notice to the firm that you propose to find the firm ineligible, setting forth the reasons for the proposed determination. The statement of reasons for the finding of reasonable cause must specifically reference the evidence in the record on which each reason is based.
(d) Hearing. When you notify a firm that there is reasonable cause to remove its eligibility, as provided in paragraph (a), (b), or (c) of this section, you must give the firm an opportunity for an informal hearing, at which the firm may respond to the reasons for the proposal to remove its eligibility in person and provide information and arguments concerning why it should remain certified.
  1. Initial Denial Process [26.86]
(a) When you deny a request by a firm, which is not currently certified with you, to be certified as a DBE, you must provide the firm a written explanation of the reasons for the denial, specifically referencing the evidence in the record that supports each reason for the denial. All documents and other information on which the denial is based must be made available to the applicant, on request.
(d) When you make an administratively final denial of certification concerning a firm, the firm may appeal the denial to the Department under section 26.89.
  1. Interstate Certification [26.85]
(g) You must implement the requirements of this section beginning January 1, 2012.
  1. Certification Determination [26.83]
(l) As a recipient or UCP, you must advise each applicant within 30 days from your receipt of the application whether the application is complete and suitable for evaluation and, if not, what additional information or action is required.
11a. Certification Determination [26.83]
k) If you are a recipient, you must make decisions on applications for certification within 90 days of receiving from the applicant firm all information required under this part.

Exhibit 2

DBE Review- Contract Required Elements
Recipient: ______Date: ______
Contract #1:______Contract #2: ______
Contract #3: ______Contract #4: ______
Contract File Review
Check List / 1 / 2 / 3 / 4 / Evaluation/Comments
  1. Contract Assurance [26.13]
(b) Each contract you sign with a contractor (and each subcontract the prime contractor signs with a subcontractor) must include the following assurance:
The contractor, sub recipient or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate.
  1. Prompt Payment [26.29]
(a) You must establish, as part of your DBE program, a contract clause to require prime contractors to pay subcontractors for satisfactory performance of their contracts no later than 30 days from receipt of each payment you make to the prime contractor.
  1. Return of Retention [26.29]
(b) You must ensure prompt and full payment of retainage from the prime contractor to the subcontractor within 30 days after the subcontractor’s work is satisfactorily completed.
(c) For purposes of this section, a subcontractor’s work is satisfactorily completed when all the tasks called for in the subcontract have been accomplished and documented as required by the recipient. When a recipient has made an incremental acceptance of a portion of a prime contract, the work of a subcontractor covered by that acceptance is deemed to be satisfactorily completed.
  1. Legal Remedies [26.37]
(a) You must implement appropriate mechanisms to ensure compliance with the part’s requirements by all program participants (e.g., applying legal and contract remedies available under Federal, state and local law). You must set forth these mechanisms in your DBE program.
  1. Transit Vehicle Procurements [26.49]
(a) If you are an FTA recipient, you must require in your DBE program that each transit vehicle manufacturer, as a condition of being authorized to bid or propose on FTA-assisted transit vehicle procurements, certify that it has complied with the requirements of this section.
  1. Termination [26.53]
(f)(1) You must require that a prime contractor not terminate a DBE subcontractor listed in response to paragraph (b)(2) of part 26.53 (or an approved substitute DBE firm) without your prior written consent. This includes, but is not limited to, instances in which a prime contractor seeks to perform work originally designated for a DBE subcontractor with its own forces or those of an affiliate, a non-DBE firm, or with another DBE firm.
  1. Good Faith Efforts [26.53]
(b) In your solicitations for DOT-assisted contracts for which a contract goal has been established, you must require the following:
(1) Award of the contract will be conditioned on meeting the requirements of this section;
(2) All bidders/offerors will be required to submit the following information to the recipient, at the time provided in paragraph (b)(3) of part 26.53:
(i) The names and addresses of DBE firms that will participate in the contract;
(ii) A description of the work that each DBE will perform;
(iii) The dollar amount of the participation of each DBE firm participating;
(iv) Written documentation of the bidder/offeror's commitment to use a DBE subcontractor whose participation it submits to meet a contract goal;
(v) Written confirmation from the DBE that it is participating in the contract as provided in the prime contractor's commitment; and
(vi) If the contract goal is not met, evidence of good faith efforts (see Appendix A of 49 CFR Part 26).
  1. Post Award Monitoring
Your DBE program must also include a monitoring and enforcement mechanism to ensure that work committed to DBEs at contract award is actually performed by DBEs:
  • Documentation of on-site monitoring that DBEs are actually performing the work committed at contract award and are performing a commercially useful function in the NAICS codes that they are certified under [26.37]
  • Documentation of review and approval of information provided by contractor (monthly utilization reports, utilization reports accompanying invoices) to demonstrate utilization of DBEs
  • Documentation that DBEs are monitored to ensure that if they are subcontracting to non-DBEs, that the correct portion is not counted towards the contract goal [26.55]
  • Documentation to ensure prompt payment and return of retention verification [26.29]
  • Documentation of due process and grantee consent for DBE terminations or substitutions [26.53]

Exhibit 3

FTA Funded Contracts and DBE Participation Spreadsheet