HomeMy WebLinkAboutR-2010-114 Yakima Transit DBE Program Adoption [Disadvantaged Business Enterprise]RESOLUTION NO R-2010-114
A RESOLUTION authorizing the filing of a resolution amending Resolution No 2000-33 for Yakima
Transit's Disadvantaged Business Enterprise Program and its associated triennial
goal with the Federal Transit Administration, an operating administration of the
United States Department of Transportation, as authorized by 49 C F R. Parts 23
and 26, & United States Code Titles 23, 42, and 49 and directing staff to implement
the program
WHEREAS, in 1983, Congress enacted the Department of Transportation (DOT) requirement
for a Disadvantaged Business Enterprise Program (DBE) The objectives of the program are to
• Ensure nondiscrimination in the award and the administration of DOT -assisted contracts in the
Department's financial assistance programs,
• Create a level playing field on which DBEs can compete fairly for DOT -assisted contracts,
• Ensure that the Department's DBE program is narrowly tailored in accordance with applicable
law;
• Ensure that only firms that fully meet this part's eligibility standards are permitted to participate
as DBEs,
• Help remove barriers to the participation of DBEs in DOT -assisted contracts
• Assist the development of firms that can compete successfully in the marketplace outside the
DBE program, and
• Provide appropriate flexibility to recipients of Federal financial assistance in establishing and
providing opportunities for DBEs, and
WHEREAS, the City of Yakima operates a public transit system for use by the general public
regulated by the Federal Transit Administration (FTA), an agency of the DOT, and is therefore subject
to FTA requirements, and
WHEREAS, in order to be eligible for federal financial assistance, Yakima Transit must update
the DBE goal every three years, and, and
• WHEREAS, Yakima Transit in cooperating with the City of Yakima Purchasing Department held
two public forms during the required 45 -day comment period that ended on October 1, 2010, no
comments were received during the comment period, and
WHEREAS, the City of Yakima Transit Division's amended DBE program meets the FTA
requirements as outlined above
NOW, THEREFORE, BE IT RESOLVE BY THE CITY COUNCIL OF THE CITY OF YAKIMA.
The City of Yakima DBE program for Yakima Transit, attached and incorporated hereto, is hereby
approved and adopted for implementation by the City of Yakima and staff is directed to implement the
Disadvantaged Business Enterprise Program and establish goals associated with the program, as of
the date of this resolution's enactment by the City of Yakima City Council
ADOPTED BY THE CITY COUNCIL at a regular meeting this 5th day of October, 2010
ATTEST
1
Micah CavJley, Mayor
•
CITY OF YAKIMA
DBE PROGRAM
POLICY STATEMENT
Section 26.1, 26.23 Objectives/Policy Statement
The City of Yakima Transit Division, hereinafter referred to as the City has established a Disadvantaged
Business Enterprise (DBE) program in accordance with regulations of the U.S. Department of
Transportation (DOT), 49 CFR Part 26: The City has received Federal financial assistance from the
Department of Transportation, and as a condition of receiving this assistance, the City has signed an
assurance that it will comply with 49 CFR Part 26.
It is the policy of the City to ensure that DBEs are defined in Part 26, have an equal opportunity to receive
and participate in DOT—assisted contracts. It is also our policy:
1. To ensure nondiscrimination in the award and administration of DOT — assisted contracts;
2. To create a level playing field on which DBEs can compete fairly for DOT -assisted contracts;
3. To ensure that the DBE Program is narrowly tailored in accordance with applicable law;
4. To ensure that only firms that fully meet 49 CFR Part 26 eligibility standards are permitted to
participate as DBEs;
5. To help remove barriers to the participation of DBEs in DOT assisted contracts;
6. To assist the development of firms that can compete successfully in the market place outside the
DBE Program.
Sue Ownby, Purchasing Manager, has been delegated as the DBE Liaison Officer. In that capacity, the
Purchasing Manager is responsible for implementing all aspects of the DBE program. Implementation of
the DBE program is accorded the same priority as compliance with all other legal obligations incurred by
the City in its financial assistance agreements with the Department of Transportation.
The City has disseminated this policy statement to the City Council and all of the components of our
organization. We have distributed this statement to DBE and non -DBE business communities that
perform work for us on DOT -assisted contracts. A notice of the existence of this policy will be sent to all
DBE vendors registered in Yakima County. The entire DBE Program and Goal Methodology will also be
made permanently available on the City's Website: www.ci.yakima.wa.us/services/purchasinq.
Richard A. Zais, Jr., City Manager Date
Yakima DBE Program Page 1 of 18
SUBPART A — GENERAL REQUIREMENTS
Section 26.1 Objectives
The objectives are found in the policy statement on the first page of this program.
Section 26.3 Applicability
The City of Yakima Transit, hereinafter referred to as the City, is the recipient of federal transit funds
authorized by Titles I, III, V, and VI of ISTEA, Pub. L. 102-240 or by Federal transit laws in Title 49, U.S.
Code, or Titles I, II, and V of the Teas -21, Pub. L. 105-178.
Section 26.5 Definitions
The City will adopt the definitions contained in 49 CFR § 26.5 for this program.
Section 26.7 Non-discrimination Requirements
The City will never exclude any person from participation in, deny any person the benefits of, or otherwise
discriminate against anyone in connection with the award and performance of any contract covered by 49
CFR Part 26 on the basis of race, color, sex, or national origin.
In administering its DBE program, the City will not, directly or through contractual or other arrangements,
use criteria or methods of administration that have the effect of defeating or substantially impairing
accomplishment of the objectives of the DBE program with respect to individuals of a particular race,
color, sex, or national origin.
Section 26.11 Record Keeping Requirements
Reporting to DOT: 26.11(b)
We will report DBE participation to DOT as follows:
We will report DBE participation on a semi-annual basis, using the Uniform Report of DBE
Commitments/Awards and Payments. These reports will reflect awards/commitments made and
payments actually made to DBEs on DOT -assisted contracts.
Bidders List: 26.11(c)
The City will create a bidders list, consisting of information about all DBE and non -DBE firms that bid or
quote on DOT -assisted contracts. The purpose of this requirement is to allow use of the bidders' list
approach to calculating overall goals. The bidder list will include the name, address, DBE non -DBE
status, age, and annual gross receipts of firms.
We will collect this information in the following ways:
With each formal bid or proposal that is sent out by the City of Yakima Purchasing Division, a
Personnel Form (see Attachment 7) will be enclosed and required to be retumed with the
bid/proposal documents. The Personnel Inventory Forms will be assembled into a binder, enabling
the calculation for overall goals.
Yakima DBE Program Page 2 of 18
Purchasing Staff will form vendors' lists for our geographical area utilizing www.omwbe.wa.qov to
seek out and capture available DBE Vendors available to bid on projects.
Section 26.13 Federal Financial Assistance Agreement
The City has signed the following assurances, applicable to all DOT -assisted contracts and their
administration:
Assurance: 26.13(a)
The City of Yakima shall not discriminate on the basis of race, color, national origin, or sex in the
award and performance of any DOT assisted contract or in the administration of its DBE Program
or the requirements of 49 CFR Part 26. The recipientshall take all necessary and reasonable
steps under 49 CFR Part 26 to ensure nondiscrimination in the award and administration of DOT
assisted contracts. The recipient's DBE Program, as required by 49 CFR Part 26 and as
approved by DOT, is incorporated by reference in this agreement. Implementation of this
program is a legal obligation and failure to carry out its terms shall be treated as a violation of this
agreement. Upon notification to the City of its failure to carry out its approved program, the
Department may impose sanction as provided for under Part 26 and may, in appropriate cases,
refer the matter for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil Remedies
Act of 1986 (31 U.S.C: 3801 et seq.).
This language will appear in financial assistance agreements with sub -recipients.
Contract Assurance: 26.13b
We will ensure that the following clause is placed in every DOT -assisted contract and subcontract:
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 cany 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.
SUBPART B - ADMINISTRATIVE REQUIREMENTS
Section 26.21 DBE Program Updates
Since the City has received a grant of $250,000 or more in FTA planning capital and/or operating
assistance in a federal fiscal year, we will continue to carry out this program until all funds from DOT
financial assistance have been expended. We will provide to DOT updates representing significant
changes in the program.
Section 26.23 Policy Statement
The Policy Statement is elaborated on the first page of this program.
Section 26.25 DBE Liaison Officer (DBELO)
We have designated the following individual as our DBE Liaison Officer:
Sue Ownby, Purchasing Manager
City Of Yakima
Yakima DBE Program Page 3 of 18
129 North 2nd Street
Yakima, WA 98901
Phone: 509-576-6695
Fax: 509-576-6695
Email: sownby@ci.yakima.wa.us
In that capacity, the DBELO is responsible for implementing all aspects of the DBE program and ensuring
that the City complies with all provision of 49 CFR Part 26. The DBELO has direct, independent access
to the City of Yakima City Manager concerning DBE program matters. An organization chart displaying
the DBELO's position in the organization is found in Attachment 1 to this program.
The DBELO is responsible for developing, implementing and monitoring the DBE program, in
coordination with other appropriate officials. The DBELO has a staff of four (4) to assist in the
administration of the program. The duties and responsibilities include the following:
1. Gathers and reports statistical data and other information as required by DOT.
2. Reviews third party contracts and purchase requisitions for compliance with this program.
3. Works with City of Yakima Transit to set overall triennial goals.
4. Ensures that bid notices and requests for proposals are available to DBEs in a timely manner.
5. Identifies contracts and procurements so that DBE goals are included in solicitations (both race -
neutral methods and contract specific goals attainment and identifies ways to improve progress.)
6. Analyzes the City's progress toward attainment and identifies ways to improve progress.
7. Participates in pre-bid meetings.
8. Advises the City Manager and City Council on DBE matters and achievement.
9. Provides DBEs with information and assistance in preparing bids, obtaining bonding and
insurance.
10. Plans and participates in DBE training seminars.
11. Assists potential DBEs to become certified according to the criteria set by DOT and acts as
liaison to the Uniform Certification Process in Washington.
12. Provides outreach to DBEs and community organizations to advise them of opportunities.
13. Maintains the City's updated directory on certified DBEs.
14. Maintains an open dialogue and working relationship with the Yakima Hispanic Chamber, as well
as Rural Community Development Resources.
15. Forwards all bid solicitations to the Hispanic Chamber.
16. Offers training on how to do business with the city and assistance to any potential DBE.
Section 26.27 DBE Financial Institutions
It is the policy of the City to investigate the full extent of services offered by financial institutions owned
and controlled by socially and economically disadvantaged individuals in the community, to make
reasonable efforts to use these institutions, and to encourage prime contractors on DOT -assisted
contract to make use of these institutions. We have made the following efforts to identify and use such
institutions: Conducted a search at www.omwbe.wa.gov and searched under N.A.I.C.S. Code 921130,
Public Finance Activities. No certified firms were listed.
To date we have identified the following such institutions: None
Information on the availability of such institutions can be obtained from the DBE Liaison Officer.
Section 26.29 Prompt Payment Mechanisms
The City will include the following clause in each DOT -assisted prime contract
The prime contractor agrees to pay each subcontractor under this prime contract for satisfactory
performance of its contract no later than thirty (30) days from the receipt of each payment the prime
Yakima DBE Program Page 4 of 18
•
•
contract receives from the City. The prime contractor agrees further to return retainage payments to
each subcontractor within thirty (30) days after the subcontractors work is satisfactorily completed.
Any delay or postponement of payment from the above referenced time frame may occur only for
good cause following written approval of the DEBELO. This clause applies to both DBE and non -
DBE subcontracts.
Section 26.31 Directory
The City maintains a directory identifying all firms eligible to participate as DBEs. The directory lists the
firm's name, address, phone number, date of the most recent certification, and the type of work the firm
has been certified to perform as a DBE. We revise the Directory annually We make the Directory
available on the City's webpage at www.ci.yakima.wa.us/services/purchasing The Directory may be
found in Attachment 2 to this program document.
Section 26.33 Overconcentration
- The City has not identified that overconcentration exists in the types of work that DBEs perform.
Section 26.35 Business Development Programs
The City has not established a business development program.
Section 26.37 Monitoring and Enforcement Mechanisms
The City will take the following monitoring and enforcement mechanisms to ensure compliance with 49
CFR Part 26.
1. We will bring to the attention of the Department of Transportation any false, fraudulent, or
dishonesticonduct in connection with the program, so that DOT can take the steps (e.g., referral
to the Department of Justice for criminal prosecution, referral to the DOT Inspector General,
action under suspension and debarment or Program Fraud and Civil Penalties rules) provided in
49 CFR § 26.109.
2. We will consider similar action under our own legal authorities, including responsibility
determinations in future contracts.
3. We will also provide a monitoring and enforcement mechanism to verify that work committed to
DBEs at contract award is actually performed by the DBEs. This will be accomplished by
verifying contractors and sub -contractors are eligible DBE's on OMWBE's website.
4. We will keep a running tally of actual payments to DBE firms for work committed to them at the
time of contract award.
SUBPART C — GOALS, GOOD FAITH EFFORTS. AND COUNTING
Section 26.43 Set -asides or Quotas
The City does not use quotas in any way in the administration of this DBE program.
Section 26.45 Overall Goals
A description of the methodology to calculate the overall goal and the goal calculations can be found in
Attachment 4 to this program. This program section will be updated every three years.
Yakima DBE Program Page 5 of 18
In accordance with Section 26.45(f) the City will submit its overall goal to DOT on August 1 every year.
Before establishing the overall goal every year, The City will consult with the Hispanic Chamber of
Yakima, and OMWBE to obtain information concerning the availability of disadvantaged and non -
disadvantaged businesses, the effects of discrimination on opportunities for DBEs, and the City's efforts
to establish a level playing field for the participation of DBEs.
Following this consultation, we will publish a notice of the proposed overall goals, informing the public that
the proposed goal and its rational are available for inspection during normal business hours at your
principal office for 30 days following the date of the notice, and informing the public that you and DOT will
accept comments on the goals for 45 days from the date of the notice. The Notice will be placed in the
Yakima Herald -Republic and on the City's website under Purchasing's page at
www.ci.yakima.wa.us/services/purchasing. Normally, we will issue this notice by June 1 of each year.
The notice must include addresses to which comments may be sent and addresses (including offices and
websites) where the proposal may be reviewed.
There were no comments submitted during the 45 day notice that was advertised July 10, 2009.
Our overall goal submission to DOT will include a summary of information and comments received during
this public participation process and our responses.
We will begin using our overall goal on October 1 of each year, unless we have received other
instructions from DOT. If we establish a goal on a project basis, we will begin using our goal by the time
of the first solicitation for a DOT -assisted contract for the project.
Section 26.49 Transit Vehicle Manufacturers Goals
The City requires each transit vehicle manufacturer, as a condition of being authorized to bid or propose
on FTA -assisted transit vehicle procurements, to certify that it has complied with the requirements of 49
CFR §26.49. Alternatively, the City may, at its discretion and with FTA approval, establish project -specific
goals for DBE participation in the procurement of transit vehicles in lieu of the TVM complying with this
element of the program.
Section 26.51(a -c) Breakout of Estimated Race -Neutral & Race -Conscious Participation
The City does not intend to use any race -conscious participation.
Section 26.51(d=g) Contract Goals
The City will use contract goals to meet any portion of the overall goal the city does not project being able
to meet using race -neutral means. Contract goals are established so that, over the period to which the
overall goal applies, they will cumulatively result in meeting any portion of our overall goal that is not
projected to be met through the use of race -neutral means.
We will establish contract goals only on those DOT -assisted contracts that have subcontracting
possibilities. We need not establish a contract goal on every such contract, and the size of contract goals
will be adapted to the circumstances of each such contract (e.g., type and location of work, availability of
DBEs to perform the particular type of work.)
We will express our contract goals as a percentage of the total amount of the DOT assisted contract.
Section 26.53 Good Faith Efforts Procedures
Demonstration of good faith efforts (26.53(a) & (c))
Yakima DBE Program Page 6 of 18
•
•
•
•
The obligation of the bidder/offeror is to make good faith efforts. The bidder/offeror can demonstrate that
it has done so either by meeting the contract goal or documenting good faith efforts. Examples of good
faith efforts are found in Appendix A to Part 26.
The DBELO is responsible for determining whether a bidder/offeror who has not met the contract goal
has documented sufficient good faith efforts to be regarded as responsible.
We will ensure that all information is complete and accurate and adequately documents the bidder/offer's
good faith efforts before we commit to the performance of the contract by the bidder/offeror.
Information to be submitted (26.53(b))
The City treats bidder/offers' compliance with good faith efforts'. requirements as a matter of responsibility.
Each solicitation for which a contract goal has been established will require the bidders/offerors to submit
the following information:
1. The names and addresses of DBE firms that will participate in the contract;
2. A description of the work that each DBE will perform;
3. The dollar amount of the participation of each DBE firm participating;.
4. Written and signed documentation of commitment to use a DBE subcontractor whose
participation it submits to meet a contract goal:-
5.
oal;5. Written and signed confirmation from the DBE that it is participating in the contract as provided in
the prime contractors commitment; and,
6. If the contract goal is not met, evidence of good faith efforts.
Administrative reconsideration (26.53(d))
Within ten (10) calendar days of being informed by the City that it is not responsible because it has not
documented sufficient good faith efforts,_a bidder/offeror may request administrative reconsideration.
Bidder/offerors should make this request in writing to the following reconsideration official:
Dave Zabell, Assistant City Manager
129 North 2nd Street
Yakima, WA 98901
The reconsideration official will not have played any role' in the original determination that the
bidder/offeror did not document sufficient good faith efforts.
As part of this reconsideration, the bidder/offeror will have the opportunity to provide written
documentation or argument concerning the issue of whether it met the goal or made adequate good faith
efforts to do so. The bidder/offeror will have the opportunity to meet in person with our reconsideration
official to discuss the issue of whether it met the goal or made adequate good faith efforts to do: We will
send the bidder/offeror a written decision on reconsideration, explaining the basis for.finding that the
bidder did or did not meet the goal or make adequate good faith efforts to do so. The result of the
reconsideration process is not administratively appealable to the Department of Transpiration.
Good Faith Efforts when a DBE is replaced on a contract (26.53(0)
The City will require a contractor to make good faith efforts to replace a DBE that is terminated or has
otherwise failed to complete its work on a contract with another certified DBE, to the extent needed to
meet the contract goal. We will require the prime contractor to notify the DBE Liaison officer immediately
of the DBE's inability or unwillingness to perform and provide reasonable documentation.
In this situation, we will require the prime contractor to obtain our prior approval of the substitute DBE and
to provide copies of new or amended subcontracts, or documentation of good faith efforts.
Yakima DBE Program Page 7 of 18
If the contractor fails or refuses to comply in the time specified, our contracting office will issue an order
stopping all or part of payment/work until satisfactory action has been taken. If the contractor still fails to
comply, the contracting officer may issue a termination for default proceeding.
Sample Bid Specification:
The requirements of 49 CFR Part 26, Regulations of the U.S. Department of Transportation, apply to
this contract. It is the policy of the City to practice nondiscrimination based on race, color, sex, or
national origin in the award or performance of this contract. All firms qualifying under this solicitation
are encouraged to submit bids/proposals. Award of this contract will be conditioned upon satisfying
the requirements of this bid specification. These requirements apply to all bidders/offerors, including
those who qualify as a DBE. A DBE contract goal of XX.X% has been established for this contract.
The bidder/offeror shall make good faith efforts, as defined in Appendix A, 49 CFR Part 26
(Attachment 1), to meet the contract goal for DBE participation in the performance of this contract.
The bidder/offeror will be required to submit the following information: (1) the names and addresses
of DBE firms that will participate in the contract; (2) a description of the work that each DBE firm will
perform; (3) the dollar amount of the participation of each DBE -firm participating; (4) Written
documentation of the bidder/offeror's commitment to use a DBE subcontractor whose participation it
submits to meet the contract goal; (5) Written confirmation from the DBE that it is participating in the
contract as provided in the commitment made under (4); and (5) if the contract goal is not met,
evidence of good faith efforts.
Section 26.55 Counting DBE Participation
We will count DBE participation toward overall and contract goals as provided in 49 CFR 26.55.
SUBPART D — CERTIFICATION STANDARDS
Section 26.61 — 26.73 Certification Process
The City will use the certification standards of Subpart D of 49 CFR Part 26 to determine the eligibility of
firms to participate as DBEs in DOT -assisted contracts. To be certified as a DBE, a firm must meet all
certification eligibility standards. We will make our certification decisions based on the facts as a whole.
For information about the certification process or to apply for certification, firms should contact the
Washington State Office of Minority and Women's Business Enterprises at: www.omwbe.wa.gov
SUBPART E — CERTIFICATION PROCEDURES
Section 26.81 Unified Certification Programs
The City is the member of a Unified Certification Program (UCP) administered by the Washington State
Office of Minority and Women's Business Enterprises. The UPC will meet all of the requirements of this
section. A description of the UCP Program and application are available online at:
http://www.omwbe.wa.gov/certification/application/documents/Application%20for%20Website%20-
%20Federal%20Program%20Onjy.pdf
Section 26.83 Procedures for Certification Decisions
Re -certifications 26.83(a) & (c)
Yakima DBE Program Page 8 of 18
•
•
We will review the eligibility of DBEs that we certified under former 49 CFR Part 23, to make sure that
they will meet the standards of Subpart E of 49 CFR Part 26. We will complete this review no later than
three years from the most recent certification date of each firm. Our schedule for this review process will
be annually, on the anniversary of their certification date.
For firms that we have certified or reviewed and found eligible under Part 26, we will again review their
eligibility every three years. These reviews will include conversations with the firms (telephone of in
person), and determinations will be made on a case-by-case basis.
"No Change" Affidavits and Notices of Change (26.83(1))
We require all DBEs to inform us, in a written affidavit, of any change in its circumstances affecting its
ability to meet size, disadvantaged. status, ownership or control criteria of 49 CFR Part 26 or of any
material changes in the information provided with the City's application for certification.
We also require all owners of all DBEs we have certified to submit, on the anniversary date of their
certification, a "no change" affidavit meeting the requirements of 26.83(j). The test of this affidavit is the
following:
I swear (or affirm) that there have been no changes in the circumstances of [name of DBE firm]
affecting its ability to meet the size, disadvantaged status, ownership, or control requirements of 49
CFR Part 26. There have been no material changes in the information provided with [name of DBE]'s
application for certification, except for any changes about which you have provided written notice to
the City under 26.83(j). [Name of firm] meets Small Business Administration (SBA) criteria for being a
small business concern and its average annual gross receipts (as defined by SBA rules) over the
firm's previous three fiscal years do not exceed $16.6 million.
We require DBEs to submit with this affidavit documentation of the firm's size and gross receipts.
We will notify all currently certified DBE firms of these obligations that have been certified by OMWBE and
are listed in the online directory. This notification will inform DBEs that to submit the "no change" affidavit,
their owners must swear or affirm that they meet all regulatory requirements of Part 26, including personal
net worth. Likewise, if a firm's owner knows or should know that he or she, or the firm, fails to meet a Part
26 eligibility requirement (e.g. personal net worth), the obligation to submit a notice of change applies.
Section 26.85 Denials of Initial, Requests for Certification
If we deny a firm's application or decertify it, it may not reapply until three (3) months have passed from
our action.
Section 26.87. Removal of a DBE's Eligibility
The City will refer and requests for removal of a DBE's eligibility to OMWBE.
Section 26.89 Certification Appeals
Any firm or complainant may appeal our decision in a certification matter to DOT. Such appeals may be
sent to:
Department of Transportation
Office of Civil Rights Certification Appeals Branch
1200 New Jersey Avenue, SE
Washington DC 20590
Yakima DBE Program Page 9 of 18
We will promptly implement any DOT certification appeal decisions affecting the eligibility of DBEs for our
DOT -assisted contracting (e.g., certify a firm if DOT has determined that our denial of its application was
erroneous).
SUBPART F — COMPLIANCE AND ENFORCEMENT
Section 26.109 Information, Confidentiality, Cooperation
We will safeguard from disclose to third parties information that may reasonably be regarded as
confidential business information, consistent with Federal, state, and local law. Washington State's
Public Disclosure Rule (RCW Ch. 42.56) shall apply.
Notwithstanding any contrary provisions of state or local law, we will not release personal financial
information submitted in response to the personal net worth requirement to a third party (other than DOT)
without the written consent of the submitter.
Monitoring Payments to DBEs
We will require prime contractors to maintain records and documents of payments to DBEs for three
years following the performance of the contract. These records will be made available for inspection
upon request by any authorized representative of the City or DOT. This reporting requirement also
extends to any certified DBE subcontractor.
We will perform interim audits of contract payments to DBEs. The audit will review payments to DBE
subcontractors to ensure that the actual amount paid to DBE subcontractors equals or exceeds the dollar
amounts stated in the schedule of DBE participation.
Attachment 1
Attachment 2
Attachment 3
Attachment 4
Attachment 5
Attachment 6
Attachment 7
ATTACHMENTS
Organizational Chart
DBE Directory
Monitoring and Enforcement Mechanisms
Overall Goal Calculation
Form 1 & 2 for Demonstration of Good Faith Efforts
Regulations: 49 CFR Part 26
Personnel Inventory Form
Yakima DBE Program Page 10 of 18
•
Attachment 1
Organizational Chart
City Council �a
City Manager
Assistant
City Manager
DBELO
Central Supply
Purchasing
Yakima DBE Program Page 11 of 18
Surplus Property
Attachment 2
DBE Directory
NAICS
CODE
DESCRIPTION
ARE THERE DBE'S IN
YAK CO?
541810
ADVERTISING AGENCIES
NO
334310
AUDIO AND VIDEO EQUIPMENT
MANUFACTURING
NO
811111
AUTOMOTIVE REPAIR AND REPLACEMENT
SHOPS, GENERAL .
NO
561720
BUILDING CLEANING SERVICES,
JANITORIAL
NO
485113
BUS AND OTHER MOTOR VEHICLE
TRANSIT SYSTEMS
NO
333312
COMMERCIAL LAUNDRY, DRYCLEANING,
AND PRESSING MACHINE
MANUFACTURING .
NO
332312
FABRICATED STRUCTURAL METAL
MANUFACTURING — For Bus Shelters
Metal Benders, Inc. (Yakima)
YES (1)
45431
FUEL DEALERS
NO
423850
JANITORIAL EQUIPMENT AND SUPPLIES
MERCHANT WHOLESALERS
NO
561730
LAWN CARE SERVICES (E.G.; FERTILIZING,
MOWING, SEEDING, SPRAYING)
Gilbert Patterson Concrete
YES (1)
453210
OFFICE SUPPLIES AND STATIONARY
STORES
NO
485991
PARATRANSIT TRANSPORTATION
SERVICES
441320
TIRE DEALERS
NO
448190
UNIFORM STORES (EXCEPT ATHLETIC)
NO
Yakima DBE Program Page 12 of 18
•
Attachment 3
Monitoring and Enforcement Mechanisms
The federal government has available several enforcement mechanisms that it may apply to firms
participating in the DBE problem, including, but not limited to, the following:
1. Suspension or debarment proceedings pursuant to 49 CFR § 26.107 & 49 CFR Part 29
2. Civil fraud action pursuant to 49 CFR Part 31
3. Criminal prosecution (fraud) pursuant to 18 USC 1001.
Yakima DBE Program Page 13 of 18
Attachment 4
Overall Goal Calculation
Table 1 - Determine the weight of each type of work by NAICS Code:
* Enter all the FTA -assisted projects below. Project amounts should be assigned relevent NAICS Code(s).
* 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
Code
Project
Amount of DOT
funds on project:
$1,000,000.00
% of total DOT
0.5123
funds (weight)
Number of
all firms
available
(including
DBEs
Relative
Availability
059.9,1-:
' - _, _ c n., c '
.' nRid`e;:conlract`Y`
2)
45431;,rc,,auel`
1' r;;
$667,887.00
0.3422
0.0000
3)
.::561'`720,',;
�,-. '
t 453Z101,.Prin±ingg
Bu`si i a, a, ��4'"
�x� �slej�er?;e�earing�,��;����y,
, z os ; , -
$20 000.00
,
$25,000.00
0.0102
0.0128
0.0000
4)
5)
`.56k1720
„glitoH 1' xa
$50,000.00
0.0256
0.0000
6)
y 541;810
Radio and Tey ads `,
$60,000.00
0.0307
� � ° �`
� ,
t ", + �4
��
�
7)
r, 811; 111wR
O'side vehicle :repairs ;Mt,
$90,000.00
0.0461
as a Err {<�<
� � ���� Oa�i k
6)
8)
, 44;1,320
» Tugs > 5s. x x kr
$39,000.00
0.0200
0.0000
Total FTA -Assisted Contract Funds
$1,951,887.00
1
.t
ty' `� ' k' y$.A
a
Table 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
Code
Project
Number of DBEs
available to
perform this work
Number of
all firms
available
(including
DBEs
Relative
Availability
1)
485991
Dial - A - Ride contract
*,v ' 6° ;` 0
?)
0.0000
2)
45431
Fuel
pwr
0.0000
3)
561720
Bus shelter cleaning
.!0-4. 0,°'�
M4 did ��
0.0000
4)
453210
Printing�
� '�
� � ° �`
� ,
t ", + �4
��
�
0.0000
0.0000
5)
561720
Janitorial
as a Err {<�<
� � ���� Oa�i k
6)
541810
Radio and TV ads
gX x p `} 17' ;
�/ F.
Y
0.0000
7)
811111
441320
Outside vehicle repairs
Tires
.t
ty' `� ' k' y$.A
a
;'
0.0000
0.0000
8)
Combined Totals
0
38
0.00%
Overall
availability
of DBEs
Yakima DBE Program Page 14 of 50
Table 3 - (Weight)
x (Availability) = Weighted Base Figure
NAICS
Code
Project
Dial - A - Ride contract
Weight
0.51232
x
x
Availability
0.00000
Weighted
Base Figure
1)
485991
2)
45431
Fuel
0.34218
x
0.00000
3)
561720
Bus shelter cleaning
Printing
0.01025
0.01281
x
x
0.00000
0.00000
4)
453210
5)
561720
Janitorial
0.02562
x
0.00000
6)
541810
Radio and TV ads0.03074
x
0.00000
7)
811111
Outside vehicle repairs
0.04611
x
0.00000
8)
441320
Tires
0.01998
x
0.00000
Total
0.0000
Expressed as a % (*100)
0.00%
Rounded, Weighted
Base Figure:
0%
Yakima DBE Program Page 15 of 50
•
•
Attachment 5
Forms 1 & 2 for Demonstration of Good Faith Efforts
FORM 1: DISADVANTAGED BUSINESS ENTERPRISE (DBE) UTILIZATION
The undersigned bidder/offeror has satisfied the requirements of the bid specification in the following
manner (please check the appropriate space):
The bidder/offeror is committed to a minimum of % DBE utilization on this contract.
The bidder/offeror (if unable to meet the DBE goal of %) is committed to a minimum of
% DBE utilization on this contract a submits documentation demonstrating good faith efforts.
Name of bidder/offeror's firm:
State Registration No.
By
Signature Title
Yakima DBE Program Page 15 of 18
FORM 2: LETTER OF INTENT
Name of bidder/offeror's firm:
Address:
City: State: Zip:
Name of DBE firm:
Address:
City: State: Zip:
Telephone:.
Description of work to be performed by DBE firm:
The bidder/offeror is committed to utilizing the above-named DBE firm for the work described above. The
estimated dollar value of this work is $
Affirmation
The above-named DBE firm affirms that it will perform the portion of the contract for the estimated dollar
value as stated above.
By
Signature Title
If the bidder/offeror does not receive award of the prime contract, any and all representations in this Letter
of Intent and Affirmation shall be null and void.
(Submit this page for each DBE subcontractor.)
Yakima DBE Program Page 16 of 18
Attachment 6
Regulations: 49 CFR Part 26
Subpart A -- General
§26.1 What are the objectives of this part?
This part seeks to achieve several objectives:
a. To ensure nondiscrimination in the award and administration of DOT -assisted contracts in the Department's highway, transit,
and airport financial assistance programs;
b. To create a level playing field on which DBEs can compete fairly for DOT -assisted contracts;
c. To ensure that the Department's DBE program is narrowly tailored in accordance with applicable law;
d. To ensure that only firms that fully meet this part's eligibility standards are permitted to participate as DBEs;
e. To help remove barriers to the participation of DBEs in DOT -assisted contracts;
f. To assist the development of firms that can compete successfully in the marketplace outside the DBE program; and
g. To provide appropriate flexibility to recipients of Federal financial assistance in establishing and providing opportunities for
DBEs.
§26.3 To whom does this part apply?
a. If you are a recipient of any of the following types of funds, this part applies to you:
1. Federal -aid highway funds authorized under Titles I (other than Part B) and V of the Intermodal Surface
Transportation Efficiency Act of 1991 (ISTEA), Pub. L. 102-240,105 Stat. 1914, or Titles I, III, and V of the
Transportation Equity Act for the 21st Century (TEA -21), Pub. L. 105-178, 112 Stat. 107.
2. Federal transit funds authorized by Titles I, III, V and VI of ISTEA, Pub. L. 102-240 or by Federal transit laws in
Title 49, U.S. Code, or Titles I, III, and V of the TEA -21, Pub. L. 105-178.
3. Airport funds authorized by 49 U.S.C. 47101, et seq.
b. [Reserved],
c. If you are letting a contract, and that contract is to be performed entirely outside the United States, its territories and
possessions, Puerto Rico, Guam, or the Northern Marianas Islands, this part does not apply to the contract.
d. If you are letting a contract in which DOT financial assistance does not participate, this part does not apply to the contract.
26.5 What do the terms used in this part mean?
Affiliation has the same meaning the term has in the Small Business Administration (SBA) regulations, 13 CFR part 121.
1. Except as otherwise provided in 13 CFR part 121, concerns are affiliates of each other when, either directly or indirectly:
i. One concern controls or has the power to control the other; or
ii. A third party or parties controls or has the power to control both; or
iii. An identity of interest between or among parties exists such that affiliation may be found.
2 In determining whether affiliation exists, it is necessary to consider all appropriate factors, including common ownership,
common management, and contractual relationships. Affiliates must be considered together in determining whether a concern
meets small business size criteria and the statutory cap on the participation of firms in the DBE program.
Alaska Native means a citizen of the United States who is a person of one-fourth degree or more Alaskan Indian (including Tsimshian
Indians not enrolled in the Metlaktla Indian Community), Eskimo, or Aleut blood, or a combination of those bloodlines. The term
includes, in the absence of proof of a minimum blood quantum, any citizen whom a Native village or Native group regards as an
Alaska Native if their father or mother is regarded as an Alaska Native.
Alaska Native Corporation (ANC) means any.Regional Corporation, Village Corporation, Urban Corporation, or Group Corporation
organized under the laws of the State of Alaska in accordance with the Alaska Native Claims Settlement Act, as amended (43 U.S.C.
1601, et seq.).
OCompliance means that a recipient has correctly implemented the requirements of this part.
Contract means a legally binding relationship obligating a seller to furnish supplies or services (including, but not limited to,
construction and professional services) and the buyer to pay for them. For purposes of this part, a lease is considered to .be a contract.
Contractor means one who participates, through a contract or subcontract (at any tier), in a DOT -assisted highway, transit, or airport
program.
Department or DOT means the U.S. Department of Transportation, including the Office of the Secretary, the Federal Highway
Administration (FHWA), the Federal Transit Administration (FTA), and the Federal Aviation Administration (FAA).
Disadvantaged business enterprise or DBE means a for-profit small business concern --
1. That is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the
case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; and
2. Whose management and daily business operations are controlled by one or more of the socially and economically
disadvantaged individuals who own it.
DOT -assisted contract means any contract between a recipient and a contractor (at any tier) funded in whole or in part with DOT
financial assistance, including letters of credit or loan guarantees, except a contract solely for the purchase of land.
Good faith efforts means efforts to achieve a DBE goal or other requirement of this .part which, by their scope, intensity, and
appropriateness to the objective, can reasonably be expected to fulfill the program requirement.
Immediate family member means father, mother, husband, wife, son, daughter, brother, sister, grandmother, grandfather, grandson,
granddaughter, mother-in-law, or father-in-law.
Indian tribe means any Indian tribe, band, nation, or other organized group or community of Indians, including any ANC, which is
recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians,
or is recognized as such by the State in which the tribe, band, nation, group, or community resides. See definition of "tribally -owned
concern" in this section.
Joint venture means an association of a DBE firm and one or more other firms to carry out a single, for-profit business enterprise, for
which the parties combine their property, capital, efforts, skills and knowledge, and in which the DBE is responsible for a distinct,
clearly defined portion of the work of the contract and whose share in the capital contribution, control, management, risks, and profits
of the joint venture are commensurate with its ownership interest.
Native Hawaiian means any individual whose ancestors were natives, prior to 1778, of the area which now comprises the State of
Hawaii.
Native Hawaiian Organization means any community service organization serving Native Hawaiians in the State of Hawaii which is a
not-for-profit organization chartered by the State of Hawaii, is controlled by Native Hawaiians, and whose business activities will
principally benefit such Native Hawaiians.
Noncompliance means that a recipient has not correctly implemented the requirements of this part.
Operating Administration or OA means any of the following parts of DOT: the Federal Aviation Administration (FAA), Federal
Highway Administration (FHWA), and Federal Transit Administration (FTA). The "Administrator" of an operating administration
includes his or her designees.
Personal net worth means the net value of the assets of an individual remaining after total liabilities are deducted. An individual's
personal net worth does not include: The individual's ownership interest in an applicant or participating DBE firm; or the individual's
equity in his or her primary place of residence. An individual's personal net worth includes only his or her own share of assets held
jointly or as community property with the individual's spouse.
Primary industry classification means the four digit Standard Industrial Classification (SIC) code designation which best describes the
primary business of a firm. The SIC code designations are described in the Standard Industry Classification Manual. As the North
American Industrial Classification System (NAICS) replaces the SIC system, references to SIC codes and the SIC Manual are deemed
to refer to the NAICS manual and applicable codes. The SIC Manual and the NAICS Manual are available through the National
Technical Information Service (NTIS) of the U.S. Department of Commerce (Springfield, VA, 22261). NTIS also makes materials
available through its web site (www.ntis.gov/naics).
Primary recipient means a recipient which receives DOT financial assistance and passes some or all of it on to another recipient.
Principal place of business means the business location where the individuals who manage the firm's day-to-day operations spend
most working'hours and where top management's business records are kept. If the offices from which management is directed and
where business records are kept are in different locations, the recipient will determine the principal place of business for DBE program
urposes.
Program means any undertaking on a recipient's part to use DOT financial assistance, authorized by the laws to which this part
applies.
Race -conscious measure or program is one that is focused specifically on assisting only DBEs, including women -owned DBEs.
Race -neutral measure or program is one that is, or can be, used to assist all small businesses. For the purposes of this part, race -
neutral includes gender -neutrality.
Recipient is any entity, public or private, to which DOT financial assistance is extended, whether directly or through another recipient,
through the programs of the FAA, FHWA, or FTA, or who has applied for such assistance.
Secretary means the Secretary of Transportationor his/her designee.
Set-aside means a contracting practice restricting eligibility for the competitive award of a contract solely to DBE firms.
Small Business Administration or SBA means the United States Small Business Administration.
Small business concern means, with respect to firms seeking to participate as DBEs in DOT -assisted contracts, a small business
concern as defined pursuant to section 3 of the Small Business Act and Small Business Administration regulations implementing it (13
CFR part 121) that also does not exceed the cap on average annual gross receipts specified in §26.65(b).
Socially and economically disadvantaged individual means any individual who is a citizen (or lawfully admitted permanent resident)
Illf the United States and who is --
1. Any individual who a recipient finds to be a socially and economically disadvantaged individual on a case-by-case basis.
2. Any individual in the following groups, members of which are rebuttably presumed to be socially and economically
disadvantaged: •
i. "Black Americans," which includes persons having origins in any of the Black racial groups of Africa;
ii. "Hispanic Americans," which includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South
American, or other Spanish or Portuguese culture or origin, regardless of race;
iii. "Native Americans," which includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians;
iv. "Asian -Pacific Americans," which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma
(Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei,
Samoa, Guam, the U.S. Trust Territories of the Pacific Islands (Republic of Palau), the Commonwealth of the
Northern Marianas Islands, Macao, Fiji, Tonga, Kirbati, Juvalu, Nauru, Federated States of Micronesia, or Hong
Kong;
v. "Subcontinent Asian Americans," which includes persons whose origins are from India, Pakistan, Bangladesh,
Bhutan, the Maldives Islands, Nepal or Sri Lanka;
vi. Women;
vii. Any additional groups whose members are designated as socially and economically disadvantaged by the SBA, at
such time as the SBA designation becomes effective.
Tribally -owned concern means any concern at least 51 percent owned by an Indian tribe as defined in this section.
You refers to a recipient, unless a statement in the text of this part or the context requires otherwise.(i.e., 'You must do XYZ' means
that recipients must do XYZ).
64 FR 5126, Feb. 2, 1999, as amended at 64 FR 34570, June 28, 1999]
ii
§26.7 What discriminatory actions are forbidden?
a. You must never exclude any person from participation in, deny any person the benefits of, or otherwise discriminate against
anyone in connection with the award and d performance of any contract covered by this part on the basis of race, color, sex, or
national origin.
b. In administering your DBE program, you must not, directly or through contractual or other arrangements, use criteria or
methods of administration that have the effect of defeating or substantially impairing accomplishment of the objectives of the
program with respect to individuals of a particular race, color, sex, or national origin.
§26.9 How does the Department issue guidance and interpretations under this part?
a. This part applies instead of subparts A and C through E of 49 CFR part 23 in effect prior to March 4, 1999. (See 49 CFR
Parts 1 to 99, revised as of October 1, 1998.) Only guidance and interpretations (including interpretations set forth in
certification appeal decisions) consistent with this part 26 and issued after March 4, 1999 have definitive, binding effect in
implementing the provisions of this part and constitute the official position of the Department of Transportation.
b. The Secretary of Transportation, Office of the Secretary of Transportation, FHWA, FTA, and FAA may issue written
interpretations of or written guidance concerning this part. Written interpretations and guidance are valid and binding, and
constitute the official position of the Department of Transportation, only if they are issued over the signature of the Secretary
of Transportation or if they contain the following statement:
The General Counsel of the Department of Transportation has reviewed this document and approved it as consistent with the language
and intent of 49 CFR part 26.
§26.11, What records do recipients keep and report?
a. [Reserved]
b. You must continue to provide data about your DBE program to the Department as directed by DOT operating
administrations.
c. You must create and maintain a bidders list.
1. The purpose of this list is to provide you as accurate data as possible about the universe of DBE and non -DBE
contractors and subcontractors who seek to work on your Federally -assisted contracts for use in helping you set your
overall goals.
2. You must obtain the following information about DBE and non -DBE contractors and subcontractors who seek to
work on your Federally -assisted contracts:
i. Firm name;
ii. Firm address;
iii. Firm's status as a DBE or non -DBE;
iv. Age of the firm; and
v. The annual gross receipts of the firm. You may obtain this information by asking each firm to indicate into
what gross receipts bracket they fit (e.g., less than $500,000; $500,000-$1 million; $1-2 million; $2-5
million; etc.) rather than requesting an exact figure from the firm.
3. You may acquire the information for your bidders list in a variety of ways. For example, you can collect the data
from all bidders, before or after the bid due date. You can conduct a survey that will result in statistically sound
estimate of the universe of DBE and non -DBE contractors and subcontractors who seek to work on your Federally -
assisted contracts. You may combine different data collection approaches (e.g., collect name and address
information from all bidders, while conducting a survey with respect to age and gross receipts information).
[64 FR 5126, Feb. 2, 1999, as amended at 65 FR 68951, Nov. 15, 2000]
§26.13 What assurances must recipients and contractors make?
a. (a) Each financial assistance agreement you sign with a DOT operating administration (or a primary recipient) must include
the following assurance:
The recipient shall not discriminate on the basis of race, color, national origin, or sex in the award and performance of any
DOT -assisted contract or in the administration of its DBE program or therequirements of 49 CFR part 26. The recipient shall
take all necessary and reasonable steps under 49 CFR part 26 to ensure nondiscrimination in the award and administration of
DOT -assisted contracts. The recipient's DBE program, as required by 49 CFR part 26 and as approved by DOT, is
incorporated by reference in this agreement. Implementation of this program is a legal obligation and failure to carry out its
terms shall be treated as a violation of this agreement. Upon notification to the recipient of its failure to carry out its approve
program, the Department may impose sanctions as provided for under part 26 and may, in appropriate cases, refer the matter
for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.).
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
esult in the termination of this contract or such other remedy as the recipient deems appropriate.
§26.15 How can recipients apply for exemptions or waivers?
a. You can apply for an exemption from any provision of this part. To apply, you must request the exemption in writing from
the Office of the Secretary of Transportation, FHWA, FTA, or FAA. The Secretary will grant the request only if it documents
special or exceptional circumstances, not likely to be generally applicable, and not contemplated in connection with the
rulemaking that established this part, that make your compliance with a specific provision of this part impractical. You must
agree to take any steps that the Department specifies to comply with the intent of the provision from which an exemption is
granted. The Secretary will issue a written response to all exemption requests.
b. You can apply for a waiver of any provision of Subpart B or C of this part including, but not limited to, any provisions
regarding administrative requirements, overall goals, contract goals or good faith efforts. Program waivers are for the purpose
of authorizing you to operate a DBE program that achieves the objectives of this part by means that may differ from one or
more of the requirements of Subpart B or C of this part. To receive a program waiver, you must follow these procedures:
1. You must apply through the concerned operating administration. The application must include a specific program
proposal and address how you will meet the criteria of paragraph (b)(2) of this section. Before submitting your
application, you must have had public participation in developing your proposal, including consultation witlrthe
DBE community and at least one public hearing. Your application must include a summary of the public
participation process and the information gathered through it.
2. Your application must show that --
i. There is a reasonable basis to conclude that you could achieve a level of DBE participation consistent with
the objectives of this part using different or innovative means other than those that are provided in subpart
B or C of this part;
ii. Conditions in your jurisdiction are appropriate for implementing the proposal;
iii. Your proposal would prevent discrimination against any individual or group in access to contracting
opportunities or other benefits of the program; and
iv. Your proposal is consistent with applicable law and program requirements of the concerned operating
administration's financial assistance program.
3. The Secretary has the authority to approve your application. If the Secretary grants your application, you may
administer your DBE program as provided in your proposal, subject to the following conditions:
i. DBE eligibility'' is determined as provided in subparts D and E of this part, and DBE participation is
counted as provided in §26.49;
. ii. Your level of DBE participation continues to be consistent with the objectives of this part;
iii. There is a reasonable limitation on the duration of your modified program; and
iv. Any other conditions the Secretary makes on the grant of the waiver.
4.- The Secretary may end a program waiver at any time and require you to comply with this part's provisions. The
Secretary may also extend the waiver, if he or she determines that all requirements of paragraphs (b)(2) and. (3) of
this section continue to be met. Any such extension shall be for no longer than period originally set for the duration
of the program. -
Subpart B --.Administrative Requirements for DBE Programs for Federally -Assisted Contracting
§26.21 Who must have a DBE program?
• b.
If you are in one of these categories and let DOT -assisted contracts, you must have a DBE program meeting the requirements
of this part:
1. All FHWA recipients receiving funds authorized by a statute to which this part applies;
2. FTA recipients receiving planning, capital and/or operating assistance who will award prime contracts (excluding
transit vehicle purchases) exceeding $250,000 in FTA funds in a Federal fiscal year;
3. FAA recipients receiving grants for airport planning or development who will award prime contracts exceeding
$250,000 in FAA funds in a Federal fiscal year.
1 You must submit a DBE, program conforming to this part by August 31, 1999 to the concerned operating
administration (OA). Once the OA has approved your program, the approval counts for all of your DOT -assisted
programs (except that goals are reviewed by the particular operating administration that provides funding for your
DOT -assisted contracts).
2. You do not have to submit regular updates of your DBE programs, as long as you remain in compliance. However,
you must submit significant 'changes in the program for approval.
c. You are not eligible to receive DOT financial assistance unless DOT has approved your DBE program and you are in
compliance with it and this part. You must continue to carry out your program until all funds from DOT financial assistance
have been expended.
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR 34570, June 28, 1999; 65 FR 68951, Nov. 15, 2000]
§26.23 What is the requirement for a policy statement?
You must issue a signed and dated policy statement that expresses your commitment to your DBE program, states its objectives, and
outlines responsibilities for its implementation. You must circulate the statement throughout your organization and to the DBE and
non -DBE business communities that perform work on your DOT -assisted contracts.
§26.25 What is the requirement for a liaison officer?
You must have a DBE liaison officer, who shall have direct, independent access to your Chief Executive Officer concerning DBE
program matters. The liaison officer shall be responsible for implementing all aspects of your DBE program. You must also have
adequate staff to administer the program in compliance with this part.
26.27 What efforts must recipients make concerning DBE financial institutions?
You must thoroughly investigate the full extent of services offered by financial institutions owned and controlled by socially and
economically disadvantaged individuals in your community and make reasonable efforts to use these institutions. You must also
encourage prime contractors to use such institutions.
§26.29 What prompt payment mechanisms must recipients have?
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 a specific number of days from receipt of each payment you make to
the prime contractor. This clause must also require the prompt return of retainage payments from the prime contractor to the
subcontractor within a specific number of days after the subcontractor's work is satisfactorily completed.
1. This clause may provide for appropriate penalties for failure to comply, the terms and conditions of which you set.
2. This clause may also provide that any delay or postponement of payment among the parties may take place only for
good cause, with your prior written approval.
b. You may also establish, as part of your DBE program, any of the following additional mechanisms to ensure prompt
payment:
1. A contract clause that requires prime contractors to include in their subcontracts language providing that prime
contractors and subcontractors will use appropriate alternative dispute resolution mechanisms to resolve payment
disputes. You may specify the nature of such mechanisms.
2. A contract clause providing that the prime contractor will not be reimbursed for work performed by subcontractors
unless and until the prime contractor ensures that the subcontractors are promptly paid for the work they have
performed.
3. Other mechanisms, consistent with this part and applicable state and local law, to ensure that DBEs and other
contractors are fully and promptly paid.
§26.31 What requirements pertain to the DBE directory?
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, you must include its address, phone number, and the types of work the firm has been certified to
perform as a DBE. You must revise your directory at least annually and make updated information available to contractors and the
public on request.
§26.33 What steps must a recipient take to address overconcentration of DBEs in certain types of work?
If you determine that DBE firms are so overconcentrated in a certain type of work as to unduly burden the opportunity of
non -DBE firms to participate in this type of work, you must devise appropriate measures to address this overconcentration.
b. These measures may include the use of incentives, technical assistance, business development programs, mentor-prote ge
programs, and other appropriate measures designed to assist DBEs in performing work outside of the specific field in which
you have determined that non -DBEs are unduly burdened. You may also consider varying your use of contract goals, to the
extent consistent with §26.51, to unsure that non -DBEs are not unfairly prevented from competing for subcontracts.
c. You must obtain the approval of the concerned DOT operating administration for your determination of overconcentration
and the measures you devise to address it. Once approved, the measures become part of your DBE program.
4,26.35 What role do business development and mentor-prote ge programs have in the DBE program?
a. You may or, if an operating administration directs you to, you must establish a DBE business development program (BDP) to
assist firms in gaining the ability to compete successfully in the marketplace outside the DBE program. You may require a
DBE firm, as a condition of receiving assistance through the BDP, to agree to terminate its participation in the DBE program
after a certain time has passed or certain objectives have been reached. See Appendix C of this part for guidance on
administering BDP programs.
b. As part of a BDP or separately, you may establish a "mentor-prote ge " program, in which another DBE or non -DBE firm is
the principal source of business development assistance to a DBE firm.
1. Only firms you have certified as DBEs before they are proposed for participation in a mentor-prote ge, program are
eligible to participate in the mentor-prote ge program.
2. During the course of the mentor-prote ge relationship, you must:
i. Not award DBE credit to a non -DBE mentor firm for using its own prote ge firm for more than one half of
its goal on any contract let by the recipient; and
ii. Not award DBE credit to a non -DBE mentor firm for using its own prote ge firm for more than every other
contract performed by the prote ge firm.
3 For purposes of making determinations of business size under this part, you must not treat protea ge firms as affiliates
of mentor firms, when both firms are participating under an approved mentor-prote ge program. See Appendix D of
this part for guidance concerning the operation of mentor-prote ge programs. -
c. Your BDPs and mentor-prote ge programs must be approved by the concerned operating administration before you
implement them. Once approved, they become part of your DBE program.
§26.37 What are a recipient's responsibilities for monitoring the performance of other program participants?
•
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.
b. 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.
c. This mechanism must provide for a running tally of actual DBE attainments (e.g., payments actually made to DBE firms),
including a means of comparing these attainments to commitments. In your reports of DBE participation to the Department,
you must display both commitments and attainments.
[64 FR 5126, Feb. 2, 1999, as amended at 65 FR 68951, Nov. 15, 2000]
Subpart C -- Goals, Good Faith Efforts, and Counting
§26.41 What is the role of the statutory 10 percent goal in this program?
a. The statutes authorizing this program provide that, except to the extent the Secretary determines otherwise, not less than 10
percent of the authorized funds are to be expended with DBEs.
b. This 10 percent goal is an aspirational goal at the national level, which the Department uses as a tool in evaluating and
monitoring DBEs' opportunities to participate in DOT -assisted contracts. •
c. The national 10 percent goal does not authorize or require recipients to set overall or contract goals at the 10 percent level, or
any other particular level, or to take any special administrative steps if their goals are above or below 10 percent.
§26.43 Can recipients use set -asides or quotas as part of this program?
•
a. You are not permitted to use quotas for DBEs on DOT -assisted contracts subject to this part.
b. You may not set-aside contracts for DBEs on DOT -assisted contracts subject to this part, except that, in limited and extreme
circumstances, you may use set -asides when no other method could be reasonably expected to redress egregious instances of
discrimination.
§26.45 How do recipients set overall goals?
a.
1. Except as provided in paragraph (a)(2) of this section, you must set an overall goal for DBE participation in your
DOT-assisted contracts.
2. If you are a FTA or FAA recipient who reasonably anticipates awarding (excluding transit vehicle purchases)
$250,000 or less in FTA or FAA funds in prime contracts in a Federal fiscal year, you are not required to develop
overall goals for FTA or FAA respectively for that fiscal year. However, if you have an existing DBE program, it
must remain in effect and you must seek to fulfill the objectives outlined in §26.1.
b. Your overall goal must be based on demonstrable evidence of the availability of ready, willing and able DBEs relative to all
businesses ready, willing and able to participate on your DOT-assisted contracts (hereafter, the "relative availability of
DBEs"). The goal must reflect your determination of the level of DBE participation you would expect absent the effects of
discrimination. You cannot simply rely on either the 10 percent national goal, your previous overall goal or past DBE
participation rates in your program without reference to the relative availability of DBEs in your market.
c. Step 1. You must begin your goal setting process by determining a base figure for the relative availability of DBEs. The
following are examples of approaches that you may take toward determining a base figure. These examples are provided as a
starting point for your goal setting process. Any percentage figure derived from one of these examples should be considered a
basis from which you begin when examining all evidence available in your jurisdiction. These examples are not intended as
an exhaustive list. Other methods or combinations of methods to determine a base figure may be used, subject to approval by
the concerned operating administration.
1. Use DBE Directories and Census Bureau Data. Determine the number of ready, willing and able DBEs in your
market from your DBE directory. Using the Census Bureau's County Business Pattern (CBP) data base, determine
the number of all ready, willing and able businesses available in your market that perform work in the same SIC
codes. (Information about the CBP data base may be obtained from the Census Bureau at their web site,
www.census.gov/epcdlcbp/view/cbpview.html.) Divide the number of DBEs by the number of all businesses to
derive a base figure for the relative availability of DBEs in your market.
2. Use a bidders list. Determine the number of DBEs that have bid or quoted on your DOT-assisted prime contracts or
subcontracts in the previous year. Determine the number of all businesses that have bid or quoted on prime or
subcontracts in the same time period. Divide the number of DBE bidders and quoters by the number for all
businesses to derive a base figure for the relative availability of DBEs in your market.
3. Use data from a disparity study. Use a percentage figure derived from data in a valid, applicable disparity study.
4. Use the goal of another DOT recipient. If another DOT recipient in the same, or substantially similar, market has set
an overall goal in compliance with this rule, you may use that goal as a base figure for your goal. •
5. Alternative methods. You may use other methods to determine a base figure for your overall goal. Any methodology
you choose must be based on demonstrable evidence of local market conditions and be designed to ultimately attain
a goal that is rationally related to the relative availability of DBEs in your market.
d. Step 2. Once you have calculated a base figure, you must examine all of the evidence available in your jurisdiction to
determine what adjustment, if any, is needed to the base figure in order to arrive at your overall goal.
1. There are many types of evidence that must be considered when adjusting the base figure. These include:
i. The current capacity of DBEs to perform work in your DOT-assisted contracting program, as measured by
the volume of work DBEs have performed in recent years;
ii. Evidence from disparity studies conducted anywhere within your jurisdiction, to the. extent it is not already
accounted for in your base figure; and
iii. If your base figure is the goal of another recipient, you must adjust it for differences in your local market
and your contracting program.
2. If available, you must consider evidence from related fields that affect the opportunities for DBEs to form, grow and
compete. These include, but are not limited to:
i. Statistical disparities in the ability of DBEs to get the financing, bonding and insurance required to
participate in your program;
ii. Data on employment, self-employment, education, training and union apprenticeship programs, to the
extent you can relate it to the opportunities for DBEs to perform in your program.
3. If you attempt to make an adjustment to your base figure to account for the continuing effects of past discrimination
(often called the "but for" factor) or the effects of an ongoing DBE program, the adjustment must be based on
demonstrable evidence that is logically and directly related to the effect for which the adjustment is sought.
e. Once you have determined a percentage figure in accordance with paragraphs (c) and (d) of this section, you should express
your overall goal as follows:
1 If you are an FHWA recipient, as a percentage of all Federal-aid highway funds you will expend in FHWA-
assisted contracts in the forthcoming fiscal year;
2. If you are an FTA or FAA recipient, as a percentage of all FTA or FAA funds (exclusive of FTA funds to
be used for the purchase of transit vehicles) that you will expend in FTA or FAA-assisted contracts in the
forthcoming fiscal year. In appropriate cases, the FTA or FAA Administrator may permit you to express
your overall goal as a percentage of funds for a particular grant or project or group of grants and/or
projects.
f.
1 If you set overall goals on a fiscal year basis, you must submit them to the applicable DOT operating administration
for review on August 1 of each year, unless the Administrator of the concerned operating administration establishes
a different submission date.
2. If you are an FTA or FAA recipient and set your overall goal on a project or grant basis, you must submit the goal
for review at a time determined by the FTA or FAA Administrator.
3. You must include with your overall goal submission a description of the methodology you used to establish the goal,
including your base figure and the evidence with which it was calculated, and the adjustments you made to the base
figure and the evidence relied on for the adjustments. You should also include a summary listing of the relevant
available evidence in your jurisdiction and, where applicable, an explanation of why you did not use that evidence to
adjust your base figure. You must also include your projection of the portions of the overall goal you expect to meet
through race -neutral and race -conscious measures, respectively (see §26.51(c)).
4. You are not required to obtain prior operating administration concurrence with the your overall goal. However, if the
operating administration's review suggests that your overall goal has not been correctly calculated, or that your
method for calculating goals is inadequate, the operating administration may, after consulting with you, adjust your
overall goal or require that you do so. The adjusted overall goal is binding on you.
5. If you need additional time to collect data or take other steps to develop an approach to setting overall goals, you
may request the approval of the concerned operating administration for an interim goal and/or goal -setting
mechanism. Such a mechanism must:
Reflect the relative availability of DBEs in your local market to the maximum extent feasible given the data
. available to you; and
i. Avoid imposing undue burdens on non -DBEs.
g. In establishing an overall goal, you must provide for public participation. This public participation must include:
1. Consultation with minority, women's and general contractor groups, community organizations, and other officials or
organizations which could be expected to have information concerning the availability of disadvantaged and non -
disadvantaged businesses, the effects of discrimination on opportunities for DBEs, and your efforts to establish a
level playing field for the participation of DBEs.
2. A published notice announcing yourproposed. overall goal, informing the public that the proposed goal and its
rationale are available for inspection during normal business hours at your principal office for 30 days following the
date of the notice, and informing the public that you and the Department will accept comments on the goals for 45
days from the date of the notice. The notice must include addresses'to which comments may be sent, and you must
publish it in general circulation media and available minority -focused media and trade association publications.
h. Your overall goals must provide for participation by all certified DBEs and must not be subdivided into group -specific goals.
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR 34570, June 28, 1999; 65 FR 68951, Nov. 15, 2000]
§26.47 Can recipients be penalized for failing to meet overall goals?
a. You cannot be penalized, or treated by the Department as being in noncompliance with this rule, because your DBE
''participation falls short of your overall goal, unless you have failed to administer your program in good faith.
b. If you do not have an approved DBE program or overall goal, or if you fail to implement your program in good faith, you are
in noncompliance with this part. '
§26.49 How are overall goals established for transit vehicle manufacturers?
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. You do not include FTA assistance used in transit vehicle procurements in the base amount from
which your overall goal is calculated.
b. If you are a transit vehicle manufacturer, you must establish and submit for FTA's approval an annual overall percentage
goal. In setting your overall goal,'you should be.guided, to the extent applicable, by the principles underlying §26.45. The
base from which you calculate this goal is the amount of FTA financial assistance included in transit vehicle contracts you
will perform during the fiscal year in question. You must exclude from this base funds attributable to work performed outside
the United States and its territories, possessions, and commonwealths. The requirements and procedures of this part with
respect to submission and approval of overall goals apply to you as they do to recipients..
c. As a transit vehicle manufacturer, you may make the certification required by this section if you have submitted the goal this
section requires and FTA has approved it or not disapproved it.
d. As a recipient, you may, with FTA approval, establish project -specific goals for DBE participation in the procurement of
transit vehicles in lieu of complying through the procedures of this section.
e. If you are an FHWA or FAA recipient, you may, with FHWA or FAA approval, use the procedures of this section with
respect to procurements of vehicles or specialized equipment. If you choose to do so, then the manufacturers of this.
equipment must meet the same requirements (including goal approval by FHWA or FAA) as transit vehicle manufacturers
must meet in FTA -assisted procurements.
§26.51 What means do recipients use to meet overall goals?
a. You must meet the maximum feasible portion of your overall goal by using race -neutral means of facilitating DBE
participation. Race -neutral DBE participation includes any time a DBE wins a prime contract through customary competitive
procurement procedures, is awarded a subcontract on a prime contract that does not carry a DBE goal, or even if there is a
DBE goal, wins a subcontract from a prime contractor that did not consider its DBE status in making the award (e.g.,.a prime
contractor that uses a strict low bid system to award subcontracts).
b. Race -neutral means include, but are not limited to, the following:
1. Arranging solicitations, times for the presentation of bids, quantities, specifications, and delivery schedules in ways
that facilitate DBE, and other small businesses, participation (e.g., unbundling large contracts to make them more
accessible to small businesses, requiring or encouraging prime contractors to subcontract portions of work that they
might otherwise perform with their own forces);
2. Providing assistance in overcoming limitations such as inability to obtain bonding or financing (e.g., by such means
as simplifying the bonding process, reducing bonding requirements, eliminating the impact of surety costs from
bids, and providing services to help DBEs, and other small businesses, obtain bonding and financing);
3. Providing technical assistance and other services;
4. Carrying out information and communications programs on contracting procedures and specific contract
opportunities (e.g., ensuring the inclusion of DBEs, and other small businesses, on recipient mailing lists for bidders;
ensuring the dissemination to bidders on prime contracts of lists of potential subcontractors; provision of
information in languages other than English, where appropriate);
5. Implementing a supportive services program to develop and improve immediate and long-term business
management, record keeping, and financial and accounting capability for DBEs and other small businesses;
6 Providing services to help DBEs, and other small businesses, improve long-term development, increase
opportunities to participate in a variety of kinds of work, handle increasingly significant projects, and achieve
eventual self-sufficiency;
7. Establishing a program to assist new, start-up firms, particularly in fields in which DBE participation has historically
been low;
8. Ensuring distribution of your DBE directory, through print and electronic means, to the widest feasible universe of
potential prime contractors; and •
9. Assisting DBEs, and other small businesses, to develop their capability to utilize emerging technology and conduct
business through electronic media.
c. Each time you submit your overall goal for review by the concerned operating administration, you must also submit your
projection of the portion of the goal that you expect to meet through race -neutral means and your basis for that projection.
This projection is subject to approval by the concerned operating administration, in conjunction with its review of your
overall goal.
d. You must establish contract goals to meet any portion of your overall goal you do not project being able to meet using race -
neutral means.
e. The following provisions apply to the use of contract goals:
1. You may use contract goals only on those DOT -assisted contracts that have subcontracting possibilities.
2. You are not required to set a contract goal on every DOT -assisted contract. You are not required to set each contract
goal at the same percentage level as the overall goal. The goal for a specific contract may be higher or lower than
that percentage level of the overall goal, depending on such factors as the type of work involved, the location of the
work, and the availability of DBEs for the work of the particular contract. However, over the period covered by your
overall goal, you must set contract goals so that they will cumulatively result in meeting any portion of your overall
goal you do not project being able to meet through the use of race -neutral means.
3. Operating administration approval of each contract goal is not necessarily required. However, operating
administrations may review and approve or disapprove any contract goal you establish.
4. Your contract goals must provide for participation by all certified DBEs and must not be subdivided into group -
specific goals:
f. To ensure that your DBE program continues to be narrowly tailored to overcome the effects of discrimination, you must
adjust your use of contract goals as follows:
1. If your approved projection under paragraph (c) of this section estimates that you can meet your entire overall goal
for a given year through race -neutral means, you must implement your program without setting contract goals
during that year.
•
Example to Paragraph (f)(1): Your overall goal for Year I is 12 percent. You estimate that. you can obtain 12
percent or more DBE participation through the use of race -neutral measures, without any use of contract goals. In
this case, you do not set any contract goals for the contracts that will be performed in Year I.
2. If, during the course of any year in which you are using contract goals, you determine that you will exceed your
overall goal, you must reduce or eliminate the use of contract goals to the extent necessary to ensure that the use of
contract goals does not result in exceeding the overall goal. If you determine that you will fall short of your overall
goal, then you must make appropriate modifications in your use of race -neutral and/or race -conscious measures to
allow you to meet the overall goal.
Example to Paragraph (f)(2): In Year II, your overall goal is 12 percent. You have estimated that you can obtain 5
percent DBE participation through use of race -neutral measures. You therefore plan to obtain the remaining 7
percent participation through use of DBE goals. By September, you have already obtained 11 percent DBE
participation for the year. For contracts let during the remainder of the year, you use contract goals only to the extent
necessary to obtain an additional one percent DBE participation. However, if you determine in September that your
participation for the year is likely to be only 8 percent total, then you would increase your use of race -neutral and/or
race -conscious means during the remainder of the year in order to achieve your overall goal.
3. If the DBE participation you have obtained by race -neutral means alone meets or exceeds your overall goals for two
consecutive years, you are not required to make a projection of the amount of your goal you can meet using such
means in the next year. You do not set contract goals on any contracts in the next year. You continue using only
race -neutral means to meet your overall goals unless and until you do not meet your overall goal for a year.
Example to Paragraph.(f)(3):Your overall goal for Years I and Year II is 10 percent. The DBE participation you
obtain through race -neutral measures alone is 10 percent or more in each year. (For this purpose, it does not matter
whether you obtained additional DBE participation through using contract goals in these years.) In Year III and
following years, you do not need to make a projection under paragraph (c) of this section of the portion of your
overall goal you expect to meet using race -neutral means. You simply use race -neutral means to achieve your
overall goals. However, if in Year VI your DBE participation falls short of your overall goal, then you must make a
paragraph (c) projection for Year VII and, if necessary, resume use of contract goals in that year.
4. If you obtain DBE participation that exceeds your overall goal in two consecutive years through the use of contract
goals (i.e., not through the use of race -neutral means alone), you must reduce your use of contract goals
proportionately in the following year.
Example to Paragraph (f)(4): In Years I and II, your overall goal is 12 percent, and you obtain 14 and 16 percent
DBE participation, respectively. You have exceeded your goals over the two-year period by an average of 25
percent. In Year III, your overall goal is again 12 percent, and your paragraph (c) projection estimates that you will
obtain 4 percent DBE participation through race -neutral means and 8 percent through contract goals. You then
reduce the contract goal projection by 25 percent (i.e., from 8 to 6 percent) and set contract goals accordingly during
the year. If in Year III you obtain 11 percent participation, you do not use this contract goal adjustment mechanism
for Year IV, because there have not been two consecutive years of exceeding overall goals.
g. In any year in.which you project meeting part of your goal through race -neutral means and the remainder throughicontract
goals, you must maintain data separately on DBE achievements in those contracts with and without contract goals,
respectively. You must report this data to the concerned operating administration as provided in §26.11.
§26.53 What are the good faith efforts procedures recipients follow in situations where there are contract goals?
a. When you have established a DBE contract goal, you must award the contract only to a bidder/offeror who makes good faith
efforts to meet it. You must determine that a bidder/offeror has made good faith efforts if the bidder/offeror does either of the
following things: •
1. Documents that it has obtained enough DBE participation to meet the goal; or
2. Documents that it made adequate good faith efforts to meet the goal, even though it did not succeed in obtaining
enough DBE participation to do so. If the bidder/offeror does document adequate good faith efforts, you must not
deny award of the contract on the basis that the bidder/offeror failed to meet the goal. See Appendix A of this part
for guidance in determining the adequacy of a bidder/offeror's good faith efforts.
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 this section:
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 confuiliation 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 this part); and
3. At your discretion, the bidder/offeror must present the information required by paragraph (b)(2) of this section --
i. Under sealed bid procedures, as a matter of responsiveness, or with initial proposals; under contract
negotiation procedures; or
ii. At any time before you commit yourself to the performance of the contract by the bidder/offeror, as a
matter of responsibility.
c. You must make sure all information is complete and accurate and adequately documents the bidder/offeror's good faith
efforts before committing yourself to the performance of the contract by the bidder/offeror.
d. If you determine that the apparent successful bidder/offeror has failed to meet the requirements of paragraph (a) of this
section, you must, before awarding the contract, provide the bidder/offeror an opportunity for administrative reconsideration.
1. As part of this reconsideration, the bidder/offeror must have the opportunity to provide written documentation or
argument concerning the issue of whether it met the goal or made adequate good faith efforts to do so.
2. Your decision on reconsideration must be made by an official who did not take part in the original determination
that the bidder/offeror failed to meet the goal or make adequate good faith efforts to do so.
3. The bidder/offeror must have the opportunity to meet in person with your reconsideration official to discuss the
issue of whether it met the goal or made adequate good faith efforts to do so.. .
4. You must send the bidder/offeror a written decision on reconsideration, explaining the basis for finding that the
bidder did or did not meet the goal or make adequate good faith efforts to do so.
5. The result of the reconsideration process is not administratively appealable to the Department of Transportation.
e. In a "design -build" or "turnkey" contracting situation, in which the recipient lets a master contract to a contractor, who in turn
lets subsequent subcontracts for the work of the project, a recipient may establish a goal for the project. The master contractor
then establishes contract goals, as appropriate, for the subcontracts it lets. Recipients must maintain oversight of the master
contractor's activities to ensure that they are conducted consistent with the requirements of this part.
f.
g.
1 You must require that a prime contractor not terminate for convenience a DBE subcontractor listed in response to
paragraph (b)(2) of this section (or an approved substitute DBE firm) and then perform the work of the terminated
subcontractwith its own forces or those of an affiliate, without your prior written consent.
2. When a DBE subcontractor is terminated, or fails to complete its work on the contract for any reason, you must
require the prime contractor to make good faith efforts to find another DBE subcontractor to substitute for the
original DBE. These good faith efforts shall be directed at finding another DBE to perform at least the same amount
of work under the contract as the DBE that was terminated, to the extent needed to meet the contract goal you
established for the procurement.
3. You must include in each prime contract a provision for appropriate administrative remedies that you will invoke if
the prime contractor fails to comply with the requirements of this section.
You must apply the requirements of this section to DBE bidders/offerors for prime contracts. In determining whether a DBE
bidder/offeror for a prime contract has met a contract goal, you count the work the DBE has committed to performing with its
own forces as well as the work that it has committed to be performed by DBE subcontractors and DBE suppliers.
§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 performanceof 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 perforins 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.
c. Count expenditures to a DBE contractor toward DBE goals only if the DBE is performing a commercially useful function on
that contract.
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 contractis 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.
4. When a DBE is presumed not to be performing a commercially useful function as provided in paragraph (c)(3) of
this section, the DBE may present evidence to rebut this presumption. You may determine that the firm is
performing a commercially useful function given the type of work involved and normal industry practices.
5. Your decisions on commercially useful function matters are subject to review by the concerned operating
administration, but are not adrninistratively appealable to DOT.
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 wvho 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 an owner -operator. The DBE who leases trucks
from a non -DBE is entitled to credit only for the fee or commission it receives as a result of the lease arrangement.
The DBE does not receive credit for the total value of the transportation services provided by the lessee, since these
services are not provided by a DBE.
6. For purposes of this paragraph (d), a lease must indicate that the DBE has exclusive use of and control over the
truck. This does not preclude the leased truck from working for others during the term of the lease with the consent
of the DBE, so long as the lease gives the DBE absolute priority for use of the leased truck. Leased trucks must
display the name and identification number of the DBE.
e. Count expenditures with DBEs for materials or supplies toward DBE goals as provided in the following:
1.
2.
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.
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.
f. If a firm is not currently certified as a DBE in accordance with the standards of subpart D of this part at the time of the
execution of the'contract, do not count the firm's participation toward any DBE goals, except as provided for in §26.87(i)).
g Do not count the dollar value of work performed under a contract with a firm after it has ceased to be certified toward your
overall goal.
h. Do not count the participation of a DBE subcontractor toward a contractor's final compliance with its DBE obligations on a
contract until the amount being counted has actually been paid to the DBE.
[64 FR 5126, Feb. 2, 1999, as amended at 65 FR 68951, Nov. 15, 2000]
Subpart D -- Certification Standards
§26.61 How are burdens of proof allocated in the certification process?
a. In determining whether to certify a firm as eligible to participate as a DBE, you must apply the standards of this subpart.
b. The firm seeking certification has the burden of demonstrating to you, by a preponderance of the evidence, that it meets the
requirements of this subpart concerning group membership or individual disadvantage, business size, ownership, and control.
c. You must rebuttably presume that members of the designated groups identified in §26.67(a) are socially and economically
disadvantaged. This means that they do not have the burden of proving to you that they are socially and economically
disadvantaged. However, applicants have the obligation to provide you information concerning their economic disadvantage
(see §26.67).
d. Individuals who are not presumed to be socially and economically disadvantaged, and individuals concerning whom the
presumption of disadvantage has been rebutted, have the burden of proving to you, by a preponderance of the evidence, that
they are socially and economically disadvantaged. (See Appendix E of this part.)
e. You,must make determinations concerning whether individuals and firms have met their burden of demonstrating group
membership, ownership, control,and social and economic disadvantage (where disadvantage must be demonstrated on an
individual basis) by considering all the facts in the record, viewed as a whole.
§26.63 What rules govern group membership determinations?
a. If you have reason to question whether an individual is a member of a group that is presumed to be socially and economically
disadvantaged, you must require the individual to demonstrate, by a preponderance of the evidence, that he or she is a
member of the group.
b. In making such a determination, you must consider whether the person has held himself out to be a member of the group over
a long period of time prior to application for certification and whether the person is regarded as a member of the group by the
relevant community. You may require the applicant to produce appropriate documentation of group membership.
1. If you determine that an individual claiming to be a member of a group presumed to be disadvantaged is not a
member of a designated disadvantaged group, the individual must demonstrate social and economic disadvantage on
an individual basis.
2. Your decisions concerning membership in a designated group are subject to the certification appeals procedure of
§26.89.
§26.65 What rules govern business size determinations?
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 $16.6 million. The Secretary adjusts this amount for inflation from
time to time.
§26.67 What rules determine social and economic disadvantage?
a. Presumption of disadvantage.
1. You must rebuttably presume that citizens of the United States (or lawfully admitted permanent residents) who are
women, Black Americans, Hispanic Americans, Native Americans, Asian -Pacific Americans, Subcontinent Asian
Americans, or other minorities found to be disadvantaged by the SBA, are socially and economically disadvantaged
individuals. You must require applicants to submit a signed, notarized certification that each presumptively
disadvantaged owner is, in fact, socially and economically disadvantaged.
2.
i. You must require each individual owner of a firm applying to participate as a DBE (except a firm applying
to participate as a DBE airport concessionaire) whose ownership and control are relied upon for DBE
certification to submit a signed, notarized statement of personal net worth, with appropriate supporting
documentation. This statement and documentation must not be unduly lengthy, burdensome, or intrusive.
ii Notwithstanding any provision of state law, you must not release an individual's personal net worth
statement nor any documentation supporting it to any third party without the written consent of the
submitter. Provided, that you must transmit this information to DOT in any certification appeal proceeding
under §26.89 in which the disadvantaged status of the individual is in question.
iii. In determining net worth, you must exclude an individual's ownership interest in the applicant firm and the
individual's equity in his or her primary residence (except any portion of such equity that is attributable to
excessive withdrawals from the applicant firm). A contingent liability does not reduce an individual's net
worth. The personal net worth of an individual claiming to be an Alaska Native will include assets and
income from sources other than an Alaska Native Corporation and exclude any of the following which the
individual receives from any Alaska Native Corporation: cash (including cash dividends on stock received .
from an ANC) to the extent that it does not, in the aggregate, exceed $2,000 per individual per annum;
stock (including stock issued or distributed by an ANC as a dividend or distribution on stock); a partnership
interest; land or an interest in land (including land or an interest in land received from an ANC as a
dividend or distribution on stock); and an interest in a settlement trust.
b. Rebuttal of presumption of disadvantage.
1. If the statement of personal net worth that an individual submits under paragraph (a)(2) of this section shows that the
individual's personal net worth exceeds $750,000, the individual's presumption of economic disadvantage is
rebutted. You are not required to have a proceeding under paragraph (b)(2) of this section in order to rebut the
presumption of economic disadvantage in this case.
2. If you have a reasonable basis to believe that an individual who is a member of one of the designated groups is not,
in fact, socially and/or economically disadvantaged you may, at any time, start a proceeding to determine whether
the presumption should be regarded as rebutted with respect to that individual. Your proceeding must follow the
procedures of §26.87.
3. In such a proceeding, you have the burden of demonstrating, by a preponderance of the evidence, that the individual
is not socially and economically disadvantaged. You may require the individual to produce information relevant to
the determination of his or her disadvantage.
4. When an individual's presumption of social and/or economic disadvantage has been rebutted, his or her ownership
and control of the firm in question cannot be used for purposes of DBE eligibility under this subpart unless and until
he or she makes an individual showing of social and/or economic disadvantage. If the basis for rebutting the
presumption is a determination that the individual's personal net worth exceeds $750,000, the individual is no longer
eligible for participation in the program and cannot regain eligibility by making an individual showing of
disadvantage.
c. 8(a) and SDB Firms. If a firm applying for certification has a current, valid certification from or recognized by the SBA
under the 8(a) or small and disadvantaged business (SDB) program (except an SDB certification based on the firm's self -
certification as an SDB), you may accept the firm's 8(a) or SDB certification in lieu of conducting your own certification
proceeding, just as you may accept the certification of another DOT recipient for this purpose. You are not required to do so,
however.
d. Individual determinations of social and economic disadvantage. Firms owned and controlled by individuals who are not
presumed to be socially and economically disadvantaged (including individuals whose presumed disadvantage has been
rebutted) may apply for DBE certification. You must make a case-by-case determination of whether each individual whose
ownership and control are relied upon for DBE certification is socially and economically disadvantaged. In such a
proceeding, the applicant firm has the burden of demonstrating to you, by a preponderance of the evidence, that the
individuals who own and control it are socially and economically disadvantaged. An individual whose personal net worth
exceeds $750,000 shall not be deemed to be economically disadvantaged. In making these determinations, use the guidance
found in Appendix E of this part. You must require that applicants provide sufficient information to permit determinations
under the guidance of Appendix E of this part.
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR 34570, June 28, 1999]
§26.69 What rules govern determinations of ownership?
a. In determining whether the socially and economically disadvantaged participants in a firm own the firm, you must consider
all the facts in the record, viewed as a whole.
b. To be an eligible DBE, a firm must be at least 51 percent owned by socially and economically disadvantaged individuals.
1. In the case of a corporation, such individuals must own at least 51 percent of the each class of voting stock •
outstanding and 51 percent of the aggregate of all stock outstanding.
2. In the case of a partnership, 51 percent of each class of partnership interest must be owned by socially and
economically disadvantaged individuals. Such ownership must be reflected in the firm's partnership agreement.
3. In the case of a limited liability company, at least 51 percent of each class of member interest must be owned by
socially and economically disadvantaged individuals.
c. The firm's ownership by socially and economically disadvantaged individuals must be real, substantial, and continuing, going
beyond pro forma ownership of the firm as reflected in ownership documents. The disadvantaged owners must enjoy the
customary incidents of ownership, and share in the risks and profits commensurate with their ownership interests, as
demonstrated by the substance, not merely the form, of arrangements.
d. All securities that constitute ownership of a firm shall be held directly by disadvantaged persons. Except as provided in this
paragraph (d), no securities or assets held in trust, or by any guardian for a minor, are considered as held by disadvantaged
persons in determining the ownership of a firm. However, securities or assets held in trust are regarded as held by a
disadvantaged individual for purposes of determining ownership of the firm, if --
1. The beneficial owner of securities or assets held in trust is a disadvantaged individual, and the trustee is the same or
another such individual; or
2. The beneficial owner of a trust is a disadvantaged individual who, rather than the trustee, exercises effective control
over the management, policy-making, and daily operational activities of the firm. Assets held in a revocable living
trust may be counted only in the situation where the same disadvantaged individual is the sole grantor, beneficiary,
and trustee.
e. The contributions of capital or expertise by the socially and economically disadvantaged owners to acquire their ownership
interests must be real and substantial. Examples of insufficient contributions include a promise to contribute capital, an
unsecured note payable to the firm or an owner who is not a disadvantaged individual, or mere participation in a firm's
activities as an employee. Debt instruments from financial institutions or other organizations that lend funds in the normal
course of their business do not render a firm ineligible, even if the debtor's ownership interest is security for the loan.
f The following requirements apply to situations in which expertise is relied upon as part of a disadvantaged owner's
contribution to acquire ownership:
1. The owner's expertise must be --
i. In a specialized field;
ii. Of outstanding quality;
iii. In areas critical to the firm's operations;
iv. Indispensable to the firm's potential success;
v. Specific to the type of work the firm performs; and
vi. Documented in the records of the firm. These records must clearly show the contribution of expertise and
its value to the firm.
2. The individual whose expertise is relied upon must have a significant financial investment in the firm.
You must always deem as held by a socially and economically disadvantaged individual, for purposes of determining
ownership, all interests in a business or other assets obtained by the individual --
1. As the result of a final .property settlement or court order in a divorce or legal separation, provided that no term or
condition of the agreement or divorce decree is inconsistent with this section; or
2. Through inheritance, or otherwise because of the death of the former owner. •
h.
1. You must presume as not being held by a socially and economically disadvantaged individual, for purposes of
determining ownership, all interests in a business or other assets obtained by the individual as the result of a gift, or
transfer without adequate consideration, from any non -disadvantaged individual or non -DBE firm who is --
i. Involved in the same firm for which the individual is seeking certification, or an affiliate of that firm;
ii. Involved in the same or a similar line of business; or
iii. Engaged in an ongoing business relationship with the firm, or an affiliate of the firm, for which the
individual is seeking certification.
2. To overcome this presumption and permit the interests or assets to be counted, the disadvantaged individual must
demonstrate to you, by clear and convincing evidence, that --
i. The gift or transfer to the disadvantaged individual was made for reasons other than obtaining certification
as a DBE; and
ii. The disadvantaged individual actually controls the management, policy, and operations of the firm,
notwithstanding the continuing participation of a non -disadvantaged individual who provided the gift or
transfer.
i. You must apply the following rules in situations in which marital assets form a basis for ownership of a firm:
1. When marital assets (other than the assets of the business in question), held jointly or as community property by
both spouses, are used to acquire the ownership interest asserted by one spouse, you must deem the ownership
J•
interest in the firm to have been acquired by that spouse with his or her own individual resources, provided that the
other spouse irrevocably renounces and transfers all rights in the ownership interest in the manner sanctioned by the
laws of the state in which either spouse or the firm is domiciled. You do not count a greater portion of joint or
community property assets toward ownership than state law would recognize as belonging to the socially and
economically disadvantaged owner of the applicant firm.
2. A copy of the document legally transferring and renouncing the other spouse's rights in the jointly owned or
community assets used to acquire an ownership interest in the firm must be included as part of the firm's application
for DBE certification.
You may consider the following factors in determining the ownership of a firm. However, you must not regard a contribution
of capital as failing to be real and substantial, or find a firm ineligible, solely because -- .
1. .Asocially and economically disadvantaged individual acquired his or her ownership interest as the result of a gift, or
transfer without adequate consideration, other than the types set forth in paragraph (h) of this section;
2. There is a provision for the co -signature of a spouse who is not a socially and economically disadvantaged
individual on financing agreements, contracts for the purchase or sale of real or personal property, bank signature
cards, or other documents; or
3. Ownership of thefirm in question or its assets is transferred for adequate consideration from a spouse who is not a
• socially and economically disadvantaged individual to a spouse who is such an individual. In this case, you must
give particularly close and careful scrutiny to the ownership and control of a firm to ensure that it is owned and
controlled, in substance as well as in form, by a socially and economically disadvantaged individual.
§26.71 What rules govern determinations concerning control?
a. In determining whether socially and economically disadvantaged owners control a firm, you must consider all the facts in the
record, viewed as a whole.
b. Only an independent business may be certified as a DBE. An independent business is one the viability of which does not
depend on its relationship with another firm or firms.
1. In determining whether a potential DBE is an independent business, you must scrutinize relationships with non -DBE
firms, in such areas as personnel, facilities, equipment, fmancial and/or bonding support, and other resources. •
2. " You must consider whether present or recent employer/employee relationships between the disadvantaged owner(s)
of the potential DBE and non -DBE firms or persons associated with non -DBE firms compromise the independence
of the potential DBE firm.
3. You must examine the firm's relationships with prime contractors to determine whether a pattern of exclusive or
primary dealings with a prime contractor compromises the independence of the potential DBE firm.
4 In considering factors related to the independence of a potential DBE firm, you must consider the consistency of
relationships between the potential DBE and non -DBE firms with normal industry practice.
c. A DBE firm must not be subject to any formal or informal restrictions which limit the customary discretion of the socially
and economically disadvantaged owners. There can be no restrictions through corporate charter provisions, by-law
provisions, contracts or any other formal or informal devices (e.g., cumulative voting rights, voting powers attached to
different classes of stock, employment contracts, requirements for concurrence by non -disadvantaged partners, conditions
precedent or subsequent, executory agreements, voting trusts, restrictions on or assignments of voting rights) that prevent the
socially and economically disadvantaged owners, without the cooperation or vote of any non -disadvantaged individual, from
making any business decision of the firm. This paragraph does not preclude a spousal co -signature on documents as provided
for in §26.69(j)(2).
d. The socially and economically disadvantaged owners must possess the power to direct or cause the direction of the
management and policies of the fine and to make day-to-day as well as long-term decisions on matters of management,
policy and operations. •
1. A disadvantaged owner must hold the highest officer position in the company (e.g., chief executive officer or
president).
2. In a corporation, disadvantaged owners must control the board of directors.
3. In a partnership, one or more disadvantaged owners must serve as' general partners, with control over all partnership
decisions.
e. Individuals who are not socially and economically disadvantaged may be involved in a DBE firm as owners, managers,
employees, stockholders, officers, and/or directors. Such individuals must not, however, possess or exercise the power to
control the firm, or be disproportionately responsible for the operation of the firm.
f. The socially and economically disadvantaged owners of the firm may delegate various areas of the management,
411 policymaking, or daily operations of the firm to other participants in the firm, regardless of whether these participants are
socially and economically disadvantaged individuals. Such delegations of authority must be revocable, and the socially and
economically disadvantaged owners must retain the power to hire and fire any person to whom such authority is delegated.
The managerial role of the socially and economically disadvantaged owners in the firm's overall affairs must be such that the
recipient can reasonably conclude that the socially and economically disadvantaged owners actually exercise control over the
firm's operations, management, and policy.
g. The socially and economically disadvantaged owners must have an overall understanding of, and managerial and technical
competence and experience directly related to, the type of business in which the firm is engaged and the firm's operations.
The socially and economically disadvantaged owners are not required to have experience or expertise in every critical area of
the firm's operations, or to have greater experience or expertise in a given field than managers or key employees. The socially
and economically disadvantaged owners must have the ability to intelligently and critically evaluate information presented by
other participants in the firm's activities and to use this information to make independent decisions concerning the firm's daily
operations, management, and policymaking. Generally, expertise limited to office management, administration, or
bookkeeping functions unrelated to the principal business activities of the firm is insufficient to demonstrate control.
h. If state or local law requires the persons to have a particular license or other credential in order to own and/or control a
certain type of firm, then the socially and economically disadvantaged persons who own and control a potential DBE firm of
that type must possess the required license or credential. If state or local law does not require such a person to have such a
license or credential to own and/or control a firm, you must not deny certification solely on the ground that the person lacks
the license or credential. However, you may take into account the absence of the license or credential as one factor in
determining whether the socially and economically disadvantaged owners actually control the firm.
i.
1. You may consider differences in remuneration between the socially and economically disadvantaged owners and
other participants in the firm in determining whether to certify a firm as a DBE. Such consideration shall be in the
context of the duties of the persons involved, normal industry practices, the firm's policy andpractice concerning
reinvestment of income, and any other explanations for the differences proffered by the firm. You may determine
that a firm is controlled by its socially and economically disadvantaged owner although that owner's remuneration is
lower than that of some other participants in the firm.
2. In a case where a non -disadvantaged individual formerly controlled the firm, and a socially and economically
disadvantaged individual now controls it, you may consider a difference between the remuneration of the former and
current controller of the firm as a factor in determining who controls the firm, particularly when the non -
disadvantaged individual remains involved with the firm and continues to receive greater compensation than the
disadvantaged individual.
In order to be viewed as controlling a firm, a socially and economically disadvantaged owner cannot engage in outside
employment or other business interests that conflict with the management of the firm or prevent the individual from devoting
sufficient time and attention to the affairs of the firm to control its activities. For example, absentee ownership of a business
and part-time work in a full-time firm are not viewed as constituting control. However, an individual could be viewed as
controlling a part-time business that operates only on evenings and/or weekends, if the individual controls it all the time it is
operating.
k.
1. A socially and economically disadvantaged individual may control a firm even though one or more of the
individual's immediate family members (who themselves are not socially and economically disadvantaged
individuals) participate in the firm as a manager, employee, owner, or in another capacity. Except as otherwise
provided in this paragraph, you must make a judgment about the control the socially and economically
disadvantaged owner exercises vis-a-vis other persons involved in the business as you do in other situations, without
regard to whether or not the other persons are immediate family members.
2. If you cannot determine that the socially and economically disadvantaged owners -- as distinct from the family as a
whole -- control the firm, then the socially and economically disadvantaged owners have failed to carry their burden
of proof concerning control, even though they may participate significantly in the firm's activities.
1. Where a firm was formerly owned and/or- controlled by a non -disadvantaged individual (whether or not an immediate family
member), ownership and/or control were transferred to a socially and economically disadvantaged individual, and the non -
disadvantaged individual remains involved with the firm in any capacity, the disadvantaged individual now owning the firm
must demonstrate to you, by clear and convincing evidence, that:
1. The transfer of ownership and/or control to the disadvantaged individual was made for reasons other than obtaining
certification as a DBE; and
2. The disadvantaged individual actually controls the management, policy, and operations of the fain, notwithstanding
the continuing participation of a non -disadvantaged individual who formerly owned and/or controlled the firm.
m. In determining whether a firm is controlled by its socially and economically disadvantaged owners, you may consider
whether the firm owns equipment necessary to perform its work. However, you must not determine that a firm is not
controlled by socially and economically disadvantaged individuals solely becausethe firm leases, rather than owns, such
equipment, where leasing equipment is a normal industry practice and the lease does not involve a relationship with a prime
contractor or other party that compromises the independence of the firm.
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. You may not, in this situation, require that the firm be recertified or submit a new application for certification, but you
must verify the disadvantaged owner's control of the firm in the additional type of work.
o. A business operating under a franchise or license agreement may be certified if it meets the standards in this subpart and the
franchiser or licenser is not affiliated with the franchisee or licensee. In determining whether affiliation exists, you should
P.
q.
generally not consider the restraints relating to standardized quality, advertising, accounting format, and other provisions
imposed on the franchisee or licensee by the franchise agreement or license, provided that the franchisee or licensee has the
right to profit from its efforts and bears the risk of loss commensurate with ownership. Alternatively, even though a
franchisee or licensee may not be controlled by virtue of such provisions in the franchise agreement or license, affiliation .
could arise through other means, such as common management or excessive restrictions on the sale or transfer of the
franchise interest or license.
In order for a partnership to be controlled by socially and economically disadvantaged individuals, any non -disadvantaged
partners must not have the power, without the specific written concurrence of the socially and economically disadvantaged
partner(s), to contractually bind the partnership or subject the partnership to contract or tort liability.
The socially and economically disadvantaged individuals controlling a firm may use an employee leasing company. The use
of such a company does not preclude the socially and economically disadvantaged individuals from controlling their firm if
they continue to maintain an employer-employee relationship with the leased employees. This includes being responsible for
hiring, firing, training, assigning, and otherwise controlling the on-the-job activities of the employees, as well as ultimate
responsibility for wage and tax obligations related to the employees.
§26.73 What are other rules affecting certification?
a.
1. Consideration of whether a firm performs a commercially useful function or is a regular dealer pertains solely to
counting toward DBE goals the participation of firms that have already been certified as DBEs: Except as provided
in paragraph (a)(2) of this section, you must not consider commercially useful function issues in any way in making
decisions about whether to certify a firm as a DBE.
2. You may consider, in making certification decisions, whether a firm has exhibited a pattern of conduct indicating its
involvement in attempts to evade or subvert the intent or requirements of the DBE program.
b. You must evaluate the eligibility of a firm on the basis of present circumstances. You must not refuse to certify a firm based
solely on historical information indicating a lack of ownership or control of the firm by socially and economically
disadvantaged individuals at some time in the past, if the firm currently meets the ownership and control standards of this
part. Nor must you refuse to certify a firm solely on the basis that it is a newly formed firm.
c. DBE firms and firms seeking DBE certification shall cooperate fully with your requests (and DOT requests) for information
relevant to the certification process. Failure or refusal to provide such information is a ground fora denial or removal of
certification.
d Only firms organized for profit may be eligible DBEs. Not-for-profit organizations, even though controlled by socially and
economically disadvantaged individuals, are not eligible to be certified as DBEs.
e. An eligible DBE firm must be owned by individuals who are socially and economically disadvantaged. Except as provided in
this paragraph, a firm that is not owned by such individuals, but instead is owned by another firm -- even a DBE firm --
cannot be an eligible DBE.
1. If socially and economically disadvantaged individuals own and control a firm through a parent or holding company,
established for tax, capitalization or other purposes consistent with industry practice, and the parent or holding
company in turn owns and controls an operating subsidiary, you may certify the subsidiary if it otherwise meets all
requirements of this subpart. In this situation, the individual owners and controllers of the parent or holding
company are deemed to control the subsidiary through the parent or holding company.
2. You may certify such a subsidiary only if there is cumulatively 51 percent ownership of the subsidiary by socially
and economically disadvantaged individuals. The following examples illustrate how this cumulative ownership
provision works:
Example 1: Socially and economically disadvantaged individuals own 100 percent of a holding company, which has
a wholly-owned subsidiary. The subsidiary may be certified, if it meets all other requirements.
Example 2: Disadvantaged individuals own 100 percent of the holding company, which owns 51 percent of a
subsidiary. The subsidiary may be certified, if all other requirements are met.
Example 3: Disadvantaged individuals own 80 percent of the holding company, which in turn owns 70 percent of a
subsidiary. In this case, the cumulative ownership of the subsidiary by disadvantaged individuals is 56 percent (80
percent of the 70 percent). This is more than 51 percent, so you may certify the subsidiary, if all other requirements
are met.
Example 4: Same as Example 2 or 3, but someone other than the socially and economically disadvantaged owners
of the parent or holding company controls the subsidiary. Even though the subsidiary is owned by disadvantaged
individuals, through the holding or parent company, you cannot certify it because it fails to meet control
requirements.
Example 5: Disadvantaged individuals own 60 percent of the holding company, which in turn owns 51 percent of a
subsidiary. In this case, the cumulative ownership of the subsidiary by disadvantaged individuals is about 31
percent. This is less than 51 percent, so you cannot certify the subsidiary.
Example 6: The holding company, in addition to the subsidiary seeking certification, owns several other companies.
The combined gross receipts of the holding companies and its subsidiaries are greater than the size standard for the
subsidiary seeking certification and/or the gross receipts cap of §26.65(b). Under the rules concerning affiliation, the
subsidiary fails to meet the size standard and cannot be certified.
f._ Recognition of a business as a separate entity for tax or corporate purposes is not necessarily sufficient to demonstrate that a
firm is an independent business, owned and controlled by socially and economically disadvantaged individuals.
g. You must not require a DBE firm to be prequalified as a condition for certification unless the recipient requires all firms that
participate in its contracts and subcontracts to be prequalified.
h. A firm that is owned by an Indian tribe, Alaska Native Corporation, or Native Hawaiian organization as an entity, rather than
by Indians, Alaska Natives, or Native Hawaiians as individuals, may be eligible for certification. Such a firm must meet the
size standards of §26.65. Such a firm must be controlled by socially and economically disadvantaged individuals, as provided
in §26.71.
Subpart E -- Certification Procedures.
§26.81 What are the requirements for Unified Certification Programs?
•
a. You and all other DOT recipients in your state must participate in a Unified Certification Program (UCP).
1. Within three years of March 4, 1999, you and the other recipients in your state must sign an agreement establishing
the UCP for that state and submit the agreement to the Secretary for approval. The Secretary may, on the basis of
extenuating circumstances shown by the recipients in the state, extend this deadline for no more than one additional
year.
2. The agreement must provide for the establishment of a UCP meeting all the requirements of this section. The
agreement must specify that the UCP will follow all certification procedures and standards of this part, on the same •
basis as recipients; that the UCP shall cooperate fully with oversight, review, and monitoring activities of DOT and
its operating administrations; and that the UCP shall implement DOT directives and guidance concerning
certification matters. The agreement shall also commit recipients to ensuring that the UCP has sufficient resources
and expertise to carry out the requirements of this part. The agreement shall include an implementation schedule
ensuring that the UCP is fully operational no later than 18 months following the approval of the agreement by the
Secretary.
3. Subject to approval by the Secretary, the UCP in each state may take any form acceptable to the recipients in that
state.
4. The Secretary shall review the UCP and approve it, disapprove it, or remand it to the recipients in the state for
revisions. A complete agreement which is not disapproved or remanded within 180 days of its receipt is deemed to
be accepted.
5. If you and the other recipients in your state fail to meet the deadlines set forth in this paragraph (a), you shall have
the opportunity to make an explanation to the Secretary why a deadline could not be met and why meeting the
deadline was beyond your control. If you fail to make such an explanation, or the explanation does not justify the
failure to meet the deadline, the Secretary shall direct you to complete the required action by a date certain. If you
and the other recipients fail to carry out this direction in a timely manner, you are collectively in noncompliance
with this part.
b. The UCP shall make all certification decisions on behalf of all DOT recipients in the state with respect to participation in the
DOT DBE Program.
1. Certification decisions by the UCP shall be binding on all DOT recipients within the state.
2. The UCP shall provide "one-stop shopping" to applicants for certification, such that an applicant is required to apply
only once for a DBE certification that will be honored by all recipients in the state.
3. All obligations of recipients with respect to certification and nondiscrimination must be carried out by UCPs, and
recipients may use only UCPs that comply with the certification and nondiscrimination requirements of this part.
c. All certifications by UCPs shall be pre -certifications; i.e., certifications that have been made final before the due date for bids
or offers on a contract on which a firm seeks to participate as a DBE.
d. A UCP is not required to process an application for certification from a firm having its principal place of business outside the
state if the firm is not certified by the UCP in the state in which it maintains its principal place of business. The "home state"
UCP shall share its information and documents concerning the firm with other UCPs that are considering the firm's
application.
e. Subject to DOT approval as provided in this section, the recipients in two or more states may form a regional UCP. UCPs
may also enter into written reciprocity agreements with other UCPs. Such an agreement shall outline the specific
responsibilities of each participant. A UCP may accept the certification of any other UCP or DOT recipient.
f. Pending the establishment of UCPs meeting the requirements of this section, you may enter into agreements with other
recipients, on a regional or inter jurisdictional basis, to perform certification functions required by this part. You may also
grant reciprocity to other recipient's certification decisions.
g. Each UCP shall maintain a unified DBE directory containing, for all firms certified by the UCP (including those from other
states certified under the provisions of this section), the information required by §26.3 1. The UCP shall make the directory
available to the public electronically, on the internet, as well as in print. The UCP shall update the electronic version of the
directory by including additions, deletions, and other changes as soon as they are made.
h. Except as otherwise specified in this section, all provisions of this subpart and subpart D of this part pertaining to recipients
also apply to UCPs.
§26.83 What procedures do recipients follow in making certification decisions?
a. You must ensure that only firms certified as eligible DBEs under this section participate as DBEs in your program.
b. You must determine the eligibility of firms as DBEs consistent with the standards of subpart D of this part. When a UCP is
formed, the UCP must meet all the requirements of subpart D of this part and this subpart that recipients are required to meet.
c. You must take all the following steps in determining whether a DBE firm meets the standards of subpart D of this part:
1. Perform an on-site visit to the offices of the firm. You must interview the principal officers of the firm and review
their re sume s and/or work histories. You must also perforin an on-site 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 reponof any other recipient with respect to a firm applying for certification;
2. If the firm is a corporation, analyze the ownership of stock in the firm;
3. Analyze the bonding and financial capacity of the firm;
4. Determine the work history of the firm, including contracts it has received and work it has completed;
5. Obtain a statement from the firm of the type of work it prefers to perform as part of the DBE program and its
preferred locations for performing the work, ifany;
6. Obtain or compile a list of the equipment owned by or available to the firm and the licenses the firm and its key
personnel possess to perform the work it seeks to do as part of the DBE program;
7. Require potential DBEs to complete and submit an appropriate application form.
i. Uniform form. [Reserved]
ii. You must make sure that the applicant attests to the accuracy and truthfulness of the information on the
application form. This shall be done either in the form of an affidavit sworn to by the applicant before a
person who is authorized by state law to administer oaths or in the form of an unsworn declaration executed
under penalty of perjury of the laws of the United States.
iii. You must review all information on the form prior to making a decision about the eligibility of the fain.
d. When another recipient, in connection with its consideration of the eligibility of a firm, makes a written request for
• certification information you have obtained about that firm (e.g., including application materials or the report of a site visit, if
you have made one to the firm), you must promptly make the information available to the other recipient.
e. When another DOT recipient has certified a firm, you have discretion to take any of the following actions:
1. Certify the firm in reliance on the certification decision of the other recipient;
2. Make an independent certification decision based on documentation provided by the other recipient, augmented by
any additional information you require the applicant to provide; or
3. Require the applicant to go through your application process without regard to the action of the other recipient.
f. Subject to the approval of the concerned operating administration as part of your DBE program, you may impose a
reasonable application fee for certification. Fee waivers shall be made in appropriate cases.
g. You must safeguard from disclosure to unauthorized persons information gathered as part of the certification process that
may reasonably be regarded as proprietary or other confidential business information, consistent with applicable Federal,
state, and local law.
h. Once you have certified a DBE, it shall remain certified for a period of at least three years unless and until its certification has
been removed through the procedures of §26.87. You may not require DBEs to reapply for certification as a condition of
continuing to participate in the program during this three-year period, unless the factual basis on which the certification was
made changes.
. If you are a DBE, you must inform the recipient or UCP in writing of any change in circumstances affecting your ability to
meet size, disadvantaged status, ownership, or control requirements of this part or any material change in the information
provided in your application form.
1. Changes in management responsibility among members of a limited liability company are covered by this
requirement.
2. You must attach supporting documentation describing in detail the nature of such changes.
3. The notice must take the form of an affidavit sworn to by the applicant before a person who is authorized by state
law to administer oaths or of an unsworn declaration executed under penalty of perjury of the laws of the United
States. You must provide the written notification within 30 days of the occurrence of the change. If you fail to make
timely notification of such a change, you will be deemed to have failed to cooperate under §26.109(c).
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. The affidavit shall specifically affirm that
your firm continues to meet SBA business size criteria and the overall gross receipts cap of this part, documenting this
affirmation with supporting documentation of your firm's size and gross receipts. If you fail to provide this affidavit in a
timely manner, you will be deemed to have failed to cooperate under §26.109(c).
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. You may extend this time period once, for no more than an additional
60 days, upon written notice to the firm, explaining fully and specifically the reasons for the extension. You may establish a
different time frame in your DBE program, upon a showing that this time frame is not feasible, and subject to the approval of
the concerned operating administration. Your failure to make a decision by the applicable deadline under this paragraph is
deemed a constructive denial of the application, on the basis of which the firm may appeal to DOT under §26.89.
§26.85 What rules govern recipients' denials of initial requests for certification?
•
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.
b. When a firm is denied certification, you must establish a time period of no more than twelve months that must elapse before
the firm may reapply to the recipient for certification. You may provide, in your DBE program, subject to approval by the
concerned operating administration, a shorter waiting period for reapplication. The time period for reapplication begins to run
on the date the explanation required by paragraph (a) of this section is received by the firm.
c. When you make an administratively final denial of certification concerning a firm, the firm may appeal the denial to the
Department under §26.89.•
§26.87 What procedures does a recipient use to remove a DBE's eligibility?
a. Ineligibility complaints.
1. Any person may file with you a written complaint alleging that a currently -certified firm is ineligible and specifying
the alleged reasons why the firm is ineligible. You are not required to accept a general allegation that a firm is
ineligible or an anonymous complaint. The complaint may include any information or arguments supporting the
complainant's assertion that the firm is ineligible and should not continue to be certified. Confidentiality of
complainants' identities must be protected as provided in §26.109(b).
2. You must review your records concerning the firm, any material provided by the firm and the complainant, and
other available information. You may request additional information from the firm or conduct any other
investigation that you deem necessary.
3. If you determine, based on this review, that there is reasonable cause to believe that the 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. If you determine that such reasonable cause does not exist, you must notify the complainant
and the firm in writing of this determination and the reasons for it. All statements of reasons for findings on the issue
of reasonable cause must specifically reference the evidence in the record on which each reason is based.
b. Recipient -initiated proceedings. If, based on notification by the firm of a change in itscircumstances or other information
that comes toyourattention, 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.
c. DOT directive to initiate proceeding.
1. If the concerned operating administration determines that information in your certification records, or other
information available to the concerned operating administration, provides reasonable cause to believe that a firm you
certified does not meet the eligibility criteria of this part, the concerned operating administration may direct you to
initiate a proceeding to remove the firm's certification.
2. The concerned operating administration must provide you and the firm a notice setting forth the reasons for the
directive, including any relevant documentation or other information.
3 You must immediately comrnence and prosecute a proceeding to remove eligibility as provided by paragraph (b) of
this section.
•
•
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. In such a proceeding, you bear the burden of proving, by a preponderance of the evidence, that the firm does not
meet the certification standards of this part.
2. You must maintain a complete record of the hearing, by any means acceptable under state law for the retention of a
verbatim record of an administrative hearing. If there is an appeal to DOT under §26.89, you must provide a
transcript of the hearing„to DOT and, on request, to the firm. You must retain the original record of the hearing. You
may charge the firm only for the cost of copying the record.
3. The firm may elect to present information and arguments in writing, without going to a hearing. In such a situation,
you bear the same burden of proving, by a preponderance of the evidence, that the firm does not meet the
certification standards, as you would during a hearing.
e. Separation offunctions. You must ensure that the decision in a proceeding to remove a firm's eligibility is made by an office
and personnel that did not take part in actions leading to or seeking to implement the proposal to remove the firm's eligibility
and are not subject, with respect to the matter, to direction from the office or personnel who did take part in these actions.
1. Your method of implementing this requirement must be made part of your DBE program.
2. The decisionmaker must be an individual who is knowledgeable about the certification requirements of your DBE
program and this part. •
3. Before a UCP is operational in its state, a small airport orsmall transit authority (i.e., an airport or transit authority
serving an area with less than 250,000 population) is required to meet this requirement only to theextent feasible.
f. Grounds for decision. You must not base a decision to remove eligibility on a reinterpretation or changed opinion of
information available to the recipient at the time of its certification of the firm. You may base such a decision only on one or
more of the following:
1. Changes in the firm's circumstances since the certification of the firm by the recipient that render the firm unable to
meet the eligibility standards of this part;
2. Information or evidencei'not available to you at the time the firm was certified;
3. Information that was concealed or misrepresented by the firm in previous certification actions by a recipient;
4. A change in the certification standards or requirements of the Department since you certified the firm; or
5. A documented finding that your determination to certify the firm was factually erroneous.
g. Notice of decision. Following your decision, you must provide the firm written notice of the decision and the reasons for it,
including specific references to the evidence in the record that supports each reason for the decision. The notice must inform
the firm of the consequences of your decision and of the availability of an appeal to the Department of Transportation under
§26.89. You must send copies of the notice to the complainant in an ineligibility complaint or the concerned operating
administration that had directed you to initiate the proceeding.
h. Status of firm during proceeding.
1. (1) A firm remains an eligible DBE during the pendancy of your proceeding to remove its eligibility.
2. The firm does not become ineligible until the issuance of the notice provided for in paragraph (g) of this section.
i.. Effects of removal of eligibility. When you remove a firm's eligibility, you must take the following action:
1. When a prime contractor has made a commitment to using the ineligible firm, or you have made a commitment to
using a DBE prime contractor, but a subcontract or contract has not been executed before you issue the
decertification notice provided for in paragraph (g) of this section, the ineligible firm does not count toward the
contract goal or overall goal. You must direct the prime contractor to meet the contract goal with an eligible DBE
firm or demonstrate to you that it has made a good faith effort to do so.
2. If a prime contractor has executed a subcontract with the firm before you have notified the firm of its ineligibility,
the prime contractor may continue to use the firm on the contract and may continue to receive credit toward its DBE
goal for the firm's work. In this case, or in a case where you have let a prime contract to the DBE that was later ruled
ineligible, the portion of the ineligible firm's performance of the contract remaining after you issued the notice of its
ineligibility shall not count toward your overall goal, but may count toward the contract goal.
3. Exception: If the DBE's ineligibility is caused solely by its having exceeded the size standard during the
performance of the contract, you may continue to count its participation on that contract toward overall and contract
goals.
j. Availability of appeal. When you make an administratively final removal of a firm's eligibility under this section, the firm
may appeal the removal to the Department under §26.89.
.26.89 What is the process for certification appeals to the Department of Transportation?
a -
1. If you are a firm which is denied certification or whose eligibility is removed by a recipient, you may make an
administrative appeal to the Department.
2. If you are a complainant in an ineligibility complaint to a recipient (including the concerned operating
administration in the circumstances provided in §26.87(c)), you may appeal to the Department if the recipient does
not find reasonable cause to propose removing the firm's eligibility or, following a removal of eligibility proceeding,
determines that the firm is eligible.
3. Send appeals to the following address: Department of Transportation, Office of Civil Rights, 400 7th Street, SW,
Room 5414, Washington, DC 20590.
b Pending the Department's decision in the matter, the recipient's decision remains in effect. The Department does not stay the
effect of the recipient's decision while it is considering an appeal.
c. If you want to file an appeal, you must send a letter to the Department within 90 days of the date of the recipient's final
decision, including information and arguments concerning why the recipient's decision should be reversed. The Department
may accept an appeal filed later than 90 days after the date of the decision if the Department determines that there was good
cause for the late filing of the appeal.
1. If you are an appellant who is a firm which has been denied certification, whose certification has been removed,
whose owner is determined not to be a member of a designated disadvantaged group, or concerning whose owner
the presumption of disadvantage has been rebutted, your letter must state the name and address of any other
recipient which currently certifies the firm, which has rejected an application for certification from the firm or
removed the firm's eligibility within one year prior to the date of the appeal, or before which an application for
certification or a removal of eligibility is pending. Failure to provide this information may be deemed a failure to
cooperate under §26.109(c).
2 If you are an appellant other than one described in paragraph (c)(1) of this section, the Department will request, and
the firm whose certification has been questioned shall promptly provide, the information called for in paragraph
(c)(1) of this section. Failure to provide this information may be deemed a failure to cooperate under §26.109(c).
d. When it receives an appeal, the Department requests a copy of the recipient's complete administrative record in the matter. If
you are the recipient, you must provide the administrative record, including a hearing transcript, within 20 days of the
Department's request. The Department may extend this time period on the basis of a recipient's showing of good cause. To
facilitate the Department's review of a recipient's decision, you must ensure that such administrative records are well
organized, indexed, and paginated. Records that do not comport with these requirements are not acceptable and will be
returned to you to be corrected immediately. If an appeal is brought concerning one recipient's certification decision
concerning a firm, and that recipient relied on the decision and/or administrative record of another recipient, this requirement
applies to both recipients involved.
e. The Department makes its decision based solely on the entire administrative record. The Department does not make a de
novo review of the matter and does not conduct a hearing. The Department may supplement the administrative record by
adding relevant information made available by the DOT Office of Inspector General; Federal, state, or local law enforcement
authorities; officials of a DOT operating administration or other appropriate DOT office; a recipient; or a firm or other private
party.
f. As a recipient, when you provide supplementary information to the Department, you shall also make this information
available to the firm and any third -party complainant involved, consistent with Federal or applicable state laws concerning
freedom of information and privacy. The Department makes available, on request by the firm and any third -party
complainant involved, any supplementary information it receives from any source. ,
1. The Department affirms your decision unless it determines, based on the entire administrative record, that your
decision is unsupported by substantial evidence or inconsistent with the substantive or procedural provisions of this
part concerning certification.
2. If the Department determines, after reviewing the entire administrative record, that your decision was unsupported
by substantial evidence or inconsistent with the substantive or procedural provisions of this part concerning
certification, the Department reverses your decision and directs you to certify the firm or remove its eligibility, as
appropriate. You must take the action directed by the Department's decision immediately upon receiving written
notice of it.
3. The Department is not required to reverse your decision if the Department determines that a procedural error did not
result in fundamental unfairness to the appellant or substantially prejudice the opportunity of the appellant to present
its case.
4. If it appears that the record is incomplete or unclear with respect to matters likely to have a significant impact on the
outcome of the case, the Department may remand the record to you with instructions seeking clarification or
augmentation of the record before making a finding. The Department may also remand a case to you for further
proceedings consistent with Department instructions concerning the proper application of the provisions of this part.
5. The Department does not uphold your decision based on grounds not specified in your decision.
6. The Department's decision is based on the status and circumstances of the firm as of the date of the decision being
appealed.
7. The Department provides written notice of its decision to you, the firm, and the complainant in an ineligibility
complaint. A copy of the notice is also sent to any other recipient whose administrative record or decision has been
involved in the proceeding (see paragraph (d) of this section). The notice includes the reasons for the Department's
decision, including specific references to the evidence in the record that supports each reason for the decision.
8 The Department's policy is to make its decision within 180 days of receiving the complete administrative record. If
the Department does not make its decision within this period, the Department provides written notice to concerned
parties, including a statement of the reason for the delay and a date by which the appeal decision will be made.
g. All decisions under this section are adrninistratively final, and are not subject to petitions for reconsideration.
064 FR 5126, Feb. 2, 1999, as amended at 65 FR 68951, Nov. 15, 2000]
§26.91 What actions do recipients take following DOT certification appeal decisions?
a. If you are the recipient from whose action an appeal under §26.89 is taken, the decision is binding. It is not binding on other
recipients.
b. If you are a recipient to which a DOT determination under §26.89 is applicable, you must take the following action:
1. If the Department determines that you erroneously certified a firm, you must remove the firm's eligibility on receipt
of the determination, without further proceedings on your part. Effective on the date of your receipt of the
Department's determination, the consequences of a removal of eligibility set forth in §26.87(i) take effect.
2. If the Department determines that you erroneously failed to find reasonable cause to remove the firm's eligibility,
you must expeditiously commence a proceeding to determine whether the firm's eligibility should be removed, as
provided in §26.87.
3. If the Department determines that you erroneously declined to certify or removed the eligibility of the firm, you
must certify the firm, effective on the date of your receipt of the written notice of Department's determination.
4. If the Department determines that you erroneously determined that the presumption of social and economic
disadvantage either should or should not be deemed rebutted, you must take appropriate corrective action as
determined by the Department.
5. If the Department affirms your determination, no further action is necessary.
c. Where DOT has upheld your denial of certification to or removal of eligibility from a firm, or directed the removal of a firm's
eligibility, other recipients with whom the firm is certified may commence a proceeding to remove the firm's eligibility under
§26.87. Such recipients must not remove the firm's eligibility absent such a proceeding. Where DOT has reversed your denial
of certification to or removal of eligibility from a firm, other recipients must take the DOT action into account in any
certification action involving the firm. However, other recipients are not required to certify the firm based on the DOT
decision:
Subpart F -- Compliance and Enforcement
§26.101 What compliance procedures apply to recipients?
a. If you fail to comply with any requirement of this part, you may be subject to formal enforcement action under §26.103 or
§26.105 or appropriate program sanctions by the concerned operating administration, such as the suspension or termination
of Federal funds, or refusal to approve projects, grants or contracts until deficiencies are remedied. Program sanctions may
include, in the case of the FHWA program, actions provided for under 23 CFR 1.36; in the case of the FAA program, actions
consistent with 49 U.S.C. 47106(d), 47111(d), and 47122; and in the case of the FTA program, any actions permitted under
49 U.S.C. chapter 53 or applicable FTA program requirements.
b. As provided in statute, you will not be subject to compliance actions or sanctions for failing to carry out any requirement of
this part because you have been prevented from complying because a Federal court has issued a final order in which the court
found that the requirement is unconstitutional.
§26.103 What enforcement actions apply in FIIWA and FTA programs?
The provisions of this section apply to enforcement actions under FHWA and FTA programs:
a. Noncompliance complaints. Any person who believes that a recipient has failed to comply with its obligations under this part
may file a written complaint with the concerned operating administration's Office of Civil Rights. If you want to file a
complaint, you must do so no later than 180 days after the date of the alleged violation or.the date on which you learned of a
continuing course of conduct in violation of this part. In response to your written request, the Office of Civil Rights may
extend the time for filing in the interest of justice, specifying in writing the reason for so doing. The Office of Civil Rights
may protect the confidentiality of your identity as provided in §26.109(b). Complaints under this part are limited to
allegations of violation of the provisions of this part.
b. Compliance reviews. The concerned operating administration may review the recipient's compliance with this part at any
time, including reviews of paperwork and on-site reviews, as appropriate. The Office of Civil Rights may direct the operating
administration to initiate a compliance review based on complaints received.
c. Reasonable cause notice. if it appears, from the investigation of a complaint or the results of a compliance review, that you,
as a recipient, are in noncompliance with this part, the appropriate DOT office promptly sends you, return receipt requested, a
written notice advising you that there is reasonable cause to find you in noncompliance. The notice states the reasons for this
finding and directs you to reply within 30 days concerning whether you wish to begin conciliation.
d. Conciliation.
1. If you request conciliation, the appropriate DOT office shall pursue conciliation for at least 30, but not more than
120, days from the date of your request. The appropriate DOT office may extend the conciliation period for up to 30
days for good cause, consistent with applicable statutes.
2 If you and the appropriate DOT office sign a conciliation agreement, then the matter is regarded as closed and you
are regarded as being in compliance. The conciliation agreement sets forth the measures you have taken or will take
to ensure compliance. While a conciliation agreement is in effect, you remain eligible for FHWA or FTA financial
assistance.
3. The concerned operating administration shall monitor your implementation of the conciliation agreement and ensure
that its terms are complied with. If you fail to carry out the terms of a conciliation agreement, you are in
noncompliance.
4. If you do not request conciliation, or a conciliation agreement is not signed within the time provided in paragraph
(d)(1) of this section, then enforcement proceedings begin.
e. Enforcement actions.
1. Enforcement actions are taken as provided in this subpart.
2. Applicable findings in enforcement proceedings are binding on all DOT offices.
§26.105 What enforcement actions apply in FAA programs?
a Compliance with al] requirements of this part by airport sponsors and other recipients of FAA -financial assistance is enforced
through the procedures of Title 49 of the United States Code, including 49 U.S.C. 47106(d), 47111(d), and 47122, and
regulations implementing them.
b. The provisions of §26.103(b) and this section apply to enforcement actions in FAA programs.
c. Any person who knows of a violation of this part by a recipient of FAA funds may file a complaint under 14 CFR part 16
with the Federal Aviation Administration Office of Chief Counsel.
§26.107 What enforcement actions apply to firms participating in the DBE program?
a. If you are a firm that does not meet the eligibility criteria of subpart D of this partand that attempts to participate in a DOT -
assisted program as a DBE on the basis of false, fraudulent, or deceitful statements or representations or under circumstances
indicating a serious lack of business integrity or honesty, the Department may initiate suspension or debarment proceedings
against you under 49 CFR part 29.
b. If you are a firm that, in order to meet DBE contract goals or other DBE program requirements, uses or attempts to use, on
the basis of false, fraudulent or deceitful statements or representations or under circumstances indicating a serious lack of
business integrity or honesty, another firm that does not meet the eligibility criteria of subpart D of this part, the Department
may initiate suspension or debarment proceedings against you under 49 CFR part 29.
c. In a suspension or debarment proceeding brought under paragraph (a) or (b) of this section, the concerned operating
administration may consider the fact that a purported DBE has been certified by a recipient. Such certification does not
preclude the Department from determining that the purported DBE, or another firm that has used or attempted to use it to
meet DBE goals, should be suspended or debarred.
d. The Department may take enforcement action under 49 CFR Part 31, Program Fraud and Civil Remedies, against any
participant in the DBE program whose conduct is subject to such action under 49 CFR part 31.
e. The Department may refer to the Department of Justice, for prosecution under 18 U.S.C. 1001 or other applicable provisions
of law, any person who makes a false or fraudulent statement in connection with participation of a DBE in any DOT -assisted
program or otherwise violates applicable Federal statutes.
§26.109 What are the rules governing information, confidentiality, cooperation, and intimidation or retaliation?
a. Availability of records.
1. In responding to requests for information concerning any aspect of the DBE program, the Department complies with
provisions of the Federal Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a). The Department may
make available to the public any information concerning the DBE program release of which is not prohibited by
Federal law.
2. If you are a recipient, you shall safeguard from disclosure to unauthorized persons information that may reasonably
be considered as confidential business information, consistent with Federal, state, and local law.
b. Confidentiality of information on complainants. Notwithstanding the provisions of paragraph (a) of this section, the identity
of complainants shall be kept confidential, at their election. If such confidentiality will hinder the investigation, proceeding or
hearing, or result in a denial of appropriate administrative due process to other parties, the complainant must be advised for
the purpose of waiving the privilege. Complainants are advised that, in some circumstances, failure to waive the privilege
may result in the closure of the investigation or dismissal of the proceeding or hearing. FAA follows the procedures of 14
CFR part 16 with respect to confidentiality of information in complaints.
•
c. Cooperation. All participants in the Departments DBE program (including, but not limited to, recipients, DBE firms and
applicants for DBE certification, complainants and appellants, and contractors using DBE firms to meet contract goals) are
required to cooperate fully and promptly with DOT and recipient compliance reviews, certification reviews, investigations,
and other requests for information. Failure to do so shall be a ground for appropriate action against the party involved (e.g.,
with respect to recipients, a finding of noncompliance; with respect to DBE firms, denial of certification or removal of
eligibility and/or suspension and debarment; with respect to a complainant or appellant, dismissal of the complaint or appeal;
with respect to a contractor which uses DBE firms to meet goals, findings of non -responsibility for future contracts and/or
suspension and debarment).
d. Intimidation and retaliation. If you are a recipient, contractor, or any other participant in the program, you must not
intimidate, threaten, coerce, or discriminate against any individual or firm for the purpose of interfering with any right or
privilege secured by this part or because the individual or firm has made a complaint, testified, assisted, or participated in any
manner in an investigation, proceeding., or hearing under this part. If you violate this prohibition, you are in noncompliance
with this part.
Appendix A to Part 26 -- Guidance Concerning Good Faith Efforts
I. When, as a recipient, you establish a contract goal on a DOT -assisted contract, a bidder must, in order to be responsible
and/or responsive, make good faith efforts to meet the goal. The bidder can meet this requirement in either of two ways. First,
the bidder can meet the goal, documenting commitments for participation by DBE firms sufficient for this. purpose. Second,
even if it doesn't meet the goal, the bidder can document adequate good faith efforts. This means that the bidder must show
that it took all necessary and reasonable steps to achieve a DBE goal or other requirement of this part which, by their scope,
intensity, and appropriateness to the objective, could reasonably be expected to obtain sufficient DBE participation, even if
they were not fully successful.
II. In any situation in which you have established a contract goal, part 26 requires you to use the good faith efforts mechanism of
this part. As a recipient, it is up to you to make a fair and reasonable judgment whether a bidder that did not meet the goal
made adequate good faith efforts. It is important for you to consider the quality, quantity, and intensity of the different kinds
of efforts that the bidder has made. The efforts employed by the bidder should be those that one could reasonably expect a
bidder to take if the bidder were actively and aggressively trying to obtain DBE participation sufficient to meet the DBE
contract goal. Mere pro forma efforts are not good faith efforts to meet the DBE contract requirements. We emphasize,
® however, that your determination concerning the sufficiency of the firm's good faith efforts is a judgment call: meeting
quantitative formulas is not required.
III. The Department also strongly cautions you against requiring that a bidder meet a contract goal (i.e., obtain a specified
amount of DBE participation) in order to be awarded a contract, even though the bidder makes an adequate good faith efforts
showing. This rule specifically prohibits you from ignoring bona fide good faith efforts.
IV. The following is a list of types of actions which you should consider as part of the bidder's good faith efforts to obtain DBE
participation. It is not intended to be a mandatory checklist, nor is it intended to be exclusive or exhaustive. Other factors or
types of efforts may be relevant in appropriate cases.
A. Soliciting through all reasonable and available means (e.g. attendance at pre-bid meetings, advertising and/or written
notices) the interest of all certified DBEs who have the capability to perform the work of the contract. The bidder
must solicit this interest within sufficient time to allow the DBEs to respond to the solicitation. The bidder must
determine with certainty if the DBEs are interested by taking appropriate steps to follow up initial solicitations.
B. Selecting portions of the work to be performed by DBEs in order to increase the likelihood that the DBE goals will
be achieved. This includes, where appropriate, breaking out contract work items into economically feasible units to
facilitate DBE participation, even when the prime contractor might otherwise prefer to perform these work items
with its own forces.
C. Providing interested DBEs with adequate information about the plans, specifications, and requirements of the
contract in a timely manner to assist them in responding to a solicitation.
1. (1) Negotiating in good faith with interested DBEs. It is the bidder's responsibility to make a portion of the
work available to DBE subcontractors and suppliers and to select those portions of the work or material
needs consistent with the available DBE subcontractors and suppliers, so as to facilitate DBE participation.
Evidence of such negotiation includes the names, addresses, and telephone numbers of DBEs that were
considered; a description of the information provided regarding the plans and specifications for the work
selected for subcontracting; and evidence as to why additional agreements could not be reached for DBEs
to perform the work.
® 2. A bidder using good business judgment would consider a number of factors in negotiating with
subcontractors, including DBE subcontractors, and would take a firm's price and capabilities as well as
contract goals into consideration. However, the fact that there maybe sorne additional costs involved in
finding and using DBEs is not in itself sufficient reason for a bidder's failure to meet the contract DBE
goal, as long as such costs are reasonable. Also, the ability or desire of a prime contractor to perform the
work of a contract with its own organization does not relieve the bidder of the responsibility to make good.
D.
faith efforts. Prune contractors are not, however, required to accept higher quotes from DBEs if the price
difference is excessive or unreasonable.
E. Not rejecting DBEs as being unqualified without sound reasons basedon a thorough investigation of their
capabilities. The contractor's standing within its industry, membership in specific groups, organizations, or
associations and political or social affiliations (for example union vs. non-union employee status) are not legitimate
causes for the rejection or non -solicitation of bids in the contractor's efforts to meet the project goal.
F. Making efforts to assist interested DBEs in obtaining bonding, lines of credit, or insurance as required by the
recipient or contractor.
G. Making efforts to assist interested DBEs in obtaining necessary equipment, supplies, materials, or related assistance
or services.
H. Effectively using the services of available minority/women community organizations; minority/women contractors'
groups; local, state, and Federal minority/women business assistance offices; and other organizations as allowed on
a case-by-case basis to provide assistance in the recruitment and placement of DBEs.
V. In determining whether a bidder has made good faith efforts, you may take into account the performance of other bidders in
meeting the contract. For example, when the apparent successful bidder fails to meet the contract goal, but others meet it, you
may reasonably raise the question of whether, with additional reasonable efforts, the apparent successful bidder could have
met the goal. If the apparent successful bidder fails to meet the goal, but meets or exceeds the average DBE participation
obtained by other bidders, you may view this, in conjunction with other factors, as evidence of the apparent successful bidder
having made good faith efforts.
Appendix B to Part 26 -- Forms [Reserved]
Appendix C to Part 26 -- DBE Business Development Program Guidelines
The purpose of this program element is to further the development of DBEs, including but not limited to assisting them to move into
non-traditional areas of work and/or- compete in the marketplace outside the DBE program, via the provision of training and assistance
from the recipient.
A. Each firm that participates in a recipient's business development program (BDP) program is subject to a program term
4111
determined by the recipient. The term should consist of two stages; a developmental stage and a transitional stage.
B. In order for a firm to remain eligible for program participation, it must continue to meet all eligibility criteria contained in
part 26.
C. By no later than 6 months of program entry, the participant should develop and submit to the recipient a comprehensive
business plan setting forth the participant's business targets, objectives and goals. The participant will not be eligible for
program benefits until such business plan is submitted and approved by the recipient. The approved business plan will
constitute the participant's short and long term goals and the strategy for developmental growth to the point of economic
viability in non-traditional areas of work and/or work outside the DBE program.
D. The business plan should contain at least the following:
1. An analysis of market potential, competitive environment and other business analyses estimating the program
participant's prospects for profitable operation during the term of program participation and after graduation from
the program.
2. An analysis of the firm's strengths and weaknesses, with particular attention paid to the means of correcting any
financial, rnanagerial, technical, or labor conditions which could impede the participant from receiving contracts
other than those in traditional areas of DBE participation.
3. Specific targets, objectives, and goals for the business development of the participant during the next two years,
utilizing the results of the analysis conducted pursuant to paragraphs (C) and (D)(1) of this appendix;
4. Estimates of contract awards from the DBE program and from other sources which are needed to meet the objectives
and goals for the years covered by the business plan; and
5. Such other information as the recipient may require.
E. Each participant should annually review its currently approved business plan with the recipient and modify the plan as may
be appropriate to account for any changes in the firm's structure and redefined needs. The currently approved plan should be
considered the applicableplan for all program purposes until the recipient approves in writing a modified plan. The recipient
should establish an anniversary date for review of the participant's business plan and contract forecasts.
F Each participant should annually forecast in writing its need for contract awards for the next program year and the succeeding
program year during the review of its business plan conducted under paragraph (E) of this appendix. Such forecast should be
included in the participant's business plan. The forecast should include:
1. The aggregate dollar value of contracts to be sought under the DBE program, reflecting compliance with the
business plan;
2. The aggregate dollar value of contracts to be sought in areas other than traditional areas of DBE participation;
3. The types of contract opportunities being sought, based on the firm's primary line of business; and
4. Such other information as may be requested by the recipient to aid in providing effective business development
assistance to the participant.
G. Program participation is divided into two stages; (1) a developmental stage and (2) a transitional stage. The developmental
stage is designed to assist participants to overcome their social and economic disadvantage by providing such assistance as
may be necessary and appropriate to enable them to access relevant markets and strengthen their financial and managerial
skills. The transitional stage of program participation follows the developmental stage and is designed to assist participants to
overcome, insofar as practical, their social and economic disadvantage and to prepare the participant for leaving the program.
H. The length of service in the program term should not be a pre-set time frame for either the developmental or transitional
stages but should be figured on the number of years considered necessary in normal progression of achieving the firm's
established goals and objectives. The setting.of such time could be factored on such items as, but not limited to, the number
of contracts, aggregate amount of the contract received, years in business, growth potential, etc.
Beginning in the first year of the transitional stage of program participation, each participant should annually submit for
inclusion in its business plan a transition management plan outlining specific steps to promote profitable business operations
in areas other than traditional areas of DBE participation after graduation from the program. The transition management plan
should be submitted to the recipient at the same time other modifications are submitted pursuant to the annual review under
paragraph (E) of this section. The plan should set forth the same information as required under paragraph (F) of steps the
participant will take to continue its business development after the expiration of its program tern.
J. When a participant is recognized as successfully completing the program by substantially achieving the targets, objectives
and goals set forth in its program term, and has demonstrated the ability to compete in the marketplace, its further
participation within the program may be determined by the recipient.
K. In determining whether a concern has substantially achieved the goals and objectives of its business plan, the following
factors, among others, should be considered by the recipient:
1. Profitability;
2. Sales, including improved ratio of non-traditional contracts to traditional -type contracts;
3. Net worth, financial ratios, working capital, capitalization, access to credit and capital;
4. Ability to obtain bonding;
5. A positive comparison of the DBE's business and financial profile with profiles of non -DBE businesses in the same
area or similar business category; and
6. Good management capacity and capability.
L. Upon determination by the recipient that the participant should be graduated from the developmental program, the recipient
should notify the participant in writing of its intent to graduate the firm in a letter of notification. The letter of notification
should set forth findings, based on the facts, for every material issue relating to the basis of the program graduation with
specific reasons for each finding. The letter of notification should also provide the participant 45 days from the date of
service of the letter to submit in writing information that would explain why the proposed basis of graduation is not
warranted.
M. Participation of a DBE firm in the program may be discontinued by the recipient prior to expiration of the firm's program
term for good cause due to the failure of the firm to engage in business practices that will promote its competitiveness within
a reasonable period of time as evidenced by, among other indicators, a pattern of inadequate performance or unjustified
delinquent performance. Also, the recipient can discontinue the participation of a firm that does not actively pursue and bid
on contracts, and a firm that, without justification, regularly fails to respond to solicitations in the type of work it is qualified
for and in the geographical areas where it has indicated availability under its approved business plan. The recipient should
take such action if over a 2 -year period a DBE firm exhibits such a pattern.
Appendix D to Part 26 -- Mentor-Prote ge Program Guidelines
A. The purpose of this program element is to further the development of DBEs, including but not limited to assisting them to
move into non-traditional areas of work and/or compete in the marketplace outside the DBE program, via the provision of
training and assistance from other firms. To operate a mentor-prote ge program, a recipient must obtain the approval of the
concerned operating administration.
B.
1. Any mentor-prote ge relationship shall be based on a written development plan, approved by the recipient, which
clearly sets forth the objectives of the parties and their respective roles, the duration of the arrangement and the
services and resources to be provided by the mentor to the prote ge . The formal mentor-prote ge agreement may set
a fee schedule to cover the direct and indirect cost for such services rendered by the mentor for specific training and
assistance to the prote ge through the life of the agreement. Services provided by the mentor may be reimbursable
under the FTA, FHWA, and FAA programs.
2. To be eligible for reimbursement, the mentor's services provided and associated costs must be directly attributable
and properly allowable to specific individual contracts. The recipient may establish a line item for the mentor to
quote the portion of the fee schedule expected to be provided during the life of the contract. The amount claimed
shall be verified by the recipient and paid on an incremental basis representing the time the prote ge is working on
the contract. The total individual contract figures accumulated over the life of the agreement shall not exceed the
amount stipulated in the original mentor/prote ge agreement.
C. DBEs involved in a mentor-prote ge agreement must be independent business entities which meet the requirements for
certification as defined in subpart D of this part. A prote ge firm must be certified before it begins participation in a mentor-
prote ge arrangement. If the recipient chooses to recognize mentor/prote ge agreements, it should establish formal general
program guidelines. These guidelines must be submitted to the operating administration for approval prior to the recipient
executing an individual contractor/ subcontractor mentor-prote ge agreement.
Appendix E to Part 26 -- Individual Determinations of Social and Economic Disadvantage
The following guidance is adapted, with minor modifications, from SBA regulations concerning social and economic disadvantage
determinations (see 13 CFR 124.103(c) and 124.104).
SOCIAL DISADVANTAGE
I. Socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias within
American society because of their identities as members of groups and without regard to their individual qualities. Social
disadvantage must stem from circumstances beyond their control. Evidence of individual social disadvantage must include
the following elements:
A. At least one objective distinguishing feature that.has contributed to social disadvantage, such as race, ethnic origin,
gender, disability, long-term residence in an environment isolated from the mainstream of American society, or
other similar causes not common to individuals who are not socially disadvantaged;
B. Personal experiences of substantial and chronic social disadvantage in American society, not in other countries; and
C. Negative impact on entry into or advancement in the business world because of the disadvantage. Recipients will
consider any relevant evidence in assessing this element. In every case, however, recipients will consider education,
employment and business history, where applicable, to see if the totality of circumstances shows disadvantage in
entering into or advancing in the business world.
1. Education. Recipients will consider such factors as denial of equal access to institutions of higher education
and vocational training, exclusion from social and professional association with students or teachers, denial
of educational honors rightfully earned, and social patterns or pressures which discouraged the individual
from pursuing a professional or business education.
2 Employment. Recipients will consider such factors as unequal treatment in hiring, promotions and other
aspects of professional advancement, pay and fringe benefits, and other terms and conditions of
employment; retaliatory or discriminatory behavior by an employer or labor union; and social patterns or
pressures which have channeled the individual into non-professional or non -business fields.
3. Business history. The recipient will consider such factors as unequal access to credit or capital, acquisition
of credit or capital under commercially unfavorable circumstances, unequal treatment in opportunities for
government contracts or other work, unequal treatment by potential customers and business associates, and
exclusion from business or professional organizations.
II. With respect to paragraph I.(A) of this appendix, the Department notes that people with disabilities have disproportionately
low incomes and high rates of unemployment. Many physical and attitudinal barriers remain to their full participation in
education, employment, and business opportunities available to the general public. The Americans with Disabilities Act
(ADA) was passed in recognition of the discrimination faced by people with disabilities. It is plausible that many individuals
with disabilities -- especially persons with severe disabilities (e.g., significant mobility, vision, or hearing impairments) --
may be socially and economically disadvantaged.
III. Under the laws concerning social and economic disadvantage, people with disabilities are not a group presumed to be
disadvantaged. Nevertheless, recipients should look carefully at individual showings of disadvantage by individuals with
disabilities, making a case-by-case judgment about whether such an individual meets the criteria of this appendix. As public
entities subject to Title II of the ADA, recipients must also ensure their DBE programs are accessible to individuals with
disabilities. For example, physical barriers or the lack of application and information materials in accessible formats cannot
be permitted to thwart the access of potential applicants to the certification process or other services made available to DBEs
and applicants.
ECONOMIC DISADVANTAGE
A. General. Economically disadvantaged individuals are socially disadvantaged individuals whose ability to compete in the free
enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same or
similar line of business who are not socially disadvantaged.
B. Submission of narrative and financial information.
1. Each individual claiming economic disadvantage must describe the conditions which are the basis for the claim in a
narrative statement, and must submit personal financial information.
2. When married, an individual claiming economic disadvantage also. must submit separate financial information for
his or her spouse, unless the individual and the spouse are legally separated.
C. Factors to be considered. In considering diminished capital and credit opportunities, recipients will examine factors relating
to the personal financial condition of any individual claiming disadvantaged status, including personal income for the past
two years (including bonuses and the value of company stock given in lieu of cash), personal net worth, and the fair market
value of all assets, whether encumbered or not. Recipients will also consider the financial condition of the applicant
compared to the financial profiles of small businesses in the same primary industry classification, or, if not available, in
similar lines of business, which are not owned and controlled by socially and economically disadvantaged individuals in
evaluating the individual's access to credit and capital. The financial profiles that recipients will compare include total assets,
net sales, pre-tax profit, sales/working capital ratio, and net worth.
D. Transfers within two years.
1. Except asset forth in paragraph (D)(2) of this appendix, recipients will attribute to an individual claiming
disadvantaged status any assets which that individual has transferred to an immediate family member, or to a trust, a
beneficiary of which is an immediate family member, for less than fair market value, within two years prior to a
concern's application for participation in the DBE program, unless the individual claiming disadvantaged status can
demonstrate that the transfer is to or on behalf of an immediate family member for that individual's education,
medical expenses, or some other form of essential support.
2. Recipients will not attribute to an individual claiming disadvantaged status any assets transferred by that individual
to an immediate family member that are consistent with the customary recognition of special occasions, such as
birthdays, graduations, anniversaries, and retirements.
3. In determining an individual's access to capital and credit, recipients may consider any assets that the individual
transferred_ within such two-year period described by paragraph (D)(1) of this appendix that are not considered in
evaluating the individual's assets and net worth (e.g., transfers to charities).
Attachment 7
Personnel Inventory Form
* Return with Bid Proposal *
Firm Name: Contact Person
Address: Phone Number:
City: State: Zip:
Type of Service Provided: Age of your Company:
Are you a certified DBE or WMBE?: YES_ NO
If yes, what is your certification number? #
List Annual Gross Receipts of Firm: $
Contractor's Entire Work Force - if you need additional space, photo copy this section and attach
it to this form.
Occupation
Total
Employed
Total
Minorities
Black
Asian
Native
American
Hispanic
Apprentice
Trainee
Goals for minorities and women employees in the contractor's and subcontractor's workforce are _%
combined. Contractors and subcontractors do not have to fire or lay off employees to meet these goals;
however, if new employees are hired, it shall be an obligation to make a good faith effort to hire qualified
minorities and women.
Yakima DBE Program Page 18 of 18
M
F
M
F
M
F
M
F
M
F
M
F
M
F
Officers
Foremen
Clerical
Totals:
Goals for minorities and women employees in the contractor's and subcontractor's workforce are _%
combined. Contractors and subcontractors do not have to fire or lay off employees to meet these goals;
however, if new employees are hired, it shall be an obligation to make a good faith effort to hire qualified
minorities and women.
Yakima DBE Program Page 18 of 18
•
•
•
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No # 10
For Meeting of. October 5, 2010
ITEM TITLE Resolution adopting Yakima Transit's proposed Disadvantaged Business
Enterprise (DBE) Program
SUBMITTED BY Chris Waarvick, Public Works Director, 576-6411
CONTACT PERSON/TELEPHONE. Ken Mehin, Transit Manager, 576-6415
SUMMARY EXPLANATION Yakima Transit is required to update their Disadvantaged
Business Enterprise (DBE) Program in accordance with U S Department of Transportation
(DOT) regulations, 49 CFR Part 26
In July 2010, the Federal Transit Administration (FTA) determined that Yakima Transit was
deficient in this requirement and has ordered compliance or not receive federal financial
assistance until Yakima Transit updates the DBE program
The proposed DBE Program is to ensure that DBEs (women and minority owned businesses)
have an equal opportunity to receive notice and to participate in DOT — assisted contracts
Yakima Transit has held two public forums and has completed the 45 -day notice period as
required under 49 CFR Part 26 The program has been through City Purchasing review
Resolution X Ordinance Contract Other (Specify) DBE Policy
Funding Source Necessary fc ..2.Q10 Operating Grant, $1.9 million
APPROVAL FOR SUBMITTAL.
City anager
STAFF -RECOMMENDATION Adopt the resolution updating Yakima Transit's DBE Program
BOARD RECOMMENDATION The City Council Transit Committee has been briefed on the
requirement for Yakima Transit to comply with the FTA with regard to Disadvantaged Business
Enterprises
COUNCIL ACTION