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HomeMy WebLinkAbout08/17/2004, C4 - CITY DISADVANTAGED BUSINESS ENTERPRISE PROGRAM council A gust 17, 2004 j acEnaa nEpoitt CITY OF SAN LUIS O B I S P O FROM: Michael D. McCluskey, Director of PublicW Prepared By: Barbara Lynch Civil Enginee SUBJECT: CITY DISADVANTAGED BUSINESS ENTERPRISE PROGRAM CAO RECOMMENDATION Approve the Disadvantaged Business Enterprise Program for Fiscal Year 2004-05 for Federal Department of Transportation funded projects and authorize the Mayor to sign the program. DISCUSSION Back rg ound Every year the City adopts a Disadvantaged Business Enterprise (DBE) program. This program is required in order for the City to receive Federal Department of Transportation (DOT) funds. In the past the City has used these funds to assist with the construction of projects such as the Downtown Transfer Center and the Higuera Bridge Rehabilitation. The City's program conforms to a standard or "model" program developed by the California Department of Transportation (Caltrans) for the DOT programs. Caltrans, as the administrator of Federal Highway funds, provides assistance and oversight of many of the programs and projects the City works on. This program does not affect expenditure of state or local funds. Each year the City must review the adopted DBE program and make any necessary revisions. The goals are then advertised and the City accepts comments for a period of 45 days after the advertising. Typically the only revision to the program is the annual goal. (See Attachment #1, Section XIV Overall Goals of the Program.) The program language itself is set by Caltrans in coordination with the DOT, and Caltrans reviews the methodology for setting the goals prior to their advertising. The City Council has authorized the CAO under Resolution 9221 (2001 Series) to approve the annual goals and sign the program. This year a more significant change was made to the program and for that reason, staff is bringing the approval of the program to the City Council. In section XII Required Contract Clauses of the attached DBE program, the language has changed in regards to prompt payment. In the past, the City required the Contractor on a project to make prompt payment to subcontractors both during the job and at the time the City released the retention. The new language requires that the City not hold any retention. Retention money is used to protect the City against liens on the project. If, for example, a contractor failed to pay a supplier or subcontractor, the City would have funds to cover that payment if obligated to do so. What this will mean is the City will be more reliant on the bond provided by the contractor to cover labor and materials. While this is probably adequate protection, it is more difficult to use in the event there is a default in payment than just having retention available. r 1 Disadvantaged Business Enterprise Program Page 2 Staff has expressed their concerns regarding this provision to the Local Assistance staff at Caltrans. This was done in part because staff believes retention is an appropriate tool for the contract and also because staff believes it may conflict with requirements for retention in the California Public Contract Code. At this time, Caltrans has recommended that we adopt the program as required by the DOT and try to get clarification during this next year. The language will have minimal affect if any on us, as we have no plans to advertise any federally funded construction projects this coming year. Program The program goal is the percent of the dollar value of the Federally funded portion of the project the City can reasonably expect to be completed by a DBE. Example: Total Project City Share Federal Share DBE $ value of work to be completed Cost 1 (20%) (80%) go, by a DBE company $1,000,000 1 $200,000 J $800,000 3% = 3% x $800,000 = $24,000 Public Works staff, using a method approved by Caltrans, has determined what the City can "reasonably expect" by way of DBE participation on individual projects. The overall annual goal is a composite of individual project goals. The project goals are established by determining how many DBE's actually do work on federally funded City projects. Consideration is made for the type of work they specialize in and how that relates to the types of work in the project. For example, if a project were federally funded landscape work and all the DBE's in the area specialize in concrete work, the project goal would be 0%. If, on the other hand, the project is primarily concrete work, the goal might be a very large percentage. This methodology and the resulting goal are outlined in more detail in Attachment #1, "Disadvantaged Business Enterprise Program&Methodology". Annual Overall Goal This year the annual goal is 7%. The annual goal has been advertised in the media. The documentation has been made available to the public for a comment period of 45 days prior to the final adoption in accordance with Federal Regulation. No comments have been received. CONCURRENCES The proposed DBE Program goal and methodology has been reviewed and approved by Caltrans. The City has been authorized by them to proceed with advertising and final adoption of the goal. FISCAL IMPACT Currently the City receives Federal money to support the transit system, alternative transportation, and to improve and maintain City bridges and roadways. The adoption and use of a DBE program is required to expend Federal money. Federal DOT funding is anticipated to be $3,300,000 in the upcoming year for Capital Projects alone. The value of these Federal funds far outweighs any minor inflation of bid prices resulting from additional Federal requirements. Disadvantaged Business Enterprise Program Page 3 ALTERNATIVES A DBE program is only required if the City wishes to use Federal money provided by the DOT. If the City does not use this money then the program does not need to be adopted or implemented. ATTACHMENTS Attachment I - Disadvantaged Business Enterprise Program &Methodology gAMte&federal progfamskity dbe programt2004 program rag dbe adopt.doc Shoncot on Wrivc - - Attachment 1 —( DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM FOR SAN LUIS OBISPO This Program is in accordance with Title 49 of the Code of Federal Regulations Part 26 City of San Luis Obispo Disadvantaged Business Enterprise Program Page 1-13 Revised June 2004 ( Attachment 1 -4 DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM City of San Luis Obispo, California 1 Definitions of Terms The terms used in this program have the meanings defined in 49 CFR §26.5. II ,Objectives/Policy Statement (§§26.1, 26.23) The City of San Luis Obispo 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 of San Luis Obispo has received Federal financial assistance from the DOT, and as a condition of receiving this assistance, the City of San Luis Obispo will sign an assurance that it will comply with 49 CFR`Part 26.. It is the policy of the City of San Luis Obispo to ensure that DBEs, as defined in part 26, have an equal opportunity to receive and participate in DOT-assisted contracts. It is also our policy: • To ensure nondiscrimination in the award and administration of DOT-assisted contracts; • To create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; • To ensure that the DBE Program is narrowly tailored in accordance with applicable law; • To ensure that only firms that fully meet 49 CFR Part 26 eligibility standards are permitted to participate as DBEs; • To help remove barriers to the participation of DBEs in DOT-assisted contracts; and • To assist the development of firms that can compete successfully in the market place outside the DBE Program. The Director of Public Works has been delegated as the DBE Liaison Officer. In that capacity, The Director of Public Works 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 of San Luis Obispo in its financial assistance agreements with the California Department of Transportation (Caltrans). City of San Luis Obispo has disseminated this policy statement to the City Council and all 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 by publishing this statement in general circulation, minority-focused and trade association publications. III Nondiscrimination (§26.7) City of San Luis Obispo 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. G4 City of San Luis Obispo Disadvantaged Business Enterprise Program Page 2-13 Revised June 2004 Attachment 1 -3 In administering its DBE program, the City of San Luis Obispo 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.. IV DBE Program Updates (§26:21) City of San Luis Obispo will continue to cavy out this program until the City of San Luis Obispo has established a new goal setting methodology or until significant changes to this DBE. Program are adopted. City of San Luis Obispo will provide to Caltrans a proposed overall goal and goal setting methodology and other program updates by June 1 of every year. V Quotas (§26.43) City of San Luis Obispo will not use quotas or set asides in any way in the administration of this DBE program. VI DBE Liaison Officer (DBELO) (§26.45) City of San Luis Obispo has designated the following individual as the DBE Liaison Officer: Michael McCluskey, 955 Morro Street, San Luis Obispo, CA. 93401, 805-781-7200, mmcclusk.slocity.org . In that capacity, Michael McCluskey is responsible for implementing all aspects of the DBE program and ensuring that the City of San Luis Obispo complies with all provisions of 49 CFR Part 26. This is available on the Internet at osdbuweb.dot.gov/main.cfm. Mr. McCluskey has direct, independent access to the City Administrative Officer concerning DBE program matters. The DBELO administers the Public Works Department that has 5 engineers and a transit manager available to devote a part of their time to this program. An organization chart displaying the DBELO's position in the organization is found in Exhibit 1 to this program. The DBELO is responsible for developing, implementing and monitoring the DBE program, in coordination other appropriate officials. Duties and responsibilities include the following: 1. Gathers and reports statistical data and other information as required. 2. Reviews third parry contracts and purchase requisitions for compliance with this program. 3. Works with all departments to set overall annual goals. 4. Ensures that bid notices and requests for proposals are available to DBE's 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) and monitors results. 6. Analyzes City of San Luis Obispo's progress toward goal attainment and identifies ways to improve progress. 7. Participates in pre-bid meetings. 8. Advises the CEO/goveming body on DBE matters and achievement. 9. Participates with the legal counsel and project director to determine contractor compliance with good faith efforts. 10.Provides DBEs with information and assistance in preparing bids, obtaining bonding and insurance. City of San Luis Obispo Disadvantaged Business Enterprise Program Page 3-13 Revised June 2004 Attachment 1 11.Plans and. participates in DBE training seminars. 12.Provides outreach to DBEs and community organizations to advise them of opportunities. VII Federal Financial Assistance Agreement Assurance (§26.13) City of San Luis Obispo will sign the following assurance, applicable to all DOT-assisted contracts and their administration as part of the program supplement agreement for each project: 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 the requirements 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 approved 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.). VIII DBE Financial Institutions It is the policy of the City of San Luis Obispo 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 contracts to make use of these institutions. Information on the availability of such institutions can be obtained from the DBE Liaison Officer. The Caltrans Disadvantaged Business Enterprise Program may offer assistance to the DBE Liaison Officer. IX Directory (§26.31) City of San Luis Obispo will refer interested persons to the DBE directory available from the CalTrans Disadvantaged Business Enterprise Program website at www.dot.ca.gov/hq/bep. X Overconcentration (§26.33) City of San Luis Obispo has not identified any types of work in DOT-assisted contracts that have an overconcentration of DBE participation. If in the future City of San Luis Obispo identifies the need to address overconcentration, measures for addressing overconcentration will be submitted to the DLAE for approval. City of San Luis Obispo Disadvantaged Business Enterprise Program Page 473 Revised June 2004 Attachment 1 -5 Xl Business Development Programs (§26.35) City of San Luis Obispo does not have a business development or mentor-protege program. If the City of San Luis Obispo identifies the need for such a program in the future, the rationale for adopting such a program and a comprehensive description of it will be submitted to the DLAE for approval. XII Required Contract Clauses (§§26.13, 26.29) Contract Assurance City of San Luis Obispo ensures that the following clause is placed in every DOT-assisted contract and subcontract: The contractor or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR part 26 in the award and administration of DOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as recipient deems appropriate. Prompt Payment City of San Luis Obispo ensures that the following clauses or equivalent will be included in each DOT-assisted prime contract: Prompt Progress Payment to Subcontractors A prime contractor or subcontractor shall pay a subcontractor not later than 10 days of receipt of each progress payment in accordance with the provision in Section 7108.5 of the California Business and Professions Code concerning prompt payment to subcontractors. The 10 days is applicable unless a longer period is agreed to in writing. Any violation of Section 7108.5 shall subject the violating contractor or subcontractor to the penalties, sanctions and other remedies of that section. Federal regulation 49 CFR 26.29 requires that any delay or postponement of payment over 30 days of receipt of each payment may take place only for good cause and with the agency's prior written approval. These requirements shall not be construed to limit or impair any contractual, administrative or judicial remedies otherwise available to the prime contractor or subcontractor in the event of a dispute involving late payment, or nonpayment by the prime contractor, deficient subcontract performance or noncompliance by a subcontractor. This provision applies to both DBE and no-DBE prime contractor and subcontractors. Prompt Payment of Funds Withheld to Subcontractors No retainage will be withheld by the agency from progress payments due the prime contractor. Retainage by the prime contractor or subcontractors is prohibited, and no retainage will be held by the prime contractor from progress payments due subcontractors. Any violation of this provision shall subject the violating prime contractor or subcontractor to the penalties, sanctions and other remedies specified in Section 7108.5 of the California Business and Professions Code. These requirements shall not be construed to limit or impair any i+4�Q City of San Luis Obispo Disadvantaged Business Enterprise Program Page 5-11 Revised June 2004 Attachment 1 -6 contractual, administrative, or judicial remedies otherwise available to the prime contractor or subcontractor in the event of a dispute involving late.payment or nonpayment by the prime contractor, deficient subcontract performance, or noncompliance by a subcontractor. This provision applies to both DBE and non-DBE prime contractors and subcontractors. XIII Monitoring and Enforcement Mechanisms (§26,37) The City of San Luis Obispo will assign a Resident Engineer (RE) or Contract Manager to monitor and track actual DBE participation through contractor and subcontractor reports of payments in accordance with the following: After Contract Award After the contract award the City of San Luis Obispo will review the award documents for the portion of items each DBE and first tier subcontractor will be performing and the dollar value of that work. With these documents the RE/Contract Manager will be able to determine the work to be performed by the DBEs or subcontractors listed. Preconstruction Conference A preconstruction conference will be scheduled between the RE and the contractor or their representative to discuss the work each DBE subcontractor will perform. Before work can begin on a subcontract, the local agency will require the contractor to submit a completed "Subcontracting Request," Exhibit 16-B of the LAPM or equivalent. When the RE receives the completed form it will be checked for agreement of the first tier subcontractors and DBEs. The RE will not approve the request when it identifies someone other than the DBE or first tier subcontractor listed in the previously completed "Local Agency Bidder DBE Information," Exhibit 15-G. The."Subcontracting Request' will not be approved until any discrepancies are resolved. If an issue cannot be resolved at that time, or there is some other concern, the RE will require the contractor to eliminate the subcontractor in question before signing the subcontracting request. A change in the DBE or first tier subcontractor may be addressed during a substitution process at a later date. Suppliers, vendors, or manufacturers listed on the "Local Agency Bidder DBE Information" will be compared to those listed in the completed Exhibit 16-1 of the LAPM or equivalent. Differences must be resolved by either making corrections or requesting a substitution. Substitutions will be subject to the Subletting and Subcontracting Fair Practices Act (FPA). Local agencies will require contractors to adhere to the provisions within Subletting and Subcontracting Fair Practices Act (State Law) Sections 4100-4144. FPA requires the contractor to list all subcontractors in excess of one half of one percent (0.5%) of the contractor's total bid or$10,000, whichever is greater. The statute is designed to prevent bid shopping by contractors. (For Street and Highway Projects, subcontractors performing less than $10,000 worth of work need not be mentioned.) The FPA explains that a contractor may not substitute a subcontractor listed in the original bid except with the approval of the.awarding authority. ( q City of San Luis Obispo Disadvantaged.Business Enterprise.Program Page 6-13 Revised June 2004 Attachment 1 The RE will give the contractor a blank Exhibit 17-F, "Final Report Utilization of Disadvantaged Business Enterprises, First Tier Subcontractors" and will explain to them that the document will be required at the end of the project, for which payment can be withheld, in conformance with the contract. Construction Contract_Monitoring The RE will ensure that the RE's staff (inspectors) know what items of work each DBE is. responsible for performing. Inspectors will notify the RE immediately of apparent violations. When a firm other than the listed DBE subcontractor is found performing the work, the RE will notify the contractor of the apparent discrepancy and potential loss of payment. Based on the contractor's response, the RE will take appropriate action: The DBE Liaison Officer will perform a preliminary investigation to identify any potential issues related to the DBE subcontractor performing a commercially useful function. Any substantive issues will be forwarded to the Caltrans Disadvantaged Business Enterprise Program. If the contractor fails to adequately explain why there is a discrepancy, payment for the work will be withheld and a letter will be sent to the contractor referencing the applicable specification violation and the required withholding of payment. If the contract requires the submittal of a monthly truck document, the contractor will be required to submit documentation to the RE showing the owner's name; California Highway Patrol CA number, and the DBE certification number of the owner of the truck for each truck used during that month for which DBE participation will be claimed. The trucks will be listed by California Highway Patrol CA number in the daily diary or on a separate piece of paper for documentation. The numbers are checked by inspectors regularly to confirm compliance. Providing evidence of DBE payment is the responsibility of the contractor. Substitution When a DBE substitution is requested, the RE/Contract Manager will request a letter from the contractor explaining why substitution is needed. The RE/Contract Manager must review the letter to be sure names and addresses are shown, dollar values are included, and reason for the request is explained. If the RE/Contract Manager agrees to the substitution, the RE/Contract Manager will notify, in writing, the DBE subcontractor regarding the proposed substitution and procedure for written objection from the DBE subcontractor in accordance with the Subletting and Subcontracting Fair Practices Act. If the contractor is not meeting the contract goal with this substitution, the contractor must provide the required good faith effort to the RE/Contract Manager for local agency consideration. If there is any doubt in the RE/Contract Manager's mind regarding the requested substitution, the RE/Contract Manager may contact the DLAE for assistance and direction. Record Keeping and Final Report Utilization of Disadvantaged Business Enterprises The contractor shall maintain records showing the name and address of each first-tier subcontractor. The records shall also show: City of San Luis Obispo Disadvantaged Business Enterprise Program Page 7-13 Revised June 2004 Attachment 1 -8 1. The name and business address, regardless of tier, of every DBE subcontractor, DBE vendor of materials and DBE trucking company. 2. The date of payment and the total dollar figure paid to each of the firms. 3. The DBE prime contractor shall also show the date of work performed by their own forces along with the corresponding dollar value of the work claimed toward DBE goals. When a contract has been completed the contractor will provide a summary of the records stated above. The DBE utilization information will be documented on Exhibit 17-F and will be submitted to the DLAE attached to the Report of Expenditures. The RE will compare the completed Exhibit 17-F to the contractor's completed Exhibit 15-G and, if applicable, to the completed Exhibit 16-13. The DBEs shown on the completed Exhibit 17-F should be the same as those originally listed unless an authorized substitution was allowed, or the contractor used more DBEs and they were added. The dollar amount should reflect any changes made in planned work done by the DBE.. The contractor will be required to explain in writing why the names of the subcontractors, the work items or dollar figures are different from what was originally shown on the completed Exhibit 15-G when: • There have been no changes made by the RE. • The contractor has not provided a sufficient explanation in the comments section of the completed Exhibit 17-F. The explanation will be attached to the completed Exhibit 17-F for submittal. The RE will file this in the project records. The local agency's Liaison Officer will keep track of the DBE certification status on the Internet at www.dot.ca.gov/hq/bep and keep the RE informed of changes that affect the contract. The RE will require the contractor to act in accordance with existing contractual commitments regardless of decertification. The DLAE will use the PS&E checklist to monitor the City of San Luis Obispo's commitment to require bidders list information to be submitted to the City of San Luis Obispo from the awarded prime and subcontractors as a means to develop a bidders list. This monitoring will only take place if the bidders list information is required to be submitted as stipulated in the special provisions. City of San Luis Obispo will bring to the attention of the DOT through the DLAE any false, fraudulent, or dishonest conduct 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 §26.109. City of San Luis Obispo also will consider similar action under our own legal authorities, including responsibility determinations in future contracts. XIV Overall Goals (§26.45) Amount of Goal City of San Luis Obispo Disadvantaged Business Enterprise Program Page 8-13 Revised June 2004 City of San Luis Obispo's overall goal for the Federal fiscal year FY 2005 is 7% of the Federal financial assistance in DOT-assisted contracts. See Exhibit 3 Project and Annual Overall Goals. Methodology Step One- Bidders list The City developed a listing of the projects expected to start during the next fiscal year. The projects were broken down into certain typical subcontract work types. The City's Bidders List information collected from Federally Funded projects was then summarized for use. In the case of the bus wash equipment, for which neither the City or other local agencies had collected information, a review of available suppliers was made to determine the availability of DBE suppliers and the number used to determine the DBE goal for that portion of the work. Step Two-Evidence of ability of DBE's to perform. The number of DBE's bidding/proposing the types of work under the project was compared to the total number of bidders/proposers for the work types. A ratio of DBE's to total bidders was used to establish the individual project goals. A summation of the total number of dollars of work identified for individual projects for DBE's was compared to the total number of dollars for all work. The relationship shows that DBE's should be able to perform 7% of the federal dollar value of the work See Exhibit 2 Goal Establishment Methodology. Breakout of Estimated Race-Neutral and Race-Conscious Participation The City will attempt to encourage DBE participation in its bids by including references to the CalTrans DBE directory in its notice to bidders.. Plans and specifications will routinely be mailed to plans houses within the County and to adjacent Counties, Monterey, Santa Barbara, Ventura, Los Angeles, Contra Costa, Fresno, Tulare and Kern. Plans will also be sent to Bid America.com for display on the intemet and made available on the City's web site for no cost downloading. Experience indicates this will not result in a significant DBE participation. Process Starting with the Federal fiscal year 2001, the amount of overall goal, the method to calculate the goal, and the breakout of estimated race-neutral and race-conscious participation will be required annually by June 1 in advance of the Federal fiscal year beginning October 1 for DOT-assisted contracts. Submittals-will be to the CalTrans' DLAE. An exception to this will be if FTA or FAA recipients are required by FTA or FAA to submit the annual information to them or a designee by another date. FHWA recipients will follow this process: Once the DLAE has responded with preliminary comments and the comments have been incorporated into the draft overall goal information, the City of San Luis Obispo will publish a notice of the proposed overall goal, informing the public that the proposed goal and its rationale are available for inspection during normal business hours at the City of San Luis City of San Luis Obispo Disadvantaged Business Enterprise Program n f ,JA Page 9-13 Revised June 2004 �/`t Attachment 1 -I o Obispo's principal office for 30 days following the date of the notice, and informing the public the City of San Luis Obispo will accept comments on the goals for 45 days following the date of the notice. Advertisements in newspapers, minority focus media, trade publications, and websites will be the normal media to accomplish this effort. The notice will include addresses to which comments may be sent and addresses (including offices and websites) where the proposal may be reviewed. The overall goal resubmission to the Caltrans DLAE, will include a summary of information and comments received during this public participation process and City of San Luis Obispo's responses. This will be due by September 1 to the Caltrans DLAE. The DLAE will have a month to make a final review so the City of San Luis Obispo may begin using the overall goal on October 1 of each year. XV Contract Goals (§26.51) City of San Luis Obispo will use contract goals to meet any portion of the overall goal City of San Luis Obispo does not project being able to meet by the use of 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 the overall goal that is not projected to be met through the use of race-neutral means. Contract goals will be established only on those DOT-assisted contracts that have subcontracting possibilities. Contract goals need not be established 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). The contract work items will be compared with eligible DBE contractors willing to work on the project. A determination will also be made to decide which items are likely to be performed by the prime contractor and which ones are likely to be performed by the subcontractor(s). The goal will then be incorporated into.the contract documents. Contract goals will be expressed as a percentage of the total amount of a DOT-assisted contract. XVI Transit Vehicle Manufacturers (§26.49) If DOT-assisted contracts include transit vehicle procurements, City of San Luis Obispo will require each transit vehicle manufacturer, as a condition of being authorized to bid or propose on transit vehicle procurements, to certify that it has complied with the requirements of 49 CFR Part 26, Section 49. City of San Luis Obispo will direct the transit vehicle manufacturer to the subject requirements located on the Internet at http://osdbuweb.dbt.gov/programs/dbe/dbe.htm. XVII Good Faith Efforts (§26.53) Information to be Submitted City of San Luis Obispo treats bidders'/offerors' compliance with good faith effort requirements as a matter of responsiveness. A responsive proposal.is meeting all the requirements of the advertisement and solicitation. City of San Luis Obispo Disadvantaged Business Enterprise Program Page 10-13 Revised June 2004 ( Attachment 1 -11 J; Each solicitation for which a contract goal has been established will require the bidders/offerors to submit the following information to 955 Morro Street, San Luis Obispo, CA. 93401 no later than 4:00 p.m. on or before the fourth day, not including Saturdays, Sundays and legal holidays, following bid opening: 1. The names and addresses of known 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 participation 4. Written and signed documentation of commitment to use a DBE subcontractor whose participation it submits to meet a contract goal; 5. Written and signed confirmation from the DBE that it is participating in the contract as provided in the prime contractor's commitment; and 6. If the contract goal is not met, evidence of good faith efforts. Demonstration of Good Faith-Efforts 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 which is attached. The following personnel are responsible for determining whether a bidder/offeror who has not met the contract goal has documented sufficient good faith efforts to be regarded as responsive: Director of Public Works. City of San Luis Obispo will ensure that all information is complete and accurate and adequately documents the bidder/offeror's good faith efforts before a commitment to the performance of the contract by the bidder/offeror is made. Administrative Reconsideration Within 10 days of being informed by City of San Luis Obispo that it is not responsive 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: City Administrative Officer, 990 Palm Street, San Luis Obispo, CA. 93401, 805-781-7100. The reconsideration official will not have played any role in the original determination that the bidder/offeror did not make 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 the reconsideration official to discuss the issue of whether it met the goal or made adequate good faith efforts to do. The City of San Luis Obispo 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 Caltrans, FHWA or the DOT. C4- [� City of San Luis Obispo Disadvantaged Business Enterprise Program Page 11=13 Revised June 2004 Attachment 1 —1Z Good Faith Efforts when a DBE.is Replaced on a Contract r City of San Luis Obispo 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. The prime contractor is required to notify the RE immediately of the DBE's inability or unwillingness to perform and provide reasonable documentation. In this situation, the prime contractor will be required to obtain City of San Luis Obispo prior approval of the substitute DBE and to provide copies of new or amended subcontracts, or documentation of good faith efforts. If the contractor fails or refuses to comply in the time specified, City of San Luis Obispo 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. XVIII Counting DBE Participation (§26.55) City of San Luis Obispo will count DBE participation toward overall and contract goals as provided in the contract specifications for the prime contractor, subcontractor, joint venture partner with prime or subcontractor, or vendor of material or supplies. See the CalTrans' Sample Boiler Plate Contract Documents previously mentioned. Also, refer to XI, A. "After Contract Award." XIX Certification (§26.83(a)) City of San Luis Obispo ensures that only DBE firms currently certified on the CalTrans' directory will participate as DBEs in our program. XX Information Collection and Reporting Bidders List The City of San Luis Obispo will create and maintain a bidders list, consisting of information about all DBE and non-DBE firms that bid or quote on its DOT-assisted contracts. The bidders list will include the name, address, DBE/non-DBE status, age, and annual gross receipts of firms. Monitoring Payments to DBEs Prime contractors are required 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 of San Luis Obispo, Caltrans or DOT. This reporting requirement also extends to any certified DBE subcontractor. Payments to DBE subcontractors will be reviewed by the City of San Luis Obispo to ensure that the actual amount paid to DBE subcontractors equals or exceeds the dollar amounts stated in the schedule of DBE participation. of [�, IC City of San Luis Obispo Disadvantaged Business Enterprise Program Page 12-13 Revised June 2004 Attachment 1 -13 Reporting to CalTrans City of San Luis Obispo - Final utilization of DBE participation will be reported to the DLAE using Exhibit 17-F of the CalTrans' LAPM. Confidentiality City of San Luis Obispo will safeguard from disclosure to third parties information that may reasonably be regarded as confidential business information, consistent with Federal, state, and local laws. ATTEST: CITY OF SAN LUIS OBISPO,A Municipal Corporation By: Acting City Clerk Mayor Date: This Disadvantaged Business Enterprises Program is accepted by: Caltrans District Local Assistance Engineer Date: Exhibits: 1 —City Organization 2 —Goal Establishment Methodology 3 — Project and Overall Annual Goal glstale&federal programe\ciry dbe program\2004 pWam\2004 prcgram.dcc ^ r t City of San Luis Obispo Disadvantaged Business Enterprise Program I/vP.1la1lgge 13-13 Revised June 2004 Exhibit 1 -1 CITY ORGANIZATwN City Council Legislative Body & Awarding Body City Administrative Officer Reconsideration Official & Authorized Agent for Annual Program Adoption Public Works Director DBE Liaison Officer Michael D. McCluskey Deputy Public Works Director Deputy Public Works Director City Engineer Transportation Division Professional Staff: Professional Staff: 5 Engineers Transit Manager 3 Engineering Technicians Transportation Planner 2 Traffic Engineers rV I -I�l City of San Luis Obispo Disadvantaged Business Enterprise Program Revised June 2003 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 fro 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. City of San Luis Obispo Disadvantaged Business Enterprise Program Appendix A to Part 26 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. D. (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 may be some 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 faith efforts. Prime 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 based on 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 City of San Luis Obispo Disadvantaged Business Enterprise Program ��(,r'q Appendix A to Part 26 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. City of San Luis Obispo Disadvantaged Business Enterprise Program Appendix A to Part 26 Exhibit 2-1 Goal Establishment Methodology Step 1: ■ Develop a list of projects and work types expected to be advertised this Federal fiscal year (Oct 1 — Sept 30) Step 2: ■ Develop a list of bidders from the City's Bidder List Database for previous Federally Funded projects. (See "Bidders List" attached) Step 3: ■ Develop a list of bidders from local knowledge, from other agencies and from the Caltrans DBE web site query for those projects expected to be done for which we have no previous bidders. (See "Other bidders" attached) Step 4: (See "2004-05 Projects" attached) ■ Break the upcoming projects into work types. ■ Estimate the cost of the individual components. ■ Develop a ratio of the number of DBE's which do this type of work to the total number of bidders for this type of work from the information developed in Steps 2 - 3. ■ Multiply that ratio by the dollar value for the work to obtain the DBE dollar share. ■ Divide the DBE dollar share by the total Federal Dollars for the project to get the project goal. ■ Divide the sum of the DBE dollar shares in each project by the total Federal Dollars for all the projects to get the Overall DBE Annual Goal. ■ Divide the sum of the DBE dollar shares, for those work items where DBE's routinely perform the work on contracts with no goals, by the total Federal Dollars for all the projects to get the race neutral component of the goal. g ls=&federal programskiry dhe progam12006 progrem%M methodoloW.doc 4" J Q o Lb r a � e m � a o � N x of c m 'w 0 C7 v 0 c 0 m E N U U cm LII o m m C m m m U C p] -° w E ca m n CD E a E-o c CC ca m m ¢ co F m 0 v = rn 0 w iE — m t 2 m L 3 0 6 o IL Li U � 0 U- Li O O O r r Q r O CJ 0 0 0 O O CV O r Ln M M CO O r W C CO CLO a Co Ln C7 M r co Ln co Co �' CV r n (D It n CO to N CO co C r M r r m m C M F O m m c m c d E m c Y m m C O C U m c m 'c o (D m N N C O .� C C W .0 m U - m C -O LU .O C 'M ._ m Ct m N .. 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C 7 m F ¢ m U E > v m m u cr ar y -a3 aCf) Ln �f/uE{r„atA f Exhibit 3 DBE Goal Establishment by Project October 2004-2005 Federal Projects #of business,tLj DBE to Total DBE$ Project Project Federal$1 DBE's I Total I Ratio Share Goal Mid-Higuera Widening 0% --Acquisition $675,000 0 1 0% $0 Advertising* 6% Transit System $0 2 35 6%- $0 Smart Card 40% Custom Programming $5,000 2 5 40% $2,000 Vehicle Replacement 0% --- Bus $275,000 0 3 0% $0 Bob Jones 15% --- Paving $400,000 3 16 19% $75,000 -- Landscape $100,000 0 7 0% $0 Bridge Rehab/Replacement 12% -- Design $160,000 0 3 0% $0 -- Environmental** $200,000 1 4 25% $50,000 -- Acquisition $48,000 0 1 0% $0 Total Federal Dollars: $1,863,000 Total DBE Dollars: $127,000 DBE Annual Goal 7% =DBE Dollars/Federal Dollars 3% Race Neutral " 4% Race Conscious *This is a no cost to the City contract where consultant will be paid by the advertisers 04 Goal Setfing.xls : 2004-05 Projects 81512004 : 1.32 PM Page i of 1