HomeMy WebLinkAbout08/17/2004, C4 - CITY DISADVANTAGED BUSINESS ENTERPRISE PROGRAM council A gust 17, 2004
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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
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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.
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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.
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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
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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
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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
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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
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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.
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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.
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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
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