HomeMy WebLinkAboutState of California, Department of Transportation (CalTrans) - 2006-06-05 V V SI tqt 4
P11
6
Council/Agency Meeting Held . Ob
y Deferred/Continued to: .,'-*' `
Approved . O Conditionally Approved 0 Denied Ci Cl rk'S ignat r
Council Meeting Date: 6/5/2006fi Departure Number:' PW 06-033
CITY OF HUNTINGTON BEACH
. . REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: HONORABLE MAYOR AND CITY UNCIL MEMBERS
SUBMITTED BY: PEN K—OcP�CLReET I&- ITY A INISTRATO
PREPARED BY: ROBERT F. BEARDSLEY, PE, DIRECTOR 0 PUBLIC WOR S
. SUBJECT: Disadvantaged Business Enterprise (DBE) Race-Neutral
Implementation Agreement and Annual Submittal'Form
Statement of Issue;Funding Source, Recommended Action,Alternative Action(s),Analysis,-Environmental Status,Attachment(s)
-Statement of Issue: The City's. execution of the DBE Race-Neutral Implementation
Agreement and Annual Submittal Form is necessary to remain eligible to receive Federal-
aid funding for transportation related projects.
Funding Source: No funding source is necessary for this action.
Recommended Action: Motion to.
Authorize the Director of Public Works, to execute the attached' Disadvantaged Business'
Enterprise (DBE) Race-Neutral Implementation Agreement and Annual Submittal Form.
Alternative Action(s): Deny the recommended action and indefinitely suspend the
C.ity's-e,ligibility to participate in federally funded transportation projects.
a
REQUEST FOR ACTION
MEETING DATE: 6/5/2006 DEPARTMENT ID NUMMBER:PW 06-033'
Analysis;, On November 20, 2000, the City Council authorized the Director of Public
Works to execute the Disadvantaged 'Business Enterprise (DBE) Program to remain eligible to receive Federal grant funds for transportation related projects. in .each of the years
following,this action, Council has adopted the necessary DBE, program updates, including
the submittal of the City's overall annual DBE participation goal, .On May 2, 2006; Public
Works staff was informed of a Statewide change in the implementation' of the DBE
program. 'Due to a recent court decision and direction from both the Federal Highway
Administration (FHWA) and the State of California Department of Transportation (Caltrans),,
all cities intending to participate in Federally funded transportation projects must utilize-the
prescribed Race-Neutral methodology in establishing their overall annual DBE goal. '
Furthermore, both the attached DBE Race-Neutral Implementation Agreement and the
Annual, Submittal form are required to be executed by the City and returned to Caltrans,no
later than June 15, 2006. -Failure to meet this deadline will result in an indefinite
suspension of the processing of the City's Federally-funded transportation projects through,
Caltrans:
Public Works Commission Action: Not necessary for this action.
Environmental-Status: Not applicable.
Attachment(s):
City Clerk's
Page Number No. Description
.a.n 1. Disadvantaged Business Enterprise (DBE) Race-Neutral
Implementation Agreement
' 2. Local Agency DBE Annual Submittal Form
GAR C A\2006\06-033 June 5'Claudio(DBE Race-Neutral -2-
5/16/2006 5:29 PM
ATTACHMENT # 1 ' '
Local Assistance,Pr6cedures Ma EXHIBIT 9-A
Disadvantaged Business Enterprise Race-Nentral .
Implementation Agreement for Local Agencies
Exhibit 9-A Disadvantaged Business Enterprise Race-Neutral Implementation Agreement for
Local Agencies
DISADVANTAGED BUSINESS ENTERPRISE
RACE-NEUTRAL
IMPLEMENTATION AGREEMENT
FOR
LOCAL AGENCIES
Page 9-27
LPP 06-01 May 1,2006
EXHIBIT 9-A Local tance Procedures Manual
Disadvantaged Business Enterprise Race-Neutral
Implementation Agreement for Local Agencies
DISADVANTAGED BUSINESS ENTERPRISE RACE-NEUTRAL IMPLEMENTATION
AGREEMENT
For'tle City of Huntington Beach,,hereinafter referred to-as "RECIPIENT."
I ' Definition of Terms
t
The"terms used in this agreement have the meanings defined in 49 CFR§ 26.5.
II OBJECTIVE/POLICY.STATEMENT(§26/1.26/23) _
The RECIPIENT intends to receive federal financial assistance from the U. S. Department of Transportation
(DOT)through the California Department of Transportation(Caltrans),and as a condition of receiving this
assistance, the RECIPIENT will sign the California Department of Transportation's Disadvantaged Business
Enterprise Implementation Agreement (hereinafter referred to as Agreement). The RECIPIENT agrees to
implement the State of California, Department of Transportation Disadvantaged Business Enterprise(DBE)
Program Plan(hereinafter referred to as the DBE Program Plan)as it pertains to local agencies. The DBE,
Program Plan is based,on U.S. Department of Transportation(DOT), 49 CFR, Part 26 requirements.
It is the policy of.the RECIPIENT to ensure that DBEs, as defined in Part 26, have an equal opportunity to receive
and.participate'n DOT-assisted contracts. It is also their policy:
• To ensure'nondiscrimination in the award and administration of DOT-assisted contracts.
• To create a level playing field on which DBE's can compete fairly for DOT-assisted contracts.
• To ensure that their annual overall DBE participation percentage 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. i
• :To.help remove barriers to the participation of DBEs in DOT-assisted contracts.
• To assist the development of firms that can compete successfully in the market place outside the DBE
Program.
III Nondiscrimination (§26.7)
RECIPIENT"will never exclude any person from participation in,deny any person the benefits of;or otherwise
discriminate against-anyone in connection with the award and performance of any contract covered by 49 CFR,
Part 26 on the basis of race,color, sex, or national origin. In administering the local agency components of the i
DBE Program.Plan' the RECIPIENT 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 Plan with respect to individuals of a particular race, color, sex, or national origin.
Page.9-28
May 1,,2006 LPP 06-01
Local"Assistance Procedures Ma • EXHIBIT 9-A
Disadvantaged Business Enterprise Race-Neutral t
Implementation Agreement for Local"Agencies ;
IV 'Annual DBE Submittal Form (§26.21) j
The RECIPIENT will provide to the Caltrans' District Local Assistance Engineer(DLAE)a completed DBE l
Annual Submittal Form by June 1 of each year for the following Federal Fiscal Year(FFY).Thisform includes
an Annual Anticipated DBE Participation Level(AADPL), methodology for establishing the AADPL,the name,
phone number, and electronic mailing address'of the designated DBELO,and the choice of Prompt Pay Provision
to-be,used by the RECIPIENT for the following FFY:
'V Race-Neutral Means of Meeting the Annual DBE Goal (§26.51)
RECIPIENT.will assist Caltrans to achieve its Overall Statewide DBE Goal by race neutral means.that may
-include,but are not limited.to the following: {
1.. Advertising solicitations, scheduling bidding periods and opening times, and packaging quantities, l
specifications, and delivery schedules in ways that facilitate DBE and other small business participation.
2. Providing assistance to DBE and small businesses in overcoming limitations such as inability'to obtain F
bonding or financing(e.g., by such means as simplifying the bonding process, reducing bonding t
r. requirements,and providing services to help DBEs and other small businesses obtain bonding and
. d
financing).,
3 -,•.Providing technical assistance and other services to DBE and small businesses.
2
- l
4. Providing information and communication programs on contracting procedures and specific contract
opportunities(e.g., ensuring the inclusion of DBEs and other small businesses on recipient mailing lists of f
bidders; ensuring the dissemination to bidders on prime contracts of lists of potential subcontractors s'
including DBE'.s and small businesses;providing the information in languages other than English, where F
appropriate).
5., Implementing a supportive services program to develop and improve immediate and long-term business
management, record keeping, and financial and accounting capability for DBEs and other small businesses.
6.1 Providing services to help DBEs and other small businesses improve long-term development, increase.
opportunities to participate in a variety of kinds of work,handle increasingly significant projects, and
achieve-eventual self-sufficiency.
-
7. Establishing a program to assist new, start-up firms, particularly in fields in which DBE participation has
been historically low.
8: Assisting DBEs and other small businesses to develop their capability to utilize emerging technology and"
conduct business through electronic media. ,
9. Implementing or developing a mentor-prot6ge-program.
• i
' a
Page 9-29 .
i
LPP-06-01 May.l,2006
EXHIBIT 9-A Local stance Procedures Manual
Disadvantaged Business Enterprise Race-Neutral
Implementation Agreement for Local Agencies
VI: : Quotas(§26.43)
RECIPIENT will not use quotas or set-asides in any way in the administration of the local agency component of
-the DBE Program Plan.
VII DBE Liaison Officer(DBELO) (§26.25)
RECIPIENT has designated a DBE Liaison Officer. The DBELO is responsible for implementing the DBE 1
Program Plan, as it pertains to the RECIPIENT, and ensures that the RECIPIENT is fully and properly advised
concerning DBE Program Plan matters. [Specify resources available to the DBELO; e.g.,the DBELO has a staff
of two professional employees assigned to the DBE program on a full-time basis and two support personnel who
devote a portion of their time to the program.] The name, address, telephone number, electronic mail address, and
an organization chart displaying the DBELO's position in the organization are found in Attachment"A"to this {
Agreement, This information will be updated annually and included on the DBE Annual Submittal Form.
The DBELO is responsible for developing, implementing, and monitoring the RECIPIENT's requirements of the
DBE Program Plan:in coordination with other appropriate officials. Duties and responsibilities include the
following:
1. Gathers and reports statistical data and other information as required.
• i
2. Reviews third party contracts and purchase requisitions for compliance with this program.
3.-' Works with all departments to determine projected Annual Anticipated DBE Participation Level.
4. Ensures that bid notices and requests for proposals are made available to DBEs in a timely manner.
5 Analyzes DBE participation and identifies ways to encourage participation through race-neutral means.
6. Participates in pre-bid meetings. i
7. Advises,the CEO/governing body on DBE matters and DBE race-neutral issues. F
8..• Provides DBEs with information and recommends sources to assist in preparing bids, obtaining bonding
and insurance. }
9. Plans and participates'in DBE training seminars. i
10. Provides outreach to DBEs and community organizations to fully advise them of contracting opportunities.
: .
i
Page 9-30 '
May 1,2006 LPP 06-01
LocaLAssistance Procedures Male EXHIBIT 9 A
Disadvantaged Business Enterprise Race-Neutral
Implementation Agreement for Local Agencies' ;.
VIII Federal Financial Assistance Agreement Assurance (§26.13)
RECIPIENT will sign the following assurance, applicable to and to be included in 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.). [Note—this language is to be used verbatim, as it is stated in§26.13(a).] t
I,X DBE Financial Institutions (§26.27)
It is the policy of the RECIPIENT 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 DBELO. The Caltrans' i
Disadvantaged Business Enterprise Program may offer assistance to the DBELO.
-
X Directory (§26.31) .
RECIPIENT will refer interested persons to the Unified Certification Program DBE directory available from the {,
Caltrans Disadvantaged Business Enterprise Program's website at www.dot.ca.gov/hq/bep.
i
XI Required Contract Clauses (§§26.13,26.29)
RECIPIENT ensures that the following clauses or equivalent will be included.in each DOT-assisted prime
contract:
A. CONTRACY ASSURANCE
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.
[Note—This language is to be used verbatim, as is stated in§26.13(b). See Caltrans Sample Boiler Plate Contract
Documents on the Internet at www.dot.ca.gov/hq/L6calPrograms under"Publications."]
•
Y Page 9-31
LPP 06-01 May 1,2006
EXHIBIT 9-A Local 16tance Procedures Manual !
Disadvantaged Business Enterprise Race-Neutral '
Implementation Agreement for Local Agencies
-- - 3
B. PROMPT PAYMENT .
Prompt Progress Payment to Subcontractors
A prime contractor or subcontractor shall pay to any 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 delay or postponement of payment over 30-days may take
place only for good cause and with the agency's prior written approval. Any violation of Section 7108.5
shall subject the violating contractor or subcontractor to the penalties, sanctions, and other remedies of
that.Section. This requirement shall not be construed to limit or impair any contractual, administrative, or
judicial'remedies, otherwise available to the contractor or subcontractor in the event of a.dispute
involving late payment or nonpayment by the contractor, deficient subcontractor performance, and/or
noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors. t
Prompt Payment of Withheld Funds to Subcontractors.
The local agency shall include either(1), (2), or(3)of the following provisions [local agency equivalent
will need Caltrans approval] in their federal-aid contracts to ensure prompt and full payment of retainage
[withheld funds]to subcontractors in compliance with 49 CFR 26.29. ,
1. No retainage will be held by the agency from progress payments due to the prime contractor. Prime
contractors and subcontractors are prohibited from holding retainage from subcontractors. Any delay or
postponement of payment may take place only for good cause and with the agency's prior written
approval. Any violation.of these provisions shall subject the violating contractor or subcontractor to,the
penalties, sanctions, and other remedies specified in Section 7108.5 of the California Business and
Professions Code. This requirement shall not be construed to limit or impair any contractual,
administrative, or judicial remedies,otherwise available to the contractor or subcontractor in the event of
a dispute involving late payment or nonpayment by the contractor, deficient subcontractor performance,
and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.
2. No retainage will be held by the agency from progress payments due the prime contractor. Any
retainage kept by the prime contractor or by a subcontractor must be paid in full to the earning
subcontractor in 30-ays after the subcontractor's work is satisfactorily completed. Any delay or
postponement of payment may take place only for good cause and with the agency's prior written.
approval. Any violation of these provisions shall subject the violating contractor or subcontractor to the
penalties, sanctions, and remedies specified in Section 7108.5 of the California Business and Professions
Code. This requirement shall not be construed to limit or impair any contractual, administrative, or
judicial remedies,otherwise available to the contractor or subcontractor in the event of a dispute -
involving late payment or nonpayment by the contractor, deficient subcontractor performance,and/or
noncompliance by subcontractor. This clause applies to both DBE and non-DBE subcontractors.
Page 9-32
May 1,2006 LPP 06-01
Local Assistance Procedures Mae, EXHIBIT 9-A
Disadvantaged Business Enterprise Race-Neutral
Implementation Agreement for Local Agencies
3.. The agency shall hold retainage from the prime contractor and shall make prompt and regular
incremental acceptances of portions, as determined by the agency of the contract work and pay'retainage
to the prime contractor based on these acceptances. The prime contractor or subcontractor shall return all
monies withheld in retention from all subcontractors within 30-days after receiving payment for work
satisfactorily completed and accepted including incremental acceptances of portions of the contract work
by the agency. Any delay or postponement of payment may take place only for good cause and with the
" agency's prior written approval. Any violation of these provisions shall subject the violating prime
contractor to the penalties, sanctions, and other remedies specified in Section 7108.5 of the California
Business'Professions Code. This requirement shall not be construed to limit or impair any contractual,
administrative, or judicial remedies, otherwise available to the contractor or subcontractor in the event of:
a dispute involving late payment or nonpayment by the contractor;deficient subcontractor performance;
and/or noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.
` XIV Local Assistance-Procedures Manual
The RECIPIENT will advertise,award and administer DOT-assisted contracts in accordancewith the most
current published Local Assistance Procedures Manual(LAPM).
XV Bidders List(§26.11)
The RECIPIENT 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 the firms.
XVI Reporting to the DLAE- .
RECIPIENT will promptly submit a copy of the Local Agency Bidder-DBE Information(Exhibit 15-G or Exhibit
10-0 of the LAPM)to the DLAE at the time of execution of consultant or construction contract award. -
RECIPIENT will promptly submit a copy of the Final Utilization of DBE participation to the DLAE using
Exhibit 17-F of the LAPM immediately upon completion of the contract for each consultant or construction
contract:
XVII Certification (§26.83(a)) ;
RECIPIENT ensures that only DBE firms currently certified by the California Unified Certification Program will
participate as DBEs on DOT-assisted contracts.
Page 9-33
LPP 06-01 May 1.,2006
EXHIBIT 9-A Local ;tance Procedures Manual`
Disadvantaged Business Enterprise Race-Neutral '
Implementation Agreement for Local Agencies
XVIII,_Confidentiality
RECIPIENT will,safeguard from disclosure to third parties, information that may.reasonably be regarded as
confidential business information consistent:with federal, state, and local laws.
Date:
Di ector of Public,Yorks t
Phone Number: (714) 536-5431
Robert F. Beardsley, P.E. `.
This California Department of Transportation's Disadvantaged Business Enterprise Program Plan Implementation
Agreement is accepted by:
Date:
.[Signature of DLAE]
[Print Name of DLAE]
APPROVED-AS'TcgFO
. �.
4AURNEY
. T2s 5•�I`F-CSio
y
Distribution: (i)Original—DLAE DBE Race-neutral Implementation Agreement for Local Agencies(05/01/06)
{2)Copy-local agency after signing by DLAE
Page 9-34
May 1,2006 LPP 06-01
Local Assistanc"Procedures 1 EXHIBIT 9-A
Disadvann#ed Business Enterprise Race=Neutral.
Implementation Agreement for Local Agencies
ATTACHMENT «A„
City of Huntington Beach DBE Liaison Officer(DBELO)
.'Mr. Eric Charlonne, 2000 Main Street, Huntington Beach, CA 92648,office: (714) 536-5431;-fax: (714)374-
1573, email: echarlonnegsurfci -Worg
May 1,2006
ATTACHMENT #2
'Local Assistance Procedures foal ' EXHIBIT 9-B
DBE Annual Submittal Form
Exhibit 9-13 Local Agency DBE Annual Submittal Form
TO:. CALTRANS DISTRICT 12
District Local Assistance Engineer
The amount of the Annual Anticipated DBE Participation Level (AADPL)and methodology are presented
herein,.in`accordance with Title 4.9 of the Code of Federal Regulations, Part 26, and the State of California,
Department of Transportation Disadvantaged Business Enterprise(DBE)Program Plan.
The City of Huntington Beach;
submits our AADPL information. We have established an AADPL of 10.5 % for the Federal Fiscal Year
06/07,'beginning on October 1, 2006, and ending on September 30, 2007.
Methodolo;y
The City's overall annual DBE goal of 10.5%was established by using the goal set by another agency
(reference letter from Director Will Kempton, dated May 1, 2006).
Disadvantaged Business Enterprise Liaison Officer(DBELO)
Mr. Eric Charlonne, 2000 Main Street, Huntington Beach, CA 92648, office: (714) 536-5431, fax: (714) 3,74-
1573, email: echarlonnegsurfci hb.org
Prompt NY .
Federal regulation (49 CFR 26.29)requires one of three methods be used in federal-aid contracts to ensure
prompt and full payment of any retainage, kept by the prime contractor or subcontractor,to a subcontractor.
(Attached is a listing of the three methods. On the attachment,please designate which prompt payment
provision the local agency will use.)
Director of Public Works Date
Robert F. Beardsley (714)'536-5.431
-(Print Name of Local Agency Recipient's Phone Number
-Director of Public Works
Reviewed by Caltrans;
(Signature of Caltrans District Local Assistance Engineer [DLAE]) Date
Distribution: '(])`Original—DLAE DBE Annual Submittal Form(05/0006).
(2)_'Copy-local agency after signing by DLAE
Page 9-35
LPP 06-01 May 1,2006
.EXHIBIT 9-13 � Loca istance Procedures Manual
Local Agency DBE Annual Submittal Form
(Attachment)
Prompt Payment of Withheld Funds to Subcontractors
Federal regulation (49 CFR 26.29)requires one of the following three methods be used in federal-aid contracts to
ensure prompt and full payment of any retainage kept by the prime contractor or subcontractor to a subcontractor.
Please check the box of the method chosen by the local agency to ensure prompt and full payment of any
retainage.
0 No retainage will be held by the agency from progress payments due to the prime contractor-. Prime
contractors and subcontractors are prohibited from holding retainage from subcontractors. Any delay or
postponement of payment may take place only for good cause and with the agency's prior written approval.
Any violation of these provisions shall subject the violating contractor or subcontractor to the penalties,
sanctions, and other remedies specified in Section 7108.5 of the California Business and Professions Code.
This requirement shall not be construed to limit or impair any contractual, administrative, or judicial
remedies,otherwise available to the contractor or subcontractor in the event of a dispute involving late
payment or nonpayment by the contractor, deficient subcontractor performance, and/or noncompliance by a
subcontractor. This clause applies to both DBE and non-DBE subcontractors
No retainage will be held by the agency from progress payments due the prime contractor. Any retainage
•kept by the prime contractor or by a subcontractor must be paid in full to the earning subcontractor in 30-
days after the subcontractor's work is satisfactorily completed. Any delay or postponement of payment may
take place only for good cause and with the agency's prior written approval. Any violation of these
provisions shall subject the violating contractor or subcontractor to the penalties, sanctions, and remedies
specified in Section 7108.5 of the California Business and Professions Code. This requirement shall not be
construed to limit or impair any contractual, administrative, or judicial remedies, otherwise available to the
contractor or subcontractor in the event of a dispute involving late payment or nonpayment by.the
contractor,deficient subcontractor performance, and/or noncompliance by a subcontractor. This clause
applies to.both DBE and non-DBE subcontractors.
The agency shall hold retainage from the prime contractor and shall make prompt and regular incremental
acceptances of portions, as determined by the agency of the contract work and pay retainage to the prime
contractor based on these acceptances. The prime contractor or subcontractor shall return all monies
Withheld in retention from all subcontractors within 30 days after receiving payment for work satisfactorily
r completed and accepted including incremental acceptances of portions of the contract work by the agency.
Any delay or postponement of payment may take place only for good cause and with the agency's prior
,written approval. Any violation of these provisions shall subject the violating prime contractor to the
'penalties, sanctions, and other remedies specified in Section 7108.5 of the California Business Professions
Code. This requirement shall not be construed to limit or impair any contractual, administrative, or judicial
remedies otherwise available to the contractor or subcontractor in the event of. a dispute involving late
payment or nonpayment by the contractor; deficient subcontractor performance and/or noncompliance by a
subcontractor. This clause applies to both DBE and non-DBE subcontractors.
Page 9-36
May 1,•2006 LPP 06-01
STATE OF CALIFORNIA—BUSINESS TRANSPORTATION AND HOUSING AGENCY ARNOLD SCHWARZENEGGER Governor
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE DIRECTOR
1120 N STREET
P.O.BOX 942873
SACRAMENTO,CA 94273-0001 Flex your powerl
PHONE (916)654-5266 Be energy efcientl .
FAX (916)654-6608
TTY (9l6)653-4096
May 1,2006
Dear.Transportation Construction Community:
It is with regret that I send you this letter to inform you that the California Department of
Transportation(Department)must implement a wholly race neutral Disadvantaged Business
Enterprise (DBE)Program effective May 1,2006. The race-neutral DBE Program may be an
interim step,pending the results of an availability and a disparity study to guide administration
of the Department's DBE Program in accordance with 49 Code of Federal Regulations(CFR)
Part 26.
.This action comes as,a result of a recent decision from the Ninth Circuit Court of Appeals and-
guidelines promulgated by the Federal Highway Administration(FHWA) in response to that
decision. In short,the Court decision mandated that evidence of discrimination in the
transportation contracting industry must be documented in order to implement a DBE race-'
conscious program. In response to FHWA's direction following this decision,the Department
gathered and considered past disparity studies,comments and written evidence received
during a 90-day public comment period ending March 20, 2006. After careful analysis,
FHWA and the Department concluded the data lacks sufficient evidence to satisfy the strict
scrutiny and newly-established evidentiary standards set forth by the Ninth Circuit Court to
_ continue with a race-conscious DBE Program. Therefore,I have no choice,but to immediately
order a change in the administration of DBE participation in the Department's activities in
order to maintain both the constitutionality of the DBE Program and the continuation of
federal-aid funding. Effective May 1,2006,the Department and its subrecipients who receive
federal transportation assistance will implement a DBE race-neutral program.
The following factors led to the joint conclusion:
1. The data provided did not identify specific evidence of discrimination suffered by any of
the presumptively disadvantaged groups identified in 49 CFR Part 26.5 in the
transportation contracting industry in the State of California.
2. The available disparity studies conducted in California were limited in scope to a local
government agency or a project,geographically and chronologically limited, and did not
provide valid"statistical evidence"of discrimination in transportation contracting.
3. The anecdotal evidence related to transportation contracts in California could not be
verified.
"Caltrans improves mobility across California"
Transportation Construction Community
May 1, 2006
Page 2'
The overall California DBE goal to be achieved exclusively by race-neutral measures is
10.5 percent for projects funded through the FHWA and 4 percent for projects funded through
the Federal Transit Administration. The Department will identify an"Availability Advisory
Percentage"on individual federal-aid contracts, which is intended to assist bidders in
ascertaining DBE availability for items of work on the contract. The Department's contract
specifications will encourage bidders to utilize DBEs to aid the Department in achieving the
statewide DBE goal. .
Moving forward,the Department is in the process of executing a contract with a consultant to
complete an availability study and a disparity study. I anticipate the availability study will be
completed within four months of contract execution and the disparity study by May 2007.
When the studies are completed,the Department and FHWA will implement a program that
best serves our customers while fulfilling the requirements of the law as identified by the
Ninth Circuit Court of Appeals ruling.
During this interim period,be assured the DBE Program is still a viable and integral element
of California's construction program and is a requirement for receipt of federal transportation
assistance. I ask for your partnership to work with the Department to continue this program
by including DBEs in all our federal-assistance transportation"projects.
Sincerely,
4 J�
WILL KEMPTON
Director
"Caltrans improves mobility across California"
RCA ROUTING SH ET
INITIATING DEPARTMENT: Public works
SUBJECT: Disadvantaged Business Enterprise (DBE) Race-Neutral
Implementation Agreement and Annual Submittal Form
COUNCIL MEETING DATE: June 5, 2006
RCA ATTACHMENTS STATUS
Ordinance (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable ❑
Resolution (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable ❑
Tract Map, Location Map and/or other Exhibits Attached ❑
Not Applicable ❑
Contract/Agreement (w/exhibits if applicable) AttachedNot Applicable El
in full by the City Attorney)
Subleases, Third Party Agreements, etc. Attached ❑Not Applicable El(Approved as to form by City Attorney)
Certificates of Insurance (Approved b the CityAttorne Attached ❑
y y� Not Applicable ❑
Fiscal Impact Statement (Unbudget, over $5,000) Attached ElNot Applicable ❑
Bonds(If applicable) Attached ElNot Applicable ❑
Attached ❑
Staff Report (If applicable) Not Applicable ❑
Commission, Board or Committee Report If applicable) Attached ❑
p ( pp ) Not Applicable - ❑
Findings/Conditions for Approval and/or Denial Attached ❑
Not Applicable ❑
EXPLANATION FOR MISSING ATTACHMENTS .
REVIEWED RETURNED FORWARDED
Administrative Staff ( ) ( �),--
Assistant City Administrator Initial ( ) E )
City Administrator (Initial) ( )
City Clerk ( )
EXPLANATION'FOR RETURN,OF ITEM:
(Below Space For City Clerk's Use Only)
RCA Author: J.Claudio