HomeMy WebLinkAbout2005-01-18 City Council (4)Council approval of the DBE Program and goal is not required since there have been no material
changes to the City's DBE Program from the prior year and the 2004-05 DBE participation goal
has been established based upon strict criteria specified by the federal guidelines. Therefore,
staff is bringing the DBE Program to Council for informational purposes only.
DISCUSSION
Utilizing the federal regulations, staff has established a DBE participation goal of 14.0 percent in
2004-05. Data related to one potential DOT-funded project, the Intermodal Transit Center
Retrofit Project, was used in the development of this goal. This is the only DOT-funded project
that may go out to bid in 2004-05. It is expected that this project will have a federal funding
,amount of $247,507 and one category of work (environmental consulting) during the coming
year. To determine the 2004-05 DBE goal, staff identified the DBE firms in a seven-county
geographical area (Santa Clara, San Mateo, San Francisco, Alameda, Contra Costa, Santa Cruz
and Solano counties) available to perform work in this work category. Staff selected these seven
counties based upon the City's past experience with contractors willing to work on federally
funded projects. Utilizing the Caltrans database, the total number of DBE firms in this
designated work category was compared to the total available contractors. This analysis resulted
in the establishment of an overall DBE goal of 14.0 percent for federal fiscal year 2004-05 as
shown in Att~iChment B. This goal represents an increase from the prior year goal of2.5 percent.
On September 15, 2004, the proposed 14.0 percent participation goal was submitted to Caltrans
for its review and comment. On October 6, 2004, Caltrans provided preliminary approval of this
goal. Following approval, the proposed goal was published in local newspapers, inviting public
comment for 45 days. The comment period ended on December 4, 2004. No comments were
received, nor have any been received in the last several years.
Staff submitted the updated goal to Caltrans in order to remain eligible to receive funding from
the DOT on this project for federal fiscal year 2004-05, which begins on October 1, 2004 and
ends on September 30, 2005.
In accordance with the City's DBE Program, staff will continue to take the following actions to
meet or exceed this goal and to ensure that DBEs have an equal opportunity to participate in the
performance of the City's federally funded contracts. These actions include: 1) placing DBE
goals in bid solicitation documents; 2) making bid notices available to registered DBE
contractors; 3) placing DBE contract clauses in all DOT-funded contracts; and 4) monitoring
performance of both the prime contractor and any subcontractors in attaining DBE goals.
The City currently has the following DOT-funded projects underway:
Federal DBE DBE
Pro.iect Funding Goal Participation
Homer Avenue Undercrossing Project $2,701,000 3.0% 6.0%
Citywide Traffic Signal Upgrade Project $885,000 3.0% 3.9%
Embarcadero Pedestrian/Bike Bridge & Path $800,000 3.0% 3.5 %
Sand Hill Road Seismic Retrofit Project $69,226 2.5% 4.3%
CMR:131:05 Page 2 of3
Attachment A
DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM
CITY OF PALO ALTO
Policy Statement
It is the policy of the City or Palo Alto to provide to Disadvantaged Business Ehterprises
(DBE), as defined in Title 49, Code of Federal Regulations (CFR) Part §26.5, a
maximum practicable opportunity to compete for the award of contracts, which receive
financial assistance from the U.S. Department of Transportation (DOT). This policy,
which is fully described herein, constitutes the City's policy and commitment to take all
reasonable steps to utilize DBE firms in all program activities funded in whole or in part
by the U.S. Department of Transportation.
The City of Palo Alto, its contractors and subcontractors, which are the recipients of
Federal aid funds, agree to ensure that DBE firms have the maximum opportunity to
compete for and participate in the performance of Federally funded contracts and
subcontracts.
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r. Definition 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 Pplo Alto 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 Palo Alto has received Federal financial assistance
from the DOT, and as a condition of receiving this assistance, the City of Palo Alto will
sign an assurance that it will comply with 49 CFR Part 26.
It is the policy of the City of Palo Alto 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 non-discrimination 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 than can compete successfully in the
marketplace outside the DBE Program.
The Manager Purchasing and Contract Administration, has been delegated as the DBE
Liaison Officer (DBELO). In that capacity, the Manager Purchasing and Contract
Administration, 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 Palo Alto in its financial assistance
agreements with the California Department of Transportation (Caltrans).
The City of Palo Alto has disseminated this policy statement to the City Council and all
the components of its organization. It has also distributed this statement to DBE and
non-DBE business communities that perform work on DOT-assisted contracts by
publishing this statement in general circulation, minority-focused and trade association
publications.
III. Nondiscrimination (§26.7)
The City of Palo Alto will never exclude any person from partiCipation in, deny any
person the benefits of, or otherwise discriminate against anyone in connection with the
award ~nd performance of any contract covered by 49 CFR Part 26 on the basis of
race, color, sex, or national origin.
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In administering its DBE program, the City of Palo Alto 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)
The City of Palo Alto will continue to carry out this program until the City of Palo Alto
has established a new goal setting methodology or until significant changes to DBE
Program are adopted. The City of Palo Alto 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)
The City of Palo Alto will not use quotas or set-asides in any way in the administration of
this DBE program.
VI. DBE Liaison Officer (DBELO) (§26.25)
The City of Palo Alto has designated the following individual as the DBELO:
Johnella Walker
Manager, Purchasing and Contract Administration
City of Palo Alto
250 Hamilton Avenue
Palo Alto, California 94301
650-329-2300
johnella.walker@cityofpaloalto.org
In that capacity, Johnella Walker is responsible for implementing all aspects of the DBE
program and ensuring that the City of Palo Alto complies with all provisions of 49 CFR
Part 26. This is available on the Internet at www.osdbuweb.d6t.gov/main.cfm. Johnella
Walker has direct, independent access to the City Manager concerning DBE program
matters. The DBELO allocates a portion of her time to the program, designating roles to
other staff members as required. 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 with other appropriate officials. Duties and responsibilities
include the following:
1. Gathers and reports statistical data and other information as required.
2. Reviews third party contracts and purchase requisitions for compliance with this
program.
3. Works with all departments to set overall annual goals.
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4. Ensures that bid notices and requests for proposals are available to DBEs in a
timely manner.
5. Identifies contracts and procurements so that DBE goals are included in
solicitations (both race-neutral methods and contract specific goals) and monitors
results.
6. Analyzes the City of Palo Alto's progress toward goal attainment and identifies
ways to improve progress.
7. Participates in pre-bid meetings.
8. Advises the City Manager/City Council on DBE matters and achievement.
9. Participates with the legal counsel and project managers to determine contractor
compliance with good faith efforts.
10. Provides DBEs with information and assistance in preparing bids, obtaining bonding
and insurance.
11. Provides outreach to DBEs and community organizations to advise them of
opportunities.
VII. Federal Financial Assistance Agreement Assurance (§26.13)
The City of Palo Alto will sign the following assurance, applicable to all Federal Highway
Administration (FHWA) assisted contracts and their administration a 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 requirement 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 Palo Alto 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 DBE Program may offer assistance to the DBELO.
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IX. Directory (§26.31)
The City of Palo Alto will refer interested persons to the DBE directory available from
the Caltrans DBE Program website at www.dot.ca.gov/hq/bep.
X. Overconcentration (§26.33)
The City of Palo Alto has not identified any types of work in DOT-assisted contracts that
have an overconcentration of DBE participation .. If in the future the City of Palo Alto
identified the need to address overconcentration, measures for addressing
overconcentration will be submitted to the Caltrans District Local Assistance Engineer
(DLAE) for approval.
XI. Business Development Programs (§26.35)
The City of Palo Alto does not have a business development or mentor-protege
program. If the City of Palo Alto 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
The City of Palo Alto 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
The City of Palo Alto ensures that the following ·clauses or equivalent will be included in
each DOT-assisted prime contract:
The prime contractor agrees to pay each subcontractor under this prime contract for
satisfactory performance of its contract no later than 10 days from the receipt of each
payment the prime contractor receives from the City of Palo Alto. The prime contractor
agrees further to release retainage payments to each subcontractor within 30 days after
the subcontractor's work is satisfactorily completed.
Any delay or postponement of payment from the above-referenced time frame may
occur only for good cause. following written approval of the City of Palo Alto. This
clause applies to both DBE and non-DBE subcontractors.
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XIII. Monitoring and Enforcement Mechanism (§26.37)
The City of Palo Alto will assign a Resident Engineer (RE) or Contract Manager (eM) 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 Palo Alto will review the award documents for the
portion of items each DBE and first tier subcontractors will be performing and the dollar
value of that work. With these documents the RE/CM will be able to determine the work
to be performed by the DBEs orsubcontractors listed.
Preconstruction Conference
A preconstruction conference will be scheduled between the RE/CM and the contractor
or their representation, 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". When the RE/CM receives the
completed form, it will be· checked for agreement of the first tier subcontractors and
DBEs. The RE/CM 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". The "Subcontracting Request" will not be approved until any
discrepancies are resolved. If an issue cannot be resolved, or there is some other
concern, the RE/CM 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.
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. The FPA explains that a contractor
may not substitute a subcontractor listed in the original bid except with the approval of
the awarding authority.
The RE/CM will give the contractor a blank, "Final Report -Utilization of Disadvantaged
Business Enterprises," and 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/CM will ensure that the RE/CM's staff (inspectors) knows what items of work
each DBE is responsible for performing. Inspectors will notify the RE immediately of
apparent violations.
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When a firm other than the listed DBE subcontractor is found performing the work, the
RE/CM will notify the contractor of the apparent discrepancy and potential loss of
payment. Based on the contractor's response, the RE/CM will take appropriate action:
The DBELO 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 DBE 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/CM 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 tha.t 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/CM will request a letter from the
contractor explaining why substitution is needed. The RE/CM must review the letter to
be sure names and addresses are shown, dollar values are included, and the reason for
. the request is explained. If the RE/CM agrees to the substitution, the RE/CM will notify,
in writing, the DBE subcontractor regarding the proposed substitution and procedure for
written objection form 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/CM
for consideration.
If there is any doubt in the RE/CM's mind regarding the requested substitution, the
RE/CM may contact DLAE for assistance and direction.
Recordkeeping and Final Report Utilization of DBEs
The contractor shall maintain records showing the name and address of each first-tier
subcontractor. The records shall also show:
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.
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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 the form
"Final Report -Utilization of Disadvantaged Business Enterprises, First Tier
Subcontractors" and will be submitted to the PLAE attached to the Report of
Expenditures. The RE/CM will compare the completed form "Final Report -Utilization
of Disadvantaged Business Enterprises, First Tier Subcontractors" form to the
contractor's completed "Local Agency Bidder -DBE Information" form and, if applicable,
to the completed "Subcontracting Request" form. The DBEs shown on the completed
form' "Final Report -Utilization of Disadvantaged Business Enterprises, First Tier
Subcontractors" 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 on the completed
"Local Agency Bidder -DBE Information" form when:
1. There have been no changes made by the RE/CM.
2. The contractor has not provided a sufficient explanation in the comment section
of the completed form "Final Report -Utilization of Disadvantaged Business
Enterprises, First Tier Subcontractors."
The explanation will be attached to the completed form "Final Report -Utilization of
Disadvantaged Business Enterprises (DBE), First Tier Subcontractors" for submittal.
The RE/CM will file this in the project records.'
The City of Palo Alto DBELO will keep track of the DBE certification status on the
Internet at www.dot.ca.gov/hq/bep and keep the RE/CM informed of changes that affect
the contract. The RE/CM 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 Palo Alto's commitment to
require bidders list information to be submitted to the City of Palo Alto 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.
The City of Palo Alto 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 of Program Fraud
and Civil Penalties rules) provided in §26.109. The City of Palo Alto also will consider
similar action under its own authorities, including responsibility determinations in future
contracts.
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XIV. Overall Goals (§26.45)
Amount of Goal
The City of Palo Alto's overall DBE goal for the Federal fiscal year 2004-05 is fourteen
percent. The City of Palo Alto projeCts meeting .100 percent of the goal utilizing race-
conscious measures .. This City of Palo Alto will use race-neutral methods to further
encourage DBE participation.
Methodology
Breakout of Estimated Race-Neutral and Race-Conscious Participation
Process
The amount of overall goal, the method to calculate the goal and the breakout of
estimated race-neutral and race-conscious participation is required annually by June 1
in advance of the Federal fiscal year beginning October 1 for DOT-assisted contracts.
Submittals will be to the 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 Palo
Alto 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 Palo Alto's principal office for 30 days following the
date of the notice, and informing the public that the City of Palo Alto will accept
comments on the goals for 45 days follbwing the date ·of the notice. The notice
must be published in general circulation media and available minority-focused
media and trade association publications. 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,
the City of Palo Alto'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 Palo Alto may begin using the overall goal on October 1 of each year. .
XV. Contract Goals (§26.51)
The City of Palo Alto will use contract goals to meet any portion of the overall goal the
City of Palo Alto 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. .
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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 contra<?t 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 subcontractor(s). The goal will then be incorporated into the
contract documents. Contract goals will be expressed as a percentage of the total
amo"unt of a DOT-assisted contract.
XVI. Transit Vehicle Manufacturers (§26.49)
If DOT-assisted contracts will include transit vehicle procurements, the City of Palo Alto
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. The City of Palo Alto will direct the transit
vehicle manufacturer to the subject requirements located on the Internet at
http://osdbuweb.dot.gov/programs/dbe/dbe.htm.
XVII. Good Faith Efforts (§26.53)
Information to be Submitted
The City of Palo Alto 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.
Each solicitation for which a construction contract goal has been established will require
the bidders/offerors to submit the following information to:
City of Palo Alto
Manager, Purchasing and Contract Administration
250 Hamilton Avenue, MS-Mb
Palo Alto, CA 94301
RE:
Project: ______ _
IFB or RFP #: _____ _
No later than 4:00 p.m. on or before the fourth day, not including Saturdays, Sundays
and legal holidays, following bid opening day:
1. The names and addresses of DBE firms that will participate in the contract;
2. A description of the work that each DBE will perform;
3. The dollar amount of the participation of each DBE firm participating;
4. Written and signed documentation of commitment to use a DBE subcontractor
whose partiCipation it submits to meet a contract goal;
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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 is 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 is responsible for determining whether a bidder/offeror who has not met
the contract goal has documented sufficient good faith efforts to be regarded as
responsive: Manager, Purchasing and Contract Administration.
The City of Palo Alto 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 the City of Palo Alto 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:
Carl Yeats
Director, Admi"nistrative Services Qepartment
City of Palo Alto
250 Hamilton Avenue, MS-4A
Palo Alto, CA 94301
650-329-2450
carl.yeats@cityofpaloalto.org
The reconsideration official will not have played any role in the original determination
that the bidder/offeror did not make 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 so. The City of Palo Alto 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 resultof the reconsideration process is not administratively appealable to Caltrans,
FHWA or the DOT.
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Good Faith Efforts when a DBE is Replaced on a Contract
The City of Palo Alto 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/CM immediately on 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 Palo Alto 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, the City of Palo Alto 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 proceedings.
XVIII. Counting DBE Participation (§26.55)
The City of Palo Alto 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. .
XIX. Certification (§26.83(a))
The City of Palo Alto ensures that only DBE firms currently certified on the Caltrans'
directory will participate as DBEs in its program.
XX. Information Collection and Reporting
Bidders List
The City of Palo Alto will create, a bidders list, consisting of information about all DBE
and non-DBE firms that bid or quote on DOT-assisted contracts. Th~ 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 Palo Alto, Caltrans, FHWA or DOT. This reporting requirement also extends to any
certified DBE subcontractor.
Payments to DBE subcontractors willbe reviewed by the City of Palo Alto to ensure that
the actual amount paid to DBE subcontractors equals or exceeds the dollar amounts
stated in the schedule of DBE participation.
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Reporting to Caltrans
The City of Palo Alto -Final Utilization of DBE participation will be reported to the
DLAE.
Confidentiality
The City of Palo Alto will safeguard from disclosure to third parties, information that may
reasonably be regarded as confidential business information, consistent with federal,
state, and local laws.
City Manager Date
The Disadvantaged Business Enterprise Program is accepted by:
DLAE Date
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APPENDIX A TO 49 CFR 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 bidder that did not meet the
goal made adequate good faith efforts. It is important for you to consider the
quality, quantity, and intensity of the different kinds of efforts that the bidder has
made. The efforts employed by the bidder should be those that one could·
reasonably expect a bidder to take if the bidder were actively and aggressively
trying to obtain DBE participation sufficient to meet the DBE contract goal. Mere
pro forma efforts are not good faith efforts to meet the DBE contract
requirements. We emphasize, however, that your determination concerning the
sufficiency of the firm's good faith efforts is a judgment call: meeting quantitative
formulas is not required.
III. . The Department also strongly cautions you against requiring that a bidder meet a
contract goal (i.e., obtain a specified amount of DBE participation) in order to be
awarded a contract, even though the bidder makes an adequate good faith
efforts showing. This rule specifically prohibits you from ignoring bona fide good
faith efforts.
IV. The following is a list of types of actions, which you should consider as part of the
bidder's good faith efforts to obtain DBE participation. It is not intended to be a
mandatory checklist, nor is it intended to be exclusive or exhaustive. Other
factors or types of efforts may be relevant in appropriate cases.
A. So liciting through all reasonable and available means (e.g. attendance at pre-
bid meetings, advertising and/or written notice) 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
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appropriate, breaking out contract work items into economically feasible units
to facilitate DBE participation, even when the prime contractor might
otherwise prefer to perform these work items with its own forces.
C. Providing interested DBEs with adequate information about the plans,
specifications, and requirements of the contract in a timely manner to assist
them in responding to a solicitation.
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 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 \is. 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.
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V. In determining whether a bidder has made good faith effort, you may take into
account the performance of other bidders in meeting the contract. For example,
when the apparent successful bidder fails to meet the contract goal, but others
meet it, you may reasonably raise the question of whether, with additional
reasonable efforts, the apparent successful bidder could have met the goal. If
the apparent successful bidder fails to meet the goal, but meets or exceeds the
average DBE participation obtained by other bidders, you may view this, in
conjunction with other factors, as evidence of apparent successful bidder having
made good faith efforts.
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APPENDIX B
TO BE USED FOR DESIGN-BUILD CONTRACTS
The following are hereby incorporated in to the City of Palo Alto's Disadvantaged
Business Enterprise (OBE) Program:
II ObjectiveslPolicy Statement (§§26.1 , 26.23)
At the end of the first paragraph, add the following:
The City of Palo Alto recognizes that certain modifications are necessary to adapt the
program for the use in connection with design-build contracts, and has therefore
establi$hed certain procedures applicable to design-build DBE contracts under the DBE
Program. Public Contract Code Section 4109 requires subcontractors to be identified
by the prime contractor for the subletting or subcontracting of any portion of the work in
excess of one-half of 1 percent of the prime contractor's total bid. Exceptions are only
in the cases of public· emergency or necessity, and then only after a finding reduced to
writing as a public record of the awarding authority setting forth the facts constituting the
emergency or necessity. "
XIII Monitoring and Enforcement Mechanisms (§26.37)
At the end of the first paragraph below "After Contract Award", add the following
paragraph:
After Design-Build Contract Award
As described in the Section entitled "GOOD FAITH EFFORTS" below, each proposer
for a City of Palo Alto design-build contract will be required to submit a DBE
Performance Plan "as part of a responsive proposal .. Following award ora design-build
contract and during both the design and construction portions of the project, the design-
build contractor will be required to submit documentation, in the form of progress reports
described below, to show that the design-build contractor is meeting the contract goal
for the project, or if the goal is not being met," the design-build contractor must submit
satisfactory evidence that it has made. good faith efforts, in accordance with Section
XVII, to meet the goal. Evidence of good faith efforts, as described in 49 CFR Part 26,
Section 26.53 and Appendix A, will be monitored by the agency throughout the duration
of the design-build project.
At the end of the first paragraph below, "Preconstruction Conference", add the following
sentence:
The contractor will promptly provide the City of Palo Alto with the information required
by the form entitled "Local Agency DBE Information" upon selection of any DBE or other
subcontractor not previously identified by the design-build contractor. During the course
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ATTACHMENT B·
DBE Goal Development Calculation
Comparison of DBEs to All Available Contractors
Fiscal Year 2004-05
Environmental Consulting
WCC = 8700
NAICS = 54162
# of DBE Total # For
Counties: Firms All Firms
Alameda 16 70
Contra Costa 5 42
San Francisco 4 44
San Mateo 0 18
Santa Clara 5 55
Santa Cruz 2 18
Solano 4 7
Total 36 254
% DBEI All Businesses 14%
===============================================================================
Source Data:
# DBE Firms Derived from Caltrans DBE Query
# All Firms Derived from Census Data per NAICS per County