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HomeMy WebLinkAbout2003-12-15 City Council (17)City of Palo Alto City Manager’s Report TO:HONORABLE CITY COUNCIL 3 FROM:CITY MANAGER DEPARTMENT: ADMINISTRATIVE SERVICES DATE: SUBJECT: DECEMBER 15, 2003 CMR: 538:03 APPROVAL OF THE CITY OF PALO ALTO’S 2003-04 DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM AND ADOPTION OF A RESOLUTION IMPLEMENTING THE PROGRAM RECOMMENDATION Staff recommends that Council: Approve Palo Alto’s 2003-04 Disadvantaged Business Enterprise (DBE) Program, which pertains to work performed, on Department of Transportation (DOT) funded projects. o Adopt a resolution establishing an overall DBE participation goal of 2.5% for contracts to be awarded on DOT-funded projects beginning on October 1, 2003 and ending on September 30, 2004. BACKGROUND Federal regulations require recipients of federal funds to establish, and annually reaffkrrn, a DBE Program associated with work on DOT-funded projects. The purpose of the DBE Program is to support the participation of disadvantaged firms, owned and controlled by minorities and women, in federally funded projects. The California Department of Transportation (Caltrans) is responsible for overseeing local jurisdiction compliance with DBE participation requirements for federally funded transportation projects. A key component of the DBE Program is the establishment of an annual DBE participation goal. This yearly goal is calculated by utilizing the methodology specified by Caltrans. This methodology is based upon the number and type of federally, funded projects that will go out to bid each year and the availability of registered DBE firms in the area. This process relies upon a database of contractors maintained by Caltrans. The database includes the type of work each contractor performs and the location of the business. It also includes the DBE firms that have registered with Caltrans. The annual CMR:538:03 Page 1 of 4 DBE goal is calculated by comparing registered DBE firms to total available firms for each category of federally funded work plarmed during the year. It is common for DBE participation goals to fluctuate on a year-to-year basis due to changes in the magNtude and categories of federally funded projects and the number of registered DBE firms. Since each jurisdiction calculates its annual DBE participation goal based upon its specific federally funded projects, comparisons to other jurisdictions are typically not meaningful. DISCUSSION Currently, the City has three DOT-funded projects underway: 1) the Homer Avenue Undercrossing Project with a federal funding estimate of $2,701,000; 2) the Citywide Traffic Signal Upgrade Project with a federal funding estimate of $885,000; and 3) the Embarcadero Road Pedestrian/Bike Bridge and Bike Path Project with a federal funding estimate of $800,000. In addition, during federal fiscal year 2003-04, the City has added one project, the Sand Hill Road Seismic Retrofit Project, with an estimated federal funding amount of $69,226. Staff recommends Council reaffirm the City’s DBE Program (Attachment 1) in order to remain eligible to receive funding from Caltrans and the Federal Highway A&ninistration (FHWA) on these projects for federal fiscal year 2003-04, which begins on October 1, 2003 and ends on September 30, 2004. The proposed 2003-04 DBE Program includes: 1) a DBE policy statement; 2) the desig-nation and duties of the City’s DBE Liaison Officer; 3) DBE contract procedures, reports, and records; and 4) an updated DBE participation goal of 2.5 percent. Staff followed the methodology specified by Caltrans to determine the proposed 2003-04 DBE participation goal of 2.5 percent. Since the Sand Hill Road Seismic Retrofit Project is the only DOT-funded project that will go out to bid in 2003~04, data related only to this project could be used in the goal development process. First, staff defined the main categories of work for this project. Next, 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 each of these categories. 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 ftrms in the designated work categories was then compared to the total available contractors in the same work categories for each of the seven counties. This analysis resulted in the establishment of an overall DBE goal of 2.5 percent for federal fiscal year 2003-04 as shown in Attachment 2. This goal represents a reduction from the prior year goal of three percent. CMR:538:03 Page 2 of 4 In August 2003, the proposed 2.5 percent participation goal was submitted to Caltrans for its review and comment. On September 25, 2003, Caltrans provided preliminary approval of this goal. Following this review, the proposed goal was published in local newspapers, inviting public comment for 45 days. The comment period ended December 12, 2003. No comments have been received to date, nor have any been received in the last several years. 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 compete for and 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. At the present time, the City is on track to meet or exceed its 2002-03 DBE Program goal of three percent. RESOURCE IMPACT The City currently has four transportation projects with federal financial support, estimated to total $4,455,226. Council approval of the 2003-04 DBE Program will allow the City to remain eligible to receive federal funds for these and all new transportation projects. POLICY IMPLICATIONS This report does not represent any change to existing City policy. TIMELINE Following Council approval of the DBE Program, staff will submit the Council-approved resolution to Caltrans for approval. Upon approval by Caltrans, the City is eligible to receive federal funds from Caltrans and FHWA through the end of federal fiscal year 2003-04. ENVIRONMENTAL REVIEW Adoption of a resolution to implement a DBE Program is not considered a project under California Environmental Quality Act. No environmental assessment is required. ATTACHMENTS Attachment 1: Resolution with 2003-04 Disadvantaged Business Enterprise Program Attachment 2: DBE Goal Development Calculation CMR:538:03 Page 3 of 4 PREPARED BY: JO~LLA WALKER Mafia(er, Purchasing and Contract Administration & DBE Liaison Officer DEPARTMENT HEAD APPROVAL: CARL Director,ftministrative Services CITY MANAGER APPROVAL: EMILY HARRISON Assistant City Manager cc: Arthur Duffy, DBE Coordinator, Caltrans CMR:538:03 Page 4 of 4 ATTACHMENT 1 NOT YET APPROVED RESOLUTION NO. RESOLUTION OF THE COUNCIL OF THE CITY OF PALO ALTO ADOPTING THE 2003-04 DISADVANTAGED BUSINESS ENTERPRISE (DBE)PROGRAM FOR FEDERALLY FUNDED CITY TRANSPORTATION PROJECTS WHEREAS, in order to comply with federal requirements to obtain federal funds for City transportation projects, the City of Palo Alto must approve and implement a Disadvantaged Business Enterprise ("DBE") program prior to approval by Caitrans and the United States Department of Transportation ("DOT") of any request for Federal funds; WHEREAS, the overall goal established by the DBE program for DBE participation in the performance of contracts financed in whole or in part with DOT funds shall be two and one-half percent and shal! cover the period from October i, 2003 to September 30, 2004; and WHEREAS, the City Manager has caused newspaper notice to be published for a forty-five (45) day period, setting forth the goal established by the City for Federal fiscal year 2003-2004 for DBE participation in the performance of contracts financed in whole or in part with DOT funds. NOW, THEREFORE, the Council of the City of Palo Alto does RESOLVE as fol!ows: SECTION i. The Council hereby adopts the "City of Palo Alto 2003-04 Disadvantaged Business Enterprise (DBE) Program", a copy of which is attached hereto and incorporated herein by reference. SECTION 2. The Council hereby establishes the overall goa! of two and one-half percent for DBE participation in the performance of contracts financed in whole or in part with DOT funds during the period of October i, 2003 to September 30, 2004. // // // // // 0312~sm0100159 NOT YET APPROVED SECTION 3. The Council finds that this is not a project under the California Environmental Quality Act and, therefore, no environmental impact assessment is necessary. INTRODUCED AND PASSED: AYES: NOES: ABSENT: ABSTENTIONS: ATTEST: City Clerk APPROVED AS TO FORM: Mayor APPROVED: Assistant City Attorney City Manager Director of Administrative Services Disadvantaged Business Enterprise Liaison Officer 031204 sm 0100159 2 I"1 I"lH II’D~ I Disadvantaged Business Enterprise (DBE) Program 2003-04 DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM 2003-2004 CITY OF PALO ALTO Policy Statement It is the policy of the City or Palo Alto to provide to Disadvantaged Business Enterprises (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. Mayor, City of Palo Alto S:asd/a-allldbeldisadvantaged business enterprise 1 I. 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 Palo 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 S:asd/a-all/dbe/disadvantaged business enterprise 2 award and performance of any contract covered by 49 CFR Part 26 on the basis of race, color, sex, or national origin. In administering its DBE program, the City 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. Vl. 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.dot.qov/main.cfm. Johnella Walker has direct, independent access to the City Manager concerning DBE program matters. The DBEL© 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 program, in coordination with other appropriate officials. include the following: and monitoring the DBE Duties and responsibilities 1.Gathers and reports statistical data and other information as required. 2.Reviews third party contracts and purchase requisitions for compliance with this program. S:asd!a-all/dbe!disadvantaged business enterprise 3 3.Works with all departments to set overall annual goals. 4.Ensures that bid notices and requests for proposals are available to DBEs in a timely manner. 5.Identifies contracts and procurements so that DBE goals are included in solicitations (both race-neutral methods and contract specific goals) 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. S:asd/a-all/dbe/disadvantaged business enterprise 4 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.qov/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-prot6g6 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. S:asd/a-all/dbe/disadvantaged business enterprise 5 Xlll. Monitoring and Enforcement Mechanism (§26.37) The City of Palo Alto will assign a Resident Engineer (RE) or Contract Manager (CM) 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 or subcontractors 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 wil! 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 Monitorinq 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. S:asd/a-all/dbe/disadvamaged business enterprise 6 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 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/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. Recordkeepin.q 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. 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. S:asd/a-all/dbe/disadvantaged business enterprise 7 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 DLAE 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: There have been no changes made by the RE/CM. 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. S:asd/a-all/dbe/disadvantaged business enterprise 8 XIV. Overall Goals (§26.45) Amount of Goal The City of Palo Alto’s overall DBE goal for the Federal fiscal year 2003-04 is two and one-half 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. Methodoloqy 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 following 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. S:asd/a-allidbe/disadvantaged business enterprise 9 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 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 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.qov/pro.qrams/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; S:asd/a-all/dbeldisadvantaged business enterprise ] 0 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 bidderiofferor’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, Administrative Services Department City of Palo Alto 250 Hamilton Avenue, MS-4A Palo Alto, CA 94301 650-329-2450 carl.yeats@cityofpaloalto.or.q 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 result of the reconsideration process is not administratively appealable to Caltrans, FHWA or the D©T. S:asd/a-all/dbe!disadvantaged business enterprise 11 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, t/he contracting officer may issue a termination for default proceedings. XVlll. 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. XlX. 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. 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 Palo Alto, Caltrans, FHWA or DOT. This reporting requirement also extends to any certified DBE subcontractor. Payments to DBE subcontractors will be 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. S:asd/a-all/dbe/disadvantaged business enterprise 12 Reportin,q 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 S:asd/a-all/dbe/disadvantaged business enterprise 13 APPENDIX A TO 49 CFR PART 26 - GUIDANCE CONCERNING GOOD FAITH EFFORTS 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. Soliciting 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 S:asd!a-all/dbe/disadvantaged business enterprise 14 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. Providing interested DBEs with adequate information about the plans, specifications, and requirements of the contract in a timely manner to assist them in responding to a solicitation. (1) 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. 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. 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. 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. S:asd/a-all/dbe/disadvantaged business enterprise 15 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. S:asd!a-allidbe/disadvantaged business enterprise 16 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 (DBE) Program: II Objectives/Policy 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 established 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 pubfic 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. Xlll 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 of a 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 ff 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 S:asd/a-all/dbe!disadvantaged business enterprise 17 of the contract, differences must be explained and resolved by either making corrections or requesting substitution. At the end of the fourth paragraph below "Construction Contract Monitorinq", add the following paragraph: The contractor will provide DBE Progress Reports to the City of Palo Alto with each - invoice and will provide an annual report on or before August 1 of each year of the design-build contract. Each report must also include a narrative summary stating whether the contractor is on target with respect to the DBE goal set forth in the design- build contract, whether the goal has been exceeded (stating the amount of the excess), or whether the contractor is behind target (stating the amount of the deficit). XVll Good Faith Efforts (26.53) At the end of the third paragraph below "Information to be Submitted", add the following items: A DBE Performance Plan containing a detailed description of the design-build contractor’s planned methodology for achieving the DBE goal stated in the contract, including a description of the good faith efforts the design-build contractor intends to undertake to achieve that goal. 8.A design-build proposal must also include an affidavit that the proposer will either attain the DBE goals for the design-build contract or will exercise good faith efforts to do so. At the end of the first paragraph below "Demonstration of Good Faith Efforts", add the following sentence" If it is a design-build contract, each contractor proposing will be required to submit a DBE Performance Plan as part of a responsive proposal and good faith effort. City Manager Date This Disadvantaged Business Enterprise Program for design-build contracts is accepted by: DLAE Date S:asd!a-all/dbe/disadvantaged business enterprise ] 8 EXHIBIT 1 N , r ATTACHMENT 2 DBE Goal Development Calculation Comparison of DBEs to All Available Contractors within 7 County Area Fiscal Year 2003/04 Project Description Sand Hill Road Seismic Retrofit % of work Federal Federal by Funds per NAICS Funds WCC WCC WCC Code $69,226 10.0%0651 $6,923 23571 20.0%1201 $13,845 23411 70.0%5201 $48,458 23591 Totals 100.0%$69,226 DBE Base Goal: Total $ DBE Firms Possibly to Total Subcontracted Firms to DBE’s 2.3%$159.23 4.6%$636.87 2.0%$969.16 $1,765.26 2.5% WCC - Work Category Codes - Caltrans website NAICS - Nodh American Industrial Classification System codes - Census Bureau Data website