HomeMy WebLinkAbout2001-04-23 City Council (3)City of Palo Alto
City Manager’s Report
TO:
FROM:
DATE:
SUBJECT:
HONORABLE CITY COUNCIL
CITY MANAGER DEPARTMENT:ADMINISTRATIVE
SERVICES
APRIL 23, 2001 CMR: 205:01
APPROVAL OF THE CITY OF PALO ALTO’S 2000-2001
DISADVANTAGED BUSINESS ENTERPRISE (DBE)
PROGRAM AND ADOPTION OF A RESOLUTION
IMPLEMENTING THE PROGRAM
REPORT IN BRIEF
The City’s transportation projects are eligible for federal funding administered by
the California Department of Transportation (Caltrans). To qualify for this
funding, the City must have a program in place to assist and guide minority and
women-owned businesses to participate in. contracting opportunities for these
projects. To remain qualified for these federal funds, Council. must annually
reaffirm the City’s commitment and approve the Disad-~’antaged Business
Enterprise program and the numerical goal it attempts to reach. Last year the
federal government revised the .methodology used to compute the contracting
goals in order to make the goals less arbitrary and based more on the number of
DBE businesses in the Palo Alto contracting area. The City’s DBE program has
been revised to incorporate the changed methodology and the methods by which
the goals will be reached..The result of the new method of goal-setting has
resulted in a higher goal than last year.
CMR: 205:01 Page 1 of 5
RECOMMENDATION
Staff recommends approval of the first Disadvantaged Business Enterprise (DBE)
program (Attachment 1) developed under the new format provided last fall by the
California Department of Transportation. In addition, Council is requested to
adopt a Resolution (Attachment 2) calling for the approval of a new DBE goal of
29 percent for the City of Palo Alto in 2000-01, for work performed on federally
funded transportation projects.
BACKGROUND
Federal regulations require recipients .of federal funds to establish a DBE program ¯
and a DBE goal. The purpose of a DBE program is to implement a federal policy
supporting, to the fullest extent possible, participation of firms owned and
controlled by minorities and women in federally funded programs. The California
Department of Transportation (Caltrans) is responsible for ensuring compliance
with requirements for DBE participation. The City must annually reaffirm its
DBE program and establish a DBE participation goal in order for Caltrans and the
Federal Highway Administration (FHWA) to continue to release funds for the
City’s federally funded projects.
Last year, the FHWA developed a new methodology for computing the DBE
participation goal for participating agencies. The instructions for developing the
numerical goal were provided very late in the year, beyond the date of the
beginning of the federal fiscal year, October 1. Provisional Caltrans. approval was
not received until January, and with the public advertising and response time
taking another forty-five days, this request is being submitted much later than
would normally be the case. Consequently, the City’s application for federal
funding of projects is pending Council’s, and subsequently, Caltrans’ final
approval of the City’s program.
DISCUSSION
The City ofPalo Alto’s proposed DBE program includes the following:
1.A policy statement signed by the Mayor;
A designation of the City’s Disadvantaged Business Enterprise Liaison
Officer (DBELO), and the duties of the officer;
DBE contract procedures, DBE notifications, recording DBE participation,
reports and records, and a methodology for handling complaints; and
o The method used for computing the DBE goals for the City based upon the
available disadvantaged businesses in the Palo Alto area.
CMR: 205:01 Page 2 of 5
The recommended goal was published in local newspapers, inviting public
comment for 45 days after the date of the advertisement. Cor~."~,ments are received
for informational purposes only. No comments have been re,: eed this year, nor
have any been received in the last four years.
To be eligible to apply for federal funds for transportation projects, an agency is
required to establish a goal for the amount of work that can be directed to
disadvantaged business enterprises from the entire project being funded. To
receive any amount of federal funding requires entering into the goal-setting
process. The goal is not a. quota. It is, rather, a numeric objective based on the
number and types-of contracts to be awarded, availability of DBEs in the area, and
past results of DBE utilization. In past years, the determination of this goal was an
informal process, heavily weighted, by the City’s experience and the experience of
other agencies in the geographic area. This year, the Department of Transportation
has mandated a much more factual and uniform process to compute the goal. The
process is based upon the ~actual numbers of DBE firms present on the City’s bid
list. As an alternative, since the City of Palo Alto does not maintain a bid list, the
process is based on the modification of another agency’s computation (one that
shares the same market area), to compensate for differences in types of projects,
mix of contractors used, or other considerations. The methodology must now be
displayed.
Another new requirement from Caltrans is that the City must indicate how its goal
will be achieved. It will be achieved using either race-conscious measures or race-
neutral measures. Race-conscious measures are defined as activities focused
specifically on assisting only DBEs, including women-owned DBEs. Race-neutral
measures are activities that are, or can be, used to assist all small businesses. For
purposes here, race neutral includes gender neutrality. As indicated below the
City will use amix of both methods.
In FY 1994-95, Council approved the establishment of an overall DBE goal of 18
percent. Council increased the goal to 25 percent in FY 1996-97 where it has
remained to date. The proposed goal of 29 percent was developed from the
computation provided by the City of Sunnyvale which had established a 12
percent goal. Because of the difference in the mix of work categories, the greater
numbers of available DBEs in the work categories, and Palo Alto’s prior
experience, this goal was adjusted upwards to 29 percent. The plan indicates that
in staffs best judgement and experience, 5 percent of the goal will be attained
using race-neutral methods, and 24 percent will be achieved using race-conscious
methods. In this adjustment, however, the City provided a caution to Caltrans.
The City would make a good faith effort to achieve the 29 percent goal, but based
on recent year achievements of 25 percent, in the City it might be more realistic to
expect 25 .percent attainment.
CMR: 205:01 Page 3 of 5
This adopted goal will put the City among other California agencies such as:
American Canyon 36%
Bay Area Rapid Transit Authority 23%
City of Oakland 28%
City of San Francisco 30%
The City of San Jose had not reported as of this writing.
As reported by the City’s Transportation Division of the Planning Department, the
following projects were used to base the goal setting process:
Project Estimated
Project Cost
Signal Timing and Controllers (Existing Project) $ 520,000
Citywide Traffic Signal Upgrade (New)$1,075,700
Homer Undercrossing (New)$2,649,300
Embarcadero Road Pedestrian/Bike Bridge &
Bike Path (Existing and New)
TOTAL
Federal.
Funds
Requested.
$ 4O7,00O
$ 960,00O
$2,035,500
$1,516,000
$5,761,000
$1,120,000
$4,522,500-
Of these projects’ Federal funds comprise 78.5 percent of the cost of the projects.
After Council approves this DBE program, the next step is to provide the Council-
approved resolution to Caltrans for review. Upon its approval, the City will be
eligible to receive federal funds for these projects.
RESOURCE IMPACT
Approval of the program will have no immediate impact on City resources, but
upon approval of the program by Caltrans, the City is eligible to receive
approximately $4,500,000 in federal funds.
POLICY IMPLICATIONS
The renewal of the resolution is consistent with City policies regarding the seeking
of federal and state funds for roadway improvements and other projects.
CMR: 205:01 Page 4 of 5
ENVIRONMENTAL REVIEW
Adoption of a resolution to implemem a DBE program and establish goals is not
considered a project under California Environmental Quality Act. No
environmental assessment is required.
ATTACHMENTS
Attachment 1:
Attachment 2:
DBE Program
.Resolution
PREPARED BY:
EDWARDS
Manager, Purchasing and Contract Administration and
Disadvantaged Business Enterprise Liaison Officer
DEPARTMENT HEAD APPROVAL:
CITY MANAGER APPROVAL:
EM!L~ HARRISON
Assistant City Manager
CC: David Pneh, Caltrans
CMR: 205:01 Page 5 of 5
Attachment 1
DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM
2000-2001
CITY OF PALO ALTO
DISADVANTAGED BUSINESS ENTERPRISE (DBE) PROGRAM 2000-20001
CITY OF PALO ALTO/COUNTY OF SANTA CLARA
Policy Statement
It is the policy of the City of Palo Alto to provide to Disadvantaged Business
Enterprises (DBE), as defined in Title 49, Code of Federal Regulations (CFR)
Part 26, a maximum practicable opportunity to compete for the award of
contracts which receive financial assistance from the U.SI Department of
Transportation (DOT). This policy, which is fully described herein, constitutes
policy and commitment to substantially increase the DBE utilization 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 recipients of
Federal aid funds, agree to ensure that DBE firms have the maximum opportunity
to participate in the performance of Federally funded contracts and subcontracts.
In this regard, this agency and all of its contractors and subcontractors will take
all reasonable steps in accordance with 49CFR Part 26 to ensure that DBE firms
have the maximum opportunity to compete for and perform contracts.
Mayor,.City of Palo Alto
I. Definitions of Terms
The terms used in this program have the meanings defined in 49 CFR §26.5.
II. ObjectiveslPolicy 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 nondiscrimination in the award and administration of DOT-
assisted contracts;
To create a level playing field on which DBEs can compete fairly for DOT-
assisted contracts;
To ensure that the DBE Program is narrowly tailored in accordance with
applicable law;
To ensure that only firms that fully meet 49 CFR Part 26 eligibility
standards are permitted to participate as DBEs;
To help remove barriers to the participation of DBEs in DOT-assisted
contracts; and
To assist the development of firms than can compete successfully in the
market place outside the DBE Program.
The Manager, Purchasing and Contract Administration has been delegated as
the DBE Liaison Officer. 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 tl~e City Council
and all the components of our organization. We have distributed this statement
to DBE and non-DBE business communities that perform work for us on DOT-
assisted contracts by publishing this statement in general circulation, minority-
focused and trade association publications.
II1. 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
2
connection with the award and performance of any contract covered by 49 CFR
Part 26 on the basis of race, color, sex, or national origin.
In administering its DBE program, the City of Palo Altowill 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 (§26.2t)
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 this Model 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) (§26.45)
The City of Palo Alto has designated the following individual as the DBE Liaison
Officer:
M. Howard Edwards
Manager, Purchasing and Contract Administration
City of Palo Alto
250 Hamilton Ave.
Palo Alto, California 94301
650-329-2319 "
howard edwards@,city.palo-alto.ca.us
In that capacity, M. Howard Edwards 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
osdbuweb.dot.gov/main.cfm. M. Howard Edwards has direct, independent
access to the City Manger concerning DBE program matters. The DBELO
allocates a portion of his 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 Attachment 1 to this program.
The DBELO is responsible for developing, implementing and monitoring the DBE
program, in coordination with other appropriate officials. Duties and
responsibil’ities include 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.
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 goalsare 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 CEO/governing body on DBE matters and achievemenL
9.Chairs the DBE Advisory Committee.
10.Participates with the legal counsel and project director to determine
contractor compliance with good faith efforts.
11. Provides DBEs with information and assistance in preparing bids, obtaining
bonding and insurance.
12. Plans and participates in DBE training seminars.
13. 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, application .to all 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 DBE
Liaison Officer. The Caltrans Disadvantaged Business Enterprise Program may
offer assistance to the DBE Liaison Officer.
4
IX. Directory (§26.31)
The City of Palo Alto will refer interested persons to the DBE directory available-
from the Caltrans Disadvantaged Business Enterprise program website at
www.dot.ca.qov/h.qq/bep.
X. Overconcentration (§26.33)
The City ofPalo 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 overconcetration, measures for
addressing 0verconcentration will be submitted to the DLAE for approval.
Xl. Business Development Programs (§26.35)
The City of Palo Alto does not have a business development or mentor-prot6g~
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 FHWA for their approval.
Xll. 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 49CFR part 26 in the award and
administration ofDOT-assisted contracts. Failure by the contractor to carry out
these requirements is a material breach of this contract, which may result in the
termination of this contract or such other remedy, as recipient deems
appropriate.
Prompt Payment
City of 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 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 City of Palo Alto.
The prime contractor agrees further to release retainage payments to each
subcontractor within 30 days after the subcontractor’s works 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 D.BE and non-DBE subcontractors.
Xllh Monitoring and Enforcement Mechanism (§26.37)
The City of Palo Alto will assign a Resident Engineer (RE) or Contract Manager
to monitor and track actual DBE participation through contractor and
subcontractor reports of payments in accordance with the following:
After Contract Award
After the contract award the City of 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/Contract Manager
will be able to determine the work to be performed by the DBEs or
subcontractors listed.
. Preconstruction Conference
A preconstruction conference will be scheduled between the RE and the
contractor or their representation to discuss the work each DBE subcontractor
will perform.
Before work can begin on a subcontractl the local agency will require the
contractor to submit a completed "Subcontracting Request," Exhibit 16-B ofthe
LAPM or equivalent. When the RE receives the completed form it will be
checked for agreement of the first tier subcontractors and DBEs. The RAE will
not approve the request when it identifies someone other than the DBE or first
tier subcontractor listed in the previously completed "Local Agency Bidder DBE
Information," Exhibit 15-G. The "Subcontracting Request" will not be approved
until any discrepancies are resolved. If an issue cannot be resolved at that time,
or there is some other concern, the RE will require the contractor to eliminate the
subcontractor in question before signing the subcontracting request. A change in
the DBE or first tier subcontractor may be addressed during a substitution
process at a later date.
Suppliers, vendors, or manufacturers listed on the "Local Agency Bidder DBE
Information" will be compared to those listed in the completed Exhibit 16-1 of the
LAPM 0r equivalent. Differences must be resolved by either making corrections
or requesting a substitution.
Substitutions will be subject to the Subletting and Subcontracting Fair Practices
Act (FPA). Local agencies will require contractors to adhere to the provisions
within Subletting and Subcontracting Fair Practices act (State Law) Sections
4100-4144. FPA requires the contractor to list all subcontractors in excess of
one half of one percent (0.5%) of the contractor’s total bid or $10,000, which ever
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.
6
The RE will give the contractor a blank Exhibit 17-F, "Final Report Utilization of
Disadvantaged Business. Enterprises," and will explain to them that the document
will be required at the end of the project, for which payment can be withheld, in
conformance with the contract.
Construction Contract Monitorinq
The RE will ensure that the RE’s staff (inspe(~tors) knows What items of work
each.DBE is responsible for performing. Inspectors will notify the RE
immediately of apparent violations.
When a firm other than the listed DBE subcontractor is found performing the
work, the RE will notify the contractor of the apparent discrepancy and potential
loss of payment. Based on the contractor’s response, the RE will take
appropriate action: The DBE Liaison Officer will perform a preliminary
investigation to identify any potent!al issues related to the DBE subcontractor.
performing a commercially useful function. Any substantive issues will be
forwarded to the Caltrans Disadvantaged Business Enterprise Program. Ifthe
contractor fails to adequately explain why there is a discrepancy, payment for the
work will be withheld and a letter will be sent to the contractor referencing the ’
applicable specification violation and the required withholding of payment.
If the contract requires the submittal of a monthly truck document, the contractor
will be required to submit documentation to the RE showing the owner’s name;
California Highway Patrol CA number; and the DBE certification number of the
owner of the truck for each truck used during that month for whi(~h DBE
participation will be claimed. The trucks will be listed by California Highway
Patrol CA number in the daily diary or on a separate piece of paper for
documentation. The numbers are checked by inspectors regularly to confirm -
compliance.
Providing evidence of DBE payment is the responsibility of the contractor.
Substitution
When a DBE substitution is requested, the RE/Contract Manager will request a
letter from the contractor explaining why substitution is needed. The RE/Contract
Manager will obtain a written concurrence from the DBE regarding this change.
If the contractor is not meeting the contract goal with this substitution, the
contractor must provide the required good faith effort to the RE/Contract
Manager for local agency consideration.
If there is any doubt in the RE/Contract Manager’s mind regarding the requested
substitution, the RE/Contract Manager may contact DLAE for assistance and
direction.
Record Keepin.q and Final Report Utilization of Disadvantaqed Business
Enterprises
The contractor shall maintain records showing the name and address of each
first-tier subcontractor. The records shall also show:
7
1.The name and business address, [egardless 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.workperformed by
their own forces along with the corresponding doi~,.--)r value of the work
claimed toward DBE goals.
When a construction contract has been completed the contractor will provide a
summary of the records stated above. The DBE utilization information will be
documented on Exhibit 17-F and will be submitted to the DLAE attached to the
Report of expenditures. The RE will compare the completed Exhibit 17-F to the
contractor’s completed Exhibit 15-G and, if applicable,, to the completed exhibit
16-B. The DBEs shown on the completed Exhibit 17-F should be the same as
those originally listed unless an authorized substitution was allowed, or the
contractor used more DBEs and they were added. The dollar amount should
reflect any changes made in planned work done by the DBE. The contractor will
be required to explain in writing why the names of the subcontractors, the work
items or dollar figures are different from what was originally on the completed
Exhibit 15-G when:
¯ There have been no changes made by the RE.
¯ The contractor has not provided a sufficient explanation
section of the completed Exhibit 17-F..in the comment
The explanation will be attached to the completed Exhibit 17-F for submittal. The
RE will file this in the project records.
The .local agency’s Liaison Officer will keep track of the DBE certification status
on the Internet at www.dot.ca.qov/hq/bep and keep the RE informed of changes
that affect the contract. The RE will require the contractor to act in accordance
with existing contractual commitments regardless of decertification.
The DLAE will used the PS&E checklist to monitor the .City of Palo Alto’s
commitment to require bidder,% 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 or Program Fraud and Civil Penalties rules) provided in §26.109, City
of Palo Alto also will consider similar action under our own authoritiesl including.
responsibility determinations in future contracts.
XIV. Overall Goals (§26.45)
The City of Palo Alto’s overall goal for the Federal fiscal year FY 2001 is 29% of
the Federal financial assistance in FHWA-assisted contracts. This overall goal is
broken down into 5% race-neutral and 24% race-conscious components.
Process
Starting withFederal fiscal year 2002, the amount of overall goal, the method to
calculate the goal and the breakout of estimated race-neutral and race-conscious
participation will. be required annually by June 1 in advance of the Federal fiscal
.year beginning October 1 for FHWA-assisted contracts. Submittals will be to the
Caltrans’ District Local Assistance Engineer (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:
The City of Palo Alto will develop a local bidders list. This list will be used to
determine the overall goal. As part of establishing an overall goal, the City of
Palo Alto will make good faith efforts to consult with minority, women and general
contractor groups; community organ_izations and officials; and business
organizations. With that consultation referenced, the-City of Palo Alto will submit
the draft overall goal information (amount of overall goal, the method to calculate
the goal, and the breakout of estimated race-neutral and race-conscious
participation) on June 1 to the Caltrans’ DLAE, for preliminary comments: 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.
Advertisements in newpapers, minority focus media, trade publications,, and
websites will be the normal media to accomplish this effort. The notice will
include addresses to which comments may be sent and addresses (including
offices and websites) where the proposal may be reviewed.
The overall goal resubmission to the Caltrans’ DLAE, will include a summary of
information and comments received during this public participation process and,
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 Agency Recipient 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
9
. meeting¯ any portion of the overall goal that is not projected to be met through the
use of race-neutral means.
Contract goals will be established only on those DOT-assisted contracts that
have subcontracting possibilities. Contract goals need not be established on
every such contract, and the size of contract goals will be adapted to the
circumstances of each such contract (e.g., type and location of work, availability
of DBEs to perform the particular type of work). The contract work items will be
compared with eligible DBE contractors willing to work on the project, A
determination will also be made to decide which items are likely to be performed
.by the prime contractor and which ones are likely to be performed by the
subcontractor(s). The goal will then be incorporated into the contract documents.
¯ Contract goals will be expressed as a percentage of the total amount of a DOT-
assisted contract.
XVl. 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:llosdbuweb.dot..qovlpro.qramsldbeldbe.htm.
XVII. Good Faith Efforts (§26.53)
Information to be submitted
The City of Palo Alto treats bidder’/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 Ave.
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:
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 DEB fir participation
4.Written and signed documentation of commitment to use a DBE
subcontractor whose participation it submits to meet a contract goal;
10
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
biddedofferor can demonstrate that it has done so either by meeting the contract
goal or documenting good faith efforts. Examples of goodfaith efforts are found
in Appendix A to part 26 which is attached.
The following personnel are responsible for determining whether a biddedofferor
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 PaloAito 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 I;)eing 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 Division
City of Palo Alto
250 Hamilton Ave.
Palo Alto, CA 94301
650-329~2450
carl yeats~city.palo-alto.ca.us
The reconsideration official will not have played any role in the original
determination that the bidder/offeror did not make document sufficient good faith
efforts.
As part of this reconsideration, the bidder/offeror will have the opportunity to
provide written documentation or argument concerning the issue of whether it
met the goal or mad adequate good faith efforts to do so. The biddedofferor will
have the opportunity to meet in person with the reconsideration official to discuss
the issue of whether it met the goal or made adequate good faith efforts to do.
The City of 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 DOT.
11
Good Faith Efforts when a DBE is Replaced on a Contract
The City of Pal0 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 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, 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 proceeding.
XVlll. Counting DBE Participation (§26.55)
The City of Palo Alto will count DBE participation toward overall and contract
goals asprovided in the contract specifications for the prime contractor,
subcontractor, joint venture partner with prime or subcontractor, or vendor of ¯
material or supplies. See the Caltrans’s Sample Boiler Plate Contract
Documents previously mentioned. Also, refer to Xl, A. "After Contract Award."
XlX. Certification (§26.83(a))
City of Palo Alto ensures that only DBE firms currently certified on the Caltrans’
directory will participate as DBEs in our program.
XX. Information Collection and.Reporting
Bidders List
The City of 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.
Data gathering to construct a bidders list will be accomplished by a public notice
advertised annually to solicit applicable .consulting firms and contractors who
participate in DOT-assisted contracts.
Monitorinq 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 or FHWA. This reporting
requirements also extends to any certified DBE subcontractor.
12
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.
Reportin.q to Caltrans
The City of Palo Alto - Final utilization of DBE participation will be reported to the
DLAE using Exhibit 17-F of the Caltrans’ LAPM.
Confidentiality
.The City of Palo Alto will safeguard from disclosure to third parties information
that maY reasonable be regarded as confidential business information, consistent
with Federal, state, and local laws.
Date:
City Manager
This .Disadvantaged Business Enterprise Program is accepted by:
DLAE
Date:
13
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 thatdid 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.
Ill.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 youfrom 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 takingappropriate steps to follow up initial
solicitations.
Selecting portions of the work to be performed by DBEs in order to increase
the likelihood that the DBE goals will be achieved. This includes, where
appropriate, breaking out contract work items into economically feasible units.
to facilitate DBE participation, even when the prime contractor might
otherwise prefer to perform these work items with its own forces.
14
Co 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.
F:
Not rejecting DBEs as being unqualified without sound reasonsbased 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 a rejection or non-solicitation of bids
in the contractoi"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.
Making efforts to assist interested DBEs in obtaining hecessary 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.
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 other 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
15
other bidders, you may view this, in conjunction with other factors, as evidence of
apparent successful bidder having made good .faith efforts.
16
LOCAL AGENCY BIDDER - DBE - INFORMATION
This information may be submitted with your bid proposal. If it is not, and you are the
apparent low bidder of the second or third low bidder, it.must be Submitted and received as
specified in Section 201.02B of the Special Provisions. Failure to submit the required DBE
information will be grounds for finding the proposal nonresponsive.
CO.-RTE.-K.P.:
CONTRACTOR NO.:
BID AMOUNT: $.
BID OPENING DATE:
BIDDER’S NAME:
DBE GOAL FROM CONTRACT:
DBE PRIME CONTRACTOR CERTIFICATION1: "
CONTRACT
ITEM NO.
ITEM OF WORK AND
DESCRIPTION OR
SERVICES TO BE
SUBCONTRACTED OR
MATERIALS TO BE
PROVIDED
DBE
CERT.NOo
IMPORTANT: Identify all DBE firms being claimed for
credit, regardless of tier. Copies of the DBE quotes are
required.
Names of the Firsl~ Tier DBE Subcontractors and their
respective item(s) of work listed above shall be ¯
consistent, where applicable, with the names and items
of work in the "List of Subcontractors" submitted with
your bid pursuant to the Subcontractors Listing Law and
Section 2-1.01,-"General," of the Spec.ial Provisions.
DBE prime contractors shall enter their DBE certification
number. DBE prime contractors shall indicate all work to
be performed by DBEs including work performed by its
own forces.
If 100% of item is not to be performed or furnished by
DBE, describe exact portion of item to be performed or
furnished by DBE.
See Section 2-1.02, "Disadvantaged Business
Enterprise," to determine the Credit allowed for DBE
firms.
NAME OF DBEs (Must be
certified on the date bids are
opened-include dBE address
and phone number)
Total Claimed
Participation
Signature of Bidder
Date (Area Code) Tel.No.
DOLLAR
AMOUNT
Person to Contact (Please
Type or Print)
DBE3
17
CITY OF PALO ALTO
OVERALL ANNUAL DBE GOAL ANDMETHODOLOGY
FEDERAL FISCAL YEAR 2000/01
Utilizing Another DOT Recipient’s Approved Goal
I.DOT-Assisted Contracting Program for FY 2000/01
The following table represents the City ofPalo Alto’s projected DOT-assisted contracts
by work category, Standard Industry Classification and dollar value of DOT-assisted
funds considered in the goal setting analysis:
WORK
CATEGORY
SIC
CATEGORY
ESTIMATED
DOLLAR VALUE
Consulting Services S 87 $676,000
Heavy Construction S 16 $3,846,500
TOTAL $4,522,500
% OF FEDERAL
FUNDING BY
WORK
CATEGORY
15%
85%
100% .
II.GOAL METHODOLOGY
Step 1: Determining a Base Figure
The City of Palo Alto will utilize the City of Sunnyvale’s Approved Overall Annual Goal
for DBE Participation as a means of establishing the City’s Base Figure of relative
availability of DBEs for FFY 2000/01. Sunnyvale’s Approved Overall Annual Goal was
set in accordance with 49 CFR Part 26.45 criteria and has a similar contracting program
within a similar market as the City of Palo Alto. "
Sunnyvale’s Approved Overall Annual Goal for DBE Participation for FFY 200/01 is as
follows:
RACE-NEUTRAL
METHOD
2%.
RACE-CONSCIOUS
METHOD
10%
ANNUAL DBE GOAL
12%
Step 2: Adjusting the Base Figure
The City of Palo Alto, however needs to make an immediate adjustment to Sunnyvale’s
goal to ensure that the base figure of relative availability of DBEs more correctly reflects
the City’s projected contracting program for FFY 2000/01.
Page 1
To do this the mix of the work categories was adjusted to reflect the respective dollar
values of consulting and contracting categories, and the Sunnyvale base fi .gure was
recalculated to more accurately reflect the City ofPaio Alto’s requirements. The result of
this recalculation requires the City of Palo Alto to makea +13% adjustment to the
Sunnyvale goal, as shown .below:
DETERMINATION OF THE ADJUSTED BASE FIGURE
FOR THE CITY OF PALO ALTO
(BASED ON DATA PROVIDED !N SUNNYVALE
DBE PROGRAM FOR FFY 2000/01)
SIC 87
¯ Engineers &.
Management Services
SIC 16
Heavy Construction
16
2986
lO
112
# Caltrans DBE Directol~ Firms
# Census Bureau Firms (CBP)
# Caltrans DBE Directory Firms
# Census Bureau Firms (CBP)
Percentage of DBEs in the overall marketplace available.to the City o fPalo Alto. The
percentages of DBEs have been weighted by the relative dollars to be spent in each SIC
code as shown in the following computation:
Palo Alto Modification of Sunnyvale Base Figure:
Adjusted
Sunnyvale ,,-=
Base Figure
.15 (16 DBES in SIC 87)
2986.
+ .85 (10 DBEs in SIC 16)
112
.15 (16/2986).÷ .85 (10/112)
=0.0008 +0.0758
0.0766 or 7.66%
The City of Palo Alto also assessed other known relevant evidence to determine what
additional adjustments were needed to narrowly tailor the Base Figure to the City of Palo
Alto’s marketplace and prior experience as follows:
¯Current capacity of DBEs (volume of work DBEs have performed in recent
years)
¯Another recipient/Local Agency’s approved DBE.Goal
Page 2
Palo Alto Goal Attainment Experience:
FFY 1993-94 thru 1995-96
FFY 1996-97 thru 1999-00
18%
25%
Average Goal Attainment 21.5%
Adjustment = Adjusted Base Figure + Average Goal Attainment
Adjustment = 7.66% + 21.50%
Adjusted Goal = 29%
RACE-NEUTRAL RACE-CONSCIOUS ANNUAL DBE GOAL
METHOD METHOD
5%24%29%
This overall goal is determined to be the level of DBE participation that would be
expected if there were no discrimination. Of the overall annual 29% goal for DBE
participation, the City of Palo Alto projects meeting 5% of the goal utilizing race-neutral
methods, including making efforts to assure that bidding and contract requirements
facilitate participation by DBEs and other small businesses; unbundling large contracts to
make them more accessible to small businesses; encouraging prime contractors to
subcontract portions of the work that they might otherwise perform themselves, and
providing technical assistance and other support services to facilitate consideration of
DBEs and other small businesses. Additionally, the goal will be attained through
aggressive sourcing, prime contractor Cooperation and stringent contract monitoring.
The remaining 24% of the goal is anticipated to be accomplished through raee-e0nscious
measures. These include establishing contract-specific goals on contracts with contracting
possibilities, when needed, to meet the City’s overall annual DBE goal.
The City will make a good will effort to achieve this goal, but the City’s most recent
experience indicates that a realistic goal is the 25% level we have experienced in the most
recent years.
Rgv. 2, 1/23/01
¯ Page 3
1
Attachment 2
RESOLUTION NO.
RESOLUTION OF THE COUNCIL OF THE CITY OF PALO
ALTO ADOPTING A 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 pri~r to approval by Caltrans and the
United States Department of Transportation ("DOT") of any
request for federal funds; and "
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 29 percent and shall
cover the period from July I, 2000 to June 30, 2001; 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 fiscal year 2000-2001 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 follows:
SECTION i. The Council hereby adopts the "Disadvantaged
Business Enterprise (DBE) program 2000-2001 City of Palo Alto",
a copy of which is attached hereto and incorporated herein by
reference.
//
//
//
//
//
010416 c10032440 1
SECTION 2. The Council hereby estab!~$~es the overall
goal of 29 percent for DBE participation in ~t~: performance of
contracts financed in whole or in part with DO~c~unds during the
period of July I, 2000 to June 30, 2001.
INTRODUCED AND PASSED:
AYES:
NOES:
ABSENT:
ABSTENTIONS:
ATTEST:APPROVED:
City Clerk
APPROVED AS TO FORM:
Senior Asst. City Attorney
Mayor
o
City Manager
Director of Administrative
Services
Disadvantaged Business
Enterprise Liaison Officer
010416 cl 0032440 2