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HomeMy WebLinkAboutAdmin Order 44-93-05 Administrative Order No. 44 -93 -05 of the City Manager of the City of Eugene, Oregon ESTABLISHING GUIDELINES AND PROCEDURES FOR IMPLEMENTATION OF THE CI1Y OF EUGENE'S AFFIRMATIVE ACTION PLAN FOR DISADVANTAGED BUSINESS ENTERPRISE PARTICIPATION. The City Manager of the City of Eugene finds that: A. The City Council of the City of Eugene has adopted a Resolution establishing the City's affirmative action plan for Disadvantaged Business Enterprise (DBE) participation in federally funded programs. B. In order to assure compliance with current federal regulations relating to contracts financed in whole or in part by federal funds, the Council has requested that I adopt procedures for implementation of the City's Affirmative Action Plan for Disadvantaged Business Enterprise Participation. Now, therefore, based on the above findings, and pursuant to Resolution No. 4331 adopted on June 8, 1992 by the City Council of the City of Eugene, I hereby adopt the following guidelines and procedures for implementation of the City's Affirmative Action Plan For Disadvantaged Business Enterprise Participation with respect to the performance of City contracts financed in whole or in part by federal funds: City of Eugene Guidelines and Procedures Implementing the City of Eugene's Aftirmative Action Plan For Disadvantaged Business Enterprise Participation A. Policy Compliance. These guidelines and procedures are intended to facilitate compliance with federal and state regulations and the adopted policy of the City of Eugene that Disadvantaged Business Enterprises (DBBs) have the maximum opportunity to Administrative Order - 1 participate in the performance of contracts financed in whole or in part by federal funds. All contracts financed in whole or in part by federal funds of which the City is the grantee, recipient or subrecipient (hereinafter "recipient") will be administered in accordance with the guidelines and procedures set forth in this order. B. Resoonsibility for DBE Pro2ram Administration. (1) Liaison Officer. The Deputy City Manager is designated as the City's DBE Liaison Officer. The DBE Liaison Officer will be responsible for development and implementation of the DBE program and for ensuring that the City meets federal DBE requirements on all City contracts financed in whole or in part by federal funds. (2) Coordinators. The DBE Liaison Officer may delegate the responsibility for technical assistance and the development and implementation of this DBE program to staff. DBE coordinators will be designated within each Department set forth on Attachment A hereto, and will maintain a record-keeping system to identify and assess DBE contract awards and the prime contractor's progress in achieving DBE subcontract goals on federal aid projects. Department DBE coordinators will be responsible for management of the respective Department's DBE program on a day-to-day basis and for carrying out DBE affirmative action plan activities set forth herein. (3) Dissemination of Information. The Development Division of the City's Planning & Development Department will be responsible for disseminating information on assistance activities that are available for DBEs, and for insuring that DBEs are provided an equitable opportunity to be heard and to bid on all federally funded City projects. C. DBE Eli2ibility Determination. As set forth in Section 4 of the Council's Resolution No. 4331, DBEs must be certified by the State of Oregon's, Office of Minority, Women and emerging Small Business (OMWESB) or other agencies acceptable to the participating federal agency. The determination by OMWESB of whether a firm is owned and controlled by one or more disadvantaged individuals and eligible to be certified as a DBE is currently based on the following standards: (1) The size of the firm cannot exceed the following limits: (a) General Contractor: Average annual gross receipts for the three preceding fiscal years not to exceed $15.370 Million; (b) Special Trade Contractor (plumbing, excavating, painting, etc.): Average annual gross receipts for the three preceding fiscal years not to exceed $ 7 Million; (c) Engineering. Architectural and Surveying Services: Average annual gross receipts for the three preceding fiscal years not to exceed $2.5 Administrative Order - 2 Million. General Contractor's standards are established by Section 106( c) of the Surface Transportation and Uniform Relocation Assistance Act of 1987 (STURRA) and are reviewed by the U.S. Department of Transportation. All other standards are established by the Small Business Administration (SBA) and apply to all government subcontractors. (See 13 CFR, Part 121.) A firm that exceeds these gross receipts levels is not eligible for certification, even if it is owned and controlled by socially and economically disadvantaged individuals. (2) The firm's majority owner(s) must be member(s) of a disadvantaged group and be so regarded by other members of that group in the area. Members of the following groups are presumed to be disadvantaged (unless or until their status is successfully rebutted by OMWESB or a third party): (a) Black Americans - Origins in any black racial groups of Africa; (b) Hispanic Americans - Mexican, Puerto Rican, Cuban, Central or South American, Portuguese or other Spanish culture or origin, regardless of race; (c) Asian Pacific Americans - Origins in Japan, China, Taiwan, Korea, Vietnam, Laos, Cambodia, the Philippines, Samoa, Guam, the U.S. Trust Territories of the Pacific, and the Northern Marianas; (d) Native Americans - American Indians, Eskimos, Aleuts or Native Hawaiians; ( e ) Asian- Indian Americans - Origins in India, Pakistan or Bangladesh; (t) Women. (3) Individuals identified by the Small Business Administration to be socially and economically disadvantaged under Section 8( a) of the Small Business Act as amended [15 USC 637(A)] are conclusively presumed to be socially and economically disadvantaged. (4) Firms whose majority owners do not meet the above-mentioned criteria but who can establish their status as socially and economically disadvantaged also may be certified under the DBE program based on the following criteria (49 CPR 23, Subpart 0, App. C): (a) Are residents of a geographic area having long-term chronic unemployment and economic depression; (b) Is an individual with a chronic physical disability which restricts Administrative Order - 3 professional acceptance, employment, or business mobility; ( c) Is an individual whose cultural or social background resulted in chronic underemployment, limited educational opportunities or personal deprivation. (d) Is an individual who has experienced low income status because of apparent discriminatory practices. (5) The disadvantaged firm must: (a) Be an independent business which is not inextricably associated with another firm through ownership, affiliation, sharing of employees, facilities, profits, and losses. The firm must be able to function as a viable business in the larger business community and not be dependent on any other firm( s) for its survival. (b) Be owned by one or more socially and economically disadvantaged individuals with at least 51 percent of the firm owned by the socially and economically disadvantaged members of the frrm. The ownership must be real, substantial, and continuing, with the management and daily business operation controlled by one or more of the socially and economically disadvantaged individuals. Ownership documents must reflect the owner's right/obligation to share proportionately (at least 51 percent) in the responsibilities, risks, and profits. Contributions of capital or expertise by the disadvantaged owner to acquire interest in the firm must be real and substantial. Securities cannot be held in trust or by a guardian. (6) The disadvantaged owner( s) must demonstrate both: (a) Operational control of the business and the ability and authority to independently make basic decisions with respect to daily operations; and (b) Managerial control, with the power to hire and fire employees and to make independent and unilateral major business decisions on matters of management, policy and operations which guide the future and destiny of the business. (7) Ajoint venture is eligible for certification hereunder if the DBE partner of the joint venture meets the standards for an eligible D BE set forth above, is responsible for a clearly defined portion of the work to be performed, and shares in the ownership, control, management responsibilities, risks, and profits of the joint venture. D. DBE Directorv. In addition to utilizing the State of Oregon's OMWESB current DBE directory, the City will make special efforts to identify and maintain a directory of DBEs who may qualify for certification and will encourage those DBEs to pursue Administrative Order - 4 certification through the State of Oregon's OMWESB. The City shall utilize local media and other outreach methods to identify qualified DBEs. E. DBE Goals. Depending on the source of the federal funds, the City as a recipient of federal funds, may be mandated by federal regulations to encourage DBE participation, to establish the percentage goals for awards to DBEs, or to agree to such goals established by the appropriate federal or state agencies. Overall goals shall be submitted to the appropriate regional federal and state agencies for approval. When required to establish overall and specific contract goals for DBE participation, the City will review the following factors: (1) Past results of dollar volume percentage of DBE participation in federally funded City contract awards and non-DBE dollar volume/percentage awards; (2) The projected types and number of contracts projected which will utilize federal funds; (3) (4) (5) projects; Specific contract specifications of current Federally-funded projects; The directory of DBEs required by Section D above; Identified eligible DBEs in geographic areas of current federally-funded (6) The project size, duration, and dollar value, taking into consideration: (a) The nature of the project (type of work and potential scheduling and coordination of work); (b) Availability of minority and women owned firms that perform subcontractable items of work; ( c) Project location; and ( d) Industry standards in performance of particular types of work. F. Procedures to Ensure that DBEs have an Equitable OpPOrtunity to Compete for Contracts and Subcontracts. In order to help prepare women and minority owned businesses active in the Eugene regional area to compete effectively for contracts and subcontracts, the City will: (1) Provide services related to the identification and assistance related to certification of DBEs, intended to increase the total number of certified DBEs participating in federally funded projects; (2) Coordinate with other agencies to provide workshops and services Administrative Order - 5 related to estimating, bidding, bonding, and marketing DBE businesses to primary contractors; (3) Coordinate with other agencies to provide workshops and services designed to assist DBEs to obtain bonding and financial assistance; (4) Coordinate with other agencies to provide workshops and services related to the procedures for verification, to ensure that only bona fide DBEs are certified as eligible for participation in the DBE program; (5) Arrange solicitations, times for the presentation of bids, quantities, specifications, and delivery schedules in a manner designed to ensure maximum DBE participation; (6) Conduct information and communications programs on City contracting procedures and specific contracting opportunities in a timely manner. Such programs shall be bilingual where appropriate; (7) Notify prime contractors of the requirements of the City's Affirmative Action Plan for DBE participation in federally funded City contracts. G. Reauirements for: Biddin2 Process for Federallv Funded City Contracts. (1) In order to ensure compliance with the DBE requirements placed on subrecipients, contractors and subcontractors, the City will include the following requirements in the. bid documents for all federally funded City contracts, unless contrary to law: (a) All prime contractors must meet the assigned DBE goal or demonstrate good faith efforts to utilize other DBE subcontractors. (b) At the time of submission of bids, all bidders/proposers shall submit a list of certified DBE firms they intend to use in performance of the contract. These lists shall set forth the work to be performed by the DBE and the estimated dollar value of that work. If the bid does not meet the assigned DBE goal, the bidder/proposer shall submit an explanation of a good faith effort to utilize other DBE contractors. Standards currently used by the City to assess good faith effort are set forth on Attachment B. (2) Upon award of the contract, the City shall transmit a letter to the contractor listing the names and amounts of committed DBEs on the project. A similar letter shall be mailed to each committed DBE stating the project name and dollar amount that has been committed. H. Procedures if DBE Participation is Reduced Prior to Contract Execution. In the event any circumstances arise after the bid opening, but prior to execution of the contract, which reduce the DBE participation on that project, the City shall require that the Administrative Order - 6 following procedures be followed: (1) The contractor shall notify the Department's DBE coordinator of a reduction of DBE participation in the project and request a meeting with the City's involved Department DBE coordinator and City DBE Liaison officer. (2) At this meeting, the contractor shall document the circumstances which brought about the reduction in DBE participation and the contractor's plans to bring DBE participation back to the bid level. (3) The City Department's DBE coordinator and the City's DBE Liaison Officer or designee shall evaluate the circumstances resulting in the reduction and determine if the reduction warrants assessment of any sanctions or other remedies set forth in the specifications for bid or as provided by law. I. Sanctions. The contractor must take all necessary and reasonable steps to ensure that DBEs have the maximum opportunity to perform. The contractor shall be required by contract provisions to meet the DBE participation goals or to demonstrate good faith efforts to meet the goals, to enable committed DBEs to perform, to ensure that DBEs perform a commercially useful function, and to follow the proper procedures for DBE substitution. Specific sanctions for violation shall be set forth in each contract. J. Reauirements for Contract Performance. In order to ensure compliance with the DBE requirements placed on subrecipients, contractors and subcontractors, the City will include the following requirements in all federally funded contracts, where applicable and appropriate, unless contrary to law: (1) Contractor's DBE Liaison Officer. The contractor shall designate a DBE Liaison Officer to be responsible for and administer the contractor's DBE program. The name of this individual shall be provided to the City at the Preconstruction Conference. (2) Submission of Subcontracts. The contractor must enter into subcontracts with the DBEs identified in the Contractor's DBE Participation Commitment and submit the same to the City prior to the start of work under the subcontract. All required federal and state provisions must be included in the subcontracts. All subcontracts must be approved by the Department DBE coordinator prior to commencement of the work for compliance with the requirements of this policy. (3) Commerciallv Useful Function (CUF). The contractor shall ensure that all committed DBEs working on the project perform a commercially useful function (CUP). Only expenditures to DBEs that perform a CUP may be counted toward achievement of the contractor's DBE participation goal. The requirement that a CUF be performed is a contract provision which, if breached, may result in specific consequences or sanctions authorized in the contract. (a) A DBE is considered to perform a CUP when the DBE is responsible for execution of a distinct element of the contract work and is carrying out the Administrative Order - 7 responsibilities by actually performing, managing, and supervising the work involved. To determine whether a DBE is performing a CUF, project management and the City's DBE Liaison or designee may evaluate the amount of work subcontracted, industry practices, and other relevant factors. The work performed by a DBE must be work that would reasonably be expected to be subcontracted. It may not be added to the project, or artificially separated from a larger element of the work solely for the purpose of meeting the DBE goal. The DBE must manage the work under the subcontract, including scheduling, ordering materials and supplies, preparing and submitting all required reports and payroll documents, and hiring and firing personnel. The DBE also must either directly supervise the work on a daily basis, or hire a skilled superintendent to do so. Supervision of the work by personnel not under the control of the DBE or by personnel normally employed by another contractor does not constitute performance of a CUF. (b) The DBE must employ a labor force separate and apart from that employed by the prime contractor, other subcontractors on the project or their affiliates. If the DBE expects to use any equipment or personnel of the prime contractor or any other contractor, the contractor must submit a written plan to the project manager. The plan must be submitted and approved prior to commencement of the DBE's work, and must describe in detail the shared items and personnel. Equipment must be rented or leased at competitive rates, and copies of the rental agreements must be furnished to the project manager. Personnel of another firm may only be used to augment the DBE's work force, on a limited basis, when specialized skills are required, or subcontracted for pursuant to Subsection (4) of this section. The plan shall be evaluated by the City to ensure that no violation with respect to the performance of a CUP is contemplated, and written approval must be obtained from the City prior to the start of work. (c) City project management personnel, in conjunction with the City's DBE Liaison or designee, will monitor compliance with the CUP provisions of contracts. In monitoring compliance, the City will follow procedures analogous to the following pertaining to highway construction projects. City project management personnel will complete the Disadvantaged Business Enterprise Commercially Useful Function review form in the following circumstances: 1. On all projects with DBE participation goals; 2. With respect to each DBE whose work is to be counted toward achievement of DBE participation goals; 3. Whenever there is any indication that a DBE may not be performing a commercially useful function; 4. During the DBE's peak performance period; 5. Whenever a DBE performs work which varies from the bid items indicated in the contractor's Commitment Forms; Administrative Order - 8 6. Whenever a change in the performance of the DBE occurs; 7. Whenever a DBE which was not listed in the contractor's Commitment Forms is employed on the project; 8. Whenever a substitution of work or a change order occurs which affects work to be accomplished by a DBE; and 9. Whenever a replacement or substitution of a DBE occurs. (4) Sub-subcontracting. All sub-subcontracts shall be submitted to the City and consented to by the Project Management Personnel and the Department DBE coordinator prior to the start of work under the sub-subcontract. DBE subcontractors wishing to sub-subcontract a portion of their subcontract work shall submit to the City along with their sub-subcontract request satisfactory documentation regarding the: (a) DBE's ability and capability of assuring continuous direction, control and responsibility for the sub-subcontract work on a daily basis, (b) Anticipated work schedule, superintendency, labor force and equipment required to perform the sub-subcontract work, and (c) Statement of the DBE's perspective concerning the sub-subcontracted work, affirming that it is consistent with normal industry practices. DBE subcontractors shall be presumed not to be performing a CUP when they sub- subcontract a significantly greater portion of the work of their subcontract than would be expected on the basis of normal industry practices. The DBE may present evidence to rebut this presumption to the City and the City's decision on the rebuttal of this presumption is subject to review by the appropriate state and federal agencies. (5) Substitution of DBE. The contractor must notify and obtain the written approval of the City project management personnel and City DBE Liaison or designee prior to replacing a DBE or making any other change in the participation indicated in the original commitment. Approval for replacement will be granted only if it is demonstrated that the initial DBE is unable or unwilling to perform and that the contractor exercised good faith efforts to enable the DBE to perform. The contractor's ability to negotiate a more advantageous contract with another subcontractor shall not be considered a valid basis for replacement. Requests to substitute committed DBEs shall be scrutinized closely. The contractor must document efforts made at the time of commitment to determine that the DBE was capable of performing the work and subsequent efforts made to enable the DBE to perform. The evidence must show that the contractor investigated the DBE's capacity and capability of performing at the time of the commitment. The DBE must have possessed or have had access to adequate resources and work force to perform the work for which committed. The notice from the contractor requesting replacement of a DBE must include the following: Administrative Order - 9 (a) Documentation of the contractor's investigation at the time of the commitment of the DBE's capacity to perform the work; (b) Documentation of the contractor's good faith efforts to enable the DBE to perform; ( c) Documentation that describes and cites specific actions or inaction of the DBE which constitutes the unwillingness or inability to perform; (d) Identification of the DBE proposed for replacement and the [B]lPd items and amounts to be performed by the replacement; and ... (e) replaced. The total dollar amount, per bid item, paid to date to the DBE to be The contractor must concurrently notify the DBE to be replaced of the request to substitute, and request that the DBE present to the City, within a reasonable period of time, a response to the contractor's request for substitution. The City shall not approve the replacement until a written response has been received from the DBE to be replaced, or a reasonable time period has elapsed. The contractor and the DBE shall be notified in writing of the City's decision. If the contractor is unable to replace the DBE with another certified DBE, the contractor must demonstrate to the City its good faith efforts to obtain DBE participation on the originally committed or other bid items. If good faith efforts cannot be demonstrated, sanctions or other remedies provided for in the contract may be imposed. The contractor's documentation concerning good faith efforts must include, at a minimum, written evidence of notification to DBEs soliciting their interest in the contract and of negotiations with DBEs for specific sub-bids. The contractor must list the names, addresses and telephone numbers of the DBEs contacted, a description of the information provided to DBEs regarding the work to be performed and a statement of the results of those contacts. (6) Payments to DBE's. The contractor must maintain records of all subcontracts entered into with DBEs and records of materials purchased from DBE suppliers. Such records shall show the name and business address of each DBE subcontractor or vendor and the total dollar amount actually paid each DBE subcontractor or vendor. The contractor shall submit to the Project Manager's office an affidavit certifying that payment was made to the DBE subcontractor or vendor, to be signed by both the prime contractor and the DBE subcontractor or vendor. Such an affidavit shall be submitted during the project at any time a payment is made to a DBE and a summary certification affidavit shall be submitted at the completion of the project. K. Procedure When Contractor Fails to Meet DBE Obli2ations. (1) If a complaint is submitted to the City, or if the DBE Liaison Officer or Administrative Order - 10 designee finds there is reasonable cause to believe that a contractor or subcontractor is not meeting its DBE obligations at any point during the course of the project, the DBE Liaison Officer or designee will: (a) Perform, or cause to be performed, a desk audit review of all material and information concerning the contractor/subcontractor's DBE performance; (b) Interview any individuals and view any project sites deemed necessary; ( c) Upon completion of the review, find the contractor or subcontractor in compliance or not in compliance in certain specific respects. (2) The Department DBE coordinator shall notify the contractor or subcontractor of the results of the review, and work with the contractor or subcontractor to rectify, within a reasonable period of time, the problems resulting in a finding of non-compliance. (3) Failure of the contractor to correct the deficiencies identified by the DBE Liaison Officer or designee within the time required in the notice to the contractor will result in the imposition of any sanctions as authorized by the contract. L. Computation of DBE Participation Toward Meetin2 Contract Goals. (1) The credit to be allowed toward meeting the DBE participation contract goal varies with the type of DBE firm as follows: (a) Construction firms - 100%: supply labor and materials to perform a discrete element of the work. (b) Manufacturers - 100%: must produce product from raw material or substantially alter product before sale. (c) Equipment rental firms - 100%: equipment must be owned by and registered to D BE. (d) Regular Dealers - 60%: must assume actual and contractual responsibility for materials. (e) Brokers. packagers. ad hoc suppliers. manufacturers' representatives - Net Fee: no credit for materials, transportation, or other costs. (t) Joint Venture: The contractor may count toward its DBE goal only that portion of a joint venture equal to the percentage of ownership and control exercised by the DBE partner. Should the joint venture be comprised of DBEs only, the entire contract award amount shall be counted toward meeting the DBE assigned goal on the project. Joint ventures bidding as primes must also meet the assigned project goal for D BEs. Administrative Order - 11 (2) The contractor shall count toward meeting its DBE goal only those expenditures originally committed to DBEs prior to contract award or through change orders, those on which committed DBEs perform a commercially useful function (CUP) on the project, and on those work areas in which the DBE has been certified. A subcontracting arrangement which inflates DBE participation for the sole purpose of meeting contract goals will not be accepted by the City. A DBE firm acting as a middle person or passive conduit (where the activity is not standard industry practice) is essentially considered a "broker" and is not performing a CUP for purposes of meeting the DBE contract goal. Second-tier DBE subcontracts (whether with a DBE or non-DBE subcontractor) shall be counted toward the prime contractor's DBE goal provided it was listed in the original DBE commitment prior to bid award or through a change order. M. Anpeals. The City shall provide by contract any appeal right required by law. Dated and effective this 2 ( day or jL~--f ;;J ' .~~~.-: / Administrative Order - 12 EXHIBIT IIBII If the contract goal specified in the solicitation is not met, the apparent successful competitor will be required to submit documentation of the efforts it made. The City will then determine whether these are "good faith efforts." The following criteria will be used: 1. Whether the contractor attended any pre-solicitation or pre-bid meetings that were scheduled by the recipient to inform Disadvantaged Business Enterprises (DBE) of contracting and subcontracting opportunities; 2. Whether the contractor advertised in general circulation, trade associa- tion, and minority-focus media concerning the subcontracting opportunities; 3. Whether the contractor provided written notice to a reasonable number of specific DBEs that their interest in the contract was being solicited, in sufficient time to allow the DBEs to participate effectively; 4. Whether the contractor followed up initial solicitations of interest by contacting DBEs to determine with certainty whether the DBEs were interested; 5. Whether the contractor selected portions of the work to be performed by DBEs in order to increase the likelihood of meeting the DBE goals (including, where appropriate, breaking down contracts into economically feasible units to facilitate DBE participation); 6. Whether the contractor provided interested DBEs with adequate informa- tion about the plans, specifications, and requirements of the contract; 7. Whether the contractor negotiated in good faith with interested DBEs, not rejecting DBEs as unqualified without sound reasons based on a thorough investigation of their capabilities; 8. Whether the contractor made efforts to assist interested DBEs in obtaining bonding, lines of credit, or insurance required by the City or contractor; and 9. Whether the contractor effectively used the services of available minority community organizations; minority contractors' groups; local, state, and federal minority business assistance offices, and other organizations that provide assistance in the recruitment and placement of DBEs. The following points apply to good faith effort determinations: 1. Good faith efforts are those that could reasonably be expected to result in goal attainment by a bidder who aggressively and actively seeks to obtain DBE participation. 2. The above list of nine efforts are recommended by the City as ones that bidders/proposers may make to obtain DBE participation. It does not represent a mandatory checklist of required actions; no one or combina- tion is required in all cases.