Texas Register
and other media as appropriate. Individual
contract goals will be established
as necessary
to achieve the
overall goal.
(1)
Annual goals.
(A)
DBE goals. Each year the department will establish an agency
DBE goal
pursuant to the two-step process specified in 49 CFR §26.45.
The first step will be to establish a base figure for the relative availability
of DBEs. The second step will be to examine relevant evidence available in
the department's jurisdiction to determine what adjustment, if any, is needed
to the base figure in order to arrive at the overall goal. The department
will accept public comments regarding the goals and the methods for establishing
the goals for at least 45 days from the publication date of the notice in
the
Texas Register
. The maximum feasible portion
of the department's overall DBE goal will be met using race-neutral means.
Quotas will not be used in the administration of the department's DBE Program
[
developed after a review of results of previous efforts to contract
with DBEs, an estimate of the number and types of contracts to be awarded
in the next federal fiscal year, and a projection of the availability of DBEs
to compete for contracts
]. The annual goal will be consistent with the
federal requirements of the U.S. Department of Transportation[
,
]
and compatible with other applicable state and federal laws.
(B)
HUB goals. The department
shall make a good faith
effort to increase the contract awards to historically underutilized businesses.
The department will establish agency HUB contracting goals based on the disparity
study described in Government Code, §2161.002(c)
[
will periodically
establish agency HUB contracting goals consistent with GSC goals set forth
at Title 1, Texas Administrative Code, §111.13 (Annual Procurement Utilization
Goals)
].
(2)
Contract goals. Individual contracts [
having
the potential for DBE/HUB participation
] are assigned
DBE/HUB
[
participation
] goals based on the availability of qualified DBE/HUBs,
work site location, dollar value of the contract, and type of work items specified
in the contract.
[
(A)
DBE goals.
] The department will
assign individual contract goals for
DBE/HUB
[
DBE
] participation
in highway improvements, building construction and maintenance, professional
services, aviation, public transportation, private consultant services, and
purchasing contracts
to cumulatively meet the annual DBE/HUB goals that
are not being met through race-neutral means
.
[(B)
HUB goals. Pursuant to Title 1, Texas
Administrative Code, §111.13 (Annual Procurement Utilization Goals),
the department will establish HUB goals for individual contracts.]
§9.55.Good Faith Effort.
(a)
The department will make a good faith effort to meet or
exceed the annual goals as described in §9.54 of this title (relating
to DBE/HUB Goals).
(b)
The obligation of the contractor is to make a good
faith effort to meet the contract goal.
When a specific contract goal
is not being met by a contractor, the contractor must document the
good
faith efforts
[
steps
] taken [
in good faith
] to
obtain DBE/HUB participation.
(1)
DBE. The department will consider the
contractor to have made a good faith effort when it complies with Appendix
A to 49 CFR Part 26. If the department determines that the contractor has
failed to meet the good faith effort requirements, the contractor will be
given an opportunity for reconsideration by a division director that did not
have any role in the original determination. The contractor will be given
the opportunity to provide written documentation and/or meet with the division
director to discuss the issues. A written determination will be issued to
the contractor by the division director. The determination is not administratively
appealable to the U.S. Department of Transportation (DOT).
[(1)
DBE. The department will consider
the following efforts to determine if a contractor has made a good faith effort
to meet the DBE contract goal. The list provided is not intended to be mandatory,
nor is the list intended to be exclusive. The department will examine the
contractor's efforts and consider the extent of the efforts concerning:]
[(A)
attendance at a pre-bid meeting;]
[(B)
advertisement of the contracting opportunity to the organizations
on the clearinghouse list;]
[(C)
written notification of the contracting opportunities
available to five firms or 10%, whichever is greater, of the DBE firms listed
in the DBE directory provided in §9.56(k) of this title (relating to
DBE Certification):]
[(i)
under each category of work identified by the contractor
for subcontracting; and]
[(ii)
as willing to work in the district where the project
is located.]
[(D)
follow-up with DBE firms to determine interest in the
initial solicitation;]
[(E)
selection of work that could be performed by DBE firms;]
[(F)
efforts to negotiate with DBE firms for specific categories
of work;]
[(G)
reasons for rejecting a bid or proposal submitted by a
DBE firm;]
[(H)
efforts made to provide information to DBEs concerning
obtaining bonds and insurance;]
[(I)
effective use of 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 certified by the department; and]
[(J)
other efforts relevant to meeting the goals.]
(2)
HUB. The department will consider
as good
faith efforts all documented explanations that are submitted and that describe
a contractor's failure to meet a goal, including:
(A)
advertising in general circulation, trade
association, and/or minority/women focus media concerning subcontracting opportunities;
(B)
providing written notice to at least five
qualified HUBs allowing sufficient time for HUBs to participate effectively;
(C)
dividing the contract work into reasonable
portions in accordance with standard industry practices;
(D)
documenting reasons for rejection or meeting
with the rejected HUB to discuss the rejection;
(E)
providing qualified HUBs with adequate
information about bonding, insurance, plans, specifications, scope of work,
and the requirements of the contract;
(F)
negotiating in good faith with qualified
HUBs, not rejecting qualified HUBs who are also the lowest responsive bidder;
and
(G)
using the services of available minorities
and women, community organizations, contractor groups, local, state, and federal
business assistance offices, and other organizations that provide support
services to HUBs
[
a contractor to have made a good faith effort
by complying with Title 1, Texas Administrative Code, §111.14 (Subcontracts)
].
§9.56.DBE Certification.
(a)
Responsibility.
The department will participate in
a Unified Certification Program (UCP) pursuant to 49 CFR §26.81. A UCP
agreement with other DOT recipients in the state will be signed by the department
by March 2002. The agreement will provide one-stop shopping for firms applying
for DBE certification so that an applicant is required to apply only once
for a DBE certification that will be honored by all DOT recipients in the
state. Within 90 days from the date of the request, the department will certify
a small business as a DBE if it qualifies with all certification standards
of Subpart D of 49 CFR Part 26. With written notification to the firm, the
department may extend the time period for an additional 60 days. Firms are
certified for a three-year period. An annual affidavit, affirming that there
have been no changes affecting the firm's eligibility, is required. The department
must be notified, in writing, within 30 days of any change affecting the eligibility
of a firm. The notice must take the form of an affidavit sworn to by the owners
of the firm and properly notarized and executed under penalty of perjury of
the laws of the United States.
[
The department will certify a small
business as a DBE, upon request, if it qualifies with certification standards
listed in subsection (d) of this section. Firms are certified for a two year
period with an annual update required.
]
(b)
(No change.)
(c)
Out of state firm. An out of state firm must be certified
by the
UCP in the state in which it maintains its principal place of
business
[
resident state department of transportation or equivalent
agency
].
(d)
Certification standards.
A firm must meet each of
the eligibility standards of Subpart D of 49 CFR Part 26 to be certified.
A firm seeking certification has the burden of demonstrating by a preponderance
of the evidence that it meets the certification standards. DBE firms and firms
seeking DBE certification shall cooperate fully with department requests for
information relevant to the certification process. Failure or refusal to provide
such information is a ground for a denial or removal of certification. The
department will safeguard from disclosure to unauthorized persons information
gathered as part of the certification process that may reasonably be regarded
as proprietary or other confidential business information. Confidential information
may be provided to a third party only with the written consent of the individual
to whom the information pertains. An exception to this requirement is when
personal financial information would have to be provided to DOT as part of
the administrative record. The DOT will treat the information as confidential.
(1)
Applicant firms must submit a signed,
notarized certification that each presumptively disadvantaged owner is, in
fact, socially and economically disadvantaged.
(2)
Each socially and economically disadvantaged
individual making up the 51% social and economic disadvantaged ownership in
the applicant firm must submit a signed, notarized statement of personal net
worth, with appropriate supporting documents. If the personal net worth statement
exceeds $750,000, the individual's presumption of economic disadvantage is
rebutted, the individual is no longer eligible for participation in the DBE
program and cannot regain eligibility
[
A firm must meet each of
the following eligibility standards to be certified
].
[(1)
Size. The firm must be a small business
concern.]
[(A)
The firm must meet the criteria included in §3 of
the Small Business Act and 13 CFR Part 121 to be considered a small business
concern. A firm will be required to furnish financial documentation for up
to four complete years, if applicable.]
[(B)
If a firm is not a small business concern according to
the standards promulgated in 13 CFR Part 121, the department will not certify
the firm as a DBE even though it may be owned and controlled by minorities,
women, or socially and economically disadvantaged individuals, and is eligible
in all other respects.]
[(2)
Social and economic disadvantage
status. At least 51% of the firm or, in the case of any publicly owned business,
at least 51% of the stock must be owned by one or more socially and economically
disadvantaged individuals. The following groups are eligible for social and
economic disadvantage status.]
[(A)
An applicant who has been approved as an SBA 8(a) firm.]
[(B)
An applicant may establish his or her membership in a
bona fide minority group on the basis of the individual's claim that he or
she is a member of a minority group and is so regarded by that particular
minority community. The department will not certify a firm as a DBE if it
determines the applicant's claim to be invalid.]
[(C)
If an individual is not a member of a minority group or
a woman, but can prove social and economic disadvantage on an individual basis
using standards set forth in Appendix C to Subpart D, Guidance for Making
Determinations of Social and Economic Disadvantage, 49 CFR Part 23, the department
will consider that individual to be socially and economically disadvantaged.]
[(3)
Independent, operational business.
A business must be existing, operational, independent, and for-profit. The
department will consider the date the business was established, the adequacy
of its resources and its expertise for the work of the contract and the degree
to which financial, equipment leasing, and other relationships with non-minority
firms vary from industry practice. Recognition of the business by the Internal
Revenue Service as a separate entity for tax or corporate purposes is not
in itself sufficient for DBE certification.]
[(4)
Ownership control. The management
and daily business operations must be controlled by one or more of the socially
and economically disadvantaged individuals who own it. The ownership and control
by minorities or women must be real, substantial, and continuing, and must
go beyond the form of the ownership as reflected in its ownership documents.]
[(A)
The minority or women owners must enjoy the customary
incidents of ownership and must share in the risks and profits commensurate
with their ownership interests, as demonstrated by an examination of the substance
rather than the form of the arrangement.]
[(B)
The minority or women owners must possess and exercise
the power to direct or cause the direction of the management and policies
of the firm and to make the day-to-day as well as major decisions on matters
of management, policy, and operations.]
[(C)
A firm must not be subject to any formal or informal restrictions
which limit the customary discretion of the minority or women owners, including,
but not limited to, bylaw provisions, partnership agreements, third-party
agreements, or charter requirements for cumulative voting rights or other
rules that prevent the minority or women owners from making a business decision
of the firm without the cooperation or vote of any owner who is not a minority
or woman.]
[(5)
Management responsibility and
control. If the owners of a firm who are not minorities or women are disproportionately
responsible for the operation of the firm, the firm will not be considered
a DBE. Where the actual management of the firm is contracted out to individuals
other than the owner, those persons who have the ultimate power to hire and
fire the managers will be considered as controlling the business.]
[(6)
Securities. The minorities or women
must directly hold all securities constituting ownership and/or control of
a corporation for purposes of establishing it as a DBE. The department will
not consider securities held in trust for any reason in determining the ownership
or control of the corporation.]
[(7)
Real and substantial contribution.
The minority or women owners' contributions of capital or expertise to acquire
their interests in the firm must be real and substantial. A promise to contribute
capital, a note payable to the firm or its owners who are not socially and
economically disadvantaged, or the participation as an employee rather than
a manager constitute insufficient contributions by the minority or women owners.]
[(8)
Special considerations. The department
will give special consideration and careful review to:]
[(A)
newly formed firms and firms whose ownership and/or control
has changed since the date of the advertisement of a contract under which
the new firm will contract to determine reasons affecting the timing of the
formation of or change in ownership or control;]
[(B)
previous and/or continuing employer-employee relationship
between or among present owners to determine that the minority or woman owner
has management responsibilities and capabilities described in subsection (d)(4)-(6)
of this section; and]
[(C)
any relationship between a DBE and a non-DBE business
having an interest in the DBE to determine if the interest of the non-DBE
conflicts with ownership and control requirements.]
(e)
Certification categories.
(1)
Schedule A. This category includes, but is not limited
to, trucking firms, manufacturers, regular dealers, construction firms, general
contractors,
franchisees or licensees,
and specialty contractors.
A firm may apply for DBE status using the Schedule A application form.
(A)
Construction firms, general contractors
, trucking
firms
and specialty contractors. The department will certify a firm
as a DBE if it meets all other certification requirements set forth in
Subpart D of 49 CFR Part 26. The firm will be certified for the specific types
of work in which the socially and economically disadvantaged owner(s) have
the ability to control the firm
[
subsection (d) of this section
].
(B)
Regular dealers. The department will certify a firm as
a DBE if it meets all other certification requirements set forth in
Subpart D of 49 CFR Part 26
[
subsection (d) of this section
],
engages in the purchase and sale of the products as its principal business
and in its own name, is not a broker or packager; and
(i)
owns, operates, or maintains a store, warehouse, or other
establishment in which materials
,
[
or
] supplies
, articles, or equipment
required for a contract are bought, kept in
stock, and regularly sold
or leased
to the public in the usual
course of business; or
(ii)
is a dealer in bulk items such as steel, cement, gravel,
stone, [
and
] petroleum products
, and asphalt products
not kept in stock which are distributed or delivered using equipment owned
or operated by the firm.
Any supplementing of regular dealers' own distribution
equipment shall be by a long-term lease agreement and not on an ad hoc or
contract-by-contract basis.
(C)
DBE manufacturer. The department will certify a manufacturer
as a DBE if it:
(i)
meets all other certification requirements set forth in
Subpart D of 49 CFR Part 26
[
subsection (d) of this section
];
and
(ii)
operates or maintains a factory or an establishment that
produces on the premises materials
,
[
or
] supplies
, articles, or equipment
to be used in a contract.
(D)
Franchisee or licensee. A business operating
under a franchise or license agreement will be certified by the department
if it meets all other certification requirements set forth in Subpart D of
49 CFR Part 26, and the franchiser or licenser is not affiliated with the
franchisee or licensee.
[(D)
Disadvantaged trucking firm. The department
will certify a trucking firm as a DBE trucking firm if it:]
[(i)
meets all other certification requirements set forth in
subsection (d) of this section;]
[(ii)
owns or leases on a long term basis at least two operational
trucks; and]
[(iii)
furnishes operators, fuel, maintenance and insurance
for all trucks.]
(2)
(No change.)
(3)
Schedule O--Disadvantaged truck owner-operator.
(A)
(No change.)
(B)
The department will certify a truck owner-operator who:
(i)
(No change.)
(ii)
is eligible in accordance with
Subpart D of 49 CFR
Part 26
[
subsection (d) of this section
];
(iii)-(v)
(No change.)
(f)
On-site review.
(1)
The department will conduct an on-site review, in accordance
with 49 CFR
§26.83
[
§23.45
], of any firm when:
(A)-(C)
(No change.)
(2)-(3)
(No change.)
(4)
If the on-site review indicates that the firm does
not meet eligibility standards, the firm will be denied certification in accordance
with subsection
(h)
[
(i)
] of this section.
(g)
Certification renewals.
(1)
DBE certifications are valid for
three
[
two
] years with an annual
affidavit
[
update
] required.
(2)
(No change.)
(3)
Renewals are subject to certification standards set
forth in
Subpart D of 49 CFR Part 26
[
subsection (d) of this
section
].
(h)
Denial or withdrawal of certification.
(1)
An applicant who withdraws its application may reapply
at any time.
(2)
The department will notify an applicant in writing
if certification is to be denied and set forth reasons for denial.
(3)
An applicant may answer the department's notice of
denial within fifteen working days after receiving notice of denial.
(A)
If the applicant does not answer within the fifteen-day
period, the denial of certification is final.
(B)
If an applicant answers within the fifteen-day period,
and the response resolves eligibility deficiencies, the department will certify
the applicant.
(C)
If an applicant answers within the fifteen-day period,
but does not resolve eligibility deficiencies, the department will deny certification.
(D)
An applicant who has been denied certification must wait
twelve months from the date of denial to reapply for certification.
(i)
Certification challenges.
[
(h) Third-party actions.
]
(1)
Third party
[
Social and economic
]
challenge.
(A)
A third party may challenge the
eligibility
[
social and economic disadvantaged status of an owner
] of a certified
firm or a firm seeking to be certified as a DBE [
unless the firm has
a current SBA 8(a) certification as provided in 49 CFR §23.69
].
(B)
A challenge must be made in writing, signed and dated by
the challenger, and set forth the factual basis for the challenge.
[(C)
DBE certification remains valid during
department proceedings.]
(C)
[
(D)
] After receiving a written challenge,
the department will determine if there is reason to believe that the challenged
party is in fact not
eligible
[
socially and economically disadvantaged
] on the basis of the information provided by the challenging party.
(D)
To the extent allowed by applicable law,
the identity of complainants will be kept confidential at the complainant's
election. Complainants will be advised that if confidentiality hinders the
investigation, the result will be closure of the investigation or dismissal
of the proceeding or hearing.
(E)
The department will review the challenged
firm's record, any material provided by the firm and the complainant, and
other available information. All parties to the complaint must cooperate with
the review.
(F)
If the department determines that there
is reasonable cause to believe that the firm is ineligible, the department
will provide a written notice to the firm proposing to find the firm ineligible,
setting forth the reasons for the proposed determination, and offering the
firm opportunity for an informal hearing or an opportunity to present information
and arguments in writing.
(G)
If the department determines that there
is not reasonable cause to believe that the firm is ineligible, the department
will notify the complainant in writing of the determination and the reason
for it.
(2)
Department challenges. If the
department receives information on changes to a firm or other information
that provides reasonable cause to believe that the firm is ineligible:
(A)
The department will provide a written notice to the firm
proposing ineligibility and the reasons for it.
(B)
The firm will be given an opportunity for an informal hearing
or an opportunity to present information and arguments in writing.
(j)
Informal Hearing.
(1)
A firm may request an informal hearing
no later than 15 days after receiving notification of the department's determination
to remove its eligibility. The DBE certification remains valid during department
proceedings.
(2)
The department will maintain a complete
record of the hearing.
(3)
A department official that did not
take part in the actions leading to or seeking to remove the firm's eligibility
will preside over the hearing and make the decision regarding the firm's eligibility.
(4)
The department will not base a decision
to remove eligibility on a reinterpretation or changed opinion of information
available at the time of certification of the firm.
(5)
The department will provide the firm
a written notice of the decision and reasons for it. A copy of the notice
will be sent to the complainant or the operating administration that directed
the proceeding.
[(E)
If the department based certification
upon SBA 8(a) program certification pursuant to 49 CFR §23.62, the department
will refer the challenging party to the Small Business Administration.]
[(F)
If the department based certification
upon an applicant's claim to be socially and economically disadvantaged, and
if there is a basis to believe that the challenged party is not socially and
economically disadvantaged, the department will:]
[(i)
notify the firm in writing that the individual's social/economic
disadvantaged status has been challenged, identify the challenging party,
summarize the grounds for the challenge, and request information to be submitted
within 15 working days to substantiate their claim of social and economic
disadvantage;]
[(ii)
make a determination of social and economic disadvantage
according to standards set forth in Appendix C to Subpart D, Guidance for
Making Determinations of Social and Economic Disadvantage, 49 CFR Part 23;
and]
[(iii)
notify both parties in writing, setting forth reasons
for the determination, and asking each party to respond in writing to the
determination.]
[(G)
If both parties accept the department's
determination, the challenge is closed.]
[(H)
If either party is aggrieved by the department's
determination, the aggrieved party may request an eligibility conference in
accordance with subsection (j) of this section.]
[(2)
DBE Certification.]
[(A)
A third party who alleges that another firm has been wrongly
denied or granted certification as a DBE or joint venture may advise the United
States Department of Transportation pursuant to 49 CFR §23.55.]
[(B)
The United States Department of Transportation may deny
participation as a DBE during the pendency of the investigation after providing
the DBE or joint venture an opportunity to show cause by written statement
why participation should not be denied.]
[(3)
HUB Certification Challenge.
A challenge regarding a firm's eligibility as a HUB based on the department's
certification process must be submitted to the department for resolution.]
[(i)
Denial or withdrawal of certification.]
[(1)
An applicant who withdraws its application may reapply
at any time.]
[(2)
The department will notify an applicant in writing
if certification is to be denied and set forth reasons for denial.]
[(3)
An applicant may answer the department's notice of
denial within 15 working days after receiving notice of denial.]
[(A)
If the applicant does not answer within the 15 day period,
the denial of certification is final.]
[(B)
If an applicant answers within the 15 day period, and
the response resolves eligibility deficiencies, the department will certify
the applicant.]
[
(C)
If an applicant answers within the 15 day period,
but does not resolve eligibility deficiencies, the applicant may accept the
department's denial of certification or it may request an eligibility conference.]
[
(j)
Eligibility conference.
]
[(1)
An applicant who believes the department
has wrongly denied certification may request an eligibility conference no
later than 15 days after receiving notification of the department's denial
of certification.]
[(2)
A third party who has challenged
a firm's social and economic status pursuant to subsection (h)(1) of this
section may request an eligibility conference no later than 15 days after
receiving notification of the department's determination.]
[(3)
During an eligibility conference,
the applicant, challenged firm, or challenging party may submit additional
information to substantiate or refute eligibility.]
[(4)
The department will include the
information received pursuant to paragraphs (1)-(3) of this subsection in
its final determination.]
[(5)
An applicant denied certification
must wait six months from the date of denial to reapply for certification.]
(6)
Any party aggrieved by the department's [
certification
] determination may appeal to the United States Department of Transportation
in accordance with §9.59 of this title (relating to Business Opportunity
Programs Complaints).
(k)
Removal of eligibility. Neither a contractor
nor the department shall receive credit towards the contract or overall goal
when a proposed DBE contractor or subcontractor has its DBE eligibility removed
prior to contract execution. The contractor must substitute a DBE firm for
the ineligible firm or demonstrate that it has made a good faith effort to
do so, unless the ineligibility was caused solely by the ineligible firm having
exceeded the size standard.
(l)
[
(k)
] DBE directory. The department
will maintain
and make available to interested parties
a directory
of certified DBEs. Monthly amendments to the directory will be sent to prequalified
contractors indicating deletions and decertifications.
The directory
will include a clearinghouse list of organizations that provide assistance
in the recruitment and placement of DBEs for the purpose of linking contractors
to minority and women subcontractors.
§9.57.HUB Certification.
(a)
The department and GSC [
will
] operate under
a
memorandum of agreement that allows GSC to recognize the department's
certified DBE firms as HUB firms.
[
reciprocal certification program
for minority and women-owned businesses. A general operating agreement between
the agencies will be developed outlining the policies and procedures for managing
the reciprocal certification program.
] The GSC certifies businesses
as HUBs using procedures set forth at Title 1, Texas Administrative Code, §§111.11-111.23.
A business denied HUB certification though GSC's certification process may
appeal the GSC determination in accordance with procedures set forth at Title
1, Texas Administrative Code, §111.14 (relating to Protests). A business
denied DBE/HUB certification through the department's certification process
may seek review of the denial as described in §9.56
(h)
[
(i)
] and (j) of this title (relating to DBE Certification).
(b)
(No change.)
(c)
HUB certification challenge. A challenge
regarding a firm's eligibility as a HUB and based on the department's certification
process must be submitted to the department for resolution. A HUB firm whose
certification is based on the department's DBE certification will lose both
certifications if found to be ineligible as a DBE.
(d)
[
(c)
] GSC maintains a directory of
certified HUBs.
§9.58.Contract Compliance.
(a)
Contract provision. Department contracts involving the
expenditure of funds will include a contract provision addressing DBE or HUB
requirements.
(1)
(No change.)
(2)
A contract without a goal assigned will include provisions:
(A)
encouraging the use of minority, disadvantaged, and historically
underutilized business enterprises in subcontracting
and material supply
activities; [
and
]
(B)
prohibiting discrimination
; and
(C)
providing a method for reporting race-neutral
DBE participation.
(b)
(No change.)
(c)
Contractor representative. A contractor receiving a contract
with an assigned goal must designate an employee to serve as a DBE/HUB contact
person during the contract
. The contractor
[
, and
] must
inform the department of the representative's name, title, and telephone number
no later than five days after the contract is signed. The DBE/HUB representative
is responsible for submitting reports, maintaining records, and documenting
good faith efforts to use DBE/HUBs pursuant to §9.55 of this title (relating
to Good Faith Effort).
(d)
Commitments. The following requirements must be satisfied
by the contractor
as a condition of award
[
unless the contractor
is a DBE/HUB
].
(1)
Within the time specified in the contract or proposal,
the contractor must furnish a
commitment agreement for each certified
DBE/HUB that will be used to meet the contract goal. The commitment agreement
must include:
[
list of commitments made to certified DBE/HUBs to
meet the contract goal along with a commitment agreement containing the original
signatures of the contractor and the proposed DBE/HUB which includes, but
is not limited to:
]
(A)-(E)
(No change.)
(F)
if the commitment involves a DBE/HUB material supplier,
an explanation of the function to be performed and a description of any arrangements,
including joint check agreements, made with other material suppliers, manufacturers,
distributors, hauling firms, or freight companies
; and
(G)
the original signatures of the contractor
and the proposed DBE/HUB.
(2)
If the contractor is unable to meet the
goal, the
[
The
] contractor must document good faith efforts
taken to
obtain DBE/HUB participation
[
meet the goal
]
in accordance with:
(A)-(B)
(No change.)
(3)
On federal-aid contracts, DBE
prime contractors may receive credit toward the DBE goal for work performed
by their own forces and work subcontracted to DBEs. A DBE prime must make
a good faith effort to meet the goals. In the event a DBE prime subcontracts
to a non-DBE, the amount paid to the non-DBE must be reported to the department.
(e)
Reporting. Each contractor receiving a contract with an
assigned goal must submit the following reports.
(1)
The contractor must submit periodic reports at intervals
specified in the contract using a report form acceptable to the department
that includes, but is not limited to, identification of the DBE/HUB by name
and vendor number [
and showing the actual amount paid to the DBE/HUB
].
The report must indicate the actual amount paid to each DBE/HUB
consisting of the amounts paid in accordance with the DBE/HUB commitment as
outlined in subsection (d) of this section and race neutral participation.
The report will also include amounts paid by DBEs/HUBs to non-DBE/HUB subcontractors
and haulers
. The report must be submitted even if no payments were made
during the period being reported. When required by the department, the contractor
must attach proof of payment including, but not limited to, copies of canceled
checks.
(2)
(No change.)
(f)
Credit for expenditures.
(1)
Federal
[
Full credit for federal
]
aid contracts. A contractor awarded a federal aid contract will receive credit
for [
all
] payments made to a DBE firm [
certified
] in
accordance with
49 CFR §26.55.
[
§9.56 of this title
(relating to DBE certification) unless:
]
[(A)
a DBE firm is paid but does not assume
contractual responsibility for providing the goods or performing the services;]
[(B)
a DBE firm does not perform a commercially
useful function as set forth in subsection (g)(1) of this section;]
[(C)
a contractor makes payment directly to
a material supplier for the cost of materials or supplies used by a DBE subcontractor
unless the payment is made with a joint check to the DBE subcontractor and
the material supplier in accordance with an invoice submitted by the material
supplier;]
[(D)
a contractor deducts payment of the cost
of materials used by a DBE subcontractor or the cost of leased or rented equipment
used by the DBE/HUB from an invoice submitted by the DBE;]
[(E)
a payment is made:]
[(i)
to a DBE that cannot be linked by an invoice or canceled
check to the contract under which credit is claimed;]
[(ii)
to a broker or a firm with a brokering-type operation;]
[(iii)
to a DBE manufacturer for a product purchased for the
project and not manufactured by the DBE manufacturer;]
[(iv)
to a DBE trucking firm that does not perform 30% of the
contract with trucks owned or leased on a long term basis or with owner-operators,
and does not furnish operators, fuel, maintenance and insurance for the owned
or leased trucks;]
[(v)
for the amount of materials and supplies required on a
job site, when the hauler, trucker, or delivery service is not also a manufacturer
of or a regular dealer in the materials and supplies; or]
[(vi)
for a bona fide service, such as professional, technical,
consultant, or managerial services, and assistance in the procurement of essential
personnel, facilities, equipment, materials, or supplies required for performance
of the contract (The credit is reduced to the amount of the fee or commission
charged provided the fee or commission does not exceed that customarily allowed
for similar services); or]
[(2)
Partial credit for federal
aid contracts. A contractor awarded a federal aid contract will receive:]
[(A)
60% credit for payment to a regular dealer;]
[(B)
credit for the percentage of DBE ownership in the joint
venture for payment to a joint venture; or]
[(C)
the amount of any fee or commission charged for providing
any bonds or insurance specifically required for the performance of the contract,
provided that the fee or commission does not exceed that customarily allowed
for such fee or commission.]
(2)
[
(3)
] Non-federal aid contracts.
A contractor will receive credit for all payments actually made to a HUB for
work performed and costs incurred in accordance with the contract
, including
all subcontracted work
[
with the following exceptions and/or stipulations
and only if the arrangement is consistent with standard industry practice
].
[(A)
Payments:]
[(i)
to brokers or firms with a brokering-type operation will
be credited only for the amount of the commission;]
[(ii)
to a joint venture will not be credited unless all partners
in the joint venture are HUBs;]
[(iii)
to a HUB subcontractor who has subcontracted a portion
of the work required under the subcontract will not be credited unless the
HUB performs a commercially useful function;]
[(iv)
to a HUB firm will not be credited if the firm does not
provide the goods or perform the services paid for;]
[(v)
made by a contractor directly to a material supplier for
the cost of materials or supplies used by a HUB subcontractor will not be
credited unless payment is made, from an invoice submitted by the supplier,
with a joint check to the supplier and HUB;]
[(vi)
made to a HUB supplier not directly involved in the manufacture
or distribution of the supplies or materials or who does not otherwise warehouse
and ship the supplies will not be credited; or]
[(vii)
made to a HUB that cannot be linked by an invoice or
canceled check to the contract under which credit is claimed will not be credited.]
[(B)
Deductions made by a contractor for the
cost of materials used by a HUB subcontractor or the cost of leased or rented
equipment used by the HUB from an invoice submitted by the HUB will not be
credited.]
(3)
[
(4)
] The department may
request a contractor to furnish proof of payment made to a DBE/HUB firm including,
but not limited to, canceled checks to substantiate expenditures.
(4)
[
(5)
] A contractor must not
withhold or reduce payments to any DBE/HUB firm without a reason that is accepted
as standard industry practice.
(g)
Performance. A DBE/HUB contractor or subcontractor must
comply with the terms of the contract or subcontract for which it was selected.
Work products, services, and commodities must meet contract specifications
whether performed by a contractor or subcontractor.
(1)
Commercially useful function.
(A)
DBE/HUB
[
DBE
] subcontractors must
perform a commercially useful function required in the contract in order for
payments to be credited toward meeting the contract
DBE/HUB
goal.
A
DBE/HUB
[
DBE
] performs a commercially useful function
when it:
(i)-(ii)
(No change.)
(B)
The department may conduct an on-site review of a DBE/HUB's
performance to determine that it is performing a commercially useful function
as part of its routine monitoring program or in response to information or
allegations that the
DBE/HUB
[
DBE
] is not performing
a commercially useful function.
(C)
If the department determines that a DBE/HUB firm is not
performing a commercially useful function under the contract, the department
may:
(i)
suspend the DBE/HUB firm from the
department's
DBE/HUB program for a period to be determined by the department;
(ii)-(iv)
(No change.)
(D)
A DBE may appeal the department's determination to the
United States Department of Transportation pursuant to 49 CFR
§26.89
[
§23.47
].
(2)
Subcontracting.
(A)
A DBE contractor or subcontractor may subcontract no more
than 70% of a federal aid contract. The DBE shall perform not less than 30%
of the value of the contract work with:
(i)
assistance of employees employed and paid directly by the
DBE; [
and
]
(ii)
employees leased from an employee leasing
company as set forth in 49 CFR §49.71(q); and
(iii)
[
(ii)
] equipment owned or rented
directly by the DBE.
(B)-(C)
(No change.)
(D)
A contractor may not furnish work crews [
or equipment
] to a DBE/HUB subcontractor.
(i)-(ii)
(No change.)
(3)
DBE subcontractor termination.
The contractor must not terminate a DBE subcontractor submitted on a commitment
agreement without the prior written consent of the department.
[(3)
Maximum opportunity. A contractor
must allow a DBE/HUB maximum opportunity to perform the work by not creating
unnecessary barriers or artificial requirements for the purpose of hindering
a DBE/HUB's performance under the contract such as, but not limited to:]
[(A)
inadequate notice to perform work;]
[(B)
failure to make timely payments; and]
[(C)
failure to prepare the worksite on schedule.]
(h)-(j)
(No change.)
(k)
Sanctions.
(1)-(2)
(No change.)
(3)
The department will impose sanctions if the contractor:
(A)
(No change.)
(B)
has failed to meet the contract DBE/HUB goal and has failed
to demonstrate a good faith effort to meet the goal;
or
(C)
has not kept DBE/HUB commitments [
; or
]
[(D)
has not given DBE/HUB firms the maximum
opportunity to perform under a subcontract].
(4)-(6)
(No change.)
§9.59.Business Opportunity Programs Complaints.
(a)-(b)
(No change.)
(c)
Program complaints. An aggrieved person or firm may file
a written complaint that there has been a violation of a business opportunity
program, including a discrimination claim. A complaint may also be filed on
behalf of another person or any specific class of individuals.
(1)
Filing. The complaint must be made
in writing
to the director within 90 calendar days:
(A)-(B)
(No change.)
(2)-(3)
(No change.)
(d)
Appeal.
(1)
Appeal to U.S. Department of Transportation.
(A)
A firm may file an appeal with U.S. Department of Transportation
at any time pursuant to the process outlined in:
(i)
49 CFR
§26.89
[
§23.55
],
if a firm believes that it has been wrongly denied certification under §9.56
of this title (relating to DBE Certification);
(ii)
49 CFR
§26.89
[
§23.69
],
if a firm has challenged certification under
§9.56(i)
[
§9.56(h)
] of this title[
, except for SBA 8(a) certification
]; or
(iii)
49 CFR
§26.103
[
§23.73
],
if a firm alleges discrimination on a federally-funded contract or is aggrieved
by a department determination related to the DBE program.
(B)
The appeal must be made in writing, signed and dated, no
later than
90
[
180
] days after the date of the
department's final decision. The appeal under 49 CFR §26.103 must be
made in writing, signed, and dated, no later than 180 days after the date
of the offense or the date on which a continuing course of conduct in violation
was discovered.
[
offense or the date on which a continuing course
of conduct in violation was discovered.
] The Secretary of Transportation
may extend the time for filing or waive the time limit in the interest of
justice.
(C)
(No change.)
(2)
(No change.)
This agency hereby certifies that the proposal has been
reviewed by legal counsel and found to be within the agency's legal authority
to adopt.
Filed with the Office of
the Secretary of State, on January 18, 2000.
TRD-200000321
Richard Monroe
General Counsel
Texas Department of Transportation
Earliest possible date of adoption: March 5, 2000
For further information, please call: (512) 463-8630