Jose Ramiro Salazar and Minming Wu Morri San Francisco Bay Area Rapid Transit District (BART) Office of the General Counsel Mary Richardson Port of Oakland,

Jose Ramiro Salazar and Minming Wu MorriSan Francisco Bay Area Rapid Transit District

(BART)

Office of the General Counsel

Mary RichardsonPort of Oakland, Office of the Port Attorney

Federal Contracting Requirements

March 28, 2012 CLE

1

OverviewTitle VILocal HireBuy AmericaDBE/SBE

2

Department of Transportation (DOT) Common Grant Rules, 49 CFR Part 18

FTA Third Party Contracting Guidance, FTA Circular 4220.1F (2013 revisions)

Other Federal Agency Contracting Rules

Today’s Focus: Two FTA contract requirements

Overview

3

Disparate Treatment

Intentional discrimination on the basis of race, color, or national origin. 42 USC § 2000d et seq; Cal. Gov. Code § 11135 et seq.

Disparate Impact

Programs or activities “with the purpose or effect of” discrimination. 49 CFR part 21.5 (DOT); GC § 11135; 22 Cal. Code Reg. 98000; FTA Circular

Environmental Justice (EJ)

Minority and low-income populations. EO 12898; DOT Order on EJInclusive Public Participation

Limited English Proficient (LEP)

Providing English-only services may constitute national origin discrimination. EO 13166; DOT Policy Guidance; GC § 11135; 22 Cal. Code Reg. 98000; Dymally-Alatorre Bilingual Services Act

Title VI Legal Standardscircumscribed activities, protected populations, and California law.

4

Facially neutral policy or practice that disproportionately impacts minorities

Lacks a substantial legitimate justification, andWhere less disproportionate alternatives exist

that would serve the same legitimate objectives as the challenged policy or practice.

What is a Title VI disparate impact?

5

Scope of Authority42 USC sec. 2000d-4a

Title VI applies institution-wide, not solely to the recipients operations receiving Federal funding.

6

Inclusive Public Participation (DOT-Wide)

Public Participation Plan (FTA)

Title VI Program (FTA-Specific)

Eight (8) Minimum Requirements

Title VI Equity Analysis (FTA)

Siting of Facilities Major Service & Fare Changes

Affirmative Actions to Ensure Against Disproportionate Impacts of Programs & Activities. (DOT-Wide, 49 CFR 21.5(b)(7))

LEP Requirements (DOT-Wide)

Key Substantive RequirementsDOT Title VI Regulations (49 CFR 21) & FTA Circular 4702.1B

7

Federal & State 42 USC section 2000d et seq, as

amended Executive Order 13166; Executive

Order 12898 49 USC sec. 53 et seq 28 CFR sec. 42; 42 USC sec 4601 et

seq 49 CFR sec. 21 DOT Order 5610.2(a) DOT Policy Guidance on LEP FTA Title VI Circular 4702.1B & 4703.1 DOJ Title VI Legal Manual California Government Code sec.

11135 and implementing regulations Dymally-Torres Bilingual Services Act List is Not Exhaustive & Excludes

Case Law

Agency Inclusive Public Participation Plans & Reports

Agency Four-Factor Language Assistance Plans

Agency Disparate Impact & Disproportionate Burden Policies

Title VI Equity Analyses Demographic Reporting of Non-

Elected, Transit-Related Bodies Title VI Public Notice of Rights &

Complaint Process

Selected Sources of AuthorityRecipient’s Title VI Plans, Reports, and Documents

8

Costly LitigationCostly SettlementWithdrawal of Federal FundsInstitution-wide Title VI Audit/Compliance

ReviewPublic Relations

Possible Consequences of a Title VI complaint

9

Title VI Lessons Learned

10

Privileges & Immunities Clause (Constitutional) United Building & Construction Trades Council v. City of

Camden, 465 U.S. 208 (1984).

Federal Restrictions

Federal Local Hire Restrictions

11

49 U.S.C. Section 5325(a) and (h)

FTA Third Party Contracting Circular (4220.1F)

FTA Best Practices Procurement Manual Sec. 2.4.2.2.3

City of Cleveland v. Ohio DOT v. FHWA (508 F.3d 827 (6th Cir. 2007)

Local Hire Provisions in PLAs/PSAs(for federal DOT-funded contracts)

12

Application of PLAs/PSAs on federally funded contracts has been limited by Executive Order and by interpretation of local hire provisions as “anti-competitive”President George W. Bush issued Executive

Orders 13202 and 13208 prohibiting use of PLAs on federally funded or assisted contracts

President Obama issued Executive Order 13502 which revoked the Bush-era Executive Orders but did not expressly allow for open use of PLAs on federally funded projects

Applicability of Local Hire Provisions in Federally Funded Contracts

13

The Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) was adopted by the Board of Port Commissioners in 2000. It was intended to cover the capital projects in

the Port’s Aviation and Maritime areas. MAPLA was designed to ensure project labor

stability and encourage employment of Port local residents

The MAPLA Local Hire Program continues to advance the Port’s local-hire goals. MAPLA sets specific goals for the hiring of residents from the Port’s local impact area (Oakland, Alameda, Emeryville and San Leandro) and the local business area (Alameda and Contra Costa counties)

Applicability of Local Hire on Federally Funded Port Projects

14

Following the Obama Executive Order, the Port worked with DOT to obtain permission to use MAPLADOT cited federal procurement regulations

prohibiting geographic preference in the award or evaluation of bids and proposals

MAPLA Applicability on Federally Funded Projects

15

Following several months of discussions, the DOT agreed to allow the Port to proceed with application of the MAPLA with the following exception:“For purposes of this Project, which is funded

through an agency or agencies of the United States Department of Transportation, the provisions of the attached Port of Oakland Maritime and Aviation Project Labor Agreement permitting the possible imposition of sanctions and/or binding arbitration for failure to demonstrate good faith efforts to meet local hire goals are hereby deemed inapplicable.”

MAPLA Applicability of Federally Funded Projects

16

Additional Invoice and Supporting Documentation

Contract Closeout and ReleaseARRA “Jobs Created” DataQuarterly and Project DBE and SBE Prevailing WageSpecial Grant Funding Requirements for non-

DOT projects

Federal Grant/Record Keeping Requirements

17

49 USC Section 5323(j)

49 CFR Part 661

Buy America Requirements

18

“All iron, steel, and manufactured products used in the Contract must be produced in the United States unless an exception is granted by the FTA.”

Certificate required from any Bidder over $100k that it will comply with Buy America or that it cannot comply but may qualify for an exception or a waiver.

Iron, Steel, and Manufactured Products

19

In the case of Rolling Stock procurements (including train control, communication, and traction power equipment) the above provision does not apply if more than 60% of the cost is for components produced in the United States

Analysis of content includes the subcomponents.

Rolling Stock Procurements

20

The Buy America requirements are specifically applied to Department of Transportation Procurements and are not subject to NAFTA. Accordingly, goods from Canada and Mexico are not considered “domestic” for Buy America purposes.

AARA and Buy American requirements are different and recognize US treaty obligations for reciprocity with countries that are signatories to trade agreements.

NAFTA Does Not Apply

21

FTA requirements require a properly executed Buy America certificate or Bid is Non-Responsive.

Bidder that commits to comply with Buy America is not relieved if, after award, it becomes expensive to comply.

Violation of Buy America can lead to debarment under 49 CFR Part 29

FTA has indicated that it will not be granting waivers except in extraordinary circumstances.

Strict Enforcement, Waivers Scarce

22

49 CFR Part 26

DOT DBE and SBE Requirements

23

DOT Regulations require Grantees to adopt a DBE Program consistent with 49 CFR Part 26

DOT Regulations require Grantees to adopt annual DBE Goals and to have a plan on how that goal will be met with Race Conscious and with Race Neutral measures.

SBE and MSBE Features are considered race-neutral methods of encouraging participation that may bring in DBE participation while being focused on SBE status.

Race Conscious and Race Neutral Measures

24

DBE Goals are set per Contract as a percentage of the Contract Price. The Goals are based on subcontracting opportunities and availability of DBEs.

Bidders are required to meet the DBE Goal or demonstrate Good Faith Efforts to do so in order to be responsive and eligible for award.

Credit towards the DBE Goal is tracked based on payments made to DBE firms during Contract performance

DBE Contract Goals

25

A DBE is a for profit small business concern that is at least 51% owned by an individual that is socially and economically disadvantaged and whose management and daily business operations are controlled by one or more socially and economically disadvantaged individuals.

The firm’s average annual gross receipts (including those of its affiliates) for the previous 3 fiscal years does not exceed $22.41 Million

Disadvantaged Business Enterprise (DBE)

26

An SBE means a small business concern certified as an SBE by BART or certified as a DBE under the California Unified Certification Program (CUCP).

The firm must be at least 51% owned by an individual that has a personal net worth that does not exceed $1.32 Million

In addition, the firm must meet the Small Business Administration (SBA) size standard for the North American Industry Classification System (NAICS) for which the firm has requested certification.

Small Business Entity (SBE)

27

SBE cannot have average annual gross receipts, including those of its affiliates, for the previous three fiscal years that exceed $22.41 Million.

SBE, Continued

28

Under Western States Case, in 9th Circuit, Grantees must conduct a Disparity study to determine if it has underutilized Minority firms when compared with their availability in order to have race specific goals in its contracts.

Due to results of its Disparity Study, no DBE Goals are included in BART Services Agreements or its Procurement contracts. SBE Goals will be included.

BART will include DBE and SBE participation goals in its FTA funded Construction Contracts.

DBE and SBE Goals

29

Based on recent DOT Regulations, BART has added features to its DBE Program to allow for set aside contracts for MSBEs.

MSBE must qualify as an SBE . But its maximum average annual gross receipts (including those of its affiliates) for the previous three fiscal years cannot exceed $10 Million for Construction, or $6 Million for Procurement Contracts and for Services Agreements.

Micro Small Business Entities (MSBEs)

30

Set aside Contracts will be limited to Construction Contracts of $2 Million or less.

Set Aside Professional Services Agreements will be limited to $3 Million or less.

Set Aside Procurement Contracts will be limited to $2 Million or less.

Only MSBEs will be allowed to Bid on MSBE Set Aside Contracts.

MSBEs must register with BART and be on its MSBE Database to be eligible for bidding o the MSBE Set Aside Contracts.

MSBE Set Aside Contracts

31

Questions?

32