January 2021 CONTRACTOR COMPLIANCE DIVISION OF OPPORTUNITY, DIVERSITY & INCLUSION Office of Civil Rights Compliance STANDARD OPERATING PROCEDURES
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January 2021
CONTRACTOR COMPLIANCE
DIVISION OF OPPORTUNITY, DIVERSITY & INCLUSION
Office of Civil Rights Compliance
STANDARD OPERATING PROCEDURES
Contents INTRODUCTION ............................................................................................... 1
Authority ................................................................................................... 2
DEFINITIONS .................................................................................................. 3
EQUAL EMPLOYMENT OPPORTUNITY & AFFIRMATIVE ACTION ........................................ 16
23 CFR 230, Subparts A & C ............................................................................ 16
Construction Contract Specifications ................................................................. 16
EEO/AA Goals ............................................................................................. 17
EEO/AA Compliance ..................................................................................... 20
Other Laws Related to EEO/AA ........................................................................ 20
Fair Labor Standards Act ............................................................................. 20
Davis-Bacon and Related Acts ....................................................................... 22
Contract Work Hours and Safety Standards Act .................................................. 25
Title VII of the Civil Rights Act of 1964 (Title VII) ............................................... 28
The Equal Pay Act of 1963 (EPA) .................................................................... 29
The Age Discrimination in Employment Act of 1967 (ADEA) .................................... 29
Title I of the Americans with Disabilities Act of 1990 (ADA) ................................... 29
Sections 102 and 103 of the Civil Rights Act of 1991 ............................................ 29
Sections 501 and 505 of the Rehabilitation Act of 1973 ........................................ 29
Section 504 of the Rehabilitation Act of 1973 .................................................... 29
The Genetic Information Nondiscrimination Act of 2008 (GINA) .............................. 29
Copeland Act ........................................................................................... 30
ODOT Oversight........................................................................................... 30
EEO/AA Officers ....................................................................................... 30
EEO/AA Policies and Programs ...................................................................... 30
Harassment Policies ................................................................................... 30
Fliers and Posters ..................................................................................... 30
Employee Education .................................................................................. 30
Community Inclusion .................................................................................. 31
Employee Empowerment ............................................................................. 31
Opportunities Announcements ...................................................................... 31
Ongoing Education .................................................................................... 31
Record Keeping ........................................................................................ 31
Employment Applications ............................................................................ 31
ODOT Division of Opportunity, Diversity & Inclusion Staff ..................................... 32
Preconstruction Conferences ........................................................................ 32
Contractor Compliance Onsite Review Prioritization ............................................ 34
AASHTOWare Project Civil Rights and Labor ...................................................... 37
ODOT Prime Contractors ............................................................................. 37
ODOT Subcontractors ................................................................................. 37
ODOT Contractor Compliance Officers (CCOs) ................................................... 38
ODOT’s AWP CRL Support Team .................................................................... 38
Certified Payroll Report Submissions ............................................................... 38
Certified Payroll Report Reviews ................................................................... 40
Custom Certified Payroll Data Reports ............................................................ 41
Compliance Determinations ......................................................................... 41
Quality Assurance Reviews: CCO Compliance ..................................................... 41
State Contractor Compliance Audit ................................................................ 42
ODOT On-The-Job Training Program ............................................................... 42
DISADVANTAGED BUSINESS ENTERPRISE COMPLIANCE ................................................. 44
49 CFR 26 Subpart F ..................................................................................... 44
Compliance and Enforcement ....................................................................... 44
Managing Record Requests ........................................................................... 45
Confidentiality of Information ...................................................................... 45
Cooperation ............................................................................................ 45
Retaliation .............................................................................................. 45
ODOT Policies/Processes ................................................................................ 46
Prompt Payment ....................................................................................... 46
Prompt Payment Investigations ..................................................................... 46
Retainage ............................................................................................... 47
Payment Monitoring – Prime Contractors .......................................................... 47
Project Close Out ..................................................................................... 47
Payment Violations .................................................................................... 48
DBE Terminations / Reductions / Replacements .................................................... 48
DBE Termination/Replacement Violations ........................................................ 50
Commercially Useful Function (CUF).................................................................. 50
Overview ................................................................................................ 50
Monitoring .............................................................................................. 51
CUF Reviews ............................................................................................ 51
Prime Contractors and Subcontractors ............................................................ 52
Materials & Supplies Vendors (MSVs) ............................................................... 57
Trucking Firms ......................................................................................... 60
CUF Reports ............................................................................................ 61
CUF Violations ......................................................................................... 61
Sanctions for Compliance and Enforcement ...................................................... 62
Monthly Monitoring: CCO Compliance ............................................................. 63
CUF and DBE Certification ........................................................................... 63
Joint Check Policy ....................................................................................... 63
Guidelines .............................................................................................. 63
Monitoring .............................................................................................. 64
Trucking Guidelines ...................................................................................... 65
LOCAL-LET PROJECTS ...................................................................................... 66
ODOT District CCO Responsibilities ................................................................... 66
INVESTIGATIONS ............................................................................................. 67
Contractor Compliance Investigative Process ....................................................... 67
1. Desk Reviews ....................................................................................... 68
2. Public Records Searches .......................................................................... 68
3. Onsite Reviews ..................................................................................... 68
4. Interviews ........................................................................................... 69
5. CUF Reviews ........................................................................................ 69
6. Labor Compliance Interviews .................................................................... 69
7. Investigation Outcome Memorandums .......................................................... 69
8. Letter Production (if necessary) ................................................................. 69
9. Final Investigation Report ........................................................................ 69
10. Administrative Record ............................................................................ 70
APPENDICES
A. USDOL Wage and Hour Division Fact Sheets: • 13 – Independent Contractor
• 21 – Record Keeping Requirements
• 22 – Hours Worked
• 23 – Overtime
• 66 – Davis-Bacon and Related Acts
• Joint Employment Status under FLSA
B. EEO/AA Precon Packet
• Contractor Signature Authorization Form (CA-D-10)
• Summary of EEO / AA Requirements
• Request to Terminate / Reduce / Substitute DBE Form
• Prevailing Wage Requirements (Federal)
• DBE Payment Affidavit
• Trucking Guidelines
• Bulletin Board Requirements
• Contractor Records for CUF Verification
• Commercial Motor Vehicle Marking and Identification
• All Federal and State EEO/AA Posters:
o EEO is the Law
o EEO is the Law – Spanish Version
o EEO is the Law Poster Supplement
o Pay Transparency Non-Discrimination
o Pay Transparency Non-Discrimination – Spanish Version
o Federal Highway Notice Form 1022
o Federal Highway Notice Form 1022 – Spanish Version
o Employee Rights Under Davis Bacon Form 1321
o Employee Rights on Government Contracts
o Job Safety & Health Form 3165
o Job Safety & Health Form 3165 – Spanish Version
o Your Rights Under USSERRA
o Employee Rights Fair Labor Standards Form 1088
o Employee Rights Fair Labor Standards Form 1088 – Spanish Version
http://www.dot.state.oh.us/Divisions/ODI/CRC/SOPDocuments/2F%20EEO%20is%20the%20Law%20Supplement.pdf
o Family Medical Leave Form 1420
o Family Medical Leave Form 1420 – Spanish Version
o Notice Employee Polygraph Form 1462
o Notice of Employee Polygraph Form 1462 – Spanish Version
o Ohio Minimum Wage Poster
o Ohio Minor Labor
o Know Your Rights (EEO)
o Form Federal Circular PR 1273
o OJT Contractor Guidelines
C. Labor Compliance Interview Form
D. Federal Poster Checklist
E. CUF Review Forms:
• Subcontractor
• MSV
• Subconsultant
o DBE Owner
o DBE Key Personnel
• Trucking
F. Certified Payroll Submissions
• Payroll Report Template
• Statement of Compliance Template
• Payroll Codes
• Craft
• Labor
• Ethnicity
G. Sample Corrective Action Plan
H. Contractor Performance Evaluation (C-95)
• Procedure for Evaluation of Contractor Performance – Supplement 1131
I. DBE Affirmation Form
J. LPA DBE Utilization Form
K. Good Faith Efforts Forms:
• Contractor
• Consultant Services
L. Wage Violation Worksheet
• Labor Compliance – Wage Violation
M. FHWA Form 1391
N. C-92 Request to Sublet Form Template
O. Uniform Report of DBE Awards/Commitments and Payments Template
P. Ohio Disparity Study (Summary)
Q. Proposal Notes 7, 13, 22, 29, 31, 60 and 61
R. Certified Payroll Audit Procedures
S. Prompt Payment and Return of Retainage Procedures
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INTRODUCTION The State of Ohio, Ohio Department of Transportation (ODOT) Contractor Compliance Program ensures Ohio contractors and subcontractors performing work on the state’s Federal-Aid Highway construction projects, Appalachian Highway construction projects, and other State supervised cooperative highway construction projects, comply with federal nondiscrimination, Disadvantaged Business Enterprise (DBE), Equal Employment Opportunity (EEO), Affirmative Action (AA), and prevailing wage requirements as well as state prevailing wage requirements, where applicable. ODOT is responsible for administering this program and for ensuring Ohio’s contractors and subcontractors do not discriminate in their employment and contracting practices based on race, color, religion, sex, national origin, age, or disability. Ohio’s contract provisions also require nondiscrimination in selection and retention of prime contractors, subcontractors, material and supplies vendors (MSVs), and consultants; On-the-Job Training (OJT) and Training Special Provisions (TSP); and adherence to employment preference in Appalachian contracts, where applicable. Indian preference provisions may also be included in Ohio’s federally-assisted contracts, where applicable. ODOT’s policies and procedure herein are applicable to all Federal-Aid Highway construction projects, Appalachian Highway construction projects, and other State supervised cooperative highway construction projects. This SOP must be adhered to by all ODOT contractors and ODOT personnel responsible for contractor compliance.
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Authority The authority for the administration of the Contractor Compliance Program is governed by the following federal and state codes and Executive Orders:
• Ohio Administrative Code 123:2 “Division of EEO for Construction,” Chapters 1 through 11 (Duties, Affirmative Action Program, Compliance Reviews, Hearing, Monthly Reports and Certificate of Compliance)
• Final Order dated November 30, 1973 established new State EEO Bid Conditions for Metropolitan Statistical Area “MSA” (state contracts only)
• Ohio Administrative Code 123:2-3-05 “Required Utilization Analysis and Goals”
• Ohio Administrative Code 4101:9-4 “Prevailing Wage Regulations”
• United States Code, Title 23: Highways, Chapter 1: Federal-Aid Highways, Section 140(a) Equal Employment Opportunity
• Code of Federal Regulations, Title 23: Highways, Part 230: External Programs, Subpart A: Equal Opportunity of Federal and Federal-Aid Construction Contracts (including supportive services)
• Code of Federal Regulations, Title 23: Highways, Chapter 1: Sub-chapter C: Civil Rights, Part 200: Title VI, Program and Related Statutes–Implementation and Review Procedure
• Code of Federal Regulations, Title 23-Highways, Chapter 1: Part 230: External Programs, Subpart D: Construction Contract Equal Opportunity Compliance Procedures
• Code of Federal Regulations, Title 29, Subtitle A, Parts 1, 3, and 5
• Code of Federal Regulations, Title 29, Part 1608: Affirmative Action Appropriate Under Title VII of The Civil Rights Act Of 1964, as amended
• Code of Federal Regulations, Title 49, Part 26
• FHWA Federal Circular PR 1273 & PR 1316
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DEFINITIONS
Administering Agency Any department, agency, and establishment in the executive branch of government, including any wholly owned government corporation, which administers a program involving federally and state assisted construction contracts. Affirmative Action The efforts exerted toward achieving equal opportunity through positive, aggressive, and continuous results-oriented measures to correct past and present discriminatory practices and their efforts on the conditions and privileges of employment. These measures include, but are not limited to, recruitment, hiring, promotion, upgrading, demotion, transfer, termination, compensation, and training. Apprentice A person enrolled in a training program aimed at developing full journey-worker status in the type of trade or job classification involved. In highway construction, an apprentice must be enrolled in a bona fide training program. Apprentices enrolled in these programs are certified as journey-workers after the successful completion of a predetermined number of hours of on-the-job training (OJT) and related theoretical in-class training. Apprenticeship Program A bona fide training program, registered with the Ohio State Apprenticeship Council, aimed at developing the skill level of a person until the person reaches full journey-worker status (generally, four years). The training includes both school and hands-on study of the craft. Apprentice Permit A permit issued by the Union to authorize a person desiring to achieve journey-worker status to obtain skilled craft experience under supervision of a full journey-worker. Area-wide Plans An Affirmative Action Plan to increase minority utilization of crafts in a specified geographical area pursuant to “Executive Order 11246" or taking the form of an “Imposed” Plan. Bid Conditions Contract provisions which have been issued by ODOT’s Office of Civil Rights Compliance. Certificate of Apprenticeship The Ohio Department of Job and Family Services issues Certificates of Apprenticeship as verification of an employee’s enrollment in an approved apprenticeship program. The certificate must be received by ODOT within 90 days of the apprentice employee beginning work on a project. Otherwise, the full journey-worker wage must be paid by the apprentice’s employer. Certified Payroll Certified payroll is a federal requirement. Certified payrolls must be submitted weekly to the agency overseeing a government contract. The form lists every employee, his/her wages, the
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benefits he/she is entitled to, the type of work he/she performed, and the hours he/she worked. It shows withholdings and gross wages and includes a statement of compliance.
Commercially Useful Function A DBE firm achieves Commercially Useful Function (CUF) when it is responsible for execution of the work of the contract by performing, managing, and supervising the work involved. Compliance The satisfactory condition existing when a contractor/subcontractor has effectively implemented all of the Title VII requirements or can demonstrate that every Good Faith Effort (GFE) toward achieving this end has been made. Conciliation Agreement Agreement arrived at between the reviewing agency and the contractor which outlines steps the contractor will take to bring the firm into compliance. Conflict of Interest No official or employee of ODOT who is authorized in his or her official capacity to negotiate, make, accept or approve, or to take part in negotiating, making, accepting, or approving any contract or subcontract in connection with a project shall have, directly or indirectly, any financial or other personal interest in any such contract or subcontract. Constraints Significant resources, facilities, or other features of a study area located in or adjacent to an existing or proposed transportation corridor that serve to restrain, restrict, or prevent the ready implementation of proposed transportation improvements in a given area; may include natural or physical resources, important structures, manner of payment, and various administrative requirements. Construction Monitor The ODOT employee responsible for primary construction administration coordination with a Local Public Agency (LPA) and its designated employees, engineers, and contractors on Local-let projects. Construction Project Engineer The LPA designated professional engineer responsible for construction contract administration and inspection for a locally-administered construction project. Construction Work The construction, rehabilitation, alteration, conversion, extension, demolition, or repair of buildings, highways, or other changes or improvements to real property, including facilities providing utility services. The term also includes the supervision, inspection, and other onsite functions incidental to the actual construction. Contract Any federal or state assisted construction contract.
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Contractor Any person, corporation, partnership, or unincorporated association that holds a FHWA direct or federally or state assisted construction contract or subcontract regardless of tier. Contractor’s Workforce All employees on the payroll of and who are directly supervised by the contractor. Corrective Action Plan A contractor’s unequivocal written and signed commitment outlining actions taken or proposed within the time limits and goals, where appropriate to correct, compensate for, and remedy each violation of the equal opportunity requirements as specified in a list of deficiencies. Design Project Engineer An LPA-designated professional engineer responsible for a locally-administered project’s design as well as preparation of plans and specifications. Disadvantaged Business Enterprise A Disadvantaged Business Enterprise (DBE) is a for-profit small business concern that is at least 51% owned by one or more individuals who are both socially and economically disadvantaged and whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it. Discrimination The act (or action) whether intentional or unintentional through which a person of the United States, solely because of race, color, religion, sex, national origin, age, or disability, has been otherwise subjected to unequal treatment under any program or activity receiving financial assistance from FHWA under Title 23 United States Code (USC). District Construction Engineer An individual responsible for all FHWA and state construction project administration within an ODOT district. District Engineer of Tests An individual responsible for all FHWA and state materials management administration within an ODOT district. District Environmental Coordinator An individual(s) appointed with primary environmental coordination and compliance responsibilities for project development activities for an ODOT district. District LPA Coordinator An individual(s) serving as an ODOT district’s point of contact responsible for providing guidance and coordination to an LPA throughout a project’s entire development process, including actively tracking and facilitating project progress.
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Documentation Those records and reports maintained by the contractor to verify claims relative to employees, payroll, subcontractors, etc. EDGE The State of Ohio’s Encouraging Diversity, Growth and Equity (EDGE) program establishes a goal for state agencies, boards, and commissions, as well as guidelines for state universities in awarding contracts to certified EDGE businesses. The goal is 5%. The EDGE program is designed to assist socially and economically disadvantaged businesses in obtaining state government contracts in the following areas: construction, architecture and engineering; professional services; goods and services; and information technology services. (In contrast to the Minority Business Enterprise program, the EDGE program does apply to construction contracts.) The State of Ohio developed the program because it recognizes the need to encourage, nurture, and support the growth of economically and socially disadvantaged businesses to foster their development and increase the number of qualified competitors in the marketplace. This program is administered by the Ohio Department of Administrative Services, Equal Opportunity Division. Equal Employment Opportunity Equal Employment Opportunity (EEO) laws include those that prohibit specific types of job discrimination in certain workplaces. The U.S. Department of Labor has two agencies which deal with EEO monitoring and enforcement—the U.S. Equal Opportunity Commission (EEOC) and the Office of Federal Contract Compliance Programs (OFCCP). Typically, OFCCP refers discrimination complaints it receives to EEOC; however, OFCCP has jurisdiction to investigate claims it receives of systemic or class nature discrimination on the basis of race, color, religion, sex, and/or national origin Equal Opportunity Clause The contract provisions set forth in CFR Chapter 60-1.4(a) or (b), as appropriate. Equal Opportunity Compliance Review An evaluation and determination on non-exempt direct federal, federal-aid, or state contractor’s or sub-contractor’s compliance with equal opportunity requirements based on:
a. Project workforce - employees at the physical location of the construction activity. b. Area workforce - employees at all federal-aid, federal, or non-federal projects in a
specific geographical area as determined under 23 CFR Part 230.409(b)(9). c. Home office workforce - employees at the physical location of the corporation,
company, other ownership headquarters, or regional managerial offices, including “white collar” personnel (managers, professional, technicians, and clerical) and any maintenance of service personnel connected thereto.
Equal Opportunity Requirements A general term used throughout this document to mean all contract provisions relative to EEO, sub-contracting, and training.
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Federal Contractor Any person, corporation, partnership, or unincorporated association that holds a FHWA direct, or federally-assisted construction contract or subcontract regardless of tier. Federal Highway Administration The Federal Highway Administration (FHWA) is an agency within the U.S. Department of Transportation that supports state and local governments in the design, construction, and maintenance of the nation’s highway system (Federal-Aid Highway Program) and various federally and tribal-owned lands (Federal Lands Highway Program). Through financial and technical assistance to state and local governments, FHWA is responsible for ensuring America’s roads and highways continue to be among the safest and most technologically sound in the world. Federal Transit Administration The Federal Transit Administration (FTA) is an agency within the U.S. Department of Transportation that provides financial and technical assistance to local public transit systems, including buses, subways, light rail, commuter rail, trolleys, and ferries. FTA also oversees safety measures and helps develop next-generation technology research. Field Review A site visit conducted to gather or verify data, define scopes of work, perform analyses, and make decisions for specific projects. Finalization Package A packet of information consisting of all necessary documents required for closing out a construction project. The package must include the “Final” invoice, a form C-85 for exempt projects or a final inspection certificate, and the Project Finalization Certification signed and sealed by the professional engineer responsible for the project. Fringe Benefits Fringe benefits are extra benefits supplementing an employee's salary, including (and not limited to):
• Medical Insurance • Pension and Retirement Plans • Life Insurance • Dental Insurance • Disability Insurance • Accident Insurance • Tuition Reimbursement • Vacation Time
Good Faith Efforts A diligent and honest effort under a given set of facts or circumstances. In the DBE Program, Good Faith Efforts (GFE) are most often considered when a bidder either meets its DBE contract goal or does not and documents it has made reasonable efforts to do so.
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Good Faith Effort Deficiency A contractor may be found in noncompliance when compliance review findings indicate GFE actions taken, or lack thereof, by the contractor have not resulted in the employment of minorities and females in the workplace. Hazardous Materials/Waste A material is hazardous if it poses a threat to human health or the environment. The term “hazardous waste” is applicable to storage, deposit, contamination, etc. involving a hazardous material which has escaped or has been abandoned. Regulations require all toxic substances be removed in accordance with local laws prior to an ODOT project proceeding to construction. Imposed Plan An affirmative action requirement for a specified geographical area made mandatory by OFCCP and, in some areas, by the courts. Input Form 29/I-29 Form: A Work-hour report required by the Ohio Department of Administrative Services (DAS) to be submitted monthly by all prime contractors and subcontractors performing on state or state- assisted contracts in the State of Ohio. This work-hour report includes the contractor’s total workforce, including both private and public work hours. Journey-Worker or Journey-Level Status A person who has completed a registered apprenticeship program or is an experienced worker, not a trainee, and is fully qualified and able to perform all the duties of a specific trade without supervision. Local Public Agency A Local Public Agency (LPA) is any other state agency, local political subdivision, board, commission, or other governmental entity identified under paragraph C of Section 5501.03 of the Ohio Revised Code (ORC) determined to be qualified to assume the administrative responsibilities for ODOT improvements projects. Local Public Agency Project An LPA project is any local transportation improvement project that is funded primarily with federal or state monies and, if required, matched with local resources. Local-let LPA projects are those in which the LPA assumes project administration duties whereas ODOT-let LPA projects are those administered by ODOT. Materials and Supplies Vendors Materials and Supplies Vendors (MSVs) include manufacturers, regular dealers, and brokers providing materials and supplies on ODOT projects. For more information, visit http://www.dot.state.oh.us/Divisions/ODI/SDBE/Pages/Resources.aspx Metropolitan Planning Organization (MPO) An organization designated by the governor that is responsible for developing, implementing, monitoring, and updating a variety of transportation plans designed to enhance the region’s competitive position, promote regional growth, improve personal mobility, and preserve the
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environment. It serves as the forum for cooperative transportation decision-making by principal elected officials of general-purpose government. Milestone Date Key dates used to indicate the critical path of an ODOT project as it relates to overall project development. The milestone dates generally include at least the project’s starting and ending dates. Minority An individual who appears to belong, or is regarded in the community as belonging, to generally recognized racial/ethnic minority groups in the United States, identified as Black and/or African-American, Hispanic and/or Latino, American Indian and/or Native American, Asian Pacific, Sub-Continent Asian, and Pacific Islander and/or Native Hawaiians. National Highway System Those roads and highways defined by the National Highway System Designation Act of 1995 as signed into law on November 28, 1995, plus any subsequent modifications. New Hire An individual who has a break in service (not on an employer’s payroll) for a period of 60 days or longer and the person affected is not a salaried employee but belongs to a union craft. If this person is rehired the following spring (construction season), that person is to be considered a new hire even though the individual may have worked for the contractor the previous construction season or prior years. Individuals compensated for training or incidental work which does not cause a break in unemployment compensation, i.e., paid by voucher check, or petty cash, are considered new hires if the individuals’ break in service is 60 days or longer. Noncompliance The condition existing when a recipient of federal or state funds or a contractor working on a state or federally-funded project has failed to show GFE to implement the requirements of EEO and affirmative action laws. On-The-Job-Training A program that includes the training and upgrading of minorities and females toward journey-worker status. Office of Federal Contract Compliance Programs The Office of Federal Contract Compliance Programs (OFCCP) is the branch of the U.S. Department of Labor (US DOL) responsible for ensuring employers doing business with the federal government comply with the laws and regulations requiring nondiscrimination. Ohio Department of Transportation ODOT is the administrative department of Ohio state government responsible for developing and maintaining all state and federal roadways in the state of Ohio with the exception of the Ohio Turnpike. In addition to highways, ODOT also helps develop public transportation and public aviation programs. ODOT is headquartered in Columbus, Ohio. The Director of Transportation is part of the Governor's Cabinet.
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Ohio Unified Certification Program The Ohio Unified Certification Program (UCP) provides resources for firms seeking Disadvantaged Business Enterprise (DBE) certification. The program's DBE certifications are honored by all Ohio UCP Representatives and Ohio UCP Participants (i.e., all Ohio USDOT recipients and subrecipients, including ODOT, transit systems, and airports). Ohio UCP Representative The representatives of the Ohio UCP are ODOT, the City of Dayton’s Human Relations Council, the Greater Cleveland Regional Transit Authority (GCRTA), and Cleveland Hopkins International Airport. Only an Ohio UCP Representative can render determinations of DBE/ACDBE certification eligibility or revoke DBE/ACDBE certification. Ohio UCP Participant All USDOT recipients and subrecipients participating in the Memorandum of Understanding (MOU), including both representatives and non-certifying participants. OJT Trainee/Apprentice A person who receives on-the-job training in the construction trades through an apprenticeship program registered with the US DOL Bureau of Apprenticeship and Training or with a State of Ohio apprenticeship agency recognized by the Bureau of Apprenticeship and Training. Permit Person A person signed with a union who receives full benefits but is in pre-full member status, earning journey-worker wages, working for a specific period (generally 78 weeks) after which the permit person is granted full membership. Plans, Specifications, and Estimates Package A packet of information needed to obtain federal authorization prior to the advertisement of a project for construction bids. The package’s contents include a copy of the project agreement (if not previously submitted), the project engineer’s official cost estimate, a copy of the plans, the environmental consultation form, the right of way certification, and a copy of the project specifications. The estimate and plans must be signed and sealed by a professional engineer, and the number of copies vary by ODOT district. Prequalified Consultant A consultant in a particular work category that has been prequalified by ODOT through a review of the consultant’s credentials. A list of prequalified consultants and prequalification categories is maintained on ODOT’s website. Prequalified Contractor A contractor in a particular work category that has been prequalified by ODOT through a review of the contractor’s credentials. A list of prequalified contractors and prequalification categories is maintained on ODOT’s website.
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Prevailing Wage Prevailing wage laws require construction contractors who work on public projects to pay construction workers at least the Ohio prevailing wage rate and benefits in the area which they are working. Prevailing wage is the actual hourly wages, benefits, and overtime to be paid to workers, calculated by US DOL and Ohio Department of Commerce for construction. To protect its construction trades workers, Ohio has had a prevailing wage law in place since 1931. Prime Contractor The selected, ODOT prequalified contractor responsible for at least 51% of a project’s awarded contract dollars (unless otherwise called out as a different percentage in the contract). Programming Package Packet of information necessary to schedule an LPA project consisting of an LPA Scope of Services form, environmental screening/CE-1 Form, and the Ellis Milestone Chart. Project Engineer The licensed professional engineer (PE) who has been officially designated as an LPA’s principal representative for attending to project responsibilities as noted in the signed project agreement between ODOT and the LPA. Proprietary A product or process available only through a single supplier or manufacturer. Protected Classes (Persons) Where designation of persons by race, color, or national origin is required, the following designations ordinarily may be used:
• "Black Americans," which includes persons having origins in any of the Black racial groups of Africa;
• "Hispanic Americans," which includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;
• "Native Americans," which includes persons who are American Indians, Eskimos, Aleuts,
or Native Hawaiians;
• "Asian-Pacific Americans," which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories of the Pacific Islands (Republic of Palau), the Commonwealth of the Northern Marianas Islands, Macao, Fiji, Tonga, Kiribati, Tuvalu, Nauru, Federated States of Micronesia, or Hong Kong; and
• "Subcontinent Asian Americans," which includes persons whose origins are from India,
Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal or Sri Lanka.
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Preconstruction Conference The preconstruction conference (Precon) attended by the prime contractor and ODOT personnel is a discussion of the details on constructing the project, bid proposal, specifications, plans, method of payment, and the prime contractor’s progress schedule. Public Meeting An announced meeting conducted by transportation officials designed to facilitate public participation in the decision-making process and to assist the public in gaining an informed view of a proposed project during the transportation development process. Quality-Based Selection Process A negotiated procurement process for consultant selection based on qualifications and competence in relation to the work to be performed. Race Conscious A measure or program focused specifically on assisting only DBEs. The establishment of contract goals for DBE participation is considered a race conscious measure. Race Neutral Measures which can be used to increase opportunities for all small businesses, not just DBEs, and do not involve setting specific goals for the use of DBEs on individual contracts. Race neutral DBE participation includes any time a DBE firm wins a prime contract through customary competitive procurement procedures or is awarded a subcontract on a prime contract that does not carry a DBE contract goal. However, CUF must be established in order for the work to be counted toward the overall DBE goal. Recalls/Rehires A recall or rehire is a non-salaried employee whose break in service from a contractor has been 59 days or less. Record Retention A document retention policy lays the ground rules for how to manage documents and records from creation to destruction. This includes both physical and digital records like: emails, invoices, etc. Restitution To recompense for injury or loss. Show-Cause Notice A written notification to a contractor, based on the determination of the reviewer (or in appropriate cases by a higher-level authority), that the contractor is in non-compliance with the equal opportunity requirements. The notice informs the contractor of the specific basis for the determination and provides the opportunity within 30 days from the receipt of the notice to present an explanation as to why sanctions should not be imposed.
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Small Business Enterprise A Small Business Enterprise (SBE) is a firm that meets the SBA-established, industry-specific maximum small business size standards (including its affiliates). Sole Source Qualifications-based vendor selection with or without competitive negotiation techniques. Selection of a contractor for negotiations based on its reputation or prior relationship with ODOT without first going through a competitive selection process. Use of this method is generally limited to situations where the vendor offers a unique and innovative concept, demonstrates a unique capability to provide particular services, or offers a concept or services not otherwise available to ODOT. Standard Industry Practice A method or technique that has been generally accepted as something done regularly by a large segment of an industry or industries, without objection, and has become a standard way of doing things. State Transportation Improvement Program ODOT’s State Transportation Improvement Program (STIP) sets forth all projects that have been approved for funding under the various programs administered by ODOT. Toll Revenue Credit The attribution of toll revenues used to build or improve public transportation facilities that serve interstate travel. This financing alternative does not provide any additional funding but allows the pro rata share to be paid by toll revenue credits to reach 100% federal participation in a federal-aid transportation improvement project. Transportation Improvement Program A Transportation Improvement Program (TIP) is issued by an MPO comprising a listing of local projects to be funded, including those involving state and/or federal funding programs. Trucking Firm A trucking firm is any legal business entity that owns more than one truck and hires those trucks to contractors on public works projects. The owner(s) of a trucking firm may either drive the vehicle or hire employees to drive the vehicles. If the owner(s) hire(s) an employee to drive, that employee driver is subject to the appropriate prevailing wage. U.S. Department of Labor The US DOL administers federal labor laws to guarantee workers' rights to fair, safe, and healthy working conditions, including minimum hourly wage and overtime pay, protection against employment discrimination, and unemployment insurance. The US DOL administers and enforces more than 180 federal laws. These mandates and the regulations that implement them cover many workplace activities for about 10 million employers and 125 million workers. U.S. Department of Labor – Wage and Hour Division The US DOL Wage and Hour Division (US DOL WHD) is responsible for the administration and enforcement of laws which collectively cover private and state and local government
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employment. WHD is comprised of a nationwide staff of investigators, supervisors, and technical and clerical employees responsible for enforcing the Fair Labor Standards Act (FLSA), government contracts labor standards statutes, the Migrant and Seasonal Agricultural Worker Protection Act, the Employee Polygraph Protection Act, and the Family and Medical Leave Act (FMLA). U.S. Department of Transportation Established in 1966, USDOT ensures the safest, most efficient and modern transportation system in the world that improves the quality of life for all American people and communities, from rural to urban, and increases the productivity and competitiveness of American workers and businesses. USDOT employs almost 55,000 people across the country, in the Office of the Secretary of Transportation (OST), and its operating administrations and bureaus, each with its own management and organizational structure. U.S. Equal Employment Opportunity Commission The U.S. Equal Employment Opportunity Commission (EEOC) is responsible for enforcing federal laws that make it illegal to discriminate against or harass a job applicant or an employee because of the person's race/color, religion, sex (including pregnancy, gender identity [including transgender status and sexual orientation]), national origin, age (40 or older), disability, genetic information, and sexual harassment. EEOC is also responsible for investigating retaliation claims if there was an underlying discrimination or harassment claim.
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CONSTRUCTION DEFINITIONS & ACRONYMS
The Ohio Contractor Compliance Standard Operating Procedures (SOP) Manual includes the policies and procedures ODOT follows to successfully administer its statewide Contractor Compliance Program. Also critical to ODOT’s Contractor Compliance Program’s success is a general knowledge of fundamental construction concepts and practices. ODOT’s Construction Manual of Procedures (MOP) helps provide a foundation for the construction concepts and terminology frequently referenced and utilized by ODOT’s contractor compliance personnel. To access ODOT’s Construction MOP, please visit: http://www.dot.state.oh.us/Divisions/ConstructionMgt/Pages/2017-MOP.aspx In addition, another resource of definitions and acronyms utilized by contractor compliance related to construction activities and the industry is the Construction and Material Specifications (C&MS). Please visit: http://www.dot.state.oh.us/Divisions/ConstructionMgt/OnlineDocs/Pages/2019-Online-Spec-Book.aspx
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EQUAL EMPLOYMENT OPPORTUNITY & AFFIRMATIVE ACTION
23 CFR 230, Subparts A & C Code of Federal Regulations (CFR) Part 23, Subparts A and C of Section 230 prescribe the policies, procedures, and guides relative to the implementation of an EEO program on federal and federal-aid highway construction contracts, FHWA federal-aid policy, and FHWA and state responsibilities relative to a state highway agency’s internal EEO. These regulations assure compliance with the EEO requirements of federally-assisted highway construction contracts. While the ODOT Division of Human Resources, Office of Equal Opportunity (OEO), primarily administers ODOT’s overall EEO and Affirmative Action (AA) programs, ODOT’s Office of Civil Rights Compliance’s policies and procedures outlined in this SOP also contribute to ODOT’s success in these areas. Specifically, they help ensure all Ohio contractors, subcontractors, materials and supplies vendors (MSVs), and consultants administer fair and equitable employment policies and practices on all ODOT projects. Included in ODOT’s Contractor Compliance SOP is contractor adherence with certain EEO laws. Generally speaking, EEO laws prohibit workplace discrimination. Specifically, they prohibit employment discrimination on the basis of age, disability, equal pay/compensation, genetic information, harassment, national origin, pregnancy, race/color, religion, retaliation, sex (including sexual orientation and gender identity), and sexual harassment. As it relates to contractor’s and subcontractor’s adherence to EEO and affirmative action laws, ODOT utilizes the following when evaluating whether a contractor or subcontractor is compliant or non-compliant: Construction Contract Specifications Whenever an ODOT contractor or subcontractor (two-tier subs permitted) subcontracts a portion of its work involving any construction trade, it must physically include the most recent version of Form FHWA-1273 (not required on state-funded projects) in each subcontract in excess of $10,000. The Office of Contract Sales & Estimating is responsible for ensuring the most recent version of Form FHWA-1273 is physically included in all federally-funded projects. The Office of Contract Sales & Estimating developed a process to ensure compliance with this requirement. For local-let projects, the most recent version of Form FHWA-1273 must be physically incorporated into each Federal-Aid Local-let construction contract. Click here to view the process.
ODOT contractors must implement the specific affirmative action standards provided in federal EEO regulations. The goals set forth in the solicitation from which the contract resulted are expressed as percentages of the total hours of employment and training of minority and women the ODOT contractor should reasonably be able to achieve in each construction trade in which it has employees in the covered area.
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EEO/AA Goals Construction contractors performing construction work in Ohio geographical areas where there are no federal or federally-assisted construction contracts must apply the minority and female goals established for the Ohio geographical area where the work is being performed. Goals are published periodically in the Federal Register in notice form, and such notices may be obtained from any OFCCP office or from any federal procurement contracting officers. The contractor is expected to make substantially uniform progress in meeting its goals in each craft during the period specified. Neither the provisions of any collective bargaining agreement, nor the failure by a union with whom the ODOT contractor has a collective bargaining agreement to refer either minorities or women, excuse the ODOT contractor's obligations under these specifications, Executive Order 11246, or the regulations promulgated pursuant thereto. In order for the nonworking training hours of apprentices and trainees to be counted in meeting goals, such apprentices and trainees must be employed by the ODOT contractor during the training period, and the ODOT contractor must have made a commitment to employ the apprentices and trainees at the completion of their training, subject to the availability of employment opportunities. Trainees must be trained pursuant to training programs approved by US DOL. ODOT contractors must take specific affirmative actions to ensure compliance with EEO laws. The evaluation of the ODOT contractor's compliance are based upon its effort to achieve maximum results from its actions. The ODOT contractor must document these efforts fully and shall implement affirmative action steps at least as extensive as the following:
1. Ensure and maintain a working environment free of harassment, intimidation, and coercion at all sites and in all facilities at which the ODOT contractor's employees are assigned to work. The ODOT contractor, where possible, must assign two or more women to each construction project. The ODOT contractor must specifically ensure all lead workers, superintendents, and other on-site supervisory personnel are aware of and carry out the ODOT contractor's obligation to maintain such a working environment, with specific attention to minority or female individuals working at such sites or in such facilities.
2. Establish and maintain a current list of minority and female recruitment sources, provide written
notification to minority and female recruitment sources and to community organizations when the ODOT contractor or its unions have employment opportunities available and maintain a record of the organizations' responses.
3. Maintain a current file of the names, addresses, and telephone numbers of each minority and female
off-the-street applicant and minority or female referrals from a union, a recruitment source or community organization, and of what action was taken with respect to each such individual. If such individual was sent to the union hiring hall for referral and was not referred back to the ODOT contractor by the union or, if referred, not employed by the ODOT contractor, this shall be documented in the file with the reason along with whatever additional actions the ODOT contractor may have taken.
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4. Provide written notification to ODOT when the union or unions with which the ODOT contractor has a collective bargaining agreement has not sent a minority or woman previously referred by the ODOT contractor, or when the ODOT contractor has other information that the union referral process has impeded the ODOT contractor's efforts to meet its obligations.
5. Develop on-the-job training opportunities and/or participate in training programs for the area which
expressly include minorities and women, including upgrading programs and apprenticeship and trainee programs relevant to the ODOT contractor's employment needs, especially those programs funded or approved by US DOL.
6. Disseminate the contractor's EEO policy by providing notice of the policy to unions and training
programs and requesting their cooperation in assisting the ODOT contractor in meeting its EEO obligations. Some examples of how this can be accomplished are by including it in any policy manual and collective bargaining agreement; by publicizing it in the company newsletter, annual report, etc.; by specific review of the policy with all management personnel and with all employees at least once a year; and by posting the company EEO policy on bulletin boards accessible to all employees at each location where construction work is being performed.
7. Review, at least annually, the company's EEO policy and AA obligations with all employees having
any responsibility for hiring, assignment, layoff, termination, or other employment decisions including specific review of these items with onsite supervisory personnel such as superintendents, general lead worker, etc. prior to the initiation of construction work at any job site. A written record shall be made and maintained identifying the time and place of these meetings, persons attending, subject matter discussed, and disposition of the subject matter.
8. Disseminate the ODOT contractor's EEO policy externally by including it in any advertising in the
news media, specifically those targeted toward minorities and women, and by providing written notification to and discussing the ODOT contractor's EEO policy with other ODOT contractors and subcontractors with whom the ODOT contractor does or anticipates doing business.
9. Direct its recruitment efforts, both oral and written, to minority, female, and community
organizations; to schools with minority and female students; and to minority and female recruitment and training organizations serving the ODOT contractor's recruitment area and employment needs. No later than one month prior to the date for the acceptance of applications for apprenticeship or other training by any recruitment source, the ODOT contractor must send written notification to organizations such as the above, describing the openings, screening procedures, and tests to be used in the selection process.
10. Encourage present minority and female employees to recruit other minorities and females and,
where reasonable, provide after school, summer, and vacation employment to minority and female youth both on the site and in other areas of an ODOT contractor's workforce.
11. Validate all tests and other selection requirements where there is an obligation to do so under 41
CFR part 60-3.
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12. Conduct, at least annually, an inventory and evaluation of at least all minority and female personnel for promotional opportunities and encourage these employees to seek or to prepare for, through appropriate training, etc., such opportunities.
13. Ensure seniority practices, job classifications, work assignments, and other personnel practices do
not have a discriminatory effect by continually monitoring all personnel and employment-related activities to ensure the EEO policy and the ODOT contractor's obligations are being carried out.
14. Ensure that all facilities and company activities are non-segregated except that separate or single-
user toilet and necessary changing facilities shall be provided to assure privacy between males and females.
15. Document and maintain a record of all solicitations of offers for subcontracts from minority and
female construction contractors and suppliers, including circulation of solicitations to minority and female contractor associations and other business associations.
16. Conduct a review, at least annually, of all supervisors’ adherence to and performance under the
contractor's EEO policies and AA obligations.
ODOT contractors are encouraged to participate in voluntary associations which assist in fulfilling one or more of their EEO/AA obligations. The efforts of a contractor association, joint contractor-union, contractor-community, or other similar group of which the ODOT contractor is a member and participant may be asserted as fulfilling any one or more of the above obligations provided the ODOT contractor actively participates in the group, makes every effort to assure the group has a positive impact on the employment of minorities and women in the industry, ensures the concrete benefits of the program are reflected in the ODOT contractor's minority and female workforce participation, makes GFE to meet its individual goals and timetables, and can provide access to documentation which demonstrates the effectiveness of actions taken on behalf of the ODOT contractor. The obligation to comply, however, is on the ODOT contractor and failure of such a group to fulfill an obligation shall not be a defense for the ODOT contractor's noncompliance. ODOT contractors are required to provide EEO and AA for all minority groups, both male and female, and all women, both minority and non-minority. Consequently, the ODOT contractor may be in violation of federal law if a particular group is employed in a substantially disparate manner (for example, even though the ODOT contractor has achieved its goals for women generally, the ODOT contractor may be in violation of the executive order if a specific minority group of women is underutilized). However, the ODOT contractor may provide GFE regarding why it was unable to meet full utilization in the categories that are underutilized. ODOT contractors must not use the goals and timetables or AA standards to discriminate against any person because of race, color, religion, sex, sexual orientation, gender identity, or national origin. Thus, ODOT contractors need to ensure their affirmative action programs are not considered quotas. ODOT contractors should set reasonable targets in order to obtain full utilization based on the available workforce measured against expected turnover.
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ODOT contractors shall not enter into any subcontract with any person or firm debarred from U.S. government contracts pursuant to Executive Order 11246. EEO/AA Compliance ODOT contractors must carry out such sanctions and penalties for violations of Executive Order 11246, Form FHWA-1273, and PN 15, including suspension, termination and cancellation of existing subcontracts. Any contractor who fails to carry out such sanctions and penalties shall be in violation of this section of the SOP. ODOT contractors, in fulfilling their obligations, must implement specific AA steps, at least as extensive as those standards outlined above, so as to achieve maximum results from their efforts to ensure EEO. If an ODOT contractor fails to comply, the Director shall proceed in accordance with 41 CFR § 60-4.8. ODOT contractors must designate a responsible official to monitor all employment-related activities to ensure the contractor’s EEO policy is being carried out, to submit reports relating to the provisions hereof as may be required by the Government, and to keep records. Records for each employee must include at least the employee’s name, address, telephone numbers, construction trade, union affiliation, if any, employee identification number, when assigned, Social Security number, race, sex, status (e.g., mechanic, apprentice trainee, helper, or laborer), dates of changes in status, hours worked per week in the indicated trade, rate of pay, and locations at which the work was performed. Records must be maintained in an easily understandable and retrievable form; however, to the degree existing records satisfy this requirement, contractors shall not be required to maintain separate records. Nothing herein provided shall be construed as a limitation upon the application of other laws which establish different standards of compliance or upon the application of requirements for the hiring of local or other area residents.
Other Laws Related to EEO/AA
Fair Labor Standards Act The US DOL Fair Labor Standards Act (FLSA) establishes minimum wage, overtime pay, recordkeeping, and youth employment standards affecting employees in the private sector and in federal, state, and local governments. Covered nonexempt workers are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate not less than one and one-half times the regular rate of pay is required after 40 hours of work in a workweek. Ohio has its own minimum wage and overtime laws, which are detailed here.
Minimum Wage
The 2019 Ohio minimum wage for “Non-Tipped Employees” is $8.55 per hour. “Non-Tipped Employees” include any employee who does not engage in an occupation in which he/she customarily and regularly receives more than $30.00 in tips per month.
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Employers who gross less than $314,000 shall pay its employees no less than the current federal minimum wage rate of $7.25 per hour. Employees under the age of 16 shall be paid no less than the current federal minimum wage rate of $7.25 per hour. The 2019 Ohio minimum wage for “Tipped Employees” is $4.30 per hour plus tips. “Tipped Employees” include any employee who engages in an occupation in which he/she customarily and regularly receives more than $30.00 per month in tips. Employers electing to use the tip credit provision must be able to show tipped employees receive at least the minimum wage when direct or cash wages and the tip credit amount are combined.
Overtime
According to Ohio state law, an employer must pay an employee for overtime at a wage rate of one and one-half times the employee’s wage rate for hours in excess of 40 hours in one work week, except for employers grossing less than $150,000 per year.
Recordkeeping
Each employer shall keep records for at least three years, available for copying and inspection by the Director of the Ohio Department of Commerce, showing the following information concerning each employee:
A. Name B. Address C. Occupation D. Rate of pay E. Amount paid each pay period F. Hours worked each day and each work week
The records may be opened for inspection or copying at any reasonable time, and no employer shall hinder or delay the Director of the Ohio Department of Commerce in the performance of these duties.
Exemptions The following are individuals exempt from minimum wage:
1. Any individual employed by the United States; 2. Any individual employed as a baby-sitter in the employer’s home, or a live-in companion
to an ill, convalescing, or elderly person whose principal duties do not include housekeeping;
3. Any individual employed as an outside salesman compensated by commissions or in a bona
fide executive, administrative, or professional capacity, or computer professionals; 4. Any individual who volunteers to perform services for a public agency which is a state, a
political subdivision of a state, or an interstate government agency, if:
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a. the individual receives no compensation or is paid expenses, reasonable benefits,
or a nominal fee to perform the services for which the individual volunteered; and b. such services are not the same type of services which the individual is employed
to perform for such public agency.
5. Any individual who works or provides personal services of a charitable nature in a hospital or health institution for which compensation is not sought or contemplated;
6. Any individual in the employ of a camp or recreational area for children under 18 years of
age when such camp or recreational area is owned and operated by a non-profit organization or group of organizations.
7. Employees of a solely family-owned and operated business who are family members of an
owner.
Davis-Bacon and Related Acts The US DOL Davis-Bacon and Related Acts apply to contractors and subcontractors performing on federally-funded or assisted contracts in excess of $2,000 for the construction, alteration, or repair (including painting and decorating) of public buildings or public works. Contractors and subcontractors subject to Davis-Bacon and Related Acts must pay their laborers and mechanics employed under the contract no less than the local prevailing wages and fringe benefits for corresponding work on similar projects in the area. The Davis-Bacon Act directs US DOL to determine Ohio’s local prevailing wage rates. The Davis-Bacon Act applies to contractors and subcontractors performing work on federal or District of Columbia contracts. The Davis-Bacon Act prevailing wage provisions apply to the “Related Acts” under which federal agencies assist construction projects through grants, loans, loan guarantees, and insurance. Contractors and subcontractors on Davis-Bacon Act contracts in excess of $150,000, or Related Act contracts in excess of $100,000, are also required, pursuant to the Contract Work Hours and Safety Standards Act, to pay laborers and mechanics one and one-half times their basic rates of pay for all hours over 40 worked on a covered contract in a workweek. Employee Rights
The Davis-Bacon and Related Acts provide laborers and mechanics on ODOT contracts the right to receive at least the local prevailing wages (including fringe benefits), as determined by US DOL, for the type of work performed. The Wage and Hour Division and respective federal contracting agencies accept complaints of alleged Davis-Bacon Act violations.
Recordkeeping Under the Davis-Bacon and Related Acts, ODOT contractors must maintain payroll and basic records for all covered laborers and mechanics during the course of the work and for a period of three years thereafter.
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Records to be maintained include:
• Name, address, and Social Security number of each worker; • Each employee’s work classifications; • Hourly rates of pay, including rates of contributions or costs anticipated for fringe
benefits or their cash equivalents; • Daily and weekly numbers of hours worked; • Deductions made; • Actual wages paid; • Detailed information regarding bona fide fringe benefit plans and programs, including
records that show the plan or program has been communicated in writing to the laborers and mechanics affected; and
• If applicable, detailed information regarding approved apprenticeship or trainee programs.
Reporting (Certified Payroll)
Each ODOT contractor and subcontractor must, on a weekly basis, provide ODOT a copy of all payrolls providing the information listed above under “Recordkeeping” for the preceding weekly payroll period, except the full Social Security numbers and home addresses shall not be included on weekly transmittals. Instead, the payrolls only need to include an individually identifying number for each employee (e.g., the last four digits of the employee’s Social Security number). Each payroll submitted is accompanied by a “Statement of Compliance.” The statement is to be signed by the contractor or subcontractor, or by an authorized officer or employee of the contractor or subcontractor who supervises the payment of wages. The form is to be delivered to a representative of the federal or state agency in charge via CRL in accordance with PN 060 or PN 061 depending on the funding source for the project. As noted above, certified payroll must be submitted within seven days after the regular pay date for the pay period. From time to time, ODOT contractors may also be asked to submit, via survey, wage data from construction projects on which they have employed laborers and mechanics for use by WHD in determining the local prevailing wage rates that will apply to Davis-Bacon and Related Acts-covered projects in the future. The submission of wage data is encouraged but voluntary. When new surveys are conducted to enable WHD to reflect the local prevailing wages, contractors and others may use the WD-10 Form, Report of Construction Contractor’s Wage Rates.
Notices and Posters Every employer performing work covered by the labor standards of the Davis-Bacon and Related Acts must post the WH-1321 “Employee Rights Under the Davis-Bacon Act” poster at the site of the work in a prominent and accessible place where it may be easily seen by employees. The applicable wage determination must be similarly posted.
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Penalties/Sanctions ODOT contractors and subcontractors found to have not complied with their obligations to employees under the Davis-Bacon Act or found to be otherwise in violation of any of the Related Acts may be subject to debarment from future contracts for up to three years. In addition, contract payments may be withheld in sufficient amounts to satisfy liabilities for unpaid wages and for liquidated damages that result from overtime violations of the Contract Work Hours and Safety Standards Act (CWHSSA). Breach of the required contract clauses under the Davis-Bacon and Related Acts and CWHSSA may also be grounds for termination of the contract. Contractors and subcontractors may challenge the Wage and Hour Division’s determinations of violations and debarment before an administrative law judge. Contractors and subcontractors may appeal decisions by administrative law judges to US DOL’s Administrative Review Board (ARB). ARB determinations on violations may be appealed to and are enforceable through the federal courts. Falsification of the required certified payroll records or any kickback of wages may subject a contractor or subcontractor to civil or criminal prosecution, the penalty for which may be fines and/or imprisonment.
Relation to State, Local, and other Federal Laws Congress has extended the Davis-Bacon prevailing wage requirements to numerous other laws – “Related Acts” – that provide federal assistance for construction through loans, grants, loan guarantees, and insurance. These laws require payment of prevailing wages determined in accordance with the Davis-Bacon Act on federally-assisted construction undertaken pursuant to the relevant law. Examples of the Related Acts are the Federal-Aid Highway Act, the Housing and Community Development Act of 1974 (and various other HUD-administered laws), and the Federal Water Pollution Control Act. The Copeland "Anti-Kickback" Act prohibits ODOT contractors from inducing any person employed in Davis-Bacon covered construction to give up any part of the compensation to which he or she is entitled and requires contractors to submit a weekly statement of the wages paid to each employee performing Davis-Bacon covered work. Implementing regulations govern allowable payroll deductions. ODOT contractors on projects subject to Davis-Bacon labor standards may also be subject to overtime pay requirements under CWHSSA and FLSA. In addition to these federal labor standards, state and local prevailing wage and overtime pay requirements may apply.
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US DOL Compliance Assistance US DOL provides ODOT and its contractors information and assistance on how to comply with Davis-Bacon and Related Acts, such as:
• The US DOL Prevailing Wage Resource Book: https://www.dol.gov/agencies/whd/government-contracts/prevailing-wage-resource-book
• The Davis-Bacon Forms page:
https://www.dol.gov/whd/programs/dbra/forms.htm
Other compliance assistance related to Davis-Bacon and Related Acts is available on the Davis-Bacon and Related Acts Web page: https://www.dol.gov/whd/programs/dbra/Survey/surveys.htm Also, the SAM.gov website provides a single location for federal agency officials to obtain Davis-Bacon wage determinations for use in covered contracts. The SAM.gov site library provides a variety of links that relate to compliance with prevailing wage laws applicable to federal and federally-assisted contracts: https://Beta.SAM.gov/.
Contract Work Hours and Safety Standards Act CWHSSA is administered by US DOL WHD. CWHSSA applies to contractors and subcontractors on certain contracts with the federal government or ODOT that require or involve the employment of laborers or mechanics (including guards and watchpersons), including federal service contracts and federal construction contracts over $150,000. Covered contracts include those entered into by the federal government, any agency or instrumentality of the federal government, any territory of the U.S., or the District of Columbia. CWHSSA also applies to certain federally-assisted ODOT construction contracts over $100,000 subject to Davis-Bacon and Related Acts wage standards where the federal government is not a direct party, except those contracts where the federal assistance takes the form of only a loan guarantee or insurance. Certain ODOT contracts are exempt from CWHSSA. These include contracts for the following:
• Transportation by land, air, or water; • Transmission of intelligence; • Purchase of supplies, materials, or articles ordinarily available in the "open market"; • Work required to be done in accordance with provisions of the Walsh-Healey Public Contracts Act;
and • Contracts administratively exempted by the Secretary of Labor in special circumstances in the public
interest to prevent injustice or undue hardship or to avoid serious impairment of government business.
In summary, CWHSSA requires ODOT contractors and subcontractors to pay laborers and mechanics, including watchpersons and guards, employed in the performance of covered contracts one and one-half times their basic rate of pay for all hours worked over 40 in a work week.
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Employee Rights
CWHSSA provides workers on ODOT contracts the right to receive one and one-half times their basic rate of pay for all hours worked over 40 in a workweek on such contracts. WHD accepts complaints of alleged CWHSSA wage violations. WHD’s Ohio-based district offices are as follows:
Address Phone
U.S. Department of Labor (513) 684-2908
Wage & Hour Division (866) 4-USWAGE
550 Main Street Room 10-409 Cincinnati, OH 45202-5208
(866) 487-9243
U.S. Department of Labor (216) 357-5400
Wage & Hour Division (866) 4-USWAGE
Federal Office Building 1240 E. 9th Street, Room 817 Cleveland, OH 44199-2054
(866) 487-9243
U.S. Department of Labor (614) 469-5678
Wage & Hour Division (866) 4-USWAGE
200 North High Street, Room 646 Columbus, OH 43215-2408
(866) 487-9243)
Recordkeeping
• Notices and Posters
CWHSSA does not have its own posting requirement. However, if the contract to which CWHSSA applies is subject to Davis-Bacon and Related Acts requirements, the Notice to all Employees Working on Federal or Federally Financed Construction Projects for Davis-Bacon contracts poster must be posted. If the contract to which CWHSSA applies is subject to the Service Contract Act’s requirements, the “Employee Rights on Government Contracts” poster must be posted. The appropriate poster(s) must be posted at the site of the work in a prominent and accessible place where it may be easily seen by employees. There is no size requirement for the posters, but they must be easily readable.
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• Recordkeeping CWHSSA recordkeeping requirements include maintaining payroll records that provide the following information for each covered worker:
• Name; • Address; • Social Security number; • Correct classifications; • Hourly rates of wages paid; • Daily and weekly number of hours worked; • Deductions made; and • Actual wages paid.
Records must be maintained during the course of the work and for a period of three years from the completion of the contract as outlined in PN 060 and PN 061, FHWA 1273, 29 CFR § 3.4, ORC 4115.07 (one year after completion of project), and C&MS 109.21. They also must be made available to US DOL, ODOT, and Ohio Department of Commerce. Depending on the type of federal contract involved, the recordkeeping requirements of Davis-Bacon and Related Acts or the McNamara-O'Hara Service Contract Act may also apply to contracts subject to CWHSSA.
• Reporting Certified Payroll Reports – on ODOT contracts to which the labor standards provisions of Davis-Bacon and Related Acts apply, each DOT contractor and subcontractor is required by Davis-Bacon and Related Acts to provide ODOT a weekly statement of the wages paid to each of its employees engaged in covered work. Each Certified Payroll Report submitted is accompanied by a Payroll Report and Statement of Compliance. The Statement of Compliance is to be signed by the ODOT contractor or subcontractor or by an authorized officer or employee of the contractor or subcontractor who supervises the payment of wages. The statements must be delivered through ODOT’s AASHTO Civil Rights and Labor (CRL) system within seven days after the regular pay date for the pay period. Please see the AASHTOWare Project Civil Rights & Labor section of this SOP for detailed Certified Payroll Report submission instructions.
Penalties/Sanctions
ODOT contractors or subcontractors who intentionally violate CWHSSA may be subject to fines, imprisonment, or both. ODOT contractors and subcontractors who violate CWHSSA’s overtime wage provision are liable to the affected employee(s) for the unpaid wages. Overtime wage violations may also result in the assessment of liquidated damages for each calendar day an employee is allowed to work in excess of a 40-hour work week without payment of the required overtime compensation. Missing wages are calculated by US DOL.
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Accrued contract amounts may be withheld in sums necessary to satisfy the liability for unpaid wages and liquidated damages. If the damages sum is determined to be incorrect, or the contractor or subcontractor inadvertently violated the provisions of CWHSSA while exercising due care, ODOT may recommend appropriate adjustments in the liquidated damages to the Administrator of WHD, who shall issue an order with respect to the recommendation. Such order may be appealed to WHD’s Administrative Review Board (ARB). Employees have rights of action and/or of intervention against the ODOT contractor and its sureties if the amounts withheld are insufficient to reimburse the unpaid wages. Under such an action, it is no defense that employees accepted less than the required rate of wages or voluntarily made refunds. ODOT contractors or subcontractors found to have committed willful or aggravated violations of CWHSSA’s overtime requirements may have their contracts terminated and may be declared ineligible to receive future ODOT contracts for a period not to exceed three years.
Relation to State, Local, and Other Federal Laws The provisions of CWHSSA may also apply to Davis-Bacon and Related Acts on ODOT contracts where the contract is financed in whole or in part by grants or loans from the U.S. Government or loans insured or guaranteed by the U.S. Government, except where the federal assistance is only in the nature of a loan guarantee or insurance. CWHSSA is supplemental to the overtime requirements of FLSA. In addition, Ohio state overtime laws also apply to ODOT contracts.
USDOL Assistance US DOL provides ODOT, its contractors, and others with information and assistance on how to comply with CWHSSA. For more information on CWHSSA, please contact the respective local WHD office (above), call 1-866-4USWAGE, or visit https://webapps.dol.gov/elaws/elg/cwhssa.htm.
Title VII of the Civil Rights Act of 1964 (Title VII) This law makes it illegal to discriminate against someone on the basis of race, color, religion, national origin, or sex. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires employers to reasonably accommodate an applicant’s and/or an employee’s sincerely held religious beliefs, unless doing so would impose more than a de minimis undue cost or burden on the operation of the employer's business. The Pregnancy Discrimination Act
This law amended Title VII to make it illegal to discriminate against a woman because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
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The Equal Pay Act of 1963 (EPA) This law makes it illegal to pay different wages to men and women if they perform equal work in the same workplace. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The Age Discrimination in Employment Act of 1967 (ADEA) This law protects people who are 40 years of age or older from discrimination because of age. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. Title I of the Americans with Disabilities Act of 1990 (ADA) This law makes it illegal to discriminate against a qualified individual with a disability in the private sector and in state and local governments. The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit. The law also requires employers to reasonably accommodate the known physical or mental limitations of an otherwise qualified individual with a disability who is an applicant or employee, unless doing so would impose an undue hardship on the operation of the employer's business. Sections 102 and 103 of the Civil Rights Act of 1991 Among other things, this law amends Title VII and the ADA to permit jury trials and compensatory and punitive damage awards in intentional discrimination cases. Sections 501 and 505 of the Rehabilitation Act of 1973 Section 501 prohibits discrimination against a qualified individual with a disability in the federal sector. Section 505 contains provisions governing remedies and attorney’s fees. The law also prohibits retaliating against an individual because the person complained about discrimination, filed a charge of discrimination, or participated in an investigation or lawsuit that was based on illegal discrimination. Section 504 of the Rehabilitation Act of 1973 This was the first disability civil rights law to be enacted in the United States. It prohibits discrimination against individuals with disabilities in programs that receive federal financial assistance. This law requires recipients of federal financial assistance to provide accessible programs and services for individuals with disabilities. The Genetic Information Nondiscrimination Act of 2008 (GINA) This law makes it illegal to discriminate against employees or applicants because of genetic information. Genetic information includes information about an individual's genetic tests and the genetic tests of an individual's family members, as well as information about any disease, disorder, or condition of an individual's family members (i.e. an individual's family medical history). The law also makes it illegal to retaliate against a person because the person complained about discrimination, filed a charge of discrimination, or participated in an employment discrimination investigation or lawsuit.
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Copeland Act The “Anti-Kickback” provisions of the Copeland Act applies to contractors and subcontractors that perform work on contracts for construction, prosecution, repair, or completion of public buildings, public works, or works which are financed in whole or in part by loans or grants from the United States. The Copeland (Anti-Kickback) Act makes it unlawful to induce, by force, intimidation, threat of procuring dismissal from employment, or otherwise, any person employed in the construction or repair of public buildings or public works, financed in whole or in part by the United States, to give up any part of the compensation to which that person is entitled under a contract of employment. Any contractor or subcontractor who violates the Copeland Act is subject to a $5,000.00 fine, imprisonment for up to five years, or both. ODOT Oversight
In order for an ODOT contractor to be considered compliant, the following are required: EEO/AA Officers ODOT contractors must designate a company EEO/AA Officer and outline the EEO/AA Officer’s job duties and responsibilities. ODOT contractors must also educate all employees at time of hire and (at least) annually how to contact the EEO/AA Officer and define the responsibilities for which the EEO/AA Officer is responsible. EEO/AA Policies and Programs ODOT contractors must develop a written EEO/AA Policy/Program that is signed and dated annually by the CEO. The policy must state the legal obligations and expectations of the contractor’s commitment to EEO/AA. The contractor needs to indicate what process it will take to address complaints of discrimination, harassment, and retaliation. Harassment Policies ODOT contractors must also develop a separate written harassment policy and complaint procedures or incorporate the company policy into the written EEO/AA Policy/Program. The plan must identify the process to be followed to report a complaint and what actions the ODOT contractor will take to correct any findings of discriminatory/harassing practices. ODOT encourages more than one point of contact with no chain-of-command requirement; a best practice is to include a mandatory supervisory reporting requirement. Fliers and Posters ODOT contractors must clearly post all required EEO/AA fliers and posters as outlined in this SOP (and included in its Appendices) in highly-visible and high-worker traffic areas on each ODOT project.
Employee Education ODOT contractors must advise and distribute information related to its EEO/AA and harassment policies to all employees (at time of hire and at least annually), including the EEO/AA officer’s name and contact information. Again, ODOT encourages more than one point of contact with no chain-of-command requirement; a best practice is to include a mandatory supervisory reporting requirement.
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Community Inclusion ODOT contractors must recruit protected group members (i.e., women, minorities, and/or individuals with disabilities) for employment and promotions. Additionally, ODOT contractors must document all external and internal recruitment efforts. Recruitment is a proactive effort that includes such practices as establishing relationships with diverse special interest groups, community-based organizations, etc. Employee Empowerment ODOT contractors should encourage their employees to refer other diverse individuals for employment consideration. Opportunities Announcements ODOT contractors should advertise all job announcements through internal job postings, newspapers, or other means. The job posting should include encouragement of applications from one or more of the following groups:
• Women • Individuals with Disabilities • Minorities • Veterans
All postings should include: “An Equal Opportunity Employer.”
Ongoing Education All ODOT contractors should (at least) annually update all employees, suppliers, vendors, subcontractors, and recruitment sources about the contractor’s EEO/AA and Harassment policies with updated contact information. ODOT contractors must also notify all subcontractors with subcontracts in excess of $10,000 (at least) annually of their EEO/AA obligations. The ODOT contractor’s subcontractors must (at least) annually provide written copies of their own EEO/AA Policies to the ODOT contractor. Record Keeping ODOT contractors must maintain a three-year log or record of all recruitment efforts, including dates of contact, and a record of all walk-ins who contact the ODOT contractor regarding work as well as any resulting action(s) taken. Employment Applications ODOT contractors are encouraged to create an employment application requiring only information that is essential to performance of work, including work experience, work-related knowledge, education, and any certifications or licenses held. It is unlawful for an ODOT contractor to include on its employment application questions related to sex, age, race/color, disability, religion, national origin, genetic information, or pregnancy. ODOT also discourages questions related to an applicant’s marital status, total number of dependents, height, weight, home ownership, or political affiliation. ODOT contractors should also not require applicants to submit any personal photographs.
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ODOT Division of Opportunity, Diversity & Inclusion Staff The Office of Civil Rights Compliance in the Division of Opportunity, Diversity, and Inclusion (ODI) is responsible for executing the enforcement and compliance activities associated with EEO/AA on construction contracts. ODI OCRC staff attend courses on EEO/AA programs and requirements, attend related workshops, and use contract documents, FHWA and State regulations and related forms to coordinate and execute their responsibilities under ODOT’s Contractor Compliance Program. Preconstruction Conferences Each ODOT District CCO ensures EEO/AA is made a part of each District Precon and that all aspects of EEO/AA, pertinent to the project, are clearly communicated and followed by all parties. During the Precon, ODOT CCOs discuss and disseminate (at least) the following EEO information:
a. A summary of prompt payment and EEO/AA requirements as outlined in the contract; b. All applicable state and federal EEO/AA posters; c. Form Federal Circular PR 1273 (for Federally funded projects); d. Contractor’s guidelines for participation in the ODOT OJT Program; e. EEO/AA Bulletin Board requirements; and f. Prompt payment and return of retainage requirements.
Bulletin Boards for all state and federally funded projects must be placed in locations easily accessible to both the employees and the public, and must include (at least) the following:
1. Contractor’s EEO/AA Policy; 2. Company EEO/AA officer’s name and phone number; 3. All federal and state EEO/AA posters; and 4. Schedule of predetermined wage rates.
Mobile operations (asphalt paving, raised pavement markers, striping, etc.) may keep the bulletin board information in the lead employee’s unlocked truck provided all of the employees are informed of the location and are given the opportunity to review the contents. The information must be easily accessible. The information should be on the outside of the lead worker’s truck cab, in a clearly marked weather proof container, provided all employees are informed of the location and given the opportunity to review the contents. To be clear, placement of the bulletin board information on the truck cab is only permitted for mobile operations. ODOT’s Precon forms and all bulletin board posters are located on ODOT’s Secure Server at: O:\ODI\CCO Resources\2019 Precon Meeting Documents. It is also attached hereto as Appendix B.
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Onsite Monitoring ODOT CCOs conduct the following specific steps when providing onsite ODOT project EEO/AA monitoring visits: 1. The CCO visits the ODOT office trailer and requests his/her name to be placed on the
construction daily diary. If there is no trailer, the CCO reports to ODOT personnel on project site.
2. The CCO verifies all bulletin board requirements are in place on the project and posted in an area readily accessible to present employees and applicants for employment.
3. The CCO confirms the EEO/AA policy of the prime contractor is posted along with the EEO/AA poster. The text of the EEO/AA policy must be as required in the special provisions of the prime contract, or one that includes equivalent wording in addition to describing other general or specific procedures to implement equal opportunity.
4. The CCO makes sure the contractor’s EEO/AA Policy is posted with all pages visible. The EEO/AA Policy must be signed by the company’s chief policy-making official and must identify the company’s EEO/AA officer and his/her contact information.
5. When applicable, the CCO verifies all employee facilities are desegregated.
6. The CCO makes sure the contractor's and/or subcontractor's supervisors have been advised of the contractor's EEO/AA commitments. Also, the CCO determines whether employees have been advised in meetings or by personal notice that EEO/AA requirements will be honored.
7. The CCO verifies the contractor has personnel on the project in an apprenticeship or on-the-job training program and (if so) confirms minority and female employees are participating in the training program.
8. The CCO confirms the contractor, or an authorized representative, periodically conducts inspections and/or reviews to ensure discriminatory working conditions and/or employment practices do not exist on the project site.
9. The CCO ensures the contractor's EEO/AA officer visits the project site and is known to ODOT project personnel.
10. If the contractor’s employees indicate any concerns related to EEO/AA, the CCO first advises them to contact the contractor’s EEO/AA officer as a first point of contact. If the employee does not get resolution, the employee should escalate the issue to the appropriate CCO.
EEO/AA Labor Compliance: Prevailing Wage Employee Interview Form
CCOs conduct monthly interviews with contractor’s employees and record responses. When applicable, CCOs include additional comments and observations. CCOs generally interview two employees in each trade classification during each visit. Each prevailing wage interview is documented using ODOT’s Labor Compliance Prevailing Wage Interview Form (Appendix C).
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Currently, each CCO must conduct a minimum of 50 interviews per year unless otherwise determined such interviews cannot be completed due to extenuating circumstances.
Onsite Reviews: Labor Compliance
CCOs generally complete labor compliance (prevailing wage) interviews as one element of the overall contractor compliance onsite review process. While CCOs generally complete labor compliance interviews as part of the contractor compliance onsite review process, labor compliance interviews can also be completed independently of the overall contractor compliance onsite review process at the CCO’s discretion. District CCOs conduct contractor compliance onsite reviews on prime contractors and subcontractors working on ODOT projects. During these reviews, the CCOs scrutinize the prime contractors’ operational practices to ensure all project employees and trades are paid at least current prevailing wage according to all applicable federal and state laws. District CCOs complete contractor compliance onsite reviews on prime contractors and subcontractors working on projects within their respective districts. The contractor compliance onsite review process includes several elements, including and beyond:
• Labor Compliance Interviews; • EEO/AA Bulletin Board Reviews; • Commercially Useful Function (CUF) Reviews; and • Apprenticeship and Trainee Reviews.
The following sections provide additional details related to the contractor compliance onsite review and labor compliance interview processes from prioritization and comparison with contractor certified payroll reports to final determinations and illustrate ODOT’s methodology for ensuring contractor compliance with federal and state prevailing wage laws.
Contractor Compliance Onsite Review Prioritization ODOT CCOs conduct contractor compliance onsite reviews on contractors currently working on ODOT projects. While CCOs complete contractor compliance onsite reviews on each project, the contractor selection for labor compliance interviews can either be random or based on a prioritization system that considers and includes:
• ODOT’s top 30 contractors based on dollar volume of work with ODOT. These contractors are
identified by ODOT’s ODI each spring based on the previous year’s work; • Projects supported by federal funding; • Reviews specifically requested by ODOT’s Office of Contracts or FHWA; • Contractors who have previously been found noncompliant with Prevailing Wage regulations, or who
routinely fail to achieve DBE goals; and • When a CCO determines additional corrective action is necessary and a follow-up review is needed.
ODOT CCOs generally do not notify contractors of forthcoming contractor compliance onsite reviews or labor compliance interviews in order to obtain real-time information related to the contractors’ construction, operational, and employment practices.
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Onsite Review The contractor compliance onsite review consists primarily of a site visit to ODOT projects. District CCOs generally conduct and record the site visits. Additional field personnel, i.e., ODOT project engineers, project managers, and additional quality oversight professionals occasionally supplement the District CCO by completing specific, ad hoc contractor compliance onsite review tasks. The duration and frequency of contractor compliance onsite reviews varies depending on several factors, including:
• The ODOT district in question; • The number of current projects in the district; • The size of the project under review; • The number of project contractors and subcontractors; • A minimum of 50 labor compliance reviews must be conducted by every CCO1; • More site visits are at the discretion of the CCO based on discovery of potential
compliance issues; and/or • The priority of the contractor compliance onsite review.
During the onsite review, the CCO also ensures current prevailing wage rates are posted according to state and federal regulations at each site on a bulletin board posted by the prime contractor. The following section describes the labor compliance interview process in greater detail.
▪ Labor Compliance Interviews During each contractor compliance onsite review, the District CCOs generally complete labor compliance interviews of employees in different prevailing wage trade classifications although it is at the discretion of the CCO and what work is currently ongoing at the site. Each Labor Compliance Interview is documented using ODOT’s Labor Compliance Interview Form (Appendix C). The Labor Compliance Interview Form is designed to capture the information needed to analyze, compare, and verify the employing contractor’s certified payroll reports and ultimately ensure project employees are being paid at least minimum prevailing wage rate per trade classification by geography. When applicable, CCOs include additional comments and observations on the completed forms. If such an interview reveals information that may potentially be cause to investigate any matters related to the employee’s rights, the employee is immediately notified the matter will be placed under investigation, it will be stated as such on the interview form and further information will be required and/or reviewed to determine compliance with the appropriate laws.
Investigation Steps • Identify “Red Flag” areas during wage interview.
1-Wages (misclassification) 1 Except as noted above. The 50-interview requirement will not negatively affect the performance of the CCO if there are extenuating circumstances that would prevent the CCO from meeting this goal.
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2-Benefits 3-Hours 4-Site of Work 5-Deductions
• If a red flag issue is found, an immediate investigation is launched. (This protects interviewee). All investigations must be loaded into SharePoint along with setting up an alert to the appropriate CCM.
• CCO researches red flag item. If the red flag issue cannot be substantiated, the issue is marked resolved on the investigation SharePoint site with an explanation and/or supporting documentation.
• CCO either resolves investigation (Low Priority) or the investigation escalates to referral to appropriate CCM (High Priority).
• Investigation is closed when resolution and restitution is complete. ODOT CCOs complete the Labor Compliance Interview Form either manually or electronically. Manually completed Labor Compliance Interview Forms are scanned and all digital forms are securely uploaded and saved to ODOT’s server in each corresponding project folder. Interview Expectations: Each CCO must complete a minimum of 50 labor compliance interviews per calendar year.2 When a District has multiple CCOs, each CCO is required to conduct a minimum of 50 Labor Compliance Interviews.
▪ Ohio Prevailing Wage Prevailing wage laws require ODOT’s contractors to pay construction workers at least the Ohio prevailing wage rate and benefits in the area for which they are working. The prevailing wages are the actual hourly wages, benefits, and overtime to be paid to workers as calculated by US DOL and the Ohio Department of Commerce for construction. To protect its construction trades workers, Ohio has had a prevailing wage law in place since 1931. ODOT prime contractors and subcontractors submit their weekly certified payrolls through ODOT’s AWP CRL. The following section details the processes involved, from contractor submission to CCO review, of the AWP CRL certified payroll processes. For the Certified Payroll Audit Procedures see Appendix R.
▪ EEO/AA Bulletin Boards During the onsite review, ODOT CCOs check the project’s EEO/AA Bulletin Boards to make sure they are in compliance with state and federal regulations with respect to placement, visibility, completeness, and accuracy of information. Any deficiencies in project EEO/AA Bulletin Boards are immediately reported to the project’s prime contractor. The contractor is provided with a specific date to correct any deficiencies. The CCO requests the contractor take a picture once the deficiencies have been corrected and email such to the CCO. If a contractor does not comply with the request, the CCO notifies the project engineer for assistance which may include holding an estimate.
2 See footnote 1 above.
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AASHTOWare Project Civil Rights and Labor AWP CRL is ODOT’s gateway to the tools used to manage ODOT contracts, certified payrolls, base percentage goals, On-The-Job (OJT) training goals, and contractor compliance. ODOT prime contractors and subcontractors submit Certified Payroll Reports to AWP CRL using Extensible Markup Language (XML) files. More information regarding AWP CRL Reports and Form Templates can be found by clicking here. See also Appendix F. AWP CRL’s Certified Payroll Report submission and review processes include multiple participants, including:
ODOT Prime Contractors
ODOT
Subcontractors
AWP CRL Itself
ODOT Contractor Compliance
Officers (CCOs)
ODOT’s AWP CRL Support
Team
For the purposes of evaluating processes related to prevailing wage compliance through Certified Payroll Report review, the following describes the roles of those processes’ participants: ODOT Prime Contractors ODOT prime contractors submit their own weekly Certified Payroll Reports to ODOT through AWP CRL. If a prime contractor experiences any errors with importing its Certified Payroll Report(s) to AWP CRL, it must make the identified corrections and resubmit its Report(s). Once properly submitted and signed, AWP CRL marks prime contractor Certified Payroll Reports as “Under Agency Review” for further CCO review. Prime contractors also review their subcontractors’ Certified Payroll Reports that AWP CRL marks for “Under Prime Review.” Prime contractors either “Approve” or “Reject” their subcontractor “Under Prime Review” Certified Payroll Reports. Prime contractor approved subcontractor Certified Payroll Reports proceed to “Under Agency Review” status for the ODOT CCO to review. Prime contractor rejected subcontractor Certified Payroll Reports are returned to subcontractors for corrections. AWP CRL marks resubmitted subcontractor Certified Payroll Reports as “Under Prime Review” for further review by the prime contractor. ODOT Subcontractors ODOT subcontractors submit Certified Payroll Reports in AWP CRL following the same submission steps (previously explained) as the prime contractor. If a subcontractor experiences any errors with importing its Certified Payroll Report(s) to AWP CRL, it must make the identified corrections and resubmit its Report(s). Once properly submitted, AWP CRL marks subcontractor Certified Payroll Reports as “Exception/Under Prime Review” for further prime contractor review. Prime contractors review subcontractors submitted Certified Payroll Reports that AWP CRL marks for “Exception/Under Prime Review.” Prime contractors either “Approve” or “Reject” their subcontractors’
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“Exception/Under Prime Review” Certified Payroll Reports. Prime contractor approved subcontractor Certified Payroll Reports proceed to “Agency [ODOT] Review” status for ODOT CCO review. Prime contractor rejected subcontractor Certified Payroll Reports are returned to subcontractors for corrections. AWP CRL automatically reviews and marks resubmitted subcontractor Certified Payroll Reports by subcontractors as “Exception/Under Prime Review” for further prime contractor review. ODOT Contractor Compliance Officers (CCOs) For Certified Payroll Reports designated in AWP CRL as “Exception/Under Agency Review”, ODOT CCOs have ultimate authority to either “Approve” or “Reject” prime contractor and subcontractor Certified Payroll Reports. Additionally, at their discretion, CCOs may also review Certified Payroll Reports that were previously automatically marked “Approved” in AWP CRL. Rejected prime contractor and subcontractor Certified Payroll Reports are returned to the prime contractors and subcontractors for corrections. CCOs review resubmitted Certified Payroll Reports as necessary. If the CCOs identify any discrepancies between the information obtained during the prevailing wage interviews or payments below minimum prevailing wage requirements, the CCOs conduct additional research to determine the cause(s) and take additional action, if necessary. ODOT’s AWP CRL Support Team ODOT provides all parties involved with the Certified Payroll Report Process access to its AWP CRL Support Team. ODOT’s AWP CRL Support Team is knowledgeable of the entire Certified Payroll Report submission and review processes and is available by phone at 614-387-5189, by email at [email protected], and (internal) instant message during regular business hours.
Certified Payroll Report Submissions Each week in which work was performed, ODOT prime contractors and subcontractors are required to submit Certified Payroll Reports to ODOT through its AWP CRL system. A Certified Payroll Report is comprised of two components: a Payroll Report and a Statement of Compliance: Payroll Report
The Payroll Report provides ODOT prime contractors and subcontractors the ability to demonstrate how employees are classified, the number of straight time and overtime hours worked by an employee in a particular labor classification, along with the hourly straight time and overtime wages paid to an employee.
Statement of Compliance The Statement of Compliance provides ODOT prime contractors and subcontractors the ability to demonstrate whether they provide fringe benefits to employees. Additionally, it requires ODOT prime contractors and subcontractors attest the information provided on both reports is truthful and accurate. The Statement of Compliance for federal projects and state projects differ, and ODOT contractors complete the appropriate form depending on the type of project. A sample Statement of Compliance Template can also be found in Appendix F.
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Both the Payroll Report and Statement of Compliance are legal documents; willful falsification of one or both of the documents may result in civil action and/or criminal prosecution.
XML Format AWP CRL accepts contractor and subcontractor Certified Payroll Reports for verifying compliance with federal and state laws and regulations. Although ODOT prime contractors and subcontractors can manually enter their data into the system, there is generally a lot of it and many firms already use software systems that contain most of what is needed for the most efficient submission format: XML. AWP CRL software can import the data from an XML file, which is generally faster than manually keying it in. XML information has a rich internal structure, so a simple list such as might be passed in CSV (comma-separated values) format is not suitable for it. Instead, data to import must be in a specific XML file format called Payroll XML. ODOT provides prime contractors and subcontractors a Payroll CML Resource Kit on its website to help them create compatible XML files.
XML Conversion
The AWP CRL XML Resource Kit helps ODOT contractors build XML files that comply with the specifications in the ‘schema’. The schema compliance is necessary in order for ODOT to be able to use the XML file. Often, there are additional requirements beyond schema compliance that an ODOT contractor’s Payroll XML file must meet in order for ODOT to use it. There are two aspects of payroll data that are not validated by the schema: encoding schemes such as work types that vary from owner agency to owner agency, and the business rules that define the required wages and fringe benefits a contractor’s employee should receive. ODOT prime contractors and subcontractors must use the encoding ODOT requires. ODOT offers its prime contractors and subcontractors resources to assist with XML and its conversion.
XML Resources
• For ODOT Contractors ODOT contractors submitted Payroll XML files to ODOT are best served by using a payroll or project management system that already supports producing valid Payroll XML files. Alternatively, they can use the spreadsheet and online conversion utility to manually enter their data into a Microsoft Excel spreadsheet and convert it from there into a valid Payroll XML. The utility can be found at: https://xml.cloverleaf.net/spreadsheet/.
• For Payroll System Developers
Developers of payroll systems who want to produce valid Payroll XML files from their payroll systems to be passed to AWP CRL software will find resources in the AASHTO XML Resource Kit, including all needed XML schemas, examples showing creation of valid files, and both online and downloadable Payroll XML validators. The AASHTO XML Resource Kit can be found at: https://xml.cloverleaf.net/resourcekit/.
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• For ODOT Contractors Using Spreadsheets The best way to produce Payroll XML files is to use a software system to manage the data that can also produce this format directly. However, not all ODOT contractors have such a system available to them. In these cases, data can be produced using an Excel spreadsheet. For ODOT contractors without an in-house payroll system, ODOT provides an Excel Template for entry of up to 50 employee payrolls. The spreadsheet/template can be downloaded from ODOT’s website here: http://www.dot.state.oh.us/Divisions/ConstructionMgt/CRL/Pages/CRLPayroll.aspx Once populated, ODOT contractors can keep payroll records by period and update the hours in the spreadsheet accordingly for subsequent pay periods.
Certified Payroll Report Reviews As previously established, AWP CRL initially reviews the submitted prime contractor and subcontractor Certified Payroll Reports for completeness, accuracy, and consistency. Specifically, AWP CRL preliminarily reviews the following Certified Payroll Report information fields:
1. Full employee name and contact information; 2. Hourly rate of pay; 3. Fringe Payments; 4. Job Classification; and 5. Deductions.
In cases where any of the information provided in a prime contractor or subcontractor Certified Payroll Report is not complete, accurate, consistent, or in compliance with state and federal wage rates, AWP CRL automatically marks the Report as an “Exception” for additional prime contractor or CCO review. CCOs may manually review “Exception/Under Agency Review” Certified Payroll Reports as well as all prime contractor approved subcontractor Certified Payroll Reports. The CCOs compare the reports with their completed monthly prevailing wage interview forms and against the current prevailing wage rates in the respective geographical location of the project site of work. Specifically, the CCOs audit one certified payroll per month for every contractor on a project as part of their prevailing wage duties to ensure the contractor is reporting payment of prevailing wages. If the contractor’s certified payroll contains issues that need addressed, a second certified payroll is audited for the same contractor and will continue auditing certified payrolls until all issues have been resolved and the certified payroll is deemed accurate. Procedures for auditing certified payrolls are described in full detail in Appendix R. If, in their reviews, the CCOs identify any discrepancies between the information obtained during prevailing wage interviews or payments below minimum prevailing wage requirements, the CCOs conduct additional research to determine the cause(s) and take additional action, if necessary.
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Custom Certified Payroll Data Reports ODOT has developed custom reports to aid CCOs in their review of contractor and subcontractor Certified Payroll Reports and to help them make contractor prevailing wage compliance determinations. These custom reports utilize the data captured and stored in AWP CRL and include:
• Audited Certified Payrolls by District Monthly Report – This report accompanies the new Audited Certified Payroll Procedures to provide the CCO every contractor that has worked in the district during a given month, so every contractor is audited, at a minimum, once per month. Following the new procedure, if a contractor is found in violation of certified payroll compliance, then a second payroll submitted by the same contractor is audited, and so forth;
• Certified Payroll Report (without employee information) – This report looks at prime contractor and subcontractor Certified Payroll Reports and permits the CCO to select the Workflow Phase to look at and then select to see those with Exceptions/No Exceptions;
• Certified Payrolls - "Under Agency Review" – This report provides a list of "Under Agency Review" prime contractor and subcontractor Certified Payroll Reports within a specified district;
• Certified Payrolls by Employee Name – This report allows CCOs to select an employee (by name) and see which Payrolls/Companies/Projects he/she has appeared on; and
• Companies with their 1st Payroll – This report shows when a company loaded its first Certified Payroll Report as a prime contractor or subcontractor and the date.
Compliance Determinations The evidence obtained and reviewed by the CCO during the contractor compliance onsite review, the prevailing wage interviews, and the Certified Payroll Report reviews constitutes the basis for an objective determination by the CCO of the contractor’s compliance or noncompliance with state and federal prevailing wage laws. If, based on the results of a CCO’s review, a contractor is determined to be noncompliant with the above processes, the contractor may be subject to payment withholding, sanctions, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. In such cases, ODOT leadership works closely with its local, city, state, and federal counterparts to ensure proper processing, depending on the scope and nature of the noncompliance. Quality Assurance Reviews: CCO Compliance Each year in the fall, ODOT performs a Quality Assurance Review (QAR) of its CCOs’ compliance in the following areas: Commercially Useful Function (CUF), prevailing wage laws, regulations, and policies, as well as other applicable labor laws, prompt payment, and return of retainage. The review is generally administered by an external ODOT consultant. The QAR’s scope includes an analysis of whether the CCO is following the processes and procedures for the above-referenced areas to identify opportunities for improvement. It also compares ODOT’s standard prevailing wage processes with sampling of field data and report information to evaluate the effectiveness
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of the current SOP. The format of the review includes meetings, interviews, documentation requests, and access to ODOT’s database. State Contractor Compliance Audit Once a year, the Ohio Auditor of State conducts an audit of ODOT’s contractor compliance performance. The format of the review includes a compliance audit covering Precon meetings, site visits, labor compliance interviews, and audited payrolls. The auditor is provided access to ODOT’s database. ODOT On-The-Job Training Program In 1970, the USDOT established an On-the-Job Training (OJT) Program for Federal-aid highway construction projects. The Federal-Aid Highway Act of 1970 requires states receiving federal construction funds to develop skill-improvement programs whose primary objective is to provide opportunities for unskilled workers, particularly minorities, women, and disadvantaged persons, to acquire training in the skilled construction trades. The contractual provision for complying with OJT is outlined in PN 029. The primary objective of the OJT Program is to offer equal opportunity for the training and upgrading of minorities, women, and disadvantaged persons toward journeyperson status in the highway construction trades and to establish a plentiful and well diverse pool of skilled workers for the highway construction industry. The OJT Program has been developed in accordance with 23 CFR 230, Appendix B to Subpart A (Training Special Provisions) and is administered by ODOT’s Division of ODI, Office of Business & Economic Opportunity, Supportive Services Section.
CONTRACTOR RESPONSIBILITIES
Input Form 29
By the 10th of each month, ODOT contractors must submit to DAS an Ohio Construction Contract Information Report Input Form 29 (I-29) including the proceeding month’s work hours.
OJT and Certified Payroll Reports
Each week, as ODOT contractors submit their required Certified Payroll Reports, ODOT’s AWP CRL system captures OJT hours based on the employment codes submitted by the contractor. Specifically, employment codes ending in “98” and “99” indicate OJT hours. With the information captured in CRL, ODOT’s CRL Manager creates monthly and annual OJT Reports on behalf of ODOT.
Apprentice Certification
All ODOT contractors must submit to the district in which the company’s home office is located their own Training Program for approval or the Apprenticeship Certificate from the Ohio State Apprenticeship Council. All ODOT OJT trainees must have the appropriate certification. It is the responsibility of the contractor to obtain Apprenticeship Certificates from the Ohio State Apprenticeship Council. The union apprenticeship agreement is not acceptable verification of an apprentice’s enrollment in a union-sponsored training program.
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Forms PR-1391 and PR-1392 Each year, ODOT contractors with contracts or subcontracts exceeding $10,000 must complete Form PR 1391 (Appendix M) except as otherwise provided for under 23 U.S.C. 117. The employment data entered must reflect the workforce on board during all or any part of the last payroll period preceding the end of the month of July during the given reporting year.
1. The CCO sends a reminder letter to all contractors with home offices in their district no later than August 1. The reminder says the report is due to the district no later than mid-August each year.
2. Reports are gathered by each district CCO for only the contractors with home offices in
their district and out-of-state contractors whom have worked within that district. 3. The CCO checks each report for accuracy and completeness and contacts the contractor
with any questions/needed corrections. 4. When completing the District 1391 report, the CCO counts only the number of contracts
and the dollar amounts of the prime contractor. Counting the subcontractor’s project numbers and dollar amounts would result in inflated figures as these totals are already covered on the prime report.
5. The CCO returns the completed District 1391 to their respective regional CCM.
6. The Administrator of OCRC designates the appropriate employee within ODI to complete the 1392 and enter that data into FHWA Civil Rights Connect. The due date for this submission fluctuates from year to year but is due in the fall, typically around October 1. An example of the 1391 and 1392 can be viewed by clicking here.
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DISADVANTAGED BUSINESS ENTERPRISE COMPLIANCE
49 CFR 26 Subpart F
Code of Federal Regulations Part 49 Section 26 (49 CFR 26) ensures nondiscrimination in the award and administration of USDOT-assisted contracts in highway, transit, and airport financial assistance programs. The overall goals of 49 CFR 26 include:
To ensure nondiscrimination in the award and administration of USDOT-assisted contracts involving highway, transit, and airport financial assistance programs;
To create a level playing field on which DBEs can compete fairly for USDOT-assisted contracts;
To ensure ODOT’s DBE program is narrowly tailored in accordance with applicable law;
To ensure only firms that fully meet the eligibility standards are permitted to participate as
DBEs;
To help remove barriers to the participation of DBEs in USDOT-assisted contracts;
To promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients.
To assist with the development of firms that can compete successfully in the marketplace
outside of the DBE program; and
To provide appropriate flexibility to recipients of federal-financial assistance in establishing and providing opportunities for DBEs.
Compliance and Enforcement 49 CFR 26 Subpart F sets forth the compliance and enforcement guidelines ODOT follows to successfully comply with federal DBE program regulations. ODOT must comply with all of 49 CFR 26 Subpart F’s requirements or it may be subject to formal enforcement action or appropriate program sanctions by the concerned operating administration, such as the suspension or termination of federal funds, or refusal to approve projects, grants, or contracts until deficiencies are remedied. ODOT is also subject to potential FHWA and FTA actions. If a firm does not meet 49 CFR 26’s eligibility criteria and attempts to participate on ODOT projects as DBE on the basis of false, fraudulent, or deceitful statements or representations or under circumstances indicating a serious lack of business integrity or honesty, ODOT may initiate a proceeding to remove the firm’s DBE certification (per 49 CFR 26 and ODOT’s DBE Certification SOP); USDOT may initiate suspension or debarment proceedings against the firm. In such a suspension or debarment proceeding, the concerned operating administration may consider the fact a purported DBE has been certified by ODOT or another Ohio UCP representative. Such certification does not preclude USDOT from determining the purported DBE, or another firm that has used or attempted to use it to meet DBE goals, should be suspended or debarred. USDOT may take enforcement action under
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49 CFR Part 31, Program Fraud and Civil Remedies, against any participant in the DBE program whose conduct is subject to such action under 49 CFR part 31. USDOT may refer any person who makes a false or fraudulent statement in connection with participation of a DBE in any USDOT-assisted program or otherwise violates applicable federal statutes to the Department of Justice for prosecution under 18 U.S.C. 1001 or other applicable provisions of law. Managing Record Requests In responding to requests for information concerning any aspect of the DBE program, ODOT complies with the provisions of the Federal Freedom of Information and Privacy Acts (5 U.S.C. 552 and 552a) and Ohio Public Records law (ORC § 149.43). ODOT may make available to the public any information concerning the DBE program if release of the information is not prohibited by federal or state law. Notwithstanding any provision of federal or Ohio state law, ODOT must not release any information that may reasonably be construed as confidential business information to any third party without the written consent of the firm that submitted the information. This includes applications for DBE certification and supporting information. However, ODOT must transmit this information to USDOT in any certification appeal proceeding under 49 CFR 26.89 or to any other state to which the firm has applied for certification as outlined in 49 CFR 26.85. Confidentiality of Information ODOT keeps the identity of complainants confidential. If such confidentiality will hinder the investigation, proceeding, or hearing, or result in a denial of appropriate administrative due process to other parties, the complainant must be advised for the purpose of waiving the privilege. Complainants are advised that, in some circumstances, failure to waive the privilege may result in the closure of the investigation or dismissal of the proceeding or hearing. Confidentiality regulations for FAA recipients are set forth in 14 CFR part 16. Cooperation All participants in USDOT’s DBE program (including, but not limited to, ODOT, DBE firms and applicants for DBE certification, complainants and appellants, and contractors using DBE firms to meet contract goals) are required to cooperate fully and promptly with USDOT and ODOT compliance reviews, certification reviews, investigations, and other requests for information. Failure to do so shall be a ground for appropriate action against the party involved (e.g., with respect to ODOT, a finding of noncompliance; with respect to DBE firms, denial of certification or removal of eligibility and/or suspension and/or debarment; with respect to a complainant or appellant, dismissal of the complaint or appeal; with respect to a contractor which uses DBE firms to meet goals, findings of non-responsibility for future contracts and/or suspension and/or debarment). Retaliation ODOT, its contractors, and other participants in USDOT’s DBE program will not intimidate, threaten, coerce, or discriminate against any individual or firm for the purpose of interfering with any right or privilege secured by 49 CFR 26 Subpart F or because the individual or firm has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing. If you violate this prohibition, you are considered to be in noncompliance.
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ODOT Policies/Processes Prompt Payment ODOT has established effective mechanisms to monitor federal prompt payment requirements for all contractors and subcontractors. See District Role v. ODI Role for DBE Final Affidavit Process, Prompt Payment Process, Return of Retainage Process effective December 1, 2020 Letting and included as Appendix S. Prime contractors must notify ODOT it has complied with prompt payment requirements set forth in Construction and Materials Specification 107.21 and PN 031 utilizing the CRL system. To report prompt payments, prime contractors utilize ODOT’s CRL system within 10 calendar days of payment from ODOT. CRL requirements with interactive training guides can be found at http://transportation.ohio.gov/crl/ under “Ohio DOT Reference Materials.” The prime contractor’s “Affirmation of Compliance” submitted through CRL includes the following information:
1. The name of the subcontractor or supplier that was paid; 2. The dollar amount of the payment to the subcontractor or supplier; and 3. The date the subcontractor/supplier was paid.
Subcontractors or suppliers affirm the payment was made in the CRL system on the date and in the amount listed in the affirmation by the prime contractor. The prime contractor includes this affirmation requirement in all subcontractor and supplier contracts it enters into and further requires all subcontractors, suppliers, and trucking firms place the same payment obligation in each of their lower-tier contracts. Prompt Payment Investigations District CCOs will review the prompt payment report every two weeks. The CCO will perform a spot check of one project (every two weeks) to confirm payments to subcontractors have been made within 30 days. If it is noted there is a potential violation, project staff will assist the CCO in gathering information regarding any dispute and make a recommendation as to whether the withholding was reasonable. The CCO will then determine if a prompt payment violation has occurred. If a prompt payment violation is found, district project personnel will assess penalties as set forth in PN 31. Repeated prompt payment violations may impact the prime’s or subcontractor’s ability to secure future work with ODOT. However, ODOT has no legal right to interfere in a contract between a prime and subcontractor when funds are being reasonably retained for a legitimate contract dispute. In the event funds are unlawfully retained by an ODOT contractor in violation of ODOT’s prompt payment procedure, the subcontractor also has the right to pursue its legal remedies. See District Role v. ODI Role for DBE Final Affidavit Process, Prompt Payment Process, Return of Retainage Process effective December 1, 2020 Letting and included as Appendix S.
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Retainage By law, ODOT does not hold retainage in its payment to contractors. With careful consideration of the three options afforded ODOT by 49 CFR Part 26.29, ODOT has chosen to pursue the second method to ensure prompt and full payment of retainage from the prime contractor to the subcontractor. Hence, the contractor may withhold retainage from its subcontractors and suppliers that are unable to provide a bond. In order to ensure if and when retainage is held by a contractor it will be paid in a timely manner to the subcontractor(s), the following process has been implemented by ODOT:
Construction and Materials Specifications (C&MS): Section 107.21 of C&MS includes language clarifying payment of retainage must be made within 30 calendar days after the work is satisfactorily completed. Satisfactorily completed is interpreted as when the subcontractor has completed all physical work and submitted any necessary documentation required by the specifications and ODOT.
Payment Monitoring – Prime Contractors ODOT utilizes an internal monitoring system to assess payment transactions between ODOT and each project’s awarded prime contractor and the duration for the prime to in turn complete payments to its subcontractors within the allowable 10 calendar days. ODOT requires prime contractors to maintain records and documents of payments to DBEs for three years following the performance of the contract. These records are made available for inspection upon request by any authorized representative of ODOT or USDOT. This reporting requirement also extends to any certified DBE subcontractor. ODOT performs interim audits of contract payments to DBEs utilizing Interim and Final DBE Payment Affidavits (explained further below). The audit reviews payments to DBE subcontractors to ensure the actual amount paid to DBE subcontractors equals or exceeds the dollar amounts stated in the DBE Utilization Plan. Project Close Out Effective November 1, 20203, prior to a project being closed out, ODOT’s Goal Attainment Coordinator will ensure the prime contractor has met the DBE goal. In order to make this determination, the prime contractor must report all subcontractor payments, including suppliers and trucking firms, as well as non-DBE-certified payees that use second-tier DBE-certified subcontractors, suppliers, and trucking firms in CRL. The Goal Attainment Coordinator will compare the original DBE commitment to the final goal attainment and resolve any discrepancies. In order to ensure payments are timely reported, including final payments and discrepancies resolved, ODOT has developed a process outlined in its District Role v. ODI Role for DBE Final Affidavit Process, Prompt Payment Process, Return of Retainage process. See District Role v. ODI Role for DBE Final Affidavit Process, Prompt Payment Process, Return of Retainage Process effective December 1, 2020 Letting included as Appendix S. The payee is required to verify the payment in CRL.
3 Projects let prior to November 1, 2020 must follow the requirements contained in the contract.
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Payment Violations If, based on the results of any DBE contractor compliance, prompt payment, or DBE payment monitoring investigation, a contractor is determined to be noncompliant with the above processes, the contractor may be subject to sanctions, payment withholding, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. Possible sanctions are included in the District Role v. ODI Role for DBE Final Affidavit Process, Prompt Payment Process, Return of Retainage Process as well as PN 31. In such cases, ODOT leadership works closely with its local, city, state, and federal counterparts to ensure proper processing, depending on the scope and nature of the noncompliance.
DBE Terminations / Reductions / Replacements
ODOT requires its prime contractors not terminate or reduce DBE subcontractors listed in response to 49 CFR 26 Subpart C’s requirements (or an approved substitute DBE firm) without ODOT’s written consent. This includes, but is not limited to, instances in which a prime contractor seeks to perform work originally designated for a DBE subcontractor with its own forces or those of an affiliate, a non-DBE firm, or with another DBE firm. ODOT includes in each prime contract a provision stating:
a. The contractor shall utilize the specific DBEs listed to perform the work and supply the materials for
which each is listed unless the contractor obtains ODOT’s written consent; and
b. Unless ODOT’s consent is provided, the contractor shall not be entitled to any payment for work or material unless it is performed or supplied by the listed DBE.
ODOT provides such written consent only if it agrees the prime contractor has good cause to terminate, reduce, or replace the DBE firm. Good cause includes the following circumstances:
i. The listed DBE subcontractor fails or refuses to execute a written contract;
ii. The listed DBE subcontractor fails or refuses to perform the work of its subcontract in a way consistent with normal industry standards. Provided, however, good cause does not exist if the failure or refusal of the DBE subcontractor to perform its work on the subcontract results from bad faith or discriminatory action of the prime contractor;
iii. The listed DBE subcontractor fails or refuses to meet the prime contractor's reasonable,
nondiscriminatory bond requirements;
iv. The listed DBE subcontractor becomes bankrupt, insolvent, or exhibits credit unworthiness;
v. The listed DBE subcontractor is ineligible to work on public works projects because of suspension and debarment proceedings pursuant to 2 CFR Parts 180, 215, and 1,200 or applicable Ohio state law;
vi. ODOT has determined the listed DBE subcontractor is not a responsible contractor;
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vii. The listed DBE subcontractor voluntarily withdraws from the project and provides ODOT a written notice of its withdrawal;
viii. The listed DBE is ineligible to receive DBE credit for the type of work required;
ix. A DBE owner dies or becomes disabled with the result the listed DBE contractor is unable to
complete its work on the contract;
x. Other documented good cause that ODOT determines compels the termination of the DBE subcontractor. Provided, that good cause does not exist if the prime contractor seeks to terminate a DBE it relied upon to obtain the contract so the prime contractor can self-perform the work for which the DBE contractor was engaged or so the prime contractor can substitute another DBE or non-DBE contractor after contract award.
Prime contractors seeking to terminate, reduce, and/or substitute a DBE must complete a Request to Terminate/Reduce/Replace DBE Form. Before transmitting to ODOT its Request to Terminate/Reduce/Replace DBE Form, the prime contractor must provide it to the DBE subcontractor, with a copy to ODOT, of its intent to request to terminate, reduce, and/or substitute, and the reason for the request.
The prime contractor must give the DBE five days to respond to the prime contractor's notice and to advise ODOT and the contractor of the reasons why, if any, it objects to the proposed termination/reduction of its subcontract and why ODOT should not approve the prime contractor's request. If required in a particular case as a matter of public necessity (e.g., safety), ODOT may provide a response period shorter than five days. In addition to post-award terminations, the provisions of 49 CFR 26 Subpart C apply to pre-award deletions of or substitutions for DBE firms put forward by offerors in negotiated procurements. When a DBE subcontractor is terminated or reduced as provided in 49 CFR 26 Subpart C, or if it fails to complete its work on the contract for any reason, ODOT requires the prime contractor to make GFE to find another DBE subcontractor to substitute for the original DBE. These GFE shall be directed at finding another DBE to perform at least the same amount of work under the contract as the DBE that was terminated, to the extent needed to meet the DBE contract goal ODOT established for the project. GFE must be documented by the contractor. If ODOT requests documentation under this provision, the contractor shall submit the documentation within seven days, which may be extended for an additional seven days if necessary at the request of the contractor, and ODOT will provide a written determination to the contractor stating whether or not GFE have been demonstrated. ODOT includes in each prime contract the contract clause required by 49 CFR 26.13(b) stating that failure by the contractor to carry out the requirements is a material breach of the contract and may result in the termination of the contract or such other remedies ODOT deems appropriate if the prime contractor fails to comply with the requirements of 49 CFR 26 Subpart C. ODOT applies the requirements of 49 CFR 26 Subpart C to DBE bidders/offerors for prime contracts. In determining whether a DBE bidder/offeror for a prime contract has met a contract goal, you count the work
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the DBE has committed to performing with its own forces as well as the work it has committed to be performed by DBE subcontractors and DBE suppliers. ODOT requires the contractor awarded the contract to make available, upon request, a copy of all DBE subcontracts. The subcontractor shall ensure all subcontracts or an agreement with DBEs to supply labor or materials require the subcontractor and all lower-tier subcontractors be performed in accordance with 49 CFR 26 Subpart C. DBE Termination/Replacement Violations If, based on the results of any DBE contractor compliance investigation, a contractor is determined to be noncompliant with the above procedures, the contractor may be subject to sanctions, payment withholding, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. In such cases, ODOT leadership works closely with its local, city, state, and federal counterparts to ensure proper processing, depending on the scope and nature of the noncompliance.
Commercially Useful Function (CUF)
Overview A DBE performs CUF when it is responsible for the execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. To perform CUF, the DBE must also be responsible, with respect to materials and supplies used on the contract, for:
Negotiating price; Determining quality and quantity; Ordering the material and installing (where applicable); and Paying for the material itself.
To determine whether a DBE is performing CUF, ODOT evaluates the following:
The amount of work subcontracted; Standard industry practices; Whether the amount the firm is to be paid under the contract is commensurate with the work it is
actually performing; and The DBE credit claimed for its performance of the work and other relevant factors.
A DBE does not perform CUF if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation. In determining whether a DBE is an extra participant, ODOT examines similar transactions, particularly those in which DBEs do not participate. If a DBE does not perform or exercise responsibility for the total cost of its contract with its own work force, or the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, ODOT presumes it is not performing CUF.
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When a DBE is presumed not to be performing CUF, the DBE may present evidence to rebut this presumption. ODOT’s decisions on CUF-related matters are subject to review by FHWA but are not administratively appealable to USDOT. Monitoring In keeping with ODOT’s standard contract requirements, ODOT holds its contractors responsible for ensuring DBE subcontractors perform CUF on ODOT contracts. ODOT, as the contracting agency, has oversight responsibility to ensure its contractors have effectively met this responsibility under their ODOT contracts. ODOT employs adequate field personnel and Central Office staff to monitor the performance of work
performed by DBEs on all federally-funded projects, including those of subrecipients (i.e., local governments). ODOT contractors, DBEs, LPAs, and all employees are required to cooperate in carrying out this responsibility. ODOT has established and enforces monitoring procedures that include:
Clearly defined roles of ODOT’s various Office of Civil Rights Compliance staff responsible for
monitoring and evaluating the contractor’s compliance with the DBE contract provisions;
Standard operating procedures that identify the specific monitoring activities and responsibilities of ODOT’s project-level monitoring program;
Exchange of information among OCRC, OBEO, and district construction field staff in reporting accomplishments, violations, and enforcement; and
Standard operating procedures for the application of appropriate sanctions once a determination of failure to meet the DBE contract requirements is made.
Requiring mandatory annual CUF training via ODOTLearn. All CUF trainings will be reviewed on an annual basis in November/ December to ensure all program updates are included in the training. The training is available starting in January of each calendar year. This is outlined in ODOT’s comprehensive CUF procedures.
The following section of this Contractor Compliance Standard Operating Procedures (SOP) manual details these processes related to CUF monitoring and enforcement. CUF Reviews Ohio-certified DBEs typically participate on ODOT contracts in three (3) categories:
1. Prime and Subcontractors 2. Materials and Supplies Vendors (MSVs)
a. Brokers b. Regular Dealers c. Manufacturers
3. Trucking Firms
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ODOT CUF reviews are completed on DBE primes and subcontractors and DBE Trucking firms at least once on each project, unless otherwise directed, on ODOT projects using ODOT’s standard CUF review form. The CUF review questionnaires are completed manually or in GoFormz on the project site by ODOT Construction staff and transmitted and saved to ODOT’s SharePoint EEO DBE folder in the corresponding project file. The CUF review questionnaires are designed to identify any potential red flags that may warrant further investigation or that clearly indicate a DBE is not performing CUF. Once a project is completed, ODOT CCOs create a final CUF Report for each DBE prime and subcontractor and DBE trucker on the project. The reports are also saved in the corresponding project file for ease of accessibility and review by ODOT’s CCMs and other members of ODOT’s senior leadership. ODOT developed a CUF checklist for DBE MSVs. For DBE MSVs on a project, the CCO must conduct a desk review to determine CUF. ODOT developed a plan to monitor and enforce CUF for trucking firms. The process and forms utilized as part of this monitoring and enforcement is included in ODOT’s comprehensive CUF procedures. The following is an overview of CUF for each DBE category, standard CUF questions, and a list of supplementary documents for assisting in the evaluation of CUF. Prime Contractors and Subcontractors While DBEs are occasionally awarded ODOT prime contracts, DBEs primarily work as subcontractors for ODOT prime contractors. Subcontractors generally perform specific contract items and provide their own labor and materials. To determine whether a DBE subcontractor is performing CUF, ODOT considers the DBE’s unique operations:
1. Management
The DBE must manage the work that has been contracted to it on an ODOT project. Management includes (and goes beyond): Scheduling work operations; Ordering equipment and materials; Preparing and submitting certified payrolls; and/or Hiring and firing employees.
The DBE owner must supervise daily operations, either personally or with a full- time, skilled and knowledgeable superintendent employed by and paid wages by the DBE firm. The superintendent must be present on the job site and under the DBE owner’s direct supervision. The DBE owner must make all operational and managerial decisions for the firm. Mere performance of administrative duties is not considered supervision of daily operations.
Red Flags Red flags are questionable practices which may warrant further review. The red flags for DBE prime and subcontractor management operations often include: The DBE owner or superintendent provide little or no supervision of the work;
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The DBE’s superintendent is not a regular employee of the firm or supervision is performed by personnel associated with the prime contractor or another business;
Key staff and personnel are not under the control of the DBE; The DBE’s owner is not aware of the status of the work or the performance of the
business; and/or Inquiries by ODOT representatives are answered by the prime contractor.
CUF questions in evaluating a DBE prime or subcontractor’s management include: What is the DBE’s specific scope of work based on its executed subcontract with the
ODOT prime contractor? Who does the onsite DBE representative(s) report to? Has this individual ever shown up on any other contractor’s payroll? Has the DBE owner been present on the jobsite?
Additional documentation to assist in evaluating CUF of a DBE prime or subcontractor’s management include: Executed subcontract(s) and change orders with the prime contractor; Daily inspection reports and project diaries; Project prime and subcontractor certified payrolls; and/or Professional resumes from the DBE firm’s certification file.
ODOT evaluates these and other areas to make a CUF determination and to identify situations that warrant further review and investigation of DBE prime and subcontractor management on a case-by-case basis.
2. Workforce
In order to be considered an independent business, a DBE must employ a regular workforce. DBEs cannot "share" employees with non-DBE contractors, particularly the prime contractor. The DBE shall perform its work with employees normally employed by and under the DBE’s control. All work must be performed with a workforce the DBE controls, with a minimum of 30% of the work to be performed by the DBE’s regular employees, or those hired by the DBE for the project from a source such as a labor union. The DBE, in all instances, must have direct supervision over all of its employees. The DBE must also be responsible for payroll and labor compliance requirements for all employees performing on the contract and is expected to prepare and finance the payrolls. Direct or indirect payments by any other contractor are not allowed. The DBE must not subcontract a greater portion of the work than would be expected on the basis of normal industry practice for the type of work involved.
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Red Flags Red flags are questionable practices which may warrant further review. The red flags for DBE prime and subcontractor workforce operations often include: Supervision of DBE employees by another contractor; Actual work is performed by personnel normally employed by the prime contractor or
another business; and/or Employees are paid by the DBE and the prime contractor.
CUF questions in evaluating a DBE prime’s or subcontractor’s workforce include: Who prepares the DBE’s certified payroll? Have any of the DBE’s employees ever shown up on any other contractor’s payroll? Who does the DBE onsite representative contact for hiring, firing, or to modify the
contract due to site condition changes or change orders? Asking DBE employees on the jobsite who they report to and who signs their checks.
Additional documentation to assist in evaluating CUF of a DBE prime’s or subcontractor’s workforce include: Executed subcontract(s) and change orders with the prime contractor; Daily inspection reports and project diaries; Project prime and subcontractor certified payrolls; Copies of cancelled checks; and/or Notarized and executed DBE Payment Affidavits.
3. Equipment
Aside from its standard equipment inventory, a DBE prime or subcontractor may purchase or lease project-specific specialized equipment from an equipment selling or leasing company or contractor other than the ODOT prime contractor on a project, provided it is long-term, consistent with standard industry practice, and is at rates competitive for the area. The lease(s) must specify the terms of the agreement and must involve a specialized piece of equipment to be used at the particular ODOT jobsite. The lease may include an operator for the equipment who remains on the lessor's payroll if this is a generally acceptable practice within the industry. The operation of the equipment must be subject to the full control of the DBE. The DBE is expected to provide the operator for non-specialized equipment and is responsible for all payroll and labor compliance requirements. All special lease agreements must be approved by ODOT prior to the DBE starting the work.
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Red Flags Red flags are questionable practices which may warrant further review. The red flags for DBE prime’s and subcontractor’s equipment often include: Equipment leased and used by the DBE firm with payment deducted from the prime
contractor's payment(s) to the DBE; Equipment used by the DBE belongs to the prime contractor or another contractor with no
formal lease agreement; The equipment signs and markings cover another owner's identity, usually through the use
of magnetic signs; and/or A DBE trucking business uses trucks owned by the prime contractor.
CUF questions in evaluating a DBE prime’s or subcontractor’s equipment include:
List the major equipment used by the DBE. Determine if the equipment belongs to the
DBE and if it is owned or leased; If the equipment is leased, is there an agreement identifying the terms and parties? Is it
signed by the DBE owner? Does the equipment have the DBE’s logo and emblems? Is the equipment under the direct supervision of the DBE? Is the operator of the equipment the DBE’s employee? If the equipment is leased, is the payment for the equipment deducted from the work
performed? Additional documentation to assist in evaluating CUF of a DBE prime’s or subcontractor’s equipment include: Executed subcontract(s) and change orders with the prime contractor; Daily inspection reports and project diaries; Equipment and vehicle titles; and/or Equipment and vehicle purchase order(s) and/or lease agreements (short and long term).
4. Materials
For a DBE prime or subcontractor to “furnish and install” materials and to receive credit for supplying said materials, the DBE must perform the following four functions:
a. Negotiate price; b. Determine quality and quantity; c. Order the materials; and/or d. Pay for the material itself.
If the DBE prime or subcontractor does not perform all of these functions, it has not performed CUF with respect to obtaining the materials, and the cost of the materials may not be counted toward the DBE goal. Invoices for the material should show the payor as the DBE.
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Red Flags
Red flags are questionable practices which may warrant further review. The red flags for DBE prime’s and subcontractor’s materials often include: Materials for the DBE are ordered, or paid for, by the prime contractor; Two-party checks or joint checks are sent by the prime to the supplier or manufacturer
(as opposed to being sent by the DBE); Materials or supplies necessary for the DBE’s performance are delivered to, billed to, or
paid by another business; Materials are delivered to the jobsite by a party separate from the DBE; Payment for materials is deducted by the prime contractor from payments to the DBE for
work performed; and/or A DBE prime contractor only purchases materials while performing little or no work.
CUF questions in evaluating a DBE prime’s or subcontractor’s materials include: What is the DBE’s specific scope of work based on its executed subcontract with the
ODOT prime contractor? Does the work to be performed by the DBE include language related to “furnish and
install” of any item(s)? Who makes arrangements for delivery of materials? Who are the material invoices made out to? Who scheduled delivery of materials? In whose name are materials shipped? Who actually delivered the materials? If two-party checks are used, who are the parties identified as payable to?
Additional documentation to assist in evaluating CUF of a DBE prime’s or subcontractor’s materials include: Executed subcontract(s) and change orders with the prime contractor; Materials delivery receipts; Materials supplier invoices; and/or Daily inspection reports and project diaries.
5. Performance
A DBE prime and subcontractor must be responsible for the performance, management, and supervision of all elements of its contracted scope of work in accordance with standard industry practice.
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Red Flags Red flags are questionable practices which may warrant further review. The red flags for DBE prime’s and subcontractor’s performance often include: Work is being done jointly by the DBE and another contractor; The work to be performed by the DBE is outside of the DBE's known experience or
capability; Any portion of the work designated to be performed by a DBE subcontractor is performed
by the prime contractor or any other firm; The DBE is working without a subcontract approved by ODOT; A DBE prime contractor subcontracts more than 50% of the contract value; The agreement between the prime contractor and DBE artificially inflates the DBE
participation; An agreement that erodes the ownership, control, or independence of the DBE
subcontractor; A DBE typically works for only one prime contractor or a large portion of the firm’s
contracts are with one contractor; and/or The volume of work is beyond the capacity of the DBE.
CUF questions in evaluating a DBE prime’s or subcontractor’s performance include: Does the DBE onsite representative effectively manage the jobsite without any
interference from the prime contractor? Does the DBE appear to have control over methods of work on its contract items? Is the DBE scheduling work activities, material deliveries, and other related actions
required for execution of the work? Has any other contractor performed any amount of work specified in the DBE’s contract?
Additional documentation to assist in evaluating CUF of a DBE prime’s or subcontractor’s performance include:
Executed subcontract(s) and change orders with the prime contractor; Daily inspection reports and project diaries; and/or Prior completed CUF reviews for comparison.
Materials & Supplies Vendors (MSVs)
Regular Dealers As previously established, a regular dealer is a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles, or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and regularly sold or leased to the public in the usual course of business.
In order for a firm to operate as a regular dealer, it must perform CUF and must also comply with other requirements applicable to regular dealers. It must be an established, regular business
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that engages, as its principal business and under its own name, in the purchase and sale or lease of the products in question.
It is important to make a distinction between a regular dealer and a firm that supplies a product on an ad hoc basis in relation to a particular contract or contractor. A regular dealer has a regular trade with a variety of customers. One of the key considerations of being a regular, established dealer is the presence of an inventory of materials and/or supplies. A regular dealer assumes the actual and contractual responsibility for the provision of the material and/or supplies. A firm may be a regular dealer in bulk items such as petroleum products, steel, cement, gravel, stone, or asphalt without owning, operating, or maintaining a place of business if the firm both owns and operates distribution equipment for the products. 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.
• Regular Dealer or Broker (or Both)
Every item a DBE firm supplies does not need to be physically present in the firm’s store, warehouse, etc. before it is sold to a contractor. However, the establishment in which the firm keeps items it sells to the general public should be more than a token location.
For example, a mere showroom, the existence of a hard copy or online catalog, or the presence of small amounts of material that make questionable the ability of the firm to effectively supply quantities typically needed on a contract, are generally not sufficient to demonstrate a firm regularly deals in the items. Is the role the firm plays on the specific contract in question consistent with the regular sale or lease of the products in question, as distinct from a role better understood as that of a broker, packager, manufacturer’s representative, or other person who arranges or expedites a transaction? For example, a firm that regularly stocks and sells Product X may, on a particular contract, simply communicate a prime contractor’s order for Product Y to the manufacturer, acting in a transaction expediter capacity. This means a firm that acts as a regular dealer on one contract does not necessarily act as a regular dealer on other contracts. For example, a firm that acts as a regular dealer on Contract #1 may act simply as a “transaction expediter” or “broker” on Contract #2. It would receive DBE credit for 60 percent of the value of the goods supplied on Contract #1 while only receiving DBE credit for its fee or commission on Contract #2.
• Drop Shipping
In some circumstances, items are “drop-shipped” directly from a manufacturer’s facility to a jobsite, never being in the physical possession of or transported by a supplier. In many such cases, the supplier’s role may involve nothing more than
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contacting the manufacturer and placing a job-specific order for an item the manufacturer then causes to be transported to the jobsite. In such a situation, ODOT considers the supplier’s role as that of a “broker” or “transaction expediter” (see 49 CFR § 26.55(e)(2)(ii)(C)), not as a “regular dealer.” In such a case, DBE credit is limited to the fee or commission the firm receives for its services. If ODOT determines the firm does not provide CUF (i.e., it is simply inserted as an extra participant in a transaction), then no DBE credit is counted. CUF questions in evaluating whether a DBE MSV is a Regular Dealer include: Does the dealer have an established storage facility and inventory? Does the dealer have a business that sells to the public on a routine basis in
the product being supplied? Does the business stock the product for use on the project as a normal stock
item? Who is delivering and unloading the material? Is distribution equipment owned or leased, long term by the DBE, used in
delivering the product? For bulk items, where does the material come from? Does the DBE have a
distribution agreement?
Additional documentation to assist in evaluating CUF of a DBE MSV Regular Dealer includes:
Purchase orders; Invoices showing ‘shipping from’ and ‘shipping to’ destinations; and/or Project delivery tickets.
Manufacturers
As previously established, a manufacturer is a firm that operates or maintains a factory or establishment that produces, on the premises, the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications. Examples of such items could be a concrete ready-mix plant, a crushing operation, or a steel or concrete fabricating plant.
CUF questions in evaluating whether a DBE MSV is a manufacturer include:
Is the business’ primary function to manufacturer construction products? Does the business stock the product altered for this project as a normal stock item? Is the quality of the materials controlled by the DBE? Does the DBE purchase the raw material used in its plant?
Additional documentation to assist in evaluating CUF of a DBE MSV Manufacturer includes: Purchase orders;
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Evidence of purchase of raw materials; Bills of lading; and/or Shipping tickets.
Brokers
Packagers, brokers, manufacturers' representatives, or other persons who arrange or expedite transactions are not considered regular dealers. With respect to materials or supplies purchased from a DBE which is neither a manufacturer nor a regular dealer, ODOT considers the firm as a transaction broker and counts the entire amount of fees or commissions charged for assistance in the procurement of the materials and supplies, or fees or transportation charges for the delivery of materials or supplies required on a job site, toward its DBE goals, provided ODOT determines the fees to be reasonable and not excessive as compared with fees customarily allowed for similar services. In such cases, ODOT does not count any portion of the cost of the materials and supplies themselves toward DBE goals. ODOT determines the amount of credit awarded to a firm for the provisions of materials and supplies (e.g., whether a firm is acting as a regular dealer or a transaction expediter) on a contract-by-contract basis.
Trucking Firms ODOT evaluates the following factors in determining whether a DBE trucking firm is performing CUF:
1. The DBE must be responsible for the management and supervision of the entire trucking operation
for which it is responsible on a particular contract, and there cannot be a contrived arrangement for the purpose of meeting DBE goals.
2. The DBE must itself own and operate at least one fully licensed, insured, and operational truck used
on the contract.
3. The DBE receives credit for the total value of the transportation services it provides on the contract using trucks it owns, insures, and operates using drivers it employs.
4. The DBE may subcontract trucks from another DBE firm, including an owner-operator who is certified as a DBE. The DBE who subcontracts trucks from another DBE receives credit for the total value of the transportation services provided by the subcontracted DBE.
5. Additional participation by non-DBE owned trucks equipped with drivers receives credit only for the fee or commission it receives as a result of the subcontract agreement. If a DBE chooses this approach, it must obtain written consent from ODOT.
6. The DBE may lease trucks without drivers from a non-DBE truck leasing company. If the DBE leases trucks from a non-DBE truck leasing company and uses its own employees as drivers, it is entitled to credit for the total value of these hauling services.
7. A lease must indicate the DBE has exclusive use of and control over the truck. This does not preclude the leased truck from working for others during the term of the lease with the consent of the DBE,
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so long as the lease gives the DBE absolute priority for use of the leased truck. Leased trucks must display the name and identification number of the DBE.
In order for ODOT to monitor the performance of a DBE trucking firm, the work to be performed must be covered by a subcontract approved by ODOT prior to performing the work. Additional documentation required when the DBE leases equipment is a valid lease to be provided to ODOT for review. To be considered valid, the lease must include such items as the lessor’s name, list of trucks to be leased by vehicle identification number (VIN), and the agreed upon amount of the cost and method of payment. The DBE is responsible for providing the operator’s fuel, maintenance, and insurance for all leased trucks. CUF questions in evaluating a DBE trucker include: Do the trucks used on the project belong to the DBE? If leased, is there a formal lease identifying the terms and parties? Are the rates appropriate? Is there an approved, executed subcontract?
If so, who are the parties? Are the DBE’s employees shown on the certified payrolls? Is the DBE trucker hiring any independent contractor (1099) truckers or drivers? Is the DBE trucker’s logo emblazoned on its vehicles? Where does the DBE store its vehicles when they are not on jobsite?
Additional documentation to assist in evaluating CUF of a DBE trucker include:
Executed subcontract(s) and change orders with the prime contractor; Daily inspection reports and project diaries; Prior completed CUF reviews for comparison; The trucking firm’s daily reports; and/or The trucking firm’s hauling tickets.
CUF Reports ODOT has developed a CUF DBE Monitoring Report that is utilized by its District CCOs to document and certify ODOT’s efforts to assess the DBE subcontractors are performing CUF. ODOT developed a CUF Form for District Construction staff to complete and submit to the District CCOs. The frequency in DBE monitoring and delineating parameters and timeframes for compliance monitoring are also indicated in these DBE CUF monitoring procedures. CUF Violations When a DBE firm contracted or subcontracted on an ODOT project is found to be not performing a CUF, ODOT CCOs take several steps to:
1. Ensure the amount of work, responsibilities, and equipment not performed, controlled, or
owned/leased by the DBE is not counted toward the corresponding project’s DBE goal;
2. Conduct additional investigation, if necessary, to determine the reasoning behind the non-performance and to identify any potential fraud and/or legal violations; and
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3. If potential fraudulent or legal violations are identified, take appropriate action. Appropriate action could include sanctions.
Specifically, when a DBE is found to not be performing a CUF, the CCO captures the relevant information in the CUF review form and takes additional notes and photographs, when appropriate. The completed CUF review form and other evidence are then saved to ODOT’s server in the corresponding project’s folder. The CCO then forwards the completed CUF review form to ODOT’s Goal Attainment Coordinator for review and comparison with the firm’s contract/subcontract/purchase order amount(s) for calculation in the project’s final DBE goal attainment amount. Depending on the scope and nature of the non-performance, ODOT CCOs perform additional investigation to ascertain the reasoning behind it. Any identified potential fraudulent or additional legal violations are documented in the CUF review’s supporting documentation and are communicated with the applicable CCM, the Administrator of OCRC, and the Administrator of OBEO. After review of the information provided, it is then determined if any additional information is needed and if further investigation is warranted. If, based on the results of any supplemental DBE certification or contractor compliance investigations, either the project’s prime contractor and/or the non-performing DBE firm are determined to be engaged in any fraudulent activity, the firm(s) may be subject to sanctions, payment withholding, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. In such cases, ODOT leadership works closely with its local, city, state, and federal counterparts to ensure proper processing, depending on the scope and nature of the potential fraud identified. Sanctions for Compliance and Enforcement ODOT contractors are responsible for ensuring subcontracted DBEs perform CUF. Failure of a DBE to perform CUF results in ODOT taking specific actions to enforce the CUF requirement of the contract. Some of the actions ODOT may take include, but are not limited to, the following:
Deny or limit DBE credit toward the contract goal; Require the prime contractor to make GFE to replace the DBE to meet the goal on remaining work; Withhold progress payments; Terminate the contract; and/or Reduce the contractor’s prequalification limit.
Some questions ODOT considers in determining said actions:
If CUF was not performed by the DBE, what action was taken to correct the deficiency? Did the action taken correct the deficiency?
In evaluating the scope of a CUF compliance violation, ODOT reviews documentation related to the following: The DBE’s executed contract/subcontract, purchase order, and/or invoices; Equipment titles of ownership; Equipment lease/rental agreements; Hauling tickets; Delivery tickets; Canceled checks;
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Project inspection/diaries; and/or Payroll records.
When a DBE is presumed to not be performing a CUF, the DBE may present evidence to rebut ODOT’s presumption. Decisions regarding CUF determinations are subject to review by FHWA. However, CUF decisions are not appealable to USDOT; they are contract administration issues. Monthly Monitoring: CCO Compliance ODOT developed a tracking process to ensure CCOs are performing CUF and other DBE monitoring for both goal and non-goal DBE firms. Specifically, ODOT developed a CCO Monthly Activity Report which allows the Contractor Compliance Managers to ensure the CCOs are performing CUF and other DBE monitoring for both goal and non-goal DBE firms.
CUF and DBE Certification DBE certification and CUF are separate and distinct issues. Certification decisions address the nature of a firm's ownership and structure while CUF primarily concerns the role a firm has played in a particular transaction. Even if the certification process has identified the DBE’s ability to perform as a contractor, regular dealer, or manufacturer, it is important to review and determine what and how a DBE actually performs during the performance of the contract. A DBE's repeated failure to perform CUF may raise questions regarding the firm's control, as it relates to independence and perhaps ownership. If there is evidence of a pattern of failing to perform CUF that raises serious issues with the firm’s ability to control the work and its independence from the non-DBE firm, ODOT addresses the matter. Based on its determination, ODOT may commence a proceeding under 49 CFR § 26.87 to determine the continued eligibility of the DBE firm. In cases of deliberate attempts to circumvent the intent of the DBE program or fraud, these actions may lead to criminal prosecution of both the prime contractor and the DBE. If fraud is suspected, ODOT contacts the USDOT Office of Inspector General and all other related counterparts. Joint Check Policy
Based on guidance from FHWA, ODOT permits the use of joint checks between a DBE subcontractor, a prime contractor, and an MSV on a case-by-case basis on Federal-aid highway projects.
Guidelines As cited in 49 CFR § 26.55(c)(1), in order to receive DBE credit, the DBE firm must be responsible for "negotiating price, determining quality and quantity, ordering the materials, and installing (where applicable) and paying for the material itself." When joint checks are used, the question is raised as to whether the transaction being carried out complies with regulatory requirements because of the involvement of another party other than the DBE in the issuance of the check for payment to the supplier. In light of these concerns, the following conditions must be met in order for the transaction to be approved by ODOT:
1. The second party (i.e., the prime contractor) acts solely as a guarantor;
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2. The DBE firm must release the check to the supplier;
3. The use of joint checks is standard industry practice for the related industry;
4. ODOT pre-approves the practice before it is used; and
5. ODOT monitors and records its use by saving copies of all relevant documentation to ODOT’s server
in the corresponding project file;
Additionally, ODOT considers the following, general circumstances in its review of a potential joint check scenario:
6. The transaction must be short term and not to exceed a reasonable timeframe (i.e., one year) to
allow the establishment/increase of a credit line with the material supplier;
7. The DBE must be able to conduct business independently of the prime contractor – a dependent relationship may compromise the DBE firm’s independence;
8. Transaction must be proportionate with the DBE's proven capacity to the size of contract and quantity of material to be provided under the contract;
9. DBE is responsible for negotiating price, furnishing, and installing the supplied material;
10. DBE must be determined as providing CUF prior to and during its releasing of the check to the material supplier;
11. The DBE must submit a request to ODOT for the use of a joint check;
12. The DBE must remain responsible for all other elements of 49 CFR § 26.55(c)(1);
13. The DBE must possess final decision-making authority of the transaction;
14. The DBE is free to utilize any supplier it so chooses and is not required to utilize the prime contractor’s supplier; and
15. The DBE is not bound to the prime contractor’s negotiated price with any given supplier.
Monitoring ODOT utilizes a joint check monitoring process in compliance with 49 CFR 26. Specifically, after the joint check has been pre-approved by ODOT and executed by the approved parties, ODOT reviews a copy of the cancelled check(s) to ensure its consistency with the agreed upon terms. Listed below are additional criteria that will be considered in approving the use of joint checks. If, based on the results of its joint check monitoring, any of the parties involved in the joint check procedure are determined to be in noncompliance with the terms of the approval or any state or federal
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law, the firm(s) may be subject to sanctions, payment withholding, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. In such cases, ODOT leadership works closely with its local, city, state, and federal counterparts to ensure proper processing, depending on the scope and nature of the potential fraud identified.
Trucking Guidelines
ODOT has issued Trucking Guidelines. Guidance is provided regarding site of work, what constitutes an owner/operator, exemptions, calculation of the 20% rules, and the difference between an employee and an independent contractor.
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LOCAL-LET PROJECTS
As permitted by FHWA, ODOT may allow a Local Public Agency (LPA) to perform work on a Federal-aid project if certain FHWA-established conditions and ODOT-established conditions are met.
The contract administration and management on the LPA construction project is the responsibility of the LPA staff member “in responsible charge” and his/her Construction Project Engineer (CPE).
Once the project has been approved by ODOT as “Local Let,” ODOT personnel perform oversight duties to ensure compliance with all federal requirements. The roles and responsibilities are outlined in LPA Contract Administration Manual.
ODOT District CCO Responsibilities 1. Review DBE subcontractor sub-agreements and/or executed purchase orders to determine the
subcontractor’s ability to perform work on the LPA construction project. 2. Attend LPA Pre-Award and/or LPA Pre-Construction Meetings, when possible 3. Provide training and guidance, if needed, on Federal and State contract provisions for EEO,
Prevailing Wage, Prompt Payment, DBE, and EDGE requirements. 4. Provide technical assistance/assist with developing a plan of action when a potential LPA or
contractor is believed to be out of compliance.
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INVESTIGATIONS
ODOT contractor compliance investigations are generally initiated in response to information obtained during ODOT contractor compliance onsite reviews, including prompt payment oversight, payments made to employees, CUF reviews, labor compliance interviews, prevailing wage reviews, certified payroll reviews, formal or informal complaints (whether anonymous or otherwise); or if information comes to light that leads ODOT’s CCOs to question an ODOT contractor’s compliance with state and federal laws. ODOT contractor compliance investigations are also conducted if a firm attempts to use another firm that does not appear to meet DBE program eligibility criteria in order to meet DBE contract goals or other DBE program requirements. ODOT manages each contractor compliance investigation on a case-by-case basis. ODOT contractor compliance investigations often include collaboration with federal agency counterparts and can potentially lead to sanctions, payment withholdings, suspension or debarment proceedings, fines, imprisonment, the removal or suspension of DBE certifications, and other penalties. ODOT contractor compliance investigations are generally conducted by project by the applicable CCO. For each ODOT contractor compliance-related investigation, ODOT’s contractor compliance team follows a standard investigative process that depends on the nature of the investigation involved and considers all information ODOT decision-makers need to effectively account for and resolve potential contractor noncompliance. The following details the general contractor compliance investigative process:
Contractor Compliance Investigative Process
1 • Desk Reviews
2 • Public Records Searches
3 • Onsite Reviews
4 • Interviews
5 • CUF Reviews
6 • Labor Compliance Reviews
7 • Investigation Outcome Memorandums
8 • Letter Production
9 • Final Investigation Report
10 • Administrative Record
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1. Desk Reviews For each ODOT contractor compliance investigation, ODOT’s CCOs perform a review of the firm’s project record, including (and beyond):
All relevant contractual data
o Between ODOT and prime contractor o Between prime contractor and subcontractors
All relevant financial data of Labor Compliance Interviews
o Certified Payrolls o Prevailing Wage Rates
Relevant employee information (W2 and 1099)
Equipment and property
Product inventory
Professional licenses and certifications
Trucking tickets
Affiliated businesses information
Project history
2. Public Records Searches For some ODOT contractor compliance investigations, ODOT’s CCOs conduct public records searches using Accurint software. ODOT also performs additional methods of conventional public research, including (and beyond):
A review of information obtained through the Ohio Secretary of State’s database;
A review of each company’s website (and those of its affiliates);
Public searches of each owner and affiliate business;
A review of ODOT’s contractual records; and
A search of the USDOT DBE certification denial database.
3. Onsite Reviews
After a desk review and public records search have been completed for each ODOT contractor compliance investigation, ODOT’s contractor compliance team conducts an onsite review. ODOT
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carefully manages the scheduling and conducting of the investigative onsite review(s) in order to maximize the potential to obtain valuable information while maintaining the integrity of its overall investigative process. When necessary, based on the information obtained during the initial desk review and public records search phases, ODOT creates additional, customized onsite interview questions and record requests.
4. Interviews
ODOT’s CCOs interview all relevant parties involved in an investigation, including and beyond, any involved prime contractors, subcontractors, DBE firm(s), personnel, complainants, etc. ODOT’s CCOs record all interview responses and make Requests for Additional Information (RFAI) and documentation as necessary based on the responses received.
5. CUF Reviews
ODOT’s CCOs perform field CUF reviews with any DBE firms in question on all relevant projects to ensure the firms are responsible for execution of the work of the contract by actually performing, managing, and supervising the work involved with its subcontract with the prime contractor.
6. Labor Compliance Interviews
ODOT’s CCOs compare their completed labor compliance interviews with all related payment information and affidavits, prime contractor and/or subcontractor payroll reports, and all relevant prime contractor and subcontractor certified payroll submissions to ensure compliance with federal law and ODOT prevailing wage guidelines/processes. As necessary, ODOT’s CCOs also review all related invoices, employee paystubs, leader worker’s logs, etc. to compare and confirm information being obtained from the contractor(s) in question.
7. Investigation Outcome Memorandums
Based on the results of the proceeding procedural processes, ODOT’s CCOs prepare investigation outcome memorandums (memos) that objectively detail the facts obtained during the investigative process and make ultimate recommendations to ODOT’s CCMs.
8. Letter Production (if necessary)
Based on the final outcome(s) of the investigation, ODOT’s CCOs either prepare and/or work with ODOT’s CCMs to produce all necessary written communications to the prime contractors and subcontractors in question.
9. Final Investigation Report For each contractor compliance investigation, ODOT’s CCOs merge all the investigative and related documents in one master report file (both digital and printed) for ease of future reference and convenience. Each Final Investigation Report is completed by project by district with at least one completed report per relevant project. The format of the report is uniform for all contractor compliance investigations and is available in both printed binder and digital format. The Final Investigation Report includes copies of all included documentation; original documentation is saved physically and digitally in ODOT’s files.
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The framework of each Final Investigation Report generally includes the following: 1. Cover Page
a. Name of Firm b. PID Number c. Contract ID Number
2. Sections a. Maps (from Project Plan) b. Firm Proposal c. Firm Contract d. Prevailing Wages e. Firm Certified Payrolls f. Daily Work Reports g. Labor Compliance Interviews h. Timesheets i. Bulletin Board Materials j. Paystubs k. Land Agreements l. Applicable EPA Documents m. List of Relevant Contact Information
10. Administrative Record
In anticipation of potential appeals, for each investigation, ODOT’s CCOs prepare clearly labeled and filed administrative records with the Final Investigation Reports on ODOT’s server for potential external audits and future administrative record requests. The files are saved in the corresponding project’s file folder.
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