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DBE compliance for transit
Disadvantaged Business Enterprise (DBE) provisions apply to USDOT-assisted contracts for airports, highways and transit. This includes the use of Federal Transit Administration (FTA) planning, capital, and/or operating funds spent on contracts. The FTA requires organizations receiving these federal funds to make efforts to purchase from, or use, DBE firms. A DBE is a for-profit small business that is:
- At least 51 percent owned by one or more individuals who are socially or economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals.
- Controlled (management and daily business operations) by one or more of the socially and economically disadvantaged individuals who own it.
As a recipient of these FTA funds, the Wisconsin Department of Transportation (WisDOT) has a DBE program that addresses FTA funded contracting activities conducted by WisDOT, as well as those of its grant subrecipients.
The objectives of the DBE program are, in part, to:
- Ensure nondiscrimination in the award and administration of USDOT-assisted contracts
- Create a level playing field on which DBEs can compete fairly for USDOT-assisted contracts
- Help remove barriers to the participation of DBEs in USDOT-assisted contracts
This is reflected in the policy adopted by WisDOT.
When entering into grant agreements for FTA assistance, WisDOT and its subrecipients agree to adhere to the DBE requirements (49 CFR Part 26). This is a condition of receiving the federal financial assistance and is assured to in writing. In addition, the requirements apply at the contract level. This means each contract signed with a contractor and each subcontract a prime contractor signs with a subcontractor must include DBE language which states:
The contractor, subrecipient, or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable requirements of 49 CFR Part 26 in the award and administration of USDOT-assisted contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate.
DBE goal for transit
The establishment of a DBE participation goal is another requirement of the DBE regulation. A three-year goal for transit has been established by WisDOT for 2014-2016 based on its own anticipated contracting opportunities and those of its grant subrecipients. The goal was developed, in part, by using the information provided in the DBE reports submitted to WisDOT by grant subrecipients.
WisDOT has established an overall goal of 2.78 percent for DBE participation in FTA-assisted contracts and will strive to achieve the goal through race neutral means. Progress toward achievement of the goal will be monitored throughout the year with quarterly reporting required of subrecipients. In some instances, a separate contract goal may be established to assist in attaining the overall goal. This may include a contract specific goal for a subrecipient project. If a contract specific goal is set, additional monitoring and reporting on the performance of the contract will apply.
The DBE requirements include provisions that must be addressed in the procurement process. These provisions include required contract clauses, contract goal-setting, and required information from bidders. The required contract clauses address non-discrimination, Transit Vehicle Manufacturer (TVM) certification, termination, and remedies for prime contractors that do not comply. Prompt payment by prime contractors to their subcontractors is also required, including the return of retainage. While separate contract goals are not required on each contract, if a contract specific goal is established, additional information must be collected from bidders prior to contract award.
On a quarterly basis, subrecipients of federal transit funding must report to WisDOT contracting activities (items/services purchased) that use FTA funding. Examples include materials, supplies, services (transportation, repair, consulting, etc.), and construction. For the purposes of this report, contracts do not include grants and cooperative agreements.
Quarterly reports are due on the 15th of the month following the end of the reporting quarter.
1st Quarter – January 1 to March 31 (due April 15)
2nd Quarter – April 1 to June 30 (due July 15)
3rd Quarter – July 1 to September 30 (due October 15)
4th Quarter – October 1 to December 31 (due January 15)
WisDOT is committed to a Civil Rights Program for the participation of Disadvantaged Business Enterprises.
Procurement Training (WisDOT presentation)
DBE Requirements: Yes, They Apply To You! (WisDOT presentation)
DBE Requirements: Wait, There's More? (WisDOT presentation)
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Becky Soderholm, firstname.lastname@example.org
Last modified: January 6, 2015
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