HomeMy WebLinkAbout2006-06-07 STAFF REPORTS 2K �o�pALM SA4
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cg4�FORN�P CITY COUNCIL STAFF REPORT
,TUNE 7, 2006 CONSENT CALENDAR
Subject: APPROVAL OF THE DISADVANTAGED BUSINESS ENTERPRISE
RACE-NEUTRAL IMPLEMENTATION AGREEMENT WITH THE
CALIFORNIA DEPARTMENT OF TRANSPORTATION
From: David H. Ready, City Manager
Initiated by: Public Works and Engineering Department
SUMMARY
The California Department of Transportation (Caltrans), in response to a judicial ruling
from the Ninth Circuit Court of Appeals which applies to Disadvantaged Business
E=nterprise (DBE) Programs in California, has implemented a statewide "race-neutral"
DBE Program. As a sub-recipient of federal funds from the U.S. Department of
Transportation, Federal Highway Administration (FHWA) received through Caltrans, all
local agencies receiving FHWA funds are mandated to adopt the DBE Race-Neutral
Implementation Agreement with Caltrans. Until adoption of the Agreement,
authorization for use of FHWA federal funds on federal-aid projects will be withheld.
RECOMMENDATION:
11) Adopt Resolution No. "A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AGREEMENT NO.
THE DISADVANTAGED BUSINESS ENTERPRISE RACE-NEUTRAL
IMPLEMENTATION AGREEMENT WITH THE CALIFORNIA DEPARTMENT OF
TRANSPORTATION (CALTRANS);" and
2) Authorize the City Manager to execute all necessary documents.
STAFF ANALYSIS:
A recent Ninth Circuit Court of Appeals decision on Western States Paving Co, Inc v.
Washington State Department of Transportation et al held that Washington State
Department of Transportation (WSHDOT) lacked sufficient evidence to support the use
of race-conscious measures on federal-aid contracts. It is important to note that the
federally mandated DBE Program itself was not declared unconstitutional. The Ninth
Circuit's decision is controlling authority for California and other western states within its
Item No. n . K .
City Council Staff Report
,June 7, 2006- Page 2
Caltrans DBE Agreement
jurisdiction. After an assessment by Caltrans of its DBE program and the use of race-
conscious goals on individual contracts, Caltrans determined that its DBE Program may
not meet the new evidentiary standards established by the Ninth Circuit Court of
Appeals. Please see Attachment 1, a copy of "Questions and Answers Concerning
Response to Western States Paving Company v. Washington State Department of
Transportation" prepared by the U.S. Department of Transportation, Federal Highway
Division, Office of Civil Rights; and Attachment 2, a copy of the May 1, 2006, letter from
the Director of Caltrans to the Federal Highway Administration indicating its intention to
implement a state-wide race-neutral DBE Program.
In adopting a race-neutral DBE Program, Caltrans implemented new procedures and
guidance, which includes the following changes that were effective May 1, 2006:
• Local agencies will no longer have their own separate DBE programs unless such
programs have been approved directly by a federal agency (i.e. the Palm Springs
Airport will have its own DBE Program approved directly by the Federal Aviation
Administration (FAA), as the Airport is a direct recipient of federal funds from the
FAA). Instead, local agencies must complete a "Disadvantaged Business Enterprise
Race-Neutral Implementation Agreement".
Local agencies may no longer advertise and award contracts with federal-aid funds
containing race-conscious DBE goals.
• All federal-aid procurements shall contain race-neutral DBE contract language.
Caltrans has prepared an Implementation Agreement that binds the City to following
Caltrans' state-wide race-neutral DBE Program, as required by the new evidentiary
standards established by the Ninth Circuit Court of Appeals. The Agreement is not
subject to modification by local agencies, and must be adopted as to the form submitted
by Caltrans for approval by the local agencies. Until adoption of the Implementation
Agreement by local agencies, and an executed Implementation Agreement is submitted
to Caltrans, authorization of the use of FHWA federal funds on federal-aid projects will
be withheld.
FISCAL IMPACT: Finance Director Review: ✓ `
The City has several FHWA federal-aid projects that may have funding withheld until
adoption of the Implementation Agreement. Until adoption of the Implementation
Agreement, the City's un-obligated FHWA federal funds are frozen.
City Council Staff Report
June 7, 2006- Page 3
Caltrans DBE Agreement
Submitted:
David J. Barakian Thomas J. Wils
Director of Public Works/City Engineer Assistant City Manager
David H. Ready j
City Manager
ATTACHMENTS:
11. Questions and Answers Concerning Response to Western States Paving Company
v. Washington State Department of Transportation, prepared by the U.S.
Department of Transportation, Federal Highway Division, Office of Civil Rights
2. May 1, 2006, letter from the Director of Caltrans to the Federal Highway
Administration
3. Implementation Agreement
4. Resolution
ATTACHMENT
Questions and Answers Concerning Response to Western States Paving Company v.
Washington State Department of Transportation, prepared by the U.S. Department of
Transportation, Federal Highway Division, Office of Civil Rights
Questions and Answers Concerning Response to Western States Paving Company v. Washington State ... Page I of 5
Offirce of Civil Rights .
i
P Questions ain d Answers Concerning Response to Western States raving Company v.
Washington :Mate Department of Transportation
The General Counsel of the Department of Transportation has reviewed this document and approved it as consistent with the
language and intent of 49 CFR Part 26.
QUESTION: To Whom Do these Questions and Answers Apply?
ANSWER: . These questions and answers apply only to recipients of Federal financial assistance from the Federal
Highway Administration (FHWA), Federal Transit Administration (FTA), and Federal Aviation
Administration (FAA) located in the states comprising the gth Federal Judicial Circuit. These states are
California, Oregon, Washington, Alaska, Arizona, Idaho, Montana, Nevada, and Hawaii.
• These questions and answers do not apply to recipients in other states.
• These questions and answers apply only to the disadvantaged business enterprise programs (DBE)of
recipients of Federal financial assistance governed by 49 CFR Part 26.
QUESTION: What did the Court say in Western States?
ANSWER'.:
• Like other Federal courts that have reviewed the Department of Transportation's DBE program, the 9th
Circuit panel held that 49 CFR Part 26 and the authorizing statute for the DBE program in TEA-21 were
constitutional. The court affirmed that Congress had determined that there was a compelling need for the
DBE program and the Part 26 was narrowly tailored.
• The court agreed that Washington State did not need to establish a compelling need for its DBE program,
independent of the determinations that Congress made on a national basis.
• However, the court said that race conscious elements of a national program, to be narrowly tailored as
applied, must be limited to those parts of the country where its race-based measures are demonstrably
needed.
• Whether race-based measures are needed depends on the presence or absence of discrimination or its
effects in a state's transportation contracting industry.
• In addition, even when discrimination is present in a state, a program is narrowly tailored only if its
application is limited to those specific groups that have actually suffered discrimination or its effects.
• The court concluded that Washington State DDT's DBE program was not narrowly tailored because the
evidence of discrimination supporting its application was inadequate. The court mentioned several ways in
which the state's evidence was insufficient:
Washington State DOT had not conducted statistical studies to establish the existence of
discrimination in the highway contracting industry that were completed or valid.
Washington State DOT's calculation of the capacity of DBEs to do work was flawed because it failed
to take into account the effects of past race-conscious programs on current DBE participation
The disparity between DBE participation on contracts with and without affirmative action components
did not provide any evidence of discrimination.
A small disparity between the proportion of DBE firms in the state and the percentage of funds
awarded to DBEs in race-neutral contracts (2.7% in the case of Washington State DOT)was entitled
to little weight as evidence of discrimination, because it did not account for other factors that may
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affect the relative capacity of DBEs to undertake contracting work.
This small statistical disparity is not enough, standing alone, to demonstrate the existence of
discrimination. To demonstrate discrimination, a larger disparity would be needed.
Washington State DOT did not present any anecdotal evidence of discrimination.
The affidavits required by 49 CFR 26.67(a), in which DBEs certify that they are socially and
economically disadvantaged, are not evidence of the presence of discrimination.
• Consequently, the court found that the Washington State DOT DBE program was unconstitutional as
applied.
• The court cited the 8th Circuit's decision in Sherbrooke Turf v. Minnesota Department of Transportation. In
that case, the court said, Minnesota and Nebraska had hired outside consulting firms to conduct statistical
analyses of the availability and capacity of DBEs in their local markets, which the 8th Circuit had relied on
in holding that the two states' DBE programs were constitutional as applied.
QUESTION: What action should recipients take with respect to submitting their overall goals for FY 2006?
ANSWER: a Recipients should examine the evidence they have on hand of discrimination and its effects. Does this
evidence appear to address successfully the problems the gth Circuit's decision articulated concerning the
Washington State DOT DBE program?
• If the recipient currently has sufficient evidence of discrimination or its effects, the recipient should go
ahead and submit race-and gender-conscious goals where appropriate, as provided in Part 26. (This
submission would include the normal race conscious/race-neutral "split" in overall goals.)
• If the evidence of discrimination and its effects pertains to some, but not all, of the groups that Part 26
presumes to be socially and economically disadvantaged, then these race-and gender-conscious goals
should apply only to the group or groups for which the evidence is adequate.
• If necessary, the Department may entertain program waivers of Part 26's prohibition of group-specific
goals in this situation.
• If the recipient does not currently have sufficient evidence of discrimination or its effects, then the recipient
would submit an all-race neutral overall goal for FY 2006. The recipient's submission would include a
statement concerning the absence of adequate evidence of discrimination and its effects.
• A race-neutral submission of this kind should include a description of plans to conduct a study or other
appropriate evidence-gathering process to determine the existence of discrimination or its effects in the
recipient's market.An action plan describing the study and time lines for its completion should also be
included.
• The Department's operating administrations are willing, in response to recipients' requests, to extend the
time for submitting FY2006 goals for a time sufficient to allow recipients to evaluate the adequacy of their
current evidence of discrimination or its effects.
• Operating administrations will review recipients' annual goal submissions to determine whether recipients
have provided evidence of discrimination or its effects.
Should recipients who will be submitting all race-neutral overall goals for FY 2006 because they do not
QUESTION: have sufficient evidence of discrimination or its effects make any changes to contracts issued during FY
2005 or earlier?
• No. Even where FY 2005 contracts used race-conscious contract goals,we do not believe it is appropriate
ANSWER: to attempt to revise or reform those contracts.
QUESTION If recipients will be operating an all-race neutral DBE program in FY 2006 or subsequent years,what
should such a program include?
ANSWER:
• With few exceptions, generally there is no difference in how the DBE program regulations apply to a race-
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and gender-neutral program (hereafter race-neutral)as compared to a race-and gender-conscious
program (hereafter race-conscious).
• In a wholly race- neutral program (e.g., the annual overall DBE goal has been approved with no portion of
it projected to be attained by using race-and gender-conscious means)the recipient does not set contract
goals on any of its US DOT-assisted contracts for which DBE subcontracting possibilities exist. Recipients
having an all race-neutral program are not required to establish contract goals to meet any portion of their
overall goal.
• Recipients should take affirmative steps to use as many of the race-neutral means of achieving DBE
participation identified at 49 CFR 26.51(b)as possible to meet the overall goal and to demonstrate that you
are administering your program in good faith. The Department expects that recipients using all race-neutral
programs will use methods such as unbundling of contracts, technical assistance, capital and bonding
assistance, business development programs, etc., rather than waiting passively for DBEs to participate.
• The good faith efforts requirements in 49 CFR 26.53 that apply when DBE contract goals are set have no
required application to recipients implementing a race-neutral program. However, recipients must continue
to collect the data required to be reported in the Uniform Report of DBE Awards or Commitments and
Payments Form (see§26.11)and to monitor compliance with the commercially useful function
requirements.
• The prompt payment and retainage requirements of 49 CFR 26.29 are race-neutral mechanisms designed
to benefit all subcontractors, DBEs and non-DBEs alike. Recipients using all race-neutral programs must
continue to implement them.
• The requirement that DBEs must perform a commercially useful function to receive credit toward the
overall goal applies to race neutral programs just as it does to programs that use race-conscious means to
meet program objectives.
• It is helpful for recipients to maintain an effective monitoring and enforcement program to track DBE
participation obtained through race neutral means that the recipient claims credit(see 49 CFR 26.37(b)).
QUESTION What must recipients do that have already submitted their FY 2006 goals to modal administrations for
approval?
ANSWER: . If the appropriate modal administration determines that the FY 2006 DBE goal submission does not
contain the kind of information or documentation suggested by this guidance that would comport with the
law established by the Ninth Circuit Court of Appeals, the recipient will be directed to revise and resubmit
its DBE goal submission consistent with this guidance.
QUESTION Will the process used by the modal administrations to review and approve goal submissions made by
recipients in the Ninth Circuit change?
ANSWER: • For FHWA recipients in the 91h Circuit, FY 2006 DBE goal submissions will require concurrence by the
FHWA Office of Civil Rights and the Office of Chief Counsel in Washington, D.C. before approval by the
appropriate FHWA division office.
• FTA's process will remain the same.
• For FAA recipients in the 9r' Circuit, FY 2006 DBE goal submission with a race-conscious component will
require concurrence by the FAA Headquarters Office of Civil Rights and a legal sufficiency review by the
Office of Chief Counsel in Washington, D.C. before being approved by the appropriate FAA Regional
Office of Civil Rights and Office of Chief Counsel. Those with an all race-neutral overall goal will be
approved by the Regional Office of Civil Rights.
QUESTION If a recipient lacks sufficient evidence of discrimination or its effects, what should it do to remedy the lack
of information?
ANSWER: • A recipient in this situation should immediately begin to conduct a rigorous and valid study to determine
whether there is evidence of discrimination or its effects.
• The Department expects recipients who submit an all-race neutral goal for FY 2006 because they lack
sufficient evidence of discrimination to ensure that this evidence-gathering effort is completed
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expeditiously.
• Studies to determine the presence of discrimination or its effects are often referred to as "disparity' or
"availability" studies,though there can also be rigorous and scientifically valid studies which may have
different names. Whatever label is applied to a study, however, the key point is that it be designed to
determine, in a fair and valid way, whether evidence of the kind the 9th Circuit decision determined was
essential to a DBE program including race-conscious elements exists.
QUESTION What should recipients'studies include?
ANSWER: Based on the 9th Circuit decision, recipients should consider the following points as they design their studies:
• The study should ascertain the evidence for discrimination and its effects separately for each of the groups
presumed by Part 26 to be disadvantaged.
• The study should include an assessment of any anecdotal and complaint evidence of discrimination.
• Recipients may consider the kinds of evidence that are used in "Step 2" of the Part 26 goal-setting
process, such as evidence of barriers in obtaining bonding and financing, disparities in business formation
and earnings.
• With respect to statistical evidence, the study should rigorously determine the effects of factors other than
discrimination that may account for statistical disparities between DBE availability and participation. This is
likely to require a multivariate/regression analysis.
• The study should quantify the magnitude of any differences between DBE availability and participation, or
DBE participation in race-neutral and race-conscious contracts. Recipients should exercise caution in
drawing conclusions about the presence of discrimination and its effects based on small differences.
• In calculating availability of DBEs, the study should not rely on numbers that may have been inflated by
race-conscious programs that may not have been narrowly tailored.
• Recipients should consider, as they plan their studies, evidence-gathering efforts that Federal courts have
approved in the past. These include the studies by Minnesota and Nebraska cited in Sherbrooke Turf, Inc.
v. Minnesota Department of Transportation, 345 F.3d 964 (8th Cir. 2003), cent. denied 124 S. Ct. 2158
(2004)and the Illinois evidence cited in Northern Contracting, Inc. v.State of Illinois, et al. 2005 WL
2230195, N.D.III., September 08, 2005(No. 00 C 4515)
QUESTION] Can there be statewide or regional studies, as opposed to a separate study for each individual recipient?
ANSWER: . If feasible, studies may be undertaken on a regional or statewide basis to reduce the costs that would be
involved if each recipient conducted its own separate study.
• We would expect that each State DOT would conduct a statewide study. Such a study should be
conducted in cooperation with transit and airport recipients in the state, so that the study would apply to
recipients in all three modes.
• Larger transit and/or airport recipients may want to conduct their own study, since the demographics of
large urban areas may differ from that of the state as a whole.
QUESTION Will Federal funds help to defray the costs of recipients' studies?
ANSWER: • Yes. FHWA, FTA, and FAA have all stated that the costs of conducting disparity studies are reimbursable
from Federal program funds, subject to the availability of those funds.
• Recipients should contact their operating administration for more detailed information.
This page last modified on May 18, 2006
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ATTACHMENT
May 1, 2006, letter from the Director of Caltrans to the
Federal Highway Administration
STATE OF(ALFORNIA—BUSMPSS TRANSPORTATION AND MINIM ACEN(,y ARNOLD SCHWARZENBGGER G
DEPARTMENT OF TRANSPORTATION
OFFICE OF THE DIRECTOR
1120 N STREET
P.O.BOX 942873 '
SACRAMENTO,CA 94273-0001 Flexyourpower!
PHONE (916)654-5266 Be energy efctent!
FAX (916)654-6608
TTY (916)653-4086
May 1,2006
Mr. Gene K. Fong,Administrator
California Division
Federal Highway Administration
650 Capitol Mall,Suite 4-100
Sacramento, CA 95814
Attention: Mr. Lance Yokota, Civil Rights Manager
Re: Letter of Intent to Change to a Race-Neutral DBE Program
Dear .I�
Reference is made to your letter, GUIDANCE: FY 2006 DBE Goal Setting Approval Process
and DBE Program Plans,which advised each state transportation agency to assess whether it
has sufficient evidence of discrimination or its effects on transportation contracts in order to
support a Disadvantaged Business Enterprise(DBE)race-conscious program. Absent
sufficient evidence,the state transportation agency must revise its DBE Program to request
approval to implement a wholly race-neutral program while it undertakes a more detailed
assessment, such as a disparity study.
Per your direction,the California Department of Transportation(Department) gathered and
considered past disparity studies,comments, and written evidence received during a 90-day
public comment period ending March 20,2006. While there is a suggestion of discrimination
in some of the information received, after careful analysis, the Department, in consultation
with your division staff,has concluded the data lacks sufficient evidence to satisfy the strict
scrutiny and newly-established evidentiary standards set forth by the Ninth Circuit Court of
Appeals in order to continue with a race-conscious DBE Program. Accordingly,effective
May 1,2006, the Department and its federal transportation assistance subrecipients will
implement a DBE race-neutral program pending the results of a more comprehensive study of
the facts.
"Caltrans improves mobility across California"
Gene K. Fong
May 1, 2006
Page 2
The following factors led to the joint conclusion:
1. The data provided did not identify specific evidence of discrimination suffered by any of
the presumptively disadvantaged groups identified in 49 CFR Part 26.5 in the
transportation contracting industry in the State of California.
2. The available disparity studies conducted in California were limited in scope to a local
government agency or a project, geographically and chronologically limited, and did not
provide valid"statistical evidence"of discrimination in transportation contracting.
3. The anecdotal evidence related to transportation contracts in California could not be
verified.
The overall California DBE goal to be achieved exclusively by race neutral measures is 10.5
percent for projects funded through the Federal Highway Administration(FHWA). The
Department will identify an"Availability Advisory Percentage"on individual federal-aid
contracts,which is intended to assist bidders in ascertaining DBE availability for items of
work on a contract. The Department's contract specifications encourage bidders to utilize
DBEs to aid the Department in achieving the statewide DBE goal.
As noted above,the race-neutral DBE Program may be an interim step,pending the results of
an availability study and a disparity study to guide the Department's DBE Program in
accordance with 49 Code of Federal Regulations Part 26. The Department is in the process of
executing a contract with a consultant to complete an availability study and a disparity study
required by FHWA to identify any evidence of discrimination that must be sufficient to
withstand judicial scrutiny. The Department intended to execute the consultant contract on
May 1,2006,but has unfortunately received three bid protests from proposers. These protests
must be resolved prior to contract execution and this process may take up to 30 days. In any
event,we still anticipate the availability study will be completed within four months of
contract execution and the disparity study by May 2007.
As required by FHWA guidance, a revised DBE Program Plan will be sent to your office for
review and approval on or about May 8,2006.
The Department has developed several channels of communication,which will be used
simultaneously to announce this change to the Governor's Office,my Department employees,
California legislators, external contracting partners, such as the Small Business Council and
the Associated General Contractors of California, as well as local agencies that are
subrecipients of FHWA funds.
"Caltrans Improves mobility across California"
Gene R. Fong
May 1, 2006
Page 2
As you know,we have been working very closely with your Division Civil Rights Manager,
Lance Yokota, and we will continue to seek his advice and guidance during this transition
period and while the availability and disparity studies are being conducted. I wish to
personally commend Lance for his dedication and hard work. We look forward to continuing
our cooperative relationship.
If you have any questions,please contact me directly at(916)654-5266.
Sincerely, /�
c''�'��Y
WILL KEMPTON
Director
"Caltrans improves mobility across California"
ATTACHMENT
IMPLEMENTATION AGREEMENT
DISADVANTAGED BUSINESS ENTERPRISE RACE-NEUTRAL
IMPLEMENTATION AGREEMENT
For the City of Palm Springs, a California charter city, hereinafter referred to as "RECIPIENT."
1 Definition of Terms
The terms used in this agreement have the meanings defined in 49 CFR § 26.5.
II OBJECTIVE/POLICY STATEMENT (§26/1. 26/23)
The RECIPIENT intends to receive federal financial assistance from the U. S. Department of
Transportation (DOT) through the California Department of Transportation (Caltrans), and as a
condition of receiving this assistance, the RECIPIENT will sign the California Department of
Transportation's Disadvantaged Business Enterprise Implementation Agreement (hereinafter
referred to as Agreement). The RECIPIENT agrees to implement the State of California,
Department of Transportation Disadvantaged Business Enterprise (DBE) Program Plan
(hereinafter referred to as the DBE Program Plan) as it pertains to local agencies. The DBE
Program Plan is based on U.S. Department of Transportation (DOT), 49 CFR, Part 26
requirements. It is the policy of the RECIPIENT to ensure that DBEs, as defined in Part 26,
have: an equal opportunity to receive and participate in DOT-assisted contracts. It is also their
policy:
• To ensure nondiscrimination in the award and administration of DOT-assisted contracts.
• To create a level playing field on which DBE's can compete fairly for DOT-assisted
contracts.
• To ensure that their annual overall DBE participation percentage is narrowly tailored, in
accordance with applicable law.
• To ensure that only firms that fully meet 49 CFR, Part 26 eligibility standards are permitted
to participate as DBEs.
• To help remove barriers to the participation of DBEs in DOT-assisted contracts.
• To assist the development of firms that can compete successfully in the market place
outside the DBE Program.
III Nondiscrimination (§26.7)
RECIPIENT will never exclude any person from participation in, deny any person the benefits
of, or otherwise discriminate against anyone in connection with the award and performance of
any contract covered by 49 CFR, Part 26 on the basis of race, color, sex, or national origin. In
administering the local agency components of the DBE Program Plan, the RECIPIENT will not,
directly, or through contractual or other arrangements, use criteria or methods of administration
that have the effect of defeating or substantially impairing accomplishment of the objectives of
the DBE Program Plan with respect to individuals of a particular race, color, sex, or national
origin.
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 1 OF 6
IV Annual DBE Submittal Form (§26.21)
The RECIPIENT will provide to the Caltrans' District Local Assistance Engineer (DLAE) a
completed DBE Annual Submittal Form by June 1 of each year for the following Federal Fiscal
Year (FFY). This form includes an Annual Anticipated DBE Participation Level (AADPL),
methodology for establishing the AADPL, the name, phone number, and electronic mailing
address of the designated DBELO, and the choice of Prompt Pay Provision to be used by the
RECIPIENT for the following FFY.
V Race-Neutral Means of Meeting the Annual DBE Goal (§26.51)
RECIPIENT will assist Caltrans to achieve its Overall Statewide DBE Goal by race neutral
means that may include, but are not limited to the following:
1. Advertising solicitations, scheduling bidding periods and opening times, and packaging
quantities, specifications, and delivery schedules in ways that facilitate DBE and other
small business participation.
2. Providing assistance to DBE and small businesses in overcoming limitations such as
inability to obtain bonding or financing (e.g., by such means as simplifying the bonding
process, reducing bonding requirements, and providing services to help DBEs and other
small businesses obtain bonding and financing).
3. Providing technical assistance and other services to DBE and small businesses.
4. Providing information and communication programs on contracting procedures and specific
contract opportunities (e.g., ensuring the inclusion of DBEs and other small businesses on
recipient mailing lists of bidders; ensuring the dissemination to bidders on prime contracts
of lists of potential subcontractors including DBE's and small businesses; providing the
information in languages other than English, where appropriate).
5. Implementing a supportive services program to develop and improve immediate and long-
term business management, record keeping, and financial and accounting capability for
DBEs and other small businesses.
6. Providing services to help DBEs and other small businesses improve long-term
development, increase opportunities to participate in a variety of kinds of work, handle
increasingly significant projects, and achieve eventual self-sufficiency.
7. Establishing a program to assist new, start-up firms, particularly in fields in which DBE
participation has been historically low.
8. Assisting DBEs and other small businesses to develop their capability to utilize emerging
technology and conduct business through electronic media.
9. Implementing or developing a mentor-prot6g6 program.
VI Quotas (§26.43)
RECIPIENT will not use quotas or set-asides in any way in the administration of the local
agency component of the DBE Program Plan.
VII DBE Liaison Officer (DBELO) (§26.25)
RECIPIENT has designated a DBE Liaison Officer. The DBELO is responsible for
implementing the DBE Program Plan, as it pertains to the RECIPIENT, and ensures that the
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 2 OF 6
RECIPIENT is fully and properly advised concerning DBE Program Plan matters. The
designated DBELO has appropriate staff and resources assigned to the DBE program to
ensure RECIPIENT's compliance with the terms of this Agreement. The name, address,
telephone number, electronic mail address, and an organization chart displaying the DBELO's
position in the organization are found in Attachment "A" to this Agreement. This information will
be updated annually and included on the DBE Annual Submittal Form.
The DBELO is responsible for developing, implementing, and monitoring the RECIPIENT's
requirements of the DBE Program Plan in coordination with other appropriate officials. Duties
and responsibilities include the following:
1. Gathers and reports statistical data and other information as required.
2. Reviews third party contracts and purchase requisitions for compliance with this program.
3. Works with all departments to determine projected Annual Anticipated DBE Participation
Level.
4. E_nsures that bid notices and requests for proposals are made available to DBEs in a timely
manner.
5. Analyzes DBE participation and identifies ways to encourage participation through race-
neutral means.
6. Participates in pre-bid meetings.
7. Advises the CEO/governing body on DBE matters and DBE race-neutral issues.
8. Provides DBEs with information and recommends sources to assist in preparing bids,
obtaining bonding and insurance.
9. Flans and participates in DBE training seminars.
10.Provides outreach to DBEs and community organizations to fully advise them of contracting
opportunities.
VIII Federal Financial Assistance Agreement Assurance (§26.13)
RECIPIENT will sign the following assurance, applicable to and to be included in all DOT-
assisted contracts and their administration, as part of the program supplement agreement for
each project. The recipient shall not discriminate on the basis of race, color, national origin, or
sex in the award and performance of any DOT-assisted contract, or in the administration of its
DBE Program, or the requirements of 49 CFR Part 26. The recipient shall take all necessary
and reasonable steps under 49 CFR, Part 26 to ensure nondiscrimination in the award and
administration of DOT-assisted contracts. The recipient's DBE Program, as required by 49
CFR, Part 26 and as approved by DOT, is incorporated by reference in this agreement.
Implementation of this program is a legal obligation and failure to carry out its terms shall be
treated as a violation of this agreement. Upon notification to the recipient of its failure to carry
out its approved program, the Department may impose sanctions as provided for under Part 26
and may, in appropriate cases, refer the matter for enforcement under 18 U.S.C. 1001 and/or
the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.).
IX DBE Financial Institutions (§26.27)
It is the policy of the RECIPIENT to investigate the full extent of services offered by financial
institutions owned and controlled by socially and economically disadvantaged individuals in the
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 30F6
community to make reasonable efforts to use these institutions, and to encourage prime
contractors on DOT-assisted contracts to make use of these institutions.
Information on the availability of such institutions can be obtained from the DBELO. The
Caltrans' Disadvantaged Business Enterprise Program may offer assistance to the DBELO.
X Directory (§26.31)
RECIPIENT will refer interested persons to the Unified Certification Program DBE directory
available from the Caltrans Disadvantaged Business Enterprise Program's website at
wvnv.dot.ca.gov/hq/bep.
XI Required Contract Clauses (§§26.13, 26.29)
RECIPIENT ensures that the following clauses or equivalent will be included in each DOT-
assisted prime contract:
A. CONTRACT ASSURANCE
The contractor 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 DOT-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 recipient deems
appropriate.
B. PROMPT PAYMENT
Prompt Progress Payment to Subcontractors
A prime contractor or subcontractor shall pay to any subcontractor not later than 10-days of
receipt of each progress payment, in accordance with the provision in Section 7108.5 of the
California Business and Professions Code concerning prompt payment to subcontractors. The
10-days is applicable unless a longer period is agreed to in writing. Any delay or postponement
of payment over 30-days may take place only for good cause and with the agency's prior
written approval. Any violation of Section 7108.5 shall subject the violating contractor or
subcontractor to the penalties, sanctions, and other remedies of that Section. This requirement
shall not be construed to limit or impair any contractual, administrative, or judicial remedies,
otherwise available to the contractor or subcontractor in the event of a dispute involving late
payment or nonpayment by the contractor, deficient subcontractor performance, and/or
noncompliance by a subcontractor. This clause applies to both DBE and non-DBE
subcontractors.
Prompt Payment of Withheld Funds to Subcontractors
The agency shall hold retainage from the prime contractor and shall make prompt and regular
incremental acceptances of portions, as determined by the agency of the contract work and
pay retainage to the prime contractor based on these acceptances. The prime contractor or
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 4OF6
subcontractor shall return all monies withheld in retention from all subcontractors within 30-
days after receiving payment for work satisfactorily completed and accepted including
incremental acceptances of portions of the contract work by the agency. Any delay or
postponement of payment may take place only for good cause and with the agency's prior
written approval. Any violation of these provisions shall subject the violating prime contractor to
the penalties, sanctions, and other remedies specified in Section 7108.5 of the California
Business Professions Code. This requirement shall not be construed to limit or impair any
contractual, administrative, or judicial remedies, otherwise available to the contractor or
subcontractor in the event of: a dispute involving late payment or nonpayment by the
contractor; deficient subcontractor performance; and/or noncompliance by a subcontractor.
This clause applies to both DBE and non-DBE subcontractors.
XII Local Assistance Procedures Manual
The RECIPIENT will advertise, award and administer DOT-assisted contracts in accordance
with the most current published Local Assistance Procedures Manual (LAPM).
XIII Bidders List (§26.11)
The RECIPIENT will create and maintain a bidders list, consisting of information about all DBE
and non-DBE firms that bid or quote on its DOT-assisted contracts. The bidders list will include
the name, address, DBE/non-DBE status, age, and annual gross receipts of the firms.
XIV Reporting to the DLAE
RECIPIENT will promptly submit a copy of the Local Agency Bidder-DBE Information (Exhibit
15-G or Exhibit 10-0 of the LAPM) to the DLAE at the time of execution of consultant or
construction contract award.
RECIPIENT will promptly submit a copy of the Final Utilization of DBE participation to the
DLAE using Exhibit 17-F of the LAPM immediately upon completion of the contract for each
consultant or construction contract.
XV Certification (§26.83(a))
RECIPIENT ensures that only DBE firms currently certified by the California Unified
Certification Program will participate as DBEs on DOT-assisted contracts.
XVI Confidentiality
RECIPIENT will safeguard from disclosure to third parties, information that may reasonably be
regarded as confidential business information consistent with federal, state, and local laws.
(SIGNATURES ON FOLLOWING PAGE)
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 5OF6
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the
date: first written above
CITY OF PALM SPRINGS,
a California charter city
ATTEST:
By:_ By:
City Clerk City Manager
APPROVED AS TO FORM:
By:_
City Attorney
This California Department of Transportation's Disadvantaged Business Enterprise Program
Plan Implementation Agreement is accepted by:
Date:
[Signature of DLAE]
[Print Name of DLAE]
DBE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
PAGE 6OF6
CITY COUNCIL
CITY MANAGER
D
J
CITY ENGINEER D
n
ASST. DIR. PUBLIC WORKS/
m
DBE LAISON OFFICER STREET MAINTENANCE MANAGER Z
D
ASSOCIATE CIVIL ENGINEER PUBLIC WORKS INSPECTOR
ENGINEERING ASSISTANT
Exhibit 9-13 Local Agency DBE Annual Submittal Form
TO: CALTRANS DISTRICT 8
District Local Assistance Engineer
The amount of the Annual Anticipated DBE Participation Level (AADPL) and methodology are
presented herein, in accordance with Title 49 of the Code of Federal Regulations, Part 26, and
the State of California, Department of Transportation Disadvantaged Business Enterprise
(DBE) Program Plan.
The City of Palm Springs submits our AADPL information. We have established an AADPL of
9.5% for the Federal Fiscal Year 2006/2007, beginning on October 1, 2006, and ending on
September 30, 2007.
Methodology
The City of Palm Springs is located with the western portion of the Coachella Valley economic
sub-.region. The Coachella Valley is an approximately 2,500 square mile economic sub-region
of Riverside County. The Coachella Valley consists of the nine incorporated Cities of Palm
Springs, Indian Wells, Desert Hot Springs, Palm Desert, Cathedral City, Rancho Mirage, La
Quinta, Indio and Coachella, and portions of the unincorporated County of Riverside. The City
of Palm Springs represents 92 square miles and boasts a permanent population of 45,000.
The City's population increases by approximately 30,000 during its peak season, for a
seasonal population of approximately 75,000.
The City of Palm Springs anticipates using Federal Highways Administration (FHWA) funding
for Federal Fiscal Year 2006/2007 in the amount of $1,568,375.00. The following represents
the City's projected FHWA funded, projects, contracts and expenditures:
1. Federal Project No.:BRLS 5282 (pend)
Project Name: S. Palm Canyon Drive/Arenas Canyon South Drainage Channel,
Low Water Crossing Bridge Replacement
Project Limits: South Palm Canyon Drive at Bogert Trail
FY 06/07 Activity: Environmental and Preliminary Engineering
Federal Funding: $345,000
2. Federal Project No.:BHLO 5282 (pend)
Project Name: Bogert Trail Bridge Retrofit
Project Limits: Bogert Trail at Palm Canyon Wash
FY 06/07 Activity: Environmental and Preliminary Engineering
Federal Funding: $320,000
3. Federal Project No.:STPL 5282 (pend)
Project Name: Arterial Pavement Rehabilitation
Project Limits: Golf Club Drive, Ave. 34 to E. Palm Canyon Dr.
Avenue 34 from Golf Club Dr. to east end
Indian Avenue from 20th Avenue to north City limits
FY 06/07 Activity: Construction
Federal Funding: $488,700
4. Federal Project No.:ER 4211 (004)
Project Name: Golf Club Drive Culvert Rehabilitation
Project Limits: Golf Club Drive at Palm Canyon Wash
FY 06/07 Activity: Construction
Federal Funding: $414,675
Work Category NAICS Code
Highway & Street Construction 23411
Engineering Services 54133
Surveying & Mapping 54137
Environmental Consulting Services 54162
Work Category NAICS Category Estimated Dollar Value % Federal Funding
FY 2006/2007
Consulting Services 54133/54137/54162 $665,000.00 42.40%
Construction 23411 $903,375.00 57.60%
The City of Palm Springs historically receives the vast majority of its proposals for professional
consulting services and bids from construction contractors within the Riverside/San Bernardino
statistical area. Subsequently, the City has determined the Riverside and San Bernardino
County geographical boundaries be used for the purpose of calculating its AADPL for FY
2006/2007. The following calculations are based upon the Caltrans DBE Directory of certified
firms (filtered to represent only DBEs within the Riverside and San Bernardino Counties) and
the Census Bureau's Business Pattern Database (CBPs) for the same areas.
Calculation
(0.4240) x [(DBE's in NAICS 54133/54137/54162) _ (CBP's in NAICS 54133/54137/54162))]
(0.5760) x [(DBE's in NAICS 23411) _ (CBP's in NAICS 23411)]
{ (0.4240) x [ (25) _ (528) ] + (0.5760) x [ (15) -_ (117) ] }
0.0201 + 0.0738
0.0939
AADPL = (0.0939) x 100 = 9.39 = 9.5%
The City of Palm Springs has elected not to adjust the AADPL of 9.5% during Fiscal Year
2006/2007. The base figure may be adjusted in future Fiscal Years as project specific data
becomes available.
Disadvantaged Business Enterprise Liaison Officer (DBELO)
Marcus L. Fuller, Assistant Director of Public Works/Assistant City Engineer
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
(760) 323-8253, extension 8744
marcusf@ci.palm-springs.ca.us
Prompt Pay
Federal regulation (49 CFR 26.29) requires one of three methods be used in federal-aid
contracts to ensure prompt and full payment of any retainage, kept by the prime contractor or
subcontractor, to a subcontractor. The City of Palm Springs has identified on the following
Attachment the method by which it will ensure prompt payment for Fiscal Year 2006/2007.
Submitted by:
City of Palm Springs Date
Director of Public Works/City Engineer
David J. Barakian (760) 323-8253, ext. 8732
(Printed Name) Phone Number
Reviewed by Caltrans:
Caltrans District Local Assistance Engineer Date
ATTACHMENT
Prompt Payment of Withheld Funds to Subcontractors
Federal regulation (49 CFR 26.29) requires one of the following three methods be used in
federal-aid contracts to ensure prompt and full payment of any retainage kept by the prime
contractor or subcontractor to a subcontractor.
Please check the box of the method chosen by the local agency to ensure prompt and full
payment of any retainage.
❑ No retainage will be held by the agency from progress payments due to the prime contractor.
Prime contractors and subcontractors are prohibited from holding retainage from subcontractors.
Any delay or postponement of payment may take place only for good cause and with the agency's
prior written approval. Any violation of these provisions shall subject the violating contractor or
subcontractor to the penalties, sanctions, and other remedies specified in Section 7108.5 of the
California Business and Professions Code. This requirement shall not be construed to limit or
impair any contractual, administrative, or judicial remedies, otherwise available to the contractor
or subcontractor in the event of a dispute involving late payment or nonpayment by the contractor,
deficient subcontractor performance, and/or noncompliance by a subcontractor. This clause
applies to both DBE and non-DBE subcontractors
❑ No retainage will be held by the agency from progress payments due the prime contractor. Any
retainage kept by the prime contractor or by a subcontractor must be paid in full to the earning
subcontractor in 30-days after the subcontractor's work is satisfactorily completed. Any delay or
postponement of payment may take place only for good cause and with the agency's prior written
approval. Any violation of these provisions shall subject the violating contractor or subcontractor
to the penalties, sanctions, and remedies specified in Section 7108.5 of the California Business
and Professions Code. This requirement shall not be construed to limit or impair any contractual,
administrative, or judicial remedies, otherwise available to the contractor or subcontractor in the
event: of a dispute involving late payment or nonpayment by the contractor, deficient subcontractor
performance, and/or noncompliance by a subcontractor. This clause applies to both DBE and
non-DBE subcontractors.
The agency shall hold retainage from the prime contractor and shall make prompt and regular
incremental acceptances of portions, as determined by the agency of the contract work and pay
retainage to the prime contractor based on these acceptances. The prime contractor or
subcontractor shall return all monies withheld in retention from all subcontractors within 30 days
after receiving payment for work satisfactorily completed and accepted including incremental
acceptances of portions of the contract work by the agency. Any delay or postponement of
payment may take place only for good cause and with the agency's prior written approval. Any
violation of these provisions shall subject the violating prime contractor to the penalties, sanctions,
and other remedies specified in Section 7108.5 of the California Business Professions Code. This
requirement shall not be construed to limit or impair any contractual, administrative, or judicial
remedies otherwise available to the contractor or subcontractor in the event of: a dispute involving
late payment or nonpayment by the contractor; deficient subcontractor performance and/or
noncompliance by a subcontractor. This clause applies to both DBE and non-DBE subcontractors.
ATTACHMENT 4
RESOLUTION
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF PALM SPRINGS, CALIFORNIA, APPROVING
AGREEMENT NO. , THE DISADVANTAGED
BUSINESS ENTERPRISE RACE-NEUTRAL
IMPLEMENTATION AGREEMENT WITH THE
CALIFORNIA DEPARTMENT OF TRANSPORTATION
(CALTRANS)
WHEREAS, the City of Palm Springs receives federal-aid from the U.S. Department of
Transportation, Federal Highway Administration (FHWA), for construction of a variety of
regional and local highway construction projects; and
WHEREAS, Title 49 "Transportation", Part 26 "Participation by Disadvantaged Business
Enterprises in Department of Transportation Financial Assistance Programs" of the U.S.
Code of Federal Regulations (49 CFR Part 26), requires that Disadvantaged Business
Enterprise (DBE) Programs be used to promote the use of minority owned and small
businesses in federal-aid projects funded by the Department of Transportation; and
WHEREAS, the Department of Public Works and Engineering of the City of Palm
Springs (Department) receives federal-aid from the FHWA, and is subject to 49 CFR
Part 26; and
WHEREAS, the Department is considered a "sub-recipient" of federal-aid from the
FHWA, as federal funds from the FHWA are distributed to each state through their
respective Department of Transportation; and
WHEREAS, the California Department of Transportation (Caltrans) is the direct recipient
of federal funds from the FHWA in California, and subsequently distributes to the City
through the Department its federal funds allocated or otherwise granted to it for FHWA
federal-aid projects in the City of Palm Springs; and
WHEREAS, the Ninth Circuit Court of Appeals ruled in Western States Paving Co, Inc v.
Washington State Department of Transportation et at that the Washington State
Department of Transportation (WDOT) DBE Program was not narrowly tailored as
required by 49 CFR Part 26, and that its DBE Program lacked evidence of
discrimination supporting its race-conscious DBE goals; and
WHEREAS, the Ninth Circuit Court of Appeals ruling affects states within the 9th
Federal Judicial Circuit, including: California, Oregon, Washington, Alaska, Arizona,
Idaho, Montana, Nevada, and Hawaii; and
WHEREAS, Caltrans gathered and considered past disparity studies, comments, and
written evidence received during a 90-day public comment period ending March 20,
2006, to determine whether or not there is the existence of discrimination in the highway
Resolution No.
Page 6
contracting industry that supports the use of race-conscious DBE goals in the state of
California; and
WHEREAS, after Caltrans' review of its DBE Program and the information evaluated
and received during its 90-day public comment period, Caltrans determined that the
data lacks sufficient evidence to satisfy the strict scrutiny and newly-established
evidentiary standards set forth by the Ninth Circuit Court of Appeals in order to continue
with a race-conscious DBE Program; and
WHEREAS, on May 1, 2006, Caltrans notified the FHWA and all sub-recipients of
FHWA federal funds from Caltrans of its determination, and that effective May 1, 2006,
Caltrans and all sub-recipients of FHWA federal funds from Caltrans must implement a
GIBE race-neutral program, pending the results of a more comprehensive study of the
facts; and
WHEREAS, pursuant to its implementation of a race-neutral DBE Program, Caltrans
requires sub-recipients of FHWA federal funds from Caltrans to enter into an
Implementation Agreement with Caltrans, agreeing to follow the Caltrans Race-Neutral
Disadvantaged Business Enterprise Program for the state of California.
THE CITY COUNCIL OF THE CITY OF PALM SPRINGS DOES HEREBY RESOLVE
AS FOLLOWS:
Section 1. The Disadvantaged Business Enterprise Race-Neutral Implementation
Agreement between the City of Palm Springs and the California Department of
Transportation (Caltrans) is hereby approved. The City Attorney shall approve as to
form, pursuant to the findings and requirements made by Caltrans, and the City
Manager is hereby authorized to execute the Agreement, as attested by the City Clerk.
Section 2. The Director of Public Works/City Engineer is hereby authorized to
prepare and execute the City's Annual Anticipated DBE Participation Level (AADPL), as
required by and in accordance with the Caltrans Local Assistance Procedures Manual,
Exhibit 9-13, "Local Agency DBE Annual Submittal Form", for the 2006/2007 and
subsequent fiscal years.
Section 3. The Director of Public Works/City Engineer is hereby authorized to
execute and approve on behalf of the City, subsequent Implementation Agreements, or
other annual Disadvantaged Business Enterprise Agreements as required by Caltrans
to satisfy 49 CFR Part 26, as may be determined in the future by further findings made
by Caltrans, other state Departments of Transportation, or other judicial rulings with
regard to the use of race-conscious and/or race-neutral goals in federally funded
highway construction projects.
Resolution No.
Page 7
ADOPTED THIS 7th day of June, 2006.
David H. Ready, City Manager
ATTEST:
James Thompson, City Clerk
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.
CITY OF PALM SPRINGS )
I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that
Resolution No. is a full, true and correct copy, and was duly adopted at a regular
meeting of the City Council of the City of Palm Springs on June 7, 2006, by the following
vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
James Thompson, City Clerk
City of Palm Springs, California
PROOF OF PUBLICATION r This Is space for County Clerk's riling Stamp
(2015.5.C.C.P) 8: ,q
i A r u,
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STATE OF CALIFORNIA
County of Riverside
I am a citizen of the United States and a resident of Proof of Publication of
the County aforesaid;f am over the age of eight:en --------....................
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years,and not a party to or interested in the
above-entitled matter.I am the principal clerk of a
printer of the,DESERT SUN PUBLISHING
COMPANY a newspaper of general circulation,
printed and published in the city of Palm Springs, No 2215
County of Riverside,and which newspaper has been PALM SPRINGS INTERNATIONAL AINPOAT
adjudged a newspaper of general circulation by the Pr 2007 DOE GOALS
Superior Court of the County of Riverside,State of Pslrn 3phn9s Inrei nauonal Airport h.�s estabgshed
California under the date of March 24, 1988.Case in overall goal of 3 oV,tar Participation by pisad.
vanla0vd eu••ness Gnterprlse;: in Department of
Number 191236;that the notice,of which the Tr?nsporlahon-a-y,uted Proi3= tar fiscal ea
2007. gequeslr for The proposed goal and raytlp-
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annexed is a printed copy(set in type not smaller nale are available To the public by writing ro
than non pariel,has been published in each regular nor. Steven zohr n.A E.
and entire issue afraid newspaper and not in any Palm spans D leitmotif Aviation Lion
Arport
supplement thereof on the following dates,to wit: 'stop E. Tahquru-canyyon wayy Sum DFc
Palm Springs Call ornla a2p63-2742
Fax S (780) 318.3e15
July 13"',2006 Steve7Ptci.palm-springs ca us
public comment will be accup;ed m writing until
—^...--'"-'"................................."---"""- Ap,lusT 27, 2006, at the ;yme arldras�.
Published: 7/13/2006
All in the year200G — ----- — ^ — -- ----
I certify(or declare)under penalty of perjury that the
foregoing is true and correct.
Dated at Palm Springs,California this---13"',---day
of-----July-- ---------- ------,2006
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