federal aviation administration 49 cfr part 26 dbe overview 2009 national dbe conference faa office...

Federal AviationAdministration

49 CFR Part 26 DBE Overview

2009 National DBE Conference

FAA Office of Civil Rights“We are who we serve”

2009 National DBE Conference2Federal Aviation

Administration

Overview of Current DBE Regulations

e-CFR version of the regulations consolidates the entire text of 49 CFR, Part 26; the June 29, 1999 Technical Correction to the DBE Rule; the November 2000 Interim Final Rule; and the June 2003 Final Rule into one document.

http://ecfr.gpoaccess.gov


Administration

Objectives of the DBE Program

• To ensure nondiscrimination in the award and administration of DOT-assisted contracts in the Department’s highway, transit, and airport financial assistance programs;

• To create a level playing field on which DBEs can compete fairly for DOT-assisted contracts;

• To ensure that the Department’s DBE program is narrowly tailored in accordance with applicable law;

• To ensure that only firms that fully meet this part’s eligibility standards are permitted to oparticipate as DBEs;


Administration

Objectives of the DBE Program, cont’d

• 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 marketplace outside the DBE program; and

• To provide appropriate flexibility to recipients of Federal financial assistance in establishing and providing opportunities for DBEs.


Administration

Changes to the Regulations(Are you Staying Current?)

Regulations

Section

Change

Definitions SIC v. NAICS

26.5 Contract also means lease

26.11(c) Clarified bidders’ list

26.21(1)(2) Clarified threshold for program


Administration

Changes to the Regulations(Are You Staying Current?)

Regulation

Section

Change

26.29 Prompt – 30 days / Retainage changes

26.37 Modified monitoring requirements

26.67(a)(2) Clarified PNW issues

26.67(c) SBA certification changes


Administration

Changes to the Regulations(Are You Staying Current?)

Regulation

Section

Change

26.83(c)(7)(1) New application form

26.84 Added DOT / SBA MOU

26.109(a)(2) Expanded confidentiality

Appendix B New reporting form


Administration

Who Must Have a DBE Program?Section 26.21

FAA recipients receiving grants for airport planning or development who will award prime contracts exceeding $250,000 in FAA funds in a Federal fiscal year.


Administration

DBE in General

• Title VI concept– Recipients prohibited from race, color, or

national origin discrimination

• Adarand Constructors v. Pena, 515 U.S. 200, 235, (1995) requires “strict scrutiny”

– Compelling governmental interest– Narrow tailoring (i.e. goal-setting)


Administration

DBE In General (Cont.)

• 49 CFR Part 26:

– DOT (i.e. FHWA, FTA, & FAA) DBE program for recipient contracting

• 49 CFR Part 23:

– FAA DBE program for airport concessions


Administration

Contracting (49 CFR Part 26)

• FAA distributes about $3.4 billion annually in AIP grants to help finance airport construction projects.

• 3,300 airports are eligible for AIP grants for airport planning & development.

• FAA has a policy of ensuring that socially and economically disadvantaged businesses are able to participate in contracting opportunities created by AIP grants.


Administration

Certification (Cont.)

• Firms must also meet separate SBA small business size standards for their type of business.

• Certain groups are rebuttably presumed to be socially and economically disadvantaged. These include Native Americans, Blacks, Hispanics, Asian-Pacific Americans, Subcontinent Asian Americans, & Women.

• Each disadvantaged individual seeking certification for his or her firm must submit a notarized certification of disadvantage and a statement of personal net worth.


Administration

Certification (Cont.)

• Ownership and control requirements provide detailed, specific, clarified standards for determining whether to certify firms.

• Each state has a Unified Certification Program (UCP) that certifies DBEs for all DOT recipients in their state. (One-Stop-Shopping)


Administration

DBE Accomplishments

• General rule [49 CFR § 26.55]

– DBE credit is awarded only for work performed by DBE firms with their own forces

– DBE participation under Part 23 is counted in the same way as it is under Part 26


Administration

DBE Participation Reports

• Furthermore, our civil rights staff must compile reports of actual DBE participation in contracting and by airport concessions.

• “DOORS” program• Airports must submit DBE participation reports

to FAA: – Part 26 reports are due December 1 – Part 23 reports are due March 1


Administration

General – Stakeholder Meetings

• FAA Headquarters staff holds monthly Airport DBE Stakeholder Meetings to discuss issues of common concern to the DBE community and to provide updates on FAA and DOT activities.

• Attendees typically include representatives from FAA Civil Rights and Counsel, DOT Civil Rights and Counsel, AMAC, AAAE, ACI, as well as national car rental and non-car rental concessionaires local airports and consultants.


Administration

Part 26 – Western States Paving

• Western States Paving v. Washington State DOT, et al., 407 F3d 983 (9th Cir, May 9, 2005)

• 9th Circuit panel held that DOT’s Part 26 contracting regulations were constitutional, but found that the Washington State DOT DBE program was unconstitutional as applied.

• The court concluded that Washington State DOT’s DBE program was not narrowly tailored because the evidence of discrimination supporting its application was inadequate, including that Washington State DOT had not conducted statistical studies to establish the existence of discrimination in the highway contracting industry that were completed or valid.


Administration

Part 26 – Western States

• Questions and Answers Concerning Response to Western States Paving Company: http://www.fhwa.dot.gov/civilrights/dbe_memo_a5.htm

• Guidance applicable only to recipients in the 9th Circuit for Part 26 DBE Programs– Have evidence to support Race-Conscious Goal or– Submit Race-Neutral Program and

• Gather necessary evidence, may include disparity or availability study and

• Develop action plan for a disparity/availability study


Administration

Part 26 – Study Reimbursement

– DOT’s Western States guidance explains that the costs of conducting disparity studies are reimbursable from Federal program funds, subject to the availability of those funds.

– For FAA recipients, disparity studies are generally funded as a planning study, and have the same eligibility and performance requirements of other planning studies, although their priority for reimbursement is relatively low.

– However, for recipients in 9th Circuit, if a disparity study is required in order to complete allowable AIP project work, then the study is considered an allowable cost of the project and has the same priority for reimbursement as the project.


Administration

Part 26 – Northern Contracting

Northern Contracting, Inc. v. State of Illinois, et al., 473 F3d 715, (7th Cir, January 8, 2007

• Northern Contracting challenged IDOT’s DBE Program in Federal District Court & sued USDOT

– claiming it was unconstitutional


Administration

Components of 49 CFR Part 26

• Subpart A – General Information

• Subpart B – Administrative Requirements for DBE Programs for Federally-Assisted Contracting

• Subpart C – Goals, Good Faith Efforts, and Counting


Administration

Components of 49 CFR Part 26

• Subpart D – Certification Standards

• Subpart E – Certification Procedures

• Subpart F – Compliance and Enforcement


Administration

Table of Content – 49 CFR Part 26Subpart A—General

§ 26.1 What are the objectives of this part? § 26.3 To whom does this part apply? § 26.5 What do the terms used in this part mean? § 26.7 What discriminatory actions are forbidden? § 26.9 How does the Department issue guidance and interpretations under this part? § 26.11 What records do recipients keep and report? § 26.13 What assurances must recipients and contractors make? § 26.15 How can recipients apply for exemptions or waivers?


Administration

Table of Content - 49 CFR Part 26Subpart B—Administrative Requirements for DBE Programs for Federally-Assisted Contracting

§ 26.21 Who must have a DBE program? § 26.23 What is the requirement for a policy statement? § 26.25 What is the requirement for a liaison officer? § 26.27 What efforts must recipients make concerning DBE financial institutions? § 26.29 What prompt payment mechanisms must recipients have? § 26.31 What requirements pertain to the DBE directory? § 26.33 What steps must a recipient take to address overconcentration of DBEs in certain types of work?


Administration

Table of Content – 49 CFR Part 26

§ 26.35 What role do business development and mentor-protégé programs have in the DBE program? § 26.37 What are a recipient's responsibilities for monitoring the performance of other program participants?


Administration

Table of Content, 49 CFR Part 26

Subpart C—Goals, Good Faith Efforts, and Counting

§ 26.41 What is the role of the statutory 10 percent goal in this program? § 26.43 Can recipients use set-asides or quotas as part of this program? § 26.45 How do recipients set overall goals? § 26.47 Can recipients be penalized for failing to meet overall goals? § 26.49 How are overall goals established for transit vehicle manufacturers?


Administration


§ 26.51 What means do recipients use to meet overall goals? § 26.53 What are the good faith efforts procedures recipients follow in situations where there are contract goals? § 26.55 How is DBE participation counted toward goals?


Administration

Table of Content – 49 CFR Part 26Subpart D—Certification Standards

§ 26.61 How are burdens of proof allocated in the certification process? § 26.63 What rules govern group membership determinations? § 26.65 What rules govern business size determinations? § 26.67 What rules determine social and economic disadvantage? § 26.69 What rules govern determinations of ownership? § 26.71 What rules govern determinations concerning control? § 26.73 What are other rules affecting certification?


Administration


Subpart E—Certification Procedures

§ 26.81 What are the requirements for Unified Certification Programs?§ 26.83 What procedures do recipients follow in making certification decisions?§ 26.84 How do recipients process applications submitted pursuant to the DOT/SBA MOU?§ 26.85 How do recipients respond to requests from DBE-certified firms or the SBA made pursuant to the DOT/SBA MOU?


Administration

Table of Contents – 49 CFR Part 26

§ 26.86 What rules govern recipients' denials of initial requests for certification?§ 26.87 What procedures does a recipient use to remove a DBE's eligibility?§ 26.89 What is the process for certification appeals to the Department of Transportation?§ 26.91 What actions do recipients take following DOT certification appeal decisions?


Administration


Subpart F—Compliance and Enforcement§ 26.101 What compliance procedures apply to recipients?§ 26.103 What enforcement actions apply in FHWA and FTA programs?§ 26.105 What enforcement actions apply in FAA programs?§ 26.107 What enforcement actions apply to firms participating in the DBE program?§ 26.109 What are the rules governing information, confidentiality, cooperation, and intimidation or retaliation?


Administration


• Appendix A to Part 26—Guidance Concerning Good Faith Efforts

• Appendix B to Part 26—Uniform Report of DBE Awards or Commitments and Payments Form

• Appendix C to Part 26—DBE Business Development Program Guidelines

• Appendix D to Part 26—Mentor-Protégé Program Guidelines

• Appendix E to Part 26—Individual Determinations of Social and Economic Disadvantage

• Appendix F to Part 26—Uniform Certification Application Form


Administration

Sample Goal Submittal Timeline

April 15

Identify

Opportunities

May 1

Identify DBEs & Non-DBEs

May 30

Consultation

Process

June15

Advertise

Goals

August 1

Submit Goal


Administration

Questions?

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