FHWA Office of Civil Rights

1. FHWA Office of Civil Rights DBE Program Administration and Oversight on Projects with Alternative Contracting Methods Handbook

2. Presentation Team Martha Kenley FHWA DBE Program Team Leader Christine Thorkildsen FHWA Civil Rights Program Manager New York Division

3. Background • Many questions from the field • How to apply DBE regs in ACM?? • HCR/HCC was addressing one by one • We needed a Handbook • Compilation of best practices/lessons learned • Not guidance or requirements – Just some good ideas!

4. Background • Workgroup: Offices of Civil Rights, Chief Counsel, Resource Center, Divisions, Infrastructure • ACM DBE oversight from pre-award to completion • Best practices/Lessons learned • 19 projects – large and small • RC and RN DBE programs • Interviews/review of contract documents • Fully reviewed by appropriate program areas, Chief Counsel and USDOT

5. Status of the Handbook • Content is complete • Needs “cosmetic improvements” • Issued summer 2018 • Will provide: • learning development opportunities • Practical application (peer exchanges/technical assistance)

6. Outline of Handbook • Background, summary tables and links to key terms and the projects • Pre-Award • Goal setting • Contract documents • Outreach/Education • Post Award • Monitoring • CUF/GFE/Prompt Pay/Reporting • Outreach • Final Acceptance • Documentation

7. What is Alternative Contracting?? • How the project is procured, designed and built • Anything other than design-bid-build • New contracting methods as we speak • No matter what method, keep with the intention of DBE regs

8. Design-Build • One entity • Single contract • Design & construction • Best value • Award at minimal design

9. Construction Manager General Contractor (CM/GC) • Also known as CMAR (Construction Manager at risk) • Construction Manager hired at design phase • Constructability input • Helps owner design a constructible project • ~75% design owner & CM negotiate GMP • If acceptable CM →General Contractor • Similar procurement and contracting as D-B-B

10. Private Public Partnerships (P3) • Contractual agreement between public and private entity • Brings in creativity, efficiency and capital • Transfer responsibility to the Developer or Concessionaire to: design/build/finance/operate/maintain • P3 could be a 40 yr+ project • Non-traditional partners

11. Alternative Financing • Transportation Investment Generating Economic Recovery (TIGER) • Transportation Infrastructure Finance and Innovation Act (TIFIA) • Private Public Partnerships (PPP)

12. Discussion on Transfer of Risk • Benefit of ACM for recipient is transfer of risk for design/construction • This is not true for civil rights compliance responsibilities • Recipient bears responsibility to ensure DBE program receives effective oversight

13. DBE and Alternative Contracting Alternative Contracting challenges: • Ensuring intent of regulatory requirements are met • DBEs have meaningful opportunities to compete • New scenarios at time of award • New partners

14. DBE Goal Setting Involve • Civil rights practitioners • All stakeholders Consider • Subcontracting opportunities • Market area • Available pool of DBEs • Public input (same considerations as setting any goal!)

15. Goal Setting Design-Build • Must consider the opportunities in design as well as construction • Consider separate goals – one for design and one for build • If D/B is not focusing on the DBE program at start of project, DBE opportunities in design could be missed

16. Considerations in Goal Setting

17. Goal Setting CM/GC • Similar to D-B-B • Goal could be set on design work if design has its own contract • Separate goal for construction • Selected proposer must submit utilization plan which meets DBE goal or show GFE why they could not

18. Goal Setting P3 • D-B-F-O-M • Projects with federal funding in operations and maintenance can set goals on that portion of the contract • Most p3 do not • Goal is set on D-B

19. Goal Setting TIGER Project • Recipients of TIGER are sometimes “non-traditional” • If awarded to STA – DBE goal • If awarded to sub-recipient thru STA – DBE goal • If awarded to directly to non-STA – NO DBE program requirements

20. Goal Setting Lessons Learned • Understand where the funding is coming from and how it is being used • Document your process to determine the goal • Use credible data • Beware of political pressure • One goal or two in D-B • Include input from stakeholders

21. Pre-Award Documents • RFQ – Request for Qualifications • ITP – Instructions to Proposers • RFP - Request for Proposals • PMP – Project Management Plan • DBEPP – DBE Program Plan

22. RFQ • Filters to a “short list” of qualified proposers • Possible factors of evaluation: • Past DBE program compliance • May notify bidders • Project will include DBE goal • DBE Plan will be required • Link to DBE directory to begin utilization plan

23. RFP • Project requirements and details – Including all DBE program requirements • Include civil rights staff in review of RFP • Most successful projects • Details of DBE requirements • Requires DBEPP at time of proposal • DBE portion of proposal is given score • Outreach events by proposer • Encourage local businesses and state’s MWBE programs

24. ITP • Projects that gave DBE portion a score • Proposer had to certify they were aware of the goal and will comply with DBE requirements • Commitment at time of award or must show GFE • Separate goals (D/B) – DBE Plan for design and 50% plan for build (or GFE)

25. DBEPP • Contractor’s Plan • Required as part of proposals or after award • Maintaining DBEPP continues thru life of project – details in RFP • Successful projects • Anticipated commitments →actual commitment • Requires types of work and dollar value expected • D-B has CR team • Monthly progress meetings • If anticipated is not achieved GFE finds another opportunite

26. PMP • Project Sponsor’s plan • Successful projects • Details of how oversight will be achieved • Data collection system • Sanctions

27. Pre-Award Findings • Not involving Civil Rights Specialists early in the contract • DBE oversight and compliance is complicated – details in contract language is essential • Projects move fast and accumulate enormous amount of data – be ready! • Watchout for tiering of subcontracting

28. Outreach • Early involvement • Partnership • Visible leadership • Transparent goal setting • Targeted outreach to meet objective • Leverage resources - DBESS

29. Post Award • Monitoring • Commercially Useful Function reviews • Prompt Payment • Good Faith Efforts • Enforcement

30. Monitoring Goal Achievement • Continual running tally • Well documented process of oversight • Utilization of sanctions when warranted • Regular meetings • Elevate importance of compliance in beginning of project

31. Innovative Program Compliance • If additional resources are necessary by the owner • Paid for by the contractor/developer • Elevates the importance of accurate, timely, complete information/documentation/data by the contractor/developer

32. CUF • Know when DBEs are working • Request “Look Ahead Schedule” in RFP • CUF final approval from public agency • Don’t make overly burdensome • May need additional resources • PE firms – same process • Use skype, internet, other resources

33. Prompt Payment • Multiple layers of subcontract tiering • Make sure electronic data system can monitor tiering • Contract structure may not pay prime regularly • Address in RFP when payments will be due to lower tiers, even when prime is not paid

34. Embracing Technology • Electronic data collections systems • RFP must require • Training • Overreliance without accessing • Specify reasonable access – prime/sponsor/subcontractors

35. Enforcement • Documentation • Lack of prompt follow-up • Timely, solid, accurate and complete monitoring→ • Effective enforcement • Motivation to fulfill DBE obligations

36. Final Acceptance & Beyond • Federal funds in operations and maintenance? • Maintain a list of lessons learned • Applying risk based approach on future projects • Serves to justify rationale for making implementing new requirements • Shared responsibility and teamwork results in an overall better project

37. DBE in Final Acceptance Keep running tally by comparing ongoing payments to commitments Use software if possible; require prime to use owner’s online reporting tool Create a documented process for certifying project-level compliance

38. DBE Challenges in ACM • Goal setting • Identifying DBEs with minimal design plans • Monitoring commitments • Determining GFE • Providing effective oversight • Working with non-traditional partners

39. DBE in Alternative Contracting Questions?