City of Phoenix

1. City of Phoenix Job Order Contracts September 18, 2012

2. Welcome and Introductions

3. SBE Oversight Committee • Ricardo Carlo • Executive Director, • Arizona Minority • Contractors Association • Wylie Bearup, PhD, • City Engineer • Amanda McGennis, Chair • Vice President of Urban Affairs • Arizona Chapter, Associated • General Contractors • Lionel D. Lyons • Equal Opportunity Director • Crystal Castrogiovanni • President, Phoenix • Pipelines • Robert Esquivel • Supplier & Diversity Manager, • APS

4. SBE Goals on Job Order Contract Monitoring Contracts SBE Program requirements Semi-annual and Annual Goal review process Required Documents Counting SBE participation Demonstration of Good Faith Effort Requirements Status of Non-compliant Contract closure: Bringing it all together Objectives

5. Goals are established by the City of Phoenix Goal Setting Committee JOC Goals are required to be met on an annual basis Goals are based on the number of certified SBE firms available in each of the specified trade areas identified in the project specs. Trade areas with less than 3 certified SBE firms are not considered in the calculation of the overall goal The SBE Contract Goal:

6. Monitoring Contracts for SBE Compliance • Starts with attending the Preconstruction or Kick-off • Meeting! • Confirming Prime’s adherence to SBE Program • Requirements • Conducting semi-annual and annual • goals compliance reviews to • determine actual SBE utilization • Reviewing the scopes of work performed • by all SBE firms working on the contract N-N

7. SBE Program Requirements • The Contract Compliance Section must be informed, in writing, in advance of the following: • Any reductions in the scope of work to be performed by all proposed SBE subcontractors • Any changes in the proposed SBE’s contract resulting in a reduced dollar amount • Any issues concerning the proposed SBE subcontractors • The prime contractor must complete a Request for Exemption Form and have the approval of the Contract Compliance Office prior to the replacement or release of a proposed SBE firm. O-O

8. Required SBE Information Primes are required to submit the following information within 15 days of the notice to proceed date for each Job Order Agreement or Amendment: • A JOC Statement of Proposed SBE Utilization form • Signed copies of all contracts and or purchase orders with the proposed SBE subcontractors and suppliers that are to be utilized on the Agreement • A list of all subcontractors and suppliers (SBE and non- SBE) with their respective contract values and trade areas. This list should be provided on the prime contractor’s letterhead • Letters of Intent or original subcontractor proposals may be requested at any time O-O

9. Goal compliance reviews will be conducted each year following the established effective date of the contract. The City may conduct an informal semi-annual review to determine the level of SBE participation that is occurring on a contract. The Prime will be required to submit information to confirm the SBE utilization reported on the contract. Formal letters will follow the completion of each review. Annual Goal Compliance Reviews:

10. Copies of all SBE invoices, subcontract and/or purchase order agreements Copy of completed JOC Subcontractor Utilization Summary form Copy of the latest JOC SBE Utilization Report Any other documentation the City may deem appropriate to effectively monitor the contract for SBE compliance Documentation Required for Annual Goal Compliance Reviews:

11. Counting SBE Participation • Subcontractors must be certified as an SBE by the City of Phoenix in the proposed scope of work. • SBE firms are required to manage and control the work for which they are contracted. • Management shall include scheduling work operations, ordering equipment and materials, preparing and submitting payrolls and hiring and firing employees. • Use of the prime contractor's personnel and equipment by the SBE subcontractor to complete work on this project will not be accepted. • SBE subcontractors must perform a commercially useful function: Perform a minimum of SBE 75% of its subcontract agreement with their own workforce and equipment. O-O

12. Trucking and Hauling • The SBE must be responsible for the management and supervision of the entire trucking operation for which it has been subcontracted. There cannot be a contrived arrangement for the purpose of meeting the SBE goal. • The SBE must itself own and operate at least one fully licensed, insured, and operational truck used on the contract. • The SBE 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. O-O

13. Trucking and Hauling • Primes may count the full value of the trucks the SBE leases on a long term basis (6 months or more) from another SBE firm, including an owner-operator who is certified as a SBE. • Primes may count the full value of the trucks the SBE leases on a long term basis (6 months or more) from a non-SBE firm, provided the value of services performed by the non-SBE leased trucks does not to exceed the value of transportation services provided by the SBE-owned and SBE-leased trucks on the contract. O-O

14. Demonstration of Good Faith Efforts • Proof of contact with SBE firms (e.g. fax logs, telephone logs, mail receipts, etc) including documentation of the dates of contact, and the name and phone number of the SBE representative contacted. • Solicitation of SBE subcontractors must be consistent with the solicitation of all subcontractors and must clearly demonstrate that SBE firms had sufficient time to submit an effective response. • Copies of the documents submitted to all subcontractors requesting their bid. This should include the scope of work to be bid and performed on the project.

15. Demonstration of Good Faith Efforts • Copies of bid responses/quotes from all subcontractors who bid to perform work on the project in the areas that SBE firms were also bidding on, including information as to why SBE bids were not considered. • Documentation that shows efforts made to provide assistance to SBE firms in the areas of bonding, insurance, or other contracting requirements. • Documentation of contact made with City personnel seeking assistance in identifying eligible SBE firms for contracting opportunities on the project.

16. Status of Non-Compliance A Contractor may be deemed non-compliant as a result of any the following: • Failing to comply with City requests in a timely manner • Failing to meet the annual contract goal without demonstrating sufficient good faith efforts for obtaining SBE participation • Committing a violation of any of the SBE Program requirements

17. Status of Non-Compliance A non-compliant status means that the Contractor is not in good standing with the City. In essence: • A non-compliant status shall result in the rejection of all future contract bids or offers for all projects or other procurements with the City until such time that the contractor has cured its breaches and demonstrates that it has faithfully performed its approved SBE utilization plan and all other provisions of this article required to be deemed in good standing.

18. Bringing it all together • Invoices • Retention in Job Order Contracts • Payment Verification • Listing of all SBE firms who participated on the project • Final audit of the file and summary

19. Invoices are required for all trades that typically invoice, rather than having set scopes of work in contracts. This includes such trades as professional services, law enforcement and trucking, but may include others.

20. Withholding Retention? • JOC Contractors maynot withhold retention from its subcontractors. In cases where the City withholds retention from contractors on job order contracts, the contractor must comply with the following: • If the City reduces retention on the prime contract, retention must be reduced at the same rate to the subcontractors. The prime contractor has 14 days from the date their retention reduction takes affect to return (reduce) retention to the subcontractors. • The prime must return retention monies to subcontractors at such time as the work of the subcontractor is complete and the purchaser (City) has accepted the work and paid the prime for the work performed by the subcontractor. Retention shall be paid no later than 30 days after such payment is made by the City. T-F

21. Certification of Payment ← City form used for SBE projects T-F

22. Remedies & Sanctions √ Withholding ten percent (10%) of all future payments for the project until it is determined that you are in compliance. √ Withholding of all future payments for the project until it is determined that you are in compliance. √ Rejection of all future bids or offers from the contractor for any eligible project with the City or any of its departments or divisions for a period of (1) year after completion of this contract. √ Cancellation of the project. F-V

23. Summary Letter This project was recently reviewed as part of an audit of projects closed by the City Equal Opportunity Department (EOD). This letter is to inform you that your firm has / did not satisfactorily complete/d the ____ Business Enterprise (SBE) requirements for this project as required by the contract. It also confirms receipt of the Final Certification of Payment to the SBE firm(s) and provides a summary of the SBE goals achieved on this project. This project contained a ___% required SBE goal._________ Construction submitted a proposed SBE goal of ____%. The actual SBE utilization achieved was _____% amounting to $_________ of the total contract amount. T-F

24. The following facts are pertinent to this project: Good Faith Efforts

25. The following facts are pertinent to this project SBE __________ was replaced without notification and/or approval of the Equal Opportunity Department in violation of your contract. The full amount of proposed utilization could not be counted for ______. Although _____ is licensed as a general contractor, they could only be counted for the trade areas that they hold SBE certification for. The actual final contract with ____ for all trade areas was $_____________. Inconsistencies in ______ reporting were addressed during the course of this contract and included billing for work not done, and holding retention inconsistent with the City.

26. October __,___ (Meeting) Non-responsive to requests for information (executed subcontracts, list of all subcontractors and suppliers) November __,___ (Complaint) Failure to follow Prompt Payment Statute November __, __ (Meeting) Failure to provide copies of executed subcontracts for SBE subcontractors January __, ____ (Written notice) Prompt Payment Dispute Resolution April __,____ (Meeting) Prompt Payment Dispute Resolution ( ___ attempting to enforce 30-day payment clauses in their subcontracts. These subcontract clauses were in breach of the seven-day prompt payment clause found in _______’s contract July __, ____ (Meeting) Records indicate false reports of full payment to subcontractor _______ by ______, failure to request a reduction in the SBE contract, and failure to report an issue with an SBE subcontractor in breach of contract.

27. Prime and subcontractors may be required to respond to audits of both federally and locally funded projects on a random basis, after the project is completed. We recommend that supporting documentation be maintained for at least five years following completion of contract. • Please be advised that any dollars added to this contract after EOD closure will be subject to the original goal. In the event your contract is increased after EOD closure; your firm will be required to notify our office.

28. Questions J-O