Federal DBE program rule changes
The U.S. Department of Transportation recently updated the regulations at 49 CFR part 26, which govern the federal DBE program. The changes became effective Nov. 3, 2014. We encourage you to review the revised regulations. Current regulatory language is available at www.ecfr.gov, and see the Federal Register publication announcing the change. We can’t summarize all of the changes, but we’ll mention a few of particular interest to certified DBEs and the prime contractors who work with them, especially as they relate to good faith efforts. Please feel free to address questions to MnDOT’s Office of Civil Rights.
Good Faith Efforts
- When bidders/offerors are required to submit DBE information, they must do so at the time of bid (as a matter of responsiveness) or no later than seven calendar days after bid opening (as a matter of responsibility). When the seventh calendar day falls on a weekend, federal holiday, or another day MnDOT’s offices are closed, the documentation is due the next business day. The seven calendar days will be reduced to five calendar days beginning Jan. 1, 2017.
- Bidders/offerors must include in their DBE information the most specific North American Industrial Classification System (NAICS) code(s) applicable to the kind of work each DBE will perform on the contract. The Exhibit A form will be modified to facilitate this reporting.
- New guidance includes additional examples of the kinds of actions that MnDOT may consider when evaluating the good faith efforts of a bidder/offeror. Although a bidder/offeror is not required to pay unreasonable additional costs to find and use DBEs, it will not be deemed to have made good faith efforts if it rejects a DBE simply because the DBE is not the low bidder, or simply because it is unable to find a replacement DBE at the original price. When evaluating the efforts of the low bidder to meet the contract goal, MnDOT should review the performance of other bidders relative to the goal.
- After committing to use a specified DBE, a contractor cannot terminate or replace the DBE without written approval from MnDOT. Furthermore, a contractor is not entitled to any payment for work performed or materials supplied unless the work is performed or the materials are supplied by the specified DBE or MnDOT provides written approval to terminate or replace the DBE.
- The definitions of “immediate family members” and “spouse” now include domestic partnerships and civil unions recognized under state law.
- The contract assurance language which is required to be included in each DOT-assisted contract obligates the contractor to comply with the DBE program regulations in the administration of the contract. Failure to do so may result in termination of the contract or other remedies MnDOT deems appropriate, including withholding monthly progress payments, assessing sanctions, liquidated damages, and disqualifying the contractor from future bidding as non-responsible.