Transportation Research Board 94 th Annual Meeting Session 409 Simplifying the DBE Final Rule: The View from the Private Sector Colette Holt Attorney at Law Colette Holt & Associates 12 January 2015
Certification - Economic disadvantage - Ability to accumulate substantial wealth test adds one more factor - Will agencies use this? - Control - Shift to the presumption that a former owner is in control may impact minorities’ & women’s ability to buy into existing firms - Impact on capacity & scale? - Prequalification disconnected from certification - Does it matter without change in prequal standards? Colette Holt & Associates
Good Faith Efforts - Compliance as a matter of responsiveness or responsibility - Bid day chaos - 5 day limit to submit compliance information - Plenty of time to bid shop - Longer is problematic for recipients so what does this change? - Suggestion: COB of bid day Colette Holt & Associates
Good Faith Efforts, cont. - NAICS codes - What about multiple codes? - Time for DBE solicitation - What does “practicable” mean? - Should recipient set a timeframe? - Role of price - No quantitative formulas BUT - Can't reject only because of price UNLESS “unreasonable” - Who eats increased costs of substitutions? Litigation risk? - Performance of other bidders = self-fulfilling standard? Colette Holt & Associates
Good Faith Efforts, cont. - Assistance to DBEs - No new standards or guidance - What is acceptable while maintaining the DBE’s independence? - Equipment - Personnel - Blurred roles - “Payroll jumping”? - Suppliers - Joint checks? - Price negotiations? Colette Holt & Associates
Additional Program Issues - Counting joint venture participation - Fee & conditions of the JV prime contractor - Increasing the utility of JVs - Counting race-neutral participation - Deletes reference to “strict low bid system” - Utilization in excess of the contract goal - Contract goal as the cause of utilization - Goal setting is not a science & conditions change during performance - Effect on the projection of future race-neutral participation Colette Holt & Associates
Additional Issues for Future Rulemaking or Guidance - Proliferation of sham joint ventures - Inadequate commercially useful function reviews - DBELO reporting to CEO on paper only - Inadequate staff resources & training - Inconsistent regional & modal guidance - Imposition of penalties for poor program administration - Criminal prosecutions filling the void - Commercially useful function investigations indictments - Lack of expertise of prosecutors confusion of program standards Colette Holt & Associates 7
Colette Holt 3350 Brunell Drive Oakland, CA 94619 773. 255. 6844 colette. holt@mwbelaw. com @mwbelaw Colette Holt & Associates 8
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