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Federal Contracting Requirements March 28, 2012 CLE. Jose Ramiro Salazar and Minming Wu Morri San Francisco Bay Area Rapid Transit District (BART) Office of the General Counsel Mary Richardson Port of Oakland, Office of the Port Attorney. Overview Title VI Local Hire Buy America

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Federal Contracting Requirements March 28, 2012 CLE

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federal contracting requirements march 28 2012 cle

Federal Contracting RequirementsMarch 28, 2012 CLE

Jose Ramiro Salazar and Minming Wu MorriSan Francisco Bay Area Rapid Transit District (BART)

Office of the General Counsel

Mary RichardsonPort of Oakland, Office of the Port Attorney



  • Title VI
  • Local Hire
  • Buy America
  • Department of Transportation (DOT) Common Grant Rules, 49 CFR Part 18
  • FTA Third Party Contracting Guidance, FTA Circular 4220.1F (2013 revisions)
  • Other Federal Agency Contracting Rules
  • Today’s Focus: Two FTA contract requirements
title vi legal standards circumscribed activities protected populations and california law
Title VI Legal Standardscircumscribed activities, protected populations, and California law.
  • Disparate Treatment

Intentional discrimination on the basis of race, color, or national origin. 42 USC § 2000d et seq; Cal. Gov. Code § 11135 et seq.

  • Disparate Impact

Programs or activities “with the purpose or effect of” discrimination. 49 CFR part 21.5 (DOT); GC § 11135; 22 Cal. Code Reg. 98000; FTA Circular

  • Environmental Justice (EJ)

Minority and low-income populations. EO 12898; DOT Order on EJInclusive Public Participation

  • Limited English Proficient (LEP)

Providing English-only services may constitute national origin discrimination. EO 13166; DOT Policy Guidance; GC § 11135; 22 Cal. Code Reg. 98000; Dymally-Alatorre Bilingual Services Act

what is a title vi disparate impact
What is a Title VI disparate impact?
  • Facially neutral policy or practice that disproportionately impacts minorities
  • Lacks a substantial legitimate justification, and
  • Where less disproportionate alternatives exist that would serve the same legitimate objectives as the challenged policy or practice.
scope of authority 42 usc sec 2000d 4a
Scope of Authority42USC sec. 2000d-4a

Title VI applies institution-wide, not solely to the recipients operations receiving Federal funding.

key substantive requirements dot title vi regulations 49 cfr 21 fta circular 4702 1b
Key Substantive RequirementsDOT Title VI Regulations (49 CFR 21) & FTA Circular 4702.1B

Inclusive Public Participation (DOT-Wide)

Public Participation Plan (FTA)

Title VI Program (FTA-Specific)

Eight (8) Minimum Requirements

Title VI Equity Analysis (FTA)

Siting of Facilities

Major Service & Fare Changes

Affirmative Actions to Ensure Against Disproportionate Impacts of Programs & Activities. (DOT-Wide, 49 CFR 21.5(b)(7))

LEP Requirements (DOT-Wide)

selected sources of authority
Selected Sources of Authority

Federal & State

Recipient’s Title VI Plans, Reports, and Documents

  • 42 USC section 2000d et seq, as amended
  • Executive Order 13166; Executive Order 12898
  • 49 USC sec. 53 et seq
  • 28 CFR sec. 42; 42 USC sec 4601 et seq
  • 49 CFR sec. 21
  • DOT Order 5610.2(a)
  • DOT Policy Guidance on LEP
  • FTA Title VI Circular 4702.1B & 4703.1
  • DOJ Title VI Legal Manual
  • California Government Code sec. 11135 and implementing regulations
  • Dymally-Torres Bilingual Services Act
  • List is Not Exhaustive & Excludes Case Law
  • Agency Inclusive Public Participation Plans & Reports
  • Agency Four-Factor Language Assistance Plans
  • Agency Disparate Impact & Disproportionate Burden Policies
  • Title VI Equity Analyses
  • Demographic Reporting of Non-Elected, Transit-Related Bodies
  • Title VI Public Notice of Rights & Complaint Process
possible consequences of a title vi complaint
Possible Consequences of a Title VI complaint
  • Costly Litigation
  • Costly Settlement
  • Withdrawal of Federal Funds
  • Institution-wide Title VI Audit/Compliance Review
  • Public Relations
federal local hire restrictions
Federal Local Hire Restrictions
  • Privileges & Immunities Clause (Constitutional)
    • United Building & Construction Trades Council v. City of Camden, 465 U.S. 208 (1984).
  • Federal Restrictions
  • 49 U.S.C. Section 5325(a) and (h)
  • FTA Third Party Contracting Circular (4220.1F)
  • FTA Best Practices Procurement Manual Sec.
  • City of Cleveland v. Ohio DOT v. FHWA (508 F.3d 827 (6th Cir. 2007)
applicability of local hire provisions in federally funded contracts
Applicability of Local Hire Provisions in Federally Funded Contracts
  • Application of PLAs/PSAs on federally funded contracts has been limited by Executive Order and by interpretation of local hire provisions as “anti-competitive”
    • President George W. Bush issued Executive Orders 13202 and 13208 prohibiting use of PLAs on federally funded or assisted contracts
    • President Obama issued Executive Order 13502 which revoked the Bush-era Executive Orders but did not expressly allow for open use of PLAs on federally funded projects
applicability of local hire on federally funded port projects
Applicability of Local Hire on Federally Funded Port Projects
  • The Port of Oakland Maritime and Aviation Project Labor Agreement (MAPLA) was adopted by the Board of Port Commissioners in 2000.
    • It was intended to cover the capital projects in the Port’s Aviation and Maritime areas.
    • MAPLA was designed to ensure project labor stability and encourage employment of Port local residents
    • The MAPLA Local Hire Program continues to advance the Port’s local-hire goals. MAPLA sets specific goals for the hiring of residents from the Port’s local impact area (Oakland, Alameda, Emeryville and San Leandro) and the local business area (Alameda and Contra Costa counties)
mapla applicability on federally funded projects
MAPLA Applicability on Federally Funded Projects
  • Following the Obama Executive Order, the Port worked with DOT to obtain permission to use MAPLA
    • DOT cited federal procurement regulations prohibiting geographic preference in the award or evaluation of bids and proposals
mapla applicability of federally funded projects
MAPLA Applicability of Federally Funded Projects
  • Following several months of discussions, the DOT agreed to allow the Port to proceed with application of the MAPLA with the following exception:
    • “For purposes of this Project, which is funded through an agency or agencies of the United States Department of Transportation, the provisions of the attached Port of Oakland Maritime and Aviation Project Labor Agreement permitting the possible imposition of sanctions and/or binding arbitration for failure to demonstrate good faith efforts to meet local hire goals are hereby deemed inapplicable.”
federal grant record keeping requirements
Federal Grant/Record Keeping Requirements
  • Additional Invoice and Supporting Documentation
  • Contract Closeout and Release
  • ARRA “Jobs Created” Data
  • Quarterly and Project DBE and SBE
  • Prevailing Wage
  • Special Grant Funding Requirements for non-DOT projects
buy america requirements

Buy America Requirements

49 USC Section 5323(j)

49 CFR Part 661

iron steel and manufactured products
Iron, Steel, and Manufactured Products
  • “All iron, steel, and manufactured products used in the Contract must be produced in the United States unless an exception is granted by the FTA.”
  • Certificate required from any Bidder over $100k that it will comply with Buy America or that it cannot comply but may qualify for an exception or a waiver.
rolling stock procurements
Rolling Stock Procurements
  • In the case of Rolling Stock procurements (including train control, communication, and traction power equipment) the above provision does not apply if more than 60% of the cost is for components produced in the United States
  • Analysis of content includes the subcomponents.
nafta does not apply
NAFTA Does Not Apply
  • The Buy America requirements are specifically applied to Department of Transportation Procurements and are not subject to NAFTA. Accordingly, goods from Canada and Mexico are not considered “domestic” for Buy America purposes.
  • AARA and Buy American requirements are different and recognize US treaty obligations for reciprocity with countries that are signatories to trade agreements.
strict enforcement waivers scarce
Strict Enforcement, Waivers Scarce
  • FTA requirements require a properly executed Buy America certificate or Bid is Non-Responsive.
  • Bidder that commits to comply with Buy America is not relieved if, after award, it becomes expensive to comply.
  • Violation of Buy America can lead to debarment under 49 CFR Part 29
  • FTA has indicated that it will not be granting waivers except in extraordinary circumstances.
race conscious and race neutral measures
Race Conscious and Race Neutral Measures
  • DOT Regulations require Grantees to adopt a DBE Program consistent with 49 CFR Part 26
  • DOT Regulations require Grantees to adopt annual DBE Goals and to have a plan on how that goal will be met with Race Conscious and with Race Neutral measures.
  • SBE and MSBE Features are considered race-neutral methods of encouraging participation that may bring in DBE participation while being focused on SBE status.
dbe contract goals
DBE Contract Goals
  • DBE Goals are set per Contract as a percentage of the Contract Price. The Goals are based on subcontracting opportunities and availability of DBEs.
  • Bidders are required to meet the DBE Goal or demonstrate Good Faith Efforts to do so in order to be responsive and eligible for award.
  • Credit towards the DBE Goal is tracked based on payments made to DBE firms during Contract performance
disadvantaged business enterprise dbe
Disadvantaged Business Enterprise (DBE)
  • A DBE is a for profit small business concern that is at least 51% owned by an individual that is socially and economically disadvantaged and whose management and daily business operations are controlled by one or more socially and economically disadvantaged individuals.
  • The firm’s average annual gross receipts (including those of its affiliates) for the previous 3 fiscal years does not exceed $22.41 Million
small business entity sbe
Small Business Entity (SBE)
  • An SBE means a small business concern certified as an SBE by BART or certified as a DBE under the California Unified Certification Program (CUCP).
  • The firm must be at least 51% owned by an individual that has a personal net worth that does not exceed $1.32 Million
  • In addition, the firm must meet the Small Business Administration (SBA) size standard for the North American Industry Classification System (NAICS) for which the firm has requested certification.
sbe continued
SBE, Continued
  • SBE cannot have average annual gross receipts, including those of its affiliates, for the previous three fiscal years that exceed $22.41 Million.
dbe and sbe goals
DBE and SBE Goals
  • Under Western States Case, in 9th Circuit, Grantees must conduct a Disparity study to determine if it has underutilized Minority firms when compared with their availability in order to have race specific goals in its contracts.
  • Due to results of its Disparity Study, no DBE Goals are included in BART Services Agreements or its Procurement contracts. SBE Goals will be included.
  • BART will include DBE and SBE participation goals in its FTA funded Construction Contracts.
micro small business entities msbes
Micro Small Business Entities (MSBEs)
  • Based on recent DOT Regulations, BART has added features to its DBE Program to allow for set aside contracts for MSBEs.
  • MSBE must qualify as an SBE . But its maximum average annual gross receipts (including those of its affiliates) for the previous three fiscal years cannot exceed $10 Million for Construction, or $6 Million for Procurement Contracts and for Services Agreements.
msbe set aside contracts
MSBE Set Aside Contracts
  • Set aside Contracts will be limited to Construction Contracts of $2 Million or less.
  • Set Aside Professional Services Agreements will be limited to $3 Million or less.
  • Set Aside Procurement Contracts will be limited to $2 Million or less.
  • Only MSBEs will be allowed to Bid on MSBE Set Aside Contracts.
  • MSBEs must register with BART and be on its MSBE Database to be eligible for bidding o the MSBE Set Aside Contracts.