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alternate. Such will also be the case if an alternate position is declared vacant by the Director due to death, illness, incompetence or other reasons. In the event that both the primary member and the alternate member are unable to serve or must recuse themselves due to conflict of interest, etc., on a particular claim(s) hearing, a new member of the Board will be appointed in the same manner as the primary member to sit for that particular hearing. The ALDOT will notify the Contractor in writing of the date of the presentation and the names of the Board members. The Contractor will have ten calendar days from receipt of the letter to file with the Director, by certified mail, an objection as to the composition of the Board which specifically details the nature of the objection. The Director shall have final authority in determining the composition of the Board. Each Board member will be paid $120 per hour for actual time spent reviewing the plans, specifications, and claim; attending the presentation and for preparing the report to the Director. This payment will cover all compensation and expenses.

The Contractor may initiate a request for a Board presentation by submission of a written notice by certified mail to the Director within 30 calendar days from the date of the Director’s decision on the recommendation of the Claims Committee. Failure to make the request within the required time period shall constitute waiver of the claim by the Contractor. The Board presentation will convene at the mutual convenience of the Board, the Department, and the Contractor. Issues not specifically presented in the original claims package are waived and are not subject to consideration by the Board. The Contractor shall not contact or have any discussions with members of the Claims Appeal Board while the claim is pending except during the formal presentation. The FHWA will be invited to send an observer for Federal Aid projects. The Contractor shall pay for 50 percent of the expenses of a Board presentation. The written recommendation of the Board will be sent to the Director following the presentation. The Claims Appeal Board's recommendation may be accepted, modified, or denied by the Director. After receiving the recommendation of the Claims Appeal Board, the Director has 45 calendar days to report his decision to the Contractor. The Director's decision in the resolution of any and all claims shall be final, non-appealable and not subject to judicial or other review. The decision of the Director is binding upon all parties including, but not limited to, contractors, subcontractors, and third-party beneficiaries. After the final ruling by the Director on a claim, a supplemental agreement shall be processed to make payment for any amount deemed payable by the Director.

110.05Claim Compensation

The liability of the Department for claims will be limited to the following specifically identified compensable items which shall be evaluated per Article 109.04:  Additional job site labor expenses, plus workmen’s compensation insurance  Additional costs for materials  Additional job-site overhead  Equipment costs  Professional services  Bond costs  Subcontractor costs as determined by, and limited to, those items identified as payable under Subitems a, b, c, d, e, and f above  Administrative allowance, to the Prime Contractor for processing a claim on behalf of a subcontractor  Gross receipts tax  Public liability and property damage insurance  Interest that accrues after 30 calendar days from the date of the Governor’s signature on the supplemental agreement that makes payment for a claim.

The Department will have no liability for the following specifically identified non- compensable items: CLAIMS 97

opportunities and insolvency

The Department will have no liability for damages due to delay, beyond those items which are specifically identified as compensable under Subarticle 110.05(a) above. Equipment costs, for equipment involved in a delay claim, shall be determined in accordance with the requirements for Standby Rates as provided in Item 109.04(b)4. The Department will be liable only for those delay damages caused by or arising from acts or omissions on the part of the Department which violate legal or contractual duties owed to the Contractor by the Department. Such delays may constitute a basis for a claim for delay damages and/or a request for a time extension. The Contractor assumes the risk of damages from all other causes of delay.

The Department will have no liability for any constructive acceleration unless the Department gives express written direction for the Contractor to accelerate his effort beyond that required by the original contract. Any acceleration related costs will be handled as extra work as provided in Article 104.03.

110.06Required Claim Documentation

All claims shall be submitted in writing and shall be sufficient in detail to enable the Engineer to ascertain the basis and the amount of each claim as set forth in Article 110.03, Subarticle 110.04(a), and Subarticle 109.04(b). All information submitted to the Department under this Article will be used solely for analyzing and/or resolving the claim. Additionally, the following information shall be provided for all claims:

the Contractor, and by the Subcontractor if applicable.

became evident.

of work affected by the claim.

reasons why such provisions support the claim.

categories specified as payable under Article 110.05, Claim Compensation.

knowledgeable about facts that give rise to such claim.

involved in, or knowledgeable about facts that give rise to such claim.

communication relating to such claim.

for such request. For delay claims, in addition to the above, a description of the operations that were delayed, the reasons for the delay and how they were delayed will be required.

110.07Auditing of Claims

All claims filed against the Department shall be subject to audit by the Department’s External Auditor at any time following the filing of such claim. The audit may begin on ten day’s notice to the Contractor, Subcontractor, or Supplier. The Contractor, Subcontractor, or Supplier shall cooperate with the auditors. Failure of the Contractor, Subcontractor, or Supplier to maintain and retain sufficient DISADVANTAGED BUSINESS ENTERPRISE (DBE) 98

records to allow the Department's auditor to verify the claim shall constitute a waiver of that portion of such claim that cannot be verified and shall bar recovery thereunder. Without limiting the generality of the foregoing, and as a minimum, the auditors shall have available to them the following documents:

with all supporting documentation pertinent to entries made in these ledgers and journals.

company involved, its accountant, or others.

internal purposes in establishing the actual cost of owning and operating equipment, all such other source documents.

Project was being performed and for each of the five years prior to the commencement of this Project.

calculations on which the bid was based.

support the amount of damages as to each claim.

including, but not limited to, labor, benefits and insurance, materials, equipment, subcontractors, and all documents which establish the time periods, individuals involved, the hours and the rates for the individuals. DISADVANTAGED BUSINESS ENTERPRISE (DBE)

111.01Goals

This contract contains a specific goal for the participation of certified DBEs. The goal is expressed as the percentage of the total amount of the contract that is required for DBE participation and is given in the proposal. This type of participation is defined as Race Conscious. If no specific percentage is indicated in the proposal, then any DBE firm utilized for work in this contract is defined as Race Neutral. The requirements listed in Article 111.08 and 111.09 still apply to contracts with no specific goal. In addition, any participation by DBEs above the required goal is also defined as Race Neutral.

111.02Certification

The Department maintains a current listing of certified DBE firms by categories of work. The Department’s certification extends only to the requirements of 49 CFR 26 with regard to business size, disadvantaged status, and ownership and control of business. The certification does not attest in any way to the capabilities or capacity of any business to perform satisfactorily. DISADVANTAGED BUSINESS ENTERPRISE (DBE) 99

DBE firms that are not on the current certification list must seek approval prior to tendering an offer on any project. Any work performed on a contract or subcontract that was executed prior to a firm obtaining DBE certification is not eligible to be counted as participation towards the goal.

111.03Submittal of DBE Utilization Plan

This contract will be awarded to the lowest responsible bidder. All bidders must submit within five calendar days of the letting date the following information in writing on Form OE-110 (DBE Utilization Plan) provided by the Department:

subcontract unit prices, and the unit of measurement for compensation

percentage of the overall pay item quantity to which the subcontract applies

not include Bonds or Gross Receipts Tax)

the commitment. Each DBE should only be listed on one line. Additional sheets detailing the required information such as quotes received may be attached as needed.

111.04Failure by Low Bidder or Contractor to Meet DBE Goal

In the event the apparent low bidder cannot meet the DBE goal for submission of his DBE Utilization Plan, or the Contractor does not meet the DBE goal based on actual participation during construction, he must provide documentation that good faith efforts were made to meet the goal in accordance with Article 111.05, including seeking replacement DBE participation when a DBE is terminated or fails to perform.

111.05Good Faith Efforts

A good faith effort is soliciting through all reasonable and available means (e.g., attendance at pre-bid meetings, advertising, written notices, corresponding with the ALDOT’s DBE Program Coordinator, placing postings on the Small Business Network of Bid Express) the interest of all certified DBEs who have the capability to perform the work of the contract. The bidder must solicit this interest within sufficient time to allow the DBEs to respond to the solicitation. The bidder must determine with certainty if the DBEs are interested by taking appropriate steps to follow up initial solicitations.

A good faith effort is selecting portions of the work to be performed by DBEs in order to increase the likelihood that the DBE goals will be achieved. This includes, where appropriate, breaking out contract work items into economically feasible units to facilitate DBE participation, even when the bidder might otherwise prefer to perform these work items with its own forces.

A good faith effort is providing interested DBEs with adequate information about the plans, specifications, and requirements of the contract in a timely manner to assist them in responding to a solicitation.

A good faith effort is negotiating in good faith with interested DBEs. It is the bidder’s responsibility to make a portion of the work available to DBE subcontractors and suppliers and to select those portions of the work or material needs consistent with the available DBE subcontractors and suppliers, so as to facilitate DBE participation. Evidence of such negotiation includes the names, addresses, and telephone numbers of DBEs that were considered; a description of the information provided regarding the plans and specifications for the work selected for subcontracting; and evidence as to why additional agreements could not be reached for DBEs to perform the work. A bidder using good business judgment would consider a number of factors in negotiating with subcontractors, including DBE subcontractors, and would take a firm’s price and capabilities as well as contract goals into consideration. However, the fact that there may be some additional costs involved DISADVANTAGED BUSINESS ENTERPRISE (DBE) 100

in finding and using DBEs is not in itself sufficient reason for a bidder’s failure to meet the contract DBE goal, as long as such costs are reasonable. Also, the ability or desire of a bidder to perform the work of a contract with its own organization does not relieve the bidder of the responsibility to make good faith efforts. Bidders are not, however, required to accept higher quotes from DBEs if the price difference is excessive or unreasonable.

A good faith effort is establishing sound reasons (based on a thorough investigation of the capabilities of a DBE to perform the work) for rejecting a DBE as being unqualified. The bidder’s standing within its industry, and membership in specific groups, organizations, or associations and political or social affiliations (for example union vs. nonunion employee status) are not legitimate causes for the rejection or non-solicitation of bids in the bidder’s efforts to meet the project goal.

A good faith effort is providing assistance to interested DBEs in obtaining bonding, lines of credit, or insurance as required by the DBE or bidder.

A good faith effort is providing assistance to interested DBEs in obtaining necessary equipment, supplies, materials, or related assistance or services.

A good faith effort is effectively using the services of available minority/women contractors’ groups; local, State, and Federal minority/women business assistance offices; and other organizations as allowed on a case-by-case basis to provide assistance in the recruitment and placement of DBEs.

111.06Evaluation of Good Faith Efforts

The Department has established a “Good Faith Efforts Committee” to review the documentation submitted by the Contractor to determine if there were any DBE violations as outlined in Article 111.09. If the Good Faith Efforts Committee determines the information and documentation from the bidder are satisfactory, the bid will be declared responsible. Acceptable good faith efforts may include activities in addition to those that are described in Article 111.05 and 49 CFR Part 26 Appendix A. A low bidder's good faith efforts on other ALDOT construction contracts may be considered in determining the acceptability of the low bidder's good faith efforts to meet current participation goals. If the information and documentation are unsatisfactory, the bidder will be notified in writing within five days. The bidder will be given the opportunity to appear before the Department’s Transportation Director to present additional evidence of good faith efforts. The bidder will then be given a written decision on the outcome of the consideration of this evidence. Failure to meet the contract goal or demonstrate good faith efforts will result in the bid being declared to be in default and the bid bond shall be forfeited.

111.07DBE Termination After Award of the Contract

A prime contractor cannot terminate a DBE subcontractor listed on the DBE Utilization Plan for convenience and then perform the work of the terminated subcontract with its own forces or those of an affiliate, without prior written consent from the Construction Bureau. If a listed DBE subcontractor fails to perform, or performs unsatisfactorily, the prime contractor will notify the Project Manager in writing, with a copy to the Construction Engineer, stating the reasons for termination with supporting documentation.

If the reasons for termination are satisfactory, the prime contractor will be required to obtain a substitute DBE and submit a revised DBE Utilization Plan for review and approval by the Construction Bureau or demonstrate good faith efforts as described in Articles 111.05 and 111.06 in trying to obtain a substitute DBE. If the prime contractor fails or refuses to comply, the Department reserves the right to issue a warning letter as defined in the DBE Violations (Article 111.09) and/or an order stopping all or part of the payment and work until satisfactory action has been taken. DISADVANTAGED BUSINESS ENTERPRISE (DBE) 101

111.08Credit for Work Assigned to Meet the DBE Goal

The dollar amount of that portion of a construction contract that is performed by the DBE's own forces will be counted towards meeting the DBE goal. This dollar amount shall include the cost of supplies and materials obtained by the DBE for the work of the contract, including equipment leased by the DBE. This dollar amount shall not include supplies, materials, and equipment the DBE purchases or leases from the prime contractor or affiliates of the prime contractor. (The term "affiliates" is defined in Subarticle 102.02(a)).

The dollar amount of fees or commissions charged by a DBE firm for providing a service, such as professional, technical, consultant, or managerial service, or for providing bonds or insurance specifically required for the performance of the contract will be counted towards meeting the DBE goal. The fee shall be reasonable and not excessive as compared with fees customarily paid for similar services.

When a DBE subcontracts part of the work of its subcontract to another firm, the value of this work will be counted toward the DBE goal if the DBE's subcontractor is a DBE. Work that a DBE subcontracts to a non-DBE firm will not be counted toward the DBE goal.

When a DBE performs as a participant in a joint venture, the dollar amount of the contract equal to the distinct, clearly defined portion of the work of the contract that the DBE performs with its own forces will be counted toward DBE goal.

The dollar amount of contract work performed by a DBE will only count towards meeting the DBE goal if the DBE performs a "commercially useful function".

A DBE performs a commercially useful function when it is responsible for execution of the work of the contract and is carrying out its responsibilities by performing, managing, and supervising the work involved. To perform a commercially useful function, the DBE must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, and installing (where applicable) and paying for the material itself. The determination of whether or not a DBE is performing a commercially useful function will be based on the amount of work subcontracted, industry practices, whether the amount the firm is to be paid under the contract is commensurate with the work it is actually performing, and the DBE credit claimed for its performance of the work, and other relevant factors.

A DBE does not perform a commercially useful function if its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation. The determination of whether a DBE is an extra participant will be based on similar transactions, particularly those in which DBEs do not participate.

If a DBE does not perform or exercise responsibility for at least 30 % of the total cost of its contract with its own work force, or the DBE subcontracts a greater portion of the work than would be expected on the basis of normal industry practice for the type of work involved, the DBE is not performing a commercially useful function.

The following factors will be given consideration in determining whether a DBE trucking company is performing a commercially useful function:

The DBE must be responsible for the management and supervision of the entire trucking operation for which it is responsible on a particular contract, and there cannot be a contrived arrangement for the purpose of meeting DBE goals. DISADVANTAGED BUSINESS ENTERPRISE (DBE) 102

The DBE must own and operate at least one fully licensed, insured, and operational truck used on the contract.

The DBE will receive 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.

The DBE may lease trucks from another DBE firm, including an owner-operator who is certified as a DBE. The DBE who leases trucks from another DBE will receive credit for the total value of the transportation services the lessee DBE provides on the contract.

The DBE may also lease trucks from a non-DBE firm, including an owner-operator. The DBE who leases trucks from a non-DBE is entitled to credit only for the fee or commission it receives as a result of the lease arrangement. The DBE does not receive credit for the total value of the transportation services provided by the lessee, since these services are not provided by a DBE.

To receive credit for trucking, it must be clearly shown on a lease that the DBE has exclusive use of, and control over the truck. This does not preclude the leased truck from being used for work for others during the term of the lease with the consent of the DBE, so long as the lease gives the DBE absolute priority for use of the leased truck. Leased trucks must display the name and identification number of the DBE.

A copy of each lease agreement, both for DBE firms and non-DBE firms, must be submitted with the DBE Utilization Plan if the DBE Trucking company intends on utilizing a this type of trucking participation or with the first Form DBE-10 submittal after the lease agreement is executed and utilized on the contract.

When it is determined that a DBE is not performing a commercially useful function the prime contractor and the DBE will be given the opportunity to provide documentation to rebut this determination. The Department's decisions concerning commercially useful functions are subject to review by other entities but are not administratively appealable to the USDOT.

If the materials or supplies are obtained from a DBE manufacturer, 100 % of the cost of the materials or supplies will be counted toward meeting the DBE goal. A DBE manufacturer shall be defined as a firm that operates or maintains a factory or establishment that produces, on the premises, the materials, supplies, articles, or equipment required under the contract.

If the materials or supplies are purchased from a DBE regular dealer, 60 % of the cost of the materials or supplies will be counted toward meeting the DBE goal. A DBE regular dealer shall be defined as a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and regularly sold or leased to the public in the usual course of business. To be a DBE regular dealer, the firm must be an established, regular business that engages, as its principal business and under its own name, in the purchase and sale or lease of the products in question. A person may be a DBE regular dealer in such bulk items as petroleum products, steel, cement, gravel, stone, or asphalt without owning, operating, or maintaining a place of business if the person both owns and operates distribution equipment for the products. Any supplementing of regular dealers' own distribution equipment shall be by a long-term lease agreement and not on an ad hoc or contract-by-contract basis. In addition, the regular dealer, with the exception of steel, must be certified in accordance with the Department’s program for the Materials, Sources and Devices with Special Acceptance Requirements Manual. DISADVANTAGED BUSINESS ENTERPRISE (DBE) 103

Packagers, brokers, manufacturers' representatives, or other persons who arrange or expedite transactions are not DBE regular dealers.

With respect to materials or supplies purchased from a DBE which is neither a DBE manufacturer nor a DBE regular dealer, the entire amount of fees or commissions charged for assistance in the procurement of the materials and supplies, or fees or transportation charges for the delivery of materials or supplies required on a job site, will count toward the DBE goal if the fees are reasonable and not excessive as compared with fees customarily allowed for similar services. The cost of the materials and supplies will not be counted toward the DBE goal.

If a firm is not currently certified as a DBE at the time of the execution of the contract, the firm's participation in the contract will not be counted toward the DBE goal. When a prime contractor has made a commitment to using an ineligible firm (one decertified by the Department) and a subcontract has not been executed before the Department issued the decertification notice, work by the ineligible firm does not count toward the contract goal. The prime contractor must meet the contract DBE goal with an eligible DBE firm or demonstrate that he has made good faith efforts to do so. If a prime contractor has executed a subcontract with an ineligible firm before the Department issued the decertification notice, the prime contractor may continue to use the firm on the contract and may continue to count the firm’s participation toward the contract DBE goal. If a prime contractor executes an additional subcontract to a firm that is certified at the time of execution, the firm’s participation associated with the additional subcontract will be counted towards the contract DBE goal.

The participation of a DBE subcontractor toward meeting the DBE goal will only be counted toward the goal after the compensation for the work has been paid to the DBE.

To document the DBE participation for the contract, the prime contractor shall furnish the Project Manager an ALDOT FORM DBE-10 for each estimate period. In the case of contracts with more than one project, a Form DBE-10 shall be submitted for each project estimate. The prime contractor shall provide the required data for each DBE active on the project during the estimate period, including those not listed on the DBE Utilization Plan. The participation amounts reported shall not include bond or gross receipts tax. If no DBE was active during the time period, such indication should be made on the form. Form DBE-10 shall be submitted on all Federal aid projects regardless of whether or not the contract contains a specific DBE goal. The Form DBE-10 shall be submitted within sixty calendar days of the close of the estimate period for which it applies. Failure to furnish the Form DBE-10 in a timely manner may result in the withholding of further monthly estimates until the delinquent information has been submitted.

For DBE Manufacturers, Dealers, and Broker (including any fee/commission service work), a copy of the paid invoice shall be submitted with the DBE-10 form work for which the work performed and services provided applies. For DBE Truckers who haul materials from a commercial facility such as a quarry to the plant for stocking purposes for the production of materials for the contract, a copy of each haul ticket shall be provided to the Project Manager with the DBE-10 form. This documentation is to verify the work performed for this contract.

Prior to the submission of the final estimate voucher for signing, the prime contractor shall furnish a final Form DBE-10 for each DBE subcontractor. This final Form DBE-10 shall be submitted to document any changes in the quantities of work performed by the DBE since the project completion due to the final quantities review and resulting payment adjustments. This form shall be submitted with the information required in Subarticle 109.12(c).

Prior to the submission of the final estimate voucher for signing, the prime contractor shall furnish a Certification of Actual Payments to DBE Firms (Form DBE-11) for each DBE subcontractor. DISADVANTAGED BUSINESS ENTERPRISE (DBE) 104

This form shall be submitted with the signature of an authorized representative of the DBE in order to document the total amount paid to the DBE firm as indicated on the final Form DBE-10. In the event that the DBE firm has gone out of business and is unavailable to sign the form, the prime contractor shall submit copies of the subcontractor estimates and cancelled checks verifying the amount paid to the DBE firm. If the total amount paid to the DBE firm includes bond and/or gross receipts tax, the eligible DBE participation total without these amounts shall also be indicated. This form shall be submitted with the information required in Subarticle 109.12(c).

111.09DBE Violations

Possible violations by bidders and prime contractors include, but are not limited to, failure to provide the DBE Utilization Plan within five calendar days of the letting date, failure to meet the contract goal, failure to make good faith efforts, deleting DBE subcontractors for convenience, improper DBE participation credit reports, continued failure to furnish Form DBE-10 reports, failure to comply with Department decisions and directives concerning DBE activities, and fraud.

Possible violations by DBE subcontractors include those listed in 49 CFR Part 26.107 as well as failure to fulfill contract commitments and negotiations.

These violations are only possible examples and not all inclusive. The Department reserves the right to determine exact violations and the extent of each violation on a case-by-case basis.

Failure by the apparent low bidder to provide the DBE Utilization Plan within the time frame specified will result in the bid being considered irregular in accordance with Subarticle 102.07(a), and the bid will be rejected. If the apparent low bidder does provide the DBE Utilization Plan within the time frame specified, but fails to make and document good faith efforts, the contract will not be awarded to that bidder and will result in the forfeiture of its bid bond. The next low bidder will become the new low bidder. Failure to have provided the DBE Utilization Plan within the time frame specified will result in the bid being considered irregular in accordance with Subarticle 102.07(a), and the bid will be rejected. If this bidder does provide the DBE Utilization Plan within the time frame specified, but fails to make and document good faith efforts, the contract will not be awarded to that bidder and will result in the forfeiture of its bid bond. If the contract is awarded to the next low bidder, the original low bidder will be prohibited from doing any work relating to the contract either as subcontractor or in any other capacity. These restrictions shall apply to any other name under which the same person, individual, partnership, company, firm, corporation, association, cooperative, affiliate, or other legal entity may be operating, and in which the principal owner(s) are involved.

For the first violation of the DBE requirements, a letter will be written to the prime contractor and/or the DBE, if applicable, citing the violation and warning that failure to rectify the violation or further violations will result in disqualification as outlined in Subarticle 102.02(b). The second violation will result in the prime contractor and/or the DBE subcontractor being disqualified as outlined in Subarticle 102.02(b) for an indefinite period. The disqualification may be reviewed each six months, if requested in writing by the disqualified firm. The third violation will result in the prime contractor and/or the DBE subcontractor being disqualified as outlined in Subarticle 102.02(b) for an indefinite period. The disqualification will be for at least one year. It may be reviewed after one year, if requested in writing by the disqualified firm. An exception to the above is that an open and flagrant violation. The prime contractor and/or the DBE subcontractor will not be issued a warning letter, and the prime contractor and/or DBE subcontractor will be summarily disqualified as outlined in Subarticle 102.02(b) for at least six months. The disqualification may be reviewed after such time, if requested in writing by the disqualified firm. If applicable, the DBE subcontractor's continued status as a certified DBE will be recommended to the Department's DBE Review Committee for review.