103.01 Consideration of Proposals. After the proposals are
opened and read, they will be compared on the basis of the bid total, which is the summation of the products obtained by multiplying the approximate quantities shown in the Proposal by the unit bid prices. Errors found in the bidder's extensions will be cor rected before release of the final summation. The results of suc h comparisons will be immediately available to the public. The right is reserved to reject any or all proposal s, to waive technicalities, or to advertise for new proposals, if in the judgement of the Commission the best interest of the Departme nt will be promoted thereby.
103.02 Award of Contract. Award of the Contract, if awarded,
will be made within 40 calendar days after the open ing of the proposals or, in the case of contracts having condi tional award status, after any conditional award status is lifte d, to the lowest responsive and qualified bidder whose proposal comp lies with all the requirements prescribed. The successful bidder will be notified by letter of the bid acceptance and of the award of the Contract. In instances where licensing with the Contractors L icensing Board is not a prerequisite to bidding, an unlicens ed successful bidder will be allowed a maximum of 30 calendar day s after the written notice of award in which to file for a lice nse. In the event the bidder does not become licensed within 90 calen dar days after the written notice of award, the bid may be rejecte d and the proposal guaranty forfeited. "Conditional award status", as used herein, means t he situation during which, subsequent to bid opening and before execution of Contract, a bidder has been formally advised to com ply with one or more bidding requirements, or the Department is obt aining concurrences.
103.03 Cancellation of Award. The Commission reserves the
right to cancel the award of any contract at any ti me before the 25 execution of said contract by all parties without a ny liability against the Commission.
103.04 Return of Proposal Guaranty. All proposal guaranties
in the form of checks, except those of the two lowe st bidders, will be returned immediately following the opening and veri fication of the proposals. The retained proposal guaranties of the two lowest bidders will be returned after the Contract has bee n executed. All bid bonds will be retained in the files of the Department.
103.05 Requirement of Performance Bonds, Payment Bo nds,
and Liability Insurance. (a) Bonds. At the time of execution of the Contract, the successful bidder shall furnish a surety Performance bond or bonds in a sum equal to the ful l amount of the Contract and a surety Payment bond or bonds in a su m equal to 80% of the full amount of the Contract. The form of th e bonds as well as the surety shall be acceptable to the Department. The Statutory Payment and the Statutory Performance Bonds furnish ed with the Contract shall be executed by a Resident Agent or N onresident Agent. The Resident or Nonresident Agent shall be licensed by the Insurance Commissioner of the State of Arkansas to represent the surety company executing the bond. A Power of Atto rney supporting the Resident or Nonresident Agent's sign ature shall be furnished with each bond. The bond number used by t he Surety must also be recorded in the space provided on each bond . The Resident or Nonresident Agent will be responsib le for advising the Department, by Certified Mail -- Retur n Receipt Requested, of any indication that the Surety is exp eriencing difficulty that may affect its ability to perform. Failure of the Resident or Nonresident Agent to do so may be just cause to reject any or all future bonds from that individual/agency . Suits concerning the payment or performance bond sh all be filed in the State of Arkansas; and the Department and th e Commission shall be entitled to the sovereign immunity from su it afforded by the Constitution of Arkansas and laws of the State of A rkansas. The Department reserves the right to refuse bonds f rom sureties with a record of unsatisfactory performance under p reviously accepted bonds. 26 (b) Liability Insurance. The Contractor shall procure and maintain at its own sole cost and expense, until ac ceptance of the project by the Engineer, General Public Liability I nsurance providing bodily injury, including death, personal injury, and property damage coverage with a limit of at least $ 1,000,000 per occurrence and a general aggregate limit of at leas t $2,000,000. Each such policy shall be endorsed to include broad form general liability, contractual liability, and completed ope rations coverage. Before a work order is issued, the Contractor shall furnish to the Division Head, Programs & Contracts Division, evide nce of the required insurance. Each policy or its declaration pages shall provide that the policy shall not be materially cha nged or cancelled until the Engineer has been given at least 30 calen dar days advance notice in writing. If any policy is cancelled duri ng the duration of the work, a satisfactory replacement policy must be in force, with notice and evidence of insurance to the Engineer, p rior to the effective date of cancellation of the former policy . Failure to furnish the required proof of Liability Insurance with the submission of the Contract signed by the succes sful bidder shall be just cause for the cancellation of the award and forfeiture of the proposal guaranty, which shall become the property of the Commission, not as a penalty, but in liquidation of damages sustained. Failure to furnish notice of cancellati on or change in the policy will result in the temporary suspension of w ork as provided in Section 108.05. Temporary suspension shall remain in effect until proof that the required insurance is in effect is r eceived by the Department. If no proof of insurance is received w ithin 20 calendar days of the Suspension Order, the Engineer may proc eed with written notice of default according to Section 108. 08.
103.06 Execution and Approval of Contract. (a) Gene ral. The
Contract shall be signed by the successful bidder a nd returned to the Division Head, Programs & Contracts Division, toget her with the required bonds and proof of liability insurance, wi thin 10 business days after written notice of award has been issued. Execution of the Contract by the Department will take place as soon as practical after it has been signed and returned by the successful b idder.
b.Furnishing Disadvantaged Business Enterprise (D BE) Information. For contracts having DBE goals, and where require d 27 DBE information is not submitted with the bidder's proposal, the successful bidder shall furnish the required DBE in formation as specified in Subsection 103.08. If the information is furnished and the conditional award status is lifted, the Contrac t will be handled as stated in (a) above.
103.07 Failure to Execute Contract. (a) General. Failure to
execute the Contract and file acceptable bonds and proof of liability insurance within 10 business days after the written notice of award has been issued to the bidder shall be just cause f or the cancellation of the award and forfeiture of the proposal guarant y, which shall become the property of the Commission, not as a pen alty, but in liquidation of damages sustained. Award may then b e made to the next lowest responsible bidder, or the work may be re-advertised and constructed under contract or otherwise, as the Com mission may decide. The low bidder who fails to execute the Co ntract and submit acceptable bonds and proof of liability insurance w ill not be permitted to bid on any subsequent advertisement of that project.
b.Failure to Furnish DBE Information. For contracts having DBE goals, failure to furnish the DBE information r equired under subsection 103.08 shall be just cause for the cance llation of the conditional award and forfeiture of the proposal gu aranty. The proposal guaranty shall become property of the Comm ission, not as a penalty, but in liquidation of damages sustained to the DBE Program. Conditional award, re-advertisement, etc. , will be handled as in (a) above.
103.08 Disadvantaged Business Enterprise (DBE) in H ighway
Construction. (a) Contract Requirements. The provisions of this subsection shall apply to all contracts administere d by the Department. If there are no specific participatio n goals for a contract, the Contractor agrees to ensure that Disa dvantaged Business Enterprises (DBEs) are provided reasonable opportunities to compete for and perform on the contract or subco ntracts and shall take all necessary and reasonable steps to ensure t hat the policy set forth in this supplemental specification is maintai ned. If a Contractor on a project without a specific particip ation goal elects to utilize a DBE subcontractor, all payments to the DB E subcontractor must be documented in accordance with Subsection 10 3.08(h). If the Prime Contractor is a DBE, records must be subm itted in 28 accordance with the above referenced section for wo rk accomplished by their own forces.
b.Policy. It is the policy of the Department to ensure nondiscrimination in the award and administration o f Department contracts and to create a level playing field on wh ich Disadvantaged Business Enterprises (DBEs) can compete fairly. Co nsequently, the following apply to the Contract, the DBEs listed in the Contractor's submittal required by Subsection 103.06(b) to achie ve a DBE goal (either on a subcontract, purchase order, or other written agreement), the DBEs that may be added to the list later as sub stitutes , and DBEs performing on a contract, but not used to fulfill a portion of a DBE goal:
1.The Contractor agrees to ensure that DBEs are provi ded reasonable opportunities to compete for and to perf orm on contracts awarded by the Department. In this regar d, the Contractor shall take all necessary and reasonable steps to meet the DBE goal established in the Contract.
2.The Contractor and any subcontractors shall not discriminate on the basis of race, color, national origin, or sex in the performance of the Contract. The Contractor sh all carry out applicable requirements of 49 CFR § 26 in the awar d, administration and performance of contracts. Failu re by the Contractor to carry out these requirements is a mat erial breach of this contract, which may result in the termination of this contract or such other remedy as the Department deems approp riate.
3.After a conditional award is made and the apparent successful bidder has submitted the required DBE in formation, the Department will determine if the DBE requiremen ts have been met. If those requirements are met, the condi tional status will be removed and the Contract will be forwarded to the bidder for execution. If those requirements are not met, the proposal guaranty will become the property of the Commission , as specified in subsection 103.08(d).
4.The Contractor should ensure that all DBEs performi ng on the Contract serve a commercially useful function. To ascertain that all obligations under contracts awarded to DBE s are met, the Department will review the Contractor's DBE involve ment efforts during the performance of the Contract. No work sh all be 29 performed by the Contractor or any subcontractor on items originally committed to or included in a subcontrac t (including purchase orders or other written agreements) with a DBE without prior written approval by the Department. Payments to the Contractor will be withheld or previous payments re covered by the Department in amounts equivalent to that portio n of the subcontract with a DBE in which:
a.The DBE subcontractor is found not performing a commercially useful function as defined in subsection 103.08(f)(3); or
b.The Contractor or any subcontractor performs any portion of the work to be accomplished by a DBE wit hout prior written approval by the Department. Amounts that have been withheld as a result of a or b above will be retained by the Department until the Contract DB E goal is satisfied or will be withheld permanently if the Co ntract DBE goal is not met.
5.The Contractor shall pay all subcontractors their r espective subcontract amounts, including retainage, according to subsection 108.01. The Contractor shall inform the Department of any situation in which regularly scheduled progr ess payments are not made to DBE subcontractors. Failure of the Contractor or any subcontractor to c arry out the requirements set forth above shall constitute a bre ach of contract and, after notification by the Department, may resu lt in withholding estimates due the Contractor, termination of the Co ntract by the Department, or other action as the Department deems appropriate.
c.Definitions.
1."Disadvantaged Business Enterprise" means a for pro fit small business concern:
a.which is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged, or, in the case of a corporation, a t least 51 percent of the stock is owned by one or more suc h individuals; and
b.whose management and daily business operations ar e controlled by one or more of the socially and econo mically disadvantaged individuals who own it. 30 (2) "Small Business Concern" means, with respect to fir ms seeking to participate as DBEs, a small business as defined pursuant to Section 3 of the Small Business Act and Small Business Administration (SBA) regulations implement ing it (13 CFR § 121), that also does not exceed the cap on average annual gross receipts allowed by Federal Regulation.
3."Socially and economically disadvantaged individual " means any individual who is a citizen of the United States (or lawfully admitted permanent resident) and who is fo und to be a socially and economically disadvantaged individual on a case-by- case basis; or any individual in the following grou ps, members of which are rebuttably presumed to be socially and ec onomically disadvantaged: Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, Subcontinent As ian Americans, Women and any additional groups whose me mbers are designated as socially and economically disadv antaged by the SBA, at such time as the SBA designation becomes ef fective.
a."Black Americans" includes persons having origins in any of the Black racial groups of Africa;
b."Hispanic Americans" includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South Am erican, or other Spanish or Portuguese culture or origin, r egardless of race;
c."Native Americans" includes persons who are Americ an Indians, Eskimos, Aleuts, or Native Hawaiians;
d."Asian Pacific Americans" includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Bru nei, Samoa, Guam, U.S. Trust Territories of the Pacific Islands (Republic of Palau), the Commonwealth of the Northern Mariana s Islands, Macao, Fiji, Tonga, Kirbati, Juvalu, Nauru , Federated States of Micronesia, or Hong Kong;
e."Subcontinent Asian Americans" includes persons who se origins are from India, Pakistan, Bangladesh, Bhut an, the Maldives Islands, Nepal or Sri Lanka; and
f."Women". 31 (d) Bidder's Responsibilities.
1.On projects with a DBE goal, each bidder shall furn ish, with the proposal, one of the following:
a.The required DBE participation,
b.Documentation of good faith efforts, or
c.An irrevocable certification that the required DBE participation will be submitted within ten (10) business days following conditional award of the project. If none of the items listed in (d) (1) a, b, or c i s submitted, the Department will reject the bid and the proposal gua ranty will be handled in accordance with Subsection 103.04.
2.If an irrevocable certification to achieve the requ ired DBE participation is submitted with the proposal, withi n ten (10) business days after conditional award of the Contra ct, the apparent successful bidder shall furnish the requir ed information to the Department on a form provided by the Departm ent. If the information is not furnished as required, the condi tional award will be cancelled in accordance with Subsection 103 .07(b).
3.Information required to be submitted to document DB E participation is:
a.The names and addresses of the AHTD-certified DBE subcontractors to be used to satisfy the percentage goal;
b.An itemized description of the work each DBE subcontractor is to perform;
c.The dollar value of each item to be included in the DBE subcontract;
d.Written documentation of the bidder’s commitment to use a DBE subcontractor whose participation it submits to meet a contract goal; and
e.Written confirmation from the DBE that it is participating in the contract as provided in the Contractor’s commitment.
4.An apparent successful bidder who cannot meet the percentage goals shall document and submit with the proposal the 32 steps taken to obtain the required DBE participatio n. Only those efforts made by the bidder to obtain DBE participat ion prior to the letting will be considered in the evaluation of good faith efforts. Good faith efforts to meet DBE goals woul d include such items as, but not limited to, the following:
a.Soliciting through all reasonable and available mea ns (e.g., attendance at a pre-bid meeting, if any, adv ertising and/or written notices) the interest of all certifi ed DBEs who have the capability to perform the work of the cont ract. The bidder must solicit this interest at least two week s prior to the letting to allow the DBEs to respond to the solicit ation. The bidder must determine with certainty if the DBEs ar e interested by taking appropriate steps to follow up initial solicitations;
b.Selecting portions of the work to be performed by D BEs to increase the likelihood of meeting DBE goals (in cluding, where appropriate, breaking out contract work items into economically feasible units to facilitate DBE parti cipation, even when the prime contractor might otherwise pref er to perform these work items with its own forces). Sel ections should be made based on the current DBE directory o f contractors and their specialty area/areas of work.
c.Providing interested DBEs with adequate information about plans, specifications, and requirements of th e Contract in a timely manner to assist them in responding to a solicitation;
d.Negotiations.
1.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 ne eds consistent with the available DBE subcontractors an d suppliers, so as to facilitate DBE participation. Evidence of such negotiation includes the names, addresses, and telephone numbers of DBEs that were contacted; a description of the information provided regarding t he 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; 33 (2) A bidder using good business judgment would consider a number of factors in negotiating with subcontractors, including DBE subcontractors, and w ould take a firm’s price and capabilities as well as con tract goals into consideration. However, the fact that t here may be some additional costs involved in finding and us ing DBEs is not in itself sufficient reason for a bidde r’s failure to meet the contract DBE goal, as long as s uch costs are reasonable. Also, the ability or desire of a prime contractor to perform the work of a contract with i ts own organization does not relieve the bidder of the responsibility to make good faith efforts. Contrac tors are not, however, required to accept higher quotes from DBEs if the price difference is excessive or unreasonabl e;
e.Not rejecting DBEs as being unqualified without sound reasons based on a thorough investigation of their capabilities. The Contractor’s standing within its industry, memb ership in specific groups, organizations, or associations and political or social affiliations (for example union vs. non-unio n employee status) are not legitimate causes for the rejection or non- solicitation of bids in the Contractor’s efforts to meet the project goal;
f.Making efforts to assist interested DBEs in obtaini ng bonding, lines of credit, or insurance as required by the Department or Contractor;
g.Making efforts to assist interested DBEs in obtaini ng necessary equipment, supplies, materials, or relate d assistance or services;
h.Effectively using the services of available minority/women community organizations; minority/wo men contractors’ groups; local, state, and federal mino rity/women business assistance offices; and other organization s as allowed on a case-by-case basis to provide assistance in th e recruitment and placement of DBEs.
5.The preceding information shall be submitted direct ly to the Arkansas State Highway and Transportation Depar tment, Programs and Contracts Division, P. O. Box 2261, Li ttle Rock, Arkansas 72203. 34 a. The information submitted by the apparent low bidd er will be reviewed by the Department to determine if the Contractor has successfully met the DBE goal or mad e a good faith effort to obtain DBE participation sufficient to achieve the DBE goal.
b.If it is determined that the goal was not met or a good faith effort was not made, the bidder will be notif ied and provided an opportunity for administrative reconsid eration. As part of the reconsideration, the bidder may prov ide written documentation or argument concerning the issue of w hether it met the goal or made adequate good faith efforts to do so. A request for administrative reconsideration must be submitted to the Chief Engineer within two business days of t he Department’s notification. The Chief Engineer will render a written decision on the reconsideration explaining the basis for the finding.
6.Should the bidder to whom the Contract is condition ally awarded refuse, neglect, or fail to meet the DBE go als or to furnish acceptable documentation of efforts to meet these goals, the bidder will not be provided a contract for exec ution. If the goal is not met and the good faith efforts are foun d to be inadequate, the proposal will be rejected and the p roposal guaranty filed with the bid will be returned to the contractor. However, if documentation of good faith effort was not submitted with the bid and DBE participation sufficient to ac hieve the goal is not provided within ten days, as required, the p roposal will be rejected and the proposal guaranty shall become the property of the Commission, not as a penalty, but as liquidatio n of damages to the Department's DBE program.
7.Should the Department accept a good faith effort, this determination will be made on the condition that th e Contractor continue efforts throughout the life of the project to attain the DBE participation goal and to document such continu ed good faith efforts.
8.A Contractor may not terminate a DBE firm’s subcon tract or purchase order without the written approval of t he Department. The Contractor shall make good faith efforts to rep lace a DBE subcontractor with another DBE subcontractor if the original DBE subcontractor is unable or unwilling to perform 35 successfully. All substitutions of DBE subcontract ors during Contract performance must be approved by the Depart ment in writing, not only because it is routinely required, but also to ensure that DBE firms are provided reasonable oppor tunities to perform on contracts and substitute firms are eligi ble DBEs. A substitute DBE or the Contractor will not be allowe d to commence work on those items committed or subcontra cted to a DBE until satisfactory evidence of the original DBE 's inability or unwillingness to perform is submitted to and approved by the Department in writing. For projects with a DBE goa l, evidence of good faith efforts exerted by the Contractor mus t be submitted to and approved by the Department. Good faith effo rts to replace a DBE subcontractor shall be directed at finding an other DBE to perform at least the same amount of work (not neces sarily the same work) under the contract as the DBE that was t erminated, to the extent needed to meet the contract goal establi shed for the project. (See also subsection 103.08(b)(4).)
9.Requirements of this Subsection shall also apply t o DBE firms bidding as the Prime Contractor on a project. In determining whether a DBE bidder has met a contract goal, the work that the DBE performs with its own forces, as well as the work performed by DBE subcontractors and suppliers will count toward the goal. DBE bidders must list on the DBE Participation Form all work to be performed with its own forces a nd work to be performed by DBE subcontractors, DBE suppliers, DBE manufacturers, and/or DBE non-construction services that will be utilized in achieving the goal.
10.Agreements between a bidder and a DBE in which the DBE promises not to provide subcontracting quotatio ns to other bidders are prohibited.
11.The successful bidder shall designate a liaison off icer who will administer the Contractor's DBE program an d maintain in the home office the records and results of the c ontacts made with DBE subcontractors.
12.Contractors are encouraged to investigate the full extent of services offered by banks owned and controlled b y disadvantaged individuals. 36 (e) Eligibility of DBEs.
1.To ensure that the Department's DBE program benefit s only those firms for whom it is intended, the Depar tment will certify or ascertain the eligibility of DBEs, and j oint ventures, any of which are proposed to be used by contractors to perform subcontract work.
2.Certification by the Department will be accomplishe d through the use of Schedules A, B, and C . Certification will be granted for specific types of work for which the so cially and economically disadvantaged owners have the ability to control the firm.
3.Eligibility of firms certified by the Small Busines s Administration under Section 8(a) of the Small Busi ness Act or small and disadvantaged business (SDB) programs wil l be considered on a case-by-case basis by the Departmen t.
4.Contractors are encouraged to solicit DBE subcontra ctors wherever they may be located and, if the DBE is not certified by the Department, to encourage the DBE to submit cert ification forms for approval.
5.Early submission of certification forms is encourag ed, particularly for those complex situations in which a determination of eligibility may require extensive documentation and review.
6.A Disadvantaged Business Enterprise Directory is published, maintained, and available from the Depar tment. Firms listed in the Directory are certified at the date t he Directory is printed. Additions or deletions to the Directory a fter that date due to certifications, decertifications, etc. are p ossible. The current status of firms can be ascertained by conta cting the Department’s DBE Program Specialist.
f.Determination of DBE Participation. DBE participation shall be counted toward meeting the DBE goal according to the following:
1.When a DBE participates in a contract, only the val ue of the work actually performed by the DBE for which it is certified is counted toward a DBE goal.
a.The entire amount of that portion of a contract th at is performed by the DBE’s own forces for which it is c ertified is 37 counted toward a goal. The cost of supplies and ma terials obtained by the DBE for the work of that portion of the contract, including supplies purchased or equipment leased by the DBE (except supplies and equipment the DBE subcontractor purchases or leases from the Contract or or its affiliates), is included. DBEs bidding as prime co ntractors must indicate all work the firm will be performing with its own forces on the DBE Participation form.
b.When a DBE subcontracts part of the work of its contract to another firm, the value of the subcontr acted work may be counted toward DBE goals only if the DBE’s subcontractor is a DBE and is certified for the typ es of work. Work that a DBE subcontracts to a non-DBE firm does not count toward DBE goals.
c.No credit will be given toward the DBE goal for an y subcontracting arrangement that is contrived to art ificially inflate or obtain the appearance of DBE participati on. Of particular concern is the interjection of DBE middl emen or passive conduits that are inconsistent with standar d industry practices or which serve no commercially useful fun ction, and arrangements in which a DBE subcontractor is acting essentially as a broker, (e.g., DBE second-tier su bcontracts between DBE subcontractors who are fulfilling proje ct goals, and non-DBE subcontractors with contracts acknowled ged by the Department on the same project). Regardless of whether an arrangement between the Contractor and a DBE rep resents standard industry practice, where such an arrangeme nt erodes the ownership, control, or independence of the DBE or does not meet the commercially useful function requireme nt, the Contractor shall receive no credit toward the DBE g oal.
d.The entire amount of fees or commissions charged by a DBE firm for providing a bona fide service, such as professional, technical, consultant, or managerial services, or for providing bonds or insurance specifically requi red for the performance of a contract, may be counted toward DB E goals, provided the fee is determined to be reasonable and not excessive as compared with fees customarily allowed for similar services. 38 (2) When a DBE performs as a participant in a joint ve nture, the portion of the total dollar value of the contra ct equal to the clearly defined portion of the work that the DBE pe rforms with its own forces may be counted toward the goal.
3.The Contractor may count toward the DBE goal only expenditures to DBEs that perform a commercially us eful function in the work of a contract. A DBE is consi dered to perform a commercially useful function when it is r esponsible for execution of a distinct element of the work of a co ntract and carrying out its responsibilities by actually perfo rming, managing, and supervising the work involved. To determine wh ether a DBE is performing a commercially useful function, the D epartment shall evaluate the amount of work subcontracted, in dustry practices, whether the amount the firm is to be pai d under the contract is commensurate with the work it is actual ly performing and the DBE credit claimed for its performance of t he work, and other relevant factors. A commercially useful function is performed when:
a.All employees are under direct supervision of the DBE and on the DBE's payroll. Use by a DBE of personne l from the Contractor or any subcontractor will not be per mitted without prior approval by the Department.
b.The DBE is responsible for obtaining all equipment necessary to perform Contract work. The DBE shall negotiate and enter into equipment lease or purchase order ag reements directly with the equipment source. Such lease or purchase order agreements shall have prior approval by the D epartment.
c.The DBE is responsible, with respect to materials a nd supplies, for negotiating price, determining qualit y and quantity, ordering the material, and installing (wh ere applicable) and paying for the material itself. If the Contractor chooses to assist a DBE firm by a ssuring payment for materials to be placed in the DBE’s wor k or equipment leased by the DBE and wants to receive cr edit toward the DBE goal for the cost, the following pro cedures may be used: 39 • the material supplier or lessor may invoice the DBE firm and be paid by remittance from the DBE fir m or • the supplier or lessor may invoice the Contractor and DBE firm jointly and be paid by the Contractor and DBE firm utilizing a joint check from the Contracto r. Such a joint checking arrangement must be in writin g, either in the subcontract or a separate agreement, and approved by the Department prior to the supplies or equipment being utilized and payment being made. No credit will be given toward the DBE goal for the cost of the DBE's required materials or equipment that the Cont ractor pays directly to the material supplier or lessor.
d.A DBE subcontractor will be deemed to have perform ed a commercially useful function and the Contractor w ill be allowed DBE goal credit when a DBE subcontractor pe rforms at least 30 percent of its subcontract. This work shall be performed by the DBE subcontractor's normal work fo rce.
4.The following factors will be used in determining w hether a DBE trucking firm or owner/operator is performing a commercially useful function:
a.The DBE must be responsible for the management and supervision of the entire trucking operation for th e items on its subcontract or purchase order, including scheduling , providing sufficient trucks to accomplish the haul, and coord inating the work with the Contractor. There cannot be a contri ved arrangement for the purpose of meeting DBE goals.
b.The DBE must own and operate at least one fully licensed, insured, and operational truck used on th e contract when work is in progress.
c.The DBE 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 emp loys. The DBE will also receive credit for the total dollar v alue of the transportation services attributable to no more tha n twice the number of trucks owned by the DBE and leased from a nother DBE firm. Long-term lease arrangements are an acce ptable form of “ownership.” 40 d. Lease Agreements. There are two types of lease arrangements that can be utilized by DBE firms: lon g-term leases and short-term leases.
1.Long-term lease arrangements. The DBE may lease trucks under a long-term lease arrangement from independent equipment leasing companies. To be an independent equipment leasing company, the company must lease equipment to the public. A long term le ase is defined as a twelve month or longer lease period . The drivers, fuel, minor maintenance responsibility , and full control of the leased trucks must rest sol ely with the DBE owner as stipulated in the lease agreement. Drivers must be employees of the DBE, subject to withholding, worker’s compensation requirements, unemployment, etc. Leased trucks mus t display the name and identification number of the DBE. The DBE will receive full credit for the full value of the transportation services provided by tr ucks leased and operated in this manner. A DBE supplier (regular dealer) must utilize this type of lease to supplement distribution equipment owned by the firm to receive credit for transportation services.
2.Short-term lease arrangements. a). 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 receives credit for the total value of the transportation services the lessee DBE provides on the contract. b). The DBE may also lease trucks from a non-DBE firm, or owner-operator. Credit for the total valu e of the non-DBE firm or owner-operator trucks transportation services will be credited to the DBE so long as the number of non-DBE firm or owner- operator trucks does not exceed the number of trucks owned by the DBE or leased from other DBE firms. For trucks leased by the DBE in excess of the total number of owned or leased DBE trucks, the DBE is entitled to receive credit only for the fee 41 or commission it receives as a result of the lease arrangements for the excess trucks. All lease agreements must indicate that the DBE has exclusive use of and control over the truck. This does not preclude the leased truck from working for others d uring the term of the lease with the consent of the DBE, so l ong as the lease gives the DBE absolute priority for use of th e leased truck. A copy of each lease agreement must be prov ided to and approved by the Resident Engineer before the tr uck begins hauling. The agreement must reflect the name of th e lessor, cab card registration numbers of all leased trucks, the description of the truck(s), the amount and terms o f the lease and method of payment (hour, ton, cubic yard, or nu mber of loads hauled), and, if owner-operator, his/her Soci al Security Number.
e.The DBE must certify each estimate period the amou nts paid to: (1) other DBE truckers, (2) non-DBE trucke rs, and (3) for hauls made with trucks owned by the firm. This certification must be made on the form provided by the Department.
5.When a DBE is found not to be performing a commerc ially useful function, the DBE may present evidence to re but the finding. Such evidence will be reviewed by the Dep artment and a determination made. Decisions on commercially usef ul function matters are subject to review by the Federal Highwa y Administration for projects receiving federal funds .
6.The Contractor may count toward the DBE goal 60 pe rcent of expenditures for materials and supplies required under a Contract and obtained from a DBE regular dealer, an d 100 percent of such expenditures to a DBE manufactu rer.
a.For purposes of this Section, a manufacturer is a firm that operates or maintains a factory or establishme nt that produces on the premises the materials, supplies, a rticles or equipment required under the contract for incorpora tion into the work, and of the general character described by the specifications.
b.For purposes of this Section, a supplier or regula r dealer is a firm that owns, operates, or maintains a store , warehouse, 42 or other establishment in which the materials, supp lies, articles or equipment of the general character described by the specifications and required under the contract for incorporation into the work are bought, kept in stock, and regularly sold or leased to the public in the usual course of business. To be a supplier, the firm must be an es tablished, regular business that engages in, as its principal business and under its own name, the purchase and sale or lease of the products in question. A trucking firm or owner/ope rator will not be considered a supplier, nor will a supplier b e considered a trucking firm. A regular dealer in such bulk items as steel, cemen t, gravel, or stone, must own or lease, and operate, a pit, qu arry, concrete plant, or other such facility that sells m aterials to the public. A person may be a regular dealer in petrol eum products or asphalt binder without owning, operatin g, or maintaining a place of business, where these items are bought, kept in stock, and regularly sold to the public, if the person both owns and operates distribution equipment for t he products. Any supplementing of regular dealers’ ow n distribution equipment shall be by a long-term leas e agreement and not on an ad hoc or contract-by-contract basis.
c.Expenditures for lease of a particular piece or pi eces of equipment from DBEs for exclusive use on the projec t for which DBE participation is to be claimed may be cou nted 60 percent toward contract goals, provided the DBE dea ler actually has ownership or control of the equipment and is considered a regular dealer.
d.Capital expenditures for tools, equipment, vehicle s, field office furniture, and similar property items, even though such items are used on the project and purchased from DB Es, are not creditable toward contract DBE goals.
e.Expenditures for materials and supplies obtained f rom DBE suppliers and manufacturers for use in the Cont ractor’s general operations which are not incorporated into the work are not creditable in whole or part toward contract goals, even though a portion of such items may be used in the administration and/or execution of a project. 43 (7) Brokers, manufacturer’s representatives, packagers , or other persons who arrange or expedite transactions are not regular dealers within the meaning of this section. With respect to materials or supplies purchased fr om a DBE which is neither a manufacturer nor regular dealer, the entire amount of fees or commissions charged for assistanc e in the procurement of the materials and supplies, or fees or transportation charges for the delivery of material s or supplies required on a job site, can be counted toward DBE g oals, provided the fees are determined to be reasonable a nd not excessive as compared with fees customarily allowed for similar services. None of the cost of the materials and su pplies themselves will count toward DBE goals.
8.In order for a firm to qualify as a DBE supplier of metal and/or concrete pipe, the firm must fabricate the p ipe.
9.If material is purchased from a DBE supplier, credi t will be allowed at 60% of the total cost of the material ob tained from the DBE facility and the cost of delivery if the suppli er is transporting the material using equipment it owns o r leases on a long-term basis. Credit for 100% of transportation services provided by the DBE truckers will be allowed.
10.A valid purchase order for the material must be exe cuted by the contractor and DBE and approved by the Depar tment prior to the material being hauled from the facility.
11.The Contractor may count toward the DBE goal only those payments made to DBEs for work or services pe rformed or material furnished after the DBE has been approved, either on the list in the Contractor's original participation sub mittal or later as a substitute. The Department must have acknowledged a subcontract or purchase order prior to the beginnin g of work by the DBE firm. Payments made to a DBE for work, ser vices, or materials performed or furnished prior to approval and acknowledgment will not be counted toward the DBE g oal.
g.Subcontract Eligibility. On Federal-Aid projects, the provisions of Arkansas Act 936 of 1989, concerning the listing of unlicensed subcontractors, do not apply. However, the proposed DBE subcontractor shall meet all requirements of ap plicable 44 Arkansas law (including licensing) prior to subcont ract approval by the Department.
h.Certificate of Payment to DBEs/Non-DBEs. Certification of payments to DBE subcontractors, suppliers, manufact urers, and/or non-construction services must be submitted by the Contractor each estimate period utilizing the forms provided by the Resident Engineer. A payment certification is also required when a non-DBE subcontractor subcontracts a portion of its work to a DBE firm or a DBE subcontractor subcontracts to another firm (DBE or non-DBE). In this case, the subcontractor shall complete the proper form and submit it through the Contractor. In lieu of using these forms, contractors may submit a copy of subcontractor pay estimates provided the required information and certification are included. This information will be submitted to the Resident Engineer for review and compilation. Only those payments report ed will be credited toward the DBE goal. Failure to submit th e reports within thirty calendar days after the end of the estimate period may result in contract sanctions, including withholding of progre ss payments. In addition, a final certificate of payment to DBEs shall be submitted to the Resident Engineer who will attach it to the original copy of the final estimate for payment. This requi rement applies regardless of whether a DBE goal had been establish ed for the project.
i.Cooperation. All participants in the Department’s DBE program, including, but not limited to, DBE firms a nd applicants for DBE certification, and Contractors using DBE firms to meet contract goals, are required to cooperate fully and promptly with U. S. Department of Transportation or Department complian ce reviews, certification reviews, investigations, and other re quests for information. Failure to do so shall be a ground fo r appropriate action against the party involved (e.g., with respe ct to DBE firms, denial of certification or removal of eligibility a nd/or suspension and debarment; with respect to a Contractor using DBE f irms to meet goals, withholding of progress estimates, findings of non- responsibility for future contracts and/or suspensi on and debarment).
j.Intimidation and retaliation. All participants in the DBE program, including but not limited to the Departmen t and contractors, must not intimidate, threaten, coerce, or discriminate 45 against any individual or firm for the purpose of i nterfering with any right or privilege secured by 49 CFR § 26 or because the individual or firm has made a complaint, testified, assisted, or participated in any manner in an investigation, proceeding, or hear ing.
AWARD AND EXECUTION OF CONTRACT in other states
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