EXHIBIT D - DEOD CONTRACT COMPLIANCE MANUAL (Non-Fed).pdf

METRO (Archive #) TBD (IFB/RFP No.)

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

PRO FORM 088

REV. DATE: 07.07.2025

DIVERSITY & ECONOMIC OPPORTUNITY DEPARTMENT

SBE/DVBE CONTRACT COMPLIANCE MANUAL (NON- FEDERAL)

SECTION 100 - SMALL BUSINESS ENTERPRISE PROGRAM/ DISABLED

VETERAN BUSINESS ENTERPRISE PROGRAM

100 METRO POLICY STATEMENT:

The Los Angeles County Metropolitan Transportation Authority (Metro) is the recipient of non-federal funds from state and local funding sources. Metro is also the recipient of non-U.S. Department of Transportation (USDOT) federal funding sources. It is Metro’s policy to provide maximum opportunity for Small Business Enterprises(s), Local Small Business Enterprise(s), and Disabled Veteran Business Enterprise(s) to compete and to foster increased SBE/DVBE participation in its procurement and contracting program.

Metro shall take all necessary and reasonable steps to ensure nondiscrimination in the award and administration of non-federal funds.

• To take all reasonable steps to ensure nondiscrimination in the award and administration of non-federally funded contracts.

• To create a level playing field on which SBE/DVBEs can compete fairly for Metro contracts.

• To ensure that only firms that fully meet the eligibility requirements of the Metro SBE/DVBE Program and the California Department of General Services (DGS) certification criteria are permitted to participate as SBE/DVBEs.

• To help remove barriers to the participation of SBE/DVBEs in Metro contracts.

• To assist the development of firms that can compete successfully in the marketplace outside the SBE/DVBE program.

101 INTERPRETATION:

Any conflict, error, omission, or ambiguity which may arise between these instructions, California law, and Metro’s SBE/DVBE Program shall be resolved first in favor of California Law and second in favor of Metro’s SBE/DVBE program. Failure of a bidder or its subcontractors, consultants, suppliers, or other entities to carry out these requirements may be grounds for Metro to implement administrative penalties or other remedies imposed by Metro.

102 NON-DISCRMINATION:

Metro’s policy ensures that SBE/DVBE firms have an equal opportunity to receive and participate in projects that are state and/or locally funded. It is also Metro policy to ensure that there is no discrimination in the award and participation on the basis of race, color, national origin, or sex, in contract competition, award and performance.

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

103 INCORPORATION OF THE SBE/DVBE PROGRAM INTO THE CONTRACT:

The Board approved SBE Program adopted by Metro is hereby incorporated by reference into this contract as though set forth in full. Implementation of this program is a legal obligation and failure to carry out its terms shall be treated as a material breach of this contract. The Contractor and all project subcontractors are subject to the requirements of the SBE Program and to all requirements of the SBE program. Metro will investigate any allegation of the Contractor, subcontractor, or any other participating business failing to carry out the requirements of this SBE Program. Should this investigation find merit in the allegations, Metro may pursue legal and/or contractual remedies and/or impose sanctions as provided for in the SBE program.

The Diversity & Economic Opportunity Department (DEOD) Contract Compliance Manual (Non-Federal) is a component of this Contract. It describes the SBE/DVBE Program requirements applicable to this Contract. The provisions and enforcement mechanisms set forth in the Contract Compliance Manual are in addition to all other provisions and enforcement mechanisms available to Metro set forth elsewhere in this Contract. The Contractor’s compliance with the SBE/DVBE Program requirements will be monitored by Metro throughout the life of the contract.

104 GENERAL CONDITIONS AND SPECIAL PROVISIONS:

The General Conditions and Special Provisions of the subject Contract are incorporated by reference.

105 METRO ASSURANCE:

It is the policy of Metro to ensure that no person is excluded from participation, denied benefits, or otherwise discriminated against in connection with the award and performance of a contract on the basis of race, color, sex, religion, or national origin.

Metro will not directly or indirectly, through contractual or other arrangements, use criteria or methods of administration, that defeat or substantially impair the objectives of the SBE/DVBE Program on the basis of an individual’s race, color, sex, religion, or national origin.

106 MISREPRESENTATION:

Suspension or debarment proceedings may be initiated against any firm when:

A. Attempts to participate in the Metro SBE/DVBE Program as an SBE/DVBE if the firm does not meet the eligibility criteria stated in the Certification Standards for SBE/DVBE programs and if it attempts to participate on the basis of false, fraudulent, or deceitful statements or representations or under circumstances indicating a serious lack of business integrity or honesty.

B. In order to meet the SBE/DVBE subcontracting goals or other SBE/DVBE program requirements uses or attempts to use on the basis of false, fraudulent, or deceitful statements or representations, another firm that does not meet the SBE/DVBE eligibility criteria stated in the certification standards.

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

In either case, Metro shall take action through the Diversity & Economic Opportunity Department and/or Metro’s Office of Inspector General further action and may refer the matter for prosecution under appropriate criminal statutes.

107 AUDIT AND INSPECTION:

The Contractor shall maintain records of all subcontracts entered into with SBE/DVBE firms and records of materials purchases from SBE/DVBE suppliers. Such records shall include the name, business address of each SBE/DVBE subcontractor or suppler, and the total dollar amount actually paid to each SBE/DVBE subcontractor or supplier. Metro reserves the right to audit the records and inspect the facilities of its contractors and any subcontractors of any tier for the purpose of verifying the SBE/DVBE participation and/or adherence to the SBE/DVBE program requirements. Contractor records shall be maintained for five years from contract completion and be made available upon request for Metro contracting studies. Contractors and subcontractors shall permit access to their records at the request of Metro. Notice is hereby given that state and local authorities may initiate or cooperate with Metro in auditing and inspecting such records.

SECTION 200 - SBE/DVBE PARTICIPATION

200 METRO OVERALL SBE and DVBE GOAL:

Metro has set an overall goal for SBE and DVBE participation. The overall SBE and DVBE goals apply to non-federally funded contracts Metro expects to expend for the fiscal year. Metro will strive to meet its overall goal through race neutral measures. Metro supports the use of race neutral measures to facilitate participation of SBE and DVBE and other small businesses and encourages prime contractors to subcontract portions of their work that they might otherwise perform with their own forces. To ascertain whether the overall SBE and DVBE goals are being achieved, Metro will track the dollar amount paid to all certified SBE and DVBE firms performing work called for in this contract that is eligible to be credited toward Metro’s overall goal.

201 SBE/DVBE COMMITMENT(S):

After contract award, SBE and DVBE commitment percentages listed in the bid/proposal will be monitored and enforced from contract inception through contract completion.

Failure to meet the SBE and DVBE commitment may result in penalties and/or administrative sanctions. SBE and DVBE administrative requirements are referenced in this Contract Compliance Manual (Non-Federal) and incorporated as part of the conformed contract.

202 CHANGES IN WORK LISTED TO SBE/DVBE FIRMS:

If Metro or the Contractor proposes changes for work contracted to an SBE or DVBE, the Contractor is required to notify the SBE or DVBE firm in writing within 10 working days prior to execution of the proposed change, reduction, or deletion of any work listed at time of contract award or after contract award.

The dollar amount of changes, as a result of contract modifications, change orders, or provisions sums, that increase or decrease the work commitment to an SBE or DVBE

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) firm(s) will be commensurately added to or subtracted from the total contract amount used to compute actual dollars paid to the SBE or DVBE. Failure to comply with Section 205 (“Crediting and Counting SBE/DVBE Participation”) will be cause for non-compliance and assessment of administrative sanctions.

203 COMMERCIAL USEFUL FUNCTION (CUF):

To receive SBE/DVBE participation credit towards the SBE/DVBE contract commitments, SBE/DVBE firm(s) must perform a commercially useful function (CUF).

An SBE/DVBE must perform at least 30% of its listed work with its own workforce or must not subcontract a greater portion of the work than would be expected on the basis of normal industry practices for that type of work. SBE/DVBE firms must be responsible for the execution of the work and carrying out its responsibilities by actually performing, managing, and supervising the work involved and normal industry practices.

To perform a commercially useful function, the SBE/DVBE 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. To determine whether an SBE/DVBE is performing a commercially useful function, Metro will evaluate 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 SBE/DVBE credit claimed for its performance of the work, and other relevant factors.

An SBE/DVBE 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 SBE/DVBE participation. In determining whether a SBE/DVBE is such an extra participant, Metro will examine similar transactions, particularly those in which SBE/DVBEs do not participate.

204 VIOLATION OF COMMERICAL USEFUL FUNCTION:

If an investigation reveals that there has been a violation of the CUF provisions, that portion of the work found to be in violation will not be credited toward the SBE/DVBE commitment for the contract. Expenditures to an SBE/DVBE subcontractor or supplier will count toward SBE/DVBE commitment only if the SBE/DVBE subcontractor or supplier performs a commercial useful function.

If it is presumed that an SBE/DVBE is not performing a commercially useful function, Metro will ask the Contractor to submit a corrective action plan (CAP) to DEOD within five (5) Business Days of the noncompliant CUF determination. The CAP must identify how the contractor will correct the noncompliance findings for the remaining portion of the SBE/DVBE’s work. Metro has five (5) Business Days to review the CAP in conjunction with the prime contractor’s review. The Contractor must implement the CAP within five (5) Business Days of the Metro’s approval. DEOD decisions on CUF determinations are administratively final and may not be appealed to Metro.

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

204 USE OF JOINT CHECKS

A joint check may be used between the Contractor or lower-tier subcontractor and an SBE/DVBE if the contractor obtains prior written approval from Metro for the proposed use of joint check. the use of joint checks with SBE/DVBE firms. By a joint check, Metro means a check issued by a prime contractor to an SBE/DVBE subcontractor and to a material supplier or another third party for items or services to be incorporated into a project.

To use a joint check, the following conditions must be met:

• All parties, including the Contractor, must agree to the use of a joint check

• Entity issuing the joint check acts solely to guarantee payment

• SBE/DVBE must release the check to the material supplier

• Metro must authorize the request before implementation

• Any party to the agreement must provide requested documentation within 10

• days of Metro’s request for the documentation

• Agreement to use a joint check must be short-term, not to exceed 1 year, allowing sufficient time needed to establish or increase a credit line with the material supplier.

A request for a joint check agreement may be initiated by any party. If a joint check is used, the SBE/DVBE remains responsible for performing a CUF. Failure to comply with the above requirements disqualifies SBE/DVBE participation and results in no credit and no payment to the Contractor for SBE/DVBE participation.

A joint check may not be used between the Contractor or subcontractor and an SBE/DVBE regular dealer, bulk material supplier, manufacturer, wholesaler, broker, trucker, packager, manufacturer’s representative, or other persons who arrange or expedite transactions.

206 SBE/DVBE’S WORK FORCE:

The SBE/DVBE shall solicit, hire, place on its payroll, direct, and control all workers performing work under its contract. The SBE/DVBE owner or its superintendent shall, on a full-time basis, supervise and control the work of the contract. The SBE/DVBE may, with the prior written consent of Metro, augment its work force with personnel of another firm. Metro shall approve the request in writing only when specialized skills are required, and the use of such personnel is for a limited time period.

The SBE/DVBE’s utilization of labor, supervisory personnel, equipment, and material in the performance of the subcontract must be consistent with industry standards and demonstrate that the SBE/DVBE (and not some other business entity) is actually performing the contracted scope of work. An SBE/DVBE does not perform a CUF when it associates too closely with another business entity’s work force, including the use of equipment or materials.

207 COUNTING SBE PARTICIPATION:

Metro will count SBE/DVBE participation, for firms performing a CUF, in accordance with

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

49 CFR Part 26.55. When an SBE/DVBE participates in a contract, Metro will count only the value of the work actually performed by the SBE/DVBE toward the SBE/DVBE contract goal(s).

A. SBE/DVBE as the Prime Contractor: 100% SBE/DVBE credit for that portion of the work performed by the SBE/DVBE’s own forces, including the cost of materials and supplies, for a construction contract, obtained by the SBE/DVBE for the work of the contract, including supplies purchased or equipment leased by SBE/DVBE (except supplies and equipment the SBE/DVBE subcontractor purchases or leases from the prime contractor or its affiliates). When an SBE/DVBE subcontracts part of the work of its contract to another firm, the value of the subcontracted work may be counted toward SBE/DVBE goals only if the SBE/DVBE’s subcontractor is itself an SBE/DVBE. Work that an SBE/DVBE subcontracts to a non-SBE/DVBE firm does not count toward SBE/DVBE contract goal(s).

B. SBE/DVBE as a Joint Venture Contractor: 100% SBE/DVBE credit shall apply to the clearly defined and distinct portion of work performed by the SBE/DVBE’s own workforce.

C. SBE/DVBE as a Subcontractor: 100% SBE/DVBE credit shall apply to the subcontract work performed with the SBE/DVBE’s own forces, including the cost of materials and supplies (does not include: the purchase of materials and supplies or the lease of equipment by the SBE/DVBE subcontractor from the prime contractor or its affiliates). Work that an SBE/DVBE subcontractor subcontracts to a non- SBE/DVBE firm shall not be credited towards the SBE/DVBE contract goal.

D. Counting Expenditures with SBE/DVBEs for Materials or Supplies:

a. If the materials or supplies are obtained from an SBE/DVBE manufacturer, count 100 percent (100%) of the cost of the materials or supplies toward SBE/DVBE goals.

i. A manufacturer is a firm that owns (or leases) and operates a factory or establishment that produces, on the premises, the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications. Manufacturing includes blending or modifying raw materials or assembling components to create the product to meet contract specifications. When an SBE/DVBE makes minor modifications to the materials, supplies, articles, or equipment, the SBE/DVBE is not a manufacturer. Minor modifications are additional changes to a manufactured product that are small in scope and add minimal value to the final product.

b. If the materials or supplies are purchased from an SBE/DVBE regular dealer, count 60 percent (60%) of the cost of the materials or supplies (including transportation costs) toward SBE/DVBE goals.

i. A regular dealer is a firm that owns (or leases) and-operates, a store, warehouse, or other establishment in which the materials, supplies, articles, or equipment of the general character described by the

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) specifications and required under the contract are bought, kept in sufficient quantities, and regularly sold or leased to the public in the usual course of business. Items kept and regularly sold by the SBE/DVBE are of the ‘‘general character’’ when they share the same material characteristics and application as the items specified by the contract.

1. To be a regular dealer, the firm must be an established business that engages, as its principal business and under its own name, in the purchase and sale or lease of the products in question. An SBE/DVBE supplier performs a CUF as a regular dealer and receives credit for 60 percent of the cost of materials or supplies (including transportation cost) when all, or at least 51 percent of, the items under a purchase order or subcontract are provided from the SBE/DVBE’s inventory, and when necessary, any minor quantities delivered from and by other sources are of the general character as those provided from the SBE/DVBE’s inventory.

2. An SBE/DVBE may be a regular dealer in such bulk items as petroleum products, steel, concrete or concrete products, gravel, stone, or asphalt without owning, operating, or maintaining a place of business if the firm both owns and operates distribution equipment used to deliver the products.

Any supplementing of regular dealers’ own distribution equipment must be by a long-term operating lease and not on an ad hoc or contract-by-contract basis.

3. An SBE/DVBE supplier of items that are not typically stocked due to their unique characteristics (e.g., limited shelf life or items ordered to specification) will be considered in the same manner as a regular dealer of bulk items section above. If the SBE/DVBE supplier of these items does not own or lease distribution equipment, as described above, it is not a regular dealer.

4. Packagers, brokers, manufacturers’ representatives, or other persons who arrange, facilitate, or expedite transactions are not regular dealers within the meaning of this section and are not eligible for 60% credit.

c. If the materials or supplies are purchased from an SBE/DVBE distributor that neither maintains sufficient inventory nor uses its own distribution equipment for the products in question, count 40 percent (40%) of the cost of materials or supplies (including transportation costs).

i. An SBE/DVBE distributor is an established business that engages in the regular sale or lease of the items specified by the contract. An SBE/DVBE distributor assumes responsibility for the items it purchases once they leave the point of origin (e.g., a manufacturer’s facility), making it liable for any loss or damage not covered by the carrier’s insurance. An

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED)

SBE/DVBE distributor performs a CUF when it demonstrates ownership of the items in question and assumes all risk for loss or damage during transportation, evidenced by the terms of the purchase order or a bill of lading (BOL) from a third party, indicating Free on Board (FOB) at the point of origin or similar terms that transfer responsibility of the items in question to the SBE/DVBE distributor. If these conditions are met, SBE/DVBE distributors may receive 40 percent for drop-shipped items.

Terms that transfer liability to the distributor at the delivery destination (e.g., FOB destination), or deliveries made or arranged by the manufacturer or another seller do not satisfy this requirement and are not eligible for 40% credit.

d. With respect to materials or supplies purchased from an SBE/DVBE that is neither a manufacturer, a regular dealer, nor a distributor, count the entire amount of fees or commissions charged that you deem to be reasonable, including transportation charges for the delivery of materials or supplies. Do not count any portion of the cost of the materials and supplies themselves.

Metro will determine the amount of credit awarded to a firm for the provisions of materials and supplies (e.g., whether a firm is acting as a regular dealer, distributor, or a transaction facilitator) on a contract-by-contract basis.

B. SBE/DVBE as a Trucker: Metro will use the following factors when counting

SBE/DVBE participation for an SBE/DVBE trucking company:

a. The SBE/DVBE 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 SBE/DVBE goals.

b. The SBE/DVBE must itself own and operate at least one fully licensed, insured, and operational truck used on the contract.

c. The SBE/DVBE 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 employs.

d. The SBE/DVBE may lease trucks from another SBE/DVBE firm, including an owner-operator who is certified as an SBE/DVBE. The SBE/DVBE who leases trucks from another SBE/DVBE receives credit for the total value of the transportation services the lessee SBE/DVBE provides on the contract.

(1) The SBE/DVBE may also lease trucks from a non-SBE/DVBE firm, including from an owner-operator. The SBE/DVBE that leases trucks equipped with drivers from a non-SBE/DVBE is entitled to credit for the total value of transportation services provided by non-SBE/DVBE leased trucks equipped with drivers not to exceed the value of transportation services on the contract provided by SBE/DVBE-owned trucks or leased trucks with SBE/DVBE employee drivers. Additional participation by non-SBE/DVBE owned trucks

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) equipped with drivers receives credit only for the fee or commission it receives as a result of the lease arrangement.

(2) The SBE/DVBE may lease trucks without drivers from a non-SBE/DVBE truck leasing company. If the SBE/DVBE leases trucks from a non-SBE/DVBE truck leasing company and uses its own employees as drivers, it is entitled to credit for the total value of these hauling services.

(3) For purposes of this paragraph (d), a lease must indicate that the SBE/DVBE has exclusive use of and control over the truck. This does not preclude the leased truck from working for others during the term of the lease with the consent of the SBE/DVBE, so long as the lease gives the SBE/DVBE absolute priority for use of the leased truck. Leased trucks must display the name and identification number of the SBE/DVBE.

SECTION 300 - ADMINISTRATIVE REQUIREMENTS

300 SBE CERTIFICATION REQUIREMENTS

A firm only holding a current SBE certification issued by Metro may participate in the Metro SBE Program. SBE firms bidding/proposing as primes or listed as a subcontractor to meet established SBE goals must be certified by bid/proposal due date. Metro has a responsibility to ensure that eligible SBE firms participate in the award of Metro contracts. If not, that firm’s participation may not be counted as SBE participation in the contract. Bidders/Proposers shall ensure SBE firms are certified in the North American Industry Classification System (NAICS) codes for the work in which the SBE firm is listed to perform and for which the Bidder/Proposer seeks SBE credit towards its SBE commitment.

Metro follows the standards and procedures defined by Metro’s SBE Program Subpart E to determine whether an applicant is eligible for SBE certification. Interested individuals or companies will start the process by completing a SBE online application at https://metro.gob2g.com/

301 DVBE CERTIFICATION REQUIREMENTS

Metro has a responsibility to ensure that eligible DVBE firms participate in Metro contracting. Metro follows DGS criteria to determine whether an applicant holds a current DVBE Certification. A firm holding a current certification as an eligible Disabled Veteran Business Enterprise (DVBE) from the California Department of General Services (DGS) may participate in Metro’s SBE/DVBE Program. Firms listed by Bidders/Proposers to meet an established DVBE subcontracting goal must be certified by bid due date. If not, that firm’s participation may not be counted as DVBE participation in the contract. Bidders/proposers can search for current DGS certified DVBE firms at the following website: https://caleprocure.ca.gov/pages/publicsearch/supplier-search.aspx.

For an updated list of DVBE eligibility criteria and application instructions see the following website: https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx?psNewWin=true.

https://metro.gob2g.com/ https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx?psNewWin=true https://caleprocure.ca.gov/pages/PublicSearch/supplier-search.aspx?psNewWin=true

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302 SBE/DVBE CERTIFICATION STATUS:

If a subcontractor becomes a certified SBE or DVBE during the life of the contract, the Contractor shall notify DEOD in writing with the date of certification to be counted toward the Contractor’s SBE/DVBE commitment subject to compliance with the substitution and addition requirements, if applicable. The Prime and SBE/DVBE firm shall notify Metro of any change to its certification status. If an SBE/DVBE firm’s certification is removed, the Prime and SBE/DVBE firms shall notify Metro. The counting of SBE/DVBE firm participation, if deemed ineligible, will be determined based on Metro’s SBE program.

303 SBE DECERTIFICATION AND SUSPENSION:

A SBE remains certified until a Notice of Decision (NOD) is issued. Decertification has the following effects on a contract and the counting of SBE participation:

1. When a prime contractor has made a commitment to use a decertified firm, but a subcontract has not been executed before a decertification notice is issued, the SBE does not count toward the contract goal and the prime contractor is directed to meet the contract goal with an eligible SBE or demonstrate it has made good faith efforts to do so.

2. When Metro has made a commitment to use a SBE prime contractor, but a contract has not been executed before a decertification notice is issued, the decertified firm does continue to receive credit toward the SBE goal for the firm’s work but does not count toward Metro’s overall SBE goal.

3. If a prime contractor has executed a subcontract with the firm before the SBE has been notified of its decertification, the prime contractor may continue to use the firm and may continue to receive credit toward the SBE goal for the firm’s work.

However, the prime contractor may not extend or add work to the contract after the firm was notified of its decertification without prior written consent from Metro.

4. If Metro executed a prime contract with a SBE that is later decertified, the portion of the decertified firm’s performance of the contract remaining after the notice of decertification is issued, will not count toward Metro’s overall goal, but the SBE’s performance of the contract may continue to count toward satisfying the contract goal.

5. If a SBE is decertified solely because it exceeds the business size standard during the performance of the contract, Metro may continue to count the portion of the decertified firm’s performance of the contract remaining after the notice of decertification toward the contract goal and Metro’s overall goal.

6. If a SBE is decertified because it was acquired by or merged with a non-SBE, Metro will not continue to count the portion of the decertified firm’s performance on the contract remaining after the decertification toward either the contract goal or Metro’s overall goal, even if the prime contractor has executed a subcontract with the firm or Metro has executed a prime contract with the SBE that was later decertified. In this case, if eliminating the credit of the decertified firm will affect the prime contractor’s

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) ability to meet the contract goal, the prime contractor must replace the decertified firm with an eligible SBE to the extent needed to meet the contract goal or demonstrate good faith efforts to do so.

7. If a SBE’s certification status is suspended, the SBE shall not be considered to meet a contract goal or count toward participation credit on contracts executed during the suspension period.

304 LOCAL SMALL BUSINESS ENTERPRISE (LSBE) PREFERENCE

An LSBE prime or LSBE subcontractor listed by a prime contractor to receive an LSBE preference, in accordance with LACMTA’s LSBE Preference policy, are hereinafter referred to as SBEs.

SECTION 400 - CONTRACT COMPLIANCE MONITORING

400 CREATE A LEVEL PLAYING FIELD OF OPPORTUNITY TO PARTICIPATE:

The Contractor shall ensure that SBE/DVBEs it has committed to in its bid/proposal have a level playing field to successfully perform their contract responsibilities and further commits to meet the SBE/DVBE Commitment of Record for the contract. These efforts should include but are not limited to the following:

A. Negotiate in good faith to attempt to finalize subcontract and supply agreements with

SBE/DVBEs listed in its bid/proposal.

B. Continue to provide assistance to SBE/DVBE subcontractors or SBE/DVBE suppliers in obtaining bonding, lines of credit, or other capital financing through referral to the DOT Bond Assistance Program (800) 532-1169.

C. Contractors who failed to meet the SBE/DVBE goals established for the contract, but who were determined by Metro to have fulfilled the requirements to meet the goal, shall make additional documented efforts to seek out and utilize additional first tier SBE Subcontractors and Suppliers to increase SBE participation, during the life of the contract.

D. Contractor shall immediately inform DEOD of any problems anticipated or concerns in achieving the SBE/DVBE commitment agreed upon at the time of award.

E. Issue the SBE/DVBE(s) a written notice of any potential problem and provide a reasonable time frame for the SBE/DVBE to remedy the problem. The Contractor shall, concurrently with the issuance of the notice to the SBE/DVBE, send a copy of the notice by First Class mail, postage prepaid, to the Diversity & Economic Opportunity Department (DEOD). In instances where the SBE/DVBE fails to remedy the problems identified in the notice, the Contractor shall within sixty (60) days of the first written notice to the SBE/DVBE firm, take the steps outlined in Section 5.0 RESOLUTION OF DISPUTES BETWEEN CONTRACTOR AND (SBE/DVBE) SUBCONTRACTORS, prior to formally requesting approval from Metro to substitute an SBE/DVBE. Failure to comply with this section will be cause for non-compliance and assessment of administrative sanctions.

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401 REVIEW AND MONITORING SYSTEM:

This section describes the review and monitoring system to ensure that all contractors, subcontractors, consultants, vendors, suppliers, dealers, brokers and other sources, and all Metro departments comply with the SBE/DVBE requirements and all other contract provisions related to SBE/DVBE participation. Metro will also provide monitoring and enforcement mechanisms to verify that work committed to SBE/DVBEs at contract award is actually performed by the SBE/DVBEs.

Non-compliance by the Contractor with the SBE/DVBE contract requirements constitutes a breach of contract, and requires, at a minimum, a written explanation and documented description of the contractor’s efforts. Failure to comply may result in: (1) mandatory participation in an SBE/DVBE Program Training Session, reviewing the performance, accountability, record keeping and reporting aspects of the SBE/DVBE Program, and/or

(2) termination of the contract, and/or (3) administrative sanctions, and/or (4) other appropriate remedies.

402 KICK-OFF MEETING:

Both the Contractors and the Subcontractor(s) or a designee shall attend the kick-off meeting concerning SBE/DVBE requirements and other matters, prior to or immediately after the initial Notice to Proceed is issued as applicable. The Contractor shall be responsible for informing the Subcontractors of all SBE/DVBE requirements as specified by LACMTA herein. The Contractor shall also participate in the DEOD Monthly SBE/DVBE Compliance meeting, if applicable.

403 REPORTING SBE/DVBE PARTICIPATION:

Contractor and all subcontractors (SBE and DVBE and non-SBE/DVBE firms) shall report payment details to Metro using the web-based B2GNow by the 15th of each month. B2Gnow allows Contractors to manage their own records, maintain accurate contract information, and report payment details online, and submit system generated report to Metro. B2Gnow is mandatory for Contractors and subcontractors to use unless Metro instructs otherwise. Metro will provide the Contractor, subcontractors, suppliers, brokers, and truckers initial online training, login and password information, at no cost to the Contractor or its subcontractors, suppliers, and truckers. Contractor shall have fourteen (14) working days from Notice to Proceed (NTP) to register and obtain login and password with the B2Gnow. Subcontractors, at all tiers, shall register within thirty

(30) working days of the NTP. The Contractor is responsible for ensuring that all subcontractors, suppliers, brokers, and/or truckers (at all tiers), both SBE and DVBE and non-SBE/DVBE firms participate in the B2Gnow based webinar trainings to comply with the verification of payments and other related reporting requirements through the software system.

After award, Contractor will receive instructions on how to set up their account and enter required Subcontractor data. Contractor must require each of its subcontractors (SBE and DVBE and non-SBE/DVBE) to enter required payment information into B2Gnow.

Contractor shall submit all monthly reports, subcontractor agreements, and documents through the B2Gnow to Metro review and approval. Failure of Contractor or its

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) subcontractors to enter required information on a timely basis may result in delay of payment by Metro and assessment of SBE/DVBE non-compliance for reporting requirements as identified in Section 800 of this Manual. For the Small Business Programs Reporting System Contractor and Subcontractor User Guide please click on the following link:

http://media.metro.net/uploads/Metro_Connect/SBCRS%20USER%20GUIDE.pdf

1. CONTRACT COMPLIANCE SUBMITTALS

A. CONTRACTOR MONTHLY SBE/DVBE PROGRESS REPORT (FOR PROJECTS

OVER $100M)

The Contractor shall submit timely and complete monthly progress report summarizing the overall status of commitments to SBE/DVBE firms, attainments to SBE/DVBE firms, and prompt payment/retainage for all firms (SBE/DVBE and non- SBE/DVBE firms) performing on this contract.

The monthly progress report shall be updated to Metro by the 15th day following the reporting month. The monthly report shall provide, at a minimum, the following information:

1. General Contract Value Information: The following general contract value information must be provided:

a. Original Contract Amount

b. Running Total of Change Order Amount

c. Current Contract Amount

d. Amount Paid to Contractor during each month

e. Amount Paid to Contractor from inception to Date

f. SBE/DVBE Contract Goal

g. Total Dollar Amount of SBE/DVBE Commitment

h. SBE/DVBE Commitment as Percentage of Current Contract Amount

2. Contractor/Subcontractor Information: The following general information shall be prepared for the Contractor and each subcontractor (at every tier level): Name, address, phone, SBE/DVBE status, contact person, contractor(s), name, date contract agreement signed, scope of work, anticipated first date of performance and anticipated last date of performance.

3. Shortfall Mitigation Plan: Contractor may be notified to submit a Shortfall Mitigation Plan, at any time, throughout the life of the project, if the utilization of SBE/DVBE firms is not consistent with the Contractor’s commitment at the time of contract award.

a. Forecast Chart: Time-based cumulative curve showing planned vs.

actual attainment throughout the life of the project.

http://media.metro.net/uploads/Metro_Connect/SBCRS%20USER%20GUIDE.pdf

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4. Supplemental Reports: Metro reserves the right to request additional reports to evaluate Contractor’s performance in meeting SBE/DVBE commitment and compliance with program requirements.

5. SBE/DVBE Trucking Verification Report (For Construction Projects Requiring Trucking): The Contractor must develop and submit an SBE/DVBE Trucking Verification Report, for Metro DEOD approval, prior to commencing any trucking activity. The Contractor must report, by the fifth (5th) day of each month, for the preceding month’s trucking activity. The Contractor shall submit documentation showing the amount paid to SBE/DVBE trucking companies listed to perform on the contract. This monthly documentation shall indicate the portion of revenue paid to SBE/DVBE trucking companies which is claimed toward SBE/DVBE participation. The Contractor shall also obtain and submit documentation to the DEOD showing the amount paid by SBE/DVBE trucking companies to all firms, including owner-operators, for the leasing of trucks.

a. The SBE/DVBE who leases trucks from a non-SBE/DVBE is to credit only for the fee or commission it receives as a result of the lease arrangement.

The records must confirm that the amount of credit claimed toward SBE/DVBE participation conforms with Section 207.

b. The Contractor shall also obtain and submit documentation showing the truck number, owner’s name, California Highway Patrol CA number and if applicable, the SBE/DVBE certification letter of the owner of the truck for all trucks used during that month for which SBE/DVBE participation will be claimed. The Contractor shall promptly pay SBE/DVBE trucking companies in accordance with the prompt payment provisions prescribed in herein.

6. For Contracts that Require a Small Business Engagement Outreach Plan

(EOP) – FOR PROJECTS OVER $100M.

The EOP shall but is not limited to:

a. Assessment of SBE/DVBE and small business outreach event(s) held by Proposer prior to the Phase 2 Work Proposal Due Date, including a description of Proposer’s plan to follow-up with SBE/DVBE firms and small businesses.

b. Identify a Small Business Liaison Officer to oversee Contactors outreach efforts to engage the small business communities.

c. Identify strategies for advertising of contracting opportunities.

d. Identify where contracting opportunities will be posted.

e. Identify assistance provided to small and disadvantaged business community during the bidding process.

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f. Identify strategies to engage potential protégé’s in support of the Mentor Protégé Contracting and Outreach Mentoring Program (COMP) requirements.

g. Identify methods used to engage with minority and women-owned firms and professional organizations.

h. Identify methods used to provide Project updates to the small and disadvantaged business community; and

i. Development of a Project website.

j. Provide monthly updates to the EOP as part of its monthly reporting requirement.

Failure to comply with this section shall be cause for non-compliance and assessment of administrative sanction(s) as outlined in Section 800 - SANCTIONS FOR VIOLATIONS of this Manual.

7. For Contracts $25M and Above: SBE/DVBE Contracting Outreach and Mentoring Plan (COMP):

A. The Contractor shall:

a. Comply with the COMP requirements as outlined herein;

b. Mentor the required number of protégés, as identified;

c. For Post-Award COMP Submittal Only, the Contractor must submit its COMP no later than 45 days after execution of the Contract with Metro. The post-award COMP submittal must include a completed Protégé Pre- Assessment Form (attached to this Manual) and executed Mentor Protégé Agreement (MPA) for all SBE/DVBE firms identified for protégé development in the COMP.

d. Bidders/Proposers are strongly encouraged to expand their subcontracting networks by including firms with whom they have not previously partnered, particularly small and disadvantaged businesses.

e. Firms must be Metro certified SBE, DBE or DVBE certified before they are proposed in the COMP to be eligible for participation in the COMP program.

f. Firms listed as a Protégé in the Contractor’s COMP must be utilized during the performance of the contract. The Contractor may not terminate an approved Protégé without DEOD’s prior written approval.

B. Examples of protégé development assistance may include:

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) accounts receivable, marketing, business forecasting and associated budgeting, human resource and information technology development, selection techniques for insurance and banking relationships.

2. Assistance in preparation of change orders, claim filing, resolution of dispute scheduling and other aspects of performance.

3. Assistance in the preparation of contract documents, proposals and Statements of Interest.

4. Guidance regarding the protégé’s procedures in accounting for daily actual cost of labor, production and overhead.

5. Identify protégé’s unique challenges and provide a plan to address each challenge.

6. Establishing relationships, teaming agreements;

7. Other areas appropriate for protégé needs.

C. The COMP shall at a minimum, also include the following:

1. The name and address of the mentor and protégé point of contact;

2. Define how the Contractor will track mentor protégé arrangements, measure and evaluate successes and lessons learned, schedules and milestones; submittal of quarterly updates to Metro on the mentor protégé arrangements and overall component;

3. Definitions and roles for the protégé, mentor and Contractor;

4. Define guidelines concerning the withdraw or termination of a mentor protégé agreement; requiring Metro approval prior to termination of protégé agreement; and

5. Ensure that protégé involved in a mentor protégé agreement must be an independent business entity. A protégé must be SBE/DVBE certified before it begins in a mentor protégé arrangement.

D. Protégé Pre-Assessment

Contractor shall submit for review and approval by Metro, a completed Protégé Pre-Assessment form (attached to this Manual) to identify any weaknesses in the Protégé’s financial operations, business planning, project management, construction/professional practices, etc.

E. Mentor-Protégé Agreement

Contractor shall submit, for review and approval by Metro, a detailed Mentor Protégé Agreement (MPA) for each protégé identified for mentor protégé development no later than 45 days after execution of the Contract with Metro.

The MPA shall include, but not limited to, the following:

1. Names of the mentor SBE/DVBE protégé agreeing to the arrangement.

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2. Description of mentoring activities and associated level of effort, including estimate of hours.

3. Deliverables associated with mentoring work.

4. Duties and responsibilities of Mentor and Protégé, including list of key personnel.

5. Benchmarks to measures mentoring progress.

6. Process for evaluating mentor/protégé relationship.

7. Termination provisions.

The Contractor shall submit final executed and signed MPA prior to the protégé beginning work as stated by their contract. The Contractor shall submit to Metro, for its approval, any necessary or proposed revisions and updates to the MPA throughout the Life of Project (LOP).

F. Mentor Protégé Status Report

No later than at the scheduled halfway point or annually if the MPA spans over multiple years, submit a written report on the progress of all mentor protégé(s).

G. Protégé Post-Assessment

Within 30 days of the completion of the MPA, mentors and protégés shall conduct a post assessment of the MPA on the Metro Post-Assessment Form (attached to this Manual) and submit it to DEOD.

Failure to comply with this section will be cause for non-compliance and assessment of administrative sanction(s) as outlined in Section 800 - SANCTIONS FOR VIOLATIONS of this Manual.

B. EXECUTED SBE/DVBE SUBCONTRACT AGREEMENTS: The Contractor shall submit copies of all executed SBE or DVBE and non-SBE/DVBE subcontract agreements, and/or purchase orders (PO) for all firms listed prior to award, within 14 working after the Contractor executes their contract or PO with Metro. For firms added after contract award, the Contractor shall submit subcontract agreements, supplier agreements, and/or purchase orders (PO) via the Request to Add a Subcontractor (RTA) process within fourteen (14) working days after execution.

Failure to comply with this section will be cause for non-compliance and assessment of administrative sanctions, and may include, imposing a special assessment against the Contractor.

The SBE or DVBE and non-SBE/DVBE subcontracts or POs should be sent via email to DEOD Post-Award Compliance Unit (PACU) at sbcomplianceinquiry@metro.net. The Contractor shall incorporate the SBE/DVBE Contract Compliance Manual into each subcontract and/or PO executed under this DOT-assisted contract and each subcontractor, consultant, dealer, broker, vendor, or other source shall agree to the terms and conditions. The Contractor shall mailto:sbcomplianceinquiry@metro.net

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SBE/DVBE CONTRACT COMPL MANUAL(Non-FED) immediately notify DEOD in writing, within the fourteen (14) working days of execution of the prime contract of any problems it may have in obtaining the subcontract agreements from listed SBE/DVBE firms within the specified time.

Failure to notify DEOD may deem the Contractor in non-compliance with this requirement.

The Contractor shall include the following language verbatim in each subcontract agreement the Contractor signs with SBE and DVBE subcontractor(s):

1. CONTRACT ASSURANCE:

The contractor, sub-recipient, or subcontractor shall not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor shall carry out applicable SBE requirements in the award and administration of non-federal contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract or such other remedy as the recipient deems appropriate.

Enforcement: If a contractor or subcontractor fails or refuses to include the contract assurances verbatim in all DOT-assisted contracts, subcontracts and/or purchase orders agreements, Metro may impose penalties and administrative sanctions for non-compliance, as contained in Section 800.

2. PROMPT PAYMENT:

Prompt Payment and Progress Payment language must be included in all non- SBE/DVBE and SBE/DVBE subcontract agreements (at all tier level) verbatim:

Pursuant to the California Business and Professions Code Section 7108.5, the Contractor shall pay each subcontractor under this Contract for satisfactory performance of its subcontract work no later than seven (7) days after its receipt of each Progress Payment from Metro.

3. PROMPT PAYMENT OF RETENTION TO SUBCONTRACTORS:

Prompt Payment of Retention to Subcontractors (Required in all SBE and DVBE and non-SBE/DVBE subcontract agreements verbatim):

The prime contractor agrees further to return retainage payments to each subcontractor within seven (7) days after the subcontractor’s work is satisfactorily completed. The prime contractor and Metro shall provide for prompt and regular incremental acceptances of portions of the subcontractors work to release payment of retention. The prime contractor shall pay all retainage owed to the subcontractor for satisfactory completion of the accepted work within seven (7) days after Metro has inspected and approved subcontractors’ work (at all tier levels). The prime withholding a subcontractor’s retention until the end of the project is not permitted.

Retention must be released upon completion of the SBE/DVBE and non-SBE/DVBE subcontractor’s work.

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For the purposes of this section, a subcontractor's work is satisfactorily completed when all the tasks called for in the subcontract have been accomplished and documented as required by Metro. When Metro has made an incremental acceptance of a portion of a prime contract, the work of a subcontractor covered by that acceptance is deemed to be satisfactorily completed. Upon completion of subcontractor’s work, the prime must inspect the work. If accepted, the prime notifies the Metro PM for inspection.