EXHIBIT D - DIVERSITY AND ECONOMIC OPPORTUNITY DEPARTMENT CONTRACT COMPLIANCE MANUAL (RC-FTA).pdf

EXHIBIT D - DIVERSITY & ECONOMIC OPPORTUNITY DEPARTMENT

CONTRACT COMPLIANCE MANUAL (RC – FTA)

SECTION 100 - DISADVANTAGED BUSINESS ENTERPRISE PROGRAM

100 FEDERAL OBLIGATION:

This contract is subject to the requirements of 49, Code of Federal Regulations, Part 26, Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs.

101 POLICY STATEMENT:

It is Metro’s policy to provide equal opportunity for Disadvantaged Business Enterprises (DBE) firm, as defined in Part 26, receive and participate on DOT-assisted contracts. It is also our policy:

• To ensure nondiscrimination in the award and administration of DOT-assisted contracts;

• To create a level playing field on which DBEs can compete fairly for DOT-assisted contracts;

• To ensure that Metro’s DBE program is narrowly tailored in accordance with applicable law;

• To ensure that only firms that fully meet 49 CFR Part 26 eligibility standards are permitted to participate as DBEs;

• To help remove barriers to the participation of DBEs in DOT-assisted contracts; and

• To assist the development of firms that can compete successfully in the market place outside the DBE program.

102 INTERPRETATION:

Any conflict, error, omission or ambiguity which may arise between these instructions and the federal regulations or the above mentioned DBE Program shall be resolved first in favor of the federal regulation and second the DBE program.

103 INCORPORATION OF THE DBE PROGRAM INTO THE CONTRACT:

49 CFR Part 26 and the DOT approved DBE Program adopted by Metro are 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 DBE Program and to all requirements of the DOT DBE program found at 49 CFR Part 26. Metro will investigate any allegation of the Contractor, subcontractor or any other participating business failing to carry out the requirements of this DBE 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 49 CFR Part 26. In appropriate cases, Metro may also refer the matter to proper Federal authorities for enforcement under 18 U.S.C. 1001 and/or the Program Fraud Civil Remedies Act of 1986 (31 U.S.C. 3801 et seq.).

The Contract Compliance Manual is a component of this contract. It describes the DBE 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 DBE 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:

In accordance with 49 CFR Part 26, 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 DBE 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 that:

Attempts to participate in a DOT-assisted program as a DBE and does not meet the eligibility criteria stated in the Certification Standards for DBE programs; or on the basis of false, fraudulent or deceitful statements; or under circumstances indicating a serious lack of business integrity or honesty.

Attempts to use false, fraudulent or deceitful statements or representations in order to meet its DBE administrative requirements; or uses another firm that does not meet the DBE eligibility criteria stated in the certification standards.

DOT may take action itself through its Fraud and Civil Remedies Program or refer the matter to the Department of Justice for prosecution under appropriate criminal statutes.

107 AUDIT AND INSPECTION:

The Contractor shall maintain records of all DBE subcontractors and suppliers including names, business addresses, and the total dollar amounts actually paid through the term of the contract for five years after contract completion. Metro reserves the right to audit records and inspect the facilities of its contractors or any subcontractor (at any tier) for the purpose of verifying the DBE participation and/or adherence to the DBE program requirements. Contractors and subcontractors shall permit access to their records at the request of Metro. Notice is hereby given that state, local, and federal authorities may initiate or cooperate with Metro in auditing and inspecting such records.

SECTION 200 - DBE PARTICIPATION

200 OVERALL DBE GOAL:

To comply with 49 CFR Part 26, Metro has set an overall goal for DBE participation on its federally assisted contracts. The overall goal applies to federal-aid funds Metro expects to expend for the fiscal year. Metro will strive to meet its overall goal through race conscious and race neutral measures.

Metro supports the use of race conscious and race neutral measures to facilitate participation of DBEs and other small businesses, and encourages prime contractors to subcontract portions of their work that they might otherwise perform with their own workforce. To ascertain whether the overall DBE goal is being achieved, Metro will track payments made to all DBE firms performing work eligible for credit.

201 DBE MEASURES:

Race Conscious (RC) DBE Measures for FTA funded contracts - RC DBE contract goal(s) applies to all federal DBE groups, which includes: African Americans, Asian Pacific Americans, Native Americans, Hispanic Americans, Subcontinent Asian Americans, and Women (including Caucasian Women).

202 RACE NEUTRAL (RN) DBE MEASURES:

The DBE group(s) that have not been found in Metro’s Disparity Study to have significant statistical disparity in Metro contracting and cannot be counted toward the RC DBE contract goal, but will be counted as RN DBE participation in accordance with 49 CFR Part 26.

Participation by all DBE groups will be tracked and reported to meet Metro’s overall DBE goal.

203 DBE COMMITMENT:

The level of DBE participation, which the Contractor commits to at the time of contract award, is the commitment of record and is included in the Special Provision section of the contract. DBE participation will be monitored and enforced though the life of the contract.

204 COMMERCIALLY USEFUL FUNCTION (CUF):

A commercially useful function is performed when the business is responsible for the execution of the work of the contract and is carrying out its responsibilities by actually performing, managing and supervising the work involved. To perform a commercially useful function, the company must also be responsible, with respect to materials and supplies used on the contract, for negotiating price, determining quality and quantity, ordering the material, installing (where applicable) the material and paying for the material itself. To determine whether a company is performing a commercially useful function, you must evaluate the amount of work subcontracted, industry practices, whether the amount of the firm is to be paid under the contract is commensurate with the work it is actually performing and the DBE credit claimed for its performance of the work and other relevant factors.

A DBE prime or subcontractor must perform at least 30% of its listed work with its own workforce or on the basis of normal industry practice, may not subcontract a greater portion of the work than would be expected. On-site CUF Reviews will determine whether the DBE is actively performing, managing, and supervising the contracted scope of work. It shall employ a labor force which is separate and apart from that employed by the prime, and which is independently recruited by the DBE in accordance with standard industry practice.

205 VIOLATION OF COMMERCIAL 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 DBE commitment for the contract. Expenditures to a DBE subcontractor or supplier will count toward DBE commitment only if the DBE subcontractor or supplier performs a commercial useful function.

If a DBE does not perform or exercise responsibility for at least 30 percent of the total cost of its contract with its own work force or the DBE subcontracts a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, Metro must presume that the DBE firm is not engaged in performing a commercially useful function. The presumption that arises can be rebutted within 15 days. Metro’s decisions on CUF matters are administratively final and may not be appealed to DOT.

206 DBE’S WORK FORCE:

The DBE shall solicit, hire, place on its payroll, direct, and control all workers performing work under its contract. The DBE owner or its superintendent shall, on a full-time basis, supervise and control the work of the contract. The DBE 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 DBE’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 DBE (and not some other business entity) is actually performing the contracted scope of work. A DBE 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 DBE PARTICIPATION:

Metro is only able to count toward the achievement of the Contractor’s commitment percentage(s) the value of payments made for CUF work actually performed by DBE firms during the performance of the Contract. There will be no credit for DBE work performed by a non-DBE prime or subcontractor. Metro and the Contractor are governed by the provisions of 49 CFR Part 26.55(c) on questions of commercially useful functions as it affects the work. Specific counting guidelines are provided in 49 CFR Part 26.55, the provisions of which govern over the summary contained herein.

A. DBE as the Prime Contractor: One-hundred percent (100%) DBE credit for that portion of the work performed by the DBE’s own forces, including the cost of materials and supplies and materials, for a construction contract, obtained by the

DBE for the work of the contract, including supplies purchased or equipment leased by DBE (except supplies and equipment the DBE subcontractor purchases or leases from the prime contractor or its affiliates). When a DBE subcontracts part of the work of its contract to another firm, the value of the subcontracted work may be counted toward DBE goals only if the DBE’s subcontractor is itself a DBE.

Work that a DBE subcontracts to a non-DBE firm does not count toward DBE contract goal(s).

B. DBE as a Joint Venture Contractor: One hundred percent (100%) credit for that portion of the total dollar value of the contract equal to the distinct, clearly defined portion of the work performed by the DBE’s own forces.

C. DBE as a Subcontractor: One-hundred percent (100%) credit for the work of the subcontract performed by the DBE’s own forces, including the cost of materials and supplies, excluding the purchase of materials and supplies or the lease of equipment by the DBE subcontractor from the prime contractor or its affiliates.

Work that a DBE subcontractor in turn subcontracts to a non-DBE firm does not count toward the contract goal.

D. DBE as a Regular Dealer (Material Supplier): Sixty percent (60%) DBE credit for the cost of the materials or supplies purchased from a DBE regular dealer.

A regular dealer is a firm that owns, operates, or maintains a store, warehouse, or other establishment in which the materials, supplies, articles or equipment of the general character described by the specifications and required under the contract are bought, kept in stock, and regularly sold or leased to the public in the usual course of business.

To be a regular dealer, the firm must be an established, regular business that engages, as its principal business and under its own name, in the purchase and sale or lease of the products in question.

A person may be a regular dealer in such bulk items as petroleum products, steel, cement, gravel, stone, or asphalt without owning, operating, or maintaining a place of business if the person both owns and operates distribution equipment for the products. Any supplementing of regular dealers' own distribution equipment shall be by a long-term lease agreement and not on an ad hoc or contract-by-contract basis.

Packagers, brokers, manufacturers' representatives, or other persons who arrange or expedite transactions are not regular dealers. Whether a firm is acting as a regular dealer or a transaction expediter is determined by Metro on a contract-by-contract basis.

E. DBE as a Manufacturer: One hundred percent (100%) DBE credit for the cost of materials or supplies obtained from a DBE manufacturer.

A manufacturer is a firm that operates or maintains a factory or establishment that produces, on the premises, the materials, supplies, articles, or equipment required under the contract and of the general character described by the specifications.

F. DBE as a Broker: As a broker, the entire amount of fees or commissions charged for assistance in the procurement of the materials and supplies, or fees or transportation charges for the delivery of materials or supplies required on a job site, will be counted toward DBE goal.

Fees are to be reasonable and not excessive as compared with fees customarily allowed for similar services. Metro will not count any portion of the cost of the materials and supplies themselves toward DBE goal, however.

Firms listed as a Regular Dealer (Material Supplier) or Broker must complete and submit a Supplier/Broker Questionnaire with the bid/proposal.

G. DBE as a Trucker: Metro will use the following factors when counting DBE participation for a DBE trucking company:

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

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

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 employs.

d. 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.

(1) The DBE may also lease trucks from a non-DBE firm, including from an owner-operator. The DBE that leases trucks equipped with drivers from a non-DBE is entitled to credit for the total value of transportation services provided by non- DBE leased trucks equipped with drivers not to exceed the value of transportation services on the contract provided by DBE-owned trucks or leased trucks with DBE employee drivers. Additional participation by non-DBE owned trucks equipped with drivers receives credit only for the fee or commission it receives as a result of the lease arrangement.

(2) The DBE may lease trucks without drivers from a non-DBE truck leasing company. If the DBE leases trucks from a non-DBE 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 DBE 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 DBE, so long as the lease gives the DBE absolute priority for use of the leased truck. Leased trucks must display the name and identification number of the DBE.

208 CHANGES IN WORK LISTED TO DBE FIRMS:

If Metro or the Contractor proposes changes for work contracted to a DBE firm(s), the Contractor is required to notify the DBE firm in writing within ten (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 or any other contract modification, change order, or provisions sums that increase or decrease the work listed to a DBE firm(s) will be commensurately added to or subcontracted from the total contract amount used to compute actual dollars paid to DBEs. Any increase or decrease in the overall contract value does not change the Contractor’s DBE commitment. Failure to comply with Section 208 will be cause for non-compliance and assessment of administrative sanctions.

SECTION 300 - ADMINISTRATIVE REQUIREMENTS

300 DBE STANDARDS:

The Contractor shall ensure that DBEs 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 DBE Goal 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

DBEs listed in its bid/proposal.

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

C. Issue the DBE(s) a written notice of any potential problem and provide a reasonable time frame for the DBE to remedy the problem. The Contractor shall, concurrently with the issuance of the notice to the DBE, email a copy of the notice to the Diversity & Economic Opportunity Department (DEOD). In instances where the DBE fails to remedy the problems identified in the notice, the Contractor shall within sixty (60) days of the first written notice to the DBE firm, take the steps outlined in Section 500

RESOLUTION OF DISPUTES BETWEEN CONTRACTOR AND (DBE)

SUBCONTRACTORS, prior to formally requesting approval from Metro to substitute a DBE. Failure to comply with this section will be cause for non-compliance and assessment of administrative sanctions.

301 DBE CERTIFICATION STATUS:

If a subcontractor becomes a certified DBE 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 DBE commitment subject to compliance with the substitution and addition requirements, if applicable. The Prime and DBE firm shall notify Metro of any change to its certification status. If a DBE firm’s ineligibility is removed, the Prime and DBE firms shall notify Metro. The counting of DBE firm participation if deemed ineligible will be determined based on 49CFR26.87.

302 LOSS OF DBE ELIGIBILITY:

When a DBE firm has been removed from eligibility as a verified DBE firm, the following actions will be taken:

1. When a Contractor has made a commitment to use a DBE firm that is not currently certified, thereby making the Contractor ineligible to receive DBE credit for work performed, the ineligible DBE firm’s work does not count toward the DBE commitment. The Contractor shall meet the DBE commitment with a DBE firm that is eligible to receive DBE credit or must demonstrate it has made good faith efforts to do so.

2. When a Contractor has executed a subcontract with a DBE prior to official notification of the DBE firm’s loss of eligibility, the Contractor may continue to use the firm on the contract and shall continue to receive DBE credit toward the DBE commitment for the subcontractor’s work.

3. When Metro has executed a prime contract with a DBE firm that is certified at the time of contract execution but that is later ruled ineligible, the portion of the ineligible firm’s performance on the contract before the notice of ineligibility is issued shall count toward the contract commitment.

SECTION 400 - CONTRACT COMPLIANCE MONITORING

400 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 DBE requirements and all other contract provisions related to DBE participation.

Non-compliance by the Contractor with the DBE contract requirements or federal regulations constitutes a breach of contract, and requires, at a minimum, a written explanation and documented description of the contractor’s good faith efforts (GFE).

Failure to comply may result in: (1) mandatory participation in a DBE Program Training Session, reviewing the performance, accountability, record keeping and reporting aspects of the DBE Program, and/or (2) termination of the contract, and/or (3) administrative sanctions, and/or (4) other appropriate remedies.

401 CREATE A LEVEL PLAYING FIELD OF OPPORTUNITY TO PARTICIPATE:

The Contractor shall ensure that DBEs have a level playing field to successfully perform the responsibilities of their contract in order to meet its DBE contract commitment.

These efforts include, but are not limited to the following:

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

DBEs listed in its bid/proposal.

B. Continue to provide assistance to DBE Subcontractors or 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 DBE goals established for the contract, but who were determined by Metro to have fulfilled the good faith effort requirements to meet the goal, shall make additional documented efforts to seek out and utilize additional first-tier DBE Subcontractors and Suppliers to increase DBE participation, during the life of the contract.

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

E. Issue the DBE(s) a written Cure Notice of any potential problem and provide a reasonable time frame for the DBE to cure the problem. The Contractor shall, concurrently with the issuance of the Cure Notice to the DBE, send a copy of the Cure Notice by First Class mail, postage prepaid, to the assigned Contract Compliance Officer, DEOD Contract Compliance Manager and to the Contract Administrator. In instances where the DBE fails to cure, the Contractor is then obligated to take the steps outlined in the section herein RESOLUTION OF DBE DISPUTES BETWEEN CONTRACTOR AND DBE SUBCONTRACTORS before formally requesting approval from Metro to substitute a DBE.

402 PRE-CONSTRUCTION (KICK-OFF) MEETING:

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

403 CONTRACT COMPLIANCE SUBMITTALS – REPORTING DBE PARTICIPATION:

Contractor and all subcontractors shall report payment details to Metro using the web-based Small Business Programs Compliance Reporting System (SBCRS) by the 15th of each month. SBCRS allows Contractors to manage their own records, maintain accurate contract information, and report payment details online, and submit system generated report to Metro. SBCRS is mandatory for Contractors and subcontractors to use unless Metro instructs otherwise. Metro will provide the Contractor, subcontractors, suppliers, brokers, and truckers 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 SBCRS. 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 DBE and non-DBE firms participate in the SBCRS 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 to enter required payment information into SBCRS. Contractor shall submit all monthly reports, subcontractor agreements, and documents through the SBCRS to Metro for review and approval. Failure of Contractor or its subcontractors to enter required information on a timely basis may result in delay of payment by Metro and assessment of DBE 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

A. CONTRACTOR MONTHLY DBE PROGRESS REPORT:

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

The monthly progress report shall be submitted 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 Month E. Amount Paid to Contractor Inception to Date F. DBE Contract Goal G. Total Dollar Amount of DBE Commitment H. DBE 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, DBE 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. FORECAST CHART: Time-based cumulative curve showing planned vs. actual attainment for construction.

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

a. DBE Trucking Verification Report: The Contractor must report, by the fifth

(5th) day of each month, for the preceding month's trucking activity. The Contractor shall provide and submit documentation showing the amount paid to DBE and non-DBE trucking companies listed to perform on the contract.

This monthly documentation shall indicate the portion of revenue paid to DBE and non-DBE trucking companies which is claimed toward DBE participation.

The Contractor shall also obtain and submit documentation to the DEOD showing the amount paid by DBE trucking companies to all firms, including owner-operators, for the leasing of trucks.

The Contractor shall also obtain and submit documentation showing the truck number, owner’s name, California Highway Patrol CA number and if applicable, the DBE certification letter of the owner of the truck for all trucks used during that month for which DBE participation will be claimed. The

Contractor shall promptly pay DBE and non-DBE trucking companies in accordance with the prompt payment provisions prescribed in herein.

B. EXECUTED DBE SUBCONTRACT AGREEMENTS:

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

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 Contractor shall include the following language verbatim in each subcontract agreement the Contractor signs with a DBE subcontractor(s):

1. Contract Assurance: The contractor 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 requirements of 49 CFR Part 26 in the award and administration of DOT-assisted 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.

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

3. Prompt Payment: (Required in all DBE and non-DBE subcontract agreements)

a. Pursuant to 49 Code of Federal Regulations (CFR) Part 26 and the California

Business and Professions Code Section 7108.5, the Contractor shall pay each subcontractor under this contract for satisfactory performance of its Work no later than to 7 days after receipt of each Progress Payment received from Metro. Any delay or postponement of payment from the above referenced time may occur only for good cause, and only upon prior written approval by Metro.

b. This clause applies to both DBE and non-DBE. For the purpose of this section, a subcontractor’s work is satisfactorily completed when the Contractor certifies to Metro that all the tasks called in the subcontract have been satisfactorily accomplished and that the

c. (The above language is to be used verbatim, pursuant to federal regulations.)

d. After an investigation, if it is determined that the contractor is in non-compliance with prompt payment provisions, the contractor will receive written details of this deficiency. If additional clarification is required, the contractor must respond to the request within five (5) working days.

The DBE and Non-DBE subcontracts or PO’s should be sent to via email to the DEOD Post-Award Compliance Unit (PACU) at sbcomplianceinquiry@metro.net.

The Contractor shall incorporate the DBE 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 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 DBE firms within the specified time. Failure to notify DEOD may deem the Contractor in non-compliance with this requirement.

C. PROMPT PAYMENT, RETAINAGE AND RETENTION:

Contractor is referred to the General Terms and Conditions concerning Prompt Payment to Subcontractors and Prompt Payment of Withheld Funds to Subcontractors.

The Contractor shall incorporate the Prompt Payment Clause and Retention Clause, set forth above, in all subcontract, broker, dealer, vendor, supplier or PO or other source agreements issued to both DBE and Non-DBE firms. Contractor shall include a prompt payment and retention clause in all DBE and non-DBE subcontracts.

Enforcement: If Metro determines that the prime contractor has failed to (1) include prompt payment language verbatim, (2) promptly pay its subcontractors, or (3) promptly release Retainage, Metro shall give written notice to the Contractor and the Contractor’s Surety that, if the default is not remedied within a specified period of time (at least 5 days), the contract may be terminated. The Contract may be terminated for cause in accordance with the Contract Article TERMINATION FOR DEFAULT. Metro shall also impose penalties and sanctions for non-compliance with the DBE Program as referenced in Section 800 and other requirements of State law.

D. PROMPT PAYMENT OF RETENTION:

Contractor shall promptly release retention to Subcontractors (Required in all DBE and non-DBE subcontract agreements verbatim):

Metro will include the following Retainage clause in each DOT-assisted prime contract: The prime contractor agrees further to return retainage payments to each subcontractor within seven (7) working 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 7 working 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 DBE and non-DBE subcontractors work.

For 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 mailto:sbcomplianceinquiry@metro.net 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. When Metro and prime contractor at any tier, have made an incremental acceptance of a portion of a subcontractor’s work, the work of the subcontractor covered by that acceptance is deemed to be satisfactorily completed. After Metro’s acceptance, the primes must release retention within seven (7) working days.

To assure accepted work and payment, subcontractors must submit acceptable documentation (conditional and unconditional releases, certified payroll, etc.) to the prime. Any delay or postponement of prompt release of retention beyond the seven

(7) working day time limit shall be for good cause and only upon prior written approval by DEOD.

E. For Contracts that Require a DBE Contracting Outreach and Mentoring Plan

(COMP).

The Contractor shall:

1. Comply with the DBE requirement in the Contract Compliance Manual (RC-FTA);

2. Annually, no later than 60 days before the anniversary date of the overall contract, the Contractor shall prepare and submit to LACMTA an updated DBE COMP that includes the next 2 calendar years of subcontracting activities, inclusive of the overall project DBE commitment forecast. At all times over the life of the Project, the DBE Plan shall cover a 2-year period; and

3. Submit a quarterly report on all mentor protégé arrangements; meet with Metro, mentor(s) and protégé(s) annually to report overall progress of the mentor protégé component of the DBE COMP.

F. CONTRACTING OUTREACH AND MENTORING PLAN (COMP): (Post-Award

Submittal Requirement Only)

A. The Contractor shall:

1. Submit a DBE COMP no later than 45 days after the Notice to Proceed (NTP).

The COMP shall include, but not be limited to, the types of business developmental assistance a mentor will provide to the protégé for inclusion in the mentor protégé agreement, how the assistance will be beneficial, description of the subcontract work, and the duration of the mentor protégé arrangement.

2. Mentor the required number of protégé’s identified in the Letter of Invitation Supplement (LOI-03).

3. The Contractor must complete a Protégé Pre-Assessment Form for each identified protégé. The Protégé Pre-Assessment form shall be submitted with the COMP no later than 45 days after the NTP. (Attached to this Manual)

B. Examples of business development assistance may include:

1. Training in technical aspects of operating the business, such as invoicing, 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 DBE 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 CCM) 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, shall be submitted with the COMP no later than 45 days following the NTP.

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

1. Names of the mentor DBE protégé agreeing to the arrangement

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.

G. The Contractor shall submit final executed and signed Mentor-Protégé Agreement 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 LOP.

H. Mentor Protégé Status Report

No later than at the scheduled halfway point, and again no later than 30 days prior to the scheduled completion of the Work, submit a written report on the progress of all mentor-protégé’(s).

I. 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 to DEOD.

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

(EOP).

The EOP shall include but is not limited to:

1. Identify strategies for awareness of the project to the small and disadvantaged business community.

2. Identify strategies for advertising of contracting opportunities.

3. Identify where contracting opportunities will be posted.

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

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

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

7. Identify methods used to provide project updates to the small and disadvantaged business community; and

8. Development of a project website.

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

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.

H. FINAL REPORTING:

The Contractor shall report all final payments in the Metro Small Business Programs Compliance Reporting System (SBCRS) within fourteen (14) working days of final payment.

I. FAILURE TO COMPLY:

If it is determined that the contractor is non-compliant with prompt payment provisions, the contractor will receive written details of this deficiency. If additional clarification is required, the contractor must respond to the request within five (5) working days. Failure to comply may result in the assessment of appropriate administrative sanctions and/or penalties.

1. Assessment for DBE Non-Compliance: If the Contractor fails to comply with the

DBE Program requirements, contract payments shall be reduced by one or more of the following methods:

a. A penalty of five thousand dollars ($5,000) per day, from the date the

Contractor is determined to be in non-compliance with the DBE Program requirements until compliance is determined.

b. Penalties of ten percent (10%) of the total contract value, including any approved change orders, for failure to meet DBE commitments or to demonstrate good faith efforts.

c. Penalties may be deducted from payments due the Contractor, from any funds retained.

2. Dispute Resolution: The Contractor must include in its DBE Subcontract

Agreement(s) the Dispute Resolution provisions in Section 500 of the Contract Compliance Manual (RC-FTA) for disputes arising out of or related to this contract between Contractor and any lower tier Subcontractors which cannot be settled by discussions between the parties involved. The Contractor and Subcontractor, in the event of a dispute to their contract, agree to proceed through informal meetings, mediation, or arbitration, or any combination thereof.

3. Equal Employment Opportunity (EEO) Policy Statement:

1. Contractor shall submit a copy of its EEO Policy Statement. Each construction contractor is covered under Executive Order 11246, as amended if the contract amount exceeds $10,000 and must submit a copy of its Equal Employment Opportunity (EEO) Policy. The EEO policy must also be included in the Contractor’s subcontracts. The policy shall state that the contractor will not discriminate against any employee or applicant for employment because of race, color, religion, sex, or national origin. The contractor will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, color, religion, sex, or national origin. Such action shall include, but not be limited to the following: Employment, upgrading, demotion, or transfer;

recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. The contractor agrees to post in conspicuous places, available to employees and applicants for employment, notices covering all provisions of this nondiscrimination clause.

2. The construction contractor will, in all solicitations or advertisements for employees placed by or on behalf of the contractor, state that all qualified applicants will receive considerations for employment without regard to race, color, religion, sex, or national origin.

SECTION 500 - RESOLUTION OF DISPUTES BETWEEN METRO CONTRACTOR

AND SUBCONTRACTORS

500 INFORMAL MEETINGS:

Disputes between the Contractor and any lower tier DBE subcontractors, which cannot be settled by discussions between the parties involved, shall be settled as described herein. Contractor shall notify Metro of such dispute within ten 10 days of failure to resolve through written cure notice process described above.

These provisions shall not apply to disputes between the Contractor and Metro. These provisions do not alter in any way or waive compliance with any provisions in 6 “Submittal of Claims” section in the General Conditions of the Contract Document.

The Contractor and Subcontractors shall include the dispute resolution provision in their contract. Both parties shall agree to proceed through informal meetings, mediation, or arbitration, or any combination thereof. Dispute submittals shall include terms and timeframes and the service or assistance to be employed.

501 INFORMAL MEETINGS:

The Diversity and Economic Opportunity Department will coordinate informal meeting requests, to assist in the resolution of disputes between Contractor and subcontractor.

The assigned Diversity and Economic Opportunity Representative will conduct the informal meetings with parties in dispute. All parties must agree to the procedure.

502 MEDIATION:

The parties to a contract may agree to endeavor to settle a dispute through informal mediation under independent third party organizations. Metro’s Diversity and Economic Opportunity Department is considered an independent third party. Submission to informal mediation is voluntary; is not binding and offers advisory opinions.

503 ARBITRATION:

Should the parties fail to resolve any DBE related dispute arising out of or related to the contract via informal meetings or mediation, the parties are contractually obligated to submit the claims for arbitration within 120 days from date Metro is notified of dispute.

Arbitration conducted pursuant to the contract shall be binding upon all parties to the arbitration. All arbitration is to be conducted in a manner consistent with section 1020 et seq. of the Public Contract Code and Section 1296 of Code of Civil Procedure.

Available mediation and arbitration services include:

The American Arbitration Association (213) 362-1900 Dispute Resolution Center (818) 794-2125 The Contractor shall incorporate this Section into each DBE subcontract related to work arising under this contract and shall not incorporate by reference.

Only when resolution of DBE disputes attempted through informal meetings, mediation, and/or arbitration has failed may the Contractor formally request substitution of a DBE subcontractor.

504 TIMELINESS:

Should the parties proceed to arbitration, moneys due, if any, shall be placed in a trust account. Such funds shall be released to the appropriate party within five (5) working days of a determination being issued by the arbitrator.

NOTE: Arbitration findings are binding upon the parties. However, the findings do not in any way relieve the contractor of its obligation to meet the DBE goals.

SECTION 600 - ADDING OR SUBSTITUTING OR TERMINATING A DBE

Contractors shall obtain written approval from DEOD prior to adding, substituting, or terminating DBE subcontractors.

600 ADDING DBE SUBCONTRACTORS:

If contractors determine that there are additional opportunities for DBEs not originally listed, they may exercise good faith efforts by requesting to add DBE firm(s) to their contract. Metro shall authorize the addition of DBE subcontractor(s) for credit toward the contract commitment upon verification of certification. Prior to adding DBE subcontractors, written requests must be submitted to DEOD and Contract Administration for approval. This request must include the Request to Add DBE or Non- DBE Subcontractor form (reference Appendix B) specifying the scope of work, dollar amount, period of performance, and applicable North American Industry Classification System (NAICS) code(s), with a DBE certification letter attached.

The request to add a new certified firm to the contract is to be submitted to DEOD and approved prior to any commencement of work. In addition to the Request to Add DBE or Non-DBE Subcontractor form, the prime contractor request must include the following documentation:

A. Written justification for adding additional firm(s) to contract team;

B. Provide subcontract agreement for added firm(s) with dollar amount of scope of work, period of performance, and required flow down provisions;

C. Provide certified letter evidencing certification status of firm(s) to be added;

D. Documentation of prime contractor outreach efforts and selection process undertaken for the scope of work to be performed by the proposed added firm(s);

E. Identify if the added firm(s) replacing another originally listed certified firm or is a result of reducing scope of work originally listed. (The prime contractor shall comply with substitution requirements when making changes to originally scope committed to another certified firm).

Enforcement: Failure by the contractor to comply with the “request to add requirements,” shall constitute a material breach…