EXHIBIT D - DIVERSITY & ECONOMIC OPPORTUNITY DEPARTMENT

CONTRACT COMPLIANCE MANUAL (STATE/LOCAL)

SECTION 100 - SMALL BUSINESS ENTERPRISE PROGRAM/ DISABLED

VETERAN BUSINESS ENTERPRISE PROGRAM

100 LACMTA POLICY STATEMENT:

The Los Angeles County Metropolitan Transportation Authority (LACMTA) is the recipient of non-federal funds from state and local funding sources. It is LACMTA’s policy to provide maximum opportunity for Small Business Enterprises(s) and Disabled Veteran Business Enterprise(s) to compete and to foster increased SBE/DVBE participation in its procurement and contracting program. LACMTA shall take all necessary and reasonable steps to ensure nondiscrimination in the award and administration of with 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 LACMTA contracts.

To ensure that only firms that fully meet the eligibility requirements of the LACMTA 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 LACMTA 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 LACMTA’s SBE/DVBE Program shall be resolved first in favor of California Law and second in favor of LACMTA’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 LACMTA to implement administrative penalties or other remedies imposed by LACMTA.

102 NON DISCRMINATION:

LACMTA’s policy ensures that SBE/DVBE firms have an equal opportunity to receive and participate on projects that are state and/or locally funded. It is also LACMTA 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

103 SUSPENSION OR DEBARMENT:

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

A. Attempts to participate in the LACMTA SBE/DVBE Program as a 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.

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

104 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 show the name and business address of each SBE/DVBE subcontractor or suppler and the total dollar amount actually paid to each SBE/DVBE subcontractor or supplier. LACMTA 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 LACMTA contracting studies. Contractors and subcontractors shall permit access to their records at the request of LACMTA. Notice is hereby given that state and local authorities may initiate or cooperate with LACMTA in auditing and inspecting such records.

SECTION 200 - SBE/DVBE PARTICIPATION

200 LACMTA OVERALL SBE/DVBE GOAL:

LACMTA has set an overall goal for SBE/DVBE participation. The overall SBE/DVBE goal applies to non-federally funded contracts LACMTA expects to expend for the fiscal year.

LACMTA will strive to meet its overall goal through race neutral measures. LACMTA supports the use of race neutral measures to facilitate participation of SBE/DVBEs 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/DVBE goal is being achieved, LACMTA will track the dollar amount paid to all certified SBE/DVBE firms performing work called for in this contract that is eligible to be credited toward LACMTA’s overall goal.

201 SBE/DVBE COMMITMENT(S):

After contract award, SBE/DVBE commitment percentages listed in the bid/proposal will be monitored and enforced from contract inception through contract completion. Failure to meet the SBE/DVBE commitment may result in penalties and/or administrative sanctions. SBE/DVBE administrative requirements are referenced in this Diversity & Economic Opportunity Department Contract Compliance Manual (State/Local), and incorporated as part of the conformed contract.

202 CHANGES IN WORK LISTED TO SBE/DVBE FIRMS:

If LACMTA or the Contractor proposes changes for work contracted to an SBE/DVBE, the Contractor is required to notify the SBE/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 a SBE/DVBE firm(s) will be commensurately added to or subtracted from the total contract amount used to compute actual dollars paid to SBE/DVBEs. 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 firms 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. An SBE/DVBE performs a CUF when the SBE is responsible for a clearly defined and distinct scope of work. SBE/DVBE firms must be responsible for the execution of the work, is carrying out its responsibilities by actually performing, managing, and supervising the work involved

On-site visit reviews will be used to ascertain whether the SBE/DVBE is actively performing, managing, and supervising the work. SBE/DVBE firms shall employ a labor force which is separate and apart from individuals employed by the prime, and independently recruited by the SBE/DVBE in accordance with standard industry practice.

204 VIOLATION OF COMMERICAL USEFUL FUNCTION :

If an investigation reveals that there is a violation of the CUF provisions, that portion of the work found to be in violation will not be counted toward achievement of the SBE/DVBE contract commitment, nor LACMTA’s overall SBE/DVBE goal. When a SBE/DVBE is presumed not to be performing a CUF as described in this section, the SBE/DVBE may present evidence through the Contractor to LACMTA to rebut that presumption no later than fifteen (15) days after receipt of notice of violation(s). If after review of the evidence presented by the SBE/DVBE does not meet the CUF provisions herein, the Contractor will be required to cure deficiencies found.

LACMTA’s CUF decisions are not appealable.

205 CREDITING AND COUNTING SBE PARTICIPATION:

LACMTA is only able to count toward the achievement of the SBE/DVBE commitment percentage the value of actual dollar paid for CUF work actually performed by SBE/DVBE firms.

There will be no credit for work performed by a non-SBE/DVBE prime and/or subcontractor.

SBE/DVBE participation listed in the bid or proposal must comply with the provisions of this section.

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.

Work that a SBE/DVBE prime subcontracts to a non-SBE/DVBE firm will not count toward the SBE/DVBE commitment.

B. SBE/DVBE as a Joint Venture Contractor: 100% SBE/DVBE 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 SBE/DVBE’s own forces.

C. SBE/DVBE as a Teaming Partner: 100% SBE/DVBE 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 SBE/DVBE’s own forces.

D. SBE/DVBE as a Subcontractor: 100% SBE/DVBE credit for the work of the subcontract performed by the SBE/DVBE’s own forces, including the cost of materials and supplies, excluding 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 a SBE/DVBE subcontractor in turn subcontracts to a non-SBE/DVBE firm does not count toward the SBE/DVBE commitment.

E. SBE/DVBE as a Material Supplier or Broker:

1. 60% SBE/DVBE credit for the cost of the materials or supplies purchased from a SBE/DVBE regular dealer.

2. 100% SBE/DVBE credit for the cost of materials or supplies obtained from a SBE/DVBE manufacturer.

3. 100% SBE/DVBE credit for the value of reasonable fees and commissions for the procurement of materials and supplies if not a regular dealer or manufacturer.

F. SBE/DVBE as a Trucker: 100% SBE/DVBE credit for trucking participation provided the SBE/DVBE is responsible for the management and supervision of the entire trucking operation for which it is responsible. At least one truck owned, operated, licensed and insured by the SBE/DVBE must be used on the contract. Credit will be given for the full value of all such SBE/DVBE trucks operated using SBE/DVBE employed drivers.

SBE/DVBE credit will be limited to the value of the reasonable fee or commission received by the SBE/DVBE if trucks are leased from a non-SBE/DVBE company. LACMTA uses the following six (6) factors in determining whether to count expenditures to a SBE/DVBE trucking firm, to determine if it is performing a commercially useful function:

1. 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.

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

3. 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.

4. The SBE/DVBE may lease trucks from another SBE/DVBE firm, including an owner-operator who is SBE/DVBE certified. The SBE/DVBE who leases the trucks from another

SBE/DVBE receives credit for the total value of the transportation services the lessee SBE/DVBE provides on the contract.

5. SBE//DVBE firms that lease trucks from non-SBE/DVBE firms are entitled to credit only for the fee or commission it receives from the lease arrangement. SBE/DVBE firms are not eligible to receive full credit for the total value of transportation services.

6. To perform a commercially useful function reference Section 203 (“Commercial Useful Function”) an SBE/DVBE trucking company shall have exclusive use of and control of the day-to-day trucking operation. 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 firm.

7. SBE/DVBE firms that leases trucks from a prime contractor during the performance of contract, is considered a violation of the commercial useful function requirement.

206 THE SBE/DVBE (AND NOT OTHER BUSINESS ENTITITIES) SHALL ACTUALLY

PERFORM THE SUBCONTRACT:

The SBE/DVBE’s utilization of labor, supervisory personnel, equipment and material in the performance of the subcontract, shall be consistent with industry standards and shall demonstrate that the SBE/DVBE, and not some other business entity is actually performing the subcontract. If a SBE/DVBE associates itself too closely with another business entity or entities, in acquiring labor force, supervisors, equipment, or materials to an extent inconsistent with industry standards, the SBE/DVBE can no longer be said to be actually performing a commercially useful function (reference §203)the subcontract.

207 SBE/DVBE CONTRACTOR’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 LACMTA’s prior written consent, augment its work force with personnel of another firm. LACMTA shall approve the request in writing only when specialized skills are required and the use of such personnel is for a limited duration.

SECTION 300 - CONTRACT COMPLIANCE MONITORING

300 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 LACMTA departments comply with the SBE/DVBE requirements and all other contract provisions related to SBE/DVBE participation. LACMTA will also provide monitoring and enforcement mechanism 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 a 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.

301 CREATE A LEVEL PLAYING FIELD OF OPPORTUNITY TO PARTICIPATE:

Contractors shall ensure that SBE/DVBEs have a level playing field to successfully perform the responsibilities of their contract in order to meet its SBE/DVBE contract commitment. These efforts include, but are not limited to the following:

A. Negotiate to attempt to finalize subcontract and supply agreements with SBE/DVBEs listed in its bid.

B. Continue to provide assistance to SBE/DVBE Subcontractors or Suppliers in obtaining bonding, lines of credit, or other capital financing.

C. Contractors who failed to meet the SBE/DVBE goals established for the contract, but who were determined by LACMTA 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 Cure Notice of any potential problem and provide a reasonable time frame for the SBE/DVBE to cure the problem. The Contractor shall, concurrently with the issuance of the Cure Notice to the SBE/DVBE, 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 SBE/DVBE fails to cure, the Contractor is then obligated to take the steps outlined in the section herein RESOLUTION OF SBE DISPUTES BETWEEN CONTRACTOR AND SBE SUBCONTRACTORS before formally requesting approval from LACMTA to substitute a SBE/DVBE.

302 NOTIFICATION OF REPORTING REQUIREMENTS:

For SBE/DVBE contracting requirements, Contractors shall refer to the Diversity & Economic Opportunity Department Contract Compliance Manual (State/Local), the General Conditions and the Special Provisions sections of the executed contract. Contractors are advised of prompt payment provisions and retention covering all SBE/DVBE and Non SBE/DVBE subcontracts, implemented pursuant to the California Business and Professions Code 7108.5.

303 KICK-OFFMEETING:

Contractors and subcontractor(s) or designees shall be notified of the scheduled project kick-off meeting, prior to or immediately after Notice to Proceed is issued. The Contractor shall be responsible for informing the SBE subcontractors requirements.

304 CONTRACT COMPLIANCE SUBMITTALS – REPORTING SBE/DVBE

PARTICIPATION:

Contractor and all subcontractors (SBE/DVBE and non-SBE/DVBE firms) shall report payment details to LACMTA 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 LACMTA. SBCRS is mandatory for Contractors and subcontractors to use unless LACMTA instructs otherwise. LACMTA 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) 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) days of the NTP. The Contractor is responsible for ensuring that all subcontractors, suppliers, brokers, and/or truckers (at all tiers), both SBE/DVBE and non-SBE/DVBE 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 (SBE/DVBE and non-SBE/DVBE) to enter required payment information into SBCRS. Contractor shall submit all monthly reports, subcontractor agreements, and documents through the SBCRS to LACMTA review and approval. Failure of Contractor or its subcontractors to enter required information on a timely basis may result in delay of payment by LACMTA and assessment of SBE/DVBE non-compliance for reporting requirements as identified in Section 700 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 SBE/DVBE PROGRESS REPORT (Design/Build Only): 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 LACMTA 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 the 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. Supplemental Reports (Design/Build Only): The Prime Contractor shall submit, each month (or other such time as the DEO, may choose), the below compliance reports.

LACMTA has developed a series of forms that may be adopted by the Contractor to meet this requirement or the Contractor may develop its own report format and present to LACMTA for approval and use to meet the supplemental report requirements:

a. SBE/DVBE Attainment and Commitment Report, a monthly listing of SBE/DVBE and non-SBE/DVBE subcontractors with current and anticipated participation. This report shall include a current SBE/DVBE attainment and commitment tallies from each subcontractor (at any tier) listing of all its subcontractors.

b. Prompt Payment” Report listing its immediate subcontractors and the “Prompt Payment” activity from each subcontractor subcontracting at each tier listing their immediate subcontractors, to the Contract Compliance Officer, documenting the status of each subcontractor’s retainage account with the Prime Contractor engaged in subcontracting and their compliance with the return of the retainage regulations.

c. The Prime Contractor’s “Prompt Payment and Retainage” Report for the month (or the period of time designated by DEOD), listing its immediate subcontractors and the prompt payment and retainage activity from each subcontractor (at any tier).

4. For Contracts that Require a SBE/DVBE Contracting Outreach and Mentoring Plan (COMP). The Contractor shall:

a. Submit the final detailed SBE/DVBE COMP no later than 120 days from the Notice to Proceed;

b. Comply with a SBE/DVBE requirement in the Diversity & Economic Opportunity Department Contract Compliance Manual (State/Local);

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

d. Submit a quarterly report on all mentor protégé arrangements; meet with LACMTA, mentor(s) and protégé(s) annually to report overall progress of the mentor protégé component of the SBE/DVBE COMP.

B. MONTHLY EXPENDITURE PLAN (FOR CONSTRUCTION WORK ONLY): An expenditure plan in calendar format for each of its approved SBE/DVBE Subcontractors/Suppliers shall be submitted 14 working days after the Contractor executes a contract or purchase order with LACMTA, and submitted each month thereafter. The planned expenditures shall equal the dollars committed to each SBE/DVBE Subcontractor/Supplier and shall be developed according to the approved project schedule.

The plan shall be updated to incorporate any schedule changes and executed Changed Notices and Work Authorization Change Notices affecting the SBE/DVBE's work. The original plan must be approved and each revision must be approved by the, “Construction Manager's Resident Engineer,” prior to being submitted to the assigned Contract Compliance Officer and the Contract Administrator. Revised plans shall be submitted within 30 days from the incorporation of the change.

C. SBE TRUCKING VERIFICATION REPORT: When trucking is listed to be performed, the Contractor shall provide to LACMTA, by the fifth (5th) day of each month, 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. The SBE/DVBE who leases trucks from a non-SBE/DVBE is entitled 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 to Subsection 205, referenced above.

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 Section 300, Subsections 304 through 312.

D. EXECUTED SBE/DVBE SUBCONTRACT AGREEMENTS: The Contractor shall submit copies of all executed SBE/DVBE subcontract agreements and/or SBE/DVBE purchase orders (PO) within 14 days (working) after Notice to Proceed for all known SBE/DVBE firms listed in the Contractor’s proposal and SBE/DVBE COMP. For Contracts that require a SBE/DVBE Contracting Outreach and Mentoring Plan (COMP), the Contractor shall also submit the executed mentor protégé agreements for the SBE/DVBE firms identified for mentor protégé development no later than 14 days after Notice to Proceed. 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/DVBE subcontract or PO should be sent to the attention of the assigned Contract Compliance Officer. The Contractor shall incorporate the SBE/DVBE Program document and this Diversity & Economic Opportunity Department Contract Compliance Manual (State/Local) into each PO and into each Subcontract issued under this non-federal 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 14-day timeframe mentioned above, 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/DVBE subcontractor(s):

E. 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.

305 PROMPT PAYMENT:

The prime contractor is required to incorporate the Prompt Payment Clause referenced in Section 302 above, in all subcontract, broker, dealer, vendor, supplier or other source agreements or Purchase Orders (at all tiers) issued to both SBEDVBE and non-SBE/DVBE firms. Contractor shall reference the following contract clauses: General Terms and Conditions concerning Prompt Payment to Subcontractors and Prompt Payment of Withheld Funds to Subcontractors.

306 PROGRESS PAYMENTS:

Prompt Payment and Progress Payment language must be included in all non-SBE/DVBE and SBE/DVBE subcontract agreements 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 LACMTA.

307 FINAL PAYMENT TO SUBCONTRACTOR (RETAINAGE):

The Contractor and all subcontractors shall pay to each subcontractor all amounts it has retained from payments under the Subcontractor within seven (7) days after the Subcontractor’s Work is satisfactorily completed.

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

With respect to retention that LACMTA withholds from the Contractor, LACMTA shall make prompt and regular incremental inspection(s) and upon approval of the Contractor’s work at various stages of the Project, LACMTA shall pay a percentage of retention to the Contractor.

The Contractor shall, within 30 days after LACMTA has made such payment, promptly pay all retention owed to Subcontractor(s) who has satisfactorily completed all of its work and whose work is covered by LACMTA inspection(s) and approval(s). For the purposes of this section, a subcontractor’s work is satisfactorily completed when the Contractor certifies to LACMTA that all the tasks called for in the subcontract have been satisfactorily accomplished and that subcontractor’s retention may now be paid. Any delay or postponement of prompt release of retention beyond the 30 day time limit shall be for good cause, and only upon prior written approval by LACMTA.

308 WORK SATISFACTORILY COMPLETED:

Satisfactory completion of a subcontractor’s work is when all the tasks called for in the subcontract have been accomplished and documented as required by LACMTA.

309 DELAY OR POSTPONEMENT OF PAYMENT:

Any delay or postponement of payment beyond the 7-day time limit shall take place only for good cause, and only upon prior written approval of LACMTA.

310 NON-PROGRESS OR RETAINAGE PAYMENT INQUIRIES:

If Subcontractor (at any tier) is not paid within 7 days according to prompt payment and or retainage. The subcontractor must notify the prime contractor in writing within 30 calendar days from the time payment should have been received. The subcontractor shall copy the LACMTA DEOD Representative and Contract Administrator. The prime contractor (or lower tier direct subcontractor) has 7 calendar days to respond in writing back to the inquiring subcontractor.

The prime contractor shall also copy the LACMTA DEOD Representative and Contract Administrator.

311 VIOLATION OF PROMPT PAYMENT:

The Contractor and all subcontractors, consultants and suppliers shall comply with all prompt payment requirements in the Contract. Any violation of the prompt payment provision shall subject the violating contractor or subcontractor to the penalties, sanctions, and other remedies specified in Section 7108.5 of the California Business and Professions Code. This requirement shall not be construed to limit or impair any contractual, administrative, or judicial remedies, otherwise available to the contractor or subcontractor in the event of a dispute involving late payment or nonpayment by the contractor, deficient subcontractor performance, and/or noncompliance by a subcontractor.

312 FAILURE TO COMPLY WITH PROMPT PAYMENT:

If it is determined that the contractor is non-compliant with prompt payment provisions, the contractor will receive written notification from LACMTA with 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. Failure of the Contractor and/or its listed subcontractors to comply with any part of the mentioned may result in non-compliance determination and administrative sanctions may be imposed as prescribed in SBE/DVBE Assessment of Non-compliance and Administrative Sanctions.

313 FINAL REPORTING:

Contractor shall submit to LACMTA, along with invoice for final payment, a signed and notarized statement that the Contractor will pay all outstanding payments including retention 10 days after it receives final payment from LACMTA. Please see General Terms and Conditions concerning “Prompt Payment to Subcontractors and Prompt Payment of Withheld Funds to Subcontractors.”

314 ASSESSMENT FOR SBE/DVBE NON-COMPLIANCE:

If the Contractor fails to comply with the SBE/DVBE 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 SBE/DVBE 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 SBE/DVBE commitments or to demonstrate good faith efforts.

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

315 DISPUTE RESOLUTION:

The Contractor must include in its SBE/DVBE Subcontract Agreement(s) the Dispute Resolution provisions in Section 5.0 of the Diversity & Economic Opportunity Department Contract Compliance Manual (State/Local) 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.

SECTION 400 - RESOLUTION OF DISPUTES BETWEEN LACMTA CONTRACTOR

AND SUBCONTRACTORS

400 DISPUTES:

Disputes between the Contractor and any lower tier SBE/DVBE subcontractors, which cannot be settled by discussions between the parties involved, shall be settled as described herein.

Contractor shall notify LACMTA 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 LACMTA. These provisions do not alter in any way or waive compliance with any provisions in Section GC36 “Submittal of Claims” included in the Contract Documents.

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.

401 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.

402 MEDIATION:

The parties to a contract may agree to endeavor to settle a dispute through informal mediation under independent third party organizations. LACMTA’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.

403 ARBITRATION:

Should the parties fail to resolve any SBE/DVBE 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 LACMTA 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) 793-7174

The Contractor shall incorporate this Section into each SBE/DVBE subcontract related to work arising under this contract and shall not incorporate by reference.

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

404 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 SBE/DVBE goals.

SECTION 500 - ADDING OR SUBSTITUTING OR TERMINATING A SBE/DVBE

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

500 ADDING SBE/DVBE SUBCONTRACTORS:

If contractors determine that there are additional opportunities for SBE/DVBEs not originally listed, they may exercise efforts by requesting to add SBE/DVBE firm(s) to their contract.

LACMTA shall authorize the addition of SBE/DVBE subcontractor(s) for credit toward the contract commitment upon verification of certification. Prior to adding SBE/DVBE subcontractors, written requests must be submitted to DEOD and Contract Administration for approval. This request must include the Request to Add SBE/DVBE or Non-SBE/DVBE 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 SBE/DVBE 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 SBE/ DVBE or Non-SBE/DVBE 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 of the contract and may result in termination of contract or imposition of administrative sanctions for non-compliance.

After formal approval by LACMTA the contractor must provide a copy of the Subcontract Agreement.

501 SUBSTITUTING OR TERMINATING SBE/DVBE SUBCONTRACTORS:

Pursuant to the California Public Contract Code Section 4100, no contractor at any tier may terminate a SBE/DVBE subcontractor for convenience and then perform that work with its own workforce or that of its affiliate. The contractor shall provide written request to DEOD to substitute a SBE/DVBE subcontractor.

A. LACMTA shall only authorize the substitution of a subcontractor for one or more of the following reasons:

1. The listed SBE/DVBE, after having had a reasonable opportunity, fails or refuses to execute a written contract.

2. The listed SBE/DVBE becomes bankrupt or has credit unworthiness.

3. The listed SBE/DVBE fails or refuses to perform his subcontract with normal industry standard.

4. The listed SBE/DVBE subcontractor, after having had a reasonable opportunity, fails or refuses to meet the contractor’s non-discriminatory bond requirements.

5. The prime contractor demonstrates to LACMTA, pursuant to Public Contract Code, Section 4107.5, that the name of the subcontractor was listed as the result of an inadvertent clerical error.

6. The listed subcontractor is not licensed pursuant to the Contractors License Law.

7. It was determined that the work performed by the listed subcontractor is substantially unsatisfactory and is not in accordance with the plans and specifications, or that the subcontractor is substantially delaying or disrupting the progress of the work

8. The SBE/DVBE is ineligible to work because of suspension and debarment.

9. It has been determined that the SBE/DVBE is not a responsible contractor.

10. The SBE/DVBE voluntarily withdraws, with written notification, from the contract.

11. The SBE/DVBE is ineligible to receive credit for the type of work required.

12. The SBE/DVBE owner dies or becomes disabled resulting in the inability to perform the work on the contract.

13. Other documented compelling reasons.

B. DEOD shall send written notice to the listed SBE/DVBE subcontractor of the Contractor’s request for substitution, including the reasons for the request. The SBE/DVBE subcontractor shall have five (5) working days to submit written objections to the substitution to DEOD. Failure to respond to a written objection may constitute the listed SBE/DVBE subcontractor’s consent for substitution.

C. If written objections are filed by a SBE/DVBE subcontractor, LACMTA shall give written notification within at least five (5) working days, to the prime contractor and the listed subcontractor of an informal mediation regarding the request for substitution.

D. Contractor(s) shall replace a SBE/DVBE subcontractor with another SBE/DVBE firm, after following dispute resolution procedures, pursuant to the provisions of the California Public Contracts Code.

E. If no written objections are filed by the SBE/DVBE subcontractor, the prime’s request to substitute shall be approved. A new SBE/DVBE listing shall include the commitment amount and the type of work covered by each Subcontractor. All substitutions and additions are subject to LACMTA’s approval.

F. If substitution with another SBE/DVBE firm is not viable, the Contractor shall submit a written request for a substitution with a non-SBE/DVBE. This request must include documentation of the contractor’s attempt to substitute the SBE/DVBE firm with another SBE/DVBE firm for LACMTA’s review and approval. The Contractor’s good faith effort document shall be submitted to LACMTA within 7 days.

The Contractor shall obtain the written consent prior to making any substitutions. If adding SBE/DVBE firms for credit toward the goal, verification of certification is required prior to receiving credit toward the contract specific goal. SBE/DVBEs must be certified at the time of the substitution or addition.

Failure to comply with this or any other SBE/DVBE requirement may result in assessment of appropriate administrative sanctions.

SECTION 600 - GOAL ATTAINMENT DURING LIFE OF CONTRACT

A. The Contractor shall not make any falsification of subcontractor information, up to and including Subcontractor's name, subcontract amount and/or actual work to be performed by SBE/DVBE firms.

B. The Contractor shall utilize SBE/DVBEs according to the participation levels committed to at the time of contract award, and demonstrate an adequate and positive effort to do so throughout the life of the contract.

C. The dollar amount of change orders, contract modifications, or provisions sums for design, E. All submittal forms, containing any contract value, revised as a consequence of a Change Order, contract modification, provisional sums shall be accompanied with copy of relevant support documentation.

F. The Contractor shall submit the final SBE/DVBE report within 14 calendar days of final payment, retention, and acceptance of the contract work by LACMTA as prescribed in Section 3.6.

G. Listed first-tier subcontractors shall enter into subcontract agreements with the Contractor within the specified time frame of fourteen (14) working days following NTP. Failure to execute subcontract agreements in a timely manner shall be considered a violation of the SBE/DVBE Program requirements.

H. When a 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 a SBE/DVBE. Work that a SBE/DVBE subcontracts to a non- SBE/DVBE firm does not count toward SBE/DVBE goals.

I. When a SBE/DVBE performs in a joint venture or teaming agreement, only the percentage of the SBE/DVBE joint venture is eligible for credit. Work must be performed by the SBE/DVBEs own work forces.

J. Failure to adhere to any of the requirements of this Section shall constitute a breach of contract and may result in LACMTA’s terminating the contract for default and/or imposing appropriate sanctions as outlined in the section entitled Remedies for Breach of SBE/DVBE Requirements.

SECTION 700 – SANCTIONS FOR SBE/DVBE PROGRAM VIOLATIONS

A. Failure to Comply

1. Failure to adhere to any of the SBE/DVBE Program requirements shall constitute a breach of contract and may result in LACMTA terminating the contract for default and/or imposition of appropriate sanctions as outlined in this section.

construction, operations and maintenance, that increases or decreases the scope of work committed to SBE/DVBEs, shall be commensurately added to or subtracted from the total contract amount used to compute actual dollars paid to SBE/DVBEs regardless of who performed the work.

D. All contract amounts revised as a consequence of a change order, contract modification or provisional sum, shall be reflected in the Contractor's monthly referenced herein in Diversity and Economic Opportunity Submittals, herein.

2. Staff shall review the contractor's monthly progress reports to determine whether the utilization of SBE/DVBE firms is consistent with the contractor’s commitment at the time of contract award.

3. Failure to utilize a SBE/DVBE as listed toward the goal is a breach of contract and may result in the imposition of administrative sanction.

4. If it is determined that the Contractor's SBE/DVBE utilization is not consistent with the commitment, the contractor shall be required to submit written evidence of subcontracting efforts within ten (10) working days. For failure to respond, the contractor will be deemed non-compliant and subject to administrative sanctions.

5. If it is determined that the contractor’s efforts documentation is acceptable, the contractor shall be deemed to be in compliance with the requirements of the SBE program.

6. If it is determined that the contractor’s efforts documentation is not acceptable, the contractor will receive written details of any deficiencies. 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.

7. 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. Failure to comply may result in the assessment of appropriate administrative sanctions and/or penalties.

B. Remedies for Breach of SBE/DVBE Requirements

Contractor(s) found in violation of LACMTA’s SBE/DVBE program requirements, during the performance of the contract, shall be required to "correct" its deficiency or be subject to the Administrative Sanctions listed in this Section. Being subject to appropriate administrative remedies or sanctions does not preclude LACMTA from invoking other contract and/or legal remedies available under state or local law

C. Appropriate Administrative Remedies

Appropriate administrative remedies will be imposed on Contractors deemed non-compliant to the SBE/DVBE Program requirements. Contractors’ failure to provide documentation of efforts, as requested for SBE/DVBE participation, will also be subject to appropriate administrative remedies. Contractor notifications shall be made by certified mail.

The appropriate administrative remedies shall include, but is not limited to the following:

1. Mandatory SBE/DVBE Training Session(s) for Contractor(s) found in violation of SBE/DVBE program requirements (SBE/DVBE Training will be coordinated by DEOD, and all associated expenses, including, but not limited to, travel, lodging, meals and etc., will be the responsibility of the Contractor.)

2. Penalties as described in the, “Assessment for SBE/DVBE Non-Compliance,”

(referenced in Sub-Section D)

3. Suspension of payment(s) to the Contractor

4. Termination of the Contract for default.

5. Debarment

D. Assessment for SBE/DVBE Non-Compliance

If the Contractor fails to comply with the SBE/DVBE Program requirements, contract payments shall be reduced by one or more of the following methods:

A penalty of five thousand dollars ($5,000) per day, from the date the Contractor is determined to be in non-compliance with the SBE/DVBE Program requirements until compliance is determined.

2. Penalties of ten percent (10%) of the total contract value, including any approved change orders, for failure to meet SBE/DVBE commitments or to demonstrate efforts.

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

SECTION 800 - SMALL BUSINESS ENTERPRISE AND DISABLED VETERAN

BUSINESS ENTERPRISE CERTIFICATION

800 SBE CERTIFICATION REQUIREMENTS:

A firm only holding a current certification as an eligible LACMTA SBE may participate in the LACMTA SBE/DVBE Program.