Meeting Contract Requirements - Guide to Successfully Completing ADOT Projects

Trucker

DBE Trucker Requirements

The regulations and requirements of DBEs can be very complicated. The sections below discuss DBEs in the context of meeting contract requirements as a DBE trucker. For a fuller picture of how contract requirements work with DBEs, see the prime contractor section on Contracts with DBE Requirements

DBE Goals

Prime contractors count on their subcontractors to maintain DBE certification and have the proper licenses and certification for the type of work you are to perform. If, for any reason, you fail to obtain or maintain proper licensing and certification, it is critical that you inform the prime contractor immediately.

Commercially Useful Function

It is important to note that DBE involvement only satisfies DBE goals if the DBE serves a commercially useful function. Generally, this means that the DBE must perform the whole of a task itself and the task must be necessary for the completion of the project. The specific rules vary by the task being performed, however. 

As a DBE, you will not be considered to be performing a commercially useful function if you acts only as an extra participant in a transaction or project to provide the appearance of DBE participation. If you do not perform or exercise responsibility for at least 30 percent of the total cost of its contract with your own work force, or if you subcontract 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, ADOT will presume that you are not performing a commercially useful function.

For you, as a DBE trucking company, to be deemed to be performing a commercially useful function, you must be responsible for the management and supervision of the entire trucking operation for which you are responsible on a particular contract. Further, you firm must own itself (i.e., you cannot be a subsidiary of another firm) and operate at least one truck, and you must use that truck each day on which it is earning credit toward the DBE goal.

If you are presumed not to be performing a commercially useful function as provided above, you may present evidence to rebut this presumption. Decisions on commercially useful function matters are subject to review by FHWA, but are not administratively appealable to U.S. DOT.

ADOT BECO staff and/or Construction Inspectors will visit construction work sites to conduct Commercially Useful Function reviews to ensure that this requirement is being met.  Contractors and DBE firms must cooperate and participate in interviews by ADOT staff that will make every effort not to disrupt workflow on the project.  

The LPA-CUF-Worksheet is available from BECO.

See this video from the FHWA for more information on what qualifies as a Commercially Useful Function. 

For more information on good faith efforts, as well as information on what sort of work satisfies the commercially useful function requirement of DBE goals, read the Commercially Useful Function Checklist on the ADOT website. 

DBE Goal Credit

In general, it is the Prime Contractor’s responsibility to ensure that the work performed by subcontracted DBEs counts toward DBE goal credit and that the credit adds up to meet the DBE goal. However, being knowledgeable of the process and avoiding situations which may lead to reduced DBE goal credit is generally appreciated by prime contractors.

In some cases, not all of the money paid to a DBE can count toward the DBE goal. In trucking for instance, if you lease additional trucks (including operators) from another DBE, the total value of the transportation services counts toward the DBE goal. However,, if you lease additional trucks (including operators) from a non-DBE, credit towards the DBE goal is earned by the additional trucks only up to an equivalent amount to that earned by the DBE-owned trucks. For additional trucks leased from non-DBE companies, only the fee or commission paid to the DBE as a result of the lease agreement is counted toward the DBE goal.

For example, if Firm X (a DBE) owns and operates two trucks and leases three trucks from Firm Y (a non-DBE), then the costs for the trucks from Firm X and two trucks from Firm Y would count toward the DBE goal. For the additional truck from Firm Y, only the commission paid to the DBE as a result of the lease agreement would count toward the DBE goal.

Substitution/Termination of DBE

Any attempt to substitute one DBE for another or to terminate any DBE subcontractor must be approved by BECO, and the reasons for doing so must be explained. If the change would reduce DBE participation below the DBE goal, the change must be justified. Good cause for substitution or termination generally includes situations where the listed DBE

  • fails or refuses to execute a written contract.
  • fails or refuses to perform the work of its subcontract in a way consistent with normal industry practice standards.
  • fails or refuses to meet the prime contractor’s reasonable, nondiscriminatory bond/insurance requirements.
  • becomes bankrupt, insolvent, or exhibits credit unworthiness.
  • is ineligible to work on public works projects because of suspension and debarment proceedings pursuant to federal or state law.
  • is not a responsible contractor.
  • voluntarily withdraws from the project and provides written notice of its withdrawal to the Department.
  • is ineligible to receive DBE credit for the type of work required.
  • a DBE owner dies or becomes disabled with the result that the firm is unable to complete its work on the contract.
  • other documented good cause that the Department determines compels the termination or substitution of the DBE subcontractor.

 The form for substitution or termination of a DBE can generally be found in the BECO section of the ADOT website. 

Certification of Payment to DBE firms

ADOT is required by law to collect contractor, subcontractor and tier subcontractor payment information (a tier subcontractor is a company that subcontracts to a subcontractor). This means that a prime contractor or consultant must enter all subcontractor payment information into the DBE Labor Compliance website. Subconsultants are then responsible for adding information about tier subconsultants if necessary.

Primes must submit information on the payments made to each subcontractors on the DBE website every month.

By law, prime contractors are required to pay subcontractors within 7 days of receiving payment themselves. If the subcontractor was not paid within 7 days, or if for some reason you cannot tell if the subcontractor was paid in that time frame, there is a space for additional explanation.

This video will guide you through this process.

Once a project is complete and all payments have been made and confirmed, the prime contractor must submit a DBE Certification of Payments Form for each DBE they utilized. This form certifies that all payments have been made to the DBE subcontractor, and both the prime and subcontractor must sign it. 

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Civil RightsTitle VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA)

Pursuant to Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA), ADOT does not discriminate on the basis of race, color, national origin, age, sex or disability. Persons that require a reasonable accommodation based on language or disability should contact ADOT’s Civil Rights Office at 602.712.8946 or at [email protected]. Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

De acuerdo con el título VI de la Ley de Derechos Civiles de 1964 y la Ley de Estadounidenses con Discapacidades (ADA por sus siglas en inglés), el Departamento de Transporte de Arizona (ADOT por sus siglas en inglés) no discrimina por raza, color, nacionalidad, edad, género o discapacidad.  Personas que requieren asistencia (dentro de lo razonable) ya sea por el idioma o por discapacidad deben ponerse en contacto con la Oficina de Derechos Civiles al 602.712.8946 o en [email protected]. Las solicitudes deben hacerse lo más pronto posible para asegurar que el equipo encargado del proyecto tenga la oportunidad de hacer los arreglos necesarios.