[Federal Register Volume 65, Number 221 (Wednesday, November 15, 2000)]
[Rules and Regulations]
[Pages 68949-68951]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 00-29100]
[[Page 68949]]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
49 CFR Part 26
[Docket OST-2000-7640]
RIN 2105-AC89
Participation by Disadvantaged Business Enterprises in Department
of Transportation Financial Assistance Programs; Threshold Requirements
and Other Technical Revisions
AGENCY: Office of the Secretary, DOT.
ACTION: Interim final rule; request for comments.
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SUMMARY: This interim final rule revises the Department's regulations
for its Disadvantaged Business Enterprise (DBE) program. This document
changes threshold requirements for Federal Transit Administration
recipients and Federal Aviation Administration recipients to establish
DBE programs and submit overall goals. In addition, this document
corrects and clarifies misleading language in the DBE final rule. This
correction document adds examples of ways to collect information
required for bidders lists. This document adds language clarifying that
in order to verify whether a DBE firm actually performed the work they
were committed, both commitments and attainments must be tracked and
reported. Finally, this document corrects potentially misleading
language regarding evidence that must be considered when setting
overall goals.
EFFECTIVE DATE: This interim final rule is effective November 15, 2000.
Comments concerning this document are due no later than January 2,
2001.
ADDRESSES: Interested persons should send comments to Docket Clerk,
Docket No. OST-2000-7640, Department of Transportation, 400 7th Street,
SW, Room PL-401, Washington, DC 20590. We request that, in order to
minimize burdens on the docket clerk's staff, commenters send three
copies of their comments to the docket. Commenters wishing to have
their submissions acknowledged should include a stamped, self-addressed
postcard with their comments. The docket clerk will date stamp the
postcard and return it to the commenter. Comments will be available for
inspection at the above address from 10 a.m. to 5 p.m., Monday through
Friday. Comments also may be sent electronically to the Dockets
Management System (DMS) at the following Internet address: http://
dms.dot.gov/ at any time. Commenters who wish to file comments
electronically should follow the instructions on the DMS web site.
FOR FURTHER INFORMATION CONTACT: Laura Aguilar, Attorney, Office of
General Counsel for Environmental, Civil Rights, and General Law,
Department of Transportation, 400 Seventh Street, SW, Room 10102,
Washington, DC 20590; Telephone: (202) 366-0365.
SUPPLEMENTARY INFORMATION:
1. Substantive Changes
DBE Programs
In Section 26.21(a)(2) of the rule, the Department states that
Federal Transit Administration (FTA) recipients who receive $250,000 in
a fiscal year in various forms of FTA assistance must have a DBE
program. Similarly, subsection (a)(3) requires Federal Aviation
Administration (FAA) recipients who receive grants of $250,000 or more
in a fiscal year for airport planning and development to have a DBE
program. The Department is changing the threshold to $250,000 in
contracting opportunities. The change requires FTA recipients who
project awarding more than $250,000 in prime contracts in a Federal
fiscal year from FTA assistance to have a DBE program. Similarly, FAA
recipients who project awarding more than $250,000 in prime contracts
in a fiscal year from grants for airport planning and development are
required to submit a plan. Prime contracts include goods as well as
contracts for services.
The Department is making these changes to decrease the
administrative burden on small airport and transit authorities. Many of
these transit authorities and small airports receive more than $250,000
in FTA or FAA funds but only have a small amount of funding for actual
contracting opportunities. For example, FAA grants funds for land
acquisition projects. While many of these grants exceed $250,000, the
value of contracting opportunities covered by the DBE program (e.g.,
real estate appraisal and survey) is frequently well below $250,000.
The major portion of the grant funds is generally for the land purchase
itself, which is not a ``DOT-assisted contract'' under the definition
of section 26.5.
Therefore, FTA and FAA recipients who reasonably anticipate
awarding $250,000 or less in prime contracts in a fiscal year are not
required to submit a DBE plan. This change affects new recipients or
recipients who do not have a DBE program. The rule would also reduce
burdens on recipients who already have DBE programs. If such a
recipient anticipates awarding $250,000 or less in prime contracts it
would not have to submit a DBE overall goal for that year.
Goal Setting
Section 26.45 requires recipients to submit new goals on August 1
of each year. Section 26.45 is being revised to exempt FTA or FAA
recipients with existing DBE programs from setting updated overall
goals when they do not project awarding prime contracts exceeding
$250,000 (excluding vehicle transit purchases).
If a recipient is administering a DBE program, but is a FAA or FTA
recipient who anticipates awarding $250,000 or less in prime contracts
in a Federal fiscal year, the recipient is not required to develop
overall goals for that fiscal year. However, the recipient's existing
DBE program must remain in effect. For example, the recipient would
still perform certification functions such as processing applications
and obtaining no-change affidavits. If the recipient expects to award
prime contracts exceeding $250,000 in the following fiscal year, it
would be required to timely publish the proposed goal and submit the
goal to the applicable DOT Operating Administration by August 1.
Although not required, a FAA or FTA recipient who anticipates awarding
$250,000 or less in prime contracts may submit a goal for that fiscal
year. However, if a recipient chooses to submit a goal, it must meet
all the requirements set forth in Sec. 26.45. Of course, recipients
must still seek to meet the objectives of Sec. 26.1 of this part.
Many recipients may have already submitted their fiscal year 2001
goal to the applicable Operating Administration. If you are a recipient
who submitted your goal, but under the revisions to this part are not
required to submit a goal, your Operating Administration will contact
you to ask whether you wish to have your goal in effect.
2. Technical Changes
Clarification Concerning Bidders Lists
Section 26.11(c) requires recipients to create and maintain a
bidders list containing information about DBE and non-DBE contractors
and subcontractors who seek work on a recipient's Federally-assisted
contracts. The Department has received a number of questions regarding
the appropriate method to collect the required information. Recipients
have also expressed concern with collecting the annual gross receipts
of firms, saying
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that firms have sometimes been reluctant to share this information.
In discussing this requirement in the DBE final rule, the
Department recognized the difficulty in identifying subcontractors,
particularly non-DBEs and all subcontractors that were unsuccessful in
their attempts to obtain contracts. Consequently, the Department did
not impose any procedural requirements for how the data is collected.
The Department still believes that a recipient's data collection
process should remain flexible. However, we are amending Sec. 26.11(c)
to emphasize the purpose of the bidders list and by providing examples
of ways in which recipients may choose to collect the required data.
The Department is amending Sec. 26.11(c)(1) to state that the
purpose of maintaining a bidders list is to provide the most accurate
data possible about the universe of DBE and non-DBE contractors and
subcontractors who seek to perform work under a recipient's Federally-
assisted contracts, for use in setting overall goals. We are also
adding language stating that a recipient may collect the required data
from all bidders, before or after the bid due date. They may also
choose to conduct a survey that will result in a statistically sound
estimate of the universe of DBE contractors and non-DBE contractors and
subcontractors who seek to perform work under the recipient's
Federally-assisted contracts. Additionally, we are clarifying that the
data need not come from the same source. For example, a recipient may
collect name and address information from all bidders, while conducting
a survey with respect to age and gross receipts information. The
Department believes that the approach should remain flexible so that
recipients can choose the least burdensome and intrusive method.
With regard to a firm's annual gross receipts, we are amending the
language in Sec. 26.11(c) to clarify that recipients are not required
to collect the exact dollar figure from the bidders. Recipients may ask
a firm to indicate into what gross receipts bracket they fit (e.g.,
less than $500,000; $500,000-$1 million; $1-2 million; $2-5 million;
etc.) rather than requesting an exact figure from the firms. We note
that this information on the size of a firm, as well as information
collected about the firm's age, should be helpful to recipients in
formulating narrowly tailored overall goals.
Clarification Concerning Monitoring and Counting DBE Participation
Section 26.37(b) requires recipients to have a mechanism to verify
that the work committed to DBEs at contract award is actually performed
by the DBEs. The language in the final rule states that recipients must
provide for a running tally of actual DBE attainments. The preamble to
the rule states, ``Under the final rule, recipients would keep a
running tally of the extent to which, on each contract, performance had
matched promises.'' Verifying whether a DBE actually performed the work
to which they were committed, necessarily requires the recipient to
track both commitments and attainments.
We are rewording the language in Sec. 26.37(b) to state that a
recipient's DBE program must include a monitoring and enforcement
mechanism to ensure that work committed to DBEs at contract award is
actually performed by DBEs. In addition, we are adding a new paragraph
(c) to clarify that a recipient's mechanism for providing a running
tally of actual DBE attainments must include a means of comparing the
attainments to commitments. We are also clarifying that both awards or
commitments and attainments must be contained in a recipient's reports
of DBE participation to the Department. In the forthcoming DOT uniform
reporting form, we will provide a format for these reports.
Section 26.37(b) requires the mechanism providing for a running
tally of actual DBE attainments to include a provision ensuring that
the DBE participation is credited toward overall or contract goals only
when payments are actually made to DBE firms. Since this requirement is
already stated in Sec. 26.55(h), we are removing it from Sec. 26.37(b).
Furthermore, we believe the wording of Sec. 26.55(h) is confusing and
we are, therefore, revising it. The point of the revised language is to
emphasize that actual payment of committed funds to DBEs is a key
element in determining whether a prime contractor has met its contract
obligations.
Clarification Concerning Goal Setting
In setting overall goals, step 2 requires that recipients examine
all evidence available in the jurisdiction to determine what
adjustment, if any, is needed to the base figure. Sec. 26.45(d)(1)
specifies information that must be considered when adjusting the base
figure. Sec. 26.45(d)(2) lists additional information to be considered,
but uses the language ``you may also consider.'' The permissive
language may be misleading. A narrowly tailored program requires that
all relevant information be considered. We are merely clarifying that
if the information is available, then it must be considered. Therefore,
to avoid misleading language, we are changing the wording in
Sec. 26.45(d)(2) to say, ``if available, you must consider evidence
from related fields that affect the opportunities for DBEs to form,
grow and compete.''
3. Interim Final Rule
This rule is being published as an interim final rule, without
prior notice and opportunity to comment. The Department believes there
is good cause for finding that providing prior notice and comment in
connection with this rulemaking action is impracticable, unnecessary
and contrary to the public interest since it concerns actions required
to be taken on or around August 1, 2000. See 5 U.S.C. 553(b)(B).
The Department believes it is important to expedite these revisions
in order to benefit DOT recipients this year. Under the DBE
regulations, recipients who set their goals on a fiscal year basis are
required to submit their goals on or around August 1 each year. In
order to reduce administrative burdens on FTA and FAA entities
receiving $250,000 or less in contracting opportunities, the rule must
be effective as soon as possible, since August 1 has passed and
recipients are still in the process of formulating goals and programs.
Therefore, the Department finds good cause that compliance with notice
and comment procedures in adoption of this interim final rule would be
impractical, unnecessary and contrary to the public interest. See 5
U.S.C. 553(b)(B). For the same reasons, pursuant to 5 U.S.C. 553(d), it
is determined that there is good cause for the interim final rule to
become effective immediately upon publication. In addition, this
interim final rule relieves a restriction.
All comments received will be filed in the docket. The docket is
available for public inspection before and after the comment closing
date. All comments received on or before the comment closing date will
be considered before taking final action on this rulemaking. Comments
filed late will be considered as far as possible without incurring
expense or delay. The provisions of this interim final rule may be
changed in light of comments received.
Regulatory Analyses and Notices
These revisions to part 26 are not a significant rule under
Executive Order 12866 or the Department's regulatory policies and
procedures. While the Regulatory Flexibility Act does not, as such,
apply to rules that do not involve a notice of proposed rulemaking, the
Department has determined that the revisions will not have significant
economic impacts on a substantial number of small entities. In fact,
these revisions decrease costs to some small
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entities. Further, these revisions do not have Federalism impacts
sufficient to warrant the preparation of a Federalism impact statement.
List of Subjects in 49 CFR Part 26
Administrative practice and procedure, Airports, Civil rights,
Government contracts, Grant--programs--transportation, Mass
transportation, and Minority businesses.
Issued this 6th Day of November, 2000, at Washington, DC.
Rodney E. Slater,
Secretary of Transportation.
For the reasons set forth in the preamble, the Department amends 49
CFR part 26 as follows:
PART 26--PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN
DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS
1. The authority citation for 49 CFR part 26 continues to read as
follows:
Authority: 23 U.S.C. 324; 41 U.S.C. 2000d, et seq.; 49 U.S.C.
1615, 47107, 47113, 47123; Sec. 1101(b), Pub. L. 105-178, 112 Stat.
107, 113.
2. In Sec. 26.11, revise paragraph (c) to read as follows:
Sec. 26.11 What records do recipients keep and report?
* * * * *
(c) You must create and maintain a bidders list.
(1) The purpose of this list is to provide you as accurate data as
possible about the universe of DBE and non-DBE contractors and
subcontractors who seek to work on your Federally-assisted contracts
for use in helping you set your overall goals.
(2) You must obtain the following information about DBE and non-DBE
contractors and subcontractors who seek to work on your Federally-
assisted contracts:
(i) Firm name;
(ii) Firm address;
(iii) Firm's status as a DBE or non-DBE;
(iv) Age of the firm; and
(v) The annual gross receipts of the firm. You may obtain this
information by asking each firm to indicate into what gross receipts
bracket they fit (e.g., less than $500,000; $500,000-$1 million; $1-2
million; $2-5 million; etc.) rather than requesting an exact figure
from the firm.
(3) You may acquire the information for your bidders list in a
variety of ways. For example, you can collect the data from all
bidders, before or after the bid due date. You can conduct a survey
that will result in statistically sound estimate of the universe of DBE
and non-DBE contractors and subcontractors who seek to work on your
Federally-assisted contracts. You may combine different data collection
approaches (e.g., collect name and address information from all
bidders, while conducting a survey with respect to age and gross
receipts information).
3. In Sec. 26.21, revise paragraphs (a)(2) and (a)(3) to read as
follows:
Sec. 26.21 Who must have a DBE program?
(a) * * *
(2) FTA recipients receiving planning, capital and/or operating
assistance who will award prime contracts (excluding transit vehicle
purchases) exceeding $250,000 in FTA funds in a Federal fiscal year;
(3) FAA recipients receiving grants for airport planning or
development who will award prime contracts exceeding $250,000 in FAA
funds in a Federal fiscal year.
* * * * *
4. In Sec. 26.37, revise paragraph (b), and add paragraph (c) to
read as follows:
Sec. 26.37 What are a recipient's responsibilities for monitoring the
performance of other program participants?
* * * * *
(b) Your DBE program must also include a monitoring and enforcement
mechanism to ensure that work committed to DBEs at contract award is
actually performed by DBEs.
(c) This mechanism must provide for a running tally of actual DBE
attainments (e.g., payments actually made to DBE firms), including a
means of comparing these attainments to commitments. In your reports of
DBE participation to the Department, you must display both commitments
and attainments.
5. Amend Sec. 26.45 as follows:
a. Revise paragraph (a); and
b. In paragraph (d) (2) at the beginning of the sentence, remove
``You may also consider available'' and substitute ``If available, you
must consider'' in its place. The revised text reads as follows:
Sec. 26.45 How do recipients set overall goals?
(a)(1) Except as provided in paragraph (a)(2) of this section, you
must set an overall goal for DBE participation in your DOT-assisted
contracts.
(2) If you are a FTA or FAA recipient who reasonably anticipates
awarding (excluding transit vehicle purchases) $250,000 or less in FTA
or FAA funds in prime contracts in a Federal fiscal year, you are not
required to develop overall goals for FTA or FAA respectively for that
fiscal year. However, if you have an existing DBE program, it must
remain in effect and you must seek to fulfill the objectives outlined
in Sec. 26.1.
* * * * *
6. In Sec. 26.55, revise paragraph (h) to read as follows:
Sec. 26.55 How is DBE participation counted toward goals?
* * * * *
(h) Do not count the participation of a DBE subcontractor toward a
contractor's final compliance with its DBE obligations on a contract
until the amount being counted has actually been paid to the DBE.
Sec. 26.89 [Amended]
7. In Sec. 26.89(a)(3), remove ``Room 2401'' and add ``Room 5414''
in its place.
[FR Doc. 00-29100 Filed 11-14-00; 8:45 am]
BILLING CODE 4910-62-U