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33 APPENDIX A Survey Questionnaire NCHRP PROJECT 20-5 SYNTHESIS TOPIC 34-05 MANAGEMENT OF DISADVANTAGED BUSINESS ENTERPRISE ISSUES IN CONSTRUCTION CONTRACTING QUESTIONNAIRE PURPOSE OF THE SYNTHESIS The purpose of this survey is to request information to document how state departments of transportation (DOTs) are admin- istering the Disadvantaged Business Enterprise (DBE) rules implemented in February 2, 1999. The requirements in this reg- ulation changed the way DOTs and contractors worked with DBE contracts. States have developed different approaches to bidders list information, prompt payment, retainage, good faith effort analysis, commitments and actual achievement mea- surement, and compliance issues of fraud, substitutions, and commercially useful function. This synthesis will primarily focus on post-award contract administration issues and include those pre-award issues that shape or define some of the post-award processes. The operating levels of each program are different and some DOTs will have progressed further in implementation of some techniques and methods than others. The synthesis will identify and categorize the processes and information related to contract administration procedures and practices for construction contracts including construction management contracts and designbuild contracts, master contracts, pass-through contracts administration, and performance measures established other than overall goal achievement, confidentiality practices. RESPONDING AGENCY INFORMATION Agency: Address: City: State: Zip: Questionnaire completed by (please provide primary contact information) Name: E-mail: Current position/title: Telephone: Fax: Agency contact (if different from above) Name: Telephone: E-mail:

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34 PLEASE RETURN THE COMPLETED QUESTIONNAIRE BY APRIL 28, 2003 TO: Gary R. Smith Telephone: 701-231-7880 North Dakota State University Fax: 701-231-7431 Division of Construction Management and Engineering E-mail: gary.smith@ndsu.nodak.edu 120 CME Building Fargo, North Dakota 58105 Please contact Gary Smith if you have questions. INSTRUCTIONS Please be as concise as possible with your response. Many of the questions are open-ended. Follow-up telephone or e-mail contacts are likely to confirm and enhance the information provided. Please complete the contact person information as com- pletely as possible. Please provide any information, studies, or other documents that are relevant to answers provided in the questionnaire. Pro- cedures, policies, and other information that may be of interest to other state highway agencies related to program adminis- tration in the post-award phase is of highest interest. If there is a website containing the policy or document please provide a detailed URL address. This will reduce the need to send hard copy documents. SCOPE--SYNTHESIS LIMITS As much as possible the scope has been limited to issues in the contract administration phase of DBE program administration. However, some background information on pre-award processes and general information is necessary to provide context to the responses. Since much of the information being requested has never been obtained in a synthesis format, your cooperation in responding and providing as much detail as possible will be a significant contribution. SECTION 1. GENERAL ADMINISTRATIVE QUESTIONS 1. Briefly describe the administrative reporting relationship(s) for the DBE program (or attach a copy of organization chart showing the DBE program). 2. How many full-time staff members are assigned to the administration of the DBE program? a. Full-time: Briefly describe the primary responsibility for each full-time staff member: b. How many part-time staff members (temporarily assigned, partial assignment, indirect reporting)? Part-time: Please describe "part time" staff responsibilities. (For example, some district-level EEO personnel may also perform field audits for DBE certification process). 3. Does this administrative unit have responsibility for implementing and maintaining the Uniform Certification Process (UCP) for your state? Yes No How is UCP coordinated?

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35 4. a. How many DBE firms (on average) were listed on your Certification List for 2002? b. How many (on average) of the Certified Firms perform work in highway construction (including design, construction, materials supply, and dealers)? c. How often is the certification list updated (adding new firms, removing graduations, etc.)? days 5. Please indicate what information is publicly available from the Certification List. Owner name Yes No Address Yes No Telephone Yes No Fax Yes No Work type (listed Yes No Work areas (districts Yes No specialties) or radius from office) SIC Yes No Age of firm Yes No Annual gross receipts Yes No Other (briefly describe): 6. a. What was your agency's DBE participation goal for the fiscal year 2002? % b. What was the actual DBE achievement (based on actual payments) for fiscal year 2002? % c. Please describe the method(s) used to collect actual DBE achievement from project data including when the data are collected. d. Do you have a split goal for race-neutral and race-conscious methods? Yes No If Yes, please list 2002 race-neutral goal % and 2002 race-conscious goal % e. Could you describe the method used to include all parties (including the public) in the goal setting process? f. Do you use any set aside contracts as allowed under 49 CFR 26.43 for limited extreme circumstances? Yes No If Yes, please provide your definition or description of what constitutes an "extreme circumstance." 7. a. Does your state have DBE legislation for publicly funded projects using only local funds (state, county, etc.)? Yes No If Yes, please respond to the following: b. Who establishes goals for locally funded highway construction projects?

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36 c. What was the goal for last year? % If No, please respond to the following: d. Do some local jurisdictions establish their own goals? Yes No 8. How do you track DBE firm utilization on federally funded pass-through contracts? 9. In the event a firm is decertified, please describe the process used for notification of the prime contractor and owner. What is the contract goal adjustment procedure that follows the notification? 10. Please describe your analysis process for determining over-concentration in work types (also include the frequency of analysis). 11. What actions are taken when over-concentration is determined and have they been successful? 12. Have any waivers been requested from FHWA on the DBE program administration activities? Please describe program waivers: SECTION 2. PRE-CONTRACT 13. a. What process is used for establishing which contracts are required to have goals? b. Are there specific factors used to select contracts assigned goals? Yes No Please list or describe the factors: c. Are there specific factors that eliminate contracts from goal assignment? Yes No Please list or describe the factors: 14. a. Does your state require prequalification for prime contractors? Yes No b. Do you also require prequalification for subcontractors? Yes No 15. a. Do you maintain a bidder's list of DBE and non-DBE firms quoting highway work for each letting (firms bidding on prime contracts and bidding or quoting subcontracts on DOT-assisted projects)? Yes No b. Please describe how the bidder's list is generated.

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37 c. Describe any changes you have instituted in the process of collecting bidder's list information to improve the process. 16. Please indicate what information is publicly available from your bidders list. Owner name Yes No Address Yes No Telephone Yes No Fax Yes No Work type (listed Yes No Work areas (districts Yes No specialties) or radius from office) SIC Yes No Age of firm Yes No Annual gross receipts Yes No Other (briefly describe): 17. What is the minimum level of self-performed work a prime contractor must perform? % 18. Do you require a contract or performance bond on all projects? Yes No 19. Do you include the contribution of second-tier subcontractors counted? Yes No 20. Do you outsource construction management (CM) services? Yes No If Yes, what portion of the CM services contract is counted in DBE goal achievement? % 21. Does your agency include DBE requirements contracts, other than construction contracts? Yes No a. If Yes, please identify the types of non-construction contracts that would be subject to DBE requirements. (Check all that apply.) Planning Engineering and architectural services Materials testing and inspection Construction inspection Construction management Maintenance services Please note or comment on all of those contracts that are contracted as indefinite delivery and indefinite quantity contracts (ID/IQ). ID/IQ contracts are also called master contracts where work is assigned to a contractor via work orders that modify a master contract, rather than creating new contracts for each project. 22. a. Do you track the number of bid submissions on highway contracts for all DBE firms quoting highway work either as a prime or a subcontractor (successful and unsuccessful)? Yes No Do you also track the dollar volumes for b. DBE prime contract bids? Yes No If Yes, 2002 prime contract bids were $ c. DBE prime contract awards? Yes No If Yes, 2002 prime contract awards were $ Do you also track for all prime contract bidders (DBE and non-DBE prime contractors)? d. DBE subcontract bids? Yes No If Yes, 2002 subcontract bids were $

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38 e. DBE subcontract awards? Yes No If Yes, 2002 subcontract awards were $ Please describe other data that are tracked for each letting: 23. Does your web page provide a list of certified DBEs? Yes No a. In your opinion, is this list helpful to prime contractors? b. In your opinion, is this list helpful to DBE subcontractors? 24. a. Do contractors submit their bids electronically (e-mail or web page) or do they use a traditional paper (computer disk) submission at a central bid submission location on bid day? b. If your agency has elected to use electronic bidding or is currently making the transition: a. Was/is the DBE program involved in the electronic bid implementation process? Yes No b. Was/is the DBE contracting community represented in the implementation decision? Yes No c. What impact has/will electronic bidding had/have on the DBE program? 25. Do you require DBE commitments be submitted as (49 CFR 26.53(b)(3) (check one); a. A condition of bid responsiveness or b. A condition of responsibility prior to award. How many days does apparent low bidder have to furnish commitments? days 26. Is there an active DBE Bonding Assistance program in your state? Yes No If Yes, has the program reduced the difficulty of obtaining bonds for DBE contractors? Yes No If No, please describe activities undertaken to reduce the difficulty of obtaining bonds for DBE contractors. 27. Do you have a written procedure or policy for evaluating good faith efforts (GFE)? Yes No a. If Yes, please provide a copy or URL for the GFE process. b. How do you evaluate a GFE (describe the process steps, skip if you provide in "a" above). c. How many good faith effort requests were submitted in Fiscal Year 2002? d. Of those submitted, how many good faith effort submittals were accepted? e. Do you have a time limit on GFE analysis within which to make a decision? Yes ; Limit is defined as days. No

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39 f. Do you have any special rules or exceptions established to reduce the need for GFE? Yes No If Yes, please provide a description of your exceptions or process definitions that allow GFE. SECTION 3. CONTRACT ADMINISTRATION 28. a. Many construction firms are undercapitalized. Do you administrate a short-term loan program or loan assistance program specifically established for DBE firms? Yes No If Yes, how is funding for this program generated? b. What are the defined allowable uses of funds from this program? c. How is funds use monitored? d. Is there an automatic payment deduction from invoices to repay loans? Yes No 29. Are there local banking firms supporting Short Term Loan (STL) programs for DBE firms in your state? Yes No If your response was Yes, what is your opinion about the effectiveness of the STL program? 30. Please describe the requirements of your subcontractor prompt payment provision or provide a copy of your prompt payment requirements. 31. What process is used to ensure subcontractors are being paid in accordance with your prompt payment requirement? How do you track payments? 32. Describe any sanctions or penalties for prime contractors that fail to comply with the prompt payment requirements. 33. Prior to the February 2, 1999 Final Rule, did you have a state law or policy requiring: a. Prompt payment Yes No If Yes, please describe the policy or law requirements. b. Prompt return of retainage? Yes No If Yes, please describe the law or policy requirements.

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40 34. a. Since the February 2, 1999 Final Rule, have you developed a state law or policy concerning "satisfactory completion" as it relates to the release of retainage to a subcontractor from a prime? Yes No If Yes, how many days after the subcontractor's work is "satisfactorily completed" must the prime contractor release retainage? b. Have there been any contractual issues regarding contract completion or your agency's ability to enforce contract terms? Yes No c. Do you have a "zero retainage for primes" policy as a result of the DBE regulation (or some variation of the zero retainage for subcontracted work)? Yes No d. If you have a zero retainage policy, is it used for all contracts? Yes No e. What contractual issues have arisen related to zero retainage? Overpayment to prime contractors by DOT Limiting DOT ability to obtain final contract documentation from prime contractor (FHWA-47, etc.) Limiting prime contractor's ability to recall subcontractors to the project at completion Other (describe): 35. Please describe the process your agency uses for contract compliance reviews. Who conducts them? When are they conducted? Do you have established criteria for the review, including cross checks in the documentation? 36. Please describe the process used to ensure DBE firms are performing a commercially useful function (CUF) including CUF definition being applied. 37. What sanctions or penalties are there for prime contractors and/or DBE firms claiming a CUF on a contract when it is determined that no CUF was being performed? 38. a. How are you informed about situations where fraud investigations are required? b. How many investigations were conducted in 2002? c. How many cases of fraud were identified? d. How many cases are still pending from 2002 investigations? 39. Occasionally a prime contractor may have to terminate a non-performing subcontractor. When that subcontractor is a DBE, what process is required to ensure the contractor remains in compliance or qualifies for a good faith effort replacing the terminated firm? (Please describe.)

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41 Please describe the general practices and procedures to be followed in removal of a DBE. 40. Under what circumstances would a contractor (prime or DBE) be debarred from lettings? In addition to describing the circumstances, please provide a description of the process used for determination and appeals. 41. What penalties are used for contractors who do not submit their documents, underutilize DBE, or eliminate DBEs without substitution? (Please describe.) Do you have any standards for measuring contractor cooperation? Yes No If Yes, please provide a description of the standard. 42. Do you offer any incentives to contractors to improve DBE utilization? Yes No If Yes, please describe the incentives offered. SECTION 4. OTHER CONTRACT ADMINISTRATION ISSUES Please describe your experiences in the following administrative issues in FY 2002 compared to FY 2001: 43. The number of new firms seeking certification as a DBE has: Increased % Declined % Remained the same Based on your knowledge, what factors are contributing to the increase or decrease? 44. The number of DBE firms requesting removal from certification has: Increased % Declined % Remained the same Based on your knowledge, what factors are contributing to the increase or decrease? 45. The number of firms willing, capable and available to perform highway construction has: Increased % Declined % Remained the same Based on your knowledge, what factors are contributing to the increase or decrease? 46. The number of DBE firms submitting bids as prime contractors has: Increased % Declined % Remained the same Based on your knowledge, what factors are contributing to the increase or decrease? 47. The ability of DBE firms to submit competitive subcontract quotes has: Increased % Declined % Remained the same Based on your knowledge, what factors are contributing to the increase or decrease? 48. Have you performed or contracted studies or analysis to verify the changes noted in Questions 4347? Yes No If Yes, could you please provide a copy of the study or analysis.

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42 49. Do you include design in the overall DBE participation goal? Yes No 50. Do you have separate goals established for construction and design contracts? Yes No 51. For designbuild contracts, what written documentation of DBE commitments do you require from the proposing company or joint venture prior to contract award? 52. What reporting or investigation methods are used to measure contract DBE compliance on designbuild contracts? 53. Have you experienced a trend toward larger contract sizes and bundled contracts (combining two or more smaller contracts into one large contract)? Yes No If Yes, how has bundling and/or larger contract sizes impacted the administration of the DBE program? 54. How are DBE goals established for innovative contracting methods like designbuild? 55. Do the DBE administrative personnel provide guidance and/or advice to engineering or contracts division regarding contract size, bundling or grouping of contracts of certain work types, and distribution of work types in lettings? Yes No If Yes, please describe the process used to advise engineering and contracts departments or divisions with respect to DBE. If No, can you identify problems you have encountered between the contract work packages and DBE participation? 56. Other than measuring goal achievement, please describe what other measures are used to determine program effectiveness. 57. What new methods or techniques are you investigating to improve the operational effectiveness of the DBE program? 58. Mentorprotg programs have been suggested as one effective method to improve effectiveness of DBE utilization. Have you implemented a mentorprotg program? Yes No Is it mandatory? Yes No 59. What are the most effective improvements resulting from the February 2, 1999 Final Rule? 60. What future needs do you think are necessary to further improve the DBE program and utilization of DBE contractors? 61. What are the greatest barriers limiting improvement in DBE firm utilization in the highway construction market?

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43 DOCUMENT REQUEST The availability of previous studies and literature on this particular topic generally identifies legal challenges to the pro- gram. If you have conducted a study of a specific issue within the DBE program (good faith effort, designbuild, etc.), a copy of each publication or study would be appreciated. These studies have not been tabulated or documented for research purposes. Many other agencies would be interested in seeing what has been studied. A complete bibliographic record of all studies, papers, and related papers on program administration will be compiled based on the documents provided. The requested copy is for the purpose of examination for subjects relevant to this synthesis and to prepare the bibliography. No further distribution or reproduction will be made without permission of the submitting agency. Thank you for your time and contribution to the success of this synthesis project. The final summary report is scheduled for November 2003. PLEASE RETURN COMPLETED SURVEY ON OR BEFORE APRIL 28, 2003