Transcript Session 294 Issues That Will Shape DBE Programs in the

Transportation TRB 89th Annual Meeting
Session 294
Issues That Will Shape DBE Programs in the Future
Public-Private Partnerships:
Lessons from the Virginia DOT Experience
Shay Hope
Assistant Division Administrator
Civil Rights Division
Leslie Martin
Northern Virginia District Civil Rights Manager
Civil Rights Division
Public Private Partnership (PPP)
Public-private partnerships are defined by the US DOT as follows:
– A contractual agreement formed between public and private sector partners.
– The agreement usually involves a government agency contracting with a private
company to renovate, construct, operate, maintain, and/or manage a facility or
system.
– While the public sector usually retains ownership in the facility or system, the
private party will be given additional decision rights in determining how the project
or task will be completed.
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VDOT PPP Projects
At-a-Glance
VDOT is establishing itself as a national leader in Public Private Partnerships
PPTA Projects
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Two (2) Active Proposals
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Five (5) Active PPP Projects
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Downtown Tunnel/Midtown Tunnel/MLK Extension – Portsmouth, VA – $1.4M
US Route 460 Corridor Improvements – Petersburg/Suffolk – $1.6M
Route 28 – Northern Virginia - $326M
I-95/395 HOT Lanes Proposals – Northern Virginia/Fredericksburg - $913M
Capital Beltway I-495 HOT Lanes – Northern Virginia - $1.4B
Coalfields Expressway – Southwestern Virginia - $2.6M
Route 58, Hillsville to Stuart – Phase 2 - $ 83 M
Four (4) Completed Projects
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Route 288 - $237 M
Pocahontas Parkway - $346 M
Jamestown 2007 (Route 199) - $32 M
Route 58, Meadows of Dan – Phase 1 - $20M
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PPP
DBE Goals
Project DBE Goals
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Capital Beltway I-495 HOT Lanes
Estimated Cost: $1.4B
DBE Goal: 15%
DBE Goal Amount: $210M
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I-95/395 HOT Lanes
Estimated Cost: $ 1.0B
DBE Goal: 15% Proposed
DBE Goal Amount: $150M
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DBE Goals
A Challenge in Partnering
Establishing the DBE Goal
– Private Sector contractor already has a DBE goal percent in mind.
– DBE community has a DBE goal percent in mind.
– VDOT establishes goals through FHWA approved project goal setting
methodology.
• VDOT Consensus on DBE Goal
• VDOT Commitment to Goal
– Governor Kaine
– Secretary of Transportation, Pierce Homer
– VDOT Commissioner, David Ekern
– Private Sector Contractor and VDOT agree on DBE Goal
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DBE Goal Negotiation
Pros and Cons
Private Sector
•Favors Large Subcontracting Contracts
•Reluctance to debundle large work item
packages
• DBE Program drives cost of project
delivery up
•Prime contractors may have to reach
out to business entities which they do
not have a prior or on-going
relationship
VDOT
•Encourages the debundling of
contracts to allow for more DBE
participation
•Large work item packages presents a
barrier for many DBEs with limited
capacity
•Encourages Teaming/Partnering on
large work item packages
•Encourage DBEs to maximize outreach
and networking opportunties
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Challenges
Big Projects – Small DBE Contractors
Barriers
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Lack of Working Capital
Lack of Experience
Stereotyped perception that DBE program is a burden or liability
Readiness of DBEs to pursue large contracting opportunities
Senior Management Support
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CAPITAL BELTWAY HOT LANES
Transit and HOV Service to Virginia’s Busiest Highway
$1.4 Billion Private, Federal and State Funding Construction Partnership
“The Capital Beltway HOT Lanes Project demonstrates what can be
achieved when the government and the private sector work in
partnership to deliver much-needed improvements to the transportation
network. PPTA balances the public needs with the private sector’s
ability to deliver high quality construction and operations. The private
sector is accepting significant risk to demonstrate that these
partnerships do have a role in moving the U.S. transportation system
into the future. The Commonwealth does not have the funding or debt
capacity to finance a project of this magnitude given its other unmet
transportation needs.”
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Participation of DBEs
What level of commitment has been made by the proposer to use DBEs in
developing and implementing the project?
– How does the proposer address meeting the established DBE goal?
– Has the DBE Liaison Officer been identified?
• Level of authority?
• Scope of responsibilities?
– Have plans been made to utilize DBEs in both design and construction
phases?
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The PPP DBE Challenge
What makes the DBE Program different in a PPP?
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Negotiated agreement
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If Design- Build, no fully documented DBE plan upfront
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Usual tools to ensure compliance may not be available
– Withholding monthly estimates
– Losing other bidding opportunities of little or no consequence
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Partnership to meet the goal
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DBE Program Plan
Fail to Plan, Plan to Fail
PURPOSE AND OBJECTIVES
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Documented Intent and Planned Actions to Meet the Goal
Statement of General Contractor Commitment
Statements of Corporate Commitment
Definitions, Acronyms and References
Key Personnel – Roles and Responsibilities
Statement of DBE Goal
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The Goal to be Achieved
The Strategies to be Employed
Timelines
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Plan Revisions
Submittals/Reviews/Approvals
Good Faith Effort Reviews
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DBE Program Plan
Counting Participation toward the goal
Preconstruction
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Approval of DBE Firm by VDOT
Participation Credit
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Sub-consultants
– Design
– Survey
– Quality Control (Inspection)
Regular Dealers
Subcontractors
Manufacturers
Haulers
Ancillary Services
During Construction
– Commercially Useful Function
Post Construction
– Goal Achievement
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DBE Plan
Plan to meet DBE goal during the work period
– DBE Partners prior to Financial Close
– Plan to attain DBE Goal during Work Period
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Timely notification of opportunities through Outreach
Adjust procurement packages so that a larger number of firms may participate
– Professional Services
– Construction Subcontracts
– Material Purchase Orders
– Good Faith Efforts
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DBE Outreach Solutions
•Meet with anyone, anywhere, anytime
•Early and continuous communication
•Develop outreach plans
•Disseminate information about project
and bring issues back for
consideration for plan and project
developments efforts
• Identify potential DBE contract
opportunities
•Create numerous outreach meetings to
maximize DBE interest
•Provide training and tools to submit
successful bids and perform on the job
•Use of mandatory pre-bid meetings
•Initiate discussions with individual
DBEs
•Identify potential DBE packages
•How to bid training workshops
•Conduct targeted personal marketing
campaign to align supply DBE capacity
with demand of contracting
opportunities
•Presentations at contractor meetings
•Determine capacity of DBEs
•Provide technical assistance early to
DBEs – estimating, bidding, record
keeping, project tracking
•Database of prequalified DBEs
•DBE certification
•Pre-bid technical assistance
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DBE Program Plan
Addressing Barriers to DBE Participation
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Use of Unit Price Contracts vs. Lump Sum Contracts
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Bonding & Insurance Requirements Assistance
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Business Management Assistance
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Capacity Building Assistance
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Size of Bid Packages
Sequence of Construction
Adequate notice for partnering and/or financing growth
DBE Cash-Flow
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Written Agreements
Standardized Invoicing Template
Prompt Payment – Quick Resolution of Payment Issues
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Outreach
Scope of Work Packages
Bid Package
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Package Description
Key Dates
Type of Contract (Unit Price/Lump Sum)
Bid Item Work Description
Location of Work
Planned schedule/sequence of work
Approximate quantity per item
Estimated value of work/supply
Amount attributed to DBE/SWaM vendors in SOW Package
Special Jobsite Conditions
Standard Terms
Other Notes
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Potential Contract Opportunities
•Design
•Survey
•Geotechnical
•Traffic Studies
•Inspection
•Clearing and Grubbing
•Water, Sewer and Utility Lines
•Retaining Walls, Noise Barriers
and Landscaping
•Signage and Lighting
•Fencing
•Earthwork and Drainage
•Highway Construction, Paving and
Striping
•Traffic Control
•Highway Bridge Construction
•Demolition, Hauling and Disposal
Services
•Mechanical Contracting
•Curb and Sidewalk
•Construction related support and
more
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Potential Supportive Service Opportunities
•Reprographics
•Office Supply
•Cleaning & Janitorial Service
•Administrative Staffing Services
•Lunch Wagon
•Catering Service (office meetings)
•IT Software & Support Service
•Courier Service
•Copier Service
•Marketing & Communications
Services
•Security
Local Community Opportunities
•Day care discounts
•Dog walking
•Flower discounts
•Hotel/motel discounts
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VDOT’s
DBE Outreach Program
The DBE Program is managed in part by the General Engineering
Consultant (GEC) for the Mega Projects through the Civil Rights
Program Office.
The office is supported by:
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A Civil Rights Council consisting of representatives from VDOT and the
FHWA to ensure uniform procedures for administration of the Projects
DBE programs.
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A Community Resource Board (CRB) which consists of individual
representing organizations and associations throughout Northern
Virginia to serve as liaisons to the communities regarding business and
employment opportunities.
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VDOT’s
DBE Outreach
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Bid Opportunities
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Work Shops
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Assist the General Contractor and any Subcontractors with seeking DBEs or potential
DBEs capable of performing the work
Serve as liaison to communicate concerns, issues, and contract terms of bid packages
Advertise opportunities via website and organizations
Cross state lines to find capable DBE firms
Provide pre-bid session on behalf of contractor
Bonding
Capacity Building
Designated DBE Outreach Coordinators
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Seek potential DBE firms for future opportunities
Assist with the certification process and other VDOT requirements
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DBE Business Questionnaire
Do The Homework
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Name and Contact Information of DBE
DBE Certification #
Identify type of work DBE can perform
Bonding Capacity
– Single Job Bonding Limit
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Average Annual Dollars
– Volume of Firm
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Bidding Interest
– Subcontractor
– Supplies Service Provider
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Lessons Learned
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Preparing and Identifying DBEs to do business
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Company Profiles/Documented Experience
Prices
Mobilization
Safety Rating
Partnering with other DBE Firms
VDOT approved Suppliers
VDOT Prequalified
Transfer of Warranty
Workmanship Guarantee
Incentive
Personnel and Equipment
New Bids
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Pre-Bid Meetings
Questions and Answers
Assumptions, Constraints, Concessions of Bid
De-Briefings
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Lessons Learned
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Teaming
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Time Constraints
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Business & Logistics Considerations
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Get past egos
Determine leadership role and associated cost
Business license/tax impact; DBE certification impact
Higher pricing (Labor rates, equipment rentals, fuel)
Impact of congestion (time and fuel)
Impact of possible housing costs, equipment and material storage
Pricing
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Lack of completed plans
Lack of planned schedule
Number of crews/amount of equipment needed at one time
Lack of fuel/steel adjustment clauses
Unanticipated schedule delays
Invoice schedule
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Supportive Services
Outreach Events for the DBE Community at Large
• During negotiation, conduct a Meet and Greet event
• Prepare the DBE community to start thinking differently
BOWD Center
• Sponsored Workshops
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Partnering For Success
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Contract Management and Pitfalls
DBE Teaming, Building Capability and Capacity
Getting the Job Done (Prime Contractor’s Prospective
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Best Practices for DBE Success
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Provide Supportive Services to DBEs
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Bonding Requirements
Skills to Perform Work
Proper paperwork
Communication and interaction with Prime Contractor
Contract Proposal
Work most suitable to DBE firm’s capabilities
Pre-proposal conferences and workshops
Certification Agreements between States
Good Reputation and outstanding work performance
Technical and business assistance to help DBEs build capacity to deliver work
Understand Contract Proposal – seek legal assistance
Bid on work most suitable to company’s capabilities to maximize profit and
minimize time and additional expense
Attend Pre-proposal meetings and DBE Workshops
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“Outside of
traffic, there is
nothing that
has held this
country back
as much as
committees.”
Will Rogers
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