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Disadvantaged Business Enterprise Law Update
- 1. © 2014 Kraftson Caudle. All rights reserved.
Annual Transportation Construction Law and Regulatory Forum: DBE Compliance and Case Law June 11, 2014
Jon Straw
Kraftson Caudle
McLean, Virginia
www.kraftsoncaudle.com
- 2. © 2014 Kraftson Caudle. All rights reserved.
Preview
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Commercially Useful Function
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Responsible vs. Responsive in Bid Evaluations
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DBE False Claims Act Violations
- 3. © 2014 Kraftson Caudle. All rights reserved.
Commercially Useful Function
- 4. © 2014 Kraftson Caudle. All rights reserved.
Commercially Useful Function
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Services: perform, manage, supervise
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Materials & Supplies: negotiate price, determine quality and quantity, ordering, installing (if applicable), and pay for material.
•49 C.F.R. 26.55(c)(1).
- 5. © 2014 Kraftson Caudle. All rights reserved.
Hypothetical: Type of Work Omitted
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Bid Form C-111 (VDOT minimum DBE requirements).
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DBE goal = 25%
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Lowest bidder DBE performance = 28%
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But, type of work not identified for one of three DBE’s.
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So, cannot count that DBE’s percentage.
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Upon rebid, DBE’s work was furnishing and installing only.
- 6. © 2014 Kraftson Caudle. All rights reserved.
Hypothetical: Overconcentration
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Unsuccessful, Non-DBE Traffic Controls Contractor Bidding on State Hwy Job
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Alleged overconcentration of DBEs within traffic controls industry as violation of EP Clause.
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Experts argued differently:
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Compare traffic controls industry to transportation construction industry.
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Compare other contractors in traffic controls industry.
- 7. © 2014 Kraftson Caudle. All rights reserved.
Responsible vs. Responsive
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Consider whether jurisdiction DBE component of bid submission is judged as responsive or responsible element.
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Cf., Virginia, Maryland, Illinois, D.C.
- 8. © 2014 Kraftson Caudle. All rights reserved.
Hypothetical: Responsible vs. Responsive
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Pre-bid goal = 25%
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Prime had 7 DBE subs in bid (23%) and GFE.
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Owner requested Prime revise DBE submission finding one sub’s percentage should have been 75% instead of 100%.
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Prime revised form and added another DBE sub; Owner did not object. (25%+ now)
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NOIA stated Prime was responsive and responsible.
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Prime submitted another form “substituting” a DBE because removed DBE had not submitted letter of intent. (still 25%+)
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Removed DBE sub still would perform other work, just not listed on form.
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Prime argued 49 C.F.R. § 26.53(b)(3).
- 9. © 2014 Kraftson Caudle. All rights reserved.
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Contractor liable if:
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Knowingly does (presents or submits); OR
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Knowingly does not do (withholds or non- verification).
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See 31 U.S.C. § 3729
- 10. © 2014 Kraftson Caudle. All rights reserved.
Actual DBE FCA Violations
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Manafort Brothers, Inc. ($2.4M)
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Structural Steel
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Retaining Walls
- 11. © 2014 Kraftson Caudle. All rights reserved.
Actual DBE FCA Violations
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Schuylkill Products, Inc. ($119M + 2 years prison for executives)
- 12. © 2014 Kraftson Caudle. All rights reserved.
Annual Transportation Construction Law and Regulatory Forum: DBE Compliance and Case Law June 11, 2014
Jon Straw
Kraftson Caudle
McLean, Virginia
www.kraftsoncaudle.com
Hinweis der Redaktion
- Geyer Signal, Inc. v. MnDOT, 2014 WL 1309092 (USDC, D. Minn., 3/31/04).