NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 1

UNITED STATES DEPARTME NT OF TRAN SPORTATION

+ + + + + DISADVANTAGED BU SINESS ENTERPRISE (DBE) PROGRAM NOTICE OF PROPOSED RULEMAKING

+ + + + + LISTENING SESSION

+ + + + + THURSDAY DECEMBER 5, 2013

+ + + + + The Listening Se ssion met in the Robert S. Marx Media Cent er, U.S. Department of Transportation, 1200 Ne w Jersey Avenu e, S.E., Washington, D.C., at 11:30 a.m., Carmela Vaccarella, Facili tator, presiding. DEPARTMENT STAFF: KATHRYN B. THOMSON, Ac ting General Counsel WILBUR BARHAM, FAA Of fice of Civil Rights LINDA FORD, FT A Office of Civil Rights MAMIE MALLORY, FAA Of fice of Civil Rights NICHOLE McWHORTE R, FHWA Office of Civil Rights MARC PENTINO, Department al Office of Civil Rights JO ANNE ROBINSON, Offi ce of the General Counsel LEONARDO SAN ROMAN, Of fice of Small and Disadvantaged Busi ness Utilization WARREN WHITLOCK, FHWA Of fice of Ci vil RightsNEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 2

SPEAKERS: MARCELA ALCANTAR , Diversified Bu ilders and Engineers Council ROBERT ASHBY RENEE BANKS, G.W. Peop les Contract ing Co., Inc. KENNETH CANTY, Freeland Construction Company, Inc. JIM CRUM, Associ ated General Co ntractors of America JEFFREY CRUZ, E.E. Cruz & Company, Inc. TOYA ESTER, J&B St eel Erectors, Inc. FELICE FARBER, New York Road and Infrastructure Impr ovement As sociation CHARLES GIBBS, Georgi a United Truckers Association, Inc. NAOMI GLEAN, John P. Picone AMY HALL, Ebony Construction JERRY HANNER, JM Ha nner Construction BRAD HUBBERT, RA Smit h Asphalt and DeKalb NAACP Branch EARL H. JENKINS, Armand Resource Group, Inc. RICH JULIANO, American Road & Transportation Builders Association WILLIAM MILLER, Dragados USA JOANN PAYNE, Women First DENISE RICHARDSON, Ge neral Contractors Association of New York MEG RIETSCHLIN, Rietschlin Construction Inc. DWAYNE SAMPSON, Transp ortation Diversity Council LESLIE SAUNDERS, Leslie Saunders Insurance Agency, Inc. SARAH von der LIPP E, Law Office of Sarah von der Lippe SUSAN WENDT, Wendt Productions, Inc.NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 3

T-A-B-L-E O-F C-O-N-T-E-N-T-S Opening Remarks: Kathryn B. Thomson, Acting General Counsel

................ ........... 5 Session Procedures: Ca rmela Vaccarella, Facilitator ....

................ ........... 9 Speakers on Topic No. 1: Joann Payne ......... .......... ...... 16 Kenneth Canty .......

.......... ...... 20 Leslie Saunders .... ................. 25 Sarah von der Lippe

........... ...... 30 Rebuttal or Comm ents from Audience on Topic No. 1/Open Chat Rooms ....

............ ..... 36

Recess .............. ............ .......... 53 Speakers on Topic No. 2: Earl H. Jenkins .... ................. 54 Robert Ashby ........

.......... ...... 59 Meg Rietschlin ......

.......... ...... 64 Amy Hall ............

.......... ...... 69 Susan Wendt .........

.......... ...... 75 Kenneth Canty .......

.......... ...... 81 Toya Ester .......... .......... ...... 87 Leslie Saunders .... ................. 92 Dwayne Sampson ...... .......... ...... 96 Sarah von der Lippe

........... ...... 98 Jerry Hanner ........ ............... 103 Rebuttal or Comm ents from Audience on Topic No. 2/Open Chat Rooms .... ................ 107

Recess ............ ............ ........... 119NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 4 Speakers on Topic No. 3: Earl Jenkins ........ ............... 120 Rich Juliano ........ ............... 126 Robert Ashby ........ ............... 132 Meg Rietschlin ...... ............... 136 William Miller ..................... 139 Felice Farber ....... ............... 146 Brad Hubbert ........ ............... 152 Jeffrey Cruz

.............. .......... 157 Renee Banks ......... ............... 165 Jim Crum ............ ............... 169 Marcela Alcantar .. ................. 176 Charles Gibbs ....... ............... 182 Sarah von der Lippe ................ 183 Brad Hubbert ........ ............... 188 Jerry Hanner ........ ............... 192 Denise Richardson .. ................ 202 Rebuttal or Comm ents from Audience on Topic No. 3/Open Chat Rooms .. ................. 208 Closing Remarks

................ .......... 232NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 5

P-R-O-C-E-E-D-I-N-G-S 1 11:31 a.m. 2 MS. THOMSON: Good morning, 3 everyone. Thank you for joining us today at the 4 Department of Transpor tation, this listening 5 session on our DBE No tice of Proposed 6 Rulemaking. 7 My name is Katie Th omson and I have 8 the privilege of serving as the acting general 9 counsel here at the Depar tment. But on behalf 10 of Secretary Foxx and th e entire DOT Leadership 11 Team, I want you to know how pleased we are to 12 have you here today and to have the opportunity 13 to receive your val uable input on our 14 DBE-proposed rule. 15 The Department as a whole is deeply 16 committed to our DBE pr ograms and the goal of 17 combating discriminati on and its continuing 18 effects by ensuri ng that small, disadvantaged 19 businesses are provided the op portunity to 20 fairly compete for fed erally-assist ed highway, 21 transit and airp ort contracts. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 6

Secretary Foxx an d Deputy Secretary 1 Porcari have made it cle ar to all of us that the 2 DBE programs are vita lly important to the 3 Department and to our stakeholde rs, and have 4 stressed that we all must do everything in our 5 power to ensure that th e programs are strong, 6 robust and effective. 7 Stakeholder in put like we will 8 receive today, is esse ntial to achieving that 9 objective. 10 The Office of General Counsel is 11 proud to play a key role, leadership ro le in DBE 12 programs throug hout the Department. We have 13 played this role since the program's beginnings 14 in 1980. 15 The General Coun sel's Office has 16 with the cooperation and collaboration of 17 Federal Highways , Federal Transit and the FAA, 18 Departmental Office of Civil Rights and the 19 Office of Small and Disa dvantaged Business 20 Utilization, been instr umental in developing 21 policy and in writing DB E program regulations, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 7

official guidance and interpretation that 1 represent the of ficial view and position of the 2 Department. 3 As you can see fr om the rulemaking 4 activity over t he past couple of years, the 5 Department is committed to continue its 6 improvement in the impl ementation and oversight 7 of our DBE programs. 8 Today's meeting is just one 9 manifestation of that and you'll see m ore in the 10 coming months. 11 Given the nationw ide reach of the 12 DBE programs and the thousand s of DOT recipients 13 charged with the re sponsibility of 14 administering the pr ogram, stakeholder 15 involvement is, and will continue to be, a key 16 component in our abili ty to realize one of the 17 principal goals of the pr ogram -- expending at 18 least 10 percen t nationally of 19 federally-assisted co ntract dollars through 20 DBEs. 21 In the comments on the pending NPRM, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 8

various commente rs expressed in terest in the 1 Department holding a public meeting on the 2 proposed changes before we issue a final rule. 3 We heard you, an d Secretary Foxx in 4 particular heard you. We are interested in 5 listening carefull y to any concerns or comments 6 our various stake holders may ha ve about the 7 program improvem ents, and our pro grams benefit 8 from your in volvement. 9 The entire DOT te am looks forward to 10 continuing to work with our colleagues inside 11 the Department, our state and local partners, 12 and with our DBE and no n-DBE stakeholders to 13 continue to achi eve and improve upon success in 14 this program. 15 We expect to ha ve a productive 16 session today and I want to thank you all in 17 advance for your contributions. 18

I also hope you don't mind, but given 19 the high level of departmen tal interest on these 20 issues, several of our department's senior 21 leaders including Polly Trottenberg, our Under 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 9

Secretary for Policy, ma y drop in at various 1 points throughout today' s session to listen in. 2 So, thank you again for your 3 attendance. Thank you for your willingness to 4 participate. I look fo rward to the discussion 5 today. 6 MS. VACCARELLA: Ok ay, good morning. 7 My name is Carmela Vacc arella and I'll be the 8 facilitator for today's session. I'd like to 9 get some basic housekeepi ng details out of the 10 way first. 11 Restrooms are located immediately 12 outside of this confer ence area through the 13 glass doors. Turn to your left. There's 14 another set of glass do ors and then both the 15 men's and the women's restr ooms are on the left, 16 okay? 17 It's a secure fa cility as you all 18 realize. You we nt through securi ty coming in 19 here. So, visitors are re quired to be escorted 20 throughout the buil ding when yo u leave the 21 immediate conferen ce center area. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 10

That does not include the restrooms, 1 okay? But if you leave for any reason to go 2 outside of the bu ilding to go to Starbucks or 3 someplace else, you will ha ve to go back through 4 security and be escorted back to this area. 5 All right. There is no eating or 6 drinking permitted in the media center 7 auditorium, but you can have something to drink 8 outside the doors right out here. 9 There's another large session in the 10 atrium area, but there's a walkway right there 11 that you can have someth ing to eat or drink. 12 So, now I'd like to introduce the DOT 13 panel and briefly go o ver the structure of the 14 meeting and the procedur es we'll be using for 15 today's session. 16 The information is also outlined in 17 the agenda that you were given when you walked 18 in and signed into th e conference session. 19 So, as I brie fly say the panel 20 members' names, if you could just raise your 21 hand? 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 11

Jo Anne Robinson from the Office of 1 General Counsel. Marc Pentino, De partment of 2 Office of Civil Rights . Leonardo San Roman, 3 Office of Small and Disa dvantaged Business 4 Utilization. Warren Wh itlock, FHWA Office of 5 Civil Rights. Linda F ord, FTA Office of Civil 6 Rights. And Mamie Mal lory, FAA Office of Civil 7 Rights. All right. So, these are our panel 8 members. 9 Today's session wi ll be structured 10 around listening to yo ur comments re lative to 11 the three specific aspec ts of the DBE Notice of 12 Proposed Rulema king. Each to pic will be 13 addressed separately. 14 Each participant who submitted a 15 request to speak relative to a topic area will 16 be given five minutes to provide their comments. 17 You will come up to the microphone 18 set up in the middle. It's a littl e different 19 from the agenda that you were given ahead of time 20 for that purpose. 21 If a speaker is not present when I 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 12

call your name, we will skip to the next person 1 in the list. And then wh en we get to the end of 2 the list, I will go back an d recall that name, 3 okay? 4 Speakers, if you would, preface your 5 comments with your name and the organization 6 that you represent. And I want to let everybody 7 know a transcript of all commen ts received 8 during the session will be placed in the docket 9 before the comment period closed on December 26 10 of this year. 11 Again, the sess ion is structured to 12 maximize the opportunity to listen to the public 13 concerns on specific aspects of the proposed 14 changes. 15 Therefore, memb ers of the panel may 16 ask clarifying qu estions of th e speaker if 17 necessary. 18 There will not be a 19 question-and-answer pe riod during th is session 20 where speakers are asked questions of the panel, 21 however. So, it 's maximized to get your input. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 13

At the end of each session, topic 1 session by the speakers that are the formal 2 speakers, members of the audience, that includes 3 listeners and speake rs, will be given an 4 opportunity to comment in response to views or 5 information pr ovided, okay? 6 If you wish to take advantage of this 7 opportunity, you were given three cards that 8 were attached to your agenda. 9 Use the cards. Green for Topic 1, 10 blue for Topic 2, and pink for Topic 3. Just put 11 your name and or ganization repr esented on the 12 card, hold it up. 13 We'll have my co -facilitators who 14 will be in the aisles to pick up those cards, 15 okay? So, all you need to do is hand them up and 16 they'll pick them up. 17 We will take people who request to 18 do those comments during the open period. We'll 19 try to get them in the order that they were 20 submitted to people. And we'll take them in 21 groups of five . And I will call the names. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 14

Again, line up by the microphone in 1 the center of the room. Comments will be 2 limited to one minute per speaker, okay? 3 For web partici pants, and we have 4 quite a few people listening through the web, the 5 chat rooms on the web wi ll be open for the 6 comments during the re buttal period only. 7 Comments should st art with your name, 8 organization and th e topic reference. 9 If you are respon ding to a commenter 10 in the room, if you can please reference that 11 commenter, that woul d be helpful also. 12 The Department wi ll not respond to 13 questions posed through the chat room, but all 14 comments submitted through the chat room will be 15 placed on the NPRM docket. 16 Lastly, before we begin the formal 17 session, I would like to remind everybody that 18 the comment period for the DBE NPRM is extended 19 to December 26 of this year. 20 You may submit co mments by going to 21 www.regulation s.gov. Follow the online 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 15

instructions that you'll see there. 1 You can also subm it them by mail, 2 hand deliver or by fax and see th e Federal 3 Register Notice at 78 FR 68016. 4 Are there any questions before we 5 start? 6 (No response.) 7 MS. VACCARELLA: Okay. Let's get 8 started. We'll go to the first topic area which 9 is, what are the specific quantifiable costs and 10 benefits associated with completing or 11 reviewing the proposed forms; PNW, 12 Certification Application, Uniform Reports, DBE 13 Payment Data from the perspective of a 14 certifying entity, an applicant firm or 15 recipient wher e applicable? 16 Frank Cara. 17 (No response.) 18 MS. VACCARELLA : Joann Payne. 19 (Discussion of f the record.) 20 MS. PAYNE: Okay. Well, first of 21 all, where is Bob Ashby? I can't believe I'm the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 16

first one up, but I am . So, here I go. 1 All right. Thank you, first of all, 2 for allowing me to be here. I am Joann Payne and 3 I represent Women Fir st National Legislative 4 Committee. I repres ent those women DBEs 5 certified in the Dis advantaged Business 6 Enterprise Program. 7 And when I say I represent them, I 8 represent them here on the Hill as well as 9 hopefully sometimes here at USDOT. And in some 10 instances throughout my 20 some years, 30 years 11 almost working on this is sue, I have visited an 12 awful lot of states. 13 So, I have - especi ally when we have 14 DBE hearings. So - or certificatio n hearings. 15 So, anyway, so I have a long - very long history 16 of this program. 17 In reviewing the proposed documents 18 that are stated in Cat egory Number 1, I have 19 found issues of grave concern. Ho wever, the 20 total Notice of Pr oposed Rulemaking has caused 21 me heartburn. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 17

If I may, I woul d like to say that 1 instead of making such discriminatory changes in 2 the Notice of Propos ed Rulemaking, the 3 Department, which I have a lot of respect for, 4 honestly, Federal Highway Administra tion and 5 the recipients should take a long look in the 6 mirror and make necessar y changes in how they 7 administer and implem ent the DBE program. 8

I would estimate from the complaints 9

I have received from women and minorities in most 10 states, that the personn el in those states and 11 the Federal Highway Administra tor in that 12 particular state or region are not trained 13 and/or qualified to imple ment the DBE rules as 14 written. 15 And I must say that I believe that 16 personally thos e who try to im plement the 17 program on the state lev el come with their own 18 set of assumptions of their own. 19 It appears from the proposed 20 changes, it is the DBE that is being punished for 21 the lack of competency on the part of federal 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 18

highways and the recipients. 1 I have 11 letters that I would like 2 to present as ex amples of the discrimination 3 against women and acti ons and examples of 4 incompetencies on the state level. 5 Women First is concerned about the 6 following proposed change s: Add the equity in a 7 DBE's home to count to wards the personal net 8 worth, adding a seco nd component to an 9 individual's presumpt ion of disadvantage 10 rebuttal, request for spouse's personal net 11 worth statement even if the spouse is not 12 involved in the DBE firm. 13 Now, if the spouse is involved in the 14 firm, it's legitimate. You should ask for it, 15 but not if the spouse is not involved in the firm. 16 Also, obviousl y we're concerned 17 about the IG report sugg esting that the DBE 18 program should be - use several aspects of the 19 SPA's 8(a) program. It has recommended term 20 limits on part icipation in the DBE program. 21 I am hoping and praying that those 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 19

who are writing our rules and regulatio ns do not 1 do that. This would de stroy the prog ram, in my 2 estimation. 3 I believe that the Department of 4 Transportation and the Ad ministration have lost 5 sight of the real purp ose of the DBE program. 6 The purpose of the program is to 7 level the playing fi eld for women and 8 minority-owned firms. 9 All DBE firms face discrimination 10 every day even if they a re successful firms. 11 Statistics show on ce a DBE firm gr aduates or is 12 decertified out of the program, within two years 13 they lose up to 50 perc ent or more of their 14 federally-funded highway projects. 15 The DBE program is not an 8(a) 16 program where prime contr acts are set aside for 17 qualified 8(a) firms. The DBE program is a 18 subcontracting goal-setti ng economic 19 development program based on competition 20 amongst small, medium and large construction 21 firms. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 20

Actually, I believe that our program 1 works more closely related to SBA small business 2 program, and I would suspect no one would suggest 3 term limits for that partic ular program. Thank 4 you. 5 MS. VACCARELLA: Okay. Sharon 6 Maxwell. 7 (No response.) 8 MS. VACCARELLA : Sharon Maxwell. 9 (No response.) 10 MS. VACCARELLA : Kenneth Canty. 11 MR. CANTY: Good mo rning, everybody. 12 My name is Kenn eth Canty, Freela nd Construction 13 Company with offices in Charleston, South 14 Carolina, Maryland, Savan nah, Georgia and soon 15 to be New England. 16 My comments surround the 17 application and certification process, as well 18 as the program itself and improveme nts that 19 definitely need to be made. 20 We have 50 state s, as everybody 21 knows, in the Un ited States. There are 50 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 21

different forms. Filling out the forms is quite 1 burdensome. 2 We're an 8(a)-cer tified company. 3 We're South Carolina DOT. We got Massachusetts 4 DOT. We've worked on Kentucky. Kentucky's 5 been in the state of preapproval for nine months. 6 And Maryland, we've got our applicati on in to 7 Maryland. 8 We're almost forc ed to - it's like 9 there's a barrier of ent ry in doing the forms. 10 If you do one, you woul d think it would be 11 identical to everybody, right? They're all the 12 same. It's called a unified ce rtification 13 program. 14 You hear my fr ustration, because 15 it's costing me hundreds of thousands of dollars 16 to get the stuff in. 17 Due to the comple xity of the forms 18 and the sensitive info rmation, t ax returns, 19 personal net wo rth, social secu rity numbers, 20 you've got to have a sp ecific person in the 21 organization who does it. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 22

That person can' t be just some 1 person off the street. I've tried it with 2 interns. That doesn't work. Actually, my 3 executive assistan t handles that. 4 I actually had to hire an executive 5 assistant at $45,000 a ye ar plus benefits to do 6 the forms. Still wit h that, it's almost 7 impossible to do it. 8 My proposal woul d be this: You guys 9 really probably need - un like the la st comments 10 I heard, we're members of the 8(a) pr ogram. I 11 think it's a phenomenal program. I like the 12 fact that it's got term limits, beca use you're 13 supposed to not be a DB E after a cert ain point. 14 Your DBE program almost, for lack of 15 a better word, keeps you being a subcontractor 16 for your entire life. 17 You fill out the applications. 18 Let's say you get cert ified in three or four 19 different states . You get cert ified in those 20 states. You go and do work. 21 Well, the contrac ts are - almost net 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 23

themselves where you can't be a prime. You 1 can't be a prime to - you can't be a prime to the 2 government. 3 I understand we do a lot of work with 4 Dragados. Dragados will be making comments 5 later. We do work with some of the other primes, 6 but the program is almost designed - the program 7 is almost designed where you're always going to 8 be there. You're ne ver going to be - there's 9 never a threshold to pass that bar of net worth 10 and no longer be a DBE. 11 Going back to the applications - 12 going back to the applica tions, if you submit 50 13 applications, yo u get 50 diff erent answers. 14 I would submit to you guys that - and 15 I'll put Maryland on t he spot right now. I've 16 submitted Maryland. Maryland asked for the 17 South - they sai d, give us your South Carolina 18 package. Gave them t he exact package, because 19 we're certified in South Carolina. 20 They come back wi th a response that 21 says, no, you need to give us the whole 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 24

application all over again and th en we're going 1 to start all over again. 2 So, you FedEx it to them and they get 3 it, and then you go into that nine-month queue. 4 Meanwhile, there are projects going 5 out worth billions and bi llions of dollars that 6 you're waiting in line for. 7 It's almost like when you put in for 8 these projects if they kn ow there's something - 9 you're coming in from out of state and there's 10 something you're going for, it's almost like 11 you're held up purpose ly when you go into 12 different states. 13 I've seen it in Kentucky. I've seen 14 it in Maryland . Didn't see it in Massachusetts 15 so much. That's bee n one of the more 16 streamlined states. 17 With that, I'll yield the floor. 18 Thank you. 19 MS. VACCAREL LA: Thank you. 20 Michael Berry. 21 (No response.) 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 25

MS. VACCARELLA : Michael Berry. 1 (No response.) 2 MS. VACCARELLA: Leslie Saunders. 3 MS. SAUNDERS: Good morning. I'm 4 Leslie Saunders. Preside nt of Leslie Saunders 5 Insurance Agency, and I am certified as a DBE and 6 ACDBE in all 50 state s, most of w hich have a 7 unified certific ation. And I'll agree with the 8 previous comments. It's anything but unified. 9 And to quantify the costs associated 10 with maintaining these certification s, I will 11 tell you that everythi ng Kenneth said is 12 correct. 13 I have two full-time very senior 14 employees who complete th e financial parts and 15 the basic work on th e applications with my 16 involvement. 17 You can't just have anybody doing 18 it. You have to have a secure place to keep the 19 information. 20 We have fili ng cabinets full of 21 information. So me of our files are, you know, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 26

can go from the floor to the top of the chair. 1 And, again, we've been certified since 1994 2 known to most people in most of the states. We 3 participate in industr y association s. We 4 attend conferences. 5 Our own UCP at the Tampa Airport does 6 an excellent job. An d I'm so proud of the 7 outreach that they've be en making for the new 8 construction of the Tampa Airport. It's 9 amazing. 10 And the way they have explained 11 their program and en couraged people to 12 participate in the program is great, but every 13 state is not like my home state. 14 It makes me wonder why my documents 15 couldn't reside at my home UCP a nd be available 16 for any other state that wanted them. 17 They could reques t a digiti zed copy 18 of my site visit, whi ch was recorded. They 19 could request to go into a secure server and see 20 whatever documents they wanted, but why am I 21 still having to make paper copies of my tax 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 27

returns and every schedule and my corporate 1 returns and every piece of paper associated with 2 my business? 3 And you're going to find this maybe 4 surprising, but I even ha ve to send copies of an 5 old SBA loan check repa yment from my first 6 company that was formed in 1980 to show the funds 7 that formed my company th at those funds were my 8

own. 9 And I signed for that SBA loan myself 10 even though the woman who was in charge of the 11 SBA office in Tampa said, oh, dear, you won't get 12 this loan if your hu sband doesn' t co-sign. 13 And I said, well , let's just see, 14 because this is my business and it's my money and 15 I think I can pay the SBA back. And I insisted 16 and I did get the $10, 000 SBA loan. And 17 fortunately, somehow and for some reason before 18 I was ever cert ified, kept those canceled 19 checks. 20 If I didn't hav e those, maybe I 21 wouldn't have even been eligible to be certified 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 28

in the first plac e even though it was clear to 1 all that my business was mine, was st arted with 2 my own funds and I'm the hundred percent owner. 3 Now, one of the things that Kenneth 4 said I don't really agree with. I oftentimes 5 bid as a prime on proj ects and I think that's 6 going to come abou t more and more. 7 And I'm very fortunate in the 8 transportation sp ace in which I operate that 9 there are opportunities fo r me in other parts of 10 the country aside from Florida, which is why I 11 have all the ce rtifications. 12 But I would say no w I'm at well over 13 a hundred thousand dollars a year in staff, and 14 probably another $25, 000 in paper, in mailing, 15 in FedExing and resend ing and in accounting 16 costs. And I wonder why that's necessary when 17 clearly I have demons trated that I meet the 18 requirements and my home state maintains such 19 good files. 20 Why can't the othe r UCPs just visit 21 those files and then rece rtify or c ontinue my 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 29

certification on an annual basis? Thank you for 1 having this li stening day. 2 MS. VACCARELLA: Sarah von der Lippe. 3 MS. VON DER LIPPE: Hi. I'm actually 4 Sarah von der Li ppe. For th ose of you who 5 thought I might be here under an assumed name 6 today, it's really me. 7 I want to start off by saying thank 8 you for having this liste ning session. This is 9 really important. And I know that a lot of us 10 here in this room who read the NPRM and did our 11 work in trying to submit comments asked you to 12 do this and we really appreciate that 13 responsiveness. I thin k I speak fo r everybody 14 in saying that. 15 And I also want to say that I don't 16 know everybody here toda y, but I know a lot of 17 you. And I know for sure that the intent of the 18 people who work on th is program is good. 19 I know that wheth er they're at USDOT 20 or in the states at the recipients or they're 21 MBEs or they're primes - or they're DBEs or 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 30

they're primes, that th e intent around this 1 program is where it's supposed to be. 2 The problem that we're having is 3 getting to the rules and regulations that allow 4 the program to operate t he way that it should. 5 And one of the most impo rtant things I want to 6 say to you today is that we need to re member what 7 this program is for. 8 This program was started to remedy 9 discrimination. Real, tangible, d ocumented, 10 up-the-wazoo discriminati on that was brought to 11 the attention of Congress and to this agency and 12 was the reason fo r this program. 13 The intention was to ensure that 14 women and people of color who had businesses and 15 wanted to partici pate in government 16 contracting, in federal transportation 17 contracting, could have a playing field in which 18 they would actually be able to do that. 19 I really believe that if you back up 20 with the NPRM and ask yourself line by line, 21 question by question, change by change does this 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 31

NPRM get us closer to, or farther from the 1 original goal of elimin ating discrimination, 2 you will be ha lfway there. 3 I submitted comme nts to the record 4 along with the Leadership Conference for Civil 5 Rights, I'm the contact person on those, and a 6 whole list of organiz ations from the civil 7 rights side of issues. 8 And I'm not going to read through all 9 those today, because you have them and you don't 10 need to hear that from me again, but I would say 11 that it probably is a moment where we need to stop 12 and do a teeny bit of sort of common sense 13 question asking of ourselves. 14 I would challeng e everybody in this 15 room, not just the pane lists, but all of us to 16 read that asset section of the PNW form, the 17 current form. I'm not even talking about any 18 new requirements. 19 It requires that you provide 20 present-day val ue for everythi ng you own and 21 list it. And it explic itly says that that 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 32

includes household goods and clothing. 1 So, while you'r e trying to figure 2 out which appraiser you should call to assess 3 your socks, think about the implications for a 4 small business, because that's in the rule as it 5 stands today. 6 Our goal has to be to step back and 7 figure out not how do we add more data 8 requirements into this form, but how do we reduce 9 the burden the form currently imposes. 10 And I'm here to say I will help in 11 whatever way I can in that process, but we've got 12 to back up and realize that when we're asking for 13 so much more information than the IRS ever asks 14 us for, we've put ourselves in as an additional 15 barrier in this system instead of removing 16 barriers in the system. 17 Finally, somethi ng that I - I didn't 18 know the gentleman who sp oke before today, but 19 I appreciated your comm ents. And Joann and 20 Leslie I know and have wo rked with before. I'm 21 an example of another sort. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 33

I am not a certif ied DBE. I have 1 never been a certifie d DBE. I am a sole 2 practitioner consti tutional lawyer. 3 I can't afford if I want to give 4 governments - I only re present gove rnments and 5

I give those governments a rate that is far below 6 the rate that I would be paid as a market attorney 7 in constitutional law. 8 I can't afford to do that and hire 9 executive assistants that make me - that would 10 allow me to produce these certifications, and I 11 have worked all over the country. 12 Now, someone - so me people in the 13 room might say, well, wa it a minute. As a solo 14 practitioner, wh at the heck are you doing here 15 anyway, because you can't do go vernment 16 contracts, right? Yo u're not big enough. 17 And the grins from some of my 18 colleagues in the ro om are because I've 19 represented this de partment and I've 20 represented the FAA, and I think I did an 21 excellent job fo r both clients. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 34

I know that as a solo pra ctitioner 1 I provided value and exce llent legal advice to 2 those entities, but I li terally have never been 3 able to afford to be c ertified and I' d like to 4 be. 5 I'd like you to be able to count me 6 in your numbers. I think I did good work and God 7 knows I'm way below all the PNW levels. Thank 8 you so much. 9 MS. VACCAREL LA: Thank you. 10 Frank Cara. 11 (No response.) 12 MS. VACCAREL LA: Frank Cara. 13 (No response.) 14 MS. VACCARELLA : Sharon Maxwell. 15 (No response.) 16 MS. VACCARELLA : Michael Berry. 17 (No response.) 18 MS. VACCARELLA: Okay. Anybody in 19 the room want to su bmit the comments? 20 (No response.) 21 MS. VACCARELLA : I would like to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 35

thank the speakers for this area. We are now 1 going to go into the rebuttal/com ment period. 2 The chat room will be open for comments for 15 3 minutes. 4 Member of the au dience, if you want 5 to comment, please hold up the card and we'll 6 take them and you can ge t in line right now. 7 Marcela Alcantar. 8 MS. ALCANTAR: Can you hear me? 9 MS. VACCAR ELLA: Yes. 10 MS. ALCANTAR: My name is Marcela 11 Alcantar. I'm the president and CEO, 12 Diversified Builders an d Engineers Council. 13 I'm also a small busin ess engineering firm, 14 professional services. 15 And the reasons we got formed as a 16 group is because the Hispanic community, we feel 17 that we haven't been heard in regards to comments 18 particular to when it comes onto disparity 19 studies. 20 We got formed specifically to review 21 your forms. And the forms we have found out that 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 36

the reason we, the Hisp anic community and the 1 other minorities got overutilized , is because 2 two individuals in each - one or two individuals 3 in each minority group oversize or grew the whole 4 entire program. Just one or two individuals. 5 That doesn't represent the intent of 6 the program, fulfilling the requirement with one 7 individual. 8 We went a step further and 9 identified that that indi vidual that kicked us 10 out of the program, per se, was an individual 11 that bid on no bid. It was not a bid that was 12 based on DBE requirem ents, but a low bid. 13 And also what we're finding out that 14 now that there is race conscious goals, that 15 individuals that could be successful ly primes 16 are bidding as the su bconsultants, which 17 basically - and these are successful 8(a) 18 individuals that easi ly can be primes. 19 So, what's happ ening now is that 20 large DBEs are eating up the small DBEs just as 21 stated on your USDOT audit. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 37

So, in reviewing this form now 1 currently after two DBE disparity st udies, now 2 we find out that we're the largest available 3 group, but we're the lo west being utilized. 4 In other words, now substantially 5 overutilized, b ut we can't get resolution in 6 another disparity study to continue our next 7 level of resolution in this issue. Thanks. 8 MS. VACCAREL LA: Thank you. 9 Brad Hubbert. 10 MR. HUBBERT: Thank you, madam chair. 11 One of the comments I would like to make in regard 12 to it is that in the prog ram, I think that there 13 should be a limit to the DBE program. 14 And the reason I say that is because 15 in my experience, is t hat the abuse and misuse 16 and fraud is perpet rated by both DBE 17 contractors, prime cont ractors, and in some 18 cases those who are expec ted to administer the 19 program. 20 Another point I would like to make 21 is that I understand the need for certification, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 38

okay, but we want to make sure that the folks that 1 are in the program is du ly deserving of being in 2 the program. 3 Like some of th e other speakers 4 before me, I think we have lost the real intent 5 of the program. 6 I was here on the Hill when the 7 program was - at its in ception of an MBE WBE 8 program working with then Congressman Mitchell 9 to try and get it passed. 10 It has evolved from the MBE WBE 11 program to a DBE program, which is all inclusive 12 and all - 90 percent of our population based on 13 that definition is eligible to be in the program. 14 And the sad part ab out it is, is that 15 the DBE program is only 10 percen t. So, if you 16 calculate all the folks that are eligible for the 17 program, you will find that the program should 18 definitely be more than 10 percent. 19

In my estimation, the program should 20 be in the neighborhood of 60 to 65 percent, 21 because all the population of folks that's in the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 39

program that can qualif y for the program will 1 constitute about 80 to 90 percent of our 2 population. 3 And I guess you wo uld say, well, how 4 do you arrive at that co nclusion? With every 5 DBE program, anyone that 's qualified is social 6 and economically disadvantaged as in the program 7 whether he white, black, gr een, red or yellow or 8 whatever. 9 Anyone that is of a minority ethnic 10 group if they qualify un der that scenario, is 11 eligible for the program. 12 All the Asians, Native Americans, 13 white females, and we ha ve added to the program 14 disabled veterans as part of the program now to 15 a degree. 16 So, if you look at all those 17 categories of folks that is in the program and 18 then you say, well, 10 percent of the dollars 19 that the federal government spends should go to 20 this group, then where are the rest of the 90 21 percent going? Somebody needs to tell me that, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 40

okay? 1 So, I think we ne ed to look at the 2 program as the young lady said, and look at the 3 real intent of the progra m. And then tailor the 4 program so we're doing a good job of 5 certification, you know. 6 In Georgia, we g ot about 2,000 folks 7 DBE certified, ok ay? Well, now, if you go down 8 that list and see how many of those DBEs are doing 9 some work, you will find a small per centage. 10 Probably less than two pe rcent. Two percent of 11 the dollars that goes to Georgia is done within 12 the DBE program. 13 So, that's a disgra ce in my opinion. 14 So, I'm on the list. So, I stated that for me. 15 I do appreciate the opportunity to speak. 16 MS. VACCARELLA: All right. Charles 17 Gibbs. 18 MR. GIBBS: Hi. Good morning. I 19 just want to say thanks for the oppo rtunity. I 20 am here repres enting the truckers. I'm the 21 president of Georg ia United Truckers 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 41

Association. 1 And the problem that we have, the 2 major problem that we have is with rates, you 3 know. We don't believe we are be ing paid a fair 4 amount. 5 A typical trucker, he's being paid 6 between 60, $65 an hour. Now, wi th the cost of 7 fuel going up, it's impossible for us to continue 8 to be working at such low rates. I think the 9 rate should be at least a hundred dollars an 10 hour. 11 A lot of times th e way how things are 12 set, the truckers, we are being pit against each 13 other, you know. 14 So, I like for th e program to be set 15 up in such a way where we're paid a fair wage, 16 you know. That's the concern of most of my 17 colleagues. 18 Like I said, I'll be short and spicy. 19 So, if you can work on th at, that would be great. 20 Thank you. 21 MS. VACCARELLA: Okay. Thank you. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 42

Dwayne Sampson. And I'd remind 1 people to speak up in the microphone so that 2 everyone can hear. 3 MR. SAMPSON: Thank you. Good 4 morning. My name is D wayne Sampson, President 5 and CEO of Transportati on Diversity Council. 6 And addressing To pic Number 1, what 7

are the specific quantifiable costs and benefits 8 associated with complet ing and review of 9 proposed forms, the specif ic quantifiable costs 10 associated with complet ing or revi ewing the 11 proposed form with each new applicant firm is the 12 time allotted to a full- time equivalent staff 13 person to review the docume ntation. 14 The concern with the new information 15 related to certificatio n is that in order to 16 accurately assess t he information, 17 certification st aff will have to be certified 18 public accountants. 19 The cost to a small agency could be 20 significant if that particular level of detailed 21 review is required to review the company 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 43

evaluations, quarterl y earnings reports, 1 property assessments, etcetera. 2 Certification st aff will have to 3 have strong accounting and finance ba ckgrounds. 4 As it stands, compliance offices which typically 5 house certificati on activities are 6 understaffed. 7 Requiring this le vel of review is 8 unreasonable and anticipa ting that it will be 9 done correctly is unrealistic. 10 The regulation s currently state 11 that additional informat ion may be required to 12 complete the certific ation proce ss. This 13 accommodates the need to conduct in-depth 14 reviews. Thank you. 15 MS. VACCARELLA : Thank you. 16 Kenneth Canty. 17 MR. CANTY: Good morning, again. 18 We've talked about a lot of problems. I have as 19 well talked about that. 20 I'd like to ta lk about maybe a 21 possible solution that you guys have in your 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 44

regs, and a lot of certify ing agencies do. It's 1 just not bein g implemented. 2 We talked about the DBE program in 3 some - in my estimatio n, and I'll submit to 4 everybody in here I'm a construction contractor. 5 I don't have a law firm or an accounting firm. 6 So, my viewpoint may be a little bit different. 7 In construction, a lot of the jobs, 8 the big jobs, maybe 50 million, a hundred million 9 north of that, my experience on a personal level, 10 I was on the Artery Proj ect in Boston, the Long 11 Island Expressway in N ew York, the Ravenel and 12 the deconstruction of the bridges in Charleston. 13 So, I've got a - been on a lot of different jobs. 14 Got a company, went forward, wanted 15 to be a prime contrac tor and that was my 16 viewpoint. Utilized my engineering degree and 17 all my experience to not be a DBE anymore. 18 The one thing we have found and we 19 have them approv ed, Small Business 20 Administration mentor/protégé with Dragados USA 21 and we had a lot of - it was hard to get that. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 45

And one of the re asons I think it was 1 really hard to get that was you don't have a lot 2 of DBEs - well, let me rephrase that. 3 There aren't a lot of DBEs who have 4 the - there are a lot of DBEs who have the role 5 and wish to be prime contractors, but there's not 6 the way. 7 The mentor/protégé program is 8 probably one of the best ways, be cause you team 9 with a large firm or a fi rm. And these firms on 10 these jobs to be a men tor, they're going to be 11 large firms. They're not going to be 10, $20 12 million companies. They're going to be - am I 13

- 14 MS. VACCARELLA: Well, that's the 15 minute, but - 16 MR. CANTY: Okay. I'll just close 17 out by saying that you guys do have a 18 mentor/protégé program within your regs. I 19 understand it's a trial program. I believe you 20 should implement that acr oss all 50 states and 21 put that in as requirem ents on jobs, on large 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 46

jobs to increase DBE ut ilization. Thank you. 1 MS. VACCAREL LA: Thank you. 2 Jerry Hanner. 3 MR. HANNER: Thank you. My name is 4 Jerry Hanner with JM Ha nner Construction out of 5 Chattanooga. 6 MS. VACCARELLA: Can you speak 7 louder, sir? 8 MR. HANNER: Okay. My name is Jerry 9 Hanner. I'm with JM Hanner Cons truction 10 Company out of Chattanooga. 11 I want to comment just briefly on 12 just what the ge ntleman said. You know, it was 13 - when we talk about t he DBE program, initially 14 it's something that Pres ident Johnson said that 15 you don't take a person that's been hobbled by 16 chains for years and then release them and put 17 them at the starting bl ock and tell him he's 18 ready to compete with everybody and think you've 19 been fair. 20 I like that stat ement, because what 21 he's saying is there' s got to be mentoring. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 47

We keep runnin g into situations 1 where we don't have enou gh - we're not trained 2 enough - enough trained people to compete. So, 3 you know, part of the program as far as the 4 certification, I think, should be is that we 5 should have it where we are looking to develop 6

some companies and not always holding them to the 7 mark as to where they are at that moment. 8 So, I just want to say that because, 9 you know, it's no reason for us to even have the 10 program especially from the black viewpoint with 11 all the blacks and our hi story of all the years 12 that we've been deprived. It's even foolish to 13 think about deve loping the progr am and blacks 14 taking advantage of it without some kind of 15 mentoring program. 16 MS. VACCAREL LA: Thank you. 17 Is there anybody in the room that 18 would like to speak? 19 MS. PAYNE: Ma y I say something? 20 MS. VACCAR ELLA: Yes. 21 MS. PAYNE: Firs t of all, I just 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 48

wanted to say that I love the 8(a) program. I'm 1 so not against the 8(a) program, but I don't 2 think it applies to o ur program, to the DBE 3 program. That wo uld be number one. 4 Secondly, I just wanted to say that 5 from the statistics that I have read, 95 percent 6 of the majority, majori ty, I'm talking about 7 majority-owned companies, obviously white males 8 I'm referring to, subc ontractors today were 9 subcontractors when this program started. 10 All right. So, the point of this 11 is, is that, yes, there are those who would like 12 to be prime contractors. There's no doubt about 13 that. 14 But even the majority 15 subcontractors that actually do highway 16 construction work, th ey started out as 17 subcontractors. The y are today still 18 subcontractors. 19 Hopefully their companies have 20 evolved and grown and their receipts have grown, 21 but they have chosen to stay subcontractors. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 49

And that is over 95 percent. 1 So, I mean, not everybody wants to 2 become a prime contr actor. This is a 3 subcontracting program. So, I just wanted to 4 remind everybody of that. 5 MS. VACCAREL LA: Thank you. 6 Anybody else wo uld like to speak? 7 MS. ALCANTAR: Ye s. Just a brief 8 comment in regards to the prime and sub in small 9 business DBEs, is that co nsider the NA ICS code. 10 Because sometimes if he 's a bridge co ntractor 11 that is able to do prime work versus a landscape 12 person that does mowi ng lawns, ther e's a huge 13 difference when calcula ting percentage of 14 availability. Thanks. 15 MS. VACCAREL LA: Thank you. 16 Sir, please state your name, please. 17 MR. GIBBS: Yes, my name is Charles 18 Gibbs. Again, as I said, I'm the president of 19 Georgia United Truckers Association. I also 20 have my own business , DPG and Associates. 21 I own a small hau ling company, you 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 50

know, dump trucks mainly. And I think having 1 this meeting here today if we could - I encourage 2 the mentoring of small companies where you could 3 have like a training fa cility, you know. 4 Because, you k now, so many of us truckers, you 5 know, we don't have t he time to attend when 6 there's workshop s, you know. 7 We're just too bu sy just trying to, 8 you know, hold it toge ther, but there is a 9 serious need. There is a serious need for 10 training. 11 And, like I said , that's one of the 12 reasons why I formed this trucking association 13 where we could, you know, try and get people more 14 involved. 15 I'm going to be going back to my 16 members to let them k now what's going on, 17 because, you know, it 's hard. It is 18 ridiculously hard on - most of us are 19 subcontractors, you know. We'd love to have the 20 opportunity to become primes, bu t, you know, 21 it's just difficult, you know. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 51

So many of my colleagues, you know, 1 they lost their homes, th ey lost their trucks, 2 they lost their wives because the cost of living, 3 you know, since 2008, it 's been a major fight 4 just trying to ho ld it together. 5 I don't know what you guys can do, 6 but we need some help out here. 7 MS. VACCARELLA: Thank you very much. 8 The 15 minutes are up. The chat room is now 9 closed. 10 (Discussion of f the record.) 11 MS. VACCARELLA: Okay. So, I've 12 been told we can take a ten-minute break. So, 13 we'll break right now for 10 minutes. We'll 14 come back at 12:00 o'clock. 15 (Whereupon, the proceedings went 16 off the record at 11:52 a.m. for a brief recess 17 and went back on the record at 12:03 p.m.) 18 MS. VACCARELLA: Please be seated. 19 We'd like to ge t started again. 20 (Pause in th e proceedings.) 21 MS. VACCARELLA: All right. Topic 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 52

Number 2. What are the specific quantifiable 1 costs and benefi ts associated with requiring 2 certified DBEs to submi t additional documents 3 with the annual no-chan ge affidavit from the 4 perspective of a cert ifying entity and a 5 certified DBE? 6 Speakers for th is topic, Earl H. 7 Jenkins. 8 DR. JENKINS: Good afternoon. I am 9 Dr. Earl Jenkins and I' m here on behalf of 10 Gregory Jenifer, President and CEO of Armand 11 Resource Group, Incorpor ated, who could not be 12 present due to a scheduling conflict. However, 13 he sends his apologie s and requests that I 14 present his prepar ed remarks today. 15 We are discussi ng submission of 16 documents required to con tinue certif ication or 17 to recertify a firm as DBE eligible. 18 The premise sh ould be that the 19 original certificati on docume ntation or 20 determination rendered was complete and that the 21 investigation was conducted in a thorough manner 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 53

consistent with USDOT requirements by properly 1 trained certifyi ng personnel. 2 As such, the revi ew process should 3 only address those issues that may have changed 4 during the prior period or which may impact a 5 firm's eligibility, i.e., change in ownership, 6 personal net worth, rel ocation of the firm, 7 additional skill sets or a changed NAICS code. 8 Requiring the DBE business owner to 9 submit any addition al documentation or 10 requiring agency pe rsonnel to review this 11 documentation which may not even be required to 12 render a determination of continuing 13 eligibility, has an associated cost. 14 Collection, subm ission, subsequent 15 review at a minimum, involve the expense of time. 16 Time has become a precious commodity 17 for DBEs. Especially DB Es with av erage gross 18 receipts barely enough to sust ain a workforce 19 larger than 10 or fewer employees. 20 If you are a small business owner and 21 you desire to pursue busi ness opportunities in 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 54

multi states, you are for ced to comply with the 1 additional submission re quirements and local 2 registrations within each jurisdiction. 3 If you have mult iple renewal dates, 4 the small business owner spends time once again 5 collecting, submittin g and responding to 6 requests sometimes fr ivolous for renewal 7 information generally on multiple dates 8 throughout the year. 9 If you are larg er, possibly your 10 firm may have more compl ex issues or items to 11 address. 12 Then there are documents that get 13 delayed that require ti me to compi le. Again, 14 time is the issue especi ally if the documents 15 requested are rout ine in nature. 16 In theory, the be nefit to a small 17 business navigating its way through the 18 certification re newal process is that it sees 19 the process as an opportunity to update critical 20 information about its cap abilities th at ideally 21 should make the firm more attractive to primes 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 55

for subcontracting op portunities or to the 1 transportation agency for a direct procurement 2 opportunity. 3 Theoretically, th e benefit is that 4 once again the firm ha s proven its continuing 5 eligibility. The ultimate reward for enduring 6 this process is that th e firm will on e day win 7

a contract or subcontract or be issued a purchase 8 order to supply some ma terials or equipment. 9 The reality is that the prime 10 contractor or consultant does not do business 11 with a list from a direct ory. They do business 12 with the businesses they own. They do business 13 over and over again wi th the same certified 14 established businesses. 15 From this persp ective of the DBE, 16 the cost does really vary per firm and the pain 17 of collecting and submitt ing renewal documents 18 can best be meas ured in time. 19 The reality is th at if the renewing 20 firm were to receive a co ntract, the costs would 21 be inconsequential. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 56

The certification departments of 1 several agencies are understaffed and 2 certification processing staff are called upon 3 to perform collateral ci vil rights duties in 4 addition to proces sing certif ication 5 applications. 6 How long it takes to process a 7 certification application depends on the 8 experience and tr aining of the certification 9 officer. 10 Frankly speaki ng, certif ication 11 specialists with proper training and practical 12 experience are becoming an extinct commodity and 13 it depends on a great degree of the agency 14 performing the certification. 15 Agency personnel have to balance the 16 cost and benefits a ssociated with requiring 17 additional supporting do cumentation from DBEs 18 which are vital to making a reasonable 19 determination that more likely than not the 20 applicant, or in this ca se the certified firm, 21 continues to be eligible to participate in a DBE 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 57

program. 1 From an agency perspective, an 2 important factor to the timely completion of the 3 certification process is the willingness and 4 cooperation of the business owner. 5 If a business owner completes the 6 certification applicat ion properly, submits 7 information requested in a timely manner, 8 information and document ation that the business 9

owner should have and makes themselves available 10 for a site visit if neces sary, the application 11 can be processed in a time ly manner. Thank you. 12 MS. VACCARELLA : Robert Ashby. 13 MR. ASHBY: Yeah, hi. This really 14 addresses a comb ination of the fi rst and second 15 topics, but I th ink they fit. 16 We all know cert ification requires 17 a balance between valid program interests of 18 program integrity and facilitatin g entry into 19 the program. 20 My concern about the NPRM has always 21 been that it goes kind of too far toward the first 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 58

objective whil e slighting the second. 1 The propos ed additional 2 certification forms and requiremen ts, both 3 initial and continuing , are, in my view, too 4 onerous and to o intrusive. 5 And the application form expands 6 from, by my account, from about seven to about 7 37 pages, includ ing a three-page list of 8 additional documents. 9 From a one-page form that we 10 borrowed from SBA and never formally 11 incorporated in the rules, now there's a 12 nine-page PNW statement. 13 Not necessarily invalid stuff on it, 14 could be useful in some cases. But in every case 15 routinely, it see ms, to me, a lit tle too much. 16 Not only appl icants, but their 17 admittedly non-disadvantaged spouses might have 18 to submit the PNW form under one option despite 19 the fact that the only purpose of PN W and the 20 program is to determi ne whether somebody is 21 actually disadvanta ged economically. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 59

The Paperwor k Reduction Act 1 estimates of eight hours for the application and 2 10 for the PNW fo rm strike me as serious 3 underestimates. I don't think there' s much in 4 the way of empirica l support for them. 5 And while I well know that OMB lets 6 agencies get away with skyhook numbers, for 7 NPRMs they're a lot to ugher and want more 8 empirical evidence for final rules. 9 And I think we actually could 10 profitably do some studies of how long does it 11 take somebody, es pecially a new business owner, 12 to actually fill out one of these things? Have 13 we done the fieldwork? 14 The purpose of the Affidavit of No 15 Change was explicitly to save people who have 16 already gone through the certification process 17 from having to go throu gh what looks like a 18 repeated certif ication process. 19 And it seems to me that greatly 20 increasing the amount of materi al that you've 21 got to submit with the Affi davit of No Change to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 60

some degree undermin es that purpose. 1 I mean, I've got to admit as a lawyer 2 who is intimately fami liar with the program, I 3 look at what a business would have to fill out 4 and I get in timidated. 5 I mean, it seems to me I didn't have 6 to fill out this much paperwor k to adopt my 7 daughter. 8 I can only imagine the effect of all 9 this and potentia lly deterring pa rticipation by 10 relatively unsophisti cated small business 11 owners who want to ge t into the program. 12 From the point of view of the 13 certification agencies, you know, we all know 14 and the previous gentle man made some reference 15 to this, state an d local certific ation agencies 16 are chronically understaffed. 17 Making the staff go through a lot of 18 additional paperwork on a routine basis for 19 every firm, will only serve to incr ease their 20 backlogs and detract f rom the effor ts they can 21 put into difficult, mo re problematic cases. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 61

My thought is that there is some 1 merit in going for a much simpler, shorter 2 application form for in itial applicants. 3 Particularly those belo w a given size level 4 whether it's dollars or number of employees or 5 whatever the criterion mi ght be. My analogy is 6 the IRS form 1040EZ. 7 And then this would free 8 certification st aff to make more searching 9 inquiries into larger firms, those who we talk 10 about, you know, as the ones who always get the 11 contracts time after time, firms where 12 suspicions or co mplaints have been aroused, you 13 know, spend the more intens ive time if you're a 14 certification staff on those more difficult 15 cases by removing some of the burden of going 16 through a lot of routine paperwork fo r a lot of 17 firms who don't really need attention quite that 18 close. 19 It would also, by the way, make it 20

more likely that state and local staff could pull 21 some of their effort s away from routine 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 62

certification work and into the post-award 1 monitoring that everybody says is so necessary. 2 I mean, there's probably - and this 3 is certainly my experien ce from te stifying in 4 fraud cases, there's pr obably more DBE fraud 5 goes on in post-award contract actio ns than 6 probably even go on in certification. 7 And I think taking some of the burden 8 away from the paperwork end here would allow us 9 to realign our prioriti es in a way that would 10 benefit the program. 11 MS. VACCAREL LA: Thank you. 12 Meg Rietschlin. 13 MS. RIETSCHLIN: Thank you for the 14 opportunity. I am Meg Ri etschlin, President of 15 Rietschlin Constructio n, a small contractor 16 located in North centra l Ohio in a largely 17 agricultural rural area. 18 A longstanding go al or dream has 19 been to become a highway contractor building 20 small bridges. 21 In 2005, I joined the Ohio 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 63

Contractors Associ ation, OCA. At the time, a 1 couple people thought I should consider applying 2 to the DBE program. 3 I would print th e forms and their 4 requirements, study them and then set them 5 aside. 6 Rietschlin Construction did not 7 have the prequalification and work types, the 8 bonding capacity or the pr equalification dollar 9 limits to successful ly bid highway work. 10 The process loo ked futile. I 11 really didn't have the extra time to pull it 12 together to apply. 13 I looked at the DBE application 14 process again in 2008 and 2009. In 2010, I began 15 participating in DBE co mmittees at the Ohio 16 Contractors As sociation. 17 I started to le arn about the DBE 18 program, resear ch the applicatio n process. I 19 was asked to particip ate in a stakeholder 20 meeting at the Oh io Department of 21 Transportation. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 64

I began to view the program as a way 1 to help grow and expand my business and fulfill 2 a goal. 3 In June 2011, I took two weekends. 4 I didn't have cash in the business to pay for a 5 lawyer or a sp ecialist in DB E application. 6 On Friday evenin g I studied the DBE 7 application forms and info requirements. That 8 Saturday and Sunday I pulled records from boxes, 9 files, computer records and assimi lated the 10 info. 11 The following week end I was able to 12 prepare a draft of data to be inputted on paper. 13 Then I submitted my el ectronic application. 14 The applicati on process took 15 several months and step s. In mid -December 16 2011, I received my DBE certif ication. 17 I have no idea ho w much time I have 18 invested in becoming a DBE. It is many 19 thoughtful hours in addit ion to my normal work 20 routine. 21 Trying to quantify my time is 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 65

difficult. Pu lling the data together and 1 completing the applicatio n probably required 44 2 hours for those two weekends. 3 Pulling the data together and 4 completing the annual aff idavit requires about 5 eight hours of my time each year. 6 Requesting more paperwork from me is 7 going to cost me twic e. The hours pulling 8 together the informat ion, and the data to report 9 and the opportunit y costs associat ed with that 10 time. 11 If you wish to place the burden of 12 obtaining appraisals of residents, re al estate 13 and company valuation s which ar e normally 14 performed upon a decisi on to liquidate your 15 assets as part of the additional annual 16 documentation, those costs will be high. 17 More costs in administrative 18 processing just lowers profit, lo wers net worth 19 and my bondability. 20 A large contractor has departments 21 and people specialized in each phase of business 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 66

process. 1 In the case of the small, growing 2 construction company such as mine, the 3 responsibilities of all the business 4 administrative pr ocesses fall on one person. 5 And that's me. 6 Imagine being the accounting 7 department, the HR depa rtment, the financing 8 department, the project processing department, 9 IT, legal, the bid review department and having 10 to understand all the rules, regulations and 11 goals involved. 12 If the goals of the DBE program is 13 to build small busi ness opportu nity in the 14 highway construc tion market, I don't see more 15 complicated rules, regu lations and forms as 16 anything but a hindrance. 17 And from where I sit, I would just 18 like to see a suspensio n of rule writ ing for a 19 couple years just so I can catch my breath. 20 (Laughter.) 21 MS. RIETSCHLIN: Thank you very much. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 67

MS. VACCAREL LA: Amy Hall. 1 MS. HALL: First, I want to thank you 2 for the opportunity to f ly to Washington to be 3 here with you all. This has been a very 4 important topic for our company, as well as other 5 companies here. 6 I am - or I am president of a heavy 7 highway construc tion company lo cated in Toledo, 8 Ohio. 9 And to be able to answer Topic Number 10 2, quite frankly, is in credibly diff icult to 11 quantify the amount of dollars that are going to 12 be associated with producing more documents, 13 more paperwork, more of this, and the difficulty 14 lies in the fact that ev erybody's company is 15 different. 16 Our company mig ht be a little 17 larger. We might have be tter resources. We 18 might have better accoun tants, better attorneys 19 versus a small company. 20 I might be in the office more. Some 21 other people might be in the field more. They 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 68

might have more field duties, as well as like Meg 1 said, come back into the office and now you 2 become HR, payroll, IT and all the above. 3 So, to be able to give you a dollar 4 figure, it's, quite fr ankly, impossible, but 5 what I can tell you is that my concern is 6 two-part. Not only is it the amount of time 7 that's going to be associated with producing 8 additional documentation such as the valuation 9 of the business, personal equity in my home, so 10

on and so forth, but what is going to be done with 11 that information on ce you all get it. 12 Our business is in operations to 13 make money just like ev eryone's business. We 14 all are in busine ss to make money. And if we 15 aren't making mo ney, our bondi ng capacity is 16 affected, our abil ity to purchase equipment and 17 go to the bank and get a loan is af fected, our 18 ability to have pa yroll and to meet payroll is 19 affected, and the list is long. 20 However, when you compound 21 providing additional documentation and now 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 69

there's a subjective po int in there in which 1 individuals at the DO T are able to use this 2 information and subjectively decide whether or 3 not your personal net worth is over the threshold 4 or you - not over the th reshold. Let me take 5 that back. That you've accumulated too much net 6 worth even though you ha ven't met your personal 7 net worth threshol d, that's huge ly significant. 8 That opens Pandora's Box to disaster 9 and now we've become somethin g that is 10 subjective in opini on versus factual 11 guidelines. 12 With this result possibly being in 13 the company's graduation from the program, I can 14 tell you out of the companies that I know who have 15 graduated from the program, zero are in business 16 today. Not one. 17 And so, what does this look like to 18 us? If we graduate o ut of the prog ram because 19

someone decides I have too big of a net worth even 20 though I haven't met the thresholds, the result 21 is you have 60 plus em ployees who are employed 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 70

by our company toda y now unemployed. 1 This year we have contribu ted 2.7 2 million dollars in payroll which is stimulating 3 the economy. And 80 perc ent of our personnel 4 live in rural towns outside of the major city of 5 Toledo that I live in. 6 So, imagine how $2 million that are 7 going into sustaining ru ral economie s are going 8 to negatively impact that local area. 9 We're dealing with equipment sales. 10 We're dealing with parts sales. We're dealing 11 with all kinds of busines ses who are associated 12 with us who will be negat ively impacted by the 13 closure of our business. 14 And one more qu antifiable thing 15 which is kind of a sideba r, when we were talking 16 about the UCP applicat ion to give you guys an 17 example of what it looks like to us, we just 18 submitted our UCP application to Kentucky and it 19 was 8.10 pounds. Our application was nine 20 pounds of pape rwork. This much paperwork. 21 We are DBEs in Ohio, in Michigan, in 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 71

Indiana and in Georgia, but yet Kentucky needs 1 our paperwor k again. 2 So, after being in business for the 3 amount of time, it's ni ne pounds of paperwork 4 that you have to reproduce over and over and over 5 again. It's th e same stuff. 6 And so, you want to quantify 7 something? Imagine ha ving how much time it 8 takes to wrap yo ur arms around taxes, cancelled 9 checks from 10, 15 years ago, bank records, 10 equipment purchases and all of these things. 11 The cost is huge. 12 I understand that the DOT is 13 concerned with fraud an d trying to prevent 14 fraud, but what happens in the process is it also 15 prevents true, viable businesses from being able 16 to perform what they do. 17 Let's not lose the focus of what the 18 program's intent is, is to be able to grow the 19 capacity of companies wi thout putting them out 20 of business due to over regulations and more 21 rules. Th ank you. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 72

MS. VACCAREL LA: Frank Cara. 1 (No response.) 2 MS. VACCAREL LA: Frank Cara. 3 (No response.) 4 MS. VACCARELLA : Sharon Maxwell. 5 (No response.) 6 MS. VACCARELLA : Sharon Maxwell. 7 (No response.) 8 MS. VACCARELLA : Susan Wendt. 9 MS. WENDT: Hello, and thank you for 10 holding this listening session. I'm Susan 11 Wendt from Wendt Produ ctions, a woman-owned 12 small business. 13 We work with government and primes 14 and we provide particular ly strategic sourcing 15 for IT hardware and PPE safety equipment. 16 Being a woman in business has always 17 been a challenge. In the `80s, I worked for a 18 Fortune 100 retail in the corporate office and 19 I was one of three pair s of high heels amongst 20 a sea of hundreds of Fl orsheims and wingtips. 21 In those days if you were a woman in 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 73

business, you had to work twice as hard as the 1 males, you had to produce twice as much as they 2 did and you had to break records. 3 For those of us wh o are women, we had 4 a saying. That's not hard , but at least we told 5 ourselves that. 6 In those days, I worked probably 60, 7 70 hours a week. And I made $15,000 less than 8 my male counterparts whom I overproduced. 9 Now, I have gradu ated over the years 10 and I have become a woman -owned business owner 11 of my own. And now, go sh, in the graduation, I 12 work 70 to 90 hours a wee k and there are times 13 I'd like to ge t a paycheck. 14 So, as a woman-owned small business, 15 it's still not a level pl aying field when it 16 comes to federa l contracting. 17 30 percent of all of the 18 privately-held businesses in this country are 19 owned by women. 20 However, it's mandated by the 21 federal governme nt that the fede ral contract 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 74

should be met by fi ve percent of spending to 1 women-owned small businesse s. They have yet to 2 meet that goal. 3 In 2012, it was 3.9 percent. In 4 2013 through April it was trending 3.37. So, 5 let's look at some numbers. 6 Now, do keep in mi nd that those that 7 are considered women-owned sm all businesses 8 represent all ethnicities. 9 According to the SBA, at that time 10 there were 8,085 mino rity firms certified. 11 There were 29,769 women-owned small business and 12 economically disa dvantaged women-owned small 13 businesses. 14 That means that there were 3.6 times 15 the number of women-ow ned small bu sinesses as 16 there were minority firms certified. 17 Now, when you ta lk about obligated 18 contracts, at th at time there were 26,950 19 obligated contracts to minority firms for a 20 total of $3.3 billion. For women-o wned small 21 businesses, 303 contract s totaling 9.3 million. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 75

That means that for every dollar 1 that a woman-owne d small busine ss received in 2 contracts, federa l contracts, 355 times that 3 number went to mi nority businesses. 4 Within the DOT it is heartening to 5 see - to be a woman-owned small business. 6 Through the DBE progra m, women-owned small 7 businesses have the opportunit y to earn 8 contracts throug h the DOT and as prime subs. 9 Because of this, I feel that it is 10 imperative to preser ve the integrity of the 11 program by providing the tools to the states who 12 are in the front line of the certification. 13 And if that me ans additional forms 14 and financials are required to renew each year, 15 so be it. If it preserv es the integrity, that's 16 the most important th ing of the program. 17 The processing costs, let's 18 actually talk dollars and cents. Because in my 19 company, what we do is we actually quantify 20 everything. 21 We have job numbe rs for everything 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 76

that we do. We track hours. We track hard 1 costs and expenses. 2 For us to be a ble to renew a DBE - 3 and, by the way, we're DBE in 16 states with three 4 applications pending. Also WOSB, WBENC and 5

some other alphabets as well. And I serve on the 6 U.S. Women's Chamber of Commerce as the small 7 business liaison to the Depart ment of 8 Transportation. 9 So, to process a renewal for our 10 company with a state, actually the hard costs run 11 between anywhere from three to $600 - 300 to $600 12 each. 13 That's not that bad considering the 14 integrity that we're look ing for, because let's 15 look at the benefit side of that now and it asks 16 for a quantifica tion of the benefit side. 17 DBEs are required - well, let's put 18 it this way. You're not going to get business 19 if you don't do it. 20 You have to at tend matc hmaking 21 sessions, outreach sess ions. You have to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 77

attend contractor s meetings. You have to 1 attend project roll-outs. 2 Each and every o ne of these if you 3 quantify the cost to at tend these, is between 4 $500 to $4,000 depending upon whether or not it's 5 in a nearby vicinity or if it's out of state. 6 So, as an examp le, for the I-4 7 Ultimate Program in Or lando, I'm already up to 8 number seven on the numb er of events that I have 9 attended for that and wh at I have invested into 10 it. 11 When you are talking about the 12 benefits, the return on investment, if a DBE - 13 the most disheartening th ing for a DBE to have 14 is to put in for a contra ct and find that they 15 lose to a perennial favor ite DBE who perhaps is 16 not eligible for the program. And that's 17 probably one of the worst things that can happen. 18 So, the harm that you can do by 19 allowing any kind of f raud to continue, is going 20 to keep those legitimate firms from being able 21 to move up in the system. Thank you. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 78

MS. VACCARELLA: Nicholle O'Malley. 1 (No response.) 2 MS. VACCARELLA: Nicholle O'Malley. 3 (No response.) 4 MS. VACCARELLA : Kenneth Canty. 5 (No response.) 6 MS. VACCARELLA : Kenneth Canty. 7 MR. CANTY: Good afternoon. The 8 first thing I want to say in addition to the 9 comments we've heard, but just clarify some of 10 my earlier commen ts, I am in no way saying that 11 this should be if you get to a magical nine years, 12 you should get tossed ou t of the program. I'm 13 not saying that at all. 14 What I'm saying is, as DBEs we have 15 to have an exit strategy , and that's part of a 16 larger conversation. 17 Are we going to be having this 18 conversation in 20 years about be ing DBEs? Are 19 the demographics of the country going to dictate 20 that? Probably not. It' s changed a lot in 10 21 years. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 79

I would submit that in the next, I 1 would say, probably abou t 20, 35, 20, 40 what a 2 DBE is then is not goi ng to be a DBE now, because 3 a lot of things have changed. 4 The election of the pres ident has 5 changed a lot of thing s. It's changed the 6 paradigm, but that doesn't mean that things have 7 gotten better in those comm unities. So, you've 8 got to have - you've got to have - in my opinion, 9 you've got to have a mark for when you cross that 10 threshold when you're not considered a DBE. 11 In my viewpo int and as I've 12 developed my exit stra tegy for my 20-year plan 13 that started in 2008, was I needed to be a company 14 between 30 and $50 million doing work up and down 15 the East coast at a 10 percent margin before 16 taxes so I can have enough money that any problem 17 of being a DBE no matter what class you are, 18 whether you're a woman, black, Hispanic, Asian 19 or whatever, that racism that we face, you've 20 mitigated it by being wealthy. 21 That's what I al ways thought the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 80

program was about. That 's my viewpoint, but I 1 am in no way saying th at anybody should be 2 removed just because they 've gotten to a magical 3 number. I'm just saying you have to have an exit 4 strategy. 5 In reference to the annual 6 affidavit, that's actually one of the easiest 7 forms. I actually love filling out that form 8 when it comes in, becaus e, okay, not hing has 9 changed, here's my tax returns and I'm swearing 10 that I haven't cr ossed that cap and I haven't 11 crossed that $20 million and I have - I have no 12 problem with that. 13 I don't think it should be - it 14 should be complicated any more, especially with 15 we've heard - I've heard somebody with 17 DBE 16 certificatio ns. I commend that. 17

I'm working on four right now. I've 18 got four right now and I'm working on three more. 19 I do believe that, you know, if you 20 look at the DBE applicat ion, it's exactly the 21 copy of the 8(a) applicat ion. It's the exact 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 81

same thing. 1 Why can't you take my 8(a) and say, 2 I mean, the SBA al ready vetted m e. The highest 3 entity for small business es, the Smal l Business 4 Administration, vetted me. So, the USDOT says, 5 well, you know, we don 't trust them. That 6 doesn't make sense to me. 7 I'm not saying y ou shouldn't ask for 8 some, okay, we want to ma ke sure you're still in 9 the same office, we want to make sure everything 10 is the same, but, I mean , doesn't the left hand 11 trust the right hand in government? 12 I mean, that's th e problem with big 13 government. We have to - we've got to have some 14 reciprocality. If you have a dri ver's license, 15 my South Carolina driver 's license still works 16 in Massachusetts, because South Carolina has the 17 same barrier of entry of licenses as 18 Massachusetts does. 19 But really the pr ogram with all the 20 forms and everyt hing, I always saw it as a way 21 to create wealth to sol ve the problems in our 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 82

community. And that's th e one way in America - 1 this is the only countr y you can co me to where 2 you can start off - the first gentleman I worked 3 for at a company that's no longer in existence, 4 Monta Continental, came here from Italy with $50 5 in his pocket and that was it. And he was 6 running a 500 to a billi on dollar construction 7 company in 30 years. 8 There's nowhere else on the planet 9 that happens but here. But if he had any 10 discrimination for what ever reason , he didn't 11 have any when he was doin g 500 millio n a year. 12 And if he had any, it was completely 13 insignificant. 14 That's the point we're trying to get 15 to as DBEs. I call it being - the Michael Jordan 16 of being a constr uction company. 17 Yeah, he's an African American. 18 He's a black man. He goe s in the store, he gets 19 followed. He gets follow ed by the police, but 20 he's Michael Jordan. 21 He's got so much money it doesn't 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 83

make - it almost doesn't make a difference, 1 because he can choose to li ve where he wants, he 2 can choose to send his ki ds to school s and that 3 always, to me, was the purpose of being in 4 business to create wealt h, to change your - your 5 lives of your family, to change the lives of the 6 people close around you, your employees and let 7 it trickle down and pe rcolate through the 8 economy. Thank you. 9 MS. VACCAREL LA: Thank you. 10 Sharon Arnold. Sharon Arnold is 11 not here. To ya Ester. 12 MS. ESTER: Good afternoon. Thank 13 you for letting us come sp eak in front of you. 14 My name is Toya Es ter. I'm from Ha milton, Ohio. 15 I'm the owner and pres ident of J&B Steel 16 Erectors. We're a spec ialty subcontractor. 17 Work for GCs on bridges, thank God, because we've 18 worked in the private fie ld for prior years and 19 went out of business seve ral times, came back, 20 and today been certified for actually 10 years. 21 It hasn't been an easy road, but we 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 84

employ 80 full-time ironwor kers. We are union. 1 So, it is a very costly business to stay in 2 business. 3 I'd like to give you an idea of some 4 of the paperwork that we go through just to stay 5 in business and keep our eight employees in our 6 office keeping the paperw ork flowing. And to 7 add to this paperwork is just part of the 8 frustration that we fi nd trying to stay in 9 business we have to go through. 10 With the staff of eight people in our 11 office, we are required to handle all the 12 paperwork requeste d from our general 13 contracting clients an d all the government 14 entities per federal, state, county, city and 15 township requirements. 16 Some of this pa perwork includes 17 Workmen's Compensation, payroll, certified 18 payroll reports, union dues, child support, wage 19 garnishment, employee fi les, unemployment, 20 taxes, state, co unty, city, qu arterly, 941s, 21 940s, estimated, yearly year-end taxes, monthly 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 85

EEO utilization repor ts, plans, specs, 1 contracts, drug testing compliance, prevailing 2 wage report for state and federal, BWC program 3 reporting, indust ry-specific safety program, 4 transitional workplac e program, wellness 5 program, drug-free workplace reporting, 6 apprenticeship reportin g, certification of 7 employee skill sets, quar terly Bureau of Motor 8 Vehicle reports on employees. 9 If they drive yo ur trucks, you've 10 got to run that every quar ter just to make sure 11 they don't have a bad dr iving record, because 12 they sure won't tell you. 13 So, we invest over $150,000 a year 14 in training our men. Our men go through a 15 four-year apprenti ceship. When th ey come out, 16 they're consider ed a journeyman ironworker. 17 You pull them out of the hall, well, 18 they might know how to place some steel, but they 19 don't know much how to treat people or do 20 business. 21 So, we bring them in, we trai n them. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 86

We try to involve the me n to what we call a 1 foreman where th ey can run a j ob, two or three 2 men underneath them. 3 Then also raise them on up to a truck 4 foreman, and th en go on to a general foreman 5 where they can possib ly run five to 10 men 6 underneath them. 7 The bridgework today is scattered so 8 much that we have to co ver a range of 15,000 9 square miles. We are certified in Ohio, 10 Kentucky, Indian a and Illinois. 11 I just had our assistant contact 12 Ohio, because I sent in my affidavit in February. 13 Still haven't heard from them. My document 14 expired last March. They said they 're going to 15 get back - they'll get to it next January and 16 they'll let us, you know, they'l l get to us. 17 So, the task of us getting the 18 paperwork to our folks to the states is tough. 19 And then turning it arou nd and getting it back 20 to us is becoming more and more difficult, I 21 find. I've had the same problem with Illinois. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 87

Indiana seems to be on top of it. 1 They respond f airly well, but it's never timely. 2 You're always double-che cking on things. It's 3 just always an issue. 4 It's like you have to have one person 5 just keeping an eye on a ll your certif ications, 6 your renewals, your prequal s. Prequal you have 7 to get an audit if you want to do over $500,000 8 of work. And that's a 20 to $23,00 0 investment 9 to have a CPA firm come in and audit your company. 10 And I've done that for th e last 10 years to be 11 able to do over $500,000 of work. 12 Luckily, if you keep your money in 13 your company, you can get a good 14 prequalificati on to be able to bid a 15 decent-sized job an d be able to ha ve bonding and 16 banking and everyt hing else in this industry 17 that goes along with it that you need to stay in 18 business. 19 We just would li ke for you to take 20 into consideration that we work hard and I have 21 80 men who have 80 famili es that I don't want to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 88

see unemployed as th e small busi nessman. 1 That's what can ha ppen when you make 2 these rules too tough, be cause people can only 3 take so much. Than k you for yo ur time. 4 MS. VACCARELLA: Leslie Saunders. 5 MS. SAUNDERS: Le slie Saunders, 6 Tampa, Florida, Leslie Saunders Insurance. 7 It was nice to hear from Bob Ashby 8 who used to be my regu lar penpal for several 9 years whenever there wa s a question on a DBE 10 application or a state asking for something that 11 didn't seem to fo llow the rules. 12 And so, now, Gene Roth and his crew 13 are my permanent penp als for these same 14 questions. 15 Sadly, I won't be here later in the 16 afternoon, because I have a flight back to Tampa 17 for the third part, but to talk about the 18 quantifiable cost benefits, again, I have to 19 give you two examples, on e being the state of 20 Maryland and the other being the state of 21 Washington, for renew al of our documents 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 89

submitting the no -change af fidavit. 1 The state of Mary land insisted that 2 we file as a corp oration. Well, I don't have an 3 office in Maryland. I'm not a corporation in 4 Maryland. I have a nonresident insurance 5 license in Maryland as I do in the 49 other states 6 where I am a nonresid ent-licensed agent. 7 That's my authori ty to do business 8 in that state. I can go into that state and work 9 with any company and pr ovide their insurance. 10 So, that wasn't good enough for 11 Maryland and they said th at I had to file as a 12 corporation. 13 Well, that requires a registered 14 agent filing as a nonre sident corp oration, 15 spending hundre ds of dollars, getting your 16 certificates and then, oh, by the way, there's 17 a property tax form th at has to be filed. 18 So, your CPA has to file that and pay 19 a property tax when I don't have any property in 20 Maryland, because I don't have an office in 21 Maryland and I do n't have a presen ce there other 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 90

than my certific ate, my insuranc e license and 1 now this corporation that I have to deal with. 2 And Washington did the sa me thing an d there are 3 others. 4 Washington required us to file the 5 corporation, which we di d. And then because we 6 didn't generate revenue in Washington , then the 7 state decertified our co rporation, because we 8 didn't have any revenue. 9 And this goes round and round and 10 round and round. And when I talked to Gene about 11 it, I was under the impre ssion that there's not 12 supposed to be a rule like that. 13 If you apply to be certified in that 14 jurisdiction and you don't have any revenue 15 generation at the present time in that 16 jurisdiction, you shouldn't have to do a 17 pay-to-play and fo rm a corporatio n there, which 18 requires a lot of other bureaucracy in addition 19 to the 50 certif ications and re newals. And 20 those are just two examp les. They're not the 21 only ones. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 91

This year Tennes see joyfully sent a 1 letter saying, good news, we've raised the fee 2 to be a DBE in our state. It's now a $ 300 filing 3 fee. 4 Now, I don't know whether that's 5 legal or not legal. I ha ven't had time to call 6 Gene yet to ask, but I will. 7 And I don't unders tand how they can 8 now be adding these additional fe es for services 9 when it's supposed to be a unified 10 certification. 11 So, I go back to my earlier point. 12 Let's have a home stat e, let's have a secure 13 portal, you know. You could do it on a Citrix 14 platform or an AppRiver platform where it would 15 be an encrypted file a nd anyone could get a 16 password who had authori ty and get in and look 17 at that file. 18 Please, let's stop all the paperwork 19 and narrow the program, but overall I want to say 20 you guys do a great job and, you know, I'm happy 21 to be in the program. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 92

I would be happi er if it were less 1 complicated. Thank you. 2 MS. VACCARELLA : Dwayne Sampson. 3 MR. SAMPSON: Good afternoon. 4 Again, my name is Dwayne Sa mpson. As president 5 and CEO for Transportation Diversity Council, or 6 TDC, a national 501(c )(3) not-for-profit 7 organization bas ed in New York City, I welcome 8 the opportunity to discuss aspects of the Notice 9 of Proposed Rulemaking entitled "Disadvantaged 10 Business Enterprise Pr ogram Implementation 11 Modifications" to officials of the U.S. 12 Department of Transporta tion, colleagues and 13 the public today. 14 TDC was formed in 2010 to meet the 15 growing need of leaders, educators, technical 16 professionals and tradeworker s in the 17 transportation and cons truction industries. 18 The subject of my testimony today 19 will cover Topic 2. Th e benefits associated 20 with Topic 2 requiring ce rtified DBEs to submit 21 additional documents with the annual no-change 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 93

affidavit is minimal. 1 Essentially, the only benefit would 2 be in terms of the govern ment agency continuing 3 to prove its comp liance with DB E certification 4 requirements. 5 Additionally, if the government 6 agency suspects that the re is an issue with the 7 DBE certification, the agency has the right that 8 was established duri ng the certification 9 process to request ad ditional documents. 10 Therefore, a ny additional 11 requirements to provide information is of 12 limited value to the requesting agency. 13 I have surveyed a number of my DBE 14 members around t he country and tr ied to attach 15 a cost. And they did pro vide a range to a cost 16 in recertifying in each pr operty at 13 to $1400 17 per application when, in fact, you can use other 18 vehicles that are similar - that provide similar 19 information, bond statements and things of that 20 nature that may be there to provide the necessary 21 documentation. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 94

But as others ha ve said today, which 1 is most critical area to dedicate your 2 resources, if I can respe ctfully indicate, is 3 that the enforcement and compliance of the rules 4 is really critical to reduce fraud. 5 So, again, thank yo u for allowing me 6 to testify here today. Thank you for your 7 service. 8 MS. VACCARELLA: Sarah von der Lippe. 9 MS. VON DER LIPP E: Thank you. It's 10

me again, Sarah von der Lippe. I'm the owner and 11 sole employee of the law offices of Sa rah C. von 12 der Lippe. 13 Let me say what I should have said 14 up front lest any of my clients here today are 15 nervous. I'm speaking for myself today only and 16 not for any current, former or future clients. 17 So, this is Sarah' s views on things. 18 I'm going to be the big-picture girl 19 again if I can. It is clear to me in reading 20 these regs, I can see it in every word that's 21 written, that the intent was not only honorable, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 95

but important. 1 That is to say that good men and 2 women in this departme nt are concerned about 3 ensuring that the bene fits of this program are 4 allocated or available to those who need them the 5 most. They wanted to make sure that we reduce 6 fraud in the program, right? 7 As a civil rights lawyer, as a race 8 discrimination lawyer, I can tell you there is 9 nobody who hates fraud , hates fronts, hates 10 fraudulent DBEs more than honest DBEs. There's 11 no doubt about it. 12 It's the scourge over the program to 13 the extent it exists and we need to do something 14 about it. 15 The only question is on who should 16 the burden fall in order to accomplish the act 17 of getting the fraudste rs out of the program? 18 And my concern is when I read the 19 rule and look at the massive amounts of 20 additional inform ation that we're going to be 21 asking for from DBEs, it seems to me that a very 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 96

fundamental questi on wasn't aske d and answered, 1 which is do we really think that by asking every 2 DBE in the country to give us more paperwork, 3 that those people w ho have been lying and 4 cheating their way t hrough this program all 5 along are sudden ly going to go , oh, maybe I 6 should give them the r ight informatio n? Maybe 7 I should submit a PNW that really says what my 8 income is and says wh at my assets are. 9 Where did that - was that question 10 ever asked? And if not, could we ask it now? 11 Because the real concern - the reality is, and 12 everybody sitting up at this table knows this, 13 you have the authority un der the current rules, 14 read 26.67, you all know this, you have the 15 authority to ask for every single one of the 16 pieces of paper and more that you've put - that 17 you've added to this rule. 18 You can ask for it during the 19 process. Every recipient in the country can ask 20 for it during the process. 21 The question is, are we really going 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 97

to ask for it from every honest DBE out there with 1 somehow the sense that that's going to make 2 people who are criminals suddenly decide to tell 3 the truth? 4 I think it's a le gitimate question 5 and one that we have to co nsider really, really 6 carefully. 7 Now, I'm not being glib. I want to 8 say that I understand that DOT especially is in 9 a complicated posi tion here, beca use you're not 10 the front line on decertificat ion procedures. 11 And I understand that one of the 12 things that happen s is that really important 13 decertification procedu res are brought in the 14 field at the recipient le vel and they don't ask 15 for the right information. 16 Even though they have the authority 17 to ask for the right information under the rules, 18 they don't. And by the time the appeal gets to 19 you, you can't necessaril y make the decisions 20 that you want to make. 21 The answer to tha t problem is not to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 98

ask that every DBE in the country submit phone 1 books of information. 2 The answer to that question, 3 unfortunately, is go od old-fashion ed training 4 and guidance. 5 You all know yo u have extraordinary 6 people in this building. And you know in each 7 of the modes, in the Gene ral Counsel's Office, 8 I mean, one of the things that's most important 9 about this program, and I think we all know this, 10 is that this program spans the De partment. 11 And I know we're not talking about 12 the IG report, but the wo rst thing ab out the IG 13 report was that it someh ow suggested we should 14 silo this program. We should not. 15 What's great abo ut this program is 16 it exists in every sin gle department, every 17 single faction of this department, and that's 18 the only way that good, affirmative action in 19 civil rights programs work. 20 There is someo ne responsible for 21 this program in this bu ilding, and it's the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 99

Secretary of Tr ansportation, and that's who 1 should be responsibl e for the program. 2 Likewise, when we look at these 3 pieces, when we figure out how to do this, we need 4 the good men a nd women that you have in this 5 building to help the r ecipients to provide the 6 training, to provide the wealth of your 7 experience to th em so that they can understand 8 how to better do complian ce and how to better do 9 fraud investigations. 10 How to go out th ere and actually 11 follow up on the whispe rs that exist in every 12 community around the cou ntry. Thank you very 13 much. 14 MS. VACCARELLA : Jerry Hanner. 15 MR. HANNER: My name is Jerry Hanner. 16 I'm with the - I'm from Chattanooga, Tennessee 17 with JM Hanner Cons truction Company. 18 You know, when I think about this 19 subject matter he re, I have to de al with it from 20 the standpoint that I've been involved with the 21 program for a while and I've seen a lot of things. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 100

I know the intent of the paperwork 1 just as it was so well-sp oken before, that came 2 up about trying to sift through and make sure 3 that we have the right people involved in the 4 program. 5 I don't think pape rwork will do it. 6 I say that, be cause, like I sa id, I've been 7 involved quite a while an d we've run into a lot 8 of situations in Tennessee like right now we have 9 78 percent to 80 percent of all the work goes to 10 non-DBEs. And most of th em at 70 percent go to 11 white women. Blacks get only about 1.7 percent 12 of the work. 13 Well, I'm saying this because there 14 was always indication th at somethin g was wrong 15 with a lot of the o nes that was getting work. 16 And we took it upon ou rselves at different times 17 to drive around just to lo ok and see some of the 18 sites. 19 It's interesting when you drive up 20 on a site as s omeone who's been certified as a 21 DBE and you've got a bi g sign with their 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 101

husband's name in construction, and a little 1 sign on the corner with the wife in construction, 2 and they are one of the leading DBEs. 3 So, my thing is it won't be paperwork 4 to change it. I'm totally in agreement with 5 what was just said, be cause, you know, the 6 numbers can always be shifted any way people want 7 them to be shifted, but what we do need is we need 8

some hard core people on the front line that will 9 actually go o ut and visit thes e sites and look 10 at it and be true to what they find. 11 We have - most of the time it's 12 interesting, because we have about out of all the 13 people that's ce rtified, about 15 - 12 to 15 14 companies that gets th e work all the time. 15 We need to be st ructured. And 16 paperwork, just getting and filling out more 17 paperwork won' t change it. 18 We definitely ne ed some training 19 programs. I was thinki ng about on the other 20 topic, you know, when it comes to the payment, 21 it's interesting how the DBEs are asked to carry 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 102

the payrolls longer than the prime co ntractors. 1 We have some issu es that definitely 2 need to be addressed that would change the 3 program and make it bette r, and just adding more 4 paperwork wo n't do it. 5 Now, the paperwork, I understand why 6 you want to do it, but I guarantee you that that 7 won't change. 8 The people that's going to do what 9 they're going to do, they're going to do it, but 10 it's something how we can actually - we visited 11 several sites. We just rode around and looked 12 at them and the pi cture was unreal. 13 So, somewhere ther e is a void there 14 with the people that have the responsi bility of 15 making sure these people truly should be on the 16 program, is dropping the ball there. That's all 17 I got to say. 18 MS. VACCAREL LA: Frank Cara. 19 (No response.) 20 MS. VACCAREL LA: Frank Cara. 21 (No response.) 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 103

MS. VACCARELLA : Sharon Maxwell. 1 (No response.) 2 MS. VACCARELLA: Nicholle O'Malley. 3 (No response.) 4 MS. VACCARELLA: All right. That's 5 it for the speakers formal ly for Topic Number 2. 6 It's now complete. We'll move into the 7 comment/rebuttal period. 8 The chat room is now open. It will 9 be open for 15 minutes as long as this comment 10 period exists. 11 For chat room pa rticipants, please 12 remember all co mments should start with your 13

name, organization and topic reference Number 2. 14 Also, if you are responding to a 15 commenter in the sessi on room here, please note 16 that on your comment, also. 17 We are collecting the cards, please. 18 The first speake r will be Marc ela Alcantar. 19 MS. ALCANTAR: Yes, Marcela Alcantar 20 with the Diversified Bu ilders and Engineers 21 Council, and Alcant ar and Associates. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 104

MS. VACCAREL LA: Thank you. 1 MS. ALCANTAR: I ha ve to say that the 2 cost of not reviewing tho se documents that you 3 submit, it's the ex clusion of the rest of them 4 - I know it is like it h as happened in Oregon - 5 it is mind-boggling to me to thi nk that if there 6 is a DBE with 17 state certification or $27 7 million in payroll, that that would be a barrier. 8 I will be lucky if I make a million 9 in one year, and I have to compete with those DBEs 10 that they have 16 certifications and $27 million 11 in payroll. 12 So, indeed, if I have to submit the 13 same paperwork that th ose individuals - I'm 14 speechless. But now t he other side of that, 15 does it mean that those prime DBEs or large DBEs, 16 they need to be out of the program? Not 17 necessarily, but there has to be a difference 18 between a large DBE and a small DBE. It's night 19 and day. 20 Having one lar ge DBE submitting 21 those papers and also to be kicked out of the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 105

whole program because one DBE fulfilled the 1 requirement - ag ain, like can ha ppen in Oregon. 2 One Hispanic happened to be successful, not even 3 the NAICS code achievement is half of it, and the 4 entire community is out. I don't get it. Thank 5 you. 6 MS. VACCARELLA : Joann Payne. 7 MS. PAYNE: Joann Payne, Women First. 8 There is a written statem ent, I think, maybe in 9 the rules and there's a perception that Congress 10 has said something about where the goals of the 11 DBE program is to basically grow the DBE company 12 out of the program so they can sustain without 13 the program. 14 I submit a question. And the 15 question would b e, how can a DBE subcontracting 16 highway constructi on company - this is what I'm 17 talking about here. We 're not talking about 18 some of the other companies that are a part of 19 the DBE program. How can they lose their 20 certification and stay in business? 21 If you look at th e statistics on the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 106

state level, let's say, all right, you grow your 1 company, you're out of th e DBE program, well, 2 first of all, within tw o years you ca n lose, as 3 I said, 50 percent or mo re of your federally 4 highway constr uction work. 5 Then let's go lo ok at the state. 6 See what other area, let's do the states. In the 7 states, all you have to do is go on the internet. 8 Statistically ab out one perce nt of highway 9 construction work goes to women-owned 10 businesses on the state level. One percent. 11 All right. And if you look at the 12 commercial nationwide, it should be zero. It's 13 less than on e percent. 14 So, here you have the other two 15 markets. Highway co nstruction that you 16 potentially could, in fac t, grow and work into 17 and obviously th e percentages ar e so low it's 18 almost impossible, whi ch goes down to the point 19 of discrimination. 20 And that's what this is really all 21 about. The intent of th e program is to try to 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 107

minimize or to eliminate discriminati on in the 1 highway construc tion industry. 2 And the other th ing I wanted to just 3 sort of say is the ge ntleman talked about 4 Tennessee and about white women and about 5 husband and those kinds of things. 6 As Sarah said, nobody who 7 participates in this prog ram wants a front and 8 a fraud to exist. And it goes back to what I've 9 said that on the state level, for whatever 10 reasons, they're just not doing th eir job. 11 That is the job of the recipient to 12 make sure that you don't certify companies that 13 do not belong in the program. Thank you. 14 MS. VACCAREL LA: Thank you. 15 Renee Banks. 16 MS. BANKS: Yes, my name is Renee 17 Banks and my company is G.W. Peoples Contracting 18 and we build railroads. 19 And a couple things I wanted to say. 20 We are certifie d in 35 different jurisdictions 21 as a DBE. And we have found that the variety of 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 108

requirements diff er from one agen cy to another. 1 One agency could require a good deal 2 of information, everything fr om certified 3 payrolls to my son's birth certificate or 4 whatever, and another age ncy will put just - be 5 working with us and understand our difficulties 6 and understand that there's been no change. So, 7 we need some kind of unified sy stem here. 8 But I did want to address something 9 else, and it h as to do with DBE status and 10 disadvantaged status. It has not - it's just 11 not based on financial disadvantaged status. 12 It has to do with social. 13 And it's not just because once you 14 achieve or financial disa dvantage is gone, that 15 doesn't mean that social, racial or gender 16 disadvantage is gone as well. 17 Racial - racism di dn't end with Rosa 18 Parks and we have to be vigilant. And that's all 19 I've got to say. And I'll be speaking later this 20 afternoon. 21 MS. VACCARELLA: Brad Hubbert. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 109

MR. HUBBERT: Thank you, Madam Chair. 1 And I apologize for not introducing myself at the 2 last speaking opportunity. 3 My name is Brad Hubb ert. I'm not a 4 small business owner. I spent 23 ye ars on the 5 Board of Transportation for the De partment of 6 Georgia. And I' ve been working advocately to 7 try to help and make sure that the DBE program, 8 the MBE program achieve the objec tives that I 9 understand that it was designed for, and that was 10 to eliminate di scrimination. 11 Specifically started with minority 12 and women's, and n ow we've added the 13 disadvantaged busi ness enterprise. 14 Disadvantaged being social and economic. 15 One comment I wo uld like to make is 16 that it appears that when I was on the Board of 17 Transportation, that we - and we still do spend 18 a lot of time doing cer tification . And I 19 understand the need for that, okay. 20 But past cert ification, in my 21 experience, is that there is no real serious 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 110

monitoring of their proce ss once that firm has 1 been certified and are do ing work. There's no 2 real monitoring. So, we need to make sure that 3 in the process that we are monitoring. 4 So, what happened in a lot of cases 5 and when you had fraud, is that there is no 6 monitoring or lackadaisi cal monitorin g in it. 7 So, the company has alrea dy reaped its benefit 8 before he is - before he or she is identified as 9 a perpetrator of fraud. 10 So, if we can do a better job of 11 monitoring, we'll have it all. And it's hard 12 for an agency to do moni toring when all the 13 energy and resource is spent on certification. 14 MS. VACCARELLA : Meg Rietschlin. 15 MS. RIETSCHLIN: I would just like to 16 comment someone earlier in the first session 17 mentioned something abo ut the ment or/protégé 18 program. 19 And after I became a DBE, I was 20 offered the opportunity to participa te in the 21 mentor/protégé program. And I accepted the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 111

challenge. I am halfway through. 1 I have had - a lot of problems with 2 small businesses is they don't have the business 3 practices. They 're competing ag ainst people 4 who have staffs that are extremely 5 sophisticated. And to be able to pull 6 information and pull experience from a mentor is 7 extremely important and it would be nice if 8 everyone had that opportunity. 9 MS. VACCARELLA : Thank you. Ram 10 Tirumala. 11 MR. TIRUMALA: Hi. I am Ram Tirumala 12 from Distinct Engineering Solutions based in New 13 Jersey. 14 We are certified as DBE in four other 15 states. And the point I ju st wanted to make is 16 every state is asking different do cuments. 17 I can understand they want to ensure 18 that the continuity of DBEs meeting the goals and 19 they are not graduate d from, they are not 20 submitting fraudulent documents, but my 21 concerns are two things. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 112

In this day and age of identity theft 1 when I am submitting a lot of docu ments, I am 2 afraid where some of t his personal information 3 that we are providing co uld get in the wrong 4 hands. That's one. 5 And, again, I am just agreeing with 6 a few other speakers whe re if the crooks really 7 want to falsify document s, they always do. 8 People who are honest ar e the ones who are asked 9 to do more work and it's a burden. 10 Now, if there is a uniform way of 11 recertification, annu al no-change affidavit 12 documentation, it would help in decreasing the 13 time period. And also there are ways and means 14 to cross-verif y the truth of the documents 15 everyday. Thank you. 16 MS. VACCARELLA: Do we have any more 17 cards? 18 (No response.) 19 MS. VACCARELLA: So, we're going to 20 leave the chat room open for another five minutes 21 so that people online wi ll have an opportunity 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 113

to submit comments. 1 (Speaking off mic.) 2 MR. HUBBERT: Can one of the 3 recommendations be to see if and - if the program 4 could incorporate a - si nce it's a federal DBE 5 program, could we have federal regula tions that 6 cover all 50 states? Is that possible? 7 MS. VACCARELLA: Okay. I noticed in 8 the interim that we would place two panel members 9 with the two people that - or at least one - two. 10 So, can you stand up and just tell people who you 11 - identify yourself. 12 MS. McWHORTER: Hi. Nichole 13 McWhorter. I'm with Fede ral Highway, Office of 14 Civil Rights. 15 MR. BARHAM: And Wilbur Barham also 16 with the Federal Avia tion Administration, 17 Office of Civil Rights. 18 MS. VACCARELLA: Thank you. Okay. 19 Do you want to take a br eak now? We'll keep the 20 chat room open for anothe r five minutes, but 21 we'll start the - we were going to do another 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 114

break before we start into the last section. 1 So, why don't we incorporate the 2 break right now for - you want a 30-minute break? 3 Okay. We'll do a 30-min ute break at this point 4 right here. 5 (Whereupon, the proceedings went 6 off the record at 1:11 p.m. for a brief recess 7 and went back on the record at 1:43 p.m.) 8

A-F-T-E-R-N- O-O-N S- E-S-S-I-O-N 9 1:43 p.m. 10 MS. VACCARELLA: Okay. We're going 11 to get started and honor the people that were 12 here on time. We're about to start the third 13 topic. Third an d last topic of the day. 14 What are the spec ific quantifiable 15 costs and benefi ts associated with requiring 16 good faith efforts docu mentation wh en bids are 17 due and requiring addi tional documen ts, i.e., 18 DBE and non-DBE quotes, DBE subcontr acts from 19 the perspective of a pri me contractor, a DBE and 20 the recipient lett ing the contract. 21 I'm going to r emind people to step 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 115

up close to the microp hone and please talk 1 loudly, because we have about between 300 and 500 2 people listening on the web and they have said 3 in the last two topics it's very difficult to 4 hear. 5 So, I'm going to just ask you again 6 to try to speak a little bit louder. Make sure 7 that you're up clos e to the microphone. 8 First speaker he re under Topic 3, 9 Earl H. Jenkins. 10 DR. JENKINS: Good afternoon, again. 11 I'm Earl Jenkins and I am here once again on 12 behalf of Gregory Jenife r, president and CEO 13 with Armand Reso urce Group, Inco rporated who 14 could not be present due to a scheduling 15 conflict. 16 However, agai n, he sends his 17 apologies and requests that I present his 18 prepared remarks this afternoon. 19 When a recipient establishes a 20 contract goal on a D OT-assisted contract, a 21 bidder must in order to be responsive, make good 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 116

faith efforts to meet the goal. 1 The first premi se of a bidder's 2 ability to meet a goal or to determine good faith 3 efforts, is that the es tablished DBE goal is 4 reasonable, realis tic, practical and 5 obtainable. 6 The second premise is that the 7 recipient has identified ready, willing and able 8 DBE firms to particip ate on the project. 9 The bidder will not be performing a 10 hundred percent of the project contract of his 11 own workforce. 12 Recipients have been cautioned 13 against requirin g that a bidder meet a contract 14 goal, i.e., obta in a specific amount of DBE 15 participation in order to be awarded a contract 16 even though the bidder has made adequate good 17 faith efforts and pr esented satisfactory 18 documentation of the same. 19 The bidder or pr oposer can comply 20 with good faith effor ts, documentation 21 requirement in eith er of two ways. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 117

First, the bidder or proposer can 1 meet the goal documenting commitments to the DBE 2 firm sufficient for this purpose. If the goal 3 is attained, then there is no need to submit good 4 faith efforts do cumentation. 5 Second, if the bi dder does not meet 6 the goal, then the bidder must also demonstrate 7 that they made adequate good faith efforts by 8 submitting satisfactory documentation with 9 their bid. If so, then th ey should be awarded 10 the contract. 11 This means that th e bidder must show 12 that it took all necessary and reasonable steps 13 to achieve the assi gned DBE goal by 14 demonstrating through it s efforts, or, stated 15 differently, a review of the sc ope, intensity 16 and appropriatenes s of the efforts. 17 The bidder could reasonably have 18 been expected to obtain a sufficient amount of 19 DBE participation even if the good faith efforts 20 were not successful. 21 Requiring the bi dder to document 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 118

their good faith efforts at a time of the bid 1 submission prevents bi dders from shopping 2 bids/quotes from DBEs. 3 The greater of the time frame 4 provided to provide, su bmit or - I'm sorry - 5 documentation of good faith efforts increases 6 the probability of bid shopping and requiring 7 DBEs reduce their bids. 8 In the rare in stance where a 9 submission process is delayed longer than at the 10 time of the submission date, an alternate 11 project delivery meth od should be the 12 procurement meth od and the project should be a 13 multi-year me ga project. 14 In those instances, there should 15 also be other commitments in place that require 16 the bidder to comply with the DBE goal, its 17 compliance with the good faith efforts 18 documentatio n process. 19 Under traditional bid processes, 20 the bidder should know t he details of its cost 21 projections and how it got to its bottom line. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 119

Requiring non-DBE quotes provides 1 the bidder with the ability to substa ntiate its 2 selection process concu rrently ac cess non-DBE 3 quotes provide recipients with the necessary 4 data to validate the reason why a DBE bid or quote 5 was deemed excessive. 6 It also validates that the DBE and 7 non-DBE were bidding on the same scope of work. 8 Additionally, bid dates when 9 coupled with other docume ntation can be used to 10 show practices used by the prime to shop the bid 11 of the DBE. 12 Access to su ch information by 13 recipient is critical to good faith effort 14 evaluation processes. 15 Subcontracts for DBEs should not be 16 required at the time of bid. However, a Letter 17 of Intent, which is execu ted by both the DBE and 18 the prime, should be submitted with the bid 19 submission. 20 The Letter of Intent coupled with 21 the schedule of DBE pa rticipation is a best 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 120

practice to obtaining the next best commitment 1 because of the new termination removal 2 provisions. 3 The selected bidder should be 4 required to submit executed DBE subcontracts and 5 purchase orders within a specifi ed time frame 6 after the contract is awarded. 7 The executed subc ontract agreement 8 is critical to the re cipient's oversight 9 compliance monito ring process. 10 Access to su bcontract ag reement 11 allows the recipient to verify prompt payment 12 provisions, release of retention, flow-down to 13 nondiscrimination clause s, disclosing proper 14 use of termination and convenience provisions 15 sets forth the dispute resolutions process, 16 etcetera. 17 Under no circumst ances should a DBE 18 work on a contract without an executed 19 subcontract agreement. 20 There are costs associated with 21 bidding for both the prime and su bcontractor, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 121

including the DBE subco ntractor. Thank you 1 very much for your kind attention. 2 MS. VACCARELLA: Rich Juliano. 3 MR. JULIANO: Thank you. My name is 4 Rich Juliano, se nior vice presid ent with the 5 American Road and Transportati on Builders 6 Association kn own as ARTBA. 7 Our membership ranks include more 8 than 3300 construction firms of al l sizes and 9 ownership types. 10 These include prime contractors, 11 subcontractors and entities classified as 12 disadvantaged businesses and otherwise. 13 Despite any such distinctions, 14 these companies share a common comm itment to 15 building transportation improvement projects as 16 safely and ef ficiently as possible using 17 innovation to meet or exceed the expectations of 18 project donors and the public. 19 ARTBA and its mem bers recognize the 20 goals of the federal DBE program and the need to 21 encourage the participati on and utilization of 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 122

disadvantaged businesses on federal aid 1 transportation cons truction projects. 2 At the same time, the program 3 represents a very challenging area of compliance 4 for all types of contractors. 5 During last year 's comment period, 6

ARTBA and dozens of our chapters and member firms 7 made submissions addressi ng primary areas of 8 concern about many of the 30 or so proposed 9 changes in the NPRM. 10 Today we are join ed once again both 11 in this room and remotely by many chapters and 12 members who are extremely troubled by some of the 13 revisions bein g discussed. 14 Let me note th at not every ARTBA 15 member holds the same opinion about every aspect 16 of the NPRM, but there is general co ncern about 17 the prescriptive nature of the NPRM's approach. 18 This is especi ally true with the 19 third subject area for today's session. We 20 think these changes will undermine successful 21 DBE programs in certa in states and exacerbate 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 123

existing problems in others. 1 In contrast purs uant to the Adarand 2 case, the Department to this very day has touted 3 its narrow tailoring of the DBE rule and the 4 flexibility it p rovides to recipient 5 transportation agencies. 6 So, the policy reversals proposed in 7 some aspects of this NPRM are puzzling, to say 8 the least, as they were not direct ed by Congress 9 or the courts. 10 You asked us to present specific 11 quantifiable costs and be nefits associated with 12 these proposed changes. And accordingly, ARTBA 13 undertook a national su rvey of its contractor 14 members and we were join ed by the Associated 15 General Contractors of America to ensure maximum 16 participation. And we received nearly 300 17 responses, which is a very signif icant sample 18 size. 19 We will present de tailed results in 20 our written comment s later this month. But for 21 today, here are some highlights. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 124

85 percent of the firms in the survey 1 were prime contractors. The reset being 2 subcontractors. An d 11 percent of the 3 respondents were certif ied as DBEs, both prime 4 and subcontracto rs among them. 5 I will put specia l emphasis on the 6 smaller firms in the su rvey. In fact, 38 7 percent of respondents told us their average 8 federal aid project is less than $5 million. 9 And a total of 64 percent said it was $10 million 10 or less. 11 Looking at the proposed mandates 12 requiring submission of DBE information and good 13 faith effort document ation at bi d time, 91 14 percent of our prime co ntractor respondents 15 anticipated this would re sult in vary ing levels 16 of increased cost per bi d reflecting factors 17 such as added staff, estima ting time, risk, DBE 18 outreach and vett ing and the like. 19 The NPRM proposes enhanced 20 requirements for prime co ntractors se eking good 21 faith effort waivers. 97 percent of those 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 125

responding anticipated added associated costs 1 of varying levels for their bids. 2 The Department proposes increased 3 good faith effort documentation and 4 requirements for prime contractors seeking to 5 replace a nonperform ing or defunct DBE 6 subcontractor. 7 Additionally, the NPRM outlines 8 severe sanction s to which the prime would be 9 subject if it is de emed not to comply. 10 98 percent expect extra costs 11 relating to thes e mandates, includ ing more than 12 15 percent who expect those costs to exceed 13 $100,000 per project. 14 Finally, we asked the respondents to 15 envision the im plementation of all these 16 proposed changes and wh ether they would bid 17 more, less or about the same amount of federal 18 aid work. 19 42 percent of all contractors 20 expected to bid less su ch work, in cluding 56 21 percent of the smaller primes. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 126

This should be troubling to all of 1 us, including th e Department, wh o are concerned 2 about preserving competit ion and the viability 3 of smaller contractors. 4 As you can see, even though funding 5 is limited, our industry members are clearly 6 telling us these mandates would add significant 7 costs to projects ulti mately to the detriment of 8 the taxpayers. And as I mentioned, we'll 9 present more details in our written comments. 10 The industry is comprised of people 11 who are building projects that have a profound 12 effect on the nation's economy and quality of 13 life. 14 Whether it is today or in the coming 15 weeks as you review the written dock et, please 16 listen to them . Thank you. 17 MS. VACCARELLA: Thank you. Robert 18 Ashby. 19 MR. ASHBY: Far fr om being a reversal 20 of longstanding policy, the proposal in the NPRM 21 is a reiteration and clarification, a reemphasis 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 127

of something that has always been part of the DBE 1 program. 2 If you are subm itting a bid in a 3 responsiveness IFB kind of situation as distinct 4 from a negotiated procurement, then from the 5 inception of the rule you've be en required to 6 submit DBE compliance in formation whet her it be 7 good faith efforts, wh ether it be actual DBE 8 participation. 9

I think we all became aware that some 10 states were getting a litt le sloppy in terms of 11 enforcing that requiremen t that there were days 12

or weeks permitted beyond bid opening before the 13 information would have to be submitt ed with the 14 obvious consequences, an earlier speaker 15 mentioned, of bid shoppi ng to the detriment of 16 DBEs. 17 Many prime contractors, and I'm sure 18 we'll hear from more of them today, objected to 19 this requirement. In fact, it was a very 20 well-orchestrated and mu ch xeroxed submission 21 of comments to the dock et along those lines. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 128

And the thrust of many of those 1 comments was that it wa s simply too difficult to 2 submit that information in a timely way given the 3 short fuse and t he chaos and the complexity of 4 the bidding process. So, think about that for 5 a minute. 6 What do you have to do to submit a 7 rational bid? You need to think ab out a whole 8 bunch of things. You need to think about price. 9 You need to think ab out materials and 10 quantities. You need to think about scope of 11 work. You need to think about material, 12 personnel and equipment. You need to think 13 about timetables. You' ve got to do all this 14 stuff to submit a rational bid. 15 So, is it credible to say that, well, 16 we can't also think about DBEs at the same time? 17 Are we so dazed and co nfused that that's the 18 piece that falls out beca use that's somehow not 19 part of the real business of co ntracting? I 20 don't believe th at's a credible argument. 21 I think the thrus t of many of the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 129

comments at least impl icitly, is, in fact, to 1 preserve the opportun ity for bid shopping, 2 which, admittedly, can save costs for prime 3 contractors, but, agai n, think for a second. 4 If you're a prim e contract or, how 5 would you like it if th e state got your bids on 6 bid day and opened them all and shared them among 7 all your competitors for the prime contract and 8 negotiated back and fo rth among you and your 9 other prime contractors to see if they could 10 lower the prices that were submitted in the bids? 11 Is that an acceptab le way of running 12 a bid system? I mean, I don't think anybody 13 would say so. So, why ar e we going to support 14 a system for DBE subcontr acts that would have a 15 parallel kind of effect? 16 I mean, I just don't think that 17 that's good policy. And I think it's important, 18 you know, we can talk about details about exactly 19 what documentation n eeds to be submitted. 20 About in the case of the apparent low bidder, 21 could they have a brief wi ndow of time to submit 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 130

documentation reflecting what has already been 1 in concrete? Yeah, mayb e, but the notion that 2 one should have lengthy periods of time to bid 3 shop, I think, is contra ry to the whole purpose 4 of the DBE program. 5 This kind of relates to a more 6 general theme that, you know, I hear being sung 7 from time to time that folks say the DBE program 8 should more closely mirror the, quot e, normal 9 way of doing business in the industry. 10 As disparity st udy after disparity 11 study has shown, the effe cts of discrimination, 12 that's what we're talki ng about in the DBE 13 program, after all, ar e deeply embedded in the 14 normal way the industry works. 15 That's why we have a DBE program to 16 cause actors in the indus try to act differently 17 from the way they normal ly would in a way that 18 helps overcome the effe cts of discrimination. 19 So, remember that we're not simply 20 talking about merely an administrative 21 requirement or proposal to clarify and reiterate 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 131

an existing admin istrative require ment here. 1 We're talking about somet hing that goes to the 2 fundamental purpose of t he program, which is to 3 combat the effects of discriminat ion and not let 4 them have free reign. 5 MS. VACCARELLA : Thank you. Meg 6 Rietschlin. 7 MS. RIETSCHLIN: Hi. I'm Meg 8 Rietschlin. Rietsc hlin Construction. 9 Ohio Department of Transportation, 10 or ODOT, has bid lettings approx imately every 11 other week. The Bids are su bmitted 12 electronically by 10:00 a.m. on Thursday morning 13 of the letting week. 14 In many lettings , there may be one 15 or two or three projects that my company would 16 be interested in bidding. 17 Downloading plans, specs, taking a 18 drive to physically look at the job takes place 19 two weeks before bidding. Take off may being 20 this week as well. 21 In most cases, we receive pricing 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 132

from suppliers and subcon tractors on Wednesday 1 of letting week, which is the day before the bids 2 are due. 3 The prices arrive by fax and email. 4 Some pricing doesn't re ach our desk until the 5 evening before the bid opening. Some suppliers 6 change their pricing ri ght up to the minutes 7 before the letting submission closes. 8 When the estimate is completed, a 9 field manager or myse lf review the bid, the 10 project pricing, and di scuss any concerns or 11 issues that would alter the pricing. 12 At times, after all the work to 13 prepare the estimate, the decision will be made 14 to not bid a job at all. 15 In any case, the decision to bid or 16 not is made between 6:00 a.m. and 9:30 a.m. on 17 the day of the letting and this is the process 18 for our projects. 19 It is important to note that 20 everyone in this process has the right to change 21 pricing, to bid or not to bid. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 133

We also have the right to withdraw 1 a bid after the letting when we see that we have 2 made a substantial error. 3 One of my most challenging obstacles 4 to overcome has been ge tting prequalified to 5 perform work. The sec ond challenge has been to 6 increase the prequa lification limit. 7 Once I have reached the 8 prequalification limit of contracts on hand or 9 in process, I cannot cont inue to add work until 10 the limit is worked off. 11 Whether I bid as a prime or should 12 I bid as a sub, my constr aints are the same. I 13 am going to attempt to pick the project that 14 yields the most work for my employees and 15 utilizes the eq uipment that I have. Those 16 decisions are going to be made with each job and 17 each letting. 18 Doing last-m inute pa perwork 19 submission as a prime or a sub is going to add 20 more cost to my process. 21 If my revenues and profits don't 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 134

increase to cover the cost of extra submissions, 1 then the bottom line suffers and so will my 2 prequalification . Thank you. 3 MS. VACCARELLA : William Miller. 4 MR. MILLER: Good afternoon. Thank 5 you for the platfo rm today. My name is William 6 E. Miller, III. I wo rk for Dragados USA. 7 My comments about Topic Number 3 are 8 from the perspective of a prime contractor. 9 Dragados USA performs work in a 10 heavy civil in frastructure ma rket all across 11 North America and us ually as the prime 12 contractor. We are currently completing the 13 first P3 projec t in the U.S. 14 Overall, the proposed changes to the 15 DBE regulations may not achieve the objective of 16 creating viable commercial businesses that can 17 sustain outside the artificial market created by 18 the DBE program or which will result in the DBE 19 engagement in particip ation on pu blic funding 20 projects. 21 Instead, the regulations as 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 135

submitted should be imp lemented to focus on 1 capacity building, ac cess to capital and 2 bonding. 3 The current pr oposed regulations 4 are more focused on tradi tional project method 5 and this model is changing. And, therefore, the 6 rules must change as well. 7 The proposed ch anges to the DBE 8 regulations do not ad equately ad dress the 9 alternate concept proje ct's delive ry methods 10 like design build or P 3, which are often large 11 and complex projects. 12 These projects are growing in 13 popularity and as a means of building and funding 14 huge transportation mega projects because of the 15 savings which can be achieved by the 16 alternative, innovative design concepts, faster 17 delivery times. 18 Part of the attr action of these 19 methods is that the desi gning contractor could 20 come up with the design concepts or construction 21 methods that are unique and usually create a 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 136

value for the owner and the hope to outsmart the 1 competition in creating the best value for the 2 owner at the best price. 3 These ideas becom e the engine for 4 the contractor to find a solution for savings and 5 other reasons fo r choosing a particular team. 6 Requiring the submission of DBE 7 commitments and good fa ith efforts with the 8 proposal does not acco unt for how design build 9 and P3 projects are buil t or the chan ges to the 10 design that happen over th e life of the project. 11 Some of the challenges un ique to these delivery 12 methods are as follows. 13 Design is often not finalized until 14 a year or two into the projec t. So, 15 construction does not commence immed iately. 16 And it's very difficult and it's very different 17 from the design and vis ion on Day 1. So, the 18 flexibility will be lost if the re gulations are 19 implemented as is. 20 They may cause discontent in the 21 small contracting community if work is deleted 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 137

or descoped. 1 Savings are realized upon 2 alternative technical concepts which may 3 substantially ch ange the work to be performed. 4 So, by adding or eliminatin g entire 5 scopes of work, including those who may have been 6 already slated for DBE pa rticipation, and then 7 there's the subs titution rule. 8 Asking a DBE firm to commit to a 9 price in Year 1 based on a concep tual concept or 10 incomplete design when this work is not to be 11 performed until the end of the project, may be 12 unfair to the DBE firm. 13 In our experien ce, it has been the 14 DBE isn't always willing to do so. Often DBEs 15 wait until the low bidder is identified before 16 engaging in those ty pes of negotiations. 17 The regulation s also do not 18 recognize that a smaller firm may have a scarcer 19 resources will not fo ster the ob jective of 20 giving the DBEs the best opportunity to 21 participate in the contract. So, in effect, the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 138

rule will become a barrier. 1 If design change s, commitments may 2 cost more. If the pro posed regulations make no 3 distinction in the size of a project, the ability 4 of a small business to participate in a $100 5 million project is very much different from that 6

same firm to participate in a $1 billion project. 7 It often takes lo nger to negotiate 8 an agreement with a DBE. They are often not 9 interested in negotiati ng until a team or a 10 contract has been chosen. 11 Rules do not account for the 12 differences in contra ctors' policies and 13 procedures related to integrity and 14 transparency. So, it is very difficult to 15 determine the specific quantifiable costs 16 associated with the submission of good faith 17 efforts, documentation with the bid or within 18 one day of the bid subm ission, additional 19 estimators and purchase agents will be required, 20 and the time for contractors to submit a proposal 21 will have to be extended or lengthened to allow 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 139

sufficient time for contractors to submit an 1 engagement to DBEs. 2

In addition, firm criteria will have 3 to be established to de termine if go od faith 4 efforts - will have to determine good faith 5 efforts so that all bidde rs will be evaluated on 6 the same basis. 7 Additional personnel will have to be 8 hired by the agency or the government in order 9 to review the documen tation provided and 10 submitted with bids. 11 Individuals will have to be trained 12 to identify what do es or does not qualify as 13 meeting good faith efforts. 14 Cost will vary depending on the 15 size, type and complexity of the project. And 16 the cost may be between 8,000 an d 20,000 for a 17 smaller job, or 80,00 0 to 200,000 for a 18 billion-dollar project. 19 We intend to p rovide formal written 20 comments, but Dragados USA believes the focus of 21 the regulations mu st be on building capacity. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 140

We stand read y to assist in 1 formulating rules and re gulations that will 2 assist and achieve any ob jectives of the DBE 3 program and grow small bu sinesses to become 4 commercially-via ble businesses . Thank you. 5 MS. VACCARELLA: Thank you. Felice 6 Farber. 7 MS. FARBER: Hi. I'm Felice Farber 8 and I'm commenting today on behalf of the New 9 York Road and Infrast ructure Improvement 10 Coalition. 11 We're a statewid e coalition of New 12 York's highway, ma ss transit and water 13 infrastructure builde rs, trade unions and 14 project de signers. 15 Our mission is to improve and expand 16 the state's transporta tion and clean water 17 infrastructure. 18 A significant nu mber of our members 19 are themselves DBEs. And in that regard, we are 20 supportive of efforts to improve opportunities 21 for DBEs. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 141

We are, therefor e, pleased that DOT 1 has taken a breath in terms of issuing final 2 regulations so that we have a c onstructive 3 opportunity to share our perspective on why some 4 of the things proposed in the NPRM are either 5 unrealistic or, worse, counterprodu ctive to the 6 DBE program's ultimate goa l, which should be to 7 help ensure that there is qualified DBE capacity 8 in the industry. 9 We believe that every aspect of the 10 proposed regulations shou ld be guided by an 11 unbiased view about how they increase 12 opportunities for minor ity and women-owned 13 firms. 14 Simply forcing increased DBE 15 percentages in federal ly funded contracts 16 without understanding ho w those goals can be 17 realistically ac hieved is a cy nical exercise. 18

In that regard, the initial approach 19 taken in the NPRM ignor ed some f undamental 20 issues facing many of our members. And up until 21 this point, we found th at our valid concerns 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 142

about issues such as go od faith e fforts, bid 1 timing issues and certif ication have fallen on 2 deaf ears. 3 That is why we are particularly 4 happy to have the opportu nity to revisit them in 5 my remarks toda y and in our separate written 6 comments. 7 First, we must re ach a realistic and 8 fair understandin g of what good faith efforts 9 encompass. 10 For example, requiring what I'm 11 calling complete good faith ef forts, including 12 all subcontrac tor quotes and subcontractor 13 agreements at the time of bid in and of itself 14 does not create opportunities and build capacity 15 among DBEs. It only increases the volume of 16 paperwork requir ed by both primes and subs. 17 On large mult i-year co ntracts 18 requiring that each bi d include the prime 19 contractor's complete good faith efforts 20 including a list of all DBEs to be utilized 21 during the future course of the contract is 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 143

almost impossible. 1 Bidding out the work closer to the 2 time it is to be perf ormed create s additional 3 bidding opportunities for DBEs, removes the risk 4 of schedule delay and material and price 5 escalation for the D BE, and free s up bonding 6 capacity for DBEs to seek other work. 7 Committing to wo rk one, two, three 8 years out ties up a DB E's limited bonding 9 capacity and places the DB E at risk of schedule 10 delays that poten tially result in 11 overcommitment or significant gaps in workflow. 12 Both are problemati c for a small firm. 13 Requiring with each bid a complete 14 list of DBEs to be utiliz ed and the performance 15 of the work, will require all DBEs and not other 16 subcontractors the way it 's written, to submit 17 bids and negotiate agreem ents prior to the bid 18 due date. 19 Bids received after the opening, bid 20 opening, and, indeed, the same say as the bid 21 opening, will no longer be able to be accepted. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 144

Potential opportunities for DBEs 1 will further be dimini shed as t he short time 2 frame for biding and cont ract negotiation will 3 force firms to use only DBEs they know and trust 4 and who have a proven track record of 5 performance. 6 Opportunities f or DBE vendors and 7 suppliers will also be restricted as firms 8 generally will not make a deal for material 9 prebid. 10 Some prime firms have reported to us 11 that they will ultimat ely make the business 12 decision to bid fewer projects, because many 13 subs will be unwilling or unable to identify 14 second-tier subs during the initial bidding 15 process. 16 This will actual ly result in the 17 reduction rather than enhancements of small DBE 18 subcontracting opportunities. 19 Second, the rules must provide 20 different standards for design build and other 21 alternate project delivery methods. It's very 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 145

difficult to obtain bids and include a list of 1 all bids with a proje ct with only 30 percent 2 design. 3 As to certificati on as I'm running 4 short on time, one of the things that's very 5 important to improving the process is really 6 looking at the quality of the certification list 7 making sure that firms th at are truly probably 8 certified are included, they're on the NAICS 9 list. This includes distinguishing between the 10 building industry and th e heavy civi l industry. 11 The better quality and more accuracy 12 of the list will allow prime contractors to reach 13 out to the firms that pro vide the exact services 14 being solicited. 15 An improved and accurate certified 16 list would also reduce the administrative burden 17 on everyone and allow res ources to be focused on 18 providing contractin g opportuni ties and 19 actually building projects. 20 We appreciate the opportunity to 21 comment today and will be providing more 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 146

detailed written comm ents, including more 1 detailed information on the co sts of meeting the 2 NPRM requirements. 3 MS. VACCAREL LA: Thank you. 4 Kathryn D'Agostino. 5 (No response.) 6 MS. VACCARELLA: Kathryn D' Agostino. 7 (No response.) 8 MS. VACCARELLA: Brad Hubbert. 9 MR. HUBBERT: Madam Chair, my name is 10 Brad Hubbert a nd I'm represen ting the DeKalb 11 Branch NAACP as I come be fore you this evening 12 and to address Item Number 3. And prior to doing 13 that, I would like to make a statement. 14 It really saddens me to say that we 15 as a nation has failed to acknowledged the real 16 problem with our economic system and that it is 17 built on the foundation of discrimination and 18 greed. 19 Now, to the subjec t matter. It is 20 difficult for me to speak on the qu antifiable 21 costs and benefi ts associated with requiring 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 147

good faith effort docume ntation with bids when 1 bids are due and requiring additional documents, 2 i.e., DBEs, non-DBE qu otes, DBE subcontracts 3 without having data outl ined, the performance 4 made, the results achi eved and the costs 5 associated with that acti on and what percentage 6 of the desired result was achieved in 7 relationship to the costs. 8 But my prior ex perience tells me 9 that whatever the cost i s, it would not outweigh 10 the benefit to at leas t change this particular 11 recommendation - rules. Because all the 12 experience that I got when I was on the Board, 13 there's prime contractors changing their bids, 14 browbeating the subcont ractor to redu ce their 15 prices after they'r e awarded the bid. 16 And my thing is th at when you submit 17 a bid to - and I'm going to comment I agree with 18 Mr. Ashby - 100 pe rcent is that, you know, when 19 you submit a bid to an agency, all th e contract 20 bid, the contract or, prime contra ctor would not 21 want the agency to take their bids and shop them 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 148

around. 1 So, that's what th ey have been doing 2 with DBEs, especially wit h DBEs, okay? And I'm 3 sure they probably do it with su bcontractors, 4 but I haven't be en privileged to that firsthand 5 information from them. So, that's the - the 6 other thing along that sa me line, I would like 7 to ask a question. 8 But since I can't ask the panel a 9 question, I will pose the question and answer it 10 myself. 11 (Laughter.) 12 MS. HUBBERT: It's what is the origin 13 objective of the goals of the DBE program? 14 Okay. 15 The origin of the DBE program 16 revitalized as a result of the MBE WBE program. 17 And the purpose for it was to correct past and 18 present discriminatio n in the allocation of 19 federal resources. That' s, you know, that's my 20 understanding. 21 Now, I'm sure th at you all probably 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 149

have - hopefully have the same understanding as 1 to the purpose and orig in. So, to that end 2 hopefully we can add ress achieving those 3 objectives. 4 The next question I would like to 5 pose is that in layman's terms, what is the hope 6 to achieving - you hope to achi eve as a result 7 of these rule processes and how will it impact 8 the DBE community? 9 I think that needs to be a question 10 that should be asked. Based on the rules that 11 you are proposing to chan ge, how will it impact? 12 Will it enhance the minority or DBE 13 community, or will it destroy the DBE community? 14

I think that's a question that needs to be asked. 15 I went farther to define the real 16 purpose of the progra m is to eliminate 17 discrimination, address past discri mination in 18 the spending of feder al dollars for 19 transportation product and service, to level the 20 economic playing field for businesspersons who 21 have been discriminated against as a result of 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 150

race, sex, socioeconomic status, small 1 business, disa bled veteran in business. 2 I think that based on our economy, 3 our government has an obli gation and should see 4 a responsibility so small business is the 5 backbone of our economy, that we should be doing 6 everything within our pow er to improve the DBE 7 program. 8 And the reason we should be doing 9 that, because DBEs, 99 percent of the DBEs in the 10 program is small business. 11 And since small business is the 12 backbone of our economy, then I think that should 13 be our responsibility . That should be 14 government responsibility to do everything that 15 they can and set regulation and ru les that could 16 enhance, that will help sm all business survive 17 the same as they do with big corporations. 18 Okay. I didn't finish, but my time 19 is up. 20 MS. VACCAREL LA: Thank you. 21 MR. HUBBERT: Thank you. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 151

MS. VACCARELLA : Jeffrey Cruz. 1 MR. CRUZ: Good afternoon. My name 2 is Jeffrey Cruz. I am t he secretary and general 3 counsel of E.E. Cruz and Company, Inc. 4 E.E. Cruz is a heavy civil union 5 construction contracto r incorporate d in New 6 Jersey with oper ations in the metropolitan New 7 York City/Northern New Jersey area. 8 As a heavy civ il contra ctor, we 9 self-perform a high perce ntage of our work. We 10 have invested in and developed the personnel, 11 equipment and know-how to perform complex 12 excavation, concrete , demolition, steel 13 erection and other heavy construction work with 14 our own forces. 15 This enables us to reduce the risk 16 and cost to performing the work to the mutual 17 benefit of our public en tity owners and our 18 company. 19 Despite the commendable goals of the 20 DBE program, the DBE ru les as applied to the 21 heavy construction industry all too often have 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 152

a chilling effect on o ur company's operations, 1 on our ability to pr ocure new work and on the 2 overall health of our industry. 3 The DOT has pr oposed revised DBE 4 regulations will only serve to amplify those 5 effects by increasing the prime contractor's 6 bidding costs, incre asing the prime 7 contractor's performan ce risks an d reducing 8 competition fo r public works contracts. 9 I'll address incr eased costs first. 10 Requiring that good fa ith documentation be 11 completed and the DB E subcontracts to be 12 executed at the time of bid will be extremely 13 difficult, if not impossible. 14 In the time we typically have 15 between bid solicitation and bid submission, our 16 estimating department is able to study the 17 project, figure out the best and most economical 18 way to build it, prepare quantity takeoffs, 19 estimate the cost of performing or 20 subcontracting out the indi vidual scopes of 21 work, estimate the cost of material, equipment, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 153

services, insurance and other crit ical items, 1 evaluate the un ique project ri sks and assign 2 dollar values to cover them, and choose overhead 3 and profit rates that wi ll make business sense 4 and enable us to win the bid. 5 We do not have ti me before a bid is 6 submitted to level al l the proposals from 7 subcontractors and suppliers, evaluate their 8 qualifications and negotiate and execute 9 written agreements. 10 Only after we have been named the 11 apparent low bidder for a project would we be in 12 a position to start buyi ng up the subcontracts 13 and material purchase orders. 14 We simply don't ha ve the time and 15 resources to get all of that ac complished before 16 the bid is submitted. 17 Likewise, the subcontractors and 18 the suppliers will not invest the time and effort 19 to negotiate an d execute subc ontracts and 20 material purchase orders with a prime contractor 21 before the prime contract or has been awarded a 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 154

job. 1 The same goes for the good faith 2 efforts documentation. The prime contractor 3 cannot complete all of the required tasks and 4 prepare all the required documentation for every 5 bid before the bids go in. 6 The good faith effort to find and vet 7

DBE subcontractors and suppliers to evaluate the 8 proposals and negotiate written agreements 9 continues from the pr ebid phase into the 10 post-award phase. 11 Assuming for discussion purposes 12 that a prime contractor could get its good faith 13 efforts documentation and DBE subcontracts 14 completed before a bid go es in, the additional 15 costs would be substantial. 16 We have estimate d these costs to be 17 in the neighborhood of 20,000 to $25,000 per bid. 18 For a company that bids two months 19 - two projects a month, that's an additional 20 burden of 240,000 to $300 ,000 per year, monies 21 spent on projects that t he prime contractor has 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 155

not yet even won. 1 My second point is on the increased 2 risks. In many cases the high percen tage goals 3 established for our projects force us to 4 subcontract that we wou ld self-perform. More 5 subcontracting for us means more risk. 6 In our local market, many DBE 7 companies are newer businesses with less 8 experience and less capital than their 9 competitors. 10 We understand this reality and our 11 account company is willi ng to work with DBE 12 companies and help them succeed. 13 Nonetheless, our company's 14 experience, unfortunat ely, has be en a greater 15 incidence of performance problems and a higher 16 rate of default with our DBE subcontrac tors than 17 with our non-DBE subc ontractors. This 18 translates into increased risk to E.E. Cruz. 19 The DBE contract ors in our market, 20 generally speaking, do not have the ability to 21 post performance bonds or other security for 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 156

their perf ormance. 1 Prudent contractor s like E.E. Cruz 2 set reserves against increased risk. When 3 prudent contract ors win the work, this has the 4 unfortunate effect of driving up the cost of 5 construction for public works owners and the 6 taxpayer. 7 When contractors who do not have a 8 healthy respect for this risk are the low bidders 9 on public work, the indu stry suffers again. 10 Public owners experience more prime contractor 11 defaults and the co st of and time for 12 construction increases. 13 My last point is on reduced 14 competition. The incre ased cost of bidding 15 work and the increased ri sk of perf orming work 16 combine to create an environment where the prime 17 contractor to stay comp etitive bids on fewer 18 projects and carries risk contingencies in the 19 bids it does submit. 20 This is not healt hy for the heavy 21 construction industry, th e prime cont ractors or 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 157

the DBE companies who ne ed work to develop and 1 sustain themselves. 2 The DBE program needs a healthy 3 construction indu stry in which to succeed. 4 Needlessly incr easing the burdens on prime 5 contractors weaken s our industry. 6 Our company has carefully 7 considered the pr oposed rule to require prime 8 contractors to submit their good faith effort 9 documentation and DBE subcontracts with their 10 bids. 11 We have concluded that the rule 12 would increase the cost of bidding and increase 13 the risk of subcontracti ng resulting in a less 14 healthy and less co mpetitive business 15 environment for DBE contractors, prime 16 contractors an d public works owners. 17 Thank you very much for the 18 opportunity to addre ss this critically 19 important subject a nd its effects on our 20 industry. 21 MS. VACCARELLA: Thank you. Frank 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 158

Cara. 1 (No response.) 2 MS. VACCAREL LA: Frank Cara. 3 (No response.) 4 MS. VACCARELLA : Sharon Maxwell. 5 (No response.) 6 MS. VACCARELLA : Sharon Maxwell. 7 (No response.) 8 MS. VACCARELLA: Nicholle O'Malley. 9 (No response.) 10 MS. VACCARELLA: Nicholle O'Malley. 11 (No response.) 12 MS. VACCARELLA : Renee Banks. 13 MS. BANKS: Good afternoon again. 14 My name is Renee Banks and my company is G.W. 15 Peoples Contracting. And as I said earlier, we 16 build railroads. We occupy a very specific 17 niche in the industry, and that is railroad track 18 and transit co nstruction. 19 We have performed work across the 20 country from New Jers ey to California. We 21 recently worked with the Swedis h firm Skanska 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 159

Civil to complete 11 mil es of light rail transit 1 for Norfolk for the Ha mpton Roads transit. 2 And we just c ompleted the Dan Ryan 3 red line for the CTA in Chicago with Kiewit 4 Infrastructure - as a part of Kiewit 5 Infrastructure. 6 I have to say that we were able to 7 train, employ and recru it minority and female 8 workers. Our work perfor mance with Kiewit was 9 exemplary and both the - and everyone was pleased 10 with both the quality a nd the momentum of the 11 work. We have never defaulted and we have 12 bonding. 13 That projec t, that particular 14 project in Chicago gene rated 1500 jobs in a 15 distressed community, wa s completed on time and 16 under budget and our wor kforce was 70 percent 17 minority and women. 18 And I don't think that many of the 19 majority contractors sh are that commi tment to 20 inclusion both in contracting, nor in hiring. 21 And I provide this background - oh, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 160

there we go. I provide this background on G.W. 1 Peoples, because we've been around for a long 2 time. We've got the - we' ve had the experience. 3 Our workforce, our management workforce has over 4 300 years of accumu lated experience. 5 And I have to sa y that we support - 6 what we support is increa ses in the federal DBE 7 goal beyond 10 percent. And not only that, but 8 we urge that DBE goal s be applied across 9 disciplines. Because, as you know, right now 10 DBE goals are applied acr oss the total project 11 value. 12 And as it stands right now, it is 13 perfectly accept able and compli ant for a prime 14 contractor to have zero participation in one 15 discipline, for example, rail constru ction, and 16 as long as the overal l project go al is met. 17 So, the prime is in compliance even 18 when segments of that con tractor devoid of DBE 19 subcontractors. 20 And these patter ns of exclusion are 21 clearly evident in other areas, not just track, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 161

engineering, design, ar chitecture despite the 1 fact that there are a number of capable 2 minority-owned compan ies to do the work. 3 Now, this was act ually - I overheard 4 something and I may have overheard it 5 inaccurately. And I apol ogize in advance if I 6 did, but I overheard some one say, oh, well, if 7 the DBE goals are increas ed, the percentage is 8 increased, we - oh, well, we just add more 9 trucking. And that's ki nd of the - not to 10 disparage trucking, but that's kind of the 11 attitude so that the mino rity participation is 12 kind of delegated or rele gated to lower profile, 13 lower - less labor intensive, traditional niches 14 and we believe that this is in disreg ard of the 15 true intent of the DBE program. 16 And if we assume that the purpose of 17 the program is to have a contract scenario that 18 would exist in the absence of discrimination, of 19 historical discrimina tion, if that's the 20 scenario that we're looki ng for, then we have to 21 look at each discipline. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 162

And the only way that we can actually 1 redress that long trad ition, Mr. Hubbert, of 2 discrimination a nd racism and se xism is to look 3 across at disciplines , nontraditio nal niches, 4 nontraditional wo rk and spread th at goal across 5 those and give everyone an equal opportunity. 6 And that's how we grow capacity as well. 7 So, I thank you very much and we will 8 also be submitting writt en comments. Thank 9 you. 10 MS. VACCARELLA : Thank you. Jim 11 Crum. 12 MR. CRUM: Thank you, panel. My name 13 is Jim Crum. I am the vice president and civil 14 rights officer for La ncaster Development, 15 Incorporated where I have been employed for 36 16 years. 17 We perform federally-aided highway 18 and bridge contracts in upstate New York for the 19 New York State Departme nt of Tran sportation. 20 I have also served for many years as 21 chairman of the Civil Righ ts Committee for AGC's 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 163

New York chapter whose primary purpose is to 1 partner with New Yo rk State DOT on the 2 administration of its civil rights programs. 3 I'm here today representing the Associated 4 General Contract ors of America. 5 Without questi on there will be 6 increased costs should the proposed revisions to 7 the DBE regulation s be implemented. 8 AGC and ARTBA coo perated in a survey 9 of our memberships to det ermine if costs could 10 be identified. 11 The results from the approximately 12 300 responses show tha t 75 percent indicate 13 costs would increase at least by $25,000 per 14 contract to comp ly with the expanded good faith 15 efforts and the extensi ve new DBE information 16 that must be submit ted with the bid. 17 Over nine percent said costs would 18 increase as much as a hundred thous and dollars 19 per contract. 20 To put that into perspective, there 21

are currently 130,000 active federal aid highway 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 164

contracts. At $25,000 additional cost per 1 contract, the cost in crease is nearly $3 2 billion. 3 What are drivi ng these additional 4 costs? Compli ance with the extra procedures 5 will result in extra s taff time and potentially 6 hiring extra st aff to take the additional 7 required outreach steps and to provide the 8 significant additi onal paperwork. 9 Documentation will be substantial. 10 Expanded good faith eff ort require ments are 11 extensive. 12 Additional outreach and 13 investigation to iden tify potential DBE 14 subcontractors is costly. 15 Identifying DBEs, clarifying their 16 qualifications, including experience, staff, 17 available equipm ent, insurance, financial 18 resources, bonding a nd other factors that 19 determine if a subcontrac tor will be hired for 20

a particular project and to ensure that they meet 21 the regulatory requ irement to perform a 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 165

commercially useful funct ion all in time to be 1 included with th e bid is costly. 2 Contract costs will increase. 3 Requiring primes to subm it with their bids the 4 list of DBEs that will be working on a project 5 including dollar amount , scope of work and a 6 letter from DBEs verify ing this agreement will 7 lead to higher prices. 8 This requirement will prevent prime 9 contractors from being ab le to subm it the best 10 price to the owner, because fewer bids will be 11 received from DB E subcontractors. 12 The additional wo rk that will be 13 required by DBE subcon tractors to submit bids to 14 a large number of prime contractors before bid 15 opening is a very constrained time frame and will 16 prove, we believe, to be overwhelming. 17 DBEs will be a sked to provide this 18 information to multiple primes on multiple 19 contracts. 20 By virtue of b eing small, specialty 21 contractors, they are unlikely to have the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 166

in-house capability to submit bids that are now 1 required to comply with this regulatory change. 2 The proposed requirement that DBEs 3 submit to the pr ime a letter agreeing to the 4 specific scope of work and price in a timely 5 fashion so that the prime can subm it a bid to the 6 owner will be di fficult to meet. 7 Typically, subs submit quotes to 8 primes that incl ude a list of contract line 9 items. 10 Until all the quotes are received 11 and compared, there is no certainty which scope 12 of work the DBE will be hi red to perform, making 13 it impossible for the DB Es to submit a letter 14 before the bid is submitt ed spelling this out. 15 Subs also receiv e last-minute price 16 quotes from their suppliers, which also makes it 17 difficult for them to se nd a letter certifying 18 their price and scope in a timely manner. 19 If the prime rece ives a quote from 20 a DBE it has not used before, there is 21 insufficient time to investigate their 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 167

capabilities and whether they will perform a 1 commercially useful fu nction making it 2 difficult for fledgling DBEs to enter the 3 marketplace. 4 Primes without this information in 5 hand will be forced to use price quotes from 6 whatever DBE su b, if any, meet the bid day 7 schedule and not use a D BE and fail to meet the 8 goal requirements. 9 Primes will be forced to set 10 deadlines for taking pr ice quotes from subs. 11 This will limit th e last-minute price cutting by 12 subs that is very much a part of the bidding 13 process. This will result in higher 14 construction cost s to the owner. 15 In addition, DB Es must learn this 16 part of the esti mating and cont racting process 17 if they hope to be successful in the construction 18 business. 19 Expanded good faith efforts that are 20 proposed for replacin g the original DBE 21 subcontractor with anot her DBE sub contractor 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 168

once the contract has been imported, will 1 increase cost. 2 98 percent of the survey respondents 3 said cost per contract would increase by at least 4 25,000 with over 17 pe rcent indicating that 5 those costs would incr ease over a hundred 6 thousand dollars. 7 Replacement of DBEs may increase 8 under this rule be cause of the lack of time to 9 fully vet DBE quotes and qu alifications. 10 In addition to these hard costs, 11 there will be other costs that need to be 12 addressed. 13 Our survey showed that 43 percent of 14 the respondents indicate d that they would bid 15 less federal aid wo rk because of these 16 requirements and the prop osed onerous sanctions 17 for alleged no ncompliance. 18 Less competition will surely lead to 19 increased bid amou nts. Thank you. 20 MS. VACCARELLA: Thank you. Marcela 21 Alcantar. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 169

MS. ALCANTAR: Good afternoon, 1 again. Marcela Alca ntar for Diversified 2 Builders and En gineers Council. 3 While there is no question that 4 there is - are costs invo lved for every form and 5 report required by the DBE program, the variance 6 from one firm to another, one project to another, 7 and one agency to anot her creates such a 8 significant number of possible co mbinations 9 that it would be impossible to quantify the cost. 10 The question shou ld be, what is the 11 cost of not documenti ng the report in DBE 12 eligibility in use inclusive of hard goals and 13 soft goals - what I call "soft goals." 14 The cost of failing to require 15 reporting is the program itself. No required 16 reports with supporting documentat ion in most 17 cases and failin g to verify info rmation would 18 not only invalidate the intent of the DBE 19 program, but actually cau ses harm by leading to 20 fraud. 21 Standardizing availability and 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 170

disparity study methodolo gy when c alculating 1 contracting disparity or setting goals, all DBEs 2 being the presented gr oups are considered 3 together. 4 This cause a situ ation where one or 5 two large successful DBEs can tip the 6 participation level of an entire group making it 7 look like there is more utilization than there 8 is actually is resulting in diminishing the 9 assistance for smaller DBEs. 10 Uniform proce ssing for goal 11 setting. Ove rall goals should be tiered to 12 differentiate be tween large DBE primes and DBE 13 subcontractors. 14 Type of functions should be weighted 15 and there should be goal levels of DBE size 16 depending on gross receipts when setting project 17 goals. 18 Some good faith efforts 19 documentation should be provided by bidders even 20 when there is no t race-conscious goals in the 21 project. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 171

In cases whe re the project is 1 determined not to require cons cious goals is too 2 easy for bidders to only solicit bids non-DBE 3 subcontractors in order to minimize paperwork. 4 The strict l ow bid system for 5 construction contra cting versus the 6 qualification base s ystem for professional 7 services creates an unfair and unbalanced 8 contracting proc essing award. 9 Professional serv ices providers may 10 be required to submit documentation that 11 construction cont ractors do not. 12 In spite of the prohibition against 13 rejecting quotes from DBE subcontractors based 14 solely on the basis of co sts, the practice still 15 exists, and without en forcement of evaluation 16 criteria, DBE's funds may be shortchanged. 17 There is inadeq uate emphasis on 18 race-neutral participation in achieving overall 19 goals. The race-conscious goals are considered 20 to be enforceable wh ere race-neutral 21 participation is ju st a suggestion. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 172

If the availabil ity of all DBEs 1 indicate that there is an overall goal is 2 reasonable and achievable , then they should be 3 the target. 4 In all efforts received, there 5 should be that utilizati on instead of where 6 race-conscious goals are present. The attitude 7 is I will do what is ne cessary to ensure the 8 contract if nothing more. 9 In order to pr eserve the intent of 10 the value of t he program, DBE program, the 11 current levels of re porting sh ould be 12 maintained, if not in creased. Without 13 accountability and compliance to the 14 data-gathering an d analysis, the DBE program 15 will continue to be targ et for fraud and waste. 16 Oversight should be improved, 17 training, and guidance sh ould be cl arified and 18 penalties for no ncompliance. 19 Consistency, transparency, 20 accountability, enforce ment, equity. Now, 21 there is three perspectives of what aspirational 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 173

goals means. 1 One is if you have done a disparity 2 study, then now you have the hard goals and then 3 you have the aspirational goals target to that. 4 If you have that sc enario, then like 5 in the case for the Hisp anics and the other 6 minorities, now we're at the mercy of 7 aspirational or whatever you fe el like doing. 8 So, leaving us out completely of any 9 opportunities whatsoever. 10 Now, there is the second one that if 11 there is federal governme nt, but then there is 12 state funding. If th e state funding is 13 available, there should be the aspirational 14 goals applied to the state fundin g equally. 15 Now, there is an opportunit y on the 16 aspirational goals that can be used to directly 17 solicit to DBE firms di rectly to the DBEs, 18 meaning the agency ca n have access only 19 exclusively aspiration al goals to large prime 20 DBEs so that this going that it cost me too much 21 is directly with the agen cy and then we can have 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 174

a direct access and beco me truly level playing 1 field with primes. 2 And the last one and final is, the 3 assumption that aspi rational goals can be 4 achieved without any hard goal setting. There 5 is no tracking records of tracking soft goals or 6 aspirational goals. Thank you. 7 MS. VACCAREL LA: Thank you. 8 Frank Lopez. 9 (No response.) 10 MS. VACCARELLA : Frank Lopez. 11 (No response.) 12 MS. VACCARELLA: Leslie Saunders. 13 (No response.) 14 MS. VACCARELLA: Leslie Saunders. 15 (No response.) 16 MS. VACCARELLA: Carl Brown. 17 (No response.) 18 MS. VACCARELLA: Carl Brown. 19 (No response.) 20 MS. VACCARELLA : Harley Hampton. 21 (NO response.) 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 175

MS. VACCARELLA : Harley Hampton. 1 (No response.) 2 MS. VACCARELLA : Charles Gibbs. 3 MR. GIBBS: Good evening, again. 4 With GUTA, Georgi a United Trucke rs Association. 5 Again, I just want to keep it simple. 6 I'm here to repres ent the trucks. We need an 7 increase in price, you know. 8 I've been in the trucking game since 9 2006, and we are now in 2013 and rates have not 10 increased. 11 Getting 60 to $65 an hour is not 12 cutting it. Fuel has go ne up, double d and, you 13 know, we keep gett ing the same money. 14 So, I'm asking you guys from your 15 desk, your chairs, if yo u can help us in that 16

arena. 17 You know, one can ask the question 18 the cost of diesel is che aper to refine diesel, 19 but yet, still, the cost of diesel versus 20 gasoline is sign ificantly higher. 21 I know this is no t the forum for what 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 176

I'm asking, but I hav e to just use this 1 opportunity to scream out, ask for help. 2 That's basically it. You guys have 3 a good one. 4 (Laughter.) 5 MS. VACCAREL LA: Thank you. 6 Sarah von der Lippe. 7 MS. VON DER LIPPE : Hi. Sarah von 8 der Lippe agai n. I am so sorry, but I am Johnny 9 One Note today, but I'm go ing to do it again and 10 say the key thing that we need to look at in 11 assessing this proposed rule change is what's 12 the purpose of this program. 13 And the purpose of the DBE program, 14 in fact, the only permit ted constitutional 15 purpose of the DBE pro gram, is to eliminate 16 discrimination. That is what the program is 17 intended to do. 18 So, in that context, we need to 19 understand as Bob, I thin k, said very, very well 20 that that involves chan ging the way industries 21 do business. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 177

The constructi on industry, the 1 professional - it's no t just construction 2 either. There's lot of industries involved 3 here. 4 The way this program found those 5 industries when it was first initiated initially 6 as a regulatory change a nd later as a statutory 7 change, were as discriminatory industries. And 8 we are still to this da y seeking to change 9 discriminatory aspects of those industries and 10 we cannot stop. We're ob ligated to continue to 11 do that. 12 DOT specifically if it is to operate 13 a race-conscious DBE prog ram, has an obligation 14 to ensure that its own regulations and its own 15 policies do not either permit or promote 16 discrimination in any way. 17 So, it's terrib ly important to 18 understand in that c ontext that court after 19 court after court has ide ntified bid shopping, 20 bid shopping as - especially bid shopping of DBEs 21 as discriminatory activity, period. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 178

It's cited as pa rt of the record of 1 discrimination in many of the constitutional 2 cases that have come up and that you all relied 3 on and that I know yo u know all too well. 4 So, given the fact that that is true, 5 given the fact that bid shopping is a problem and 6 is a context in which discrimination is rife, DOT 7 is obligated to stop it. We must ta ke steps to 8 stop it. All of us must , both the recipient and 9 DOT. 10 My own person al opinion is the 11 easiest and best way to stop bid shopping is to 12 make the key components of DBE, the proposed DBE 13 activity in the contract or in the alternative 14 good faith efforts, part of the materials that 15 must be permitte d, that must be submitted as a 16 component of responsivene ss at the time of bid 17 opening, at the time of bid letting. 18

I understand there are difference of 19 opinions about th at, but that's my opinion. I 20 think it works the best. 21 And one thing that hasn't been noted 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 179

here today, it's almost as if this is a brand new 1 concept that's never be en thought of before. 2 It's terribly im portant that we all 3 acknowledge there are recipients throughout 4 this country that requi re the DBE information 5 and GFE as an element of responsive ness right 6

now. 7 And I'm fairly ce rtain that some of 8 the entities that have spoken he re today have 9 members who actually operate in those 10 jurisdictions. 11 That is occurrin g and I think it's 12 really worthwhile for you to consider talking to 13 some of those entiti es and getting some 14 information, but the bottom line is this: If you 15 don't want to ma ke it part of a responsiveness 16 determination, that is definit ely something 17 that DOT can consider. 18 What you cannot consider is 19 permitting bid sh opping to cont inue. So, the 20 extent that there's a context in which it's rife, 21 you must identify that context. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 180

If you don't want to eliminate it by 1 responsiveness determinations, you must find 2 another way to eliminate it. 3 And another issue we've talked about 4 a lot today th at's open to you is define it, 5 prohibit it and enforce the heck out of it. Go 6 after individual entities that are pe rpetrating 7 this particular activity. 8 I understand t he implications of 9 that for you in terms of time, attention and 10 everything else. We've talked about how hard it 11 is to place certificatio n. This is another big 12 step and it would require getting people out in 13 the field to watch this and taking testimony, but 14 there is no doub t that we can si mply permit bid 15 shopping to continue. We must take steps to 16 identify it an d eliminate it. 17 Thank you so much and thank you for 18 sitting here all day and thank you to everybody 19 else in here w ho sat here all day. I think 20 everybody who's still here should get some sort 21 of medal of honor for like, I don't know, like 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 181

Survivor or something. We've made it this long. 1 MS. VACCAREL LA: Thank you. 2 Cleveland Carter. 3 (No response.) 4 MS. VACCARELLA: Cleveland Carter. 5 (Discussion of f the record.) 6 MR. HUBBERT: Brad Hubbert 7 representing NAACP, DeKa lb branch. Two things 8 I would like to mention in relationship to Item 9 Number 3. 10 One is that the - I mentioned it 11 earlier. The DBE goal, th e DBE goal is much too 12 low if all of the se groups going to be 13 participating in the DBE goal. 14 We have a DBE goal of 10 percent and 15 let's say in the state of Georgia, let's say we 16 was at our 10 percent level. 17 There's no rati onale for a DBE firm 18 to spend all their life savings to invest and 19 going into the Departm ent of Tran sportation 20 business. 21 The goal is alr eady achieved. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 182

There is no market. So, if you want to increase 1 the development and subs taining of small DBE 2 firms, the goal mu st be increased. 3 I'm going to sa y that again. If 4 you're really looking at the marketpl ace, there 5 is no prudent businessman that will invest his 6 money to go into business where the market has 7 already been consumed. 8 If you can identi fy a person that 9 will do that unless he h ad a brand new invention 10 that wasn't on the mark et that could save 11 millions and millions of doll ars, okay, they 12 wouldn't do it. So, th at's what we need to 13 really look at if we're truly serious about it. 14 And the young lady has already 15 talked about discriminati on, which I've talked 16 about, because that's the main p urpose and 17 that's the main probl em that we have in the 18 economic system. 19 The other thing I would say in 20 looking at our DBE goals, some of the weakness 21 that I would like to poin t out and it has already 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 183

been pointed out, but I just reiterate it, 1 because it's not often th at you get six, seven 2 persons to address who are in a position to make 3 a difference. 4 Okay. It's not that often that you 5 get that opportunity. S o, we better make good 6 of it while we got that opportunity. 7 So, the weakness in the program, one 8 is that it need a strong margin process in place 9 with legible, attainab le goals that are 10 objective. 11 Okay. Now, if you got a program in 12 place and you're not moni toring it to make sure 13 that it's doing what the design object ives are, 14 then we might as well not have a program in place. 15 Okay. Two, we need to correct the 16 misuse, fraud and abuse of the program. There 17 should be penalties and they should be known. 18 They should be im posed, you know. 19 I can rip off the government for 20 millions of dollars and I get a slap on the wrist, 21 okay, you know. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 184

Instead, we need a tracking system 1 that minority - to make sure that minority - once 2 they have gone through all t he rigmarole of 3 getting certified, that they have an opportunity 4 to make their money back, they getting 5 contracts. So, we certi fy the folks and then we 6 throw them - kick them to the curb and we look 7 at two years from now the y've been certified for 8 five years and still have n't gotten a contract, 9 because the volume of contracts is not available 10 for them to truly successfully be in, in addition 11 to the discrimination that's on top of that, 12 okay. 13 And four, the goal of the DBE 14 program, I already mentioned that, but should be 15 truly looked at be ing an increase. 16 And, again, I wa nt to thank you for 17 listening and thank you for the opportunity to 18 speak with you an d God bless you. 19 MS. VACCAREL LA: Thank you. 20 Jerry Hanner. 21 (Speaking off mic.) 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 185

MS. VACCARELLA: Why don't you wait 1 until you get to the microphone , please. 2 MR. HANNER: Okay. My name is Jerry 3 Hanner. I'm from Chat tanooga, Tennessee and 4 from JM Hanner Cons truction Company. 5 When I saw this to pic, I was looking 6 at one thing that was in volved in it and it was 7 talking about whenever so meone put a fair effort 8 in doing something or a good faith effort, this 9

- I put together something before I came, because 10 we need to look at some real numbers. 11 And I, you kno w, when we talk about 12 the program, you got to ask yourself why 13 something doesn't work. 14 And being in c onstruction, we have 15 a thing where we say we 'll get the foundation 16 squared up, we'll get it right, then we can go 17 where we want to go. 18 Everybody is ment ioning something. 19 You mentioned the meaning of the program, why was 20 it initiated? Why did we even start it at the 21 beginning? 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 186

I'm looking at some numbers here 1 from 1619 up to 2013. There is roughly about 394 2 years of a lifespan. This really represents the 3 lifespan of blacks in this country. 4 You realize that the first 240, 245 5 years we were in slavery. We had no rights to 6 anything. The biggest set-aside for America 7 was when white men set as ide all the revenue in 8 this country fo r themselves. 9 Then we went fr om that time, you 10 know, we had a false prom ise, because we had the 11 Emancipation Proclamatio n. We had a false 12 promise that said, you kn ow what? We're going 13 to be treated like citizens. 14 We went another 99 years fighting 15 for civil rights in this country. 99 years we 16 went fighting the Jim Cr ow laws, the changing of 17 the laws, the structures, programs and the sort, 18 because, you know what? The first Civil Rights 19 Act was back in 1874. So, this is no new thing 20 for civil rights. 21 So, here it is no w. We've got all 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 187

this going on and here we 're doing this fighting 1 for another 99 years. And then we say, wow, with 2 all the bloodshed coming down with Dr. King and 3 all the other brothers, some being hung, some of 4 us put in jail, we sai d, wow, here we got Title 5 VI, civil rights, affirm ative action. We've 6 got a shot at leveling the playing field, and 7 look at what happened. 8 We done went anot her 49 years and we 9 still don't have a structure for it, because, you 10 know what? We're dealing with something called 11 good faith effort. 12 I went to Ham ilton County before I 13 left in Chattano oga and talked to the city 14 attorney there. And I to ld him, I said, wow, we 15 got another school coming up in the city here. 16 They about to be at East Brainerd School. And 17 I said, what's the goal? 18 He said, oh, hel l, you know we got 19 a 10 percent goal. It's a good faith effort. I 20 said, look, man, how many - how many black people 21 have got a contract over the years? 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 188

He said, nobody ge ts any contracts. 1 He said, but we have a good faith effort. 2 But what I'm saying is if we're going 3 to have a program, the reason it doesn't work and 4 the reason we in here struggling with how we 5 should structure this rule or this certification 6 paper or something of th at nature, it's because 7 we're not even de aling with the foundation at 8 all. 9 You can't take a person that's 10 prejudice, that 's racist and th en turn around 11 and he's the one that had the whip on our back 12 all the time and then tur n around and ask him, 13 say, with good faith, wi ll you give this man a 14 job? 15 See, hearts has to be regulated. 16 And what that means is th at we ask y'all to put 17

some regulations in the heart. To put something 18 there that says, no, you' re going to have a DBE 19 on the job. 20 My thing is, you know, naturally I'm 21 favoring black America, because, you know, I'm 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 189

64 years old, I'm looking at these numbers here. 1 I talked to my dad before I left. 2 He's 89. He's asking, do you think we got a 3 shot? 4 I said, I don't know, Dad. They run 5 these years past us so fast. I don' know what 6 it's going to come to, but you got to look at this 7 number. 8 I mean, all the time that we've been 9 in this country and then we ask for 10 percent 10 set aside and somebody a ct like that's much, if 11 you're going to level the playing field, then it 12 ought to be somewhere near 30 or 40 percent 13 that's given back to the minorities. 14 We have no - we have no beef with the 15 women, other minorities that's in this country 16 that's piggybacking on t he backs of the blacks 17 that doing the mo vement. We don' t have no beef 18 with that. 19 What we do have a beef with is that 20 now that we've gone throug h that and we look up 21 and we're receiving less th an one perc ent of the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 190

federal high way money. 1 Now, look, if we go back to the 2 original origin of the theme and stop asking 3 people that don't have a heart to be fair with 4 people, that's not going to work. 5 What we need to do is we set up these 6 goals and say eith er you're going to have - and 7 I'm listening to these people talking about what 8 minority contractors can do. 9 I just thought about a thing, 10 Skanska Construction, I' m sure you all have 11 heard of them. One of th e largest construction 12 companies in the worl d. They came to 13 Chattanooga. They b uilt Blue Cros s and Blue 14 Shield. 15 They needed to - I know I'm running 16 out of time. They needed some minorities on the 17 job. 18 They came to us and they said, hey, 19 look, see, what we need to do is st ructure some 20 so you all can g et - we worked with them on their 21 project. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 191

They came in, they set it up, they 1 made arrangements. I said, well, look, now, you 2 know now we cannot run no 30 people on no job and 3 make that kind of payroll. 4 They said what we will do is we will 5 pay you every week. What we want you all to do 6 is come in and do the job. Look, people, it's 7 about adjustment. 8 If you're going to level the playing 9 field, you know you're not going to find a 10 minority contractor th at's already trained. 11 You know you're not going to find 12 him. Okay. I'm goin g to sit down. You know 13 you're not - you know you 're not going to find 14 him. 15 So, why in the wo rld do you come up 16 here and act like that we can't find them? You 17 know you're not goi ng to find th em. You 18 deprived them for all th ese years. You haven't 19 developed any of them and you're going to act 20 like you're going to find them? This is 21

nonsense. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 192

Title VI said that there was 1 training money to develop companies. We needed 2 to be developing and tyi ng them into every line 3 time, as the lady said, on every line item that 4 you have, there should be somebody on there if 5 they can only do one percen t of it. 6 Maybe they can 't do all the dirty 7 work, but let them do one percent of it. And I 8 guarantee you if you re gulate this, what will 9 wind up happening is we will develop some 10 confidence, because the whole thing is about - 11 the whole thing was about working out the 12 discrimination. The whole thing was about 13 leveling the playing field. 14 And when you look at it, you can't 15 level it if you're going to look back at somebody 16 that's been hobbled with chains as LB said, and 17 then you going to say, okay, now, g et out here 18 now and you compete li ke the rest of us. 19 You going to have to develop us. 20 And all this cost like you can't find - every time 21 you turn around, we fill ing out some kind of 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 193

certification papers. 1 Everybody every time you turn, they 2 got a list of DBEs for ev erybody to get on and 3 now all of a sudden you can't find us. 4 So, you know, you're going to have 5 a heck of an experience just looking at a sheet 6 that you already got? No, this is bull corn. 7 If we're goi ng to do something, 8 let's do it. Because, lo ok, we're running out 9 of years. 10 That's a lot of years. All the 11 years that black America ha s been here and this 12 is as far as we got. And we ask ourself the 13 question, where is the just ice? How many more 14 years we got to go to, to find it? 15 Surely you all, surely you all can 16 have a heart to say, you know what? We're going 17 to listen. Black peop le need a set-aside. 18 You all had the 200, 300 years of 19 set-aside for white Americ a. You got to have it 20 where black people at lea st have something set 21 aside, or they won' t give us nothing. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 194

If we're going to have 30 percent, 1 50 percent of it going to blacks should be in the 2 power. 3 We have no probl em with other 4 minorities and wo men. You know what? I got 5 daughters myself. I got, you know, I got 6 brothers, I got a lot of different people that's 7 in my life. 8 Divide it up. Set it up and tell 9 them they're going to ha ve to help us on the job 10 and let's get this program working. 11 MS. VACCAREL LA: Thank you. 12 Denise Richardson. 13 MS. RICHARDSON: Thank you for the 14 opportunity to comment today. I am Denise 15 Richardson, managing di rector of the General 16 Contractors As sociation of New York. 17 Our members include minority, 18 women-owned firms, DB E firms, as well as 19 graduate DMWBE firms. And so, my comments today 20 reflect the comments across our entire 21 membership. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 195

The goal of the DBE program is to 1 level the play ing field and to increase 2 opportunities fo r disadvantage d businesses. 3 And so, the questi on that has to be 4 asked of all of the prop osed rules are, do the 5 rules actually help achieve thos e goals? 6 And I will te ll you from the 7 perspective of someone who represents both prime 8 contractors, subcontract ors, as well as the 9 DMWBE community, that th e proposal to require 10 the DBE prices with the bid submission will not 11 help the overall goal of increasing the capacity 12 of the DBE pool of businesses. 13 People have spent a lot of time today 14 talking about bid shopping, but I will tell you 15 that as a matter of fact, the prime contractor's 16 bids as well get s hopped by th e agencies 17 frequently. 18 That's called a best and final 19 offer, and it happens frequ ently in all kinds of 20 procurements. 21 Moreover, with a bid we have to deal 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 196

with the issue of last-minute agenda, changes by 1 the Agency, and now for the DBE community making 2 sure that every DBE is bi dding on the identical 3 scope of work, which actually works to the 4 disadvantage of the sm aller DBE firms, the 5 mid-range DBE firms and the larger DBE firms. 6 Because the process that we have now where we are 7 able to work with the DB Es once the particular 8 prime contractor has won the bid, allows each DBE 9 to identify the scope of work that it can perform 10 best and submit the price to us that will work 11 in your best interest and allows us to tailor 12 payment terms as other people have talked about 13 today. 14 When you change th e rules to require 15 that the DBEs submit all of their prices with the 16 bid, what you have done is you have made the DBE 17 program into a price-base d system, because we 18

are submitting our bid with the goal of being the 19 low bidder. 20 And so, therefore, we will not have 21 the time or the ability to tailor the scopes, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 197

work with the ind ividual DBEs and identify the 1 way that make s that pool of DBEs the most 2 successful on our project. It will become a 3 scope and price- based system. 4 And if you bel ieve that that is the 5 best way to increase DBE capacity, then that is 6 where you will go. B ut I will tell you from 7 experience, and yo u have heard a lot of the DBE 8 and MWBE firms here today talk about the 9 difficulties that they have managing all of the 10 required paperwork , they have limited 11 estimating staffs, they have limited 12 administrative staffs. 13 With the rule that requires the DBEs 14 to submit their bids to all of the prime 15 contractors at the time of bid, you will be 16 adversely affecting the ir abilit y to manage 17 their work and to mana ge their businesses. 18 They will have to increase their 19 estimating staff, and they will also have to make 20 sure when they submit a bid, that every prime 21 contractor scope of work that they receive, that 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 198

they look at it. 1 Because each prime contractor will 2 break up its subcontr act packages differently 3 based on how the prime contractor is going to do 4 the job. 5 So, it will not be as simple as the 6 DBE just taking its price and submitting it to 7 four or five or possibly as many as 10 prime 8 contractors. 9 Each DBE will ha ve to look at each 10 scope of work and submit ea ch individual price. 11 I think in the long run when you look 12 at the issue of growing DBE capacity, you need 13 to very carefully look at the fact of requiring 14 the DBE prices to be submitted with the bid. 15 Moreover, I will tell you that that 16 will end any me aningful opport unity for a 17 mentor/protégé progra m, because your DBE 18 program now becomes ba sically a miniature 19 version of the prime co ntractor rela tionship 20 that we have with the agencies, which is you 21 submit a bid, you hope it 's the lowest price and 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 199

you get the work. 1 That's what the DBE program will 2 become and my argument is, is that that will work 3 not in the best interest of the DBE population. 4 Thank you. 5 MS. VACCAREL LA: Thank you. 6 Kathryn D'Agostino. 7 (No response.) 8 MS. VACCAREL LA: Frank Cara. 9 (No response.) 10 MS. VACCARELLA : Sharon Maxwell. 11 (No response.) 12 MS. VACCARELLA: Nicholle O'Malley. 13 (No response.) 14 MS. VACCARELLA : Frank Lopez. 15 (No response.) 16 MS. VACCARELLA: Leslie Saunders. 17 (No response.) 18 MS. VACCARELLA: Carl Brown. 19 (No response.) 20 MS. VACCARELLA : Harley Hampton. 21 (No response.) 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 200

MS. VACCARELLA: Okay. That closes 1 the session for schedule d speakers. We'll now 2 open the session for peop le who want to comment 3 or rebuttal. 4

I want to remind people online to the 5 webchat that comments sh ould include your name, 6 organization and the to pic area. This is Topic 7 Area 3. 8 If you're also responding to a 9 commenter in the room, pl ease also put that in 10 your online comment. Speakers are limited to 11 one minute at this section. 12 Amy Hall. 13 MS. HALL: Am y Hall with Ebony 14 Construction, To ledo, Ohio. I think it would 15 behoove all of us to kind of bring this all back 16 together and come up w ith what the goal is and 17 what's in the best world a win-win situation for 18 everybody. 19 What's a win for the prime 20 contractor, what's a win for the DBE contractor 21 and what's the wi n for the DOTs? 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 201

Obviously the goal is to facilitate 1 or ensure that the DBE is getting the business 2 in a timely fashion in which they are - their bids 3 are going to be used for the job. 4 So, why don't we come up with 5 something that at the time of bid there's a 6 question to the prime contractor? Did you reach 7 your goals? Yes, no, maybe so. 8 And then come up with a reasonable 9 time after, 24, 48 ho urs, to submit the 10 additional docume ntation by bo th the DBE, as 11 well as the pr ime contractor. 12 What it does is it eliminates the 13 whole issue at time of bid and what's going on 14 there and all the frenzy at the time of bid, but 15 yet it's still providing the DBE and reducing the 16 chance of pr ice shopping. 17 And so, let's come up with a 18 solution. Let's not c ut off the nose to spite 19 the face because this gr oup doesn't understand, 20 or this group has a posi tion and this group has 21 a position. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 202

Let's kind of move to something in 1 the center, whic h is a win-win for everybody. 2 Let's have the DBEs being used and having them 3 named in a timely fashion which doesn't impact 4 the prime contract or from submitting their bids 5 at the time of bid pr oposals and when bids are 6 due and reduce bid sh opping. Thank you. 7 MS. VACCARELLA : Susan Wendt. 8 MS. WENDT: Susa n Wendt from Wendt 9 Productions. One of t he things that I want to 10 make sure that we don't do today is to lose sight 11 of the fact that there is an awful lot that's 12 right with the DBE program. 13 I partake in a nu mber of things as 14 a part of the leadersh ip for the U.S. Women's 15 Chamber of Commerce, i ncluding a couple of weeks 16 ago an intimate house meeting for a couple of 17 hours with Congresswomen Nydia Velazq uez, Donna 18 Edwards who sits on the Transportation 19 Committee, and later Nanc y Pelosi. The topics 20 of conversation were WO SBs, contracting and the 21 future landscape. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 203

My comments abou t the Department of 1 Transportation during this meeting were very 2 positive. 3 Some time before that I took part in 4 a Senate roundtable that was called by Senator 5 Landrieu from Louisi ana. It involved 6 government agencies that were making their goals 7 in women-owned small busi ness contracting and 8 those that were fa iling miserably. 9 One of which was the Department of 10 Energy who failed two yea rs in a row with less 11 than one percent contracting to women-owned and 12 diversity businesses. 13 When you look at the Department of 14 Transportation in compari son with a lot of the 15 other agencies, it's a real shining beacon. And 16 you need to be commende d for that, to o, for the 17 efforts that you put forth. 18 The DBE, what the Department of 19 Transportation do es with DBEs and the results 20 that they garner in gr owing small di sadvantaged 21 businesses is much to be admired. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 204

In an effort to tr y and bring value 1 to the Department of T ransportation as the small 2 business liaison for the U.S. W omen's Chamber of 3 Commerce as I travel the country on business, I 4 make it a point to mee t not only with the 5 representatives from the Department of 6 Transportation, but also the prime contractors 7 and the DBEs and ta lk with all of them to try and 8 garner their feedback of what they're seeing and 9 what they're doing. 10 And one of the things that I have 11 been noticing is that in the past month, whatever 12 you're doing is really energi zing in the field. 13 There is quite a bi t of a difference. 14

I noticed that especially in talking 15 with the members who are on the front lines with 16 the Department of Transportation, I believe that 17 you've been doing some additional training, 18 you've really tightened up on things and I've 19 been able to firsthand be a part of some of the 20 things that you have be en doing such as the 21 Southern Transportation Civil Rights Symposium. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 205

So, I think that - and the mere fact 1 that you are here today listening to all of us 2 trying to improve the la ndscape in the program, 3 I think that that deserv es apprecia tion. So, 4 thank you. 5 MS. VACCAREL LA: Thank you. 6 Bob Ashby. 7 MR. ASHBY: Just as a point of 8 information, the proposal as I unde rstand it 9 applies to standard low bid IFB contracts, not 10 negotiated procurements like you get for a lot 11 of mega projects. So, the issue doesn't really 12 arise there. 13 With the possible exception of 14 something Amy Hall just said, I have n't heard a 15 word from the prime cont ractor orga nizations 16 that bid shopping is a pr oblem, a bad idea. In 17 fact, it seems like a pre tty good way of cutting 18 costs. 19 I'd like to hear suggestions, and I 20 think Amy was looking for this, about if we don't 21 go in the direction that the proposal does in an 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 206

attempt to deal with bid shopping, what 1 direction do we go in? What alternative is 2 there to deal with so mething that I think 3 genuinely is regard ed as a problem? 4 And the other thing is if there are 5 costs involving good fai th efforts in terms of 6 reporting information to the states, somebody is 7 going to have to incur those costs sooner or 8 later anyway. 9 Timing the submission later doesn't 10 avoid all the co sts. It simply avoids the 11 opportunity for bid shopping. 12 I heard a complaint about that 13 people don't listen. I think oftentimes people 14 do listen. They consider things on the merits 15 and they justifiably say "no." That's not quite 16 the same thing as not listening. 17 And finally when we hear expressions 18 of sympathy and support for the objectives of the 19 program, consider the source. I tend 20 personally to be a litt le skeptical of such 21 expressions from people who have repeatedly sued 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 207

to kill the program, you know, and I think that's 1 something to think about. 2 MS. VACCAREL LA: Thank you. 3 Dwayne Sampson. 4 MR. SAMPSON: Good afternoon again. 5 Dwayne Sampson, preside nt/CEO, Tran sportation 6 Diversity Council. 7 Throughout today my comments have 8 been represented by my members across the 9 country. And those include recipient agencies, 10 primes and DBEs. 11 I asked this pan el to look to your 12 mission, to sear ch your consciou s and then go to 13 the DOT audits for guidan ce and purpose as you 14 move forward in making your final decision. 15 I'll add now that there are no 16 specific quantifiable co sts associated with 17 requiring good faith effo rts document ation when 18 bids are due. 19 Contractors argue that submitting 20 DBE information at the time of bid is cost 21 prohibitive, because they need time to clarify 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 208

quantities, etce tera, etcetera. 1 However, post poning submission of 2 DBE documentation creates an enviro nment where 3 bid shopping occurs and DBEs are subject to the 4 demands of prime contracto rs if they want to be 5 selected for work. 6 We fully suppor t DOT's efforts to 7 clarify what actually constitutes good faith 8 efforts. 9 It is important to note that good 10 faith efforts only come in to play on projects 11 that are considered ra ce conscious, that they 12 have establishe d DBE goals set. 13 And in closing, two of the main goals 14 of the DBE program is to level the playing field 15 and to remove both real and perceived burdens on 16 which these firms can fairly compete for 17 purchasing and co ntracting dollars. 18 I can tell you that my members that 19 are DBEs, they are suf fering. And how we go 20 about leveling the playi ng field as you move to 21 make your decision would be very helpful. Thank 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 209

you. 1 MS. VACCAREL LA: Thank you. 2 Ram Tirumala. 3 MR. TIRUMALA: Ra m Tirumala from 4 Distinct Engineering Solu tions. Now, I want to 5 share some of my personal experiences from the 6 current DBE program and how I think some of these 7 requirements should be there. 8 For example, when we were bidding on 9 the Tappan Zee Brid ge, we spent - as a DBE, we 10

were prequalified based on the qualifications of 11 our staff first. 12 So, when somebody says we are not 13 qualified, I think th at is wrong. We are 14 getting our DBE certific ation because of our 15 qualifications. 16 Then, we worked quite hard along 17 with the proposers. D uring the last minute, we 18 were not given any ch ance to pa rticipate. 19 In a contract li ke that, we have 20 spent three mont hs that increase our overhead 21 which affected us in future projects. Because 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 210

of the high overhead, no body wanted to use us 1 later on. 2 So, to me, ha d the particular 3 contract mandated inclu ding the name of the 4 contractor, a DBE firm, we would have a better 5 opportunity to work on the project and it will 6 help us to recover some of the overhead expenses 7 we have incurred. 8 Now, it is important in most of the 9 jobs that we have worked so far in New Jersey/New 10 York area with large firms, so me of them are 11 here, we have helped in the preparation of the 12 cost estimation. 13 After they esti mate, they want to 14 find somebody else who is cheaper than us, which 15 is unfair. 16 I think from that angle they should 17 have the concept of including the names 18 identifying it as a part of the bi d. Thank you. 19 MS. VACCAREL LA: Thank you. 20 Naomi Glean. 21 MS. GLEAN: Good afternoon. I'm 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 211

Naomi Glean. I'm the MWDBE liaison from John P. 1 Picone, Incorporated, an d I'm coming here to 2 give a little real-life perspective to the topic 3 in terms of we're looking at DBE subcontractors 4 and we're looking at DO T, but most likely DBE 5 subcontractors are ce rtified with other 6 agencies. They' re bidding on many projects for 7 different agenci es all at the same time. 8 There's also time restraints that go 9 along with contracts. Th ere are some contracts 10 that are out for bid for a year and you've been 11 working on - as a prime contractor, we're working 12 on the bids for a year. We have lots of time to 13 sit down and talk to a su bcontractor and find 14 everybody. 15 There are some contracts that we 16 work on for a mo nth, for two week s, for one week, 17 and the last minute we think we can pull this 18 together, we can do this. 19 So, if you're making one regulation, 20 that's going to apply to everything. So, you 21 have to take everythi ng into co nsideration. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 212

I also don't want - sorry. Last 1 point. I also don't wa nt us to minimize the 2 power of the DBE. 3 I am an attorney and I feel that 4 having a subcontract draw n up, thrown together 5 without meaningful dis cussion, with out knowing 6 - price is not the onl y thing that's in a 7 subcontract. 8 You have insuranc e regulations that 9 can be negotiated. You have scope of work that 10 can be negotiated. You have materi als that you 11 need to - that they need to go over. 12 You shouldn't al so be - the prime 13 contractor shouldn't also be bullying the DBE to 14 sign a subcontract because the bid is coming up. 15 Thank you. 16 MS. VACCAREL LA: Thank you. 17 Kenneth Canty. 18 MR. CANTY: Good afternoon. Kenneth 19 Canty, Charleston, Sout h Carolina, Freeland 20 Construction Company. 21 Just to address really quickly the 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 213

comment about hav ing the DBE on - a commitment 1 to the DBE before the bid is due, a lot of these 2 jobs coming out design bu ild, we don't even know 3 what the job is except build a bridge across a 4 river and it's got to be this high by this long. 5 You can't really commit resources or 6 commit numbers to that until you - after the job 7 is committed. 8 That being said, the solution, and 9 we all want to come up and offer solutions, 10 there's a saying I have. I have my version of 11 the Golden Rule. Be as close to the goal. You 12 have to be a prime. Y ou have to be on that prime 13 contracting team. 14 I look at this board right here and 15 that's what - this is what this is about is 16 creating wealth, creating jobs in our community. 17 What would go a long way is just 18 encouraging, mandating however it needs to be on 19 jobs, let's say, north of $50 million, some 20 number, some number that makes sense on these 21 large jobs that us USD OT when we're putting 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 214

federal funds in, we wi ll look favorably on a 1 team whether it be Sk anska, whether it be 2 Dragados, whether it be E.E. Cruz, that has a 3 qualified DBE on that prime team and we're 4 signing it on the team. 5 You can't bid sh op that guy away. 6 I've been on those teams with Skansk a. I've 7 been on those te ams with Turner. 8 You try to push them off. Hey, I was 9 in the presenta tion with you. Where do you 10 think I'm going? I'm close to th e gold now. 11 I'm getting - I'm gett ing those additional 12 profits now beca use of that. 13 I think that's something you guys 14 can do to help solve th is problem. Thank you. 15 MS. VACCARELLA : Thank you. 16 Kima Norflet. 17 MS. NORFLET: Kima Norflet of Norflet 18 Strategies and Soluti ons. I'm based in 19 Arlington, Virginia. 20 My company prim arily help s certify 21 new small and em erging busine sses with DBEs, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 215

CBEs. So, I work with VDOT, MDOT and I cover 1 D.C., Maryland and Virginia. 2 What I was notici ng, I'll piggyback 3 on the young lady that was up here, when the 4 companies are submitting their bids, I agree 5 there are subcontract agreements that have to go 6 into place and they can't be shabby. 7 Also, I've talked to defense 8 individuals an d they say they put their 9 contracts after the fact. They don' always 10 close the deal s beforehand. 11 So, if they are putting the bids in 12 at the same time, thos e deals aren't getting 13 closed until after. S o, that's a problem, too. 14 Some of the old information from 15 earlier I wanted to just comment on. There are 16 certain agencies that are certifying the 17 companies and we were talki ng about compliance 18 and how people can ge t rid of the fraud. 19 What I've noticed in submitting the 20 bids - not the bids, but the certific ations for 21 companies, because I' ve covered various 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 216

industries, is that depen ding on - I'm going to 1 talk to this region - whe ther it's MWAA, VDOT, 2 MDOT, DDOT, any of those companies depending 3 who's certifying, what I'm notici ng is there's 4 a difference in the qua lity of the work being 5 done and the time factor and how that's being 6 done as well. 7 So, I don't kn ow who's tracking 8 that, but perhaps you co uld track your agencies 9 who you are using to cert ify and see who's doing 10 the better jobs. That co uld help the problem as 11 well. 12 MS. VACCAREL LA: Thank you. 13 Rich Juliano. 14 MR. JULIANO: Thanks. I'm hesitant 15 to engage with some ve ry skilled legal counsel 16 and advocates on this issues. Particularly 17 those who are now unfe ttered by their past 18 positions and c an share what ap parently were 19 their true opinions on all this, but let me 20 mention a couple of things. 21 Alternative procurement has been 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 217

mentioned a number of t imes and it's very 1 relevant. There needs to be a discus sion about 2 how all this plays into that. 3 Federal Highway Administration has 4 an Everyday Counts Progr am promoting the use of 5 alternative procuremen t for good reason. How 6 does that work with the DBE program? 7 There are complexi ties to that that 8 we're starting to run in to and there are some 9 important cases al ong those lines. 10 As far as sta tes that currently 11 require submission s at the time of bid, that in 12 itself, the fact that it 's happening is not a 13 justification to make it nationwide, but I would 14 note that there are some states, Ill inois in 15 particular is a good exam ple where they changed 16 their state law a couple years ago. They used 17 to not require i t. They now do. 18 There have been a number of 19 repercussions wi th that. The Illinois Road and 20 Transportation Build ers Association has 21 information. They have su bmitted comments. I 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 218

believe they're going to submit more comments 1 this month and I would ur ge you to take a look 2 at the before and afte r there. Th ank you. 3 MS. VACCARELLA: Marcela Alcantar. 4 MS. ALCANTAR: Just wanted to add 5 that pretty much all the conversation so far we 6 have had is relate d to construction. 7 When it comes do wn to setting teams 8 for professional services like, an example, the 9 Columbia Crossing, $173 million is spent on 10 environmental assessme nt. And pr obably not 11 even one percent mi nority in there. 12 And when I ask fo r opportunities in 13 there, they tell me, wel l, we're in the planning 14 phases or prelimin ary engineering. 15 And I says, well, that's what I do. 16 Well, wait for t he construction. Wait for the 17 construction. So, 173 million late r and we're 18 still waiting for the construction. 19 Which as a small DBE, my portion part 20 as a professional servic es in the construction 21 is minimum compared to $1 73 million in a project 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 219

that still hasn't come. 1 So, one thing to think about it is 2 that for professional services, there is no such 3 thing as give me a lo w bid or give me your 4 qualifications. 5 Because when it comes down to 6 qualifications, these are qualific ations of 7 their friends in long-term relationships that we 8 can't build with professi onal services. Thank 9 you. 10 MS. VACCAREL LA: Thank you. 11 Does anybody else have any comments? 12 MS. ESTER: Toya Ester, J&B Steel. I 13 just want to reiterate the fact what Rich had 14 said that Illinois does - has changed their law 15 and they do require the contractors to - 16 subcontractors to be submitted along with 17 Indiana. 18 But to go back to the state of 19 Illinois, we had to deal with a contractor in the 20 state of Illinois that basically, you know, no 21 one holds 10 percent re tainage on, you know, 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 220

subcontractors or contractors an ymore, but that 1 same contractor who list ed us held retainage. 2 They didn't call it retainage, but 3 they made us sign a cont ract to keep that job 4 holding more than 10 perc ent of our money until 5 the project was over. 6 So, there is ways that they're 7 coming across with different items to still kind 8 of stronghold people or subcontracto rs. Thank 9 you. 10 MS. VACCARELLA: Anyone else have any 11 comments? Only if you speak at t he microphone. 12 MR. HANNER: My name is Jerry Hanner. 13

I wanted to comment when she said that about them 14 holding their retainage. 15 We really go t to look at these 16 contractors. Some of them, the TDOT may pay 17 them, sometimes they go as long as 90 days before 18 they get back to us. 19 There's no reaso n for us to be 20 funding jobs like that. We, you know, we don't 21 have that strong arm. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 221

This is one issue that needs to 1 really be addres sed. I've seen a lot of my good 2 friends go under because of this. Because if 3 your line of credit is not strong enough to carry 4 you out there and they know that, and then once 5 they hold the money out th ere, then you run into 6 trouble, you c an't staff, you can't get to the 7 job site, then they wa nt to pull the contract. 8 So, these are some of the things that 9 need to be addressed. And, like I said, we've 10 gone to contract complian ce and asked for it. 11 We talked to them about that. 12 I just visited our deputy 13 commissioner and we sa id we got to have some 14 things done, but it seems to be falling on deaf 15

ears. 16 And my thing is, is that I'm a little 17 passionate about it, beca use, like I said, it's 18 something I've been invol ved in now for about 20 19 years. 20 And for some reason or another, 21 these things are not hard to fix. And we keep 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 222

telling them over and ov er and over that this is 1

- this is some of the games that they're playing. 2 And these contrac tors that coming 3 in, we just had to tell a contractor not too long 4 ago and said, we won't p ay a retainage, because 5 the state's not ho lding it on yo u and these are 6 some of the things that need to be addressed. 7 Thank you. 8 MS. VACCARELLA: Thank you. Okay. 9 Last call for comments. 10 (No response.) 11 MS. VACCARELLA: Okay. That ends 12

our formal listening session today. I'd like to 13 turn it over to Jo Anne Robinson at the Office 14 of General Counsel for closing remarks and thank 15 you very much. 16 MS. ROBINSON: Yeah , I would like to 17 on behalf of t he Department and as well as the 18 members of our panel, thank you all very much for 19 the time you've taken today to jo in us for this 20 listening session. You 've provided us very 21 valuable information. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 223

For those of you who are 1 participating th rough the web co nference, we 2 appreciate your ti me and effort as well. It has 3 been time very well spent. 4 Just a couple of reminders before we 5 end the day and I know many of yo u already are 6 aware of the fact that ou r docket is going to 7 remain open until December 26. So, we encourage 8 every one of you that was here today, as well as 9 those who are pa rticipating virtually to take 10 advantage of that opportunity. 11 Give us as many comments as you'd 12 like based on what you've heard today, based on 13 what's already in the doc ket, or based on your 14 reassessment, if applic able, of the proposed 15 rule changes in light of what you have heard here 16 today. 17 We also are going to submit in the 18 docket a transcription of this session, all the 19 comments that were received today, as well as the 20 comments that we have received th rough the chat 21 rooms. And I'm hoping that we've received many. 22NEAL R. GROSS COURT REPORTERS AND TRANSCRIBERS 1323 RHODE ISLAND AVE., N.W. (202) 234-4433 WASHINGTON, D.C. 20005-3701 www.nealrgross.com 224

It's been a very productive session 1 for all of us. And so, again I thank you for your 2 participation, yo ur time and your energy, your 3 comments. 4 Strongly enco urage you to take 5 advantage of the extra ti me, but the transcript 6 we expect will li kely be put in to the docket 7 within a week or so. 8 So, I would, again, for those of you 9 who are interested in looki ng at it and even for 10 those of you who know othe rs who were unable to 11 attend for any number of reasons, but remain 12 interested in givi ng us their feedback, I would 13 invite you to let them know that the docket will 14 be - the transcript will be in the docket and take 15 full advantage of the oppor tunity to l ook at it. 16 So, again, thank you all very, very 17 much and safe travels fo r those of you who are 18 going back to other parts of the country. 19 (Whereupon, at 3:31 o'clock p.m. the 20 meeting was concluded.) 21

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