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 UNITED STATES DEPARTMENT OF TRANSPORTATION 

 + + + + + 

 DISADVANTAGED BUSINESS ENTERPRISE 

 (DBE) PROGRAM 

 NOTICE OF PROPOSED RULEMAKING 

 + + + + + 

 LISTENING SESSION 

 + + + + + 

 THURSDAY 

 DECEMBER 5, 2013 

 + + + + + 

 The Listening Session met in the 

Robert S. Marx Media Center, U.S. Department of 

Transportation, 1200 New Jersey Avenue, S.E., 

Washington, D.C., at 11:30 a.m., Carmela 

Vaccarella, Facilitator, presiding. 

DEPARTMENT STAFF: 

KATHRYN B. THOMSON, Acting General Counsel 

WILBUR BARHAM, FAA Office of Civil Rights 

LINDA FORD, FTA Office of Civil Rights 

MAMIE MALLORY, FAA Office of Civil Rights 

NICHOLE McWHORTER, FHWA Office of Civil 

 Rights 

MARC PENTINO, Departmental Office of Civil 

 Rights 

JO ANNE ROBINSON, Office of the General 

 Counsel 

LEONARDO SAN ROMAN, Office of Small and 

 Disadvantaged Business Utilization 

WARREN WHITLOCK, FHWA Office of Civil Rights 
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SPEAKERS: 

MARCELA ALCANTAR, Diversified Builders and 

 Engineers Council 

ROBERT ASHBY 

RENEE BANKS, G.W. Peoples Contracting Co., 

 Inc. 

KENNETH CANTY, Freeland Construction Company, 

 Inc. 

JIM CRUM, Associated General Contractors of 

 America 

JEFFREY CRUZ, E.E. Cruz & Company, Inc. 

TOYA ESTER, J&B Steel Erectors, Inc. 

FELICE FARBER, New York Road and 

 Infrastructure Improvement Association 

CHARLES GIBBS, Georgia United Truckers 

 Association, Inc. 

NAOMI GLEAN, John P. Picone 

AMY HALL, Ebony Construction 

JERRY HANNER, JM Hanner Construction 

BRAD HUBBERT, RA Smith 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, General Contractors 

 Association of New York 

MEG RIETSCHLIN, Rietschlin Construction Inc. 

DWAYNE SAMPSON, Transportation Diversity 

 Council 

LESLIE SAUNDERS, Leslie Saunders Insurance 

 Agency, Inc. 

SARAH von der LIPPE, Law Office of Sarah von 

 der Lippe 

SUSAN WENDT, Wendt Productions, Inc. 
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 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: Carmela Vaccarella, 

Facilitator ............................... 9 

Speakers on Topic No. 1: 

 Joann Payne ......................... 16 

 Kenneth Canty ....................... 20 

 Leslie Saunders ..................... 25 

 Sarah von der Lippe ................. 30 

Rebuttal or Comments 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 Comments from Audience on Topic No. 

2/Open Chat Rooms .................... 107 

Recess ................................... 119 
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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 Comments from Audience on Topic No. 

3/Open Chat Rooms ................... 208 

Closing Remarks .......................... 232 
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1 P-R-O-C-E-E-D-I-N-G-S 

2 11:31 a.m. 

3 MS. THOMSON: Good morning, 

4 everyone. Thank you for joining us today at the 

5 Department of Transportation, this listening 

6 session on our DBE Notice of Proposed 

7 Rulemaking. 

8 My name is Katie Thomson and I have 

9 the privilege of serving as the acting general 

10 counsel here at the Department. But on behalf 

11 of Secretary Foxx and the entire DOT Leadership 

12 Team, I want you to know how pleased we are to 

13 have you here today and to have the opportunity 

14 to receive your valuable input on our 

15 DBE-proposed rule. 

16 The Department as a whole is deeply 

17 committed to our DBE programs and the goal of 

18 combating discrimination and its continuing 

19 effects by ensuring that small, disadvantaged 

20 businesses are provided the opportunity to 

21 fairly compete for federally-assisted highway, 

22 transit and airport contracts. 
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1 Secretary Foxx and Deputy Secretary 

2 Porcari have made it clear to all of us that the 

3 DBE programs are vitally important to the 

4 Department and to our stakeholders, and have 

5 stressed that we all must do everything in our 

6 power to ensure that the programs are strong, 

7 robust and effective. 

8 Stakeholder input like we will 

9 receive today, is essential to achieving that 

10 objective. 

11 The Office of General Counsel is 

12 proud to play a key role, leadership role in DBE 

13 programs throughout the Department. We have 

14 played this role since the program's beginnings 

15 in 1980. 

16 The General Counsel's Office has 

17 with the cooperation and collaboration of 

18 Federal Highways, Federal Transit and the FAA, 

19 Departmental Office of Civil Rights and the 

20 Office of Small and Disadvantaged Business 

21 Utilization, been instrumental in developing 

22 policy and in writing DBE program regulations, 
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1 official guidance and interpretation that 

2 represent the official view and position of the 

3 Department. 

4 As you can see from the rulemaking 

5 activity over the past couple of years, the 

6 Department is committed to continue its 

7 improvement in the implementation and oversight 

8 of our DBE programs. 

9 Today's meeting is just one 

10 manifestation of that and you'll see more in the 

11 coming months. 

12 Given the nationwide reach of the 

13 DBE programs and the thousands of DOT recipients 

14 charged with the responsibility of 

15 administering the program, stakeholder 

16 involvement is, and will continue to be, a key 

17 component in our ability to realize one of the 

18 principal goals of the program -- expending at 

19 least 10 percent nationally of 

20 federally-assisted contract dollars through 

21 DBEs. 

22 In the comments on the pending NPRM, 
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1 various commenters expressed interest in the 

2 Department holding a public meeting on the 

3 proposed changes before we issue a final rule. 

4 We heard you, and Secretary Foxx in 

5 particular heard you. We are interested in 

6 listening carefully to any concerns or comments 

7 our various stakeholders may have about the 

8 program improvements, and our programs benefit 

9 from your involvement. 

10 The entire DOT team looks forward to 

11 continuing to work with our colleagues inside 

12 the Department, our state and local partners, 

13 and with our DBE and non-DBE stakeholders to 

14 continue to achieve and improve upon success in 

15 this program. 

16 We expect to have a productive 

17 session today and I want to thank you all in 

18 advance for your contributions. 

19 I also hope you don't mind, but given 

20 the high level of departmental interest on these 

21 issues, several of our department's senior 

22 leaders including Polly Trottenberg, our Under 
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1 Secretary for Policy, may drop in at various 

2 points throughout today's session to listen in. 

3 So, thank you again for your 

4 attendance. Thank you for your willingness to 

5 participate. I look forward to the discussion 

6 today. 

7 MS. VACCARELLA: Okay, good morning. 

8 My name is Carmela Vaccarella and I'll be the 

9 facilitator for today's session. I'd like to 

10 get some basic housekeeping details out of the 

11 way first. 

12 Restrooms are located immediately 

13 outside of this conference area through the 

14 glass doors. Turn to your left. There's 

15 another set of glass doors and then both the 

16 men's and the women's restrooms are on the left, 

17 okay? 

18 It's a secure facility as you all 

19 realize. You went through security coming in 

20 here. So, visitors are required to be escorted 

21 throughout the building when you leave the 

22 immediate conference center area. 
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1 That does not include the restrooms, 

2 okay? But if you leave for any reason to go 

3 outside of the building to go to Starbucks or 

4 someplace else, you will have to go back through 

5 security and be escorted back to this area. 

6 All right. There is no eating or 

7 drinking permitted in the media center 

8 auditorium, but you can have something to drink 

9 outside the doors right out here. 

10 There's another large session in the 

11 atrium area, but there's a walkway right there 

12 that you can have something to eat or drink. 

13 So, now I'd like to introduce the DOT 

14 panel and briefly go over the structure of the 

15 meeting and the procedures we'll be using for 

16 today's session. 

17 The information is also outlined in 

18 the agenda that you were given when you walked 

19 in and signed into the conference session. 

20 So, as I briefly say the panel 

21 members' names, if you could just raise your 

22 hand? 
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1 Jo Anne Robinson from the Office of 

2 General Counsel. Marc Pentino, Department of 

3 Office of Civil Rights. Leonardo San Roman, 

4 Office of Small and Disadvantaged Business 

5 Utilization. Warren Whitlock, FHWA Office of 

6 Civil Rights. Linda Ford, FTA Office of Civil 

7 Rights. And Mamie Mallory, FAA Office of Civil 

8 Rights. All right. So, these are our panel 

9 members. 

10 Today's session will be structured 

11 around listening to your comments relative to 

12 the three specific aspects of the DBE Notice of 

13 Proposed Rulemaking. Each topic will be 

14 addressed separately. 

15 Each participant who submitted a 

16 request to speak relative to a topic area will 

17 be given five minutes to provide their comments. 

18 You will come up to the microphone 

19 set up in the middle. It's a little different 

20 from the agenda that you were given ahead of time 

21 for that purpose. 

22 If a speaker is not present when I 
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1 call your name, we will skip to the next person 

2 in the list. And then when we get to the end of 

3 the list, I will go back and recall that name, 

4 okay? 

5 Speakers, if you would, preface your 

6 comments with your name and the organization 

7 that you represent. And I want to let everybody 

8 know a transcript of all comments received 

9 during the session will be placed in the docket 

10 before the comment period closed on December 26 

11 of this year. 

12 Again, the session is structured to 

13 maximize the opportunity to listen to the public 

14 concerns on specific aspects of the proposed 

15 changes. 

16 Therefore, members of the panel may 

17 ask clarifying questions of the speaker if 

18 necessary. 

19 There will not be a 

20 question-and-answer period during this session 

21 where speakers are asked questions of the panel, 

22 however. So, it's maximized to get your input. 
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1 At the end of each session, topic 

2 session by the speakers that are the formal 

3 speakers, members of the audience, that includes 

4 listeners and speakers, will be given an 

5 opportunity to comment in response to views or 

6 information provided, okay? 

7 If you wish to take advantage of this 

8 opportunity, you were given three cards that 

9 were attached to your agenda. 

10 Use the cards. Green for Topic 1, 

11 blue for Topic 2, and pink for Topic 3. Just put 

12 your name and organization represented on the 

13 card, hold it up. 

14 We'll have my co-facilitators who 

15 will be in the aisles to pick up those cards, 

16 okay? So, all you need to do is hand them up and 

17 they'll pick them up. 

18 We will take people who request to 

19 do those comments during the open period. We'll 

20 try to get them in the order that they were 

21 submitted to people. And we'll take them in 

22 groups of five. And I will call the names. 
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1 Again, line up by the microphone in 

2 the center of the room. Comments will be 

3 limited to one minute per speaker, okay? 

4 For web participants, and we have 

5 quite a few people listening through the web, the 

6 chat rooms on the web will be open for the 

7 comments during the rebuttal period only. 

8 Comments should start with your name, 

9 organization and the topic reference. 

10 If you are responding to a commenter 

11 in the room, if you can please reference that 

12 commenter, that would be helpful also. 

13 The Department will not respond to 

14 questions posed through the chat room, but all 

15 comments submitted through the chat room will be 

16 placed on the NPRM docket. 

17 Lastly, before we begin the formal 

18 session, I would like to remind everybody that 

19 the comment period for the DBE NPRM is extended 

20 to December 26 of this year. 

21 You may submit comments by going to 

22 www.regulations.gov. Follow the online 
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1 instructions that you'll see there. 

2 You can also submit them by mail, 

3 hand deliver or by fax and see the Federal 

4 Register Notice at 78 FR 68016. 

5 Are there any questions before we 

6 start? 

7 (No response.) 

8 MS. VACCARELLA: Okay. Let's get 

9 started. We'll go to the first topic area which 

10 is, what are the specific quantifiable costs and 

11 benefits associated with completing or 

12 reviewing the proposed forms; PNW, 

13 Certification Application, Uniform Reports, DBE 

14 Payment Data from the perspective of a 

15 certifying entity, an applicant firm or 

16 recipient where applicable? 

17 Frank Cara. 

18 (No response.) 

19 MS. VACCARELLA: Joann Payne. 

20 (Discussion off the record.) 

21 MS. PAYNE: Okay. Well, first of 

22 all, where is Bob Ashby? I can't believe I'm the 
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1 first one up, but I am. So, here I go. 

2 All right. Thank you, first of all, 

3 for allowing me to be here. I am Joann Payne and 

4 I represent Women First National Legislative 

5 Committee. I represent those women DBEs 

6 certified in the Disadvantaged Business 

7 Enterprise Program. 

8 And when I say I represent them, I 

9 represent them here on the Hill as well as 

10 hopefully sometimes here at USDOT. And in some 

11 instances throughout my 20 some years, 30 years 

12 almost working on this issue, I have visited an 

13 awful lot of states. 

14 So, I have - especially when we have 

15 DBE hearings. So - or certification hearings. 

16 So, anyway, so I have a long - very long history 

17 of this program. 

18 In reviewing the proposed documents 

19 that are stated in Category Number 1, I have 

20 found issues of grave concern. However, the 

21 total Notice of Proposed Rulemaking has caused 

22 me heartburn. 
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1 If I may, I would like to say that 

2 instead of making such discriminatory changes in 

3 the Notice of Proposed Rulemaking, the 

4 Department, which I have a lot of respect for, 

5 honestly, Federal Highway Administration and 

6 the recipients should take a long look in the 

7 mirror and make necessary changes in how they 

8 administer and implement the DBE program. 

9 I would estimate from the complaints 

10 I have received from women and minorities in most 

11 states, that the personnel in those states and 

12 the Federal Highway Administrator in that 

13 particular state or region are not trained 

14 and/or qualified to implement the DBE rules as 

15 written. 

16 And I must say that I believe that 

17 personally those who try to implement the 

18 program on the state level come with their own 

19 set of assumptions of their own. 

20 It appears from the proposed 

21 changes, it is the DBE that is being punished for 

22 the lack of competency on the part of federal 
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1 highways and the recipients. 

2 I have 11 letters that I would like 

3 to present as examples of the discrimination 

4 against women and actions and examples of 

5 incompetencies on the state level. 

6 Women First is concerned about the 

7 following proposed changes: Add the equity in a 

8 DBE's home to count towards the personal net 

9 worth, adding a second component to an 

10 individual's presumption of disadvantage 

11 rebuttal, request for spouse's personal net 

12 worth statement even if the spouse is not 

13 involved in the DBE firm. 

14 Now, if the spouse is involved in the 

15 firm, it's legitimate. You should ask for it, 

16 but not if the spouse is not involved in the firm. 

17 Also, obviously we're concerned 

18 about the IG report suggesting that the DBE 

19 program should be - use several aspects of the 

20 SPA's 8(a) program. It has recommended term 

21 limits on participation in the DBE program. 

22 I am hoping and praying that those 
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1 who are writing our rules and regulations do not 

2 do that. This would destroy the program, in my 

3 estimation. 

4 I believe that the Department of 

5 Transportation and the Administration have lost 

6 sight of the real purpose of the DBE program. 

7 The purpose of the program is to 

8 level the playing field for women and 

9 minority-owned firms. 

10 All DBE firms face discrimination 

11 every day even if they are successful firms. 

12 Statistics show once a DBE firm graduates or is 

13 decertified out of the program, within two years 

14 they lose up to 50 percent or more of their 

15 federally-funded highway projects. 

16 The DBE program is not an 8(a) 

17 program where prime contracts are set aside for 

18 qualified 8(a) firms. The DBE program is a 

19 subcontracting goal-setting economic 

20 development program based on competition 

21 amongst small, medium and large construction 

22 firms. 
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1 Actually, I believe that our program 

2 works more closely related to SBA small business 

3 program, and I would suspect no one would suggest 

4 term limits for that particular program. Thank 

5 you. 

6 MS. VACCARELLA: Okay. Sharon 

7 Maxwell. 

8 (No response.) 

9 MS. VACCARELLA: Sharon Maxwell. 

10 (No response.) 

11 MS. VACCARELLA: Kenneth Canty. 

12 MR. CANTY: Good morning, everybody. 

13 My name is Kenneth Canty, Freeland Construction 

14 Company with offices in Charleston, South 

15 Carolina, Maryland, Savannah, Georgia and soon 

16 to be New England. 

17 My comments surround the 

18 application and certification process, as well 

19 as the program itself and improvements that 

20 definitely need to be made. 

21 We have 50 states, as everybody 

22 knows, in the United States. There are 50 
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1 different forms. Filling out the forms is quite 

2 burdensome. 

3 We're an 8(a)-certified company. 

4 We're South Carolina DOT. We got Massachusetts 

5 DOT. We've worked on Kentucky. Kentucky's 

6 been in the state of preapproval for nine months. 

7 And Maryland, we've got our application in to 

8 Maryland. 

9 We're almost forced to - it's like 

10 there's a barrier of entry in doing the forms. 

11 If you do one, you would think it would be 

12 identical to everybody, right? They're all the 

13 same. It's called a unified certification 

14 program. 

15 You hear my frustration, because 

16 it's costing me hundreds of thousands of dollars 

17 to get the stuff in. 

18 Due to the complexity of the forms 

19 and the sensitive information, tax returns, 

20 personal net worth, social security numbers, 

21 you've got to have a specific person in the 

22 organization who does it. 
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1 That person can't be just some 

2 person off the street. I've tried it with 

3 interns. That doesn't work. Actually, my 

4 executive assistant handles that. 

5 I actually had to hire an executive 

6 assistant at $45,000 a year plus benefits to do 

7 the forms. Still with that, it's almost 

8 impossible to do it. 

9 My proposal would be this: You guys 

10 really probably need - unlike the last comments 

11 I heard, we're members of the 8(a) program. I 

12 think it's a phenomenal program. I like the 

13 fact that it's got term limits, because you're 

14 supposed to not be a DBE after a certain point. 

15 Your DBE program almost, for lack of 

16 a better word, keeps you being a subcontractor 

17 for your entire life. 

18 You fill out the applications. 

19 Let's say you get certified in three or four 

20 different states. You get certified in those 

21 states. You go and do work. 

22 Well, the contracts are - almost net 
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1 themselves where you can't be a prime. You 

2 can't be a prime to - you can't be a prime to the 

3 government. 

4 I understand we do a lot of work with 

5 Dragados. Dragados will be making comments 

6 later. We do work with some of the other primes, 

7 but the program is almost designed - the program 

8 is almost designed where you're always going to 

9 be there. You're never going to be - there's 

10 never a threshold to pass that bar of net worth 

11 and no longer be a DBE. 

12 Going back to the applications - 

13 going back to the applications, if you submit 50 

14 applications, you get 50 different answers. 

15 I would submit to you guys that - and 

16 I'll put Maryland on the spot right now. I've 

17 submitted Maryland. Maryland asked for the 

18 South - they said, give us your South Carolina 

19 package. Gave them the exact package, because 

20 we're certified in South Carolina. 

21 They come back with a response that 

22 says, no, you need to give us the whole 
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1 application all over again and then we're going 

2 to start all over again. 

3 So, you FedEx it to them and they get 

4 it, and then you go into that nine-month queue. 

5 Meanwhile, there are projects going 

6 out worth billions and billions of dollars that 

7 you're waiting in line for. 

8 It's almost like when you put in for 

9 these projects if they know there's something - 

10 you're coming in from out of state and there's 

11 something you're going for, it's almost like 

12 you're held up purposely when you go into 

13 different states. 

14 I've seen it in Kentucky. I've seen 

15 it in Maryland. Didn't see it in Massachusetts 

16 so much. That's been one of the more 

17 streamlined states. 

18 With that, I'll yield the floor. 

19 Thank you. 

20 MS. VACCARELLA: Thank you. 

21 Michael Berry. 

22 (No response.) 
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1 MS. VACCARELLA: Michael Berry. 

2 (No response.) 

3 MS. VACCARELLA: Leslie Saunders. 

4 MS. SAUNDERS: Good morning. I'm 

5 Leslie Saunders. President of Leslie Saunders 

6 Insurance Agency, and I am certified as a DBE and 

7 ACDBE in all 50 states, most of which have a 

8 unified certification. And I'll agree with the 

9 previous comments. It's anything but unified. 

10 And to quantify the costs associated 

11 with maintaining these certifications, I will 

12 tell you that everything Kenneth said is 

13 correct. 

14 I have two full-time very senior 

15 employees who complete the financial parts and 

16 the basic work on the applications with my 

17 involvement. 

18 You can't just have anybody doing 

19 it. You have to have a secure place to keep the 

20 information. 

21 We have filing cabinets full of 

22 information. Some of our files are, you know, 
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1 can go from the floor to the top of the chair. 

2 And, again, we've been certified since 1994 

3 known to most people in most of the states. We 

4 participate in industry associations. We 

5 attend conferences. 

6 Our own UCP at the Tampa Airport does 

7 an excellent job. And I'm so proud of the 

8 outreach that they've been making for the new 

9 construction of the Tampa Airport. It's 

10 amazing. 

11 And the way they have explained 

12 their program and encouraged people to 

13 participate in the program is great, but every 

14 state is not like my home state. 

15 It makes me wonder why my documents 

16 couldn't reside at my home UCP and be available 

17 for any other state that wanted them. 

18 They could request a digitized copy 

19 of my site visit, which was recorded. They 

20 could request to go into a secure server and see 

21 whatever documents they wanted, but why am I 

22 still having to make paper copies of my tax 
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1 returns and every schedule and my corporate 

2 returns and every piece of paper associated with 

3 my business? 

4 And you're going to find this maybe 

5 surprising, but I even have to send copies of an 

6 old SBA loan check repayment from my first 

7 company that was formed in 1980 to show the funds 

8 that formed my company that those funds were my 

9 own. 

10 And I signed for that SBA loan myself 

11 even though the woman who was in charge of the 

12 SBA office in Tampa said, oh, dear, you won't get 

13 this loan if your husband doesn't co-sign. 

14 And I said, well, let's just see, 

15 because this is my business and it's my money and 

16 I think I can pay the SBA back. And I insisted 

17 and I did get the $10,000 SBA loan. And 

18 fortunately, somehow and for some reason before 

19 I was ever certified, kept those canceled 

20 checks. 

21 If I didn't have those, maybe I 

22 wouldn't have even been eligible to be certified 
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1 in the first place even though it was clear to 

2 all that my business was mine, was started with 

3 my own funds and I'm the hundred percent owner. 

4 Now, one of the things that Kenneth 

5 said I don't really agree with. I oftentimes 

6 bid as a prime on projects and I think that's 

7 going to come about more and more. 

8 And I'm very fortunate in the 

9 transportation space in which I operate that 

10 there are opportunities for me in other parts of 

11 the country aside from Florida, which is why I 

12 have all the certifications. 

13 But I would say now I'm at well over 

14 a hundred thousand dollars a year in staff, and 

15 probably another $25,000 in paper, in mailing, 

16 in FedExing and resending and in accounting 

17 costs. And I wonder why that's necessary when 

18 clearly I have demonstrated that I meet the 

19 requirements and my home state maintains such 

20 good files. 

21 Why can't the other UCPs just visit 

22 those files and then recertify or continue my 
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1 certification on an annual basis? Thank you for 

2 having this listening day. 

3 MS. VACCARELLA: Sarah von der Lippe. 

4 MS. VON DER LIPPE: Hi. I'm actually 

5 Sarah von der Lippe. For those of you who 

6 thought I might be here under an assumed name 

7 today, it's really me. 

8 I want to start off by saying thank 

9 you for having this listening session. This is 

10 really important. And I know that a lot of us 

11 here in this room who read the NPRM and did our 

12 work in trying to submit comments asked you to 

13 do this and we really appreciate that 

14 responsiveness. I think I speak for everybody 

15 in saying that. 

16 And I also want to say that I don't 

17 know everybody here today, but I know a lot of 

18 you. And I know for sure that the intent of the 

19 people who work on this program is good. 

20 I know that whether they're at USDOT 

21 or in the states at the recipients or they're 

22 MBEs or they're primes - or they're DBEs or 
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1 they're primes, that the intent around this 

2 program is where it's supposed to be. 

3 The problem that we're having is 

4 getting to the rules and regulations that allow 

5 the program to operate the way that it should. 

6 And one of the most important things I want to 

7 say to you today is that we need to remember what 

8 this program is for. 

9 This program was started to remedy 

10 discrimination. Real, tangible, documented, 

11 up-the-wazoo discrimination that was brought to 

12 the attention of Congress and to this agency and 

13 was the reason for this program. 

14 The intention was to ensure that 

15 women and people of color who had businesses and 

16 wanted to participate in government 

17 contracting, in federal transportation 

18 contracting, could have a playing field in which 

19 they would actually be able to do that. 

20 I really believe that if you back up 

21 with the NPRM and ask yourself line by line, 

22 question by question, change by change does this 
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1 NPRM get us closer to, or farther from the 

2 original goal of eliminating discrimination, 

3 you will be halfway there. 

4 I submitted comments to the record 

5 along with the Leadership Conference for Civil 

6 Rights, I'm the contact person on those, and a 

7 whole list of organizations from the civil 

8 rights side of issues. 

9 And I'm not going to read through all 

10 those today, because you have them and you don't 

11 need to hear that from me again, but I would say 

12 that it probably is a moment where we need to stop 

13 and do a teeny bit of sort of common sense 

14 question asking of ourselves. 

15 I would challenge everybody in this 

16 room, not just the panelists, but all of us to 

17 read that asset section of the PNW form, the 

18 current form. I'm not even talking about any 

19 new requirements. 

20 It requires that you provide 

21 present-day value for everything you own and 

22 list it. And it explicitly says that that 
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1 includes household goods and clothing. 

2 So, while you're trying to figure 

3 out which appraiser you should call to assess 

4 your socks, think about the implications for a 

5 small business, because that's in the rule as it 

6 stands today. 

7 Our goal has to be to step back and 

8 figure out not how do we add more data 

9 requirements into this form, but how do we reduce 

10 the burden the form currently imposes. 

11 And I'm here to say I will help in 

12 whatever way I can in that process, but we've got 

13 to back up and realize that when we're asking for 

14 so much more information than the IRS ever asks 

15 us for, we've put ourselves in as an additional 

16 barrier in this system instead of removing 

17 barriers in the system. 

18 Finally, something that I - I didn't 

19 know the gentleman who spoke before today, but 

20 I appreciated your comments. And Joann and 

21 Leslie I know and have worked with before. I'm 

22 an example of another sort. 
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1 I am not a certified DBE. I have 

2 never been a certified DBE. I am a sole 

3 practitioner constitutional lawyer. 

4 I can't afford if I want to give 

5 governments - I only represent governments and 

6 I give those governments a rate that is far below 

7 the rate that I would be paid as a market attorney 

8 in constitutional law. 

9 I can't afford to do that and hire 

10 executive assistants that make me - that would 

11 allow me to produce these certifications, and I 

12 have worked all over the country. 

13 Now, someone - some people in the 

14 room might say, well, wait a minute. As a solo 

15 practitioner, what the heck are you doing here 

16 anyway, because you can't do government 

17 contracts, right? You're not big enough. 

18 And the grins from some of my 

19 colleagues in the room are because I've 

20 represented this department and I've 

21 represented the FAA, and I think I did an 

22 excellent job for both clients. 
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1 I know that as a solo practitioner 

2 I provided value and excellent legal advice to 

3 those entities, but I literally have never been 

4 able to afford to be certified and I'd like to 

5 be. 

6 I'd like you to be able to count me 

7 in your numbers. I think I did good work and God 

8 knows I'm way below all the PNW levels. Thank 

9 you so much. 

10 MS. VACCARELLA: Thank you. 

11 Frank Cara. 

12 (No response.) 

13 MS. VACCARELLA: Frank Cara. 

14 (No response.) 

15 MS. VACCARELLA: Sharon Maxwell. 

16 (No response.) 

17 MS. VACCARELLA: Michael Berry. 

18 (No response.) 

19 MS. VACCARELLA: Okay. Anybody in 

20 the room want to submit the comments? 

21 (No response.) 

22 MS. VACCARELLA: I would like to 
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1 thank the speakers for this area. We are now 

2 going to go into the rebuttal/comment period. 

3 The chat room will be open for comments for 15 

4 minutes. 

5 Member of the audience, if you want 

6 to comment, please hold up the card and we'll 

7 take them and you can get in line right now. 

8 Marcela Alcantar. 

9 MS. ALCANTAR: Can you hear me? 

10 MS. VACCARELLA: Yes. 

11 MS. ALCANTAR: My name is Marcela 

12 Alcantar. I'm the president and CEO, 

13 Diversified Builders and Engineers Council. 

14 I'm also a small business engineering firm, 

15 professional services. 

16 And the reasons we got formed as a 

17 group is because the Hispanic community, we feel 

18 that we haven't been heard in regards to comments 

19 particular to when it comes onto disparity 

20 studies. 

21 We got formed specifically to review 

22 your forms. And the forms we have found out that 
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1 the reason we, the Hispanic community and the 

2 other minorities got overutilized, is because 

3 two individuals in each - one or two individuals 

4 in each minority group oversize or grew the whole 

5 entire program. Just one or two individuals. 

6 That doesn't represent the intent of 

7 the program, fulfilling the requirement with one 

8 individual. 

9 We went a step further and 

10 identified that that individual that kicked us 

11 out of the program, per se, was an individual 

12 that bid on no bid. It was not a bid that was 

13 based on DBE requirements, but a low bid. 

14 And also what we're finding out that 

15 now that there is race conscious goals, that 

16 individuals that could be successfully primes 

17 are bidding as the subconsultants, which 

18 basically - and these are successful 8(a) 

19 individuals that easily can be primes. 

20 So, what's happening now is that 

21 large DBEs are eating up the small DBEs just as 

22 stated on your USDOT audit. 
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1 So, in reviewing this form now 

2 currently after two DBE disparity studies, now 

3 we find out that we're the largest available 

4 group, but we're the lowest being utilized. 

5 In other words, now substantially 

6 overutilized, but we can't get resolution in 

7 another disparity study to continue our next 

8 level of resolution in this issue. Thanks. 

9 MS. VACCARELLA: Thank you. 

10 Brad Hubbert. 

11 MR. HUBBERT: Thank you, madam chair. 

12 One of the comments I would like to make in regard 

13 to it is that in the program, I think that there 

14 should be a limit to the DBE program. 

15 And the reason I say that is because 

16 in my experience, is that the abuse and misuse 

17 and fraud is perpetrated by both DBE 

18 contractors, prime contractors, and in some 

19 cases those who are expected to administer the 

20 program. 

21 Another point I would like to make 

22 is that I understand the need for certification, 
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1 okay, but we want to make sure that the folks that 

2 are in the program is duly deserving of being in 

3 the program. 

4 Like some of the other speakers 

5 before me, I think we have lost the real intent 

6 of the program. 

7 I was here on the Hill when the 

8 program was - at its inception of an MBE WBE 

9 program working with then Congressman Mitchell 

10 to try and get it passed. 

11 It has evolved from the MBE WBE 

12 program to a DBE program, which is all inclusive 

13 and all - 90 percent of our population based on 

14 that definition is eligible to be in the program. 

15 And the sad part about it is, is that 

16 the DBE program is only 10 percent. So, if you 

17 calculate all the folks that are eligible for the 

18 program, you will find that the program should 

19 definitely be more than 10 percent. 

20 In my estimation, the program should 

21 be in the neighborhood of 60 to 65 percent, 

22 because all the population of folks that's in the 
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1 program that can qualify for the program will 

2 constitute about 80 to 90 percent of our 

3 population. 

4 And I guess you would say, well, how 

5 do you arrive at that conclusion? With every 

6 DBE program, anyone that's qualified is social 

7 and economically disadvantaged as in the program 

8 whether he white, black, green, red or yellow or 

9 whatever. 

10 Anyone that is of a minority ethnic 

11 group if they qualify under that scenario, is 

12 eligible for the program. 

13 All the Asians, Native Americans, 

14 white females, and we have added to the program 

15 disabled veterans as part of the program now to 

16 a degree. 

17 So, if you look at all those 

18 categories of folks that is in the program and 

19 then you say, well, 10 percent of the dollars 

20 that the federal government spends should go to 

21 this group, then where are the rest of the 90 

22 percent going? Somebody needs to tell me that, 
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1 okay? 

2 So, I think we need to look at the 

3 program as the young lady said, and look at the 

4 real intent of the program. And then tailor the 

5 program so we're doing a good job of 

6 certification, you know. 

7 In Georgia, we got about 2,000 folks 

8 DBE certified, okay? Well, now, if you go down 

9 that list and see how many of those DBEs are doing 

10 some work, you will find a small percentage. 

11 Probably less than two percent. Two percent of 

12 the dollars that goes to Georgia is done within 

13 the DBE program. 

14 So, that's a disgrace in my opinion. 

15 So, I'm on the list. So, I stated that for me. 

16 I do appreciate the opportunity to speak. 

17 MS. VACCARELLA: All right. Charles 

18 Gibbs. 

19 MR. GIBBS: Hi. Good morning. I 

20 just want to say thanks for the opportunity. I 

21 am here representing the truckers. I'm the 

22 president of Georgia United Truckers 
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1 Association. 

2 And the problem that we have, the 

3 major problem that we have is with rates, you 

4 know. We don't believe we are being paid a fair 

5 amount. 

6 A typical trucker, he's being paid 

7 between 60, $65 an hour. Now, with the cost of 

8 fuel going up, it's impossible for us to continue 

9 to be working at such low rates. I think the 

10 rate should be at least a hundred dollars an 

11 hour. 

12 A lot of times the way how things are 

13 set, the truckers, we are being pit against each 

14 other, you know. 

15 So, I like for the program to be set 

16 up in such a way where we're paid a fair wage, 

17 you know. That's the concern of most of my 

18 colleagues. 

19 Like I said, I'll be short and spicy. 

20 So, if you can work on that, that would be great. 

21 Thank you. 

22 MS. VACCARELLA: Okay. Thank you. 
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1 Dwayne Sampson. And I'd remind 

2 people to speak up in the microphone so that 

3 everyone can hear. 

4 MR. SAMPSON: Thank you. Good 

5 morning. My name is Dwayne Sampson, President 

6 and CEO of Transportation Diversity Council. 

7 And addressing Topic Number 1, what 

8 are the specific quantifiable costs and benefits 

9 associated with completing and review of 

10 proposed forms, the specific quantifiable costs 

11 associated with completing or reviewing the 

12 proposed form with each new applicant firm is the 

13 time allotted to a full-time equivalent staff 

14 person to review the documentation. 

15 The concern with the new information 

16 related to certification is that in order to 

17 accurately assess the information, 

18 certification staff will have to be certified 

19 public accountants. 

20 The cost to a small agency could be 

21 significant if that particular level of detailed 

22 review is required to review the company 
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1 evaluations, quarterly earnings reports, 

2 property assessments, etcetera. 

3 Certification staff will have to 

4 have strong accounting and finance backgrounds. 

5 As it stands, compliance offices which typically 

6 house certification activities are 

7 understaffed. 

8 Requiring this level of review is 

9 unreasonable and anticipating that it will be 

10 done correctly is unrealistic. 

11 The regulations currently state 

12 that additional information may be required to 

13 complete the certification process. This 

14 accommodates the need to conduct in-depth 

15 reviews. Thank you. 

16 MS. VACCARELLA: Thank you. 

17 Kenneth Canty. 

18 MR. CANTY: Good morning, again. 

19 We've talked about a lot of problems. I have as 

20 well talked about that. 

21 I'd like to talk about maybe a 

22 possible solution that you guys have in your 
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1 regs, and a lot of certifying agencies do. It's 

2 just not being implemented. 

3 We talked about the DBE program in 

4 some - in my estimation, and I'll submit to 

5 everybody in here I'm a construction contractor. 

6 I don't have a law firm or an accounting firm. 

7 So, my viewpoint may be a little bit different. 

8 In construction, a lot of the jobs, 

9 the big jobs, maybe 50 million, a hundred million 

10 north of that, my experience on a personal level, 

11 I was on the Artery Project in Boston, the Long 

12 Island Expressway in New York, the Ravenel and 

13 the deconstruction of the bridges in Charleston. 

14 So, I've got a - been on a lot of different jobs. 

15 Got a company, went forward, wanted 

16 to be a prime contractor and that was my 

17 viewpoint. Utilized my engineering degree and 

18 all my experience to not be a DBE anymore. 

19 The one thing we have found and we 

20 have them approved, Small Business 

21 Administration mentor/protégé with Dragados USA 

22 and we had a lot of - it was hard to get that. 
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1 And one of the reasons I think it was 

2 really hard to get that was you don't have a lot 

3 of DBEs - well, let me rephrase that. 

4 There aren't a lot of DBEs who have 

5 the - there are a lot of DBEs who have the role 

6 and wish to be prime contractors, but there's not 

7 the way. 

8 The mentor/protégé program is 

9 probably one of the best ways, because you team 

10 with a large firm or a firm. And these firms on 

11 these jobs to be a mentor, they're going to be 

12 large firms. They're not going to be 10, $20 

13 million companies. They're going to be - am I 

14 - 

15 MS. VACCARELLA: Well, that's the 

16 minute, but - 

17 MR. CANTY: Okay. I'll just close 

18 out by saying that you guys do have a 

19 mentor/protégé program within your regs. I 

20 understand it's a trial program. I believe you 

21 should implement that across all 50 states and 

22 put that in as requirements on jobs, on large 
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1 jobs to increase DBE utilization. Thank you. 

2 MS. VACCARELLA: Thank you. 

3 Jerry Hanner. 

4 MR. HANNER: Thank you. My name is 

5 Jerry Hanner with JM Hanner Construction out of 

6 Chattanooga. 

7 MS. VACCARELLA: Can you speak 

8 louder, sir? 

9 MR. HANNER: Okay. My name is Jerry 

10 Hanner. I'm with JM Hanner Construction 

11 Company out of Chattanooga. 

12 I want to comment just briefly on 

13 just what the gentleman said. You know, it was 

14 - when we talk about the DBE program, initially 

15 it's something that President Johnson said that 

16 you don't take a person that's been hobbled by 

17 chains for years and then release them and put 

18 them at the starting block and tell him he's 

19 ready to compete with everybody and think you've 

20 been fair. 

21 I like that statement, because what 

22 he's saying is there's got to be mentoring. 
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1 We keep running into situations 

2 where we don't have enough - we're not trained 

3 enough - enough trained people to compete. So, 

4 you know, part of the program as far as the 

5 certification, I think, should be is that we 

6 should have it where we are looking to develop 

7 some companies and not always holding them to the 

8 mark as to where they are at that moment. 

9 So, I just want to say that because, 

10 you know, it's no reason for us to even have the 

11 program especially from the black viewpoint with 

12 all the blacks and our history of all the years 

13 that we've been deprived. It's even foolish to 

14 think about developing the program and blacks 

15 taking advantage of it without some kind of 

16 mentoring program. 

17 MS. VACCARELLA: Thank you. 

18 Is there anybody in the room that 

19 would like to speak? 

20 MS. PAYNE: May I say something? 

21 MS. VACCARELLA: Yes. 

22 MS. PAYNE: First of all, I just 
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1 wanted to say that I love the 8(a) program. I'm 

2 so not against the 8(a) program, but I don't 

3 think it applies to our program, to the DBE 

4 program. That would be number one. 

5 Secondly, I just wanted to say that 

6 from the statistics that I have read, 95 percent 

7 of the majority, majority, I'm talking about 

8 majority-owned companies, obviously white males 

9 I'm referring to, subcontractors today were 

10 subcontractors when this program started. 

11 All right. So, the point of this 

12 is, is that, yes, there are those who would like 

13 to be prime contractors. There's no doubt about 

14 that. 

15 But even the majority 

16 subcontractors that actually do highway 

17 construction work, they started out as 

18 subcontractors. They are today still 

19 subcontractors. 

20 Hopefully their companies have 

21 evolved and grown and their receipts have grown, 

22 but they have chosen to stay subcontractors. 
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1 And that is over 95 percent. 

2 So, I mean, not everybody wants to 

3 become a prime contractor. This is a 

4 subcontracting program. So, I just wanted to 

5 remind everybody of that. 

6 MS. VACCARELLA: Thank you. 

7 Anybody else would like to speak? 

8 MS. ALCANTAR: Yes. Just a brief 

9 comment in regards to the prime and sub in small 

10 business DBEs, is that consider the NAICS code. 

11 Because sometimes if he's a bridge contractor 

12 that is able to do prime work versus a landscape 

13 person that does mowing lawns, there's a huge 

14 difference when calculating percentage of 

15 availability. Thanks. 

16 MS. VACCARELLA: Thank you. 

17 Sir, please state your name, please. 

18 MR. GIBBS: Yes, my name is Charles 

19 Gibbs. Again, as I said, I'm the president of 

20 Georgia United Truckers Association. I also 

21 have my own business, DPG and Associates. 

22 I own a small hauling company, you 
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1 know, dump trucks mainly. And I think having 

2 this meeting here today if we could - I encourage 

3 the mentoring of small companies where you could 

4 have like a training facility, you know. 

5 Because, you know, so many of us truckers, you 

6 know, we don't have the time to attend when 

7 there's workshops, you know. 

8 We're just too busy just trying to, 

9 you know, hold it together, but there is a 

10 serious need. There is a serious need for 

11 training. 

12 And, like I said, that's one of the 

13 reasons why I formed this trucking association 

14 where we could, you know, try and get people more 

15 involved. 

16 I'm going to be going back to my 

17 members to let them know what's going on, 

18 because, you know, it's hard. It is 

19 ridiculously hard on - most of us are 

20 subcontractors, you know. We'd love to have the 

21 opportunity to become primes, but, you know, 

22 it's just difficult, you know. 
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1 So many of my colleagues, you know, 

2 they lost their homes, they lost their trucks, 

3 they lost their wives because the cost of living, 

4 you know, since 2008, it's been a major fight 

5 just trying to hold it together. 

6 I don't know what you guys can do, 

7 but we need some help out here. 

8 MS. VACCARELLA: Thank you very much. 

9 The 15 minutes are up. The chat room is now 

10 closed. 

11 (Discussion off the record.) 

12 MS. VACCARELLA: Okay. So, I've 

13 been told we can take a ten-minute break. So, 

14 we'll break right now for 10 minutes. We'll 

15 come back at 12:00 o'clock. 

16 (Whereupon, the proceedings went 

17 off the record at 11:52 a.m. for a brief recess 

18 and went back on the record at 12:03 p.m.) 

19 MS. VACCARELLA: Please be seated. 

20 We'd like to get started again. 

21 (Pause in the proceedings.) 

22 MS. VACCARELLA: All right. Topic 
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1 Number 2. What are the specific quantifiable 

2 costs and benefits associated with requiring 

3 certified DBEs to submit additional documents 

4 with the annual no-change affidavit from the 

5 perspective of a certifying entity and a 

6 certified DBE? 

7 Speakers for this topic, Earl H. 

8 Jenkins. 

9 DR. JENKINS: Good afternoon. I am 

10 Dr. Earl Jenkins and I'm here on behalf of 

11 Gregory Jenifer, President and CEO of Armand 

12 Resource Group, Incorporated, who could not be 

13 present due to a scheduling conflict. However, 

14 he sends his apologies and requests that I 

15 present his prepared remarks today. 

16 We are discussing submission of 

17 documents required to continue certification or 

18 to recertify a firm as DBE eligible. 

19 The premise should be that the 

20 original certification documentation or 

21 determination rendered was complete and that the 

22 investigation was conducted in a thorough manner 
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1 consistent with USDOT requirements by properly 

2 trained certifying personnel. 

3 As such, the review process should 

4 only address those issues that may have changed 

5 during the prior period or which may impact a 

6 firm's eligibility, i.e., change in ownership, 

7 personal net worth, relocation of the firm, 

8 additional skill sets or a changed NAICS code. 

9 Requiring the DBE business owner to 

10 submit any additional documentation or 

11 requiring agency personnel to review this 

12 documentation which may not even be required to 

13 render a determination of continuing 

14 eligibility, has an associated cost. 

15 Collection, submission, subsequent 

16 review at a minimum, involve the expense of time. 

17 Time has become a precious commodity 

18 for DBEs. Especially DBEs with average gross 

19 receipts barely enough to sustain a workforce 

20 larger than 10 or fewer employees. 

21 If you are a small business owner and 

22 you desire to pursue business opportunities in 
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1 multi states, you are forced to comply with the 

2 additional submission requirements and local 

3 registrations within each jurisdiction. 

4 If you have multiple renewal dates, 

5 the small business owner spends time once again 

6 collecting, submitting and responding to 

7 requests sometimes frivolous for renewal 

8 information generally on multiple dates 

9 throughout the year. 

10 If you are larger, possibly your 

11 firm may have more complex issues or items to 

12 address. 

13 Then there are documents that get 

14 delayed that require time to compile. Again, 

15 time is the issue especially if the documents 

16 requested are routine in nature. 

17 In theory, the benefit to a small 

18 business navigating its way through the 

19 certification renewal process is that it sees 

20 the process as an opportunity to update critical 

21 information about its capabilities that ideally 

22 should make the firm more attractive to primes 
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1 for subcontracting opportunities or to the 

2 transportation agency for a direct procurement 

3 opportunity. 

4 Theoretically, the benefit is that 

5 once again the firm has proven its continuing 

6 eligibility. The ultimate reward for enduring 

7 this process is that the firm will one day win 

8 a contract or subcontract or be issued a purchase 

9 order to supply some materials or equipment. 

10 The reality is that the prime 

11 contractor or consultant does not do business 

12 with a list from a directory. They do business 

13 with the businesses they own. They do business 

14 over and over again with the same certified 

15 established businesses. 

16 From this perspective of the DBE, 

17 the cost does really vary per firm and the pain 

18 of collecting and submitting renewal documents 

19 can best be measured in time. 

20 The reality is that if the renewing 

21 firm were to receive a contract, the costs would 

22 be inconsequential. 
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1 The certification departments of 

2 several agencies are understaffed and 

3 certification processing staff are called upon 

4 to perform collateral civil rights duties in 

5 addition to processing certification 

6 applications. 

7 How long it takes to process a 

8 certification application depends on the 

9 experience and training of the certification 

10 officer. 

11 Frankly speaking, certification 

12 specialists with proper training and practical 

13 experience are becoming an extinct commodity and 

14 it depends on a great degree of the agency 

15 performing the certification. 

16 Agency personnel have to balance the 

17 cost and benefits associated with requiring 

18 additional supporting documentation from DBEs 

19 which are vital to making a reasonable 

20 determination that more likely than not the 

21 applicant, or in this case the certified firm, 

22 continues to be eligible to participate in a DBE 
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1 program. 

2 From an agency perspective, an 

3 important factor to the timely completion of the 

4 certification process is the willingness and 

5 cooperation of the business owner. 

6 If a business owner completes the 

7 certification application properly, submits 

8 information requested in a timely manner, 

9 information and documentation that the business 

10 owner should have and makes themselves available 

11 for a site visit if necessary, the application 

12 can be processed in a timely manner. Thank you. 

13 MS. VACCARELLA: Robert Ashby. 

14 MR. ASHBY: Yeah, hi. This really 

15 addresses a combination of the first and second 

16 topics, but I think they fit. 

17 We all know certification requires 

18 a balance between valid program interests of 

19 program integrity and facilitating entry into 

20 the program. 

21 My concern about the NPRM has always 

22 been that it goes kind of too far toward the first 
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1 objective while slighting the second. 

2 The proposed additional 

3 certification forms and requirements, both 

4 initial and continuing, are, in my view, too 

5 onerous and too intrusive. 

6 And the application form expands 

7 from, by my account, from about seven to about 

8 37 pages, including a three-page list of 

9 additional documents. 

10 From a one-page form that we 

11 borrowed from SBA and never formally 

12 incorporated in the rules, now there's a 

13 nine-page PNW statement. 

14 Not necessarily invalid stuff on it, 

15 could be useful in some cases. But in every case 

16 routinely, it seems, to me, a little too much. 

17 Not only applicants, but their 

18 admittedly non-disadvantaged spouses might have 

19 to submit the PNW form under one option despite 

20 the fact that the only purpose of PNW and the 

21 program is to determine whether somebody is 

22 actually disadvantaged economically. 
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1 The Paperwork Reduction Act 

2 estimates of eight hours for the application and 

3 10 for the PNW form strike me as serious 

4 underestimates. I don't think there's much in 

5 the way of empirical support for them. 

6 And while I well know that OMB lets 

7 agencies get away with skyhook numbers, for 

8 NPRMs they're a lot tougher and want more 

9 empirical evidence for final rules. 

10 And I think we actually could 

11 profitably do some studies of how long does it 

12 take somebody, especially a new business owner, 

13 to actually fill out one of these things? Have 

14 we done the fieldwork? 

15 The purpose of the Affidavit of No 

16 Change was explicitly to save people who have 

17 already gone through the certification process 

18 from having to go through what looks like a 

19 repeated certification process. 

20 And it seems to me that greatly 

21 increasing the amount of material that you've 

22 got to submit with the Affidavit of No Change to 
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1 some degree undermines that purpose. 

2 I mean, I've got to admit as a lawyer 

3 who is intimately familiar with the program, I 

4 look at what a business would have to fill out 

5 and I get intimidated. 

6 I mean, it seems to me I didn't have 

7 to fill out this much paperwork to adopt my 

8 daughter. 

9 I can only imagine the effect of all 

10 this and potentially deterring participation by 

11 relatively unsophisticated small business 

12 owners who want to get into the program. 

13 From the point of view of the 

14 certification agencies, you know, we all know 

15 and the previous gentleman made some reference 

16 to this, state and local certification agencies 

17 are chronically understaffed. 

18 Making the staff go through a lot of 

19 additional paperwork on a routine basis for 

20 every firm, will only serve to increase their 

21 backlogs and detract from the efforts they can 

22 put into difficult, more problematic cases. 
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1 My thought is that there is some 

2 merit in going for a much simpler, shorter 

3 application form for initial applicants. 

4 Particularly those below a given size level 

5 whether it's dollars or number of employees or 

6 whatever the criterion might be. My analogy is 

7 the IRS form 1040EZ. 

8 And then this would free 

9 certification staff to make more searching 

10 inquiries into larger firms, those who we talk 

11 about, you know, as the ones who always get the 

12 contracts time after time, firms where 

13 suspicions or complaints have been aroused, you 

14 know, spend the more intensive time if you're a 

15 certification staff on those more difficult 

16 cases by removing some of the burden of going 

17 through a lot of routine paperwork for a lot of 

18 firms who don't really need attention quite that 

19 close. 

20 It would also, by the way, make it 

21 more likely that state and local staff could pull 

22 some of their efforts away from routine 
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1 certification work and into the post-award 

2 monitoring that everybody says is so necessary. 

3 I mean, there's probably - and this 

4 is certainly my experience from testifying in 

5 fraud cases, there's probably more DBE fraud 

6 goes on in post-award contract actions than 

7 probably even go on in certification. 

8 And I think taking some of the burden 

9 away from the paperwork end here would allow us 

10 to realign our priorities in a way that would 

11 benefit the program. 

12 MS. VACCARELLA: Thank you. 

13 Meg Rietschlin. 

14 MS. RIETSCHLIN: Thank you for the 

15 opportunity. I am Meg Rietschlin, President of 

16 Rietschlin Construction, a small contractor 

17 located in North central Ohio in a largely 

18 agricultural rural area. 

19 A longstanding goal or dream has 

20 been to become a highway contractor building 

21 small bridges. 

22 In 2005, I joined the Ohio 
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1 Contractors Association, OCA. At the time, a 

2 couple people thought I should consider applying 

3 to the DBE program. 

4 I would print the forms and their 

5 requirements, study them and then set them 

6 aside. 

7 Rietschlin Construction did not 

8 have the prequalification and work types, the 

9 bonding capacity or the prequalification dollar 

10 limits to successfully bid highway work. 

11 The process looked futile. I 

12 really didn't have the extra time to pull it 

13 together to apply. 

14 I looked at the DBE application 

15 process again in 2008 and 2009. In 2010, I began 

16 participating in DBE committees at the Ohio 

17 Contractors Association. 

18 I started to learn about the DBE 

19 program, research the application process. I 

20 was asked to participate in a stakeholder 

21 meeting at the Ohio Department of 

22 Transportation. 
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1 I began to view the program as a way 

2 to help grow and expand my business and fulfill 

3 a goal. 

4 In June 2011, I took two weekends. 

5 I didn't have cash in the business to pay for a 

6 lawyer or a specialist in DBE application. 

7 On Friday evening I studied the DBE 

8 application forms and info requirements. That 

9 Saturday and Sunday I pulled records from boxes, 

10 files, computer records and assimilated the 

11 info. 

12 The following weekend I was able to 

13 prepare a draft of data to be inputted on paper. 

14 Then I submitted my electronic application. 

15 The application process took 

16 several months and steps. In mid-December 

17 2011, I received my DBE certification. 

18 I have no idea how much time I have 

19 invested in becoming a DBE. It is many 

20 thoughtful hours in addition to my normal work 

21 routine. 

22 Trying to quantify my time is 
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1 difficult. Pulling the data together and 

2 completing the application probably required 44 

3 hours for those two weekends. 

4 Pulling the data together and 

5 completing the annual affidavit requires about 

6 eight hours of my time each year. 

7 Requesting more paperwork from me is 

8 going to cost me twice. The hours pulling 

9 together the information, and the data to report 

10 and the opportunity costs associated with that 

11 time. 

12 If you wish to place the burden of 

13 obtaining appraisals of residents, real estate 

14 and company valuations which are normally 

15 performed upon a decision to liquidate your 

16 assets as part of the additional annual 

17 documentation, those costs will be high. 

18 More costs in administrative 

19 processing just lowers profit, lowers net worth 

20 and my bondability. 

21 A large contractor has departments 

22 and people specialized in each phase of business 
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1 process. 

2 In the case of the small, growing 

3 construction company such as mine, the 

4 responsibilities of all the business 

5 administrative processes fall on one person. 

6 And that's me. 

7 Imagine being the accounting 

8 department, the HR department, the financing 

9 department, the project processing department, 

10 IT, legal, the bid review department and having 

11 to understand all the rules, regulations and 

12 goals involved. 

13 If the goals of the DBE program is 

14 to build small business opportunity in the 

15 highway construction market, I don't see more 

16 complicated rules, regulations and forms as 

17 anything but a hindrance. 

18 And from where I sit, I would just 

19 like to see a suspension of rule writing for a 

20 couple years just so I can catch my breath. 

21 (Laughter.) 

22 MS. RIETSCHLIN: Thank you very much. 
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1 MS. VACCARELLA: Amy Hall. 

2 MS. HALL: First, I want to thank you 

3 for the opportunity to fly to Washington to be 

4 here with you all. This has been a very 

5 important topic for our company, as well as other 

6 companies here. 

7 I am - or I am president of a heavy 

8 highway construction company located in Toledo, 

9 Ohio. 

10 And to be able to answer Topic Number 

11 2, quite frankly, is incredibly difficult to 

12 quantify the amount of dollars that are going to 

13 be associated with producing more documents, 

14 more paperwork, more of this, and the difficulty 

15 lies in the fact that everybody's company is 

16 different. 

17 Our company might be a little 

18 larger. We might have better resources. We 

19 might have better accountants, better attorneys 

20 versus a small company. 

21 I might be in the office more. Some 

22 other people might be in the field more. They 
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1 might have more field duties, as well as like Meg 

2 said, come back into the office and now you 

3 become HR, payroll, IT and all the above. 

4 So, to be able to give you a dollar 

5 figure, it's, quite frankly, impossible, but 

6 what I can tell you is that my concern is 

7 two-part. Not only is it the amount of time 

8 that's going to be associated with producing 

9 additional documentation such as the valuation 

10 of the business, personal equity in my home, so 

11 on and so forth, but what is going to be done with 

12 that information once you all get it. 

13 Our business is in operations to 

14 make money just like everyone's business. We 

15 all are in business to make money. And if we 

16 aren't making money, our bonding capacity is 

17 affected, our ability to purchase equipment and 

18 go to the bank and get a loan is affected, our 

19 ability to have payroll and to meet payroll is 

20 affected, and the list is long. 

21 However, when you compound 

22 providing additional documentation and now 
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1 there's a subjective point in there in which 

2 individuals at the DOT are able to use this 

3 information and subjectively decide whether or 

4 not your personal net worth is over the threshold 

5 or you - not over the threshold. Let me take 

6 that back. That you've accumulated too much net 

7 worth even though you haven't met your personal 

8 net worth threshold, that's hugely significant. 

9 That opens Pandora's Box to disaster 

10 and now we've become something that is 

11 subjective in opinion versus factual 

12 guidelines. 

13 With this result possibly being in 

14 the company's graduation from the program, I can 

15 tell you out of the companies that I know who have 

16 graduated from the program, zero are in business 

17 today. Not one. 

18 And so, what does this look like to 

19 us? If we graduate out of the program because 

20 someone decides I have too big of a net worth even 

21 though I haven't met the thresholds, the result 

22 is you have 60 plus employees who are employed 
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1 by our company today now unemployed. 

2 This year we have contributed 2.7 

3 million dollars in payroll which is stimulating 

4 the economy. And 80 percent of our personnel 

5 live in rural towns outside of the major city of 

6 Toledo that I live in. 

7 So, imagine how $2 million that are 

8 going into sustaining rural economies are going 

9 to negatively impact that local area. 

10 We're dealing with equipment sales. 

11 We're dealing with parts sales. We're dealing 

12 with all kinds of businesses who are associated 

13 with us who will be negatively impacted by the 

14 closure of our business. 

15 And one more quantifiable thing 

16 which is kind of a sidebar, when we were talking 

17 about the UCP application to give you guys an 

18 example of what it looks like to us, we just 

19 submitted our UCP application to Kentucky and it 

20 was 8.10 pounds. Our application was nine 

21 pounds of paperwork. This much paperwork. 

22 We are DBEs in Ohio, in Michigan, in 
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1 Indiana and in Georgia, but yet Kentucky needs 

2 our paperwork again. 

3 So, after being in business for the 

4 amount of time, it's nine pounds of paperwork 

5 that you have to reproduce over and over and over 

6 again. It's the same stuff. 

7 And so, you want to quantify 

8 something? Imagine having how much time it 

9 takes to wrap your arms around taxes, cancelled 

10 checks from 10, 15 years ago, bank records, 

11 equipment purchases and all of these things. 

12 The cost is huge. 

13 I understand that the DOT is 

14 concerned with fraud and trying to prevent 

15 fraud, but what happens in the process is it also 

16 prevents true, viable businesses from being able 

17 to perform what they do. 

18 Let's not lose the focus of what the 

19 program's intent is, is to be able to grow the 

20 capacity of companies without putting them out 

21 of business due to over regulations and more 

22 rules. Thank you. 
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1 MS. VACCARELLA: Frank Cara. 

2 (No response.) 

3 MS. VACCARELLA: Frank Cara. 

4 (No response.) 

5 MS. VACCARELLA: Sharon Maxwell. 

6 (No response.) 

7 MS. VACCARELLA: Sharon Maxwell. 

8 (No response.) 

9 MS. VACCARELLA: Susan Wendt. 

10 MS. WENDT: Hello, and thank you for 

11 holding this listening session. I'm Susan 

12 Wendt from Wendt Productions, a woman-owned 

13 small business. 

14 We work with government and primes 

15 and we provide particularly strategic sourcing 

16 for IT hardware and PPE safety equipment. 

17 Being a woman in business has always 

18 been a challenge. In the `80s, I worked for a 

19 Fortune 100 retail in the corporate office and 

20 I was one of three pairs of high heels amongst 

21 a sea of hundreds of Florsheims and wingtips. 

22 In those days if you were a woman in 
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1 business, you had to work twice as hard as the 

2 males, you had to produce twice as much as they 

3 did and you had to break records. 

4 For those of us who are women, we had 

5 a saying. That's not hard, but at least we told 

6 ourselves that. 

7 In those days, I worked probably 60, 

8 70 hours a week. And I made $15,000 less than 

9 my male counterparts whom I overproduced. 

10 Now, I have graduated over the years 

11 and I have become a woman-owned business owner 

12 of my own. And now, gosh, in the graduation, I 

13 work 70 to 90 hours a week and there are times 

14 I'd like to get a paycheck. 

15 So, as a woman-owned small business, 

16 it's still not a level playing field when it 

17 comes to federal contracting. 

18 30 percent of all of the 

19 privately-held businesses in this country are 

20 owned by women. 

21 However, it's mandated by the 

22 federal government that the federal contract 
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1 should be met by five percent of spending to 

2 women-owned small businesses. They have yet to 

3 meet that goal. 

4 In 2012, it was 3.9 percent. In 

5 2013 through April it was trending 3.37. So, 

6 let's look at some numbers. 

7 Now, do keep in mind that those that 

8 are considered women-owned small businesses 

9 represent all ethnicities. 

10 According to the SBA, at that time 

11 there were 8,085 minority firms certified. 

12 There were 29,769 women-owned small business and 

13 economically disadvantaged women-owned small 

14 businesses. 

15 That means that there were 3.6 times 

16 the number of women-owned small businesses as 

17 there were minority firms certified. 

18 Now, when you talk about obligated 

19 contracts, at that time there were 26,950 

20 obligated contracts to minority firms for a 

21 total of $3.3 billion. For women-owned small 

22 businesses, 303 contracts totaling 9.3 million. 
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1 That means that for every dollar 

2 that a woman-owned small business received in 

3 contracts, federal contracts, 355 times that 

4 number went to minority businesses. 

5 Within the DOT it is heartening to 

6 see - to be a woman-owned small business. 

7 Through the DBE program, women-owned small 

8 businesses have the opportunity to earn 

9 contracts through the DOT and as prime subs. 

10 Because of this, I feel that it is 

11 imperative to preserve the integrity of the 

12 program by providing the tools to the states who 

13 are in the front line of the certification. 

14 And if that means additional forms 

15 and financials are required to renew each year, 

16 so be it. If it preserves the integrity, that's 

17 the most important thing of the program. 

18 The processing costs, let's 

19 actually talk dollars and cents. Because in my 

20 company, what we do is we actually quantify 

21 everything. 

22 We have job numbers for everything 
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1 that we do. We track hours. We track hard 

2 costs and expenses. 

3 For us to be able to renew a DBE - 

4 and, by the way, we're DBE in 16 states with three 

5 applications pending. Also WOSB, WBENC and 

6 some other alphabets as well. And I serve on the 

7 U.S. Women's Chamber of Commerce as the small 

8 business liaison to the Department of 

9 Transportation. 

10 So, to process a renewal for our 

11 company with a state, actually the hard costs run 

12 between anywhere from three to $600 - 300 to $600 

13 each. 

14 That's not that bad considering the 

15 integrity that we're looking for, because let's 

16 look at the benefit side of that now and it asks 

17 for a quantification of the benefit side. 

18 DBEs are required - well, let's put 

19 it this way. You're not going to get business 

20 if you don't do it. 

21 You have to attend matchmaking 

22 sessions, outreach sessions. You have to 
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1 attend contractors meetings. You have to 

2 attend project roll-outs. 

3 Each and every one of these if you 

4 quantify the cost to attend these, is between 

5 $500 to $4,000 depending upon whether or not it's 

6 in a nearby vicinity or if it's out of state. 

7 So, as an example, for the I-4 

8 Ultimate Program in Orlando, I'm already up to 

9 number seven on the number of events that I have 

10 attended for that and what I have invested into 

11 it. 

12 When you are talking about the 

13 benefits, the return on investment, if a DBE - 

14 the most disheartening thing for a DBE to have 

15 is to put in for a contract and find that they 

16 lose to a perennial favorite DBE who perhaps is 

17 not eligible for the program. And that's 

18 probably one of the worst things that can happen. 

19 So, the harm that you can do by 

20 allowing any kind of fraud to continue, is going 

21 to keep those legitimate firms from being able 

22 to move up in the system. Thank you. 
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1 MS. VACCARELLA: Nicholle O'Malley. 

2 (No response.) 

3 MS. VACCARELLA: Nicholle O'Malley. 

4 (No response.) 

5 MS. VACCARELLA: Kenneth Canty. 

6 (No response.) 

7 MS. VACCARELLA: Kenneth Canty. 

8 MR. CANTY: Good afternoon. The 

9 first thing I want to say in addition to the 

10 comments we've heard, but just clarify some of 

11 my earlier comments, I am in no way saying that 

12 this should be if you get to a magical nine years, 

13 you should get tossed out of the program. I'm 

14 not saying that at all. 

15 What I'm saying is, as DBEs we have 

16 to have an exit strategy, and that's part of a 

17 larger conversation. 

18 Are we going to be having this 

19 conversation in 20 years about being DBEs? Are 

20 the demographics of the country going to dictate 

21 that? Probably not. It's changed a lot in 10 

22 years. 
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1 I would submit that in the next, I 

2 would say, probably about 20, 35, 20, 40 what a 

3 DBE is then is not going to be a DBE now, because 

4 a lot of things have changed. 

5 The election of the president has 

6 changed a lot of things. It's changed the 

7 paradigm, but that doesn't mean that things have 

8 gotten better in those communities. So, you've 

9 got to have - you've got to have - in my opinion, 

10 you've got to have a mark for when you cross that 

11 threshold when you're not considered a DBE. 

12 In my viewpoint and as I've 

13 developed my exit strategy for my 20-year plan 

14 that started in 2008, was I needed to be a company 

15 between 30 and $50 million doing work up and down 

16 the East coast at a 10 percent margin before 

17 taxes so I can have enough money that any problem 

18 of being a DBE no matter what class you are, 

19 whether you're a woman, black, Hispanic, Asian 

20 or whatever, that racism that we face, you've 

21 mitigated it by being wealthy. 

22 That's what I always thought the 
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1 program was about. That's my viewpoint, but I 

2 am in no way saying that anybody should be 

3 removed just because they've gotten to a magical 

4 number. I'm just saying you have to have an exit 

5 strategy. 

6 In reference to the annual 

7 affidavit, that's actually one of the easiest 

8 forms. I actually love filling out that form 

9 when it comes in, because, okay, nothing has 

10 changed, here's my tax returns and I'm swearing 

11 that I haven't crossed that cap and I haven't 

12 crossed that $20 million and I have - I have no 

13 problem with that. 

14 I don't think it should be - it 

15 should be complicated anymore, especially with 

16 we've heard - I've heard somebody with 17 DBE 

17 certifications. I commend that. 

18 I'm working on four right now. I've 

19 got four right now and I'm working on three more. 

20 I do believe that, you know, if you 

21 look at the DBE application, it's exactly the 

22 copy of the 8(a) application. It's the exact 
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1 same thing. 

2 Why can't you take my 8(a) and say, 

3 I mean, the SBA already vetted me. The highest 

4 entity for small businesses, the Small Business 

5 Administration, vetted me. So, the USDOT says, 

6 well, you know, we don't trust them. That 

7 doesn't make sense to me. 

8 I'm not saying you shouldn't ask for 

9 some, okay, we want to make sure you're still in 

10 the same office, we want to make sure everything 

11 is the same, but, I mean, doesn't the left hand 

12 trust the right hand in government? 

13 I mean, that's the problem with big 

14 government. We have to - we've got to have some 

15 reciprocality. If you have a driver's license, 

16 my South Carolina driver's license still works 

17 in Massachusetts, because South Carolina has the 

18 same barrier of entry of licenses as 

19 Massachusetts does. 

20 But really the program with all the 

21 forms and everything, I always saw it as a way 

22 to create wealth to solve the problems in our 
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1 community. And that's the one way in America - 

2 this is the only country you can come to where 

3 you can start off - the first gentleman I worked 

4 for at a company that's no longer in existence, 

5 Monta Continental, came here from Italy with $50 

6 in his pocket and that was it. And he was 

7 running a 500 to a billion dollar construction 

8 company in 30 years. 

9 There's nowhere else on the planet 

10 that happens but here. But if he had any 

11 discrimination for whatever reason, he didn't 

12 have any when he was doing 500 million a year. 

13 And if he had any, it was completely 

14 insignificant. 

15 That's the point we're trying to get 

16 to as DBEs. I call it being - the Michael Jordan 

17 of being a construction company. 

18 Yeah, he's an African American. 

19 He's a black man. He goes in the store, he gets 

20 followed. He gets followed by the police, but 

21 he's Michael Jordan. 

22 He's got so much money it doesn't 
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1 make - it almost doesn't make a difference, 

2 because he can choose to live where he wants, he 

3 can choose to send his kids to schools and that 

4 always, to me, was the purpose of being in 

5 business to create wealth, to change your - your 

6 lives of your family, to change the lives of the 

7 people close around you, your employees and let 

8 it trickle down and percolate through the 

9 economy. Thank you. 

10 MS. VACCARELLA: Thank you. 

11 Sharon Arnold. Sharon Arnold is 

12 not here. Toya Ester. 

13 MS. ESTER: Good afternoon. Thank 

14 you for letting us come speak in front of you. 

15 My name is Toya Ester. I'm from Hamilton, Ohio. 

16 I'm the owner and president of J&B Steel 

17 Erectors. We're a specialty subcontractor. 

18 Work for GCs on bridges, thank God, because we've 

19 worked in the private field for prior years and 

20 went out of business several times, came back, 

21 and today been certified for actually 10 years. 

22 It hasn't been an easy road, but we 
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1 employ 80 full-time ironworkers. We are union. 

2 So, it is a very costly business to stay in 

3 business. 

4 I'd like to give you an idea of some 

5 of the paperwork that we go through just to stay 

6 in business and keep our eight employees in our 

7 office keeping the paperwork flowing. And to 

8 add to this paperwork is just part of the 

9 frustration that we find trying to stay in 

10 business we have to go through. 

11 With the staff of eight people in our 

12 office, we are required to handle all the 

13 paperwork requested from our general 

14 contracting clients and all the government 

15 entities per federal, state, county, city and 

16 township requirements. 

17 Some of this paperwork includes 

18 Workmen's Compensation, payroll, certified 

19 payroll reports, union dues, child support, wage 

20 garnishment, employee files, unemployment, 

21 taxes, state, county, city, quarterly, 941s, 

22 940s, estimated, yearly year-end taxes, monthly 
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1 EEO utilization reports, plans, specs, 

2 contracts, drug testing compliance, prevailing 

3 wage report for state and federal, BWC program 

4 reporting, industry-specific safety program, 

5 transitional workplace program, wellness 

6 program, drug-free workplace reporting, 

7 apprenticeship reporting, certification of 

8 employee skill sets, quarterly Bureau of Motor 

9 Vehicle reports on employees. 

10 If they drive your trucks, you've 

11 got to run that every quarter just to make sure 

12 they don't have a bad driving record, because 

13 they sure won't tell you. 

14 So, we invest over $150,000 a year 

15 in training our men. Our men go through a 

16 four-year apprenticeship. When they come out, 

17 they're considered a journeyman ironworker. 

18 You pull them out of the hall, well, 

19 they might know how to place some steel, but they 

20 don't know much how to treat people or do 

21 business. 

22 So, we bring them in, we train them. 
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1 We try to involve the men to what we call a 

2 foreman where they can run a job, two or three 

3 men underneath them. 

4 Then also raise them on up to a truck 

5 foreman, and then go on to a general foreman 

6 where they can possibly run five to 10 men 

7 underneath them. 

8 The bridgework today is scattered so 

9 much that we have to cover a range of 15,000 

10 square miles. We are certified in Ohio, 

11 Kentucky, Indiana and Illinois. 

12 I just had our assistant contact 

13 Ohio, because I sent in my affidavit in February. 

14 Still haven't heard from them. My document 

15 expired last March. They said they're going to 

16 get back - they'll get to it next January and 

17 they'll let us, you know, they'll get to us. 

18 So, the task of us getting the 

19 paperwork to our folks to the states is tough. 

20 And then turning it around and getting it back 

21 to us is becoming more and more difficult, I 

22 find. I've had the same problem with Illinois. 
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1 Indiana seems to be on top of it. 

2 They respond fairly well, but it's never timely. 

3 You're always double-checking on things. It's 

4 just always an issue. 

5 It's like you have to have one person 

6 just keeping an eye on all your certifications, 

7 your renewals, your prequals. Prequal you have 

8 to get an audit if you want to do over $500,000 

9 of work. And that's a 20 to $23,000 investment 

10 to have a CPA firm come in and audit your company. 

11 And I've done that for the last 10 years to be 

12 able to do over $500,000 of work. 

13 Luckily, if you keep your money in 

14 your company, you can get a good 

15 prequalification to be able to bid a 

16 decent-sized job and be able to have bonding and 

17 banking and everything else in this industry 

18 that goes along with it that you need to stay in 

19 business. 

20 We just would like for you to take 

21 into consideration that we work hard and I have 

22 80 men who have 80 families that I don't want to 
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1 see unemployed as the small businessman. 

2 That's what can happen when you make 

3 these rules too tough, because people can only 

4 take so much. Thank you for your time. 

5 MS. VACCARELLA: Leslie Saunders. 

6 MS. SAUNDERS: Leslie Saunders, 

7 Tampa, Florida, Leslie Saunders Insurance. 

8 It was nice to hear from Bob Ashby 

9 who used to be my regular penpal for several 

10 years whenever there was a question on a DBE 

11 application or a state asking for something that 

12 didn't seem to follow the rules. 

13 And so, now, Gene Roth and his crew 

14 are my permanent penpals for these same 

15 questions. 

16 Sadly, I won't be here later in the 

17 afternoon, because I have a flight back to Tampa 

18 for the third part, but to talk about the 

19 quantifiable cost benefits, again, I have to 

20 give you two examples, one being the state of 

21 Maryland and the other being the state of 

22 Washington, for renewal of our documents 
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1 submitting the no-change affidavit. 

2 The state of Maryland insisted that 

3 we file as a corporation. Well, I don't have an 

4 office in Maryland. I'm not a corporation in 

5 Maryland. I have a nonresident insurance 

6 license in Maryland as I do in the 49 other states 

7 where I am a nonresident-licensed agent. 

8 That's my authority to do business 

9 in that state. I can go into that state and work 

10 with any company and provide their insurance. 

11 So, that wasn't good enough for 

12 Maryland and they said that I had to file as a 

13 corporation. 

14 Well, that requires a registered 

15 agent filing as a nonresident corporation, 

16 spending hundreds of dollars, getting your 

17 certificates and then, oh, by the way, there's 

18 a property tax form that has to be filed. 

19 So, your CPA has to file that and pay 

20 a property tax when I don't have any property in 

21 Maryland, because I don't have an office in 

22 Maryland and I don't have a presence there other 
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1 than my certificate, my insurance license and 

2 now this corporation that I have to deal with. 

3 And Washington did the same thing and there are 

4 others. 

5 Washington required us to file the 

6 corporation, which we did. And then because we 

7 didn't generate revenue in Washington, then the 

8 state decertified our corporation, because we 

9 didn't have any revenue. 

10 And this goes round and round and 

11 round and round. And when I talked to Gene about 

12 it, I was under the impression that there's not 

13 supposed to be a rule like that. 

14 If you apply to be certified in that 

15 jurisdiction and you don't have any revenue 

16 generation at the present time in that 

17 jurisdiction, you shouldn't have to do a 

18 pay-to-play and form a corporation there, which 

19 requires a lot of other bureaucracy in addition 

20 to the 50 certifications and renewals. And 

21 those are just two examples. They're not the 

22 only ones. 
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1 This year Tennessee joyfully sent a 

2 letter saying, good news, we've raised the fee 

3 to be a DBE in our state. It's now a $300 filing 

4 fee. 

5 Now, I don't know whether that's 

6 legal or not legal. I haven't had time to call 

7 Gene yet to ask, but I will. 

8 And I don't understand how they can 

9 now be adding these additional fees for services 

10 when it's supposed to be a unified 

11 certification. 

12 So, I go back to my earlier point. 

13 Let's have a home state, let's have a secure 

14 portal, you know. You could do it on a Citrix 

15 platform or an AppRiver platform where it would 

16 be an encrypted file and anyone could get a 

17 password who had authority and get in and look 

18 at that file. 

19 Please, let's stop all the paperwork 

20 and narrow the program, but overall I want to say 

21 you guys do a great job and, you know, I'm happy 

22 to be in the program. 
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1 I would be happier if it were less 

2 complicated. Thank you. 

3 MS. VACCARELLA: Dwayne Sampson. 

4 MR. SAMPSON: Good afternoon. 

5 Again, my name is Dwayne Sampson. As president 

6 and CEO for Transportation Diversity Council, or 

7 TDC, a national 501(c)(3) not-for-profit 

8 organization based in New York City, I welcome 

9 the opportunity to discuss aspects of the Notice 

10 of Proposed Rulemaking entitled "Disadvantaged 

11 Business Enterprise Program Implementation 

12 Modifications" to officials of the U.S. 

13 Department of Transportation, colleagues and 

14 the public today. 

15 TDC was formed in 2010 to meet the 

16 growing need of leaders, educators, technical 

17 professionals and tradeworkers in the 

18 transportation and construction industries. 

19 The subject of my testimony today 

20 will cover Topic 2. The benefits associated 

21 with Topic 2 requiring certified DBEs to submit 

22 additional documents with the annual no-change 
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1 affidavit is minimal. 

2 Essentially, the only benefit would 

3 be in terms of the government agency continuing 

4 to prove its compliance with DBE certification 

5 requirements. 

6 Additionally, if the government 

7 agency suspects that there is an issue with the 

8 DBE certification, the agency has the right that 

9 was established during the certification 

10 process to request additional documents. 

11 Therefore, any additional 

12 requirements to provide information is of 

13 limited value to the requesting agency. 

14 I have surveyed a number of my DBE 

15 members around the country and tried to attach 

16 a cost. And they did provide a range to a cost 

17 in recertifying in each property at 13 to $1400 

18 per application when, in fact, you can use other 

19 vehicles that are similar - that provide similar 

20 information, bond statements and things of that 

21 nature that may be there to provide the necessary 

22 documentation. 
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1 But as others have said today, which 

2 is most critical area to dedicate your 

3 resources, if I can respectfully indicate, is 

4 that the enforcement and compliance of the rules 

5 is really critical to reduce fraud. 

6 So, again, thank you for allowing me 

7 to testify here today. Thank you for your 

8 service. 

9 MS. VACCARELLA: Sarah von der Lippe. 

10 MS. VON DER LIPPE: Thank you. It's 

11 me again, Sarah von der Lippe. I'm the owner and 

12 sole employee of the law offices of Sarah C. von 

13 der Lippe. 

14 Let me say what I should have said 

15 up front lest any of my clients here today are 

16 nervous. I'm speaking for myself today only and 

17 not for any current, former or future clients. 

18 So, this is Sarah's views on things. 

19 I'm going to be the big-picture girl 

20 again if I can. It is clear to me in reading 

21 these regs, I can see it in every word that's 

22 written, that the intent was not only honorable, 
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1 but important. 

2 That is to say that good men and 

3 women in this department are concerned about 

4 ensuring that the benefits of this program are 

5 allocated or available to those who need them the 

6 most. They wanted to make sure that we reduce 

7 fraud in the program, right? 

8 As a civil rights lawyer, as a race 

9 discrimination lawyer, I can tell you there is 

10 nobody who hates fraud, hates fronts, hates 

11 fraudulent DBEs more than honest DBEs. There's 

12 no doubt about it. 

13 It's the scourge over the program to 

14 the extent it exists and we need to do something 

15 about it. 

16 The only question is on who should 

17 the burden fall in order to accomplish the act 

18 of getting the fraudsters out of the program? 

19 And my concern is when I read the 

20 rule and look at the massive amounts of 

21 additional information that we're going to be 

22 asking for from DBEs, it seems to me that a very 
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1 fundamental question wasn't asked and answered, 

2 which is do we really think that by asking every 

3 DBE in the country to give us more paperwork, 

4 that those people who have been lying and 

5 cheating their way through this program all 

6 along are suddenly going to go, oh, maybe I 

7 should give them the right information? Maybe 

8 I should submit a PNW that really says what my 

9 income is and says what my assets are. 

10 Where did that - was that question 

11 ever asked? And if not, could we ask it now? 

12 Because the real concern - the reality is, and 

13 everybody sitting up at this table knows this, 

14 you have the authority under the current rules, 

15 read 26.67, you all know this, you have the 

16 authority to ask for every single one of the 

17 pieces of paper and more that you've put - that 

18 you've added to this rule. 

19 You can ask for it during the 

20 process. Every recipient in the country can ask 

21 for it during the process. 

22 The question is, are we really going 
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1 to ask for it from every honest DBE out there with 

2 somehow the sense that that's going to make 

3 people who are criminals suddenly decide to tell 

4 the truth? 

5 I think it's a legitimate question 

6 and one that we have to consider really, really 

7 carefully. 

8 Now, I'm not being glib. I want to 

9 say that I understand that DOT especially is in 

10 a complicated position here, because you're not 

11 the front line on decertification procedures. 

12 And I understand that one of the 

13 things that happens is that really important 

14 decertification procedures are brought in the 

15 field at the recipient level and they don't ask 

16 for the right information. 

17 Even though they have the authority 

18 to ask for the right information under the rules, 

19 they don't. And by the time the appeal gets to 

20 you, you can't necessarily make the decisions 

21 that you want to make. 

22 The answer to that problem is not to 
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1 ask that every DBE in the country submit phone 

2 books of information. 

3 The answer to that question, 

4 unfortunately, is good old-fashioned training 

5 and guidance. 

6 You all know you have extraordinary 

7 people in this building. And you know in each 

8 of the modes, in the General Counsel's Office, 

9 I mean, one of the things that's most important 

10 about this program, and I think we all know this, 

11 is that this program spans the Department. 

12 And I know we're not talking about 

13 the IG report, but the worst thing about the IG 

14 report was that it somehow suggested we should 

15 silo this program. We should not. 

16 What's great about this program is 

17 it exists in every single department, every 

18 single faction of this department, and that's 

19 the only way that good, affirmative action in 

20 civil rights programs work. 

21 There is someone responsible for 

22 this program in this building, and it's the 
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1 Secretary of Transportation, and that's who 

2 should be responsible for the program. 

3 Likewise, when we look at these 

4 pieces, when we figure out how to do this, we need 

5 the good men and women that you have in this 

6 building to help the recipients to provide the 

7 training, to provide the wealth of your 

8 experience to them so that they can understand 

9 how to better do compliance and how to better do 

10 fraud investigations. 

11 How to go out there and actually 

12 follow up on the whispers that exist in every 

13 community around the country. Thank you very 

14 much. 

15 MS. VACCARELLA: Jerry Hanner. 

16 MR. HANNER: My name is Jerry Hanner. 

17 I'm with the - I'm from Chattanooga, Tennessee 

18 with JM Hanner Construction Company. 

19 You know, when I think about this 

20 subject matter here, I have to deal with it from 

21 the standpoint that I've been involved with the 

22 program for a while and I've seen a lot of things. 
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1 I know the intent of the paperwork 

2 just as it was so well-spoken before, that came 

3 up about trying to sift through and make sure 

4 that we have the right people involved in the 

5 program. 

6 I don't think paperwork will do it. 

7 I say that, because, like I said, I've been 

8 involved quite a while and we've run into a lot 

9 of situations in Tennessee like right now we have 

10 78 percent to 80 percent of all the work goes to 

11 non-DBEs. And most of them at 70 percent go to 

12 white women. Blacks get only about 1.7 percent 

13 of the work. 

14 Well, I'm saying this because there 

15 was always indication that something was wrong 

16 with a lot of the ones that was getting work. 

17 And we took it upon ourselves at different times 

18 to drive around just to look and see some of the 

19 sites. 

20 It's interesting when you drive up 

21 on a site as someone who's been certified as a 

22 DBE and you've got a big sign with their 
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1 husband's name in construction, and a little 

2 sign on the corner with the wife in construction, 

3 and they are one of the leading DBEs. 

4 So, my thing is it won't be paperwork 

5 to change it. I'm totally in agreement with 

6 what was just said, because, you know, the 

7 numbers can always be shifted any way people want 

8 them to be shifted, but what we do need is we need 

9 some hard core people on the front line that will 

10 actually go out and visit these sites and look 

11 at it and be true to what they find. 

12 We have - most of the time it's 

13 interesting, because we have about out of all the 

14 people that's certified, about 15 - 12 to 15 

15 companies that gets the work all the time. 

16 We need to be structured. And 

17 paperwork, just getting and filling out more 

18 paperwork won't change it. 

19 We definitely need some training 

20 programs. I was thinking about on the other 

21 topic, you know, when it comes to the payment, 

22 it's interesting how the DBEs are asked to carry 
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1 the payrolls longer than the prime contractors. 

2 We have some issues that definitely 

3 need to be addressed that would change the 

4 program and make it better, and just adding more 

5 paperwork won't do it. 

6 Now, the paperwork, I understand why 

7 you want to do it, but I guarantee you that that 

8 won't change. 

9 The people that's going to do what 

10 they're going to do, they're going to do it, but 

11 it's something how we can actually - we visited 

12 several sites. We just rode around and looked 

13 at them and the picture was unreal. 

14 So, somewhere there is a void there 

15 with the people that have the responsibility of 

16 making sure these people truly should be on the 

17 program, is dropping the ball there. That's all 

18 I got to say. 

19 MS. VACCARELLA: Frank Cara. 

20 (No response.) 

21 MS. VACCARELLA: Frank Cara. 

22 (No response.) 
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1 MS. VACCARELLA: Sharon Maxwell. 

2 (No response.) 

3 MS. VACCARELLA: Nicholle O'Malley. 

4 (No response.) 

5 MS. VACCARELLA: All right. That's 

6 it for the speakers formally for Topic Number 2. 

7 It's now complete. We'll move into the 

8 comment/rebuttal period. 

9 The chat room is now open. It will 

10 be open for 15 minutes as long as this comment 

11 period exists. 

12 For chat room participants, please 

13 remember all comments should start with your 

14 name, organization and topic reference Number 2. 

15 Also, if you are responding to a 

16 commenter in the session room here, please note 

17 that on your comment, also. 

18 We are collecting the cards, please. 

19 The first speaker will be Marcela Alcantar. 

20 MS. ALCANTAR: Yes, Marcela Alcantar 

21 with the Diversified Builders and Engineers 

22 Council, and Alcantar and Associates. 
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1 MS. VACCARELLA: Thank you. 

2 MS. ALCANTAR: I have to say that the 

3 cost of not reviewing those documents that you 

4 submit, it's the exclusion of the rest of them 

5 - I know it is like it has happened in Oregon - 

6 it is mind-boggling to me to think that if there 

7 is a DBE with 17 state certification or $27 

8 million in payroll, that that would be a barrier. 

9 I will be lucky if I make a million 

10 in one year, and I have to compete with those DBEs 

11 that they have 16 certifications and $27 million 

12 in payroll. 

13 So, indeed, if I have to submit the 

14 same paperwork that those individuals - I'm 

15 speechless. But now the other side of that, 

16 does it mean that those prime DBEs or large DBEs, 

17 they need to be out of the program? Not 

18 necessarily, but there has to be a difference 

19 between a large DBE and a small DBE. It's night 

20 and day. 

21 Having one large DBE submitting 

22 those papers and also to be kicked out of the 
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1 whole program because one DBE fulfilled the 

2 requirement - again, like can happen in Oregon. 

3 One Hispanic happened to be successful, not even 

4 the NAICS code achievement is half of it, and the 

5 entire community is out. I don't get it. Thank 

6 you. 

7 MS. VACCARELLA: Joann Payne. 

8 MS. PAYNE: Joann Payne, Women First. 

9 There is a written statement, I think, maybe in 

10 the rules and there's a perception that Congress 

11 has said something about where the goals of the 

12 DBE program is to basically grow the DBE company 

13 out of the program so they can sustain without 

14 the program. 

15 I submit a question. And the 

16 question would be, how can a DBE subcontracting 

17 highway construction company - this is what I'm 

18 talking about here. We're not talking about 

19 some of the other companies that are a part of 

20 the DBE program. How can they lose their 

21 certification and stay in business? 

22 If you look at the statistics on the 
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1 state level, let's say, all right, you grow your 

2 company, you're out of the DBE program, well, 

3 first of all, within two years you can lose, as 

4 I said, 50 percent or more of your federally 

5 highway construction work. 

6 Then let's go look at the state. 

7 See what other area, let's do the states. In the 

8 states, all you have to do is go on the internet. 

9 Statistically about one percent of highway 

10 construction work goes to women-owned 

11 businesses on the state level. One percent. 

12 All right. And if you look at the 

13 commercial nationwide, it should be zero. It's 

14 less than one percent. 

15 So, here you have the other two 

16 markets. Highway construction that you 

17 potentially could, in fact, grow and work into 

18 and obviously the percentages are so low it's 

19 almost impossible, which goes down to the point 

20 of discrimination. 

21 And that's what this is really all 

22 about. The intent of the program is to try to 
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1 minimize or to eliminate discrimination in the 

2 highway construction industry. 

3 And the other thing I wanted to just 

4 sort of say is the gentleman talked about 

5 Tennessee and about white women and about 

6 husband and those kinds of things. 

7 As Sarah said, nobody who 

8 participates in this program wants a front and 

9 a fraud to exist. And it goes back to what I've 

10 said that on the state level, for whatever 

11 reasons, they're just not doing their job. 

12 That is the job of the recipient to 

13 make sure that you don't certify companies that 

14 do not belong in the program. Thank you. 

15 MS. VACCARELLA: Thank you. 

16 Renee Banks. 

17 MS. BANKS: Yes, my name is Renee 

18 Banks and my company is G.W. Peoples Contracting 

19 and we build railroads. 

20 And a couple things I wanted to say. 

21 We are certified in 35 different jurisdictions 

22 as a DBE. And we have found that the variety of 
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1 requirements differ from one agency to another. 

2 One agency could require a good deal 

3 of information, everything from certified 

4 payrolls to my son's birth certificate or 

5 whatever, and another agency will put just - be 

6 working with us and understand our difficulties 

7 and understand that there's been no change. So, 

8 we need some kind of unified system here. 

9 But I did want to address something 

10 else, and it has to do with DBE status and 

11 disadvantaged status. It has not - it's just 

12 not based on financial disadvantaged status. 

13 It has to do with social. 

14 And it's not just because once you 

15 achieve or financial disadvantage is gone, that 

16 doesn't mean that social, racial or gender 

17 disadvantage is gone as well. 

18 Racial - racism didn't end with Rosa 

19 Parks and we have to be vigilant. And that's all 

20 I've got to say. And I'll be speaking later this 

21 afternoon. 

22 MS. VACCARELLA: Brad Hubbert. 
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1 MR. HUBBERT: Thank you, Madam Chair. 

2 And I apologize for not introducing myself at the 

3 last speaking opportunity. 

4 My name is Brad Hubbert. I'm not a 

5 small business owner. I spent 23 years on the 

6 Board of Transportation for the Department of 

7 Georgia. And I've been working advocately to 

8 try to help and make sure that the DBE program, 

9 the MBE program achieve the objectives that I 

10 understand that it was designed for, and that was 

11 to eliminate discrimination. 

12 Specifically started with minority 

13 and women's, and now we've added the 

14 disadvantaged business enterprise. 

15 Disadvantaged being social and economic. 

16 One comment I would like to make is 

17 that it appears that when I was on the Board of 

18 Transportation, that we - and we still do spend 

19 a lot of time doing certification. And I 

20 understand the need for that, okay. 

21 But past certification, in my 

22 experience, is that there is no real serious 
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1 monitoring of their process once that firm has 

2 been certified and are doing work. There's no 

3 real monitoring. So, we need to make sure that 

4 in the process that we are monitoring. 

5 So, what happened in a lot of cases 

6 and when you had fraud, is that there is no 

7 monitoring or lackadaisical monitoring in it. 

8 So, the company has already reaped its benefit 

9 before he is - before he or she is identified as 

10 a perpetrator of fraud. 

11 So, if we can do a better job of 

12 monitoring, we'll have it all. And it's hard 

13 for an agency to do monitoring when all the 

14 energy and resource is spent on certification. 

15 MS. VACCARELLA: Meg Rietschlin. 

16 MS. RIETSCHLIN: I would just like to 

17 comment someone earlier in the first session 

18 mentioned something about the mentor/protégé 

19 program. 

20 And after I became a DBE, I was 

21 offered the opportunity to participate in the 

22 mentor/protégé program. And I accepted the 
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1 challenge. I am halfway through. 

2 I have had - a lot of problems with 

3 small businesses is they don't have the business 

4 practices. They're competing against people 

5 who have staffs that are extremely 

6 sophisticated. And to be able to pull 

7 information and pull experience from a mentor is 

8 extremely important and it would be nice if 

9 everyone had that opportunity. 

10 MS. VACCARELLA: Thank you. Ram 

11 Tirumala. 

12 MR. TIRUMALA: Hi. I am Ram Tirumala 

13 from Distinct Engineering Solutions based in New 

14 Jersey. 

15 We are certified as DBE in four other 

16 states. And the point I just wanted to make is 

17 every state is asking different documents. 

18 I can understand they want to ensure 

19 that the continuity of DBEs meeting the goals and 

20 they are not graduated from, they are not 

21 submitting fraudulent documents, but my 

22 concerns are two things. 
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1 In this day and age of identity theft 

2 when I am submitting a lot of documents, I am 

3 afraid where some of this personal information 

4 that we are providing could get in the wrong 

5 hands. That's one. 

6 And, again, I am just agreeing with 

7 a few other speakers where if the crooks really 

8 want to falsify documents, they always do. 

9 People who are honest are the ones who are asked 

10 to do more work and it's a burden. 

11 Now, if there is a uniform way of 

12 recertification, annual no-change affidavit 

13 documentation, it would help in decreasing the 

14 time period. And also there are ways and means 

15 to cross-verify the truth of the documents 

16 everyday. Thank you. 

17 MS. VACCARELLA: Do we have any more 

18 cards? 

19 (No response.) 

20 MS. VACCARELLA: So, we're going to 

21 leave the chat room open for another five minutes 

22 so that people online will have an opportunity 
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1 to submit comments. 

2 (Speaking off mic.) 

3 MR. HUBBERT: Can one of the 

4 recommendations be to see if and - if the program 

5 could incorporate a - since it's a federal DBE 

6 program, could we have federal regulations that 

7 cover all 50 states? Is that possible? 

8 MS. VACCARELLA: Okay. I noticed in 

9 the interim that we would place two panel members 

10 with the two people that - or at least one - two. 

11 So, can you stand up and just tell people who you 

12 - identify yourself. 

13 MS. McWHORTER: Hi. Nichole 

14 McWhorter. I'm with Federal Highway, Office of 

15 Civil Rights. 

16 MR. BARHAM: And Wilbur Barham also 

17 with the Federal Aviation Administration, 

18 Office of Civil Rights. 

19 MS. VACCARELLA: Thank you. Okay. 

20 Do you want to take a break now? We'll keep the 

21 chat room open for another five minutes, but 

22 we'll start the - we were going to do another 
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1 break before we start into the last section. 

2 So, why don't we incorporate the 

3 break right now for - you want a 30-minute break? 

4 Okay. We'll do a 30-minute break at this point 

5 right here. 

6 (Whereupon, the proceedings went 

7 off the record at 1:11 p.m. for a brief recess 

8 and went back on the record at 1:43 p.m.) 

9 A-F-T-E-R-N-O-O-N S-E-S-S-I-O-N 

10 1:43 p.m. 

11 MS. VACCARELLA: Okay. We're going 

12 to get started and honor the people that were 

13 here on time. We're about to start the third 

14 topic. Third and last topic of the day. 

15 What are the specific quantifiable 

16 costs and benefits associated with requiring 

17 good faith efforts documentation when bids are 

18 due and requiring additional documents, i.e., 

19 DBE and non-DBE quotes, DBE subcontracts from 

20 the perspective of a prime contractor, a DBE and 

21 the recipient letting the contract. 

22 I'm going to remind people to step 
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1 up close to the microphone and please talk 

2 loudly, because we have about between 300 and 500 

3 people listening on the web and they have said 

4 in the last two topics it's very difficult to 

5 hear. 

6 So, I'm going to just ask you again 

7 to try to speak a little bit louder. Make sure 

8 that you're up close to the microphone. 

9 First speaker here under Topic 3, 

10 Earl H. Jenkins. 

11 DR. JENKINS: Good afternoon, again. 

12 I'm Earl Jenkins and I am here once again on 

13 behalf of Gregory Jenifer, president and CEO 

14 with Armand Resource Group, Incorporated who 

15 could not be present due to a scheduling 

16 conflict. 

17 However, again, he sends his 

18 apologies and requests that I present his 

19 prepared remarks this afternoon. 

20 When a recipient establishes a 

21 contract goal on a DOT-assisted contract, a 

22 bidder must in order to be responsive, make good 
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1 faith efforts to meet the goal. 

2 The first premise of a bidder's 

3 ability to meet a goal or to determine good faith 

4 efforts, is that the established DBE goal is 

5 reasonable, realistic, practical and 

6 obtainable. 

7 The second premise is that the 

8 recipient has identified ready, willing and able 

9 DBE firms to participate on the project. 

10 The bidder will not be performing a 

11 hundred percent of the project contract of his 

12 own workforce. 

13 Recipients have been cautioned 

14 against requiring that a bidder meet a contract 

15 goal, i.e., obtain a specific amount of DBE 

16 participation in order to be awarded a contract 

17 even though the bidder has made adequate good 

18 faith efforts and presented satisfactory 

19 documentation of the same. 

20 The bidder or proposer can comply 

21 with good faith efforts, documentation 

22 requirement in either of two ways. 
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1 First, the bidder or proposer can 

2 meet the goal documenting commitments to the DBE 

3 firm sufficient for this purpose. If the goal 

4 is attained, then there is no need to submit good 

5 faith efforts documentation. 

6 Second, if the bidder does not meet 

7 the goal, then the bidder must also demonstrate 

8 that they made adequate good faith efforts by 

9 submitting satisfactory documentation with 

10 their bid. If so, then they should be awarded 

11 the contract. 

12 This means that the bidder must show 

13 that it took all necessary and reasonable steps 

14 to achieve the assigned DBE goal by 

15 demonstrating through its efforts, or, stated 

16 differently, a review of the scope, intensity 

17 and appropriateness of the efforts. 

18 The bidder could reasonably have 

19 been expected to obtain a sufficient amount of 

20 DBE participation even if the good faith efforts 

21 were not successful. 

22 Requiring the bidder to document 
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1 their good faith efforts at a time of the bid 

2 submission prevents bidders from shopping 

3 bids/quotes from DBEs. 

4 The greater of the time frame 

5 provided to provide, submit or - I'm sorry - 

6 documentation of good faith efforts increases 

7 the probability of bid shopping and requiring 

8 DBEs reduce their bids. 

9 In the rare instance where a 

10 submission process is delayed longer than at the 

11 time of the submission date, an alternate 

12 project delivery method should be the 

13 procurement method and the project should be a 

14 multi-year mega project. 

15 In those instances, there should 

16 also be other commitments in place that require 

17 the bidder to comply with the DBE goal, its 

18 compliance with the good faith efforts 

19 documentation process. 

20 Under traditional bid processes, 

21 the bidder should know the details of its cost 

22 projections and how it got to its bottom line. 
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1 Requiring non-DBE quotes provides 

2 the bidder with the ability to substantiate its 

3 selection process concurrently access non-DBE 

4 quotes provide recipients with the necessary 

5 data to validate the reason why a DBE bid or quote 

6 was deemed excessive. 

7 It also validates that the DBE and 

8 non-DBE were bidding on the same scope of work. 

9 Additionally, bid dates when 

10 coupled with other documentation can be used to 

11 show practices used by the prime to shop the bid 

12 of the DBE. 

13 Access to such information by 

14 recipient is critical to good faith effort 

15 evaluation processes. 

16 Subcontracts for DBEs should not be 

17 required at the time of bid. However, a Letter 

18 of Intent, which is executed by both the DBE and 

19 the prime, should be submitted with the bid 

20 submission. 

21 The Letter of Intent coupled with 

22 the schedule of DBE participation is a best 
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1 practice to obtaining the next best commitment 

2 because of the new termination removal 

3 provisions. 

4 The selected bidder should be 

5 required to submit executed DBE subcontracts and 

6 purchase orders within a specified time frame 

7 after the contract is awarded. 

8 The executed subcontract agreement 

9 is critical to the recipient's oversight 

10 compliance monitoring process. 

11 Access to subcontract agreement 

12 allows the recipient to verify prompt payment 

13 provisions, release of retention, flow-down to 

14 nondiscrimination clauses, disclosing proper 

15 use of termination and convenience provisions 

16 sets forth the dispute resolutions process, 

17 etcetera. 

18 Under no circumstances should a DBE 

19 work on a contract without an executed 

20 subcontract agreement. 

21 There are costs associated with 

22 bidding for both the prime and subcontractor, 
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1 including the DBE subcontractor. Thank you 

2 very much for your kind attention. 

3 MS. VACCARELLA: Rich Juliano. 

4 MR. JULIANO: Thank you. My name is 

5 Rich Juliano, senior vice president with the 

6 American Road and Transportation Builders 

7 Association known as ARTBA. 

8 Our membership ranks include more 

9 than 3300 construction firms of all sizes and 

10 ownership types. 

11 These include prime contractors, 

12 subcontractors and entities classified as 

13 disadvantaged businesses and otherwise. 

14 Despite any such distinctions, 

15 these companies share a common commitment to 

16 building transportation improvement projects as 

17 safely and efficiently as possible using 

18 innovation to meet or exceed the expectations of 

19 project donors and the public. 

20 ARTBA and its members recognize the 

21 goals of the federal DBE program and the need to 

22 encourage the participation and utilization of 
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1 disadvantaged businesses on federal aid 

2 transportation construction projects. 

3 At the same time, the program 

4 represents a very challenging area of compliance 

5 for all types of contractors. 

6 During last year's comment period, 

7 ARTBA and dozens of our chapters and member firms 

8 made submissions addressing primary areas of 

9 concern about many of the 30 or so proposed 

10 changes in the NPRM. 

11 Today we are joined once again both 

12 in this room and remotely by many chapters and 

13 members who are extremely troubled by some of the 

14 revisions being discussed. 

15 Let me note that not every ARTBA 

16 member holds the same opinion about every aspect 

17 of the NPRM, but there is general concern about 

18 the prescriptive nature of the NPRM's approach. 

19 This is especially true with the 

20 third subject area for today's session. We 

21 think these changes will undermine successful 

22 DBE programs in certain states and exacerbate 
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1 existing problems in others. 

2 In contrast pursuant to the Adarand 

3 case, the Department to this very day has touted 

4 its narrow tailoring of the DBE rule and the 

5 flexibility it provides to recipient 

6 transportation agencies. 

7 So, the policy reversals proposed in 

8 some aspects of this NPRM are puzzling, to say 

9 the least, as they were not directed by Congress 

10 or the courts. 

11 You asked us to present specific 

12 quantifiable costs and benefits associated with 

13 these proposed changes. And accordingly, ARTBA 

14 undertook a national survey of its contractor 

15 members and we were joined by the Associated 

16 General Contractors of America to ensure maximum 

17 participation. And we received nearly 300 

18 responses, which is a very significant sample 

19 size. 

20 We will present detailed results in 

21 our written comments later this month. But for 

22 today, here are some highlights. 
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1 85 percent of the firms in the survey 

2 were prime contractors. The reset being 

3 subcontractors. And 11 percent of the 

4 respondents were certified as DBEs, both prime 

5 and subcontractors among them. 

6 I will put special emphasis on the 

7 smaller firms in the survey. In fact, 38 

8 percent of respondents told us their average 

9 federal aid project is less than $5 million. 

10 And a total of 64 percent said it was $10 million 

11 or less. 

12 Looking at the proposed mandates 

13 requiring submission of DBE information and good 

14 faith effort documentation at bid time, 91 

15 percent of our prime contractor respondents 

16 anticipated this would result in varying levels 

17 of increased cost per bid reflecting factors 

18 such as added staff, estimating time, risk, DBE 

19 outreach and vetting and the like. 

20 The NPRM proposes enhanced 

21 requirements for prime contractors seeking good 

22 faith effort waivers. 97 percent of those 
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1 responding anticipated added associated costs 

2 of varying levels for their bids. 

3 The Department proposes increased 

4 good faith effort documentation and 

5 requirements for prime contractors seeking to 

6 replace a nonperforming or defunct DBE 

7 subcontractor. 

8 Additionally, the NPRM outlines 

9 severe sanctions to which the prime would be 

10 subject if it is deemed not to comply. 

11 98 percent expect extra costs 

12 relating to these mandates, including more than 

13 15 percent who expect those costs to exceed 

14 $100,000 per project. 

15 Finally, we asked the respondents to 

16 envision the implementation of all these 

17 proposed changes and whether they would bid 

18 more, less or about the same amount of federal 

19 aid work. 

20 42 percent of all contractors 

21 expected to bid less such work, including 56 

22 percent of the smaller primes. 
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1 This should be troubling to all of 

2 us, including the Department, who are concerned 

3 about preserving competition and the viability 

4 of smaller contractors. 

5 As you can see, even though funding 

6 is limited, our industry members are clearly 

7 telling us these mandates would add significant 

8 costs to projects ultimately to the detriment of 

9 the taxpayers. And as I mentioned, we'll 

10 present more details in our written comments. 

11 The industry is comprised of people 

12 who are building projects that have a profound 

13 effect on the nation's economy and quality of 

14 life. 

15 Whether it is today or in the coming 

16 weeks as you review the written docket, please 

17 listen to them. Thank you. 

18 MS. VACCARELLA: Thank you. Robert 

19 Ashby. 

20 MR. ASHBY: Far from being a reversal 

21 of longstanding policy, the proposal in the NPRM 

22 is a reiteration and clarification, a reemphasis 
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1 of something that has always been part of the DBE 

2 program. 

3 If you are submitting a bid in a 

4 responsiveness IFB kind of situation as distinct 

5 from a negotiated procurement, then from the 

6 inception of the rule you've been required to 

7 submit DBE compliance information whether it be 

8 good faith efforts, whether it be actual DBE 

9 participation. 

10 I think we all became aware that some 

11 states were getting a little sloppy in terms of 

12 enforcing that requirement that there were days 

13 or weeks permitted beyond bid opening before the 

14 information would have to be submitted with the 

15 obvious consequences, an earlier speaker 

16 mentioned, of bid shopping to the detriment of 

17 DBEs. 

18 Many prime contractors, and I'm sure 

19 we'll hear from more of them today, objected to 

20 this requirement. In fact, it was a very 

21 well-orchestrated and much xeroxed submission 

22 of comments to the docket along those lines. 
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1 And the thrust of many of those 

2 comments was that it was simply too difficult to 

3 submit that information in a timely way given the 

4 short fuse and the chaos and the complexity of 

5 the bidding process. So, think about that for 

6 a minute. 

7 What do you have to do to submit a 

8 rational bid? You need to think about a whole 

9 bunch of things. You need to think about price. 

10 You need to think about materials and 

11 quantities. You need to think about scope of 

12 work. You need to think about material, 

13 personnel and equipment. You need to think 

14 about timetables. You've got to do all this 

15 stuff to submit a rational bid. 

16 So, is it credible to say that, well, 

17 we can't also think about DBEs at the same time? 

18 Are we so dazed and confused that that's the 

19 piece that falls out because that's somehow not 

20 part of the real business of contracting? I 

21 don't believe that's a credible argument. 

22 I think the thrust of many of the 
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1 comments at least implicitly, is, in fact, to 

2 preserve the opportunity for bid shopping, 

3 which, admittedly, can save costs for prime 

4 contractors, but, again, think for a second. 

5 If you're a prime contractor, how 

6 would you like it if the state got your bids on 

7 bid day and opened them all and shared them among 

8 all your competitors for the prime contract and 

9 negotiated back and forth among you and your 

10 other prime contractors to see if they could 

11 lower the prices that were submitted in the bids? 

12 Is that an acceptable way of running 

13 a bid system? I mean, I don't think anybody 

14 would say so. So, why are we going to support 

15 a system for DBE subcontracts that would have a 

16 parallel kind of effect? 

17 I mean, I just don't think that 

18 that's good policy. And I think it's important, 

19 you know, we can talk about details about exactly 

20 what documentation needs to be submitted. 

21 About in the case of the apparent low bidder, 

22 could they have a brief window of time to submit 
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1 documentation reflecting what has already been 

2 in concrete? Yeah, maybe, but the notion that 

3 one should have lengthy periods of time to bid 

4 shop, I think, is contrary to the whole purpose 

5 of the DBE program. 

6 This kind of relates to a more 

7 general theme that, you know, I hear being sung 

8 from time to time that folks say the DBE program 

9 should more closely mirror the, quote, normal 

10 way of doing business in the industry. 

11 As disparity study after disparity 

12 study has shown, the effects of discrimination, 

13 that's what we're talking about in the DBE 

14 program, after all, are deeply embedded in the 

15 normal way the industry works. 

16 That's why we have a DBE program to 

17 cause actors in the industry to act differently 

18 from the way they normally would in a way that 

19 helps overcome the effects of discrimination. 

20 So, remember that we're not simply 

21 talking about merely an administrative 

22 requirement or proposal to clarify and reiterate 
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1 an existing administrative requirement here. 

2 We're talking about something that goes to the 

3 fundamental purpose of the program, which is to 

4 combat the effects of discrimination and not let 

5 them have free reign. 

6 MS. VACCARELLA: Thank you. Meg 

7 Rietschlin. 

8 MS. RIETSCHLIN: Hi. I'm Meg 

9 Rietschlin. Rietschlin Construction. 

10 Ohio Department of Transportation, 

11 or ODOT, has bid lettings approximately every 

12 other week. The Bids are submitted 

13 electronically by 10:00 a.m. on Thursday morning 

14 of the letting week. 

15 In many lettings, there may be one 

16 or two or three projects that my company would 

17 be interested in bidding. 

18 Downloading plans, specs, taking a 

19 drive to physically look at the job takes place 

20 two weeks before bidding. Takeoff may being 

21 this week as well. 

22 In most cases, we receive pricing 
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1 from suppliers and subcontractors on Wednesday 

2 of letting week, which is the day before the bids 

3 are due. 

4 The prices arrive by fax and email. 

5 Some pricing doesn't reach our desk until the 

6 evening before the bid opening. Some suppliers 

7 change their pricing right up to the minutes 

8 before the letting submission closes. 

9 When the estimate is completed, a 

10 field manager or myself review the bid, the 

11 project pricing, and discuss any concerns or 

12 issues that would alter the pricing. 

13 At times, after all the work to 

14 prepare the estimate, the decision will be made 

15 to not bid a job at all. 

16 In any case, the decision to bid or 

17 not is made between 6:00 a.m. and 9:30 a.m. on 

18 the day of the letting and this is the process 

19 for our projects. 

20 It is important to note that 

21 everyone in this process has the right to change 

22 pricing, to bid or not to bid. 
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1 We also have the right to withdraw 

2 a bid after the letting when we see that we have 

3 made a substantial error. 

4 One of my most challenging obstacles 

5 to overcome has been getting prequalified to 

6 perform work. The second challenge has been to 

7 increase the prequalification limit. 

8 Once I have reached the 

9 prequalification limit of contracts on hand or 

10 in process, I cannot continue to add work until 

11 the limit is worked off. 

12 Whether I bid as a prime or should 

13 I bid as a sub, my constraints are the same. I 

14 am going to attempt to pick the project that 

15 yields the most work for my employees and 

16 utilizes the equipment that I have. Those 

17 decisions are going to be made with each job and 

18 each letting. 

19 Doing last-minute paperwork 

20 submission as a prime or a sub is going to add 

21 more cost to my process. 

22 If my revenues and profits don't 
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1 increase to cover the cost of extra submissions, 

2 then the bottom line suffers and so will my 

3 prequalification. Thank you. 

4 MS. VACCARELLA: William Miller. 

5 MR. MILLER: Good afternoon. Thank 

6 you for the platform today. My name is William 

7 E. Miller, III. I work for Dragados USA. 

8 My comments about Topic Number 3 are 

9 from the perspective of a prime contractor. 

10 Dragados USA performs work in a 

11 heavy civil infrastructure market all across 

12 North America and usually as the prime 

13 contractor. We are currently completing the 

14 first P3 project in the U.S. 

15 Overall, the proposed changes to the 

16 DBE regulations may not achieve the objective of 

17 creating viable commercial businesses that can 

18 sustain outside the artificial market created by 

19 the DBE program or which will result in the DBE 

20 engagement in participation on public funding 

21 projects. 

22 Instead, the regulations as 
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1 submitted should be implemented to focus on 

2 capacity building, access to capital and 

3 bonding. 

4 The current proposed regulations 

5 are more focused on traditional project method 

6 and this model is changing. And, therefore, the 

7 rules must change as well. 

8 The proposed changes to the DBE 

9 regulations do not adequately address the 

10 alternate concept project's delivery methods 

11 like design build or P3, which are often large 

12 and complex projects. 

13 These projects are growing in 

14 popularity and as a means of building and funding 

15 huge transportation mega projects because of the 

16 savings which can be achieved by the 

17 alternative, innovative design concepts, faster 

18 delivery times. 

19 Part of the attraction of these 

20 methods is that the designing contractor could 

21 come up with the design concepts or construction 

22 methods that are unique and usually create a 
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1 value for the owner and the hope to outsmart the 

2 competition in creating the best value for the 

3 owner at the best price. 

4 These ideas become the engine for 

5 the contractor to find a solution for savings and 

6 other reasons for choosing a particular team. 

7 Requiring the submission of DBE 

8 commitments and good faith efforts with the 

9 proposal does not account for how design build 

10 and P3 projects are built or the changes to the 

11 design that happen over the life of the project. 

12 Some of the challenges unique to these delivery 

13 methods are as follows. 

14 Design is often not finalized until 

15 a year or two into the project. So, 

16 construction does not commence immediately. 

17 And it's very difficult and it's very different 

18 from the design and vision on Day 1. So, the 

19 flexibility will be lost if the regulations are 

20 implemented as is. 

21 They may cause discontent in the 

22 small contracting community if work is deleted 
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1 or descoped. 

2 Savings are realized upon 

3 alternative technical concepts which may 

4 substantially change the work to be performed. 

5 So, by adding or eliminating entire 

6 scopes of work, including those who may have been 

7 already slated for DBE participation, and then 

8 there's the substitution rule. 

9 Asking a DBE firm to commit to a 

10 price in Year 1 based on a conceptual concept or 

11 incomplete design when this work is not to be 

12 performed until the end of the project, may be 

13 unfair to the DBE firm. 

14 In our experience, it has been the 

15 DBE isn't always willing to do so. Often DBEs 

16 wait until the low bidder is identified before 

17 engaging in those types of negotiations. 

18 The regulations also do not 

19 recognize that a smaller firm may have a scarcer 

20 resources will not foster the objective of 

21 giving the DBEs the best opportunity to 

22 participate in the contract. So, in effect, the 
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1 rule will become a barrier. 

2 If design changes, commitments may 

3 cost more. If the proposed regulations make no 

4 distinction in the size of a project, the ability 

5 of a small business to participate in a $100 

6 million project is very much different from that 

7 same firm to participate in a $1 billion project. 

8 It often takes longer to negotiate 

9 an agreement with a DBE. They are often not 

10 interested in negotiating until a team or a 

11 contract has been chosen. 

12 Rules do not account for the 

13 differences in contractors' policies and 

14 procedures related to integrity and 

15 transparency. So, it is very difficult to 

16 determine the specific quantifiable costs 

17 associated with the submission of good faith 

18 efforts, documentation with the bid or within 

19 one day of the bid submission, additional 

20 estimators and purchase agents will be required, 

21 and the time for contractors to submit a proposal 

22 will have to be extended or lengthened to allow 
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1 sufficient time for contractors to submit an 

2 engagement to DBEs. 

3 In addition, firm criteria will have 

4 to be established to determine if good faith 

5 efforts - will have to determine good faith 

6 efforts so that all bidders will be evaluated on 

7 the same basis. 

8 Additional personnel will have to be 

9 hired by the agency or the government in order 

10 to review the documentation provided and 

11 submitted with bids. 

12 Individuals will have to be trained 

13 to identify what does or does not qualify as 

14 meeting good faith efforts. 

15 Cost will vary depending on the 

16 size, type and complexity of the project. And 

17 the cost may be between 8,000 and 20,000 for a 

18 smaller job, or 80,000 to 200,000 for a 

19 billion-dollar project. 

20 We intend to provide formal written 

21 comments, but Dragados USA believes the focus of 

22 the regulations must be on building capacity. 
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1 We stand ready to assist in 

2 formulating rules and regulations that will 

3 assist and achieve any objectives of the DBE 

4 program and grow small businesses to become 

5 commercially-viable businesses. Thank you. 

6 MS. VACCARELLA: Thank you. Felice 

7 Farber. 

8 MS. FARBER: Hi. I'm Felice Farber 

9 and I'm commenting today on behalf of the New 

10 York Road and Infrastructure Improvement 

11 Coalition. 

12 We're a statewide coalition of New 

13 York's highway, mass transit and water 

14 infrastructure builders, trade unions and 

15 project designers. 

16 Our mission is to improve and expand 

17 the state's transportation and clean water 

18 infrastructure. 

19 A significant number of our members 

20 are themselves DBEs. And in that regard, we are 

21 supportive of efforts to improve opportunities 

22 for DBEs. 
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1 We are, therefore, pleased that DOT 

2 has taken a breath in terms of issuing final 

3 regulations so that we have a constructive 

4 opportunity to share our perspective on why some 

5 of the things proposed in the NPRM are either 

6 unrealistic or, worse, counterproductive to the 

7 DBE program's ultimate goal, which should be to 

8 help ensure that there is qualified DBE capacity 

9 in the industry. 

10 We believe that every aspect of the 

11 proposed regulations should be guided by an 

12 unbiased view about how they increase 

13 opportunities for minority and women-owned 

14 firms. 

15 Simply forcing increased DBE 

16 percentages in federally funded contracts 

17 without understanding how those goals can be 

18 realistically achieved is a cynical exercise. 

19 In that regard, the initial approach 

20 taken in the NPRM ignored some fundamental 

21 issues facing many of our members. And up until 

22 this point, we found that our valid concerns 
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1 about issues such as good faith efforts, bid 

2 timing issues and certification have fallen on 

3 deaf ears. 

4 That is why we are particularly 

5 happy to have the opportunity to revisit them in 

6 my remarks today and in our separate written 

7 comments. 

8 First, we must reach a realistic and 

9 fair understanding of what good faith efforts 

10 encompass. 

11 For example, requiring what I'm 

12 calling complete good faith efforts, including 

13 all subcontractor quotes and subcontractor 

14 agreements at the time of bid in and of itself 

15 does not create opportunities and build capacity 

16 among DBEs. It only increases the volume of 

17 paperwork required by both primes and subs. 

18 On large multi-year contracts 

19 requiring that each bid include the prime 

20 contractor's complete good faith efforts 

21 including a list of all DBEs to be utilized 

22 during the future course of the contract is 
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1 almost impossible. 

2 Bidding out the work closer to the 

3 time it is to be performed creates additional 

4 bidding opportunities for DBEs, removes the risk 

5 of schedule delay and material and price 

6 escalation for the DBE, and frees up bonding 

7 capacity for DBEs to seek other work. 

8 Committing to work one, two, three 

9 years out ties up a DBE's limited bonding 

10 capacity and places the DBE at risk of schedule 

11 delays that potentially result in 

12 overcommitment or significant gaps in workflow. 

13 Both are problematic for a small firm. 

14 Requiring with each bid a complete 

15 list of DBEs to be utilized and the performance 

16 of the work, will require all DBEs and not other 

17 subcontractors the way it's written, to submit 

18 bids and negotiate agreements prior to the bid 

19 due date. 

20 Bids received after the opening, bid 

21 opening, and, indeed, the same say as the bid 

22 opening, will no longer be able to be accepted. 
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1 Potential opportunities for DBEs 

2 will further be diminished as the short time 

3 frame for biding and contract negotiation will 

4 force firms to use only DBEs they know and trust 

5 and who have a proven track record of 

6 performance. 

7 Opportunities for DBE vendors and 

8 suppliers will also be restricted as firms 

9 generally will not make a deal for material 

10 prebid. 

11 Some prime firms have reported to us 

12 that they will ultimately make the business 

13 decision to bid fewer projects, because many 

14 subs will be unwilling or unable to identify 

15 second-tier subs during the initial bidding 

16 process. 

17 This will actually result in the 

18 reduction rather than enhancements of small DBE 

19 subcontracting opportunities. 

20 Second, the rules must provide 

21 different standards for design build and other 

22 alternate project delivery methods. It's very 
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1 difficult to obtain bids and include a list of 

2 all bids with a project with only 30 percent 

3 design. 

4 As to certification as I'm running 

5 short on time, one of the things that's very 

6 important to improving the process is really 

7 looking at the quality of the certification list 

8 making sure that firms that are truly probably 

9 certified are included, they're on the NAICS 

10 list. This includes distinguishing between the 

11 building industry and the heavy civil industry. 

12 The better quality and more accuracy 

13 of the list will allow prime contractors to reach 

14 out to the firms that provide the exact services 

15 being solicited. 

16 An improved and accurate certified 

17 list would also reduce the administrative burden 

18 on everyone and allow resources to be focused on 

19 providing contracting opportunities and 

20 actually building projects. 

21 We appreciate the opportunity to 

22 comment today and will be providing more 
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1 detailed written comments, including more 

2 detailed information on the costs of meeting the 

3 NPRM requirements. 

4 MS. VACCARELLA: Thank you. 

5 Kathryn D'Agostino. 

6 (No response.) 

7 MS. VACCARELLA: Kathryn D'Agostino. 

8 (No response.) 

9 MS. VACCARELLA: Brad Hubbert. 

10 MR. HUBBERT: Madam Chair, my name is 

11 Brad Hubbert and I'm representing the DeKalb 

12 Branch NAACP as I come before you this evening 

13 and to address Item Number 3. And prior to doing 

14 that, I would like to make a statement. 

15 It really saddens me to say that we 

16 as a nation has failed to acknowledged the real 

17 problem with our economic system and that it is 

18 built on the foundation of discrimination and 

19 greed. 

20 Now, to the subject matter. It is 

21 difficult for me to speak on the quantifiable 

22 costs and benefits associated with requiring 
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1 good faith effort documentation with bids when 

2 bids are due and requiring additional documents, 

3 i.e., DBEs, non-DBE quotes, DBE subcontracts 

4 without having data outlined, the performance 

5 made, the results achieved and the costs 

6 associated with that action and what percentage 

7 of the desired result was achieved in 

8 relationship to the costs. 

9 But my prior experience tells me 

10 that whatever the cost is, it would not outweigh 

11 the benefit to at least change this particular 

12 recommendation - rules. Because all the 

13 experience that I got when I was on the Board, 

14 there's prime contractors changing their bids, 

15 browbeating the subcontractor to reduce their 

16 prices after they're awarded the bid. 

17 And my thing is that when you submit 

18 a bid to - and I'm going to comment I agree with 

19 Mr. Ashby - 100 percent is that, you know, when 

20 you submit a bid to an agency, all the contract 

21 bid, the contractor, prime contractor would not 

22 want the agency to take their bids and shop them 
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1 around. 

2 So, that's what they have been doing 

3 with DBEs, especially with DBEs, okay? And I'm 

4 sure they probably do it with subcontractors, 

5 but I haven't been privileged to that firsthand 

6 information from them. So, that's the - the 

7 other thing along that same line, I would like 

8 to ask a question. 

9 But since I can't ask the panel a 

10 question, I will pose the question and answer it 

11 myself. 

12 (Laughter.) 

13 MS. HUBBERT: It's what is the origin 

14 objective of the goals of the DBE program? 

15 Okay. 

16 The origin of the DBE program 

17 revitalized as a result of the MBE WBE program. 

18 And the purpose for it was to correct past and 

19 present discrimination in the allocation of 

20 federal resources. That's, you know, that's my 

21 understanding. 

22 Now, I'm sure that you all probably 
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1 have - hopefully have the same understanding as 

2 to the purpose and origin. So, to that end 

3 hopefully we can address achieving those 

4 objectives. 

5 The next question I would like to 

6 pose is that in layman's terms, what is the hope 

7 to achieving - you hope to achieve as a result 

8 of these rule processes and how will it impact 

9 the DBE community? 

10 I think that needs to be a question 

11 that should be asked. Based on the rules that 

12 you are proposing to change, how will it impact? 

13 Will it enhance the minority or DBE 

14 community, or will it destroy the DBE community? 

15 I think that's a question that needs to be asked. 

16 I went farther to define the real 

17 purpose of the program is to eliminate 

18 discrimination, address past discrimination in 

19 the spending of federal dollars for 

20 transportation product and service, to level the 

21 economic playing field for businesspersons who 

22 have been discriminated against as a result of 
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1 race, sex, socioeconomic status, small 

2 business, disabled veteran in business. 

3 I think that based on our economy, 

4 our government has an obligation and should see 

5 a responsibility so small business is the 

6 backbone of our economy, that we should be doing 

7 everything within our power to improve the DBE 

8 program. 

9 And the reason we should be doing 

10 that, because DBEs, 99 percent of the DBEs in the 

11 program is small business. 

12 And since small business is the 

13 backbone of our economy, then I think that should 

14 be our responsibility. That should be 

15 government responsibility to do everything that 

16 they can and set regulation and rules that could 

17 enhance, that will help small business survive 

18 the same as they do with big corporations. 

19 Okay. I didn't finish, but my time 

20 is up. 

21 MS. VACCARELLA: Thank you. 

22 MR. HUBBERT: Thank you. 
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1 MS. VACCARELLA: Jeffrey Cruz. 

2 MR. CRUZ: Good afternoon. My name 

3 is Jeffrey Cruz. I am the secretary and general 

4 counsel of E.E. Cruz and Company, Inc. 

5 E.E. Cruz is a heavy civil union 

6 construction contractor incorporated in New 

7 Jersey with operations in the metropolitan New 

8 York City/Northern New Jersey area. 

9 As a heavy civil contractor, we 

10 self-perform a high percentage of our work. We 

11 have invested in and developed the personnel, 

12 equipment and know-how to perform complex 

13 excavation, concrete, demolition, steel 

14 erection and other heavy construction work with 

15 our own forces. 

16 This enables us to reduce the risk 

17 and cost to performing the work to the mutual 

18 benefit of our public entity owners and our 

19 company. 

20 Despite the commendable goals of the 

21 DBE program, the DBE rules as applied to the 

22 heavy construction industry all too often have 
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1 a chilling effect on our company's operations, 

2 on our ability to procure new work and on the 

3 overall health of our industry. 

4 The DOT has proposed revised DBE 

5 regulations will only serve to amplify those 

6 effects by increasing the prime contractor's 

7 bidding costs, increasing the prime 

8 contractor's performance risks and reducing 

9 competition for public works contracts. 

10 I'll address increased costs first. 

11 Requiring that good faith documentation be 

12 completed and the DBE subcontracts to be 

13 executed at the time of bid will be extremely 

14 difficult, if not impossible. 

15 In the time we typically have 

16 between bid solicitation and bid submission, our 

17 estimating department is able to study the 

18 project, figure out the best and most economical 

19 way to build it, prepare quantity takeoffs, 

20 estimate the cost of performing or 

21 subcontracting out the individual scopes of 

22 work, estimate the cost of material, equipment, 
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1 services, insurance and other critical items, 

2 evaluate the unique project risks and assign 

3 dollar values to cover them, and choose overhead 

4 and profit rates that will make business sense 

5 and enable us to win the bid. 

6 We do not have time before a bid is 

7 submitted to level all the proposals from 

8 subcontractors and suppliers, evaluate their 

9 qualifications and negotiate and execute 

10 written agreements. 

11 Only after we have been named the 

12 apparent low bidder for a project would we be in 

13 a position to start buying up the subcontracts 

14 and material purchase orders. 

15 We simply don't have the time and 

16 resources to get all of that accomplished before 

17 the bid is submitted. 

18 Likewise, the subcontractors and 

19 the suppliers will not invest the time and effort 

20 to negotiate and execute subcontracts and 

21 material purchase orders with a prime contractor 

22 before the prime contractor has been awarded a 
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1 job. 

2 The same goes for the good faith 

3 efforts documentation. The prime contractor 

4 cannot complete all of the required tasks and 

5 prepare all the required documentation for every 

6 bid before the bids go in. 

7 The good faith effort to find and vet 

8 DBE subcontractors and suppliers to evaluate the 

9 proposals and negotiate written agreements 

10 continues from the prebid phase into the 

11 post-award phase. 

12 Assuming for discussion purposes 

13 that a prime contractor could get its good faith 

14 efforts documentation and DBE subcontracts 

15 completed before a bid goes in, the additional 

16 costs would be substantial. 

17 We have estimated these costs to be 

18 in the neighborhood of 20,000 to $25,000 per bid. 

19 For a company that bids two months 

20 - two projects a month, that's an additional 

21 burden of 240,000 to $300,000 per year, monies 

22 spent on projects that the prime contractor has 
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1 not yet even won. 

2 My second point is on the increased 

3 risks. In many cases the high percentage goals 

4 established for our projects force us to 

5 subcontract that we would self-perform. More 

6 subcontracting for us means more risk. 

7 In our local market, many DBE 

8 companies are newer businesses with less 

9 experience and less capital than their 

10 competitors. 

11 We understand this reality and our 

12 account company is willing to work with DBE 

13 companies and help them succeed. 

14 Nonetheless, our company's 

15 experience, unfortunately, has been a greater 

16 incidence of performance problems and a higher 

17 rate of default with our DBE subcontractors than 

18 with our non-DBE subcontractors. This 

19 translates into increased risk to E.E. Cruz. 

20 The DBE contractors in our market, 

21 generally speaking, do not have the ability to 

22 post performance bonds or other security for 
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1 their performance. 

2 Prudent contractors like E.E. Cruz 

3 set reserves against increased risk. When 

4 prudent contractors win the work, this has the 

5 unfortunate effect of driving up the cost of 

6 construction for public works owners and the 

7 taxpayer. 

8 When contractors who do not have a 

9 healthy respect for this risk are the low bidders 

10 on public work, the industry suffers again. 

11 Public owners experience more prime contractor 

12 defaults and the cost of and time for 

13 construction increases. 

14 My last point is on reduced 

15 competition. The increased cost of bidding 

16 work and the increased risk of performing work 

17 combine to create an environment where the prime 

18 contractor to stay competitive bids on fewer 

19 projects and carries risk contingencies in the 

20 bids it does submit. 

21 This is not healthy for the heavy 

22 construction industry, the prime contractors or 
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1 the DBE companies who need work to develop and 

2 sustain themselves. 

3 The DBE program needs a healthy 

4 construction industry in which to succeed. 

5 Needlessly increasing the burdens on prime 

6 contractors weakens our industry. 

7 Our company has carefully 

8 considered the proposed rule to require prime 

9 contractors to submit their good faith effort 

10 documentation and DBE subcontracts with their 

11 bids. 

12 We have concluded that the rule 

13 would increase the cost of bidding and increase 

14 the risk of subcontracting resulting in a less 

15 healthy and less competitive business 

16 environment for DBE contractors, prime 

17 contractors and public works owners. 

18 Thank you very much for the 

19 opportunity to address this critically 

20 important subject and its effects on our 

21 industry. 

22 MS. VACCARELLA: Thank you. Frank 
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1 Cara. 

2 (No response.) 

3 MS. VACCARELLA: Frank Cara. 

4 (No response.) 

5 MS. VACCARELLA: Sharon Maxwell. 

6 (No response.) 

7 MS. VACCARELLA: Sharon Maxwell. 

8 (No response.) 

9 MS. VACCARELLA: Nicholle O'Malley. 

10 (No response.) 

11 MS. VACCARELLA: Nicholle O'Malley. 

12 (No response.) 

13 MS. VACCARELLA: Renee Banks. 

14 MS. BANKS: Good afternoon again. 

15 My name is Renee Banks and my company is G.W. 

16 Peoples Contracting. And as I said earlier, we 

17 build railroads. We occupy a very specific 

18 niche in the industry, and that is railroad track 

19 and transit construction. 

20 We have performed work across the 

21 country from New Jersey to California. We 

22 recently worked with the Swedish firm Skanska 
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1 Civil to complete 11 miles of light rail transit 

2 for Norfolk for the Hampton Roads transit. 

3 And we just completed the Dan Ryan 

4 red line for the CTA in Chicago with Kiewit 

5 Infrastructure - as a part of Kiewit 

6 Infrastructure. 

7 I have to say that we were able to 

8 train, employ and recruit minority and female 

9 workers. Our work performance with Kiewit was 

10 exemplary and both the - and everyone was pleased 

11 with both the quality and the momentum of the 

12 work. We have never defaulted and we have 

13 bonding. 

14 That project, that particular 

15 project in Chicago generated 1500 jobs in a 

16 distressed community, was completed on time and 

17 under budget and our workforce was 70 percent 

18 minority and women. 

19 And I don't think that many of the 

20 majority contractors share that commitment to 

21 inclusion both in contracting, nor in hiring. 

22 And I provide this background - oh, 
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1 there we go. I provide this background on G.W. 

2 Peoples, because we've been around for a long 

3 time. We've got the - we've had the experience. 

4 Our workforce, our management workforce has over 

5 300 years of accumulated experience. 

6 And I have to say that we support - 

7 what we support is increases in the federal DBE 

8 goal beyond 10 percent. And not only that, but 

9 we urge that DBE goals be applied across 

10 disciplines. Because, as you know, right now 

11 DBE goals are applied across the total project 

12 value. 

13 And as it stands right now, it is 

14 perfectly acceptable and compliant for a prime 

15 contractor to have zero participation in one 

16 discipline, for example, rail construction, and 

17 as long as the overall project goal is met. 

18 So, the prime is in compliance even 

19 when segments of that contractor devoid of DBE 

20 subcontractors. 

21 And these patterns of exclusion are 

22 clearly evident in other areas, not just track, 
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1 engineering, design, architecture despite the 

2 fact that there are a number of capable 

3 minority-owned companies to do the work. 

4 Now, this was actually - I overheard 

5 something and I may have overheard it 

6 inaccurately. And I apologize in advance if I 

7 did, but I overheard someone say, oh, well, if 

8 the DBE goals are increased, the percentage is 

9 increased, we - oh, well, we just add more 

10 trucking. And that's kind of the - not to 

11 disparage trucking, but that's kind of the 

12 attitude so that the minority participation is 

13 kind of delegated or relegated to lower profile, 

14 lower - less labor intensive, traditional niches 

15 and we believe that this is in disregard of the 

16 true intent of the DBE program. 

17 And if we assume that the purpose of 

18 the program is to have a contract scenario that 

19 would exist in the absence of discrimination, of 

20 historical discrimination, if that's the 

21 scenario that we're looking for, then we have to 

22 look at each discipline. 
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1 And the only way that we can actually 

2 redress that long tradition, Mr. Hubbert, of 

3 discrimination and racism and sexism is to look 

4 across at disciplines, nontraditional niches, 

5 nontraditional work and spread that goal across 

6 those and give everyone an equal opportunity. 

7 And that's how we grow capacity as well. 

8 So, I thank you very much and we will 

9 also be submitting written comments. Thank 

10 you. 

11 MS. VACCARELLA: Thank you. Jim 

12 Crum. 

13 MR. CRUM: Thank you, panel. My name 

14 is Jim Crum. I am the vice president and civil 

15 rights officer for Lancaster Development, 

16 Incorporated where I have been employed for 36 

17 years. 

18 We perform federally-aided highway 

19 and bridge contracts in upstate New York for the 

20 New York State Department of Transportation. 

21 I have also served for many years as 

22 chairman of the Civil Rights Committee for AGC's 
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1 New York chapter whose primary purpose is to 

2 partner with New York State DOT on the 

3 administration of its civil rights programs. 

4 I'm here today representing the Associated 

5 General Contractors of America. 

6 Without question there will be 

7 increased costs should the proposed revisions to 

8 the DBE regulations be implemented. 

9 AGC and ARTBA cooperated in a survey 

10 of our memberships to determine if costs could 

11 be identified. 

12 The results from the approximately 

13 300 responses show that 75 percent indicate 

14 costs would increase at least by $25,000 per 

15 contract to comply with the expanded good faith 

16 efforts and the extensive new DBE information 

17 that must be submitted with the bid. 

18 Over nine percent said costs would 

19 increase as much as a hundred thousand dollars 

20 per contract. 

21 To put that into perspective, there 

22 are currently 130,000 active federal aid highway 
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1 contracts. At $25,000 additional cost per 

2 contract, the cost increase is nearly $3 

3 billion. 

4 What are driving these additional 

5 costs? Compliance with the extra procedures 

6 will result in extra staff time and potentially 

7 hiring extra staff to take the additional 

8 required outreach steps and to provide the 

9 significant additional paperwork. 

10 Documentation will be substantial. 

11 Expanded good faith effort requirements are 

12 extensive. 

13 Additional outreach and 

14 investigation to identify potential DBE 

15 subcontractors is costly. 

16 Identifying DBEs, clarifying their 

17 qualifications, including experience, staff, 

18 available equipment, insurance, financial 

19 resources, bonding and other factors that 

20 determine if a subcontractor will be hired for 

21 a particular project and to ensure that they meet 

22 the regulatory requirement to perform a 
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1 commercially useful function all in time to be 

2 included with the bid is costly. 

3 Contract costs will increase. 

4 Requiring primes to submit with their bids the 

5 list of DBEs that will be working on a project 

6 including dollar amount, scope of work and a 

7 letter from DBEs verifying this agreement will 

8 lead to higher prices. 

9 This requirement will prevent prime 

10 contractors from being able to submit the best 

11 price to the owner, because fewer bids will be 

12 received from DBE subcontractors. 

13 The additional work that will be 

14 required by DBE subcontractors to submit bids to 

15 a large number of prime contractors before bid 

16 opening is a very constrained time frame and will 

17 prove, we believe, to be overwhelming. 

18 DBEs will be asked to provide this 

19 information to multiple primes on multiple 

20 contracts. 

21 By virtue of being small, specialty 

22 contractors, they are unlikely to have the 
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1 in-house capability to submit bids that are now 

2 required to comply with this regulatory change. 

3 The proposed requirement that DBEs 

4 submit to the prime a letter agreeing to the 

5 specific scope of work and price in a timely 

6 fashion so that the prime can submit a bid to the 

7 owner will be difficult to meet. 

8 Typically, subs submit quotes to 

9 primes that include a list of contract line 

10 items. 

11 Until all the quotes are received 

12 and compared, there is no certainty which scope 

13 of work the DBE will be hired to perform, making 

14 it impossible for the DBEs to submit a letter 

15 before the bid is submitted spelling this out. 

16 Subs also receive last-minute price 

17 quotes from their suppliers, which also makes it 

18 difficult for them to send a letter certifying 

19 their price and scope in a timely manner. 

20 If the prime receives a quote from 

21 a DBE it has not used before, there is 

22 insufficient time to investigate their 
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1 capabilities and whether they will perform a 

2 commercially useful function making it 

3 difficult for fledgling DBEs to enter the 

4 marketplace. 

5 Primes without this information in 

6 hand will be forced to use price quotes from 

7 whatever DBE sub, if any, meet the bid day 

8 schedule and not use a DBE and fail to meet the 

9 goal requirements. 

10 Primes will be forced to set 

11 deadlines for taking price quotes from subs. 

12 This will limit the last-minute price cutting by 

13 subs that is very much a part of the bidding 

14 process. This will result in higher 

15 construction costs to the owner. 

16 In addition, DBEs must learn this 

17 part of the estimating and contracting process 

18 if they hope to be successful in the construction 

19 business. 

20 Expanded good faith efforts that are 

21 proposed for replacing the original DBE 

22 subcontractor with another DBE subcontractor 
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1 once the contract has been imported, will 

2 increase cost. 

3 98 percent of the survey respondents 

4 said cost per contract would increase by at least 

5 25,000 with over 17 percent indicating that 

6 those costs would increase over a hundred 

7 thousand dollars. 

8 Replacement of DBEs may increase 

9 under this rule because of the lack of time to 

10 fully vet DBE quotes and qualifications. 

11 In addition to these hard costs, 

12 there will be other costs that need to be 

13 addressed. 

14 Our survey showed that 43 percent of 

15 the respondents indicated that they would bid 

16 less federal aid work because of these 

17 requirements and the proposed onerous sanctions 

18 for alleged noncompliance. 

19 Less competition will surely lead to 

20 increased bid amounts. Thank you. 

21 MS. VACCARELLA: Thank you. Marcela 

22 Alcantar. 
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1 MS. ALCANTAR: Good afternoon, 

2 again. Marcela Alcantar for Diversified 

3 Builders and Engineers Council. 

4 While there is no question that 

5 there is - are costs involved for every form and 

6 report required by the DBE program, the variance 

7 from one firm to another, one project to another, 

8 and one agency to another creates such a 

9 significant number of possible combinations 

10 that it would be impossible to quantify the cost. 

11 The question should be, what is the 

12 cost of not documenting the report in DBE 

13 eligibility in use inclusive of hard goals and 

14 soft goals - what I call "soft goals." 

15 The cost of failing to require 

16 reporting is the program itself. No required 

17 reports with supporting documentation in most 

18 cases and failing to verify information would 

19 not only invalidate the intent of the DBE 

20 program, but actually causes harm by leading to 

21 fraud. 

22 Standardizing availability and 
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1 disparity study methodology when calculating 

2 contracting disparity or setting goals, all DBEs 

3 being the presented groups are considered 

4 together. 

5 This cause a situation where one or 

6 two large successful DBEs can tip the 

7 participation level of an entire group making it 

8 look like there is more utilization than there 

9 is actually is resulting in diminishing the 

10 assistance for smaller DBEs. 

11 Uniform processing for goal 

12 setting. Overall goals should be tiered to 

13 differentiate between large DBE primes and DBE 

14 subcontractors. 

15 Type of functions should be weighted 

16 and there should be goal levels of DBE size 

17 depending on gross receipts when setting project 

18 goals. 

19 Some good faith efforts 

20 documentation should be provided by bidders even 

21 when there is not race-conscious goals in the 

22 project. 
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1 In cases where the project is 

2 determined not to require conscious goals is too 

3 easy for bidders to only solicit bids non-DBE 

4 subcontractors in order to minimize paperwork. 

5 The strict low bid system for 

6 construction contracting versus the 

7 qualification base system for professional 

8 services creates an unfair and unbalanced 

9 contracting processing award. 

10 Professional services providers may 

11 be required to submit documentation that 

12 construction contractors do not. 

13 In spite of the prohibition against 

14 rejecting quotes from DBE subcontractors based 

15 solely on the basis of costs, the practice still 

16 exists, and without enforcement of evaluation 

17 criteria, DBE's funds may be shortchanged. 

18 There is inadequate emphasis on 

19 race-neutral participation in achieving overall 

20 goals. The race-conscious goals are considered 

21 to be enforceable where race-neutral 

22 participation is just a suggestion. 
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1 If the availability of all DBEs 

2 indicate that there is an overall goal is 

3 reasonable and achievable, then they should be 

4 the target. 

5 In all efforts received, there 

6 should be that utilization instead of where 

7 race-conscious goals are present. The attitude 

8 is I will do what is necessary to ensure the 

9 contract if nothing more. 

10 In order to preserve the intent of 

11 the value of the program, DBE program, the 

12 current levels of reporting should be 

13 maintained, if not increased. Without 

14 accountability and compliance to the 

15 data-gathering and analysis, the DBE program 

16 will continue to be target for fraud and waste. 

17 Oversight should be improved, 

18 training, and guidance should be clarified and 

19 penalties for noncompliance. 

20 Consistency, transparency, 

21 accountability, enforcement, equity. Now, 

22 there is three perspectives of what aspirational 
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1 goals means. 

2 One is if you have done a disparity 

3 study, then now you have the hard goals and then 

4 you have the aspirational goals target to that. 

5 If you have that scenario, then like 

6 in the case for the Hispanics and the other 

7 minorities, now we're at the mercy of 

8 aspirational or whatever you feel like doing. 

9 So, leaving us out completely of any 

10 opportunities whatsoever. 

11 Now, there is the second one that if 

12 there is federal government, but then there is 

13 state funding. If the state funding is 

14 available, there should be the aspirational 

15 goals applied to the state funding equally. 

16 Now, there is an opportunity on the 

17 aspirational goals that can be used to directly 

18 solicit to DBE firms directly to the DBEs, 

19 meaning the agency can have access only 

20 exclusively aspirational goals to large prime 

21 DBEs so that this going that it cost me too much 

22 is directly with the agency and then we can have 
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1 a direct access and become truly level playing 

2 field with primes. 

3 And the last one and final is, the 

4 assumption that aspirational goals can be 

5 achieved without any hard goal setting. There 

6 is no tracking records of tracking soft goals or 

7 aspirational goals. Thank you. 

8 MS. VACCARELLA: Thank you. 

9 Frank Lopez. 

10 (No response.) 

11 MS. VACCARELLA: Frank Lopez. 

12 (No response.) 

13 MS. VACCARELLA: Leslie Saunders. 

14 (No response.) 

15 MS. VACCARELLA: Leslie Saunders. 

16 (No response.) 

17 MS. VACCARELLA: Carl Brown. 

18 (No response.) 

19 MS. VACCARELLA: Carl Brown. 

20 (No response.) 

21 MS. VACCARELLA: Harley Hampton. 

22 (NO response.) 
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1 MS. VACCARELLA: Harley Hampton. 

2 (No response.) 

3 MS. VACCARELLA: Charles Gibbs. 

4 MR. GIBBS: Good evening, again. 

5 With GUTA, Georgia United Truckers Association. 

6 Again, I just want to keep it simple. 

7 I'm here to represent the trucks. We need an 

8 increase in price, you know. 

9 I've been in the trucking game since 

10 2006, and we are now in 2013 and rates have not 

11 increased. 

12 Getting 60 to $65 an hour is not 

13 cutting it. Fuel has gone up, doubled and, you 

14 know, we keep getting the same money. 

15 So, I'm asking you guys from your 

16 desk, your chairs, if you can help us in that 

17 arena. 

18 You know, one can ask the question 

19 the cost of diesel is cheaper to refine diesel, 

20 but yet, still, the cost of diesel versus 

21 gasoline is significantly higher. 

22 I know this is not the forum for what 
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1 I'm asking, but I have to just use this 

2 opportunity to scream out, ask for help. 

3 That's basically it. You guys have 

4 a good one. 

5 (Laughter.) 

6 MS. VACCARELLA: Thank you. 

7 Sarah von der Lippe. 

8 MS. VON DER LIPPE: Hi. Sarah von 

9 der Lippe again. I am so sorry, but I am Johnny 

10 One Note today, but I'm going to do it again and 

11 say the key thing that we need to look at in 

12 assessing this proposed rule change is what's 

13 the purpose of this program. 

14 And the purpose of the DBE program, 

15 in fact, the only permitted constitutional 

16 purpose of the DBE program, is to eliminate 

17 discrimination. That is what the program is 

18 intended to do. 

19 So, in that context, we need to 

20 understand as Bob, I think, said very, very well 

21 that that involves changing the way industries 

22 do business. 
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1 The construction industry, the 

2 professional - it's not just construction 

3 either. There's lot of industries involved 

4 here. 

5 The way this program found those 

6 industries when it was first initiated initially 

7 as a regulatory change and later as a statutory 

8 change, were as discriminatory industries. And 

9 we are still to this day seeking to change 

10 discriminatory aspects of those industries and 

11 we cannot stop. We're obligated to continue to 

12 do that. 

13 DOT specifically if it is to operate 

14 a race-conscious DBE program, has an obligation 

15 to ensure that its own regulations and its own 

16 policies do not either permit or promote 

17 discrimination in any way. 

18 So, it's terribly important to 

19 understand in that context that court after 

20 court after court has identified bid shopping, 

21 bid shopping as - especially bid shopping of DBEs 

22 as discriminatory activity, period. 
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1 It's cited as part of the record of 

2 discrimination in many of the constitutional 

3 cases that have come up and that you all relied 

4 on and that I know you know all too well. 

5 So, given the fact that that is true, 

6 given the fact that bid shopping is a problem and 

7 is a context in which discrimination is rife, DOT 

8 is obligated to stop it. We must take steps to 

9 stop it. All of us must, both the recipient and 

10 DOT. 

11 My own personal opinion is the 

12 easiest and best way to stop bid shopping is to 

13 make the key components of DBE, the proposed DBE 

14 activity in the contract or in the alternative 

15 good faith efforts, part of the materials that 

16 must be permitted, that must be submitted as a 

17 component of responsiveness at the time of bid 

18 opening, at the time of bid letting. 

19 I understand there are difference of 

20 opinions about that, but that's my opinion. I 

21 think it works the best. 

22 And one thing that hasn't been noted 
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1 here today, it's almost as if this is a brand new 

2 concept that's never been thought of before. 

3 It's terribly important that we all 

4 acknowledge there are recipients throughout 

5 this country that require the DBE information 

6 and GFE as an element of responsiveness right 

7 now. 

8 And I'm fairly certain that some of 

9 the entities that have spoken here today have 

10 members who actually operate in those 

11 jurisdictions. 

12 That is occurring and I think it's 

13 really worthwhile for you to consider talking to 

14 some of those entities and getting some 

15 information, but the bottom line is this: If you 

16 don't want to make it part of a responsiveness 

17 determination, that is definitely something 

18 that DOT can consider. 

19 What you cannot consider is 

20 permitting bid shopping to continue. So, the 

21 extent that there's a context in which it's rife, 

22 you must identify that context. 
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1 If you don't want to eliminate it by 

2 responsiveness determinations, you must find 

3 another way to eliminate it. 

4 And another issue we've talked about 

5 a lot today that's open to you is define it, 

6 prohibit it and enforce the heck out of it. Go 

7 after individual entities that are perpetrating 

8 this particular activity. 

9 I understand the implications of 

10 that for you in terms of time, attention and 

11 everything else. We've talked about how hard it 

12 is to place certification. This is another big 

13 step and it would require getting people out in 

14 the field to watch this and taking testimony, but 

15 there is no doubt that we can simply permit bid 

16 shopping to continue. We must take steps to 

17 identify it and eliminate it. 

18 Thank you so much and thank you for 

19 sitting here all day and thank you to everybody 

20 else in here who sat here all day. I think 

21 everybody who's still here should get some sort 

22 of medal of honor for like, I don't know, like 
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1 Survivor or something. We've made it this long. 

2 MS. VACCARELLA: Thank you. 

3 Cleveland Carter. 

4 (No response.) 

5 MS. VACCARELLA: Cleveland Carter. 

6 (Discussion off the record.) 

7 MR. HUBBERT: Brad Hubbert 

8 representing NAACP, DeKalb branch. Two things 

9 I would like to mention in relationship to Item 

10 Number 3. 

11 One is that the - I mentioned it 

12 earlier. The DBE goal, the DBE goal is much too 

13 low if all of these groups going to be 

14 participating in the DBE goal. 

15 We have a DBE goal of 10 percent and 

16 let's say in the state of Georgia, let's say we 

17 was at our 10 percent level. 

18 There's no rationale for a DBE firm 

19 to spend all their life savings to invest and 

20 going into the Department of Transportation 

21 business. 

22 The goal is already achieved. 
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1 There is no market. So, if you want to increase 

2 the development and substaining of small DBE 

3 firms, the goal must be increased. 

4 I'm going to say that again. If 

5 you're really looking at the marketplace, there 

6 is no prudent businessman that will invest his 

7 money to go into business where the market has 

8 already been consumed. 

9 If you can identify a person that 

10 will do that unless he had a brand new invention 

11 that wasn't on the market that could save 

12 millions and millions of dollars, okay, they 

13 wouldn't do it. So, that's what we need to 

14 really look at if we're truly serious about it. 

15 And the young lady has already 

16 talked about discrimination, which I've talked 

17 about, because that's the main purpose and 

18 that's the main problem that we have in the 

19 economic system. 

20 The other thing I would say in 

21 looking at our DBE goals, some of the weakness 

22 that I would like to point out and it has already 
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1 been pointed out, but I just reiterate it, 

2 because it's not often that you get six, seven 

3 persons to address who are in a position to make 

4 a difference. 

5 Okay. It's not that often that you 

6 get that opportunity. So, we better make good 

7 of it while we got that opportunity. 

8 So, the weakness in the program, one 

9 is that it need a strong margin process in place 

10 with legible, attainable goals that are 

11 objective. 

12 Okay. Now, if you got a program in 

13 place and you're not monitoring it to make sure 

14 that it's doing what the design objectives are, 

15 then we might as well not have a program in place. 

16 Okay. Two, we need to correct the 

17 misuse, fraud and abuse of the program. There 

18 should be penalties and they should be known. 

19 They should be imposed, you know. 

20 I can rip off the government for 

21 millions of dollars and I get a slap on the wrist, 

22 okay, you know. 
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1 Instead, we need a tracking system 

2 that minority - to make sure that minority - once 

3 they have gone through all the rigmarole of 

4 getting certified, that they have an opportunity 

5 to make their money back, they getting 

6 contracts. So, we certify the folks and then we 

7 throw them - kick them to the curb and we look 

8 at two years from now they've been certified for 

9 five years and still haven't gotten a contract, 

10 because the volume of contracts is not available 

11 for them to truly successfully be in, in addition 

12 to the discrimination that's on top of that, 

13 okay. 

14 And four, the goal of the DBE 

15 program, I already mentioned that, but should be 

16 truly looked at being an increase. 

17 And, again, I want to thank you for 

18 listening and thank you for the opportunity to 

19 speak with you and God bless you. 

20 MS. VACCARELLA: Thank you. 

21 Jerry Hanner. 

22 (Speaking off mic.) 
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1 MS. VACCARELLA: Why don't you wait 

2 until you get to the microphone, please. 

3 MR. HANNER: Okay. My name is Jerry 

4 Hanner. I'm from Chattanooga, Tennessee and 

5 from JM Hanner Construction Company. 

6 When I saw this topic, I was looking 

7 at one thing that was involved in it and it was 

8 talking about whenever someone put a fair effort 

9 in doing something or a good faith effort, this 

10 - I put together something before I came, because 

11 we need to look at some real numbers. 

12 And I, you know, when we talk about 

13 the program, you got to ask yourself why 

14 something doesn't work. 

15 And being in construction, we have 

16 a thing where we say we'll get the foundation 

17 squared up, we'll get it right, then we can go 

18 where we want to go. 

19 Everybody is mentioning something. 

20 You mentioned the meaning of the program, why was 

21 it initiated? Why did we even start it at the 

22 beginning? 
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1 I'm looking at some numbers here 

2 from 1619 up to 2013. There is roughly about 394 

3 years of a lifespan. This really represents the 

4 lifespan of blacks in this country. 

5 You realize that the first 240, 245 

6 years we were in slavery. We had no rights to 

7 anything. The biggest set-aside for America 

8 was when white men set aside all the revenue in 

9 this country for themselves. 

10 Then we went from that time, you 

11 know, we had a false promise, because we had the 

12 Emancipation Proclamation. We had a false 

13 promise that said, you know what? We're going 

14 to be treated like citizens. 

15 We went another 99 years fighting 

16 for civil rights in this country. 99 years we 

17 went fighting the Jim Crow laws, the changing of 

18 the laws, the structures, programs and the sort, 

19 because, you know what? The first Civil Rights 

20 Act was back in 1874. So, this is no new thing 

21 for civil rights. 

22 So, here it is now. We've got all 
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1 this going on and here we're doing this fighting 

2 for another 99 years. And then we say, wow, with 

3 all the bloodshed coming down with Dr. King and 

4 all the other brothers, some being hung, some of 

5 us put in jail, we said, wow, here we got Title 

6 VI, civil rights, affirmative action. We've 

7 got a shot at leveling the playing field, and 

8 look at what happened. 

9 We done went another 49 years and we 

10 still don't have a structure for it, because, you 

11 know what? We're dealing with something called 

12 good faith effort. 

13 I went to Hamilton County before I 

14 left in Chattanooga and talked to the city 

15 attorney there. And I told him, I said, wow, we 

16 got another school coming up in the city here. 

17 They about to be at East Brainerd School. And 

18 I said, what's the goal? 

19 He said, oh, hell, you know we got 

20 a 10 percent goal. It's a good faith effort. I 

21 said, look, man, how many - how many black people 

22 have got a contract over the years? 
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1 He said, nobody gets any contracts. 

2 He said, but we have a good faith effort. 

3 But what I'm saying is if we're going 

4 to have a program, the reason it doesn't work and 

5 the reason we in here struggling with how we 

6 should structure this rule or this certification 

7 paper or something of that nature, it's because 

8 we're not even dealing with the foundation at 

9 all. 

10 You can't take a person that's 

11 prejudice, that's racist and then turn around 

12 and he's the one that had the whip on our back 

13 all the time and then turn around and ask him, 

14 say, with good faith, will you give this man a 

15 job? 

16 See, hearts has to be regulated. 

17 And what that means is that we ask y'all to put 

18 some regulations in the heart. To put something 

19 there that says, no, you're going to have a DBE 

20 on the job. 

21 My thing is, you know, naturally I'm 

22 favoring black America, because, you know, I'm 
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1 64 years old, I'm looking at these numbers here. 

2 I talked to my dad before I left. 

3 He's 89. He's asking, do you think we got a 

4 shot? 

5 I said, I don't know, Dad. They run 

6 these years past us so fast. I don' know what 

7 it's going to come to, but you got to look at this 

8 number. 

9 I mean, all the time that we've been 

10 in this country and then we ask for 10 percent 

11 set aside and somebody act like that's much, if 

12 you're going to level the playing field, then it 

13 ought to be somewhere near 30 or 40 percent 

14 that's given back to the minorities. 

15 We have no - we have no beef with the 

16 women, other minorities that's in this country 

17 that's piggybacking on the backs of the blacks 

18 that doing the movement. We don't have no beef 

19 with that. 

20 What we do have a beef with is that 

21 now that we've gone through that and we look up 

22 and we're receiving less than one percent of the 
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1 federal highway money. 

2 Now, look, if we go back to the 

3 original origin of the theme and stop asking 

4 people that don't have a heart to be fair with 

5 people, that's not going to work. 

6 What we need to do is we set up these 

7 goals and say either you're going to have - and 

8 I'm listening to these people talking about what 

9 minority contractors can do. 

10 I just thought about a thing, 

11 Skanska Construction, I'm sure you all have 

12 heard of them. One of the largest construction 

13 companies in the world. They came to 

14 Chattanooga. They built Blue Cross and Blue 

15 Shield. 

16 They needed to - I know I'm running 

17 out of time. They needed some minorities on the 

18 job. 

19 They came to us and they said, hey, 

20 look, see, what we need to do is structure some 

21 so you all can get - we worked with them on their 

22 project. 
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1 They came in, they set it up, they 

2 made arrangements. I said, well, look, now, you 

3 know now we cannot run no 30 people on no job and 

4 make that kind of payroll. 

5 They said what we will do is we will 

6 pay you every week. What we want you all to do 

7 is come in and do the job. Look, people, it's 

8 about adjustment. 

9 If you're going to level the playing 

10 field, you know you're not going to find a 

11 minority contractor that's already trained. 

12 You know you're not going to find 

13 him. Okay. I'm going to sit down. You know 

14 you're not - you know you're not going to find 

15 him. 

16 So, why in the world do you come up 

17 here and act like that we can't find them? You 

18 know you're not going to find them. You 

19 deprived them for all these years. You haven't 

20 developed any of them and you're going to act 

21 like you're going to find them? This is 

22 nonsense. 
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1 Title VI said that there was 

2 training money to develop companies. We needed 

3 to be developing and tying them into every line 

4 time, as the lady said, on every line item that 

5 you have, there should be somebody on there if 

6 they can only do one percent of it. 

7 Maybe they can't do all the dirty 

8 work, but let them do one percent of it. And I 

9 guarantee you if you regulate this, what will 

10 wind up happening is we will develop some 

11 confidence, because the whole thing is about - 

12 the whole thing was about working out the 

13 discrimination. The whole thing was about 

14 leveling the playing field. 

15 And when you look at it, you can't 

16 level it if you're going to look back at somebody 

17 that's been hobbled with chains as LB said, and 

18 then you going to say, okay, now, get out here 

19 now and you compete like the rest of us. 

20 You going to have to develop us. 

21 And all this cost like you can't find - every time 

22 you turn around, we filling out some kind of 
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1 certification papers. 

2 Everybody every time you turn, they 

3 got a list of DBEs for everybody to get on and 

4 now all of a sudden you can't find us. 

5 So, you know, you're going to have 

6 a heck of an experience just looking at a sheet 

7 that you already got? No, this is bull corn. 

8 If we're going to do something, 

9 let's do it. Because, look, we're running out 

10 of years. 

11 That's a lot of years. All the 

12 years that black America has been here and this 

13 is as far as we got. And we ask ourself the 

14 question, where is the justice? How many more 

15 years we got to go to, to find it? 

16 Surely you all, surely you all can 

17 have a heart to say, you know what? We're going 

18 to listen. Black people need a set-aside. 

19 You all had the 200, 300 years of 

20 set-aside for white America. You got to have it 

21 where black people at least have something set 

22 aside, or they won't give us nothing. 
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1 If we're going to have 30 percent, 

2 50 percent of it going to blacks should be in the 

3 power. 

4 We have no problem with other 

5 minorities and women. You know what? I got 

6 daughters myself. I got, you know, I got 

7 brothers, I got a lot of different people that's 

8 in my life. 

9 Divide it up. Set it up and tell 

10 them they're going to have to help us on the job 

11 and let's get this program working. 

12 MS. VACCARELLA: Thank you. 

13 Denise Richardson. 

14 MS. RICHARDSON: Thank you for the 

15 opportunity to comment today. I am Denise 

16 Richardson, managing director of the General 

17 Contractors Association of New York. 

18 Our members include minority, 

19 women-owned firms, DBE firms, as well as 

20 graduate DMWBE firms. And so, my comments today 

21 reflect the comments across our entire 

22 membership. 
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1 The goal of the DBE program is to 

2 level the playing field and to increase 

3 opportunities for disadvantaged businesses. 

4 And so, the question that has to be 

5 asked of all of the proposed rules are, do the 

6 rules actually help achieve those goals? 

7 And I will tell you from the 

8 perspective of someone who represents both prime 

9 contractors, subcontractors, as well as the 

10 DMWBE community, that the proposal to require 

11 the DBE prices with the bid submission will not 

12 help the overall goal of increasing the capacity 

13 of the DBE pool of businesses. 

14 People have spent a lot of time today 

15 talking about bid shopping, but I will tell you 

16 that as a matter of fact, the prime contractor's 

17 bids as well get shopped by the agencies 

18 frequently. 

19 That's called a best and final 

20 offer, and it happens frequently in all kinds of 

21 procurements. 

22 Moreover, with a bid we have to deal 
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1 with the issue of last-minute agenda, changes by 

2 the Agency, and now for the DBE community making 

3 sure that every DBE is bidding on the identical 

4 scope of work, which actually works to the 

5 disadvantage of the smaller DBE firms, the 

6 mid-range DBE firms and the larger DBE firms. 

7 Because the process that we have now where we are 

8 able to work with the DBEs once the particular 

9 prime contractor has won the bid, allows each DBE 

10 to identify the scope of work that it can perform 

11 best and submit the price to us that will work 

12 in your best interest and allows us to tailor 

13 payment terms as other people have talked about 

14 today. 

15 When you change the rules to require 

16 that the DBEs submit all of their prices with the 

17 bid, what you have done is you have made the DBE 

18 program into a price-based system, because we 

19 are submitting our bid with the goal of being the 

20 low bidder. 

21 And so, therefore, we will not have 

22 the time or the ability to tailor the scopes, 
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1 work with the individual DBEs and identify the 

2 way that makes that pool of DBEs the most 

3 successful on our project. It will become a 

4 scope and price-based system. 

5 And if you believe that that is the 

6 best way to increase DBE capacity, then that is 

7 where you will go. But I will tell you from 

8 experience, and you have heard a lot of the DBE 

9 and MWBE firms here today talk about the 

10 difficulties that they have managing all of the 

11 required paperwork, they have limited 

12 estimating staffs, they have limited 

13 administrative staffs. 

14 With the rule that requires the DBEs 

15 to submit their bids to all of the prime 

16 contractors at the time of bid, you will be 

17 adversely affecting their ability to manage 

18 their work and to manage their businesses. 

19 They will have to increase their 

20 estimating staff, and they will also have to make 

21 sure when they submit a bid, that every prime 

22 contractor scope of work that they receive, that 
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1 they look at it. 

2 Because each prime contractor will 

3 break up its subcontract packages differently 

4 based on how the prime contractor is going to do 

5 the job. 

6 So, it will not be as simple as the 

7 DBE just taking its price and submitting it to 

8 four or five or possibly as many as 10 prime 

9 contractors. 

10 Each DBE will have to look at each 

11 scope of work and submit each individual price. 

12 I think in the long run when you look 

13 at the issue of growing DBE capacity, you need 

14 to very carefully look at the fact of requiring 

15 the DBE prices to be submitted with the bid. 

16 Moreover, I will tell you that that 

17 will end any meaningful opportunity for a 

18 mentor/protégé program, because your DBE 

19 program now becomes basically a miniature 

20 version of the prime contractor relationship 

21 that we have with the agencies, which is you 

22 submit a bid, you hope it's the lowest price and 
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1 you get the work. 

2 That's what the DBE program will 

3 become and my argument is, is that that will work 

4 not in the best interest of the DBE population. 

5 Thank you. 

6 MS. VACCARELLA: Thank you. 

7 Kathryn D'Agostino. 

8 (No response.) 

9 MS. VACCARELLA: Frank Cara. 

10 (No response.) 

11 MS. VACCARELLA: Sharon Maxwell. 

12 (No response.) 

13 MS. VACCARELLA: Nicholle O'Malley. 

14 (No response.) 

15 MS. VACCARELLA: Frank Lopez. 

16 (No response.) 

17 MS. VACCARELLA: Leslie Saunders. 

18 (No response.) 

19 MS. VACCARELLA: Carl Brown. 

20 (No response.) 

21 MS. VACCARELLA: Harley Hampton. 

22 (No response.) 
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1 MS. VACCARELLA: Okay. That closes 

2 the session for scheduled speakers. We'll now 

3 open the session for people who want to comment 

4 or rebuttal. 

5 I want to remind people online to the 

6 webchat that comments should include your name, 

7 organization and the topic area. This is Topic 

8 Area 3. 

9 If you're also responding to a 

10 commenter in the room, please also put that in 

11 your online comment. Speakers are limited to 

12 one minute at this section. 

13 Amy Hall. 

14 MS. HALL: Amy Hall with Ebony 

15 Construction, Toledo, Ohio. I think it would 

16 behoove all of us to kind of bring this all back 

17 together and come up with what the goal is and 

18 what's in the best world a win-win situation for 

19 everybody. 

20 What's a win for the prime 

21 contractor, what's a win for the DBE contractor 

22 and what's the win for the DOTs? 
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1 Obviously the goal is to facilitate 

2 or ensure that the DBE is getting the business 

3 in a timely fashion in which they are - their bids 

4 are going to be used for the job. 

5 So, why don't we come up with 

6 something that at the time of bid there's a 

7 question to the prime contractor? Did you reach 

8 your goals? Yes, no, maybe so. 

9 And then come up with a reasonable 

10 time after, 24, 48 hours, to submit the 

11 additional documentation by both the DBE, as 

12 well as the prime contractor. 

13 What it does is it eliminates the 

14 whole issue at time of bid and what's going on 

15 there and all the frenzy at the time of bid, but 

16 yet it's still providing the DBE and reducing the 

17 chance of price shopping. 

18 And so, let's come up with a 

19 solution. Let's not cut off the nose to spite 

20 the face because this group doesn't understand, 

21 or this group has a position and this group has 

22 a position. 
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1 Let's kind of move to something in 

2 the center, which is a win-win for everybody. 

3 Let's have the DBEs being used and having them 

4 named in a timely fashion which doesn't impact 

5 the prime contractor from submitting their bids 

6 at the time of bid proposals and when bids are 

7 due and reduce bid shopping. Thank you. 

8 MS. VACCARELLA: Susan Wendt. 

9 MS. WENDT: Susan Wendt from Wendt 

10 Productions. One of the things that I want to 

11 make sure that we don't do today is to lose sight 

12 of the fact that there is an awful lot that's 

13 right with the DBE program. 

14 I partake in a number of things as 

15 a part of the leadership for the U.S. Women's 

16 Chamber of Commerce, including a couple of weeks 

17 ago an intimate house meeting for a couple of 

18 hours with Congresswomen Nydia Velazquez, Donna 

19 Edwards who sits on the Transportation 

20 Committee, and later Nancy Pelosi. The topics 

21 of conversation were WOSBs, contracting and the 

22 future landscape. 
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1 My comments about the Department of 

2 Transportation during this meeting were very 

3 positive. 

4 Some time before that I took part in 

5 a Senate roundtable that was called by Senator 

6 Landrieu from Louisiana. It involved 

7 government agencies that were making their goals 

8 in women-owned small business contracting and 

9 those that were failing miserably. 

10 One of which was the Department of 

11 Energy who failed two years in a row with less 

12 than one percent contracting to women-owned and 

13 diversity businesses. 

14 When you look at the Department of 

15 Transportation in comparison with a lot of the 

16 other agencies, it's a real shining beacon. And 

17 you need to be commended for that, too, for the 

18 efforts that you put forth. 

19 The DBE, what the Department of 

20 Transportation does with DBEs and the results 

21 that they garner in growing small disadvantaged 

22 businesses is much to be admired. 
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1 In an effort to try and bring value 

2 to the Department of Transportation as the small 

3 business liaison for the U.S. Women's Chamber of 

4 Commerce as I travel the country on business, I 

5 make it a point to meet not only with the 

6 representatives from the Department of 

7 Transportation, but also the prime contractors 

8 and the DBEs and talk with all of them to try and 

9 garner their feedback of what they're seeing and 

10 what they're doing. 

11 And one of the things that I have 

12 been noticing is that in the past month, whatever 

13 you're doing is really energizing in the field. 

14 There is quite a bit of a difference. 

15 I noticed that especially in talking 

16 with the members who are on the front lines with 

17 the Department of Transportation, I believe that 

18 you've been doing some additional training, 

19 you've really tightened up on things and I've 

20 been able to firsthand be a part of some of the 

21 things that you have been doing such as the 

22 Southern Transportation Civil Rights Symposium. 
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1 So, I think that - and the mere fact 

2 that you are here today listening to all of us 

3 trying to improve the landscape in the program, 

4 I think that that deserves appreciation. So, 

5 thank you. 

6 MS. VACCARELLA: Thank you. 

7 Bob Ashby. 

8 MR. ASHBY: Just as a point of 

9 information, the proposal as I understand it 

10 applies to standard low bid IFB contracts, not 

11 negotiated procurements like you get for a lot 

12 of mega projects. So, the issue doesn't really 

13 arise there. 

14 With the possible exception of 

15 something Amy Hall just said, I haven't heard a 

16 word from the prime contractor organizations 

17 that bid shopping is a problem, a bad idea. In 

18 fact, it seems like a pretty good way of cutting 

19 costs. 

20 I'd like to hear suggestions, and I 

21 think Amy was looking for this, about if we don't 

22 go in the direction that the proposal does in an 
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1 attempt to deal with bid shopping, what 

2 direction do we go in? What alternative is 

3 there to deal with something that I think 

4 genuinely is regarded as a problem? 

5 And the other thing is if there are 

6 costs involving good faith efforts in terms of 

7 reporting information to the states, somebody is 

8 going to have to incur those costs sooner or 

9 later anyway. 

10 Timing the submission later doesn't 

11 avoid all the costs. It simply avoids the 

12 opportunity for bid shopping. 

13 I heard a complaint about that 

14 people don't listen. I think oftentimes people 

15 do listen. They consider things on the merits 

16 and they justifiably say "no." That's not quite 

17 the same thing as not listening. 

18 And finally when we hear expressions 

19 of sympathy and support for the objectives of the 

20 program, consider the source. I tend 

21 personally to be a little skeptical of such 

22 expressions from people who have repeatedly sued 
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1 to kill the program, you know, and I think that's 

2 something to think about. 

3 MS. VACCARELLA: Thank you. 

4 Dwayne Sampson. 

5 MR. SAMPSON: Good afternoon again. 

6 Dwayne Sampson, president/CEO, Transportation 

7 Diversity Council. 

8 Throughout today my comments have 

9 been represented by my members across the 

10 country. And those include recipient agencies, 

11 primes and DBEs. 

12 I asked this panel to look to your 

13 mission, to search your conscious and then go to 

14 the DOT audits for guidance and purpose as you 

15 move forward in making your final decision. 

16 I'll add now that there are no 

17 specific quantifiable costs associated with 

18 requiring good faith efforts documentation when 

19 bids are due. 

20 Contractors argue that submitting 

21 DBE information at the time of bid is cost 

22 prohibitive, because they need time to clarify 
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1 quantities, etcetera, etcetera. 

2 However, postponing submission of 

3 DBE documentation creates an environment where 

4 bid shopping occurs and DBEs are subject to the 

5 demands of prime contractors if they want to be 

6 selected for work. 

7 We fully support DOT's efforts to 

8 clarify what actually constitutes good faith 

9 efforts. 

10 It is important to note that good 

11 faith efforts only come into play on projects 

12 that are considered race conscious, that they 

13 have established DBE goals set. 

14 And in closing, two of the main goals 

15 of the DBE program is to level the playing field 

16 and to remove both real and perceived burdens on 

17 which these firms can fairly compete for 

18 purchasing and contracting dollars. 

19 I can tell you that my members that 

20 are DBEs, they are suffering. And how we go 

21 about leveling the playing field as you move to 

22 make your decision would be very helpful. Thank 
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1 you. 

2 MS. VACCARELLA: Thank you. 

3 Ram Tirumala. 

4 MR. TIRUMALA: Ram Tirumala from 

5 Distinct Engineering Solutions. Now, I want to 

6 share some of my personal experiences from the 

7 current DBE program and how I think some of these 

8 requirements should be there. 

9 For example, when we were bidding on 

10 the Tappan Zee Bridge, we spent - as a DBE, we 

11 were prequalified based on the qualifications of 

12 our staff first. 

13 So, when somebody says we are not 

14 qualified, I think that is wrong. We are 

15 getting our DBE certification because of our 

16 qualifications. 

17 Then, we worked quite hard along 

18 with the proposers. During the last minute, we 

19 were not given any chance to participate. 

20 In a contract like that, we have 

21 spent three months that increase our overhead 

22 which affected us in future projects. Because 
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1 of the high overhead, nobody wanted to use us 

2 later on. 

3 So, to me, had the particular 

4 contract mandated including the name of the 

5 contractor, a DBE firm, we would have a better 

6 opportunity to work on the project and it will 

7 help us to recover some of the overhead expenses 

8 we have incurred. 

9 Now, it is important in most of the 

10 jobs that we have worked so far in New Jersey/New 

11 York area with large firms, some of them are 

12 here, we have helped in the preparation of the 

13 cost estimation. 

14 After they estimate, they want to 

15 find somebody else who is cheaper than us, which 

16 is unfair. 

17 I think from that angle they should 

18 have the concept of including the names 

19 identifying it as a part of the bid. Thank you. 

20 MS. VACCARELLA: Thank you. 

21 Naomi Glean. 

22 MS. GLEAN: Good afternoon. I'm 
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1 Naomi Glean. I'm the MWDBE liaison from John P. 

2 Picone, Incorporated, and I'm coming here to 

3 give a little real-life perspective to the topic 

4 in terms of we're looking at DBE subcontractors 

5 and we're looking at DOT, but most likely DBE 

6 subcontractors are certified with other 

7 agencies. They're bidding on many projects for 

8 different agencies all at the same time. 

9 There's also time restraints that go 

10 along with contracts. There are some contracts 

11 that are out for bid for a year and you've been 

12 working on - as a prime contractor, we're working 

13 on the bids for a year. We have lots of time to 

14 sit down and talk to a subcontractor and find 

15 everybody. 

16 There are some contracts that we 

17 work on for a month, for two weeks, for one week, 

18 and the last minute we think we can pull this 

19 together, we can do this. 

20 So, if you're making one regulation, 

21 that's going to apply to everything. So, you 

22 have to take everything into consideration. 
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1 I also don't want - sorry. Last 

2 point. I also don't want us to minimize the 

3 power of the DBE. 

4 I am an attorney and I feel that 

5 having a subcontract drawn up, thrown together 

6 without meaningful discussion, without knowing 

7 - price is not the only thing that's in a 

8 subcontract. 

9 You have insurance regulations that 

10 can be negotiated. You have scope of work that 

11 can be negotiated. You have materials that you 

12 need to - that they need to go over. 

13 You shouldn't also be - the prime 

14 contractor shouldn't also be bullying the DBE to 

15 sign a subcontract because the bid is coming up. 

16 Thank you. 

17 MS. VACCARELLA: Thank you. 

18 Kenneth Canty. 

19 MR. CANTY: Good afternoon. Kenneth 

20 Canty, Charleston, South Carolina, Freeland 

21 Construction Company. 

22 Just to address really quickly the 
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1 comment about having the DBE on - a commitment 

2 to the DBE before the bid is due, a lot of these 

3 jobs coming out design build, we don't even know 

4 what the job is except build a bridge across a 

5 river and it's got to be this high by this long. 

6 You can't really commit resources or 

7 commit numbers to that until you - after the job 

8 is committed. 

9 That being said, the solution, and 

10 we all want to come up and offer solutions, 

11 there's a saying I have. I have my version of 

12 the Golden Rule. Be as close to the goal. You 

13 have to be a prime. You have to be on that prime 

14 contracting team. 

15 I look at this board right here and 

16 that's what - this is what this is about is 

17 creating wealth, creating jobs in our community. 

18 What would go a long way is just 

19 encouraging, mandating however it needs to be on 

20 jobs, let's say, north of $50 million, some 

21 number, some number that makes sense on these 

22 large jobs that us USDOT when we're putting 
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1 federal funds in, we will look favorably on a 

2 team whether it be Skanska, whether it be 

3 Dragados, whether it be E.E. Cruz, that has a 

4 qualified DBE on that prime team and we're 

5 signing it on the team. 

6 You can't bid shop that guy away. 

7 I've been on those teams with Skanska. I've 

8 been on those teams with Turner. 

9 You try to push them off. Hey, I was 

10 in the presentation with you. Where do you 

11 think I'm going? I'm close to the gold now. 

12 I'm getting - I'm getting those additional 

13 profits now because of that. 

14 I think that's something you guys 

15 can do to help solve this problem. Thank you. 

16 MS. VACCARELLA: Thank you. 

17 Kima Norflet. 

18 MS. NORFLET: Kima Norflet of Norflet 

19 Strategies and Solutions. I'm based in 

20 Arlington, Virginia. 

21 My company primarily helps certify 

22 new small and emerging businesses with DBEs, 
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1 CBEs. So, I work with VDOT, MDOT and I cover 

2 D.C., Maryland and Virginia. 

3 What I was noticing, I'll piggyback 

4 on the young lady that was up here, when the 

5 companies are submitting their bids, I agree 

6 there are subcontract agreements that have to go 

7 into place and they can't be shabby. 

8 Also, I've talked to defense 

9 individuals and they say they put their 

10 contracts after the fact. They don' always 

11 close the deals beforehand. 

12 So, if they are putting the bids in 

13 at the same time, those deals aren't getting 

14 closed until after. So, that's a problem, too. 

15 Some of the old information from 

16 earlier I wanted to just comment on. There are 

17 certain agencies that are certifying the 

18 companies and we were talking about compliance 

19 and how people can get rid of the fraud. 

20 What I've noticed in submitting the 

21 bids - not the bids, but the certifications for 

22 companies, because I've covered various 
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1 industries, is that depending on - I'm going to 

2 talk to this region - whether it's MWAA, VDOT, 

3 MDOT, DDOT, any of those companies depending 

4 who's certifying, what I'm noticing is there's 

5 a difference in the quality of the work being 

6 done and the time factor and how that's being 

7 done as well. 

8 So, I don't know who's tracking 

9 that, but perhaps you could track your agencies 

10 who you are using to certify and see who's doing 

11 the better jobs. That could help the problem as 

12 well. 

13 MS. VACCARELLA: Thank you. 

14 Rich Juliano. 

15 MR. JULIANO: Thanks. I'm hesitant 

16 to engage with some very skilled legal counsel 

17 and advocates on this issues. Particularly 

18 those who are now unfettered by their past 

19 positions and can share what apparently were 

20 their true opinions on all this, but let me 

21 mention a couple of things. 

22 Alternative procurement has been 
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1 mentioned a number of times and it's very 

2 relevant. There needs to be a discussion about 

3 how all this plays into that. 

4 Federal Highway Administration has 

5 an Everyday Counts Program promoting the use of 

6 alternative procurement for good reason. How 

7 does that work with the DBE program? 

8 There are complexities to that that 

9 we're starting to run into and there are some 

10 important cases along those lines. 

11 As far as states that currently 

12 require submissions at the time of bid, that in 

13 itself, the fact that it's happening is not a 

14 justification to make it nationwide, but I would 

15 note that there are some states, Illinois in 

16 particular is a good example where they changed 

17 their state law a couple years ago. They used 

18 to not require it. They now do. 

19 There have been a number of 

20 repercussions with that. The Illinois Road and 

21 Transportation Builders Association has 

22 information. They have submitted comments. I 
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1 believe they're going to submit more comments 

2 this month and I would urge you to take a look 

3 at the before and after there. Thank you. 

4 MS. VACCARELLA: Marcela Alcantar. 

5 MS. ALCANTAR: Just wanted to add 

6 that pretty much all the conversation so far we 

7 have had is related to construction. 

8 When it comes down to setting teams 

9 for professional services like, an example, the 

10 Columbia Crossing, $173 million is spent on 

11 environmental assessment. And probably not 

12 even one percent minority in there. 

13 And when I ask for opportunities in 

14 there, they tell me, well, we're in the planning 

15 phases or preliminary engineering. 

16 And I says, well, that's what I do. 

17 Well, wait for the construction. Wait for the 

18 construction. So, 173 million later and we're 

19 still waiting for the construction. 

20 Which as a small DBE, my portion part 

21 as a professional services in the construction 

22 is minimum compared to $173 million in a project 
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1 that still hasn't come. 

2 So, one thing to think about it is 

3 that for professional services, there is no such 

4 thing as give me a low bid or give me your 

5 qualifications. 

6 Because when it comes down to 

7 qualifications, these are qualifications of 

8 their friends in long-term relationships that we 

9 can't build with professional services. Thank 

10 you. 

11 MS. VACCARELLA: Thank you. 

12 Does anybody else have any comments? 

13 MS. ESTER: Toya Ester, J&B Steel. I 

14 just want to reiterate the fact what Rich had 

15 said that Illinois does - has changed their law 

16 and they do require the contractors to - 

17 subcontractors to be submitted along with 

18 Indiana. 

19 But to go back to the state of 

20 Illinois, we had to deal with a contractor in the 

21 state of Illinois that basically, you know, no 

22 one holds 10 percent retainage on, you know, 
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1 subcontractors or contractors anymore, but that 

2 same contractor who listed us held retainage. 

3 They didn't call it retainage, but 

4 they made us sign a contract to keep that job 

5 holding more than 10 percent of our money until 

6 the project was over. 

7 So, there is ways that they're 

8 coming across with different items to still kind 

9 of stronghold people or subcontractors. Thank 

10 you. 

11 MS. VACCARELLA: Anyone else have any 

12 comments? Only if you speak at the microphone. 

13 MR. HANNER: My name is Jerry Hanner. 

14 I wanted to comment when she said that about them 

15 holding their retainage. 

16 We really got to look at these 

17 contractors. Some of them, the TDOT may pay 

18 them, sometimes they go as long as 90 days before 

19 they get back to us. 

20 There's no reason for us to be 

21 funding jobs like that. We, you know, we don't 

22 have that strong arm. 
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1 This is one issue that needs to 

2 really be addressed. I've seen a lot of my good 

3 friends go under because of this. Because if 

4 your line of credit is not strong enough to carry 

5 you out there and they know that, and then once 

6 they hold the money out there, then you run into 

7 trouble, you can't staff, you can't get to the 

8 job site, then they want to pull the contract. 

9 So, these are some of the things that 

10 need to be addressed. And, like I said, we've 

11 gone to contract compliance and asked for it. 

12 We talked to them about that. 

13 I just visited our deputy 

14 commissioner and we said we got to have some 

15 things done, but it seems to be falling on deaf 

16 ears. 

17 And my thing is, is that I'm a little 

18 passionate about it, because, like I said, it's 

19 something I've been involved in now for about 20 

20 years. 

21 And for some reason or another, 

22 these things are not hard to fix. And we keep 
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1 telling them over and over and over that this is 

2 - this is some of the games that they're playing. 

3 And these contractors that coming 

4 in, we just had to tell a contractor not too long 

5 ago and said, we won't pay a retainage, because 

6 the state's not holding it on you and these are 

7 some of the things that need to be addressed. 

8 Thank you. 

9 MS. VACCARELLA: Thank you. Okay. 

10 Last call for comments. 

11 (No response.) 

12 MS. VACCARELLA: Okay. That ends 

13 our formal listening session today. I'd like to 

14 turn it over to Jo Anne Robinson at the Office 

15 of General Counsel for closing remarks and thank 

16 you very much. 

17 MS. ROBINSON: Yeah, I would like to 

18 on behalf of the Department and as well as the 

19 members of our panel, thank you all very much for 

20 the time you've taken today to join us for this 

21 listening session. You've provided us very 

22 valuable information. 
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1 For those of you who are 

2 participating through the web conference, we 

3 appreciate your time and effort as well. It has 

4 been time very well spent. 

5 Just a couple of reminders before we 

6 end the day and I know many of you already are 

7 aware of the fact that our docket is going to 

8 remain open until December 26. So, we encourage 

9 every one of you that was here today, as well as 

10 those who are participating virtually to take 

11 advantage of that opportunity. 

12 Give us as many comments as you'd 

13 like based on what you've heard today, based on 

14 what's already in the docket, or based on your 

15 reassessment, if applicable, of the proposed 

16 rule changes in light of what you have heard here 

17 today. 

18 We also are going to submit in the 

19 docket a transcription of this session, all the 

20 comments that were received today, as well as the 

21 comments that we have received through the chat 

22 rooms. And I'm hoping that we've received many. 
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1 It's been a very productive session 

2 for all of us. And so, again I thank you for your 

3 participation, your time and your energy, your 

4 comments. 

5 Strongly encourage you to take 

6 advantage of the extra time, but the transcript 

7 we expect will likely be put into the docket 

8 within a week or so. 

9 So, I would, again, for those of you 

10 who are interested in looking at it and even for 

11 those of you who know others who were unable to 

12 attend for any number of reasons, but remain 

13 interested in giving us their feedback, I would 

14 invite you to let them know that the docket will 

15 be - the transcript will be in the docket and take 

16 full advantage of the opportunity to look at it. 

17 So, again, thank you all very, very 

18 much and safe travels for those of you who are 

19 going back to other parts of the country. 

20 (Whereupon, at 3:31 o'clock p.m. the 

21 meeting was concluded.) 

22