title
APPROVE MOTION TO AMEND THE CITY’S DISADVANTAGED BUSINESS ENTERPRISE PROGRAM
recommended action
RECOMMENDATION
It is recommended that the City Council approve a motion to:
1. Amend the City’s Disadvantaged Business Enterprise program.
2. Approve and authorize the City Manager to sign the Disadvantaged Business Enterprise Implementation Agreement.
It is also recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of this motion.
body
Summary
To receive federal funds from the U.S. Department of Transportation and the California Department of Transportation (Caltrans), the City of Stockton is required to adopt a modified Disadvantaged Business Enterprise (DBE) Implementation Agreement for Local Agencies (Implementation Agreement). The previous Implementation Agreement was adopted and implemented by the City in 2009. The new Implementation Agreement includes the addition of California Regulations for Prompt Progress Payment to Subcontractors and Prompt Payment from the Local Agency to Contractors (Attachment A).
DISCUSSION
Background
Recipients of U.S. Department of Transportation funds must implement a DBE program that conforms to the standards set forth in Title 49 Part 26 of the Code of Federal Regulations. While program modifications have occurred over the years, the objective behind the program has remained the same - to create a non-discriminatory level playing field for contractors in the transportation industry.
The DBE program, enacted in 1983 as part of the Surface Transportation Assistance Act of 1982, was designed as a vehicle to increase the participation by small businesses owned and controlled by socially and economically disadvantaged individuals in federally assisted transportation contracts.
Caltrans requires local governments to use the best evidence available to estimate the DBE participation they could expect to obtain within a non-discriminatory environment. Using data and calculations based on the number and availability of DBE contractors in specific fields of work, the City develops project specific contract goals for federally funded projects.
The previous Implementation Agreement was adopted and implemented by the City on May 5, 2009, by Resolution No. 09-0122. The Implementation Agreement has not been modified since 2009.
Present Situation
Caltrans has identified local DBE programs as a potential area of non-compliance for local agencies. In order to improve compliance of local DBE programs, Caltrans updated the Implementation Agreement.
Caltrans revised the Implementation Agreement to clarify the prompt payment obligations. Section 7108.5 of the California Business and Professions Code (CBPC) requires a prime contractor or subcontractor to pay any subcontractor no later than seven (7) days after receipt of each progress payment received, unless otherwise agreed to in writing. In particular, Section XII Part B was revised to clarify the timeframe and penalties, and Section XVIII has been added to address Section 20104.50 of the California Public Contract Code (CPCC). Section 20104.50 of the CPCC requires that local agencies pay contractors no more than 30 days after receipt of the contractor’s request for payment.
Council approval and adoption of the Implementation Agreement is required to ensure compliance with Caltrans’ funding requirements, provisions, and financial responsibilities. Failure to submit an amended Implementation Agreement would preclude the City from receiving federal financial assistance.
FINANCIAL SUMMARY
There is no impact to the City’s General Fund or any other unrestricted fund as a result of taking the recommended actions.
Attachment A - Disadvantaged Business Enterprise Implementation Agreement for Local Agencies