Recently, the Washington State Department of Transportation (WSDOT), with input from the Office of Minority and Women Owned Businesses, has made significant changes to the Disadvantage Business Enterprise (DBE) Condition of Award (COA) Goal documentation and contract requirements. Below, we have provided a general overview of the revisions and our recommendation of how to proceed under the new rules.
With these changes, WSDOT has segregated the NAICS (North American Industrial Classification System) code into various “descriptors,” which can be found associated with your firm name on the revised “Directory of Certified DBE Firms.” For example, a DBE firm certified under NAICS Code 237310 (Sign Erection, Highway, Roads, Street, or Bridge) may now see one or more of the following WSDOT COA Work Descriptors: “Mailbox and Flexible Guide Post Installation,” “Pedestrian Safety Railing Systems,” and/or “Permanent or Class A Sign Installation.”
These changes impact DBE firms and contractors bidding on WSDOT projects in a number of ways:
1. DBE Utilization Certificate: When bidding on a WSDOT project with a DBE COA Goal, the WSDOT COA work descriptor must match the description of work listed on the DBE Utilization Certification (WSDOT Form #272-056 EF), which is filled out by the general contractor. If the two do not match, the bid may be considered non-responsive and rejected.
Recommendation: It is no longer sufficient to simply have the appropriate NAICS code. To be considered for an award of a WSDOT DBE contract, the DBE must also have the appropriate WSDOT descriptor. Therefore, DBEs should carefully check the Directory of Certified DBE Firms (here) to ensure that the descriptors match the type of work that the DBE does.
2. DBE Written Confirmation Document. As a condition of receiving federal monies WSDOT may only award the contract to the bidder that has provided “…written confirmation from the DBE that it is participating in the contract as provided in the prime contractor’s commitment.” 49 CFR § 26.53 (b)(2)(v). Although this information may be submitted in another manner, WSDOT has created a new form labeled the DBE Written Confirmation Document (WSDOT Form #422-031 EF) that satisfies this requirement. Further, in the past WSDOT has met the requirement by making an inquiry by phone after bids were opened. WSDOT, however, has been advised that the confirmation must be in writing and in advance of bid opening. WSDOT will no longer be making these calls.
A Written Confirmation Document should be submitted for each DBE listed on the DBE Utilization Certificate. The Form will be filled out, signed, and dated by the DBE contractor. The DBE required information has been added to this form and must be filled in. Most importantly, the Description of Work on the Written Confirmation Document must also match the WSDOT descriptor and the DBE Utilization Certification description of work or the bid may be rejected.
Recommendation: To avoid omitting required information, we recommend you use the DBE Written Confirmation Document. In addition, DBEs should obtain a letter from OMWBE that sets forth the WSDOT descriptors that match the work that it performs or intends to perform. Since general contractor bidders will need to submit this letter as part of the bidding process, having the letter on hand when submitting a bid will expedite the process of bidding and better ensure that the DBE will be selected as the DBE contractor.
3. Good Faith Efforts. WSDOT has taken a new position on reconsideration for DBE related bid rejections. WSDOT will only allow reconsideration to assess a bidder’s Good Faith Effort documents. Good Faith Effort documents are required only in the situation where the bidder’s efforts to solicit sufficient DBE participation were unsuccessful.
Recommendation: This change simply makes it more difficult to cure bid errors (for example, if the DBE Utilization Certification does not match the WSDOT COA descriptor), meaning that getting the bid documents right from the very beginning is even more important. For general contractors, it makes sense in all bids to submit the Good Faith Effort documentation (in advance of bid opening) even if the DBE percentage goals are met. By submitting the Good Faith Effort documentation, in the event a DBE bid is rejected for some reason, the Good Faith Effort documentation may salvage the “non-conforming bid.”
OVERALL RECOMMENDATION:
We recommend that DBEs review their WSDOT “Description of Work” (Descriptors) Immediately. There are 397 Different WSDOT Descriptors. If a DBE does not have the appropriate descriptor for the work it will perform on the project listed in the Directory of Certified DBE Firms, the DBE firm will be ineligible to perform that work on the project. Once the DBE reviews its listed descriptor, if it feels the WSDOT descriptor does not accurately reflect the firm’s work/current NAICS codes, email WSDOT at DBESS@wsdot.wa.gov as soon as soon as possible explaining the problem (see sample email here) and request that the appropriate descriptors matching the DBEs work be added to the WSDOT website. WSDOT cannot make certification determinations (only OMWBE can), but WSDOT is responsible for interpreting the NAICS codes into the “plain talk” descriptors and will be able to assist DBEs in resolving issues and questions concerning your descriptors.
If these changes seem like a confusing mess to you, we agree. However, those are the rules and, despite the confusion, we urge you to comply to the best of your ability to avoid bid responsiveness issues in the future.
Should you have any issues correcting your WSDOT descriptors or have any other questions regarding DBE certification please contact John P. Ahlers (jahlers@ac-lawyers.com or 206-529-2226) or Lindsay K. Taft (ltaft@ac-lawyers.com or 206-529-3017).