TO: AC Transit Board of Directors
FROM: Kathleen Kelly, Interim General Manager/Chief Executive Officer
SUBJECT: Disadvantaged Business Enterprise
ACTION ITEM
AGENDA PLANNING REQUEST: ☐
RECOMMENDED ACTION(S):
Title
Consider approving amendments to the District’s Disadvantaged Business Enterprise (DBE) Program and authorize the General Manager to submit routine administrative DBE Program updates to the Federal Transit Administration (FTA) without prior Board approval.
Staff Contact:
Phillip J. L. Halley, Interim Director of Civil Rights & Compliance
Body
STRATEGIC IMPORTANCE:
Goal - Financial Stability and Resiliency
Initiative - Financial Efficiency and Revenue Maximization
The FTA mandates that as a recipient of U.S. Department of Transportation (DOT)-assisted funding, the District is required to adopt and implement a DBE program. Inclusive in the implementation is the periodic reporting including submitting updated DBE programs when there are significant changes at the District or updates to the U.S. DOT DBE Program, as well as when there are routine administrative staff changes in certain areas. Supporting this requirement ensures that the District remains eligible to receive FTA funding.
It's important to note that this report is consistent with current federal guidelines. If those guidelines are formally changed, the District may need to take further action later.
BUDGETARY/FISCAL IMPACT:
There is no budgetary impact associated with proposed program changes.
BACKGROUND/RATIONALE:
The FTA requires recipients who receive $250,000 or more in FTA planning, capital, and/or operating assistance to establish a DBE program which outlines how the recipient is meeting the requirements of the DOT Financial Assistance Program for Disadvantaged Business Enterprises as stated in 49 CFR part 26.
The U.S. DOT issued a DBE Program Rule Update in April 2024 in which most of the changes focused on DBE size standards and certification eligibility or requirements, aligning the Federal Aviation Administration’s Airport Concessions DBE Program with the overall DBE Program, program monitoring improvements, and other edits to improve clarification. The District must update its own DBE Program and submit it to the FTA by March 1, 2025.
As the District is not a DBE certifying agency, many of the updates do not apply and require no direct change to the District’s DBE Program. The vast majority of the redline edits are due to formatting and minor clarifying language revisions. The additional edits that impacted the District's DBE Program include both policy and practice updates:
Policy updates include:
• Section I.B: Program Objectives: minor edits throughout for language cleanup and clarity.
• Section 11: Definitions: new terms and minor edits to existing language.
• Section IV-D: Monitoring Actual DBE Participation Payments - significant edits to reinforce this requirement, include proactive monitoring, recordkeeping, and auditing.
• Section V-F: Counting and Tracking DBE (and SBE) Participation: significant edits to reinforce the process, add supplier definitions, and include the required implementation of the Supplier Pre-award Evaluation (SPE). Currently, the SPE is not applicable to AC Transit as the District employs a race and gender-neutral DBE program and does not apply DBE goals on specific contracts. However, should there be a need in the future to seek FTA approval for a contract specific DBE goal, the District would be required to conduct the DBE Supplier pre-award evaluation prior to awarding the contract.
• Section VII: Certification Standards. New section with language certification and decertification regulations.
• Section X: Compliance and Enforcement. New language on the District’s commitment to confidentiality of information provided and when the District is required to cooperate with federal authorities.
• Appendix A: Signed Policy Statement. Minor revisions and will be signed by Interim General Manager.
• Appendix E: Updated General Manager’s Organizational Chart for DBE Liaison Officer reporting
• Implementation of a DBE Performance Plan for Design-Build contracts: currently this is not applicable as the District does not utilize the design-build contracting methodology. However, in January 2024, the State authorized special districts (SB607) and transit agencies (SB617) to utilize design-build methodology. Therefore, if in the future, the District issues a design-build contract solicitation and there is a DBE goal tied to the contract, prospective respondents will be required to submit a DBE Performance Plan with their submissions.
• DBE definition and language updates: staff reviewed the District’s DBE Program, SBE and DBE policies, and contract specifications and edited existing language that did not comply with the new rule.
Practice updates require the District to make changes to the way current processes are being implemented, but did not require policy edits, such as:
o providing additional reporting criteria on the semi-annual report
o providing additional data on the Bidders' List report and submitting annually via an FTA portal (currently not available)
o requirement to conduct proactive prompt payment monitoring in lieu of waiting on contractor complaints. Staff determined the District is already compliant in this area utilizing the B2G-Now system
In addition to resubmitting the DBE Program to the FTA when there are significant edits to the program, the FTA requires the program to be resubmitted anytime there are related staffing changes within the organization, such as the hiring of a new General Manager or replacing the DBE Liaison Officer. These are considered routine administrative resubmissions as they do not include edits to the DBE Program document except for the replacement of the signed policy statement. Included with this report is the revised DBE Policy Statement, which the Interim General Manager will sign and include in the DBE Program upon adoption by the Board.
A routine update to the DBE Program occurs when District staff responsible for the implementation of the District’s DBE Program change when there are no significant edits to the DBE Program document itself. It is requested that the Board authorize the General Manager/Interim General Manager to submit these routine updates to the DBE Program to the FTA without seeking Board adoption or approval. When this occurs, the General Manager’s Report will make note of such an occurrence.
ADVANTAGES/DISADVANTAGES:
The advantage to adopting the recommended changes is that the District will remain in compliance with the U.S. DOT DBE Program and FTA requirements.
The advantage to authorizing the General Manager to submit routine DBE Program updates to the FTA without prior Board action is that it makes efficient use of staff time and effort when there are no significant edits to the text of the District’s DBE Program.
ALTERNATIVES ANALYSIS:
The are no alternatives to submitting the updated DBE Program to the FTA, as this is a requirement. The alternative to authorizing the General Manager to submit routine DBE Program updates to the FTA without prior Board action is to continue in the current practice. Staff does not recommend this for the reasons outlined previously.
PRIOR RELEVANT BOARD ACTION/POLICIES:
22-014 Disadvantage Business Enterprise Program
ATTACHMENTS:
1. 2022 AC Transit DBE Program Redlined
2. 2022 AC Transit DBE Policy Statement Redlined
3. 2025 AC Transit DBE Program
Prepared by:
Phillip J. L. Halley, Interim Director Civil Rights and Compliance
In Collaboration with:
Brooklyn Moore-Green, Sr. Program Specialist
Islam Ayyad, Program Specialist
Approved/Reviewed by:
Aimee L. Steele, General Counsel/Chief Legal Officer
Linda A. Nemeroff, Board Administrative Officer/District Secretary
Kathleen Kelly, Interim General Manager/Chief Executive Officer