Effective November 15, 2012, the Pennsylvania Department of Transportation (PennDOT) announced in a recent Bulletin on its ECMS website that it was adjusting its procedures for counting DBE suppliers in response to federal guidance.
Under the new procedures, in order for a DBE firm to receive regular dealer (60%) credit for materials supplied on a federally-assisted transportation project, the answer to the following two questions must be “yes”:
First, does the firm “regularly” engage in the purchase and sale or lease, to the general public in the usual course of its business, of products of the general character involved in the contract and for which DBE credit is sought?
Second, is the role the firm plays on the specific contract in question consistent with the regular sale or lease of the products in question, as distinct from a role better understood as that of a broker, packager, manufacturer’s representative, or other person who arranges or expedites a transaction?
In order to assist prime contractors and DBEs, PennDOT has developed a new form for determining the appropriate DBE credit. This form can be found here. PennDOT is also requesting feedback on the form from prime contractors who elect to use it. Comments and suggestions should be submitted to: email@example.com.
According to the PennDOT Bulletin, if it is later determined that the DBE misrepresented itself or erroneously concluded that it was acting as a regular dealer, the DBE participation would still have to be revised. However, PennDOT would fully consider the form’s documentation in its good faith efforts review if the prime contractor was unable to replace the DBE participation. Therefore, it would be prudent for prime contractors to start to use this form in order to protect themselves from a later adverse determination on “good faith efforts.”
The complete Bulletin can be found here.