15. Disadv. Bus. Enter.
City Hall
10300 Torre Avenue
Cupertino, CA 95014-3202
(408) 777-3354
FAX (408) 777-3333
CITY OF
CUPEIQ1NO
PUBLIC WORKS DEPARTMENT
Summary
AGENDA ITEM / S
AGENDA DATE May 16. 2006
SUBJECT AND ISSUE
Adopt a resolution authorizing the City Manager to execute a Disadvantaged Business
Enterprises Race-Neutral Implementation Agreement with the Califomia Department of
Transportation,
BACKGROUND
A recent Ninth Circuit Court of Appeals decision involving the Washington State
Department of Transportation (WSHDOT) held that WSHDOT lacked sufficient
evidence to support use of race-conscious measures on federal-aid contracts. The
federally mandated Disadvantaged Business Enterprises (DBE) program itself was not
declared unconstitutional, but the decision established a new evidentiary standard to be
met if race-conscious measures are to be employed in awarding of federal-aid contracts.
Since the Ninth Circuit's decision is the controlling authority for eleven Western states
and territories, including California, the decision has a direct bearing on state and local
DBE programs in California. After an assessment by the California Department of
Transportation (Caltrans) of its DBE program and the use of race-conscious goals on
individual contracts, Caltrans determined that that its program may not meet the
evidentiary standards established by the Ninth Circuit.
As a result, on May 1, 2006, Caltrans implemented a race-neutral DBE program. Among
the changes to the DBE program that are effective immediately are:
· Local agencies will no longer have their own separate DBE programs unless such
programs have been approved directly by a federal agency. Instead, local
agencies must complete a "Disadvantaged Business Enterprise Race-Neutral
Implementation Agreement".
· Local agencies may no longer advertise and award contracts with federal-aid
funds containing race-conscious DBE goals.
· All federal-aid procurements shall contain race-neutral DBE contract language,
Printed on Recycled Paper
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Since Cupertino's current DBE program was not approved directly by a federal agency,
but rather as a local implementation of the state program, the City must comply with
Disadvantaged Business Enterprises Race-Neutral Implementation Agreement in order to
continue to be a recipient of federal transportation funds. By executing the agreement,
the City will consent to implement the Caltrans DBE Program Plan as it pertains to local
agencies. As with the City's present DBE program, the Caltrans DBE Program Plan is
based on U.S. Department of Transportation, 49 CPR, Part 26 requirements, but is now
modified to include only race-neutral means of meeting annual DBE goals.
Much of the apparatus that was put in place when the City adopted its current DBE
program on February 5, 2001, will continue to be used when the City implements the new
Caltrans DBE Program Plan. In place of the DBE Annual Overall Goal, the City will
establish an Annual Anticipated DBE Participation Level (AADPL) that will be
calculated with methodology similar to that used to establish the 2005-2006 DBE annual
goal that Council adopted on February 7, 2006. However, only race-neutral means may
henceforth be employed to pursue DBE participation in federal-aid contracts.
The discontinuation of race-conscious means in favor of race-neutral means of seeking
DBE participation in federal-aid contracts will mean a change in focus. In place of
awarding federal-aid contracts or portions thereof based on DBE contract participation
goals, local agencies participating in the new Caltrans DBE Program Plan will be tasked
with facilitating DBE participation in federal-aid contracts in other ways, such as
maintaining bidder's lists that will be made available to prime contractors.
FISCAL IMPACT
By executing the attached Disadvantaged Business Enterprises Race-Neutral
Implementation Agreement, the City will maintain its eligibility for approximately
$580,000.00 in federal funds for infrastructure maintenance and construction projects in
federal fiscal year 2005-06 and additional federal funds in future years.
STAFF RECOMMENDATION
Staff recommends that the City Council adopt Resolution No. 06- 0 9 i , authorizing
the City Manager to execute a Disadvantaged Business Enterprises Race-Neutral
Implementation Agreement with the California Department of Transportation.
Submitted by:
Approved for submission to
the City Council:
"..-r I>I~
Ç)ÞL
David W. Knapp
City Manager
~n..Ralph A. Qualls, Jr.
Director of Public Works
/5-;¿
RESOLUTION NO. 06-094
DRAFT
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CUPERTINO
AUTHORIZING THE CITY MANAGER TO EXECUTE A DISADV ANT AGED
BUSINESS ENTERPRISE RACE-NEUTRAL IMPLEMENTATION AGREEMENT
WITH THE CALIFORNIA DEPARTMENT OF TRANSPORTATION
WHEREAS, the California Department of Transportation (Caltrans) determined
that its Disadvantaged Business Enterprise (DBE) Program, established pursuant to the
requirements of Title 49, Parts 23 and 26, of the Code of Federal Regulations, as that
Program was constituted prior to May 1, 2006, was not likely to meet the evidentiary
standard recently established by United States Court of Appeals for the Ninth Circuit as
necessary for the use of race-conscious measures for the award of federal-aid contracts;
and
WHEREAS, as a result, on May 1, 2006, Caltrans implemented a race-neutral
DBE program; and
WHEREAS, all Federal-aid recipients are required to re-evaluate their DBE
program participation goals annually and recalculate those goals for federal fiscal years in
which they have Federal-aid projects authorized; and
WHEREAS, the City of Cupertino must execute the attached Disadvantaged
Business Enterprises Race-Neutral Implementation Agreement in order to continue to be
a recipient of federal transportation fund,
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Cupertino that the City Manager is hereby authorized to execute the Disadvantaged
Business Enterprises Race-Neutral Implementation Agreement with the California
Department of Transportation.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of
Cupertino this 16th day of May 2006 by the following vote:
Vote Members of the City Council
AYES:
NOES:
ABSENT:
ABSTAIN:
ATTEST:
APPROVED:
City Clerk
Mayor, City of Cupertino
IS-3