ACI-NA Files Comments on DOT NRPM To Improve Implementation Of DBE Rule

Airports Council International-North America (“ACI-NA”) appreciates this opportunity to submit comments on behalf of its member airports in response to the Department of Transportation’s Notice of Proposed Rulemaking entitled “Disadvantaged Business Enterprise: Program Implementation Modifications” published in the Federal Register on September 6, 2012 (77 Fed. Reg. 54952). ACI-NA represents the local, regional, and state governing bodies that own and operate the principal airports served by scheduled air carriers throughout North America. ACI-NA member airports are responsible for approximately 95 percent of the domestic and virtually all of the international airline passenger and cargo traffic in North America.

ACI-NA supports the Department’s efforts to improve the implementation of the disadvantaged business enterprise rule. These comments briefly address three areas: Continuity, Certification Continuance, and Good Faith Efforts.

We recommend a continued emphasis on the continuity among certifying entities of the forms submitted by DBE applicants. It becomes challenging, not only for the applicants, but also for the evaluation of the applicants by the certifying entities, when the submittal formats are not consistent among certifying entities. It’s been the experience of ACI-NA members that this lack of continuity has become an unnecessary burden on some applicants for DBE certification. We recognize, and support the concept, those local conditions should permit some variation in the submittals and updates that a DBE applicant must provide, so long as the local jurisdiction documents a reason for such variation. While recognizing this variance, the required submittals, application format, and certification review process should be as consistent as possible among certifying entities. This continuity would be assisted by uniform training for certifying entities, uniform rules for certification, uniform review practices, and uniform forms.

ACI-NA supports the Department’s efforts in improving the review of the continued certification eligibility of a certified firm with a “no-change” attestation without the certified firm having to submit an entire application. While an attestation of “no-change” alone may be sufficient in many instances, recipients will find it useful to be able to request updates of various documents, such as recent tax returns. Particularly with the complexity of the Personal Net Worth regulations, recipients have noticed that some certified firms have not realized when the Personal Net Worth requirements are no longer satisfied. To ensure the integrity of the DBE program, recipients should have the ability to request from certified firms updated information beyond the standard attestation of “no-change”. For example, recent tax returns and financial statements could help ensure continued satisfaction of the complex Personal Net Worth requirements. The experience of recipients with their local conditions could justify the need for other documentation beyond the attestation of no-change for the continued certification of a DBE.

ACI-NA supports the Department’s clarification of the information regarding DBE participation that a bidder for a prime contract must submit in response to a solicitation (see proposed section 26.53(b)) and the Department’s improvements to Appendix A - Good Faith Efforts. ACI-NA also believes it is important for DOT to state expressly that good-faith-effort documentation comes into play only when the potential prime contractor is unable to achieve the ACDBE and/or DBE participation objective in its response to a solicitation. Perhaps DOT could strengthen this rule by amending the first sentence of proposed section 26.53(b)(4) to read: “Only if a bidder/offeror has not met the contract goal by submitting the information required by paragraph (b)(2) must it, in order to remain eligible for contract award, submit documentation of the good faith efforts it made to meet to goal.” Recipients and prime contractors would find such a statement helpful because some recipients treat a bid or proposal that lacks this good faith documentation as non-responsive, even when the potential prime contractor has demonstrated in its solicitation response sufficient ACDBE and/or DBE participation to meet the contract goal. DOT should state in its comments whether it intends that the final rule regarding good faith documentation would preempt any different rule by a state or local public entity.

Finally, DOT should examine the decision of the U.S. Court of Appeals, Ninth Circuit, in Monterrey Mechanical Co. v. Wilson (125 F.3d 702 (1997)) as it relates to the DOT proposed rule requiring prime contractors to subcontract percentages of work to a DBE or to demonstrate a good faith effort to do so. The Ninth Circuit determined that a similar state requirement in California violated the Equal Protection Clause of the U.S. Constitution (14th Amendment). In the Ninth Circuit case, a DBE bidder could avoid the subcontracting or good-faith-effort requirement by keeping that work for itself. The Court thus reasoned that because DBE general contractors could avoid the statutory requirements while non-DBE general contractors could not, all general contractors bidding on the project were not treated the same way in violation of the Equal Protection Clause. DOT should ensure that its proposed rule does not cause recipients, when complying with the rule, to run afoul of the Equal Protection Clause as applied by the Ninth Circuit.

ACI-NA wishes to emphasize its continued support of the Department’s disadvantaged business enterprise program and the Department’s efforts to ensure that disadvantaged business enterprises are afforded the opportunity to participate in federal contracts and subcontracts. Thank you for this opportunity to comment on the Department’s proposed rulemaking.