Chapter 9 — Civil Rights & DBE

Four programs, one set of consequences

Chapter 9 covers four distinct but overlapping federal civil rights programs that apply to every LPA receiving USDOT funds:

1. Title VI of the Civil Rights Act of 1964 — race, color, national origin (including LEP)
2. ADA / Section 504 — disability
3. EEO — equal employment opportunity in Federal-aid construction
4. DBE — Disadvantaged Business Enterprise participation

The chapter opens with what is essentially a warning: failure to comply with any of these can lead to noncompliance findings, corrective action plans, sanctions (suspension or termination of federal financial assistance), declined project approvals, withheld reimbursements, referral to FHWA/USDOT/USDOJ for legal action, and "other actions deemed appropriate." This is one of the more direct consequence-statements in the LAPM.

The procedural pattern is the same across all four programs: (1) sign assurances as part of the Master Agreement (Exhibit 4-C); (2) maintain a plan updated annually or biennially; (3) submit an annual certification or assessment by a specific deadline (typically June 30 for the following FFY); (4) include required clauses in all contracts; (5) monitor and report participation; (6) respond to complaints.

Nondiscrimination in programs receiving federal financial assistance

Title VI of the Civil Rights Act of 1964 (42 USC §2000d) states that "no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance." The Civil Rights Restoration Act of 1987 expanded coverage to apply to all operations of LPAs receiving federal financial assistance — not just the federally-funded programs.

Title VI sits within a larger statutory family that LPAs must collectively comply with:

The 11 elements of an LPA's Title VI program required under 23 CFR 200.9:

1. Title VI Implementation Plan — annual update by October 1; available to the public
2. Title VI Coordinator designation — accountable to the LPA's CEO
3. Title VI/Nondiscrimination Policy Statement — signed by head of agency, updated annually
4. LEP Assessment (Four Factor Analysis) and Language Access Plan — annual
5. Dissemination of Title VI information — to public, in other languages as determined by LEP
6. Title VI training for LPA staff — every two years
7. Title VI Assurances in contract documents — Appendices A and E in all sub-contracts and sub-agreements
8. Title VI Complaint Procedures — complaint form, log, processing procedures
9. Title VI Data Collection — statistical data on race, color, national origin
10. Internal/External Title VI Reviews — of program areas and sub-awardees
11. Title VI Accomplishments and Goals Report — annual

The LEP translation duty has a defined threshold: vital documents must be translated when LEP population is ≥5% or ≥1,000 individuals (whichever is less) of the population eligible to be served. The Four Factor Analysis considers: (1) the number/proportion of LEP persons; (2) frequency of LEP contacts; (3) nature and importance of programs/services; (4) resources available.

Disability accessibility — the design and certification framework

The ADA / Section 504 program runs parallel to Title VI but with disability as the protected characteristic. 28 CFR 35 requires that facilities constructed on behalf of, or for the use of, a public entity be designed and constructed so the facility is accessible to and usable by persons with disabilities. 49 CFR 27 requires nondiscrimination in federally-funded programs. California adds Title 24 of the CCR with state-specific accessibility requirements.

The "whichever provides the greatest access" rule is the federal-state interplay you must apply: 2010 ADA Standards or Title 24, whichever offers greater access or protection. Private-funded improvements within the public ROW are also subject to this standard.

The 11 ADA/Section 504 program elements required:

1. ADA Coordinator designation — for LPAs with ≥50 employees (28 CFR 35.107(a))
2. Grievance procedures — for LPAs with ≥50 employees; 180-day filing window from alleged discrimination (28 CFR 35.170)
3. Notice of ADA nondiscrimination policy — including in alternative formats (Braille, large print, audio, captioned, HTML accessible)
4. Self-evaluation — "living document" required pursuant to 28 CFR 35.105, 49 CFR 27.11(c)(2)
5. Transition Plan — for LPAs with ≥50 employees, prioritizing removal of structural barriers (28 CFR 35.150(d))
6. Caltrans DLA ADA Section 504 Program Assessment — biennial, by June 30 every odd year
7. Design compliance — federal 2010 ADA Standards, Title 24 CCR, or local code (greatest access)
8. ADA Certification — Exhibit 9-C annually by June 30 for following FFY
9. ADA Monitoring — during Field Review
10. PS&E certification — Exhibit 12-D PS&E Checklist
11. Final inspection — Exhibit 17-C Final Inspection Form

Exhibit 9-C content: ADA Coordinator info; certification of updated self-evaluation and transition plan; certification of grievance procedure. Without current 9-C on file, the DLAE will not process a Request for Authorization for any Federal-aid project. If the LPA cannot certify, they must provide an estimated date for compliance — and may be subject to desk or on-site review.

EEO contractor compliance — FHWA-1273 carries the duty into the field

EEO compliance flows from 23 USC §140(a) and 23 CFR 230, requiring that employment in connection with Federal highway construction projects be provided without regard to race, color, religion, sex, national origin, age, or disability. Three operational mechanisms:

1. Master Agreement Assurances — Appendix A to Exhibit B includes nondiscrimination in selection/retention and prohibition of discrimination in employment.
2. Form FHWA-1273 — physically inserted into every Federal-aid construction contract and subcontract. When a contractor signs a Federal-aid contract of $10,000 or more, the nondiscrimination provisions in FHWA-1273 constitute the contractor's EEO/Affirmative Action Program standards for that contract.
3. Three checklists — Exhibit 12-D (PS&E), Exhibit 15-A (Construction Contract Administration), Exhibit 15-B (Resident Engineer's checklist).

EEO reporting: during the last full pay period in July, the prime contractor must complete Form FHWA-1391 for all active Federal-aid construction contracts. Signed by the LPA Resident Engineer or Project Manager — they verify accuracy and are the contact for discrepancies.

The Resident Engineer's monitoring duty (§16.9, also referenced here): be cognizant of contractual requirements; monitor for discriminatory practices in hiring, firing, training, promotion, utilization of employees. EEO compliance is not just a paperwork exercise — it's a real-time field oversight duty during construction.

DBE Program structure — the regulatory and procedural framework

The DBE Program is administered under 49 CFR 26 — "Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs." Its purpose: ensure a level playing field and foster equal opportunity in Federal-aid contracts. The program is rooted in periodic disparity studies showing continued discrimination in transportation contracting.

Definitions to lock in early:

The DBE responsibility split: Caltrans OCR administers the DBE Program Plan, maintains the DBE directory, establishes statewide goal. DLA provides technical assistance, monitors LPA compliance via process reviews. DLAE reviews LPA Exhibit 9-A and 9-B, ensures Exhibit 10-O2/15-G are reported within 30 days of contract execution, ensures Exhibit 17-F is reported timely, provides DBE oversight, and reviews at least one complete PS&E package per agency per year for DBE compliance.

9-A, 9-B, and the contract clauses that carry the duty

Three foundational LPA obligations:

(1) Exhibit 9-A — DBE Implementation Agreement. One-time submittal acknowledging LPA's commitment to the Caltrans DBE Program. Signed by representative authorized by the governing body. Contains the policy statement expressing commitment, objectives, and implementation responsibilities. Required before a Request for Authorization is processed.

(2) LAPM 9-B — Local Public Agency DBE Annual Submittal Form. Annual submittal by June 30 for the following FFY. Must include:

• DBE Liaison Officer (DBELO) information
• Planned race-neutral measures under 49 CFR 26.51
• LPA's choice of Prompt Payment of Withheld Funds method (one of three under 49 CFR 26.29)

(3) DBE Liaison Officer (DBELO). Designated annually on 9-B. Must have direct independent access to the LPA's Chief Executive Officer concerning DBE program matters.

Required contract clauses (Exhibit 12-G — Required Federal-aid Contract Language). Every Federal-aid contract and subcontract must contain the DBE contract assurance:

"The contractor or subcontractor must not discriminate on the basis of race, color, national origin, or sex in the performance of this contract. The contractor must carry out applicable requirements of 49 CFR 26 in the award and administration of Federal-aid contracts. Failure by the contractor to carry out these requirements is a material breach of this contract, which may result in the termination of this contract, or such other remedy as recipient deems appropriate."

Prompt payment statutes applicable in California:

• Cal Public Contract Code §20104.50 — LPA must pay contractors within 30 days of payment request. 10% per annum penalty on balance owed.
• Cal Public Contract Code §7107 — LPA pays prime contractor retention within 60 days of completion. 2% per month penalty in lieu of interest.
• Cal Civil Code §3329 — LPA pays design professionals within 30 days of demand (progress payment), 45 days if retention. 1.5% per month penalty.
• Cal Business & Professions Code §7108.5 — Prime/sub must pay subs within 7 days of progress payment unless agreed otherwise. Applies to DBE and non-DBE.
• Cal Civil Code §3321 — Prime design professionals pay subconsultants within 15 days of progress payment or final retention.

Exhibit 9-P — Prompt Payment Certification. For projects awarded on/after September 1, 2023: by the 15th of the month following any payment, the prime must submit Exhibit 9-P to the LPA. "No payments to subs this month" must be reported explicitly. Failure may result in withholding of next progress payment, corrective action plan, or contract suspension.

Setting goals, counting participation, reporting commitments

DBE contract goals apply only on Federal-aid consultant contracts (A&E and non-A&E) and construction contracts with potential subcontracting opportunities. The goal is a percentage of the total contract amount expected to be performed by certified DBE firms.

The goal can be zero in specific situations (extremely limited subcontracting opportunities, lack of certified DBEs in district, etc.) — and the LPA must document the basis. No contract goal at all is different from a zero-percent goal — Emergency Opening, Sole-source, Nonprofit contracts and Force Account work have no contract goal.

Setting the goal — Exhibit 9-D methodology:

1. Finalize cost estimate; identify sub-contractable items in Exhibit 9-D template
2. For each item, determine Work Category Code; search California Unified Certification Program (CUCP) database for DBE availability in the relevant Caltrans District
3. Determine DBE Work Factor:
   • If ≥7 DBEs available: 100% Work Factor
   • If <7 DBEs available, for consultant contracts: 0 Work Factor
   • If <7 DBEs for construction: 10% or 12% if trucking or material supply component present; otherwise 0

Commitment forms and timing:

The 30-day rule: LPA must submit Exhibit 15-G or Exhibit 10-O2 to the DLAE within 30 days of contract execution. Failure may result in de-obligation of federal funds on the contract. This is one of the harder consequences in the chapter — late reporting can lose the federal share.

Counting DBE Participation

Only work actually performed by the DBE counts. Key rules:

• Work performed by DBE's own forces — count entire amount, including supplies/materials obtained by DBE (except supplies purchased or equipment leased from the prime contractor or its affiliate)
• Fees/commissions for bona fide services (professional, technical, consultant, managerial, bonds, insurance) — count if LPA determines fee reasonable
• DBE subcontracts to another DBE — count toward DBE participation
• DBE subcontracts to a non-DBE — does NOT count toward DBE participation
• Joint venture — count portion of contract equal to DBE's distinct, clearly defined work performed with own forces, commensurate with DBE's capital, control, management, risks, profits

Materials and Supplies

CUF — the substance test for DBE credit

The Commercially Useful Function (CUF) requirement under 49 CFR 26.55 is the substance test that distinguishes real DBE participation from pass-through arrangements. The DBE value of work will only count toward the DBE commitment if the DBE performs a CUF.

A DBE performs a CUF when it is:

• Responsible for execution of the work
• Carrying out its responsibilities by actually performing, managing, and supervising
• For materials/supplies: responsible for negotiating price, determining quality/quantity, ordering, installing (where applicable), and paying for material

The opposite — failure to perform CUF — is when "its role is limited to that of an extra participant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of DBE participation." The "extra participant" test: examine similar transactions, particularly those in which DBEs do not participate.

The 30% rule and rebuttable presumption: "If a DBE does not perform or exercise responsibility for at least 30% of the total cost of its contract with its own work force, or the DBE subcontracts a greater portion of the work than would be expected on the basis of normal industry practice, one must presume that it is not performing a commercially useful function."

CUF evaluation cadence:

• Prime contractor performs initial CUF evaluation for each DBE on the contract
• Initial evaluation submitted to LPA within 10 days of DBE initially performing work, using LAPM 9-J
• Pre-work notification: prime gives LPA at least 15 days advance written notice of each DBE's initial performance
• Quarterly evaluations and validations throughout duration of DBE work, also on LAPM 9-J
• Quarterly evaluations submitted by 5th of month for previous three months
• LPA notifies contractor/DBE at least 2 business days prior to any evaluation

Trucking CUF requires that the DBE: be responsible for management and supervision of entire trucking operation; itself own and operate at least one fully licensed truck used on contract; receive credit for total value of transportation services using trucks it owns/insures/operates with drivers it employs.

• DBE leasing trucks from another DBE: count full value
• DBE leasing trucks from non-DBE: count ONLY the fee or commission from lease arrangement
• Lease must indicate DBE has exclusive use of and control over the truck

Joint Check rules (LAPM 9-K): Joint checks may be used between contractor/lower-tier sub and DBE sub purchasing materials from a material supplier ONLY if prior LPA approval. Conditions: all parties agree; issuing entity acts solely to guarantee payment; DBE releases check to supplier; LPA authorizes before implementation; agreement is short-term not exceeding 1 year. DBE remains responsible for all elements of 49 CFR 26.55(c)(1).

Joint checks may NOT be used with regular dealers, bulk material suppliers, manufacturers, wholesalers, brokers, truckers, packagers, manufacturer's representatives, or other persons who arrange or expedite transactions.

When the bidder doesn't meet the goal — the GFE alternative

When the LPA establishes a DBE contract goal, a bidder must, to be responsive, either meet the goal OR document adequate Good Faith Efforts (GFEs). The bidder cannot be required to meet the goal as a condition of award if they made adequate GFEs — 49 CFR 26 specifically prohibits ignoring bona fide GFEs.

Anticipated GFE actions:

1. Soliciting interest of all certified DBEs capable of the work through reasonable means; allow sufficient time to respond; follow up
2. Selecting portions of work for DBEs to increase likelihood goal achieved; breaking into economically feasible units
3. Providing interested DBEs with adequate information about plans/specs/requirements in timely manner
4. Negotiating in good faith with interested DBEs (cost difference can be considered but is not sufficient reason to fail)
5. Not rejecting DBEs as unqualified without sound reasons based on thorough investigation
6. Making efforts to assist interested DBEs in bonding, lines of credit, insurance
7. Making efforts to assist with equipment, supplies, materials
8. Effectively using minority/women community organizations, contractors, consulting groups, assistance offices

Documentation submitted on Exhibit 15-H (DBE Information - Good Faith Efforts) by 4pm on 5th day after bid opening. Required GFE documentation includes overall DBE commitment, items of work made available, DBEs solicited (names, dates, items, follow-up methods), selected firms, publications, agencies contacted, assistance offered, written confirmations, reasons for rejecting DBE quotes.

Comparing to 2nd and 3rd bidders: The LPA may consider the DBE commitments of the 2nd and 3rd bidders when determining whether the low bidder made GFEs. If the apparent successful bidder fails to meet the goal but meets/exceeds the DBE participation obtained by 2nd and 3rd bidders, that's evidence of having met GFE burden.

Administrative Review and Reconsideration: Per 49 CFR 26.53, if the LPA determines the apparent successful bidder failed to meet GFE requirements, the LPA must — before award — provide the bidder opportunity for administrative reconsideration. Exhibit 9-H is the sample procedure for reconsideration hearing.

Termination and Replacement of DBE Subcontractors: Prime cannot terminate DBE work or substitute without LPA's prior written consent. Justifiable termination reasons include: DBE fails/refuses to execute written contract; fails/refuses to perform consistent with industry standards; fails bond requirements; becomes bankrupt; ineligible for public works (debarment); lacks license; not responsible contractor; voluntarily withdraws; ineligible for DBE credit; owner dies/disabled; other documented good cause.

Termination procedure: written notice to DBE with reason; DBE has 5 business days to respond; submit DBE termination request to LPA with documentation; LPA responds within 5 business days. After termination approval, contractor must demonstrate GFEs to find DBE replacement.