Meeting Contract Requirements - Guide to Successfully Completing ADOT Projects

Subconsultant

DBE Subconsultant Requirements

This tab discusses some of the requirements you may encounter while working as a subconsultant on ADOT projects.

DBE Goals

DBE goals require that that a predetermined percentage of the total cost of a project must be paid to DBEs for eligible work performing commercially useful functions. Proper work and payment records from subconsultants are therefore necessary in order for the prime consultant to prove that goals were met.

Prime consultants count on their subconsultants to maintain DBE certification and have the proper licenses and certification for the type of work you are to perform. If, for any reason, you fail to obtain or maintain proper licensing and certification, it is critical that you inform the prime consultant immediately.

If you hire DBE tier subconsultants, it is similarly important for you to ensure that they meet all necessary requirements to count toward DBE goal credit.

Commercially Useful Function

It is important to remember that DBE involvement only satisfies DBE goals if the DBE serves a commercially useful function. Generally, this means that the DBE must perform the whole of a task itself and the task must be necessary for the completion of the project. The specific rules vary by the task being performed, however.

As a DBE, you will not be considered to perform a commercially useful function if you act only as an extra participant in a transaction or project to provide the appearance of DBE participation. If you do not perform or exercise responsibility for at least 30 percent of the total cost of your contract with your own work force, or if you subcontract a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, ADOT will presume that you are not performing a commercially useful function.

If you are presumed not to be performing a commercially useful function as provided above, you may present evidence to rebut this presumption. Decisions on commercially useful function matters are subject to review by FHWA, but are not administratively appealable to U.S. DOT.

ADOT staff may conduct on-site visits to interview DBE firms, or request information in writing, to ensure that the firms are completing tasks for which they have been contracted. ADOT does this in order to verify that a commercially useful function is being performed by DBEs on contracts.

See this video from the FHWA for more information on what qualifies as a Commercially Useful Function. 

For more information on good faith efforts, as well as information on what sort of work satisfies the commercially useful function requirement of DBE goals, read the Commercially Useful Function Checklist on the ADOT website. 

DBE Goal Credit

Only the value of work actually performed by the DBE is counted toward DBE goals. No credit toward the DBE goal is given for shipping, manufacturing, and supply costs. Neither will any credit be given if contracts are created to artificially create DBE participation – any DBE subconsultants must perform a commercially useful function.

Also, if a DBE subcontracts part of its work to another firm, the value of the subcontracted work only counts toward the DBE goal if the subcontracted firm is itself a DBE. Work subcontracted to a non-DBE does not count toward the DBE goal.

When counting DBE participation, the DBE must be certified in the category of work it performs in order for that work to count towards DBE participation. Further, only the value of work actually performed by the DBE counts toward DBE participation, and it is only counted after the work has been paid for.

Prime consultants count on their subconsultants to maintain DBE certification and have the proper licenses and certification for the type of work you are to perform. If, for any reason, you fail to obtain or maintain proper licensing and certification, it is critical that you inform the prime consultant immediately.

If you, as a DBE subconsultant, are deemed ineligible (decertified) or suspended by ADOT, you may not be considered to meet a contract goal on a new contract. However, you may still be considered to meet the contract goal under a subcontract that was executed before the suspension or decertification became effective.

Substitution/Termination of DBE

It is important for DBE firms to promptly and effectively meet contract obligations to prime consultants on ADOT projects.  However, there are times when a prime consultant might wish to substitute or terminate a DBE subconsultant after all reasonable efforts have been made to avoid this from occurring. Communications and procedures outlined in Section 22 of the DBE EPRISE Contract Specifications outlines the process a prime consultant must follow in order to request the substitution/termination of a DBE listed on the DBE Affidavit to meet a contract goal. 

Any attempt to substitute one DBE for another or to terminate any DBE subconsultant must be approved by ADOT BECO, and the reasons for doing so must be explained. If the change would reduce DBE participation below the DBE goal, the change must be justified. Good cause for substitution or termination generally includes situations where the listed DBE

  • fails or refuses to execute a written contract.
  • fails or refuses to perform the work of its subcontract in a way consistent with normal industry practice standards.
  • fails or refuses to meet the prime consultant’s reasonable, nondiscriminatory bond/insurance requirements.
  • becomes bankrupt, insolvent, or exhibits credit unworthiness.
  • is ineligible to work on public works projects because of suspension and debarment proceedings pursuant to federal or state law.
  • is not a responsible consultant.
  • voluntarily withdraws from the project and provides written notice of its withdrawal to the Department.
  • is ineligible to receive DBE credit for the type of work required.
  • a DBE owner dies or becomes disabled with the result that the firm is unable to complete its work on the contract.
  • other documented good cause that the Department determines compels the termination or substitution of the DBE subconsultant.

If the termination of the DBE is approved, the prime consultant is still obligated to meet agreed-upon DBE goals and must make good faith efforts to find a substitute for the terminated DBE.

Failure to follow procedures and secure ADOT approval before substituting/terminating a DBE committed to meet a contract goal is a material breach of contract and ADOT will assess liquidated damages by deducting the dollar amount of the wrongfully substituted/replaced DBE subcontract plus 25 percent of the amount remaining to be paid to the DBE from the prime consultants contract amount.

Certification of Final DBE Payments

Once a project is complete and all payments have been made and confirmed, the prime consultant must submit a certification of payments form for each DBE utilized on the project within 30 days of the DBE completing its work. This form certifies that all payments have been made to the DBE subconsultants, and must be signed by the prime consultant and DBE firm. The Certification of Final DBE Payments form can be found in the BECO section of the ADOT Website.
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Pursuant to Title VI of the Civil Rights Act of 1964, and the Americans with Disabilities Act (ADA), ADOT does not discriminate on the basis of race, color, national origin, age, sex or disability. Persons that require a reasonable accommodation based on language or disability should contact ADOT’s Civil Rights Office at civilrightsoffice@azdot.gov. Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

De acuerdo con el título VI de la Ley de Derechos Civiles de 1964 y la Ley de Estadounidenses con Discapacidades (ADA por sus siglas en inglés), el Departamento de Transporte de Arizona (ADOT por sus siglas en inglés) no discrimina por raza, color, nacionalidad, edad, género o discapacidad.  Personas que requieren asistencia (dentro de lo razonable) ya sea por el idioma o por discapacidad deben ponerse en contacto con la Oficina de Derechos Civiles en civilrightsoffice@azdot.gov. Las solicitudes deben hacerse lo más pronto posible para asegurar que el equipo encargado del proyecto tenga la oportunidad de hacer los arreglos necesarios.