Contract Compliance Program
The Contract Compliance Program seeks to ensure that contractors and subcontractors performing work on federally assisted highway contracts do not discriminate in their employment and contracting practices based on race, color, religion, sex, national origin, age or disability.
The Virginia Department of Transportation (VDOT) administers a Contract Compliance Program to meet FHWA regulations.
Key elements of the Contract Compliance Program are: organization and staffing; contract compliance review procedures; management of the On-the-Job Training (OJT) program; data collection, analysis, and reporting; and procedures to process complaints against highway contractors.
- DBE Compliance
- Equal Employer Opportunity
- Labor Compliance
- Locally Administered Projects Compliance
- On-the-Job Training (OJT) Compliance
- Civil Rights and Labor System Compliance
- Title VI Evaluation Report
- Consultant/Sub-consultant Contract Requirements
Of all the many elements in the DBE program, there is one that can have the most detrimental impact on the ability of the prime contractor to meet its contract goal, as well as the ability of a recipient to meet its overall goal. This element is commonly referred to as "commercially useful function" or “CUF”.
Both the prime contractor and VDOT/local government entity receive credit toward the DBE goal (contract and overall) only when a DBE working on a contract performs a CUF.
DBEs generally perform work on a contract either as a contractor, a trucker, a regular dealer or a manufacturer. While each of these categories is evaluated differently when determining whether the DBE has performed a CUF, there is one guiding principle that must be followed.
Under the terms established in 49 CFR §26.55, a DBE firm performs a CUF when it is:
"Responsible for execution of the work of the contract or a distinct element of the work . . . by actually performing, managing, and supervising the work involved."
The question often faced by contract administrators is, “What are the management, supervision, and performance actions of a DBE firm that satisfactorily meet this requirement?” Evaluating these areas will form the basis to render a determination that a DBE has in fact performed a CUF.
The contract is the one key reference point for any contract administrator and it is essential for this evaluation process. The contract has an effective description of the work to be performed by a DBE and is a legally recognized document.
The USDOT DBE regulations identify the following key factors that should be analyzed when determining whether a CUF is being performed:
- Evaluation of the amount of work subcontracted, whether it is consistent with normal industry practices.
- Whether the amount the firm is paid under the contract is commensurate with the work that is actually being performed to be credited towards the goal.
- When the DBE furnishes materials, the DBE must be responsible for negotiating the price, for determining the quality and quantity of the material, ordering the material, and paying for it. As a contractor, a DBE firm would typically be hired to both furnish the material and install it with its own labor force.
- Whether the DBE’s 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. In essence, was the role merely a contrived arrangement for the purpose of meeting the DBE contract goal?
- In determining whether a DBE is such an extra participant, you must examine similar transactions, particularly those performed by non-DBEs. A DBE must have a necessary and useful role in the transaction, of a kind for which there is a market outside the context of the program. The firm’s role must not be a superfluous step added in an attempt to obtain credit towards the goal.
In keeping with normal contract requirements, it is the primary responsibility of the prime contractor to ensure that the DBE is performing a CUF. The contracting agency has oversight responsibility to ensure that the prime contractor has effectively met this responsibility under its contract.
The EEO Contractor Compliance Program is developed to ensure that VDOT’s contractors, subcontractors, material suppliers, vendors and consultants do not discriminate in employment based upon race, color, religion, sex, national origin, age or disability; and, where the need has been identified, provide equal employment opportunity through affirmative action.
The EEO contractor compliance program establishes policies and procedures to determine a contractor’s compliance with EEO requirements, and when non-compliance is determined, a corrective action plan is established.
The EEO Compliance Program consists of an ongoing monitoring and review of contractor’s efforts to comply with applicable EEO and affirmative action requirements. A formal compliance review (EEO Contractor Compliance Review) is conducted to determine the contractors’ adherence to the requirements of the contract and the effectiveness of their affirmative action efforts.
The Civil Rights Division is responsible for providing guidance to VDOT contractors and agency personnel on all laws associated with the Davis Bacon and Related Acts (DBRA), the Fair Labor Standards Act, the Contract Work Hours and Safety Standards Act, and the Copeland Act.
Compliance with federal labor requirements is a condition of participation in federal-aid highway projects, pursuant to 23 U.S. C. Section 114.
It is a requirement of all highway contracts that federal and state labor regulations are followed throughout the prosecution of project work. The primary focus of the VDOT labor compliance effort is to protect workers from economic disruption caused by unlawful pay practices on federally assisted highway construction contracts.
VDOT has the responsibility and authority to make routine checks of contractors and subcontractors’ payrolls for accuracy and completeness with regard to names of employees, job classification, wage rates, hours worked, gross earnings, itemized deductions, fringe benefit programs and net weekly wages paid.
Labor compliance is a contract administration function and is administered by the Civil Rights Division, with assistance from the VDOT Construction Division.
The Civil Rights Division will monitor localities to ensure that all contractors and subcontractors awarded work will meet contractual equal opportunity requirements under Executive Order 11246, as amended, 23 U.S.C., FHWA-1273 (23 CFR Part 633), Road and Bridge Specification Section 110.3 (Equal Employment Opportunity) and Title VI of the Civil Rights Act of 1964, as amended.
The compliance monitoring process includes:
- Project site visits
- Employee interviews and review of documents, such as:
- Material tickets
- Lease agreements
- Any other information needed to render a compliance determination.
The OJT Program is an apprenticeship and training program targeted to move women, minorities and disadvantaged individuals into journey-level positions to ensure that a competent workforce is available to meet highway construction hiring needs, and to address the historical under-representation of these groups in highway construction skilled crafts.
Training and upgrading of minorities and women toward journeymen status are affirmative action steps and primary objectives of the On-the-Job Training Program (OJT) program.
Contractors shall make every effort to:
- Enroll minority and female employees as trainees to meet their contractual trainee goals.
- Provide on-the-job training and upgrading to veterans, minorities, women, the economically disadvantaged and all other interested persons, thereby increasing their skills and hiring and promotional opportunities.
- Meet the needs of the highway construction industry for knowledgeable and skilled workers.
- Demonstrate that equality exists in highway construction training opportunities as it relates to the essential function of the job, without regard to race, creed, color, sex, national origin, age or disability.
VDOT establishes goals for trainee participation on selected projects and contractors are expected to meet OJT goals. Individuals interested in developing experience to enter a skilled trade may contact contractors directly to inquire about trainee positions on specific VDOT projects. While VDOT establishes the project OJT goal, it is the contractor that selects applicants to work as trainees.
On-the-Job Training Manual for Standard Pre-Approved Job Classifications – Updated May 2016
Contractors and subcontractors are obligated to comply with nondiscrimination laws and regulations. VDOT’s Civil Rights Division, with the assistance from each applicable division’s program manager, monitors an organization’s compliance with the non-discrimination provisions.
To monitor compliance with Title VI, each contractor and all sub-contractors associated with federally assisted contracts are required to submit a Title VI Evaluation Form. This requirement is applicable for all contractors.
The Title VI Evaluation Form provides documentation that a contractor has procedures in place to prevent discrimination in programs and services based on Title VI.
Federal-aid contracts normally must include provisions that require compliance with Title VI. The specific contract provision language is included in Appendixes A, B, C, D and E of the Title VI Assurances which each state has executed.
Appendices A and E - apply to all federal-aid contracts and must be included as contract provisions. Examples of such contracts are:
- Construction contracts, both prime and subcontracts, and vendor/supply agreements.
- Consultant agreements for performance of work in connection with federal-aid highway projects.Typical ones are those for design work and environmental studies.
- Research agreements with colleges, universities or other institutions.
- Fee appraiser and fee attorney contracts in connection with federally-aided right-of-way work.
- Contracts between a STA and a contractor for relocation of utilities (does not apply when the utility company itself or its contractor relocates utilities).