The Investigation, Bid Monitoring and DBE Compliance branch is made up of three distinct units:
- Investigation Unit
- Bid Monitoring and Data Analysis Branch
- DBE Compliance
While each unit serves different functions for the Agency, the underlying goal of the branch is to detect and deter fraud and collusion related to NCDOT projects and activities by providing reviews, monitoring, analysis of data, and oversight.
The Investigation Unit
The primary focus of the Investigation Unit is the detection, deterrence, and prevention of fraud, waste, abuse and employee misconduct. To accomplish these goals a fraud hotline was implemented and employees are educated on the characteristics of fraud and avenues of reporting concerns. Various analytical tools are used throughout the unit for criminal, civil and financial investigations in addition to digital forensics and analysis. This group also acts as liaison to local, state, and Federal law enforcement for crimes committed against NCDOT.
- Digital & Computer Forensics
Digital Forensics is an application of computer science and investigative techniques to analyze digital devices. Examples of digital devices include personal computer hard drives, flash drives and mobile communication devices (MCDs). Digital forensic tools include computer monitoring, digital device imaging, and analysis of digital data using specialized hardware and software.
- Fraud Hotline
The Fraud Hotline lets employees and the public anonymously report alleged misconduct, ethical violations, safety issues or waste related to NCDOT business. The hotline service is provided by an outside vendor to allow anonymity to callers. Incidents reported by phone or web page are investigated; some complaints may be referred to the appropriate division for resolution and follow-up.
Bid Monitoring and Data Analysis
The Bid Monitoring Unit analyzes bidding behavior and item pricing in highway construction contracts. Findings from in depth studies are provided to NCDOT Administration that involves highway, bridge and resurfacing projects. Summary reports such as the Highway Construction Cost Index are produced to reveal important trends. Bid Monitoring uses AASHTOWare software to detect waste and collusion in construction contracts.
Disadvantaged Business Enterprise Unit
The Disadvantaged Business Enterprise (DBE) program is a legislatively mandated program administered through the U.S. Department of Transportation (USDOT) that applies to Federal-aid dollars expended on federally assisted contracts issued by USDOT recipients such as State transportation agencies (STAs).
The U.S. Congress established the DBE program in 1982 to:
- Ensure nondiscrimination in the award and administration of DOT-assisted contracts.
- Help remove barriers to the participation of DBEs in DOT-assisted contracts.
- Assist the development of firms that can compete successfully in the marketplace outside of the DBE program.
Section 1101(b) of the Safe, Accountable, Flexible, and Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) reauthorized the DBE program. The program is administered by the Federal Highway Administration (FHWA), the Federal Transit Administration (FTA), and the Federal Aviation Administration (FAA). Implementation of the DBE program has been guided by USDOT regulations found at 49 Code of Federal Regulations (CFR), Part 26.
The N.C. Department of Transportation (NCDOT) has established a Disadvantaged Business Enterprise (DBE) program in accordance with regulations of the U.S. Department of Transportation (USDOT), 49 CFR Part 26. NCDOT receives Federal financial assistance from the Department of Transportation, and as a condition of receiving this assistance, NCDOT has signed an assurance that it will comply with 49 CFR Part 26.
It is the policy and commitment of NCDOT that disadvantaged businesses, as defined in 49 CFR Part 26, shall have a level playing field to participate in the performance of contracts financed in whole or in part with federal funds.
The Chief Operating Officer for NCDOT has been designated as the DBE Liaison Officer. In that capacity, the COO is responsible for the implementation of all aspects of the DBE program. Implementation of the DBE program is afforded the same priority as compliance with all other legal obligations incurred by the NCDOT in its financial assistance agreements with the USDOT.
The NCDOT Office of Inspector General (OIG) is responsible for providing oversight and monitoring for compliance with the requirements of 49 CFR, Part 26. The OIG administers Disadvantaged Business Enterprise (DBE) Compliance through the DBE Compliance Unit ensuring that state and federal highway construction funds are not spent in a manner that encourages discrimination. The DBE Compliance Unit ensures the compliance of all sub recipients, contractors, and subcontractors and ensures labor compliance in accordance with Davis Bacon and Related Acts (DBRA). The DBE Contract Compliance Unit conducts compliance audits and monitoring, by assessing the commitment of sub recipients to DBE obligations, and contractor adherence to the requirements of 49 CFR, Part 26 to include “Commercially Useful Function” on Federal-aid contracts. Additionally, the Unit investigates matters related to DBE performance, certification eligibility, prompt payment, and DBE fraud.
Sub recipient Compliance:
The DBE Program requirements apply to all recipients and sub recipients of highway, transit, and airport funds to ensure nondiscrimination in the award and administration of USDOT-assisted transportation contracting. The requirements of the DBE Program, as prescribed in 49 CFR Part 26, apply to all programs funded in whole or in part with federal funds made available by the NCDOT. Local municipalities or agencies must either adopt NCDOT’s DBE Participation Plan or develop an equivalent plan. The DBE plan must have the approval of NCDOT and the Federal Highway Administration. Sub recipients must also ensure the DBE program compliance of its sub recipients, contractors, and subcontractors.
When a prime contractor signs a bid, the bidder is certifying that on work proposed to be sublet, the bidder has taken or will take affirmative steps to seek out and consider Disadvantaged Business Enterprises as potential subcontractors on highway construction projects where DBE goals are established. The Contractor shall contact DBEs to solicit their interest, capability, and prices in sufficient time to allow them to respond effectively, and shall retain, on file, proper documentation to substantiate its good faith efforts. As part of DBE Contract Compliance Program, NCDOT will monitor the Contractor's DBE involvement during performance of the contract.
DBE prime bidders shall make the same outreach efforts as non-DBE bidders and to document good faith efforts in situations where they do not fully meet contract goals. When a DBE participates in a contract, only the value of the work actually performed by the DBE is counted toward DBE goals.
Commercially Useful Function (CUF):
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 NCDOT to meeting its overall goal. This one element is commonly referred to as commercially useful function or CUF.
Federal regulations regarding CUF state the DBE is responsible for execution of the work of the contract and is carrying out its responsibilities by actually performing, managing, and supervising the work involved. Services and expenditures of a DBE contractor are counted toward DBE goals only if the DBE performs a CUF on the contract.
The DBE shall also be responsible, with respect to materials and supplies used on the contract, for negotiating prices, determining quality and quantity, ordering the material, and installing where applicable and paying for the material itself.
A DBE does not perform a CUF if 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. In determining whether a DBE is such an extra participant, you must examine similar transactions, particularly those in which DBEs do not participate. The DBE may be requested to present evidence to support its position of performing a CUF.
- A DBE Trucking Company will be determined to be performing a CUF by using the following factors:
- The DBE must be responsible for the management and supervision of the entire trucking operation for which it is responsible on a particular contract, and there cannot be a contrived arrangement for the purpose of meeting DBE goals.
- The DBE will itself own and operate at least one fully licensed, insured, and operational truck used on the contract.
- The DBE may lease trucks from another DBE firm, including on owner-operator who is certified as a DBE. The DBE who leases trucks from another DBE receives DBE credit for the total value of the transportation services the lessee DBE provides on the contract.
- The DBE who leases trucks from a non-DBE is entitled to credit for the total value of the transportation services provided by non-DBE lessees not to exceed the value of the transportation services provided by the DBE owned trucks on the contract.
- Materials and supplies are counted toward DBE goals as follows:
- If the materials or supplies are obtained from a DBE manufacturer, count 100 percent of the cost of materials and supplies toward DBE goals.
- If the materials or supplies are purchased from a DBE regular dealer, 60 percent of the cost of the materials or supplies is counted toward DBE goals.
The Davis Bacon and Related Acts, the Copeland Act, CFR 29 Part 3 and 5 and the FHWA-1273 are generally applicable to all federal-aid highway construction projects. The Davis Bacon Act of 1931 requires the payment of local prevailing wages and fringe benefits to laborers and mechanics employed directly upon the site of the work and requires that laborers and mechanics be paid unconditionally and not less often than once a week. The Copeland Act prohibits “kickbacks” of wages, regulates payroll deductions from wages and requires contractors furnish weekly a statement with respect to the wages paid each employee during the preceding week including a Statement of Compliance certifying that payrolls are correct and comply with federal laws.
Certified Payrolls must be submitted weekly to NCDOT by contractors and subcontractors on all federal-aid projects.
Payroll statements are reviewed for completeness and certification. Work classifications, hourly rates, overtime hours and rates, authorized deductions, fringe benefits and net wages paid are reviewed.
References and Useful Resources: