Phase: Applied learning · Worked scenarios · Calculations · Audit findings · Document drills
Apply what you've read — scenario by scenario, calculation by calculation
49 CFR Part 26, GFE, contract goals. Each exercise has a hidden solution — work through your answer before revealing.
I
Scenario 01
Setting a project-specific DBE goal
Setup
An LPA is preparing the PS&E for a $4.5M federal-aid road rehabilitation project. The work includes asphalt paving, striping, signing, and minor curb ramp ADA modifications. The LPA must set a project-specific DBE contract goal.
Question
How does the LPA set the project-specific DBE goal? What factors govern?
Solution
Process per LAPM Ch 9 and 49 CFR Part 26:
1. Identify subcontracting opportunities. Break the project scope into work items typically subcontracted (e.g., striping, signing, minor concrete, hauling, possibly trucking).
2. Survey DBE availability. Use the Caltrans DBE Directory and Unified Certification Program (UCP) list to identify certified DBEs in the relevant trades and geographic area.
3. Determine DBE availability percentage. Calculate the proportion of available DBEs to total available firms in each subcontracting opportunity category.
4. Calculate the weighted project goal. Combine availability across all subcontract types, weighted by estimated dollar value.
5. Document the goal-setting analysis for inclusion in the PS&E and DBE goal package submitted to Caltrans.
For this project, likely subcontracted items: striping/signing (high DBE availability), curb ramp concrete (moderate), trucking (high). Estimated subcontract portion: 25-35% of contract value.
Typical project-specific DBE goal range for Caltrans LPA projects in this trade mix: 8-15%.
The goal goes in the special provisions and contract document. Bidders must commit to the goal or document Good Faith Efforts (GFE) if unable to meet it.
Authority: LAPM Ch 9; 49 CFR Part 26
III
Audit Finding 01
Read the fact pattern — what's the finding?
Facts
A contractor submits the lowest responsive bid for a federal-aid project with a 12% DBE goal. The contractor commits to only 6% DBE participation. The contractor submits a Good Faith Efforts (GFE) package with their bid.
Analysis
What must the LPA do?
Finding · Citation · Corrective action
The LPA must evaluate the GFE package per 49 CFR Part 26.53 and LAPM Ch 9 before making award.
GFE evaluation factors:
1. Solicitation methods used. Did the contractor advertise in trade publications, contact DBE assistance organizations, use DBE directories?
2. Diversity of contacts. Did the contractor reach out to certified DBEs across the relevant trade categories?
3. Timing of contacts. Were DBEs contacted in time to respond meaningfully (typically 5+ business days before bid)?
4. Documentation of responses. Did the contractor document why proposed DBEs were rejected (e.g., higher cost, unable to meet schedule)?
5. Use of DBE assistance organizations. Did the contractor engage with CMSM Center or other DBE outreach programs?
6. Selection of portions of work for DBE participation. Was the work scope conducive to DBE participation, or did the contractor structure the work to exclude DBEs?
Determination paths:
• GFE adequate → LPA may award to this bidder.
• GFE inadequate → LPA cannot award based on this bid. Either award to the next responsive bidder (who meets the goal or has adequate GFE), or re-bid with modifications.
The LPA should also offer the bidder an opportunity to provide additional GFE documentation before final determination, per 49 CFR 26.53(d).
GFE determinations are commonly the source of bid protest. Document the evaluation thoroughly with written findings.
Authority: LAPM Ch 9; 49 CFR Part 26.53
Audit Finding 02
Read the fact pattern — what's the finding?
Facts
A federal-aid construction project completes with 4% DBE participation. The project goal was 10%. The contractor did not submit any DBE substitution requests during construction. The audit asks why the goal was not met.
Analysis
What is the LPA's exposure?
Finding · Citation · Corrective action
Finding: Under-achievement of contract DBE goal without documented DBE substitution requests. Under 49 CFR 26.53 and LAPM Ch 9, when a DBE subcontractor cannot perform, the prime is required to make Good Faith Efforts to replace with another DBE.
Evaluation:
1. Was there a DBE drop-out during construction? If yes, did the contractor document GFE to replace? If no documented GFE, the contractor failed to comply with contract DBE requirements.
2. Were DBE Commitment Replacement (DCR) forms filed? Per LAPM Ch 9, any DBE removal/replacement must be documented and approved.
3. Was the LPA monitoring DBE participation throughout construction? The LPA Labor Compliance Officer or DBE Compliance Officer should verify DBE work performance via monthly DBE reports.
Consequences:
• Audit finding for inadequate DBE administration.
• Possible withholding of final retention until DBE non-performance is addressed.
• Potential bid debarment for the contractor if found in non-compliance.
• Pre-Award audit risk for the LPA on future projects.
Corrective action: Implement formal DBE tracking processes. Monthly DBE participation reports during construction. Document all DBE substitutions with GFE. Ensure contract special provisions clearly require DBE substitution procedures.
Authority: LAPM Ch 9; 49 CFR Part 26.53
Applied learning · Companion chapter
These exercises apply the procedural framework presented in LAPM Chapter 09: Civil Rights and DBE. For the full chapter reference, glossary, and recall quiz, see the deep chapter file.