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METROPOLITAN ST. LOUIS SEWER DISTRICT
BUSINESS DIVERSITY
MBE Utilization and Workforce Program
Building Construction Projects
Effective August 5, 2015
PURPOSE
The Metropolitan St. Louis Sewer District (MSD or District) will provide opportunities for the meaningful
participation by Minority Business Enterprises (MBE) and for minority and women workforce on Building
Construction Projects performed for the District.
The Purpose of this procedure is to establish guidelines for MBE participation by applicable vendors,
bidders, contractors, service providers and any person, corporation, business, or other entity performing a
Commercially Useful Function (CUF) while doing business with the District on Building Construction
Projects. This procedure also establishes guidelines for workforce participation compliance.
MBE UTILIZATION
All certified MBE firms, interested in participating on an MSD contract, regardless of the procurement type,
are required to perform a Commercially Useful Function (CUF) in fulfillment of an awarded contract.
The purpose of the CUF requirement is to ensure that MBE firms are ready, willing and able to per form
specific requirements for which they are certified and authorized to perform, according to the terms and
conditions as set forth in the contract. Work performed by an MBE on MSD contracts must be consistent
with industry practices and other relevant considerations and has a necessary and useful role in the
transaction (i.e., the firm’s r ole cannot be a superfluous step added to a project in an attempt to obtain credit
towards meeting MBE goal requirements). CUF requirements also exist to prevent, to the extent possible,
MBEs from being utilized as a “pass through” or “front” for a prime contractor or another subcontractor.
A commercially useful function occurs when the MBE firm is responsible for execution of their contract and
performs responsibly by managing and supervising the work involved with respect to ordering materials,
equipment, supplies, negotiating price, determining quality and quantity, installing (where applicable), and
payment for its own materials and labor. If in the District’s jud gment, the MBE (even if certified) does not
perform a commercially useful function in performance of a contract, credit towards meeting stated MBE
goal will not be counted. When a MBE firm is the manufacturer of materials provided for performance on
the contract, or the MBE firm is providing labor in performance of a scope of services that is a necessary
requirement for the contract, the MBE firm will generally be considered as CUF, however all labor must be
tied to a specific project scope identified on MSD Form A.
A. MBE Requirements.
1. The Metropolitan St. Louis Sewer District (District) has established a MBE (African
American and Hispanic American) goal of 30.0% utilization for building construction
contracts in the amount of $50,000 or more. Exceptions will be noted in the contract
documents, when required.
2. A bidder who has achieved the 30.0% participation for MBE utilization as defined
herein will be in compliance with the requirements of this specification. A bidder who
cannot achieve the 30.0% MBE utilization goal must provide all documentation, as
prescribed in paragraph C.3 to demonstrate that good faith efforts were initiated prior
to submittal consisting of efforts undertaken to achieve the MBE goals. If the bidder
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does not demonstrate sufficient good faith efforts, the bid will be rejected as non-
responsive.
3. The term Minority Business Enterprises (MBE) refers to:
A Minority Business Enterprise (MBE) is defined as a business that is at least 51%
owned, operated and controlled by a minority or minority group me mbers, who are
citizens of the United States. “Controlled” means that the minority owner(s) must
exercise actual day-to-day management of the business. For this procedure the only
minority groups that will count for MBE participation are African American and
Hispanic American.
4. The District will accept, as prospective MBE participants for these projects, those MBE
firms which have been certified for the industry type of service and/or material for
which they are contracted by one or more of the following agencies on or before the
date of the bid opening:
Missouri State Office of Equal Opportunity
City of St. Louis
St. Louis Minority Business Council
Note: MSD does not accept reciprocity certifications from other certifying agencies.
B. Pre-Contract Award Obligations:
1. A properly signed bid will certify that the bidder has undertaken the good faith efforts
described in this MBE procedure to achieve the stated goal for MBE participation. It is
mandatory for each bidder to submit MSD Form A with their bid for consideration of
MBE sub-contractors to be utilized to fulfill goal requirements. All other MBE
participation information including but not limited to attachments to Form A, Form B,
and all attachments and information required to demonstrate good faith efforts (if
needed) must also be submitted to MSD with the original bid at the due date and time
specified. Failure to submit any of the information as required (on MSD Form A
and/or MSD Form B) will result in the bid being rejected as non-responsive.
2. To establish a bid as responsive, the bidder must document on MSD Form A the
proposed utilization and tier level of participation of MBE participants to be utilized
for achievement of the stated goals, and/or document on MSD Form B the good faith
efforts expended by the bidder to utilize MBE participants. The documentation
requirements are outlined in C.3, a-e below. For the purpose of determining the degree
of goal attainment through MBE sub-contractor joint ventures, MBE sub-contractors,
MBE manufacturers, MBE distributors, MBE suppliers, and MBE brokers, the following
methodology will be utilized:
a. A MBE joint venture sub-contractor consisting of a certified MBE and majority
business enterprise, functioning as a singular entity, will receive MBE participation
credit only for the MBE’s participation based upon a percentage of the dollar
amount of the work performed by the MBE entity. Only the verifiable dollar
amount as defined in paragraphs c. thru h. below will be allowed to count towards
MBE participation goals. Joint Venture Sub-Contractors must be pre-approved for
sub-contracting activities by MSD’s Diversity Division a minimum of 90 days prior
to the bid opening date for the project. To obtain approval, contact MSD’s Diversity
Division.
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b. All bidders including certified MBE’s must achieve the required 30.0% MBE
(African American and Hispanic American) utilization goal by obtaining
additional participation from certified MBE’s.
c. A contractor or sub-contractor who has an ownership stake (at any level) in
another business entity (whether as a parent or subsidiary) may not use that
organization for purposes of meeting goal requirements in a subcontracting
capacity on a MSD project. MBE participation must be obtained through
utilization of an independent, certified MBE (African American and Hispanic
American) contractor with no ownership affiliation to the contractor or
subcontractor in the hiring capacity.
3. Bidders will be credited 100% for qualified MBE participation of the dollar amount for
purchases made from certified MBE (African American and/or Hispanic American)
sub-contractors for work performed at the jobsite, but may include limited situations
where the sub-contracting activity relative to the work being performed on the contract
is performed at an off-site location but meets the CFU needs of the project (i.e.
reinforcing steel mats tied at a yard and then shipped to the jobsite, painting of
structural steel, etc.), subject to approval by MSD’s Diversity Division.
4. Any bidder will be credited with MBE participation for 100% of the dollar amount of
purchases made from:
MBE manufacturers who operate or maintain a facility and/or establishment
with a manufacturing business that produces on site materials, supplies, items
and/or equipment per specification documents; or
MBE distributors/suppliers contracted with a manufacturer to distribute
products and who will in fact provide qualified installation services on
MSD’s project which meets a CUF for the MSD project. The MBE
distributor/supplier must be engaged in marketing, sales, warehousing,
distribution, and delivery for the manufacturing entity.
a. MBE participation proposed under this category shall require the following
attachments to Form A:
Evidence that the MBE is certified within the identified manufacturing
industry;
Product specifications;
MBE’s location of manufacturing operations;
Address of MBE’s product marketing, sales, warehouse, distribution; and
Evidence of MBE’s proposed installation services on the contract.
5. Any bidder will be credited with MBE participation of 20.0% of the dollar amount of
purchases made from:
MBE distributors and/or suppliers possessing a manufacturer’s contract or
agreement and engaged in the sales, warehousing, and distribution of
materials and/or supplies.
MBE participation proposed under this category shall require as an attachment
to Form A identification of the address where the sales, warehousing, and
distribution activities occur.
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6. Any bidder will be credited with MBE participation of 3.0% of the dollar amount of
purchases made from:
MBE providers of materials and supplies who act as a broker or dealer and
who do not satisfy the requirements for any of the above categories must be
certified as a broker in accordance with the requirements of and by one of the
acceptable agencies listed in paragraph A.4. above.
7. A sub-contractor may be used for participation at any tier provided the bidder
identifies the “tier” level of utilization for the sub-contractor on MSD Form A and
submits verification of their certification along with any applicable required
attachments at the time of bid submittal.
8. Any non-certified MBE sub-contractor at any tier level does not count towards meeting
a bidder’s MBE participation goals. Therefore, all tiers of MBE sub-contractors are
required to subcontract only to other certified MBE sub-contractors providing the same
services in order to be counted towards meeting the MBE participation goals. Any
deviation from this requires immediate notification to and approval by the District.
C. Evaluation of Goal Achievement.
1. As a prerequisite, to demonstrate MBE goal achievement, the bidder must provide the
following documentation with their bid:
NOTE: MSD Form A must be used for this purpose.
a. Name identification of the Certified MBE sub-contractor;
b. Identification of the type of services, materials and/or work of the particular sub-
contractor to establish the MBE’s Commercially Useful Function;
c. Total dollar amounts for the MBE’s participation. Each MBE must be listed
separately;
d. Proof of valid certification status for all MBE sub-contractors;
e. Check box of the intended percentage of participation for each MBE sub-contractor
that is to be credited towards meeting MBE participation; and
f. Indicate the tier level of participation for each MBE sub -contractor.
2. MSD reserves the right to conduct on-site interviews and inspections of the MBE’s listed
on Form A at their place of business for purposes of verifying certification information
presented and to determine if the MBE’s business is in compliance with MSD’s
guidelines for MBE participation.
3. For bids that do not meet the District’s stated MBE goal, the bidder must document and
provide all good faith efforts undertaken by the bidder to achieve the stated goal. For a
bid to be considered responsive, efforts undertaken shall b e concentrated and aggressive
so as to reach the intended MBE targets for participation through various means of
personal contact, follow-up, and/or actual consultation with qualified certified MBE
firms.
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MSD Form B – Good Faith Documentation Requirement s
The following is a list of minimum requirements (a thru e below) a bidder must complete
in order to have demonstrated compliance with meeting the requirements for the
District’s “Good Faith Efforts”. All “Good Faith Efforts” must be undertaken with MBE
firms having skills or services relevant to the project being bid, and be “ready, willing
and able” to provide those skills or services. Information submitted as validation of
“Good Faith Effort” activities will be subject to verification.
a. Advertisements:
Bidder must provide documented proof of all efforts undertaken to extend
opportunities to local certified MBE firms through advertisements with locally
distributed media within the MSD service area. Advertisements must be
published at least fourteen (14) days prior to the bid due date. Examples
include: advertising in regional minority trade association newsletters,
minority-owned media specifically targeted to MSD’s service area, and written
notifications sent to minority contractor associations. Proof of advertisements
would include copies of the advertisement containing dates published or
publication affidavits. All other advertisements must be acknowledged by the
intended or targeted recipients.
b. Outreach to identify potential MBE’s for work being sought:
To assist bidders, a listing of certified firms is provided with solicitation
documents and a listing of certified MWBE contractors is also provided on
MSD’s supplier diversity website ( www.stlmsd.com) as a resource for bidders
to use for purposes of making contact with MBE’s to solicit for quotes, bids,
etc. However, it is the responsibility of the bidder to verify the current
certification status and MBE sub-contractor’s qualifications and experience to
perform work or supply services or materials as a MBE sub-contractor.
Any solicitation of letters, e-mails, or faxes sent by the primary bidder to reach
certified MBE’s must include the specific type of work being sought, or the
work delivery schedule conforming to the type of work that the MBE firm is
qualified to perform.
Bidder must provide documented contact with a minimum of two (2) MBE
professional or advocacy organizations, each of which has capabilities to assist
with identification of potential certified MBE’s for subcontracting
opportunities. Evidence of contact with the organization must be provided.
c. Bidder shall host a pre-bid meeting, prior to bid completion, to reach qualified
MBE’s. A Pre-bid meeting agenda with sign in sheets containing MBE’s contact
information and signatures must be submitted with bidder’s outreach
documentation. Announcement of pre -bid meetings, including date and time,
should be included in the bidder’s advertisement, referenced in paragraph “a.”
above.
As an alternative, local construction contractor associations or the
equivalent may advertise separately for a single location pre-bid meeting
for numerous potential prime and MBE firms. The prime contractor shall
submit sign in sheets showing their attendance and documenting the
attendance of MBE firms with outreach documentation.
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d. Written Correspondence and Notifications: In order to provide verification of
“good faith” efforts:
Bidder must provide copies of efforts to solicit bids and/or material quotes
from qualified MBE’s through timely notifications to solicit business via letters.
Those solicitations should be dated or postmarked a minimum of fourteen (14)
calendar days prior to bid opening. Solicitations may be sent using the
following methods:
o Registered or certified mail with a returned receipt required, or
o E-mail notifications with acknowledgement by recipient or confirmation
via returned “read” receipts, or
o Faxed documentation with acknowledgement by recipient or confirmation
receipts, or
o Courier with proof of the MBE’s acceptance signature
Verifiable proof of all such notifications must be submitted as confirmation of
the bidder’s due diligence to secure qualified minority participants within
MSD’s service area.
Bidder shall provide the listing used to solicit bids and must attempt to contact
an adequate number of certified MBE’s, whether sourced from MSD’s website
listing (www.stlmsd.com) or other MSD approved certifying agencies, must
be contacted in relevant work categories, as designated in the following table:
Number of MBE’s in Relevant Work
Category
Minimum Number of MBE’s
Contacted Based on MSD’s Website
List
Five or Less All Available MBE’s
Six to 10 At Least Five MBE’s
11 or More At Least 50% of Available MBE’s
e. Contracting in Good Faith with Interested MBEs
It is the bidder’s responsibility to identify and make portions of the project
work available to qualified MBE firms and to select those portions of the work
or material needed consistent with the available MBE firms, so as to facilitate
MBE participation. Evidence of such contracting outreach includes the names,
addresses, and telephone of MBE’s that were considered; a description of the
information provided regarding the plans and specifications for the work
selected; and evidence as to why additional agreements could not be reached
with the MBE’s to perform this work.
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A bidder using good business judgment would consider a number of factors in
deciding to contract with MBE firms and would take a firm’s price and
capabilities as well as project goals into consideration. Good faith effort include
those additional steps taken to do business with MBE’s such as negotiations,
one-on-one meetings, etc., the bidder takes beyond sending the initial request
for a quote to reach an acceptable agreement for participation with the MBE.
The ability or desire of a bidder to perform the work of a contract with its own
organization does not relieve the bidder of the responsibility to make good
faith efforts. A bidder is not, however, required to accept higher quotes from
MBE’s if the price difference is excessive or unreasonable.
D. Post Contract Award Requirement:
1. Within fifteen (15) calendar days after notice of award of the contract , MBE verification
letters signed by all the MBE participants or copies of all MBE related sub-agreements
signed by the contractor and MBE sub-contractors must be submitted to the District. If
a bidder fails to submit the required information and documentation within fifteen (15)
calendar days after notice of award, the District may withdraw the notice of award and
the bid security of that bidder will be forfeited to the District.
E. Contractual Requirements:
1. For the purpose of validating MBE compliance on any project, the District will perform
on-site monitoring.
2. During construction, the contractor must submit monthly online MBE utilization
reports to the District using the online Prism Reporting system. MSD will verify that
the contractor has reported their monthly MBE involvement participation upon receipt
of a progress payment request until the Final Payment Application for the project is
submitted. On months where there is no MBE activity, contractor must still submit a
report indicating no activity was performed for that month.
3. Changes to the contractor’s original or previously approved MBE utilization (MSD
Form A) will only be considered by the District for one of the following reasons:
a. The named MBE sub-contractor is unable to meet the delivery requirements of the
contract schedule.
b. The named MBE sub-contractor is dilatory in complying with the requirements of
the contract documents.
c. The named MBE sub-contractor is prevented from performing due to bankruptcy,
insolvency or circumstances related to the failure of the business.
d. The type and amount of work to be performed by the MBE sub-contractor is less
than what the contractor could have reasonably assumed at the time of the bid.
The contractor must promptly report to the District, in writing, any proposed
changes in the utilization of MBE sub-contractors, and include appropriate written
justification documentation, signed off by both the contractor and the affected MBE.
All contract modifications to MBE participation and/or MBE scope of work requires
a written District change order to the contract prior to final close out of a project.
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4. Before final payment will be authorized by the District, , the contractor must submit a
MWBE Payment Verification Confirmation Form (signed by both the contractor and
the MBE sub-contractor) for each MBE sub-contractor utilized on the project indicating
the full amount paid to date. Contractor must indicate on the Verification Form
whether this amount represents full or partial payment of all amounts owed to the
MBE sub-contractor. In a case where the total final payment to the MBE sub-contractor
cannot be made until the District makes its final payment to the contractor, the
contractor shall also indicate on the form the amount to be paid upon receipt of final
payment from the District. Upon receipt of final payment from the District, and
subsequent payment of any outstanding payments owed to MBE sub -contractors, the
contractor shall record final payment into Prism and submit a new MWBE Payment
Verification Confirmation Form for each MBE sub-contractor receiving such
outstanding payment confirming their receipt of final payment.
5. In the event the contractor fails to conform to meeting its MBE obligations, the
contractor must furnish to the District, in writing, the reasons for failure. If, in the sole
judgment of the District, there have not been sufficient good faith efforts taken on the
part of the contractor to meet its full contract MBE participation obligations, the District
will advise the contractor, in writing, of corrective actions to be initiated. If the
contractor fails to fully initiate the corrective actions in a timely manner, the District
may withhold the equivalent amount, which should have been paid to the MBE(s),
from any payments and/or institute appropriate actions pursuant to the provisions
that have been incorporated into the contract specifications. An equivalent amount
shall be defined as that portion of the MBE goal per party that was not met, as initially
set forth on MSD Form A or by an approved MSD contract change order agreement .
F. Disclaimer
The District's implementation of this MBE procedure and its requirements does not constitute
any endorsement of any MBE. By submitting a bid to the District, the bidder agrees to hold
harmless the District, its officers and employees, for all claims arising out of this bid or any
contract connected thereto.
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WORKFORCE REQUIREMENTS
Building Construction contracts in an amount of $500,000 or greater require compliance with workforce
participation goals dur ing project construction as follows:
A. Workforce Requirements
30.0% Minority workforce participation per trade;
7.0% Woman workforce participation per trade;
40.0% Total minority and woman apprentices (for any apprentices used).
Minority is defined as a male or female African American, Asian American,
Hispanic American or Native American.
B. Contract Requirements for Workforce
1. The contractor must comply with all applicable workforce contractual requirements
at the onset of all MSD projects.
a. At least fifteen (15) days prior to mobilization contractor is required to submit a
60 Day Project Workforce Plan to the District forecasting the anticipated
workforce utilization for the first 60 days of the project schedule for the Prime
contractor and any sub-contractors providing labor as a component of their
scope of work who will have workers on the project in the first 60 days of the
project schedule. At a minimum, the Project Workforce Plan will include the
following:
Name of each worker
Trade/Craft of each worker
Gender of each worker
Ethnicity of each worker
Employment Status, i.e., New Hire, Union Hall Hire, etc.
Length of employment with the Prime contractor or sub-contractor
2. In the event a contractor is not meeting the workforce goal requirements at the onset of a
project, contractor must include a project schedule which identified the contractor’s plan
for meeting the workforce goal requirements in addition to demonstrating “good faith
efforts” to be undertaken by both the contractor and sub-contractors to meet the
workforce requirements. To meet “good faith effort” the contractor must provide the
following:
a. Documented proof of initial contact with the resources listed below
requesting availability of qualified workers must be provided as well
as responses received to the request:
MSD’s Bud Training Program (SLATE)
MSD’s First Source Hiring Program (SLATE)
Documented contact with union affiliates (if applicable)
b. An action plan to fulfill contract workforce obligations by the end of
the project must be provided with documentation.
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3. All actions of good faith must include the steps listed in 2. a-b. Failure to meet these
minimum contract obligations will subject the contractor to sanctions on doing future
work with the District up to and including a complete prohibition from performin g work
on any District projects for a time period to be decided solely by the District.
4. Upon receipt of contractor’s 60 Day Project Workforce Plan by the District, contractor
will receive acknowledgement via email that the Plan has been received and is under
review. Within 5 business days of acknowledgement, contractor will receive a notice of
acceptance or request for additional information. This process will continue until an
acceptable plan is on file. The contractor is prohibited from proceeding with any portion
of the work having a workforce component until the Plan has been deemed acceptable by
the District.
5. Monthly Workforce Reporting Requirements: To be in compliance with MSD’s labor
and workforce reporting requirements contractor must utilize MSD’s online Prism
Reporting System. Contractor shall submit monthly workforce utilization reporting
online by the 10th of each month for the previous month. Certified Payrolls detailing
actual utilization for the past month for the Prime contractor and all sub-contractors
performing work in the month being reported. If the workforce goals have not been
met, the report shall also include documentation of specific “good faith effort”
performed in the past month as well as the planned actions to be taken by the contractor
and the sub-contractors to fulfill workforce contractual requirements.
a. As part of its monthly reporting, documented proof of “good faith
effort” activities including initial and ongoing contact with the
programs listed above must be provided along with documented
responses from each entity contacted to request diverse workers.
6. During the life of the Community Benefits Agreement (“CBA”), MSD shall ensure that
the First Source Hiring Program and Training Programs are material terms on all new
MSD CIRP contracts, all amended or renewed CIRP projects and voluntary extensions of
existing CIRP projects. Under these CIRP projects the requirements for use of these
programs shall commence as of the effective date of the contract. MSD shall actively
monitor performance of the BUD and First Source Hiring Programs, shall enforce the
requirements for use of the BUD and First Source Hiring Programs and shall take
appropriate enforcement actions to address noncompliance.
The BUD and First Source Hiring Programs provide access to targeted Minority and
Women applicants for MSD projects. Contractors shall receive from the Programs
prompt, cost-free eligibility lists of available qualified and trained applicants when
requested for MSD Projects. MSD requires contractor participation in the BUD and First
Source Hiring Programs with regard to all job vacancies on MSD projects by:
a. Prime Contractors and their subcontractors;
b. Contractors and subcontractors entering into or receiving an extension
in the scope of an existing project contract, an amendment or renewal
of an existing project in which the CBA was in effect at the time of the
original contract.
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Nothing contained in the CBA or MSD guidelines shall require contractors who are
subject to collective bargaining agreements with union affiliates to comply with
utilization of SLATE Programs which violates any component of bargaining agreement
terms. Conflicts with use of these programs with collective bargaining agreements must
be provided to the District with good faith effort documentation.
Contact Information for BU D Training and First Source Hiring Programs:
St. Louis Agency on Training and Employment (SLATE)
Program Administrator: CJ Neu
1520 Market Street, Suite 3050
St. Louis, MO 63103
(314) 657-3551, Phone
(314) 641-8440, Fax
www.stlworks.com
Applicant Intake Referrals Email: Constructionintake@stlworks.com
7. For the purposes of validating workforce compliance on any MSD project, the District
will perf orm on-site monitoring in order to confirm workforce compliance as described
in paragraph A above.
8. Failure to meet the “Good Faith” effort requirements listed above will subject the
contractor to sanctions on doing future work with the District up to and including a
complete prohibition from performing work on any District project for a time period to
be decided solely by the District.
FINAL AND ANNUAL DIVERSITY COMPLIANCE EVALUATIONS
A. Upon submission of contractor’s final payment request, MSD’s Diversity Division will
conduct a final evaluation of both vendor and workforce goal attainment on all contracts
with vendor and/or workforce goals prior to release of contractors final contract payment. A
contractor is considered to be in compliance with MSD’s Diversity Program guidelines upon
successful utilization of the MBE subcontractors proposed on contractor’s originally
submitted MSD Form A and satisfaction of workforce utilization goal requirements. Any
deviation from contractor’s originally approved MBE’s, requires contractor to have an
approved change order with appropriate justification documentation. Final contract
payments will not be approved without the required documentation.
B. For contracts exceeding $500,000, to meet workforce requirements, contractor must have on
file an Initial 60 Day Workforce Plan, all required monthly Workforce Utilization Reports for
Prime and Subs, all required certified payrolls for Prime and Subs, and any additional
required workforce compliance documentation such as good faith effort documentation in
the event contractor did not meet workforce requirements. Failure to meet workforce
compliance requirements can subject the contractor to sanctions on doing future work with
the District up to and including a complete prohibition from performing work on any District
project for a time period to be decided solely by the District.
C. On an annual basis, each pre-qualified contractor requesting to continue as an approved pre-
qualified contractor will be evaluated and scored on performance compliance with meeting
vendor and workforce goals. Failure to meet vendor and workforce compliance requirements
can subject the contractor to sanctions on doing future work with the District up to and
including a complete prohibition from performing work on any District project for a time
period to be decided solely by the District.