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HomeMy Public PortalAboutNon-Building Construction Projects 08/01/2023 Non-Building Construction Page 1 of 24 rev 08/1/23 METROPOLITAN ST. LOUIS SEWER DISTRICT BUSINESS DIVERSITY Utilization and Workforce Program for Non-Building Construction Projects Effective August 1, 2023 PURPOSE The purpose of the Metropolitan St. Louis Sewer District’s (MSD) Business Diversity Programs is to ensure that contracts are awarded in a manner that promotes economic inclusion across all segments of its business and maximize s opportunities for diverse participation. MSD will take all necessary and reasonable actio ns to alleviate and address any documented disparities identified by the results from its 2022 Disparity Study Update , conducted by Mason Tillman Associates, LTD. MSD promotes fair and open competition for meaningful participation of M inority and Women Business Enterprises (M/WBE) and for minority and women workforce participation on Non -B ui l di ng C onst r uct i on p rojects. Diversity Procedure Guidelines This procedure establishes guidelines for compliance with the Business Diversity Program for M/WBE participation by any and all Contractors, Subcontractors, Bidders, suppliers, service providers and any person, corporation, business, or other entity performing a Commercially Useful Function (CUF) while doing business with MSD on a Non-Building Construction Project. A. M/WBE Goals MSD has established subcontractor participation goals on Non-Building Construction contracts. Goals are applicable throughout the term of the contract and are initially calculated and expressed as a percentage based on the total bid amount (unless otherwise noted by MSD.) MSD will use amounts presented on MSD Form A to determine each subcontractor’s participation levels that would count towards goal attainment. Goal attainment is determined based on the aggregate total of all M/WBE’s participation amounts (expressed as percentage of the bid amount) listed on MSD Form A unless otherwise noted in Diversity’s initial bid analysis results. Final contract close out goal attainment is evaluated by Diversity and will be based on the final contract amounts inclusive of any amended amounts greater than $500,000 and throughout the term of the contract unless MSD in its sole discretion determines otherwise. A Minority Business Enterprise (MBE) is defined as a certified MBE b usiness that is at least 51% owned, operated, and controlled by one or more minorities who are citizens of the United States. “Controlled” means t hat the minority owner(s) must exercise actual day-to-day management of the business operations. The minority groups that will count towards meeting goals for MBE Subcontractor utilization are certified African American (Black American), Hispanic American, Asian American, Pacific Islander, American Indian, or Alaskan Native. A Women Business Enterprise (WBE) is defined as a certified WBE business t hat is at least 51% owned, operated, and controlled by one or more women who are citizens of the United States. “Controlled” means that the woman/women owner(s) must exercise actual day-to-day management and control of the business operations. Non-Building Construction Page 2 of 24 rev 08/1/23 1. Subcontractor M/WBE Goals for Contracts above $50,000 MSD has established a Subcontractor participation Minority Business Enterprise (MBE) goal of 10.00% utilization for Non -Building Construction cont ract s in the amount of $50,000 or more. Exceptions will be noted in the contract documents, when required. MSD has established a Subcontractor participation Woman Business Enterprise (WBE) goal of 10.00% utilization for N o n -B u i l d i n g C o n s t r u c t i o n c o n t r a c t s i n t h e a m o u n t o f $50,000 or more. Exceptions will be noted in the contract documents, when required. 2. Acceptable MBE and WBE Certifications for Meeting Goals MSD does not certify contractors or subcontractors. MSD accepts certifications issued by City of St. Louis Lambert Airport and the State of Missouri Office of Equal Opportunity. To be eligible for meeting goal participation M/WBE’s must possess a current valid certification issued by one of these approved certifying agencies at the time of proposal submission. The M/WBE’s certification must identify all codes issued for areas of industry classifications that the M/WBE is certified to perform work under the North American Industry Classification System (NAICS) or all areas of industry Segment Codes by which the M/WBE is certified to perform work for the scope they are proposing to be utilized. M/WBE goal participation will only count for scopes covered by the certification the M/WBE currently possesses. The approved certification agencies are: • City of St. Louis Lambert Airport https://flystl.diversitycompliance.com • Missouri State Office of Equal Opportunity https://apps1.mo.gov/MWBCertifiedFirms *Note 1: MSD does not accept reciprocity certifications issued by any other certifying agencies. Both agencies maintain a directory of certified firms with name, address, phone number, email address, and the industry codes for the type of work the firm or company is certified to perform as an MBE or WBE. On active construction projects, M/WBE’s whose original commitment was made at the time of bid and during the time the entity was properly certified, the dollar value of work performed under the contract with a certified firm after it has ceased to be certified can count toward the goal as long as the contract was executed prior to the firm becoming decertified. Project work scopes awarded after decertification (including change order work) will not be credited as work performed by a certified MBE or WBE. 3. Minority and Women Workforce Goals for Non-Building Construction The Metropolitan St. Louis Sewer District (MSD) has established a Minority workforce goal of 37.00% and Women workforce goal of 11.00% on all Non-Building Construction contracts in the amount of $500,000 or more. Apprentice goals are applicable only when apprenticeship training occurs on an MSD Non-Building Construction contract. When training takes place, the established Apprenticeship combined Minority/Women goal is 46.00%. Non-Building Construction Page 3 of 24 rev 08/1/23 Minority categories for workforce include male or female African American, Asian American, Hispanic American, Pacific Islander, American Indian, or Alaskan Native. B. Diversity Program Administration Diversity Programs Division reports to the Office of the Executive Director and is responsible to manage and monitor all utilization of M/WBE’s participating on MSD projects. All Non-Building Construction contracts with Diversity Program requirements will be monitored to ensure compliance. 1. Definitions for Non-Building Construction Award shall mean that MSD has identified and selected a Contractor (Contractor) as the intended recipient for work to be performed under contract as the Prime. Bidder refers to the individual, partnership, joint venture, corporation, or other legal entity who submits an offer in accordance with the invitation for bid. Business shall mean any organization or enterprise engaged in commercial, private, industrial, construction or professional activities involving making, buying, and/or selling goods or services. Change Order is a document that authorizes an addition, deletion or revision in the work, or an adjustment in the contract price, or the contract time issued on or after the effective date of the contract agreement. Commercially Useful Function occurs when an MBE or WBE is solely responsible for every aspect of execution of a scope of work under their own contract with responsibilities for management, performance, supervision, negotiating, hiring, ordering, installing, invoicing, and making payments without assistance. Compliance refers to Contractors and/or Subcontractors conforming with the terms and requirements they have contracted to perform. Contract refers to the agreement by which the successful bidder obligates themselves to do the work in accordance with the invitation for bids. Contractor refers to the individual, partnership, joint venture, corporation, or other legal entity who performs the work under the terms of an executed MSD contract. Good Faith Efforts (GFE) are actions taken to achieve pre and post contract goals or other requirements which by their scope and intensity demonstrate the Contractor’s responsiveness towards reaching the goals. Minority Business Enterprise (MBE) is defined as a certified MBE business that is at least 51% owned, operated, and cont rolled by one or more minorities who are citizens of the United States. “Controlled” means that the minority owner(s) must exercise actual day-to-day management of the business operations. MSD or “District” refers to The Metropolitan St. Louis Sewer District. MSD Diversity Reporting (MDR) is the cloud-based automated compliance and tracking software system that MSD’s Prime contractors are required to use for reporting on Subcontractor utilization, workforce utilization, payments, submission of certified payrolls and other requested documentation. Non-Building Construction Page 4 of 24 rev 08/1/23 MDR tracks progress of M/WBE goal attainment, payment verifications, concurrence of Subcontractor payments, records site visits, etc. Non-Building Construction refers to the program’s type of construction being performed. Non-Compliance refers to the Contractor’s or Subcontractor’s failure to adhere to their agreed upon terms as stipulated in MSD’s contract. Prevailing Wage Order establishes the requirements for paying wages on MSD construction projects. Prime Contractor refers to the firm that will perform an agreed upon scope of services under contract with MSD. Public Works refers to a broad category of infrastructure projects, financed and constructed by government entities for recreational, employment, health, and safety uses in the greater community. Responsive means the requirements for acceptance of a bid for further consideration have been met inclusive of all required documents, acknowledgements, and signatures submitted on or before the date and time specified, at the location specified and in the way that was requested along with any other criteria outlined by the solicitation. Subcontractor refers to a person or firm to whom the Prime or another Subcontractor has or intends to contract with to perform a scope of work on an MSD project as a MBE, WBE or Non-MWBE. Women Business Enterprise (WBE) is defined as a certified WBE business that is at least 51% owned, operated, and controlled by one or more women who are citizens of the United States. “Controlled” means that the woman/women owner(s) must exercise actual day-to-day management and control of the business operations. 2. General Diversity Program Guidelines a. Commercially Useful Function (CUF) - The purpose of CUF r equirements is to ensure that Prime s perform their due diligence to utilize M/WBE firms that are ready, willing and able to perform the scope of work for which they are qualifie d , certified, and authorized to perform in accordance with the terms and conditions as set forth in the contract at the time of award. Certified M/WBE’s participating on an MSD contract, regardless of the procurement type, are required to perform a Commercially Useful Function in fulfillment of meeting goal requirements and are subject to all conditions of Diversity Program’s requirements for compliance and monitoring beginning at pre-award and throughout the duration of the contract. i. A certified M/WBE performs a C ommercially Useful Function when they possess the sole responsibility for execution of the full specified scope identified for the M/WBE at the time of bid, upon contract award and in performance of the contract. The M/WBE is responsible for but not limited to all levels of work performance, management, supervision, supplier negotiati o n s, t erms and conditions, cost, determining quality, level of service, quantity, assignment of work, invoicing/billings, mobilization, logistics, payments, materials, supplies, equipment, certified payrolls and control of its own workforce . ii . Work performed by an M/WBE must be consistent with industry practices and other relevant considerations which demonstrate a necessary and useful role in the transaction (i.e. the firm’s role cannot be a superfluous step added to a project in an Non-Building Construction Page 5 of 24 rev 08/1/23 attempt to obtain credit towards meet ing M/WBE goal requirements). CUF requirements also exist to prevent, to the exten t possible, M/WBE ’s from being utilized as a “pass -through” or “front” for a Prime Contractor or another s ubcontractor . M/WBE ’s whose role is limited to that of an extra par ticipant in a transaction, contract, or project through which funds are passed in order to obtain the appearance of M/WBE participation is not considered as performing a C ommercially U seful F unction. iii . MSD will evaluate and/or monitor whether the M/WBE presented to participate on the contract serves a CUF during pre -award, during performance of the contract/project and upon completion of the project. Each evaluation will follow industry best practices in determining i f the M/WBE perform s a CUF . As sessment of all relevant factors including but not limited to cost , verification of certification (s ) supporting the M/WBE ’s qualifications for performing t he scope , work performance history , experience, assess ment if the amount of work for goal participation credit is commensurate with the overall project requirements and in comparison, similar transactions o f non -certified s ubcontractor s , along with a ny other pertinent factors that would assist MSD to make a CUF determination . If in MSD’s sole judgment, any M/WBE (even if certified) does not meet the requirements of perform ing a CUF for the scope of work presented , the Prime ’s credit for the M/WBE ’s participation listed for M/WBE goal participation will not be counted. b. Pre- & Post-Award Good Faith Efforts (GFE) – When a Bidder submits a bid that does not meet the assigned participation goals, Bidder must certify that GFE steps have been undertaken to achieve the goals and/or other requirements which by their scope, intensity and usefulness demonstrate the Bidder’s responsiveness and responsibility to fulfill the goals prior to submission of bids. Post award GFE’s demonstrates the Prime Contractor’s responsibility to perform measures to meet or exceed the contracted goals and any M/WBE commitments made to M/WBE’s for participating on the contract for the duration of the contract. i. Good Faith Efforts shall be evaluated on a case -by-case basis to determine whether the Bidder has provided sufficient documented evidence to meet the M/WBE Subcontractor goals to comply with Diversity Program requirements for Non-Building Construction contracts. The effort s employed are one s that could reasonably be expect ed that a Contractor would take if they were actively and aggressively attempting to obtain M/WBE participation suffic ient to meet the contract goals. Efforts taken that are mere checklist formalities shall not be considered as valid steps taken to secure true participation on a contract or to reach the intended goals. Therefore, the factors listed herein represent t he minimum actions that MSD will consider in determining whether the re was sufficient Good Faith Efforts performed to obtain enough M/WBE participation to reach the goals. ii . If the contract goals are not met and the Bidder fails to submit Good Faith Effort documentation as required by this guideline, Bidder will be found non -responsive and waives all rights to any appeal for reconsideration. c. Joint Ventures (JV) – A Joint Venture (JV) functioning as a single business entity can participate as a Prime Bidder if appropriately pre-qualified by MSD. In order for the Joint Venture to be recognized as Non-Building Construction Page 6 of 24 rev 08/1/23 a MBE or WBE, the Joint Venture must be certified by one of the acceptable certifying agencies identified in section A.2. For any JV subcontractor participation, MSD will only accept participation which meets requirements stated herein for serving a CUF by qualified and certified M/WBE’s. d. Mentor Protégé - MSD welcomes opportunities for mentoring of prospective M/WBE’s and may allow Mentor/Protégé agreements between certified M/WBE’s and non-certified business enterprises under the following provisions: 1. There must be a formal agreement in place between the parties which identifies the terms and conditions of the agreement. The agreement between the parties must be submitted at the time of bid with MSD Form A. MSD reserves the right to accept or deny the Mentor Protégé participation on the project. 2. Mentor/Protégé Agreements seeking M/WBE participation goal credit must clearly identify in detail the scopes and all costs associated with the work (material, equipment, labor, etc.) to be performed solely by the certified M/WBE. Participation credit will be based solely on verifiable Commercial Useful Function scopes performed by the M/WBE Subcontractor and performed independently of the Mentor. 3. It is an acceptable practice that a Mentor provides coaching, oversight and guidance in performance of work to assist with progression of experience and qualifications. However, only scopes of work completed exclusively by the certified M/WBE and which meet Diversity Program requirements for serving a Commercially Useful Function will count toward meeting goals. 4. Any training or work involving performance of shared tasks with any non-certified firm will not be allowed to count towards meeting goal participation credit. 5. During performance of the contract where mentoring is taking place, the Prime is required to notify Diversity of any scheduled work (including labor) being performed under a Mentor Protégé Agreement to ensure proper monitoring and compliance with serving a CUF. e. Tier Levels of Participation - Certified MBE and WBE Subcontractors may be used to obtain participation goal credit at any tier provided the bidder properly identifies the “tier” level of utilization for the subcontractor on the MSD Form A at the time of bid. It is the responsibility of the Prime to ensure that any M/WBE presented to participate on the contract and listed on MSD Form A to meet goals are qualified and certified with an acceptable certification agency. At the time of bid, Diversity verifies that M/WBE’s have active and valid certification codes for the work scope(s) to be performed. New M/WBE subcontractors that have not previously worked on an MSD project or who will be performing a new category of work not previously performed are required to possess valid NAICS or Segment Codes for the proposed scope(s). Any non-certified Prime or Subcontractor at any tier level will not be counted towards meeting MBE or WBE goal participation. f. Contractor and Subcontractor Ownership Relationships - A Contractor or Subcontractor who has any common ownership interest or family relationship (at any level) in another business entity (whether as a parent, subsidiary or otherwise) may not use that affiliated organization for purposes of meeting goal requirements in a Subcontractor capacity on a MSD project. M/WBE participation must be obtained through utilization of a n independent, certified MBE or WBE with no ownership interest or family affiliation to the Prime or Subcontractors on the project. Non-Building Construction Page 7 of 24 rev 08/1/23 g. Special Provision for Acceptance of Two-Party Checks - (Can only be used for Joint Check Payment of Fringe Benefits) The following provision only allows for Primes to make joint payments (two-party check made payable to an MBE firm and a third party benefit provider) for fringe benefits (pension, welfare, vacation, training, or other fringe benefit) that are due to benefit providers while employees are performing work on an MSD contracted job if the subcontractor is in an arrears status at the time of contract award, has been in an arrear status at any time within the most recent 24 month period, or becomes in arrears prior to completion of their portion of the contract work during the project with any of their payments of fringe benefits. The District must receive written notice signed by the MBE firm, Prime and third party benefit provider of the arrangement prior to the start of work or when such agreement is made necessary by failure of subcontractor to pay benefits during the course of the subcontract. Prime contractors would receive full credit for the two-party payments with submission of copies of the paid checks (front and back) as verification of the payment and validation list of employees for which the payments are made with final validation (via submitted certified payrolls) that these employees worked on the MSD project. The third- party benefit provider shall also agree not to seek garnishment of any payments owed by the contractor to the subcontractor for this project. h. Subcontractor Advance Payments (Mobilization) - Primes shall notify M/WBE subcontractors when mobilization payments are an available option. An amount will be paid to the Prime contractor for the purpose of making advance payment to eligible subcontractors in anticipation of the subcontractor’s mobilization to the jobsite. Payment to M/WBE subcontractors shall only apply to the category of “Material/Supplies including Labor or Installation” and/or “Service Provider/Installer” as listed on MSD Form A at the time of bid, and as confirmed by the District. Please refer to the General Conditions or Project Technical Specifications for additional Advance Payment information. Subcontractors shall be paid a reasonable amount not to exceed 5% of the amount of their contract no later than five business days prior to mobilizing to the job site to begin work. Mobilization payments to M/WBE’s are required to be identified on MSD Subcontractor Verification Form and reported into Diversity’s compliance reporting system as an “Advanced Payment.” i. Immediate Need and Emergencies – MSD has established “Guidelines for the Development and Maintenance of an Emergency Contractor List” which states Contractor Requirements for providing the District with a list of the M/WBE subcontractor/vendors that the Contractor is committed to utilizing to the extent practical based on the emergency scope of work, the availability of the subcontractor(s) and the reasonableness of the subcontractor’s cost proposal. C. Pre-Contract Award 1. Required Documents - As a prerequisite to award of a contract, all bidders must demonstrate full responsibility and responsiveness to all specifications including Diversity Program requirements. These guidelines require that bidder is responsible for compliance with submission of all required Diversity documentation by the due date and time of bid. To evaluate goal achievement and adherence to all Diversity requirements, listed below are documents which must be provided at the time of bid. Non-Building Construction Page 8 of 24 rev 08/1/23 a. MSD Form A. Failure to submit MSD Form A will result in a “Non-Responsive” determination for the bidder: 1) List the name of the Prime Bidder; 2) List the names of the certified M/WBE, Certification Agency and Ethnicity of the M/WBE. Please note that a M/WBE business that is certified as both MBE and WBE cannot count as participation in both categories on an MSD Non-Building contract; 3) List the tier level of participation for the M/WBE. Identification of who the M/WBE subcontractor will work under must also be disclosed; 4) Identification of the M/WBE’s eligible percentage to be credited to the participati on goal; 5) Description of Scope of Work for each M/WBE must be provided; 6) List the total dollar amount for each proposed scope for which credit of the M/WBE’s participation will be received. If M/WBE is a supplier, bidder must provide the full dollar amount to be used to calculate the participation percentage to count towards goal credit; 7) List the subcontracting total at the bottom of each Form A (use additional sheets if needed). b. Subcontractor participation listed on MSD Form A containing any of the following activities are required to submit supplemental information to Form A as stated herein: 1) Mentor-Protégé Agreements (B.2.d) 2) Lease Agreements (C.2.e.ii-iii) c. MSD Form B – Good Faith Efforts - For bids that do not meet MSD ’s stated M/WBE goals, MSD Form B is required along with all documented proof of “Good Faith Efforts” undertaken by the bidder to achieve the goals as specified below under “Evaluation of Bids .” 2. Diversity Program Guidelines for Evaluation of Bids a. Goal Achievement - The M/WBE subcontractor goal participation amounts are 10% MBE and 10% WBE for MSD Non -Building construction contracts. All bidders including certified M/WBE ’s must achieve the required goal percentages or successfully perform “Good Faith Efforts” as outlined herein . Utilization of M/WBE’s solely for the sole purpose of providing “Labor ” does not serve a CUF and will not be allowed to count towards meeting goal participation on an MSD construction contract . b. Bid Clarifications - For evaluation purposes , MSD reserves the right to request written clarifications, request additional documentation, or to conduct interviews via meetings virtually or on-site at any subcontractor’s including M/WBE’s place of business. Any information gathered is for purposes of verifying certification information, commercially useful function, experience, and qualifications relative to participation on the contract. Clarifications will only apply to information submitted in the original bid response. c. All M/WBE participation submitted in response to MSD’s bid will be considered a component of the bid and used in the evaluation process to become a binding contractual requirement of the final contract awarded to the bidder and must be attained by the Prime Contractor. d. MSD reserves the right to not give full credit for proposed M/WBE participation to meet participation goals. Examples of participation adjustments may include but is not limited to the following: 1) Bidder’s failure to validate or provide evidence that the M/WBE will perform a “Commercially Useful Function” on the project; 2) Bidder’s failure to validate that the M/WBE is certified at the time of bid; or 3) Bidder’s failure to verify that the M/WBE is qualified to support the scope(s) identified on MSD Non-Building Construction Page 9 of 24 rev 08/1/23 Form A, etc. After any adjustments, the final total amount for M/WBE participation will be recalculated as a percentage of total bid to determine if goals were attained. Reductions in the amounts listed on MSD Form A could result in a Bidder’s falling short of attaining the goal rendering the Bidder as “non-responsive” if acceptable “Good Faith Efforts” as described herein are not successfully demonstrated. e. MSD Diversity will determine the amount of credit allowed to count towards meeting participation goals based on the following: i. Bidder will be credited 100% of the dollar amount for self-performed scopes solely provided by a qualified and certified M/WBE subcontractor for work serving a CUF and performed on or at MSD’s jobsite with its own workforce. ▪ On a case-by-case basis, evaluation may be required involving unique situations of subcontracting activity relative to a contractor’s work scope presented to be performed on the contract to render a determination if any portion of the scope should or should not be allowed to count, i.e, work that is completed at an off-site location but meets the CUF needs of the project (i.e. reinforcing steel mats tied at a yard and then shipped to the jobsite). ii. Bidder will be credited with 100% of the dollar amount of participation for an M/WBE for: ▪ M/WBE manufacturers who owns, operate and maintain a factory and/or establi shment as a manufacturing business which produces on site materials, supplies, items and/or equipment per spec ification documents. For purposes of this section, a manufacturer is a firm that operates or maintains a factory or establishment that produces product on the premises, is in possession of a business license for the manufacturing operation and can demonstrate an existing customer base outside of MSD’s projects. ▪ M/WBE distributors/suppliers contracted with a manufacturer to distribute products and who will in fact provide qualified installation services of the manufactured or distributed supplies/materials for which they are authorized to sell or distribute. The M/WBE distributor/supplier must be actively engaged in the marketing, sales, warehousing, distribution, and delivery for the manufacturing entity. o M/WBE participation proposed under this category shall require the following Attachments to Form A: 1) Evidence that the M/WBE is certified within the identified manufacturing industry; 2) Product specifications; M/WBE’s location of ma nufacturing operations; 3) Address of M/WBE’s product marketing, sales, warehouse, distribution; and 4) Evidence of M/WBE’s proposed installation services serving a CUF on the contract. iii. Any bidder will be credited with 60% of the total dollar amount of purchases made for Materials and/or Supplies from qualified and certified M/WBE’s and serving a CUF based on the following: Non-Building Construction Page 10 of 24 rev 08/1/23 ▪ M/WBE participation proposed under this category shall require as an attachment to MSD Form A identification of the address where the sales, warehousing, and distribution activities occur. For purposes of this section, a manufacturer/distributor is a firm that operates or maintains a facility or establishment in which materials, supplies are bought, stocked, and are available in the marketplace for purchase by the public in the usual course of business. The M/WBE must be in possession of a business license for its operations and can demonstrate it has an established and customer base. iv. Any bidder will be credited 3% of the total dollar amount of purchases made as a Broker or Dealer. ▪ M/WBE’s who act as a broker/dealer and who do not satisfy any of the aforementioned requirements under any of the a bove categories will be considered to be performing as a broker/dealer. The M/WBE must be certified as a broker or dealer by one of the acceptable certification agencies. ▪ Fees and/or commissions charged for assistance through liaisons such as manufacturers’ representatives, others who administratively arrange or expedite transactions, procurements, training mentors, industry experts, labor, deliveries, etc. are not considered to serve a commercially useful function under these guidelines and will not be counted towards participation goals. v. Transportation Participation Credit – Bidders will be credited for participation involving services for trucking, hauling or ready-mix hauling in the following manner: 1) Bidders will receive credit for the total contracted value for an M/WBE that owns, insures and operates its business using drivers it employs. The M/WBE must be responsible for the management, control and supervision of the entire operation for which it is responsible in performance of the contracted scope. 2) The M/WBE listed on MSD Form A must own and operate at least one fully licensed, insured, and operational vehicle that will be used in performance of the contract. 3) Credit will be granted for the full value and use of other qualified and certified (by an acceptable certification agency) M/WBE’s possessing the same certification category for the scope required to meet the original type of participation credit listed on MSD Form A at the time of bid. 4) MSD Trucking Reports will be required for all subcontracting activity involving any non-certified transportation services, including but not limited to trucking, hauling, ready-mix hauling, or as determined by MSD Diversity. 5) A M/WBE may lease vehicles with or without drivers from an established leasing company and receive full credit for the total value of the transportation services. Lease participation is subject to approval by Diversity and must be presented prior to the start of work. The Lease must be provided to MSD and list all terms and conditions of the lease including terms for the exclusive use and control of the leased vehicle. Leased vehicles on the project site without properly displaying the name and identification number of the M/WBE will not be allowed to count towards participation goal credit. 6) Credit will not be granted for use of any non-certified entities (Trucker/Haulers/Ready Mix). Non-Building Construction Page 11 of 24 rev 08/1/23 vi. Lease and Equipment Agreements – Bidders are required to disclose all proposed Agreements/Contracts for the lease of materials, vehicles, machinery, equipment, etc. at the time of bid. This applies to the Prime, M/WBE subcontractors, and any non-certified subcontractors under which participation goal credit is being sought. On a case-by-case basis, Diversity will evaluate and approve credit for any and all participation involving lease agreements as follows: 1) M/WBE’s may receive credit under a Lease Agreement if rates and the terms of lease are consistent with industry practices and standards. The terms will at a minimum identify: Lessor, Lessee, description of equipment, cost, payment terms, etc. Only Lease payments verified via compliance monitoring activities and performed by Diversity will be allowed to count towards goal participation credit. All unverified lease payments will not count towards goal participation credit. 2) On a case-by-case basis, for specialized equipment (e.g., crane) which is on the project site and not provided by a M/WBE subcontractor, the operator for that specialized equipment may or may not be listed on the M/WBE’s certified payroll and would require evaluation by Diversity as to the acceptability and credit towards goal participation. Generally acceptable practices within industry standards with regards to the operation of the specialized equipment will apply, however the M/WBE must retain full control of their scope. 3) A M/WBE must provide an operator for any non-specialized equipment and must be responsible for all labor compliance requirements as stipulated in MSD’s Diversity Program Guidelines for serving a commercially useful function. Only Lease payments verified via compliance monitoring activities and performed by Diversity will be allowed to count towards goal participation credit. All unverified lease payments will not count towards goal participation credit. 4) Participation credit may be granted for the full value amount of the lease for an M/WBE that self-performs using its own forces. 5) Any supplies, materials, equipment etc. that a M/WBE subcontractor purchases or leases through or from the Prime contractor or its affiliate will not count towards goal participation. f. Evaluation of Pre-Award Good Faith Efforts - When a Bidder does not meet MSD ’s stated M/WBE goals, MSD Form B and all documented proof of “Good Faith Efforts” to achieve the stated goals are required to be submitted at the time of bid. Good faith efforts are quantified to determine if a Prime contractor has provided evidence of good faith effort to meet the participation goals. To be considered responsive, bidder must demonstrate achievement of a minimum score of 90 of the total 100 available points. Points are given based on complete fulfillment of each category with no opportunity for partial award of points. Listed below are the minimum requirements (f, i-viii) and allotted point assignments for each category that a b idder must satisfy in order to demonstrate they have exhausted all available opportunities to achieve the M/WBE participation goals. The listed steps below are not intended to be an exhaustive effort that is restricted to only complete a checklist of items performed to meet good faith efforts. These steps are intended to secure participation of the targeted group(s) for purposes of util izing that participation Non-Building Construction Page 12 of 24 rev 08/1/23 to fulfill bid goal requirements. i. Advertisements (15 Points): A minimum of two (2) advertisements meeting the following requirements: • Advertisements must be published at least fourteen (14) days prior to the bid due date and time and targeted within locally distributed media areas so as to reach M/WBE ’s who are certified by one of the acceptable certification agencies to MSD. • MSD requires verifiable, documented p roof for the two (2) d igital/printed advertisements: i.e., physical copies of the actual advertisement with verification of publication, dates published or publication affidavits. • Advertisements must solicit to extend opportunities targeted to certified M/WBE’s by soliciting for specific services and/or scopes or identified by project specifications that will serve a Commercially Useful Function on the contract. • MSD will accept digital electronic forms of advertising with documented proof of a valid website, dates of advertisement, and validation of distribution to targeted M/WBE’s. • Only one (1) advertisement activity can satisfy the requirements identified in section (c) below for purposes of hosting a pre-bid meeting. ii. Outreach (15 Points): Conduct at least two (2) acceptable methods of outreach listed under this category to reach potential M/WBE’s for the specific work solicited for the project: • Conduct or attend at least two (2 ) direct targeted contact outreach events which generate direct contact with qualified M/WBE ’s , e.g., business networking, diverse business fairs, diversity conferences, direct meetings with M/WBE ’s, etc. Valid Proof of meeting attendance is required. • Emailed outreach notification efforts must meet the following requirements: a. Contractor must provide email logs con taining a copy of emailed correspondence sent, business/firm name, contact ’s name, phone, email address, date, time, and “read” receipt of the intended email recipient. Emails must be targeted to certified M/WBE ’s from the approved certifying agencies that MSD accepts. b. The emailed correspondence must contain project specific information and scopes that the Contractor is seeking M/WBE ’s to fulfill. c. The emailed correspondence must identify Contractor seeking to hire M/WBE ’s and the contact information. • Faxed or other electronic forms of outreach efforts must meet the following requirements: a. Fax logs provided must contain a copy of correspondence sent, Non-Building Construction Page 13 of 24 rev 08/1/23 business/firm and contact ’s name, phone, email address, date, time, and “read” receipt of the intended e mail recipient. Emails must be targeted to certified M/WBE ’s from the approved certifying agencies that MSD accepts. b. The faxed correspondence must contain project specific information and scopes that the Contractor is seeking M/WBE ’s to fulfill. c. The faxe d correspondence must identify the Contractor seeking to hire M/WBE ’s and their contact information. • USPS outreach correspondence must meet the following requirements: a. Provide copies of the correspondence mailed via US Postal Service by certified mail with a signed return receipt requested as proof of delivery to the intended recipient containing the following information: Name, mailing address, phone, mail stamped date and time. Mailings must be targeted to certified M/WBE ’s from an approved certifying agency that MSD accepts. b. The mailed correspondence must contain project specific information and scopes that the Contractor is seeking M/WBE ’s to fulfill. c. The mailed cor respondence must identify Contractor seeking to hire M/WBE ’s and the contact information. iii. Bidder must provide documented proof of c ontact with a minimum of two (2) Professional, advocacy or similar organizations with capabilities to assist with the identification of potential certified M/WBE ’s for subcontracting opportunities (10 Points). • Evidence of contact with each organization must be provided, e.g., a “Read” receipt provided for emailed correspondence; a signed “Certified Mail” receipt for US Postal. • Membership communications with industry organizations and associations will be allowed with documented proof of event attendance and registrations provided. However, contact must have been during the 14 day time frame of the bid due date. iv. Bidder must advertise and host a Pre-Bid meeting specifically for the particular MSD project for which Good Faith Efforts are being conducted at least 14 days prior to the bid due date and time (10 Points). • Meeting agenda and sign-in attendance lists containing the dates, times, names and contact information for all M/WBE’s who were in attendance must be provided. Documented proof of attendance must also be provided for any virtual or online meeting platforms. • Agenda items must cover the specific scopes of work being solicited from eligible certified businesses. • The method of advertisement for the Pre-Bid meeting must be provided. Advertisement must include the name and number of the MSD project, date(s) and time of the meeting. Advertisement must also include a listing of available work being solicited from M/WBE’s. • As an alternative, local Construction C ontractor A ssociations or the equivalent may advertise separately for a single location pre -bid meeting for numerous potential Prime Bidders and/or MBE firms. The Prime contractor shall submit sign in sheets showing Non-Building Construction Page 14 of 24 rev 08/1/23 their attendance and documenting the attendance of M/WBE firms with good faith effort documentation. This will only satisfy one of the advertisement requirements for good faith efforts as stated above. v. Bidder must contact an adequate number of available certified M/WBE’s (20 Points). • Verifiable proof of all notifications to M/WBE’s must be provided as confirmation of the Bidder’s due diligence to secure qualified M/WBE participation. Notifications must be made in a timely manner at least 14 days prior to bid submission due date and time. • A source listing identifying how many M/WBE’s were contacted for each of the specific scopes solicited must be provided. Bidder must provide an itemized listing for each separate scope with all of the M/WBE’s contacted for that specific scope to include: name of M/WBE firm, M/WBE’s contact person’s name, complete address, phone, email, date/time of contact, method of contact, copy of correspondence identifying the scope and size of relevant work being solicited from the M/WBE firm for which they are qualified to perform, any and all details of communications with that M/WBE firm. • As a resource and to assist Bidders with locating certified M/WBE’s, below are direct links to the two (2) certifying agencies that are acceptable to MSD. Each agency provides a listing database with direct contact information of certified M/WBE’s. However, it is the sole responsibility of the Bidder to verify that the M/WBE ’s have current certification status and are qualified to perform a C ommercially U seful F unction for their portion of the work on the project. • City of St. Louis Lambert Airport https://flystl.diversitycompliance.com • Missouri State Office of Equal Opportunity https://apps1.mo.gov/MWBCertifiedFirms vi. Contracting in Good Faith with M/WBE’s (20 Points) A bidder using good business judgment would consider a number of factors in deciding to contract with M/WBE firms and would certainly take a firm’s price, capacity, past performance, experience and qualifications as well as project goals into consideration. Good faith efforts include those additional steps taken to do business with M/WBE’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 M/WBE. The ability or desire of a bidder to perform the work on 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/bids from M/WBE’s if the price is excessive or unreasonable, however, MSD has the right to request additional clarification as to how pricing was the determining factor for rejection of an M/WBE’s quote/bid. • It is the Bidder’s responsibility to specifically identify sufficient portions of the project that would result in attainment of the goals based on the project size. It is also the Bidder’s responsibility to select and actually make available to M/WBE’s portions of work consistent with performing a Commercially Useful Function on the project. • Bidder must document any meetings and/or negotiations conducted with M/WBE’s and Non-Building Construction Page 15 of 24 rev 08/1/23 provide dates, times, participants, etc. and include information pertaining to any follow-up contact made with the M/WBE’s, e.g., telephone calls, fax, email, etc. which demonstrates that the communication was done in a timely manner giving sufficient time for M/WBE’s to respond. • Verification documentation of the various methods of communication to conduct negotiations shall be provided to include copies of bids, proposals, quotes, etc. and the Bidder’s reasons for rejection of the M/WBE’s submission. vii. Justification Statement (10 Points) ▪ All Bidders are required to provide a separate justification statement which accurately and adequately gives details as to why the Good Faith Efforts performed did not result in sufficient M/WBE participation to meet the required goals. Failure to provide the justification will result in the Bidder being deemed non-responsive for meeting GFE. viii. Diversity’s GFE evaluation will determine if the Bidder obtained the minimum point requirements to successfully pass “GFE” and if so, the Bidder’s submission will be deemed “responsive” to move forward in the evaluation process for consideration of contract award. Failure to meet the minimum requirements to pass GFE will result in the Bidder being deemed “non-responsive” and the Bidder will not move forward for consideration in award of a contract. g. Determination of Award – Upon completion of Diversity’s initial bid evaluation of the three (3) lowest bids (or number as determined appropriate), the Manager of Diversity Programs (or designee) makes a recommendation for award by way of approval of Diversity’s evaluation results to the procuring division based on: ▪ If the apparent low bidder successfully meets all goals with acceptable M/WBE participation and/or provided sufficient good faith efforts as to why it could not reach the required levels of participation, the bidder would be considered responsible and responsive to Diversity Program requirements and move forward in the competitive bid evaluation process for award of a contract. ▪ If the apparent low bidder fails to reach the goal and does not provide sufficient good faith efforts as to why it could not reach the required levels of goal participation, the bidder would be deemed “nonresponsive” and not to receive further consideration for award of a contract in the competitive bidding process. The bidder will be informed in writing and award consideration moved to the next apparent low bidder. This process shall continue until there is a successful recommendation for award, or there are no remaining eligible bidders for consideration, or all bids are determined ineligible for award or are otherwise rejected. D. Post-Award Compliance, Monitoring, and Reporting Upon award of a contract, the Prime Contractor is required to meet the agreed upon level of M/WBE participation as presented and approved at the time of bid and according to the contract terms. The following steps will be taken on the part of the Diversity Program to ensure compliance. a. Award Notifications: Upon issuance of Notice of Award (NOA), the Prime Contractor will be notified of all required documentation or additional information to be submitted prior to final Board adoption and issuance of a Notice To Proceed (NTP) and/or Purchase Order (PO). Failure to comply with submission requests can subject the Contractor to rescinding of the notice of award or termination of the contract. M SD Form A submitted with the bid contains the names and pertinent Non-Building Construction Page 16 of 24 rev 08/1/23 subcontractor information for all MBE’s and WBE’s scheduled to perform work on the project. Within (15) calendar days after NOA of a contract the following Diversity forms are due from the Prime: ▪ Signed M/WBE Subcontractor Vendor Verification Forms for all subcontractors listed on MSD Form A at the time of Bid. Form must be completed in its entirety. b. Confirmation of Subcontractor Utilization: To confirm an MBE’s and/or WBE’s participation on the contract, MSD Vendor Verification Form must be executed/signed by both the Prime and each MBE / WBE Subcontractor scheduled to perform work on the contract in any capacity. The form identifies the Prime’s commitment to the MBE or WBE to meet goals and for capturing all other participation, voluntary and otherwise on the contract. The form contains the name, address, certification type, description of work for the Subcontractor, and the dollar amount and percentage value of work to be performed on the contract. The MSD Vendor Verification Form serves as the Subcontractor’s acknowledgement and notice of their intent to perform on the contract and is considered to be a binding agreement made with the Prime. The Vendor Verification Form also serves as the Prime’s notice to MSD of its intent to utilize the Subcontractor and the agreed upon scope, initial amount and final utilization percentage based on the final contract amount. All other executed Subcontractor and/or Lease Agreements involving M/WBE Subcontractors must be submitted to Diversity upon execution. ▪ MSD Form C lists all non-certified subcontractors that will be performing work on the project. c. This form contains the names and other pertinent information for all other subcontractors (excluding MSD Form A M/WBE subcontractors) that the bidder plans to use in performance of the contract. The bidder is required to report on all levels of subcontractors during the entire performance of the contract into MSD’s Diversity Reporting System (MDR). d. Diversity Commercially Useful Function (CUF) Evaluation: In order for participation of MBE’s and WBE’s to count towards meeting goal requirements, the certified firm must perform a Commercially Useful Function on the contract. CUF reviews will be performed as a component of compliance throughout the term of the contract and during the final evaluation and contract close out process. CUF office and site visits may be conducted at any time during performance of the contract . All participants, at any level on the contract, are required to cooperate with MSD Diversity staff and other authorized representatives of MSD conducting the CUF reviews, including but not limited to the following: ▪ Site visits to verify M/WBE’s place of business, ownership, equipment, material purchases, audit of contract records, and to review additional documents associated with the contract being reviewed. MSD may conduct examination of third-party arrangements on the contract or conduct onsite interviews of employees without interruption to the work in progress and record such interactions into the MDR reporting system. MSD may routinely request documentation to verify CUF participation of MBE’s and WBE’s. Such documentation may include, but is not limited to, invoices, purchase orders, transportation verification, proof of payments to MBE’s, WBE’s and/or third parties, etc. when validating any level of goal participation to be credited. Refusal to participate or provide validation of any participation in a timely manner will result in an automatic reduction for participation that MSD is unable to verify. e. Trucking/Hauling Compliance - During construction, for purposes of validating compliance for the utilization of hauling, trucking, or any delivery of material supplies requiring any level of Non-Building Construction Page 17 of 24 rev 08/1/23 transportation services, Primes are will be required to submit monthly Trucking Reports when there is subcontracting performed by non-certified firms at any level being performed to validate participation amounts to be credited towards meeting any goal requirements. Failure to submit required monthly Trucking Reports in a timely manner is non-compliant with the contract and can subject the Prime contractor to sanctioned withholding of project payments including but not limited to 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. f. Prompt Payment: MSD is subject to compliance with Section 34.057 RSMo, Missouri’s Public Prompt Payment Act. As such, as work progresses, and in accordance with Section 34.057 RSMo, MSD remits payment due to Contractors within thirty calendar days. Contractors are also subject to the requirements of Section 34.057 RSMo. The Prime Contractor must pay its Subcontractors, service providers and suppliers within 15 calendar days of receipt of payment from MSD in accordance with the Prompt Payment Act. g. Diversity Monitoring and Reporting: The Diversity Division will monitor projects through the duration of the contract. An assigned Diversity representative will attend pre-construction and progress meetings, monitor work sites, review contract records, audit payments, verify workforce, etc. throughout the term of the project. i. Monthly Reporting: Throughout the contract, monthly online utilization and workforce reports are required to be submitted to MSD using the online MSD Diversity Reporting System (MDR). It is mandatory that the Prime Contractor utilize MSD ’s Diversity R eporting System (MDR) located at the following website link: www.msddiversityreporting.com. T he Prime Contractor will be notified of the reporting requirements at the start of the contract. MSD Diversity shall verify monthly that the Prime Contractor has reported on MBE, WBE and/or Non -M/WBE Subcontractor vendor involvement participation no later than the next month in which payment was made until the final i nvoice is submitted for p ayment to close out the project. On months where there is no Subcontractor activity, the Prime Contractor must submit a report indicating that no work was performed for that month or period. Failure to submit the monthly Subcontractor involvement or workforce reports in a timely manner may result in a finding of non -compliance and subject the Prime Contractor to immediate withholding of project payments as a sanction . Trends of non-compliance and/or consistent non-compliance can affect Contractor ’s pre -qualification status with MSD including Prime Contractor ’s ability to do future work with MSD up to and including complete prohibition from performing work on MSD projects for a time period to be decided solely by MSD. ii. Diversity Payment Audits and Payment Disputes: All payments to Subcontractors, service providers and suppliers are required to be submitted into MSD Diversity Reporting (MDR) Software System and are verified electronically by the payment recipient within five (5) days of submission of payment into the MDR System. The Prime Contractor must update MDR with payment information regarding amount and date of payments to all Subcontractors, service providers, and suppliers no later than one month (30 days) after payment is made. Failure to submit payment information constitutes non-compliance with the Diversity Program requirements. Upon request, invoices and canceled checks or other verifiable documented proof for the reported payment must be submitted into the MDR system. Late or non-payments to Subcontractors for valid billable work performed may be considered a material breach of Non-Building Construction Page 18 of 24 rev 08/1/23 contract and constitutes non-compliance with the Diversity Program requirements. Once non- compliance has occurred, subsequent payments can and will be withheld until the issue of non- compliance has been resolved. Payment disputes occur when a Contractor reports a dispute directly to MSD or when a Subcontractor disputes a reported payment made into MDR. When this occurs, an investigation is opened to resolve the dispute. For disputes made directly to MSD, the Contractor will be contacted directly and requested to submit a written response with appropriate documentation so that an investigation can be conducted to resolve the dispute. When a dispute occurs in MDR, the system will send an automated email to MSD Diversity Division to begin an investigation to resolve the dispute. iii. Change Orders: Goal obligations extend to all contract work covered by change orders for contracts which exceed $500,000. When contract work is added, the Prime contractor must utilize good faith efforts to secure M/WBE subcontractors to perform the additional contract work. When contract work is deleted, the Prime contractor must utilize good faith efforts to ensure that the goal percentages committed to in the contract are maintained despite the decrease in overall contract work. h. Subcontractor Substitutions and Replacement of M/WBE Subcontractors with Goal Participation: Replacement of subcontractors will only be allowed if written consent is obtained from MSD via contract change order or a written change directive issued on behalf of MSD by an authorized party. Proper written notification and documentation of the reason for the substitution must be provided to MSD from the Prime. Modifications to contracted M/WBE utilization on an MSD project will only be considered and approved by MSD for the following reasons: 1. The M/WBE Subcontractor is dilatory in complying with the requirements of the contracted services/work identified in the contract. 2. The M/WBE becomes bankrupt or insolvent, or circumstances otherwise arise related to the failure of the business resulting in an inability to meet the requirements of the contract. 3. The M/WBE fails to perform work in a way consistent with acceptable industry standards and practices, however sufficient justification of this must be provided. 4. MSD determines that the M/WBE is not a responsible Subcontractor or is no longer eligible to receive credit for participation as an M/WBE on the contract. 5. Work is eliminated which changes or affects the scope identified for an M/WBE by MSD via an Amendment to the contract or by a Work Order Change Directive on behalf of MSD. MSD requires that the Prime Contractor promptly report to MSD, in writing, any proposed changes in the utilization of M/WBE Subcontractor participation and include the appropriate written justification documentation, signed by both the Prime and Subcontractor affected. Prime Contractors cannot terminate participation for an M/WBE authorized to perform work on the contract without prior written consent from MSD. Written consent via Change Order or Change Order Directive is granted only if the Prime Contractor has demonstrated good cause to terminate the M/WBE’s participation. Good cause does not exist if the Prime Contractor: 1) seeks to terminate a M/WBE it relied upon to obtain the contract in order to self-perform work allocated to an M/WBE Subcontractor that was accepted by MSD to perform on the contract; or 2) to allow replacement of the M/WBE with another, preferred Contractor. Good cause does not exist if the failure or refusal of the M/WBE Subcontractor to perform its work resulted from actions on the part of the Prime Contractor exhibited towards the M/WBE. Non-Building Construction Page 19 of 24 rev 08/1/23 When a M/WBE is terminated or fails to complete its scope of work on the contract for any reason, MSD requires that the Prime initiate steps to provide a replacement of the participation for at least an equivalent amount of work and/or perform Good Faith Efforts to demonstrate intentions to find another equivalent M/WBE that is capable of performing at least the same amount of work on the contract that could not be performed by the intended M/WBE. i. Steps for Replacement of M/WBE Subcontractor: Below are the steps that must be performed when requesting to replace a Form A Subcontractor or any Subcontractor for which participation goal credit is being replaced: 1. Immediate written notification to the District indicating any changes to the Prime’s M/WBE subcontractor utilization. 2. Written justification documentation, signed off by the Prime contractor and the affected M/WBE subcontractor. 3. Completed “New Subcontractor Request Form M/WBE Involvement Reporting.” 4. Completed “MBE/WBE Subcontractor/Verification Form.” E. Post Award Workforce Goals, Compliance, Monitoring and Reporting: The Metropolitan St. Louis Sewer District (MSD) has established a Minority workforce goal of 37.00% and Women workforce goal of 11.00% on all Non-Building Construction contracts in the amount of $500,000 or more. Apprentice goals are applicable only when apprenticeship training occurs on an MSD Non-Building Construction contract. When training takes place, the established Apprenticeship combined Minority/Women goal is 46.00%. Minority categories for workforce include male or female African American, Asian American, Hispanic American, Pacific Islander, American Indian, or Alaskan Native. Minority Women are counted under Minority and Women. With regards to MSD’s Workforce Program, the legal basis and framework for setting construction goals and compliance is derived from the methodology set forth in Executive Order 11246 and the Code of Federal Regulations. The United States Department of Labor Office of Federal Contract Compliance Program (OFCCP) is responsible for the administration and enforcement of the Order. The practice of setting workforce goals, in conjunction with enforcement and review standards has been set forth by OFCCP in the Code of Federal Regulations (CFR). In 41 CFR 60-4.2 it states, “The Contractor’s compliance with the Executive Order and the regulations in 41 CFR part 60-4 shall be based on its implementation of the Equal Opportunity Clause, specific affirmative action obligations required by the specifications set forth in 41 CFR 60-4.3(a), and its efforts to meet the goals. The hours of minority and female employment and training must be substantially uniform throughout the length of the contract, and in each trade, and the contractor shall make a good faith effort to employ minorities and women evenly on each of its projects. The transfer of minority or female employees or trainees from Contractor to Contractor or from project to project for the sole purpose of meeting the Contractor’s goals shall be a violation of the contract, the Executive Order and the regulations in 41 CFR part 60-4. Compliance with the goals will be measured against the total work hours performed.” It is not the intent of MSD’s Workforce Program to compel any contractor to displace its existing workforce nor to move workers around to fulfill workforce goals. During performance of a construction Non-Building Construction Page 20 of 24 rev 08/1/23 project, a skilled worker may be hired by a contractor who was not on that contractor’s original roster of employees at the start of the project, but acquired through a source such as a labor union, job placement entity, or referred by another contractor so long as the contractor’s actions for workforce partici pation comply with the rules set forth for performing a commercially useful function. Therefore, the following guidance is being provided as clarification for how workforce participation can be counted to meet workforce goal participation under the requirements of serving a commercially useful function. For purposes of serving a commercially useful function applicable to workforce, in order to be considered an independent business, a contractor must demonstrate that it has its own workforce and is expected to prepare and finance its own payrolls. The contractor must exercise full control and direct supervision of its employees and must be responsible for producing certified payrolls for labor compliance requirements. For these reasons, contractors or subcontractors are not allowed to “share or exchange” employees on an MSD project: 1) for purposes of establishing a “commercially useful function” for an MBE/WBE if the MBE/WBE otherwise would not qualify as serving a commercially useful function on the project or 2) under any circumstances that would create a violation of the contract under the Executive Order, regulations in 41 CFR part 60-4, or 3) for purposes of meeting workforce goals. Therefore, all instances where an employee or worker is transferred to another contractor working on the same MSD project shall be evaluated by Diversity on a case-by-case basis to ensure the situation does not conflict or create non- compliance with a contractor serving a commercially useful function on the project. MSD Diversity staff with responsibilities for compliance/monitoring of projects with Workforce goal requirements are directed to investigate all instances of workforce participation involving the switching of workers on a MSD project between contractors (Prime and/or Subcontractors) to ensure that the situation does not conflict or create non-compliance with the Diversity Utilization and Workforce Program. All cases of non-compliance will be tracked, investigated, and resolved according to applicable procedures and guidelines. a. Primes will be required to comply with all applicable workforce requirements at the onset of the contract. All “boots on the ground” workforce activity is required to be reported regardless of the certification status of the contractor performing the work. Boots on the ground reporting are covered under the categories identified for labor trades which are covered by MSD’s Prevailing Wage Order issued with the solicitation and the most recently dated City of St. Louis Living Wage Ordinance. b. At least fifteen (15) days prior to mobilization the Prime 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 subcontractors 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. Contractor is required to use the appropriate “60 Day Workforce Plan Template” provided by MSD’s Diversity Department and located at the following website link: https://msdprojectclear.org/about/diversity/policies-forms/ ▪ The following fields of information are required to be included in the plan: • Project Name and Number • Worker Identification Information (Name) • Trade/Craft of each worker • Gender of each worker • Ethnicity of each worker Non-Building Construction Page 21 of 24 rev 08/1/23 • Employment St atus of each worker, i.e., New Hire, Union Hall Hire, etc. • Length of employment with the Prime contractor or subcontractor c. Upon receipt of Prime contractor’s 60 Day Project Workfor ce Plan by the District, Prime 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 additiona l information. This process will continue until an acceptable plan is on file. The Prime 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. d. In the event a project does not meet the workforce goal requirements at the onset of the project, the Prime c ontractor must also complete and provide a “P roject Workforce Plan” schedule (also found at the website link listed above) w hich identifies how the Prime plans to meet the workforce goal requirements. The plan will also identify “good faith effort” steps to be performed and undertaken by both the Prime and/or s ubcontractors to reach the workforce goal requirements by the end of the project. The Workforce Plan will be reviewed and approved and monitored by Diversity. Good faith effort submissions will be monitored for compliance with the plan. Failure to address GFE non-complian ce is listed below in “Post Award Compliance .” e. MSD has an active Community Benefits Agreement (CBA). During the life of the Community Benefits Agreement (“CBA”), MSD shall ensure that Workforce Development and /or Training Programs are material terms for all new MSD CIRP contracts exceeding $500,000; all amended or renewed CIRP projects exceeding $500,000, and all extensions of existing CIRP projects with workforce goals. Under these CIRP projects the requirements for use of the BUD Program shall commence as of the effective date of the contract. MSD shall actively monit or performance of BUD and shall enforce the requirements for use of the BUD Program with appropriate enforcement actions to address non-compliance. The BUD Program provides access to targeted minorities and women for MSD projects. Contractors shall receive prompt responses for available qualified and trained applicants when requested for participation on MSD p rojects. MSD requires contact with the BUD Program for all job vacancies on an MSD project for GFE: 1. Prime Contractors and their subcontractors; 2. 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. 3. BUD Contact Information: Missouri Works Initiative: (573) 536-2237 or Aurora Bihler aurora.bihler@moaflcio.org. Nothing contained in the CBA or MSD W o r k f o r c e guidelines shall require contractors who are subject to collective bargaining agreements with union affiliates to comply with utilization of MSD Programs which violates any component of bargaining agreement terms. Conflicts regarding the use of these programs with collective bargaining agreements must be provided to MSD along with good faith effort documentation. Non-Building Construction Page 22 of 24 rev 08/1/23 F. Post Award Compliance i. Post Award GFE’s are performed to demonstrate the Prime Contractor’s efforts that are taken to meet or exceed their contractual goals and/or M/WBE commitments. At any time during performance of the contract when a Prime Contractor is notified of its failure to comply with the requirements of the Diversity Program, the Prime firm must furnish to the District, in writing, the reasons for non-compliance. With a notice of non-compliance, in addition to the written statement, a corrective action plan must be provided within five (5) business days. The plan must identify to MSD the steps to be taken to resolve the non-compliance and when the plan will be initiated as a means to cure the non-compliance. Thereafter, the Prime Contractor will be required to document all evidence of GFE’s taken to comply with the corrective action plan and submit the documentation on at least a monthly basis until the non- compliance is resolved. All GFE documentation submissions will undergo evaluation for acceptance by the Diversity Division. The Prime Contractor will be notified of acceptance. If, in the sole judgment of the District, there have not been sufficient Good Faith Efforts taken on the part of the Prime Contractor to meet the contractual obligations or if the Prime Contractor fails to provide a corrective action plan in a timely manner and/or fails to initiate the corrective action in a timely manner, MSD in its sole judgement may institute appropriate actions for dealing with non -compliance and subject the Prime Contractor to immediate withholding of project payments . Failure to address GFE non -compliance could affect a Prime ’s pre-qualification status with MSD including the ability to do future work with MSD up to and including complete prohibition from performing work on MSD projects for a time period to be decided solely by MSD. ii. Post Award Non-Compliance: The following are examples, but not limited to, non-compliance events which may lead to sanctions: (a) Failure to perform compliance reporting activities for subcontractor and/or workforce utilization. (b) Failure to respond or provide requested information or documentation to MSD Diversity in a timely manner (5 business days). (c) Failure to resolve issues in a timely manner involving M/WBEs participating on the contract. (d) Failure to perform post award GFE when required by the contract. (e) Submission of false or fraudulent documentation or information. The submission of fraudulent information to MSD is considered to be a material breach of contract and strictly prohibited. Sanctions for non-compliance with the Diversity Program requirements are assessed based upon the shortfall of the M/WBE’s participation up to a maximum amount equal to the monetary value or percentage of the participation set by the contractual requirements. The shortfall amount equal to the calculated amounts will be withheld from the final amount owed to the Prime to cover the identified shortfall. An M/WBE who participates in fraudulent activities resulting in shortfalls will not be due any funds resulting from the material breach of contract and may be sanctioned on doing future work with MSD up to and including a complete prohibition from performing work on MSD projects for a time period to be determined solely by MSD. Any funds resulting from or relating to non-compliance and/or fraudulent activities shall be set aside in a separate account within the Business Enterprise Budgeting System to be used by the Business Non-Building Construction Page 23 of 24 rev 08/1/23 Diversity Program for the purpose of providing business development, workforce development and enhanced services that assist with the economic empowerment of MBE’s and WBE’s. iii. Final Diversity Evaluation Review MSD Business Diversity Programs ensures that all contracts containing M/WBE goal participation or commitments of race-neutral participation are monitored to confirm that program participants are conforming to the requirements as set forth in the contract. It is the responsibility of MSD Diversity to: 1) validate that the work committed to M/WBE’s is performed by the intended M/WBE; 2) conduct and document monitoring activities to ensure adherence to Diversity Program requirements; 3) produce and provide written certifications of all monitoring activities to validate all efforts taken; and 4) provide full transparency of all Diversity Program activities. The following steps are taken for compliance with Diversity’s final review for approval of the final payment to a Prime: 1) On a monthly basis, approval of Prime contractor’s monthly payment application is based on the contractor’s compliance with submission of their monthly utilization reports until Diversity has conducted a final evaluation of Diversity contract compliance. Contractors who are delinquent with submission of any utilization reports will not receive payment until they have met all reporting requirements. 2) Upon submission of a final payment request, MSD’s Diversity Division will conduct a final evaluation of both vendor and workforce (if applicable) goal attainment on all contracts with vendor goals and commitments and/or workf orce goals prior to release of the contractor’s final contract payment. A contractor is considered to be in compliance with MSD’s Diversity Program guidelines upon successful utilization of the M/WBE subcontractors proposed on Prime contractor’s originally submitted MSD Form A and satisfaction of a p p l i c a b l e workforce utilization goal requirements . Any deviation from Prime contractor’s originally approved M /W BE’s, requires contractor to have an approved change order with appropriate j u s t i f i c a t i o n d o c u m e n t a t i o n . Final contract payments will not be approved without all of the required d ocumentation. 3) For construction contracts exceeding $500,000, to be in compliance with meeting workforce requirements, an Initial 60 Day Workforce Plan and Project Plan (if required) must be on file, all required monthly Workforce Utilization Reports for Prime and all Subcontractors must be on file, all required certified payrolls for Prime and all Subcontractors for all hours worked must be on file, and any additional required workforce compliance documentation such as G ood F aith E ffort documents must be on file if any portions of workforce goals were not met on the project. Failure to meet the workforce compliance requirements c an 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 4) To close out any project with Diversity Program requirements, the final review of the contract must be performed by the Diversity Division to determine if the Prime Contractor has complied with Diversity Program requirements. If the Prime Contractor does not achieve the full amount of participation required per the contract and was not able to provide sufficient post -award Good Faith Efforts documentation justifying its shortfall, the amount of any shortfall may be deducted from the remaining contract balance owed on the final invoice in an amount equal to the value of the goal that was not attained. To substantiate the final evaluation review, the record of Diversity’s evaluation will Non-Building Construction Page 24 of 24 rev 08/1/23 become part of the contract record to certify that the Prime Contractor was either compliant or non- compliant with the terms of the contract with MSD. iv. Annual Pre-Qualification Diversity Evaluation Review MSD Business Diversity participates with Engineering to evaluate each pre-qualified contractor requesting to continue as an approved pre -qualified contractor. Diversity evaluates each pre-qualified contractor on their performance and compliance with the Diversity Program with regards to meeting their vendor and workforce goals as well as their compliance with all other Diversity Program requirements. Failure t o meet vendor and workforce compliance requirements or remain in compliance with the Diversity Program can subject the contractor to sanctions on doing future work with MSD up to and including a complete prohibition from performing work on any District project for a time period to be decided solely by MSD.