PURPOSE: This rule describes how DBE firm participation credit will be awarded by MoDOT toward a USDOT-assisted contract DBE participation goal.

1. (1) Disadvantaged Business Enterprise (DBE) Participation Computed. DBE participation will be credited by Missouri Department of Transportation (MoDOT) only in compliance with 49 CFR section 26.55, and only for the value of the work actually performed by the DBE firm toward the DBE contract goal. The contract work performed by the DBE firm must provide a “commercially useful function” as specified in 49 CFR section 26.55(c), in order to receive DBE credit toward a contract goal. 7 CSR 10-8

2. (2) DBE Participation by Classification. DBE firm contract credit varies, based upon the MoDOT classification of that DBE firm, and based upon the nature of the services the DBE firm actually performs on the United States Department of Transportation (USDOT)-assisted contract, as provided in 49 CFR section 26.55. DBE credit will be counted by MoDOT as directed by USDOT, its regulations in 49 CFR part 26, and USDOT’s informal guidance; and will generally be counted in the following manner:

   1. (A) Manufacturer. DBE credit is given for the entire value paid to a DBE manufacturer for materials furnished which become a permanent part of the project work. A manufacturer is a firm that owns and operates the facilities to produce the product required by the project and purchased by the contractor or subcontractor;
   2. (B) Supplier. DBE credit is given for sixty percent (60%) of the value paid to a DBE supplier firm for materials which it furnishes and which become a permanent part of the project work. A supplier sells goods to the general public and maintains an inventory at an owned or leased warehouse or store. Bulk items such as steel, petroleum products, or rock do not have to be maintained in an onsite inventory, provided that the supplier regularly sells such products. Credit will not be given for the cost of the materials and also for the hauling of those same materials. Transportation costs for the materials are deemed part of the total cost of the products supplied;
   3. (C) Broker. DBE credit is given for the entire amount of the broker fees or commission received by the DBE broker for materials it purchases, services it obtains, or equipment it procures and resells to a MoDOT contractor. However, no DBE credit is provided for the actual material costs, service charges, or equipment costs to the contractor. Fees or commissions are defined as the difference between what the DBE firm paid for the materials, services or equipment it brokered, and the price paid by the contractor to the DBE firm for those materials, services or equipment. A broker does not manufacture or act as a supplier of the materials, services or equipment, on a regular basis; or meet the criteria for being a manufacturer or supplier;
   4. (D) Trucker. DBE credit is given for the entire amount of transportation or hauling charges paid to a DBE trucker, if the majority of the project trucking or hauling is performed by that DBE trucker firm, with employees of that DBE trucker, using vehicles and equipment owned or leased on a long-term basis by the DBE trucker firm. Trucking services provided in vehicles or equipment leased for just that project, or for a shorter period than the project trucking work, receive no DBE trucking credit. Further, to be a DBE trucking firm and receive DBE trucking credit, at least one truck actually owned by the DBE trucking firm must be used on that project work to haul project materials or supplies. Full DBE trucking credit will not be given for leased trucks unless they are leased from another DBE firm, DBE owner operators, or a recognized commercial leasing operation, and the lease is of a sufficient term. Firms licensed by the Missouri Public Service Commission as leasing agents qualify as a recognized leasing operation. The leasing of trucks from the prime contractor will not be credited toward meeting a DBE goal, except as a broker, to the extent of the fees and commissions involved (but not the trucking costs). This type of relationship must be approved in advance by MoDOT External Civil Rights Unit personnel, and will be subject to strict scrutiny;
   5. (E) DBE Contractor. Credit is given for the entire amount paid to a DBE prime contractor for labor and materials provided to perform the contract work; except that no credit will be given for labor and materials provided and installed by other contractors or subcontractors which are not DBE firms, approved by MoDOT to perform DBE subcontract work on that contract. Any DBE prime contractor must perform at least thirty percent (30%) of the contract work with the DBE firm’s own employees; and the DBE firm must order and pay for all its own supplies and materials, to receive this credit;
   6. (F) DBE Subcontractor. Credit is given for the entire amount paid to a MoDOT-approved DBE subcontractor on a contract, for all the labor and materials provided and installed by the DBE firm to perform a defined and clearly measurable portion of the contract work. Any DBE firm must perform at least thirty percent (30%) of the firm’s subcontract work with the DBE firm’s own employees, using the DBE firm’s own (owned or leased) vehicles, and the DBE firm must order and pay for all of the supplies and materials which it installs and provides.
3. (3) Supporting Documentation Required. By bidding on a USDOT-assisted contract, or by agreeing to provide manufacturing, broker, subcontractor or supplier services for such work, each contractor, their subcontractors, and all DBE manufacturers, brokers, subcontractors and suppliers, agree to provide MoDOT or USDOT and their agents or representatives with full and complete copies of all documentation of ownership, leasing, payrolls, payments, charges, rebates, kickbacks, invoices, and all manner of related documentation, so that MoDOT and USDOT know and understand accurately and completely how much was paid and received, in gross and net amounts, for DBE contract credit computation purposes. This documentation is also subject to later audit by MoDOT, USDOT, or their agents and representatives. The failure to accurately and completely represent the gross and net payments, and to provide all documentation required to show the full and complete transactions involved, may be fraudulent, and may subject all firms and persons involved to civil suit and sanction, criminal punishment including fines or imprisonment, and other contract or administrative sanctions, by MoDOT, USDOT, or other agencies of the state of Missouri or the United States.

AUTHORITY: section 226.150, RSMo 1994*; Title 49 Code of Federal Regulations part 26; section 1101(b) of the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178, 112 Stat. 107, 113; and MoDOT’s approved DBE Program submittals to the U.S. Department of Transportation. Emergency rule filed May 10, 2000, effective May 20, 2000, expired Nov. 6, 2000. Original rule filed May 10, 2000, effective Nov. 30, 2000. *Original authority: 226.150, RSMo 1939, amended 1997.