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Compliance Review Report of the New York Metropolitan COMPLIANCE REVIEW REPORT OF THE New York Metropolitan Transportation Authority (MTA) New York, NY DISADVANTAGED BUSINESS ENTERPRISE PROGRAM Final Report June 2011 Prepared for the Federal Transit Administration Office of Civil Rights by Milligan & Company, LLC 105 N. 22nd Street, 2nd Floor Philadelphia, PA 19103 Table of Contents Section 1 – General Information ......................................................................................2 Section 2 – Jurisdiction and Authorities ..........................................................................3 Section 3 – Purpose and Objectives ..................................................................................4 Section 4 – Background Information ...............................................................................6 Section 5 – Scope and Methodology ………………………………………..…………8 Section 6 – Issues and Recommendations ......................................................................10 1. DBE Program Plan .................................................................................................... 10 2. DBE Policy Statement ............................................................................................... 10 3. DBE Liaison Officer ................................................................................................. 11 4. Financial Institutions ................................................................................................. 12 5. DBE Directory ........................................................................................................... 12 6. Overconcentration ..................................................................................................... 13 7. Business Development Programs .............................................................................. 13 8. Determining/ Meeting Goals ..................................................................................... 14 9. Required Contract Provisions .................................................................................... 26 10. Certification Standards .............................................................................................. 30 11. Certification Procedures ............................................................................................ 31 12. Record Keeping and Enforcements ........................................................................... 33 13. January 2011 DBE Program Rulemaking…………………………………………..30 Section 7 – Summary of Findings ...................................................................................40 Section 8 - List of Attendees ............................................................................................43 SECTION 1 - GENERAL INFORMATION Grant Recipient: Metropolitan Transportation Authority 347 Madison Avenue City/State: New York, NY 10017-3739 Grantee Number: 1786 Executive Official: Jay H. Walder Chairman and CEO On Site Liaison: Michael Garner Chief Diversity Officer 646-252-1385 Report Prepared by: MILLIGAN AND CO., LLC 105 N. 22nd Street, 2nd Floor Philadelphia, PA 19103 (215) 496-9100 Site visit Dates: October 25 - 28, 2010 Compliance Review Team Members: Denise Bailey, Lead Reviewer Habibatu Atta Jim Buckley Benjamin Sumpter, III 2 SECTION 2 - JURISDICTION AND AUTHORITIES The Federal Transit Administration (FTA) Office of Civil Rights is authorized by the Secretary of Transportation to conduct civil rights compliance reviews. The reviews are undertaken to ensure compliance of applicants, recipients, and subrecipients with Section 12 of the Master Agreement, Federal Transit Administration M.A., (17), October 1, 2010 and 49 CFR Part 26, ―Participation by Disadvantaged Business Enterprises in Department of Transportation (DOT) Programs.‖ New York’s Metropolitan Transportation Authority (MTA) is a recipient of FTA funding assistance and is therefore subject to the Disadvantaged Business Enterprise (DBE) compliance conditions associated with the use of these funds pursuant to 49 CFR Part 26. These regulations define the components that must be addressed and incorporated in MTA's DBE program and were the basis for the selection of compliance elements that were reviewed. 3 SECTION 3 – PURPOSE AND OBJECTIVES PURPOSE The FTA Office of Civil Rights periodically conducts discretionary reviews of grant recipients and subrecipients to determine whether they are honoring their commitment, as represented by certification to FTA, to comply with their responsibilities under 49 CFR Part 26. In keeping with its regulations and guidelines, FTA has determined that a compliance review of New York’s Metropolitan Transportation Authority’s (MTA) Disadvantaged Business Enterprise (DBE) program is necessary. The primary purpose of the compliance review is to determine the extent to which the MTA has implemented 49 CFR Part 26, as represented to FTA in its DBE Program Plan. This compliance review is intended to be a fact-finding process to: (1) examine MTA’s Disadvantaged Business Enterprise Program Plan and its implementation, (2) make recommendations regarding corrective actions deemed necessary and appropriate, and (3) provide technical assistance. This compliance review is not to directly investigate whether there has been discrimination against disadvantaged businesses by the grant recipient or its subrecipients, nor to adjudicate these issues in behalf of any party. OBJECTIVES The objectives of DOT’s DBE regulations, as specified in 49 CFR Part 26, are to: ensure nondiscrimination in the award and the administration of DOT-assisted contracts in the Department’s financial assistance programs; create a level playing field on which DBEs can compete fairly for DOT-assisted contracts; ensure that the Department’s DBE program is narrowly tailored in accordance with applicable law; ensure that only firms that fully meet this part’s eligibility standards are permitted to participate as DBEs; help remove barriers to the participation of DBEs in DOT-assisted contracts; assist the development of firms that can compete successfully in the marketplace outside the DBE program; and provide appropriate flexibility to recipients of Federal financial assistance in establishing and providing opportunities for DBEs. 4 The objectives of this compliance review are to: determine whether MTA is honoring its commitment represented by its certification to FTA that it is complying with its responsibilities under 49 CFR Part 26, ―Participation by Disadvantaged Business Enterprises in DOT Programs‖; examine the required components of MTA’s DBE Program Plan against the compliance standards set forth in the regulations and to document the compliance status of each component; and gather information and data regarding the operation of MTA’s DBE Program Plan from a variety of sources – DBE program managers, other MTA management personnel, DBEs, and prime contractors. 5 SECTION 4 – BACKGROUND INFORMATION MTA is a public benefit corporation established by the State of New York in 1968 to develop and implement a unified public transportation policy in the New York City metropolitan area. MTA acts as an umbrella organization for seven constituent agencies—Long Island Rail Road (LIRR), Metro North Railroad (MNR), New York City Transit (NYCT), MTA Bus Company, Long Island Bus, Bridge and Tunnels, and Capital Construction Company (MTACC). During this review, documents for MTA HQ, LIRR, MNR, MTACC, and NYCT were reviewed and representatives of these agencies were interviewed or otherwise involved. MTA and its operating agencies are authorized to operate transit service in Suffolk, Nassau, Queens, Kings, Richmond (Staten Island), New York (Manhattan), the Bronx, Westchester, Putnam, Dutchess, Rockland and Orange counties in the State of New York. In addition, service extends into Fairfield and New Haven counties in the State of Connecticut. MTA and its operating agencies have over 70,000 total employees. More than 2.6 billion riders utilize the bus and rail service each year. Overall, approximately 14.6 million riders are served over 5,000 square miles, making the MTA the largest public transportation provider in the Western Hemisphere. The operation of the MTA is overseen by a 17-member Board of Directors. Members are nominated by the Governor, with four recommended by New York City's mayor and one each by the county executives of Nassau, Suffolk, Westchester, Dutchess, Orange, Rockland, and Putnam counties. (Members representing the last four cast one collective vote.) All Board members are confirmed by the New York State Senate. The chairman and the board members serve in the same capacity for LIRR and MNR. Corporate presidents, who also serve as chief operating officers, oversee day-to-day operations. LIRR LIRR, the largest commuter railroad in the nation, serves roughly 83 million passengers per year with over 303,000 passengers utilizing the service each weekday. It provides service from three New York City terminals through Jamaica Station, which is the major transfer point, to the eastern tip of Long Island. The outlying branches include Babylon, Far Rockaway, West Hempstead, Long Beach, Hempstead, Oyster Bay, Port Jefferson, Montauk, Ronkonkoma, Greenport and Port Washington. The Port Washington Line does not go through Jamaica Station. LIRR serves 124 stations and has a fleet of 1,177 rail cars. MNR MNR is the second largest commuter railroad in the country, operating five lines in the New York metropolitan area over 384 directional route miles. Three main lines
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