Alaska Department of T Ransportation & Public Facilities

Alaska Department of Department Alaska Transportation & Public Facilities

Optimizing Implementation of Civil Rights Requirements for Vessel Construction

Prepared By: Authors: Edward W. Morris, Jr. Tanya Taylor-Morris

October 2011

Prepared For:

Alaska Department of Transportation & Public Facilities Research, Development, and Technology Transfer 2301 Peger Road

Fairbanks, AK 99709-5399

FHWA-AK-RD-11-05

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4. TITLE AND SUBTITLE 5. FUNDING NUMBERS Optimizing Implementation of Civil Rights Requirements for Vessel AKSAS #62905/T2-06-08 Federal # HPR-4000(55) Construction

6. AUTHOR(S)

Edward W. Morris, Jr. Tanya Taylor-Morris

7. PERFORMING ORGANIZATION NAME(S) AND ADDRESS(ES) 8. PERFORMING ORGANIZATION REPORT E.W. Morris & Associates NUMBER 1951 Woodshade Ct FHWA-AK-RD-11-05 Bowie, MD 20721 9. SPONSORING/MONITORING AGENCY NAME(S) AND ADDRESS(ES) 10. SPONSORING/MONITORING AGENCY Alaska Department of Transportation and Public Facilities REPORT NUMBER Research, Development &Technology Transfer 2301 Peger Rd FHWA-AK-RD-11-05 Fairbanks, AK 99709-5399 11. SUPPLEMENTARY NOTES

12a. DISTRIBUTION / AVAILABILITY STATEMENT 12b. DISTRIBUTION CODE

No restrictions.

13. ABSTRACT (Maximum 200 words)

Research addressed problems inherent in receiving funds from two Federal agencies with overarching nondiscrimination, Equal Employment Opportunity, and Disadvantaged Business Enterprise requirements but different, agency-specific statutory authorities for Civil Rights programs. Some specifications implementing the same statutes are dissimilar. Guidance is either obsolete or inconsistent. Ferry construction was not addressed in regulations and guidance was developed before ferry funds were authorized. Bid and contract documents must include Civil Rights provisions. Between 1999 and 2010, 23 bidders on 27 Alaska ferry contracts had facilities in 14 cities in six states, including Alaska; each with different employment and DBE goals. Some bidders hold Federal contracts with the same objectives but different requirements and Davis-Bacon wage rates may not have been set for shipbuilding. FTA allows recipients to use State requirements and adjust specifications to address needs. FHWA requires that provisions be physically included in bid and contract documents and subcontracts, prohibiting inclusion by reference. The effort’s objectives were to identify and articulate problems, analyze relevant information, and develop a simpler, more effective framework for Civil Rights specifications for approval by funding agencies as a pilot. Lessons learned implementing the pilot might be helpful in revising current regulations and guidance.

15. NUMBER OF PAGES 14. KEYWORDS : Marine transit (Aetw), Contract administration (Cu), Laws and legislation (Cre), Administrative 121 procedures (Crm) 16. PRICE CODE

N/A 17. SECURITY CLASSIFICATION OF 18. SECURITY CLASSIFICATION 19. SECURITY CLASSIFICATION 20. LIMITATION OF ABSTRACT REPORT OF THIS PAGE OF ABSTRACT

Unclassified Unclassified Unclassified N/A

NSN 7540-01-280-5500 STANDARD FORM 298 (Rev. 2-98) Prescribed by ANSI Std. 239-18 298-1

SI* (MODERN METRIC) CONVERSION FACTORS APPROXIMATE CONVERSIONS TO SI UNITS Symbol When You Know Multiply By To Find Symbol LENGTH in inches 25.4 millimeters mm ft feet 0.305 meters m yd yards 0.914 meters m mi miles 1.61 kilometers km AREA in2 square inches 645.2 square millimeters mm2 ft2 square feet 0.093 square meters m2 yd2 square yard 0.836 square meters m2 ac acres 0.405 hectares ha mi2 square miles 2.59 square kilometers km2 VOLUME fl oz fluid ounces 29.57 milliliters mL gal gallons 3.785 liters L ft3 cubic feet 0.028 cubic meters m3 yd3 cubic yards 0.765 cubic meters m3 NOTE: volumes greater than 1000 L shall be shown in m3 MASS oz ounces 28.35 grams g lb pounds 0.454 kilograms kg T short tons (2000 lb) 0.907 megagrams (or "metric ton") Mg (or "t") TEMPERATURE (exact degrees) oF Fahrenheit 5 (F-32)/9 Celsius oC or (F-32)/1.8 ILLUMINATION fc foot-candles 10.76 lux lx fl foot-Lamberts 3.426 candela/m2 cd/m2 FORCE and PRESSURE or STRESS lbf poundforce 4.45 newtons N lbf/in2 poundforce per square inch 6.89 kilopascals kPa APPROXIMATE CONVERSIONS FROM SI UNITS Symbol When You Know Multiply By To Find Symbol LENGTH mm millimeters 0.039 inches in m meters 3.28 feet ft m meters 1.09 yards yd km kilometers 0.621 miles mi AREA mm2 square millimeters 0.0016 square inches in2 m2 square meters 10.764 square feet ft2 m2 square meters 1.195 square yards yd2 ha hectares 2.47 acres ac km2 square kilometers 0.386 square miles mi2 VOLUME mL milliliters 0.034 fluid ounces fl oz L liters 0.264 gallons gal m3 cubic meters 35.314 cubic feet ft3 m3 cubic meters 1.307 cubic yards yd3 MASS g grams 0.035 ounces oz kg kilograms 2.202 pounds lb Mg (or "t") megagrams (or "metric ton") 1.103 short tons (2000 lb) T TEMPERATURE (exact degrees) oC Celsius 1.8C+32 Fahrenheit oF ILLUMINATION lx lux 0.0929 foot-candles fc cd/m2 candela/m2 0.2919 foot-Lamberts fl FORCE and PRESSURE or STRESS N newtons 0.225 poundforce lbf kPa kilopascals 0.145 poundforce per square inch lbf/in2

*SI is the symbol for the International System of Units. Appropriate rounding should be made to comply with Section 4 of ASTM E380. (Revised March 2003)

Table of Contents Table of Contents ...... ii List of Figures ...... iv List of Tables ...... v Acknowledgements ...... vi Abstract ...... vii Summary of Findings ...... 1 CHAPTER 1. – INTRODUCTION AND RESEARCH APPROACH ...... 4 1.1. PROBLEM STATEMENT ...... 4 1.2. RESEARCH OBJECTIVES ...... 5 1.3. INFORMATION SOURCES ...... 6 1.4. SCOPE of STUDY...... 6 1.4.1. THE INITIAL PROBLEMS ...... 8 CHAPTER 2. – FINDINGS ...... 11 2.1. THE ALASKA MARINE HIGHWAY SYSTEM ...... 11 2.2. SHIPYARDS ...... 11 2.3. SHIPYARD EMPLOYMENT ...... 12 2.4. DEMOGRAPHIC AND OTHER CONSIDERATIONS ...... 12 2.5. FERRY FACILITIES CONSTRUCTION ...... 14 2.6. THE U.S. FERRY INDUSTRY ...... 14 2.7. CIVIL RIGHTS REQUIREMENTS ...... 17 2.7.1. NONDISCRIMINATION ...... 17 2.7.2. EQUAL OPPORTUNITY...... 19 2.7.2.a. APPRENTICESHIP AND TRAINING ...... 20 2.7.2.b. DISADVANTAGED BUSINESS ENTERPRISES ...... 21 2.7.3. EQUAL EMPLOYMENT OPPORTUNITY ...... 22 2.8. AFFIRMATIVE ACTION ...... 24 2.9. FEDERAL INVESTIGATIVE AND OVERSIGHT AGENCIES ...... 24 2.9.1. OFFICE OF MANAGEMENT AND BUDGET ...... 25 2.9.2. THE CIVIL RIGHTS DIVISION (DOJ) ...... 25 2.9.3 THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION ...... 25 2.9.4. THE UNITED STATES DEPARTMENT OF LABOR (USDOL) ...... 26 2.9.4.a. OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS ...... 26 2.9.4.b. THE WAGE AND HOUR DIVISION ...... 28 2.9.4.c. THE BUREAU OF APPRENTICESHIP AND TRAINING ...... 28 2.9.5. THE U.S. COMMISSION ON CIVIL RIGHTS ...... 28 2.10. AKDOT&PF’S FERRY PROJECTS 2002-2009 ...... 28 2.11. SUBCONTRACTS AWARDED TO DBEs 2002-2009 ...... 32

2.12. REVIEW OF AKDOT&PF’S DBE DIRECTORY ...... 34 2.13. SIMILARLY SITUATED STATES ...... 35 2.14. RELATED PROBLEMS ...... 37 CHAPTER 3 – INTERPRETATION, APPRAISAL, AND APPLICATIONS ...... 41 CHAPTER 4 – CONCLUSIONS AND SUGGESTED RESEARCH ...... 44 4.1. CONCLUSIONS ...... 44 4.2. SUGGESTED RESEARCH ...... 50 REFERENCES ...... 55 FIGURES ...... 76 APPENDICES ...... 82

iii

List of Figures

Figure 1 – Comparison of FTA and FHWA Required Contract Provisions ...... 76

Figure 2 – Annual US Birth Rates 1909-2004 ...... 77

Figure 3 – Locations of Facilities of Winning Contractors on AKDOT&PF’s Ferry and Ferry Facilities Contracts 2002-2009 ...... 78

Figure 4 – Locations of Facilities of Bidders on AKDOT&PF’s Ferry and Ferry Facilities Contracts 2002-2009 ...... 79

Figure 5 – Locations of Facilities of Bidders on AKDOT&PF’s Ferry and Ferry Facilities Contracts 2010-2011 ...... 80

Figure 6 – Alaska’s Surface Area Compared with that of the “Lower 48” ...... 81

List of Tables

Table 1 - Ferry Funds Allocated to Alaska by FHWA ...... 16

Table 2 - Nondiscrimination Program Authorities ...... 18

Table 3 – Equal Opportunity Program Authorities ...... 20

Table 4 - Equal Employment Opportunity Program Authorities ...... 23

Table 5 – Locations of Bidders’ Facilities on AKDOT&PF’s ’02 - ’09 Projects ...... 29

Table 6 - Summary of AKDOT&PF’s Ferry Contracting and Subcontracting Activity 2002-2009 ...... 30

Table 7 – Prime Contractors on AKDOT&PF’s Ferry and Related Contracts ’02-‘09 ...... 31

Table 8 – DBEs Awarded Subcontracts on AKDOT&PFs Ferry and Ferry Facilities Construction and Repair Contracts 2/14/02-9/16/09 ...... 33

Acknowledgements

The research reported herein was performed under Agreement No. RES-08-006, AKSAS PROJECT NO: 62905, and Federal Project No: HPR-40009550, by E.W. Morris & Associates. Edward W. Morris, Jr., was the principal investigator, assisted by Tanya Taylor-Morris, Research Analyst.

Abstract

Bid and contract documents must include Civil Rights provisions. Between 1999 and 2010, 23 bidders on 27 Alaska ferry contracts had facilities in 14 cities in six states, including Alaska; each with different employment and DBE goals. Some bidders hold Federal contracts with the same objectives but different requirements and Davis-Bacon wage rates may not have been set for shipbuilding.

FTA allows recipients to use State requirements and adjust specifications to address needs. FHWA requires that provisions be physically included in bid and contract documents and subcontracts, prohibiting inclusion by reference.

The effort’s objectives were to identify and articulate problems, analyze relevant information, and develop a simpler, more effective framework for Civil Rights specifications for approval by funding agencies as a pilot. Lessons learned implementing the pilot might be helpful in revising current regulations and guidance.

vii

Summary of Findings

Information was collected, arrayed, analyzed, and interpreted to determine whether sufficient support exists in current legislation, Executive Orders, or regulations and agency guidance to allow AKDOT&PF to institute pilot approaches to inform bidders and contractors of their Civil Rights responsibilities. Overwhelming support was found in the form of Paperwork Reduction legislation and a series of Executive Orders requiring coordination, burden reduction, and reliance on effective processes of recipients.

Articulating, refining, and exploring the initially outlined problems resulted in more and different issues making themselves manifest at each turn. Two agencies with several of the same and some different authorities required different approaches. That predicament was able to be handled when only one funding agency was involved in a project or when one agency transferred funds to the other to administer, usually FHWA allowing FTA requirements to apply on funds transferred to FTA. But, when both agencies’ funds were involved in a single project, things tended to be more “interesting.” That bidders from other states with facilities in places far and wide were interested in bidding on the projects increased the complexity because bidders and contractors are required to be informed of all applicable provisions in the bid and contract documents. Crafting a set of documents containing all possible permutations of DBE, EEO and OJT goals and D-B wage rates was a little more than daunting. Some states had modified EEO requirements of FTA and others had included both FHWA required Provisions, FTA prohibitions, and requirements and those of EO 11246 in bid and contract documents. That contractors have not complained, sought clarification of what was applicable, or offered opinions on how the confusion could be addressed gives away the more likely possibility that the provisions are routinely ignored, except the bare minimum requirements: required reports.

The originally defined problems persist and others related to the original set have been identified. All but one of them appears to be susceptible to resolution. It is usually accepted that innovation always occurs at the cutting edge. With that in mind, having identified some problems and possible remedies, it would seem prudent for Alaska to be allowed to pursue one or more alternatives on a pilot basis and assess and report on the effectiveness of the measures attempted. These efforts could be allowed either before or while needed regulatory revisions are underway, with the end results or ongoing lessons-learned used by policy makers to refine regulatory approaches being considered.

The vocabulary surrounding Civil Rights, generally, and Affirmative Action, specifically, is large, rich, and expanding. To be applied as intended, applicable terminology and concepts need to be known, understood, and appreciated. Otherwise, it is likely that filling out and filing of required reports will be interpreted by regulators and those governed as “compliance.”

The charges to Federal and State compliance personnel are simple: to communicate legislative and executive requirements and expectations; to determine whether contractors are complying; where non-compliance is found, to take action sufficient to effect compliance; and, to cooperate with OFCCP in its efforts to obtain compliance by not awarding contracts to debarred firms and providing information requested.

The responsibilities of contractors and subcontractors are, similarly, simple: to not discriminate in programs, activities, or employment based on prohibited factors; and, when and where underrepresentation is found to exist and opportunities are present, to apply effective Affirmative Action to address the situation(s) without trammeling upon the rights of innocent other parties.

After almost a century of silence, several congresses passed far-reaching Civil Rights Legislation and a series of presidents issued a series of Executive Orders, which begat a flood of regulations and interpretive guidance. Some “omnibus” regulations were issued by several agencies. Other agency-specific regulations were crafted in tight silos to implement Civil Rights requirements. Tight deadlines and suits were bad companions and resulted in regulations that, in retrospect, were incomplete and uncoordinated, but which reflected the level of awareness of drafters in the early 1970s. As Federal agencies and states began to staff-up their Civil Rights units, the learning curves were steep, resources were limited, and - seemingly at every turn – the reaches of applicable statutes were being refined by new legislation or judicial interpretations, which often increased the complexity of in-place schemes. As legislative and executive prohibitions and imperatives grew, budgets were tightened, staffs were reduced, and membership in “protected classes” increased exponentially. The recipe for a thoroughly crippled regulatory framework has existed for the last four decades. The work of one recent Congress to so tightly regulate regulators that they lose their will to regulate had unintended consequences. Regulators are so encumbered by routine workloads and congressionally imposed impediments that issuing, modifying, or eliminating burdensome regulations drops low on their lists of priorities. The relief needed is within reach, but, under current conditions, will require a heightened sense of urgency and focused efforts to achieve.

It should be the responsibility of regulators to distill the murky soup of parallel and intersecting guidance into coherent, coordinated, and easily understood and implemented sets of provisions likely to be read and actually applied. This exercise clearly demonstrated that we are not there yet.

Weaknesses in the regulatory processes notwithstanding, the research identified several areas in which real progress can be made while ensuring that rights are protected and opportunities developed by employers on whom Federal regulators and State administrators rely to do the actual work of building or rebuilding the transportation infrastructure of the Nation. 2

The original intent of some regulatory prescriptions was to ensure that the knowledge and willfulness of bidders and contractors could be clearly proven by their entering contracts which contained “required provisions.” Technological advancements and the acceptance of electronic signatures make many such anachronistic requirements seem quaint.

The need exists to complete comprehensive reviews of current requirements to identify those aspects that can be eliminated, reduced or modified to increase their usefulness and effectiveness. Such attention in the near-term could lift administrative burdens by bringing attention to crippling, mind-numbing, and non-productive regulatory underbrush.

The use of social media to respond to inquiries, provide advice and react in real-time to the needs expressed by contractors’ personnel on whom State and Federal authorities rely to actually make things happen while building the Nation’s infrastructure needs to be explored. The need also exists to build, maintain, and enhance capabilities by developing substantive, cyclical, program-specific training modules for new and experienced State and contractors’ employees. Each proposed module needs to be previewed by subject matter experts to prevent new technology being used to train people to do the wrong stuff – quicker. Presentations need to be developed, refined and presented at forums usually attended by employers at the local, statewide, and national levels. In the absence of questions having been raised on Civil Rights issues, a short list of “Frequently Asked Questions” needs to be developed, refined, and routinely updated for use by states’ and contractors’ responsible staff members and employees.

After an initial briefing of FTA, FHWA and USDOT representatives by AKDOT&PF’s Civil Rights Program Manager, several meetings with funding agency staff members were positive and reflected their awareness of and openness to changing some procedures. Recent retirements in the leadership in FTA’s and FHWA’s offices of Civil Rights disrupted plans for more substantive conversations. The reluctance of personnel in “acting” capacities to commit their offices to long-term arrangements is understood, but the selection of a new Associate Administrator for Civil Rights in FHWA and the probability of a permanent replacement being named in FTA hold promise of mutually agreeable resolutions.

After the Preliminary Draft Report on the project was submitted, a half-day briefing was provided to AKDOT&PF and AMHS managers in Ketchikan, including the results of the effort to that point and an overview of a presentation of the types of information that could assist contractors’ EEO and DBE officers in reducing their employers’ vulnerability to complaints of discrimination and actually implementing Civil Rights requirements.

CHAPTER 1 – INTRODUCTION AND RESEARCH APPROACH

1.1 PROBLEM STATEMENT

Funding for ferry and ferry facilities projects administered by the Alaska Department of Transportation & Public Facilities (AKDOT&PF) and the Alaska Marine Highway System (AMHS) is authorized by Federal surface transportation authorization legislation. The most recent in the series of transportation investment legislation is the Safe, Accountable, Flexible, Efficient Transportation Equity Act; A Legacy for Users, known as “SAFETEA-LU.” The ferry provisions of that Act, extended by several continuing resolutions, are administered by the Federal Highway Administration (FHWA) and the Federal Transit Administration (FTA). Implementing FHWA’s and FTA’s Civil Rights requirements has been awkward for AMHS ship projects.

Shipbuilding is a specialized niche industry with relatively few competing contractors and subcontractors most of whom operate outside of Alaska. The State of Alaska contracts for both new vessel construction and for vessel refurbishment in shipyards across the U.S., but primarily in Alaska, Washington and Oregon. Contracts are awarded to those shipyards with dry docks of sufficient size for the ships to be refurbished and which are located near an infrastructure of ship building subcontractors with a labor supply skilled in shipbuilding specialties.

AKDOT&PF’s implementation of the Disadvantaged Business Enterprise (DBE) regulations (49 CFR Part 26) for FHWA and FTA; On-the-Job Training (OJT) regulations (23 CFR Part 230.111) for FHWA; and Equal Employment Opportunity (EEO) regulations (23 CFR 230.409) are primarily based on Alaska’s demographics, which are not applicable to those AMHS contactors with facilities outside of Alaska. This has resulted in three problems, the first being that Alaska’s DBE, OJT, and External EEO goals do not apply to contractors’ facilities outside of Alaska. The second is that shipyards and vessel construction contractors have difficulty understanding and dealing with AKDOT&PF’s implementation of the FHWA Civil Rights goals and requirements, which are oriented toward the highway construction industry. The third is that applicable provisions must be included in bid documents, and, because prospective bidders and the locations of their facilities are unknown until bids are opened, including all applicable goals for all possible contractors’ facilities was considered administratively burdensome, non-productive, and, possibly, confusing.

Further complicating this effort are the facts that there are few published Davis-Bacon (either State or Federal) wage rates for shipyard workers, and shipyards are viewed by the Office of Federal Contract Compliance Programs (OFCCP) as suppliers of ships and not as construction projects, which is how highway projects are classified and how FHWA’s regulations, as currently crafted must address them. It is unknown whether the OFCCP’s review procedures had any impact on the Wage and Hour Divisions not establishing Federal Davis-Bacon wages scales for shipyards. Alaska’s “Little Davis-Bacon” wage rates (the Alaska version of the Federal act) might cover the same positions – in Alaska, but sometimes differ from posted D-B minimum pay rates. In any event, Alaska cannot set wage rates for projects in other states.

The Wage and Hour Division (WHD), will not set shipyard wages unless the location of the facility is known at the time bids are solicited; resulting in an impossible situation since the location of the winning contractor’s facility is unknown until bids are opened. The lack of solid guidance on shipyard wage rates creates difficulties in determining pay equity during the EEO compliance review.

Another factor making these reviews more complex is that while FHWA and FTA both use 49 CFR Part 26 to govern the implementation of the DBE Program on vessel construction projects, only FHWA uses 23 CFR 230.11 and 230.409. FTA instead requires compliance with FTA Circular UMTA 4704.1, dated July 26, 1988. While the intent of the FHWA regulations and FTA circular are the same, the administrative measures available to implement them are very different.

The costs of AMHS contracts are estimated to be increased by as much as 5% in administrative and legal expenses during contract award and administration because of contractors’ lack of familiarity with the Civil Rights requirements and the impracticality of attempting to apply job market statistics from one State in another. Contractors are much more likely to reduce their bids when the requirements are unambiguous. The benefits in developing a diverse workforce; ready, willing and able to work on AMHS projects, as well as developing and providing contracting opportunities for DBE and other small firms in the shipbuilding industry are undeniable, but current regulatory schemes work against State personnel and contractors doing what needs to be done to develop or expand such opportunities.

1.2 RESEARCH OBJECTIVES

The objectives of the study were to: a. Obtain and analyze current Office of Federal Contract Compliance Programs (OFCCP), Wage and Hour, Federal Highway Administration (FHWA) and Federal Transit Administration (FTA) regulations and circulars governing Nondiscrimination, Equal Employment Opportunity (EEO), the Disadvantaged Business Enterprise (DBE) Program, and prevailing wage rates applicable to contracts for ship construction or refurbishment; b. Obtain and analyze AKDOT&PF and other similarly situated State Transportation Agencies’ bid and contract requirements to learn what approaches they employed in similar circumstances; c. Identify obsolete, conflicting or duplicative aspects of the requirements to serve as a basis for discussion with involved agency representatives about the need for change in the approach employed on AKDOT&PF shipbuilding and refurbishment contracts; d. Discuss and verify interpretations with responsible officials of each involved agency; e. Obtain input from contractors’ and shipbuilders’ associations and representatives; f. Explore workable alternatives for consideration by the involved agencies’ officials;

g. Draft an approach to setting contract EEO, OJT and DBE goals that meet each agency’s requirements and the needs of AKDOT&PF and the AMHS; h. Meet with officials of the Wage and Hour Administration to seek agreement on a process to establish contract-specific wage rates for AMHS contracts administered by AKDOT&PF; and, i. Draft a framework for bid and contract specifications for consideration and acceptance by OFCCP, FHWA, FTA, the Wage and Hour Administration, and AKDOT&PF.

1.3 INFORMATION SOURCES

The AKDOT&PF’s Civil Rights staff provided current bid and contract specifications and other documents listed in Appendix 1 on page 83, which were reviewed to determine the state of the art and practice in Alaska. They also provided information on ferry and ferry facility construction contracts. It was arrayed and analyzed with available data on DBE and other subcontract awards. Applicable Federal Civil Rights and other statutes were reviewed, as well as Presidential Executive Orders, and relevant implementing regulations and guidance of Federal funding and oversight agencies. The review of requirements was extensive and the list and summaries of documents reviewed, categorized by responsible agencies, are contained in the “REFERENCES” section of this report beginning on page57.

The record was supplemented by information received from EEO Officers of several shipbuilders who responded candidly to requests for input. The staff and several members of the Transportation Research Board’s (TRB) Ferry Committee (AP 085) provided leads to other sources of information of value. The President and Government Affairs Manager of the Shipbuilders Council of America, the National Executive Director and several State Directors and members of the National Association of Minority Contractors, and the president of the Minority Business Legal Defense and Education fund provided input in the effort to more clearly define the problems and refine possible approaches to resolve them. Summaries of those interviews are contained in Appendix 2 on page 84. Results of interviews and discussions with contractors’ EEO officers and Federal officials are contained in Appendix 3 on page 87.

Web searches turned up copies of contracts advertized or awarded by several FTA recipients for ferry construction, in which modifications were made to required provisions in accordance with FTA allowances.

1.4 SCOPE OF STUDY

The original objective of the effort was to craft simpler and more effective ways to notify bidders and contractors of their Civil Rights and other obligations. This was considered a worthwhile endeavor, especially in instances where contracts for ferry construction were won 6 by contractors with facilities in States other than Alaska and/or where a particular project was funded by both FTA and FHWA. The results could also ensure fair and objective reviews of contractors’ compliance.

Initially the study focused on information from the Civil Rights staffs of other State departments of transportation that had experience in: (1) awarding contracts to ferry contractors with shipyards in states other than the State administering the ferry funds; and, (2) applying innovative approaches to incorporate applicable Civil Rights provisions in bid solicitations and contracts, especially when a project was funded by both FTA and FHWA. Input was sought from similarly-situated States on modifications they may have made to Civil Rights-related bid and contract specifications to increase their effectiveness. That input was to be analyzed to determine what, if any, aspects of other states’ efforts could be utilized by AKDOT&PF. The effort was expected to produce useful information and insights, which, in turn, were to serve as foundations for developing more workable alternative approaches to be considered by AKDOT&PF and funding agencies. The alternatives identified or developed were expected to be used on ferry and ferry facility construction projects, regardless of the source(s) of funds. To the extent any such efforts existed and increased the understanding, acceptance, and effectiveness of Civil Rights programs, lessons learned needed to be recorded, coordinated, and applied. Information collection tools and transmittal letters were crafted by the contractor and sent by AKDOT&PF to targeted sources.

The original effort to obtain input from similarly-situated states produced no substantive responses. After a follow-up effort with a more tightly circumscribed set of states was equally unproductive, the original approach to the research was abandoned. The contractor proposed, and AKDOT&PF agreed, that the research effort be refocused on current Federal requirements, with the knowledge that some aspects were obsolete, confusing, duplicative, unnecessary or administratively burdensome.

One revised objective of the exercise was to determine whether legislative, executive or regulatory authority existed that could support approval by funding agencies of any or all of the approaches proposed for a pilot effort. The record is replete with numerous attempts by several Congresses, several Presidents, and the Office of Management and Budget to reduce regulatory impediments, including administrative and paperwork burdens, conflicts, overlaps, and avoidable duplication. There are ample statutory, Executive, and regulatory authorities to support waivers, exemptions and other relief, and to authorize and assess pilots to increase effectiveness and efficiency. Some examples of such authorities are summarized in Appendix 4 on page 90, and appear to have more than sufficient weight to overwhelm the regulatory impediments in the list of constraints outlined in Appendix 5 on page 95.

1.4.1. THE INITIAL PROBLEMS

Contractors must comply with, and States must enforce, a series of nondiscrimination statutes that prohibit discrimination in their programs and activities based on race, color, national origin, sex, age, and disability. The generally applicable nondiscrimination statutes have been augmented and reinforced by other agency-specific Nondiscrimination, Equal Opportunity (EO) and Equal Employment Opportunity (EEO) provisions. The Civil Rights-related special provisions of funding agencies are currently required to be included in each prime and subcontract, regardless of tier. The EEO provisions of EO 11246, administered by the Office of Federal Contract Compliance Programs and on which most other EEO requirements are based, are allowed to be incorporated in prime and subcontracts by reference and by operation of the Order.

Civil Rights-related Bid and Contract provisions, with which State compliance staff members are tasked with interpreting and applying, were considered unclear, overlapping, conflicting, burdensome and confusing to contractors who might attempt to implement them.

The provisions require: nondiscrimination in program impacts, access, benefits, participation ,and treatment based on race, color, national origin, sex, age, or disability; nondiscrimination in employment based on the same criteria, providing EEO through Affirmative action; providing On-the-Job-Training for minorities, women and the socially and economically disadvantaged; and, promoting contracting opportunities for DBEs. Both FTA and FHWA rely on DOT’s regulation governing the DBE program, but each agency’s approach is based on conditions faced by their predominant contractor audience; road and bridge builders and designers for FHWA, and mass transit system providers and contractors and transit vehicle manufacturers for FTA.

In instances where a project is funded by only one agency, monitoring a contractor’s compliance with required contract provisions can be relatively straightforward. However, when multiple agencies (in this case the Federal Highway Administration [FHWA] and the Federal Transportation Administration [FTA]) are both involved in funding a particular project, Civil Rights related requirements and other guidance may diverge, overlap, or conflict, adding to the complexity of the matter at issue because: neither agency’s Civil Rights requirements address shipbuilding – specifically; and, the regulations, guidance documents, and required contract provisions are dated and several contain provisions that are obsolete. For example “Hometown Plans” no longer exist and FHWA has reorganized, having eliminated “Regions.”

The FTA’s guidance on Equal Employment Opportunity (EEO) is contained in an Urban Mass Transit Administration’s (UMTA) Circular, C 4704.1, issued on July 26, 1988. That Circular addresses the EEO responsibilities of recipients and sub-recipients, mentioning that the 8 requirements need to be “redelegated” (sic) to make them applicable to contractors and subcontractors. On the same date, FTA issued Circular C 4715.1A, “Human Resources Programs (Section 20) Applications and Project Management Guidelines,” which contained, among other things, guidance on Civil Rights requirements including Nondiscrimination, Title VI, EEO, DBE, elderly and handicapped (sic) requirements, and quarterly reporting requirements.

The FTA’s initial guidance regarding Nondiscrimination was contained in Circular C 4702.1, which was cancelled when it issued Circular C 4702.1A, titled “Title VI and Title VI Dependent Guidelines for FTA Recipients.” That circular outlines FTA’s policy allowing recipients and sub- recipients “greater flexibility to meet requirements through procedures that match their resources, needs, and standard practices” (Federal Register Notice of April 13, 2007, Volume 72, Number 71).

Several attempts by FHWA staff to complete updates of its contract compliance regulation have yet to bear fruit. Figure 1 on page 76 compares FTA and FHWA Required Contract Provisions in AKDOT&PF contracts. AKDOT&PF’s personnel used the format employed by FHWA on the 1273 form as the template to communicate FTA’s EEO and other requirements to bidders and contractors. One part of FHWA’s regulations specifies “Required Contract Provisions” and another part outlines a contract compliance process to determine and obtain compliance. Additionally, clarifying guidance was provided related to FHWA and OFCCP’s responsibilities related to EO 11246 compliance and Indian Employment Preference on projects on or near reservations.

The FHWA used to provide its recipients with guidance using a system similar to that employed by FTA (Circulars, Orders, Instructional Memoranda, Notices, and Policy and Procedure Memoranda). After it was sued by an environmental group in California because much of the material in that system had regulatory impacts but was not available to the public, a work group composed of FHWA attorney’s worked under tight deadlines to identify regulatory material in the system and issued 23 CFR.

FTA’s circulars refer to and rely upon DOT, FHWA, DOJ and EEOC regulations, among others, as authorities or references for its guidance. Together with FHWA, the FTA has issued several joint regulations; most notably 23 CFR 771, Environmental Impact and Related Procedures. 8/28/87, and 23 CFR 450 and 49 CFR 613, Planning Assistance and Standards, 10/26/93. With regard to any of its circulars that require recipients, contractors, manufacturers or operators to do specific things, the agency may be vulnerable to the type of suit that resulted in FHWA’s guidance being codified.

Another twist in the mix is the situation that exists when a bidder holds major Defense and other Direct Federal shipbuilding contracts, monitored by OFCCP and/or funding agencies’

9 compliance personnel. The as yet unaddressed regulatory complexity has caused confusion for both State compliance staffs and contractors’ EEO/DBE officers.

The problem facing AKDOT&PF and other States can be attributed to several factors, not the least of which is the regulatory “blind spot” caused by ferries not being in the mix when current regulations and guidance were drafted. Staffing limitations and turnover in Federal agencies and in most State transportation agencies have negatively affected their capacities to keep guidance current. It is usually considered virtually impossible to both plan and do anything in the same time frame. Responsible State staffs must be actively and continuously involved in promotional, monitoring, oversight and compliance activities. The need exists to make sense of each funding and oversight agency’s requirements, identifying areas of overlap, duplication, conflict, and obsolescence, and to craft workable alternatives. The urgency of that need and developing effective briefing and training materials cannot be overstated.

Conditions faced by the Federal government and the States have changed dramatically. The economic downturn has increased unemployment and competition for scarce jobs. Public works projects are again being looked-to as stimulators for job development and the economy. States and employers cannot continue to be hamstrung by hide-bound regulations which sap scarce resources, reduce productivity, and unnecessarily increase costs in ways that could be prevented. New approaches must be developed for consideration for approval by the funding agencies to increase the effectiveness of program delivery. The capability and capacity of recipients’ staffs must be enhanced to meet the transportation, employment, and training needs of their citizens. Responsible members of contractors’ staffs must perceive a logical connection between their work and some positive outcomes, rather than just pushing paper out to meet requirements they may not understand.

The need exists to identify the simplest approach to fully communicate the Nondiscrimination, EO and EO requirements in bid and contract documents without burdening contractors with having to retain attorneys to explain to them what their responsibilities are. Similarly, every effort to simplify the approaches employed by AKDOT&PF to determine and obtain compliance should be considered.

CHAPTER 2 – FINDINGS

2.1. THE ALASKA MARINE HIGHWAY SYSTEM (AMHS)

The State of Alaska has critical needs to build, maintain, and refurbish ferries and ferry terminal facilities. More likely than not, those needs will increase in the coming years.

The eleven (11) ferries, ports and routes covered by the AMHS are considered part of the National Highway System but no part of the AMHS has to be directly connected to another Federal-aid road to be eligible for Federal-aid. Congress has addressed Alaska’s uniqueness in a series of exemptions from general provisions of transportation legislation and provided the State earmarked, special funding levels.

The current service area of the AMHS includes and follows the approximate routing of the Alaska Steamship Company, which discontinued service in 1971. The Alaska Steamship Company regularly sailed from Alaskan Way in Seattle to ports in Alaska. When the Alaska Marine Highway System (AMHS) began service shortly after Alaska became a State in 1959, its ferries also sailed from Alaskan Way. The AMHS began year-round service in 1963 and currently “operates along the south central coast of the state, the eastern Aleutian islands and the Inside Passage of Alaska and British Columbia, Canada. Ferries serve communities in Southeastern Alaska that have no road access, and the vessels can transport people, freight, and vehicles. AMHS's 3,500 miles (5,600 km) of routes go as far south as Bellingham, Washington in the contiguous United States and as far west as Unalaska/Dutch Harbor.”

2.2. SHIPYARDS

In a study conducted in 2002 by LECG, LLC, for the Shipbuilders Council of America, it was reported that the U.S. commercial shipbuilding industry, not including those that build Navy combatant ships, grew at an average rate of 6.8 percent between 1992 and 2001, outperforming the U.S. economy. There are over 125 commercial and defense related shipyards in the United States, in twenty nine (29) states, and “…these shipyards purchase materials, services, and capital equipment… produced in all 50 states and the District of Columbia.” Almost every coastal State and major inland waterway such as the Great Lakes, and the Mississippi and Ohio Rivers has active commercial shipyards. The three (3) Alaska-based shipyards with the capability, capacity and experience to build or repair ferries are: Alaska Ship and Drydock Inc., Allen Marine, Inc., and Seward Ship and Drydock, Inc., which both builds and operates ferries. Shipyards build self- propelled ships and non-self-propelled barges. In addition to constructing vessels, the shipyards clean, repair, convert, modify, and upgrade ships and barges.

2.3. SHIPYARD EMPLOYMENT

Many crafts and skills used in shipbuilding are the same or very similar to those traditionally involved in heavy, highway, and civil construction, such as laborers, crane operators, welders, truck drivers, pipe fitters, and painters. In addition to a long list compiled by the Bureau of Labor Statistics outlining jobs and skills found in ship and boat building (North American Industry Classification [NAICS] 3366), some unique skill-sets are employed in shipbuilding, including naval architect, and computer aided design and construction jobs. There are other crafts unique to the industry, such as shipwrights, “lofters,” joiners, outside and inside machinists, riggers, sand blasters, shipfitters, mechanical piping engineers, pipe welders, marine diesel mechanics, and marine electricians.

AKDOT&PF’s Civil Rights staff reported that there were instances when skilled workers were imported from Gulf States to fill workforce gaps in Alaska shipyards, while unemployment among Alaska Natives and other Alaskans in the immediate vicinity of the work remained high and unaffected by the opportunities at their front doors. A more extensive list of businesses and skills used in ferry and ferry facilities construction is contained in Appendix 6 on page 97.

The “feast or famine” nature of work at some shipyards may not be attractive to some prospective workers, who are interested in careers and consistent work. The expansion of the drydocks at Alaska Ship and Drydock may increase that facility’s ability to provide more training and work for local citizens, rather than having to import those with the requisite skills and experience from the Gulf Coast. Even though recent turns in the economy may slow attrition rates, the average age of shipyard workers foretells major impacts as “Baby Boomers” either retire or experience their mortality. Opportunities for training and employment in the industry should expand significantly over the next decade.

2.4. DEMOGRAPHIC AND OTHER CONSIDERATIONS

When the most significant Civil Rights legislation since the Civil War was enacted, the disparity between minority unemployment rates and those of the majority, nationwide, was telling. When minorities were employed in the transportation industry, they were employed in “trowel trades” or as laborers. They were denied access to higher paying skilled trade positions, and women were locked out by traditional rationalizations for discrimination. When a Senator included “sex” as a proscribed basis for employment discrimination as a joke in a vain attempt to scuttle Title VII of the 1964 Civil Rights Act and the Bill passed with the amendment intact, a new factor was included that was not fully addressed by affirmative measures until 4 years after the United Nations promoted the “International Year of the Woman,” in 1976.

Since then women have succeeded in almost every discipline, except construction, where their numbers still lag. In her recent article titled “Women Don’t Need Federal Affirmative Action

Programs,” Diana Furchtgott-Roth, former Chief Economist at the US Department of Labor stated that: “(W)omen are awarded a substantially larger share of high school diplomas, B.A.s, M.A.s, and Ph.D.s, and show lower rates of incarceration, alcoholism and drug abuse.” Women have proven they can do virtually any job that men can do, most notably when they filled vacancies in manufacturing plants during WWII, only to be unceremoniously displaced when the troops came home and were in need of employment. The abrupt return to traditional roles would not last as other wars ate away at the supply of young men and the waste of human capital was recognized. Women in construction are employed as managers, supervisors, administrators, engineers, and more are becoming business owners. They occupy virtually every craft; including laborers, teamsters, electricians, equipment operators, carpenters, cement finishers, painters, plumbers, and ironworkers among others.

With the Women’s Bureau of the US DOL, the FHWA funded research which resulted in classes being developed and presented nationwide in a “Women in Construction” initiative. The material was used as the basis for another initiative with the Children and Families Administration of the US Department of Health and Human Services, focused on moving participants from “Welfare-to- Work.” One of the efforts in the Kentucky River Foothills was reviewed by the Pew Foundation and recognized as one of ten most effective approaches in the Nation. The approach was recommended for nationwide replication to increase the self-esteem of participants and provide them exposure to “New Traditional” construction skills and career opportunities. OJT/Supportive Services funds are used for a variety of outreach efforts, including the highly successful Construction Career Days initiative, used by AKDOT&PF to increase interest in highway construction skills and Summer Transportation Institutes that expose participants to careers in transportation and other State-specific initiatives

The early years of constructing the Interstate Highway System saw new levels of public infrastructure employment, not seen since the end of World War II. The monochromatic character of the workforce and pressure from the Civil Rights community and its supporters finally convinced Congress that it was wrong to have funds obtained through nondiscriminatory mechanisms from the tax-paying public spent in a discriminatory manner. As regulatory systems were being put in place to turn the rhetoric of the legislation into realities, a series of presidents reinforced the Civil Rights legislation with a series of Executive Orders and funding for Civil Rights programs in each Federal agency. The legislation and executive orders were implemented through agency-issued regulations and other guidance. The initial targets of Civil Rights legislation were African- Americans, especially in the South, although many northern cities were not too hospitable in the housing, employment, or business arenas. Historian, Roger Wilkins has said: “Blacks have a 375- year history on this continent: 245 involving slavery, 100 involving discrimination, and only 47 years involving anything else.”

Since the beginning of the modern Civil Rights era, others have realized that they, too, had been marginalized, most notably women, Hispanics, and Persons with Disabilities, and – more recently – 13 gays, lesbians, and transgender persons. Interestingly, the Americans with Disabilities Act (ADA), at Sec. 12208, States: “(T)ransvestites. For the purposes of this chapter, the term "disabled" or "disability" shall not apply to an individual solely because that individual is a transvestite.” And, at Sec. 12211 (known as “the Helms amendment”) defines homosexuality and bisexuality as “... not impairments and … not disabilities under this chapter.” That same section further defines the term "disability" as not including: “(1) transvestism, transsexualism, pedophilia, exhibitionism, voyeurism, gender identity disorders not resulting from physical impairments, or other sexual behavior disorders; (2) compulsive gambling, kleptomania, or pyromania; or (3) psychoactive substance use disorders resulting from current illegal use of drugs.” No reason was given why necrophilia and bestiality were not included in the list and whether those who practice either are protected – or not.

In the late 1980s and early ‘90s, after a boom in employment - with low unemployment - the market collapse undermined many retirement funds and many “Baby Boomers” who had planned on retiring, may now continue working to rebuild nest-eggs broken by their misplaced trust in the market. While retirement projections have gone the way of most projections, vacancies will continue to occur due to retirements, mortality, or expansions. And EEO must be provided.

As a Nation, we are growing older and, as a consequence, more disabled. It is estimated that between 50 and 54 million people are disabled in the US population. If the current trend in birth rates continues, over 50 percent of the population will be over 55 by 2030. The trend in birth rates in the United States is presented in Figure 2 on page 77. Shifts in percentages of racial/ethnic groupings will remain fluid, become more interesting, and are a function of age, fertility, fecundity, morbidity and mortality in each population. Only one state in the nation has a lower average age than Alaska, a statistic that has long-term implications related to the fertility and fecundity of the population.

2.5. FERRY FACILITIES CONSTRUCTION

While construction of docking and related facilities requires personnel with specialized marine construction skills and experience, sometimes involving diving, the equipment, materials, and skill sets used to construct land-side ferry facilities are the same as those used to construct heavy- highway and building projects.

2.6. THE U.S. FERRY INDUSTRY

The Bureau of Transportation Statistics of the Research and Innovative Technology Administration in the US Department of Transportation (DOT) was tasked with developing and maintaining a data base on ferry operations, nation-wide. The effort has had mixed success, with approximately 341 operators not responding. But it is estimated that there were 721 ferries of various sizes, configurations, and capacities being operated by a diverse set of public and private entities throughout the Nation, with twenty four (24) states operated 69 of the 721 ferries.

The North Carolina DOT has twenty-four (24) ferries and maintains “a full-service shipyard, dredge, military-style landing craft, utility vehicles (LCUs), tugs, barges, and other support vessels…” for construction, outfitting and repairs. The State of Washington has the largest large ferry fleet in the Nation, operating twenty-three (23) ferries providing access to twenty (20) different ports. The New York City DOT operates ten (10) Staten Island ferries (of seventeen (17) ferries operated by cities, nationwide), and the Golden Gate Bridge, Highway and Transportation District operates five (5) ferries. The Alaska Marine Highway System operates eleven (11) ferries serving thirty-two (32) coastal communities.

The Safe, Accountable, Flexible, Efficient Transportation Equity Act – A Legacy for Users (SAFETEA- LU), the most recent in a series of Federal transportation reauthorization legislation, contained a provision which modified 23 U.S.C. 149. That provision established a new program providing $38 million in FY 2005, incrementally increasing to $67 million in FY 2009, to construct ferry boats and terminals. SAFETEA-LU continued provisions of ISTEA and TEA-21 allowing States flexibility in transferring funds between FHWA and FTA funding categories. The American Recovery and reinvestment Act (ARRA) provided significant infusions of funds for transportation projects, including provisions for pre-award approvals of certain projects benefitting Indian tribes. The ARRA also made $41.6 funds available to the State of Alaska for FTA and FHWA funded projects in addition to the funds authorized by SAFETEA-LU.

Although the provisions of SAFTEA-LU allocated funds to build ferries or ferry facilities to nineteen (19) of the states operating ferries, between 1998 and 2010, thirty-four (34) states and two (2) territories received ferry boat discretionary funds. Appendix 7 on page 98 contains a list of the recipients. The pattern of ferry fund allocations to Alaska and the 34 other states and two US territories receiving ferry and funds from the FHWA administered Ferry Boat Discretionary Fund since 1998, is outlined in Table 1, on page 16. Since 1998, Alaska has been authorized to receive $109,177,557 in Ferry Boat Discretionary funds, or 18.2 percent of the $598,736,297.63 total authorized for distribution by FHWA. Between 1999 and 2003, FTA awarded a total of $70 million for ferry and ferry facilities construction.

Since 1988, FTA has updated several of its circulars governing EEO program of recipients, sub- recipients and contractors. The latest FTA circular including guidance on Civil Rights provisions was C 9040.1F, which dealt with FTA funded programs in non-urbanized areas. After listing sixty (60) statutory and regulatory authorities, including those of DOT and FHWA and Civil Rights guidance from other oversight agencies, paragraph 4 of the transmittal of that circular states: “4. WAIVER. FTA reserves the right to waive any requirements of this circular to the extent permitted by law.” Further, FTA indicated in Chapter 2, Section “3. STATE ROLE IN PROGRAM ADMINISTRATION. To the extent permitted by law, FTA gives the States maximum discretion in designing and managing the Section 5311 program to meet its rural public transportation needs. Where possible, FTA defers to a State’s development of program standards, criteria, procedures and policies to provide the State with the flexibility it needs to standardize its management of FTA assistance and related State 15 programs. In addition, under the Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments (common grant rule), the U.S. Department of Transportation (DOT) permits a State to rely on its own laws and procedures instead of Federal procedures in the areas of financial management systems, equipment, and procurement. 49 CFR part 18.…“ And: “FTA delegates authority to the State whenever allowed 49 CFR part 19.” [Emphasis added.] Ferries are not mentioned in C-9040.1F, although issues addressed (i.e. nonurbanized transportation) seem well-suited to include ferry transportation, although separate guidance, including agreements reached with FHWA and DOT on ferry-related bid and contract documents and related matters might be more useful.

Table 1 – Ferry Boat Discretionary Funds Awarded by FHWA 1998-2010 YEARS FUNDS ALLOCATED FERRY FUNDS ALLOCATED to ALASKA’s by FHWA ALASKA % SHARE 1998-1999 $56,239,300.00 $10,000,000.00 17.8 2000 $35,730,975.00 $10,000,000.00 27.9 2001 $34,751.263.00 $10,000,000.00 28.7 2002 $63,579,000.00 $10,000,000.00 15.7 2003 $37,753,000.00 $1,837,975.00 4.9 2004 $34,060,131.00 $2,642,318.00 7.7 2005 $31,757,046.00 $10,000,000.00 31.5 2006 $38,644,828.00 $10,687,757.00 27.7 2007 $60,200,000.00 $10,000,000.00 16.6 2008 $45,164,186.00 $10,000,000.00 22.1 2009 $35,029,834.63 $10,950,000.00 31.3 2009* $60,000,000.00 $3,059,507.00 5.1 2010 $65,826,654.00 $10,000,000.00 15.2 TOTALS $598,736,207.63 $109,177,577.00 18.2 *ARRA

In May of 2009, “The U.S Ferry System Investment Act of 2009” was proposed in both houses of Congress. In the House, it was introduced by Rep. Rick Larsen and twenty-three (23) other co- sponsors. In the Senate, it was introduced by Senators Patti Murray and Lisa Murkowski. The Act would invest $200 million a year in funding for ferry systems across the country starting in Fiscal Year 2012, and running through Fiscal Year 2018. Among other things, the bill would: establish a Ferry Joint Program Office within U.S. DOT to coordinate Federal programs affecting ferry and ferry facility construction, maintenance, operations and security, and to promote ferry transportation as a component of the U.S. transportation system; require U.S. DOT to ensure the National Ferry Database is consistent with the database maintained by the Federal Transit Administration; and, authorize funding to establish a National Ferry Transportation Institute at a college or university. The institute would conduct research, training, and develop models and recommendations to improve the operation and safety of ferry systems in the U.S. The Bills (H.R 2172 and S. 930) were referred to each house’s responsible committee.

2.7. CIVIL RIGHTS REQUIREMENTS

To continue receiving Federal funds, authorized representatives of recipients signed two sets of assurances with FHWA: the Nondiscrimination Assurances committed recipients to not discriminate and to not allow their sub-recipients or contractors to discriminate in program impacts, access, benefits, participation, treatment, and contracting and training opportunities. The EEO Assurances committed States to develop or adopt programs and procedures sufficient to prevent discrimination in all terms and conditions of their employment and in the employment of their sub-recipients, contractors, subcontractors, material suppliers and vendors. The FTA’s Circulars provided program guidance on recipients’ Title VI, EEO, and “Non-urbanized Area” programs, containing similar Assurance requirements.

Federal funding agencies are responsible for protecting the rights of those employed in, benefitting from, or affected by the programs and activities of their primary recipients, sub- recipients, and contractors. The Civil Rights authorities can be classified as those prohibiting discrimination, promoting Equal Opportunity, or requiring Equal Employment Opportunity. The authorities discussed in this section are the most salient, however, other historic statutes on which recent Civil Rights legislation were based also apply and are summarized in Appendix 8 on page 99.

The Civil Rights provisions in bid and contract specifications are based on legislative and executive mandates, some of which are proscriptive and others prescriptive in nature. To assist in ensuring the concepts are known and understood, they have been categorized here as Nondiscrimination, Equal Opportunity, and Equal Employment Opportunity mandates. The proscriptions against discrimination in programs, activities, contracting and training opportunities are contained in a series of Nondiscrimination statutes outlined in Table 2 on page18. The Equal Opportunity mandates indicated in Table 3 on page 20 require or allow specific programs and initiatives to overcome identified problems in contracting and training. In DBE and EEO provisions, State- specific or more precisely delineated goals and timetables are required. The authorities containing proscriptions against discrimination in employment and the prescription to take Affirmative Action in instances where non-compliance is determined, based on patterns or proof of discrimination and no evidence of good faith efforts to address the deficiencies, are specified in Table 4 on page 23.

2.7.1. NONDISCRIMINATION

Title VI of the 1964 Civil Rights Act prohibits discrimination based on race, color, or national origin in all programs and activities of Federal-aid recipients, sub-recipients, contractors and subcontractors, regardless of tier. Whether a particular program or activity of a covered entity involves Federal-aid or not is immaterial. All of the programs and activities of Federal-aid

17 recipients, sub-recipients, contractors and subcontractors are covered by the Nondiscrimination statutes.

Primary recipients are responsible for ensuring that their programs and activities do not discriminate. And, to ensure their sub-recipients and contractors do not discriminate in any of their programs or activities. They must also determine and, when and where necessary, obtain compliance by their sub-recipients and contractors. Primary recipients are also obligated to effectively communicate with their sub-recipients, bidders, and contractors so they, in turn, are aware of their Civil Rights and other responsibilities and obligations.

The obligation to not discriminate is based on the intent of Congress that funds collected in a nondiscriminatory manner not be used in ways that subsidize, promote, or perpetuate discrimination based on race, color, national origin, sex, age or disability. While Title VI prohibits discrimination based on race, color, or national origin, other subsequent statutes included sex, age, and disability as prohibited factors, enforced by the same procedures employed to obtain compliance with Title VI. Executive Order 12898 included Environmental Justice for minority and low income populations and EO 13166 included Limited English Proficiency under the aegis of Title VI. The Nondiscrimination authorities are outlined in Table 2, below.

TABLE 2. Nondiscrimination Authorities Prohibit Discrimination in Federally Assisted Programs* Based on Handicap Religion Nondiscrimination National or or Authorities Race Color Origin Age Disability Sex Creed EJ** LEP*** Title VI of the 1964 Civil Rights Act O O O Age Discrimination Act O Rehabilitation Act of 1973 O

23 U.S.C. 324 O Americans with Disabilities Act O FTA Statute at 49 U.S.C. 5332(a) O O O O O O EO 12898 O EO 13166 O *The nondiscrimination prohibitions apply to all programs and activities of Federal-aid recipients, sub- recipients, contractors, and subcontractors, regardless of tier; and, whether Federal funds are involved in a particular program or activity of the involved recipient, sub-recipient, contractor or subcontractor - or not. ** Environmental Justice *** Limited English Proficient

Title VI and related nondiscrimination statutes have been interpreted as prohibiting discrimination in a program’s or activity’s impacts, access, benefits, participation, treatment, training and contracting opportunities. It is believed that rather than simply re-stating the statutes’ prohibitions, equipping State staff members and contractors to recognize potentially discriminatory situations and taking the actions needed to prevent discrimination would be more effective and fulfilling than being on the receiving end of constant attempts to catch responsible State and contractor personnel doing wrong. Equipping them to recognize how discrimination can occur within their areas of responsibility and how they prevent or address it proactively has a better chance of meeting the legislation’s objectives. Catching them doing right and recognizing their accomplishments is likely to engender more support and actual effort than the current focus on determining compliance.

Title VI applies to employment only when the primary purpose of the Federal-aid is to provide employment or when the proximate cause of discrimination found in a program or activity is determined to be the discriminatory employment pattern in the unit responsible for its management/administration. When shepherding the Bill through the Senate, Senator Hubert Humphrey used the Federal-aid highway program as an example of the type of program in which Title VI would apply to employment. The focus on jobs of the American Recovery and Reinvestment Act of 2009 would have Title VI apply, but EO 11246, Title 23 and 49 USC 5332 also apply and have more efficient and immediate mechanisms to effect compliance than the cumbersome and dreadful “ultimate sanction” available pursuant to Title VI.

In any case where non-compliance is determined and not corrected, the only ”sanction” available to obtain compliance with Title VI and related nondiscrimination statutes is the loss of Federal funds, a draconian measure, if applied. That remedy has been used sparingly because innocent parties, not responsible for the non-compliance, would be injured.

Usually, once a recipient’s or contractor’s decision-makers are informed of possible immediate and downstream impacts and implications of not acting properly, common sense takes hold and appropriate corrective measures are instituted. Other administrative methods, including negotiation, conciliation, and persuasion can be applied to focus attention on the matters that resulted in a finding of non-compliance. These measures might include, but not be limited to withholding project approvals until corrective action is taken, because it is illegal to transfer funds to an entity that is discriminating, whether a recipient, sub-recipient, or contractor; reducing bid ceilings; or, declaring a contractor a non-responsible bidder.

2.7.2. EQUAL OPPORTUNITY

Equal Opportunity (EO) programs (Table 3 on page 20) may be legislatively or executively mandated. Within the framework provided by the authorities, initiatives are either required, or 19 may be developed, to meet their intent. The statutes are implemented by regulations at 23 and 49 CFR. On rare occasions courts have intervened to address matters at issue before them and ordered corrective action based on their interpretation of the facts put before them.

Table 3. Equal Opportunity Program Authorities Require Programs* to Promote EO Mandates OJT APPRENTICESHIP OJT/SS MBE/DBE/ MBE/SS Small WBE ** Businesses 23 U.S.C. 304 O 23 U.S.C. 140 (b) O O O 49 USC 1601 O Surface Transportation O O Authorization Acts 23 U.S.C. 140 (c) O *On-the-Job Training (OJT), OJT/Supportive Services, Minority,[Disadvantaged, and Women-owned Business Enterprises

(MBE/DBE/WBE), and MBE/Supportive Services (MBE/SS) **Including bonding and short-term loan assistance pursuant to SAFETEA-LU.

2. 7.2. a. APPRENTICESHIP AND TRAINING

Both FTA and FHWA promote the use of apprenticeship programs, where they exist, to assist employers in addressing underrepresentation. In locales where formal apprenticeship programs do not exist, pursuant to 23 USC 140 (b), the Secretary is authorized to develop, conduct, and administer highway construction training, including skill improvement programs. The Bureau of Apprenticeship and Training can register both union and non-union apprenticeship programs and states are authorized to pay contractors to provide training, an approach which made sense at the outset of EEO programs but that needs reconsideration now, since employers must train to survive.

States can develop or recommend that the appropriate FHWA Division Administrator approve training programs adopted or designed to ensure graduates achieve the “journey” level in the involved craft. FHWA can authorize funds to provide “Supportive Services” to recruit trainees and provide basic services to ensure that they successfully complete the approved training courses. States can also pay contractors to defray some of the costs associated with providing training. Although complaints and inquiries about the OJT program were common near the program’s inception, the roars of discontent have been less than deafening since.

A provision of SAFTETEA-LU, codified at 23 USC 114 (c), authorizes Alaska to pay for travel and per diem for construction employees at remote sites.

2.7.2. b. DISADVANTAGED BUSINESS ENTERPRISE (DBE)

Both FTA and FHWA established DBE programs in response to a series of surface transportation authorization statutes. Each required recipients to put in-place and administer effective DBE programs. A series of extensions and modifications to legislative mandates and courts’ decisions interpreting their applicability resulted in DOT’s implementing regulations evolving. In addition to the standard DBE provisions applicable to construction contracts, FTA has a separate approach for Transit Vehicle Manufacturers. The provisions of 49 CFR 26.49 (a) allow Transit Vehicle Manufacturers (TVMs) to submit DBE goals directly to FTA’s Headquarters office for review and approval. FHWA and FAA may rely on similar procedures to address similar circumstances, or, alternatively, a recipient may develop and submit project-specific DBE goals for TVMs for approval.

The program has been adjusted several times to address the findings of several court cases and does not appear capable of meeting its objectives, or more of those certified would be bidding as primes by now. The program’s title is one of its biggest problems, since the mind-sets of owners of businesses seeking certification and the right or privilege of describing one’s business as “disadvantaged” seems antithetical. That a “business” is an “enterprise” and the program’s title is unnecessarily redundant is seen by some as problematic also. That marketing one’s business as “disadvantaged” might not be the best way to drum up business seems to have never crossed the minds of those who put the unfortunate tag on the program and its participants. If a firm gets enough opportunities to be semi-successful by demonstrating that it can provide high quality goods, services, or construction at a competitive price without overextending once s/he is identified as dependable by the major players in the area in which the business operates, once the size cap is within reach, other factors have to be considered. If the DBE niche is breached, and the firm is “graduated,” it would not be a time for rejoicing – unless the DBE had the resources, guts, time, and luck to bid as a prime. Unless a successful DBE changes the name of its enterprise and obtains a new certification, graduation could mean oblivion. While opportunities do exist and can be obtained through the program, so much of it is perceived as ineffectual, if not self-defeating, even by some of its staunchest supporters. However, at this juncture, it is the only horse in the stable with a saddle and must be ridden… if such a ride is what one had in mind.

Workable alternatives need to be explored, approaches developed, and pilots tested and adjusted to ensure the business opportunities inherent in public works programs do not remain as limited as they remain.

2.7.3. EQUAL EMPLOYMENT OPPORTUNITY (EEO)

Contractors’ employment practices are required to be monitored and periodically reviewed. Whenever discrimination or a failure to provide EEO is determined by investigations of complaints or the results of compliance reviews conducted by the recipient, a funding agency, or the Office of Federal Contract Compliance Programs (OFCCP), action sufficient to stop the offense and prevent a recurrence is required.

Arguably, initial compliance efforts had to compel employers to do things that many feared would upset their – then - current employees; like posting EEO policies and complaint procedures and notifying subcontractors of their Civil Rights responsibilities. Since those initial efforts, a lot of energy has been committed to complying with administrative prescriptions that have little, if any, relationship to the objectives of applicable authorities. States and contractors have spent untold millions of hours and dollars to ensure Required Contract Provisions are included in all requests for bids and subcontracts. Contractors, subcontractors, material suppliers and vendors have paid for postage and paper to send standard, required notices to potential sources of referrals of minorities and/ women informing each that the firm is “an EEO employer,” an assertion that lost its charm and effect over 30 years ago.

Some community action agencies, after attempting to establish procedures with the sources of the mailings, if rebuffed, file subsequently received notices from such sources in the trash.

A problem in the compliance review process is that some stop at the gates of the contractor and whatever is in the contractor’s files is accepted by inexperienced reviewers as “evidence” of Affirmative Action. More realistic and effective approaches can be employed.

The authorities for EEO programs are outlined in Table 4 on page 23.

Table 4. Equal Employment Opportunity Authorities Prohibit Discrimination in all Terms and Conditions of Employment* Based On: EEO Mandates Race Color Religion/ Sex National Age Disability Indian Creed ** Origin *** Employment

Preference * *** E.O. 11246, as O O O O O O amended 23 U.S.C. 140 (a) O O O O O

Title VII of the ’64 O O O O O O Civil Rights Act Rehabilitation Act O of 1973 (Sec. 501) Age Discrimination O in Employment Act of 1975 Americans with O Disabilities Act of 1990 UMT Act O O O O O O O 49 USC 1601 Equal Pay Act O 29 USC 201 23 U.S.C. 140 (d) O

* E.O. 11246, 23 U.S.C 140 (a), and 49 U.S.C 5332 (a) all prohibit employment discrimination. Implementing regulations at 41 CFR 60, and 23 CFR 230 D, FTA Circular 4704.1 respectively, require Affirmative Action in instances where underrepresentation and/or discrimination is found. Although the Office of Federal Contract Compliance Programs is the only Federal agency responsible for determining compliance with E.O.11246, recipients are responsible for determining compliance with all terms and conditions of contracts. Title VI of the 1964 Civil Rights Act applies to employment in two circumstances: (1) where the primary purpose of the Federal-aid is to provide employment; and, (2) where a review or investigation determines that the proximate cause of discrimination in a program’s implementation was the discriminatory employment patterns in the office responsible for the offending program. ** Including pregnancy, childbirth and related medical conditions (Pregnancy Nondiscrimination Act of 1978) *** The Older Workers’ Benefit Protection Act of 1990 amended the ADEA to prohibit age discrimination in employment benefits and other matters **** Section 703(i) of Title VII of the 1964 Civil Rights Act specifically allows employers’ preferences for Indians on projects on or near reservations. The allowance is reinforced in regulations at 41 CFR 60, implementing E.O. 11246; 23 CFR 635.117 (d) and (e), implementing 23 U.S.C. 140 (d); and FTA’s EEO Circular 4704.1 implementing 49 U.S.C. 5332 (a). Indian employment preference is a political, not a racial preference.

2.8 AFFIRMATIVE ACTION

EEO programs have the objective of identifying and addressing under-representation and under-utilization in employment through “Affirmative Action.” Affirmative Action principles have been misinterpreted, undermined, treated as either sacrosanct or anathema, or assaulted as “reverse discrimination” Myths abound about Affirmative Action, especially the assertion that it requires employers to hire and promote unqualified applicants – a blatant falsehood. The charge is to not discriminate and to take action to overcome the lingering effects of historic, systemic, often institutionalized discrimination that members of a civil society allowed to persist for centuries. Affirmative Action requirements have provided grist for pundits since it was first proposed and the excoriation will probably continue until after 2050, when Whites are projected to become the largest minority in the Nation. Projections being what they are, that change in the character of the population will probably occur before then. Hispanics, who were expected to become the largest minority group in the Nation in 2020, achieved that milestone in February of 2009.

Although President Kennedy first mentioned Affirmative Action in EO 10925, addressing Federal contractors’ EEO responsibilities, President Johnson signed EO 11246, requiring EEO through Affirmative action by Federal Supply and Service and construction contractors and Federal-aid construction contractors, Affirmative Action concepts were more fully developed when Richard Nixon, John Shultz and Art Fletcher conceptualized “the Philadelphia Plan,” the prototypical “Hometown Plan” relied upon for years to ensure EEO in construction trades. The efforts by some members of President Reagan’s staff to repeal EO 11246 were thwarted by defenders and supporters of the concept in his administration, Members of Congress from both parties, Civil Rights organizations and corporate leaders.

Hide-bound regulations, while comfortable and familiar to practitioners, have not kept pace with new demographic and economic realities or changes already made in program emphasis or agency organizational structure. Out of fear of opening cans of worms, disrupting in-place and familiar processes, inertia, apathy, or overwork, needed adjustments to fine-tune existing regulations to increase their relevance, acceptance, and effectiveness have not been undertaken. Having to interpret obsolete parts of regulations puts compliance personnel on shaky ground and – rightly or wrongly - calls into question the relevance of remaining aspects of the requirements.

2.9. FEDERAL OVERSIGHT AND INVESTIGATIVE AGENCIES

Several statutes and Executive Orders empowered specific agencies to investigate matters, prosecute cases, promote and monitor initiatives, and/or provide leadership to and support for Federal contracting or funding agencies. The following sections outline the Civil Rights and

24 other responsibilities of the agencies most likely to be involved in matters related to Federal-aid contracts and the issues raised by the staff of the AKDOT&PF’s Civil Rights staff.

2.9.1. THE OFFICE OF MANAGEMENT AND BUDGET (OMB), OFFICE OF THE PRESIDENT

Among other major responsibilities, the staff of OMB is responsible for maintaining control of the type and amount of information collected and used by Federal agencies and provides leadership and guidance to heads of agencies on matters related to paperwork reduction, elimination, and regulatory reform. OMB is also responsible for minimizing paperwork burdens on contractors, State and local governments and citizens and ensuring the quality, utility, objectivity and integrity of information disseminated by Federal agencies.

2.9.2. THE CIVIL RIGHTS DIVISION OF THE U.S. DEPARTMENT OF JUSTICE (DOJ)

Created by the enactment of the Civil Rights Act of 1957, the Civil Rights Division of DOJ is responsible for providing leadership to and oversight of Federal agencies’ efforts to ensure compliance with Title VI and related nondiscrimination statutes. Through eleven Sections, the Division enforces Federal statutes prohibiting discrimination on the basis of race, color, sex, disability, religion, familial status and national origin in housing, education, employment, immigration, and voting rights. The Division also prosecutes criminal cases involving Civil Rights violations.

2.9.3. THE EQUAL EMPLOYMENT OPPORTUNITY COMMISSION (EEOC)

Title VII of the 1964 Civil Rights Act made discrimination in employment based on race, color, religion, sex, or national origin illegal. Title VII also established the EEOC to investigate and adjudicate complaints of employment discrimination. Later amendments gave EEOC responsibility to investigate complaints based on age and disability and expanded its authority over Federal, State, and local government employment in addition to private employers of fifteen (15) or more. By virtue of its contractual relationships, the AKDOT&PF has concurrent authority to investigate employment discrimination complaints filed against contractors, subcontractors, material suppliers, vendors, sub-recipients and the AKDOT&PF. And the EEOC may refer complaints to the Alaska State Commission for Human Rights, a “706” agency, which has jurisdiction for 240 days from the date of the alleged employment discrimination. The time available to complainants for filing in Federal courts was addressed by the U.S. Supreme Court in Molasco Corp. v. Silve, 447 U.S. 807 (1980).

Alaska passed the first State anti-discrimination statute in 1945 at the urging of Elizabeth Peretrovitch, a Tlingit leader, who fought for equal treatment in public accommodations. The current Alaska Human Rights statute prohibits discrimination in employment, in places of public 25 accommodation, in the practices of the State or its political subdivisions, in the sale, lease or rental of real property, and in credit and financing practices because of race, color, national origin, sex, or physical or mental disability. In employment and some other situations, it is also illegal to discriminate on the basis of age, marital status, changes in marital status, pregnancy or parenthood. The Human Rights Law also makes it illegal for an employer to retaliate against an employee for opposing any practice forbidden under the Human Rights Law, or because the person has filed a complaint, testified, or assisted in a proceeding under the Human Rights Law.

With DOJ and OFCCP, the EEOC published the Uniform Guidelines on Employee Selection Procedures (UGESP) and Affirmative Action Guidelines to assist employers to understand and apply concepts to meet EEO mandates. While Title VII applies to all employers of 15 or more in the United States, and the EEOC is the recognized authority in EEO policy and investigating complaints, the statute is not an authority for action by State DOTs, which have ample authority under agency-specific statutes and contracts to which they are party.

2.9.4. THE U.S. DEPARTMENT OF LABOR (USDOL)

The erstwhile Employment Standards Administration, formerly the largest agency in the USDOL, was eliminated in November of 2009. The agencies that comprised the ESA are now independent and report directly to the Secretary of Labor. Those most involved with matters addressed by this research are the Office of Federal Contract Compliance Programs, the Wage and Hour Division, and the Bureau of Apprenticeship and Training. The provisions of 23 USC 140 (a) require the Secretary of Labor “… (to…) render to the Secretary (of Transportation) such assistance and information as he (sic) shall deem necessary to carry out the equal employment opportunity program required hereunder.” The FHWA and the OFCCP, BAT, and the Women’s Bureau have collaborated on a series of research, education and promotional projects to increase both the employment of women in non-traditional jobs and the effectiveness of OJT programs.

2.9.4.a. OFFICE OF FEDERAL CONTRACT COMPLIANCE PROGRAMS (OFCCP)

In the Employment Standards Administration of the US Department of Labor, the OFCCP administers efforts related to EO11246 compliance and established employment goals for specific geographic areas.

Executive Order 11246, signed by President Lyndon Johnson September 24, 1965, created the Office of Federal Contract Compliance (OFCC). The EO required Federal departments and agencies to impose non-discrimination and affirmative action rules on all Federal contracts and federally- assisted construction projects. Later, on October 5, 1978, President Jimmy Carter consolidated all enforcement actions based on EO11246, as amended, under OFCCP.

Non-construction (service and supply) contractors with fifty (50) or more employees and Federal government contracts of $50,000 or more are required to develop and implement a written affirmative action program (AAP) for each establishment. The regulations define an AAP as a set of specific and results-oriented procedures to which a contractor commits itself to apply every good faith effort. The AAP is developed by the contractor (with technical assistance from OFCCP if requested) to assist the contractor in a self-audit of its workforce. The AAP is kept on file and carried out by the contractor. It is submitted to OFCCP only if the agency requests it for the purpose of conducting a compliance review.

The AAP identifies those areas, if any, in the contractor’s workforce where under-utilization or underrepresentation of women and/or minorities exists. The regulations at 41 CFR 60-2.11 (b) define under-utilization as having fewer minorities or women having the requisite skills in a particular job group than would reasonably be expected by their availability in a reasonable recruitment area surrounding the facility. Based on the utilization analyses and the availability of qualified individuals, the contractor establishes goals to reduce or overcome the under- utilization. Good faith efforts may include expanded efforts in outreach, recruitment, training and other activities to increase the pool of qualified minorities and females. Selection decisions are required to be made on a non-discriminatory basis.

The OFCCP established a different approach to affirmative action for the construction industry due to the fluid and temporary nature of the construction workforce. For the construction industry, OFCCP, rather than a contractor, establishes goals and specifies affirmative action which must be undertaken by Federal and federally assisted construction contractors. OFCCP issued a national goal for women of six point nine (6.9) percent, which was extended indefinitely in 1980 and remains in effect today. Construction contractors are not required to develop written affirmative action programs. The regulations enumerate the good faith steps construction contractors must take to increase the utilization of minorities and women in the skilled trades where under-utilization exists.

The OFCCP staff also enforces Section 503 of the Rehabilitation Act of 1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974, both as amended, on Federal contracts.

Although OFCCP guards its authority to determine compliance with the EO, recipients have the obligation, inherent in their role as parties to contracts, to determine and obtain compliance with all terms and conditions of contracts, regardless of their source. State compliance personnel have the authority to base their compliance determinations on any term or condition of a contract, even if its source is the EO. The determination would be based on compliance or non-compliance with the contract.

2.9.4.b. THE WAGE AND HOUR DIVISION (WHD)

Among other responsibilities, the Wage and Hour Division sets Davis-Bacon and Service Contract Act wage determinations. The Wage and Hour Division may set contract-specific wage rates at the request of the involved Federal funding agency or the State administering the contract. Although Davis-Bacon wage rates have been published for shipbuilding, the rates are currently limited in applicability only to work funded by several Federal defense and research agencies. The WHD’s current policy is that it will not set D-B wage rates for vessel construction unless the site of the construction is known at the time bids are requested, a practical impossibility in a competitive bidding arena. Current D-B wage rates, including some applicable to shipyards, are available online at wageratesonline.gov.

2.9.4.c. THE BUREAU OF APPRENTICESHIP AND TRAINING (BAT)

The BAT registers and promotes apprenticeship in over 1,000 crafts (union and open-shop) in a variety of industries. The BAT works with and through State departments of labor, including the Alaska Department of Labor and Workforce Development, and also supports reliance on OJT programs to assist displaced workers in their efforts to re-enter the workforce. Registered apprenticeship programs allow participants to earn wages while learning through on-the-job learning and off-site related classroom instruction in the technical aspects of a skilled occupation. Although traditional apprenticeship programs require participants to complete a specified number of hours of training, industries are allowing competency-based programs in which mastery of key skills can be demonstrated, allowing motivated learners to progress at their own pace. Certifications of completion earned through registered apprenticeship programs are “portable’ and recognized – nation-wide.

2.9.5. THE U.S. COMMISSION ON CIVIL RIGHTS (USCCR)

The USCCR is a bi-partisan agency tasked with providing advice to the President and Members of Congress on Civil Rights matters. The Commission investigates complaints and monitors and reviews Federal Civil Rights programs. The Commission may call witnesses and hold hearings to obtain the information needed to form opinions. The Commission issues reports of findings, including recommendations for improvements. When deficiencies are found in Civil Rights program management agency heads are held accountable for making necessary corrections.

2.10. AKDOT&PF’s FERRY PROJECTS - 2002-2009

Information provided by the Civil Rights Staff of AKDOT&PF allowed bidding and prime and subcontract awards patterns to be analyzed, including those awarded to DBEs. The information reviewed did not reflect whether any of the primes or subs was subjected to Civil Rights compliance reviews or the results of such reviews.

Between 2002 and 2009, twenty-three (23) bidders from fourteen (14) cities in six (6) states, including Alaska, bid on twenty-seven (27) ferry and ferry facilities contracts advertized by AKDOT&PF (see Table 5 below). Ten (10) of the bidders or 43.5 percent, were from six (6) cities in Alaska and thirteen or 56.5 percent were from five (5) other states. Only three (3) bidders (13 percent) were unsuccessful, while the remaining twenty (20) contractors won twenty seven (27) contracts, including the thirteen (13) or 48.2 percent, for vessel construction.

Table 5 - States and Cities Where the Facilities of Bidders on AKDOT &PF’s Ferry and Ferry Facilities Projects were Located - 2002-2009 Won AMHS Contract(s) State City Bidders No Yes # Vessel Contracts Alaska Ship & Drydock • 2 2 Ketchikan Channel Electric • 1 - Pool Engineering • 1 - Secon, Inc. • 3 - Alaska Anchorage Haakenson Electric • 1 - Pruhs Corp. • 1 - Douglas North Pacific Erectors • 1 - Juneau Admiralty Construction, Inc. • 1 - Petersburg Tamico, Inc. • 2 - Seward Seward Ships & Drydock • - - - American Civil Contractors • 1 - Seattle Lake Union Drydock • 1 1 Todd Pacific Shipyards • 2 2 Western Marine* • 1 - Washington Bellingham Fairhaven Shipyard • - - - Strider Construction Co., Inc. • 1 - Anacortes Dakota Creek Industries • 1 1 Bremerton Puglia Engineering • 2 2 Oregon Portland Cascade General • 2 2 Vigor Marine* • 1 1 Connecticut Bridgeport Direcktor Shipyards • 1 1 Louisiana Morgan City Conrad Morgan City • 1 1 Mississippi Moss Point V.T. Halter • - - - TOTALS 6 14 23 3 20 27 13 * Vigor, LLC now owns and operates Vigor Marine, including Todd Pacific and Cascade General

Seven (7) of the bidders were located in Washington and two (2) in Oregon. Six (6) ferry contracts were won by four (4) firms based in Washington; three (3) were won by two (2) firms based in Oregon, and one (1) each by firms in Louisiana and Connecticut (Figure 3 on page 80).

Because of the dearth of shipbuilding facilities in Alaska, only two (2) or 15.4 percent of ferry projects advertized during the period were won by an Alaska-based firm, Alaska Ship and Drydock. Out-of-State firms won eleven (11) or 84.6 percent of the ferry contracts awarded between 2002 and 2009.

Because some of the bidders had multiple facilities, including offices and/or shipyards not involved in either the bidding or work on projects won in Alaska, the 23 bidders actually had facilities in 25 cities in 11 different states. Four bidders each had 3 facilities in three different States. One bidder had three separate facilities in Mississippi. One bidder had facilities in New York, Connecticut and Florida. Another had two facilities in Louisiana and another facility in Texas. One bidder had offices and/or facilities in both Alaska and Washington, and another had offices in California and Colorado. A map depicting the states in which bidders had facilities is in Figure 4 on page 79. Since 2010, bidders on the three projects advertized have had facilities in only two (2) States other than Alaska; Washington and Oregon (Figure 5 on page 80). Each city from which bids were received has different DBE goals, unemployment rates, which may affect the number of OJT slot goals, and minority employment goals. The nationwide goal for employing women in construction is 6.9 percent.

The twenty seven (27) contracts awarded by AKDOT&PF to construct or refurbish ferries or ferry facilities between February 2002, and September, 2009, AKDOT&PF had a total value of $221,865,151 (Table 6, below). The contracts were won by twenty (20) prime contractors.

Table 6. Summary of AKDOT&PF’s Ferry and Ferry Facilities Contracting and Subcontracting 2002-2009. Primes’ # of Prime # of Contracts % Cumulative Value % of # of Sub- DBE Facilities Contractors Won of Contracts Won AKDOT&PF contracts Subs located in Ferry Funds Awarded Alaska 9 13 48.2 $46,538,606 21.0 55 15 Washington 7 9 33.3 $77,287,384 34.8 75 20 Oregon 2 3 11.1 $20,541,340 9.3 5 1 Connecticut 1 1 3.7 $ 67,980,000 30.6 7 - Louisiana 1 1 3.7 $ 9,547,821 4.3 6 - TOTAL 20 27 100 $221,865,151 100 148 36 Nine (9) primes with facilities in Alaska received thirteen (13) or 48.2 percent of the contracts awarded, with a cumulative value of $46,538,606, or 21 percent of the total funds awarded for contracts during the period.

Thirteen (13), or 48.2 percent of the twenty-seven (27) contracts awarded were for building, modifying or repairing ferries. Of the nine (9) contractors who won the 13 ferry contracts, four contractors each won 2 contracts, and the remaining 5, each won one contract (see Table 7 on page 31).

Table 7. PRIME CONTRACTORS ON AKDOT&PF’s FERRY AND RELATED CONTRACTS - 2/14/02 – 9/6/09

CONTRACTS VALUE FACILITIES ‘ LOCATIONS TOTAL # OF SUB- # OF FERRIES

WON CONTRACTORS DBE BUILT OR CITY STATE PRIMES SUBS MODIFIED

Alaska Ship & Drydock 2 $9,334,275 5 2 2 Channel Electric 1 $171,000 Ketchikan, 1 - -

Pool Engineering 1 $165,460 1 1 - Alaska Secon, Inc. 3 $25,688,251 15 3 - Haakenson Electric 1 $3,702,445 Anchorage 4 1 - Pruhs Corp. 1 $2,887,864 11 6 - North Pacific Erectors 1 $1,799,000 Douglas 12 2 - Admiralty Construction 1 $64,345 Juneau, 3 - - Tamico, Inc. 2 $2,725,966 Petersburg 3 = - American Civil Cnstrctrs 1 $7,097,452 19 6 - Lake Union Drydock 1 $3,401,566 5 1 1 Seattle Todd Pacific Shipyard 2 $11,963,980 10 1 2 Washington Western Marine 1 $13,890,742 19 3 - Dakota Creek Industries 1 $16,940,983 Anacortes 2 2 1

Strider Construction 1 $10,869,750 Bellingham, 11 4 -

Puglia Engineering 2 $13,092,911 Bremerton 9 3 2 Cascade General 2 $12,825,797 Oregon 4 1 2 Vigor Marine 1 $7,715,543 Portland 1 - 1 Robert E. Derecktor 1 $67,980,000 Bridgeport Connecticut 7 - 1 Conrad Shipyard, LLC 1 $9, 547,821 Morgan City Louisiana 6 - 1

TOTALS 20 27 $221,865,151 12 5 148 36 13

2.11. SUBCONTRACTS AWARDED TO DBES – 2002-2009

The successful primes awarded a total of 148 subcontracts, of which thirty-six (36), or 24.3 percent, were awarded to nineteen (19) DBEs. Three (3) DBEs received fourteen (14) of the subcontracts, receiving three (3}, five (5) and six (6) subcontracts respectively. Four (4) DBEs received two (2) subcontracts each and twelve (12) of the DBEs were awarded one (1) subcontract each (see Table 8 on page 33). Neither the value of the original subcontracts, the value of those awarded to DBEs, nor the value of any additional costs due to change orders could be determined from the reports received.

Five (5) prime contractors holding Six (6) contracts ranging in value from $64,345 to $67,980,000, with a cumulative value of $100,489,132, or thirty-eight point five (38.5) percent of the value of all of the projects awarded during the period, reported no awards of subcontracts to DBE’s. If that figure is reduced by the two (2) smallest prime contracts (valued at $171,000 and $64,345) then three (3) contracts with an average value of $33,417,929 each were completed with no awards to DBE subcontractors.

Of nineteen (19) DBEs holding ferry and ferry terminal construction subcontracts from 2002 to 2009, fourteen (14) were on States’ DBE certification registries. Eleven (11) were listed as certified DBEs by AKDOT&PF in March, 2010, two (2) were certified by Oregon, and one (1) was certified by Washington. The other five (5) may either not have renewed their certifications, lost them for cause, or been certified in States other than Alaska, Washington, Oregon or the other states in which primes’ facilities were located.

The 19 DBEs had home bases in nine (9) different cities in four (4) different States. Nine (9) were located in Anchorage, AK, two (2) in Seattle, WA, and one (1) each in Big Lake, Kenai, Anchor Point, and Juneau, AK, Portland, OR, and Petaluma, CA.

Twenty-two (22) subcontracts, or sixty-two point eight (62.8) percent of subcontracts awarded, went to DBEs with offices in Alaska. Fourteen (14) subcontracts or thirty-eight point nine (38.9) percent of those reported were awarded to five (5) firms with facilities in other states. All of the out-of-state DBEs got work on ferry projects, while Alaska-based DBEs worked only on building or repairing ferry facilities.

Table 8. DBE SUBCONTRACTORS ON FERRY AND FERRY FACILITIES CONTRACTS 2002-2009

DBE Firms’ Number of CertifieCertifiedd as of GFE Required by Ferry Subcontractors Locations Subcontracts 3/10 AKDOT&PF Sub? CITY STATE Received AK OR WA Yes No N/A Yes No Acme Fence 5 O 5 Albright Commercial 2 O O 2 Floors Amtec, Inc. 1 - - - O 1 Arctic Pipe & Anchorage 1 - - - O 1 Materials Bobby Jack Trucking 1 - - - O 1 Midnight Sun Svcs. 2 - - - O 2 Pena Trucking AK 1 O O 1 P. Rock Corp. 3 O O 3 Skyline Electric 1 O O 1 Tutka, LLC 1 O O 1 Twin Peaks Anchor 1 O O 1 Point Jolt Construction Big Lake 1 O O 1 and Traffic Maintenance Ever Electric Juneau 1 O O 1 Redoubt Industries Kenai 1 O O 1 Fryer-Knowles, Inc. 1 O O 1 Guido Perla & Seattle 6 O O O 6 Assoc., Inc. Theriault Industries, Bothell WA 4 O 4 Inc. Bay Decking Co., Inc. Petaluma CA 1 O O 1 All Star Cleaning and Portland OR 2 O O 2 Preservation TOTALS 19 9 4 36 11 2 1 9 2 8 14 22

One DBE firm won six (6) naval architecture subcontracts with different firms. The naval architect has been in business for over thirty (30) years and his firm has won major shipbuilding design awards, including one (1) for a ferry built by Alaska Ship and Drydock for service in Alaska. That the firm is so large and has won so many contracts with firms doing business for Alaska and others, and is not certified as a DBE in its home State raises serious concerns about

33 the legitimacy of the firm’s DBE certification and the validity of counting its contracts against either the State’s goal attainment or that of any shipbuilder using its services.

The AKDOT&PF’s DBE program was affected by the ruling of the Ninth Circuit Court of appeals in the case of Western States Paving Co. v. the State of Washington DOT, which required that, in the absence of clear evidence of discrimination sufficient to warrant race-conscious measures, the State must rely on a wholly race-neutral approach. The AKDOT&PF’s including a “race-neutral goal” of “zero” may well have given winning primes the notion that they were either allowed to award no subcontracts to DBEs or were required to ensure that no DBEs were given opportunities on contracts containing the misleading language.

2.12. REVIEW OF ALASKA’S DBE DIRECTORY

Of the 211 firms currently certified as DBEs by AKDOT&PF, only four (4), or 0.2 percent, indicated they are involved in “naval/marine” endeavors. However, over 104, or 49.3 percent, indicated they have skill sets and experience directly relatable to either shipbuilding or ferry terminal/facility construction. At least one hundred fifty (150) listed firms had skills that could qualify them to work on ferry terminal facilities contracts or projects providing access to them. Sixty one (61) other firms were identified as having skills that, with interest, refinement, and opportunity, could be used on ferry construction and refurbishment contracts. DBEs in no fewer than 21 work categories could compete for work on ferries and in no fewer than 43 categories, could compete for work on ferry terminal facilities projects. Of the four (4) firms certified in the areas of marine construction, only two (2) received ferry or ferry facilities subcontracts between 2002 and 2009.

Although the data reviewed was limited and the absence of subcontract values would distort the majority of inferences that might be drawn from their interpretation, several curious anomalies presented themselves. The majority of AMHS’s ferry and ferry terminal facility related subcontracts reported as won by DBEs (twenty-eight (28) or 77.8 percent) were won by firms located in and/or certified as DBEs by Alaska. One firm, the most active DBE, was certified by AKDOT&PF and located in Seattle, but not certified by its home State. No DBE certified by and operating only in Alaska received any subcontracts to work on a ferry construction or refurbishment project between 2002 and 2009, while all of the out-of-State DBEs worked on ferries.

The Alaska-based DBEs numbered 169 of the 211 total certified DBEs. Forty-two (42) or 19.9 percent of the 211 firms on the registry operated from their homes or offices in thirty-four (34) cities in eighteen (18) states other than Alaska. There was no indication of whether any of them were certified in their home states. The out-of-State DBEs were registered in the following work categories: design, computer imaging, surveying, mapping, graphics, suppliers,

34 insurance, management and engineering consulting, telecommunications, marketing/advertising, public relations, environmental assessments, and planning.

The AKDOT&PF’s directory is parsed alphabetically by firm name (211 firms with interests or experience in 4,492 different work categories); by the North American Industry Classification System (NAICS) codes (the 211 firms reportedly working in 563 classifications); by work category (the 211 firms looking for work in 1,418 categories, although firms are listed in more than one category); and, by e-mail address, DBE/WBE status, or other status. With the exception of Louisiana DOTD reporting no DBEs working in Louisiana on ferry contracts and no out-of-State contracts, the other States’ responses did not provide the requested information. In Alaska, the program in which the DBE Directory is maintained should be able to be manipulated to extract lists of DBEs in a reasonable area around the location of planned ferry terminal facilities. Bidders are required to identify and solicit quotes from certified DBEs and other subcontractors near their facilities, in whatever State they are located. Primes’ subcontracting opportunities could be broadcast by electronic media so DBEs could position themselves to take advantage of them in the event their bid is accepted by the low bidder

The real impacts of the DBE program could be better determined if monitoring reports contained information on the value of work won by DBEs and their actual compensation.

2.13. SIMILARLY SITUATED STATES

The AKDOT&PF was especially interested in how other states dealt with contracts awarded to out-of-State firms doing ferry construction outside of the State administering the contract. Civil Rights program managers in similarly situated states did not respond to the first request for input on the bid and contract specifications they used. After prodding by the AKDOT&PF’s Civil Rights Program Manager the Civil Rights managers of two states that have received Ferry Boat Discretionary funding responded that their states had not received Federal-aid for ferries, when, in fact, they had. The information gaps were probably the reasons response rates were so low.

Subsequently, and well after the initial and follow-up requests for input went unanswered, a phone interview of a Civil Rights Program Manager and a member of the Legal staff of the same State, who were contacted through the Transportation Research Board’s Ferry Committee, admitted that they had the same problems as Alaska and included both FTA’s and FHWA’s provisions together with OFCCP’s requirements in jointly funded contracts. They were not aware of contractors ever raising any questions or concerns. The results of interviews are summarized in Appendix 3 on page 87. The effort was shifted to analyzing current requirements to identify options available under currently applicable Federal statutes and regulations.

Bid and contract specifications on current projects in several states and a Bridge, Highway and Transportation District, and a city receiving FTA funds were available on line. The Golden Gate Bridge, Highway and Transportation District used provisions that mentioned Nondiscrimination, EEO and DBE. In the EEO section, Title VII is mentioned, as is 49 USC 5332. Each prohibited factor is explained, the requirement to include the provision in each subcontract is clearly stated, and the “Diversity Program for small businesses and DBEs” is explored in great detail. Hawaii made plans, specifications, and contract forms available to bidders on a compact disc. Hawaii’s Notice to Bidders on an FTA funded ferry project mentions DOT’s Title VI regulations, that the contractor will be awarded to the lowest bidder without discrimination based on the listed prohibited factors, “and sex, as directed by 23 CFR 200 (FHWA’s Title VI regulation).

The search for information about contractors with facilities in other states found mention on the homepage of Todd Pacific Shipyards, a shipbuilder in Washington State about the benefit they received from WASHDOT limiting bidding on ferries to in-state contractors, a violation of Title 23 if the statute is applied to procurements using Federal-aid highway funds. Although the specific statute was not found, an article written about it was discovered and the author verified that the State statute that geographically limited competition did exist and was still in effect.

The only request for bids on North Carolina DOT’s site was for operating a ferry, and was not instructive, except its reliance on bidders’ certifications for all manner of compliance-related matters. The other State and the District, both of which administered FTA ferry funds, either incorporated FTA’s Civil Rights requirements in contracts by reference, or crafted abbreviated versions to “re-delegate” (sic) the EEO requirements outlined in UMTA/FTA Circular C-4704.1.

Some recipients streamlined the language and reduced the volume of printed pages in contract and bid specifications. In several instances the condensed versions clearly communicated expectations, while in others, either erroneous information was included, just the legal citations of applicable authorities were provided, or the language was confusing. One recipient misstated the names of the involved funding and oversight agencies, and the District included excruciating details about how DBE credit would be counted and how compliance would be determined. The information included in the bid and contract documents would serve well in a course on managing the DBE program for the recipient’s staff.

Another recipient included the citations of applicable Civil Rights statutes and regulations, but did not specify what was expected. The same recipient misstated the names of both the funding and oversight agencies. Several FTA recipients had either misinterpreted or misapplied requirements.

Other States with similar shipbuilding needs have encountered the same difficulties as those targeted by AKDOT&PF in the RFP. The experiences of other States was instructive in that it demonstrated the impacts of unmonitored and haphazardly applied procedures, which had

36 duplications of requirements in bid and contract specifications, which cost time and money, but which, like the majority of “boiler plate” specifications – go unread.

The State of Alaska contracts for shipbuilding are usually with providers located in other States. Basic nondiscrimination, EEO, OJT, and DBE provisions are required to be incorporated in contracts. Applying Alaska-specific goals to projects in other States in which different employment and DBE conditions exist would be problematic, at best. Employment, training and DBE goals must address opportunities in a reasonable recruitment or market area surrounding the involved project site or shipyard. While goal attainment on out-of-State contracts awarded by AKDOT&PF counts against Alaska’s commitments, the goals in such contracts need to reflect conditions and capabilities in the area surrounding the involved facility or facilities. The majority of ancillary benefits on contracts awarded to out-of-State contractors accrue to the contractor, subcontractors, material suppliers, vendors, and employees in states in which the work is done. The states in which such facilities are located also benefit in ways including, but not limited to: income and business taxes, business license fees, sales taxes, reduced unemployment, and increased small/DBE business opportunities. While counting against Alaska’s DBE goal attainment, such awards do not directly benefit Alaskans whose unemployment rates remain high and where training and business opportunities are severely delimited by awards of ferry construction contracts to firms operating shipyards in other states.

2.14. RELATED PROBLEMS

The review of applicable authorities and communications with AKDOT&PF’s Civil Rights Office Manager and others confirmed the existence of other problems related to those initially identified. Exploring the new found issues brought to light other matters worthy of attention by AKDOT&PF and involved Federal agencies. They are listed below. 1. Alaska and its coastline are HUGE. At the risk of being accused of having a firm grip on the obvious, it is worth noting that approximately half of all the coastline of the Nation is formed by the shores of Alaska (see Figure 6 on page 83). Many communities are not connected by a road network and rely on the Alaska Marine Highway System (AMHS) and/or rural air service by small aircraft for provisions, fuel, and access to medical treatment. The need to provide reliable and safe transportation for freight, vehicles, and travelers to communities on islands and other geographically isolated towns and villages required AKDOT&PF to establish the AMHS. 2. Civil Rights authorities are complex and geometric increases in targeted and protected groups since the programs’ inceptions increased Federal agencies’ and states’ responsibilities to monitor, measure, and ensure compliance, with no concomitant increases in either staff or resources. 3. While Civil Rights requirements have the same or similar objectives, the statutory and regulatory thickets have grown more and more dense over the years and different agencies in the same department go about achieving similar objectives in different ways.

4. The real and perceived duplication, overlap, and conflicts in approaches causes confusion and affects the willingness of employers to involve themselves in costly, and ultimately, non- productive efforts, while eroding the confidence of State personnel charged with determining and, where necessary, obtaining compliance with provisions, some of which are obsolete. 5. Nondiscrimination, EO and EEO provisions are required to be physically included in all “non-exempt” prime and subcontracts by FHWA, and it is done - because it is required - but the usefulness of the practice is questionable and the cumulative costs associated with the requirement are incalculable, especially in light of recent and evolving technological advances. 6. FTA requires recipients to “re-delegate” (sic) the requirements of its EEO circular to apply to contractors and subcontractors and allows recipients to make adjustments to rely on State statutes to meet contract specs, resulting in a variety of approaches by different recipients. The primary focus of the FTA’s EEO Circular is recipients’ internal EEO programs and FTA monitoring of their efforts. 7. Parts of implementing regulations are obsolete or irrelevant due to initiatives having been eliminated, changes in funding agencies’ organizational structures, and current and projected demographic and economic realities. 8. A ferry or ferry facility project may be funded by either FTA or FHWA or both FTA and FHWA. 9. The vast majority of Alaska’s ferry construction and refurbishment contracts [eleven (11) of thirteen (13) or eighty-four point six (84.6) percent between 2002 and 2009] were won by firms with facilities in other States, some as close as Washington and Oregon, and others as far away as Louisiana and Connecticut. Prior to 2002, several contracts were won by firms with facilities in Michigan and Wisconsin on the Great Lakes. 10. The geographical dispersion of ferry construction shipyards is problematic because much of what is required to meet federally assisted construction requirements related to Civil Rights program compliance is dictated by conditions in the State or county where the construction occurs. For example DBE utilization goals for projects are based on certified DBEs with the requisite skills and experience in the area surrounding the project and each State has different DBE goals. Minority employment goals were based on availability in Standard Metropolitan Statistical Ares (SMSAs) or “Economic Areas;” and, goals for the employment of women are six point nine (6.9) percent, nationwide. Having been set in 1988, the goals for minorities and women are obsolete and demographic shifts since then have been significant. 11. Since 2009, Alaska has received bids from bidders in only two (2) states other than Alaska. 12. For construction contracts, the OFCCP established minority employment goals of eight point seven (8.7) percent in Anchorage and fifteen point one (15.1) percent in the “Non SMSA Counties” of Alaska. Each location of out-of-State bidders’ facilities has different minority employment and DBE goals. 13. The OFCCP does not consider ferry construction as “construction,” and if more than fifty (50) personnel are employed by a contractor, the contractor is required to complete a

38 workforce analysis and develop a written Affirmative Action Plan according to OFCCP’s guidelines at 41 CFR 60-2, as amended. 14. Many bidders hold major Direct Federal shipbuilding, repair or modification contracts with the US Navy, the Army Corps of Engineers, the Coast Guard, the National Oceanic and Atmospheric Administration, the Military Sealift Command, and others. Each such contract contains the provisions of EO 11246, as amended, implemented by the provisions of 41 CFR 60- 2, which require them to develop and implement written Affirmative Action Plans for each facility they operate. 15. Unless there has been a recent policy change from that outlined in the “Ferry Boat Primer,” issued April 17, 2000, by former FHWA official, Dwight Horne, the Wage and Hour Division will not set Davis-Bacon (D-B) wage rates on Ferry construction projects unless the ferry or ferry facility is on a Federal-aid highway and the location of the facility doing the work is known when bids are requested, a practical impossibility. The Wage and Hour Administration sets D- B wage rates for ferry and other boat construction for the U.S. Army Corps of Engineers and can set standards for other projects at the request of the Federal funding agency or the administering State. Similar to the DBE Utilization Goal identified in Problem #10, because AKDOT&PF’s ferry contracts include bidders from other States, identifying the exact location of a winning bidder’s facility prior to bid opening, except on Design-Build contracts, is impossible. Having used the Design-build option on one ferry contract, the experience was sufficient to dampen the interest of AMHS management in employing that approach in future AMHS contracts. 16. Affirmative Action principles have been misinterpreted, undermined, assaulted as “reverse discrimination” and treated as either sacrosanct or anathema. Hide-bound regulations, while comfortable and familiar to practitioners, have not kept pace with new demographic and economic realities or changes already made in program emphasis or agency organizational structure. 17. AKDOT&PF’s Civil Rights unit has developed a series of seventeen (17) forms to implement the State’s Civil Rights requirements in addition to the Annual Construction Contractor’s EEO Report (1391), that AKDOT&PF requires monthly, the Manpower Utilization Report, which OFCCP requires monthly only after a finding of non-compliance, and EEOC’s annual EEO-1 Report. The representative of one contractor stated that after working on one AMHS contract, the Civil Rights program’s administrative burden was sufficient to support the decision to not bid on future AMHS projects. 18. The AKDOT&PF’s DBE program was affected by the ruling of the Ninth Circuit Court of Appeals in the case of Western States Paving Co. v. the State of Washington DOT, which required that, in the absence of clear evidence of discrimination sufficient to warrant race- conscious measures, the State must rely on a wholly race-neutral approach. The AKDOT&PF’s including a “race-neutral goal” of “zero” may well have given winning primes the notion that they were either allowed to award no subcontracts to DBEs or were required to ensure that no DBEs were given opportunities on contracts containing the misleading language.

19. While Alaska may get reliable vessels built, modified, or repaired in other states, the states in which successful bidders’ ferry construction facilities are located receive the benefits that usually accrue to a recipient State. The most obvious benefits include: reduced unemployment; collecting business, income and sales taxes, and license and permit fees; and, increased employment, training and small business opportunities. Local DBE and other subcontractors are utilized and local residents receive the training and employment.

CHAPTER 3 - INTERPRETATION, APPRAISAL AND APPLICATIONS

The effort allowed long-ignored problems to be scrutinized and more accurately articulated. Interest has been generated in the DBE community and with TRB’s Ferry Committee. Much of what has been learned can be applied to the efforts of the Naval Shipbuilding Research Program’s Crosscutting Issues Committee, which is addressing projected shortfalls in skilled and experienced workers in Defense focused shipyards.

Prototypes have been developed for review and acceptance by AKDOT&PF and coordination with funding agencies before formal submission as a pilot project. Whichever approach is selected, redesigning the compliance review and determination processes appears in order. Any requirement without a clear link confirmed between its completion and Civil Rights programs’ objectives, needs to be targeted for elimination.

Several alternative approaches have been identified that have “charm,” any of which can be considered separately or in combination:

(1) Consider applying the current Alaska Human Rights Law, AS 18.80, which is at least as extensive Federal Civil Rights mandates. Pursuant to FTA Circular 4220.1F, request that the State statute be relied upon in a set of combined, coordinated, and simplified bid and contract specifications. (2) Request a waiver or exemption from FHWA to allow abbreviated, consolidated, simpler versions of Nondiscrimination, EO, and EEO provisions to be incorporated in Prime and sub-contracts (FTA currently allows, even promotes reliance on State requirements, while FHWA requires the form 1273 to be physically included in all bids, contracts and subcontracts). (3) Communicate the expectation to not discriminate and provide EO and EEO in the simplest and most effective manner. And, develop, provide and update training and briefing modules for each program for which contractors are responsible to assist them in meeting their obligations. (4) Obtain agreement to combine and streamline requirements of both funding agencies into a single set of documents (FHWA’s current Required Provisions (in FHWA Form 1273) melded the requirements of EO 11246 and 23 USC 140).

(5) Obtain funding agencies’ approval to allow bidders at each tier to certify their compliance with Nondiscrimination and EEO provisions, combined with focused training, promotional, support, oversight, and compliance efforts. (6) Because the winning bidder is unknown before bids are opened, it is impossible to set required employment, DBE, OJT, goals or applicable D-B wage rates in the bid documents because the State where the construction will occur is unknown (Federal- aid contracts must be bid competitively without regard to geographic preferences). Because the availability of DBE firms varies from State to State, DBE Utilization Goals applicable to each state from which bidders are likely to come could be specified in an addendum to the bid solicitation or require that the applicable State-specific goal be inserted in the bid by each bidder to be considered responsive. The submitted goal can be verified by AKDOT&PF staff after the apparent low, responsible, responsive bidder is selected. (7) Adopt an abbreviated, alternative specification such as Alternative #1 in Appendix 9 on page 101 for consideration by funding agencies as a “pilot,” augmented by online availability of verbatim required provisions that could be incorporated by reference, the results of which can be closely monitored and its effects assessed; and/or the more simplified approach in Alternative # 2 in Appendix 10 on page 103, which specifies expectations and provides useful advice, rather than repeating a litany of statutory and regulatory requirements. (8) Set a 10 percent ratio of apprentices to journeymen to ensure consistent supervision, safety, adequate training opportunities, and continuity of employment. (Appendix 11 on page 106). The 15 percent goal in the current Special Notice is 50 percent higher than the standard 10 percent in model contractor-union agreements. Consideration should also be given to setting a goal for new hires as a percentage of those in training positions and to funding travel and per diem for trainees address high unemployment rates in certain areas. The recommended web site in the current Notice indicates that Administrative Order 226 has been repealed, indicating the need for updating. (9) In keeping with the AKDOT&PF practice of employing “Special Notices,” employing a notice along the lines of that in Appendix 12 on page 107, outlining DBE responsibilities, or the alternative in Appendix 13 on page 108, which establishes a framework for communicating goals for DBE, minority and female employment, and OJT could be considered. (10) Knowing the cities from which previous bids were received, either AKDOT&PF or a funding agency can request the Wage & Hour Division to set D-B wage rates for shipbuilding for each such city. Either the list of the cities and applicable D-B wage rates could be included as a voluminous addendum to bid documents, with only the applicable rates included in the contract once the low, responsive, responsible bidder is

42 selected. Or, bidders could be referred to electronically available versions of wage rates, with directions to download, consider and include applicable wage rates in their respective bids. Firms with multiple facilities in other cities or states would have to pay the prevailing wage rate(s) applicable at any facility in which piece work related to a contract is done. Current D-B wage rates, including some applicable to shipyards, are available online at wageratesonline.gov. (11) Recent certified payrolls can be submitted with Alaska requests to the Wage and Hour Division for D-B wage rates to be established where they don’t exist. Many of the skills used in ferry construction and repair are the same as those used in building and heavy construction, but others, as stated earlier, are unique to shipbuilding. (12) Initiate discussions with funding agencies for one to serve as “Lead” or “prime interest” agency on ferry construction projects, based on their respective funding levels (FHWA has established guidance on transfers of funds to FTA. When such transfers are made, FTA’s rules and guidance apply to the funds). While a “lead” agency is usually the one providing the larger share of funds, for convenience, FHWA could be requested to transfer funds to FTA and the proposed approaches used by AKDOT&PF on AMHS projects in line with FTAs stated policy to defer to States. Since 1998, FHWA has transferred $26,802,848 in Ferry Boat discretionary funds to FTA. (13) Explore with FTA the feasibility of establishing a definition of convenience for ferry constructors as “Transit Vehicle Manufacturers,” allowing FTA to approve and monitor DBE plans. Adopting this approach has implications for EEO compliance also, since OFCCP considers shipyards as manufacturing facilities and requires each such facility to develop and implement written affirmative action plans. (14) Shift from “technical” to substantive compliance, working in partnership with employers to ensure that nondiscrimination and real training, contracting opportunities, and EEO are provided, an approach which is long overdue. (13) On “Race-Neutral” contracts, instead of stating the DBE goal as “Zero,” consider a statement that: “while no goal is specified, the prime contractor is expected to ensure nondiscrimination in all of its programs and activities, and DBE’s are required to be provided Equal Opportunity to bid on subcontracts.” Compliance Reviews considering the manner in which subcontracts have been awarded and patterns of awards on all contracts could ascertain whether patterns or practices of discrimination exist in subcontracting procedures or awards. And, (14) Review additional requirements developed by AKDOT&PF staff members to implement Federal requirements to assess their effectiveness and determine whether any can be reduced or eliminated without negatively affecting the ability to assess or determine compliance.

CHAPTER 4 - CONCLUSIONS AND SUGGESTED RESEARCH

4.1 CONCLUSIONS

Organizations exist to solve problems and most are proficient at doing so. The biggest barrier to effective problem resolution is that organizations on auto pilot do not recognize or admit that a situation is problematic, so the problems are not addressed and they fester.

Before the issues addressed by this project were raised by the staff of AKDOT&PF’s Civil Rights staff, no complaints, questions, requests for clarification, or concerns had been raised with Federal funding agencies, minority contractors’ associations, the American Association of State Highway and Transportation Officials, the Shipbuilders’ Council of America, or at meetings of the Ferry Committee of the Transportation Research Board.

The predicaments faced by the Alaska Department of Transportation and Public Facilities (AKDOT &PF) and other similarly situated State transportation agencies receiving funds from several Federal sources for ferry projects warrants focused attention and effective action.

Civil Rights related requirements and expectations can be communicated more simply and effectively to bidders and contractors. In addition to the general Nondiscrimination, EO and EEO expectations enunciated in the options in Appendices 9 and 10, the templates in both of those options allow the State or bidders to insert applicable goals, which can be verified by the AKDOT&PF’s Civil Rights staff. Appendix 11 offers a recommendation to slightly modify the existing OJT Special Notice. Appendix 12 provides a Special Notice in line with Option (13), above, and recommends a slight change in language to address court ordered limitations on DBE goal setting. Appendix 13 provides a DRAFT SPECIAL NOTICE for consideration containing simplified language and a framework advising bidders and contractors of DBE, minority and female employment, and OJT goals. The draft notice in Appendix 13 contains a matrix specifying the minority and female employment goals for all but one city. The cities are those in which bidders on AKOT&PF projects awarded between 2002 and 2010 either had offices or operated facilities. When employment goals were established, the OFCCP did not set minority employment goals for the county in which the city of Mamaroneck, NY is located.

Current technology needs to be applied to increase productivity. If not already done, making plans and specifications available on-line or in CD form might increase competition, as would eliminating burdensome reporting requirements.

Contractors that have held previous contracts containing Civil Rights-related provisions are familiar with the “boiler-plate” provisions and have assigned responsibility to ensure administrative reporting requirements are met. Many consider having provided the required reports and filling their files with “evidence” is sufficient to be found “In- Compliance.” They may have completed the required Affirmative Actions fully, partially, or not at all.

The currency of the requirements aside, it is doubtful whether continuing to include hard copies of them in every prime and subcontract or purchase order is necessary to ensure “knowledge and willfulness” on the part of contractors, especially as relates to employers with experience with the provisions who have been reviewed.

The need exists to shift from focusing on deficiencies in contractor’ Civil Rights programs to helping them recognize and prevent discrimination in employment, training, contracting, or storage and disposal of hazardous waste. Building their staffs’ capabilities to manage Civil Rights programs through training, catching them doing right and recognizing their efforts through positive reinforcement is more likely to engender support than bludgeoning them into compliance with outdated provisions that need to be revised to make sense.

The employment goals for minorities and women issued by OFCCP are woefully outdated. Some are probably too low and others too high, given the speed and size of recent demographic shifts. The Bureau of Labor Statistics collects, maintains and makes available recent unemployment statistics. The AKDOT&PF can conduct the necessary analyses and establish more realistic goals.

While a complete fix of most issues raised would have to involve approval of a pilot by either or both Federal funding agencies, with the results monitored, recorded and analyzed, in the near-term, several opportunities lie within the control of AKDOT& PF’s Civil Rights staff.

The recommended approaches listed above need to be reviewed to determine their acceptance and support by AKDOT&PF and funding agencies then prioritized and worked.

FTA’s guidance authorizes recipients to make necessary revisions to the EEO provisions in contracts and they can be aligned with those required by FHWA and OFCCP. Obtaining relief to allow incorporation of some aspects by reference and a making the full texts of applicable statutes and regulations available on line should be pursued.

Developing and presenting pre-bid and pre-construction conferences focused on expected outcomes, rather than administrative requirements and lists of applicable statutes and regulations needs to be pursued to equip employers to be able to recognize and proactively prevent, or effectively address, instances of discrimination in programs, activities or employment.

The variety of low-end approaches employed by several other FTA recipients to “redelegate” the requirements of the EEO circular to contractors proves that the majority of contractors want to know what the owner is paying them to build, without interest in exploring the philosophical or statutory underpinnings of boilerplate provisions that few – if any – ever read. FTA has taken the formal position in several of its circulars that they will not substitute their thinking for effective measures taken by recipients – an enlightened and progressive approach.

Any data required to be developed and submitted by contractors needs to be analyzed and used to support decisions to review a contractor or not. If the data requested is not analyzed, consideration should be given to eliminating the requirement. All information collected from any source needs to be reviewed and analyzed to ascertain what – if any – value is added by their existence. The objective needs to always be to reduce or eliminate unnecessary administrative burdens.

The OFCCP requests that employers provide them with employment data for their facilities and a copy of their Affirmative action Plan. The OFCCP staff contacts EEOC to ascertain whether any complaints have been filed against the contractor and reviews its records for recent reviews of the contractor’s compliance with EO11246. If the desk audit confirms that there have been no complaints and, when compared with opportunities available, patterns of employment do not reflect under-representation or underutilization, then a review would not be scheduled. Only if non-compliance is found would a contractor be required to submit Workforce Utilization reports on a monthly basis.

The proscriptive requirements of funding agencies’ regulations outline legislative and executive mandates. Some of the prescriptive administrative aspects of regulatory

46 requirements could be considered “agency-made law,” embodying regulators’ interpretations of congressional intent and the state of the art and practice when the requirements were crafted. Except for FHWA’s “Ferry Boat Primer,” which addressed the Davis-Bacon wage rates conundrum, and ferry fund apportionment tables, ferry construction was not addressed in either funding agency’s Civil Rights-related regulations or guidance material.

The importance of public works projects in stimulating the economy cannot be overstated. Eliminating burdensome aspects and setting the standard for better program management of jointly funded projects, of a type not specifically addressed in current regulations and guidance, can demonstrate to the industry and other States that AKDOT&PF, FTA and FHWA are serious about increasing the effectiveness of their respective Civil Rights programs, while eliminating administrative burdens that hamper their performance and that of contractors engaged in shipbuilding.

The objectives of the project go to the heart of the AKDOT&PF’s Civil Rights responsibilities as the contracting agency to clearly communicate expectations and requirements to both bidders and to contractors with which it has entered into contracts. The concept of “privity” imposes responsibilities on parties to contracts. The State is obligated to specify what it will pay for and must determine, ensure, and, when and where necessary, obtain compliance with a contract’s provisions. Noncompliance with Civil Rights provisions in a contract is a breach of the contract and can jeopardize the involved contractor’s compensation and continuation on the contract, its ability to bid on future contracts, perform as a subcontractor on other contracts, or have bid ceilings reduced if instances of non-compliance are not adequately addressed.

As a basis for continued receipt of Federal funds, State transportation agencies commit to establish and manage effective programs to determine and obtain compliance with EEO provisions on federally assisted contracts. Failure to operate effective programs can result in findings of non-compliance and can affect the approval of future projects until the non-compliance is corrected or other sanctions in the arsenal of the FHWA or FTA administrator.

Simply put, Civil Rights provisions in bid and contract specifications are vehicles to communicate Federal Civil Rights requirements to prospective and successful bidders. The effectiveness of the process is hampered whenever requirements are not accurately or clearly articulated, are duplicative, are perceived to conflict, or unnecessarily overlap. In such instances the likelihood of contractors complying or State personnel properly determining compliance is diminished substantially.

When bid and contract provisions are considered to be confusing for any reason by those involved or affected, the probability of responsible personnel understanding what is required and expected is reduced. When confusion exists, the objectives of the enabling legislation and resultant prohibitions and prescriptions can go both unmet and unmonitored. The potential negative effects might appear to be victimless, but the opposite is, in fact, the case. A worse situation exists when contractors are required to continue to complete actions, which if done until the end of time, bear no logical connection to the requirements’ ostensible objectives. When scarce resources are wasted on “work” with no benefit but to meet an outdated, poorly thought or even more poorly written requirement, insincere or incomplete efforts can result in resentment of, rather than support for the initiatives. One contractor’s representative, after having experience on an AKDOT&PF ferry construction project indicated that his firm was not inclined to bid on future AKDOT&PF ferry projects, in large part because of the administrative burden of the Civil Rights aspects of the process.

Once an employment vacancy is filled, it is lost to other capable, available, qualified or qualafiable aspirants. Once a training slot is filled, others who might be qualafiable and who have an interest are locked out until another such opportunity presents itself. Prior to the recession, demographic realities gravitated against an employer or personnel with hiring authority making selections based on prohibited factors. The landscape has changed, and changed dramatically. With unemployment rates soaring, more applicants with more skills can be expected to apply for employment and training vacancies in industries and positions that they would not have considered in better times.

In tight job markets, competition for vacancies can be expected to increase. Although many factors must be considered in making selections for vacancies and promotional opportunities, federally assisted contractors are required to not discriminate based on race, color, religion, sex, age, national origin or disability. If there are neither complaints from employees nor patterns of underrepresentation or underutilization and equal pay is being provided for equal work, and there is no discrimination in the assignment of work, tools, equipment, or optional or forced overtime, then Affirmative Action is not necessary. If discriminatory patterns or practices exist, then Affirmative Action is required.

As previously stated, some parts of agencies’ regulations and guidance are obsolete because of changed program requirements, demographic realities, and agency structure. Without modification, some other provisions are not able to be implemented as intended on AMHS contracts because of the unique nature of ship construction and

48 the need for AKDOT&PF to rely on builders whose facilities are in other States. Other aspects of the regulations and guidance are administratively burdensome, overlapping, or duplicative, most notably, the FHWA’s Required Contract Provision and the OFCCP’s required EEO clause, which can be incorporated by reference. Staff shortages in some funding agencies have limited their ability to revise their governing regulations and other guidance in a timely fashion, resulting in either gaps in guidance for situations such as Alaska faces, or antiquated provisions, especially where a particular venture (i.e. shipbuilding/repair in a State different than the one managing the contract) was not addressed or unanticipated by the drafters of the extant guidance. The glacial rate of regulatory change has been overwhelmed by realities that continue to shift and quicken.

The nature of the regulations and other guidance applicable to construction, generally, and ferry construction, specifically, is perceived as overly complex and conflicting, causing confusion on the part of State personnel charged with interpreting and enforcing the provisions, and consternation - at best - on the part of contractors. The contractors, on whom the State and Federal governments rely to actually do the work to meet nondiscrimination and EEO objectives are hamstrung by red-tape. They have to either attempt to make sense of what is required of them; consider it the cost of doing business, and turn the crank, hoping what is expected occurs; ignoring the “boiler plate” altogether; or filling the State and Federal governments frogs with so much buckshot they can’t hop.

Several factors gravitate against the effectiveness of current regulatory and guidance schemes:

1. The age and obsolescence of many required provisions in applicable regulations and guidance. (a) FHWA’s Contract Compliance regulations were codified in the late 1970’s, but are largely unchanged from the informal guidance published as IM 40-2-72, in 1972. (b) FHWA reorganized, eliminating regional offices, which had specific responsibilities in managing its contract compliance programs. (c) The requirement for hard copies of Required Special Provisions to be inserted in each contract and subcontract is unnecessary to ensure knowledge and willfulness and does not do what was intended. The same effect could be had for less cost. (d) FTA used to be UMTA, but its EEO guidance is in a Circular published in 1988. FHWA relied on a similar system of Instructional Memoranda, Circulars, Orders, and Notices, until it was sued by an environmental group because much of the material in

49 that system was regulatory in nature and had not been published in the Federal Register. (e) FTA’s EEO guidance is focused on the responsibilities of its recipients and sub- recipients, with scant attention to contractors. While reissuance as a regulation would be helpful, it needs to be updated and modified to increase its utility. (f) OFCCP’s Minority and female employment goals for construction projects were published in October, 1980, and have not been updated, although population shifts and the currently occurring and impending retirements of “Baby Boomers” will have significant impacts on availability. (g) OFCCP’s “Hometown Plans” initiative, cited throughout FHWA’s regulation, is defunct. 2. Economic and demographic patterns, trends and conditions have changed, significantly, since the agencies’ guidance and requirements were originally published, and the requirements have not been changed to deal with new realities. (a) The recession has resulted in more displaced workers being willing to take whatever work is available, including work they would not have thought of as an option in boom times, including work in construction and related fields. (b) Statistically significant shifts have occurred in many SMSAs, which, coupled with the ages of persons in civilian labor forces, seems to indicate a need to update minority and female employment goals and make them more current and relevant. 3. The types of analyses required of regulators who aim to issue new regulations or make major revisions to existing ones are listed in Appendix 14 on page 111.

4.2. SUGGESTED RESEARCH

This effort brought to light several matters that appear ripe for further research. Most are directly related to the issues giving rise to this research. All are considered worthwhile targets. Except for the first, they are presented in no order of precedence.

1.a. Suggested Research: Most noteworthy is the need for a fresh assessment of the effectiveness of current Nondiscrimination, Equal Opportunity, and Equal Employment Opportunity regulations, guidance, and programs of Federal and State Transportation agencies. b.Discussion: Although the staff of the U.S. Commission on Civil Rights completed general reviews of the Federal Civil Rights Enforcement Effort, the need exists for a current general assessment, augmented by several highly focused research efforts with the aim of increasing the effectiveness of each Civil Rights program. The research needs to thorough, independent, objective, and completed by knowledgeable and experienced personnel with the aim of bringing existing regulations into this century.

The recommendations resulting from the Transportation Research Board’s “Open Space Technology” effort related to problems encountered in the DBE program and possible alternatives to address them appear to have been lost in the shuffle. That effort involved prime and subcontractors, DBEs and WBEs, and State and Federal personnel involved in the program working together. The results of that effort need to be reconsidered and viable options pursued.

2. a. Suggested Research: Any alternatives adopted or adapted by AKDOT&PF and accepted as pilots by the funding agencies need to be periodically reviewed to determine their effectiveness and whether a need exists at the time of research to adjust the approaches employed to increase their effectiveness. b. Discussion: In addition to ongoing assessments of effectiveness, more formal retrospective research at one, three, and five year intervals (or less often if the initial research is promising) need to be scheduled and completed as planned.

3. a. Suggested Research: Available data needs to be reviewed and interviews conducted to determine whether the programs’ original targets are being served or displaced by recent immigrants who have no history of being subjected to discrimination in this country – individually or as racial/ethnic minorities. The research can ascertain the effectiveness of in-place approaches to increase employment, skills training, and contracting opportunities for those who have been historically subjected to discrimination in the United States. Findings can be supported by anecdotal information.. b. Discussion: After President Truman’s EO eliminating segregated units in the armed forces and the 1954 Supreme Court’s decision in Brown v. Board of Education aimed toward eliminating segregated schools, the Civil Rights movement was organized to eliminate discrimination against Black males in employment and to eradicate the lingering vestiges of systemic discrimination. Since the passage of the 1964 Civil Rights Act, the size of “protected groups” has grown exponentially. Initially, the growth was within minority communities, whose men and women had experienced and who sought redress for discriminatory treatment. Well after the passage of Title VII of the 1964 Civil Rights Act, the Women’s Movement awakened the aspirations and highlighted the waste in human potential of women, nationally and internationally. Numerically, protected class members exploded beyond the capacity of Federal and State agencies tasked with ensuring nondiscrimination and EEO and a series of management initiatives aimed at doing more with less, developing ”lean” organizations, and reducing costs while increasing efficiency left Federal and State CR units on the receiving end of supposedly well-intentioned staff cuts.

The DOT’s DBE program originally set a 10 percent DBE goal. The program and how it is administered has been challenged in several well known court cases. Women were later included as “presumptively disadvantaged,” resulting in a substantial increase in group members targeted by the program with no increase in the goal. This research is replete with land mines but must be undertaken to determine whether the well-intentioned work of the Congress, the courts, and a series of presidents has gone off track. Black males, American Indians, and Alaska Natives, the original targets of Civil Rights initiatives, may have been marginalized by the watering down of the very programs established to help them get into the economic mainstream. Recent immigrants from racial and ethnic groups with no history of discrimination against them in this country are believed by some to be obtaining a significant share of the employment, training and business opportunities that remain at more than arm’s distance from populations the Civil rights programs were established to assist.

4. a. Suggested Research: Research focused on the investigative work of EEOC as relates to complaint rates at the shipbuilding facilities that have been reviewed by OFCCP under EO 11246, compared to those not having been subjected to such reviews. b. Discussion: Although the ferry construction needs of the Nation are large and growing, those needs pale in comparison with commercial and military shipbuilding needs. To whatever extent the OFCCP’s efforts and those of Federal military and research agencies have been more effective than the approaches employed by Transportation agencies, the processes need to be adopted and refined.

5.a. Suggested Research: The predatory business practices alleged to be employed by primes to hold capable DBEs at bay and prevent them from becoming competitive as primes need to be explored, clearly articulated, and effective remedies proposed. b. Discussion: Because few DBEs have grown to become either major specialty subcontractors or primes contractors, the effectiveness of the program to-date should be suspect. Predatory business practice, have been an unexamined sub-plot that never has been subjected to the scrutiny such practices , to whatever extent they exist, deserve. DBEs are in an unenviable predicament. If they are “successful” and exceed the size standard, they graduate to oblivion, because, no matter their skill, productivity, records for quality, safety, and timeliness, their work cannot count toward any prime’s goal attainment. If they remain below the size standard, they can be ensured that they will remain truly disadvantaged. If they have been subjected to predatory business practices, DBEs may bemoan the fact in meetings with their peers. Not filing a formal complaint and being continuously subjected to predatory business practices can be

52 expected to put them out of business. If a formal complaint is filed, no matter the outcome of informal negotiations or the results of a formal investigation, they fear they may also be put out of business.

6. a. Suggested Research: Identify “successful” prime contractors, who are competitive and who employ a diverse, productive, skilled workforce (union or open shop) and who provide business opportunities to DBEs. Determine the approaches employed by such primes to ensure their success and develop briefing material, and agendas for training sessions or symposia to spread the word. b. Discussion: Lack of positive experiences by some primes may result in risk-avoidance strategies that gravitate against capable and available DBEs who can provide more employment to at-risk populations and serve as feeders for better paying, higher skilled jobs. If successful primes have not been formally recognized in any State, they need to be recognized and rewarded as leaders. If it’s true that success breeds success, the results should be measureable and positive in quick time. Related to this effort is the need for serious downsides to be certain for continually avoiding efforts increase opportunities. Contractors who do not provide equal opportunity for DBEs ought to be considered non-responsible bidders on projects containing such provisions.

7.a. Suggested Research: A significant body of Federal court cases now exists which were focused on undermining the program, chipping away at its edges. They need to be researched to identify common threads and instances where the courts may not have been provided sufficient facts to allow informed decisions to be made. b. Discussion: Defenders of the government’s DBE program, while brilliant litigation strategists, did not educate the Court on how subcontracts were awarded in the Adarand v. Peńa decision. The Court’s decision in that case was based, largely, on its members’ beliefs that the sanctity of the low-bid process had been violated. While prime contracts are required to be awarded to the low, responsive, responsible bidder, subcontracts can be awarded by primes to any subcontractor they choose, regardless of the price quoted for the work. Subcontracts are – currently – not required to be awarded to low bidders. The machinations of change order arrangements and other informal agreements, especially those involving long-term, exclusive relationships between primes and subs, may become toxic over time and end up increasing costs while maintaining a discriminatory climate. Similar oversights may have occurred in other cases, all of which need to be objectively mined for information of value in redesigning the program to increase its effectiveness.

8.a. Suggested Research: Research the expenditures for the OJT program. Obtain data from States on how much has been paid to contractors to support the training effort, then find those who have been reported as either receiving or completing the training to determine the validity of claims. b. Discussion: The absence of inquiries, recommendations for improvement, or complaints from participants is deafening. Unless there have been significant and measureable increases in minority, female, or Appalachian residents in the workforces of highway contractors, the program might be being used as an unmonitored cash cow, with few benefits other than Federal-aid funds being absorbed by employers who need to train to survive. Having the US government use transportation funds for activities that cannot be validated is like paying a person to breath. The use of funds for OJT Supportive Services can be relatively easily tracked. Some efforts are more productive than others and information needs to be collected, analyzed and publicized to demonstrate to Congress and the Public that the investments are paying dividends.

9. a. Suggested Research: A cross section of State contract compliance programs needs to researched to ascertain the extent to which any have been modified to make them more realistic and effective. Doubtless some have applied available off-the-shelf software, but applying technology to obsolete aspects of programs undermines perceptions of a program’s validity and value. b. Discussion: In some instances, approaches employed by compliance staffs to enhance their effectiveness imposed additional requirements on contractors, which, through accretion and staff turnover, remain after those who imposed them are gone from State agencies. The continuation of administrative overburdens with no real value may prevent employers from doing what was intended to result from the original imposition. It has been said that if a thing is imposed, it will be opposed. Part of this research involved reviewing currently applicable Federal regulations. The contract compliance regulations and guidance reflect reliance on purported “evidence” of Affirmative Action, with scant attention to the effects of activities asserted. The need exists to refocus compliance efforts from relying solely on manufactured “evidence” of compliance with technical aspects of regulations to determining whether employers discriminated or not, and whether any actions implemented could reasonably be expected to have resulted in the effort’s ostensible objective.

REFERENCES

US Department of Transportation (DOT) AUTHORITIES

LEGISLATION

Pertinent parts of the Intermodal Surface Transportation Efficiency Act (ISTEA), the Surface Transportation and Uniform Relocation Assistance Act (STURAA), the Transportation Efficiency Act for the 21st Century (TEA-21), and the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETY-LU).

REGULATIONS

49 CFR 5 – Rulemaking Procedures 49 CFR 18 – Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments 49 CFR 21 – Nondiscrimination in Federally Assisted Programs of the Department of Transportation – Effectuation of Title VI of the Civil Rights Act of 1964 49 CFR 25 – Nondiscrimination on the Basis of Sex in Education Programs or Activities Receiving Federal Financial Assistance 49 CFR 26, as amended (by Feb 3, 2010 Federal Register Volume 75, Number 221) – Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs 49 CFR 27 – Nondiscrimination on the Basis of Disability in Programs or Activities Receiving or Benefitting from Federal Financial Assistance 49 CFR 37 – Transportation Assistance for Individuals with Disabilities (ADA) 49 CFR 38 – Americans with Disabilities Act (ADA) Accessibility Specifications for Transportation Vehicles

ORDERS

DOT Order 5610.2 - Environmental Justice in Minority and Low Income Populations

Federal Transit Administration (FTA/UMTA) AUTHORITIES

LEGISLATION

1.49 USC 5325. Contract requirements (a) Competition, (c) Efficient Procurement, (d) Design-Build projects, (e) Multiyear Rolling Stock, (f) Acquiring Rolling Stock, and (h) Grant Prohibition 2.49 USC 5332. Nondiscrimination – prohibits discrimination on the basis of race, color, creed, national origin, sex, or age in employment or business opportunity.

CIRCULARS

1.UMTA Circular C 4704.1(7/26/88)– EQUAL EMPLOYMENT OPPORTUNITY GUIDELINES FOR GRANT RECEIPIENTS – in Chapter II § 1 requires recipients to “redelegate (sic)…(the obligations set forth in the Circular)…to any contractor or subcontractor required to provided EEO on behalf of a recipients.”Two other provisions of the Circular mention contractors. Chapter III §1 and § 2.a.(1), in which contractors are required to not discriminate based on age and “creed.”While incorporating the proscription to not discriminate based on “handicap,” and requiring a written EEO policy , it allows including “handicap” as a prohibited factor at the discretion of the agency. 2.UMTA Circular C 4715.1A (7/26/88) – HUMAN RESOURCE PROGRAMS (SECTION 20) APPLICATION AND PROJECT MANAGEMENT GUIDELINES– addresses transportation of the elderly and disabled. 3.UMTA Circular C 4716.1A (7/26/88) – DBE 4.FTA Circular C 9040.1F (4/1/07)- Nonurbanized Area Formula Program Guidance and Grant Application Instructions, provides guidance on Nondiscrimination, EEO, and DBE requirements of recipients in §11 CIVIL RIGHTS REQUIREMENTS., cites applicable nondiscrimination, EEO and DBE authorities with brief summaries of prohibitions and prescriptions. 5. FTA Circular C 4702.1A – (5/13/07) TITLE VI AND TITLE VI DEPENDENT GUIDELINES FOR FEDERAL TRANSIT ADMINISTRATION RECIPIENTS addresses recipients’ responsibilities to ensure nondiscrimination based on race, color, national origin pursuant to statutory and regulatory authorities of DOT, DOJ, and FTA, agreements with FHWA, and FTA’s Master Agreement. It also addresses recipients’ responsibilities to integrate Environmental Justice concepts and efforts to address the needs of Limited English Proficient persons in their programs. 6.FTA Circular 4220.1F (11/1/08), states at § I.6. FTA’S ROLE. “Consistent with the Common Grant Rules’ directions to Federal agencies not to substitute their judgment for that of their recipients, FTA does not substitute its judgment for that of its

56 recipients by making third party contract decisions for its recipients. FTA’s role in third party procurements complies with the principles of Executive Order No. 13132, “Federalism,” August 4, 1999, 5 U.S.C. Section 601 note. The Executive Order directs Federal agencies to refrain from substituting their judgment for that of their State recipients unless the matter is primarily a Federal concern and, to the maximum extent feasible, to permit the States to establish their own standards rather than impose national standards. a. Reliance on the Recipient’s Self-Certification. FTA recognizes that most FTA recipients have experience with the third party contracting requirements of the Common Grant Rules. Therefore, FTA will rely primarily on the recipient’s annual “self-certification” (usually submitted in the first quarter of each Federal fiscal year) that its procurement system complies with FTA requirements and that the recipient has the technical capacity to comply with Federal procurement requirements. FTA requests each recipient to “self-certify” its procurement system as part of its Annual Certifications and Assurances. b. II 1. LEGAL EFFECT OF THE CIRCULAR. The Federal Transit Administration (FTA) has developed this circular to assist its recipients and their subrecipients in complying with the various Federal laws and regulations that affect their FTA assisted procurements. FTA considers this circular, in its entirety, to be a guidance document. While this guidance itself does not have the force and effect of Federal law or regulation, it does contain information about Federal laws and regulations for which compliance is mandatory when applicable. As guidance, this circular attempts to describe how a recipient or subrecipient of FTA assistance can comply with those Federal requirements. In some cases, this guidance describes the single method by which an FTA recipient or subrecipient can comply with a specific Federal legal or regulatory requirement. In other cases, Federal laws, regulations, and this guidance provide more flexibility. As guidance, this circular also expresses FTA’s preferences about how the procurements it supports should be undertaken. FTA’s Master Agreement reflects FTA and the recipient’s agreement that FTA’s third party contracting circular will apply to its third party contracts. As a guidance document, it does not waive any requirements of Federal statutes or regulations restated herein except as permitted by their terms. Because the circular is guidance, FTA is willing to consider methods of compliance with Federal laws and regulations other than those described in this circular. If a recipient identifies an alternative method for complying with an applicable Federal statute and regulation, it may contact FTA before employing that method to ensure that FTA agrees with the alternative proposed. While FTA’s prior concurrence is not

required, FTA reserves the right to decline to participate in the costs of third party procurements that fail to comply with Federal laws, regulations, or the terms of the recipient’s underlying grant or cooperative agreement. I 2. (a) States. When procuring property and services under a grant or cooperative agreement, a State may use the same procurement policies and procedures that it uses for acquisitions not financed with Federal assistance. … The State must also ensure that each purchase order and contract financed with FTA assistance includes all provisions required by Federal statutes and their implementing regulations. I 3.c. (2) Conflicting Federal Requirements. Requirements of the various Federal agencies that may be involved in the project will sometimes differ, with the result that FTA expects the recipient to comply with all those differences. If compliance with all applicable Federal requirements is impossible, the recipient should notify the FTA Chief Counsel for resolution. c. Waivers. Requests for waivers of Federal requirements should be addressed to the Federal Transit Administrator. II 4. STATE AND LOCAL LAWS AND REGULATIONS. The Common Grant Rules provide that recipients and subrecipients will use their own procurement procedures that comply with applicable State and local laws and regulations, and also comply with applicable Federal laws and regulations. 4.1 SELF-CERTIFICATION. FTA expects each recipient to self-certify that its procurement system complies with Federal requirements for any FTA assisted third party contract the recipient undertakes and administers. VI 2.a.(4) (g) (g) In-State or Local Geographic Restrictions. Specifying in-State or local geographical preferences, or evaluating bids or proposals in light of in-State or local geographic preferences, even if those preferences are imposed by State or local laws or regulations.

Federal Highway Administration (FHWA) AUTHORITIES

LEGISLATION

1.23 USC 101 – Definitions and declaration of policy 2.23 USC 104 (k) Apportionment – Transfer of Highway and Transit Funds 3.23 USC 106 – Project approval and oversight 4.23 USC 109 – Standards 5.23 USC 112 – Letting of Contracts

6.23 USC 113 – Prevailing rate of wage (a) The Secretary shall take such action as may be necessary to insure (sic) that all laborers and mechanics employed by contractors or subcontractors on the construction work performed on highway projects on the Federal-aid highways authorized under the highway laws providing for the expenditure of Federal funds upon the Federal-aid systems, shall be paid wages at rates not less than those prevailing on the same type of work on similar construction in the immediate locality as determined by the Secretary of Labor in accordance with sections 3141-3144, 3146, and 3147 of title 40. (b) In carrying out the duties of subsection (a) of this section, the Secretary of Labor shall consult with the highway department of the State in which a project on any of the Federal-aid systems is to be performed. After giving due regard to the information thus obtained, he shall make a predetermination of the minimum wages to be paid laborers and mechanics in accordance with the provisions of subsection (a) of this section which shall be set out in each project advertisement for bids and in each bid proposal form and shall be made a part of the contract covering the project. (c) The provisions of the section shall not be applicable to employment pursuant to apprenticeship and skill training programs which have been certified by the Secretary of Transportation as promoting equal employment opportunity in connection with Federal-aid highway construction programs. (Emphasis added) 7.23 USC 114 (a) Construction Work In General, requires that “… the construction work and labor in each State … be performed under the direct supervision of the State transportation department and in accordance with the laws of that State and applicable Federal laws.” And, at (c) - Construction Work in Alaska, which authorizes payment of per diem to workers on remote projects. 8. 23 USC 140 – Nondiscrimination (a) EEO Assurances, Notification of Contractors of their EEO Requirements, Training Programs, Compliance Programs (b) OJT Programs, Summer Transportation Institutes, and OJT/SS Funding (c) DBE/SS Funding (d) Indian Employment 9. 23 USC 147 – Construction of Ferry Boats and Ferry terminal Facilities 10. 23 USC 304 – Participation by small businesses 11. 23 USC 324 – Prohibition of discrimination on the basis of sex 12. 23 USC 325 – State Assumption of Responsibilities for Certain Programs and Projects

REGULATIONS

1. 23 CFR 633.102 Applicability. (a) The required contract provisions and the required proposal notices apply to all Federal-aid construction contracts other than Appalachian construction contracts. (b) Form FHWA–1273, “Required Contract Provisions, Federal-aid Construction Contracts,” contains required contract provisions and required proposal notices that are required by regulations promulgated by the FHWA or other Federal agencies. The required contract provisions of Form FHWA–1273 shall be physically incorporated in each Federal-aid highway construction contract other than Appalachian construction contracts (see §633.104 for availability of form). (c) [Reserved] (d) The required contract provisions contained in Form FHWA–1273 shall apply to all work performed on the contract by the contractor's own organization and to all work performed on the contract by piecework, station work, or by subcontract. (e)The contractor shall insert in each subcontract, except as excluded by law or regulation, the required contract provisions contained in Form FHWA–1273 and further require their inclusion in any lower tier subcontract that may in turn be made. The required contract provisions of Form FHWA–1273 shall not be incorporated by reference in any case. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the requirements contained in the provisions of Form FHWA–1273. (f)The State highway agency (SHA) shall include the notices concerning certification of nonsegregated facilities and implementation of the Clean Air Act and Federal Water Pollution Control Act, pursuant to 40 CFR part 15, in all bidding proposals for Federal- aid highway construction projects. As the notices are reproduced in Form FHWA–1273, the SHA may include Form FHWA–1273 in its entirety to meet this requirement. (Emphasis added.) 2. 23 CFR 633.103 Regulatory authority. All required contract provisions contained in Form FHWA–1273 are requirements of regulations promulgated by the FHWA or other Federal agencies. The authority for each provision will be cited in the text of Form FHWA–1273. 3. 23 CFR 635.107 – Participation by disadvantaged business enterprises. (a) The STD shall schedule contract lettings in a balanced program providing contracts of such size and character as to assure an opportunity for all sizes of contracting organizations to compete. In accordance with Title VI of the Civil Rights Act of 1964, subsequent Federal-aid Highway Acts, and 49 CFR part 26, the STD shall ensure equal

60 opportunity for disadvantaged business enterprises (DBEs) participating in the Federal- aid highway program. (b) In the case of a design-build project funded with title 23 funds, the requirements of 49 CFR part 26 and the State's approved DBE plan apply. If DBE goals are set, DBE commitments above the goal must not be used as a proposal evaluation factor in determining the successful offeror. 4. 23 CFR 635.112 – Advertising for bids and proposals. (a) No work shall be undertaken on any Federal-aid project, nor shall any project be advertised for bids, prior to authorization by the Division Administrator. (c) The STD shall obtain the approval of the Division Administrator prior to issuing any addenda which contain a major change to the approved plans or specifications during the advertising period. Minor addenda need not receive prior approval but should be identified by the STD at the time of or prior to requesting FHWA concurrence in award. The STD shall provide assurance that all bidders have received all issued addenda. (d) Nondiscriminatory bidding procedures shall be afforded to all qualified bidders regardless of National, State or local boundaries and without regard to race, color, religion, sex, national origin, age, or handicap. If any provisions of State laws, specifications, regulations, or policies may operate in any manner contrary to Federal requirements, including title VI of the Civil Rights Act of 1964, to prevent submission of a bid, or prohibit consideration of a bid submitted by any responsible bidder appropriately qualified in accordance with §635.110, such provisions shall not be applicable to Federal-aid projects. Where such nonapplicable provisions exist, notices of advertising, specifications, special provisions or other governing documents shall include a positive statement to advise prospective bidders of those provisions that are not applicable. 5. 23 CFR 635.115 – Advance Construction (a) In General. - The Secretary may authorize a State to proceed with a project authorized under this title – (1) without the use of Federal funds; and (2) in accordance with all procedures and requirements applicable to the project other than those procedures and requirements that limit the State to implementation of a project – 6. 23 CFR 635.116 – Subcontractor and Contractor Responsibilities (b) The STD shall not permit any of the contract work to be performed under a subcontract, unless such arrangement has been authorized by the STD in writing. Prior to authorizing a subcontract, the STD shall assure that each subcontract is evidenced in writing and that it contains all pertinent provisions and requirements of the prime contract. The Division Administrator may permit the STD to satisfy the subcontract assurance requirements by concurrence in a STD process which requires the contractor to certify that each subcontract arrangement will be in the form of a written

61 agreement containing all the requirements and pertinent provisions of the prime contract. Prior to the Division Administrator's concurrence, the STD must demonstrate that it has an acceptable plan for monitoring such certifications. 7. 23 635.117 Labor and employment. (b) No procedures or requirement shall be imposed by any State which will operate to discriminate against the employment of labor from any other State, possession or territory of the United States, in the construction of a Federal-aid project. (c) The selection of labor to be employed by the contractor on any Federal-aid project shall be by the contractor without regard to race, color, religion, sex, national origin, age, or handicap and in accordance with 23 CFR part 230, 41 CFR part 60 and Exec. Order No. 11246 (Sept. 24, 1965), 3 CFR 339 (1964–1965), as amended. (d) Pursuant to 23 U.S.C. 140(d), it is permissible for to implement procedures or requirements which will extend preferential employment to Indians living on or near a reservation on eligible projects as defined in paragraph (e) of this section. Indian preference shall be applied without regard to tribal affiliation or place of enrollment. In no instance should a contractor be compelled to layoff or terminate a permanent core- crew employee to meet a preference goal. (e)Projects eligible for Indian employment preference consideration are projects located on roads within or providing access to an Indian reservation or other Indian lands as defined under the term “Indian Reservation Roads” in 23 U.S.C. 101 and regulations issued thereunder. The terminus of a road “providing access to” is that point at which it intersects with a road functionally classified as a collector or higher classification (outside the reservation boundary) in both urban and rural areas. In the case of an Interstate highway, the terminus is the first interchange outside the reservation. (f) The advertisement or call for bids on any contract for the construction of a project located on the Federal-aid system either shall include the minimum wage rates determined by the Secretary of Labor to be prevailing on the same type of work on similar construction in the immediate locality or shall provide that such rates are set out in the bidding documents and shall further specify that such rates are a part of the contract covering the project. (Emphasis added)

8. 23 CFR 635.118 Payroll and weekly statements. For all projects, copies of payrolls and statements of wages paid, filed with the State as set forth in the required contract provisions for the project, are to be retained by the STD for the time period pursuant to 49 CFR part 18 for review as needed by the Federal Highway Administration, the Department of Labor, the General Accounting Office, or other agencies.

9. 23 CFR 636 – Design-Build Contracting

OTHER FHWA DIRECTIVES AND GUIDANCE

1. FHWA Notice N4720.6 – Impacts of the Civil Rights Restoration Act of 1987 on FHWA Programs 2. FHWA Notice N4720.7 - Indian Preference in Employment on Federal-aid Highway Projects On and Near Indian Reservations 3. FHWA Order 4710.8 - Clarification of FHWA and State Responsibilities under EO 11246 4. FHWA Order 6640.23 – Environmental Justice in Minority and Low Income Populations 5. Ferry Boat Primer – Overview of FHWA funding of ferry boats and ferry facilities 6. Memorandum from Tom Park, FHWA’s Chief Financial Officer, dated 7/19/07 – INFORMATION: Fund Transfers to Other Agencies and Among Title 23 Programs, which allows funds transferred to FTA to be administered under FTA rules. 7. 2009 - 2006 Annual DBE Goals and Achievements - State-by-State reports of annual projected goals and actual achievements and average + differences. 8. May 4, 2010 Letter from FHWA Administrator to Heads of State DOTs – addressing the needs to verify or correct records related to DBE awards under the ARRA. provide an analysis of the any gap between goals and achievements, and, if necessary, develop a plan to close the gap with monthly reports of achievements. 9. June 19, 2007 Memorandum from Tom Park, Chief Financial Officer, to members of FHWA’s Leadership Team, Subject: INFORMATION: Fund Transfers to Other Agencies and Among Title 23 Programs.

U.S Department of Labor Bureau of Apprenticeship and Training

LEGISLATION

The National Apprenticeship Act of 1937 (29 U.S.C. 50), section 1, – authorizes and directs the Secretary of Labor “to formulate and promote the furtherance of labor standards… to safeguard the welfare of apprentices.”

REGULATIONS

29 CFR 29.3 (i) – states that “(W)here the employees to be trained have no collective bargaining agent, an apprenticeship program may be proposed by an employer or group of employers.”

Office of Federal Contract Compliance Programs (OFCCP) AUTHORITIES

LEGISLATION

Section 503 of the Rehabilitation Act of 1973, as amended, prohibits discrimination and requires affirmative action in all personnel practices for qualified individuals with disabilities.

EXECUTIVE ORDERS

1. Executive Order 11246, prohibited discrimination based on race, color, religion, and national origin and required Affirmative Action to overcome the current effects of discrimination. 2. Executive Order 11375 amended EO 11246, adding sex as a proscribed basis for discrimination. 3. Executive Order 12086 consolidated contract compliance functions related to enforcing EO 11246 in OFCC. 4. Executive Order 13279 exempted religious corporations, associations, educational institutions, and societies from certain nondiscrimination and equal employment opportunity requirements.

REGULATIONS

1. 41 CFR 60-1 – EEO Obligations of Contractors and Subcontractors (applicable to Direct Federal and federally assisted construction contractors and subcontractors, material suppliers and vendors, regardless of tier) 2. 41 CFR 60-3 - Uniform Guidelines on Employee Selection Procedures (UGESP) adopted by DOL/OFCCP, EEOC, DOJ, Treasury, and OPM/CSC and address use of tests and other selection criteria. Provide guidance on adverse/disparate impact and treatment and bona fide occupational qualifications. 3. 41 FR 60-4 - Construction Contractors Affirmative Action requirements – clarified the reach of EO 11246 to include the entire workforce of contractors, not just that on site, and including personnel on non-federal contracts. Set goals and timetables for employing minorities and women.

4. 41 CFR 60-20 – Sex Discrimination Guidelines – apply to all Federal contracts and federally assisted construction contracts and subcontracts. 5. 41 CFR 60-30 – Rules of Practice for Administrative Procedures to Enforce EO 11246 – aligned OFCCP’s compliance process with Federal Rules of Civil Procedure. 6. 41 CFR 60-50 – Guidelines on Discrimination because of Religion or National Origin – provides guidance on reasonable accommodation and business necessity. 7. 41 CFR 60-250 - Affirmative Action and Nondiscrimination Obligations of Contractors and Subcontractors Regarding Special Disabled Veterans and Veterans of the Vietnam Era - Although requirements are aimed at direct federal contractors and subcontractors, because many States have similar legislation, the guidance is invaluable. The regulation incorporated provisions related to determining whether the employee/applicant can perform “essential functions’ of a position without being a direct threat to the applicant’s/employee’s safety or that of others in the workplace. It also allows consideration of and provides guidance on drug testing and alcoholism. 8. 41 CFR 60-741 – Affirmative Action Obligations of Contractors and Subcontractors Regarding individuals with Disabilities – While applicable to Direct Federal contracts, the guidance is invaluable, including conditions not considered “disabilities” under the ADA. The UGESP do not apply to persons covered by this part.

OTHER DIRECTIVES

1. OFCCP Employment Resource Referral Directory – 9/30/2004 – A State-by-State listing of agencies and organizations asserting the capability to refer minorities, women, Veterans and persons with disabilities for employment. 2. 45 Federal Register 65978, Oct. 3, 1980 – OFCCP – Construction Contractors Affirmative Action Requirements, Construction Industry Goals for Minority Participation.

Wage and Hour Division (WHD)

LEGISLATION

1. Fair Labor Standards Act, as amended, governs minimum wage, overtime, record keeping, hours worked, pay requirements,, youth employment, special employment, migrant workers, lie detector tests and worker protections. 2. Family and Medical Leave Act of 1993, requires larger employers to provide employees job-protected unpaid leave due to a serious health condition that makes the employee unable to perform his or her job, or to care for a sick family member, or to care for a new child, including by birth, adoption or foster care. The National Defense Authorization Act

65 of 2008 amended the FMLA to permit “a spouse, son, daughter parent or next of kin to take up to 26 weeks of leave to care for a “member of the Armed Forces ,including embers of the National Guard or Reserves, who is undergoing medical treatment, recuperation, or therapy, is otherwise in outpatient status, or is otherwise on the temporary disability retires list, for a serious injury or illness.”

REGULATIONS

1. 29 CFR 1.3 – Obtaining and compiling wage rate information - For the purpose of making wage determinations, the Administrator will conduct a continuing program for the obtaining and compiling of wage rate information. (a) The Administrator will encourage the voluntary submission of wage rate data by contractors, contractors' associations, labor organizations, public officials and other interested parties, reflecting wage rates paid to laborers and mechanics on various types of construction in the area. The Administrator may also obtain data from agencies on wage rates paid on construction projects under their jurisdiction. The information submitted should reflect not only the wage rates paid a particular classification in an area, but also the type or types of construction on which such rate or rates are paid, and whether or not such rates were paid on Federal or federally assisted projects subject to Davis-Bacon prevailing wage requirements. (b) The following types of information may be considered in making wage rate determinations: (1) Statements showing wage rates paid on projects. Such statements should include the names and addresses of contractors, including subcontractors, the locations, approximate costs, dates of construction and types of projects, whether or not the projects are Federal or federally assisted projects subject to Davis-Bacon prevailing wage requirements, the number of workers employed in each classification on each project, and the respective wage rates paid such workers. (2) Signed collective bargaining agreements. The Administrator may request the parties to an agreement to submit statements certifying to its scope and application. (3) Wage rates determined for public construction by State and local officials pursuant to State and local prevailing wage legislation. (4) In making wage rate determinations pursuant to 23 U.S.C. 113, the highway department of the State in which a project in the Federal-Aid highway system is to be performed shall be consulted. Before making a determination of wage rates for such a project the Administrator shall give due regard to the information thus obtained. (5) Wage rate data submitted to the Department of Labor by contracting agencies pursuant to 29 CFR 5.5(a)(1)(ii). (6) Any other information pertinent to the determination of prevailing wage rates.

(c) The Administrator may initially obtain or supplement such information obtained on a voluntary basis by such means, including the holding of hearings, and from any sources determined to be necessary. All information of the types described in Sec. 1.3 (b) of this part, pertinent to the determination of the wages prevailing at the time of issuance of the wage determination, will be evaluated in the light of Sec. 1.2(a) of this part. (d) In compiling wage rate data for building and residential wage determinations, the Administrator will not use data from Federal or federally assisted projects subject to Davis-Bacon prevailing wage requirements unless it is determined that there is insufficient wage data to determine the prevailing wages in the absence of such data. Data from Federal or federally assisted projects will be used in compiling wage rate data for heavy and highway wage determinations. 2. 29 CFR 1.4 - Outline of agency construction programs To the extent practicable, at the beginning of each fiscal year each agency using age determinations under any of the various statutes listed in appendix A will furnish the Administrator with a general outline of its proposed construction programs for the coming year indicating the estimated number of projects for which wage determinations will be required, the anticipated types of construction, and the locations of construction. During the fiscal year, each agency will notify the Administrator of any significant changes in its proposed construction programs, as outlined at the beginning of the fiscal year. This report has been cleared in accordance with FPMR 101-11.11 and assigned interagency report control number 1671-DOL-AN. 3. 29 CFR 1.5 – Procedure for requesting wage determinations (a) The Department of Labor publishes general wage determinations under the Davis-Bacon Act on the WDOL Internet Web site. If there is a general wage determination applicable to the project, the agency may use it without notifying the Department of Labor, Provided, That questions concerning its use shall be referred to the department of Labor in accordance with Sec.1.6(b). (b) (1) If a general wage determination is not available, the Federal agency shall request a wage determination under the Davis-Bacon Act or any of its related prevailing wage statutes by submitting Form SF-308 to the Department of Labor at his address: U.S. Department of Labor, Employment Standards Administration, Wage and Hour Division, Branch of Construction Contract Wage Determination, Washington, DC 20210. In preparing Form SF-308, the agency shall check only those classifications that will be needed in the performance of the work. Inserting a note such as ``entire schedule'' or ``all applicable classifications'' is not sufficient. Additional classifications needed that are not on the form may be typed in the blank spaces or on a separate list and attached to the form. (2) In completing SF-308, the agency shall furnish: (i) A sufficiently detailed description of the work to indicate the type of construction involved. Additional description or separate attachment, if necessary for identification of type of project, shall be furnished. (ii) The county (or other civil subdivision) and State in which the proposed project is located.

(3) Such request for a wage determination shall be accompanied by any pertinent wage payment information that may be available. When the requesting agency is a State highway department under the Federal-Aid Highway Acts as codified in 23 U.S.C. 113, such agency shall also include its recommendations as to the wages which are prevailing for each classification of laborers and mechanics on similar construction in the area. (c) The time required for processing requests for wage determinations varies according to the facts and circumstances in each case. An agency should anticipate that such processing in the Department of Labor will take at least 30 days. 4. 29 CFR 1.6 –Use and effectiveness of wage determinations (a)(1) Project wage determinations initially issued shall be effective for 180 calendar days from the date of such determinations. If such a wage determination is not used in the period of its effectiveness it is void. Accordingly, if it appears that a wage determination may expire between bid opening and contract award (or between initial endorsement under the National Housing Act or the execution of an agreement to enter into a housing assistance payments contract under section 8 of the U.S. Housing Act of 1937, and the start of construction) the agency shall request a new wage determination sufficiently in advance of the bid opening to assure receipt prior thereto. However, when due to unavoidable circumstances a determination expires before award but after bid opening (or before the start of construction, but after initial endorsement under the National Housing Act, or before the start of construction but after the execution of an agreement to enter into a housing assistance payments contract under section 8 of the U.S. Housing Act of 1937), the head of the agency or his or her designee may request the Administrator to extend he expiration date of the wage determination in the bid specifications instead of issuing a new wage determination. Such request shall be supported by a written finding, which shall include a brief statement of the factual support, that the extension of the expiration date of the determination is necessary and proper in the public interest to prevent injustice or undue hardship or to avoid serious impairment in the conduct of Government business. The Administrator will either grant or deny the request for an extension after consideration of all of the circumstances, including an examination to determine if the previously issued rates remain prevailing. If the request for extension is denied, the Administrator will proceed to issue a new wage determination for the project. (2) General wage determinations issued pursuant to Sec. 1.5(a), notice of which is published on WDOL, shall contain no expiration date. (b)Contracting agencies are responsible for insuring (sic) that only the appropriate wage determination(s) are incorporated in bid solicitations and contract specifications and for designating specifically the work to which such wage determinations will apply. Any question regarding application of wage rate schedules shall be referred to the Administrator, who shall give foremost consideration to area practice in resolving the question. (c) (1) Project and general wage determinations may be modified from time to time to keep them current. A modification may specify only the items being changed, or

may be in the form of a supersedeas wage determination, which replaces the entire wage determination. Such actions are distinguished from a determination by the Administrator under paragraphs (d), (e) and (f) of this section that an erroneous wage determination has been issued or that the wrong wage determination or wage rate schedule has been utilized by the agency. (3) All actions modifying a general wage determination shall be effective with respect to any project to which the determination applies, if notice of such actions is published before contract award (or the start of construction where there is no contract award), except as follows: (i) In the case of contracts entered into pursuant to competitive bidding procedures, a modification, notice of which is published less than 10 days before the opening of bids, shall be effective unless the agency finds that there is not a reasonable time still available before bid opening to notify bidders of the modification and a report of the finding is inserted in the contract file. A copy of such report shall be made available to the Administrator upon request. No such report shall be required if notice of the modification is published after bid opening.… (iv) If under paragraph (c)(3)(i) of this section the contract has not been awarded within 90 days after bid opening, or if under paragraph (c)(3)(ii) or (iii) of this section construction has not begun within 90 days after initial endorsement or the signing of the agreement to enter into a housing assistance payments contract, any modification, notice of which is published on WDOL prior to award of the contract or the beginning of construction, as appropriate, shall be effective with respect to that contract unless the head of the agency or his or her designee requests and obtains an extension of the 90-day period from the Administrator. Such request shall be supported by a written finding, which shall include a brief statement of the factual support, that the extension is necessary and proper in the public interest to prevent injustice or undue hardship or to avoid serious impairment in the conduct of Government business. The Administrator will either grant or deny the request for an extension after consideration of all the circumstances. (v) A modification to a general wage determination is ``published'' within the meaning of this section on the date notice of a modification or a supersedeas wage determination is published on WDOL or on the date the agency receives actual written notice of the modification from the Department of Labor, whichever occurs first. Archived versions of Davis-Bacon and Related Acts wage determinations that are no longer current may be accessed in the ``Archived DB WD'' database of WDOL for information purposes only. Contracting officers should not use an archived wage determination in a contract action without prior approval of the Department of Labor. (vi) A supersedeas wage determination or a modification to an applicable general wage determination, notice of which is published after contract award (or after the beginning of construction where there is no contract award) shall not be effective. (d) Upon his/her own initiative or at the request of an agency, the Administrator may correct any wage determination, without regard to paragraph (c) of this section, whenever the Administrator finds such a wage determination contains clerical errors. Such corrections shall be included in any bid specifications containing the wage

69 determination, or in any on-going contract containing the wage determination in question, retroactively to the start of construction. (e) Written notification by the Department of Labor prior to the award of a contract (or the start of construction under the National Housing Act, under section 8 of the U.S. Housing Act of 1937, or where there is no contract award) that: (1) There is included in the bidding documents or solicitation the wrong wage determination or the wrong schedule or that (2) a wage determination is withdrawn by the Department of Labor as a result of a decision by the Administrative Review Board, shall be effective immediately without regard to paragraph (c) of this section. (f) The Administrator may issue a wage determination after contract award or after the beginning of construction if the agency has failed to incorporate a wage determination in a contract required to contain prevailing wage rates determined in accordance with the Davis-Bacon Act, or has used a wage determination which by its terms or the provisions of this part clearly does not apply to the contract. Further, the Administrator may issue a wage determination which shall be applicable to a contract after contract award or after the beginning of construction when it is found that the wrong wage determination has been incorporated in the contract because of an inaccurate description of the project or its location in the agency's request for the wage determination. Under any of the above circumstances, the agency shall either terminate and re-solicit the contract with the valid wage determination or incorporate the valid wage determination retroactive to the beginning of construction through supplemental agreement or through change order, provided that the contractor is compensated for any increases in wages resulting from such change. The method of incorporation of the valid wage determination, and adjustment in contract price, where appropriate, should be in accordance with applicable procurement law. (g) If Federal funding or assistance under a statute requiring payment of wages determined in accordance with the Davis-Bacon Act is not approved prior to contract award (or the beginning of construction where there is no contract award), the agency shall request a wage determination prior to approval of such funds. Such a wage determination shall be issued based upon the wages and fringe benefits found to be prevailing on the date of award or the beginning of construction (under the National Housing Act, under section 8 of the U.S. Housing Act of 1937 or where there is no contract award), as appropriate, and shall be incorporated in the contract specifications retroactively to that date, Provided, That upon the request of the head of the agency in individual cases the Administrator may issue such a wage determination to be effective on the date of approval of Federal funds or assistance whenever the Administrator finds that it is necessary and proper in the public interest to prevent injustice or undue hardship, Provided further That the Administrator finds no evidence of intent to apply for Federal funding or assistance prior to contract award or the start of construction, as appropriate. 5. 29 CFR 1.7 - Scope of consideration. (a) In making a wage determination, the area will normally be the county unless sufficient current wage data (data on wages paid on current projects or, where necessary, projects under construction no more than one year prior to the beginning of

70 the survey or the request for a wage determination, as appropriate) is unavailable to make a wage determination. (b) If there has not been sufficient similar construction within the area in the past year to make a wage determination, wages paid on similar construction in surrounding counties may be considered, Provided that projects in metropolitan counties may not be used as a source of data for a wage determination in a rural county, and projects in rural counties may not be used as a source of data for a wage determination for a metropolitan county. (c) If there has not been sufficient similar construction in surrounding counties or in the State in the past year, wages paid on projects completed more than one year prior to the beginning of the survey or the request for a wage determination, as appropriate, may be considered. (d) The use of helpers, apprentices and trainees is permitted in accordance with part 5 of this subtitle.

OTHER WHD DIRECTIVES

Field Operations Handbook – 6/29/90 – Sections 15d08, Shipbuilding, alteration, repair, and maintenance. Outlines Davis-Bacon wage rate policy and provides basic guidance to practitioners in interpreting the applicability of D-B wage rates to various categories of industries and work classifications, although the term “ferry” is mentioned only once in the document in describing the work of “seamen” and explaining what work would not be covered by D-B wage rates. Sections 13 b11, 14a19, 14d03 and 24k03 are referred to, but some sections are exact duplicates of others and provide no clarifying information. Several parts referred to sections 15c14 and 17, but neither exist, only 15c01.

Equal Employment Opportunity Commission (EEOC) AUTHORITIES

LEGISLATION

1. Equal Pay Act of 1963 - amended the Fair Labor Standards Act, administered by WHD, and prohibited discrimination in compensation based on sex for people doing the same work. 2. Title VII of the 1964 Civil Rights Act – proscribed discrimination in employment based on race, color, religion, sex, or national origin. Later legislation including the rehabilitation Act of 1973, the Age discrimination in Employment Act, and the Americans with Disabilities Act significantly expanded the scope of EEOC’s responsibilities. Title VII also established the Equal Employment Opportunity Commission as the employment discrimination complaints investigative agency for the United States. Section 706 allowed the EEOC to rely on investigations by States’

Fair Employment or “706” agencies, while retaining jurisdiction over matters investigated. 3. The Americans with Disabilities Act of 1990, as amended by the ADA Amendments Act of 2008 - states that “no covered entity shall discriminate against a qualified individual on the basis of disability in regard to job application procedures, the hiring, advancement or discharge of employees, employee compensation, job training or other terms, conditions or privileges of employment.”

REGULATIONS

29 CFR 1630 – Regulations to Implement the Equal Employment Provisions of the ADA.

US Department of Justice AUTHORITIES

LEGISLATION

1. Title VI of the 1964 Civil Rights Act – which prohibits discrimination federally assisted programs based on race, color, sex or national origin. The Act has been interpreted as proscribing discrimination in federally assisted programs’ impacts, access, benefits, participation, treatment and training. Title VI does not apply to discrimination in employment in federally assisted programs with two exceptions: (1) where the primary purpose of the Federal-aid is to provide employment; and, (2) where discrimination has been found in a program and the proximate cause of it is determined to be the discriminatory pattern of employment in the organizational element responsible for administering the program. 2. Section 504 of the Rehabilitation Act of 1973, states that “no qualified individual with a disability shall be excluded from, denied the benefits of, or subjected to discrimination under” any program or activity that either receives federal financial assistance or is conducted by any Executive agency or the U.S. Postal Service.

REGULATIONS

42 CFR 401 - Coordination and Enforcement of Nondiscrimination in Federally Assisted Programs has as its purpose “to insure (sic) that federal agencies which extend financial assistance properly enforce Title VI of the Civil Rights Act of 1964 and similar provisions in federal grant statutes.”

OTHER GUIDANCE

1. Memorandum from the Acting Assistant Attorney General titled “Strengthening Enforcement of title VI of the 1964 Civil Rights Act” 7/10/2009 2. A Guide to Disability Rights Laws U.S Commission on Civil Rights

GUIDANCE

Compliance Officer’s Manual – A handbook of compliance procedures under Title VI of the Civil Rights Act of 1964

National Cooperative Highway Research Program

Legal Research Digest – Civil Rights in Transportation Projects - A digest and report of analyses of the liability of Transportation officials in matters involving Title VI and related nondiscrimination statute’s compliance. The report focused on Title VI, its administrative enforcement, and implications of disparate impact provisions of Federal regulations, including enforcement of EO-12898. The analysis addressed findings and implications of the following cases, among others: Alexander v. Sandoval, Wright v. City of Roanoke Redevelopment and Housing Authority; South Camden Citizens in Action; Gonzaga University v. Doe; and Guardians Association v. Civil Service Commission of the City of NY.

AUTHORITIES RELATED TO REGULATORY AND ADMINISTRATIVE REQUIREMENTS

73 public. Once obtained, approval must be renewed every three years. To obtain or renew approvals, agencies must complete and submit OMB Form 83-I, with the proposed form, and file it with OIRA. On Form 83-I, including an explanation why the form is needed and an estimate of the burden - in terms of time and cost - that the form will impose upon the persons required to fill it out. 3. The Regulatory Flexibility Act (I/1/81) – required Federal agencies t assess the impact of regulations on small entities as a key part of the process to issue regulations and to use less burdensome alternatives. In 1980, at the first of a series of White House Conferences on Small Business, the SBA’s Office of Advocacy reported that small firms incurred approximately $12.7 billion annually on government paperwork requirements. 4. The Paperwork Reduction Act of 1995 (10/1/95) – among other purposes listed in § 3501. Purpose, had the aims of minimizing paperwork burdens on individuals, small businesses … Federal contractors, State, local and tribal governments, and other persons resulting from the collection of information by or for the Federal Government; strengthening partnerships between the Federal Government and State, local, and tribal governments by minimizing the burden and maximizing the utility of information created, collected, maintained, used, disseminated, and retained by or for the Federal Government; and, ensuring that information technology is acquired, used, and managed to improve performance of agency missions, including reducing information collection burdens on the public. 5. The E-Government Act of 2002 (enacted 12/17/02 with an effective date for most provisions of 4/17/03) had the aims of improving management and promotion of electronic government services and processes; establishing a framework of measures requiring that Internet-based information be employed to improve citizen access to government information and services, and for other purposes, including, but not limited to reducing costs and burdens for businesses and other Government entities. 6. The Government Paperwork Elimination Act (GPEA) (10/21/98) - required that, when practicable, Federal agencies use electronic forms, electronic filing, and electronic signatures to conduct official business with the public by 2003. The Act requires agencies to allow individuals or entities that deal with the agencies the option to submit information or transact with the agency electronically and to maintain records electronically, when practicable. The Act specifies that electronic records and signatures are not to be denied legal effect, validity, or enforceability merely because they are in electronic form, and encouraged Federal government use of a range of electronic signature alternatives. The Act sought to "preclude agencies or courts from systematically treating electronic documents and signatures less favorably than their paper counterparts.” It also addressed the matter of private employers being able to use electronic means to store, and file with Federal agencies, information pertaining to their employees. The GPEA required that electronic records and their related electronic signatures not to be denied legal effect, validity, or enforceability merely because they are in electronic form.

Office of Management and Budget, Executive Office of the President Memo to Heads of Executive Departments and Agencies M-07-07 - Issuance of OMB’s “Final Bulletin for Agency Good Guidance Practices” with the aim of ensuring and maximizing the quality, utility, objectivity and integrity of information disseminated by Federal agencies, pursuant to the Information Quality Act.

OMB’s Report to Congress assessing the benefits and costs of implementing EO 13166, dated March 14, 2002, recommended adoption of uniform guidance across all Federal agencies, with flexibility to permit tailoring to each agency’s specific recipients.

Presidential Documents

In addition to EO 11246 as amended, and others governing EEO and requiring Affirmative Action listed under OFCCP Authorities, EO 12866 as supplemented by EO 12875 and EO 13272 and amended by EOs 13258 and 13422, Enhancing Intergovernmental Partnership. That series of EOs requires each agency to reduce regulatory burdens, eliminate conflict and duplication, and streamline its waiver process and consider applications by a State, local or tribal government for a waiver of statutory or regulatory requirements to enhance the Intergovernmental Partnership by addressing “…the cumulative effect of unfunded Federal mandates…” on the “…strained budgets of State, local, and tribal governments. Executive Order 12612 - directed Federal agencies to refrain from substituting their judgment for that of their recipients unless the matter is primarily a Federal concern and to defer, to the maximum extent feasible, to the States to establish standards rather than setting national standards.

EO 12898 addressed the need to ensure Environmental Justice and requires Federal agencies to establish effective procedures to ensure disproportionately high and adverse effects on minority populations and low-income populations are avoided, minimized or mitigated.

EO 13166 focused on improving access to services for persons with limited English proficiency (LEP).

EO 13330 established the Interagency Transportation Coordinating Council on Access and Mobility to focus on the needs of those who are “transportation disadvantaged.” The objective o f the Council is to ensure that community transportation services are “seamless, comprehensive, and accessible” to those who are public transportation dependent.

Figure 1 Comparison of FTA and FHWA Required Bid and Contract Provisions

FTA FHWA

I. General I. General II. Civil Rights Requirements II. Nondiscrimination III. DBE III. Non segregated Facilities IV. Buy America Requirements IV. Payment of Predetermined V. Fly America Requirements Wage Rates VI. Cargo Preference V. Statements and Payrolls Requirements VI. Record of Materials, Supplies, VII. Contract Work Hours and and Labor Safety Standards Act VII. Subletting or Assigning the VIII. Program Fraud and False or Contract Fraudulent Statements and VIII. Safety: Accident Prevention Related Acts IX. False Statements IX. Clean Air and Clean Water X. Implementation of Clean Air Requirements and Federal Water Pollution X. Government-wide Debarment Control Act and Suspension XI. Certification Regarding XI. Lobbying Debarment, Suspension, XII. No Government Obligations to Ineligibility and Voluntary Third Parties Exclusion XIII. Federal Changes XII. Certification Regarding Use of XIV. Energy Conservation ADA Contract Funds for Lobbying Access XV. Access to Records and Reports XVI. Incorporation of FTA Terms

Annual U.S. Birth Rate 1909-2004 Figure 2

Figure 3

Figure 4

Figure 5

Figure 6

ALASKA’S SURFACE AREA COMPARED WITH THAT OF THE “LOWER 48”

APPENDICES

PAGE

1. List of AKDOT&PF’s Specifications and other Documents Reviewed……………………..83 2. Summaries of Responses to Requests for Input from Similarly-Situated States and Other Entities ...... 84 3. Summaries of Interviews and Discussions with Contractors’ and Federal Agencies’ Representatives ...... 87 4. Federal Authorities Supportive of AKDOT&PF’s Request for Waiver, Exemptions or Other Relief ...... 90 5. Legislative, Executive and Regulatory Constraints ...... 95 6. Business and Employment Opportunities in Constructing Ferry Facilities ...... 97 7. Recipients of Ferry Discretionary Funds 1998-2010 ...... 98 8. Major Civil Rights Authorities ...... 99 9. Alternative #1 ...... 101 10. Alternative #2 ...... 103 11. Draft Special Notice – OJT ...... 106 12. Draft Special Notice – DBE ...... 107 13. DRAFT Special Notice – DBE, EEO and OJT Goals ...... 108 14. Required Regulatory Analyses ...... 111

Appendix 1 AKDOT&PF Documents Reviewed

1. Form 25D-56 (6-07) – Required Contract Provisions for FTA Federally Assisted Contracts 2. Form 25A-324 (8/01) – DBE Subcontractable Items 3. Form 25A-312- Apprentice/Trainee Employment Report 4. Form 25A-310 (8/01) DOT&PF Training Program Request 5. Form 25A-298 – CUF Monitoring Report 6. Form 25D-040 10/19/05 – Labor Compliance Interview 7. Form 25D-55H (4/09) – Required Contract Provisions for FHWA Construction Contracts 8. Table of Contents – Federal-aid Marine Facilities 9. Form 25D-4A (8/01) - Required Documents – Federal-aid Contracts 10. Form 25A-321A (1/02) - Contact Report - Federal-aid Contracts 11. Form 25A-322A (8/01) – Summary of GFE Documentation – Federal-aid Contracts 12. Form 25A-326 (8/01) - Prime Contractor’s Written DBE Commitment 13. Form 25A-325C (1/02) – DBE Utilization Report – Federal-aid Contracts 14. Form 25A-311 (1/03) – Training Utilization Report 15. Form 25A-304 (8/01) – EEO-1 Certification – Federal-aid Contracts 16. Form 25A-301 (8/01) – Federal EEO Bid Conditions 17. Form 25D-61 – (10/1) – Buy America Certification 18. Form 25D-60 (8/01) – Material Origin Certification 19. Form 25D-55A (4/09) - Required Contract Provisions for FAA Contracts 20. Form 25D-16 (8/01) – Bid Modification 21. Form 25D-15 8/01) – Affidavit of Individual Surety 22. Form 25D-14 (8/01) – Bid Bond 23. Form 25D-13 (8/01) – Performance Bond 24. Form 25D-12 (8/010 – Payment Bond 25. Form 25D-10 (9/01) – Construction Contract 26. Form 25D-9 (7/03) – Bid Form 27. Form 25D-8 (8/01) – Contractor’s Questionnaire 28. Form 25D-7 (7/03) – Invitation to bid for Construction Contract 29. Form 25D-6 (6/03) – Bidder Registration 30. Form 25D-5 (8/01) – Subcontractor List 31. Notice of Requested Participation Goals for the DBE Program 32. Section 645 – Training Program 33. Contract Compliance Review Checklist 34. Directory of U.S. Shipyards

Appendix 2 Summaries of Responses to Requests for Input from Similarly Situated States and Interested or Affected Entities

SOURCE DATE of NATURE OF RESPONSE RESPONSE CALTRANS 7/27/09 Asserted there were no ferry operations

The Native Village of Port Lions 8/4/09 Awards no contracts but dock is in need of repair or rebuild (sic)

Oregon DOT 2/24/10 ODOT has not awarded any contracts for ferry construction or refurbishment

Stephanie Ducote 5/1/10 1. No DBEs certified in the area of Ferry Construction. Compliance Programs Director 2. Provided list of bidders on ferry contracts (one, used by AKDOTPF) LADOTD 3. Uses FTA and FHWA “boiler-plate” provisions 4. Ferry projects are all state funded. (See #3., above. (?)

Roberta Weisbrod, Chair, 4/9/11 I don't recall this issue being raised in a session or in a committee meeting. I Transportation Research Board’s could see in the future a presentation at a committee meeting about the issue. Ferry Committee

Rep. James Lankford (R., OK) “(M)any federal workers complain to him about “inefficiency they see up close quoted in an unrelated article in and personal.” He also said that business owners object to stifling regulators 4/11/11 who look to punish violators rather than simply bringing them into compliance the Washington Post with complex federal rules. “They just have no mercy…”

Brenda Nnambi, Civil Rights 4/11/11 WashDOT uses applicable Federal bid and contract specs. On Jointly funded Program Manager, WashDOT projects, BOTH sets are included. No contractor questions, complaints or requests for clarification. Confirmed that the Washington State statute limiting ferry projects to in-State bidders still exists.

Tim McGuigan, Director of Legal 4/13/11 Washington State Ferries (WSF) went through these same issues about 15 years Services & Contracts Washington ago. WSF does not include David Bacon Wage Rates in its federally funded State Ferries Wash DOT vessel construction or repair contracts because the location of the work site (i.e., shipyard) is not known at the time the bid package is issued for such contracts. This was approved by the federal officials whom we contacted at that time and it has passed several FTA triennial audits. WSF has a page in its bid packages that states there are no federal prevailing wage rates and directs readers to the section with the state prevailing wage rates. When you advertise nationally, I presume you would apply the state prevailing wage rates for the bidder's location/shipyard. WSF includes both the FTA and FHWA clauses in its bid packages, as well as the respective Certificates, even though we may not know at that time which federal agency will actually fund the project, or if there will be dual federal funding. As one example of conflict in provisions, I've complained for years that the FTA Buy America Certificate is not aligned with the FHWA Buy America Certificate and hopefully someday we can select one or the other based on funding percentage or other criteria. We have not experienced any contractor difficulty with the dual clauses and Certificates.

Matt Paxton, President and Ian 5/4-5/11 No members had raised the issues in any forums sponsored by the Shipbuilders. Bennett, Manager, Government Relations, Shipbuilders Council of America

Tim Colton, Principal, Colton 4/17/11 Washington State Statute limiting ferry construction to in-State bidders, Company, historian and author discovered on homepage of Todd Pacific, still exists, and has not been repealed. of articles on US and Canadian Maritime Industries

Tina Dortch, Executive Director 4/18-5/6/11 No members currently involved but several interested in pursuing subcontracting and various members of the opportunities in ferry and/or ferry facility construction National Association of Minority Contractors

Anthony Robinson, President, 5/15/11 No constituents have raised related issues as yet, but some may be interested in Minority Business Legal Defense matching their capabilities with the ferry industry’s needs. and Education Fund

Jack Basso, Director of Program various The matters have not been raised in or addressed by the Civil Rights Finance and Management, Subcommittee.

American Association of State Highway and Transportation Officials and Christine Beauvais, Liaison to the AASHTO Civil Rights Subcommittee

Appendix 3 Summaries of Discussions with Federal Funding Agencies’ and Contractors’ Staffs

SOURCE DATE NATURE OF DISCUSSION

Initial briefing of FTA and FHWA 2/26/09 After discussing other issues, Jon Dunham, the Civil Rights Program Manager for personnel regarding the AKDOT&PF explained the project. The TVM approach was discussed as an objectives of the research alternative with promise to simplify the DBE review process. Both agencies’ project. A written briefing representatives indicated that any propose revisions to bid documents would regarding the project was have to be reviewed by their respective offices of Civil Rights and Chief Counsels. provided prior to the meeting. There was no objection to establishing single goals or conducting consolidated Participants included Bob Ashby, compliance reviews using one agency’s standards. DOT/OGC; John Day, Sandra Ryan Inman and Candace Groudine were designated primary pints f contact for McCrae, and Ryan Inman, FTA; their respective agencies. Candace Groudine and Sandy Talbert-Jackson, FHWA/OCR, and Lisa Mc Phee, FHWA/OCC. Allen Masuda, Associate 8/17/10 After discussing the project’s objectives and summarizing the research to-date, Administrator for Civil Rights, advised by Masuda that the FHWA’s OCR contact would be Kenley, replacing FHWA and Martha Kenley, Groudine. Problems identified and possible alternatives were discussed. It was National DBE Program agreed that the FHWA’s Civil Rights regulations were out of date and that they Coordinator, FHWA/OCR could be simplified to eliminate unnecessary and obsolete aspects. Masuda indicated his interest in supporting a pilot effort and did not object to exploring or applying the Prime Interest Agency concept. Jennifer Balis, Office of Program 8/25/10 After a brief overview of the objectives of the project, the conversation focused Administration, FHWA on FHWA’s the WHD’s policies related to Davis-Bacon wage rates for ferry construction. In response to a concern expressed by Balis regarding possibly

overloading bid specs with inapplicable wage rates, no objection was raised to the possibility of relying upon available technology to advise bidders of applicable wage rates. Also, no objection was raised to FHWA exploring with WHD whether wage rates had been set for cities from which bids had been previously received. [Later it was found that wage rates for specific cities can be obtained directly from WHD at wageratesonline.gov.] Jerry Yakawenko and Jennfer 8/27/10 After being briefed on the project, it was recommended that AKDOT&PF’s staff Balis, FHWA’s Office of Program contact the local office of the WHD (Seattle) to outline the problem and request Administration and Michael assistance, including D-B wage rates already published for shipbuilding in cities Harkins, FHwa’s Office of Chief from which bids have been received. Because of turnover, AKDOT&PF might Counsel consider requesting a refresher course related to D-B wage rates through the National Highway Institute. Ferry funds transferred from FHWA to FTA are governed by the provisions of 23 USC 104(k). Such transfers occur between the involved FHWA Division Office and the FTA Region. When funds are transferred, they are administered in conformance with applicable FTA guidance. Elie Bermudez, EEO/DBE Officer, 4/13/11 Assists Ms. R. Crump, who has lead in dealing with “people issues.” Familiar with Alaska Ship and Drydock basic Civil Rights requirements. Participated in one compliance review conducted by AKDOT&PF, which she perceived as “time-consuming.”Compiles several reports with certified payrolls as the source. She considers several of the reports administratively burdensome and duplicative. She is keenly aware of the administrative burdens associated with compiling information to meet similar reporting requirements of, FHWA (annual 1391), AKDOT&PF, which requires the “annual” 1391 monthly, EEOC (EEO-1), and OFCCP (Manpower (sic) Utilization). Tim Francis, EEO/DBE Officer, 4/13/11 Aware of but not familiar with AKDOT&PF’s Civil Rights related contract specs. He Lake Union Drydock Telephone considers the requirements “a huge paperwork burden that didn’t do any good Interview for any minorities.” Lake Union holds Federal contracts with NOAA, Navy,

USCG,and the Army’s Corp of Engineers. While OFCCP has found them in compliance, no other Federal agencies’ compliance personnel have reviewed their facilities. While familiar with the language in EO 11246, he was concerned that the compliance effort required too much paper with no discernable benefit to anyone.

Jim Cheatham, Acting Associate 4/14/11 & After Allen Masuda’s retirement, Jim Cheatham, then serving as Acting AA for Administrator for Civil Rights, 4/27/11 Planning, agreed to also assume the responsibilities for the Office of Civil Rights FHWA Telephone until a permanent replacement was selected. The project, its objectives and discussions findings to-date, and possible fixes were discussed to get some sense of which, if any of the alternatives identified would be acceptable to FHWA. The need to meet to discuss the matters further after he was briefed by the office’s designated contact and using the report of the project as the basis for an MOU with FTA were also explored. He indicated his willingness to discuss options after he and Kenley disposed of several intervening obligations and commitments.

Appendix 4

Federal Authorities Supportive of AKDOT&PF’s Request for Waiver, Exemption or Other Relief

1. The Administrative Procedure Act (APA) (6/11/46), governs the way in which administrative agencies of the federal government of the United States may propose and establish regulations. The APA also sets up a process for the United States federal courts to directly review agency decisions. 2. The Paperwork Reduction Act of 1980 (PRA) (12/11/80) - gave authority over the collection of certain information to the Office of Management and Budget (OMB). Within the OMB, the Office of Information and Regulatory Affairs (OIRA) was established with specific authority to regulate matters regarding federal information and to establish information policies. These information policies were intended to reduce the total amount of paperwork handled by the US government and the general public. The PRA mandates that federal government agencies obtain a Control Number from OMB before promulgating a form that will impose an information collection burden on the general public. Once obtained, approval must be renewed every three years. To obtain or renew approvals, agencies must complete and submit OMB Form 83-I, with the proposed form, and file it with OIRA. On Form 83-I, including an explanation why the form is needed and an estimate of the burden - in terms of time and cost - that the form will impose upon the persons required to fill it out. 3. The Regulatory Flexibility Act (I/1/81) – required Federal agencies t assess the impact of regulations on small entities as a key part of the process to issue regulations and to use less burdensome alternatives. In 1980, at the first of a series of White House Conferences on Small Business, the SBA’s Office of Advocacy reported that small firms incurred approximately $12.7 billion annually on government paperwork requirements. § 610 (b) of the Act states: “In reviewing rules to minimize any significant economic impact of the rule on a substantial number of small entities in a manner consistent with the stated objectives of applicable statutes shall consider the following factors – (1) the continued need for the rule; (2) the nature of complaints or comments received concerning the rule from the public; (3) the complexity of the rule; (4) the extent to which the rule overlaps, duplicates or conflicts with other Federal rules, and, to the extent feasible, with State or local government rules; and (5) the length of time since the rule has been evaluated or the degree to which technology, economic conditions, or other factors have changed in the area affected by the rule.

4. The Paperwork Reduction Act of 1995 (10/1/95) – among other purposes listed in § 3501. Purpose, had the aims of minimizing paperwork burdens on individuals, small businesses … Federal contractors, State, local and tribal governments, and other persons resulting from the collection of information by or for the Federal Government; strengthening partnerships between the Federal Government and State, local, and tribal governments by minimizing the burden and maximizing the utility of information created, collected, maintained, used, disseminated, and retained by or for the Federal Government; and, ensuring that information technology is acquired, used, and managed to improve performance of agency missions, including reducing information collection burdens on the public. 5. The Government Paperwork Elimination Act (GPEA) (10/21/98) - required that, when practicable, Federal agencies use electronic forms, electronic filing, and electronic signatures to conduct official business with the public by 2003. The Act requires agencies to allow individuals or entities that deal with the agencies the option to submit information or transact with the agency electronically and to maintain records electronically, when practicable. The Act specifies that electronic records and signatures are not to be denied legal effect, validity, or enforceability merely because they are in electronic form, and encouraged Federal government use of a range of electronic signature alternatives. The Act sought to "preclude agencies or courts from systematically treating electronic documents and signatures less favorably than their paper counterparts.” It also addressed the matter of private employers being able to use electronic means to store, and file with Federal agencies, information pertaining to their employees. The GPEA required that electronic records and their related electronic signatures not to be denied legal effect, validity, or enforceability merely because they are in electronic form. 6. The E-Government Act of 2002 (enacted 12/17/02 with an effective date for most provisions of 4/17/03) had the aims of improving management and promotion of electronic government services and processes; establishing a framework of measures requiring that Internet-based information be employed to improve citizen access to government information and services, and for other purposes, including, but not limited to reducing costs and burdens for businesses and other Government entities. 7. Executive Order 12612 - directs Federal agencies to refrain from substituting their judgment for that of their recipients unless the matter is primarily a Federal concern and to defer, to the maximum extent feasible, to the States to establish standards rather than setting national standards. EO 12866 as supplemented by EO 12875 and EO13272 and as amended by EOs 13258 and 13422, Enhancing Intergovernmental Partnership - requires each agency to reduce regulatory burdens, eliminate conflict and duplication, and streamline its waiver process and consider applications by a State, local or tribal government for a waiver of statutory or regulatory requirements to enhance the Intergovernmental Partnership by

addressing “…the cumulative effect of unfunded Federal mandates…” on the “…strained budgets of State, local, and tribal governments. EO 12866 requires each agency to: ensure the benefits of its regulations justify its costs; tailor regulations to impose the least burden to attain regulatory objectives, considering the effects of cumulative regulations; and, “specify performance objectives, rather than specifying the behavior or manner of compliance that regulated entities must adopt; and identify and assess available alternatives to direct regulation.” EO 13563 (1/18/11) requires the regulatory system to “…promote predictability and reduce uncertainty…, identify and use the best, most innovative, and least burdensome tools to achieve regulatory ends…, and, measure and seek to improve the actual results of regulatory requirements. ”Further, in Sec. 3., the EO recognizes that “some sectors and industries face a significant number of regulatory requirements, some of which may be redundant, inconsistent, or overlapping.”Sec. 4., addresses the need to “reduce burdens and maintain flexibility.” And, Sec. 5., requires agencies to “…consider how best to promote retrospective analysis(sic) of rules that may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned 8. Memo to Heads of Executive Departments and Agencies M-07-07 - Issuance of OMB’s “Final Bulletin for Agency Good Guidance Practices” with the aim of ensuring and maximizing the quality, utility, objectivity and integrity of information disseminated by Federal agencies, pursuant to the Information Quality Act. 9. 41 CFR 60-1. § 60-1.1 Purpose and application. “The purpose of the regulations in this part is to achieve the aims of parts II, III, and IV of Executive Order 11246 for the promotion and insuring (sic) of equal opportunity for all persons, without regard to race, color, religion, sex, or national origin, employed or seeking employment with Government contractors or with contractors performing under federally assisted construction contracts… The rights and remedies of the Government hereunder are not exclusive and do not affect rights and remedies provided elsewhere by law, regulation, or contract; neither do the regulations limit the exercise by the Secretary or Government agencies of powers not herein specifically set forth, but granted to them by the order.” 10. 41 CFR § 60-4.9 Incorporation by operation of the order. “By operation of the order, the equal opportunity clause contained in §60–1.4, the Notice of Requirement for Affirmative Action to Ensure Equal Employment Opportunity (Executive Order 11246) contained in §60–4.2, and the Standard Federal Equal Employment Opportunity Construction Contract Specifications (Executive Order 11246) contained in §60–4.3 shall be deemed to be a part of every solicitation or of every contract and subcontract, as appropriate, required by the order and the regulations in this chapter to include such clauses whether or not they are physically incorporated in such solicitation or contract and whether or not the contract is written.” 11. 23 USC 101(e) Definitions and declaration of policy requires that “… to the maximum extent possible the procedures to be utilized by the Secretary and all other heads of Federal

departments, agencies, and instrumentalities for carrying out this title and any other provision of law relating to Federal highway programs shall encourage the substantial minimization of paperwork and interagency decision procedures and the best use of available manpower (sic) and funds so as to prevent needless duplication and unnecessary delays at all levels of government.” 12. 23 USC 115. Advance construction (a) In General. - The Secretary may authorize a State to proceed with a project under this title – (1) without the use of Federal funds; and (2) in accordance with all procedures and requirements applicable to the project other than those procedures and requirements that limit the State to implementation of a project – (A) with the aid of Federal funds previously apportioned or allocated to the State; or (B) with obligation authority previously allocated to the State. (b) Obligation of Federal Share. - The Secretary, on the request of a State and execution of a project agreement, may obligate all or a portion of the Federal share of a project authorized to proceed under this section from any category of funds for which the project is eligible. (c) Inclusion in Transportation Improvement Program. – The Secretary may approve an application for a project under this section only if the project is included in the transportation improvement program of the State developed under section 135(f). 13. UMTA Circular C 4704.1(7/26/88)– EQUAL EMPLOYMENT OPPORTUNITY GUIDELINES FOR GRANT RECEIPIENTS – in Chapter II § 1 requires recipients to “redelegate …(the obligations set forth in the Circular)…to any contractor or subcontractor required to provided EEO on behalf of a recipients.”Two other provisions of the Circular mention contractors. Chapter III at §1 and § 2.a.(1), in which contractors are required to not discriminate based on age and “creed.”While incorporating the proscription to not discriminate based on “handicap,” and requiring a written EEO policy, it allows including “handicap” as a prohibited factor at the discretion of the agency. 14. 23 USC 114 (c) - Construction Work in Alaska, authorizes payment of per diem to workers on remote projects. “(1) In general. - The Secretary shall ensure that a worker who is employed on a remote project for the construction of a highway or portion of a highway located on a Federal- aid system in the State of Alaska and who is not a domiciled resident of the locality shall receive meals and lodging. (2) Lodging. - The lodging under paragraph (1) shall be in accordance with section 1910.142 of title 29, Code of Federal Regulations (relating to temporary labor camp requirements). (3) Per diem. -

(A) In general. - Contractors are encouraged to use commercial facilities and lodges on remote projects, however, when such facilities are not available, per diem in lieu of room and lodging may be paid on remote Federal highway projects at a basic rate of $75.00 per day or part of a day the worker is employed on the project. Where the contractor provides or furnishes room and lodging or pays a per diem, the cost of the amount shall not be considered a part of wages and shall be excluded from the calculation of wages. (B) Secretary of labor. - Such per diem rate shall be adopted by the Secretary of Labor for all applicable remote Federal highway projects in Alaska. (C) Exception. - Per diem shall not be allowed on any of the following remote projects for the construction of a highway or portion of a highway located on a Federal-aid system: (i) West of Livengood on the Elliot Highway. (ii) Mile 0 on the Dalton Highway to the North Slope of Alaska; north of Mile 20 on the Taylor Highway. (iii) East of Chicken on the Top of the World Highway and south of Tetlin Junction to the Alaska Canadian border. (4) Definitions. - In this subsection, the following definitions apply: (A) Remote. - The term "remote", as used with respect to a project, means that the project is 65 road miles or more from the international airport in Fairbanks, Anchorage, or Juneau, Alaska, as the case may be, or is inaccessible by road in a 2- wheel drive vehicle. (B) Resident. - The term "resident", as used with respect to a project, means a person living within 65 road miles of the midpoint of the project for at least 12 consecutive months prior to the award of the project. 15. 23 USC 112 e.2. (A) State law. - Paragraph (1) shall apply in a State except to the extent that such State adopts or has adopted by statute a formal procedure for the development of a contract clause described in paragraph (1) or adopts or has adopted a statute which does not permit inclusion of such a contract clause. 16. 23 USC 115 Advance Construction (a) In General. - The Secretary may authorize a State to proceed with a project authorized under this title – (3) without the use of Federal funds; and (4) in accordance with all procedures and requirements applicable to the project other than those procedures and requirements that limit the State to implementation of a project – (A) with the aid of Federal funds previously apportioned or allocated to the State; or (B) with obligation authority previously allocated to the State. (b) Obligation of Federal Share. - The Secretary, on the request of a State and execution of a project agreement, may obligate all or a portion of the Federal share of a project authorized to proceed under this section from any category of funds for which the project is eligible. 17. 23 CFR 635 and FTA Circular 4220.1F allow States to award Design-Build contracts.

Appendix 5 Legislative, Executive, & Regulatory Constraints

1. 23 USC 112 (a) requires contracts to be advertised… … unless the State transportation department demonstrates, to the satisfaction of the Secretary, that some other method is more cost effective or that an emergency exists. 2. 23 USC 112 (b) requires each contract to be awarded by competitive bidding. The same section requires that “(N)o requirement or obligation shall be imposed as a condition precedent to the award of a contract to such bidder for a contract…unless such requirement or obligation is otherwise lawful and is specifically set forth in the advertised specifications.” 3. 49 USC 5325 (a) Competition. –“ Recipients of assistance under this chapter shall conduct all procurement transactions in a manner that provides full and open competition as determined by the secretary.” 4. FHWA Form 1273, which contains Required Bid and Contract Provision s, requires that the form be included in lower tier subcontracts and purchase orders. The language in section I.2. states, unequivocally, that: “(T)he Required Contract Provisions shall not be incorporated by reference in any case.” The same language was included in the form developed by AKDOT&PF for use on FTA funded contracts. 5. 23 CFR 633§ 633.102 Applicability. (b) Form FHWA–1273, “Required Contract Provisions, Federal-aid Construction Contracts,” contains required contract provisions and required proposal notices that are required by regulations promulgated by the FHWA or other Federal agencies. The required contract provisions of Form FHWA–1273 shall be physically incorporated in each Federal-aid highway construction contract other than Appalachian construction contracts (see §633.104 for availability of form). (e) The contractor shall insert in each subcontract, except as excluded by law or regulation, the required contract provisions contained in Form FHWA–1273 and further require their inclusion in any lower tier subcontract that may in turn be made. The required contract provisions of Form FHWA–1273 shall not be incorporated by reference in any case. The prime contractor shall be responsible for compliance by any subcontractor or lower tier subcontractor with the requirements contained in the provisions of Form FHWA–1273. (f) The State highway agency (SHA) shall include the notices concerning certification of nonsegregated facilities and implementation of the Clean Air Act and Federal Water Pollution Control Act, pursuant to 40 CFR part 15, in all bidding proposals for Federal-aid highway construction projects. As the notices are reproduced in Form FHWA–1273, the SHA may include Form FHWA–1273 in its entirety to meet this requirement.

6. 23 CFR 635 -§ 635.112 Advertising for bids and proposals. (a) No work shall be undertaken on any Federal-aid project, nor shall any project be advertised for bids, prior to authorization by the Division Administrator... (d) Nondiscriminatory bidding procedures shall be afforded to all qualified bidders regardless of National, State or local boundaries and without regard to race, color, religion, sex, national origin, age, or handicap. If any provisions of State laws, specifications, regulations, or policies may operate in any manner contrary to Federal requirements, including title VI of the Civil Rights Act of 1964, to prevent submission of a bid, or prohibit consideration of a bid submitted by any responsible bidder appropriately qualified in accordance with §635.110, such provisions shall not be applicable to Federal-aid projects. Where such non-applicable provisions exist, notices of advertising, specifications, special provisions or other governing documents shall include a positive statement to advise prospective bidders of those provisions that are not applicable.

Appendix 6

Business and Employment Opportunities in Constructing Ferry Facilities

1. Architecture 2. Asphalt paving 3. Carpentry (rough, framing and finish) 4. Concrete (cast-in-place, curb and gutter, sidewalks & ramps, cutting, finishing, foundations, paving, ready-mix) 5. Computer-aided design and construction 6. Construction management 7. Crane/heavy equipment operation 8. Erosion control/rip-rap 9. Exterior painting and sand-blasting 10. Fencing, guardrail installation and repair 11. Flooring installation and repair 12. Glazing 13. Hydro-seeding 14. HVAC 15. Interior Design 16. Insulation 17. Interior Painting 18. Inspection services 19. Landscaping 20. Masonry, stonework 21. Materials testing 22. Metal Building erection & repair 23. Millwork 24. Pavement & Parking lot marking 25. Pile-driving 26. Plumbing 27. Refuse collection and disposal 28. Sheetrock installation, taping, &finishing 29. Signage 30. Steel erection 31. Steel fabrication & welding 32. Telecommunications 33. Timber beam installation and repair/replacement 34. Trucking

Appendix 7

Recipients of Ferry Boat Discretionary Funds 1998-2010

1. Alabama 19. Montana 2. Alaska 20. New Jersey 3. Arkansas 21. New York 4. California 22. North Carolina 5. Connecticut 23. Ohio 6. Delaware 24. Oklahoma 7. Florida 25. Oregon 8. Georgia 26. Pennsylvania 9. Hawaii 27. Puerto Rico 10. Illinois 28. Rhode Island 11. Iowa 29. Tennessee 12. Kentucky 30. Texas 13. Louisiana 31. Utah 14. Maine 32. Virgin Islands 15. Massachusetts 33. Washington 16. Michigan 34. West Virginia 17. Mississippi 35. Wisconsin 18. Missouri 36. Virginia

Appendix 8 Major Civil Rights Authorities

The legislative, executive and judicial mandates enacted, modified and refined over the years were built on foundations laid immediately following the Civil War. Most of the post Civil War Civil Rights statutes were either retracted or found unconstitutional by the courts, however several remain intact. Their language clearly sets the standard for fair treatment: that all persons be given the same rights and privileges “as enjoyed by white citizens.”

Immediately after the Civil War, then after World War II, and then –again – as a result of the Civil Rights movement, beginning with the Civil Rights Act of 1957, the Congress, several Presidents and the Courts took actions to address matters which – historically – had deprived people of the right to vote and access to employment, training, and business opportunities. A long series of legislative and executive mandates and court decisions provide strong underpinnings for Federal and State actions to address and remedy systemic discrimination.

The Civil Rights Act of 1866 provides that: (A)ll persons within the jurisdiction of the United States shall have the same right … to make and enforce contracts, to sue, be parties, give evidence, and to the full and equal benefit of all laws and proceedings for the security of their persons and property as is enjoyed by white citizens, and shall be subject to like punishments, pains, penalties, taxes, licenses, and exactions of every kind, and no other.”

The Civil Rights Act of 1871 provides that: “(E)very person who, under color of any statute, ordinance, regulation, custom or usage, of any State or Territory, subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.”

After the Civil Rights movement awakened the consciousness of the Nation, including many in Congress, several landmark statutes deserve attention. The Civil Rights Act of 1957, while focused primarily on voting rights, established the Civil Rights Division at the US Department of Justice. The bedrock statute, with which most are familiar and on which many others have been based is the Civil Rights Act of 1964, pertinent parts of which are discussed in Section 2.5.

Section 504 of the Rehabilitation Act of 1973 prohibited discrimination based on physical or mental disability.

The Age Discrimination Act of 1976 prohibited discrimination based on age.

Section 324 of Title 23, USC, prohibits discrimination based on sex.

The Civil Rights Remedies Equalization Act of 1986, which provides at (a) that: (1) A state shall not be immune… from suit in Federal court for a violation of Section 794 of Title 29, title IX of the Education Amendments of 1972, the Age Discrimination Act of 1975, … title VI of the Civil Rights Act of 1964,… or the provisions of any other Federal Statute prohibiting discrimination by recipients of Federal financial assistance.” And at (2) In a suit against a State for a violation of a statute referred to in paragraph (1), remedies (including remedies both at law and in equity) are available for such a violation to the same extent as such remedies are available for such violation in a suit against a private entity other than a State.”

The Civil Rights Restoration Act of 1987 clarified the intent of Congress in Title VI of the 1964 Civil Rights Act, Title IX of the Education Amendments, the Age Discrimination act of 1975, and Section 504 of the Rehabilitation Act of 1973, restoring the broad, institution-wide scope of coverage of the nondiscrimination statutes to include all programs and activities of Federal-aid recipients, sub-recipients and contractors, whether such programs and activities involved federal funds or not.

The Americans with Disabilities Act provided enforceable standards to address discrimination against persons with disabilities.

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Appendix 9 Alternative #1 DRAFT SPECIAL PROVISION

DBE and MINORITY and FEMALE EMPLOYMENT and TRAINING GOALS

Notice of requirements for the bidder/contractor to not discriminate and to take affirmative action to ensure contracting, employment and training opportunities. Applicable goals are specified in the attached sheet titled: “DBE, employment, and training goals for ferry construction, repair, or refurbishment.”

1. Nondiscrimination – It is illegal to discriminate against subcontractors, material suppliers, vendors, or applicants for training positions based on their race, color, sex, national origin, age, or disability. 2. If a goal is specified for DBE utilization, it is expressed as a percentage of the total dollar value of the entire project. If no DBE goal is specified, it is either to comport with a recent court case or because insufficient information exists about the availability of experienced and interested DBEs in the specified city but does not relieve the contractor of the requirements to not discriminate in its selection and retention of subcontractors, material suppliers and vendors, and to identify and solicit bids from potential DBE subcontractors in the area surrounding its facilities. 3. The goals for minority and female employment and for training are expressed in percentage terms for the Contractor’s aggregate workforce in each trade on all construction work in the covered area. 4. These goals are applicable to all the Contractor’s construction work (whether or not it is Federal, federally assisted, or privately funded) performed in the covered area. If the Contractor performs piecework in a geographical area located outside of the covered area, it shall apply the goals established for such geographical area where the work is actually performed. With regard to this second area, the Contractor also is subject to the goals for both its federally involved and non-federally involved construction. 5. The Contractor must comply with Executive Order 11246 as implemented by the EEO Clause in the regulations at 41 CFR Part 60-1.4 (a), and other applicable parts of 60-4, which are, hereby incorporated by reference and by operation of the Order. Compliance with EO 11246 will be determined by the Office of Federal Contract Compliance Programs and will be based on the Contractor’s implementing the Equal Opportunity Clause and specific affirmative action obligations required by the specifications set forth in 41 CFR 60-4.3(a), and its effort 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

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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. 6. The EEO and Affirmative Action provisions of the Federal Transit Administration (FTA) and/or the Federal Highway Administration (FHWA), depending on whether either or both of the agencies are funding the project, apply to all work performed by the contractor and are incorporated in the Bid, Contract, and all subcontracts and purchase orders by reference and by their operation. 7. As used in this Notice and in the contract resulting from this solicitation, the “covered area” is the county or counties in which the cities in the attached sheet are located. In the event a Bidder’s facility is not located in a city on the attached sheet, it is the Bidder’s responsibility to ascertain the applicable goals and insert them into the spaces provided, and initial in the space provided and sign the sheet for its bid to be considered responsive.

DBE, Employment, and Training Goals For Ferry Construction, Repair, or Refurbishment

DBE % Goal Employment & Training Goals State City Race Race Contractor’s

Minoriti Women Initials Overall FTANeutral FHWA FTAConscious FHWA OJT es

Alaska Ketchikan 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Washington Seattle 15.85 7.2% 6.9% Oregon Portland 11.50 4.5% 6.9% 6.9% 6.9% 6.9% Revised DBE, EEO and OJT Goal Template

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Appendix 10

Alternative #2 DRAFT SPECIAL PROVISION DBE and MINORITY and FEMALE EMPLOYMENT and TRAINING GOALS

NOTE: Applicable statutes, Executive Orders and regulations governing Civil Rights responsibilities of contractors are available online at ______. They are incorporated herein by reference and may be incorporated by reference in lower tier subcontracts and purchase orders. If more specific advice, assistance or an interpretation is needed, contact the Civil Rights Manager, Jon Dunham at ______to make arrangements to develop or enhance the capabilities of your staff to prevent avoidable costs related to complaints and administrative burdens. Periodic training is provided to equip contractors’ responsible staff members to recognize and prevent potentially discriminatory practices and reduce your vulnerability to complaints, suits, or findings of non-compliance.

NONDISCRIMINATION: It is expected that the contractor will not discriminate against anyone based on their race, color, sex, national origin, age, disability, or limited English proficiency. No process employed, route used, or site where construction refuse or hazardous materials are disposed of shall cause damage or harm to any minority, low-income, Indian or Alaska-Native community. No part of any facility can be segregated based on the prohibited factors with the exception of restroom and bunking facilities.

EQUAL OPPORTUNITY: It is also expected that the contractor will not discriminate against anyone based on the previously mentioned prohibited factors in selecting and retaining subcontractors, material suppliers and vendors or participants in apprenticeship or training programs.

EQUAL EMPLOYMENT OPPORTUNITY: In the event underrepresentation or underutilization of minorities or women exists in any class or classification of workers at any of the contractor’s facilities, affirmative action is expected within the limits of available opportunities, with the objective of correcting such problems as quickly as possible. Equal Opportunity is required in all terms and conditions of employment, including, but not limited to recruitment, selection, hiring, rates of pay, training, promotion, working conditions, job, tool and equipment assignments, layoff, recall, discipline, termination, and optional and forced overtime.

DISCRIMINATION COMPLAINTS: In the event the contractor receives a complaint of discrimination, whether in the context of employment or in any of its programs or activities, it

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is expected that it will be investigated fully, properly and expeditiously. If assistance in conducting an investigation is required, contact ______at ______. All complainants must be informed at the first opportunity of their right to file with the Commission for Human Rights and/or the Equal Employment Opportunity Commission, if the matter is employment related, or the AKDOT&PF, the Federal agency providing funding for the project, the Civil Rights Division of the US Department of Justice or the US Commission on Civil Rights, if the matters involve discriminatory impacts of a contractor’s programs or activities. Complaints related to rates of pay or overtime should be directed to the Wage and Hour Division of the US Department of Labor.

Informal resolution of complaints of discrimination is highly recommended. In any instance where discrimination is found by either a formal investigation or compliance review, action sufficient to stop the offense and prevent a recurrence is required. Whenever a failure to provide EEO when opportunities existed is determined, the contractor may be subjected to a targeted or full compliance review to ascertain whether a persistent pattern, practice or environment exists that would violate any of the applicable State or Federal statutes, Executive Orders, implementing regulations or guidance.

Even if a complaint is determined to be unfounded, retaliation against a complainant is prohibited. Any person who believes s/he has been subjected to retaliation may file a complaint and seek redress. Whenever a complaint investigation determines that a hostile work environment or sexually charges workplace exists, immediate action to defuse the situation is required and possible outside assistance may be needed to ensure the situation is properly and effectively addressed. Courts have found that when an employer “knew or should have known” about a discriminatory situation in a workplace and did not take timely action to correct it, the employer can be found liable to the party injured.

The contractor’s management and supervisory personnel must be made aware of the contractor’s expectations regarding preventing discrimination and providing EEO. Each manager, supervisor, foreman, or team leader must know that they are expected to meet high standards because their improper performance can cost the contractor. Courts have found that, as agents of the contractor, the contractor can be found responsible for the results of their behavior, even when they are off duty. As soon as the employer is made aware of a situation that might jeopardize his or her bottom line, timely action to stop the offense and prevent a recurrence is required.

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DBE, Employment, and Training Goals For Ferry Construction, Repair, or Refurbishment

State City DBE % Goal Employment & Contractor’s Training Goals Race Race Initials

Overall FTANeutral FHWA FTAConscious FHWA Minorities Women OJT

Alaska Ketchikan 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Washington Seattle 15.85 7.2% 6.9% Oregon Portland 11.50 4.5% 6.9% 6.9% 6.9% 6.9% Revised DBE, EEO and OJT Goal Template

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Appendix 11

DRAFT Special Notice to Bidders – OJT

Contractors must comply with Administrative Order 226, which establishes a 10 percent goal for hiring apprentices in certain job categories on highway, airport, harbor, dam, tunnel, utility or dredging projects awarded by the Alaska Department of Transportation and Public Facilities. This Administrative Order will apply to all such projects advertised after September 1, 2005, where a project’s construction costs exceed 2.5 million dollars.

For further details, please visit http://labor.state.ak.us.lss.forms/ApprenHireReg.pdf

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Appendix 12

DRAFT - Special Notice to Bidders - DBE

Based on guidance from the US Department of Transportation’s General Counsel, effective January 10, 2006, the Alaska Department of Transportation and Public Facilities implemented a Race-Neutral Disadvantaged Business Enterprise (DBE) program by not setting project goals on highway, mass transit and airport projects. All forms and reports required under the DBE program will continue to be required under these contracts without project-specific goals.

Specifically, contractors must continue to report creditable DBE participation and payments made to DBEs on the Monthly Summary of Disadvantaged Business Enterprise Participation (Form 25A-336). This report allows the Department to continue to accurately report DBE participation to the Federal Highway Administration, Federal Transit Administration, and Federal Aviation Administration.

Contractors must also not discriminate in selecting and retaining DBE subcontractors, material suppliers or vendors and continue to provide opportunities for DBE firms to participate on the highway, mass transit, and airport projects obtained. The absence of a project-specific goal does not relieve the Contractor of the requirement to not discriminate and to provide equal opportunity to DBEs when selecting subcontractors, material suppliers and vendors.

Any questions about this notice may be directed to Jon Dunham, Manager of the Civil Rights Office, at 907-269-00850 or by e-mail at [email protected].

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Appendix 13

DRAFT Special Notice to Bidders DBE and MINORITY and FEMALE EMPLOYMENT and TRAINING GOALS

NOTICE OF REQUIREMENTS FOR AFFIRMATIVE ACTION TO ENSURE CONTRACTING, EMPLOYMENT, AND TRAINING OPPORTUNITIES. APPLICABLE GOALS ARE SPECIFIED IN THE ATTACHED SHEET TITLED: “DBE, EMPLOYMENT, AND TRAINING GOALS FOR FERRY CONSTRUCTION, REPAIR, OR REFURBISHMENT.”

1. If a goal is specified for DBE utilization, it is expressed as a percentage of the total dollar value of the entire project. If no DBE goal is specified, it is either to comport with a recent court case or because insufficient information exists about the availability of experienced and interested DBEs in the specified city but does not relieve the contractor of the requirements to not discriminate in its selection and retention of subcontractors, material suppliers and vendors, and to identify and solicit bids from potential DBE subcontractors in the area surrounding its facilities. 2. The goals for minority and female employment and for training are expressed in percentage terms for the Contractor’s aggregate workforce in each trade on all construction work in the covered area as shown on the attached sheet. 3. These goals are applicable to all the Contractor’s construction work (whether or not it is Federal or federally assisted) performed in the covered area. If the Contractor performs construction work in a geographical area located outside of the covered area, it shall apply the goals established for such geographical area(s) where the work is actually performed. With regard to additional areas, the Contractor also is subject to the goals for both its federally involved and non-federally involved construction. 4. The Contractor’s compliance with Executive Order 11246 as implemented by the EEO Clause in the regulations at 41 CFR Part 60-1.4 (a), and applicable parts of 60-4, which are, hereby incorporated by reference and by operation of the Order. Compliance with EO 11246 will be determined by the Office of Federal Contract Compliance Programs and will be based on the Contractor’s implementing the Equal Opportunity Clause and specific affirmative action obligations required by the specifications set forth in 41 CFR 60-4.3(a), and its effort 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

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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. 5. The EEO and Affirmative Action provisions of the Federal Transit Administration (FTA) and/or the Federal Highway Administration (FHWA), depending on whether either or both of the agencies are funding the project, apply to all work performed by the contractor and are incorporated in the Bid, Contract, and all subcontracts and purchase orders by reference and by their operation. 6. As used in this Notice and in the contract resulting from this solicitation, the “covered area” is the county or counties in which the cities in the attached sheet are located. In the event a Bidder’s facility is not located in a city on the attached sheet, it is the Bidder’s /Contractor’s responsibility to ascertain the applicable goals and insert them into the space(s) provided, initial in the space provided and sign the sheet for its bid to be considered responsive.

The cities listed in the attachment to this Notice are those from which AKDOT&PF has historically received bids for ferry work. By initialing beside the goals for the area in which the bidder’s facilities are located, the Bidder acknowledges that it is aware of the applicability of the initialed goals to work done on the contract. In the event a bidder has facilities at which work is proposed to be conducted and the goals for that area are not listed, the Bidder is responsible for ascertaining and inserting the applicable goals in the spaces provided and initialing beside them. Not completing this addendum will make the bid non-responsive.

______Printed Name of Bidder’ Signature of Bidder’s Authorized Date Authorized Representative Representative

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DBE, Employment, and Training Goals Attachment For Ferry Construction, Repair, or Refurbishment

DBE % Goal Employment Goals State City Overall Race Race Minori Women OJT Contractor’s Neutral Conscious ties Initials FTA FHW FTA FHWA A Anchorage 13.00 9.2 5.7 3.8 7.3 8.7% 6.9% Douglas 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Juneau 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Ketchikan 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Alaska Petersburg 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Sand Point 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Seward 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% S. Fairbanks 13.00 9.2 5.7 3.8 7.3 15.1% 6.9% Escatawpa 9.9 30.3% 6.9% Mississippi Moss Point 9.9 30.3% 6.9% Pascagoula 9.9 30.3% 6.9% Anacortes 15.85 8.1% 6.9% Washington Bellingham 15.85 8.1% 6.9% Seattle 15.85 7.2% 6.9% Texas Amelia 11.00 22.6% 6.9% Orange 11.00 22.6% 6.9% Connecticut Bridgeport 12.80 5.3% 6.9% Florida Ft. Lauderdale-Dania 8.12 16.5% 6.9% Louisiana Morgan City 10.00 24.1 6.9% New York Mamaroneck 12.00 - 6.9% Oregon Portland 11.50 4.5% 6.9% Wisconsin Manitowoc 11.69 1.0 6.9% 6.9%

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Appendix 14 REQUIRED REGULATORY ANALYSES  Executive Order 12866 and the Small Business Regulatory Enforcement Fairness Act; Regulatory Flexibility to determine whether the rule is economically significant within the meaning of Executive Order 12866, or a ``major rule'' under the Unfunded Mandates Reform Act or Section 801 of the Small Business Regulatory Enforcement Fairness Act.  Unfunded Mandates Reform Act – to certify that the rule does not impose any federal mandate that may result in increased expenditures by State, local, or tribal governments, or increased expenditures by the private sector, of more than $100 million in any year.  Executive Order 13132 (Federalism)- to ensure the rule does not have federalism implications as outlined in E.O. 13132, The rule must not have substantial direct effects on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government.  Executive Order 13175, Indian Tribal Governments - to determine whether the rule has ``tribal implications,'' i.e. ``substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the federal government and Indian tribes.'' If so, a tribal summary impact statement would have to be prepared.  Section 654 of the Treasury and General Government Appropriations Act, 1999 - Effects on Families. A certification is required regarding whether the rule will adversely affect the well-being of families.  Executive Order 13045, Protection of Children – the rule must be reviewed to determine whether it is subject to E.O. 13045 because of its economic significance as defined in E.O. 12866 and whether it impacts the environmental health or safety risks of children.  The National Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the regulations of the Council of Environmental Quality, 40 CFR part 1500 et seq., and the involved Department’s NEPA procedures – to determine whether the rule will have a significant impact on the quality of the human environment. If so, an environmental assessment or an environmental impact statement would be required.  Executive Order 13211, Energy Supply – to determine whether the rule will have a significant adverse effect on the supply, distribution, or use of energy.  Executive Order 12630, Constitutionally Protected Property Rights – to determine whether the rule would involve implementing a policy ``that has taking implications'' or that could impose limitations on private property use.  Executive Order 12988, Civil Justice Reform Analysis - to determine whether the rule will unduly burden the Federal court system. The rule must be: (1) reviewed to eliminate drafting errors and ambiguities; (2) written to minimize litigation; and, (3) written to provide a clear legal standard for affected conduct and to promote burden reduction.

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