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Airport Business Diversity Conference FAA DBE Enforcement and Compliance

Airport Business Diversity Conference FAA DBE Enforcement and Compliance. Enforcement and Compliance. Enforcement of DBE requirements imposed by Federal Government

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Airport Business Diversity Conference FAA DBE Enforcement and Compliance

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  1. Airport BusinessDiversity Conference FAA DBE Enforcement and Compliance

  2. Enforcement and Compliance Enforcement of DBE requirements imposed by Federal Government • Accept federal grant funds - airport sponsor must comply with Civil Rights statutes, Executive Orders, and other federal regulations, including • 49 USC 47123, 47107(e), and 47113 • 49 CFR Part 26 • Sponsors must have DBE program if awarding $250,000 or more in AIP funds • 49 CFR 26.21

  3. Enforcement and Compliance Airport Sponsors • Compliance reviews by FAA Office of Civil Rights • 14 CFR Part 16 Airport Enforcement Proceeding • Loss of AIP Funds • Withhold grant funds • Terminate grant eligibility • Repay AIP Funds

  4. Enforcement and Compliance Primes, DBEs and Non-DBE Subs • Immediate suspension of work • Cessation or withholding of project payments • Investigation by the U.S. DOT OIG • Prosecution by U.S. DOJ of the prime, DBE firm, and other parties including airport sponsor with knowledge of the fraud and deceit • Fines • Jail • Suspension and Debarment of prime contractor, DBE firm, and/or non-DBE subcontractor • Listed on the Federal Government’s Excluded Parties List System; not eligible to participate in Federal contracts • http://epls.arnet.gov • DBE Monitoring Agreement • DOT directive to Uniform Certification Program (UCP) to initiate proceeding to remove DBE/ACDBE certification

  5. Enforcement and Compliance Identify DBE Fraud • Monitor contracts to verify named DBE is performing commercial useful function and is properly compensated • Sponsors must be diligent in monitoring contracts to detect fraud • Look for Red Flags

  6. Enforcement and Compliance Red Flags for Potential DBE Fraud Schemes • Minority owner lacking background, expertise, or equipment to perform subcontract work • Employees shuttling back and forth between prime contractor and minority-owned business payrolls • Business names on equipment and vehicles covered with paint or magnetic signs • Orders and payment for necessary supplies made by individuals not employed by minority-owned business • Prime contractor facilitated purchase of minority-owned business • Minority-owned business owner never present at job site • Prime contractor always uses the same minority-owned business

  7. Enforcement and Compliance Report Concerns About Fraud, Waste, Abuse, or Mismanagement to OIG Hotline • OIG Hotline - available 24 hours a day, 7 days a week • online complaint form: http://www.oig.dot.gov/hotline • telephone: 800-424-9071 • fax: 540-373-2090 • e-mail: hotline@oig.dot.gov • mail: USDOT Inspector General, P.O. Box 708, Fredericksburg, VA 22404-0708

  8. Enforcement and Compliance Recent DBE Fraud Case • US alleged DBE fraud against John Carlo, Inc. and Angelo Iafrate Construction Company • for falsely claiming DBE BN & M Trucking performed substantial work on AIP project at Detroit Wayne County Metropolitan Airport • merely a pass-through used to obtain the appearance of DBE participation • Firms paid the U.S. $1.4 million to resolve allegations • Firms entered into administrative agreements with FAA to ensure future compliance with DBE requirements

  9. Enforcement and Compliance Davis v. Jackson County Airport FAA Docket No. 16-10-01 (January 18, 2011) Complainant alleged • Airport Authority failed to adhere to DBE rules; ignored his verbal and written input as DBELO; DBE program not narrowly tailored – goals arbitrarily established • Violations of Grant Assurance No. 30 Civil Rights, No. 37 DBE, and retaliation Airport Authority denied the allegations and asserted employee didn’t have standing to file Part 16 Complaint FAA Director found • Airport Authority took reasonable steps in DBE goal methodology to ensure nondiscrimination in award and performance of federally-assisted contract and administration of DBE Program Part 26 • Airport Authority practiced good faith efforts and exercised due diligence. • Retaliation claim not supported by reliable evidence No Appeal – Director’s Determination is Final Decision

  10. Questions

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