Jeffery Peyton Office of Contracts Ohio Department of Transportation

The USDOT OIG has identified DBE fraud as one of their top priorities. Increased oversight of the DBE Program by numerous Federal agencies to reduce fraud and ensure the DBE Program benefits truly disadvantaged businesses.

DBE participation towards the established project goal is counted only if the DBE is performing a Commercially Useful Function. The DBE must carry out its contract responsibilities by actually performing, managing, and supervising the work they have been hired to perform.

Management Equipment Workforce Materials Performance

Scheduling work operations Receive quotes and ordering of all materials Preparing and submitting certified payrolls Hiring and firing employees Make all operational and managerial decisions Supervision of daily operations

DBE employees supervised by another contractor DBE provides little or no supervision of work DBEs superintendent is not a regular employee DBE firm's owner is not aware of the status of the work or the performance of the business

Equipment lease agreements are required to be long term (1 year +) and at competitive rates A DBE firm may lease specialized equipment on an ad hoc basis from another contractor, excluding the prime contractor or subsidiary Operation of the equipment must be subject to the full control of the DBE, and they are expected to provide the operator for that equipment (unless specialized)

Trucks and/or equipment used by DBE firm belong to the prime contractor Equipment used by the DBE belongs to a another contractor with no formal lease agreement Equipment signs and markings cover another owner's identity, usually through the use of magnetic signs

DBE firms must keep a regular workforce DBE contractors cannot "share" employees with non-DBE contractors, especially the prime contractor or a subsidiary of the prime DBE firm must be responsible for all payroll and labor compliance requirements for all employees within the control of the company

Movement of employees between contractors Employee paid by both DBE and prime Employee working for prime in morning and DBE in afternoon

The DBE must be responsible for: The ordering of all materials and negotiating cost Arranging delivery and taking possession of, and Paying for all materials and supplies provided Materials may not be drop shipped to the project by the manufacturer unless it is standard industry practice, and written prior approval is given to do so.

Materials for the DBE are ordered and/or paid for, by the prime contractor Materials for the DBE are delivered to, billed to, or paid for by another contractor. Standard materials are drop shipped to the project by the manufacturer. DBE never takes possession of the materials.

The DBE must be responsible for the performance, management and supervision of all work identified in their subcontract agreement (C92)

Work being done jointly by DBE firm and another contractor. The work to be performed outside of the DBE's known experience or capability DBE works for only one prime contractor or a large portion of the firms contracts are with one contractor

Immediate suspension of work; Withholding of project payments from the prime; Investigation by the U.S. DOT Office of the Inspector General and/or the U.S. Attorney; Revoke DBE certification; and/or pre- qualification Pursue debarment of the DBE firm, prime contractor and/or subcontractor.