U. S. ENVIRONMENTAL PROTECTION AGENCY OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION In Re: ) ) PUBLIC HEARING ON EPA ) PROPOSED DBE RULE ) ) _________________________)

PUBLIC HEARING San Francisco, California Tuesday, January 20, 2004 Reported by: DIANE M. GALLAGHER, RPR CSR No. Michigan 2191 JOB No. 49235 1 2 3 U. S. ENVIRONMENTAL PROTECTION AGENCY 4 OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION 5 6 7 8 In Re: ) ) 9 PUBLIC HEARING ON EPA ) PROPOSED DBE RULE ) 10 ) _________________________) 11 12 13 14 15 Public Hearing held at EPA Regional Office,

16 75 Hawthorne Street, 1st Floor Conference Room,

17 San Francisco, California, from 9: 23 a. m., to 18 12: 50 p. m., on Tuesday, January 20, 2004.

19 20 21 22 23 24 25 2 1 PRESENT: 2 ENVIRONMENTAL PROTECTION AGENCY 3 JEANETTE BROWN, Director 4 Office of Small and Disadvantaged Business Utilization 5 6 KIMBERLY PATRICK, Attorney Office of Small and Disadvantaged 7 Business Utilization 8 JOE OCHAB 9 Small Business Advocate Region 9 10 11 RICHARD DE PALMA Mason Tillman Associates, Ltd 12 Lake Merritt Plaza 1999 Harrison Street, Suite 600 13 Oakland, California 94612 510 238 4679 14 email: rdepalma@ mtaltd. com 15 16 17 18 19 20 21 22 23 24 25 3 1 San Francisco, California  Tuesday, January 20, 2004 2 9: 23 a. m.  12: 50 p. m.

3 4 R E C O R D 5 MR. OCHAB: Good morning everyone. Welcome to 6 the Pacific Southwest Region of the U. S. Environmental 7 Protection Agency. We also call it Region 9, and I 8 welcome you from the Regional District and Wayne Nastri 9 and all of the regional staff, and I am Joe Ochab, the 10 Small Business Advocate/ Women Business Enterprise 11 Coordinator here in Region 9.

12 Like the agenda says, I am here in the region,

13 and I welcome all of you again, and my task this morning 14 is very simple. I am to introduce the speakers today 15 and also cover a few housekeeping matters. 16 So my task, again, now that I have the 17 microphone, is to introduce our speakers and to cover a 18 few housekeeping items.

19 I believe all of you hopefully have registered 20 outside in the lobby, so we get your names and you got 21 the written information, handouts that were provided.

22 Also, there are, of course, restrooms and 23 phones. If you go out this door and take a left, the 24 second set of doors, between the corridor here and the 25 outside lobby, you will find the restrooms and the 4 1 phones.

2 For security reasons, also, unless you have an 3 appointment upstairs in the EPA or wish to visit the 4 library, we ask that you stay on the main floor, first 5 floor.

6 You are welcome, of course, to use the Eagle 7 Nest Cafeteria that's in the building, or outside, if 8 you wish to smoke.

9 Again, welcome to this public hearing.

10 I might mention, too, a little plug for small 11 business. Many of you are small businesses, and 12 hopefully at the table you have picked up this yellow 13 flyer, How to Do Business with EPA Region 9.

14 We at Region 9 wish, and the agency as a whole 15 wish to diversify our vendor database and welcome an 16 opportunity to talk with you if you would like to have 17 goods and services to sell the EPA, and please catch me 18 at a break or after the meeting and we can talk or set 19 up a time in which we can talk later, if you would like.

20 Again, with us today is Jeanette Brown,

21 Director of the Office of Small and Disadvantaged 22 Business Utilization, and Attorney Kimberly Patrick,

23 both of whom are from Washington, D. C., and the Office 24 of Small and Disadvantaged Business Utilization, OSDBU,

25 whichever you prefer, is the lead agency for this rule 5 1 making.

2 And Jeanette and Kimberly and other staff have 3 made a strong effort to get the word out about this 4 particular proposed regulation which affects minority 5 and women business owners.

6 We value your input, and we are grateful that 7 you have come today to both hear a little bit about this 8 proposal, as well as to give us your oral comments.

9 Of course, we want to have a regulation that 10 responds to the DBEs, the needs of the DBEs,

11 Disadvantaged Business Enterprises, that is defensible 12 in light of the Federal Court rulings and also that's 13 workable, and Jeanette and Kimberly have been on the 14 road a lot in the last  since September, I believe,

15 since the rule was published, the proposed regulation 16 was published in the Federal Register in July, and, of 17 course, for Jeanette, this is her second trip back.

18 In an effort to try to get input, Jeanette came 19 out here about two years ago, I believe it was, and held 20 a preliminary hearing to explain what the agency was 21 proposing and to hear your comments, and those comments 22 were considered, and along with the agency's input when 23 we had the internal review were folded into the current 24 proposal.

25 I want to just mention that Jeanette and 6 1 Kimberly are passionate on the subject. They are 2 energized. You will find them engaging and they will be 3 open to your comments.

4 Without further ado, I pass the floor to 5 Jeanette Brown.

6 MS. BROWN: Good morning. I need to use the 7 microphone, and I like to kind of move around. We have 8 to accommodate our stenographer here because this is a 9 public hearing, and she will be capturing the proceeds 10 here so we can take it back to make sure that we fully 11 understand.

12 As Joe indicated, we have been around the 13 country. Last week we were in Chicago. The week 14 before that we were in Billings, Montana. In two weeks 15 we will be in Anchorage, Alaska. We have been all over 16 the place trying to get word out about this proposed 17 rule, to talk to people about what it means and to also 18 solicit input from you all, so we make sure that as 19 public policy is being performed or formed that you all 20 will have an opportunity to provide input.

21 So today we do want to hear from you.

22 I cannot and will not give you an answer to 23 everything. Part of it, what we'll do is we will go 24 through the rule and try to put it in layman's terms;

25 but I would strongly suggest that if you have not 7 1 received a copy, if you have not read it, you need to 2 read it in detail, and let us know what the impact is to 3 you, what it means to you.

4 And so with that today I want to solicit 5 comments. The rule is scheduled to close. It was 6 scheduled to close on the 20th, which is today, but we 7 are extending that to make sure that we have enough 8 time. Right now it looks like at least through the 28th 9 of February.

10 We have been invited to Alaska to meet with the 11 Alaskan natives there. We want to make sure they have 12 time for their comments to be in the public record.

13 It may go a little bit longer than that. I 14 don't know. I need to see what the rules are when we 15 get back to Washington. But right now we know at least 16 through the 28th of February.

17 So please take this time to hear and listen to 18 us as we go through what the proposed rule is doing and 19 saying, and then think about it, and give us your input.

20 Before we do that, though, one of the things I 21 would like to know  I know we have a listing of who is 22 registered  but I always like to get good feedback of 23 who you are.

24 If at this time you would come to the 25 microphone, not everybody at once. This is your one, 8 1 two second hall of fame. Give me a quick information 2 on the company you represent, who you are, and let me 3 know a little bit  not a dissertation, just a little 4 bit about you. If you are an 8( a), ( HUB) Zone,

5 woman owned, that kind of thing.

6 You never know who is in the audience. We 7 could have people in here from the program office, from 8 the grant office, other places who may be in need of 9 minority women owned businesses.

10 This is your one, two second hall of fame.

11 Not five minutes. We want to get through the agenda.

12 But help me. Please give me a little bit about who you 13 are so I can get a feel for my audience. Thank you. 14 MR. JOHNSON: My name is Gerald Johnson. I am 15 the publisher of this newspaper, Small Business 16 Exchange. We do outreach to minority women, and we are 17 a trade and focus newspaper, and if you had advertised 18 in our newspaper, this place would have been full,

19 packed, jammed.

20 MR. DAYRIT: Ignacio Dayrit, Project manager,

21 City of Emeryville. EPA grant for cleanup.

22 MR. EDSON: Allen Edson, president of 23 Remediation Services. We are a small environmental 24 contracting company. We are desperately interested in 25 doing business with the EPA. 9 1 We need a break, you know. We need the side 2 door, the back door, even somewhere from the roof opened 3 for us to get an opportunity to get into the business 4 stream here in the Bay Area, and I am hoping the 5 proposed rule will offer us some opportunities.

6 You know, as you are aware, this is a very 7 competitive industry, and it's tough for a brother like 8 me to get in, and I am not 8( a) certified. Hopefully 9 that will happen this year.

10 But we also need some other opportunities and 11 other ways and other vehicles to get inside the business 12 stream.

13 MS. SAMSON: Good morning. I'm Marlene Samson 14 with Cost Less Maintenance Services Company. We 15 provide janitorial  commercial janitorial services for 16 many companies, and we are here because we are very 17 interested also since we have or are involved with 18 clients that require us to be DBEs, and we want to see 19 how the changes will affect us directly. 20 MS. EDGAR: Norma Edgar. I'm here with 21 Marlene Samson. We recently got our certification as a 22 DBE enterprise, and also we are a women owned business.

23 We are also going to be certified by the Small 24 Business, SBA, and also we have a security company which 25 is a women owned business also. 10 1 MS. CHANG: My name is Anita Cheng. I am 2 supply diversity coordinator of Department of Water and 3 Power, city of Los Angeles.

4 MR. LEE: Mike Lee. I work here in the EPA 5 Region 9 project office for construction grants. I'm 6 trying to get a better understanding of the rule.

7 MS. JOHANSEN: I'm Judy Johansen. I'm a grant 8 specialist here at Region 9 EPA.

9 MS. VILLARREAL: Martha Villarreal, also a 10 grant specialist here in Region 9.

11 MR. RANADIVE: Hi. My name is Anil Ranadive,

12 I'm with a company called Value CAD. We are a small 13 business, just recently been ( HUB) Zone certified. We 14 are in the business of computer assisted drafting, and 15 we would love to work with, meet with any of the persons 16 here.

17 MS. CHRISTIAN: My name is Camille Christian,

18 Christian General Services. We do construction cleanup 19 throughout the Bay Area, and we were being solicited to 20 do work that needed to have been inspected, and we 21 didn't know about it until someone clued me in.

22 So I am here to find out more about things like 23 that and about the rulings and how they affect us.

24 MS. DOUGHERTY: I'm Kathleen Dougherty from the 25 Procurement Office of Arizona Office of Environmental 11 1 Quality, and I'm here to learn more about the rule, and 2 I am also glad to hear about all of the people I could 3 call up to see if they would like to bid on some of our 4 work.

5 MS. BILLINGSLY: Good morning. My name is Lacy 6 Billingsley, Billingsley & Brown, We provide 7 audio visual Equipment Services and Presentations,

8 support to conferences and trade shows both nationally 9 and locally. The company is based in Oakland,

10 California, and we also have an expanding branch that is 11 working on installations throughout the Bay Area.

12 MR. JAREZ: Michael Jarez, Consulting Link 13 2000, a management and government consulting firm. We 14 do a lot of work with small businesses who want to get 15 certified with the government agencies.

16 I am certified myself, MBE and my 8( a) is 17 pending right now. I work with small businesses in 18 relation to government, and I am a government contractor 19 too.

20 MR. LEE: My name is Hayden Lee, Hayden J. Lee 21 Consultants, Inc. We are a consulting firm 22 specializing in DBE certification and compliance 23 services.

24 Our clients are basically government agencies,

25 such as CalTrans, BART, City of Los Angeles, so on. 12 1 MS. CORTEZ: Good morning. My name is Aurora 2 Cortez. I am the project manager for Yerba Buena 3 Engineering and Construction. We do heavy construction,

4 civil. We are actually big on wetlands restoration, 5 erosion, flood control, earth work remediation services.

6 I think 90 percent of our work is with the 7 government, CalTrans, Core of Engineers, the Navy, etc.,

8 but we have yet to break into the EPA market. That is 9 what we are hoping to do.

10 MS. SHEET: Kate Sheet, I am with McWilliams,

11 Myer Technology Group. We are a database consulting 12 company. We also do project management, business 13 assistance analysis, technical writing and preparation 14 documentation work.

15 We do a lot of work  we are a women owned 16 business, and we are certified with the Department of 17 Transportation, City and County of San Francisco, and 18 with the state's small business organization.

19 We do a lot of work with local, county, and 20 also state agencies, and also we are interested in 21 becoming more, doing more work with the Federal 22 agencies.

23 MR. INGRAM: Good morning, and thank you for 24 inviting me to this public hearing.

25 My name is James Ingram, and I would like to 13 1 say good morning to you, Hayden, for certifying me as a 2 DBE firm.

3 My name is James Ingram, James E. Ingram &

4 Company, Inc. We are a commercial property casualty 5 insurance brokerage firm. We specialize in commercial 6 property casualty, bonds, employee benefits, errs and 7 omission insurance.

8 We are currently certified as a DBE ( HUB) Zone 9 firm, certified with the state of California, as a small 10 business, City of Oakland. Thank you. 11 MS. TRACHTA: Hi, my name is Serena Trachta,

12 I'm a principal with Full Circle Design Group, we are 13 full service architectural firm, women owned business 14 here in San Francisco and I'm here to gain information 15 on the federal contracting opportunities.

16 MS. HILL: Good morning. Tracy Hill, and I am 17 with Outsource Consulting Services. Our company is a 18 company that provides people.

19 So if you are looking for consultants for 20 projects, particularly in the areas of information 21 technology or call center project, program management,

22 that's what we do. We are certified as a small 23 disadvantaged business, ( HUB) Zone business, located in 24 Oakland, California.

25 We are a women owned business and a 14 1 minority owned business, and, as well, we have our 2 Federal GSA Schedule 70. So we here to more understand 3 the DBE ruling on our company, but we hope we will have 4 an opportunity or get an opportunity to do some business 5 with the EPA.

6 MR. SALAZAR: I'm Matt Salazar with the EPA.

7 I am here just wanting to find out about the public 8 comment process.

9 MS. BROWN: What program are you with, Matt?

10 MR. SALAZAR: Air enforcement.

11 MR. CARATINI: I am Jose Caratini, EPA drinking 12 water state revolving fund and I am here to learn more 13 about the program and also how EPA will use the 14 citizenship requirement and its criteria in how it will 15 determine the disadvantaged.

16 MR. CAMACHO: Morning. May name is Rick 17 Camacho. I am with Bay Construction Company and we are 18 a small business, and I am here to learn more about the 19 process.

20 MR. RAMIREZ: I am Peter Ramirez. I represent 21 the California DVBE Alliance, Disabled Veterans 22 Entrepreneurs, throughout the state and nationally.

23 MS. BASHAM: Hi, I am Adele Basham with the 24 state of Nevada, Division of Environmental Protection,

25 and I am here representing both the drinking water and 15 1 clean water state revolving loan fund program.

2 MS. FELETTO: I'm Nadine Feletto, California 3 Department of Health Services, Drinking Water SRF 4 Program.

5 I was here at your previous hearing as well,

6 and we continue to have interest and concern about the 7 impact of the rule on the drinking water SRF program,

8 and we are hoping to see an evolution to keep it as 9 simplified as possible in the kinds of projects and 10 loans that we fund.

11 MR. CROTEAUX: I am Darren Croteaux, Toxichem 12 Management Systems. We are a minority owned business.

13 We perform soil and groundwater contamination assessment 14 and remediation services throughout the Bay Area, and we 15 are interested in working with the EPA.

16 MR. LINDSKOG: Good morning. My name is 17 Curtis Lindskog with Kleinfelder, Inc.

18 I am here to understand the impact of the DBE 19 rule as it affects our federal contracts that we have 20 with our subcontractors.

21 MR. BORRMANN: Good morning. I'm Ralph 22 Borrmann, with the Bay Area Air Quality Management 23 District. We are a multi county government agency that 24 deals with air, and are here to learn more about the 25 rule. 16 1 MS. BOONSTRA: Good morning. My name is Jody 2 Boonstra. I am with Big E Construction Company. We are 3 an 8( a) certified, we are also ( HUB) Zone certified.

4 I am here to find out how the ruling will 5 affect our business and also possibly to do work with 6 the EPA.

7 MR. BOONSTRA: Good morning. I am Eric 8 Boonstra, the president of Big E Construction Company,

9 8( a), ( HUB) Zone certified, been in this industry about 10 9 years and am just trying to eagerly market our company 11 and get our name out and talk and hope to bring in some 12 work with the EPA and other federal agencies.

13 MS. BROWN: Before you sit down, tell us who 14 you are and use the microphone, please.

15 MR. OLIVIER: My name is Waymon Olivier. I am 16 with Oliver & Associates, graphic design and print, San 17 Francisco.

18 MS. BROWN: Thank you. Welcome. There's a 19 good mix here. And you may be wondering why I take the 20 time to do that.

21 An opportunity always exists, and as minority,

22 women owned businesses, you need to be aware at EPA we 23 spend about 1.2 billion dollars annually in contracts.

24 That's an opportunity for you to contract directly with 25 us, to enter into contracts with EPA directly. 17 1 On the other side of that, annually we spend 2 about 4 times that, 4.2 billion dollars annually in 3 grants.

4 We give that money out to states, local 5 municipalities, colleges and universities, tribes,

6 trust territories. You name it. And as a result of 7 that, there may be an opportunity for them to contract,

8 if they so chose. They don't have to, but if they 9 decide to go out and contract, our program kicks in.

10 Make the connection. As minority and women

11 owned businesses, money is green. You need to know 12 where to go to find it.

13 Part of what we are going to do today is to 14 talk about that process.

15 Today we will be dealing primarily in this 16 hearing with our proposed rule as it relates to the 17 grant side of the house.

18 Okay. If you want me to talk about doing 19 business with EPA directly, we can do that after the 20 hearing. But now we are talking about the proposed 21 rule, the proposed changes. We are going to go over the 22 key elements of the proposed rule in terms of the 23 changes that we have identified, and we will take your 24 comments and your questions.

25 In the DBE or MBE/ WBE program, we don't get 18 1 involved with 8( a) and ( HUB) Zone. It's direct 2 procurement. It's good to know that you have Joe Ochab 3 here as your MBE/ WBE coordinator.

4 How many of you brought business cards?

5 Everybody's hands in the room should be up.

6 How many of you brought a capability statement?

7 Everybody's hands should be up. Think about this:

8 Opportunity. 9 You come into a Federal building for a meeting 10 with government people, you never know who is going to 11 be here. Make the connection.

12 You have people from the program offices, from 13 the state and local jurisdictions who are looking for 14 you. How are they going to find you? How are they 15 going to know or remember who you were?

16 What are you going to put in their hands? You 17 have people from Arizona and other places. They need to 18 take this information back with them. So use this as a 19 learning opportunity. Next time, come prepared.

20 I don't know when or if we will do this again,

21 but think about where you are going because this is our 22 business. This is what it's about.

23 So today, as we get ready to go through the 24 proposed changes, we are not going to read it word for 25 word, but we will give you what in laymen's terms, I say 19 1 it because the attorneys wrote it, we have to interpret 2 and understand it. We will give clarification where 3 needed.

4 If you have a question, I need you to come to 5 the microphone, and every time you speak, I need you to 6 speak into the microphone, tell us who you are, for the 7 public record, and what organization or company you 8 represent, and then say your question.

9 Some of your questions I may be able to 10 address. Others I may not. And we will say, we will 11 take them under advisement and we will go on, because I 12 don't have an answer for everything.

13 We have been on the road now  the rule was 14 published in the Federal Register in July  we have 15 been on the road since September. We have been all 16 around the country doing just this, getting feedback and 17 input from you.

18 As someone indicated, I think Joe and another 19 lady who was here about two years ago, this isn't the 20 first time we have addressed this. We have been here 21 before. We gave a brief overview, and we came out with 22 what we thought the rule was going to be and went back 23 on the road.

24 We heard from you, we went back and made some 25 changes, some of which people from all over the country 20 1 came in and gave us comments.

2 That helped us formulate this policy, and now 3 we have the proposed rule, and we are seeking additional 4 comments before the comment period is over, and we go 5 back to the drawing board taking a look at what's come 6 into us before we finalize this policy.

7 You may be wondering why we are doing this.

8 Our program has been around for a long time.

9 But there was a Supreme Court decision that 10 came out back in 1995. It was called the Adarand versus 11 Pena, a case that challenged  or was the Adarand 12 decision, came out of the state of Colorado. I am not 13 an attorney, but it changed the fabric of what we do 14 with federal government in terms of procurement.

15 Now, in order for us to have a program that 16 exists, it's got to be based on something.

17 Our DBE program in years passed, many of the 18 state and local recipients of EPA money you'll recall in 19 their grants there was a clause, a flat 8 percent. That 20 was the goal they had to work to to ensure that 21 minorities and women were included in the process.

22 The 8 percent was set by Congress. It wasn't 23 based on anything. It basically was what they thought 24 we should be getting in terms of minority participation.

25 What we all need to understand is this is 21 1 federal money. It's not mine, it's not the other people 2 who work here at EPA; but as taxpayers, minorities and 3 women owned businesses you should be afforded an 4 opportunity to participate in the procurement process,

5 irregardless of which side it's on. You need to know 6 where it is and what that process is and how you as a 7 viable business can come and participate as taxpayers,

8 as citizens  well, we will talk about citizenship 9 later  but as viable businesses.

10 As minority businesses, we are saying you come 11 fully equipped, ready and able to do the work, is that 12 right? When you call the carpenter, they come with 13 their tools and do what needs to be done.

14 As minority and women owned businesses, we are 15 saying, that's what you do as well.

16 Our job is to ensure, you know, where the 17 opportunities are and what the process is.

18 As a result of the Adarand decision, it changes 19 how we have to do business with the Federal government.

20 Now we use availability analysis based on where 21 minorities and women are located, to say what, how much,

22 and we negotiate in a much more thoroughly, hopefully,

23 way than we did in the past with the state and grant 24 recipients in terms of what the goals should be.

25 In some places the goals are as high as 30 22 1 percent, depending on the availability of minorities and 2 women in the geographic location; other places it could 3 be as low as two percent. Depends where you look,

4 where the minorities and women are located.

5 What we will do now is go over some of the 6 major or key elements of the proposed rule and what the 7 changes are; and as we go through them, if you have 8 questions, please, by all means, come to the microphone.

9 Any questions? Any comments?

10 Kimberly will get started.

11 MS. PATRICK: Okay. Good morning everybody.

12 If you look inside the packages, you were given a 13 document Summary of Major Elements of the Proposed DBE 14 Rule and Preamble. Does everybody have that? This is 15 what we will be following today as we go through it. I 16 think you would rather we do this than the entire 17 booklet, which is the actual text of the rule. I don't 18 want to bore everybody. We will do it the short way.

19 This document just highlights the major 20 elements. A quick thing that shows the major changes 21 to the rule. This is what we will follow along with.

22 That being said, the first major change to the 23 program is going to be the change in name.

24 We are currently the MBE/ WBE Program, Minority 25 Women's Business Enterprise and whatever. We are not 23 1 MBE/ WBE anymore. We are changing the name of the 2 program to the DBE, Disadvantaged Business Enterprise 3 Program.

4 There are a number of reasons why we made that 5 change. And, first, and foremost, the Adarand decision, 6 of course, which means, to have disadvantaged status, I 7 don't have to be a minority or a woman. So the name of 8 the program needs, has to be inclusive of the fact that 9 it can include a broader category of people based on 10 that decision.

11 Another primary reason why we changed the name 12 of the program is to be consistent with DOT's currently 13 established program, which is much larger than ours and 14 more well known than ours.

15 Where we can create consistencies in 16 government, we want to take an opportunity to do that.

17 The next major thing, which will affect a lot 18 of the business owners that are here in the room, and I 19 am glad we have a good number of you out there, it's the 20 certification program.

21 In the past, the agency relied on self 22 certification, which basically meant, if you said you 23 were a minority or women owned business, we believed 24 you, and that's the end of the inquiry.

25 Because of the Adarand decision, any types of 24 1 things we do like this needs to have a firm basis.

2 We can't rely on a person's word, although it would be 3 nice if we lived in that day and age and we could. We 4 need more to substantiate our decisions about that.

5 Part of that is we are going to get into the 6 area of certification because we realize we are not an 7 agency who really wants to get into certification 8 business wholesale.

9 We love it when agencies like SBA, DOT, who 10 have bigger programs are supposed to be doing that kind 11 of thing get into that area. 12 We decided we will accept SBA certifications 13 and also will accept DOT certifications.

14 Currently the way the regulation is set out, we 15 are only accepting DOT certifications from US citizens.

16 That is the current language in the rule.

17 We do understand there's a large concern about 18 that here in this region about only accepting 19 certification from US citizens, and we are definitely 20 looking forward to getting comments about that from 21 those of you in the audience with whom this is an issue.

22 We want to hear from you in this process.

23 The way the program currently works, if an 24 entity such as a business had a certification from SBA 25 or from DOT, you show us proof of that certification. 25 1 EPA would, in turn, take that information and give you 2 an EPA certification so that we don't have to do the leg 3 work twice.

4 We want to make this process easy on the 5 business owner to use certifications you currently have.

6 So there's not a lot of repossessing of 7 paperwork and going through months and months and months 8 of process.

9 Also, we are set up to accept certifications 10 from states, from localities, from tribal communities as 11 long as the criteria for those certifications are equal 12 to the criteria that we have set up in our rule.

13 So if you have a state certification, as long 14 as the basis of that certification is the same as our 15 requirements, we will accept that state certification.

16 What you have to do in the process, let us know 17 which state certification you have and what the criteria 18 were for you to get that certification before we can 19 say, okay, you have this certification from whatever 20 county in California, it matches ours, we can accept 21 this, and give you a certification from EPA.

22 MS. BROWN: We have done a preliminary look at 23 what state certification programs are out there.

24 When we started this process  by the way, we 25 have been doing this now for five and a half years to 26 1 get to this point, and from what I understand, many 2 people tell us that for doing a rule in EPA, that's not 3 long. Seems like a long time to me, but maybe not.

4 What we found is of the 50 states, probably 5 about

6 MS. PATRICK: There were about 11 whose 7 programs we saw were not consistent with EPA's 8 standards, and that's primarily because those states 9 didn't have programs at all. The state, at the state 10 level, did not certify entities period.

11 A large part of that, the affirmative action,

12 the bad wave the country went through, a lot of states 13 abandoned their programs regarding minority owned 14 businesses.

15 And so most of the states actually do have 16 programs in place that have standards that meet ours.

17 I must say that's as a preliminary review, and 18 it is not a counsel blessed review. It was a review 19 done internally in our office just to get a snapshot to 20 see what potentially we would be dealing with in terms 21 of the number of certifications we would do

22 MS. BROWN: Go ahead.

23 MR. INGRAM: Is California one of those states? 24 MS. BROWN: We need you to use the microphone 25 and tell us where you are from and your name. 27 1 MR. INGRAM: I'm James Ingram, James E. Ingram 2 & Company, Inc. I am wondering if you would consider 3 the Unified Certification Process? Rather than having 4 to submit a certification to EPA, why not piggy on the 5 current Unified Certification Process.

6 As a small business, you could spend a lot of 7 time trying to get a certification completed.

8 So when you submit the paperwork on the Unified 9 Certification Process, possibly to have EPA as being 10 listed so that it could cut down in paperwork.

11 MS. BROWN: Could you go into more detail as 12 to what it is? I haven't heard it

13 MR. INGRAM: As I understand, the Unified 14 Certification Process is a process that if you are 15 certified by one agency, it's good for any agency 16 throughout. I believe, nationwide.

17 If I am certified with CalTrans, it means I am 18 certified with BART, ACT Transit, all of the agencies 19 that receive federal funds.

20 So I would think if EPA could consider working 21 it into its program, it would be helpful to small 22 businesses. Thank you.

23 MS. PATRICK: Outside of accepting SBA, DOT 24 state, tribal certification, we realize EPA has things 25 about its program that are unique, and because of those 28 1 differences there are certain categories of 2 certifications that the agency knows it will have to do 3 as a matter of first impression. 4 Currently DOT does certify women owned 5 businesses, but SBA does not. So EPA is aware of the 6 fact that it would probably have to certify a number of 7 women owned businesses.

8 The last change of the Disabled Veteran Owned 9 Businesses, especially with the new law that is just 10 going into effect, which will have SBA certifying that 11 universe of business owners, so I guess a part of this 12 has changed a little bit since the few days since this 13 has been written.

14 But EPA is also in a position to certify 15 Service Disabled Veteran Owned businesses.

16 Also EPA has a very interesting setup with our 17 statutes.

18 In our 8 percent statute, we require that an 19 entity be owned and/ or controlled by a disadvantaged or 20 minority individual.

21 In our 10 percent statute, we require that a 22 business be owned and/ or controlled, which is the 23 standard that is consistent with SBA and DOT and just 24 about everybody else's programs.

25 Because we are not at liberty to go back and 29 1 change a statute, we have to be inclusive of that body 2 of business owners where the business is owned or 3 controlled.

4 So that's a unique category that only EPA would 5 be able to certify because of that distinction.

6 MS. BROWN: One of the other things I will say 7 too is with the Service Disabled Veterans Program,

8 President Bush signed, I guess, into law two weeks 9 before Christmas, somewhere thereabouts, a program now 10 which gives Service Disabled Veterans the same 11 preference, basically, as an 8( a) or a ( HUB) Zone, but 12 the connection there is you have to be Service Disabled 13 and not disabled, and so there is a unique difference 14 there.

15 Sir, if could use the microphone and tell us 16 your name.

17 MR. O'CONNOR: Kevin O'Connor, California 18 Disabled Veterans Business Enterprise Alliance. I 19 really appreciate your comments.

20 You are indicating there was some reciprocity 21 between your agency and some state and local agencies,

22 that you would accept those certificates, and, as you 23 may know, California has a certified disabled veteran 24 program, DBE program. It's a pretty rigorous 25 certification that you offer. 30 1 Would your agency accept those certificates?

2 MS. PATRICK: Yes.

3 MS. BROWN: We would have to look at how you 4 came up with that and consider that and then

5 MS. PATRICK: It would be just like the other 6 categories. As long as the criteria matched our 7 criteria, we would be in a position to accept that 8 certification.

9 MS. BROWN: Right.

10 MR. O'CONNOR: Thank you.

11 MS. PATRICK: The next thing is the net worth 12 certification. Private and voluntary organizations 13 controlled by individuals who are socially and 14 economically disadvantaged.

15 The major thing in the net worth requirement, 16 we are proposing that an individual have a net worth no 17 greater than $ 750,000 to be eligible for our program,

18 and that would exclude your interest in your personal 19 residence and your personal interest in the business,

20 and that is what we would look at in determining that 21 net worth.

22 MS. BROWN: This net worth requirement is 23 consistent with SBA.

24 MS. PATRICK: No other questions on 25 certification? 31 1 MS. FELETTO: Nadine Feletto, California Health 2 Services. Could you go a little more into the concept 3 of the $ 750,000 net worth, in order to have a sense of 4 what size of a business entity is going to be excluded 5 de facto by this process?

6 MS. PATRICK: Well, EPA's program does not 7 include, we don't look at the size of the business at 8 all. This is only going toward your personal net 9 worth. And what we would look at is what things are 10 included in your personal net worth, excluding your 11 interest in your home and excluding your personal 12 interest in the business itself.

13 We will back those numbers out and take a look 14 at what your net worth is. If it's less than $ 750,000,

15 then you are eligible under this program. Did that 16 help? Okay.

17 Nothing else on certification?

18 The next thing is the Good Faith Effort.

19 Currently in our regulations we have to name 20 two different things, but substantively they are the 21 same steps that we want businesses to go through to make 22 sure minority women owned businesses are included in the 23 process.

24 And one part of our regulations we have what's 25 called the 6 affirmative steps and in another part we 32 1 have what's called the 6 positive efforts, and we are 2 combining that and calling them all the 6 Good Faith 3 Efforts, just to provide some consistency once again.

4 And let me explain what Good Faith Efforts are 5 about.

6 They are measures we expect our recipients, who 7 are our grantees to undergo in making sure the minority 8 and women owned businesses are included in any 9 procurement processes they have using EPA money.

10 Those six good faith efforts also trickle down 11 to the next tier, to the prime contractors the recipient 12 may be working with.

13 So when the prime goes out and tries to find 14 subcontractors, the expectation and the requirement is 15 those prime contractors will go through the same good 16 faith efforts the women and minority businesses are 17 taking into consideration.

18 It will be the whole universe of DBEs are taken 19 into consideration with their, for the recipient, with 20 their prime contractor and the prime contractor with 21 their subcontractor. Okay?

22 MS. CHENG: Anita Cheng, Department of Water 23 and Power, Los Angeles.

24 Will you please explain to me the 6 Good Faith 25 Steps? 33 1 MS. PATRICK: Sure. Let me refer to the 2 actual text here. Each of you have that in the booklet.

3 Go to page 43848, the section called subpart ( C), Good 4 Faith Efforts. What does this subpart require?

5 A recipient including one exempted from 6 applying the fair share objective requirements by 33.411 7 is required to make the following good faith efforts 8 whenever procuring construction equipment, services and 9 supplies under an EPA financial assistance agreement,

10 even if it has achieved its fair share objectives under 11 subpart D.

12 The first effort, ( a) Ensure DBEs are made 13 aware of contracting opportunities to the fullest extent 14 practicable through outreach and recruitment activities.

15 For Indian Tribal, State and local and 16 Government recipients, this will include placing DBEs on 17 solicitation lists and soliciting them whenever they are 18 potential sources.

19 The next effort, ( b) Make information on 20 forthcoming opportunities available to DBEs and arrange 21 time frames for contracts and establish delivery 22 schedules, where the requirements permit, in a way that 23 encourages and facilitates participation by DBEs in the 24 competitive process. This includes, whenever possible,

25 posting solicitations for bids or proposals for a 34 1 minimum of 30 calendar days before the bid or proposal 2 closing date.

3 Do you really want me to read all six of them?

4 MS. CHENG: Thank you.

5 MS. BROWN: There is a question in the back.

6 MS. COLBERT: Regina Colbert, Raibon & Colbert 7 Associates.

8 How deep are the subcontracting disclosure 9 requirements going to be? Are you going to expect the 10 obligations to be met for the sub of the subs?

11 MS. PATRICK: For the sub of subs, we only go 12 down to making the requirements applicable to the prime 13 contractor.

14 We go to the recipient first; recipient to the 15 prime, and the subs at this point do not go that low in 16 terms of what information we want to capture.

17 MS. BROWN: We do, however, and we have 18 created some forms, and we will talk about those, where 19 the subcontractor to the prime contractor, not the grant 20 recipient, would possibly be required to show us or give 21 us some additional information.

22 One of the things on the good effort, I need to 23 say, the six good faith steps, these are on the books 24 now. This is not new. And every grant recipient that 25 is receiving EPA funds should be carrying this out. 35 1 This is not something that we can exempt nor do 2 we want to. We need to make sure here, again, we want 3 to make sure women and minorities are included in the 4 process.

5 If you are a grant recipient and you are 6 receiving EPA funds, this is something that is currently 7 on the books. You don't have to wait until the rule is 8 in place. It's here now. You should be carrying this 9 out.

10 One of the things we have seen as we have gone 11 across the country, the good old boy network system is 12 alive and well. We need to make sure as grant 13 recipients and all people who receive funds that we are 14 inclusive of minority and women into the procurement 15 process; that some of the practices that we have seen 16 throughout the country need to be opened up so that 17 minority and women owned businesses know what the 18 process is and that we give them, everybody ample time 19 to submit a bid and are not keeping something out three 20 or four days.

21 Some people are comfortable with going to the 22 same people over and over again. That may work well 23 when you are spending your own money. But when you are 24 a recipient of federal funds, you need to open up that 25 process. Okay. 36 1 MR. RAMIREZ: Peter Ramirez.

2 Going back to good faith effort, we are quite 3 involved in the good faith effort presently in the state 4 of California, and we find this needs to be tightened 5 up.

6 The prime is making a mockery of what is on the 7 books, and they circumvent the rulings and the 8 requirements. So it needs to really be tightened up.

9 MS. BROWN: Could you give us suggestions on 10 how and what that should include?

11 MR. RAMIREZ: We will forward that to you.

12 MS. BROWN: Thank you. We would appreciate 13 that.

14 MR. INGRAM: James Ingram, James E. Ingram &

15 Company, Inc.

16 I don't see here any enforcements. How do you 17 plan to enforce, if, in fact, prime does not meet the 18 good faith effort? What section is it in here? 19 MS. PATRICK: You will not find a section what 20 the enforcements are. You have to understand, we are 21 not an affirmative action program.

22 The things that we require are not based on 23 quota.

24 Things like quotas, things like the words 25 " requirement" or using the words " you must", puts us 37 1 into an area where we are not quite legally defensible,

2 given the current climate we are in.

3 To be frank and honest, yes, we would like a 4 program with a nice set of hungry teeth to bite back 5 when people don't do what they are supposed to.

6 But the reality of the situation is, in order 7 for a program to survive, we have to walk a very tight 8 rope in terms of what we can require and not require. I 9 understand the sentiment, if this had some real 10 enforcement behind us. For us to continue to exist, we 11 have to be careful with that.

12 Does that mean we have no recourse? Does that 13 mean there's nothing we can do? A lot of the things we 14 have in the rule are in terms of us being able to do 15 more oversight with our grantees. We are looking to 16 getting more involved in this particular area, forms and 17 requirements that come back to us.

18 Frankly, a lot of the things that happen at a 19 subcontract level we don't know about because currently 20 they are not required to report back on those types of 21 things.

22 Some of the things that we are going to require 23 people to send back to us, so we are aware of what's 24 going on, are forms that talk about things, making sure 25 the subcontractor is getting the deal he is supposed to 38 1 get with the prime.

2 We have some new contracting provisions that 3 were not in place before. A lot of this we couldn't do 4 anything about because we didn't know it was happening.

5 So there are changes in the rule to make us 6 more aware.

7 MS. BROWN: One of the things, it has to be 8 documented, is that whole back funding. Sometimes it's 9 difficult but what we have where negotiations have not 10 been completed in a timely manner have over the course 11 since I have been here been able to hold back at least 12 the procurement dollars for funding that has been 13 identified in some of these grants until that is done.

14 But we want to take a look at what the process is.

15 Again, like Kimberly says, we don't see this as 16 an affirmative action program. We are asking our grant 17 recipients that they understand, whatever they do is 18 subject to scrutiny and challenge. So they have to 19 defend, should there be a challenge in court, what they 20 have done as we have.

21 MR. INGRAM: I would like to suggest that you 22 look at Title 49 of the federal regulations, 426. There 23 is a complaint process. A DBE can file a complaint. As 24 a small business there really isn't any teeth in these 25 program, if there isn't some method of being able to 39 1 legitimately complain if your process is not being 2 followed. Again, look at that section.

3 MR. EDSON: Allen Edson, I am with Remediation 4 Services. My question, of the 4.2 billion that was 5 awarded in grants, what is the percentage in the past 6 fiscal year that went to DBEs?

7 MS. BROWN: Overall, we look at both 4.2 plus 8 and 1.2 billion and on average EPA is spending probably 9 close to 25 percent of their dollars in a minority 10 business community. Wish it were better, but that's not 11 bad either. That's both inclusive of both contracts 12 and grants.

13 MR. O'CONNOR: Kevin O'Connor. Regarding the 14 good faith effort and enforcement, in the bids I have 15 participated in, if they do not, if the good faith 16 effort is not part of the bid package, the bid is 17 considered nonresponsive.

18 Would that be the case here and that would be a 19 form of enforcement?

20 MS. PATRICK: At that level, the expectation is 21 that, once the money is given out, there are a lot of 22 things we expect the recipient to do in terms of the 23 recipients, through its procurement practices, the good 24 faith efforts be included in the bid, or is something 25 nonresponsive. That's the decision of what the 40 1 procurement practices are by the recipient.

2 So at that level, while we require the 3 recipient to make sure that the prime contractor is 4 doing the good faith effort is our requirement.

5 How the recipient goes about making sure that 6 the prime does that, it's pretty much left up to what 7 their procurement practices are.

8 MR. BOONSTRA: Eric Boonstra, Big E 9 Construction Company. Touching base on the good faith 10 effort, just to give a for instance, what I am finding 11 on the subcontract level, a lot of the larger prime 12 contractors who are getting the larger dollar contracts 13 that have the bid good faith effort requirements, 8( a),

14 ( HUB) Zone, women owned, etc., etc., they have just been 15 sending out documents or requests, request for bid,

16 request for quotations.

17 You put your signatures on them and send them 18 back to them via fax, email, and they never contact you 19 back and you can really march forth on it.

20 I am not sure if they have been meeting the 21 good faith effort doing this, but just kind of compiling 22 all of the responses with people signing these documents 23 saying they are interested in bidding and then they are 24 not going any further in requesting those bids, and 25 another thing, they have been, in different instances 41 1 that I have heard through the industry they have been 2 able to negotiate with the Federal agency, and they 3 don't allow the same negotiation process through the 4 subcontract level.

5 Is there any form or anything being done to 6 track that? I mean, if the good faith effort is being 7 met because they have the documents, but they are not 8 really trying to meet the good faith effort.

9 MS. BROWN: One of the forms, the forms are 10 currently under reform at OMB for approval. So not all 11 have come back yet.

12 One of the forms we included was one where a 13 subcontractor to a prime would be requested to fill out 14 information that they negotiated with the sub  with 15 the prime contractor  and send that back in so we can 16 take a look, and we could, because this is all part of 17 the grant file, and then we could, from that 18 information, go back and find out if, in fact, you got 19 what you said you thought you were going to get in terms 20 of your negotiation, and from that we probably could 21 tell  this is all new, and what's being proposed in 22 the rule  we could probably tell too whether or not 23 those kinds of things even existed. If your name was 24 given and you never heard anything else, that's the kind 25 of feedback we want back from you. 42 1 This is new. This is not currently in our 2 program now, but under the proposed rule this is what we 3 are proposing.

4 We are hearing this kind of thing all over the 5 country. So it's not just unique to this area.

6 And we recognize there are some things that we 7 could possibly do to at least give us a better view of 8 what's going on with some of the recipients.

9 MR. DAYRIT: Ignacio Dayrit, City of 10 Emeryville. We are a small city, the city of 11 Emeryville is a small city and there are other small 12 cities in our situation. We rely on our people's 13 certifications when we enter into our contracts; and two 14 things: One, we have goals for MBE. Separate 15 percentage for WBE. So will it change? Will there 16 just be a DBE number or still an MBE/ WBE percentage we 17 have to meet? That's the first question.

18 And the second question, again, we rely upon 19 our people's certification. Is there some type of 20 database? Maybe that's a question for the audience.

21 We would like to get our prime contractors'

22 information on these MBEs and WBEs we would like to 23 subcontract to, and also have prime contractors, but 24 it's hard for us.

25 We don't have a list, and it would be, a lot of 43 1 small cities shy away from EPA funding, because having 2 that kind of funding is a hassle you have to go through.

3 It's difficult. You have to go through a lot of hoops 4 to meet the EPA requirements. That is one of the main 5 factors in regard to getting funding.

6 MS. BROWN: We do want to be inclusive and we 7 know in a lot of small communities you do have minority 8 and women owned businesses, and we just need to be 9 included in the process.

10 Back to the latter question about databases 11 available. There are a number of databases out there 12 right now.

13 In the years past we recommended ProNet, but 14 ProNet doesn't exist anymore. It was taken over by 15 DOT. It's the CCR, where you can get in on the 16 internet, and anybody wanting to do business with the 17 Federal government, they have to be registered there.

18 There are a number of places you and your local 19 area can go, Chamber of Commerce and other 20 organizations, people that represent people in 21 organizations that do certifications.

22 So as we have gotten into this age where we 23 have the internet, where a lot of technology and 24 information is readily available and assessable, and it 25 is at the tip of your fingers where to go. 44 1 If you go to our web site, www. epa. gov/ osdbu, 2 we can link you, where we used to link you to CCR, also 3 SBA, we link also to CCR to ProNet and all of those.

4 There's another database out there that is 5 specifically for minority owned businesses that is 6 established and maintained by the Department of 7 Commerce, and that's the Phoenix database that's done by 8 MBDA, Minority Business Development Agency.

9 What they will do, it's free for any minority 10 business. All you have to do is go in, key in your 11 information. As long as you are a minority owned 12 business, they will then link, similar to what CCR and 13 what ProNet does, or did, this one, though, under the 14 Phoenix database will match and send directly to the 15 minority business an email saying, there is a 16 requirement here by this state agency or so and so. You 17 need to get in contact with.

18 So it cuts down on what the actual minority 19 business has to do with regard to spending time on the 20 internet.

21 But all you have to do, if you are a local 22 jurisdiction is go there send them information in terms 23 of what it is you are looking for, and I am sure they 24 will work with you.

25 So the information is there. All too often we 45 1 hear they don't exist. You can see they are out here.

2 In this age, what we do with EPA more and more 3  and I have been with the agency about 10 years  in 4 the beginning we couldn't find a lot that worked with 5 minorities and with women that do the work that EPA 6 does. But now that's not true. They are out there.

7 We have to make sure, though, we are opening up and 8 providing opportunity for them.

9 While it may be difficult in your local 10 jurisdiction, I think if you have access to the 11 internet, you will be able to find them.

12 Then you have another question.

13 MS. PATRICK: About the goals, yes, you will 14 still be required to negotiate with MBE or WBE or also 15 looking at the DBE goal. So we're looking at the 16 three, if I am correct. People still have to negotiate 17 an MBE and a separate WBE goal.

18 MS. BROWN: Because each one is different.

19 MS. PATRICK: They are different. Each one is 20 different.

21 MR. BORRMANN: Ralph Borrmann, Bay Area Air 22 Quality Management District. There are two databases 23 that are on line. One is MTC, and also CalTrans, and 24 that lists, you know, fairly complete information for 25 DBEs. 46 1 MS. BROWN: Here in the state of California.

2 MS. COLBERT: Regina Colbert, Raibon & Colbert 3 Associates.

4 On the good effort, swapping out your 5 subcontractors sort of along the line  if you're 6 included in the bid submittal packages, and somewhere 7 along the line they decide to trade in for several other 8 subs, how is that mechanism captured in your process?

9 MS. PATRICK: We have a lot of provisions,

10 which is the next section we will go into about 11 different contract administration provisions, and some 12 are designed to prevent major switch tactics, some of 13 the things we will address in that section. 14 So when we cover that, if you still have the 15 question, okay, but I think it will cover most of what 16 you are concerned about.

17 MR. O'CONNOR: Kevin O'Connor again. Again 18 getting back to the Service Disabled Veterans issues,

19 you discussed the Public Law 108 183, I believe that 20 gives the status; also Public Law 106 50 signed into law 21 by President Clinton and that gave, created a three 22 percent goal for Service Disabled Veterans on federal 23 contracts, and I was just wondering if you are going to 24 incorporate that three percent goal in your regulations,

25 and, if it is, will the three percent goal trickle down 47 1 to the subcontractors.

2 MS. PATRICK: That particular goal that's on 3 direct contracting, that would mean contractors that 4 work directly with EPA. That doesn't apply to this 5 program.

6 This program is for procurements that occur 7 under EPA grants or assistance agreements. Like our 8 revolving loan, like second tier. That does apply to 9 this one.

10 MS. BROWN: None of those goals apply to this 11 program. Indirectly we don't have those. Our goals 12 are based on the availability of minorities and women in 13 geographic locations. They are separate and distinct,

14 two different programs.

15 MS. FELETTO: Nadine Feletto, California Health 16 Services. Could you go into a little bit more detail 17 with regard to the goals? Right now recipients, I 18 believe, we, at least, have eight goals; four for WBEs 19 and four for MBEs and then construction equipment, 20 supplies categories.

21 Are you now envisioning twelve goals? What 22 does that constellation or grid look like?

23 MS. PATRICK: Right now the way it's written 24 in the proposed rule is that we will solely look at MBE 25 and WBE. 48 1 The third category is not in here, but there's 2 been a lot of questions about if you are changing to a 3 DBE program, is there going to be a DBE type of goal.

4 That is something we have not really looked at at this 5 point.

6 So in terms of what is currently in this 7 version of the document is still just the two 8 categories.

9 If it changes, or there's a reason to change 10 beyond that, we are not really sure at this point 11 because it doesn't address DBE as a separate category 12 right now.

13 But the logical conclusion would be, if we are 14 changing to the DBE program, you need to have a DBE 15 goal.

16 So more than likely it may turn into 12 17 different categories.

18 MS. BROWN: We need comments from you. You 19 will be affected by it. That's something you would 20 have to negotiate. If that is something that you would 21 not like to see, we need that on record.

22 MS. PATRICK: The problem is each one of those 23 things will capture something different because one 24 would see MBE and WBE is a subset of the larger DBE.

25 In terms of doing numbers, they would be 49 1 drastically different. If you looked at the universe of 2 minority owned businesses and the universe of women

3 owned business owners and larger universe of DBE, which 4 includes everybody, the numbers will look even more 5 different.

6 If you took a straight DBE goal, if you had 7 that as your only goal, you could say, okay, if you look 8 at the entire universe of anyone who could possibly be 9 a DBE, your goal, say, from 12 percent to 25 percent 10 because you are looking at a potentially larger 11 universe, which may not be realistic on what's going on 12 in the state.

13 Because what's real may be a smaller category 14 of a WBE and MBE. It may be different. We recognize 15 that. So there could be some possible changes with 16 that as well.

17 MS. BROWN: Those are the things we would like 18 you all to take a look at and get back to us. If we 19 were to decide to go to an overall DBE goal, that rule 20 could have a tremendous impact on you as that local 21 jurisdiction if you are talking about the universe of 22 all potential DBEs versus women owned versus minority

23 owned.

24 MS. BASHAM: Adele Basham with the state of 25 Nevada. 50 1 Currently in Nevada we don't have the resources 2 to do the data collection for availability analysis for 3 each of the programs, so we have pooled the clean water,

4 the drinking water SRF programs with the Department of 5 Transportation, and we all rely on the same database for 6 availability analysis, and, ultimately, that would feed 7 into maybe goals in the future.

8 The DOT database looks solely at DBEs. It's 9 not broken out into MBEs and WBEs. So if there was a 10 requirement from EPA that was additional to what DOT has 11 to compile, that would require our agencies to do 12 additional work.

13 MS. BROWN: Right now currently we have a 14 program called WBEs and MBEs, so that is what we are 15 looking for in these negotiations, and right now, and 16 that's something as I have said before, it does skew it,

17 and it changes drastically if you look at the total 18 universe of DBEs.

19 But right now currently under the program we 20 look at both. So any negotiation, data or information 21 that you use should be considerate of both of those two 22 entities.

23 MS. PATRICK: With your current goals in the 24 state of Nevada, what are they based on? Right now we 25 are dealing with only MBEs and WBEs. Is that based on 51 1 information that the state of Nevada got from DOT?

2 MS. BASHAM: Well, they are old, and they are 3 based on old information, and we were hoping, we have 4 been working on this on this collection of information 5 for a while, and we were hoping to be able to pool the 6 resources for all of these different state agencies and 7 have one goal that we could all use, and that's the way 8 the information was gathered.

9 So to go out and distinguish different 10 categories within the DBE would require additional work.

11 I think we have the information. I'm just  12 MS. BROWN: It very well may. At some point,

13 and if you did it, at least you would have it, and that 14 would be a starting point and then you just build on 15 that.

16 But, yeah, it may require you to go out and do 17 some additional work to come up with the initial 18 scenario in terms of what we are looking at.

19 I am not saying that you won't have to, but 20 that's part of doing business with EPA, and that's in 21 our current environment.

22 MS. FELETTO: Nadine Feletto. Do you know 23 whether the US census statistics would enable, could be 24 relied upon similarly to what we have done with the 25 existing program to capture a DBE profile of 52 1 availability?

2 MS. BROWN: It could very well be used. One 3 of the things that we did was run a new census, not new 4 now, but when it came out, we sent out a letter out 5 saying there's new census data out there. You need to 6 take a look at that and make a determination as to 7 whether or not it impacts what your numbers are based on 8 our negotiations.

9 Some of the local jurisdictions, in particular,

10 I think we had one or two local municipalities, from 11 Region 9, at least one came in, and our goal was lowered 12 as a result of the census data because they looked at it 13 and the new census data supported something different.

14 If you recall, we did tell you that is one 15 place where you could go, a while back when we first 16 started doing availability analysis, you could use the 17 census data. 18 So that information is readily available. It's 19 on the internet. That's another resource tool, another 20 piece of information you can use, even probably in the 21 state of Nevada, to take a look at what your numbers 22 would be closely reflective of when you take a look at 23 that.

24 We already know in this region that it was done 25 and they decreased their goal as a result of the census 53 1 data.

2 MR. INGRAM: James Ingram, James E. Ingram &

3 Company, Inc.

4 You have created some confusion for me. As I 5 understand it, the Adarand opinion decision basically 6 said the program was to be race neutral. So I would 7 like to know why and what grounds legally do you stand 8 on to have a minority and women owned program and a DBE 9 program?

10 What are the benefits of having those three 11 separate programs?

12 Also, in California, we have 209, which did 13 away with it, but I guess federal law would supersede 14 California law, but still you are creating confusion,

15 and why not, would it be more beneficial to the small 16 businesses for you to have just a DBE program so that 17 you don't get into the question and potential suits 18 because you have minority and women owned programs.

19 I have several questions about this that need 20 to be cleared up.

21 MS. PATRICK: First, on the legal basis, which 22 is why I am here, the Adarand decision did not create a 23 situation where these programs have to be race neutral. 24 What it did require is that the program, for 25 example, it's based on disadvantaged status. 54 1 We are allowed to look and say, if you are a 2 minority in certain categories, and the list is 3 exhaustive, a decision can be made or an assumption can 4 be made based on that minority status, you are a 5 disadvantaged individual.

6 However, what the Adarand decision said, you 7 can't just look at that by itself. That's a factor you 8 can consider.

9 If someone can submit information showing that 10 they have suffered economic disadvantage, economic 11 disadvantaged, then we can look at that and look at the 12 circumstances, regardless of their race, okay, you are 13 still a DBE, you have shown that you suffered some 14 economic disadvantaged status in this country.

15 Now, we are allowed to say, if someone sends an 16 application to us and they say that they are a minority,

17 let's say they are Latino, we can look at that, okay,

18 you are on this long list of people or categories that 19 are considered socioeconomically disadvantaged.

20 Also, someone can submit an application, I am 21 not Latino, here is all of my information. Adarand 22 says we have to consider that and include that in the 23 DBE. It does not say completely race neutral. So we 24 cannot rely on race solely as a deciding factor.

25 MS. BROWN: We have seen, and this was back in 55 1 D. C. in late April, people in Appalachia, who are 2 Caucasian are justified because of where they are and 3 the disparity they have suffered, they fall into this 4 category and were allowed into the program.

5 We need to be broadened and we need to consider 6 all of that. It's not just solely based on race. It's 7 not solely based on race.

8 MR. O'CONNOR: Kevin O'Connor again. So to be 9 a DBE, if you are minority or a woman, you are 10 considered disadvantaged?

11 MS. PATRICK: As a threshold, yes.

12 MR. O'CONNOR: Cart blanche? What about the 13 Service Disabled Veteran? I mean, they are

14 MS. PATRICK: That is also a category for our 15 regulations, it's included in that as well. Not just 16 minorities and women, but for EPA regulations, we also 17 include disabled veterans.

18 MR. O'CONNOR: As DBEs?

19 MS. PATRICK: Yes.

20 MR. O'CONNOR: Well, we were just told we 21 weren't.

22 MS. BROWN: Disabled veterans is what we 23 currently include in our

24 MS. PATRICK: Service disabled veterans.

25 MS. BROWN: Disabled veterans. 56 1 MR. O'CONNOR: Well, service connected 2 disability is what the nuance there is, whether you were 3 hurt in the line of action or hurt off base in a bar,

4 you can be disabled there too, but service disabled 5 veteran is the one that they are talking about who earns 6 the right to, you know, to fight for this country, and 7 what not.

8 MS. BROWN: Agreed. 9 MR. O'CONNOR: So is the Service Disabled 10 Veteran presumed to be a disadvantaged business?

11 MS. BROWN: Now it is.

12 MR. O'CONNOR: It is, okay, because at 13 CalTrans we are still fighting this.

14 MS. BROWN: Now, she is checking with my 15 summary. We say disabled American owned businesses,

16 which is different from Service Disabled Veterans.

17 We need to take a look at those distinctions;

18 but given the new changes that happened two weeks before 19 Christmas, and we were still on the road, I need to 20 factor that in as well.

21 My intuition says right now, as I am speaking 22 now, it is included. Prior to that, to me it was not,

23 possibly.

24 You have to look at the distinction as made 25 between disabled American owned and service disabled, 57 1 and that's what we have to go back and take a look at.

2 Service disabled veterans, they just got this 3 about three weeks, a month ago, right before Christmas.

4 So I need to factor that in and take a look at it.

5 MR. O'CONNOR: I realize the regs are real 6 fresh.

7 MS. BROWN: Real fresh. It's on my radar 8 screen. It's something we need to take a look at.

9 As we have gone through it initially, under our 10 10 percent statute, if I am not mistaken, it included 11 disabled American owned businesses. There's a 12 distinction.

13 Okay. So we need to go back and take a look at 14 that and digest what all of this means. 15 MR. O'CONNOR: We appreciate your 16 consideration. They are taking hits every day for us.

17 They are doing it for us.

18 When they come back, we should welcome them 19 regardless of sex or race and give them every break in 20 the book that we can.

21 MS. BROWN: I agree, sir.

22 MR. CARATINI: Jose Caratini, EPA drinking 23 water.

24 I was going to comment on the goal 25 negotiations. You kept mentioning that you could go to 58 1 the census and other sources.

2 How do states and grantees figure who is a 3 citizen and who is not a citizen; and, also, how do we 4 find out whether the veterans are US citizens or not,

5 too? They don't have to be a citizen to be in the armed 6 forces.

7 MS. PATRICK: Sorry. Could you please repeat 8 your question? I didn't get it.

9 MR. CARATINI: How do they determine 10 citizenship out of the US census and also out of the 11 veterans program?

12 MS. PATRICK: That is a good question. I 13 know that in terms of the veterans program, I am really 14 not sure how that is going to work.

15 In terms of how SBA will handle it, because of 16 SBA's other programs do require US citizenship. So if 17 we accept a state's certification of a veteran owned 18 business, then we will rely on that and SBA's legwork in 19 terms of what it does to determine citizenship.

20 Now looking at census data in terms of fair 21 share goals, that is something at the recipient level,

22 they would have to look at and extract from that data.

23 I know the census does capture citizenship 24 information. So that's something they also have to 25 take into consideration when they are doing availability 59 1 analysis, and how they do that will pretty much be up to 2 the process they take in doing their analysis, so I am 3 not sure.

4 MS. GARCIA: Cheryl Garcia, owner B & C 5 Janitorial. We are an 8( a), ( HUB) Zone, veteran owned 6 firm, so we have several concerns being raised here.

7 I apologize for my tardiness. You may have 8 addressed these issues.

9 First of all, I'll ask the question about when 10 a DBE subcontractor  what about when a DBE prime 11 contractor, when a DBE subcontractor fails to perform 12 adequately, it says here, that the prime should make 13 good faith efforts to find another subcontractor. It 14 does not say another DBE subcontractor.

15 So I would strongly encourage that that be 16 included, and they replace that one with a DBE, and that 17 if they replace that one DBE with a non DBE, they are 18 not meeting their goals.

19 Second question is can you tell us what EPA's 20 current goals are for 8( a) firms, and are they meeting 21 that goal?

22 MS. BROWN: Now, that's on a different 23 program, but I can tell you what that is.

24 I believe it is 6.5 percent, and let me think,

25 in FY 2003, we have a 20  help me out, Joe  23.5 60 1 percent for small business, and then the subset of that,

2 five percent was for women owned. I think it was 6.9 3 percent for 8( a).

4 We have a three percent goal for SDB, which is 5 inclusive of 8( a) and, which is inclusive of 8( a), and 6 then we had a three percent goal for women owned, three 7 percent goal for ( HUB) Zone, and three percent goal for 8 service disabled.

9 For our numbers in 2004, we met the 23 point

10 we met our small business goal. We met our 8( a) goal.

11 We did not meet our women owned, nor have we ever met 12 our women owned business goal. We have not met our 13 ( HUB) Zone goal. We have not met our service disabled 14 veteran goal.

15 With that I have to say the ( HUB) Zone program 16 is somewhat relatively new, although it's been around a 17 couple years, and so is the service disabled veterans 18 program. One of the impetus for the Service Disabled 19 Veteran program was that and that's why we have that.

20 What you have to recognize and understand is 21 with the 8( a) program, we can get to you and enter into 22 contracts, and this is separate and distinct from the 23 rule. But since you asked, I will give you that.

24 We can enter into contracts directly up to 3 25 million without competing. 61 1 Up until this time, we had something similar 2 with the ( HUB) Zone; if you are the only one, we could 3 enter into that with you or contract with you. If we 4 went out and we couldn't find anybody else, we had a 5 justification.

6 Now we have the same access with service 7 disabled veterans. We don't have that currently with 8 women.

9 There was legislation pending before the prior 10 administration, under the Clinton administration, there 11 was a review being done, and they were looking at 12 establishing a goal for women.

13 But that's been sent back to the drawing board 14 by this administration because the numbers don't add up.

15 We don't have a mechanism to go to you directly 16 with a program set aside for women owned businesses.

17 MS. GARCIA: Thank you. Can I go on with the 18 question? There's something mentioned about the 19 number, that there will be some language in the ruling 20 about a recipient requiring its prime contractors to pay 21 its subs in a specific number of days.

22 In light of the difficulty of SBEs receiving 23 prompt payment for primes, will that number of days be 24 specified?

25 MS. BROWN: That's the next  62 1 MS. PATRICK: Why don't we get into the 2 contact administration provision and we can then tell 3 you all about that. Short answer, yes, there will be a 4 specified number of days included in the regulation.

5 Contract administration provisions, page four,

6 A recipient must be notified in writing by its prime 7 prior to any termination of a DBE subcontractor.

8 That particular provision is in place because 9 we have heard lots of comments and complaints about the 10 agreed upon sub that has been a DBE is somehow dropped 11 and the recipient knows nothing about it, and this 12 provision will help sort of protect against that. 13 Prior to the termination, the prime contractor 14 has to notify the recipient that it is doing that, is 15 taking that kind of action. If you put them on notice 16 it's happening.

17 Next, when a DBE subcontractor fails to 18 complete its work under the subcontract for any reason,

19 the recipient must require the prime contractor to make 20 good faith efforts in hiring another subcontractor.

21 That is in place to make sure, even if a prime 22 contractor decides to no longer work with that sub and 23 wants to switch to another sub, go through the same good 24 faith effort to find the another subcontractor, that the 25 good faith efforts don't die after the first attempt. 63 1 MS. BROWN: Going back to the question you 2 raised, we can't say you have to hire a DBE or MBE. We 3 have to let the process work for itself, and, as DBEs,

4 you have to be competitive.

5 If they go out and see they went through the 6 good faith efforts, so be it, the process worked.

7 We have to be very careful; and I heard you

8 if I heard correctly  you were saying replace it with 9 another one, quite possibly, did I understand that?

10 We are saying that you still have to go through 11 the good faith efforts in order to replace the DBE that 12 was taken off.

13 We are not saying you have to replace it with 14 the DBE, but you went through that process and it lended 15 itself to that and whoever won won.

16 One of the other things we recognize and 17 understand is, depending upon what work is being done,

18 we have heard this in different places around the 19 country, it may be difficult possibly because if you are 20 doing a construction job and something happened and you 21 need to get somebody in there. All of this needs to 22 make good business sense is what I am really boiling 23 down to.

24 I am not saying they have to hold up a project 25 and lose money because we have to find a DBE. That 64 1 doesn't make good business sense.

2 The key for all of you grantees in this 3 audience today is documentation of your files.

4 What did you do? We need to know that. We 5 need to see that, and it needs to be clear and on the 6 books, and it needs to be part of your grant folder in 7 terms of what it is you did in this process.

8 And some of the reviews that were done early 9 on, the documentation is just not there. That's across 10 the board, not just for the grantees, but for others as 11 well. We have to do a better job to get all of this 12 done.

13 The key to all of this is documenting the file.

14 MS. COLBERT: Regina Colbert, Raibon &

15 Colbert Associates again.

16 I am very passionate about that comment about 17 the documentation, but, as a subcontractor entity, they 18 really won't have a mechanism for complaining, and so 19 there's not a means to have that story put forth.

20 A great deal of these contractors are savvy,

21 and I have been through this process with other entities 22 repeatedly, and I know our experience has been very 23 forthcoming as far as the initial paperwork submittal,

24 but when you are dealing with a replacement process, 25 it's a hasty schedule, and it's very convenient to 65 1 replace with someone other than a DBE.

2 MS. BROWN: I understand, and we take that 3 under advisement.

4 MR. INGRAM: James Ingram, James E. Ingram &

5 Company, Inc.

6 I would like to go back to number one and make 7 a recommendation and suggestion.

8 This is a unilateral process that you have 9 given here, number one, that the prime must notify the 10 sub in writing. Their needs to be, some specified date 11 needs to be put in there. Give 30 or 60 days notice.

12 There needs to be some process where the sub that's 13 being terminated can rebut the charges.

14 MS. PATRICK: That's a process that EPA cannot 15 get into. You are talking about the individual 16 procurement process of the recipient. That is not 17 something that we can delve too deeply into, so at the 18 recipient, at the state level, the state of California 19 has its own procurement practices set up, complaint 20 practice set up, and a process to challenge any of the 21 procurements made. That is something EPA cannot assert 22 itself into.

23 MR. INGRAM: But if you have given a 24 unilateral process, if you can give the prime the right 25 to terminate  66 1 MS. PATRICK: We have not given the prime the 2 right to terminate.

3 MR. INGRAM: Well, you have said recipient  4 well, here, number one, a recipient must be notified in 5 writing by its prime contractor prior to termination of 6 a DBE.

7 MS. PATRICK: Well, if you notice, we are 8 making it the recipient is required. We are telling the 9 recipient you are required to tell your prime to report 10 back to you, not that the prime has to report to EPA.

11 It's a privity type of thing with the entire 12 process, and how it works, because EPA is not dealing 13 with the prime directly. We have no direct business 14 with you. It's that recipient that does.

15 We want to make sure the recipient is aware,

16 and when the recipient is documenting its files, if EPA 17 comes out and does a review, then that's when we become 18 aware and ask different questions and find out what's 19 happening.

20 MS. BROWN: Even in direct procurement, EPA 21 does not have privy to subcontractors. That's between 22 the prime and the sub. I do not have privy to go down 23 to subcontractor level  when you enter into a contract 24 with EPA direct  I can only go to the prime. The sub 25 issues have to be dealt with between the prime and the 67 1 sub, and that's the same thing here.

2 MS. PATRICK: Okay. The next one is that a 3 recipient must require its prime contractor to make good 4 faith efforts even if the fair share objectives are met.

5 One of the things that we have become sort of 6 aware, that sometimes when someone has reached their 7 goal, they no longer feel the need to continue to strive 8 to do more.

9 What we are saying is, even after a recipient 10 has reached its goal, say their goal is 10 percent, it 11 does not stop there. As long as you continue to spend 12 EPA money, as long as you continue to procure in the 13 four categories using our grant dollars, you have to 14 continue to use the good faith efforts, even though you 15 met your goal, that you continue in that vein.

16 The next is a recipient must require its prime 17 contractor to pay its subcontractor for satisfactory 18 performance within a specific number of days from the 19 prime contractor's receipt of payment from the 20 recipient.

21 One again, this is something that we are 22 requiring the recipients to require. Okay. I want to 23 make that very, very clear.

24 The comment the young lady made putting a 25 specific number of days, you cannot believe the volume 68 1 of comments we have received that are echoing the same 2 thing.

3 We have heard comments from as little as three 4 days to as many as 45.

5 Most of the comments we have received thus far 6 suggested 7 to 10 days to make sure that the 7 subcontractor is paid, and we have received comments 8 saying that that's a reasonable amount of time.

9 We would like to receive more comment what you 10 believe to be a good number of days to put in that part 11 of the rule.

12 MS. BROWN: In this area, I would like to hear 13 comments from the minority and women owned business 14 community. If you are a grant recipient, let us know 15 what this will do to your process, if we require 16 something looking at 7 to 10, even 15 days for payment.

17 That's what we are hearing around the country, and so we 18 will stick a number in.

19 MR. DAYRIT: Ignacio Dayrit, City of 20 Emeryville.

21 The way we have our contracts, we pay 30 to 45 22 days after we receive a bill. So that if a sub submits 23 their bill so many days before that, they are talking 24 about 40 to 60 days before they get paid.

25 MS. PATRICK: The time in here is putting a 69 1 date in there by which the sub has to be paid once the 2 prime has been paid.

3 So if it takes you guys 30 to 60 days to pay 4 your prime, what we are saying is that's when this 5 provision kicks in.

6 Once that prime has the dollars, the prime has 7 X number of days to pay his sub.

8 So even if it takes you 90 days to pay your 9 prime, that's between you and your prime.

10 Once he is paid, this kicks in, and you have to 11 pay the sub in a certain number of days.

12 MS. CHRISTIAN: My name is Camille Christian,

13 Christian General Services.

14 Having and doing business here in the Bay Area 15 and knowing the amount of time, like he mentioned,

16 sometimes 40 days, 45 days they get paid as a 17 subcontractor, you have waited 45, 90 days for them to 18 get their money. Then they want you to wait another 45 19 to 90 days to get your money, and you are going broke.

20 Seven, max 14 days is the most a small 21 contractor can handle because it just breaks you in 22 half. You don't have any room to do anything else.

23 MR. BOONSTRA: Eric Boonstra, Big E 24 Construction.

25 I just have a comment on that, kind of a 70 1 suggestion. What I try to do from the subcontract level 2 on federal contracts, they have the front payment 3 clause, put in, they have 14 days. Final payment, they 4 have 30 days.

5 What I have been trying to do is trying to just 6 make sure if the prime contractor's contract has that 7 clause in it, I have tried to input that into the sub 8 contracts that are given and written to me, so it covers 9 me as well as they are being covered by the government.

10 MS. PATRICK: Thank you.

11 MS. HILL: Tracy Hill, Out Source Consulting 12 Services.

13 My question really is around the sub, but it 14 goes to the recipients, because what I don't understand 15 in this particular issue is where the recipient is 16 requiring the prime to pay their subcontractor X number 17 days after having received his money.

18 How does that affect the recipient process?

19 Because, to me, their process, they are going to pay 20 their prime within their terms.

21 I am not clear how the recipient process is 22 affected. The recipient's process is not really 23 affected by this particular provision really at all,

24 other than they have to tell their prime, make sure you 25 pay them in X number of days. 71 1 MS. BROWN: You are right on the money there. 2 MS. PATRICK: Ready? Okay. The next thing is 3 that the recipient must require the completion of a few 4 new forms to prevent " bait and switch" tactics at the 5 subcontract level by prime contractors which could 6 circumvent the spirit of the DBE program.

7 Those are the forms we were talking about

8 sorry, OMB process. Once those forms are out, I am sure 9 they will have to go out for comment as well, which is 10 the process.

11 The forms, the intent of them is to make sure 12 that there's a record kept of what is happening at the 13 subcontract level.

14 Before this, there was no mechanism for either 15 the recipient to know, really, or for us to know what's 16 happening so we that could ask some questions and find 17 out what's going on out there at the subcontract level.

18 These forms will give the recipient a clear 19 snapshot of what's happening.

20 To the extent the forms are required to be 21 included in the grant file, EPA will have access to 22 knowing what is going on as well, and that's what the 23 forms are intended to do.

24 At this point we will take a quick break, a 25 ten minute break. We have been sitting here a long 72 1 time, and when we convene, we will go on with the rest 2 of the rule.

3 MS. BROWN: Thank you.

4 ( Whereupon, a short break taken at 11: 00 a. m.)

5 MS. BROWN: Okay. Any other questions or 6 comments?

7 MS. PATRICK: Okay. The next one is Submission 8 of Fair Share Goals. This particular section is of 9 particular relevance to our recipients in the audience.

10 The rule would require a recipient to submit 11 its proposed fair share objectives and supporting 12 documentation to the Agency no later than 90 days after 13 the acceptance of the assistance award.

14 A recipient would not be able to spend any of 15 its financial assistance award for procurement until the 16 fair share objective negotiation process has been 17 completed.

18 This is very, very important to the recipient.

19 This provision is new.

20 What this means is within 90 days after the 21 recipient says, yes, EPA, we want your money, you have 22 to negotiate your goal with us.

23 If that goal is not negotiated, you will not be 24 able to spend any of those dollars for procurement in 25 construction services, equipment, or supplies, which 73 1 basically means you cannot buy anything.

2 You can use it if you want to spend it on 3 salaries. That's perfectly fine. But the minute you go 4 out and procure something outside of where you're  you 5 go outside of what your agency has, then you would not 6 be able to spend unless your goals have been negotiated.

7 Okay. I want to make that crystal clear.

8 MS. BROWN: We have used this in some regions 9 and it's worked if they didn't stay out too long before 10 they came to the table to negotiate.

11 MS. PATRICK: We also have found out that the 12 cost of preparing an availability analysis or disparity 13 study may be grant eligible depending on the specific 14 fact situation.

15 Now, you would not be able to apply that cost 16 to one grant. You can't use an entire grant just to do 17 that, but you may be able to spread them across the 18 different grants that a state may receive.

19 Because, actually, the analysis will go to 20 benefit possibly many different parts of that particular 21 state, agencies within that state, if you are buying 22 some of the same types of things, okay, if you use the 23 same relevant geographic area for your purchasing.

24 It's something that can be looked at, but on a 25 case by case basis. That's the decision the grant 74 1 office will have to make if the cost is allowable under 2 the grant or if you can spread it across that way.

3 MS. BROWN: I can assure you that EPA will not 4 be paying for disparity studies. It costs too much, and 5 it's probably more than what your grant is worth in a 6 lot of instances.

7 But there is the possibility for the 8 availability analysis or a portion of the disparity 9 study, but not the whole disparity study.

10 We are hearing disparity studies could cost 11 millions or hundreds of thousands of dollars.

12 MR. DE PALMA: 300,000 to a million dollars.

13 MS. BROWN: And this is Jeanette speaking, and 14 I think I can speak for the Agency, we won't be paying 15 for the disparity studies.

16 The availability analysis, we can take a look 17 at, and, again, before you go out and do anything, you 18 need to make sure that you clear this with your project 19 officer and get their okay, because when this is done, 20 the money is coming from the grant, and there's a 21 trade off there; or, if you spread it across, and I 22 can't tell you that you are going to be getting more 23 money to get your grant done, the work under your grant.

24 But this may be an administrative cost that can 25 be assessed across all of your grants. But you need to 75 1 talk to your project officer, your project manager in 2 advance. Don't go do it and then say, Jeanette said 3 you are going to pay for it. That won't work.

4 MS. PATRICK: Okay.

5 MS. BROWN: He has a question.

6 MR. DAYRIT: Ignacio Dayrit. Could you just 7 point out where in this this is located?

8 MS. PATRICK: Where this is located, you mean 9 the part about the cost, whatever?

10 MR. DAYRIT: The 90 days.

11 MS. PATRICK: That's going to be, fair share 12 goals are discussed on page 43849, Subpart D  Fair 13 Share Objectives.

14 Moving on. Fair share goals, once they're 15 approved would remain in effect for three fiscal years.

16 If significant changes occur during that time period 17 rendering the data obsolete, the recipient and EPA will 18 renegotiate the goals.

19 Some of the things that can render the previous 20 negotiated goals obsolete, another census is done or 21 drastic changes in demographics, that things are really 22 different, a state can come to EPA and say, we have a 23 basis to renegotiate the goals, and that is the 24 background for renegotiating. That's always possible.

25 But, as a general thing, the goals are in place 76 1 for three fiscal years.

2 MR. CARATINI: Jose Caratini.

3 So are the states only responsible for the 4 denominator? Is EPA going to give us the denominator 5 so we know where to certify?

6 MS. PATRICK: In terms to certify in terms of 7 giving their availability analysis?

8 MR. CARATINI: No, to negotiate the goal.

9 MS. PATRICK: Are you talking about in the 10 federal rule?

11 MR. CARATINI: I'm talking about the fair 12 share goal. In the negotiated fair share goal, there 13 are two numbers to come up with a goal. EPA knows who 14 are the certified entities in the state.

15 MS. PATRICK: No. That is up to the 16 recipient. In the process of doing the availability 17 analysis, that type of information is going to come 18 through and when they sit down and do the goal.

19 What happens is a recipient has an availability 20 analysis done. They take that information. They go 21 through what the formula is within here, what the form 22 is that is actually in the rule basing the goal. Based 23 on our availability analysis, and based on this formula,

24 EPA, this is what we think our goals should be.

25 They present that to EPA. The negotiation 77 1 process begins. EPA looks at it. We look at the 2 availability analysis and we make sure the availability 3 analysis substantiates what you say your goals are,

4 should be, or, hey, we have questions about what you 5 submitted, or your basis.

6 And that's how the negotiation takes place,

7 back and forth, to determine the goal that is acceptable 8 to both parties.

9 MR. CARATINI: I'm just trying to find out,

10 what is the accurate goal? If the state doesn't know 11 who are the certified

12 MS. PATRICK: You're asking

13 MS. BROWN: We are asking the recipient, go 14 and find out who is out there and then come back and 15 show us how you came up with what you have come up with.

16 MR. CARATINI: My question is, how are the 17 states going to know who are the certified entities by 18 the EPA?

19 MS. PATRICK: To know who is certified by EPA,

20 there will be the database. That information will be 21 available broadly to the public on our web site and it's 22 information they can pull down.

23 We know when the program first starts there 24 will be a bit of a lag because we just started to 25 certify entities. 78 1 So to the extent they are relying on certified 2 by SBA or DOT, given the way it's written, the 3 citizenship requirements, that may change. We don't 4 know, if they are dealing with those types of entities,

5 we can automatically say, they are certified by EPA, you 6 can use the universe.

7 But there will be a bit of lag time in the 8 middle to work it out while we are continuing to certify 9 once we get started.

10 MS. BROWN: Currently under the program, we 11 don't certify, so this is brand new for us, as it is 12 with the grant recipients.

13 So there's going to be a process where we have 14 to build and start doing, and we don't even know what 15 the universal certification requirements are going to be 16 yet because that's not the business that we are in.

17 MR. BORRMANN: Ralph Borrmann. Bay Area Air 18 Quality.

19 On that item about the certification, it's very 20 complex. I mean, the whole program is very complex. If 21 you are trying to read CFR 40, you know, it's all 22 legalese, so understanding the complexities here is 23 difficult for somebody who is almost a professional at 24 it who is looking at this material all of the time.

25 In terms of figuring out the DBE goal, for 79 1 instance, there's really no training out there to show a 2 novice how to do it, so you have to go and hire 3 somebody. That can be very expensive. I have had 4 quotes up to $ 9,000 to figure out a DBE goal.

5 So these are all real costs that aren't really 6 considered in this. There's no training, and 7 contractors who are out there to do the goal setting are 8 quite expensive and difficult to find.

9 You won't get a recommendation from CalTrans or 10 the state on contractors who will calculate the goal for 11 you and help you. So this is on the spend side.

12 There are a lot of difficulties there which,

13 really, you are not addressing today, I understand, but 14 I just think you should know about it.

15 MS. BROWN: Where are you from again?

16 MR. BORRMANN: Bay Area Air Quality Management 17 District.

18 MS. BROWN: This is all new to us. When 19 Adarand hit  let me take you back a couple years in 20 terms of a general picture where we were.

21 Basically, the program has been in effect for a 22 number of years, and this is pretty much how our 23 negotiations went.

24 You did 8 percent last year, you think you can 25 do that this year. The grant recipients say yes or no. 80 1 We say, okay. They say, no. We say, what do you think 2 you can do?

3 For those of you who have been around prior,

4 that's basically how we did it for the most part.

5 When Adarand hit, it changed how we do 6 business, and we got into the business of looking at it 7 and doing availability analysis.

8 We brought in, and have been working with, a 9 minority group here out of Oakland, Mason Tillman &

10 Associates has been our contractor, who put together a 11 cookbook on how to do availability analysis we can make 12 available to you if you missed that.

13 We have brought in  some of our meetings

14 we have had several meetings where we brought in our 15 state and local recipients, invited them in, went 16 through the process and talked to them about how that's 17 to be done. And so we have done some, while it may be 18 minimal, we have done some, yes.

19 MR. DE PALMA: If you are looking in particular 20 areas, I know there are resources, especially those on 21 the contract compliance side. Within East Bay, there's 22 the East Bay Inter Agency Alliance, comprised of 23 myself, a bunch of our contractor compliance officers 24 for the various jurisdictions would be more than happy 25 to assist anybody who need HRC assistance, with the 81 1 Golden Gate Transit Authority, those are resources as 2 well.

3 MS. BROWN: In addition, there are some local 4 colleges that are able to help some of the recipients in 5 coming up with what the availability analysis should 6 look like.

7 So there is information out there.

8 Do you have to do your homework and research?

9 Yes, you do. But once that is done, you are set, you 10 have done the groundwork for that, and then build on it.

11 But there are resources out there that are 12 readily available, and it may be worth your interest to 13 take a look at some of those that we mentioned.

14 MR. DE PALMA: For Alameda County, agencies 15 within Alameda County should be aware there is an 16 availability study underway. It's close to completion.

17 At that point there are availability numbers right 18 there.

19 City College of San Francisco also has a fairly 20 accurate take on what the availability is within San 21 Francisco.

22 I believe there are some other sources for the 23 South Bay and Peninsula as well.

24 MS. FELETTO: Nadine Feletto, California 25 Health Services. 82 1 With regard to the relevant geographic area for 2 establishing the fair share goals, I would be interested 3 to hear more about how the developers have thought about 4 this, because in a state like California, well, it's an 5 entirely different circumstance than in an area where 6 states are smaller, like on the East Coast. You have 7 counties out here that are as large as a state.

8 Defining the, differentiating whether the state 9 level goals are appropriate or meaningful to carry down 10 to the local level is more difficult in a state like 11 California.

12 The availability  in fact, if you looked up 13 at the northwest corner of the state it would be very 14 different than the southeast corner.

15 That being said, in addition, it directs to the 16 general relevance of such a great investment in 17 developing fair share goals, since they neither relieve 18 nor impose a standard that somewhat seems like it 19 diverts the focus from actually achieving good faith 20 effort to a lot of full employment for disparity study 21 developers or availability study developers.

22 MS. BROWN: Well, we are not suggesting that 23 this is a basis for employment for those kinds of 24 contractors, but they are readily available to you.

25 What we are asking you to do is to look at what 83 1 your current market base is. We recognize, and 2 understand, we are not trying to change that. We need 3 you to tell us, where do you go to get, where are your 4 contractors coming from?

5 In some areas, while in other parts of the 6 country on the East Coast may be, while the states may 7 be small, their geographic area may be inclusive of 8 other states, if you have people coming across state 9 lines.

10 In some other areas of the country, and I think 11 it's New Jersey, in particular, they have an upper state 12 goal and a lower state goal because of how the current 13 market area is defined.

14 We are asking you, as the grant recipient, to 15 tell us, because you already have this information, for 16 the most part, where are your bidders coming from. Are 17 you seeing them, what kind of concentration and where?

18 That's how you draw the line to determine what your 19 availability analysis should be inclusive of.

20 MS. DOUGHERTY: Kathleen Dougherty, Arizona.

21 I can certainly understand what you are saying. But 22 from the procurement perspective, our bidders come from 23 wherever they want to come from, and so it's really hard 24 to put geographical boundaries on them.

25 People said they would like to do business in 84 1 this geographical region, which is different from the 2 census data, which are the people that hang out in the 3 region, and so I think that is kind of where it gets 4 difficult to balance off.

5 When you are doing an SRF program, your 6 underwriter will come from anywhere in the country.

7 MS. PATRICK: Not only what census data is 8 available, not only the universe who builds your 9 contracts, but also where you go when you actually buy 10 it.

11 So it's a combination of all three of those 12 things to help determine what your relevant geographic 13 market is.

14 MS. DOUGHERTY: One of the points is if we can 15 have, if we can kind of develop, learn from each other 16 and share lessons and understandings. But we are all 17 kind of hacking at data differently.

18 MS. PATRICK: One of the provisions in the 19 rule is in the instance where there's a lead agency that 20 is identified in a state, it's possible for the other 21 agencies in the state to use the same goal that has been 22 identified, as long as that goal is relevant to you.

23 And I know a state as large as California, the size 24 issue, it's possible that the state agency in Northern 25 California could have nothing to do in terms of a 85 1 geographic market with someplace else in the state.

2 MS. DOUGHERTY: Has the state of California 3 done a disparity for the state, a state that large?

4 MR. DE PALMA: They have done availability.

5 They don't do disparity. In lieu of 209, they don't do 6 disparity, but their availability is, the market area is 7 the entire state.

8 MS. PATRICK: So using that availability 9 analysis, in that analysis, it has a breakdown of 10 smaller places, you could sort of redefine within that.

11 I am trying to help you use data that is out 12 there.

13 MS. BROWN: For Arizona, has the state of 14 Arizona done available analysis or disparity study, and 15 take a look at how they came up with the information.

16 When you talk about buying supplies, your 17 geographic market can be all over the country, if you 18 use Staples, recognize, we understand that; but if 19 that's what your practice is, that's what you need to 20 consider. 21 I am not trying to redefine or redraw how you 22 do business. I am asking you to show us and tell us 23 what that is and how inclusive of it, how inclusive it 24 is in terms of minority and women owned business.

25 I know that's a lot  we've been doing this, 86 1 you have been with us for a while  we have been doing 2 this for at least five years; and, basically, what we 3 have said, once you did the initial one, we had the 4 census data, we said, go back and check. Did it 5 change? If it did, update.

6 Some people said, no effect. Not a problem.

7 Okay. I am not trying to spend all of my time 8 or all of our time, nor you, as the grant recipients,

9 should be spending all of your time on the availability 10 analysis.

11 But the key to all of this is, if there is a 12 challenge, what are the names based on? How did we come 13 up with them? Can you support them being the grant 14 recipient, and that's how we based our numbers, based 15 on what you gave us.

16 We need to make sure that we understand,

17 especially out here, west of  okay, these programs are 18 being challenged. How did you come up with what you 19 came up with?

20 So that if there's a challenge, you can't say 21 EPA made me do this and this is the number they gave me.

22 We are saying, you came up with the numbers.

23 How did you come up with them? You need to be 24 comfortable with those in determining or assessing how 25 you came up with those numbers and being able to support 87 1 them.

2 And this money, and it's a choice that every 3 local jurisdiction, as well as every grantee has to 4 make.

5 When you sign up to take this money, it comes 6 with stipulations. You can't just take the money and 7 walk away and say, I will do whatever I want to do with 8 it, whether at the state or local level or not. This is 9 federal funds.

10 MS. PATRICK: Okay.

11 MS. BROWN: We can go back  okay.

12 MS. GARCIA: Cheryl Garcia, C & G Janitorial.

13 On statistical disparity, how are the statistical 14 disparities and the ability of an MBE ability to get 15 funding? Clearly I have discussed this with SBA until 16 I am blue in the face.

17 ProNet is clearly not indicative of our 18 ability, our financial capacity.

19 There is nothing there that says I have a 20 million dollars sitting in the bank. There's no way to 21 put that anywhere.

22 So how are those statistical disparities about 23 our ability to get funding determined?

24 MS. BROWN: I am not sure if I understand, I 25 mean in terms of getting funding. You mean in terms of 88 1 getting contracts?

2 MS. GARCIA: Well, it says in terms of 3 statistical disparity, in F 1, the last phrase, talks 4 about disparity, but they also talk about statistical 5 disparity and the ability of MBEs and WBEs to get 6 necessary financing, bonding and insurance.

7 How does anyone know about my company's ability 8 to get funding?

9 MR. DE PALMA: Actually, it isn't looking for 10 your company's financing. It's actually calculating 11 the utilization availability, which when you look at the 12 availability of an MBE/ WBE business, you look at what 13 the utilization is.

14 Through the equation, there's what's called the 15 P value. Now the P value is whether you determine 16 statistically significant disparity, and only 17 statistically significant disparity can you have an MWBE 18 program. That's what it is talking about.

19 Yours is a capacity issue. The capacity issue 20 is judged on the jurisdiction.

21 MS. BROWN: It's a case by case basis. While 22 you may not have capacity, this time around, you may the 23 next.

24 MR. DE PALMA: The calculation for the P 25 value, it would be you are looking at what the 89 1 jurisdiction's contracts are both at the formal and 2 informal level, and doing that, there's certain 3 distinctions that the law allows you to make. A company 4 of a certain size could do $ 300,000 contract because all 5 of these companies are doing it in that jurisdiction.

6 MR. INGRAM: James Ingram with James E. Ingram 7 & Company, Inc.

8 That all sounds good from an academic 9 standpoint, but I really think the point, where you are 10 getting your statistics from in terms of whether or not 11 companies are bonding in the area, insurance companies 12 are writing the necessary liability coverages that are 13 required, so where are those figures coming from?

14 Are you interviewing those surety companies or 15 are you interviewing those insurance companies to say 16 that coverage is, bonding is available in this area?

17 MS. BROWN: We are not interviewing anybody.

18 MR. INGRAM: Are you asking your recipients

19 MS. BROWN: We are saying that these are things 20 they need to consider in doing their availability 21 analysis.

22 MR. INGRAM: But how are they coming up

23 MR. DE PALMA: Again, on that aspect we are 24 not looking at bonding as determining whether you have 25 the capacity to hold on. It's not, you can't get 90 1 bonded does not mean that you do not have the capacity.

2 It means there is a separate issue that 3 jurisdiction has to address so that subcontractor has 4 the ability to go out and work with a prime does not 5 eliminate you as being part of that availability.

6 Actually, if anything else, it's part of the 7 qualitative or anecdotal evidence that you need for the 8 disparity study to show that, say, an African American 9 construction contractor that there is disparity within 10 that group, these are the reasons why, and this is why 11 we need that.

12 MR. INGRAM: James Ingram. I don't want to 13 beat it to death.

14 These are practical issues for small 15 businesses, practical issues whether or not they can get 16 a contract based on whether or not they are going to get 17 bonded. 18 This is an area where EPA really needs to look 19 at. You are talking about the disparity study, but 20 there's a need for more quantitative, some more 21 qualitative information in this particular area, and I 22 don't think it's there.

23 MR. DE PALMA: I think what Mr. Ingram is 24 talking about is really the technical assistance side of 25 contracting, and that is something that we do definitely 91 1 need more out here in the Bay Area, but the ability to 2 go out there and get bonding, the ability to go out and 3 write proposals.

4 MR. INGRAM: No. James Ingram. I am not 5 talking about technical assistance. I am talking about 6 practical issues. I am talking about practical issues.

7 How do you bring into the loop the bonding companies,

8 the surety companies, the insurance companies?

9 You may say, well, this is a disparity study.

10 If you are not talking to them, if you are not including 11 them in your surveys, then you are basically missing a 12 real valid point, because they are also involved in 13 getting federal dollars.

14 This is something I ask EPA to take a look at.

15 MS. BROWN: Point taken. Any other questions?

16 MS. PATRICK: Now, Race and gender conscious 17 efforts. To the extent good faith efforts prove to be 18 inadequate to achieve the fair share goals for MBEs and 19 WBEs, encourage a recipient or prime contractor to take 20 reasonable race and/ or gender conscious action to the 21 extent necessary to more closely achieve the fair share 22 goals, including price incentives and technical 23 evaluation credits. Prior notification of the 24 contemplated action to EPA is required.

25 MS. BROWN: Before you do that  92 1 MS. PATRICK: Before you do it, we need to 2 know you are doing it.

3 The next section addresses Exemptions. Very,

4 very clear up front here. There are some things in the 5 world that won't go away, like death and taxes. You're 6 sure of them, right?

7 Well, with our rule, there are two things that 8 will never go away: the reporting requirements cannot 9 be exempted. We don't have the power to give you one,

10 and there's no basis for one.

11 The second thing, which are the good faith 12 efforts, they will never go away.

13 However, we do have a category of exemptions 14 from negotiations with EPA of a fair share goal, and 15 that is what this section is addressing. Only 16 exemptions from negotiated goal. Nothing on good faith 17 efforts and not the reporting.

18 MS. BROWN: And the reporting requirements 19 currently exist, they have always existed, and if you 20 are a grant recipient, you should be reporting.

21 The good faith efforts currently exist and you 22 should be doing those as well.

23 MS. PATRICK: Okay. Exemptions. EPA is 24 proposing to exempt recipients of an EPA financial 25 assistance agreement in the amount of $ 250,000 or less 93 1 for any single assistance agreement, or of more than one 2 financial assistance agreement with a combined total of 3 250,000 or less in any one fiscal year combined with the 4 agreement from the fair share negotiation requirements.

5 What that means, simply, if you have one grant 6 that is over $ 250,000, then you would have to negotiate.

7 If your grant totals for the year of all of 8 your grants add up to over $ 250,000, you have to 9 negotiate a goal.

10 But if your totals are under $ 250,000, you will 11 be exempt from the negotiations of a fair share goal.

12 MS. BROWN: Yes, sir.

13 MR. DAYRIT: Ignacio Dayrit, City of 14 Emeryville, so for a two year grant of 300,000, you 15 would still have to do it?

16 MS. BROWN: Yes. You would.

17 MS. PATRICK: Yes, you would. The statement 18 exemption applies to our Brownfields, CWSRF, DWSRF.

19 The same exemptions apply for the $ 250,000 threshold for 20 the loan amounts.

21 The next set of exemptions only apply to grants 22 to tribes. Grants to tribes and intertribal consortia 23 that are eligible to be included in Performance 24 Partnership Grants are exempt from fair share 25 negotiations. 94 1 What that means, if a grant is PPG eligible,

2 that go to tribes or intertribal consortia that are 3 eligible to be rolled into a PPG will be exempt from 4 negotiations.

5 That would effectively exempt 17 grant 6 categories from negotiations to tribes only.

7 There is a reason why we got to this point.

8 When we first put the rule out there, all tribes were 9 going to negotiate, period, just like the states. 10 However, we received a lot of feedback, not 11 only from the tribal community, but also internally in 12 EPA, hey, do you understand the amount of administrative 13 time and what the burden is going to be on us?

14 Particularly, Region 10 pushed back.

15 Region 10 has 270 plus indian tribes. That 16 would mean that one person, who is MBE/ WBE coordinator,

17 who has to go through 272 negotiations, in addition to 18 the state recipients, and all of the other recipients 19 that they had, and so the question was, is there some 20 way we can do an exemption that will reduce that number 21 and make sense?

22 We looked at this particular exemption. We did 23 sort of a case study based on Region 10.

24 Once we backed out the exemptions for the 250K,

25 and then we backed out the PPG eligible grants and also 95 1 the TAG grants are also exempt, the number went from 272 2 down to 25, which is the little bit more realistic view,

3 what we want to capture, which is a large number of 4 grantees, particularly with tribal grants. So that is 5 why this particular grant in place for tribes.

6 MS. BROWN: Again, that's only for 7 negotiations.

8 One of the other things we mentioned earlier,

9 we have asked for and would like the states to look at 10 being, or identify a lead agency where other local 11 jurisdictions and/ or grant recipients could use the goal 12 that was negotiated by the lead agency for that state 13 provided, and the key to all of this, even under the 14 drinking water program, SRF program, we have to make 15 sure we are still looking at the same equivalent 16 geographical area in a semblance there. We make sure we 17 are comparing apples and apples, and what you are buying 18 is similar to what you are buying. Those kinds of 19 things need to be taken under advisement.

20 So that opportunity is made available to any of 21 our grant recipients.

22 If you are a small, local jurisdiction, and 23 this does not  and what you see, you see a semblance 24 of what's being done by the state or that lead agency,

25 if one has been identified, you can adopt that goal. 96 1 So that may be something that some of your 2 smaller jurisdictions may want to consider. I don't 3 know if it's applicable, but that's something we are 4 possibly looking into.

5 MS. PATRICK: The negotiations of goals with 6 the tribes is something brand new. The tribes never had 7 to negotiate before in the past. We recognized we have 8 instituted a three year phase in period for the tribes 9 regarding this particular provision of the rule. Some 10 of the things are already in effect for tribes, although 11 tribes supposed to have been reporting all along, but 12 some things internally in the agency we have not 13 required.

14 MS. BROWN: Some regions required it and 15 others did not. Our regulation was not consistent in 16 how we carried it out. Now we will be across the board.

17 MS. PATRICK: We recognize the negotiations 18 part is brand new, three year phase in period as far as 19 the tribes and trust areas.

20 Let's see, record keeping and reporting, next 21 page. 22 UNIDENTIFIED PERSON: Citizenship requirement,

23 under definitions, is that going to be an issue?

24 Explain why citizenship is a requirement?

25 MS. PATRICK: I can refer you to that 97 1 particular section.

2 UNIDENTIFIED PERSON: To get certified you 3 need to be a citizen?

4 MS. PATRICK: If you turn to page 43829, in 5 the first column, the first full paragraph sort of 6 midway in the column, there's an explanation there about 7 the citizenship requirement, and why at this point in 8 this particular draft of the rule we have decided to go 9 with having US citizenship as a requirement.

10 UNIDENTIFIED PERSON: It does not explain why 11 citizenship makes us more disadvantaged than a non 12 citizen.

13 MS. PATRICK: It doesn't make you more 14 disadvantaged at all. We have never said that and are 15 not saying that.

16 UNIDENTIFIED PERSON: Well, you are eliminating 17 a number of businesses because they are not

18 MS. PATRICK: I would encourage you to make an 19 official comment. This is what the forum is about. If 20 you have comments or suggestions about this particular 21 provision, we want to hear them.

22 UNIDENTIFIED PERSON: My comment is we need to 23 explain here why US citizenship makes a difference.

24 MS. BROWN: Well, one of the things we did 25 when we looked at the programs that were out there, we 98 1 used SBA's guidelines in terms of what they looked for.

2 SBA, in order to be certified under any of their 3 programs, you have to be a citizen.

4 Now, I recognize, and understand, that DOT did 5 something a little bit different, but where we could we 6 took it under advisement and, working with DOT, with 7 communication with SBA, and in our discussions with the 8 Department of Justice, and I am not saying they told us,

9 we tried to be as uniform as possible where we could.

10 We used SBA guidance here when we look at 11 citizenship.

12 SBA requires in order to be certified as an 13 8( a), as a DBE, you have to be a citizen, and that's 14 what we used, and that's the explanation, sir. That's 15 what we used.

16 UNIDENTIFIED PERSON: Our grant recipients are 17 supposed to certify that they do not discriminate as one 18 of the certifications on discrimination, and one of the 19 issues is place of origin. So how can our recipients do 20 bidding that are excluding all of the other 21 bidders who are supposed to be participating

22 MS. PATRICK: How they could, I don't know.

23 We are not asking anyone to discriminate on any basis.

24 We are requiring you be eligible, to be 25 certified as a DBE under our program. That does not 99 1 amount to EPA dictating discrimination in any way.

2 In terms of us having to explain in the context 3 of our rule that we are requiring someone to 4 discriminate, that's not what we are doing. That is 5 not something we would ever say or suggest.

6 Is there an actual suggestion you would like to 7 make? We would like to hear it.

8 UNIDENTIFIED PERSON: I would like that our 9 database with all of the lists of DBE rules not be 10 published.

11 MS. BROWN: Say it again. I didn't hear it.

12 UNIDENTIFIED PERSON: I recommend the database,

13 who shows who are the DBEs certified business not be 14 available to the public because people will use that 15 list only and not include all of the other businesses 16 that could be used in the process.

17 MS. PATRICK: What do you want on your bidders 18 list? How do you define a bidders list? Those 19 definitions vary from place to place.

20 We are aware that we have to be more specific 21 in that section. We realize we have to go back and 22 make that specific.

23 Actively, we are asking for suggestions, for 24 things you all, as a recipient, what would be helpful to 25 you to be included on the bidders list. 100 1 MS. BROWN: How do you define as a bidders 2 list? Is it who came in or what  when we were in 3 different parts of the country, we got different 4 interpretations of what a bidders list is. I thought it 5 was something different.

6 So my eyes have been opened to different 7 interpretations.

8 So we are looking to define this in more detail 9 and to give you specific information, but, as a grantee,

10 it would be good to know what you consider a bidder's 11 mailing list on and/ or the information that is contained 12 in it that you deem viable. 13 MS. FELETTO: Nadine Feletto.

14 From what I read and have heard, bidders list 15 does have two meanings, or I have read two meanings.

16 One is a list that you establish in advance 17 that limits and defines the boundaries of who is 18 notified of the opportunity, whereas another might be 19 that the list establishes only a subcomponent of who the 20 information and the opportunity is broadcast to, which 21 appears to be a more appropriate mechanism.

22 The other aspect of bidders' list is whether 23 it's ProNet or the DOT program, that something could be 24 established as a de facto bidders list, so each 25 recipient would not have to go through the exercise of 101 1 establishing a bidders list mechanism, which could add 2 significant cost to a small recipient, recipient of a 3 relatively small loan.

4 MS. BROWN: While we recognize and understand 5 a lot of these databases are out there, ProNet is done 6 away with now.

7 Effective as of October of last year, CCR,

8 which is where everybody has to go who wants to do 9 business with the federal government has to be 10 registered.

11 Depending on some of your local jurisdictions,

12 everybody may not be registered on ProNet.

13 When we were in Billings, Montana, they didn't 14 know what ProNet was, or that it even existed, and 15 that's obsolete.

16 So in establishing a de facto database,

17 everybody still may not, and even some of your local,

18 depending on the local jurisdiction that you are dealing 19 with, we may be causing some problems there that we 20 didn't envision.

21 We can make sure that people know where to go 22 to look for, but that is not to say that everybody is 23 ready, because everybody is not.

24 That's a business decision that people have to 25 make, but sometimes people can't make it if they don't 102 1 know it exists.

2 And when we go to some of these places in these 3 remote areas, a lot of people don't know that these 4 databases and that these resources are available to 5 them.

6 So we are in kind of a quandary there in terms 7 of how to define and what to use.

8 I would like for you to also take that in mind 9 because we are not just talking about a major area like 10 San Francisco. This is all inclusive of the United 11 States, the trust territories, and the tribes.

12 MS. DOUGHERTY: Kathleen Dougherty, Arizona 13 Department of Environmental Quality.

14 There's really bidders lists on two different 15 levels, and I got really upset because it gets into 16 where you are going into the bidding process. You 17 previously stated we want to stay out of the law,

18 there's enough law already.

19 Part of it, what you are saying is that, what I 20 think what you really want is a list that was solicited 21 for this procurement. And the way this is written up 22 doesn't get to that, and I would be glad to send you 23 something if you would like to take a shot at it.

24 I think there are two objectives in here. 25 The other objective is, you say that you kind 103 1 of commit to go out and reach out, and that's why maybe 2 that's proactively identifying, this is our plan when we 3 are reaching out, we are going to reach out these ways 4 for our jurisdiction. These are the ways for us to 5 reach out.

6 MS. BROWN: That would be good to send us 7 that.

8 MS. PATRICK: That's the spirit of the entire 9 bidders list. Primarily make it a tool you can use,

10 the recipient can use, in terms of building up who they 11 know in their universe of people who are available to do 12 the work, and also it allows us to come and check, see 13 you are doing your good faith effort.

14 If you are doing your good faith effort, you 15 ought to have somebody on the list, so those are things 16 we can look at too.

17 MS. BROWN: Also too that your process is 18 spelled out someplace. You are not making this stuff up 19 as you go along. That doesn't happen anywhere, right?

20 You would be surprised what we have seen.

21 So we need to make sure we are consistent.

22 It's one thing to say you can't find minority and 23 women owned businesses. Another thing is what is 24 actually out there, and they don't know, they can't 25 participate in, if you have not opened up the process, 104 1 and that is basically what we are saying.

2 The process needs to be opened so if I, as a 3 small business owner, would want to participate and do 4 it, I can do it. I come fully equipped, ready and able. 5 But if you don't make that information 6 available and share that knowledge, I can't do it.

7 MR. DAYRIT: Ignacio Dayrit. City of 8 Emeryville.

9 I think whatever program is to make it open to 10 the good old boy network, I think there are other ways 11 to do it without writing a whole lot of regs, which 12 makes difficult. You're asking each and every 13 recipient to go through a whole lot of hoops to do 14 something that you know the information is the same,

15 basically, for every region or subregion in the state.

16 It's a waste of money for each and every recipient to do 17 it.

18 If there is a system set up in the state or 19 regional level where all of the contractors have access 20 to, it eliminates

21 MS. BROWN: Here, where you have done away 22 with, was it prop 209, and a lot of the systems that you 23 had in place to do this no longer exist or have not been 24 maintained as a result of that legislation passing.

25 Let me make sure I understand the suggestion 105 1 you are making. You are saying EPA should do this for 2 the state, for all of the country, or are you saying 3 each state agency should be a

4 MR. DAYRIT: Maybe it's a two part thing.

5 Perhaps the EPA should have their own list. You don't 6 publish the contractors like the gentleman is 7 suggesting, but the list is open to MBEs and WBEs and 8 DBEs, so that when there is, when an RFP is produced, at 9 least the people in the EPA system have access to it and 10 they can respond to an RFP. 11 If the different agencies, federal and state 12 agencies, want to tap into that, that would be better.

13 MS. BROWN: One of the things we offer through 14 our web site is access to, if you go to our web site, we 15 have a link to ProNet, we have a link to the Phoenix 16 database.

17 I have been asking for a number of years for 18 the states, if they have a process to get the 19 information to us so we can then link to the state so 20 the MBE  is that right  remember, I made that 21 request? No, you don't remember.

22 MS. DOUGHERTY: I can get it for you.

23 MS. BROWN: I do need that. We want something 24 similar. Not necessarily maintaining a database, but 25 if you go into our web site, we have 10 regions across 106 1 the country.

2 Go to Region 9, it will identify all of the 3 states that come up under that region.

4 What I am looking to do is, the vision is to 5 have a link to all of those, at least the major state 6 agencies that are grant recipients and information on at 7 least who the point of contact is and any other 8 information pertinent to that state in terms of where 9 listings are, etc. We can make that easily available.

10 That part I agree. I am not maintaining a 11 list. I am providing resources in terms of where you 12 could possibly go when you are looking, but that's not 13 all inclusive either.

14 One of the things we have to be careful of when 15 you do that is people say, well, I don't have to look at 16 more. People still look for a way out, because new 17 businesses are up and coming all over the place, and 18 they may not know where to go, and they still may be out 19 there.

20 So they could possibly find out about an 21 opportunity by hearing one of the local advertisements.

22 If we only limit or restrict to this database and you 23 don't go anywhere else and you don't publish, how do we 24 capture the universe of the new firms? So that it 25 really works both ways. 107 1 MR. INGRAM: James Ingram, James E. Ingram &

2 Company, Inc.

3 I have a suggestion that I would like for the 4 EPA to consider.

5 One is that the recipient be required to 6 maintain a directory of EPA certified DBEs, WMBEs, or in 7 lieu of a separate directory, that they could use the 8 particular state or local agencies that meet the 9 requirements to be EPA certified, i. e., in California 10 you have a unit, again, referring back to the unified 11 certification process, which is statewide, I believe 12 it's a national program.

13 If I am certified by BART here in the Bay Area,

14 it also means I am certified by the city and county of 15 Los Angeles, or they can use the similar to what they 16 have been, the WMBE clearinghouse, which certifies 17 women/ minority owned businesses.