0001 1 ENVIRONMENTAL PROTECTION AGENCY 2 3 OFFICE OF SMALL AND DISADVANTAGED BUSINESS UTILIZATION 4 THE EPA REGION X TRIBAL HEARING ON ITS PROPOSED DISADVANTAGED 5 BUSINESS ENTERPRISE RULE 6 7 8 PUBLIC HEARING 9 TAKEN ON BEHALF OF THE ENVIRONMENTAL PROTECTION AGENCY 10 COEUR D'ALENE CASINO RESORT HOTEL 11 AT WORLEY, IDAHO 12 OCTOBER 8, 2003, AT 10: 30 A. M. 13 14 15 16 17 18 REPORTED BY: 19 DAVID E. HIX, C. S. R. 20 Notary Public 21 22 23 24 25 0002 1 A P P E A R A N C E S 2 3 4 JEANETTE BROWN 5 KIMBERLY PATRICK 6 MARIE McPEAK 7 MICHAEL ADLER 8 KATHY DAVIDSON 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 0003 1 P R O C E E D I N G S 2 MS. BROWN: Good morning. My name is 3 Jeanette Brown, and I'm the Director of the Office of 4 Small and Disadvantaged Business Utilization for the 5 Environmental Protection Agency, and we're here to talk 6 to you and really bring to you the MBE/ WBE proposed 7 rule changes that are already in the Federal Register. 8 And so what we're doing is using this, as we 9 are all around the country. We've identified 16 10 hearings that we are going to have to make sure that 11 the public is aware, grant constituents, are aware of 12 the proposed changes and allow you enough time to get 13 your comments in so that we can factor in the 14 recommendations that you make. 15 As such, we have a court reporter here who 16 will be taking the proceeds of this meeting, taping 17 them or recording them so that we can go back to make 18 sure that we capture the concerns that you all raise. 19 We may not  probably won't be able to answer all of 20 your questions. What we want to do is to hear from you 21 today in terms of  and hopefully you had a chance to 22 read the rules. If you haven't, we'll go over  and 23 we'll go over some of the major changes that we have 24 identified and talk about the impact that it may have 25 on you as a grant recipient. 0004 1 We have determined in the agency that we 2 don't foresee major changes with a lot of the changes 3 that we've already factored in, given the fact that 4 we've been working on this for about four years. We've 5 had similar meetings up until this point in open forums 6 and sessions, and so we've factored in a lot of the 7 comments that have already come in. And what you see 8 in front of you, or what we will discuss, are those 9 changes that we have so identified. 10 Before I do that, though, I think it's 11 important that I would introduce some of the people 12 just in case you aren't familiar with who we are. 13 Kimberly Patrick here is my staff attorney working on 14 the rule, and she's out of Washington D. C., as well. 15 And so if you have any questions regarding 16 the rule, you can call her directly; although, we are 17 on the road quite a bit between now and January 20th. 18 I think you're having your phone calls to you cell 19 phone? Her number ( 202) 564 5386. 20 We also have with us our new MBE/ WBE 21 coordinator, who is not new to the program and that is 22 Marie McPeak out of Region X. Are you all familiar 23 with Marie? This is a good lady to know. We're very 24 glad to have her back to the program with us working, 25 and she's  like I say, even though she's back, she's 0005 1 been around and she knows the program very well. And 2 so she's also most definitely a good source of contact 3 for you. 4 We have other people from within the region 5 here as well. Grant specialist  6 MS. PATRICK: Michael Adler. 7 MS. BROWN:  Michael Adler, and then we also 8 have with us Kathy Davidson as well. And so with that 9 there are a couple of things that I'd like to start off 10 with as we start discussing and going over the changes 11 that we are proposing to the rule. 12 Before I do that, though, as you have 13 questions I need to ask that you use the mic, tell us 14 your name and where you're from, and speak into the mic 15 os that he can capture it, so that we can take it back 16 and make sure we consider and look at the comments that 17 you all are making to us, okay? Is that all right? 18 Good. 19 Before I go into the rule itself let me give 20 you an update. Like I said, we've been doing this now, 21 Marie, for about four years. We had a draft proposed 22 rule out were we went out initially on what we thought 23 the changes were that needed to be made to the program. 24 If you are a grant recipient from EPA, all of 25 your grants should contain an MBE/ WBE Fair Share 0006 1 Clause. In the past what we have done is negotiated 2 rates or goals to go into those grants for the various 3 recipients. There was a Supreme Court case that came 4 out in 1995  that's how far this goes back  and it 5 came out of the state of Colorado. And it drastically 6 changed how the Federal Government should do business. 7 As a result of that there was a review of all 8 of the Federal grant programs or programs like ours, 9 DOT and EPA, and it was recommended that we make some 10 changes. We've been working with the Department of 11 Justice on those changes. It was recommended that the 12 Department of Transportation go first and then we would 13 follow. 14 DOT has made major changes, and they are now 15 in place for about a year and a half with their 16 program. We are last ones to fall in line. So that's 17 how we got here. We had a draft proposed rule that was 18 up on our website and has been there. We have made 19 drastic changes, and now we've gotten to this where our 20 proposed rule  and this is the official proposed rule 21  was issued in the Federal Register in July of this 22 year. 23 We have 180 days to have hearings around the 24 country to talk about and make sure that the public is 25 aware of the proposed changes and solicit your comments 0007 1 back to us. Please, by all means, read it if you have 2 questions and you're not sure. We've tried to put in 3 the layman's terms as best we can so that you will know 4 exactly how it will affect you as a grant recipient 5 from the EPA funding. 6 Send us your questions and your comments. We 7 need and we want to hear from you so that we can factor 8 that in as this rule becomes final. So with that I 9 think it will be good  anything else you think I need 10 to add, Marie? 11 MS. McPEAK: No. 12 MS. BROWN: Okay. With that I think it would 13 be if  and I'm going to sit down, if you don't mind. 14 Instead of standing I'm going to sit right here and go 15 over what the changes, proposed changes are. Did 16 everybody see a copy of the summary? I'm going to go 17 right down here and go over these. It's the summary of 18 major elements of the proposed EPA DBE rule and 19 preamble. 20 MS. McPEAK: It looks like this one. 21 UNIDENTIFIED SPEAKER: Where do we get it? 22 MS. McPEAK: Right out at the main table. 23 It's in very large print. 24 MS. BROWN: It's in large print. I will tell 25 you that the rule was issued Thursday, July 24, 2003. 0008 1 It is found in Part 3 of the Federal Register under 2 Part 40, CFR Part 30. It's called Environmental 3 Protection Agency and there you will find the proposed 4 rule. 5 MS. McPEAK: We also have copies of the 6 complete rule out there too, and this is what the 7 Federal Register Notice looks like. 8 MS. BROWN: Do we have enough? 9 MS. PATRICK: I think we're out of those at 10 this point in time. Marie has also put out there on 11 the table a sheet that has a cover letter on it, that 12 is on EPA letterhead, and within that package is a copy 13 of the question and answer sheet that we have, which 14 gives you specific instruction on how to send your 15 comments in. 16 They can be sent electronically, by fax, by 17 mail, by carrier pigeon practically. Any way you want 18 to get them there, we will take the comments. And so 19 it gives you some more specifics on where to find the 20 rule electronically and also how to contact us if you 21 need one by mail. If you don't, you know, do the whole 22 electronic thing. We make it available that way as 23 well. 24 MS. BROWN: You can also access the Federal 25 Register document electronically through our website 0009 1 at: www. epa. gov/ fedrgstr, and that will pull up the 2 entire rule electronically there. 3 The summary of the major elements of the 4 proposed rule are follows: The first one we're looking 5 to change the name from MBE/ WBE to DBE. One reason 6 we're trying or looking at doing this is for 7 consistency across to the Federal Government for 8 programs or with programs like this. 9 A DBE is defined as an entity owned and/ or 10 controlled by an individual who was socially and 11 economically disadvantaged under either the EPA's 8 12 percent or 10 percent statute, as well as the Labor 13 Surplus Area Small Business Program under the  out of 14 the SBA. 15 The second requirement or change that we're 16 looking at is certification. Under the proposal there 17 will be three changes to the current certification 18 requirements in order to satisfy the Supreme Court 19 ruling under the Adarand decision as it relates to 20 strict scrutiny. 21 The first one is we will no longer accept 22 self certifications from an MBE/ WBE. If there is a 23 minority business today  right now as the program 24 exists, if you say you're a minority business, we 25 accept that point blank and you don't have to do 0010 1 anything else to show us or document or have any other 2 kinds of certifications. 3 Once this proposal or this rule becomes 4 final, we will no longer  we anticipate we would no 5 longer accept MBE/ WBE self certification. There's a 6 process that we'll have to follow. We recognize 7 MBE/ WBE certification and, again, that's entities owned 8 and controlled by a socially or economically 9 disadvantaged individual under either our 8 percent or 10 10 percent statute by state or local government or 11 tribal governments and private certifiers so long as 12 their programs or criteria matches those that are under 13 Section 8 ( a)( 5) and ( 6) of the Small Business Act from 14 the Small Business Administration's program. 15 And basically what we're saying is this: 16 Because we will no longer accept self certifications, 17 if a state, a local government or tribal government has 18 a certifying program for minority contractors, we will 19 accept it provided it meets the same criteria that we 20 have under Section 8 ( a) and ( 5) and ( 6) of the Small 21 Business Act. 22 We also want to clarify that EPA will accept 23 DOT/ DBE certifications as valid certifications under 24 our program if EPA citizenship requirements are met. 25 That means right now under the DOT program you don't 0011 1 have to be a citizen to get certified under their 2 program. EPA is saying you do have to be a citizen. 3 The second major change is this: We will 4 require that an entity first try to become certified as 5 an MBE or WBE by SBA or DOT. We recommend that they 6 try to gain that certification first. Then if all else 7 fails or they cannot get it for whatever reason, you 8 come to how us and then we will certify. 9 Currently under the program, and until this 10 rule becomes final  let me be clear  this is not in 11 effect now. It doesn't affect your grants now, and we 12 anticipate that this rule probably won't be in effect 13 for another year, year and a half. So this, the 14 requirements that I'm talking about, the changes that 15 I'm talking about, are to come. They're not here now. 16 Yes, sir. Tell me who you are and what your question 17 is. 18 MR. DOWNY: Tom Downy, CTSI. The question 19 is: If we've been doing quarter reports then do we 20 continue to do these quarter reports under this or do 21 we just quit and then take it up when the new program 22 is implemented? 23 MS. PATRICK: Let me  let me sort of 24 respond to that. Perhaps let me ask a very quick 25 question. How many people in here are business 0012 1 owners? 2 UNIDENTIFIED: ( Show of Hands). 3 MS. PATRICK: Okay. If a lot of the 4 certification stuff we can sort of skip over unless you 5 have specific questions about it. We can get to the 6 meat of how it actually affects you as grant 7 recipients. Is that okay with everybody in the room? 8 Because the certification will bore you to tears if 9 you're not a business owner, because it doesn't really 10 have that much of an impact on you, so we can sort of 11  well, we're going to answer your question sir, most 12 definitely. But I just want to make sure that we're  13 we haven't forgotten about your question. I just want 14 to make sure that we're sort of catering to what the 15 audience needs. 16 But to answer his question real quick, about 17 the quarterly reporting, right now reporting is 18 required even for tribal recipients, and that will 19 continue to be the case even once the new rule is in 20 effect. 21 MS. BROWN: Say that again, I couldn't hear 22 you. 23 MS. KRUEGER: He asked you if you were 24 changing the names but not the requirements. 25 MS. BROWN: We're changing some of the 0013 1 requirements. We are proposing to change the name as 2 well. 3 MR. DOWNY: Okay. That's what I'm trying to 4 get at. As a recipient of the Federal grant one of the 5 things we're trying to get across is the fact that 6 we're already doing these things. 7 MS. BROWN: Right. 8 MR. DOWNY: And if you're going to change the 9 name, or you're changing the requirements  I haven't 10 had a chance to read this all the way through. I guess 11 I might as well wait until you get all through. 12 MS. BROWN: Okay. 13 MS. KRUEGER: I'm Katie Krueger with the 14 Quileute Tribe, and for the court reporter that's 15 Q u i l e u t e in Western Washington. I would  this 16 wasn't my question initially but I would like to answer 17 the attorney's question. I would like you to describe 18 what's necessary for business applicants because it 19 looks like tribes are now an entity that has to certify 20 them, and I would like to be able to give correct 21 advice to the contracts and grants officer at our 22 tribe. I hope I'm not in the minority in that regard. 23 MS. McPEAK: No, it won't  it won't take me 24 that long. 25 MS. KRUEGER: And my question was: Can you 0014 1 give me the citation for section 8 ( 5) and ( 6) of the 2 Small Business Act? What USC is that? Also, what CFR 3 for the business development regulations so that I can 4 find them. Thank you. 5 MS. BROWN: We're going to get back to that. 6 She's looking for the citation on her question so that 7 we can get  8 MS. PATRICK: I can answer her question about 9 the certification program that we have. 10 MS. BROWN: Marie. 11 MS. McPEAK: Well, can I address Tom's 12 question real quick? I know that Tom is going to have 13 how leave probably to go to another session, and I'd 14 just like to address his question right now. When the 15 Minority and Women Business requirements where into the 16 regulations, the reporting requirement was not put into 17 the regulations. But the reporting requirement was put 18 on all recipients of Federal grants. 19 Because of the way that tribes were allowed 20 to report we never required reporting in our region for 21 the tribes. That was an oversight probably on our part 22 as a region to not require the reporting. But when it 23 came down that we had to be reporting in a different 24 manner than what we had always been required to report, 25 then we had to reinstitute the reporting requirements 0015 1 for all grantees, and that's when you started seeing 2 the condition in your grants saying that you had to 3 report. 4 And so even though across the country tribes 5 were reporting, in our region we never required them to 6 report. So the requirement is for tribes to report. 7 It will be continued to be for tribes to report on 8 utilization actually achieved. 9 MS. BROWN: Thank you, Marie. One of the 10 things when I talked about there was a review done of 11 the programs overall, one of the things that we saw was 12 inconsistency on how this program in particular, how 13 it's being carried out throughout EPA. So one of the 14 things, with all of the changes that we're looking at, 15 is looking at being consistent throughout EPA on how we 16 manage and oversee the program. 17 Yes, Marie is right. In this region you were 18 not required to report, and that was a decision that 19 was made a long time ago. However, that reporting 20 requirement from the agency perspective was still 21 there. Some of the other regions required their tribes 22 to report. When we saw this inconsistency we tried to 23 change that, and we will because that is a requirement 24 that exists. You will have to report, and that's 25 across to the board. All the tribes will have to 0016 1 report. 2 Now, how we get  and the tribal reporting 3 is not going to go away. It's always been there. We 4 just didn't enforce it, okay. And it's not just on the 5 tribes. It's everybody that is a recipient of the 6 Federal funding: The states, the nonprofits, anybody 7 getting money from us has to report back. So it's not 8 something that we're just singling out one group over 9 another. It's consistent. 10 We haven't been consistent in carrying out 11 the program. So we're tying to do a lot of things with 12 this proposed rule to make the program uniform 13 throughout the agency and then, also, come in 14 compliance with across the board. We've done some 15 administrative changes so that we can be in compliance 16 with the new law of the land, the Adarand decision, but 17 we have to go through this process with the rule, okay. 18 Did we address your question, sir? Go ahead 19 that's what we're here for. 20 MR. DOWNY: I think my questions will be 21 answered once I hear what you have to say. 22 MS. BROWN: Okay. Thank you, sir. Kimberly. 23 MS. PATRICK: So that everyone else is also 24 privileged to the information I just gave her, the 25 citation for the requirements of the Small Business Act 0017 1 can be found at 13 CFR 124.105, also, in Section 2 124.106, 124.103  and why they're listed out of order 3 I don't know  and 124.104. And if you actually have 4 one of the copies of the actual Federal Register Notice 5 that's found on page 43.828. 6 MS. McPEAK: Kimberly. 7 MS. McPEAK: Yes. 8 MS. McPEAK: These are SBA's regulations 9 right? 10 MS. PATRICK: Yes. Those citations are the 11 SBA regulations that she requested. 12 MS. McPEAK: That's the Small Business 13 Administration? 14 MS. BROWN: That's the Small Business 15 Administration, SBA is the Small Business 16 Administration. And they set the rules and the policy 17 and the regulations on how small businesses will 18 operate, how we will operate with them. So we have to 19 follow their regulations because this is not ours. 20 They set that for all of the Federal agencies and then 21 we have to comply. 22 MS. PATRICK: Okay. I've finished up the 23 rest of the little part on the certifications, so we 24 can move onto the meat of what you probably need to 25 know. 0018 1 There are certain classes of potential 2 business that will need to be certified. The EPA will 3 have to certify as a matter of first impression, which 4 means these entities currently cannot go anywhere else 5 to receive certifications, because those programs are 6 not set up yet to certify those entities. Those 7 entities will be women owned businesses because 8 currently SBA does not certify women and neither does 9 DOT. EPA would be the agency they would have to come 10 to as a matter of first impression to get that type of 11 certification. 12 Also disabled American owned businesses, 13 another category that's not currently certified by 14 SBA. EPA has special provisions in our regulations for 15 that category, so we have to take on the responsibility 16 of certifying those entities. 17 Private or voluntary organizations controlled 18 by individuals who are socially and economically 19 disadvantaged: EPA will certify those people as well 20 as entities which are certified under criteria which 21 are inconsistent with EPA's DBE program criteria, which 22 is the distinction that's  we're in, I think in the 8 23 percent statute at EPA. 24 You have to be owned and controlled by a 25 socially disadvantaged individual. But in the 10 0019 1 percent statute it says it has to be owned or control, 2 which is a huge difference, really, because the rest of 3 the Federal Government the standard is owned and 4 controlled. So for the part under the 10 percent 5 statute, people who want to be certified, we have to 6 allow them to be either owned or controlled, that's 7 what that distinction is about there. 8 And finally, in fact, that's the last 9 category of the ones that we specifically have to 10 certify. Let's see, the next part under certification, 11 really quickly, is that the requirements in terms of 12 initial eligibility would be the personal net worth 13 amount which would be $ 750,000 for the individual. 14 Let's see, the main parts that we need to 15 really get to are the issues under  the issues you 16 need to know for  yes, ma'am. 17 MS. KRUEGER: I'm sorry. Katie Krueger with 18 Quileute Tribe again. I'm finding the wording on page 19 2 and 3 very confusing. Can you tell me if Group A E 20 can be certified by tribes and states? Because what 21 you have at the bottom of page 2 is that they wouldn't 22 qualify for certification from SBA or DOT. 23 Under the new rule would these five 24 categories qualify for certification by a state or 25 tribe? 0020 1 MS. BROWN: We will accept under this state 2 or tribal certifications provided they meet the EPA. 3 MS. PATRICK: We will accept the 4 certifications from those entities  if the state or 5 the tribal government certifies women, that's great, 6 then you have that certification and their program 7 meets our requirement, meaning the criteria is the 8 same. We'll gladly accept that certification as well, 9 that's not a problem. 10 We just know that SBA and DOT don't certify 11 the people in these five categories, and so we have to 12 be the ones to certify them because they don't. Now, 13 if the state or tribal government does that 14 certification and it meets our standards, we have no 15 problem accepting that certification. 16 MS. TURNINGROBE: The tribe  the tribe or 17 the tribal government can  18 MS. BROWN: Yes. 19 MS. TURNINGROBE: Does  20 MS. BROWN: Can you say your name and the 21 tribe that you represent and then state your question? 22 MS. TURNINGROBE: Marina Turningrobe from the 23 Spokane Tribe. The tribe has, as the government, has 24 the power to certify, correct? 25 MS. PATRICK: Most definitely. 0021 1 MS. TURNINGROBE: So this will  that is a 2 sufficient certification pending all the  we meet all 3 of the requirements that are stated here. 4 MS. PATRICK: Exactly. 5 MS. TURNINGROBE: So if I or someone in the 6 tribe meets all these qualifications, that individual 7 can go to their tribal government and be certified from 8 them if the tribe does that? 9 MS. PATRICK: Right. If the tribe does that, 10 that's perfectly fine. 11 MS. TURNINGROBE: And the tribe  tribal 12 government in their own right has the ability and the 13 power to do that? 14 MS. PATRICK: If the tribal government has 15 set up a certification program for these entities and 16 that's what they've chosen to do in their government, 17 and those certification requirements match ours, we 18 will accept that certification. All you have to do is 19 come to us and say, hey, I have this, and we will look 20 at that. We will look at what their requirements and 21 their criteria are. If they match, then you'll get EPA 22 certification based on the certification you currently 23 have, okay. 24 MS. BROWN: The key is matching, because we 25 do know some states and local jurisdictions don't use 0022 1 that same criteria that we do at the Federal level. 2 What we have to do is give it to our attorneys, and 3 they look at that to see if the criteria are the same. 4 If they're equal, it's not a problem. And that's 5 regardless of where the certification is coming from. 6 We have to look at what they use to certify, the 7 criteria they use to certify, to make sure that it 8 meets the Federal Government or our standards. 9 MS. TURNINGROBE: Marina Turningrobe, Spokane 10 Tribe. If the tribal government chose to start 11 certification, all that government should do is review, 12 again, the requirements just to make sure their program 13 is set up to match? And who would, for example, 14 someone in a tribal government contact? 15 MS. BROWN: The region here. 16 MS. PATRICK: If the tribal government was 17 interested and they wanted to set up  I think that's 18 your question  they wanted to set up a certification 19 program and they wanted, you know, to know how do we do 20 this? What would the criteria be? My first suggestion 21 would be to set up according to what SBA has, because 22 SBA told us how to set ours up. And that type of 23 information can be gotten quite easily from SBA. They 24 would love to share that I'm sure. 25 And if the SBA is nonresponsive, which I 0023 1 doubt they would be, we can most certainly share with 2 you what our criteria are, and so we can't dictate what 3 a tribal government plans to do, so if they want to 4 make their  it's totally up to them what their 5 requirements are. 6 But it would be prudent to have it match such 7 that they're certified and their independent tribal 8 businesses won't have to go through several different 9 certifications. Because if it's something that's 10 standard and along with the rest of the government and 11 then, of course, that makes it easier for the business 12 owner, but that's a decision that the tribal government 13 has to make on its own. 14 MS. ADLER: Michael Adler. I'm with the 15 EPA. I just wonder if it's true as general grant 16 procedures go, that whatever processes is set up, that 17 it be the standard process? So that in this same way 18 that one has to have personnel, standard personnel 19 practices or standard travel practices, you'd have to 20 have a standard certification practice that you use for 21 all of the people applying. I just wanted to clarify 22 that. 23 MS. BROWN: And that's right. It would have 24 to be across the board and to use this with anybody who 25 wants to be certified. You can't make it up as you go. 0024 1 MS. ADLER: You can't make it up according to 2 each individual as they come up. 3 MS. BROWN: Right. 4 MS. PATRICK: Okay. Here we go, the fun 5 part, the things that are specifically going to apply 6 to grant recipients. We've already discussed the fact 7 that the reporting requirement is not something new. 8 Jeanette just spoke about how it's just something we're 9 going to now actually enforce, so that part is not 10 brand new at all. 11 The part that is probably  will have the 12 most affect on the tribal community is the fact that at 13 this point  not at this point  once this rule goes 14 final, if it goes final as it is, is that we will 15 require tribes to negotiate goals with us for MBE/ WBE 16 participation or DBE as it would be. And that is 17 something that is a brand new requirement. 18 I want to start off by saying we've received 19 a lot of comments on that, particularly  ultimately 20 seeking that we completely exempt tribes all together 21 from having to do negotiations. What we have done, as 22 a result of the comments that we have received, we have 23 two categories of exemptions: 24 First is that for grant amounts that are 25 $ 250,000 and above  and that would be an aggregate 0025 1 amount for a particular year  then that will be 2 entity will be subject to negotiating goals with us. 3 Anything under the $ 250,000 would not have to negotiate 4 goals with us. That's very important, because that 5 eliminates a large number of recipients who would have 6 to negotiate goals. 7 The second exemption that we have is that PPG 8 eligible grants to tribal recipients are exempt from 9 negotiations in this proposed rule. In effect, what 10 that does there are 17 categories of grants which are 11 eligible to be rolled into a PPG. If you are a 12 recipient receiving grants in any of those 17 13 categories, you would be exempt from negotiating goals 14 with us. That is a huge exemption, huge exemption. 15 I think we ran the numbers at one point 16 paticularly for Region X, because this is the region 17 with the largest number of tribal grant recipients. 18 That dwindled down the number of recipients who would 19 have to negotiate to well under 20, and we're talking 20 about under 20 for a region with close to 200 or more 21 tribes  more than that, sorry. 22 And so to go from that large number down to 23 20 is a huge exemption. And so I just wanted to put 24 that out there first. And those two changes and those 25 two levels of exemptions were as a direct result of the 0026 1 comments that we've received along the way from you 2 about the particular provision. 3 Let me point out that exemption is only from 4 negotiating goals. It is not an exemption from 5 reporting. Reporting is here. Reporting will be 6 here. Reporting will never, ever go away. We're 7 always going to need to know exactly what recipients 8 across the board are doing with the money that we give 9 out to them, and I think that's pretty reasonable. I 10 don't think anybody would just give money away and say, 11 okay, do whatever you want with it. 12 And so it's important for us now to know how 13 how the dollars are being spent. But the negotiations 14 part is what those exemptions would apply to. I just 15 wanted to make that really, really clear. 16 Another thing is that tribes will also be 17 expected, just like any other grant recipients, to go 18 forward with the six good faith efforts, which is 19 something any other grant recipients has to do as 20 well. Those six good faith efforts are efforts that we 21 expect our grantees to make, to at least seek out 22 possible DBEs to do contracting with under their 23 grants. 24 And those six efforts are really geared at 25 making sure that the recipients at least look and see 0027 1 what's available in your area to do the jobs that you 2 need to do. How that work is, if under your grant you 3 go out and contract for things in four categories: 4 Construction, equipment, services or supplies, any one 5 of those four categories, if you do any contracting 6 this program would kick. 7 And the expectation is you would go through 8 those six good faith efforts to at least seek out and 9 see if any DBEs are available to do the work that you 10 need done or provide the services you need or to give 11 you the equipment that you require. 12 We are not asking that you completely go out 13 of your way and do things that don't make sense, good 14 business sense to you or your tribe. What we're asking 15 is you look to see what's in your area. For example, 16 if you know you need copy paper and you have a Staples 17 over here and you have a small mom and pop business 18 right next door that's a DBE. 19 If it's reasonable for you to go there, and 20 it's not going to hurt you in terms of costs  let's 21 say it could be cost beneficial for you to go to the 22 small disadvantaged business  we're asking that you 23 seek it out and that you do that. 24 Now, we're not asking you to got to the mom 25 and pop if you're going to pay three times the amount 0028 1 for the paper, that just doesn't make sense. And we're 2 asking you to document as you go along what your 3 processes were. What did you do to seek out these 4 small and disadvantaged businesses? 5 And when you really look at the program as a 6 whole, it's not just helping us. It's also helping 7 your tribal community, because we're hoping a lot of 8 those dollars will get recycled back through your 9 community for the things that you need, and so that 10 you're not going to spend this money with the large 11 businesses who really are not feeding monies back into 12 your community. So that's one of the things that we're 13 hoping really, really will sort of catch fire and grow 14 in a lot of small areas, not just with the tribal 15 communities but with disadvantaged businesses and 16 disadvantaged communities across the country period, 17 and recycling dollars is real. Marie. 18 MS. McPEAK: The one thing I want to point 19 out here is a lot of the tribes do have tribal 20 preference in their procurements. This is to help that 21 also, because the tribal businesses are considered to 22 be minority businesses. And so we do stress that if 23 you do have tribal preference in your procurements, use 24 it. 25 This is  this is food for tribal 0029 1 businesses, because this will promote also them using 2 tribal businesses as they should rather than going to a 3 big firm who is  like a big engineering firm or so 4 forth  if you contract with tribal businesses, you 5 are contracting with minority businesses, so we do 6 encourage that too. 7 MS. KRUEGER: Katie Krueger, Quileute Tribe. 8 I just heard something that kind of gives me pause and 9 that's with major construction. You really want a firm 10 that is going to be solvent because mistakes are made 11 even by the best of contractors by their subcontractors 12 and by them, and they show up sometimes two or three 13 years later. 14 And frankly, it kind of scares me that we 15 would have to go with a company just because of its bid 16 or because of its racial or other minority category 17 origine when we feel more comfortable  I'm making 18 this up okay, because I don't have a case in hand. I 19 just know about contractors. I've been around long 20 enough to know about them. 21 You know, I know that our tribe just recently 22 used a major firm in Seattle to do the construction of 23 their new gym and community center, and this is a firm 24 that is going to be around for a while. And I'm very 25 concerned about what can happen if you use a firm that 0030 1 may, because if its size, not be around for a while to 2 honor problems in construction. 3 How can you  in other words, is that 4 concern in and of itself a justification. And I have a 5 second question, because I wasn't anticipating this 6 question until I heard Marie and it sort of jogged my 7 mind. 8 MS. PATRICK: Can we answer your first 9 question first? 10 MS. KRUEGER: Okay. 11 MS. BROWN: Yeah, because we're getting them 12 mixed. 13 MS. KRUEGER: So to narrow it down my 14 question is: Can we say reputability and reliability 15 of firm is something we consider? 16 MS. BROWN: You can come up with whatever 17 criteria you think you need in order to identify a 18 contractor. We're just hoping it will be fair across 19 the board and that and we will do everything that we 20 can to allow small and minority businesses to 21 participate in the process, that basically is what it 22 is. 23 Whatever business you go to should come well 24 equipped, ready and able to do a job, and also  I 25 mean, if those are things that you have to factor in  0031 1 MS. KRUEGER: That they'll be there tomorrow. 2 MS. BROWN:  and if that's one of your 3 criteria, yeah, they need to be here tomorrow  but in 4 this day and time, we don't know what businesses  I 5 mean, I know what you're saying. 6 MS. KRUEGER: Yeah, you know what I'm saying. 7 MS. BROWN: But the probability is that maybe 8 a small business may go out of business a lot sooner 9 than some of the larger. We don't know. But you need 10 to identify and really adequately address how you came 11 to this conclusion. 12 MS. PATRICK: We're not at all saying  we 13 don't want anyone to make bad business decisions. 14 That's just not smart period for anybody. 15 MS. KRUEGER: We can't afford it. 16 MS. PATRICK: No one can afford to actually 17 to go around throwing money away on businesses that you 18 don't really believe can do the work. But we also have 19 to realize that we're not powerless either. If you 20 can't go with a small firm to do this huge construction 21 job you have, you do have the powers in your own 22 contract provisions, or however you all go about your 23 contracting, to say, hey, big business, we want you to 24 hire some subcontractors. We want you to use some of 25 this money on a small business or disadvantaged 0032 1 business or a tribally owned business for your 2 subcontracting parts. 3 We know you're going to be contracting. 4 You've got to get wood from somewhere or you need your 5 supplies or your nails. Please go to this tribal 6 business to get your nails, that money is reported back 7 to us. That's the type of things you can put in your 8 reporting to us to show that those dollars were spent 9 in that way. 10 And so while you want to make a good business 11 decision, you also want to be thinking about how can I 12 also include a small disadvantaged business? How can I 13 include a tribally owned business? Those are the types 14 of things  15 MS. BROWN: When you're going through your 16 process  I don't know from state to state or tribe to 17 tribe, it could vary  but if you know what is  and 18 you will know what it is that you're contracting out  19 if you know of businesses that are in the area that 20 specialize in certain things that may come up, and as a 21 result of you're going out to a larger firm you can 22 give them that information when you give them the 23 contract, and say, hey, look  24 And we can't direct  the Federal Government 25 can't direct subcontracting. But we can identify firms 0033 1 with certain capabilities that are available and out 2 there, but to a contractor or to you as a grantee and 3 then encourage you to use that list. But I can't tell 4 you who on that list to go to. 5 MS. ADLER: I want to elaborate on that 6 Michael Adler, grant specialist. In fact, grantees  7 all of the conditions and terms and regulations that 8 apply to grantees apply to subcontractors. There's 9 really a flow down, so it not only is a good idea to do 10 that, as Jeanette was saying, but it's actually part of 11 the whole system. 12 MS. McPEAK: Not exactly true. This 13 particular requirement is a flow down requirement, but 14 not all of the conditions that are in your grant flow 15 down to subrecipients or contractors. This particular 16 one does. 17 MS. KRUEGER: Did you mean the six rules of 18 fairness, Marie, or what did you mean? 19 MS. PATRICK: What she means is there are a 20 lot of conditions that come with a grant, a lot of 21 terms and conditions, not all of them flow down but 22 this particular one does. 23 MS. KRUEGER: And this one, which one are you 24 speaking of now? 25 MS. PATRICK: MBE/ WBE requirements. 0034 1 MS. KRUEGER: In general? I thought you 2 meant a specific  3 MS. BROWN: The six required steps flow down. 4 MS. KRUEGER: Okay, the six affirmative 5 steps. 6 MS. BROWN: Which is what they call the good 7 faith, and that's always been there  8 MS. KRUEGER: Now  9 MS. BROWN:  this isn't new. 10 MS. KRUEGER: My other question was because I 11 work for the Natural Resources Department and we do 12 science projects and we get scientific supplies very, 13 very particular to extremely intricate processes that 14 are not developed by us, that we get from other 15 agencies, and if you switch what we do, we wouldn't 16 necessarily be following the agency's protocol. 17 I'm concerned about getting supplies under 18 this and how can I justify using for example the same 19 supplies that NOAH uses so that we get the same 20 scientific results. 21 MS. BROWN: The key to all of this is 22 documentation. If you have a standard that you have to 23 meet and you have to use these supplies and this is the 24 only source, or one of a few and all of them are large, 25 document that in your file to say this is the only 0035 1 source that is available so that we can get the same 2 standard or quality of testing that's needed by the 3 other agencies, that's fine. 4 MS. KRUEGER: Okay. You're making it very 5 black and white because you're saying it must be used. 6 What just happened in our case was that there's 7 probably some competitors out there, but we wanted  8 we're very inexperienced and we wanted to make certain 9 we could exactly duplicate the NOAH results, and so we 10 opted to match exactly what they were using so we 11 couldn't attribute a variance to what we were using. 12 Although there may be some competitors out 13 there, we felt that because we're such novices we had 14 to eliminate what could mess things up. So it wasn't 15 that they said you absolutely must use this, but we 16 didn't want to switch gears and use another brand. 17 MS. PATRICK: I just want to make it really, 18 really clear that this part of the program is not 19 requiring you to or making you go with a small, 20 disadvantaged business. We're asking you to look and 21 see who's available, who can potentially do the work. 22 And if within your particular contract requirements and 23 within you guidelines you look at this firm and they 24 say, okay, wait. They say they can meet these specs. 25 They say they can do this. 0036 1 My thing is you wouldn't know if they were 2 there if you didn't ask or if you didn't go out and 3 look. A lot of times it is very easy to stay with who 4 you're comfortable with, or who the big guy is, a known 5 name. But sometimes, every so often you will find a 6 small, disadvantage business who can do that work. And 7 we're saying  what this program is requiring you to 8 do is to make the look, make the effort to see who is 9 there. 10 Now, if you go out and look and if you say we 11 can't find anybody, or you say these people they do 12 some of the work but they can't meet these requirements 13 that we need to match NOAH, that's fine. All we're 14 saying is, document your process. Write down ans say 15 we looked at these five firms. This firm couldn't do 16 it, this one couldn't do it. The price was too much. 17 This is who we decided on. We just need to now that 18 the you looked. 19 MS. KRUEGER: Ancillary to that, we don't 20 have the resources to have a person dedicated to 21 looking up every business that exists. Does EPA have a 22 list? 23 MS. PATRICK: First of all, we're not asking 24 for every business that exists, just the ones that are 25 in your area. We're not saying across the country. I 0037 1 just want to point that out. We don't want anybody 2 going across the entire United States looking for 3 someone. 4 In your area, your geographic area who's 5 available to do it. 6 MS. KRUEGER: Do you have a list? 7 MS. PATRICK: We do have lists of small, 8 disadvantaged businesses who do particular work in 9 different areas. You can also go to Pronet, which is 10 on the Internet which is an SBA site. I think it's 11 www. pronet. gov. 12 MS. BROWN: Or just got to www. sba. gov. 13 MR. PATRICK: There's a link there to 14 Pronet  15 MS. BROWN: There's a link to Pronet. 16 MS. PATRICK:  which is a data link to 17 businesses. Also, see your handy dandy MBE/ WBE 18 coordinator. Marie knows everything. She can tell you 19 all kinds of stuff. 20 MS. McPEAK: Also the Washington State 21 Department of Small and Disadvantaged Businesses has a 22 directory of businesses in the area that have been 23 certified. The Oregon Department of Environmental 24 Quality, they utilize  there's the Oregon Department 25 of Small and Disadvantaged Businesses. They also 0038 1 publish a directory of certified businesses that can be 2 used. 3 So Washington and Oregon do have resources 4 available for certified businesses, and they do have  5 their directors are both on a website, and they are in 6 hard copy that you can get. So if you need to know 7 like a supplier for maybe paper or something like that 8 you can  you can look at this directory and identify 9 that particular business in the areas that have the 10 supplies that you need, so there are lists in at least 11 to Washington and Oregon. 12 MS. BROWN: Some of the Chambers of Commerce 13 from the various areas also have listings. It varies 14 from state to state, area to area, but there are a 15 number of ways to identify or define minority and woman 16 owned businesses. Some states even have their own 17 certified program. I know that's not out here anymore. 18 MS. McPEAK: Just Washington and Oregon. 19 MS. BROWN: Washington and Oregon does, but 20 other states do that as well so that's a possibility. 21 MS. SIMEON: Monica Simeon, Spokane Tribe. I 22 would just like to add also in your area, especially 23 larger metropolitan areas, there's a lot of minority  24 well, you know, not even large metropolitan areas  25 like in Spokane there's a AAHANA Business Association. 0039 1 There are a lot of minority business associations that 2 are popping up around the country that do have 3 directories. 4 You know, I guess my point is there are  5 it's going to take a little bit of digging but there 6 are plenty of resources out there once you get 7 connected to SBA or your local chamber. They can point 8 you in a lot of right directions. 9 MS. BROWN: Thank you. Now we're going to 10 talk about the contract administration provisions. 11 These are the proposed changes. There's a question. 12 Hold on, and let me get your name. Can you tell me 13 your name, where you're from and then give us your 14 question 15 MS. WARREN: Hi, my name is Pat Warren I'm 16 from the Chilcott Indian Village and it's in Southeast 17 Alaska. And my question is does the small 18 disadvantaged business have to have  like do you have 19 to document certification of that business? Like if 20 you put down yes we went to this or we used this 21 business, do you have to prove by a documentation 22 number that they are a disadvantaged business? 23 MS. BROWN: You came in and I think we had 24 gone over the certification requirements, and this is 25 with the proposed rule. This is not in effect now, but 0040 1 once the rules becomes final and what we have on the 2 table is, businesses  we're requiring or saying that 3 they should be certified hopefully, preferably, by 4 another entity. 5 We are saying, also, that whatever entity 6 they use, their criteria has to match ours. So we 7 would need to know what that criteria was that they 8 were certified by. Right now we self certify. You 9 just check the box, no questions asked. Once this rule 10 goes into effect there's more to it than that. And so 11 we would need to take a look at the criteria that was 12 used by this certifying entity. 13 MS. PATRICK: From a recipient's perspective 14 in order for  I'm talking loud enough. Can you hear 15 me Mr. Taper? From a recipient's perspective when you 16 go out and you do your six good faith efforts and you 17 decide on the firm you want to go with  let's say you 18 decide on a disadvantaged business  once this rule 19 goes into effect that business will have to be 20 certified in order to count, not that you can't use 21 them if they're not certified. If you choose to use 22 them and they're not certified, that's fine. But in 23 terms of reporting back to us the ones that will count 24 will be the ones that are certified. So I need to make 25 that very, very clear in terms of numbers, okay. 0041 1 MS. KRUEGER: Is this going to apply to 2 travel or is our tribe free to pick the airline or bus 3 whatever that gives the best service in terms of our 4 costs. 5 MR. BROWN: Travel for whom? 6 MS. KRUEGER: The recipient of the money. 7 MS. PATRICK: Okay. To the extent that  8 okay. Let me  let's say you want to hire a bus 9 company. 10 MS. KRUEGER: No. No. 11 MS. PATRICK: Are you talking about travel 12 for someone who is doing a service for you? 13 MS. KRUEGER: Yes. No. I'm talking about a 14 grant recipient. I'm a grant recipient, and I have to 15 travel as part of my grant. Does this apply to me as 16 to what services I use to get me from point A to point 17 B? Do I have to use a disadvantaged business airline? 18 Do I have to use a disadvantaged business bus service? 19 I'm not sure what you're requiring. 20 MS. BROWN: You don't have to use anybody. I 21 mean, the rule is, you don't have  look, we're not 22 saying that you can't go buy from anybody else, if 23 you're not minority or a small woman owned. We're not 24 saying that. 25 We are saying that we would hope that you 0042 1 would search to see if they exist, and if they do and 2 you can use them, you use them, so that we can insure 3 that everybody is able to participate in this process 4 that is open to minorities as well nonminorities. 5 MS. PATRICK: When you travel, because travel 6  providing travel or whatever is a service. And you 7 travel under your grant as a direct recipient? 8 Technically, the good faith efforts do apply. However, 9 we would not be surprised if you came back to us and 10 said, okay, I'm trying to go from here to Washington DC 11 I doubt you're going to find a minority or small 12 business is going to take you, you know, by air from 13 here to Washington DC. 14 And like you mentioned before, I'm not sure 15 that  to that extent we're trying not to be 16 outrageous or ridiculous with this. If you look  if 17 you go through the process or whatever. Technically, 18 it does apply. But it's not something that  19 particularly travel of that magnitude  it's just not 20 realistic that you're going to find an MBE/ WBE who's 21 going to do cross country flights. 22 MS. McPEAK: One caveat to that is in Alaska 23 they do use a lot of charter aircraft, and so the 24 charter aircraft in a lot of cases are small minority 25 businesses. And so that is a help when you're looking 0043 1 for minority businesses in Alaska, because a lot of the 2 charter services that you already use are small, 3 minority businesses. And so that would be counted for 4 participation in this program. 5 MS. TURNINGROBE: Marina Turningrobe, Spokane 6 Tribe. Forgive me if I'm not following properly. I 7 know no question is a dumb question. When you use the 8 word " count", it doesn't count, do you have to have so 9 many that do count? Are we counting points? 10 MS. PATRICK: That's  that's something we 11 didn't go in depth into. When we say counting we're 12 referring to reporting, and when you report back how 13 you spent your dollars and how much  how many of 14 those dollars went to MBE, WBEs or in the future DBEs, 15 we need to know. And so when we say the word " count" 16 that's what we're referring to, the reporting part. 17 And also since you guys  if the rule goes 18 through as is, when you negotiate goals  and let me 19 point out, it is a goal. It is an objective. It is 20 not a requirement. It is a goal, so let's say your 21 goal for equipment under a particular grant that you 22 receive is 8 percent, okay, or 10 or 15 percent. 23 So what you're saying is 15 percent of the 24 dollars, or whatever, under that particular grant for 25 services we're going to try to give 15 percent of that 0044 1 money to a small, disadvantaged business. When you go 2 out and you procure the services and say you use a DBE 3 or a particular service, then when you report back, 4 that counts towards your goal, towards you're meeting 5 that percentage of your goal. 6 Please understand it is a goal. It is not a 7 requirement. If you do not meet your goal, we're not 8 going to come after you. And so if you  we want you 9 to try to meet your goal, which is why we have the six 10 good faith efforts or six affirmative steps so that you 11 can go out and seek the businesses. 12 And if you document what you did to find 13 these DBEs, then if you don't meet your goal, we can 14 look at that documentation and say, okay, they tried. 15 This is what the result was of that, so that document 16 also helps you as well as us. 17 MS. BROWN: However, as Kimberly said, we 18 don't come after you. We do look at the goals and your 19 accomplishments towards those goals. If we see over a 20 period of time  if your goal in a category is 8 or 15 21 percent and you consistently come in well under that, 22 we will question what's going on, and we may have to 23 say maybe we need to go back and look at how you came 24 up with your availability analysis in establishing that 25 initial goal. 0045 1 So it's not like we don't look at it at all. 2 We do. We will  and we may have to come back 3 depending on what we see in terms of what you're 4 actually able to accomplish. But with the 5 documentation that you provide to support the decisions 6 that you make on why you could or could not  because 7 they could be there, but they may not  they may not 8 be able to do it. 9 So there are a lot of factors that go into 10 this on why maybe you weren't able to reach your goal. 11 The key in all of this is documenting your file, in 12 terms of what you're doing with the money. 13 MS. ADLER: Michael Adler, EPA. Is it not 14 true that, in fact, the purpose of the executive order 15 behind this is to aid and assist disadvantaged 16 businesses? 17 MS. BROWN: Right. 18 MS. ADLER: And across the nation to all 19 government grantees as a policy matter it's a good 20 social idea that the Federal Government is putting 21 forth. This is not a requirement of your grant in the 22 sense that you're required to file reports, performance 23 reports or a financial status reports? It's not a 24 requirement like that. It's a requirement to consider 25 these issues to do the best you can and Federal  the 0046 1 reason for the reporting is these ladies and plenty of 2 people in Washington and across the nation want to know 3 how we're doing. 4 And the people they can reach are the Federal 5 grantees because they can  we can ask our grantees to 6 do it. But it isn't  nothing will happen to your 7 grant if you end up, no, you didn't meet any of your 8 goals. Is that clear? 9 I don't know what the new step is going to 10 be. In fact, it will be a way to advance the goals and 11 everyone is required to look at it and document what 12 they're doing. But in fact, if you can't do it or it 13 doesn't make good business sense or whatever  14 MS. BROWN: As long as it's documented  the 15 key, again, is documentation. Now, this wasn't one of 16 the regions where we got started. About two years go 17 we had not negotiated the fair share goals, and we were 18  some regions were a lot slower than others. 19 We did take a look at holding procurement 20 dollars under the grant. You got all of your other 21 money but if you had identified procurement dollars  22 which covers those four categories: Equipment, 23 construction, services or supplies  we did take a 24 position in another region that we would hold the 25 procurement dollars until they got on board with the 0047 1 negotiations. 2 So that's a possibility. You have to 3 recognize that we can do that. We didn't  it doesn't 4 take them long to get onboard once we told hold them  5 we would hold back the procurement dollars, and that 6 would be something that we would work out from 7 headquarters with the regions in terms of what we would 8 do. But that is definitely a scenario that could 9 possibly happen. 10 MS. McPEAK: And it did happen. 11 MS. BROWN: It did happen in Region X. 12 MS. PATRICK: We do have some remedies at our 13 disposal that we can use, but we understand that's a 14 huge hammer to pull out, and we don't pull it out 15 willy nilly just because it's something we want to do. 16 It's usually an extreme case or case where we really 17 feel that it's necessary. It's not something we just 18 do all the time, so please understand that. We're not 19 in the business of just cutting people off just because 20 we like to cut folk off, there's a real reason if we 21 take an action that particularly extreme. 22 One thing that is really important as a 23 requirement is reporting. I keep coming back to that. 24 Reporting is a requirement under your grant, just like 25 any other term and condition. If you do not turn in 0048 1 your report, we've got a huge problem with that. 2 Because we really, really find just like any other, any 3  people are very careful. Recipients are careful 4 about making sure other reports are turned in. 5 But somehow when it comes down to turning in 6 that MBE/ WBE report they're like ( indicating). We 7 really, really need those reports back. Because the 8 Federal Government comes looking and says, okay, EPA, 9 how are you handling your programs? We need to be able 10 to justify a lot of things. Those reports come into 11 play in helping with that. 12 And also in terms of making sure that we are 13 meeting guidelines imposed by Adarand, we need to be 14 able to backup the reason, you know, how people are 15 spending this money and who you're going to in terms of 16 a small  in terms of a disadvantaged business. 17 MS. BROWN: Or a socially, economically 18 disadvantaged business. What you need to understand as 19 a grant recipient is, if a contractor decides to 20 challenge a decision that you made, as you decided not 21 to use them or that they were out, you have to defend 22 what you did. We will come and ask: What did you do? 23 Because not only will you be hauled into court, we 24 probably will be too. And we won't know what you did 25 if you don't tell us and we don't have the reports. 0049 1 And while we have not had any major 2 challenges to the program from that perspective, that's 3 basically what happened out of the state of Colorado. 4 It was a state program and that's how we got the 5 Adarand decision. There was a challenge to what they 6 did at the state level that changed the fabric of the 7 country in terms of how we would use Federal monies. 8 And so once you sign up to get money from EPA 9 or any other agency, you need to document how you spend 10 it. You can't sign up for the money, take it and go 11 away. There's some guidelines, some policies, 12 procedures that come and strings that are attached to 13 this money. We can't just turn our backs and go away. 14 So just as you're making those kinds of decisions, they 15 need to be documented. Because should there be a 16 challenge, you have to defend what you did. 17 A lot of cases like this, especially in this 18 area, are now being taken to court. And so we really 19 need  and that's where we were lax in years past. We 20 didn't look at the documentation, and that's not just 21 with the tribes, the states, the grantees. We just 22 kind of  we were lax. We can't afford to do that any 23 more. Nor can you, because these kind of cases are 24 very expensive, and we don't cover that if you get 25 hauled into court. 0050 1 MS. TURNINGROBE: Marina Turningrobe, Spokane 2 Tribe. From the entrepreneur's perspective  let's 3 assume I'm an entrepreneur. Does the entrepreneur know 4 that  let's say I'm a contractor, and I went to the 5 Spokane Tribe to bid on a big project that's taking 6 place, was not  my bid was not accepted. 7 How does the entrepreneur  I'm not talking 8 about the government  me as an entrepeneur know how 9  is there a resource that I can go to, or is there 10 some way that an entrepreneur can say, you know, for 11 some reason I think I should have got that bid? Where 12 do they get guidance from? Would they have to go to 13 SBA or where would they get their information to know, 14 I'm going to challenge this? 15 MS. PATRICK: At the state level you would 16 have to go to whoever your state procurement offices 17 is, whoever handles procurements for that particular 18 state. On the tribal level, for your  you have to go 19 to whomever handles the procurement for the tribe. 20 If they have a system set up whereby someone 21 has bid or a contractor can challenge a particular 22 decision, then it goes through whatever your 23 administrative processes is. 24 Now, in terms of on the Federal level I can 25 explain how it happened in Adarand, it's quite simple. 0051 1 The way the Federal Government used to work, or DOT's 2 program used to work, it was very open, the fact that 3 there were extra considerations given for small, and 4 disadvantages businesses. It was down to a preference 5 type of system just because they were a small 6 disadvantage business, just because of the status. 7 And so the contractor knew on its face the 8 reason why he didn't get the bid. Even thought he was 9 the lower bidder, because that preference was attached 10 for using the small business, that's who the state went 11 with. That's why they sued in the Adarand decision, 12 because it was open knowledge that the only reason why 13 this happened was because this person was 14 disadvantaged. 15 Mr. Adarand said that's not fair to me 16 because I submitted the low bid. So why is it that 17 only because of this person's disadvantage status that 18 they got the bid. So that's how that came about. In 19 other areas as a contractor, any time you smell 20 something that isn't quite right in a contracting 21 practice, there is some type of administrative 22 procedure somewhere, whether it's at the tribal level, 23 state level or Federal level where you can elevate the 24 challenge, what happened with the contract. And those 25 processes are different on each level, so I really 0052 1 can't say exactly where you need to go to. It depends 2 on the type of contract it was and who you were working 3 with. 4 MS. BROWN: The other thing that I'll add 5 though is if you as a contractor felt like something 6 was wrong and you knew and you went to that entity and 7 they didn't tell you, if you knew that they  part of 8 that money came from a Federal agency, people have come 9 to us and complained and then we have to take a look at 10 it. It doesn't necessarily relieve you as that 11 grantee, that entity, because we could come back and 12 say what did you do. 13 MS. McPEAK: The one thing that you need to 14 know is that in every bid contract, whether the bid 15 documents that go out  the entity that is putting out 16 those bids have to have a bid protest procedure that is 17 within those documents. You have to go through the bid 18 protest procedures that are outlined there. Usually it 19 will go to whoever had the bids out. They will give a 20 ruling. 21 If they do not successfully identify or 22 you're not happy with that decision, then you can 23 elevate the protest to like the entity that gives them 24 the money to do this work. But you can't automatically 25 protest to the higher agency at first. You do have to 0053 1 follow the bid procedures that, for bid protests that 2 are in the bid documents, and every bid document has to 3 contain those bid protests procedures. 4 MS. TURNINGROBE: With all of these goals put 5 in place you just want to make sure that the 6 entrepeneur is getting  I mean so amny actions are 7 being put into place you want to make sure that the 8 small business owner is benefiting also and not just  9 also knowing that they do  and again, looking at it 10 as an entrepeneur, knowing that they do have a chance 11 at those bids and knowing if they don't receive those 12 bids they do have recourse, it's not just  it's the 13 tribal government and I can't do anything about it. 14 MS. PATRICK: There's always a recourse. 15 MS. BROWN: Okay. So we'll go back to the 16 contract, back to the contract administration 17 provisions. That a recipient must be notified in 18 writing by its prime contractor prior to any  and 19 this is key. This is new  prior to any termination 20 of a DBE subcontractor. 21 If you go out and you get a contractor to do 22 the work and he has a DBE doing some of the work as a 23 subcontractor. He decides he doesn't want to use him 24 anymore, he has to give them written notification that 25 he's terminating that contract. 0054 1 MS. PATRICK: The recipient? 2 MS. BROWN: The recipient has to give  the 3 contractor has to give you, as the recipient, 4 notification. 5 MS. PATRICK: And that provision exists 6 because we have problems a lot of times with prime 7 contractors saying oh, yeah, we have this list of DBEs 8 we're going to use to do a lot of subcontracting. Once 9 the get the award, they don't use any of them. They 10 terminate all of them and continue to go with larger 11 business and where they wanted to begin with. So we're 12 trying to prevent the bait and switch that sometimes 13 occurs after the contract is actually awarded. 14 So what we're requiring if that prime, after 15 the contract is awarded, terminates a DBE they have to 16 notify the recipient. And what that does that puts you 17 on notice to perhaps ask: Why are you terminating 18 these people? What has happened? And so it sort of 19 puts you on alert to sort of look and say this is a 20 bait and switch type of situation or this is a 21 legitimate type of termination, because those also 22 occur too. That's why that's in the rule. That's a 23 new provision. 24 No. 2 under contract administration provision 25 says when a DBE subcontractor fails to complete its 0055 1 work under the subcontract for any reason, the 2 recipient must require the prime contractor to make 3 good faith efforts in hiring another subcontractor. 4 What that's saying is, if you've gone out and 5 gotten company X, who is your prime, and that prime has 6 identified subcontractors they're going to use as a 7 DBE. Now let's say the DBE subcontractor for some 8 reason fails. They can't get the job done, and the 9 prime is like, okay, well, I have to go back out and 10 find another sub. 11 We're saying when that prime goes back out to 12 find another subcontractor, that that prime contractor 13 go back through the back six affirmative steps yet 14 again to see if there's another DBE that can do the 15 job. So it's just sort of a reawakening of the six 16 affirmative steps yet again if they have to go out and 17 hire another sub. 18 MS. BROWN: The next one is that a recipient 19 must require its prime contractor to make good faith 20 efforts even if the fair share objectives are met. 21 What we see a lot of times is once they've made the  22 met the objectives, they stop the six good faith 23 efforts. 24 And we're saying it's just a continuum. You 25 don't stop. You just keep going. 0056 1 MS. PATRICK: And let me  let me clarify 2 that when we say fair share objectives it's the same 3 thing as fair share goals. We use the term " goal" and 4 " objective" interchangeably. So I want to make that 5 really, really clear. 6 MS. TURNINGROBE: And so they've made their 7 15 percent  8 MS. PATRICK: Right. A lot of people they'll 9 say we're done, right. 10 MS. TURNINGROBE: We are back  11 MS. PATRICK:  to what we were doing before 12 because we've made our 15 percent, Exactly. So we want 13 to make sure that even though you've met your 15 14 percent or 10 percent or whatever it ends up being, 15 whatever your goals are, that you don't stop there and 16 that you continue to do the six good faith efforts. 17 I mean, great, it's always great to exceed a 18 goal. It's always great to do better than you thought 19 you were going to do. And so that's what that 20 provision is about. 21 MS. TURNINGROBE: Can I ask another question? 22 MS. PATRICK: Sure. 23 MS. TURNINGROBE: Assume that I'm in a 24 position in my tribal government  construction, I'm 25 kind of following construction, and I'm working with 0057 1 the prime contractor. And he's  we have negotiated 2 goals and it's at, I don't know, we set it low at 15 3 percent or 5 percent. How  as a tribal government 4 you would think that the tribal government official 5 would want to foster this program and make sure that 6 there maybe are some tribal enterprises that can supply 7 and benefit. 8 So how does a tribal government official  9 how can we  wanting to do its best for the people, 10 tribal members that can supply, without setting it too 11 high. I mean, could I  could I say, okay, we're 12 going to try and meet it at 60 percent, that maybe a 13 high percentage. Even though we don't come in as a 14 tribal official, I want to set it high. The prime 15 won't go, we met it at 5 percent and that's it, and 16 won't go back to our buddies? 17 Looking at it in the perspective of a tribal 18 official, what would be the best way to negotiate goals 19 to make sure that I'm being able to have some tribal 20 entrepreneurs that can meet this, not just set it at a 21 low amount and have the prime go with somebody else 22 after? 23 MS. BROWN: When we talk about negotiating 24 goals that will be between EPA and the tribal 25 government, and we look at what the availability is and 0058 1 we do something  if you don't have a disparity study 2  some of the states and local jurisdictions have a 3 disparity study that take into account the buying 4 practices in a geographic area. 5 Absence of that, if you don't have one, you 6 look at an availability analysis to see what the market 7 area will bear in terms of what we're already doing, 8 and so those are the kinds of things that we take into 9 account and under consideration when we come up with 10 the goal. 11 While we know and recognize we would like for 12 it to be a lot higher, you've got to be careful in 13 setting an unrealistic goal, because if there's a 14 challenge to it that's what's dragged into the court. 15 So we wanted to be as realistic as possible based on 16 what the current marked is, what  where you go. Are 17 those businesses there? Is that what you would 18 normally do in terms of your general practices is going 19 to these businesses anyway? 20 MS. PATRICK: Now a little bit more along 21 thes lines is that understood as part of what you're 22 saying? Yes, the goals that we're talking about is 23 between EPA and the direct recipient. Now, if on the 24 other side of that the tribal government has said, 25 okay, we have this goal with EPA. Let's say the goal 0059 1 is at 40 percent. If the tribal wants to say to its 2 prime contractor  3 MS. TURNINGROBE: Keep them in check to make 4 sure my tribal members are  5 MS. PATRICK: From that internal perspective 6 what you choose to do and the requirements you impose 7 on the prime contractor are between you and that prime 8 contractor. And so as a tribal government if you want 9 to say our goal with EPA is 40 percent and it's based 10 on its availability analysis, that's great, that's 11 between EPA and you. 12 Now, on the other side of that veil if your 13 tribal government wants to say, look, our practice is, 14 within this tribal government that we're going for 60 15 percent in terms of what we do with our prime 16 contractors, you're well within your rights to do 17 that. That doesn't affect your EPA goal with what 18 we're doing. 19 Now, if on the other side of that you want to 20 be proactive about making sure we are using tribally 21 owned businesses or really maximizing tribal 22 preference, if you have those types of rules set up in 23 your contracting thing, that is totally up to the 24 tribal government on how they want to handle that. 25 If you want to impose perhaps incentives for 0060 1 your primes to use tribally owned businesses as 2 subcontractors, you can do that, that is your internal 3 contracting requirement, which you can do. 4 EPA has this effect on that. We can't tell 5 you how to handle your contracting or procurement 6 process, that's not our purview. In terms of what you 7 do internally if you guys want to set these standards 8 to really make this thing work and maximize the 9 benefits for your tribally owned businesses, we love to 10 see you do and we encourage it. 11 MS. TURNINGROBE: So again, between the 12 government and EPA you can say realistically let's  13 we're going to shoot for 40. 14 MS. BROWN: It's based on the availability 15 analysis that you do. Okay. The caution I would give 16 you, and we encourage that, is that to make sure as the 17 tribal government and you do that, that is standard 18 across the board and you have it written down and 19 identified and that's the practice that you use for 20 everything that you do. 21 You need to be consistent with it. It needs 22 to be standardized. I would think because somebody 23 could possibly come back and try to challenge it, and 24 you could have to try to defend it. But you can come 25 up with whatever you want on the internal side. But 0061 1 from an EPA perspective what we will be looking at is 2 what we negotiated with you and what came out as a 3 result of that availability analysis that was done. 4 MS. TURNINGROBE: Okay. Then I can just turn 5 around, being the recipients, I can tell my prime we're 6 going to  7 MS. BROWN: If EPA says 40, I would do 60. 8 MS. PATRICK: Do you have a question? 9 MS. KRUEGER: Katie Krueger, Quileute Tribe. 10 Okay. I'm kind of concerned about our single, one 11 person contracting grants office and what they're going 12 to have to add to their workload. And I'm asking these 13 questions on behalf of that. 14 Okay. We're already using some small 15 businesses now and some contractors now, but I doubt 16 that they are necessarily certified under the EPA 17 process. Should we be telling all those people to be 18 contacting EPA now because this rule is imminent? And 19 as a compound to that question, what is the situation 20 if we're using a person, right, whose is either 21 self certified or not yet like certified, even if 22 they're like a single woman contractor? 23 I mean, there's a one woman contractor person 24 that we're using under our GAP grant, but then the law 25 becomes effective and this person hasn't become 0062 1 certified under EPA yet. Do you have to  what do we 2 tell that person if we're in midflight, so to speak, in 3 a contract and the law changes and they have to get EPA 4 certification? That's the second  5 The first part was do we have to run out and 6 tell all of our contractors that they better go through 7 you ASAP because this law is coming or what do we do? 8 MS. BROWN: Right now, as it currently exists 9 with the program, we don't certify. We still take 10 self certification. You're talking probably  and one 11 of the things that we haven't gotten to is  we 12 recognize that this is new for the tribes, so we're 13 looking at phasing this rule and the changes in over a 14 three year period after it comes into effect. 15 MS. PATRICK: And that's only for tribal 16 members. 17 MS. BROWN: That's only for tribal 18 recipients. We're not doing that with any other grant 19 recipient: The states, nonprofits, local government. 20 As soon as the rule is in effect all of this will kick 21 in. For the tribes we're looking at a three year phase 22 in period. 23 Given the scenario that you gave, and it's 24 like midstream and she's already working, you can still 25 use her. It won't count towards your goal possibly, 0063 1 but you can still use her. In the mean time, if you 2 know that you have somebody and they are not certified 3  again, what we recommended is they try to get 4 certified first by SBA, DOT or even by you as the 5 tribal entity. If you have that set up. Provided that 6 you meet the statute that we  are the criteria that 7 we've identified, we'll accept it. If not, then they 8 come to us and we will certify. 9 MS. PATRICK: Before you go on let me explain 10 that. Let's say this rule goes into effect tomorrow, 11 okay, and you're currently using someone. We're not  12 that's fine. You need to stay with that person because 13 we're not  we're not  we're not going back in time 14 and saying, okay, we want you to undo all you just did 15 or nothing you just did counts. That's unfair, and we 16 recognize that. There's no way we could ever say that. 17 Let's say you're currently using this person 18 and this person can easily self certify. She doesn't 19 have to go through any process. All she has to do is 20 say this is what I am. This is what I say I am. We 21 accept that right now. 22 So if you're currently using someone and 23 she's saying that she's not certified by SBA or by the 24 state. All she has to do is say, look, I'm a woman 25 owned business, and right now we'll take it. 0064 1 MS. BROWN: And right now nobody certifies 2 women. SBA  3 MS. PATRICK: Right. But she can say she's 4 small and we'd have to  or she could say that she's 5 disadvantaged and we would have to take that because we 6 have no certification program current right now. 7 MS. BROWN: Nobody can come to us right now 8 to get certified. 9 MS. KRUEGER: So there's no advanced process 10 they can do? 11 MS. BROWN: No. 12 MS. KRUEGER: How lengthy is the process? 13 MS. BROWN: Right now SBA'S process takes a 14 while, but they're working on streamlining that. 15 MS. KRUEGER: What's a while? 16 MS. BROWN: A while is anywhere from six to 17 nine months. 18 MS. PATRICK: Three, six, nine months. 19 MS. BROWN: That's with SBA. You can 20 probably get it a lot quicker with from DOT. 21 MS. PATRICK: And probably quicker than that 22 from the state for from a local entity, from your 23 tribal government if they have something set up. Also 24 for our particular program we are hoping  and I can 25 only say hope  we are hopping that our process will 0065 1 not be as cumbersome or as lengthy as SBA's. We're 2 doing all that we can to make it a quicker type of 3 process. 4 But please understand we've never been in the 5 certification business before. This thing is just as 6 new to us as it is to you. We don't know how long 7 things are going to take until we get going and start 8 doing this type of thing. 9 One of the reasons why we are asking people 10 to get  to go and get SBA certified or DOT certified 11 or state or local, or whatever, is because they have 12 their processes set up, and it's already running and 13 it's going, and so it's a lot easier if you already 14 have that certification to come to us. 15 As a business owner an SBA certification is 16 going to carry you a lot farther than an EPA 17 certification would. SBA is known across the country. 18 That's their  they're in the certification business, 19 that's who they are, that's what they do. So currently 20 while we would accept an SBA certification, guess 21 what? SBA is not going to accept an EPA one. We don't 22 have that kind of reciprocity. So it makes sense from 23 a businesses owners perspective to get an SBA 24 certification or to get a DOT or a state type of 25 certification because EPA certification currently is 0066 1 only good at EPA. And even SBA and DOT have a 2 memorandum of understanding whereby they accept each 3 other's certifications, so SBA would accept the DOT 4 certification. 5 MS. KRUEGER: The state  6 MS. PATRICK: Federal  SBA will accept the 7 DOT certification but not the state. 8 MS. KRUEGER: And you folks will accept SBA 9 and DOT? 10 MS. PATRICK: Provided they meet our 11 standards. 12 MS. BROWN: Provided you're a citizen. Right 13 now DOT accepts noncitizen, and we're saying you must 14 be a citizen of the United States, which is also what 15 SBA says. 16 MS. PATRICK: Exactly, but SBA has worked out 17 something with EPA whereby they have reciprocity. 18 MS. TURNINGROBE: Will EPA accept state? 19 MS. PATRICK: EPA will accept state, local, 20 tribal, SBA  DOT, tribal SBA, DOT. We want you to go 21 get it done somewhere else is what we're saying. 22 MS. BROWN: When you come  when you come to 23 us, we're your last resort. You couldn't get it any 24 place else and so we would have to do it. We don't 25 want to be in the certification business. Like she 0067 1 said, this is new for us. 2 MS. PATRICK: Adarand is forcing  3 MS. BROWN: The law of the land now says if 4 you're going to do this, you have to do it and put a 5 process in place for those entities that may not have 6 it from these other sources. 7 MS. KRUEGER: Are you familiar with how much 8 this costs? Because if I go to these really small 9 contractors that are doing services for us that, right, 10 are probably not registered or certified under any 11 program and I say, we really want you to get this 12 certification, so it benefits our tribe's bookkeeping 13 with an agencies, what can I tell this person it's 14 going to cost? 15 MS. BROWN: It's really free. There are a 16 lot of companies out here that will tell you if you pay 17 me a couple of thousand dollars, sometimes $ 20,000, I 18 can get you certified. I don't suggest you do that. 19 I've worked at SBA. It may be lengthy, but you can do 20 it as the individual owner. 21 The forms are on line and everything is 22 automated. It's online, and that contractor who is 23 trying to get some business has to go through the same 24  his power  his application  your application, 25 that goes to the same pile that it would with me doing 0068 1 it myself. 2 So it doesn't gain anything, and I would 3 guess that if you have a contractor who has at least 4 put the paperwork in, waiting on it to come back, and 5 you tell us that, we can work with them. We have on 6 the direct procurement side made calls to SBA to see if 7 they could speed up the process from one government 8 agency to the other. 9 But I would not recommended that they pay 10 somebody to do it, and that's with any of them, GSA, 11 that's money waisted, that's my opinion. I know it's 12 my time. Do you want to go on or can we take a break 13 and then come back? It's lunchtime. 14 ( A recess was taken.) 15 MS. BROWN: Again, we're asking that if you 16 have questions that you state your name and who you 17 represent or what tribe you're from, and then your 18 question so that he can get it. 19 We talked about  we were still under the 20 contract administration provisions. A recipient must 21 require its prime contractor to pay his subcontractor 22 for satisfactory performance within a specific number 23 pf days from the prime contractor's receipt of payment 24 from the recipient. 25 This is to ensure that the small businesses 0069 1 or the minority businesses are getting paid for the 2 work they do. We've seen some instances where they may 3 do work and not get paid for it or it takes a long 4 time, so we're trying to eliminate or alleviate as much 5 as possible that practice so they can get paid in the 6 timely manner. 7 The recipient must require the completion of 8 a few new forms to prevent the bait and switch  which 9 is what we talked about earlier  at the subcontract 10 level by the prime contractor which could circumvent 11 the spirit of the DBE program. That's so that we know 12 and you all will know as you identify your prime 13 contractors. Again, if they have a subcontractor, that 14 they notify you if they're going to terminate, that 15 they go back out and try to find another minority 16 business, et cetera, to fill in that slot. 17 The forms would be completed either by the 18 prime contractors or the DBEs depending on the 19 application form, and those forms are being created so 20 that we'll have those when the rule is final. 21 Submission of the fair share goals: The rule 22 will require recipients to submit its proposed fair 23 share objectives and supporting documentation to the 24 agency no longer than 90 days after the acceptance of 25 the assistance award and this is new. 0070 1 Instead of relying on a grant condition to 2 accomplish a similar result, the recipient would not be 3 able to spend any of the financial assistance award for 4 procurement  those procurement dollars  until the 5 fair share objective negotiation process has been 6 completed. 7 So if  8 MS. TURNINGROBE: Fair share? 9 MS. BROWN: Fair share negotiations. 10 MS. TURNINGROBE: For procurement? 11 MS. BROWN: Okay. Remember we talked about 12 spending the money if you buy anything in those four 13 categories: Equipment, construction, services or 14 supplies? And remember we talked about the exemption 15 that we would have for negotiations? Okay. This is 16 saying if you don't fall into that category with the 17 exemptions, you have 90 days after you accept the 18 assistance award to have your fair share negotiations 19 completed, that's where the goals come from, and we use 20 that to plug into your grant. 21 Costs for preparing an availability anaylysis 22 or disparity study may be grant eligible possibly, 23 depending on the specific fact and situation. We have 24 to do this on a case by case basis. 25 We don't intend to pay for disparity studies, 0071 1 because disparity studies cost millions of dollars, and 2 availability analysis, however, could be tremendously 3 much less, in terms of dollars, and it varies. And so 4 we're looking at most likely working with you all to to 5 get your availability analysis, and that's doing an 6 analysis with what the current mark conditions are in 7 terms of where you go to procure, how far you go, where 8 you contractors come in from to do the work on the 9 reservation or whatever you might need to see what's 10 there in your vicinity and then do an analysis of who 11 is available: Women, minorities, et cetera. 12 Right now the fair share negotiations have 13 been in place on a three year period. They're good for 14 three years. What we've done, based on new data  in 15 particular when the new census as was done  we asked 16 each of the MBE/ WBE coordinators to go back to their 17 grant recipients to see if they felt like there was a 18 change in the data that they used for their initial 19 analysis that would warrant a change in the goals, and 20 that's an assessment that they have to do that you all 21 would have to do. But we ask  we're looking at 22 probably staying with that, but for right now I know 23 it's been  the goals have been good for three years, 24 and they would go back out to see if there's been a 25 change, and if we need to renegotiate. In some 0072 1 instances we have, and others we have not. 2 MS. McPEAK: Three years? 3 MS. BROWN: The goals are usually in place 4 for three years. The other part is determining fair 5 share goals, and that's a calculation and can be quite 6 lengthy on how you do that. Do we want  7 MS. PATRICK: The basic of this is, the goals 8 as we talked about before the break  the goals are 9 based on the availability analysis or the disparity 10 study. The tribes have a number of options in terms of 11 how to get those things done. 12 If the tribe so chooses, they can adopt the 13 fair share goals of the state, or they can adopt the 14 fair share goals that have already been negotiated if a 15 locality or municipality has negotiated goals with us 16 and they're in the same geographic area. They can 17 adopt those goals if they so choose they can negotiate. 18 ( Discussion held off the record.) 19 They can negotiate goals on their own and do 20 their own availability analysis or disparity study 21 which ever they choose to do. I will say disparity 22 studies are a lot more in depth and can be a lot more 23 costly. A lot of entities will go to colleges and 24 universities and that type of thing to get them done. 25 It is a less expensive way. 0073 1 But those are the options that the tribes 2 have in terms of getting the information for the 3 availability analysis or disparity study done or 4 adoption of goals from the state or from another 5 municipality or locality. 6 MS. BROWN: Let me just say, you don't have 7 to take the state goal. We're telling the tribes to do 8 that but one way that you could possibly do it, that's 9 an option for you. 10 MS. PATRICK: A lot of times the states have 11 already done these studies for the entire state, so you 12 can look at what the numbers are for your particular 13 area. Instead of going back and reinventing the wheel 14 you can say, this is the area we're in. Based on this 15 state's study this is what our goals should be or this 16 is how we want to start the negotiations based on 17 that. That's pretty much how it's done. Marie. 18 MS. McPEAK: I had heard a rumor that maybe 19 EPA was going to do availability analyses for different 20 parts of the country that then the tribes could use 21 those availability analyses to determine their goals 22 rather than to use the goals that the state has 23 negotiated. 24 MS. BROWN: When we were looking at the large 25 number of tribes before we did the exemptions that way, 0074 1 that was something that was being considered. I'm just 2 not sure that's  if we will do that now. We thought 3 that by doing or giving the exemptions the way that we 4 have, eliminating a large percentage of them, that it 5 would be that much  6 MS. PATRICK: We had thought about doing that 7 before we added in the exemption for PPG eligible 8 grants. Once that exemption came into play, it's about 9 17 categories of grants, it wasn't as necessary as we 10 thought it was. The numbers of people that would have 11 to negotiate would be so much smaller, that we didn't 12 think it would be cost effective for us as to a 13 national availability study when only about 20 or so 14 need it. 15 And so after we did that  I mean, it's not 16 something that's taken completely off the table. If we 17 look at it and the need arises, it's something we can 18 revisit perhaps. But at this point that's not 19 something we think is really feasible. 20 MS. BROWN: And if you think that's something 21 you think that you might need, that may be a good thing 22 to address when you comment back on the rule. One of 23 the other things that we also were looking at is the 24 race and gender conscious efforts, to the extent that 25 the good faith efforts proved to be inadequate to 0075 1 achieve the fair share goals, we encourage a recipient 2 of prime contractor to take a reasonable race and 3 gender conscious action to the extent necessary to more 4 closely achieve the fair share goals including things 5 like price incentives and/ or technical evaluation 6 credits. If a grant recipient decides to do that, they 7 would need to notify us first before they do it. 8 We talked about the exemptions. The next 9 thing is the exemptions on the list. We are proposing 10 to exempt recipients from financial assistance 11 agreements in the amount $ 250,000 or less for any 12 single assistant agreement or for more than one 13 financial assistance agreement with a combined total of 14 $ 250,000 or less in any one fiscal year from the fair 15 share negotiation requirement. That's only an 16 exemption from the negotiations. It doesn't exempt you 17 from the good faith efforts. It doesn't exempt you 18 from reporting, that's still a requirement and that 19 will be there. 20 MS. PATRICK: That same $ 250,000 exemption is 21 also going to apply to revolving loan fund programs, 22 Brown Field Program, and what's the other one? 23 MS. McPEAK: I just wanted to find out to get 24 some clarity on what this actually means for us in 25 terms of $ 250,000. We are trying, within our region, 0076 1 because of our resources being so short, we are now 2 funding like multiple years of one grant. 3 For instance, we'll fund a GAP grant for two 4 years rather than to fund it for one year. The money 5 is to be used in two separate fiscal years, but we're 6 giving them a combined total that may be over 250 in 7 the one year, but it's not to be used all in one year. 8 It's for use over a two year period of time. Is that 9 being taken in consideration? 10 MS. PATRICK: Honestly, we had not taken that 11 into consideration at the time. 12 MS. BROWN: That is new. 13 MS. PATRICK: That is something that 14 definitely needs to be  from our perspective, in 15 terms of drafting the rule at the time, we didn't take 16 that into consideration. So that's something that 17 definitely needs to be commented on. I had no idea 18 that you guys were funding it that way. 19 MS. McPEAK: We're trying to do that more and 20 more because of our lack of  21 MS. BROWN: Have you been doing that 22 already? 23 MS. McPEAK: We have started doing it, but 24 it's only within the last few years that we've been 25 doing it, last couple of years that we've been doing 0077 1 that. And so we're even  we're doing like our 106 2 grants and our GAP grants, 319 grants with 3 multiple year funding. It's not all to be used in one 4 year but it's to be used in several years, and so. 5 MS. PATRICK: Aren't GAP grants PPG 6 eligible? 7 MS. McPEAK: Yes. 8 MS. PATRICK: Well, then they would be exempt 9 anyway. 10 MS. McPEAK: Not from reporting, or not 11 from  12 MS. PATRICK: No one is ever exempt from 13 reporting. 14 MS. McPEAK: No. 15 MS. BROWN: This is only on fair share 16 negotiations, that's all. 17 MS. McPEAK: Well, see, we're even doing that 18 like in the AIR 103 program which is not PPG eligible, 19 so that, you know, it would, if you had a group of our 20 grants. 21 MS. BROWN: We need  that's another 22 question you need to raise. 23 MS. McPEAK: Uh uh. 24 MS. PATRICK: Okay. Moving on. 25 MR. ANDREWS: Just a clarification. 0078 1 MS. BROWN: Can you tell us your name? 2 MR. ANDREWS: Scott Andrews, Swinombis 3 Tribe. I just wanted to try to get a clarification on 4 the exemptions to make sure I have it right. Any 5 single agreement or grant for $ 250,000 or less  6 MS. BROWN: Or less. 7 MR. ANDREWS: Is exempt from the fair share 8 negotiations as well as any PPG eligible programs. 9 Now, does that mean any programs that falls under I 10 think it's 13 programs that  11 MS. BROWN: 17. 12 MR. ANDREWS: 17 that are eligible regardless 13 of whether you have combined them into a PPG? 14 MS. PATRICK: The way that it's written right 15 now PPG eligible grants that are exempt  so even if 16 it's not rolled into a PPG, it's eligible to be rolled 17 into a PPG its exempt. 18 MR. ANDREWS: Okay. And there's a three year 19 phase in for tribes? 20 MS. PATRICK: Because on many of these 21 things, especially the negotiations, are brand new for 22 the tribes. 23 MS. BROWN: For the tribes. 24 MS. PATRICK: Only for the tribes is there a 25 three year phase in period. For states and nonprofits, 0079 1 we expect them to hit the ground running. For the 2 tribes, we're giving a three year phase in period. We 3 know there's a lot of education you need to go out and 4 do to make sure people understand what the expectations 5 are before we get there. 6 MR. ANDREWS: And the clock starts ticking on 7 that three year period when the rule is final; is that 8 correct? 9 MS. PATRICK: When the rule is final. 10 MR. ANDREWS: Thanks. 11 MS. PATRICK: We're down to record keeping 12 and reporting, which we've talked about. 13 MS. BROWN: The other things on record 14 keeping, a recipient of a continuing environmental 15 program grant or other annual grant would be required 16 to create and maintain a bidder's list. Such list must 17 only be kept until the grant project period has 18 expired, and the grant recipient is no longer receiving 19 funding under a grant. 20 In addition, a recipient of an EPA financial 21 assistance agreement S. R. F. Brown Field, the resolving 22 loan programs, must require entities receiving loans to 23 create and maintain a bidders' mailing list if the loan 24 recipient is subject to or chooses to follow the 25 competitive bidding practices or requirements. 0080 1 The purpose of a bidders' list is to provide 2 the recipient, the entities receiving identified loans 3 who conduct competitive bidding, as accurate a use for 4 the data base where possible, so that we can identify 5 the universe of MBE/ WBE out there for prime contracting 6 and subcontracting opportunities. 7 Such a list must only be kept until the 8 project period for the identified loan has ended. So 9 as long as the loan is ongoing they need the list. 10 Recipients are required to comply with these record 11 keeping requirements even if they are exempt from 12 applying the fair share objective requirements. 13 Waivers, we will be granting waivers on a 14 case by case basis from Part 33, and they need to come 15 into my office for consideration. 16 MS. PATRICK: We cannot grant waivers for 17 anything that's statutorily required, so please 18 understand that. So where we have the leeway to grant 19 a waiver we can, under a case by case basis, consider 20 that and grant the waiver. But if it's something the 21 statute or executive order requires, we don't have the 22 authority to waive that. 23 MS. BROWN: We need to make sure that we 24 stress that  what was that we talked about at lunch 25  reporting is required? 0081 1 MS. PATRICK: I just want to say it one last 2 time. Reporting is great. Reporting is definitely 3 required, so we just want to make that really clear. 4 Under no circumstances is anyone exempt from 5 reporting. Now, even if  let's say you get a grant 6 and you go out and you spend money and  well, you get 7 a grant, let's say you spend no money for the first 8 reporting period. Even if your numbers are zero  9 MS. BROWN: You still need to report. 10 MS. PATRICK:  put zero on the form and 11 send it in. In fact, there's even a box on the form 12 that says, " I have had no procurement during this 13 reporting period." You check the box , fill out the 14 top and send it back. That's all I have to do. If 15 zero is what you had, then zero is what you report. 16 But we just need to make sure that we know that you're 17 reporting and sending the forms in. 18 MS. BROWN: The other thing with reporting as 19 well  I mean, not just with reporting but with the 20 program  if you decide to choose to use the funding 21 from the grant to pay salaries for tribal members or 22 people that work for you, this program does not kick in 23 for salaries. It's only when you go out and buy 24 something in one of those four categories. What are 25 they? Construction, equipment, services or supplies. 0082 1 If you use it strictly fore salaries, this program 2 doesn't kick in. 3 MS. McPEAK: I wanted to just find out if 4 everybody knows what they're referring to when they say 5 the recipients are supposed to keep a bidders' list? 6 Does everyone know what a bidders' list is? 7 MS. BROWN: I didn't think so. 8 MS. PATRICK: We can tell you. When we give 9 you grant money and you go out and you procure things, 10 if you  if your contract  I'm sorry. If your 11 practices are to compete for the contracts, and you 12 have people who come in and bid on those contracts, you 13 have to maintain a list of people who have bid. 14 MS. BROWN: Who they are, what they bid. 15 MS. PATRICK: That's all it is, just a list 16 of bidders and what they bid, you know, I think names 17 and address or with contact information that's all it 18 is. It's pretty simple. 19 MS. BROWN: Again, that's part of the 20 documentation for the file, so that there's a record in 21 terms of what you did as the tribe, as the state, as 22 the grantee and you went out and you did this on your 23 own. 24 MS. MS. TURNINGROBE: So if somebody is going 25 to challenge, you can say  0083 1 MS. BROWN: That's what you go to, that's a 2 paper trail, that's right. 3 MS. SHOWALTER: Rachel Showalter, Gulkana 4 Village Counsel. My question is once this bidders' 5 list is created can we use it again or does it have to 6 be done away with once the grant year is over? 7 MS. PATRICK: If you  8 MS. BROWN: The bidders' list is the 9 by product of what you've done in terms of going out to 10 compete and who comes in. It's your record of account 11 of who came in for that particular procurement and what 12 they proposed in terms of the dollars, so that's 13 specific to that procurement. 14 Now, you could use that possibly if you have 15  and when I say that, I don't mean the bidders' list 16 per se, but information from that you can glean to go 17 out again, if you need to, for another requirement or 18 to identify other minority businesses in your area. 19 MS. PATRICK: It's also a good way to begin 20 to develop your own data base in a way, a list of 21 people who  if someone has bid that they're obviously 22 available and they thinking that they're capable of 23 doing the work. And so maintaining a bidders' list is 24 not only good documentation, but it can also be a 25 resource for you as that list grows, so you'll have a 0084 1 good idea of who's out there, especially if you 2 actively solicit small, disadvantaged businesses to 3 come in and compete for those contracts. 4 MS. BROWN: As Kimberly said that I'm 5 thinking a lot of times your files may be separate and 6 stand alone. So if you close that file out all of that 7 information is gone. You need another way to glean 8 from that and make that some kind of corporate memory 9 somewhere so that you'll know who's out there so you 10 can draw on that later on if you have another 11 requirement for the same or similar. 12 MS. DAVIDSON: A good way to get some 13 information about firms is to send out a notice about 14 sources sought and people will send you all of their 15 technical proposals. 16 MS. BAYLESS: Michelle Bayless from the 17 Native Village of Tazlina. I had experience working 18 with a procurement policy with NAHSDA, and the way they 19 did it was you would  for each business that you 20 wanted to bid on your construction project, each of 21 those places would have their own bid form. They would 22 put their price down, and we would save that in the 23 file. 24 So what you're saying is we would take that 25 information off of there and just have the name of the 0085 1 business, the address and the amount that they bid? 2 MS. BROWN: Uh huh. 3 MS. BAYLESS: And would it have to reflect 4 which project it bid on? 5 MS. BROWN: Uh huh. 6 MS. BAYLESS: So you'd basically need all 7 that information that on a procurement  on a list? 8 MS. PATRICK: Pretty much. 9 MS. BROWN: Did you have another question, 10 and that's it. Next steps, this is the third hearing 11 we have. We have 13 more to go. The rule comment 12 period closes January the 20th, and so we need and 13 encourage you to get your comments into us. Again, 14 earlier we gave out where you can find that. You can 15 get a copy of the Federal Register electronically 16 through EPA Internet listings at www. epa. gov/ fedrgstr. 17 MS. PATRICK: And also, I think there's still 18 some more of them out there. If you pick this up, it's 19 out there on the handout sheet. It's the only document 20 out there that's on EPA letterhead. Inside of that is 21 the Q & A sheet that tells you exactly all the places 22 you can go to find the rule. It also tells you like 23 the five or six ways you can send in your comments. So 24 make sure you take a look at that, it's very 25 important. I think that's it for  we have a question 0086 1 here. 2 MS. BAYLESS: Michelle Bayless from the 3 Native Village of Tazlina. My question was are the 4 grantees or the people that receive the grant money 5 obligated to hire the lowest bid? 6 MS. PATRICK: That speaks to your internal 7 processes or whatever your competitive processes is for 8 contracting, and so if you all have set up a standard 9 that says lowest price is not our primary goal and you 10 want to add in other factors like technical ability or 11 past performance, whatever it is you use for your 12 procurement practices, that's up to you all. We don't 13 have a say in that. 14 MS. BROWN: Right. We're not saying you have 15 to go to them just because they're a minority. They 16 have to be equipped, ready and able and willing to do 17 the job. All we're saying is that they need to know 18 what your processes is and that these opportunities 19 exists. 20 We're hoping, not just the tribes but the 21 states and local governments, would use more of the 22 local businesses in their area as they go out to 23 procure things with Federal money. The key here is 24 there's stipulations with the money that you get from 25 EPA, and when you sign up for the funding this is part 0087 1 of what comes with it. 2 And basically we're saying that minorities, 3 minority contractors and woman, those that we've 4 identified that fall in that category, should have a 5 fair share of an opportunity to participate in the 6 process. But they can't do that if they don't know. 7 A lot of times what we hear and see is they 8 haven't been included because this system has not 9 availed itself to them. The good ole boy network is 10 still alive and well. And even amongst some of the 11 tribes, some of the larger tribes, when we looked at 12 some of the reports, a couple years back a lot of the 13 tribes were not going to minority businesss. And maybe 14 they couldn't depending on what it was that they were 15 doing. 16 But we're saying that there are a lot of 17 minority businesses, tribally owned, etc., that are out 18 there that exist, that can do the work, and they need 19 to know about this, and they need to be included into 20 the fold. We see that as good  making good 21 businesses sense, keeping a lot of the money in the 22 local community instead of taking it some place else to 23 help build those communities up. 24 This is not an affirmative action program. 25 We don't see it as that. It's an outreach program. 0088 1 What I say to the contractors is money is green. They 2 don't  as long as it's legal  they don't care where 3 it's coming from. They just need to know how to go 4 about getting it and what the process is. And so we're 5 saying recipients of Federal funding, their process 6 needs to be open and fair across the board. 7 Now, if minority contractors are out there 8 and they can't do it or their prices are excessive, 9 then you don't have to go to them. Document your file 10 though in terms of what it is you did and why and move 11 on. And with the documentation I think it speaks for 12 itself, it should. 13 MS. BAYLESS: Does the documentation have to 14 be attached to the form? 15 MS. BROWN: It should be in your grant file, 16 because we will be doing reviews to check, and if you 17 have substantiated or more information that the MBE/ WBE 18 coordinator needs, then by all means you need to send 19 it to them. 20 MS. PATRICK: Things regarding the six 21 affirmative steps and the efforts you've made to go out 22 and find businesses, that type of thing, needs to be 23 documented in your grant file. In terms of what goes 24 on the reporting form, we're looking at your 25 procurement dollars and what you actually procured and 0089 1 spent and in what areas you spent them. That's what 2 that form is intended to capture. 3 It doesn't really capture your affirmative 4 efforts to go out and find them. Those things need to 5 be in the file, the things that you actually spent go 6 on the form. 7 MS. McPEAK: The one thing about the 8 reporting and about the documentation, we do mention 9 the reporting right now. We have to enter the reports 10 into a data base, and we do keep track of who is 11 reporting and who is not reporting. 12 As for a review of your files of the 13 procurement, normally when those will be done is 14 through a postaward monitoring visit. I don't know if 15 you heard about those or not because you haven't been 16 selected, but we are selecting tribes to go out and 17 look at their management systems that they have in 18 place. 19 And one of the management systems that we 20 will be looking at is your procurement system, whether 21 you have the proper procurement procedures in place, 22 whether they're written down, whether you're following 23 those procurement procedures. And one of the 24 procurement procedures that's also going to be looked 25 at is this one with minority and woman businesses. 0090 1 There's a condition in every single grant 2 that goes out concerning the use of good faith methods 3 to get as many of the minorities and women contractors 4 a chance to get a piece of the Federal money. And so 5 we will be looking at that during our postaward 6 monitoring visits. 7 Also, maybe the MBE/ WBE coordinator will come 8 out just to do a review of your procuments and see how 9 you're doing, so do keep the documentation. 10 MS. BROWN: Marie, does everybody know that 11 Marie now is your MBE/ WBE coordinator for Region X? 12 No? Marie, give them your phone number. 13 MS. McPEAK: Right now I'm located in the 14 Grants Administration Unit, OMP 145, and that's 1200 15 6th Avenue, Seattle, 98101. My phone number is ( 206) 16 553 2894, and my fax number is ( 206) 553 0151. And if 17 you have any questions concerning reporting or the fair 18 share goals and whether they apply to you, any 19 information that you need on how to comment on the 20 proposed rule, just give me a call or send me an 21 e mail. 22 My e mail address is mcpeak. marie@ epa. gov, 23 and we'll be able to help you as much as we can. If I 24 don't have the answers, I can always contact 25 headquarters or one of the other regional coordinators 0091 1 also. 2 MR. ANDREWS: A couple other questions just 3 probably because I wasn't in the session before. As I 4 understand it the DBE, that's Disadvantaged Business 5 Entity  6 MS. BROWN: Enterprise. 7 MR. ANDREWS:  Enterprise. Thank you. Just 8 trying to get language right here. That incorporates 9 both what was minority and woman owned or controlled 10 entities; is that correct? 11 MS. PATRICK: It doesn't incorporate 12 everybody, veterans, minority, woman, yes. 13 MS. BROWN: The labor surplus  I mean, it's 14 everybody. 15 MR. ANDREWS: And as far as the language goes 16 it says controlled  owned or controlled by an 17 individual. Does this include tribal owned instead of 18  not owned by a tribal member, but if a company is 19 owned or a  20 MS. PATRICK: If it's owned by a consortium? 21 MR. ANDREWS: Yeah, consortium or if the I 22 tribe itself does some subcontracting work or something 23 that can fall under this as well? 24 MS. PATRICK: It does apply. It also applies 25 to joint ventures. We have different categories, but 0092 1 it does apply as long as the  like for  let's say 2 the  as long as the entity is owned by the tribe, is 3 51 percent owned or controlled by the tribe, the itself 4 would be the disadvantaged portion of it. The business 5 needs to be 51 percent owned and control or owned or 6 controlled depending on which statute  we'll get into 7 that later  by the tribe itself. It cannot be a 8 situation where the tribe owns 40 and some other entity 9 that is not socially disadvantaged or not a minority 10 could not own the majority percentage, so it applies to 11 that. 12 MR. ANDREWS: So that would also be tribal, a 13 consortia controlled by  an entity controlled by more 14 than one tribe would be eligible as well. 15 MS. PATRICK: Yes. 16 MR. ANDREWS: Okay. Thank you. 17 MS. McPEAK: One thing, too, that I wanted to 18 clarify. Just because it's a tribally owned business 19 doesn't necessarily mean that it qualifies as a 20 minority or woman business. It has to qualify as a 21 small business first, then as a minority or woman owned 22 or tribally owned business. So it does have to qualify 23 as a small business first. 24 So like if a tribe owns a casino, it's not 25 classified as a small business if it has income over a 0093 1 certain amount. 2 MS. PATRICK: The problem is this: When it 3 comes down  when it come down to the actual 4 certification part, okay, let's say  let me say, 5 first of all, EPA does not have or does not recognize 6 or have a small size  a size standard for small 7 business. In our regulations we don't have that. 8 So the only categories that we do recognize 9 would be the disadvantages status: The minority, the 10 women, service disabled veterans, that type of thing, 11 labor surplus as well. 12 And so to the extent that the way we work 13 with an individual who has a tribally own business, 14 they're a tribe member. I own my own  I make widgets 15 or something you know or a consulting firm. What would 16 happen is the net worth requirement that's in the rule, 17 the $ 750,000 net worth requirement, would apply to the 18 individual who owns the business? 19 Now, in terms of something  we were talking 20 about a consortia, this, that and the third or a large 21 tribally owned business  let me think before I answer 22 that question. I need to turn to the right provision 23 here and make sure I'm right before I say it, but it's 24 applied a little bit differently because of that, and 25 so that part has been taken into consideration. 0094 1 What I'm trying to say is that the 2 disadvantage status would still exist to a large degree 3 because of the fact the EPA does not really recognize 4 or have a classification for a small  the small 5 business entity. 6 MS. BROWN: She's going to look for that 7 citation because we did address that to give you the 8 exact reading in the rule in terms of what we say about 9 tribally owned businesses or joint ventures. 10 MS. McPEAK: Because what I was thinking of 11 is like the Coeur d'Alene Tribe owned this particular 12 casino, okay. They may not own it totally but they 13 have the majority of the  of the shares in the 14 particular casino, probably 51 percent owned and 15 operated by the tribe. 16 Now, they had to get space in this building 17 which the tribe, themselves, like they're environmental 18 department, may have had to pay for space in the 19 casino. Could they count the amount that they spent 20 for the rooms in this casino as  can they put that on 21 their report as going to the minority business? 22 MS. BROWN: She's looking that up in the 23 rule. I'm not going to try. My attorney is looking it 24 up. 25 MS. PATRICK: What was your question? 0095 1 MS. McPEAK: Like the Coeur d'Alene Tribe 2 probably has a controlling interest in this particular 3 casino. But the department that is actually putting on 4 the conference might have had to put up money for these 5 particular rooms. So since it is a tribally owned and 6 controlled business, when they sent in the report  7 because we gave them a GAP grant to do this particular 8 conference  can they report what they paid for the 9 casino as minority participation on their quarterly 10 reports? 11 MS. PATRICK: I'm looking that up. 12 MS. BROWN: My guess is yes that they can. 13 MS. PATRICK: Currently, right now, as we 14 currently operate  because this rule is not in effect 15 yet  most definitely they could. 16 MS. McPEAK: Okay. 17 MR. ANDREWS: My question was specifically 18 the tribe as an entity which is not a business. So I 19 mean, tribes spin off businesses in some other arenas 20 off of casinos like a separate entity that's tribally 21 owned. But if a tribe itself wanted to do consulting 22 to another tribe, let's stay, would that be considered 23  and, obviously, then you wouldn't want the 750 K to 24 apply because their net worth  the tribe owns 25 reservation property  I would assume most tribes are 0096 1 worth a lot more than  2 MS. BROWN: It's a different calculation, I 3 believe. She's looking for the citation. I'm going to 4 start over, and then when she finds it, she's going to 5 stop me and we're going to answer that. So I'm going 6 to go back to where we were and how we started this 7 morning talking about the rule, because there are new 8 people here now, and for their benefit, they came in as 9 we were concluding so they can get what we went through 10 this morning. 11 MS. DAVIDSON: If you do leave would mind you 12 completing that survey for me? If you do leave just 13 leave it on the table and I'll pick it up. I 14 appreciate it. I really need those completed. 15 MS. BROWN: And we also need to make sure 16 that everybody has signed in. 17 MS. DAVIDSON: Everybody signed in, but I 18 need the evaluation sheet. 19 MS. BROWN: And she needs the evaluation 20 sheet. Okay. Let me say this as I start, that this is 21 a proposed rule on our MBE/ WBE program. If you are a 22 grant recipient from the EPA this applies to you. This 23 is not in effect yet, and it is being proposed that 24 when  once the rule becomes final, it will be phased 25 in over a three year period for the tribes totally. A 0097 1 lot of what we'll talk about are things that are 2 already in place and should be already in process. And 3 so as we talk about it, if you're not doing it, it's 4 something to think about. 5 One of the things  one of the first changes 6 that we're recommending is that the name be changed, as 7 the gentleman just stated, from MBE/ WBE to the DBE 8 program, and a DBE is defined as an entity owned and/ or 9 controlled by an individual who is socially and 10 economically disadvantaged under either the EPA's 8 11 percent or 10 percent statutes, as well as small 12 business enterprises, labor surplus area, firm or small 13 business in a rural area. 14 One of the major changes is certification, 15 and these are the changes that are being proposed: 16 Under the proposal there will be three changes to the 17 current certification requirements in order to satisfy 18 the Adarand decision. For those of you that are new, 19 we talked in general this morning about the Adarand 20 decision. That's a decision that went to the Supreme 21 Court and became the law of the land back in 1995. 22 There was a challenge to one of the state 23 programs out in the state of Colorado in terms 24 procurement practices that they were doing at the local 25 level. It escalated to the Supreme Court, thus we got 0098 1 the Adarand decision. 2 EPA is the last agency to go through this 3 process. DOT went first. We've been working with the 4 Department of Justice on the rule. Because the 5 Department of Transportation has a much larger program 6 it was recommended that they would go first. They have 7 done so, and I think their rule has been out now in 8 final probably for about a year, year and a half, and 9 EPA was the last one to come on board. 10 Basically, there are three agencies that have 11 a similar program like this. Most people are familiar 12 with the State DOT program. EPA has one, and so does 13 NASA. And NASA does not do their grants like we, so 14 I'm not sure what they're doing. So basically EPA and 15 DOT are the ones that have gone through the process or 16 who are going through the process. 17 Certification we will no longer accept an MBE 18 self certification. Right now if I were to go in and 19 say I'm a minority and I own my own business, I check a 20 box and that's all that is needed. Once this rule 21 kicks in, we need more. You need to be certified, and 22 we'll go into a little bit more detail. 23 We recognize  will recognize MBE 24 certifications from entities owned and controlled by 25 socially or economically disadvantaged individuals 0099 1 under either one of our statutes: The 8 percent or the 2 10 percent, or we will recognize someone who is 3 certified by a state, a local government, tribal 4 government or private certifiers provided that their 5 criteria matches ours. 6 There are a lot of certifying programs out 7 there but they may not be at the same statutory level 8 or meet the criteria that we have established. For 9 example, under the State DOT program, they do not 10 require you to be a citizen of the United States. 11 Under ours, we do. So if you were certified by DOT, 12 but you're not a citizen, you would have to come to EPA 13 to get certified for our program. 14 And the criteria is that  that we use  is 15 out of Section 8 ( a)( 5) and ( 6) of the Small Business 16 Act and SBA's 8( a) Business Development Program 17 regulations, that's the 8( a) program. We currently 18 accept state certifications without there having to 19 adhere to these criteria. But once the rule becomes 20 final that will change. 21 Again, let me say that we will not accept 22 under the proposed rule certifications that have been 23 made for people who are not citizens. We are requiring 24 that you first  that an entity first try to become 25 certified as an MBE or WBE by SBA or DOT first or under 0100 1 a tribal government or from a tribal government or 2 state or local government first. 3 When all else fails, and they can't get it 4 that way, given the example that I just gave you: If 5 they got certified by DOT but they were not citizens, 6 to comply with our program they would have to come to 7 us for certification. 8 We don't want to be in the certification 9 business, but because of the law of land we are, so 10 we're trying to utilize those programs that are already 11 in effect first. And quit frankly, it will do you  12 you'll get a lot more mileage out of it, the businesses 13 the entities will, if they get it from an SBA or DOT, 14 because theirs we accept and other people accept 15 theirs. Ours only applies to us right now the way it 16 stands. 17 MS. McPEAK: Which agencies accept 18 certifications of noncitizens? 19 MS. BROWN: DOT. 20 MS. McPEAK: DOT does? 21 MS. BROWN: DOT does. 22 MS. McPEAK: You don't know? 23 MS. BROWN: SBA does not. 24 MS. McPEAK: Okay. 25 MS. BROWN: DOT does, and we are following 0101 1 and trying to come close in line with the entire 2 Federal government. SBA is the policy maker there, and 3 so that's why we're following them. 4 We currently envision that there are about 5 five categories of individuals or groups who will not 6 qualify for MBE/ WBE certification programs from SBA or 7 DOT due to the differences in those agencies' 8 respective programs. These categories include: Woman 9 owned businesses and minority owned businesses that do 10 not meet the SBA/ DOT size standard, disabled American 11 owned businesses, private and voluntary organizations 12 controlled by individuals who are socially and 13 economically disadvantaged. This goes to our 10 14 percent statute. 15 Entities which are certified under criteria 16 which is inconsistent with EPA's DBE program, that's 17 under both the 8 percent and 10 percent, similar to 18 what I just said about the State DOT program, and an 19 entity claiming that it is owned or controlled by 20 socially and economically disadvantaged individuals 21 under the EPA's 8 percent statute. 22 MR. ANDREWS: Scott Andrews, Swinombis 23 Tribe. There's a number of references to the EPA's 8 24 percent and 10 percent statutes. What statutes is this 25 regulations referring back to? 0102 1 MS. PATRICK: The regulation actually is 2 going to apply to both programs, and what the really 3 sticking part is, which will really be on our end, when 4 someone comes to get certified, is under which 5 statute? 6 MR. ANDREWS: And that's my question, which 7 statutes are we talking about? 8 MS. PATRICK: EPA's 8 percent is under the 9 Clean Water Act and the 10 percent is under the Clean 10 Air. For reasons, whoever the rocket scientist was who 11 wrote the two, that  there's one word that makes the 12 distinction huge. 13 Under one statute the requirement is owned 14 and controlled. Under the other owned or controlled. 15 And while it's one word there's a huge difference 16 between the two standards. So we couldn't go back and 17 change the statute, so we had to sort of make a rule 18 that would encompass both ways. So it's a little 19 confusing but it's not  it's not  it's more 20 internally confusing in terms of how we go about 21 running the certification process than it is to the 22 person applying, and so it's weird. That's the best I 23 can say about it. 24 MR. ANDREWS: I'm not familiar with the 25 sections of those statutes. I've been focused more on 0103 1 the programmatic. I'm wondering if you could give me 2 the section numbers of those two statutes so that I can 3 look them up? 4 MS. PATRICK: Sure, it's in the  well, you 5 don't have a copy of the rule book? 6 MR. ANDREWS: Or you can look that up and 7 give that to me. I don't have to have you say it. 8 MS. BROWN: Okay. She's going to look it 9 up. The other thing is that  10 MR. ANDREWS: Thank you. 11 MS. BROWN:  woman businesses would have to 12 be certified as well. Right now they're not required 13 to. There is a pending rule or policy at SBA, and it's 14 been pending now for a couple of years, three years 15 maybe, to certify woman. But that's been put on hold, 16 and we don't know where that's going, but we know it's 17 being considered. 18 UNIDENTIFIED SPEAKER: Actually, they do 19 certify women occasionally but you have to make a case. 20 MS. BROWN: To be certified? 21 UNIDENTIFIED SPEAKER: To be certified. They 22 just don't accept you because you're a woman. 23 MS. BROWN: It's not the norm. A practical 24 effect if these provisions are adopted is that, again, 25 we talk about the $ 750,000 net worth of the 0104 1 individual. Anybody having a net worth more than 2 750,000 will be precluded from initial eligibility. So 3 the entity that owns it has to have a net worth less 4 than 750,000, and that's the standard that's 5 established by SBA. 6 MS. PATRICK: I have your cites: For the 8 7 percent statute it's 42 USC 4370( d), as in David. 8 MR. ANDREWS: 437 ( d)? 9 MS. PATRICK: No 4370 ( d) as in David. 10 MS. BROWN: Is it 42 or 43? 11 MS. PATRICK: 4370 ( d). I'll say it again. 12 The citation for EPA's 8 statute is 42 USC 4370 ( d) as 13 in David. For the 10 percent statute it's 42 USC 14 7601. 15 MS. BAYLESS: How long does it take a person 16 or small business to go through the certification? 17 MS. BROWN: The process varies depending on 18 your package, depending on who you go to and where. 19 For SBA it could take anywhere from three to nine 20 months or maybe even a year. For some states, local 21 entities, it could be a lot faster. 22 The one thing that we are saying  that I'm 23 saying is, I don't recommend anybody to go pay to get 24 certified, because you still have to go through  25 especially if you're going through SBA, your package 0105 1 will still end up in that pile the way that it is when 2 it came in, and it really doesn't garner anything. 3 All of the forms are there on the Internet at 4 the SBA website. Electronically you can get those, 5 have access to it and just fill it out and work with 6 the people in terms of the cause that they may have or 7 you're calling them to find out how long is it going to 8 take. 9 If there's situation  and we've been able 10 to do this in the direct procurement side here at EPA 11  if somebody is waiting on, or a certification is 12 pending and an award is tied that, or they're waiting 13 and they can't get their award or it would hurt them if 14 they didn't have it, we've been able to call SBA to see 15 if they could speed it up sometimes they do. Sometimes 16 they don't. It depends on the form and if everything 17 is completed and so it's a case by case basis. 18 MS. BAYLESS: Another question I had was for 19 the net worth of 750,000 is that for the business or 20 their personal net worth? 21 MS. BROWN: The personal net worth. 22 MS. BAYLESS: That would include their 23 private land, their house, their  24 MS. BROWN: Personal net. 25 UNIDENTIFIED SPEAKER: Actually, it's not the 0106 1 land. It gets real tricky. You have to read the 2 regulations about how net worth is calculated, and it's 3 just so complicated you have to like read it, 4 especially, for a tribally owned enterprise. It would 5 be  you need to have the regulations. 6 MS. BROWN: We refer you to go back to that 7 part of the statute to take a look at that. 8 MS. BAYLESS: What part of the statute is 9 that? 10 MS. PATRICK: I gave it to a lady this 11 morning. It's page 43. 12 MS. BROWN: She's got to find that statute. 13 MS. PATRICK: I know where that one is. The 14 part of the regulations under the Small Business Act 15 which addresses the definitions for a lot of the 16 things: Ownership control and a lot of those things is 17 at 13 CFR 124.104  I'm sorry  .103 through 106. 18 And there are also special rules that are applicable to 19 Indian tribes found at 13 CFR 124.109. 20 MS. BROWN: And they're all on the Internet, 21 all the on the Internet. 22 MS. PATRICK: And also, I have an answer, or 23 partial answer, to the question I was supposed to be 24 looking up before. I couldn't get a dial tone out so I 25 couldn't verify it to