Why Do I Care About MnDOT’s Exhibit A Forms?

Part of the “Barb’s Blog” intent is to take issues/concerns I work with members on and turn them into educational opportunities. This month I assisted a member who is getting substantially less work than her original contract value. This struggle isn’t just a one off, but I learned that this is a regular practice that occurs for many members doing public/government work.

Today I am addressing once you receive a bid request for a MnDOT project. You bid the job and were given a subcontract by the prime contractor (or subcontractor to the prime). There is a clear distinction between knowing that your numbers were used to getting a subcontract. Unfortunately, just because you “heard your numbers were used, or you were told that you are going to be working on the project” does not mean that you will. Do not count on that job until you receive a copy of the subcontract that is fully executed. I have heard too many horror stories where members were told they would be on the project and held that open in their schedule but never got a signed contract and weren’t used.

The issue/practice we dealt with this past week was a prime who was reducing the dollar amount and workload of a DBE which will significantly reduce the subcontract value. Knowing that this isn’t allowed by the agency, I called a meeting with the DBE member, and a representative of MnDOT. What I learned is that the subcontractor was requested to sign an Exhibit A and not to put a contract value on it. The contractor told the sub to sign it and they would “fill in the amount once they got all their contract values determined and then you will receive a copy”. The copies are never sent to the small business. While this practice is commonplace – it is NOT acceptable, and is a form of FRAUD.

Primes – I know you want ease in clearing the contract, but this must be done accurately – don’t tell DBEs why this can’t be done. It is a MnDOT requirement if you want the project. I have heard that some contractors do not even have the subs sign the documents or give them copies of the document. If your certification is being utilized/counted on a MnDOT project the only value that the compliance agency can review and enforce is from the signed Exhibit A. “Your members should not step foot on a project without a copy of the signed Exhibit A reflecting the contract dollar amount for the commitment” said Orlanda Klinkhammer at MnDOT. “Do not sign a blank copy of the Exhibit A. You are the approved signer of this document and its accuracy. This could hit your business/livelihood hard.”

Once the submitted contract gets cleared for meeting a goal or demonstrating good faith efforts by MnDOT’s Office of Civil Rights, the Exhibit A is the binding utilization commitment the contractor has made. If a contractor deviates from that document by reducing or removing the approved contractor or dollar amount, they MUST get prior approval from the agency to do so. To change the contract value amount of a DBE, the prime must submit the Termination, Substitution, and Reduction Request form to MnDOT. To submit that request they must notify the DBE of the change and allow the DBE to respond within 5 days. Also, all drivers must carry (No-change Affidavit forms) with them, to be signed by project managers where there is a change in the previous contract, all notifications to and from the subcontractor must be included with that request for change. Note: Just because the overall goal is met does not mean that we decrease the contract values to DBEs to self-perform the work or give it to a non-DBE subcontractor.

Additionally, the DBE is responsible for notifying the Office of Civil Rights in writing of any contract changes that they receive within 10 days of the change. For example, if you have been notified that your services are being reduced in scope, you need a signed no-change Affidavit form and notify OCR immediately. I would make it practice that if you are given a deviation, you immediately email (OCR). This way they are aware in real time of the change because once the project ends it is too late.

In my 15 years of doing this work, I have found that major issues for DBEs is when agencies do not enforce their own regulations or aren’t made aware of issues. Enforcement can only happen if:

  • The documents are completed upon submittal.
  • The DBE keeps thorough records and documentation
  • The Office of Civil Rights is notified that there has been a change on the project.

DBEs you must protect your own interests. I know how hard that is for fear of not working on the projects or being blacklisted by a contractor. Maybe you have never had an issue before, so you aren’t concerned. Maybe you are a newer contractor who doesn’t know any better. The Exhibit A is the most important piece of the MnDOT contract clearance paperwork at the front end of the project that can protect your business once the project work starts.

— B