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EVERYONE.SO IF YOU WERE HERE IN DECEMBER, WELCOME BACK IF YOU ARE NEW TO A TP.
UH, THESE ARE OUR HOME SPACES, SO WE'D LIKE TO INVITE YOU IN TO SEE WHERE WE WORK AND WHAT WE DO EVERY DAY.
UM, I AM GONNA PAUSE AND DO A SAFETY MOMENT.
WE'RE GONNA TRY TO BUILD THESE INTO EVERYTHING THAT WE DO FROM NOW ON.
SO, FIRST OF ALL, OUR EXITS ARE OBVIOUSLY THESE DOORS HERE AND THEN OUT THE FRONT.
UM, WHO IN THE AUDIENCE CAN CALL 9 1 1 IN AN EMERGENCY? WHO WANTS TO CLAIM THAT? AND WHAT'S YOUR NAME, SIR? KEVIN YANG.
WHO IN THE, IN THE AUDIENCE KNOWS? CPR, UH, IN THE BACK.
SO YOU'RE IN, YOU'RE IN CHARGE OF THAT.
WE DO HAVE AEDS LOCATED IN THE KITCHEN.
AND IF YOU'RE LOOKING FOR FIRE EXTINGUISHERS, KITCHEN AREA AND IN THIS, UM, UH, OUTSIDE EATERY AREA.
OTHER THAN THAT, UM, WELCOME TO THE ROOM FOR THE DAY.
THIS MORNING IS ALL ABOUT YOU ALL TO LEARN ABOUT DBES EDUCATION ON WHAT THE PROGRAM IS AND HOW TO GET INVOLVED IN, IN A TP PROJECTS.
IN THE AFTERNOON, IT'LL BE NETWORKING, NETWORKING, NETWORKING.
SO STAY HERE ALL DAY, ENJOY THE DAY WITH US.
THE LUNCHTIME HOUR, WE DO HAVE A FOOD TRUCK OUT OUTSIDE FOR YOU TO PURCHASE FROM TO MAKE IT EASIER.
I WANNA INTRODUCE, FIRST OF ALL, ONE OF OUR ESTEEMED A TP BOARD MEMBERS, JUAN GARZA, WHO IS AN ADVOCATE AND A CHAMPION FOR LOCAL BUSINESS HERE IN AUSTIN.
AND HE'LL GIVE A FEW WELCOME REMARKS.
I WOULD USE THE MIC 'CAUSE MY VOICE IS KIND OF FALTERING TODAY.
UH, NORMALLY I DON'T LIKE TO READ SOME PREPARED REMARKS, BUT THIS IS SUCH AN IMPORTANT, UH, GATHERING THAT, UM, I FELT I WANT SURE THAT I COVERED EVERYTHING THAT NEEDS TO BE COVERED.
UH, FIRST OF ALL, WE REALLY ARE, UH, BUT, UH, GRATEFUL THAT YOU'RE HERE, UH, TO HELP US, UM, WHEN A TP WAS FORMED, THAT IT WAS OBVIOUS TO ALL OF YOU, I THINK ALL OF YOU, ALL OF YOU, THAT, THAT, UH, THAT PARTICULAR ATTENTION WAS THAT THIS IS A TRUE PUBLIC PRIVATE VENTURE.
IT, THE WORK CANNOT BE DONE WITHOUT THE PRIVATE SECTOR PARTNERING WITH US TO GET IT DONE.
SO THANK YOU FOR BEING HERE THIS MORNING.
A LOT HAS HAPPENED SINCE OUR LAST, UH, GATHERING BACK IN DECEMBER, UM, HERE IN THIS VERY BUILDING.
THE UPDATE THAT PROBABLY OF MOST INTEREST TO ALL OF YOU IS THAT WE HAVE NOW ANNOUNCED PUBLICLY THAT WE INTEND TO BEGIN CONSTRUCTION IN 2027, AND WE HAVE TO HAVE THE FIRST TRAINS RUNNING BY 2023.
THE MUCH WORK MEANT TO BE DONE BETWEEN NOW AND THEN, INCLUDING MAKING SURE THAT WE HAVE THE CONTRACTORS AND WORKERS THAT WE NEED TO SUCCESSFULLY COMPLETE THE PROJECT.
TODAY'S EVENT IS ESPECIALLY DESIGNED, UH, TO OFFER SMALL AND MINORITY OWNED BUSINESSES INTERESTED IN WORKING IN THE CLOUD PROJECT, THE OPPORTUNITY TO CONNECT TO INFORMATION AND POTENTIAL PARTNERS TO HELP THEM, UM, UH, GET ON THIS JOURNEY WITH US.
UM, FOR SUMMARY OF THE PROCESS, IT WILL BEGIN BY QUALIFYING FOR THE FEDERAL DISADVANTAGED BUSINESS ENTERPRISE PROGRAM, DPE PROGRAM.
IT'S A LITTLE MORE STRINGENT THAN THE CITY'S, UH, M-B-A-W-B PROGRAM, AND IT MEANS FILLING OUT A BUNCH OF FORMS. BUT THE GOOD NEWS IS THAT, UH, QUALIFYING FOR THIS FEDERAL, UH, PROGRAM OPENS DOOR TO OPPORTUNITIES NOT ONLY TO PARTICIPATE WITH US, BUT ALSO OTHER FEDERALLY FUNDED PROJECTS SUCH AS THE I 35 CORRIDOR AND THE AIRPORT EXPANSION.
SO THAT'S GOOD NEWS, BUT IT STILL MEANS FILLING OUT FORMS. SO WE HAVE STAFF MEMBERS HERE TO HELP YOU IN THAT PROCESS TO GET YOU STARTED IN THAT PROCESS.
SO, UH, DON'T, UH, BE PUT OUT BY THAT.
UM, THE SECOND PART OF TODAY IS EVENT.
IT'S DESIGNED TO INTRODUCE SMALL AND MINORITY OWN BUSINESSES TO LARGER, UH, PARTNERS.
UM, THIS IS REALLY, REALLY IMPORTANT IN MY CAREER, I HAVE SEEN, UH, STARTUPS, UH, REALLY DO VERY WELL BY PARTNERING AND THEN BEING VERY EFFECTIVE PARTNERS WITH THE LARGE CORPORATIONS.
AND WE HOPE THAT WE CAN HELP YOU DO THAT AND, UM, AND GET SO SIMPLE BECAUSE AT THE END OF THE DAY, THE SMALL FIRMS THAT ARE LOCATED HERE IN AUSTIN PAY LOCAL TAXES.
THEY HIRE LOCAL PEOPLE FOR THEIR, AS THEIR EMPLOYEES.
SO WE WANT TO DO BUSINESS WITH YOU.
UM, THEN MANY OF THE PARTNERS, IN FACT, ALL THE PARTNERS THAT WE WILL DO BUSINESS WITH, WILL HAVE HAD A LOT OF EXPERIENCE BUILDING LARGE SUCCESSFUL PROJECTS, UM, IN THE PAST.
AND, UM, IT WILL BE OF GREAT BENEFIT TO ALL OF YOU TO BE PARTNER WITH THEM AND AGAIN, TO BE VERY SUCCESSFUL WITH THEM.
UM, WE WANT YOU TO GAIN EXPERIENCE, GET, UH, CLOSE WITH THOSE PARTNERS, UH, SO MAYBE IT CAN LEAD TO MORE WORK FOR YOU IN THE FUTURE.
UM, WE HOPE THAT TODAY'S, UH, SESSION IS VALUABLE TO YOU.
WE LOOK FORWARD TO HELPING YOU AND WE LOOK, UH, FORWARD TO DOING BUSINESS.
THANK YOU FOR BEING HERE AGAIN THIS MORNING.
WE REALLY, REALLY APPRECIATE YOU.
I'LL MOVE MY BOARD MEMBER RIGHT ON OVER.
SO THIS MORNING, THE FIRST SESSION OF OUR MORNING IS ABOUT
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OVERHEAD RATES, WHICH MAY SOUND SUPER EXCITING AND FUN.UM, WHAT WE HAVE SEEN ON OUR CONTRACTS ON THE PROFESSIONAL SERVICES SIDE IS THAT SOMETIMES THIS IS A CHALLENGE OF UNDERSTANDING WHAT IT IS WE'RE ASKING FOR, FOR OVERHEAD RATES, WHY WE NEED THEM, AND HOW TO GET THERE.
BECAUSE FOR SMALL BUSINESSES, UM, THIS IS A CHALLENGE.
SO OUR GOAL HERE IS TO MAKE SURE THAT WE MAKE IT AS SIMPLE AS PO POSSIBLE.
SIMPLIFY THE PROCESS HOWEVER WE CAN, AND HEAR YOUR CONCERNS AND ANSWER TO THEM.
UH, SO WE HAVE A GREAT TEAM HERE FROM EY WHO'S PUT TOGETHER A PRESENTATION FOR US TO WALK YOU THROUGH IT.
AND SO ENJOY, CLICK, TRUST ME, YOU'RE GONNA ENJOY IT.
UM, IS CLICKER ON BY CHANCE? UH, IT'S NOT ONE.
I'M A SENIOR MANAGER IN OUR GOVERNMENT CONTRACTS PRACTICE AT ERNST AND YOUNG.
SO OUR, OUR PRACTICE, WE HAVE EXPERIENCE HELPING SMALL BUSINESSES TO FORTUNE 50 COMPANIES JUST NAVIGATE THE REGULATORY COMPLEXITIES OF DOING BUSINESS WITH THE GOVERNMENT, RIGHT? SO THAT INCLUDES FEDERAL CONTRACTS, GRANTS, AND REALLY ACROSS ENTIRE LIFE CYCLE.
WE FOCUS ON PRICING, COST, ACCOUNTING, PROCUREMENT, OTHER OPERATIONAL COMPLIANCE MATTERS.
SO REALLY JUST HELPING YOU NAVIGATE HOW TO DO BUSINESS WITH THE GOVERNMENT, AND ALSO DEALING WITH ANY OVERSIGHT AGENCIES SUCH AS DEPARTMENT OF TRANSPORTATION OR OTHER GOVERNMENT AGENCIES.
UM, I SHOULD GO TO THE NEXT SLIDE, PLEASE.
UM, SO TODAY WE ARE GONNA GO THROUGH OVERHEAD, OVERHEAD RATES.
SO WE'RE GONNA GO THROUGH THE CONS, PRINCIPLES THAT GOES UNDER THE OVERHEAD RATES, HOW TO DEVELOP OVERHEAD RATES, AND REALLY EVEN THE, THE AUDIT LIFE CYCLE OF HOW TO PROCURE AUDITORS AND HOW TO GET THROUGH A AUDIT OVERHEAD RATE.
I THINK THIS DOES SEEM LIKE A LOT, BUT A LOT OF TIMES THIS IS BENEFICIAL.
SO THIS DOES PROVIDE AN OPPORTUNITY FOR YOU TO RECOVER CERTAIN BACK OFFICE COSTS OR COSTS OF EVEN DOING COMPLIANCE WITH THINGS LIKE DEVELOPING OVERHEAD RATES.
THERE IS OPPORTUNITIES TO COMPLIANTLY DEVELOP OVERHEAD RATES, AND ALSO, UH, RECOVER COSTS IN A COMPLIANT MANNER THROUGH THE, THROUGH, UH, GOVERNMENT FUNDED, UH, AWARDS.
UM, JUST INTRODUCTION FOR OUR TEAM.
UM, I HAVE JOHN GALT, UH, WHO'S WITH ME, WITH HERE WITH ME AS WELL.
BUT OUR, OUR TEAM HAS, UH, WE'RE A TEAM OF EXPERIENCED CONSULTANTS AS WELL AS FORMER GOVERNMENT AUDITORS AND INDUSTRY PROFESSIONALS.
UM, WE ALSO HAVE FOLKS THAT, UH, HAVE EXPERIENCE WITH OVERHEAD AUDITS.
SO JOHN IS ACTUALLY ONE OF THEM.
SO IT WOULD BE GREAT TO HEAR SOME INSIGHTS AS IT RELATES TO WHAT HE LOOKS FOR AND HOW TO REALLY GET THROUGH THE AUDITS, UH, AND HAVE A AUDIT, UH, AUDITED OVERHEAD RATE IN PLACE TO DO BUSINESS WITH THE GOVERNMENT.
SO I'LL PASS IT ON TO JOHN TO START OFF WITH THE, UH, ACTUALLY GO TO THE NEXT SLIDE, PLEASE.
SO, AGENDA TODAY, WILL, JOHN WILL KICK THINGS OFF GOING THROUGH THE COMPLIANCE REQUIREMENTS.
UM, I'LL GO THROUGH HOW TO REALLY DEVELOP, MONITOR, AND ADMINISTER INDOOR COST RATES.
UM, WE'LL GO THROUGH THE RISKS OF NON-COMPLIANCE.
SO JUST WHY, WHY COMPLIANCE IS IMPORTANT OVERALL FOR THESE, UH, OVERHEAD RATES.
UM, NAVIGATING THE OVERHEAD AUDIT PROCESS ITSELF.
AND THEN WE'LL KIND OF TALK ABOUT NEXT STEPS.
SO THINGS THAT YOU CAN DO IN THE SHORT TERM, UM, AND AS WELL AS THE LONG TERM AS YOU'VE CONTINUED YOUR JOURNEY WITH, UH, A DP AND OTHER, UH, OPPORTUNITIES FOR FEDERAL FUNDING.
UM, LOOKING FORWARD TO SPEAKING THROUGH THE COMPLIANCE REQUIREMENTS.
UM, AND I, HE SAID I HAVE EXPERIENCE WITH OVERHEAD AUDITS AND, UM, WORKING THROUGH THOSE, DEALING WITH THE COGNIZANT AUDIT AGENCY.
UH, IF YOU CAN CLICK ON THE NEXT SLIDE AND THEN THE NEXT ONE.
SO I GUESS THE FIRST THING IS, WHAT'S THE PURPOSE OF TODAY? I MEAN, SO, UH, A TP IS A LOCAL GOVERNMENT CORPORATION.
THEY'RE SUBJECT TO SPECIFIC PROCUREMENT STANDARDS UNDER TWO CFR, UM, SUB SUB PART D.
AND ONE OF THAT, I'LL JUST SUMMARIZE WHAT'S LISTED UP HERE.
THEY BASICALLY HAVE TO GO WHEN THEY'RE GOING OUT TO BID FOR, UH, PRIME CONTRACTORS AND SUBCONTRACTORS, THEY HAVE TO NEGOTIATE A PRICE THAT'S CONSIDERED FAIR AND REASONABLE, UM, BASED ON GOVERNMENT STANDARDS INCLUDING, UH, FEDERAL COST PRINCIPLES.
SO WHAT'S THAT, WHAT THAT MEANS FOR YOU ALL IS THAT THEY'RE LOOKING FOR YOU ALL TO PROVIDE, UM, UH, PROPOSE AS WELL AS BILL ON YOUR, ON YOUR CONTRACTS USING RATES THAT HAVE BEEN, UM, COMPLIANT PURSUANT TO THE FEDERAL COST PRINCIPLES.
AND THAT MEANS YOUR, YOUR OVERHEAD RATES REALLY.
SO THAT'S KIND OF LIKE THE APPLICABILITY OF TODAY'S CONVERSATION, UM, AND WHY WE'RE HERE.
UH, AND THAT INCLUDES EVERYTHING FROM THE, THE LIFECYCLE PREPARING YOUR PROPOSED ESTIMATE TO BILLING.
SO YOU MAKING SURE THAT YOUR, UH, THAT OVERHEAD RATE'S BUILT IN THE PROPOSED AUDIT AND IT'S AUDITED AND YOU'RE PROPOSING IT TO THE A TP AND THEN THROUGHOUT YOUR BILLINGS THAT YOU'RE SCRUBBING YOUR DIRECT COSTS FOR, FOR THOSE UN ALLOWABLE COSTS THAT ARE PURSUANT TO THE THOROUGH COST PRINCIPLES.
SO, UM, IF WE CAN GO TO THE NEXT SLIDE AND WE'LL TAKE ANY QUESTIONS ANYONE HAS TODAY AS WE GO THROUGH THOSE SLIDES.
SO FIRST, THE FEDERAL, UH, FAR PART 31 COST PRINCIPLES.
THESE ARE ALSO UNDER CFR SUBPART E AS WELL.
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BUT THE, FOR THE, FOR-PROFIT ENTITIES THAT ARE SUBJECT AS YOU ALL, THAT'S, UH, FAR PART 31.COST PRINCIPLES ARE THE SAME THING AS WHAT'S IN CFR SUB PART D.
UM, SO REALLY THE APPLICABILITY, THIS IS APPLICABLE TO COST TYPE CONTRACTS AND SUBCONTRACTS, UM, FIXED PRICE CONTRACTS TO THE POINT THAT IT'S A THRESHOLD THAT'S ABOVE A CERTAIN, UM, LIMITATION WHERE YOU HAVE TO SUBMIT CERTIFIED COST AND PRICING DATA, UM, IN THE GOVERNMENT LENS.
THAT WOULD BE, UH, IF ATP'S PROCURING SOMETHING AND THEY NEED TO GO OUT TO MARKET FOR SOMETHING THAT'S GREATER THAN $2 MILLION.
SO, UM, THEY HAVE TO MAKE SURE THEY NEGOTIATE THAT BASED ON CERTIFIED COST AND PRICING DATA.
AND THAT'S ON BEHALF OF YOU ALL'S THE POPULATION TO SUBMIT THAT INFORMATION.
UM, AND THE COST PRINCIPLES ARE IN EFFECT WHEN THE, WHEN CONTRACTS AWARDED APPLICABLE FOR THE LIFE OF THE CONTRACT WITH CERTAIN SECTIONS AND APPLIES TO FEDERAL AND STATE CONTRACTS AND SUBCONTRACTS.
UM, UH, SOME OF THE THINGS, THE OVERHEAD CERTIFICATES AND PENALTIES FOR LIABLE COSTS.
SO BASICALLY, WHENEVER YOU'RE CERTIFYING THAT ON YOUR, UH, PROPOSAL THAT YOU'VE, YOUR RATES, PART OF YOUR OVERHEAD RATE HAS BEEN AUDITED, PART OF THAT, UM, PROPOSED, UH, AN OVERHEAD RATE IS THAT YOU'RE CERTIFYING TO THAT.
SO THERE COULD BE A RISK OF DOUBLE AND TREBLE DAMAGES AND INTEREST IF THAT IS ACTUALLY, THAT CERTIFICATION IS ACTUALLY NOT, NOT CORRECT.
SO, UH, THAT'S THE IMPORTANCE OF HAVING AN AUDITED RATE FROM A EXPERIENCED AUDITOR TO MAKE SURE THAT KIND OF PROVES OUT THAT, UH, STAMPS YOUR APPROVAL, THAT THE OVER RATE YOU'RE USING IS, UM, UH, ACCURATE.
ALRIGHT, SO TWO OF THE KEY CONCEPTS AROUND, UH, JUST AN OVERHEAD RATE IN GENERAL IS YOU HAVE YOUR DIRECT COST, THE COST THAT YOU'RE ON THE FRONT FOR PART OF YOUR INVOICE, YOUR LABOR, YOUR DIRECT LABOR, UM, SOME OF YOUR MATERIALS AS WELL AS YOUR OTHER DIRECT COSTS.
SO MAYBE LIKE SOME TRAVEL THAT'S INCURRED THAT, THAT IS RELATED DIRECTLY TO THAT EFFORT.
UM, SO THE ACTUAL DEFINITIONS LISTED ABOVE, AND IT'S REFERENCED AT THE FEDERAL ACQUISITION REGULATION TWO PART TWO, WHICH IS WHERE ALL THE DEFINITIONS ARE, ARE HOUSED.
UM, SO IT'S SOMETHING THAT RELATES TO A PARTICULAR COST OBJECTIVE AND CAN BE TRACED TO, UM, SOMETHING THAT'S SPECIFICALLY IDENTIFIABLE WITHIN THAT PARTICULAR COST, UH, CONTRACT OR COST OBJECTIVE.
UM, IN INDIRECT COSTS ARE THOSE OTHER COSTS THAT ARE REMAINING THAT ARE NOT IDENTIFIABLE TO THAT PARTICULAR PIECE OF WORK YOU'RE WORKING ON, WHETHER IT'S, UH, AN OVERHEAD TYPE FUNCTION THAT'S PERFORMING ASSISTANCE TO SUPPORT MULTIPLE OBJECTIVES WHERE YOU CAN'T, IT, IT, IT WOULD BE TOO COST AND EFFICIENT TO IDENTIFY THAT SPECIFIC PERSON'S WORK AND, AND BE ABLE TO, UH, SEGREGATE IT THAT WAY.
SO THOSE TYPES OF INDIRECT COSTS ARE YOUR OVERHEAD TYPE FUNCTIONS THAT SUPPORT THE WORK YOU'RE DOING IN THE FIELD ON SITE.
SO THAT'S WHAT AN INDIRECT COST IS.
UM, AND THAT'S ULTIMATELY ALLOCATED TO THE COST OBJECTIVE, UH, VIA AN ALLOCATION BASE.
MOST OF THAT, MOSTLY THAT WOULD BE DIRECT LABOR, UM, PAYROLL FOR, UH, UM, ENGINEERING CONSTRUCTION TYPE INDUSTRY.
SO I'LL GO TO THE NEXT SLIDE, PLEASE.
UM, SO DIRECT COST, THIS IS JUST GETTING BACK INTO THE, THE CONTRACTOR'S RESPONSIBLE FOR DEFINING THE TYPES OF COSTS THAT WILL, THAT WILL ACCOUNT FOR AS DIRECT COST.
UM, SOME OF THE COSTS ARE NORMALLY DEFINED AS DIRECT COST.
I MENTIONED THIS EARLIER, IT'S YOUR MATERIAL SUBCONTRACT COST, YOUR DIRECT LABOR, AND THOSE, UH, DIRECT PERFORMANCE TYPE LABOR.
THAT'S FOR THE ACTUAL PERFORMANCE OF THAT, OF YOUR AWARD.
UM, THERE'S SOME COSTS THAT ARE DE DEFINED AS DIRECT COST BY SOME, BUT, UH, OTHERS THAT ARE INDIRECT.
AND THIS WOULD BE THOSE INSTANCES WHERE, UM, MAYBE LIKE THE, YOUR, YOUR AGREEMENT WITH, UH, A TP COSTS FOR LIKE SPECIFIC PROJECT MANAGEMENT, SO LIKE YOUR BILLING PROJECT MANAGEMENT, SO THAT SOMETIMES THAT COULD BE PART OF THAT CONTRACT WOULD BE PROJECT MANAGEMENT VIA A DIRECT COST OR SIMILAR TO QUALITY ASSURANCE TYPE COST.
SO, UM, AND I GUESS DEFINING WHAT'S ACCOUNTED FOR AS DIRECT COST, THAT DIRECT COST INVOLVE INVOLVES BALANCING THE ACCURACY OF THE COST ACCOUNTING AND THE ADMINISTRATIVE BURDEN COST.
SO LIKE I MENTIONED, YOU MAY BE, YOU MAY BE ABLE TO CERTAIN THINGS, CERTAIN TYPES OF FUNCTIONS WHERE YOU CAN FIGURE OUT THAT, OH, WE'RE ABLE TO TRACK THIS AND DEFINE IT, THAT THIS PERSON'S WORKING THIS AMOUNT OF TIME ON THIS CONTRACT.
WELL, THEN OTHER TIMES IT COULD BE LIKE A-A-C-E-O TYPE EXECUTIVE OR WHERE YOU CAN'T REALLY, IT'S TOO COST PROHIBITIVE TO TRY AND TRACK THEIR TIME FOR THE LITTLE PIECES.
THEY MAYBE, UH, WORK ON THE, UH, DIRECT CONTRACT.
SO THAT PERSON IS A OVERHEAD TYPE FUNCTION, GNA TYPE FUNCTION, AND THEY'RE, UM, REIMBURSED THROUGH THE OVERHEAD RATE.
LOOKS LIKE I HAVE THE CLICKER.
THOSE ARE NORMALLY ALLOCATED THAT BENEFIT FROM THESE COSTS.
SO THESE ARE USUALLY GROUPED INTO COMMON POOLS AND CHARGED THE COST OBJECTIVES THROUGH AN ALLOCATION OR INDIRECT RATE.
UM, THE ALLOCATION BASE ATTEMPTS TO INDIRECT OR ALLOCATE THE INDIRECT COST TO THE PROJECT BASED ON RELATIVE BENEFIT RECEIVED.
THIS IS CALLED THE CAUSAL BENEFICIAL RELATIONSHIP.
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UH, THE WAY THAT THE, THE FEDERAL ACQUISITION REGULATIONS SUB PARTY DEFINE IT, YOU, YOU WANT TO GROUP ALL OF YOUR, UM, CO INDIRECT COST AND HOMOGENOUS, THAT'S THE DEFINITION.THEY USE HOMOGENOUS TYPES OF COSTS TOGETHER, AND THAT WILL BECOME YOUR POOL.
AND THEN THAT WILL BE ALLOCATED OVER YOUR BASE, WHICH, IF YOUR BASE IS REALLY MADE UP OF, I MEAN, YOUR POOL IS MADE UP OF DIRECT LABOR AND LABOR MANAGEMENT TYPE OF, I MEAN, IF YOUR POOL IS MADE UP OF MANAGEMENT TYPE FUNCTIONS, THEN YOUR BASE IS ALWAYS GONNA BE A SORT OF A PAYROLL DIRECT LABOR TYPE ALLOCATION BASE, UM, WHICH I THINK IS MOST APPLICABLE TO YOU ALL.
UH, THE OTHER SIDE IS IF YOU HAVE, IT'S NOT, IT'S NOT MANAGEMENT FUNCTIONS IN YOUR POOL AS YOUR, YOUR OVERHEAD ARE NOT MANAGEMENT FUNCTIONS.
IT'S REALLY A RESOURCE OUTPUT, WHICH IS WHAT YOU SEE IN LIKE A ASSEMBLY LINE TYPE CONSTRUCTION WHERE THERE THE RESOURCE OUTPUT IS THE BASE.
SO GETTING DOWN TO THE ALLOWABILITY CRITERIA.
SO REALLY THE A CO THE WAY THAT THEY JUST DEFINE IT IS THAT EVERY COST IS, UH, SUBJECT TO A TEST OF ALLOWABILITY, WHICH MEANS THAT THE ABILITY TO CLAIM THAT AS A COST ON MY, ON MY PROJECT OR CONTRACT WITH, FOR INSTANCE, A TP, UM, THERE'S THREE, THERE'S A FEW, UH, THERE'S FIVE OF 'EM LISTED HERE, LIKE THE, UH, COMPETENCIES YOU HAVE TO MEET TO BE ABLE TO PASS THE ALLOWABILITY TESTS.
AND THAT'S REALLY BASED ON THESE, THE REASONABLENESS, THE APPLICABILITY OF THE COST, WHICH IS DOES THAT COST, IS IT APPLICABLE TO THIS? UM, IS IT APPLICABLE TO THIS CONTRACT OR IS IT APPLICABLE TO THIS OVERHEAD POOL? MAYBE WE HAVE A, A POOL FOR THAT'S ON SITE OVER OVERHEAD, OR WE HAVE OFFSITE, UH, OVERHEAD POOL.
SO MAKING SURE THAT THOSE COSTS ARE ELIGIBLE TO THAT, UM, TO THAT PARTICULAR OBJECTIVE.
UM, THE COST ACCOUNTING STANDARDS ARE LISTED HERE, ARE OTHERWISE GENERALLY ACCEPTED PRINCIPLES AND PRACTICES APPROPRIATE TO THE CIRCUMSTANCES.
SO WHAT THIS IS SAYING IS THAT, UH, THE COST ACCOUNTING STANDARDS ARE ANOTHER, LIKE, I WOULD SAY ANOTHER STEP UP OF, OF, UM, REQUIREMENTS.
BUT THIS IS LISTED IN THE FAR PART 31 SECTION HERE BECAUSE THERE'S CERTAIN, UM, COST PRINCIPLES THAT INCORPORATE COST ACCOUNTING STANDARDS BY REFERENCE.
AND I'LL JUST TRY TO GIVE A A BRIEF EXAMPLE.
ONE OF THE, UH, COST PRINCIPLES IS AROUND, UM, COMPENSATION.
THEY HAVE TONS OF JUST WHAT HAPPENS WHEN I HAVE BIG SEVERANCE OR ARIF REDUCTION IN FORCE, OR WHAT HAPPENS, UM, WHEN I, WHAT DO I DO WITH MY PENSION COSTS? HOW DO I MEASURE THEIR ACCOUNT FOR THOSE AND ASSIGN THOSE.
AND REALLY WHAT IT SAYS THAT YOU HAVE TO, YOU HAVE TO ASSIGN AND ALLOCATE AND MEASURE THOSE IN ACCORDANCE WITH YOUR, YOUR CAST STANDARDS.
SO THERE'S LIKE CERTAIN STANDARDS THAT YOU'RE INCORPORATED BY REFERENCE TO, UM, TO, UH, TO ADHERE TO THANK YOU
UH, AND IN THE TERMS OF THE CONTRACT, SO THERE COULD BE DIFFERENT THINGS THAT ARE SUBJECT TO THE CONTRACT WHERE YOU HAVE TO, UM, YOU'LL BE UPHELD TO SPECIFIC, IF IT'S A MUTUALLY AGREED UPON ALLOWABILITY OF A COST, THEN YOU HAVE TO, UM, ADHERE TO THAT IN TERMS OF, SO THAT'S AN EXTRA LAYER TO CHECK ON EACH CONTRACT, REALLY, MOST OF 'EM ARE GONNA BE UPHELD TO THE FAR COST PRINCIPLES, BUT THERE COULD BE THAT NUANCE THERE.
UM, AND THEN THE FAR SUBPAR, 31.2 LIMITATIONS.
SO THERE'S SOME 2 0 2 0 5 THERE SELECTED COSTS WHERE THEY ACT ACTUALLY SPELL OUT EXPRESSLY UN ALLOWABLE COSTS, UM, ENTERTAINMENT AND ALCOHOL.
WE'LL GET TO THOSE UH, IN A MINUTE.
AND THEN THE ONE, SO RIGHT HERE WE'RE TALKING ABOUT REASONABLE, SO THEY GO INTO MORE DETAIL AS TO WHAT EQUATES TO REASONABLENESS.
AND THAT'S REALLY LIKE, WHAT IS, IS THIS A COST THAT'S BEING DONE IN THE NATURAL COURSE OF BUSINESS? IS IT BASED ON THOSE, THOSE COMPETENCIES AROUND ACCEPTED BUSINESS PRACTICES IN ARMS LEAGUE TRANSACTION? UM, IS IT MEET, IS IT IN ACCORDANCE WITH FEDERAL AND STATE LAWS? UH, SO IT'S REALLY, ARE YOU NOT DEVIATING FROM YOUR ESTABLISHED PRACTICES WHEN YOU'RE, UH, WHEN YOU'RE PERFORMING, WHEN YOU'RE DOING, WHEN YOU'RE CLAIMING THIS TYPE OF COST.
UH, SO IT'S REALLY JUST, IS THAT COST REASONABLE IN THE NORMAL COURSE OF BUSINESS? AND IS IT IN COMPLIANCE WITH, UM, NORMAL ACCOUNTING STANDARDS LIKE GAP AND REASONABLENESS? SO APPLICABILITY, THIS IS REALLY, I TRY TO, I PROBABLY WENT THIS EARLIER, BUT THE FACTORS FOR DETERMINING APPLICABILITY, THOSE ARE THE, THE COSTS ARE SPECIFICALLY, UH, ENCOURAGED SPECIFIC FOR THE CONTRACT THAT COULD BE OUT, THAT WHEN THE APPLICABILITY TRACE AND OTHERS AROUND THE REASONABLE PORTION OF THE WORK TO THE BENEFITS RECEIVED, THIS IS REALLY GETTING INTO THE, UH, INDIRECT COST AND THAT CAUSE A BENEFICIAL RELATIONSHIP TO DETERMINE IF SOMETHING'S APPLICABLE TO THE CONTRACT, UM, AND THEN COST NECESSARY TO THE OVERALL OPERATION OF THE BUSINESS.
UM, NO DIRECT RELATIONSHIP TO ANY PARTICULAR COST OBJECTIVE.
SO, UH, THE APPLICABILITY PART IS WHERE YOU CAN GET, UM, HURT.
THERE IS REALLY WHEN YOU HAVE, UH, IF YOU HAVE CERTAIN PRACTICES WHERE YOU'RE TREATING COSTS DIFFERENTLY FOR LIKE CIRCUMSTANCES.
SO I THINK IT'S, IT'S GOOD TO HAVE A SET PRACTICES IN PLACE WHERE I'M GONNA, YOU KNOW, IF I'M ON, IF I'M DOING TRAVEL, IT'S GONNA BE BASED ON A SPECIFIC, UH, POLICY WHERE I'M INCURRING TRAVEL DIRECT FOR A CONTRACT, I'M GONNA CHARGE IT DIRECT.
IF IT'S INDIRECT, I'M GONNA CHARGE IT HERE.
[00:20:01]
IN PLACE, UM, THIS KEY, I'LL KEEP GOING.AND THEN CREDITS, THE REAL, UH, RUB ON THIS IS THAT ANYTIME YOU'RE GETTING ASKING FOR REIMBURSEMENT FOR A COST, WELL THEN THE GOVERNMENT WANTS TO PARTICIPATE IN THAT REFUND OR A CREDIT.
IF SOMETHING HAPPENS OR YOU GET A CREDIT OR A DIS OR YOU AFFORD A DISCOUNT, THE GOVERNMENT WANTS TO PARTICIPATE IN THAT, THAT CREDIT, WHICH MEANS THAT IF I INCUR SOMETHING AND CHARGE IT THROUGH MY OVERHEAD, UH, LET'S SAY I, I, IT TURNS OUT THE AMOUNT WAS THERE WAS A, A FAT FINGER I HAD TO GET, I GOT REFUNDED ON THAT INVOICE.
WELL, THAT INVOICE SHOULD BE CREDITED TO THE POOL IT WAS INCURRED TO.
THAT'S KIND OF THE CONCEPT THERE.
UM, ALL RIGHT, SO ACCOUNTING FOR UN ALLOWABLE COSTS, AND THIS IS REALLY THE, THE CRUX OF, UM, DESCRIBING, YOU KNOW, THE DIFFERENT PARTS OF CONNECT FOR AN ALLOWABLE COST, AS I MENTIONED EARLIER, YOU HAVE, ONCE YOU'RE DETERMINED THAT IT'S REASONABLE, APPLICABLE, THEN YOU'RE, YOU'RE LEFT WITH A STANDARD OF, IS IT, IS IT MEET THE, THE GOVERNMENT'S, YOU KNOW, RIGHT, TO GET REIMBURSEMENT FOR? IS IT, IS IT AN EXPRESSING ALLOWABLE COST? SO THESE ARE THINGS THAT ARE RE MENTIONED EXPLICITLY IN THE FAR PART, UH, 31, 2 0 5.
THIS IS CALLED THE SELECTED COST SECTION.
AND THIS REALLY SPEAKS TO LIKE THINGS THAT ARE, UM, THAT ARE UNALLOWABLE, UH, PURSUANT TO LAW REGULATION.
THIS RELATES TO ALCOHOL COSTS, UM, EXECUTIVE COMPENSATION.
SO EVERY, EVERY YEAR THE OFPP PUBLISHES THE, THE, UM, A LIMITATION FOR EXECUTIVES, AND THAT RELATES BACK TO THE COST PRINCIPLE AROUND COMPENSATION.
AND I THINK THIS YEAR IT'S, IT'S AROUND 646,000 PER PER INDIVIDUAL.
THAT'S THE, THAT'S SORT OF THE THRESHOLD FOR, UH, ANYTHING ABOVE THAT'S UN ALLOWABLE FOR YOUR EXECUTIVES.
SO I THINK THAT'S REALLY TRYING TO MAKE SURE THAT THERE'S NO, UH, GOLDEN PARACHUTES IN THE, IN YOUR, IN YOUR OVERHEAD RATE WHEN YOU'RE GETTING REIMBURSED.
MAKE SURE THERE'S A, A THRESHOLD TO WHAT YOU'RE CHARGING THROUGH FOR THOSE EXECUTIVES THAT WORK, UM, IN THE OVERHEAD OR GNA FUNCTIONS.
UM, AND THERE COULD BE MUTUALLY AGREED UPON UN ALLOWABLE COSTS.
THAT'S ALSO MENTIONED IN, IN THIS FAR SUBPART.
UH, AND THEN YOU HAVE THIS CONCEPT OF DIRECTLY ASSOCIATED COSTS.
SO LIKE, THESE ARE THE COSTS THAT, UM, YOU INCURRED BECAUSE YOU WERE, UH, BECAUSE YOU AT THE INCURRENCE OF THE DIRECT OF THE COST THAT WAS UN ALLOWABLE ALREADY.
SO AN EXAMPLE WOULD BE IF I'M, UM, GOING TO A, UH, AN EVENT THAT'S ENTERTAINMENT, IT'S UNALLOWABLE WHEN I TRAVEL, YOU KNOW, IF I HAVE TO TRAVEL BY PLANE TO GET TO THAT EVENT, THEN THOSE DIRECTLY ASSOCIATED COSTS ARE ALLOWABLE AS WELL.
SO BEING ABLE TO, UH, CAPTURE THAT IN YOUR, UM, IN YOUR PRACTICES AND POLICIES TO MAKE SURE THAT ANY TIMES YOU MAYBE HAVE SOMETHING THAT'S UN ALLOWABLE OR RELATES TO THAT, THEN YOU TAG THOSE DIRECTLY ASSOCIATED ALLOWABLE COSTS AS WELL.
I THINK ANOTHER EXAMPLE WE'VE SEEN IS A LOT OF, UM, UH, LOBBYING ACTIVITIES.
SO THERE'S LIKE CERTAIN GROUPS YOU CAN BE A PART OF THAT, YOU KNOW, MAYBE DON'T HAVE THAT INHERENT LOBBYING, UM, CONCEPT, BUT THEN YOU GO TO CERTAIN MEETINGS WITHIN THAT, UM, MEMBERSHIP THAT ARE RELATED TO LOBBYING.
SO IT'S REALLY TAGGING THAT, THOSE KIND OF THINGS IN YOUR POLICIES AND PROCEDURES AT THE POINT OF EITHER ENTRY, WHICH IS WHENEVER YOU RECORD THE COST OR YOU REVIEW IT AFTER THE FACT IN YOUR, UM, WHAT I CALL THE SCRUB FOR UN ALLOWABLE COST WHENEVER YOU'RE BUILDING YOUR INDIRECT OVERHEAD RATE.
UM, LET'S SEE, OKAY, EXAMPLES OF EXPRESSING UN ALLOWABLE COST.
THERE'S, I THINK THERE'S, IN THE FORTIES OR FIFTIES, THE AMOUNTS OF SUBPARTS HERE, THEY GO IN ORDER ALPHABETICALLY, BUT WE JUST CAUGHT OUT A FEW, UM, BAD DEBTS.
THIS IS LIKE IF I DON'T MAKE, IF SOMEONE'S NOT MAKING PAYMENT AND I CHARGE A BAD DEBT EXPENSE, THAT'S UN ALLOWABLE, UM, CONTRIBUTIONS OR DONATIONS, THE, THOSE ARE UN ALLOWABLE WITH THE EXCEPTION OF, UH, THERE'S A MINOR EXCEPTION FOR COMMUNITY SERVICE TYPE WORK WHERE IT RELATES BACK UP TO PUBLIC RELATIONS, UM, FOR A COST PRINCIPLE.
ENTERTAINMENT COST, OBVIOUSLY THOSE ARE, THOSE ARE ALLOWABLE.
SO ANYTIME YOU HAVE A, A SORT OF AN EVENT HAPPY HOUR, UM, IF YOU CAN'T, YOU CAN'T, UM, CATEGORIZE IT IN THE TERMS OF LIKE A MORAL EMPLOYEE MORALE EVENT, THEN IT'S, IT'S ENTERTAINMENT, UM, WHICH WAS UN ALLOWABLE.
UM, THE FINES AND PENALTIES, VIOLATION OF LAWS, THOSE ARE UN ALLOWABLE, UM, INTEREST ON BORROWINGS, UH, THOSE ARE ALLOWABLE.
AND THEN, YOU KNOW, GOODWILL IS ALSO PRICE EXCESS OF THE FAIR VALUES UN ALLOWABLE.
AND THEN ALCOHOLIC BEVERAGES ARE ALSO UN ALLOWABLE.
SO ANYTIME YOU HAVE THOSE, THAT'S A, UM, I THINK MOST COMPANIES HAVE A WAY OF TRACKING THOSE TYPES OF COSTS IN THEIR ENTRY FOR THEIR EXPENSE REPORTING.
BUT, UM, THAT'S, THOSE ARE SOME OF THE ONES THAT COME OUT A LOT.
YOU HAVE RECEIPTS AS ALCOHOL AND FOOD.
SO IS THAT ALRIGHT TO SHOW THAT RECEIPT FOR THE ALCOHOL AND STRIKE THAT OUT AND JUST TOTAL FOR THE
[00:25:01]
BUSINESS MEDIA? OR DO YOU WANT SEPARATE RECEIPTS, ALTHOUGH ONE RECEIPT? DOES THAT MAKE SENSE? YEAH, YOU CAN HAVE IT AS ONE RECEIPT.I THINK THERE'S A, THERE'S A RULE WHERE YOU JUST GOTTA MAKE SURE IT'S ITEMIZED SO THAT THEY CAN, YOU CAN, YOU'RE ABLE TO SHOW THAT YOU SCRUB THAT OUT.
LIKE WHEN, IF THAT PERSON'S GETTING REIMBURSED FOR THE A HUNDRED DOLLARS AND 10 OF IT'S ALCOHOL, THEY JUST WANNA MAKE SURE THAT, UM, YEAH, 90, YEAH, YEAH, NO PROBLEM.
UM, YEAH, I THINK IT DEPENDS ON LIKE COMPANY POLICY TOO, RIGHT? BUT LIKE ONE WAY, THE WAY YOU SAID THAT IT ABSOLUTELY CORRECT.
RIGHT? SO YOU CAN RECEIVE, STRIKE OUT THE ALCOHOL, THAT'S THE EASIEST.
IS THAT ONE WAY OF DOING IT? UM, DIGITAL GOVERNMENT RATES, RIGHT? SO IF YOU THINK ABOUT IT, IF YOU WANT TO AVOID JUST RECEIPTS AND KIND SCRIPT, THEY JUST SAY, FOR MY GOVERNMENT PROGRAMS, I WANT TO MY EMPLOYEES GETTING REIMBURSED AFTER.
AND THAT JUST MAKES THINGS A LOT EASIER FOR, FOR EVERYONE ACROSS.
SO IT'S SOMETHING THAT'S CONSIDER, YEAH.
THESE ARE THE FAR SOME OF THE RESOURCES HERE, UM, AROUND JUST THE FAR IS, I MEAN THE FAR IS HUGE.
WE TALKED ABOUT PART 31 AROUND COST PRINCIPLES, WHICH IS WHAT'S APPLICABLE TO DEVELOPING A OVERHEAD RATE THAT'S, THAT IS, UM, AUDITABLE AND THEN IT CAN GET AUDITED AND GET THAT STAMP OF APPROVAL THAT THIS, UM, OVERHEAD RATES, THE RISK OF IT'S, YOU GET THE OPINION THAT THE RISK OF MATERIAL STATEMENTS RELATED TO FAR COST PRINCIPLES IS, UM, IS OKAY.
SO THAT'S KIND OF WHAT WE'RE TALKING ABOUT HERE IS PART 31.
AND THEN WE ALSO REFERENCE THE COST ACCOUNTING STANDARDS.
'CAUSE LIKE I I MENTIONED, THERE'S, IF YOU GO, IF YOU READ SOME OF THOSE FAR, UH, 31 2 0 5 SELECTED COSTS, THEY'RE GONNA INCORPORATE SOME OF THE COST ACCOUNT STANDARDS BY REFERENCE.
AND THAT'S, THAT'S SORT OF REALLY AROUND LIKE, UM, UH, PENSION, UM, SOMETIMES DEPRECIATION REFERENCE BACK, UM, IF YOU HAVE ANY BIN PROPOSAL, IRD TYPE COST OF REFERENCE BACK TO THE STANDARDS, UM, THE COST SCANNING STANDARDS.
BUT I GUESS JUST BEING COGNIZANT OF THAT IS, IS PART OF YOUR, UM, SOME OF THE REQUIREMENTS YOU'RE SUBJECT TO.
UM, I THINK THAT'S SCENE OF THIS COMPLIANCE REQUIREMENT SECTION, BUT WE'LL, DOES ANYONE HAVE ANY OTHER QUESTIONS? UH, IS THE NUMBER ONE MISS AND HAPPEN WHEN THEY'RE DOING OVERHEAD GENERATION AND TRACKING COSTS? NUMBER ONE, WHICH IS THE BIGGEST, MOST COMMON MM-HMM.
AND THE NEXT, THE NEXT SECTION IS ACTUALLY BUILDING INDIRECT RATES.
SO I THINK, I THINK TO ANSWER YOUR QUESTION, I THINK THE DEFINITION OF LIKE CONSISTENTLY TREATING THINGS AS DIRECT OR INDIRECT, WHICH WILL KIND OF GET INTO NOW WITH BUILDING RATES, I THINK IS THE BIGGEST PART OF JUST, I THINK JUST CBES, BUT ALSO JUST COMMERCIAL COMPANIES DOING BUSINESS WITH THE GOVERNMENT OR WITH GOVERNMENT CONTRACTING FOR THE FIRST TIME, BEING ABLE TO CLASSIFY COSTS.
I THINK THE COST LIABILITY LIABILITY SECTIONS IS DEFINITELY IMPORTANT.
AND THERE IN DEPENDENCY, THERE ARE MORE DETAILS AROUND LIKE, KIND OF ONE THAT THERE'S THINGS THAT ARE ALLOWABLE ON UNLOVABLE AND THEN THERE'S A GRAY AREA OF SOMETIMES ALLOWABLE, SOMETIMES UN SO THAT'S JUST ONE
I THINK SOMETIMES THAT THE WAY THAT THE, THE AUDIT, YOU PUT THE AUDIT LENS ON, THERE'S CERTAIN COSTS IN YOUR, BASED ON YOUR RISK PROFILE THAT YOU'RE GONNA ALWAYS, THAT YOU'RE GONNA LOOK AT, YOU'RE GONNA ALWAYS MAKE SURE REALLY, UM, UP TO PAR ON TRAVEL COST SCRUBS, YOU WANNA MAKE SURE YOU'RE GETTING ALL THOSE, UM, ABOVE PER DIEMS, THE FIRST CLASS FLIGHTS, ALL THOSE THINGS DONE.
SO YOU CONSIDER THAT'S KIND OF YOUR HIGH RISK ACCOUNTS.
THERE'S ALWAYS THOSE LIKE LOW RISK AREAS WHERE YOU'RE NOT INCURRING THOSE TYPES OF COSTS MUCH, BUT IT, IT, IT CAN HURT YOU, SUCH AS WE'VE SEEN LIKE TUITION REIMBURSEMENT.
THEY HAVE SOME WEIRD RULES, UH, AROUND THE, UM, SOME COMPANIES WE'VE SEEN, THEY'VE HAD POLICIES WHERE THEY, THEIR POLICIES ARE WRITTEN WHERE IF, IF THE PERSON LEAVES WITHIN A CERTAIN TIME AFTER RECEIVING THE REIMBURSEMENT, THEY HAVE TO GET, THEY HAVE TO, UH, THEY SAY THAT COST HAS TO BE PAID BACK.
WELL THAT'S ALSO, THAT HURTS YOU IN TERMS OF YOUR OVERHEAD RATES.
'CAUSE NOW YOU GOTTA
SO IT'S LIKE MAKING SURE YOU, YOU RISK YOUR RISK PROFILE AND YOU UNDERSTAND THAT AND YOU KIND OF PERFORM YOUR UN ALLOWABLE COST ANALYSIS AT A GOOD, YOU KNOW, UNDER LIKE THOSE KEY RISK AREAS SO THAT LIKE IN YOUR AUDIT, YOU WON'T GET DINGED.
THE NEXT SECTION, I'LL PASS IT.
SO I GUESS WE'RE GONNA TALK THROUGH DEVELOPING MONITORING AND ADMINISTERING INDIRECT COST RATES.
SO, I MEAN, EVEN WE WENT THROUGH ALL THESE COMPLIANCE REQUIREMENTS AND THERE WAS, YES, THERE WAS A LOT OF JUST RED TAPE AROUND DOING BUSINESS WITH THE GOVERNMENT, BUT ALSO KIND OF PLUSES, RIGHT? SO I THINK FOR INDIRECT COST RATES, YOU CAN RECOVER YOUR BACKUPS COST OF DOING BUSINESS, YOU CAN RECOVER PARTS OF IT IF IT'S ATTRIBUTABLE.
[00:30:01]
ELIGIBLE, RIGHT? SO THE PORTION OF YOUR BUSINESS THAT'S ATTRIBUTABLE TO GOVERNMENT CONTRACTS, SUBCONTRACTS, SUB-AWARDS GRANTS, YOU CAN RECOVER IT, RIGHT? YOU'RE, YOU HAVE BACK OFFICE HR COSTS, FINANCE COSTS, EXECUTIVE COSTS THAT COULD BE RECOVERED AS PART OF THESE RATES, COSTS OF YOU EVEN DOING COMPLIANCE REQUIREMENTS.SO LIKE ALL THESE, ALL THESE COMPLIANCE REQUIREMENTS THAT REQUIRE YOU TO HIRE ADDITIONAL FOLKS OR ADDITIONAL TIME OR CONSULTANTS OR WHATEVER IT MIGHT BE, RIGHT? SYSTEM, UH, SYSTEM ENHANCEMENTS, THOSE ARE TYPES OF INDIRECT COSTS THAT YOU CAN, WHEN YOU CAN COMPLY DEVELOP IT, YOU CAN RECOVER IT.
SO I THINK YOU JUST WANT TO, IT COULD BE INTIMIDATING, BUT THERE'S DEFINITELY BENEFITS OF ESTABLISHING THESE RATES.
UM, AND ALSO ENABLES YOU TO PURSUE THESE TYPES OF CONTRACTS AND GRANTS MOVING FORWARD FOR OTHER CUSTOMERS OR OTHER PRIMES.
SO JUST, UH, THINK OF IT AS AN OPPORTUNITY TO, UH, GROW REVENUE AND ALSO BE COMPLIANT WITH REGULATIONS TO ENABLE YOU TO PURSUE OTHER AWARDS.
UM, I THINK I COVERED THAT HERE.
SO I GUESS THE LIFECYCLE OF INDIRECT COST RATES.
SO I, I THINK THERE'S THREE, THREE BUCKETS THAT YOU COULD THINK ABOUT IT.
SO THERE'S PRICING RATES AND BILLING RATES, WHICH COULD BE ONE AND THE SAME FOR, FOR EVERYONE REALLY TO THINK ABOUT IT AS WHAT YOU USE TO PRICE YOUR SOLICITATIONS, AND THEN WHAT YOU USE TO BILL YOUR CUSTOMER THROUGHOUT THE KNOW LIFE THROUGHOUT THE COURSE OF THE YEAR.
UM, SO THAT COULD BE ONE IN THE SAME, IN A SENSE THAT IF YOU PRICE SOMETHING THAT COULD BE THE VERY SAME ESTIMATES THAT YOU ANTICIPATE TO INCUR THROUGHOUT THE COURSE OF THE YEAR, RIGHT? YOU WANNA BE ABLE TO MAKE SURE YOU'RE CONSISTENT WITH HOW YOU ESTIMATE AN ACCOUNT FOR COST.
THAT'S GONNA BE A, THE THEME ACROSS THIS WHOLE SECTION OF DEVELOPING RATES, BUT GOING, GOING ACROSS THAT ROUTE.
UM, THE LAST PART IS LIKE FINAL INDIRECT COST RATES, WHICH COMES DOWN TO THE AUDIT.
SO YOU'RE LOOKING AT IT FROM A PERSPECTIVE OF THESE ARE COST BASED RATES, SO YOU ESTIMATE RATES AND THEN ULTIMATELY YOU, YOU SHOULD BE ABLE TO RECALCULATE THEM USING ACTUAL COST INCURRED.
SO THAT'S THE FINAL RATES WHERE YOU ARE RECALCULATING THE RATES AND THEN YOU DO A TRUE UP OR THOSE THAT TRUE UP MAY BE HIGHER OR LOWER.
AND THAT MAY IMPACT, UH, YOU KNOW, OBVIOUSLY YOU WANT, YOU WANNA BE ABLE AS CLOSE AS POSSIBLE, SO YOU'RE NOT, THERE'S NOT A CREDIT ISSUED OR YOU, YOU KNOW, THE GOVERNMENT KNOWS YOUR MONEY OR YOUR PRIME BEST MONEY.
UM, FROM A SYSTEM, SYSTEM SET UP PERSPECTIVE, A FEW THINGS THAT WE DO WANNA KEEP IN MIND.
SO WE WENT THROUGH ALL THESE REGULATIONS THAT KNOW THAT JOHN WENT OVER FROM PERSPECTIVE.
THE THINGS YOU WANT DO WANT TO LOOK, LOOK AT IS REALLY SETTING UP, HAVING ABLE TO ACCUMULATE COSTS IN MANNER.
SO YOU'RE LOOKING AT YOUR, YOUR ACCOUNTING SYSTEM TO TRY BALANCE YOUR GYM ACCOUNTS, BEING ABLE TO IDENTIFY ACCOUNTS THAT, UH, WE'LL GET INTO POOLS AND BASES, BUT REALLY JUST SIMPLE WAY OF THINKING ABOUT IT'S NUMERATOR DOMINANT, RIGHT? SO IS THERE A WAY TO CLASSIFY COSTS IN CONSISTENT MANNER, WHETHER IT'S USING GL ACCOUNTS, COST CENTERS, BOARD NUMBERS, YOU KNOW, DEPENDING ON THE ACCOUNTING SYSTEM THAT YOU'RE USING OR YOUR P SYSTEM USING, THAT COULD CHANGE OR WHAT, UM, I, I GUESS JUST FOR SHOW OF HANDS, HOW MANY OF YOU HAVE EXPERIENCED WITH INDIRECT RATES, OVERHEAD RATES IN THE PAST? OKAY, SO A FAIR NUMBER OF YOU GUYS, THAT'S AWESOME.
UM, I GUESS HOW MANY OF YOU HAVE GONE THROUGH AUDITS IN THE PAST? SO, OKAY.
SO I, I THINK JUST THINKING ABOUT A PERSPECTIVE OF, YOU KNOW, BEST WAY TO SET THINGS UP.
I THINK ONCE ADMINISTRATIVE RUN AS MUCH AS POSSIBLE, RIGHT? THESE ARE, YOU DON'T WANT TO SPEND AS MUCH, YOU DON'T WANNA SPEND TIME ADMINISTERING THE OVERHEAD RATES IF THERE'S NOT A LARGE BENEFIT FOR IT.
SO LOOKING AT FROM THAT PERSPECTIVE, BUT ALSO THINKING ABOUT A STRUCTURE THAT, YOU KNOW, ALLOWS YOU TO RECOVER, RECOVER AS MUCH OF YOUR COST AS POSSIBLE, RIGHT? IN A COMPLIANT MANNER.
THAT'S THE BEST WAY TO THINK ABOUT IT.
UM, AND THEN ALSO LOOKING AT FROM A RISK PERSPECTIVE, MAKE SURE IT'S COMPLIANT, RIGHT? YOU DON'T, THERE'S, THERE'S A COST CARRY PIECE, BUT ALSO MAKING SURE THAT YOU'RE COMPLIANT WITH THE FEDERAL REGULATIONS.
UM, AND THEN THERE'S ALSO A COMPETITIVENESS COMPONENT OF YOU WANNA MAKE SURE THAT YOU'RE NOT, YOUR, YOUR RATES AREN'T TOO HIGH, RIGHT? YOU WANNA, YOU'RE THINKING ABOUT COST CARRY, BUT BALANCING THE COMPETITIVENESS BECAUSE, YOU KNOW, ULTIMATELY HIGHER RATES MAY, UM, BUT YOU HAD A COMPETITIVE DISADVANTAGE.
UM, ORGANIZATIONAL CONSIDERATIONS.
SO I THINK THE WAY YOU STRUCTURE RATES, WE'RE TALKING ABOUT
SO IT REALLY COMES DOWN TO HOW YOUR BUSINESS IS STRUCTURED, RIGHT? SO LOOKING AT HOW MANY BUSINESS UNITS YOU HAVE OR HOW MANY LOCATIONS, YOU KNOW, WHAT'S, WHAT, WHAT'S THE SUPPORT FUNCTION, WHAT'S THE NATURE OF YOUR BUSINESS THAT REALLY DRIVES HOW THESE RATES COULD BE STRUCTURED.
SO THINGS COULD BE VERY SIMPLE.
SO WE'LL GO THROUGH SOME EXAMPLES THAT ARE VERY SIMPLE.
UH, IT'S A, IT'S AN OVERHEAD RATE AND A FRINGE RATE, AND THAT'S REALLY IT, THAT'S A VERY COMMON STRUCTURE FOR, UH, FOR, FOR, UH, SMALLER COMPANIES.
WHEREAS IF YOU'RE LOOKING AT A, YOU KNOW, BECOME A MEDIUM SIZED BUSINESS OR A LARGE BUSINESS THAT MAY HAVE A, A RATE STRUCTURE THAT HAS 70 PLUS, RIGHT? SO THERE'S, THERE'S A DRASTIC DIFFERENCE, BUT ULTIMATELY IT'S GETTING TO THE SAME POINT OF YOU'RE RECOVERING BACK OFFICE OR COST MANAGEMENT FUNCTIONS THAT SUPPORT VARIOUS PARTS OF YOUR BUSINESS, BEING ABLE TO RECOVER A PORTION OF THAT AS MUCH AS POSSIBLE.
UM, SO I THINK, I THINK WE WENT THROUGH THIS, BUT REALLY JUST, I, I THINK THE BIGGEST PART HERE IS JUST
[00:35:01]
GOING THROUGH AND EMPHASIS ON CONSISTENCY CAUSE AND BENEFICIAL RELATIONSHIP, RIGHT? SO CONSISTENCY, MAKING SURE THAT, FOR EXAMPLE, IF PROJECT MANAGEMENT COSTS ARE TREATED AS INDIRECT OR OVERHEAD COSTS FOR YOUR, YOUR WARDS, MAKING SURE THAT IF, YOU KNOW, EACH BUSINESS UNIT IS ACCOUNTING FOR THAT CONSISTENTLY AS OVERHEAD COST VERSUS, YOU KNOW, TREATING AS A DIRECT COST OR CHARGING IT AS A DIRECT LABOR LABOR ITEM FOR YOUR CONTRACT.SO BEING ABLE TO EMPHASIZE THAT, UM, AND THEN FROM, AND THEN JUST MAKING SURE THAT, I THINK THAT'S BEING, YEAH, FALLING, FALLING THAT CONSISTENTLY.
AND THEN, UM, ALLOWING FOR YOUR STRUCTURE TO BE REFLECTIVE OF YOUR CURRENT CURRENT BUSINESS, RIGHT? SO I THINK YEAR OVER YEAR YOUR BUSINESS CAN CHANGE.
SO I THINK BEING ABLE TO EVALUATE YOUR INDIRECT RATE STRUCTURE YEAR OVER YEAR OR AS, AS LARGE BUSINESS EVENTS THAT OCCURRED TO MAKE SURE THAT THAT'S ACTUALLY A STRUCTURE THAT YOU WANNA MAINTAIN MOVING FORWARD.
UM, THE IMPORTANT PART HERE, THERE'S GENERAL GUIDANCE IN WHAT'S CONSIDERED A DIRECT COST, INDIRECT COST, RIGHT? BUT IT'S, IF YOU THINK ABOUT IT, IT JUST SAYS, IF YOU'RE SUPPORTING A PROJECT DIRECTLY, THAT'S THE DIRECT COST AND INDIRECT COST ARE THINGS THAT BENEFIT THE ORGANIZATION.
I THINK JUST TO KEEP IN MIND, THAT'S VERY VAGUE.
IT'S VERY HIGH LEVEL, IT'S VERY VAGUE.
I THINK JUST BEING ABLE TO THINK ABOUT IT IN THE SENSE THAT, YOU KNOW, YOU CAN, YOU CAN, YOU CAN RECORD TIME OR RECORD PARTS OF YOUR MATERIALS OR REALLY ANYTHING AS A DIRECT COST, BUT JUST MAKING SURE THAT YOU ALLOCATE THAT CONSISTENTLY OR RECORD THAT CONSISTENTLY.
THEN ALSO JUST THE TRADE OFF OF ADMINISTRATIVE BURDEN, RIGHT? SO IF YOU'RE THINKING ABOUT, UH, I THINK JOHN MADE AN EXAMPLE OF A CEO WORKING ON A DIRECT PROJECT, LIKE THEY COULD SPEND AN HOUR OF THEIR TIME WORKING ON A DIRECT PROJECT, BUT WHAT, WHAT'S, YOU KNOW, WHAT'S THE ADMINISTRATIVE BURDEN OF MAINTAINING THAT AND HAVING THAT INDIVIDUAL, YOU KNOW, MAINTAIN TIME SHEETS, FOR EXAMPLE, ON A REGULAR BASIS.
UM, SO WE'RE OUTLINING THE INDIRECT COST POOLS AND THE ALLOCATION BASIS HERE, BUT I THINK JUST GOING BACK ON THE WHOLE THEME OF, UH, CAUSE AND BENEFICIAL RELATIONSHIP.
SO INDIRECT COST POOLS SHOULD BE IN LOGICAL COST GROUPING.
SO AGAIN, FOR A SMALLER BUSINESS, YOU'RE LITERALLY GONNA SEE ONE OR TWO, TWO POLES.
SO YOU COMMONLY SEE A OVERHEAD POOL, A FRENCH POOL, AND POTENTIALLY A G AND A POOL, REALLY A VERY SIMPLE STRUCTURE.
WHEREAS IF THERE ARE MULTIPLE BUSINESS UNITS OR MULTIPLE LOCATIONS, SO SAY FOR EXAMPLE, YOUR BUSINESS HAS A, AN AUSTIN, AUSTIN FS, A DALLAS OFFICE, FOR EXAMPLE, THOSE MAY HAVE SEPARATE OVERHEAD RATES.
YOU MIGHT HAVE A AUSTIN OVERHEAD RATE AND A DALLAS OVERHEAD RATE.
THAT'S A GOOD EXAMPLE BECAUSE THE, WE'RE CALLING LAW SCHOOL GROUPINGS.
THERE'S, THERE MAY BE OVERSIGHT FUNCTIONS OR FACILITY COSTS THAT ARE SPECIFIC TO THAT LOCATION, WHEREAS IF YOU HAVE ONE LOCATION, IT MIGHT ONLY MAKE SENSE STUFF.
WHAT I RIGHT, UM, THINK THIS IS REPETITIVE, I GUESS THE GOOD THING HERE, YEAH, SOME EXAMPLES HERE AS IT RELATES TO BENEFIT.
SO WE'LL GO THROUGH SOME EXAMPLES OF OVERHEAD RATES OR INDIRECT RATES.
SO FRINGE BENEFITS IS A COMMON POOL.
SO IT'S, YOU'LL SEE PEOPLE'S BENEFITS, COSTS, OR EVEN NON-WORK TIMES LIKE PTO, VACATION, HOLIDAY, BEING ABLE TO INCLUDE THAT, THOSE COSTS AS WELL AS ANY BENEFITS COSTS, AND ALLOCATE THAT OVER TOTAL LABOR.
SO BASICALLY EVERY LABOR RECEIVE A, CALL IT 20 OR 30% BURDEN BASED ON THAT KINDA NUMERATOR DENOMINATOR CALCULATION.
UM, OVERHEAD POOLS ARE TYPICALLY RELATED TO THINGS THAT SUPPORT PROJECTS.
SO IF PROJECTS DON'T EXIST, THESE OVERHEAD COSTS WOULDN'T EXIST, RIGHT? THINK ABOUT AS PROJECT SPECIFIC INDIRECT COSTS OR PROJECT MANAGEMENT COSTS, AND THAT'S TYPICALLY DONE.
UM, AND THEN G AND A POOLS, UM, THOSE ARE TYPICALLY THINGS OF LIKE COST OF DOING BUSINESS.
SO EVEN IF YOU DIDN'T HAVE PROJECTS, YOU SORT OF NEED, YOU KNOW, COST OF SUPPORTING EMPLOYEES COSTS OF RUNNING THE BUSINESS.
THAT'S TYPICALLY WHAT'S CAPTURING UNDER THERE.
SO EVEN IF PROJECTS DON'T EXIST, THERE'S STILL THOSE COSTS THAT, UH, NEED, NEED TO BE INCURRED TO RUN THE BUSINESS.
UM, THIS, YOU, YOU'LL LIKELY NOT GO THROUGH THIS MUCH AT ALL, BUT THERE'S ALSO WASTE INTERMEDIATE COST POOL.
SO THINK ABOUT, SEE WE'RE TALKING ABOUT CAUSE OF BENEFICIAL RELATIONSHIPS.
IT COSTS HR COSTS, THEY BENEFIT BOTH EXECUTIVES AS WELL AS DIRECT PROJECT EMPLOYEES.
SO HOW DO YOU ALLOCATE THAT? THERE'S LICENSE SUCH AS HEADCOUNTS, BASICALLY WHAT WE CALL IT INTERMEDIATE.
IT'S ACTUALLY ALLOCATING BETWEEN THE INDIRECT COST POOLS WHERE IT'S, YOU'RE SAYING BASED ON HEADCOUNT, WE'RE ACTUALLY GONNA ALLOCATE, THERE'S ANOTHER ALLOCATION COMING INTO THE ALLOCATION ALLOCATION POOL.
SO G AND A IS RECEIVING AN ALLOCATION OF IT OR HR.
SO WITH OVERHEAD RATES AND BEING ABLE TO SPREAD THOSE COSTS BASED ON THE HEADCOUNT OF WHERE THE INDIVIDUAL SIT, AGAIN, THIS IS PROBABLY NOT SOMETHING THAT YOU LIKELY WILL NEED TO NEED TO DO OR YOU MAY DO, BUT THIS IS AN OPTION TO FURTHER RECOVER COSTS OR TO BETTER ALLOCATE COSTS BASED ON KIND OF GOING BACK TO COMPETITIVE PERSPECTIVE OR HOW TO RECOVER MORE COSTS.
THERE'S ANOTHER METHODOLOGY TO RECOVER MORE COSTS IN A LOT MANNER.
[00:40:01]
I KNOW JOHN WENT IN DEPTH WITH THE ACCOUNTING UNRELIABLE COSTS, SO DO WANNA JUST ADD A HIGH LEVEL POINT BACK TO HOW TO ACCOUNT FOR THEM OVERALL.SO IN DEPENDENCIES FOR THESE SLIDES, THERE ARE SOME PRESCRIPTIVE GUIDANCE ON HOW TO KIND OF TREAT SPECIFIC COSTS OF, UH, COST ELEMENTS.
BUT TO YOUR POINT OF REFERENCE, THE BEST WAY TO ACCOUNT FOR RELIABLE COSTS AND SEGREGATE THEM IS TO, AT THE POINT OF ENTRY, RIGHT? SO YOU, AS YOUR RECORDING COSTS SAYING, IS THIS RELIABLE? CREATE UNRELIABLE ACCOUNTS OR PROJECTS AND JUST EXCLUDE THAT FROM YOUR BILLINGS.
THAT INCLUDES YOUR DIRECT INVOICE, YOUR INVOICES TO INVOICES TO YOUR CUSTOMERS OVERALL, BUT ALSO WHEN YOU'RE CALCULATING INDIRECT RATES, EXCLUDING THEM FOR YOUR RECALCULATIONS FROM YOUR NUMERATOR.
UM, THERE ARE ALSO WAYS TO, WE CALL STATISTICALLY SAMPLE.
SO THERE, THERE ARE THINGS, THERE ARE METHODOLOGIES, THE REGULATIONS ACTUALLY HERE WERE, UM, ESTABLISHING STATISTICAL SAMPLING.
SO YOU BASICALLY PULL SAMPLE TESTING.
UM, I THINK JUST ONE, DEVELOPING YOUR INTRODUCTORY STRUCTURE TO MATCH YOUR, HOW YOUR BUSINESS IS SET UP, UM, AND THEN ALSO MAKING SURE THAT ALLOCATION BASE ARE TRULY WHAT'S BENEFITING FROM, UH, THE ALLOCATION POOL ITSELF.
SO I THINK THERE ARE, UH, FALSE CLAIMS AS SUITS THAT HAVE RECENTLY COME UP THROUGH COMPANIES THAT THEY'VE GOTTEN DINGED OR THROUGH AUDITS AND OR, UM, LAWSUITS AS IT RELATES TO PEOPLE, YOU KNOW, INCLUDING THINGS IN THE ALLOCATION BASIS OR ALLOCATION POOLS THAT REALLY JUST DON'T BENEFIT, RIGHT? SO LIKE THINGS IN THE ALLOCATION POOL THAT DON'T BENEFIT THE BASIS, AND ULTIMATELY THEY'RE, THEY'RE, THEY'RE CLAIMING THAT IT'S AN OVERCHARGED, SO THERE'S THINGS THAT DO POP UP.
SO BEING CAREFUL WITH THOSE, UH, ITEMS ARE IMPORTANT JUST AS RELATES TO, UH, FROM A COMPLIANCE PERSPECTIVE.
UM, AND THEN JUST CONSIDERING SOME OF THESE ITEMS, I THINK WE TALKED ABOUT, UH, THE BALANCING THE COST RECOVERY, BUT ALSO COMPETITIVENESS AND THEN LEVERAGING INTERMEDIATE ALLOCATIONS UNNECESSARY.
UM, SO DO HAVE SOME OPTIONS HERE.
SO THIS IS ACTUALLY FROM THE ASTO AUDIT HEAD, UH, AUDIT ACCOUNTING GUIDE, WHICH WE'LL GO THROUGH A LITTLE BIT MORE AFTER WE DECIDE, BUT THIS IS AN EXAMPLE OF A INDIRECT RATE STRUCTURE.
SO ALL THE INDIRECT RATES DO NEED TO BE CALCULATED THROUGH THE BOOKS OF RECORDS.
SO THINKING ABOUT YOUR ACCOUNTING RECORDS, RIGHT? SO THE EASIEST WAY POTENTIALLY CALCULATE INTERIM OR CALL PROVISIONAL RATES COULD BE USING YOUR LAST YEAR'S DATA AND BEING ABLE TO CALCULATE NU DENOMINATOR FOR YOUR RATES.
UM, THIS THE SIMPLEST WAY OF CALCULATING IT.
SO THERE'S AN OVERHEAD RATE RATE AND UM, IT IS A COMPANY WIDE COST THAT'S HERE AS AN EXAMPLE, UM, A SECOND EXAMPLE HERE, WHICH I MEAN, IT'S STILL A VERY SIMPLE STRUCTURE, BUT ALMOST LOOKING AT IT FROM A SENSE OF YOUR HOME OFFICE, YOUR HOME OFFICE AS WELL AS A FIELD OFFICE.
UM, AND REALLY JUST COMES DOWN TO, YOU KNOW, GOING BACK TO THE MULTIPLE, RIGHT? LOOKING AT HOME OFFICE, INDIRECT COSTS OF LET'S LOOK AT WHAT'S IN, WHAT THE LABOR INCURRED IN YOUR HOME OFFICE, SO YOU KNOW, UH, IN YOUR POOL.
SO SUPPORT FUNCTIONS THERE WITH THE DIRECT LABOR BASE OF THE DIRECT PEOPLE SUPPORTING THE PROJECT DIRECTLY.
AND THEN IF YOU HAVE THE, YOU KNOW, USING THE DALLAS DALLAS OFFICE EXAMPLE, IF YOU HAVE PEOPLE WORKING IN THE DALLAS OFFICE, THE INDIRECT SUPPORT FUNCTIONS THERE.
AND THEN THE ALLOCATION BASE IS DIRECTLY BEFORE US WORKING ON THE PROJECT THERE.
SO JUST SOME EXAMPLES OF MULTIPLE OVERHEAD RATES.
THERE IS A KIND OF A, IT'S A LITTLE BIT HARD TO SEE IN THE SCREEN HERE, BUT THERE IS A CALL FOR ANY ADJUSTMENTS FOR AN ALLOWABLE COSTS.
SO THEY COULD BE THROUGH ACCOUNTS, IT COULD BE THROUGH THE STATISTICAL STANDPOINT, BUT BEING ABLE TO IDENTIFY AND SEGREGATE THESE UNLOVABLE COSTS.
YEAH, AND YOU INCLUDE THESE IN YOUR NOTES, YOUR SCHEDULE, YOU, THESE NOTES DOWN WILL BE ON PROBABLY A SEPARATE PAGE AND LIKE, YOU NEED TO MAKE SURE REFERENC CORRECT CONTRACTORS GET IN TROUBLE WHEN THEY'RE BILLING IN TERMS OF THEIR REPORTING PROCESS.
THESE, THESE REFERENCES HERE, MAYBE LINE WITH ACTUAL, SO LAST RECENTLY, SO, OKAY, I'LL PASS ON JOHN.
UH, SO WE'LL TALK ABOUT, THERE'S LIKE A, BASICALLY A CONTINUUM HERE.
UM, YEAH, I MEAN, YOU'RE SUBJECT TO CIVIL ADMINISTRATIVE AND CRIMINAL NON-COMPLIANCE RISK.
WHEN YOU'RE BUILDING A, WHEN YOU'RE CERTIFYING THAT YOUR RATES ARE, UH, FREE OF THE, UH, UN LIABLE COST AND, AND BUILDING THAT AUDITED PROOF RATE, THE LOWEST PIECES YOU GET AN ADVERSE AUDIT, GOVERNMENT AUDIT INVESTIGATION FINDING.
UM, AS WE GO DOWN, YOU CAN GET DISAPPROVED COST
[00:45:01]
PAYMENT WITHHOLDS, UH, AS I MENTIONED EARLIER, CAN BE TROUBLED DAMAGE, TROUBLED PENALTIES.UM, YOU CAN HAVE CONTRACT TERMINATION, UH, AS WELL AS, YOU KNOW, JUST HAVING YOUR NAME IN THE, IN, UH, IN THE NEWSPAPER OR, OR WORD GETS AROUND YOU JUST CAN HURT REPUTATIONAL HARM IF, IF YOUR RATES AREN'T, UM, IF THERE'S ANY, UH, NON-INTENTIONAL, UH, NON-COMPLIANCE WITH THE, UH, WITH FAR PART 31.
AND THEN ONCE YOU GET STARTS GOING DOWN HERE, THE DISBARMENT INABILITY TO WIN FUTURE WORK.
AND THEN THE VERY BOTTOM IS REALLY THAT, UH, CRIMINAL, INCLUDING IMPRISONMENT FOR WHICH IS THE PRIMARY, UH, ENFORCEMENT TOOL FOR THIS.
AT THE VERY BOTTOM IS REALLY THE FALSE CLAIMS ACT.
SO THAT'S THE PRIMARY TOOL THAT USED TO KIND OF GET, UH, CONTRACTORS FOR THAT, WHAT I CALL FRAUDULENT INTENTIONAL MISREPRESENTATION, UM, AND MAKING FALSE STATEMENTS.
SO YEAH, SO LIKE GETTING IN THIS ENVIRONMENT IS, IS GREAT, UH, FOR THE BUSINESS, BUT THERE'S ALSO COMES THAT, YOU KNOW, THAT WITH RISK AS WELL.
AND THE FALSE CLAIMS ACT, I MENTIONED THAT'S ONE OF THE MOST IMPACTFUL ENFORCEMENT TOOLS AROUND THE INTENTIONAL ACTS OF FRAUD, WASTE, AND ABUSE.
UH, MANY STATES HAVE THEIR OWN FCA LAWS.
UM, I GUESS THE, SOME OF THE ONES THAT WE'VE SEEN RECENTLY THAT THEY'VE PUBLISHED THESE AREAS, THEY'VE BEEN FOCUSED A LOT LATELY ON, UM, THE PANDEMIC RELIEF FRAUD THAT'S BEEN GOING OUT.
'CAUSE ALL THAT MONEY WAS JUST FLOODED OUT.
SO I GUESS A LOT OF CONTRACTORS ARE GETTING IN TROUBLE FOR THAT.
UM, UH, SOME ARE GETTING, WE SEE OTHER THINGS AROUND BED RIGGING BETWEEN COMPANIES.
THERE'S ALSO SOMETHING THAT CAME OUT WITH THE, THE, WE CALL THE KEY TIME PROVISIONS OF THE FALSE CLAIM BACK WHERE YOU HAVE WHISTLEBLOWERS THAT'LL GET A, YOU KNOW, A PIECE OF THE SETTLEMENT.
AND THAT WAS IN ONE OF THOSE S WHERE THEY HAD RELATED THEIR RATE STRUCTURE AND THEY GOT IN TROUBLE FOR THAT.
SO I MEAN, THERE'S, UM, THE RISK THERE AND I THINK HAVING A, THE PEOPLE PROCESSES AND SYSTEMS IN PLACE TO ADDRESS THOSE RISK LINE COMPLIANCE IS WHAT'S KEY.
UM, YOU'RE BUILDING THOSE RATES.
ALRIGHT, NAVIGATING THE OVERHEAD AUDIT PROCESS.
SO TALKING ABOUT THE ATOS, THIS IS THE, BASICALLY THE, IN EARLY TWO THOUSANDS, THERE WAS THE, THE STATES JUST HAD ALL KINDS OF, THE STATE DETS HAD ALL KINDS OF DIFFERENT REGULATIONS.
THEY WANTED TO UNIFORM GUIDANCE.
THEY BUILT THIS UNIFORM GUIDANCE WITH THE HELP OF THE AASHTO, UM, TRANSPORTATION ASSOCIATION.
AND REALLY THEY, THEY PUT TOGETHER A GUIDE THAT HELPS THE, UH, THE AUDITORS AS WELL AS THE CONTRACTORS HAVE A, A STREAMLINED SET OF PARAMETERS OF HOW WE'RE GONNA BE AUDITING, WHAT, UM, WHAT WE'RE UPHELD TO IN TERMS OF OUR POLICIES, PROCEDURES, AND TECHNIQUES AND SOURCES FOR POLITICAL REQUIREMENTS, INCLUDING THOSE AROUND FAR.
PART 31, THE CAUSE PRINCIPLES.
UM, THE GUY WAS ACTUALLY UPDATED IN MARCH OF 24 AFTER EIGHT YEARS, AND THAT WAS REALLY AROUND A LOT OF THE GUIDANCE IN THE 2024, UH,
SO IT WAS REALLY AROUND MAKING SURE THAT COMPANIES HAVE A RISK ASSESSMENT PROCESS AT THE FINANCIAL STATEMENT ASSERTION LEVEL.
I MEAN, WHAT THAT MEANS FOR OVERHEAD AUDITS IS REALLY THE, THE, THE ASSERTION THAT'S REALLY IN PLAY IS THAT YOU HAVE YOUR FINANCIAL STATEMENTS, BUT THEN YOU HAVE YOUR AUDITED TRIAL BALANCE.
THEN DO YOU, UM, DO YOU ACCOUNT FOR YOUR UN LIABLE COSTS? IT'S ALMOST THAT LIKE SUPPLEMENTAL PROCESS THAT'S, YOU KNOW, HAPPENS AFTER YOUR AUDIT FINANCIAL STATEMENT.
IT'S REALLY AROUND CLASSIFICATION RISK.
SO THAT'S SORT OF THE REALLY HAVING THOSE ROBUST RISK ASSESSMENT PROCEDURES INTERNALLY, WHICH MEANS, UM, YOU KNOW, DOING TREND ANALYSIS OF ALL YOUR ACCOUNTS.
JUST SEE LIKE HOW YOUR, ARE YOUR TRAVEL INCREASING OR DECREASING? DOES IT MAKE SENSE? DO THE NUMBER OF ACCOUNTS MAKE SENSE? IS THERE ANY LIKE JUST ANOMALIES AT THE FRONT END TO SORT OF PREVENT YOU FROM, YOU KNOW, CATCHING SOME OF THOSE PROCESSES THAT MAYBE AT RISK THAT YOU DON'T UNDERSTAND IN THE BEGINNING.
UM, AND THEN THE, THE GUIDE CANNOT SUPERSEDE IT FAR ANY RELATED LAWS OR REGULATIONS.
UM, IT'S NOT REQUIRED BY FEDERAL LAW, BUT OUR ADDITIONAL STATE DOT QUESTIONING MAY OCCUR IF THE, IF THE FIRM IS NOT FOLLOWING THE AASHTO GUIDE.
SO IT'S, I MEAN, I'VE BEEN ON A FEW OF THESE, UH, OVERHEAD AUDITS WHERE THE, THE COGNIZANT AUDIT AGENCY FROM THE DEPARTMENT OF TRANSPORTATION COMES IN AND ONE OF THE THINGS THEY WANT IS THEY WANT THE, THE CPA WORK PROGRAM, WHICH IS REALLY LIKE THIS THING THAT'S PUBLISHED ON ASTO WEBSITE THAT REALLY JUST, IT'S BASICALLY AN AUDIT PROGRAM MATRIX OF ALL THE DIFFERENT COMPETENCIES YOU HAVE TO MEET FROM LABOR CHARGING, UH, TO EXECUTIVE CONTENT, HOW YOU ACCOUNT FOR YOUR, UM, UN ALLOWABLE COSTS.
AND YOU BASICALLY JUST SHOW WHERE THAT IS IN YOUR WORK PAPER METHODOLOGY FOR AUDIT.
SO WHEN THEY COME IN AND REVIEW OUR WORK PAPERS, WE'RE BASICALLY UPHELD TO THAT ASTO STANDARD.
SO IT BASICALLY KIND OF REINFORCES THAT THE, THE AUDIT COMMUNITIES REALLY FOCUSED ON MAKING SURE THAT IT'S COMPLIANT WITH ASH TASTE'S GUIDE.
[00:50:01]
UM, SOME OF THE THINGS THEY LOOK INTO IS LABOR CHARGING PRACTICES.UM, WE'VE HAD QUESTIONS ON OUR AUDIT AROUND LIKE, WHY DID WE, WHY DID WE SAMPLE MORE, UH, LABOR TIME SHEETS THIS YEAR? WELL, THE ANSWER WAS, WELL, 'CAUSE THE, THE COMPANY, YOU KNOW, CHANGED THEIR POLICY.
SO WE HAD TO INCREASE OUR SAMPLE SIZE ABOVE THE MINIMUM OF 27 SAMPLES.
WE INCREASED IT TO GETTING SAMPLES ACROSS THE WHOLE YEAR.
SO WE, WE EXTEND OUR EXTENT OF OUR TIME, OF OUR SAMPLE SELECTION AND MAKING SURE THAT, UM, I THINK THAT'S WHAT HAPPENS IN THE AUDIT END, BUT ON YOUR END, YOU KNOW, MAKING SURE THAT, THAT ANYTIME YOU HAVE POLICY AND PROCEDURE UPDATES, THAT THAT'S BEING IMPLEMENTED AND OPERATIONALIZED, UH, AND MONITORED ACCORDINGLY.
SO, UH, FROM THE CONTRACTOR'S POINT OF VIEW, LABOR CHARGING IS REALLY LIKE MAKING SURE THE RULES SAY AROUND YOU SHOULD HAVE DAILY SUBMITTAL OF TIME SHEETS, UH, SEGREGATION VIEWS AROUND THE APPROVER OR, AND, UH, AND REVIEWER.
UM, I THINK AT YOUR PERSPECTIVE, YOU MAY HAVE AUTOMATED TIMEKEEPING SYSTEMS, YOU MAY HAVE MANUAL TIMEKEEPING SYSTEMS. SO I THINK THAT'S ONE OF THE KEY AREAS THEY LOOK INTO THE COST ACCUMULATION REPORTING PROCESS.
SO LIKE BUILDING THAT SCHEDULE, HE MENTIONED ON THE OTHER PAGE AND THE FORMAT AND THE DISCLOSURE.
SO THERE'S A, A SECTION ON LIKE WHAT DISCLOSURES YOU NORMALLY YOU NORMALLY WOULD REPRESENT THAT WOULD GO BEHIND THE ACTUAL SCHEDULE HE SHOWED ON THE SCREEN EARLIER.
UM, AND THOSE TYPES OF DISCLOSURES.
ALRIGHT, SO THIS IS LIKE A TIMELINE EVENTS.
IF I'M GONNA GO OUT TO, TO BID FOR A, AN AUDITOR TO HELP, UM, BASICALLY STAMP MY, MY RATES FOR APPROVAL, I MEAN IT, I'LL GO THROUGH THESE QUICKLY.
IT'S REALLY, UM, ENGAGING THE INDEPENDENT FIRM TO AUDIT YOUR SCHEDULE OF INDIRECT RATES.
UM, THE CONTRACTOR HAVING AN IN, UH, UH, ENTRANCE MEETING, UM, WE'LL, AUDITOR WILL COME IN AND PERFORM RISK RISK ASSESSMENT PROCEDURES.
BASICALLY, THEY'LL COME IN, THEY'LL, YOUR STANDARD AUDIT, THEY'LL ASK FOR, YOU KNOW, UM, THEY'LL DO MANAGEMENT INQUIRIES.
THEY'LL ASK FOR, YOU KNOW, THE YEAR OVER YEAR DIFFERENCES IN YOUR ACCOUNTS.
UM, ANY INTERNAL AUDIT REPORTS YOU HAVE, ANY EXTERNAL PROJECT BASED AUDIT YOU HAVE.
UH, AND THEN THEY'LL, THEY'LL CONDUCT PROCEDURES TO DESIGN TO BASICALLY ADDRESS THE RISK OF MATERIAL MISSTATEMENT RELATED AND NONCOMPLIANCE RELATED TO FAR PART 31.
SO LIKE, THERE'S, THERE'S REALLY TWO OBJECTIVES IN AN ASH TO AUDIT, WHICH IS WHAT YOUR AUDITORS WILL COME IN AND AUDIT FOR.
THEY'LL PRODUCE AN OPINION ON YOUR INDIRECT RATE SCHEDULES AND THEY'LL PRODUCE A REPORT ON YOUR INTERNAL CONTROLS AND COMPLIANCE.
THEY'RE NOT ACTUALLY, THEY'RE NOT, THEY'RE NOT ACTUALLY GOING IN AND DOING AN OPINION ON YOUR, UM, ON YOUR, UH, EFFECTIVE INTERNAL CONTROL.
IT'S NOT THAT, IT'S JUST YOUR REPORT ON INTERNAL CONTROLS AND COMPLIANCE.
SO, UM, THERE'S CERTAIN, YOU KNOW, MOST COMPANIES HAVE A, A, AN EXTRA INTERNAL CONTROL.
THEY HAVE SEPARATE FROM THEIR OTHER, THEIR FINANCIAL REPORTING PROCESS.
THEY HAVE AN ACCOUNTING FOR UN ALLOWABLE COST PROCESS.
SO LIKE A FULL PROCESS PROCEDURE, A POLICY, UM, THOSE INDIVIDUALS THAT ARE, ARE ROLES AND RESPONSIBILITIES TO PERFORM THAT SORT OF, UM, THOSE DUTIES.
THAT'S LIKE A, AN EXTRA LIKE THAT RELATES TO THE INTERNAL CONTROL OF OUR COMPLIANCE PERSPECTIVE.
UM, AND THEN WE'LL ISSUE THE AUDIT OPINION AND THE REPORT ON INTERNAL CONTROL OVER COMPLIANT OVER COMPLIANCE, REPORTING COMPLIANCE AND OTHER MATTERS.
AND THEN ONCE THAT, UH, ONCE THAT REPORT'S ISSUED, UM, AND THE OPINIONS DELIVERED, UM, UH, THE CONTRACTOR CAN USE THOSE AUDITED RATES FOR IMPOSING ON ITS WORK WITH A TP.
SO THAT'S SORT OF WHAT A TP IS LOOKING FOR, IS HAVING THAT AUDIT REPORT, THAT OPINION THAT SUPPORTS YOUR OVERHEAD RATE THAT YOU'RE GONNA PROPOSE.
UH, SOME QUESTIONS THAT MAY ARISE.
I SAY, I THINK I SORT OF GOT THESE EARLIER, BUT YEAH, TREND ANALYSIS AND EXPLANATION OF SIGNIFICANT VARIANCES.
UM, IT JUST TYPICAL AUDIT PROCESS.
WHY DID YOUR PAYROLL GO UP BY THIS AMOUNT? UM, WELL WE CAME OUT OF THE PANDEMIC.
REALLY, IF OUR BUSINESS IS IMPROVING, PEOPLE ARE TRAVELING.
AGAIN, THAT'S, UM, WE HAVE TO, THERE'S FRAUD AND MANAGEMENT INQUIRIES, UH, MENTIONED PROCESS LEVEL QUESTIONS RELATED TO PAYROLL.
UM, HOW DO YOU, UH, DISTRIBUTE YOUR LABOR? HOW DO YOU COST YOUR LABOR? WHAT ARE THE SYSTEMS INVOLVED? IS IT MANUAL OR AUTOMATED TIMEKEEPING, UM, THE DISTRIBUTION OF YOUR LABOR AND THEN OF COURSE ACCOUNTING FOR ALLOWABLE COSTS.
WHAT REALLY THE, THE KEY HERE IS MAKING SURE THAT YOU HAVE THOSE, WHAT ARE YOUR HIGH RISK PROCESSES THAT YOU HAVE IN CHARGE THAT YOU'RE LOOKING AT? SPECIFIC ACCOUNTS YOU IDENTIFIED IS MAYBE CONTAINING UNALLOWABLE COSTS AFTER THE RECORDING OF THEM.
SO IT'S SOMETHING THAT YOU DON'T CATCH AT THE ENTRY OF THE RECORDING OR MAYBE YOU DO AND IT'S SOMETHING YOU IDENTIFIES HIGH RISK, BUT THOSE ARE AREAS, UM, THE TRANSACTION TESTING AROUND ALLOWABILITY APPLICABILITY AND REASONABLENESS AROUND TRAVEL.
UM, RELOCATION COSTS, I MEAN, WE SEE THAT THIS IS A SEPARATE SECTION WHERE COMPANIES HAVE THEIR OWN PROCESS AND RELOCATION BECAUSE, I DUNNO IF IT RELATES TO YOU GUYS, BUT THEY HAVE, YOU LEAVE A CERTAIN, YOU LEAVE AFTER A CERTAIN PERIOD OF TIME, YOU DON'T LEAVE WITHIN 12 MONTHS.
AND THERE'S A COST ARE IF YOU DON'T, IF YOU LEAVE WITHIN 12 MONTHS AFTER GETTING THAT REIMBURSEMENT FOR YOUR LOCATION, THEN YOU'RE, THERE'S A COSTS UN ALLOWABLE.
UM, SO MOST COMPANIES HAVE A PROCESS FOR CATCHING
[00:55:01]
THOSE RELOCATION COSTS.SOME COMPANIES HAVE THIRD PARTY VENDORS THAT, UM, DO THAT WORK FOR THEM.
SO MOST COMPANIES HAVE A SEPARATE SCHEDULE FOR BUILDING THIS, THIS UP.
LIKE, AND IT'S REALLY RELATED TO ALL THE COMPENSATION ELEMENTS THAT, UM, NOT JUST YOUR EXECUTIVES.
IT USED TO BE JUST YOUR EXECUTIVES, BUT NOW IT'S ALL YOUR EMPLOYEES.
SO YOU REVIEW ALL YOUR EMPLOYEES, REALLY, IT'S GONNA BE PROBABLY FROM YOUR PERSPECTIVE, IT MIGHT BE JUST A FEW, BUT JUST MAKING SURE THEY'RE NOT EXCEEDING THE, UM, THE 6 46, 640 6,000 AMOUNT.
UM, AND THEN WE'VE ALSO SEEN ONE OF THE KEY THINGS IN AASHTO IS THAT THE REASONABLENESS PERSPECTIVE FOR EXECUTIVE COMPENSATION IS YOU WANNA GO IN AND HAVE YOUR, UM, DO A SURVEY OF, LIKE COMPANIES, BECAUSE SOMETIMES THAT SURVEY WILL COME BACK WITH, UH, COMPENSATION LIMITS THAT ARE LESS THAN 6 46.
SO WE'VE SEEN COMPANIES THAT THEY GOT DEEMED MAYBE ONE YEAR THEY HAD TO EXPLAIN IT TOO MUCH TO AASHTO AROUND THEIR EXECUTIVE COMP.
SO THEY DO HAVE FULL BLOWN, UH, BASICALLY THEY USE A SURVEY BENCHMARK DATA BASED ON RE UH, RELATABLE COMPANIES.
AND THAT, THAT THEY USE THAT TO DETERMINE WHAT THEIR, UM, EXECUTIVE COMP LIMITATION SHOULD BE, WHICH MAY BE LOWER THAN THE 6 46.
UM, AND ANYTIME YOU HAVE EXTRAORDINARY SIGNIFICANT EVENTS, I THINK ONE TIME I'VE SEEN WHERE THERE WAS A NETWORK OUTAGE, UM, AND ATOS, OR NOT, I'M SORRY, THE, THE, THE COGNIZANT D-O-T-H-D CAME TO US AND THEY SAID, WELL, IS THIS, IS THIS RELATED TO, UH, CYBERSECURITY? LIKE CYBERSECURITY'S A BIG THING RIGHT NOW AROUND MAKING SURE COMPANIES THAT REPRESENT, THEY HAVE THE STANDARDS IN PLACE TO MEET NIST 801 71.
AND WE BASICALLY, WE HAD TO PHRASE IT THAT IT WASN'T A NETWORK, IT WASN'T A NETWORK BREACH, IT WAS JUST A NETWORK OR NETWORK OUTAGE BECAUSE THEY WERE CONCERNED THAT MAYBE THAT COMPANY DIDN'T HAVE THE RIGHT, UM, THEY WERE GETTING, THEY HAD TOO MANY, THEIR PERIMETER WAS GETTING DATED OR WHICH WOULD AFFECT THEIR, UM, THE, UH, CYBERSECURITY ON OTHER COMPANY.
SO THAT'S, UM, SEE, I GO TO THE HOW TO NAVIGATE THE AUDIT PROCESS.
SO, UM, I GUESS WHEN YOU HAVE YOUR CPA FIRM, JUST, YOU KNOW, ESTABLISH A PROFESSIONAL RAPPORT, RAPPORT, RAPPORT, UM, KEEP THAT RELATIONSHIP NON-AD AL THOSE STANDARD THINGS, YOU KNOW, MAKE SURE YOU HAVE DATA REQUEST IN WRITING.
UH, PROVIDE ACCESS TO YOUR, UH, IN ORGANIZING SYSTEMATIC MANNER.
UM, MAKE SURE YOU HAVE A, A POINT OF CONTACT THAT'S BASICALLY ON TAP TO COORDINATE THE RECEIPT AND, UM, SUBMITTAL OF ALL REQUESTS FOR YOUR COMPANY.
UM, OBTAIN COPIES OF INTERNAL PLANNING DOCUMENTS, YOU KNOW, MAKES ME SEEK TO, TO ESTABLISH JOINT AUDIT PLANNING AND RISK ASSESSMENTS.
SO LIKE, UNDERSTAND, YOU KIND OF UNDERSTAND THAT WHEN YOU START GETTING YOUR AUDITOR, WHAT THEY LOOK FOR IN TERMS OF THEIR RISK ASSESSMENTS.
SO MAYBE YOU COULD DO THOSE SIMILAR TYPES OF PROCEDURES IN PARALLEL TO MAKE SURE THAT THE PROCEDURES THAT THEY DEVELOP TO, TO RESPOND TO THOSE RISKS, YOU, YOU'VE CAPTURED THOSE IN YOUR PROCESSES.
UM, THEN HAVING THOSE MEETINGS AND AUDIT CONFERENCES AND ONGOING STATUSES ARE, ARE KEY.
SO I KNOW WE COVERED A LOT TODAY.
SO DID, DID WANNA SUMMARIZE KIND OF WHAT YOU COULD DO NOW, NEXT AND KIND AND BEYOND? RIGHT.
SO I, I THINK RIGHT NOW, JUST KNOWING THAT THERE ARE SOME, A LOT OF RULES, REGULATIONS THAT THEY'RE WRAPPING HEAD AROUND AWAY.
SO WHAT ARE THE DIFFERENT TYPES OF APPLICABLE REGULATIONS THEY NEED TO FOLLOW? SO THAT DOES FALL BETWEEN FOUR PART 31, BUT ALSO THE CONTROLS AROUND.
SO JOHN TALKS LOT ABOUT CONTROLS, RIGHT? CONTROLS AROUND FOLLOWING THE CAUSE OF, UH, PRINCIPLES AND AROUND, WE CALL IT, WITH ACCOUNTING SYSTEMS. SO BEING ABLE TO CAPTURE THOSE COSTS, THOSE COSTS, AND REALLY HAVE POLICY IN PLACE TO CONSISTENTLY FOLLOW AND ALSO HAVE THE ADEQUATE MEASURES TO, UH, SUPPORT AUDIT.
THINGS LIKE COMPENSATION, BEING ABLE TO HAVE COMPENSATION POLICY THAT REALLY TIES BACK TO SALARY SURVEYS OF, OF LIKE INDUSTRIES AND BEING ABLE TO SUPPORT THAT DURING HONEST, IF QUESTIONS DO COME UP, YOU'RE SAYING, WE DID THE PROPER DUE DILIGENCE, HERE'S WHY WE THINK IT'S AVAILABLE, RIGHT? BEING ABLE TO HAVE THAT PROACTIVELY WOULD HELP A LOT.
UM, AND THEN REALLY JUST WORKING WITH, I THINK YOUR CUSTOMERS OR YOUR PARTNERS.
SO WORKING WITH YOUR CUSTOMERS, IF THERE'S ANY QUESTIONS THAT HAVE REALLY WORKING WITH THE POINT PERSON ON YOUR SOLICITATION THAT YOU RESPOND TO OR YOUR EXISTING CUSTOMERS BEING ABLE TO GET THAT CLARIFICATION, LOOK AT THEM PROACTIVELY SO THEY'RE ON THE, ANY QUESTIONS.
I THINK PROACTIVELY WORKING WITH THE CUSTOMER TO GET THAT CLARIFICATION AND PREFER BILLING WRITING.
SO IF AS YOU HAVE ANY QUESTIONS, GETTING INTO WRITING AND HAVING THAT, MAINTAIN THAT SUPPORT SAYING, YOU KNOW, WHY'D YOU CLAIM IT WAS LIKE, WE HAD THIS CONVERSATION A MONTH AGO AND YOU SAID IT WAS OKAY.
SO HAVING THOSE CONVERSATIONS WILL BE VERY HEALTHY AS WELL.
UM, AS RELATES TO WHAT'S NEXT, I MEAN, I THINK BEING ABLE TO ASSIGN KNOWLEDGEABLE RESOURCES IS IMPORTANT.
SO YOU MAY HAVE, I THINK A LOT OF FOLKS IN THE AUDIENCE HAVE EXPERIENCE WITH, WITH, UH, OVERHEAD RATES.
SO BEING ABLE TO WORK WITH YOUR TEAM TO, SO MAKE SURE THEY HAVE THE GUIDANCE TO WORK WITH THEM.
UM, ALTERNA, YOU KNOW, WE, FIRMS AT EY ARE AVAILABLE TO SUPPORT.
UM, SO NOT SAYING IT'S LIMITED TO JUST UI BUT THERE ARE CONSULTING FIRMS OUT THERE THAT CAN HELP YOU AT LEAST
[01:00:01]
ESTABLISH THE PROCESS, ESTABLISH A STRUCTURE, AND EVEN HELP YOU WITH DEVELOPING POLICIES, PROCEDURES ON THE PROCESSES, AND THEN FOR YOU TO BASICALLY HAND OFF AND MOVE FORWARD MOVING FORWARD, RIGHT? SO ENABLING YOU TO DO BUSINESS WITH THE GOVERNMENT.UM, I, I THINK THIS RELATES TO THE RIGHT PROCESS ALL JUST UNDERSTANDING WHAT YOUR CURRENT BUSINESS IS, BUT ALSO WHAT'S MOVING FORWARD, RIGHT? SO, YOU KNOW, IT'S YOUR, YOUR BUSINESS MAY LOOK LIKE THIS NOW, BUT WHAT FORWARD LOOKING IS THIS A SUSTAINABLE MODEL MOVING FORWARD? SOMETHING TO CONSIDER JUST SO YOU DON'T HAVE TO GO THROUGH EXERCISES OF REESTABLISHING, INDIRECT COST RESTRUCTURES.
UM, AND THEN JUST AS IT RELATES TO BIDDING, I MEAN, I THINK AGAIN, JUST EMPHASIS ON JUST MAKING SURE THAT YOU HAVE THE APPROPRIATE SMRS IN PLACE, WHETHER IT'S INTERNAL, EXTERNAL.
I THINK THAT'S, THAT IS IMPORTANT BECAUSE THE LAST THING YOU WANNA DO IS REALLY GET CAUGHT BEING NONCOMPLIANT.
THERE'S A LOT OF RISKS DOING THAT.
AND ALSO IT COULD EVEN DISQUALIFY YOU FROM THE BID, RIGHT? SO KNOWING THAT THERE IS A LOT OF MONEY OUT THERE FOR EVERYONE TO WORK ON GOVERNMENT FUNDING, WHETHER IT'S, UH, YOU KNOW, ALL IT'S GONNA BE THROUGH SUB SUB SUBCONTRACTS, RIGHT? SO THAT BEING SAID, THERE'S, WE WANNA MAKE SURE THAT YOU'RE NOT DISQUALIFIED FROM DOING THAT.
I THINK THERE'S A LOT OF OPPORTUNITY OPPORTUNITIES OUT THERE FOR EVERYONE.
IT'S JUST A MATTER OF MAKING SURE THAT WE'RE COMING IN IN A COMPLIANT MANNER.
UM, I THINK FROM BEYOND, IF YOU'RE TO BE AWARDED, I THINK BEING ABLE TO ESTABLISH THESE CONTROLS.
SO ONE THING IS, IMMEDIATE THING IS GONNA BE ESTABLISHING THE RATES, HAVING, UH, ASSOCIATED CLIENT RATES TO BID WITH.
BUT THEN ALSO ONCE YOU START WORKING ON THE AWARD, HAVING THE POLICIES, PROCEDURES TO ACCOUNT FOR COSTS AND ALSO MONITORING, MAINTAIN THEM MOVING FORWARD.
UM, THAT IS GONNA ALSO INVOLVE JUST SUSTAINING ACROSS THESE AND ALSO HAVING ASSIGN SOMEONE THAT'S KNOWLEDGEABLE TO MAINTAIN THAT MOVING FORWARD.
SO SOMETHING TO CONSIDER AS, AS IT RELATES TO RESOURCES.
RESOURCES, I THINK FOR THIS TOO, SO YOU'RE DEVELOPING RATES, SO INCREMENTAL COSTS OF DOING BUSINESS WITH THE GOVERNMENT.
THAT COULD BE COMPLIANCE, IT COULD BE REPORTING, IT COULD BE OTHER ENGAGING AUDITORS.
I THINK WHAT I DEFINITELY RECOMMEND IS GOING THROUGH INVENTORY WITH THE ADDITIONAL COSTS THERE AND BUDGET OVERHEAD RATES, RIGHT? THAT'S GONNA BE THINGS THAT, ADDITIONAL COSTS THAT YOU AREN'T INCURRING NOW, BUT YOU MAY INCUR GOING FORWARD, BEING ABLE TO CAPTURE THAT AND USE THAT FOR BIDDING PURPOSES BECAUSE ULTIMATELY, UM, YOU, YOU'RE GONNA ABLE TO RECOVER AT LEAST PART OF THAT, PART OF THOSE COSTS.
UM, I THINK WE'RE AT TIME RIGHT NOW.
WE'LL BE AROUND FOR IF YOU GUYS HAVE ANY QUESTIONS.
WE DID, I THINK WE DID PROVIDE, EVERYONE HAS, UH, KINDA A HANDOUT THAT WE DID PROVIDE AS IT RELATES TO SOME HIGH LEVEL GUIDANCE.
BUT, UH, WITHIN THIS DECK, UM, THERE IS SOME DEPENDENCIES THAT ARE HELPFUL AS IT RELATES TO THE COST SCHOOLS AND OTHER OTHER MATTERS.
BUT YOU KNOW, IF THERE'S ANY QUESTIONS, I THINK THERE'S, OUR CONTACT INFORMATION IS, WELL, WAS IT THERE? YEAH.
UM, OUR CONTACT INFORMATION WITHIN, WITHIN THE, UH, HANDOUTS AS WELL AS UM, THE SLIDE DECK AS WELL.
I SAY ARE THERE QUESTIONS WE HAVE TIME FOR A COUPLE.
I KNOW YOU'RE ASKING QUESTIONS ALONG THE WAY, BUT ARE THERE QUESTIONS FOR THIS GROUP RIGHT NOW AS TO THAT WE CAN DO IT.
IMPRESSION IS CERTIFIED COME FROM C, THAT'S CORRECT.
SO IF COME FROM C, YOUR INFORMATION WOULD BE REALLY ABOUT ENGINE, CORRECT? CORRECT.
COMPANY CERTIFIED, CORRECT? CORRECT.
OH YEAH, I'VE DONE MANY OF THOSE, UM, AUDITS AND THAT'S OUR FIRM IS AUDIT ADVISOR AND TECH.
I MEAN OBVIOUSLY THERE'S SOME YEAH, YEAH.
YOU HAVE TO ENGAGE AN INDEPENDENT FIRM.
YEAH, YEAH, YEAH, YEAH, DEFINITELY.
ONE THING THAT WE'LL ADD IS THAT WHAT WE'RE LOOKING FOR IS, YOU KNOW, HOW DO WE BUILD RESOURCES SO THAT IT'S A LOT OF INFORMATION, RIGHT? AND IT'S A LOT OF MATERIAL THAT WE WE'RE TALKING TO YOU AND A LITTLE BIT AT YOU ABOUT.
SO HOW DO WE ACTUALLY SHARE THIS WITH YOU? HOW DO WE MAKE SURE THAT WHAT THE NEXT STEP YOU, YOU HAVE A LIST OF RESOURCES TO GO TO TO BE ABLE TO GET TO THIS STAGE.
AND SO THAT IS MY NEXT STEP TOO.
AND I'LL SAY I IN OF, IN CASE THERE ARE QUESTIONS ABOUT, UH, AT SPECIFIC, GO AHEAD.
SO WE DO A LOT OF PUBLIC WORK AND SOMETIMES, UH, FRUSTRATING NUMBER OF AGENCIES
[01:05:02]
OVERHEAD RATE.AND IF IT GOES UP, YOU'RE, SO IT'S A ONE.
SO MY, WE ALLOW ADJUSTMENTS UP AND DOWN, SUMMARIZE THE QUESTION ANSWER.
AND THE QUESTION IS, WILL A TEXT RATE BE STANDARD? SO RIGHT NOW WITH RATES, WE'RE LOOKING AT OVERHEAD RATES, AS YOU ALL KNOW, TECH.IS FHWA, WE ARE FTA, RIGHT? SO IT'S A LITTLE DIFFERENT.
HOWEVER, IF YOU HAVE A SAFE HARBOR RATE FROM TEXT DOC, WE WILL NOTE OUR FILES AND WE WILL ACCEPT THAT BECAUSE YOU'VE GONE THROUGH THAT WHOLE PROCESS AND THE INFORMATION YOU SUBMIT TO GET A SAFE HARBOR RATE IS A WHOLE LOT MORE INFORMATION THAN YOU WOULD GIVE YOUR CPA TO COME UP WITH AN AUDITED OVERHEAD RATE.
WE'LL TAKE IT IF YOU HAVE A SAFE HARBOR RATE AND YOU CAN SHOW US THAT DOCUMENTATION.
SO IT'S EITHER YOU HAVE A SAFE HARBOR ESTABLISHED RATE, OR MORE YOU AN AUDITED OVERHEAD RATEP.
SO I WON'T SAY AN AUDITED OVERHEAD RATE FOR A TP, RIGHT? AND SO THE RATES THAT WE ARE REQUESTING ARE IN CARD IS BE FAR PART 31.
SO, WHICH IS A REQUIREMENT BECAUSE WE ARE FEDERAL, UH, GRANT RECIPIENT.
SO WE'RE RECEIVING FEDERAL FUNDS.
SO IT'S NOT AN A TP AUDITED OVERHEAD RATE.
SO IF YOU HAVE AN AUDITED OVERHEAD RATE, WE WILL LOOK AT THAT AND WE WILL, UH, DO A GLANCE EDIT AND MAKE SURE THAT THERE'S NOTHING IN THERE THAT'S ON ALLOWABLE.
WE'LL LOOK AT YOUR HUNG RATES AND WE'LL LOOK AT YOUR FIELD RATES AND THEN WE'LL MORE THAN LIKELY SEND YOU A LETTER, SAY THIS IS ACCEPTABLE, WE CAN MOVE FORWARD.
BUT AS YOU KNOW, OVERHEAD RATES, AS A GENTLEMAN POINTED OUT EARLIER, THAT IS A YEARLY THING THAT YOU GO THROUGH.
ALRIGHT? IF THERE ARE MORE QUESTIONS, PEOPLE WILL BE HANGING OUT FOR A BIT.
BUT THANK YOU TO EY, THANK YOU VICKI, FOR STEPPING IN.
AND IF YOU ARE NOT A REGISTERED A TP VENDOR, THERE IS A SIGN IN THE LOBBY WITH A QR CODE ON IT.
SO PLEASE REGISTER IF YOU ARE NOT A VENDOR BECAUSE THAT'S THE WAY THAT YOU'LL RECEIVE COMMUNICATIONS WHEN WE HAVE EVENTS, WHEN WE HAVE SOLICITATIONS THAT GO OUT.
SO PLEASE MAKE SURE YOU'RE REGISTERED AS A VENDOR IF YOU ARE NOT.
ALRIGHT, Y'ALL, WE GOT FIVE MINUTES IN BETWEEN SESSIONS AND SO I ASK OF YOU IS MAKE ONE STAND UP, TAKE A BREAK, STRETCH A LITTLE BIT, HAVE A MOMENT AND RECOGNIZE WE'RE STARTING IN FIVE MINUTES.
ALRIGHT? ALRIGHT FRIENDS, WELCOME BACK TO THE ROOM.
I'M GONNA DO THIS LIKE I DO IN ELEMENTARY SCHOOL.
WHEN YOU SEE ME, RAISE YOUR HAND WHEN YOU SEE ME.
ALRIGHT, THIS, THIS IS WHAT WE DO IN FIFTH GRADE.
THIS MEANS QUIET GENTLEMEN IN THE BACK.
CAN YOU HEAR ME? CAN YOU ALL HEAR ME? DON'T ANYTHING.
CHLOE, CAN YOU HEAR ME IN THE BACK? YES.
OKAY, I'M GONNA, I CAN DO THIS WITHOUT A MIC TOO Y'ALL, BUT I WILL NOT.
ALRIGHT, WELCOME TO THE SECOND SESSION OF THE MORNING.
UH, I WANNA INTRODUCE TO YOU TWO AMAZING PEOPLE WHO I'VE WORKED WITH FOR A WHILE AND I HAVE MISSED THEM VERY MUCH FROM TXDOT, THAT'S
UH, WE HAVE MARTHA ARNOLD, WHO IS THE DBE SECTION DIRECTOR FOR TEXAS DEPARTMENT OF TRANSPORTATION.
SO SHE OVERSEES THE DBE PROGRAM FOR THE ENTIRE STATE.
AND JOE SANCHEZ, WHO IS A, UH, CERTIFICATION ANALYST FOR TECH, BOTH IN THE CIVIL RIGHTS DIVISION.
[01:10:01]
SO WELCOME THEM TODAY.THANK YOU COURTNEY, FOR HAVING US HERE.
AND THEN BEFORE I GO ON, UH, ON BEHALF OF OUR DIRECTOR MICHAEL BRYANT, AND THEN WE SAY, UH,
NOW THEN OUR SECTION DIRECTOR, OUR SECTION DIRECTOR MARTHA ARNOLD, AND OUR OUTREACH PERSON KATRINA PLUMMER FROM T OKAY.
AND WHAT I'M GONNA DISCUSS WITH YOU IS DBE PROGRAM AND UH, HOW YOU GET DBE CERTIFIED AND THEN SOME OF THE REQUIREMENTS AND THEN MARTHA'S GONNA COME IN AND THEN HIT A HOME RUN AFTER THAT.
UM, OKAY, SO WE START OFF WITH OUR REGULATION 49 CFR PART 26.
THAT'S WHAT GUIDES OUR PROGRAM, UH, FOLLOW OUR REGULATIONS WITH IT.
AND IT ALSO, THAT PROGRAM OVERSEES THE FEDERALLY FUNDED PART OF IT, UH, WHICH IS THE TRANSPORTATION, WHICH THE ENCOMPASSES THE HIGHWAYS, THE AIRPORTS, UH, THE BUS STATIONS, AND THEN ALSO THE CITIES AND THE COUNTIES.
IF THEY GET SOME FEDERAL FUNDING, THEN IT BECOMES THE DBE PROGRAM ALSO.
UH, THEN THE EXAMPLE OF THAT IS, YOU KNOW, THE CITY OF AUSTIN AND THEN TECH STOP, WE RECEIVE PUBLIC FUNDING.
AND SO THAT'S ALL ENCOMPASSES THE DBE PROGRAM.
OKAY? HEY, WHAT IS A DBE? OKAY.
UM, IS THERE ANY DBE FIRMS HERE? OKAY, VERY GOOD.
SO WHAT I'M GONNA DO IS GONNA TALK ABOUT HOW TO GET CERTIFIED AS A DBE, SO THOSE WHO AREN'T, AND THEN THOSE WHO ARE, WE'RE, I'M GONNA TALK ABOUT WHAT IS, HOW IMPORTANT IT IS TO CONTINUE YOUR CERTIFICATION, WHAT YOU NEED TO DO TO CONTINUE IT, THEN HOW TO, UH, EXPAND YOUR SERVICES.
OKAY? UH, OKAY TO GO ON WITH THAT.
THE FIRM MUST BE AT LEAST 51% OWNED BY SOCIALLY AND ECONOMICALLY DISADVANTAGED INDIVIDUAL OR PERSONS.
UH, THEN ONE THING THAT WAS, THAT'S VERY IMPORTANT TO US THAT WE ARE GONNA ASK, TALK ABOUT THROUGHOUT THE PRESENTATION IS THE, HOW THE COMPANY IS OPERATED.
WHO'S THE OWNER, UH, HOW IS THE OWNER, UH, DIRECT THE COMPANY.
SO WHAT WE'RE LOOKING FOR, THE OWNER, THE QUALIFYING ADVOCATE MUST MANAGE THE DAY-TO-DAY ACTIVITIES OF THE FIRM.
AND YOU'RE GONNA HEAR THAT THROUGHOUT MOST OF THE PRESENTATION 'CAUSE IT'S VERY IMPORTANT TO US AND THEN TO YOU TO GET YOUR CERTIFICATION, OKAY? THE OBJECTIVE, THE BEB PROGRAM, OKAY? TO ENSURE, ENSURE NON-DISCRIMINATION, WHICH IS VERY IMPORTANT AS WHAT WE DON'T WANT, UH, TO CREATE A LEVEL PLAYING FIELD, WHICH MEANS, YOU KNOW, YOU'RE, AS THE DBE RECEIVE THE INFORMATION YOU NEED TO COMPETE WITH ANYBODY ELSE FAIRLY EQUALLY, RIGHT? UH, ENSURE THE PROGRAM IS NARROWLY TAILORED, THAT IT'S UNDERSTANDABLE.
THE THE LAWS ARE EASY TO UNDERSTAND, RIGHT? NARROWLY TAILORED, RIGHT? UH, THAT TO ENSURE ONLY ELIGIBLE PERSONS OR ELIGIBLE INDIVIDUALS ARE ABLE TO PARTICIPATE.
'CAUSE UH, WE GO TO GREAT LENGTH TO MAKE SURE WHEN YOU GET YOUR CERTIFICATION, THE ONLY INDIVIDUALS WHO ARE QUALIFIED ARE THE ONES WHO ARE CERTIFIED.
OKAY? NOT BIG INVESTORS, UH, NOT BIG COMPANIES SETTING UP SATELLITE FIRMS LIKE THAT, BUT JUST ONLY ELIGIBLE FIRMS ARE ABLE TO PARTICIPATE, RIGHT? WE ALSO HELP REMOVE BARRIERS.
THE DB PROBLEM AND BARRIERS IS, UH, LIKE YOU GET A CONTRACT AND THEN YOU'RE NOT USED TO THE CONTRACT.
SO WE'RE THERE TO ASSIST YOU TO MAKE SURE YOU GET YOUR CONTRACT, YOU'RE UTILIZED AND TREATED FAIRLY, OKAY? UH, THEN PROMOTE THE USE OF DBES, WHICH WE ARE HERE, BUT RIGHT NOW WE'RE PROMOTING YOUR SERVICES.
THAT'S WHAT WE WANT TO PROMOTE THE USE OF YOUR FIRMS, RIGHT? THAT'S WHAT WE'RE HERE FOR.
SO THAT'S WHAT WE'RE HERE FOR, RIGHT? AND THEN TO ASSIST FIRMS TO COMPETE SUCCESSIVELY, WE HAVE SPECIAL PROGRAMS LIKE WHAT KATRINA WORKS WITH OVER HERE, SETTING UP WORKSHOPS FOR ESTIMATING, UH, THEN MARKETING.
SO THAT'S WHY SHE'S HERE TO HELP YOU MARKET YOUR BUSINESS.
SO THAT'S WHAT WE DO AS FAR AS, UH, HELP DEVELOP YOUR FIRMS, RIGHT? OKAY.
[01:15:01]
LOOK FOR FOR CERTIFICATION, RIGHT? AGAIN, UH, INDIVIDUAL OR THE APPLICANTS MUST BE SOCIALLY ECONOMICALLY DISADVANTAGE.THE SIZE OF THE BUSINESS MUST NOT BE REALLY BIG.
YOU KNOW, AS SMALL BUSINESS, THE OWNERSHIP MUST BE BY THE MINORITY OR THE WOMEN WHO OWNS THE COMPANY, LIKE I MENTIONED EARLIER.
OR LIST YOU AS THE APPLICANT MUST OWN AND CONTROL YOUR BUSINESS.
AND THE NEXT ONE IS, WE JUST MENTIONED CONTROL.
YOU ARE THE ONE THAT MAKES ALL DECISIONS.
YOU MAKE THE PROFITS OR ALSO THE OWNER, YOU MAKE THE LOSSES, RIGHT? AGAIN, THE CERTIFICATION, CERTIFICATION STANDARDS, WHAT WE ASK FOR YOU IS YOU HAVE TO VERIFY TO US THAT YOU OWN AND CONTROL OF THE BUSINESS, RIGHT? BUT, UH, WE ASK FOR A LOT OF DOCUMENTS, WE REVIEW THOSE DOCUMENTS, WE ASK A LOT OF QUESTIONS.
SO THE START OFF WITH YOU AS THE APPLICANT MUST PROVE TO US THAT YOU OWN AND CONTROL OF THE COMPANY, OKAY? UH, PART OF THE STANDARDS IS THE GROUP MEMBERSHIP AND THEN INDIVIDUAL DISADVANTAGE.
ONE THING THAT WE VERIFY THAT IS COMPLETING A PERSONAL NET WORTH STATEMENT, OKAY? WHERE YOU SHOW US YOUR ASSETS AND YOUR LIABILITIES, AND THE CAP TO THAT IS 1,000,300 20,000.
YOU KNOW, LIKE THOSE OF US THAT OWN $2 MILLION CONDOS IN COLORADO, WE WON'T QUALIFY.
OKAY? BUT THOSE WHO DON'T OWE $2 MILLION CO YOU KNOW, CONDOS, YOU'RE, YOU'RE OKAY.
SO THAT'S WHAT WE'RE LOOKING FOR YOUR OWN PERSONAL NET WORTH, RIGHT? AND THAT'S 1,320,000, RIGHT? UM, WITH THAT, ONE THING THAT'S IMPORTANT IS THAT'S YOUR PERSONAL NET WORTH.
WE DON'T COUNT THE ASSETS OF YOUR HOME.
YOU KNOW, IF YOU HAVE YOUR HOME, YOU KNOW YOU'RE GOOD, OKAY? OR ALSO THE ASSETS OF YOUR BUSINESS ITSELF.
JUST YOUR PERSONAL $2 MILLION CONDOS THAT WE LOOK AT, RIGHT? RIGHT.
THE BUSINESS SIZE ON THE CONSTRUCTION END, IF YOUR POST RECEIPTS ARE OVER $30 MILLION, YOU CONSIDER TOO BIG, YOU WON'T QUALIFY.
AND THEN FOR ENGINEERING FIRMS, THERE'S A LOT OF FIRMS HERE THAT CAP IS UH, $20.5 MILLION.
OKAY? SO OVER A THREE YEAR PERIOD, UH, ENGINEERING FIRMS ARE MAKING OVER 30 OR WELL, FOR ENGINEERING FIRMS THERE'S OVER 20.5 MILLION YOU, YOU WON'T QUALIFY.
OKAY? BUT THAT'S THE GOAL WE WANT YOU TO OBTAIN, MAKE THAT MUCH MONEY AND THEN THE CONSTRUCTION END, MAKE THAT $30 MILLION YOU CAN GRADUATE AND THEN WE'RE ALL GONNA BE BEST FRIENDS.
OKAY, MORE TO HIT IT ON OWNERSHIP STANDARDS, 51%, LIKE I STATED A LOT, UM, EXPERTISE.
THE APPLICANTS MUST HAVE THE EXPERTISE IN THE FIELD THAT THEY'RE SEEKING CERTIFICATION.
UH, AND THEN YOU HAVE TO SHOW THAT AGAIN TO US BY THE PREPONDERANCE OF INFORMATION YOU HAVE TO PROVIDE US, YOU HAVE TO SHOW US YOU HAVE THE EXPERTISE.
AND ONE MAIN THING TO BE LOOKED AT IS RESUMES.
I GET BEAUTIFUL RESUMES, THREE PAGES LONG THAT I'M OUTSTANDING, UH, UH, PROCESSOR, I'M OUTSTANDING AND COMPUTER WORK, I'M OUTSTANDING AND ORGANIZING, BUT THEY'RE PLANNING FOR CONCRETE.
THAT ONE WORD SAYS I DO CONCRETE WORK, RIGHT? SO THAT'S IMPORTANT.
SO WHEN YOU'RE TELLING US WHAT YOU DO, PUT THAT I DO CONCRETE WORK FOR 15 YEARS, WORKED FOR FIVE DIFFERENT COMPANIES.
THEN IF THE ENGINEERING PART OF IT PUT IN THERE THAT I'M A PE I DO CIVIL STRUCTURAL MEP, LET US KNOW.
AND I'VE BEEN DOING THIS FOR A LONG TIME, SHOW US YOUR LICENSE, SHOW US YOUR EXPERTISE, OKAY? IT'S NICE TO HAVE THE THREE PAGE LONG RESUMES, BUT YOU HAVE TO BE SPECIFIC TO WHAT YOU'RE CERTIFYING.
LET ME ADD SOMETHING IN ON THE CONTRIBUTIONS.
I'VE BEEN STANDING UP HERE AND I JUST COULDN'T WAIT TO JUMP IN.
I LIKE TO INTERRUPT A LITTLE BIT.
SO ON THE CONTRIBUTIONS, THE MAJORITY OF THE AUDIENCE ARE ENGINEERS.
AND SO AS FAR AS THE DB PROGRAM GOES, YOU HAVE TO CONTRIBUTE CAPITAL.
SOME MONEY COME MAY 9TH, THAT CHANGES TO INVESTMENT.
WHAT DID YOU INVEST AND WHERE YOUR WAS YOUR INVESTMENT? CONTINUOUS MEANING, YOU KNOW, A LOT OF PEOPLE, WHAT THEY DO IS THEY FILL OUT THE APPLICATION.
THEY TELL US I INVESTED $500 TO START THIS BUSINESS.
WHAT $500 WAS REALLY WHAT THEY PAID FOR
[01:20:01]
THEIR STOCK OWNERSHIP.NOT WHAT WAS PUT IN TO ACTUALLY MAKE THAT BUSINESS OPERATIONAL.
AND SO THE NEW TERM STARTING MAY 9TH IS INVESTMENTS.
WHAT DID YOU INVEST? BUT IN TERMS OF ENGINEERING, IF YOU SAY THAT MY EXPERTISE IS MY CONTRIBUTION, YOU STILL HAVE TO PUT FORTH A SIGNIFICANT AMOUNT OF CASH.
AND SO BASICALLY IT'S TO SAY THAT YOUR EXPERTISE IS INDISPENSABLE TO THE FIRM'S OPERATIONS.
MEANING THIS FIRM CAN'T SURVIVE WITHOUT ME.
OKAY? UM, AND IT'S NOT REQUIRED THAT, THAT THE ACTUAL 51% OWNER ACTUALLY HAVE, UH, AN ENGINEERING LICENSE.
YOU CAN HIRE SOMEBODY WITH A LICENSE.
'CAUSE WE ALSO LOOK AT STATE LAW.
BUT ONE OF THE THINGS DOT IS UM, BASICALLY INFORMING EVERYBODY IS THEY TOOK AWAY THE LICENSURE REQUIREMENT BECAUSE STATE LAW VARIES AMONGST THE DIFFERENT 50 UNITED STATES.
I MEAN 50 STATES THAT WE HAVE IN THE UNITED STATES.
SO THEY TOOK AWAY THE LICENSING REQUIREMENT.
AND SO THAT'S GONNA BE A BIG CHANGE FOR CERTIFIERS TO LIKE OVERCOME.
AND SO WHAT WE TYPICALLY DO IS WE SAY, OKAY, DO YOU HAVE A DEGREE IN ENGINEERING? AND EVEN THOUGH YOU'RE THE 51% OWNER QUALIFYING FOR THE CERTIFICATION, YOU MAY NOT HAVE THE DEGREE.
I MEAN YOU MAY HAVE THE DEGREE AND NOT THE LICENSE, BUT THE PERSON WITH THE LICENSE.
BECAUSE AS YOU ALL KNOW, WHEN YOU'RE LOOKING AT A SET OF PLANS, IT HAS TO HAVE AN ENGINEER SEAL.
SO YOU MAY NOT BE THE ONE THAT'S TO REGISTER LICENSED PE, BUT AT LEAST YOU HAVE THE KNOWLEDGE TO BE ABLE TO EVALUATE THAT INFORMATION.
AND THAT'S GONNA BE A CHALLENGE GOING FORWARD IS EVEN IF WE DON'T LOOK AT, SAY, THE DEGREE REQUIREMENT, WHICH FOR ENGINEERING, I MEAN EVERYBODY IS ENGINEERING AS THEIR EXAMPLE, WE'RE GONNA LOOK FOR THE DEGREE REQUIREMENT, BUT STILL TO SAY, CAN YOU EVALUATE WHAT'S BEING PUT FORTH TO YOU BY KEY PERSONNEL IN YOUR ORGANIZATION? NEXT SLIDE.
WHAT BEN BEEN EMPHASIZING THROUGHOUT THE PRESENTATION HERE, YOU MUST HAVE THE CONTROL OF THE COMPANY.
YOU MUST HAVE YOU BE INDEPENDENT.
UH, WE REVIEW APPLICATIONS WHERE THERE'S, UH, BOARD OF DIRECTORS ISSUES.
THE, THE APPLICANT IS PRESIDENT, BUT THEN WE LOOK AT THE BOARD OF DIRECTORS DOCUMENTS AND UH, IT STATES THE BOARD OF DIRECTORS CAN OVERRIDE THE PRESIDENT.
SO THERE'S A RESTRICTION THERE.
SO MAKE SURE WHEN YOU'RE COMMITTING YOUR OPERATING AGREEMENTS, MAKE SURE IF YOU'RE PRESIDENT, YOU'RE ALSO ON THE BOARD AND HAVE YOU VOTE YOUR SHARES AND YOU CONTROL THE COMPANY.
LET ME PHRASE IT A BETTER WAY.
WHEN YOUR ATTORNEYS PUT TOGETHER YOUR PAPERWORK AND THEY PUT TOGETHER YOUR ARTICLES OF INCORPORATION, MAKE SURE IT REPRESENTS YOU AS A COMPANY, OKAY? MAKE SURE IT REPRESENTS YOU AS A COMPANY.
UM, SO THEY PUT IT TOGETHER, YOU SAY, HEY, IT'S DONE.
YOU PUT IT TO THE SIDE, IT'S DONE.
AND THEN YOU GO AND YOU APPLY FOR DB CERTIFICATION.
THEN WE LOOK IN THERE AND WE SEE THAT YOU AS A 51% OWNER, YOU DON'T EVEN CONTROL YOUR OWN BOARD OF DIRECTORS.
LIKE YOU CAN'T EVEN MAKE DECISIONS.
YOU DON'T EVEN HAVE VOTING RIGHTS TO WHERE YOU CAN MAKE THE DECISIONS BECAUSE YOU ALLOWED YOUR ATTORNEYS TO PUT IT TOGETHER FOR YOU AND YOU PUSH IT TO THE SIDE AND CHECK THE BOX AND SAY, HEY, WE GOT THAT DONE.
SO WE LOOK AT ARTICLES OF INCORPORATION, WE LOOK AT YOUR BYLAWS, WE LOOK AT YOUR ASSUMED NAME CERTIFICATES, WE LOOK AT THE BUSINESS REGISTRATION.
WE SURE YOU IN GOOD STANDING, WE LOOK AT YOUR MEETING MINUTES.
I WAS LOOKING AT A MEETING MINUTES ONE TIME AND, AND THE COMPANY HAD BEEN CERTIFIED FOR, FOR YEARS.
SO I'M READING THE MEETING MINUTES BECAUSE EVERY YEAR YOU HAVE TO INFORM THE CERTIFIER THAT YOU STILL MEET THE REQUIREMENTS.
AND THE MEETING MINUTES SAID SOMETHING LIKE THE INDIVIDUAL WAS THE PRESIDENT, BUT SHE HAD TO GET APPROVAL FROM THE BOARD TO MAKE A CHANGE, NOT CONSULT WITH THE BOARD, BUT SHE HAD TO GET APPROVAL FROM THE BOARD.
AND I'M LOOKING AT IT TO SAY, WELL, IF YOU GOTTA GET APPROVAL FROM THE BOARD, YOU'RE NOT REALLY IN CONTROL, ARE YOU? I MEAN, IT'S YOUR COMPANY, YOUR INVESTMENT, YOUR MONEY.
SURE YOU MAY RELY ON OTHERS, YOU KNOW, TO FOR SOME INPUT AND DECISION MAKING, BUT AT THE END OF THE DAY, YOU SHOULD BE ABLE TO MAKE THOSE SOUND DECISIONS TO GROW YOUR COMPANY BECAUSE THE DEFINITION IS A FOR-PROFIT BUSINESS CONCERN.
SO YOU NEED TO BE LOOKING HOW TO GROW YOUR BUSINESS, HOW TO MAKE A PROFIT.
UH, TEXT OUT IS PART OF A UNIFIED, UH, CERTIFICATION GROUP CALLED PROGRAM, UH, WHERE THERE'S SIX OTHER AGENCIES.
IT DOES THE DBE CERTIFICATION.
IT'S ONE BECAUSE IT'S THE REGULATION OF 49 CFR 4 26.
IT'S, WE ALL PROCESS IT THE SAME, IT'S THE SAME DOCUMENT, THE SAME REGULATIONS.
AND THEN, UH, ONCE YOU'RE CERTIFIED, IT'S UH, IT'S UH, IT'S ACCEPTED BY EVERYONE AS YOU SEE HERE.
UH, THE CITY OF AUSTIN IS PART OF IT.
THE CITY OF HOUSTON, CORPUS CHRISTI, UH, TRANSIT AUTHORITY, NORTH CENTRAL TEXAS THAT'S IN THE DALLAS,
[01:25:01]
UH, FORT WORTH AREA IN ARLINGTON, UH, SOUTH CENTRAL TEXAS, THAT'S IN SAN ANTONIO.AND THEN TDO, WE HAVE A MAP OF HOW IT LOOKS LIKE, HOW IT'S ALL BROKEN OUT.
SO BASICALLY WHAT THIS AMOUNTS TO, UH, WHEREVER YOUR BUSINESS IS HEADQUARTERED IS WHO WOULD BE THE AGENCY THAT WILL PROCESS YOUR APPLICATION.
LIKE THOSE FROM THE CITY OF AUSTIN.
THE CITY OF AUSTIN WILL PROCESS IT.
BUT IF YOU'RE OUTSIDE OF THE CITY OF AUSTIN, YOU CAN TAKE A LOOK AT THIS, UH, WHERE YOU SEE WHERE YOUR BUSINESS HEADQUARTERED, AND THEN THAT'S WHERE YOU'LL SUBMIT YOUR APPLICATION FOR A CERTIFICATION.
AND THAT LAW, LIKE WHAT IT WAS STATED, LIKE IT WAS STATED, UH, YOU'RE CERTIFIED WITH ANY OF THESE AGENCIES, IT'S AUTOMATICALLY ACCEPTED, UH, BY EVERYONE.
NOW, ON THE FLIP SIDE OF THAT, IF ANY ONE OF THOSE AGENCIES DENY YOUR FIRM DB CERTIFICATION, YOU'RE AUTOMATICALLY DENIED WITH ALL OF US.
SO YOU CAN'T GO TO ONE, GET DENIED AND THEN DECIDE YOU'RE GONNA GO TO THE OTHER FIRM, I MEAN THE OTHER ENTITY TO GET CERTIFIED.
BUT WHEN YOU LOOK AT THIS MAP, THE GRAY AREA, TDO HAS THE LARGEST AREA TO COVER AS FAR AS CERTIFICATIONS IN THE STATE OF TEXAS.
UH, AND WE ACTUALLY, WE USED TO TRAVEL TO THOSE LOCATIONS, UH, NOT SO MUCH SINCE, UH, COVID AND DOT PUT OUT THE COVID OVID 19 RULES, WHICH SAYS WE CAN DO VIRTUAL ON ONSITE REVIEWS.
SO, SO WE DO VIRTUAL ONSITE REVIEWS.
NOW, UM, YOU KNOW, FOR MY TEAM, IF, IF THE FIRM IS LOCATED, UM, TWO HOURS AWAY, LESS THAN TWO HOURS AWAY, THEN WE, WE DO THOSE IN PERSON.
THAT WAY WE STILL KIND OF KEEP THE INTEGRITY OF THE PROGRAM, UH, AND INTEGRITY OF ACTUALLY CONDUCTING ONSITE INTERVIEWS.
UM, BUT THE NEW RULE WITH DOT NOW IS THEY ACCEPT VIRTUAL ONSITE REVIEWS, PERIOD.
WE JUST HAVE TO RECORD THEM NOW AS OPPOSED TO SIMPLY JUST WRITING DOWN THE RESPONSES.
ALRIGHT? OUR PROCEDURE TO REVIEW AN APPLICATION, RIGHT? WE, WE GET THE APPLICATION, WE GO THROUGH AND EVALUATE IT, WE LOOK AT ALL THE DOCUMENTS RELATED TO IT, WE SET UP WHAT WE CALL ONSITE INTERVIEWS, OR LIKE MARTHA WAS SAYING, WE GO VIRTUAL INTERVIEWS WITH THEM.
UH, WE AVAILABLE IF POSSIBLE, WE'D LIKE TO GO SEE A JOB SITE WITH YOU.
AND THEN AFTER ALL THAT PROCESSES, WE DETERMINE ELIGIBILITY FOR CERTIFICATION.
AND WE MAKE IT SOUND EASY RIGHT HERE, BUT IT'S NOT REALLY EASY BECAUSE IF YOU GIVE US A BUNCH OF STACK OF PAPERS LIKE THIS, THEN WE'RE TASKED WITH LOOKING AT ALL OF THE, ALL OF THAT PAPERWORK.
UM, JOE MAY MISS SOMETHING, I MAY CATCH IT, I MAY MISS SOMETHING, HE MAY CATCH IT.
SO WE'RE, AGAIN, WE'RE TASKED WITH LOOKING AT ALL OF THAT PAPERWORK, BUT IT'S YOUR JOB TO PROVE TO US THAT YOU'RE CERTIFIABLE.
SO THAT'S WHY YOU SHOULD PRESENT ALL OF THE PAPERWORK TO US SO THAT WE CAN EVALUATE IT.
AND THEN THAT WAY WHEN WE DO THE ONSITE REVIEW, IF THERE'S SOMETHING QUESTIONABLE, WE CAN SAY, WELL, HEY, WELL WHAT ABOUT THIS, THIS, AND THIS? AND YOU HAVE AN OPPORTUNITY TO EXPLAIN THAT INFORMATION TO US.
UH, WE HAVE A, ONCE YOU GET CERTIFIED, WE PLACE YOUR NAMES AND BUSINESSES AND INFORMATION ON THE DECK ON THE DIRECTORY WHERE, UM, EVERYONE COULD SEE AND YOU CAN ACCESS IT, RIGHT? UM, BUT ALSO THOSE ARE HERE CERTIFIED HERE IT IS.
THERE'S, OR WE'RE GONNA SPEAK TO YOU ON THIS PART.
UH, YOUR CERTIFICATION DOES NOT EXPIRE, BUT HOWEVER YOU NEED TO SUBMIT YOUR, YOUR ANNUAL UPDATE DOCUMENTS.
SO KNOW WHAT YOUR DATE IS TO SUBMIT YOUR DOCUMENTS AND SUBMIT IT AT THAT TIME.
YOU CAN SUBMIT IT, YOU KNOW, AT LEAST A, A MONTH BEFORE THAT TIME, WHICH IS VERY USEFUL.
SO IT'S UH, IMPORTANT TO DO THAT.
SO ALL THOSE WHO RAISE THEIR HANDS WHO ARE CERTIFIED, MAKE SURE YOU KNOW WHAT YOUR DATE OF EXPIRATION IS SO YOU CAN SUBMIT IT AND YOU CAN CONTINUE YOUR CERTIFICATION.
ALRIGHT? UH, NOW FOR THE MAJORITY OF THE TEXAS UNIFIED CERTIFICATION MEMBERS, THEIR SYSTEM, SO WE ALL USE THE B TWO G NOW SYSTEM DIVERSITY MANAGEMENT SYSTEM, OKAY? AND SO OUR SETTINGS MAY BE A LITTLE BIT DIFFERENT, BUT FOR THE MAJORITY OF US THAT ARE USED IT, THE SYSTEM AUTOMATICALLY SENDS YOU A NOTIFICATION.
UM, FOR US IT'S LIKE 60 DAYS BEFORE YOUR CERTIFICATION ANNIVERSARY DATE, AND THEN YOU GET LIKE A 45 DAY REMINDER, UM, OF THAT, YOU KNOW, TO SUBMIT YOUR CERTIFICATION.
SO JOE WAS SAYING, IF POSSIBLE, DO IT, YOU KNOW, SUBMIT IT LIKE 30 DAYS IN ADVANCE.
UM, YOU'LL GET THOSE REMINDERS.
SO IT'S NOT NECESSARILY THAT YOU HAVE TO REMEMBER WHEN TO DO IT.
YOU'RE GETTING A SYSTEM REMINDER.
SO YOU WANNA MAKE SURE THAT THOSE REMINDERS ARE NOT GOING TO YOUR JUNK MAIL, OKAY? UM, AND THEN AS LONG AS YOU'RE SUBMITTING IT WITHIN A DIVERSITY MANAGEMENT SYSTEM, WE CAN SEE IT.
SO IF YOU START THE PROCESS AND YOU'RE ONLY 9% COMPLETE, AT LEAST WE CAN SEE THAT YOU GOT STARTED AS OPPOSED TO NOTHING AT ALL.
[01:30:01]
OKAY? SO WHAT'S USUALLY REQUIRED IS THAT COMPLETED THE ANNUAL UPDATE AFFIDAVIT, SUBMIT YOUR TAX RETURNS.LIKE RIGHT NOW WE'RE ASKING FOR THE 2023 BUSINESS TAX RETURNS.
AND THEN IF YOU HAVE BOARD YOU CONDUCT BOARD MEETINGS, WE NEED TO REVIEW YOUR LATEST BOARD MEETINGS.
LIKE MARTHA SAID, WE LOOK AT THOSE BOARD MEETING MINUTES AND SEE IF THERE ARE ANY CHANGES IN OWNERSHIP CONTROL.
SOMETIMES LIKE WE STATED, WE SEE THAT, THAT THERE, THE PRESIDENT LEFT AND THEN THERE'S A NEW PRESIDENT.
SO THAT MESSES UP THE WHOLE PROCESS.
SO WE, WE NEED TO HAVE YOUR INFORMATION AS FAR AS THE BOARD MEETING MINUTES, OKAY? THIS IS THE OUR FUN PART.
HOW DO YOU APPLY FOR THOSE WHO ARE NOT CERTIFIED? HOW DO YOU APPLY FOR DB CERTIFICATION? THERE'S OUR WEBSITE HERE AT TX DT DOT TX DT CMS.COM.
IT'LL BRING YOU TO THIS SCREEN THAT YOU SEE UP HERE, RIGHT? SEE, THAT'S, THAT'S WHAT YOU SHOULD BE SEEING.
AND THOSE WHO WANNA APPLY, YOU'LL JUST HIT IT SAYS RIGHT THERE, APPLY FOR CERTIFICATION AND THEN THOSE WHO WANNA RENEW, SAME THING.
YOU HIT THE SAME LITTLE UH, BUTTON THERE, IT SAYS APPLY FOR RECERTIFICATION.
AND SO THAT'S, THAT'S WHERE YOU START.
QUICK QUESTION, HOW MANY OF YOU ARE PRIME PROVIDERS PARTICIPATE AS A PRIME? OKAY? SO WHEN YOU ARE RESPONDING TO AN RFP AND IT HAS A DBE GOAL, YOU CAN GO AND MEET THE DBE FIRM ANYWHERE.
YOU CAN MEET 'EM AT AN EVENT LIKE THIS, YOU KNOW, AND HOPEFULLY YOU DO MEET FIRMS HERE TODAY THAT YOU, UM, NETWORK WITH AND, AND BASICALLY YOU VETTING THAT YOU WANT TO TEAM WITH.
BUT WHEN IT COMES TO MEETING THE DBE GOAL, THE DBE HAS TO BE LISTED IN THIS DIRECTORY.
SO THE DIVERSITY MANAGEMENT SYSTEM IS WHERE WE HOUSE OUR DB DIRECTORY.
IT'S WHERE FIRMS GO TO APPLY FOR CERTIFICATION.
IT'S WHERE YOU GO TO SEND IN YOUR ANNUAL UPDATE AFFIDAVIT, WHICH I THINK DOT IS GONNA CALL A DECLARATION OF ELIGIBILITY EFFECT OF MAY 9TH.
STILL NOT SURE E EXACTLY IF THAT'S WHAT THEY'RE GONNA CALL IT.
'CAUSE THEY KEEP TOSSING AROUND DIFFERENT, DIFFERENT ACRONYMS AND TERMS. UM, BUT THIS IS ALSO WHERE FOR TEXTILE, THIS IS WHERE WE HAVE OUR CONSTRUCTION CONTRACTS.
SO ALL OF OUR FEDERAL CONSTRUCTION CONTRACTS AS OF 2017 ARE IN THE DIVERSITY MANAGEMENT SYSTEM RIGHT NOW WE ARE WORKING TO GET, UH, OUR LOCAL GOVERNMENT PROJECTS IN THERE AND THEN EVENTUALLY WE'LL GET OUR PROFESSIONAL ENGINEERING PROCUREMENT CONTRACTS IN THIS SYSTEM AND THAT WAY WE CAN MONITOR THE DB ACTIVITIES.
SO CURRENTLY THE DB ACTIVITIES MONITORED BY OUR PEPS DIVISION AND NOT NECESSARILY THE CIVIL RIGHTS DIVISION, BUT THE CIVIL RIGHTS DIVISION IS TECHNICALLY NOT THE OWNER OF THE SYSTEM, BUT THEY REFER TO US AS THE OWNER OF THE SYSTEM.
BUT TEXTILE OWNS THE SYSTEM, OKAY? UH, THIS IS RELATED TO THOSE FIRMS WHO ARE ALREADY DBE CERTIFIED.
UH, WE ASK YOU TO EVEN TODAY GO LOOK AT WHAT YOU'RE CERTIFIED FOR, RIGHT? CHECK THOSE IN A ICS CODES, CHECK 'EM.
AND FOR EXAMPLE, YOU'RE DOING UH, ENGINEERING SERVICES, CIVIL ENGINEERING, BUT THEN NOW YOU STARTED TO DO, UH, SURVEYING.
UH, AND IF YOU DO THE SURVEY AND GET DOING WORK FOR IT BUT DON'T HAVE IT, YOU KNOW, LET US KNOW.
YOU'RE MISSING OUT ON OPPORTUNITY FOR THAT.
SO BE SURE AND GO LOOK AT WHAT YOU HAVE.
IF YOU UNDERSTAND ANY CHANGES, CON CONTACT US SO WE CAN ADD THAT PARTICULAR CODE TO YOU.
THIS IS WHAT YOUR INFORMATION WILL LOOK LIKE ON OUR DIRECTORIES.
ONCE YOU'RE CERTIFIED, IT HAS THE, YOUR BUSINESS NAME, THE SERVICE YOU PROVIDE, THE CODES YOU, YOU ARE CERTIFIED FOR, AND THEN ALSO WHERE YOUR HOME DISTRICT IS LIKE THIS ONE, IT SAYS EL PASO AND THAT'S VALUABLE INFORMATION, UM, TO VE WHERE IT'S YOUR VERIFIED, YOUR SERVICES, YOUR SERVICE WILL VERIFY.
THAT'S FOR OUR OUR CONSTRUCTION ONE.
THIS NEXT ONE IS FOR, UH, ENGINEERING.
LIKE THE ENGINEERING CODE IS 5 4 1 3 3 0 AND LIKE IT'S BENSON, UH, IF THERE'S SOMETHING WRONG, YOU CAN LOOK AT IT.
WE COULD MAKE THE CHANGES TO IT.
ALRIGHT? AND THEN ALSO YOU MOVE TO A BIGGER OFFICE.
LET US KNOW RIGHT AWAY AND WE'LL MAKE THAT CHANGE AUTOMATICALLY.
ALL WE HAVE TO DO IS TYPE IT IN 'CAUSE IT'S A DIRECT, UH, LIVES WITH OUR DATABASE.
SO AS SOON AS YOU TELL US WE TYPE IT IN, IT'S THERE INSTANTLY.
SO LEMME GIVE YOU A LITTLE TIP REAL QUICK.
SO CERTIFIED BUSINESS DESCRIPTION.
[01:35:01]
ENGINEERING.NORTH AMERICAN INDUSTRY CLASSIFICATION SYSTEM CODES.
THE FEDERAL DB PROGRAM REGULATION SAYS EVERYBODY MUST HAVE ONE, BUT IF IT'S NOT ONE THAT CLOSELY DESCRIBES WHAT IT IS THAT YOU DO, YOU CAN USE A CERTIFIED BUSINESS DESCRIPTION.
AND SO WHAT I TRY TO TELL THE UNIFIED CERTIFICATION PROGRAM CERTIFICATION PARTNERS IS GEOTECHNICAL LABORATORIES AND SERVICES.
THE CERTIFIED DESCRIPTION DOESN'T NECESSARILY HAVE TO SAY THAT.
IT CAN SAY IT CAN BREAK IT DOWN A LITTLE BIT MORE ASUP SUPPOSE, YOU KNOW, IN TERMS OF WHAT IT IS THAT YOU DO AS LONG AS IT'S SUPPORTED BY THE NEXT CODE.
SO MAKE SURE WHEN YOU'RE LOOKING AT YOUR CERTIFICATION PROFILE THAT YOU ARE LOOKING AT YOUR CERTIFIED BUSINESS DESCRIPTION AND IT'S THE WAY THAT YOU WANT IT TO APPEAR.
BECAUSE AGAIN, THIS IS WHERE THE PRIME PROVIDER MUST GET YOUR INFORMATION TO SEE THAT YOU'RE A CERTIFIED DBE.
THE DB DOESN'T HAVE ANY EXPIRATION DATES IN IT.
EVEN THOUGH WE HAVE TO GO BY A CERTIFICATION ANNIVERSARY DATE, THE PUBLIC FACING DIRECTORY DOESN'T SHOW UP.
BUT MAKE SURE YOUR NEXT CODES SUPPORT YOUR CERTIFIED BUSINESS DESCRIPTION.
OKAY? AND LEMME JUST BREAK IT DOWN A LITTLE BIT FURTHER.
HOW MANY OF YOU ARE ACTUALLY, UM, PRE-CERTIFIED WITH TDOT PROFESSIONAL ENGINEERING? OKAY, YOU'RE PRE-CERTIFIED.
SURVEYING, OKAY, WHAT ABOUT, UH, ADMINISTRATIVELY QUALIFIED? ALL RIGHT, SO YOU KNOW, PEPS HAS ITS OWN ITS OWN WORK CATEGORIES, RIGHT? AND THOSE WORK CATEGORIES, BECAUSE YOU'RE AN ENGINEERING FIRM, SHOULD BE SUPPORTED ALSO BY YOUR NEXT SCOPES.
WHY NOT INCLUDE THAT HERE IN YOUR CERTIFICATION? THINK ABOUT IT FOR A MOMENT.
THE RFP SAYS I NEED SOMEBODY TO DO GEO TECHNICAL ENGINEERING AND HERE'S THE NS CODE.
YOU WANNA MAKE SURE THAT YOU HAVE THOSE NS CODES, BUT YOU'RE ALSO PRE-CERTIFIED TO DO SOME OTHER WORK THAT PEPSI'S ALREADY VERIFIED.
WHY NOT HAVE THAT ON YOUR CERTIFICATION AS YOUR CERTIFIED BUSINESS SUBSCRIPTION? NOW, BASICALLY WHAT YOU HAVE TO DO IS MAKE SURE THAT YOUR CERTIFYING AGENCY, YOU KNOW, YOU HAVE TO LET THEM KNOW THAT YOU WANNA DO AN EXPANSION REQUEST.
AND THEN HERE'S THE TRICK TO IT.
IF IT'S ALREADY A PART OF YOUR APPLICATION FILE, YOU DON'T HAVE TO SUBMIT ANYTHING NEW.
IF IT'S ALREADY A PART OF YOUR CERTIFICATION APP, APPLICATION FILE, YOU DON'T HAVE TO SUBMIT, SUBMIT ANYTHING NEW.
SO YOU'VE BEEN CERTIFIED FOR FIVE YEARS, IT WAS ALREADY PART OF YOUR APPLICATION, BUT YOU DIDN'T CHECK OFF THAT, HEY, I WANTED TO ADD THIS DESCRIPTION, BUT IT'S IN THERE THAT YOU ALREADY DO IT.
YOU DON'T HAVE TO SUBMIT ANY EXTRA DOCUMENTATION TO PROVE THAT YOU DO THIS TYPE OF WORK.
NOW IF IT'S BRAND NEW INFORMATION, NOW YOU GOTTA PROVE TO US THAT YOU CAN CONTROL IT AND YOU HAVE THE KNOWLEDGE AND EXPERIENCE TO DO IT.
AND SO THAT'S THE INFORMATION YOU WANNA TAKE BACK TO YOUR CERTIFICATION AGENCY SO THAT AGAIN, YOU'RE USING THIS LIKE A MARKETING TOOL.
SO WHEN A PRIME PROVIDER IS LOOKING FOR YOU, YOU GOT EVERYTHING THAT YOU NEED ALREADY IN THERE FOR THEIR PRIME PROVIDER TO UTILIZE YOU.
NOT ONCE BUT TWO OR THREE TIMES IN OTHER PRIME PROVIDERS AS WELL WHERE YOU FIND THE INFORMATION.
I'M SORRY, JOE
IF THEY DIDN'T CHANGE, IT'S 26 71 N.
AND IT BASICALLY SAYS WE ARE RESPONSIBLE FOR THE DIRECTORY.
BUT YOU'RE ALSO RESPONSIBLE TOO.
'CAUSE I'M GONNA TELL YOU I'M NOT AN ENGINEER SO YOU DON'T LEAVE IT IN MY HANDS.
SO ONLY YOU CAN TELL ME WHAT IT IS THAT YOUR BUSINESS ACTUALLY DOES.
THIS IS MORE INFORMATION ON DIRECTORY, UH, MARTHA HITS ABOUT THOSE, THOSE TOP TOPICS ABOUT UH, ADDING YOUR CODES AND THEN MAKE SURE YOU CONTACT US.
UM, AND THEN LIKE WE'RE SAYING, GO BACK AND LOOK WHAT YOU HAVE NOW.
IS THERE SOMETHING MISSING YOU WANNA ADD? JUST LET US KNOW SO WE CAN DO THAT.
OKAY? NOW, UH, TALK ABOUT TEXT THAT PROJECTS, YOU KNOW, THIS IS ABOUT THE TRANSIT PARTNERSHIP, BUT NOW WE TALK A BIT LOT OF HOW YOU CAN DO BUSINESS WITH TDOT.
WHERE YOU FIND TDOT PROJECTS THROUGH OUR WEBSITE, UH, TX DT.GOV.
YOU GET THIS SCREEN, THERE'S A DROPDOWN BOX.
IT SAYS DO BUSINESS AS YOU SEE THERE.
IF YOU'RE LOOKING FOR CONSTRUCTION JOBS THERE, THERE'S A LITTLE LINK.
IT SAYS THERE'S ROAD BRANCH AND MAINTENANCE, YOU'RE LOOKING FOR ENGINEERING.
THERE'S ANOTHER LINK YOU OPEN FOR OUR ENGINEERING ARCHITECTURAL.
THAT'S WHERE YOU FIND OUR JOBS.
THEN ONE THING I HIGHLY RECOMMEND, GO TO OUR WEBSITE, GET TO KNOW HOW TO GO THROUGH THE SYSTEM 'CAUSE IT'S VERY VALUABLE INFORMATION, UM, TO HELP YOU DEVELOP A BUSINESS, HOW TO GET WORK WITH UH, TECH DOT AND THEN ULTIMATELY HOPEFULLY GET SOME CONTRACTS.
[01:40:01]
PEOPLE THAT DESIGN OUR WEBSITE, THEY PRIDE THEMSELVES IN IT.I MEAN THEY THINK THAT EVERYTHING IS THERE THAT YOU WANNA FIND.
ALL YOUR BOOKMARKS ARE LOST 'CAUSE THEY DONE, YOU KNOW, THEY DIDN'T UPDATE.
SO YOU GOTTA GO AND DO YOUR BOOKMARKS AGAIN, IT'S NOT REAL EASY TO NAVIGATE OUR WEBSITE, BUT IT DOES HAVE A WHOLE LOT OF INFORMATION ON THERE TO HELP ANYBODY.
AND IF YOU SEE ANYTHING ON THERE THAT YOU HAVE QUESTIONS ABOUT, YOU CAN ALWAYS CONTACT US, UM, WITH THOSE QUESTIONS, RIGHT? 'CAUSE THIS IS LITTLE, THE SCREEN YOU HERE IS LIKE SUB PARTS UP TO THAT WHERE YOU CAN LOOK WHERE, WHERE ALL THE PROJECTS AT SPECIFICALLY, ALRIGHT? UH, INFORMATION YOU NEED TO GET PRE-QUALIFIED.
ALRIGHT? AND THEN, UH, LEMME SEE ANYTHING EITHER, ANYTHING ELSE RELATED TO THE CONSTRUCTION.
THIS, UH, WHAT ARE THOSE LINKS? IT'LL PULL YOU UP TO THIS WHERE YOU SEE THE ACTUAL PROJECT INFORMATION, THE AMOUNT, THE SOLICITATION NUMBER AND DESCRIBES A LITTLE BIT WHERE THE PROJECT IS AND THE NAME OF THE PROJECT.
BUT THAT'S ALL THROUGH THE WHAT THE WEBSITE.
SO FOR THIS, FOR THIS PARTICULAR SCREENSHOT HERE, THESE ARE PROJECTS THAT ARE COMING UP IN THE AUSTIN DISTRICT.
WHAT IS IT? 256 COUNTIES, SOMETHING LIKE THAT.
SO THIS IS PRO THESE ARE PROJECTS IN AUSTIN DISTRICT.
SO THIS IS ACTUALLY FOR THE JUNE LETTING, SO WE'RE ACTUALLY HAVING, LETTING THIS WEEK, UM, I DON'T KNOW, IS IT THURSDAY AND FRIDAY? OR THURSDAY AND FRIDAY, THURSDAY.
SO THURSDAY AND FRIDAY IS OUR LETTING FOR THE MONTH OF MAY CONSTRUCTION LETTING, WHICH IS OUR BID DATE.
UM, THIS PROJECT, AGAIN, YOU HAVE A BIG PROJECT HERE, 448 MILLION WIDEN ROADS.
IT IS A FEDERAL PROJECT BASICALLY, IF YOU CAN SEE IT, ANYTHING THAT HAS A PARENTHESES.
SO, UH, IF YOU SEE THE F 2024, PARENTHESES EIGHT THIRTY THREE, THEY CALL IT EIGHT THIRTY THREE IN THE WHOLE IS WHAT THEY SAY IN CONSTRUCTION TERMS. THAT MEANS IT'S A FEDERAL PROJECT 'CAUSE IT HAS THOSE PARENTHESES, BUT IT DOES NOT NECESSARILY MEAN IT HAS A DBE GOAL ON IT.
UM, BUT WE DO ADVERTISE ON OUR WEBSITE DB GOALS, ANYTHING THAT SAYS RMC OR ROUTINE MAINTENANCE CONTRACTS.
STATE FUNDED PROJECTS, STATE MONEY, NO DB REQUIREMENTS, BUT YOU CAN WORK ON IT ON THOSE PROJECTS.
ANYTHING WITH A C IS ALSO A STATE FUNDED PROJECT.
SO OUR FEDERAL PROJECTS, AND I I ALWAYS TELL OUR OUR DISTRICTS THIS, IT'S 80 OR 90% FEDERAL MONEY, 80 OR 90% FEDERAL MONEY.
SO YOU GOTTA FOLLOW THE DB RULES.
WHEN WE HAVE THAT FEDERAL MONEY INVOLVED ON THOSE PROJECTS, WHETHER THERE'S A GOAL OR NOT, THERE'S DB RULES THAT MUST BE FOLLOWED BECAUSE IT'S A PART OF THE CONTRACT AND THAT'S WHAT YOU GUYS WANNA LOOK FOR AS WELL.
SO WHEN YOU'RE ON A PROFESSIONAL SERVICES CONTRACT AND IT HAS FEDERAL FUNDING IN IT, LOOK TO SEE IF THEY PUT WHAT'S CALLED A DB SPECIAL PROVISION IN YOUR CONTRACT, IN YOUR SUBCONTRACT, BECAUSE THAT OUTLINES THE RULES AND REGULATIONS FOR THE DBE PROGRAM.
AND THAT'S ALSO THE AUTHORITY THAT YOU CAN GO BACK AND SAY, HEY, THIS IS WHAT IT SAYS HERE IN THE DB SPECIAL PROVISION.
OKAY? UH, WE JUST WENT THROUGH THAT.
SO TWO LETTINGS, TWOS, TWOS, UH, WE DETERMINE WHO THE LOWEST BIDDER IS.
WE STILL GO BUY LOW BID SYSTEM ON THE CONSTRUCTION SIDE.
UH, AND EVERYTHING IS ON OUR WEBSITE, T DOT.GOV BASICALLY.
ALL RIGHT? UM, THINK IT'S ON THE, ON THE WEBSITE IT WAS WHERE YOU WANNA GET YOUR BID QUESTIONNAIRE OR THE CONFIDENCE SEQUENTIAL THERE, DEPENDING ON THE SIZE OF YOUR, OF YOUR BUSINESS.
THE, SO YOU FIND 'EM TO, THAT, THAT LINK, WELL ACTUALLY, THE DIFFERENCE BETWEEN THOSE, THE CONFIDENTIAL QUESTIONNAIRE AND THE BUSINESS QUESTIONNAIRE IS IT'S A SMALL DIFFERENCE.
UM, A LOT OF TIMES THE BID QUESTIONNAIRE IS FOR WAIVE PROJECTS, MEANING WE WAIVED THE FINANCIAL REQUIREMENTS.
UM, AND YOU GUYS MAY NOT NECESSARILY BE INTERESTED IN THAT, BUT YOU KNOW, WHEN IT COMES TO AUDITED FINANCIAL STATEMENTS, I KNOW YOU ALL ARE FAMILIAR WITH THAT MOST OF THE TIME FOR THE CONFIDENTIAL QUESTIONNAIRE, WHERE ALL THE TIME YOU HAVE TO SUBMIT AUDITED FINANCIAL STATEMENTS FOR THE CONFIDENTIAL QUESTIONNAIRE, BUT NOT NECESSARILY FOR THE BID QUESTIONNAIRE.
AND THE BID QUESTIONNAIRE STARTS YOU OFF AUTOMATICALLY.
IT USED TO BE A $300,000, UH, BIDDING CAPACITY.
AND THEN I CAN'T RECALL FOR CERTAIN IF WE INCREASE IT TO 500,000 BECAUSE WHEN I THOUGHT WE DID, IT SOUNDED LIKE WE DIDN'T.
SO I'M NOT REALLY SURE ON THAT PART.
BUT IF WE DID, GREAT, WE DID $500,000 BIDDING CAPACITY AUTOMATICALLY WITH NO FINANCIALS.
THAT'S MOSTLY GONNA BE PROJECTS THAT HAS NO FEDERAL MONEY, NO DB REQUIREMENTS.
UM, ON A CONSTRUCTION PROJECT, IF A PRIME REQUESTS A PROPOSAL, THEY DON'T HAVE A CHOICE BUT TO BID.
IF THEY PULL A PROPOSAL, THEY DON'T HAVE A CHOICE BUT TO BID ON THE PROJECT.
SO IF YOU KNOW OF ANYBODY, NOT JUST YOURSELF THAT'S INTERESTED IN CONSTRUCTION PROJECTS,
[01:45:01]
THEY SEE A PRIME BIDDING, I MEAN, REQUESTING A PROPOSAL, THAT'S WHO YOU WANT TO BE SOLICITING, FIGURING OUT WHAT WORK IS IT THAT THAT PROM SUBCONTRACTS BASICALLY.OKAY? AND THE WAY YOU FIND THAT INFORMATION OUT IS WE CALL IT THE LIST SHOWING ORDER OR, OR ORDER OF BIDS.
AND THAT'S A SCREENSHOT FROM OUR WEBSITE.
WHOEVER BID THE PROJECTS, YOU COULD HIT THAT ORDER OF BIDS, THEN THEY'LL LET IT LIKE FROM THE TOP, THE BID TO THE, THE LOWEST ONE, WHOEVER SUBMITTED THE BIDS, ON THE BIDS OR LIKE, UH, FOR ENGINEERING SERVICES, THERE WOULDN'T BE BIDS WOULD BE WHATEVER PROPOSALS.
ALRIGHT, BACK TO THE HOMEPAGE AGAIN.
WHO WANTS TO HEAR ABOUT ENGINEERING?
ALL RIGHT, LET'S GO FORWARD, JOE.
ALL RIGHT, THIS IS LIKE, AGAIN, THROUGH OUR WEBSITE, HOW TO DO BUSINESS.
YOU HIT ENGINEERING ARCHITECTS AND THEN YOU HIT THAT LINK AND THEN YOU OPEN UP AND IT BRINGS YOU TO, TO THIS PAGE.
ALRIGHT? AND THEN THERE'S WHERE EY LEAVES YOU INFORMATION ON DIFFERENT OPPORTUNITIES FOR ENGINEERING ENGINEERS, ARCHITECTS, AND SURVEYORS.
AND THEN IF YOU, THOSE FIRMS WHO ARE NOT QUANTIFIED WITH OUR ENGINEERING SERVICES, IF THERE'S A PLACE FOR YOU WHERE YOU CAN DO THAT, REGISTER YOUR BUSINESS, THEN YOU KNOW, WHATEVER OPPORTUNITIES YOU'RE LOOKING FOR.
THERE'S WHERE THAT, WHERE IT SAYS, UH, PROJECTED CONTRACTS, PROJECTED CONTRACTS, UH, CONSULTANTS SELECTED, AND PRICE ALL KINDS OF INFORMATION.
THAT'S WHERE I MENTIONED THE BEGINNING TO BECOME REAL FAMILIAR WITH THAT WEBSITE SO IT WILL BENEFIT YOUR BUSINESS.
OKAY? SO EVERYTHING, UM, ON THE PROFESSIONAL PROCUREMENT SIDE, AT LEAST FOR ENGINEERING, IS DONE IN WAVES.
OKAY? AND SO RIGHT NOW WE ARE, WE'RE STARTING AT WAVE FOUR FOR THE CONTRACTS OUT OF THE, UH, PEPS DIVISION.
UM, JUST BETWEEN, OH, THIS IS LIVE STREAM.
WELL ANYWAY, JUST KEEP JUNE 20TH IN MIND.
WE'RE STARTING, UM, TOWARDS THE END OF JUNE.
YOU'LL SEE THE PROJECTS ARE ALREADY OUT THERE, BUT IT'S TECHNICALLY ADVERTISED TOWARDS THE END OF JUNE WHERE YOU CAN START RESPONDING TO THE, UH, RFPS.
AND SO WHEN YOU GO TO THE PEPS WEBSITE, THEY LIST THE PROJECT SIMILAR TO THE CONSTRUCTION WEBSITE, BUT YOU ALWAYS WANNA MAKE SURE YOU'RE LOOKING AT THE, THE CORRECT FISCAL YEAR.
SO WE, IN 2024, YOU CLICK THAT FOR THE PDF OF ALL THE PROJECTS COMING UP AND IT'LL SPECIFY BASICALLY THE WAVE THAT THE PROJECTS COMING UP IN THE TYPE OF PROJECT.
SOMETIMES IT MAY HAVE THE, UH, DOLLAR VALUE OF THE PROJECT, BUT WITH PEPS, YOU ARE ALWAYS HAVING TO GO BACK AND LOOK SO YOU CAN FIND OUT THAT JUNE 20TH DATE WHEN THE PROJECT'S GONNA BE ADVERTISED.
SO WITH PEPS, UM, IT'S A QUALIFICATION BASED SELECTION CRITERIA.
YOU'RE GONNA BASICALLY BE PRE-CERTIFIED OR ADMINISTRATIVELY QUALIFIED.
UM, YOU KNOW, YOU'RE GIVEN ALL OF YOUR INFORMATION SO THEY CAN MAKE THAT DETERMINATION AND YOU'RE BASICALLY CERTIFYING WHICH PERSONNEL, UM, CAN DO PARTICULAR AREAS OF WORK WITHIN YOUR FIRM.
SO THAT'S WHERE THOSE WORK CATEGORIES COME IN AT.
UM, THE ADMINISTRATIVE QUALIFICATIONS A PROCESS THAT THAT THAT WE USE TO VERIFY.
UM, THE FIRM HAS INDIRECT COSTS.
SO FEDERAL AND STATE, AND IF I'M NOT MISTAKEN, SOMETIMES THAT SOMETIMES THE AQ PROCESS, ADMINISTRATIVE QUALIFIED, UM, YOU'LL SEE LIKE A LIST OF NON-ENGINEERING FIRMS. SO PEPS HAS ON THEIR WEBSITE A DIRECTORY OF, OF FIRMS THAT ARE PRE-QUALIFIED, PRE-CERTIFIED.
I GET THE PRE-CERTIFIED AND THE PRE-QUALIFIED MIXED UP INSTRUCTION IS PRE-QUALIFIED.
PEPS IS PRE-CERTIFIED AND ADMINISTRATIVE QUALIFIED, BUT THEY HAVE A DIRECTORY OF THOSE FIRMS. UH, THINGS YOU WANNA CONSIDER WHEN YOU GET THE SOLICITATIONS, THE BUDGET, THE BUDGET IS ALWAYS A BIGGIE, ALWAYS A BIG ONE.
I JUST GOT TO HAVE A DISCUSSION WITH SOMEBODY ABOUT THAT THE OTHER DAY WITH PEPS, THE NS CODES, AS I JUST TOLD YOU, YOUR NEXT CODES, YOU WANNA MAKE SURE YOU HAVE THE RIGHT NS CODES AND OF COURSE THE WORK CATEGORIES THAT PEPS HAS ALREADY QUALIFIED YOU FOR.
NOW, ENGINEERING FIRMS, I'M GONNA TELL YOU, UM, WE HAD TO, WE WAS LOOKING AT A FIRM THAT WAS APPLYING FOR DB CERTIFICATION AND THE OWNER DID NOT HAVE A BACKGROUND IN ENGINEERING, DID NOT HAVE A DEGREE IN ENGINEERING, BUT THE ENTIRE BOARD WAS MADE UP OF ENGINEERS.
OKAY? NOW UNFORTUNATELY THIS RESULTED IN A DENIAL OF CERTIFICATION AND THE, UM, FIRM APPEALED
[01:50:01]
TO U-S-D-O-T IN WASHINGTON DC AND BASICALLY WHAT THE OWNER IS SAYING IS, HEY, THIS IS MY COMPANY.IT'S AN ENGINEERING COMPANY, IT'S MY COMPANY.
I SIT ON THE BOARD, I CONTROL THE BOARD, I MAKE ALL THE DECISIONS.
BUT THE MATH FOR US DOESN'T ADD UP.
HOW YOU, HOW DO YOU MAKE ALL THE DECISIONS WITHOUT A BACKGROUND IN ENGINEERING? YOU KNOW WHAT I MEAN? LIKE YOU ARE RELYING ON THESE PEOPLE TO GIVE YOU THE RIGHT INFORMATION.
AND TRUE ENOUGH, YOU HIRE THE PEOPLE THAT YOU TRUST, BUT HOW DO YOU CONTROL THE COMPANY ABSENT THEM? CAN YOU DO ENGINEERING IF THEY WEREN'T A PART OF THE COMPANY BASICALLY? AND THE ANSWER IS NO.
UM, AND SO WE HAD TO DO A LITTLE DEEPER DIVE AND WE WENT TO PEPS AND WE SAID, OKAY, YOU KNOW, HOW DID THEY GET QUALIFIED FOR THESE WORK CATEGORIES THAT PEPS HAS? AND THEY START TELLING US ALL THE INDIVIDUALS AND THE OWNER'S NAME NEVER CAME UP.
AND I, FORTUNATELY, I'M SAYING FORTUNATELY NOW 'CAUSE I HADN'T HEARD BACK, DOT HAS NOT OVERTURNED THAT DECISION.
SO WHAT DOT DO WHEN A COMPANY APPEALS IS THEY EITHER AGREE WITH THE CERTIFICATION AGENCY OR THEY'RE REMANDED BACK TO THE CERTIFICATION TO LOOK AT IT AGAIN, OR THEY CAN COMPLETELY OVERTURN IT FOR PROFESSOR, AH, PROFESSIONAL SERVICES PROJECTS.
THE AWARD PROCESS IS REFERRED TO AS AS WAVE.
WE TALKED ABOUT THAT AND GO TO OUR WEBSITE.
YOU SEE THE PRE-CERTIFIED FIRMS. MM-HMM,
UM, SOMETHING ELSE I WANNA TELL YOU.
I DON'T KNOW IF WE PUT IT ON HERE OR NOT.
GO AHEAD AND CLICK THE NEXT SLIDE SLIDE, JOE.
OKAY, BEFORE I GET INTO THIS, LEMME TELL YOU SOMETHING.
PRIME PROVIDERS FOLLOW THE RFP TO A T.
OKAY? AND I'M SAYING THAT BECAUSE IF YOU DON'T, YOU CAN GET DISQUALIFIED.
I NOTICE BECAUSE WHEN THEY DISQUALIFY YOU AND YOU GO AND YOU APPEAL, WHICH IS YOUR DUE PROCESS, RIGHT? YOU APPEAL THAT.
YOU SAY, HEY, I DID EVERYTHING.
I PICKED THE DBES THAT, THAT, THAT CAN DO THIS TYPE OF WORK.
YOU WANT A DB TO DO TESTING, I GOT A TESTING DBE, BUT THE TESTING DB THAT YOU CHOSE DOESN'T HAVE THE RIGHT NEXT CODE, RIGHT? SO MOST OF THE ENGINEERING PROFESSIONAL SERVICES NEXT CODES IS GONNA START FIVE FOUR, YOUR TESTING DB THAT YOU CHOSE.
NEXT CODE STARTED WITH TWO THREE AND THEY DO SOIL TESTING, BUT NOT GEOTECHNICAL LABORATORY TESTING.
SO NOW YOU'RE DISQUALIFIED BECAUSE YOU DIDN'T FOLLOW IT AS DBES.
GO OUT THERE ON PEPS WEBSITE AND LOOK TO SEE WHAT N CODES THEY HAVE FOR DBES AND MAKE SURE YOUR CERTIFICATION HAS THOSE NEXT CODES TOO.
YOU CAN'T GO WRONG IF YOU DO THAT BECAUSE THEY'RE GONNA FOLLOW THAT STRICTLY TO A T.
WHAT I DO IN THE SITUATIONS OF DISQUALIFICATION THAT INVOLVES A DBE, PEPS GO THROUGH THEIR INTERNAL PROCESS FIRST AND THEN THEY SEND IT OVER TO ME.
AND THE ONLY THING I DO IS LOOK TO SEE DID YOU FOLLOW THE RULES? YOU KNOW, UM, I SAY THAT'S THE ONLY THING I DO.
I LOOK TO SEE IF YOU GAVE THE DBES AN OPPORTUNITY, BUT IF YOU DIDN'T FOLLOW THE RULES IN ORDER TO GIVE THE DBE AN OPPORTUNITY, THEN PEPS WAS WRITING THEIR PROCESS.
AND SO THE NEXT CODES, AGAIN, THEY'RE ON OUR WEBSITE, THE T DO THE TEXT DOT, DO CMS.COM, THE DIVERSITY MANAGEMENT SYSTEM, YOU CAN GOOGLE T DIVERSITY MANAGEMENT SYSTEM.
THAT'S THE DIRECTORY FOR THE ENTIRE STATE OF TEXAS FOR ALL DBES, REGARDLESS OF WHO CERTIFIED THE FIRM.
SO YOU WANNA MAKE SURE YOU'RE USING THAT AND THAT YOU'RE LOOKING AT THAT AND THAT THAT INFORMATION PROPERLY REPRESENTS YOUR FIRM BECAUSE YOU ARE IN PROFIT, YOU'RE IN BUSINESS TO MAKE A PROFIT.
YOU'RE NOT JUST IN BUSINESS LIKE A BUNCH OF FIRMS THAT'S ON OUR DIRECTORY JUST TO SAY THAT, HEY, I'M IN A DIRECTORY.
IF YOU REALLY WANNA BE ATTRACTIVE TO THE CONTRACTORS, THE PRIME PROVIDERS, AND YOU KNOW THAT THE PROJECT HAS A DB GOAL, GO OUT THERE TO THAT DIRECTORY.
THAT SYSTEM HOUSES THE DIRECTORY PROJECTS, UM, YOUR CERTIFICATIONS, EVERYTHING IS OUT THERE IN THAT DIRECTORY.
SO YOU ALWAYS WANNA MAKE SURE THAT YOU'RE VISITING THAT DIRECTORY.
NOW, UM, ON TEXTILE PROJECTS, WE GOT PROJECTS WITH GOALS AND PROJECTS WITHOUT DB GOALS.
SO THE FEDERAL PROJECTS, LIKE I SAID, ALWAYS HAVE PARENTHESES, AT LEAST THE CONSTRUCTION ONES DO.
I HADN'T REALLY PAID ATTENTION TO HOW THE PEPS ONES LOOK, BUT IF IT'S A PROJECT WITH A GOAL GREATER THAN ZERO, IT'S 10 MINUTE WORK.
ALL RIGHT? SO PROJECTS THAT WITH A GOAL GREATER THAN ZERO AND WE SAY GREATER THAN ZERO.
AND YOU SAY, WHY DO I SAY, WHY DON'T I JUST SAY, HEY, ZERO GOAL PROJECTS.
'CAUSE WE ACTUALLY EVALUATE THE PROJECTS AND THAT'S HOW WE COME UP WITH ZERO AND ZEROS OF VALUE.
SO IF IT'S GREATER THAN ZERO, 1%, 2%, 3%, WHICH WE DON'T HAVE 1% GOALS, BUT IF IT'S GREATER THAN ZERO, THAT MEANS THEY HAVE TO MEET THE GOAL WITH WHAT WE CALL COMMITTED DBES.
MEANING THAT, HEY, THIS IS THE DB FIRM THAT I'M GONNA USE TO MEET THIS GOAL.
ALRIGHT? THE DB MUST BE LISTED IN THE, IN THE DIRECTORY OF CERTIFIED UH, FIRMS. THEY GOTTA HAVE THE NEXT CODES TO MATCH THE WORK.
SO I JUST TOLD YOU ABOUT THE NEXT CODES TO AVOID DISQUALIFICATION,
[01:55:02]
UH, THEY MUST PERFORM A COMMERCIAL USEFUL FUNCTION.WHAT THAT MEANS IS YOU HAVE A NECESSARY AND USEFUL ROLE IN THE TRANSACTION.
THE FORMAL DEFINITION GOES A LOT MORE INTO SUPERVISING, PERFORMING, MANAGING, SUPERVISING, THE WORK INVOLVED WHEN IT COMES TO MATERIALS, UH, DETERMINING QUALITY, QUANTITY, UH, PURCHASING THE, THE MATERIALS, PAYING FOR YOURSELF, UH, UNIT PRICES, ALL OF THAT GOOD STUFF, MAKING SURE IT MEET THE SPECIFICATIONS.
OKAY? UM, TECHNICALLY IF YOU ARE ON A COMMITMENT AND A COMMITMENT, MEANING PRIME SIGNED IT, OR IN YOUR CASE PROVIDER SIGNED IT AND YOU SIGNED IT TO DO A SPECIFIC DOLLAR AMOUNT OF WORK.
THAT'S A COMMITMENT AGREEMENT.
WE KNOW WHAT WORK YOU'RE GONNA DO.
OKAY? WHEN YOU'RE LISTED ON THAT AND TEXT OUT APPROVES IT, YOU ARE REQUIRED TO BE UTILIZED.
NOW I SAID YOU'RE REQUIRED TO BE UTILIZED, BUT THEN SOMEBODY TOLD YOU THERE WASN'T ENOUGH MONEY IN THE BUDGET SO YOUR SERVICES DIDN'T GET INCLUDED IN THE WORK AUTHORIZATION OR SOMETHING LIKE THAT.
THAT'S SOMETHING MOVING FORWARD THAT WE ARE LOOKING TO TRY TO CLOSE THE GAP ON AND FIX.
UM, BECAUSE WE HAVE TO IMPRESS UPON PEPS THAT I GOT SOME FEDERAL MONEY IN HERE, THAT FEDERAL MONEY MEANS I GOT SKIN IN THE GAME.
SO PRIME PROVIDER, YOU DECIDED SOME WORK WASN'T NEEDED, OKAY? IT WASN'T NEEDED.
NOW WHAT DID YOU DO TO GIVE ME SOME MORE DB PARTICIPATION TO MEET THIS GOAL ON THIS CONTRACT? SO THESE ARE THE CONVERSATIONS THAT WE HAVE TO HAVE MORE OF WITH PEPS, OKAY? NOW THE ONLY WAY TO REMOVE A FIRM REALLY IS TO HAVE GOOD CAUSE.
AND THE 49 CFR OUTLINES WHAT THAT GOOD CAUSE IS.
OF COURSE THAT'S GONNA ALWAYS BE GOOD CAUSE MOST OF THE TIME, BUT AGAIN, LOOK AT YOUR SUBCONTRACT AGREEMENT.
IT HAS A DB SPECIAL PROVISION IN THERE.
IT TELLS YOU THE VERY THINGS THAT I'M STANDING UP HERE TELLING YOU RIGHT NOW.
SO IF YOU, IF YOU DO A, UH, A SEARCH OF YOUR CONTRACT, GOOGLE DB SPECIAL PROVISION, IT'S IN THERE.
IT'S LITERALLY IN YOUR CONTRACTS.
THEY GOT 10 DAYS TO PAY YOU FOR SATISFACTORY COMPLETION BASICALLY.
ANY QUESTIONS? DID I BEAT MY TIME? WHAT? I GOT TWO, THREE MINUTES LEFT.
IS THERE A RESOURCE AVAILABLE THAT A CON BETTER EXPLAINS EXACTLY WHAT GOES INTO WHICH DAYS CODE? BECAUSE THE, I MEAN THE LABEL ITSELF IS FAIRLY GENERIC AND WE'VE TO DO SOME RESEARCH AND BETTER UNDERSTAND WE DO VERY SPECIALIZED WORK AND IT DOESN'T REALLY FIT INTO A SINGLE ONE WELL.
SO IF IT DOESN'T REALLY FIT INTO A SINGLE ONE AS FAR AS RESOURCES SBA.GOV, THAT'S WHAT JOE USES.
AND WHEN YOU USE NAI CS.COM, IT'S GONNA TELL YOU LIKE WE USE EXAMPLE REBAR.
SO FOR, UH, IT USED TO BE THAT NEXT CODE 2 3 7 3 1 OH, WHICH WAS HIGHWAY, STREET AND BRIDGE.
SUPER BROAD, RIGHT? DON'T REALLY TELL YOU WHAT THE PERSON DOES.
UM, THEY ALSO USED TO USE THAT FOR REBAR.
SO WHEN THE NEXT COAST CHANGE EVERY FIVE YEARS, THERE'S A CHANGE WHERE THEY MAY TAKE AWAY THE CODE OR THEY MAY TAKE AWAY A DESCRIPTION.
SO YOU HAVE A CODE THAT CLOSELY MATCH YOU BUT DON'T REALLY DESCRIBE WHAT YOU DO.
THAT'S WHERE YOU WANT TO TELL THE CERTIFICATION ENTITY.
UM, IF YOU'RE A CERTIFIED DBE, HEY, HERE'S WHAT WE DO AND THIS IS WHAT MY CERTIFIED DESCRIPTION SHOULD SAY, AND IT'S SUPPORTED BY THIS BROAD NS CODE.
AND THEN YOU GO BACK AND TELL 'EM 26 71 IN, GO READ IT 26 71 IN.
AND THEY GONNA SAY, WAIT, HOW, HOW DO THEY, HOW DO THEY KNOW THE DB REGULATIONS?
IS THERE A LIMIT ON HOW MANY CODES YOU CAN HAVE? NO, THERE'S NO LIMIT.
BUT I HAVE HAD A PRIME CONTRACTOR SAY, YOU KNOW THAT DB HAS 20 CODES.
REALLY IT SHOULD BE WHAT MAKES UP 70% OF YOUR BUSINESS.
THAT'S WHAT IT REALLY SHOULD BE.
THAT'S NOT A WRITTEN RULE ANYWHERE.
THAT'S JUST A PRACTICE THAT WE'VE HAD OVER THE YEARS.
ANY OTHER QUESTIONS? SO DID YOU LEARN ANYTHING NEW?
I USED TO GO TO JOB FAIRS AND GET THE CANDY AND TOSS ALL THE PAPER TO THE SIDE AND NEVER GOT A JOB.
SAY THERE'S GOOD LUCK TO EVERYBODY AND I HOPE Y'ALL MAKE GO PAST THAT THRESHOLD OF $30 MILLION AND THEN THE ENGINEERING FIRMS PREPARES THAT THRESHOLD OF $20.5 MILLION.
SO THAT'S WHERE WE WANT YOU GUYS TO BE.
AWESOME, THANK YOU SO MUCH MARTHA AND JOE, DID WE HAVE ONE MORE QUESTION? IS THERE ANYTHING THAT'S BEING DONE BETWEEN THE CITY OF AUSTIN, OF HOUSTON, THE UNDERSTAND THERE'S SIX TO EIGHT MONTH
[02:00:02]
TIMEFRAME FORWE'RE ACTUALLY LOOKING INTO IT.
UM, AND I'M GONNA HAVE TO KICK IT UP TO, I'M GONNA HAVE TO KICK IT UP TO FEDERAL HIGHWAY ACTUALLY.
AND COURTNEY CAME TO US WITH THAT INFORMATION.
SO WHAT WE ASKED FOR IS A LIST OF FIRMS. NOW I HAVE AN IDEA, BUT I WON'T TELL IT ON LIVE STREAM.
ALRIGHT, SO, UH, THANK YOU MARTHA AND JOE.
SO TO LET YOU ALL KNOW WHERE WE ARE TODAY, THIS IS BREAK, IT'S LUNCHTIME.
LUNCH IS FROM 1145 TO 1245 AND MOST MOVING TO THE TENT AREA AFTER THIS.
SO YOU WILL NO LONGER BE IN THIS ROOM.
YOU GET TO ACTUALLY MOVE AROUND.
UM, A FEW THINGS TO NOTE THERE IS COFFEE, A COFFEE CART AROUND THE CORNER IN THE KITCHEN AREA.
SO IF YOU WANT COFFEE, YOU CAN HEAD THERE.
THERE IS A TACO TRUCK OUT FRONT, TACO MAN 5 1 2.
SO FEEL FREE, WE HAVE A MINIMUM.
EVERYONE SHOULD BUY SOME TACOS.
UH, THE THINGS I'M TRYING TO REMEMBER TO TELL YOU, OH ONE, ALL THE PRESENTATIONS WILL BE EMAILED TO YOU.
SO I KNOW WE SAW YOU TAKING PICTURES, DON'T WORRY.
I'M GOING TO EMAIL THEM TO YOU ALONG WITH RESOURCES AND CONTACT INFORMATION FOR FOLKS.
IF YOU HAVE ADDITIONAL QUESTIONS.
UH, WE HAVE SOME IDEAS OF HOW TO CONNECT YOU ALL IN A BETTER NETWORK TO ANSWER QUESTIONS FASTER THAN WE CAN SOMETIMES.
SO THAT'S IN THE WORKS AS WELL AND WHY IT'S SUPER IMPORTANT.
PLEASE LOOK OUT FOR AN EMAIL FOR US AFTER THIS EVENT.
ONE THING WE DO NOT HAVE COLLECTED FOR EACH OF YOU ARE WHAT YOUR COMMODITY CODES ARE REALLY.
AND WHAT WE WANNA DO IS TO BETTER CONNECT YOU WITH PRIMES BECAUSE WHAT WE GET ASKED IS WHO WAS AT YOUR EVENT AND WHO DOES WHAT.
SO LOOK OUT FOR THAT EMAIL SO THAT WE CAN GATHER THAT INFORMATION AND GET THAT TO YOU.
UM, LAST BUT NOT LEAST, AND THEN I PROMISE I'LL LET YOU GO.
I WANT YOU TO SEE OUR PROCUREMENT STAFF 'CAUSE IF YOU HAVE QUESTIONS ABOUT PROCUREMENT AT A TP, COME LOOK FOR THESE FOLKS.
THEY WILL ALSO HAVE A TABLE IN THE TENT OUTSIDE.
AND SO FEEL FREE TO ASK THEM QUESTIONS IF YOU HAVE IT.
UM, OTHER THAN THAT, WE'RE GONNA ASK YOU ALL TO NOW DEPART THE BOARDROOM AND HEAD OUT.