Although MITA opposes the idea, MDOT will implement a new subcontract requirement for hiring Disadvantaged Business Enterprise (DBE) truckers on MDOT let projects. This new DBE trucker subcontract requirement will be effective with the December 3, 2021 bid letting and then all subsequent bid lettings.
When issuing the subcontract directive, MDOT indicated that they believe that utilizing a subcontract will be a positive for DBE truckers as it will provide them some confidence of their performance on projects, and that it will serve them from a business perspective when pursuing financial loans.
MITA’s concerns with the subcontract idea were focused around the additional financial and administrative burdens DBE truckers may experience when complying with all the state and federal contract requirements that come with a “subcontract”. MITA’s concerns include, but are not limited to:
• Potential delayed payment as subcontracts have a “pay when paid” clause
• Potential bonding requirements/costs
• Potential additional auto/general liability insurance requirements/costs
• Workmen’s Compensation Insurance requirements/costs for DBE owner-operators
• Prevailing wage requirements (certified payrolls, LCPtracker utilization)
• Use and processing of sworn statements and waivers for payment
• Potential liability for contract LDs for subcontract non-performance
• DBE trucker sub-sub contracting limitations (DBE trucker can only broker 50% of subcontract amount)
MITA believes the additional financial and administrative burden DBE truckers could experience as a result of this “subcontract” requirement may actually serve as a disincentive for DBE truckers to get involved on MDOT let projects.
It is MITA’s understanding that this “subcontract” requirement will apply to all DBE truckers hired to work on a project except for DBE truckers associated with DBE suppliers.
However, if a DBE trucker brings material onto the project site under a DBE supplier arrangement, and then that same DBE trucker hauls other materials off the project site, that DBE trucker must be under a subcontract for the work of hauling the materials off the project site.
Click here to view MDOT’s Contractor Announcement, Special Provision for Utilizing DBE Trucking Vendors
Click here to view MDOT’s updated Form 1386 (10/21) Post Certification of Subcontract Compliance document
If you have any questions or comments, please contact Glenn Bukoski or Rachelle VanDeventer at the MITA office at 517-347-8336, or by email at firstname.lastname@example.org or email@example.com.