Joint Ventures. Counting DBE Participation & Assessing Commercially Useful Function (CUF) Presented by: Eliz. Federal Aviation Administration

Transcription

1 Counting DBE Participation & Assessing Commercially Useful Function (CUF) Joint Ventures Presented by: Eliz Presented by: Dolores P. Leyva DBE/ACDBE Compliance Specialist for Southwest Region

2 Overview Managing Participation in Opportunities Basics Requirements of a JV Counting and Monitoring Expectations Guidance Updates 2

3 Managing Participation in Opportunities Direct Ownership Arrangement (f) Direct ownership arrangement means a joint venture, partnership, sublease, licensee, franchise, or other arrangement in which a firm owns and controls a concession. 3

4 Managing Participation in Opportunities Are all structures equal in all situations? NO. Evaluate each opportunity to determine if goal is warranted and what types of participation are best suited for that opportunity. Does the ACDBE participant have to be certified in a specific type of work? YES. ACDBE firms must be certified in the type of work to be undertaken by the JV. 4

5 Basics Requirements of a JV Combine their property, capital, efforts, skills and knowledge. What is a distinct, clearly defined portion of the work of the contract? What does whose shares in the capital contribution, control, management, risks, and profits of the joint venture are commensurate with its ownership interest mean? 5

6 Basics Requirements of a JV The ACDBE s participation in each of these five areas should be proportionate to the claimed ownership. Ownership% = Capital Contribution % Ownership% = Control % Ownership% = Management % Ownership% = Risks % Ownership% = Profit % 6

7 Basics Requirements of a JV Content of a JV Agreement Examining the content Capital Contributions Loans between the Parties Profits Risks Management Control ACDBE s Role 7

8 Monitoring Expectations ACDBE s role in JV must be proportionate to it s ownership interest and a distinct, clearly defined portion of the contract. Comprehensive role in the complete operation of a separate location is easier to count. Roles relating to performance of an activity in support of the overall operation may present a challenge. 8

9 Counting and Monitoring Counting ACDBE participation in a Joint Venture 49 CFR (d) states that when an ACDBE performs as a participant in a joint venture, count a portion of the gross receipts equal to the distinct, clearly defined portion of the work of the concession that the ACDBE performs with its own forces toward ACDBE goals. 9

10 Monitoring Expectations What does perform with its own forces mean? Employed directly and controlled by the ACDBE May the work performed by employees of the JV entity or a non-acdbe participant in the JV count as performed by the ACDBE s own forces? Higher Burden of Proof the employees are employees of he JV Even Higher Burden of Proof the employees are employees of non-acdbe Simply having the employees on the ACDBE payroll does NOT remove the burden proof. 10

11 Counting and Monitoring Counting ACDBE Participation in JV Agreements Capital Contributions = X% Control X% Certified ACDBE (in applicable trade) with X% Ownership Management X% Risks Distinct, Clearly Defined Portion of the Work ACDBE Credit X% Profits X% 11

12 Monitoring Expectations Ongoing monitoring of Joint Ventures is important and required Monitoring activities include: Annual verification of ACDBE certification eligibility Periodic review of meeting minutes, capital contributions, loans and loan repayments, distributions, activity reports, etc. Periodic interviews with managers, participants, and employees On-site visits to the operation Review of any other documentation necessary to ensure compliance 12

13 Guidance Updates Status of previously proposed Q&A Revisiting areas of concern Updated 2008 JV Guidance Information Sharing Personal Guarantee Need Your Input National Airports Civil Rights Policy & Compliance Marcus England 13

14 Thank You! 14