Chapter 13: Performing a CUF Review


Section 1: CUF Review

In order for a prime contractor to receive DBE goal credit on a project, the DBE must be performing a Commercially Useful Function (CUF). To ensure each DBE firm is performing a CUF, TxDOT must monitor contract activity and certify in writing that DBE firms are performing a CUF. To determine whether a DBE firm is performing a CUF, five elements of the DBE must be considered: management, workforce, equipment, materials, and performance. These areas must be evaluated to make a CUF determination.

A CUF review is required for all DBE firms, including DBE prime contractors, on all federally funded projects (including projects with a DBE 0% goal). This also includes DBE truckers, suppliers, and other vendors where a subcontract is not required.

The CUF review should be completed by the Area Office within 60 days of the DBE's start date of work on a project. The Area Office will submit the completed CUF form with supporting documentation to the DDC, who must review and finalize it within 30 days of receipt.

TxDOT field personnel such as project inspectors and area engineers may conduct CUF reviews and inspect the jobsites to ensure that the DBE firm is performing and managing the work. The reviewer's activities include making observations, interviewing DBE personnel, and documenting all information on the appropriate CUF form.

CUF reviews are accomplished through the use of three different types of CUF review forms, depending on the function of the DBE:

CUF Review Forms 2182 and 2183 are to be conducted by TxDOT personnel. However, CUF Review Form 2669 is to be completed by the material supplier and submitted to the district, along with appropriate supporting documentation. The information received will be used to determine if the material supplier is performing a CUF. District staff will enter the information into DMS.


CUF Review Supporting Documentation

Supporting documentation for any type of CUF review can include any of the following:

The documents referenced above can identify and support who is paying and supervising the DBE's employees, ordering and paying for materials and supplies, as well as whose equipment is being used on the project. These documents, particularly those that pertain to the prime contractor's commitments or the approved DBE subcontract, should be attached to each CUF review as supporting evidence of the findings.

The DDC should verify that a CUF review has been completed for every DBE on every federally funded project and supporting documentation has been entered into DMS or another agreed upon location if the system does not have upload functionality.

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Non-compliance with CUF Requirements

District staff needs to take actions on DBE firms that are presumed not to be performing a CUF. (See Appendix A, Section 3 for sample letter). The prime contractor should be copied on the letter. The DBE firm will be given an opportunity to present evidence and rebut the presumption it is not performing a CUF. The DBE firm has ten days from the date it receives the letter to respond to the District. The district staff will review the rebuttal response, make a determination, and then notify the DBE and prime contractor in writing of the determination. If the CUF determination results in a DBE goal shortfall, the District will need to notify the prime contractor in writing that it will need to find a substitute DBE or provide good faith efforts to meet the project DBE goal.

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