Chapter 12: Performing a CUF ReviewAnchor: #i999143
Section 1: Performing a CUF Review
To ensure each DBE firm is performing a CUF, the LG 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 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 on all federally-funded projects, including projects with a 0% DBE goal. This also includes DBE truckers, suppliers and other vendors where a subcontract is not required.Anchor: #i999158
LG field personnel, such as project inspectors, conduct CUF reviews and inspect the jobsites to check that the DBE firm is performing and managing the work. The reviewer’s activities include making observations and interviewing DBE personnel. CUF reviews should be initiated within 60 days of the DBEs start of work on a project and completed within 30 days by the LG once all documentation is received.
CUF reviews are accomplished through the use of DBE Program Commercially Useful (CUF) ( Form 2182) and Commercially Useful Function Review – Material Supplier ( Form 2669). CUF reviews must be performed for all DBEs, including race-neutral DBEs and DBE prime contractors on federally-funded projects with and without DBE goals. DBE material suppliers are required to complete Commercially Useful Function Review – Material Supplier (Form 2669) and furnish copies of certain items such as purchase orders, invoices, cancelled checks, and inventory lists.
The following actions should be taken:
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- Conduct a CUF review on every race-conscious and race-neutral DBE. Anchor: #JQEKWHYM
- CUF reviews should be conducted when the DBE is scheduled to perform the major portion of its work. Anchor: #CHSYWJIM
- Attach appropriate supporting
documentation of findings, which may include:
- Executed subcontracts Anchor: #NUSIAMDL
- Certified payrolls Anchor: #FTCNDPVS
- Invoices Anchor: #KMOLICRX
- Purchase orders Anchor: #RKYGWNCF
- Cancelled checks for material payments Anchor: #LCPSJRJO
- Material tickets / delivery slips Anchor: #QFIXJDXK
- Trucking logs Anchor: #OFCFWJTH
- Delivery tickets and equipment title of ownership and/or lease agreements
The above documents identify and support who is paying and supervising employees, ordering and paying for materials, and whose equipment is 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.Anchor: #i999240
Non-Compliance with CUF Requirements
LG staff needs to notify DBE firms that are presumed not to be performing a CUF. 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 LG. The LG 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 LG 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.
Non-compliance determinations include the following possible outcomes:
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- No violation of federal regulations found. Anchor: #ITEBDMJH
- Violations of federal regulations found. The prime contractor will be determined to have a deficiency in DBE participation corresponding to the dollar value of the DBE’s work that did not meet federal regulations. The prime contractor will need to submit good faith efforts to meet the project DBE goal. The LG may recommend and/or conduct a full certification review of a firm’s DBE status which could lead to the removal of that firm from the DBE program if it is determined that violations indicate a lack of independence or control of the DBE firm by its owner.