SMALL DIVERSE BUSINESS (SDB) PARTICIPATION
This program is derived from the State System of Higher Education, Commonwealth of Pennsylvania, and is applicable to designated contracts to be administered by the State System of Higher Education for maintenance, repair, alteration, or improvements to existing and/or construction of new facilities. It is important to note that the university's SDB provisions are unique to the State System of Higher Education contracts.
Certified Small Diverse Businesses are encouraged to submit bid proposals directly to the university if they are a prime contractor. As an SDB firm, they are not required to provide any documentation regarding proactive solicitation. However, when submitting the Bid Proposal, all SDB firms must indicate on the SDB Solicitation Form that they are a certified SDB firm and record their SDB number at the place indicated.
The Contract Specialist will review the documentation submitted and perform evaluations which will determine whether or not a proactive solicitation and subsequent commitments were made which meet or exceed the Reasonable Effort Award Amount (REAA), or for which reasonable explanations were provided. If accepted by a certified SDB firm, commitments made at the time of receipt of bid proposals must be maintained throughout the term of the contract, unless a change in commitment to these firms is pre-approved by the university.
The following information can be used as a guide to ensure that the SDB Solicitation Form and its support documentation are submitted correctly with your bid. This document is our effort to aid you in the bid preparation process since the SDB information is sometimes the item that determines the responsiveness of the lowest bidder. For questions regarding the scope of the project in question, please do not hesitate to call the design professional as listed on the specifications. For questions regarding the actual bid form and documentation contact Facilities Project Services at (610) 683-4120.
REAA (Reasonable Effort Award Amount) must be adhered to and is strictly evaluated. Percentages assigned are to be considered the minimums to achieve in quotations. Two like/kind services and/or materials (specifications) cannot add up to these minimums individually. Kutztown University and the State System of Higher Education has the exclusive and sole right to establish the percentage for any and all contracts it bids.
EXAMPLE: If the REAA for the plumbing prime was set at $10,000 you must have one or more SDB firms that add up to this dollar amount. Two or more subs providing a total of $10,000 for one specification, for example, piping, will not qualify. Each specification taken individually must, when added together with other specifications, add up to the REAA ($10,000). What would qualify would be a contractor providing $3,000 in piping and another contractor providing $7,000 in an excavation. Also, one contractor providing $10,000 of piping would qualify.
a) one specification with one contractor at $10,000 or
b) several specifications where the total of the specifications add up to $10,000 would qualify.
Every contractor that is an SDB must be registered by the Department of General Services (DGS) and have a certification number. The omission of SDB certification numbers on the SDB Solicitation Form may be reason enough to reject your bid. This area is the most frequently missed
When soliciting quotations from both SDB and non-SDB firms, it is preferred that your request for quotation be made in writing. Submit copies of any and all solicitations made since this is considered proof of your effort to comply. Fax solicitations are acceptable and provide a vehicle of proof in that most have a date/time stamp indicating when it was sent and verifying that the transmission was received. Keep a phone log for documenting conversations with the SDB firms. If the SDB refuses to return the solicitation letter explaining their refusal to provide a quote, this information can be used to verify with the SDB during the review process. Mass mailings to large numbers of certified SDBs which are intended to provide notice of a contractor's interest in bidding a construction project will not be deemed solicitation, but rather will be treated as informational notification only. The bidder must contact the certified SDB firms directly and request written quotes for the work or materials the firm plans to subcontract or purchase to satisfy the REAA. Written solicitations must include sufficient bid specifications to allow the vendor to return a price quote to you. Sending a generic statement that you need "construction materials" or "parts" for a project is NOT considered a written solicitation for pricing against the REAA. Such generic statements are considered "general announcements". Contractors should provide a list of products or services for which they wish to receive quotes. The same list should be mailed to SDB and non-SDB firms from whom you are soliciting quotes.
If you receive a verbal quote make sure that the firm follows with a hard copy by mail or fax to back this up. Prices must appear as written on your bid form (SDB Solicitation Form). After you have received written quotes from all (both SDB and non-SDB), select the low responsive bidders and write your commitment letter to each selected firm. This will be your proof that you meet or have attempted to meet the REAA cited in the Special Instructions to Bidders/Proposers. Failure to make written commitments for the REAA and inclusion of those commitment letters with your bid proposal may result in rejection of your bid as non-responsive.
You may solicit quotes from non-SDB contractors. If these quotes come in lower, you may use them but make sure that you get a hard copy of the quote and attach it to your bid form to verify that they are in fact lower. Please note that you must still solicit and attach SDB quotes. (SDB contractors/vendors will be notified of the contract award to ensure their use during the contract.)
Completion of the Solicitation Information Sheet
Fill in all spaces and do not leave blank spaces.
Make sure that you provide the complete firm information: name, address, phone #, contact person, SDB number, scope/materials, and solicitation date.
The Estimated Value column must have an estimated value of the solicitation that you are seeking from the SDB firm. Unless this box is completed, your bid may be considered non-responsive. We have no way of estimating what your
intention was for this solicitation. Your estimating department should provide you with a "guesstimate" for this form.
The Quotes section must be entirely completed detailing all applicable quote information.
If in the Commitments section a commitment is noted as a "Yes", this is your commitment to the SDB firm that if awarded a contract, you will be utilizing their company as a sub-contractor/supplier for the amount they quoted you. Since you marked off "Yes", you MUST provide a copy of your correspondence to them showing that you have officially committed to them in writing.
Make as many copies of the SDB Solicitation Form as you need to document the SDB firms you solicited for bids. The more information is the better.
Material to be Submitted with Bid Proposal Form
It is essential that all backup data be included with your SDB Solicitation Form. This includes all faxed requests for quotes that you submitted to vendors, all written quotes received from vendors and most importantly, the commitment letters to selected vendors.
All commitments MUST be in writing and you must attach a copy of your written commitment letter(s) with your bid to those firms who have submitted the lowest responsive written bid(s). You must award at least the REAA amount when qualified bids have been received from SDB firms. The commitment letters can be to the low responsive non-SDB firm or to the low responsive SDB firm. Commitment letters may be worded to be conditional upon receipt of an award of a contract from the university. Remember, commitment letters should total the REAA cited in the Special Instructions to Bidders/Proposers.
Bidders who cannot clearly demonstrate that written commitments have been made that equal or exceed the REAA at the time of receipt of bids must submit, at anytime prior to the time of and at the place designated for the bid opening, an explanation of why such commitments could not be made. The explanation should indicate the proactive efforts taken to solicit participation and demonstrate that the bidder did not engage in discriminatory practices in solicitation and commitment of subcontracts and/or supply contracts.
If you do not receive bids from any SDB firms to your solicitation, you still need to record the information listed above on the SDB Solicitation Form and confirm that no quotes were received. A summary of your solicitation efforts may also be submitted providing an account of your follow-up efforts to determine if the vendor was going to submit a bid.
SDB Documentation Review
- Review the SDB Requirements Instructions packet. This information is included in the Invitation for Bids/Request for Proposals packet.
- Read carefully - if you have any questions, please call Craig Kleinsmith, Contract Specialist, 610-683-4602.
- Fax/email your solicitations letter to the SDB firms. This shows that you have made the solicitation and that the SDB firm received the letter. Attach your fax/email confirmations with your bid.
- Make sure that your solicitation letters are complete and descriptive. If the SDBE firm has all the necessary information, they will be able to give quotations.
- Be pro-active in your solicitations! If an SDB firm does not respond to your fax/email, call and ask why they haven't submitted a quote. If they can't submit a quote, i.e., workload, location, etc., ask them to note that on your solicitation letter and have them fax/email this back to you. This is considered a reasonable effort of solicitation.
- Attach ALL information required with the solicitation form. MORE IS BETTER.
- Attach all letters of commitments.
- Check the Department of General Services (DGS) website for a listing of potential SDB firms.
Failure to submit the required information and documentation as shown on the SDB Solicitation Form related to SDB solicitation, quotes, and commitments is sufficient to cause for rejection of the bidder's bid as non-responsive. Failure to submit all solicited and/or unsolicited quotes shall also be sufficient cause for rejection of the bidder's bid as non-responsive.
The university will review the documentation submitted and perform evaluations which will determine whether or not proactive solicitation and subsequent commitments were not made which total or exceed the REAA, or for which acceptable reasonable explanations were not provided, and will result in a finding of non-responsiveness to the bidding criteria and will result in rejection of the bid.
MOST IMPORTANT! If you have ANY questions regarding the bid package or the corresponding bid form please do not hesitate to give me a call. An unanswered question can mean the difference between acceptance or rejection of your bid. Failure to demonstrate a proactive effort in soliciting quotes from SDB firms will result in rejection of your bid.
PREVAILING WAGE REQUIREMENTS
The Pennsylvania Department of Labor and Industry, through the Bureau of Labor Law Compliance, determines prevailing wage rates for the construction industry and enforces the rates and classifications for construction projects of $25,000 or higher when public funds are involved. For more information about the Regulations for Pennsylvania Prevailing Wage Act go to the website at http://www.dli.state.pa.us/.
The only form, or format, that is acceptable to the university is the Weekly Payroll Certification for Public Works Projects (LLC-25 REV 10-03) form. All other forms and formats used may not be accepted. If a Payroll Certification form contains employee social security numbers or home addresses, the entire Application for Payment may be rejected and returned to the contractor for correction and resubmission. This rule also applies to subcontractors.
Contractors should complete and submit to the university a Payroll Certification for Public Works (Prevailing Wage Pay Sheet PDF) each week during the construction project. If there is a week that the contractor did not perform any work, the contractor is still required to submit a certification on which is written "no work completed during this time period." The rates on the Payroll Certifications must be compared with the rates assigned to the project/contract. Upon discovery of non-compliance of the Prevailing Wage requirements, the prime contractor will be notified in writing of the non-compliance and given a time limit for correction and resolution. If the issue is not resolved or corrected, the Department of Labor and Industry will be notified. Contractors that intentionally violate the Pennsylvania Prevailing Wage Act may be debarred from contract awards for a period of time.
The Solicitation Sales Tax Exemption Information
Kutztown University is exempt from all Excise Taxes. This also applies to Pennsylvania Sales Tax, however, any contractor doing business with the university remains liable for the payment of Sales and Use Tax on all materials and fixtures purchased or used for the purpose of fulfilling the contract, even though the work is being performed for a governmental instrumentality.
Kutztown University is part of the Pennsylvania State System of Higher Education and is an instrumentality of the Commonwealth of Pennsylvania. The sale at retail to a construction contractor of building machinery and equipment that are transferred to the State System of Higher Education may possibly be excluded from some or all sales tax. Forms and directions on obtaining exclusions from sales taxes may be obtained from the Pennsylvania Department of Revenue. Please visit their website at http://www.revenue.pa.gov/. All questions, requests for information or clarifications should be directed to the Pennsylvania Department of Revenue. The Pennsylvania Department of Revenue is the sole authority as to whether any specific item is or is not tax-exempt.
STEEL PRODUCTS PROCUREMENT ACT
Pursuant to the Steel Products Procurement Act of March 3, 1978, P.L. 6, as amended by Act 144 of July 9, 1984 (73 P.S. Section 1881 et seq.), only steel products as defined in the Act shall be used or supplied in the performance of the contract or any subcontracts thereunder.
Steel products are defined as rolled, formed, shaped, drawn, extruded, forged, cast, fabricated or otherwise similarly processed, or processed by a combination of two or more such operations, from steel made in the United States by the open hearth, basic oxygen, electric furnace, Bessemer or other steel making process and shall include cast iron products and shall include machinery and equipment listed in United States Department of Commerce Standard Industrial Classification 25 (furniture and fixture), 35 (machinery, except electrical), and 37 (transportation equipment) and made of, fabricated from, or containing steel components.
The university shall not provide for, or make any payments to, any person who has not complied with the Act. Any such payments made to any person by the university which should not have been made as a result of the Act, shall be recoverable directly from the contractor, subcontractor, manufacturer or supplier who did not comply with the Act by either the university, PA State System of Higher Education, or the Attorney General of Pennsylvania upon suit filed in the Court of Common Pleas of any county in which such contract was executed or in whole part performed.
In addition to the withholding of payments, any person who willfully violates any of the provisions of the Act shall be prohibited from submitting any bids to any public agency for a period of five (5) years from the date of the determination that a violation has occurred. In the event the person who violates the provisions of the Act is a subcontractor, manufacturer or supplier, such person shall be prohibited from performing any work or supplying any materials to a public agency for a period of five (5) years from the date of the determination that a violation has occurred. The contractor shall include the provisions of the Steel Products Procurement Act in every subcontract and supply contract so that the provisions of the Act shall be binding upon each subcontractor and/or material supplier.
Where trade names, catalog number and manufacturers of materials or equipment are specified, they are mentioned therein for the purpose of establishing a standard of quality, performance, and appearance, and for establishing a standard of competitive bidding. The use of these descriptive names, numbers, etc. will not relieve the contractor with compliance with all respects of the Act.
Guidelines to the Steel Products Procurement Act
What items are subject to the Steel Products Procurement Act? All items that are:
- Incorporated into the project: Items that will not be removed upon completion of the project.
- Produced in the United States: If you are unable to find a steel product that contains steel manufactured in the United States in sufficient quantities for the project, submit Form ST-4 (Not Domestically Manufactured: Contractors) with the names and addresses of suppliers that informed you that said product is not made with United States Manufactured Steel, to this office. Your claim will be researched and, upon written permission of the university, you may incorporate the product.
- A Steel Product which the Act defines as all items that contain steel and/or cast iron products, and shall include the machinery and equipment that is listed in the U.S. Department of Commerce Standard Industrial Classification 25 (furniture and fixture), 35 (machinery, except electrical) and 37 (transportation equipment), and made of, fabricated from, or containing steel components. CONTACT THE UNIVERSITY PROJECT REPRESENTATIVE FOR A DETERMINATION.
Contractors are required to present certifications with each steel product they intend to incorporate into their project. CONTACT THE UNIVERSITY PROJECT REPRESENTATIVE FOR THE APPROPRIATE FORMS.
If 100% of the steel is identifiably marked as manufactured in the United States (i.e., stamped Manufactured in the United States), all that is necessary is that the contractor submits Form ST-1 certifying that the product is identifiably marked as provided.
If less than 100% of the steel is identifiably marked as manufactured in the United States, the type of certification required depends on whether or not the steel product is structural steel.
If it is structural steel, (which is defined as steel products used as a basic structural element of a decking, steel stairways, steel reinforcing bars, steel structural lintels, steel pipes, steel joists, etc.) the party who intends to incorporate the steel product must complete Form ST-1 and product "documentation including, but not limited to, invoices, bills of lading, and mill certification that the steel was melted and manufactured in the United States." (Section 5(a) of the Act).
If it is not structural steel (i.e., door frames, window frames, machinery, and equipment, or any product which is not considered by the university to be structural) the contractor must provide Form ST-1. The Contractor must also provide Form ST-2 signed by the fabricator, stating that the steel products contained in the item are manufactured in the United States. The fabricator is the firm that actually assembles the components of the product, as opposed to a Supplier or Distributor who simply stocks and sells the product.
If a product is known to contain both foreign and United States Steel, such products shall be determined to be a United States Steel product only if at least 75% of the cost of the articles, materials, and supplies have been mined, produced, or manufactured, as the case may be, in the United States.
As long as 100% of the steel in an item is U.S. Manufactured Steel, then the item is in compliance with the Act no matter where the non-steel components of the item are manufactured. However, if the product contains both American and foreign steel, then it must be shown that 75% of the product contains material produced or manufactured in the United States, INCLUDING EVERY MATERIAL IN THE ITEM (steel, rubber, plastic, wood, etc.).
If both foreign and domestically manufactured steel are found in an item, have the fabricator execute Form ST-3 (75% U.S. Manufacture Certifications: Fabricator). BE SURE HE/SHE WILL COMPLETE SAID FORM BEFORE PURCHASING THE PRODUCT. On the said form, the fabricator will certify the total costs of all materials used in the product, as well as the total cost of the materials used in the product that is produced/manufactured in the United States. If 75% or more of the materials are domestic, no further certification is required.
Exempt Machinery & Equipment Steel Products:
PUBLIC WORKS EMPLOYMENT VERIFICATION ACT
The Commonwealth of Pennsylvania enacted Act 127 of 2012, known as the Public Works Employment Verification Act ("the Act'), which requires all public work contractors and subcontractors to utilize the Federal Government's E-Verify system (EVP) to ensure that all employees performing work on public work projects are authorized to work in the United States.
The Department of General Services (DGS) Public Works Employment Verification Compliance Program is responsible for the administration, education, and enforcement of the Act. It provides contractors and subcontractors with educational outreach, conducts investigations when complaints are received, and conducts random audits to ensure compliance with the requirements of this Act. Contracts resulting from this solicitation will fall under the Act and the associated DGS compliance program.
Information on the Act and DGS program are available on this DGS website:
Contractors will be required to sign and submit to the university, as a pre-condition of being awarded a contract, the Commonwealth of Pennsylvania Public Works Employment Verification Form.
Subcontracts between a public works contractor and its subcontractors shall contain notification of the applicability of the Act, information regarding the use of the EVP, and reference to DGS website at www.dgs.state.pa.us to obtain a copy of the required Commonwealth of Pennsylvania Public Works Employment Verification Form. Additionally, Contractors will require each of their subcontractors to sign and submit to the university, prior to that subcontractor performing work at the project site, the Commonwealth of Pennsylvania Public Works Employment Verification Form.
The Commonwealth of Pennsylvania Public Works Employment Verification Form is available on DGS' website and/or through the university.
Contractors will comply with all other requirements of the Act, and also require each of their subcontractors to comply, which includes maintaining documentation of continued compliance with the Act by utilizing the EVP for new employees hired throughout the duration of the public works contract.