1. z
presented by Tom Sigmund
Ohio Society of CPAs Mega Tax Conference
December 7-8, 2015
Dos +
DON’Ts
The
of DBE
Procurement
Presented by Don Gregory
+ Mike Madigan
CFMA | February 20, 2018
2. z
YOURSELF
Do you have an employee
who may become disgruntled?
Do you do public work with
set-asides?
Do you have an interest in
avoiding civil liability?
Do you want to avoid jail?
9. z
What are the
“red flags” of
DBE Fraud?
DBE owner lacks
background, expertise,
or equipment to perform
subcontract work or
provide supplies
Employees shuttle back
and forth between prime
contractor and DBE-
owned business payrolls
Business names on
equipment and vehicles
are covered with paint or
magnetic signs
10. z
There are financial
agreements between
the prime and DBE
contractors
The prime contractor
and DBE have joint
bank accounts
There is an absence of
written contracts
DBE owner never
present at jobsite
Prime contractor always
uses the same DBE
Orders and payment for
necessary supplies are
made by individuals not
employed by DBE-owned
business
Prime contractor
facilitated purchase of
DBE-owned business
12. z
A DBE performs a commercially
useful function when it is
responsible for execution of the
work of the contract and is
carrying out its responsibilities by
actually performing, managing,
and supervising the work involved
17. z
The personal net worth of
the person at the time of
initial application for
certification must be less
than $250,000
EDGE Principles
Must not exceed
$750,000 during any
time of certification as
an EDGE business
enterprise
26. z
Want re-roof and other repair work to
be goods or services exempt from
Chapter 153 capital improvements
DAS is pushing OFFC for more “repair work”
28. z
DOs
Document Your
Good Faith Efforts1
Place DBEs on Solicitation Lists2
Remain Competitive in the DBE
Procurement Market3
Maintain Relationships with Reputable DBEs4
Find Replacement DBEs5
32. z
In short, DBEs should:
Possess Required Experience1
Be Financially Independent2
Own or Rent Its Own Equipment3
Handle Its Own Payroll, Invoicing +
Negotiations4
33. z
DBE should not be a
mere pass-through or
middle man between
performing parties
35. z
United States ex rel. Scollick
v. Narula, 2017 WL 3268857
Surety and broker face liability for principal’s
alleged violations under the False Claims Act
Case is still pending but Court denied initial
attempts to dismiss the case
36. z
Donald W. Gregory, Director
Kegler Brown Hill + Ritter
dgregory@keglerbrown.com
keglerbrown.com/gregory
614-462-5416
Mike Madigan, Director
Kegler Brown Hill + Ritter
mmadigan@keglerbrown.com
keglerbrown.com/madigan
614-462-5478