CITY OF OAKLAND

ONE FRANK H. OGAWA PLAZA• 6TH FLOOR• OAKLAND, CALIFORNIA 94612

OFFICE OF THE CITY ATTORNEY Barbara J. Parker, City Attorney

OFFICE OF THE CITY ADMINISTRATOR Claudia Cappio, Assistant City Administrator

Phil Tagami California Capital and Investment Group 300 Frank Ogawa Plaza, Suite 340 Oakland, CA 94612

(510) 238-3601

(510) 238-3301

July 2, 2015

Re: Clarification of interpretation issues regarding Construction Jobs Policy for Public Improvements

Dear Mr. Tagami:

We write to you in your capacity as construction manager for the public improvements construction at the former Oakland Army Base (the "Project") pursuant to the Property Management Agreement dated October 23, 2012 ("PMA") and the Design Build Contract dated October 16, 2013.

We have spoken and met with your staff many times over the past months regarding a number of issues raised with CCIG by contractors, regarding the City's implementation of the Construction Jobs Policy for Public Improvements ("Jobs Policy") applicable to the Project. The City appreciates your efforts and cooperation in seeking to resolve these issues, and provides the following information to clarify its interpretation of and enforcement approach to the Jobs Policy.

1. City Clarification Process.

We understand that Project contractors have requested prompt and final responses to various questions regarding interpretation, implementation , or enforcement of the Jobs Policy. On that point:

• In order to generate a final, written clarification from the City regarding the Jobs Policy, requests for clarification must be made in writing .1

1 Requests for clarification should be e-mailed to Deborah Barnes, Director of the City's Division of Contracts and Compliance (dbarnes@oaklandnet.com), with a cc to Dianne Millner (dmillner@oaklandcityattorney.org) and Julian Gross Uulian@juliangross.net).

Phil Tagami July 2, 2015 Re: Clarification of Interpretation Issues regarding Construction Jobs Policy for Public

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• The City will make every effort to provide final, written clarifications within two weeks of receiving each written request. If that deadline cannot be met, a date certain for the response shall be provided to CCIG.

• The City directs CCIG, in its capacity as construction manager, to take the following steps with regard to all clarifications issued by the City (including this letter): (i) forward the clarifications to the design-build contractor; (ii) ensure that all Project contractors are been notified that clarifications have been issued; and (iii) post clarifications on a website accessible to all Project contractors.

2. Contractor request that owner-operator truckers be exempted from coverage under the Jobs Policy.

The City has determined that sole proprietors (including owner-operator truckers) are not covered by hiring provisions of the Jobs Policy. This determination is based on the Jobs Policy's definition of "Contractor" as an entity "employing individuals to perform Project Construction Work ... "(Jobs Policy, Section 11, Definitions.)

This determination applies only to sole proprietors, defined as businesses for which the owner of the company performs all of the work on the Project. If an employee of the company performs any work on the Project (whether that individual was retained by the company prior to employment on the Project or hired for the Project), then that company meets the Policy's definition of "Contractor," and is covered by hiring provisions of the Policy. (If a company retains an independent contractor, rather than an employee, to perform work, then that independent contractor is a lower-tier subcontractor and itself must comply with the Jobs Policy.)

The City will not enforce hiring provisions of the Jobs Policy against contractors for which the company owner performs all work hours on the Project.

3. Contractor request that hazardous-materials trucking companies be exempted from the Jobs Policy.

There is no basis in the Jobs Policy for exempting hazardous materials trucking companies. The fact that such companies are exempt from the PLA is irrelevant to the issue of Jobs Policy coverage. The City will enforce the Jobs Policy with regard to hazardous materials trucking companies.

Phil Tagami July 2, 2015 Re: Clarification of Interpretation Issues regarding Construction Jobs Policy for Public

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4. Contractor request that "on-call" and "limited scope" contractors be exempted from the Policy.

There is no basis in the Jobs Policy for exempting contractors from the Jobs Policy on the basis that they work intermittently, or for only a small number of hours. The City will enforce the Jobs Policy with regard to such contractors.

Please note that binding compliance determinations will be made only upon conclusion of a contractor's work on the Project. "On-call" contractors can therefore aggregate hours for all Project work while an on-call contract is in effect.

5. Contractor request that liquidated damages not be assessed in cases where a subcontractor is terminated "for convenience" or goes out of business prior to completion of its work on the Project.

In general, the reason why a contractor concludes its work on the Project is irrelevant to the City's compliance determination. The Project's design-build contract requires the design-build contractor to withhold liquidated damage amounts from final payment to a noncompliant subcontractor, regardless of the reason for conclusion of the subcontract. (Design-Build Contract, section A.13.11.1.) In cases where the design-build contractor does not do this, the City will withhold a corresponding amount from payment to the design-build contractor. (Design-Build Contract, sections A.5.5.1 and A.9.5 .1.) While the City may consider unusual circumstances with regard to particular subcontracts, the general rule is that liquidated damages will be applied in any case in which a noncompliant contractor has completed its work.

6. Contractor request for clear instructions regarding the documentation that will be required in order for a subcontractor that has completed its work to demonstrate compliance with the Jobs Policy through the "process" requirements set forth in Jobs Policy section 111.B.

Contractors have been provided sufficient instructions with regard to the information that will be needed in order to demonstrate compliance through Jobs Policy section 111.B. In addition , all information requested by the City in compliance reviews will be information that is closely related to Jobs Policy responsibilities and that should be easily accessible to contractors, such as the mechanism by which a particular worker was hired.

However, as a convenience to all parties involved in the Jobs Policy compliance process, the City will consolidate instructions regarding compliance documentation, and release a set of instructions and forms for electronic distribution. CCIG will be notified of any changes to these instructions and forms prior to implementation of them.

Phil Tagami July 2, 2015 Re: Clarification of Interpretation Issues regarding Construction Jobs Policy for Public

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7. Contractor request for clarification regarding apprentice utilization requirements for DIR trade classifications represented by a single union.

Contractors have questioned how to apply the Jobs Policy's apprentice utilization requirements in cases where a single union represents multiple trade classifications released by the California Department of Industrial Relations (DIR), and the corresponding apprenticeship program does not distinguish between such trade classifications. 2

In such cases, contractors should retain an apprentice from the applicable union and credit the apprentice's hours toward the DIR trade classification in which the -apprentice is actually working. The apprentice will need to be assigned a classification for purposes of prevailing wage payment and compliance, and that same classification should be used for implementation of the Jobs Policy.

8. Contractor request that subcontractors be allowed to credit off-site hours , worked by all apprentices, not just Disadvantaged Workers, to address any shortfall in on-site apprentice utilization.

There is no basis in the Jobs Policy for crediting off-site hours toward satisfaction of the apprentice utilization requirement. Please note that the requirement to utilize Disadvantaged Workers (who are by definition apprentices) may be satisfied through use of off-site hours; this requirement is separate from the Policy's apprentice utilization requirement. (See Jobs Policy Sections 111.C.2 and 11.C.3.)

9. Contractor request that compliance actions take into account the dates on which clarifications of the Jobs Policy were released, to assure fairness in cases where contractors allege that they did not have information necessary to comply.

In general, the language of the Jobs Policy and the additional information provided by the City provide reasonable specificity to contractors regarding Jobs Policy requirements and enforcement. However, in any case in which the City, in its sole discretion, determines that Jobs Policy was insufficiently clear with respect to required implementation measures or has provided inaccurate information; the City will consider the circumstances on a case-by-case basis in compliance assessments.

2 For example: DIR recognizes several construction trades represented by the Operating Engineers' union, including "Operating Engineer (Heavy and Highway Work)," "Operating Engineer (Landscape Construction)," and others. However, the Operating Engineers' joint labor-management apprenticeship program does not distinguish between such crafts.

Phil Tagami July 2, 2015 Re: Clarification of Interpretation Issues regarding Construction Jobs Policy for Public

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If CCIG or contractors have any questions regarding the above clarifications and determinations, the City team will be available to discuss. If additional written clarification is needed, requests should be in writing, as described in paragraph 1, above.

In addition, the City will schedule a meeting with the design-build contractor and interested subcontractors to explain these positions and discuss any other outstanding issues regarding the Jobs Policy.

We appreciate CCIG's assistance in identifying issues relevant to the Jobs Policy, and in communicating the City's positions to all Project contractors.

Very truly yours,

tf::::ztk~ · City Attorney

1688029v1

~ di Claudia Cap;{[' Assistant City Administrator

c~ OAKLAND

OAKLAND ARMY BASE JOB POLICIES COMPLIANCE CHECKLIST AT A GLANCE

Following al'e instructions for submitting proof of compliance with the Oakland Army Base Jobs Policy. This will expedite the compliance review.

The Oakland Army Base Job Policy requires that the following requirements be met:

50% ofproject work hours are_performed 1:,y residents for each construction trade. 25% of the hours worked by apprentices are pe1f01med by disadvantaged workers and 20% of project work hours are performed by apprentices.

If Contractors did not satisfy the percentage requirement, they must submit proof of compliance with the hiring and referral processes described Section III-B of the Jobs policy as follows.

1. Proof of request from Union Hall 2. Proof ofrequest from West Oakland Jobs Resource Center

If a contractor has a shortfall of hours but did not follow the Section III-B of the Jobs policy, they may only submit off site hours that accrued concurrent to each contract performed on the Oakland Almy Base project.

Acceptable forms of verification are:

• Valid California State Photo Identification Card or Driver's License. AND

- Either I -

• Copy of Certification from the State of California's Division of Apprenticeship Standards.

- Or II -

Copy of Trade Work Referral I Dispatch Notice.

c~ OAKLAND

The following checklist is a summa,y of required reports for the LEP. Please check the box corresponding to reports attached and include the section where each report can be.found.

Refer to tlte Compliance Analysis Requirements Cltart for completing reports 1 tlzrougli 4.

Reports

D I .Proof of Apprenticeship

· D 2.Proof of Oakland Residency

D 3 .Proof of Oakland Resident Off site Hours

D 4.Copy of Request from Union Hall

D 5.Copy of Job Request from West Oakland Jobs Resource Center

D 6.Copy of Response from West Oakland Jobs Resource Center

D 7. Copy of Non Apprenticeable Documentation (if applicable)

Section

D D D D D D D

Note: Do not submit copy of employees' social security card. Provide only the last 4 digits of the social security card number.

Prepared By:

Name

Title

Telephone

Extension

Email May 2015 rev

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c~ OAKLAND

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c~ OAKLAND

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