CARB Compliance for Construction Contractors
Amended Regulations Place Monitoring Obligations on California Public Agencies
In November 2022, the California Air Resources Board (“CARB”) approved amendments to the In-Use Off-Road Diesel-Fueled Fleet regulations (“Regulations”), which impact construction contractors (“Contractors”) and take effect January 1, 2024. While compliance with CARB regulations has been a long-standing requirement for all Contractors who own off-road diesel fleet vehicles (e.g. construction equipment) in California, the amended Regulations now place monitoring obligations on California public agencies.
Applicability & Compliance
The Regulations apply to all “Public Works Awarding Bodies,” which is broadly defined as “any public agency (state, county, city, school board, water district, etc.), or official thereof, in the state of California, that awards or enters into a contract for the erection, construction, alteration, repair, removal, or improvement of any public structure, building, road, or other public lands, property, or improvement of any kind.” While this widely encompasses nearly all public works projects, the above definition does not expressly apply to regularly scheduled maintenance.
For any project awarded after January 1, 2024, under the newly added requirements, Public Works Awarding Bodies will now be required to obtain valid Certificates of Reported Compliance (“CRC”) from all contractors and listed subcontractors before awarding the project. The Public Works Awarding Body will be required to retain CRCs for three years after the project is complete, and the CRCs are subject to CARB review upon five calendar days' notice.
Although the statute requires that the CRCs be submitted before award, there is concern that a post-bid submission requirement could be problematic and lead to protests. Specifically, if the low bidder or any of its listed subcontractors fails to provide its CRC (or perhaps does not have compliant CRC), the public agency will be unable to award the project to the low bidder. The agency would be forced to reject the low bid or wait for the low bidder to become CARB compliant before award. As a result, it is recommended that the documentation be submitted with the Contractor’s bid so that the responsiveness of the bid can be immediately evaluated. The additional requirement to submit the Contractor’s CRC should not be a particularly onerous task. Since all “fleets” operating on any project in California must be CARB compliant, it is a matter of requiring submission of a document that a Contractor should readily have on hand for submission with its bid.
Exemptions: There are several exemptions to compliance with the Regulations. Each of the exemptions have specific definitions and nuanced reporting requirements that should be considered prior to implementing or permitting the use of an exemption. Specifically, the exceptions include:
- Emergency Operations
- Renewable Diesel Exemptions (based on fleet engine type or weather restrictions)
- Unavailability of Renewable Diesel
Validating CRCs: All CRCs should contain a fleet identification number, which is stored on CARB’s database and available through the CARB website. All CRCs are available for download starting March 1 of each year and until February 28 of the following year and are automatically updated by CARB if a Contractor is in compliance. When reviewing a bid, it is essential to confirm that the Contractor and all listed subcontractors have submitted a CRC or have indicated that CARB compliance does not apply to the particular subcontractor and have provided detailed reasoning for said exemption.
Conclusion
As a result of the changes to the Regulations, additional language must be added to bid packages and contracts requiring Contractors and their listed subcontractors to submit CRCs and any supporting documentation with their bids and proposals for all projects awarded after January 1, 2024. Bid documents should be abundantly clear that the failure to submit the required CRCs may render a bid non-responsive. If a Contractor is claiming an exemption to CARB compliance, an explanation with detailed reasoning signed by the Contractor should be required with its bid submission and reviewed for compliance by the public agency. Please contact your BBK attorney or Nabeal Sunna at Nabeal.Sunna@bbklaw.com if you have any questions.
Disclaimer: BBK Legal Alerts are not intended as legal advice. Additional facts, facts specific to your situation or future developments may affect subjects contained herein. Seek the advice of an attorney before acting or relying upon any information herein.
