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CARB Nov. 2022 Updates: How to Manage Document Control of Certificates of Reported Compliance


Introduction

In 2022, CARB released an amendment to its existing off-road equipment compliance regulation that requires prime contractors to collect fleet information from its subtier contractors. The following article details what these requirements are, how they have changed, outstanding questions surrounding the regulation, and recommended paths forward for general contractors.


What is Required? 

California Air Resources Board (CARB) has been regulating off-road equipment since 2008 with the goal of setting declining emissions targets. Fleet owners (including rental companies) have already been required to demonstrate compliance through annual certification. The November 2022 Amendment updated the requirements with the following language:

“Phase out of the oldest and highest-emitting off-road engines from operation, restrict the addition of vehicles with Tier 3 and 4i engines, require contracting entities to obtain and retain a fleet's valid Certificate of Reported Compliance prior to awarding a contract or hiring a fleet, mandate the use of R99 or R100 Renewable Diesel for all fleets, provide voluntary compliance flexibility options for fleets that adopt zero-emission technology, and include additional requirements to increase enforceability, provide clarity, and provide additional flexibility for permanent low-use vehicles.”

The requirement for contracting entities is new to the regulation, and many prime contractors are not the fleet owners or renters. Per the rulemaking documents, a prime contractor must collect Certificates of Reported Compliance from all fleet owners/renters under their contracts on an annual basis and retain them for 3 years after project completion. Annual registration for the fleet owners occurs January through March 1 of each year, and so the prime contractor should collect updated CORC between March through June. Rental companies must provide CORC for rented equipment.


While the CARB website provides information and FAQs on these changes, BASCL reviewed these resources and requested additional information from CARB. Those questions are detailed in the following section.



What were some Questions we had as Contractors? 

Registration period: Our understanding is that we are to collect the CORCs between March and June of any given year.

  • Please confirm our understanding that between January-March of that same year, fleet owners are required to register their off-road equipment on the DOORS website.  Reporting has been required since 2009. March-June is for primes that have multi-year contracts with their subcontractors, that time period when you need to collect new and renewed CORCs. Subcontractors need to submit their annual reporting starting January 1 and complete by March 1.

  • Please advise on what happens if a fleet owner fails to register their fleet vehicles in the required window. If a fleet owner misses, they'll still be able to get their DOORS certificate. There may be a penalty, but Thien will not talk to enforcements. 

  • Please advise on what happens if we do not collect the CORCs between March and June – if the contracting period happens in August for example. Is the March-June collection period only for ongoing contracts? We'd collect their current CORC in August.

Contracts:

  • Please confirm when we must have the CORC in-hand as the prime contractor; at time of prequalification, subcontract finalization, subcontractor mobilization, etc.? We'd need it at time of contract inking. It's not required at time of bidding.

  • What counts as a ‘major modification to’ or a 'renewal' of a contract which kicks off the need to collect CORCs in 2024?    Our lawyers should get involved to define this. Consider like a square footage or major timeline change. Small change orders aren't really the intent of this.

CORC Logistics: Our understanding is that we do not need to collect CORCs from subtiers or subcontractor vendors

  • Is our understanding correct? We need to collect CORCs from the fleet and the subtiers if known/applicable. Once the rental company or subtier is known, then we need to collect it right afterwards.

  • Please note that many, if not most, subcontractors, identify and onboard these subtiers after prequalifying and contracting with the prime contractor. If above is incorrect, will subtiers/rental companies only be required to provide CORCs at time of bid if known?  Basically, whenever a contract is inked for a fleet (be it prime/subcontractor or subcontractor/subtier), we want the CORC in hand before it's inked, and we'd need to collect it as primes. They are trying to work out the exact details with the attorney. Starting with the prime/contractor at time of contract is fine.

  • What happens if the name of the fleet submitter does not exactly match the name of the subcontractor performing the work? This could be a challenge if an audit takes place; best practice would be to match up the company name with the company registered with the DIR. This would also help with looking up companies in the DOORS database.

  • Please confirm that the DOORS CORC is for the fleet; not for individual pieces of equipment. Correct.

  • What if single pieces of equipment are added to a compliant fleet after the June 1 window? If you add a single vehicle, you'd register it in DOORS per the 2022 Amendment. Adding it into DOORS after the March 1 window closes should be fine so long as it's compliant. Don't need to get a renewed certificate as soon as it gets added. Just need to wait until the next reporting period.


Recommendations for Prime Contractors 

Because tracking of CORCs shifts the administrative task to the general contractor, the prime should plan on modifying their existing accounting, procurement and operations procedures to maintain records of compliance. The outline provides an example list of potential procedural modifications to be considered by general contractors:


Prequalification

  • Notify high priority subcontractors (i.e. exterior trades) that they will need to provide their CORCs for all new and existing contracts on an annual basis.

Bidding

  • Modify bid forms to include the following language:

For all companies subject to Section 2449(n) in Title 13 of California’s Code of Regulations (e.g., those with off-road diesel equipment sized 25HP and above, with limited exceptions), Certificates of Reported Compliance must be received by [insert Prime Contractor name here] for the fleet selected for the contract and their listed subcontractors, if applicable, prior to entering into a new or renewed contract. In addition, renewed and valid certificates must be provided between March 1 and June 1 for ongoing contracts. Please list applicable fleets covered below and attach valid certificates to your bid:

Company (Fleet Owner)

Scope







 

Contracting

  • Attach the CORCs provided by the subcontractor at time of bid to the contract prior to issuing. 

During construction

  • If collection is managed through accounting or procurement departments, modify your existing notification system (e.g. Textura) to trigger an alert once the expiration date (June 1st) has been reached. 

  • Send out a notification March 1st to all active subcontracts that the CORC collection period has opened and all CORCs must be sent to [procurement, accounting, or operations] by June 1st or billings will be halted.

  • For subcontractors that have still not provided their revised CORCs by May 1st, send out a list of all non-updated subcontractors to operations teams to notify them that their CORCs are about to expire and will not be able to perform work or bill after June 1st unless amended.


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