DBE GOAL SETTING DBE GOAL SETTING METHODOLOGYMETHODOLOGY

The BasicsThe Basics

August 2009August 2009

The Basic Purpose of Goal The Basic Purpose of Goal SettingSetting

• The “heart” of the DBE programThe “heart” of the DBE program

• Drives program implementationDrives program implementation

• A proxy for a discrimination free local A proxy for a discrimination free local transportation contracting markettransportation contracting market

Goal-Setting ResourcesGoal-Setting Resources

• Always start with the regulations – 49 CFR Always start with the regulations – 49 CFR § 26.45§ 26.45

• U.S. DOT Tips for Goal-SettingU.S. DOT Tips for Goal-Setting

• US DOT Questions and Answers US DOT Questions and Answers

• www.osdbu.dot.govwww.osdbu.dot.gov

• FHWA – Division Office and HeadquartersFHWA – Division Office and Headquarters

Annual DBE Goal Annual DBE Goal SubmissionSubmission• Documents the methodology and process Documents the methodology and process

used by the recipient to arrive at an used by the recipient to arrive at an overall DBE goal for the year. overall DBE goal for the year.

• Based on evidence Based on evidence • August 1August 1stst deadline deadline• Should reflect data collected and dollars Should reflect data collected and dollars

for entire federal aid programfor entire federal aid program– Exceptions: Project goal or sub recipients with Exceptions: Project goal or sub recipients with

independent DBE program/goalindependent DBE program/goal

The four elements of the Goal-The four elements of the Goal-Setting processSetting process

• Step One analysis – relative Step One analysis – relative availability of DBEs (49 CFR 26.45(c))availability of DBEs (49 CFR 26.45(c))

• Step Two analysis – effects of Step Two analysis – effects of discrimination (49 CFR 26.45(d))discrimination (49 CFR 26.45(d))

• Race and Gender-Neutral Projections Race and Gender-Neutral Projections (49 CFR 26.45(f)(3)(49 CFR 26.45(f)(3)

• Public Participation (49 CFR 26.45(g))Public Participation (49 CFR 26.45(g))

Relative Availability of DBEs Relative Availability of DBEs 1 of 61 of 6

• What is that number and how did you come up with it?What is that number and how did you come up with it?

• The focus is on firms that are ready, willing, and able to The focus is on firms that are ready, willing, and able to compete for the kind of federally assisted contracts you compete for the kind of federally assisted contracts you intend to let.intend to let.

• Cannot use past participation as the baseline figureCannot use past participation as the baseline figure

• Methodology should cover all areas of contracting that Methodology should cover all areas of contracting that include Federal fundinginclude Federal funding

• No need to round up to whole numbers No need to round up to whole numbers

Relative Availability of DBEsRelative Availability of DBEs2 of 62 of 6

• Five approaches listed in the ruleFive approaches listed in the rule– DBE Directories and Census Bureau DBE Directories and Census Bureau

DataData– Bidders ListBidders List– Disparity StudyDisparity Study– Goal of Another RecipientGoal of Another Recipient– Alternative MethodAlternative Method

Relative Availability of DBEsRelative Availability of DBEs3 of 63 of 6

• General principles applicable to all General principles applicable to all approachesapproaches– Explain yourself and show your workExplain yourself and show your work– Describe the data and how it was used to Describe the data and how it was used to

determine RRdetermine RR– Refine the data if necessaryRefine the data if necessary– Define your local market areaDefine your local market area– Weighting (not required, but must make sense)Weighting (not required, but must make sense)– Not limited to certified DBEs … included potential Not limited to certified DBEs … included potential

DBEsDBEs– Change in amount of federal dollars expected not Change in amount of federal dollars expected not

relevant unless significant impact on contracts letrelevant unless significant impact on contracts let

Relative Availability of DBEsRelative Availability of DBEs5 of 65 of 6

• Disparity StudiesDisparity Studies– When using the disparity study of a city When using the disparity study of a city

as part of the goal setting for a state, as part of the goal setting for a state, must make the connection between that must make the connection between that data and the state’s use of it (why is data and the state’s use of it (why is some or all of it appropriate).some or all of it appropriate).

Relative Availability of DBEsRelative Availability of DBEs4 of 64 of 6

• Bidders List ApproachBidders List Approach– How was it createdHow was it created– Does it capture unsuccessful prime Does it capture unsuccessful prime

contractors and subcontractors (both contractors and subcontractors (both DBE and non-DBE)DBE and non-DBE)

– If not, what steps are taken to improve If not, what steps are taken to improve the data?the data?

Relative Availability of DBEsRelative Availability of DBEs6 of 66 of 6

• Alternative ApproachAlternative Approach– Must be based on local market Must be based on local market

conditionsconditions– Must be rationally related to relative Must be rationally related to relative

availability of DBEs in the marketavailability of DBEs in the market– Must explain why approach taken is Must explain why approach taken is

appropriateappropriate

Evidence of AdjustmentEvidence of Adjustment1 of 41 of 4

• The objective is to make sure the The objective is to make sure the overall goal is as precise as possibleoverall goal is as precise as possible

• Must consider all available evidenceMust consider all available evidence

• Must explain decision to make or not Must explain decision to make or not make an adjustmentmake an adjustment

Evidence of AdjustmentEvidence of Adjustment2 of 42 of 4

• Past participation of DBEsPast participation of DBEsThis is what the rules describes as the This is what the rules describes as the “current capacity of DBEs to perform work “current capacity of DBEs to perform work in your DOT-assisted contracting program, in your DOT-assisted contracting program, as measured by the volume of work DBEs as measured by the volume of work DBEs have performed in recent year.”have performed in recent year.”

• Should have at least five years of current Should have at least five years of current datadata

• Use full years worth of dataUse full years worth of data• Use the median instead of the meanUse the median instead of the mean

Evidence of AdjustmentsEvidence of Adjustments3 of 43 of 4

• Disparity Studies not already Disparity Studies not already accounted for in Step Oneaccounted for in Step One– Any kind of study designed to investigate Any kind of study designed to investigate

the existence of discrimination in the existence of discrimination in contractingcontracting

– Recipient must affirmatively state whether Recipient must affirmatively state whether there are or are not studies that have there are or are not studies that have been conducted in your local marketbeen conducted in your local market

– Must explain why evidence from studies Must explain why evidence from studies was or was not used in goal setting was or was not used in goal setting

Evidence of AdjustmentsEvidence of Adjustments4 of 44 of 4

• Evidence from related fieldsEvidence from related fields– Disparities in financing, bonding, insuranceDisparities in financing, bonding, insurance– Employment, self-employment, education, Employment, self-employment, education,

training, union apprenticeship programstraining, union apprenticeship programs– Typically documents the continuing affects Typically documents the continuing affects

of past discrimination of past discrimination – Number of certified DBEs not a separate Number of certified DBEs not a separate

basis for step two adjustmentbasis for step two adjustment

Race/Gender-Neutral Race/Gender-Neutral ProjectionsProjections

1 of 21 of 2• Exceeding overall goal in the pastExceeding overall goal in the past

• DBE prime contractsDBE prime contracts

• DBE sub participation on no-goal contracts DBE sub participation on no-goal contracts (include state funded contracts as measure)(include state funded contracts as measure)

• DBE subcontracts in excess of contract goalDBE subcontracts in excess of contract goal

• Past achievements Past achievements

• Use the median instead of the meanUse the median instead of the mean

Race/Gender Neutral Race/Gender Neutral ProjectionsProjections

2 of 22 of 2• RN Initiatives implemented by RN Initiatives implemented by

RecipientsRecipients– Do not identify unless truly RNDo not identify unless truly RN– Quantify achievements if possibleQuantify achievements if possible– Small Business Programs – new guidanceSmall Business Programs – new guidance– Listing of initiatives in goal submission Listing of initiatives in goal submission

does not constitute “approval” by the does not constitute “approval” by the operating administrationoperating administration

Public ParticipationPublic Participation

• ConsultationConsultation– Face-to-face dialogueFace-to-face dialogue– Document input received and responseDocument input received and response

• PublicationPublication– Beginning and end dates requiredBeginning and end dates required– WhereWhere– Document input received and responseDocument input received and response

Interim Goal or Goal Setting Interim Goal or Goal Setting MechanismMechanism

• Need additional time to collect data Need additional time to collect data or take other stepsor take other steps

• Reflect relative availability of DBE to Reflect relative availability of DBE to maximum extent given data maximum extent given data

• Avoid imposing undue burden on Avoid imposing undue burden on non-DBEsnon-DBEs

Proposed Change to 3 year Proposed Change to 3 year cyclecycle

• Staggered three year schedule Staggered three year schedule established by operating established by operating administrationsadministrations

• Annual review of goals ?Annual review of goals ?

• Adjustments for new opportunities or Adjustments for new opportunities or changed circumstances?changed circumstances?

QUESTIONS?QUESTIONS?