Research of Race/Ethnic/Gender Neutral Measures in the Implementation of the Federal DBE Program that Transportation Authorities Have Successfully Used Solely or Primarily to Satisfy Their Overall Goals
In 1996, the U.S. Department of Justice conducted a study of evidence on the issue of discrimination in government construction procurement and contracts, which Congress relied upon as documenting a compelling governmental interest to have a federal program to remedy the effects of current and past discrimination in the transportation contracting industry for federally-funded contracts. Subsequently, in 1998, Congress passed the Transportation Equity Act for the 21st Century (“TEA-21”), which authorized the United States Department of Transportation to expend funds for federal highway programs for 1998 - 2003. The US DOT promulgated new regulations in 1999 contained at 49 CFR Part 26 to establish the current Federal DBE Program. The Federal Disadvantaged Business Enterprise (DBE) Program as part of US DOT legislation was subsequently extended and reauthorized in 2003-2015.In December 2015, Congress passed the Fixing America’s Surface Transportation Act (“FAST Act”), which again extended and reauthorized the Federal DBE Program up to the present time. Congress and the federal government determined that there is a compelling governmental interest for race- and gender-based programs at the national level; and that the program is narrowly tailored, focusing on the flexibility in implementation provided to state DOTS and individual federal aid recipients by the federal regulation. State and local governments are not required to implement race- and gender-based measures where they are not necessary to achieve DBE goals. These goals may be achieved by race- and gender-neutral measures. The Federal DBE Program established responsibility for implementing the DBE Program to state and local government recipients of federal funds. A recipient of federal financial assistance must set an overall DBE goal specific to conditions in the relevant marketplace. The Federal DBE Program outlines certain steps a state or local government recipient can follow in establishing a goal, and USDOT must approve the goal and the recipient’s DBE program. 49 CFR § 26.45. Further, the Federal DBE Program requires that state and local government recipients of federal funds assess how much of the DBE goal can be met through race- and gender-neutral efforts and what percentage, if any, should be met through race- and gender-based efforts. A state or local government recipient is responsible for seriously considering and determining race- and gender-neutral measures that can be implemented. The implementation of the Federal DBE Program by state DOTS and recipients of federal funds must adhere to the highest level of constitutional review, the strict scrutiny standard, ts to the extent they use race- and ethnicity-based measures in awarding contracts. Strict scrutiny analysis requires that the implementation of the Federal DBE Program by recipients of federal funds be “narrowly tailored” to remedy demonstrable discrimination in the particular recipient’s transportation contracting market. The narrow tailoring requirement contains several components, including the necessity for the relief and the efficacy of alternative race-, ethnicity-, and gender-neutral remedies. Courts, including the Supreme Court, have found that “[w]hile narrow tailoring does not require exhaustion of every conceivable race-neutral alternative, it does require serious, good faith consideration of whether such alternatives could serve the governmental interest at stake.” The federal courts have held unconstitutional those race- and ethnicity-conscious programs implemented without consideration of race- and ethnicity-neutral alternatives to increase minority business participation in state and local contracting. Federal courts have determined that local and state governments have at their disposal a “whole array of race-neutral devices to increase the accessibility of city contracting opportunities to small entrepreneurs of all races.” The federal regulations also require that recipients of federal financial assistance governed by 49 CFR Part 26 (Part 26) implement or seriously consider workable race-, ethnicity-and gender-neutral remedies prior to the implementation of race-, ethnicity-, and gender-conscious remedies. The courts have also found “the regulations require a state to ‘meet the maximum feasible portion of [its] overall goal by using race neutral means or measures.. Examples of race-, ethnicity-, and gender-neutral alternatives include, but are not limited to, the following: * Providing assistance in overcoming bonding and financing obstacles; * Relaxation of bonding requirements; * Providing technical, managerial and financial assistance; * Establishing programs to assist start-up firms; * Simplification of bidding procedures; * Training and financial aid for all disadvantaged entrepreneurs; * Non-discrimination provisions in contracts and in state law; * Mentor-protégé programs and mentoring; * Efforts to address prompt payments to smaller businesses; * Small contract solicitations to make contracts more accessible to smaller businesses; * Expansion of advertisement of business opportunities; * Outreach programs and efforts; * “How to do business” seminars; * Sponsoring networking sessions throughout the state acquaint small firms with large firms; * Creation and distribution of MBE/WBE and DBE directories; and * Streamlining and improving the accessibility of contracts to increase small business participation. Section 26.51(b) of Part 26 provides examples of race-, ethnicity-, and gender-neutral measures that should be seriously considered and utilized. Section 26.51(a) requires recipients of federal funds to “meet the maximum feasible portion of your overall goal by using race-neutral means of facilitating DBE participation.” Therefore, the use of significant and effective race/ethnic/gender neutral measures is critical to the validity and constitutionality of DBE programs by state DOTs and other recipients of federal funds in implementing the Federal DBE Program. Moreover, their use is necessary in order to comply with the federal regulations and meet the purposes and objectives of the Federal DBE Program, including increasing participation of DBEs and removing barriers to the success of DBEs. * * * .
The objectives of this
research are to develop an analysis of race/ethnic/gender neutral practices
that have been practical, effective, workable, and beneficial to state DOTs
and other recipients implementing the Federal DBE Program, and to DBE firms.
The research will review
Supportive Services such as business development programs. The research will
focus on the effectiveness of neutral measures alone and neutral measures in
combination with race- and gender- conscious programs and measures. The
research will analyze all types of DBEs, whether state DOTs and other
recipients are making maximum use of neutral efforts, and whether they are
meeting their DBE goals solely through neutral measures.
In addition, the
research will examine whether states with solely neutral measures have
different outcomes than states that utilize a combination of neutral measures
and DBE contract goals. This research is looking for specific practices,
approaches, methodologies, strategies, experiences, and resources that have
been used by state DOTs, other recipients, and service providers in
implementing race/ethnic/gender neutral measures that have effectively
achieved meeting overall goals.
This analysis will:
(1) Identify significant
race/ethnic/gender neutral initiatives, means, practices and experiences of state
DOTs, transportation and transit agencies and airports implementing the
Federal DBE Program that have solely or primarily used race/ethnic/gender
neutral measures to achieve their overall DBE goals, and determine their potential
for broad application to state DOTs, transit authorities and airports that
predominately use race/ethnic/gender conscious measures.
(2) Identify the most
effective efforts and practices applied to all types of DBE and non-DBE firms
regarding race/ethnic/gender neutral measures, and determine their potential
for broad application.
(3) Identify and
provide matrices that illustrate key features of state DOT and recipient DBE
programs implementing race/ethnic/gender neutral measures that are effective
and contribute to the success and participation of DBE firms, their
participation in the Federal DBE Program, and their meeting the purposes and objectives
of the Federal DBE Program.
(4) Provide case
studies that feature those practices deemed best for implementing race/ethnic/
gender neutral measures and programs.
(5) Provide an
evaluation of the types of programs, administration, assistance, contracting,
data tracking and supportive services strategies used by those states and
recipients that successfully implement race/ethnic/ gender neutral measures
and programs that increase the participation of DBEs without race/ethnic/
gender conscious measures, including measures removing identified barriers to
DBEs and meeting the objectives of the Federal DBE Program.
This research will be
beneficial in providing a survey of the significant, workable, and effective
practices for race/ethnic/gender neutral measures implemented by state DOTs
and other transportation agencies in their DBE programs.
This research will
also provide important, up-to-date quantitative
and qualitative information about neutral measures, which currently does not
exist at present, to determine the most effective, workable, and efficient
practices being utilized that may be followed by other state DOTs and
The research will
identify methods and practices that are most effective in increasing the capacity,
abilities and opportunities of DBE firms to participate as prime and
The research may provide
opportunities for state DOTs and recipients to learn about, modify or change
their programs to employ those measures that are most effective following the
The research could
lead to the implementation of specific neutral measures and practices that will
help increase DBE utilization and financial success and may result in
assisting DBE firms being able to successfully compete outside of the DBE
The research will
identify those race/ethnic/gender neutral measures that are workable and
should seriously be considered by all state DOTs and recipients in
implementing DBE Programs, which also will assist them in complying with the
federal regulations located at 49 CFR Part 26 and court decisions regarding
challenges to the validity of DBE programs.
The research will provide
examples, specific measures, experiences and analyses of effective practices
and initiatives used successively by states and local transportation authorities
that will assist other state DOTs and recipients in their implementation of
the Federal DBE Program through the utilization of neutral measures.
The research will provide
information to assist in determining the types of contracts and amount of
overall goals for DBE programs that can be achieved by race/ethnic/gender
neutral means, which will assist in determining what percentage of
contracting dollars can be projected to be obtained via neutral measures.
There is a current study being
conducted by Keen Independent Research that is analyzing measures that may have
helped the most successful DBEs become successful, which includes in part an analysis
of neutral measures. The proposed research will expand upon and build upon that
effort. The proposed study differs in that the current study only examines
experiences of the most successful DBEs, which might not be pertinent to other
DBEs and small businesses in general. The current study is not as comprehensive as to the extent that state
DOTs are implementing neutral measures, and how they are doing so. Additionally,
the current study does not focus on
neutral measures and their effectiveness as described in the Objective and
Potential Benefits sections above.
also is an NCHRP Synthesis (416) published in 2011 on Implementing Race-Neutral
Measures in State DBE Programs. This
Research Statement will be more extensive and specifically evaluate and study the
effectiveness of neutral measures in states that achieve overall goals and
meeting the objectives of the Federal DBE Program solely or primarily by
neutral measures, which may be followed by other states and local
transportation authorities or recipients of US DOT funds to improve their DBE
of both quantitative and qualitative research methods that collect information
from DBE firms, non-DBE firms, prime contractors, state DOTs, recipients of federal
funds, local and regional public transportation authorities, airports, local public
agencies and other applicable target populations. Publication of research findings and
recommendations for practice and further research.
Conduct a survey of multiple state DOTs plus certain local public
transportation authorities and airports to obtain a list of significant and
effective practices that can be evaluated. The survey will include all state
DOTs that attempt to meet their overall DBE goal solely using neutral means,
plus a representative sample of states that use a combination of neutral and
race-conscious measures. It will also include transit agencies and airports
operating solely neutral programs and those that use a combination of measures.
Conduct a survey of representative DBEs and
non-DBEs in multiple states
and synthesize the effectiveness of the neutral practices and measures that contribute
to the success of the DBE firms and other small businesses.
Identify the features and approaches that are most successful regarding the
practices and measures, and any differences from solely neutral programs and
those that use neutral and race-conscious measures.
methods for state DOTs and recipients to measure the effectiveness of their neutral
a set of matrices that describe possible factors that contribute to the effective
practices of race/ethnic/gender neutral measures.
Conduct case studies that analyze certain
practices concerning neutral measures that result in the success of DBE firms
or their improvement, increase the capacity or ability of DBE firms to compete
and be available to perform on contracts, and that reduce barriers for DBE
The FHWA, FAA, FTA and
OSDBU would have the most recent information regarding how all state DOTs and
recipients of federal funds implement their DBE programs, including the
measures and practices that are used by state DOTs and recipients and provided
in their DBE Program Plans submitted to FHWA, FAA or FTA for review and
approval. The research should, therefore, also include interviews and
information requests from state DOTs, prime contractors, DBEs and non-DBEs at
least in a statistically reliable sample of states to be valid for use
The DBE TRB Committee,
OSDBU, the AASHTO Subcommittee on Civil
Rights, APTA, COMTO, and other interested groups will understand that the
subject of this research study will be significant and have national appeal to
the larger transportation establishment, and that it is vital to developing DBE
programs by state DOTS and recipients, helping to level the playing field for
DBEs, and providing opportunities for DBEs and potential DBEs and small women
and minority-owned businesses to successfully compete in the transportation
industry. There might be low response rates from certain target populations
such as DBEs or non-DBEs, and thus the champions of this research are committed
to assisting in helping to increase participation and reduce any other
potential barriers to the successful implementation of the project.
This study is relevant to the entire Construction Section of TRB since it will focus on practices used by the construction and professional service industries.
It is relevant to all state DOTs, transportation authorities, and recipients of federal funds that implement the Federal DBE Program who must comply with the federal regulations at 49 CFR Part 26 and the court decisions regarding DBE Programs.
It is relevant to the Supportive Services consultants and contractors that advise and assist state DOTs and recipients.
It is relevant to DBEs and non-DBEs that contract with or are interested in contracting with state DOTS, transportation authorities, airports, and other recipients of US DOT funds.
|Sponsoring Committee:||AFH80, Disadvantaged Business Enterprises (DBE)
|Research Period:||12 - 24 months|
|RNS Developer:||Keith Wiener, Esquire/Dave Keen|
|Source Info:||1. Preamble to the 2014 DBE Final Rule, 49 C.F.R. Part 26.|
2. Recent disparity studies.
3. Office of Inspector General, Weaknesses in the Department’s Disadvantaged Business Enterprise Program Limit Achievement of Its Objectives, Office of the Secretary, April 23, 2013.
4. Federal court decisions that involve challenges to the Federal DBE Program and its implementation by state DOTS and recipients of US DOT funds.
6. State DOTS and recipients of US DOT funds complying with 49 CFR Part 26.
7. 2005 United States Commission on Civil Rights: Federal Procurement After Adarand (Sept. 2005), available at http://www.usccr.gov.
8. Appendix-The Compelling Interest for Affirmative Action in Federal Procurement, 61 Fed. Reg. 26,050, 26,051-63 & nn. 1-136 (May 23, 1996) (hereinafter “The Compelling Interest”); see Adarand VII, 228 F.3d at 1167-1176, citing The Compelling Interest.
9. DBEs and non-DBEs.
10. Supportive Services consultants who contract with states and transportation authorities.
|Index Terms:||Disadvantaged business enterprises, Race, Gender, Ethnic groups, Discrimination, Procurement, Contract administration, Contractors, |
Administration and Management
Planning and Forecasting