Approval of DBE Program Changes

• Under 49 CFR § 26.21(b)(2), STAs are not required to submit to FHWA regular updates of their program unless there are significant changes in the program. As a guiding principle, a "significant change" is any change that is likely to affect an important aspect of the DBE program if implemented. If there is a doubt as to whether a proposed change would be considered significant, the Division Office is encouraged to consult FHWA Office of Civil Rights (HCR).

• If no significant changes occured to the STA's DBE program since it was last approved by the FHWA, no further action is required other than the submission of the STA's overall goal setting process for FY 2006. If the STA has made or makes a significant change to its DBE program that has not been approved by FHWA, the STA must submita written explanation of the change along with the revised program document to the Division Office for approval. The Division Office shall submit the proposed revision to HCR for concurrence. The HCR shall coordinate the review by other appropriate offices in FHWA and US DOT. Once notified by the HCR of its concurrence, the Division Administrator make take final action to approve the STA's revised DBE program.

• The US DOT promulgated a final rule on June 16, 2003, revising a number of provisions in the DBE program regulations. Recently, US DOT issued additional Questiosn and Answers (Q&As) affecting eight different program areas. It is expected that most, if not all, STAs will need to update their DBE program to conform to the 2003 rule change and perhaps the Q&As issued by US DOT. The Division Office should work the STA to ensure its DBE program fully complies with 49 CFR Part 26. If significant changes to the approved program must be made, the Division Office shall submit the proposed revision(s) to the HCR for concurrence in accordance with the process described above. Some of the program must be made, the Division Office shall submit the proposed revision(s) to the HCR for concurrence in accordance with the process described above. Some of the program changes required or authorized by the 2003 amendments that are considered significant, and consequently subject to approval, include, but are not limited to, program modifications that deal with proper payment, retainage, size standards, trucking, application supplementation, and implementation of the Memorandum of Understanding between US DOT and the Small Business Administration.

• DBE program changes should not delay action on the STA's annual goal submission.

Overall DBE Goal Setting

• Under 49 CFR § 26.45(f), the STA is required to submit its overall annual goal with supporting documentation to the appropriate FHWA Division Office no later than August 1^st. Thus any STA that has yet to submit its goal should be admonished to do so as quickly as possible.

• The STA must submit with its proposed overall goal a description of the goal setting processed followed in setting its FY 2006 goal. With its submission, the STA must report on the information and evidence relied upon to calculate its goal in accordance with 49 CFR § 26.45(f)(3). Also, the analysis and calculation used by the STA in projecting the proportion of the goal it expects to meet through race-neutral and race-conscious measures shall be included with the submission.

• STAs that are located within the Ninth Federal Judicial Court - Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington - are subject to additional standards set by the Court in the Western States Paving Co v. State of Washington Department of Transportation, 407 F.3d 983 (9^th Cir. 2005). In addition to the above, the following applies:

  1. If the STA has not submitted its FY 2006 DBE goal, it may be given a reasonable period of time (30 - 60 days) to do so.

  2. If the DBE goal estabilished by the STA indicates that a portion of the goal will be met using race-conscious measures, the submission must describe the evidence of discrimination or its effects relied upon by the STA to support the implementation of race-conscious measures. If warranted by the evidence, the STA also may need to request a waiver of the prohibition on the use of group specific goals. If this information is not in the submission, the STA should be advised to revise its submission to include a description of the evidence and to indicate whether a waiver is needed to implement goals of limited application.

  3. If the STA determines that it needs time to assess whether it has sufficient evidence of discrimination or its effects, the STA must revise its submission to request approval to implement a wholly race-neutral program while it undertakes this assessment. This may involve commissioning a disparity study or availability study sufficient to meet the standard set by the Ninth Circuit Court of Appeals.

  4. A STA that moves to a wholly race-neutral program as a result of the Western States Paving decision must commit to conduct the required analysis and establish a schedule with milestones for completion to obtain approval of its DBE goal submission.

• The Division Administrator is delegated the authority to review and approve the goal setting process submitted by the STA. The Division Office is required to obtain a legal sufficiency review of its decision document before the formal approval letter accompanied by the decision document is sent to the STA. The draft decision document should be forwarded to the appropriate Chief Counsel's staff located in the Resource Centers. However, if STA's overall goal setting is subject to the following circumstances, the Division Office must withhold final action pending concurrence by the HCR. The circumstances that require further review by Headquarters, as determined by HCR, are:

  1. The STA substantially changes its goal setting methodology and/or projected race-neutral and race-conscious breakdown from the previous Fiscal Year;

  2. There was significant controversy occurring during the goal setting process that raises questions about the evidence relied upon to support the goal established by the STA;

  3. The DBE program is the subject of, or there is a substantial risk of, a legal challenge; or

  4. The STA is located within the Ninth Federal Judicial Circuit.

• Approval by the Division Administrator shall be accompanied by a document that explains the basis for the approval. A sample decision document and approval letter has been provided for your use.

• The Division Administrator is responsible for advising the STA that completion of the highway program goal setting process does not relieve the STA from working with FTA and FAA on a goal setting process for programs funded by those agencies.

Review Process at Headquarters

• Changes in the DBE program and/or overall goal setting documentation required to be sent to Headquarters shall be sent to HCR and HCC. The Division Office shall indicated whether it is prepared to approve the STA's program changes and/or overall goal submission.

• If so, the Division Office shall include a draft decision document in the package sent to HCR and HCC. The HCR shall monitor Headquarters' review process for timeliness and will officially notify the Division Office when the process is completed. The Division Administrator may not take any formal approval action until receipt of this official notification. Every effort will be made to complete this process within 30-60 days of receipt of a well-documented explanation by the STA of the goal setting process.

• HCR will coordinate all STA submissions with the HCC at Headquarters. For those matters in litigation, or at risk of litigation, HCC will work with US DOT's Office of General Counsel (OGC) by providing it with a copy of STA's program changes and/or goal submission, acting as an intermediary in resolving any outstanding issues and obtaining OGC's advice on FHWA's intended action to approve the STA's program revision and/or goal setting process for FY 2006. Once this process has been satisfactorily competed, the Division Office will be notified of HCR's concurrence.

Questions

The Offices of Civil Rights and Chief Counsel are available to respond to questions from Division Offices during this process.