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DBE GOAL SETTING METHODOLOGY Click here to view the PowerPoint Presentation The Basics August 2009 Slide - 2 The Basic Purpose of Goal Setting • The "heart" of the DBE program • Drives program implementation • A proxy for a discrimination free local transportation contracting market Slide - 3 Goal-Setting Resources • Always start with the regulations - 49 CFR § 26.45 • U.S. DOT Tips for Goal-Setting • US DOT Questions and Answers • www.osdbu.dot.gov • FHWA - Division Office and Headquarters Slide - 4 Annual DBE Goal Submission • Documents the methodology and process used by the recipient to arrive at an overall DBE goal for the year. • Based on evidence • August 1st deadline • Should reflect data collected and dollars for entire federal aid program - Exceptions: Project goal or sub recipients with independent DBE program/goal Slide - 5 The four elements of the Goal-Setting process • Step One analysis - relative availability of DBEs (49 CFR 26.45(c)) • Step Two analysis - effects of discrimination (49 CFR 26.45(d)) • Race and Gender-Neutral Projections (49 CFR 26.45(f)(3) • Public Participation (49 CFR 26.45(g)) Slide - 6 Relative Availability of DBEs 1 of 6 • What is that number and how did you come up with it? • The focus is on firms that are ready, willing, and able to compete for the kind of federally assisted contracts you intend to let. • Cannot use past participation as the baseline figure • Methodology should cover all areas of contracting that include Federal funding • No need to round up to whole numbers Slide - 7 Relative Availability of DBEs 2 of 6 • Five approaches listed in the rule - DBE Directories and Census Bureau Data - Bidders List - Disparity Study - Goal of Another Recipient - Alternative Method Slide -8 Relative Availability of DBEs 3 of 6 • General principles applicable to all approaches - Explain yourself and show your work - Describe the data and how it was used to determine RR - Refine the data if necessary - Define your local market area - Weighting (not required, but must make sense) - Not limited to certified DBEs ... included potential DBEs - Change in amount of federal dollars expected not relevant unless significant impact on contracts let Slide - 9 Relative Availability of DBEs 5 of 6 • Disparity Studies - When using the disparity study of a city as part of the goal setting for a state, must make the connection between that data and the state's use of it (why is some or all of it appropriate). Slide - 10 Relative Availability of DBEs 4 of 6 • Bidders List Approach - How was it created - Does it capture unsuccessful prime contractors and subcontractors (both DBE and non-DBE) - If not, what steps are taken to improve the data? Slide - 11 Relative Availability of DBEs 6 of 6 • Alternative Approach - Must be based on local market conditions - Must be rationally related to relative availability of DBEs in the market - Must explain why approach taken is appropriate Slide - 12 Evidence of Adjustment 1 of 4 • The objective is to make sure the overall goal is as precise as possible • Must consider all available evidence • Must explain decision to make or not make an adjustment Slide - 13 Evidence of Adjustment 2 of 4 • Past participation of DBEs This is what the rules describes as the "current capacity of DBEs to perform work in your DOT-assisted contracting program, as measured by the volume of work DBEs have performed in recent year." • Should have at least five years of current data • Use full years worth of data • Use the median instead of the mean Slide - 14 Evidence of Adjustments 3 of 4 • Disparity Studies not already accounted for in Step One - Any kind of study designed to investigate the existence of discrimination in contracting - Recipient must affirmatively state whether there are or are not studies that have been conducted in your local market - Must explain why evidence from studies was or was not used in goal setting Slide - 15 Evidence of Adjustments 4 of 4 • Evidence from related fields - Disparities in financing, bonding, insurance - Employment, self-employment, education, training, union apprenticeship programs - Typically documents the continuing affects of past discrimination - Number of certified DBEs not a separate basis for step two adjustment Slide - 16 Race/Gender-Neutral Projections 1 of 2 • Exceeding overall goal in the past • DBE prime contracts • DBE sub participation on no-goal contracts (include state funded contracts as measure) • DBE subcontracts in excess of contract goal • Past achievements • Use the median instead of the mean Slide - 17 Race/Gender Neutral Projections 2 of 2 • RN Initiatives implemented by Recipients - Do not identify unless truly RN - Quantify achievements if possible - Small Business Programs - new guidance - Listing of initiatives in goal submission does not constitute "approval" by the operating administration Slide - 18 Public Participation • Consultation - Face-to-face dialogue - Document input received and response • Publication - Beginning and end dates required - Where - Document input received and response Slide - 19 Interim Goal or Goal Setting Mechanism • Need additional time to collect data or take other steps • Reflect relative availability of DBE to maximum extent given data • Avoid imposing undue burden on non-DBEs Slide - 20 Proposed Change to 3 year cycle • Staggered three year schedule established by operating administrations • Annual review of goals ? • Adjustments for new opportunities or changed circumstances? Slide - 21 QUESTIONS?

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