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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


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