DBE Program Regulations: Overall Goals

DOT has released Official FAQs on DBE Program Regulations. These questions and answers provide guidance and information for compliance with the provisions under 49 CFR part 26. Like all guidance material, these questions and answers are not, in themselves, legally binding or mandatory, and do not constitute regulations.

How does a recipient obtain census bureau data to use in calculating its overall goal? Section 26.45(c) (1)

• The regulation’s first example of how a recipient can do Step 1 of the overall goal process involves using data from the Census Bureau’s County Business Pattern (CBP) database.
• The Department intends to create a web site that will provide ready access to this information. We hope this site will be up and running in plenty of time to be of use to recipients as they prepare to submit their FY 2000 overall goal.
• Meanwhile, you can obtain this data from the Census Bureau web site. All of the data is available, however their web site does not have the features we intend to provide to make it easier to search, compile and retrieve the particular data you need.
• To access the data, go tohttp://www.census.gov
• There are at least 2 areas of the site that have relevant CBP data. You can access them by going to the “Subjects A to Z” listing and:
• Click on “C”: then, under “County”, click on “County Business Patterns”, or paste the following URL into your web browser:http://www.census.gov/econ/cbp/index.html
• Click on “B”; then, under “Business”, click on “Statistics of United States Businesses (Tabulations by Size and Metropolitan Area)”, or paste the following URL into your web browser: census.gov/csd/susb/susb.html
• Both pages offer ways to select particular data (i.e. state or county) and different compilations of useful CBP data, some of which can be downloaded for easy use in spreadsheet format.
• Prior concurrence of a DOT operating administration with your overall goal for the next fiscal year is not required.
• However, if we determine that there are problems with the goal (e.g., it was not calculated properly, the method used to calculate it was inadequate); we will work with you to fix the problems and, if necessary, adjust the goal.
• Note that your projections of your expected use of race-conscious and race-neutral measures to meet goals are subject to our approval (26.51(c)).
• DOT operating administrations may review and approve or disapprove your contract goals, even if review of your overall goal is not complete.
• For example, suppose you submit your overall goal for the next fiscal year to FHWA on August 1. FHWA identifies concerns about the overall goal itself or your projection of participation to be obtained by race-neutral and race-conscious means, respectively. You and FHWA are continuing to discuss the goal as the new fiscal year begins. If you are letting a contract during October, after the new fiscal year has begun, you could use the submitted overall goal as a reference point for setting a contract goal, but FHWA retains the discretion to review and approve or disapprove your contract goal.

What types of contracts can be counted toward DBE goals? (Section 26.3(a), 26.55,)

• DBE participation can be counted toward goals for any contract let by the recipient in which Federal funds listed in 26.3(a) participate.
• If a recipient lets a contract to any type of contractor, and Federal funds listed in 26.3 participate in that contract, then the DBE’s participation would count toward the recipient’s DBE goals.
• Part 26 does not limit the type of contractors who can participate in the DBE program or the types of contracts appropriate for DBE participation. All DOT-assisted contracts, whether construction or non-construction (e.g., professional services, consulting, supplies) can be used for DBE participation.
• Recipients should be aware that there may be some types of contracts that are not eligible for the Federal assistance specified in 26.3 (e.g., contracts supporting transit operations for some FTA recipients). Participation by DBEs in such contracts does not count toward goals in the DBE program. Recipients should contact the concerned operating administration for further information about DBE participation in a particular contract or type of contract.

What steps are recipients expected to take to satisfy the consultation component of the public participation required for goal setting? (Section 26.45(g))

• The goal setting process used by recipients to establish their annual overall goal submitted to the operating administrations for approval must include “consultation with minority, women’s and general contractor groups, community organizations, and other officials or organizations” which could be expected to have information concerning the availability of DBEs and non-DBEs. This consultation process is also intended to gather information concerning the effects of discrimination on opportunities for DBEs, if present, – and establishing a level playing field for the participation of DBEs.
• By definition, the process of consultation involves a scheduled face-to-face conference or meeting of some kind with individuals or groups of interested persons for the purpose of developing and/or assessing a proposed goal and methodology and seeking information or advice before a decision is made. Publication of the proposed goal to the general public is not synonymous with, or a substitute for, consultation with interested or affected groups.
• Recipients should identify groups within their contracting market that are likely to have information relevant to the goal setting process or that have a stake in the outcome of the process. Those groups should be contacted and invited to participate in a face-to-face exchange (which may occur at a public meeting) aimed at obtaining the kind of information set out in the regulation regarding establishing the overall DBE goal. Efforts should be made to engage in a dialogue with as many interested stakeholders as possible. An advisory committee may be one method of consultation (but not the exclusive method, since this could lead to a recipient talking only to the same people all the time). A description of the consultation process and its purpose should be provided to all invitees.
• Consultation is expected to occur before the proposed goal is established and prior to publication of the proposed overall goal for inspection and comment by the general public.
• The consultation process must be documented in the recipient’s annual goal submission.

Can a recipient or recipients set a project overall goal (e.g. for a large, multi-year project)? How does such a project goal relate to annual overall goals? Can such a project goal cut across modal lines? (Section 26.45(f2); 26.53(e))

• A recipient of DOT funds – whether from FAA, FTA, or FHWA – may set a project overall goal for a particular project. Typically, such a goal would be used for a large multi-year project.
• The recipient’s overall project goal for the project would be separate from the recipient’s annual overall goal for the rest of its DOT-assisted contracting activities.
• The recipient’s submission of the overall project goal would have to meet the same requirements as for any other overall goal (see 26.45(f) (3)), specifically including breakout of the participation anticipated through race-neutral and race-conscious means. DOT would review the goal submission just as it does in other cases.
• With respect to its other DOT-assisted contracting activities, the recipient would also submit its regular annual overall goal for review. In so doing, the recipient, in calculating the annual overall goal for a given fiscal year, would not consider funds or contracting opportunities attributable to the project covered by the separate project goal.
• For example, suppose a recipient will expend $150 million on Project X in Years 1-3. The recipient will also expend $40 million on other projects in each year during the same period. The recipient could submit a single project overall goal for Project X, based on the $150 million to be expended over the life of the project. The recipient would also submit an overall goal each year for its other DOT-assisted contracting activities in Year 1, Year 2, and Year 3, based on the $40 million the recipient was expending in each of those years.
• A project overall goal can be used for a multi-modal project. For example, suppose FHWA Recipient W and FTA Recipient Z are cooperating on a project, which involves the expenditure of $500 million between them. Recipients W and Z can jointly submit a single overall project goal for the project. W and Z would also each submit regular annual overall goals for their other activities during the time that the project was under way.
• Many large projects on which it could be useful to establish a project overall goal may be design-build projects. The overall project goal, in such a case, would serve as the goal for the master contractor. The master contractor would then establish contract goals on the contracts it is letting at a level appropriate to meet the race-conscious portion of the project overall goal.
• Currently Part 26 explicitly authorizes the use of project goals in FAA and FTA projects.While nothing in the rule precludes the use of project goals in FHWA projects, the rule does not explicitly mention FHWA projects in this context. However, it is the Department’s view that recipients of funds from all three operating administrations can make use of project goals.

How do recipients project what portion of their overall goal they will meet through race- neutral means? Section 26.51(a) – (d))

• It is important to keep in mind that a recipient must not only submit its projections to DOT, but also its basis for the projection. This consists of a sound analysis of the recipient’s market and the race-neutral measures it employs, on the basis of which the recipient realistically can project attaining a certain amount of DBE participation without the use of contract goals or other race-conscious measures.
• The analysis cannot be simply guesswork or based on a hope or policy preference. It must rest on information about the real world of contracting in the recipient’s contracting area.
• Recipients know their own markets and the types of contracts most likely to be let. In determining the level of participation to be achieved through race-neutral means, the recipient should use its experience concerning the availability of DBEs in particular types of contracts in their market.
• Here are some examples of questions recipients could ask in making this analysis:
• What is the participation of DBEs in the recipient’s contracts that do not have contract goals?
• There may be information about state, local, or private contracting in analogous areas where contract goals are not used (e.g, in situations where a prior state/local affirmative action program was ended). What is the extent of participation of minority or women’s businesses in programs without goals?
• What is the extent of race neutral efforts that the recipient will have in place for the next fiscal year?
• Are there firm, written, detailed commitments in place from contractors to take concrete steps sufficient to generate a certain amount of DBE participation through race-neutral means?
• To what extent have DBE primes participated in the recipient’s programs in the past?
• To what extent has the recipient oversubscribed its DBE goals in the past?
• Where there is not systematic data in existence, recipients could conduct quick, informal surveys and use the results as part of the basis for their projections.
• Recipients should closely monitor DBE participation relative to their projections to determine whether mid-course corrections are needed.

As a recipient, do you have to wait for DOT approval of your overall goal before starting to use it in the next fiscal year? Section 26.45(f) (4); 26.51(c), (e) (3)

• Prior concurrence of a DOT operating administration with your overall goal for the next fiscal year is not required.
• However, if we determine that there are problems with the goal (e.g., it was not calculated properly, the method used to calculate it was inadequate); we will work with you to fix the problems and, if necessary, adjust the goal.
• Note that your projections of your expected use of race-conscious and race-neutral measures to meet goals are subject to our approval (26.51(c)).
• DOT operating administrations may review and approve or disapprove your contract goals, even if review of your overall goal is not complete.
• For example, suppose you submit your overall goal for the next fiscal year to FHWA on August 1. FHWA identifies concerns about the overall goal itself or your projection of participation to be obtained by race-neutral and race-conscious means, respectively. You and FHWA are continuing to discuss the goal as the new fiscal year begins. If you are letting a contract during October, after the new fiscal year has begun, you could use the submitted overall goal as a reference point for setting a contract goal, but FHWA retains the discretion to review and approve or disapprove your contract goal.