DBE UPDATE Birmingham, August 2009

HOUSE HEARING March 2009, House T&I Purpose was to put before Congress evidence of continuing compelling need for DBE program Idea, in part, is to head off Rothe-style attacks DOT statistical evidence, disparity studies, testimony from DBEs

H.R. 915 House-passed FAA reauthorization bill Senate currently working on its version Includes findings of continuing need for DBE program Several program changes: PNW inflation adjustment, retirement accounts, training Doesn’t directly address interstate certification House surface bill likely to include similar features

DOT NPRM Proposed 3-year rather than annual goal submission and review for Part 26 About 30 comments Most favored longer cycle (reduced burdens), but want opportunity to adjust Some opposition (not flexible enough to respond to market or grant changes) Next step – draft final rule

DOT ANPRM Asked for comment on 6 issues, most resulting from stakeholder meetings Around 30 comments Next stage - NPRM asking for comment on specific proposals

COUNTING ISSUE Issue concerns whether to count as DBE participation stuff a DBE sub obtains from the prime contractor on a project. Current reg says no. Comments were varied: some want to maintain status quo, some want state to be able to make exceptions some want to count stuff obtained from prime, others want nothing from third-party sources to count

UNBUNDLING Concept is to break up large contracts into bite- size chunks small firms, including DBEs, can do. Everybody thinks this would be a good thing to do, few think it is practical Most commenters said leave to state discretion Some specific proposals for regulatory requirements (e.g., require for a certain contract size, provide incentives for unbundling)

FORMS Widespread support for rewrite of PNW and, to a lesser extent, application forms Many specific, detailed suggestions for modifying forms, Including a couple model forms that people sent in

INTERSTATE CERTIFICATION Issue is how to facilitate certification in State B of firm certified in State A, while maintaining program integrity Big issue for DBE community Barriers are the 3 Ts – training, trust, and turf DOT took big step in 1999 by requiring UCPs for one stop shopping within each state ANPRM asked what next steps should be

INTERSTATE CERTIFICATION (2) Majority of commenters favored some sort of reciprocity Some of these wanted pure reciprocity Others would allow post-certification review by State B for fraud or other reasons A few comments supported “Federalizing” certification or a national DBE data base Some comments opposed reciprocity: wanted to maintain local control or to wait until there was better nationwide training

INTERSTATE CERTIFICATION (3) Some states preferred simply to make own decisions based on documentation provided by State A Widespread support for uniform national training

OVERSIGHT Commenters had very different ideas about what sort of oversight was needed Most recipients commenting wanted more DOT $ if DOT wanted more oversight Some commenters thought things were fine as is

T for C Current rule says if prime wants to dump DBE sub it signed up to meet goal for other than good cause, and self-perform work, then prime needs written consent from recipient ANPRM asked if same rule should apply any time prime wants to dump DBE, even if prime doesn’t want to self- perform 15 of 18 comments favored adding such a requirement

OTHER REG PROJECTS Final rule doing size inflationary adjustment already issued Refinement of some ownership criteria Potential project on PNW inflationary adjustment Airport concessions: sunset/program review; national car rental goals

RECENT Q&A’S Small business set-asides Relationship between certification in particular types of work and eligibility for DBE credit to meet a contract goal DBE coverage under ARRA (highway, transit, and airport projects, but not high- speed rail or OST discretionary “Tiger grants”)

ARRA BONDING PROGRAM $20m in ARRA for DBE bonding program, applying to ARRA-funded DOT projects DOT OSDBU worked with SBA to set up joint program SBA bailed out at last minute DOT now working on new version of program. Would defray fees for bond premiums and SBA fees, where SBA program is involved Estimate this could be $350k per bond, for assistance to DBEs

ST. LOUIS DUAL GOAL PROPOSAL MODOT and IDOT, prodded by local MBE community, plan to ask for program waiver to have separate MBE/WBE goals, rather than a single DBE goal, on a mega-project for a new Mississippi River bridge Concern is that too few MBEs get work vs. white female-owned firms Some public meetings and work with a consultant to come up with rationale and supporting data.

ST. LOUIS DUAL GOAL PROPOSAL (2) There have been 3 waivers of Pt. 26 prohibition of group specific goals: CO, CA, OR In each case, detailed disparity study showed overutilization for some groups and underutilization for others There is not yet a disparity study for MO/IL Waiver request was supposed to be in already; apparently data is delayed. First solicitations are in September.