1. Implementing Race-Neutral Measures in State DBE Programs
Summary Prepared By:
Implementing Race-Neutral Measures in State DBE Programs
April 2019
Patrick Casey and Andrea Thomas with CTC & Associates LLC; and James S. Thiel, Attorney at Law
Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs (2011) 1

2. Contents About the Study Methods Strategies Challenges Recommendations2

3. NCHRP Project 20-05: Synthesis of Highway Practice
Authorized by the American Association of State Highway and Transportation Officials
Funded through the National Cooperative Highway Research Program
Compiles and documents race-neutral strategies used successfully by state Departments of Transportation (DOTs)
Synthesize and identify remedies used to overcome problems involving race- neutral efforts faced by state DOTs when administering DBE programs 3

4. Background
Race-Neutral Measures are designed to remove barriers and enhance opportunities for all small businesses, not just DBEs
DOTs under the jurisdiction of the Ninth Circuit Court of Appeals are required to meet goals using 100% race-neutral methods. States in the Ninth Circuit: Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington
Supportive services are provided through FHWA’s DBE/SS program
Race-neutral DBE participation includes when a DBE wins a prime contract through customary procedures or is awarded a subcontract on a prime contract that doesn’t have a DBE goal
Staff from 47 of the 50 states participated in this survey study
In addition to the Ninth Circuit states, five other states that participated reported currently using 100% race-neutral measures to meet DBE goals: Florida, Maine, Maryland, Vermont, and Wyoming 4

5. Methods The study was approached using:
Literature review of state and local practices
Surveys to members of the AASHTO Subcommittee on Civil Rights
Interviews with staff members at state DOTs
Respondents evaluated 22 race-neutral measures categorized as:
Supportive services & training
Administrative support
Marketing & outreach
Financial assistance
Responses were ranked from:
1-not at all effective
2-somewhat effective
3-effective
4-very effective
5-extremely effective
Methods 5

6. Significant Challenges
Financial obstacles were rated as the greatest challenge to meeting goals.
Lack of access to capital / cash flow issues were viewed as the most severe. External factors such as the economy were also seen as significant concerns.
Prime contractors not willing to work with new DBEs is a significant challenge.
Lack of commitment / cooperation by prime contractors in working with new firms either due to existing relationships with other DBEs or uncertainty in the new firms’ skills.
The lack of DBE firms working as prime contractors is just as significant of a challenge.
The more established a DBE firm, the more likely to be awarded contracts as prime contractors. However, larger DBE firms can sometimes overshadow start-ups, making this more difficult.
Lack of experience was viewed more as a problem, but was rated greater than other challenges.
DBE firms lack management experience and have an uncertainty in how to expand their business. DBEs also lack the equipment necessary to meet contract requirements.
Significant Challenges
Respondents were asked to rate the severity of 19 challenges and their impact on achieving DBE goals. 6

7. Respondents’ ratings of the significance of 19 challenges that impact states’ ability to meet their DBE goals (among those who had experienced these challenges).
Respondents using 100% race-neutral measures tended to identify certain issues as problems more than states in general did.
Challenges Cont. 7

8. Most Effective Strategies
1:1 business reviews
Providing firms with bidding assistance
Assisting firms in using technology
Providing training classes and technical education
Providing business development assistance
Supporting Services & Training Measures
Limiting small contracts to proposals by small firms
Facilitating mentor/protégé programs
Unbundling contracts to allow and encourage DBEs to bid as prime contractors or quote on subcontracts
Administrative Support
Facilitating meetings and networking between DBEs and prime contractors and technical assistance partners
Publishing newsletters
Marketing & Outreach
Participating in loan mobilization programs
Assisting DBEs with bonding and financing
Financial Assistance
Most Effective Strategies 8

9. Top 10 Rated Strategies
Supportive services and training measures were widely used among respondents, as were several marketing and outreach strategies. Strategies that were rated most effective by respondents were not always the most commonly used. 9

10. Supportive Services as Solutions
Financial:
Participate in loan mobilization programs
Eliminating up-front cost retainage on prime contracts and subcontractors
Lack of Experience / Equipment
Provide firms with business development assistance, and establishing business development programs
Conducting one-to-one assessments of selected DBE firms and tailoring technical assistance to their needs
Issues with Prime Contractors
Hosting networking events, meet-and-greets, and holding pre-bid or pre-letting meetings
Proactive project monitoring by DOT staff and early intervention when issues arise
DBE Development
Utilizing supportive services initiatives that help DBE firms grow and develop
Targeting programs towards underutilized and emerging DBEs 10

11. Transitioning to 100% Race-Neutral Measures
States using 100% race-neutral measures were similar in their responses for strategies and challenges; however, they did fall within 20 percentage points in their ratings compared to other states. There were no strategies that were commonly used but rated ineffective. All states responded with additional information emphasizing the importance of communication between DBEs and prime contractors. Additional recommendations include:
Tailor training to meet the needs of different DBE subgroups
Involve industry representatives as coaches or instructors
Ensure reliable systems are in place for collecting contract and payment data
Ensure that the supportive services program uses a variety of strategies to help DBEs grow their businesses in a race-neutral environment
Facilitate upper management support of the DBE program 11

12. Additional Information
This synthesis considered the effectiveness of race-neutral measures from the perspective of state DOTs.
Identifying regional differences, agency sizes, or state and federal funding levels would allow states to tailor their implementation to better suit their circumstances and resources.
Data analyzing the extent to which states have achieved portions of their annual DBE participation goals would better assess the effectiveness of implementing race-neutral measures.
More research into how states implement complex race-neutral measures would allow more agencies to explore these programs.
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Additional Information
To access this study, visit 12

13. For more information about Race-Neutral Measures, contact GCAP Services, Inc.
Office Hours: Monday – Friday, 8:00 am - 5:00 pm.
Address: 3525 Hyland Avenue, Suite 260, Costa Mesa, CA 92626
Website:
Phone:
Fax: 13