From Tech Transfer Newsletter, Spring 2009 » printer-friendly

Mandatory Race Conscious DBE Program Required of All Federal-Aid Funded Projects

Compiled by Eduardo C. Serafin, PE, AICP, Technology Transfer Program

In early March of 2009, the Federal Highway Administration (FHWA) approved the California Department of Transportation (Caltrans) 2009 Disadvantaged Business Enterprise (DBE) Annual Overall Goal. FHWA's approval required the immediate implementation of the new DBE Program that includes a Race Conscious component (RC DBE Program). Effective immediately, Caltrans and local agencies receiving Federal-Aid funds must begin transitioning to the new RC DBE Program.

The traditional implementation of the DBE program includes six groups as defined by the Code of Federal Regulations (49 CFR Part 26): Asian Pacific Americans, African/Black Americans, Native Americans, Women, Latino/Hispanic Americans, and Asian Subcontinent Americans. The Caltrans Availability and Disparity Study found "statistically significant" underutilization of four DBE groups, which are now also referred to as Underutilized DBE (UDBE):

• Asian Pacific Americans
• African/Black Americans
• Native Americans
• Women

As a result of the Caltrans Availability and Disparity Study, Caltrans has shifted to the Race Conscious DBE program to address the underutilization of the four UDBEs above.

All local agencies (i.e., cities and counties, metropolitan transportation organizations, and regional transportation planning agencies) are strongly encouraged to begin their transition to the new RC DBE Program immediately. Under the new RC DBE Program, local agencies must incorporate the new race conscious contract specifications into all Federal-Aid consultant and construction contracts.

To help Caltrans quickly launch the new mandatory Race Conscious (RC) DBE program, Tech Transfer hosted a total of 16 free training seminars in April throughout the state. 791 people participated in the training statewide. The main goal of the training program was to help train local agencies to administer the new RC DBE Program required for all Federal-Aid funded projects. The training program focused on the following key elements:

• Program Overview for Underutilized DBE (UDBE)
• Calculating Annual Anticipated DBE Percentage Levels (AADPL)
• Evaluating Good Faith Efforts (GFE)
• DBE Reporting
• DBE Contract Administration

We are now working on an online version of the training for those who were unable to attend the DBE training sessions or need a refresher. Watch for release by September 30, 2009.

For more information about the Race Conscious Disadvantaged Business Enterprise program, please visit Caltrans' webpage at www.dot.ca.gov/hq/LocalPrograms/DBE_CRLC.html.

DBE Q&A with Caltrans

How do the Disparity Study results affect the local agencies' Annual Anticipated DBE Percentage Levels (AADPLs)?

The Disparity Study results require local agencies to split out their AADPLs into Race Neutral and Race Conscious portions. The Race Conscious portion of the AADPL is limited to the four underutilized groups. The Race Neutral portion of the AADPL is inclusive of all six groups.

The Overall Statewide Goal is 13.5% (6.75% Race Neutral, 6.75% Race Conscious). Can local agencies adopt this goal instead of calculating their own AADPLs?

No, in order to maintain a narrowly tailored DBE Program, local agencies must calculate their AADPLs based on their respective market areas, types of work, and total dollars.

What is a UDBE?

A UDBE is an underutilized Disadvantaged Business Enterprise. UDBEs fall into one of the following groups: African American, Asian Pacific American, Native American, and Women.

How do local agencies and contractors locate UDBEs in the California Unified Certification Program (CUCP) database? Is there a UDBE certification?

There is no specific certification for UDBEs. To facilitate locating UDBEs, the CUCP database breaks out DBEs by gender and ethnicity.

Do local agencies count participation by DBEs that are owned by Hispanic Males and Subcontinent Asian Male — the two groups that were found not to have statistically significant disparity in the Study?

Yes, but they are not counted towards the contract goals nor the Race Conscious portion of the local agencies' AADPLs. Participation by Hispanic Males and Subcontinent Asian Males is counted towards the Race Neutral portion of the local agencies' respective AADPLs.

Are we reinstating the Good Faith Effort requirement in the procurement process for federal-aid contracts? Where can one find Good Faith Effort guidance?

Yes. The Good Faith Effort requirement is being reinstated but is limited to UDBEs. Guidance may be found at www.dot.ca.gov/hq/LocalPrograms/DBE_CRLC.html.

If local agencies have previously submitted their 2009 AADPLs prior to the transition back to a Race Conscious DBE Program, are they required to resubmit their AADPLs?

No, local agencies are not required to resubmit their 2009 AADPLs. They are, however, required to determine the portion of the AADPLs they believe they can meet through race neutral means, and the portion of their AADPLs they can meet through using contract goals (race conscious), and set individual contract goals. To determine the Race Neutral portion of the AADPL, local agencies may use the previous year's actual DBE attainment level. The remaining percentage of the AADPL may constitute the Race Conscious portion.

Are local agencies' proposed AADPLs subject to a 45-day public comment period and consultation with minority, women's and general contractor groups, etc.?

A public comment period is not required in the development of local agencies' AADPLs.

Are contractors on federal-aid contracts required to substitute UDBEs with UDBEs or make a good a faith effort to do so?

Yes, contractors on federal-aid contracts are required to notify the local agency and document good faith efforts to replace the UDBE with another UDBE.

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