Informing New ADOT Strategies for Meeting Federal DBE Requirements

To receive federal funds, as stated in 49 CFR 26.3, ADOT is required to administer a Disadvantaged Business Enterprise (DBE) Program in compliance with all laws, regulations, Executive Orders, and guidance. DBEs are for-profit small businesses where socially and economically disadvantaged individuals own at least 51 percent interest and also control management and daily operations. ADOT’s DBE program applies to ADOT and all subrecipients, vendors, consultants, and contractors, that directly or indirectly receive USDOT funds. The ultimate objective of the federal DBE program requirement is to achieve sufficient DBE participation in projects (a specific percentage of federally funded project costs utilized by DBEs) without the need to mandate contract goals (requiring that a certain percentage of funds on contracts be subcontracted to DBEs). To help meet that objective, ADOT is required to periodically conduct a disparity study and a DBE availability study. ADOT then uses the findings to determine annual DBE goals and assess ADOT’s progress in meeting them. Presently, the overall department goal is for DBE firms to receive 9.55 percent of project costs. The most recent disparity study completed in 2015 determined that DBE firms were not getting sufficient work compared to their availability in the Arizona construction marketplace. Therefore, the department is required to continue setting DBE goals on contracts. ADOT’s overall DBE goal has two subgoals: race- and gender-conscious, which is achieved by setting DBE goals on contracts, and race- and gender-neutral, which is achieved through the voluntary actions of contractors and/or through DBE firms winning contracts as prime contractors. ADOT has been far more successful at meeting the race- and gender-conscious goals, an achievement earned with significant administrative costs and efforts by both contractors and ADOT, than in reaching the race- and gender-neutral goals. States that meet race- and gender-neutral goals, that is they havea sufficient level of voluntary DBE participation by contractors hiring DBEs as subcontractors and/or a sufficient level of DBE firms winning contracts as prime contractors , have significantly reduced the administrative costs associated with DBE compliance efforts. Identifying and understanding the laws, policies, programs, and practices that impact the DBE programs in those states, as well as how the construction industry and DOTs in those states approach and comply with DBE regulations, would help ADOT develop strategies to: • increase voluntary participation by contractors and/or increase DBE firms winning contracts as prime contractors • exceed race- and gender-neutral goals to the point that it could lead to the elimination of the need to set DBE goals on federally funded contracts. Research Objectives: This research will collect and analyze information that may help ADOT to consistently meet and exceed race- and gender-neutral goals through voluntary DBE participation by contractors hiring subcontractors, and through increasing DBE utilization as prime contractors.


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    Filing Info

    • Accession Number: 01653293
    • Record Type: Research project
    • Source Agency: Arizona Department of Transportation
    • Contract Numbers: SPR-765
    • Files: RiP, STATEDOT
    • Created Date: Dec 7 2017 11:51AM