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Goal Setting

Understand the purpose and approaches to setting goals for overall and project goals in DOT-assisted projects. Learn about the minimum requirements and various methods for calculating the DBE goal. Review tips provided by USDOT for goal-setting in the DBE program.

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Goal Setting

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  1. Goal Setting

  2. Goal Setting and Implementation Purpose of Overall Goal and Project Goal 49 C.F.R. 26.45

  3. Goal Setting and Implementation Purpose of Overall Goal and Project Goal Approaches to Calculate Goal 49 C.F.R. 26.45

  4. Goal Setting and Implementation Purpose of Overall Goal and Project Goal Approaches to Calculate Goal 8 Minimum Requirements 49 C.F.R. 26.45

  5. Purpose of Overall Goal Establish AnticipatedAmount of DBE Participation on DOT-Assisted Projects • FAA/FHWA/FTA Recipients: annual goal reviewed every 3 years • FTA TVMs: annual goal reviewed each year 49 C.F.R. 26.45

  6. Purpose of Overall Goal The goal percentage represents the amount of DBE participation that would be expected absent the effects of current and past discrimination 49 C.F.R. 26.45

  7. Overall Goal and Project Goals Same Substantive and Procedural Requirements 49 C.F.R. 26.45

  8. Must Follow USDOT’s “Tips for Goal-Setting in the DBE Program” http://www.transportation.gov/osdbu/disadvantaged-business-enterprise/tips-goal-setting-disadvantaged-business-enterprise Operating Administrations (OAs) reviewing goals Using Same Guidance

  9. Overall Goal and Project Goal OA reviews Recipient’s proposed overall goal and may adjust the goal or require the Recipient to adjust the goal if it believes the goal has not been correctly calculated or the methodology is inadequate Recipient may operate under proposed goal prior to OA approval 49 CFR 26.45 (f)(4) 9

  10. Goal Setting and Implementation Purpose of Overall Goal and Project Goal Approaches to Calculate Goal 8 Minimum Requirements 49 C.F.R. 26.45

  11. Approaches to Calculate the DBE Goal

  12. 5 Approaches toCalculate the DBE Goal • Census Data + DBE Directory • Bidders List—49 C.F.R. 26.45(c)(2) • Disparity Study Data • Goal from another DOT Recipient • Alternative Methods—49 C.F.R. 26.45(c)(5) 49 C.F.R. 26.45

  13. 5 Approaches toCalculate the DBE Goal 49 C.F.R. 26.45

  14. Census Data + DBE Directory • Determine ready, willing, and able DBEs in your market area from the DBE Directory • Determine ready, willing, and able non-DBEs in your market area from the Census Data • Determine all ready, willing, and able firms performing work under the same NAICS codes • Number of DBEs ÷ Number of all firms = Base figure for relative availability 5 Approaches toCalculate the DBE Goal

  15. Bidders List—49 C.F.R.26.45(c)(2) • Bidders from the past 3 years • 26.11(c) • Successful and unsuccessful bidders • Mechanism used to capture this data 5 Approaches toCalculate the DBE Goal

  16. Disparity Study Data • Percentage figured derived from data 5 Approaches toCalculate the DBE Goal

  17. Goal from another DOT Recipient • Same or substantially similar market • Overall goal must be in compliance with 49 C.F.R. 26.45 • Goal can be used as base figure • Must make Step 2 Adjustments—49 C.F.R. 26.45(d)(iii) 5 Approaches toCalculate the DBE Goal

  18. Alternative Methods—49 C.F.R. 26.45(c)(5) • Demonstrable evidence of local market conditions • Prequalification list or bidders list must meet regulatory requirements • If using a prequalification list or bidders list exclusively, it must meet the regulatory requirements • If list does not meet the regulatory requirements, you must supplement with additional sources 5 Approaches toCalculate the DBE Goal

  19. Goal Setting and Implementation Purpose of Overall Goal and Project Goal Approaches to Calculate Goal 8 Minimum Requirements 49 C.F.R. 26.45

  20. Minimum Requirements Included in each Method

  21. 1. FTA-Assisted Contracting Opportunities ALL OA-Assisted Activities that include Possible Contracting Opportunities Include Sub-Recipient Contracting Opportunities Assign Appropriate NAICS Code for Contracting Opportunities 49 C.F.R. 26.45

  22. 1. FTA-Assisted Contracting Opportunities Example

  23. 2. Geographic Market Area Determine Relevant Geographic Market Area (GMA): Geographic distribution of contractors and subcontractors and area in which contracting dollars are spent Note: relevant Market Area may not be the same State geographic boundaries 49 C.F.R. 26.45

  24. 2. Geographic Market Area Area(s) = state(s), region, etc. Award a substantial majority of contracts Boundaries of the geographic market area

  25. 2. Geographic Market Area Example “Even though the spending data was not comparable, over 75% of [Grantee]’s vendor pool is located in [ ] County, therefore the [Grantee] determined [ ] County to be its local market.”

  26. 3. Step 1: Base Figure DBEs Potential DBEs All other Firms Geographic Market Area NAICS Codes or Other Work Category Willing to Comply

  27. Applies to All Firms May Include Potential DBEs in Goal Setting May NOT Include Potential DBEs in Counting DBE Participation, Reporting, or Good Faith Efforts Determinations 3. Step 1: Base Figure Ready, Willing, and Able

  28. 3. Step 1: Base Figure Potential DBEs Supplement certified firms list • Minority and women-owned business lists • Census data on minority and women-owned businesses in market area Adequate Outreach Needed to Encourage Firms to become Certified 28

  29. 3. Step 1: Base Figure Census & DBE Directory Determine number of ready, willing, and able DBEs from DBE Directory Use Census Bureau County Business Pattern (CBP) database to determine number of all ready, willing, and able businesses available in your market performing work in same NAICS codes http://www.census.gov/epcd/cbp/view/cbpview.html. = Base Figure 29

  30. 3. Step 1: Base Figure Expand NAICS Search Search NAICS 236210

  31. 3. Step 1: Base Figure Expand NAICS Search Search NAICS 236210

  32. 3. Step 1: Base Figure Bidders List Method 49 CFR §26.45(c)(2): Acceptable only if you have a method of collecting data on: • ALL businesses, successful OR unsuccessful, that have bid or quoted on prime or subcontracts during the previous three or one year period • ALL DBE and non-DBE subcontractors that submitted bids or quotes during time period. 32

  33. 3. Step 1: Base Figure Bidders List Method 10 DBEs bid or quoted on prime or subcontracts ___________________ = 10.00 % Base Figure 100 Total Firms bid or quoted on prime or subcontracts 33

  34. 3. Step 1: Base Figure Disparity Study A disparity study typically yields best data available If you have conducted a disparity study in market area and choose another method, explain why 34

  35. 3. Step 1: Base Figure Weighing Weighting by Work Type • Provides a more narrowly-tailored model of availability • Weights used are proportion of dollars spent within each industry: resulting percentage is more heavily influenced by availability in industries where more dollars are spent • May use NAICS, internal work codes, etc. 35

  36. 3. Step 1: Base Figure Weighing Decide which work types best represent your DOT-assisted contracts (NAICS Codes) Tally the dollars spent in each work type category as a percentage of the total contract dollars spent Assign work types to each DBE and non-DBE firm 36

  37. 3. Step 1: Base Figure Weighing Weighting Example: DOT contracts primarily in Trucking, Engineering/Design, and Construction: 37

  38. 3. Step 1: Base Figure Weighing Example 38

  39. Recipient must examine all available evidence and determine what adjustments, if any, are necessary It is not necessary to make a Step Two adjustment but must include explanation 4. Step 2 Adjustment 49 C.F.R. 26.45

  40. Use DBE participation data from past 3 to 5 years to demonstrate capacity (percentages) If MPP figure is very similar to Step One base figure, should not make any adjustment for past participation 4. Step 2 Adjustment Median Past DBE Participation (MPP)

  41. MPP Example • Tally total DBE achievement percentage for 5 years. 41

  42. MPP Example • Choose median (not average) percentage: • Average MPP % with Base Figure %: • BF (11.65%) + MPP (12.00%) Adjusted BF • 2 = 11.83% 42

  43. 4. Step 2 Adjustment Other Evidence Information from disparity studies Lack of access to financing/bonding Statistical employment data Other data affecting likely DBE participation—drastic changes in the economy 43

  44. UCP and US Bidders List or Census Data PreQual List 4. Step 2 Adjustment Supplement Existing Sources

  45. 4. Step 2 Adjustment Example 45

  46. DBE Directory USCensus Data FAA DBE Connect Supplemental Sources 5. Identify Sources

  47. 5. Identify Sources Example

  48. Projectionof Race-Neutral and Race-Conscious Participation 6. Race-Neutral/Race-Conscious Breakdown 49 C.F.R. 26.45 and 26.51

  49. Projectionof Race-Neutral and Race-Conscious Participation Maximum Feasible Portion of Overall Goal using Race Neutral Measures • Specify which race neutral measures will be implemented 6. Race-Neutral/Race-Conscious Breakdown 49 C.F.R. 26.45 and 26.51

  50. Projectionof Race-Neutral and Race-Conscious Participation Maximum Feasible Portion of Overall Goal using Race Neutral Measures • Specify which race neutral measures will be implemented Must Establish Contract Goals to Meet Remaining Portion of Goal 6. Race-Neutral/Race-Conscious Breakdown 49 C.F.R. 26.45 and 26.51

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