FHWA DBE Program Waiver Implementation Briefing Office of Equal Opportunity May 2017 Roger Millar, Secretary of Transportation Keith Metcalf, Deputy Secretary of Transportation
Background What is the Disadvantaged Business Enterprise Program? • To receive federal funds, WSDOT is required to implement a Disadvantaged Business Enterprises (DBE) program. • One of the objectives of the DBE program is to ensure we create a level playing field for businesses owned by socially and economically disadvantaged individuals to participate on federally funded transportation projects. • WSDOT’s DBE program is comprised of race-conscious (enforceable) and race-neutral (voluntary) measures. 2
Background (continued) What is a Disparity Study? • To ensure this program is in conformance with the DBE program regulations, an approved method to ensure WSDOT’s program is narrowly tailored is to conduct a “disparity study.” • One of the elements of a disparity study is a comparison of the percentage of available DBE firms as a percentage of all firms in the market area, to the utilization of available DBEs on WSDOT contracts and subcontracts. • This information can be used to assist us in setting the overall DBE goal for federal-aid highway contracts and DBE goals on specific contracts. 3
Background (continued) What is a waiver? • A waiver is a deviation from a State Highway Administration’s DBE program that requires U.S. Department of Transportation approval. • A waiver is generally an adjustment to the DBE program to account for market conditions experienced in any individual state. 4
Background (continued) Why did WSDOT request a waiver? • Decision was based on the analysis of data from federal fiscal years 2009 to 2011 contained in the 2012 WSDOT DBE Program Disparity Study. • Non-minority women owned DBEs were not experiencing underutilization. • Federal regulations and case law required WSDOT to have a narrowly tailored program. The study showed non-minority women owned DBEs did not face disparate treatment with regard to subcontracting. • Accordingly, WSDOT was obligated to request a waiver to remove them from race-conscious participation. 5
Background (continued) What caused the delay in implementation? • USDOT as the approving authority must analyze every aspect of a request when considering a response. • Granting waivers of this type are rare, with only a few states currently implementing waivers. • On March 28, 2014, WSDOT made the initial waiver request. WSDOT sent two additional requests on Nov. 9, 2015, and March 3, 2016. • WSDOT received the response in December 2016. WSDOT is waiting for two items to implement the waiver: • Contingent upon preliminary results of the new DBE Program Disparity Study. • Implementation of B2GNow, a diverse business software tracking system. 6
Implementation • Applied to contracts advertised in June 2017 • Existing contracts will not be affected in any way • New classification/subset of DBEs will be created as; – Underutilized Disadvantaged Business Enterprises (UDBEs) • UDBEs are firms who experience underutilization 7
Implementation (continued) A DBE must be classified as underutilized (UDBE) to qualify for all things associated with Condition of Award (COA) Goals • WSDOT will establish UDBE contract goals – Based on: • Opportunities within the contract • Availability of UDBEs • UDBE – COA substitution • UDBE – COA terminations • UDBE – basis for Good Faith Efforts • DBE only firms (non-UDBE): – Do not count toward race conscience participation, UDBE goals, substitutions, terminations or Good Faith Efforts – Count toward race-neutral participation 8
Implementation (continued) • UDBE Condition of Award changes: – Race-conscious participation; • UDBE Condition of Award Goals – Utilization Certification Form – Written Confirmation Form – Perform a Commercially Useful Function 9
Implementation (continued) • DBEs (inclusive of UDBEs): – Can work outside certification or not perform a commercially useful function – but this work does not count toward DBE goals – For participation to count, the firm must still perform a Commercially Useful Function – Count toward race-neutral portion of the overall DBE goal – Eligible for DBE Support Services – Voluntary Small Business Enterprise Program Again, as this will be effective when the new specification is included, contracts executed with the previous language will administered under the old rules. 10
Implementation (continued) • Project goal setting will be impacted, 49 CFR 26(3)(2): “…The goal for a specific contract may be higher or lower than that percentage level of the overall goal, depending on such factors as the type of work involved, the location of the work, and the availability of DBEs for the work of the particular contract.” (emphasis added) • New Certification Directory: https://wsdot.diversitycompliance.com/ 11
Implementation (continued) Finding a UDBE firm: • Search by certification type: – DBE – Alaska Native DBE – SEDBE • At the bottom of the page, under Reference UDBE – Select Yes 12
Frequently Asked Questions? • How long will the waiver remain in effect? – Until it is no longer necessary; then, a request to rescind the waiver is made and approval is granted by USDOT. • What will WSDOT do to monitor non-minority women participation? – WSDOT is implementing B2GNow, a diversity software tracking system, and will monitor all presumptive groups’ participation. 13
Frequently Asked Questions? • Does this affect all DBE work in Washington state? – No, Sound Transit and the Port of Seattle currently have DBE programs without waivers. • Does this affect all WSDOT projects? – No, WSDOT has state funded projects as well, which we are enhancing to increase participation. – Also, WSDOT has a Federal Transit Administration and Federal Aviation Administration DBE Program. FTA projects are typically Washington State Ferries projects and FAA is a reasonably small program. Be sure to read the General Special Provisions to determine if UDBE or DBE applies. – The waiver only applies to the WSDOT Federal Highway Administration DBE Program. Local agencies (e.g. cities, counties) that receive FHWA funds through WSDOT will be utilizing the waiver. 14
Questions & Answ ers For more information, please contact: Office of Equal Opportunity 360-705-7090 DisparityStudy@wsdot.wa.gov. 15
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