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U.S. DOT’s Disadvantaged Business Enterprise (DBE) Program: The Basics. FTA Civil Rights Training CalAct Autumn Conference September 22, 2011. Why Are We Here?. Update on recent DBE rule changes Assist recipients achieve full compliance with 49 C.F.R. Part 26. Basic Terms. DBE

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u s dot s disadvantaged business enterprise dbe program the basics

U.S. DOT’s Disadvantaged Business Enterprise (DBE) Program: The Basics

FTA Civil Rights Training

CalAct Autumn Conference

September 22, 2011

why are we here
Why Are We Here?
  • Update on recent DBE rule changes
  • Assist recipients achieve full compliance with 49 C.F.R. Part 26
basic terms
Basic Terms
  • DBE
    • Small business (as defined by SBA) owned and controlled by a socially and economically disadvantaged individual
  • UCP
    • State-level entity responsible for certifying eligible firms as DBEs
basic terms cont d
Basic Terms (Cont’d)
  • Race conscious
    • A measure or program that is focused specifically on assisting only DBEs
      • Includes DBEs owned by women
      • Contract goals
  • Race Neutral
    • A measure or program that is, or can be, used to assist all small businesses
dbe program document
DBE Program Document

Who must have a DBE program?

FTA recipients receiving planning, capital, or operating assistance who will award prime contracts exceeding $250,000 in FTA funds in a Federal fiscal year

−49 C.F.R. Part 26.21(a)(2)

key elements of a dbe program document
Key Elements of a DBE Program Document
  • Policy Statement
  • Standard Contract Assurances
  • DBE Liaison Officer
  • Prompt Payment/RetainageProvision(s)
  • Good Faith Efforts Criteria
  • Monitoring Mechanisms
  • Small Business Provision
  • Goal Setting Methodology
policy statement
Policy Statement
  • General statement, signed by your organization’s CEO/highest officer, confirming commitment to the DBE program
  • Use the language from your financial assistance agreement!
    • Also appears in 49 C.F.R. Part 26.13(a)
contract assurance
Contract Assurance
  • Non-discrimination clause
  • Must be in every contract you sign with a prime contractor, and every contract your prime contractors sign with subcontractors
  • Use exact language from 49 C.F.R. Part 26.13(b)
dbe liaison officer dbelo
DBE Liaison Officer (DBELO)
  • Individual within your organization primarily responsible for properly implementing the DBE program
  • Must have:
    • Direct, independent access to CEO
    • Adequate staff and resources to administer the program in compliance with the DBE rule
prompt payment retainage
Prompt Payment/Retainage
  • Must have clause in prime contracts requiring the prime to pay subcontractors for satisfactorily completed work no later than 30 days from receipt of payment from the recipient
  • Must have a mechanism to monitor/ensure prompt payment occurs
good faith efforts criteria
Good Faith Efforts Criteria
  • Must have process/criteria in place for evaluating bids on solicitations with DBE contract goals
    • If don’t meet stated goal, did bidder make and document “good faith efforts” to meet the goal?
  • See Appendix A for guidance, additional information
monitoring mechanisms
Monitoring Mechanisms
  • In the past, the DBE rule required that recipients monitor contracts/projects with DBE participation, but without specifying what must be done
  • Now, must perform site visits and certify to FTA (or FHWA, FAA) that the DBEs are performing the workassigned to them
small business provision
Small Business Provision
  • New Rule!
  • Recipients must add an element to their DBE programs which fosters small business participation
  • Must submit plan to relevant operating administration by February 12, 2012
goal setting methodology
Goal Setting Methodology

What must I submit?

  • Letter to FTA stating your overall goal, including the race conscious/race neutral split
  • A copy of the published notice
  • A copy of the methodology and any worksheets used to calculate the goal
what is a dbe goal
What is a DBE goal?

Key Points

  • Should be based on demonstrable evidence of ready, able and willing DBE firms relative to all firms available to perform on your contracts
  • Your overall DBE goal should reflect what you’d expect DBE participation to be absent the effects of discrimination
step 1 base figure
Step 1: Base Figure

All Firms


DBEs ÷ All Firms = Relative Availability

step 1 considerations
Step 1 Considerations


  • Use all current, available data
  • Accurately account for all contracting opportunities
  • Use weighting whenever possible
step 1 considerations1
Step 1 Considerations


  • Use past participation as your base figure
  • Utilize local preference
  • Exclude some contracts/contracting opportunities because you don’t think there will be DBE participation
where do i find dbes
Where do I find DBEs?

State UCP Directory

Provides “one stop shopping” for recipients, prime contractors, DBEs, and the general public

step 1 example
Step 1 Example
  • NAICS 423120
    • 2 DBEs in La.
  • Using census data, state business directory, and prior bidders lists, you’ve identified 18 non-DBEs in La. under NAICS 423120
step 1 example1
Step 1 Example



2 DBEs


(2 DBEs + 18 non-DBEs)



Base Figure =

DBEs ÷ All Firms

Remember, All Firms = DBEs + non-DBEs

  • The process by which you consider DBE availability relative to your anticipated available contracting opportunities
  • May weight goals on either a project-by-project basis, or based on individual contracting opportunities derived from a single project


Weighted Base Figure =

(Projects % of total budget) x (Relative Availability)

weighting example
Weighting Example
  • In addition to your contract for vehicle parts, you are also letting a contract for electrical services
    • Parts = 75% of total budget
    • Electric = 25% of total budget
  • Searching the La. UCP directory, you find 26 firms under NAICS 238210 (Electrical Contractors)
  • Using census data, state business directory, and prior bidders lists, you’ve identified 374 non-DBEs in La. under NAICS 238210
weighting example1
Weighting Example

Contract # 1

Contract # 2

26 DBEs


(26 DBEs + 374 non-DBEs)



2 DBEs


(2 DBEs + 18 non-DBEs)



weighting example2
Weighting Example



.75 x (2 DBEs ÷ 20 All Firms)


.25 x (26 DBEs ÷ 400 All Firms)



(2 + 26 DBEs)


(28 DBEs + 392 non-DBEs)



step 2 adjust your base figure
Step 2: Adjust Your Base Figure

Evidence to Consider

  • Current capacity of DBEs to perform work
  • Disparity studies
  • Input from interested parties
    • Local chambers of commerce
    • NAACP
    • Minority business associations
    • Contracting associations
step 2 past participation
Step 2: Past Participation
  • May use past participation as Step 2 adjustment if contracting opportunities are the same/similar to those in prior years
  • If use, determine median past participation, then average with base figure determined in Step 1
past participation formula
Past Participation Formula

Adjusted DBE Goal =

(Step 1 Base Figure + Historic Median) ÷ 2

past participation example
Past Participation Example


  • Base Figure: 15%
  • Participation:
    • FFY2008: 7%
    • FFY2009: 22%
    • FFY2010: 11%


15% + 11% = 26%

26% ÷ 2 = 13%

Adjusted Goal: 13%

race conscious race neutral split
Race Conscious-Race Neutral Split

Using past DBE achievement, determine what amount of overall goal will be met via race neutral means

rc rn formula
RC/RN Formula

Race Neutral Projection


Adjusted Base Figure


(Past RN Achievement


Past Total Achievement)

rc rn split example
RC/RN Split Example
  • Using prior example, we know the adjusted goal is 13%
  • Using FFY2010 DBE reporting data, you also know the following:
    • FFY10 Goal: 10%
    • Achievement: 12%
    • Race Conscious: 5%
    • Race Neutral: 7%
rc rn split example1
RC/RN Split Example


Final Result



Race Neutral


Race Conscious




(7 ÷ 12)



accountability and goal submissions
Accountability and Goal Submissions
  • New Rule!
  • If a recipient fails to meet its overall DBE goal, it must analyze the shortfall, develop corrective actions and submit the plan to the relevant operating administration (FTA, FHWA, or FAA) for approval
monitoring and oversight
Monitoring and Oversight
  • Historically under-enforced area of the DBE program
  • Why important?
    • Root out fraud—no DBE “fronts”!
    • Ensure DBEs are getting the opportunity to perform work committed to them
new monitoring requirements
New Monitoring Requirements
  • New Rule!
  • Recipients must monitor and provide written certification for every contract/project on which DBEs are participating, ensuring the DBE(s) are in fact performing the work
monitoring removal of dbe firms
Monitoring: Removal of DBE Firms
  • New Rule!
  • Prime contractors may not terminate DBE subcontractors from projects without “good cause” and approval from the project sponsor/recipient
dbe reporting basics to know
DBE Reporting Basics to Know
  • Award(s) information corresponds to time of Prime Contract Award
  • Difference between Race Conscious & Race Neutral
  • Reporting time frames & due dates
  • Know your DBE firms!
prime contracts awarded this period
Prime Contracts Awarded this Period?
  • Notice black mark in Total line?
    • Subs are a part of prime!
      • Therefore Prime & Sub must be from the same period
rc v rn what fields to use
RC v RN: What fields to Use?

Race Conscious

Race Neutral

Did not set contract goals

Attributed to all the other wonderful things you do

Bottom line: Open Bid

  • Set contract goals…
    • When projecting goal miss
    • (4) “must provide for participation by all certified DBEs”
    • not “divided into group-specific”
due dates
Due Dates


ARRA DBE Reports

Four (4) Quarters

Oct. 1st to Dec. 1st

Jan. 1st to Mar. 31st

Apr. 1st to June 30th

July 1st to Sept. 30th

ARRA funds only!

Due 10 days after period ends…

Plus grace period

  • Two (2) Halves
    • October 1st to March 31st
    • April 1st to September 30th
  • All funds covered by your goal
  • Due June 1st and December 1strespectively
how do i get this done
How do I get this done?
  • Know your DBE firms
    • DBELO, How are you monitoring?
  • Know the Activity
    • How are you going to assist?
    • Where is most effective areas for participation?
  • Know you have access to the CEO.
things to have
Things to Have:
  • Bidders List [see § 26.11]
    • Firm name
    • Address
    • DBE status, etc…
  • Activity reports
    • What awards were made during the period?
    • What contracts were completed during the period?
more stuff
More stuff?
  • DBE Regulations!
    • ECFR @ GPO Access - Click Me!
    • Especially § 26.55
  • TEAM Account?
    • With Civil Rights option!
  • Use old forms to collect information
    • Practice
team reporting basics
TEAM Reporting Basics
  • Must have TEAM Account
  • Must have Civil Rights
    • Not there?
      • Must have applied.
team basics continued
TEAM Basics Continued…
  • All features found in DBE Reporting
    • New
      • First time creating a report
    • Existing
      • Reports you’ve begun
      • Reports “migrated” by FTA
how do you know it worked
How do you know it worked?
  • Returned to View Screen
  • Status Update at the Bottom!
working with existing reports
Working with Existing Reports
  • Previously submitted?
    • Must be unlocked!
    • Contact FTA
  • New/Draft?
  • Unlocked Report?
    • Use the tools
  • View
  • Edit
  • Return to search
  • Export to Excel
all fields required except grant number
All fields required except Grant Number!

Zero is a valid entry. No contracts awarded? Enter zero!

same form as always 49 cfr part 26 appendix b
Same form as always [49 CFR Part 26, Appendix B]

Don’t have an Excel version?http://www.fta.dot.gov/documents/Semi_Annual_Report_with_Functions.xls

what s different
What’s Different?
  • Performs Calculations
    • Total fields
    • Percentage fields
  • Auto-populates
    • Goal values
    • Recipient info
    • User info
  • Email updates!
saving submitting 2 step process
Saving & Submitting: 2 Step Process



All fields (except grant #)

Select status from dropdown

Ready for Regional Review

Press the Save button at the bottom

  • All fields (except grant #)
  • Select status from dropdown
    • New/Draft
  • Press the Save button at the bottom
counting dbe participation
Counting DBE Participation
  • Count the entire amount performed by the DBEs own forces
    • Fees or commissions (e.g. – lawyers, planners, consultants)
  • DBE Prime sub contracts work?
    • Only counts for DBE participation if DBE sub
    • On form, values split…[more later]
    • Non DBE sub? No DBE credit…
  • Supplier @ 60%, Manufacturer @ 100%
the big difference
The Big Difference

Sub = Portion of Prime

Only Count DBE work performed

ethnicity breakdown
Ethnicity Breakdown
  • This Reporting Period!
    • Means it matches values from above.
  • DBE Awards…
    • Means matches to DBE award values
  • # of Contracts not # of Firms
do i have to how
Do I have to? How?
  • Race Neutral not an excuse!
  • Contact your member UCP
  • No guessing!
  • UCP uses definitions in § 26.5 to categorize
payments on prime contracts completed this period
Payments on Prime Contracts Completed This Period
  • Contract may not complete during same period as awarded
    • Therefore, might not reconcile on same form
  • No Ethnicity breakdown
  • Yes, Sub contract amounts are included (see Total DBE participation)
  • Remember: Prime Contract Complete
rc rn again
RC & RN Again !?!?!
  • Line 12: If contract goal set
  • Line 13: No contract goals
participation needed to meet goal return of the black field
Participation Needed to Meet Goal: Return of the Black Field?
  • RN or Total?
    • No!
    • Because values may come from multiple periods, may be irreconcilable
  • RC yes!
    • Read form literally
finally success remember 2 steps
Finally! Success! Remember: 2 Steps



All fields (except grant #)

Select status from dropdown

Ready for Regional Review

Press the Save button at the bottom

  • All fields (except grant #)
  • Select status from dropdown
    • New/Draft
  • Press the Save button at the bottom
find help
Find Help!
  • On the web:
    • Federal Transit Administration’s DBE Page
      • www.fta.dot.gov/dbe
    • Office of Small & Disadvantaged Business Utilization
      • www.osdbu.dot.gov
    • TEAM Help Desk
  • Call your Regional Civil Rights Officer!
need more information assistance
Need more information/assistance?


Federal Transit Administration

Office of Civil Rights

1200 New Jersey Ave. SE

East Building, 5th Floor

Washington, D.C. 20590

Office: (202) 366-4018