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11 TABLE 1 about the frequency of ineligible DBEs were not requested in NUMBER OF DBEs CERTIFIED AS OF 2002 the questionnaire. No. of Certified RWA for STA State DBEs Construction GOALS Alabama 416 89 Alaska 190 130 Arizona 300 NA Before the current regulation, STA overall goals were gen- Arkansas 125 110 erally considered to be 10% across the board, regardless of California 2,739 1,949 their local situation or market conditions. "The national 10% Colorado 418 35 Connecticut 312 260 goal does not authorize or require recipients to set overall or Georgia 750 225 contract goals at the 10% level, or any other particular level, Hawaii 350 30 or to take any special administrative steps if their goals are Idaho 170 120 Illinois 575 466 above or below 10%" (49 CFR 26.41, 2003). Recipients of Iowa 100 70 U.S.DOT funds must, however, set an overall goal. The fol- Kansas 245 95 lowing are provided as guidelines: Kentucky 337 94 Maine 220 190 Massachusetts 900 89 · An overall goal must be based on demonstrable evidence Michigan 319 NA of the availability of ready, willing, and able DBEs rela- Minnesota 300 274 tive to all businesses ready, willing, and able to partic- Missouri 250 80 Nevada 425 200 ipate on STA-assisted contracts. New Hampshire 170 69 · The goal must reflect a determination of the level of New Jersey 425 417 DBE participation absent the effects of discrimination. New Mexico 175 40 New York 475 46 · An STA cannot simply rely on the 10% national goal, North Carolina 600 NA any previous overall goal, or past DBE participation North Dakota 75 40 rates. They must benchmark relative to availability of Ohio 300 250 Oklahoma 150 65 DBEs in the market. Pennsylvania 475 171 South Dakota 75 30 Five STAs did not report actual achievement as the result Texas 1,198 NA Vermont 131 20 of unavailable data for 2002 when they completed the ques- Washington 673 NA tionnaire. Split goals, those split between race-neutral and West Virginia 129 103 race-conscious methods, were reported for 70% of the STAs. Wisconsin 292 81 Wyoming 65 14 The goal achievement for 2002 is shown in Table 2 and Fig- ure 3. A significant change in the regulation is the require- Notes: NA = not available; RWA = ready, willing, and able. ment that state recipients must meet the maximum feasible portion of their overall goal by using race-neutral means of DBE participation. By definition, race neutral includes gen- der neutral. Race-neutral DBE participation primarily is any DETERMINATION OF INELIGIBILITY time a DBE wins a prime contract through customary com- Determining that a firm is ineligible as a DBE is not a com- petitive procurement procedures or a DBE firm is selected as mon process; however, in some circumstances a DBE firm's a subcontractor on a project that does not have DBE partici- certification will be removed. The determination can occur pation goals. Race-conscious participation indicates that spe- for a wide variety of reasons that could include ineligibility cific goals are established on contracts. The flexibility of the as a result of exceeding company size standard, poor contract goal assignment is that individual contract goals may vary performance, or fraud. The timing of the ineligibility deci- depending on factors such as availability, location, and con- sion and contracting phase of contracts the firm is involved tract size or type. in are two key points to consider with respect to their impact on contract administration. When a DBE has been declared COUNTING SECOND TIER DISADVANTAGED ineligible, but was a certified DBE when the contract was BUSINESS ENTERPRISE SUBCONTRACTOR signed, the prime contractor can finish the project with the CONTRIBUTIONS ineligible firm and can count the work completed toward their contract goal. If the determination of ineligibility was made Second tier subcontractors are created by subcontractors by the STA before the contract was executed, the contractor awarding subcontracts to other contractors for a portion of may not use the ineligible firm as part of its contract goal their work. When counting DBE participation, the direct attainment. In most STAs, the contractor is expected to per- work contribution of a first tier DBE subcontractor is counted form a good faith effort in obtaining a replacement subcon- toward the project goal. However, when a DBE subcontracts tractor for the contract goal. Details and other information work to another DBE firm, that portion can also be counted