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29 CHAPTER 3 Model Disparity Study The disparity and availability studies reviewed for this separate geographic market determinations for each category, report differ not only in the elements included but also in their as well as for a combined category.105 design and implementation. In this section, we compare the studies reviewed according to the key elements: the definition Review of Studies. Most of the studies followed the rec- and use of geographic and product markets; the development ommended approach in most or all respects. When they did of availability estimates; the analyses of state DOT contracting not, the following were the chief concerns: disparities; the analyses of economy-wide disparities; and the Assuming, rather than empirically determining, the market collection of anecdotal evidence. For each key element, we present the recommended approach judged by actual success area; Not including subcontract data in the determination; or potential for success under strict scrutiny review. Using states rather than counties as the unit of analysis for the determination;106 Determination of Relevant Not providing details or tables showing how the determi- Geographic Market Area nation was made; and Not providing separate determinations for construction Recommended Approach. In high-quality disparity and and construction-related professional services. availability studies, the relevant geographic market area iden- tifies those vendor locations that account for at least 75% of Some studies went beyond the minimum recommended contract and subcontract102 dollar expenditures in the project approach and provided separate geographic market calcula- database for the study period.103 The report should describe tions by highway district as well as statewide. how the contract and subcontract data were used to make this determination and one or more tables should be presented showing the results. Determination of Relevant Location should be determined by linking the zip code of Product Market the contractor or subcontractor to the associated state and Recommended Approach. In high-quality disparity and county. For multi-establishment firms, location does not availability studies, the relevant product market identifies the have to be defined as the headquarters of the firm. If the firm detailed industries that account for at least 75% of contract has established a local presence, then it is appropriate to use and subcontract dollar expenditures in the project database that address for purposes of market determination. for the study period. The amounts accounted for by each Since the two major contracting categories typically exam- industry should be listed by dollars and as a percentage of ined in state DOT studies are construction and construction- overall contract and subcontract spending.107 related professional services,104 it is also advisable to make The report should describe how the contract and subcon- tract data were used to make this determination and one or 102 To the extent that studies have not reconstructed or otherwise accounted for more tables should be presented showing the results. incomplete subcontractor or subconsultant data, the determination of the rele- vant geographic market area will be incomplete. 103 105 A detailed description of the project database and the steps necessary to its See, e.g., Sherbrooke, 345 F.3d at 97374. 106 assembly appears in Step A--Create a Database of Representative, Recent, and This is less of a concern in very small states such as Delaware or Rhode Island. 107 Complete State DOT Projects, infra. The percentage distribution by industry is used elsewhere in the study to calcu- 104Sometimes also referred to as "architecture & engineering," "design," "pre- late overall DBE availability as a dollar-weighted average of detailed industry level construction," or just "consulting." DBE availability. See infra, Carrying Out Final Step 1 Availability Calculations.