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54 CHAPTER 4 Study Resource Issues It's unwise to pay too much, but it's also unwise to pay too lit- Sources of Funds tle. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, be- Most state DOTs used state funds to pay for their studies, cause the thing you bought was incapable of doing the thing it regardless of type. At least one state DOT expressed concern was bought to do. The common law of business balance pro- that the FHWA would want to direct the study process if the hibits paying a little and getting a lot----it can't be done. If state DOT used federal funds. One state DOT we interviewed you deal with the lowest bidder, it is well to add something for had successfully used FHWA funds, Airport Improvement the risk you run. And if you do that, you will have enough to Program grant funds (the airport was included in the study), pay for something better. and contributions from the other local partners. --John Ruskin (18191900) English author, artist, scientist, poet, philosopher Management of the Study Process The cost of conducting an availability or disparity study is a Most state DOTs stated that it was critical to include senior significant concern for state DOTs. Limited resources and management in the study process as early as possible, includ- competing priorities mean that costs must be justified and ing ensuring that they understood the study's legal and statis- managed to deliver the best value. A study's true value, how- tical challenges. This helped to ensure that the process was ever, comes in its ability to withstand strict scrutiny in court. adequately funded and realistic timelines were developed. While studies were expensive, as a percentage of total state A few agencies have hired outside consultants to assist with DOT contract awards over 5 or 6 years, the cost of a disparity drafting the RFP or managing the study process. One state or availability study is still very small.178 In many ways, a dis- DOT paid $20,000 to a supportive services consultant to assist parity study is like an insurance policy for the DBE Program: with the drafting process and to respond to the DBE commu- the cost is a small fraction of the value of what is being insured. nity's desire to participate in the study. That consultant sur- We interviewed several state DOTs to obtain information veyed stakeholders about their preferences for what to include about the price of their studies, the internal resources neces- in the study and incorporated those concerns into the RFP. sary to manage the process, and advice for other agencies A multi-agency statewide study that included the state DOT considering studies. The following issues emerged that state hired an outside study manager for approximately $100,000 DOTs may want to consider when they evaluate the costs of over 18 months. All agencies strongly stressed that a (close to) procuring studies and conducting studies. As with the other full-time study manager was necessary to ensure smooth and challenges of conducting studies, the costs must be weighed timely completion. If an outside study manager is used, it is against the litigation risk that accompanies a less comprehen- important that he/she be vested with the bureaucratic author- sive study, or no study at all, and the benefits of a constitu- ity to obtain responsiveness from other state DOT personnel tionally sound DBE Program. and prime contractors. An outside manager who is unfamiliar with key actors may encounter significant difficulties securing 178 The average Federal-aid highway fund apportionment to state DOTs in FFY their assistance with the study. 2007 was about $600 million--or about $3 billion per state DOT over a 5-year One DBE director suggested that the state DOT also con- period. See Table 1. If a disparity study for the average state DOT will cost $1.5 million, which was actually the price for only the largest states, this would sider hiring a consultant to assist it to communicate with the be 0.05% of the federal funds disbursed during the study's projected coverage. department's outside constituencies about the study. While