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55 the study consultant can provide information to outside par- and gender-neutral policies will significantly reduce study ties, it is important that the perception of the firm's objectiv- costs. One state DOT outside the Ninth Circuit has success- ity not be compromised by "reporting" to groups or persons fully relied solely upon an availability study.180 with vested interests in the study's outcome. This state DOT For these reasons, we found that availability studies generally reported that an excellent communications strategy would cost under $400,000, and potentially less if complete subcon- have helped to increase inclusion in the study's anecdotal tract data are available. According to our interviews, costs for data-gathering efforts and stakeholders' familiarity with the disparity studies ranged from a low of approximately $405,000 legal and administrative challenges of the process. No cost es- for a smaller DOT to $1,500,000 for a large state DOT. timate was available, as this approach was not in fact pursued by the department. However, one state DOT reported that it Collection of Subcontracting Data used internal personnel to conduct extensive community outreach and Web site maintenance. A second significant cost element of studies is the collec- If no outside assistance is procured, the state DOT must tion of data on first-tier subcontracts. This cost element plays "budget" internally for a study manager and communica- a role in both disparity and availability studies since it is a pre- tions strategy. It would be prudent to allocate the time, if not requisite for developing a defensible estimate of DBE avail- the salary, of a full-time experienced employee to oversee the ability.181 study process. One of the first tasks for a state DOT considering a study is to evaluate the state of its existing subcontract records. Often, records on non-DBE subcontracts are less complete than In-House Studies versus those on DBE subcontracts, and even absent in their entirety. Outside Consultants A good disparity or availability study will reconstruct the miss- Despite the potential for reducing study costs, conducting ing data for at least a sample of relevant contracts, and this re- disparity or availability studies using primarily state personnel construction is one of the most significant single elements in is not recommended because of the possible appearance of bias a study. A study that includes good subcontract records is less in favor of the agency's decisions. No state DOT conducted a vulnerable if challenged than one that does not.182 study using its own personnel. While there were some public If such subcontract data are complete, then a study cost re- entities that produced studies in-house in the early days after duction of 15%20% may be achieved.183 If such data are miss- Croson, governments quickly learned that outside consultants ing or incomplete, before commissioning a study the state were needed to provide the type of independent statistical and DOT itself can reconstruct the missing data.184 If done cor- economic expertise that courts would require. While it would rectly, similar cost savings can then be achieved when the state obviously be less costly in the short run to conduct the study DOT commissions a study. However, all DBE directors we in- using state staff already on payroll, the risk of such a report terviewed specifically mentioned problems with data collection being rejected by the courts as biased is equally obvious. related to subcontracts. One state DOT attempted to save State personnel have, however, been used to calculate money by gathering the missing data itself, but reported that DBE goals using the nonstudy methods listed in 49 C.F.R the effort did not work out well and strongly urged others to 26.45 (c).179 have the consultant conduct all data gathering. Availability Studies versus Disparity Studies 180 Sherbrooke Turf, Inc. v. Minnesota Department of Transportation, 345 F.3d. 964 (8th Cir. 2003), cert. denied, 541 U.S. 1041 (2004). One critical factor in determining the cost of studies is 181 Information on how the state DOT's contract and subcontract dollars are dis- which analytical elements are included. Availability studies, tributed across different industries and geographic locations is used to provide because they typically lack the compelling interest compo- weighted availability statistics, which, in turn, are important to support asser- tions that an agency's statistics are narrowly tailored. See supra at Chapter Three, nents, cost less. Forgoing disparity testing on the state DOT's Determination of Relevant Product Market. own contracts and subcontracts, eliminating the gathering of 182 E.g., Contractors Association of Eastern Pennsylvania, Inc. v. City of Philadel- statistical evidence of economy-wide discrimination, not phia, 91 F.3d 586, 601 (3rd Cir. 1996) (the subcontracting analysis was insuffi- cient because the review of records by a city employee was "cursory" and the gathering anecdotal or other qualitative evidence of discrim- study did not include subcontracting. There was not a "firm basis for inferring ination, and not including a review of the state DOT's race- discrimination by contractors in the subcontracting market during the period," and therefore insufficient evidence for a subcontracting goal). 183 Detailed cost data for different consultants could not be obtained. This esti- mate is based on our own experience in conducting studies. 179 E.g., dividing the number of firms in a state DOT's DBE Directory by the 184The particular issues involved in reconstructing missing or incomplete sub- County Business Patterns data or the use of bidder's list information. contract records are discussed in detail in Appendix A.