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57 subcontracting data to the consultant in a timely manner. ology that reflects a thorough understanding of the case law Delay on the part of one agency can easily slow the study for and presents sound economic analyses that will meet strict all. Large differences between agencies in the state of their scrutiny and the regulatory requirements. subcontract records can have a similar impact. Potential part- For availability studies, the following major elements should ners are advised to investigate these differences before agreeing be included: to collaborate on a study. Another tip when conducting multi-agency studies is to An empirical assessment of the appropriate geographic appoint a single person to manage the study on behalf of all market relevant to an agency's contracting activity; participating agencies, as opposed to having a separate study An empirical assessment of the appropriate product mar- manager at each agency. A single project manager can more kets relevant to an agency's contracting activity; easily streamline communications with the consultant and An estimate of the fraction of businesses within the agency's with personnel at each agency. geographic and product markets that are owned by DBEs Only one state DOT has directly collaborated with other (i.e., "availability"); government entities to conduct its study, which included the To the extent necessary to implement Step 2, econometric state's largest city and the state's railroad authority. Other de- analyses of DBEs' success relative to non-DBEs' (e.g., in partments reported that it was not feasible for political or ad- business formation rates and in business owner earnings), ministrative reasons to collaborate with other governments. and holding nondiscriminatory factors constant, in the For example, one Ninth Circuit state DOT with an existing market area surrounding the agency in question (i.e., "pri- availability study conducted extensive outreach to the state's vate sector disparity ratios"); largest city, county, and airport and transit agencies to help To the extent necessary to implement Step 2, econometric pay for additional elements of disparity analyses, but was analysis of DBEs' access to capital and credit relative to unable to reach an agreement.189 non-DBEs', holding balance sheet and creditworthiness in- formation constant; and Qualitative and/or quantitative analysis of the effectiveness Multi-Agency State Studies of race-neutral measures to address low DBE participation Some state DOTs have participated in statewide studies in public contracting. that included all or most other state agencies. This has the ad- vantage of sharing costs among numerous state departments. For disparity studies, the following major elements should However, it is critical in such statewide studies to ensure that be included: the special requirements of Part 26 are met, such as the need to determine the agency's spending with DBEs through race- A legal review discussing Croson, Adarand, and subsequent neutral measures and the need to consider federally assisted case law and their impact; spending separately. A separate report for the state DOT is An empirical assessment of the appropriate geographic also recommended. market relevant to an agency's contracting activity; As with partnering for multi-jurisdictional studies, the An empirical assessment of the appropriate product mar- state DOT must consider the likely increase in the time to kets relevant to an agency's contracting activity; conduct a multi-agency study and the diffusion of focus An estimate of the fraction of businesses within the agency's against the savings to the department. Several statewide geographic and product markets that are owned by DBEs studies that we reviewed for possible inclusion in this report (i.e., "availability"); were rejected because the statistical analyses of the state An estimate of the percentage of all prime contract and DOT did not include or did not identify its federally assisted subcontract dollars earned by DBEs (i.e., "public sector contracts. utilization"); A statistical comparison of public sector utilization to availability (i.e., "public sector disparity ratios"); Model Study Scope of Work Econometric analyses of DBEs' success, relative to non- We recommend that RFPs require the proposers to fully DBEs' (e.g., in business formation rates and in business explain their approach to all components described in this re- owner earnings), and holding nondiscriminatory factors port. Proposals should provide a complete, detailed method- constant, in the market area surrounding the agency in question (i.e., "private sector disparity ratios"); Econometric analysis of DBEs' access to capital and credit 189 Neither the airport nor the transit agency has conducted studies to date. They relative to non-DBEs', holding balance sheet and credit- continue to implement all race-neutral DBE Programs. worthiness information constant;