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relevant since it goes to the question of whether observed sta- While an entity must give good-faith consideration to race-
tistical disparities are due to discrimination and not to some neutral alternatives, every possible such alternative need not
other nondiscriminatory cause or causes. Testimony about be exhausted.
discrimination by prime contractors, unions, bonding com-
panies, suppliers, and lenders has been found relevant regard- Annual and Contract Goal Setting. DBE goals must be
ing barriers both to minority subcontractors' business forma- substantially related to the availability of such firms in the rel-
tion and to their success on governmental projects. While evant market. To freeze the goals at current head counts would
anecdotal evidence is insufficient standing alone, such proof set the results of discrimination--depressed DBE availability--
"may bring cold numbers convincingly to life." There is no as the marker of the elimination of discrimination. It therefore
requirement that anecdotal testimony be verified. should be reasonable for the government to seek to attempt to
level the racial playing field by setting targets somewhat higher
than the current head count. Thus, 49 C.F.R. § 26.51 requires
Additional Elements of Narrowly grant recipients to determine the availability of DBEs in their
Tailored DBE Goal Setting marketplaces, absent the presence of discrimination.
In addition to the overall, aspirational goals for their an-
Definition of State DOT's Marketplace. Part 26 directs
nual, aggregate spending, state DOTs must set subcontract-
grantees to set goals based on the "relative availability of
ing goals for specific projects based upon the availability of
DBEs in your market."23 State DOTs must therefore apply
DBEs to perform the anticipated scopes of subcontracting,
economic principles to empirically establish the geographic
not reiterate annual aggregate targets.26 Not only is contract-
and industry dimensions of their contracting marketplace to
specific goal setting probably necessary to ensure constitu-
ensure that the evidence is narrowly tailored. The studies re-
tionally required flexibility, but also setting goals that reflect
lied upon by IDOT, Mn/DOT, and NDOR defined the rele-
the reality of the scopes of work of the job instead of overall
vant geographic market as those locations and industries that
agency spending targets reduces the need to conduct good-
collectively accounted for at least 75% of the contract dollars faith effort reviews because bidders are more likely to achieve
awarded. realistic targets. Contract goals also reduce the temptation to
create "front" companies and sham participation to meet
Race- and Gender-Neutral Remedies. Race- and gender-
goals not reflective of the project.
neutral approaches are a necessary component of a defensi-
ble and effective DBE Program. The Constitution and the
regulations require that they be used to the maximum feasi- Implications and Effects
ble extent and applied in good faith. Such measures include of Western States
unbundling of contracts into smaller units, providing techni-
The implications and effects of Western States have been
cal support, and addressing issues of financing, bonding, and
profound. All grantees in the Ninth Circuit have been directed
insurance important to all small and emerging businesses.24
to suspend the use of subcontracting goals until the opinion's
Difficulty in accessing procurement opportunities, restrictive
evidentiary standards are satisfied. How to meet those stan-
bid specifications, excessive experience requirements, and
dards led in large part to TRB's commissioning of this report.
overly burdensome insurance and/or bonding requirements,
for example, might be addressed by recipients without resort
to using race or gender in their decision making. Further, U.S.DOT Guidance for Ninth Circuit Recipients
governments have a duty to ferret out and eliminate discrim-
In response to Western States, the U.S.DOT General Coun-
ination against minorities and women by their contractors,
sel, in 2005, provided guidance that all Ninth Circuit grantees
staff, lenders, bonding companies, or others. that lacked sufficient evidence of discrimination or its effects
Collecting data is another necessary race-neutral measure. were to submit all race-neutral overall goals for FFY 2006 and
Agencies should track the utilization of M/W/DBEs as a mea- an action plan, with timetables, to conduct a study.
sure of their success in the bidding process, including as sub- In particular, the guidance provides the following:
contractors. Part 26 goes further in mandating the creation
and maintenance of a bidders list.25 · The study should ascertain the evidence for discrimination
However, strict scrutiny does not require that every race- and its effects separately for each of the groups presumed by
neutral approach must be implemented and then proven in- Part 26 to be disadvantaged.
effective before race-conscious remedies may be utilized. · The study should include an assessment of any anecdotal and
complaint evidence of discrimination.
23 49 CFR §26.45(b).
24 49 C.F.R. § 26.51(b).
25 26
49 C.F.R. § 26.11(c). 49 C.F.R. § 26.51.
