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15 CHAPTER THREE STATE STRATEGIES FOR IMPLEMENTING RACE-NEUTRAL MEASURES This chapter synthesizes states' responses to the open-ended cies and advice for states transitioning to the use of 100% race- survey questions about their experiences with implementing neutral measures. race-neutral strategies. As described in chapter one, survey respondents were asked to rate the effectiveness of 22 race- neutral strategies on a 1 to 5 scale, and they were given the SUPPORTIVE SERVICES AND TRAINING MEASURES opportunity to provide more detail about how they imple- mented these strategies and to describe other strategies in addi- Survey respondents rated their familiarity and experience with tion to the 22 listed in the survey. Respondents provided detail five components of supportive services and training programs: about their implementation of 17 of the 22 listed strategies, and business development assistance, bidding assistance, tech- these open-ended responses are summarized in this chapter. nology assistance, one-on-one business reviews, and training Details of respondents' numerical ratings of the 17 strategies' classes. Respondents were very familiar with most of these effectiveness, as well as what percentage of states had used program elements. each strategy, accompany these summaries to provide addi- tional perspective. Respondents identified their supportive services programs as key components of their efforts to meet their goals for DBE Respondents' ratings of the effectiveness of the other five participation, and a respondent from one state that uses 100% strategies are shown in Figure 2 (see chapter two), and detailed race-neutral measures noted the importance of supportive ser- ratings of all 22 strategies are available in Appendix B. The vices in advice to other states that are facing the transition to full text of all open-ended survey responses is also available in 100% race-neutral measures. Appendix B, and program materials that states provided as part of their responses are listed in Appendix C. On the following pages, supportive services measures are listed in order from most to least effective (as rated by survey The 22 strategies in the survey were grouped into four cat- respondents). (See Appendix B for full details on respondents' egories: supportive services and training, administrative sup- ratings of each measure.) port, marketing and outreach, and financial assistance. In this chapter, the additional strategies mentioned by survey respon- dents in their open-ended comments are listed under these four Strategy #1: Providing firms with one-on-one business reviews categories as well. and/or technical assistance As noted earlier, states differ in their interpretation of what A total of 91% of responding states had used this strategy, and constitutes a race-neutral measure. (For example, some states this was the supportive services measure that respondents gave may provide advantages to prime contractors that frequently the highest marks. Of the states that had used it, 91% rated it and proactively use DBE subcontractors, whereas other states effective, with 60% rating it a 4 or 5 (very or extremely effec- do not view this practice as race-neutral.) Readers are advised tive). In addition, of all the measures listed in the survey, this to consult their agencies' legal counsel as appropriate before measure was rated a 5 (extremely effective) by more respon- implementing a new strategy. dents than any other strategy. The descriptions of many strategies in this report refer to This measure may include efforts such as developing indi- DBE firms and prime contractors as two discrete categories, vidualized technical assistance tailored to specific companies which reflect that these strategies focus on assisting DBEs in based on information gathered in one-on-one reviews and bidding as subcontractors to non-DBE prime contractors. working one-on-one with specific DBEs over time. Survey However, it is recognized that DBE firms can serve as prime respondents described the advantages of working one-on-one contractors as well and, wherever possible, this is acknow- with firms, including using one-on-one reviews to approach ledged in the language of this report. topics that DBEs may feel uncomfortable discussing in a group. This chapter also includes respondents' open-ended com- One respondent described an ineffective implementa- ments on related topics, such as partnerships with other agen- tion involving hiring a consultant to provide one-on-one

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16 assistance to DBE firms; this respondent believed that not Strategy #4: Providing training classes enough firms were helped, or helped sufficiently, to justify and technical education the expense. Ninety-eight percent of states had used this strategy; of those In some states, this type of one-on-one support is provided states, 83% said it was effective, with 39% rating it a 4 or 5 (very or extremely effective). Respondents described several as part of a small business development program, and one examples of effective implementations, including: respondent reported that both large and small DBE firms have emphasized the program's value in helping them grow their Tailoring training to meet the needs of different DBE businesses. In this state, one-on-one training and business subgroups; assistance is seen as key to the program's success. See Case Involving members of the industry in training programs Study #3 in chapter five for details on Colorado DOT's imple- as coaches or instructors; and mentation of this strategy. Team-oriented training that brings participants together from around the state. The respondent noted that having Strategy #2: Providing firms with bidding the training class stay in a hotel fosters camaraderie that assistance, such as holding mock workshops on lasts beyond the training and may lead to joint efforts on the bidding process or providing assistance with contracts. This state takes advantage of the hotel setting plan reading, bidding and estimating, job costing, in assigning evening homework; teams work on projects and writing/designing statements of qualifications and presentations to be given the next day. Team exer- cises include submitting a DOT bid. Eighty-one percent of states had used this strategy; of those states, 87% said it was effective, with 50% rating it a 4 or 5 Two survey respondents reported that reimbursing (very or extremely effective). One respondent described a par- DBEs for participation in training classes in their line of ticularly successful implementation of this strategy--a hands- work was less effective--they reported that few or no firms on, interactive training course taught by a vendor, with a focus took advantage of this benefit. One respondent also cau- on technology. Course content included determining overhead tioned against providing one-size-fits-all DBE training, and markup, searching electronically for bidding opportuni- noting that DBEs come in a wide range of sizes, ethnicities, ties, and bidding electronically, and all participants received and levels of expertise. "Some are challenged technologi- a free electronic bidding license for one year. This state saw cally and others in business management or safety and risk a marked increase in DBEs bidding and receiving work fol- management or working capital," this respondent noted. lowing the training, and the respondent recommended this "State DOTs should offer different types of training and interactive approach to training rather than more academic, assistance to various DBE subgroups, developed to meet lecture-style accounting courses. each group's particular needs." Another respondent recommended that states that are tran- Another respondent pointed to the lack of privacy in sitioning to using 100% race-neutral measures educate DBEs group training as a challenge; feedback from that state's DBE on how to use state bidding information to solicit subcontract firms has indicated that some DBEs view their problems as work with prime contractors that have submitted proposals confidential and do not wish to discuss them in a group set- for projects. ting. This respondent also noted the difficulty in serving DBE firms that need varying levels of assistance through a Strategy #3: Assisting firms in using technology, group training class. such as electronic bidding, website development, and conducting business over the Internet Strategy #5: Providing firms with business Ninety-one percent of states had used this strategy; of those development assistance, such as marketing states, 84% said it was effective, with 49% rating it a 4 or 5 and training assistance or help with business management, business plans, (very or extremely effective). In addition to the successful or financial statements hands-on, interactive classroom training mentioned in Strat- egy #2, one respondent described success with conducting on- Ninety-four percent of states had used this strategy; of those site training visits. This state works with a "DBE temp," who states, 77% found it to be effective, with 48% rating it a 4 or has 40 years of experience with the department's construction 5 (very or extremely effective). Working one-on-one with program, to conduct the training. The trainer discusses various specific DBE firms over a period of time was mentioned as a topics, including the certification process, orientation upon successful strategy, as was providing scholarships to business certification, how to develop a quote, how to connect with management classes. One respondent mentioned conducting large subcontractors or prime contractors, and how to submit executive management training as a way to increase DBEs' quotes electronically. entrepreneurial skills, noting that this type of training indi-