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20 Mandatory pre-bid meetings linked to mandatory net- FINANCIAL ASSISTANCE STRATEGIES working sessions. Pre-letting meetings in which DOT staff review the In this section, financial assistance strategies are listed in order contracts that will be let, and prime contractors and from most to least effective (as rated by survey respondents). DBE firms identify which projects they are interested in (See Appendix B for full details on respondents' ratings of bidding or subcontracting on. each strategy.) Maintaining Successful Partnerships Strategy #16: Participating in loan mobilization programs (assisting banks in providing loans to DBEs) States identified several ways in which DOTs can help prime contractors and DBE firms maintain strong partner- Just 28% of the states had used this strategy; however, of those ships once a working relationship is established, such as that had, 62% found it to be very or extremely effective (rating proactive project monitoring by DOT staff and early inter- it a 4 or 5). This strategy tended to divide respondents--it vention when issues arise. This prevents relationships from received no ratings of 3 (effective), and it appears in both the deteriorating over disagreements and allows problems to be list of strategies that received the highest percentage of rat- addressed before they adversely affect the project. Exam- ings of 4 and 5 (see Figure 3 in chapter two) and the list of ples of ways in which states have facilitated strong partner- those that received the highest percentage of ratings of 1 and 2. ships include: Case Example #2 describes how the Rhode Island DOT Co-locating DBE subcontractors and prime contractors (RIDOT) effectively administers its DBE loan program. on large construction projects to give DBEs access to RIDOT obtained an FHWA waiver allowing the agency to information about schedule and scope changes. provide loans only to underutilized DBEs. See Case Exam- Partnering meetings in which partnership agreements are ple #2 in chapter five for details. formed between the DOT and the prime contractor and subcontractors. In these agreements, the partners come together to agree on common objectives at the initiation Strategy #17: Assisting DBEs with bonding of a project. and financing Sixty percent of the states had used this strategy. Of those, Strategy #15: Publishing newsletters reaching 57% of the states found it to be effective, with 25% rating it out to DBEs (e.g., publicizing contracting or a 4 or 5 (very or extremely effective). In addition, this strat- subcontracting opportunities, small business egy was ranked highly by 100% race-neutral states, with programs, benefits, and training; outlining laws 60% of those rating it very or extremely effective. Two respon- and regulations affecting small businesses) dents mentioned that they are exploring this strategy. Eighty-five percent of states had used this strategy; of those, One state has a bond guarantee program in which the 62% found it to be effective, with 38% rating it a 4 or 5 (very department would guarantee 80% or 90% of a DBE or extremely effective). Examples of effective implementa- firm's bond, but has been unable to get a surety com- tions include: pany to participate in the program. Another DOT is evaluating the practice of reimbursing Developing a calendar of events to inform DBEs of DBE firms for bonding fees if they are required to carry upcoming training classes. their own bond for a project. This respondent noted that Including a "request for sub-bids" section in the monthly prime contractors in the state have traditionally carried DBE newsletter where contractors can advertise for subcontractors under their own bond, but that this prac- quotes. tice is beginning to diminish. Other Marketing and Outreach Strategies Additional Financial Strategies Outreach to Infrequent Bidders Elimination of Retainage Requirements One state contacts DBE firms that have submitted only one or Retainage is money held back from contractors or subcontrac- two bids during the previous year to encourage them to partic- tors until the work is completed; it is meant to ensure that the ipate more. DBE program staff work with these firms to iden- job is completed satisfactorily. One respondent described a tify the reasons they did not bid more often and to provide strategy involving elimination of up-front retainage on prime solutions to help them become more active. contractors and subcontractors, which allows firms to spend