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24 DISADVANTAGED BUSINESS ENTERPRISES' Respondents were asked directly about their efforts to LACK OF EXPERIENCE OR EQUIPMENT address this challenge. All but one state responded, and of those states 54% had made specific efforts and 46% had not. States' Challenge #4: DBE firms' lack of experience/skill at managing a business strategies for addressing this problem included: Many respondents believed this issue was a challenge, with ˇ Unbundling large highway construction contracts to 73% of respondents identifying it as a problem and 42% view- encourage smaller firms to bid as prime contractors. ing it as a significant or severe problem. One respondent noted ˇ Working with organizations that target small businesses; that less sophisticated DBEs may assume that getting certified outreach to these firms through workshops and exposi- is all that is required to get DOT work. tions to educate them about transportation opportunities. ˇ Conducting one-on-one assessments of selected DBE Providing firms with business development assistance is firms and tailoring technical assistance to their needs. one method states have used to mitigate this challenge. Ninety- ˇ Focusing supportive services on areas with no certified four percent of states had used this strategy, and of those states DBEs. 77% found it to be effective, with 48% rating it a 4 or 5 (very or extremely effective). Some states also use the related strat- Challenge #7: DBE firms' lack egy of establishing business development programs. States of equipment necessary to meet were not asked to rate this strategy's effectiveness, but many contract/subcontract requirements respondents wrote positive comments on these programs. About half of respondents (48%) believed this issue was a In addition, the mentor firms participating in mentor/protégé challenge, but only 18% viewed it as a significant or severe programs provide business development assistance to develop- problem. To help DBE firms expand the types of equipment ing firms. Forty-three percent of the states had used this strat- they own, RIDOT has had success with providing low-interest egy and of those 60% found it to be effective, with 30% rating loans to DBE firms for the purchase of trucks and other heavy it a 4 or 5 (very or extremely effective). equipment needed to participate in DOT contracts. See Case Example #2 in chapter five for more details. Challenge #5: Uncertainty among DBEs in how to expand their businesses ISSUES WITH PRIME CONTRACTORS Many respondents believed this issue was a challenge, with Challenge #8: Prime contractors not willing to work with new DBE firms (for example, 72% of respondents identifying it as a problem and 30% view- because prime contractors have existing ing it as a significant or severe problem. One respondent relationships with certain DBE firms or because reported that DBE program staff work closely with DBE firms of uncertainty about new firms' skills) to help them expand their capacity and their areas of expertise and to become prequalified to bid as prime contractors. It was Seventy-seven percent of respondents believed this issue was noted that bonding is a significant barrier for DBE firms, but a challenge, and 55% viewed it as a significant or severe prob- that this state's business development program has been help- lem. Although respondents did not address this specific issue ful, and that working one-on-one with DBEs over time has in their open-ended comments, this challenge relates to rela- produced positive outcomes. tionship building in general. The strategies that relate to estab- lishing new relationships between prime contractors and DBEs may have some application toward this issue, including Challenge #6: Lack of DBEs certified or hosting networking events and meet-and-greets, and holding experienced in certain work areas (such pre-bid or pre-letting meetings. as Intelligent Transportation Systems or the full spectrum of construction work) Challenge #9: Lack of commitment, cooperation, Many respondents believed this issue was a challenge, with or follow-through on the part of prime contractors 68% of respondents identifying it as a problem and 34% view- in using DBE subcontractors ing it as a significant or severe problem. States' experiences with this problem included: Forty-seven percent of respondents believed this issue was a challenge, but only 21% viewed it as a significant or severe ˇ Overconcentration of DBEs in areas such as trucking, problem. Examples of states' efforts to address this issue where prime contractors hire truck brokers who in turn included: charge DBE truckers unreasonable hourly broker fees. ˇ Difficulty moving firms into new areas such as landscap- ˇ Issuing an anonymous survey about which prime con- ing, guardrails, pavement marking, and lighting because tractors provide a meaningful work and training experi- of the cost of entering these work areas. ence for the DBE firm and which contractors meet the