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26 CHAPTER FIVE CASE EXAMPLES This chapter provides case examples of three race-neutral set a maximum amount not to exceed $120 million in con- measures currently being used by state DOTs. These strategies struction contracts annually. That program is authorized by were selected because they were ranked highly by survey the state legislature, and that statutory authority is key. respondents. Case Examples #1 and #2 are strategies that have been used by fewer states but rated highly effective by those that do use them, whereas Case Example #3 describes What Works, What Does Not how one state has been successful in implementing a more Staff at FDOT's district offices decides which contracts to common measure that was also rated highly effective. reserve as part of the Business Development Initiative. They make sure there are DBEs available to bid on the projects, and This section is based on survey responses and detail pro- they have not yet had a project in the program that received vided in follow-up interviews. During these interviews, the no bids. DOT staff emphasized what made these strategies successful and provided suggestions to other state DOTs that are inter- ested in implementing these measures in their own agencies. A key challenge in administering the program is in finding This chapter includes: opportunities to unbundle larger contracts into smaller pieces. In addition, staff must weigh the benefits of breaking con- Case Example #1: Florida Department of Transportation: tracts apart against the benefits of bundling smaller contracts Reserving Small Contracts for Small Businesses together, which allows engineering and procurement staff to Case Example #2: Rhode Island Department of Transporta- optimize the use of their own limited resources on one larger tion: Loan Program for Underutilized Disadvantaged contract instead of several smaller ones. Business Enterprise Firms Case Example #3: Colorado Department of Transportation: Another challenge is finding contracts in highway con- One-on-one Assessments and Customized Training struction that are appropriate for the program; in general, road- building contracts exceed the program's $500,000 cap. Instead, projects in the Business Development Initiative tend CASE EXAMPLE #1: FLORIDA DEPARTMENT to be along the lines of drainage improvements, sidewalk pro- OF TRANSPORTATION: RESERVING SMALL jects, and landscaping. The department hopes that some DBE CONTRACTS FOR SMALL BUSINESSES firms will expand their businesses into these areas to take advantage of the reserved contracts. FDOT has had success with a program that can be challenging for states to obtain authority to implement: a Business Devel- FDOT encountered some procedural challenges in estab- opment Initiative that reserves some small contracts (under lishing its Business Development Initiative. Because Florida $500,000 each) solely for small businesses. was at the forefront nationally of exploring this type of initia- tive, it took years to get approval from the FHWA to use the The program began in 2006, when Florida along with other procedure on federally funded contracts. Also, the department states had been experiencing a decline in bidding on its con- had to move away from including preference points for profes- tracts, and contract costs that were steadily rising. FDOT was sional services consulting contracts in the program. Profes- looking for ways to increase competition among construction sional services contracts are now reserved for small businesses firms and to foster the growth of smaller businesses, and this on state-funded contracts, but are limited by the FHWA to program was one solution: Give smaller firms working in the $100,000 on federally funded contracts. private sector the opportunity to learn the ropes of working on government projects and increase their ability to bid on FDOT projects in the future. Effectiveness The department implemented the Business Development The Business Development Initiative is designed to benefit all Initiative through statutory authority that already existed for small businesses and it has been successful in doing that while innovative contracting. The innovative contracting authority, helping FDOT achieve its DBE participation goal. The firms which is also used for various other project innovations, has winning contracts under the program have been a good mix of