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39 APPENDIX B Survey Responses To preserve anonymity among respondents, individual state names and agencies have been replaced with [state] or [DOT] through- out this appendix. Note: After the survey was closed and data analysis was complete, one agency requested a correction to its initial survey response, which erroneously indicated that the state used 100% race-neutral measures. All references to these data were corrected in the body of the report, but the state's original survey response is preserved below. SUPPORTIVE SERVICES AND TRAINING 2. Following are some common supportive services and training strategies used to encourage DBE participation in highway con- tracting and meet federal DBE participation goals. Please rate on a scale of 1 to 5 the effectiveness of each strategy that your agency has used or click the "Have not used" button. 1 2 4 5 Have 3 Item Not at all Somewhat Very Extremely not Total Effective used effective effective effective effective Providing firms with business development assistance, such as marketing and training 21.3% 27.7% 25.5% 19.1% 6.4% 47 assistance or help with business management, 10 13 12 9 3 business plans or financial statements. Providing firms with bidding assistance, such as holding mock workshops on the bidding process or providing assistance with plan 10.6% 29.8% 17.0% 23.4% 19.1% 47 reading, bidding and estimating, job costing, 5 14 8 11 9 and writing/designing statements of qualifications (SOQs). Assisting firms in using technology, such as 2.1% 12.8% 38.3% 23.4% 14.9% 8.5% electronic bidding, Web site development, and 47 1 6 18 11 7 4 conducting business over the Internet. Providing firms with one-on-one business 8.5% 27.7% 21.3% 34.0% 8.5% 47 reviews and/or technical assistance. 4 13 10 16 4 Providing training classes and technical 4.3% 12.8% 42.6% 14.9% 23.4% 2.1% 47 education. 2 6 20 7 11 1 ADMINISTRATIVE SUPPORT 3. Following are some common administrative support strategies used to encourage DBE participation in highway contracting and meet federal DBE participation goals. Please rate on a scale of 1 to 5 the effectiveness of each strategy that your agency has used or click the "Have not used" button. 1 2 4 5 Have 3 Item Not at all Somewhat Very Extremely not Total Effective used effective effective effective effective Unbundling contracts (breaking large contracts into multiple smaller contracts) to 6.4% 17.0% 12.8% 12.8% 6.4% 44.7% 47 allow and encourage DBEs to bid as prime 3 8 6 6 3 21 contractors or quote on subcontracts. Requiring pre-bid registration by prime contractors so that DBE subcontractors and 4.3% 14.9% 17.0% 21.3% 4.3% 38.3% 47 suppliers know to whom to submit their 2 7 8 10 2 18 quotes. Facilitating mentor/protg programs (in 2.1% 14.9% 12.8% 10.6% 2.1% 57.4% which established contractors assist smaller, 47 1 7 6 5 1 27 developing firms).

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40 1 2 4 5 Have 3 Item Not at all Somewhat Very Extremely not Total Effective used effective effective effective effective Arranging solicitations, quantities and specifications, presentation times, and/or 2.1% 12.8% 17.0% 14.9% 6.4% 46.8% 47 delivery schedules to facilitate DBE and 1 6 8 7 3 22 small business participation. Collecting data on DBE participation that exceeds contract goal requirements or that 2.2% 15.2% 39.1% 15.2% 17.4% 10.9% 46 is achieved on contracts with no DBE 1 7 18 7 8 5 participation goals. 2.1% 23.4% 27.7% 6.4% 6.4% 34.0% Streamlining the DBE certification process 47 1 11 13 3 3 16 Limiting certain small contracts to proposals 2.2% 6.5% 6.5% 8.7% 76.1% 46 by small firms only 1 3 3 4 35 MARKETING/OUTREACH 4. Following are some common marketing and outreach strategies used to encourage DBE participation in highway contracting and meet federal DBE participation goals. Please rate on a scale of 1 to 5 the effectiveness of each strategy that your agency has used or click the "Have not used" button. 1 2 4 5 Have 3 Item Not at all Somewhat Very Extremely not Total Effective used effective effective effective effective Branding, marketing, and publicizing the state's DBE programs; creating a DBE 14.9% 25.5% 36.2% 23.4% directory; and/or providing information 47 7 12 17 11 through outreach events, publications, Web sites and other vehicles. Publishing newsletters reaching out to DBEs (for example, publicizing contracting or subcontracting opportunities, small business 2.2% 30.4% 19.6% 23.9% 8.7% 15.2% 46 programs, benefits, and training; outlining 1 14 9 11 4 7 laws and regulations affecting small businesses). Facilitating meetings and networking between 2.1% 27.7% 21.3% 17.0% 27.7% 4.3% DBEs and prime contractors and technical 47 1 13 10 8 13 2 assistance partners. Notifying DBEs of new construction projects 2.1% 21.3% 36.2% 14.9% 14.9% 10.6% 47 by e-mail. 1 10 17 7 7 5 Providing bidders list to DBEs so they can 2.1% 14.9% 31.9% 10.6% 10.6% 29.8% 47 seek subcontracting opportunities. 1 7 15 5 5 14 Publicizing new DBE firms to prime 2.2% 17.4% 19.6% 4.3% 6.5% 50.0% 46 contractors via newsletter or e-mail. 1 8 9 2 3 23 Partnering with local jurisdictions (such as 4.3% 23.4% 17.0% 8.5% 14.9% 31.9% counties and cities) for outreach and training 47 2 11 8 4 7 15 efforts. Conducting outreach to firms identified during 2.1% 10.6% 23.4% 6.4% 4.3% 53.2% 47 an availability or disparity study. 1 5 11 3 2 25

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41 FINANCIAL ASSISTANCE 5. Following are some common financial assistance strategies used to encourage DBE participation in highway contracting and meet federal DBE participation goals. Please rate on a scale of 1 to 5 the effectiveness of each strategy that your agency has used or click the "Have not used" button. 1 2 4 5 3 Have Item Not at all Somewhat Very Extremely Total Effective not used effective effective effective effective Assisting DBEs with bonding and 2.1% 23.4% 19.1% 12.8% 2.1% 40.4% 47 financing. 1 11 9 6 1 19 Participating in loan mobilization 2.1% 8.5% 8.5% 8.5% 72.3% programs (assisting banks in 47 1 4 4 4 34 providing loans to DBEs). ADDITIONAL MEASURES 6. (Optional) Please list any additional race-neutral strategies that your agency has used that are innovative or have been very effective--those that you would rate a 4 or 5 on a five-point scale of effectiveness. (Per federal regulations, a race-neutral mea- sure or program is one that is or can be used to assist all small businesses. For the purposes of this definition, race-neutral includes gender-neutrality.) Response Attending marketplace/tradeshow and networking outreach events. Business Development Initiative (small business program that reserves small contract (under $500,000) for small businesses only). Construction Development Management Program--state funded program that provides classroom and one-on-one training to small businesses interested in road and bridge contracts. Project specific Match Makers that are geared to DBEs, but also allow other small businesses to attend. The Department has also used numerous other strategies that are not defined specifically as race-neutral because they are geared just for DBEs, such as grading our prime contractors/consultants on their DBE utilization. For a full list of these types of measures, send me an e-mail request. Conducting Executive Management training to DBEs to increase entrepreneurial skills. Contractor Speed Dating--we set up booths for prime contractors and rotate DBE firms every 10 minutes. Meet the Primes--once a year we host this event at a [State] Road Builders Association's monthly meeting. Request of Sub-bids--we have created a section in our monthly DBE newsletter for contractors to advertise for quotes. Pre-letting meetings--The Monday before our lettings we host a meeting for Primes and DBEs to go over the jobs that will be let and give everyone an opportunity to tell what job they are bidding as prime or sub. Created a listserv to aid in getting information out to all bidders and quoters effectively, efficiently, and quickly. [DOT]'s DBE Program has been race-neutral since the regulations went into effect in October 1999. Our entire industry asked to have it that way, and this let them show [DOT] that they used these firms anyway because they were good firms. With the industry's cooperation, we have met or exceeded our aspirational goal every year except one when several of our big DBE firm owners retired--something that was beyond the control of [DOT] or the industry. Elimination of upfront cost retainage on Primes and Subs. Established meet-and-greet sessions for prime contractors and small businesses (DBE firms). Small businesses have a chance to interact with prime contractors. Establishing a small or emerging business program that complements the DBE program. These programs can include financial incentives, restricted projects, and other strategies because any small company can benefit. It is then important to encourage DBEs to participate in the program to gain assistance not allo wed in the DBE program. Holding mandatory pre-bid meetings linked to mandatory networking sessions. These events not only provide an opportunity for primes and DBEs to meet one another, but also provide primes with a clear understanding of the ready, willing, and able DBEs interested in bidding. This has helped our state prevent primes from coming to the state with statements like "there are no DBEs available that can do that work."

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42 Response We have recently implemented strategies normally thought of as community organizing, especially in rural parts of our state. These strategies were used very effectively in the last Presidential race. We have been contacting com munity leaders, teachers, and ministers and asking them to invite highway construction business owners they know to a meeting in a church, school, or restaurant. We are finding success in recruiting potential DBEs in areas of our state where none are certified in highway construction, although many of these businesses have been in concrete and asphalt for years. Giving consideration to prime contractors who utilize DBE firms on projects without DBE contract goals to encourage consistent use of DBE firms and not just when there is a DBE goal on the project. Hosting construction conferences geared to primes and DBEs that discuss the general direction of construction industry. Have high level people from state DOT, FHWA, and government discuss the importance of DMWBE participation. Map to Success--business development program. Phase 1 looks at the whole business and identifies what they do well and where they need to improve. Phase 2 works with the DBE to develop the improvement in skills for their business. Matchmaker and government contracting conferences, facilitating one-on-one "meet-and-greet" sessions with state DOT staff; encouraging DBEs to partner or team on RFPs and bid proposals, weekly electronic notification of all new bidding opportunities and bid results; bringing program partners (from other state and federal agencies, technical assistance providers) to meet with DBEs and brainstorm strategies for building capacity, etc.; panels of successful DBEs to inspire and share their experiences. Partner with AGC to help educate Primes and DBEs on the DBE Program and its contractual requirements. [State] has over 100 initiatives in place to encourage greater DBE participatio n. The economy and the extremely low bid environment have hampered DBEs from obtaining small contracts. Large prime contractors are pursuing small contracts, under $500,000 that normally DBEs pursue as primes. Technical assistance, marketing, and development of DBEs is of little value unless there are teeth in the process of awarding contracts let without DBE goals (race-neutral). Our system has teeth. On contracts let without a numerical DBE goal, the DBE commitment of the low bidder is compared to the average DBE participation of all other bidders. If the low bidder's DBE commitment is less than 80% of the average of all other bidders, we request documentation of their solicitation efforts. There is a committee that reviews their documentation to determine if they made a good faith effort to solicit a secure DBE participation. If the low bidder has not followed the DBE special provision pertaining to DBE solicitation, the bid is considered non-responsive and award will go to the next lowest bidder with a responsive bid, or all bids will be rejected. The [DOT] has established an Emerging Small Business Enterprise (ESBE) certification in order to meet the maximum feasible portion of its Disadvantaged Business Enterprise (DBE) goal through race-neutral means in accordance with regulations of the U.S. Department of Transportation (USDOT), 49 CFR Part 26.51. To ensure that the maximum feasible portion of the overall DBE goal is met by using race-neutral means of facilitating DBE participation, [DOT] will establish ESBE goals on its contracts. All DBEs are considered to be ESBEs for the purposes of goal setting. ESBE certification exists solely for the benefit of the DBE program. [DOT] will monitor the effect of ESBE certification on DBE utilization. If it is determined that ESBE certification has a negative impact on DBE utilization, then [DOT] reserves the right to limit, discontinue, or eliminate ESBE certification. To be eligible for ESBE certification the firm must be a for-profit business located in [state], meet the SBA size standards in its industry as defined in 13 CFR Part 121.201 and be 51% owned and controlled by one or more econom ically disadvantaged individuals who are citizens of the United States or lawfully admitted permanent residents whose personal net worth does not exceed $750,000. The majority of professional and non-professional Request for Proposals have language in the proposals that state the Department believes these services support 10% (varies upon scope of proposal) DBE participation. It is not a hard goal, but an aspirational one. The only strategy not already mentioned is one we are currently exploring but have not implemented. We are looking at reimbursing DBE companies for bonding fees if they have to carry their own bond for a project. Most primes in [state] carry subcontractors under their own bond. We are seeing that practice begin to diminish. We inform all contractors who requested bids of their obligations toward overall DBE program goals. Annual letter sent to contractors/subs with overview of DBE program results and statement requesting cooperation to meet this year's annual goals with race-neutral measures or risk race-conscious goals on all projects. DBE percentage tracking on all federally funded projects to ensure common goals are met. Be proactive with contractors who perform below goals to identify problems and implement solutions.

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43 7. (Optional) Please list any additional race-neutral strategies that your agency has used that have been ineffective--those that you would rate a 1 or 2 on a five-point scale of effectiveness. Response Business development and management advice. Most DBEs offered this service through a previous supportive services contract were receptive at first, but didn't like the additional work and oversight that came with the program. De-centralizing the Civil Rights functions throughout the agency. Electronic bidding subscriptions for DBE firms. Group training sessions have proven to be very disappointing. One-on-one technical assistance is much more productive. Our DBEs have indicated in surveys that they are embarrassed to discuss their difficulties in a group setting and that the level of help needed varies too much. There is very little interest in attending training sessions because they see their needs to be of a confidential nature. Marketing. Mentor/Protg tied to one firm. Providing plan room services for contractors to access project plans and proposals. Publishing contract opportunities in trade and general circulation papers. DBEs have told us they do not have time to purchase and peruse newspapers for contract opportunities. They prefer being notified by fax or e-mail. Partnership with government agencies (SBA, MBDC, MBEC, OSDBU, etc.) that should be providing assistance to DBEs and providing DBE referrals to prime contractors are ineffective. The listed agencies are "procurement" focused agencies, in which their clients are suppliers, manufacturers, consultants. The DBE program is focused on major construction and the above agencies do not know transportation contracting or DBE Program requirements. Therefore, they can't help DBEs and their referral listing to prime, are not certified DBE, and the referrals are for business services/items of work not related to highway construction. Some of the strategies already discussed in this survey need explanation. We provide training reimbursements in all the areas you have listed, yet have very few firms taking advantage of them. We conduct outreach and other meetings and trainings, however, DBEs rarely take advantage of them. Meetings are published and reminders are sent out, however, we may have only 2 or 3 companies attend in a region of the state. It is very disheartening that we can't find a way to get DBEs involved and interested in their own program. What we see most is extreme apathy. The ability for DBE firms to get loans from firms who say they lend to DBE firms has been not been successful. Tuition reimbursement--We offered to reimburse firms for tuition, training materials, registration fees, etc., for classes related to business or in their line of work; however, no one took advantage of that benefit. We had a construction Mentor/Protg program that was not effective because the rules did not allow a mentor to subcontract with a protg. This really defeated the purpose. The rule was put in place because primes were concerned that there would be ethical questions raised. The program no longer exists. We hired a firm to provide one-on-one assistance to DBE firms. Not enough firms were helped and those that were helped were not helped enough to justify the expense. 8. (Optional) For one or two strategies that your agency has used, please briefly list the characteristics that made the strategy suc- cessful or unsuccessful, and/or the challenges you encountered in implementing the strategy. Response [DOT] has developed and implemented an Emerging Small Business Enterprise (ESBE) certification to ensure that the maximum feasible portion of its overall DBE goal is met by using race- and gender-neutral means. ESBE contract goals are established so that, over the period to which the overall DBE goal applies, they will cumulatively result in meeting the overall goal through the use of race-neutral means. All DBEs are considered to be ESBEs for the purposes of goal setting. The use of the ESBE certification has allowed [DOT] to be very aggressive in terms of goal setting on individual contracts. Even though we have a race-neutral program, [DOT] collects GFE documentation at the time of bid. This gives the industry the opportunity to document their willingness to continue a race-neutral program, and gives [DOT] a barometer of what we can anticipate for actual participation (subcontracts and payments to DBEs) as we go forward. This GFE documentation is a matter of public record as well, so everyone knows who is and who is not "playing nice in the sandbox." The [state] industry can then police itself, and keep everyone in the game and following the rules. Executive Management Training has been successful because it indirectly identifies firms that are committed to business growth and development, and then provides training to assist the firm in reaching their growth and development goals. In question 6, my last strategy talked about recruitment of potential DBEs, especially in the rural parts of our state. A reason that this has not worked in the past, I think, is because we have hired consultants to help us instead of doing the work ourselves. This is making a difference because business owners are seeing staff instead of consultants. It appears that business development initiatives play a strong role in the success of DBEs.

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44 Response Our state has a BOWD program that has been successful. I believe it is the one-on-one training and business assistance that has made the program successful. DBE firms, no matter how large or small, have stressed how important this program has been in providing much needed information to assist in growing their business. Programs must be tailored to address current day realities. There is the much used practice of relying on old methods to achieve new results. This does not work. Methods must adapt to the times. Commitment to DBEs must come from the top. Successful: training DBE firms how to quote electronically either via e-mail or fax, have been very successful, just difficult to get everyone together to learn. So we have been sending out our DBE temp (40 years with our department's construction program) to help firms with the certification process, orientation upon certification, and to answer any construction-related questions either regarding performance on the job, how to develop a quote, market and connect with large subs or primes, and to actually submit quotes electronically. The difficulties center around getting DBE companies to participate in training for marketing, business management, writing business plans, and growing their businesses. We continue to hear requests to bring back project goals, and few companies are willing to do the work necessary to make themselves competitive in a neutral environment. The elimination of retainage allows for money to stay in the hands of the contractors and subs for other items or to purchase bonding and insurance. We commissioned a Capacity Analysis study to identify the ability of small businesses to perform on [DOT] contracts, but because capacity is so hard to quantify in a consistent way, the information was not very helpful. We have supported scholarships to Business Management classes conducted at our Small Business Development Centers across the state, and have two Mentor/Protg programs (general long-term and project-specific) that seem to be very successful. We have arranged for DBEs to "job shadow" an established company that performs a type of work the DBE is interested in expanding into. In order for the established firm to agree, we worked with a colleague in a neighboring state to locate a company to provide the training. We cannot expect a firm to help develop a company that may well becom e a competitor. We have found the classroom style/teamwork training with one-on-one assistance to be the most effective. We found that by having the EDI class stay in a hotel, those from around the state find camaraderie that lasts beyond the training and results many times in the joining of efforts on contracts. The hotel setting is also conducive to evening homework and gives teams the opportunity to work on projects and presentations to be given the next day. We have had the teams do practical exercises such as breaking into teams to submit a [DOT] bid. We identify the DBE program's overall goals with each contractor and request that each contractor work to include DBE on each project sufficient to meet them. We maintain a database with all federally funded projects and track DB E participation for each. This helps identify contractors and projects with below-average DBE usage and allows the DBE coordinator to take proactive steps to correct the deficiency. What made it successful was the chance small businesses (DBE firms) were given to interact one-on-one. PROBLEMS AND CHALLENGES IN MEETING DBE GOALS 9. Following are some common problems or challenges faced by states in meeting their goals for DBE participation in highway con- tracting. Please rate on a scale of 1 to 5 the degree to which each problem or challenge has affected your state's DBE efforts or click the "Don't know" button. 1 4 2 3 5 Not a A Don't Item A minor A A severe know Total problem significant problem problem problem at all problem 8.7% 17.4% 37.0% 15.2% 21.7% DBEs' inability to obtain bonding 46 4 8 17 7 10 DBE firms' lack of access to capital and/or cash 2.2% 10.9% 26.1% 39.1% 19.6% 2.2% 46 flow issues 1 5 12 18 9 1 DBE firms' lack of experience/skill at managing a 4.3% 21.3% 29.8% 36.2% 4.3% 4.3% 47 business 2 10 14 17 2 2 Lack of DBEs certified or experienced in certain 14.9% 17.0% 34.0% 25.5% 8.5% work areas (such as ITS, or the full spectrum of 47 7 8 16 12 4 construction work) DBE firms' lack of equipment necessary to meet 10.6% 38.3% 27.7% 14.9% 2.1% 6.4% 47 contract/subcontract requirements 5 18 13 7 1 3 Lack of interest among DBE firms in participation 30.4% 32.6% 17.4% 13.0% 4.3% 2.2% 46 in highway contracts 14 15 8 6 2 1 Lack of interest among DBE firms in becoming 15.2% 28.3% 28.3% 10.9% 15.2% 2.2% 46 certified due to required paperwork 7 13 13 5 7 1

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45 1 4 2 3 5 Not a A Don't Item A minor A A severe know Total problem significant problem problem problem at all problem Lack of interest among DBE firms in participating 27.7% 38.3% 14.9% 6.4% 10.6% 2.1% 47 in Supportive Services programs 13 18 7 3 5 1 4.3% 23.4% 21.3% 23.4% 25.5% 2.1% Lack of DBE firms that work as prime contractors 47 2 11 10 11 12 1 Goals are set at levels that cannot reasonably be 63.8% 12.8% 12.8% 4.3% 4.3% 2.1% 47 met with the existing DBE pool 30 6 6 2 2 1 Established, successful DBE firms that are 34.0% 27.7% 17.0% 12.8% 4.3% 4.3% leaving the program or retiring are not being 47 16 13 8 6 2 2 replaced by an equal number of newer firms Larger, more established DBEs overshadow 8.5% 31.9% 31.9% 17.0% 8.5% 2.1% newly emerging DBEs, making it difficult for new 47 4 15 15 8 4 1 firms to grow Lack of commitment, cooperation or follow- 14.9% 38.3% 25.5% 12.8% 8.5% through on the part of prime contractors in using 47 7 18 12 6 4 DBE subcontractors Prime contractors not willing to work with new DBE firms (for example, because primes have 4.3% 19.1% 21.3% 27.7% 27.7% 47 existing relationships with certain DBE firms, or 2 9 10 13 13 because of uncertainty about new firms' skills) Uncertainty among DBEs in how to expand their 2.1% 23.4% 38.3% 23.4% 4.3% 8.5% 47 businesses 1 11 18 11 2 4 Challenges related to external factors, such as 6.4% 4.3% 42.6% 23.4% 21.3% 2.1% 47 economic conditions or rising fuel costs 3 2 20 11 10 1 Administrative challenges (budget constraints, 8.5% 10.6% 36.2% 29.8% 10.6% 4.3% 47 lack of staff) 4 5 17 14 5 2 Internal agency challenges (lack of support or attention from upper management, bureaucracy, 29.8% 27.7% 12.8% 14.9% 12.8% 2.1% agency reluctance to alter method of procuring 47 14 13 6 7 6 1 contracts or to unbundle contracts planned in advance) 48.9% 29.8% 10.6% 10.6% Challenges related to working with FHWA 47 23 14 5 5 ADDITIONAL PROBLEMS AND CHALLENGES 10. (Optional) Please list any additional problems or challenges (not listed above) that your agency has encountered. Response DBE goal not approved. [DOT]'s overall DBE and market area goals continue to be met. However, several of the items identified above are of concern to DBE and the Department but do not prevent meeting the goals. Funding through FHWA should increase to allow additional Supportive Services to DBEs. Not nearly enough funding for this program. Lack of computer skills. Lack of public and political awareness. Leadership support is not visible and that can be interpreted as a lack of commitment. Lack of commitment from leadership leads to a lack of commitment from prime contractors in utilizing DBEs. Most paving contracts have little opportunities for DBE participation and find it difficult to achieve DBE participation. The lack of participation on these projects lowers our overall DBE average. None.

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46 Response Prequalification requirements. Economy--contractors are self-performing more of the work to keep their workforce employed. The extra strain/burden/stress put upon STA because FTA, FAA, FHWA don't administer their DBE programs the same way. Instead of meeting the needs of the lead agency we spend a lot of extra time trying to do the different wrinkles in the other two DBE programs. The regulations are outdated and need to be revised with an approach to be more flexible. For instance, Appendix A, the good faith effort, suggests that primes advertise in various publications for DBE participation. DBEs do not read newspapers for contracting opportunities. The personal net worth is outdated and should be indexed to the state's commercial index ratings. The DBE regulations should encourage the DOT to operate a SB Program along with its DBE Program. The challenge here is that the regulation on implementing a SB Prog ram requires the state DOT to meet all 7 conditions, which are strict and are barriers to implementing a SB Program. 11. (Optional) For one or two of the challenges listed on this page, please briefly describe what ideas you have tried or considered for overcoming these problems. Response DBE/SS is great and it works to improve DBE involvement. The challenge is the funds we request from FHWA and the funds we are granted are a lot less than the request. [State] is a large state with 800 local governments that also have a DBE program and the DBEs are everywhere in the 58,000 miles we manage. The FHWA grant is too small to be effective for [state] reach to minority/women and DBEs. [DOT] has a Bond Guarantee Program where the Department would guarantee 80% or 90% of the bond, but we have been unable to get a surety company to participate in the program. Have the Secretary of the Department of Transportation call his modals together and require them to administer the DBE program in the same fashion so the process is seamless both for the DBEs and for the STAs. STAs could get a LOT more done, with the decreasing staff, if that concept were to be implemented fully. Provided an annual workshop that addresses Potential Expansion & Partnering Opportunities. Encourage graduating DBE firms to actively mentor or JV with DBE firms. Skills training workshops. Invitation to information meetings. Upper management (state and federal) is encouraged to participate and show their support at all events involving the DBE program. We have begun to contact firms with only one or two bids during the previous year to encourage them to participate more. We are trying to identify reasons these firms did not bid more often and help provide solutions to enable them to become more active. With respect to follow-through on the part of primes, we are issuing a survey that may be completed anonymously about which primes provide a meaningful work and training experience for the DBE and which primes do the minimum and release the DBE once the goal is met. Our intent is to give awards to primes that provide a positive experience. If primes are consistently identified as problematic, we bring them before the Prequalification Committee, which has the authority to decrease or eliminate a firm's ability to work with [DOT]. IMPLEMENTING RACE-NEUTRAL STRATEGIES 12. Has your agency surveyed DBE firms (either through a formal survey or by informally gathering feedback) about which race- neutral strategies have been most helpful to them? Item Count Percent Yes 25 53.23% No 22 46.81% (Optional: if yes, please describe your efforts) Annual assessment by Primes, DBEs, internal staff, etc., about what is working, what they need, etc. Annual DBE survey as DBE Supportive Services funds are available.

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47 Item As a small state we are able to work with each prime contractor and encourage use of DBEs on all projects. We are able to provide introductions of DBEs to primes when requested. We help identify projects with work they can provide and encourage them to bid or contact the prime contractor. Formal survey. Formal surveys have been conducted by DBE/SS providers. Feedback has also been obtained through informal gatherings. Have conducted Internet-based and fax surveys, along with collecting information from DBEs on an individual basis. Most of the EDI participants are very satisfied that the classes have helped them get prequalified and even participate on [DOT] projects. The classes have also opened up their minds to diversifying their businesses and being a value-added company as opposed to being there just to meet a goal. Needs assessment reports. The disparity study completed in 2007 has 120 pages of what race-neutral activities work and do not work. Additionally, we have a monthly Small Business Council and a separate AGC Council that meet with [DOT]. The 34 member organizations tell us what works and advise us on what we can improve or implement to increase DBE participation. Survey. Very little return. We have tried to provide training for the most commonly identified needs. We are holding a brainstorming session this week (March 19th) and there is significant interest on the part of DBEs to attend. We attempted to implement a race-neutral program two years ago. During this process we had considerable discussion with DBE firms. They did not want a race-neutral program. Rather than compete for work on all contracts they wanted to keep contract goals so they knew prime contractors had to use them on individual projects. We conduct needs assessment surveys on a regular basis, and we specifically ask which of our supportive services have been most helpful. We get a fairly good rate of return. We have developed a calendar of events that informs them on upcoming training. 13. Has your state requested a waiver from FHWA that allows you to use race-conscious measures to target certain subgroups? Item Count Percent Yes 6 13.02% No 40 86.96% (Optional: if yes, please describe your request) Caucasian women working on highway construction in [State] Central Region. Dual goal request (one goal for minorities and one for Caucasian women) for [a bridge project] between [two neighboring states]. Loan program for underutilized DBEs. Our Disparity Study showed that race-conscious goals should only be set for African-American, Asian Pacific, and Subcontinent Asian DBE firms. It was 9 months before our waiver was approved, and it took several attempts before FHWA was satisfied with the information we provided. Out disparity study from 2007 indicated Hispanic and Subcontinent Asian firms are at parity. Based on the study findings, the [DOT] waiver was to identify African Americans, women, Native American, and Asian Pacifica Islanders as race- conscious and Hispanics and Subcontinent Asians as race-neutral participation. 14. Did FHWA approve your waiver(s)? Item Count Percent Yes 4 18.18% No 14 63.64% Approval pending 4 18.18%

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48 15. Does your agency have partnerships with other state DOTs or other agencies within your state to encourage or promote expan- sion of DBEs on government contracts? Item Count Percent Yes 29 63.04% No 17 36.96% 16. Does your agency have partnerships with industry (contractors and consultants) to encourage the growth of DBEs? Item Count Percent Yes 37 78.72% No 10 21.28% 17. Have you taken race-neutral measures to bring DBEs into the full range of highway contracting activities (as opposed to just certain areas, such as traffic control or landscaping)? Item Count Percent Yes 25 54.3% No 21 45.65% (Optional: if yes, please describe your efforts) Assistance programs. [DOT]'s DBE Program has been 100% race neutral since October 1999. [DOT]'s Small Business Initiative--unbundling of large highway construction contracts to encourage smaller firms to bid as prime contractors. Encourage DBEs to add more work types to the original certification. However, not much success in moving firms into new areas such as landscaping, guardrail, pavement marking, and lighting due to higher barriers to entry (cost). One-on-one assessments have been conducted for selected DBEs and technical assistance is then developed for that DBE that includes training, marketing, and networking. Our DBEs can offer a full range of highway construction related services and we promote these services to prim e contractors as a way to achieve their goals. Stakeholder meetings; joint conferences of prime and DBE firms; networking activities at all pre-bid meetings; creation of practical guide for Good Faith Effort including DBE and prime input. Support services focusing on areas with no certified DBEs. We invite a wide range of firms to our EDIs and encourage primes to expand their use of DBEs beyond traffic control, landscaping, and trucking. We set goals on contracts with various work types to encourage DBEs to broaden the type of work they perform. We work closely with our DBEs to help them expand their capacity, their areas of expertise, and to get pre-qualified to bid as primes. Bonding is a significant barrier. We have seen some success since launching our business development program in 2009. Working one-on-one with DBEs over a period of time has produced some positive outcomes. We work with a number of organizations that target small businesses. We participate in various workshops and expositions to inform businesses of the vast transportation opportunities.

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49 18. Have you had compliance issues with contractors? Item Count Percent Yes 31 67.33% No 15 32.61% (Optional: if yes, please describe these issues) Although our waiver was approved 18 months ago, Primes still submit ineligible DBE firms as their com mitment to a targeted goal. At times contractors may fall behind with their DBE utilization. Our compliance review officers identify DBE shortfalls and we work proactively to assist the contractor with bringing more DBEs on the project. Issues with compliance on OJT programs and EEC reporting. Minor, usually lack of required paperwork. Most of our compliance issues are prevailing wage-related. Our Good Faith Effort guidance and Good Faith Waiver scrutiny has addressed and alleviated contracting compliance issues. Most of our problems center on prompt payment, retainage, and miscommunication between prime and subcontractors. Not following the regulations on replacing certified committed DBEs. Problems exist with contractor self-performing work items. Problems with prompt payment and DBE utilization once a subcontract is signed. Prompt pay issues. Prompt pay. Underruns on work sub-contracted to DBEs where the contractor knew or should have known the potential for an underrun existed before submitting DBE participation plan. Not submitting DBE payments timely. Race-neutral program has not been meeting the annual goal. Primes have not utilized DBEs. Reporting DBE participation throughout the contract. Anecdotally, DBEs indicate the compliance issue is prompt payment. Some commercially useful function issues such as primes working with a DBE firm to complete a job. Slow payments to DBEs are also a concern. Primes asking a DBE to leave as soon as the monetary goal is reached instead of being allowed to complete an entire contract item. These difficult times have seen a rise in contractor payment issues. Prompt payment claims have doubled. Utilizing DBE firms as required. Utilizing minorities and females in the workforce as required. 19. Have you had fraud problems with contractors? Item Count Percent Yes 16 34.76% No 30 65.22% (Optional: if yes, please describe these issues) A contractor made false material and labor statements about work performed by a DBE firm. The contractor was charged in a one-count felony indictment and entered into a deferred prosecution agreement. The DBE firm was decertified. During certification, firms have been found to be untruthful and when challenged have withdrawn the application. There are rumors that subconsultant DBEs on professional service contracts are not asked to perform the committed services but are paid just to meet the DBE goal. There have been a high number of attempted fronts for certification. Mostly non-minority female. Yes, very few, but we have encountered false reporting.

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50 20. Have you had compliance issues with DBE firms? Item Count Percent Yes 29 64.42% No 16 35.56% (Optional: if yes, please describe these issues) DBEs sign a blank quarterly report form. Many firms lease equipment with operator that may not be standard industry practice; this leads to Commercially Useful Function (CUF) questions. DBE truckers not paying prevailing wage/fringes. Minor, usually paperwork issues. Not completing paperwork properly, such as certified payrolls, not submitting payments received from prime contractors timely, not having proper/sufficient wage bonds. One problem 6 years ago--DBE fronted for a prime. Supply firm was found to be actually a broker and not in line with CUF guidelines. The bulk of problems have existed on very large design build projects and centered on commercially useful function issues. There have been some cases where participation credit has been denied because of use of primes equipment or cases where the DBE has not managed their own work forces. We have had some occasions where DBE firms quote too much work and then pick and choose the work they want to complete. We occasionally have a commercially useful function issue with DBEs. Yes generally related to Commercially Useful Function. 21. Have you had fraud problems with DBE firms? Item Count Percent Yes 19 42.21% No 26 57.78% (Optional: if yes, please describe these issues) As stated above and also during certification application process. Please refer to Question 19, and a firm was decertified recently because at the time of applying for DBE certification they were not a lawfully permanent resid ent of the United States. Some DBEs have been decertified because we come to find out after issuing the certification that a non-DBE is managing and controlling the day-to-day operations. Truckers not being on the jobsite, but operating as brokers from home. Yes, generally certification fraud. USING 100% RACE-NEUTRAL MEASURES 22. Does your state use 100% race-neutral measures to meet DBE goals, either because you are subject to the Ninth Circuit Court of Appeals decision or because your state has independently decided to do so? Item Count Percent Yes 12 26.09% No 34 73.91%

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51 23. What prompted your state to use 100% race-neutral measures to meet its goals for DBE participation? Item Count Percent Yes 5 41.67% Other 7 58.31% (If other, please describe) 9th Circuit decision first, then due to disparity study conclusions. An independent and unsolicited opinion from the past conservative State Attorney General, determ ined the course in [state]. [State] has been race-neutral since 1/1/2000. The Transportation Industry and the Department wanted to see if the goal could be achieved without having specific contract goals. [State] uses 100% race-neutral because we have managed to meet our goals without imposing contract goals under the race-conscious effort. Since the regulations were revised in 1999 we have been successful meeting our overall annual DBE goals without resorting to project specific goal setting. The industry requested it when the new regulations came out in October 1999. 24. Has your state completed an availability or disparity study? Item Count Percent Yes 8 66.65% No 4 33.33% (If yes, please give year of completion) 1999 2000 and 2005. one is being considered for 2010 funding is an issue 2005 2007 2008 2008 2009 If your state is affected by the Ninth Circuit Court of Appeals decision, please answer the remaining questions on this page (ques- tions 2527). Otherwise, please scroll to the bottom of the page and press "Click to Next Page." 25. After the court's decision was handed down and your state began using solely race-neutral strategies, which strategies had the greatest immediate impact on helping your state meet its DBE participation goals? Response Business development program, partnering meetings, contracting special notices. Encouraging the use of DBEs on projects and having DBEs serve as prime contractors. None of the methods we have used have had any impact on our state in meeting our DBE participation goal. Our strong supportive services program has probably had the biggest positive impact on working towards meeting our annual goal. We have been unable to meet our annual goal. We need to review our strategies and see what else would benefit the DBEs for participation. We have not met our goals. Prime contractors saw no goal on a contract and DBE utilization fell off dramatically.

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52 26. Did eliminating all race-conscious measures affect your state's ability to meet its goals for DBE participation? If so, did the level of DBE participation increase or decrease after you eliminated race-conscious measures? Item Count Percent DBE participation increased 0 0.00% DBE participation decreased 6 85.71% DBE participation did not change 1 14.29% 27. If similar court decisions occur in other areas of the country in the future, what advice would you give to states that are just begin- ning to use solely race-neutral measures? Response Be aggressive and get buy-in from the industry. Involve them in the race-neutral measures as coaches or instructors. Do a disparity study to justify using or not using race-neutral measures. Ensure reliable systems are in place for collecting contract/agreement and payment data. Ensure that the supportive services program uses a variety of strategies to support those DBE companies willing to work at growing their business in a neutral environment. Find ways to ensure top management support of the DBE Program. Get your data sorted out and orderly for a rigorous disparity study. ADDITIONAL COMMENTS AND MATERIALS 28. If you have any additional comments on any aspect of implementing race-neutral measures in a DBE program, please use this space to enter them. If you believe your agency has successful practices that would benefit other agencies or could serve as a case study for inclusion in this project's final report, please indicate that and we'll contact you. If you have documents or materials (forms, brochures, newsletters, manuals, etc.) that might be useful to other states in imple- menting new strategies, please e-mail them to andrea.thomas@ctcandassociates.com or provide links to the resources online in the space below. If you prefer, you may upload files using the "Browse" button below. Response [DOT] has been engaged with a stakeholder DBE and Workforce Group Collaborative that has 11 project teams working on some issues. Would be willing to share the success and issues of this group. Florida has had a race-neutral program for 10 years. This success is due to the support and advocacy of top management including the Secretary of the Department, Assistance Secretaries, and the District Secretaries. The attachment is a document that was completed in 2008. http://itd.idaho.gov/civil/external.htm The above website contains a link to a list of all DBE/SS benefits being offered currently. Also, there are a variety of other helpful documents, forms and brochures listed there. I have e-mailed you our Special Provision regarding #6, where we compare the DBE commitment of the low bidder to the other bidders. If the low bidder's commitment is not within 80% of the average of the other bidders, their solicitation efforts are reviewed. If the low bidder did not follow the special provision their bid is rejected and award goes to the next lowest responsive bidder, or all bids are rejected. Our prime contractors were willing to attempt to implement a race-neutral DBE program even if it meant more effort for them and potentially requiring them to use more DBE firms. However, our DBE firms were unwilling to give up the comforts of having contracts with specific DBE goals. My observation is that our DBE firms like to have some work reserved for them rather than compete in a race-neutral environment even if there is potentially more work availab le for them in the race-neutral environment. Outreach and communication are key factors in continuing to keep the lines open between the Primes and subs.

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53 Response Prime contractors must be informed up front of their obligations to meet overall DBE goals on federally funded projects. You need to be able to track DBE commitments and actual DBE participation throughout the life of the project and take action when a problem is identified. You need to be proactive before the start of a project to ensure the prime contractors include DBEs in the subcontracting process. If you wait until the project is started, the opportunity to find other work for DBEs is limited. You need to assist prime contractors by providing them with the means to find DBEs suitable for their project, providing a clear database, cross reference information, and suggestions when needed. You need to educate the DBEs how to use the state bidding information to solicit business from primes that have taken out proposals for projects. You need to provide introductions to primes on behalf of the DBEs looking to bid for work on a project. Overall, be proactive to ensure DBE use and develop a tracking tool to identify any issues before they become too large or late in a project to correct. The whole compliance versus support is a balancing act that is sometimes difficult. There is reluctance on the part of some DBEs to be open about the areas for which they need assistance for fear of being found in noncompliance or worse being accused of doing something fraudulent. VTrans DBE webpage: http://www.aot.state.vt.us/CivilRights/Dbe.htm VTrans DBE Electronic Newsletter archive: http://www.aot.state.vt.us/CivilRights/DBE%20Newsletter.htm VTrans Prompt Pay Compliance webpage: http://www.aot.state.vt.us/CivilRights/DBEpromptpay.htm We have guides to facilitate: project specific events, mandatory pre-bids, procurement fairs, A&E fairs, Mentor/Protg program.