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40 CHAPTER SIX CONCLUSIONS The federal government requires state and local governments to implement the Federal Disadvantaged Business Enterprise Program if they receive certain U.S.DOT funds for transporta- tion projects. Use of traditional methods for DBE contracting goals on design-build projects is challenging for state trans- portation departments and design-build teams. Many state departments of transportation have responded by creating new methods for applying DBE contract goals to design-build and other alternative delivery method projects. This study reviews and synthesizes both traditional and new methods, as well as other aspects of the Federal DBE Program as it pertains to U.S.DOT-funded alternative delivery method projects. SUMMARY OF RESULTS The study examined current practices and challenges that state DOTs face in implementing the Federal DBE Program for alternative project delivery methods. Information con- cerning the use of alternative delivery method projects was obtained for every state, and interviews were completed with staff of nearly every state DOT. Application of Traditional DBE Contract Goals to Alternative Delivery Method Projects Of the 48 state transportation departments that appear to have used alternative delivery methods, 33 have applied DBE contract goals to those types of projects. Many of the state DOTs that apply DBE contract goals to alternative delivery projects began by closely adhering to their long-established methods for design-bid-build projects. At the time of this report, five state DOTs continued to use that approach. New Approaches for Applying DBE Contract Goals to Design-Build Contracts Representatives of state transportation departments, contrac- tors, DBEs, and FHWA report substantial difficulties using traditional methods for DBE contract goals on alternative delivery method projects. The principal barrier is the require- ment for firm dollar commitments to individual DBEs at time of proposal, even though the design has not been completed. Twenty-eight of the 33 state DOTs applying DBE con- tract goals to design-build contracts have adopted a new approach to DBE contract goals for those projects. They indicated that new methods focusing on a DBE plan at time of proposal (rather than commitments to specific DBEs) are workable and can achieve more of the objectives of the Federal DBE Program. Approaches for Applying DBE Goals for CMAR and CMGC Contracting Methods Ten state DOTs that use construction manager at risk or construction manager/general contractor methods and apply DBE contract goals were identified. Based on interviews, most state DOTs no longer set DBE contract goals before awarding these contracts; instead, they develop a DBE goal before the construction phase. Some interviewees reported that a state DOT may be able improve a contractorâs plan for DBE participation if a DBE plan is required and evaluated as part of the selection of the construction manager. BARRIERS TO WIDESPREAD IMPLEMENTATION OF NEW METHODS Many state DOTs have seen the need to adopt new meth- ods to applying DBE contract goals to alternative delivery method projects. Based on interviews with state DOT and FHWA staff, they are doing so with very limited knowledge, experience with the methods, or guidance from U.S.DOT. Study results indicate that most long-standing state DOT practices, as well as available U.S.DOT guidance and train- ing, do not relate to alternative delivery method contracts. Regulations governing the Federal DBE Program in 49 CFR Part 26 primarily relate to design-bid-build projects and tra- ditional consultant contracts. Lack of knowledge and guid- ance are the principal barriers to further refinement and implementation of the new methods. SUGGESTIONS FOR FURTHER RESEARCH Interviews with state DOTs identified many gaps in the information needed to properly and effectively apply the DBE contract goals program to alternative delivery method projects. The gap is most extensive for public-private part- nership contracts. A review of federal guidance and past research on the topic confirmed these gaps.
41 State DOTs indicated in interviews that they would value additional information about successes and failures, as well as clarification from U.S.DOT or FHWA. Future research might include the following: ⢠How to ensure coordination among state DOT design, contracts, and project management staff, and DBE pro- gram staff from the beginning to the end of a project ⢠Needed DBE program language for requests for quali- fications, requests for proposals, other contract docu- ments, and monitoring documents, to ensure clarity for proposers and state DOTs ⢠Options for how and when to establish a DBE goal on design-build and CMAR/CMGC projects ⢠How, when, and on what project aspects a DBE goal can be set in public-private partnership contracts ⢠How best to conduct outreach and consultation with DBE groups on an alternative delivery method project, before and after contract award ⢠How and when to evaluate whether the contractor has met the DBE goal or made good faith efforts to do so ⢠Whether DBE plans are valuable and might be required from a proposer ⢠What could go into a proposerâs DBE program plan submitted as part of its proposal, and how that plan is to be evaluated ⢠Whether and how the state DOT could work with the selected proposer to augment or refine its proposed DBE plan ⢠Proper timing to request the design-builder to provide dollar commitments for specific DBEs ⢠How the state DOT counts DBE participation, tracks overall DBE use, and monitors the design-builderâs execution of its DBE plan throughout the duration of an alternative delivery method contract ⢠How the state DOT counts DBE participation, tracks cumulative DBE use, verifies that information, and monitors the contractorâs DBE plan through many phases of a long-term P3 contract ⢠Approaches the state DOT might consider to remedy lagging DBE participation that is identified early in the contract ⢠What administrative remedies may be properly imposed on the design-builder for failing to meet the DBE goal or showing good faith efforts to do so (or other noncompliance with the Federal DBE Program) ⢠How the state DOT incorporates opportunities for requests for reconsideration if it determines that the design-builder is not in compliance (either at time of proposal or after award) ⢠Guidance on when a state DOT must request a waiver from FHWA concerning its use of new methods ⢠Steps state DOTs must take to ensure that the new methods for applying DBE contract goals are consis- tent with all aspects of federal regulations, includ- ing prohibition of quotas (49 CFR Section 26.43); provisions for consideration of good faith efforts (49 CFR Section 26.53); prohibition of proposal scoring systems that give more points for a DBE commit- ment higher than the goal set for the project (23 CFR Section 635.107); and prohibition of duplicate use of criteria in multiple stages of an evaluation (23 CFR Section 636.303) ⢠Any opportunities to extend these new methods for applying DBE contract goals to traditional design-bid- build contracts. Guidance that emerges from such research will be an invaluable resource for DBE program staff, legal staff, contracting staff, project management staff, contractors, DBEs, and U.S.DOT on how the Federal DBE Program relates to each aspect of alternative delivery method proj- ects. The guidance can be used to create the appropri- ate tools and training to apply and enforce the program, including new standards for DBE program language for RFPs, proposal evaluation procedures, contract specifica- tions, and program monitoring.
