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2019 N A T I O N A L C O O P E R A T I V E H I G H W A Y R E S E A R C H P R O G R A M NCHRP RESEARCH REPORT 913 Compendium of Successful Practices, Strategies, and Resources in the U.S. DOT Disadvantaged Business Enterprise Program David Keen Annette Humm Keen Janine Kyritsis Blanca Monter Keen Independent ReseaRch LLc Phoenix, AZ Subscriber Categories Administration and Management â¢ Law Research sponsored by the American Association of State Highway and Transportation Officials in cooperation with the Federal Highway Administration
NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed, and implementable research is the most effective way to solve many problems facing state departments of transportation (DOTs) administrators and engineers. Often, highway problems are of local or regional interest and can best be studied by state DOTs individually or in cooperation with their state universities and others. However, the accelerating growth of highway transporta- tion results in increasingly complex problems of wide interest to high- way authorities. These problems are best studied through a coordinated program of cooperative research. Recognizing this need, the leadership of the American Association of State Highway and Transportation Officials (AASHTO) in 1962 ini- tiated an objective national highway research program using modern scientific techniquesâthe National Cooperative Highway Research Program (NCHRP). NCHRP is supported on a continuing basis by funds from participating member states of AASHTO and receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board (TRB) of the National Academies of Sciences, Engineering, and Medicine was requested by AASHTO to administer the research program because of TRBâs recognized objectivity and understanding of modern research practices. TRB is uniquely suited for this purpose for many reasons: TRB maintains an extensive com- mittee structure from which authorities on any highway transportation subject may be drawn; TRB possesses avenues of communications and cooperation with federal, state, and local governmental agencies, univer- sities, and industry; TRBâs relationship to the National Academies is an insurance of objectivity; and TRB maintains a full-time staff of special- ists in highway transportation matters to bring the findings of research directly to those in a position to use them. The program is developed on the basis of research needs identified by chief administrators and other staff of the highway and transportation departments, by committees of AASHTO, and by the Federal Highway Administration. Topics of the highest merit are selected by the AASHTO Special Committee on Research and Innovation (R&I), and each year R&Iâs recommendations are proposed to the AASHTO Board of Direc- tors and the National Academies. Research projects to address these topics are defined by NCHRP, and qualified research agencies are selected from submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Academies and TRB. The needs for highway research are many, and NCHRP can make significant contributions to solving highway transportation problems of mutual concern to many responsible groups. The program, however, is intended to complement, rather than to substitute for or duplicate, other highway research programs. Published research reports of the NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM are available from Transportation Research Board Business Office 500 Fifth Street, NW Washington, DC 20001 and can be ordered through the Internet by going to http://www.national-academies.org and then searching for TRB Printed in the United States of America NCHRP RESEARCH REPORT 913 Project 20-95A ISSN 2572-3766 (Print) ISSN 2572-3774 (Online) ISBN 978-0-309-48050-5 Library of Congress Control Number 2019943273 Â© 2019 National Academy of Sciences. All rights reserved. COPYRIGHT INFORMATION Authors herein are responsible for the authenticity of their materials and for obtaining written permissions from publishers or persons who own the copyright to any previously published or copyrighted material used herein. Cooperative Research Programs (CRP) grants permission to reproduce material in this publication for classroom and not-for-profit purposes. Permission is given with the understanding that none of the material will be used to imply TRB, AASHTO, FAA, FHWA, FMCSA, FRA, FTA, Office of the Assistant Secretary for Research and Technology, PHMSA, or TDC endorsement of a particular product, method, or practice. It is expected that those reproducing the material in this document for educational and not-for-profit uses will give appropriate acknowledgment of the source of any reprinted or reproduced material. For other uses of the material, request permission from CRP. NOTICE The research report was reviewed by the technical panel and accepted for publication according to procedures established and overseen by the Transportation Research Board and approved by the National Academies of Sciences, Engineering, and Medicine. The opinions and conclusions expressed or implied in this report are those of the researchers who performed the research and are not necessarily those of the Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; or the program sponsors. The Transportation Research Board; the National Academies of Sciences, Engineering, and Medicine; and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturersâ names appear herein solely because they are considered essential to the object of the report.
The National Academy of Sciences was established in 1863 by an Act of Congress, signed by President Lincoln, as a private, non- governmental institution to advise the nation on issues related to science and technology. Members are elected by their peers for outstanding contributions to research. Dr. Marcia McNutt is president. The National Academy of Engineering was established in 1964 under the charter of the National Academy of Sciences to bring the practices of engineering to advising the nation. Members are elected by their peers for extraordinary contributions to engineering. Dr. C. D. Mote, Jr., is president. The National Academy of Medicine (formerly the Institute of Medicine) was established in 1970 under the charter of the National Academy of Sciences to advise the nation on medical and health issues. Members are elected by their peers for distinguished contributions to medicine and health. Dr. Victor J. Dzau is president. The three Academies work together as the National Academies of Sciences, Engineering, and Medicine to provide independent, objective analysis and advice to the nation and conduct other activities to solve complex problems and inform public policy decisions. The National Academies also encourage education and research, recognize outstanding contributions to knowledge, and increase public understanding in matters of science, engineering, and medicine. Learn more about the National Academies of Sciences, Engineering, and Medicine at www.national-academies.org. The Transportation Research Board is one of seven major programs of the National Academies of Sciences, Engineering, and Medicine. The mission of the Transportation Research Board is to increase the benefits that transportation contributes to society by providing leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisciplinary, and multimodal. The Boardâs varied committees, task forces, and panels annually engage about 7,000 engineers, scientists, and other transportation researchers and practitioners from the public and private sectors and academia, all of whom contribute their expertise in the public interest. The program is supported by state transportation departments, federal agencies including the component administrations of the U.S. Department of Transportation, and other organizations and individuals interested in the development of transportation. Learn more about the Transportation Research Board at www.TRB.org.
C O O P E R A T I V E R E S E A R C H P R O G R A M S AUTHOR ACKNOWLEDGMENTS The research reported herein was performed under NCHRP Project 20-95A by Keen Independent Research LLC. David Keen, Principal, was the Project Director. The other authors of this report, each from Keen Independent Research, are Annette Humm Keen, Principal; Janine Kyritsis, Senior Consultant; and Blanca Monter, Senior Consultant. Many other Keen Independent staff members contributed to this study as well. Olivia Fonseca, owner of GLA-Public Private Enterprises, was a subconsultant for this research and helped to formulate project design and interpret results. She was also a primary contributor and editor of the final report. Suzanne Donaldson, owner of Donaldson Enterprises, was also a subconsultant for this project. Ms. Donaldson conducted many of the interviews with DBE business owners that were essential to study results. There were frequent meetings and review of draft materials with the TRB project panel from the beginning through the end of this research study. The study team would like to thank each panel member for their time and guidance. CRP STAFF FOR NCHRP RESEARCH REPORT 913 Christopher J. Hedges, Director, Cooperative Research Programs Lori L. Sundstrom, Deputy Director, Cooperative Research Programs Gwen Chisholm Smith, TCRP Manager Keyara Dorn, Program Coordinator Eileen P. Delaney, Director of Publications Natalie Barnes, Associate Director of Publications Ellen M. Chafee, Senior Editor NCHRP PROJECT 20-95A PANEL Field of Special Projects Gregory C. Johnson, WSP/Parsons Brinckerhoff, Detroit, MI (Chair) Gregory G. âGregâ Diehl, Colorado DOT, Denver, CO Tonya L. Doyle, Michigan DOT, Lansing, MI Vivien H. Lattibeaudiere, Arizona DOT, Phoenix, AZ Brenda R. Nnambi, Office of Small Business Development & Labor Compliance, Seattle, WA Shay Ponquinette, Hampton, VA Pamela R. Simon, Illinois DOT, Springfield, IL Martha G. Kenley, FHWA Liaison
NCHRP Research Report 913: Compendium of Successful Practices, Strategies, and Resources in the U.S. DOT Disadvantaged Business Enterprise Program examines firms that have graduated from the federal Disadvantaged Business Enterprise (DBE) program or have successfully competed for state transportation agency contracts. It also explores the types of business assistance that contribute to the success of DBE firms. The report serves as a resource for staff in state transportation agencies, U.S. DOT, and other groups implementing the DBE program or providing business assistance. The DBE program provides small businesses owned and controlled by socially and economically disadvantaged persons with opportunities to participate on federally assisted highway contracts. As a requirement of receiving federal highway funds, state departments of transportation (DOTs) must administer the DBE program. FHWA provides oversight of the state DOTsâ operation of the program to ensure that they are in compliance with federal regulations. Information was needed on the business practices and experiences of successful DBE firms that have either graduated from the program, or actively participate in the program, and the role of the DBE program and DBE supportive services in contributing to that success. Under NCHRP Project 20-95A, a research team led by Keen Independent Research LLC conducted a survey of the 50 state transportation agencies plus the District of Columbia transportation agency and conducted in-depth interviews with state DOTs, trade asso- ciations, and DBEs to develop a definition and a profile of success. This research project provides the first national examination of DBEs that have been successful working with state DOTs, including program graduates. The report includes appendices that define success, profile successful DBEs, and describe state DOT initiatives for DBE success. F O R E W O R D By Gwen Chisholm Smith Staff Officer Transportation Research Board
1 Summary 5 Chapter 1 Background 5 State DOTs and the Federal DBE Program 6 Research Objectives 7 Chapter 2 Research Approach 7 Background Research and Definitions 7 Primary Research 10 Chapter 3 Profile of Successful DBEs 10 Definition of a Successful DBE and a Program Graduate 12 Successful DBEs Identified in the Research 13 Number of Certified DBEs in the United States 14 Characteristics of Successful DBEs and Graduated DBEs Compared with All DBEs 24 Work in the Public and Private Sectors and as a Prime Contractor or Subcontractor 25 Projecting the Outcomes of Not Being Certified as a DBE 27 Chapter 4 State DOT Initiatives for DBE Success 27 State DOT Business Assistance 37 Differences in Assistance for Construction and Professional Services Firms 38 Chapter 5 Keys to DBE Success 38 Keys to Success 47 State DOT Assistance 52 Other Policies or Practices That Positively or Negatively Affect DBEs 52 Challenges and Future Needs for DBE Success 53 Insights Regarding Graduation from the Federal DBE Program 55 Chapter 6 Conclusions 55 Summary of Results 62 Limitations of This Research 63 Barriers to Widespread Implementation of New Methods 63 Suggestions for Further Research 64 References 65 Appendix A In-Depth Interview Guides for State DOTs, Trade Associations, and DBEs 77 Appendix B Defining Success and Graduation C O N T E N T S
83 Appendix C Qualitative Information from Disparity Studies Regarding Keys to Business Success 109 Appendix D Qualitative Information from Surveys and In-Depth Interviews with State DOTs 133 Appendix E Qualitative Information from Trade Association Representatives Regarding Business Success 148 Appendix F Qualitative Information from Successful DBEs Regarding Business Success 197 Appendix G Statistical Analysis of DBE Success 201 Bibliography 203 Abbreviations Note: Photographs, figures, and tables in this report may have been converted from color to grayscale for printing. The electronic version of the report (posted on the web at www.trb.org) retains the color versions.