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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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Suggested Citation:"Front Matter." National Academies of Sciences, Engineering, and Medicine. 2011. Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs. Washington, DC: The National Academies Press. doi: 10.17226/14505.
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TRANSPORTATION RESEARCH BOARD WASHINGTON, D.C. 2011 www.TRB.org NAT IONAL COOPERAT IVE H IGHWAY RESEARCH PROGRAM NCHRP SYNTHESIS 416 Research Sponsored by the American Association of State Highway and Transportation Officials in Cooperation with the Federal Highway Administration SUBSCRIBER CATEGORIES Highways • Administration and Management Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs A Synthesis of Highway Practice CONSULTANTS PATRICK CASEY and ANDREA THOMAS CTC & Associates LLC Madison, Wisconsin and JAMES S. THIEL Attorney at Law Madison, Wisconsin

NATIONAL COOPERATIVE HIGHWAY RESEARCH PROGRAM Systematic, well-designed research provides the most effective approach to the solution of many problems facing highway administrators and engineers. Often, highway problems are of local interest and can best be studied by highway departments individually or in cooperation with their state universities and others. However, the accelerating growth of highway transportation develops increasingly complex problems of wide interest to highway authorities. These problems are best studied through a coordinated program of cooperative research. In recognition of these needs, the highway administrators of the American Association of State Highway and Transportation Officials initiated in 1962 an objective national highway research program employing modern scientific techniques. This program is supported on a continuing basis by funds from participating member states of the Association and it receives the full cooperation and support of the Federal Highway Administration, United States Department of Transportation. The Transportation Research Board of the National Academies was requested by the Association to administer the research program because of the Board’s recognized objectivity and understanding of modern research practices. The Board is uniquely suited for this purpose as it maintains an extensive committee structure from which authorities on any highway transportation subject may be drawn; it possesses avenues of communications and cooperation with federal, state, and local governmental agencies, universities, and industry; its relationship to the National Research Council is an insurance of objectivity; it maintains a full-time research correlation staff of specialists in highway transportation matters to bring the findings of research directly to those who are in a position to use them. The program is developed on the basis of research needs identified by chief administrators of the highway and transportation departments and by committees of AASHTO. Each year, specific areas of research needs to be included in the program are proposed to the National Research Council and the Board by the American Association of State Highway and Transportation Officials. Research projects to fulfill these needs are defined by the Board, and qualified research agencies are selected from those that have submitted proposals. Administration and surveillance of research contracts are the responsibilities of the National Research Council and the Transportation Research Board. The needs for highway research are many, and the National Cooperative Highway Research Program can make significant contributions to the solution of 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 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 at: http://www.national-academies.org/trb/bookstore Printed in the United States of America NCHRP SYNTHESIS 416 Project 20-05, Topic 41-08 ISSN 0547-5570 ISBN 978-0-309-14332-5 Library of Congress Control No. 2011921584 © 2011 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, FTA, or Transit Development Corporation 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 project that is the subject of this report was a part of the National Cooperative Highway Research Program, conducted by the Transportation Research Board with the approval of the Governing Board of the National Research Council. The members of the technical panel selected to monitor this project and to review this report were chosen for their special competencies and with regard for appropriate balance. The 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 Governing Board of the National Research Council. 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 Research Council, or the program sponsors. The Transportation Research Board of the National Academies, the National Research Council, and the sponsors of the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of the report. NOTE: The Transportation Research Board of the National Academies, the National Research Council, the Federal Highway Administration, the American Association of State Highway and Transportation Officials, and the individual states participating in the National Cooperative Highway Research Program do not endorse products or manufacturers. Trade or manufacturers’ names appear herein solely because they are considered essential to the object of this report.

The National Academy of Sciences is a private, nonprofit, self-perpetuating society of distinguished schol- ars engaged in scientific and engineering research, dedicated to the furtherance of science and technology and to their use for the general welfare. On the authority of the charter granted to it by the Congress in 1863, the Academy has a mandate that requires it to advise the federal government on scientific and techni- cal matters. Dr. Ralph J. Cicerone is president of the National Academy of Sciences. The National Academy of Engineering was established in 1964, under the charter of the National Acad- emy of Sciences, as a parallel organization of outstanding engineers. It is autonomous in its administration and in the selection of its members, sharing with the National Academy of Sciences the responsibility for advising the federal government. The National Academy of Engineering also sponsors engineering programs aimed at meeting national needs, encourages education and research, and recognizes the superior achieve- ments of engineers. Dr. Charles M. Vest is president of the National Academy of Engineering. The Institute of Medicine was established in 1970 by the National Academy of Sciences to secure the services of eminent members of appropriate professions in the examination of policy matters pertaining to the health of the public. The Institute acts under the responsibility given to the National Academy of Sciences by its congressional charter to be an adviser to the federal government and, on its own initiative, to identify issues of medical care, research, and education. Dr. Harvey V. Fineberg is president of the Institute of Medicine. The National Research Council was organized by the National Academy of Sciences in 1916 to associate the broad community of science and technology with the Academyís purposes of furthering knowledge and advising the federal government. Functioning in accordance with general policies determined by the Acad- emy, the Council has become the principal operating agency of both the National Academy of Sciences and the National Academy of Engineering in providing services to the government, the public, and the scientific and engineering communities. The Council is administered jointly by both Academies and the Institute of Medicine. Dr. Ralph J. Cicerone and Dr. Charles M. Vest are chair and vice chair, respectively, of the National Research Council. The Transportation Research Board is one of six major divisions of the National Research Council. The mission of the Transportation Research Board is to provide leadership in transportation innovation and progress through research and information exchange, conducted within a setting that is objective, interdisci- plinary, and multimodal. The Board’s varied activities 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 Transporta- tion, and other organizations and individuals interested in the development of transportation. www.TRB.org www.national-academies.org

NCHRP COMMITTEE FOR PROJECT 20-05 CHAIR CATHERINE NELSON, Oregon DOT MEMBERS KATHLEEN S. AMES, Michael Baker, Jr., Inc. STUART D. ANDERSON, Texas A&M University CYNTHIA J. BURBANK, PB Americas, Inc. LISA FREESE, Scott County (MN) Public Works Division MALCOLM T. KERLEY, Virginia DOT RICHARD D. LAND, California DOT JAMES W. MARCH, Federal Highway Administration (retired) JOHN M. MASON, JR., Auburn University ANANTH PRASAD, HNTB Corporation ROBERT L. SACK, New York State DOT FRANCINE SHAW-WHITSON, Federal Highway Administration MARY LYNN TISCHER, Federal Highway Administration LARRY VELASQUEZ, QUALCON, Inc. FHWA LIAISON JACK JERNIGAN TRB LIAISON STEPHEN F. MAHER COOPERATIVE RESEARCH PROGRAMS STAFF CHRISTOPHER W. JENKS, Director, Cooperative Research Programs CRAWFORD F. JENCKS, Deputy Director, Cooperative Research Programs NANDA SRINIVASAN, Senior Program Officer EILEEN P. DELANEY, Director of Publications NCHRP SYNTHESIS STAFF STEPHEN R. GODWIN, Director for Studies and Special Programs JON M. WILLIAMS, Program Director, IDEA and Synthesis Studies JO ALLEN GAUSE, Senior Program Officer GAIL R. STABA, Senior Program Officer DONNA L. VLASAK, Senior Program Officer DON TIPPMAN, Senior Editor CHERYL KEITH, Senior Program Assistant DEBBIE IRVIN, Program Associate TOPIC PANEL SYLVIA BLACKMON-ROBERTS, Blackmon Roberts Group, Lakeland, FL MICHAEL G. COOPER, Georgia Department of Transportation JULIE CUNNINGHAM, Conference of Minority Transportation Officials BRIAN DEERY, Associated General Contractors OLIVIA FONSECA, California Department of Transportation DEBRA A. GALLEGOS, Colorado Department of Transportation FREDERICK HEJL, Transportation Research Board HOPE JENSEN, Minnesota Department of Transportation JOANNE LICHTENSTEIN LUBART, Pennsylvania Department of Transportation Office of General Counsel CYNTHIA J. WILSON ORNDOFF, Florida Gulf Coast University, Fort Myers, FL MARTHA G. KENLEY, Federal Highway Administration (Liaison)

Highway administrators, engineers, and researchers often face problems for which infor- mation already exists, either in documented form or as undocumented experience and prac- tice. This information may be fragmented, scattered, and unevaluated. As a consequence, full knowledge of what has been learned about a problem may not be brought to bear on its solution. Costly research findings may go unused, valuable experience may be overlooked, and due consideration may not be given to recommended practices for solving or alleviating the problem. There is information on nearly every subject of concern to highway administrators and engineers. Much of it derives from research or from the work of practitioners faced with problems in their day-to-day work. To provide a systematic means for assembling and evalu- ating such useful information and to make it available to the entire highway community, the American Association of State Highway and Transportation Officials—through the mechanism of the National Cooperative Highway Research Program—authorized the Transportation Research Board to undertake a continuing study. This study, NCHRP Project 20-05, “Synthesis of Information Related to Highways Problem,” searches out and synthe- sizes useful knowledge from all available sources and prepares concise, documented reports on specific topics. Reports from this endeavor constitute an NCHRP report series, Synthesis of Highway Practice. This synthesis series reports on current knowledge and practice, in a compact format, without the detailed directions usually found in handbooks or design manuals. Each report in the series provides a compendium of the best knowledge available on those measure found to be the most successful in resolving specific problems FOREWORD As state departments of transportation (DOTs) carry out their highway construction pro- grams, they are required to direct a portion of their federal-aid fund expenditures toward small businesses called Disadvantaged Business Enterprises (DBEs). A DBE is defined as a small, for-profit business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals. States are required to meet the max- imum feasible portion of their DBE participation goals using race-neutral means designed to remove barriers and enhance opportunities for all small businesses, not just DBEs. This synthesis compiles and documents race-neutral strategies being used effectively by state DOTs to meet their DBE participation goals. It also reviews and synthesizes problems faced by state DOTs in the administration of their DBE programs and identifies race-neutral remedies used to overcome these challenges. Information used in this study was acquired through a review of the literature and a survey of state DOTs. Follow-up interviews were conducted with three states as case examples. Patrick Casey and Andrea Thomas, CTC & Associates LLC, and James S. Thiel, attor- ney at law, Madison, Wisconsin, collected and synthesized the information and wrote the report. The members of the topic panel are acknowledged on the preceding page. This syn- thesis is an immediately useful document that records the practices that were acceptable with the limitations of the knowledge available at the time of its preparation. As progress in re- search and practice continues, new knowledge will be added to that now at hand. PREFACE By Jo Allen Gause Senior Program Officer Transportation Research Board

CONTENTS 1 SUMMARY 5 CHAPTER ONE INTRODUCTION Purpose of Report, 5 Background, 5 Study Approach, 6 Report Organization, 7 8 CHAPTER TWO SUMMARY OF SURVEY RESPONSES Survey Results, 8 Responses from the Subset of States That Have Used 100% Race-Neutral Measures, 12 15 CHAPTER THREE STATE STRATEGIES FOR IMPLEMENTING RACE-NEUTRAL MEASURES Supportive Services and Training Measures, 15 Administrative Support Strategies, 17 Marketing and Outreach Strategies, 18 Financial Assistance Strategies, 20 Additional Race-Neutral Strategies, 21 Survey Responses on Other Topics, 21 23 CHAPTER FOUR STATE DISADVANTAGED BUSINESS ENTERPRISE PROGRAM CHALLENGES AND SOLUTIONS Financial Challenges, 23 Disadvantaged Business Enterprises’ Lack of Experience or Equipment, 24 Issues with Prime Contractors, 24 Challenges Related to Disadvantaged Business Enterprise Development, 25 26 CHAPTER FIVE CASE EXAMPLES Case Example #1: Florida Department of Transportation: Reserving Small Contracts for Small Businesses, 26 Case Example #2: Rhode Island Department of Transportation: Loan Program for Underutilized Disadvantaged Business Enterprise Firms, 27 Case Example #3: Colorado Department of Transportation: One-on-One Assessments and Customized Training, 28 30 CHAPTER SIX CONCLUSIONS

31 REFERENCES 32 BIBLIOGRAPHY 33 APPENDIX A SURVEY QUESTIONS 39 APPENDIX B SURVEY RESPONSES 54 APPENDIX C SAMPLE COLLATERAL MATERIALS FROM STATE DBE PROGRAMS

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TRB’s National Cooperative Highway Research Program (NCHRP) Synthesis 416: Implementing Race-Neutral Measures in State Disadvantaged Business Enterprise Programs explores race-neutral strategies being used effectively by state departments of transportation (DOTs) to meet their Disadvantaged Business Enterprises (DBE) participation goals. It also reviews and synthesizes problems faced by state DOTs in the administration of their DBE programs and identifies race-neutral remedies used to overcome these challenges.

As state DOT's carry out their highway construction programs, they are required to direct a portion of their federal-aid fund expenditures toward small businesses called DBEs. A DBE is defined as a small, for-profit business concern that is at least 51% owned and controlled by one or more socially and economically disadvantaged individuals. States are required to meet the maximum feasible portion of their DBE participation goals using race-neutral means designed to remove barriers and enhance opportunities for all small businesses, not just DBEs.

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