Business Engagement and Compliance

DBE Disparity Study

DBE Program Summary

Federal DBE Program

The Disadvantaged Business Enterprise (DBE) Program is a program of the United States Department of Transportation (USDOT) designed to

  • ensure nondiscrimination in the award and administration of USDOT-assisted contracts.
  • remedy past and current discrimination against disadvantaged business enterprises.
  • create a "level playing field" in which those firms can compete fairly for USDOT-funded contracts.

Federal regulations (Title 49 of the Code of Federal Regulations Part 26) provide the requirements for how state and local governments implement the Federal DBE Program.

The federal government requires state and local agencies to implement the Federal DBE Program if they receive USDOT funds for transportation projects, including those funded by the Federal Highway Administration (FHWA), Federal Transit Administration (FTA) and Federal Aviation Administration (FAA). Much of the federal funding for ADOT transportation projects comes through FHWA.

Goals for DBE participation on individual federally funded contracts are one element of the Federal DBE Program. ADOT currently sets DBE goals on certain FHWA-funded planning, engineering design, construction and procurement contracts. FTA and FAA contracts do not have specific goals, but DBE utilization on these contracts is encouraged.

ADOT's Operation of the Federal DBE Program

ADOT has been implementing some version of the Federal DBE Program since the 1980s. The ADOT Business Engagement and Compliance Office (BECO) is responsible for providing management and oversight of the DBE Program, which is implemented by various groups and departments within ADOT and by local public agencies (LPAs) and subrecipients that receive federal funding through ADOT.

The program is operated under approved DBE Program plans with three USDOT modal agencies (FHWA, FTA and FAA) as required by federal laws and regulations 49 CFR Parts 23 and 26. ADOT BECO establishes the triennial DBE goals for each federal program and serves as the lead agency in Arizona's Unified Certification Program (UCP) with the cities of Phoenix and Tucson, performs statewide DBE goal-setting, monitors DBE participation and utilization for all federally assisted projects, and provides DBE supportive services in the form of training, technical assistance and outreach to DBEs and small businesses.

Until early 2006, ADOT had been using race-conscious means of setting goals on contracts to obtain DBE participation. On Dec. 21, 2005, FHWA and FTA issued guidance to all state transportation agencies in the Ninth Circuit Court of Appeals, requiring recipients of federal-aid transportation funds to conduct a study to determine if there is evidence of discrimination or its effects. The guidance was in response to the Ninth Circuit Court of Appeals decision in Western States Paving Co., Inc. v. Washington State Department of Transportation, 407 F.3d 983 (2005).

As a result of the guidance, ADOT suspended its race-conscious DBE program in 2006 and contracted with a consultant in 2007 to conduct its first full DBE Availability and Disparity Study. The study covered contracts let from July 1, 2001, to June 30, 2007, and was completed in 2009. As a result of the study's findings, ADOT developed triennial DBE goals and re-implemented a race-conscious DBE program on its FHWA-funded contracts in 2010.

Currently, ADOT is conducting a combined race-conscious and race- and gender-neutral DBE program on FHWA projects. ADOT's current overall FHWA DBE goal is 7.76 percent (5.08 percent of which is race-conscious and 2.68 percent of which is race-neutral). ADOT's FY 2013 DBE utilization on FHWA contracts was 7.25 percent, just below the targeted goal.

The FTA and FAA contracts were not included in the 2007 Disparity Study. As a result, these contracts are not assessed for goals, which means that currently, DBE participation on these contracts is strictly voluntary. ADOT's current aspirational goal is 3.82 percent for FTA contracts and 3.30 percent for FAA contracts. Current DBE utilization on these contracts is below the aspirational goals. FTA and FAA contracts will be included in the current 2015 study along with FHWA contracts to determine if goals need to be set on these contracts.

In the past year, ADOT staff have worked closely with LPAs and subrecipients to adjust their DBE programs to follow ADOT's overall DBE Program Plan. ADOT assesses all USDOT-funded ADOT and subrecipient contracts for DBE opportunity. Most contracts are assessed for DBE goals, and others are assessed as race-neutral (i.e., no goals). Type of contracts with DBE goals include planning, architectural and engineering (professional services), construction, procurements for goods and services, and transit services. ADOT also procures some contracts solely with state funding. These contracts are not assessed for DBE goals.