2020 DBE Disparity Study

Developing New Overall Goals for DBE Participation

Every three years, ADOT analyzes the availability of DBEs and other firms to perform its contracts. The DBE Disparity Study will provide information for ADOT to adopt new overall DBE goals in 2020. ADOT currently has an overall goal of 9.55% for dollars of Federal Highway Administration-funded contracts going to DBEs

ADOT 2020 Disparity Study Fact Sheet

ADOT has finalized the Disparity Study report and the FHWA Overall DBE Goal and Methodology for federal fiscal years (FFYs) 2021 through 2023 pursuant to 49 CFR Part 26, section 26.45.

Based on the results of the Disparity Study, which took into consideration comments and input from the public, ADOT will adopt a 12.89% DBE goal for federal fiscal years 2021 through 2023 for FHWA-funded contracts; 8.17% of which is expected  to be accomplished through race and gender-conscious means (DBE contract goals) and the remaining 4.72 % to be accomplished through race-neutral means (ADOT outreach, training and program efforts). The goal will be submitted to FHWA for approval and implementation on projects advertised beginning October 1, 2020.

ADOT recognizes the uncertainty created by the current health pandemic and the potential impact to the construction industry and its businesses, both DBEs and non-DBEs. However, at this time, there is not enough data to support a notion that any portion of the industry is deferentially impacted that it requires a re-evaluation of the DBE goal at this time. In the future, if there is sufficient data to support a re-evaluation of the DBE goal, ADOT will work with FHWA to determine how and when it can do so in accordance with regulations outlined in 49 CFR Part 26. 

The final Disparity Study documents and Overall Disadvantaged Business Enterprise (DBE) Goal and Methodology for federal fiscal years (FFYs) 2021 through 2023, along with answers to frequently asked questions related to the study submitted during the public comment period by firms, individuals and organizations will be posted on the this website by September 1, 2020.  Industry stakeholders will be notified when the documents will be posted to the website.

Based on the study results, ADOT is proposing the following DBE goals:

Funding Agency

Federal Fiscal Years

Overall Proposed Goal

Race/Gender Conscious %
(Contract Goals)

Race/Gender Neutral %
(Small Business Programs and other Efforts)

FHWA

2021- 2023

12.89%

8.17%

4.72%

FAA

2022 - 2024

10.69%

0%

10.69%

FTA

2022 - 2024

14.64%

0%

14.64%

The public comment period took place April 13, 2020 through June 30, 2020.  As part of the comment period, ADOT held two Webinars as follows:

May 12, 2020
1:00 pm – 2:30 pm MST
Attendance via Webinar

(Ended: Presentation | Recording)

May 21, 2020
4:00 pm – 5:30 pm MST
Attendance via Webinar

(Ended: Presentation | Recording)

At any time during the public comment period, comments can be provided in the following ways:

  • During the webinars;
  • By calling the study telephone hotline at 602-730-0466;
  • Via email at [email protected]; and
  • Through regular mail to:

Keen Independent Research LLC
701 N. 1st St., 2nd Floor
Phoenix, AZ 85004

Informational video by Dave Keen, Principal, with Keen Independent Research who presents ADOT's 2020 Disparity Study Draft results and the proposed ADOT DBE Goal for FHWA based on the disparity study Keen Independent Research conducted.

Video Presentation: ADOT DBE Disparity Study Presentation - March 27, 2020

Title VI of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA)

Pursuant to Title VI of the Civil Rights Act of 1964 and the Americans with Disabilities Act (ADA), ADOT does not discriminate on the basis of race, color, national origin, age, sex or disability. Persons who require a reasonable accommodation based on language or disability should contact the BECO office at: (602) 712-7761 or at [email protected] Requests should be made as early as possible to ensure the State has an opportunity to address the accommodation.

De acuerdo con el título VI de la Ley de Derechos Civiles de 1964 y la Ley de Estadounidenses con Discapacidades (ADA por sus siglas en inglés), el Departamento de Transporte de Arizona (ADOT por sus siglas en inglés) no discrimina por raza, color, nacionalidad, edad, género o discapacidad.  Personas que requieren asistencia (dentro de lo razonable) ya sea por el idioma o por discapacidad deben ponerse en contacto BECO en (602) 712-7761 o en [email protected] Las solicitudes deben hacerse lo más pronto posible para asegurar que el equipo encargado del proyecto tenga la oportunidad de hacer los arreglos necesarios.

Frequently Asked Questions (FAQ's)

Disparity Study 2020 Public Comment Period Questions:

How did COVID-19 impact the study?

No specific data related to COVID-19’s impact to the industry is currently available. While the draft report was prepared prior to COVID-19, there is no information at this time to indicate that the study results or the proposed goals would change because of COVID-19. If and when there is enough data to support a re-evaluation, there is a possibility that ADOT with guidance from FHWA will look at re-assessing the DBE goal.

Are subcontractors required to be prequalified to work on ADOT projects?

Currently, ADOT does not require construction subcontractors, DBEs or non-DBEs, to be prequalified to work on ADOT projects.

What business assistance is available for DBEs and small business owners?

ADOT provides a variety of business assistance to DBEs and small business owners such as training and education, business counseling, development programs, bonding, financing and insurance workshops and other services available through the ADOT BECO DBE Supportive Service Program. To reach the staff for more details, email [email protected].

What opportunities are available for subcontractors to better engage with prime contractors?

ADOT BECO DBE Supportive Services provides opportunities for construction subcontractors and professional services subconsultants to connect with primes in a variety of settings including DBE Task Force meetings, statewide DBE and Small Business Conferences, Lunch and Learn sessions and other events. More information related to services provided visit Supportive Services Program

Why does ADOT implement the federal DBE program?

The Disadvantaged Business Enterprise (DBE) program is designed to remedy ongoing discrimination and the continuing effects of past discrimination in federally-assisted highway, transit, and airport transportation contracts. ADOT is required to implement the federal DBE Program in order to comply with federal regulations to obtain federal funds.

Would goals above 10% be difficult to meet considering resources like labor are limited for prime and subs?

DBE goals on all ADOT’s contracts are narrowly tailored to the specific types of work required in the contract in accordance with 49 CFR Part 26. Additionally, whenever finding DBE utilization on a contract might pose a challenge to a firm, the bidder may be considered for the award if it submits evidence of good faith efforts.

Does ADOT collect DBE participation/utilization data in two separate systems?

ADOT’s DBE participation/utilization is collected in one system (DOORS) and is reviewed and approved on a semi-annual basis by FHWA. The DOORS has received national recognition by other state DOTs and practitioners of the DBE program as a model system for collecting and reporting DBE utilization data.

Why is there a need for contract goals for FHWA-funded contracts and not FAA- and FTA-funded contracts?

The Disparity Study determines if there is a substantial disparity resulting in an inference of discrimination. In the FTA- and FAA-funded contract categories, there was no disparity. Therefore, there was no need for race-conscious efforts (contract goals). However, this was not the case with FHWA-funded contracts. Statistically significant disparities were discovered for FHWA-funded contracts. Therefore, race-conscious efforts, including contract goals, are appropriate.

Is the change in the race-neutral portion of the proposed DBE goal indicating the future direction of ADOT’s DBE program?

The primary purposes of the Disparity Study is to discover what the data of the industry conveys and how it can be used to set the agency’s triennial DBE Goal and help improve ADOT’s DBE program. Any movement by ADOT is determined by the behavior of the market.

Could the decrease in the race-neutral portion of the overall DBE goal for FHWA-funded contracts in the current proposed goal be explained by ADOT setting previous contract-specific goals “too high especially if not enough ‘potential’ DBEs that were identified from the last study were certified as anticipated?”

The calculation of the race-neutral goal projection for the overall DBE goals for FHWA-funded contracts differed by only 0.3 percentage points between the previous study and the current study, which is not considered to be a major decrease. The race-neutral portion of the DBE goal is largely determined by the behavior of the market in utilizing DBEs above contract goals or when no DBE goals are set on contracts.

Were new DBEs certified since the 2015 Disparity Study certified in NAICS codes associated with ADOT work categories or work types for the construction phase of FHWA-funded projects?

The Disparity Study examined information about all currently certified DBEs and potential DBEs. Information about DBEs and their associated NAICS codes can be found by visiting the AZUTRACS website (https://utracs.azdot.gov).

Is there a crosswalk between ADOT work categories/types and the NAICS codes that can be provided to contractors to assist them with finding the available DBEs that BECO utilizes to calculate contract-specific goals?

As part of the Disparity Study, Keen Independent studied work categories that were slightly different and more nuanced than NAICS code categories. When acquiring DBE participation on a specific contract, it is up to the contractor to utilize NAICS codes that DBE firms are certified in, as listed in the AZUTRACS Directory.

General Disparity Study Questions:

Below are the Most Frequently Asked Questions From the Disparity Study

What is the Disparity Study Timeline?

Timeline

The study team began work in February 2019. By March 2020, Keen Independent will publish a draft report for public review. ADOT will also distribute its proposed overall DBE goals at that time.

The study team and ADOT will consider comments prior to preparing a final report and final DBE goals in May 2020. After Federal Highway Administration review, the new overall goal for FHWA-funded contracts will go into effect starting October 1, 2020.

disparity study timeline

What is a disparity study?

A disparity study examines whether there are disparities between:

  • The percentage of dollars that minority- and women-owned businesses received on an agency's prime contracts and subcontracts during a particular time period (referred to as "utilization analysis"); and
  • The percentage of dollars that those firms might be expected to receive based on their availability to perform on the agency’s prime contracts and subcontracts (referred to as an “availability analysis”).

The comparison between the utilization of minority- and women-owned businesses on an agency's contracts and the availability of those businesses to perform that work is referred to as a "disparity analysis."

In addition to utilization, availability and disparity analyses, disparity studies examine quantitative and qualitative information about:

  • Marketplace conditions for minority- and women-owned businesses;
  • Contracting practices and business assistance programs that the agency currently has in place; and
  • Potential program measures

Why does ADOT conduct disparity studies?

This is the third disparity study conducted by ADOT. The first study was completed in 2009 as a result of a 2005 court decision by the Ninth Circuit Court of Appeals and subsequent U.S. Department of Transportation guidance that any use of DBE goals on transportation contracts must be based on the results of a disparity study or similar analysis.

What contracts will be examined in the study?

The study will include state- and federally-funded construction, professional services, construction materials supply and other transportation-related contracts awarded from October 2013 through September 2018. It will include contracts using ADOT or federal funds that were awarded by local public agencies.

Who is the team involved in completing the study?

Keen Independent Research LLC is an economic research firm specializing in disparity studies. It has staff throughout the country and is based in Phoenix. David Keen (Principal) is leading the study.

Keen Independent will be assisted by five subconsultants:

  • Keith Wiener of Holland & Knight, LLP (H&K) is preparing the legal framework for the study and examining other issues related to federal regulations and case law;
  • The survey team at Customer Research International (CRI) is responsible for the availability survey; and
  • Así Marketing Group, Gordley Group and Partners In Brainstorms (PIB) are conducting in-depth interviews with business owners and representatives of trade associations and other groups.

Is a DBE contract goal the same as ADOT’s overall DBE goal?

No. The overall DBE goal is the level of DBE participation on federally-funded contracts ADOT hopes to cumulatively achieve over the course of a year. DBE contract goals are one tool ADOT can use to reach its overall DBE goal. ADOT sets each contract goal based on the unique characteristics of a contract and availability of DBEs for that work.

Does ADOT set an overall DBE goal for its non-federally-funded contracts?

No. The Federal DBE Program only applies to contracts funded in whole or in part by U.S. Department of Transportation funds.

Will the study results be made public?

Yes, the draft report will be distributed for public comment, including being posted on this website. The final report will be posted after the study is completed. In spring 2020, ADOT will publish the draft Disparity Study report and its proposed overall DBE goals for public comment.

What can I do to be involved?

Anyone can provide input by attending a public meeting or providing written comments. For more information send an email to [email protected].