# Presentation: 304139

## California Department of Transportation

**2004 AASHTO National Transportation Civil Rights Conference**
**September 7, 2004**
**San Diego, California**

## Disadvantaged Business Enterprise (DBE) Goal-Setting on Federal Aid Highway Construction Projects

- Workshop presented by:
- Kris Kuhl - P.E.
- Chief, Office of Contract Awards
- Office Engineer

## Workshop Objectives

- Review California DOT’s DBE goal setting
- basic process
- strengths and weaknesses
- Highlight other DOT’s processes
- Determine Best Practices
- Use of Geographical Information Systems

## Goal Setting Process

- Authority to Set Contract Goals
- DBE: 49 Code of Federal Regulations, Part 26.51
- Roles and Responsibilities
- 	From our annual DBE Program plan:
**Office Engineer** performs analysis of the contract items & DBE availability in making a goal recommendation
**Civil Rights** reviews OE’s recommendation and sets the contract goal

## Process Overview

- For projects with _any_ federal aid:
- Office Engineer reviews contract items and
- determines work likely performed by prime
- reviews remaining items for subcontractor work
- applies DBE “match list” against these items
- counts items with significant DBE matches toward the goal
- applies factors to these items
- calculates rough goal by dividing DBE $ by total estimate
- rounds this percentage to the nearest whole percent

## DBE Match List

- To “match” DBEs to an item of work, the DBE must be:
- Certified as a DBE to do the item of work
- “Ready, willing and able” to perform the item of work
- Interested in doing the work in the project area or work statewide
- An item will not count toward the goal if:
- there are a low number of DBE matches (<10)
- the item of work is <$2000 (if not combinable with similar work)

## Factors & Other Considerations

- 100% of the item estimate is counted unless:
- item involves supply of material, apply 12% factor
- item involves trucking, apply 10% factor
- item is for portable CMS, apply 50% factor for rental
- A goal of 0% is possible when:
- the amount of subcontractable work is negligible
- the number of DBE matches is minimal

## Step 1 - Identify Controlling Items

## Step 2- Review Potential Subcontractable Items

## Step 3 - Apply DBE Match List

## Step 4 - Count significantly matched 		items towards goal

## Step 5 - Apply DBE Factors

**Step 5 - Apply DBE Factors**

- EQ. Rental

- Trucking

- Trucking

- Trucking

- Supply

- Supply

- Supply

## Step 6 - Calculate Rough Goal by 		Dividing DBE $ by Total $

## Step 7 - Round to Nearest Whole Percent

**Proposed Goal is 12%**

## Strengths & Weaknesses of the Goal Setting Process

- Strengths:
- useful for most projects
- repeatable
- rational

- Weaknesses:
- relies on DBEs geographic preference
- goal is set well before bid opening and won’t reflect addenda or changes in DBE availability
- assumes DBEs are ready, willing and able
- does not work well when the nature of the work is specialized

## Summary of Project Goal SettingPractices Nationwide

- Caltrans conducted telephone interviews of 48 state DOTs:
- Contractor Prequalification
- Bidder’s Lists
- Level of Annual Goal
- Size of local DBE pool
- Level of work required by the prime
- Race Neutral Measures
- Use of Codes
- Project Goal Setting

## Results of Survey

- Contractor Prequalification:
- 7 states prequalify all contractors
- 29 states prequalify only the primes
- 12 states don’t prequalify contractors (incl. CA)
- Bidder’s List
- 35 states have Bidder’s lists
- 29 states use the list to assist in goal setting
- Annual DBE Goals
-  varies from 5% to 22.3% (Avg. = 9.5%)

## More Results

- Size of DBE Construction Contractor Pool
- 38 states indicated knowledge of DBE pool
- Percentage of Work Required by the Prime
- varies from 25% to 51% (avg. = 41.9%).
- 16 states use the 30 % Federal level
- Race Neutral Measures
- 32 states use some race neutral measures
- 6 states use 100% race neutral measures

## Project Goal Setting Comparison

- Use of Standard Codes:
- 23 use NAICS
- 20 use a state coding method (work categories)
- Project Goal Setting:
- 39 states use the contract items
- 6 states don’t set project goals
- 3 states use fixed goals

## Summary of Best Practices

- Effectiveness in achieving project goals
- Effectiveness in achieving annual goal
- Satisfaction with the process

## Use of Geographical Information Systems

## Geographic Information System

- “Where are DBE’s willing to work?”

**Geographic Information System**

- One method would be to determine DBE home office
- proximity to the project location.

- The following slides illustrate Caltrans’ efforts
- to use GIS to assist in project goal setting

## DBE Stay Local  Vs. Go Statewide

## Need for GIS in Goal Setting

- _ __Problem_:
- About 67% - 73% of DBEs say that they are willing to work statewide, but in reality only 30 % actually work statewide
- Existing DBE match system relies on certification information
- Using 75 mile radius in urban areas and 125 mile radius in rural areas catches about 72% of DBEs

## Urban vs. Rural Area Comparison

**Urban vs. Rural Area Comparison**

## DBE/GIS Process Overview

**DBE/GIS Process Overview**

- Select DBE at some distance (75 Miles for urban  and 125 miles for rural ) of project site
- Match DBEs with license required for each item
- Combine GIS result with DBE match

## Match DBE with License

- Project :

- Items : (from 5 tables, estimate, Item code ,work code,License, Naics)

- GIS Selected DBE : (from 4 tables, Calbe, Calpgm, License, Nacis)

**Match DBE with License**

## GIS Match Results

**GIS Match Results**

## Factor GIS Result into DBE Match

**Factor GIS Result into DBE Match**

## Questions, Comments & Recommendations

- Thank You!