Document ID: DOT-OST-2010-0021-0001
Agency: dot
Document Type: Rule
Title: Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs
Posted Date: 2010-02-03T05:00Z

[Federal Register: February 3, 2010 (Volume 75, Number 22)]
[Rules and Regulations]               
[Page 5535-5536]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03fe10-14]                         

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

49 CFR Part 26

[Docket No. OST-2010-0021]
RIN 2105-AD76

 
Participation by Disadvantaged Business Enterprises in Department 
of Transportation Financial Assistance Programs

AGENCY: Office of the Secretary (OST), DOT.

ACTION: Final rule.

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SUMMARY: This final rule changes the Department of Transportation 
(Department) regulation concerning how often recipients of DOT 
financial assistance are required to submit to the appropriate DOT 
operating administration for approval the methodology and process used 
to establish their overall disadvantaged business enterprise (DBE) goal 
for federally funded contracting opportunities. Under the rule, 
recipients will submit overall goals for review every three years, 
rather than annually.

DATES: Effective Date: This rule is effective March 5, 2010.

FOR FURTHER INFORMATION CONTACT: Robert C. Ashby, Deputy Assistant 
General Counsel for Regulation and Enforcement, U.S. Department of 
Transportation, 1200 New Jersey Avenue, SE., Room W94-302, Washington, 
DC 20590, 202 366-9310, Bob.Ashby@dot.gov.

SUPPLEMENTARY INFORMATION: On April 8, 2009, the Department published 
in the Federal Register at 74 FR 15910, a notice of proposed rulemaking 
(NPRM) inviting public comment on a proposal to establish a staggered 
three-year schedule for the submission by DOT recipients subject to the 
regulations at 49 CFR part 26 of their overall goal for DBE 
participation on DOT-assisted contracts. Recipients are currently 
required to make a DBE goal submission each year on August 1st. This 
proposed rule change was modeled largely on the comparable provision in 
the airport concessions DBE rule in Part 23 of this Title, with which 
the Department has had successful experience.
    The Department received approximately 27 comments from state 
departments of transportation, airports, transit authorities, DBEs, 
contractor associations, and transportation consultants. This final 
rule responds to the substantive concerns raised in the comments from 
those who supported or opposed the adoption of the proposed rule.
    The majority of commenters supported the proposed rule change as 
long as recipients are either required to conduct annual reviews to 
account for changes that may warrant a modification of the overall goal 
or are simply allowed to make adjustments to the overall goal during 
the three-year period based on changed circumstances without 
necessarily requiring annual reviews. Some of the circumstances or 
conditions that may indicate the need for an adjustment include, but 
are not limited to, the collection of new data, a significant change in 
the recipient's DOT assisted contracting program (e.g., new contracting 
opportunities presented by the availability of new or different grant 
opportunities), a marked increase or decrease in the availability of 
DBEs in the recipient's contracting market, or a significant change in 
the legal standards governing the DBE program. Some supporters also 
thought it advisable to give recipients the flexibility to request a 
waiver to set their own schedule or to submit an overall goal that 
covers a one-, two-, or three-year period as appropriate due to the 
nature of the recipient's contracting program. The ability to maintain 
the status quo--i.e., set annual overall goals--was an approach 
strongly endorsed by some airports, some representatives of the 
aviation industry, and some representatives of general contractors.
    The commenters opposed to the proposed rule change raised several 
concerns about moving to a three-year cycle: (1) The difficulty in 
estimating a DBE goal beyond one year given the changes in the 
political landscape or changes in the kind of projects that are funded; 
(2) locking in goals for three years undermines the ability to assess 
market conditions and DBE availability; (3) requiring annual reviews 
during the three-year period defeats the purpose of reducing the 
administrative burden associated with the annual goal setting process 
since an annual review will likely result in the need for an adjustment 
and thereby trigger the annual goal setting process; and (4) it fails 
to achieve a level playing field or ensure narrow tailoring.
    Having considered the comments, the Department believes going to a 
system of staggered three-year overall DBE goal submissions would not 
compromise the ability of recipients to implement a narrowly tailored 
program and would enable recipients to improve the data collection, 
analysis, and consultation required to establish an overall goal that 
truly aims to reflect the level of DBE participation one would expect 
absent the effects of discrimination. Since the DBE program rules were 
substantially revised in 1999, generally we have not seen huge 
variances in the annual DBE goal submissions made by recipients over 
the last ten years. Thus, we do not assume that requiring an annual 
review would necessarily lead to annual adjustments resulting from a 
process that mimics the current yearly process. That said, we do not 
think it necessary to mandate annual reviews. Instead, we believe 
recipients or operating administrations should be allowed, based on 
changed circumstances, to initiate mid-course reviews as needed to 
determine if adjustments to the overall goal are warranted. Also, we do 
not think it prudent to allow each recipient to establish a different 
schedule for submission. Such a series of exceptions would likely 
swallow the rule. It also would make it much more difficult for 
operating administrations to manage reviews and oversee compliance. 
However, in those cases where a recipient believes its situation 
differs from other similarly situated recipients, the existing program 
waiver process offers the recipient the opportunity to seek an 
exception. These program waivers, unlike the general program waiver 
provisions of 49 CFR 26.15, could be granted by an operating 
administration and would not have to be approved by the Secretary.
    Under the final rule, each operating administration is required to 
establish a schedule for submissions to be posted on its Web site. The 
schedules are intended to be posted no later than 30 days after the 
effective date of this rule. During the transition to this new system, 
specific notice of the deadline for overall goal submissions and the 
consequences of failing to meet the deadline should be provided to 
recipients. The schedules established by the operating administrations 
should include each year a proportionate or representative number of 
recipients from all regions of the country (e.g., north, south, east, 
and west). During the transition to the new scheduling system, 
recipients should continuing using or operating under the goals last 
approved by the operating administration.

Regulatory Analyses and Notices

Executive Order 12866 and Regulatory Flexibility Act

    The Department has determined that this action is not a significant 
regulatory

[[Page 5536]]

action for purposes of Executive Order 12866 or the Department's 
regulatory policies and procedures. The rule would not impose any costs 
or burdens on grantees or other parties. It would reduce burdens on 
recipients by reducing the frequency of goal submissions to the 
Department. For these reasons, the Department certifies that the rule 
would not have a significant economic impact on a substantial number of 
small entities.

Paperwork Reduction Act

    This rule does not create any information collection requirements 
covered by the Paperwork Reduction Act.

List of Subjects in 49 CFR Part 26

    Administrative practice and procedures, Airports, Civil rights, 
Government contracts, Grant programs--transportation, Minority 
business, Reporting and recordkeeping requirements.

    Issued this 20th day of January 2010, at Washington, DC.
Ray LaHood,
Secretary of Transportation.

0
For the reasons stated in the preamble, the Department amends 49 CFR 
part 26 as follows:

PART 26--PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN 
DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS

0
1. The authority for 49 CFR part 26 continues to read as follows:

    Authority:  23 U.S.C. 324; 42 U.S.C. 2000d, et seq.; 49 U.S.C 
1615, 47107, 47113, 47123; Sec. 1101(b), Pub. L. 105-178, 112 Stat. 
107, 113.

Subpart C--Goals, Good Faith Efforts, and Counting

0
2. Revise Sec.  26.45(e) and (f) to read as follows:

Sec.  26.45  How do recipients set overall goals?

* * * * *
    (e) Once you have determined a percentage figure in accordance with 
paragraphs (c) and (d) of this section, you should express your overall 
goal as follows:
    (1) If you are an FHWA recipient, as a percentage of all Federal-
aid highway funds you will expend in FHWA-assisted contracts in the 
forthcoming three fiscal years.
    (2) If you are an FTA or FAA recipient, as a percentage of all FTA 
or FAA funds (exclusive of FTA funds to be used for the purchase of 
transit vehicles) that you will expend in FTA- or FAA-assisted 
contracts in the three forthcoming fiscal years.
    (3) In appropriate cases, the FHWA, FTA or FAA Administrator may 
permit you to express your overall goal as a percentage of funds for a 
particular grant or project or group of grants and/or projects.
    (f)(1) If you set overall goals on a fiscal year basis, you must 
submit them to the applicable DOT operating administration by August 1 
at three-year intervals, based on a schedule established by the FHWA, 
FTA, or FAA, as applicable, and posted on that agency's Web site. You 
must submit to the operating administration for approval any 
significant adjustment you make to your goal during the three-year 
period based on changed circumstances. The operating administration may 
direct you to undertake a review of your goal if necessary to ensure 
that the goal continues to fit your circumstances appropriately.
    (2) If you are an FHWA, FTA, or FAA recipient and set your overall 
goal on a project or grant basis, you must submit the goal for review 
at a time determined by the FHWA, FTA, or FAA Administrator.
    (3) Timely submission and operating administration approval of your 
overall goal is a condition of eligibility for DOT financial 
assistance.
    (4) If you fail to establish and implement goals as provided in 
this section, you are not in compliance with this part. If you 
establish and implement goals in a way different from that provided in 
this part, you are not in compliance with this part. If you fail to 
comply with this requirement, you are not eligible to receive DOT 
financial assistance.
* * * * *

[FR Doc. 2010-2294 Filed 2-2-10; 8:45 am]
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