In the event your company wishes to submit written comments to the Department regarding their proposed DBE Goal Setting Methodology for 2018 – 2020, APC has prepared the following Background and Talking Points to assist your firm in that regard. Written comments are due on or before July 10, 2017 and must be submitted to:
Department of Transportation of Equal Opportunity
400 North Street, 5th Floor
Harrisburg, PA 17120-0041
Attn: Keyla Evans, Acting Disadvantaged Business Enterprise Section Chief
- PennDOT is obligated by the Federal DBE Regulations to establish contract goals for DBE participation every three years.
- PennDOT has recently published its proposed methodology for setting goals in 2018-2020.
- The goal setting methodology proposed by PennDOT is significantly different than any methodology PennDOT has previously issued.
- The industry has until July 10, 2017 to provide input to PennDOT for their consideration.
- PennDOT’s proposed 2018-2020 methodology can be downloaded here.
- The Federal Regulations require PennDOT to undertake a two-step process to determine its contract goals: (1) develop a ratio of Ready, Willing and Able DBE contractors to ready, willing and able businesses in the Pennsylvania Highway Construction marketplace; and (2) make other adjustments based on such items as the actual volume of work that DBEs have performed in the past several years.
- After PennDOT establishes a goal, it is then required to obtain the maximum portion of that goal through race neutral means (e. means other than contract goals).
- For the first time, PennDOT’s proposed methodology attempts to identify “potential DBEs” by using industry data to theoretically identify DBEs that are ready, willing and able to perform highway work, even though they are not prequalified.
- The data on which PennDOT relied to establish this theoretical market of potential DBEs was derived from a D&B data base combined with the NAICS Codes that various contractors maintain. PennDOT used information to establish the Step one baseline figure.
- PennDOT then relied upon its past achievement of race neutral participation to set its percentage to be achieved through race neutral means versus contract goals.
If you are contacting PennDOT officials to raise concerns about the proposed methodology, some suggested talking points are set forth below. APC is also planning to submit a detailed set of comments to PennDOT by July 7, 2017.
- Prime contractors have a hard time in the current market obtaining DBE subcontractor participation due to the limited number of prequalified DBEs who are ready, willing and able to perform work on PennDOT projects.
- The use of “potential” DBEs in determining the contract goals is improper because those DBEs are not prequalified, are not PennDOT business partners, and may not be PA UCP certified, and thus cannot be considered ready, willing and able DBEs.
- The use of NAICS Codes is effectively useless for any meaningful data relating to the work that contractors and subcontractors actually perform.
- APC’s non-DBE members urge PennDOT to take steps to increase the pool of available DBE subcontractors, but the proper way to accomplish that is through having training programs, making prequalification requirements less burdensome, etc., not through setting unrealistic DBE goals with the hope that more subcontractors may opt to attempt to become prequalified or otherwise attempt to work on Pennsylvania highway projects.