|The attached guidance outlines the process for the Federal Highway
Administration's (FHWA) review and approval of the annual overall disadvantaged business
enterprise (DBE) goal submissions made by state transportation agencies (STA) to implement
their DBE program. The DBE goal submission includes the STA's goal setting methodology and
its race- and gender-neutral (hereafter race-neutral) and race- and gender-conscious
(hereafter race-conscious) projections for meeting the annual goal. If a STA has not
submitted its FY 2006 DBE goal (which was due on August 1st), it should be instructed to
do so as soon as possible and notified that its failure to comply by a specified date may
result in a finding of noncompliance. Except for the STAs that are in the Ninth Circuit
(identified below), no further extensions of the time to submit the FY 2006 DBE goal
should be granted.
As in the past,
DBE goal submissions that meet specified criteria require Headquarters concurrence before
the division administrator gives final approval. The Office of Civil Rights (HCR) in
consultation with the Office of Chief Counsel will conduct the review by Headquarters. We
have added a new class of submissions that require Headquarters review. All submissions
made by states impacted by the Ninth Circuit Court of Appeals decision in Western
States Paving Co. v. State of Washington Dept. of Transportation, 407 F. 3d 983 (9th
Cir. 2005), must be forwarded to HCR for concurrence. The STAs included in this category
are Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, and Washington.
In Western States Paving the Court
found the Washington State DBE program, as implemented, was not narrowly tailored to
accomplish the remedial objectives established by Congress -- and consequently not
constitutional as applied in that state -- because the State failed to produce sufficient
evidence of discrimination or its effects in its transportation contracting industry to
justify the use of race-conscious measures as an element of its program. The Court also
suggested that a narrowly tailored program must structure its use of race-conscious
measures to provide remedial relief to those groups that have actually suffered
US DOT intends to issue specific guidance
on the steps that recipients in the Ninth Circuit must take in response to the Western
States Paving decision. We will disseminate that guidance as soon as the Office of the
General Counsel issues it. In the meantime, division offices that serve STAs in the Ninth
Circuit should take the following steps:
- If the STA goal submission indicates that
race-conscious means will be used to meet the goal, the submission must describe the
evidence of discrimination or its effects that supports the STA's continued use of DBE
contract goals. If warranted by the evidence, the STA may need to request a waiver of the
regulatory prohibition on the use of group specific goals. See 49 C.F.R. §§ 26.45(h) and
26.51(e). If this information is not in the submission, the STA should be advised to
revise its submission to include a description of its evidence and to indicate whether a
waiver is needed to implement goals of limited application.
- If the STA determines that it needs time to
assess whether it has sufficient evidence of discrimination or its effects, the STA must
revise its submission to request approval to implement a wholly race-neutral program while
it undertakes this assessment. This may involve commissioning a disparity or availability
study sufficient to meet the standard set by the Ninth Circuit Court of Appeals. The STA
should be advised that the costs of conducting a disparity or availability study is
reimbursable as an eligible program cost, subject to the applicable cost-sharing formula.
- A STA that moves to a wholly race-neutral
program as a result of the Western States Paving decision must commit to conduct the
required analysis and establish a schedule with milestones for completion to obtain
approval of its DBE goal submission.
Also attached for your use are (1) a sample letter of acknowledgment, (2) a sample approval letter, and (3) a sample decision document. We ask that you use the
samples provided because they have been carefully crafted to document FHWA action. It is
important to note that the sample approval letter requires that you clearly identify the
approved annual overall DBE goal and the race-conscious and race-neutral breakdown. All
approval letters should contain this information.
The attached guidance also provides
instruction to the division offices on the process for approving significant changes to a
STA's US DOT approved DBE program. While STAs are not required to obtain FHWA approval of
regular updates of their DBE programs, significant changes to a STA's program require
prior approval before implementation. To ensure that HCR is apprised of the current status
of each STA's approved DBE program, we ask that each division office take the following
actions upon receipt of this memorandum:
HCR of the most recent FHWA approved change to the STA's DBE program.
your STA's DBE program does not include the policy, processes, and procedures that address
the changes required by the July 16, 2003 rule and US DOT's Qs&As, you must
immediately begin working closely with the STA to ensure that its program is up to date
and complies with existing regulations.
updating process should be finalized by January 31, 2006.
Any questions you may have
about the guidance may be directed to Charles Klemstine, HCR, at 202-366-6753 and/or Jo
Anne Robinson, HCC, at 202-366-1346.
This page last modified on January 19, 2006
Last known link to the original FHWA