do race-neutral measures have a positive effect on … · 2019-12-14 · 1 do race-neutral measures...

Dorace-neutralmeasureshaveapositiveeffectonDisadvantagedBusinessEnterprise(DBE)utilizationinthenumberofBARTfederally

fundedprofessionalservicesagreementsandhastherebeenanincreaseinthenumberofagreementsandtotaldollaramountsreceivedbyDBEs

duringFiscalYears2012-2015?

TheSanFranciscoBayAreaRapidTransitDistrict

SubmittedbyAlmaBasurtoJune3,2016

MinetaTransportationInstituteSanJoseStateUniversity

SanJose,California

ACKNOWLEDGEMENTS Theauthorwishestoexpresshergratitudetothemanypeoplewhoparticipatedinthe

completionofthiscapstonepaper,whichwasahugeundertaking.DeepestgratitudetoThe

SanFranciscoBayAreaRapidTransitDistrictstaff,inparticular,WayneWong,HaydenLee,Jose

RamiroSalazar,TimLohrentz,andCindyChan.Abig“ThankYou”toJaniceSalaisofThe

CaliforniaDepartmentofTransportationandtoalltheownersfromeachprofessionalservices

firmwhovolunteeredandparticipatedbyprovidingtheirvaluablecommentsand

recommendations.Thispaperwouldnothavebeencompletedwithouteveryone’sassistance.

TABLEOFCONTENTS

ACKNOWLEDGEMENTS...........................................................................................................2

LISTOFFIGURES.....................................................................................................................5

LISTOFTABLES.......................................................................................................................6

ACRONYMS............................................................................................................................7

1.EXECUTIVESUMMARY.......................................................................................................8

2.INTRODUCTION.................................................................................................................9ProblemStatement...................................................................................................................................................................9Purpose.......................................................................................................................................................................................10

3.HISTORY..........................................................................................................................11DBEProgram’sRace-NeutralMeasures........................................................................................................................15EffectsofRace-NeutralMeasures....................................................................................................................................16

4.LITERATUREREVIEW........................................................................................................23CaseStudies...............................................................................................................................................................................27

5.RESEARCHMETHODOLOGY..............................................................................................31ResearchQuestions................................................................................................................................................................37

6.FINDINGSANDANALYSIS.................................................................................................44In-PersonInterviews.............................................................................................................................................................44CaltransTelephoneInterview...........................................................................................................................................45TelephoneInterviewsfromOwnersofProfessionalServicesFirms...............................................................45On-LineQuestionnairefromOwnersofProfessionalServicesFirms.............................................................46

7.CONCLUSION&RECOMMENDATIONS.............................................................................50

AppendixA...........................................................................................................................53DisadvantagedBusinessEnterprise(DBE)Criteria................................................................................................53

AppendixB...........................................................................................................................54In-PersonInterviewQuestions.........................................................................................................................................54

AppendixB-1........................................................................................................................55In-PersonInterviewAnswers...........................................................................................................................................55

AppendixC...........................................................................................................................60CaltransTelephoneInterviewQuestions.....................................................................................................................60

AppendixC-1........................................................................................................................61CaltransTelephoneInterviewAnswers........................................................................................................................61

AppendixD...........................................................................................................................64TelephoneInterviewQuestionstoOwnersofProfessionalServicesFirms.................................................64

AppendixD-1........................................................................................................................65

TelephoneInterviewMatrixof.........................................................................................................................................65AnswersfromOwnersofProfessionalServicesFirms..........................................................................................65

AppendixE...........................................................................................................................74On-LineSurvey/Questionnaire.........................................................................................................................................74toOwnersofProfessionalServicesFirms....................................................................................................................74

AppendixE-1........................................................................................................................75MatrixofOn-LineSurvey/QuestionnaireandAnswers.........................................................................................75

AppendixF...........................................................................................................................76Bibliography..............................................................................................................................................................................76

LISTOFFIGURESFigure1:BARTAwards,CommitmentsandPaymentstoDBEsinFY2012-FY2015

Figure2:ProfessionalServicesUtilization

Figure3:ProfessionalServicesAgreementsAwardedinFY2012–FY2015

Figure4:NonDBEandDBEPaymentsduringcalendaryears2012–2015

LISTOFTABLES

Table1:BART’sDBEProgramEffectiveness

Table2:ResearchDesignTaskWorkPlan

Table3:SummaryofResearchQuestionsandMethods

Table4:PrimarySourcesusedforEachMethod

ACRONYMSA&E ArchitectandEngineeringBAC BusinessAdvisoryCouncilBART TheSanFranciscoBayAreaRapidTransitDistrictBARTBoard TheSanFranciscoBayAreaRapidTransitDistrictBoardof

DirectorsBBC BBCResearch&ConsultingCaltrans CaliforniaStateDepartmentofTransportationCaltransSmallBusinessCouncil CouncilCFR CodeofFederalRegulationsCM ConstructionManagementCRA CharlesRiverAssociatesInternationalDISTRICT TheSanFranciscoBayAreaRapidTransitDistrictDBE DisadvantagedBusinessEnterpriseDOT DepartmentofTransportationFTA FederalTransitAdministrationFY FiscalYearGEC GeneralEngineeringConsultantMBE MinorityBusinessEnterpriseMSBEs MicroSmallBusinessEntitiesNDProgram Non-DiscriminationforSubcontractingProgramOBIEE OracleBusinessIntelligenceEnterpriseEditionOCR OfficeofCivilRightsPCJPB PeninsulaCorridorJointPowersBoardSB SmallBusiness(TermusedforNon-FederalProgram)SBBAP SmallBusinessBondingAssistanceProgramSBE SmallBusinessEntity(TermusedforFTAProgram)SBElements SmallBusinessElementsSM&PC SanMateoPeninsulaCorridorUDBE UniformDisadvantagedBusinessEnterpriseUSDOT UnitedStatesDepartmentofTransportationVPT VendorPaymentTrackingSystemVTA SantaClaraValleyTransportationAuthorityWBE Women-OwnedBusinessEnterprise

1.EXECUTIVESUMMARY

AsarecipientoffederalfundsfromtheUnitedStatesDepartmentofTransportation

(USDOT),TheSanFranciscoBayAreaRapidTransitDistrict(“BART”orthe“District”)isrequired

tocomplywiththeFederalTransitAdministration(FTA)regulationsassociatedwith

DisadvantagedBusinessEnterpriseparticipationTitle49CodeFederalRegulations(CFR)Part26

byestablishingandmaintainingtheDistrict’sDisadvantagedBusinessEnterprise(DBE)

Program.1TheDBEProgramassuresthatallfederallyfundedDistrictcontractsare

administeredwithoutdiscriminationonthebasisofrace,color,sexornationalorigin,andthat

DisadvantagedBusinessEnterprises(DBEs)andSmallBusinessEnterprises(SBEs)haveanequal

opportunitytocompeteforandparticipateintheperformanceoffederalcontractsawardedby

theDistrict.2

RevisedinFebruary2012,theDistrict’sDBEProgramcontinuestobeavitaltoolfor

increasingDBEandSBEparticipationinBARTcontracts.TheDBEProgram’sstatementpolicy,

objectives,administration,goals,MarketArea,certificationcriteriaandotherrequisite

provisionsareavailableontheDistrict’swebsiteatwww.bart.gov.

MostDBEfirmsareMinorityBusinessEnterprisesandWomen-OwnedBusiness

Enterprises(M/WBEs).ThereareanumberofM/WBEfirmsthathavegraduatedfromtheDBE

ProgrambecausetheyareeithertoolargetobeDBEsinsalesorareoverthepersonalnet

worthorforonereasonoranotherarenotcertifiedasDBEs.However,referencesdefined

underTitle49CFR,Part26AppendixE“IndividualDeterminationsofSocialandEconomic

Disadvantage”identifyingM/WBEsshouldnotbeconfusedwiththeM/WBEreferencesdefined

intheDistrict’sNon-DiscriminationforSubcontractingProgram(NDProgram).Pleasenotethat

BART’sNDProgramisdesignedtopreventdiscriminationagainstorinfavorofMBEsandWBEs.

Itisnotdesigned(notpartofastrategy)toincreasetheparticipationofMBEsorWBEsdueto

Proposition209restrictions.

AlthoughBARThasusedmanyproactiveapproachestoincreasethepoolofDBEsand

SBsinitsbiddingopportunities,thepurposeofthiscapstonepaperistoidentifyifrace-neutral

measureshavebeeneffectiveinincreasingDBEutilizationinBART’sprofessionalservices

agreementsandtodetermineiftherehasbeenanincreaseinthenumberofagreementsand

totaldollaramounts(i.e.,primeandsubawards)receivedbythisgroupbetweenfiscalyears

(FYs)2012–2015(the“StudyPeriod”).

2.INTRODUCTION

ProblemStatement

Afterfurtherresearch,itwasfoundthatthereisaconsiderablelackofhistoricaldataon

DBEparticipationinBARTcontractsthatshowtheimpactsoftheDistrict’sDBEProgram’s

implementation.TheavailablereportssubmittedtotheFTAandarchiveddata,withinthelast

decade,wereusedtoidentifyanyrace-neutralmeasuresthathavehadapositiveeffectonDBE

utilizationinBART’sprofessionalservicesagreements,andinthenumberofagreementsand

totaldollaramountsreceivedbythisgroupduringtheStudyPeriod.

InFYs2012,2013and2015,BARTdidnotmeetitsTriennialgoalduetoinsufficientDBE

participationandtothevariouschallengesidentifiedatBARToutreachforumsandroundtable

discussionswithprimecontractorsandsubcontractors.Alsoforthisstudy,itwasnecessaryto

identifyanyadditionalfactorsimpactingDBEparticipationandmeasuringtheeffectivenessof

thecurrentrace-neutraleffortsusedforDBEoutreach.

Purpose

Thepurposeofthisreportistounderstandifrace-neutralmeasureshaveincreasedthe

numberandvalueofBARTprofessionalservicesagreementstoDBEsduringtheStudyPeriod.

AlthoughBARThasusedmanyproactiveapproachestoincreasethepoolofDBEsandSBsinits

biddingopportunities,itisnecessarytoidentifywhichmeasureshavebeenthemosteffective

inincreasingDBEutilizationinBART’sprofessionalservicesindustry.Inthispaper,race-neutral

measuresandrace-neutraleffortswillbeusedinterchangeably.

Additionally,theresearchgeneratedforthisstudywillconsistofvaluableinformation

(i.e.,datasources,statisticalanalysis,andrecommendations)thatmaybeusedbyvarious

stakeholders,publicandprivatesectors,SmallBusinesses,andUSDOTrecipientswhomustalso

complywithsimilarfederalregulationsandwhoarehavingdifficultyattainingtheirAnnualDBE

Goaland/orTriennialgoal.3Thesuggestedsourcesinclude,butarenotlimitedto,the

following:

• DocumentReviewandAnalysis;

• SecondarySources:

• BART’sAvailabilityandUtilizationStudyFinalReportdatedApril9,2009;

• BART’sDBEShortfallAnalysisReportsdatedDecember2013&2015;

• BART’sUniformDBESemi-AnnualReportsforfiscalyears2012-2015;

• PublicTransitAgencies’AvailabilityandDisparityStudyReports;

• SurveyData:

• On-linesurvey/questionnairefromownersofprofessionalservicesfirms;and

• PrimaryandTelephoneInterviews.

3.HISTORY

In1964,PresidentLyndonJohnsoncreatedtheUrbanMassTransportation

Administration,whichwasresponsiblewithprovidingfederalassistanceformasstransit

projects.4 Since1964,theFTAhaspartneredwithstateandlocalgovernmentstocreateand

enhancepublictransportationsystems,investingmorethan$10billionannuallytosupportand

expandpublicrail,bus,trolley,ferryandothertransitservices.5 Forhalfacentury,theFTAhas

broadeneditsservicesbyprovidingalternativetransportationoptionsforresidentsinsmall

citiesandruralcommunitiesthatpreviouslylackedtransitandithasmadepublic

transportationaviableoptionthroughouttheUnitedStates.6

In1983CongressauthorizedtheUSDOTtoimplementandestablishthestatuesforthe

DisadvantagedBusinessEnterpriseProgram,anationwidefederally-fundedprogram,that

createsalevelplayingfieldforwhichaDBEorSBEcancompetefairlyonfederallyfunded

agreements,contractsandsubcontracts.7 However,in1989and1995respectively,twoUnited

StatesSupremeCourtdecisions(i.e.,TheCityofRichmondv.J.A.CrosonCo.andAdarand

Constructors,Inc.v.Pena)raisedthestandardbywhichfederalcourtsreviewbothlocaland

federalgovernmentminoritybusinessenterpriseanddisadvantagedbusinessenterprise

contractingprograms.8 Asaresult,race-consciousandrace-neutraleffortsbecameapartof

theDisadvantagedBusinessEnterpriseProgramtoattainDBEparticipationinfederalcontracts.

Thenin1997,Proposition209wasapprovedbythevotersinCaliforniaanditamendedthe

StateConstitutiontoprohibittheState,localgovernments,districts,publicuniversities,

colleges,schools,andothergovernmentalinstitutionsfromdiscriminatingagainstorgiving

preferentialtreatmentonthebasisofrace,sex,color,ethnicity,ornationalorigintoany

individualorgroupinpublicemployment,publiceducation,orpubliccontracting.9 Moreover,

Section(e)inProposition209exemptsactions,whichmustbetakentoestablishormaintain

eligibilityforanyfederalprogram,whereineligibilitywouldresultinalossoffederalfundsto

theState.10

PursuanttotheUSDOT,Title49CFRPart26,recipientsoffederalfinancialassistance

fromUSDOT(“Recipient(s)”)mustcomplywiththeseregulationsandperiodicallysubmit

variousreportstooneofthethreeUSDOToperatingadministrations(i.e.,FederalTransit

Administration,FederalHighwayAdministrationorFederalAviationAdministration).11Asa

Recipient,BARTiscommittedtoexecutingallrequirementsofTitle49CFRPart26by

establishingandmaintainingitsDBEProgramandattainingitsTriennialgoalof23percentfor

DBEparticipation.

Furthermore,theFTArequiresRecipientstomeetthemaximumfeasibleportionoftheir

AnnualandTriennialgoalsbyusingraceneutralmeasurestofacilitateDBEandSBE

participation.12Recipientsareadvisedthatrace-neutralmeasuresshouldaddresstheconcerns

oftheRecipient’sspecificSmallBusinessCommunityandthereisno“onesizefitsall”

solution.13Therefore,Title49CFRPart26requiresRecipientstosetDBEgoalsbasedonthe

availabilityofwilling,ableandqualifiedDBEfirmsandtomeetthemaximumfeasibleportionof

anyspecifiedDBEgoalthroughrace-neutralmeasures.14Also,Recipientsshoulduserace-

neutralmeasuresasmuchaspossibleandtheirgoalmethodologymustclearlyidentifywhich

race-neutraleffortswillbeusedduringorthroughoutthefiscalyear.15

In1983,BARTimplementeditsDisadvantagedBusinessEnterpriseProgram(“DBE

Program”),whichwasmostrecentlyrevisedinFebruary2012.TheDBEProgramwillexpireon

August31,2022;unlesspriortothatdatetheBARTBoardofDirectors(“BARTBoard”)findsit

necessarytooffsettheeffectsofpriordiscriminationintheindustriesrelevanttotheDistrict’s

contractingactivities.16Nonetheless,theDBEProgramcontinuestobeavitaltooltoincrease

DBEandSBEparticipationinBARTcontracts.TheDBEProgram’sstatementpolicy,objectives,

implementation,administration,goals(i.e.,annual,contract-specificandtriennial),

certification,andotherrequisiteprovisionsareavailableontheDistrict’swebsite.AppendixA

definestheFTA’sdefinitionofaDBE,itsaverageannualincome,andtheethnicgroups

consideredsociallyandeconomicallydisadvantaged.

Inearly2013,theSmallBusinessElements(SBElements)asubpartoftheDBEProgram

wasapprovedbytheBARTBoardandincorporatedintoDistrictfederalcontracts.TheDBEand

SBElementsPrograms’overallobjectiveistoassurethatallfederallyfundedDistrictcontracts

andprocurementsareadministeredwithoutdiscriminationonthebasisofrace,color,sexor

nationalorigin,andthatDBEsandSBEshaveanequalopportunitytocompeteforand

participateintheperformanceoffederalcontractsawardedbytheDistrict.17

AccordingtotheDBEProgram,thefollowingDistrictstakeholdersareresponsibleforits

implementation,administrationandsuccess:

• TheBARTBoardisresponsibleforestablishingDBEpolicy;

• TheDistrict’sGeneralManagerisresponsibleforadherencetotheDBEProgramandshe

hastheoverallresponsibilityfordirectingdevelopmentandimplementationofthis

program;

• TheOfficeofCivilRightsDepartmentManagerisdesignatedastheLiaisonOfficer

responsibleforoverseeingtheDBEProgram,recommendingDBEpolicy,developingand

implementingawrittenDBEprogram,andinternalandexternalcommunication

procedures;and

• TheBusinessAdvisoryCouncil(“BAC”),createdin2009,servesasaforumfor

communicationbetweentheSmallBusinesscontractingcommunitiesandtheDistrict.

Amongotherthings,theBACalsomakesgeneralrecommendationsonDBEandSBE

policiesandpracticesthatimpacttheutilizationandparticipationofDBEsandSBEsin

Districtcontracts.TheBACmeetseveryothermonthwithDistrictstafftodiscussand

providevaluablefeedbackonBARTpolicies,programs,strategies,anditpromotesSmall

BusinessparticipationinBART’sconstruction,professionalservices,andprocurement

contracts.

TheOfficeofCivilRights(OCR)isresponsibleformonitoringtheDBEProgramby

promotingandincreasingthepoolofDBEandSBEparticipationinBART’supcomingbidding

opportunities.TheOCRisalsoaccountableforsubmittingvariousreportstotheFTAsuchas

theDistrict’sUniformDBE(UDBE)ReportorSemi-AnnualReport,ShortfallAnalysisReportand

theTriennialReport.Semi-annually,RecipientsarerequiredtosubmitaUDBEReport

describingitsDBEawards,commitmentsandpayments.AShortfallAnalysisReportis

submittediftheawardsandcommitmentsshownontheUDBEReportattheendofanyfiscal

yeararelessthantheoverallgoalapplicabletothatfiscalyear.TheTriennialReportis

comprisedofthefirstandsecondsemi-annualperiodsinthefiscalyear(i.e.,October1st–

September30th).

InFY12theDistrict’sDBEgoalwas22percent,butduringFY13,FY14,andFY15,thegoal

slightlyincreasedto23percentforDBEparticipation.18InFY12,FY13andFY15,BARTdidnot

attainitsDBEgoal,butachieved11.2percent,16.5percentand21.5percentDBEparticipation,

respectively.19Consequently,ithadtosubmittotheFTAaShortfallAnalysisReportjustifying

thelowpercentageofDBEparticipation.20Also,theDistrictproposedseveralcorrectiveactions

(e.g.,LessonsLearned,SmallBusinessOpportunityPlanI,andConstructionManagement

TrainingProgram)toimprovetheimplementationofitsDBEprogram.21Someofthereasons

fortheDBEgoalshortfallcanbeattributedtopastchallenges,whichinclude:1)FTAfundingis

primarilyallocatedforconstructioncontracts,instead,largervolumesofFTAfundingisfor

procurementcontractswhichdonothaveDBEgoals;2)DBEsnothavingthenecessary

resources(i.e.,financing,bonding,andemployees)andcapacitytobidonBARTcontracts;3)

substitutionofDBEfirmsinconstructioncontracts;and4)insufficientDBEworklistedinthe

scopeofworkforconstructioncontractsandprofessionalservicesagreements.22Conversely,

inFY14,BARTmetitsDBEgoalby33.3percentwith$5.6millioninDBEawardsand

commitmentson$16.8millioninFTAawards.23

DBEProgram’sRace-NeutralMeasures

BARTutilizesbothrace-consciousandrace-neutraleffortstoattainDBEparticipation.

Therace-consciousmethodsetsDBEcontractspecificgoalsonconstructionprojects,butnoton

procurementcontractsorprofessionalservicesagreements.24Race-neutraleffortsinclude

utilizingsetasidecontractsattheprimelevelforMicroSmallBusinessEntities(MSBEs),who

arecertifiedbyBARTundertheSBElementsProgram,onselectedsmallconstructioncontracts

andprofessionalservicesagreements.25Whileraceandgenderarenotdecidingfactorsin

professionalservicesagreements,therehasbeenahighlevelofDBEparticipationonthe

professionalservicesconsultantteamsbecauseof:1)theavailabilityofDBEs;2)BART’s

proactiveapproachofconductingoutreachandnetworkingsessions;3)unbundlingofMSBE

contracts;and4)opportunitiesforDBEsandSBEstogainexperienceviaawarded

agreements.26

TheOCRisultimatelyresponsibleforimplementingrace-neutraleffortsinBART’s

constructionandprofessionalservicesagreementswiththegoalofincreasingDBE

participation;therefore,OCRisactivelyassuringthatthesemeasuresareapplied.Construction

includespublicworkprojectsformorethan$1,000anditinvolvesnewconstruction,

remodeling,renovation,maintenance,demolitionandrepairofanypublicstructureorbuilding,

andotherpublicimprovements.27Professionalservicesincludearchitecture,engineering,and

otherprofessionalservicesofanarchitecturalandengineeringnature;consultingandpersonal,

professional,andtechnicalservices;researchplanning;development;surveyingandmapping;

constructionmanagement;andcomprehensiveplanning.28Thedifferencebetweenthepublic

workscontractsandtheprofessionalservicesagreementsisthatthelatterisnotawarded

basedonthelowestbidorthepriceproposalsubmitted,ratherconsultantsareselectedby

evaluationpointsaccordingtoafirm’squalificationsandtheprojectteam’sinterview.

EffectsofRace-NeutralMeasures

TheDistricthasalonghistoryofworkingwithandsupportingtheSmallBusiness

CommunityintheSanFranciscoBayAreaincludingDBEswhohaveworkedforBARTasprime

contractors/consultantsorassubcontractors/subconsultantsgainingvaluableexperienceon

BARTprojects.29FromJanuary1,2010throughDecember31,2014,BARTawarded$1.75Bin

contractingofwhich$272MwastoDBEs.30Thus,theDistrictcontinuestoincreasethe

availabilityofDBEsandSBEsbyimplementinginitiativesandexecutingrace-neutraleffortslike:

1)certification;2)outreachandmatchmakingmeetings;3)MSBEset-asidecontracts;4)

unbundlingofcontracts;5)bondingassistance;6)SmallBusinesstechnicalandsupportive

assistance;and7)issuanceofprofessionalservicesagreements.31

• Certification.BARTisoneofninepublicagenciesauthorizedtoprocessDBEcertifications

andunderitsSBElementsProgram,ithastheauthoritytocertifyfirmsasaSmallBusiness

Entity(SBE)and/oranMSBE.Currently,morethan800DBEsarecertifiedbyBARTandare

listedintheCaliforniaUnifiedCertificationProgramdatabase.32Approximately260firms

havebeencertifiedasanSBEand/oranMSBEsincetheSBElementsProgram’s

implementationinFebruary9,2012.33Certifiedfirmsbenefitby:1)beingrecognizedby

800localagenciesinCaliforniaandotherstatesandprivatecompanies;2)expanding

opportunitiestoparticipateinfederally-fundedprojects;and3)beingaccessibletoprime

contractorsneedingtofulfillDBEparticipationgoalrequirements.34

• OutreachandMatchmaking/NetworkingSessions.BARThasparticipatedinmorethan

seventeen(17)annualoutreachmeetingswithpublicortransitagencies,whichhavebeen

veryeffectiveinincreasingDBEparticipationonBARTcontracts.35Thesemeetingshave

providedtheSmallBusinessCommunitytheopportunitytoobtainthenecessary

informationonhowtodobusinesswithBART,andhowtoaccessBARTprojectupdatesand

futurebiddingopportunities.Thematchmaking/networkingsessionsarecrucialforprime

contractors/consultantsandsubcontractors/subconsultantstoinitiateandcontinuea

workingrelationshipbetweeneachothersinceitallowsthemanopportunitytoindividually

meetfor15minutestodiscusstheirexperienceandcapacityinperformingthecontract’s

oragreement’sscopeofwork.

• MSBEset-asides.SincetheSBElementswasincorporatedinBARTcontractsinearly2013,

BARThasawardedeight(8)MSBEset-asidecontractsattheprimelevelforcertifiedMSBEs.

36ThisallowsSBEswhoareusuallysubcontractorsinlargeprojectstobidasprime

contractorsonfederally-fundedconstructionandprofessionalserviceprojectsofasmall

size(i.e.,constructionprojectsupto$2millionandprofessionalservicesupto$3million

dollars).37

• Unbundling.Thisisaninitiativethatallowstheunbundlingoflargeconstructioncontracts

andprofessionalservicesagreementsintosmallerprojectsbasedonsixdifferentcriteria

identifiedinaproject’searlyphase.38UnbundlingallowsSBstheopportunitytobidon

thesecontracts,ratherthanthesamelargecompaniesawardedBARTcontracts.

• BondingAssistance.In2013,BART’sSmallBusinessBondingAssistanceProgram(SBBAP)

wasimplemented,butithashadlimitedsuccessinexpandingthepoolofavailableDBEs

andMSBEs.39TheSBBAPassistssmallbusinessesobtainbid,paymentandperformance

bondsbyprovidingone-on-oneassessments,consultationandconnectiontoteam

professionals.40

• SmallBusinessAssistance.BARThasprovidedSmallBusinessAssistanceonitsEarthquake

SafetyProgramandfortheWarmSpringsProject.TheDistrictwideSmallBusiness

SupportiveServicesRequestforProposal’sduedatewasonFebruary23,2016;however,it

wascancelledinmid-May2016,anditwillbere-issuedandawardedbyearlyOctober2016.

Theselectedconsultantanditsprojectteamwillprovidepreandpostawardworkshopsto

improveSmallBusinessskillsintheareasofconstructionmanagement,bidestimating,

invoicing,schedulingandotherrelatedtasks.41

• ProfessionalServices.Whileraceandgenderarenotdecidingfactors,therehasbeenahigh

levelofDBEparticipationontheprofessionalservicesconsultantteamsduetothe

availabilityofSBEsandBART’sproactiveapproaches.42Therace-neutralprocessfor

selectingprofessionalservicesconsultantsandsubconsultantshasbeenthemostsuccessful

ofBART’smeasures.43

MasonTillmanAssociates,Ltd.(“MasonTillman”)wascommissionedbyBARTto

conductanAvailabilityandUtilizationStudy(“AvailabilityStudy”),fortheperiodbetween

2002–2006,todeterminetheeffectivenessofBART’sDBEProgramintheareasofconstruction,

procurement,andprofessionalservices.44ThepurposeoftheAvailabilityStudywasto

determineifunderutilizationofethnicgroupsexistedandtodetermineDBEcapacityas

measuredbyparticipationinBARTcontractsinprioryearsandanystatisticallysignificant

underutilizationbyethnicgroupandgender.45Additionally,theAvailabilityStudycontains

statisticalinformationonDistrictawards,commitments,andpaymentsduringFY2002–

FY2006.AlthoughBARTarchivesrevealedthatcomprehensivedataandrecordshadnotbeen

maintainedforthisperiod,theAvailabilityStudywascompletedin2009aftertherace-neutral

measureswereintegratedinallfederal,stateandlocalagencies’DBEProgram.46However,

accordingtoMasonTillman,staff’scooperationandpaymentrecordswerethemostreliable

sourcestoretrieveavailabledataandthemostaccuratedepictionofBART’sexpenditures

duringtheperiodofFY2002-FY2006.47PaymentrecordsprovidedevidenceofM/WBE

utilizationinsubcontractingcomparedtotheirrateofavailabilityinBART’sMarketArea,which

consistsofAlameda,ContraCosta,SanFranciscoandSanMateoCountiesandinthenear

futureSantaClaraCountywillbeincluded.48Also,accordingtoMasonTillman,BART

documents(i.e.,reportsandrecords)werealsoessentialinprovidingcomprehensive

backgroundinformationontherace-neutralmeasuresandtheirimpactonDBEs.Sincethe

AvailabilityStudy’scompletionnootherstudyreportshavebeenconducteduntilDecember

2015whenBARThiredtheservicesofMiller3Consulting,Inc.tocompleteanewdisparity

studyreport,whichistargetedforBARTBoardapprovalinOctober2016.Thenewdisparity

studywilldetermineifBARThasengagedinpastoriscurrentlyusingexclusionarypracticesin

solicitationofcontractawardstoDBEs.49

Table1containsstatisticaldataderivedfromtheUDBEReportsillustratingthe

effectivenessoftheDBEPrograminBARTawards,commitments,andpaymentstoDBEfirmsin

theconstruction,procurementandprofessionalservicesareasduringFY12–FY15.

Table1–BART’sDBEProgramEffectivenessFY2012–FY2015

FY DBEGoalTotalFTA

Awards

TotaltoFTADBEAwards

&Commitment

Participation

2012 22percent $6.9million $773,728 11.2percent

2013 23percent $26million $4.3million 16.5percent

2014 23percent $16.8million $5.6million 33.3percent

2015 23percent $72.8million $15.7million 21.5percent

Asillustratedabove,duringtheStudyPeriod,theDBEgoalslightlyincreasedbyone

percentfrom22to23percent.TheFTAcontractawardsandcommitmentsforeachfiscalyear

significantlyfluctuatedaswellastheDBEparticipationforeachyear.Thelowpercentageof

DBEparticipationcanbeattributedtothefactthattherewerefewornoFTAcontracts

awardedandcommittedtoDBEprimesduringFY12–FY13.Also,inFY12,FY13andFY15,BART

fellshortofattainingitsDBEgoalby11.8percent,6.5percentand1.5percent;however,in

FY14BARTdidexceptionallywellinexceedingtheDBEgoalby10.3percent.

Figure1belowillustratesthatduringFY12andFY15therewasasignificantlarge

amountofFTAAwardsandCommitmentstoDBEfirmsintheconstruction,procurementand

professionalservicesarea,butfromFY13andonthetotalFTAAwardsbegantodecrease;

however,theDBEparticipationcontinuedtoincreaseasofFY12.Thereasonsforthistrend

maybeduetothesubstantialnumberofprofessionalservicesagreementsbeingon-calland

on-going,anditbeingextremelydifficulttogaugehowwelleachDBEwasbeingutilizeduntil

thecontractswerecompleted.Consequently,inFY14manyprofessionalservicesagreements

werecompletedandthatmaybereasonforthesignificantDBEparticipationattainmentof97.2

percent.

Severalreason(s)whyBARTdidnotattainitsDBEgoalinFY12,FY13andFY15was

becausefewornoFTAcontractswereawarded,committed,andpaidtoDBEprimesand

subcontractors/subconsultants.Also,itcanbeattributedtothefollowingchallengesidentified

intheAvailabilityStudyandatvariousBARToutreachforums,whichincluded,butarenot

limitedto:

1) Difficultybreakingintothecontractingcommunity;

2) “GoodOldBoys”Network;

2012 2013 2014 2015TotaltoFTADBEAwards&

Commitments $773,728 $4,300,000 $5,600,000 $15,700,000

TotalFTAAwards $6,900,000 $26,000,000 $16,800,000 $15,700,000DBEParticipation 11.2% 16.5% 33.3% 21.5%

Millions

Figure1-BARTAwards,CommitmentsandPaymentstoDBEsFYs2012-2015

DBEPercentages

3) FTAfundingisnotsufficientlyallocatedforconstructioncontractsinsteadalarger

volumeofprocurementcontractsarefederallyfunded;

4) InsufficientDBEworkintheconstructioncontracts’andprofessionalservices

agreements’scopeofwork.

5) DBEsnothavingtheresources(i.e.,financially,bonding,andemployees)and

capacitytobidonBARTcontracts;

6) SubstitutionofDBEfirmsinconstructioncontracts;

7) Notfullyutilizingtheprofessionalservicesfirmslistedonthedesignationof

subconsultantsformattimeofbid;

8) Existingworkingrelationshipsbetweenprimecontractorsandsubcontractors.

ManySmallBusinessownerscomplaineditwasdifficulttobreakintothecontracting

communitybecausetheywereexcludedfromthebusinessnetworkswithprimecontractors

andthedevelopmentofpossiblesubcontractingopportunitieswasminimal.50 SBsconsidered

the“GoodOldBoys”Networkabarrierforseekingpublicsectorworkbecausealotofpublic

agenciespreferredworkingwiththesamecontractorsduetoexistingworkingrelationships.51

AnotherbarrieristhatBART’sFTAfundingisusedonnumerousprocurementcontractsrather

thanconstructioncontracts,whichhavecontractspecificgoalsthatcanbeappliedtothe

District’soverallgoal.52SBswereconcernedthatthescopeofworkinfederalconstruction

contractsdidnothaveenoughDBEworkandasaresultDBEparticipationwasmarginal.53A

criticalbarrierformanyDBEsandSBshasbeentheinabilitytosecurefinancingandobtain

bondingpriortobiddingonBARTcontractsresultinginlargerfirmsbiddingonthese

contracts.54TheSBsthathavebeenawardedBARTcontractshavemoreworkthantheycan

handleandtheyareconstantlyfacedwiththelackofresources(i.e.,capital,financing,and

employees)tocompletetheseprojects.55Also,whenaconstructioncontracthasbeen

awarded,thereissubstitutionofDBEfirmsbynon-DBEswithoutBART’sapprovalandthe

contractspecificgoalsetisnotattained.56Anotherbarrieristhatmanyprofessionalservices

firmsarelistedinserviceagreements,butinrealitythesefirmsarenotoftenusedbecause:1)

contractstendtobeforalongerperiodoftimeandon-call;2)theprimeconsultantself

performsthework;and3)andtheworkexpectedtobeperformedbythesubconsultantsisnot

requiredthatoften.57Andthelongtermworkingrelationshipsbetweenprimeconsultantsand

subconsultantshavereducedtheopportunitiesandparticipationofnewand/orexistingDBE

firms.58

4.LITERATUREREVIEW

Thefollowingreviewreflectsacomprehensiveanalysisofrelevantliteraturepertaining

totheproposedresearchtopic“Dorace-neutralmeasureshaveapositiveeffectonDBE

utilizationinthenumberofBARTfederallyfundedprofessionalservicesagreementsandhas

therebeenanincreaseinthenumberofagreementsandtotaldollaramountsreceivedby

DBEs?Moreover,thisresearchprojecthighlightscasestudiesofastateandtwolocalpublic

transitagencies’activitiesthatinclude:1)DBEutilizationinfederallyfundedprofessional

servicesagreements;2)totalcontractdollarsawardedunderprofessionalservicesagreements;

3)challengesencounteredbyDBEs;and4)therecommendedrace-neutralefforts.The

researchconsistedofquantitativedataretrievedfromavailabilityanddisparityreports,and

statisticalanalysiswithinthelastdecade.

In1989and1995respectively,twolandmarkUnitedStatesSupremeCourtdecisions

(i.e,TheCityofRichmondv.J.A.CrosonCo.andAdarandConstructors,Inc.v.Pena)raisedthe

standardbywhichfederalcourtsreviewedbothlocalandfederalgovernmentminority

businessenterpriseanddisadvantagedbusinessenterprisecontractingprograms.59IntheCity

ofRichmondv.J.A.CrosonCo.(1989),thegeneralissuebeforetheSupremeCourtwaswhether

theuseofrace-consciousclassificationstoovercometheeffectsofpastdiscriminationonthe

opportunitiesavailabletomembersofminoritygroupsviolatesthefourteenthamendment’s

guaranteeofequaltreatmenttoallcitizens.60Morespecifically,theissuewaswhetherthe

minorityset-asideprovisionoftheRichmondCityordinanceviolatedtheequalprotection

clauseoftheFourteenthAmendmentoftheUnitedStatesConstitution.61AlthoughtheCityof

Richmondprevailed,manyyearsthereafter,significantappealsagainsttheSupremeCourt’s

decisionwereoverruled.62

Furthermore,inAdarandConstructorsInc.v.Pena(1995),Adarandchallengedthe

USDOT’sDBEProgram.63TheSupremeCourtfoundacompellinginterestfortheDBEProgram

andheldthatallgovernmentalactionbasedonraceshouldbesubjecttodetailedjudicial

scrutinytoensurethatthepersonalrighttoequalprotectionhasnotbeeninfringedandin

ordertonotviolatetheConstitution,theremustbeacompellinggovernmentinterest.64In

response,theUSDOTamendeditsDBEregulationsin1999toincludegoals,whichcouldbemet

byrace-neutralandrace-specificmeans.65Somejurisdictions,attemptingtocomplywiththe

rulebutfearinglitigation,hadrespondedbyeliminatingtheirrace-consciousDBEgoalsand

replacingthemwithrace-neutralgoals.66

AnotherleadingcasethataffectedtheDBEregulationswasWesternStatesPavingv.

WashingtonStateDOT(2005),inwhichtheNinthCircuitheldthatraceandgenderconscious

contractingprogramsrequiredbytheUSDOTmustbenarrowlytailoredtoevidenceraceand

genderdiscriminationnotonlyonthenationallevel,astheytraditionallyhavebeen,butalsoin

thegeographicregionoftheagenciesreceivingUSDOTfunding.67

Accordingly,MinorityBusinessEnterprise(MBE)Set-AsideProgramsproliferated

nationwidetoincludesome36statesand190localitiesbythelate1980s.68Intotal,thefederal

governmentreported$4.4billionincontractawardstominorityanddisadvantagedfirmsin

FiscalYear1986.69Thepurposeoftheseset-asideprogramswastodevelopminority

enterprise,countertheeffectsofpastdiscrimination,andreducethehighunemploymentrates

amongurbanminoritiesduringthe1980s.70MBEset-asidesrepresentedamulti-billiondollar

annualgovernmentalexpenditureandwereverycontroversialbothpolitically(e.g.,Proposition

209inCalifornia)andjudicially(e.g.,CityofRichmondvs.J.A.Crosonandthe1995Adarand

Constructors,Inc.v.Penã).71Intheirstudyoffederalandstatetransportationcontracting,

BlanchflowerandWainwrightfoundthatset-asideprogramsincreasedthevalueofcontracts

awardedtominorityownedbusinesses.72Althoughtherehasbeensignificantcontroversyand

fundingspentonMBESet-AsideProgramslittleisknownabouttheiractualeffectivenessand

onlyahandfulofstudieshaveattemptedtoanalyzewhethertheseprogramshavemettheir

goals.73

AsaresultofthetwolandmarkSupremeDecisionsmentionedearlier,theCourts

requiredthatpublicagenciesmetarigoroussetofstandardswhenadoptingaminority

preferencecontractingprogram.74Hence,aftertheproliferationoftheMBESet-Aside

Programsinthelate1980s,manypublicagencies,especiallyatthelocallevel,werenot

preparedtoaddressthedatarequirementsdemandedbytheseprograms.75Insupportofthe

constitutionalityofMBEPrograms,theCourtsnotedthat“wherethereisasignificantstatistical

disparitybetweenthenumberofqualifiedminoritycontractorswillingandabletoperforma

particularserviceandthenumberofsuchcontractorsactuallyengagedbylocalityorthe

locality’sprimecontractors,aninferenceofdiscriminatoryexclusioncouldarise.”76This

statementspawnedamarketforconsultantstoassistwiththedocumentationofminority

contractoravailabilitycomparedwiththegovernmentagency’spatternsinawardingcontracts

tominoritybusinesses.77Asaresult,disparitystudiesorstatisticalanalyses,combinedwith

anecdotalandotherevidenceofdiscrimination,havebeenusedalmostuniversallyasthelegal

supportforminoritycontractingprogramsatthestateandlocallevel.78However,thelegal

justificationfortheprogramsfocusesondata.79

SeekingevidenceofcurrentandpastdiscriminationtohelpjustifyMBEPrograms,a

numberofjurisdictionshiredoutsideexpertstoanalyzelocalandregionaldisparitiesinthe

awardingofgovernmentcontracts.80Additionalevidenceonthe“first-stage”relationship

betweenset-asideprogramsandcontractawardsisprovidedinarecentreviewof58disparity

studiesconductedinresponsetotheRichmondv.J.A.CrosonCo.decisionbytheUrban

Institute.81Thestudyfindsevidenceofgreaterdisparityincontractawardsrelativeto

predictedlevelsinjurisdictionswithoutaffirmativeactionprograms,suggestingthatsuch

programspositivelyaffecttheamountofgovernmentcontractsreceivedbyminority-owned

firms.82However,opponentssuchasDr.GeorgeR.LaNoue,professorintheUniversityof

Maryland,BaltimoreCounty,assertsthatdisparitystudies:(1)arebasedonobsoleteor

incompletedata;(2)reportresultsinwaysthatexaggeratedisparities;(3)failtotestfor

nondiscriminatoryexplanationsforthedifferences;and(4)makefindingsofdiscrimination

withoutidentifyinganyspecificinstancesorgeneralsourcesofbiasedbehavior.83

TheMBESet-AsideProgram’smainpolicygoalwastoovercomethecontinuingeffects

ofpastdiscriminationbyincreasingtheshareofcontractsawardedtoM/WBEs.84Therefore,in

ordertodocumenttheexistenceandextentofthoseeffects,the“disparitystudy”wasa

mechanismdevelopedtoevaluatewhetheraparticularjurisdictionhadadocumentable

patternofunderutilizingminoritycontractors,andifso,whatlevelofeffortisjustifiedto

remedytheimbalance.85Itwasalsousedtodeterminewhetherorhowmuchoftheoverall

annualDBEgoalcanbeachievedthroughrace-and-genderneutralmeasures.86

Consequently,theCaliforniaStateDepartmentofTransportationsetsDBEgoalsbased

ondemonstrableevidenceoftheavailabilityof“ready,willingandable”DBEs.87Also,theFTA

regulationsstatethatadisparitystudycanbeusedtodemonstrateavailability,butdoesnot

requireitsuse.88However,arulingintheNinthCircuitCourtofAppealsmadetheuseofavalid

disparitystudyalegalrequirementtojustifyrace-consciouselementsofaUSDOTDBEprogram

inresponsetoconstitutionalchallenges.89

CaseStudies

Althoughacademicliteratureincludedmanycasestudiesonpublictransitagencies’DBE

participationintheprofessionalservicesindustry,thefollowingdescribestheactivitiesofa

stateandtwopublictransitagencieslocatedintheSanFranciscoBayArea.Thesecasestudies

wereusedtoidentifyanysimilaritieswithBART’sDBEutilization,challengesencounteredby

DBEfirms,andrace-neutraleffortsusedbytheDistrict.Theactivitiesoriginatedfromeach

agency’sAvailabilityandDisparityStudyReportsandincluded,butwerenotlimitedtothe:1)

utilizationandtotalcontractdollarsawardedtoDBEsinfederally-fundedprofessionalservices

agreements;2)challengesencounteredbyDBEs;and3)recommendedrace-neutralefforts.

OnJune29,2007,BBCResearch&Consulting(BBC)fromDenverCOconductedan

AvailabilityandDisparityStudy,fortheperiodof2002-2006,toassisttheStateofCalifornia

DepartmentofTransportation(Caltrans)intheimplementationofitsDBEProgram.90BBC

examinedthetransportationconstructionandengineeringindustryinCaliforniaandrelated

contractsawardedbyCaltransorwithfundsadministeredbyCaltrans.91Thisstudyconcluded

thattheCaliforniamarketplaceindicated:1)barrierstoentryforDBEsintotheCalifornia

constructionandengineeringindustries;2)lowratesofbusinessownershipforcertaingroups

workingintheindustries;3)lowerbusinessearningsforDBEfirms,and4)otherbarrierssuchas

accesstocapital.Also,itwasreportedthatCaltransfavoredlargeengineeringfirmswith

substantialCaltransexperienceforitsengineeringwork.

Duringthisperiod,437federally-fundedengineeringcontractswereawardedtoDBEsat

anestimateddollaramountof$239,072ofwhichMBEsreceived$213,803andWBEsreceived

$25,269,respectively.92BBCgroupedminorityfemale-ownedfirmswiththerelevantminority

grouphenceWBEsonlyrepresentedwhitewomen-ownedfirms.93Also,someFTArace-neutral

measureswereinplaceinsomedistrictsorregionsofthestate,butnotinothers.94

Consequently,Caltrans’AvailabilityandDisparityStudyReport,basedonextensiveinputfrom

DBEs,recommendedthefollowingmeasures:1)theadvertisementofsmallercontracts;2)

betteroutreachandcommunication;3)additionaltechnicalassistancetoSBsandDBEs;4)

redesigningcontractorandconsultantselectionpracticestoprovidemoreopportunitiesforSBs

seekingconstructionandengineeringprimecontracts;5)surveybondingprograms;and6)

othersupportingandtechnicalassistancetoSBsandDBEs.95Thesefindingswerebasedon:1)

morethan10,000constructionandengineeringcontractsforbothCaltransandlocalagencies;

2)interviewsfrommorethan18,000Californiabusinessestablishments;3)in-depthinterviews

withnearly100firmownersandtradeassociationrepresentatives;and4)testimonyfrom

publichearingsheldacrossthestate.96

In2007and2008,theCharlesRiverAssociatesInternational(CRAInternational),a

consultingfirmfromBoston,MA,wascommissionedbytwolocalSanFranciscoBayAreapublic

transitagenciestoprepareanavailabilitystudytoanalyzetheiruseofM/WBEfirmsontheir

construction,professionalservices,andprocurementcontracts.97Themethodological

approaches(i.e.,surveys,telephoneinterviews,andreviewofanecdotalevidence)usedbyCRA

appearedtobesimilarinthesetwocasestudies.

OnDecember14,2007,CRAInternationalcompletedtheSantaClaraValley

TransportationAuthority(VTA)AvailabilityandUtilizationReport.98Thisreportshowedthat

during2001-2006,theutilizationofMBEsandWBEsinfederally-fundedprofessionalservices

agreementswas25.1percentand5.7percentrespectively.Thecontractdollarsawardedwere

$112millionforMBEsand$6.8millionforWBEs.99CRAInternational’sanalysisconcludedthat

M/WBEfirmsreportedseveralimpediments(i.e.,projectsweretoolarge,primecontractors

werenotgivenenoughtimetobid,thehighcostofsuppliesormaterials,etc..)tocontracting

thatwerenearlythreetimesandtwiceasoftenaswhitemale-ownedfirms.100Toremedy

thesechallenges,someoftherace-neutralmeasuresproposedwere:1)changestothevendor

selectionprocesstoreducetheweightgiventopriorexperience;2)improveeducationtoDBE

firmsregardingaccesstocapital;and3)effortstoincubatenewfirmsthroughmentor-protégé,

jointventure,andsimilarprograms.101Thesefindingswerebasedonatelephonesurveyof626

constructionandprofessionalservicesfirmsandinterviewswithasubsetofsurveyedfirms

operatingwithintheSanJose-SanFrancisco-OaklandCombinedStatisticalArea,whichincluded

countiessuchas:Alameda,ContraCosta,Marin,SanFrancisco,SanMateo,SantaClara,Santa

Cruz,Sonoma,Napa,SanBenitoandSolano.102Additionally,thesurveysampleincludedfirms

thathadbidonVTAcontractsaswellasthosethathadnotandfirmsownedbyallminorityand

gendergroupsconsideredintheavailabilitystudy.103

Subsequently,onApril14,2008,CRAInternationalalsopreparedanAvailabilityand

UtilizationReportfortheSanMateoCountyTransitDistrictandthePeninsulaCorridorJoint

PowersBoard(PCJPB)(collectively“SM&PC”).104Thisreportshowedthatduring2002,the

utilizationofMBEsandWBEsinfederally-fundedprofessionalservicesagreementswas43.9

percentand27.7percent,respectively.Andthecontractdollarsawardedwere$6.8millionfor

MBEsand$30millionforWBEs.105SomeoftheimpedimentsreportedbyM/WBEswerethat

the:1)projectsweretoolarge;2)primecontractorsdidnotgiveenoughtimetobid;3)bidor

proposalcostswereamongotherconcerns.106Inthisstudythecriticalobstacleidentified

differedamongtheMBEsandWBEsinsteadof“notbeingabletogetsufficientsourcesof

funding”themainissuewasthatprojectsweretoolarge.107However,thesegroupsagreed

thatbidorproposalcostswereinsignificantcomparedtootherreportedimpediments.108

Consequently,therace-neutralmeasuresproposedwere:1)reducingthesizeofprime

contracts;2)changingthevendorselectionprocesstoreducetheweightgiventoprior

experience;3)improvededucationtoDBEfirmsregardingaccesstocapital;and4)effortsto

incubatenewfirmsthroughmentor-protégé,jointventure,andsimilarprograms.109These

findingswerebasedonatelephonesurveyof594constructionandprofessionalservicesfirms

operatingintheSanFranciscoCombinedStatisticalArea,whichincludedthefollowing:

Alameda,ContraCosta,Marin,SanFrancisco,SanMateo,SantaClara,SantaCruz,Sonoma,

Napa,SanBenitoandSolano.110Also,thesurveysampleincludedfirmsthathadbidon

SamTrans-PCJPBcontractsaswellasthosethathadnotandfirmsownedbyallminorityand

gendergroupswereconsideredinthisstudy.111

AccordingtoBBCandCRAInternational,anecdotalevidenceandqualitativeinformation

werethemostreliableandaccuratesourcestoretrieveavailabledataanddepictexpenditures

fromCaltrans,VTA,andSM&PC.Also,thesemethodologicalstrengthswerepivotalin

describingtherace-neutraleffortsandtheirimpactonDBEparticipationinstateandlocal

publiccontracting.

Conversely,themethodologicalweaknessesinthesecasestudiesincludedobsoleteor

incompletedataforDBEutilizationintheprofessionalservicesarea.CaltransAvailabilityand

DisparityStudydifferedfromthatofVTA’sandSM&PC’sbecause:1)Caltransdatasetswere

muchlarger;2)testimonialsfrompublichearingswereused;3)thelackofsurveysconducted;

4)Caltrans’WBEdefinitiondifferedfromVTA’sandSM&PC’s;and5)mostimportantlyboth,

VTAandSM&PCDisparityStudieshadnotyetbeenconductedtodemonstrateiftherewere

anydisparitiesbetweenDBEutilizationandavailability.112

Asdescribedabove,theAvailabilityandDisparityStudiesforCaltrans,VTA,andSM&PC

werenotbasedonastandardizedprocess,butratherutilizedvariousmethodologytools,data,

andresourcestocollecttherequiredinformationandcompletethesereports.However,

similartoBART’sAvailabilityandDisparityStudyanecdotalevidenceandqualitative

informationwerethemostreliableandaccuratesourcestoretrieveavailabledataanddepict

eachagency’sexpenditures.

5.RESEARCHMETHODOLOGY

Thisreport’sgeneraltopicandresearchquestionswereansweredthroughextensive

qualitativeandquantitativedatacollectedbyvariousmethods.Dataanalysiswascomprisedof

information,techniquesandsourcesthatincluded:1)documentreviewandanalysis;2)in-

personinterviews;3)telephoneinterviews;and4)cross-sectionalon-linesurveydata.Byusing

thesemethods,amoreconclusiveoutcomedeterminedwhetherrace-neutraleffortshavehad

apositiveeffectonDBEparticipationinBART’sfederallyfundedprofessionalservices

agreementsandiftherewasanincreaseinthetotalnumberofcontractsanddollaramounts

receivedbyDBEs.TheresultswereanalyzedduringtheStudyPeriodtoidentifytrendsthat

showedanysuccessfulorunsuccessfulmeasures.Theproposedmethodologyandspecific

stepsusedtoimplementthisresearchdesignwillbeexplainedinthefollowingsections.

Duetothelackofcomprehensivedata,BART’savailabledatasourcesfromearly2000to

thepresentwereusedtocompletethisresearchdesign.Accesstosecondarydata(i.e.,

electronicandhardcopy)wasdirectlyobtainedfromBART’sOCRdepartment,whichincludes:

1)theAvailabilityStudyReportdatedApril2009;2)Semi-AnnualReportsorUniformReportsof

DBECommitments,AwardsandPaymentsfromFY12–FY15;3)DBEGoalAccountability

ReportsforFY12–FY13;4)DBEShortfallAnalysisReportsforFY13andFY15,and5)OBIEE

SystemReports,fromBART’sInformationTechnologydepartment,forcalendaryears2012-

2015.ThepurposeoftheAvailabilityStudywastodetermineifunderutilizationofethnic

groupsexistedandtodetermineDBEcapacityasmeasuredbyparticipationinBARTcontracts

inprioryearsandanystatisticallysignificantunderutilizationbyethnicgroupsandgender.113

AsaRecipient,theDistrictiscommittedtoexecutingallrequirementsofTitle49CFRPart26by

establishingandmaintainingitsDBEProgramandattainingitsTriennialgoalof23percentfor

DBEparticipation.114Specifically,Title49CFRPart26.47requiresBARTtosubmitvarious

reportsbasedonitsAnnualandTriennialgoalattainment.115Thisinformationisusedto

monitorDBEparticipationintheDistrict’sfederalconstruction,procurementandprofessional

servicesagreements.

Duetotimeconstraintsandlimitedresources,threepublicemployeesfromalocaland

stateagencyparticipatedinpersonalandtelephoneinterviews.Theseindividualshave

extensiveknowledgeintheDBEareaandtheywereveryhelpfulinprovidingtheanswerstothe

questionsdescribedinAppendicesBandC.

Althoughin-personinterviewsarecostlymodesofadministration,theyyieldthehighest

cooperationandlowestrefusalrates.116Thefollowingindividualsparticipatedinanhourlong

personalinterview:

• Mr.WayneWong,BART’sOCRDepartmentManagerandDBELiaisonOfficer;and• Mr.HaydenLee,Contract&LaborComplianceProgramsManagerinBART’sOCR

department.

Theseinterviewswereconductedinmid-April2016attheBARTofficeslocatedat300

LakesideDrive,16thFloor,inOakland,CA94612.

Mr.WongjoinedBART’sOCRDepartmenteightyearsagoandhehasbeenresponsible

for,amongotherthings,overseeingtheDistrict’sDBEProgram,recommendingDBEpolicy,

developingandimplementingawrittenDBEprogramandmanaginginternalandexternal

communicationproceduresrelatedtotheDBEProgram.Mr.Leehasbeenaconsultantfor,

amongotherthings,theDBEProgramsofvariouspublicandtransitagencies(i.e.,SantaClara

ValleyTransportationAuthority,SanFranciscoMunicipalTransportationAgency,andTheSan

FranciscoRedevelopmentAgency).Mr.LeehasthirtyyearsofexperienceinDBEcertifications

andhasextensive,valuableinstitutionalknowledgeassociatedwithimplementationofDBE

Programs.

Conversely,telephoneinterviewsarelessexpensivethanpersonalinterviewsandthe

interviewerhasbettercontrolandsupervisionduringtheprocess.117Thus,inmid-April2016,

Ms.JaniceSalais,CaltransChiefCertificationUnit/ContractEvaluationUnitintheOfficeof

BusinessandEconomicOpportunity,wascontactedtoparticipateinatelephoneinterview.

Ms.SalaishasmorethantwentyyearsofextensiveknowledgeintheDBEfieldandshehas

beenastrongadvocateofDBEcertificationandparticipationinpubliccontracting.

InlateAprilandearlyMay2016,duetotimeconstraintsandlimitedresources,athirty-

minutetelephoneinterview(seeAppendixD)wasconductedwithfourownersfrom

professionalservicesfirmsthatwereidentifiedinBART’sOracleBusinessIntelligenceEnterprise

Edition(OBIEE)System,adataplatformfromPeoplesoftandtheDistrict’sVendorPayment

Tracking(VPT)System.ThesesystemshaveallowedtheOCRstafftocollectandverifypayment

dataoverthelastfouryears.OCRstaffhaveworkedwithBART’sChiefInformationOfficerto

enhancetheVPTSystem.Thefirmswerechosenbasedonthehighestandleasttotaldollar

amountsawardedduringtheStudyPeriod.Inmid-May2016,thistaskwascompletedafter

encounteringrepetitiveobstaclessuchastheinabilitytodirectlyconnectwitheachfirmowner,

thelackofinterestfromowners,andtimeconstraintswereamongotherreasons.

Across-sectionalsurvey/questionnaire(seeAppendixE)wasusedtocollectforecasting

datafromsixty-sevenownersfromprofessionalservicesfirmsidentifiedinBART’sSemi-Annual

Reports,whichrepresentedalargerpopulationsample.Thepurposeofthequestionnairewas

tocollect:1)first-handinformation;2)unbiasedrepresentationofpopulationofinterest;3)the

sameinformationcollectedfromeveryrespondent;and4)surveydatatocomplimentexisting

datafromsecondarysources.118InmidandlateApril2016,andinearlyMay2016,anon-line

questionnairewassenttoallofthefirms’ownersandonly19percentor13respondents

participatedinthissurvey.Forseveralweeksthereafter,follow-upcallsweremadetothose

ownerswhohadnotyetsubmittedtheircompletedsurveys,buttherewasnoresponse.

Similartothetelephoneinterviews,itwasverydifficulttocommunicatewitheachowner.This

taskwascompletedinmid-May2016.

TheResearchDesignTaskWorkPlanincludingthevariousmethodsusedand

completiondatesforeachtaskareillustratedinTable2below.

Table2–ResearchDesignTaskWorkPlan

No. Task MethodtoCompleteTask

CompletionDateofTask

1 InterviewedMr.WayneWongandMr.HaydenLee

1HourIn-PersonInterview

March23,2016April8,2016

2 InterviewedMs.JaniceSalais 1HourTelephoneInterview

April8,2016

3 Interviewedfour(4)ownersfromprofessionalservicesfirmsidentifiedinBART’sOBIEESystem.

30MinutesTelephoneInterview

April29,2016May6,2016May13,2016

4 Anon-linesurvey/questionnairewasemailedtosixty-seven(67)ownersfromprofessionalservicesfirmslistedinBART’sOBIEESystem.

Survey/Questionnaire LateApril2016MidMay2016

Aftercollectingthefinalresults,asummaryoftheresearchquestionsandthe

correspondingmethodsusedforeacharedefinedinTable3andtheprimarysourcesusedfor

eachmethodaredescribedinTable4.

Table3-SummaryofResearchQuestionsandMethods

Research

stions

Literature

Review

Documen

tSources

In-Person

Interview

Teleph

Interview

SurveyData

1 • • • • • 1a • • 1b • • 1c • • • • 2 • • • • • 2a • • • • 2b • •

Table4-PrimarySourcesusedforEachMethod

Method SourceLiteratureReview AcademicLiteratureandCase

Studies.DocumentSources AcademicLiterature,Reportsand

MemorandaIn-PersonInterview In-PersonInterviewQuestionnaireTelephoneInterview TelephoneInterviewQuestionnaireOn-lineSurvey/Questionnaire On-lineSurvey/Questionnaire

AppendicesA-Econsistofseveralmethodologiesusedtoretrievekeyinformationand

answerslinkedtothispaper’sgeneralresearchtopicandthesetofresearchquestions

describedbelow.Theanswersfromtheintervieweesandrespondentswerecarefullyanalyzed

todetermineanynecessaryrecommendationstoBART’soverallstrategyofcontinuingto

implementeffectiverace-neutralmeasurestoincreaseDBEutilizationintheprofessional

servicesarea.Also,theinformationcollectedfromtheintervieweesandquestionnaireswillbe

usedtoincreasetheexistingpoolofDBEsandSBEsonDistrictprojects.

Theresearchgoalswereclassifiedintotheoreticalandapplicableapproachcategories.

Thetheoreticalgoalsweredefinedinthefollowingfirstsetofresearchquestionsthatwere

investigatedintheliteraturereview.Thesecondsetofresearchquestionsappliedthe

theoreticalbackground,originalresearch,andanalysistotheutilizationofDBEsinBART’s

federallyfundedprofessionalservicescontracting.Foreachsecondsetofresearchquestions

describedbelowandinAppendixB-1,paraphrasedresponsesfromMr.WongandMr.Leeare

notedfollowingeachquestion.

ResearchQuestions

Question1:Arerace-neutraleffortseffectivestrategiesinincreasingDBEparticipationinstateandlocalpublictransportationagencies’DBEPrograms?

ScholarlyresearchdemonstratesthattheproliferationofMBESet-AsideProgramsinthe

late1980swastheresultofresponsestoinstancesofpastdiscriminationintheawardofpublic

contractstominorityandwomen-ownedbusinessenterprises.119Asaresultofcourtcases

requiringraceconsciousmethodstobenarrowlytailoredtorespondtodocumentedinstances

ofpastdiscrimination,in1999race-consciousandrace-neutralmethodsbecameapartofthe

USDOT’sDBEProgramtoattainDBEparticipationinfederalcontracts.120Thesemethodswere

utilizedtoincreasethepoolofavailable,willingandablequalifiedDBEsandSBEs.TheDOTDBE

Programrequirementssoughttohavelocalagencies’DBEProgramsprovideforandattainthe

maximumfeasibleportionofanyspecifiedDBEgoalthroughrace-neutralmeans.121According

totheliteraturereview,thesestrategieshavebeenusedbymanyUSDOTrecipientsandthey

haveincreasedDBEandSBEparticipationinpubliccontracting.122

Question1a:Whatrace-neutralmeasureshavebeenmosteffectivewithincreasingDBEutilizationinBART’sprofessionalservicesagreementsandwhy?

Mr.Wong’sResponse:

GenerallyDBEstendtodobetterintheprofessionalservicesareafromthegetgo.In

particular,Asians,AfricanAmericansandWomenhavedonewellinprofessionalservices

becausethereisaverylowbarriertoentry.Bycontrast,inconstructiononeneeds

supplies,equipment,insurance,andbondingtoworkinthatfield.Inprofessionalservices,

onedoesnothavethesamerequirementsbecauseworkcanbeperformedoutofthe

office.Aprofessionalservicebusinesscanbeconductedatalowercostthanaconstruction

businessandtherearefewerbarrierstobesuccessfulsuchasbusinessneeds,skillsetand

theabilitytonetworkandpartner.Raceneutraleffortsincludepartnering,unbundlingthe

bigGeneralEngineeringConsultant(GECs)andConstructionManagement(CM)projects,

offeranopportunityforDBEstobeprimesconsultants(Prime).Irememberthatthese

contractsusedtobe$30millioneachpiece,butthentheywerereducedto$20millionand

thendroppedto$15million.Also,theDistrictdevelopedStatementofQualifications

ServicesAgreementsthatareouttobidat$3millionandtheyallowSmallBusinessesto

becomePrimes.BecomingaPrimeiskeytobeingabletolearnhowtomanagetheproject

andworkdirectlywiththeowners,butwhenyouareasubconsultant(Sub)youdonotget

todothat.Thedatawillbearout.TheSmallBusinessInitiativesandPaymentInformation

Report,datedMarch10,2016,totheBARTBoardshowsthatthemajorityamountofdollars

thataregoingtoM/WBEsaredisproportionallyinprofessionalservices.Professional

servicesagreementsmaketwothirdsofBART’sM/WBEparticipation.Therearealotmore

minorityPrimesinprofessionalservicesthaninconstructionprojects.Raceneutralefforts

trytocreatemoreopportunitiessothatDBEsbecomePrimesbecausethatiswheremostof

thedollarstendtogo.IthasbeenastrategythattheDistricthasbeenusingforthelast

fifteenyears.ProfessionalPrimestendtokeeptheworkforthemselves.Theprofessional

servicesindustryisverydifferentfromtheconstructionarea.Inprofessionalservices

agreements,consultantsgetpaidinthirtydayscomparedtoconstructionfirmownerswho

getpaidmuchlater.Professionalservicesconsultantsarehighlyeducated,andinsome

pointintheircareers,theyhavelearnedhowtodealwiththebookkeeping,taxesand

accountingaspectsoftheirbusiness.

Mr.Lee’sResponse:Oneofthebiggestraceneutraleffortshasbeentheunbundlingofthecontracts,which

allowthecontractstobesmallersothatDBEsareabletobidonthesecontracts.Sustaining

architectureandengineeringserviceswereawardedpriorto2013beforecontractingplans

started.BARTwasunbundlingcontractssothatmoreDBEscouldgetalargerpieceofthe

contract.TheunbundlingplanshavehelpedincreaseM/WBEparticipationconsiderably.In

general,BART’scommitmenttoallthesetypesofprogramssuchastheDBEandND

ProgramsshowadeepcommitmentonthepartoftheDistricttoincreaseopportunitiesfor

smallandM/WBEfirms.Primeconsultantsknowandtheyarespeakingproudlyonhow

theygetDBEsoncontractstomeettheirgoals.IthasbecomeBART’sandSociety’soverall

valuesthatdiversityeffortshavebeenprettystrong.ThereisacommitmentfromBART

throughitssupportiveservices,outreachevents,advancenotices,andnetworkingsessions.

Itisfairlytransparentcomparedtoanumberofagencies.BARTsendsacopyofthesign-in

sheetfromnetworksessionstoallattendeessothateveryonehaseachothers’names

althoughalotofthesefirmsalreadyknoweachother.

Question1b:SinceFY12–FY15,hastherebeenatrendinthenumberofprofessionalservicesagreementsanddollarsawardedtoDBEfirms?

Mr.Wong’sResponse:IthinkthatDBEparticipationhasincreasedsignificantlyinprofessionalservicesaswellasin

construction.WehavehadanumberoflargeprojectsthattendtobringmoreDBE

participation.WehavealsoawardedanumberoflargeandsmallA&EandCMtype

contractsthathavebroughtinDBEfirmsatthePrimelevel.Inthelastfourorfiveyears,

therehasbeenatleasttenortwelveA&EawardstoDBEfirms.

Mr.Lee’sResponse:

No,Idon’tthinkso.Icamein2012andIhavebeenmonitoringprofessionalservices

contractssincethen.Duringthatperiodtheyallhavebeenrace-neutralandminorities,

womenandDBEfirmshavecommittedto15to40percent.Icannotsaytheyhavegoneup

ordownbecauseIhavenotcalculatedtheoverallaverage.

Question1c:RecentlyBARThasexperiencedanincreaseofDBEutilization.CanthistrendbeattributedtoBART’sproactiveapproachesormarketplaceconditions?

Ithinkitisboth.WhenIfirststartedheremostofthePrimeopportunitieswerereallybig

at$30millionto$40millionandmostofthemweregoingtonon-DBEs.Therewasacall

abouttwenty-fiveyears(25)agotostartgivingotherstheopportunitybecausethesame

peoplewereeatingatthedinnertable.Ithasbeenveryeffective.Inmylastreporttothe

Board,datedMarch10,2016,outofthe$120milliondollarsoftotalPrimeopportunities

wegot30pluspercentM/WBEparticipation,butalotofthemoneywenttothePrimes.

BART’soncallprofessionalservicesagreementsareindefinitequantityagreements

meaningthereisnocommitmentoffundingsoBARTsayswewantyoutobeableto

provideresourcesorstaffingtosupporteverythingunderthesky.IftheDistrictnever

requestsservicesincertaintypesofworklistedinthescopeofwork,thentheworkplanfor

someoftheworkexpectedtobeperformedbythelistedsubconsultantfirmsnevergoes

out.Atthetimeofaward,wedon’tknowwhatcontractsandscopesofworkaregoingto

beused,butBARThasalargepartindictatingwhogetsused.Theproblemisthatthe

Primesareeatingthedollars.ThereisnocommitmenttouseanyoftheirSubsfromtheget

go.Nocommitmentatall.Itisanon-callindefinitequantityagreement.

Mr.Lee’sResponse:IthasmoredotowithBART’spractices.BARThasdoneaprettygoodjobinworkingwith

DBEsandPrimesbyhelpingthem.Ithasnotbeenperfect,butwehavedoneaprettygood

jobbreakingdowntheprojects.BARThasdoneafairlygoodjobworkingwithDBEson

requirementsliketheinsuranceandbonding.Ithasalwayscomefromthetopdownfrom

theBoardtotheGeneralManager.CreatingalevelplayingfieldforDBEfirmsandchanging

marketconditionsmightbesomeofthereasons.TheprevalenceofDBEprogramshasalso

lentitselftothat.Thelandscapehaschangedovertheyears.Agencieshaveanumberof

M/WBEemployeesinkeypositionsthatlendittobeopentocontractingDBEsbecauseyou

havekeymanagementcreatingtheopportunities.Intheolddays,the“GoodOldBoys”

NetworkconsistedofCaucasianmales.Nodoubtthatitstillexists,butithasbeenreplaced

withanew“GoodOldBoys”Network.Hopefullynowwiththeintentoftheseprograms,

minoritygroupsandwomenarebroughtinandDBEswouldbeincludedinthenetwork.I

understandthereisaneedofon-callcontracts,buttheyshouldinsteadhaveproject

specificcontracts.CertainDBEsornon-DBEsstayonthosecontractsforyearsandyears

andthengetonthenewcontracts.Otherfirmshavetowaitfiveyearstogetonacontract

andacquiretheexperience.Anotherobstaclewiththeon-callcontractsisthatsomeofour

stafftendstousethesamefirmsoverandover.Also,someofthelistedsubconsultant

firmsdonotgetchosentodotheworkandthatbecomesanobstacle.Ifprofessional

servicesagreementswereprojectspecific,subconsultantswouldgettheworkbecauseitis

adefinedscopeofwork.

Question2:WhataresomeofthebarriersencounteredbyDBEsinpubliccontracting? Accordingtoseveralstateandlocalpublictransportationagencies’availabilitystudy

reports,thebarrierstoDBEandSButilizationincludethe:1)Californiamarketplaceindicated

challengestoentryforDBEsintotheCaliforniaconstructionandengineeringindustries;2)low

ratesofbusinessownershipforcertaingroupsworkingintheindustries;3)lowerbusiness

earningsforDBEfirms;and4)accesstocapital.123Also,itwasreportedthatpublicagencies

favoredlargeprofessionalfirmswithsubstantialpubliccontractingexperience;butthemost

importantobstaclewasthattheprojectsweretoolargeforM/WBEfirmstobidon.124

Question2a:Whatarethereason(s)thereisadisparitybetweenMBEandWBEparticipationinBART’sprofessionalserviceagreements?

ThereismoreMBEthanWBEparticipationbecausealotmoreMBEsareouttherelike

AsiansandAfricanAmericans.Also,thereisalowcosttoentryinthisfield.Icouldstart

myofficeinmybedroomandallIneedisalaptopandaprinter.Constructionhasavery

highcostofentry.Youneedaplacetoputyourequipment,truck,toolsets.Allthose

thingstakemoneyandtime,andyouhavetomaintainthem.Intheprofessionalservices

industryeverythingisdonethroughemail.Iwouldnevergettoseeyou,butin

constructionitisdifferentbecauseyouhavetogotowork.

Mr.Lee’sResponse:Idon’tknowhowtheyareperformingagainsttheiravailability.FromwhatIcangather

thereareMBEandWBEsavailable.Asianshaveahighpercentageofworkinprofessional

servicesagreements.AfricanAmericansandHispanicfirmsaregettingverylittlework.

HereatBART,weareverygoodingettingAfricanAmericanfirmsinprofessionalservices.I

preferiftheDBEProgramwasseparatedbetweenMBEandWBEgoals.Inthepast,there

wasaprogramlikethat.Nodoubtthattheutilizationofwomen-ownedbusinessesneed

toberemediedforpastdiscrimination.Inmyopinion,womenconstructionfirmsshould

notbecertifiedbecausetheyaretakingawayfromminorityfirms.Itreallyisafairness

issue.IthinkthatiswhysomanystatespassedProp.209.Phonywomenbusinessfirms

aremoreprevalentintheconstructionindustryandtheyhavealwaysgiventheDBE

Programabadname.Itallstartsinthecertification,whichallowsthesefirmsintothe

programtoabuseit.Thatiswhytherearemanypeoplewhoareanti-affirmativeaction.

Question2b:WhydidBARTnotattainitsTriennialgoal(s)duringfiscalyears2012,2013and2015?

Themake-upofourDBEgoalisprofessional,constructionandverylittleprocurement.In

thefederalspenddownlastyearweboughtalotofequipmentthatdidnothaveDBE

participation.ThenumberofcontractssuchastheMarineBarrierat$10millionhadonly2

percentofDBEparticipation.TheHaywardMaintenanceProjectat$100milliondidnot

haveanyfederalmoney.WealsohavetoreviewhowwesetcontractspecificDBEgoalsby

puttingasysteminplacewherethemanager(s)approvethem.Also,ifgoalsaresetvery

lowyoucannotmeettheDistrict’s23percentTriennialgoal.Theprofessionalservices

agreementshavebeenverystableandtheyprovideuswithDBEparticipation,enoughto

carrywhenwehaveallconstructionandprocurementcontracts.

Mr.Lee’sResponse:Onereasonisthatwehaveincludedanumberoflargeprocurements.BARTpurchased

veryexpensivevehicles;multi-billiondollarpiecesofequipment.Theseitemswerenot

includedinourDBEgoalattainment.Shouldwehavea23percentgoal?Probablynot,but

theCommunityexpectsustohaveone.MosturbantransitagencieslikeBARTandL.A.

METROhavehighgoalssoitisdifficultforBARTtosaywewanttolowerourgoalto18

percent.Partofitiswedonotreportprocurementpurchasesunder$5,000,butweare

lookingattryingtoputgoalsandcountprocurementcontractsbecauseitisahuge

number.Inthepast,wedidnotreporthugeprocurementpurchases.TheFTAwouldsay

includeit,butifwedonotincludethemFTAwillnotdingus.Nowwearereportingand

bringingdownourDBEparticipationpercentage.Anotherissueisthatwearesettinglow

percentagegoalsandifwearenotmeetingourgoalsthenweneedtousehighergoals.

TheSmallBusinessElementsispartoftheDBEprogramanditismeanttohelpDBE

participation,butinthelongrunalotoftheworkwillbedonebynon-DBEsanditmaynot

beconducivetoDBEparticipation.IfwearenotgoingtouseanSBEgoalthenwedonot

needtoputitinourcontracts.WeshouldincreaseourDBEgoalstomeetourTriennial

goalandcountprocurementcontracts.

6.FINDINGSANDANALYSIS

Thisstudyseekstoidentifywhetherrace-neutraleffortshavehadapositiveeffecton

DBEutilizationinBART’sfederallyfundedprofessionalservicesagreementsandiftherehas

beenanincreaseinthenumberofagreementsandtotaldollaramountsreceivedbyDBEs

duringtheStudyPeriod.TheresearchmethodologyisdetailedinChapter5,whilethischapter

summarizesthefindingsandconclusionsarisingfromextensivequalitativeandquantitative

datacollectedbyvariousmethods(i.e.,BARTdata,interviews,andsurveys).

In-PersonInterviews

Overall,someofthekeypointsagreedbyMr.WongandMr.Leewerethatduringthe

StudyPeriodDBEparticipationhassignificantlyincreasedintheprofessionalservicesarea

becauseofthenumberoflargeandsmallA&Eagreements(i.e.,GeneralEngineeringConsulting

andConstructionManagementAgreements)awardedtoDBEfirmsatthePrimelevel.Also,

theyagreedthereisaverylowbarriertoentryintheprofessionalservicesareabecausethe

requirementstostartabusinessinthisfieldarelessstringentcomparedtotheconstruction

industry.InChapter5andinAppendixB-1,Mr.Wong’sandMr.Hayden’scompleteresponses

totheinterviewquestionsaresummarized.

CaltransTelephoneInterview

Ms.JaniceSalaisalsoagreedthattherehasbeenanincreaseofDBEutilizationin

CaltransprofessionalservicescontractsbecauseofCaltrans’transparencyandstrategicefforts

ofpromotingopencommunicationandnetworkingbetweenthePrimesandSubs.Someof

thesestrategiesinclude:1)providingtheplanholderslisttotheSubssothattheycandirectly

contactthePrimesweekspriortotheproposalduedate;2)conductingregionalbi-monthly

meetingswherebysmallbusinessescouldvoicetheirconcernsandissues;and3)developingad

hocsubcommitteestoincreasetheparticipationofparticularethnicgroups.Amoredetailed

descriptionofMs.Salais’responsetotheinterviewquestionsiscitedinAppendixC-1.

TelephoneInterviewsfromOwnersofProfessionalServicesFirms

Duetotimeconstraints,onlyfourownersfromprofessionalservicesfirmswere

interviewedandtheywereselectedbasedonthehighestandleasttotaldollaramounts

awardedduringtheStudyPeriod.Thefirmownersdecidedtoremainanonymoussincethey

havehadandcontinuetodobusinesswithBART.Twoofthefirmshadatleasttwenty-five

yearsofexperienceworkingwithBARTandtheothertwofirmshadtenyearsorless.Thefirms

withalongworkingtrajectoryareWBEswhiletheothertwofirmsareownedbyMBEs.After

interviewingthefirmowners,therewasalotofcommonalityamongthem.Forinstance,they

havebeenPrimeconsultantsinatleastoneortwoGECorCMAgreementssincedoingbusiness

withBARTandmostoftheirworkhasbeenperformedasaSub.Theyagreedthat“Wordof

Mouth”hasbeenthemosteffectivestrategytolearnofBART’sbiddingopportunitiesand

becauseofthelongtermworkingrelationshipsmostoftheteamsarealreadycomprisedsixto

ninemonthspriortothepre-proposalmeetingandduedate.Mostofthechallenges

encounteredbytheseownerswere:1)noone(referringtoaPrimeconsultant)wantstogive

youapieceofthepieunlesstheyareforcedto;2)Subsdonothavetheresourcesandlack

experienceinworkingwiththepublicsector,especiallywithBART;and3)BARTdoesnothavea

“ChecksandBalances”systemtorequestthatPrimesaretransparentandaccountablefortheir

workespeciallywhenitrelatestonotifyingtheirSubsofanyfutureworkthatcanbeperformed

bythesefirms.

AppendixD-1describesinmoredetailtheremainderoftheresponsesfromthefour

ownersinterviewed.Duringtheinterview,alloftheownerswereforthcomingwiththeir

answersandsomeofthemprovidedalotmoreinformationthanaskedbecausetheywerevery

happytobeheardandtheyhavehighhopesthat,eventually,theircommentscouldreachthe

earsofBART’sdecisionmakers.

On-LineQuestionnairefromOwnersofProfessionalServicesFirms

Onthreedifferentoccasions,anon-linesurvey/questionnairewasemailedtosixty-

sevenprofessionalservicesfirmsidentifiedinBART’sOBIEESystemandfollow-uptelephone

callsweremadetothenon-respondents.Afterextensiveoutreach,only19percentor13

respondentssubmittedtheircompletedquestionnaire.Thefollowingsummarizestheresultsof

thesurveys.

Sevenofthethirteenownersfromtheprofessionalservicesfirmshavebeeninbusiness

formorethantwentyyears,fourownershavebeeninoperationbetweenelevenandsixteen

years,andtwoownershavelessthanfiveyears.Outofthethirteenrespondents,nineareDBE

firmswhiletherestareM/WBEs.Mostoftheownersor62percentagreedthattheirfirms

“Sometimes”receivedawardedcontractsfromBART.70percentoftheownersconfirmedto

haveperformedthescheduledscopeofworkiftheirfirmwaslistedonaBARTcontract.Outof

the13respondents,eightindicatedthatrace-neutralmeasureshave“Always”or“Sometimes”

beeneffectivestrategiesinincreasingtheirfirm’sparticipationinBART’scontractingactivities.

Theowners’responsestoQuestionNos.4-9aredescribed,inmoredetail,inAppendixE-1

Figure2“ProfessionalServicesUtilization”,whichwaspartofadraftBARTBoard

presentation,illustratesthedistributionofpaymentstoallDBEsoneightcompletedon-callGEC

andCMagreementsawardedbetween2009and2015.Thischartalsoshowsthetotal

percentageofsubconsultantslistedandutilizedduringthetermoftheagreement.Therewere

onehundrednineteensubconsultants(56M/WBEs)listedatawardandfifty-eight(32M/WBE)

wereutilized.125M/WBEsreceived$31.9millionor39percentoftotaldollarsofwhich$12.4

millionor39percentwasreceivedbyprimeconsultantsand$19.5millionor61percentwas

receivedbysubconsultants.12683percentoftheDBEdollarswerepaidtonine(9)M/WBEs.127

AfricanAmericanswereleastutilizedat68percentwhileAsianAmericansweremostutilizedat

73percentofeachrespectivegroup.Someofthepossiblereasonsforthisoutcomemaybe

attributedtothefactthatmostofthenon-listedSubsaddedmidstreamwerenonM/WBEsand

thatprimeconsultants,includingM/WBEprimeconsultants,tendtokeepmoreworkto

themselves.128

Figure2–ProfessionalServicesUtilizationFY2009-FY2015

n=numberofsubcontracts

AsillustratedinFigure3above,mostoftheprofessionalservicesagreementsawarded

duringtheStudyPeriodoccurredinFYs12and15inwhichmostoftheagreementswere

awardedtoDBEPrimes.However,inFY13noagreementswereawarded,butinFY14threeof

0246810121416

2012 2013 2014 2015

Figure3-ProfessionalServicesAgreementsFY2012-FY2015

No.ofAwardedAgreements

theeightagreementswereawardedtoDBEPrimes,respectively.Also,duringthisperioda

totalofonehundredsixty-twoDBESubswereutilizedtoperformsomeportionoftheawarded

agreements’scopeofwork.InFY12onlyeightM/WBESubswereutilized,butthatnumber

tripledinFY13,andinFY1436M/WBEfirmswereutilizedinBART’sprofessionalservices

agreements.Yet,inFY15therewasalargeinfluxofover90M/WBEfirmsthatwereutilized.

ThissignificantincreaseofDBEparticipationmaybebecausethenatureoftheseagreementsis

ongoing(i.e.,threeyearswithtwooneyearoptions)andon-callservicesbasedonwork

directivesissuedforspecifictasks.

AsillustratedinFigure4above,fromcalendaryears2012thru2015,paymentstonon-

DBEprimes(i.e.,approximately$13.4million)decreasedto$4.3million,butpaymentstonon

DBESubssignificantlyincreasedfromlessthanonemillionto$11milliondollars.In2012,the

nettoDBEPrimeswas$3.8million,zeroin2013,lessthanhalfamilliondollarsin2014,butit

increasedto$2.8millionin2015.Duringthisperiod,thepaymentstoDBESubsgradually

increasedfrom$281,207to$7.4milliondollars.Also,thetotalpaymentstoDBEssignificantly

2012 2013 2014 2015

Millions

Figure4-ProfessionalServicesAgreementsDBEPayments2012-2015

NettoNonDBEPrimesNonDBESubs

NettoDBEPrimes

DBESubs

TotalPaymenttoDBEs

TotalProfessionalServices

increasedfrom$4.1millionto$10millionaswellasthedollaramountspaidtoDBEsinthe

professionalservicesindustryfrom$18.3millionto$25.4million,respectively.

7.CONCLUSION&RECOMMENDATIONS

Overall,duringtheStudyPeriod,theresearchgeneratedforthisreportconsistedof

valuableinformation(i.e.,datasources,statisticalanalysis,andrecommendations)thatmaybe

usedbyvariousinternalandexternalstakeholders,publicandprivatesectors,SmallBusinesses,

andUSDOTrecipientswhomustalsocomplywithsimilarfederalregulationsandwhoare

havingdifficultyattainingtheirAnnualDBEgoaland/orTriennialgoal.Thepurposeofthecase

studiesdiscussedearlierwastoidentifyotherpublicagencies’race-neutraleffortsandany

challengesthathaveimpactedtheDBEparticipationinstateandlocalpubliccontracting.

Additionally,thesecasestudiesshowedthatobsoleteorincompletedataonDBEutilizationin

theprofessionalservicesareaappearstobeamajordeficiencyandanissueamongpublic

agencies,includingBART.

Nevertheless,afterconductingmyresearchanalysis,itwasdeterminedthatexistingand

currentrace-neutralmeasures(e.g.,networkingsessions,unbundlingofcontracts,etc.)have

beenveryeffectiveinDBEutilizationresultinginanincreasetrendinthenumberofawarded

BARTfederallyfundedprofessionalservicesagreementsandthetotaldollaramountreceived

byDBEs.Currently,forFY16,theDistrict’sDBEparticipationis34.7percentintheprofessional

servicesindustry,whichhasasignificantimpacttotheDistrict’sattainmentofitsTriennial

goal.128Also,theresearchidentifiedthatpastchallengesorbarrierscontinuetoexistamong

DBEsandSBs;however,BART’srace-neutraleffortshaveoffsetormitigatedtheeffectsofthese

obstacles.

Conversely,whilethereappearstoberecognitionthatrace-neutralmeasuresare

necessarystrategiesthatshouldbeconsistentlyimplementedtohaveasignificantimpactin

theincreaseofDBEutilization,fewstudieshavebeenconductedthatactuallymeasurethe

successoftheseefforts.129Thus,itisimportantthatpublictransitagenciescontinueto

conductmoredisparitystudiestoidentifyanyDBEutilizationtrends,aswellaschallengesfaced

byDBEs.Agenciesshouldproposeanyrace-neutraleffortstoenhancetheexistingpoolofDBEs

andSBEs.Nonetheless,manyopponentssuchasDr.GeorgeR.LaNoue,professorinthe

UniversityofMaryland,BaltimoreCounty,doesnotagreewiththisstatementbecausedisparity

studiescontinueto:(1)bebasedonobsoleteorincompletedata;(2)reportresultsinwaysthat

exaggeratedisparities;(3)failtotestfornondiscriminatoryexplanationsforthedifferences;

and(4)makefindingsofdiscriminationwithoutidentifyinganyspecificinstancesorgeneral

sourcesofbiasedbehavior.130

Furthermore,thestudyshowedthatthenumberofprofessionalservicesagreements

awardedtoDBEPrimeshavecontinuedtoincreaseduringtheStudyPeriod.Also,thedollar

amountspaidtoDBEPrimesandSubshaveincreased,buttheparticipationofDBESubshas

decreasedduetothePrimesnotutilizingthemontheirproject(s)insteadtheyareself-

performingthework.Anotherreasonmaybeduetothelackofworkplansissuedbythe

District,whichdonotallowtheSubstoperformprojectspecifictasks.

ThequantitativeinformationusedforthisresearchwillbebeneficialtoBART’srecently

implementeddatacollectionsystemanditsdatadrivenprocessmonitoredbytheOCRstaff.

Thequalitativeinformation,suchasthefeedbackfromtheintervieweesandtheon-linesurveys

submittedbyownersofprofessionalservicesfirms,shouldbecarefullyreviewedbyBARTstaff

tomakeanyneededrecommendationsforchangestoBART’sProgramsinordertoincreasethe

effectivenessofitsDBEProgramandtoenhanceitscurrentpoolofavailable,readyandwilling

DBEsandSBEs.

AppendixADisadvantagedBusinessEnterprise(DBE)Criteria

BelowisadefinitionofaDBEfirm,itsaverageannualincome,andtheethnicgroupsconsideredsociallyandeconomicallydisadvantaged.

• ADBEisafor-profit,smallbusinessconcern:1)thatisatleastfifty-onepercent(51

percent)ownedbyoneormoreindividualswhoaresociallyandeconomicallydisadvantagedor,inthecaseofacorporation,inwhichatleastfifty-onepercent(51percent)ofthestockisownedbyoneormoresociallyandeconomicallydisadvantagedindividuals;and2)whosemanagementanddailybusinessoperationsarecontrolledbyoneormoreofthesociallyandeconomicallydisadvantagedindividualswhoownit;

• ADBEfirm’saverageannualgrossreceipts,includingthoseofitsaffiliates,forthepreviousthreeyearsdoesnotexceed$23.98million(orasadjustedforinflationbytheSecretaryofDepartmentofTransportation)pursuantto49CFRSection26.65(b);and

• AsociallyandeconomicallydisadvantagedindividualisaU.S.CitizenorpermanentresidentoftheUnitedStatesandis:

o BlackAmerican(includingpersonshavingoriginsinanyoftheBlackracialgroups

ofAfrica);

o HispanicAmerican(includingpersonsofCentralorSouthAmericans,Cuban,Dominican,Mexican,PuertoRican,orotherSpanishorPortuguesecultureororigin,regardlessofrace)

o NativeAmerican(includingpersonswhoareAleuts,AmericanIndians,Eskimos,orNativeHawaiians);

o Asian-PacificAmerican(includingpersonswhoseoriginsarefromBrunei,Burma(Myanmar),Cambodia(Kampuchea),ChinatheCommonwealthoftheNorthernMarianasIslands,theFederatedStatesofMicronesia,Fiji,Guam,HongKong,Indonesia,Japan,Juvalu,Kiribati,Korea,Laos,Macao,Malaysia,Nauru,thePhilippines,Samoa,Taiwan,Thailand,Tonga,theU.S.TrustTerritoriesofthePacificIslands(RepublicofPalau),orVietnam);

o SubcontinentAsianAmerican(includingpersonswhoseoriginsarefromBangladesh,Bhutan,India,theMaldivesIslands,Nepal,Pakistan,orSriLanka);

o AWoman;oro Amemberofanyadditionalgroupthatisdesignatedassociallyandeconomically

disadvantagedbytheSmallBusinessAdministration.

AppendixBIn-PersonInterviewQuestions

Question1: Whatrace-neutralmeasureshavebeenmosteffectivewithincreasingDBEutilizationinBART’sprofessionalservicesagreementsandwhy?

Question2: SinceFY12–FY15,hastherebeenatrendinthenumberofprofessionalservices

agreementsanddollarsawardedtoDBEfirms?Question3: Inyouropinion,shouldtheexistingrace-neutraleffortscontinuetobeusedor

shouldothermeasuresbeusedinconjunction?Question4: RecentlyBARThasexperiencedanincreaseofDBEutilization.Canthistrendbe

attributedtoBART’sproactiveapproachesormarketplaceconditions?Question5: WhataresomeofthebarriersencounteredbyDBEswhoparticipateinpublic

contracting?Question6: Whatarethereason(s)thereisadisparitybetweenMBEandWBEparticipation

inBART’sprofessionalservicesagreements?Question7: WhyhasBARTnotattaineditsTriennialgoalsinfiscalyears2012,2013and

2015?Question8: SinceyouhavehadanextensivetrajectoryworkingintheDBEfield,arethere

anydifferencesbetweenDBEparticipationintheconstructionandprofessionalservicesindustries?

Question9: Whatotherrace-neutraleffortsdoyourecommendBARTshouldimplementto

increaseDBEparticipationinitsprofessionalservicesarea?Question10: Wouldyouliketoaddanyothercomments?

AppendixB-1In-PersonInterviewAnswers

TheanswerstoquestionNos.1,2,and4-7weredescribedearlierinChapter5under“ResearchQuestions”.Question3: Inyouropinion,shouldtheexistingrace-neutraleffortscontinuetobeusedor

shouldothermeasuresbeusedinconjunction? Mr.Wong’sResponse:

MostoftheinitiativesproposedintheSmallBusinessOpportunityPlanPhaseIandPhase

IIprimarilydealwithconstructionandtheyareheavy,heavyinconstruction.The

unbundlingwasforconstructionalthoughitdidhaveanimpactinprofessionalservices,

butitwasprimarilyinconstruction.70or80percentofthedollarstheDistrictspentover

thelastsixorsevenyearsofthe$2billiondollarswasforconstruction.Forexample,some

oftheproposedinitiativesinclude“QuickPay”anda“Mentor/Protégé”Programtoassist

SmallBusinessesintheconstructionarea.Professionalservicesteamshavethe

opportunitytoconductoutreachactivitiesnine(9)monthstoayearbeforethebidis

advertised,whichallowSmallBusinessestobeapartoftheteam.Also,rotational

programscanbeusedinconstructionandprofessionalservicesagreements.Outreachand

revampingourexistingoutreachcangobothways,butheavilyinconstructiondesignedto

fixthebuilt-inissues.

Mr.Lee’sResponse:BARThasusedeffectivemeasuresinthepastsuchastheprofessionalliabilityinsurance,

whichcoversallPrimesonourmajorcontractsanditalsohelpsDBEsandSBscovertheir

insurance.

Question5: WhataresomeofthebarriersencounteredbyDBEswhoparticipateinpubliccontracting?

Thebonding,insurance,gettingpaid,listedandusedaresomeofthebarriersencountered

byDBEs.Apartofitcanbeduetothe“GoodOldBoys”NetworkintermsofIcanrelyon

ContractorAandContractorAisnotgoingtocostmemybondandinsuranceandIknow

ContractAisgoingtogettheresourcesandcompletethework.AsthePrime,Iam

responsibleforthecontractandIneedsomeonewhocouldgetthisworkdone.In

constructiontherearealotofimpedimentssuchascashflow,equipment,andresources.

Thesefolksarenotaffiliatedwiththetradesunionssotheydonotgetthebestworkers.

Mr.Lee’sResponse:

Thereareanumberofbarriersthatinclude:1)financialburden;2)governmentcontracts

tendtobelarge;3)typicallysmallminoritywomenDBEfirmsdon’thavethecapitaltobid

contracts;4)notenoughbondingtobidsubstantialcontracts;and5)thepaperwork(i.e.,

submittingallthedocumentationandbidsontime,andalltheredtapeinvolvedin

governmentcontracts).Otherobstaclescouldbethefacilitystandardsthatweimpose,the

sizeoftheproject,theinsurancerequirementscouldbetoohigh,thenatureoftheworkin

alotofourprofessionalservicesworkisveryspecialized,andafirm’sexperienceespecially

fornewstart-upfirmsisnotenough.

Question8: SinceyouhavehadanextensivetrajectoryworkingintheDBEfield,arethereanydifferencesbetweenDBEparticipationintheconstructionandprofessionalservicesindustries?

Since1991,thegrowthinprofessionalserviceshasbeenexponential.Theparticipationis

nowtwotimesmorethanwhatitwastwentyyearsago.Twentyyearsagotherewasno

participationatthePrimelevel.Therehavebeenmanymoreopportunitiesandatleasta

thirdofthosehavegonetoDBEPrimes.TwentyyearsagotherewerezeroDBEPrimes.

WehavebrokendownandunbundledtheseopportunitiesandtheDistrictisdoingvery

wellinthisarea.Contrary,intheconstructionareathereisalackofDBEPrimes.

Mr.Lee’sResponse:Yes,therearehugedifferencebetweenfirmsintheconstructionandprofessionalservices

areas.Professionalservicesconsistofallcollegeeducatedprofessionals,butin

constructiontheworkersarenoteducated.Thisdoesnotmeanthattheyarenot

necessarilysmartanddonotknowtheirwork,butitiscomparingapplestooranges.There

aremoreDBEsintheprofessionalservicesareaandwehavehadsomeDBEPrimeswho

havedonelargecontracts.BARThasbeenabletogetDBEparticipationpartlybecauseof

theirgeographyinwhichwehaveanumberofthesetypesofminorityfirms.Becauseof

BART’semphasis,politicalandcommunityrelations,andthecommitmentfromuptopitis

easiertogetparticipationonprofessionalservicesbecausetheyaremoresubjective.

Constructionismorecontentious.Itisdifficultandhardtocoordinateeach

subcontractor’swork.Thereareanumberofminorityfirmsthatareundercapitalizedand

thereareanumberoffirmswhowanttocutcornersbecauseoftheprevailingwages.Itis

totallyadifferenttypeofworkandadifferentmentalitybetweentheworkersand

professionalservicesemployees.

Question9: Whatotherrace-neutraleffortsdoyourecommendBARTshouldimplementtoincreaseDBEparticipationinitsprofessionalservicesarea?

Itisimportanttorevampourmatchmakingeffort.Iheardagainfromourprojectstaffthat

contractorsarequestioningtheOCR’sabilitytobringinqualifiedDBEfirms.Theproblemin

constructionisyouarenotgettingalotofPrimes.Qualifiedmeanshavingtechnicaland

financialqualificationsandmanyofthemdon’thavethatorhaveoneornottheother.The

problemisweneedtogetnewfirmsbecausethepoolisgettingstaleandwehavetobring

innewfish.Thepoolisgettingdryandwehavetobringmorepeopletothetable.We

needtodowhatwecanonourownandweshouldoutreachtothecommunity.Wecan

implementnewinitiativestoattractnewpeople.Thepoolisdryingoutandwiththe

economyimprovingitdoesnothelpusespeciallyinconstruction.Weneedtostartto

strategizetogetsomefreshfishintothislakesothatthePrimesgetmoreexcitedto

participateinmatchmakingsessionsbecauseweknowmatchmakingisdyeing.Weneeda

bigprojectsuchastheGOBondtobringinnewSmallBusinesses.

Mr.Lee’sResponse:IwouldliketohaveaMentor/ProtégéProgramwhereIcanbeabletotrainminority

womenfirmsincertainareasthattheyarelacking.Forexample,trafficsignalingandheavy,

dutyelectricalworklikeourtractionpowertrade.Therearetonsofelectricalminority

firms,butmostofthefirmscannotdothattypeofworkandtheycouldonlydosmall

projects.IliketofocusonrebarbecausewearenotcountingrebarinourDBEgoals

becausetherearenotanyrealDBEfirmsouttherewhoarecertifiedforrebarwork.I

wouldratherseeitasajointeffortamonganumberofagencieslikeVTA,Caltrain,SFMTA,

andBARTdoaMentor/ProtegeProgrambecauseitisverysusceptibletocriticismand

failureespeciallyinconstruction.Anotherarea,isimplementingaworkingcapitalloan

programwherebyasmallfirmneeds$50,000tomakepayrollandBARTmightnotrequire

anycollateral.Thatisdifficult,butsomeofthesesmallfirms,particularlyAfricanAmerican

firms,needthecashtobidonprojects.ItwouldbereallyniceifwehadanAfrican

AmericanConstructionProgramtohelpcontractorsgetthroughtheircontract,grow,

improve,andgainnewknowledge.Mostofthesefirmsneedthecashtomakepayroll,buy

suppliesandtheyarealmostinvariablyunder-capitalized.Workingcapitalloanmoneywill

beusedtodoanythingandgetthroughwiththeirwork.Someofthesesmallbusinesses

getaccountreceivableloanswithhugeinterestrates.Wewillneedthebackingofabankto

beabletoadministerthistypeofprogram.Thereisdefinitelyalotofrisk,butthereare

successstories.

Question10: Wouldyouliketoaddanyothercomments?

Mr.Wong’sResponse:Mythoughtsinthisandhavingbeenheremorethantwenty-five(25)years,Idon’tknowif

thisistrue,everythingisanecdotal,BARTendeditsAffirmativeActionProgramin

constructionrightafterProposition209kickedin.Wehadalotmoreinconstructionback

thenthanwedotodaythatcouldbetheimpactofProp.209.TheCityhaskeptthose

effortsuntilafewyearsagowhentheylosttheSupremeCourtCaseintheCoral

ConstructionCase.TheCityhasastrongerbaseofminoritycontractorswhoaremore

progressivethanthoseatBART.Itisverydifferent.Thecontractor,thequalifications,and

thenatureoftheworkwedoareverydifferentaswell.TherewerealotmoreAfrican

Americanfirmsactivepre209thanpost209.Constructionisverycapitalintensiveand

therearealotofbarrierstoentry.ProfessionalServiceshavenobarriers.Wecoulddoour

businessesoutofourhomesandcommunicatethroughemailsandtexting.Inconstruction

youhavetodotheworkonthejobsite.

Mr.Lee’sResponse:Nocomments.

AppendixCCaltransTelephoneInterviewQuestions

Question1: Whatrace-neutralmeasureshavebeenmosteffectiveintheincreaseofDBEutilizationonCaltransengineeringandprofessionalservicesagreementsandwhy?

Question2: SinceCaltransAvailabilityandDisparityStudyReportin2007,hastherebeena

differenceinpastandcurrentrace-neutraleffortsusedbyCaltranstoincreaseDBEutilizationintheprofessionalservicesarea?

Question3: Inyouropinion,shouldthesemeasuresbeconsistentlyusedorshouldother

proactiveapproachesbeusedinconjunction?Question4: HasCaltransexperiencedanincreaseofDBEutilization?Ifso,canthistrendbe

attributedtoCaltransproactiveapproachesormarketplaceconditions?Question5: WhataresomeofthebarriersencounteredbyDBEswhoparticipateinpublic

contracting?Question6: HaveyounoticedadisparitybetweenMBEandWBEparticipationinCaltrans

professionalserviceagreements?Ifso,whatarethereasonsforthisoutcome?Question7: SinceyouhavehadanextensivetrajectoryworkingintheDBEfield,arethere

anydifferenceswiththeDBEparticipationintheconstructionandprofessionalservicesindustries?

Question8: WhatotherproactiveapproachesdoyourecommendthatCaltransshould

implementtoincreaseDBEparticipationinitscontractingactivities?Question9: Wouldyouliketoaddanyothercomments?

AppendixC-1CaltransTelephoneInterviewAnswers

Question1: Whatrace-neutralmeasureshavebeenmosteffectiveintheincreaseofDBEutilizationonCaltransengineeringandprofessionalservicesagreementsandwhy?

Ms.Salais’Response:

Caltranshastwelvedistrictsinwhichsmallbusinessliaisonsdoextensiveoutreachforthe

SmallBusinessCommunity.WehavearobustCalmentorProgramthathelpspairPrime

consultantswithsmallA&Econsultants.Also,wehaveaMentorProtégéConstruction

Program,butIamnotsureinwhichdistrictsithasbeenimplemented.Idoknowthatthere

aremorementorsthanprotégésintheseprograms.

CaltransSmallBusinessCouncil(Council)isaprofessionalservicessubcommittee,which

basicallyrepresentsSmallBusinessorganizations.Ithasbeenaroundforthelasttwenty

years.Everyyear,therearesixmeetingsthroughouttheStateandeachDistrictDirector

attendsthesemeetings.Themeetingsareveryformalandeducationalanditisavenuefor

smallbusinessestovoicetheirconcernsandissues.Theobjectivesofthesemeetingsareto

discussandresolveanypendingissues,makeanypolicychanges,andproposeanyrule

makingdecisions.

Question2: SinceCaltransAvailabilityandDisparityStudyReportin2007,hastherebeenadifferenceinpastandcurrentrace-neutraleffortsusedbyCaltranstoincreaseDBEutilizationintheprofessionalservicesarea?

Yes,wehaveincreasedDBEutilizationintheprofessionalservicesareabybeingtransparent

inprovidingtheplanholderslisttotheSubssothattheycandirectlycontactthePrimes.

Thispromotesopencommunicationandnetworkingbetweenthesegroups.

Question3: Inyouropinion,shouldthesemeasuresbeconsistentlyusedorshouldotherproactiveapproachesbeusedinconjunction?

Wewillhavemorewhenourdisparitystudyiscompleted.Caltrans’overallgoalshave

increasedbecausetherehasbeenatrendintheeconomy.Currently,ourgoalis12.5

percent.

Question4: HasCaltransexperiencedanincreaseofDBEutilization?Ifso,canthistrendbeattributedtoCaltransproactiveapproachesormarketplaceconditions?

Ms.Morris’Response:SinceMs.Salaiscouldnotrespondtothisquestion,shereferredmetohercolleague,EstherMorris,butIwasnotabletoreachher.

Question5: WhataresomeofthebarriersencounteredbyDBEswhoparticipateinpubliccontracting?

Ms.Salais’Response:SomeofthebarriersencounteredbyDBEsareinsurance,bonding,promptpaymentand

justgettingtheirfootinthedoor.Also,thesamevendorscontinuetobeusedinsteadof

givingopportunitiestoothers.

Question6: HaveyounoticedadisparitybetweenMBEandWBEparticipationinCaltransprofessionalservicesagreements?Ifso,whatarethereasonsforthisoutcome?

Ms.Salais’Response:Intheprofessionalservicesarea,M/WBEsdoprettywell.InFY15,wehada15.2percent

commitmentofawardinourA&EcontractsandawardedtothreeDBEfirms.Iamnotsure

aboututilizationbecausewedonotgatherthedata.

Question7: SinceyouhavehadanextensivetrajectoryworkingintheDBEfield,arethereanydifferenceswiththeDBEparticipationintheconstructionandprofessionalservicesindustries?

Ms.Salais’Response:TheCouncilhasaverylowparticipationfromtheAfricanAmericanCommunity.Asaresult,

twoyearsagoanadhocsubcommitteewithintheCouncilwascreatedtoincreaseAfrican

AmericanparticipationwithDBEengineersandA&Econsultants.Theadhocsubcommittee

meetsduringthesametimeastheCouncilandtheymeetwiththeCaltransDirector.

Question8: WhatotherproactiveapproachesdoyourecommendthatCaltransshouldimplementtoincreaseDBEparticipationinitscontractingactivities?

Ms.Salais’Response:Currently,ourDBEdatabasehasfourthousandsevenhundredDBEslisted.

Question9: Wouldyouliketoaddanyothercomments?

Ms.Salais’Response:Nocomment.

AppendixDTelephoneInterviewQuestionstoOwnersofProfessionalServicesFirms

Question1: AreyouaMinorityBusinessEnterpriseorWomen-ownedBusinessEnterprisefirm?

Question2: HowlonghasyourfirmbeenworkingwithBART?

Question3: HowdoesyourfirmbecomeawareofBART’sbiddingopportunities?

Question4: IfyouarelistedonaBARTContract,haveyouperformedthelistedscopeofwork?Ifnot,pleaseexplainwhy?

Question5: Whattypeofcontractshaveyoubeenawardedandhowmuchhasbeenthedollaramount?

Question6: RecentlyBARThasexperiencedanincreaseofDBEutilization.CanthistrendbeattributedtoBART’sproactiveapproachesormarketplaceconditions?

Question7: Asaprimeconsultant,haveyouhiredanDBEsubconsultant?Ifso,whatbarriers(ifany)haveyouencounteredwhileworkingwiththesefirms.

Question8: Inyouropinion,whatrace-neutralmeasureshavebeenmoreeffectivewithincreasingDBEutilizationonBART’sprofessionalservicesagreementsandwhy?

Question9: WhatdoyourecommendBARTshoulddodifferentlytoincreaseitsDBEutilizationincontractingopportunities?

Question10: Doyouhaveanyadditionalquestionsorcomments?

AppendixD-1TelephoneInterviewMatrixof

AnswersfromOwnersofProfessionalServicesFirmsInterviewNo.1ThefollowingtelephoneinterviewwasconductedonApril29,2016andittookaboutanhourlongtoconclude.1. AreyouanM/WBEfirm?

MyfirmisaMBE.

2. HowlonghasyourfirmbeenworkingwithBART?IhavebeenworkingwithBARTforthelasteight(8)years;sevenyearsasaSubsandoneyearasaPrime.

3. HowdoesyourfirmbecomeawareofBART’sbiddingopportunities?

MyfirmisregisteredinBART’sVendorPortalSystem,whichallowsmetoreviewtheupcomingbiddingopportunities.IalsoattendthenetworksessionsconductedbyBARTandmostimportantlyIhearoffutureprojectsby“WordofMouth”.

4. IfyouarelistedonaBARTContract,haveyouperformedthelistedscopeofwork?Ifnot,pleaseexplainwhy?No,IhavenotperformedthelistedscopeofworkintwoBARTcontractsbecauseapparentlythatparticularscopeofworkhasnotbeenrequestedbyBARTstaff.

5. Whattypeofcontractshaveyoubeenawardedandhowmuchhasbeenthedollaramount?IhaveaClassA“GeneralEngineering”License.Myfirmconductsconstructionworktolocateundergroundutilityforprofessionalfirmswhothentransferthedataandresultsontherenderings.Myfirmhasbeenawardedten(10)contractsworth$2millionandoutofthat$1.4millionwasrecentlyawardedtomeasaPrimeonasinglecontracttoreplacebatteriesin16stations.

6. RecentlyBARThasexperiencedanincreaseofDBEutilization.CanthistrendbeattributedtoBART’sproactiveapproachesormarketplaceconditions?

Iagreethatnetworkeventsonaonetoonedialogue(10-15mins.),betweenthePrimesandSubs,havebeenveryeffectivemeansofcommunication.

7. AsaPrimeconsultant,haveyouhiredaDBEsubconsultant?Ifso,whatbarriers(ifany)haveyouencounteredwhileworkingwiththesefirms?

IhavenothiredaDBESubasofyet,butasaSubIfacedseveralchallenges.Someofthesechallengeswerethatnoonewantstogiveyouapieceofthepieunlesstheyareforcedtoandthatiswhytheydooutreach.Also,relationsbetweenthePrimesandSubsareveryimportantbecauseifyouhavebeenworkingwithaPrimeforaverylongtimeandifheorshelikesyourworkandreliabilityforcompletionthenyourfirmwillberepeatedlyusedonfutureprojects.AnotherchallengeiswhenyousubmityourbidtoaPrime,butyouneverhearwhyheorshedidnotchooseyourbid.IthinkitshouldbemandatedthatPrimesrespondtoSubs’requesttowhytheywerenotchosenforthesubcontractedwork.Therefore,publicagenciesawardingthecontractsshouldidentifydeficienciessuchastheseandrequirePrimestorespondtotheSubs’requestsandexplainthereason(s)totheDistrict.

8. Inyouropinion,whatrace-neutralmeasureshavebeenmoreeffectivewithincreasingDBEutilizationonBART’sprofessionalservicesagreementsandwhy?

Again,networkingsessionsareanexcellentmeasureaswellasunbundlingcontractsandtechnicalandsupportiveservices.

9. WhatdoyourecommendBARTshoulddodifferentlytoincreaseitsDBEutilizationin

contractingopportunities?

BARTshouldimplementmonetarypenaltiesonPrimeswhodonotmeettheirgoals.ThereshouldbepreferencegoalsanddollarvaluediscountforutilizingDBEfirms.BARTshouldhavestringentguidelinesinreviewingandfollowing-upwiththesubcontractorsorsubconsultantslistedonthePrimes’“GoodFaith”documentation.BARTstaffshouldinquirewhyPrimesdonothirethosefirmswhoofferedabidandaskthePrimewhyitendedupdoingmostorallofthescopeofwork.

10.Doyouhaveanyadditionalcommentsorquestions?Nocomments.

InterviewNo.2ThefollowingtelephoneinterviewwasconductedonApril29,2016andittookaboutfortyminutestoconclude.1. AreyouanM/WBEfirm?

MyfirmisaMBE.

2. HowlonghasyourfirmbeenworkingwithBART?

MyfirmhasbeendoingworkwithBARTasaSubsince2006andasaPrimeasoflastyear.ThereisabigdifferencebetweenaSubandPrimeawardedacontractbecauseasaPrimethereismorecommunicationwithBARTstaffregardingpayments,assignments,andalotofhandholdingfromBARTstaff.

TheBusinessOutreachCommitteeforumsarequarterlymeetingscomprisedofvariouspublicagencies,whichassistSmallBusinessesandDBEs.I’veattendedBARTNetworkingSessionsheldonceortwiceayear.Also,IamregisteredintheVendorPortalSystem.Anothereffectivemethodis“WordofMouth”fromfriendsintheindustry.

4. IfyouarelistedonaBARTcontract,haveyouperformedthelistedscopeofwork?Ifnot,pleaseexplainwhy?

No,IhavenotperformedthelistedscopeofworkonsomeoftheBARTcontractsbecausethePrimeendsupperformingthesubcontractedwork.

5. Whattypeofcontracthaveyoubeenawardedandhowmuchhasbeenthedollaramount?

AsaPrime,wehavebeenawardedaCMcontractworth$3millionforthree(3)years.Eachworkplanortaskorderhasbeenforanaverageof$300k-$500K.

AsaSub,wehavebeenawardedthree(3)contractsandonlyonewasworth$200K.

6. RecentlyBARThasexperiencedanincreaseofDBEutilization.CanthistrendbeattributedtoBART’sproactiveapproachesormarketplaceconditions?

Inmyopinion,theeconomyhasgottenbetter.BART’sGeneralManagerhasimplementednewinitiativeswiththeSmallBusinessCouncil.Also,SustainableRFQshaveset-asidecontractsforsmallbusinessesanditisgoodtohaveachangeinstaffwhotypicallyworkedwiththesamePrimes.

7. AsaPrimeconsultant,haveyouhiredaDBEsubconsultant?Ifso,whatbarriers(ifany)haveyouencounteredwhileworkingwiththesefirms?

Yes,thelackofappropriateresources(i.e.,haveproperBARTtraining)fromtheSubsbecausetheyhavealackofexperienceandtheyhavenotworkedforBARTinthatarea.

8. Inyouropinion,whatrace-neutralmeasureshavebeenmoreeffectivewithincreasing

DBEutilizationonBART’sprofessionalservicesagreementsandwhy?

Theracespecificgoalsthatexcludesomeracesdonotwork.Forexample,CaltransimplementedtheUDBEMethod,whichexcludedHispanicsandithadraceneutralgoals.Primeswereconfusedandpreferredtodotheworkthemselves.GeneralDBEwithoutspecifyingethnicityisbest.Mentor/ProtégéProgramisanotherexcellentrace-neutralmeasuretoimplementbecauseitworks.Forexample,theCalmentorPrograminDistrict4(OaklandArea)andDistrict6(FresnoArea)hasbeenveryeffective.SubslearnfromPrimeshowtodobusinessfromcontractualcodenottechnical.Activeattainmentreportingshouldbeconducted,notjusttomeetthegoalonaregularbasisanditshouldbesharedwiththepublic.BeingabletobetransparentwiththedataandshareitwiththepublicsothattheSmallBusinessCommunitycouldprovideinput.Forinstance,Caltranssharestheirdatareportseverytwo(2)monthsintheBayAreaandintheStatetotheSmallBusinessCouncil.Again,thispromotestransparencyanditallowsforthosewhoarereachingtheirgoalstobecomplemented.Anotherinitiativeisimplementingcapacitybuildingworkshops.Forexample,manyyearsago,BechtelCorporationandhighermanagementlevelconductedtrainingworkshopsonpreandpostphaseawardsupportiveandtechnicalservices.Iwasveryfortunatetoparticipateintheaccountingworkshopbecauseitassistedmetoset-upcostcodes.IfBARTisplanningtoconductsimilarworkshops,mysuggestionsaretoscheduleworkshopsforprofessionalservicesfirmsonWednesdaysandThursdaysstartingat4:30p.m.or5:30p.m.andtheyshouldlastforacoupleofhours.Theseworkshopsshouldbeaseriesofclassesforseveraldayswithparticipantsreceivingacertificateofcompletion.BARTshouldpartnerwiththeDepartmentofGeneralServicesandtheCaliforniaUnifiedCertificationProgramtooffercertificationclassesforSmallBusinessandDisadvantagedBusinessEnterprises.

Anotherexampleofaneffectiverace-neutralmeasurewasaboutnine(9)yearsagoIhadathree-yearcontractwiththeAlamedaCountyPublicWorkstooutreachtoSmallBusinesses.WeinvitedthePrimes(notjustthecostestimators,butthedecisionmakers)andtheSubstoreview80to90percentoftheplanrenderingsmonthsbeforethecontractswereouttobid.

Also,atthenetworkingsessions(i.e.,abriefmeeting(10-15mins)),thesponsorsshouldtakealookattheirloganddecisionmakersshouldbepresenttodiscussthecontract’sscopeofwork.

BARTisgoingontherightdirectionwiththechangestheyaremaking.Itshouldhaveannualcomparisonsonthedataandmakeittransparenttointernalandexternalstakeholders.

Areasthatarecorkyaredisparitystudiesbecausethesestudiesarebiaseddependingonwhoisworkingonit.Sometimestherearefirmsthatshouldnotbeincludedinthereport,buttheyareincluded.

10.Doyouhaveanyadditionalquestionsorcomments?

InterviewNo.3ThefollowingtelephoneinterviewwasconductedonMay6,2016andittookaboutanhourandfifteenminutestoconclude.1. AreyouanM/WBEfirm?

IamaDBEandWBEfirm.

2. HowlonghasyourfirmbeenworkingwithBART?

Ihavebeeninbusinessfortwenty-four(24)yearsandIhavebeenaSubforhalfofthattime.

Iamveryactivelyinvolvedwithavarietyofgroups.Ialsohavethreefull-timestaffwhoareinvolvedinbusinessdevelopmentandeachisresponsibleforcoveringacertainareaoftheregion.Also,IamregisteredwiththeIMSSheet,asystemthatreviewsnationwideallthevariouspublicagencies’biddingopportunities,andamonthlyfeeserviceispaidforthisservice.But“WordofMouth”seemstoworkthebestforobtainingbidopportunitiesbecauseitisallaboutbuildingtrustandrelationshipsamongthedifferentfirms.

4. IfyouarelistedonaBARTcontract,haveyouperformedthelistedscopeofwork?Ifnot,pleaseexplainwhy?No,itisanon-callcontractwithtaskordersandnothingrelatingtothescopeofworkhascomeupyet.Youneverknowwhattypeofworkisbeingissued.Also,therehavebeensituationswhenaPrimecallsyouonFridaylateafternoonrequestingthatyouprovideaninspectorbythefollowingMondaymorning.Thisisprettymuchimpossibletodobasedontheshortnotice.IwouldlikeBARTtorequestthatthePrimesbetransparentandaccountablefortheirwork.

5. Whattypeofcontracthaveyoubeenawardedandhowmuchhasbeenthedollar

amount?

Currently,IhaveacontractwithVTAontheBerryessaContract.Itis$2milliondollarsover3yearswithtwo(1)yearoptions.

6. RecentlyBARThasexperiencedanincreaseofDBEutilization.Canthistrendbeattributed

toBART’sproactiveapproachesormarketplaceconditions?

Itisacombinationofboth.Theattitudetowardtheprogramhasbeenchanging.BARTismoreforthright.IthasupgradeditsprogramandithasdoneagoodjobinthefrontendencouragingthemtobeSubs.Inmyopinion,Iliketogoafterlargeprojectsbecausetheyareheavilyscrutinizedmorefortheirparticipation.Itismoreprofitableforusthangoing

afterasmallcontractwhereweareaSubandnooneispayingattention.Itworks!WearetheSubofchoicebecausewedeliver.

Thistrendcanbeattributedtothemarketplaceconditionsbecausepeoplearereachingcapacityandthereisanawfullotofwork.Weonlyhaveanumberofpeoplewhocandothistypeofproject.Also,becauseofthespecializedworkwedo,wehavetakentheroleofbeinga“Finder”forthePrimesinseekingqualifiedfirmswhocandothescopeofworkinthecontract.

7. Asaprimeconsultant,haveyouhiredaDBEsubconsultant?Ifso,whatbarriers(ifany)haveyouencounteredwhileworkingwiththesefirms?

SomeofthebarriersencounteredwhileworkingwithDBESubshavebeenthattheycannotprovidethepeopletodotheworkandthereisalackofresourcefromtheirbehalf.NewemergingbusinessesshouldgothroughaBusiness101class.

8. Inyouropinion,whatrace-neutralmeasureshavebeenmoreeffectivewithincreasing

DBEutilizationonBART’sprofessionalservicesagreementsandwhy?

BARTshouldbemoreresponsibleinbeingassertivetomakesurethatwhathassaidhasbeenaccomplished.DBEshavetheresponsibilitytorunarespectablebusinessandtoprovidetherequestedwork.BARThasnotbeeneffectiveinitsapproach.BARTshouldencourageandhaveastrongsupportoftheDBECommunity.

Priortothepre-proposalmeeting,teamsarealreadyformedwaybefore.PeoplearewatchingandreviewingthebidopportunitiesviaBART’swebsite.Probablythreetofourweeksbeforethebidsaredueteamshavealreadyformed.

BARTshouldconductquarterlymeetingswiththePrimesandthedecisionmakers.Itshouldhavequarterlyoutreacheventstogoovertheproposalsthatarecomingoutthenextthreetosixmonths.Firsthourofthemeetingshouldbededicatedtotheupcomingprojectsanddeadlines.TheentireConstructionManagementSmallBusinessCommunityshouldbeinvitedandnetworkattheseevents.ThisisagreatplaceforDBEfirmstonetwork.

SomemeasuresincludethatBARTshould“TalktheTalkandWalktheWalk.”Theyshouldmakefirmsaccountablefortheiractionsandresponsibilities.Outreacheventsshouldbegeneralinnatureandnotcontractspecific.BARTshouldalsorewardpeoplethathavebeengoodstewardsofitsrequirementsformeetingtheirgoals.

10.Doyouhaveanyadditionalquestionsorcomments?

InterviewNo.4ThefollowingtelephoneinterviewwasconductedonMay13,2016andittookaboutfiftyminutestoconclude.1. AreyouanM/WBEfirm?

WeareaMBE/WBEfirm.

2. HowlonghasyourfirmbeenworkingwithBART?IhavebeenworkingwithBARTfortwenty-five(25)asaSub.

By“WordofMouth”.Ithasbeenthemosteffectivestrategythatpermitsfirmstoteamupwayinadvance(i.e.,sixtoninemonths).Also,existinglongtermworkingrelationshipswithPrimeshascontinuedtoallowustheopportunitytoteamupwithPrimes.WearealsoregisteredinBART’sVendorPortalSystem,whichprovidesweeklyupdatesoffuturebiddingopportunities.

4. IfyouarelistedonaBARTContract,haveyouperformedthelistedscopeofwork?Ifnot,pleaseexplainwhy?YesandNo.Wehaveandhavenotperformedthelistedscopeofwork.Anexampleincludes,thetimesourfirmhasbeenlistedaspartofthe“KeyResume”intheRFPsubmittal,whichindicatesthatwearepartoftheconsultant’steamandwewouldactivelyparticipateintheproject.However,itdoesn’tworkthatway.Ithascometoourknowledgethattheconsultantisusingitsownfolkstoperformtheworkinsteadofus.AnotherexampleisthattheconsultantwehaveteameduphasbeenawardedtheagreementandweneverreceiveacopyoftheNoticetoProceed,butwehavebeenaskedtopeerreviewthescopeofworkandsubmitForm60.Iwouldliketoknowwhatisthebestapproachtoconveytheseissues?AndhowdoweeffectivelycommunicatethistoBARTstaffandwhatistheprocessindoingso?Also,IwouldliketobeabletogrowbyusingBARTtofosterouropportunities.BARTisverypro-activeinusingSmallBusinessutilization,butithastograduallymovetowardaCheckandBalanceSystem.SomeoftherecommendationsincludeissuingsurveysasamechanismtoreceiveconstructivecriticismfromSubsandtherightoffirstrefusalforSubsbeforethePrimedoesthework.Althoughitisahugecommitmentandoneroustocomplywithcontractingrequirements,BARTstaffshouldmakePrimesmoreaccountableandtransparent.

5. Whattypeofcontractshaveyoubeenawardedandhowmuchhasbeenthedollaramount?

RecentlyasaPrimemyfirmwasawardedoneofthetwoCMagreementsat$3milliondollars.AsIsaidearlier,wehavebeenworkingwithBARTformorethantwentyyearsandIdon’tknowthetotalnumberofprojectsanddollaramountforeach.

6. RecentlyBARThasexperiencedanincreaseofDBEutilization.Canthistrendbeattributed

toBART’sproactiveapproachesormarketplaceconditions?IbelievethattheevolutionofpracticesofutilizationusedbyBARThasincreasedSmallBusinessutilization.Thenetworksessionsandgeneraloutreachforumshavebeenveryeffectiveforprofessionalservicesfirmstogettoknoweachotherbetter.HavingMicroSmallBusinessEntitySetAsidecontractsforprofessionalservicesfirmswouldincreasetheopportunityformoreSmallBusinessestoparticipateintheBART’sbiddingprocessandcontinuetofostertheeconomicdevelopmentandgrowthintheindustry.Inmyopinion,marketplaceconditionshavenotbeenatalleffectiveintheincreaseofDBEutilizationbecausethemarketisstrongertodaythansixyearsago.ThereisverylittlemoneytoinvestinbuildingandimprovingtheinfrastructureinCalifornia.

7. Asaprimeconsultant,haveyouhiredaDBEsubconsultant?Ifso,whatbarriers(ifany)haveyouencounteredwhileworkingwiththesefirms?

Yes,IhavehiredDBESubstoworkonsomeofourprojects,butIhavenotencounteredanybarrierswhileworkingwiththembecauseIhavealongworkingrelationshipwiththemandtheyhavethecapacitytoperformthesubcontractedwork.

8. Inyouropinion,whatrace-neutralmeasureshavebeenmoreeffectivewithincreasingDBEutilizationonBART’sprofessionalservicesagreementsandwhy?

OutreachmeetingsarethemostproductiveandeffectivemeasurestoincreaseDBEutilization.Forinstance,IhavebeentodifferentforumsinwhichBARTleadershiphavespokenaboutthevariousupcomingprojectsandthisprovidesanequalopportunitytoreceivetheinformationinatimelymanner.Aboutfouryearsago,BARTstaffhadquarterlymeetingswithGECandsustainingfirmsto“Check-In”anddiscusstheprojects’status.

9. WhatdoyourecommendBARTshoulddodifferentlytoincreaseitsDBEutilizationincontractingopportunities?

BARTshouldimplementMSBEsetasideagreementsforprofessionalservicesfirms,have“CheckandBalance”SystemandtheRightofFirstRefusalforSubs.

10.Doyouhaveanyadditionalcommentsorquestions?Nocomments.

AppendixEOn-LineSurvey/Questionnaire

toOwnersofProfessionalServicesFirms

FirmName:______________________________________

Howmanyyearshasyourfirmbeeninbusiness?________

AreyouaDBEorM/WBEFirm?_____Yesor_____No

1. HowoftendoesyourfirmreceiveawardedcontractsfromBART?_____Always ______VeryOften ______Often _____Sometimes _____Never

2. IfyouarelistedonaBARTcontract,haveyouperformedthelistedscopeofwork?Yes____orNo____Ifnot,pleaseexplainwhy?

____________________________________________________________________________________________________________

3. Arerace-neutralmeasureseffectivestrategiesinincreasingyourfirm’sparticipationinBART’scontractingactivities?_____Always ______VeryOften ______Often _____Sometimes _____Never

4. Whichrace-neutraleffortshavebeenthemosteffectivestrategiestoincreaseyourfirm’sparticipation?

________________________________________________________________________

5. Ifrace-neutralmeasuresarenotattributedtoyourfirm’sparticipation,aremarketplaceconditionsresponsible?Ifyes,pleaseidentifythemarketplaceconditions.

_____Yesor_____No?

________________________________________________________________________

6. Howfrequentlydoyouencounterbarriersinpubliccontracting?_____Always ______VeryOften ______Often _____Sometimes _____Never

7. Pleaseidentifythebarriers:________________________________________________________________________

8. Whatarethereason(s)thereisadisparitybetweenMBEandWBEparticipationinpubliccontracting?________________________________________________________________________

9. WouldyoucontinuedoingbusinesswithBART?IfYesorNo,pleasewhy?________________________________________________________________________

AppendixE-1MatrixofOn-LineSurvey/QuestionnaireandAnswers

fromOwnersofProfessionalServicesFirms

AppendixFBibliography

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2 TheSanFranciscoBayAreaRapidTransitDistrictDisadvantagedBusinessEnterpriseProgram.

Revised2012.Retrievedfromhttp://www.bart.gov/sites/default/files/docs/BARTDBECoreProgram.pdf

4 TheUnitedStatesDepartmentofTransportationFederalTransitAdministration.January14,2016.

AboutFTAandOurHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

5 TheUnitedStatesDepartmentofTransportationFederalTransitAdministration.January14,2016.AboutFTAandOurHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

AboutFTAandOurHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

7 TheSanFranciscoBayAreaRapidTransitDistrict.(2012).SanFranciscoBayAreaTransitDisadvantagedBusinessProgram.Retrievedfromhttp://www.bart.gov/ocr

8 OyezIITChicagoKentCollegeofLaw.IllinoisInstituteofTechnology.“AdarandConstructionInc.v.

Pena.”Retrievedfromhttps://www.oyez.org/cases/1994/93-1841

9 “TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.”MasonTillmanAssociates,LTD.April2009.Retrievedfromhttps://www.bart.gov/sites/default/files/docs/Final_Availability_and_Utilization_Study_4-6-09.pdf.

10 “TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.”

MasonTillmanAssociates,LTD.April2009.Retrievedfromhttps://www.bart.gov/sites/default/files/docs/Final_Availability_and_Utilization_Study_4-6-09.pdf

AboutFTAandourHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

12 TheUnitedStatesDepartmentofTransportationFederalTransitAdministration.January14,2016.AboutFTAandourHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

AboutFTAandourHistory.Retrievedfromhttp://www.fta.dot.gov/about.1403.html

16 TheSanFranciscoBayAreaRapidTransitDistrictDisadvantagedBusinessEnterpriseProgram.Revised2012.Retrievedfromhttp://www.bart.gov/sites/default/files/docs/BARTDBECoreProgram.pdf

18 TheSanFranciscoBayAreaRapidTransitDistrict.“DBEShortfallAnalysisFFY2015fortheFederal

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.

19 TheSanFranciscoBayAreaRapidTransitDistrict.“DBEShortfallAnalysisFFY2015fortheFederalTransitAdministration.”BARTOfficeofCivilRights.December29,2015.

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.21 TheSanFranciscoBayAreaRapidTransitDistrict.“DBEShortfallAnalysisFFY2015fortheFederal

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.24 TheSanFranciscoBayAreaRapidTransitDistrictDisadvantagedBusinessEnterpriseProgram.

27 StateofCaliforniaDepartmentofIndustrialRelations.“IntroductiontoPublicWorks.”Retrievedfromhttp://www.dir.ca.gov/public-works/publicworks.html

28 Wikipedia.DefinitionofProfessionalServices.Retrievedfrom

https://en.wikipedia.org/wiki/Professional_services

29 “TheSanFranciscoBayAreaRapidTransitDistrict’sGeneralManagerTalkingPoints.”DatedJune10,2015.RetrievedonJanuary31,2015.

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.31 TheSanFranciscoBayAreaRapidTransitDistrict.“DBEShortfallAnalysisFFY2015fortheFederal

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.32 TheSanFranciscoBayAreaRapidTransitDistrict’s“DBEDatabase.”BART’sOfficeofCivilRights.33 TheSanFranciscoBayAreaRapidTransitDistrict’s“SBE/MSBEDatabase.”BART’sOfficeofCivil

Rights.

34 CaltransCaliforniaDepartmentofTransportation“HowtoapplyforDisadvantagedBusinessEnterprise(DBE)Certification?”CaliforniaofBusiness&EconomicOpportunity.October2014.

TransitAdministration.”BARTOfficeofCivilRights.December29,2015.41 TheSanFranciscoBayAreaRapidTransitDistrict’sRequestforProposalNo.6M5099Districtwide

SmallBusinessSupportiveServicesdatedNovember10,2015.

44 TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.MasonTillmanAssociates,LTD.April2009.Retrievedfromhttps://www.bart.gov/sites/default/files/docs/Final_Availability_and_Utilization_Study_4-6-09.pdf

45 TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.MasonTillmanAssociates,LTD.April2009.Retrievedfromhttps://www.bart.gov/sites/default/files/docs/Final_Availability_and_Utilization_Study_4-6-09.pdf

46 TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.

60 AnAnalysisofthenewlegalmodelforestablishingset-asideprogramsforminoritybusiness

enterprise:“TheCaseoftheCityofRichmondvs.J.A.CrosonCompany.”Retrievedfromhttp://heinonline.org/HOL/LandingPage?handle=hein.journals/gonlr25&div=12&id=&page=

61 AnAnalysisofthenewlegalmodelforestablishingset-asideprogramsforminoritybusiness

enterprise:“TheCaseoftheCityofRichmondvs.J.A.CrosonCompany.”Retrievedfromhttp://heinonline.org/HOL/LandingPage?handle=hein.journals/gonlr25&div=12&id=&page=

62 AnAnalysisofthenewlegalmodelforestablishingset-asideprogramsforminoritybusinessenterprise:“TheCaseoftheCityofRichmondvs.J.A.CrosonCompany.”Retrievedfromhttp://heinonline.org/HOL/LandingPage?handle=hein.journals/gonlr25&div=12&id=&page=

63 OyezIITChicagoKentCollegeofLaw.IllinoisInstituteofTechnology.“AdarandConstructionInc.v.Pena.”Retrievedfromhttps://www.oyez.org/cases/1994/93-1841

64 OyezIITChicagoKentCollegeofLaw.IllinoisInstituteofTechnology.“AdarandConstructionInc.v.

Pena.”Retrievedfromhttps://www.oyez.org/cases/1994/93-1841

66 EstimationofRace-NeutralGoalsinPublicProcurementandContracting.SamuelL.MyersJr.andInhyuck“Steve”Ha.Pages251-256.Volume16.Issue3.Published2009.Retrievedfromhttp://experts.umn.edu/en/publications/estimation-of-raceneutral-goals-in-public-procurement-and-contracting(e8177d99-5b05-4a56-a298-c8e5523b5d5f).html

67 WesternStatesPavingCo.Inc.v.WashingtonStateDepartmentofTransportation.”FINDLAWfor

LegalProfessionals.Retrievedfromhttp://caselaw.findlaw.com/us-9th-circuit/1495055.html68 Rice,MitchellF.1991.“GovernmentSet-Asides,MinorityBusinessEnterprises,andtheSupreme

Court.”PublicAdministrationReview,51(2):114-22.RetrievedfromRetrievedfromhttp:///ww.jstor.org.stable/977104

69 Rice,MitchellF.1991.“GovernmentSet-Asides,MinorityBusinessEnterprises,andtheSupremeCourt.”PublicAdministrationReview,51(2):114-22.RetrievedfromRetrievedfromhttp:///ww.jstor.org.stable/977104

70 ChatterjiA.,ChayK.,FairlieR.“TheImpactofCityContractingSet-AsidesonBlackSelf-EmploymentandEmployment.”Retrievedfromhttp://ftp.iza.org/dp7298.pdf

71 ChatterjiA.,ChayK.,FairlieR.“TheImpactofCityContractingSet-AsidesonBlackSelf-

EmploymentandEmployment.”Retrievedfromhttp://ftp.iza.org/dp7298.pdf

72 Blanchflower,D.G.andJ.Wainwright(200%),“AnAnalysisoftheImpactofAffirmativeActionProgramsonSelf-EmploymentintheConstructionIndustry.”NationalBureauofEconomicResearch,WorkingPaper#11793.

73 ChatterjiA.,ChayK.,FairlieR.“TheImpactofCityContractingSet-AsidesonBlackSelf-

EmploymentandEmployment.”Retrievedfromhttp://ftp.iza.org/dp7298.pdf

74 Rice,MitchellF.1992.“JustifyingStateandLocalGovernmentSet-AsideProgramsThroughDisparityStudiesinthePost–CrosonEra.”Retrievedfromearch.proquest.com/openview/7263768edc4c2d4d42749d37b91aa8ca/1?pq-origsite=gscholar&cbl=42034

75 MartinH.,BernerM.,BluesteinF.“DocumentingDisparityinMinorityContracting:LegalRequirementsandRecommendationsforPolicyMakers.”PublicAdministrationReview,2007-WileyOnlineLibrary.512PublicAdministration.Retrievedfromhttp://onlinelibrary.wiley.com/doi/10.1111/j.1540-6210.2007.00733.x/abstract?userIsAuthenticated=false&deniedAccessCustomisedMessage=

76 MartinH.,BernerM.,BluesteinF.“DocumentingDisparityinMinorityContracting:Legal

RequirementsandRecommendationsforPolicyMakers.”PublicAdministrationReview,2007-WileyOnlineLibrary.512PublicAdministration.Retrievedfromhttp://onlinelibrary.wiley.com/doi/10.1111/j.1540-6210.2007.00733.x/abstract?userIsAuthenticated=false&deniedAccessCustomisedMessage=

77 MartinH.,BernerM.,BluesteinF.“DocumentingDisparityinMinorityContracting:Legal

RequirementsandRecommendationsforPolicyMakers.”PublicAdministrationReview,2007-WileyOnlineLibrary.512PublicAdministration.Retrievedfromhttp://onlinelibrary.wiley.com/doi/10.1111/j.1540-6210.2007.00733.x/abstract?userIsAuthenticated=false&deniedAccessCustomisedMessage=

78 Rice,MitchellF.1992.“JustifyingStateandLocalGovernmentSet-AsideProgramsThroughDisparityStudiesinthePost–CrosonEra.”Retrievedfromearch.proquest.com/openview/7263768edc4c2d4d42749d37b91aa8ca/1?pq-origsite=gscholar&cbl=42034

79 Rice,MitchellF.1992.“JustifyingStateandLocalGovernmentSet-AsideProgramsThrough

DisparityStudiesinthePost–CrosonEra.”Retrievedfromearch.proquest.com/openview/7263768edc4c2d4d42749d37b91aa8ca/1?pq-origsite=gscholar&cbl=42034

80 Enchautegui,MariaE.,MichaelFix,PamelaLoprest,SarahvonderLippe,andDouglasWissoker.1996.“DoMinority-OwnedBusinessesGetaFairShareofGovernmentContracts.”Washington,D.C.:UrbanInstitute.

81 “DisparityStudiesasEvidenceofDiscriminationinFederalContracting.”ABriefingBeforeTheUnitedStatesCommissiononCivilRightsHeldinWashington,D.C.,December16,2005.BriefingReport.May2006.U.S.CommissiononCivilRights.624NinthStreet,NWWashington,DC20425.Retrievedfromhttp://www.usccr.gov/pubs/DisparityStudies5-2006.

82 DisparityStudiesasEvidenceofDiscriminationinFederalContracting.”ABriefingBeforeThe

UnitedStatesCommissiononCivilRightsHeldinWashington,D.C.,December16,2005.BriefingReport.May2006.U.S.CommissiononCivilRights.624NinthStreet,NWWashington,DC20425.Retrievedfromhttp://www.usccr.gov/pubs/DisparityStudies5-2006.

83 GeorgeR.LaNoue,JohnC.Sullivan.“RaceNeutralProgramsinPublicContracting.”PublicAdministrationReview.Vo.55,No.4(Jul.–Aug.,1995),pp.348-356.Retrievedfromhttp://www.jstor.org/stables/977126.

84 Halligan,Patrick.1991.MinorityBusinessEnterprisesandAdHocHypotheses:GuidelineforStudiesbyLocalGovernments.UrbanLawyer23(2):249-79.

85 CaliforniaDepartmentofTransportation.“CaltransAvailabilityandDisparityStudy.”BBCResearch

andConsulting.June29,2007.

86 CaliforniaDepartmentofTransportation.“CaltransAvailabilityandDisparityStudy.”BBCResearchandConsulting.June29,2007.

87 BerkmanM.,MatthewJ.,RobertF.SantaClaraValleyTransportationAuthority.“MeasuringMinority-andWoman-OwnedConstructionandProfessionalServiceFirmAvailabilityandUtilization.”CRAInternational.December14,2007.

95 CaliforniaDepartmentofTransportation.“CaltransAvailabilityandDisparityStudy.”BBCResearch

andConsulting.June29,2007.96 CaliforniaDepartmentofTransportation.“CaltransAvailabilityandDisparityStudy.”BBCResearch

andConsulting.June29,2007.

97 BerkmanM.,MatthewJ.,RobertF.SanMateoCountyTransitDistrictandthePeninsulaCorridorJointPowersBoard.“MeasuringMinority-andWoman-OwnedConstructionandProfessionalServicesFirmAvailabilityandUtilization.”CRAInternational.April14,2008.

BerkmanM.,MatthewJ.,RobertF.SantaClaraValleyTransportationAuthority.“Measuring

Minority-andWoman-OwnedConstructionandProfessionalServiceFirmAvailabilityandUtilization.”CRAInternational.December14,2007.

98 BerkmanM.,MatthewJ.,RobertF.SantaClaraValleyTransportationAuthority.“Measuring

103 BerkmanM.,MatthewJ.,RobertF.SanMateoCountyTransitDistrictandthePeninsulaCorridor

JointPowersBoard.“MeasuringMinority-andWoman-OwnedConstructionandProfessionalServicesFirmAvailabilityandUtilization.”CRAInternational.April14,2008.

112 CaliforniaDepartmentofTransportation.“CALTRANSAvailabilityandDisparityStudy.”BBC

ResearchandConsulting.June29,2007.

115 U.S.DepartmentofTransportationFederalTransitAdministrationwebsite.Retrievedfromhttp://www.fta.dot.gov

116 Haas,Peter.“ClassNotes.”MTM283IndependentStudy(SpringA,2016).SanJoseSateUniversity.

119 Rice,MitchellF.1991.“GovernmentSet-Asides,MinorityBusinessEnterprises,andtheSupreme

Court.”PublicAdministrationReview,51(2):114-22.RetrievedfromRetrievedfromhttp:///ww.jstor.org.stable/977104

121 TheSanFranciscoBayAreaRapidTransitDistrictAvailabilityandUtilizationStudyFinalReport.”MasonTillmanAssociates,LTD.April2009.Retrievedfromhttps://www.bart.gov/sites/default/files/docs/Final_Availability_and_Utilization_Study_4-6-09.pdf

122 U.S.DepartmentofTransportationFederalTransitAdministrationwebsite.Retrievedfrom

http://www.fta.dot.gov

123 CaliforniaDepartmentofTransportation.“CALTRANSAvailabilityandDisparityStudy.”BBCResearchandConsulting.June29,2007.

BerkmanM.,MatthewJ.,RobertF.SanMateoCountyTransitDistrictandthePeninsulaCorridorJointPowersBoard.“MeasuringMinority-andWoman-OwnedConstructionandProfessionalServicesFirmAvailabilityandUtilization.”CRAInternational.April14,2008.

124 CaliforniaDepartmentofTransportation.“CALTRANSAvailabilityandDisparityStudy.”BBC

ResearchandConsulting.June29,2007. BerkmanM.,MatthewJ.,RobertF.SanMateoCountyTransitDistrictandthePeninsulaCorridor

125 SanFranciscoBayAreaRapidTransitDistrict“ProfessionalServicesUtilizationReport”DraftBoard

PresentationdateMarch2015.126 SanFranciscoBayAreaRapidTransitDistrict“ProfessionalServicesUtilizationReport”DraftBoard

PresentationdateMarch2015.127 SanFranciscoBayAreaRapidTransitDistrict“ProfessionalServicesUtilizationReport”DraftBoard

PresentationdateMarch2015.

130 GeorgeR.LaNoue,JohnC.Sullivan.“RaceNeutralProgramsinPublicContracting.”PublicAdministrationReview.Vo.55,No.4(Jul.–Aug.,1995),pp.348-356.Retrievedfromhttp://www.jstor.org/stables/977126.

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