UPDATE: Caltrans announced it will hold consultation meetings for small businesses and interested stakeholders throughout the state regarding the following proposed changes to its Disadvantaged Business Enterprise program. The meetings are tentatively scheduled for various dates between May 8-19. Specific dates and locations will be posted in early April.
Caltrans is preparing to make drastic changes as to how it administers its Disadvantage Business Enterprise (DBE) program, and the modification would tremendously hurt contractors who participate in Caltrans projects.
The change is being driven by the Caltrans 2016 Availability and Disparity Study report and enforced by the Federal Department of Transportation.
The report claims that there is now parity with Caucasian females and subcontinent Asians, which means neither group would qualify toward the DBE goals set on any Caltrans jobs that receive federal funding.
As it stands, these two groups comprise almost one-third of the DBE pool that contractors use to achieve the current DBE goal. In addition to losing one-third of the eligible DBEs, Caltrans intends to increase the overall DBE goal of 12.5 percent to a whopping 17.6 percent.
AGC of California first discovered these intentions in September and immediately took a stand. As the only association opposing the issue as of now, we so far have been able to delay any action until spring.
In preparation, we formed a collective group comprised of DBE contractors, which has since held formal meetings with both the Federal Highway Administration and Caltrans. During those meetings, we discussed the major impacts that the changes -- eliminating qualifying groups and a drastic increase in the DBE percentage goal -- would have on our contractors. Both Caltrans and the feds claim their hands are tied and informed us that they must comply with the disparity report. However, they advised that if we could prove the disparity study to be faulty, then no changes would be made.
As a result, our group has hired consultant Olivia Fonseca with GLA-Public Private Enterprises, to thoroughly analyze the disparity report and identify weaknesses. Fonseca is the former head of the Caltrans Office of Business & Economic Opportunity. She is highly respected and understands the vast amount of data provided by the disparity report.
Fonseca is optimistic that we can demonstrate that there are fallacies within the report.
This fight is coming, and it will be here soon.
Bringing a consultant of Fonseca’s experience came at an unbudgeted expense, but one we truly believe is worth it when it comes to combating this challenge. To help us fight for you, we ask that every AGC member company that participates in Caltrans work projects consider contributing toward the consultant cost.
We encourage you to attend public hearings, send a representative or provide written comments (in the absence of attendance) to provide your insight regarding:
- The availability of disadvantaged and non-disadvantaged businesses
- The effects of discrimination on opportunities for DBEs
- Caltrans' efforts to establish a level playing field for DBE participation
- How these changes will impact your business.
If you have questions, need more information, would like to make a monetary donation, or would like to submit written comment, please contact
John Cooper at 916-371-2422.