New York State Department of Transportation. Disadvantaged Business Enterprise (DBE) Goal for Federal Transit Administration (FTA) FFY

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1 New York State Department of Transportation Disadvantaged Business Enterprise (DBE) Goal for Federal Transit Administration (FTA) FFY Office of Civil Rights on behalf of the Public Transportation Bureau 50 Wolf Road, 6th Floor Albany, New York June 2013

2 SUMMARY The following proposed Disadvantaged Business Enterprise (DBE) goal and methodology has been developed by the New York State Department of Transportation (NYSDOT) in fulfillment of the requirements of 49 CFR Part 26. This amount excludes Federal Transit Administration (FTA) funds used to purchase transit vehicles. All FTA funds pass through NYSDOT to either municipalities, private operators of public transportation, non-profit agencies providing transportation services to target populations, public transportation authorities, or the host agencies for the metropolitan planning organizations (MPOs). NYSDOT developed its FTA DBE goal to include all sub-recipient contracting activities, and provide evidence of a consultative process. NYSDOT oversees the following programs that utilize FTA funds: Section 5303: FTA Funds are generally used for transportation plans and studies; Section 5304: FTA funds are generally used to support NYSDOT s core program for delivering the Transit program, but are also used for statewide and regional planning efforts to improve the delivery and integration of shared ride services in the State. Contracting opportunities exists for transportation consultants and software development; Section 5310: FTA funds are used exclusively for transit vehicle purchases and are not included in this analysis; Section 5311: FTA funds are mainly used for transit vehicle purchases, with another significant portion of funds going towards operating assistance for local and intercity services, the construction of bus garages and shelters in rural or small urban areas, and the purchase of support equipment (computers and shop equipment); Section 5316: FTA funds are mainly used for operating assistance and mobility management projects, but are also used for software purchases and other capital purchases as projects are approved in locally developed coordinated public transportation and human service plans. Although these funds have been repealed in the MAP-21 legislation for 2013, there are still funds and contracting opportunities through Section 5317: FTA funds are mainly used for operating assistance and mobility management projects, but are also used for software purchases and other capital purchases (including vehicles) as projects are approved in locally developed coordinated public transportation and human service plans. Although these funds have been repealed in the MAP-21 legislation for 2013, there are still funds and contracting opportunities through Previously, NYSDOT focused on the Section 5303 Program when setting the DBE goal because of the greater opportunity to subcontract to DBEs. The majority of FTA funding for Section 5311 is used for purchasing transit vehicles and operating assistance. However, the expansion of the 5311 program into commodities other than buses, the addition of two new funding sources (Sections 5316 and 5317), and the development of new programs under the Section 5304 funding requires us to rethink our process and improve both the goal setting and methodology as well as the sub-recipient outreach and reporting. This revised methodology includes all contracting opportunities for FTA funded programs. NYSDOT s FTA DBE program goal for FFY 2013 to 2015is 3.1%.

3 METHODOLOGY The following is the methodology that NYSDOT used to calculate the goal for FTA funded projects. DETERMINING THE BASE FIGURE (STEP 1) The base figure is calculated by dividing the number of ready, willing and able DBEs by the number of all available firms. The source of DBEs is the New York State Unified Certification Program (NYSUCP) DBE Directory. Firms are listed by North American Industry Classification System (NAICS) Codes in order to facilitate cross-referencing with the County Business Patterns data from U.S. Census Bureau Patterns (CBP). Transportation Studies and Plans Transportation studies and engineering services are performed on a statewide basis; therefore, the market area is New York State. Firms that are certified for the scope of work listed above were considered. The number of available DBEs and the number of available firms derived from the CBP for each code is as follows: # OF FIRMS TRANSPORTATION STUDIES AND PLANS 2012 NAICS US Title NAICS Code CBP DBEs Engineering Plans, Studies , Architecture , Surveying, Mapping Environmental Consulting Services TOTAL NUMBER OF FIRMS 5, % of DBEs to CBP 7.2% Software/Hardware Purchase, Development and Training Communications equipment, computer hardware, software, consulting services to install software or develop computer programs, and computer software training are performed on a statewide basis; therefore, the market area is New York State. The number of available DBEs and the number of available firms derived from the CBP for each code is as follows: # OF FIRMS SOFTWARE/HARDWARE 2012 NAICS US Title NAICS Code CBP DBE s Computer Systems Design Services , Other Computer Related Services Computer Training

4 Other Electronic Parts and Equipment TOTAL NUMBERS OF FIRMS 4, % of DBEs to CBP 2.0% Construction, Rehabilitation and Installation of Capital Goods Construction/rehabilitation projects include buildings such as bus storage garages, and bus shelters. Improvement contracts such as new roofs, parking lots, route signage, fare collection equipment, security equipment, miscellaneous shop equipment, and ADA vehicle equipment are also included. The majority of funds for these types of projects are geared towards rural and small urban areas. The market area will also be the county in which the project resides, along with the contiguous counties. The counties not in the scheduled project market areas because they are not in the rural and small urban markets are: Bronx, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, Sullivan, and Westchester. The number of available DBEs and the number of available firms derived from the CBP for each code is as follows: # OF FIRMS CONSTRUCTION OF CAPITAL GOODS 2012 NAICS US Title NAICS Code CBP DBE Commercial and Institutional Building Construction Poured Concrete Foundation and Structure Contractors Structural Steel and Precast Concrete Contractors Roofing Contractors Electrical Contractors and Other Wiring Installation Contractors Plumbing, Heating, and Air-Conditioning Contractors Site Preparation Contractors All Other Specialty Trade Contractors Fabricated Structural Metal Manufacturing Sign Manufacturing TOTAL NUMBER OF FIRMS 6, % of DBEs to CBP 2.2% Calculation of Base Figure NYSDOT then reviewed the anticipated projects for federal fiscal years to weight the relative availability of firms based upon the relative size of the three programs. The table below shows the anticipated NYSDOT program for FFY NYSDOT S ANTICIPATED FTA PROGRAM FFY Procurement Category Anticipated Funding % of Total Program Transportation Plans and Engineering Studies $ 2,206,839 21% Software/Hardware Purchase, Development and Training $ 1,409,664 13% Construction, rehabilitation and installation of capital goods $ 6,979,065 66% TOTAL $10,595, %

5 We then multiplied percentage of funding by the percentage of the available DBE s in each funding category to calculate the base figure: (7.2% x 21%) + (2% x 13%) + (2.2% x 66%) = 3.1%

6 ADJUSTING THE BASE FIGURE (STEP 2) Historical Utilization of DBEs NYSDOT s FTA funded program has lacked strategies and processes for goal setting or the identification of ways to improve participation of DBE and small businesses in the non-urbanized areas of the State. As a result, we do not believe it would be appropriate to make adjustments for past participation. Evidence from Disparity Studies NYSDOT reviewed The State of Minority- and Woman-Owned Business Enterprise: Evidence from New York 2010 disparity study by the State of New York and found the following: the study showed that Minority- and Women-owned Business Enterprises (M/WBEs) receive a substantially smaller share of the money spent to procure construction, commodities, services, and consultants than expected based on their availability. The study also examined the extent to which M/WBEs were utilized by NYS between SFY and compares the utilization rate to the availability of M/WBEs in the relevant market areas. The study inferred that M/WBEs are subject to discrimination in State contracting and subcontracting. In addition, the study also examined statistical disparities in credit/capital markets. Credit market discrimination can have an important effect on the likelihood that M/WBEs will succeed and might even prevent such a business from opening in the first place. Based on the analysis, the conclusion is that there is evidence of discrimination against M/WBEs in the NYS market area in the small business credit market. This discrimination is particularly acute for African-American-owned firms. In conclusion, this study revealed a disparity in M/WBE participation in business enterprise activity in NY s relevant market area, as compared to non-minority businesses. This difference offers a strong inference of the presence of discrimination. NYSDOT did not use this disparity study as part of the goal methodology for three primary reasons: The disparity study focused on state s M/WBE firms there are significantly more M/WBE firms than DBE firms because at the time of the study, the State s definition of M/WBE did not include the economically-disadvantaged criteria (i.e., PNW less than $41.32 million) that is included in the Federal DBE definition. The definitions of M/WBE do not align with Federal definitions of presumed socially and economically disadvantaged definition (i.e., different national origin, etc.) The number of engineering, surveying, and mapping services firms included in the data analyzed are a small portion of the sample utilized in the study, since the study considers all goods and services utilized by State agencies. Current Capacity of DBEs NYSDOT considered the current capacity of DBEs but found analytical evaluation to be difficult. Little data exists to indicate whether the DBEs currently being utilized have reached their maximum potential or that those that have not had the opportunity to participate on the federally-funded project have available capacity. In addition, the New York State Unified Certification Program

7 continues to receive new DBE applications that could increase the pool of available DBEs. Further, several very large FHWA funded projects, such as the Tappan Zee and Goethals bridge replacements, that will utilize engineering resources are underway or planned in New York and New Jersey, but the impact of these projects on the FTA funded program cannot be determined. Given the lack of data regarding the capacity of DBEs, no adjustment was made to the base figure. RACE NEUTRAL PARTICIPATION NYSDOT is projecting to achieve its DBE goal entirely through race neutral means. Our analysis of the Uniform Report of DBE Commitments/Awards and Payments filed with FTA for FFY supports maintaining a race neutral program. Below is a summary of the data over the previous three-year goal period. ANALYSIS OF PAST RACE NEUTRAL DBE COMMITMENTS AND PARTICIPATION Median Contracts Awarded 3,101,376 3,306, ,545 Commitments/ Race Neutral DBE $ 99, ,987 9,772 Awards % Race Neutral $/DBEs 3% 10% 1% 3% Payments on Contracts Completed 515, , ,484 Completed Race Neutral DBE Participation ,596 49,432 Contracts % Race Neutral Participation 0% 7% 9% 7% Source: Uniform Reports of DBE Commitments/Awards and Payments to FTA To support the attainment of an entirely race neutral goal for the current goal period, NYSDOT will be taking actions to improve our program administration. NYSDOT s Public Transportation Bureau will work closely with NYSDOT s Office of Civil Rights to develop a more robust program of outreach to sub-recipients for all FTA funded projects to ensure that the recipients of the funds are fully aware of the requirements for DBE participation. In addition, NYSDOT will expand its current compliance procedures to monitor participation on FTA funded contracts. Comments Due by August 31, 2013 Please your comments to: Or mail to: DBE Program Manager Office of Civil Rights 50 Wolf Rd Albany, NY 12232

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