1. Increasing DBE Opportunities in Professional Services
Rachyl E. Smith
Civil Rights Program Manager
FHWA Ohio Division Office

2. Goals and Objectives
Understand the reasons for increasing DBE opportunities in professional services
Identify common barriers for DBE professional service firms
Examine a creative approaches to address the barriers
Stimulate discussion!
Send you home with more ideas and more questions!

3. Identifying DBEs in Professional Services
What types of firms are we describing when we discuss DBEs in professional services? Engineering, Architectural & Professional Services

4. Identifying DBEs in Professional Services
Engineering and design related services are defined as: program management, construction management, feasibility studies, preliminary engineering, design, engineering, surveying, mapping, or architectural related services (as specified in 23 U.S.C. 112(b)(2)(A) and 23 CFR 172.3). Examples from the audience?

5. Identifying DBEs in Professional Services
Types of DBEs in Professional Services
AND SO MUCH MORE…
Civil, Mechanical, Electric Engineering
Environmental Services
Mitigation Services
Hazardous Waste Services
Right of Way Services
Abstract & Title
Appraisal Services
Inspection Services
Bridge Inspection
Structural Steel Inspection
Land Surveyor
Traffic data services
Geotechnical Services
Security
Safety equipment and clothing vendor
Installation of voice, data, or video fiber optics and phone systems; installation of electrical cables, jacks, and wires; providing electrical equipment and supplies; radio, telephone, and other telecommunication equipment; testing/analyzing
Programmer, installer, or assembler of electronic devices, supplier of electronic communication equipment, bus and rail data control
Mobile computing, computing hardware, computing software
Data processing/in-house typing and mailing
Maintenance and janitorial services
Printing and publishing services
Office supplies, furniture, hardware, tools, equipment

6. How do consultant services differ?
Construction-Related Services
Consultant Services
Lowest, responsive bidder
Qualification based selection process
The Brooks Act requires the selection of engineering and design related services on the basis of demonstrated competence and qualifications for the type of professional services required and negotiation of fair and reasonable compensation for the services provided.

7. Why increase opportunities?
What are some reasons we might want to increase opportunities for DBEs in professional services?
Addressing a shortfall of the DOT’s Overall DBE Goal
Maximizing DBE participation on a variety of contracts
Addressing feedback from the DBE community
Building the experience and capacity of DBEs to compete
Any others?

8. What are some common barriers for DBEs in professional services?
DBEs need to attain the experience to grow their company but often cannot do so because prime contractors/consultants use the same subcontractors.
DBEs feel the need to develop their business from the ground up before work can be attained.
Prequalification process and experience required to become prequalified for certain types of work
Are these similar or different to barriers faced by other types of DBEs?

9. What are some common barriers for DBEs in professional services?
Unique to barriers faced by other types of DBEs?
For example, they need to build the structural components of their business (inventory control, accounting, finance, bidding)
Need experience to get the job and need the job to get the experience – particularly important for consultant service selection because the prime is influenced by having this DBE on its team when it

10. Creative Approaches to Addressing Barriers

11. Outreach and Supportive Services
Ohio DOT held DBE Roundtable events in each ODOT District between March and May 2017
Forum for open discussion
Opportunity to connect
Opportunity for ODOT to improve

12. Outreach and Supportive Services
Ohio DOT held DBE Roundtable events in each ODOT District between March and May 2017
Top Five Themes:
Prompt Payment/Return of Retainage
Education/Outreach
Unbundling/Smaller Contracts
Unions
Networking with Primes

13. Outreach and Supportive Services
Ohio DOT held DBE Roundtable events in each ODOT District between March and May 2017
Unbundling/Smaller Contracts
Issue Presented:
Size of ODOT contracts and available opportunities are too large for a small business to handle.
Proposed Solution:
Create smaller opportunities of a size and scope that a small business can handle and set-aside as an SBE set-aside contract
Create Consultant SBE Set-Aside Contracts (generally under 1 million dollars)
Next round, going to split out consultant services and construction firms
Created SBE certification that allows engineering firms to submit LOI for smaller projects out in the districts.. Selecting projects that are less complex in the districts under 1-2 million dollars to allow a small business to compete with the resources they

14. Outreach and Supportive Services
Online training
Business development
How to do business with ODOT
Reimbursement for business development activities
Expanding Mentor Protégé programs

15. DBE Participation Goals
What types of contracts can be counted toward DBE goals? (Section 26.3(a), 26.55,) (Posted - 4/12/99)
All DOT-assisted contracts, whether construction or non-construction (e.g., professional services, consulting, supplies) can be used for DBE participation.
DBE participation can be counted toward goals for any contract let by the recipient in which Federal funds listed in 26.3(a) participate.
If a recipient lets a contract to any type of contractor, and Federal funds listed in 26.3 participate in that contract, then the DBE's participation would count toward the recipient's DBE goals.

16. DBE Participation Goals
In order to be assured that the Consultant complies with this contractual requirement during the course of the work, Ohio Consultants are directed to:
(a) Prior to starting work, provide a written plan for DBE participation
(b) Provide an ongoing summary of DBE subconsultant amounts invoiced, for the current invoice and as a running total for the contract.
(c) Provide a quarterly report of the amounts actually paid to DBE subconsultants, and certification by the subconsultants of the amounts received.
(d) If the goal cannot be met, the Consultant will be required to establish good faith efforts (GFEs).
(a) Prior to starting work, provide a written plan for DBE participation including a breakdown by PDP step if applicable (or similar breakdown by task), description of work to be performed by each DBE subconsultant, and projected percentage of DBE participation during each step of the work.
(b) Provide an ongoing summary of DBE subconsultant amounts invoiced, for the current invoice and as a running total for the contract.
(c) Provide a quarterly report of the amounts actually paid to DBE subconsultants, and certification by the subconsultants of the amounts received.
(d) Provide a written explanation if the level of DBE participation falls below the level stated in the DBE implementation plan, including a plan to meet the goal. If the goal cannot be met, the Consultant will be required to establish good faith efforts (GFEs).

17. DBE Developmental Goals
In order to foster DBE participation in accordance with 49 CFR 26.39, the Department has implemented contract specific “Development Goals.”
Developmental goals incorporate changes to procedures for consultant selection, fee negotiation, contract administration and performance evaluation.

18. DBE Developmental Goals
Developmental Goals are intended to help DBE firms improve:
long-term development,
increase opportunities to participate in a variety of kinds of work,
handle increasingly significant projects, and
achieve eventual self-sufficiency.

19. DBE Developmental Goals
Qualifications based evaluation criteria are based on the expected outcomes of the efforts of the prime consultant and DBE/EDGE subconsultant to assist the DBE/EDGE subconsultant in:
Improving their long-term development;
Increasing their abilities to participate in a variety of kinds of work, including prequalification in new categories, and handle increasingly significant projects;
Developing their capability to utilize emerging technology and conduct business through electronic media;
Achieving eventual self-sufficiency.

20. Fee Negotiation
The Department will include a line item in the fee proposal to cover the direct and indirect costs incurred by the prime consultant and subconsultant for specific training and assistance to the DBE firm through the life of the agreement.
This is an initial “not to exceed” amount will be established for the contract.

21. DBE Developmental Goals
Contract specific Participation Goals will continue to be used by the Department on consultant contracts in tandem with Contract Development Goals to best meet the overall objectives of the DBE program.
(6) Providing services to help DBEs, and other small businesses, improve long-term development, increase opportunities to participate in a variety of kinds of work, handle increasingly significant projects, and achieve eventual self-sufficiency;
(7) Establishing a program to assist new, start-up firms, particularly in fields in which DBE participation has historically been low;
(c) You must actively implement your program elements to foster small business participation. Doing so is a requirement of good faith implementation of your DBE program.

22. DBE Developmental Goals
Contracts may include either: DBE Contract Participation Goals that establish a percent of the contract amount to be subcontracted to DBE/EDGE firms; OR
Contract Development Goals do not include a percentage of the fee or amount that must be subcontracted to DBE/EDGE firms.

23. Prequalification Exception
In order to assist DBE/EDGE firms in becoming prequalified with the Department, DBE/EDGE firms may perform services for which they are not prequalified in order to gain experience towards prequalification.
The prime consultant must actively supervise and check the work being performed.
What does this call into question?

24. Commercially Useful Function!
The use of DBEs on these contracts are not counted towards the DOT’s overall goal.

25. Selection Evaluation for Projects that Include Contract Development Goals
Selection Rating Form
For projects noted as having DBE or EDGE Contract Development Goals, an additional five (5) points will be allocated in the selection rating based on evaluation of the expected outcomes described in the letter of interest.

26. DBE Developmental Goals
Qualifications based evaluation criteria are based on the expected outcomes of the efforts of the prime consultant and DBE/EDGE subconsultant to assist the DBE/EDGE subconsultant in:
Improving their long-term development;
Increasing their abilities to participate in a variety of kinds of work, including prequalification in new categories, and handle increasingly significant projects;
Developing their capability to utilize emerging technology and conduct business through electronic media;
Achieving eventual self-sufficiency.

27. 5 – Point Rating
5 Points The expected outcomes and plan for achieving them will provide an opportunity for the DBE/EDGE firm to significantly improve in all four objectives listed above, including measurable improvement in one or more categories such as experience that would lead to prequalification in a new category or the ability to handle increasingly significant projects.

28. 4 Point Rating
4 Points The expected outcomes and plan for achieving them will provide an opportunity for the DBE/EDGE firm to significantly improve in at least three of the objectives listed above, including measurable improvement in one or more categories such as experience that would lead to prequalification in a new category or the ability to handle increasingly significant projects.

29. 3 Point Rating
3 Points The expected outcomes and plan for achieving them will provide an opportunity for the DBE/EDGE firm to significantly improve in at least two of the objectives listed above.

30. 2 Point Rating
2 Points The expected outcomes and plan for achieving them will provide workload for the DBE/EDGE firm, but opportunities to improve in more than one of the objectives listed above are lacking.

31. 1 Point Rating
1 Point The expected outcomes and plan for achieving them will provide workload for the DBE/EDGE firm, but provide only limited or no opportunities for the firm to improve their skills and capabilities in the objectives listed above.

32. Limitations of Developmental
Prime consultants are still using sub consultants that have the experience
Still anxiousness and trust issues about using firms that are not as developed as others.
Unbundling is still an issue

33. Questions to ask when you get back!
Who are the firms in my state that fall into the professional services?
How many are there? What percentage is this of our overall DBE pool?
Do these firms fall into a common category?
What do they voice as their primary barriers to doing work with our state?
Are these issues unique to being a DBE in the professional services or are they shared with DBE firms in the construction services?

34. Questions to ask when you get back!
Does my state set goals on DBE participation?
Do our DBE supportive service funding assist DBEs in professional services? Outreach? Mentor Protégé program? Training assistance?
Are DBEs in professional services assisted by my state’s Business Development Plan and Small Business Element?

35. THE END
Questions?