1. Colette Holt & Associates Transportation Research Board 94 th Annual Meeting Session 409 Simplifying the DBE Final Rule: The View from the Private Sector Transportation Research Board 94 th Annual Meeting Session 409 Simplifying the DBE Final Rule: The View from the Private Sector Colette Holt Attorney at Law 12 January 2015

2. Colette Holt & Associates Certification   Economic disadvantage  Ability to accumulate substantial wealth test adds one more factor  Will agencies use this?   Control  Shift to the presumption that a former owner is in control may impact minorities’ & women’s ability to buy into existing firms  Impact on capacity & scale?   Prequalification disconnected from certification  Does it matter without change in prequal standards?

3. Colette Holt & Associates Good Faith Efforts   Compliance as a matter of responsiveness or responsibility  Bid day chaos  5 day limit to submit compliance information  Plenty of time to bid shop  Longer is problematic for recipients so what does this change?  Suggestion: COB of bid day

4. Colette Holt & Associates Good Faith Efforts, cont.   NAICS codes  What about multiple codes?   Time for DBE solicitation  What does “practicable” mean?  Should recipient set a timeframe?   Role of price  No quantitative formulas BUT  Can't reject only because of price UNLESS “unreasonable”  Who eats increased costs of substitutions? Litigation risk?  Performance of other bidders = self-fulfilling standard?

5. Colette Holt & Associates Good Faith Efforts, cont.   Assistance to DBEs  No new standards or guidance  What is acceptable while maintaining the DBE’s independence?  Equipment  Personnel  Blurred roles  “Payroll jumping”?  Suppliers  Joint checks?  Price negotiations?

6. Colette Holt & Associates Additional Program Issues   Counting joint venture participation  Fee & conditions of the JV prime contractor  Increasing the utility of JVs   Counting race-neutral participation  Deletes reference to “strict low bid system”  Utilization in excess of the contract goal  Contract goal as the cause of utilization  Goal setting is not a science & conditions change during performance  Effect on the projection of future race-neutral participation

7. Colette Holt & Associates 7 Additional Issues for Future Rulemaking or Guidance   Proliferation of sham joint ventures   Inadequate commercially useful function reviews   DBELO reporting to CEO on paper only   Inadequate staff resources & training   Inconsistent regional & modal guidance   Imposition of penalties for poor program administration  Criminal prosecutions filling the void  Commercially useful function investigations  indictments  Lack of expertise of prosecutors  confusion of program standards

8. Colette Holt & Associates 8 Colette Holt 3350 Brunell Drive Oakland, CA 94619 773.255.6844 colette.holt@mwbelaw.com mwbelaw.com@mwbelaw