In July of 2020, the California Department of Transportation (Caltrans) commissioned BBC Research & Consulting (BBC) to conduct a disparity study to assess whether minority- and woman-owned businesses face any barriers as part of Caltrans’s contracting processes. Information from the study, which was completed in August of 2021, helps Caltrans assess its efforts to encourage the participation of minority- and woman-owned businesses in local contracts and help inform any refinements that Caltrans might make to its implementation of the Federal Disadvantaged Business Enterprise (DBE) Program.
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Q. What is a Disparity Study?
A disparity study examines whether there are differences between:
- The percentage of dollars that minority- and woman-owned businesses received on an organization’s prime contracts and subcontracts during a particular time period (utilization); and
- The percentage of dollars that those businesses would be expected to receive based on their availability to perform on the organization’s prime contracts and subcontracts (availability).
The comparison between the participation of minority- and woman-owned businesses in an organization’s contracting and the availability of those businesses to perform that work is referred to as a disparity analysis. In addition to utilization, availability, and disparity analyses, disparity studies typically examine other quantitative and qualitative information about:
- Legal considerations surrounding the implementation of minority- and woman-owned business programs;
- Conditions in the local marketplace for minorities; women; and minority- and woman-owned businesses;
- Contracting practices and business assistance programs that the organization currently has in place; and
- Potential program measures for consideration as part of the organization’s implementation of minority- and woman-owned business programs.
Q. Why does Caltrans conduct a disparity study?
Caltrans conducts a disparity study to obtain evidence on which to base its overall Disadvantaged Business Enterprise (DBE) participation goal for United States Department of Transportation-assisted contracts, also known as Caltrans’ “overall DBE goal and methodology.”
Q. What is the authority for Caltrans to conduct a disparity study to develop its overall DBE participation goal?
Title 49 Code of Federal Regulations, part 26.45 (49 CFR 26.45).
Q. How often does Caltrans conduct a disparity study?
Caltrans is required to calculate an overall DBE participation goal for FHWA- and FTA-assisted contracts every three years, according to 49 CFR 26.45. Therefore, Caltrans conducts disparity studies approximately every three years.
Q. Who conducted Caltrans’ 2021 FHWA Disparity Study?
BBC Research & Consulting.
Q. What was the study period for the 2021 FHWA Disparity Study?
January 1, 2015 – December 31, 2019.
Q. What types of contracts were studied?
The disparity study examined prime contracts and subcontracts that the State awarded from January 1, 2015 through December 31, 2018. The study examined construction; professional services; and goods and other services contracts.
Q. What were the results of the 2021 FHWA Disparity Study’s availability analysis?
The study team determined that the relative availability of potential DBEs to perform work on Caltrans’ FHWA-assisted contracts is 22.2 percent. This is referred to as a base figure, also known as a “step-1 base figure.”
Q. Did the study team analyze results across racial/ethnic and gender groups?
Yes. The study team calculated disparity indices to compare the participation of minority- and woman-owned businesses on Caltrans contracts with the percentage of contract dollars they might be expected to receive based on their availability.
Q. What is a step-2 adjustment?
49 CFR 26.45 provides authority for Caltrans to adjust its step-1 base figure, 22.2 percent, upward or downward, based on a review of all evidence available in its jurisdiction.
Q. What were the results of Caltrans’ step-2 analysis?
Based on the findings in the disparity study and weighing the considerations for both an upward and downward adjustment, Caltrans has elected to use the base figure of 22.2 percent and not make an adjustment to this figure.
Q. What is the proposed race-conscious/race-neutral split for Caltrans’ proposed overall DBE goal of 22.2 percent?
18.3 percent race-conscious; 3.9 percent race-neutral.
Q. How did Caltrans arrive at its race-conscious/race-neutral split?
Caltrans considered past median DBE participation resulting from race-neutral measures during federal fiscal years 2016-2020 to project the portion of its overall goal that it will meet using race-neutral measures. Past median DBE participation resulting from 2016-2020 race-neutral measures was 4.2 percent.
Q. If FHWA approves Caltrans’ proposed overall DBE goal and methodology, for which years will the goal apply?
Caltrans’ proposed DBE goal of 22.2 percent applies to federal fiscal years 2022-2024. If approved by the FHWA, Caltrans would be required to meet this goal in each of the three federal fiscal years (i.e., 2022, 2023, and 2024).
Study analyses. The disparity study focuses on construction; professional services; and goods and other services contracts and procurements that Caltrans awards. The crux of the disparity study will be to examine whether there are any disparities between:
- The percentage of contract dollars that the Caltrans spent with minority- and woman-owned businesses during the study period (utilization); and
- The percentage of contract dollars that minority- and woman-owned businesses might be expected to receive based on their availability to perform specific types and sizes of Caltrans contracts (availability).
The study also examines other qualitative and quantitative information related to:
- Legal considerations surrounding Caltrans’s implementation of the Federal Disadvantaged Business Enterprise (DBE) Program;
- Marketplace conditions for minorities; women; and minority- and woman-owned businesses;
- Contracting policies and business assistance programs that Caltrans currently has in place; and
- Program measures for Caltrans to consider implementing to further encourage minority- and woman-owned business participation.
Methods. The third party consultant engages in the following disparity study tasks during the study period.
- Community meetings. The project team will conduct twelve community meetings in California – one for each Caltrans district. During the community meetings, the consultant will present information about the disparity study; answer any questions; and solicit participants for any verbal or written testimony that they would like to share regarding their experiences working in the local marketplace. Please participate and make sure your insights are included as part of the study process!
- Data collection. The project team will work with Caltrans to collect data on contracts that they awarded during the study period and the vendors that participated in those contracts.
- Data analysis. The project team will begin analyzing data that it collects from Caltrans. The consultant will begin assessing the subindustries that account for the majority of state contracting; the geographical area that is most relevant to Caltrans contracting; and the percentage of total contract dollars that minority- and woman-owned businesses received on Caltrans prime contracts and subcontracts during the study period.
- Availability surveys. The project team will begin conducting availability surveys with businesses in the relevant geographic market area that perform work that is relevant to state contracting. If we contact your business, please participate in the survey process to help ensure an accurate and comprehensive survey process!
- In-depth interviews. The study team will begin conducting in-depth interviews with business owners and trade association representatives throughout the local marketplace. The interviews will provide the study team will detail information about marketplace conditions related to starting a business, trying to grow a business, working with local public agencies, and a variety of other topics.
Study schedule. The next Disparity Study is tentatively scheduled to begin in late 2022.
Contact. If you have any questions or comments regarding the disparity study, please contact:
Office of Civil Rights
California Department of Transportation (Caltrans)
Caltrans recently completed a Disparity Study, which analyzed potential DBE availability and utilization in its Federal Highway Administration-funded contracts. Caltrans proposed overall Disadvantaged Business Enterprise (DBE) goal for federal fiscal years 2022-2024 is 22.2 percent for FHWA-funded projects. Caltrans encourages you to provide comment regarding its proposed overall DBE goal and methodology. We also welcome your suggestions on ways to improve contracting opportunities for certified DBE firms and small businesses.
To obtain comments, Caltrans has scheduled virtual public comment forums. Please visit https://tinyurl.com/CaltransPCF to view the meeting schedule and register.
If you are unable to attend a virtual forum to provide comments, you may submit comments via email to firstname.lastname@example.org OR by U.S. mail to:
Caltrans Office of Civil Rights
Attention: Disparity Study
1823 14th Street
Sacramento, CA 95814
All comments must be received no later than 5:00 pm on Wednesday, September 1, 2021
If you have any questions about the Caltrans Disparity Study, please contact Caltrans Office of Civil Rights at email@example.com.
The project team for the Caltrans 2021 Disparity Study includes five firms that possess expertise directly relevant to conducting the study in a manner that meets the highest industry and legal standards.
BBC Research & Consulting (BBC). BBC, which will serve as the prime consultant for the study, is a 50-year-old economic and diversity research firm based in Denver, Colorado. The firm has completed nearly 130 disparity studies for states, cities, transportation agencies, and other government organizations all across the country. BBC is also considered a national expert in helping organizations develop and refine their implementations of small and diverse business programs. The firm has provided expert testimony related to disparity studies and diverse business programs on several different occasions, most recently as part of the successful defense of the California Department of Transportation’s (Caltrans’) implementation of the Federal Disadvantaged Business Enterprise Program. For more information about BBC, please visit their website.
BBC Research & Consulting
(t) 303-321-2547, ext. 231
BBC Research & Consulting
(t) 303-321-2547, ext. 235
Davis Research, LLC. Davis Research is a certified small business enterprise that has grown to be one of the leading survey data collection firms in the nation. The firm consistently delivers sophisticated telephone and web-based surveys with seamless programming, supremely qualified surveyors, and a customized look and feel. In addition, it offers professional computer-aided telephone interviewing services from its industry-best call centers. Davis Research has worked with BBC for the past 15 years on myriad research projects, including disparity studies for the City of Boston, Sound Transit, and the Commonwealth of Virginia.
Action Research. Action Research is a DBE-certified research firm located in North San Diego County. The firm’s mission to bridge the gap between academic research and real-world applications. Action Research is an international leader in community-based social marketing and specializes in using state-of-the-art survey and research methodology to inform the development and evaluation of various community and social programs. Action Research possesses expertise in survey research, in-depth interviews, focus groups, and community engagement. In 2012, Action Research worked with SANDAG to conduct transit passenger surveys in order to measure passenger satisfaction before the Mid-City Rapid BRT route would be implemented in January 2013. Action Research completed similar work for SANDAG in 2009. The firm also worked with BBC to conduct the 2014 disparity studies for SANDAG and NCTD.
GCAP Services (GCAP). GCAP Services has developed and conducted training programs for DBE-related issues, including both live and on-line training workshops for DBE Program requirements following Western States Paving Company v. Washington State DOT. Edward Salcedo, President of GCAP is actively involved in various projects that require intimate understanding of the Federal DBE Program and the effectiveness of program measures.
Holland & Knight. Holland & Knight is a multi‐national law firm and has participated in more than 60 disparity studies with BBC. BBC employs Holland & Knight to develop the legal analysis and framework on disparity studies and to consult on legal issues. Holland & Knight also has extensive experience conducting in‐depth interviews; collecting and analyzing anecdotal evidence; and assessing potential DBE program measures. Holland & Knight develop the legal framework for the State of Indiana Disparity Study.
Luster National, Inc. Luster National, Inc. is a certified DBE headquartered in Mill Valley, CA that offers a variety of professional services including program, project, construction, quality, and risk management. Luster also has expertise in diversity program development and compliance and is fully committed to providing other small disadvantaged businesses the opportunity to grow and be successful. They have ample experience in designing and implementing Diversity Programs to include compliance with governance mandates. Some of the studies and assessments Luster has performed include operational assessments, regional workforce studies, organizational assessments, contract compliance studies, and community stakeholder studies.
The project team committed to engaging the public throughout the course of the California Department of Transportation Disparity Study. BBC hosted various events to help the public understand the purpose of the study and to offer opportunities for the public to submit testimony and comments about their experiences working in the local marketplace and with Caltrans and local agencies.
Community meetings. In partnership with Caltrans, BBC hosted twelve community meetings throughout California between November 2020 and February 2021. The Public Engagement Sessions flyer references these meetings.
During each meeting, the project team gave a presentation describing the disparity study, including its purpose, methodology, and the study schedule. Following the presentation, attendees were given the opportunity to ask questions and submit verbal or written testimony about their experiences working in the local marketplace and with Caltrans. Comments were treated confidentially and integrated as part of the project team’s analyses of local marketplace conditions without identifying the source.
Caltrans will provide access to relevant disparity study notes, presentations, and reports below. Please check back periodically for updated documents throughout the course of the study.
Project initiation presentation. Caltrans and BBC initiated the California Department of Transportation Disparity Study in July 2020 with a series of meetings with various Caltrans departments and representatives. BBC met with Caltrans to introduce the study, answer questions, and begin the process of understanding contracting and vendor data that Caltrans maintains.