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Highlights

Pursuant to a legislative requirement, GAO reviewed the effectiveness of the Department of Transportation's (DOT) Disadvantaged Business Enterprise (DBE) program, focusing on whether: (1) states are meeting their DBE participation goals; (2) the Federal Highway Administration's (FHwA) efforts have been effective in ensuring state participation; (3) FHwA has effectively provided technical and business development assistance through its supportive services program; and (4) DBE program participation has resulted in business success.

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Recommendations

Matter for Congressional Consideration

Matter Status Comments
Because the FHwA supportive services program has been limited in effectiveness and duplicative of SBA programs, Congress may wish to consider terminating the program and limiting any future funding for business development assistance under the DBE program to services that address unique highway construction skill needs and do not duplicate services offered by SBA.
Closed - Not Implemented
Congress has not taken action on this matter for consideration, which was presented 2 years ago. In addition, DOT's Disadvantaged Business Enterprise Program, along with all federal affirmative action programs, is the subject of an ongoing executive branch review. The purpose of the review is to determine whether the program as constituted is consistent with the Supreme Court decision Adderand v. Pena, and if not, what changes need to be made.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Transportation 1. The Secretary of Transportation should direct the Administrator, FHwA, to issue additional guidance to the states and to FHwA field offices on procedures for following up when the states do not meet agreed DBE contracting goals. In particular, this guidance should contain explicit time frames for FHwA to: (1) respond to the states' justifications; and (2) follow up on directed corrective actions.
Closed - Not Implemented
DOT believed that existing procedures were functioning effectively to ensure that the problems identified in the report did not recur. In addition, DOT's Disadvantaged Business Enterprise Program, along with all federal affirmative action programs, is the subject of an ongoing executive branch review. The purpose of the review is to determine whether the program as constituted is consistent with the Supreme Court decision Adderand v. Pena, and if not, what changes need to be made. Pending the outcome of this review, revisions to program regulations have been placed on indefinite hold.
Department of Transportation 2. The Secretary of Transportation, in consultation with the Administrator, SBA, should develop performance measures for evaluating the progress of the DBE program in helping disadvantaged firms develop into self-sustaining businesses capable of competing for contracts on the open market.
Closed - Not Implemented
DOT planned to address this recommendation as part of the proposed revisions to its Disadvantaged Business Enterprise Program regulations. Those revisions have been placed on indefinite hold pending the outcome of the ongoing executive branch review of affirmative action programs governmentwide.

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