Preparing an Adequate Shortfall Analysis and Corrective Action

Preparing an Adequate Shortfall Analysis and Corrective Action Plan

Shortfall Analysis Purpose of DBE Shortfall Analysis When is a Shortfall Analysis Required Elements in Drafting Shortfall Analysis Elements in Drafting Corrective Action Plan Exceeding DBE Goal 49 C. F. R. 26. 47(c) 2

What is a Shortfall? A recipient’s failure to meet its Triennial DBE Goal by the end of the fiscal year 3

Purpose of a DBE Shortfall Analysis • To identify the reasons recipients failed to meet their DBE goal in a fiscal year • Help identify means to increase DBE participation to achieve the DBE goal in the next fiscal year • Ensure compliance with the DBE rule • Increase DBE accountability on FTA funded projects and activities 49 C. F. R. 26. 47(c) 4

When is a Shortfall Analysis Required? If at the end of the fiscal year, Awards and Commitments < Overall DBE Goal = Shortfall Analysis and Corrective Action Plan REQUIRED 49 C. F. R. 26. 47(c) 5

Did Your Agency Meet Its DBE Goal? 1. Determine the total Awards and Commitments made during the respective fiscal year using Cell 8 A from June 1 st and December 1 st Semi-Annual Reports.

Did Your Agency Meet Its DBE Goal? 1. Determine the total Awards and Commitments made during the respective fiscal year using Cell 8 A from June 1 st and December 1 st Semi-Annual Reports. June 1 st Prime Contract Total Dollars (8 A) + December 1 st Prime Contract Total Dollars (8 A) = FY Total Awards and Commitments

Did Your Agency Meet Its DBE Goal? 2. Determine the total DBE Awards and Commitments during the fiscal year by adding cells 8 C and 9 C from June 1 st and December 1 st Semi-Annual Reports.

Did Your Agency Meet Its DBE Goal? 2. Determine the total DBE Awards and Commitments during the fiscal year by adding cells 8 C and 9 C from June 1 st and December 1 st Semi-Annual Reports. June 1 st DBE Awards/Commitments + December 1 st DBE Awards and Commitment = FY Total DBE Awards/Commitments

Did Your Agency Meet Its DBE Goal? 3. FY Total DBE Awards/Commitments ÷ FY Total Awards and Commitments = FY DBE Participation $6, 119, 400 (FY Total DBE Awards and Commitments) ÷ $74, 072, 092 (FY Total Awards and Commitments) = 8. 26% FY DBE Participation

Did Your Agency Meet Its DBE Goal? June 1 (8 A) + December 1 (8 A) = Total Awards and Commitments st st • Ex: June 1 st ($24, 163, 859) + December 1 st ($49, 908, 233) = $74, 072, 092 June 1 st (8 C + 9 C) + December 1 st (8 C + 9 C) = DBE Total Awards and Commitments • Ex: June 1 st ($5, 117, 013) + December 1 st ($1, 002, 387) = $6, 119, 400 DBE Total Awards and Commitments ÷ Total Awards and Commitments = DBE Participation • Ex: $6, 119, 400 ÷ $74, 072, 092 = 0. 0826 or 8. 26% DBE Participation 〱 Triennial DBE Goal = Shortfall • Ex: 8. 26% less than 10% Triennial DBE Goal = Shortfall

What If… Your FY 2014 -2016 is 10% Goal FY 2014: Achieved 15% DBE Participation = No Shortfall Submission Required FY 2015: Achieved 8. 7% DBE Participation = Shortfall Submission Required and due on December 29, 2015 FY 2016: Achieved 5. 9% DBE Participation = Shortfall Submission Required and due on December 29, 2016 12

Shortfall Requirements Timeframe: December 29 of respective year (90 days after the end of the fiscal year) FTA Approves: In Compliance FTA May Require: Modifications to overall goal methodology § Changes to RC/RN projections § Additional RC or RN measures 13

Shortfall Requirements Top 50 FTA recipients: – must perform a Shortfall Analysis, create a Corrective Action Plan, and submit these documents to FTA by December 29. 14

Shortfall Requirements Non-Top 50 FTA recipients: – must perform a Shortfall Analysis, create a Corrective Action Plan, and maintain these documents in a file for production upon FTA’s request or during an oversight review. 15

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage ü Overall Goal – Actual Achievement = Shortfall Percentage 16

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage q Race-Conscious/Race-Neutral Breakdown ü Projected RC/RN Attainment ü Actual RC/RN Attainment 17

Race-Neutral/Race-Conscious Breakdown: Effective Practice § Highlighting the RN/RC levels of DBE participation helps identify additional areas for improvement *FTA Funds*

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage q Race-Conscious/Race-Neutral Breakdown q Race-Neutral Measures ü Explain RN measures utilized to achieve DBE goal and whether they were effective 19

Race-Neutral Measures: Effective Practices Answer these questions: q. Were trainings and other outreach efforts effective? If no, why not? q. Did training materials address issues relevant to the DBE and small business community? q. Did DBE participation improve since the implementation of the small business element? q. Were contracts unbundled? If so, what kind of contracts? q. Did the contract solicitation process hinder DBE participation? If so, what corrective measures were taken? q. Was the Office of Diversity present during the contract solicitation process?

Race-Neutral Measures: Common Error Failure to specify which measures were (un)successful Error:

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage q Race-Conscious/Race-Neutral Breakdown q Race-Neutral Measures q Projects undertaken during the FY ü List FTA funded projects 22

FTA Funded Projects within the FY: Effective Practice § Displaying FTA funded projects in a table makes it easier to determine which projects attributed to the shortfall *FTA Funds*

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage q Race-Conscious/Race-Neutral Breakdown q Race-Neutral Measures q Projects undertaken during the FY q DBE participation on these projects ü List DBE attainment on each project 24

DBE Participation on each FTA Project: Effective Practice § Highlighting DBE commitment by project helps identify the levels of DBE participation per project *FTA Funds*

FTA Funded Projects and DBE Participation: Common Error Failure to discuss the FTA projects undertaken during the fiscal year and the level of DBE participation achieved during these projects. Error:

Elements in Drafting a Shortfall Analysis: q Shortfall Percentage q Race-Conscious/Race-Neutral Breakdown q Race-Neutral Measures q Projects undertaken during the FY q DBE participation on these projects q Reasons for the Shortfall ü Thoroughly explain 27

Specific Reasons for Shortfall: Effective Practice After collecting all relevant data, specifically state reasons for the shortfall Example:

Specific Reasons for Shortfall: Common Error Lack of Specificity! Explain why you did not meet your goal by evaluating: q. Projects with low level of DBE participation q. Whether these projects implemented RC or RN measures q. What went wrong generally

Elements in Drafting a Corrective Action Plan: q Describe all Corrective Action Measures 49 C. F. R. 26. 47(c) 30

Elements in Drafting a Corrective Action Plan: q Describe all Corrective Action Measures q Explain how proposed corrective actions will increase DBE Participation in upcoming fiscal year 49 C. F. R. 26. 47(c) 31

Elements in Drafting a Corrective Action Plan: q Describe all Corrective Action Measures q Explain how proposed corrective actions will increase DBE Participation in upcoming fiscal year q Provide timeline for implementation 49 C. F. R. 26. 47(c) 32

Specific Steps to Achieve Goal: Effective Practice Enhanced Race-Neutral Measures Explain what race-neutral measures can be improved or added to increase DBE participation Example:

Specific Steps to Achieve Goal: How to Get Back on Track Increase DBE participation • Explain how this will be achieved Strengthen race-neutral measures • Identify and implement effective race-neutral measures Implement a race-conscious component • Use all available evidence to determine whether race -conscious measures should be implemented

Specific Steps to Achieve Goal: Effective Practice Include dates and topics for outreach sessions that span throughout the FY • Example:

What to include in a Corrective Action Plan q Specific Steps to Achieve Goal in Upcoming Fiscal Year ü Increase DBE participation ü Strengthen race-neutral measures ü Implement a race-conscious component q Milestones for Implementing these Steps ü Timeline for implementation 36

Milestones: Effective Practice Include a detailed timeline for implementing all corrective actions Example:

Quick Reminder! Exceeding DBE Goal q If you exceed the overall goal in two consecutive years through the use of contracts goals, you must reduce your use of contract goals proportionately in the following years. 49 C. F. R. 26. 51(f)(4) 38

Quick Reminder! Exceeding DBE Goal q If you exceed the overall goal in two consecutive years through the use of contracts goals, you must reduce your use of contract goals proportionately in the following years. q NOTE: Only if you exceed your goal through race conscious measures. 49 C. F. R. 26. 51(f)(4) 39

Avoid Non-compliance Recipient is in non-compliance if ANY of the following occur: § Does not submit analysis and corrective actions to FTA § FTA disapproves the analysis or corrective actions § Does not fully implement corrective actions or FTA’s imposed conditions for acceptance 40