After More than Two Years, USDOT Rejects WSDOT’s Recommendation to Reinstate Non-Minority Women-Owned DBEs into DBE Participation Goals

For the past several years, Ahlers Cressman & Sleight has been closely following news of Washington State Department of Transportation’s (“WSDOT’s”) exclusion of non-minority women-owned Disadvantaged Business Enterprises (“DBEs”)[1] from qualifying toward Condition of Award (“COA”) Goals on federally-funded projects.  See ACS’s letter of January 9, 2014 and blog articles of June 2, 2017 and September 21, 2017.  

In a striking—and long awaited—decision issued just days ago, USDOT rejected WSDOT’s recommendation to unwind the exclusion of non-minority women-owned DBEs from COA Goals, meaning women-owned DBEs in Washington remain excluded from DBE COA participation goals until September 2020.

As background, the DBE program is a program created by Congress with the goal of increasing women and minority-owned business participation in federally-funded transportation contracting.  To withstand constitutional scrutiny, each state must tailor its program to the specific discrimination found to exist in that state.[2]  To that end, every three years, WSDOT must conduct a “Disparity Study,” aimed at statistically measuring the “discrimination” in the marketplace. 

In December 2013, WSDOT announced it intended to seek a waiver from USDOT to exclude non-minority women-owned firms from qualifying for COA Goals, based on a Disparity Study from 2009-2011 (the 2012 Study).  The initial request to USDOT was made on March 28, 2014 and was supplemented on November 9, 2015 and March 3, 2016.  Many thought (and/or hoped) that the waiver would never be approved.  As detailed in our January 9, 2014 letter, ACS was critical of the methodology used as part of the 2012 Disparity Study and pointed out these criticisms in a detailed, lengthy letter to WSDOT.

Unfortunately, three years after the initial request, on December 8, 2016—and just before the change in the administration with the inauguration of President Donald Trump—USDOT granted the waiver. The waiver was implemented effective June 1, 2017.

Then, in September 2017, WSDOT obtained the results of a new Disparity Study (the 2017 Study) using a different consulting firm that found that non-minority women-owned firms did face discrimination that justified their participation in COA Goals.  Accordingly, WSDOT requested that women-owned DBEs be reinstated[3] toward qualifying toward COA Goals on federally-funded projects in Washington.  WSDOT’s request has been pending at USDOT for over two years, since September 2017.

Now, just days ago, USDOT has finally responded and rejected WSDOT’s request to reinstate women-owned DBEs toward qualifying toward COA Goals on federally-funded projects in Washington.  This means that the June 2017 exclusion remains in place—despite WSDOT’s position that it be reversed.

One troubling aspect of USDOT’s rejection is that it is based on the differing statistical methodologies of the 2017 Study versus the 2012 Study.  As set forth previously in ACS’s letter to WSDOT of January 9, 2014, we believe the methodology and metrics of the 2012 Study (not the 2017 Study) were flawed and unreliable that did not accurately represent true marketplace conditions.  In any event, Ahlers Cressman & Sleight continues to monitor this issue and will be providing further analysis on USDOT’s recent decision and the legal analysis supporting it at a later date.


[1] This change impacts only non-minority women-owned DBEs as minority women-owned DBEs will be classified under their minority status, not by gender. 

[2] Western States Paving Co., Inc. v. Washington State Dep’t of Transp., 407 F.3d 983, 988 fn. 3 (9th Cir. 2005).

[3] This change impacts only non-minority women-owned DBEs as minority women-owned DBEs will be classified under their minority status, not by gender. 

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