Attorneys for the Pacific Legal Foundation notified the Federal Railroad Administration (FRA) that actions by the California High Speed Rail Authority (CHSRA) do not comply with federal law. PLF’s letter to FRA, dated August 24, 2012, informs the federal agency that CHSRA’s recent adoption of a 10% goal for the participation of Disadvantaged Business Enterprise (DBE) contractors appears to violate the federal DBE regulations at Title 49 Code of Federal Regulations (C.F.R.) Part 26. Businesses owned by minorities and women are presumed to be disadvantaged.
The CHSRA board members voted to approve the 10% goal for minority and women contractors even though CHSRA lacks a disparity study, or any other “demonstrable evidence” of the availability of contractors who are ready, willing, and able to participate on its contracts, as federal law requires.
CHSRA’s approval of the 10% DBE goal is unjustified. It is based entirely on CHSRA’s belief that this national aspirational goal, stated in 49 C.F.R. § 26.41, may be adopted by federal-aid recipients as their overall DBE goal. CHSRA is wrong. The federal DBE regulations specifically prohibit the very actions taken by the CHSRA board members. DBE expert, John Sullivan agrees, saying the law is clear that federal-aid recipients cannot simply rely on either the 10 percent national goal, a previous overall goal, or past DBE participation rates without reference to the relative availability of DBEs in the local market.
CHSRA claims it must adopt a DBE goal to comply with requirements by the Federal Railroad Administration. But the FRA’s own website clearly warns that the “FRA does not have the statutory authority to administer a DBE program.” PLF previously cautioned CHSRA board members that the adoption of the national 10% goal, without any measure of the number of DBEs who could perform work on its local contracts, had no basis in law.