FHWA Signs Agreement with Washington State DOT for DBE Program Improvements

Federal Highway Administration
20 March 2014

FHWA 05-14
Thursday, March 20, 2014
Contact: Doug Hecox
Tel: 202-366-0660

WASHINGTON – The U.S. Department of Transportation's Federal Highway Administration (FHWA) and the Washington State Department of Transportation (WSDOT) today signed a conciliation agreement to ensure the contractor on the Alaskan Way Viaduct Replacement project meets its contractual obligations regarding the use of disadvantaged business enterprises (DBEs) and to promote a stronger statewide DBE program.

"This agreement assures that the intended ladders of opportunity for small businesses throughout the state will be real," said U.S. Transportation Secretary Anthony Foxx. "Everyone benefits when the federal government and WSDOT take seriously their shared commitment to helping DBEs and an inclusive economy. Where we find programs out of compliance with federal requirements, we will take all necessary and appropriate steps to ensure opportunity."

The agreement lays out a plan to rectify numerous problems FHWA identified throughout WSDOT's DBE program last fall, including the prime contractor falling short on efforts to meet its contractual commitment of achieving 8 percent or more participation by small or disadvantaged businesses on the Alaskan Way Viaduct Replacement project.

Among other provisions, the agreement requires WSDOT to actively monitor the contractor's efforts to expand opportunities for DBE firms through actions such as targeted outreach to DBEs, easing bonding requirements for low-risk contracts and unbundling large pay items to facilitate DBE participation. In addition, the contractor will hire an independent DBE program coordinator, who will report directly to WSDOT, to evaluate the contractor's progress toward meeting the project's DBE goal.

By calling on the state to conduct periodic program-level reviews and ensure it meets its own DBE participation goals, the agreement reaffirms the importance of DBE businesses to the Alaskan Way Viaduct Replacement project and hundreds of other projects statewide and reduces the risk of withholding federal funds or other sanctions.

"FHWA is strongly committed to the DBE community, and we will continue to closely monitor efforts in Washington and all other states to create opportunities for DBEs and other small businesses," said FHWA Deputy Administrator Greg Nadeau. "We applaud the seriousness with which WSDOT responded to our findings and welcome its efforts to enhance DBE opportunities on the Alaskan Way Viaduct Replacement project as well as strengthen its overall DBE program."

Last November, after a detailed investigation, the FHWA directed WSDOT's leadership to take all appropriate actions against the Alaskan Way Viaduct Replacement project's prime contractor, Seattle Tunnel Partners (STP), to enforce the contractual commitments to make good faith efforts to work with DBEs. FHWA also directed WSDOT to identify specific actions STP should take to ensure the contractual DBE participation goal is met by the project's completion date and to reform its departmental DBE program plan to ensure that such problems would not happen again.