Summary: The Department of Transportation's (DOT) Disadvantaged Business Enterprise (DBE) program seeks to remedy the effects of current and past discrimination against small businesses owned and controlled by socially and economically disadvantaged persons and to foster equal opportunity in transportation contracting. This report provides information on (1) important changes made to the program since 1999; (2) characteristics of DBEs and non-DBEs that receive DOT-assisted highway and transit contracts; (3) evidence of discrimination and other factors that may limit DBEs' ability to compete for DOT-assisted contracts; and (4) the programs impact on costs, competition, and job creation and the impact of discontinuing the federal and nonfederal DBE programs. GAO found that the program has changed significantly since DOT issued new regulations in 1999 in response to a 1995 Supreme Court decision that heightened standards for federal programs that use race or ethnicity as a criterion in decision-making. The new regulations overhauled the DBE goal-setting process. For example, states and transit authorities are no longer required to justify goals lower than 10 percent--the amount identified in the statutory DBE provision. Rather, goals are to be based on the number of "ready, willing, and able" DBEs in local markets. GAO was unable to determine the characteristics of DBE participants because of a lack of information. Without this information, it is impossible to define the universe of DBEs, compare them with the transportation contracting community as a whole, or gain a clear understanding of the programs impact. DOT does not systematically track information on discrimination complaints filed by DBEs. Although DOT receives written discrimination complaints filed by DBEs, it could not provide the total number of such complaints, the total number of investigations launched, or the outcomes of the investigations.
