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Scathing Federal Review Could Cost Ohio Department of Transportation $1.3 Billion

The loss would be the worst possible outcome of a review that found ODOT has fallen short of federal regulations.

Mon June 22, 2015 - Midwest Edition
Lucy May

The Ohio Department of Transportation is at risk of losing more than $1.3 billion in federal funding used to pay for new roads, bridges and highway repairs throughout the state.

That would be the worst possible outcome of a review that found ODOT has fallen short of federal regulations when it comes to awarding contracts to so-called "disadvantaged business enterprises,” or DBEs, according to a previously unreported DBE Program Compliance Review of the Ohio Department of Transportation. DBEs are primarily companies owned by minorities and women.

The scathing review found deficiencies in every area of the program that transportation officials reviewed, from staffing to bidding to following through to make sure work got completed as promised.

“The feds came in in December, and they found pretty much our entire DBE program was in noncompliance,” said Kim Watson, administrator of ODOT’s Office of Equal Opportunity. “That means our federal funding could very well be suspended if we do not enter into a conciliation agreement with Federal Highway."

Watson stressed that she is confident it won’t come to that.

State officials have until July 20 to come up with a plan that federal officials agree will fix the state’s DBE program and steer it back into compliance with federal regulations. An ODOT spokesman said the department is ahead of schedule and expects to beat that deadline.

The Federal Highway Administration could decide to take over ODOT’s program for a while or could ask Congress to suspend the state’s funding.

But Watson said state officials are working hard to craft a plan that will get the federal government’s approval.

“We are very much working toward a conciliation agreement that will outline the steps to make sure our program is compliant and in the spirit of the law,” Watson said. “We are committed to that.”

U.S. Department of Transportation spokesman Doug Hecox confirmed that federal officials have the authority to withhold funding or take over Ohio’s program. But he said the federal government has never done either of those things.

“We’ve never allowed things to get that far,” Hecox said.

It’s “rare” for a state’s DBE program to be found noncompliant with federal regulations, Hecox said, but it has happened before.

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