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Contracting with DOT Section IV

Disadvantaged Business Enterprise (DBE) Program

Overview of DBE Program

The Disadvantaged Business Enterprise (DBE) program is unique within the transportation sector and covers contracts let by state highway agencies, airports, transit authorities, and other state and local agencies that receive DOT funds.

DOT provides substantial financial assistance to state and local transportation agencies for their highway, transit and airport improvements programs. Under the DBE program, DOT requires that recipients set percentage goals, as appropriate, for the use of DBEs on projects in which these DOT funds play a part – based on a number of factors, including the availability of ready, willing, and able firms.

Each DOT-assisted State and local transportation agency is required to establish narrowly-tailored DBE goals. Then these DOT-assisted agencies evaluate their DOT-assisted contracts throughout the year and establish contract specific DBE subcontracting goals where these goals are needed to ensure nondiscrimination in federally-assisted procurements. The level of DBE subcontracting goals may vary from their approved DBE goal; however, at the end of the year, the amount of contract/subcontract awards to DBEs should be consistent with the overall goal.

The objective is to create a level playing field on which all firms can compete free from the effects of discrimination.

Note: The DBE program is administered and managed at the state and local level, and does NOT apply to Federal contracting with the U.S. Department of Transportation.

Definition of DBE

DBEs are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations.

African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.

Requirements for DBE Participation

To participate in the DBE program, a small business owned and controlled by socially and economically disadvantaged individuals must receive DBE certification from the relevant state– generally through the state Uniform Certification Program (UCP) (see Text Box below).

To be regarded as economically disadvantaged, an individual must have a personal net worth that does not exceed $750,000. To be seen as a small business, a firm must meet SBA size criteria AND have average annual gross receipts not to exceed $20.41 million. Size limits for the airport concessions DBE program are higher.

Roles and Responsibilities

State and Local Transportation Agencies

As recipients of DOT financial assistance, state and local transportation agencies are responsible to:

Certify the eligibility of DBE firms to participate in their DOT-assisted contracts;

Establish narrowly-tailored goals for the participation of disadvantaged entrepreneurs; and

Evaluate their DOT-assisted contracts throughout the year and establish contract-specific DBE subcontracting goals as necessary to achieve the overall goal of the agency.

The level of DBE subcontracting goals may vary; however, by the end of the year, the amount of contract/subcontract awards to DBEs must be consistent with the overall goal. Contact information for each state’s DBE liaison office is provided in Appendix D.

U.S. Department of Transportation

The Department is responsible for:

Developing the rules and regulations for the national DBE program;

Providing guidance and conducting oversight to make sure that these rules and regulations are following by the recipients of DOT funds; and

Considering appeals from state/local certification decisions.

Departmental contact information for the DBE Program is provided in Appendix D.

Uniform Certification Program (UCP)

The purpose of the UCP is to provide "one-stop shopping" to applicants for certification, such that an applicant is required to apply only once for a DBE certification that will be honored by all recipients in the state. In the past, a firm would be required to apply for certification as a DBE with each agency with which the firm wants to work. Under UCP, the firm applies one time with the state transportation agency, and if approved, that certification is shared by all other federal recipients in the state.