Disadvantaged Business Enterprise Program (DBE)
Issue: The Disadvantaged Business Enterprise Program (DBE) is a legislatively mandated USDOT program that applies to Federal-aid highway dollars expended on federally-assisted contracts issued by USDOT recipients such as State Transportation Agencies. The U.S. Congress established the DBE program in 1982 to:
- Ensure nondiscrimination in the award and administration of DOT-assisted contracts; (DBE Program);
- Help remove barriers to the participation of DBEs in DOT-assisted contracts, (DBE Program); and
- Assist the development of firms that can compete successfully in the marketplace outside of the DBE program (DBE Supportive Services).
Background:
The DBE program ensures that federally assisted contracts for highway, transit and aviation projects are made available for small business concerns owned and controlled by socially and economically disadvantaged individuals. Section 1101(b) of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), reauthorized the DBE program. The program is administered by the three modal administrations (i.e., FHWA, FTA, and FAA) with the Federal Highway Administration (FHWA) maintaining a significant stewardship role for the program.
Implementation of the DBE program has been guided by USDOT regulations found at 49 CFR 26. The U.S. Court of Appeals for the Ninth Circuit rendered a decision in 2005 that significantly impacted the ability of State Transportation Agencies (STAs) within that Circuit to set race-conscious measures in implementing their DBE programs. The STAs within the Ninth Circuit are now required to conduct disparity studies to determine whether discrimination and its effects have occurred sufficiently to support the use of race-conscious measures. While the decision currently only impacts the Ninth Circuit's STAs, it is conceivable that, over time, the remaining STAs will be required to implement a similar process.
The Ninth Circuit decision, along with continued review and investigation of the program by the Office of Inspector General (OIG) due to it being a focal point in the OIG's targeting of fraud and abuse in federally funded programs, could result in an increased investment (both in time and expenditure of Federal funds) in oversight and administration of the DBE program by FHWA, at both Headquarters and field levels. The investment to date includes the development of a DBE program technical assessment tool that will enable FHWA Division Offices and STAs to identify and assess their technical training and assistance needs for a more effective administration of the DBE program. The USDOT's Office of General Counsel completed its review of the tool; it is currently under review by the Investment Research Board (IRB).
Key FHWA Stewardship/Oversight Responsibilities:
- Ensure that all FHWA recipients have an approved DBE program that is being implemented in accordance with regulations and reflects progress in meeting program objectives;
- Reduce fraud and ensure that the program benefits only qualified businesses;
- Ensure that recipients receive appropriate training and technical assistance; and
- Manage emerging risks associated with DBE Program delivery. (Note: At the 2007 FHWA Spring Business Meeting, the DBE Program was ranked as one of the Agency's top ten program risks.)
DBE/SS Program:
The DBE Supportive Services (DBE/SS) Program is one that has been consistently operated as an adjunct to the DBE program; statutory authorization exists for the FHWA's implementation of the program. The primary purpose of the DBE/SS is to provide training, assistance, and services to DBEs certified in the DBE program so as to increase their activity in the program, and to facilitate the firms' development into viable, self-sufficient organizations capable of competing for, and performing on Federally- assisted highway projects. Since 1982, Congress has authorized up to $10 million, annually, to accomplish these objectives.
FHWA annually allocates the DBE/SS funds authorized by Congress to State Transportation Agencies (STAs) for the purpose of carrying out a DBE/SS program. To enhance the effectiveness of the program, FHWA created a performance-based DBE/SS model program, designed to assist the FHWA, STAs and other interested parties in developing, conducting, and administering a cost-effective DBE/SS program. A key component of the model program is the requirement that STAs develop an annual performance-based Statement of Work that includes clearly measurable goals and objectives.
Points of Contact:
Martha Kenley
National DBE Program Manager
(202) 366-8110
JoAnne Robinson
Senior Attorney-Advisor
(202) 366-1346
Candace Groudine
Director, External Civil Rights Programs
(202) 366-4634
