USDOT Issued Final Rule that Modernizes the DBE Program and ACDBE Program Regulations
https://www.transportation.gov/briefing-room/usdot-significantly-modernizes-disadvantaged-business-enterprise-program-and-airport USDOT will host trainings and informational sessions on the final rule starting Tuesday, April 23, 2024. Information to register is here. These Congressionally mandated programs were created over 40 years ago to address and remedy the continuing effects of past discrimination against small businesses owned and controlled by minorities, women, and other socially and economically disadvantaged individuals and continue today to prevent and address ongoing discrimination. Key changes (available ppt here) made to the DBE and ACDBE (Airport Concessions) programs include several provisions that will have a direct impact on eligible firms and the contractors that hire them, such as:
- streamlining the DBE and ACDBE certification and eligibility process
- adjusting the personal net worth (PNW) cap for inflation for small business owners, including excluding retirement assets from the calculation.
- formalizing guidance establishing successful COVID-19 flexibilities such as virtual on-site visits, to conserve certification and firm resources
- modernizing the rules for counting participation by DBE material suppliers and clarifying terminology
- addressing specific distinctive issues with the ACDBE programs involving FAA recipients including holdovers in the definition of “long-term exclusive leases” in the ACDBE program,
- replicating the DBE program’s small business element requirements for the ACDBE program
- making technical corrections and other updates such as expediting interstate reciprocity.
- expanding recipient reporting requirements to USDOT to gain greater knowledge of DBE/ACDBE characteristics, bidding/solicitation practices and utilization and overall program impact
- strengthening monitoring and prompt payment requirements
- enhancing ACDBE goal setting and reporting requirements
Another part of the USDOT update, is a tiered system for Federal Transit Agency (FTA) grant recipients. This new system will result in data collection from more FTA recipients and clarity around prohibited discriminatory practices, which will help the FTA ensure that contractors working on transit projects are not subjected to discrimination in the award and administration of FTA-funded contracts. Beginning in FY 2025, FTA will move to this tiered system for DBE program compliance:
- Tier I Recipients: FTA grant recipients who award more than $670,000 in FTA funds annually in 3rd party contracts are subject to all provisions
- Tier II Recipients: FTA grant recipients who award $670,000 or less in FTA funds annually are subject to a subset of provisions, such as the reporting requirements and the small business element.
The U.S. Department of Transportation Disadvantaged Business Enterprise (DBE) program aims to increase women and minority participation in highway, transit and Airport construction contracts.
The program is a goal-setting program, not a quota; DBE rules explicitly prohibit the use of quotas. The goal is a national participation rate of 10 percent, but highway aid grant recipients set their own goals for participation based on the number of DBEs in their local market. Recipients are not required to set their goal at 10 percent or any other level.
The DBE Program enhances the economy by promoting the formation of small businesses, creating new jobs, and developing economic growth for women. It is administrated by Departments of Transportation and airport authorities in all 50 states and U.S. territories. The DBE Program was initially authorized by Congress in 1983, and women were included in 1987. Congress has reauthorized the program for the past three decades.
During that time, DBE has proven to be an equal opportunity program that benefits all Americans by promoting the development and competitiveness of America’s small businesses. In fact, DBE is the most successful small business-contracting program for women.
Even while the program has made great strides for female contractors, they still have a long way to go. Non-DBEs still receive 89 percent of highway funding and 99 percent of all prime highway contracts. Women-owned small businesses continue to be underrepresented in the highway construction industry. Strong, viable, and qualified women contractors need the DBE Program just to open doors for fair and equal competition.
DBE Program Highlights:
- Created a level playing field for disadvantaged businesses in the highway, transit, and airport industries
- Created thousands of jobs
- Encouraged business growth on a national basis
- Provided equal opportunity to a diverse group of US citizens working hard to achieve the American Dream
