The Invest in America Act and its Impact on the USDOT DBE Program

Colette Holt, Colette Holt & Associates

The new “Investing in a New Vision for the Environment and Surface Transportation in America” Act (“Invest in America Act”), which replaces the FAST Act that expires September 30th, reauthorizes the USDOT DBE Program. The Act finds that while significant progress has been made, discrimination and related barriers continue to pose obstacles for minority- and woman-owned businesses seeking to do business in federally-assisted surface transportation across the nation. The DBE program size cap will be raised to $26,290,000 upon the Act’s effective date. The Act also retains the prompt payment rule and requires that the DOT Secretary take additional steps to ensure that recipients comply with it, including tracking and keeping records of complaints and making this information publicly available. Another DBE program change comes from the final rule enacted by the U.S. Small Business Administration (“SBA”) last December. This change modified the SBA’s method for calculating average annual receipts used to measure size standards for small businesses from a three-year averaging period to a five-year averaging period. This became effective January 6, 2020. To ease the transition and prevent companies with declining revenues from being penalized as the result of the automatic inclusion of higher year revenues, the SBA will allow firms to choose either a three-year or a five-year receipts calculation period until January 6, 2022. The DOT has advised its DBE program recipients to perform both calculations under § 26.65(b) of the DBE regulations. This provision provides that even if a firm meets the applicable NAICS code requirements, a DBE and its affiliates cannot exceed the overall DBE program cap of $23.98 million (as noted, soon to be adjusted to $26,900,000). If the firm does not exceed the program cap under either calculation, it is still considered small.