DBE Program Regulations: Ownership

DOT has released Official FAQs on DBE Program Regulations. These questions and answers provide guidance and information for compliance with the provisions under 49 CFR part 26. Like all guidance material, these questions and answers are not, in themselves, legally binding or mandatory, and do not constitute regulations.

If there is a change in the ownership of a DBE-certified firm, is the firm automatically decertified?

• A certified DBE firm remains certified until and unless it is decertified. A recipient or UCP can decertify a firm only by using the procedures set forth in section 26.87.
• Under section 26.83(i), a certified DBE firm is required to notify the recipient or UCP in writing within 30 days of any material change in circumstances that could affect its ability to meet certification requirements, or any material change in the information provided in the firm’s application form, including those pertaining to ownership and contact information (see 5th paragraph of Affidavit of Certification, in Appendix F of 49 CFR Part 26).
• The DBE must send this notice to all recipients or UCPs with which it is certified.
• If the firm fails to provide this written notice within 30 days of the occurrence of the change, the firm is subject to decertification for failure to cooperate as provided in sections §26.73(c) and 26.109(c).
• Along with the notice of change, the DBE must attach supporting documentation describing the change in detail, including documentation that supports the disadvantaged status of any new owner(s) and their ownership and control of the firm.
• The recipient or UCP may require the firm to provide additional documentation if necessary to determine whether the new owner meets disadvantage, ownership, and control requirements, and it may conduct a new on-site review of the firm.
• If the firm’s notice and documentation concerning a change in ownership or other material change leads a recipient or UCP to determine that the firm has become ineligible (e.g., because the new owner is not a disadvantaged individual or does not control the business), the recipient or UCP should initiate a section 26.87 decertification proceeding. The firm remains certified pending the outcome of the proceeding.
• We urge recipients and UCPs to give priority to the review of the eligibility of firms whose circumstances have materially changed and, where appropriate, to conduct decertification proceedings expeditiously.