The Department of Transportation (DOT) has had in effect for more than 20 years a policy of helping small businesses owned and controlled by socially and economically disadvantaged individuals, including minorities and women, in participating in contracting opportunities created by DOT financial assistance programs. The Department, through its Operating Administrations, distributes billions annually to help finance thousands of projects across the country. Approximately 85 percent of the assistance dollars is for construction. The major portion of the construction funds is allocated to State highway and transportation agencies for highway construction. The balance is provided to local public transit and airport authorities for mass transit and airport facilities.
Where It Started
In 1983, Congress enacted the first Disadvantaged Business Enterprise (DBE) statutory provision. This provision required the Department to ensure that at least 10% of the funds authorized for the highway and transit Federal financial assistance programs be expended with DBEs. In 1987, Congress re-authorized and amended the statutory DBE program. In the transportation legislation of that year, Congress, among other changes, added women to the groups presumed to be disadvantaged. Since 1987 DOT has established a single DBE goal, encompassing both firms owned by women and minority group members.
Primarily three major DOT Operating Administrations (OAs) are involved in the DBE program. They are the Federal Highway Administration, the Federal Aviation Administration and the Federal Transit Administration. The DOT DBE program is carried out by state and local transportation agencies under the rules and guidelines in the Code of Federal Regulations. (Title 49, Part 26). The FAA also maintains a separate DBE program for concessions in airports under (Title 49, Part 23).
How the Program Works
Among other things, DOT DBE regulations require recipients of DOT Federal financial assistance, namely, state and local transportation agencies, to establish goals for the participation of disadvantaged entrepreneurs and certify the eligibility of DBE firms to participate in their DOT-assisted contracts.
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.
Applying for Certification
In order for small disadvantaged firms, including those owned by minorities and women, to participate in the DOT-assisted contracts of State and local transportation agencies they must apply for and receive certification as a DBE. To be certified as a DBE, a firm must be a small business owned and controlled by socially and economically disadvantaged individuals. Recipients get information about firms through on-site visits, personal interviews, reviews of licenses, stock ownership, equipment, bonding capacity, work completed, resume of principal owners, financial capacity, and type of work preferred.
More information on certification can be obtained from the recipients’ DBE Certification Officers. The Office of Civil Rights receives and processes DBE appeals regarding certification decisions made by US DOT Grant Recipients.
How It’s Funded
State Departments of Highways and Transportation (SDH&T) receive supportive services funds from the Federal Highway Administration to help increase DBE participation in Federal-aid highway contracts. The SDH&T may decide to use the funds inhouse to provide the supportive services or hire consultants. Supportive services whether done by the State agency or consultants help DBE’s to compete in winning contracts. The services include research and development, training and on site-technical assistance, business management assistance, estimating assistance, and assistance in obtaining necessary financing and bonding.