DBE Appeal Case Brief: R.E. PAGE CONSTRUCTION, LLC; Ref No.: 14-0061

R.E. PAGE CONSTRUCTION, LLC; Ref No.: 14-0061
July 31, 2015

Brief Synopsis of the Case:

Montana Department of Transportation (MDT) decertified a DBE firm after receiving a complaint from a competitor. Initially, MDT alleged that the firm was ineligible for certification because: 1) the initial certification was based on factually erroneous information and misrepresentations submitted by the firm; and 2) changes in the firm’s circumstances since certification rendered it unable to meet control eligibility standards.

Apparently, the owner sought a decertification hearing pursuant to 49 CFR 26.87(d). During the hearing MDT provided evidence that for a period of seven months (following an injury to the DBE company) a non-socially and economically disadvantaged individual had run the company in the owner’s absence.

Holding:

On appeal the DOT reversed MDT decision because MDT had failed to evaluate the firm’s eligibility based on present circumstances. DOT cited Section 26.73 § (b) (1) which states, “you must not refuse to certify a firm based on historical information indicating a lack of ownership or control of the firm by socially and economically disadvantaged individuals at some time in the past, if the firm currently meets the ownership and control standards of this part.”

Analysis:

This case is important because it shows how complaints by competitors can jeopardize a firm’s DBE certification especially when the agency with oversight fails to follow the DBE regulations. Here, while there were two issues that formed the initial bases for the decertification, MDT was only able to make a case for one: changed circumstances. And that issue was improper because the changed circumstances were temporary and had been rectified by the time the decertification hearing took place.