What is the DBE Program?
The Disadvantaged Business Enterprise (DBE) program is a federally mandated program intended to ensure nondiscriminatory contracting opportunities for small business concerns owned and controlled by socially and economically disadvantaged individuals (S&ED) in the United States Department of Transportation’s (USDOT) highway, mass transit and airport financial assistance programs.
The DBE program is typically administered by the Department of Transportation of the various states, counties and airport authorities. In some locations, private firms are contracted to administer the program. DBE certification provides minorities, women and other eligible small businesses an opportunity to participate in highway, mass transit and airport contracts that are federally and state funded. The presumptive groups that are eligible for the DBE program are:
• African Americans
• Hispanic Americans
• Native Americans
• Asian-Pacific Americans
• Subcontinent Asian Americans
• Women
• Any additional groups whose members are designated as socially and economically disadvantaged by the Small Business Administration (SBA), at such time as the SBA designation becomes effective. Also considered eligible is any individual who is determined to be socially and economically disadvantaged on a case-by-case basis.
What is the threshold for personal net worth?
Under the old rule, the threshold for each owner(s) was no greater than $750,000. Only disadvantaged persons having a personal net worth (PNW) of less than $750,000 could be considered as a potential qualified DBE. Items excluded from a person’s net worth calculation include an individual’s ownership interest in the applicant firm, and his or her equity in their primary residence.
In January 2011, U.S. Transportation Secretary Ray LaHood announced a final rulemaking will adjust the personal net worth limit for DBE owners for inflation from the present $750,000 to $1.32 million. Firms that were formerly denied DBE certification because the could not meet the Personal Net Worth may now be eligible for certification.
Should I apply for DBE certification?
If your firm performs work or provides services that are used by government entities such as construction, professional engineering or architectural construction, trucking, manufacturing, fabricating etc. and meets the eligibility criteria of the program, then you should apply for DBE certification. Each entity that receives federal DOT funds are required to establish DBE goals for their projects. Prime contractors who bid on these projects must utilize DBE firms to meet those goals. You do not have to be DBE-certified to perform work on these contracts; however, opportunities increase if you are certified.
Am I eligible?
A firm (including its affiliates) must meet the requirements of the DBE program concerning group membership or individual disadvantage, business size, ownership and control. A firm must be at least 51 percent owned by socially and economically disadvantaged individuals who possess the power to direct or cause the direction of the management and policies of the firm and to make day-to-day, as well as long-term, decisions on matters of management, policy and operations.
As part of the application process you will be asked for documents to establish your eligibility. These documents include copies of your past three years business and personal tax returns, county and/or municipal occupational licenses or Business Tax Receipts, copies of any professional licenses, detailed resumed of all owners etc. The certifying agency will also conduct a site visit to your business.
The purpose of the document review and site visit is to ensure that your business is a bona fide company, that is independently controlled by you.
How do I apply for DBE certification?
You must complete and submit a “Uniform Certification Application,” plus all required/requested information to the certifying agency in your area.
Is there a cost to become certified?
No.
How long does it take to become certified?
The certification process usually takes approximately 90 days after receipt of the completed application and all supporting documentation. In some locations the process can take a lot longer. Submitting a complete application with all requested documentation will usually help decrease the processing time.
Who can I call if I have questions regarding the processing of my application?
Your application is assigned to a certification analyst following its receipt in the Bureau of Small Business Enterprises, and he/she can answer your questions. Or, if you used supportive services assistance to apply for certification, the consultant can assist you.
How long does the certification period last?
Five (5) years. However, you are required to annually submit a No Change Affidavit (and supporting documentation) by the anniversary date of your certification.
Once I am certified, is my firm name listed in a directory?
Yes, each state is required to have a Unified Certification Program (UCP) that maintains a Unified Certification Directory (Directory). Once certified, your firm’s name, address, contact information, work categories and work location preferences will appear in the Directory. This Directory is used by prime contractors, as well as other agencies and individuals, to provide a reference source for DBE firms to assist bidders and proposers in meeting DBE contract goals. Typically, counties and airports will also maintain their own list of DBE firms.
I have seen programs with the designations of MBE, WBE, SBE how are they different from one another?
MBE, FBE, WBE and PBE are acronyms for various state/county/local agency programs that provide contractual opportunities for disadvantaged, minority, female and woman-owned business enterprises. The acronyms are explained below:
• MBE – Minority Business Enterprises
• WBE – Woman-owned Business Enterprises
• SBE – Small Business Enterprises
Typically, these designations are race and ethnicity neutral meaning unlike the DBE certification there is no requirement that the owner of the company be a particular race or ethnicity. These designations are usually used in locally funded projects.
If my firm is SBA 8(a) certified, do I need to obtain DBE certification?
It depends. While similar in some respects, the Department of Transportation’s (DOT) DBE Program and the SBA’s 8(a) programs are different. If your company intends to perform road construction or other infrastructure projects, then you should obtain DBE certification. Similarly, if your intent is to perform as a concessionaire at an airport, you should obtain Airport Concessions Disadvantaged Business Enterprise (ACDBE) certification. Agencies that utilize DOT funding typically use the DBE and ACDBE certifications in their contract requirements. Whereas other government agencies will use the 8(a) certification. One advantage to having the 8(a) certification when applying for DBE certification is that the process can often be expedited.
