New changes to the net worth requirements for DBE Certification provides new opportunities for many companies. Currently, in order to be certified as a Disadvantaged Business Enterprise (DBE) and take advantage of opportunities to participate in federally funded highway, transit and airport projects a person or company must meet several criteria including a limit on their personal net worth (PNW). 

For years, participants in the Department of Transportation’s  DBE certification program have been pushing for an increase in the program’s PNW requirement.  Recently, U.S. Transportation Secretary Ray Lahood announced a final rule adjusting the personal net worth limit for DBE owners for inflation from the present $750,000 to $1.32 million.  The current limit was set in 1989 and has not been adjusted since.

The effective date of the change is February 28, 2011. DOT has provided the following guidelines for processing DBE applications during the transition from the old rule to the new rule:

• DBE Applications that are currently pending should be reviewed based on the new standard but will not go into effect until the effective date of the amendment.
• After February 28, 2011, all DBE certification decisions will be made based on the revised PNW standard, even if the application was filed or a decertification action pertaining to PNW began for this date.
• If a denial of an DBE application or decertification occurred before the publication date of the amendment, because the owner’s PNW was above $750,000 but not above $1.32 million, and the matter is now being appealed, then the appeal should be resolved using the new standard.
• If a firm was decertified or its DBE application denied within a year before the effective date of the amendment, because the owner’s PNW was above $750,000 but not above $1.32 million, the firm should be permitted to resubmit PNW information without any further waiting period, and the firm should be recertified if the owner’s PNW is not over $1.32 million and the firm is otherwise eligible.
• DOT cautions that any individual who has misrepresented his or her PNW information, whether before or after the inflationary adjustment takes effect, as having failed to cooperate with the DBE program in violation of the rules.

If your firm was denied DBE Certification because your personal net worth exceeded $750,000 you should seek DBE certification again. At Kleiner & Cazeau, we have experience preparing DBE certification applications and handling certification appeals. We can assist you if any issue arises regarding the new rule proposed by Secretary Lahood and the Department of Transportation. Business who did not qualify for the DBE Certification in the pass now have an opportunity to become certified.