Rep. Johnson, Sen. Ossify Introduce Bill to Alter DBE Program

The DBE program assists small businesses across the country in obtaining work.

Source : Contractor News

April 17, 2024

Author : Patty Allen

To improve the playing field for small and minority-owned businesses in projects funded by the generational IIJA, Congressman Hank Johnson (GA-04) introduced the Small Business Contracting Fairness Act.

This legislation aims to standardize the treatment of Disadvantaged Business Enterprises (DBEs) within the USDOT (US Department of Transportation). 

Unlike all other federal agencies, the USDOT, FHWA (Federal Highway Administration), and FTA (Federal Transit Administration) have different standards for DBEs than the Small Business Administration (SBA). This has resulted in fewer DBEs qualifying for federal contracts from these agencies.

This law eliminates the lowest limit for establishing DBE eligibility and standardizes the treatment of DBEs within the DOT. Since the discriminatory treatment was abolished in the 2018 FAA Reauthorization Act, the FAA has continued to use this method to assess program eligibility.

President Biden's IIJA has provided a massive stimulus, with $550 billion earmarked for infrastructure investment, which will add 1.5 million jobs over the next five years. 

Currently, a DBE firm must meet SBA size guidelines and have average annual gross receipts of no more than $26.29 million over the last three years. This gross receipts cap is more than $13.3 million lower than the SBA's construction size restriction. Construction projects typically have higher overall project costs than many other industries, so the gross receipts cap significantly restricts the pool of DBEs who might otherwise qualify for the program.

The Small Business Contracting Fairness Act eliminates the gross receipts cap for assessing a DBE's eligibility. The FAA presently calculates eligibility for the DBE program using the same approach after the cap on gross receipts was eliminated in the 2018 FAA Reauthorization Act.

The elimination of the gross receipts cap will standardize the treatment of DBEs across the USDOT, including its three principal operating administrations: the FHWA, the Federal Aviation Administration (FAA), and the FTA.

Sen. Jon Ossoff (GA) introduced the Senate companion legislation. He explained, "As we upgrade America's infrastructure, Georgia's small businesses have a vital role to play. My legislation with Congressman Hank Johnson will help ensure more women and minority-owned small businesses in Georgia have the opportunity to secure infrastructure contracts."

Category : Disadvantaged Business Enterprises Department of Transportation Diversity Outreach

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