Understanding DOT’s new DBE Rules

More than 50,000 certified DBEs and 3,500 certified ACDBEs work on federally-sponsored programs.

Source : Department of Transportation

May 7, 2024

Author : Alex Bustillos

The US Department of Transportation has been for the last four decades trying to right the centuries wrong. And in 2024, they seem to be a step closer to achieving this dream, that President Ronald Reagan first saw in 1983. 

Yes, we are talking about the Disadvantaged Business Enterprise (DBE) Rule. When it was first implemented, the goal was set so that 10% of all DOT-funded projects would be done by minority, women-owned, and socially and economically backward businesses.

The final rule to modernize the DBE program was implemented on April 9th, and it also includes Airport Concession DBE (ACDBE). 

The program will be implemented by all 53 state-level DOTs which includes (the District of Colombia, Puerto Rico, and the US Virgin Islands). Apart from this, 500+ transit agencies and 3200 airport sponsors (400 operate the ACDBE program).

Currently, there are 50,000 certified DBEs and 3,500 certified ACDBEs that work on federally-sponsored construction projects.

The top changes that the final rule is implementing are:

  1. Simplifying the certification process for DBEs and ACDBEs
  2. There is an update in the Personal Net Worth of DBE owners; it has gone up from $1.32 million in 2011 to $2.047 million and excludes retirement plan
  3. Digitizing different process-opting for virtual visits for verification over on-site visits
  4. Better monitoring and prompt payment
  5. In design-build projects, contractors cannot simply get away by mentioning they will employ DBEs (which happened till now). They would have to explicitly mention the role of small business
  6. A stricter and streamlined reporting process will enable DOTs to gain better insights into the implementation and success of the program
  7. The DBE program has a small business requirement this will be replicated for the ACDBE program

“Our Department believes in making sure that small and disadvantaged businesses, which have historically faced discrimination, can have a fair chance to compete for federally funded transportation work. Today we are proud to announce a major package of improvements to modernize and streamline the rules around these programs, which are already vital but have the potential to do even more to level the playing field. Through this rule change, we’ve addressed many of the challenges DBEs and ACDBEs have faced over the years, and we’re excited that these businesses can now more efficiently and effectively compete for infrastructure projects and airport concessions – something that’s especially important now as President Biden leads the biggest investment in American infrastructure in generations,” said U.S. Transportation Secretary Pete Buttigieg.

The new rule will strictly implement the actual participation of the DBE because there have been previous instances where prime contractors paid DBEs to use their names but didn’t actually use them.

Contractor News 

has previously reported that many states are already exceeding their DBE goals, implementing 

Disparity Studies

, and introducing 

new laws

 to ensure better participation and reduce gaps.

Category : Disadvantaged Business Enterprises Federal Government

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