What is the DBE Program? | Tips and Tricks
Let’s face it, we all need all the help we can get with government contracting. (#government contracting) That is where today’s topic comes into play. What is the DBE Program (#DBE)and Tips & Tricks is aimed to help you make the most of this program. The DBE certification can be complicated at first.
“What is the Disadvantaged Business Enterprise Program | Tips and Tricks” will help you capitalize on your DBE certification. First, let’s start with what does DBE means. Well, DBE stands for Disadvantaged Business Enterprise. Congress created this program to remedy ongoing discrimination and continuing effects of past discrimination in federally assisted highway, transit, airport, and highway safety financial assistance transportation contracting markets nationwide.
Why Congress Created the DBE Program?
Congress created the Disadvantage Business Entity Program to eliminate discrimination and other obstacles on federal transportation contracts. Congress wanted to level the playing field so that disadvantaged businesses could have a fair chance of winning contracts.
What Percentage of Funds Go To This Program?
Did you know that at least 10% of the funds authorized for the highway and transit financial assistance program must go to DBEs? That right! DBEs must receive 10% of the Department of Transportation funds. Since 1987 DOT has established a single DBE goal, encompassing both firms owned by women and minority group members.
Which Agencies Administer the DBE Program?
There are three major DOT operating administrations involved in the DBE Program. The first agency is the Federal Highway Administration. The second agency is the Federal Aviation Administration. The third agency is the Federal Transit Administration.
Now that we have talked about the eight objectives let’s look at the regulations governing the program.
Disadvantaged Business Enterprise (DBE) Regulations
As with all federal programs, there are regulations governing the program. These regulations ensure that only qualified businesses can enter into the program. The Code of Federal Regulations otherwise known as CFR covers the Disadvantaged Business Enterprise Program. For airport concessionaires see 49 CFR 23 and DOT’s is 49 CFR 26. If you decide to add this certification to your resume you will need to review these regulations. It is your responsibility to make sure you understand all program requirements.
Next, we will go over the roles that state transportation agencies play in the DBE program.
State Transportation Agencies Roles
State Transportation agencies are responsible for the DBE certification process. Therefore, when seeking more information regarding this program contact your state transportation department. In fact, this should be a simple task such as contacting your local PTAC, SBA or Google.
In fact, state agencies ensure that only eligible businesses participate in the DBE program. Furthermore, they are responsible for establishing goals on DBE contracts. This ensures that only Disadvantaged Business Enterprises (DBE) receive the work. In addition, state agencies establish specific DBE subcontracting goals. In fact, these subcontracting goals can vary throughout the year but by the end of the year, they must be consistent with the overall goal.
Also, the DBE program like the 8(a) BD program only applies to contracts issued within the United States and its territories. It does not apply to contracts outside the United States.
Lastly, you can find your local transportation agency here.
Next, we will look at the DBE Program eligibility requirements.
DBE Eligibility Requirements
The eligibility requirements for the DBE program are similar to the 8(a) BD program. A small business needs to be for-profit. The owners of the business must be socially and economically disadvantaged. In addition, the DBE must own a minimum of 51% in the business. Furthermore, the disadvantaged individual must control and manage the business operations on a daily basis. Next, we will define which groups are presumed socially and economically disadvantaged.
Like the 8(a) BD Program, the DBE program presumes that the following groups are socially and economically disadvantaged. These groups are African Americans, Hispanics, Native Americans, Asian-Pacific, Subcontinent Asian Americans, and women who are socially disadvantaged. Next, we will look at the other program qualifications.
Program participation requires that the small business applies to the program and receive their DBE certification from their local state DOT office. In addition, a site visit from the local agency will need to take place. This site visit will happen prior to the small business becoming certified.
Next, we will discuss the economically disadvantaged business qualifications.
Economically Disadvantaged Qualifications
To meet the economically disadvantaged qualifications, the disadvantaged individual’s personal net worth must not exceed $1.32 million. In addition, the small business must not exceed SBA size standards. To see if your business is qualified as small check out SBA’s free size standard tool at https://www.sba.gov/size-standards/. Furthermore, the small business’s average annual gross receipts cannot exceed $23.98 million. However, the size limits for airport concessions in the DBE program are higher.
Next, we will go over the downside of the program.
Applying To The Disadvantaged Business Enterprise Program
Small businesses wishing to become DBE certified must complete an application along with supporting documents to their certifying agency. Remember that the certifying agency will perform a site visit prior to approving your application. Check with your certifying agency and see if they can provide you with a checklist to assist you when filing your application. Hence if you fail to submit the required documents your application could be delayed or denied.
Lastly, remember that the U.S. Department of Transportation does not review your DBE application. You must work with your local state agency. You can find their information on this website.
The downside to the Program
Any program has its upsides and downsides. The downside to this program is that you have to apply to each state separately. In this program, you are only DBE certified for the state that you received your certification in. If you want to get certified in another state you will have to submit your application to that state agency. I wish there were a national database so you only had to apply once.
Upside to the Disadvantaged Business Enterprise Program
I have seen many DBE certified business does well with this program. The DBEs that do well know how to market and can provide the lowest price that is technically acceptable to prime contractors. If you fail to do either of these steps, then you will not do well with the program. It is a great way for you to grow your business.
Assistance May Be Available For Disadvantaged Business Enterprise Businesses
State Departments of Highways and Transportation (SDH&T) receive supportive services funds from the Federal Highway Administration to help increase DBE participation in Federal-aid highway contracts. The SDH&T may decide to use the funds in-house to provide supportive services or hire consultants. Supportive services whether done by the State agency or consultants help DBE’s to compete in winning contracts. The services include research and development, training and on site-technical assistance, business management assistance, estimating assistance, and assistance in obtaining necessary financing and bonding.
Summary of Disadvantaged Business Enterprise
In Summary, the U.S. Department of Transportation’s Disadvantaged Business Enterprise Program (DBE) is another tool available too socially and economically disadvantaged businesses to assist them in obtaining federal contracts.
If you have a concession stand or do horizontal construction work then this is a great program for you. Many small businesses have been able to capitalize on this program. This has allowed them to grow their business. In fact, many small businesses have gone from being a subcontractor to a prime contract using this program.
Finally, if you are interested in this program please contact your local state agency using the links provided. Now is the time to act. Call your local agency today.
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