If you ask most owners of companies that are Disadvantaged Business Enterprise (DBE)-certified, they will likely tell you that the certification helped them get their foot in the door or their business off the ground. Millions of federal dollars are allocated each year for major highway projects and construction projects. Thanks to the American Recovery and Reinvestment Act (ARRA), an unprecedented amount of funding is also being allocated for shovel-ready projects across the nation. The contractors who bid on these projects will need to partner with other service providers, which could likely include local car and truck rental companies. Becoming DBE-certified can advance your visibility for these federally funded projects, as well as for smaller, locally funded projects.
What Is DBE? The U.S. Department of Transportation’s DBE program has been in effect for more than 20 years. The policy helps small businesses owned and controlled by minorities and women to participate in contracting opportunities created by DOT financial assistance programs. A portion of the billions of federal dollars distributed annually by the DOT is provided to local public transit and airport authorities for facilities and other construction projects. The statutory provision requires DOT to ensure that at least 10 percent of funds authorized for federal transit assistance programs be spent with DBEs. In addition to the DBE goals for federally funded projects, most cities and airport authorities also establish woman- and minority-owned enterprise (W/MBE) goals for locally funded projects. These goals may also apply to companies that use W/MBE firms for the purchase of goods and services. Many airports have also established policies for the participation of Airport Concession Disadvantaged Business Enterprises (ACDBEs) in concession-related contracting. In some cases, the DBE goals can exceed the minimum 10 percent federal threshold. Policies such as these create opportunities and greater access for W/MBEs to compete for, and participate fairly in, concession-related contracting opportunities as primes as well as subcontractors.
How Do You Become DBE Certified? To qualify as a DBE, a firm must be a small business, as defined by the DOT, and be at least 51 percent owned by one or more socially and economically disadvantaged individuals. This includes women, African Americans, Native Americans, Hispanics, Asian-Pacific Americans and Subcontinent Asian Americans. The individuals must control the management and daily business operations of the company. For companies that provide professional services, the personal net worth of owners designated as disadvantaged cannot exceed $750,000. For airport concessions, size limitations are currently measured in terms of sales and are currently set at $52.5 million in gross revenue. Companies may be structured as a sole proprietorship, S corporation, LLC or joint venture (JV). The certification process is a bit more complicated for LLCs and JVs, but these firms can become certified provided the majority owners meet the individual qualifications. The actual certification process can take a minimum of 45 to 60 days; most take longer. A significant amount of paperwork and documentation is required to demonstrate that your firm meets the DBE requirements. In most situations, the paperwork must be filed as a hard copy rather than electronically.