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.
DBE certification is granted at the state or local level. The federal government does not certify firms as DBEs. Each state has its own Unified Certification Program (UCP) to provide “one-stop shopping” certification services to small, minority and women businesses seeking to participate on contracts funded by the DOT and as an ACDBE on airport concessions and leases. The statewide certification procedure eliminates the need for DBE firms to obtain certifications from multiple agencies within a state. General requirements are similar from state to state; however there may be some variations in licensing and other conditions. Most certifications require annual renewals. Thankfully, the renewal process is far less cumbersome than the initial filing process. Those interested in becoming certified should contact the UCP or airport administration in the state(s) in which they are licensed to do business. Additional information is also available at www.dot.gov.
Marketing Your Certification Once you are certified, ensure all your marketing materials identify you as such. Include a statement regarding your certification on your business cards, company stationery, invoices, brochures and flyers. Your certification should be prominently featured on the homepage of your Web site and in all business and phone directory listings, as well as in any online profiles. Be sure you are listed as a certified DBE with your community, county, state, airport authority, chamber of commerce and any trade associations or business networking groups of which you may be a member. Some communities also have state chapters of W/MBE organizations. Joining these groups will further expand your marketing reach and can open doors to potential business and partnering opportunities. You should also consider joining the Airport Minority Advisory Council. Since its inception more than 25 years ago, AMAC has been at the forefront of nearly every national policy initiative impacting the participation of minority, women, and disadvantaged business enterprises in airport contracting. AMAC works consistently with Congress, the federal government, aviation trade associations and others as a resource for information, education and guidance on business and employment matters. The Council also sends out notifications of any airport-related RFPs to its members. For more information or to join AMAC, visit www.amac-org.com. Independent car and truck rental operators or woman- and minority-owned franchisees that operate at airports and in the local market should be on the look-out for RFPs and bid announcements. New projects are announced nearly every day across the country. Operators should attend bid meetings to see what other companies are interested in the project and seek out opportunities to do business with these firms. For example, when the Port of Tampa put out a proposal to select an insurance broker, the port included an 11 percent local small business enterprise (SBE) participation requirement. When the bid was awarded, Leslie Saunders Insurance & Marketing International (LSIMI) was selected as a local SBE firm along with Hugh Wood of Seattle to provide insurance services. By combining forces, the two companies were able to save the Port of Tampa a tremendous amount of money, and this one project has opened doors to more opportunities. The two firms are teaming up to bid together on new projects at airports and ports around the country. LSIMI also now provides employee benefits to the parking company at the Port of Tampa. Doing so has helped this firm achieve its 11 percent SBE goal. As greater national focus is placed on high speed rail and metro light rail, many cities including Houston, Atlanta, Boston, St. Louis, Philadelphia, New York and more are in the process of building or planning huge rail systems. These transit authorities, along with the highly publicized Tampa to Orlando and State of California high speed rail projects tagged to receive some of the $8 billion in new federal funding, will also likely seek to do business with DBE-certified firms.
DBE Business Is Good Business Companies that are not minority-owned have myriad opportunities to participate in projects with DBE requirements by buying goods and services from DBE-certified companies. While car rental firms may have limited DBE options when it comes to buying fleet, there are significant opportunities for other expenditures such as insurance, employee benefits, legal and accounting services, janitorial services and supplies, towing, uniforms, cleaning products, tools, maintenance supplies and equipment and power-washing services, just to name a few. Organizations looking to do business or subcontract with DBE firms can obtain directories of certified companies by contacting the state department of transportation or airport authority or by searching their Web sites. When airport authorities announce new projects and send out RFPs, they will often include a list of certified DBEs for consideration for possible subcontracting and partnering. Many authorities will include bid-specific provisions related to DBEs for the contract. While this practice varies significantly, special consideration may be given to certified DBE firms or companies that sub-contract with DBEs. Many small businesses and DBE- and W/MBE-certified companies are surprised by the number of organizations that have set aggressive woman- and minority-owned business development goals. Newly certified firms should reach out to people and organizations with which they are currently doing business. Car rental companies that have corporate accounts and agreements to provide car and truck rental services to other local, regional and national businesses, banks and financial institutions and public utilities should make enquiries about their DBE and W/MBE policies.
To Qualify as a Disadvantaged Business Enterprise: - a firm must be a small business, as defined by the DOT
- must be at least 51 percent owned by one or more socially and economically disadvantaged individuals, including women, African Americans, Native Americans, Hispanics, Asian-Pacific Americans and Subcontinent Asian Americans
- must control the management and daily business operations of the company
- personal net worth of disadvantaged owners cannot exceed $750,000 for companies that provide professional services (airport concessions are currently set at $52.5 million in gross revenue)
- may be structured as a sole proprietorship, S corporation, LLC or joint venture
Leslie A. Saunders owns Leslie Saunders Insurance and Marketing International (LSIMI), which has been a Disadvantaged Business Enterprise-certified (DBE) firm since 1994. Headquartered in the Tampa metro area with satellite offices in Virginia and Kansas City, Mo., her firm is the only woman-owned insurance company to be certified in all 50 states. The Women’s Business Enterprise/DBE agency is also certified in Unified Certification Programs in 240 airports and nationally by the Women’s Business Enterprise National Council (WBENC). Prior to the implementation of Unified Certification, Saunders maintained more than 200 certifications in order to do business on a national scale with car rental companies Avis, Budget and Dollar Rent a Car. Today, LSIMI is Avis/Budget Group’s largest diversity supplier. For more information, visit www.saundersbenefits.com.