U.S. DOT Final Rule on Disadvantaged Business

The U.S. Department of Transportation has published a final rule making changes to the Disadvantaged Business Enterprise (DBE) program. The Final Rule largely maintains the framework put in place in the Interim Final Rule last fall, removing the automatic presumption of disadvantage based on race and gender and requiring an individual demonstration of economic and social disadvantage.

U.S. DOT did make a few revisions that address issues that ACEC raised in our comments:

(1) The Department clarified that determinations of disadvantage may include consideration of race and gender. ACEC and several member firms questioned language in the interim rule that said determinations must be made without regard to race or gender, which created confusion about whether firm owners should include that in their personal narratives. The Final Rule states that “Eligibility determinations must be based on individualized evidence concerning the applicant’s own experience and circumstances, including evidence of discrimination, social barriers, denied opportunities, or other factors that the applicant contends contributed to social and economic disadvantage” and may include consideration of race and gender. 

(2)  DOT set a final deadline of December 24 for certifying agencies to complete their reevaluations. ACEC had encouraged the Department to facilitate as expeditious a process as possible. We are aware that many states have completed their recertifications but several others have been slow. The Final Rule sets a final deadline of 90 days from the publication in the Federal Register.

(3) The Department clarified interstate certification expectations and confirmed a simplified process once the home state has completed a firm’s recertification. ACEC had expressed support for as least burdensome a process as possible for firms performing work in multiple jurisdictions. The Final Rule states that once the jurisdiction of original certification reevaluates a firm under the new standards, “other States should automatically accept that decision upon simple notification, such as a letter or a screenshot showing the firm’s status” in the updated DBE directory and that “no further requirements may be imposed.”

The text of the Final Rule is available here.

An extensive summary of the rule from a DC law firm with procurement expertise is here.

Please contact Matt Reiffer, ACEC National, with any questions or concerns, and please continue to share with us memos or other implementation guidance that we can add to our Resource Center.