The new Final Rule hopes to improve the inclusion of small, disadvantaged businesses in infrastructure opportunities and airport concessions.
On April 9, 2024, the U.S. Department of Transportation (USDOT) issued a final rule that modernizes the Disadvantaged Business Enterprise (DBE) program and Airport Concessions DBE (ACDBE) program regulations. These Congressionally mandated programs were created over 40 years ago to address and remedy the continuing effects of past discrimination against small businesses owned and controlled by minorities, women, and other socially and economically disadvantaged individuals and continue today to prevent and address ongoing discrimination.
The major objectives of this final rule include modernizing existing principles to improve provisions for the benefit of program participants, reducing burdens on firms and recipients, growing firm capacity and owner wealth, and improving program integrity, visibility, and data collected by the USDOT.
Nationwide, the program is implemented by 53 departments of transportation (including the District of Columbia, Puerto Rico, and the U.S. Virgin Islands), over 500 transit agencies, and 3,200 eligible airport sponsors, of which nearly 400 also operate an ACDBE program. There are nearly 50,000 certified DBEs and 3,500 certified ACDBEs, and many participate in federally assisted aviation, highway, and transit projects and airport concession opportunities in nearly every jurisdiction.
“Our department believes in ensuring 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 Biden-Harris Administration continues to emphasize equitable contracting to spur generational wealth, particularly for Americans who have experienced barriers or are underrepresented in the infrastructure community.
Key changes made to the DBE and ACDBE programs include several provisions that will have a direct impact on eligible firms and the contractors that hire them, such as:
- streamlining the DBE and ACDBE certification and eligibility process
- adjusting the personal net worth (PNW) cap for inflation for small business owners, including excluding retirement assets from the calculation.
- formalizing guidance establishing successful COVID-19 flexibilities such as virtual on-site visits, to conserve certification and firm resources.
- modernizing the rules for counting participation by DBE material suppliers and clarifying terminology
- addressing specific distinctive issues with the ACDBE programs involving FAA recipients, including holdovers in the definition of “long-term exclusive leases” in the ACDBE program,
- replicating the DBE program’s small business element requirements for the ACDBE program
- making technical corrections and other updates such as expediting interstate reciprocity.
- expanding recipient reporting requirements to USDOT to gain greater knowledge of DBE/ACDBE characteristics, bidding/solicitation practices and utilization and overall program impact.
- strengthening monitoring and prompt payment requirements
- enhancing ACDBE goal setting and reporting requirements
A summary table of the final rule can be accessed at: https://www.transportation.gov/DBEFinalRule.
USDOT will be hosting a series of training and informational sessions beginning April 2024. Sign up for the GovDelivery DBE listserv to receive updates. The DBE/ACDBE Final Rule Webpage is available to learn more about the rulemaking process, training sessions, informational sessions, and other information about the final rule.
