The U.S. Department of Transportation (U.S. DOT) Dec. 1 provided further guidance on the implementation of the Disadvantaged Business Enterprise (DBE) program to clarify issues raised in its Interim Final Rule (IFR) which governs the program’s implementation until final rules are issued. This is US DOT’s second set of clarifications.
The IFR ended the use of race- and gender-based participation and goals for the program effective Oct. 3. Compliance with DBE requirements on federal-aid highway and transit projects has been suspended in each state, subject to a “reevaluation process,” in which DBE firms previously certified for participation in the program must reapply for certification. Previous certification was largely dependent on firms being owned and controlled by women or in identified race groups. Under the IFR businesses must submit a personal narrative explaining why they are disadvantaged and therefore eligible to participate.
The guidance further clarifies the following issues:
• State DOTs must continue efforts to facilitate small business participation in their federal-aid projects, but not based on race or gender.
• When a prime contractor properly terminates a subcontractor that had been certified as a DBE prior to Oct. 3, it need not undertake good faith efforts to find a DBE replacement during this reevaluation period, as there are no certified DBE firms until that process is completed.
• For a contract executed before Oct. 3, a state DOT may issue a change order resetting the DBE goal to zero percent.
• The suspension of DBE goals and participation also applies to Indefinite Delivery Indefinite Quantity (IDIQ) and Job-Order-Contracting (JOC) contracts.
• For projects not meeting DBE goals and completed prior to Oct. 3, state DOTs must terminate any shortfall analysis and may not apply any remedies.
• Issues to be considered for DBE firms seeking to be recertified are also addressed.