Disadvantaged Business Enterprise
The U.S. Department of Transportation’s DBE program ensures nondiscrimination in the award and administration of DOT-assisted contracts in the Department’s highway, transit, and airport financial assistance programs and seeks to create a level playing field on which DBEs can compete fairly for DOT-assisted contracts. FTA’s Office of Civil Rights is responsible for monitoring FTA recipients' and transit vehicle manufacturers' DBE programs and ensuring their compliance with DOT's DBE regulations.
DBE Final Rule (April 2024)
On April 9, 2024, the Department published a DBE Final Rule in the Federal Register to modernize and streamline the DBE program regulations. Read the press release.
Through this rule change, DOT addressed many of the challenges DBEs have faced over the years. Changes to the DBE program include:
- Streamlining the DBE certification and eligibility process
- Adjusting the personal net worth 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 expediting interstate reciprocity
- Expanding reporting requirements to DOT
FTA-Specific Rule Updates
As part of the DOT Final Rule, a new tiered system was developed for FTA grant recipients. This update and others will result in data collection from more FTA grant recipients and provide clarity around prohibited discriminatory practices, which will help FTA ensure that contractors bidding for or working on transit projects do not experience discrimination in the award and administration of FTA-funded contracts.
While the tiers have been implemented, they will not be enforced until FY 2025, allowing recipients time to transition and meet the newly established requirements.
- Tier I Recipients: FTA grant recipients who award more than $670,000 in federal transit funds annually in third-party contracts are subject to all provisions
- Tier II Recipients: FTA grant recipients who award $670,000 or less in federal transit funds annually are subject to a subset of provisions, including reporting requirements and the small business element. See FTA’s guidance for Tier II recipients.
The Final Rule also clarifies the requirements for FTA-assisted transit vehicle procurements and simplifies the definition of transit vehicle manufacturers (TVMs). FTA expects that some recipients will need to revise their policies to ensure they comply with the rules for transit vehicle procurements. FTA is developing technical assistance material on this topic.
Other Rule Updates
Data Collection & Reporting
- The Uniform Report, which captures contracting data, now collects information on individual DBEs and contracts
- Recipients are required to submit their bidders lists to DOT
- Unified Certification Programs (UCPs) are required to include more information on certification and decertification it their annual reports to DOT
DBE Performance Plans on Design-Build Contracts
- Prime bidders on race-conscious design-build contracts are allowed to submit a plan for subcontractor DBEs throughout the life of the project to meet their DBE goals
- Prime bidders are no longer required to list all commitments at the bidding stage
DBE Credit/Counting Updates
- Includes clarifications and changes to how recipients and primes count DBE participation
- Affects counting for regular dealers, material suppliers, distributors, manufacturers, and more
Monitoring & Prompt Payment
- Requirements for prompt payment and return of retainage have been clarified, and the language is stronger, but the requirements have not changed
- DOT’s expectations for monitoring are codified
For more information on the Final Rule and training, please visit the Departmental Office of Civil Rights’ DBE Final Rule webpage.
DBE Outreach and Listening Session
The Federal Transit Administration (FTA) Office of Civil Rights hosted a virtual outreach and listening session on Thursday, October 14, 2021 on the Disadvantaged Business Enterprise (DBE) program (49 CFR Part 26). DBEs, FTA recipients, transit vehicle manufacturers, and other interested stakeholders participated and provided feedback. For more information and a recording of the session, please visit the event page here.