A disadvantaged business enterprise (DBE) means a for-profit small business concern —
- That is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged or, in the case of a corporation, in which 51 percent of the stock is owned by one or more such individuals; and
- Whose management and daily business operations are controlled by one or more of the socially and economically disadvantaged individuals who own it.
Learn more about DBE eligibility, certification steps, benefits of certification, and ODOT's DBE commitments below.
To be certified as a DBE, a firm must be an independent small business owned (51% minimum) and controlled by a socially and economically disadvantaged individual (or multiple socially and economically disadvantaged individuals).
Eligibility Requirements (in part)
- Rebuttably presumed to be socially and economically disadvantaged are Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and women. Other may be eligible on a case-by-case basis.
- The socially and economically disadvantaged individual(s) owning and controlling a firm must have personal net worth (PNW) of less than $1.32 million.
- A firm must meet SBA small business size standards. However, if a firm that meets SBA small business size standards has gross receipts exceeding $28.48 million (averaged over its previous three fiscal years), the firm's DBE certification will only be recognized on FAA-assisted projects--the certification will be inapplicable to ODOT projects as well as any other FHWA- or FTA-assisted projects.
DBE certification is handled through the Ohio Unified Certification Program (UCP).
DBE Certification Process
- Step 1 - Application is received.
- Step 2 - Application is checked for completeness. If incomplete, the applicant is sent a letter requesting the missing information.
- Step 3 - Once the application is complete an on-site visit is scheduled and conducted at the applicant's principal place of business. During the on-site visit, interviews are conducted with the owners of the firm.
- Step 4 - All materials submitted by the applicant and the on-site report are reviewed by the certification analyst, who determines if the applicant meets the eligibility standards. The certification analyst also reviews the NAICS codes and descriptors requested and makes a recommendation regarding them: do they describe, as specifically as possible, the principal goods or services which the firm would provide to U.S. Department of Transportation recipients? Do the socially and economically disadvantaged owners have the ability to control the firm with respect to those types of work?
- Step 5 - The certification analyst reviews the application and makes a decision on the firm's eligibility for certification in the DBE program.
- Step 6 - If the application is approved, the applicant is notified, in writing, of the certification approval.
The certification approval clearly indicates approval of the firm as a Disadvantaged Business Enterprise (DBE) to perform specific types of work. If an applicant is denied certification, a denial letter lists the reasons for the denial and provides information related to the appeal process.
Benefits of Being DBE-Certified
- Prime contractors rely on DBEs to fulfill the DBE subcontracting goals on U.S. Department of Transportation-assisted contracts.
- DBEs may participate in a variety of supportive services such as training and technical assistance.
- DBEs are listed in the Ohio Unified DBE Directory.
The U.S. Department of Transportation's Disadvantaged Business Enterprise (DBE) Program has its origins with Title VI of the Civil Rights Act of 1964, which states that "No person in the United States shall, on the grounds of race, color or national origin, be excluded from participation in, be denied the benefit of, or be subjected to discrimination under any program or activity receiving federal financial assistance." Predecessors to the DBE program came into existence in the 1970s. With the Surface Transportation Assistance Act, signed into law on January 6, 1983, Congress enacted the first DBE statutory provision. Congress has reauthorized and amended DOT's program many times since then. As Congress made clear in the Fixing America's Surface Transportation Act (FAST Act), Public Law 114-94, approved December 4, 2015:
- while significant progress has occurred due to the establishment of the disadvantaged business enterprise program, discrimination and related barriers continue to pose significant obstacles for minority- and women-owned businesses seeking to do business in federally assisted surface transportation markets across the United States;
- the continuing barriers described in subparagraph (A) merit the continuation of the [U.S. Department of Transportation's] disadvantaged business enterprise program;
- Congress has received and reviewed testimony and documentation of race and gender discrimination from numerous sources, including congressional hearings and roundtables, scientific reports, reports issued by public and private agencies, news stories, reports of discrimination by organizations and individuals, and discrimination lawsuits, which show that race- and gender-neutral efforts alone are insufficient to address the problem;
- the testimony and documentation described in subparagraph (C) demonstrate that discrimination across the United States poses a barrier to full and fair participation in surface transportation-related businesses of women business owners and minority business owners and has impacted firm development and many aspects of surface transportation-related business in the public and private markets; and
- the testimony and documentation described in subparagraph (C) provide a strong basis that there is a compelling need for the continuation of the disadvantaged business enterprise program to address race and gender discrimination in surface transportation-related business.
DOT's DBE regulations are set out in the Code of Federal Regulations, Title 49, Part 26 (titled "Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs"). The objectives of DOT's DBE regulations are:
- To ensure nondiscrimination in the award and administration of DOT-assisted contracts in the [U.S.] Department [of Transportation]'s highway, transit, and airport financial assistance programs;
- To create a level playing field on which DBEs can compete fairly for DOT-assisted contracts;
- To ensure that the [U.S.] Department [of Transportation]'s DBE program is narrowly tailored in accordance with applicable law;
- To ensure that only firms that fully meet [49 CFR Part 26's] eligibility standards are permitted to participate as DBEs;
- To help remove barriers to the participation of DBEs in DOT-assisted contracts;
- To promote the use of DBEs in all types of federally-assisted contracts and procurement activities conducted by recipients;
- To assist the development of firms that can compete successfully in the marketplace outside the DBE program; and
- To provide appropriate flexibility to recipients of Federal financial assistance in establishing and providing opportunities for DBEs.
As a recipient of federal-aid highway and federal transit funds authorized under numerous acts (most recently the FAST Act), ODOT is required to comply with DOT's DBE regulations. As a Federal Highway Administration (FHWA) primary recipient and a Federal Transit Administration (FTA) recipient receiving more than $250,000 in FTA funds in a federal fiscal year, ODOT must also have a DBE program, a signed and dated DBE policy statement, a DBE liaison officer, and prompt payment mechanisms, among other requirements. ODOT's DBE program objectives mirror those of the U.S. Department of Transportation. ODOT's DBE policy statement is available at the beginning of its DBE Program Plan, which sets out the mechanisms ODOT uses to ensure compliance with DOT's DBE regulations.
ODOT's DBE activities are centered in its Disadvantaged Business Enterprise Program in the Office of Business & Economic Opportunity, but many other ODOT divisions and offices share responsibility for various aspects of DBE compliance.