During the election, many promises were made to accelerate the US economic growth. Insiders who follow these trends believe that these campaign promises center on infrastructure improvements and lead to a boon for the highway construction industry. State and local governments will be the first ones to receive the funds, which will create new jobs. One of the ways these types of projects can be accomplished is to funnel the funds through prime contractors who in turn pass it down to their disadvantaged business enterprise partners.
The DOT DBE program is not as well-known as the Small Business Administration’s 8(a) and other small business programs, but it has been around since Congress passed legislation in 1983 that required at least 10 percent of the funds authorized for highway and transit federal financial assistance programs be expended with DBEs. The three agencies with those programs are the Federal Highway Administration, Federal Aviation Administration, and Federal Transit Administration.
Federal transportation projects are unique because they necessitate so much coordination with state and local governments. The DOT has established regulations that require the recipients of DOT federal dollars (state and local transportation agencies) to develop DBE participation goals on federally-funded projects, as well as a process to certify DBE firms. So each state must put a method in place to certify firms which qualify as DBEs, which allows them to be teaming partners with large business primes. The DOT regulations set the criteria to participate in the DBE program, which the states must follow.
To be eligible for the DBE program, persons must own 51 percent or more of a “small business,” establish that they are socially and economically disadvantaged within the meaning of DOT regulations, and prove they control their business. The DBE certification process begins at the state level. If the state denies a certification, companies can appeal to the DOT in Washington, DC.
Interestingly, firms in the DBE program are not limited to construction project opportunities. The Federal Aviation Administration has its own program for airport concessionaires who qualify for the program and there are DBE goals for car rental concessions operations. So car rental companies must make a “good faith” effort to meet DBE goals by researching their options to meet the goals, which include the purchase of business services from DBE vendors.
I had never heard of this program, but it sounds like a great opportunity for those businesses who qualify to participate with a large prime and get the federal dollars being allocated to improve the US infrastructure. If it leads to more jobs as predicted, then this promise for accelerated economic growth will have been fulfilled.