U.S. DOT Posts More Details on DBE Changes

What happened: The U.S. Department of Transportation (U.S. DOT) Oct. 24 posted a series of “frequently asked questions” (FAQs) intended to provide “clarity” relating to its Interim Final Rule (IFR) on the Disadvantaged Business Enterprise (DBE) program.

Effective Oct. 3, the IFR ended the use of race- and gender-based participation and goals for the program. It has suspended compliance with DBE requirements on federal-aid highway and transit projects during a “reevaluation process,” in which previous DBE firms must reapply for certification and submit a personal narrative of disadvantage. ARTBA’s summary of the IFR is available here.

On current contracts:

For a contract advertised but not yet let, the state DOT must amend the advertisement to remove the DBE contract goal.
For projects let but not yet awarded, the state DOT must change the goal to zero. The agency does not need to readvertise the project, but may rebid it if required under state law.
Contracts let and executed prior to Oct. 3 need not be modified, but DBE participation cannot be counted toward a contract or program goal until completion of the DBE reevaluation process in that jurisdiction.

Other things to know:

State DOTs need not undertake commercially useful function (CUF) reviews of DBE work on existing contracts during the reevaluation process.
A prime contractor must still show good cause and get the state DOT’s prior written consent before terminating a DBE or its work. Prompt payment requirements also remain in effect.
Similar procedures apply to design-build projects. Also, if DBE firms have not yet been awarded work on such a project, then its goal must be reset to zero.
Each Unified Certification Program (UCP) must provide all previous DBE firms the opportunity to reapply. There is no set deadline for this process. A firm can only apply in its original jurisdiction of certification, and if successful can then apply elsewhere for interstate certification. Firms unsuccessful in recertification may appeal.
A state may not set or count participation toward DBE program or contract goals until its UCP has completed the reevaluation process.

What’s Next: U.S. DOT is taking comments on the DBE IFR through Nov. 3. ARTBA urges its chapters and members to stay in touch as we seek further clarification about changing DBE requirements through this process. Rich Juliano and Prianka Sharma are the contacts.