Background

The U.S. Department of Transportation (USDOT) has had in effect for more than 20 years a policy of helping small businesses owned and controlled by socially and economically disadvantaged individuals, including minorities and women, in participating in contracting opportunities created by DOT financial assistance programs. The Department, through its Operating Administrations, distributes in excess of $20 billion annually to help finance thousands of projects across the country. Approximately 85% of the assistance dollars is for construction. The major portion of the construction funds is allocated to State highway and transportation agencies for highway construction. The balance is provided to local public transit and airport authorities for mass transit and airport facilities.

In 1983, Congress enacted the first disadvantaged business enterprise (DBE) statutory provision. This provision required the Department to ensure that at least 10% of the funds authorized for the highway and transit financial assistance programs be expended with DBEs. In 1987, Congress re-authorized and amended the statutory DBE program. In the transportation legislation of that year, Congress, among other changes, added women to the groups presumed to be disadvantaged. Since 1987 DOT has established a single DBE goal, encompassing both firms owned by women and minority group members.

Primarily three major DOT operating administrations are involved in the DBE program. They are the Federal Highway Administration, the Federal Aviation Administration and the Federal Transit Administration. The DOT DBE program is carried out by state and local transportation agencies under the rules and guidelines in the Code of Federal Regulations. (Title 49, Part 26) .

How the Program Works

Among other things, DOT DBE regulations require recipients of DOT Federal financial assistance, namely, state and local transportation agencies, to establish goals for the participation of disadvantaged entrepreneurs and certify the eligibility of DBE firms to participate in their DOT-assisted contracts.

Each DOT-assisted State and local transportation agency is required to establish narrowly-tailored DBE goals. Then these DOT-assisted agencies evaluate their DOT-assisted contracts throughout the year and establish contract specific DBE subcontracting goals where these goals are needed to ensure nondiscrimination in federally-assisted procurements. The level of DBE subcontracting goals may vary from their approved DBE goal however, at the end of the year the amount of contract/subcontract awards to DBEs should be consistent with the overall goal.

In order for small disadvantaged firms, including those owned by minorities and women, to participate in the DOT-assisted contracts of State and local transportation agencies they must apply for and receive certification as a DBE. To be certified as a DBE, a firm must be a small business owned and controlled by socially and economically disadvantaged individuals. Recipients get information about firms through on-site visits, personal interviews, reviews of licenses, stock ownership, equipment, bonding capacity, work completed, resume of principal owners, financial capacity, and type of work preferred. More information on certification can be obtained from the recipients' DBE Certification Officers located in this Section. DOT and SBA are currently working on an agreement to facilitate participation by DBEs in SBA programs and vice-versa.

State Departments of Highways and Transportation (SDH&T) receive supportive services funds from the Federal Highway Administration to help increase DBE participation in Federal-aid highway contracts. The SDH&T may decide to use the funds in-house to provide the supportive services or hire consultants. Supportive services whether done by the State agency or consultants help DBE's to compete in winning contracts. The services include research and development, training and on site-technical assistance, business management assistance, estimating assistance, and assistance in obtaining necessary financing and bonding.

A Disadvantaged Business Enterprise is a small, independent business that is at least 51% owned by one or more socially or economically disadvantaged individuals. At least one of these owners must control the firm's management and daily operations, and the owners must share in the risks and profits commensurate with their ownership interest.

According to The Small Business Act, socially disadvantaged is defined, as individuals who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities. Economically, disadvantaged is defined as those who are socially disadvantaged, whose ability to compete in the free enterprise system has been impaired due to diminished capital and credit opportunities as compared to others in the same business area who are not socially disadvantaged.

• Who is presumed to be disadvantaged?

Socially and economically disadvantaged individuals mean any individual who is a citizen (or lawfully admitted permanent resident) of the United States and who is:

Any individual in the following groups, members of which are reputably presumed to be socially and economically disadvantaged:

• Black Americans, which includes persons having origins in any of the Black racial groups in Africa;
• Hispanic Americans, which includes persons having of Mexican, Puerto Rican, Cuban, Dominican, Central or South America, or other Spanish or Portuguese culture or origin, regardless of race;
• Native Americans, which includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians; (Tribally-owned concerns mean any concern at least 51 percent owned by an Indian tribe as defined in this section.)
• Asian Pacific Americans which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Camobodia (Kapuchea), Thailand, Malaysia, Indonesia, the Phillipines, Brunei, Samoa, Guam, the U.S. Trust Territories of the Pacific Islands (Republic of Palau), the Commonwealth of the Northern Marinas Islands Macao, Fiji, Tonga, Kirbati, Juvalu, Nauru, Federated States of Micronesia or Hong Kong;
• Women
• Who else may be considered?
• White men who can exert proof of their disadvantaged status.
• Any additional groups whose members are designated as socially and economically disadvantaged by the SBA, at such time as the SBA designation becomes effective.

To be eligible for DBE certification, you are presumed to be disadvantaged if you are a women, Black American, Hispanic American, Native American, Asian-Pacific American, Subcontinent Asian American, or other minority found to be disadvantaged by the Small Business Administration (SBA), In addition to your disadvantaged status;

• Your net, worth which excludes your equity in your primary residence and your ownership interest in the firm, cannot exceed $750,000.
• You as the disadvantaged individual must own at least 51% of the business or the corporation's stock;
• You, as the disadvantaged individual, must control the firm's management and daily operations, and share in the risks and profits commensurate with your ownership and interest.

• What is the process?
• Step 1.
  Your Application, Personal Net Worth Statement , and Affidavit of Social and Economic Disadvantage, along with the required supporting documentation for your type of business, are submitted to the North Carolina Department of Transportation. For your assistance in completing the application, instructions are provided.
• Step 2.
  A Certification Technician reviews your information.
• Step 3.
  A site visit and/or job site visit is scheduled.
• Step 4.
  A certification decision is made, and the firm is notified of this decision.
• Step 5.
  If certified, your firm's information is entered into the Unified Directory
• What must I do to maintain my certification as a DBE?
• Annual Affidavit Process

  The Annual Affidavit and Personal Net Worth Statement are submitted by the firm to validate that the status of a business' structure, ownership, control, or financial status has not changed within the previous year that would affect eligibility for continued participation in the DBE program.

  You will be notified 30 days before your certification anniversary date to allow sufficient time for you to submit the proper paperwork.

• Three-year recertification requirement

  The Recertification process is very similar to the initial certification process with a few minor exceptions. A Recertification Application and Personal Net Worth Statement will be required every third year of your certification. You will be notified 30 days before your certification anniversary date to allow sufficient time for you to submit the proper paperwork.

  
  

• As a certified DBE, your probability of being selected by Prime contractors is increased because they are able to count your participation as a DBE toward their contract goals
• Business development opportunities are provided by NCDOT's Office of Civil Rights and Business Development to ensure businesses owned and operated by women and disadvantaged individuals have an opportunity to participate on federally funded or assisted projects
• The Business Development Office offers assistance to certified DBE's to help them compete in the marketplace in their current business area or transition into other business areas. The Business Development Office provides customized development plans as a service to DBE's at "no cost".
• NCDOT will maintain a complete directory of all certified DBE's for the entire state, which allows firms' information to be available to all agencies across the state.

The purpose of UCP is to provide "one-stop shopping" to applicants for certification, such that an applicant is required to apply only once for a DBE certification that will be honored by all recipients in the state. In the past, a firm would be required to apply for certification as a DBE with each agency with which the firm wants to work, now the firm applies one time with NCDOT, and if approved, that certification is shared by all other federal recipients in the state.

Any entities or agencies that do not receive federal funding are not required to certify DBE's under the UCP process.

No

According to 49 CFR Part 26, DBE firms are not required to become pre-qualified as a condition of certification, however, NCDOT and other agencies may require all firms to become pre-qualified prior to awarding work on contracts. For more information please visit our Prequalification section.

For more information about the UCP, please visit our Contact section.

For information about DBE Business Development opportunities, contact the Office of Civil Rights and Business Development.

For additional information please visit the:
USDOT, Office of Small and Disadvantaged Business Utilization.

How do I search for a DBE?

Submit this information change request form to the Contractual Services Unit at 1509 Mail Service Center, Raleigh, NC 27699 or fax it to: (919) 715-7378.