On Tuesday, April 9, 2024, the United States Department of Transportation issued a final rule that modernized the Disadvantaged Business Enterprise (DBE) program and the Airport Concessions DBE (ACDBE) program regulations. Review the final rule. The changes will go into effect on May 9, 2024.
These updates are of critical importance to anyone working on federally assisted contracts for highway, transit, and/or aviation projects. The USDOT has set nationwide goals for such contracts to so utilized at least ten percent of those the federal funds on small, disadvantaged businesses on DOT-assisted aviation, highway, and transit contracting projects. The purpose of these programs is to address and remedy the continuing effects of past (and present) discrimination against small business owned and controlled by minorities, women and other socially and economically disadvantaged individuals.
Notable changes found in the final rule include:
- USDOT Issues Final · Increasing the personal net worth limit (PNW) from $1.32 million to $2.047 million and allowing for a process to increase that number without the need to go through the rulemaking process.
- Excluding retirement funds from the PNW limit.
- Expediting the certification process, including major changes to interstate certification process.
- Establishing a new process by which a non-home state may decertify a DBE.
- Providing companies the ability to cure certain defects during the application process.
- Adding rules regarding financial investment in a firm when made with borrowed funds.
- Amendments to the factors considered when determining if an individual controls a company.
- Updating the factors considered when determining control and independence.
- Replaces the ability to accumulate substantial wealth analysis in favor of a reasonable person standard when it comes to rebutting the presumption of economic disadvantage.
These changes will open opportunities for additional minority and/or women-owned and controlled small businesses to take advantage of the DBE and ACDBE programs. It will also streamline the process in hope to eliminate the significant delays many applicants have faced.
Please be on the lookout for future blogs breaking down these changes, and many others, in more detail.
If your company has questions about how these new regulations, or about DBE or ACDBE certification generally, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.
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