Disadvantaged Business Enterprise (DBEs) are for-profit small business concerns where socially and economically disadvantaged individuals own at least a 51% interest and also control management and daily business operations.
African Americans, Hispanics, Native Americans, Asian-Pacific and Subcontinent Asian Americans, and women are presumed to be socially and economically disadvantaged. Other individuals can also qualify as socially and economically disadvantaged on a case-by-case basis.
Requirements for DBE Participation
To participate in the DBE program, a small business owned and controlled by socially and economically disadvantaged individuals must receive DBE certification from the relevant state– generally through the state Uniform Certification Program (UCP).
To be regarded as economically disadvantaged, an individual must have a personal net worth that does not exceed $1.32 million. To be seen as a small business, a firm must meet SBA size criteria AND have average annual gross receipts not to exceed $23.98 million. Size limits for the airport concessions DBE program are higher.
Roles and Responsibilities of State and Local Transportation Agencies
As recipients of DOT financial assistance, state and local transportation agencies are responsible to:
- Certify the eligibility of DBE firms to participate in their DOT-assisted contracts;
- Establish narrowly-tailored goals for the participation of disadvantaged entrepreneurs; and
- Evaluate their DOT-assisted contracts throughout the year and establish contract-specific DBE subcontracting goals as necessary to achieve the overall goal of the agency.
- The level of DBE subcontracting goals may vary; however, by the end of the year, the amount of contract/subcontract awards to DBEs must be consistent with the overall goal.
For example, below is more information about the Ohio DBE certification process.
Certification through Ohio Department of Transportation (ODOT)
15.6% of federally-funded highway construction and design contracts (e.g., major highway reconstruction, geotechnical design, environmental consulting) in Federal Fiscal Years 17, 18, and 19.6.75% of federally-funded transit contracts in Federal Fiscal Years 17, 18, and 19.
The DBE program ensures nondiscrimination in the award/administration of USDOT-assisted contracts in highway, transit and airport projects.
To be certified as a DBE, a firm must be a small business owned and controlled by socially and economically disadvantaged individuals.
ELIGIBILITY REQUIREMENTS (in part)
- At least 51% ownership, as well as control, by socially and economically disadvantaged individuals: women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans; others may be eligible if they establish their social and economic disadvantage.
- Individuals holding the 51% ownership of a firm must have a personal net worth (PNW) of less than $1.32 million.
- A firm must meet SBA small business size standards and the DBE program's statutory receipts cap of $23.98 million.
- A firm must not be tied to another firm in such a way as to compromise its independence.