Two big changes have been announced by the U.S. Department of Transportation that will affect the certification process disadvantaged business enterprises and airport concessions disadvantaged business enterprises.
The first increases the personal net worth standard from $750,000 to $1.32M for principals who have at least a 51% interest in a DBE- or ACDBE-certified company. This standard, used to determine whether an applicant is considered a “socially and economically disadvantaged” person, has not increased since 1989.
The amendment takes effect Feb. 28. Any new certification decisions will be based on the increased personal net worth, even for those filed before Feb. 28. Companies that have pending applications or decertification actions that were filed before Jan. 28, the day the amendment was published, will be judged based on the increase. If a company was denied because the owner’s PNW was more than $750,000 but less than the $1.32M, owners can now appeal to the reviewing agency, which will review the decision using the new standard; the company can also resubmit the information without a waiting period.
The DOT also introduced the concept of interstate reciprocity, giving companies certified in their home state the ability to become certified in other states in an expedited fashion. All states will be required to accept DBE or ACDBE certifications from other states unless the state finds “good cause” for not doing so. Examples of reasons could include certification being obtained fraudulently, having factual errors or the company no longer meeting certification criteria.
Should such good cause be shown, the secondary state must send the company a notice 60 days after it receives the application, to which the company must respond in writing or ask to meet with the state’s reviewing agency; the meeting must be scheduled to take place within 30 days of the company’s request. The company is responsible for proving why it should be granted DBE or ACDBE status, responding to issues included in the state’s notice. Once the company has responded with written notice or had its meeting with the state, the state has 30 days to make a final decision; companies will have the right to appeal that decision to the DOT’s Departmental Office of Civil Rights.
Compliance with the reciprocity rule is not considered mandatory until Jan. 1; this expedited procedure may not be available in all states until that time.
