Disadvantaged Business Enterprise (DBE)
Third Party Procurement
Frequently Asked Questions
Q = Question; A = Answer
Q. Is there a link on your website or a document listing of minority companies registered with FTA?
A. FTA does not maintain a register of minority owned firms. However, the U.S. DOT Office of Small and Disadvantaged Business web page lists all States and their DBE Directories (Posted: December, 2011)
Q. When contract goals are established for DBE/MBE or other minority groups, must contractors meet the goals in order to qualify for award?
A. The FTA Best Practices Procurement Manual (BPPM), Chapter 7, discusses FTA requirements relative to Disadvantaged Business Enterprise (DBE). Section 7.3.5 - "Means of Meeting Overall Goals," provides guidance to grantees on the establishment of contract goals and the Federal preference for using race-neutral means to attain the overall agency goals. When goals are established in solicitations, contractors that cannot achieve the stated goals must furnish evidence in their proposals of the "good faith efforts" they have used to meet the goals. (See Section 22.214.171.124 of the BPPM). The Federal policy is that contractors that demonstrate good faith efforts cannot be disqualified from the contract award on the basis that they failed to meet the stated goals, but must be awarded the contract if they demonstrate and document such good faith efforts. DBE set asides and quotas are not allowed under the DOT DBE rules. Section 7.3.2 of the BPPM discusses the prohibition of set asides and quotas. (Posted: January, 2012)
Q. Can a service disabled veteran owned small business (sdvosb) be considered to qualify as a DBE if the FTA's Contracting Officer has a requirement for DBE subcontractor participation in the RFP? Background: We are a new sdvosb start up company seeking to bid on proposals for subcontracts on the installation of technology on public transportation (busses). Many of these proposals require a DBE status by the prime to be considered.
A. The USDOT has an informative web page regarding Disadvantaged Business Enterprise. We would encourage you read the material at this web site.
As you will see, certain groups are presumed to be "disadvantaged," but this does not preclude individuals who are not in these groups from being eligible. Specifically mentioned are those who are "disabled." Following is an excerpt from the DOT web page:
"Disadvantaged" - You may be eligible if you are a member of a group of persons the Department considers as disadvantaged. The Department presumes certain groups are disadvantaged, including women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans, or other minorities found to be disadvantaged by the U.S. Small Business Administration (SBA). Persons who are not members of one of the above groups and own and control their business may also be eligible if they establish their "social" and "economic" disadvantage. The Department notes, for example, that people with disabilities have disproportionately low incomes and high rates of unemployment, and that many may be socially and economically disadvantaged. A determination of whether an individual with a disability meets DBE eligibility criteria is made on a case-by-case basis. More information on how social and economic disadvantage is determined can be found in Appendix E to 49 CFR Part 26.
As far as obtaining certification as a DBE, the DOT guidance from the web page is as follows:
Obtaining Certification as a DBE: Firms meeting the eligibility standards must contact the specific state or local transportation entity for which they wish to participate in contracts. In addition to requesting documentary evidence substantiating a firm's size, owner's PNW, independence, and an individual's ownership and control, recipients are required to perform an on-site visit to the firm's offices and job sites. Firms can obtain instructions on how to apply to become a DBE by contacting state departments of transportation or state DBE liaison and certification officers. To ease the burden of applying to multiple DOT recipients within a state, the Department requires a Unified Certification Program (UCP) to be developed so that applicants need only apply once for DBE certification that will be honored by all recipients in the state.
If you wish to talk with someone at the USDOT for further information, please call the DOT Office of Civil Rights at 202-366-4648. (Posted: March, 2012)
Q. What are DBE goals/regulations for the expanded program to help small business participation in transportation programs announced by U.S. Transportation Secretary on January 27, 2011?
A. A description of the new USDOT initiatives for small and disadvantaged businesses may be found at the web page of the USDOT Office of Small and Disadvantaged Business Utilization.
The complete text of the new DOT rule may be found in the Federal Register, Vol. 76, No. 19, Friday, January 28, 2011, pages 5083-5101. (Posted: June, 2011)
Q. The prime contractor for a federally funded transit facility in Florida has a subcontractor who is a certified MBE concrete contractor. The grantee is considering paying for the cement materials that the subcontractor will use to take advantage of a tax credit. In calculating MBE participation credit, can the value of the concrete placed by the contractor (he is responsible for warranties and quality of his work) be included as MBE credit if the materials are purchased by the grantee? Background Information: The State of Florida has a statute whereby local government agencies may purchase materials for a capital project without paying state tax.
A. Calculations of DBE participation under FTA rules would be based on the dollar value of the DBE subcontract. If the grantee is furnishing concrete to the DBE, the dollars associated with the concrete purchase would not appear in the DBE subcontract value, and those dollars would thus not count as DBE participation in the program. (Posted: August, 2013)
Q. If a DBE subcontractor on a federally funded project subcontracts an element of his work to a non-DBE contractor; can full DBE credit be taken for the entire amount of the DBE contract?
Background Information: Expressed hypothetically, if a DBE contractor has a $1 million subcontract for a task and subcontracts $200,000 of the task to a non-DBE sub-contractor, can the full value of the task, $1 million, be applied to DBE participation?
A. To meet legal standards, the DBE program is required to be narrowly tailored. As a result, DBE credit can only be awarded for work actually performed by DBEs themselves. An outgrowth of this principle is that when a DBE prime contractor or subcontractor subcontracts work to another firm, the work counts toward DBE goals only if the other firm is itself a DBE. See 49 CFR 26.55. (Posted: August, 2013)
Q. Can you provide a list or database location for both of the following: 1) Top 10 FTA construction projects with highest dollar value awarded to DBE firms; 2) Top 10 FTA construction projects with highest number of DBE firms awarded on the project? Background Information: We'd like to see how our project is measuring up with the industry achievements.
A. We don’t track construction projects. We simply track DBE attainment by grantees. We post the DBE goal attainment for our top 50 grantees on our web page. (Posted: December, 2013)
Q. We are located in Baton Rouge, LA and have contracted for services from a DBE certified in Florida. Can we receive credit for awarding this contract to a DBE even though they are not certified in Louisiana?
A. You cannot receive credit for awarding a contract to a DBE certified in Florida. The DBE must be certified in Louisiana. (Posted: October, 2015)
Q. I am currently working on setting our DBE goals. Part of that process entails identifying contracting opportunities. Several of our sub recipients have contracted with a Third Party Operators to operate their transit system. 1) When I looked at the Third Party Agreements none of them have a contracted amount. They include the formula by which the Third Party Operator will be paid but no minimum or not to exceed amount is included. My question, is this practice recommended or a "best practices" routine? Also, debate has raged around the definition of "contract value". Is the "contract value" or "value of the contracting opportunity" the total amount of the contract and not just the federal portion? For example, in the 5311 Rural Transit program, if sub recipients have a contract with us for $100,000, the FTA portion is $50,000. The sub recipient is required to pay their $50,000 match with local funds. In that case what is the value of that contract, or what could a sub contractor who bids on this contract expect to earn?? Should how the sub recipient pay for his match impact the definition?
A. The contracts between your sub-recipients and the operators should have a “not to exceed” amount that reflects the estimated total cost of performing the contract during the entire period of performance. This amount would be stated in the contract as the limit of the sub-recipient’s obligation under the contract, so that the operator cannot spend more funds than the sub-recipient has available. This estimated total cost of performance (expressed as a not to exceed amount) would be the “contract value.” When computing the “value of the contracting opportunity,” as you say, we would say that the total contract value, not just the FTA funded amount, would constitute the value of the contracting opportunity as far as setting DBE goals.
You also refer to the agreements between your agency and the sub-recipients. We do not think that the method of the sub-recipient’s payment of his share should affect the definition of “contract value” above, which is in turn the “value of the contracting opportunity.” (Posted: November, 2015)