Preliminary Note: 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 a copy of the final rule. The changes will go into effect on May 9, 2024. This blog is one in a series highlighting the changes and updates found in this final rule.

If you are a business owner who is certified as a Disadvantaged Business Enterprise (DBE) by the U.S. Department of Transportation (USDOT), you may wonder if the certifying agency may require you to recertify or reapply every year to maintain your eligibility. The short answer is no, and always has been. However, the new DBE regulations help clarify what has often been confusing in the past.

Over my years of working with DBEs, I frequently hear complaints about certifying agencies asking for a boatload of paperwork every year when it is time for the DBE renewal. This pattern was also reflected in USDOT appeal decisions that instructed certifying agencies that they could not do this. (Some past decisions can be found here, but for unknown reasons the USDOT stopped publishing DBE appeal decisions.). Nevertheless, many of my DBE clients continue to have trouble every year at renewal time.

According to newly revised regulations, DBEs are not required to reapply, renew certification, or undergo recertification each year. What they are required to provide to their certifier is an annual declaration of eligibility (DOE) and documentation of the company’s gross receipts for the most recently completed fiscal year. The certifier is the agency that granted the DBE certification, such as a state transportation department or a transit authority.

The DOE is a sworn statement that there have been no changes in the DBE's circumstances affecting its eligibility, or that any changes have been reported to the certifier. The gross receipts are calculated on a cash basis (this is an update to the prior regulations, which were silent on this point), regardless of the overall accounting method used by the DBE. The purpose of these requirements is to ensure that the DBE continues to meet the size and economic criteria for certification.

In addition to the annual DOE and gross receipts, DBEs must also notify their certifier of any material changes affecting their continued eligibility within 30 days of the occurrence. A material change could include a change in ownership, control, management, or business activities of the DBE. A duly executed DOE must accompany the notice of material change.

What about certification reviews? Under the regulations, the certifier may conduct a certification review at any reasonable time and/or at regular intervals of at least two years to verify the DBE's eligibility. The review may include a new on-site review of the DBE's office and records, or the certifier may rely on another certifier's report of an on-site review. The certifier must follow the procedures of § 26.87 of the regulation to remove the DBE's certification if it finds that the DBE no longer meets the eligibility criteria.

While the answer to the question of whether a certifier can require a DBE to recertify every year is no, the DBE must comply with the annual and ongoing reporting and documentation obligations and be prepared for a certification review at any time. The recertification process is designed to ensure that only eligible firms benefit from the DBE program and that the program goals are met.

If you have any questions or doubts about your loan or DBE certification, please contact Danielle Dietrich, Esq. at or 412-449-9141.

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