This week, the federal government issued an Interim Final Rule and associated Guidance relating to the Disadvantaged Business Enterprise (“DBE”) and Airport Concession Disadvantaged Business Enterprise (“ACDBE”) programs. This “Interim Final Rule” follows this administration’s policy strongly against presumptions of disadvantage based on race, ethnicity, and sex. This also comes while the consent order in the Mid-America Milling case challenging the constitutionality of the DBE program remains pending.
The Interim Final Rule and associated Guidance directed the Unified Certification Programs (the state level groups that administer the DBE and ACDBE programs) in each state that they:
- May not use race- or sex-based presumptions in determining eligibility for the program;
- Must reevaluate the eligibility of every single existing DBE and ACDBE under their newly implemented certification standards;
- Must decertify any DBE or ACDBE that does not meet the new standards; and
- The decertification procedures under §26.87 (i.e., right to hearing, right to present evidence, etc.) of the regulations do not apply to these decertification decisions.
The guidance issued by the USDOT did not provide any framework for how UCPs must reevaluate DBEs and ACDBEs or how they must now evaluate claims of disadvantage. Potentially the UCPs may follow the current standards for individuals not presumed to be disadvantaged under the existing regulations to prove disadvantage.
Please look for future blogs for updates on this developing situation, including the inevitable legal challenges that will arise. I anticipate many such challenges, including the lack of due process created by directive not to follow the decertification process contained in the regulations.
If your company needs assistance with DBE or ACDBE certification or recertification, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.
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