Individual Showing of Disadvantage Under New DBE/ACDBE Rules

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.

Are you a business owner who wants to participate in the Disadvantaged Business Enterprise (DBE) or Airport Concession Disadvantaged Business Enterprise (ACDBE) programs but who doesn’t fall into one of the categories presumed to be disadvantaged? If so, this blog post will explain how you can make an individual showing of social and economic disadvantage.

As you may know, members of certain groups are presumed to be disadvantaged under Section 26.67 of the rule (women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans) and do not have to prove that they are socially disadvantaged.

However, individuals who are NOT a member of one of those groups can qualify for DBE or ACDBE certification by providing a detailed personal narrative (PN) to prove their social disadvantage and a personal net worth (PNW) statement to prove economic disadvantage.

Your PN should describe specific acts or omissions that have impeded your progress or success in the business world, and how you were related to an objective distinguishing feature (ODF) that caused you to be treated differently or unfairly. An ODF can be your race, ethnicity, gender, physical disability, or any other characteristic that sets you apart from the dominant group. For example, individuals whose background is Middle Eastern are not presumed disadvantaged under the regulations. However, with a PN, they could potentially establish social disadvantage.

Your PN should also explain how the discrimination or bias you faced has harmed your business opportunities, such as limiting your access to capital, contracts, markets, education, or training. You do not need to have filed a formal complaint nor do you need to be able to cite a specific discrimination statute to prove your social disadvantage, but you should provide as much detail and documentation as possible to support your claim.

Your PNW statement should show that your personal net worth (the total value of your assets minus your liabilities) does not exceed the cap set by the DOT, which as of May 9, 2024 is $2.047 million. Your PNW statement should include all your assets, such as cash, bank accounts, stocks, bonds, real estate, vehicles, and business interests. It should also include all your liabilities, such as mortgages, loans, credit card debts, and taxes.

If you can provide the required evidence, you will have a better chance of proving your disadvantage status and qualifying for the DBE or ACDBE programs. These programs can help you access federal contracts and grants, as well as other benefits and opportunities for your business.

If you have any questions about DBE certification or need assistance with a Personal Narrative for your application, please contact Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141.

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