Depending on the nature of your business and its geographical reach, you may operate across multiple states. If you are aiming to obtain Disadvantaged Business Enterprise (DBE) certification, you must first initiate the process through your primary state of operation (referred to as your “home state”). Most people do not know that DBE certification is not a national certification – you must have the certification in every state where you wish to do business as a DBE.

After your business secures DBE certification in its home state, you can then seek certification in additional states. This process, known as interstate certification, requires you to present specific materials but does not involve submitting an entirely new application. The guidelines for interstate certification are outlined in 49 C.F.R. § 26.85.

The interstate certification process is expected to be straightforward since the business is already certified in its home state. However, certifying agencies often make mistakes during this process.

For instance, the regulations restrict what information a certifying agency can demand for an interstate certification request. § 26.85 provides that an application must provide a copy of its certification notice from its home state, along with a copy of the application form, all supporting documents, and any other information that the company submitted in support of its home state (or any other interstate) application, along with any notices regarding your certification status, as well as a sworn affidavit.

It is important to note that certification in one state does not automatically guarantee certification in another state – reciprocity isn't automatic. The certifying authority assessing your interstate application can only consider specific factors as per the rule. However, their review must be limited to the documents listed above, and they cannot substitute their judgment for that of the home state. Certifiers risk blowback from the USDOT for not adhering to interstate rules.

Under §26.85(d)(2) of the regulations, an interstate application can only be denied if the business is already certified in its home state for one of the following five reasons:

  1. The home state certification was obtained through fraud.
  2. New information, not available during the home state certification, shows that the company does not meet eligibility criteria.
  3. The home state certification was factually erroneous or inconsistent with the regulations.
  4. The state law of the subsequent state mandates a different outcome than the home state’s law.
  5. The applicant failed to provide all the required information.

Unfortunately, certifying agencies often deviate from these rules. Numerous decisions by the United States Department of Transportation, which oversees the DBE program nationally, highlight errors certifying agencies make in the interstate process:

  • A factual error made by the home state must be clear and indisputable, and any inconsistency must be evident. It is against the regulations for certifying agencies to substitute their judgment for that of the home state. This principle is underscored by decisions like Engineering Operations, 23-0023, and Andis, LLC, 19-0146.
  • The process for evaluating an interstate application should not mirror the scrutiny of an initial application. As highlighted in A.B. Steel, Inc., 22-0051, an interstate application doesn't need to reestablish every aspect of eligibility, nor can it request documents not present in the home state's file, as emphasized in Stronghold Building & Supply, Inc., 15-0043.
  • There have been instances where certifying agencies incorrectly demanded new Personal Net Worth statements, additional financial documents, explanations of intercompany transfers, and other materials not found in the home state file, as noted in APW Holdings, LLC, 19-0137.
  • It is important to understand that interstate certification is not intended to be a series of repeated evaluations by subsequent jurisdictions, as highlighted in JP & Concepts Co., 16-0164.

If you receive a denial of an application for interstate certification, consulting with an experienced attorney is advisable to determine the appropriateness of an appeal. Seeking legal counsel during the preparation of your interstate certification request can also be beneficial.

If your company needs help with an interstate application for DBE certification, please contact Danielle Dietrich, Esq. at or 412-449-9141.

This blog is posted with the understanding that the author, publisher and distributor of this blog and/or any linked publication are not rendering legal, accounting, or other professional advice or opinions on specific facts or matters and, accordingly, assume no liability whatsoever in connection with its use.
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