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A DBE is a for-profit small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. For example, in the case of a corporation, such individuals must own at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding. Also, the management and daily business operations of a DBE business must be controlled by one or more of the socially and economically disadvantaged individuals who own it.
Eligibility requirements for certification as a DBE are stated in 49 CFR, Part 26, Subpart D-Certification Standards. The following six requirements must be proved by a DBE applicant, but they do not cover all the requirements found in 49 CFR, Part 26.
Social and Economic Disadvantage: A disadvantaged owner must be a U.S. citizen (or resident alien) and meet the federal definition of socially and economically disadvantaged as defined in 49 CFR, Part 26.67. Presumptive groups include women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Americans, or other minorities found to be disadvantaged by the regulations, or any individual found to be socially and economically disadvantaged on a case-by-case basis.
Rules to determine social and economic disadvantage also include extending the treatment of assets held by married couples to include domestic partnerships and civil unions that are legally recognized under state law. It also codifies guidance regarding the treatment of assets transferred to an immediate family member, or to a trust whose beneficiary is an immediate family member, for less than fair market value within two years prior to the submission of an application for certification or within two years of a participant’s annual program review.
Personal Net Worth: Only disadvantaged persons with a personal net worth (PNW) of less than $1,320,000 can be considered a potential qualified DBE. Items excluded from a person’s net worth calculation include an individual’s ownership interest in the applicant’s firm and his or her equity in their primary residence. Also, if an individual demonstrates that he or she is able to accumulate substantial wealth, the individual’s claim of economic disadvantage may be denied, even though the individual’s PNW is less than $1.32 million.
Business Size Standard A firm (including affiliates) must be a small business as defined by the Small Business Administration (SBA). It must not have had annual gross receipts over $23,980,000 in the previous three fiscal years ($56,420,000 for airport concessions in general, with some exceptions). Depending on the type of work the business performs, other smaller standards may apply.
Ownership: Must be a for-profit small business where socially and economically disadvantaged individuals own at least 51 percent interest and control management AND daily business operations; ownership cannot be in name only.
Independence: The business must not be affiliated with another firm in such a way as to compromise its independence and control. These include, but are not limited to, such areas as personnel, facilities, equipment, financial and/or bonding support, and other resources. This means a business should be operational on its own, without support beyond what is applicable under normal industry standards.
Management and Control: The socially and economically responsible DBE owner(s) must possess the power to direct or cause the direction of the management and policies of the firm and to make day-to-day decisions as well as long-term decisions on matters of management, policy, and operations. Any delegation of duties must be revocable, and where state law requires the owner to have a particular license or other credential in order to own and/or control a certain type of firm, then the socially and economically disadvantaged persons who own and control a potential DBE firm of that type must possess the required license or credential. A mere change in business structure to meet DBE requirements may not be sufficient to prove management and control.
In general, to be eligible for the DBE Program, individuals must be U.S. citizens or lawfully admitted permanent residents who own 51% or more of a "small business,” establish that they are both socially and economically disadvantaged within the definition of the regulation, and show through the regulation standards that they control the business. The following general guidelines, taken in part from the applicable regulation (49 CFR Part 26), will help business owners determine whether they are eligible for the DBE Program:
Ownership - The business must be 51% owned by a socially and economically disadvantaged individual(s).
"Socially Disadvantaged" - You may be eligible if you are a member of one of the following presumptive groups: black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, subcontinent Asian Americans, women, or other groups found to be disadvantaged by the Small Business Administration (SBA). Persons who are not members of one of the aforementioned presumptive groups may also be eligible if they establish their "social" and "economic" disadvantage on an individual basis. More information on how social and economic disadvantage is determined can be found in Appendix E of 49 CFR Part 26. A determination of whether an individual meets DBE eligibility criteria is made on a case-by-case basis.
Personal Net Worth - Only socially disadvantaged persons with a personal net worth (PNW) of less than $1.32 million will be considered economically disadvantaged. Items excluded from a person's net worth calculation include an individual's ownership interest in the applicant firm and the equity in his or her primary residence. Additional exclusions are available for owners of airport concessionaires (see 49 CFR Part 23).
Business Size Determination - A firm, including its affiliates, must be a small business as defined by SBA size standards. It must not have had annual gross receipts more than $22.41 million over the previous three fiscal years. The U.S. Department of Transportation periodically adjusts this threshold for inflation.
Independence: The business must not rely on another firm or firms in such a way as to compromise its independence and control.
Control - A disadvantaged owner seeking certification must possess the power to direct or cause the direction of the management and policies of the firm. The owner must also have an overall understanding of, and managerial and technical competence and experience directly related to, the type of business in which the firm is engaged.
Burden of Proof Allocation - Applicants carry the burden of proof regarding their eligibility and must demonstrate with a preponderance of evidence that they meet all requirements concerning group membership or individual disadvantaged status, business size, independence, ownership, and control.
Additional program requirements and certification procedures are found in Regulation 49 CFR Parts 23 and 26.
Step 1: The application is received.
Step 2: The application is checked for completeness. If incomplete, the applicant is sent a letter requesting the missing information.
Step 3: Once the application is complete, an on-site review is scheduled and conducted at the applicant's office. During the on-site review, interviews are conducted with the owners of the firm.
Step 4: All materials submitted by the applicant and the on-site report are reviewed by the investigator, who determines if the applicant meets the eligibility standards. The investigator also reviews the work classification(s) requested and makes a recommendation regarding the adequacy of the applicant's resources to perform in these work areas.
Step 5: The investigator reviews the application and makes a decision on the firm's eligibility for certification in the DBE program.
Step 6: If the application is approved, the applicant is notified in writing of the certification approval.
No. There is no cost for the certification process.
The link to download the DBE certification application is as follows: WVDOT DBE Application
Firms located outside of West Virginia that are certified in their home state and applying for DBE certification in the state of West Virginia must submit the interstate application. Please follow the link to download: WVDOT DBE Interstate Affidavit Application.
Certification is ongoing; however, once certified, the business will be required to submit an annual "Annual Affidavit of No Change" and supporting documentation on the anniversary date of its original certification. This form affirms that there is no change that has occurred that impacts the company’s DBE status.
DBE goals are established for projects funded by the federal government. If you are interested in these contracts, you should apply for WVDOT DBE certification.
Yes, those who are identified as social and economic disadvantaged individuals and make up 51 percent of the firm's ownership are required to complete the application. Please follow the link to download: Personal Net Worth Application
The WVDOT Equal Opportunity Office seeks to:
Ensure nondiscrimination in the award and administration of contracts.
Create a level playing field on which DBEs can compete fairly for contracts.
Ensure that the department's DBE program is narrowly tailored.
Ensure that only firms that fully meet the eligibility standards are permitted to participate as DBEs.
Assist in the development of firms that can compete successfully in the marketplace outside the DBE Program.
Some advantages to becoming a DBE-certified business include:
The Department maintains a DBE Directory identifying all firms eligible to participate as DBEs. The DBE Directory lists the firm's name, address, telephone number, and the type of work the firm has been certified to perform as a DBE. The West Virginia DBE UCP Directory is available to the public electronically, on the internet. The DBE UCP Directory is updated as additions/changes are made.
Yes, as a DBE prime contractor, the DBE firm must also comply with the good faith efforts requirements of 49 CFR Part 26. As a DBE prime contractor, count the entire value of the work to be performed by the DBE’s own forces as well as the work that they commit to be performed by DBE subcontractors.
DBE bidders on prime contracts will be expected to make the same outreach efforts as other bidders and to document good faith efforts in situations where they do not fully meet contract goals.
No, a firm is not required to be pre-qualified to become DBE certified.
Contractors must be pre-qualified with the Department to bid for the performance of road, bridge, or public transportation construction contracts greater than $2,000,000.00. Pre-qualification is accomplished by using an application process. The contractor pre-qualification process results in the issuance of a Certificate of Qualification for each successful applicant, which lists the approved work classes and the Maximum Capacity Rating in dollars.
To become prequalified, a contractor should have a “Certificate of Qualification.” To do this, the contractor must submit a Contractor’s Prequalification Statement (Contract Form SC-421) containing the information required based on the category of the project. This may contain financial statements and experience records with detailed information as to available financial resources, equipment, and other assets, together with an account of experience, a record of work completed, personnel of the organization, and all other facts called for in the prequalification statement. As deemed necessary, the Director of Construction may also request additional information for consideration in issuing a “Certificate of Qualification.”
The process for current DBE's to update their information in the UCP database can be accomplished when you submit the ANNUAL “No Change” AFFIDAVIT FOR CONTINUTING DBE CERTIFICATION” in the section of the form entitled Significant Changes (explain changes in the business on a separate sheet of paper and attach it to this document). DBE no-change affidavit
The process for current DBE's to request additional NAICS codes for their DBE company can be accomplished when you submit the ANNUAL “No Change” AFFIDAVIT FOR CONTINUTING DBE CERTIFICATION” in the section of the form entitled “New Work Area/Services: Request Additional NAICS Codes: Request to add additional NAICS Code(s), submit copies of three executed contracts, and include NAICS Code (if known). For further information on this, review the NAICS website at https://www.naics.com/search/
The UCP provides "one-stop shopping" where disadvantaged businesses that meet the DBE certification requirements and become certified are eligible to be used to meet the DBE goal requirements on any project with funding from the U.S. Department of Transportation. The UCP eliminates the need for multiple DBE certifications with recipients of funding from the U.S. Department of Transportation.
If you are an existing DBE firm, the following documentation must be provided:
1. A complete copy of the application form, all supporting documents, and any other information you have submitted to your home state, or any other state related to your firm's certification. This includes affidavits of no change and any notices of changes that you have submitted, as well as any correspondence concerning your application or status as a DBE firm.
2. Any notices or correspondence from states other than your home state relating to your status as an applicant or certified DBE in those states, including facts and all documentation concerning whether your firm was denied certification or decertified.
3. If you have filed a certification appeal with DOT, you must provide your letter of appeal and DOT's response.
4. You must submit the Interstate affidavit application sworn to by the firm's owners before a person who is authorized by state law to administer oaths executed under penalty of perjury to the laws of the United States.
Note: Firms located outside of West Virginia that are certified in their home state and applying for DBE certification in the state of West Virginia must fill out an Interstate Affidavit application.
The processing time is approximately 90 days from the date the completed application and support documentation are provided.
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