Disadvantaged Business Enterprise and Airport Concession Disadvantaged Business Enterprise Program Implementation Modifications; Correction

Agency

Office of the Secretary (OST), U.S. Department of Transportation (DOT or the Department).

Action

Correcting amendments.

Summary

The U.S. Department of Transportation (DOT or Department) is correcting a final rule that appeared in the Federal Register on April 9, 2024, concerning the Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) program regulations.

Dates

Effective on July 3, 2024.

For Further Information Contact

For questions related to the final rule or general information about the DBE and ACDBE Program regulations, please contact Marc D. Pentino, Associate Director, Disadvantaged Business Enterprise Programs Division, Departmental Office of Civil Rights, Office of the Secretary, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W78-302, Washington, DC 20590 at 202-366-6968/ [email protected] or Lakwame Anyane-Yeboa, ACDBE and DBE Compliance Lead, Disadvantaged Business Enterprise Programs Division, Departmental Office of Civil Rights, Office of the Secretary, U.S. Department of Transportation, 1200 New Jersey Avenue SE, Room W78-103, Washington, DC 20590, at 202-366-9361/ [email protected]. Questions concerning part 23 amendments should be directed to Marcus England, Office of Civil Rights, National Airport Civil Rights Policy and Compliance (ACR-4C), Federal Aviation Administration, 600 Independence Ave. SW, Washington, DC 20591 at 202-267-0487/ [email protected] or Nicholas Giles, Office of Civil Rights, National Airport Civil Rights Policy and Compliance (ACR-4C), Federal Aviation Administration, 600 Independence Ave. SW, Washington, DC 20591, at 202-267-0201/ [email protected]. Office hours are from 8 a.m. to 4:30 p.m., E.T., Monday through Friday, except Federal holidays.

List of Subjects in 49 CFR Part 23 and 26

Administrative practice and procedure, Airports, Civil Rights, Government contracts, Grant programs-transportation; Mass transportation, Minority Businesses, Reporting and recordkeeping requirements.

§ 23.35 What role do business development and mentor-protégé programs have in the DBE program?

(a) An owner whose PNW exceeds $2,047,000 is not presumed economically disadvantaged.

(b) The Department will adjust the PNW cap by May 9, 2027 by multiplying $1,600,000 by the growth in total household net worth since 2019 as described by "Financial Accounts of the United States: Balance Sheet of Households (Supplementary Table B.101.h)" produced by the Board of Governors of the Federal Reserve ( https://www.federalreserve.gov/releases/z1/ ), and normalized by the total number of households as collected by the Census in "Families and Living Arrangements" ( https://www.census.gov/topics/families/families-and-households.html ) to account for population growth. The Department will adjust the PNW cap every 3 years on the anniversary of the adjustment date described in this section. The Department will post the adjustments on the Departmental Office of Civil Rights' web page, available at https://www.Transportation.gov/DBEPNW. Each such adjustment will become the currently applicable PNW limit for purposes of this regulation.

(c) The Department will use formula 1 to this paragraph (c) to adjust the PNW limit:

Formula 1 to Paragraph (c)

[Link]

§ 26.5 Definitions.

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§ 26.45 How do recipients set overall goals?

(a) * * *

(2) If you are an FTA Tier II recipient who intends to operate a race-neutral DBE program, or if you are an FAA recipient who reasonably anticipates awarding $250,000 or less in FAA prime contract funds in a Federal fiscal year, you are not required to develop overall goals for FTA or FAA, respectively, for that Federal fiscal year.

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§ 26.53 What are the good faith efforts procedures recipients follow in situations where there are contract goals?

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(g) When a DBE subcontractor or any portion of its work is terminated by the prime contractor as provided in paragraph (f) of this section, or the firm fails to complete its work on the contract for any reason, including when work committed to a DBE is not countable or reduced due to overestimations made prior to award, the prime contractor must use good faith efforts to include additional DBE participation to the extent needed to meet the contract goal. The good faith efforts shall be documented by the contractor. If the recipient requests documentation under this provision, the contractor shall submit the documentation within 7 days, which may be extended for an additional 7 days, if necessary, at the request of the contractor, and the recipient shall provide a written determination to the contractor stating whether or not good faith efforts have been demonstrated.

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§ 26.65 Business Size Determinations.

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(b) Statutory Cap. Even if a firm is a small business under paragraph (a) of this section, it is ineligible to perform DBE work on FHWA or FTA assisted contracts if its affiliated annual gross receipts, as defined in 13 CFR 121.104, averaged over the firm's previous three fiscal years exceed $30.72 million (as of March 1, 2024). The Department will adjust this amount annually and post the adjusted amount on its website available at https://www.transportation.gov/ DBEsizestandards.

§ 26.68 Personal net worth.

(a) General. An owner whose PNW exceeds $2,047,000 is not presumed economically disadvantaged. The Department will adjust the PNW cap pursuant to paragraph (d) of this section.

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(d) Regulatory adjustments. (1) The Department will adjust the PNW cap by May 9, 2027 by multiplying $1,600,000 by the growth in total household net worth since 2019 as described by "Financial Accounts of the United States: Balance Sheet of Households (Supplementary Table B.101.h)" produced by the Board of Governors of the Federal Reserve ( https://www.federalreserve.gov/releases/ z1 / ), and normalized by the total number of households as collected by the Census in "Families and Living Arrangements" ( https://www.census.gov/topics/families/families-and-households.html ) to account for population growth. The Department will adjust the PNW cap every 3 years on the anniversary of the adjustment date described in this section. The Department will post the adjustments on the Departmental Office of Civil Rights' web page, available at https://www.Transportation.gov/ DBEPNW. Each such adjustment will become the currently applicable PNW limit for purposes of this regulation.

(2) The Department will use formula 1 to this paragraph (d)(2) to adjust the PNW limit:

Formula 1 to Paragraph (d)

[Link]

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The revision reads as follows:

§ 26.81 Unified Certification Programs.

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§ 26.87 Decertification.

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(h) Status of firm during proceeding. A DBE remains certified until the certifier issues a NOD.

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(j) Consequences. Decertification has the following effects on contract and overall goals and DBE participation:

(1) When a prime contractor has made a commitment to use a DBE, but a subcontract has not been executed before the certifier issues the NOD as provided for in paragraph (g) of this section, the committed firm does not count toward the contract goal. The recipient must direct the prime contractor to meet the contract goal with an eligible DBE or demonstrate to the recipient that it has made good faith efforts to do so.

(2) When the recipient has made a commitment to using a DBE prime contractor, but a contract has not been executed before the certifier issues the NOD, the decertified firm does not count toward the recipient's overall DBE goal.

(3) If a prime contractor has executed a subcontract with a DBE before the certifier issues the NOD, the prime contractor may continue to receive credit toward the contract goal for the firm's work. In this case, however, the prime contractor may not extend or add work to the contract without prior written consent from the recipient.

(4) If a prime contractor has executed a subcontract with a DBE before the certifier issues the NOD, the prime contractor may continue to receive credit toward the contract goal as set forth in paragraph (j)(3) of this section; however, the portion of the decertified firm's continued performance of the contract must not count toward the recipient's overall goal.

(5) If the recipient executed a prime contract with a DBE that was later decertified, the portion of the decertified firm's performance of the contract remaining after the certifier issued the NOD must not count toward an overall goal, but the DBE's performance of the contract may continue to count toward satisfying any contract goal.

(6) The following exceptions apply to this paragraph (j):

(i) If a certifier decertifies a firm solely because it exceeds the business size standard during the performance of the contract, the recipient may continue to count the portion of the decertified firm's performance of the contract remaining after the certifier issued the NOD toward the recipient's overall goal as well as toward the contract goal.

(ii) If the certifier decertifies the DBE because it was acquired by or merged with a non-DBE, the recipient may not continue to count the portion of the decertified firm's performance on the contract remaining, after the certifier issued a NOD, toward either the contract goal or the overall goal, even if a prime contractor has executed a subcontract with the firm or the recipient has executed a prime contract with the DBE that was later decertified. In this case, if eliminating the credit of the decertified firm will affect the prime contractor's ability to meet the contract goal, the recipient must direct the prime contractor to subcontract to an eligible DBE to the extent needed to meet the contract goal or demonstrate to the recipient that it has made good faith efforts to do so.

Signed pursuant to authority delegated at 49 CFR 1.27(c) in Washington, DC.