Companion Guide to Video August 2012

www.fhwa.dot.gov/federal-aidessentials

Civil Rights

Disadvantaged Business Enterprise

Program Overview

Each year, the Federal Highway Administration 

(FHWA) allocates approximately $40 billion in 

Federal funds to State departments of 

transportation (State DOTs) and local public 

agencies (LPAs) to construct and maintain our 

Nation’s roadways. As a Federal agency, FHWA 

has the responsibility to ensure that these public 

funds benefit everyone and do not result in 

discrimination prohibited by Title VI of the Civil 

Rights Act of 1964. Even though this law banned 

discrimination in federally funded programs, by the

1980s the U.S. Department of Transportation 

(U.S. DOT) found that discriminatory practices still 

existed in transportation contracting. In an effort to 

remedy this situation, the U.S. DOT relied on the 

principles of Title VI to create a program to “level 

the playing field” for minority- and women-owned 

firms to compete for DOT-funded contracts.

That program is now called the Disadvantaged 

Business Enterprise Program or DBE Program, and 

is no longer limited to minorities and women.

The DBE Program applies to State and LPAs that 

receive funds from FHWA, the Federal Transit 

Administration (FTA), and the Federal Aviation 

Administration (FAA). 

As a condition of using Federal-aid dollars for your 

LPA-construction projects, you must understand 

what the DBE Program is, how it relates to your 

contracts, and what your specific role is for the 

program.

As recipients of Federal funds, State DOTs must 

comply with U.S. DOT DBE Program regulations 

and ensure compliance by LPAs that award or 

administer DOT-assisted contracts. The DBE 

regulations have six parts that comprise a DBE 

Program. All pieces fit together like a puzzle. Each 

piece is very important.

Disadvantaged business enterprise requirements must be 

met as a condition for using Federal-aid funding
Federal-aid Essentials for Local Public Agencies

There are general requirements in the regulations 

for establishing a DBE program, the objectives, 

and the required records and reports. Most 

importantly, the regulations require the State to 

include DBE assurances in every contract, and in 

each financial agreement with LPAs. LPAs must, 

in turn, ensure that these assurances are in all 

prime contracts and subcontracts.

DBE assurances hold recipients contractually 

accountable to comply with the State’s approved

DBE Program. Non-compliance can lead to the 

loss of Federal funds or terminiaton of contracts.

The requirements to properly implement the DBE 

Program in each State are prescribed in the 

administrative requirements. These include: 

• Designation of a DBE liaison officer

• Establishing prompt payment and return of 

retainage requirements

• Developing a monitoring and enforcement 

mechanism. 

The monitoring and enforcement mechanism 

verifies that the work committed to DBEs is 

actually performed by DBEs, and that their 

payments are consistent with their approved 

contracts. 

State DOTs must ensure that all program 

participants, such as you, the LPA, comply with 

the DBE Program requirements. LPAs must 

perform monitoring and enforcement activities on 

Federal-aid projects.

The regulations require the State DOT to set an 

annual overall DBE participation goal and to 

explain how they will meet the goal. The 

regulations also include procedures for making 

certification decisions and removing the eligibility 

of DBE firms.

A significant component of the DBE Program is 

compliance and enforcement. Failure to comply 

with the DBE regulations may result in formal 

enforcement actions, or complaints filed against 

the State DOT or you, the LPA.

This section also explains how DBE participation is 

counted toward DBE goals. It defines commercially 

useful function and describes good faith effort 

procedures when a prime contractor cannot meet a 

DBE goal in a contract. These are contract 

administration requirements that LPAs must abide 

by. Other videos are available describing these 

requirements. 

Certification is a key component of the DBE 

program. A primary objective of the program is to 

ensure that “only firms that ‘fully’ meet the eligibility 

standards are permitted to participate as DBEs.” 

This part of the regulations establish the eligibility 

criteria to qualify as a DBE, which are:

1. The firm must be a small business, for 

profit

2. The firm must be at least 51 percent owned 

by socially and economically

disadvantaged individuals

3. The firm must be controlled by socially and 

economically disadvantaged individuals

If you have reason to believe that a 

firm does not meet these criteria, 

notify your State DOT.

The regulations require that each State handle its 

certification procedures for DBE applications 

through a one-stop shopping process, called the 

Unified Certification Program, or UCP. Once a DBE 

firm is certified by a UCP, the certification is 

recognized by all DOT recipients in the State, 

including LPAs. 

You will need to understand these things to ensure 

your Federal-aid contracts comply with DBE 

requirements. 
Federal-aid Essentials for Local Public Agencies

Additionally, this part of the program outlines the 

enforcement actions that may be taken against 

contractors and DBE firms that make false 

statements or attempt to defraud the government. 

Lastly, the regulations require cooperation, 

mandate confidentiality of information, and prohibit 

intimidation or retaliation against any individual or 

firm involved in a DBE complaint. 

To comply with these requirements, each State 

must establish a DBE Program and develop a 

DBE Plan for FHWA approval. The DBE Plan is 

the State DOT’s guide on how it will implement the 

DBE Program. It is an essential document for 

those with DBE Program responsibilities, such as 

you, the LPA. 

Understanding your role is critical to 

your ability to comply with DBE 

Program requirements to ensure 

that your project remains eligible to 

receive federal funds.

What exactly does conformance to DBE Program 

requirements mean for you as the LPA?

First, contact your State DOT to get a copy of the 

State’s DBE Program Plan. Once you receive a 

copy, you will know:

• What’s in the plan

• Who the DBE liaison officer is

• The administrative requirements

• What the State expects LPAs to do

Second, you will also need to know:

• How your State’s Unified Certification 

Program works

• Where to locate the directory or database 

of certified contractors

• How to identify the type of work DBEs are 

certified to perform. 

This is an important first step in counting DBE 

participation on Federal-aid contracts.

Bottom line, as the LPA, you must know and follow 

your State’s DBE Program Plan, unless otherwise 

indicated by your State. Adherence to the DBE 

Program requirements ensures that your local 

Federal-aid project funding is not jeopardized nor 

delayed due to complaints, challenges, or other 

issues.
Federal-aid Essentials for Local Public Agencies

The content of this 

document is not a 

substitute for 

information obtained 

from State departments 

of transportation, 

appropriate FHWA 

Division Offices, and 

applicable laws. 

Scenarios have been 

simplified for emphasis 

and do not necessarily 

reflect the actual range of 

requirements applicable 

to the scenario or this 

topic. This document

was created under 

contract number 

DTFH63-12-F-00025. It is 

brought to you by the 

Federal Highway 

Administration (FHWA), 

U.S. Department of 

Transportation, and is 

offered to the public to 

heighten and focus 

awareness of Federal-aid 

requirements within the 

local public agencies

community and 

reinforces the 

importance of these 

necessary policies, 

procedures, and 

practices.

This Companion Resource 

is the script content for 

the video production of 

the same name. 

Additional Resources

• Regulations addressing the U.S. DOT's DBE program

http://www.ecfr.gov/cgi-bin/textidx?region=DIV1;type=boolean;c=ecfr;cc=ecfr;sid=14e071f96d5d61cb9d2

410ed56c59d3d;q1=dbe;rgn1=Section%20Heading;op2=and;rgn2=Sectio

n;op3=and;rgn3=Section;view=text;idno=49;node=49%3A1.0.1.1.20;rgn=

div5

• Guidance from the U.S. DOT’s OSDBU office on DBE requirements

http://www.osdbu.dot.gov/DBEProgram/index.cfm

• Guidance on the DBE program, from FHWA’s Office of Civil Rights

http://www.fhwa.dot.gov/civilrights/programs/dbess.htm