DBE FAQ

 

FREQUENTLY ASKED QUESTIONS

 

1.   WHAT IS A DISADVANTAGED BUSINESS ENTERPRISE (DBE)? 

 

A Disadvantage Business Enterprise (DBE) is a for-profit small business concern that is at least 51% owned by one or more individuals who are both socially and economically disadvantaged, or in the case of a corporation, wherein 51% of the stock is owned by one or more socially and economically individuals, who also control the management and daily business operations of the corporation.

 

2.   WHY DOES THE HAWAII DEPARTMENT OF TRANSPORTATION (HDOT) HAVE A DBE PROGRAM?

 

As a condition of federal financial assistance, the HDOT is required to develop, implement and maintain a DBE program, in accordance with Title 49, Code of Federal Regulations, Part 26 (49 CFR Part 26).

 

3.   WHAT BENEFITS ARE THERE TO BEING CERTIFIED AS A DBE?

 

As a certified DBE, your firm will be:

 

  1. Listed in the DBE Directory that is updated weekly and posted on the Internet.  This is an excellent marketing tool for your business.
  2. Eligible to participate in USDOT-assisted projects, to include those for the counties.
  3. Eligible to seek DBE certification in other states (i.e. home state certification allows you to apply for certification in other states).
  4. Able to participate in free or low cost support services, such as seminars on marketing, government procurement and financing.

 

4.   WHAT ARE THE REQUIREMENTS TO BE CERTIFIED AS A DBE?

 

In order to be certified as a DBE, you must meet the following eligibility requirements:

 

Social and Economic Disadvantage – You must be an individual who is a citizen or lawfully admitted permanent resident of the United States who the HDOT determines to be socially (i.e. member of a presumptive group) and economically (i.e. personal net worth of less than $750,000) disadvantaged on a case-by-case basis; and an individual who is a member of one of the following groups, who are presumed to be socially and economically disadvantaged:

 

  1. “Black American”, which includes persons having origins in a Black racial group of Africa;
  2. "Hispanic American”, which includes persons having Mexican, Puerto Rican, Cuban, Dominican, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;
  3. “Native American”, which includes persons who are American Indians, Eskimos, Aleuts, or Native Hawaiians;
  4. “Asian-Pacific American”, which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kumpuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories of the Pacific Islands, (Republic of Palau), the Commonwealth of the Northern Marianas Islands, Macao, Fiji, Tonga, Kiribati, Juvalu, Nauru, Federated States of Micronesia or Hong Kong;
  5. “Subcontinent Asian American”, which includes persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal or Sri Lanka;
  6. Women; or
  7. Any other group whose members are designated as socially and economically disadvantaged by the U.S. Small Business Administration (SBA).

 

Business Status and Size – Your firm must be an existing for-profit business and must meet the business size standards for the type of work for which you are seeking certification.

 

Ownership - The socially and economically disadvantaged individual(s) must own at least 51% of the firm or, in the case of a corporation, such individuals must own at least 51% of each class of voting stock outstanding and 51% of the aggregate of all stock outstanding.  In the case of a partnership, 51% of each class of partnership interest must be owned by socially and economically disadvantaged individuals and must be reflected in the firm’s partnership agreement.  In the case of a limited liability company, socially and economically disadvantaged individuals must own at least 51% of each class of member interes.

 

Control - The socially and economically disadvantaged owner(s) must have control of the overall management and day-to-day operations of the firm.  The owners must possess the power to direct or cause the direction of the management and policies of the firm and to make long-term decisions on matters of management, policy and operations.

 

5.   WHAT IS THE CERTIFICATION PROCESS AND HOW LONG DOES IT TAKE?

 

  1. Submit a completed and notarized DBE Program Uniform Certification Application (UCA) and Personal Financial Statement with supporting documents to the Office of Civil Rights.  If your firm is certified by the U.S. Small Business Administration (SBA) as an 8(a) firm or Small Disadvantaged Business, you may submit your SBA application package in lieu of the UCA.  The HDOT may request additional information to supplement the SBA application.
  2. The firm is subject to an on-site review at the firm’s place of business.  This requirement is not applicable to out-of-state applicants.
  3. The certification is valid for three (3) years.  Once the three years have elapsed, you must re-apply for certification.
  4. The process takes approximately 90 days from the date a firm submits its application, personal financial statement and all supporting documents.

 

6.   WHEN MUST A CHANGE AFFIDAVIT BE SUBMITTED?

 

A firm must submit a Change Affidavit 30 days prior to the firm’s certification anniversary date (except in the year that the firm is due for re-certification).  For example, if a firm is certified on January 15, 2004, the Change Affidavit must be submitted by December 15, 2004.

 

A Change Affidavit is also required when there are significant changes to the firm’s eligibility as a DBE.  Examples of significant changes may include, but are not limited to:

 

  1. Change in ownership of the firm.
  2. Significant change in the personal net worth of individuals whose disadvantaged status are relied upon for certification.
  3. Changes to the business size, to the extent that the firm’s gross receipts (averaged over three years) may exceed the business size standard for the type of work for which the firm is certified.
  4. Change in address, telephone numbers or other contact information.

 

7.   CAN A NOT-FOR-PROFIT FIRM BE CERTIFIED AS A DBE?

 

No. Only a for-profit firm may be certified as a DBE.

 

However, a firm owned by an Indian tribe, Native Hawaiian or Alaska Native Corporation, as an entity, may be certified as a DBE.

 

8.   CAN OUT-OF STATE FIRMS BE CERTIFIED AS A DBE BY THE HDOT?  WHAT ARE THE REQUIREMENTS TO BE CERTIFIED?

 

Yes.  An out-of-state firm may be certified by the HDOT if they meet the following requirements:

 

  1. The out-of-state firm must be certified as a DBE in the state in which it has its principal place of business.
  2. The firm must complete and provide the UCA, Personal Financial Statement and supporting documents to the HDOT.  If these forms have already been completed for the home state certification, the HDOT may accept these forms, but may request additional information, as necessary, to determine eligibility.

 

9.   IN CALCULATING PERSONAL NET WORTH, HOW SHOULD ASSETS HELD BY SPOUSES OR OTHERS IN JOINT OR COMMUNITY PROPERTY BE COUNTED?

 

The basic principle in counting assets in the personal net worth calculation is to count the present value of assets attributable to the individual. If an asset is held as community property, or jointly (including a tenancy by the entireties) between two people, 50 percent of the value of the asset is normally attributed to each person.  For example, suppose a woman owner of a firm applying for DBE certification has, with her husband, a $100,000 joint savings account. Half of this asset -- $50,000 -- would be counted toward her personal net worth. The HDOT would not count the full $100,000 toward her personal net worth. A legal instrument valid under state law can alter this normal attribution of assets between owners.

 

10.   IN CALCULATING PERSONAL NET WORTH, HOW SHOULD VESTED PENSION PLANS, INDIVIDUAL RETIREMENT ACCOUNTS, 401(K) ACCOUNTS AND OTHER RETIREMENT SAVINGS ACCOUNTS BE COUNTED? 

 

The HDOT will count the present value of such assets less the tax and interest penalties that would accrue if the asset was distributed at the time of certification.

 

11.   AFTER A FIRM LOSES ELIGIBILITY FOR EXCEEDING SIZE LIMITS, OR AN INDIVIDUAL'S PRESUMPTION OF SOCIAL AND ECONOMIC DISADVANTAGE IS REBUTTED FOR EXCEEDING THE PERSONAL NET WORTH CAP, CAN THE INDIVIDUAL OR BUSINESS EVER PARTICIPATE IN THE DBE PROGRAM IN THE FUTURE?

 

When a firm is denied certification, the firm may reapply one year following the removal of eligibility. The provision applies regardless of the basis for the denial of certification. A denial based on business size or personal net worth grounds is no different, for this purpose, from a denial based on ownership or control grounds.

 

12.   CAN A FIRM REQUEST AN ADMINISTRATIVE HEARING WHEN THE HDOT PROPOSES TO REMOVE THE FIRM’S ELIGIBILITY?

 

Yes.  An administrative hearing shall be conducted at the firm’s request, to allow the firm to provide information in support of retaining its DBE certification.  The Civil Rights Coordinator or a designee will conduct the hearing.  The hearing will be taped to obtain a verbatim record pursuant to 49 CFR Part 26.

 

13.   CAN A FIRM APPEAL DIRECTLY TO THE U.S. DEPARTMENT OF TRANSPORTATION (USDOT)?

 

Yes.   Firms that have been denied initial certification, have been de-certified, or any third party who was unsuccessful in an ineligibility complaint, may file an appeal with the USDOT within 90 days of the HDOT’s decision.

 

Written appeals may be sent to:

 

U.S, Department of Transportation

Office of Civil Rights

400 7th Street, S.W. 5414

Washington D.C. 20590

 

14.   WHAT IS A CONTRACT GOAL? 

 

A DBE contract goal is assigned to a federal-aid project when it is anticipated that the HDOT’s overall goal will not be met through race-neutral means (i.e. methods that do not consider race or gender).  Contract goals will only be assigned to a project when there are sub-contracting opportunities.

 

15.   WHAT HAPPENS WHEN A BIDDER DOES NOT MEET THE CONTRACT GOAL PRIOR TO AWARD?

 

When the bidder does not meet the contract goal on a project, the bidder is required to demonstrate that it made good faith efforts by documenting that they have obtained enough DBE participation to meet the goal or, if they have not met the goal, by demonstrating that they made adequate good faith efforts to obtain the DBE participation to meet the goal.

 

16.   HOW ARE OVERALL ANNUAL DBE GOALS SET?

 

The HDOT shall establish overall goals in accordance with the requirements of 49 CFR §26.45.  The overall goal will be developed and will be published in a general circulation media, minority-focused media and trade association publications, to inform the public of the proposed goals.  The rationale will be made available for public inspection during normal business hours (7:45 a.m. to 4:30 p.m.) in the Office of Civil Rights for 30 days following the date of the notice.  The notice will state that comments will be accepted for 45 days after the notice date and will include the address to which comments may be sent.

 

17.   WHERE CAN A FIRM GET ADDITIONAL INFORMATION REGARDING THE DBE PROGRAM?

 

For general questions regarding the DBE program, contact:

 

            DBE Program Manager

            Telephone: (808) 587-2023

            Fax: (808) 587-2025

            TTY: (808) 587-2210

 

For assistance with the certification process contact:

            DBE Certifier

            Telephone: (808) 587-6333

 

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