Personal Net Worth Cap Increased for DBE Entities Working With USDOT
The DBE certification process aims to level the playing field for minority and women-owned businesses by providing a vehicle for increasing participation by these firms in state and local contracts. These recent changes will increase both the pool of eligible DBE owners as well as increase the opportunities for DBE firms in neighboring states. In
Part I: Personal Net Worth Limit Increased From $750,000 to $1.32 Million
(49 C.F.R. § 26.67)
To qualify as a “socially and economically disadvantaged individual” for DBE purposes, an individual owner must fall below the
USDOT also provides the following guidance for recipients and firms applying (or who may have recently applied) for DBE certification:
- For applications or decertification actions pending on
January 28, 2011(the date the amendment was published), but before February 28, 2011(the amendment’s effective date), reviewing agencies should make decisions based on the new $1.32 million standard, though these decisions should not take effect until February 28, 2011.
February 28, 2011, all new certification decisions must be based on the $1.32 million standard, even if the application was filed or a decertification action pertaining to PNWbegan before this date.
- For companies whose application was denied before
January 28, 2011, because the owner’s PNWwas above $750,000 but below $1.32 million and the matter is now being appealed, the reviewing agency should resolve the appeal using the $1.32 million standard.
- If a firm was decertified or its application denied within a year before
February 28, 2011, because the owner’s PNWwas above $750,000 but below $1.32 million, the reviewing agency should permit the firm to resubmit PNWinformation without any further waiting period, and the firm should be recertified if the owner’s PNWis less than $1.32 million and the firm is otherwise eligible.
This represents a much needed change for women and minority-owned businesses in our area. Individual owners that have a personal net worth of over $750,000.00 but under $1.32 million may now be able to apply (or re-apply if decertified as a result of exceeding the
Ahlers & Cressman PLLC’s lawyers have been assisting numerous small women and minority-owned firms with OMWBE certification issues and questions over the last twenty-five years. We are conversant with the regulations and available to address any questions these new revisions may raise.
A copy of the entire rule is available here: http://edocket.access.gpo.gov/2011/pdf/2011-1531.pdf
I am trying to understand how a DBE firm continues a certification when they revenue $10M of service or more in a year. Is the Company's Net Worth not considered in the renewal process? Does it matter if the company is an LLC or Incoporated? What if a DBE owner have multiple businesses and the Net Worth in other businesses exceeds $1.4M? Is the Net Worth in other businesses added to his PNW?