DATE: June 16, 2003

SUBJECT: Department of Transportation (DOT); Participation by Disadvantaged Business Enterprises in Financial Assistance Programs

SOURCE: Federal Register, June 16, 2003, Vol. 68, No. 115 page 35542

AGENCIES: Office of the Secretary, DOT

ACTION: Final Rule

SYNOPSIS: DOT is revising its regulations for its Disadvantaged Business Enterprise (DBE) program concerning such subjects as uniform application and reporting forms; implementing a memorandum of understanding (MOU) with the Small Business Administration (SBA); and substantive amendments to provisions concerning retainage, size standard, proof of ethnicity, confidentiality, proof of economic disadvantage, DBE credit for trucking firms, and eligibility of firms owned by Alaska Native Corporations (ANCs).

EDITOR'S NOTE: DOT's DBE regulations are in Title 49 of the Code of Federal Regulations (CFR), Part 23, Participation by Disadvantaged Business Enterprise in Airport Concessions, and Part 26, Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs. This final rule addresses 49 CFR Part 26, which is available at http://www.access.gpo.gov/nara/cfr/waisidx_02/49cfr26_02.html.

For more on the interim final rule (IFR) that corrected and clarified misleading language in the DBE regulations, see the November 15, 2000, FEDERAL CONTRACTS DISPATCH "Department of Transportation; Threshold Requirements for Participation by Disadvantaged Business Enterprises in Transportation Financial Assistance Programs."

For more on the notice of proposed rulemaking (NPRM) that addressed additional changes to the DBE regulations and is the basis of this final rule, see the May 8, 2001, FEDERAL CONTRACTS DISPATCH "Department of Transportation (DOT); Disadvantaged Business Enterprise Program."

EFFECTIVE DATE: July 16, 2003.

FOR FURTHER INFORMATION CONTACT: Robert C. Ashby, Deputy Assistant General Counsel for Regulation and Enforcement, Department of Transportation, 400 7th Street, SW, Room 10424, Washington, DC 20590; 202-366-9310; fax: 202-366-9313; TDD: 202-755-7687 (TDD); or e-mail: bob.ashby@ost.dot.gov.

SUPPLEMENTAL INFORMATION: The DBE program was instituted in 1980, and it is intended to provide contracting opportunities for small disadvantaged concerns in DOT's highway, mass transit, and airport financial assistance programs.

On February 2, 1999, DOT amended the DBE regulations to reflect statutory and other changes that had taken place since 1980, particularly the June 1995 Supreme Court decision Adarand Constructors, Inc. v. Pena, in which the court determined that race-conscious affirmative action programs are subject to strict judicial scrutiny. In addition, the final rule removed all the regulations pertaining to the DBE program from 49 CFR Part 23 except for the rules pertaining to the separate DBE program for airport concessions and placed them in a new Part 26, Participation by Disadvantaged Business Enterprises in Department of Transportation Financial Assistance Programs.

On November 15, 2000, DOT published an IFR that made changes to the DBE regulations to decrease the administrative burdens on various recipients of DOT funds, and to correct and clarify misleading language in the February 2, 1999, rule.

In addition, on May 8, 2001, DOT published a NPRM to make further changes to the DBE regulations. The proposed changes pertained to (1) the adoption of one standard reporting form to reduce the administrative burdens for recipients who receive funds from more than one DOT administration, such as the Federal Aviation Administration, the Federal Highway Administration, and Federal Transit Administration; (2) reciprocal certifications that would require recipients of DBE program funds to recognize the SBA's 8(a) and SDB certifications in place of the recipient's own application; personal net worth; the payment of "retainage"; and several other issues.

This final rule addresses comments received in response to both the November 15, 2000, IFR and the May 8, 2001, NPRM. There were no substantive changes made to DOT's DBE regulations as a result of the November 15, 2000, IFR. However, DOT has made changes to its DBE regulations as a result of comments made on the May 8, 2001, NPRM. The substantive changes are:

DOT decided not to implement the following proposals in the NPRM when preparing this final rule:

In addition, this final rule makes the following additional change that was not addressed or proposed in either the IFR or the NPRM:

FOR FURTHER INFORMATION CONTACT: Panoptic Enterprises at 703-451-5953 or by e-mail to Panoptic@FedGovContracts.com.

Copyright 2003 by Panoptic Enterprises. All Rights Reserved.

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