AASHTO Responds to USDOT’s Proposed DBE Changes

The American Association of State Highway and Transportation Officials recently provided feedback to the U.S. Department of Transportation concerning the agency’s proposal to modernize disadvantaged business enterprise (DBE) and airport concession disadvantaged business enterprise (ACDBE) programs.

[Above image by AASHTO]

In a letter to USDOT, AASHTO expressed its broad support for the agency’s effort to modernize those two programs and offered several suggestions to make them more effective.

Photo by USDOT

First, AASHTO recommended that USDOT update the name of the overall program to the “Diverse Business Enterprise Program” to describe its focus with more accuracy. The organization also noted that USDOT’s proposed rule would limit the DBE program certification to business concerns engaged in “transportation-related” industries, thus requiring a better definition of “transportation-related” to ensure that this term does not exclude firms that could benefit the transportation sector.

Of more concern, AASHTO said USDOT’s proposed overhaul increases the amount of DBE/ACDBE information and data state departments of transportation must provide for reporting purposes, while increasing the frequency of that reporting as well.

“Although some additional information would assist in planning and analyzing the impact of the DBE program on small businesses, the proposed changes would require additional state DOT staffing, programming changes, software/systems updates, and increased storage,” AASHTO said in its letter. “As such, USDOT should streamline the proposed data reporting requirements and eliminate duplication of effort. We strongly support the proposal related to electronic report submission, as this will streamline reporting.”

In addition, USDOT should consider developing a more “consistent way” to apply the North American Industry Classification System or NAICS codes to the certification program for all Unified Certification Programs or UCPs.

AASHTO strongly favors USDOT’s proposal to ensure DBE/ACDBE recipients have affirmative monitoring methods for prompt payment and return of retainage requirements.

“Many state DOT DBE programs require primes to report payments to subcontractors and subcontractors to confirm receipt of payment on a monthly basis,” AASHTO said in its letter. “The proposed rule would allow for transparency between a prime, its subcontractors, and the state DOT, as well as provide ongoing proactive monitoring of payments to all subcontractors. The proposed rule would also provide for easier tracking of payment data on a month-to-month basis and assist states in monitoring trends of non-compliance and/or non-payment.”

However, AASHTO does not support USDOT’s proposal to reduce the time extension state DOTs have to make a certification decision from 60 to 30 days. “Due to state DOT staffing shortages, this would place an undue burden on certifiers to meet the shorter deadline,” the organization said.

Yet AASHTO does agree with USDOT’s proposal to streamline the interstate certification process for DBEs, including allowing reciprocity between UCPs. “These changes will reduce processing time, increase the pool of eligible DBE owners, and increase the opportunities for DBE firms in neighboring states,” the group said. “In addition, to facilitate the sharing of information between state DOTs that use different software, USDOT should develop a secure platform for applications and tax returns.”

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