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DBE Final Rule
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Subpart C--Goals, Good Faith Efforts, and Counting
(a) The statutes authorizing this program provide that, except to
the extent the Secretary determines otherwise, not less than 10 percent
of the authorized funds are to be expended with DBEs.
(b) This 10 percent goal is an aspirational goal at the national
level, which the Department uses as a tool in evaluating and monitoring
DBEs' opportunities to participate in DOT-assisted contracts.
(c) The national 10 percent goal does not authorize or require
recipients to set overall or contract goals at the 10 percent level, or
any other particular level, or to take any special administrative steps
if their goals are above or below 10 percent.
(a) You are not permitted to use quotas for DBEs on DOT-assisted
contracts subject to this part.
(b) You may not set-aside contracts for DBEs on DOT-assisted
contracts subject to this part, except that, in limited and extreme
circumstances, you may use set-asides when no other method could be
reasonably expected to redress egregious instances of discrimination.
(a) You must set an overall goal for DBE participation in your DOT-
assisted contracts.
(b) Your overall goal must be based on demonstrable evidence of the
availability of ready, willing and able DBEs relative to all businesses
ready, willing and able to participate on your DOT-assisted contracts
(hereafter, the ``relative availability of DBEs''). The goal must
reflect your determination of the level of DBE participation you would
expect absent the effects of discrimination. You cannot simply rely on
either the 10 percent national goal, your previous overall goal or past
DBE participation rates in your program without reference to the
relative availability of DBEs in your market.
(c) Step 1. You must begin your goal setting process by determining
a base figure for the relative availability of DBEs. The following are
examples of approaches that you may take toward determining a base
figure. These examples are provided as a starting point for your goal
setting process. Any percentage figure derived from one of these
examples should be considered a basis from which you begin when
examining all evidence available in your jurisdiction. These examples
are not intended as an exhaustive list. Other methods or combinations
of methods to determine a base figure may be used, subject to approval
by the concerned operating administration.
(1) Use DBE Directories and Census Bureau Data. Determine the
number of ready, willing and able DBEs in your market from your DBE
directory. Using the Census Bureau's County Business Pattern (CBP) data
base, determine the number of all ready, willing and able businesses
available in your market that perform work in the same SIC codes.
(Information about the CBP data base may be obtained from the Census
Bureau at their web site, www.census.gov/epcd/cbp/view/cbpview.html.)
Divide the number of DBEs by the number of all businesses to derive a
base figure for the relative availability of DBEs in your market.
(2) Use a bidders list. Determine the number of DBEs that have bid
or quoted on your DOT-assisted prime contracts or subcontracts in the
previous year. Determine the number of all businesses that have bid or
quoted on prime or subcontracts in the same time period. Divide the
number of DBE bidders and quoters by the number for all businesses to
derive a base figure for the relative availability of DBEs in your
market.
(3) Use data from a disparity study. Use a percentage figure
derived from data in a valid, applicable disparity study.
(4) Use the goal of another DOT recipient. If another DOT recipient
in the same, or substantially similar, market has set an overall goal
in compliance with this rule, you may use that goal as a base figure
for your goal.
(5) Alternative methods. Subject to the approval of the DOT
operating administration, you may use other methods to determine a base
figure for your overall goal. Any methodology you choose must be based
on demonstrable evidence of local market conditions and be designed to
ultimately attain a goal that is rationally related to the relative
availability of DBEs in your market.
(d) Step 2. Once you have calculated a base figure, you must
examine all of the evidence available in your jurisdiction to determine
what adjustment, if any, is needed to the base figure in order to
arrive at your overall goal.
(1) There are many types of evidence that must be considered when
adjusting the base figure. These include:
(i) The current capacity of DBEs to perform work in your DOT-
assisted contracting program, as measured by the volume of work DBEs
have performed in recent years;
(ii) Evidence from disparity studies conducted anywhere within your
jurisdiction, to the extent it is not already accounted for in your
base figure; and
(iii) If your base figure is the goal of another recipient, you
must adjust it for differences in your local market and your
contracting program.
(2) You may also consider available evidence from related fields
that affect the opportunities for DBEs to form, grow and compete. These
include, but are not limited to:
(i) Statistical disparities in the ability of DBEs to get the
financing, bonding and insurance required to participate in your
program;
(ii) Data on employment, self-employment, education, training and
union apprenticeship programs, to the extent you can relate it to the
opportunities for DBEs to perform in your program.
(3) If you attempt to make an adjustment to your base figure to
account for the continuing effects of past discrimination (often called
the ``but for'' factor) or the effects of an ongoing DBE program, the
adjustment must be based on demonstrable evidence that is logically and
directly related to the effect for which the adjustment is sought.
(e) Once you have determined a percentage figure in accordance with
paragraphs (c) and (d) of this section, you should express your overall
goal as follows:
(1) If you are an FHWA recipient, as a percentage of all Federal-
aid highway funds you will expend in FHWA-assisted contracts in the
forthcoming fiscal year;
(2) If you are an FTA or FAA recipient, as a percentage of all FTA
or FAA funds (exclusive of FTA funds to be used for the purchase of
transit vehicles) that you will expend in FTA or FAA-assisted contracts
in the forthcoming fiscal year. In appropriate cases, the FTA or FAA
Administrator may permit you to express your overall goal as a
percentage of funds for a particular grant or project or group of
grants and/or projects.
(f)(1) If you set overall goals on a fiscal year basis, you must
submit them to the applicable DOT operating administration for review
on August 1 of each year, unless the Administrator of the concerned
operating administration establishes a different submission date.
(2) If you are an FTA or FAA recipient and set your overall goal on
a project or grant basis, you must submit the goal for review at a time
determined by the FTA or FAA Administrator.
(3) You must include with your overall goal submission a
description of the methodology you used to establish the goal,
including your base figure and the evidence with which it was
calculated, and the adjustments you made to the base figure and the
evidence relied on for the adjustments. You should also include a
summary listing of the relevant available evidence in your jurisdiction
and, where applicable, an explanation of why you did not use that
evidence to adjust your base figure. You must also include your
projection of the portions of the overall goal you expect to meet
through race-neutral and race-conscious measures, respectively (see
Sec. 26.51(c)).
(4) You are not required to obtain prior operating administration
concurrence with the your overall goal. However, if the operating
administration's review suggests that your overall goal has not been
correctly calculated, or that your method for calculating goals is
inadequate, the operating administration may, after consulting with
you, adjust your overall goal or require that you do so. The adjusted
overall goal is binding on you.
(5) If you need additional time to collect data or take other steps
to develop an approach to setting overall goals, you may request the
approval of the concerned operating administration for an interim goal
and/or goal-setting mechanism. Such a mechanism must:
(i) Reflect the relative availability of DBEs in your local market
to the maximum extent feasible given the data available to you; and
(ii) Avoid imposing undue burdens on non-DBEs.
(g) In establishing an overall goal, you must provide for public
participation. This public participation must include:
(1) Consultation with minority, women's and general contractor
groups, community organizations, and other officials or organizations
which could be expected to have information concerning the availability
of disadvantaged and non-disadvantaged businesses, the effects of
discrimination on opportunities for DBEs, and your efforts to establish
a level playing field for the participation of DBEs.
(2) A published notice announcing your proposed overall goal,
informing the public that the proposed goal and its rationale are
available for inspection during normal business hours at your principal
office for 30 days following the date of the notice, and informing the
public that you and the Department will accept comments on the goals
for 45 days from the date of the notice. The notice must include
addresses to which comments may be sent, and you must publish it in
general circulation media and available minority-focused media and
trade association publications.
(h) Your overall goals must provide for participation by all
certified DBEs and must not be subdivided into group-specific goals.
(a) You cannot be penalized, or treated by the Department as being
in noncompliance with this rule, because your DBE participation falls
short of your overall goal, unless you have failed to administer your
program in good faith.
(b) If you do not have an approved DBE program or overall goal, or
if you fail to implement your program in good faith, you are in
noncompliance with this part.
(a) If you are an FTA recipient, you must require in your DBE
program that each transit vehicle manufacturer, as a condition of being
authorized to bid or propose on FTA-assisted transit vehicle
procurements, certify that it has complied with the requirements of
this section. You do not include FTA assistance used in transit vehicle
procurements in the base amount from which your overall goal is
calculated.
(b) If you are a transit vehicle manufacturer, you must establish
and submit for FTA's approval an annual overall percentage goal. In
setting your overall goal, you should be guided, to the extent
applicable, by the principles underlying Sec. 26.45. The base from
which you calculate this goal is the amount of FTA financial assistance
included in transit vehicle contracts you will perform during the
fiscal year in question. You must exclude from this base funds
attributable to work performed outside the United States and its
territories, possessions, and commonwealths. The requirements and
procedures of this part with respect to submission and approval of
overall goals apply to you as they do to recipients.
(c) As a transit vehicle manufacturer, you may make the
certification required by this section if you have submitted the goal
this section requires and FTA has approved it or not disapproved it.
(d) As a recipient, you may, with FTA approval, establish project-
specific goals for DBE participation in the procurement of transit
vehicles in lieu of complying through the procedures of this section.
(e) If you are an FHWA or FAA recipient, you may, with FHWA or FAA
approval, use the procedures of this section with respect to
procurements of vehicles or specialized equipment. If you choose to do
so, then the manufacturers of this equipment must meet the same
requirements (including goal approval by FHWA or FAA) as transit
vehicle manufacturers must meet in FTA-assisted procurements.
(a) You must meet the maximum feasible portion of your overall goal
by using race-neutral means of facilitating DBE participation. Race-
neutral DBE participation includes any time a DBE wins a prime contract
through customary competitive procurement procedures, is awarded a
subcontract on a prime contract that does not carry a DBE goal, or even
if there is a DBE goal, wins a subcontract from a prime contractor that
did not consider its DBE status in making the award (e.g., a prime
contractor that uses a strict low bid system to award subcontracts).
(b) Race-neutral means include, but are not limited to, the
following:
(1) Arranging solicitations, times for the presentation of bids,
quantities, specifications, and delivery schedules in ways that
facilitate DBE, and other small businesses, participation (e.g.,
unbundling large contracts to make them more accessible to small
businesses, requiring or encouraging prime contractors to subcontract
portions of work that they might otherwise perform with their own
forces);
(2) Providing assistance in overcoming limitations such as
inability to obtain bonding or financing (e.g., by such means as
simplifying the bonding process, reducing bonding requirements,
eliminating the impact of surety costs from bids, and providing
services to help DBEs, and other small businesses, obtain bonding and
financing);
(3) Providing technical assistance and other services;
(4) Carrying out information and communications programs on
contracting procedures and specific contract opportunities (e.g., ensuring the inclusion of DBEs, and other
small businesses, on recipient mailing lists for bidders; ensuring the
dissemination to bidders on prime contracts of lists of potential
subcontractors; provision of information in languages other than
English, where appropriate);
(5) Implementing a supportive services program to develop and
improve immediate and long-term business management, record keeping,
and financial and accounting capability for DBEs and other small
businesses;
(6) Providing services to help DBEs, and other small businesses,
improve long-term development, increase opportunities to participate in
a variety of kinds of work, handle increasingly significant projects,
and achieve eventual self-sufficiency;
(7) Establishing a program to assist new, start-up firms,
particularly in fields in which DBE participation has historically been
low;
(8) Ensuring distribution of your DBE directory, through print and
electronic means, to the widest feasible universe of potential prime
contractors; and
(9) Assisting DBEs, and other small businesses, to develop their
capability to utilize emerging technology and conduct business through
electronic media.
(c) Each time you submit your overall goal for review by the
concerned operating administration, you must also submit your
projection of the portion of the goal that you expect to meet through
race-neutral means and your basis for that projection. This projection
is subject to approval by the concerned operating administration, in
conjunction with its review of your overall goal.
(d) You must establish contract goals to meet any portion of your
overall goal you do not project being able to meet using race-neutral
means.
(e) The following provisions apply to the use of contract goals:
(1) You may use contract goals only on those DOT-assisted contracts
that have subcontracting possibilities.
(2) You are not required to set a contract goal on every DOT-
assisted contract. You are not required to set each contract goal at
the same percentage level as the overall goal. The goal for a specific
contract may be higher or lower than that percentage level of the
overall goal, depending on such factors as the type of work involved,
the location of the work, and the availability of DBEs for the work of
the particular contract. However, over the period covered by your
overall goal, you must set contract goals so that they will
cumulatively result in meeting any portion of your overall goal you do
not project being able to meet through the use of race-neutral means.
(3) Operating administration approval of each contract goal is not
necessarily required. However, operating administrations may review and
approve or disapprove any contract goal you establish.
(4) Your contract goals must provide for participation by all
certified DBEs and must not be subdivided into group-specific goals.
(f) To ensure that your DBE program continues to be narrowly
tailored to overcome the effects of discrimination, you must adjust
your use of contract goals as follows:
(1) If your approved projection under paragraph (c) of this section
estimates that you can meet your entire overall goal for a given year
through race-neutral means, you must implement your program without
setting contract goals during that year.
Example to Paragraph (f)(1): Your overall goal for Year I is 12
percent. You estimate that you can obtain 12 percent or more DBE
participation through the use of race-neutral measures, without any
use of contract goals. In this case, you do not set any contract
goals for the contracts that will be performed in Year I.
(2) If, during the course of any year in which you are using
contract goals, you determine that you will exceed your overall goal,
you must reduce or eliminate the use of contract goals to the extent
necessary to ensure that the use of contract goals does not result in
exceeding the overall goal. If you determine that you will fall short
of your overall goal, then you must make appropriate modifications in
your use of race-neutral and/or race-conscious measures to allow you to
meet the overall goal.
Example to Paragraph (f)(2): In Year II, your overall goal is 12
percent. You have estimated that you can obtain 5 percent DBE
participation through use of race-neutral measures. You therefore
plan to obtain the remaining 7 percent participation through use of
DBE goals. By September, you have already obtained 11 percent DBE
participation for the year. For contracts let during the remainder
of the year, you use contract goals only to the extent necessary to
obtain an additional one percent DBE participation. However, if you
determine in September that your participation for the year is
likely to be only 8 percent total, then you would increase your use
of race-neutral and/or race-conscious means during the remainder of
the year in order to achieve your overall goal.
(3) If the DBE participation you have obtained by race-neutral
means alone meets or exceeds your overall goals for two consecutive
years, you are not required to make a projection of the amount of your
goal you can meet using such means in the next year. You do not set
contract goals on any contracts in the next year. You continue using
only race-neutral means to meet your overall goals unless and until you
do not meet your overall goal for a year.
Example to Paragraph (f)(3): Your overall goal for Years I and
Year II is 10 percent. The DBE participation you obtain through
race-neutral measures alone is 10 percent or more in each year. (For
this purpose, it does not matter whether you obtained additional DBE
participation through using contract goals in these years.) In Year
III and following years, you do not need to make a projection under
paragraph (c) of this section of the portion of your overall goal
you expect to meet using race-neutral means. You simply use race-
neutral means to achieve your overall goals. However, if in Year VI
your DBE participation falls short of your overall goal, then you
must make a paragraph (c) projection for Year VII and, if necessary,
resume use of contract goals in that year.
(4) If you obtain DBE participation that exceeds your overall goal
in two consecutive years through the use of contract goals (i.e., not
through the use of race-neutral means alone), you must reduce your use
of contract goals proportionately in the following year.
Example to Paragraph (f)(4): In Years I and II, your overall
goal is 12 percent, and you obtain 14 and 16 percent DBE
participation, respectively. You have exceeded your goals over the
two-year period by an average of 25 percent. In Year III, your
overall goal is again 12 percent, and your paragraph (c) projection
estimates that you will obtain 4 percent DBE participation through
race-neutral means and 8 percent through contract goals. You then
reduce the contract goal projection by 25 percent (i.e., from 8 to 6
percent) and set contract goals accordingly during the year. If in
Year III you obtain 11 percent participation, you do not use this
contract goal adjustment mechanism for Year IV, because there have
not been two consecutive years of exceeding overall goals.
(g) In any year in which you project meeting part of your goal
through race-neutral means and the remainder through contract goals,
you must maintain data separately on DBE achievements in those
contracts with and without contract goals, respectively. You must
report this data to the concerned operating administration as provided
in Sec. 26.11.
(a) When you have established a DBE contract goal, you must award
the contract only to a bidder/offeror who makes good faith efforts to
meet it. You must determine that a bidder/offeror has made good faith
efforts if the bidder/offeror does either of the following things:
(1) Documents that it has obtained enough DBE participation to meet
the goal; or
(2) Documents that it made adequate good faith efforts to meet the
goal, even though it did not succeed in obtaining enough DBE
participation to do so. If the bidder/offeror does document adequate
good faith efforts, you must not deny award of the contract on the
basis that the bidder/offeror failed to meet the goal. See Appendix A
of this part for guidance in determining the adequacy of a bidder/
offeror's good faith efforts.
(b) In your solicitations for DOT-assisted contracts for which a
contract goal has been established, you must require the following:
(1) Award of the contract will be conditioned on meeting the
requirements of this section;
(2) All bidders/offerors will be required to submit the following
information to the recipient, at the time provided in paragraph (b)(3)
of this section:
(i) The names and addresses of DBE firms that will participate in
the contract;
(ii) A description of the work that each DBE will perform;
(iii) The dollar amount of the participation of each DBE firm
participating;
(iv) Written documentation of the bidder/offeror's commitment to
use a DBE subcontractor whose participation it submits to meet a
contract goal;
(v) Written confirmation from the DBE that it is participating in
the contract as provided in the prime contractor's commitment; and
(vi) If the contract goal is not met, evidence of good faith
efforts (see Appendix A of this part); and
(3) At your discretion, the bidder/offeror must present the
information required by paragraph (b)(2) of this section--
(i) Under sealed bid procedures, as a matter of responsiveness, or
with initial proposals, under contract negotiation procedures; or
(ii) At any time before you commit yourself to the performance of
the contract by the bidder/offeror, as a matter of responsibility.
(c) You must make sure all information is complete and accurate and
adequately documents the bidder/offeror's good faith efforts before
committing yourself to the performance of the contract by the bidder/
offeror.
(d) If you determine that the apparent successful bidder/offeror
has failed to meet the requirements of paragraph (a) of this section,
you must, before awarding the contract, provide the bidder/offeror an
opportunity for administrative reconsideration.
(1) As part of this reconsideration, the bidder/offeror must have
the opportunity to provide written documentation or argument concerning
the issue of whether it met the goal or made adequate good faith
efforts to do so.
(2) Your decision on reconsideration must be made by an official
who did not take part in the original determination that the bidder/
offeror failed to meet the goal or make adequate good faith efforts to
do so.
(3) The bidder/offeror must have the opportunity to meet in person
with your reconsideration official to discuss the issue of whether it
met the goal or made adequate good faith efforts to do so.
(4) You must send the bidder/offeror a written decision on
reconsideration, explaining the basis for finding that the bidder did
or did not meet the goal or make adequate good faith efforts to do so.
(5) The result of the reconsideration process is not
administratively appealable to the Department of Transportation.
(e) In a ``design-build'' or ``turnkey'' contracting situation, in
which the recipient lets a master contract to a contractor, who in turn
lets subsequent subcontracts for the work of the project, a recipient
may establish a goal for the project. The master contractor then
establishes contract goals, as appropriate, for the subcontracts it
lets. Recipients must maintain oversight of the master contractor's
activities to ensure that they are conducted consistent with the
requirements of this part.
(f)(1) You must require that a prime contractor not terminate for
convenience a DBE subcontractor listed in response to paragraph (b)(2)
of this section (or an approved substitute DBE firm) and then perform
the work of the terminated subcontract with its own forces or those of
an affiliate, without your prior written consent.
(2) When a DBE subcontractor is terminated, or fails to complete
its work on the contract for any reason, you must require the prime
contractor to make good faith efforts to find another DBE subcontractor
to substitute for the original DBE. These good faith efforts shall be
directed at finding another DBE to perform at least the same amount of
work under the contract as the DBE that was terminated, to the extent
needed to meet the contract goal you established for the procurement.
(3) You must include in each prime contract a provision for
appropriate administrative remedies that you will invoke if the prime
contractor fails to comply with the requirements of this section.
(g) You must apply the requirements of this section to DBE bidders/
offerors for prime contracts. In determining whether a DBE bidder/
offeror for a prime contract has met a contract goal, you count the
work the DBE has committed to performing with its own forces as well as
the work that it has committed to be performed by DBE subcontractors
and DBE suppliers.
(a) When a DBE participates in a contract, you count only the value
of the work actually performed by the DBE toward DBE goals.
(1) Count the entire amount of that portion of a construction
contract (or other contract not covered by paragraph (a)(2) of this
section) that is performed by the DBE's own forces. Include the cost of
supplies and materials obtained by the DBE for the work of the
contract, including supplies purchased or equipment leased by the DBE
(except supplies and equipment the DBE subcontractor purchases or
leases from the prime contractor or its affiliate).
(2) Count the entire amount of fees or commissions charged by a DBE
firm for providing a bona fide service, such as professional,
technical, consultant, or managerial services, or for providing bonds
or insurance specifically required for the performance of a DOT-
assisted contract, toward DBE goals, provided you determine the fee to
be reasonable and not excessive as compared with fees customarily
allowed for similar services.
(3) When a DBE subcontracts part of the work of its contract to
another firm, the value of the subcontracted work may be counted toward
DBE goals only if the DBE's subcontractor is itself a DBE. Work that a
DBE subcontracts to a non-DBE firm does not count toward DBE goals.
(b) When a DBE performs as a participant in a joint venture, count
a portion of the total dollar value of the contract equal to the
distinct, clearly defined portion of the work of the contract that the
DBE performs with its own forces toward DBE goals.
(c) Count expenditures to a DBE contractor toward DBE goals only if
the DBE is performing a commercially useful function on that contract.
(1) A DBE performs a commercially useful function when it is
responsible for execution of the work of the contract and is carrying
out its responsibilities by actually performing, managing, and supervising the work involved. To
perform a commercially useful function, the DBE must also be
responsible, with respect to materials and supplies used on the
contract, for negotiating price, determining quality and quantity,
ordering the material, and installing (where applicable) and paying for
the material itself. To determine whether a DBE is performing a
commercially useful function, you must evaluate the amount of work
subcontracted, industry practices, whether the amount the firm is to be
paid under the contract is commensurate with the work it is actually
performing and the DBE credit claimed for its performance of the work,
and other relevant factors.
(2) A DBE does not perform a commercially useful function if its
role is limited to that of an extra participant in a transaction,
contract, or project through which funds are passed in order to obtain
the appearance of DBE participation. In determining whether a DBE is
such an extra participant, you must examine similar transactions,
particularly those in which DBEs do not participate.
(3) If a DBE does not perform or exercise responsibility for at
least 30 percent of the total cost of its contract with its own work
force, or the DBE subcontracts a greater portion of the work of a
contract than would be expected on the basis of normal industry
practice for the type of work involved, you must presume that it is not
performing a commercially useful function.
(4) When a DBE is presumed not to be performing a commercially
useful function as provided in paragraph (c)(3) of this section, the
DBE may present evidence to rebut this presumption. You may determine
that the firm is performing a commercially useful function given the
type of work involved and normal industry practices.
(5) Your decisions on commercially useful function matters are
subject to review by the concerned operating administration, but are
not administratively appealable to DOT.
(d) Use the following factors in determining whether a DBE trucking
company is performing a commercially useful function:
(1) The DBE must be responsible for the management and supervision
of the entire trucking operation for which it is responsible on a
particular contract, and there cannot be a contrived arrangement for
the purpose of meeting DBE goals.
(2) The DBE must itself own and operate at least one fully
licensed, insured, and operational truck used on the contract.
(3) The DBE receives credit for the total value of the
transportation services it provides on the contract using trucks it
owns, insures, and operates using drivers it employs.
(4) The DBE may lease trucks from another DBE firm, including an
owner-operator who is certified as a DBE. The DBE who leases trucks
from another DBE receives credit for the total value of the
transportation services the lessee DBE provides on the contract.
(5) The DBE may also lease trucks from a non-DBE firm, including an
owner-operator. The DBE who leases trucks from a non-DBE is entitled to
credit only for the fee or commission it receives as a result of the
lease arrangement. The DBE does not receive credit for the total value
of the transportation services provided by the lessee, since these
services are not provided by a DBE.
(6) For purposes of this paragraph (d), a lease must indicate that
the DBE has exclusive use of and control over the truck. This does not
preclude the leased truck from working for others during the term of
the lease with the consent of the DBE, so long as the lease gives the
DBE absolute priority for use of the leased truck. Leased trucks must
display the name and identification number of the DBE.
(e) Count expenditures with DBEs for materials or supplies toward
DBE goals as provided in the following:
(1)(i) If the materials or supplies are obtained from a DBE
manufacturer, count 100 percent of the cost of the materials or
supplies toward DBE goals.
(ii) For purposes of this paragraph (e)(1), a manufacturer is a
firm that operates or maintains a factory or establishment that
produces, on the premises, the materials, supplies, articles, or
equipment required under the contract and of the general character
described by the specifications.
(2)(i) If the materials or supplies are purchased from a DBE
regular dealer, count 60 percent of the cost of the materials or
supplies toward DBE goals.
(ii) For purposes of this section, a regular dealer is a firm that
owns, operates, or maintains a store, warehouse, or other establishment
in which the materials, supplies, articles or equipment of the general
character described by the specifications and required under the
contract are bought, kept in stock, and regularly sold or leased to the
public in the usual course of business.
(A) To be a regular dealer, the firm must be an established,
regular business that engages, as its principal business and under its
own name, in the purchase and sale or lease of the products in
question.
(B) A person may be a regular dealer in such bulk items as
petroleum products, steel, cement, gravel, stone, or asphalt without
owning, operating, or maintaining a place of business as provided in
this paragraph (e)(2)(ii) if the person both owns and operates
distribution equipment for the products. Any supplementing of regular
dealers' own distribution equipment shall be by a long-term lease
agreement and not on an ad hoc or contract-by-contract basis.
(C) Packagers, brokers, manufacturers' representatives, or other
persons who arrange or expedite transactions are not regular dealers
within the meaning of this paragraph (e)(2).
(3) With respect to materials or supplies purchased from a DBE
which is neither a manufacturer nor a regular dealer, count the entire
amount of fees or commissions charged for assistance in the procurement
of the materials and supplies, or fees or transportation charges for
the delivery of materials or supplies required on a job site, toward
DBE goals, provided you determine the fees to be reasonable and not
excessive as compared with fees customarily allowed for similar
services. Do not count any portion of the cost of the materials and
supplies themselves toward DBE goals, however.
(f) If a firm is not currently certified as a DBE in accordance
with the standards of subpart D of this part at the time of the
execution of the contract, do not count the firm's participation toward
any DBE goals, except as provided for in Sec. 26.87(i)).
(g) Do not count the dollar value of work performed under a
contract with a firm after it has ceased to be certified toward your
overall goal.
(h) Do not count the participation of a DBE subcontractor toward
the prime contractor's DBE achievements or your overall goal until the
amount being counted toward the goal has been paid to the DBE.
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US DOT DBE Contacts
