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DBE Final Rule
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Subpart D--Certification Standards
(a) In determining whether to certify a firm as eligible to
participate as a DBE, you must apply the standards of this subpart.
(b) The firm seeking certification has the burden of demonstrating
to you, by a preponderance of the evidence, that it meets the
requirements of this subpart concerning group membership or individual
disadvantage, business size, ownership, and control.
(c) You must rebuttably presume that members of the designated
groups identified in Sec. 26.67(a) are socially and economically
disadvantaged. This means that they do not have the burden of proving
to you that they are socially and economically disadvantaged. However,
applicants have the obligation to provide you information concerning
their economic disadvantage (see Sec. 26.67).
(d) Individuals who are not presumed to be socially and
economically disadvantaged, and individuals concerning whom the
presumption of disadvantage has been rebutted, have the burden of
proving to you, by a preponderance of the evidence, that they are
socially and economically disadvantaged. (See Appendix E of this part.)
(e) You must make determinations concerning whether individuals and
firms have met their burden of demonstrating group membership,
ownership, control, and social and economic disadvantage (where
disadvantage must be demonstrated on an individual basis) by
considering all the facts in the record, viewed as a whole.
(a) If you have reason to question whether an individual is a
member of a group that is presumed to be socially and economically
disadvantaged, you must require the individual to demonstrate, by a
preponderance of the evidence, that he or she is a member of the group.
(b) In making such a determination, you must consider whether the
person has held himself out to be a member of the group over a long
period of time prior to application for certification and whether the
person is regarded as a member of the group by the relevant community.
You may require the applicant to produce appropriate documentation of
group membership.
(1) If you determine that an individual claiming to be a member of
a group presumed to be disadvantaged is not a member of a designated
disadvantaged group, the individual must demonstrate social and
economic disadvantage on an individual basis.
(2) Your decisions concerning membership in a designated group are
subject to the certification appeals procedure of Sec. 26.89.
(a) To be an eligible DBE, a firm (including its affiliates) must
be an existing small business, as defined by Small Business
Administration (SBA) standards. You must apply current SBA business
size standard(s) found in 13 CFR part 121 appropriate to the type(s) of
work the firm seeks to perform in DOT-assisted contracts.
(b) Even if it meets the requirements of paragraph (a) of this
section, a firm is not an eligible DBE in any Federal fiscal year if
the firm (including its affiliates) has had average annual gross
receipts, as defined by SBA regulations (see 13 CFR 121.402), over the
firm's previous three fiscal years, in excess of $16.6 million. The
Secretary adjusts this amount for inflation from time to time.
(a) Presumption of disadvantage. (1) You must rebuttably presume
that citizens of the United States (or lawfully admitted permanent
residents) who are women, Black Americans, Hispanic Americans, Native
Americans, Asian-Pacific Americans, Subcontinent Asian Americans, or
other minorities found to be disadvantaged by the SBA, are socially and
economically disadvantaged individuals. You must require applicants to
submit a signed, notarized certification that each presumptively
disadvantaged owner is, in fact, socially and economically
disadvantaged.
(2)(i) You must require each individual owner of a firm applying to
participate as a DBE whose ownership and control are relied upon for
DBE certification to submit a signed, notarized statement of personal
net worth, with appropriate supporting documentation.
(ii) In determining net worth, you must exclude an individual's
ownership interest in the applicant firm and the individual's equity in
his or her primary residence (except any portion of such equity that is
attributable to excessive withdrawals from the applicant firm). A
contingent liability does not reduce an individual's net worth. The
personal net worth of an individual claiming to be an Alaska Native
will include assets and income from sources other than an Alaska Native
Corporation and exclude any of the following which the individual
receives from any Alaska Native Corporation: cash (including cash
dividends on stock received from an ANC) to the extent that it does
not, in the aggregate, exceed $2,000 per individual per annum; stock
(including stock issued or distributed by an ANC as a dividend or
distribution on stock); a partnership interest; land or an interest in
land (including land or an interest in land received from an ANC as a
dividend or distribution on stock); and an interest in a settlement
trust.
(b) Rebuttal of presumption of disadvantage. (1) If the statement
of personal net worth that an individual submits under paragraph (a)(2)
of this section shows that the individual's personal net worth exceeds
$750,000, the individual's presumption of economic disadvantage is
rebutted. You are not required to have a proceeding under paragraph
(b)(2) of this section in order to rebut the presumption of economic
disadvantage in this case.
(2) If you have a reasonable basis to believe that an individual
who is a member of one of the designated groups is not, in fact,
socially and/or economically disadvantaged you may, at any time, start
a proceeding to determine whether the presumption should be regarded as
rebutted with respect to that individual. Your proceeding must follow
the procedures of Sec. 26.87.
(3) In such a proceeding, you have the burden of demonstrating, by
a preponderance of the evidence, that the individual is not socially
and economically disadvantaged. You may require the individual to
produce information relevant to the determination of his or her
disadvantage.
(4) When an individual's presumption of social and/or economic
disadvantage has been rebutted, his or her ownership and control of the
firm in question cannot be used for purposes of DBE eligibility under
this subpart unless and until he or she makes an individual showing of
social and/or economic disadvantage. If the basis for rebutting the
presumption is a determination that the individual's personal net worth
exceeds $750,000, the individual is no longer eligible for
participation in the program and cannot regain eligibility by making an
individual showing of disadvantage.
(c) 8(a) and SDB Firms. If a firm applying for certification has a
current, valid certification from or recognized by the SBA under the
8(a) or small and disadvantaged business (SDB) program (except an SDB
certification based on the firm's self-certification as an SDB), you
may accept the firm's 8(a) or SDB certification in lieu of conducting
your own certification proceeding, just as you may accept the
certification of another DOT recipient for this purpose. You are not
required to do so, however.
(d) Individual determinations of social and economic disadvantage.
Firms owned and controlled by individuals who are not presumed to be
socially and economically disadvantaged (including individuals whose
presumed disadvantage has been rebutted) may apply for DBE
certification. You must make a case-by-case determination of whether
each individual whose ownership and control are relied upon for DBE
certification is socially and economically disadvantaged. In such a
proceeding, the applicant firm has the burden of demonstrating to you,
by a preponderance of the evidence, that the individuals who own and
control it are socially and economically disadvantaged. An individual
whose personal net worth exceeds $750,000 shall not be deemed to be
economically disadvantaged. In making these determinations, use the
guidance found in Appendix E of this part. You must require that
applicants provide sufficient information to permit determinations
under the guidance of Appendix E of this part.
(a) In determining whether the socially and economically
disadvantaged participants in a firm own the firm, you must consider
all the facts in the record, viewed as a whole.
(b) To be an eligible DBE, a firm must be at least 51 percent owned
by socially and economically disadvantaged individuals.
(1) In the case of a corporation, such individuals must own at
least 51 percent of the each class of voting stock outstanding and 51
percent of the aggregate of all stock outstanding.
(2) In the case of a partnership, 51 percent of each class of
partnership interest must be owned by socially and economically
disadvantaged individuals. Such ownership must be reflected in the
firm's partnership agreement.
(3) In the case of a limited liability company, at least 51 percent
of each class of member interest must be owned by socially and
economically disadvantaged individuals.
(c) The firm's ownership by socially and economically disadvantaged
individuals must be real, substantial, and continuing, going beyond pro
forma ownership of the firm as reflected in ownership documents. The
disadvantaged owners must enjoy the customary incidents of ownership,
and share in the risks and profits commensurate with their ownership
interests, as demonstrated by the substance, not merely the form, of
arrangements.
(d) All securities that constitute ownership of a firm shall be
held directly by disadvantaged persons. Except as provided in this
paragraph (d), no securities or assets held in trust, or by any
guardian for a minor, are considered as held by disadvantaged persons
in determining the ownership of a firm. However, securities or assets
held in trust are regarded as held by a disadvantaged individual for
purposes of determining ownership of the firm, if--
(1) The beneficial owner of securities or assets held in trust is a
disadvantaged individual, and the trustee is the same or another such
individual; or
(2) The beneficial owner of a trust is a disadvantaged individual
who, rather than the trustee, exercises effective control over the
management, policy-making, and daily operational activities of the
firm. Assets held in a revocable living trust may be counted only in
the situation where the same disadvantaged individual is the sole
grantor, beneficiary, and trustee.
(e) The contributions of capital or expertise by the socially and
economically disadvantaged owners to acquire their ownership interests
must be real and substantial. Examples of insufficient contributions
include a promise to contribute capital, an unsecured note payable to
the firm or an owner who is not a disadvantaged individual, or mere
participation in a firm's activities as an employee. Debt instruments
from financial institutions or other organizations that lend funds in
the normal course of their business do not render a firm ineligible,
even if the debtor's ownership interest is security for the loan.
(f) The following requirements apply to situations in which
expertise is relied upon as part of a disadvantaged owner's
contribution to acquire ownership:
(1) The owner's expertise must be--
(i) In a specialized field;
(ii) Of outstanding quality;
(iii) In areas critical to the firm's operations;
(iv) Indispensable to the firm's potential success;
(v) Specific to the type of work the firm performs; and
(vi) Documented in the records of the firm. These records must
clearly show the contribution of expertise and its value to the firm.
(2) The individual whose expertise is relied upon must have a
significant financial investment in the firm.
(g) You must always deem as held by a socially and economically
disadvantaged individual, for purposes of determining ownership, all
interests in a business or other assets obtained by the individual--
(1) As the result of a final property settlement or court order in
a divorce or legal separation, provided that no term or condition of
the agreement or divorce decree is inconsistent with this section; or
(2) Through inheritance, or otherwise because of the death of the
former owner.
(h)(1) You must presume as not being held by a socially and
economically disadvantaged individual, for purposes of determining
ownership, all interests in a business or other assets obtained by the
individual as the result of a gift, or transfer without adequate
consideration, from any non-disadvantaged individual or non-DBE firm
who is--
(i) Involved in the same firm for which the individual is seeking
certification, or an affiliate of that firm;
(ii) Involved in the same or a similar line of business; or
(iii) Engaged in an ongoing business relationship with the firm, or
an affiliate of the firm, for which the individual is seeking
certification.
(2) To overcome this presumption and permit the interests or assets
to be counted, the disadvantaged individual must demonstrate to you, by
clear and convincing evidence, that--
(i) The gift or transfer to the disadvantaged individual was made
for reasons other than obtaining certification as a DBE; and
(ii) The disadvantaged individual actually controls the management,
policy, and operations of the firm, notwithstanding the continuing
participation of a non-disadvantaged individual who provided the gift
or transfer.
(i) You must apply the following rules in situations in which
marital assets form a basis for ownership of a firm:
(1) When marital assets (other than the assets of the business in
question), held jointly or as community property by both spouses, are
used to acquire the ownership interest asserted by one spouse, you must
deem the ownership interest in the firm to have been acquired by that
spouse with his or her own individual resources, provided that the
other spouse irrevocably renounces and transfers all rights in the
ownership interest in the manner sanctioned by the laws of the state in
which either spouse or the firm is domiciled. You do not count a
greater portion of joint or community property assets toward ownership
than state law would recognize as belonging to the socially and
economically disadvantaged owner of the applicant firm.
(2) A copy of the document legally transferring and renouncing the
other spouse's rights in the jointly owned or community assets used to
acquire an ownership interest in the firm must be included as part of
the firm's application for DBE certification.
(j) You may consider the following factors in determining the
ownership of a firm. However, you must not regard a contribution of
capital as failing to be real and substantial, or find a firm
ineligible, solely because--
(1) A socially and economically disadvantaged individual acquired
his or her ownership interest as the result of a gift, or transfer
without adequate consideration, other than the types set forth in
paragraph (h) of this section;
(2) There is a provision for the co-signature of a spouse who is
not a socially and economically disadvantaged individual on financing
agreements, contracts for the purchase or sale of real or personal
property, bank signature cards, or other documents; or
(3) Ownership of the firm in question or its assets is transferred
for adequate consideration from a spouse who is not a socially and
economically disadvantaged individual to a spouse who is such an
individual. In this case, you must give particularly close and careful
scrutiny to the ownership and control of a firm to ensure that it is
owned and controlled, in substance as well as in form, by a socially
and economically disadvantaged individual.
(a) In determining whether socially and economically disadvantaged
owners control a firm, you must consider all the facts in the record,
viewed as a whole.
(b) Only an independent business may be certified as a DBE. An
independent business is one the viability of which does not depend on
its relationship with another firm or firms.
(1) In determining whether a potential DBE is an independent
business, you must scrutinize relationships with non-DBE firms, in such
areas as personnel, facilities, equipment, financial and/or bonding
support, and other resources.
(2) You must consider whether present or recent employer/employee
relationships between the disadvantaged owner(s) of the potential DBE
and non-DBE firms or persons associated with non-DBE firms compromise
the independence of the potential DBE firm.
(3) You must examine the firm's relationships with prime
contractors to determine whether a pattern of exclusive or primary
dealings with a prime contractor compromises the independence of the
potential DBE firm.
(4) In considering factors related to the independence of a
potential DBE firm, you must consider the consistency of relationships
between the potential DBE and non-DBE firms with normal industry
practice.
(c) A DBE firm must not be subject to any formal or informal
restrictions which limit the customary discretion of the socially and
economically disadvantaged owners. There can be no restrictions through
corporate charter provisions, by-law provisions, contracts or any other
formal or informal devices (e.g., cumulative voting rights, voting
powers attached to different classes of stock, employment contracts,
requirements for concurrence by non-disadvantaged partners, conditions
precedent or subsequent, executory agreements, voting trusts,
restrictions on or assignments of voting rights) that prevent the
socially and economically disadvantaged owners, without the cooperation
or vote of any non-disadvantaged individual, from making any business
decision of the firm. This paragraph does not preclude a spousal co-
signature on documents as provided for in Sec. 26.69(j)(2).
(d) The socially and economically disadvantaged owners must possess
the power to direct or cause the direction of the management and
policies of the firm and to make day-to-day as well as long-term
decisions on matters of management, policy and operations.
(1) A disadvantaged owner must hold the highest officer position in
the company (e.g., chief executive officer or president).
(2) In a corporation, disadvantaged owners must control the board
of directors.
(3) In a partnership, one or more disadvantaged owners must serve
as general partners, with control over all partnership decisions.
(e) Individuals who are not socially and economically disadvantaged
may be involved in a DBE firm as owners, managers, employees,
stockholders, officers, and/or directors. Such individuals must not,
however, possess or exercise the power to control the firm, or be
disproportionately responsible for the operation of the firm.
(f) The socially and economically disadvantaged owners of the firm
may delegate various areas of the management, policymaking, or daily
operations of the firm to other participants in the firm, regardless of
whether these participants are socially and economically disadvantaged
individuals. Such delegations of authority must be revocable, and the
socially and economically disadvantaged owners must retain the power to
hire and fire any person to whom such authority is delegated. The
managerial role of the socially and economically disadvantaged owners
in the firm's overall affairs must be such that the recipient can
reasonably conclude that the socially and economically disadvantaged
owners actually exercise control over the firm's operations,
management, and policy.
(g) The socially and economically disadvantaged owners must have an
overall understanding of, and managerial and technical competence and
experience directly related to, the type of business in which the firm
is engaged and the firm's operations. The socially and economically
disadvantaged owners are not required to have experience or expertise
in every critical area of the firm's operations, or to have greater
experience or expertise in a given field than managers or key
employees. The socially and economically disadvantaged owners must have
the ability to intelligently and critically evaluate information
presented by other participants in the firm's activities and to use
this information to make independent decisions concerning the firm's
daily operations, management, and policymaking. Generally, expertise
limited to office management, administration, or bookkeeping functions
unrelated to the principal business activities of the firm is
insufficient to demonstrate control.
(h) If state or local law requires the persons to have a particular
license or other credential in order to own and/or control a certain
type of firm, then the socially and economically disadvantaged persons
who own and control a potential DBE firm of that type must possess the
required license or credential. If state or local law does not require
such a person to have such a license or credential to own and/or
control a firm, you must not deny certification solely on the ground
that the person lacks the license or credential. However, you may take
into account the absence of the license or credential as one factor in
determining whether the socially and economically disadvantaged owners
actually control the firm.
(i)(1) You may consider differences in remuneration between the
socially and economically disadvantaged owners and other participants
in the firm in determining whether to certify a firm as a DBE. Such
consideration shall be in the context of the duties of the persons
involved, normal industry practices, the firm's policy and practice
concerning reinvestment of income, and any other explanations for the
differences proffered by the firm. You may determine that a firm is
controlled by its socially and economically disadvantaged owner
although that owner's remuneration is lower than that of some other participants in
the firm.
(2) In a case where a non-disadvantaged individual formerly
controlled the firm, and a socially and economically disadvantaged
individual now controls it, you may consider a difference between the
remuneration of the former and current controller of the firm as a
factor in determining who controls the firm, particularly when the non-
disadvantaged individual remains involved with the firm and continues
to receive greater compensation than the disadvantaged individual.
(j) In order to be viewed as controlling a firm, a socially and
economically disadvantaged owner cannot engage in outside employment or
other business interests that conflict with the management of the firm
or prevent the individual from devoting sufficient time and attention
to the affairs of the firm to control its activities. For example,
absentee ownership of a business and part-time work in a full-time firm
are not viewed as constituting control. However, an individual could be
viewed as controlling a part-time business that operates only on
evenings and/or weekends, if the individual controls it all the time it
is operating.
(k)(1) A socially and economically disadvantaged individual may
control a firm even though one or more of the individual's immediate
family members (who themselves are not socially and economically
disadvantaged individuals) participate in the firm as a manager,
employee, owner, or in another capacity. Except as otherwise provided
in this paragraph, you must make a judgment about the control the
socially and economically disadvantaged owner exercises vis-a-vis other
persons involved in the business as you do in other situations, without
regard to whether or not the other persons are immediate family
members.
(2) If you cannot determine that the socially and economically
disadvantaged owners--as distinct from the family as a whole--control
the firm, then the socially and economically disadvantaged owners have
failed to carry their burden of proof concerning control, even though
they may participate significantly in the firm's activities.
(l) Where a firm was formerly owned and/or controlled by a non-
disadvantaged individual (whether or not an immediate family member),
ownership and/or control were transferred to a socially and
economically disadvantaged individual, and the non-disadvantaged
individual remains involved with the firm in any capacity, the
disadvantaged individual now owning the firm must demonstrate to you,
by clear and convincing evidence, that:
(1) The transfer of ownership and/or control to the disadvantaged
individual was made for reasons other than obtaining certification as a
DBE; and
(2) The disadvantaged individual actually controls the management,
policy, and operations of the firm, notwithstanding the continuing
participation of a non-disadvantaged individual who formerly owned and/
or controlled the firm.
(m) In determining whether a firm is controlled by its socially and
economically disadvantaged owners, you may consider whether the firm
owns equipment necessary to perform its work. However, you must not
determine that a firm is not controlled by socially and economically
disadvantaged individuals solely because the firm leases, rather than
owns, such equipment, where leasing equipment is a normal industry
practice and the lease does not involve a relationship with a prime
contractor or other party that compromises the independence of the
firm.
(n) You must grant certification to a firm only for specific types
of work in which the socially and economically disadvantaged owners
have the ability to control the firm. To become certified in an
additional type of work, the firm need demonstrate to you only that its
socially and economically disadvantaged owners are able to control the
firm with respect to that type of work. You may not, in this situation,
require that the firm be recertified or submit a new application for
certification, but you must verify the disadvantaged owner's control of
the firm in the additional type of work.
(o) A business operating under a franchise or license agreement may
be certified if it meets the standards in this subpart and the
franchiser or licenser is not affiliated with the franchisee or
licensee. In determining whether affiliation exists, you should
generally not consider the restraints relating to standardized quality,
advertising, accounting format, and other provisions imposed on the
franchisee or licensee by the franchise agreement or license, provided
that the franchisee or licensee has the right to profit from its
efforts and bears the risk of loss commensurate with ownership.
Alternatively, even though a franchisee or licensee may not be
controlled by virtue of such provisions in the franchise agreement or
license, affiliation could arise through other means, such as common
management or excessive restrictions on the sale or transfer of the
franchise interest or license.
(p) In order for a partnership to be controlled by socially and
economically disadvantaged individuals, any non-disadvantaged partners
must not have the power, without the specific written concurrence of
the socially and economically disadvantaged partner(s), to
contractually bind the partnership or subject the partnership to
contract or tort liability.
(q) The socially and economically disadvantaged individuals
controlling a firm may use an employee leasing company. The use of such
a company does not preclude the socially and economically disadvantaged
individuals from controlling their firm if they continue to maintain an
employer-employee relationship with the leased employees. This includes
being responsible for hiring, firing, training, assigning, and
otherwise controlling the on-the-job activities of the employees, as
well as ultimate responsibility for wage and tax obligations related to
the employees.
(a)(1) Consideration of whether a firm performs a commercially
useful function or is a regular dealer pertains solely to counting
toward DBE goals the participation of firms that have already been
certified as DBEs. Except as provided in paragraph (a)(2) of this
section, you must not consider commercially useful function issues in
any way in making decisions about whether to certify a firm as a DBE.
(2) You may consider, in making certification decisions, whether a
firm has exhibited a pattern of conduct indicating its involvement in
attempts to evade or subvert the intent or requirements of the DBE
program.
(b) You must evaluate the eligibility of a firm on the basis of
present circumstances. You must not refuse to certify a firm based
solely on historical information indicating a lack of ownership or
control of the firm by socially and economically disadvantaged
individuals at some time in the past, if the firm currently meets the
ownership and control standards of this part. Nor must you refuse to
certify a firm solely on the basis that it is a newly formed firm.
(c) DBE firms and firms seeking DBE certification shall cooperate
fully with your requests (and DOT requests) for information relevant to
the certification process. Failure or refusal to provide such
information is a ground for a denial or removal of certification.
(d) Only firms organized for profit may be eligible DBEs. Not-for-
profit organizations, even though controlled by socially and
economically disadvantaged individuals, are not eligible to be
certified as DBEs.
(e) An eligible DBE firm must be owned by individuals who are
socially and economically disadvantaged. Except as provided in this
paragraph, a firm that is not owned by such individuals, but instead is
owned by another firm--even a DBE firm--cannot be an eligible DBE.
(1) If socially and economically disadvantaged individuals own and
control a firm through a parent or holding company, established for
tax, capitalization or other purposes consistent with industry
practice, and the parent or holding company in turn owns and controls
an operating subsidiary, you may certify the subsidiary if it otherwise
meets all requirements of this subpart. In this situation, the
individual owners and controllers of the parent or holding company are
deemed to control the subsidiary through the parent or holding company.
(2) You may certify such a subsidiary only if there is cumulatively
51 percent ownership of the subsidiary by socially and economically
disadvantaged individuals. The following examples illustrate how this
cumulative ownership provision works:
Example 1: Socially and economically disadvantaged individuals
own 100 percent of a holding company, which has a wholly-owned
subsidiary. The subsidiary may be certified, if it meets all other
requirements.
Example 2: Disadvantaged individuals own 100 percent of the
holding company, which owns 51 percent of a subsidiary. The
subsidiary may be certified, if all other requirements are met.
Example 3: Disadvantaged individuals own 80 percent of the
holding company, which in turn owns 70 percent of a subsidiary. In
this case, the cumulative ownership of the subsidiary by
disadvantaged individuals is 56 percent (80 percent of the 70
percent). This is more than 51 percent, so you may certify the
subsidiary, if all other requirements are met.
Example 4: Same as Example 2 or 3, but someone other than the
socially and economically disadvantaged owners of the parent or
holding company controls the subsidiary. Even though the subsidiary
is owned by disadvantaged individuals, through the holding or parent
company, you cannot certify it because it fails to meet control
requirements.
Example 5: Disadvantaged individuals own 60 percent of the
holding company, which in turn owns 51 percent of a subsidiary. In
this case, the cumulative ownership of the subsidiary by
disadvantaged individuals is about 31 percent. This is less than 51
percent, so you cannot certify the subsidiary.
Example 6: The holding company, in addition to the subsidiary
seeking certification, owns several other companies. The combined
gross receipts of the holding companies and its subsidiaries are
greater than the size standard for the subsidiary seeking
certification and/or the gross receipts cap of Sec. 26.65(b). Under
the rules concerning affiliation, the subsidiary fails to meet the
size standard and cannot be certified.
(f) Recognition of a business as a separate entity for tax or
corporate purposes is not necessarily sufficient to demonstrate that a
firm is an independent business, owned and controlled by socially and
economically disadvantaged individuals.
(g) You must not require a DBE firm to be prequalified as a
condition for certification unless the recipient requires all firms
that participate in its contracts and subcontracts to be prequalified.
(h) A firm that is owned by an Indian tribe, Alaska Native
Corporation, or Native Hawaiian organization as an entity, rather than
by Indians, Alaska Natives, or Native Hawaiians as individuals, may be
eligible for certification. Such a firm must meet the size standards of
Sec. 26.65. Such a firm must be controlled by socially and economically
disadvantaged individuals, as provided in Sec. 26.71.
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