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DBE Final Rule
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Subpart E--Certification Procedures
Question and Answer
(a) You and all other DOT recipients in your state must participate
in a Unified Certification Program (UCP).
(1) Within three years of March 4, 1999, you and the other
recipients in your state must sign an agreement establishing the UCP
for that state and submit the agreement to the Secretary for approval.
The Secretary may, on the basis of extenuating circumstances shown by
the recipients in the state, extend this deadline for no more than one
additional year.
(2) The agreement must provide for the establishment of a UCP
meeting all the requirements of this section. The agreement must
specify that the UCP will follow all certification procedures and
standards of this part, on the same basis as recipients; that the UCP
shall cooperate fully with oversight, review, and monitoring activities
of DOT and its operating administrations; and that the UCP shall
implement DOT directives and guidance concerning certification matters.
The agreement shall also commit recipients to ensuring that the UCP has
sufficient resources and expertise to carry out the requirements of
this part. The agreement shall include an implementation schedule
ensuring that the UCP is fully operational no later than 18 months
following the approval of the agreement by the Secretary.
(3) Subject to approval by the Secretary, the UCP in each state may
take any form acceptable to the recipients in that state.
(4) The Secretary shall review the UCP and approve it, disapprove
it, or remand it to the recipients in the state for revisions. A
complete agreement which is not disapproved or remanded within 180 days
of its receipt is deemed to be accepted.
(5) If you and the other recipients in your state fail to meet the
deadlines set forth in this paragraph (a), you shall have the
opportunity to make an explanation to the Secretary why a deadline
could not be met and why meeting the deadline was beyond your control.
If you fail to make such an explanation, or the explanation does not
justify the failure to meet the deadline, the Secretary shall direct
you to complete the required action by a date certain. If you and the
other recipients fail to carry out this direction in a timely manner,
you are collectively in noncompliance with this part.
(b) The UCP shall make all certification decisions on behalf of all
DOT recipients in the state with respect to participation in the DOT
DBE Program.
(1) Certification decisions by the UCP shall be binding on all DOT
recipients within the state.
(2) The UCP shall provide ``one-stop shopping'' to applicants for
certification, such that an applicant is required to apply only once
for a DBE certification that will be honored by all recipients in the
state.
(3) All obligations of recipients with respect to certification and
nondiscrimination must be carried out by UCPs, and recipients may use
only UCPs that comply with the certification and nondiscrimination
requirements of this part.
(c) All certifications by UCPs shall be pre-certifications; i.e.,
certifications that have been made final before the due date for bids
or offers on a contract on which a firm seeks to participate as a DBE.
(d) A UCP is not required to process an application for
certification from a firm having its principal place of business
outside the state if the firm is not certified by the UCP in the state
in which it maintains its principal place of business. The ``home
state'' UCP shall share its information and documents concerning the
firm with other UCPs that are considering the firm's application.
(e) Subject to DOT approval as provided in this section, the
recipients in two or more states may form a regional UCP. UCPs may also
enter into written reciprocity agreements with other UCPs. Such an
agreement shall outline the specific responsibilities of each
participant. A UCP may accept the certification of any other UCP or DOT
recipient.
(f) Pending the establishment of UCPs meeting the requirements of
this section, you may enter into agreements with other recipients, on a
regional or inter-jurisdictional basis, to perform certification
functions required by this part. You may also grant reciprocity to
other recipient's certification decisions.
(g) Each UCP shall maintain a unified DBE directory containing, for
all firms certified by the UCP (including those from other states
certified under the provisions of this section), the information
required by Sec. 26.31. The UCP shall make the directory available to
the public electronically, on the internet, as well as in print. The
UCP shall update the electronic version of the directory by including
additions, deletions, and other changes as soon as they are made.
(h) Except as otherwise specified in this section, all provisions
of this subpart and subpart D of this part pertaining to recipients
also apply to UCPs.
certification decisions?
(a) You must ensure that only firms certified as eligible DBEs
under this section participate as DBEs in your program.
(b) You must determine the eligibility of firms as DBEs consistent
with the standards of subpart D of this part. When a UCP is formed, the
UCP must meet all the requirements of subpart D of this part and this
subpart that recipients are required to meet.
(c) You must take all the following steps in determining whether a
DBE firm meets the standards of subpart D of this part:
(1) Perform an on-site visit to the offices of the firm. You must
interview the principal officers of the firm and review their resumes
and/or work histories. You must also perform an on-site visit to job
sites if there are such sites on which the firm is working at the time
of the eligibility investigation in your jurisdiction or local area.
You may rely upon the site visit report of any other recipient with
respect to a firm applying for certification;
(2) If the firm is a corporation, analyze the ownership of stock in
the firm;
(3) Analyze the bonding and financial capacity of the firm;
(4) Determine the work history of the firm, including contracts it
has received and work it has completed;
(5) Obtain a statement from the firm of the type of work it prefers
to perform as part of the DBE program and its preferred locations for
performing the work, if any;
(6) Obtain or compile a list of the equipment owned by or available
to the firm and the licenses the firm and its key personnel possess to
perform the work it seeks to do as part of the DBE program;
(7) Require potential DBEs to complete and submit an appropriate
application form.
(i) Uniform form. [Reserved]
(ii) You must make sure that the applicant attests to the accuracy
and truthfulness of the information on the application form. This shall
be done either in the form of an affidavit sworn to by the applicant
before a person who is authorized by state law to administer oaths or
in the form of an unsworn declaration executed under penalty of perjury
of the laws of the United States.
(iii) You must review all information on the form prior to making a
decision about the eligibility of the firm.
(d) When another recipient, in connection with its consideration of
the eligibility of a firm, makes a written request for certification
information you have obtained about that firm (e.g., including
application materials or the report of a site visit, if you have made
one to the firm), you must promptly make the information available to
the other recipient.
(e) When another DOT recipient has certified a firm, you have
discretion to take any of the following actions:
(1) Certify the firm in reliance on the certification decision of
the other recipient;
(2) Make an independent certification decision based on
documentation provided by the other recipient, augmented by any
additional information you require the applicant to provide; or
(3) Require the applicant to go through your application process
without regard to the action of the other recipient.
(f) Subject to the approval of the concerned operating
administration as part of your DBE program, you may impose a reasonable
application fee for certification. Fee waivers shall be made in
appropriate cases.
(g) You must safeguard from disclosure to unauthorized persons
information gathered as part of the certification process that may
reasonably be regarded as proprietary or other confidential business
information, consistent with applicable Federal, state, and local law.
(h) Once you have certified a DBE, it shall remain certified for a
period of at least three years unless and until its certification has
been removed through the procedures of Sec. 26.87. You may not require
DBEs to reapply for certification as a condition of continuing to
participate in the program during this three-year period, unless the
factual basis on which the certification was made changes.
(i) If you are a DBE, you must inform the recipient or UCP in
writing of any change in circumstances affecting your ability to meet
size, disadvantaged status, ownership, or control requirements of this
part or any material change in the information provided in your
application form.
(1) Changes in management responsibility among members of a limited
liability company are covered by this requirement.
(2) You must attach supporting documentation describing in detail
the nature of such changes.
(3) The notice must take the form of an affidavit sworn to by the
applicant before a person who is authorized by state law to administer
oaths or of an unsworn declaration executed under penalty of perjury of
the laws of the United States. You must provide the written
notification within 30 days of the occurrence of the change. If you
fail to make timely notification of such a change, you will be deemed
to have failed to cooperate under Sec. 26.109(c).
(j) If you are a DBE, you must provide to the recipient, every year
on the anniversary of the date of your certification, an affidavit
sworn to by the firm's owners before a person who is authorized by
state law to administer oaths or an unsworn declaration executed under
penalty of perjury of the laws of the United States. This affidavit
must affirm that there have been no changes in the firm's circumstances
affecting its ability to meet size, disadvantaged status, ownership, or
control requirements of this part or any material changes in the
information provided in its application form, except for changes about
which you have notified the recipient under paragraph (i) of this
section. The affidavit shall specifically affirm that your firm
continues to meet SBA business size criteria and the overall gross
receipts cap of this part, documenting this affirmation with supporting
documentation of your firm's size and gross receipts. If you fail to
provide this affidavit in a timely manner, you will be
deemed to have failed to cooperate under Sec. 26.109(c).
(k) If you are a recipient, you must make decisions on applications
for certification within 90 days of receiving from the applicant firm
all information required under this part. You may extend this time
period once, for no more than an additional 60 days, upon written
notice to the firm, explaining fully and specifically the reasons for
the extension. You may establish a different time frame in your DBE
program, upon a showing that this time frame is not feasible, and
subject to the approval of the concerned operating administration. Your
failure to make a decision by the applicable deadline under this
paragraph is deemed a constructive denial of the application, on the
basis of which the firm may appeal to DOT under Sec. 26.89.
for certification?
(a) When you deny a request by a firm, which is not currently
certified with you, to be certified as a DBE, you must provide the firm
a written explanation of the reasons for the denial, specifically
referencing the evidence in the record that supports each reason for
the denial. All documents and other information on which the denial is
based must be made available to the applicant, on request.
(b) When a firm is denied certification, you must establish a time
period of no more than twelve months that must elapse before the firm
may reapply to the recipient for certification. You may provide, in
your DBE program, subject to approval by the concerned operating
administration, a shorter waiting period for reapplication. The time
period for reapplication begins to run on the date the explanation
required by paragraph (a) of this section is received by the firm.
(c) When you make an administratively final denial of certification
concerning a firm, the firm may appeal the denial to the Department
under Sec. 26.89.
eligibility?
(a) Ineligibility complaints. (1) Any person may file with you a
written complaint alleging that a currently-certified firm is
ineligible and specifying the alleged reasons why the firm is
ineligible. You are not required to accept a general allegation that a
firm is ineligible or an anonymous complaint. The complaint may include
any information or arguments supporting the complainant's assertion
that the firm is ineligible and should not continue to be certified.
Confidentiality of complainants' identities must be protected as
provided in Sec. 26.109(b).
(2) You must review your records concerning the firm, any material
provided by the firm and the complainant, and other available
information. You may request additional information from the firm or
conduct any other investigation that you deem necessary.
(3) If you determine, based on this review, that there is
reasonable cause to believe that the firm is ineligible, you must
provide written notice to the firm that you propose to find the firm
ineligible, setting forth the reasons for the proposed determination.
If you determine that such reasonable cause does not exist, you must
notify the complainant and the firm in writing of this determination
and the reasons for it. All statements of reasons for findings on the
issue of reasonable cause must specifically reference the evidence in
the record on which each reason is based.
(b) Recipient-initiated proceedings. If, based on notification by
the firm of a change in its circumstances or other information that
comes to your attention, you determine that there is reasonable cause
to believe that a currently certified firm is ineligible, you must
provide written notice to the firm that you propose to find the firm
ineligible, setting forth the reasons for the proposed determination.
The statement of reasons for the finding of reasonable cause must
specifically reference the evidence in the record on which each reason
is based.
(c) DOT directive to initiate proceeding. (1) If the concerned
operating administration determines that information in your
certification records, or other information available to the concerned
operating administration, provides reasonable cause to believe that a
firm you certified does not meet the eligibility criteria of this part,
the concerned operating administration may direct you to initiate a
proceeding to remove the firm's certification.
(2) The concerned operating administration must provide you and the
firm a notice setting forth the reasons for the directive, including
any relevant documentation or other information.
(3) You must immediately commence and prosecute a proceeding to
remove eligibility as provided by paragraph (b) of this section.
(d) Hearing. When you notify a firm that there is reasonable cause
to remove its eligibility, as provided in paragraph (a), (b), or (c) of
this section, you must give the firm an opportunity for an informal
hearing, at which the firm may respond to the reasons for the proposal
to remove its eligibility in person and provide information and
arguments concerning why it should remain certified.
(1) In such a proceeding, you bear the burden of proving, by a
preponderance of the evidence, that the firm does not meet the
certification standards of this part.
(2) You must maintain a complete record of the hearing, by any
means acceptable under state law for the retention of a verbatim record
of an administrative hearing. If there is an appeal to DOT under
Sec. 26.89, you must provide a transcript of the hearing to DOT and, on
request, to the firm. You must retain the original record of the
hearing. You may charge the firm only for the cost of copying the
record.
(3) The firm may elect to present information and arguments in
writing, without going to a hearing. In such a situation, you bear the
same burden of proving, by a preponderance of the evidence, that the
firm does not meet the certification standards, as you would during a
hearing.
(e) Separation of functions. You must ensure that the decision in a
proceeding to remove a firm's eligibility is made by an office and
personnel that did not take part in actions leading to or seeking to
implement the proposal to remove the firm's eligibility and are not
subject, with respect to the matter, to direction from the office or
personnel who did take part in these actions.
(1) Your method of implementing this requirement must be made part
of your DBE program.
(2) The decisionmaker must be an individual who is knowledgeable
about the certification requirements of your DBE program and this part.
(3) Before a UCP is operational in its state, a small airport or
small transit authority (i.e., an airport or transit authority serving
an area with less than 250,000 population) is required to meet this
requirement only to the extent feasible.
(f) Grounds for decision. You must not base a decision to remove
eligibility on a reinterpretation or changed opinion of information
available to the recipient at the time of its certification of the
firm. You may base such a decision only on one or more of the
following:
(1) Changes in the firm's circumstances since the certification of
the firm by the recipient that render the firm unable to meet the
eligibility standards of this part;
(2) Information or evidence not available to you at the time the
firm was certified;
(3) Information that was concealed or misrepresented by the firm in
previous certification actions by a recipient;
(4) A change in the certification standards or requirements of the
Department since you certified the firm; or
(5) A documented finding that your determination to certify the
firm was factually erroneous.
(g) Notice of decision. Following your decision, you must provide
the firm written notice of the decision and the reasons for it,
including specific references to the evidence in the record that
supports each reason for the decision. The notice must inform the firm
of the consequences of your decision and of the availability of an
appeal to the Department of Transportation under Sec. 26.89. You must
send copies of the notice to the complainant in an ineligibility
complaint or the concerned operating administration that had directed
you to initiate the proceeding.
(h) Status of firm during proceeding. (1) A firm remains an
eligible DBE during the pendancy of your proceeding to remove its
eligibility.
(2) The firm does not become ineligible until the issuance of the
notice provided for in paragraph (g) of this section.
(i) Effects of removal of eligibility. When you remove a firm's
eligibility, you must take the following action:
(1) When a prime contractor has made a commitment to using the
ineligible firm, or you have made a commitment to using a DBE prime
contractor, but a subcontract or contract has not been executed before
you issue the decertification notice provided for in paragraph (g) of
this section, the ineligible firm does not count toward the contract
goal or overall goal. You must direct the prime contractor to meet the
contract goal with an eligible DBE firm or demonstrate to you that it
has made a good faith effort to do so.
(2) If a prime contractor has executed a subcontract with the firm
before you have notified the firm of its ineligibility, the prime
contractor may continue to use the firm on the contract and may
continue to receive credit toward its DBE goal for the firm's work. In
this case, or in a case where you have let a prime contract to the DBE
that was later ruled ineligible, the portion of the ineligible firm's
performance of the contract remaining after you issued the notice of
its ineligibility shall not count toward your overall goal, but may
count toward the contract goal.
(3) Exception: If the DBE's ineligibility is caused solely by its
having exceeded the size standard during the performance of the
contract, you may continue to count its participation on that contract
toward overall and contract goals.
(j) Availability of appeal. When you make an administratively final
removal of a firm's eligibility under this section, the firm may appeal
the removal to the Department under Sec. 26.89.
Department of Transportation?
(a)(1) If you are a firm which is denied certification or whose
eligibility is removed by a recipient, you may make an administrative
appeal to the Department.
(2) If you are a complainant in an ineligibility complaint to a
recipient (including the concerned operating administration in the
circumstances provided in Sec. 26.87(c)), you may appeal to the
Department if the recipient does not find reasonable cause to propose
removing the firm's eligibility or, following a removal of eligibility
proceeding, determines that the firm is eligible.
(3) Send appeals to the following address: Department of
Transportation, Office of Civil Rights, 400 7th Street, SW, Room 2401,
Washington, DC 20590.
(b) Pending the Department's decision in the matter, the
recipient's decision remains in effect. The Department does not stay
the effect of the recipient's decision while it is considering an
appeal.
(c) If you want to file an appeal, you must send a letter to the
Department within 90 days of the date of the recipient's final
decision, including information and arguments concerning why the
recipient's decision should be reversed. The Department may accept an
appeal filed later than 90 days after the date of the decision if the
Department determines that there was good cause for the late filing of
the appeal.
(1) If you are an appellant who is a firm which has been denied
certification, whose certification has been removed, whose owner is
determined not to be a member of a designated disadvantaged group, or
concerning whose owner the presumption of disadvantage has been
rebutted, your letter must state the name and address of any other
recipient which currently certifies the firm, which has rejected an
application for certification from the firm or removed the firm's
eligibility within one year prior to the date of the appeal, or before
which an application for certification or a removal of eligibility is
pending. Failure to provide this information may be deemed a failure to
cooperate under Sec. 26.109(c).
(2) If you are an appellant other than one described in paragraph
(c)(1) of this section, the Department will request, and the firm whose
certification has been questioned shall promptly provide, the
information called for in paragraph (c)(1) of this section. Failure to
provide this information may be deemed a failure to cooperate under
Sec. 26.109(c).
(d) When it receives an appeal, the Department requests a copy of
the recipient's complete administrative record in the matter. If you
are the recipient, you must provide the administrative record,
including a hearing transcript, within 20 days of the Department's
request. The Department may extend this time period on the basis of a
recipient's showing of good cause. To facilitate the Department's
review of a recipient's decision, you must ensure that such
administrative records are well organized, indexed, and paginated.
Records that do not comport with these requirements are not acceptable
and will be returned to you to be corrected immediately. If an appeal
is brought concerning one recipient's certification decision concerning
a firm, and that recipient relied on the decision and/or administrative
record of another recipient, this requirement applies to both
recipients involved.
(e) The Department makes its decision based solely on the entire
administrative record. The Department does not make a de novo review of
the matter and does not conduct a hearing. The Department may
supplement the administrative record by adding relevant information
made available by the DOT Office of Inspector General; Federal, state,
or local law enforcement authorities; officials of a DOT operating
administration or other appropriate DOT office; a recipient; or a firm
or other private party.
(f) As a recipient, when you provide supplementary information to
the Department, you shall also make this information available to the
firm and any third-party complainant involved, consistent with Federal
or applicable state laws concerning freedom of information and privacy.
The Department makes available, on request by the firm and any third-
party complainant involved, any supplementary information it receives
from any source.
(1) The Department affirms your decision unless it determines,
based on the entire administrative record, that your decision is
unsupported by substantial evidence or inconsistent with the substantive or procedural
provisions of this part concerning certification.
(2) If the Department determines, after reviewing the entire
administrative record, that your decision was unsupported by
substantial evidence or inconsistent with the substantive or procedural
provisions of this part concerning certification, the Department
reverses your decision and directs you to certify the firm or remove
its eligibility, as appropriate. You must take the action directed by
the Department's decision immediately upon receiving written notice of
it.
(3) The Department is not required to reverse your decision if the
Department determines that a procedural error did not result in
fundamental unfairness to the appellant or substantially prejudice the
opportunity of the appellant to present its case.
(4) If it appears that the record is incomplete or unclear with
respect to matters likely to have a significant impact on the outcome
of the case, the Department may remand the record to you with
instructions seeking clarification or augmentation of the record before
making a finding. The Department may also remand a case to you for
further proceedings consistent with Department instructions concerning
the proper application of the provisions of this part.
(5) The Department does not uphold your decision based on grounds
not specified in your decision.
(6) The Department's decision is based on the status and
circumstances of the firm as of the date of the decision being
appealed.
(7) The Department provides written notice of its decision to you,
the firm, and the complainant in an ineligibility complaint. A copy of
the notice is also sent to any other recipient whose administrative
record or decision has been involved in the proceeding (see paragraph
(d) of this section). The notice includes the reasons for the
Department's decision, including specific references to the evidence in
the record that supports each reason for the decision.
(8) The Department's policy is to make its decision within 180 days
of receiving the complete administrative record. If the Department does
not make its decision within this period, the Department provides
written notice to concerned parties, including a statement of the
reason for the delay and a date by which the appeal decision will be
made.
(g) All decisions under this section are administratively final,
and are not subject to petitions for reconsideration.
appeal decisions?
(a) If you are the recipient from whose action an appeal under
Sec. 26.89 is taken, the decision is binding. It is not binding on
other recipients.
(b) If you are a recipient to which a DOT determination under
Sec. 26.89 is applicable, you must take the following action:
(1) If the Department determines that you erroneously certified a
firm, you must remove the firm's eligibility on receipt of the
determination, without further proceedings on your part. Effective on
the date of your receipt of the Department's determination, the
consequences of a removal of eligibility set forth in Sec. 26.87(i)
take effect.
(2) If the Department determines that you erroneously failed to
find reasonable cause to remove the firm's eligibility, you must
expeditiously commence a proceeding to determine whether the firm's
eligibility should be removed, as provided in Sec. 26.87.
(3) If the Department determines that you erroneously declined to
certify or removed the eligibility of the firm, you must certify the
firm, effective on the date of your receipt of the written notice of
Department's determination.
(4) If the Department determines that you erroneously determined
that the presumption of social and economic disadvantage either should
or should not be deemed rebutted, you must take appropriate corrective
action as determined by the Department.
(5) If the Department affirms your determination, no further action
is necessary.
(c) Where DOT has upheld your denial of certification to or removal
of eligibility from a firm, or directed the removal of a firm's
eligibility, other recipients with whom the firm is certified may
commence a proceeding to remove the firm's eligibility under
Sec. 26.87. Such recipients must not remove the firm's eligibility
absent such a proceeding. Where DOT has reversed your denial of
certification to or removal of eligibility from a firm, other
recipients must take the DOT action into account in any certification
action involving the firm. However, other recipients are not required
to certify the firm based on the DOT decision.
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