DBE Size Cap

[Federal Register: August 29, 2000 (Volume 65, Number 168)]

[Notices]              

[Page 52470-52471]

From the Federal Register Online via GPO Access [wais.access.gpo.gov]

[DOCID:fr29au00-127]                        

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DEPARTMENT OF TRANSPORTATION

Office of the Secretary

RIN 2105-AC90

Participation by Disadvantaged Business Enterprises in Department

of Transportation Financial Assistance Programs; Inflationary

Adjustment

AGENCY: Office of the Secretary, DOT.

ACTION: 2000 inflation adjustment of size limits on small businesses

participating in the DOT's Disadvantaged Business Enterprise Program.

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SUMMARY: Under the statutes governing the Department's Disadvantaged

Business Enterprise (DBE) Program, firms are not considered small

businesses concerns and are therefore ineligible as DBEs once their

average annual receipts over the preceding three fiscal years reach

specified dollar limits. These statutes, and the DOT rule implementing

them (49 CFR part 26), provide that the Secretary may adjust these

specified dollar limits for inflation. Consequently, this notice

revises the limits established by section 1101(b)(2)(A) of the

Transportation Equity Act for the 21st Century (TEA-21), Public Law

105-178, July 22, 1998 as well as the Airport and Airway Safety,

Capacity, Noise Improvement and Intermodal Transportation Act of 1992,

Public Law 102-581, October 31, 1992, 49 U.S.C. 47113 (formerly section

505(d) of the Airport and Airway Improvement Act of 1982, as amended

(AAIA)), Public Law 97-248, Title V, September 3, 1982. The Department

has determined that the appropriate cap for all portions of the DBE

program (airport, highway and transit) is now $17,420,000.

EFFECTIVE DATE: August 29, 2000.

FOR FURTHER INFORMATION CONTACT:

Laura Aguilar, Office of the Assistant

General Counsel for Environmental, Civil Rights, and General Law,

Department of Transportation, 400 Seventh Street, SW, Room 10102,

Washington, D.C. 20590; Telephone: 202-366-0365.

SUPPLEMENTARY INFORMATION: The DBE program is a statutory program

intended to provide contracting opportunities for small business

concerns owned and controlled by socially and economically

disadvantaged individuals in the Department's highway, mass transit and

airport financial assistance programs. The statutory provision

governing the DBE program in the highway and mass transit financial

assistance programs is section 1101(b) of TEA-21, Public Law 105-178,

July 22, 1998. The statutory provision governing the DBE program as it

relates to the airport planning and airport development financial

assistance programs is section 505(d) of the AAIA, Public Law 97-248,

Title V, September 3, 1982, as amended by section 105(f) of the Airport

and Airway Safety and Capacity Expansion Act, Public Law 100-223,

December 30, 1987, and section 117(c) of the Airport and Airway Safety,

Capacity, Noise Improvement, and Intermodal Transportation Act of 1992,

Public Law 102-581, October 31, 1992. This provision is codified at 49

U.S.C. 47113.

    The DBE provisions in TEA-21 and AAIA reflect Congress' intention

that the DBE program meets the objective of helping small business

concerns, owned and controlled by socially and economically

disadvantaged individuals, become self-sufficient and able to compete

with non-disadvantaged firms. To achieve this, DBE firms are currently

ineligible for the program once their average annual gross receipts

over the preceding three fiscal years exceed $16,600,000. This

specified gross receipts cap is subject to adjustment by the Secretary

of Transportation for inflation. See TEA-21 Sec. 1101(b)(2)(A) and 49

U.S.C. 47113(a)(1)(B).

    This notice adjusts the DBE gross receipts cap for inflation since

enactment of TEA-21 in July 1998. This notice does not address the

small business size standards for the DBE program for airport

concessions established pursuant to section 511(a)(17) of the AAIA, as

amended (49 U.S.C. 47107(e)). The maximum size standards for airport

concessionaires under that program are currently set forth in 49 CFR

Part 23, Subpart F, Appendix A.

    The current gross receipts cap regulates DBE's operating under both

TEA-21 and AAIA. The Department last adjusted these DBE size limits for

inflation in 1994. Under the 1994 adjustment, the cap was raised for

inflation from $16,015,000 to $16,600,000 or 3.63%. In recognition of

the overall effects of inflation on the economy within the past few

years, the Department wants to insure that DBE's have the maximum

opportunity to participate in DOT-assisted contracts of highway,

transit and airport recipients by adjusting the small business size

limit for inflation. With an inflationary adjustment for the period

from TEA-21's enactment through the first quarter of 2000, the

Department has determined that the appropriate cap for all portions of

the DBE program (airport, highway and transit) is now $17,420,000.

    In arriving at the $17,420,000 figure, the DOT used a Department of

Commerce price index to make a current inflation adjustment. The

Department of Commerce's Bureau of Economic Analysis prepares constant

dollar estimates of state and local government purchases of goods and

services by deflating current dollar estimates by suitable price

indexes. These indexes include purchases of durable and non-durable

goods, financial and other services, structures (11 types of new

construction, net purchases of existing residential structures,

nonresidential structures and maintenance repair services) and

compensation of employees. Using these price deflators enables the

Department to adjust dollar figures for past years' inflation.

    Given the nature of DOT's DBE Program, adjusting the gross receipts

cap in the same manner in which inflation adjustments are made to the

costs of state and local government purchases of goods and services is

simple, accurate and fair. The inflation rate on purchases by state and

local governments for the current year is calculated by dividing the

price deflator for the first quarter of 2000 (109.56) by 1998's third

quarter price deflator (104.40). The third quarter of 1998 is used

because that is when TEA-21 was enacted, along with the DBE statutory

cap amount of $16,600,000. The result of the calculation is 1.0494,

which represents an inflation rate of 4.94% from the third quarter of

1998 through the first quarter of 2000. Multiplying the $16,600,000

figure by 1.0494 equals

[[Page 52471]]

$17,420,040, which will be rounded off to the nearest $10,000, or

$17,420,000. Using this Department-wide cap should help make the

program more understandable and consistent for all participants.

    Therefore, until further notice, if a firm's average gross annual

receipts over the preceding three years do not exceed $17,420,000, it

does not exceed the small business size limit contained in the

statutes.

Issued this 22nd day of August 2000, at Washington, DC.

Rodney E. Slater,

Secretary.

[FR Doc. 00-22021 Filed 8-28-00; 8:45 am]

BILLING CODE 4910-62-P