CFR 2010 Title49 Vol1 Part26

Office of the Secretary of Transportation Pt.
26
25.545 Pre-employment inquiries. Title VI of the Civil Rights Act of 1964

(42 U.S.C. 2000d) (Title VI) are hereby
(a) Marital status. A recipient shall
adopted and applied to these Title IX
not make pre-employment inquiry as
regulations. These procedures may be
to the marital status of an applicant
found at 49 CFR part 21.
for employment, including whether
such applicant is Miss or Mrs. [65 FR 52895, Aug. 30, 2000]
(b) Sex. A recipient may make pre-
employment inquiry as to the sex of an PART 26PARTICIPATION BY DIS-
applicant for employment, but only if ADVANTAGED BUSINESS ENTER-
such inquiry is made equally of such PRISES IN DEPARTMENT OF
applicants of both sexes and if the re-
sults of such inquiry are not used in
TRANSPORTATION FINANCIAL
connection with discrimination prohib- ASSISTANCE PROGRAMS
ited by these Title IX regulations.
Subpart AGeneral
25.550 Sex as a bona fide occupa- Sec.
tional qualification. 26.1 What are the objectives of this part?
A recipient may take action other- 26.3 To whom does this part apply?
wise prohibited by 25.500 through 26.5 What do the terms used in this part
25.550 provided it is shown that sex is a mean?
26.7 What discriminatory actions are forbid-
bona fide occupational qualification for den?
that action, such that consideration of 26.9 How does the Department issue guid-
sex with regard to such action is essen- ance and interpretations under this part?
tial to successful operation of the em- 26.11 What records do recipients keep and
ployment function concerned. A recipi- report?
ent shall not take action pursuant to 26.13 What assurances must recipients and
this section that is based upon alleged contractors make?
26.15 How can recipients apply for exemp-
comparative employment characteris-
tions or waivers?
tics or stereotyped characterizations of
one or the other sex, or upon pref- Subpart BAdministrative Requirements
erence based on sex of the recipient, for DBE Programs for Federally-Assisted
employees, students, or other persons, Contracting
but nothing contained in this section
shall prevent a recipient from consid- 26.21 Who must have a DBE program?
ering an employees sex in relation to 26.23 What is the requirement for a policy
statement?
employment in a locker room or toilet 26.25 What is the requirement for a liaison
facility used only by members of one officer?
sex. 26.27 What efforts must recipients make
concerning DBE financial institutions?
Subpart FProcedures 26.29 What prompt payment mechanisms
must recipients have?
25.600 Notice of covered programs. 26.31 What requirements pertain to the DBE
directory?
Within 60 days of September 29, 2000, 26.33 What steps must a recipient take to
each Federal agency that awards Fed- address overconcentration of DBEs in
eral financial assistance shall publish certain types of work?
in the FEDERAL REGISTER a notice of 26.35 What role do business development
the programs covered by these Title IX and mentor-protege programs have in the
DBE program?
regulations. Each such Federal agency
26.37 What are a recipients responsibilities
shall periodically republish the notice for monitoring the performance of other
of covered programs to reflect changes program participants?
in covered programs. Copies of this no-
tice also shall be made available upon Subpart CGoals, Good Faith Efforts, and
request to the Federal agencys office Counting
that enforces Title IX.
26.41 What is the role of the statutory 10
25.605 Enforcement procedures. percent goal in this program?
jdjones on DSK8KYBLC1PROD with CFR
26.43 Can recipients use set-asides or quotas

The investigative, compliance, and as part of this program?
enforcement procedural provisions of 26.45 How do recipients set overall goals?
293
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26.1 49 CFR Subtitle A (10110 Edition)
26.47 Can recipients be penalized for failing APPENDIX B TO PART 26UNIFORM REPORT OF
to meet overall goals? DBE AWARDS OR COMMITMENTS AND PAY-
26.49 How are overall goals established for MENTS FORM
transit vehicle manufacturers? APPENDIX C TO PART 26DBE BUSINESS DE-
26.51 What means do recipients use to meet VELOPMENT PROGRAM GUIDELINES
overall goals? APPENDIX D TO PART 26MENTOR-PROTEGE
26.53 What are the good faith efforts proce- PROGRAM GUIDELINES
dures recipients follow in situations APPENDIX E TO PART 26INDIVIDUAL DETER-
where there are contract goals? MINATIONS OF SOCIAL AND ECONOMIC DIS-
26.55 How is DBE participation counted to- ADVANTAGE
ward goals? APPENDIX F TO PART 26UNIFORM CERTIFI-
CATION APPLICATION FORM
Subpart DCertification Standards AUTHORITY: 23 U.S.C. 324; 42 U.S.C. 2000d, et
26.61 How are burdens of proof allocated in seq.; 49 U.S.C 1615, 47107, 47113, 47123; Sec.
the certification process? 1101(b), Pub. L. 105178, 112 Stat. 107, 113.
26.63 What rules govern group membership SOURCE: 64 FR 5126, Feb. 2, 1999, unless oth-
determinations? erwise noted.
26.65 What rules govern business size deter-
minations?
26.67 What rules determine social and eco- Subpart AGeneral
nomic disadvantage?
26.69 What rules govern determinations of 26.1 What are the objectives of this
ownership? part?
26.71 What rules govern determinations con- This part seeks to achieve several ob-
cerning control? jectives:
26.73 What are other rules affecting certifi- (a) To ensure nondiscrimination in
cation?
the award and administration of DOT-
Subpart ECertification Procedures assisted contracts in the Departments
highway, transit, and airport financial
26.81 What are the requirements for Unified assistance programs;
Certification Programs? (b) To create a level playing field on
26.83 What procedures do recipients follow which DBEs can compete fairly for
in making certification decisions?
DOT-assisted contracts;
26.84 How do recipients process applications
submitted pursuant to the DOT/SBA (c) To ensure that the Departments
MOU? DBE program is narrowly tailored in
26.85 How do recipients respond to requests accordance with applicable law;
from DBE-certified firms or the SBA (d) To ensure that only firms that
made pursuant to the DOT/SBA MOU? fully meet this parts eligibility stand-
26.86 What rules govern recipients denials ards are permitted to participate as
of initial requests for certification? DBEs;
26.87 What procedures does a recipient use (e) To help remove barriers to the
to remove a DBEs eligibility?
26.89 What is the process for certification
participation of DBEs in DOT-assisted
appeals to the Department of Transpor- contracts;
tation? (f) To assist the development of firms
26.91 What actions do recipients take fol- that can compete successfully in the
lowing DOT certification appeal deci- marketplace outside the DBE program;
sions? and
(g) To provide appropriate flexibility
Subpart FCompliance and Enforcement to recipients of Federal financial as-
26.101 What compliance procedures apply to sistance in establishing and providing
recipients? opportunities for DBEs.
26.103 What enforcement actions apply in
FHWA and FTA programs? 26.3 To whom does this part apply?
26.105 What enforcement actions apply in (a) If you are a recipient of any of the
FAA programs?
26.107 What enforcement actions apply to
following types of funds, this part ap-
firms participating in the DBE program? plies to you:
26.109 What are the rules governing infor- (1) Federal-aid highway funds author-
mation, confidentiality, cooperation, and ized under Titles I (other than Part B)
intimidation or retaliation? and V of the Intermodal Surface Trans-

APPENDIX A TO PART 26GUIDANCE CON- portation Efficiency Act of 1991
CERNING GOOD FAITH EFFORTS (ISTEA), Pub. L. 102240, 105 Stat. 1914,
294
Office of the Secretary of Transportation 26.5
or Titles I, III, and V of the Transpor- of a minimum blood quantum, any cit-
tation Equity Act for the 21st Century izen whom a Native village or Native
(TEA21), Pub. L. 105178, 112 Stat. 107. group regards as an Alaska Native if
(2) Federal transit funds authorized their father or mother is regarded as
by Titles I, III, V and VI of ISTEA, an Alaska Native.
Pub. L. 102240 or by Federal transit Alaska Native Corporation (ANC)
laws in Title 49, U.S. Code, or Titles I, means any Regional Corporation, Vil-
III, and V of the TEA21, Pub. L. 105 lage Corporation, Urban Corporation,
178. or Group Corporation organized under
(3) Airport funds authorized by 49 the laws of the State of Alaska in ac-
U.S.C. 47101, et seq. cordance with the Alaska Native
(b) [Reserved] Claims Settlement Act, as amended (43
(c) If you are letting a contract, and
U.S.C. 1601, et seq.).
that contract is to be performed en-
Compliance means that a recipient
tirely outside the United States, its
territories and possessions, Puerto has correctly implemented the require-
Rico, Guam, or the Northern Marianas ments of this part.
Islands, this part does not apply to the Contract means a legally binding re-
contract. lationship obligating a seller to furnish
(d) If you are letting a contract in supplies or services (including, but not
which DOT financial assistance does limited to, construction and profes-
not participate, this part does not sional services) and the buyer to pay
apply to the contract. for them. For purposes of this part, a
lease is considered to be a contract.
26.5 What do the terms used in this Contractor means one who partici-
part mean? pates, through a contract or sub-
Affiliation has the same meaning the contract (at any tier), in a DOT-as-
term has in the Small Business Admin- sisted highway, transit, or airport pro-
istration (SBA) regulations, 13 CFR gram.
part 121. Department or DOT means the U.S.
(1) Except as otherwise provided in 13 Department of Transportation, includ-
CFR part 121, concerns are affiliates of ing the Office of the Secretary, the
each other when, either directly or in- Federal Highway Administration
directly: (FHWA), the Federal Transit Adminis-
(i) One concern controls or has the tration (FTA), and the Federal Avia-
power to control the other; or tion Administration (FAA).
(ii) A third party or parties controls Disadvantaged business enterprise or
or has the power to control both; or DBE means a for-profit small business
(iii) An identity of interest between concern
or among parties exists such that af-
(1) That is at least 51 percent owned
filiation may be found.
by one or more individuals who are
(2) In determining whether affiliation
both socially and economically dis-
exists, it is necessary to consider all
advantaged or, in the case of a corpora-
appropriate factors, including common
tion, in which 51 percent of the stock is
ownership, common management, and
contractual relationships. Affiliates owned by one or more such individuals;
must be considered together in deter- and
mining whether a concern meets small (2) Whose management and daily
business size criteria and the statutory business operations are controlled by
cap on the participation of firms in the one or more of the socially and eco-
DBE program. nomically disadvantaged individuals
Alaska Native means a citizen of the who own it.
United States who is a person of one- DOT-assisted contract means any con-
fourth degree or more Alaskan Indian tract between a recipient and a con-
(including Tsimshian Indians not en- tractor (at any tier) funded in whole or
rolled in the Metlaktla Indian Commu- in part with DOT financial assistance,
nity), Eskimo, or Aleut blood, or a including letters of credit or loan guar-

combination of those bloodlines. The antees, except a contract solely for the
term includes, in the absence of proof purchase of land.
295
DOT/SBA Memorandum of Under- ians, and whose business activities will

standing or MOU, refers to the agree- principally benefit such Native Hawai-
ment signed on November 23, 1999, be- ians.
tween the Department of Transpor- Noncompliance means that a recipient
tation (DOT) and the Small Business has not correctly implemented the re-
Administration (SBA) streamlining quirements of this part.
certification procedures for participa- Operating Administration or OA means
tion in SBAs 8(a) Business Develop- any of the following parts of DOT: the
ment (8(a) BD) and Small Disadvan- Federal Aviation Administration
taged Business (SDB) programs, and (FAA), Federal Highway Administra-
DOTs Disadvantaged Business Enter- tion (FHWA), and Federal Transit Ad-
prise (DBE) program for small and dis- ministration (FTA). The Adminis-
advantaged businesses. trator of an operating administration
Good faith efforts means efforts to includes his or her designees.
achieve a DBE goal or other require- Personal net worth means the net
ment of this part which, by their scope, value of the assets of an individual re-
intensity, and appropriateness to the maining after total liabilities are de-
objective, can reasonably be expected ducted. An individuals personal net
to fulfill the program requirement. worth does not include: The individ-
Immediate family member means fa- uals ownership interest in an appli-
ther, mother, husband, wife, son, cant or participating DBE firm; or the
daughter, brother, sister, grandmother, individuals equity in his or her pri-
grandfather, grandson, granddaughter, mary place of residence. An individ-
mother-in-law, or father-in-law. uals personal net worth includes only
Indian tribe means any Indian tribe, his or her own share of assets held
band, nation, or other organized group jointly or as community property with
or community of Indians, including the individuals spouse.
any ANC, which is recognized as eligi- Primary industry classification means
ble for the special programs and serv- the North American Industrial Classi-
ices provided by the United States to fication System (NAICS) designation
Indians because of their status as Indi- which best describes the primary busi-
ans, or is recognized as such by the ness of a firm. The NAICS is described
State in which the tribe, band, nation, in the North American Industry Classi-
group, or community resides. See defi- fication ManualUnited States, 1997
nition of tribally-owned concern in which is available from the National
this section. Technical Information Service, 5285
Joint venture means an association of Port Royal Road, Springfield, VA,
a DBE firm and one or more other 22161; by calling 1 (800) 5536847; or via
firms to carry out a single, for-profit the Internet at: http://www.ntis.gov/
business enterprise, for which the par- product/naics.htm.
ties combine their property, capital, ef- Primary recipient means a recipient
forts, skills and knowledge, and in which receives DOT financial assist-
which the DBE is responsible for a dis- ance and passes some or all of it on to
tinct, clearly defined portion of the another recipient.
work of the contract and whose share Principal place of business means the
in the capital contribution, control, business location where the individuals
management, risks, and profits of the who manage the firms day-to-day op-
joint venture are commensurate with erations spend most working hours and
its ownership interest. where top managements business
Native Hawaiian means any indi- records are kept. If the offices from
vidual whose ancestors were natives, which management is directed and
prior to 1778, of the area which now where business records are kept are in
comprises the State of Hawaii. different locations, the recipient will
Native Hawaiian Organization means determine the principal place of busi-
any community service organization ness for DBE program purposes.
serving Native Hawaiians in the State Program means any undertaking on a
of Hawaii which is a not-for-profit or- recipients part to use DOT financial

ganization chartered by the State of assistance, authorized by the laws to
Hawaii, is controlled by Native Hawai- which this part applies.
296
Race-conscious measure or program is Portuguese culture or origin, regard-

one that is focused specifically on as- less of race;
sisting only DBEs, including women- (iii) Native Americans, which in-
owned DBEs. cludes persons who are American Indi-
Race-neutral measure or program is ans, Eskimos, Aleuts, or Native Hawai-
one that is, or can be, used to assist all ians;
small businesses. For the purposes of (iv) Asian-Pacific Americans,
this part, race-neutral includes gender- which includes persons whose origins
neutrality. are from Japan, China, Taiwan, Korea,
Recipient is any entity, public or pri- Burma (Myanmar), Vietnam, Laos,
vate, to which DOT financial assist- Cambodia (Kampuchea), Thailand, Ma-
ance is extended, whether directly or laysia, Indonesia, the Philippines,
through another recipient, through the Brunei, Samoa, Guam, the U.S. Trust
programs of the FAA, FHWA, or FTA, Territories of the Pacific Islands (Re-
or who has applied for such assistance. public of Palau), the Commonwealth of
Secretary means the Secretary of the Northern Marianas Islands, Macao,
Transportation or his/her designee. Fiji, Tonga, Kirbati, Juvalu, Nauru,
Federated States of Micronesia, or
Set-aside means a contracting prac-
Hong Kong;
tice restricting eligibility for the com-
(v) Subcontinent Asian Americans,
petitive award of a contract solely to
which includes persons whose origins
DBE firms.
are from India, Pakistan, Bangladesh,
Small Business Administration or SBA Bhutan, the Maldives Islands, Nepal or
means the United States Small Busi- Sri Lanka;
ness Administration. (vi) Women;
SBA certified firm refers to firms that (vii) Any additional groups whose
have a current, valid certification from members are designated as socially and
or recognized by the SBA under the economically disadvantaged by the
8(a) BD or SDB programs. SBA, at such time as the SBA designa-
Small business concern means, with re- tion becomes effective.
spect to firms seeking to participate as Tribally-owned concern means any
DBEs in DOT-assisted contracts, a concern at least 51 percent owned by an
small business concern as defined pur- Indian tribe as defined in this section.
suant to section 3 of the Small Busi- You refers to a recipient, unless a
ness Act and Small Business Adminis- statement in the text of this part or
tration regulations implementing it (13 the context requires otherwise (i.e.,
CFR part 121) that also does not exceed You must do XYZ means that recipi-
the cap on average annual gross re- ents must do XYZ).
ceipts specified in 26.65(b).
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR
Socially and economically disadvan- 34570, June 28, 1999; 68 FR 35553, June 16, 2003]
taged individual means any individual
who is a citizen (or lawfully admitted 26.7 What discriminatory actions are
permanent resident) of the United forbidden?
States and who is (a) You must never exclude any per-
(1) Any individual who a recipient son from participation in, deny any
finds to be a socially and economically person the benefits of, or otherwise dis-
disadvantaged individual on a case-by- criminate against anyone in connec-
case basis. tion with the award and performance of
(2) Any individual in the following any contract covered by this part on
groups, members of which are the basis of race, color, sex, or national
rebuttably presumed to be socially and origin.
economically disadvantaged: (b) In administering your DBE pro-
(i) Black Americans, which in- gram, you must not, directly or
cludes persons having origins in any of through contractual or other arrange-
the Black racial groups of Africa; ments, use criteria or methods of ad-
(ii) Hispanic Americans, which in- ministration that have the effect of de-
cludes persons of Mexican, Puerto feating or substantially impairing ac-

Rican, Cuban, Dominican, Central or complishment of the objectives of the
South American, or other Spanish or program with respect to individuals of
297
a particular race, color, sex, or na- (v) The annual gross receipts of the
tional origin. firm. You may obtain this information
by asking each firm to indicate into
26.9 How does the Department issue what gross receipts bracket they fit
guidance and interpretations under (e.g., less than $500,000; $500,000$1 mil-
this part?
lion; $12 million; $25 million; etc.)
(a) Only guidance and interpretations rather than requesting an exact figure
(including interpretations set forth in from the firm.
certification appeal decisions) con- (3) You may acquire the information
sistent with this part 26 and issued for your bidders list in a variety of
after March 4, 1999 express the official ways. For example, you can collect the
positions and views of the Department data from all bidders, before or after
of Transportation or any of its oper- the bid due date. You can conduct a
ating administrations. survey that will result in statistically
(b) The Secretary of Transportation, sound estimate of the universe of DBE
Office of the Secretary of Transpor- and non-DBE contractors and sub-
tation, FHWA, FTA, and FAA may contractors who seek to work on your
issue written interpretations of or Federally-assisted contracts. You may
written guidance concerning this part. combine different data collection ap-
Written interpretations and guidance proaches (e.g., collect name and address
are valid, and express the official posi- information from all bidders, while
tions and views of the Department of conducting a survey with respect to
Transportation or any of its operating age and gross receipts information).
administrations, only if they are issued
over the signature of the Secretary of [64 FR 5126, Feb. 2, 1999, as amended at 65 FR
68951, Nov. 15, 2000]
Transportation or if they contain the
following statement: 26.13 What assurances must recipi-
The General Counsel of the Department of ents and contractors make?
Transportation has reviewed this document (a) Each financial assistance agree-
and approved it as consistent with the lan-
guage and intent of 49 CFR part 26.
ment you sign with a DOT operating
administration (or a primary recipient)
[72 FR 15617, Apr. 2, 2007] must include the following assurance:
26.11 What records do recipients The recipient shall not discriminate on the
keep and report? basis of race, color, national origin, or sex in
the award and performance of any DOT-as-
(a) [Reserved]
sisted contract or in the administration of
(b) You must continue to provide its DBE program or the requirements of 49
data about your DBE program to the CFR part 26. The recipient shall take all nec-
Department as directed by DOT oper- essary and reasonable steps under 49 CFR
ating administrations. part 26 to ensure nondiscrimination in the
(c) You must create and maintain a award and administration of DOT-assisted
bidders list. contracts. The recipients DBE program, as
(1) The purpose of this list is to pro- required by 49 CFR part 26 and as approved
vide you as accurate data as possible by DOT, is incorporated by reference in this
agreement. Implementation of this program
about the universe of DBE and non- is a legal obligation and failure to carry out
DBE contractors and subcontractors its terms shall be treated as a violation of
who seek to work on your Federally-as- this agreement. Upon notification to the re-
sisted contracts for use in helping you cipient of its failure to carry out its ap-
set your overall goals. proved program, the Department may im-
(2) You must obtain the following in- pose sanctions as provided for under part 26
formation about DBE and non-DBE and may, in appropriate cases, refer the mat-
contractors and subcontractors who ter for enforcement under 18 U.S.C. 1001 and/
or the Program Fraud Civil Remedies Act of
seek to work on your Federally-as- 1986 (31 U.S.C. 3801 et seq.).
sisted contracts:
(i) Firm name; (b) Each contract you sign with a
(ii) Firm address; contractor (and each subcontract the
(iii) Firms status as a DBE or non- prime contractor signs with a subcon-
DBE; tractor) must include the following as-
(iv) Age of the firm; and surance:
298
The contractor, sub recipient or subcon- ticipation process and the information
tractor shall not discriminate on the basis of gathered through it.
race, color, national origin, or sex in the per-
formance of this contract. The contractor
(2) Your application must show
shall carry out applicable requirements of 49 that
CFR part 26 in the award and administration (i) There is a reasonable basis to con-
of DOT-assisted contracts. Failure by the clude that you could achieve a level of
contractor to carry out these requirements DBE participation consistent with the
is a material breach of this contract, which
may result in the termination of this con-
objectives of this part using different
tract or such other remedy as the recipient or innovative means other than those
deems appropriate. that are provided in subpart B or C of
this part;
26.15 How can recipients apply for (ii) Conditions in your jurisdiction
exemptions or waivers?
are appropriate for implementing the
(a) You can apply for an exemption proposal;
from any provision of this part. To (iii) Your proposal would prevent dis-
apply, you must request the exemption crimination against any individual or
in writing from the Office of the Sec-
group in access to contracting opportu-
retary of Transportation, FHWA, FTA,
nities or other benefits of the program;
or FAA. The Secretary will grant the
request only if it documents special or and
exceptional circumstances, not likely (iv) Your proposal is consistent with
to be generally applicable, and not con- applicable law and program require-
templated in connection with the rule- ments of the concerned operating ad-
making that established this part, that ministrations financial assistance pro-
make your compliance with a specific gram.
provision of this part impractical. You (3) The Secretary has the authority
must agree to take any steps that the to approve your application. If the Sec-
Department specifies to comply with retary grants your application, you
the intent of the provision from which may administer your DBE program as
an exemption is granted. The Secretary provided in your proposal, subject to
will issue a written response to all ex- the following conditions:
emption requests. (i) DBE eligibility is determined as
(b) You can apply for a waiver of any provided in subparts D and E of this
provision of Subpart B or C of this part part, and DBE participation is counted
including, but not limited to, any pro-
as provided in 26.49;
visions regarding administrative re-
quirements, overall goals, contract (ii) Your level of DBE participation
goals or good faith efforts. Program continues to be consistent with the ob-
waivers are for the purpose of author- jectives of this part;
izing you to operate a DBE program (iii) There is a reasonable limitation
that achieves the objectives of this on the duration of your modified pro-
part by means that may differ from one gram; and
or more of the requirements of Subpart (iv) Any other conditions the Sec-
B or C of this part. To receive a pro- retary makes on the grant of the waiv-
gram waiver, you must follow these er.
procedures: (4) The Secretary may end a program
(1) You must apply through the con- waiver at any time and require you to
cerned operating administration. The comply with this parts provisions. The
application must include a specific pro- Secretary may also extend the waiver,
gram proposal and address how you if he or she determines that all require-
will meet the criteria of paragraph ments of paragraphs (b)(2) and (3) of
(b)(2) of this section. Before submitting this section continue to be met. Any
your application, you must have had such extension shall be for no longer
public participation in developing your
than period originally set for the dura-
proposal, including consultation with
tion of the program.
the DBE community and at least one

public hearing. Your application must
include a summary of the public par-
299
Subpart BAdministrative Re- You must circulate the statement

quirements for DBE Programs throughout your organization and to
for Federally-Assisted Con- the DBE and non-DBE business com-
munities that perform work on your
tracting DOT-assisted contracts.
26.21 Who must have a DBE pro-
gram? 26.25 What is the requirement for a
liaison officer?
(a) If you are in one of these cat-
egories and let DOT-assisted contracts, You must have a DBE liaison officer,
you must have a DBE program meeting who shall have direct, independent ac-
the requirements of this part: cess to your Chief Executive Officer
(1) All FHWA recipients receiving concerning DBE program matters. The
funds authorized by a statute to which liaison officer shall be responsible for
this part applies; implementing all aspects of your DBE
(2) FTA recipients receiving plan- program. You must also have adequate
ning, capital and/or operating assist- staff to administer the program in
ance who will award prime contracts compliance with this part.
(excluding transit vehicle purchases)
exceeding $250,000 in FTA funds in a 26.27 What efforts must recipients
make concerning DBE financial in-
Federal fiscal year; stitutions?
(3) FAA recipients receiving grants
for airport planning or development You must thoroughly investigate the
who will award prime contracts exceed- full extent of services offered by finan-
ing $250,000 in FAA funds in a Federal cial institutions owned and controlled
fiscal year. by socially and economically disadvan-
(b)(1) You must submit a DBE pro- taged individuals in your community
gram conforming to this part by Au- and make reasonable efforts to use
gust 31, 1999 to the concerned operating these institutions. You must also en-
administration (OA). Once the OA has courage prime contractors to use such
approved your program, the approval institutions.
counts for all of your DOT-assisted pro-
grams (except that goals are reviewed 26.29 What prompt payment mecha-
by the particular operating administra- nisms must recipients have?
tion that provides funding for your (a) You must establish, as part of
DOT-assisted contracts). your DBE program, a contract clause
(2) You do not have to submit regular to require prime contractors to pay
updates of your DBE programs, as long subcontractors for satisfactory per-
as you remain in compliance. However, formance of their contracts no later
you must submit significant changes in than 30 days from receipt of each pay-
the program for approval. ment you make to the prime con-
(c) You are not eligible to receive tractor.
DOT financial assistance unless DOT (b) You must ensure prompt and full
has approved your DBE program and payment of retainage from the prime
you are in compliance with it and this contractor to the subcontractor within
part. You must continue to carry out 30 days after the subcontractors work
your program until all funds from DOT is satisfactorily completed. You must
financial assistance have been ex- use one of the following methods to
pended. comply with this requirement:
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR (1) You may decline to hold retainage
34570, June 28, 1999; 65 FR 68951, Nov. 15, 2000] from prime contractors and prohibit
prime contractors from holding
26.23 What is the requirement for a retainage from subcontractors.
policy statement? (2) You may decline to hold retainage
You must issue a signed and dated from prime contractors and require a
policy statement that expresses your contract clause obligating prime con-
commitment to your DBE program, tractors to make prompt and full pay-
states its objectives, and outlines re- ment of any retainage kept by prime
sponsibilities for its implementation. contractor to the subcontractor within
300
30 days after the subcontractors work other contractors are fully and prompt-
is satisfactorily completed. ly paid.
(3) You may hold retainage from [68 FR 35553, June 16, 2003]
prime contractors and provide for
prompt and regular incremental ac- 26.31 What requirements pertain to
ceptances of portions of the prime con- the DBE directory?
tract, pay retainage to prime contrac- You must maintain and make avail-
tors based on these acceptances, and able to interested persons a directory
require a contract clause obligating identifying all firms eligible to partici-
the prime contractor to pay all pate as DBEs in your program. In the
retainage owed to the subcontractor listing for each firm, you must include
for satisfactory completion of the ac- its address, phone number, and the
cepted work within 30 days after your types of work the firm has been cer-
payment to the prime contractor. tified to perform as a DBE. You must
(c) For purposes of this section, a revise your directory at least annually
subcontractors work is satisfactorily and make updated information avail-
completed when all the tasks called for able to contractors and the public on
in the subcontract have been accom- request.
plished and documented as required by
the recipient. When a recipient has 26.33 What steps must a recipient
made an incremental acceptance of a take to address overconcentration
of DBEs in certain types of work?
portion of a prime contract, the work
of a subcontractor covered by that ac- (a) If you determine that DBE firms
ceptance is deemed to be satisfactorily are so overconcentrated in a certain
completed. type of work as to unduly burden the
(d) Your DBE program must provide opportunity of non-DBE firms to par-
appropriate means to enforce the re- ticipate in this type of work, you must
quirements of this section. These devise appropriate measures to address
means may include appropriate pen- this overconcentration.
alties for failure to comply, the terms (b) These measures may include the
and conditions of which you set. Your use of incentives, technical assistance,
program may also provide that any business development programs, men-
delay or postponement of payment tor-protege programs, and other appro-
among the parties may take place only priate measures designed to assist
for good cause, with your prior written DBEs in performing work outside of
the specific field in which you have de-
approval.
termined that non-DBEs are unduly
(e) You may also establish, as part of
burdened. You may also consider vary-
your DBE program, any of the fol-
ing your use of contract goals, to the
lowing additional mechanisms to en- extent consistent with 26.51, to unsure
sure prompt payment: that non-DBEs are not unfairly pre-
(1) A contract clause that requires vented from competing for sub-
prime contractors to include in their contracts.
subcontracts language providing that (c) You must obtain the approval of
prime contractors and subcontractors the concerned DOT operating adminis-
will use appropriate alternative dis- tration for your determination of over-
pute resolution mechanisms to resolve concentration and the measures you
payment disputes. You may specify the devise to address it. Once approved, the
nature of such mechanisms. measures become part of your DBE
(2) A contract clause providing that program.
the prime contractor will not be reim-
bursed for work performed by sub- 26.35 What role do business develop-
contractors unless and until the prime ment and mentor-protege programs
contractor ensures that the sub- have in the DBE program?
contractors are promptly paid for the (a) You may or, if an operating ad-
work they have performed. ministration directs you to, you must
(3) Other mechanisms, consistent establish a DBE business development

with this part and applicable state and program (BDP) to assist firms in gain-
local law, to ensure that DBEs and ing the ability to compete successfully
301
in the marketplace outside the DBE forth these mechanisms in your DBE
program. You may require a DBE firm, program.
as a condition of receiving assistance (b) Your DBE program must also in-
through the BDP, to agree to termi- clude a monitoring and enforcement
nate its participation in the DBE pro- mechanism to ensure that work com-
gram after a certain time has passed or mitted to DBEs at contract award is
certain objectives have been reached. actually performed by DBEs.
See Appendix C of this part for guid- (c) This mechanism must provide for
ance on administering BDP programs. a running tally of actual DBE attain-
(b) As part of a BDP or separately, ments (e.g., payments actually made to
you may establish a mentor-protege DBE firms), including a means of com-
program, in which another DBE or non- paring these attainments to commit-
DBE firm is the principal source of ments. In your reports of DBE partici-
business development assistance to a pation to the Department, you must
DBE firm. display both commitments and attain-
(1) Only firms you have certified as ments.
DBEs before they are proposed for par- [64 FR 5126, Feb. 2, 1999, as amended at 65 FR
ticipation in a mentor-protege program 68951, Nov. 15, 2000; 68 FR 35554, June 16, 2003]
are eligible to participate in the men-
tor-protege program. Subpart CGoals, Good Faith
(2) During the course of the mentor- Efforts, and Counting
protege relationship, you must:
(i) Not award DBE credit to a non- 26.41 What is the role of the statu-
DBE mentor firm for using its own tory 10 percent goal in this pro-
protege firm for more than one half of gram?
its goal on any contract let by the re- (a) The statutes authorizing this pro-
cipient; and gram provide that, except to the extent
(ii) Not award DBE credit to a non- the Secretary determines otherwise,
DBE mentor firm for using its own not less than 10 percent of the author-
protege firm for more than every other ized funds are to be expended with
contract performed by the protege DBEs.
firm. (b) This 10 percent goal is an aspira-
(3) For purposes of making deter- tional goal at the national level, which
minations of business size under this the Department uses as a tool in evalu-
part, you must not treat protege firms ating and monitoring DBEs opportuni-
as affiliates of mentor firms, when both ties to participate in DOT-assisted con-
firms are participating under an ap- tracts.
proved mentor-protege program. See (c) The national 10 percent goal does
Appendix D of this part for guidance not authorize or require recipients to
concerning the operation of mentor- set overall or contract goals at the 10
protege programs. percent level, or any other particular
(c) Your BDPs and mentor-protege level, or to take any special adminis-
programs must be approved by the con- trative steps if their goals are above or
cerned operating administration before below 10 percent.
you implement them. Once approved,
they become part of your DBE pro- 26.43 Can recipients use set-asides or
quotas as part of this program?
gram.
(a) You are not permitted to use
26.37 What are a recipients respon- quotas for DBEs on DOT-assisted con-
sibilities for monitoring the per- tracts subject to this part.
formance of other program partici- (b) You may not set-aside contracts
pants? for DBEs on DOT-assisted contracts
(a) You must implement appropriate subject to this part, except that, in
mechanisms to ensure compliance with limited and extreme circumstances,
the parts requirements by all program you may use set-asides when no other
participants (e.g., applying legal and method could be reasonably expected

contract remedies available under Fed- to redress egregious instances of dis-
eral, state and local law). You must set crimination.
302
26.45 How do recipients set overall ing and able businesses available in
goals? your market that perform work in the
(a)(1) Except as provided in para- same NAICS codes. (Information about
graph (a)(2) of this section, you must the CBP data base may be obtained
set an overall goal for DBE participa- from the Census Bureau at their web
tion in your DOT-assisted contracts. site, www.census.gov/epcd/cbp/view/
(2) If you are a FTA or FAA recipient cbpview.html.) Divide the number of
who reasonably anticipates awarding DBEs by the number of all businesses
(excluding transit vehicle purchases) to derive a base figure for the relative
$250,000 or less in FTA or FAA funds in availability of DBEs in your market.
prime contracts in a Federal fiscal (2) Use a bidders list. Determine the
year, you are not required to develop number of DBEs that have bid or
overall goals for FTA or FAA respec- quoted on your DOT-assisted prime
tively for that fiscal year. However, if contracts or subcontracts in the pre-
you have an existing DBE program, it vious year. Determine the number of
must remain in effect and you must all businesses that have bid or quoted
seek to fulfill the objectives outlined on prime or subcontracts in the same
in 26.1. time period. Divide the number of DBE
(b) Your overall goal must be based bidders and quoters by the number for
on demonstrable evidence of the avail- all businesses to derive a base figure
ability of ready, willing and able DBEs for the relative availability of DBEs in
relative to all businesses ready, willing your market.
and able to participate on your DOT- (3) Use data from a disparity study. Use
assisted contracts (hereafter, the rel- a percentage figure derived from data
ative availability of DBEs). The goal in a valid, applicable disparity study.
must reflect your determination of the
(4) Use the goal of another DOT recipi-
level of DBE participation you would
ent. If another DOT recipient in the
expect absent the effects of discrimina-
same, or substantially similar, market
tion. You cannot simply rely on either
has set an overall goal in compliance
the 10 percent national goal, your pre-
with this rule, you may use that goal
vious overall goal or past DBE partici-
as a base figure for your goal.
pation rates in your program without
reference to the relative availability of (5) Alternative methods. You may use
DBEs in your market. other methods to determine a base fig-
(c) Step 1. You must begin your goal ure for your overall goal. Any method-
setting process by determining a base ology you choose must be based on de-
figure for the relative availability of monstrable evidence of local market
DBEs. The following are examples of conditions and be designed to ulti-
approaches that you may take toward mately attain a goal that is rationally
determining a base figure. These exam- related to the relative availability of
ples are provided as a starting point for DBEs in your market.
your goal setting process. Any percent- (d) Step 2. Once you have calculated a
age figure derived from one of these ex- base figure, you must examine all of
amples should be considered a basis the evidence available in your jurisdic-
from which you begin when examining tion to determine what adjustment, if
all evidence available in your jurisdic- any, is needed to the base figure in
tion. These examples are not intended order to arrive at your overall goal.
as an exhaustive list. Other methods or (1) There are many types of evidence
combinations of methods to determine that must be considered when adjust-
a base figure may be used, subject to ing the base figure. These include:
approval by the concerned operating (i) The current capacity of DBEs to
administration. perform work in your DOT-assisted
(1) Use DBE Directories and Census Bu- contracting program, as measured by
reau Data. Determine the number of the volume of work DBEs have per-
ready, willing and able DBEs in your formed in recent years;
market from your DBE directory. (ii) Evidence from disparity studies
Using the Census Bureaus County conducted anywhere within your juris-
Business Pattern (CBP) data base, de- diction, to the extent it is not already
termine the number of all ready, will- accounted for in your base figure; and
303
(iii) If your base figure is the goal of ating administration for approval any
another recipient, you must adjust it significant adjustment you make to
for differences in your local market your goal during the three-year period
and your contracting program. based on changed circumstances. The
(2) If available, you must consider operating administration may direct
evidence from related fields that affect you to undertake a review of your goal
the opportunities for DBEs to form, if necessary to ensure that the goal
grow and compete. These include, but continues to fit your circumstances ap-
are not limited to: propriately.
(i) Statistical disparities in the abil- (2) If you are an FHWA, FTA, or FAA
ity of DBEs to get the financing, bond- recipient and set your overall goal on a
ing and insurance required to partici- project or grant basis, you must sub-
pate in your program; mit the goal for review at a time deter-
(ii) Data on employment, self-em- mined by the FHWA, FTA, or FAA Ad-
ployment, education, training and ministrator.
union apprenticeship programs, to the (3) Timely submission and operating
extent you can relate it to the opportu- administration approval of your over-
nities for DBEs to perform in your pro- all goal is a condition of eligibility for
gram. DOT financial assistance.
(3) If you attempt to make an adjust- (4) If you fail to establish and imple-
ment to your base figure to account for
ment goals as provided in this section,
the continuing effects of past discrimi-
you are not in compliance with this
nation (often called the but for fac-
part. If you establish and implement
tor) or the effects of an ongoing DBE
goals in a way different from that pro-
program, the adjustment must be based
vided in this part, you are not in com-
on demonstrable evidence that is logi-
pliance with this part. If you fail to
cally and directly related to the effect
comply with this requirement, you are
for which the adjustment is sought.
not eligible to receive DOT financial
(e) Once you have determined a per-
assistance.
centage figure in accordance with para-
graphs (c) and (d) of this section, you (g) In establishing an overall goal,
should express your overall goal as fol- you must provide for public participa-
lows: tion. This public participation must in-
(1) If you are an FHWA recipient, as clude:
a percentage of all Federal-aid highway (1) Consultation with minority, wom-
funds you will expend in FHWA-as- ens and general contractor groups,
sisted contracts in the forthcoming community organizations, and other
three fiscal years. officials or organizations which could
(2) If you are an FTA or FAA recipi- be expected to have information con-
ent, as a percentage of all FTA or FAA cerning the availability of disadvan-
funds (exclusive of FTA funds to be taged and non-disadvantaged busi-
used for the purchase of transit vehi- nesses, the effects of discrimination on
cles) that you will expend in FTA- or opportunities for DBEs, and your ef-
FAA-assisted contracts in the three forts to establish a level playing field
forthcoming fiscal years. for the participation of DBEs.
(3) In appropriate cases, the FHWA, (2) A published notice announcing
FTA or FAA Administrator may per- your proposed overall goal, informing
mit you to express your overall goal as the public that the proposed goal and
a percentage of funds for a particular its rationale are available for inspec-
grant or project or group of grants and/ tion during normal business hours at
or projects. your principal office for 30 days fol-
(f)(1) If you set overall goals on a fis- lowing the date of the notice, and in-
cal year basis, you must submit them forming the public that you and the
to the applicable DOT operating ad- Department will accept comments on
ministration by August 1 at three-year the goals for 45 days from the date of
intervals, based on a schedule estab- the notice. The notice must include ad-
lished by the FHWA, FTA, or FAA, as dresses to which comments may be

applicable, and posted on that agencys sent, and you must publish it in gen-
Web site. You must submit to the oper- eral circulation media and available
304
minority-focused media and trade asso- proval of overall goals apply to you as
ciation publications. they do to recipients.
(h) Your overall goals must provide (c) As a transit vehicle manufacturer,
for participation by all certified DBEs you may make the certification re-
and must not be subdivided into group- quired by this section if you have sub-
specific goals. mitted the goal this section requires
and FTA has approved it or not dis-
[64 FR 5126, Feb. 2, 1999, as amended at 64 FR approved it.
34570, June 28, 1999; 65 FR 68951, Nov. 15, 2000;
(d) As a recipient, you may, with
68 FR 35553, June 16, 2003; 75 FR 5536, Feb. 3,
2010] FTA approval, establish project-spe-
cific goals for DBE participation in the
26.47 Can recipients be penalized for procurement of transit vehicles in lieu
failing to meet overall goals? of complying through the procedures of
this section.
(a) You cannot be penalized, or treat- (e) If you are an FHWA or FAA re-
ed by the Department as being in non- cipient, you may, with FHWA or FAA
compliance with this rule, because approval, use the procedures of this
your DBE participation falls short of section with respect to procurements
your overall goal, unless you have of vehicles or specialized equipment. If
failed to administer your program in you choose to do so, then the manufac-
good faith. turers of this equipment must meet the
(b) If you do not have an approved same requirements (including goal ap-
DBE program or overall goal, or if you proval by FHWA or FAA) as transit ve-
fail to implement your program in hicle manufacturers must meet in
good faith, you are in noncompliance FTA-assisted procurements.
with this part.
26.51 What means do recipients use
26.49 How are overall goals estab- to meet overall goals?
lished for transit vehicle manufac-
turers? (a) You must meet the maximum fea-
sible portion of your overall goal by
(a) If you are an FTA recipient, you using race-neutral means of facili-
must require in your DBE program tating DBE participation. Race-neutral
that each transit vehicle manufac- DBE participation includes any time a
turer, as a condition of being author- DBE wins a prime contract through
ized to bid or propose on FTA-assisted customary competitive procurement
transit vehicle procurements, certify procedures, is awarded a subcontract
that it has complied with the require- on a prime contract that does not
ments of this section. You do not in- carry a DBE goal, or even if there is a
clude FTA assistance used in transit DBE goal, wins a subcontract from a
vehicle procurements in the base prime contractor that did not consider
amount from which your overall goal is its DBE status in making the award
calculated. (e.g., a prime contractor that uses a
(b) If you are a transit vehicle manu- strict low bid system to award sub-
facturer, you must establish and subcontracts).
mit for FTAs approval an annual over- (b) Race-neutral means include, but
all percentage goal. In setting your are not limited to, the following:
overall goal, you should be guided, to (1) Arranging solicitations, times for
the extent applicable, by the principles the presentation of bids, quantities,
underlying 26.45. The base from which specifications, and delivery schedules
you calculate this goal is the amount in ways that facilitate DBE, and other
of FTA financial assistance included in small businesses, participation (e.g.,
transit vehicle contracts you will per- unbundling large contracts to make
form during the fiscal year in question. them more accessible to small busi-
You must exclude from this base funds nesses, requiring or encouraging prime
attributable to work performed outside contractors to subcontract portions of
the United States and its territories, work that they might otherwise per-
possessions, and commonwealths. The form with their own forces);

requirements and procedures of this (2) Providing assistance in over-
part with respect to submission and ap- coming limitations such as inability to
305
obtain bonding or financing (e.g., by (d) You must establish contract goals
such means as simplifying the bonding to meet any portion of your overall
process, reducing bonding require- goal you do not project being able to
ments, eliminating the impact of sur- meet using race-neutral means.
ety costs from bids, and providing serv- (e) The following provisions apply to
ices to help DBEs, and other small the use of contract goals:
businesses, obtain bonding and financ- (1) You may use contract goals only
ing); on those DOT-assisted contracts that
(3) Providing technical assistance have subcontracting possibilities.
and other services; (2) You are not required to set a con-
(4) Carrying out information and tract goal on every DOT-assisted con-
communications programs on contract. You are not required to set each
tracting procedures and specific con- contract goal at the same percentage
tract opportunities (e.g., ensuring the level as the overall goal. The goal for a
inclusion of DBEs, and other small specific contract may be higher or
businesses, on recipient mailing lists lower than that percentage level of the
for bidders; ensuring the dissemination overall goal, depending on such factors
to bidders on prime contracts of lists of as the type of work involved, the loca-
potential subcontractors; provision of tion of the work, and the availability
information in languages other than of DBEs for the work of the particular
English, where appropriate); contract. However, over the period cov-
ered by your overall goal, you must set
(5) Implementing a supportive serv-
contract goals so that they will cumu-
ices program to develop and improve
latively result in meeting any portion
immediate and long-term business
of your overall goal you do not project
management, record keeping, and fi-
being able to meet through the use of
nancial and accounting capability for
race-neutral means.
DBEs and other small businesses; (3) Operating administration ap-
(6) Providing services to help DBEs, proval of each contract goal is not nec-
and other small businesses, improve essarily required. However, operating
long-term development, increase op- administrations may review and ap-
portunities to participate in a variety prove or disapprove any contract goal
of kinds of work, handle increasingly you establish.
significant projects, and achieve even- (4) Your contract goals must provide
tual self-sufficiency; for participation by all certified DBEs
(7) Establishing a program to assist and must not be subdivided into group-
new, start-up firms, particularly in specific goals.
fields in which DBE participation has (f) To ensure that your DBE program
historically been low; continues to be narrowly tailored to
(8) Ensuring distribution of your DBE overcome the effects of discrimination,
directory, through print and electronic you must adjust your use of contract
means, to the widest feasible universe goals as follows:
of potential prime contractors; and (1) If your approved projection under
(9) Assisting DBEs, and other small paragraph (c) of this section estimates
businesses, to develop their capability that you can meet your entire overall
to utilize emerging technology and goal for a given year through race-neu-
conduct business through electronic tral means, you must implement your
media. program without setting contract goals
(c) Each time you submit your over- during that year.
all goal for review by the concerned op- Example to paragraph (f)(1): Your overall
erating administration, you must also goal for Year I is 12 percent. You estimate
submit your projection of the portion that you can obtain 12 percent or more DBE
of the goal that you expect to meet participation through the use of race-neutral
through race-neutral means and your measures, without any use of contract goals.
basis for that projection. This projec- In this case, you do not set any contract
tion is subject to approval by the con- goals for the contracts that will be per-
formed in Year I.
cerned operating administration, in

conjunction with its review of your (2) If, during the course of any year
overall goal. in which you are using contract goals,
306
you determine that you will exceed (4) If you obtain DBE participation
your overall goal, you must reduce or that exceeds your overall goal in two
eliminate the use of contract goals to consecutive years through the use of
the extent necessary to ensure that the contract goals (i.e., not through the use
use of contract goals does not result in of race-neutral means alone), you must
exceeding the overall goal. If you de- reduce your use of contract goals pro-
termine that you will fall short of your portionately in the following year.
overall goal, then you must make ap- Example to paragraph (f)(4): In Years I and
propriate modifications in your use of II, your overall goal is 12 percent, and you
race-neutral and/or race-conscious obtain 14 and 16 percent DBE participation,
measures to allow you to meet the respectively. You have exceeded your goals
overall goal. over the two-year period by an average of 25
percent. In Year III, your overall goal is
Example to paragraph (f)(2): In Year II, your again 12 percent, and your paragraph (c) pro-
overall goal is 12 percent. You have esti- jection estimates that you will obtain 4 per-
mated that you can obtain 5 percent DBE cent DBE participation through race-neutral
participation through use of race-neutral means and 8 percent through contract goals.
measures. You therefore plan to obtain the You then reduce the contract goal projection
remaining 7 percent participation through by 25 percent (i.e., from 8 to 6 percent) and
use of DBE goals. By September, you have set contract goals accordingly during the
already obtained 11 percent DBE participa- year. If in Year III you obtain 11 percent par-
tion for the year. For contracts let during ticipation, you do not use this contract goal
the remainder of the year, you use contract adjustment mechanism for Year IV, because
goals only to the extent necessary to obtain there have not been two consecutive years of
an additional one percent DBE participation. exceeding overall goals.
However, if you determine in September that
your participation for the year is likely to be (g) In any year in which you project
only 8 percent total, then you would increase meeting part of your goal through
your use of race-neutral and/or race-con- race-neutral means and the remainder
scious means during the remainder of the through contract goals, you must
year in order to achieve your overall goal. maintain data separately on DBE
(3) If the DBE participation you have achievements in those contracts with
obtained by race-neutral means alone and without contract goals, respec-
meets or exceeds your overall goals for tively. You must report this data to
two consecutive years, you are not re- the concerned operating administra-
quired to make a projection of the tion as provided in 26.11.
amount of your goal you can meet
26.53 What are the good faith efforts
using such means in the next year. You procedures recipients follow in situ-
do not set contract goals on any con- ations where there are contract
tracts in the next year. You continue goals?
using only race-neutral means to meet
your overall goals unless and until you (a) When you have established a DBE
do not meet your overall goal for a contract goal, you must award the con-
year. tract only to a bidder/offeror who
makes good faith efforts to meet it.
Example to paragraph (f)(3): Your overall You must determine that a bidder/of-
goal for Years I and Year II is 10 percent. The feror has made good faith efforts if the
DBE participation you obtain through race- bidder/offeror does either of the fol-
neutral measures alone is 10 percent or more lowing things:
in each year. (For this purpose, it does not
matter whether you obtained additional DBE (1) Documents that it has obtained
participation through using contract goals enough DBE participation to meet the
in these years.) In Year III and following goal; or
years, you do not need to make a projection (2) Documents that it made adequate
under paragraph (c) of this section of the good faith efforts to meet the goal,
portion of your overall goal you expect to even though it did not succeed in ob-
meet using race-neutral means. You simply taining enough DBE participation to
use race-neutral means to achieve your over-
do so. If the bidder/offeror does docu-
all goals. However, if in Year VI your DBE
participation falls short of your overall goal, ment adequate good faith efforts, you
then you must make a paragraph (c) projec- must not deny award of the contract on
tion for Year VII and, if necessary, resume the basis that the bidder/offeror failed
use of contract goals in that year. to meet the goal. See Appendix A of
307
this part for guidance in determining (1) As part of this reconsideration,

the adequacy of a bidder/offerors good the bidder/offeror must have the oppor-
faith efforts. tunity to provide written documenta-
(b) In your solicitations for DOT-as- tion or argument concerning the issue
sisted contracts for which a contract of whether it met the goal or made ade-
goal has been established, you must re- quate good faith efforts to do so.
quire the following: (2) Your decision on reconsideration
(1) Award of the contract will be con- must be made by an official who did
ditioned on meeting the requirements not take part in the original deter-
of this section; mination that the bidder/offeror failed
(2) All bidders/offerors will be re- to meet the goal or make adequate
quired to submit the following infor- good faith efforts to do so.
mation to the recipient, at the time (3) The bidder/offeror must have the
provided in paragraph (b)(3) of this sec- opportunity to meet in person with
tion: your reconsideration official to discuss
(i) The names and addresses of DBE the issue of whether it met the goal or
firms that will participate in the con- made adequate good faith efforts to do
tract; so.
(ii) A description of the work that (4) You must send the bidder/offeror a
each DBE will perform; written decision on reconsideration,
(iii) The dollar amount of the partici- explaining the basis for finding that
pation of each DBE firm participating; the bidder did or did not meet the goal
(iv) Written documentation of the or make adequate good faith efforts to
bidder/offerors commitment to use a do so.
DBE subcontractor whose participation
(5) The result of the reconsideration
it submits to meet a contract goal;
process is not administratively appeal-
(v) Written confirmation from the
able to the Department of Transpor-
DBE that it is participating in the con-
tation.
tract as provided in the prime contrac-
tors commitment; and (e) In a design-build or turnkey
(vi) If the contract goal is not met, contracting situation, in which the re-
evidence of good faith efforts (see Ap- cipient lets a master contract to a con-
pendix A of this part); and tractor, who in turn lets subsequent
(3) At your discretion, the bidder/of- subcontracts for the work of the
feror must present the information re- project, a recipient may establish a
quired by paragraph (b)(2) of this sec- goal for the project. The master con-
tion tractor then establishes contract goals,
(i) Under sealed bid procedures, as a as appropriate, for the subcontracts it
matter of responsiveness, or with ini- lets. Recipients must maintain over-
tial proposals, under contract negotia- sight of the master contractors activi-
tion procedures; or ties to ensure that they are conducted
(ii) At any time before you commit consistent with the requirements of
yourself to the performance of the con- this part.
tract by the bidder/offeror, as a matter (f)(1) You must require that a prime
of responsibility. contractor not terminate for conven-
(c) You must make sure all informa- ience a DBE subcontractor listed in re-
tion is complete and accurate and ade- sponse to paragraph (b)(2) of this sec-
quately documents the bidder/offerors tion (or an approved substitute DBE
good faith efforts before committing firm) and then perform the work of the
yourself to the performance of the con- terminated subcontract with its own
tract by the bidder/offeror. forces or those of an affiliate, without
(d) If you determine that the appar- your prior written consent.
ent successful bidder/offeror has failed (2) When a DBE subcontractor is ter-
to meet the requirements of paragraph minated, or fails to complete its work
(a) of this section, you must, before on the contract for any reason, you
awarding the contract, provide the bid- must require the prime contractor to
der/offeror an opportunity for adminis- make good faith efforts to find another
trative reconsideration. DBE subcontractor to substitute for
308
the original DBE. These good faith ef- work may be counted toward DBE
forts shall be directed at finding an- goals only if the DBEs subcontractor
other DBE to perform at least the same is itself a DBE. Work that a DBE sub-
amount of work under the contract as contracts to a non-DBE firm does not
the DBE that was terminated, to the count toward DBE goals.
extent needed to meet the contract (b) When a DBE performs as a partic-
goal you established for the procure- ipant in a joint venture, count a por-
ment. tion of the total dollar value of the
(3) You must include in each prime contract equal to the distinct, clearly
contract a provision for appropriate ad- defined portion of the work of the con-
ministrative remedies that you will in- tract that the DBE performs with its
voke if the prime contractor fails to own forces toward DBE goals.
comply with the requirements of this (c) Count expenditures to a DBE con-
section. tractor toward DBE goals only if the
(g) You must apply the requirements DBE is performing a commercially use-
of this section to DBE bidders/offerors ful function on that contract.
for prime contracts. In determining (1) A DBE performs a commercially
whether a DBE bidder/offeror for a useful function when it is responsible
prime contract has met a contract for execution of the work of the con-
goal, you count the work the DBE has tract and is carrying out its respon-
committed to performing with its own
sibilities by actually performing, man-
forces as well as the work that it has
aging, and supervising the work in-
committed to be performed by DBE
volved. To perform a commercially
subcontractors and DBE suppliers.
useful function, the DBE must also be
26.55 How is DBE participation responsible, with respect to materials
counted toward goals? and supplies used on the contract, for
negotiating price, determining quality
(a) When a DBE participates in a con-
and quantity, ordering the material,
tract, you count only the value of the
and installing (where applicable) and
work actually performed by the DBE
paying for the material itself. To de-
toward DBE goals.
(1) Count the entire amount of that termine whether a DBE is performing a
portion of a construction contract (or commercially useful function, you
other contract not covered by para- must evaluate the amount of work sub-
graph (a)(2) of this section) that is per- contracted, industry practices, whether
formed by the DBEs own forces. In- the amount the firm is to be paid under
clude the cost of supplies and materials the contract is commensurate with the
obtained by the DBE for the work of work it is actually performing and the
the contract, including supplies pur- DBE credit claimed for its performance
chased or equipment leased by the DBE of the work, and other relevant factors.
(except supplies and equipment the (2) A DBE does not perform a com-
DBE subcontractor purchases or leases mercially useful function if its role is
from the prime contractor or its affil- limited to that of an extra participant
iate). in a transaction, contract, or project
(2) Count the entire amount of fees or through which funds are passed in
commissions charged by a DBE firm for order to obtain the appearance of DBE
providing a bona fide service, such as participation. In determining whether
professional, technical, consultant, or a DBE is such an extra participant, you
managerial services, or for providing must examine similar transactions,
bonds or insurance specifically re- particularly those in which DBEs do
quired for the performance of a DOT- not participate.
assisted contract, toward DBE goals, (3) If a DBE does not perform or exer-
provided you determine the fee to be cise responsibility for at least 30 per-
reasonable and not excessive as com- cent of the total cost of its contract
pared with fees customarily allowed for with its own work force, or the DBE
similar services. subcontracts a greater portion of the
(3) When a DBE subcontracts part of work of a contract than would be ex-
the work of its contract to another pected on the basis of normal industry
firm, the value of the subcontracted practice for the type of work involved,
309
you must presume that it is not per- priate Department Operating Adminis-
forming a commercially useful func- tration.
tion.
Example to this paragraph (d)(5): DBE Firm
(4) When a DBE is presumed not to be X uses two of its own trucks on a contract.
performing a commercially useful func- It leases two trucks from DBE Firm Y and
tion as provided in paragraph (c)(3) of six trucks from non-DBE Firm Z. DBE credit
this section, the DBE may present evi- would be awarded for the total value of
dence to rebut this presumption. You transportation services provided by Firm X
may determine that the firm is per- and Firm Y, and may also be awarded for the
forming a commercially useful func- total value of transportation services pro-
tion given the type of work involved vided by four of the six trucks provided by
and normal industry practices. Firm Z. In all, full credit would be allowed
for the participation of eight trucks. With
(5) Your decisions on commercially respect to the other two trucks provided by
useful function matters are subject to Firm Z, DBE credit could be awarded only
review by the concerned operating ad- for the fees or commissions pertaining to
ministration, but are not administra- those trucks Firm X receives as a result of
tively appealable to DOT. the lease with Firm Z.
(d) Use the following factors in deter-
(6) For purposes of this paragraph (d),
mining whether a DBE trucking com-
a lease must indicate that the DBE has
pany is performing a commercially
exclusive use of and control over the
useful function:
truck. This does not preclude the
(1) The DBE must be responsible for
leased truck from working for others
the management and supervision of the
during the term of the lease with the
entire trucking operation for which it
consent of the DBE, so long as the
is responsible on a particular contract,
lease gives the DBE absolute priority
and there cannot be a contrived ar-
for use of the leased truck. Leased
rangement for the purpose of meeting
trucks must display the name and
DBE goals.
identification number of the DBE.
(2) The DBE must itself own and op-
erate at least one fully licensed, in- (e) Count expenditures with DBEs for
sured, and operational truck used on materials or supplies toward DBE goals
the contract. as provided in the following:
(3) The DBE receives credit for the (1)(i) If the materials or supplies are
total value of the transportation serv- obtained from a DBE manufacturer,
ices it provides on the contract using count 100 percent of the cost of the ma-
trucks it owns, insures, and operates terials or supplies toward DBE goals.
using drivers it employs. (ii) For purposes of this paragraph
(4) The DBE may lease trucks from (e)(1), a manufacturer is a firm that op-
another DBE firm, including an owner- erates or maintains a factory or estab-
operator who is certified as a DBE. The lishment that produces, on the prem-
DBE who leases trucks from another ises, the materials, supplies, articles,
DBE receives credit for the total value or equipment required under the con-
of the transportation services the les- tract and of the general character de-
see DBE provides on the contract. scribed by the specifications.
(5) The DBE may also lease trucks (2)(i) If the materials or supplies are
from a non-DBE firm, including from purchased from a DBE regular dealer,
an owner-operator. The DBE who count 60 percent of the cost of the ma-
leases trucks from a non-DBE is enti- terials or supplies toward DBE goals.
tled to credit for the total value of (ii) For purposes of this section, a
transportation services provided by regular dealer is a firm that owns, op-
non-DBE lessees not to exceed the erates, or maintains a store, ware-
value of transportation services pro- house, or other establishment in which
vided by DBE-owned trucks on the con- the materials, supplies, articles or
tract. Additional participation by non- equipment of the general character de-
DBE lessees receives credit only for the scribed by the specifications and re-
fee or commission it receives as a required under the contract are bought,
sult of the lease arrangement. If a re- kept in stock, and regularly sold or
cipient chooses this approach, it must leased to the public in the usual course
obtain written consent from the appro- of business.
310
(A) To be a regular dealer, the firm Subpart DCertification Standards

must be an established, regular busi-
ness that engages, as its principal busi- 26.61 How are burdens of proof allo-
ness and under its own name, in the cated in the certification process?
purchase and sale or lease of the prod- (a) In determining whether to certify
ucts in question. a firm as eligible to participate as a
(B) A person may be a regular dealer DBE, you must apply the standards of
in such bulk items as petroleum prod- this subpart.
ucts, steel, cement, gravel, stone, or (b) The firm seeking certification has
asphalt without owning, operating, or the burden of demonstrating to you, by
maintaining a place of business as pro- a preponderance of the evidence, that
vided in this paragraph (e)(2)(ii) if the it meets the requirements of this sub-
person both owns and operates dis- part concerning group membership or
tribution equipment for the products. individual disadvantage, business size,
Any supplementing of regular dealers ownership, and control.
own distribution equipment shall be by (c) You must rebuttably presume
a long-term lease agreement and not that members of the designated groups
on an ad hoc or contract-by-contract identified in 26.67(a) are socially and
basis. economically disadvantaged. This
(C) Packagers, brokers, manufactur- means they do not have the burden of
ers representatives, or other persons proving to you that they are socially
who arrange or expedite transactions and economically disadvantaged. In
are not regular dealers within the order to obtain the benefit of the re-
meaning of this paragraph (e)(2). buttable presumption, individuals must
(3) With respect to materials or sup- submit a signed, notarized statement
plies purchased from a DBE which is that they are a member of one of the
neither a manufacturer nor a regular groups in 26.67(a). Applicants do have
dealer, count the entire amount of fees the obligation to provide you informa-
or commissions charged for assistance tion concerning their economic dis-
in the procurement of the materials advantage (see 26.67).
and supplies, or fees or transportation (d) Individuals who are not presumed
charges for the delivery of materials or to be socially and economically dis-
supplies required on a job site, toward advantaged, and individuals concerning
DBE goals, provided you determine the whom the presumption of disadvantage
fees to be reasonable and not excessive has been rebutted, have the burden of
as compared with fees customarily al- proving to you, by a preponderance of
lowed for similar services. Do not the evidence, that they are socially and
count any portion of the cost of the economically disadvantaged. (See Ap-
materials and supplies themselves to- pendix E of this part.)
ward DBE goals, however. (e) You must make determinations
(f) If a firm is not currently certified concerning whether individuals and
as a DBE in accordance with the stand- firms have met their burden of dem-
ards of subpart D of this part at the onstrating group membership, owner-
time of the execution of the contract, ship, control, and social and economic
do not count the firms participation disadvantage (where disadvantage
toward any DBE goals, except as pro- must be demonstrated on an individual
vided for in 26.87(i)). basis) by considering all the facts in
(g) Do not count the dollar value of the record, viewed as a whole.
work performed under a contract with [64 FR 5126, Feb. 2, 1999, as amended at 68 FR
a firm after it has ceased to be cer- 35554, June 16, 2003]
tified toward your overall goal.
(h) Do not count the participation of 26.63 What rules govern group mem-
a DBE subcontractor toward a contrac- bership determinations?
tors final compliance with its DBE ob- (a)(1) If, after reviewing the signed
ligations on a contract until the notarized statement of membership in
amount being counted has actually a presumptively disadvantaged group
been paid to the DBE.
(see 26.61(c)), you have a well founded

[64 FR 5126, Feb. 2, 1999, as amended at 65 FR reason to question the individuals
68951, Nov. 15, 2000; 68 FR 35554, June 16, 2003] claim of membership in that group,
311
you must require the individual to (see 13 CFR 121.402), over the firms pre-
present additional evidence that he or vious three fiscal years, in excess of
she is a member of the group. $22.41 million.
(2) You must provide the individual a (c) The Department adjusts the num-
written explanation of your reasons for ber in paragraph (b) of this section an-
questioning his or her group member- nually using the Department of Com-
ship and a written request for addi- merce price deflators for purchases by
tional evidence as outlined in para- State and local governments as the
graph (b) of this section. basis for this adjustment.
(3) In implementing this section, you
must take special care to ensure that [74 FR 15224, Apr. 3, 2009]
you do not impose a disproportionate
26.67 What rules determine social
burden on members of any particular and economic disadvantage?
designated group. Imposing a dis-
proportionate burden on members of a (a) Presumption of disadvantage. (1)
particular group could violate 26.7(b) You must rebuttably presume that
and/or Title VI of the Civil Rights Act citizens of the United States (or law-
of 1964 and 49 CFR part 21. fully admitted permanent residents)
(b) In making such a determination, who are women, Black Americans, His-
you must consider whether the person panic Americans, Native Americans,
has held himself out to be a member of Asian-Pacific Americans, Subcontinent
the group over a long period of time Asian Americans, or other minorities
prior to application for certification found to be disadvantaged by the SBA,
and whether the person is regarded as a are socially and economically dis-
member of the group by the relevant advantaged individuals. You must re-
community. You may require the ap- quire applicants to submit a signed, no-
plicant to produce appropriate docu- tarized certification that each pre-
mentation of group membership. sumptively disadvantaged owner is, in
(1) If you determine that an indi- fact, socially and economically dis-
vidual claiming to be a member of a advantaged.
group presumed to be disadvantaged is (2) (i) You must require each indi-
not a member of a designated disadvan- vidual owner of a firm applying to par-
taged group, the individual must dem- ticipate as a DBE (except a firm apply-
onstrate social and economic disadvan- ing to participate as a DBE airport
tage on an individual basis. concessionaire) whose ownership and
(2) Your decisions concerning mem- control are relied upon for DBE certifi-
bership in a designated group are sub- cation to certify that he or she has a
ject to the certification appeals proce- personal net worth that does not ex-
dure of 26.89. ceed $750,000.
(ii) You must require each individual
35554, June 16, 2003] who makes this certification to sup-
port it with a signed, notarized state-
26.65 What rules govern business size ment of personal net worth, with ap-
determinations? propriate supporting documentation.
(a) To be an eligible DBE, a firm (in- This statement and documentation
cluding its affiliates) must be an exist- must not be unduly lengthy, burden-
ing small business, as defined by Small some, or intrusive.
Business Administration (SBA) stand- (iii) In determining an individuals
ards. As a recipient, you must apply net worth, you must observe the fol-
current SBA business size standard(s) lowing requirements:
found in 13 CFR part 121 appropriate to (A) Exclude an individuals ownership
the type(s) of work the firm seeks to interest in the applicant firm;
perform in DOT-assisted contracts. (B) Exclude the individuals equity in
(b) Even if it meets the requirements his or her primary residence (except
of paragraph (a) of this section, a firm any portion of such equity that is at-
is not an eligible DBE in any Federal tributable to excessive withdrawals
fiscal year if the firm (including its af- from the applicant firm).
filiates) has had average annual gross (C) Do not use a contingent liability
receipts, as defined by SBA regulations to reduce an individuals net worth.
312
(D) With respect to assets held in until he or she makes an individual

vested pension plans, Individual Retire- showing of social and/or economic dis-
ment Accounts, 401(k) accounts, or advantage. If the basis for rebutting
other retirement savings or investment the presumption is a determination
programs in which the assets cannot be that the individuals personal net
distributed to the individual at the worth exceeds $750,000, the individual is
present time without significant ad- no longer eligible for participation in
verse tax or interest consequences, in- the program and cannot regain eligi-
clude only the present value of such as- bility by making an individual showing
sets, less the tax and interest penalties of disadvantage.
that would accrue if the asset were dis- (c) [Reserved]
tributed at the present time. (d) Individual determinations of social
(iv) Notwithstanding any provision of and economic disadvantage. Firms
Federal or state law, you must not re- owned and controlled by individuals
lease an individuals personal net who are not presumed to be socially
worth statement nor any documenta-
and economically disadvantaged (in-
tion supporting it to any third party
cluding individuals whose presumed
without the written consent of the sub-
disadvantage has been rebutted) may
mitter. Provided, that you must trans-
apply for DBE certification. You must
mit this information to DOT in any
make a case-by-case determination of
certification appeal proceeding under
26.89 in which the disadvantaged sta- whether each individual whose owner-
tus of the individual is in question. ship and control are relied upon for
(b) Rebuttal of presumption of dis- DBE certification is socially and eco-
advantage. (1) If the statement of per- nomically disadvantaged. In such a
sonal net worth that an individual sub- proceeding, the applicant firm has the
mits under paragraph (a)(2) of this sec- burden of demonstrating to you, by a
tion shows that the individuals per- preponderance of the evidence, that the
sonal net worth exceeds $750,000, the in- individuals who own and control it are
dividuals presumption of economic socially and economically disadvan-
disadvantage is rebutted. You are not taged. An individual whose personal
required to have a proceeding under net worth exceeds $750,000 shall not be
paragraph (b)(2) of this section in order deemed to be economically disadvan-
to rebut the presumption of economic taged. In making these determinations,
disadvantage in this case. use the guidance found in Appendix E
(2) If you have a reasonable basis to of this part. You must require that ap-
believe that an individual who is a plicants provide sufficient information
member of one of the designated groups to permit determinations under the
is not, in fact, socially and/or economi- guidance of Appendix E of this part.
cally disadvantaged you may, at any
time, start a proceeding to determine 34570, June 28, 1999; 68 FR 35554, June 16, 2003]
whether the presumption should be re-
garded as rebutted with respect to that 26.69 What rules govern determina-
individual. Your proceeding must fol- tions of ownership?
low the procedures of 26.87.
(3) In such a proceeding, you have the (a) In determining whether the so-
burden of demonstrating, by a prepon- cially and economically disadvantaged
derance of the evidence, that the indi- participants in a firm own the firm,
vidual is not socially and economically you must consider all the facts in the
disadvantaged. You may require the in- record, viewed as a whole.
dividual to produce information rel- (b) To be an eligible DBE, a firm
evant to the determination of his or must be at least 51 percent owned by
her disadvantage. socially and economically disadvan-
(4) When an individuals presumption taged individuals.
of social and/or economic disadvantage (1) In the case of a corporation, such
has been rebutted, his or her ownership individuals must own at least 51 per-
and control of the firm in question can- cent of the each class of voting stock
not be used for purposes of DBE eligi- outstanding and 51 percent of the ag-
bility under this subpart unless and gregate of all stock outstanding.
313
(2) In the case of a partnership, 51 tivities as an employee. Debt instru-

percent of each class of partnership in- ments from financial institutions or
terest must be owned by socially and other organizations that lend funds in
economically disadvantaged individ- the normal course of their business do
uals. Such ownership must be reflected not render a firm ineligible, even if the
in the firms partnership agreement. debtors ownership interest is security
(3) In the case of a limited liability for the loan.
company, at least 51 percent of each (f) The following requirements apply
class of member interest must be to situations in which expertise is re-
owned by socially and economically lied upon as part of a disadvantaged
disadvantaged individuals. owners contribution to acquire owner-
(c) The firms ownership by socially ship:
and economically disadvantaged indi- (1) The owners expertise must be
viduals must be real, substantial, and
(i) In a specialized field;
continuing, going beyond pro forma
ownership of the firm as reflected in (ii) Of outstanding quality;
ownership documents. The disadvan- (iii) In areas critical to the firms op-
taged owners must enjoy the cus- erations;
tomary incidents of ownership, and (iv) Indispensable to the firms poten-
share in the risks and profits commen- tial success;
surate with their ownership interests, (v) Specific to the type of work the
as demonstrated by the substance, not firm performs; and
merely the form, of arrangements. (vi) Documented in the records of the
(d) All securities that constitute firm. These records must clearly show
ownership of a firm shall be held di- the contribution of expertise and its
rectly by disadvantaged persons. Ex- value to the firm.
cept as provided in this paragraph (d), (2) The individual whose expertise is
no securities or assets held in trust, or relied upon must have a significant fi-
by any guardian for a minor, are con- nancial investment in the firm.
sidered as held by disadvantaged per- (g) You must always deem as held by
sons in determining the ownership of a a socially and economically disadvan-
firm. However, securities or assets held taged individual, for purposes of deter-
in trust are regarded as held by a dis- mining ownership, all interests in a
advantaged individual for purposes of business or other assets obtained by
determining ownership of the firm, if the individual
(1) The beneficial owner of securities
(1) As the result of a final property
or assets held in trust is a disadvan-
settlement or court order in a divorce
taged individual, and the trustee is the
or legal separation, provided that no
same or another such individual; or
term or condition of the agreement or
(2) The beneficial owner of a trust is
divorce decree is inconsistent with this
a disadvantaged individual who, rather
section; or
than the trustee, exercises effective
control over the management, policy- (2) Through inheritance, or otherwise
making, and daily operational activi- because of the death of the former
ties of the firm. Assets held in a rev- owner.
ocable living trust may be counted (h)(1) You must presume as not being
only in the situation where the same held by a socially and economically
disadvantaged individual is the sole disadvantaged individual, for purposes
grantor, beneficiary, and trustee. of determining ownership, all interests
(e) The contributions of capital or ex- in a business or other assets obtained
pertise by the socially and economi- by the individual as the result of a gift,
cally disadvantaged owners to acquire or transfer without adequate consider-
their ownership interests must be real ation, from any non-disadvantaged in-
and substantial. Examples of insuffi- dividual or non-DBE firm who is
cient contributions include a promise (i) Involved in the same firm for
to contribute capital, an unsecured which the individual is seeking certifi-
note payable to the firm or an owner cation, or an affiliate of that firm;

who is not a disadvantaged individual, (ii) Involved in the same or a similar
or mere participation in a firms ac- line of business; or
314
(iii) Engaged in an ongoing business a gift, or transfer without adequate

relationship with the firm, or an affil- consideration, other than the types set
iate of the firm, for which the indi- forth in paragraph (h) of this section;
vidual is seeking certification. (2) There is a provision for the co-sig-
(2) To overcome this presumption and nature of a spouse who is not a socially
permit the interests or assets to be and economically disadvantaged indi-
counted, the disadvantaged individual vidual on financing agreements, con-
must demonstrate to you, by clear and tracts for the purchase or sale of real
convincing evidence, that or personal property, bank signature
(i) The gift or transfer to the dis- cards, or other documents; or
advantaged individual was made for (3) Ownership of the firm in question
reasons other than obtaining certifi- or its assets is transferred for adequate
cation as a DBE; and consideration from a spouse who is not
(ii) The disadvantaged individual ac- a socially and economically disadvan-
tually controls the management, pol- taged individual to a spouse who is
icy, and operations of the firm, not- such an individual. In this case, you
withstanding the continuing participa- must give particularly close and care-
tion of a non-disadvantaged individual ful scrutiny to the ownership and con-
who provided the gift or transfer. trol of a firm to ensure that it is owned
(i) You must apply the following and controlled, in substance as well as
rules in situations in which marital as- in form, by a socially and economically
sets form a basis for ownership of a disadvantaged individual.
firm:
(1) When marital assets (other than 26.71 What rules govern determina-
the assets of the business in question), tions concerning control?
held jointly or as community property
(a) In determining whether socially
by both spouses, are used to acquire
and economically disadvantaged own-
the ownership interest asserted by one
ers control a firm, you must consider
spouse, you must deem the ownership
all the facts in the record, viewed as a
interest in the firm to have been ac-
whole.
quired by that spouse with his or her
own individual resources, provided that (b) Only an independent business may
the other spouse irrevocably renounces be certified as a DBE. An independent
and transfers all rights in the owner- business is one the viability of which
ship interest in the manner sanctioned does not depend on its relationship
by the laws of the state in which either with another firm or firms.
spouse or the firm is domiciled. You do (1) In determining whether a poten-
not count a greater portion of joint or tial DBE is an independent business,
community property assets toward you must scrutinize relationships with
ownership than state law would recog- non-DBE firms, in such areas as per-
nize as belonging to the socially and sonnel, facilities, equipment, financial
economically disadvantaged owner of and/or bonding support, and other re-
the applicant firm. sources.
(2) A copy of the document legally (2) You must consider whether
transferring and renouncing the other present or recent employer/employee
spouses rights in the jointly owned or relationships between the disadvan-
community assets used to acquire an taged owner(s) of the potential DBE
ownership interest in the firm must be and non-DBE firms or persons associ-
included as part of the firms applica- ated with non-DBE firms compromise
tion for DBE certification. the independence of the potential DBE
(j) You may consider the following firm.
factors in determining the ownership of (3) You must examine the firms rela-
a firm. However, you must not regard a tionships with prime contractors to de-
contribution of capital as failing to be termine whether a pattern of exclusive
real and substantial, or find a firm in- or primary dealings with a prime con-
eligible, solely because tractor compromises the independence
(1) A socially and economically dis- of the potential DBE firm.

advantaged individual acquired his or (4) In considering factors related to
her ownership interest as the result of the independence of a potential DBE
315
firm, you must consider the consist- ations of the firm to other participants
ency of relationships between the po- in the firm, regardless of whether these
tential DBE and non-DBE firms with participants are socially and economi-
normal industry practice. cally disadvantaged individuals. Such
(c) A DBE firm must not be subject delegations of authority must be rev-
to any formal or informal restrictions ocable, and the socially and economi-
which limit the customary discretion cally disadvantaged owners must re-
of the socially and economically dis- tain the power to hire and fire any per-
advantaged owners. There can be no re- son to whom such authority is dele-
strictions through corporate charter gated. The managerial role of the so-
provisions, by-law provisions, con- cially and economically disadvantaged
tracts or any other formal or informal owners in the firms overall affairs
devices (e.g., cumulative voting rights, must be such that the recipient can
voting powers attached to different reasonably conclude that the socially
classes of stock, employment con- and economically disadvantaged own-
tracts, requirements for concurrence ers actually exercise control over the
by non-disadvantaged partners, condi- firms operations, management, and
tions precedent or subsequent, execu- policy.
tory agreements, voting trusts, restric- (g) The socially and economically
tions on or assignments of voting disadvantaged owners must have an
rights) that prevent the socially and overall understanding of, and manage-
economically disadvantaged owners, rial and technical competence and ex-
without the cooperation or vote of any perience directly related to, the type of
non-disadvantaged individual, from business in which the firm is engaged
making any business decision of the and the firms operations. The socially
firm. This paragraph does not preclude and economically disadvantaged own-
a spousal co-signature on documents as ers are not required to have experience
provided for in 26.69(j)(2). or expertise in every critical area of
(d) The socially and economically the firms operations, or to have great-
disadvantaged owners must possess the er experience or expertise in a given
power to direct or cause the direction field than managers or key employees.
of the management and policies of the The socially and economically dis-
firm and to make day-to-day as well as advantaged owners must have the abil-
long-term decisions on matters of man- ity to intelligently and critically
agement, policy and operations. evaluate information presented by
(1) A disadvantaged owner must hold other participants in the firms activi-
the highest officer position in the com- ties and to use this information to
pany (e.g., chief executive officer or make independent decisions concerning
president). the firms daily operations, manage-
(2) In a corporation, disadvantaged ment, and policymaking. Generally,
owners must control the board of direc- expertise limited to office manage-
tors. ment, administration, or bookkeeping
(3) In a partnership, one or more dis- functions unrelated to the principal
advantaged owners must serve as gen- business activities of the firm is insuf-
eral partners, with control over all ficient to demonstrate control.
partnership decisions. (h) If state or local law requires the
(e) Individuals who are not socially persons to have a particular license or
and economically disadvantaged may other credential in order to own and/or
be involved in a DBE firm as owners, control a certain type of firm, then the
managers, employees, stockholders, of- socially and economically disadvan-
ficers, and/or directors. Such individ- taged persons who own and control a
uals must not, however, possess or ex- potential DBE firm of that type must
ercise the power to control the firm, or possess the required license or creden-
be disproportionately responsible for tial. If state or local law does not re-
the operation of the firm. quire such a person to have such a li-
(f) The socially and economically dis- cense or credential to own and/or con-
advantaged owners of the firm may del- trol a firm, you must not deny certifi-
egate various areas of the manage- cation solely on the ground that the
ment, policymaking, or daily oper- person lacks the license or credential.
316
However, you may take into account bers (who themselves are not socially
the absence of the license or credential and economically disadvantaged indi-
as one factor in determining whether viduals) participate in the firm as a
the socially and economically dis- manager, employee, owner, or in an-
advantaged owners actually control other capacity. Except as otherwise
the firm. provided in this paragraph, you must
(i)(1) You may consider differences in make a judgment about the control the
remuneration between the socially and socially and economically disadvan-
economically disadvantaged owners taged owner exercises vis-a-vis other
and other participants in the firm in persons involved in the business as you
determining whether to certify a firm do in other situations, without regard
as a DBE. Such consideration shall be to whether or not the other persons are
in the context of the duties of the per- immediate family members.
sons involved, normal industry prac- (2) If you cannot determine that the
tices, the firms policy and practice socially and economically disadvan-
concerning reinvestment of income, taged ownersas distinct from the
and any other explanations for the dif- family as a wholecontrol the firm,
ferences proffered by the firm. You then the socially and economically dis-
may determine that a firm is con- advantaged owners have failed to carry
trolled by its socially and economi- their burden of proof concerning con-
cally disadvantaged owner although trol, even though they may participate
that owners remuneration is lower significantly in the firms activities.
than that of some other participants in (l) Where a firm was formerly owned
the firm. and/or controlled by a non-disadvan-
(2) In a case where a non-disadvantaged individual (whether or not an im-
taged individual formerly controlled mediate family member), ownership
the firm, and a socially and economi- and/or control were transferred to a so-
cally disadvantaged individual now
cially and economically disadvantaged
controls it, you may consider a dif-
individual, and the non-disadvantaged
ference between the remuneration of
individual remains involved with the
the former and current controller of
firm in any capacity, the disadvan-
the firm as a factor in determining who
taged individual now owning the firm
controls the firm, particularly when
must demonstrate to you, by clear and
the non-disadvantaged individual re-
convincing evidence, that:
mains involved with the firm and con-
tinues to receive greater compensation (1) The transfer of ownership and/or
than the disadvantaged individual. control to the disadvantaged individual
(j) In order to be viewed as control- was made for reasons other than ob-
ling a firm, a socially and economi- taining certification as a DBE; and
cally disadvantaged owner cannot en- (2) The disadvantaged individual ac-
gage in outside employment or other tually controls the management, pol-
business interests that conflict with icy, and operations of the firm, not-
the management of the firm or prevent withstanding the continuing participa-
the individual from devoting sufficient tion of a non-disadvantaged individual
time and attention to the affairs of the who formerly owned and/or controlled
firm to control its activities. For ex- the firm.
ample, absentee ownership of a busi- (m) In determining whether a firm is
ness and part-time work in a full-time controlled by its socially and economi-
firm are not viewed as constituting cally disadvantaged owners, you may
control. However, an individual could consider whether the firm owns equip-
be viewed as controlling a part-time ment necessary to perform its work.
business that operates only on eve- However, you must not determine that
nings and/or weekends, if the indi- a firm is not controlled by socially and
vidual controls it all the time it is op- economically disadvantaged individ-
erating. uals solely because the firm leases,
(k)(1) A socially and economically rather than owns, such equipment,
disadvantaged individual may control where leasing equipment is a normal

a firm even though one or more of the industry practice and the lease does
individuals immediate family mem- not involve a relationship with a prime
317
contractor or other party that com- to maintain an employer-employee re-

promises the independence of the firm. lationship with the leased employees.
(n) You must grant certification to a This includes being responsible for hir-
firm only for specific types of work in ing, firing, training, assigning, and
which the socially and economically otherwise controlling the on-the-job
disadvantaged owners have the ability activities of the employees, as well as
to control the firm. To become cer- ultimate responsibility for wage and
tified in an additional type of work, tax obligations related to the employ-
the firm need demonstrate to you only ees.
that its socially and economically dis-
advantaged owners are able to control 26.73 What are other rules affecting
the firm with respect to that type of certification?
work. You may not, in this situation, (a)(1) Consideration of whether a firm
require that the firm be recertified or performs a commercially useful func-
submit a new application for certifi- tion or is a regular dealer pertains
cation, but you must verify the dis- solely to counting toward DBE goals
advantaged owners control of the firm the participation of firms that have al-
in the additional type of work. ready been certified as DBEs. Except as
(o) A business operating under a fran- provided in paragraph (a)(2) of this sec-
chise or license agreement may be cer- tion, you must not consider commer-
tified if it meets the standards in this cially useful function issues in any way
subpart and the franchiser or licenser in making decisions about whether to
is not affiliated with the franchisee or certify a firm as a DBE.
licensee. In determining whether affili- (2) You may consider, in making cer-
ation exists, you should generally not tification decisions, whether a firm has
consider the restraints relating to exhibited a pattern of conduct indi-
standardized quality, advertising, ac- cating its involvement in attempts to
counting format, and other provisions evade or subvert the intent or require-
imposed on the franchisee or licensee ments of the DBE program.
by the franchise agreement or license, (b) You must evaluate the eligibility
provided that the franchisee or licensee of a firm on the basis of present cir-
has the right to profit from its efforts cumstances. You must not refuse to
and bears the risk of loss commensu- certify a firm based solely on historical
rate with ownership. Alternatively, information indicating a lack of owner-
even though a franchisee or licensee ship or control of the firm by socially
may not be controlled by virtue of such and economically disadvantaged indi-
provisions in the franchise agreement viduals at some time in the past, if the
or license, affiliation could arise firm currently meets the ownership
through other means, such as common and control standards of this part. Nor
management or excessive restrictions must you refuse to certify a firm solely
on the sale or transfer of the franchise on the basis that it is a newly formed
interest or license. firm.
(p) In order for a partnership to be (c) DBE firms and firms seeking DBE
controlled by socially and economi- certification shall cooperate fully with
cally disadvantaged individuals, any your requests (and DOT requests) for
non-disadvantaged partners must not information relevant to the certifi-
have the power, without the specific cation process. Failure or refusal to
written concurrence of the socially and provide such information is a ground
economically disadvantaged partner(s), for a denial or removal of certification.
to contractually bind the partnership (d) Only firms organized for profit
or subject the partnership to contract may be eligible DBEs. Not-for-profit
or tort liability. organizations, even though controlled
(q) The socially and economically by socially and economically disadvan-
disadvantaged individuals controlling a taged individuals, are not eligible to be
firm may use an employee leasing com- certified as DBEs.
pany. The use of such a company does (e) An eligible DBE firm must be
not preclude the socially and economi- owned by individuals who are socially
cally disadvantaged individuals from and economically disadvantaged. Ex-
controlling their firm if they continue cept as provided in this paragraph, a
318
firm that is not owned by such individ- gross receipts of the holding companies and
uals, but instead is owned by another its subsidiaries are greater than the size
firmeven a DBE firmcannot be an standard for the subsidiary seeking certifi-
cation and/or the gross receipts cap of
eligible DBE. 26.65(b). Under the rules concerning affili-
(1) If socially and economically dis- ation, the subsidiary fails to meet the size
advantaged individuals own and con- standard and cannot be certified.
trol a firm through a parent or holding
company, established for tax, capital- (f) Recognition of a business as a sep-
ization or other purposes consistent arate entity for tax or corporate pur-
with industry practice, and the parent poses is not necessarily sufficient to
or holding company in turn owns and demonstrate that a firm is an inde-
controls an operating subsidiary, you pendent business, owned and controlled
may certify the subsidiary if it other- by socially and economically disadvan-
wise meets all requirements of this taged individuals.
subpart. In this situation, the indi- (g) You must not require a DBE firm
vidual owners and controllers of the to be prequalified as a condition for
parent or holding company are deemed certification unless the recipient re-
to control the subsidiary through the quires all firms that participate in its
parent or holding company. contracts and subcontracts to be
(2) You may certify such a subsidiary prequalified.
only if there is cumulatively 51 percent (h) A firm that is owned by an Indian
ownership of the subsidiary by socially tribe or Native Hawaiian organization,
and economically disadvantaged indi- rather than by Indians or Native Ha-
viduals. The following examples illus- waiians as individuals, may be eligible
trate how this cumulative ownership for certification. Such a firm must
provision works: meet the size standards of 26.35. Such
a firm must be controlled by socially
Example 1: Socially and economically dis- and economically disadvantaged indi-
advantaged individuals own 100 percent of a viduals, as provided in 26.71.
holding company, which has a wholly-owned
(i) The following special rules apply
subsidiary. The subsidiary may be certified,
if it meets all other requirements. to the certification of firms related to
Example 2: Disadvantaged individuals own Alaska Native Corporations (ANCs).
100 percent of the holding company, which (1) Notwithstanding any other provi-
owns 51 percent of a subsidiary. The sub- sions of this subpart, a direct or indi-
sidiary may be certified, if all other require- rect subsidiary corporation, joint ven-
ments are met. ture, or partnership entity of an ANC is
Example 3: Disadvantaged individuals own eligible for certification as a DBE if it
80 percent of the holding company, which in meets all of the following require-
turn owns 70 percent of a subsidiary. In this
case, the cumulative ownership of the sub-
ments:
sidiary by disadvantaged individuals is 56 (i) The Settlement Common Stock of
percent (80 percent of the 70 percent). This is the underlying ANC and other stock of
more than 51 percent, so you may certify the the ANC held by holders of the Settle-
subsidiary, if all other requirements are met. ment Common Stock and by Natives
Example 4: Same as Example 2 or 3, but and descendents of Natives represents a
someone other than the socially and eco- majority of both the total equity of the
nomically disadvantaged owners of the par- ANC and the total voting power of the
ent or holding company controls the sub- corporation for purposes of electing di-
sidiary. Even though the subsidiary is owned
by disadvantaged individuals, through the
rectors;
holding or parent company, you cannot cer- (ii) The shares of stock or other units
tify it because it fails to meet control re- of common ownership interest in the
quirements. subsidiary, joint venture, or partner-
Example 5: Disadvantaged individuals own ship entity held by the ANC and by
60 percent of the holding company, which in holders of its Settlement Common
turn owns 51 percent of a subsidiary. In this Stock represent a majority of both the
case, the cumulative ownership of the sub- total equity of the entity and the total
sidiary by disadvantaged individuals is about
voting power of the entity for the pur-
31 percent. This is less than 51 percent, so
you cannot certify the subsidiary. pose of electing directors, the general
Example 6: The holding company, in addi- partner, or principal officers; and

tion to the subsidiary seeking certification, (iii) The subsidiary, joint venture, or
owns several other companies. The combined partnership entity has been certified
319
by the Small Business Administration that the UCP has sufficient resources
under the 8(a) or small disadvantaged and expertise to carry out the require-
business program. ments of this part. The agreement
(2) As a recipient to whom an ANC- shall include an implementation sched-
related entity applies for certification, ule ensuring that the UCP is fully oper-
you do not use the DOT uniform appli- ational no later than 18 months fol-
cation form (see Appendix F of this lowing the approval of the agreement
part). You must obtain from the firm by the Secretary.
documentation sufficient to dem- (3) Subject to approval by the Sec-
onstrate that entity meets the require- retary, the UCP in each state may take
ments of paragraph (i)(1) of this sec- any form acceptable to the recipients
tion. You must also obtain sufficient in that state.
information about the firm to allow (4) The Secretary shall review the
you to administer your program (e.g., UCP and approve it, disapprove it, or
information that would appear in your remand it to the recipients in the state
DBE Directory). for revisions. A complete agreement
(3) If an ANC-related firm does not which is not disapproved or remanded
meet all the conditions of paragraph within 180 days of its receipt is deemed
(i)(1) of this section, then it must meet to be accepted.
the requirements of paragraph (h) of (5) If you and the other recipients in
this section in order to be certified, on your state fail to meet the deadlines
the same basis as firms owned by In- set forth in this paragraph (a), you
dian Tribes or Native Hawaiian Organi- shall have the opportunity to make an
zations. explanation to the Secretary why a
[64 FR 5126, Feb. 2, 1999, as amended at 68 FR deadline could not be met and why
35555, June 16, 2003] meeting the deadline was beyond your
control. If you fail to make such an ex-
Subpart ECertification planation, or the explanation does not
Procedures justify the failure to meet the dead-
line, the Secretary shall direct you to
26.81 What are the requirements for complete the required action by a date
Unified Certification Programs? certain. If you and the other recipients
(a) You and all other DOT recipients fail to carry out this direction in a
in your state must participate in a timely manner, you are collectively in
Unified Certification Program (UCP). noncompliance with this part.
(1) Within three years of March 4, (b) The UCP shall make all certifi-
1999, you and the other recipients in cation decisions on behalf of all DOT
your state must sign an agreement es- recipients in the state with respect to
tablishing the UCP for that state and participation in the DOT DBE Pro-
submit the agreement to the Secretary gram.
for approval. The Secretary may, on (1) Certification decisions by the UCP
the basis of extenuating circumstances shall be binding on all DOT recipients
shown by the recipients in the state, within the state.
extend this deadline for no more than (2) The UCP shall provide one-stop
one additional year. shopping to applicants for certifi-
(2) The agreement must provide for cation, such that an applicant is re-
the establishment of a UCP meeting all quired to apply only once for a DBE
the requirements of this section. The certification that will be honored by
agreement must specify that the UCP all recipients in the state.
will follow all certification procedures (3) All obligations of recipients with
and standards of this part, on the same respect to certification and non-
basis as recipients; that the UCP shall discrimination must be carried out by
cooperate fully with oversight, review, UCPs, and recipients may use only
and monitoring activities of DOT and UCPs that comply with the certifi-
its operating administrations; and that cation and nondiscrimination require-
the UCP shall implement DOT direc- ments of this part.
tives and guidance concerning certifi- (c) All certifications by UCPs shall
cation matters. The agreement shall be pre-certifications; i.e., certifications
also commit recipients to ensuring that have been made final before the
320
due date for bids or offers on a contract (b) You must determine the eligi-
on which a firm seeks to participate as bility of firms as DBEs consistent with
a DBE. the standards of subpart D of this part.
(d) A UCP is not required to process When a UCP is formed, the UCP must
an application for certification from a meet all the requirements of subpart D
firm having its principal place of busi- of this part and this subpart that re-
ness outside the state if the firm is not cipients are required to meet.
certified by the UCP in the state in (c) You must take all the following
which it maintains its principal place steps in determining whether a DBE
of business. The home state UCP firm meets the standards of subpart D
shall share its information and docu- of this part:
ments concerning the firm with other (1) Perform an on-site visit to the of-
UCPs that are considering the firms fices of the firm. You must interview
application. the principal officers of the firm and
(e) Subject to DOT approval as pro- review their resumes and/or work his-
vided in this section, the recipients in tories. You must also perform an on-
two or more states may form a re- site visit to job sites if there are such
gional UCP. UCPs may also enter into sites on which the firm is working at
written reciprocity agreements with the time of the eligibility investigation
other UCPs. Such an agreement shall in your jurisdiction or local area. You
outline the specific responsibilities of may rely upon the site visit report of
each participant. A UCP may accept any other recipient with respect to a
the certification of any other UCP or firm applying for certification;
DOT recipient. (2) If the firm is a corporation, ana-
(f) Pending the establishment of lyze the ownership of stock in the firm;
UCPs meeting the requirements of this (3) Analyze the bonding and financial
section, you may enter into agree- capacity of the firm;
ments with other recipients, on a re-
(4) Determine the work history of the
gional or inter-jurisdictional basis, to
firm, including contracts it has re-
perform certification functions re-
ceived and work it has completed;
quired by this part. You may also grant
reciprocity to other recipients certifi- (5) Obtain a statement from the firm
cation decisions. of the type of work it prefers to per-
(g) Each UCP shall maintain a uniform as part of the DBE program and
fied DBE directory containing, for all its preferred locations for performing
firms certified by the UCP (including the work, if any;
those from other states certified under (6) Obtain or compile a list of the
the provisions of this section), the in- equipment owned by or available to the
formation required by 26.31. The UCP firm and the licenses the firm and its
shall make the directory available to key personnel possess to perform the
the public electronically, on the inter- work it seeks to do as part of the DBE
net, as well as in print. The UCP shall program;
update the electronic version of the di- (7) Require potential DBEs to com-
rectory by including additions, dele- plete and submit an appropriate appli-
tions, and other changes as soon as cation form, unless the potential DBE
they are made. is an SBA certified firm applying pur-
(h) Except as otherwise specified in suant to the DOT/SBA MOU.
this section, all provisions of this sub- (i) You must use the application form
part and subpart D of this part per- provided in Appendix F to this part
taining to recipients also apply to without change or revision. However,
UCPs. you may provide in your DBE program,
with the approval of the concerned op-
26.83 What procedures do recipients erating administration, for
follow in making certification deci- supplementing the form by requesting
sions? additional information not incon-
(a) You must ensure that only firms sistent with this part.
certified as eligible DBEs under this (ii) You must make sure that the ap-
section participate as DBEs in your plicant attests to the accuracy and
program. truthfulness of the information on the
321
application form. This shall be done ei- basis on which the certification was
ther in the form of an affidavit sworn made changes.
to by the applicant before a person who (i) If you are a DBE, you must inform
is authorized by state law to admin- the recipient or UCP in writing of any
ister oaths or in the form of an change in circumstances affecting your
unsworn declaration executed under ability to meet size, disadvantaged sta-
penalty of perjury of the laws of the tus, ownership, or control require-
United States. ments of this part or any material
(iii) You must review all information change in the information provided in
on the form prior to making a decision your application form.
about the eligibility of the firm. (1) Changes in management responsi-
(d) When another recipient, in con- bility among members of a limited li-
nection with its consideration of the ability company are covered by this re-
eligibility of a firm, makes a written quirement.
request for certification information (2) You must attach supporting docu-
you have obtained about that firm mentation describing in detail the na-
(e.g., including application materials ture of such changes.
or the report of a site visit, if you have (3) The notice must take the form of
made one to the firm), you must an affidavit sworn to by the applicant
promptly make the information avail- before a person who is authorized by
able to the other recipient. state law to administer oaths or of an
(e) When another DOT recipient has unsworn declaration executed under
certified a firm, you have discretion to penalty of perjury of the laws of the
take any of the following actions: United States. You must provide the
(1) Certify the firm in reliance on the written notification within 30 days of
certification decision of the other re- the occurrence of the change. If you
cipient; fail to make timely notification of
(2) Make an independent certification such a change, you will be deemed to
decision based on documentation pro- have failed to cooperate under
vided by the other recipient, aug- 26.109(c).
mented by any additional information (j) If you are a DBE, you must pro-
you require the applicant to provide; or vide to the recipient, every year on the
(3) Require the applicant to go anniversary of the date of your certifi-
through your application process with- cation, an affidavit sworn to by the
out regard to the action of the other firms owners before a person who is
recipient. authorized by state law to administer
(f) Subject to the approval of the con- oaths or an unsworn declaration exe-
cerned operating administration as cuted under penalty of perjury of the
part of your DBE program, you may laws of the United States. This affi-
impose a reasonable application fee for davit must affirm that there have been
certification. Fee waivers shall be no changes in the firms circumstances
made in appropriate cases. affecting its ability to meet size, dis-
(g) You must safeguard from disclo- advantaged status, ownership, or con-
sure to unauthorized persons informa- trol requirements of this part or any
tion gathered as part of the certifi- material changes in the information
cation process that may reasonably be provided in its application form, except
regarded as proprietary or other con- for changes about which you have noti-
fidential business information, con- fied the recipient under paragraph (i)
sistent with applicable Federal, state, of this section. The affidavit shall spe-
and local law. cifically affirm that your firm con-
(h) Once you have certified a DBE, it tinues to meet SBA business size cri-
shall remain certified for a period of at teria and the overall gross receipts cap
least three years unless and until its of this part, documenting this affirma-
certification has been removed through tion with supporting documentation of
the procedures of 26.87. You may not your firms size and gross receipts. If
require DBEs to reapply for certifi- you fail to provide this affidavit in a
cation as a condition of continuing to timely manner, you will be deemed to

participate in the program during this have failed to cooperate under
three-year period, unless the factual 26.109(c).
322
(k) If you are a recipient, you must quirements of Subpart D of this part,
make decisions on applications for cer- you must certify the firm.
tification within 90 days of receiving (e) You are not required to process an
from the applicant firm all information application for certification from an
required under this part. You may ex- SBA-certified firm having its principal
tend this time period once, for no more place of business outside the state(s) in
than an additional 60 days, upon writ- which you operate unless there is a re-
ten notice to the firm, explaining fully port of a home state on-site review
and specifically the reasons for the ex- on which you may rely.
tension. You may establish a different (f) You are not required to process an
time frame in your DBE program, upon application for certification from an
a showing that this time frame is not SBA-certified firm if the firm does not
feasible, and subject to the approval of provide products or services that you
the concerned operating administra- use in your DOT-assisted programs or
tion. Your failure to make a decision airport concessions.
by the applicable deadline under this [68 FR 35555, June 16, 2003]
paragraph is deemed a constructive de-
nial of the application, on the basis of 26.85 How do recipients respond to
which the firm may appeal to DOT requests from DBE-certified firms
or the SBA made pursuant to the
under 26.89. DOT/SBA MOU?
[64 FR 5126, Feb. 2, 1999, as amended at 68 FR (a) Upon receipt of a signed, written
35555, June 16, 2003] request from a DBE-certified firm, you
must transfer to the SBA a copy of the
26.84 How do recipients process ap- firms application package. You must
plications submitted pursuant to
the DOT/SBA MOU? transfer this information within thirty
days of receipt of the request.
(a) When an SBA-certified firm ap- (b) If necessary, the SBA may make a
plies for certification pursuant to the written request to the recipient for ad-
DOT/SBA MOU, you must accept the ditional materials (e.g., the report of
certification applications, forms and the on-site review). You must provide a
packages submitted by a firm to the copy of this material to the SBA with-
SBA for either the 8(a) BD or SDB pro- in forty-five days of the additional re-
grams, in lieu of requiring the appli- quest.
cant firm to complete your own appli- (c) You must provide appropriate as-
cation forms and packages. The appli- sistance to SBA-certified firms, includ-
cant may submit the package directly, ing providing information pertaining
or may request that the SBA forward to the DBE application process, filing
the package to you. Pursuant to the locations, required documentation and
MOU, the SBA will forward the pack- status of applications.
age within thirty days. [68 FR 35555, June 16, 2003]
(b) If necessary, you may request ad-
ditional relevant information from the 26.86 What rules govern recipients
SBA. The SBA will provide this addi- denials of initial requests for cer-
tional material within forty-five days tification?
of your written request. (a) When you deny a request by a
(c) Before certifying a firm based on firm, which is not currently certified
its 8(a) BD or SDB certification, you with you, to be certified as a DBE, you
must conduct an on-site review of the must provide the firm a written expla-
firm (see 26.83(c)(1)). If the SBA con- nation of the reasons for the denial,
ducted an on-site review, you may rely specifically referencing the evidence in
on the SBAs report of the on-site re- the record that supports each reason
view. In connection with this review, for the denial. All documents and other
you may also request additional rel- information on which the denial is
evant information from the firm. based must be made available to the
(d) Unless you determine, based on applicant, on request.
the on-site review and information ob- (b) When you deny DBE certification
tained in connection with it, that the to a firm certified by the SBA, you
firm does not meet the eligibility re- must notify the SBA in writing. The
323
notification must include the reason on the issue of reasonable cause must
for denial. specifically reference the evidence in
(c) When a firm is denied certifi- the record on which each reason is
cation, you must establish a time pe- based.
riod of no more than twelve months (b) Recipient-initiated proceedings. If,
that must elapse before the firm may based on notification by the firm of a
reapply to the recipient for certifi- change in its circumstances or other
cation. You may provide, in your DBE information that comes to your atten-
program, subject to approval by the
tion, you determine that there is rea-
concerned operating administration, a
sonable cause to believe that a cur-
shorter waiting period for reapplica-
tion. The time period for reapplication rently certified firm is ineligible, you
begins to run on the date the expla- must provide written notice to the firm
nation required by paragraph (a) of this that you propose to find the firm ineli-
section is received by the firm. gible, setting forth the reasons for the
(d) When you make an administra- proposed determination. The statement
tively final denial of certification con- of reasons for the finding of reasonable
cerning a firm, the firm may appeal the cause must specifically reference the
denial to the Department under 26.89. evidence in the record on which each
reason is based.
[64 FR 5126, Feb. 2, 1999. Redesignated and
amended at 68 FR 35555, June 16, 2003] (c) DOT directive to initiate proceeding.
(1) If the concerned operating adminis-
26.87 What procedures does a recipi- tration determines that information in
ent use to remove a DBEs eligi- your certification records, or other in-
bility? formation available to the concerned
(a) Ineligibility complaints. (1) Any per- operating administration, provides rea-
son may file with you a written com- sonable cause to believe that a firm
plaint alleging that a currently-cer- you certified does not meet the eligi-
tified firm is ineligible and specifying bility criteria of this part, the con-
the alleged reasons why the firm is in- cerned operating administration may
eligible. You are not required to accept direct you to initiate a proceeding to
a general allegation that a firm is in- remove the firms certification.
eligible or an anonymous complaint.
(2) The concerned operating adminis-
The complaint may include any infor-
tration must provide you and the firm
mation or arguments supporting the
complainants assertion that the firm a notice setting forth the reasons for
is ineligible and should not continue to the directive, including any relevant
be certified. Confidentiality of com- documentation or other information.
plainants identities must be protected (3) You must immediately commence
as provided in 26.109(b). and prosecute a proceeding to remove
(2) You must review your records eligibility as provided by paragraph (b)
concerning the firm, any material proof this section.
vided by the firm and the complainant, (d) Hearing. When you notify a firm
and other available information. You that there is reasonable cause to re-
may request additional information move its eligibility, as provided in
from the firm or conduct any other in- paragraph (a), (b), or (c) of this section,
vestigation that you deem necessary. you must give the firm an opportunity
(3) If you determine, based on this re- for an informal hearing, at which the
view, that there is reasonable cause to firm may respond to the reasons for
believe that the firm is ineligible, you the proposal to remove its eligibility in
must provide written notice to the firm person and provide information and ar-
that you propose to find the firm ineli- guments concerning why it should re-
gible, setting forth the reasons for the
main certified.
proposed determination. If you deter-
(1) In such a proceeding, you bear the
mine that such reasonable cause does
not exist, you must notify the com- burden of proving, by a preponderance
of the evidence, that the firm does not
plainant and the firm in writing of this

determination and the reasons for it. meet the certification standards of this
All statements of reasons for findings part.
324
(2) You must maintain a complete (3) Information that was concealed or
record of the hearing, by any means ac- misrepresented by the firm in previous
ceptable under state law for the reten- certification actions by a recipient;
tion of a verbatim record of an admin- (4) A change in the certification
istrative hearing. If there is an appeal standards or requirements of the De-
to DOT under 26.89, you must provide partment since you certified the firm;
a transcript of the hearing to DOT and, or
on request, to the firm. You must re- (5) A documented finding that your
tain the original record of the hearing. determination to certify the firm was
You may charge the firm only for the factually erroneous.
cost of copying the record. (g) Notice of decision. Following your
(3) The firm may elect to present in- decision, you must provide the firm
formation and arguments in writing, written notice of the decision and the
without going to a hearing. In such a reasons for it, including specific ref-
situation, you bear the same burden of erences to the evidence in the record
proving, by a preponderance of the evi- that supports each reason for the deci-
dence, that the firm does not meet the sion. The notice must inform the firm
certification standards, as you would of the consequences of your decision
during a hearing. and of the availability of an appeal to
(e) Separation of functions. You must the Department of Transportation
ensure that the decision in a pro- under 26.89. You must send copies of
ceeding to remove a firms eligibility is the notice to the complainant in an in-
made by an office and personnel that eligibility complaint or the concerned
did not take part in actions leading to operating administration that had di-
or seeking to implement the proposal rected you to initiate the proceeding.
to remove the firms eligibility and are (h) When you decertify a DBE firm
not subject, with respect to the matter, certified by the SBA, you must notify
to direction from the office or per- the SBA in writing. The notification
sonnel who did take part in these ac- must include the reason for denial.
tions. (i) Status of firm during proceeding. (1)
(1) Your method of implementing this A firm remains an eligible DBE during
requirement must be made part of your the pendancy of your proceeding to re-
DBE program. move its eligibility.
(2) The decisionmaker must be an in- (2) The firm does not become ineli-
dividual who is knowledgeable about gible until the issuance of the notice
the certification requirements of your provided for in paragraph (g) of this
DBE program and this part. section.
(3) Before a UCP is operational in its (j) Effects of removal of eligibility.
state, a small airport or small transit When you remove a firms eligibility,
authority (i.e., an airport or transit au- you must take the following action:
thority serving an area with less than (1) When a prime contractor has
250,000 population) is required to meet made a commitment to using the ineli-
this requirement only to the extent gible firm, or you have made a commit-
feasible. ment to using a DBE prime contractor,
(f) Grounds for decision. You must not but a subcontract or contract has not
base a decision to remove eligibility on been executed before you issue the de-
a reinterpretation or changed opinion certification notice provided for in
of information available to the recipi- paragraph (g) of this section, the ineli-
ent at the time of its certification of gible firm does not count toward the
the firm. You may base such a decision contract goal or overall goal. You must
only on one or more of the following: direct the prime contractor to meet
(1) Changes in the firms cir- the contract goal with an eligible DBE
cumstances since the certification of firm or demonstrate to you that it has
the firm by the recipient that render made a good faith effort to do so.
the firm unable to meet the eligibility (2) If a prime contractor has executed
standards of this part; a subcontract with the firm before you
(2) Information or evidence not avail- have notified the firm of its ineligi-
able to you at the time the firm was bility, the prime contractor may con-
certified; tinue to use the firm on the contract
325
and may continue to receive credit to- within 90 days of the date of the recipi-
ward its DBE goal for the firms work. ents final decision, including informa-
In this case, or in a case where you tion and arguments concerning why
have let a prime contract to the DBE the recipients decision should be re-
that was later ruled ineligible, the por- versed. The Department may accept an
tion of the ineligible firms perform- appeal filed later than 90 days after the
ance of the contract remaining after date of the decision if the Department
you issued the notice of its ineligi- determines that there was good cause
bility shall not count toward your for the late filing of the appeal.
overall goal, but may count toward the
(1) If you are an appellant who is a
contract goal.
firm which has been denied certifi-
(3) Exception: If the DBEs ineligi-
bility is caused solely by its having ex- cation, whose certification has been re-
ceeded the size standard during the moved, whose owner is determined not
performance of the contract, you may to be a member of a designated dis-
continue to count its participation on advantaged group, or concerning whose
that contract toward overall and con- owner the presumption of disadvantage
tract goals. has been rebutted, your letter must
(k) Availability of appeal. When you state the name and address of any
make an administratively final re- other recipient which currently cer-
moval of a firms eligibility under this tifies the firm, which has rejected an
section, the firm may appeal the reapplication for certification from the
moval to the Department under 26.89. firm or removed the firms eligibility
[64 FR 5126, Feb. 2, 1999, as amended at 68 FR within one year prior to the date of the
35556, June 16, 2003] appeal, or before which an application
for certification or a removal of eligi-
26.89 What is the process for certifi- bility is pending. Failure to provide
cation appeals to the Department of this information may be deemed a fail-
Transportation?
ure to cooperate under 26.109(c).
(a)(1) If you are a firm that is denied (2) If you are an appellant other than
certification or whose eligibility is re- one described in paragraph (c)(1) of this
moved by a recipient, including SBA- section, the Department will request,
certified firms applying pursuant to and the firm whose certification has
the DOT/SBA MOU, you may make an been questioned shall promptly pro-
administrative appeal to the Depart-
vide, the information called for in
ment.
paragraph (c)(1) of this section. Failure
(2) If you are a complainant in an in-
eligibility complaint to a recipient (in- to provide this information may be
cluding the concerned operating ad- deemed a failure to cooperate under
ministration in the circumstances pro- 26.109(c).
vided in 26.87(c)), you may appeal to (d) When it receives an appeal, the
the Department if the recipient does Department requests a copy of the re-
not find reasonable cause to propose recipients complete administrative
moving the firms eligibility or, fol- record in the matter. If you are the re-
lowing a removal of eligibility pro- cipient, you must provide the adminis-
ceeding, determines that the firm is el- trative record, including a hearing
igible. transcript, within 20 days of the De-
(3) Send appeals to the following ad- partments request. The Department
dress: Department of Transportation, may extend this time period on the
Office of Civil Rights, 1200 New Jersey basis of a recipients showing of good
Avenue, SE., Washington, DC 20590. cause. To facilitate the Departments
(b) Pending the Departments deci- review of a recipients decision, you
sion in the matter, the recipients deci- must ensure that such administrative
sion remains in effect. The Department records are well organized, indexed,
does not stay the effect of the recipi- and paginated. Records that do not
ents decision while it is considering an
comport with these requirements are
appeal.
not acceptable and will be returned to
(c) If you want to file an appeal, you
must send a letter to the Department you to be corrected immediately. If an
326
appeal is brought concerning one re- tially prejudice the opportunity of the
cipients certification decision con- appellant to present its case.
cerning a firm, and that recipient re- (4) If it appears that the record is in-
lied on the decision and/or administra- complete or unclear with respect to
tive record of another recipient, this matters likely to have a significant
requirement applies to both recipients impact on the outcome of the case, the
involved. Department may remand the record to
(e) The Department makes its deci- you with instructions seeking clarifica-
sion based solely on the entire adminis- tion or augmentation of the record be-
trative record. The Department does fore making a finding. The Department
not make a de novo review of the mat-
may also remand a case to you for fur-
ter and does not conduct a hearing.
ther proceedings consistent with De-
The Department may supplement the
administrative record by adding rel- partment instructions concerning the
evant information made available by proper application of the provisions of
the DOT Office of Inspector General; this part.
Federal, state, or local law enforce- (5) The Department does not uphold
ment authorities; officials of a DOT op- your decision based on grounds not
erating administration or other appro- specified in your decision.
priate DOT office; a recipient; or a firm (6) The Departments decision is
or other private party. based on the status and circumstances
(f) As a recipient, when you provide of the firm as of the date of the deci-
supplementary information to the De- sion being appealed.
partment, you shall also make this in- (7) The Department provides written
formation available to the firm and notice of its decision to you, the firm,
any third-party complainant involved, and the complainant in an ineligibility
consistent with Federal or applicable complaint. A copy of the notice is also
state laws concerning freedom of infor- sent to any other recipient whose ad-
mation and privacy. The Department ministrative record or decision has
makes available, on request by the been involved in the proceeding (see
firm and any third-party complainant
paragraph (d) of this section). The De-
involved, any supplementary informa-
partment will also notify the SBA in
tion it receives from any source.
(1) The Department affirms your de- writing when DOT takes an action on
cision unless it determines, based on an appeal that results in or confirms a
the entire administrative record, that loss of eligibility to any SBA-certified
your decision is unsupported by sub- firm. The notice includes the reasons
stantial evidence or inconsistent with for the Departments decision, includ-
the substantive or procedural provi- ing specific references to the evidence
sions of this part concerning certifi- in the record that supports each reason
cation. for the decision.
(2) If the Department determines, (8) The Departments policy is to
after reviewing the entire administra- make its decision within 180 days of re-
tive record, that your decision was un- ceiving the complete administrative
supported by substantial evidence or record. If the Department does not
inconsistent with the substantive or make its decision within this period,
procedural provisions of this part con- the Department provides written no-
cerning certification, the Department tice to concerned parties, including a
reverses your decision and directs you statement of the reason for the delay
to certify the firm or remove its eligi- and a date by which the appeal decision
bility, as appropriate. You must take will be made.
the action directed by the Depart- (g) All decisions under this section
ments decision immediately upon re-
are administratively final, and are not
ceiving written notice of it.
subject to petitions for reconsider-
(3) The Department is not required to
reverse your decision if the Depart- ation.
ment determines that a procedural [64 FR 5126, Feb. 2, 1999, as amended at 65 FR

error did not result in fundamental un- 68951, Nov. 15, 2000; 68 FR 35556, June 16, 2003;
fairness to the appellant or substan- 73 FR 33329, June 12, 2008]
327
26.91 What actions do recipients take recipients are not required to certify
following DOT certification appeal the firm based on the DOT decision.
decisions?
(a) If you are the recipient from Subpart FCompliance and
whose action an appeal under 26.89 is Enforcement
taken, the decision is binding. It is not
binding on other recipients. 26.101 What compliance procedures
(b) If you are a recipient to which a apply to recipients?
DOT determination under 26.89 is ap-
(a) If you fail to comply with any re-
plicable, you must take the following
quirement of this part, you may be
action:
subject to formal enforcement action
(1) If the Department determines
under 26.103 or 26.105 or appropriate
that you erroneously certified a firm,
program sanctions by the concerned
you must remove the firms eligibility
operating administration, such as the
on receipt of the determination, with-
suspension or termination of Federal
out further proceedings on your part.
funds, or refusal to approve projects,
Effective on the date of your receipt of
grants or contracts until deficiencies
the Departments determination, the
are remedied. Program sanctions may
consequences of a removal of eligibility
include, in the case of the FHWA pro-
set forth in 26.87(i) take effect.
gram, actions provided for under 23
(2) If the Department determines
CFR 1.36; in the case of the FAA pro-
that you erroneously failed to find rea-
gram, actions consistent with 49 U.S.C.
sonable cause to remove the firms eli-
47106(d), 47111(d), and 47122; and in the
gibility, you must expeditiously com-
case of the FTA program, any actions
mence a proceeding to determine
permitted under 49 U.S.C. chapter 53 or
whether the firms eligibility should be
applicable FTA program requirements.
removed, as provided in 26.87.
(3) If the Department determines (b) As provided in statute, you will
that you erroneously declined to cer- not be subject to compliance actions or
tify or removed the eligibility of the sanctions for failing to carry out any
firm, you must certify the firm, effec- requirement of this part because you
tive on the date of your receipt of the have been prevented from complying
written notice of Departments deter- because a Federal court has issued a
mination. final order in which the court found
(4) If the Department determines that the requirement is unconstitu-
that you erroneously determined that tional.
the presumption of social and eco-
26.103 What enforcement actions
nomic disadvantage either should or apply in FHWA and FTA programs?
should not be deemed rebutted, you
must take appropriate corrective ac- The provisions of this section apply
tion as determined by the Department. to enforcement actions under FHWA
(5) If the Department affirms your and FTA programs:
determination, no further action is (a) Noncompliance complaints. Any
necessary. person who believes that a recipient
(c) Where DOT has upheld your de- has failed to comply with its obliga-
nial of certification to or removal of tions under this part may file a written
eligibility from a firm, or directed the complaint with the concerned oper-
removal of a firms eligibility, other ating administrations Office of Civil
recipients with whom the firm is cer- Rights. If you want to file a complaint,
tified may commence a proceeding to you must do so no later than 180 days
remove the firms eligibility under after the date of the alleged violation
26.87. Such recipients must not re- or the date on which you learned of a
move the firms eligibility absent such continuing course of conduct in viola-
a proceeding. Where DOT has reversed tion of this part. In response to your
your denial of certification to or re- written request, the Office of Civil
moval of eligibility from a firm, other Rights may extend the time for filing
recipients must take the DOT action in the interest of justice, specifying in
into account in any certification ac- writing the reason for so doing. The Of-
tion involving the firm. However, other fice of Civil Rights may protect the
328
confidentiality of your identity as pro- (2) Applicable findings in enforce-

vided in 26.109(b). Complaints under ment proceedings are binding on all
this part are limited to allegations of DOT offices.
violation of the provisions of this part.
(b) Compliance reviews. The concerned 26.105 What enforcement actions
operating administration may review apply in FAA programs?
the recipients compliance with this (a) Compliance with all requirements
part at any time, including reviews of of this part by airport sponsors and
paperwork and on-site reviews, as ap- other recipients of FAA financial as-
propriate. The Office of Civil Rights sistance is enforced through the proce-
may direct the operating administra-
dures of Title 49 of the United States
tion to initiate a compliance review
Code, including 49 U.S.C. 47106(d),
based on complaints received.
(c) Reasonable cause notice. If it ap- 47111(d), and 47122, and regulations im-
pears, from the investigation of a com- plementing them.
plaint or the results of a compliance (b) The provisions of 26.103(b) and
review, that you, as a recipient, are in this section apply to enforcement ac-
noncompliance with this part, the ap- tions in FAA programs.
propriate DOT office promptly sends (c) Any person who knows of a viola-
you, return receipt requested, a writ- tion of this part by a recipient of FAA
ten notice advising you that there is funds may file a complaint under 14
reasonable cause to find you in non- CFR part 16 with the Federal Aviation
compliance. The notice states the rea- Administration Office of Chief Counsel.
sons for this finding and directs you to
reply within 30 days concerning wheth- 26.107 What enforcement actions
er you wish to begin conciliation. apply to firms participating in the
(d) Conciliation. (1) If you request con- DBE program?
ciliation, the appropriate DOT office (a) If you are a firm that does not
shall pursue conciliation for at least 30, meet the eligibility criteria of subpart
but not more than 120, days from the D of this part and that attempts to par-
date of your request. The appropriate ticipate in a DOT-assisted program as a
DOT office may extend the conciliation DBE on the basis of false, fraudulent,
period for up to 30 days for good cause,
or deceitful statements or representa-
consistent with applicable statutes.
tions or under circumstances indi-
(2) If you and the appropriate DOT of-
cating a serious lack of business integ-
fice sign a conciliation agreement,
then the matter is regarded as closed rity or honesty, the Department may
and you are regarded as being in com- initiate suspension or debarment pro-
pliance. The conciliation agreement ceedings against you under 49 CFR part
sets forth the measures you have taken 29.
or will take to ensure compliance. (b) If you are a firm that, in order to
While a conciliation agreement is in ef- meet DBE contract goals or other DBE
fect, you remain eligible for FHWA or program requirements, uses or at-
FTA financial assistance. tempts to use, on the basis of false,
(3) The concerned operating adminis- fraudulent or deceitful statements or
tration shall monitor your implemen- representations or under circumstances
tation of the conciliation agreement indicating a serious lack of business in-
and ensure that its terms are complied tegrity or honesty, another firm that
with. If you fail to carry out the terms does not meet the eligibility criteria of
of a conciliation agreement, you are in subpart D of this part, the Department
noncompliance. may initiate suspension or debarment
(4) If you do not request conciliation, proceedings against you under 49 CFR
or a conciliation agreement is not part 29.
signed within the time provided in (c) In a suspension or debarment pro-
paragraph (d)(1) of this section, then
ceeding brought under paragraph (a) or
enforcement proceedings begin.
(b) of this section, the concerned oper-
(e) Enforcement actions. (1) Enforce-

ating administration may consider the
ment actions are taken as provided in
this subpart. fact that a purported DBE has been
329
certified by a recipient. Such certifi- result in a denial of appropriate admin-

cation does not preclude the Depart- istrative due process to other parties,
ment from determining that the pur- the complainant must be advised for
ported DBE, or another firm that has the purpose of waiving the privilege.
used or attempted to use it to meet Complainants are advised that, in some
DBE goals, should be suspended or circumstances, failure to waive the
debarred. privilege may result in the closure of
(d) The Department may take en- the investigation or dismissal of the
forcement action under 49 CFR Part 31, proceeding or hearing. FAA follows the
Program Fraud and Civil Remedies, procedures of 14 CFR part 16 with re-
against any participant in the DBE spect to confidentiality of information
program whose conduct is subject to in complaints.
such action under 49 CFR part 31. (c) Cooperation. All participants in
(e) The Department may refer to the the Departments DBE program (in-
Department of Justice, for prosecution cluding, but not limited to, recipients,
under 18 U.S.C. 1001 or other applicable DBE firms and applicants for DBE cer-
provisions of law, any person who tification, complainants and appel-
makes a false or fraudulent statement lants, and contractors using DBE firms
in connection with participation of a to meet contract goals) are required to
DBE in any DOT-assisted program or cooperate fully and promptly with DOT
otherwise violates applicable Federal and recipient compliance reviews, cer-
statutes. tification reviews, investigations, and
other requests for information. Failure
26.109 What are the rules governing to do so shall be a ground for appro-
information, confidentiality, co- priate action against the party in-
operation, and intimidation or re- volved (e.g., with respect to recipients,
taliation? a finding of noncompliance; with re-
(a) Availability of records. (1) In respect to DBE firms, denial of certifi-
sponding to requests for information cation or removal of eligibility and/or
concerning any aspect of the DBE pro- suspension and debarment; with re-
gram, the Department complies with spect to a complainant or appellant,
provisions of the Federal Freedom of dismissal of the complaint or appeal;
Information and Privacy Acts (5 U.S.C. with respect to a contractor which uses
552 and 552a). The Department may DBE firms to meet goals, findings of
make available to the public any infor- non-responsibility for future contracts
mation concerning the DBE program and/or suspension and debarment).
release of which is not prohibited by (d) Intimidation and retaliation. If you
Federal law. are a recipient, contractor, or any
(2) Notwithstanding any provision of other participant in the program, you
Federal or state law, you must not re- must not intimidate, threaten, coerce,
lease information that may be reason- or discriminate against any individual
ably be construed as confidential busi- or firm for the purpose of interfering
ness information to any third party with any right or privilege secured by
without the written consent of the firm this part or because the individual or
that submitted the information. This firm has made a complaint, testified,
includes applications for DBE certifi- assisted, or participated in any manner
cation and supporting documentation. in an investigation, proceeding, or
However, you must transmit this infor- hearing under this part. If you violate
mation to DOT in any certification ap- this prohibition, you are in noncompli-
peal proceeding under 26.89 in which ance with this part.
the disadvantaged status of the indi- [64 FR 5126, Feb. 2, 1999, as amended at 68 FR
vidual is in question. 35556, June 16, 2003]
(b) Confidentiality of information on
complainants. Notwithstanding the pro- APPENDIX A TO PART 26GUIDANCE
visions of paragraph (a) of this section, CONCERNING GOOD FAITH EFFORTS
the identity of complainants shall be I. When, as a recipient, you establish a
kept confidential, at their election. If contract goal on a DOT-assisted contract, a

such confidentiality will hinder the in- bidder must, in order to be responsible and/
vestigation, proceeding or hearing, or or responsive, make good faith efforts to
330
Office of the Secretary of Transportation Pt. 26, App. A
meet the goal. The bidder can meet this re- breaking out contract work items into eco-
quirement in either of two ways. First, the nomically feasible units to facilitate DBE
bidder can meet the goal, documenting com- participation, even when the prime con-
mitments for participation by DBE firms tractor might otherwise prefer to perform
sufficient for this purpose. Second, even if it these work items with its own forces.
doesnt meet the goal, the bidder can docu- C. Providing interested DBEs with ade-
ment adequate good faith efforts. This means quate information about the plans, specifica-
that the bidder must show that it took all tions, and requirements of the contract in a
necessary and reasonable steps to achieve a timely manner to assist them in responding
DBE goal or other requirement of this part to a solicitation.
which, by their scope, intensity, and appro- D. (1) Negotiating in good faith with inter-
priateness to the objective, could reasonably ested DBEs. It is the bidders responsibility
be expected to obtain sufficient DBE partici- to make a portion of the work available to
pation, even if they were not fully success- DBE subcontractors and suppliers and to se-
ful. lect those portions of the work or material
II. In any situation in which you have es- needs consistent with the available DBE sub-
tablished a contract goal, part 26 requires contractors and suppliers, so as to facilitate
you to use the good faith efforts mechanism DBE participation. Evidence of such negotia-
of this part. As a recipient, it is up to you to tion includes the names, addresses, and tele-
make a fair and reasonable judgment wheth- phone numbers of DBEs that were consid-
er a bidder that did not meet the goal made ered; a description of the information pro-
adequate good faith efforts. It is important vided regarding the plans and specifications
for you to consider the quality, quantity, for the work selected for subcontracting; and
and intensity of the different kinds of efforts evidence as to why additional agreements
that the bidder has made. The efforts em- could not be reached for DBEs to perform the
ployed by the bidder should be those that work.
one could reasonably expect a bidder to take (2) A bidder using good business judgment
if the bidder were actively and aggressively would consider a number of factors in negoti-
trying to obtain DBE participation sufficient ating with subcontractors, including DBE
to meet the DBE contract goal. Mere pro subcontractors, and would take a firms
forma efforts are not good faith efforts to price and capabilities as well as contract
meet the DBE contract requirements. We goals into consideration. However, the fact
emphasize, however, that your determina- that there may be some additional costs in-
tion concerning the sufficiency of the firms volved in finding and using DBEs is not in
good faith efforts is a judgment call: meeting itself sufficient reason for a bidders failure
quantitative formulas is not required. to meet the contract DBE goal, as long as
III. The Department also strongly cautions such costs are reasonable. Also, the ability
you against requiring that a bidder meet a or desire of a prime contractor to perform
contract goal (i.e., obtain a specified amount the work of a contract with its own organiza-
of DBE participation) in order to be awarded tion does not relieve the bidder of the re-
a contract, even though the bidder makes an sponsibility to make good faith efforts.
adequate good faith efforts showing. This Prime contractors are not, however, required
rule specifically prohibits you from ignoring to accept higher quotes from DBEs if the
bona fide good faith efforts. price difference is excessive or unreasonable.
IV. The following is a list of types of ac- E. Not rejecting DBEs as being unqualified
tions which you should consider as part of without sound reasons based on a thorough
the bidders good faith efforts to obtain DBE investigation of their capabilities. The con-
participation. It is not intended to be a man- tractors standing within its industry, mem-
datory checklist, nor is it intended to be ex- bership in specific groups, organizations, or
clusive or exhaustive. Other factors or types associations and political or social affili-
of efforts may be relevant in appropriate ations (for example union vs. non-union em-
cases. ployee status) are not legitimate causes for
A. Soliciting through all reasonable and the rejection or non-solicitation of bids in
available means (e.g. attendance at pre-bid the contractors efforts to meet the project
meetings, advertising and/or written notices) goal.
the interest of all certified DBEs who have F. Making efforts to assist interested DBEs
the capability to perform the work of the in obtaining bonding, lines of credit, or in-
contract. The bidder must solicit this inter- surance as required by the recipient or con-
est within sufficient time to allow the DBEs tractor.
to respond to the solicitation. The bidder G. Making efforts to assist interested
must determine with certainty if the DBEs DBEs in obtaining necessary equipment, sup-
are interested by taking appropriate steps to plies, materials, or related assistance or
follow up initial solicitations. services.
B. Selecting portions of the work to be per- H. Effectively using the services of avail-
formed by DBEs in order to increase the able minority/women community organiza-

likelihood that the DBE goals will be tions; minority/women contractors groups;
achieved. This includes, where appropriate, local, state, and Federal minority/women
331
Pt. 26, App. A 49 CFR Subtitle A (10110 Edition)
business assistance offices; and other organi- reasonably raise the question of whether,
zations as allowed on a case-by-case basis to with additional reasonable efforts, the appar-
provide assistance in the recruitment and ent successful bidder could have met the
placement of DBEs. goal. If the apparent successful bidder fails
V. In determining whether a bidder has to meet the goal, but meets or exceeds the
made good faith efforts, you may take into average DBE participation obtained by other
account the performance of other bidders in bidders, you may view this, in conjunction
meeting the contract. For example, when the with other factors, as evidence of the appar-
apparent successful bidder fails to meet the ent successful bidder having made good faith
contract goal, but others meet it, you may efforts.
332
Office of the Secretary of Transportation Pt. 26, App. B
APPENDIX B TO PART 26UNIFORM REPORT OF DBE AWARDS OR COMMITMENTS AND

PAYMENTS FORM
333
ER16JN03.051</GPH>
Pt. 26, App. C 49 CFR Subtitle A (10110 Edition)
[64 FR 5126, Feb. 2, 1999, as amended at 68 FR 35556, June 16, 2003]
APPENDIX C TO PART 26DBE BUSINESS program, via the provision of training and
DEVELOPMENT PROGRAM GUIDELINES assistance from the recipient.
(A) Each firm that participates in a recipi-
The purpose of this program element is to ents business development program (BDP)
further the development of DBEs, including program is subject to a program term deter-
but not limited to assisting them to move mined by the recipient. The term should con-
into non-traditional areas of work and/or sist of two stages; a developmental stage and
compete in the marketplace outside the DBE a transitional stage.
334
ER16JN03.052</GPH>
Office of the Secretary of Transportation Pt. 26, App. C
(B) In order for a firm to remain eligible (1) The aggregate dollar value of contracts
for program participation, it must continue to be sought under the DBE program, reflect-
to meet all eligibility criteria contained in ing compliance with the business plan;
part 26. (2) The aggregate dollar value of contracts
(C) By no later than 6 months of program to be sought in areas other than traditional
entry, the participant should develop and areas of DBE participation;
submit to the recipient a comprehensive (3) The types of contract opportunities
business plan setting forth the participants being sought, based on the firms primary
business targets, objectives and goals. The line of business; and
participant will not be eligible for program (4) Such other information as may be re-
benefits until such business plan is sub- quested by the recipient to aid in providing
mitted and approved by the recipient. The effective business development assistance to
approved business plan will constitute the the participant.
participants short and long term goals and
(G) Program participation is divided into
the strategy for developmental growth to the
two stages; (1) a developmental stage and (2)
point of economic viability in non-tradi-
a transitional stage. The developmental
tional areas of work and/or work outside the
stage is designed to assist participants to
DBE program.
overcome their social and economic dis-
(D) The business plan should contain at
advantage by providing such assistance as
least the following:
may be necessary and appropriate to enable
(1) An analysis of market potential, com-
them to access relevant markets and
petitive environment and other business
strengthen their financial and managerial
analyses estimating the program partici-
skills. The transitional stage of program par-
pants prospects for profitable operation dur-
ticipation follows the developmental stage
ing the term of program participation and
after graduation from the program. and is designed to assist participants to
overcome, insofar as practical, their social
(2) An analysis of the firms strengths and
and economic disadvantage and to prepare
weaknesses, with particular attention paid
the participant for leaving the program.
to the means of correcting any financial,
managerial, technical, or labor conditions (H) The length of service in the program
which could impede the participant from re- term should not be a pre-set time frame for
ceiving contracts other than those in tradi- either the developmental or transitional
tional areas of DBE participation. stages but should be figured on the number
(3) Specific targets, objectives, and goals of years considered necessary in normal pro-
for the business development of the partici- gression of achieving the firms established
pant during the next two years, utilizing the goals and objectives. The setting of such
results of the analysis conducted pursuant to time could be factored on such items as, but
paragraphs (C) and (D)(1) of this appendix; not limited to, the number of contracts, ag-
(4) Estimates of contract awards from the gregate amount of the contract received,
DBE program and from other sources which years in business, growth potential, etc.
are needed to meet the objectives and goals (I) Beginning in the first year of the transi-
for the years covered by the business plan; tional stage of program participation, each
and participant should annually submit for in-
(5) Such other information as the recipient clusion in its business plan a transition man-
may require. agement plan outlining specific steps to pro-
mote profitable business operations in areas
(E) Each participant should annually re-
view its currently approved business plan other than traditional areas of DBE partici-
with the recipient and modify the plan as pation after graduation from the program.
may be appropriate to account for any The transition management plan should be
changes in the firms structure and redefined submitted to the recipient at the same time
needs. The currently approved plan should be other modifications are submitted pursuant
considered the applicable plan for all pro- to the annual review under paragraph (E) of
gram purposes until the recipient approves this section. The plan should set forth the
in writing a modified plan. The recipient same information as required under para-
should establish an anniversary date for re- graph (F) of steps the participant will take
view of the participants business plan and to continue its business development after
contract forecasts. the expiration of its program term.
(F) Each participant should annually fore- (J) When a participant is recognized as suc-
cast in writing its need for contract awards cessfully completing the program by sub-
for the next program year and the suc- stantially achieving the targets, objectives
ceeding program year during the review of and goals set forth in its program term, and
its business plan conducted under paragraph has demonstrated the ability to compete in
(E) of this appendix. Such forecast should be the marketplace, its further participation
included in the participants business plan. within the program may be determined by
The forecast should include: the recipient.
335
Pt. 26, App. D 49 CFR Subtitle A (10110 Edition)
(K) In determining whether a concern has (B)(1) Any mentor-protege relationship
substantially achieved the goals and objec- shall be based on a written development
tives of its business plan, the following fac- plan, approved by the recipient, which clear-
tors, among others, should be considered by ly sets forth the objectives of the parties and
the recipient: their respective roles, the duration of the ar-
(1) Profitability; rangement and the services and resources to
(2) Sales, including improved ratio of non- be provided by the mentor to the protege.
traditional contracts to traditional-type The formal mentor-protege agreement may
contracts; set a fee schedule to cover the direct and in-
(3) Net worth, financial ratios, working direct cost for such services rendered by the
capital, capitalization, access to credit and mentor for specific training and assistance
capital; to the protege through the life of the agree-
(4) Ability to obtain bonding; ment. Services provided by the mentor may
(5) A positive comparison of the DBEs be reimbursable under the FTA, FHWA, and
business and financial profile with profiles of FAA programs.
non-DBE businesses in the same area or (2) To be eligible for reimbursement, the
similar business category; and mentors services provided and associated
(6) Good management capacity and capa- costs must be directly attributable and prop-
bility. erly allowable to specific individual con-
(L) Upon determination by the recipient tracts. The recipient may establish a line
that the participant should be graduated item for the mentor to quote the portion of
from the developmental program, the recipi- the fee schedule expected to be provided dur-
ent should notify the participant in writing ing the life of the contract. The amount
of its intent to graduate the firm in a letter claimed shall be verified by the recipient and
of notification. The letter of notification paid on an incremental basis representing
should set forth findings, based on the facts, the time the protege is working on the con-
for every material issue relating to the basis
tract. The total individual contract figures
of the program graduation with specific rea-
accumulated over the life of the agreement
sons for each finding. The letter of notifica-
shall not exceed the amount stipulated in
tion should also provide the participant 45
the original mentor/protege agreement.
days from the date of service of the letter to
(C) DBEs involved in a mentor-protege
submit in writing information that would ex-
agreement must be independent business en-
plain why the proposed basis of graduation is
tities which meet the requirements for cer-
not warranted.
tification as defined in subpart D of this
(M) Participation of a DBE firm in the pro-
part. A protege firm must be certified before
gram may be discontinued by the recipient
it begins participation in a mentor-protege
prior to expiration of the firms program
arrangement. If the recipient chooses to rec-
term for good cause due to the failure of the
ognize mentor/protege agreements, it should
firm to engage in business practices that will
establish formal general program guidelines.
promote its competitiveness within a reason-
These guidelines must be submitted to the
able period of time as evidenced by, among
operating administration for approval prior
other indicators, a pattern of inadequate per-
to the recipient executing an individual
formance or unjustified delinquent perform-
contractor/ subcontractor mentor-protege
ance. Also, the recipient can discontinue the
agreement.
participation of a firm that does not actively
pursue and bid on contracts, and a firm that,
without justification, regularly fails to re-
APPENDIX E TO PART 26INDIVIDUAL
spond to solicitations in the type of work it DETERMINATIONS OF SOCIAL AND
is qualified for and in the geographical areas ECONOMIC DISADVANTAGE
where it has indicated availability under its
The following guidance is adapted, with
approved business plan. The recipient should
minor modifications, from SBA regulations
take such action if over a 2-year period a
concerning social and economic disadvan-
DBE firm exhibits such a pattern.
tage determinations (see 13 CFR 124.103(c)
APPENDIX D TO PART 26MENTOR- and 124.104).
PROTEGE PROGRAM GUIDELINES SOCIAL DISADVANTAGE
(A) The purpose of this program element is I. Socially disadvantaged individuals are
to further the development of DBEs, includ- those who have been subjected to racial or
ing but not limited to assisting them to ethnic prejudice or cultural bias within
move into non-traditional areas of work and/ American society because of their identities
or compete in the marketplace outside the as members of groups and without regard to
DBE program, via the provision of training their individual qualities. Social disadvan-
and assistance from other firms. To operate tage must stem from circumstances beyond
a mentor-protege program, a recipient must their control. Evidence of individual social

obtain the approval of the concerned oper- disadvantage must include the following ele-
ating administration. ments:
336
Office of the Secretary of Transportation Pt. 26, App. E
(A) At least one objective distinguishing III. Under the laws concerning social and
feature that has contributed to social dis- economic disadvantage, people with disabil-
advantage, such as race, ethnic origin, gen- ities are not a group presumed to be dis-
der, disability, long-term residence in an en- advantaged. Nevertheless, recipients should
vironment isolated from the mainstream of look carefully at individual showings of dis-
American society, or other similar causes advantage by individuals with disabilities,
not common to individuals who are not so- making a case-by-case judgment about
cially disadvantaged; whether such an individual meets the cri-
(B) Personal experiences of substantial and teria of this appendix. As public entities sub-
chronic social disadvantage in American so- ject to Title II of the ADA, recipients must
ciety, not in other countries; and also ensure their DBE programs are acces-
(C) Negative impact on entry into or ad- sible to individuals with disabilities. For ex-
vancement in the business world because of ample, physical barriers or the lack of appli-
the disadvantage. Recipients will consider cation and information materials in acces-
any relevant evidence in assessing this ele- sible formats cannot be permitted to thwart
ment. In every case, however, recipients will the access of potential applicants to the cer-
consider education, employment and busi- tification process or other services made
ness history, where applicable, to see if the available to DBEs and applicants.
totality of circumstances shows disadvan-
tage in entering into or advancing in the ECONOMIC DISADVANTAGE
business world.
(1) Education. Recipients will consider such (A) General. Economically disadvantaged
factors as denial of equal access to institu- individuals are socially disadvantaged indi-
tions of higher education and vocational viduals whose ability to compete in the free
training, exclusion from social and profes- enterprise system has been impaired due to
sional association with students or teachers, diminished capital and credit opportunities
denial of educational honors rightfully as compared to others in the same or similar
earned, and social patterns or pressures line of business who are not socially dis-
which discouraged the individual from pur- advantaged.
suing a professional or business education. (B) Submission of narrative and financial in-
(2) Employment. Recipients will consider formation.
such factors as unequal treatment in hiring, (1) Each individual claiming economic dis-
promotions and other aspects of professional advantage must describe the conditions
advancement, pay and fringe benefits, and which are the basis for the claim in a nar-
other terms and conditions of employment; rative statement, and must submit personal
retaliatory or discriminatory behavior by an financial information.
employer or labor union; and social patterns (2) [Reserved]
or pressures which have channeled the indi- (C) Factors to be considered. In considering
vidual into non-professional or non-business diminished capital and credit opportunities,
fields. recipients will examine factors relating to
(3) Business history. The recipient will con- the personal financial condition of any indi-
sider such factors as unequal access to credit vidual claiming disadvantaged status, in-
or capital, acquisition of credit or capital cluding personal income for the past two
under commercially unfavorable cir- years (including bonuses and the value of
cumstances, unequal treatment in opportu- company stock given in lieu of cash), per-
nities for government contracts or other
sonal net worth, and the fair market value of
work, unequal treatment by potential cus-
all assets, whether encumbered or not. Re-
tomers and business associates, and exclu-
cipients will also consider the financial con-
sion from business or professional organiza-
dition of the applicant compared to the fi-
tions.
nancial profiles of small businesses in the
II. With respect to paragraph I.(A) of this
same primary industry classification, or, if
appendix, the Department notes that people
not available, in similar lines of business,
with disabilities have disproportionately low
incomes and high rates of unemployment. which are not owned and controlled by so-
Many physical and attitudinal barriers re- cially and economically disadvantaged indi-
main to their full participation in education, viduals in evaluating the individuals access
employment, and business opportunities to credit and capital. The financial profiles
available to the general public. The Ameri- that recipients will compare include total
cans with Disabilities Act (ADA) was passed assets, net sales, pre-tax profit, sales/work-
in recognition of the discrimination faced by ing capital ratio, and net worth.
people with disabilities. It is plausible that (D) Transfers within two years.
many individuals with disabilitiesespe- (1) Except as set forth in paragraph (D)(2)
cially persons with severe disabilities (e.g., of this appendix, recipients will attribute to
significant mobility, vision, or hearing im- an individual claiming disadvantaged status

pairments)may be socially and economi- any assets which that individual has trans-
cally disadvantaged. ferred to an immediate family member, or to
337
Pt. 26, App. E 49 CFR Subtitle A (10110 Edition)
a trust, a beneficiary of which is an imme- with the customary recognition of special
diate family member, for less than fair mar- occasions, such as birthdays, graduations,
ket value, within two years prior to a con- anniversaries, and retirements.
cerns application for participation in the (3) In determining an individuals access to
DBE program, unless the individual claiming capital and credit, recipients may consider
disadvantaged status can demonstrate that any assets that the individual transferred
the transfer is to or on behalf of an imme- within such two-year period described by
diate family member for that individuals paragraph (D)(1) of this appendix that are
education, medical expenses, or some other not considered in evaluating the individuals
form of essential support. assets and net worth (e.g., transfers to char-
(2) Recipients will not attribute to an indi- ities).
vidual claiming disadvantaged status any as-
sets transferred by that individual to an im- [64 FR 5126, Feb. 2, 1999, as amended at 68 FR
mediate family member that are consistent 35559, June 16, 2003]
338
Office of the Secretary of Transportation Pt. 26, App. F
APPENDIX F TO PART 26UNIFORM CERTIFICATION APPLICATION FORM

339
ER16JN03.053</GPH>
Pt. 26, App. F 49 CFR Subtitle A (10110 Edition)
340
ER16JN03.054</GPH>
341
ER16JN03.055</GPH>
342
ER16JN03.056</GPH>
343
ER16JN03.057</GPH>
344
ER16JN03.058</GPH>
345
ER16JN03.059</GPH>
346
ER16JN03.060</GPH>
347
ER16JN03.061</GPH>
348
ER16JN03.062</GPH>
349
ER16JN03.063</GPH>
350
ER16JN03.064</GPH>
351
ER16JN03.065</GPH>
[68 FR 35559, June 16, 2003]

352
ER16JN03.066</GPH>

CFR 2010 Title49 Vol1 Part26

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CFR 2010 Title49 Vol1 Part26

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Office of the Secretary of Transportation Pt.

25.545 Pre-employment inquiries. Title VI of the Civil Rights Act of 1964

26.43 Can recipients use set-asides or quotas

intimidation or retaliation? and V of the Intermodal Surface Trans-

nity), Eskimo, or Aleut blood, or a including letters of credit or loan guar-

DOT/SBA Memorandum of Under- ians, and whose business activities will

of Hawaii which is a not-for-profit or- recipients part to use DOT financial

Race-conscious measure or program is Portuguese culture or origin, regard-

cludes persons of Mexican, Puerto feating or substantially impairing ac-

the DBE community and at least one

Subpart BAdministrative Re- You must circulate the statement

(3) Other mechanisms, consistent establish a DBE business development

participants (e.g., applying legal and method could be reasonably expected

lished by the FHWA, FTA, or FAA, as dresses to which comments may be

possessions, and commonwealths. The form with their own forces);

cerned operating administration, in

this part for guidance in determining (1) As part of this reconsideration,

(A) To be a regular dealer, the firm Subpart DCertification Standards

(see 26.61(c)), you have a well founded

(D) With respect to assets held in until he or she makes an individual

(2) In the case of a partnership, 51 tivities as an employee. Debt instru-

note payable to the firm or an owner cation, or an affiliate of that firm;

(iii) Engaged in an ongoing business a gift, or transfer without adequate

(1) A socially and economically dis- of the potential DBE firm.

disadvantaged individual may control where leasing equipment is a normal

contractor or other party that com- to maintain an employer-employee re-

Example 6: The holding company, in addi- partner, or principal officers; and

cation as a condition of continuing to timely manner, you will be deemed to

plainant and the firm in writing of this

ment determines that a procedural [64 FR 5126, Feb. 2, 1999, as amended at 65 FR

confidentiality of your identity as pro- (2) Applicable findings in enforce-

(e) Enforcement actions. (1) Enforce-

certified by a recipient. Such certifi- result in a denial of appropriate admin-

kept confidential, at their election. If contract goal on a DOT-assisted contract, a

formed by DBEs in order to increase the able minority/women community organiza-

APPENDIX B TO PART 26UNIFORM REPORT OF DBE AWARDS OR COMMITMENTS AND

[64 FR 5126, Feb. 2, 1999, as amended at 68 FR 35556, June 16, 2003]

a mentor-protege program, a recipient must their control. Evidence of individual social

significant mobility, vision, or hearing im- an individual claiming disadvantaged status

APPENDIX F TO PART 26UNIFORM CERTIFICATION APPLICATION FORM

[68 FR 35559, June 16, 2003]

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