In three separate notices issued last week, the United States Department of Transportation (DOT) issued guidance regarding its Disadvantaged Business Enterprise (DBE) regulations at 49 CFR Parts 26 and 23.
DBE Goal Setting on Three-Year Schedule
On February 3, 2010, DOT issued a final rule that amends its requirements under 49 CFR Part 26 with respect to goal setting for DBE participation in DOT-funded projects. In general, rather than establishing goals annually, 49 CFR 26.45 has been amended to provide that goals must be set on a three-year basis, similar to DOT’s requirements for Airport Concession Disadvantaged Business Enterprises (ACDBEs). The schedule for such filings will be posted on the Web site of the appropriate “operating administration” within DOT (e.g., the Federal Aviation Administration in the case of airports).
Recognizing that there is the potential for significant changes over a three-year period, the amended regulations permit goals to be expressed as a percentage of funds for a particular grant or group of grants or projects. Further, the amendments to Section 26.45 require that if any “significant adjustment” is made to the goals during the three-year period, such adjustment must be submitted to the appropriate operating administration within DOT for approval. Submission of DBE goals and approval of such goals by DOT in accordance with Part 26 is a condition of eligibility for DOT financial assistance. (Docket No. OST-2010-0021; see 75 Fed. Reg. No. 22 at 5535; Feb. 3, 2010.)
In addition, DOT is seeking comments on several additional proposals relating to its DBE program, described below:
ACDBE “Sunset” Termination
First, DOT is proposing to remove the sunset provision currently included in the ACDBE regulations at 49 CFR § 23.7, and replace it with periodic program reviews of the ACDBE requirements. Currently, the ACDBE regulations would expire by their terms on April 21, 2010. DOT is seeking comments by March 5, 2010 on whether the “strict scrutiny” legal requirements would be met by replacing the sunset provision with a more general periodic review requirement. If so, DOT seeks additional input on whether a specific interval for such reviews should be established or, as proposed by DOT, if the interval for such review should be left to DOT’s discretion. (Docket ID number OST-2010-0022; see 75 Fed. Reg., No. 22 at 5551; Feb. 3, 2010.)
The notice also requests input by November 1, 2010 on any and all changes that would be useful in helping DOT, airports, ACDBEs, and other airport-related businesses achieve the ACDBE program’s objectives. The notice states that DOT is convinced that the Part 23 and 26 ACDBE and DBE programs, respectively, remain necessary to redress discrimination and its effects in airport programs and to ensure a level playing field. DOT seeks stakeholder input to determine whether to issue modifications to the ACDBE regulations, in addition to removing the current sunset requirement. This is a golden opportunity for airports and other ACDBE stakeholders to propose changes to the ACDBE regulations to remedy problems in the program that have been identified to date. (Docket ID number OST-2010-0022; see 75 Fed. Reg., No. 22 at 5551; Feb. 3, 2010.)
Finally, DOT seeks comments by April 5, 2010 on:
(Docket ID number OST-2010-0025; see 75 Fed. Reg., No. 21 at 5369; Feb. 2, 2010.)
In each case, Robert C. Ashby, Deputy Assistant General Counsel for Regulation and Enforcement, may be contacted for further information. Comments the DOT notices may be submitted through the electronic docket system at www.regulations.gov.
Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and colleagues.
If you have any questions about this alert or would like to discuss the topic further, please contact your Foley attorney or the following individuals:
David Y. Bannard