Changes in Your Disadvantaged Business Enterprise? What, When and How to Report

March 3, 2022
By Danielle Dietrich
Posted in Business Services, Women and Diverse-Owned Businesses

Most Disadvantaged Business Enterprise (DBE) certified businesses are generally aware that they have some sort of duty to report changes in their business at some point.  Some think that changes only need to be reported in the yearly affidavit. This is not the case. This blog will explain what, when, and how changes must be reported to your certifying agency.

What to Report:

Section 26.83(i) requires that a DBE report all changes that may change its eligibility for DBE status, including:

  • Changes to the size of the business (under the Small Business Administration (SBA) regulations – either number of employees or gross receipts, depending on the NAICS code).
  • Changes to disadvantaged status. For example, did a disadvantaged owner exceed the maximum personal net worth allowance?
  • Changes to ownership.
  • Changes in control of the business, such as significant changes in job duties, changes to the corporate bylaws, etc.

When to Report:

Section 28.83(i)(3) requires that a certified DBE report all changes within 30 days of the change.

How to Report:

Under Section 28.83(i)(3), the changes must be reported via a sworn affidavit (i.e. witnessed by a notary).  You must also provide supporting documentation evidencing the change.  For example, if the bylaws changed, you must submit a copy of the new bylaws.  If a new owner bought into the company, you must provide those documents.

What Happens if You Don’t Report?

If your business does not report these changes within 30 days, you will jeopardize your DBE certification.  The certifying agency may immediately suspend your DBE certification without the required notice and hearing process set forth in Section 26.87(d).  During the suspension, the DBE may not be considered to meet a contract goal, and any work it does on a contract received under the suspension may not be counted towards project goals.  These reporting requirements are taken very seriously.

If you or your company needs advice regarding DBE certifications, including reporting changes, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.