Pivoting Your Business in the Age of COVID-19 – Changing Your DBE Certification to Reflect Your New Areas of Business

June 24, 2020

When your business obtains Disadvantaged Business Enterprise (DBE) certification, you are certified under one or more NAICS codes.  The NAICS (North American Industry Classification System) is used to classify businesses using a six-digit number that corresponds to the primary type of work a company performs.  A table of NAICS codes can be found here: https://www.naics.com/naics-drilldown-table/.

COVID-19 has caused many businesses to pivot and expand to other types of work.  If your company has DBE certification, you will want to make sure to update and/or change the NAICS code that you used for your certification.  This requires completing a simple form.  Pennsylvania’s form can be found here: https://www.septa.org/business/dbe/pdf/PA-UCP%20DBE_ACDBE-NAICS-Code-Modification-Request-Form_Aug%202015.pdf.

You must include with your form verification and evidence that your company has provided or is providing the services or products related to the new NAICS code.  This is important, because under 49 C.F.R. § 26.71(n), in order to become certified in an additional type of work, you need to show that the socially and economically disadvantaged owners can control the firm regarding that type of work.

Even if your company is already certified as a DBE, the agency may deny your request to add or change NAICS codes.  For example, a company previously registered as a residential real estate firm requested to add a new NAICS codes, including Hotels (except Casino Hotels) and Motels.  The company could not show that it had any experience, including managerial and technical competence, directly related to operating a hotel or motel.  Its only evidence of work in that area was merely booking hotel rooms for government agencies.  The U.S. Department of Transportation found that this did not meet the required experience and denied the request to add the NAICS code.  In re: Brian Hall Properties, 18-0109, March 19, 2019.

Before submitting your company’s request for DBE certification under an additional NAICS code, you should make sure that your company is performing that work and can provide evidence of its experience.

If you have any questions about adding an NAICS number or questions about the DBE certification process, please contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.