What is a Disadvantaged Business Enterprise? How Can My Company Become a DBE?

June 10, 2020
By Danielle Dietrich
Posted in Business Services, Women and Diverse-Owned Businesses

Is your business at least 51% owned and controlled by a woman and/or minority?  If so, your business may qualify to be certified as a Disadvantaged Business Enterprise- otherwise known as a DBE.  This blog is the first in a continuing series that will discuss the various diverse business certifications available.  These certifications can potentially assist companies with obtaining additional work and access to projects.

DBEs are for-profit small businesses where individuals who are considered socially and economically disadvantaged own at least 51% of the business and also control the management and daily business operations.  Groups that are presumed to be “socially and economically disadvantaged” include women, African Americans, Hispanics, Native Americans and Subcontinent Asian Americans.  Other individuals can apply and be evaluated on a case-by-case basis but must present clear evidence of their social and economic disadvantage.  The business must meet the Small Business Administration’s guidelines to be considered small based on their industry.  Owners must have a total net worth of less than $1.32 million (some exceptions to assets apply and will be discussed in a later blog) and the business must have average annual gross receipts under $23.98 million.

DBE certification is through a federal program but is administered at the state level by agencies receiving U.S. Department of Transportation financial assistance.  In Pennsylvania, DBEs are certified through the Pennsylvania Unified Certification Program.  More information can be found here:  https://www.dotsbe.pa.gov/PAUCPWeb/paucp/viewHome.do.

Working with an attorney that is familiar with the process can help your business avoid common pitfalls in the certification process.  I assist clients with certification in a number of ways, including:

  • I offer an initial consultation to discuss the certification process and how it may be helpful to your business. This is a way to explore the certification process and find out if is right for your business.
  • I review corporate documents such as Operating Agreements or By-Laws to make sure that they show that the woman or minority owner controls the business. Certification applications are frequently derailed by issues involving corporate documents that could have been corrected prior to submission.
  • I perform a full review of the application and supporting materials prior to submission and identify potential problem areas and corrections.
  • I prepare clients for the on-site visits required of all applicants. If a client so desires, I can attend the on-site visit.
  • If your certification is denied for any reason, I can provide an assessment of the issues for an appeal.
  • I represent clients in appealing certification denials, including to the United States Department of Transportation.

If your business has questions about the DBE Certification, Application or Appeal, please feel free to contact Danielle Dietrich at 412-227-0284 or ddietrich@smgglaw.com.