Regulatory Alert: DOT Releases Proposed Rulemaking to Update DBE and ACDBE Programs
July 20, 2022
The U.S. Department of Transportation (DOT) released on July 20 a proposed rule that would make a wide range of changes to the regulations governing the Disadvantaged Business Enterprise (DBE) program and the Airport Concession Disadvantaged Business Enterprise (ACDBE) program. Airports must comply with both programs if they receive federal financial assistance through the Airport Improvement Program (AIP). The proposal is part of the Administration's broader goals to advance equity and expand opportunities for DBE firms in government funding programs. 
While the proposal includes new requirements in the programs, such as expanded data reporting, DOT also proposed providing airports with increased flexibility in other areas, including the certification of DBE firms. Specific highlights and details from the proposal are provided below. DOT contends that the proposed changes will lead to over $62 million in cost savings over a 10-year period for grant recipients that are required to implement DBE and ACDBE programs.
AAAE will be carefully reviewing the 231-page proposal in the coming weeks and working with members to respond before the September 19 comment deadline. 
Background. Under AIP grant assurances, airports are required to administer DBE and ACDBE programs in accordance with the regulations outlined in 49 C.F.R. Parts 23 and 26. Since the 1980s, DOT has made occasional updates to the regulations governing the DBE and ACDBE programs, with the last notable revision coming in 2014. Over the past 8 years, DOT has held listening sessions with industry stakeholders, conducted internal research, reviewed feedback in formal research projects, and revised procedures to accommodate the coronavirus pandemic emergency. The stated objective of this rulemaking is to update some outdated practices and adjust requirements to ensure growth with both programs. 
Initial Review of Proposed Changes. DOT's proposal to update the regulations governing the DBE and ACDBE programs are extensive, and airports are highly encouraged to review the documents and each of the proposed changes. However, AAAE has conducted an initial review and highlighted some of the changes that DOT is proposing, including: 
• Allowing the use of unsworn declarations under penalty of perjury when submitting documentation instead of requiring sworn affidavits and notarization;
• Expanding the amount of data that must be reported to DOT and FAA for the DBE and ACDBE programs;
• Adjusting the criteria that airports must use to determine whether a firm constitutes a “small business“ that is eligible for participation in these programs;
• Raising the personal net worth (PNW) limit from $1.32 million to $1.60 million; adjusting how the PNW amount is calculated; and establishing a mechanism for continual upward adjustments without a formal rulemaking;
• Changing the process for determining whether an individual is considered “socially and economically disadvantaged,“ including how an airport/certifier would rebut a presumption of economic or social disadvantage;
• Considerably updating the rules and processes for determining if a socially and economically disadvantaged individual or individuals “owns“ the firm and provides these individuals with more flexibility in demonstrating that they “control“ the firm;
• Updating certification provisions with less prescriptive rules to give airports more flexibility when determining eligibility, such as allowing virtual on-site visits to certify that a firm qualifies as a DBE;
• Adjusting procedures for appealing a denial of certification to the DOT; suspending a certification; and decertifying a DBE firm;
• Clarifying many definitions in Part 23, which governs the ACDBE program, including “Airport Concession Disadvantaged Business Enterprise,“ “concession,“ “personal net worth,“ among others;
• Adding new requirements in ACDBE programs for airports to (a) create an element that is specifically designed to promote small business participation; and (b) develop and maintain a list of ACDBE and non-ACDBEs who seek concession opportunities; and
• Adjusting the requirements for an airport to obtain FAA's approval of a long-term, exclusive agreement for concessions, and requests feedback on the definition of “long-term agreement“ (whether long term should constitute 5 or 10 years).
What's Next? DOT's proposed rule will be published in the Federal Register tomorrow, triggering a 60-day comment period. Comments from industry and the public will be due to DOT on or before Monday, September 19. Individuals who are responsible for ensuring their airport's compliance with the DBE and ACDBE program requirements are highly encouraged to review the proposal. AAAE will be soliciting input from members to ensure we communicate the airport community's perspectives on the NPRM to the department. 
The U.S. Department of Transportation (DOT) released on July 20 a proposed rule that would make a wide range of changes to the regulations governing the Disadvantaged Business Enterprise (DBE) program and the Airport Concession Disadvantaged Business Enterprise (ACDBE) program. Airports must comply with both programs if they receive federal financial assistance through the Airport Improvement Program (AIP). The proposal is part of the Administration's broader goals to advance equity and expand opportunities for DBE firms in government funding programs. 
While the proposal includes new requirements in the programs, such as expanded data reporting, DOT also proposed providing airports with increased flexibility in other areas, including the certification of DBE firms. Specific highlights and details from the proposal are provided below. DOT contends that the proposed changes will lead to over $62 million in cost savings over a 10-year period for grant recipients that are required to implement DBE and ACDBE programs.
AAAE will be carefully reviewing the 231-page proposal in the coming weeks and working with members to respond before the September 19 comment deadline. 
Background. Under AIP grant assurances, airports are required to administer DBE and ACDBE programs in accordance with the regulations outlined in 49 C.F.R. Parts 23 and 26. Since the 1980s, DOT has made occasional updates to the regulations governing the DBE and ACDBE programs, with the last notable revision coming in 2014. Over the past 8 years, DOT has held listening sessions with industry stakeholders, conducted internal research, reviewed feedback in formal research projects, and revised procedures to accommodate the coronavirus pandemic emergency. The stated objective of this rulemaking is to update some outdated practices and adjust requirements to ensure growth with both programs. 
Initial Review of Proposed Changes. DOT's proposal to update the regulations governing the DBE and ACDBE programs are extensive, and airports are highly encouraged to review the documents and each of the proposed changes. However, AAAE has conducted an initial review and highlighted some of the changes that DOT is proposing, including: 
• Allowing the use of unsworn declarations under penalty of perjury when submitting documentation instead of requiring sworn affidavits and notarization;
• Expanding the amount of data that must be reported to DOT and FAA for the DBE and ACDBE programs;
• Adjusting the criteria that airports must use to determine whether a firm constitutes a “small business“ that is eligible for participation in these programs;
• Raising the personal net worth (PNW) limit from $1.32 million to $1.60 million; adjusting how the PNW amount is calculated; and establishing a mechanism for continual upward adjustments without a formal rulemaking;
• Changing the process for determining whether an individual is considered “socially and economically disadvantaged,“ including how an airport/certifier would rebut a presumption of economic or social disadvantage;
• Considerably updating the rules and processes for determining if a socially and economically disadvantaged individual or individuals “owns“ the firm and provides these individuals with more flexibility in demonstrating that they “control“ the firm;
• Updating certification provisions with less prescriptive rules to give airports more flexibility when determining eligibility, such as allowing virtual on-site visits to certify that a firm qualifies as a DBE;
• Adjusting procedures for appealing a denial of certification to the DOT; suspending a certification; and decertifying a DBE firm;
• Clarifying many definitions in Part 23, which governs the ACDBE program, including “Airport Concession Disadvantaged Business Enterprise,“ “concession,“ “personal net worth,“ among others;
• Adding new requirements in ACDBE programs for airports to (a) create an element that is specifically designed to promote small business participation; and (b) develop and maintain a list of ACDBE and non-ACDBEs who seek concession opportunities; and
• Adjusting the requirements for an airport to obtain FAA's approval of a long-term, exclusive agreement for concessions, and requests feedback on the definition of “long-term agreement“ (whether long term should constitute 5 or 10 years).
What's Next? DOT's proposed rule will be published in the Federal Register tomorrow, triggering a 60-day comment period. Comments from industry and the public will be due to DOT on or before Monday, September 19. Individuals who are responsible for ensuring their airport's compliance with the DBE and ACDBE program requirements are highly encouraged to review the proposal. AAAE will be soliciting input from members to ensure we communicate the airport community's perspectives on the NPRM to the department. 
