State continues to offer guidance for entrepreneurs
Kenneth Canty, a Georgia infrastructure company owner, hopes to help restore the Francis Scott Key Bridge by repurposing the large bridge structures for environmental restoration.
But like his colleagues in states including Virginia, his hope of winning a contract is at greater risk after the U.S. Department of Transportation removed the presumption that women- or minority-owned businesses are socially and economically disadvantaged from its Disadvantaged Business Enterprise (DBE) program in October.
The business development program was designed to minimize discrimination and level the contract bidding field for business owners who have historically faced those obstacles. Last week, Canty and others from around the country urged federal lawmakers to reauthorize the program in the Surface Infrastructure bill set to expire in the fall.
“In the heavy civil (construction) arena, and particularly demolition contractors, there’s not that many people who do it, and there’s even far fewer DBEs who do it,” said Canty. “However, there’s a lot of work. So it would make sense that Congress would continue to support a program that develops businesses to do the work that America needs to have done.”
Advocates of the program say that if it is not reauthorized, funding and legal authority could lapse after the termination of existing contracts and the loss of new opportunities.
The agency chopped the program after a federal in Kentucky temporarily blocked enforcement of its race- and gender-based contracting rules. In 2023, two Indiana-based construction contractors —Mid-America Milling Co., LLC and Bagshaw Trucking, Inc.— argued that the DBE program’s preferences favor some firms, violating equal protection principles under the U.S. Constitution.
Now, business owners are required to recertify and prove they have faced real disadvantages, regardless of race or gender. Business owners told the Mercury the program helps minority and women-owned businesses compete in construction, which contributes significantly to the U.S. economy.
Supporters of the program have asked the court to dismiss the case after regulatory changes removed the contested provisions. No decision has been reached.
Roundtable discussion
Last Thursday, some business owners and advocates met in Washington D.C. with Democratic U.S. Reps. Rick Larsen, Jesús Garcia and Hank Johnson for a roundtable on the program’s importance. All three are members of the U.S. House Transportation and Infrastructure Committee.
They discussed the challenges arising from recent changes, chiefly delays in recertification, reduced contract awards and increased competition. Business owners added that the program requires clear, consistent guidelines and greater support from the Department of Transportation to ensure its continuity and effectiveness.
No Virginia representative sits on the U.S. House Transportation and Infrastructure Committee.
However, House members, including leaders from the House Committees on Transportation and Infrastructure and Small Business, as well as Democratic Reps. Bobby Scott and Jennifer McClellan, both of Virginia, signed a Nov. 17 letter cautioning the agency to “tread carefully” with the department’s plans for the program.
“Changes to the implementation of the DBE program threaten the survival of more than 50,000 existing small businesses across every state and affect the future path for small business participation in federally assisted transportation contracts,” the letter states.
“An approach to implementation of the Department’s Interim Final Rule (IFR) that seeks to punish minority- and women-owned small businesses will add chaos, cost, and delay to transportation projects and will have ripple effects throughout the construction industry,” lawmakers wrote.
The DBE advocates, including Monique Young, regional vice president of government affairs for the National Association of Minority Contractors, appreciated the time with lawmakers.
“I felt like they actually heard our story and not just heard it, willing to do something about it, and even if that means going across the aisles to find an amicable solution for all of us to work together,” Young said.
Lauren Chmielowiec, president of Upstate Steel in Buffalo, New York, said reauthorizing the program is vital to the company’s survival.
“My employees are extremely important to me, and the program directly impacts all of us at my business.”
Virginia’s role
In January, the Virginia Department of Transportation told the Mercury that it had paused measuring progress toward DBE goals following the federal agency’s deauthorization of the program.
However, VDOT said it has continued to provide guidance to the transportation community, held information sessions to help businesses understand and comply with the new federal requirements, and collaborated with the Virginia Department of Small Business and Supplier Diversity (DSBSD) and the Metropolitan Washington Airport Authority (MWAA) to assist firms in understanding and preparing personal narratives required for consideration.
VDOT said it recognizes DBE and ACDBE firms as “vital partners in the transportation industry.”
However, Virginia’s Disadvantaged Business Enterprise Transportation Association told the Mercury earlier this year that VDOT needs to do more to boost opportunities for diverse business owners.
Another concern for states is a change to the Unified Certification program making the certification process race-and gender-neutral. This program allows small, disadvantaged businesses to get certified once and be recognized by multiple transportation agencies.
DBE program advocates worry the change has made states more likely to face lawsuits because the evaluations are now more subjective, increasing liability concerns.
On March 2, VDOT received approval for the Virginia Unified Certification Program to move forward with the reevaluation process.
DSBSD and MWAA will begin reevaluations of submitted personal narratives and personal net worth statements from previously certified firms starting March 9.
In a statement on Friday, Queen Crittendon, civil rights administrator for VDOT, urged all DBE and ACDBE firms to apply for recertification. She said that members of the Virginia UCP are available to offer technical assistance to firms throughout this process.
What’s next
In January 2025, the congressional transportation committee started hearings to review the needs of all transportation programs.
Business owners hope Congress will reauthorize the DBE program as part of the Surface Infrastructure Bill, a key committee priority, before it expires Sept. 30.