DBE/MBE/WBE CONTRACTS AND REGULATIONS

For decades, federal, state and local governments have established programs designed to maximize opportunities for firms owned by minorities, women and disadvantaged individuals to compete for and perform contracts.  Generally, the term “disadvantaged business enterprises” (DBE) refers to a small business concern owned or controlled by a socially disadvantaged individual.  While regulations vary, socially disadvantaged individuals generally include women and minorities.  Therefore, DBE’s include Minority Owned Businesses (“MBE”) and Women Businesses Enterprise (“WBE”) and the discussion on DBE rules in this “playbook” apply to MBE and WBE

If you understand DBE rules and regulations, you have a competitive advantage over those firms that do not because firms complying with DBE rules and regulations increase their chance of winning bids.  Furthermore, if you do not comply with DBE rules and regulations you face serious consequences including contract termination, fines, disbarment, and, in the most egregious cases, criminal prosecution.

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CASE STUDY

Project Type – Highway construction.

Issue – The client was a DBE trucking company that was being threatened by a larger competitor who claimed that the DBE was violating the Department of Transportation’s DBE rules and regulations related to leasing of trucks from a non-DBE firm.

Background – Our client was a small trucking firm performing work on a project for the Florida Department of Transportation.  A larger competitor claimed that the firm was violating the law because it was leasing trucks from a non-DBE firm.  The larger competitor threatened to “blow the whistle” on the client because the client was allegedly  not performing a commercially useful function.  The client was obviously nervous because violating DBE rules can result in criminal prosecution.

Solution.  We calmed the client down when we explained that what the client was doing did not violate the law.  We armed the client with the appropriate section of the federal regulations that permitted the client to lease a certain number of trucks from a non-DBE firm. The larger competitor no longer threatened the client.