Regulatory Updates/Legislation

DBE Proposed Rule Changes - December 2012

The U.S. Department of Transportation on September 6 issued a notice of proposed rulemaking (NPRM) that would make a number of substantial changes to the Disadvantaged Business Enterprise (DBE) regulations.  Comments were due on December 24, 2012.  The GCA's comments to the NPRM can be viewed here

Article from Goldberg & Connolly: Federal DBE Regulations Crediting DBE “Participation” for Certified Suppliers and Truckers - May 2012

DBE Rule Changes - January 2011

The U.S. Department of Transportation (DOT) issued a number of changes to the Disadvantaged Business Enterprise (DBE) regulations that will impact contractors working on FHWA, FAA and FTA funded contracts.  A copy of the federal register notice can be found here.

The significant changes are as follows:

Counting Purchases from Prime Contractors- DOT left unchanged its current regulations that allow prime contractors to count towards meeting their DBE contract goal material purchased by a DBE from a non-DBE source. However, the regulation does not allow the prime to count the cost of the material if it is purchased from the prime.

Termination of DBE Firms- DOT clarified in its regulations that the prime contractor can terminate a DBE contract only for good cause – not simply for the convenience of the prime – and with the written consent of the agency. The regulation spells out what constitutes “good cause” including failure of the DBE to comply with contract terms.  Other items that constitute “good cause” include:

•             The listed DBE fails or refuses to execute a written contract

•             The listed DBE fails or refuses to perform work consistent with normal industry standards (unless bad faith of the prime contractor affects the DBEs ability to perform)

•             The listed DBE fails to meet the non-discriminatory bond requirements

•             The listed DBE becomes bankrupt, insolvent, or exhibits credit unworthiness

•             The listed DBE becomes ineligible to work on public works because of suspension and debarment proceedings

•             The agency determines that the DBE is not a responsible contractor

•             The listed DBE voluntarily withdraws from the project and provides written notice of such

•             The listed DBE is ineligible to receive DBE credit for the type of work required

•             The listed DBE owner dies or is disable with the result that the contractor cannot complete its work

•             Other documented good cause. Note that good cause does not exist if prime contractor seeks to terminate DBE so that it can self-perform or substitute another DBE or non-DBE firm.  Also means that   the basis for terminating the DBE must be documented and the recipient must have good documentation.

Personal Net Worth- DOT increased the personal net worth cap for the DBE owner to still remain eligible for the program from $750,000 to $1.31 million. The original cap was established in 1989 and has not been raised since. The new cap is intended to reflect inflation.

Interstate Certification- DOT has amended its regulation to make it easier for DBEs certified in one state to have their certification adopted by other states.

Accountability on Goal Achievement- DOT amended the regulations to require that should a state fail to achieve its annual goal that it must justify the failure and devise a strategy for correcting the failure in the future.

Program Oversight- DOT amended the regulations to require states to more closely monitor contract goal implementation. The new requirements require states to closely examine actual DBE participation on jobs by increasing their scrutiny of paperwork submissions and by site visits.DOT suggests that states combine visits at job sites to monitor work progress and adherence to specifications to include DBE compliance reviews.

Small Business Provisions- DOT altered the regulations to make programs that foster small business participation in state DOT contracts an integral part of the state’s DBE program. DOT states that increased involvement by small businesses in general will lead to increased DBE participation. Examples of small business programs include: setting aside contracts for exclusive bidding by small businesses, requiring the prime contractor on contracts that do not have DBE goal requirements to offer subcontracting opportunities in packages of a size that would encourage small business participation and ensuring that a reasonable number of contracts going out for bid are of a size that would favor small businesses.


Diesel Emissions Reduction Act (DERA)

The DERA regulations require that all on and off road vehicles used on New York State agency and public authoirty projects are retrofit with the best available retrofit technology by December 31, 2010.  The DERA regulations can be found on the New York State Department of Environmental Conservation Website and scrolling down to Part 248.

NYSDOT EI- DERA Regulations

EI 10-007- This EI announces this issuance of new Diesel Emissions Reduction Act (DERA) regulations and procedures for contractors to comply with. It can be found by clicking EI10-007

2010 Business Diversification Act

This bill brings several key changes to m/wbe subcontracting. To view the summary of this Act please click here.

Prompt Payment Interest Rate

The new prompt payment interest rate is 3.25% effective on payments from January 1, 2010 through June 30, 2010. 

Hiring Incentives to Restore Employment Act

The Hiring Incentives to Restore Employment (HIRE) Act, enacted March 18, 2010, includes several important provisions relating to federal transportation investment.  However, among the measure's non-transportation provisions are new tax benefits for employers who hire or retain workers.

The Internal Revenue Service (IRS) posted new information, questions and answers, and forms on April 7, 2010 about those provisions on its website. These should be helpful to transportation construction industry employers who are considering taking advantage of these provisions. The link to the relevant IRS web page is as follows:,,id=220745,00.html. Note that there are several links within the page that will provide further information.

 NYSDOT 2010 DBE Program Plan

The NYS Department of Transportation has issued a draft 2010 Disadvantaged Business Enterprise program plan. A copy of the draft plan and DOT power point presentation on the plan can be found here.

Department of Environmental Conservation Diesel Retrofit Requirement
S6609/A9709 Transportation and Economic Development and Environmental Conservation Article VII

Part C: Establishes a waiver process so that transit systems and state agencies and authorities that operate diesel vehicles, and those that operate diesel vehicles on their behalf, do not have to install pollution devices on older vehicles if those vehicles will be retired within 3 years. If passed this proposal would take effect immediately and would require DEC to iissue waivers for vehicles that will be taken out of service by December 31, 2013.

Environmental Retrofit Conference

The GCA with our partners at LICA and CIC held an Environmental Retrofit Conference on February 9, 2010. The US Environmental Protection Agency, NYS Department of Environmental Conservation, Westchester County Department of Health, NYC Department of Environmental Protection, NYS Department of Transportation, Metropolitan Transportation Authority, and Port Authority of NY & NJ all gave presentations explaining their role in retrofitting and how they work with contractors through the process.

Copies of the presentations are available here.