The General Counsel of the Department of Transportation has reviewed these questions and answers and approved them as consistent with the language and intent of 49 CFR Part 23. These questions and answers therefore represent the institutional position of the Department of Transportation.
These questions and answers provide guidance and information for compliance with the provisions under 49 CFR part 23, pertaining to the implementation of the Department's disadvantaged business enterprise program. Like all guidance material, these questions and answers are not, in themselves, legally binding or mandatory, and do not constitute regulations. They are issued to provide an acceptable means, but not the only means, of compliance with Part 23. While these questions and answers are not mandatory, they are derived from extensive DOT, recipient, and contractor experience and input concerning the determination of compliance with Part 23.
Section 23.75 - Can recipients enter into long-term, exclusive agreements with concessionaires?
The purpose of this guidance on Long-Term, Exclusive (LTE) agreements for concessions is to provide information and direction to airport sponsors, ACDBE program staff, stakeholders, and all other interested parties on how to determine whether an agreement is considered a LTE agreement subject to the prohibition against such agreements in the ACDBE program rules.
Section 23.31; 27.67(b)(2) - Personal Net Worth
Question: If the owner of a DBE or ACDBE certified firm or applicant firm has a personal net worth of less than $1.32 million, does that necessarily mean that the recipient must regard the owner as being economically disadvantaged?
Answer: No. A person cannot be regarded as economically disadvantaged if he or she exceeds the $1.32 million personal net worth (PNW) cap. However, there may be some cases in which an individual whose PNW is less than $1.32 million may properly be regarded as not being economically disadvantaged.
- The legal and policy rationale behind the PNW provision of the rule is that a program designed to assist socially and economically disadvantaged individuals should not include people who can reasonably be regarded as having accumulated wealth too substantial to need the program’s assistance.
- Consequently, in determining whether an individual is economically disadvantaged, a recipient is entitled to look not only at the individual’s PNW but also at his or her overall economic situation to make a reasonable determination of whether the individual is fairly regarded as being economically disadvantaged.
- Consistent with Small Business Administration practice in the 8(a) program, it is appropriate for recipients to review the total fair market value of the individual’s assets and determine if that level appears to be substantial and indicates an ability to accumulate substantial wealth.
- For example, an individual with very high assets and significant liabilities may, in accounting terms, have a PNW of less than $750,000. However, the person’s assets (e.g., a very expensive house, a yacht, extensive real or personal property holdings) may lead to a conclusion that he or she is not economically disadvantaged. The recipient can rebut the individual’s presumption of economic disadvantage under these circumstances, as provided in sec. 26.67(b)(2).
- This guidance applies to determinations of economic disadvantage under both 49 CFR Part 23 and 49 CFR Part 26.
Section 23.37 12/9/2011
Question: May a recipient or UCP require a firm certified as a DBE under Part 26 to complete an entire new application to be certified as an ACDBE under part 23?
Answer: No. Section 23.37 provides that as a recipient or UCP, you are required to presume that a firm certified in your State as a DBE under Part 26 meets size, disadvantage, ownership, and control requirements for certification as an ACDBE under Part 23.
- A recipient or UCP must check to make sure a Part 23 applicant meets the Part 23 PNW cap.
- There is only one additional determination that you need to make in order to certify such a firm as an ACDBE: whether the disadvantaged owners of the Part 26-certified firm can control the activities of the firm with respect to its participation in the ACDBE program.
- You are not required to certify a DBE firm as an ACDBE if the firm does not do work relevant to the airport concessions program (e.g., operating a concession or providing goods and services to concessions).
- In summary, when you receive an ACDBE application that has a current Part 26 DBE certification in your State, you should only seek information on two subjects: the firm owner’s PNW and the disadvantaged owner’s ability to control the firm with respect to airport concession activities. You may not require the firm to file a complete new application.