Frequently asked questions

A DBE is a for-profit small business concern that is at least 51 percent owned by one or more individuals who are both socially and economically disadvantaged. For example, in the case of a corporation, such individuals must own at least 51 percent of each class of voting stock outstanding and 51 percent of the aggregate of all stock outstanding. Also, the management and daily business operations of a DBE business must be controlled by one or more of the socially and economically disadvantaged individuals who own it.

Eligibility requirements for certification as a DBE are stated in 49 CFR, Part 26, Subpart D-Certification Standards. The following six requirements must be proved by a DBE applicant, but they do not cover all the requirements found in 49 CFR, Part 26. 

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Social and Economic Disadvantage: To qualify as a Disadvantaged Business Enterprise (DBE), the owner must be a U.S. Citizen or resident alien, meeting the Federal definition of social and economic disadvantage outlined in 49 CFR, Part 26.67. Presumptive groups include women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Americans, or other minorities identified as disadvantaged. Rules for determining social and economic disadvantage extend to domestic partnerships and civil unions legally recognized under state law. Additionally, guidance is provided for the treatment of assets transferred within two years of certification application or an annual program review.

Personal Net Worth: DBE eligibility requires a personal net worth (PNW) of less than $1,320,000. Excluded from the PNW calculation are ownership interest in the applicant's firm and equity in the primary residence. Economic disadvantage claims may be denied if an individual demonstrates the ability to accumulate substantial wealth, irrespective of a PNW below $1.32 million.

Business Size Standard: A qualifying firm must be a small business according to the Small Business Administration (SBA) definition, with annual gross receipts not exceeding $23,980,000 in the previous three fiscal years (exceptions for airport concessions).

Ownership: For-profit small businesses seeking DBE status must have socially and economically disadvantaged individuals owning at least 51 percent and controlling both management and daily business operations.

Independence: DBE status requires a business to operate independently, without compromising its independence and control in areas such as personnel, facilities, equipment, financial support, and other resources.

Management and Control: Socially and economically disadvantaged DBE owners must have the power to direct management and policies, making day-to-day and long-term decisions. Delegation of duties must be revocable, and owners must possess required licenses or credentials. Mere changes in business structure for DBE compliance may not be sufficient proof of management and control.

To qualify for the DBE Program, individuals must be U.S. citizens or lawfully admitted permanent residents, owning 51% or more of a small business. They need to establish social and economic disadvantage within regulatory definitions and demonstrate control over the business. General guidelines, derived from 49 CFR Part 26, aid in determining eligibility:

1. Ownership: The business must be 51% owned by socially and economically disadvantaged individuals.
2. "Socially Disadvantaged": Eligibility includes presumptive groups (Black Americans, Hispanic Americans, Native Americans, etc.) or individuals establishing social and economic disadvantage individually. Appendix E of 49 CFR Part 26 provides details on determining disadvantaged status.
3. Personal Net Worth (PNW): Economically disadvantaged status requires a PNW below $1.32 million, excluding ownership interest in the firm and primary residence equity. Specific exclusions apply to airport concessionaires (See 49 CFR Part 23).
4. Business Size Determination: The firm, including affiliates, must meet SBA size standards, with annual gross receipts not exceeding $22.41 million in the previous three fiscal years.
5. Independence: The business must maintain independence and control without reliance on other firms.
6. Control: A disadvantaged owner seeking certification must have the power to direct management and policies, along with relevant competence and experience in the business.
7. Burden of Proof Allocation: Applicants bear the burden of proving eligibility, providing a preponderance of evidence for group membership, individual disadvantaged status, business size, independence, ownership, and control.

For detailed program requirements and certification procedures, refer to Regulations 49 CFR Parts 23 and 26.

 Certification Process Overview:

1. Application Received:
   
   • The initial step involves the submission of the application.

1. Completeness Check:
   
   • The application is examined for completeness.
   • If incomplete, a letter is sent to the applicant, requesting missing information.

1. On-Site Review Scheduled:
   
   • Once the application is complete, an on-site review is scheduled at the applicant's office.
   • Interviews with firm owners are conducted during the on-site review.

1. Material Review by Investigator:
   
   • The investigator reviews all materials submitted by the applicant.
   • An on-site report is considered in determining eligibility.
   • Work classification(s) requested are reviewed, and a recommendation is made on the adequacy of the applicant's resources for those areas.

1. Eligibility Decision:
   
   • The investigator evaluates the application, considering eligibility standards and work classifications.
   • A decision is made on the firm's eligibility for certification in the DBE program.

1. Certification Approval Notification:
   
   • If the application is approved, the applicant receives written notification of the certification approval.

 No. There is no cost for the certification process.

The link to download the DBE certification application is as follows: KYTC DBE application.

Firms located outside of Kentucky Transportation Cabinet that are certified in their home state and applying for DBE certification in the state of Kentucky Transportation Cabinet must submit the interstate application, please follow link to DBE Interstate application.

Certification is ongoing, however, once certified, the business will be required to submit an annual "Annual Affidavit of No Change" and supporting documentation on the anniversary date of its original certification.  This form affirms there is no change that has occurred that impacts the company’s DBE status.

DBE goals are set for projects funded by the federal government. If you are seeking opportunities for these contracts, we encourage you to apply for a Kentucky Transportation Cabinet (KYTC) DBE certification. 

Certainly, individuals identified as socially and economically disadvantaged, comprising 51 percent of the firm's ownership, are required to complete the application. Please follow this link for the KYTC Net Worth Application: KYTC Net Worth Application. 

The KYTC Equal Opportunity Office aims to:

• Guarantee fair treatment and prevent discrimination in the award and management of contracts.
• Establish an equitable platform where Disadvantaged Business Enterprises (DBEs) can compete on a level playing field for contracts.
• Ensure that the Department's DBE Program is precisely tailored to its objectives.
• Verify that only firms meeting eligibility standards are eligible to participate as DBEs.
• Contribute to the growth of firms, enabling them to compete effectively in the broader marketplace beyond the DBE Program.

Some advantages to becoming a DBE certified business include:

• DBEs may be utilized to satisfy a DBE goal on any project with funding from the U.S. Department of Transportation (i.e. airports, transit agencies).
• DBEs receive statewide exposure for contracting opportunities through the DBE Directory, which provides one list of all DBE firms certified in the State of Kentucky Transportation Cabinet. Prime contractors and consultants are strongly encouraged to use the DBE Directory to identify subcontractors/sub-consultants for their projects.
• DBEs may participate in a variety of supportive services such as training and technical assistance if they are construction and consulting firms involved in a road, highway or bridge construction or maintenance related business. Many of these services are at no cost or reduced cost to certified DBEs.o this item.

The Department manages a DBE Directory that includes all firms eligible for participation as Disadvantaged Business Enterprises (DBEs). This directory provides essential details such as the firm's name, address, telephone number, and the specific type of work for which the firm has been certified as a DBE. Accessible to the public online, the Kentucky Transportation Cabinet DBE UCP Directory is regularly updated to reflect any additions or changes to the listings.

Certainly, as a DBE prime contractor, it is essential to adhere to the good faith efforts requirements outlined in 49 CFR Part 26. This involves counting the full value of work to be undertaken by the DBE's in-house capabilities, along with work committed to be carried out by DBE subcontractors.

DBE prime contractors are obligated to conduct outreach efforts comparable to other bidders during the bidding process. Additionally, it is crucial for them to document their good faith efforts, especially in cases where they may not meet the contract goals entirely. This documentation ensures transparency and compliance with regulations.

To clarify, obtaining DBE certification does not necessitate prior pre-qualification. However, for contractors intending to bid on road, bridge, or public transportation construction contracts exceeding $2,000,000.00, pre-qualification with the Department is mandatory. The pre-qualification involves submitting an application, and successful applicants receive a Certificate of Qualification. This certificate specifies the approved work classes and assigns a Maximum Capacity Rating in dollars, streamlining the contractor's eligibility for specific projects. 

The Construction Prequalification Committee is scheduled to convene at least monthly to examine TC 14‐1 forms and the Application for Certificate of Eligibility (Exhibit 9002). During these meetings, eligible applicants are granted a Certificate of Eligibility (Exhibit 9005). The committee is also prepared to assemble at additional times as required, particularly to assess new or renewal applications and to address appeals seeking reconsideration of previously issued Certificates of Eligibility.

In cases where an applicant is looking to bid on a federal‐aid project, the committee commits to reviewing the application within 15 days from its submission upon the applicant's request.

Current DBEs can update their information in the UCP database by submitting the annual "No Change Affidavit – For Continuing DBE Certification." This process involves completing the section of the form titled "Significant Changes" and providing an explanation of any changes in the business. It's necessary to attach a separate sheet of paper detailing the changes and submit it along with the No Change Affidavit document. This annual update allows DBEs to confirm that there have been no significant changes in their business information for the purpose of continuing DBE certification. 

Current DBEs seeking additional NAICS codes for their company can initiate the process by submitting the annual "No Change Affidavit – For Continuing DBE Certification." In the designated section of the form titled "New Work Area/Services – REQUEST ADDITIONAL NAICS CODES," DBE companies can make their request. The submission should include copies of three executed contracts, specifying the NAICS Code if known.

For further guidance and information on NAICS codes, the recommendation is to review the NAICS website at the following address: http://www.sba.gov/size/. This process enables DBEs to update and expand their business classification in line with the services they provide.

The UCP (Unified Certification Program) offers a streamlined process, often referred to as "one-stop shopping," for disadvantaged businesses seeking certification. Once a business meets the DBE certification requirements and becomes certified through the UCP, it becomes eligible to fulfill the DBE goal requirements on any project funded by the U.S. Department of Transportation. This eliminates the necessity for multiple DBE certifications when working with recipients of funding from the U.S. Department of Transportation, providing a more efficient and centralized certification process for eligible businesses. 

If your firm is an existing DBE, the following documentation is required for the application process:

1. A comprehensive copy of your application form, along with all supporting documents and any information submitted to your home state or any other state regarding your certification. This includes affidavits of no change, notices of changes, and any correspondence related to your application or DBE status.
2. All notices or correspondence from states other than your home state concerning your status as an applicant or certified DBE, including information and documentation if your certification was denied or if your firm was decertified.
3. If you have appealed your certification with the Department of Transportation (DOT), you must provide your appeal letter and DOT's response.
4. Submission of an Interstate Affidavit, sworn by the firm's owners before an individual authorized by State law to administer oaths. This affidavit is executed under the penalty of perjury of the laws of the United States.

Note: For firms located outside the Kentucky Transportation Cabinet but certified in their home state and applying for DBE certification in Kentucky, completing an Interstate Affidavit is mandatory.

***The processing time for the application and supporting documentation is approximately 90 days from the date of submission.***