Important Changes Are Coming to OMWBE Certification Programs

U.S. Department of Transportation (USDOT) Issues Rule Change

On Tuesday, April 9, 2024, the USDOT issued a final rule modernizing the Disadvantaged Business Enterprise (DBE) program and Airport Concessions DBE (ACDBE) program regulations.

The major objectives of this final rule include modernizing existing principles to:

• Improve provisions for the benefit of program participants
• Reduce burdens on firms and recipients
• Grow firm capacity and owner wealth
• Improve program integrity, visibility, and data collected by the USDOT

Read the full press release and final rule details for more info:

What does this mean for OMWBE Certification?

We are working with the Washington State Department of Transportation (WSDOT) to implement Federal Certification program changes in May 2024.

Many aspects of our State Certification program match USDOT eligibility requirements for DBE certification. We have started the process of updating Chapter 326-20 of Washington's Administrative Code (WAC), which defines OMWBE certification rules. Program changes are planned for July 2024.

Certification Eligibility Change Summary

The following information is an overview, and may not cover every change to OWMBE's certification eligibility requirements. We will share more detailed information in the coming weeks.

• Economic Disadvantage
  • Personal Net Worth limit increase from $1.32 million to $2.047 million.
  • Personal Net Worth calculation excludes retirement assets, and will be routinely adjusted with the new limit available at: https://www.transportation.gov/DBEPNW
• Ownership
  • Socially and Economically Disadvantaged Owner (SEDO)’s acquired ownership at fair value with a form of ‘investments’ (investment defined as unconditional, full risk of loss, significant outlay of SEDO’s own money).
  • SEDO must show they receive benefits and burdens proportionate to their ownership shares.
  • SEDO must maintain investment proportionately to other owners/investors.
  • Purchase = monetary, not trade of property, services, contributions of time/labor, or loan to business.
  • If ownership was received as gift, transferor must immediately become uninvolved with business (and any other business contracting with applying DBE business).
  • Borrowed funds may count as investment only if SEDO has repaid at least 15% net of total value of investment by the time firm applies for certification with SEDO’s own money and if SEDO is sole debtor.
• Control
  • Firm must have operations in business (NAICS code) for which it seeks certification at the time it applies.
  • SEDO must be final decision-maker.
  • Governing business documents must not require consent/concurrence from non-SEDO.
  • SEDO must hold highest officer position in business.
  • Expertise: at least one SEDO must have overall understanding of the business and its essential operations sufficient to make sound managerial decisions not primarily of an administrative nature.
  • Independence: must be viable as ongoing business without relying on shared personnel, resources, facilities, equipment, finances, etc. with another business and must not regularly use another firm’s business-critical vehicles, equipment, or machinery.
• Size
  • Size limitations will be updated regularly and made available at: https://www.transportation.gov/DBEsizestandards
  • Receipts and revenue must be calculated on cash basis. Accrual basis is not acceptable for DBE-ACDBE program business size calculations.

Sincerely,
The OMWBE Team