Knowledge Drop - 2023 Update to DBE/ACDBE Size Standards

2023 Update to DBE/ACDBE Size Standards

The Federal Government has increased the limits and adjusted the ceiling for DBE size, which could mean some larger businesses might now qualify for DBE status. The other possible implication of this change is that your growing business can continue to qualify to be a DBE. These changes were made to account for growth of the economy & inflation factors.

We’ll continue to make you aware of changes affecting DBE qualifications.

DBE/ACDBE Size Standards

The Department of Transportation issued a final rule on December 14, 2020 for the Department to make an annual inflationary adjustment to the Disadvantaged Business Enterprises (DBE) program’s business size limit (business size standard/gross receipts cap) on small businesses participating in the DBE program under 49 CFR Part 26 and pursuant to the Infrastructure Investment and Jobs Act of 2021. The rule does not apply to the Airport Concession DBE (ACDBE) program under 49 CFR part 23.

  1. Effective March 1, 2023 the business size limit for applicant and certified DBEs seeking to participate in FHWA and FTA-assisted contracts is adjusted for inflation from $28.48 million to $30.40 million. A DBE firm must still meet the size standard(s) appropriate to the type(s) of work the firm seeks to perform in DOT-assisted contracts. These standards vary by industry according to the NAICS code(s) defined by the Small Business Administration (SBA).
  2. The adjusted gross receipts cap does not apply to determining a firm’s eligibility for participation in FAA-assisted projects. DBE firms working on FAA-assisted projects must meet the size standard(s) appropriate to the type(s) of work based solely on the applicable NAICS code(s) size standard(s). Unified Certification Program (UCP) directories must clearly indicate which firms are only eligible for counting on FAA-assisted work.
DBE Program Size Standards  *(Firms must meet both SBA and the DBE Statutory Cap)*Affiliation has the same meaning the term has in the Small Business Administration (SBA) regulationsSortable column.
SBA Size MeasureDBE Statutory Cap
SBA business size standard(s) found in 13 CFR part 121 appropriate to the type(s) of work the firm seeks to perform in DOT-assisted contracts, including the primary industry classification of the applicant.See 13 CFR part 121.201Size limit = $30.40 million
The firm may elect average annual gross receipts over the firm’s previous 5 fiscal years. See 13 CFR part 121.104(c)Average annual gross receipts over the firm’s previous  fiscal years.See 26.65(b)2021 Final RuleDBE Guidance on Gross Receipts (2020)
*DBEs working on FAA contracts are only subject to the SBA size standards. DBEs working on FHWA and FTA contracts are subject to both the SBA size and the DBE statutory gross receipts standards. 
  ACDBE Program Size Standards*Affiliation has the same meaning the term has in the Small Business Administration (SBA) regulationsSortable column, except that the provisions of SBA regulations concerning affiliation in the context of joint ventures (13 CFR §121.103(h)Sortable column) do not apply to this part.
Size LimitRegulation
$56.42 million (Average annual gross receipts over the firm’s 3 previous fiscal years)23.33(a)
Banks and financial institutions: $1 billion in assets23.33 (b)(1)
Car rental companies: $75.23 million (Average annual gross receipts over the firm’s three previous fiscal years).23.33 (b)(2)
Pay telephones: 1,500 employees23.33 (b)(3)
Automobile dealers: 350 employees.23.33 (b)(4)

Information source: US Department of Transportation

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