November 30, 2020

Volume X, Number 335


How to Challenge Another Company’s DBE (Disadvantaged Business Enterprise) Certification

On several occasions, clients and potential clients have approached me to ask how they can challenge another company’s Disadvantaged Business Enterprise Certification.  For example, they may believe that the owner exceeds the personal net worth limitations, the business exceeds SBA size standards or the purported disadvantaged owner does not actually control the firm.

The federal DBE regulations do have a procedure in place for reporting another DBE.  They provide that any person can file a written complaint with the certifying agency (usually a state-level department of transportation or airport authority) that a currently-certified DBE is not actually eligible.  49 C.F.R. § 26.87(a).  The complainant must specify the reasons why they believe the company is ineligible- a general allegation that the company is not eligible is not enough. 49 C.F.R. § 26.87(a).

Often, the reporter wants to remain anonymous, for fear of retaliation or other fallout.  Please be forewarned that the certifying agency does not have to accept anonymous complaints.  There is some level of confidentiality for the complaining party.  49 C.F.R. § 26.109(b)(b) provides that the identity of the complainant shall be kept confidential, at the complainant’s election.  However, the same provision also realizes that there are circumstances where that confidentiality could hinder the investigation.  If the complainant does not waive the confidentiality, the investigation into their complaint could be closed.

The regulations are also clear that as a complainant, the company that you are complaining about cannot “intimidate, threaten, coerce, or discriminate” against you because you made a complaint against them.  49 C.F.R. §26.109(d).

Once a report is made, the certifying agency must review the complaint and any materials submitted by either the complainant or the subject firm, and any other information.  The agency may ask for additional information and/or conduct an investigation.  49 C.F.R. §29.87(a)(2).

If the agency determines that a firm is ineligible, it must provide written notice to the firm that the agency proposes to find the firm ineligible and set forth the reasons why.  Similarly, if it finds that the firm remains eligible, it must notify the complainant and the firm in writing of the determination.  Either way, the agency must also reference evidence in the record supporting its decision.

©2020 Strassburger McKenna Gutnick & GefskyNational Law Review, Volume X, Number 300



About this Author

Danielle L. Dietrich SMGG Attorney Pittsburgh, PA

Danielle L. Dietrich, Shareholder in the Pittsburgh Office of SMGG, focuses her practice in the areas of women and diverse-owned businesses, healthcare, elder law and litigation.  She has a broad range of experience in providing legal counsel and advice to her clients (both large and small), as well as having handled a wide range of disputes and litigation in Pennsylvania, Ohio and West Virginia.

A large portion of Ms. Dietrich’s practice focuses on the representation of women and diverse-owned businesses.  That practice includes assisting these...

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