Infrastructure Bill Appropriates Funds to Disadvantaged Business Enterprises
H.R. 3864, the Infrastructure Investment and Jobs Act or Bipartisan Infrastructure Bill (BIB), passed a vote by the U.S. House of Representatives on November 5, 2021, and will soon become law upon signing by President Biden. Certain provisions of the Surface Transportation division (Division A) of the BIB will be of particular interest to Disadvantaged Business Enterprises (DBEs) pursuing contracts with the federal government.
At Sec. 11101(e) of Division A, the BIB addresses appropriation of funds to DBEs. It provides, in part, that “10 percent of the amounts made available for any program under Division A (other than section 14004), Division C (Transit), and 23 U.S.C. 403 shall be expended through small business concerns owned and controlled by socially and economically disadvantaged individuals.” The BIB adopts the definition of a “small business concern” from 15 U.S.C. 632 and excludes “any concern or group of concerns controlled by the same socially and economically disadvantaged individual or individuals that have average annual gross receipts during the preceding 3 fiscal years in excess of $26,290,000, as adjusted annually by the Secretary for inflation.” For the definition of “socially and economically disadvantaged individuals,” the BIB utilizes the meaning given in 15 U.S.C. 637(d) and “relevant subcontracting regulations issued pursuant to the [Small Business] Act, except that women shall be presumed to be socially and economically disadvantaged individuals for purposes of this subsection” of the BIB.
The BIB also places increased emphasis on enforcing compliance with the disadvantaged business enterprises prompt payment rule codified at 49 CFR § 26.29, including requiring the Secretary of the Department of Transportation to increase the ability of the department to track and keep records of complaints and to make that information publicly available. Implementation of this requirement will be important for all government contractors to monitor, regardless of whether they qualify as a DBE.
Given the size and scope of the BIB, Sec. 11101(e) likely appropriates tens of billions of dollars to DBEs on federal transportation and transit projects. Understanding the qualification requirements under the BIB and the Small Business Act will be important for interested DBEs to seek out and get awarded these projects.