Disadvantaged Business Enterprise (DBE) certification provides access to additional opportunities for qualifying businesses. To qualify, the majority owner(s) must be both socially and economically disadvantaged. Some may not realize that DBEs can be suspended unilaterally (without a hearing first). This blog will explain under what circumstances that can happen and
what it means.

Under what circumstances can a DBE be suspended?

Under 49 C.F.R. § 26.88, there are circumstances where a DBE can be suspended immediately without the requirements for notice and hearing set forth in 49 C.F.R. § 26.87. Immediate suspension may happen when any of the following events occur:

• When the disadvantaged owner dies.

•  When the disadvantaged owner is incarcerated.

• When the certifier learns of a material charge in circumstances that may affect the
  company’s DBE eligibility to remain certified.

•  When the DBE fails to notify the certifier (in writing) of any material change in
  circumstances as required by the regulations.

• When the DBE firm fails to timely file an affidavit of no change.

How is a DBE company notified of the suspension?

The certifying agency must notify the DBE company of the suspension via certified mail, return
receipt requested, at the last known address of the company. The suspension is temporary,
pending an expedited hearing/proceeding. The suspension takes affect when the notice is
received or deemed to be received.

Can a DBE company’s work count towards a project goal while suspended?

While suspended, a DBE can perform work and count towards goals if the work is on an existing contact that was in place prior to the suspension. However, while suspended, the DBE cannot be considered to meet contract goals on new contracts or contracts received during the suspension period.

What are my options if my DBE is suspended?

The first option is to agree to withdraw your DBE certification. The other option is to submit information showing that despite the findings leading to the suspension, the company is still eligible for certification. That issue may go to a hearing, leading to an ultimate decision on your certification.