The FHWA DBE program provides small, socially and economically disadvantaged companies with opportunities to participate, primarily as subcontractors, on federally-assisted highway contracts. This occurs through a prime contractor’s obligation to meet a DBE contract goal, i.e., subcontract a certain percentage of the contract to certified DBE firms. The program also provides funding to state DOTs to administer business development programs for certified DBEs. These programs provide services to assist DBEs with capacity-building to help them obtain contracts. The DBE program does not anticipate that a firm will remain a DBE indefinitely. Should the disadvantaged owner’s personal net worth reach a certain level or should the firm’s gross receipts exceed small business limitations, the DBE firm will “graduate” and no longer be eligible to participate in the program. After graduates exceed program size standards, they are typically far from the size of the large contractors with which they must now compete for state DOT road and bridge contracts. There is a need to better understand: (1) characteristics of DBEs that graduate from the program, (2) whether graduates of the DBE program are able to survive on their own, without the program benefits, and (3) good practices to promote success and create self-sufficiency in the DBE program.
The objective of this research is to identify best practices in the DBE program for facilitating: (1) broad participation of DBEs in state DOT highway contracts, (2) successful graduation from the program, and (3) graduates who are able to survive on their own outside the DBE program. Broad participation is defined in terms of both the numbers of DBEs contracted and the diversity of company types they represent.
STATUS: A contract has been executed, and research is underway. The research team is currently preparing to interview various industry stakeholders.