DBE Suppliers

The Disadvantaged Business Enterprise (DBE) Program exists to create a level playing field on which DBEs can compete fairly for transportation contracts. The Program requires ADOT to set DBE contract goals if it determines that it cannot meet its overall goal for DBE participation in other ways.

In essence, a DBE contract goal is a requirement that a certain percentage of work for the project be performed by certified DBEs. When counting DBE participation, the DBE must be certified in the category of work it performs in order for that work to count towards DBE participation. Further, only the value of work actually performed by the DBE counts toward DBE participation, and it is only counted after the work has been paid for. Certain special rules apply for trucking firms. These special rules are discussed below.

More information on the ADOT Disadvantaged Business Enterprise (DBE) policy and how it is implemented can be found on the Guides/Policies page.

It is important to note that DBE involvement only satisfies DBE goals if the DBE serves a commercially useful function. Generally, this means that the DBE must perform the whole of a task itself and the task must be necessary for the completion of the project. The specific rules vary by the task being performed, however.

As a DBE, you will not be considered to perform a commercially useful function if you act only as an extra participant in a transaction or projects to provide the appearance of DBE participation. If you do not perform or exercise responsibility for at least 30 percent of the total cost of your contract with your own work force, or if you subcontract a greater portion of the work of a contract than would be expected on the basis of normal industry practice for the type of work involved, ADOT will presume that you are not performing a commercially useful function.

If you are presumed not to be performing a commercially useful function as provided above, you may present evidence to rebut this presumption. Decisions on commercially useful function matters are subject to review by FHWA, but are not administratively appealable to the U.S. DOT.

See this video from the FHWA for more information on what qualifies as a Commercially Useful Function.

For more information on good faith efforts, as well as information on what sort of work satisfies the commercially useful function requirement of DBE goals, read the Commercially Useful Function Checklist in the BECO section of the ADOT website. 

In some cases, not all of the money paid to a DBE can count toward the DBE goal.

For suppliers, 100 percent of the cost of materials and supplies is credited toward the DBE goal if they are obtained from a DBE manufacturer. However, if the materials are purchased from a DBE regular dealer (essentially a firm which regularly buys, stores, and sells supplies but does not manufacture them), only 60 percent of the cost of materials and supplies is credited. The cost of materials purchased from a DBE that is neither a manufacturer nor a regular dealer does not count toward the DBE goal, although the fees and commissions charged by the DBE to procure and supply those materials do count.

Whether your company is considered a manufacturer, regular dealer, or something else is decided by ADOT on a contract-by-contract basis, and designation may change from one contract to another.

DBE credit for supplying paving grade asphalt and other asphalt products is permitted for standard industry hauling costs, and only if the DBE is owner or lessee of the equipment and trucks. Leases for trucks must be long term (extending for a fixed time period and not related to the time necessary for contract performance) and must include all attendant responsibilities such as insurance, titling, hazardous waste requirements, and payment of drivers.

Sometimes a bidder or proposer may not be able to find certified DBEs to meet a contract goal no matter how hard they try. It is acceptable to not to meet a DBE contract goal so long as the bidder can demonstrate it has made a good faith effort to do so. That is, the bidder has taken all reasonable steps to find certified DBEs for the contract but still has not been able to meet the contract goal.

Good faith efforts requirements exist to ensure that prime contractors take DBE goals seriously and make a real effort to satisfy them. If the prime contractor is unable to meet the DBE goal on a contract or fails to make a good faith effort to meet the DBE goal, as determined by ADOT, the prime contractor will not be awarded the contract.

DBE Commitment Affidavits are statements from the prime contractor and each DBE subcontractor that those DBEs will perform the specified work on the project, and that the work performed by DBEs sums to the specified amount.

Each DBE subcontractor and supplier must also submit an Intended Participation Affidavit specifying the work they intend to do on the project. That form can be found in the BECO section of the ADOT website.