Office of the Secretary, DOT.
2000 inflation adjustment of size limits on small businesses participating in the DOT's Disadvantaged Business Enterprise Program.
Under the statutes governing the Department's Disadvantaged Business Enterprise (DBE) Program, firms are not considered small businesses concerns and are therefore ineligible as DBEs once their average annual receipts over the preceding three fiscal years reach specified dollar limits. These statutes, and the DOT rule implementing them (49 CFR part 26), provide that the Secretary may adjust these specified dollar limits for inflation. Consequently, this notice revises the limits established by section 1101(b)(2)(A) of the Transportation Equity Act for the 21st Century (TEA-21), Public Law 105-178, July 22, 1998 as well as the Airport and Airway Safety, Capacity, Noise Improvement and Intermodal Transportation Act of 1992, Public Law 102-581, October 31, 1992, 49 U.S.C. 47113 (formerly section 505(d) of the Airport and Airway Improvement Act of 1982, as amended (AAIA)), Public Law 97-248, Title V, September 3, 1982. The Department has determined that the appropriate cap for all portions of the DBE program (airport, highway and transit) is now $17,420,000.
August 29, 2000.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Laura Aguilar, Office of the Assistant General Counsel for Environmental, Civil Rights, and General Law, Department of Transportation, 400 Seventh Street, SW, Room 10102, Washington, D.C. 20590; Telephone: 202-366-0365.End Further Info End Preamble Start Supplemental Information
The DBE program is a statutory program intended to provide contracting opportunities for small business concerns owned and controlled by socially and economically disadvantaged individuals in the Department's highway, mass transit and airport financial assistance programs. The statutory provision governing the DBE program in the highway and mass transit financial assistance programs is section 1101(b) of TEA-21, Public Law 105-178, July 22, 1998. The statutory provision governing the DBE program as it relates to the airport planning and airport development financial assistance programs is section 505(d) of the AAIA, Public Law 97-248, Title V, September 3, 1982, as amended by section 105(f) of the Airport and Airway Safety and Capacity Expansion Act, Public Law 100-223, December 30, 1987, and section 117(c) of the Airport and Airway Safety, Capacity, Noise Improvement, and Intermodal Transportation Act of 1992, Public Law 102-581, October 31, 1992. This provision is codified at 49 U.S.C. 47113.
The DBE provisions in TEA-21 and AAIA reflect Congress' intention that the DBE program meets the objective of helping small business concerns, owned and controlled by socially and economically disadvantaged individuals, become self-sufficient and able to compete with non-disadvantaged firms. To achieve this, DBE firms are currently ineligible for the program once their average annual gross receipts over the preceding three fiscal years exceed $16,600,000. This specified gross receipts cap is subject to adjustment by the Secretary of Transportation for inflation. See TEA-21 § 1101(b)(2)(A) and 49 U.S.C. 47113(a)(1)(B).
This notice adjusts the DBE gross receipts cap for inflation since enactment of TEA-21 in July 1998. This notice does not address the small business size standards for the DBE program for airport concessions established pursuant to section 511(a)(17) of the AAIA, as amended (49 U.S.C. 47107(e)). The maximum size standards for airport concessionaires under that program are currently set forth in 49 CFR Part 23, Subpart F, Appendix A.
The current gross receipts cap regulates DBE's operating under both TEA-21 and AAIA. The Department last adjusted these DBE size limits for inflation in 1994. Under the 1994 adjustment, the cap was raised for inflation from $16,015,000 to $16,600,000 or 3.63%. In recognition of the overall effects of inflation on the economy within the past few years, the Department wants to insure that DBE's have the maximum opportunity to participate in DOT-assisted contracts of highway, transit and airport recipients by adjusting the small business size limit for inflation. With an inflationary adjustment for the period from TEA-21's enactment through the first quarter of 2000, the Department has determined that the appropriate cap for all portions of the DBE program (airport, highway and transit) is now $17,420,000.
In arriving at the $17,420,000 figure, the DOT used a Department of Commerce price index to make a current inflation adjustment. The Department of Commerce's Bureau of Economic Analysis prepares constant dollar estimates of state and local government purchases of goods and services by deflating current dollar estimates by suitable price indexes. These indexes include purchases of durable and non-durable goods, financial and other services, structures (11 types of new construction, net purchases of existing residential structures, nonresidential structures and maintenance repair services) and compensation of employees. Using these price deflators enables the Department to adjust dollar figures for past years' inflation.
Given the nature of DOT's DBE Program, adjusting the gross receipts cap in the same manner in which inflation adjustments are made to the costs of state and local government purchases of goods and services is simple, accurate and fair. The inflation rate on purchases by state and local governments for the current year is calculated by dividing the price deflator for the first quarter of 2000 (109.56) by 1998's third quarter price deflator (104.40). The third quarter of 1998 is used because that is when TEA-21 was enacted, along with the DBE statutory cap amount of $16,600,000. The result of the calculation is 1.0494, which represents an inflation rate of 4.94% from the third quarter of 1998 through the first quarter of 2000. Multiplying the $16,600,000 figure by 1.0494 equals Start Printed Page 52471$17,420,040, which will be rounded off to the nearest $10,000, or $17,420,000. Using this Department-wide cap should help make the program more understandable and consistent for all participants.
Therefore, until further notice, if a firm's average gross annual receipts over the preceding three years do not exceed $17,420,000, it does not exceed the small business size limit contained in the statutes.Start Signature
Issued this 22nd day of August 2000, at Washington, DC.
Rodney E. Slater,
[FR Doc. 00-22021 Filed 8-28-00; 8:45 am]
BILLING CODE 4910-62-P