[Federal Register Volume 59, Number 249 (Thursday, December 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31942]


[[Page Unknown]]

[Federal Register: December 29, 1994]


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DEPARTMENT OF TRANSPORTATION

 

Participation by Minority Business Enterprise in Department of 
Transportation Programs

AGENCY: Office of the Secretary, DOT.

ACTION: Notice: 1994 inflation adjustment of Size Limits on Small 
Businesses Participating in the DOT Disadvantaged Business Enterprise 
Program.

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SUMMARY: Under the statutes governing the Department's Disadvantaged 
Business Enterprise (``DBE'') Program, firms are not considered to be 
small business concerns, and hence are not eligible DBEs, once their 
average annual receipts over the preceding three fiscal years reaches 
specified dollar limits. These statutes, and the DOT rule implementing 
them (49 CFR part 23), provide for the Secretary to adjust these 
specified dollar limits for inflation. This notice revises the small 
business size limit established by section 1003(b)(2)(A) of the 
Intermodal Surface Transportation Efficiency Act of 1991 (``ISTEA'') 
Public Law 102-240, December 18, 1991, and by section 117(c) of the 
Airport and Airway Safety, Capacity, Noise Improvement and Intermodal 
Transportation Safety Act of 1992, Public Law 102-581, October 21, 
1992. The Department has determined that the appropriate cap for all 
portions of the DBE program (airport, highway, and transit programs) is 
now $16.6 million.

EFFECTIVE DATE: December 29, 1994.

FOR FURTHER INFORMATION CONTACT:David K. Tochen, Deputy Assistant 
General Counsel for Environmental, Civil Rights, and General Law, 
Department of Transportation, 400 Seventh Street, SW., Room 10102, 
Washington, DC 20590; Telephone: (202) 366-9167.

SUPPLEMENTARY INFORMATION: The Department's DBE program is a statutory 
program that is 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 1003(b) of the Intermodal Surface 
Transportation Efficiency Act of 1991 (``ISTEA''), Pub. L. 102-240, 
December 18, 1991. The DBE program in ISTEA is a continuation of the 
DBE program established under section 106(c) of the Surface 
Transportation and Uniform Relocation Assistance Act of 1987, Pub. L. 
100-17, April 2, 1987. The statutory provision governing the DBE 
program as it relates to the airport planning and airport development 
financial assistance programs is section 505(d) the Airport and Airway 
Improvement Act of 1982 (``AAIA''), Pub. L. 97-248, title V, September 
3, 1982, as amended by section 105(f) of the Airport and Airway Safety 
and Capacity Expansion Act of 1987, Pub. L. 100-223, December 30, 1987, 
and section 117(c) of the Airport and Airway Safety, Capacity Noise 
Improvement, and Intermodal Transportation Act of 1992, Pub. L. 102-
581, October 31, 1992. This provision is codified at 49 U.S.C. 47113.
    The DBE provisions in ISTEA and AAIA, as amended, reflect a 
determination by Congress that in order to ensure that the DBE program 
meets its objective of helping small business concerns owned and 
controlled by socially and economically disadvantaged individuals 
become self-sufficient and able to compete in the market with non-
disadvantaged firms, DBE firms should no longer be eligible for the 
program once their average annual gross receipts over the preceding 
three fiscal years exceed $15,370,000, in the case of ISTEA financial 
assistance programs, and $16,015,000, in the case of airport planning 
and airport development programs under AAIA, as amended. These statutes 
make the specified gross receipts caps subject to adjustment by the 
Secretary of Transportation for inflation. See ISTEA section 
1003(b)(2)(A) and 49 U.S.C. 47113(a)(1)(B).
    This notice adjusts for inflation from December 1, 1992 the gross 
receipts caps applicable to all small business concerns eligible to 
participate in the Department's DBE program. 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 is currently set forth in 49 
CFR Part 23, Subpart F, Appendix A.
    Also, as a related matter, the Department is currently revising its 
current regulations implementing the DBE program (49 CFR Part 23). The 
Department published a Notice of Proposed Rulemaking for the DBE rule 
on December 9, 1992 (57 Federal Register 58288) and plans to issue a 
new final rule in the near future. However, good cause exists to issue 
this Notice adjusting the small business size limit for inflation in 
advance of issuance of the new final rule. Since enactment of ISTEA in 
December, 1991 and the Airport and Airway Safety, Capacity, Noise 
Improvement, and Intermodal Transportation Act of 1992 in October, 
1992, the Department has not adjusted the DBE size limits for 
inflation. In recognition of the overall effects of inflation on the 
economy within the past few years, the Department can insure that DBEs 
have the maximum opportunity to participate in DOT-assisted contracts 
of highway, transit, and airport recipients by adjusting the small size 
limit for inflation at this time.
    The Department notes the difference between the $15,370,000 gross 
receipts cap for the highway and transit programs established by 
Congress in ISTEA and the $16,015,000 gross receipts cap for the 
airport program established by Congress in the Airport and Airway 
Safety, Capacity, Noise Improvement and Intermodal Transportation Act 
of 1992. This difference has caused confusion on the part of recipients 
and contractors. The legislative history of the two statutes does not 
contain any suggestion that Congress wished, as a policy matter, to 
have different gross receipts caps in the two portions of the program. 
Indeed, in most major respects, the DBE portions of the 1992 airports 
statute is identical to those of the 1991 ISTEA. The most probable 
inference is that Congress, in 1992, adjusted the 1991 cap amount 
upward to account for inflation in the intervening time. The 1992 cap 
in the airport legislation, then, may fairly be taken as the latest 
word from Congress on the appropriate cap amount for participants in 
the DOT DBE program. With an adjustment for inflation for the time 
between the passage of the 1992 airport legislation and the present 
time, the Department has determined that the appropriate cap for all 
portions of the DBE program (airport, highway, and transit programs) is 
now $16,600,000.
    In arriving at the $16,600,000 figure, the Department used a 
Department of Commerce price index to make a current inflation 
adjustment. The Department of Commerce, 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 
goods, nondurable goods, financial and other services, structures (11 
types of new construction, net purchase of existing residential 
structures, nonresidential structures and maintenance repair services) 
and compensation of employees. By use of these price deflators, we are 
able to adjust dollar figures for inflation in past years.
    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 of the cost of purchases 
by State and local governments for the current year is calculated by 
dividing the price deflator for the second quarter of 1994 (125.6) by 
the 1992 price deflator (121.2). The result is 1.0363, which represents 
an inflation rate of 3.63 percent from December 31, 1992 to June 30, 
1994. Multiplying the $16,015,000 figure by 1.0363 equals $16,596,334, 
which will be rounded off to the nearest $10,000, or $16,600,000. Using 
this uniform Department-wide cap should help to make the program more 
understandable and consistent for all participants.
    Therefore, until further notice, if a firm's average gross annual 
receipts over the proceeding three years does not exceed $16,600,000, 
it does not exceed the small business size limit contained in the 
statutes.
    This decision avoids the complexity of making different adjustments 
for inflation for different industries and types of firms within 
industries. The small business size limit will be adjusted from time-
to-time in future notices of this type.

    Issued 22nd December, 1994, at Washington, DC.
Federico Pena,
Secretary of Transportation.
[FR Doc. 94-31942 Filed 12-28-94; 8:45 am]
BILLING CODE 4910-62-M