The Michigan Department of Transportation has a program for disadvantaged business enterprises (DBEs). The DBE program is a federally required program designed to ensure that firms owned and controlled by minorities, women and other socially and economically disadvantaged persons have the opportunity to grow and become self-sufficient through participation in federally funded MDOT contracts.
Disadvantaged businesses interested in being certified by the Michigan Unified Certification Program must submit an application, which can be found on Michigan’s Department of Transportation website. In order to be certified, a business must qualify as a small business concern as defined by the US Small Business Administration. No business is considered small if average annual gross receipts of the business and its affiliates exceed $17.42 million over the previous three fiscal years. The business must also submit a signed and notarized certification that the disadvantaged owner is, in fact, socially and economically disadvantaged. Each individual whose ownership and control are relied upon for the DBE certification must submit a signed, notarized statement of personal net worth with appropriate supporting documentation. The statement must show the individual’s personal net worth is less than $750,000, which does not include the individuals primary residence and the interest in the business. The business must be at least 51 percent owned by a socially and economically disadvantaged individual(s).
Becoming DBE Certified in Michigan is beneficial as the Company can obtain reimbursements for Educational/Training programs, Association Membership fees, reimbursements for Consultant Services Programs (FAR Overhead Rate audit fees) and other cost reimbursements.
Most of the costs that are reimbursed are allowable costs under FAR, but when being reimbursed, the reimbursement should offset the cost in the same account as the cost was originally recorded so as to not improperly overcharge the state and federal contracts when calculating the Companies FAR Overhead rate.
Please contact one of Somerset’s FAR Regulation experts if you have any questions.