[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]
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