designates workforce participation goals for underrepresented groups .
Previously , SBA automatically classified specific minority groups as socially disadvantaged , and thus eligible to apply for the program . After it lost a court challenge , however , the agency amended its process to include an extra certification step where applicants now have to provide a narrative to show they have actually experienced social or economic hardships .
Perhaps surprisingly , the DOT ’ s new final DBE rule doesn ’ t address this assumed qualifying aspect , the legal term for which is having a “ rebuttable presumption ” of disadvantage . That means an applicant is presumed to be socially or economically disadvantaged if they belong to a specified group , such as being a woman or Native American , for example .
Two-year process
DOT began its final rulemaking process in 2022 , before the Supreme Court ’ s affirmative action ruling in 2023 , so changing that aspect of the program wasn ’ t likely a focus from the outset . Attorneys say DOT ’ s silence on it now , after SBA ’ s loss and its own ongoing legal challenges , means the department is willing to take its chances in court .
“ DOT is continuing to argue that the use of rebuttable presumption is constitutional ,” said Chris Slottee , an attorney at Schwabe , Williamson & Wyatt in Anchorage , Alaska , who represents Alaska Native corporations in federal contracting and specializes in DBE law . “ I wouldn ’ t be surprised if they have a realistic view that they have a good chance of potentially losing . But they ’ re not going to preemptively surrender on this issue . If the court rules against them , they can say they disagree , but they need to follow the law .”
In other words , while DOT didn ’ t proactively change its eligibility criteria based on the SBA ’ s loss , it also didn ’ t update its new final rule in a vacuum . Indeed , the tightening of language and criteria in the new final rule may help DOT defend the program against potential challenges .
“ They ’ ve more narrowly tailored the program than it was previously ,” said Wiener . “ And that ’ s a potential argument the government could use in its future defense .”
The new final rule is set to take effect May 9 .
8 DITCHMEN • APRIL 2024