If your business has applied for certification as a Disadvantaged Business Enterprise (DBE) through your state’s Department of Transportation (or local agency administering the state’s certification program), you know that it takes a lot of time and effort to put together the application materials and go through the site visit.  Understandably, it can be incredibly frustrating if the agency denies the application.  However, you do have the right to appeal, and this blog post will explain that process.

In order to obtain DBE certification, your company must be owned and controlled by a member or members of specifically identified socially and economically disadvantaged groups.  These groups include women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans and Subcontinent Asian Americans.  However, as anyone who has gone through the process can tell you, membership in those groups is not enough.

The certifying agency may deny your application for many reasons, despite the owner’s membership in one of those groups.  In later blog posts, I will discuss some of the more common reasons applications are denied.  What you should know is that this decision can, and in many cases, should be appealed. 

In Pennsylvania, the DBE process runs through the Pennsylvania Unified Certification Program (PAUCP).  Via the PAUCP, five local agencies throughout the Commonwealth make the initial certification decision.  Those five agencies are: Allegheny County Department of Equity and Inclusion; Philadelphia International Airport Office of Business Diversity; PENNDOT Bureau of Equal Opportunity; Port Authority of Allegheny County Office of Disadvantaged Business Enterprise & Diverse Business and the Southeastern Pennsylvania Transportation Authority (SEPTA) DBE Program Office.

If an agency denies your DBE application, the agency must provide you with a written explanation outlining why it denied your application.  The denial must reference specific evidence in the record to support the reasons for the denial.  The agency must also make available to you (upon request) all the information it used in arriving at its decision.

If the agency denies your application, you have several options.  The first is to do nothing.  If you do not appeal, your business can apply again after a waiting period (usually 12 months).  Sometimes this may be necessary if there were deficiencies or problems in your application materials that to be corrected.  If you appeal, you cannot add to or change your application materials.  A knowledgeable attorney can help you determine whether you should wait and reapply or move forward with an appeal.  The attorney can explain to you how the evidence in the record may or may not support your position, and whether the agency may have misapplied the regulations in its decision.  If you choose to wait and reapply, it could be beneficial to have the attorney review your application before submission in order to identify potential problems.

In Pennsylvania, you have the right to appeal to the state certification program, or directly to the United States Department of Transportation (USDOT).  If you appeal at the state level, PAUCP will schedule a hearing to hear your appeal.  At this hearing, you will have a brief opportunity to respond to the reasons set forth in the agency’s denial letter.  You may have an attorney present and may find it helpful.  You can provide testimony and point to evidence in the record.  If you receive a denial after the state level appeal, you may appeal that decision to the USDOT. 

While there is no requirement that you must have an attorney when making that appeal, it would certainly be helpful.  The appeal is in writing and there is no hearing.  Your appeal must clearly state your argument and refer to evidence in the record supporting certification.  You must also explain why the denial was wrong under the regulations.  An attorney can help you clearly and thoroughly present your case.  The USDOT can uphold the denial or find that the denial was not supported by substantial evidence or was inconsistent with the regulations.  If your appeal to USDOT is successful, the USDOT will tell the state that they must certify you.  The USDOT is final, and you cannot ask for a reconsideration.  There are avenues to appeal to federal court, but that is a time-consuming and costly process.

Denied DBE Certification? Why it Could Be Better to Reapply Than Appeal