[Federal Register Volume 65, Number 168 (Tuesday, August 29, 2000)]
[Notices]
[Pages 52470-52471]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-22021]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary
RIN 2105-AC90
Participation by Disadvantaged Business Enterprises in Department
of Transportation Financial Assistance Programs; Inflationary
Adjustment
AGENCY: Office of the Secretary, DOT.
ACTION: 2000 inflation adjustment of size limits on small businesses
participating in the DOT's 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 small
businesses concerns and are therefore ineligible as DBEs once their
average annual receipts over the preceding three fiscal years reach
specified dollar limits. These statutes, and the DOT rule implementing
them (49 CFR part 26), provide that the Secretary may adjust these
specified dollar limits for inflation. Consequently, this notice
revises the limits established by section 1101(b)(2)(A) of the
Transportation Equity Act for the 21st Century (TEA-21), Public Law
105-178, July 22, 1998 as well as the Airport and Airway Safety,
Capacity, Noise Improvement and Intermodal Transportation Act of 1992,
Public Law 102-581, October 31, 1992, 49 U.S.C. 47113 (formerly section
505(d) of the Airport and Airway Improvement Act of 1982, as amended
(AAIA)), Public Law 97-248, Title V, September 3, 1982. The Department
has determined that the appropriate cap for all portions of the DBE
program (airport, highway and transit) is now $17,420,000.
EFFECTIVE DATE: August 29, 2000.
FOR FURTHER INFORMATION CONTACT: Laura Aguilar, Office of the Assistant
General Counsel for Environmental, Civil Rights, and General Law,
Department of Transportation, 400 Seventh Street, SW, Room 10102,
Washington, D.C. 20590; Telephone: 202-366-0365.
SUPPLEMENTARY INFORMATION: The DBE program is a statutory program
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 1101(b) of TEA-21, Public Law 105-178,
July 22, 1998. The statutory provision governing the DBE program as it
relates to the airport planning and airport development financial
assistance programs is section 505(d) of the AAIA, Public Law 97-248,
Title V, September 3, 1982, as amended by section 105(f) of the Airport
and Airway Safety and Capacity Expansion Act, Public Law 100-223,
December 30, 1987, and section 117(c) of the Airport and Airway Safety,
Capacity, Noise Improvement, and Intermodal Transportation Act of 1992,
Public Law 102-581, October 31, 1992. This provision is codified at 49
U.S.C. 47113.
The DBE provisions in TEA-21 and AAIA reflect Congress' intention
that the DBE program meets the objective of helping small business
concerns, owned and controlled by socially and economically
disadvantaged individuals, become self-sufficient and able to compete
with non-disadvantaged firms. To achieve this, DBE firms are currently
ineligible for the program once their average annual gross receipts
over the preceding three fiscal years exceed $16,600,000. This
specified gross receipts cap is subject to adjustment by the Secretary
of Transportation for inflation. See TEA-21 Sec. 1101(b)(2)(A) and 49
U.S.C. 47113(a)(1)(B).
This notice adjusts the DBE gross receipts cap for inflation since
enactment of TEA-21 in July 1998. 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 are currently set forth in 49 CFR
Part 23, Subpart F, Appendix A.
The current gross receipts cap regulates DBE's operating under both
TEA-21 and AAIA. The Department last adjusted these DBE size limits for
inflation in 1994. Under the 1994 adjustment, the cap was raised for
inflation from $16,015,000 to $16,600,000 or 3.63%. In recognition of
the overall effects of inflation on the economy within the past few
years, the Department wants to insure that DBE's have the maximum
opportunity to participate in DOT-assisted contracts of highway,
transit and airport recipients by adjusting the small business size
limit for inflation. With an inflationary adjustment for the period
from TEA-21's enactment through the first quarter of 2000, the
Department has determined that the appropriate cap for all portions of
the DBE program (airport, highway and transit) is now $17,420,000.
In arriving at the $17,420,000 figure, the DOT used a Department of
Commerce price index to make a current inflation adjustment. The
Department of Commerce's 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 and non-durable
goods, financial and other services, structures (11 types of new
construction, net purchases of existing residential structures,
nonresidential structures and maintenance repair services) and
compensation of employees. Using these price deflators enables the
Department to adjust dollar figures for past years' inflation.
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 on purchases by state and
local governments for the current year is calculated by dividing the
price deflator for the first quarter of 2000 (109.56) by 1998's third
quarter price deflator (104.40). The third quarter of 1998 is used
because that is when TEA-21 was enacted, along with the DBE statutory
cap amount of $16,600,000. The result of the calculation is 1.0494,
which represents an inflation rate of 4.94% from the third quarter of
1998 through the first quarter of 2000. Multiplying the $16,600,000
figure by 1.0494 equals
[[Page 52471]]
$17,420,040, which will be rounded off to the nearest $10,000, or
$17,420,000. Using this Department-wide cap should help make the
program more understandable and consistent for all participants.
Therefore, until further notice, if a firm's average gross annual
receipts over the preceding three years do not exceed $17,420,000, it
does not exceed the small business size limit contained in the
statutes.
Issued this 22nd day of August 2000, at Washington, DC.
Rodney E. Slater,
Secretary.
[FR Doc. 00-22021 Filed 8-28-00; 8:45 am]
BILLING CODE 4910-62-P