Disadvantaged Business Enterprise Program

GAO reviewed the implementation of the Department of Transportation's (DOT) Disadvantaged Business Enterprise (DBE) Program, focusing on whether: (1) certain minority groups that DOT determined were eligible to participate in the state DBE program were eligible under federal laws and regulations; and (2) 38 firms certified as DBE firms were fronts for nonminority contractors. GAO noted that: (1) minority groups that DOT presumed were eligible to participate in the DBE program met the program's eligibility criteria; (2) two nationality groups that DOT presumed eligible were not listed as participants in the program; (3) the DBE program eligibility guidance has been confusing and has hindered states from consistently applying the program's eligibility criteria; (4) DOT will institute procedures to automatically update its list of eligible groups whenever the Small Business Administration modifies its eligibility list; (5) the status of the 38 minority contractors could not be verified, since none of the 38 firms were currently certified in Pennsylvania for the DBE program; and (6) of the 10 firms certified between 1982 and 1987, 6 did not apply for recertification when their existing certification expired, and 4 had their certifications revoked for failing to provide information requested by DOT.