Office of Equal Opportunity - D/MBE FAQ

Q. What is the Minority Business Enterprise (MBE) Program?

A. Maryland enacted the State MBE Program in 1978, which was the same year the federal Disadvantaged Business Enterprise (DBE) Program was enacted. Federal and State regulations were developed to provide additional detail. Your business must apply for certification and provide evidence of ownership and control by minority person(s) as part of the D/MBE certification process.

Q. What is a Minority Business Enterprise (MBE)?

A. Both the MBE Program and the federal DBE Program are referred to as the MBE Program. Both strive to achieve a percentage of MBE participation on State issued contracts.

An MBE is a business that is at least 5l % owned and controlled by one or more minority persons. A minority is defined as someone who is African American, Hispanic American, Asian American, Native American, a woman or a disabled person. Additionally, the State recognizes non-profit firms that promote the interests of the physically or mentally disabled. The federal DBE program also includes Alaskan Natives, Pacific Islanders, Aleuts, and persons who are not minorities but who are socially and economically disadvantaged in its definition. Socially and economically disadvantaged owners must demonstrate longstanding, chronic and substantial disadvantage to qualify.

Q. How does MDOT determine which businesses can participate in the MBE Program?

A. The Maryland Department of Transportation (MDOT) has a comprehensive certification process to determine the ownership and control of firms that apply for MBE certification. There are many eligibility criteria for certification. In assessing ownership, investments by the minority owner are important. Control includes both managerial and operational control with technical knowledge of the firms' major work areas being an important component for assessing operational control.

Applications are carefully reviewed and personal interviews are conducted by trained MBE agents. Skilled construction personnel assist, providing technical information when needed. Before becoming certified, you must appear before the MBE Advisory Committee (MBEAC) to discuss your business and respond to committee questions. The MBEAC conducts a public meetings and you can observe them before you appear before the committee. The committee makes recommendations to the MBEAC Chairperson who makes the certification decision. The certification process assures that only bona fide MBEs participate in the program.

Q. Why does MDOT require a personal net worth statement?

A. The Maryland State legislature enacted a Personal Net Worth (PNW) eligibility requirement to qualify as a certified Minority Business Enterprise (MBE) under the State's program. A PNW requirement is also in effect for United States Department of Transportation (USDOT) assisted contracts included under the DBE Program.  The requirements for the State and federal programs are different. For USDOT assisted contracts, the PNW of each socially and economically disadvantaged individual who owns and controls the firm, as a part of the 51% ownership, must not exceed $750,000. When an individual PNW exceeds the $750,000 threshold, that person is no longer eligible to participate in the DBE program. PNW excludes the value of the MBE/DBE business and the primary residence of the MBE/DBE owner(s). 

The Maryland General Assembly modified the Maryland Department of Transportation's Minority Business Enterprise Program's PNW requirement. It increased the PNW program participation cap from $750,000 to $1.5 million. Note: this increase does not apply to the federal $750,000 PNW cap under the DBE program.

Q. Do firms graduate from the MBE Program?

A. Yes. If a certified MBE has a three-year annual average of gross receipts (or for retail and manufacturing businesses number of employees) that meets or exceeds the revenue (or employee) totals as specified by USDOT, the firm is no longer eligible to participate in the MBE program. 

Q. What are the advantages of becoming certified as an MBE?

A. Certification as an MBE provides greater exposure for work opportunities on State projects. All certified MBEs appear in the MBE Directory, a reference manual widely disseminated to each MDOT administration, other state departments, local governments, contractors and to the public. Contractors use the MBE Directory as a basic resource for soliciting minority participation on projects. If a firm is not certified, a contractor cannot receive credit toward achievement of the MBE participation goal by using that firm.

Q. Will this certification allow me to bid as an MBE on other State contracts?

A. Yes. MDOT administers the State of Maryland MBE certification program. Once you are certified through MDOT, you may participate as an MBE subcontractor on ANY state contract, regardless of the agency (Any business may bid directly on any bid or proposal without regard to certification).

Q. How does MDOT establish the goals for minority business participation?

A. MDOT staff make every attempt to establish realistic and achievable MBE goals. Individual contract goals are based upon the dollar value of the project, the availability of MBEs to perform the work that is subcontracted, and the availability of certified MBEs in the location where the work will be done. While goals vary on individual contracts, the total of MBE participation in each administration is combined to one report for the MDOT MBE participation year.

Q. What types of work are available?

A. Opportunities to participate in construction work, construction-related work and the procurement of goods and services are varied. Minority participation is encouraged on all projects. Although many contracts with MBEs are for sub-contract work in construction fields, certified MBEs have leased concessions, provided consultant services in technical fields and been awarded projects as prime contractors.

Q. Once certified, am I assured of getting contracts and subcontracts?

A. No. Certification does not guarantee work to an MBE. However it does enhance an MBE's exposure to prime contractors and the business community. To be successful, your MBE firm must market itself, its personnel and its services, as any good business should.

Q. What is expected of the MBE once a contract is awarded?

A. All firms must meet performance standards in contract specifications. This relates to the quality of work done, the submission of reports and written information in a timely manner and the firm's compliance with regulations and laws. Once your MBE is awarded a sub-contract, you are responsible for submitting verification of all payments received to the contracting agency. This includes submitting the amount of payments and dates received.

Q. Does the general contractor have any responsibility in the MBE Program?

A. Yes. The general contractor must first meet the MBE goals established on the contract by seeking and utilizing certified MBEs. Once work begins, the general contractor is responsible for all project activities including those of subcontractors.

Regular monitoring assures that contractual items are performed in accordance with specifications. If you are the general contractor, you must submit monthly reports, such as payroll, cost and time estimation and progress reports. When changes are needed, you must get approval from the agency project manager. Any changes in the MBE participation must be approved.

Q. How does MDOT assure that "fronts" or "sham" organizations do not benefit from the MBE Program?

A. MDOT applies the MBE certification process to determine if a firm is minority owned and controlled. To qualify as an MBE, you must demonstrate that you are a minority person and provide documentation establishing at least 51 percent ownership of the company.

Once the ownership of a firm is established, you must demonstrate the technical knowledge and experience to make independent business operating and management decisions.

Annual reviews of all certified firms are made to determine if the ownership and control of the MBE has changed. Consideration is given to reports filed by the administrations, which describe how the MBE has managed and performed on projects. Effective contract compliance monitoring procedures also facilitate the identification of "front" or "sham" MBE firms.

Q. How can I report suspected abuse of the MBE Program?

A. Suspected abuse is taken seriously. Report abuse on the MBE Hotline: 1-800-544-6056 . You can also report to MDOT MBE personnel. This phone number is available 24 hours a day. With your help, the integrity and fairness of the program will be maintained for all qualified participants.

Q. What happens to MBEs and general contractors who have abused the MBE Program?

A. Progressive administrative sanctions can be applied when contractors (MBEs and non-MBEs) abuse the MBE Program. These sanctions include:

  • Suspension of work
  • Withholding a percentage of progress payment
  • Default of the contract
  • Referral to the Office of the Attorney General for criminal investigation
  • Suspension of the right of the contractor to participate in future state contracts (debarment)
  • Other appropriate administrative actions within the discretion of the Administrator

Q. Where can I find information on upcoming contract opportunities?

A. All construction, maintenance and services projects exceeding $25,000 are advertised as follows:

  • MDOT SHA Contractors Information Center (CIC)
  • The Maryland Contract Weekly
  • The Washington and Baltimore Afro-American Newspapers
  • The Maryland Highway Contractors Association
  • The Maryland Minority Contractors Association
  • The Dodge Report
  • The Daily Record

Projects located in one to three counties or a single Maryland Department of Transportation State Highway Administration (MDOT SHA) district will be advertised in local newspapers. Projects located in more than three counties or more than one MDOT SHA district are advertised as noted above.

You may purchase plans and specifications from the MDOT SHA Cashier's Office (410-545-8489). If you intend to provide materials, supplies, or services to companies bidding on a job, you may visit the MDOT SHA Cashier's Office and copy the list of potential bidders. This information is not given by telephone.

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