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New Disadvantaged Business Enterprise Firms Continue To Face Barriers to Obtaining Work at the Nation’s Largest Airports

Required by the FAA Modernization and Reform Act of 2012
Project ID: 
ZA2016002

Each year, the Federal Aviation Administration (FAA) distributes more than $3 billion in Federal grants for airport projects. In accepting these grants, airports are required to establish disadvantaged business enterprise (DBE) and airport concession DBE (ACDBE) programs. These programs provide small businesses owned and controlled by socially and economically disadvantaged individuals with opportunities to compete for construction, professional services, and concession contracts. 

In the FAA Modernization and Reform Act of 2012, Congress directed our office to report annually on new DBE participation at the Nation’s largest airports and to identify reasons why some have been more successful. Our second review determined that new DBE/ACDBE firms represent a small percentage of disadvantaged firms working at the Nation’s 65 largest airports. In fiscal year 2013, the number of new participants declined by nearly 50 percent from fiscal year 2012, from 83 to 42 firms. The 42 new entrants represent about 2.5 percent of the 1,685 total DBE/ACDBE firms doing business at these airports. The three major barriers identified that hampered new entrants in fiscal year 2012—limited opportunities, high entry costs, and inexperience with the airport bidding process— continued to be key challenges in fiscal year 2013. In addition, we identified two additional barriers in the areas of car rental operations and prompt payment that limit DBE/ACDBE firms’ opportunities to obtain airport work.

FAA concurred with all six recommendations to strengthen FAA’s oversight of airport implementation of the DBE/ACDBE program and to help ensure that new and existing DBE/ACDBE firms compete fairly at the Nation’s largest airports. 

Recommendations

Open

Closed

Closed on 03.03.2017
No. 1 to FAA

Implement a plan for encouraging the participation of ACDBE-certified "goods and services" firms in the car rental industry and promoting their use.

Closed on 04.18.2016
No. 2 to FAA

Issue guidance that corrects the misinterpretation of the statutory and regulatory language that creates an exception for car rental companies from the general requirement to explore direct ownership arrangements as a way to meet ACDBE goals.

Closed on 03.03.2017
No. 3 to FAA

Coordinate with OSDBU to make current Small Business Transportation Resource Center training and assistance accessible to airport DBEs, such as procurement and technical training.

Closed on 03.20.2017
No. 4 to FAA

Re-examine the most recent methodologies used to calculate ACDBE car rental participation goals for the Nation's 65 largest airports, and provide guidance on the goal setting principles to use in calculating ACDBE participation goals. For those airports that did not properly calculate their goals, take action to ensure compliance with DOT guidance.

No. 5 to FAA

In coordination with FAA's Office of Airports, develop and implement a plan to address DBE prompt payment issues with airports and prime contractors.

Closed on 02.05.2016
No. 6 to FAA

Publicize best practices such as those identified in this report relating to prompt payments and uses of online databases.