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January 17, 2017

New Disadvantaged Business Enterprise Participation Is Decreasing at the Nation’s Largest Airports, and Certification Barriers Exist

Required by the FAA Modernization and Reform Act of 2012
Project ID: 
ZA2017021
View PDF Document

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 third and final review determined that between fiscal years 2012 and 2014, the number of existing DBE firms working at the 65 largest airports decreased by 31 percent and the number of new DBE firms working at these airports decreased by 76 percent. Several factors hampered new and existing firms that pursued DBE/ACDBE certification. These include (1) FAA’s inability to effectively track certifying authorities’ processing times for DBE/ACDBE applications to ensure they meet regulatory timeframes; (2) lack of a method to determine whether mandated DBE certification training is complete or consistent; and (3) absence of a “train-the-trainer” program from the Departmental Office of Civil Rights (DOCR) to ensure that FAA, Federal Highway Administration, and Federal Transit Administration personnel provide consistent guidance and training to certification staff. We made 11 recommendations to strengthen FAA’s oversight of airports’ implementation of the DBE/ACDBE program and help ensure that only eligible firms are certified. DOCR and FAA concurred with all 11 recommendations.

Recommendations

Open

Closed

Closed on 06.07.2017
No. 1 to OST

Update the current list of active certifying authorities for each State Unified Certification Program and implement procedures for regularly maintaining and publishing the list.

Closed on 05.23.2018
No. 2 to OST

Issue guidance to certifying authorities on steps to take to ensure compliance with the regulatory requirements for the timely processing of all applications for certification.

Closed on 08.20.2020
No. 3 to OST

Require FAA, FHWA, and FTA to develop and implement a joint plan and schedule for reviewing certifying authorities within the 52 UCPs. Include within the joint plan an assessment of whether required time-frames for processing certification applications are being met and whether mandatory certification training is being completed.

Closed on 05.23.2018
No. 4 to OST

Establish procedures to periodically review, update, and publish the mandatory certification training program required by the FAA Modernization Reform Act of 2012.

Closed on 10.10.2018
No. 5 to OST

Issue guidance to certifying authorities on the steps they must take to ensure persons performing certification functions or involved in the certification process are properly trained prior to being allowed to approve applications.

Closed on 09.09.2019
No. 6 to OST

Institute procedures for maintaining a current list of certification staff who need and have completed the mandatory training.

Closed on 03.30.2020
No. 7 to OST

Develop and implement an advanced training program on topics requested by certifying authorities, identified in compliance reviews, determined by DOCR, or identified in this report (i.e., the examination of business structures/affiliations, reviews of personal net worth, verification of ownership and control, detailed site-visit reports, and fraud awareness).

Closed on 08.27.2020
No. 8 to OST

Develop and implement a "train the trainer" program for the three Operating Administrations to deliver consistent guidance and training to their recipients on all aspects of the DBE program.

Closed on 02.20.2019
No. 9 to OST

Publicize best practices such as those identified in this report relating to certification practices.

Closed on 02.20.2018
No. 10 to FAA

Implement a process to periodically monitor, analyze, and report to DOCR on significant or noteworthy changes in DBE participation at the large and medium hub airports. As part of this process, include a requirement that FAA's reports to DOCR identify the reasons noted by recipients for drops in participation and recommend actions to address them, as appropriate.

Closed on 11.06.2017
No. 11 to FAA

Require certification reviews to assess whether the certifying authority is (a) meeting required timeframes for processing instate and interstate applications and (b) ensuring staff have completed mandatory certification training.