Often when working with my Disadvantaged Business Enterprise (“DBE”) clients, I hear complaints about businesses that are certified as a DBE but who do not meet the requirements – perhaps the owner of the company’s personal net worth is clearly too high, or the SED owner is not actually controlling the business.

The federal DBE regulations outline a procedure for reporting a potentially ineligible DBE. According to 49 C.F.R. § 26.87(b)(3), any individual can submit a written complaint to the certifying agency asserting that a currently certified DBE may not meet the eligibility criteria. It is crucial for the complainant to specify the reasons why they believe the company is ineligible; a vague allegation of ineligibility will not suffice. The more evidence that you can provide, the better.

Many times, the individual filing the complaint prefers to remain anonymous due to concerns about potential retaliation or other repercussions. However, it is important to note that certifying agencies are not obligated to accept anonymous complaints. While there is a level of confidentiality for the complaining party (49 C.F.R. § 26.109(b)(3)), the investigation might be impeded if the complainant insists on maintaining anonymity. To protect client anonymity, I have brought complaints about certified DBEs on behalf of my clients, keeping my client anonymous.

The regulations also emphasize that the company being complained about cannot retaliate or discriminate against the complainant for filing a complaint (49 C.F.R. §26.109(d)). However, there is no stated penalty or right of action if the company did so.

Once a complaint is lodged, the certifying agency must assess the complaint, review any submitted materials from the complainant or the subject firm, and gather additional information as needed. The agency may also conduct an investigation (49 C.F.R. §29.87(b)(3)(i)).

If the agency determines that a firm is ineligible, it must notify the firm in writing, outlining the proposed ineligibility and providing reasons for the decision. The complained-about company is entitled to a hearing. Similarly, if the agency finds that the firm remains eligible, it must inform both the complainant and the firm in writing, referencing evidence supporting its decision.