As part of determining whether a company is eligible for certification as a disadvantaged business enterprise (DBE) with the Maryland Department of Transportation (MDOT), must the company be considered an independent business?
Yes. Only an independent business may be certified as a DBE. To be an independent business, the viability of the business must not be dependent on a relationship with another company or companies.
As part of the certification application process, in determining whether a potential DBE is independent MDOT will scrutinize its relationships with non-DBE firms in areas such as personnel, facilities, equipment, financial and bonding support. Also, the potential DBE’s relationships with prime contractors are examined in order to determine whether there is a pattern of exclusive or primary dealings with the primes that would compromise its independence. However, it should be noted that MDOT, in assessing relationships between the potential DBE and non-DBE firms, does factor in and consider normal industry practices.
Certification of a business can be a viable tool for developing and maintaining business relationships. Businesses seeking certification as a DBE in Maryland may want to consider obtaining legal advice concerning eligibility requirements for certification prior to applying for certification.
This information is provided for general information only. None of the information provided herein should be construed as providing legal advice or a separate attorney client relationship. Applicability of the legal principles discussed may differ substantially in individual situations. You should not act upon the information presented herein without consulting an attorney of your choice about your particular situation. While PK Law has taken reasonable efforts to insure the accuracy of this material, the accuracy cannot be guaranteed and PK Law makes no warranties or representations as to its accuracy.