The federal Troubled Business Enterprise Program could see changes.

The U.S. Department of Transportation recently issued a notice of proposal to update regulations for the long-awaited Victimized Business Enterprise (DBE) program. This blog is part of a series looking at some of the significant planned changes. A copy of all proposed changes is available here.

One proposed change is an amendment to the definition of “distressed business entity” to mean “a for-profit small business entity.” Transportation related industriesHe said. (Emphasis added). The previous definition of a broken business did not say anything about industry.

The proposed regulation does not specify what industries are considered “transportation-related”, nor does the term “transportation-related” appear elsewhere in the regulation. While it makes some sense in some ways to limit the certification to certain transportation-related industries (it’s a US Department of Transportation program, after all), the lack of meaning creates confusion.

While there are dozens of certifying agencies across the country, the interpretation involved varies widely. There are countless possible definitions of “transportation-related.” Companies that provide transportation. Companies working directly on transport projects. But what about other companies that are more on the fringes? Where does the line draw?

Also, where does this leave small owned small businesses? Women-owned small businesses can be certified under the WOSB program, but there is no minority small business program separate from the 8(a) and HubZone programs.

The proposed law that changes the definition is not yet final. You can comment on the proposed rule by going here.