Navigating the State & Federal Minority Contractor Requirements – MBE / WBE participation goals tied to federal and state funded projects.


Often general contractors working on government funded projects must meet requirements to utilize a certain amount of the budget employing disadvantaged business enterprises (DBE) that are owned by more than 51% minorities or women. These include projects those from Federal agencies such as the Federal Highway Administration, Federal Aviation Administration, and U.S. Department of Transportation, as well as certain states’ individual requirements. Knowing how to meet the requirements, and finding a suitable Minority Business Enterprise, or Women Business Enterprise can seem daunting without having a reputable commercial contractor experienced with the requirements.

minority contractor participation

What are federal minority contractor requirements?

Minority contractor requirements for federal agencies vary from agency to agency as well as specific funding programs as well. For instance, the EPA has 8 – 10% minority participation goals tied to many of their projects, and the USDOT also requires 10% of project funds to employ DBE’s. Disadvantaged Business Enterprises must qualify with a state agency or certified third-party non-profits that specialize in this qualification. The requirements are typically that the business is owned and operated by more than 51% disadvantaged, minority individuals and sometimes stipulate that the individual’s net worth not exceed a certain amount.

What are the State minority contractor requirements?

State minority contractor requirements vary significantly from state to state, as well as certain larger cities having their own requirements for their building department projects. For Instance, Illinois has a 19% participation goal, and California has a similar 25% “small business goal”. Many states have their own MBE specialized economic development offices that help act as a liaison between the program requirements, contractors, and certified businesses seeking to comply with the state requirements.


What are Minority Business Enterprise (MBE) participation goals?

When no suitable contractor can fulfill the requirements of the project, documentation of efforts to hire a MBE / WBE contractor must be documented. (Sometimes, there may not be a qualifying contractor for a specific project that comes forth to bid on government projects). This may range from having to document the sending of emails and faxes to lists of known minority business enterprises as well as publishing in local newspapers.

Meeting MBE requirements with a qualified contractor

If you are unsure about meeting requirements for a project, it is best to check if the specific federal agency or state body has literature or an office specializing in these projects. Further, having a short list of companies that fully understand and have experience with these qualifications is paramount to complying with the requirements of federally funded projects. Direct Steel is a certified WOSB (Women Owned Small Business) and has worked on several government-funded construction projects.

If you have a project you are struggling with compliance with, get in touch with us at the form below and we can help take the headache out of the many legal requirements. 


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