DBE Certification – Equal Protection

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Civil

7^th Circuit Court of Appeals

Officials: ROVNER, WILLIAMS, and TINDER, Circuit Judges.

DBE Certification – Equal Protection

No. 14-1493 Dunnet Bay Construction Company v. Erica J. Borggren

Appellant lacks standing to raise equal protection challenge against IDOT.

“Moreover, even assuming that Dunnet Bay could establish that it was excluded from competition with DBEs or that it was disadvantaged as compared to DBEs, it cannot show that any difference in treatment was because of race. The regulations define a DBE as “a for-profit small business concern” that is owned or controlled “by one or more individuals who are both socially and economically disadvantaged.” 49 C.F.R. § 26.5 (2009). “Socially and economically disadvantaged” individuals include women, “Black Americans,” “Hispanic Americans,” and others. Id. And an individual in any racial group or gender may qualify as “socially and economically disadvantaged.” See id. However, “a firm is not an eligible DBE in any Federal fiscal year if the firm (including its affiliates) has had average annual gross receipts … over the firm’s previous three fiscal years, in excess of $22.41 million.” 49 C.F.R. § 26.65(b) (2009). For the three years preceding 2010, the year it bid on the Eisenhower project, Dunnet Bay’s average gross receipts were over $52 million. Therefore, Dunnet Bay’s size makes it ineligible to qualify as a DBE, regardless of the race of its owners. Thus, even if a DBE general contractor can count its own work force toward meeting the DBE participation goal without subcontracting any work on the project, whereas a non-DBE general contractor cannot, Dunnet Bay has not shown that any additional costs or burdens that it would incur are because of race. The additional costs and burdens are equally attributable to Dunnet Bay’s size.”

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.