Appendix C to Part 26 - DBE Business Development Program Guidelines
49:1.0.1.1.19.8.3.1.13 : Appendix C
Appendix C to Part 26 - DBE Business Development Program Guidelines
The purpose of this program element is to further the
development of DBEs, including but not limited to assisting them to
move into non-traditional areas of work and/or compete in the
marketplace outside the DBE program, via the provision of training
and assistance from the recipient.
(A) Each firm that participates in a recipient's business
development program (BDP) program is subject to a program term
determined by the recipient. The term should consist of two stages;
a developmental stage and a transitional stage.
(B) In order for a firm to remain eligible for program
participation, it must continue to meet all eligibility criteria
contained in part 26.
(C) By no later than 6 months of program entry, the participant
should develop and submit to the recipient a comprehensive business
plan setting forth the participant's business targets, objectives
and goals. The participant will not be eligible for program
benefits until such business plan is submitted and approved by the
recipient. The approved business plan will constitute the
participant's short and long term goals and the strategy for
developmental growth to the point of economic viability in
non-traditional areas of work and/or work outside the DBE
program.
(D) The business plan should contain at least the following:
(1) An analysis of market potential, competitive environment and
other business analyses estimating the program participant's
prospects for profitable operation during the term of program
participation and after graduation from the program.
(2) An analysis of the firm's strengths and weaknesses, with
particular attention paid to the means of correcting any financial,
managerial, technical, or labor conditions which could impede the
participant from receiving contracts other than those in
traditional areas of DBE participation.
(3) Specific targets, objectives, and goals for the business
development of the participant during the next two years, utilizing
the results of the analysis conducted pursuant to paragraphs (C)
and (D)(1) of this appendix;
(4) Estimates of contract awards from the DBE program and from
other sources which are needed to meet the objectives and goals for
the years covered by the business plan; and
(5) Such other information as the recipient may require.
(E) Each participant should annually review its currently
approved business plan with the recipient and modify the plan as
may be appropriate to account for any changes in the firm's
structure and redefined needs. The currently approved plan should
be considered the applicable plan for all program purposes until
the recipient approves in writing a modified plan. The recipient
should establish an anniversary date for review of the
participant's business plan and contract forecasts.
(F) Each participant should annually forecast in writing its
need for contract awards for the next program year and the
succeeding program year during the review of its business plan
conducted under paragraph (E) of this appendix. Such forecast
should be included in the participant's business plan. The forecast
should include:
(1) The aggregate dollar value of contracts to be sought under
the DBE program, reflecting compliance with the business plan;
(2) The aggregate dollar value of contracts to be sought in
areas other than traditional areas of DBE participation;
(3) The types of contract opportunities being sought, based on
the firm's primary line of business; and
(4) Such other information as may be requested by the recipient
to aid in providing effective business development assistance to
the participant.
(G) Program participation is divided into two stages; (1) a
developmental stage and (2) a transitional stage. The developmental
stage is designed to assist participants to overcome their social
and economic disadvantage by providing such assistance as may be
necessary and appropriate to enable them to access relevant markets
and strengthen their financial and managerial skills. The
transitional stage of program participation follows the
developmental stage and is designed to assist participants to
overcome, insofar as practical, their social and economic
disadvantage and to prepare the participant for leaving the
program.
(H) The length of service in the program term should not be a
pre-set time frame for either the developmental or transitional
stages but should be figured on the number of years considered
necessary in normal progression of achieving the firm's established
goals and objectives. The setting of such time could be factored on
such items as, but not limited to, the number of contracts,
aggregate amount of the contract received, years in business,
growth potential, etc.
(I) Beginning in the first year of the transitional stage of
program participation, each participant should annually submit for
inclusion in its business plan a transition management plan
outlining specific steps to promote profitable business operations
in areas other than traditional areas of DBE participation after
graduation from the program. The transition management plan should
be submitted to the recipient at the same time other modifications
are submitted pursuant to the annual review under paragraph (E) of
this section. The plan should set forth the same information as
required under paragraph (F) of steps the participant will take to
continue its business development after the expiration of its
program term.
(J) When a participant is recognized as successfully completing
the program by substantially achieving the targets, objectives and
goals set forth in its program term, and has demonstrated the
ability to compete in the marketplace, its further participation
within the program may be determined by the recipient.
(K) In determining whether a concern has substantially achieved
the goals and objectives of its business plan, the following
factors, among others, should be considered by the recipient:
(1) Profitability;
(2) Sales, including improved ratio of non-traditional contracts
to traditional-type contracts;
(3) Net worth, financial ratios, working capital,
capitalization, access to credit and capital;
(4) Ability to obtain bonding;
(5) A positive comparison of the DBE's business and financial
profile with profiles of non-DBE businesses in the same area or
similar business category; and
(6) Good management capacity and capability.
(L) Upon determination by the recipient that the participant
should be graduated from the developmental program, the recipient
should notify the participant in writing of its intent to graduate
the firm in a letter of notification. The letter of notification
should set forth findings, based on the facts, for every material
issue relating to the basis of the program graduation with specific
reasons for each finding. The letter of notification should also
provide the participant 45 days from the date of service of the
letter to submit in writing information that would explain why the
proposed basis of graduation is not warranted.
(M) Participation of a DBE firm in the program may be
discontinued by the recipient prior to expiration of the firm's
program term for good cause due to the failure of the firm to
engage in business practices that will promote its competitiveness
within a reasonable period of time as evidenced by, among other
indicators, a pattern of inadequate performance or unjustified
delinquent performance. Also, the recipient can discontinue the
participation of a firm that does not actively pursue and bid on
contracts, and a firm that, without justification, regularly fails
to respond to solicitations in the type of work it is qualified for
and in the geographical areas where it has indicated availability
under its approved business plan. The recipient should take such
action if over a 2-year period a DBE firm exhibits such a
pattern.