- Office of the Inspector General
Media Contact for OIG Investigation Leads to Disadvantaged Business Enterprise’s Decertification
The Office of the Inspector General (OIG) investigated allegations that the owner of a disadvantaged business enterprise (DBE) did not qualify as economically disadvantaged, in accordance with federal regulations. Between 2001 and 2020, the company, Atlantic Bridge & Engineering, Inc. (ABE), received subcontracts and supplied materials on 228 Massachusetts Department of Transportation (MassDOT) projects totaling $229 million.
The U.S. Department of Transportation (USDOT) created the disadvantaged business enterprise program to increase the number of minority- and women-owned businesses that work on federally funded projects. The primary goal of the USDOT DBE program is to provide enhanced opportunities for small businesses owned and controlled by socially and economically disadvantaged individuals to work on federally funded transportation projects.
The OIG concluded that ABE’s owner was not economically disadvantaged under the federal DBE regulations, which state that a DBE owner’s presumption of economic disadvantage can be rebutted if she is determined to be “able to accumulate substantial wealth.” (49 C.F.R. § 26.67(b)(1)(ii)(A)) The OIG based its conclusion on an in-depth analysis of the business owner’s overall economic condition, including her ownership of other businesses, vast real estate portfolio, access to credit, and lavish spending from both personal and business accounts.
The OIG reported the matter to MassDOT to evaluate the company’s DBE certification. MassDOT’s Unified Certification Program (UCP) agreed with the OIG’s findings. The Adjudicatory Board of the Massachusetts UCP (Board) initiated ineligibility proceedings based on a determination that ABE’s owner is not economically disadvantaged. After a hearing, held from September 30, 2021 through January 21, 2022, the Board concluded in a written decision, dated May 2, 2022, that ABE no longer meets the eligibility standards of 49 CR Part 26, and therefore, agreed that MassDOT’s proposal to decertify the firm was appropriate.
The OIG commends MassDOT’s action to pursue decertification of the company’s DBE certification. As a result of ABE’s success over several decades working as a MassDOT subcontractor and supplier, ABE’s owner was able to accumulate substantial wealth. Therefore, she is no longer economically disadvantaged and is ineligible for the DBE certification.