Chapter 14:
Disadvantaged and
 Small Business Programs

Section 1: Program Overview

General

The Civil Rights Division (CIV) is responsible for the oversight of the Department’s Disadvantaged Business Enterprise (DBE) and Small Business Enterprise (SBE) programs.
The DBE Program as authorized by
Title 49, Code of Federal Regulations (CFR), Part 26
ensures nondiscrimination in the award and administration of United States Department of Transportation (USDOT) contracts. The DBE Program is a legislatively mandated USDOT program that applies to Federal-aid highway dollars expended on federally-assisted contracts. The USDOT must approve the Department’s DBE Program and its annual goals to ensure compliance with all Program requirements. The Department’s
DBE policy
outlines the goals and mission for the program.
The DBE project goal applies to the final value of the original contract award. Any change orders that may increase or decrease the value of the contract will also be considered for the overall DBE goal. Refer to the Prime Contractors Compliance Guide and the applicable contract Special Provisions below:
  • Special Provision 000-394
    , "Disadvantaged Business Enterprise in Federal-Aid Contracts" (for projects let February 2017 and using the 2014 Standard Specification)
  • Special Provision 000-022
    , "Disadvantaged Business Enterprise in Federal-Aid Contracts" (for projects let using the 2024 Standard Specification)
The SBE Program as authorized by
43 TAC §9.300
and Special Provision 000-019 “Small Business Enterprise in State Funded Projects,” offers businesses another avenue to maximize their opportunities of doing business with TxDOT. The Program applies to highway construction and maintenance projects that are funded entirely by state or local funds.
Prompt Payment is included in the contract through Item 9, “Measurement and Payment”, of the Standard Specifications and covered in Chapter 11 – Section 3 of this manual.

Commercially Useful Functions (CUF) Reviews

The following are the scenarios in which you would need to perform a CUF Review on your project: (paused per the
Interim Final Rule
10/3/2025)
  • Federal-Aid Projects with a DBE goal:
    • CUF Review required on conscious DBEs
    • CUF Review required on neutral DBEs
    • CUF Review required on SBEs.
  • Federal-Aid Projects without a DBE goal:
    • CUF Review required on neutral DBEs
    • CUF Review required on SBEs.
  • State Funded Projects with a SBE goal:
    • CUF Review required on SBEs
    • CUF Review required on DBEs since DBEs are automatically certified as SBEs.
  • State Funded Projects without a SBE goal:
    • CUF Review not required on SBEs; however, districts may conduct CUF Reviews at their discretion.
    • CUF Review not required on DBEs.

DBE Goal Assurances

Throughout the duration of the project, the district will monitor the overall project’s DBE goal and the individual conscious committed dollar amounts. If the prime contractor is not meeting the overall DBE goal and individual commitment requirements, a Good Faith Effort must be submitted by the prime contractor. The district must coordinate with the assigned CIV Compliance Analyst prior to project acceptance. Per the
49 CFR Part 26 §26.13 (b)
, failure by the prime contractor to carry out the DBE requirements is a material breach of the contract which may result in termination of the contract or other remedies the department deems appropriate. These remedies may include the following:
  • issuing a letter or reprimand to the prime contractor
  • withholding all or a percentage of the monthly estimate payment
  • liquidated damages
  • default for breach of contract
All extreme cases of noncompliance or a prime or subcontractor’s repeated failure to comply with the DBE requirements, will be escalated to the appropriate department authority to enforce the following contractual remedies:
  • assessing sanctions
  • decrease the prime contractor's bidding capacity on future contracts, for a period specified by the Department
    • For DBE subcontractors pause the issuance of any additional or new work on existing contracts pending the outcome of a review by CIV
    • For Non-DBE subcontractors utilizing DBEs, suspension for a period of time specified by the Department for additional work or future projects.
  • disqualifying the contractor from future bidding as non-responsible

Resources

The following guides are available for additional use:
  • District DBE Compliance and Monitoring Guide
  • Prime Contractor's Compliance Guide
  • DBE Contractor's Compliance Guide
For additional information regarding these programs, contact CIV at 512-416-4700 or email at
CIV_Compliance@txdot.gov