While minority and disadvantaged business enterprise (MBE/DBE) requirements for the construction industry are nothing new, recent electoral developments and the possibility of a COVID-relief driven infrastructure bill promise added emphasis on MBE/DBE requirements and enforcement. It is not too early for contractors to align themselves with reputable MBE/DBE “partners” in anticipation of this growing market.
It is important for contractors and MBE/DBE subcontractors and suppliers to remember that the MBE/DBE entity must provide a “commercially useful” function. Pure “pass-throughs” or “fronts” are nothing but trouble that could expose the participants to debarment, fines and even criminal prosecution.
Care should be given to preparing proper Teaming or Joint Venture agreements that properly satisfy all applicable MBE/DBE requirements, as well as the business goals of the participants.