Pennsylvania Record

Friday, October 18, 2019

Construction company says it didn't make too much money to lose federal funding

Federal Court

By Charmaine Little | Aug 7, 2019


PHILADELPHIA - A construction company has called out the U.S. Department of Transportation and related parties for saying the company made too much money.

On June 13, SJA Construction challenged its decertification as a Disadvantaged Business Enterprise (DBE) in the U.S. District Court for the Eastern District of Pennsylvania. SJA named USDOT, Secretary of Transportation of the U.S. Elaine L. Chao and Southeastern Pennsylvania Transportation Authority (SEPTA) in its action.

A DBE certification is intended to give smaller businesses that are owned by groups seen as socially and economically disadvantaged a better chance to vie for federal transportation contracts. In 2014, the limit for average annual gross receipts for businesses to qualify was adjusted to $23.98 million (it was previously $22.41 million) over a three-year period.

SJA sued shortly after SEPTA told the company it didn’t qualify for DBE certification because it brought in $25,013,159 between 2014 and 2016, beyond the $23.98 million threshold. The Pennsylvania Unified Certification Program (PAUCP) and the USDOT affirmed the decertification.

SJA wants the court to order a declaration that the $23.98 million cap isn’t correct because it wasn’t adjusted for inflation that has happened since 2014 and to order the regulation be changed to show the correct cap figure.

SJA said it “is suffering immediate and irreparable harm by the PAUCP’s improper decertification and the USDOT’s affirmation there,” according to the lawsuit. “The decertification has resulted in plaintiff being removed from the PAUCP list of certified DBE contractors in Pennsylvania and, as a result, plaintiff is not eligible to participate as a certified DBE contractor on upcoming federally-funded construction projects.”

SJA also asked the court to declare the decertification against it was incorrect and to be reinstated as a DBE.

SJA sued for mandamus via the 28 U.S.C. section 1361, the Administrative Procedure Act – 5 U.S.C. section 701, and declaratory judgment act – 28 U.SS.C. section 2201(a).

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