U.S. DOT Begins DBE Program Overhaul; 41,000 Enterprises to be ‘Reevaluated’
WASHINGTON—The U.S. Department of Transportation has removed sex and race as criteria for automatic certification in its Disadvantaged Business Enterprise program, according to an interim final rule announced Sept. 30 that went into effect on Oct. 3.
The changes include the end of presumptions of disadvantage-based race or gender. Every existing DBE firm—estimated at 41,000 nationwide—must be reevaluated and can apply for recertification under new case-by-case standards.
“A determination that an individual is socially and economically disadvantaged must not be based in whole or in part on race or sex,” the rule reads. “Being born in a particular country does not, standing alone, mean that a person is necessarily socially and economically disadvantaged.”
The move essentially scuttles the 45-year-old program, attorneys say, which was first established in 1980 before being enacted into law in 1983. The program—with its stated goal to level the playing field for women- and minority-owned businesses bidding on federal contracts—has been one of the highest-profile government initiatives to promote non-majority companies in the construction industry, along with the Small Business Administration’s 8a program.
In an era when diversity and inclusion have come under fire from President Donald Trump’s administration, proponents of DBE say they are emphasizing inclusion for everyone to broaden the potential applicant pool for the industry, which now faces a severe labor shortage.
According to a federal report on previous final rule for the program announced in April 2024, there are nearly 50,000 firms certified as DBEs nationally, with another 3,500 in DOT’s similar Airport Concessions DBE program.
While the programs set aspirational goals for participation in federal contracts by women and minorities at the national level, departments of transportation in individual states and those in D.C., Puerto Rico and the U.S. Virgin Islands handle the certification of businesses. Each administers a Unified Certification Program that applies to agencies across its jurisdiction. In guidance issued Sept. 30 along with the new rule, DOT said those UCPs must now reevaluate the eligibility of all existing DBEs.
The rule immediately impacts all current DBE and ACDBE (Airport Concession DBE) firms and future applicants, all of whom will now be required to show their disadvantage on an individual basis, according to attorney Jacqueline Unger, a partner at the law firm of PilieroMazza, who recently wrote in her blog post. Certified firms that can’t show social or economic disadvantage will be decertified.
Future Litigation
Legal specialists across the country are now weighing in with opinions. “This action by the DOT will likely be challenged for failure to comply with the Administrative Procedure Act,” wrote Maureen Sweeney, an attorney in the Pittsburgh office of the law firm Steptoe & Johnson. “In the meantime, this new rule becomes effective immediately upon publication in the Federal Register.”
The development follows court rulings last year that found the DBE program’s reliance on a presumptive disadvantage due to race and sex was likely unconstitutional. That determination came in the wake of the 2023 Supreme Court ruling in Students for Fair Admissions v. Harvard that knocked down affirmative action in higher education, noted a recent report published by CONSTRUCTIONDIVE.
What’s Next?
The changes take effect when the agency formally published the Interim Final Rules in the Federal Register on Oct. 3. The department will take public comments 30 days after. The American Road & Transportation Builders Association published a summary of the revisions for the construction industry and is urging all interested members to submit comments.
Finally, it should be noted that Congress will have an opportunity to further revise the DBE program as part of the surface transportation reauthorization legislation due a year from now.
Changes to the DBE Program:
- U.S. DOT is rescinding the longstanding presumption that women, Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, and Subcontinent Asian Americans are “socially and economically disadvantaged” for purposes of DBE program participation.
- That term can now apply on a case-by-case basis to any U.S. citizen (or lawfully admitted permanent resident), as determined by a Unified Certification Program (UCP).
- All existing DBE firms will need to be reevaluated. “As quickly as practicable,” UCPs will need to identify and contact these firms (which U.S. DOT estimates as 41,000 nationwide) so they can submit documentation for recertification based on the new standards.
- Additional firms, not previously eligible for the DBE program, may also apply for certification.
- All applicants must submit a “Personal Narrative” documenting “economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business, including obtaining f inancing on terms available to similarly situated, non-disadvantaged persons.”
- The UCPs will provide results to the relevant transportation agencies. U.S. DOT “will work with each UCP to minimize the practical impact of this rule change during the pendency of the reevaluation process.”
- A state DOT “may not count any DBE participation toward DBE goals” until the reevaluation process is complete for their jurisdiction. This effectively suspends compliance with a state’s overall goal until its pool of DBE firms is reconstituted.
Published: October 16, 2025.