USDOT Advances Changes to Disadvantaged Business Enterprise (DBE) Programs
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On October 3, 2025, the U.S. Department of Transportation (USDOT) announced details of an Interim Final Rule(IFR) in the Federal Register making substantial changes to the federal Disadvantaged Business Enterprise (DBE) and Airport Concessions Disadvantaged Business Enterprise (ACDBE) programs. The revisions remove the race- and sex-based determinations of disadvantage that have been the primary basis for certification of businesses as DBEs. The IFR revises the regulations in 49 C.F.R. Part 26 (DBE) and 49 C.F.R. Part 23 (ACDBE). Effective immediately, companies seeking certification as DBEs are required to provide individual evidence demonstrating that they are economically and socially disadvantaged. The Interim Final Rule was issued under a provision of the Administrative Procedure Act that allows for issuance of rules without advanced notice and comment. However, the Federal Register Notice has established a 30-day public comment period, closing on November 3, 2024.
What this means for transportation organizations is that effective October 3, 2025, DBE and ACDBE business owners and applicants must demonstrate on a case-by-case basis that they satisfy the race- and gender-neutral criteria described in the newly revised 49 Code of Federal Regulations (CFR) parts 23 and 26. Importantly, the IFR requires currently certified DBEs and ACDBEs to be reevaluated and recertified under the new certification standards. If current DBEs and ACDBEs do not meet the new certification standards, the IFR calls for these entities to be decertified.
Our understanding is that the intent is not to immediately disrupt contracts that have already been awarded, but to apply the new requirements to all future procurements including those currently in the solicitation phase. However, contracts let prior to the effective date must still recertify all DBE contractors to be counted toward the DBE contract goal or toward a federal- funding recipient’s overall DBE goal. After the reevaluation process, if every DBE performing work on a contract is successfully recertified, then the contract will not need to be modified. But if a DBE performing work on a contract is not recertified during the reevaluation process, the recipient will be required to take appropriate action to comply with the new standards or lose USDOT payments on that contract. Many of the details of the changes are covered in a USDOT FAQ document.
Proponents of these actions cite fairness and a leveling the playing field by focusing programs on truly disadvantaged businesses. Opponents of the actions point to the lack of specifics the new certification process creating uncertainty and disruption. Current DBEs are concerned about canceled or paused solicitations, delayed teaming, and cash-flow risks during recertification.
Unified Certification Programs (UCPs) face a heavy certification surge with limited financial and administrative capacity. Firms certified in multiple states with different requirements, face the need to choose a “home” state of certification that may put other out-of-state work at risk.
Public comments of the IFR are welcomed by USDOT through November 3, 2025. You may submit comments identified by the docket number DOT-OST-2025-0897 by accessing the Federal Rulemaking Portal (http://www.regulations.gov) and following the online instructions for submitting comments.
The IBTTA Government Affairs team will closely monitor this matter and the public responses offered to USDOT. We will also weigh how these actions may weigh into our ongoing discussions with Congress and USDOT on reauthorization of the federal transportation programs. Please direct inquiries to Mark Muriello at [email protected].