10/24/2025 UPDATE: U.S. DOT has released a Frequently Asked Questions document addressing many questions about the new DBE Rule.
On October 3, 2025 the U.S. Department of Transportation (DOT) released an Interim Final Rule (IFR) on the Disadvantaged Business Enterprise (DBE) Program which removes the race and sex-based presumptions from the program. Because the rule took effect immediately, many questions have arisen regarding its impact on specific elements of the DBE program and on ongoing or upcoming projects and lettings.
States are taking varied approaches to implementation and enforcement, particularly regarding whether or not to apply existing DBE contract goals to contracts that were already executed, awarded, advertised, or otherwise open prior to October 3. While many states have already released guidance of their own, there are still state DOTs that have yet to release information or take action.
AGC continues to engage with DOT officials and has formally submitted questions asking for additional details and clarifications.
Before making any decisions, AGC recommends that you reach out to your project owner for guidance.
As always, we will provide additional details as they become available.
In the meantime, please see the initial highlights of the IFR:
Removes Race or Sex-Based Presumptions – The IFR removes the race and sex-based presumptions and states that the owner of a DBE must do the following to be certified as a DBE:
- Demonstrate that the owner is socially and economically disadvantaged based on his or her own experiences and circumstances that occurred within American society, and without regard to race or sex;
- Submit to the certifier a personal narrative establishing the existence of disadvantage by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business, including obtaining financing on terms available to similarly situated, non-disadvantaged persons;
- State how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude, and establish the owner is economically disadvantaged in fact relative to similarly situated non-disadvantaged individuals; and
- Attach to the Personal Narrative a current personal net worth statement and any other financial information the owner considers relevant.
New Certification Standards for DBEs – Unified Certification Programs (UCP) must reevaluate the eligibility of existing DBEs to ensure that they meet the new certification standards and decertify any DBE that does not.
No DBE Contract Goals During the Transition – The IFR states that until a UCP completes the new reevaluation process, each recipient may not:
- Include DBE contract goals; or
- Count any participation toward overall DBE goals.
Race and Sex Removed from DBE Recordkeeping & Reporting – The IFR eliminates the requirements to provide bidders list information about the majority owner’s race and sex for all DBEs and non-DBEs who bid as prime contractors and subcontractors on each of a recipient’s federally assisted contracts.
These requirements will mean that existing DBEs do not continue to receive any benefits as a result of their certification under the old standards. DBE participants who have previously qualified based in whole or in part on their race or sex will need to develop and provide the individualized narrative required by the IFR.
The Interim Final Rule provides that until a UCP completes the reevaluation process, no recipient covered by that UCP shall be subject to the compliance provisions of 49 CFR § 23.57 or 49 CFR § 26.47. Recipients will also not be required to update their overall goals during this process.
U.S. DOT Resources
Text of the Interim Final Rule
For more information, please contact Deniz Mustafa.