On October 3, 2025, the U.S. Department of Transportation published its Interim Final Rule related to the Disadvantaged Business Enterprise (DBE) Program and Disadvantaged Business Enterprise in Airport Concessions (ACDBE) Programs. The Interim Final Rule (IFR) states that revisions to regulations (set forth in 49 CFR Part 26 and 49 CFR Part 23) are effective immediately. The IFR does not eliminate the current DBE and ACDBE programs but places additional requirements on state and local governments that operate the programs.

Effective October 3, 2025, the IFR directs state and local agencies implementing the DBE and ACDBE programs to suspend operations of key components of those programs, such as setting DBE and ACDBE contract goals, until the conditions described below are met.

• All firms seeking certification (including firms currently certified as DBEs or ACDBEs) must individually demonstrate social and economic disadvantage (“SED”) based on their own experiences and circumstances within American society, and without regard to race or sex. Such information is to be provided through a Personal Narrative. This replaces the rebuttable presumption of social disadvantage for women business owners and owners from certain minority groups. Prior to this change, the regulations had only required non-minority male business owners to individually demonstrate social and economic disadvantage when applying for DBE or ACDBE certification. Now all applicants must go through this process.
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• Each firm currently certified as a DBE (or ACDBE) under the previous regulations must be provided the opportunity to demonstrate its continued DBE eligibility under the new standards and then, based on what was submitted, the certifying agency determines whether it has been recertified or is decertified.
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• The IFR directs certifying agencies in each state’s Unified Certification Program to reevaluate each firm and for the UCP to notify USDOT when it has completed this process. The IFR instructs certifying agencies to do this as quickly as practicable. Each state UCP’s process is subject to USDOT review.
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• Certifying agencies in each state will also need to modify their process for new applications for DBE and ACDBE certification. This includes application forms and the processes for certification review.
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After meeting these requirements, state and local agencies must still set overall annual DBE and ACDBE goals (including steps 1 and 2, which might include using the results of a disparity study), project the portion of those goals to be through neutral and “DBE-conscious” means, operate neutral programs, which might include SBE set-asides for small contracts, and set DBE contract goals for any portion of the overall DBE goal that cannot be met through neutral means.

Keen Independent and its founders have helped state and local governments navigate changes to requirements concerning MBE, WBE, DBE and ACDBE programs since the U.S. Supreme Court set the current standard for defensible MBE programs in 1989 (in the City of Richmond v. J.A. Croson Co. decision). We see this as a continuation, not an end, of programs to assist socially and economically disadvantaged business owners. At each stage of the evolution of these programs, whether through availability and disparity studies, program design, creation of certification processes, operational support, or litigation support, our team has been committed to assisting state and local agencies.

Please contact us at dkeen@keenindependent.com or 303-385-8515.