State transportation departments nationwide are temporarily pausing Disadvantaged Business Enterprise (DBE) contracting goals as they move to recertify approximately 41,000 participating firms under the U.S. Department of Transportation’s newly revised requirements. Lawyers say this sweeping review stems from an interim final rule that restructures who qualifies for DBE status on federally funded transportation projects.
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The rule overhaul stops automatic DBE qualification based on sex or race. While previous standards granted certification to many women- and minority-owned contractors without additional personal documentation, those firms must now prove their disadvantage through other measurable criteria. Attorneys say the change creates the most immediate impact for groups historically certified without having to provide a personal narrative.
Although existing contracts awarded before the rule took effect on Oct. 3 will still honor DBE commitments, attorneys clarify that participating firms will not be removed from current projects simply due to recertification. Firms may also appeal decisions if their status is denied.
The interim rule took effect immediately on Oct. 3, initially creating uncertainty among firms worried they might be removed from the program overnight. Follow-up guidance issued on Oct. 24 clarified that active certifications remain intact for ongoing projects. However, the DOT also confirmed that every participating firm must now reapply and submit narrative documentation unrelated to race or sex.
Applicants must now demonstrate individual disadvantages through lived experience, supported by a personal statement and an updated personal net worth disclosure. Previously, the net worth limit was capped at $2.047 million, but under the new process, all applicants must resubmit financial data.
Attorneys Robyn St. Hilaire and Natalie Nicole Mark of Offit Kurman stated that this shift places more responsibility on previously presumed groups. “Female- and minority-owned businesses will feel the most immediate impact,” St. Hilaire and Mark wrote. “Owners must now prepare a detailed personal narrative and financial disclosure demonstrating disadvantages based on lived experience not related to race or gender.”
While the DBE program operates nationally, each state handles certification through unified certification programs (UCPs). Under the new directive, every UCP must reevaluate DBE eligibility without relying on presumptive categories tied to race or gender. Because of this, state-level DOTs are putting participation goals on hold until recertification is complete.
Attorney Chris Slottee of Schwabe in Anchorage, Alaska, emphasized the temporary nature of the pause, explaining that goals are only suspended during this reassessment. “The DBE goals are being removed only until all existing DBEs are recertified without using the rebuttable presumption of social disadvantage,” Slottee said.
Experts advise firms not to delay. Goals are expected to return once the recertification process is complete, and being proactive will position businesses to compete once federal targets are reinstated. Attorney Jacqueline Unger of PilieroMazza stressed the advantage of timely action. “The goals will come back into play on future contracts once this reevaluation process is complete,” she said. “Firms should get recertified so that they’ll be eligible to bid on that DBE work down the line.”
St. Hilaire and Mark also noted that several states have already begun implementing new procedures, encouraging businesses to contact their UCPs immediately to understand new requirements and timelines.
For many transportation-sector businesses, DBE program participation is not merely beneficial—it may be essential for survival. Small contractors and specialty firms often rely on DBE opportunities to compete against larger, multi-regional corporations. Attorney Danielle Dietrich of Potomac Law Group highlighted the importance of maintaining certification for eligible enterprises. “The DBE certification is the only way for many of them to compete against the larger, private-equity backed firms,” she said. “It’s absolutely worth the time and effort for them to put together the personal narrative and new personal net worth statement if it means more of a chance of keeping their business alive.”
Originally reported by Joe Bousquin in Construction Dive.
