Washington, D.C., October 10, 2025
News Summary
The U.S. Department of Transportation has updated its Disadvantaged Business Enterprise (DBE) program by removing sex and race as automatic certification criteria. Effective October 3, this interim final rule mandates a case-by-case evaluation process for current DBE-certified firms, requiring personal narratives that do not mention race or sex. Existing DBE goals are on hold and firms at risk of decertification must swiftly adapt to the new requirements. The announcement precedes Construction Inclusion Week, emphasizing workforce diversity in the construction industry.
Washington, D.C. – The U.S. Department of Transportation (DOT) has announced a significant change to its Disadvantaged Business Enterprise (DBE) program by removing sex and race as factors for automatic certification. This interim final rule, effective October 3, 2023, stipulates that factors for determining social and economic disadvantage cannot include considerations of race or sex, marking a critical shift in federal contracting policies aimed at supporting minority- and women-owned businesses.
This new rule clarifies that being born in a specific country is not sufficient to qualify an individual as socially or economically disadvantaged. All current DBE-certified firms will undergo a strict re-evaluation process on a case-by-case basis, requiring personal narratives that do not include references to their race, sex, or ethnic origin. This means many companies may have to adjust their approach to maintain their status, and firms that are decertified under these new guidelines will not have the opportunity to appeal.
The announcement comes shortly before the 2025 Construction Inclusion Week, set to begin on October 13, 2023. This event will emphasize workforce diversity across the construction industry, further underscoring the timing of the rule change.
As a result of the new regulations, all existing DBE goals are currently on hold pending each state’s reevaluation of certified businesses. The DOT reported that there are nearly 50,000 DBE-certified businesses nationwide and an additional 3,500 participating in the Airport Concessions DBE program. Although existing contracts with DBE stipulations remain enforceable, firms must now prepare to meet the updated certification requirements.
To comply with the new standards, DBE-certified companies will have to provide substantial evidence of their social or economic disadvantage. Those unable to meet the new criteria could face automatic decertification, emphasizing the importance for businesses to respond promptly and appropriately to notices from state or local agencies.
Public comments regarding this interim final rule will be accepted for 30 days after the announcement. However, the DOT opted to bypass the usual process for public input prior to issuing these changes, citing concerns about potentially enforcing unconstitutional requirements. Legal experts warn that this shift may lead to further litigation over its compliance with the Administrative Procedure Act, particularly following recent court decisions that questioned the DBE program’s emphasis on race and sex as qualifiers for disadvantage.
The policy update follows a broader national discourse on affirmative action, particularly after the Supreme Court’s 2023 ruling that limited such practices in higher education. The Trump administration had previously signaled a move away from using race or sex as qualification metrics for DBE certification, opting instead to settle pending litigation on the matter.
As DBE-certified companies brace for changes, Construction Inclusion Week is poised to continue as scheduled, featuring programs designed to boost workforce development and recruitment in the construction sector. However, future endeavors aimed at broadening applicant pools may face legal challenges if they continue to rely on race or sex as determining factors.
FAQ Section
What is the key change in the DOT’s DBE program?
The DOT has removed sex and race as criteria for automatic certification in the DBE program, effective October 3, 2023.
How will current DBE-certified firms be affected?
Current DBE firms will need to be re-evaluated on a case-by-case basis, requiring personal narratives that do not reference race or sex. Those unable to demonstrate their social or economic disadvantage risk decertification.
What is the impact of this rule change on ongoing contracts?
Existing contracts with DBE requirements are likely still enforceable, despite the new rule changes.
What are the next steps for firms impacted by this announcement?
Firms should prepare personal narratives and respond to any communications from state or local agencies to avoid decertification.
Key Features of the DBE Program Changes
| Feature | Old Rule | New Rule |
|---|---|---|
| Automatic Certification Criteria | Included sex and race | Excludes sex and race |
| Evaluation Process for DBEs | General evaluations | Case-by-case with personal narratives |
| Right to Appeal | Allowed for decertification | No appeal for decertified firms |
| Public Comment Period | Standard procedure followed | 30 days post-announcement, bypassing standard procedures |
| Contract Enforcement | Continuity without changes | Existing contracts likely still enforceable |
Deeper Dive: News & Info About This Topic
HERE Resources
Additional Resources
- ENR: US DOT Calls DBE Program Unconstitutional
- Wikipedia: Disadvantaged Business Enterprise
- National Law Review: DBE Contracting After Affirmative Action
- Google Search: DBE Program Changes 2023
- JD Supra: Federal Highway Administration Releases Updates
- Encyclopedia Britannica: Disadvantaged Business Enterprise
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