The U.S. Department of Transportation (“DOT”) unveiled a new Interim Final Rule (“IFR”) that fundamentally changes the Disadvantaged Business Enterprise (“DBE”) and Airport Concession Disadvantaged Business Enterprise (“ACDBE”) Programs. The IFR became effective October 3, 2025, and has left many wondering how to implement the IFR with limited guidance.‍

Program History‍

Congress created the DBE program in 1983 with the requirement that at least 10% of highway and transit federal funds be expended with small businesses owned and controlled by socially and economically disadvantaged individuals, including minorities and women.

To meet this requirement, federally financed transportation agencies were required to establish goals for the participation of DBEs in DOT-funded contracts, certify the eligibility of DBEs, and establish a process to achieve these goals.The ACDBE program functioned similarly, with a specific focus on DBE participation in airport concessions.

For decades, these programs expanded access to federally funded transportation workand airport concessions, with nearly 50,000 certified DBEs and 3,500 certified ACDBEs as of April 2024. ‍

Changes in Policy

On September 30, 2025, the DOT published the IFR, updating the program to remove the race- and gender-based presumption of disadvantage, require Unified Certification Programs (“UCPs”) to recertify DBE and ACDBE businesses’ statuses based on economic and social disadvantage, and eliminate reporting requirements. The rule adopts Trump Administration policies, aligning with positions taken by the federal government in the wake of student admissions cases against Harvard and the University of North Carolina. The IFR also corresponds to the federal government’s arguments in Mid-America Milling Co. v. U.S. Dep’t. of Transportation.    

Normally,before a final rule is published the DOT is required to provide the public notice and an opportunity to comment. However, the DOT has claimed good cause exists to avoid the notice and comment rulemaking procedures, per 5 USC §553(b)(B), because the DOT believes there to be constitutional issues with the DBE program’s race- and gender-based presumptions. (citing Mid-America Milling Co. v. U.S. Dep't of Transp., No. 3:23-cv-00072, 2024 WL 4267183(Sept. 23, 2024) and Students for Fair Admissions, Inc. v. Harvard, 600U.S. 181 (2023)).  Comments on the new rule are being accepted until November 3, 2025, but the comments will not impact the effectiveness of the IFR. It is unknown at this time whether the DOT will issue a revised final rule, and in doing so whether they will or will not consider the IFR comments. ‍

Murky Waters

For airport sponsors this IFR raises many questions, particularly regarding how to implement the reevaluation process, and what to do about existing contract goals, pending competitive solicitations, and ongoing contract negotiations.

Each UCP is directed to reevaluate current DBEs and ACDBEs to recertify or decertify them according to these new standards.  Recently issued FAQs from the DOT came with a reprieve of sorts, clarifying that UCPs are required to reevaluate the certifications only of those DBEs/ACDBEs for which the UCP is the jurisdiction of original certification. DBEs and ACDBEs who are recertified by their home UCP would then reapply for interstate certification for those states under which they would like to maintain certification. When the UCPs establish their recertification processes, in addition to a personal net worth statement, DBEs and ACDBEs will need to submit a personal narrative that establishes a disadvantage based on individualized proof regarding specific instances that impeded the owner's progress or success in education, employment, or business. These disadvantages can include difficulties in obtaining financing on terms available to similarly situated persons who did not face these barriers.

There is no set date when all UCPs must complete their reevaluations, as 49 CFR §26.111 only instructs UCPs to complete this process “as quickly as practicable.” However, to reevaluate some 53,000 DBEs will take months, if not years.

Regarding the impact of the IFR on contracts, the FAQs indicate that immediate action by airport sponsors regarding contract documents is required – if a contract is not yet executed, airport sponsors should identify whether an amendment can be used to remove a DBE or ACDBE goal.  On the other hand, for already-executed agreements, airport sponsors are directed to freeze counting participation towards goals until recertification is complete. This of course begs the question as to what airport sponsors should do if (or, more realistically, when) some previously certified DBEs and ACDBEs fail to get recertified. Airport sponsors should safely assume that they will have to address this issue, so now is the time to come up with a plan to, in the words of the DOT, “take appropriate action to discontinue the effect of the unconstitutional certification.”  

The management of these contracts will change as airport sponsors no longer have DBE or ACDBE reporting requirements. In addition, some airport sponsors will also have to consider their state or local rules related to the DBE and ACDBE programs. It is possible that some metrics or contractual requirements related to the state or local rules remain in place. ‍

DBEs and ACDBEs should begin working on a personal narrative that demonstrates how the 51% owner (or collection of owners comprising 51%) of the company seeking ACDBE or DBE certification is economically or socially disadvantaged based on individualized proof regarding specific instances that impeded the owner's progress or success in education, employment, or business –think details, details, details.  We have a list of questions to applicants to aid in this process, and firms with multiple disadvantaged owners might be well served to establish this type of list as well. As of the writing of this article, several states had issued deadlines for submission of the documents for reevaluation, but based upon the FAQs, it appears that an attempt to decertify an already-certified DBE or ACDBE solely for missing a deadline may be inconsistent with the rules and the IFR.That said, until a DBE or ACDBE is recertified by the UCP of original certification, the company is ineligible to participate in the program – think of it as being frozen.‍

For the parties in between the airport sponsors and the DBEs and ACDBEs,questions also exist: what happens if a prime contractor has committed to a goal under an airport contract, and has a contract with a DBE to meet that goal, but the DBE doesn’t get recertified? What is the impact on a joint venture entity where one of the owners isa DBE or ACDBE, and fails to get recertified?  How might an attempt to terminate a subcontract due to failure to get recertified be analyzed by the prime contractor, and addressed by the subcontractor? Parties in this “sandwich position” face contractual questions both with the airport sponsors, and with their subcontractors.‍

Summary – Patience is a Virtue ‍

While the speed and impact of the IFR is significant, there are still more questions than answers.  As challenging as it can be to move forward without clarity, answers will likely come over time, and in the meantime, patience and thoughtful action is critical to avoid creating even more confusion or unintended consequences.

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