Interim Final Rule Disadvantaged Business Enterprise Program and Disadvantaged Business Enterprise In Airport Concessions Program Implementation Modifications Active
Agency
Department of Transportation
External Link
Summary
USDOT issued an interim final rule, effective immediately, modifying the implementation of the Disadvantaged Business Enterprise (DBE) and Airport Concession DBE (ACDBE) programs. The DBE and ACDBE programs, run by the USDOT, have for decades used statutory presumptions that certain groups (women, specified racial/ethnic minorities) are “presumed disadvantaged,” simplifying certification under those DBE and ACDBE programs. A 2024 decision by the U. S. District Court for the Eastern District of Kentucky found that those presumptions likely violate constitutional equal protection principles. In response, President Trump and Secretary Duffy have issued numerous executive orders or secretarial orders, respectively, that seek to undo that statutory presumption in federal programs.
USDOT issued additional guidance to federal funding recipients as these changes are substantial and summarized below:
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Elimination of Race- and Sex-Based Presumptions. The presumptions that certain classes are automatically presumed socially and economically disadvantaged (based on race or sex) are removed from both DBE and ACDBE programs.
- Individualized Demonstration Requirement. All applicants (including those previously certified) must now affirmatively demonstrate social and economic disadvantage without regard to race or sex, using a personal narrative and supporting evidence that shows specific instances of systemic barriers, economic harm, denied opportunities, etc. Applicants must also submit their current personal wealth statement and relevant financial information.
- Reevaluation of All Existing Certifications. The rule mandates that each Unified Certification Program (UCP – the statewide partnership of transportation agencies that jointly administer DBE and ACDBE certification) immediately reevaluate every currently certified DBE and ACDBE firm under the new standards. Those that no longer meet the new standard must be decertified. Note: The standard process for decertification does not apply here. The rule suspends the protections offered by the standard process, meaning that there is no “formal decertification process” with a written notice, opportunity to respond and a right to administrative appeal.
- Suspension of DBE/ACDBE Goals During Transition. Until each UCP completes its reevaluations, federal funding recipients may not set new DBE contract goals or ACDBE concession-specific goals and they also cannot count DBE or ACDBE participation towards meeting goals.
- Changes to Reporting/Data Collection. The rule removes the requirement to collect and report data about the race or sex of business owners for bidding firms.
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Analysis
Likely Effects of Current Policy
As a result of this Interim Final Rule:
- many existing DBE/ACDBE firms will be decertified if they cannot satisfy the new individualized standard.
- with goals suspended, the programs’ incentives and set-aside structure will be on hold until recertifications are donw.
- UCPs will need to design new processes, forms, and build capacity for reviewing narratives, etc.