USDOT Eliminates the Presumption of Race and Sex and Changes the DBE Program to Require ALL Currently Certified Firms to Re-Certify
The USDOT has published an Interim Final Rule (IFR), Disadvantaged Business Enterprise Program and Disadvantaged Business Enterprise in Airport Concessions Program Implementation Modifications (October 3, 2025). The IFR modifies the DBE Program to remove race- and sex-based presumptions of social and economic disadvantage on the basis the presumptions violate the U.S. Constitution. These changes will impact approximately 41,000 businesses. It was effective immediately. To participate in the DBE Program, you will have to re-certify and provide a personal narrative citing specific instances of economic hardship, systemic barriers, and denied opportunities which impeded your personal success in education, employment, or business.
The IFR requires each certifying agency (UCP) to reevaluate any currently certified DBE or ACDBE and re-certify the firms based upon new certification standards “as quickly as practicable.” Firms that do not meet the new standards are required to be decertified. The new standards require an individualized showing of disadvantage, regardless of race or sex by the submission of a Personal Narrative (PN). The PN is to be based on their own experiences and circumstances without reliance in whole or in part on race or sex. Until the UCP completes the re-evaluation process, no goals may be established “to ensure that existing DBEs do not continue to receive any benefits as a result of their certification under the old standards,” and no participation may be counted toward any DBE goals already in effect.
“To satisfy the social and economic disadvantage (SED) requirement and ensure all determinations of disadvantage are not based in whole or in part on race or sex, an owner must provide the certifier a Personal Narrative (PN) that establishes the existence of disadvantage by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner’s progress or success in education, employment, or business, including obtaining financing on terms available to similarly situated persons who did not face barriers in obtaining terms. The PN must state how and to what extent the impediments caused the owner economic harm, including a full description of type and magnitude, and must establish the owner is economically disadvantaged in fact relative to similarly situated non-disadvantaged individuals. The owner must attach to the PN a current personal net worth (PNW) statement and any other financial information the owner considers relevant.”
If you would like more information or assistance, kindly reach out to Lorraine D’Angelo, lorraine@ldaconmplianceconsulting.com or call (914) 548-6369.