Becca Gomez supports ROG+ Partners with business valuation analysis and M&A services. She examines financial statements, conducts economic research, develops valuation models, and prepares written reports. Before joining ROG+ Partners, Becca held previous positions at Stanley Ventures as a Venture Capital Analyst Intern and at PTC as a Corporate Development Intern. Becca graduated from Tufts University in May of 2023 with a B.S. in Quantitative Economics and a minor in Entrepreneurship.
Major DBE Program Changes:
What A/E Firms Need to Know
October 8, 2025
In June, we examined how ongoing litigation and policy developments were creating uncertainty around the future of Disadvantaged Business Enterprise (DBE) and Minority/Women-Owned Business Enterprise (M/WBE) programs. Four months later, that uncertainty has been addressed through federal rulemaking.
On October 3, 2025, the U.S. Department of Transportation (DOT) published an Interim Final Rule that revises the DBE certification process. The rule removes race- and gender-based presumptions of social and economic disadvantage and requires all applicants—including roughly 41,000 currently certified firms—to submit individualized documentation demonstrating social and economic disadvantage.
The DOT made the rule effective upon publication and established a 30-day public comment period that ends on November 3. The agency invoked the "good-cause" exception under the Administrative Procedure Act to implement the rule immediately, citing what it determined to be constitutional concerns and ongoing litigation.
Legal and Policy Context
The DOT's rule follows developments in Mid-America Milling Company v. U.S. Department of Transportation, a case filed in 2023 in the U.S. District Court for the Eastern District of Kentucky. Mid-America Milling Company and Bagshaw Trucking, two contracting firms, challenged the DBE program's race- and gender-based presumptions, arguing they could not compete on equal footing with firms that qualified through those presumptions. The companies claimed the presumptions violated Fifth Amendment equal protection principles.
In September 2024, the court issued a preliminary injunction, finding the plaintiffs were likely to succeed on their constitutional claims. The court held that the DOT had not demonstrated it had previously discriminated against the specific groups receiving presumptive eligibility, that the program lacked a "logical end point" after four decades of operation, and that the presumptions were not narrowly tailored to address specific past discrimination.
In May 2025, after the issuance of executive orders directing agencies to review race- and gender-based programs, the DOT and the plaintiffs jointly requested court approval of a consent order under which the DOT would stipulate that the presumptions violate the Constitution. The court has not yet ruled on this request. The DOT stated it could not continue enforcing regulations it had determined violated constitutional equal protection requirements and invoked the Administrative Procedure Act's "good-cause" exception to implement revised certification standards immediately.
What Changed: New Certification Requirements
The rule replaces four decades of group-based eligibility presumptions with individualized proof requirements. Every applicant—whether newly applying or among the approximately 41,000 currently certified DBEs—must now provide a personal narrative and supporting documentation demonstrating both social and economic disadvantage.
Documentation Requirements
Each narrative must:
- Outline specific experiences where the owner faced barriers in education, employment, or business;
- Describe how those experiences caused measurable economic harm; and
- Include supporting financial records and a current Personal Net Worth (PNW) statement.
For example, a woman-owned environmental consulting firm that previously qualified for DBE certification by demonstrating it met the PNW threshold must now document specific instances where gender created barriers to business success—such as denied financing, lost contracts, or obstacles to professional advancement—and prove those barriers caused quantifiable economic harm. Firms with multiple qualifying owners or certifications across multiple states face additional complexity, as each UCP will likely apply different documentation standards and review timelines.
The rule does not change the existing PNW threshold for economic disadvantage, which remains $1.32 million, excluding the owner’s primary residence and ownership interest in the firm. However, the burden of demonstrating disadvantage has shifted from certifying agencies (which previously had to rebut presumptions) to individual applicants (who must now establish disadvantage affirmatively).
Recertification Process
Each Unified Certification Program (UCP), which is the certifying body operating within each state or U.S. territory, must reevaluate every certified firm under the new criteria “as quickly as practicable.” During that process:
- Firms remain certified but cannot currently be counted toward DBE participation goals until reevaluation is complete;
- Recipients of DOT funds cannot set new DBE contract goals or count participation toward existing ones; and
- Firms that do not meet the new standards may reapply with additional evidence.
The DOT stated that existing contracts do not need to be recompeted; however, goal-setting and counting of DBE participation are suspended until each UCP completes its reevaluation.
Administrative Changes
The rule also introduces terminology and reporting modifications:
- Replaces “race-neutral” and “race-conscious” with “DBE-neutral” and “DBE-conscious”;
- Eliminates requirements to collect race and sex data from bidders’ lists; and
- Requires that disparity studies—the analyses agencies use to set DBE participation goals—include a detailed capacity analysis explaining the data sources, methodology, and market assumptions used to measure DBE availability.
Implementation Considerations
Fifty-three UCPs across all states and U.S. territories must develop new evaluation procedures, train staff to assess narrative submissions, and process tens of thousands of reevaluations while managing regular certification workloads. Since the rule does not specify a timeline, implementation may vary across UCPs. Firms operating across multiple UCPs should prepare for differing documentation standards and review processes.
Agencies must also update forms, data systems, and disparity-study methodologies to comply with the new rule. The new capacity analysis requirement aims to improve accuracy and transparency in goal-setting but may increase study costs and extend the update cycles for some UCPs.
Preparing for the Transition
For certified firms, the next several months will focus on documentation, communication, and readiness:
- Begin early: Gather financial records, loan applications, and contract histories that support your narrative.
- Be specific: Identify particular experiences that created barriers and quantify the resulting impact where possible.
- Stay in contact: Watch for updates from your UCP regarding documentation requirements and timelines.
- Maintain stability: Continue focusing on client diversification and consistent project performance to limit exposure to any temporary disruptions.
Conclusion
The DOT's rule, effective October 3, represents a major shift in how firms qualify for DBE certification. Over the coming months, 53 UCPs across all states and U.S. territories will establish evaluation procedures for narrative-based applications, approximately 41,000 firms will document individual experiences of disadvantage, and transportation agencies will navigate the transition with suspended goal-setting operations.
For firms, success will depend on early preparation, including gathering financial records, documenting specific barriers encountered, and maintaining open communication with certifying agencies. As the new standards are rolled out and firms are reviewed under the updated criteria, the program’s operation under the individualized framework will begin to take shape.
