Legal Bulletins

On October 3, 2025, the U.S. Department of Transportation (DOT) quietly detonated a regulatory bombshell. Through an Interim Final Rule, the DOT has effectively decertified every Disadvantaged Business Enterprise (DBE) and Airport Concessions DBE (ACDBE) in the nation, overnight.

For decades, DBE certification relied on a rebuttable presumption: if you were a member of certain racial or gender groups, you were presumed socially and economically disadvantaged. However, under new leadership, the DOT now argues that those presumptions violate constitutional equal-protection principles. As a result, all DBE and ACDBE firms must re-establish eligibility individually by submitting two new documents: (i) a Personal Net Worth (PNW) statement, and (ii) a Personal Narrative explaining specific, real-world barriers faced in business.

Previously, if an owner identified as part of a designated racial or gender group and met the PNW limit, that combination was presumptive proof of social and economic disadvantage. Now, that presumption is gone. Each firm must now affirmatively prove disadvantage through both a Personal Narrative and an updated PNW. That means certifiers will read the PNW in context, not as a formality, but as evidence supporting or contradicting the claimed barriers.

Until that re-evaluation occurs, goal-setting, counting, and reporting under the DBE program are on hold. Accordingly, state and local agencies can neither set new participation goals, nor credit DBE involvement toward existing ones. In practical terms, that means the entire DBE system, a multi-billion-dollar engine of opportunity for minority- and women-owned firms,  is temporarily frozen.

The DOT views the narrative requirement as more than an essay exercise. It wants tangible examples of disadvantage — such as denied loans, exclusion from networks, or barriers to bonding and capital access. Owners must show how those experiences caused real economic harm.

So, why now? 

The DOT argues it must bring the program into constitutional alignment after recent court challenges questioning race-based presumptions in federal contracting. The agency skipped the usual lengthy rulemaking, citing “urgent necessity,” but even so, lawsuits are likely.

While the immediate result is uncertainty, the DOT is sending a clear signal that the rules have changed. For business owners, the message is simple: your certification is no longer automatic. Firms that delay preparing their narratives or cleaning up their finances risk falling out of the program indefinitely. Those that act quickly, with a focus on creating credible, evidence-based submissions, can preserve their standing and even stand out as models of compliance.

We are witnessing the start of what DOT calls a “re-grounded” approach to disadvantage. For thousands of small businesses, it’s also a wake-up call. If your firm has built its pipeline around DBE work, now is the time to re-evaluate your positioning, and get professional guidance on how to position yourself to move forward in this dynamic environment. The next few months will determine who remains in the program, and who does not.

For more information, contact Julian Haffner.

410-576-4243  •  Julian A. Haffner