The Department of Transportation (“DOT”) has administered aspects of the Disadvantaged Business Enterprise (“DBE”) program for decades for work to be performed for state and local transportation agencies. The DBE program’s eligibility requirements are quite similar to those under the Small Business Administration’s (“SBA”) 8(a) Program. As is well known, over the past few years the 8(a) Program has undergone many changes and legal challenges, altering its application and eligibility processes, especially with respect to presumed social disadvantage. Now the DOT DBE program seems to be undergoing very similar changes regarding disadvantage requirements.

On October 3, 2025, the DOT issued an interim final rule with the aim of ensuring that the DBE and Airport Concession DBE are operated in “a nondiscriminatory fashion—in line with law and the U.S. Constitution.” The DOT states that the interim final rule will remove “race- and sex-based presumptions of social and economic disadvantage that violate the U.S. Constitution.” To understand this shift, a quick primer of the DBE program is in order.

Historically, the DBE program was very similar to the 8(a) Program administered by the SBA. It’s aims were to help individuals who were historically disadvantaged and remove barriers to contracting with the DOT for companies controlled by such individuals. It’s eligibility standards can be found here. Prior to this interim final rule, the DOT would presume that certain groups are disadvantaged, including “women, Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian-Pacific Americans, or other minorities found to be disadvantaged by the U.S. Small Business Administration (SBA).” Being disadvantaged is critical to the other elements of eligibility for the DBE program, as majority ownership and control of the business must be held by an individual found to be disadvantaged. The DBE program often results in state level contracts, but federal contracting law does come into play as the DOT administers the program and implements the overarching rules. Consequently, changes to other federal government contracting programs, such as the 8(a) Program, can affect the DBE program.

As readers of SmallGovCon will recall, the presumed disadvantage that used to be part of the 8(a) Program was a key target of litigation, eventually resulting in its removal from the 8(a) Program (see more about the 8(a) Program here). The DOT’s interim final rule appears to be very similar and influenced by the changes in the 8(a) Program, which makes sense due to the DBE’s citation to SBA social disadvantage in its eligibility standards.

The Interim Final Rule makes multiple changes to social disadvantage requirements. Early on, the rule makes it clear that it is removing “race- and sex-based presumptions of social and economic disadvantage.” The rule explains that presumptions of social disadvantage could result in
“two similarly situated small business owners [facing] different standards for entering the program, based solely on their race, ethnicity, or sex.” In September of 2024, similar to the 8(a) Program, there was litigation regarding this presumption (Mid-America Milling Co. v. U.S. Dep’t of Transp., No. 3:23–cv–00072, 2024 WL 4267183 (Sept. 23, 2024)), and in that case the court found that such presumptions were not allowed. This led to this interim final rule removing presumed social disadvantage. Additionally, gender is no longer emphasized, as the word “gender” will now be replaced with the word “sex.”

Due to this interim final rule, all applicants to the DBE program will now have to submit “individualized evidence of social disadvantage, alongside the remaining required showing of economic disadvantage.” Also, to “ensure a level playing field” between participants and new applicants, the final rule “requires each Unified Certification Program (UCP) [at the state level] to reevaluate any currently certified DBE or ACDBE, to recertify any DBE or ACDBE that meets the new certification standards, and to decertify any DBE or ACDBE that does not meet the new certification standards.” So, similar to the 8(a) Program after the Ultima decision, all current participants and applicants will eventually need to submit new individualized disadvantage narratives and their eligibility will be scrutinized.

What DOT is looking for in these narratives is not as clear as the SBA’s current guidance for its social disadvantage narratives, but it will likely be very similar. Participants in the DBE program (including Airport Concession DBE) should now expect scrutiny of their eligibility and a request to submit narratives as well as evidence of disadvantage. When this occurred in the 8(a) Program, the SBA seemed to prioritize current contract holders over applicants, to help prevent interruptions in performance. Likely, a similar approach will be taken when implementing these changes to the DBE program. Contractors should prepare for this possibility. This final rule will allow comments to be submitted on or before November 3, 2025. So, any contractors impacted by this final rule should submit comments so their voices are heard. However, the rule is already in effect as of October 3, 2025. Contractors should also stay in contact with their federal contracting law counsel and advisers throughout the process.

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