US DOT Finalizes DBE Program Rules

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by LICA-National

On September 25, 2026, the U.S. Department of Transportation (U.S. DOT) issued a rule finalizing revisions to its Disadvantaged Business Enterprise (DBE) program. The program has been operating for the past year under the terms of an "interim final rule" put in place October 2025.

That rule removed the presumption that certain individuals are socially and economically "disadvantaged" based on a small business owner's gender or race and therefore eligible for the DBE program. The program has been suspended while each state initiated a "reevaluation process," inviting previously certified DBE firms to apply for a new certification by submitting a "personal narrative." The narrative is required to demonstrate that a business owner is disadvantaged based on facts not related to gender or race. Some states have raised concerns about a lack of objective factors to make this determination.

The final rule details what elements should be included in a state's evaluation as follows:

  • The personal narrative "must identify at least one objective basis for the owner's disadvantaged status. The basis may be any identifiable status or condition. The [narrative] must describe this objective distinguishing feature (ODF) in sufficient detail to justify the owner's conclusion that it prompted economic hardship, social barriers, or denied opportunities that the owner experienced."
  • The certifying agency "may conclude that a reasonable person would not consider the owner economically disadvantaged in fact (EDIF) compared to non-disadvantaged individuals with comparable qualifications."
  • The agency conducting these reevaluations must complete them no later than Dec. 24. U.S. DOT may grant a one-time extension of up to 90 days to finish this process. A state may then apply to reinstitute its DBE program, while working on revised goals.
  • Previous DBE firms who have not yet applied for recertification have until March 24, 2027 (or 90 days after their state's extension, if applicable), to do so, or will be considered ineligible for the program.