By Gavin Fox, CPA, CCIFP, Director of Construction Services at Blue & Co.

Effective October 3, 2025, the U.S. Department of Transportation (DOT) released an Interim Final Rule (IFR) that significantly changes the Disadvantaged Business Enterprise (DBE) and Airport Concession DBE (ACDBE) programs. This IFR will impact all currently certified DBE/ACDBEs as well as future applicants.

What Changed? 

The new IFR eliminates the default presumption of disadvantage based on race, ethnicity, and gender. What this means: All DBE/ACDBE applicants, including those currently certified, must individually prove they are both socially and economically disadvantaged to qualify for DBE/ACDBE certification.

Why the Change? 

The IFR responds to recent federal court cases and executive orders that challenge the constitutionality of presuming social and economic disadvantages based on race, ethnicity, and gender.

What Do You Need to Do? 

All businesses currently certified as DBE/ACDBE must complete recertification under the new standards through the Unified Certification Program (UCP). Recertification generally includes, but is not limited to:

• Submitting a Personal Narrative (PN) that explains and substantiates social and economic disadvantage based on the applicant’s own experiences and circumstances that occurred within American society, without regard to race or sex.
• Providing documentation to prove the applicant’s economic disadvantage and resulting harm, including a Personal Net Worth (PNW) statement and any other relevant information.

What Happens Next? 

Under the IFR, UCPs are required to complete recertifications as quickly as possible. The PN will be critical in the certification/recertification process and should:

• Detail specific experiences of discrimination in education, employment, or business.
• Identify at least one “objective distinguishing feature” (“ODF”), a background or condition that caused the disadvantage.
• Explain the nature and extent of harm and demonstrate actual economic disadvantage compared to similarly situated, non-disadvantaged individuals.

The PN must provide proof (the IFR states “by a preponderance of evidence”) that the applicant is socially and economically disadvantaged – the burden of proof lies with the applicant.

Applications for certification or recertification will be reviewed on a case-by-case basis. Businesses that elect not to recertify or no longer meet the criteria under the IFR will be decertified.

Additionally, the DOT is pausing DBE goals on federally funded projects until the recertifications are complete.

Moving Forward Under the New Rules

If your business was previously certified as a DBE/ACDBE and you plan to pursue recertification, now is the time to act. The Personal Narrative will become the centerpiece of the application, and the burden of proof is on the applicant to factually demonstrate social and economic disadvantages.

To raise the stakes further, the IFR tightens the decertification process and eliminates the appeals process. As you can imagine, this process will take time for both applicants and the UCPs conducting the recertifications.

We expect the UCPs will need time to receive guidance from the DOT, develop timelines and processes for recertification, and ensure compliance with the IFR. Therefore, it is essential to maintain open communication with your UCP for updates.

This IFR represents a significant shift in the DBE/ACDBE program. If you need assistance evaluating the new rules and/or preparing for recertification, reach out to your local Blue & Co. advisor, we are here to help!  Regardless of which path you ultimately take, let us help you stay competitive!