The USDOT’s DBE/ACDBE Program Interim Final Rule: Trying to E-race What Cannot be Erased

By: Hanna Rowell and Morgan Wilson, Esq.

On October 3, 2025, the United States Department of Transportation (“USDOT” or “DOT”) issued an Interim Final Rule (“IFR”) regarding modifications to the Disadvantaged Business Enterprise (“DBE”) and Airport Concessions Disadvantaged Business Enterprise (“ACDBE”) programs. Griffin & Strong is a firm on the forefront of non-discrimination and procurement research. Our team has conducted a detailed review of the IFR and collaborated to put together the information in this article.

The major modification that the IFR makes is removing the Congressional mandate of race- and sex-based presumptions of social and economic disadvantage from DOT program eligibility. In other words, women and minority race/ethnic groups are no longer presumed to be disadvantaged by the DOT and instead must now prove disadvantage to qualify as a DBE or ACDBE during the recertification process. This change triggers other modifications such as:

·       Replacing existing terms of “race-neutral” and “race-conscious” with “DBE-neutral” and “DBE-conscious.”

·       Requiring the recertification of all currently certified DBE and ACDBE firms, which means new applications now must include individualized proof of social or economic disadvantage in a personal narrative that cannot be “based in whole or in part on race or sex.” As discussed in further detail below, this is a meaningful example of the USDOT attempting to push the boundaries of what the Supreme Court has previously ruled, which remains good law.

·       Requiring each Unified Certification Program (UCP), which are the state certifying agencies, to reevaluate all currently certified DBE and ACDBE businesses according to the new personal narrative requirements to determine if a firm is eligible for recertification under the new DOT terms, i.e., non-presumptive disadvantage.

Legal Foundation of Quicksand Instead of Concrete

Griffin & Strong notes that the sum of the IFR modifications exist on a shaky foundation of district court cases, executive orders, and a singular Supreme Court ruling applicable only to diversity efforts in college admissions (“Students for Fair Admissions” or “SFFA”). The IFR misapplies good law and serves as a distraction and scare tactic meant to create a chilling effect with a reach more ambitious than its legal scope.

District courts are trial-level courts whose rulings are typically limited to their district. Even if these cases were to be applied on a national level, the specific district court cases the IFR relies upon (Ultima, Mid-America Milling, and Nuziard) would need to be complete. Instead, the cases cited in the IFR to substantiate its modifications are in preliminary stages with no final rulings yet issued. Regardless of the interpretation of the district court cases themselves, these two facts alone prevent them from supporting the reach of the IFR. The presidential executive orders completely and purposefully disregard the distinction between programs and governmental action focused on “diversity” and actions focused on combating the present effects of past discrimination. Despite the Department’s attempt to group the two together, remedying present and past discrimination is still recognized as an acceptable governmental interest. Notably, this is reiterated in the Students for Fair Admissions Supreme Court ruling.

Intentional Mischaracterization and Overreach

The DOT IFR was drafted by or under the supervision of numerous knowledgeable governmental officials (many with law degrees) which makes the mischaracterization much more concerning. This infirmity demonstrates that the federal government cannot unequivocally prove the unconstitutionality of DBE and ACDBE programs. As a workaround, DOT is attempting to redefine what a DBE/ACDBE can be by conflating the indefensibility of the presumption of race or sex as disadvantage with using race or sex as evidence of disadvantage in your personal narrative. The practical effect of this is that the burden of proof to establish a firm’s disadvantaged status is shifted onto the individual business owners themselves despite the legal overreach.

While Griffin & Strong acknowledges that the USDOT does have the authority to modify certain elements of the DBE/ACDBE programs (i.e., removing presumptions of race/sex), they do not retain the authority to determine or direct what a personal narrative of disadvantage faced by individual business owners can or cannot be. These two modifications are distinct from one another and therefore do not retain the same backing by the Supreme Court case law that the IFR cites:

·       Removing race- and sex-based presumptions of social and economic disadvantage from DOT program eligibility

• Supported by the SFFA Supreme Court ruling.

·       Not allowing race and sex related evidence of social and economic disadvantage to be shared as individualized proof in their personal narrative statement

• NOT supported by the SFFA Supreme Court ruling. In fact, in SFFA the Supreme Court stated individuals can cite their race and sex as part of a personal narrative statement.

There is a meaningful difference between these two modifications. Beyond economic disadvantage, the IFR does not clarify what sort of disadvantage can be relied upon in a personal narrative. Without clarity, it is up to the individual certifying agencies to determine their own criteria for reviewing personal narrative statements.

What Now? And How G&S Can Assist

The bottom line for certifying agencies and individual business owners is not to abandon your DBE/ACDBE or M/WBE programs in response to this IFR. The federal government is counting on a sweeping chilling effect on race- and gender- conscious programing so that they can achieve their ends of eradicating the effects of the civil rights gains of years past.

 Remember, you are not under attack if you are following the right standards. Do you need to get rid of your program? No, but the IFR does require that goal setting be based on a current disparity study that has been conducted based on the new definitions of DBE and ACDBE to provide legal foundation for a program. Previous studies employing the prior definition of DBE/ACDBEs where race and/or gender were used as a presumption of disadvantage are no longer usable for goal setting. Additionally, although not new to most disparity study methodology, the clarified disparity study expectations of the IFR require that newly conducted disparity studies include a “detailed capacity analyses, which may necessitate additional economic modeling, data collection, and expert analysis beyond what is standard practice in many jurisdictions,” and outline the methodology used for such analysis if the study is going to be used for goal-setting purposes. Disparity studies take approximately one year to complete. Therefore, G&S encourages agencies to get the disparity study solicitation process started while in the process of conducting DBE/ACDBE recertification rather than waiting until firms have recertified to start the Study, which would ultimately cause further delays to reestablish goal setting.

Keep in mind that the IFR only impacts projects and contracts funded in whole or in part by the USDOT and is applicable to DBE/ACDBEs and programs only. Therefore, M/WBE programs remain lawful with an unexpired disparity study and should not be shuttered. Additionally, the IFR states that agencies are no longer required to track race and sex data, but that does not mean that they cannot continue doing so. Maintaining your data collection means that future disparity studies can be based on recent and accurate data. Do you need to recertify? Yes, every DBE and ACDBE certified firm is going to be prompted by certifying agencies to go through reevaluation in accordance with the new eligibility requirements, specifically focusing on the personal narrative portion.

Due to meaningful missteps in this IFR that make certain parts of it inapplicable, there are avenues to maintain your program and to craft a personal narrative that is representative of your experiences as an individual and business owner. Griffin & Strong is dedicated to helping governments and individuals navigate this volatile legal landscape.

Please contact Griffin & Strong (dylan@gspclaw.com) or fill out our meeting request form to discuss how to keep your program in compliance and legally defensible with a robust disparity study or if you require assistance preparing your personal narrative. For more information regarding Griffin & Strong’s assessment of the IFR, you can view our public comment submission to USDOT.