New rule that restructures DBE/ACDBE programs effective as of October 3, 2025

The new rule announced by the USDOT regarding changes to all new and existing DBE/ACDBE certifications was published on Friday, October 3 – making the new rules effective immediately.

The new rule fundamentally restructures the DBE and ACDBE programs, removing all race- and sex-based presumptions and requiring individualized determinations for program eligibility. It also imposes a mandatory re-evaluation of all currently certified firms and suspends certain program operations until this process is complete. The changes are immediate and comprehensive, affecting definitions, reporting, certification, and program administration.

The following guidance highlights the major changes from the existing rule to the new one.

Removal of Race- and Sex-Based Presumptions

• Prior Rule: Certain racial and ethnic groups and women were presumed to be socially and economically disadvantaged for purposes of DBE/ACDBE program eligibility.
• New Rule: All applicants must make an individualized showing of social and economic disadvantage, regardless of race or sex. The presumption based on race or sex is eliminated.

Re-evaluation and Re-certification Requirement

• Prior Rule: Existing DBEs/ACDBEs retained certification.
• New Rule: All currently certified DBEs/ACDBEs must be reevaluated and recertified under the new individualized standards. Those who do not meet the new standards or fail to provide required information will be decertified.

Changes to Definitions

• Prior Rule: Definitions of “socially and economically disadvantaged individual” included race- and sex-based presumptions.
• New Rule: The definition is revised to require a case-by-case determination, explicitly prohibiting reliance on race or sex.

Changes to Recordkeeping and Reporting

• Prior Rule: Recipients were required to collect and report data on the race and sex of owners of firms bidding on contracts.
• New Rule: Requirements to collect and report race and sex data are eliminated. Reporting is now focused on individualized determinations of disadvantages.

Changes to Goal Setting and Counting Participation

• Prior Rule: Recipients could set group-specific goals and count participation based on race- or sex-based certification.
• New Rule: Suspension of Goal Setting During Reevaluation. Recipients may not set contract goals or count DBE/ACDBE participation toward goals.   

Action Steps now

Decide whether you want to comment on the New Interim Rule. Comments are open until Nov. 3, 2025.

All current DBE/ACDBE firms should begin preparing a current PNW statement and PN statement in accordance with the new criteria and gather all supporting documentation, as this will directly impact your continued eligibility as a DBE/ACDBE firm. Following all criteria and providing requested information is critical.

Consult with your legal professionals, accountants, and others knowledgeable about the DBE program is essential to navigate these changes successfully and ensure compliance and continued eligibility.

For more information, please contact Michelle F. Kantor, Chair Government Contracting Group.