On September 25, 2026, the U.S. Department of Transportation published its final rule amending the regulations governing the Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) programs (49 CFR Parts 23 and 26; FR Doc. 2026-19688). This rule, which is effective immediately, finalizes the Interim Final Rule (IFR) that took effect on October 3, 2025, and represents a significant shift in how disadvantage is evaluated for program eligibility. If you’re unfamiliar with the IFR, please refer to my many prior blogs on the subject.
The Final Rule made some tweaks and put the IFR’s provisions into final form. This blog will summarize some of the more important changes.
1. You Can Rely on Specific Instances of Discrimination Based on Race or Sex
During the recertification process, many DBEs were told by certifying agencies that they were not permitted to reference race or sex at all in their personal narrative – even when expressing specific instances that they had faced. Several clients had personal narratives returned for even stating that they were a woman.
The Final Rule clarifies that applicants for recertification can use specific instances of discrimination based on race and sex that they individually faced. The individual cannot rely on an assumption that they are disadvantaged because of their race or sex. To give an example, if you were told that you’d never be promoted at your job because women should stay home and raise kids, you could use that experience to support a claim for disadvantage.
2. Changing Wording re: “Similarly Situated Non-Disadvantaged Individuals”
Another point of difficulty many found with the IFR was that an individual had to establish economic disadvantage “relative to similarly situated non-disadvantaged individuals.” This received a lot of pushback–how can you compare yourself to someone else whose personal financial information you don’t know? The department is replacing this term with “non-disadvantaged individuals with comparable qualifications.” The USDOT comments that this “clarifies that the evidentiary standard focuses on comparing the owner’s professional credentials and work history . . . rather than current financial outcomes.”
3. Economic Disadvantage in Fact
Economic disadvantage was another big topic of discussion in the preamble to the Final Rule. Apparently, there were many comments received about the lack of a safeguard to prevent individuals from qualifying as economically disadvantaged if they manipulated their assets to fall below the PNW limit. The Final Rule provides a process by which a certifier who has a reasonable basis can determine that an owner who submits a PNW statement below the current PNW cap is not actually economically disadvantaged. This process provides that all assets can be included in this evaluation. Things that could be considered include an excessively high income, living in a very expensive house, a high-value retirement account, etc. There’s no explanation of how this should be squared with the regulation’s exceptions (such as excluding retirement accounts).
4. Alaska Native Corporations, Indian Tribe–Owned Companies, and Native Hawaiian Organizations Exempt from Personal Narrative
To be consistent with the SBA’s treatment of Alaska Native Corporations (ANCs), Indian Tribes, and Native Hawaiian Organizations (NHOs), firms owned by ANCs, Indian Tribes, and NHOs are exempt from the personal narrative requirement and do not have to make an individualized showing of disadvantage, but they must meet all other requirements (including the personal net worth limits). However, individuals who are Native American, Native Hawaiian, or Alaska Native do have to make the individualized showing in a personal narrative.
5. Privacy
The USDOT reaffirmed that certifiers are required to protect the applicant’s personal and financial information and may not release anything that may reasonably be construed as confidential business information without the submitter’s written consent. This explicitly includes certification applications, including supporting information in personal narratives, as confidential protected information. This reaffirmation should come as a relief to many who were concerned about its release.
6. Deadline for UCPs to Complete Recertification Process
Many states have been dragging their feet on the recertification process, with a few still not even accepting reevaluation materials. The Final Rule puts in place a deadline of December 24, 2026 for UCPs to complete their reevaluations. The USDOT may grant a one-time three-month extension for special circumstances if requested in advance by the certifying agency.
7. Deadline for DBEs/ACDBEs to Submit Reevaluation Materials
UCPs must also issue a final written notice of nonresponse to any DBE or ACDBE that doesn’t submit its documentation by March 24, 2027. Those firms will be given a final 90-day grace period to comply. If they do not, they will be disqualified.
8. Disqualified, Not Decertified
The USDOT also clarified that if a firm cannot meet the new standards of personal disadvantage, it will be considered disqualified, not decertified. Because of this change in terminology, the USDOT claims that the burden of proof and administrative due process provisions associated with decertification do not apply. This seems like a distinction without a difference that may be ripe for legal challenge–especially in states where the state constitution also has due process requirements.
9. UCPs Must Give Reasoning for Disqualification
The USDOT did clarify that the UCPs must follow the due process protections outlined in Rule 26.86(a) for disqualification decisions–any resulting disqualification of a DBE must include in the letter the specific details for the reason for the decision and include the verbatim appeal instructions. This is a change: under the IFR, no reason needed to be given. This new required explanation is a step in the right direction but still may not be enough.
10. Interstate Certification Clarifications
A lot of my clients have been experiencing issues with interstate certification once they are recertified in their home state. The USDOT clarified that once the home state/JOC reevaluates a firm, other states should automatically accept that decision upon simple notification–such as a copy of the recertification letter or a screenshot of the home state’s directory.
The USDOT has said explicitly that NO FURTHER REQUIREMENTS MAY BE IMPOSED BY UCPs. This is an issue many of my clients have been facing. Different UCPs are demanding copies of personal narratives and PNWs for interstate certification–this is not permitted.
A firm must seek to reaffirm its interstate certification in another state within one year of the date it was reevaluated by its JOC. Otherwise, it must go through the normal interstate process (which is minimally burdensome).
11. New Applications for DBE/ACDBE Certification Must Be Accepted
During the reevaluation process, most UCPs refused to process new applications for DBE/ACDBE certification. The Final Rule provides that this is not permissible, and that all UCPs must accept new applications.
12. Special Issues Faced By ACDBEs
The preamble to the Final Rule acknowledges the special issues that ACDBEs face with the long-term nature of concession leases. It provides that existing concession agreements are not required to be modified by the IFR. However, participation by ACDBEs that are disqualified cannot be counted toward future ACDBE goals. The USDOT instructs airport sponsors to work with concessionaires and try to avoid penalizing firms for regulatory changes outside of their control (provided they act in good faith).
Are you a DBE or ACDBE, or interested in becoming one? Do you need help with the recertification or application process? Please reach out to Danielle Dietrich, Esq. at ddietrich@potomaclaw.com or 412-449-9141 to discuss how she can help with your situation.
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