U.S. Department of Transportation | Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) Programs | 49 CFR Parts 23 and 26 | Final Rule effective September 25, 2026 (91 FR 60885)
On September 25, 2026, the U.S. Department of Transportation (DOT) published a final rule revising the DBE and ACDBE program regulations at 49 CFR Parts 23 and 26 (91 FR 60885). The final rule adopts, with limited clarifications, the October 3, 2025 interim final rule (IFR) (90 FR 47969) and responds to 637 public comments. It replaces the programs’ race- and sex-based presumptions of disadvantage with individualized proof, sets firm-reevaluation deadlines, and continues a transition-period suspension of DBE/ACDBE goals and counting.
What you need to know
- Presumptions are gone. Membership in a racial, ethnic, or sex group no longer establishes social and economic disadvantage. Every owner must prove disadvantage individually (49 CFR 26.67).
- New proof: a personal narrative (PN) plus a personal net worth (PNW) statement. Currently certified firms must submit both to remain certified.
- Reevaluation deadline: December 24, 2026. Unified Certification Programs (UCPs) must finish reevaluating all currently certified firms by then, subject to one 90-day extension (49 CFR 26.111, 23.81). Goals and counting are paused until each UCP completes reevaluation (49 CFR 26.51(h), 26.55(i)).
- Firm submission deadline: 90 days after the UCP completion deadline. Firms that miss it are automatically disqualified, without a hearing.
- Program otherwise unchanged—the disadvantage requirement itself, the personal-net-worth cap, size standards, ownership and control rules, and the certification application all remain.
What changed: from group presumptions to individualized proof
Under the prior program, DOT presumed that members of specified groups—including Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and women—were socially and economically disadvantaged. The final rule eliminates that presumption. The revised definition of “socially and economically disadvantaged individual” now states that a disadvantage determination “must not be based in whole or in part on a presumption based on race or sex” (49 CFR 23.3, 26.5).
In its place, revised 49 CFR 26.67 (“Non-presumptive disadvantage”) requires every applicable owner to establish disadvantage “by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, social barriers, or denied opportunities” through two submissions—a personal narrative (PN) and personal net worth (PNW) statement.
The final rule made several clarifications to the IFR in response to comments:
- “Similarly situated” became “non-disadvantaged individuals with comparable qualifications.” Responding to comments that the original comparator was impossible to satisfy without a competitor’s private financial data, DOT clarified that the comparison turns on professional credentials and work history, not financial outcomes (60891).
- “Systemic barriers” became “social barriers” in 49 CFR 26.67(a)(1). “Systemic” connotes group-wide or structural discrimination—the very kind of generalized, group-based showing the rule now forbids. “Social barriers” refocuses the inquiry on impediments the individual owner personally encountered, keeping the regulatory text, in DOT’s words, “consistent with the specific, individual experiences required in a [Personal Narrative].” (60891).
- “Economic disadvantage in fact” was reinstated as a standalone requirement (49 CFR 26.67(b)). A certifier may find an owner not economically disadvantaged “in fact” even when the owner’s personal net worth falls below the cap (60892).
What a Personal Narrative must actually show. Under revised § 26.67, the owner must establish disadvantage by a preponderance of the evidence, identify at least one “objective distinguishing feature” that prompted the hardship, and connect it to actual economic harm—describing, in DOT’s guidance, the “who, what, where, why, when, and how”—drawing on specific instances across education, employment, and business history. An owner need not have filed a formal complaint or corroborate every incident, but a generalized or conclusory assertion—”minority-owned firms historically face barriers to capital,” for example—will not suffice. Owners may describe experiences tied to race or sex as individualized facts; what is prohibited is reliance on a group-based presumption. Personal Narratives and PNW statements are confidential and are not released to competitors or the public (49 CFR 26.109(a)(2)).
What did not change
The final rule modifies how disadvantage is proven, not the surrounding eligibility structure. DOT states that the rule “preserves the statutory goal of assisting socially and economically disadvantaged individuals” (60887). The Uniform Certification Application under 49 CFR 26.83 is still used; the personal-net-worth cap ($2,047,000, 49 CFR 26.68), size standards, ownership and control rules, and certification anniversaries remain unchanged.
Key deadlines and mechanics
- UCP completion — December 24, 2026. Each UCP must complete reevaluation of currently certified DBEs and ACDBEs by this date (49 CFR 26.111(c), 23.81(c)). A one-time 90-day extension may be granted for good cause if requested in advance.
- Firm submission — March 24, 2027. A firm that has not submitted its PN and PNW statement by the time its UCP completes reevaluation receives a written notice of nonresponse and has until March 24, 2027 to submit (or 90 days after the UCP’s extended deadline, if one is granted). DOT describes this window as a grace period (60894).
- What happens to non-responsive firms. A firm that fails to submit by the applicable deadline is “automatically disqualified by the UCP without further administrative proceedings” (49 CFR 26.111(d), 23.81(d)).
Practical impact and the transition-period pause
- Goals and counting are suspended. From October 3, 2025 until a UCP completes reevaluation, a recipient in that jurisdiction may not set DBE contract goals (49 CFR 26.51(h)) or count DBE participation toward goals (49 CFR 26.55(i)). DOT states that contract goals set before October 3, 2025 “are legally unenforceable,” and recipients cannot require contractors to make good-faith efforts to cure a goal shortfall (Final Rule FAQs).
- Existing contracts and concession agreements. Existing contracts and concession agreements are not required to be modified. Recognizing the long duration of concession leases, DOT advises airport sponsors to work with concessionaires in good faith through the reevaluation period, while noting that participation by disqualified ACDBEs cannot be counted toward future goals (60896).
- New applications continue. UCPs may not pause or refuse Uniform Certification Applications during the reevaluation period; new firms are processed under the individualized standard (60895).
Early state data: Pennsylvania’s numbers, and a broader pattern
As a case study, Pennsylvania provides a clear official accounting. The Pennsylvania Unified Certification Program completed its reevaluation and notified U.S. DOT on September 1, 2026. Of 1,408 firms certified as of October 2, 2025, 478 were reevaluated and retained, while 763 were delisted as non-responsive or incomplete, 156 withdrew, and 11 were decertified—a decrease PennDOT reported as 66% in “available DBE firms.” Notably, only 11 of the roughly 930 firms removed were decertified on the merits; the rest reflect non-response or voluntary withdrawal (PennDOT DBE Program Update, Sept. 14, 2026).
Reporting from other states, including California, Minnesota, and Arizona, indicates comparable reductions following reevaluation, suggesting Pennsylvania is part of a broader pattern rather than an outlier. These reductions may prove temporary: the losses are driven largely by non-response, and states have reopened certification—California, for example, projects that its certified directory will nearly triple over the coming goal period (Caltrans DBE Overall Goal and Methodology FAQ, Sept. 16, 2026).
A consideration for the road ahead: confidential, not privileged
One feature of the new regime is worth watching—the personal narrative is confidential, but it is not privileged, so it may be reachable in later litigation where an owner’s written account of his or her own experiences is relevant. A narrative inconsistent with a later litigation position, or with the owner’s tax or financial filings, could be used for impeachment and could raise program-integrity questions (49 CFR 26.107). It remains to be seen what role these narratives will play in future litigation.
Open questions to watch
DOT declined to mandate a PN or PNW template but said it may issue guidance materials; DOT will also issue further reporting instructions once counting resumes. On the litigation front, the interim rule drew APA challenges for bypassing notice-and-comment—see Chicago Transit Authority v. U.S. Department of Transportation (N.D. Ill. 2026)—but by completing notice-and-comment and issuing this final rule, DOT has likely mooted those procedural challenges, leaving substantive and constitutional challenges to be aimed at the final rule.
What to do now
- Certified DBE/ACDBE firms: submit a personal narrative and current PNW statement to your home-state UCP well before the deadline; confirm you still meet the PNW cap, size, ownership, and control standards; and treat the narrative as a considered legal submission that an adversary may one day read.
- Prime contractors and concessionaires: do not drop currently certified partners during the pause; verify each partner’s status against the reevaluated UCP directory rather than assuming pre-October 2025 status holds; and track which UCPs have completed reevaluation, since counting resumes only then.
- Airport sponsors and other recipients: coordinate with your UCP on the December 24, 2026 timeline; do not set or count goals until reevaluation is complete; and consider DBE-neutral measures in the interim.
How we can help
We advise DOT-funded contractors, concessionaires, airport sponsors, and certified DBE and ACDBE firms on federal contracting compliance. We can help prepare and review Personal Narratives and Personal Net Worth statements, manage reevaluation and interstate-certification logistics, assess the treatment of existing contracts and concession agreements during the goals pause, respond to disqualification notices and appeals, and design DBE-neutral small business participation strategies. Please contact us to discuss how the final rule affects your certification, your projects, or your program.
