USDOT Eliminates Sex and Race Presumptions Triggering Re-Evaluation and Mandatory Action for WBE and MBE Companies

By: Francesca M. Schiavone, Esq. and Michaela Kluska, Esq.

On October 3, 2025, the USDOT issued an Interim Final Rule (“IFR”) that fundamentally changed eligibility for the Disadvantaged Business Enterprise (“DBE”) and Airport Concession DBE (“ACDBE”) programs on USDOT-assisted (federally funded) projects.

If your company is DBE/ACDBE-certified through a state Unified Certification Program (“UCP”) and such certification relied upon woman-owned (“WBE”) and/or minority-owned (“MBE”) status, immediate action may be required.

What Changed

The IFR eliminated the long-standing rebuttable presumption that women and certain minority groups are socially and economically disadvantaged. Under the new framework, all applicants and currently certified companies must undergo a reevaluation in which each qualifying owner must affirmatively demonstrate social and economic disadvantage through individualized evidence, and the determination cannot be based in whole or in part on race or sex.

As a result, UCPs will reevaluate existing DBE/ACDBE certifications, and firms that cannot meet the new standard face a meaningful risk of decertification.

Previously, majority owner(s) who were not women and/or minorities could apply for DBE/ACDBE status by providing a personal narrative demonstrating experienced circumstances of social disadvantage. With the removal of sex and race-based presumptions, all companies will have to adhere to the same personal narrative standards.

Immediate Impact on WBE and MBE Entities

  • Heightened Scrutiny: UCPs may initiate decertification if current files lack sufficient individualized proof. Loss of certification can affect eligibility on ongoing and future USDOT-assisted contracts and concession opportunities.
  • Suspension of Goals: Until a firm is recertified, recipients generally cannot count that firm’s participation toward DBE/ACDBE goals on USDOT-assisted projects. Many state agencies, such as PennDOT and ODOT, have temporarily paused setting new DBE goals entirely while they reevaluate the thousands of firms in their systems.

What Clients Should Do Now

  1. Confirm Re-Evaluation Deadlines. UCPs are setting individual deadlines; missing one may result in summary decertification. Note: Pennsylvania’s deadline is February 5, 2026.
  2. Draft Personal Narrative. Companies must take the affirmative action of drafting a fact-specific, internally consistent personal narrative focused on individual circumstances social and economic disadvantage, without reference to sex and/or race.
  3. Update Financials. Prepare required personal net worth statement and ensure consistency with prior submissions.
  4. Review Contracts. For USDOT-assisted work with DBE/ACDBE goals, confirm how the IFR affects goal credit and plan for contingencies if a subcontractor’s status changes.

What This Does Not Affect

Importantly, this IFR is limited to USDOT DBE/ACDBE programs on USDOT-assisted projects administered through UCPs. Private-sector WBENC certifications or the SBA’s WOSB/EDWOSB programs are not currently impacted, though clients should remain vigilant for potential ripple effects in those programs.

Leech Tishman has extensive experience assisting women‑ and minority‑owned businesses with obtaining and maintaining WBE, MBE, and related certifications. Our team is prepared to guide clients through the reevaluation and recertification process required under the USDOT’s new Interim Final Rule. For assistance or additional information, please contact Francesca Schiavone at fschiavone@leechtishman.com or Michaela Kluska at mkluska@leechtishman.com, attorneys in Leech Tishman’s Corporate Practice Group.