[Federal Register Volume 90, Number 190 (Friday, October 3, 2025)]
[Rules and Regulations]
[Pages 47969-47982]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2025-19460]
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DEPARTMENT OF TRANSPORTATION
Office of the Secretary of Transportation
49 CFR Parts 23 and 26
[Docket No. DOT-OST-2025-0897]
RIN 2105-AF33
Disadvantaged Business Enterprise Program and Disadvantaged
Business Enterprise in Airport Concessions Program Implementation
Modifications
AGENCY: Office of the Secretary of Transportation (OST), U.S.
Department of Transportation (DOT).
ACTION: Interim final rule.
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SUMMARY: This interim final rule (IFR) ensures that the U.S. Department
of Transportation (DOT or Department) operates its Disadvantaged
Business Enterprise (DBE) and Airport Concession Disadvantaged Business
Enterprise (ACDBE) Programs (collectively, Programs) in a
nondiscriminatory fashion--in line with law and the U.S. Constitution.
The IFR removes race- and sex-based presumptions of social and economic
disadvantage that violate the U.S. Constitution.
DATES: This IFR is effective October 3, 2025. Comments must be received
on or before November 3, 2025. To the extent practicable, DOT will
consider late-filed comments.
ADDRESSES: You may submit comments identified by the docket number DOT-
OST-2025-0897 by any of the following methods:
Federal Rulemaking Portal: http://www.regulations.gov.
Follow the online instructions for submitting comments.
Mail: U.S. Department of Transportation, Docket
Operations, M-30, West Building Ground Floor, Room W12-140, 1200 New
Jersey Avenue SE, Washington, DC 20590.
Hand Delivery: U.S. Department of Transportation, Docket
Operations, West Building Ground Floor, Room W12-140, 1200 New Jersey
Avenue SE, Washington, DC 20590, between 9 a.m. and 5 p.m., Monday
through Friday, except Federal holidays.
Instructions: All submissions must include the agency name, docket
name, and docket number DOT-OST-2025-0897 or Regulatory Identifier
Number
[[Page 47970]]
(RIN) 2105-AF33 for this rulemaking. DOT solicits comments from the
public to inform its rulemaking process. DOT posts these comments,
without edit, including any personal information the commenter
provides, to www.regulations.gov, as described in the system of records
notice (DOT/ALL-14 FDMS), which can be reviewed at www.dot.gov/privacy.
Docket: For access to the docket to read background documents or
comments received, go to http://www.regulations.gov at any time or to
U.S. Department of Transportation, Docket Operations, M-30, West
Building Ground Floor, Room W12-140, 1200 New Jersey Avenue SE,
Washington, DC 20950, between 9 a.m. and 5 p.m., Monday through Friday,
except Federal holidays.
Confidential Business Information: Confidential Business
Information (CBI) is commercial or financial information that is both
customarily and actually treated as private by its owner. Under the
Freedom of Information Act (FOIA; 5 U.S.C. 552), CBI is exempt from
public disclosure. If your comments responsive to this IFR contain
commercial or financial information that is customarily treated as
private, that you actually treat as private, and that is relevant or
responsive to this IFR, it is important that you clearly designate the
submitted comments as CBI. Please mark each page of your submission
containing CBI as ``PROPIN.'' Submissions containing CBI should be sent
to the individual listed in the For Further Information Contact section
below. Any commentary that OST receives that is not specifically
designated as CBI will be placed in the public docket for this
rulemaking.
Electronic Access and Filing
A copy of the IFR, all comments received, and all background
material may be viewed online at http://www.regulations.gov. Electronic
retrieval help and guidelines are available on the website. It is
available 24 hours each day, 365 days each year. An electronic copy of
this document may also be downloaded from the Office of the Federal
Register's website at http://www.ofr.gov and the Government Publishing
Office's website at http://www.gpo.gov.
FOR FURTHER INFORMATION CONTACT: Peter Constantine, Office of the
General Counsel, Office of the Secretary, U.S. Department of
Transportation, 1200 New Jersey Avenue SE, Washington, DC 20590 at
(202) 658-9670 or [email protected].
SUPPLEMENTARY INFORMATION:
I. Introduction
Spanning nearly 40 years, the Department's DBE and ACDBE programs
are small business initiatives intended to level the playing field for
businesses seeking to participate in federally assisted contracts and
in airport concessions. Rooted in a desire to give small businesses a
fair shake in the process, the Programs must balance a desire to help
the small business community with an overriding government obligation
to serve the public. The government must undertake all these efforts
consistent with law--including constitutional nondiscrimination
requirements that establish the conditions for national harmony and
unity. This IFR advances the administration's goals of
nondiscrimination, fairness, and excellence in serving the American
public.
Although the Programs aim to assist small businesses owned and
controlled by ``socially and economically disadvantaged individuals,''
Congress has mandated by statute that DOT treat certain individuals--
women and members of certain racial and ethnic groups--as ``presumed''
to be disadvantaged.\1\ Other individuals do not benefit from that
statutory presumption. This means that two similarly situated small
business owners may face different standards for entering the program,
based solely on their race, ethnicity, or sex.
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\1\ Congress has provided that: (1) ``women shall be presumed to
be socially and economically disadvantaged individuals''; and (2)
the term ``socially and economically disadvantaged individuals''
should otherwise be given the meaning given by section 8(d) of the
Small Business Act and its implementing regulations. See
Infrastructure Investment and Jobs Act, Public Law 117-58,
11101(e)(2) (B) (2021) (DBE program for highway and transit
funding); 49 U.S.C. 47107(e)(1) (ACDBE program); 49 U.S.C.
47113(a)(2) (DBE program for airport funding). Section 8(d) of the
Small Business Act and its implementing regulations create a
rebuttable presumption that ``Black Americans,'' ``Hispanic
Americans,'' ``Native Americans,'' ``Asian Pacific Americans,'' and
``Subcontinent Asian Americans'' are disadvantaged. See 15 U.S.C.
637(d)(3); 13 CFR 124.103(b)(1).
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On September 23, 2024, the U.S. District Court for the Eastern
District of Kentucky determined that the DBE program's statutory race-
and sex-based presumptions likely do not comply with the Constitution's
promise of equal protection under the law.\2\ The Court held that the
Government may only use a racial classification to ``further a
compelling government interest'' and may only use race in a ``narrowly
tailored fashion.'' It held that although courts have identified a
compelling government interest in ``remediating specific, identified
instance[s] of past discrimination that violated the constitution or a
statute,'' the Government did not present evidence of such
discrimination by DOT against each of the groups covered by the DBE
program's presumptions. The Court held, moreover, that the presumptions
were not narrowly tailored because Congress used an unexplained
``scattershot'' approach in identifying the covered groups, and because
the presumptions had no ``logical end point.'' The Court also held that
the sex-based presumptions failed heightened scrutiny. Accordingly, the
Court issued a preliminary injunction that prohibits DOT from mandating
the use of presumptions with respect to contracts on which the two
plaintiff entities bid. DOT has implemented the injunction by requiring
funding recipients to remove DBE contract goals from any contracts on
which the plaintiffs intend to bid.
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\2\ Mid-America Milling Co. v. U.S. Dep't of Transp., No. 3:23-
cv-00072, 2024 WL 4267183 (Sept. 23, 2024).
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On January 20, 2025, the President issued Executive Order 14151,
Ending Radical and Wasteful Government DEI Programs and Preferencing,
which affirmed that ``Americans deserve a government committed to
serving every person with equal dignity and respect'' and directed
agencies to recommend actions to align their programs and activities
with this policy. On January 21, 2025, the President issued Executive
Order 14173, Ending Illegal Discrimination and Restoring Merit-Based
Opportunity, which ordered agencies to ``terminate all discriminatory
and illegal preferences, mandates, policies, programs, activities,
guidance, regulations, enforcement actions, consent orders, and
requirements.''
On March 21, 2025, the Attorney General issued a memorandum to all
Federal agencies on implementing these Executive Orders.\3\ The
Attorney General noted that ``federal policies that give preference to
job applicants, employees, or contractors based on race or sex trigger
heightened scrutiny under the Constitution's equal protection
guarantees and can only survive in rare circumstances.'' The Attorney
General directed all Federal agencies immediately to ``[d]iscontinue
any policies that establish numerical goals, targets, or quotas based
on race or sex,'' and to ``[r]emove any contracting or
[[Page 47971]]
funding requirement or guidance that induces, requires, or encourages
private parties to adopt discriminatory practices.''
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\3\ Memorandum from the Attorney General for All Federal
Agencies, Implementation of Executive Orders 14151 and 14173;
Eliminating Unlawful DEI Programs in Federal Operations (March 21,
2025), available at https://www.justice.gov/ag/media/1409556/dl?inline.
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On February 19, 2025, the President issued Executive Order 14219,
Ensuring Lawful Governance and Implementing the President's
``Department of Government Efficiency'' Deregulatory Initiative, which
directed agencies to identify ``unconstitutional regulations and
regulations that raise serious constitutional difficulties,'' and to
target those regulations for repeal. On April 9, 2025, the President
issued a memorandum directing that this effort should prioritize
regulations that conflict with certain Supreme Court decisions,
including Students for Fair Admissions, Inc. v. Harvard (SFFA).\4\
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\4\ 600 U.S. 181 (2023).
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In accordance with the directives of the President and the Attorney
General, DOT and the U.S. Department of Justice (``DOJ'') have
evaluated the DBE and ACDBE programs. DOT and DOJ, consistent with the
ruling of the District Court, have determined that the race- and sex-
based presumptions of DOT's DBE programs are unconstitutional. In SFFA,
the Supreme Court held that race-based admissions programs at
universities violated the Equal Protection Clause of the Fourteenth
Amendment--and, by corollary, Title VI of the Civil Rights Act. In
light of SFFA, multiple Federal courts have held unlawful the use of
presumptions similar to those used in the DBE and ACDBE programs. In
Ultima Serv. Corp. v. U.S. Dep't of Ag., the Eastern District of
Tennessee held that a Small Business Act program violated the equal
protection component of the Fifth Amendment's Due Process Clause to the
extent that it used the exact same type of race-based presumptions used
by the DBE and ACDBE programs.\5\ And in Nuziard v. Minority Business
Development Agency, the Northern District of Texas held that a race-
based statutory presumption of disadvantage was unconstitutional and
that the U.S. Department of Commerce's application of this statutory
preference violated the equal protection principle of the Fifth
Amendment.\6\ As with the presumptions at issue in Ultima and Nuziard,
there is not a strong basis in evidence that the race- and sex-based
presumptions used by the DBE and ACDBE programs are necessary to
support a compelling governmental interest, and the presumptions are
not narrowly tailored. The government has no compelling justification
for engaging in overt race or sex discrimination in the awarding of
contracts in the absence of clear and individualized evidence that the
award is needed to redress the economic effects of actual previous
discrimination suffered by the awardee. For these reasons, the
presumptions must be disregarded, and the Department's DBE and ACDBE
programs must be administered in all other respects in accordance with
the law and consistent with the U.S. Constitution.
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\5\ Ultima Servs. Corp. v. U.S. Dep't of Agric., 683 F. Supp. 3d
745 (E.D. Tenn. 2023).
\6\ Nuziard v. Minority Bus. Dev. Agency, 721 F. Supp. 3d 431
(N.D. Tex. 2024).
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On May 28, 2025, DOT (represented by DOJ), along with the
plaintiffs in the litigation in the U.S. District Court for the Eastern
District of Kentucky, asked the Court to enter a Consent Order
resolving a constitutional challenge to the DBE program.\7\ The motion
is currently pending. In the proposed Consent Order, DOT stipulated and
agreed that ``the DBE program's use of race- and sex-based presumptions
of social and economic disadvantage . . . violates the equal protection
component of the Due Process Clause of the Fifth Amendment of the U.S.
Constitution.'' The parties asked the Court to declare that ``the use
of DBE contract goals in a jurisdiction, where any DBE in that
jurisdiction was determined to be eligible based on a race- or sex-
based presumption, violates the equal protection component of the Due
Process Clause of the Fifth Amendment,'' and to ``hold and declare that
[DOT] may not approve any Federal, State, or local DOT-funded projects
with DBE contract goals where any DBE in that jurisdiction was
determined to be eligible based on a race- or sex-based presumption.''
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\7\ Joint Motion for Entry of Consent Order, Mid-America Milling
Co. v. U.S. Dep't of Transp., No. 3:23-cv-00072 (E.D. Ky. May 28,
2025).
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On June 25, 2025, the Solicitor General wrote to the Speaker of the
House, consistent with 28 U.S.C. 530D, to advise the Speaker that DOJ
had concluded that the DBE program's presumptions violate the U.S.
Constitution, that DOJ would no longer defend the presumptions in
court, and that DOJ had taken that position in ongoing litigation.\8\
The Solicitor General noted that DOJ ``had previously defended the DBE
program's race-and sex-based presumptions by pointing to societal
discrimination against minority-owned businesses generally.'' He
stated, however, that ``[c]onsistent with SFFA's rejection of a similar
justification in the university-admissions context, [DOJ] has
determined that an interest in remedying the effects of societal
discrimination does not justify the use of race-and sex-based
presumptions in the DBE program.'' The Solicitor General also reported
that DOJ has determined that ``like the admissions programs at issue in
SFFA, the DBE program relies on arbitrary, overbroad, and
underinclusive racial categories and lacks any logical end point.'' DOT
agrees with and adopts the Solicitor General's analysis.
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\8\ Letter from Solicitor General D. John Sauer to Hon. Mike
Johnson (June 25, 2025), https://www.justice.gov/oip/media/1404871/dl?inline.
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In light of DOT and DOJ's determination that the DBE program's
race- and sex-based presumptions are unconstitutional, DOT is issuing
this IFR to remove the presumptions from the DBE program regulations
set forth in 49 CFR part 26. Because the ACDBE presumptions are
functionally identical and suffer the same constitutional infirmity,
this IFR also removes the presumptions from the ACDBE regulations set
forth in 49 CFR part 23. To ensure a level playing field between
existing participants and new applicants, while also eliminating the
effects of the unconstitutional presumptions and reliance in whole or
in part on claims of disadvantage based on race or sex, this IFR
requires each Unified Certification Program (UCP) to reevaluate any
currently certified DBE or ACDBE, to recertify any DBE or ACDBE that
meets the new certification standards, and to decertify any DBE or
ACDBE that does not meet the new certification standards. The IFR
includes certain requirements that apply during the pendency of this
reevaluation process.
II. Revisions
Part 26
Subpart A--General
1. Objectives (Sec. 26.1)
The Department amends Sec. 26.1 to clarify the proper objectives
of the DBE program. The Department's amendments replace references to
the DBE program being ``narrowly tailored'' with an objective intended
to ensure that the DBE program operates in a nondiscriminatory manner
and without regard to race or sex, while maximizing efficiency of
service. These amendments center the DBE program's purpose of leveling
the playing field for businesses owned and controlled by socially and
economically disadvantaged individuals while providing excellent
service to the American people.
2. Definitions (Sec. 26.5)
The Department changes the definition of ``socially and
economically disadvantaged individual'' in Sec. 26.5 to
[[Page 47972]]
remove the race- and sex-based presumptions that DOT and DOJ and have
found to violate the Fifth Amendment. Under the revised rule, any
individual seeking to demonstrate that he or she is a ``socially and
economically disadvantaged individual'' will be required to make the
same individualized showing of disadvantage, regardless of the
individual's race or sex.
In furtherance of these legal conclusions, the IFR also replaces
the terms ``race-neutral'' and ``race-conscious'' in Sec. 26.5 with
``DBE-neutral'' and ``DBE-conscious'' and modifies the definitions
slightly for the same reasons.
3. Recordkeeping and Reporting (Sec. 26.11)
Similarly, the IFR eliminates the requirement in Sec.
26.11(c)(2)(iv) for recipients to obtain bidders list information about
the majority owner's race and sex for all DBEs and non-DBEs who bid as
prime contractors and subcontractors on each of a recipient's federally
assisted contracts, and then renumbers the requirements in current
Sec. Sec. 26.11(c)(v) through (c)(vii) as Sec. Sec. 26.11(c)(iv)
through (c)(vi).
The IFR also eliminates the requirement in Sec. 26.11(e)(1) that
recipients report and categorize the percentage of in-State and out-of-
State DBE certifications by sex and ethnicity. The IFR also eliminates
the requirements in Sec. Sec. 26.11(e)(5) and (6) that recipients
report the number of in-State and out-of-State applications for an
``individualized'' determination of social or economic disadvantage
status, and the number of in-State and out-of-State applicants who made
an individualized showing of social and economic disadvantaged status.
This IFR requires all applicants to demonstrate social and economic
disadvantage affirmatively to participate in the DBE program, which
renders these reporting requirements unnecessary. The IFR further
renumbers the reporting requirements in current Sec. Sec. 26.11(e)(2)
through (e)(4) as Sec. Sec. 26.11(e)(1) through (e)(3).
Subpart B--Administrative Requirements for DBE Programs for Federally
Assisted Contracting
4. Recipient Monitoring Responsibilities (Sec. 26.37)
For consistency, the IFR replaces the word ``race-neutral'' with
``DBE-neutral'' in Sec. 26.37(b).
5. Fostering Small Business Participation (Sec. 26.39)
For consistency, the IFR replaces the word ``race-neutral'' with
``DBE-neutral'' in Sec. Sec. 26.39(b)(1) and (5).
Subpart C--Goals, Good Faith Efforts, and Counting
6. Setting Goals (Sec. 26.45)
For consistency, the IFR replaces the phrase ``race-neutral DBE
program'' with ``DBE-neutral program'' in Sec. 26.45(a)(2).
For consistency, the IFR amends the second sentence of Sec.
26.45(b) to replace the word ``discrimination'' with ``social and
economic disadvantage'' so it will read as follows: ``The goal must
reflect your determination of the level of DBE participation you would
expect absent the effects of social and economic disadvantage.''
For consistency and to ensure recipients establish overall goals
that include only DBEs who are ready, willing, and able to compete for
and participate in DOT-assisted contracts, the Department amends Sec.
26.45(c)(3) to clarify that any disparity studies utilized by
recipients in setting their goals must provide a detailed capacity
analysis, including the methodology used. The Department makes the same
clarification regarding the use of disparity studies in Sec.
26.45(d)(ii).
For consistency, the IFR amends Sec. 26.45(f)(3) to remove
references to race-neutral and race-conscious measures.
The IFR amends Sec. 26.45(g)(1) to remove consultation
requirements for minority and women's contractor groups, as well as the
language related to posting proposed overall goals in minority-focused
media.
The IFR amends Sec. 26.45(h) by removing the existing language, as
there will be no opportunity to create group-specific goals now that
race and sex have been removed from the regulation. In its place, the
IFR adds new language in Sec. 26.45(h) to indicate that a recipient is
not required to update its overall goal until its UCP completes the
reevaluation process described in Sec. 26.111.
7. Failing To Meet Overall Goals (Sec. 26.47)
For consistency, the IFR replaces the words ``race-conscious'' and
``race-neutral'' with ``DBE-conscious'' and ``DBE-neutral'' in in Sec.
26.47(c)(4) and Sec. 26.47(d).
The IFR adds Sec. 26.47(e) to provide that until a Unified
Certification Program (UCP) completes the reevaluation process
described in Sec. 26.111, the compliance provisions of Sec. 26.47
will not apply to any recipient covered by that UCP. This requirement
ensures fairness to recipients during the transition period.
8. Means Used To Meet Overall Goals (Sec. 26.51)
For consistency, the IFR replaces the words ``race-conscious'' and
``race-neutral'' with ``DBE-conscious'' and ``DBE-neutral'' throughout
Sec. 26.51 and the corresponding examples.
The IFR adds Sec. 26.51(h) to provide that until a UCP completes
the reevaluation process described in Sec. 26.111, a recipient covered
by that UCP may not set any contract goals. This provision ensures that
existing DBEs do not continue to receive any benefits as a result of
their certification under the old standards.
9. Counting DBE Participation Toward Goals (Sec. 26.55)
The IFR adds Sec. 26.55(i) to provide that until a UCP completes
the reevaluation process described in Sec. 26.111, a recipient covered
by that UCP may not count any DBE participation toward DBE goals. This
provision ensures that existing DBEs do not continue to receive any
benefits as a result of their certification under the old standards.
Subpart D--Certification Standards
10. Burden of Proof (Sec. 26.61)
The IFR eliminates Sec. 26.61(b)(2), which imposed a burden of
proof on certifiers with respect to individuals subject to the race-
and sex-based presumptions that the IFR eliminates.
11. Social and Economic Disadvantage (Sec. 26.67)
The IFR revises Sec. 26.67 to implement the removal of
unconstitutional race- and sex-based presumptions. The IFR requires all
small business concerns to demonstrate social and economic disadvantage
based on their own experiences and circumstances without reliance in
whole or in part on race or sex.
Subpart F--Compliance and Enforcement
12. Reevaluation Process (Sec. 26.111)
This IFR adds Sec. 26.111 to require each UCP to reevaluate any
currently certified DBE, to recertify any DBE that meets the new
certification standards, and to decertify any DBE that does not meet
the new certification standards or fails to provide additional
information required for submission under the new certification
standards. The IFR provides that decertification procedures of 49 CFR
26.87 do not apply to any
[[Page 47973]]
decertification decisions under this process. The IFR requires each UCP
to complete the reevaluation process as quickly as practicable
following issuance of this IFR. The Department will work with each UCP
to minimize the practical impact of this rule change during the
pendency of the reevaluation process. This reevaluation process will
ensure a level playing field between existing participants and new
applicants, while also eliminating the effects of the unconstitutional
presumptions and reliance on claims of disadvantage based in whole or
in part on race or sex. This process does not replace or restrict the
Department's ability to conduct a review or take action under Title VI
or other applicable law regarding compliance with equal protection
principles. A companion provision has been added to part 23 with
respect to reevaluation of ACDBEs.
Part 23
Subpart A--General
13. Aligning Part 23 With Part 26 Objectives (Sec. 23.1)
The IFR amends the program objectives for the ACDBE program in
Sec. 23.1 that are similar to the amendments to the DBE program
objectives in Sec. 26.1.
14. Definitions (Sec. 23.3)
The IFR amends the definition of the phrase ``socially and
economically disadvantaged individual'' in Sec. 23.3 to conform to the
definition of the phrase in Sec. 26.5. In addition, the IFR replaces
the terms ``race-conscious'' and ``race-neutral'' with ``ACDBE-
conscious'' and ``ACDBE-neutral'' in Sec. 23.3.
Subpart B--ACDBE Programs
15. Measures To Ensure Nondiscrimination Participation of ACDBEs (Sec.
23.25)
For consistency, the IFR replaces the words ``race-neutral'' and
``race-conscious'' with ``DBE-neutral'' and ``DBE-conscious'' in
Sec. Sec. 23.25(d) and (e).
The IFR adds Sec. 23.25(h) to provide that until a UCP completes
the reevaluation process described in Sec. 23.81, a recipient covered
by that UCP may not set concession-specific goals or use any of the
other methods described in Sec. 23.25(e). This provision ensures that
existing ACDBEs do not continue to receive any benefits as a result of
their certification under the old standards.
16. Fostering Small Business Participation (Sec. 23.26)
For consistency, the IFR replaces the words ``race-neutral'' with
``DBE-neutral'' in Sec. 23.26(b)(1).
For consistency, the IFR replaces the words ``minority and women
owned'' with ``socially and economically disadvantaged'' in Sec.
23.26(d)(5).
For consistency, the IFR replaces the word ``gender'' with ``sex''
in Sec. 23.26(e).
17. Reporting and Recordkeeping (Sec. 23.27)
The IFR eliminates the requirement in Sec. 23.27(c)(2)(iv) for
recipients to obtain information about the majority owner's race and
sex for all ACDBEs and non-ACDBEs who seek to work on each of a
recipient's concession opportunities, and then renumbers the
requirements in current Sec. Sec. 23.27(c)(v) through (c)(vii) as
Sec. Sec. 23.27(c)(iv) through (c)(vi). The IFR also eliminates the
requirement in Sec. 23.27(d)(1) that recipients report and categorize
the percentage of in-State and out-of-State ACDBE certifications by sex
and ethnicity. The IFR also eliminates the requirements in Sec. Sec.
23.27(d)(5) and (6) that recipients report the number of in-State and
out-of-State applications for ``individualized'' determinations of
social or economic disadvantage status, and the number of in-State and
out-of-State applicants who made an individualized showing of social
and economic disadvantaged status. This IFR requires all applicants to
demonstrate social and economic disadvantage affirmatively to
participate in the ACDBE program, which renders these reporting
requirements unnecessary. The IFR further renumbers the reporting
requirements in current Sec. Sec. 23.27(d)(2) through (d)(4) as
Sec. Sec. 23.27(d)(1) through (d)(3).
Subpart D--Goals, Good Faith Efforts, and Counting
18. Goal and Consultation Requirements (Sec. Sec. 23.41, 23.43)
The IFR amends Sec. 23.41(d) by removing the existing language, as
there will be no opportunity to create group-specific goals now that
race and sex have been removed from the regulation. In its place, the
IFR adds new language to indicate that a recipient is not required to
update its overall goal until its UCP completes the reevaluation
process described in Sec. 23.81.
The IFR amends Sec. 23.43(b) to remove consultation requirements
for minority and women's contractor groups, as well as the language
related to posting proposed overall goals in minority-focused media.
19. Setting Goals (Sec. 23.51)
For consistency, the Department amends Sec. 23.51(a) to replace
the words ``discrimination and its effects'' with ``social and economic
disadvantage.'' For consistency, the IFR replaces the words ``race-
neutral'' and ``race-conscious'' with ``ACDBE-neutral'' and ``ACDBE-
conscious'' in Sec. Sec. 23.51(f), (g), and (h), and in Sec.
23.51(d)(5).
For consistency and to ensure recipients establish overall goals
that include only DBEs who are ready, willing, and able to compete for
and participate in DOT-assisted contracts, the Department amends Sec.
23.51(c)(3) to clarify that any disparity studies utilized by
recipients in setting their goals must provide a detailed capacity
analysis, including the methodology used.
20. Counting ACDBE Participation During Transition Period (Sec. Sec.
23.53, 23.55)
The IFR adds Sec. 23.53(g) and Sec. 23.55(m) to provide that
until a UCP completes the reevaluation process described in Sec.
23.81, recipients covered by that UCP, and car rental companies
operating at airports covered by that UCP, may not count any ACDBE
participation toward ACDBE goals. These provisions ensure that existing
ACDBEs do not continue to receive any benefits as a result of their
certification under the old standards.
21. Failing To Meet Overall Goals (Sec. 23.57)
For consistency, the IFR replaces the words ``race-conscious'' and
``race-neutral'' with ``DBE-conscious'' and ``DBE-neutral'' in in Sec.
23.57(b)(4) and Sec. 23.57(c).
The IFR adds Sec. 23.57(d) to provide that until a UCP completes
the reevaluation process described in Sec. 23.81, the compliance
provisions of Sec. 23.57 will not apply to any recipient covered by
that UCP. This requirement ensures fairness to recipients during the
transition period.
22. Reevaluation Process (Sec. 23.81)
This IFR adds Sec. 23.81 to require each UCP to reevaluate any
currently certified ACDBE, to recertify any ACDBE that meets the new
certification standards, and to decertify any DBE that does not meet
the new certification standards or fails to provide additional
information required for submission under the new certification
standards. The IFR provides that decertification procedures of 49 CFR
26.87 do not apply to any decertification decisions under this process.
The IFR requires each UCP to complete the reevaluation process as
quickly as practicable following issuance of this IFR. The Department
will work with each UCP to minimize the practical impact of this rule
change during the pendency of the reevaluation process. This
reevaluation
[[Page 47974]]
process will ensure a level playing field between existing participants
and new applicants, while also eliminating the effects of the
unconstitutional presumptions and reliance on claims of disadvantage
based in whole or in part on race or sex. This process does not replace
or restrict the Department's ability to conduct a review or take action
under Title VI or other applicable law regarding compliance with equal
protection principles. A companion provision has been added to part 26
with respect to reevaluation of DBEs.
III. Public Proceedings
The Administrative Procedure Act generally requires agencies to
provide the public with notice of proposed rulemaking and an
opportunity to comment prior to publication of a substantive rule.
However, 5 U.S.C. 553(b)(B) authorizes agencies to publish a final rule
without first seeking public comment on a proposed rule ``when the
agency for good cause finds (and incorporates the finding and a brief
statement of reasons therefor in the rules issued) that notice and
public procedure thereon are impracticable, unnecessary, or contrary to
the public interest.'' DOT finds that providing advance notice and an
opportunity to comment on these regulatory changes pertaining to the
DBE and ACDBE programs would be impracticable, unnecessary, and
contrary to the public interest. Consistent with the letter authored by
the Solicitor General and discussed elsewhere in the preamble,\9\ DOT
has determined that race- and sex-based presumptions of the DBE and
ACDBE programs violate the U.S. Constitution. In the absence of this
IFR, however, DOT's own regulations would continue to require funding
recipients to apply those very same presumptions. Allowing this
confusing and contradictory situation to continue during a notice-and-
comment process would be impracticable and contrary to the public
interest. Further, notice-and-comment is unnecessary where a regulatory
action is required as a matter of law to ensure consistency with
rulings of the United States Supreme Court. It is well-established that
an agency is not required to continue to enforce a statutory provision
that it has found to be unconstitutional.\10\ By the same token, an
agency is not required to subject the public to unconstitutional
requirements. This IFR provides notice of the amendments to the
regulations' provisions and invites the public to comment. DOT has
determined, however, that it should not delay the effectiveness of the
amendments and that it should act immediately to remedy the
unconstitutional programs. For the foregoing reasons, the good cause
exception in 5 U.S.C. 553(d)(3) also applies to DOT's decision to make
this IFR effective upon publication.
---------------------------------------------------------------------------
\9\ Letter from Solicitor General D. John Sauer to Hon. Mike
Johnson (June 25, 2025), https://www.justice.gov/oip/media/1404871/dl?inline.
\10\ See In re Aiken County, 725 F.3d 255, 259 (D.C. Cir. 2013)
(Kavanaugh, J.) (``If the President has a constitutional objection
to a statutory mandate or prohibition, the President may decline to
follow the law unless and until a final Court order dictates
otherwise. . . . [This] basic constitutional principle[ ] appl[ies]
to the President and subordinate executive agencies.''); Office of
Legal Counsel Opinion, Presidential Authority to Decline to Execute
Unconstitutional Statutes, 18 U.S. Op. Off. Legal Counsel 199
(1994).
---------------------------------------------------------------------------
IV. Regulatory Analyses and Notices
A. Executive Order: 12866 (``Regulatory Planning and Review''),
Executive Order 13563 (``Improving Regulation and Regulatory Review''),
and DOT Regulatory Policies and Procedures
The IFR is a significant regulatory action under Executive Order
12866, ``Regulatory Planning and Review,'' as supplemented by Executive
Order 13563, ``Improving Regulation and Regulatory Review.''
Accordingly, the Office of Management and Budget (OMB) has reviewed it
under that Executive Order.
The IFR amends reporting and eligibility requirements for the
Department's Airport Concession Disadvantaged Business Enterprises
(ACDBE) program and Disadvantaged Business Enterprise (DBE) program.
These programs are implemented and overseen by recipients of certain
Department funds. The changes to the requirements would affect
businesses participating in the programs, recipients of Department
funds who oversee the programs, and the Department.
The IFR replaces the race- and sex-based presumptions previously
embedded in these programs with a requirement for individualized
demonstrations of social and economic disadvantage. The IFR also
modifies terminology and data reporting requirements to align with
constitutional principles while maintaining the programs' statutory
objectives.
Need for Regulatory Revisions
The IFR is being issued pursuant to legal determinations by DOT and
DOJ that the race- and sex-based presumptions previously embedded in
these programs are unconstitutional. In addition to legal compliance,
this action corrects a regulatory failure--namely, reliance on
presumptions that no longer withstand judicial scrutiny--by shifting to
individualized determinations. The IFR aligns the programs with
constitutional mandates.
Costs and Benefits
Costs
While DOT is unable to quantify all the economic costs and benefits
of the IFR, the Department has identified both qualitative and
quantitative impacts. Several provisions may lead to increased or
decreased burdens for applicants, certifying agencies, and recipients
related to transitional documentation requirements, the degree of
technical rigor in disparity studies, and changes in program reporting.
The magnitude of these costs and benefits would depend on the scope of
the change; the likelihood of behavior adjustment; and potential legal,
administrative, or programmatic effects.
Unquantified Costs
Key provisions of the IFR and their related cost impacts include:
Removal of race- and sex-based presumptions. This
provision eliminates presumptive eligibility based on race or sex and
requires applicants to submit individualized evidence of social
disadvantage, alongside the remaining required showing of economic
disadvantage. Although the underlying economic disadvantage
documentation (e.g., Personal Net Worth, income verification) was
already a component of many applications, the shift to a required
narrative or case-specific justification for all applications, as
opposed to just those that did not meet the presumption of eligibility,
may introduce additional procedural burdens and time costs on some
applicants. This may increase the complexity of preparing applications
and even potentially deter participation among some eligible small
businesses, especially those with limited administrative capacity or
legal support. This may also implicate reliance interests for
businesses that were previously certified based on presumptive
eligibility. However, many eligible small businesses will continue
efforts at applying for certification and assume the additional burden
to apply because of the benefits to being certified and the potential
opportunity it brings outweighs the added burden of the application
process. All eligible businesses may apply for and potentially obtain
certification under the new certification process, which mitigates any
impact on reliance interests. In addition, businesses'
[[Page 47975]]
reliance interests do not justify continuing to implement presumptions
that DOT and DOJ have determined are unconstitutional.
Certification burden. As the burden of production and
persuasion shifts away from certifying officials to individual
applicants, certifying agencies may experience increased numbers of
intake inquiries and clarification requests as applicants navigate the
new social disadvantage requirements, or face inconsistent application
quality, especially during the transition period. This would require
certifying agencies to spend time following up with applicants and
guiding them through the application as they go through the re-
certification process, which implicates certifying agencies' reliance
interests. In the short-term, the increase in workload and support
services on certifying agencies may temporarily elevate the demands on
the recipients' staff demands or delay determinations, which could at
least partially offset any cost savings from shifting this burden to
applicants. However, in the long run, it is expected that after the
initial review of each applicant, subsequent reviews of applicants will
require minimal agency time and will not implicate agencies' reliance
interests.
Reevaluation of all affected DBEs/ACDBEs. DBE/ACDBE
participants who have previously qualified based in whole or in part on
their race or sex will incur additional costs to develop and provide
the individualized narrative required by the IFR. In addition, all
firms will temporarily lose certifications until the reevaluation
process is complete, and some firms may lose the certifications that
currently lead to opportunities for them to participate, potentially
leading to a loss of business opportunities and implicating firms'
reliance interests (though this would be offset by other firms who face
increased access to the same opportunities). Additional administrative
burdens will also fall on certifiers (UCPs) performing the
reevaluations. This could also lead to delays in goal setting and
program participation, resulting from the temporary pause in counting
DBE participation while the reevaluation process is underway.
Clarified disparity study expectations. The rule requires
that disparity studies include detailed capacity analyses, which may
necessitate additional economic modeling, data collection, and expert
analysis beyond what is standard practice in many jurisdictions. These
requirements could increase costs, particularly for large or multi-
jurisdictional studies. While such studies are episodic rather than
annual, the enhanced methodology could impose non-trivial compliance
costs when undertaken.
Elimination of race/sex reporting in bidder lists. The
removal of demographic fields from bidder list reporting will reduce
the administrative burden of data entry for participants and
recipients, though the cost impact would likely be negligible.
Terminology changes and redefinitions. These changes
update program language to reflect constitutional terminology but do
not alter administrative procedures or eligibility. The impact is
purely semantic and is not expected to have any material cost impacts.
Quantified Costs: Information Collection Burden (Paperwork Reduction
Act)
In addition to the above qualitative costs, the Department has
quantified a portion of the expected compliance burdens as part of its
Paperwork Reduction Act (PRA) package of the rule. These burdens
represent the time and resources required to prepare, submit, and
review program-related information.
------------------------------------------------------------------------
Estimated cost
Requirement burden Timing
------------------------------------------------------------------------
Certification narratives (firms) $91.9 million..... One-time.
UCP reevaluations............... $3.4 million...... One-time.
Interstate certification........ $0.46 million..... One-time.
Bidders' list reporting......... $1.24 million..... Annual.
ACDBE annual report............. $0.58 million..... Annual.
Goal setting (disparity studies) $0.46 million Every three years.
(annual cost).
------------------------------------------------------------------------
These figures reflect fully loaded labor costs consistent with the
Bureau of Labor Statistics data and DOT's standard methodology. One-
time burdens primarily reflect transaction costs related to
individualized certification requirements, while recurring burdens are
associated with ongoing reporting and program administration. Overall,
the IFR's primary quantified costs are transitional and one-time,
totaling approximately $95 million, with recurring annualized burdens
of about $1.8 million.
Benefits
With respect to benefits, the IFR will enhance constitutional
compliance and reduce risks associated with constitutional litigation.
It may also improve public trust by reinforcing fairness in eligibility
determinations, which, although not easily quantifiable, represent
important benefits from improved program integrity.
B. Executive Order 14192 (``Unleashing Prosperity Through
Deregulation'')
This interim final rule is considered an E.O. 14219 deregulatory
action because the unquantified cost-savings associated with
constitutional compliance outweigh the quantified costs.
C. Executive Order 13132 (``Federalism'')
This IFR has been analyzed in accordance with the principles and
criteria contained in Executive Order 13132 (``Federalism''), and the
rule satisfies the requirements of the Executive Order. While the rule
may include provisions that impose substantial direct compliance costs
on State and local governments, the Department has determined that
consultation with State and local governments prior to promulgation of
the rule is not practicable given the urgent need to cure
constitutional infirmities with the existing DBE and ACDBE regulations.
These changes are required not by statute, but to ensure that the DBE
and ACDBE programs do not violate the U.S. Constitution. We seek
comment from State and local governments on these burdens during the
comment period for this IFR.
D. Executive Order 13175 (``Consultation and Coordination With Indian
Tribal Governments'')
This rulemaking has been analyzed in accordance with the principles
and criteria contained in Executive Order 13175 (``Consultation and
Coordination with Indian Tribal Governments''). Because this rulemaking
does not significantly or uniquely affect the communities of the Indian
Tribal
[[Page 47976]]
governments or impose substantial direct compliance costs on them, the
funding and consultation requirements of Executive Order 13175 do not
apply.
E. Unfunded Mandates Reform Act
The Unfunded Mandates Reform Act (UMRA) of 1995 (Pub. L. 104-4)
requires agencies to prepare a written assessment of the costs,
benefits, and other effects of proposed or final rules that include a
Federal mandate likely to result in expenditures by State, local, or
tribal governments, in the aggregate, or by the private sector, of more
than $100 million annually (adjusted annually for inflation with the
base year of 1995). This rulemaking would not result in annual State
expenditures exceeding the minimum threshold. The Department has
determined that the requirements of the Title II of the Unfunded
Mandates Reform Act of 1995 therefore do not apply to this rulemaking.
F. National Environmental Policy Act
The Department has analyzed the environmental impacts of this
action pursuant to the National Environmental Policy Act of 1969 (NEPA)
(42 U.S.C. 4321 et seq.) and has determined that it is categorically
excluded pursuant to DOT Order 5610.1D, available at https://www.transportation.gov/mission/dots-procedures-considering-environmental-impacts. Categorical exclusions are actions identified in
an agency's NEPA implementing procedures that do not normally have a
significant impact on the environment and therefore do not require
either an environmental assessment (EA) or environmental impact
statement (EIS). The purpose of this rulemaking is to amend the
Department's DBE and ACDBE regulations. Section 9(f) of DOT Order
5610.1D states that a DOT Operating Administration can use the
categorical exclusions developed by another Operating Administration.
This action is covered by the categorical exclusion listed in the
Federal Transit Administration's implementing procedures, ``[p]lanning
and administrative activities that do not involve or lead directly to
construction, such as: . . . promulgation of rules, regulations,
directives . . .'' 23 CFR 771.118(c)(4). In analyzing the applicability
of a categorical exclusion, the agency must also consider whether
extraordinary circumstances are present that would warrant the
preparation of an EA or EIS. The Department does not anticipate any
environmental impacts, and there are no extraordinary circumstances
present in connection with this rulemaking.
G. Regulatory Flexibility Act
The Regulatory Flexibility Act (RFA) of 1980 (5 U.S.C. 601 et seq.)
requires agencies to evaluate the potential effects of their proposed
and final rules on small businesses, small organizations, and small
governmental jurisdictions. Whenever an agency is required by 5 U.S.C.
553, or any other law, to publish general notice of proposed rulemaking
for any proposed rule, the agency must conduct and publish for public
comment a regulatory flexibility analysis. Because the Department is
not required to publish a proposed rulemaking for this action, an
analysis under the RFA is not required.
H. Paperwork Reduction Act
The Paperwork Reduction Act (PRA) of 1995 (Pub. L. 104-13, 49
U.S.C. 3501, 3507) requires Federal agencies to obtain approval from
the Office of Management and Budget (OMB) before undertaking a new
collection of information imposed on ten or more persons, or continuing
a collection previously approved by OMB that is set to expire.
This IFR modifies existing collection instruments in both parts 23
and 26. The following is a description of the sections that contain new
and modified information collection requirements, along with the
estimated hours and cost to fulfill them.
For purposes of estimating the cost burden on recipients, the State
government wage rate was taken from the Bureau of Labor and Statistics
(BLS) estimate of median wages for employees in the category of
``Eligibility Interviewer in Government Programs'' (OEWS Designation
43-4061). For the purpose of calculating loaded wage rates, these
burden estimates assume wages represent 61.9 percent of total
compensation, which is consistent with similar loaded wage rate
estimates identified by BLS and used by DOT for related purposes.
Because wages represent 61.9 percent of total compensation, the
appropriate cost multiplier is 1.62 (1/0.619). Accordingly, the wage
rate ($25.95) is multiplied by 1.62 to get a fully loaded hourly wage
rate of $42.04 to account for the cost of employer-provided benefits.
For purposes of estimating the cost burden on applicant and
certified DBE/ACDBE firms, the wage rate was taken from the BLS
estimate of median wages for individuals in the category of ``Cross-
industry, Private Ownership Only'' (OEWS Designation 00-0001). Using
the same loaded wage rate identified above, the wage rate for DBE/ACDBE
applicant firms ($69.20) is multiplied by 1.62 to get a fully loaded
hourly wage rate of $112.10 to account for the cost of employer-
provided benefits. The Department emphasizes that many of these hour
and cost burdens are one-time burdens as a result of the change in the
DBE certification eligibility requirements. After the initial
transition to the new requirements, increases in annual burdens will be
modest. For DOT recipients, reporting burdens are expected to decrease
as a result of reduced DBE/ACDBE reporting requirements.
i. Reapplication Review for DBE/ACDBE Certification Based on
Individualized Showing of Social Disadvantage
To satisfy the social and economic disadvantage (SED) requirement
and ensure all determinations of disadvantage are not based in whole or
in part on race or sex, an owner must provide the certifier a Personal
Narrative (PN) that establishes the existence of disadvantage by a
preponderance of the evidence based on individualized proof regarding
specific instances of economic hardship, systemic barriers, and denied
opportunities that impeded the owner's progress or success in
education, employment, or business, including obtaining financing on
terms available to similarly situated persons who did not face barriers
in obtaining terms.
The PN must state how and to what extent the impediments caused the
owner economic harm, including a full description of type and
magnitude, and must establish the owner is economically disadvantaged
in fact relative to similarly situated non-disadvantaged individuals.
The owner must attach to the PN a current personal net worth (PNW)
statement and any other financial information the owner considers
relevant. The total annual burden hours below were calculated based on
the average of three stakeholder responses ranging from 240-2,000
hours. The total annual cost burden was calculated based on one
stakeholder response of $80,000.
In preparing this estimate, DOT estimated a 10 percent decrease in
the number of currently certified firms who will submit documentation
to maintain their DBE/ACDBE decertification status. DOT also assumed a
50 percent reduction in the total burden hours compared to the pre-
existing estimated burden for completing the full Uniform Certification
Application (UCA), as firms will be able to use many of their other
existing certification documents for resubmission.
[[Page 47977]]
Respondents: Firms seeking to maintain their DBE/ACDBE
certification.
Estimated Number of Respondents: 41,000.
Frequency: One time per respondent.
Total Annual Burden Hours: 820,000 (one-time burden).
Total Annual Cost Burden: $91,922,000 (one-time burden).
ii. Unified Certification Program (UCP) Reevaluation of Applications
for DBE/ACDBE Certification Based on Individualized Showing of Social
Disadvantage
UCPs will need to reevaluate DBE/ACDBE applicant firms based on
updated submission of application materials, including the PN and PNW
statement. This estimate assumes an average burden of two hours to
complete a review and make a disposition for each DBE/ACDBE
certification application, including notifications to other
jurisdictions.
Respondents: UCPs.
Estimated Number of Respondents: 53.
Frequency: One-time reevaluation of 41,000 applicant firms.
Total Annual Burden Hours: 82,000 (one-time burden).
Total Annual Cost Burden: $3,447,280 (one-time cost).
iii. Maintaining and Updating Bidders' Lists
We estimate that recipients will experience a reduced burden to
implement 49 CFR 26.11 as a result of eliminating the race- and sex-
based reporting requirements for bidders' lists, in addition to
eliminating the requirement to report data related to applications for
and determinations of individualized social and economic disadvantage.
Respondents: FAA, FHWA, and FTA funding recipients.
Estimated Number of Respondents: 1,639.
Frequency: 3 times per year.
Total Annual Burden Hours: 29,502.
Total Annual Cost Burden: $1,240,264.
iv. ACDBE Annual Report of Percentages of ACDBEs in Various Categories
We estimate that FAA airport recipients will experience a reduced
burden to implement 49 CFR 26.11 as a result of eliminating the race-
and sex-based reporting requirements for bidders' lists, in addition to
eliminating the requirement to report data related to applications for
and determinations of individualized social and economic disadvantage.
Respondents: State Departments of Transportation, District of
Columbia, U.S. Virgin Islands, and Puerto Rico.
Estimated Number of Respondents: 53.
Frequency: Once per year.
Total Annual Burden Hours: 13,780.
Total Annual Cost Burden: $579,311.
v. Setting Overall Goals for DBE Participation in DOT-Assisted
Contracts
The Department estimates a modest increase in burden for setting
overall DBE goals as a result of the transition to the new DBE
certification requirements and enhanced expectations related to
disparity studies used in setting overall goals. These changes may
result in increases in the amount of time for recipients to set goals
based on the relative availability of certified DBEs.
Respondents: DOT funding recipients.
Estimated Number of Respondents: 1,639.
Frequency: Once every three years.
Total Annual Burden Hours: 10,927.
Total Annual Cost Burden: $459,371.
vi. Providing Evidence of Certification to an Additional State When a
Firm Certified in Its Home State Applies to Another State for
Certification (Interstate Certification)
The Department estimates a one-time increase in the burden for
firms to provide evidence of certification to an additional State when
a firm certified in its home State applies to another State for
certification.
Respondents: DBE/ACDBE firms applying for interstate certification.
Estimated Number of Respondents: 4,100.
Frequency: Once.
Total Annual Burden Hours: 4,100.
Total Annual Cost Burden: $459,610 (one-time cost).
As noted in the Costs and Benefits section of this analysis, these
burden hour and cost estimates have been incorporated into the
Department's overall assessment of regulatory costs.
Notwithstanding any other provision of law, no person is required
to respond to a collection of information unless that collection
displays a valid OMB control number.
I. Congressional Review Act
The Congressional Review Act, 5 U.S.C. 801 et seq., generally
provides that before a rule may take effect, the agency promulgating
the rule must submit a rule report, which includes a copy of the rule,
to each House of the Congress and to the Comptroller General of the
United States. DOT will submit a report containing this rule and other
required information to the U.S. Senate, the U.S. House of
Representatives, and the Comptroller General of the United States. This
rule does not constitute a major rule as defined in 5 U.S.C. 804(2).
List of Subjects in 49 CFR Parts 23 and 26
Administrative practice and procedure, Airports, Civil rights,
Government contracts, Grant programs--transportation, Mass
transportation, Minority businesses, Reporting and recordkeeping
requirements.
Sean P. Duffy,
Secretary of Transportation.
For the reasons stated in the preamble, the Department of
Transportation amends 49 CFR parts 23 and 26 as follows:
PART 23--PARTICIPATION OF DISADVANTAGED BUSINESS ENTERPRISE IN
AIRPORT CONCESSIONS
0
1. The authority for part 23 continues to read as follows:
Authority: 49 U.S.C. 47107 and 47113; 42 U.S.C. 2000d; 49
U.S.C. 322; E.O. 12138, 44 FR 29637, 3 CFR, 1979 Comp., p. 393.
0
2. Amend Sec. 23.1 by revising paragraph (c) to read as follows:
Sec. 23.1 What are the objectives of this part?
* * * * *
(c) To ensure that the Department's ACDBE program operates in a
nondiscriminatory manner and without regard to race or sex, while
maximizing efficiency of service;
* * * * *
0
3. Amend Sec. 23.3 as follows:
0
a. Add definitions for ACDBE-conscious and ACDBE-neutral in
alphabetical order;
0
b. Remove the definitions of Race-conscious and Race-neutral; and
0
c. Revise the definition of Socially and economically disadvantaged
individual.
The additions and revisions read as follows:
Sec. 23.3 What do the terms used in this part mean?
ACDBE-conscious measure or program is one that is focused
specifically on assisting only ACDBEs.
ACDBE-neutral measure or program is one that is, or can be, used to
assist all small business concerns.
* * * * *
Socially and economically disadvantaged individual means any
individual who is a citizen (or lawfully admitted permanent resident)
of the United States and who a certifier finds to be socially and
economically
[[Page 47978]]
disadvantaged on a case-by-case basis. A determination that an
individual is socially and economically disadvantaged must not be based
in whole or in part on race or sex. For that reason, applicants may
qualify as socially and economically disadvantaged only if they can
meet the relevant criteria described in Sec. 26.67.
* * * * *
0
4. Amend Sec. 23.25 as follows:
0
a. Revise the introductory text of paragraphs (d) and (e); and
0
b. Add paragraph (h).
The revisions read as follows:
Sec. 23.25 What measures must recipients include in their ACDBE
programs to ensure nondiscriminatory participation of ACDBEs in
concessions?
* * * * *
(d) Your ACDBE program must include ACDBE-neutral measures that you
will take. You must maximize the use of ACDBE-neutral measures,
obtaining as much as possible of the ACDBE participation needed to meet
overall goals through such measures. These are responsibilities that
you directly undertake as a recipient, in addition to the efforts that
concessionaires make, to obtain ACDBE participation. The following are
examples of ACDBE-neutral measures you can implement:
* * * * *
(e) Your ACDBE program must also provide for the use of ACDBE-
conscious measures when ACDBE-neutral measures, standing alone, are not
projected to be sufficient to meet an overall goal. The following are
examples of ACDBE-conscious measures you can implement:
* * * * *
(h) Effective October 3, 2025, you may not use any of the measures
described in paragraph (e) of this section until the UCP that covers
you has completed the reevaluation process described in Sec. 23.81.
0
5. Amend Sec. 23.26 by revising paragraphs (b) introductory text,
(b)(1), (d)(5), and (e) to read as follows:
Sec. 23.26 Fostering small business participation.
* * * * *
(b) This element must be submitted to the FAA for approval as a
part of your ACDBE program. As part of this program element, you may
include, but are not limited to including, the following strategies:
(1) Establish an ACDBE-neutral small business set-aside for certain
concession opportunities. Such a strategy would include the rationale
for selecting small business set-aside concession opportunities that
may include consideration of size and availability of small businesses
to operate the concession.
* * * * *
(d) * * *
(5) You will take aggressive steps to encourage those socially and
economically disadvantaged firms eligible for ACDBE certification to
become certified; and
* * * * *
(e) A State, local, or other program, in which eligibility requires
satisfaction of race, sex, or other criteria in addition to business
size, may not be used to comply with the requirements of this part.
* * * * *
Sec. 23.27 [Amended]
0
6. Amend Sec. 23.27 as follows:
0
a. Remove paragraph (c)(2)(iv);
0
b. Redesignate paragraphs (c)(2)(v), (c)(2)(vi), and (c)(2)(vii) as
paragraphs (c)(2)(iv), (c)(2)(v), and (c)(2)(vi), respectively;
0
c. Remove paragraph (d)(1);
0
d. Redesignate subparagraphs (d)(2), (d)(3), and (d)(4) as paragraphs
(d)(1), (d)(2), and (d)(3), respectively; and
0
e. Remove paragraphs (d)(5) and (d)(6).
0
7. Amend Sec. 23.41 by revising paragraph (d) to read as follows:
Sec. 23.41 What is the basic overall goal requirement for recipients?
* * * * *
(d) Effective October 3, 2025, you are not required to update your
overall goals until the UCP that covers you has completed the
reevaluation process described in Sec. 23.81.
* * * * *
0
8. Amend Sec. 23.43 by revising paragraph (b) to read as follows:
Sec. 23.43 What are the consultation requirements in the development
of recipients' overall goals?
* * * * *
(b) Stakeholders with whom you must consult include, but are not
limited to, business groups, community organizations, trade
associations representing concessionaires currently located at the
airport, as well as existing concessionaires themselves, and other
officials or organizations that could be expected to have information
concerning the availability of disadvantaged businesses and the
recipient's efforts to increase participation of ACDBEs.
* * * * *
0
9. Amend Sec. 23.45 by revising paragraphs (f), (g), and (h) to read
as follows:
Sec. 23.45 What are the requirements for submitting overall goal
information to the FAA?
* * * * *
(f) Your submission must include your projection of the portions of
your overall goals you propose to meet through use of ACDBE-neutral and
ACDBE-conscious means, respectively, and the basis for making this
projection (see Sec. 23.51(d)(5)).
(g) FAA may approve or disapprove the way you calculated your goal,
including your ACDBE-neutral/ACDBE-conscious ``split,'' as part of its
review of your plan or goal submission. Except as provided in paragraph
(h) of this section, the FAA does not approve or disapprove the goal
itself (i.e., the number).
(h) If the FAA determines that your goals have not been correctly
calculated or the justification is inadequate, the FAA may, after
consulting with you, adjust your overall goal or ACDBE-neutral/ACDBE-
conscious ``split.'' The adjusted goal represents the FAA's
determination of an appropriate overall goal for ACDBE participation in
the recipient's concession program, based on relevant data and
analysis. The adjusted goal is binding.
* * * * *
0
10. Amend Sec. 23.51 as follows:
0
a. Revise the introductory text of paragraph (a);
0
b. Revise paragraph (a)(2);
0
c. Revise paragraph (c)(3); and
0
d. Revise paragraph (d)(5).
The revisions read as follows:
Sec. 23.51 How are a recipient's overall goals expressed and
calculated?
(a) Your objective in setting a goal is to estimate the percentage
of the base calculated under Sec. Sec. 23.47 through 23.49 that would
be performed by ACDBEs in the absence of social and economic
disadvantage and its effects.
* * * * *
(2) In conducting this goal setting process, you are determining
the extent, if any, to which the firms in your market area have been
impacted by social and economic disadvantage in connection with
concession opportunities or related business opportunities.
* * * * *
(c) * * *
(3) Use data from a disparity study. Use a percentage figure
derived from data in a valid, applicable disparity study. Any disparity
study utilized must
[[Page 47979]]
provide a detailed capacity analysis, including the methodology used.
* * * * *
(d) * * *
(5) Among the information you submit with your overall goal (see
Sec. 23.45(e)), you must include description of the methodology you
used to establish the goal, including your base figure and the evidence
with which it was calculated, as well as the adjustments you made to
the base figure and the evidence relied on for the adjustments. You
should also include a summary listing of the relevant available
evidence in your jurisdiction and an explanation of how you used that
evidence to adjust your base figure. You must also include your
projection of the portions of the overall goal you expect to meet
through ACDBE-neutral and ACDBE-conscious measures, respectively (see
Sec. Sec. 26.51(c) of this chapter).
* * * * *
0
11. Amend Sec. 23.53 by adding paragraph (g) to read as follows:
Sec. 23.53 How do car rental companies count ACDBE participation
toward their goals?
* * * * *
(g) Effective October 3, 2025, you as a car rental company may not
count any ACDBE participation toward the goal that an airport has set
for you until the UCP covering that airport has completed the
reevaluation process described in part 26, Sec. 23.81
0
12. Amend Sec. 23.55 by adding paragraph (m) to read as follows:
Sec. 23.55 How do recipients count ACDBE participation toward goals
for items other than car rentals?
* * * * *
(m) Effective October 3, 2025, you may not count any ACDBE
participation toward ACDBE goals until the UCP covering you has
completed the reevaluation process described in Sec. 23.81.
0
13. Amend Sec. 23.57 as follows:
0
a. Revise paragraphs (b)(4) and (c); and
0
b. Add paragraph (d).
The revision and addition read as follows:
Sec. 23.57 What happens if a recipient falls short of meeting its
overall goals?
* * * * *
(b) * * *
(4) The FAA may impose conditions on the recipient as part of its
approval of the recipient's analysis and corrective actions including,
but not limited to, modifications to your overall goal methodology,
changes in your ACDBE-neutral/ACDBE-conscious split, or the
introduction of additional ACDBE-neutral or ACDBE-conscious measures.
* * * * *
(c) If information coming to the attention of FAA demonstrates that
current trends make it unlikely that you, as an airport, will achieve
ACDBE awards and commitments that would be necessary to allow you to
meet your overall goal at the end of the fiscal year, FAA may require
you to make further good faith efforts, such as modifying your ACDBE-
conscious/ACDBE-neutral split or introducing additional ACDBE-neutral
or ACDBE-conscious measures for the remainder of the fiscal year.
(d) Effective October 3, 2025, you are not subject to this section
until the UCP that covers you has completed the reevaluation process
described in Sec. 23.81.
0
14. Add Sec. 23.81 to subpart E to read as follows:
Sec. 23.81 ACDBE reevaluation process.
(a) Effective October 3, 2025, each UCP must:
(1) Identify each currently certified ACDBE;
(2) Provide each firm identified pursuant to paragraph (a)(1) of
this section with the opportunity to submit documentation demonstrating
its ACDBE eligibility under the standards set forth in this part;
(3) Determine whether each firm identified pursuant to paragraph
(a)(1) of this section meets the ACDBE eligibility standards set forth
in this part; and
(4) Issue a written decision to each firm reevaluated pursuant to
subparagraph (a)(3), indicating that it has either been recertified or
is decertified.
(b) The provisions of Sec. 26.87 of this chapter shall not apply
to any action taken pursuant to paragraph (a) of this section.
(c) Each UCP must reevaluate each firm identified pursuant to
paragraph (a)(1) of this section as quickly as practicable and must
promptly notify the Department when it has done so. The Department
reserves the right to review a UCP's reevaluation process.
PART 26--PARTICIPATION BY DISADVANTAGED BUSINESS ENTERPRISES IN
DEPARTMENT OF TRANSPORTATION FINANCIAL ASSISTANCE PROGRAMS
0
15. The authority for part 26 continues to read as follows:
Authority: 23 U.S.C. 304 and 324; 42 U.S.C. 2000d, et seq.; 49
U.S.C. 47113, 47123; Sec. 1101(b), Pub. L. 114-94, 129 Stat. 1312,
1324 (23 U.S.C. 101 note); Sec. 150, Pub. L. 115-254, 132 Stat. 3215
(23 U.S.C. 101 note); Pub. L. 117-58, 135 Stat. 429 (23 U.S.C. 101
note).
0
16. Amend Sec. 26.1 by revising paragraph (c) to read as follows:
Sec. 26.1 What are the objectives of this part?
* * * * *
(c) To ensure that the Department's DBE program operates in a
nondiscriminatory manner and without regard to race or sex, while
maximizing efficiency of service;
* * * * *
0
17. Amend Sec. 26.5 as follows:
0
a. Add definitions for DBE-conscious and DBE-neutral in alphabetical
order;
0
b. Remove the definitions of Race-conscious and Race-neutral; and
0
c. Revise the definition of Socially and economically disadvantaged
individual.
The addition and revision read as follows:
Sec. 26.5 Definitions.
* * * * *
DBE-conscious measure or program is one that is focused
specifically on assisting only DBEs.
DBE-neutral measure or program is one that is, or can be, used to
assist all small businesses.
* * * * *
Socially and economically disadvantaged individual means any
individual who is a citizen (or lawfully admitted permanent resident)
of the United States and who a certifier finds to be socially and
economically disadvantaged on a case-by-case basis. A determination
that an individual is socially and economically disadvantaged must not
be based in whole or in part on race or sex. For that reason, all
applicants shall qualify as socially and economically disadvantaged if
they can meet the relevant criteria described in Sec. 26.67. Being
born in a particular country does not, standing alone, mean that a
person is necessarily socially and economically disadvantaged.
* * * * *
Sec. 26.11 [Amended]
0
18. Amend Sec. 26.11 as follows:
0
a. Remove paragraph (c)(2)(iv);
0
b. Redesignate paragraphs (c)(2)(v), (c)(2)(vi), and (c)(2)(vii) as
subparagraphs (c)(2)(iv), (c)(2)(v), and (c)(2)(vi), respectively;
0
c. Remove paragraph (e)(1);
0
d. Redesignateparagraphs (e)(2), (e)(3), and (e)(4) as paragraphs
(e)(1), (e)(2), and (e)(3), respectively; and
0
e. Remove paragraphs (e)(5) and (e)(6).
0
19. Amend Sec. 26.37 by revising paragraph (b) to read as follows:
[[Page 47980]]
Sec. 26.37 What are a recipient's responsibilities for monitoring?
* * * * *
(b) A recipient's DBE program must also include a monitoring and
enforcement mechanism to ensure that work committed, or in the case of
DBE-neutral participation, the work subcontracted, to all DBEs at
contract award or subsequently is performed by the DBEs to which the
work was committed or subcontracted to, and such work is counted
according to the requirements of Sec. 26.55. This mechanism must
include a written verification that you have reviewed contracting
records and monitored the work site to ensure the counting of each
DBE's participation is consistent with its function on the contract.
The monitoring to which this paragraph (b) refers may be conducted in
conjunction with monitoring of contract performance for other purposes
such as a commercially useful function review.
* * * * *
0
20. Amend Sec. 26.39 by revising paragraphs (b)(1) and (b)(5) to read
as follows:
Sec. 26.39 Fostering small business participation.
* * * * *
(b) * * *
(1) Establishing a DBE-neutral small business set-aside for prime
contracts under a stated amount (e.g., $1 million).
* * * * *
(5) To meet the portion of your overall goal you project to meet
through DBE-neutral measures, ensuring that a reasonable number of
prime contracts are of a size that small businesses, including DBEs,
can reasonably perform.
* * * * *
0
21. Amend Sec. 26.45 as follows:
0
a. Revise paragraph (a)(2);
0
b. Revise paragraph (b);
0
c. Revise paragraph (c)(3);
0
d. Revise paragraph (d)(1)(ii);
0
e. Revise paragraph (d)(3);
0
f. Revise paragraph (f)(3);
0
g. Revise paragraph (g)(1); and
0
h. Revise paragraph (h);
The revisions read as follows:
Sec. 26.45 How do recipients set overall goals?
(a) * * *
(2) If you are an FTA Tier II recipient who intends to operate a
DBE-neutral program, or if you are an FAA recipient who reasonably
anticipates awarding $250,000 or less in FAA prime contract funds in a
Federal fiscal year, you are not required to develop overall goals for
FTA or FAA, respectively, for that Federal fiscal year.
(b) Your overall goal must be based on demonstrable evidence of the
availability of ready, willing, and able DBEs relative to all
businesses ready, willing, and able to participate on your DOT-assisted
contracts (hereafter, the ``relative availability of DBEs''). The goal
must reflect your determination of the level of DBE participation you
would expect absent the effects of social and economic disadvantage.
You cannot simply rely on either the 10 percent national goal, your
previous overall goal, or past DBE participation rates in your program
without reference to the relative availability of DBEs in your market.
(c) * * *
(3) Use data from a disparity study. Use a percentage figure
derived from data in a valid, applicable disparity study. Any disparity
study utilized must provide a detailed capacity analysis, including the
methodology used.
* * * * *
(d) * * *
(1) * * *
(ii) Evidence from disparity studies conducted anywhere within your
jurisdiction, to the extent it is not already accounted for in your
base figure. To the extent that the disparity study provides a detailed
capacity analysis, include the methodology used;
* * * * *
(3) If you attempt to make an adjustment to your base figure to
account for the effects of an ongoing DBE program, the adjustment must
be based on demonstrable evidence that is logically and directly
related to the effect for which the adjustment is sought.
* * * * *
(f) * * *
(3) You must include with your overall goal submission a
description of the methodology you used to establish the goal,
including your base figure and the evidence with which it was
calculated, and the adjustments you made to the base figure and the
evidence you relied on for the adjustments. You should also include a
summary listing of the relevant available evidence in your jurisdiction
and, where applicable, an explanation of why you did not use that
evidence to adjust your base figure. You must also include your
projection of the portions of the overall goal you expect to meet
through DBE-neutral and DBE-conscious measures, respectively (see Sec.
26.51(c)).
* * * * *
(g)(1) In establishing an overall goal, you must provide for
consultation and publication. This includes:
(i) Consultation with general contractor groups, community
organizations, and other officials or organizations that could be
expected to have information concerning the availability of
disadvantaged and non-disadvantaged businesses and your efforts to
establish a level playing field for the participation of DBEs. The
consultation must include a scheduled, direct, interactive exchange
(e.g., a face-to-face meeting, video conference, teleconference) with
as many interested stakeholders as possible focused on obtaining
information relevant to the goal setting process, and it must occur
before you are required to submit your methodology to the operating
administration for review pursuant to paragraph (f) of this section.
You must document in your goal submission the consultation process you
engaged in. Notwithstanding paragraph (f)(4) of this section, you may
not implement your proposed goal until you have complied with this
requirement.
(ii) A published notice announcing your proposed overall goal
before submission to the operating administration on August 1st. The
notice must be posted on your official internet website and may be
posted in any other sources (e.g., trade association publications). If
the proposed goal changes following review by the operating
administration, the revised goal must be posted on your official
internet website.
* * * * *
(h) Effective October 3, 2025you are not required to update your
overall goals until the UCP that covers you has completed the
reevaluation process described in Sec. 26.111.
0
22. Amend Sec. 26.47 as follows:
0
a. Revise paragraph (c)(4);
0
b. Revise paragraph (d); and
0
c. Add paragraph (e).
Sec. 26.47 Can recipients be penalized for failing to meet overall
goals?
* * * * *
(c) * * *
(4) FHWA, FTA, or FAA may impose conditions on the recipient as
part of its approval of the recipient's analysis and corrective actions
including, but not limited to, modifications to your overall goal
methodology, changes in your DBE-conscious/DBE-neutral split, or the
introduction of additional DBE-neutral or DBE-conscious measures.
* * * * *
(d) If, as recipient, your Uniform Report of DBE Awards or
Commitments and Payments or other information coming to the attention
of FTA, FHWA, or FAA, demonstrates that current
[[Page 47981]]
trends make it unlikely that you will achieve DBE awards and
commitments that would be necessary to allow you to meet your overall
goal at the end of the fiscal year, FHWA, FTA, or FAA, as applicable,
may require you to make further good faith efforts, such as by
modifying your DBE-conscious/DBE-neutral or introducing additional DBE-
neutral or DBE-conscious measures for the remainder of the fiscal year.
(e) Effective October 3, 2025, you are not subject to this section
until the UCP that covers you has completed the reevaluation process
described in Sec. 26.111.
0
23. Amend Sec. 26.51 as follows:
0
a. Revise paragraph (a);
0
b. Revise the introductory text to paragraph (b);
0
c. Revise paragraph (c);
0
d. Revise paragraph (d);
0
e. Revise paragraph (e)(2);
0
f. Revise paragraph (f);
0
g. Revise paragraph (g); and
0
h. Add paragraph (h).
The revisions read as follows:
Sec. 26.51 What means do recipients use to meet overall goals?
(a) You must meet the maximum feasible portion of your overall goal
by using DBE-neutral means of facilitating DBE-neutral participation.
DBE-neutral participation includes any time a DBE wins a prime contract
through customary competitive procurement procedures or is awarded a
subcontract on a prime contract that does not carry a DBE contract
goal.
(b) DBE-neutral means include, but are not limited to, the
following:
* * * * *
(c) Each time you submit your overall goal for review by the
concerned operating administration, you must also submit your
projection of the portion of the goal that you expect to meet through
DBE-neutral means and your basis for that projection. This projection
is subject to approval by the concerned operating administration, in
conjunction with its review of your overall goal.
(d) You must establish contract goals to meet any portion of your
overall goal you do not project being able to meet using DBE-neutral
means.
* * * * *
(e) * * *
(2) You are not required to set a contract goal on every DOT-
assisted contract. You are not required to set each contract goal at
the same percentage level as the overall goal. The goal for a specific
contract may be higher or lower than that percentage level of the
overall goal, depending on such factors as the type of work involved,
the location of the work, and the availability of DBEs for the work of
the particular contract. However, over the period covered by your
overall goal, you must set contract goals so that they will
cumulatively result in meeting any portion of your overall goal you do
not project being able to meet through the use of DBE-neutral means.
* * * * *
(f) To ensure that your DBE program continues to be narrowly
tailored to overcome the effects of social and economic disadvantage,
you must adjust your use of contract goals as follows:
(1) If your approved projection under paragraph (c) of this section
estimates that you can meet your entire overall goal for a given year
through DBE-neutral means, you must implement your program without
setting contract goals during that year, unless it becomes necessary in
order meet your overall goal.
Example 1 to paragraph (f)(1): Your overall goal for Year I is 12
percent. You estimate that you can obtain 12 percent or more DBE
participation through DBE-neutral measures, without any use of contract
goals. In this case, you do not set any contract goals for the
contracts that will be performed in Year I. However, if part way
through Year I, your DBE awards or commitments are not at a level that
would permit you to achieve your overall goal for Year I, you could
begin setting DBE-conscious contract goals during the remainder of the
year as part of your obligation to implement your program in good
faith.
(2) If, during any year in which you are using contract goals, you
determine that you will exceed your overall goal, you must reduce or
eliminate the use of contract goals to the extent necessary to ensure
that the use of contract goals does not result in exceeding the overall
goal. If you determine that you will fall short of your overall goal,
then you must make appropriate modifications in your use of DBE-neutral
or DBE-conscious measures to allow you to meet the overall goal.
Example 2 to paragraph (f)(2): In Year II, your overall goal is 12
percent. You have estimated that you can obtain 5 percent DBE
participation through use of DBE-neutral measures. You therefore plan
to obtain the remaining 7 percent participation through use of DBE
goals. By September, you have already obtained 11 percent DBE
participation for the year. For contracts let during the remainder of
the year, you use contract goals only to the extent necessary to obtain
an additional one percent DBE participation. However, if you determine
in September that your participation for the year is likely to be only
8 percent total, then you would increase your use of DBE-neutral or
DBE-conscious means during the remainder of the year in order to
achieve your overall goal.
(3) If the DBE participation you have obtained by DBE-neutral means
alone meets or exceeds your overall goals for two consecutive years,
you are not required to make a projection of the amount of your goal
you can meet using such means in the next year. You do not set contract
goals on any contracts in the next year. You continue using only DBE-
neutral means to meet your overall goals unless and until you do not
meet your overall goal for a year.
Example 3 to paragraph (f)(3): Your overall goal for Years I and
Year II is 10 percent. The DBE participation you obtain through DBE-
neutral measures alone is 10 percent or more in each year. (For this
purpose, it does not matter whether you obtained additional DBE
participation through using contract goals in these years.) In Year III
and following years, you do not need to make a projection under
paragraph (c) of this section of the portion of your overall goal you
expect to meet using DBE-neutral means. You simply use DBE-neutral
means to achieve your overall goals. However, if in Year VI your DBE
participation falls short of your overall goal, then you must make a
paragraph (c) of this section projection for Year VII and, if
necessary, resume use of contract goals in that year.
(4) If you obtain DBE participation that exceeds your overall goal
in two consecutive years using contract goals (i.e., not through DBE-
neutral means alone), you must reduce your use of contract goals
proportionately in the following year.
Example 4 to paragraph (f)(4): In Years I and II, your overall goal
is 12 percent, and you obtain 14 and 16 percent DBE participation,
respectively. You have exceeded your goals over the two-year period by
an average of 25 percent. In Year III, your overall goal is again 12
percent, and your paragraph (c) of this section projection estimates
that you will obtain 4 percent DBE participation through DBE-neutral
means and 8 percent through contract goals. You then reduce the
contract goal projection by 25 percent (i.e., from 8 to 6 percent) and
set contract goals accordingly during the year. If in Year III you
obtain 11 percent participation, you do not use this contract goal
adjustment mechanism for Year IV, because there have not been two
consecutive years of exceeding overall goals.
[[Page 47982]]
(g) In any year in which you project meeting part of your goal
through DBE-neutral means and the remainder through contract goals, you
must maintain data separately on DBE achievements in those contracts
with and without contract goals, respectively. You must report this
data to the concerned operating administration as provided in Sec.
26.11.
(h) Effective October 3, 2025, you may not set any contract goals
until the UCP that covers you has completed the reevaluation process
described in Sec. 26.111.
0
24. Amend Sec. 26.55 by adding paragraph (i) to read as follows:
Sec. 26.55 How is DBE participation counted toward goals?
* * * * *
(i) Effective October 3, 2025, you may not count any DBE
participation toward DBE goals until the UCP that covers you has
completed the reevaluation process described in Sec. 26.111.
0
25. Amend Sec. 26.61 by revising paragraph (b) to read as follows:
Sec. 26.61 Burden of proof.
* * * * *
(b) The firm has the burden of demonstrating, by a preponderance of
the evidence, i.e., more likely than not, that it satisfies all of the
requirements in this subpart. In determining whether the firm has met
its burden, the certifier must consider all the information in the
record, viewed as a whole. In a decertification proceeding the
certifier bears the burden of proving, by a preponderance of the
evidence, that the firm is no longer eligible for certification under
the rules of this part.
0
26. Revise Sec. 26.67 to read as follows:
Sec. 26.67 Social and economic disadvantage.
(a) Non-presumptive Disadvantage. All applicants must demonstrate
social and economic disadvantage (SED) affirmatively based on their own
experiences and circumstances within American society, and without
regard to race or sex.
(1) To satisfy the SED requirement and ensure all determinations of
disadvantage are not based in whole or in part on race or sex, an owner
must provide the certifier a Personal Narrative (PN) that establishes
the existence of disadvantage by a preponderance of the evidence based
on individualized proof regarding specific instances of economic
hardship, systemic barriers, and denied opportunities that impeded the
owner's progress or success in education, employment, or business,
including obtaining financing on terms available to similarly situated,
non-disadvantaged persons.
(2) The PN must state how and to what extent the impediments caused
the owner economic harm, including a full description of type and
magnitude, and must establish the owner is economically disadvantaged
in fact relative to similarly situated non-disadvantaged individuals.
(3) The owner must attach to the PN a current PNW statement and any
other financial information he considers relevant.
0
27. Add Sec. 26.111 to subpart F to read as follows:
Sec. 26.111 DBE Reevaluation Process.
(a) Effective October 3, 2025, each UCP must:
(1) Identify each currently certified DBE;
(2) Provide each firm identified pursuant to subparagraph (a)(1)
with the opportunity to submit documentation demonstrating its DBE
eligibility under the standards set forth in this part;
(3) Determine whether each firm identified pursuant to subparagraph
(a)(1) meets the DBE eligibility standards set forth in this part; and
(4) Issue a written decision to each firm reevaluated pursuant to
subparagraph (a)(3), indicating that it has either been recertified or
is decertified.
(b) The provisions of Sec. 26.87 of this part shall not apply to
any action taken pursuant to paragraph (a).
(c) Each UCP must reevaluate each firm identified pursuant to
subparagraph (a)(1) as quickly as practicable and must promptly notify
the Department when it has done so. The Department reserves the right
to review a UCP's reevaluation process.
[FR Doc. 2025-19460 Filed 10-2-25; 8:45 am]
BILLING CODE 4910-9X-P