FTA Disadvantage Business Enterprise (DBE) Program

Effective October 3, 2025, the USDOT issued an immediate Interim Final Rule (IFR) heavily revising the Disadvantaged Business Enterprise (DBE) and Airport Concessions DBE (ACDBE) programs. The rule eliminates automatic race/sex-based eligibility, requiring individual proof of disadvantage. Caltrans and all federally funded subrecipients must immediately comply with these mandatory changes as published in the Federal Register.

Caltrans remains committed to ensuring fair contracting opportunities for small and disadvantaged businesses, a core value that ensures transportation investments benefit all communities. While our commitment to equity is unchanged, new federal requirements necessitate a shift in how we achieve these goals. We are currently evaluating the implications of the IFR and will keep you updated on developments and necessary adjustments. Further information will be provided as it becomes available.
 
To ensure compliance with federal direction below are DBE program changes effective immediately:  

Key Changes:  

• Elimination of Presumptions: Race-and gender-based presumptions of social and economic disadvantages are removed. All applicants must now demonstrate social and economic disadvantages through individualized evidence, including personal narrative and financial documentation. 
• Re-evaluation of All DBE Firms: Every currently certified DBE will undergo re-evaluation. Firms meeting the new standards will be recertified; those that do not will be decertified. 

• Temporary Suspension of Goals and Counting: Until re-evaluations are complete, Caltrans and all subrecipients must not:  
  • Set DBE contract goals.
  • Count DBE participation toward overall program goals.

• Existing Contracts: Contracts already awarded remain valid; however, DBE commitments and participation under those contracts cannot be counted toward goal attainment during the reevaluation period. Those DBEs that are actual subcontractors (not just material suppliers), primes still need to follow subcontracting rules (i.e., termination, substitution, etc.) even if the DBE subcontractors are no longer DBEs. 
• Goal Setting: All DBE goal requirements are on pause effective October 3, 2025.  Recipients (state DOTs/transit agencies) cannot set new contract goals or count DBE participation toward goals until their Unified Certification Program (UCP) completes reevaluations.

• Reporting Requirements: USDOT has eliminated the collection of race-and sex-specific ownership data; reporting will instead focus on certification status and individualized eligibility. We await USDOT guidance on the collection of data for future reporting. 
  •  Under the October 2025 DBE IFR, semi-annual uniform reports have been paused for certain entities until further notice
• Key Requirements
  • Bidders List (26.11(c)): Recipients must create and maintain a list of all firms bidding or quoting on DOT-assisted contracts, including firm name, address, DBE status, NAICS code, age, and annual gross receipts.
  • Prompt Payment Remains: The requirement to report prompt payments to subcontractors remains in full effect.

Office of Civil Rights

Caltrans announces the implementation of a statewide reevaluation of certified DBE/ACDBE firms in accordance with revised federal regulations issued on October 3, 2025. This action ensures continued compliance with federal law while maintaining fair and transparent access to contracting opportunities for small and disadvantaged businesses.
Under the new Federal DBE regulations (IFR issued October 3, 2025), certifications must now be based on individualized demonstrations of social and economic disadvantage, with no reliance on race- or sex-based presumptions. All currently certified DBE/ACDBE firms are being reevaluated under these standards, and those that do not meet the new criteria may be decertified. During the reevaluation period, recipients may not set DBE contract goals nor count DBE participation toward goals.

Caltrans is working with the Unified Certification Program agencies to reevaluate more than 6000 DBEs as soon as practicable. DBE firms are being contacted by their certifying agency regarding additional requirements to get recertified. New applications will be processed once the reevaluation process is completed. If you have a pending application, please check for new requirements, and wait for resubmittal date announcement.