DOT Issues FAQs Clarifying Interim Final Rule (IFR) on DBE/ACDBE Programs

This update supplements our previous client alert regarding the U.S. Department of Transportation’s (DOT) Interim Final Rule (IFR) amending the Disadvantaged Business Enterprise (DBE) and Airport Concessions DBE (ACDBE) programs.

On Oct. 24, the DOT posted a set of Frequently Asked Questions (FAQs) offering further implementation guidance for state DOTs. While the FAQs provide helpful clarification, significant uncertainty remains as DOT and State Unified Certification Programs (UCPs) interpret and apply new standards. Ongoing questions – such as documentation requirements, reevaluation timelines, and treatment of existing contracts – mean certified businesses and recipients should plan for potential administrative delays.

Key Updates from the DOT’s FAQs

• Projects with Existing DBE Goals (Stages: Not Advertised / Advertised But Not Awarded/Awarded)
  • Contract actions that have not yet been advertised: UCPs must amend advertisements to remove DBE goals.
  • Contract actions that have been advertised but not yet awarded: UCPs must zero out DBE goals; readvertising is generally unnecessary unless state law requires it.
  • Contracts that have were awarded before October 3, 2025: No modification is required, but DBE participation cannot be counted toward contract or overall goals until the UCP reevaluation is complete.
• Goal-Setting, Counting, and Commercially Useful Function Reviews during Reevaluation
  • No new DBE contract goal may be set, and no participation may be counted toward ongoing goals until the UCP completes its reevaluations.
  • Because counting is suspended, commercially useful function (CUF) reviews are unnecessary at this time (recipients may adjust their CUF processes accordingly).
• Prompt Payment, Contract Clauses, and Termination
  • Prompt-payment and retainage provisions remain fully enforceable.
  • Standard contract clauses continue to apply.
  • Termination for good cause rules remain in effect; UCPs must still approve any reduction or replacement of a DBE’s work.
• Jurisdiction of Original Certification (JOC)
  • Reevaluations occur through participants’ original certifying UCP (“jurisdiction of original certification”).
  • After reevaluation, participants seeking recognition in other states must reapply for interstate certification.
• Reevaluation Deadlines
  • The IFR does not impose a specific deadline for either UCPs or certified businesses. However, businesses should act promptly to avoid delays in recognition of participation.
  • UCPs are instructed to complete reevaluations “as quickly as practicable,” but no specific date is set. Timing may differ by region, so confirm with your UCP for a projected timeframe.
  • DBE participation cannot be counted until the reevaluation is complete.
• Appeals Process if a DBE is Decertified
  • A DBE that is decertified may appeal to the DOT’s Departmental Office of Civil Rights (DOCR).
  • Deadline: 45 days from the date of the decertification letter.
  • The decertification remains in effect pending the DOT’s decision, but a successful appeal can reinstate eligibility.

Looking Ahead

The DOT’s FAQs provide some desired guidance but leaves several unresolved issues – particularly relating to economic-disadvantage standards, documentation burdens, and cross-jurisdiction consistency. Contractors should review our Clark Hill Client Alert issued on Oct 15, 2025. Be aware that additional clarification is expected as the DOT evaluates stakeholder feedback received through its comment portal before November 3, 2025.  Our team will continue monitoring developments in federal and state implementations to provide updates as they become available. We are also here to assist with drafting comments to submit to the Department of Transportation before the November 3, 2025 “comment period” deadline, and to help advise DBEs/ACDBEs through every step of the recertification process. Please do not hesitate to reach out to our team if you have any questions or require assistance.

Contributors: Lauren Tesler, Law Clerk

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