The federal Disadvantaged Business Enterprise (DBE) program is undergoing significant changes, and for infrastructure owners, engineering firms, construction managers, and prime contractors, the implications go well beyond certification.
One of the questions we expect many organizations are asking is what happens to existing contracts that contain DBE participation requirements. Are contractors still obligated to meet those goals? What happens when a subcontractor loses its certification? And how should firms approach future procurement opportunities when the requirements themselves are changing?
These are important questions, particularly for organizations managing multiple public infrastructure projects where contractual obligations, federal regulations, and agency-specific requirements must all be considered.
On September 25, 2026, the U.S. Department of Transportation (USDOT) issued a final rule revising the DBE and Airport Concession Disadvantaged Business Enterprise (ACDBE) programs. The rule largely finalizes changes introduced in October 2025, eliminating the automatic presumption of social and economic disadvantage based on race or sex and requiring business owners to demonstrate disadvantage through an individualized assessment.
The DBE program has not been eliminated. However, the changes have introduced new considerations for certification, procurement planning, subcontractor participation, and contract compliance.
Existing Contracts: Are DBE Goals Still Enforceable?
For organizations with active federally assisted transportation contracts, this may be the most immediate concern.
USDOT’s implementation guidance makes an important distinction between contracts executed before October 3, 2025, and procurements that had not yet been awarded when the interim rule took effect.
Contracts executed before October 3, 2025, are not automatically required to be amended. During the certification reevaluation period, however, agencies could not count DBE participation toward contract or overall program goals. USDOT also permits agencies to modify existing contracts to reduce DBE goals to zero, subject to applicable requirements.
The situation becomes more complicated when an existing DBE subcontractor does not retain certification under the revised standards. The subcontractor’s certification status may affect whether its participation can be counted toward DBE goals, but that does not automatically terminate the underlying subcontract.
USDOT’s guidance continues to require prime contractors to follow established termination procedures, including obtaining the contracting agency’s written consent where required.
For infrastructure owners and prime contractors, the distinction between certification eligibility, participation credit, and contractual obligations is critical. A regulatory change affecting DBE credit does not necessarily eliminate the contractual responsibilities of the parties involved.
Before making changes to existing participation plans, subcontracting arrangements, or compliance reporting, organizations should review their contracts and obtain written direction from the applicable contracting agency. This is especially important for firms managing multiple contracts across agencies that may be at different stages of implementing the revised requirements.
A New York Example: MTA Reduces a DBE Goal from 22.5% to Zero
The Metropolitan Transportation Authority (MTA) provides a useful example of how the federal changes are affecting actual procurement activity.
Under Contract C40299, MTA Construction & Development solicited bids for improvements at three New York City bus depots: Kingsbridge in Manhattan, Flatbush in Brooklyn, and Charleston in Staten Island. The work includes replacement of HVAC equipment, boilers, air curtains, and fire alarm systems; installation of building management systems; and rehabilitation of depot facilities and parking areas.
The federally funded contract carries an estimated value of $10 million to $50 million.
In its revised solicitation notice, the MTA reduced the contract’s DBE participation goal from 22.5% to 0%, specifically referencing USDOT’s October 2025 interim rule and the pending reevaluation of DBE certifications.
The significance of this change should not be overlooked. It demonstrates how a federal regulatory decision can directly affect participation requirements on a major infrastructure procurement.
At the same time, the reduction should not be interpreted as a permanent elimination of DBE goals across MTA projects. The change was made during the federal transition period, when agencies were required to suspend certain DBE goal-setting and participation-counting activities pending completion of certification reevaluations.
What remains to be seen is how agencies will establish future DBE goals under the revised certification framework, particularly if the number or composition of eligible businesses changes.
For firms pursuing transportation and infrastructure work, this raises practical questions about subcontractor availability, teaming arrangements, and procurement planning. Organizations that have historically relied on established DBE participation strategies may need to revisit those approaches as agencies issue updated solicitation requirements.
New York’s Compliance Environment Requires Additional Attention
The situation in New York is particularly complex because the federal DBE program operates alongside separate state and local business participation programs.
A transportation project receiving USDOT funding may be subject to federal DBE requirements, while another publicly funded project may be governed by New York State or New York City MWBE requirements. The Port Authority also administers participation programs whose requirements must be evaluated according to the applicable contract and governing authority.
Changes to the federal DBE program do not automatically eliminate separate state or local MWBE obligations.
For contractors working across multiple agencies, it is important to understand which requirements apply to each project rather than assume that a change in one program affects all participation commitments.
As of October 2026, USDOT’s published reevaluation status directory identifies New York and New Jersey as having completed their Unified Certification Program reevaluations. This makes verification of current certification status and agency-specific implementation guidance particularly important for organizations operating in the region.
For larger firms, the challenge is ensuring that procurement, project management, and compliance teams are working from the same information. A subcontractor’s eligibility, the applicable participation requirements, and the documentation needed to demonstrate compliance should be clearly understood before decisions are made that could affect project delivery.
Build America, Buy America: Compliance Obligations Continue Beyond DBE
While the DBE changes have attracted considerable attention, they represent only one part of the federal infrastructure compliance environment.
The Build America, Buy America Act (BABA), enacted through the Infrastructure Investment and Jobs Act, establishes domestic sourcing requirements for certain iron, steel, manufactured products, and construction materials used in federally assisted infrastructure projects.
These requirements are separate from DBE certification and participation goals. They continue to apply to covered projects, subject to the applicable federal agency regulations and waivers.
For infrastructure owners and prime contractors, compliance requires attention to procurement specifications, material sourcing, supplier documentation, and contract administration. Depending on the project, organizations may need to demonstrate that covered materials satisfy domestic production requirements and maintain the records necessary to support those determinations.
There are also implications for smaller businesses seeking to participate in infrastructure contracting.
A company may have the technical capability and competitive pricing necessary to perform work but still face challenges if it does not understand the documentation, sourcing, or certification requirements associated with a particular procurement. Conversely, businesses that can demonstrate compliance with these requirements may be better positioned to compete for opportunities where contractors need reliable, qualified suppliers.
For larger organizations, the lesson is that a reduction in one category of participation requirements does not necessarily reduce the overall complexity of infrastructure compliance. The responsibility to understand and manage the full range of contractual and regulatory obligations remains.
Preparing for an Evolving Regulatory Environment
Federal procurement policies and compliance requirements have changed over time, and it is reasonable to expect that additional changes may occur through future rulemaking, court decisions, or shifts in federal policy.
For organizations managing long-term infrastructure contracts, this creates a challenge. Projects frequently extend across multiple years and, in some cases, multiple administrations. The requirements in place when a contract is awarded may not be identical to those governing its administration several years later.
That reality makes consistent compliance management particularly important.
Organizations should have a clear understanding of the requirements governing each contract, maintain accurate records of subcontractor participation and certification status, and document the basis for procurement and compliance decisions. Equally important is ensuring that changes in federal or agency guidance are communicated to the individuals responsible for implementing those requirements.
These practices are relevant well beyond DBE participation. Prevailing wage compliance, workforce reporting, domestic sourcing, subcontractor payments, and other contractual obligations all require the same level of attention.
The objective should not be to anticipate every possible regulatory change. It should be to establish the systems, documentation, and institutional knowledge necessary to respond when those changes occur.
The JKA Perspective
At Jean Kristensen Associates, our experience supporting major infrastructure programs has reinforced the importance of treating compliance as an integral part of project management rather than an administrative function addressed after decisions have already been made.
Our work on the JFK redevelopment and other public-sector engagements has given us firsthand experience with the challenges organizations face when managing complex contractual requirements, subcontractor relationships, and reporting obligations.
More recently, JKA was selected to support LA Metro’s DBE Technical Assistance Program, extending our work in the transportation sector and providing another opportunity to help businesses navigate government contracting requirements.
As the federal DBE program continues to evolve, we believe the most important consideration for infrastructure owners, engineering firms, construction managers, and prime contractors is maintaining a clear understanding of their obligations and the potential exposure associated with changes in regulatory requirements.
Organizations should be evaluating not only whether their current practices satisfy today’s requirements, but whether their compliance systems are sufficiently reliable to withstand future changes in policy, oversight, and enforcement.
Regulations may change, but the responsibility to understand contractual obligations, maintain accurate documentation, and demonstrate compliance does not disappear. For organizations managing major infrastructure investments, that responsibility should remain a priority regardless of the regulatory environment.
About Jean Kristensen Associates, LLC
Jean Kristensen Associates is a management consulting firm specializing in infrastructure compliance, strategic advisory services, program implementation, and government contracting. JKA supports public agencies, infrastructure owners, engineering firms, and contractors in managing compliance obligations, strengthening operational practices, and supporting effective project delivery.
This article provides general regulatory and operational information and does not constitute legal advice. Organizations should consult applicable agency guidance and contract provisions when evaluating specific obligations.
