DOT Announces A Major Policy Shift For Disadvantaged Business Enterprise Programs

The U.S. Department of Transportation (DOT) issued an interim final rule on Oct. 3 that changes the Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) programs. The new rule, which applies to recipients of certain federal funding from DOT, reflects a fundamental shift in decades of federal policy. Effective immediately, the interim final rule removes race and sex-based presumptions from the definitions of "socially and economically disadvantaged individual." Now, the owner of a business benefitting from these programs must demonstrate on a case-by-case basis that he or she meets certain factors identified in the new rule.

Before we discuss those factors, it is important to explain how we got here. The Fourteenth Amendment to the U.S. Constitution guarantees equal protection of the laws to all persons. This means that both racial classifications and sex-based classifications are presumptively invalid. Yet, history