The U.S. Department of Transportation published an Interim Final Rule (IFR) in the Federal Register on October 3, 2025, which updates 49 CFR Parts 23 and 26 governing the Disadvantaged Business Enterprise (DBE) and Airport Concession Disadvantaged Business Enterprise (ACDBE) Programs.
The IFR and the IFR Frequently Asked Questions (IFR FAQ) issued on October 24, 2025, require Caltrans to operate the DBE and ACDBE Programs in a constitutionally compliant, nondiscriminatory manner. It eliminates all race- and sex-based presumptions of disadvantage and replaces them with a strictly individualized determination standard. The California Unified Certification Program (CUCP) must reevaluate all DBE firms under the new criteria before their eligibility can be confirmed. Until the reevaluation is complete, DBE goals cannot be set on contracts, and no DBE participation may be counted toward any DBE goal.
Effective immediately, all Caltrans divisions, districts, and subrecipients must operate under these new federal requirements.
As a result of the program changes made by the IFR, on October 14, 2025, Caltrans Division of Local Assistance issued Office Bulletin 25-07 announcing DBE Contract Goal Setting, and DBE Monitoring and Compliance is suspended. The suspension excludes:
• Prompt payment for satisfactory performance (49 CFR §26.29(b); and,
• Termination provisions, i.e., a prime contractor or consultant cannot terminate a DBE or any portion of the DBE’s work listed without “good cause” and without prior written consent from Caltrans. (49 CFR §26.53(f)(3))
Visit the Caltrans Division of Local Assistance DBE website for more detailed information.
For questions regarding your LPA contracts, contact your District Local Assistance Engineer or DBE Coordinator.
For questions regarding certification, contact the Office of Civil rights at DBE.Compliance@dot.ca.gov.