On October 3, 2025, the U.S. Department of Transportation (USDOT)’s Interim Final Rule (IFR) on the Disadvantaged Business Enterprise (DBE) and Airport Concessions DBE (ACDBE) programs officially took effect.
The Maryland Department of Transportation (MDOT) has now issued formal guidance explaining what this rule means for Maryland contractors — and, equally important, what it does not mean.
Below is a summary in plain language to help you understand how to navigate this transition and what to expect in the coming months.
What the USDOT Rule Means
1. Race- and Gender-Based Presumptions Are Removed
The new federal rule eliminates automatic presumptions of social and economic disadvantage based on race or gender in the DBE and ACDBE programs.
Every applicant — including those currently certified — must now demonstrate disadvantage on an individual, case-by-case basis.
2. All DBE and ACDBE Firms Will Be Re-Evaluated
MDOT and its Unified Certification Program (UCP) partners must reassess every certified DBE and ACDBE to determine eligibility under the new standards.
This process will take time and will require firms to provide new documentation and personal narratives demonstrating disadvantage.
3. No New DBE/ACDBE Goals for Federally Funded Contracts (For Now)
Until the re-evaluation process is complete, DBE and ACDBE participation goals will not be enforced on federally funded contracts in Maryland.
MDOT will not set new goals or monitor participation on active federally funded contracts during this transition period.
4. Existing Contracts Stay in Place
Current federally funded contracts remain valid and enforceable.
DBE and ACDBE subcontractors should not be removed from active projects. Prime contractors and consultants must honor existing subcontracts in accordance with contract terms, nondiscrimination law, and Maryland contract law.
5. Prime Contractors Still Have Obligations
Even though new goals are paused, nondiscrimination, fair dealing, and good-faith efforts remain in effect.
Contractors should continue to treat all subcontractors — DBE, MBE, or otherwise — fairly and document outreach and engagement efforts.
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What the USDOT Rule Does NOT Mean
1. Maryland’s Minority Business Enterprise (MBE) Program Is Not Affected
Maryland’s state MBE program — which applies to state-funded construction and procurement — remains fully in force.
The new federal rule applies only to federally funded contracts under the USDOT’s authority.
State-funded projects let by DGS, USM, the IAC (school construction), and other agencies will continue to operate under the existing MBE program requirements.
2. Certified DBEs Are Not Automatically Decertified
Current DBEs and ACDBEs remain certified until MDOT completes its formal re-evaluation process.
No firm has lost certification simply because the rule took effect. Firms will have the opportunity to submit documentation to demonstrate eligibility.
3. Contracts Will Not Be Canceled or Invalidated
The rule does not retroactively change existing contracts.
All current agreements — including those involving DBE subcontractors — must be fulfilled according to their terms.
4. This Is Not the End of Maryland programs that address minority businesses.
While the federal framework has changed, Maryland and many other states are expected to continue pursuing inclusion and equity goals through constitutionally sound means.
For contractors, this means the values of diversity and opportunity remain, even if the legal definitions shift.
What MWBEs Should be doing now:
- Get Ready for Re-Evaluation
Gather personal and business financials, loan or bonding history, and examples of barriers or challenges you’ve faced.
MDOT will ask for this information during re-certification. - Update Your MDOT/OMBE Contact Info
Make sure your firm’s details are current so you don’t miss any notices. - Keep Pursuing State & Local Work
The MBE program remains in full effect for Maryland-funded projects. - Stay Connected
ABC will provide updates, templates for disadvantage narratives, and training sessions to help you through this process.
What Primes and Majority Subcontractors Should Be Doing Now:
- Identify Which of Your Contracts Receive Any Federal Funding
Only federally funded projects are immediately affected by the USDOT rule. State-only projects are not. - Continue to Honor Your Existing Subcontracts
Do not alter current agreements unless directed by the contracting agency. - Maintain Documentation
Keep records of outreach, solicitations, subcontractor selection, and payment activity. This will be essential if compliance questions arise later. - Support Your DBE Partners
Encourage certified firms to prepare for re-evaluation by gathering documentation and writing personal narratives describing their disadvantage. ABC will provide templates and guidance. - Stay Engaged with ABC Updates
We will continue to share new information from MDOT, USDOT, and the Governor’s Office of Small, Minority & Women Business Affairs (GOSBA) as it becomes available.
Bottom Line
This rule marks a major administrative shift — but it is not a dismantling of opportunity in Maryland’s construction industry.
The DBE program is being redesigned for constitutional compliance, not eliminated.
And Maryland’s state MBE program — which applies to most state and local building projects — remains unchanged at this time.
ABC Greater Baltimore will continue to advocate for clear, consistent implementation and ensure that both prime contractors and MBE/DBE firms understand their rights and obligations throughout this transition.
If you have questions about a specific project or subcontract, please reach out to us at mhenderson@abcbaltimore.org.