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Most contractors were familiar with goals that required the utilization of a certain percentage of disadvantaged business enterprise contractors for most Oregon public improvement projects. Since October 2025, however, state agencies have paused requiring the use of DBEs for federally funded projects. This is because the U.S. Department of Transportation (USDOT) issued an emergency rule that prohibited the use of DBEs for federally funded projects. Here is what contractors can expect the future of the DBE program to look like.

What is the DBE program?

The , or 鈥淒BE,鈥� was first enacted by statute in 1983 to ensure that at least 10 percent of USDOT鈥檚 annual budget (now several billion dollars) for federal assistance is provided to small businesses owned and controlled by socially and economically disadvantaged individuals.

The program, amended in 1987 to include women, presumed certain groups of individuals to be disadvantaged based on race and sex. State and local transportation agencies carry out the goals of the federal DBE program under the guidance and rules set forth in the Code of Federal Regulations ().

Recipients of USDOT federal assistance (e.g., the Oregon Department of Transportation) are required to establish goals for the participation of certified DBEs and then evaluate their contracts throughout the year to ensure that subcontracts are awarded to disadvantaged businesses. These goals act as safeguards against discrimination practices in federal assistance for transportation projects.

Small businesses and those owned by minorities or women can apply through their own state for DBE certification. The (COBID) is the office in which Oregon businesses may apply for DBE certification.

It is important to distinguish the DBE program from state programs that are implemented via state law, despite having similar requirements to the DBE program. The federal DBE program is required for federally funded transportation projects.

What changes were made?

On Oct. 3, 2025, USDOT issued an (IFR) that removed the presumption that businesses owned by women or minorities are disadvantaged for the purpose of DBE certification. Effective immediately, all businesses under the DBE program were decertified, and the state certifying agencies were required to recertify DBEs based on individual instances of discrimination, not based on gender or race.

This change was prompted by Mid-America Milling Company, LLC v. United States Department of Transportation. The U.S. District Court for the Eastern Division of Kentucky ruled that presumptions of disadvantage based on gender and race were unconstitutional under the Equal Protections Clause of the Fifth Amendment. The court stated that these presumptions resulted in unequal treatment as other individuals do not benefit from that presumption.

USDOT issued the IFR on Oct. 3 to remove the race and sex-based presumptions under the DBE program regulations set forth in 49 CFR, part 26. This change went into effect on Oct. 3 and immediately invalidated portions of a DBE program that is dependent on presumptions of disadvantage and DBE goals.

How are projects in Oregon affected?

The Oct. 3 IFR had the of decertifying all previously certified DBEs and suspending DBE goals for active and new projects.

The guidance provided by USDOT to state and local agencies stated that 鈥淯nified Certification Programs (UCPs) may not use race-based or sex-based presumptions in determining DBE/ACDBE eligibility.鈥� The applicant must 鈥渄emonstrate on a case-by-case basis that the individual meets the criteria described in 49 CFR 搂 26.67.鈥� Businesses that could not meet those requirements were to be decertified.

Until the UCPs completed the reevaluation process to recertify or decertify businesses as outlined in 49 CFR 搂 26.67, a UCP may not include DBE contract goals or count participation toward overall DBE goals.

Oregon has been at the forefront of revising its DBE certification process considering USDOT鈥檚 new changes. However, despite Oregon鈥檚 efforts to create a new process to certify businesses, the DBE program is still suspended pending USDOT approval. At the time of writing, all state programs are still suspended.

What does it mean for Oregon contractors?

For Oregon contractors, this prompted an immediate need to recertify with COBID. This re-certification period was open from November 17, 2025, to January 15, 2026 (and new applications are available for businesses that missed this window).

Recertification now requires each qualifying business to submit a personal narrative that states with specificity incidents in which the individual experienced a social or economic disadvantage or discrimination.

This process, though more arduous, allows for disadvantaged businesses that did not previously qualify for the presumption to apply for certification. Examples of new opportunities include white-owned businesses where the majority ownership is physically disabled and requires accommodations (e.g., visual or physical impairments). Other examples include economically disadvantaged business owners (e.g., those in generational poverty) where lack of financial knowledge created barriers to access. The previous presumptions may have deterred these businesses from applying, though certification was always available.

Who now qualifies as a DBE?

Qualifying business owners must still meet the previously existing financial requirements (see 49 CFR 26.65, 49 CFR 26.68 and ). Now personal narrative statements must be provided by the owner(s) of at least 51 percent of the business.

The personal narratives should explain situations in which business owners personally experienced discrimination, whether social or economic. There no longer is a presumption of disadvantage because of race or gender. These experiences can have occurred at any point in a business owner鈥檚 life.

Contractors with questions about the DBE program and the certification process should consult a lawyer who is experienced in government contracting.鈥�

Sarah Jones is an associate in the Portland office of Schwabe, Williamson & Wyatt. Contact her at 503-796-2877 or [email protected].

Paige Spratt is a shareholder in the Vancouver, Washington office of Schwabe, Williamson & Wyatt. Contact her at 360-905-1433 or聽[email protected].

This column is intended to provide readers with general information and not legal advice. Consult professional counsel for help regarding specific situations.

The opinions, beliefs and viewpoints expressed in the preceding commentary are those of the authors and do not necessarily reflect the opinions, beliefs and viewpoints of the Daily Journal of Commerce or its editors. Neither of the authors nor the 91视频 guarantees the accuracy or completeness of any information published herein.