Statutory Foundation

Two federal programs govern participation by disadvantaged businesses in airport-related contracts and concessions: the Disadvantaged Business Enterprise (DBE) program and the Airport Concessions Disadvantaged Business Enterprise (ACDBE) program.

The DBE program is codified at 49 CFR Part 26. It applies to contracts funded with federal financial assistance from the Department of Transportation, including airport construction and professional services contracts funded through the Airport Improvement Program (AIP). Under § 26.21(a)(3), an FAA recipient that receives grants for airport planning or development must maintain a DBE program if it will award prime contracts with a cumulative total value exceeding $250,000 in FAA funds in a federal fiscal year.

The ACDBE program is codified at 49 CFR Part 23. It applies to airport concession activities—food and beverage, retail, car rental, parking, and other services provided to the public at the airport. The statutory authority for ACDBE is 49 U.S.C. § 47107(e), which conditions AIP grant eligibility on assurances that the airport operator will maintain an ACDBE program. The ACDBE program applies to all primary airports that have received federal funds authorized for airport development after January 1, 1988.

Both programs were updated by a DOT final rule published April 9, 2024 (effective May 9, 2024), which modernized eligibility thresholds and certification procedures. Both programs were then amended by an Interim Final Rule (IFR) published October 3, 2025, which eliminated race- and sex-based presumptions of disadvantage. The October 2025 IFR is discussed in detail below.

DBE vs. ACDBE: Scope and Applicability

The two programs address different categories of airport spending:

A firm certified as a DBE under Part 26 is presumed to meet the size, disadvantage, ownership, and control requirements for ACDBE certification under Part 23. The certifying agency must verify only that the firm's owner meets the Part 23 personal net worth (PNW) cap and that the disadvantaged owner can control the firm with respect to concession activities.

Certification Eligibility

To be certified as a DBE or ACDBE, a firm must meet three categories of requirements.

Ownership and Control

The firm must be at least 51% owned by one or more individuals who are socially and economically disadvantaged. In the case of a corporation, 51% of the stock must be owned by such individuals. The disadvantaged owners must also control the management and daily business operations of the firm.

Size Standards

The firm must qualify as a small business. For the DBE program on FHWA- and FTA-assisted contracts, a firm's average annual gross receipts (3-year average, including affiliates) may not exceed $31.84 million as of March 1, 2025. For FAA-assisted contracts, the applicable size standard is the SBA's NAICS code-specific standard only.

For the ACDBE program, the general size standard is $56.42 million in average annual gross receipts (5-year average). Passenger car rental companies have a separate threshold of $75.23 million (3-year average), and banks and financial institutions must have assets below $1 billion.

Social and Economic Disadvantage

Following the October 3, 2025 IFR (discussed in full below), all applicants must affirmatively demonstrate social and economic disadvantage (SED) based on their individual experiences, without regard to race or sex. The previous framework, under which members of designated racial and ethnic groups were rebuttably presumed disadvantaged, has been eliminated.

In addition, each disadvantaged owner's PNW may not exceed $2,047,000. This threshold was raised from $1,320,000 effective May 9, 2024. The calculation excludes the owner's equity in the applicant firm, equity in a primary residence, and retirement account balances. DOT will adjust the PNW cap by May 9, 2027 based on Federal Reserve household net worth data.

The Unified Certification Program (UCP)

DBE and ACDBE certification is administered through Unified Certification Programs (UCPs). Each state has a UCP—a consortium of DOT recipients within that state (typically the state DOT, transit agencies, and airport operators) that jointly processes certification applications. A firm certified by one UCP may seek certification in other states through interstate certification procedures at 49 CFR § 26.85. UCPs maintain online directories of certified DBE and ACDBE firms, searchable by work codes and geographic area.

Goal Setting: The Two-Step Methodology

DBE Goals (Part 26)

Under § 26.45, each recipient with a DBE program must set an overall goal for DBE participation in its DOT-assisted contracts. Goals are set triennially and submitted to the appropriate DOT operating administration (for airports, the FAA) for review and approval.

The goal must reflect the level of DBE participation the recipient would expect absent the effects of social and economic disadvantage. Quotas and set-asides are prohibited. The regulation explicitly provides that recipients are "neither authorized nor required to set overall or contract goals at the 10 percent level, or any other particular level" and may not rely on the 10% national aspirational goal, previous goals, or past DBE participation rates without reference to local market availability.

The goal-setting methodology follows a two-step process:

Step 1—Base Figure. Determine the relative availability of DBEs in the local market. Approaches include comparing the number of ready, willing, and able DBEs in the DBE directory to the total number of comparable firms using Census Bureau County Business Patterns data; using a bidder's list; or using a disparity study.

Step 2—Adjustment. Adjust the base figure based on additional evidence, including historical DBE participation, the capacity of DBEs to perform work, and information from public consultation. The result is the overall triennial goal.

ACDBE Goals (Part 23)

Airport operators with ACDBE programs set two separate overall goals:

1. Non-car-rental concessions (food and beverage, retail, news/gift, duty free, advertising, management contracts, etc.)—required if average annual concession revenues over the preceding three years exceed $200,000.
2. Car rental concessions—required if average annual car rental concession revenues over the preceding three years exceed $200,000.

The goal-setting methodology parallels the two-step DBE process. Published goal-setting examples are available through airport authorities. Cincinnati/Northern Kentucky International Airport (CVG) established ACDBE goals for car rental and non-car-rental concessions in its published ACDBE goal-setting document (FFY 2024–2026). San José Mineta International Airport (SJC) conducted its public consultation process and published goal documents, available through the airport's accessibility portal.

Car Rental ACDBE Obligations

Car rental companies present a unique compliance structure. Under 49 U.S.C. § 47107(e)(4)(C), a car rental company "cannot be required to change its corporate structure to provide for direct ownership arrangements with ACDBEs to meet its ACDBE goal." However, by statute, each car rental company must make a good faith effort to meet its individual ACDBE goal by exploring all available options, including the purchase or lease of goods and services from ACDBE vendors—such as vehicle purchases, repair services, insurance, janitorial services, and management commissions.

Good Faith Efforts

When a concessionaire or contractor does not meet its applicable DBE or ACDBE goal, the firm must demonstrate that it made adequate good faith efforts. The airport evaluates the quality, quantity, and intensity of those efforts. Under 49 CFR § 23.47 and § 26.47, firms must document outreach and solicitation activities to demonstrate good faith compliance.

Good faith effort documentation may include:

• Evidence of outreach to certified DBE/ACDBE firms
• Records of solicitations, bid packages, and follow-up communications sent to DBE/ACDBE firms
• Documentation that scopes of work were structured to facilitate DBE/ACDBE participation
• Identification of specific subcontracting or supply opportunities made available
• Records of negotiations with DBE/ACDBE firms, including reasons for non-selection

Failure to meet a goal is not, by itself, grounds for disqualification from a concession award—but failure to demonstrate good faith efforts is.

Prompt Payment

Both the DBE and ACDBE regulations include prompt payment requirements at 49 CFR § 26.29. Airport operators receiving DOT financial assistance are required to implement mechanisms ensuring that:

1. Prime contractors pay subcontractors for satisfactory performance no later than 30 days from receipt of each payment made to the prime contractor.
2. Prime contractors pay full retainage to subcontractors within 30 days after the subcontractor's work is satisfactorily completed.

The FAA publishes annual Prompt Payment Complaint Assessment Reports.

The October 2025 Interim Final Rule

On October 3, 2025, DOT published an Interim Final Rule (IFR) that constitutes the most consequential change to the DBE and ACDBE programs since their establishment. The IFR amends both 49 CFR Part 23 and 49 CFR Part 26.

Background

The IFR followed constitutional challenges to the race-based presumption of disadvantage, including Mid-America Milling LLC v. United States Department of Transportation (E.D. Ky., Case No. 23-cv-00072), in which the court signaled that automatic presumptions of disadvantage based on race may not withstand Fifth Amendment scrutiny. DOT concluded that the rebuttable presumption was unconstitutional and issued the IFR without waiting for a final court order or Congressional action.

Key Changes

Elimination of race- and sex-based presumptions. The IFR eliminates the longstanding provision under which members of designated racial and ethnic groups and women were rebuttably presumed to be socially and economically disadvantaged. Under revised § 26.67(a), all applicants must now affirmatively demonstrate SED "based on their own experiences and circumstances within American society, and without regard to race or sex."

Personal Narrative (PN) requirement. Each applicant must submit a PN that establishes the existence of disadvantage "by a preponderance of the evidence based on individualized proof regarding specific instances of economic hardship, systemic barriers, and denied opportunities that impeded the owner's progress or success in education, employment, or business, including obtaining financing on terms available to similarly situated, non-disadvantaged persons." The PN must also state how and to what extent those impediments caused economic harm.

Mandatory reevaluation of all currently certified firms. Under new § 26.111, each UCP must reevaluate all currently certified DBEs and ACDBEs for which it is the jurisdiction of original certification, recertify those that meet the new standards, and decertify those that do not. No deadline has been established for completion—the regulation provides that UCPs should complete reevaluation "as quickly as practicable."

Suspension of goal-setting and counting during reevaluation. Until a recipient's UCP completes the § 26.111 reevaluation, the recipient may not:

• Set DBE or ACDBE contract goals
• Count any DBE or ACDBE participation toward contract or overall goals
• Require Uniform Report submissions
• Include concession-specific ACDBE goals in new RFPs, RFQs, or similar solicitations

This suspension applies equally to participation obtained through DBE-neutral means.

Treatment of existing contracts. Contracts executed before October 3, 2025 need not be canceled. However, DBE participation on such contracts cannot be counted toward goals until the UCP completes reevaluation. If, after reevaluation, a DBE on an existing contract is not recertified, "the recipient will be required to take appropriate action to discontinue the effect of the unconstitutional certification." DOT has stated that if a recipient does not take appropriate action, DOT will not make any payments with respect to that contract.

Projects in procurement pipeline. For projects advertised but not yet let (bids not yet opened), recipients must issue amendments removing DBE contract goals. For projects let but not yet awarded, recipients must zero out the DBE goal. DOT has stated recipients may amend without readvertising, though each recipient must determine whether state law requires recompetition.

Terminology change. The IFR replaces "race-neutral" and "race-conscious" with "DBE-neutral" and "DBE-conscious" throughout both regulations.

What Remains Unchanged

The structural framework of the DBE and ACDBE programs remains intact under the IFR:

• The two-step goal-setting methodology at § 26.45
• The prohibition on quotas and set-asides
• Prompt payment requirements at § 26.29
• Good faith effort standards
• The UCP certification structure
• PNW cap ($2,047,000) and size standards
• Ownership and control requirements
• Small business element requirements at § 26.39 (recipients may implement race- and sex-neutral small business set-aside programs)

Implications for Airport Capital Programs and Concession Procurement

The October 2025 IFR creates several operational considerations for airport finance and procurement functions:

Capital program procurement timing. The suspension of DBE goals and counting during the UCP reevaluation period means that federally assisted construction and professional services solicitations issued during this period will not carry DBE contract goals. For airports with active AIP-funded capital programs, the timing of the local UCP's completion of reevaluation affects when DBE provisions are reinstated in bid documents.

Concession solicitations. Following the October 2025 IFR, recipients must set concession-specific ACDBE goals to zero on new RFPs, RFQs, and RLIs during the UCP reevaluation period. For airports in the process of re-competing concession packages, this changes the competitive evaluation framework until reevaluation is complete.

Program plan updates. Recipients must amend their DBE and ACDBE program plans "as soon as practicable" after their UCP completes reevaluation. Any plan provision dependent on race- or sex-based presumptions "is no longer valid" as of October 3, 2025.

Small business programs as alternative. DOT has confirmed that recipients may implement race- and sex-neutral small business enterprise programs—including small business set-asides—under § 26.39. Eligibility for such programs cannot be based on race or sex.

Sources and Further Reading

• 49 CFR Part 23, Participation of Disadvantaged Business Enterprise in Airport Concessions
• 49 CFR Part 26, Participation by Disadvantaged Business Enterprises in DOT Programs
• 49 U.S.C. § 47107, Project Grant Application Approval Conditioned on Assurances
• DOT IFR, October 3, 2025 (90 FR 80736)
• DOT IFR FAQs, Updated December 1, 2025
• FAA, Airport Disadvantaged Business Enterprise Program
• DOT, DBE/ACDBE Size Standards
• DOT, Personal Net Worth Cap
• DOT, DBE Goal Setting