DBE Certification for Traffic Control Companies After the 2025 Rule Change

For many traffic control companies, DBE certification has been part of the business model. Flagging, device furnishing and lane closure work is a natural subcontract on federally assisted highway projects, and prime contractors bidding those projects have long looked for certified subcontractors to help meet contract goals.

On October 3, 2025, the rules under that model changed. The U.S. Department of Transportation issued an interim final rule that removed the race- and sex-based presumptions of disadvantage from the Disadvantaged Business Enterprise program, required every existing DBE to be reevaluated, and paused new DBE contract goals until each state's certification program finished that work.

This post explains what changed, where things stand as of September 2026, what the eligibility rules look like now, and what a traffic control company — certified, applying, or competing against certified firms — should do about it.

It is written as general information about how the program works. It is not legal advice. The program has changed quickly, state programs are at different stages, and further federal action is possible. For your own situation, talk to the Unified Certification Program in your state and to a lawyer who works on DBE matters.

What the DBE program is, briefly

The DBE program applies to recipients of U.S. DOT financial assistance — state DOTs, transit agencies and airports — and is governed by 49 CFR Part 26. Recipients certify eligible small businesses as DBEs, set overall goals for DBE participation, and on individual contracts may set contract goals that bidders meet by committing to use certified DBEs or by documenting good faith efforts.

Certification is done through a Unified Certification Program in each state, so a firm deals with one certifying body per state rather than with each agency separately.

For a traffic control company, the practical effect has been straightforward: on a federally assisted highway contract with a DBE goal, a prime bidding the job needs certified subcontractors or suppliers whose participation counts. Traffic control is frequently one of the scopes primes look to.

What the October 2025 interim final rule changed

The rule was published in the Federal Register as Disadvantaged Business Enterprise Program and Disadvantaged Business Enterprise in Airport Concessions Program Implementation Modifications, effective October 3, 2025. Its main changes, as summarized in the rule and in law firm analyses such as Greenberg Traurig's summary of the changes:

Presumptions removed. Previously, owners from certain groups were presumed socially and economically disadvantaged, and the burden was on others to rebut the presumption. That presumption is gone. The revised regulation at 49 CFR 26.67 states: "All applicants must demonstrate social and economic disadvantage (SED) affirmatively based on their own experiences and circumstances within American society, and without regard to race or sex."

Individual showing through a personal narrative. The owner must give the certifier a personal narrative that establishes disadvantage by a preponderance of the evidence, using individualized proof of specific instances of economic hardship, systemic barriers and denied opportunities that impeded the owner's progress in education, employment or business. The narrative must describe how and to what extent those impediments caused economic harm, and it must be accompanied by a current personal net worth statement.

Every existing DBE reevaluated. Each Unified Certification Program was required to reevaluate its currently certified firms under the new standard — recertifying those that meet it and decertifying those that do not. Decertified firms retain appeal rights.

Contract goals paused. Until a recipient's certification program completed the reevaluation, recipients could not set DBE contract goals on new contracts or count DBE participation toward goals. Prompt payment obligations continued throughout.

The scale was large. A July 2026 analysis by the consulting firm GCAP Services describes the rule as affecting approximately 41,000 minority- and women-owned businesses in the transportation industry.

Where things stand as of September 2026

States have moved at different speeds, and that is the most important practical fact for a traffic control company working in more than one state.

California is an example of a program that has completed the process. Caltrans' DBE reevaluation page describes the new, "significantly smaller" pool of recertified firms, and reports a proposed adjustment of its FHWA DBE goal for federal fiscal years 2027–2028 from 21.35 percent to 11.80 percent. With its database published, recipients in that state can return to setting contract goals on newly advertised contracts where appropriate.

Other states have set their own timelines, and some were still working through reevaluations during 2026. The only reliable source for your status in a given state is that state's Unified Certification Program.

Two consequences follow for anyone bidding public work:

• Goal-driven demand dropped during the pause. On contracts advertised without DBE goals, primes had no goal to meet, which removed one reason to choose a certified traffic control subcontractor.
• The pool is smaller where reevaluation finished. Where fewer firms were recertified, the certified firms that remain may be in greater demand when goals return — and goals themselves may be lower.

What the pause looks like from a traffic control estimator's desk

Consider how a single bid plays out. A prime is pricing a federally assisted resurfacing job and asks three traffic control companies for quotes, one of them certified.

Before the rule change, if the contract carried a DBE goal, the certified firm's quote had a value beyond its price: every dollar of its participation helped the prime meet the goal, and a prime that fell short had to document good faith efforts that an agency would review. A certified firm could sometimes win at a slightly higher price because of that.

During the pause, the same contract, advertised without a goal, turns into a straight comparison of price, capacity and reliability. The certified firm's advantage on that bid is gone, and the non-certified firms compete on equal terms.

When goals return in a given state, the picture changes again, but not necessarily back to where it was. The goal may be lower, the pool of certified firms may be smaller, and primes may have built relationships with non-certified subcontractors during the pause. None of that is a reason for a certified firm to panic or for a non-certified firm to relax. It is a reason for both to know which contracts carry goals, and to keep the rest of their bid competitive on its own merits.

Questions to put to your certification program

When you contact a Unified Certification Program, these questions get you a usable answer faster than "what is my status":

• Has my firm's reevaluation been completed, and what was the outcome?
• If it is pending, what documents do you still need from me, and by when?
• If I was decertified, what is the appeal process and deadline?
• Does my certification in this state affect my status in other states where I hold interstate certification?
• When does the program expect to publish its updated directory, and when will recipients resume setting contract goals?
• For my NAICS codes, what size standard applies to my work?

Write down the answers, the date and the name of the person you spoke with. Programs are busy, and a record of what you were told is worth having.

Eligibility, as the regulation now reads

Certification still rests on several separate tests. The social and economic disadvantage test changed the most, but the others still apply.

Size

Under 49 CFR 26.65, a firm must be a small business under the SBA size standards for its type of work, and it is not eligible if its affiliated average annual gross receipts over its previous three fiscal years exceed $30.72 million, the figure stated in the regulation as of March 1, 2024. Affiliates count, so a traffic control company that is part of a larger group is measured with the group.

Personal net worth

The regulation at 49 CFR 26.68 sets a personal net worth cap of $2,047,000. The owner excludes her share of equity in a primary residence to which she holds title and excludes assets in qualified retirement accounts, though those accounts must still be reported. The cap is adjusted periodically, so confirm the current figure.

Social and economic disadvantage

This is the test that changed. The personal narrative described above is now the core of it, and the burden is on the owner to prove disadvantage individually.

Ownership, control and independence

The disadvantaged owner must own the firm and control it — make the decisions, manage the operations, and not simply hold title while someone else runs the company. Certifiers look closely at who signs contracts, who manages crews and estimating, who controls bank accounts and equipment, and whether the firm depends on a single prime or on a non-disadvantaged individual. Traffic control companies that share yards, equipment, trucks or staff with a related company should expect scrutiny of that relationship.

What counts: commercially useful function

Certification is one question. Whether a DBE's participation counts toward a goal on a specific contract is another, and for traffic control firms it is where problems most often arise.

The regulation requires a DBE to perform a commercially useful function — meaning, in substance, that it is responsible for executing a distinct element of the work and actually performs, manages and supervises that work. Participation can be disallowed where a DBE is an extra participant through which funds are passed, or where the work is really performed by someone else's forces or equipment.

That matters in traffic control because the work is equipment-heavy and crew-heavy. Arrangements that deserve a careful look before you rely on them:

• A DBE that rents most of its devices and trucks from the prime, or from a related non-DBE company, for the job.
• A DBE whose flaggers are actually employed or directed by the prime.
• A DBE listed for a scope while a non-DBE firm performs the setup and maintenance.
• Supplier arrangements where the DBE's role is limited to invoicing.

Whether any particular arrangement meets the standard is a question for the agency and your certifier. The safer operating principle is simple: if you are listed for the work, do the work with your own people, your own equipment and your own supervision, and be able to prove it.

How goals and good faith efforts work when they apply

When a contract has a DBE goal, bidders must show how they will meet it. Under 49 CFR 26.53, the information a bidder provides includes the names and addresses of the DBE firms, a description of the work each will perform, the dollar amount of each firm's participation, written commitments, and written confirmation from each DBE. If the goal is not met, the bidder documents good faith efforts, including the DBE and non-DBE quotes it received. The regulation provides for this information to come with the bid or, under the timing it sets, no later than 5 days after bid opening.

Two things follow for a traffic control subcontractor:

Your quote may become evidence. In a good faith efforts review, subcontractor quotes can be examined. A clear, complete quote with an explicit scope, exclusions and pricing basis serves you whether you are the DBE or the non-DBE competitor. Our guide to exclusions and assumptions in traffic control proposals covers what that quote should contain.

Confirmation letters have deadlines. When a prime lists you, the confirmation it needs from you is time-sensitive. Have someone in the office who owns those requests.

Payment and records

DBE participation is tracked through payments, not intentions. Agencies collect reports of what primes actually paid DBE subcontractors, and prompt payment requirements continued through the reevaluation period.

For a traffic control company, that means the documentation discipline described throughout this site matters twice over: signed daily tickets that support each invoice, invoices that tie to the subcontract, and a payment history you can reconcile to what the prime reports. Our posts on getting paid faster and payment bond claims on public jobs cover the collection side.

What to do now

If you hold DBE certification

• Confirm your status in every state. Contact each Unified Certification Program where you are certified and find out whether you have been reevaluated, recertified or decertified, and what deadlines apply.
• Prepare the personal narrative carefully. It is now the center of eligibility. Specific, documented instances carry more weight than general statements.
• Keep your personal net worth statement current. And keep the supporting records.
• Tighten control documentation. Who signs, who estimates, who manages crews, whose equipment is on the job. If your operation shares resources with a related company, document the arrangement and its terms.
• Tell your primes where you stand. A prime that lists you and later learns your certification is not current has a problem it will remember.

If you are considering applying

• Read the current rule before investing the time. The standard is now individualized, and the narrative is the hard part.
• Check size and net worth first. Those are the fastest disqualifiers.
• Get the operational facts in order. Certifiers look at control and independence in practice, not just on paper.

If you compete against DBE firms

• Do not assume the old landscape. On contracts advertised without goals during the pause, the competitive field changed. Where goals return, they may be set differently.
• Compete on what the prime values anyway. Reliability, capacity, safety record, documentation and price win repeat work regardless of certification. Our post on winning repeat traffic control work covers that side.

For everyone

• Do not build the company on a single program. The 2025 change is a reminder that federal program rules move. A traffic control business that depends entirely on goal-driven subcontracts is exposed to exactly this kind of change.
• Keep your qualifications current. Prequalification, insurance, bonding and safety records matter to primes and agencies regardless of DBE status. See our guides to DOT prequalification and insurance and bonding.

Where software helps

Software does not make a firm eligible, and it cannot establish disadvantage. What it can do is make the operational facts that certifiers and agencies care about easy to prove: whose crews worked the job, whose equipment was deployed, what was billed, and what was paid.

In Traffic OS, equipment is tracked as company-owned units assigned to specific jobs, crew time is captured on a GPS time clock, daily tickets are signed on site and turn into invoices, and payments are recorded against invoices. That produces a clean record of who performed the work and with what — the record a commercially-useful-function review asks for. The features page lists what is included, pricing is flat per tier, and you can book a demo to see the ticket-to-invoice flow.

The bottom line

The DBE program still exists, but it works differently than it did before October 3, 2025. Disadvantage is now proven individually through a personal narrative, every certified firm has gone or is going through reevaluation, and contract goals returned only as each state finished. For traffic control companies, the practical steps are the same whether you hold certification or compete against those who do: know your status in every state, keep your operational records clean enough to prove who did the work, and build a business that wins on performance rather than on any single program.

Because this area is still moving, verify every requirement with the Unified Certification Program and the agency having jurisdiction before you rely on it.