The Federal Highway Administration (FHWA) has provided updated guidance on the Disadvantaged Business Enterprise (DBE) program following recent legal challenges. 

The guidance, issued on November 18, 2024, addresses confusion stemming from a federal judge’s expanded preliminary injunction that impacts certain aspects of the program.

The injunction, clarified in late October, mandates that federally assisted contracts in specific circumstances must have DBE goals set to zero percent. This applies to contracts identified by plaintiffs in a lawsuit challenging the DBE program. 

As of now, the plaintiffs have identified contracts in nine states, including Illinois, Indiana, and Virginia, but the list of affected states could grow. A total of 25 states have been flagged as places where plaintiffs may operate or bid on contracts, including Florida, Texas, and Pennsylvania.

Under the injunction, once plaintiffs identify a specific contract, the state must reduce its DBE goal for that project to zero percent. Despite this adjustment, states remain obligated to make a good faith effort to meet overall DBE goals. If states fall short, they must conduct a shortfall analysis and implement corrective measures.

Contracts outside the scope of the litigation will continue operating under standard DBE regulations, including setting and meeting contract-specific DBE goals.

The DBE program faces significant uncertainty as the legal battle unfolds. The FHWA has committed to issuing further guidance as the situation moves ahead, making sure states and stakeholders remain informed about the program’s shifting requirements.