The Federal Program That Opened $40 Billion in Construction Contracts Has Been Suspended. Here Is What That Means for Hispanic Contractors.

Hispanic Construction Council | June 10, 2026

On October 3, 2025, the U.S. Department of Transportation published an Interim Final Rule that effectively shut down the Disadvantaged Business Enterprise program for every certified firm in America. Six months later, the program remains suspended with no mandated timeline for restoration. On March 31, 2026, the court case that had offered a potential legal reversal was declared moot. The only remaining path to restoring access is Congress.

HCC's second national research study, Shut Out, documents what happened, who it has affected, and what federal policymakers can do now.

What the DBE Program Was Built to Do

The federal DBE program has existed since 1987. It required recipients of federal highway, transit, and airport funding to set goals for DBE participation and take affirmative steps to ensure certified firms could compete. The federal government channels approximately $40 billion annually in transportation contracts through this program.

The program was built on a documented premise: small businesses owned by socially and economically disadvantaged individuals were systematically excluded from federally funded contracts, not because of capability, but because of how contracts were structured and bid. Six groups were identified for presumptive eligibility, including Hispanic Americans. That presumption meant firms owned by members of those groups could be certified without individually proving the disadvantage their communities had already documented collectively.

For Hispanic-owned construction firms, the DBE program was a partial but meaningful access mechanism. Hispanic workers represent 34 percent of the U.S. construction labor force. The construction sector has the highest concentration of Hispanic-owned businesses of any industry in the country. Yet despite that workforce presence, structural barriers rooted in capital access, bonding requirements, and bid pool structures had already produced a documented gap: Hispanic-owned firms capture approximately 7.1 percent of total construction industry revenue against a 34 percent labor force share. The DBE program did not eliminate that gap. It created an alternative entry point for federally funded transportation work.

That entry point was suspended on October 3, 2025.

What the October 2025 Rule Did

The DOT's Interim Final Rule eliminated the rebuttable presumption of social and economic disadvantage for all six covered groups. Every Hispanic-owned firm that held DBE certification was required to undergo individual reevaluation before any DBE goal could be set or any participation could be counted on a new federal contract. The rule established no deadline for completing that process, requiring only that states proceed "as quickly as practicable."

The practical effect was immediate. DBE goals on new federal transportation solicitations were zeroed. States lost the authority to set participation requirements or count DBE commitments on procurements in progress. The approximately 53,500 certified DBE firms nationwide -- all required to reapply individually -- entered a holding period with no defined end.

State timelines illustrate the scope. Wisconsin did not begin accepting recertification applications until February 16, 2026, more than four months after the rule took effect. As of April 2026, Wisconsin had no published completion date. California launched its reevaluation process in late 2025 with no target date. Connecticut moved faster than most states. No national completion timeline exists.

Contractors have reported weekly solicitation volume dropping from more than 30 bids per week to one or two. Firms that built their operations around DBE-designated bid pools are now competing head-to-head for general solicitations against larger, better-capitalized contractors in a market where the access structure they entered no longer exists for new contracts.

The Litigation Path Is Closed

For months after the IFR took effect, contractors and advocates monitored the courts for a potential judicial reversal. On March 31, 2026, that monitoring ended. The court case that had catalyzed the DOT's administrative action was declared moot following the IFR's publication.

The mootness ruling did not vindicate or invalidate the group-based presumption. It simply closed the case without a ruling on the merits. The prior standard did not survive; it ceased to exist as a litigated question. The DBE program's future is now a legislative question, and the Interim Final Rule is permanent federal policy until Congress acts.

The Compounding Problem

Hispanic contractors affected by the DBE suspension are not facing it in isolation. HCC's Shut Out study documents that the states with the highest concentrations of Hispanic-owned construction firms -- Texas, California, Florida, and North Carolina -- are simultaneously experiencing workforce disruption tied to immigration enforcement activity. Construction lending in South Texas declined approximately 30 percent over the past year. These firms are managing workforce disruption, financing contraction, and the simultaneous loss of their primary access path to federal contracts.

Three Actions Congress and the DOT Can Take Now

HCC's Shut Out study identifies three specific policy actions that would reduce harm without reversing the IFR's core requirements:

1. Establish a statutory deadline for reevaluation completion. Congress has the authority to set a deadline, such as 12 months from the rule's effective date, for state UCPs to complete reevaluation. For firms with ten or more years of DBE certification and no fraud findings, Congress should authorize interim participation at reduced goal levels pending completion. A decade of clean participation is material evidence of standing.

2. Activate race-neutral small business participation programs. The DBE program's suspension created a federal contracting vacuum. Federal highway and transit agencies should issue guidance actively encouraging state recipients to deploy race-neutral small business participation mechanisms during the reevaluation period. Many states suspended all small business participation goals when the DBE rule changed; available race-neutral tools were not activated.

3. Require monthly public reporting on reevaluation progress. No federal data source currently tracks how many firms have completed reevaluation, how many have been recertified or decertified, or where the largest backlogs are. Monthly public reporting by state, by owner demographics, and by firm revenue band would bring accountability to a process that currently has no external check on its pace.

Read the Full Study

Shut Out: How the Federal DBE Program Suspension Is Cutting Hispanic Contractors Off From $40 Billion in Annual Contracts is HCC's second national research report. The full study is available at hispanicconstructioncouncil.com/research/dbe-program-suspension-2026.

HCC will continue tracking DBE reevaluation progress through the NXT Infrastructure Database and this national research series. The next full update on federal contracting access for Hispanic construction firms will appear in the 2026 State of Hispanics in Construction Report.

Source notes: HCC Shut Out national study, April 2026. Federal Register, Vol. 90, No. 191, Document 2025-19460 (October 3, 2025). U.S. Census Bureau Annual Business Survey, November 2025. Bureau of Labor Statistics Current Population Survey, 2025. Daily Reporter, March 31, 2026 (mootness ruling). Wisconsin DOT, February 2026. HCC Capacity Gap national study, April 2026. Federal Reserve Bank of Dallas, construction lending data, 2026.