REVIEW: Twenty hours to prove disadvantage, and Duffy’s rule bills 41,000 small firms

This is not a law

Friday, in the Federal Register

This is not a law. It is not a vote in Congress. It is not the end of the program, which the Department of Transportation still calls authorized and viable, according to the law firm PilieroMazza. It is not a surprise either. It confirms the interim rule of October 3, 2025. It is not even a major rule within the meaning of the statute, the department writes.

It is a final rule. Published in the Federal Register on Friday, September 25, 2026. In force the same day.

And it comes with a bill.

Twenty hours of a life

In 41,000 small businesses, someone has had to sit down and write out their life.

The department puts that work at 820,000 hours for 41,000 firms. Twenty hours each. Twenty hours to explain, with evidence, why you are disadvantaged.

For a small construction firm, 20 hours is two weeknights and a Saturday. It is the kitchen chair, the keyboard after dinner, the kids sent off to play somewhere else.

Twenty hours is the unit of measure of this rule.

What the rule promises in court

The end of a presumption

The Disadvantaged Business Enterprise program, or DBE, steers a share of the transportation contracts Washington funds toward firms judged socially and economically disadvantaged. Its cousin, the ACDBE, does the same for airport concessions.

Until October 2025, a firm owned by a woman or by a member of a minority was presumed disadvantaged. Its main hurdle was a cap on personal net worth. That cap still exists.

The interim rule of October 3, 2025, removed the presumption. The final rule removes it for good.

One owner, one case file

From now on, every owner must demonstrate their own disadvantage. A personal narrative. Evidence. At least one objective trait that sets them apart, PilieroMazza specifies.

The department received 637 comments. It kept the core of its rule.

The promise fits in one sentence. A program with no presumption based on race or sex, judged sturdier in court.

The department also stops collecting the race and sex data that fed those presumptions, the final rule says. So it will no longer be able to measure, on its own, whether firms owned by women or minorities are leaving the program. Or prove it. Or deny it.

The promise is legal. The bill is human.

My four tests

Four questions for one rule

A review stands or falls on its criteria. I set mine out before the verdict, so anyone can contradict me.

One. Who pays for the transition. Two. What the rule takes away, and from whom. Three. Whether the legal motive holds together. Four. The method.

And one principle: no party loyalty. The program was born in 1983, under Ronald Reagan, Engineering News-Record recalls. It is being undone under Donald Trump. Neither man is my side.

Other people’s hours

I stand with the small firms paying for this transition. Against the final rule signed by Transportation Secretary Sean P. Duffy and published on September 25, 2026. Because his own department puts the bill left to firms at $91.9 million, and calls the benefits that justify it non-quantifiable.

The department prices the costs. Not the benefits.

So the burden has a figure, and the gain has none.

A rule that prices only its costs admits who pays them.

Who pays: $91.9 million

Footnote 12

It is all in a footnote. The twelfth.

The total impact of the interim rule and the final rule, the department writes, comes to roughly $95 million in one-time transition costs. Of that, $91.9 million falls on firms, for their certification narratives. Another $3.4 million falls on certifying agencies. On top of that comes about $1.8 million a year in recurring costs.

Do the math. More than 96% of the transition bill lands on the firms.

Spread across 41,000 firms, that $91.9 million comes to about $2,240 each. For a small business, that is a payroll. Sometimes two.

Benefits without a number

The same footnote says these costs are more than offset by benefits it deems non-quantifiable. Constitutional compliance. An end to litigation risk. Better program integrity.

Maybe. But what gets weighed here is a figure against a claim. One can be checked. The other has to be believed.

And yet the department is not required to do better. It writes that no small-business impact analysis was required, since no proposed rule came first.

The cost has a dollar figure. The benefit has an adjective.

41,000 or 53,500

The department’s count

How many firms pay for those 20 hours? Even that number moves.

The department counts 41,000 firms to reevaluate. Its entire bill rests on that base.

The association of state transportation departments, AASHTO, wrote on November 3, 2025, that about 53,500 firms would need to be reevaluated, according to the Congressional Research Service.

The gap: 12,500 firms. Nearly one firm in four on the states’ count is missing from the federal one.

The states’ count

Texas alone had more than 7,000 firms in its directory in 2025, the same service notes.

The Small Business Administration’s 8(a) program, which went through the same reform in 2023, has 4,000 to 5,000 participants.

So Washington is applying to tens of thousands of firms a method the SBA had imposed on a few thousand. If the states’ count is right, the priced bill is too low.

The department does not say so.

A count that swings by 12,500 firms is no detail.

What the rule takes away

The Harrisburg table

The federal department does not publish how many firms have been dropped. Pennsylvania published its own count, on August 26, 2026.

As of October 3, 2025, 1,408 firms were certified there.

Of 1,408 firms, 431 had been reevaluated and were still eligible on August 26. Of 1,408 firms, 538 had not responded or had not filed a complete application. Of 1,408 firms, 155 had withdrawn on their own. Of 1,408 firms, 50 had been denied.

The table does not break down the rest.

Three in ten

Roughly three firms in ten remain on the list.

Non-respondents will be removed from the public directory, the Pennsylvania Department of Transportation writes. A denied firm must wait at least one year before applying again. A year outside the program.

Five hundred thirty-eight firms did not find their 20 hours. Or did not want to give them. Or had stopped believing.

The program remains authorized and viable, Washington says.

Viable on paper. Three in ten on the list.

The pause that emptied the crews

No goals, no counting

The interim rule held a clause few people read. Until a certifying agency finished its reevaluation, no contract goal could be set. No participation by a disadvantaged firm could be counted.

The aim, the department wrote, was to stop firms certified under the old standard from continuing to benefit from it.

And yet the interim rule set no end date for that pause. It only asked agencies to reevaluate as quickly as possible, the Congressional Research Service notes.

In Pennsylvania, goals will return only after federal approval of a new methodology, due no later than November 1, 2026. From October 3, 2025, to that approval, the pause will have lasted at least 13 months.

What the comments describe

In the comments summarized in the final rule, contractors describe what that pause did. In their account, it pushed general contractors to drop disadvantaged subcontractors from their teams.

The American Road and Transportation Builders Association, ARTBA, had already warned, according to the Congressional Research Service, that the rush risked delaying projects and driving up their cost.

For a general contractor, an administrative pause is a line crossed out. For a small firm, it is a contract that never comes.

They suspended the goal. The subcontractor got crossed out.

The legal motive holds

Mid-America Milling

Here is what cuts against my side, and I am writing it anyway.

In September 2024, a federal court in Kentucky ruled in the Mid-America Milling case that the racial presumption did not survive strict scrutiny, the Congressional Research Service reports. The record showed no specific intentional discrimination. The presumption had no end date. The one for women also lacked evidence.

The department then acknowledged, in a proposed consent order, that these presumptions violated equal protection under the law. That is an admission. It carries weight.

No place for a presumption

The final rule says it bluntly. Constitutional law leaves no room, it says, for presuming a person disadvantaged because she is a woman or a member of a minority.

A New Jersey contractors’ association, cited by the Congressional Research Service, goes further. In its view, the goals did not raise participation by disadvantaged firms and piled on bureaucracy.

That is true, and it does not change this: a sound motive does not decide who pays for the proof.

The law says why. It does not say at whose expense.

The method, without consultation

Rule first, comments later

The interim rule took effect on the day it was published, with no prior consultation, Engineering News-Record reported on October 9, 2025.

The comments came afterward. Six hundred thirty-seven of them. The final rule read them, then kept almost everything.

Six hundred thirty-seven comments for 41,000 firms. About one for every 64.

The department also acknowledges that the presumptions had been written by Congress. It invokes the executive’s duty to apply the laws in line with the Constitution.

Congress in the stands

In other words, a presumption written by Congress was removed by a rule. The constitutional motive may justify that. The method still leaves a hole: nobody in Congress ever had to vote on the transition, or on paying for it.

The program was created in 1983. The presumption fell one morning in October 2025, by publication.

Forty-two years on one side. One day on the other.

You can correct a law. You should not correct it in silence.

The sovereignty line

The exempt firms

The rule keeps one exception. Firms owned by tribes, Native Hawaiian organizations and Alaska Native Corporations are spared the personal narrative and the reevaluation.

The reason, the department writes: those businesses belong to sovereign entities, not to individuals. It cites consistency with the Small Business Administration and with the law that settled Alaska Native land claims.

A line that moves the border

A firm owned by a Native individual, by contrast, must follow the general rules, PilieroMazza notes.

So the dividing line no longer runs through race. It runs through the owner’s legal status.

On that criterion, the rule is consistent. I grant that. It distinguishes a nation from an individual, as American law has done for a long time.

And yet that consistency reveals one thing. The department knew how to draw a line when it wanted to.

A nation keeps its status. A woman rewrites her life.

Writing your wound for a form

What the rule asks

You have to write down the loan that was refused. You have to write down the bid you lost. You have to write down the remark you heard on a job site. You have to write it in the first person, with facts, and prove it.

The final rule now lets owners cite personal experiences of discrimination based on race or sex, PilieroMazza points out. That is a real correction.

What commenters answered

Commenters called it an invasion of privacy, the final rule reports. One supplier said that putting experiences of bias in writing risks reliving the trauma.

Women who own small firms will have a much harder time proving individual disadvantage, the Women’s Transportation Seminar had already warned, as cited by Engineering News-Record.

There is a question the rule never asks. How many owners opened the document, typed three lines, then closed the laptop?

Nobody counts those evenings.

Proving a wound costs hours. And silence.

What the final rule fixes

Dates, at last

The department also deserves credit where it is due.

The final rule sets a deadline. Every certifying agency must finish its reevaluations by December 24, 2026. A single 90-day extension is possible, with the department’s approval, according to PilieroMazza.

Agencies cannot turn away new applications during the reevaluation, the rule specifies.

What it refuses

It refuses automatic eligibility to firms in the Small Business Administration’s 8(a) program. It also refuses it to service-disabled veteran-owned small businesses.

A timetable is progress. About time. After nearly a year of pause, it is also an admission.

October 3, 2025: no date. September 25, 2026: a date.

The final rule sets a date. It does not return the lost year.

Duffy signed the method

Two orders and a letter

At the bottom of the document, a signature. Sean P. Duffy, Secretary of Transportation.

The rule rests on three texts. Donald Trump’s Executive Order 14151, his Executive Order 14173, and a June 2025 letter from the Solicitor General that finds these presumptions unconstitutional.

An executive order sets a direction. A rule picks a method. The method carries Duffy’s signature.

The president signs orders. The secretary signs rules. The small firms sign narratives.

Act by act

On principle, the Trump administration is following the Supreme Court’s 2023 case law and a 2024 federal ruling. That is defensible.

On method, it froze the program’s goals for nearly a year. It left the bill to the smallest players. That is a bad move for the firms that pay.

The president of the National Association of Minority Contractors, Wendell Stemley, warned in October 2025 that the market risked shrinking, according to Engineering News-Record.

A good principle, a bad method, one signature.

Three against one

Test by test

Who pays for the transition? The firms, for more than 96% of the bill the department itself priced.

What does the rule take away, and from whom? In Pennsylvania, only three firms in ten reevaluated and eligible as of August 26. And 538 that never answered.

Does the legal motive hold? It does. The law and the courts back it.

The method? A rule first, a consultation afterward, a year-long pause.

A score without a grade

Three criteria against the rule. One for it.

I do not dispute that the presumption had to go. I dispute making the people who depended on it pay for the exit, by pricing their hours and not our benefits.

This verdict targets a decision, not a person. It targets a rule, and the signature on it.

Honestly, I would have liked to conclude otherwise. The file would not let me.

Right on the law. Wrong on the bill.

The proof, at whose expense

December 24

By December 24, state certifying agencies must hand down their decisions. Thousands of letters. Retained, or disqualified.

Each letter will say whether 20 hours were enough.

Some will arrive before Christmas. One page. One word. Retained. Or disqualified.

The state or the small firm

When the state decides a presumption no longer holds, who should pay for the proof that replaces it: the state that wrote it, or the small firm that relied on it?

The rule answered in its own way. It priced other people’s hours. It never priced what it gained.

Twenty hours per firm. Benefits Washington never puts a number on.

Sources:

Primary Sources:

• Federal Register, Department of Transportation — DBE and ACDBE final rule (2026-19688), September 25, 2026
• Federal Register, Department of Transportation — interim rule and goal freeze, October 3, 2025
• PennDOT — DBE reevaluation update for Pennsylvania, August 26, 2026

Secondary Sources:

• PilieroMazza — what the final rule changes for DBE firms, September 25, 2026
• Congressional Research Service — the DBE interim rule and Mid-America Milling, December 15, 2025
• Engineering News-Record — a rule launched without consultation, October 9, 2025