Caltrans Proposes Halving the DBE Goal for 2027–28 — Public Comment Closed September 30

Caltrans rewrote its DBE pages in mid-August, and the change was substantial enough that anyone working from older copies was working from stale information. The sentence that had defined the preceding months — that during the reevaluation period recipients may not set DBE contract goals nor count DBE participation toward goals — was taken down, as were the statements that new applications would be processed only after the reevaluation finished, and that out-of-state firms remained ineligible until then.

In their place, Caltrans states the position directly: “The Disadvantaged Business Enterprise (DBE) program is restarting.”

The proposed goals are far lower

For federal fiscal years 2027 through 2028, Caltrans proposes:

A note on that second figure. Caltrans' page printed it as “.08 percent,” and in August we flagged that it might mean 0.8 percent. Caltrans' September 16 FAQ settles it: the proposed FTA goal is 0.08 percent. The FAQ explains that its FTA-funded program is about 58 contract elements worth roughly $92.4 million, against about 22,976 elements worth roughly $11.8 billion for FHWA, which produces a base figure of 0.05 percent. It calls this a function of program size.

How Caltrans got to 11.80 percent

The FAQ walks through the arithmetic for FHWA-funded work:

• A base figure of 6.76 percent from Caltrans' 2024 FHWA disparity study: about $800.4 million of projected DBE dollar availability against $11.8 billion of projected work, counted by NAICS code from the CUCP directory and Census data.
• A growth projection of 19.37 percent, built on Caltrans' expectation that the certified directory will nearly triple during the goal period, based on the pace of applications since certification reopened on July 21.
• A 60/40 weighting: (6.76 × 0.60) + (19.37 × 0.40) = 11.80. Caltrans calls the growth figure “a genuine projection rather than measured data,” and says it is the one element of the methodology its own legal review has flagged as most likely to draw scrutiny.

Caltrans projects meeting about 19 percent of the FHWA goal (about 2.24 points) through DBE-neutral measures and the remaining 81 percent (about 9.56 points) through DBE-conscious measures such as contract goals. It also says individual contract goals will not match the overall figure: some will be lower, some contracts — particularly in trades where few DBEs are certified — may carry none, and new goals will apply only to projects still in development once each new goal takes effect. Caltrans is developing a Federal Small Business Enterprise Program targeted for launch in 2027.

The stated reason: there are far fewer certified firms now

Caltrans attributes the reduction to “updated federal regulations and the new — significantly smaller — pool of re-certified firms.” That is the clearest official acknowledgement so far of what the October 2025 Interim Final Rule did to the California DBE roster. The rule abolished the group-based presumption of disadvantage and required every owner to prove disadvantage individually through a Personal Narrative; Caltrans was reevaluating more than 6,000 firms against that standard. The proposed goal is, in effect, a measurement of how many came through.

Goals have not actually resumed yet

It would be easy to read “restarting” as “back to normal.” It is not, and the distinction matters if you are pricing work. Caltrans sets out the sequence itself, and receiving FHWA and FTA acknowledgement of the Goal and Methodology reports comes before resuming contract goals. The order is: collect public comments, submit the reports to FHWA and FTA, submit an updated DBE Program Plan, receive acknowledgement, and only then resume contract goals. The first step ran September 16–30; nothing we can see says the later ones are done. Caltrans says it expects the new goals to restart in the 2026–27 federal fiscal year, and its separate Local Assistance page still says full restoration of the DBE Program depends on FHWA approving the new goal and methodology. Its September 16 FAQ is more specific: contract goals cannot be set until FHWA and FTA formally acknowledge the final Goal and Methodology and the amended DBE Program Plan, which Caltrans anticipates in the fall of 2026.

So the two-part test that has governed this all year still applies — the certification program finishes its reevaluation, and the recipient adopts a goal the federal agencies accept. What changed in August is that the second part now has a published path and a date, where before it had neither. Our status tracker follows it.

Counting participation is a separate question. USDOT's FAQ on the final rule says recipients may count DBE participation again from the date their UCP notifies USDOT that its reevaluation is complete (the CUCP notified USDOT on July 20, 2026), subject to the Operating Administration's approval, while Caltrans' program-status page still said on October 22 that no participation may be counted until the CUCP completes the reevaluation. The FAQ also says contract goals set before October 3, 2025 are legally unenforceable, and that a recipient needs a new overall goal on record before it can use any DBE-conscious contract goal.

Certification is open, and Caltrans is asking firms to apply

One line on the rewritten page deserves attention from anyone who has been waiting: Caltrans “continually welcomes new DBE applications” and encourages small businesses to pursue certification — adding, pointedly, that doing so helps raise future participation goals. Read alongside the proposed cut, that is an agency saying the goal fell because the pool shrank, and the way back up is more certified firms.

Firms that have not yet submitted reevaluation materials are still able to: Caltrans asks previously certified firms who have not applied to upload a Personal Narrative, a Personal Net Worth Statement and supporting documents. Firms that are not certified are not eligible to participate until Caltrans receives and approves those materials.

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