A new interim final rule from the Department of Transportation (DOT) has reshaped how states, local agencies, and contractors navigate federally assisted infrastructure work. Issued October 3 and made effective immediately under the Administrative Procedure Act’s “good cause” provision, the rule removes long-standing presumptions of social disadvantage in the Disadvantaged Business Enterprise and Airport Concession (DBE) programs and replaces them with individualized determinations.

The Administrative Procedure Act is the federal law that governs how agencies create regulations, including the usual requirement for public notice and a public comment period before a rule takes effect. The “good cause” provision allows an agency to bypass that process when it believes advance notice would be impracticable or contrary to the public interest. It is not commonly used for major program changes, particularly ones involving large, ongoing federal investments.

That made the rollout especially challenging. The rule appeared without advance notice or a transition window, and it took effect immediately. Agencies received no lead time to prepare for certification changes or adjust contracting schedules. Instead of guidance coming first and implementation following, the sequence reversed: the rule arrived, funding holds followed, and only later did DOT release initial clarification. The timing caught many state and local agencies in the middle of active procurement and construction cycles.

The result was a rapid, widespread disruption. DOT and the Office of Management and Budget (OMB) placed more than twenty billion dollars in transportation investments under administrative review, including major projects in New York and Chicago. The lack of prior instruction created significant operational challenges for agencies working to maintain project schedules, meet federal compliance obligations, and manage long-term infrastructure planning. The uncertainty has also raised concerns about delayed maintenance and slowed project delivery, both of which can carry implications for public safety when critical infrastructure improvements are put on hold.

Project Holds Spread Across the Country

The initial review pulled several major transit projects into a holding pattern. New York’s Second Avenue Subway and Gateway Tunnel projects, totaling about $18 billion dollars, were placed under administrative review while DOT reviews eligibility questions under the new standards. were paused while DOT reviews eligibility questions under the new standards. Chicago’s Red Line Extension and Red and Purple Modernization programs, valued at more than $2 billion dollars combined, were also placed under review.

DOT has indicated that a small number of previously approved but unfinalized grants could potentially be cancelled. Taken together, these actions represent one of the most extensive funding reviews and holds in recent years for federally assisted transportation work.

In parallel, broader federal funding scrutiny became visible The scope widened further on October 17 when OMB announced an $11 billion dollar freeze on United States Army Corps of Engineers projects in 12 states, underscoring the broader federal scrutiny occurring during the ongoing budget standoff.

Limited Clarity from DOT Guidance

On October 25, DOT’s Office of General Counsel released a Frequently Asked Questions (FAQ) document intended to clarify procedural requirements. The FAQ states that it does not carry the force and effect of law and largely focuses on actions recipients must pause immediately, including the setting of new DBE goals and the counting of participation toward existing goals.

The guidance provides little operational detail. Questions about timing, staffing, certification workload, and the implications for ongoing construction schedules remain unanswered. These issues fall primarily to each state’s Unified Certification Program (UCP), the entity responsible for reviewing and approving DBE certifications for all DOT-funded agencies within that state. Because UCPs must now reevaluate existing certifications using individualized determinations before agencies can resume setting or counting goals, many jurisdictions are preparing for administrative delays.

Technical Considerations and NSPE’s Response

As agencies began adjusting to the new framework, NSPE centered its efforts on clarity, steady communication, and supporting engineers engaged in federally assisted work. NSPE has submitted a formal comment to DOT focused on the practical mechanics of implementation, certification consistency, and project stability. The submission emphasizes the need for clear federal direction to avoid unnecessary delays in safety-critical transportation projects.

At the same time, NSPE launched an information-focused grassroots effort to help members understand the interim rule and share practical observations on its operational impacts. The outreach addressed issues engineers are already encountering, such as scheduling, compliance responsibilities, and how certification delays can affect projects tied to public safety and essential infrastructure upkeep.
 

NSPE had also coordinated with allied organizations such as the American Council of Engineering Companies (ACEC) to follow how the transition was unfolding across the industry.

Looking Ahead

While the FAQ provides an initial framework, it does not fully resolve how agencies will manage certification reevaluations, contracting obligations, or project timelines. Funding for several large-scale projects remains on hold, and many state and local agencies are preparing for prolonged administrative backlog.

NSPE will continue tracking federal guidance and any follow-on rulemaking activity after the November 3 comment deadline. The Society’s focus remains on ensuring that implementation is clear and workable for the professional engineers and public agencies responsible for delivering the nation’s transportation infrastructure, particularly where delays or uncertainty could affect safety, maintenance needs, or essential project sequencing.