As required by the Supreme Court’s Adarand decision, and as urged by Congress, the final regulation provides a narrowly tailored DBE program, which serves a compelling governmental interest (annotated):

• Quotas are prohibited.

• Recipients must use race-neutral methods (like outreach and technical assistance) to meet as much as possible of their overall goals.

• Firms owned by socially and economically disadvantaged white males must be allowed to participate as DBEs.

• Business owners with a personal net worth of more than $750,000 (excluding the value of the primary residence and the ownership interest in the business) may not participate in the program.

• Individual firms must graduate from the program it they exceed the small business size caps of 17.42 million or if the firm’s owner exceeds the personal net worth cap. The entire DBE program will expire in 2004 unless reauthorize by Congress.