Editor’s note: This story is developing and will be updated.
Dive Brief:
- A federal judge has blocked a key component of the U.S. DOT’s Disadvantaged Business Enterprise program in a move that could have widespread implications for workforce participation goals in federal contracts.
- U.S. District Court Judge Gregory Van Tatenhove granted a preliminary injunction in Indiana and Kentucky against the DOT’s DBE program, which sets goals that at least 10% of dollars in federal contracts be awarded to women- and minority-owned firms, which are presumed to be disadvantaged under the program.
- Two road contractors asserted in a lawsuit filed last year that they had suffered reverse discrimination because their firms didn’t fall into those categories. Van Tatenhove agreed. “Because these race and gender classifications violate the Constitution’s guarantee of equal protection, the pending request for a preliminary injunction will be granted,” the judge wrote.
Dive Insight:
The preliminary injunction, issued Monday in U.S. District Court for the Eastern District of Kentucky, could impact billions of dollars in federal funding. DBEs have netted nearly $34 billion from federal transportation contracts in the last five years, according to public data cited by The Washington Post.
For the time being, Van Tantenhove’s injunction only applies to Kentucky and Indiana, where the plaintiffs do business, but it could open the doors for other challenges nationally.
The suit was filed on behalf of Jeffersonville, Indiana-based Mid-America Milling Co. and Memphis, Indiana-based Bagshaw Trucking by the Wisconsin Institute for Law & Liberty, a conservative think tank focused on free market policy. It is one of several suits challenging workforce participation goals in public contracts.
The suits gained steam following the U.S. Supreme Court’s decision in 2023 barring affirmative action admission policies in higher education. The suits have targeted similar criteria in other government programs since then, notably the Small Business Administration’s 8(a) program. In April, DOT issued a final rule on its DBE program that could give it firmer legal standing for future challenges, attorneys told Construction Dive. Although the program applies nationally, it is administered by the states.
Chris Slottee, an attorney at Schwabe, Williamson & Wyatt in Anchorage, Alaska, who represents Alaska Native corporations in federal contracting, told Construction Dive after the Mid-America suit was filed that it could have broader implications.
“That Supreme Court decision really provided a template,” Slottee said earlier this year. “The argument is that [these programs represent] unconstitutional racial discrimination.” Now, a federal judge has concurred.
