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Indiana Attorney General Todd Rokita threw his support Tuesday behind the Indiana Department of Transportation’s waiver request to the federal Disadvantaged Business Enterprise program, which requires INDOT to consider race and gender when hiring contractors for infrastructure projects.
Rokita released a Sept. 5 letter he sent to U.S. Transportation Secretary Sean Duffy, where he argued that the program is unconstitutional, violated the U.S. Constitution’s equal protection clause and went against the U.S. Supreme Court’s decision in Students for Fair Admissions v. Harvard.
In addition to Rokita, 16 other state attorneys general signed the letter.
The Disadvantaged Business Enterprise program regulations require state departments of transportation, public transit agencies, and airport sponsors who receive federal funding to consider disadvantaged businesses when hiring contractors for infrastructure projects.
According to the U.S. Department of Transportation’s website, the program is designed to help small businesses compete in the transportation industries.
President Donald Trump’s administration announced earlier this year it was seeking to put an end to that U.S. Department of Transportation’s program for disadvantaged business owners in a major court case involving Indiana companies.
The Indianapolis Business Journal reported in June that two Indiana companies—Mid-America Milling Co. of Jeffersonville and Bagshaw Trucking Inc. of Memphis—claimed in a lawsuit that the program has resulted in what they call reverse discrimination against them. The Department of Transportation under then-President Joe Biden intended in court documents to fight that assertion, but under Trump, the department has switched positions.
The U.S. Department of Transportation said in a statement issued to IBJ that the change in position was “an important step toward ensuring that the Disadvantaged Business Enterprise … program does not discriminate on the basis of race or sex.”
“DOT will continue to work hard to find ways to ensure that all of its programs are operated on a non-discriminatory basis,” the statement said.
DBEs of America leader Stephanie Allen, the owner of Mooresville-based Crossroads Highway Products, told IBJ she had already seen her business suffer as a result of a narrowly-written injunction that U.S. District Judge Gregory Van Tatenhove of the Eastern District of Kentucky issued last fall in support of the plaintiffs.
Crossroads, which sells expansion joint materials for bridge projects, has seen a big dip in business since the injunction—which suspends the programs in some areas. Allen said the company has had only about an eighth of the revenue that she was expecting before the injunction went into effect.
The DOT’s website says the program is not limited to those who fall within the categories of persons who are presumed disadvantaged. Any business can apply for DBE certification by showing that they’re socially and economically disadvantaged. “Economic disadvantage” is measured by the firm owners’ personal net worth, which can’t exceed $2.047 million, according to the department.
Rokita argues that the federal regulations force INDOT to presume that any business owned by women or members of certain minority groups automatically qualify as disadvantaged, putting businesses owned by men or individuals of other races at a competitive disadvantage.
“Forcing INDOT to prioritize contractors based on race or gender is unconstitutional and undermines fair competition,” Rokita said in a news release. “Granting the waiver INDOT is requesting, is well within the Department of Transportation’s authority and would be a critical step toward ensuring that Indiana’s transportation projects are awarded based on merit, not arbitrary classifications, and aligns with our constitutional duty to uphold equal protection under the law.”
Other states that have joined the coalition alongside Indiana include Ohio, Florida, Texas, Kentucky, and South Carolina.
Rokita’s actions against the Disadvantaged Business Enterprise program align with Indiana Gov. Mike Braun’s efforts to eliminate diversity, equity, and inclusion initiatives across the state. In January, Braun issued an executive order forbidding executive state branch agencies from using state funds to support DEI efforts.
Last month, Rokita’s office announced that it is reviewing all state contracts to ensure that they do not violate the state’s anti-DEI laws.
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