Editor’s note: This story is developing and will be updated.
Dive Brief:
- A federal judge has blocked a key component of the US 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 percent of federal contract dollars be awarded to companies owned by women and minorities, who are assumed to be disadvantaged under the program.
- Two road contractors said in a lawsuit filed last year that they had suffered reverse discrimination because their companies did not fall into these categories. Van Tatenhove agreed. “Because these race and gender classifications violate the Constitution’s guarantee of equal protection, the request for a pending preliminary injunction will be granted,” the judge wrote.
Diving knowledge:
The preliminary injunction, issued Monday in the U.S. District Court for the Eastern District of Kentucky, could affect billions of dollars in federal funding. DBEs have raised nearly $34 billion of federal transportation contracts over the past five years, according to public data cited by The Washington Post.
For now, Van Tantenhove’s mandate applies only to Kentucky and Indiana, where the plaintiffs do business, but it could open the door to other challenges nationwide.
The lawsuit was filed on behalf of Jeffersonville, Ind.-based Mid-America Milling Co. and Memphis, Ind.-based Bagshaw Trucking by the Wisconsin Institute for Law & Liberty, a conservative policy-focused think tank free market It is one of several outfits challenging workforce participation objectives in public contracts.
The suits gained steam after the U.S. Supreme Court’s 2023 decision that banned affirmative action admissions policies in higher education. Lawsuits 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 in its DBE program that could give it a firmer legal footing for future challenges, attorneys told Construction Dive. Although the program applies nationally, it is administered by the states.
Chris Slottee, an attorney with Schwabe, Williamson & Wyatt in Anchorage, Alaska, who represents Alaska Native corporations in federal procurement, told Construction Dive after the Mid-America lawsuit was filed that it could have broader implications .
“That Supreme Court decision really provided a template,” Slottee said earlier this year. “The argument is this [these programs represent] unconstitutional racial discrimination”. Now, a federal judge has agreed.
