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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowPresident Donald Trump’s administration is seeking to put an end to the U.S. Department of Transportation’s program for disadvantaged business owners in a major court case involving Indiana companies.
The Disadvantaged Business Enterprise program requires state and local transportation agencies that receive federal Department of Transportation funds, including the Indiana Department of Transportation, to award a certain percentage of their contracts to businesses certified as disadvantaged business enterprises.
But two Indiana companies—Mid-America Milling Co. of Jeffersonville and Bagshaw Trucking Inc. of Memphis—claim 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. Now, under Trump, the department is switching 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
Some women and minority business owners who have been actively involved in the litigation are concerned that the DBE program could be the next casualty in the Trump administration’s crusade against diversity, equity and inclusion.
DBEs of America leader Stephanie Allen, the owner of Mooresville-based Crossroads Highway Products, says she has already seen her business suffer as a result of a narrowly-written injunction that U.S. District Judge Gregory F. 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.
As part of grassroots organizing efforts for DBEs of America, Allen has been sounding the alarm about the potential nationwide impact of the case since the injunction. Now, she fears it’s likely that the program will go away completely.
To be certified as a DBE, a business must be small, independent and owned by someone who is part of a group designated as socially and economically disadvantaged. Disadvantaged groups include women, Blacks, Hispanics, Native Americans and Asian-Pacific Americans.
Allen said the program shouldn’t be conflated with diversity, equity and inclusion. “It’s an economic program,” she told IBJ.
Joann Payne, president of the Women First National Legislative Committee, called the program a “crucial economic engine for our nation” that includes 50,000 certified companies employing 500,000 people.
“It would be devastating for the U.S. economy if all of those small businesses, many of which are located in rural America, were to go out of business simultaneously,” Payne wrote in a statement.
Women First is part of a coalition of organizations that support minority business owners who previously filed to intervene in the lawsuit, fearing that the Trump administration wouldn’t seek to defend the program. The coalition includes the National Association of Minority Contractors, Airport Minority Advisory Council, Women Construction Owners & Executives, Illinois Chapter, and minority-owned businesses Atlantic Meridian Contracting Corp. and Upstate Steel Inc.
If Tatenhove, the Kentucky judge, grants the coalition’s motion to intervene in the case, those organizations will become defendants in place of the federal Department of Transportation. That would allow the coalition to argue on behalf of the program, even if the federal government doesn’t.
Tatenhove granted both parties’ requests for more time in documents filed Thursday. Meanwhile, the lawsuit’s initiators are taking a victory lap.
Nonprofit conservative law firm Wisconsin Institute for Law & Liberty represents the plaintiffs. In a statement, the firm’s vice president and deputy counsel, Dan Lennington, called the program “a policy of race discrimination in the roadbuilding industry.”
“Thousands of workers and small businesses have been victimized, and hundreds of billions have been spent, distorting the market and inflating construction costs for taxpayers. That ends now,” Lennington wrote. “Through the bravery of our clients and the leadership of the Trump Administration, equality will be the law of the land.”
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This is a positive step to equalizing the playing field. Too many firms were established just for cashing in under the preferential treatment because of sex and race. Abuse of the system followed immediately. It is time for corrections back to pure competition and merit based business.
So this favor-everyone-except-white-men program is not DEI, “It’s an economic program.” Got it. How different.
The Disadvantaged Business Enterprise (DBE) program was created by the U.S. Congress. Congress established the program to ensure that small businesses owned and controlled by socially and economically disadvantaged individuals have an equal opportunity to compete for federally funded transportation contracts. The program was initially enacted in 1983 under the Reagan administration.