The Hits Keep Coming As Trump Administration Moves to End $37 Billion Disadvantaged Business Enterprise Program That Helped Black Entrepreneurs, Saying It’s Unconstitutional
The Disadvantaged Business Enterprise Program, a four-decade-old $37 billion effort aimed at helping businesses owned by underrepresented groups, such as people of color and women, compete in areas where they have historically been shut out, could be permanently shuttered under a proposed Trump administration settlement with the Department of Transportation.
President Donald Trump’s Justice Department has sided with two Indiana businesses in a 2023 lawsuit against DOT contending the DBE program is “discriminatory.” It’s another blow in Trump’s war against policies that help disadvantaged groups in education, business and public service and part of the administration’s larger efforts at banning diversity, equity and inclusion programs in government and the private sector.
Mid-America Milling Company and Bagshaw Trucking Inc. sued DOT, describing DBE in the original complaint as “the largest, and perhaps oldest affirmative action program in U.S. history,” as The Independent reported. The suit also claimed the program’s “goals” were in fact “discriminatory barriers” targeting undesignated racial groups, including white Americans.
The complaint said, “The word ‘disadvantaged’ is simply code for women and certain minorities,” and that “Disfavored racial groups must compete with the preferred racial groups on an unequal footing.”
The suit demanded DOT close it down “because the DBE program violates the Constitution’s ‘promise of equal treatment.’”
Congress enacted the Disadvantaged Business Enterprise Program in 1983 to, among other objectives, help remove barriers in competing for DOT-assisted contracts, promoting the use of DBE in all federal contracts and procurement activities and making sure only businesses that meet the eligibility requirements can participate.
The program serves 49,000 small businesses and helps them compete on an equal footing for more than $750 billion in government contracts. It’s been reauthorized by Congress ever since. Although the federal government funds it, it is administered by states. The Independent reported that DBE allocates at least 10 percent of government funding for transportation infrastructure to contracting firms.
The Justice Department, in a motion this week, agreed with the plaintiffs that DBE is unconstitutional because it does not treat all companies the same.
“Over the past five decades, the federal government imposed a policy of race discrimination in the roadbuilding industry,” Dan Lennington, deputy counsel at the Wisconsin Institute for Law & Liberty, a conservative nonprofit law firm representing Mid-America Milling and Bagshaw Trucking, argued, according to INC.
“Thousands of workers and small businesses have been victimized, and hundreds of billions have been spent, distorting the market and inflating construction costs for the taxpayers. That ends now,” Lennington said.
Under the Biden administration, DOT rejected the lawsuit last January, saying no DOT construction contracts contained “race or gender-based subcontracting goals due to the DOT DBE program.”
But in DOJ’s filing Wednesday, the administration said, in light of the Supreme Court’s ruling in 2023 blocking race-based admissions to colleges and universities, it had “re-evaluated its position.”
The Justice Department said in its filing that DOT “upon review of the DBE program and their position in this litigation, has determined that the program’s use of race- and sex-based presumptions is unconstitutional.”
This may not be the end of DBE, though, because a coalition of groups represented by the progressive public interest law firm Democracy Forward are fighting to have the Trump administration order struck down on the grounds it’s illegal.
