Federal Court Sides with Challenge to DBE Program

What happened: A federal district court in Kentucky Sept. 23 imposed limits on the longstanding Disadvantaged Business Enterprise (DBE) program, while questioning its constitutionality. Plaintiffs Mid-America Milling and Bagshaw Trucking are challenging the program, claiming they have unfairly lost federal-aid contracts in Kentucky and Indiana to DBE firms with higher bids. The court preliminarily blocked the U.S. Department of Transportation, a defendant in the case, from using race- and gender-based preferences on contracts “upon which the plaintiffs bid.”

Why it matters: In this initial opinion and order, the court indicated it would likely rule the DBE program unconstitutional once the parties argue the case on its merits. Judge Gregory Van Tatenhove described a perceived disconnect between past discrimination in highway construction, which the DBE program is intended to remedy, and groups presumed “disadvantaged.” He also cited the 2023 U.S. Supreme Court case, Students for Fair Admissions v. Harvard, in noting the program lacks a “logical endpoint,” having been reauthorized by Congress across four decades.

What’s next: ARTBA is working with its affiliates to determine the specific actions transportation agencies in the two states will take to comply with the preliminary injunction. Longer term, this case may result in broader program modifications, as well as inviting additional legal challenges to the DBE program itself. ARTBA and its DBE Program Policy Task Force will continue dialogues on these issues. Please contact Rich Juliano or Prianka Sharma for more information.