FHWA Issues Guidance to Comply with DBE Litigation

What happened: The Federal Highway Administration (FHWA) released guidance Nov. 18 related to the Mid-America Milling case, in which two industry plaintiffs are challenging the constitutionality of the Disadvantaged Business Enterprise (DBE) program. FHWA has asked ARTBA to share this document within our membership, as well as the link to their other DBE policy resources.

Why it matters: In September, Kentucky Federal Judge Gregory Van Tatenhove issued a preliminary injunction prohibiting DBE goals from applying to projects involving the two plaintiffs. The judge still needs to consider the case’s merits, but gave a strong indication he will rule the DBE program unconstitutional, which was a factor in his granting the injunction.

According to the new FHWA guidance, if either plaintiff (Mid-America Milling or Bagshaw Trucking) expresses interest in bidding or quoting on an advertised federal-aid project, then the state transportation department (DOT) is to adjust the DBE goal for that project to zero percent. The guidance applies to all states in which one of the plaintiffs is working or has expressed interest in doing so. While FHWA lists 25 states in which the plaintiffs currently operate or plan to bid, the “0% DBE goal” requirement could extend to projects in any state identified by one of the plaintiffs.

What’s next: Judge Van Tatenhove must still hear arguments from the parties and decide the case on its merits. The judge has many legal options should he rule for the plaintiffs, including invalidating the DBE program nationally or in his judicial circuit, or instructing the U.S. DOT to change it. ARTBA will report on these developments as they occur.