Judge Partially Halts USDOT Affirmative-Action Contracting Program

Two companies that sued the U.S. Department of Transportation over an affirmative action-style contracting program have been awarded a preliminary injunction.

The nonprofit Wisconsin Institute for Law & Liberty filed the lawsuit, alleging Mid-America Milling of Indiana and Bagshaw Trucking of Kentucky were discriminated against when seeking federal transportation contracts.

The program being targeted – which began in 1980 and was reauthorized under the 2021 Infrastructure Investment and Jobs Act – is USDOT’s Disadvantaged Business Enterprise program, which “ensures nondiscrimination in the award and administration of DOT-assisted contracts in the department’s highway, transit, and airport financial assistance programs,” according USDOT’s website. The program focuses on ensuring socially and economically disadvantaged individuals receive a fair opportunity when bidding on federally funded transportation contracts.

The 2021 reauthorization mandated that 10% of all new surface transportation funding – over $37 billion – “shall be expended through small-business concerns owned and controlled by socially and economically disadvantaged individuals," according to WILL.

In its initial filing in October 2023, WILL alleged the DBE program’s goals are essentially a form of discrimination, “preventing many construction companies from competing for contracts on an equal footing with firms owned by women and certain racial minorities.”

The preliminary injunction from U.S. District Judge Gregory Van Tatenhove in Frankfort, Kentucky, will stop the DBE program from currently operating but is not the final decision of the court and will only apply to the two companies in the states within which they operate: Kentucky and Indiana.

Judge Tatenhove stated in his decision, “The court is keenly aware of the past discrimination that certain groups of people have faced in this country. And the court is sure that the federal government has nothing but good intentions in trying to remedy past wrongs.

“But remedying those wrongs must still pass constitutional muster. The federal government cannot classify people in such a manner that violates the principles of equal protection.”

Tatenhove added in his opinion that, “The plaintiffs have previously lost out on federally funded contracts to DBE firms, even when plaintiffs’ bids were lower.”

Mid-America Milling is based in Jeffersonville, Indiana, and is one of several entities operating under heavy construction services company The Hughes Group. Hauling company Bagshaw Trucking is based in Memphis, Indiana, and operates a fleet of dump trucks, rollback trucks and heavy haul tractors serving the construction industry.