November 22, 2024

By Lane Kimble

State DOTs and contractors should prepare to see Disadvantaged Business Enterprise (DBE) goals on some projects fall to 0%, at least for now.

That’s based on new guidance the Federal Highway Administration (FHWA) issued this week related to an ongoing federal lawsuit.

If either of the suit’s two plaintiffs formally file interest in bidding on a project with a DBE goal, FHWA expects the state to lower that specific goal to 0%.

The plaintiffs (Mid-America Milling Company and Bagshaw Trucking) currently work in 25 states, including Illinois, Michigan, and Minnesota, however FHWA’s guidance says all 50 states should prepare for this possibility.  While the number varies from project to project, Wisconsin has an overall DBE program goal of 12.42% between 2023 and 2026.

Mid-America and Bagshaw must file their interest in a project within five business days of its advertisement, then the USDOT will notify states within another five days if the goal needs to be removed after the Department of Justice reviews it.

Represented by the Wisconsin Institute for Law and Liberty (WILL), the two companies say the DBE program and goals violate the Constitution by making business decisions based on race.  The program dates back to the Reagan administration in the early 1980s.

In September, a federal judge in Kentucky temporarily blocked DBE goals in any state where Mid-America or Bagshaw do business.

The judge still needs to hear arguments from both sides and make a formal ruling on the case.

The American Road and Transportation Builders Association (ARTBA) is offering further guidance and can connect contractors with specific states where the injunction has already been in effect.

Email ARTBA General Counsel Rich Juliano with questions HERE.