Minority and women-owned transportation businesses are threatened by a lawsuit filed by white-owned businesses that say they suffer from discrimination from the Reagan-era program.
As one of 12 children of what he called a “dirt poor” Black family, Bush said he worked hard to become the owner of Bush Companies — a Rochester-based business that provides temporary traffic control services at a construction site. He says his flagging company is among the largest of its kind in the state.
Bush has had help in growing his company from a Reagan-administration program that requires state and local transportation departments that receive federal funds to apportion 10% of infrastructure contracts to “disadvantaged” small businesses owned by women and minorities.
But now, the $37 billion Disadvantaged Business Enterprise (DBE) program is threatened with extinction in Minnesota and across the nation.
Two white-owned construction businesses won a temporary injunction that has stopped the program in Kentucky and Indiana — two states where those companies had business. In addition, the Justice Department has flipped from defending the DBE program when President Biden was in office to agreeing with its foes.
If a federal judge in Kentucky accepts a settlement the Justice Department has agreed to with the white-owned businesses, the program that has helped 49,000 American small businesses — including more than 950 in Minnesota — would abruptly end.
Bush said he is “saddened” that Trump, who campaigned on a promise to help Black entrepreneurs, would help pull the plug on the DBE program.
“The program was formed by Ronald Reagan, who was a great president,” said Bush, who has twice run for a seat in the state Legislature as a Republican.
He said his company had 78 contracts in the past year, all DBE-based.
“Did the program help me? Yes, ma’am, it did,” Bush said.
Laura Miller, the owner of Nowthen-based On-Call Pavement Sweeping, said she’s benefitted from the DBE program for more than 20 years. Most of that help comes through the requirement that big construction companies that want to compete for transportation projects hire women- and minority owned subcontractors to meet their DBE goals.
“So if they are looking for four or five small businesses, (the prime contractor) would favor DBE small businesses,” Miller said.
Without the DBE program, Miller said “it seems that a lot of the larger primes would maybe do a lot of the services in house.”
“So, the DBE is just one benefit to encourage small businesses, and the more small businesses we have in society, the better it is for the middle class,” Miller said.
Alfonzo Williams, who rushed to the site of George Floyd’s murder to shut down an intersection and initiate the creation of a memorial square, is a former felon who is now the owner of a Minneapolis-based construction company that specializes in demolition, concrete work and construction cleanup.
In the DBE program for eight years, Williams said the boost it gave his company helped him turn his life around. “I am able to feed my family and I am able to help others,” he said.
But in Indiana, where a court injunction has already ended the program, Stephanie Duncan, has already felt the pain that may await similar firms all over the country. Duncan’s company, which supplies bridge expansion joints, has seven contracts right now. By her estimate, she would normally have 50 if the DBE program were in effect.
Because of the steep and sudden drop in business, she hasn’t been able to pay her business’ rent in months. She went on to found DBEs of America, an advocacy group to raise awareness and inform DBE-dependent firms about the progress of the case that will decide their future.
Duncan has also become a certified DBE contractor in 32 other states in hopes of getting business across state lines, where DBE preferences are in effect, for now. But if the DBE program is deemed illegal and dismantled nationwide, that won’t help.
“(The DBE program) was put in place for a reason,” Miller said. “Because you know, these small businesses, they couldn’t get work because it was a good old boys club. And that’s what it’ll be again.”
‘The needle didn’t move’
In October 2023, Mid-America Milling and Bagshaw Trucking claimed that, as white-owned businesses, they lost transportation infrastructure work to minority and women-owned businesses that benefitted from DBE support.
The companies are represented by a Milwaukee-based conservative nonprofit law firm called the Wisconsin Institute for Law & Liberty, which said the DBE program had done nothing to boost women and minority entrepreneurs.
“Defendants have said — and will likely continue to say — that the DBE program is necessary because there are disparities in America and that they must give certain preferences to ‘fix’ this problem,” one of the institute’s court filings said. “Yet despite the untold billions of dollars spent over the past four decades, defendants have readily conceded that the ‘needle did not move’ in response to their preferences.”
In supporting the plaintiffs’ suit, the Trump Justice Department echoed the argument that DBE is unconstitutional by not treating all transportation sector companies the same.
In September, Kentucky U.S. District Judge Gregory Tatenhove issued an injunction that found that aspects of the program were likely unconstitutional and he halted the program in Kentucky and Indiana.
Van Tatenhove cited the U.S. Supreme Court’s 2023 decision barring affirmative action admission policies in higher education multiple times in his ruling.
Democracy Forward, a nonprofit liberal legal group that has filed multiple suits against the Trump administration, and the Minority Business Enterprise Legal Defense and Education Fund joined the case after it became clear the Trump Justice Department would no longer defend the DBE program.
“Minority and women-owned businesses have been burdened by discrimination for centuries. It is both legally right and morally necessary for the government and the private sector to take action to remedy that discrimination,” said Sarah von der Lippe, a lawyer with the Minority Business Enterprise Legal Defense and Education Fund.
The Minnesota Department of Transportation said in an email that it “strongly believes” programs that support small and diverse businesses “are critical to our success and the economic vitality of our state” and that there are state-based programs to help accomplish that goal, though it did not identify a specific program.
As far as the DBE program, the department said it has adopted a wait-and-watch attitude.
“Nothing has changed in terms of our implementation of (the DBE) program as of today and we will continue monitoring closely and communicating as quickly and clearly as we are able,” the Minnesota Department of Transportation said.
This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
