DBE Contracting Goals – A Thing of the Past?

Construction members heard directly from AWC last week about the recent updates in the Mid America Milling v Department of Transportation lawsuit. I wanted to share what we know to date as I have been referencing this in past blogs.

To refresh you on the background, in June 2023 the Supreme Court ruled against the use of race affirmative action in higher education admissions. Since that decision race and gender contracting programs have been under legal scrutiny. The construction industry impact on this issue has resulted from the Mid-America Milling suit against the DOT and the injunction that followed.

We learned last week that the DOT has filed a consent order basically stipulating that the use of race and gender presumption of disadvantage is unconstitutional. A group of national associations “DBE Intervenors” had filed as a party in the case to argue in favor of the DBE program. They have until June 18 to submit their response for the judge to consider in his final ruling. That said, it is my belief and the supposition of many that he will still rule to accept the consent order which will essentially eliminate setting DBE goals on federally funded DOT projects. I anticipate a ruling by the end of June.

I have been in this role for over 15 years and can tell you that this will impact utilization of DBEs on projects. I have already been told by a GC “DBEs cannot bid low enough to beat our price to self-perform the work”. There have been at least 3 projects this year where the DBE goal was reversed and set to zero. The participation on those projects was 0%. We know that when it comes to civil construction it is math and low bid.

I was asked if AWC could meet with MnDOT primes and strongly encourage them to stay committed to using DBEs. Our role is not to tell contractors how to do business. We can encourage all we want, but at the end of the day it is just that. What I can tell you is that AWC has been very proactive working with government owners on how best to pivot and create opportunities for small businesses, even if that means race/gender neutral programs.

What can you do? You can work to strengthen your relationships with your contractors. Keep doing great work. As our successful DBEs have said – you want work because you are a good contractor not because you are a DBE contractor. As Kendra Kron said at AWC’s Annual Luncheon – Business owners face challenges every day and we have been here before. Together in this incredible AWC tribe we have the support of each other, and we WILL succeed. We got this.

— B