Proposed Consent Decree to End DOT DBE Program

In a well-reasoned and compelling decision, the U.S. District Court for the Eastern District of Kentucky granted a limited preliminary injunction against USDOT’s DBE program in the case Mid-America Milling Co., LLC v. U.S. Department of Transportation, et al. The court found that the race and gender-based rebuttable presumptions used in the DBE program violate the U.S. Constitution’s guarantee of equal protection under the Fourteenth Amendment. 

Here are the Basics:

Two companies, Mid-America Milling Company and Bagshaw Trucking, filed lawsuits against the US Department of Transportation (USDOT) in October 2023. These companies, based in Indiana, argued that the USDOT's Disadvantaged Business Enterprise (DBE) program unfairly favored businesses owned by minorities and women, violating the Equal Protection Clause of the US Constitution. They claimed that despite being qualified, they lost out on contracts to DBE firms, even when their bids were lower. 

In September 2024, the Kentucky federal court sided with the plaintiffs, finding that the race and gender-based presumptions within the DBE program likely violated the Constitution. The court issued a preliminary injunction, blocking the USDOT from enforcing DBE contract goals on projects where the plaintiffs intended to bid. 

In October 2024, the court expanded the injunction, clarifying that DBE goals must be set to zero for federally assisted contracts in any state where the plaintiffs operate or bid. 

In May 2025, the USDOT, under the new administration, proposed a settlement to the lawsuit. This proposed consent order, if approved by the court, would allow the DBE program to continue but without relying on race or gender as a basis for presuming social and economic disadvantages. This would require agencies to find other, race- and gender-neutral ways to ensure the participation of disadvantaged businesses.  

While this decision is limited to the contracts the plaintiffs bid on in Kentucky and Indiana, its comprehensive analysis of the applicable law might serve as a guideline for similar actions nationwide and ultimately the U.S. Supreme Court.

For a detailed analysis of the current situation and its implications for the construction industry, read the memorandum provided by Leonidou & Rosin Professional Corporation. 

For any questions, contact Ray Baca, UCON Director of Agency Relations.