Editorial Manager, Economic Justice and Narrative Strategy
In a legal settlement proposed in May 2025, the federal government moved to end a decades-old contracting program meant to address discrimination against socially and economically disadvantaged business owners. The U.S. Department of Justice claims the U.S. Department of Transportation’s (DOT) Disadvantaged Business Enterprise (DBE) program violates the U.S. Constitution’s Equal Protection Clause because it requires grantees who receive federal transportation dollars to set flexible goals for the number of socially and economically disadvantaged businesses that receive contracts and act in good faith to meet those goals.
If a federal judge agrees to the settlement, DOT would be prohibited from taking these steps to ensure socially and economically disadvantaged small business owners have a fair chance to compete for federal transportation contracts.
Since 1983, Congress has authorized the DBE program on a bipartisan basis, which has allowed firms owned by Black, Latino, Indigenous, Asian American, and women entrepreneurs to gain real traction in a historically closed-off marketplace. The program was intended to address ongoing discrimination against these businesses. Several years later, in 1987, DOT established the Airport Concession Disadvantaged Business Enterprise (ACDBE) program specifically dedicated to ensuring these groups had fair access to concessions contracts at airports.
Without the DBE framework, minority-owned firms will lose their foothold in a market still dominated by historically advantaged companies.
We can easily look to the past to see what happens when these types of programs are ended or eliminated. As one example, when the Illinois Department of Transportation (IDOT) eliminated its DBE contract goals in 2002 and 2003 as part of an experiment, the share of the contracts’ value that disadvantaged business enterprises received dropped to less than 2% of the total value of the contracts. Another analysis from IDOT showed that more than half of the 4,129 construction, architecture, and engineering contracts awarded from 2006 to 2008 were advertised without DBE goals. In those advertised without a DBE goal, the participation rate for those eligible for the DBE program was less than 1%.
If similar patterns emerge because the national program no longer exists, thousands of small businesses could be deprived of significant funding, putting these business owners’ livelihoods at risk.
Many critics immediately voiced their opposition to the administration’s decision, and some organizations took steps to intervene in the courts. In May, a federal judge in Kentucky allowed a group of impacted contractors to defend the constitutionality of the DBE program.
Unfortunately, in October 2025, DOT took a step forward in dismantling the DBE program by issuing an interim final rule that removes protections for Black business owners, other business owners of color, and women business owners from the DBE and ACDBE programs. Specifically, DOT is making it harder for businesses looking to compete for government contracts to prove they have been socially and economically disadvantaged by requiring each business to provide evidence that the majority owner has experienced discrimination. As a result of these changes, existing DBE certifications have immediately been suspended, and businesses have to carry the burden of recertifying to meet the new standards.
The Legal Defense Fund’s (LDF) Equal Protection Initiative aims to fully realize the U.S. Constitution’s promise of equal protection under the law by safeguarding, expanding, and deepening efforts to remove and remediate barriers to opportunity for Black people. Initiatives like the DBE and ACDBE programs help increase fairness and level the playing field for people who have been historically excluded from receiving federal contracts because of their race.
If programs like the DBE and ACDBE were ruled unconstitutional, it could spark more questions from opponents of equity programs about whether government agencies have the authority to address discrimination they actively or passively participated in, even when there’s clear evidence of it. This could tie the government’s hands in sectors far beyond contracting, diminishing efforts to close the racial wealth gap, reduce health disparities, or ensure fair access to public resources.
That is why LDF submitted a comment to DOT urging the agency to withdraw the new rule in its entirety and restore the prior version of its rules. Recognizing that federal agencies under the Trump administration have not consistently followed long-established protocols for issuing such rules, LDF called on DOT to at least revise the rule to require continued data collection and allow states to provide targeted programming to DBEs and ACDBEs to meet their participation goals. The comment notes that these changes threaten to undermine efforts to ensure that federal taxpayer dollars are not distributed in a discriminatory manner.
LDF will continue to defend and advance the proper interpretation of the equal protection clause and other anti-discrimination laws to ensure they are not weaponized and misconstrued in order to entrench discrimination and block Black people and other groups from the resources they need to thrive.
LDF’s Equal Protection Initiative (EPI) works to protect and advance efforts to remove barriers to opportunity for Black people in the economy, our educational systems, and other areas.
LDF’s framework for how to move the country toward this goal at this historical inflection point, and how LDF’s Equal Protection Initiative is playing a role in making that happen.
Project 2025’s proposals, from ending data collection on race to weakening the government’s ability to fight discrimination, will frustrate efforts to remedy racial inequality.
