The Trump administration has thrown its weight behind a legal challenge aimed at dismantling a $37 billion federal program designed to support minority-owned businesses, arguing that it discriminates against white business owners and violates the U.S. Constitution.
At the center of this controversy is the Disadvantaged Business Enterprise (DBE) Program, a decades-old initiative administered by the Department of Transportation (DOT). First authorized by Congress in 1983, the DBE requires that at least 10 percent of federal transportation infrastructure funding be allocated to businesses deemed “disadvantaged,” many of which are minority- or women-owned. Approximately 49,000 businesses nationwide currently benefit from this program.
The challenge began in 2023 when two Indiana-based white-owned companies, Mid-America Milling Company and Bagshaw Trucking Inc., filed suit against the DOT seeking to end the DBE program entirely. This week, the Department of Justice, now under the Trump administration, submitted a settlement proposal supporting the lawsuit.
In the legal filing, the administration argued that the DBE’s use of race- and gender-based presumptions violates the Constitution’s equal protection clause. The filing stated, “Defendants, upon review of the DBE program and their position in this litigation, have determined that the program’s use of race- and sex-based presumptions is unconstitutional.”
This shift in position follows a 2023 Supreme Court ruling that struck down race-conscious college admissions policies. Citing this precedent, officials say they have re-evaluated the federal government’s role in race-based policies, including economic programs like the DBE.
Dan Lennington, deputy counsel at the conservative Wisconsin Institute for Law & Liberty, representing the plaintiffs, described the DBE program as “one of the largest and oldest affirmative action systems in U.S. history.” He added that the program has enforced “a policy of race discrimination in the roadbuilding industry” for decades. “Thousands of workers and small businesses have been victimized,” Lennington said, “and hundreds of billions have been spent, distorting the market and inflating construction costs for taxpayers. That ends now.”
The original lawsuit claims the DBE system unfairly disadvantages white-owned businesses. According to the complaint, “The word ‘disadvantaged’ is simply code for women and certain minorities,” and “disfavored racial groups must compete with the preferred racial groups on an unequal footing.”
The Biden administration previously defended the DBE program, noting that the plaintiffs had not identified any current transportation contracts requiring race- or gender-based subcontracting due to the DBE. However, the Trump administration’s reversal reflects a broader push to dismantle race-conscious government programs—a move civil rights advocates warn could undermine decades of progress in addressing economic inequality.
If accepted, the proposed settlement would represent a significant shift in federal infrastructure policy. Since the DBE is federally funded but administered at the state level, dismantling the program could have far-reaching consequences for minority-owned firms that rely on DBE certification to compete for public infrastructure projects.
The Department of Transportation, currently overseen by Secretary Sean Duffy, a Trump appointee, has so far remained silent on the settlement proposal submitted by the Department of Justice. There has been no official public statement or response addressing the potential dismantling of the Disadvantaged Business Enterprise program. The proposal is still awaiting review and approval from the courts, leaving the future of the program uncertain for the time being.
If the court ultimately approves the settlement and rules in favor of the plaintiffs, it would mark a significant legal victory against a longstanding federal initiative aimed at supporting minority- and women-owned businesses. Such a decision could call into question the constitutionality of similar affirmative action and equity programs funded or administered by the federal government, signaling a major shift in policy direction.
Moreover, a ruling against the DBE program could pave the way for further legal challenges targeting other federal programs designed to promote economic inclusion and diversity. This potential wave of litigation would likely focus on policies related to federal contracting, business development incentives, and the allocation of public spending, raising concerns among advocates who argue that these programs are critical to leveling the playing field.
Looking ahead, the case could serve as a blueprint for how future administrations approach affirmative action and equity initiatives. Under a potential Trump administration, this precedent might accelerate efforts to dismantle or significantly reshape policies that use race or gender as factors in government funding and contracting decisions, with wide-reaching implications for minority-owned businesses and economic equity programs nationwide.
As the legal process continues to unfold, minority business groups, industry watchdogs, and economic justice advocates are paying close attention to every development in the case. They recognize that the stakes are high, as the court’s decision could directly impact the future of the Disadvantaged Business Enterprise program, which has supported tens of thousands of minority- and women-owned businesses for decades. These groups worry that dismantling the program could reduce opportunities for disadvantaged businesses to compete fairly in the federal contracting market, potentially reversing years of progress toward economic inclusion.
Beyond the immediate effects, the case carries broader implications for how billions of federal dollars are distributed to minority-owned and disadvantaged firms nationwide. A ruling against the program could set a precedent that challenges other race- and gender-conscious policies in federal contracting and public spending. This has sparked widespread concern among advocates who fear such decisions may undermine efforts to close persistent economic gaps, reshape affirmative action policies, and alter the landscape of government support for underrepresented communities for years to come.
