Minority contractors say Trump DEI rollback poses threat to their livelihoods

By Bianca Flowers

CHICAGO, March 17 (Reuters) – Five months after a federal court ruled in favor of the Trump administration’s overhaul of a U.S. Department of Transportation program, minority-owned businesses say they are being shut out of billions of dollars in construction work.

The 2021 Biden-era bipartisan $1.2 trillion Infrastructure Investment and Jobs Act set a national goal for the Transportation Department to steer at least 10% of surface transportation, public transit and highway safety research funding to disadvantaged businesses. But the department’s Disadvantaged Business Enterprise program – a 42‑year‑old federal initiative to help minority and women‑owned firms compete for contracts to repair roads, bridges and highways – is now in flux.

A U.S. district court in Kentucky cleared the way last October for the administration to end the program’s automatic presumption that businesses owned by women or racial minorities were socially and economically disadvantaged, part of a broader campaign to overhaul or eliminate race or gender-conscious government programs such as diversity, equity and inclusion initiatives known as DEI.

Under the new rules, roughly 50,000 firms nationwide are required to submit “personal narratives” along with other financial documents to recertify. Firms must demonstrate, based on their individual experiences and without reference to race or sex, that they are socially and economically disadvantaged by detailing specific instances of hardship, systemic barriers and denied opportunities.

Since certification is handled at the state level, where federal transportation dollars are distributed, they face a state-by-state patchwork of timelines and processes and the suspension of participation goals for major infrastructure projects.

In a statement shared with Reuters, the U.S. Department of Transportation said it “did not mandate” how or when states should issue decisions about certification applications to the Disadvantaged Business Enterprise program, but they “cannot be based on race or sex.” 

In more than 25 interviews, minority contractors told Reuters the changes in state and federal contracting pose a threat to their businesses and livelihoods and have already contributed to declining profits, layoffs and project delays. 

Firms that held the disadvantaged business certification said they have been required to reapply, with some still waiting months to hear back from state agencies reviewing their applications.

During the prolonged reevaluation process, minority and women-owned firms can still bid on contracts but face competition against larger, better-capitalized firms, undermining what they describe as the program’s purpose of leveling the playing field in transportation contracting, four procurement consultants and lawyers told Reuters.

“Prime contractors and general contractors do not use women and minorities unless they have to,” said Joann Payne, president of Women First, an advocacy organization for women-owned businesses in transportation and construction. “Taking away the goals has devastated the program.” 

A NEW HURDLE FOR MINORITY BUSINESSES

The uncertainty around recertification of disadvantaged businesses is playing out in large infrastructure projects across the country.

In Minnesota, state transportation officials dropped their minority participation goal on a $1.8 billion bridge replacement project, the largest in the state’s history. Prior to the October ruling, the project had set a 8.6% participation goal for minority contractors, according to an unpublished document seen by Reuters, from the Minnesota Department of Transportation. 

In November, the state started the review process to certify contractors as disadvantaged, but would not say when those certifications would be complete or how many. Pippi Mayfield, spokesperson for the Minnesota Department of Transportation, said she anticipates participation goals will be reinstated at some point, but “we do not know when.”

In the meantime, minority-owned firms are free to bid on contracts without certifying as disadvantaged, she said.

In February, the Trump administration halted the $16 billion Gateway Tunnel project between New York and New Jersey to ensure that the funding wasn’t tied to diversity, equity and inclusion initiatives it deemed unconstitutional. The funding was restored nearly two weeks later, when a federal court ordered the release of the funds.

New Jersey started the process of reevaluating disadvantaged businesses on January 12, but would not say when they expected the process to conclude. The New York State Department of Transportation did not respond to a request for comment.

In a statement shared with Reuters, a spokesperson for the Gateway Development Commission said that they “will continue to ensure the Hudson Tunnel Project adheres to the latest federal regulations.”

Florida, which received $16.7 billion under the Infrastructure Investment and Jobs Act, is advocating for the repeal of the federal Disadvantaged Business Enterprise program altogether. 

A November 20, 2025 memo from Florida Department of Transportation Secretary Jared W. Perdue, viewed by Reuters, said “Florida firmly believes” that the federal Disadvantaged Business Enterprise program “must be repealed entirely and replaced with a program whose primary purpose is advocating for improving economic competitiveness and small business development.”

Perdue and the Florida Department of Transportation did not respond to a request for comment.

GOALS FOR FEDERAL TRANSPORTATION DOLLARS

The $1.2 trillion Bipartisan Infrastructure Law was intended to route federal dollars through state and local agencies to support local job creation. But minority contractors say that without the Disadvantaged Business Enterprise program those dollars won’t flow to minority and women-owned businesses.

“These businesses build jobs, they pay taxes and they build communities,” said Don Cravins, CEO of the National Minority Supplier Development Council. 

Contractors that were once part of the disadvantaged businesses program say the program has been unfairly characterized as a quota system when it was really just a participation goal that encouraged good-faith efforts to include minority-owned firms on taxpayer-funded projects.

Texas contractor Gregory Cody, 63, who has worked as a prime and subcontractor for several government agencies for more than 20 years, said some Republican-led states treated the goals as “performative” to secure federal funds, “but now they’re saying we don’t need you anymore.”

He says he submitted paperwork in October to renew his certification in the disadvantaged business program, but the Texas Department of Transportation has not told him if or when he will be recertified.

A spokesperson for the Texas Department of Transportation said no firms have been recertified since beginning its reevaluations in February.

Terrell Johnson, 35, an owner-operator of a trucking company in Portsmouth, Virginia, said there was always a “lack of genuine opportunities” even when he was certified as a Disadvantaged Business Enterprise under the old rules.

“It seems like the same contractors in my area are always awarded the big jobs. They controlled and monopolized work from smaller firms,” he said.

Johnson said he is not planning to re-apply for certification as a disadvantaged business in Virginia.

Virginia did not respond to Reuters’ request for comment about Johnson’s claims, which Reuters could not independently verify. The department said in a statement that it is working to “complete reevaluations as soon as practicable.”

Sean Link, 55, a dump-truck contractor in North Carolina, said being forced to recertify for the program is “10 steps backwards” for minority-owned firms that, in his view, were already fighting for scarce opportunities in his line of work. 

Link was certified as a disadvantaged business under the old rules and has applied for recertification in North Carolina.

Jamie Kritzer, a spokesperson for the North Carolina Department of Transportation, said the state began its recertification process on March 16. 

“Businesses will have 60 days to submit materials to apply for recertification, and the state aims to complete the reevaluations by June,” he said, in an email.

Link said he plans to pivot by bidding on other federal contracts beyond hauling, including supplying office and cleaning products.

“You have to find other ways in this industry to survive,” he said.

(Reporting by Bianca Flowers in Chicago. Editing by Kat Stafford and Michael Learmonth)