US to end use of race, gender in highway, transit contracts

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By David Shepardson and Nate Raymond

(Reuters) -The Trump administration said on Wednesday it will end the U.S. Transportation Department’s consideration of race or gender when awarding billions of dollars in federal highway and transit project funding set aside for disadvantaged small businesses.

A judge in September in Kentucky ruled that a federal program enacted in 1983 — the Disadvantaged Business Enterprise program — that treats businesses owned by racial minorities and women as presumptively disadvantaged and eligible for such funding violated the U.S. Constitution’s equal protection guarantees.

The program was reauthorized in 2021 through Democratic President Joe Biden’s Infrastructure Investment and Jobs Act, which set aside more than $37 billion for that purpose.

The Transportation Department under Republican President Donald Trump said in a court filing that it agreed as part of a settlement that the “program’s use of race- and sex-based presumptions is unconstitutional.”

The department previously defended the policy as seeking to remedy past discrimination, but said on Wednesday it has reevaluated its position in light of factors including the Supreme Court’s decision in an affirmative action case.

The department said in a statement it had taken an important step toward ensuring the program “does not discriminate on the basis of race or sex. DOT will continue to work hard to find ways to ensure that all of its programs are operated on a non-discriminatory basis.”

U.S. District Judge Gregory Van Tatenhove in Frankfort, Kentucky, an appointee of Republican President George W. Bush, said the federal government cannot classify people in ways that violate the principles of equal protection in the U.S. Constitution.

The judge blocked the Transportation Department under Biden from relying on race or gender when considering contracts bid for by two companies that sued last year over the policy, Mid-America Milling Company and Bagshaw Trucking, which operate within Kentucky and Indiana.

Cara Tolliver, a lawyer for the companies that sued, said, “the Department of Transportation’s decision to end racial discrimination in federal contracting is a monumental victory for the preservation of equality and American values.”

A coalition of groups including the National Association of Minority Contractors and Airport Minority Advisory Council in a court filing noted that Congress has recognized the need for the program “as a means of remedying decades of consistent explicit and implicit discrimination against women and people who are members of particular racial or ethnic groups.”

In April, Transportation Secretary Sean Duffy said states could lose transportation funding over a failure to cooperate on federal immigration enforcement efforts or for maintaining diversity, equity and inclusion programs. Trump issued an executive order seeking to ban DEI programs.

(Reporting by David Shepardson in Albany, New York and Nate Raymond in Boston; Editing by Chris Sanders and Bill Berkrot)