News Summary
Indiana’s Department of Transportation has filed a request for a temporary waiver from federal diversity contracting mandates, making it the first state to do so. The move aims to shift toward race- and gender-neutral contracting based on economic disadvantage, supported by state officials and opposed by advocates of diversity initiatives. The waiver, linked to a three-year disparity study, could reshape Indiana’s approach to disadvantaged business enterprise programs while maintaining support for small and minority contractors through various programs. The outcome may influence future contracting policies across the state.
Indianapolis – Indiana’s Department of Transportation (INDOT) has requested a temporary waiver from the diverse contractor requirements mandated by the U.S. Department of Transportation. This action makes Indiana the first state to seek such a waiver, highlighting an emerging trend against diversity-focused contracting initiatives within the state. The waiver request was filed late last month and was publicly announced in a news release on Tuesday.
The push for a waiver was driven by a preliminary injunction resulting from a federal case involving an Indiana subcontractor who expressed dissatisfaction with the current contract requirements. Governor Mike Braun has endorsed the waiver request, arguing it would enhance Indiana’s attractiveness to businesses.
Currently, U.S. Department of Transportation regulations require state transportation agencies to set contracting goals for disadvantaged business enterprises (DBEs). These enterprises are defined as businesses that are majority-owned and controlled by individuals who are socially and economically disadvantaged, which can include women and individuals from Black, Hispanic, Native American, and Asian American backgrounds.
Indiana Attorney General Todd Rokita has asserted that prioritizing contractors based on race or gender violates constitutional provisions and undermines fair competition. Rokita, along with the attorneys general of 16 other states, expressed support for the waiver in a letter that characterizes the current requirements as discriminatory. They argue that white or male business owners are not beneficiaries of the “race and gender presumption.” If the waiver is approved, INDOT’s contracting processes would shift to become race- and gender-neutral.
The proposed waiver outlines a new methodology that would focus on the availability of economically disadvantaged small businesses based on geographic and industry-specific considerations, moving away from traditional race and gender criteria. The waiver seeks a three-year exemption, aligned with the timeline for INDOT’s upcoming disparity study, which will provide data to inform a new disadvantaged business goal based solely on economic factors.
Even as INDOT pursues this waiver, the agency plans to continue its support for disadvantaged business enterprises through various programs including business development initiatives, virtual learning sessions, forums, and networking events across Indiana. This commitment aims to ensure that disadvantaged contractors can still access resources and opportunities despite the potential shift in contracting policy.
The move to request this waiver reflects a larger trend among Indiana state officials, including the Braun administration, which has begun seeking legal opinions regarding other diversity-focused programs and initiatives. As part of this review, the Division of Supplier Diversity in Indiana has postponed its upcoming meetings and canceled its annual Business Conference and B2Bloom Expo while assessments are conducted.
This request for a waiver could have significant implications for the future of contracting in Indiana as the state navigates the complex intersection of economic opportunity and diversity within the business community. As INDOT awaits a response from the U.S. Department of Transportation on the waiver request, stakeholders across Indiana are monitoring the situation closely.
Deeper Dive: News & Info About This Topic
HERE Resources
Jim Hartnett Elected Fellow of American College of Construction Lawyers
Indiana Seeks Federal Waiver to Reform Diversity in State Contracting
Additional Resources
- Indiana Capital Chronicle
- Wikipedia: Disadvantaged Business Enterprise
- Shelby News
- Google Search: Indiana diverse contractor waiver
- Inside Indiana Business
- Google Scholar: Indiana diverse contractor waiver
- Elkhart Truth
- Encyclopedia Britannica: Diversity in Contracting
- Tribune Star
- Google News: Indiana waiver request
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