Jeff Frey November 25, 2024 3 min read

FHWA's Response to the Kentucky Lawsuit on USDOT's DBE Program

The Federal Highway Administration (FHWA) has issued guidance in response to a lawsuit in Kentucky challenging the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise (DBE) Program. This guidance, developed in consultation with the USDOT Acting General Counsel and the U.S. Department of Justice (DOJ), aims to comply with a court-issued preliminary injunction.

Background

The lawsuit, filed by Mid-America Milling Company (MAMCO) and Bagshaw Trucking, challenges the constitutionality of the DBE program, alleging it discriminates based on race and gender. On September 23, 2024, the court issued a preliminary injunction prohibiting USDOT from enforcing DBE goals on contracts where the plaintiffs intend to bid.

Court's Clarification

Initially, the injunction was thought to apply only to contracts in Indiana and Kentucky. However, on October 31, 2024, the court clarified that the injunction applies to any state where the plaintiffs operate or bid on contracts. This means federally-assisted contracts in these states must have DBE goals set at zero percent if the plaintiffs are bidding.

Implementation Process

The DOJ and plaintiffs have agreed on the following process:

Plaintiffs will identify contracts they plan to bid on and notify the DOJ.
USDOT will review and notify states of these contracts, which must then set DBE goals at zero percent.
States must amend contract goals to zero percent before letting and notify the contractor community.
States with race- and gender-neutral DBE goals need not take additional action.
States must provide bidders list information to FHWA.
States must continue efforts to meet overall annual DBE goals despite reduced contract goals.

This guidance ensures compliance with the court's injunction while maintaining the integrity of the DBE program for other contracts.

To read the full referendum, click here.

Jeff Frey

Jeff has been with Hausmann Group since 2013 and became an owner in 2016. He specializes in large and unique insurance programs, primarily focusing on the construction, agriculture, and manufacturing industries. Jeff prides himself on not only providing businesses with insurance, but also educating them about it to become a true risk management partner. Jeff has a bachelor’s degree in Marketing and Management from the University of Wisconsin – Whitewater. He has coached varsity sports for Marshall Public Schools for the past 18 years and is currently an assistant coach for their softball team. As a result of his involvement in the community he is one of HG’s leading volunteers each year. He also enjoys spending time hiking, playing sports, and playing board games with his three daughters.

FHWA's Response to the Kentucky Lawsuit on USDOT's DBE Program