A highway is pictured under construction. (Courtesy Indiana Department of Transportation)
Indiana’s Department of Transportation has asked its federal counterpart to temporarily excuse it from diverse contractor requirements, which the state’s attorney general has dubbed “unconstitutional.”
The Hoosier State is the first to request a waiver, filing with the U.S. Department of Transportation late last month, according to a Tuesday news release. The move was prompted by a preliminary injunction in a federal case featuring a disgruntled Indiana subcontractor.
“I am a firm believer in offering equal opportunity for all to compete and succeed,” Gov. Mike Braun said in the release. “If granted, this waiver will further position Indiana as a state one would want to do business with and as a place to grow your business.”
U.S. Department of Transportation regulations require state and local transportation agencies that receive highway, transit and airport assistance to establish contracting goals for the participation of “disadvantaged business enterprises” that are majority owned and controlled by “socially and economically disadvantaged individuals.”
Anyone can qualify as disadvantaged — subjected to racial, ethnic or cultural prejudice — on a case-by-case basis. But some are presumed to be disadvantaged: women and Black, Hispanic, Native and Asian Americans.
There are personal net worth, business size and gross receipts standards, however.
“Forcing INDOT to prioritize contractors based on race or gender is unconstitutional and undermines fair competition,” said Indiana Attorney General Todd Rokita, who authored a Friday letter in support of the agency’s waiver request.
The letter, also signed by the attorneys general of 16 other states, argued that white or male business owners don’t benefit from the “race and gender presumption.” That’s “plainly” discriminatory and therefore unconstitutional, the letter added.
In the release, Rokita said a granted waiver “would be a critical step toward ensuring that Indiana’s transportation projects are awarded based on merit, not arbitrary classifications, and aligns with our constitutional duty to uphold equal protection under the law.”
Indiana Attorney General Todd Rokita speaks at an environmental deregulation event at an Indianapolis truck dealership on Tuesday, July 29, 2025. (Leslie Bonilla Muñiz/Indiana Capital Chronicle)
Under its proposed waiver, INDOT would go “race- and gender-neutral.”
A new methodology for setting goals and certifying businesses would consider how available economically disadvantaged small businesses are in certain geographies and industries, according to the release.
The agency asked for a three-year exemption, which would end around the time the agency’s next disparity study is expected to be complete. The results will be used to create a new disadvantaged business goal based “solely” on economic criteria.
INDOT will keep offering business development programming, virtual learning, forums and networking events to “DBEs across Indiana.”
It’s the latest step state officials have taken against diverse contracting efforts.
Braun’s Department of Administration is also seeking an opinion from Rokita’s office about the legality of the Governor’s Commission on Supplier Diversity and the Minority and Women’s Business Enterprises Program.
That agency’s Division of Supplier Diversity has called off its next meeting until the review is completed, although opinions are non-binding. The division has also canceled its annual Business Conference and B2Bloom Expo, which showcases opportunities for underrepresented companies to contract with state government.
SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
