Indianapolis, Indiana – Indiana has stepped into the national spotlight with a bold move aimed at reshaping how government contracts are awarded. At the close of August, Gov. Mike Braun announced that Indiana had become the first state in the country to formally request a waiver from federal requirements that mandate race- and gender-conscious components within the Disadvantaged Business Enterprise (DBE) Program.
The request, filed by the Indiana Department of Transportation (INDOT), seeks to eliminate contract-specific DBE goals based on race, ethnicity, or gender for federally assisted highway construction contracts. If granted, Indiana would transition to an approach that places all emphasis on economic need rather than demographic classifications.
“I am a firm believer in offering equal opportunity for all to compete and succeed. 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,” said Gov. Braun.
The waiver comes against the backdrop of an ongoing legal challenge. A U.S. District Court recently issued a preliminary injunction in the case of Mid-America Milling Company, LLC (MAMCO) v. U.S. Department of Transportation. In the lawsuit, the Indiana subcontractor MAMCO argued that federal DBE statutes unlawfully discriminate by giving preference to certain groups based on race or gender. That court action spurred INDOT to formally ask the U.S. Department of Transportation for permission to pursue a race-neutral program.
Under the proposed change, INDOT would implement a new methodology for setting project goals and certifying businesses. Instead of prioritizing firms by race or gender, the program would look solely at the availability of economically disadvantaged small businesses within defined industry and geographic markets.
Attorney General Todd Rokita, who has been a strong advocate for the waiver, is also leading a coalition of 17 states in supporting Indiana’s request. He argues that the move is about ensuring fairness and protecting constitutional rights.
“Forcing INDOT to prioritize contractors based on race or gender is unconstitutional and undermines fair competition,” Rokita said. “Granting the waiver INDOT is requesting is well within the Department of Transportation’s authority and 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.”
Supporters of the waiver say the change would not mean abandoning small businesses. INDOT plans to continue providing assistance to disadvantaged business enterprises through business development programs, training opportunities, and networking forums designed to help them compete in the marketplace. Officials say these efforts will ensure that while the criteria change, resources for small business growth remain available.
The waiver request covers a three-year period. This timeline aligns with INDOT’s next scheduled Disparity Study, due in 2028, which will examine data on business participation and market availability. The results of that study will help determine whether a new DBE goal should be set based solely on economic disadvantage rather than race or gender.
During the waiver period, INDOT will continue to collect and analyze participation data, submit annual reports to the Federal Highway Administration, and follow all other applicable federal rules. The intent is to closely monitor how the race-neutral approach functions in practice, with an emphasis on accountability and transparency.
Critics of the federal DBE program have long argued that while it was designed to level the playing field, it sometimes results in unintended barriers by prioritizing characteristics unrelated to merit or economic need. Supporters, however, have historically defended the program as a necessary tool to combat systemic disadvantages faced by minority- and women-owned businesses. Indiana’s request for a waiver now places the state at the center of that national debate.
By moving toward a model that emphasizes economic disadvantage above all else, Indiana’s leadership hopes to chart a course that other states may follow. Whether the Department of Transportation approves the waiver remains to be seen, but the proposal has already positioned Indiana as the first state to test this new approach on a large scale.
For now, Gov. Braun and Attorney General Rokita continue to frame the waiver as both a constitutional necessity and an economic opportunity. They argue that Indiana’s transportation projects should reflect open competition, free from classifications that they say undermine fairness. If the waiver is approved, the next three years will provide a crucial test of whether a race- and gender-neutral strategy can achieve the same goals of opportunity, equity, and growth without the classifications that have long defined the DBE program.
