INDIANAPOLIS (WRTV) — Indiana Gov. Mike Braun announced an end to race- and sex-based contracting preferences in state procurement following Attorney General Todd Rokita’s formal opinion ruling key components of a state enterprise program “unconstitutional.”
Rokita said in an announcement early Wednesday that key components of the state’s Diversity Business Enterprises program violated the Equal Protection Clause of the Fourteenth Amendment.
Rokita pointed specifically at the DBE’s Minority and Women’s Business Enterprises components, saying it “blatantly” singles out Hoosiers for disfavored treatment.
“This blatantly illegal program singles out some Hoosiers for disfavored treatment purely because of their sex or the color of their skin, and it insults other Hoosiers by suggesting they cannot compete on a fair playing field,” Rokita said. “The program is both un-American and unconstitutional.”
Braun responded by directing the Indiana Department of Administration to discontinue the unlawful aspects of the program and replace them with a merit-based approach.
“Our Constitution mandates equal protection under the law, because a system where the government picks winners and losers on the basis of race or sex can never be fair,” Braun said. “Indiana has replaced divisive, politically-charged programs with a focus on Merit, Excellence, and Innovation: a level playing field where every single Hoosier has the chance to get ahead with hard work.”
What is the DBE program?
Created by state statute in 1983, the program – referred to as the Disadvantaged Business Enterprise program on the IDOA website – required state agencies to set race- and sex-based spending goals on most state contracts, directing a minimum percentage of funds toward businesses owned by members of particular minority groups or women.
According to Rokita, contractors who failed to meet those requirements risked bid rejection, withheld payments, contract termination, or debarment. The state was also required to label and categorize businesses through a certification process based on race and sex.
The Indiana Department of Administration requested the attorney general’s review of the program in August of last year.
Legal reasoning
Rokita claims the program’s numerical spending goals, race- and sex-based certifications, subcontracting mandates, and enforcement mechanisms all fail strict scrutiny under the Constitution.
The opinion draws on the U.S. Supreme Court’s 2023 ruling in Students for Fair Admissions, which the attorney general said makes clear that discriminatory racial preference programs can rarely, if ever, be justified under the Constitution.
The opinion also concluded that Braun has the authority to decline to implement statutes that clearly infringe on citizens’ constitutional rights.
“Having just celebrated 250 years of independence, Hoosiers should have fresh in their minds the words of the Declaration that launched our Revolution: ‘All men are created equal,’” Rokita said. “The elimination of race- and sex-based preference programs like the M/WBE program is just the latest step in the march toward equality.”
What’s next?
Contract preferences for veteran-owned businesses remain lawful, but the Department of Administration may implement new, race- and sex-neutral preferences for veterans, small businesses, and Indiana-based businesses that comply with state and federal constitutions.
Rokita’s office said it will advise the department on a lawful transition and work with the General Assembly to repeal the underlying statute.
Braun says he will announce a new Indiana small business program designed to help more Indiana businesses compete for state contracts sometime soon.
