Attorney: Minority construction bids are ‘illegal’ and ‘unconstitutional’

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“Illegal” and “unconstitutional” are the words one Wisconsin attorney is using to describe the Wisconsin Department of Transportation‘s calls for minority bids.

According to a motion for a preliminary injunction obtained by the Wisconsin Law Journal, the Wisconsin Institute of Law and Liberty (WILL) is alleging that the state’s Disadvantaged Business Enterprise (DBE) Program discriminates based on race in violation of the Constitution and federal law.

“We filed the motion for a preliminary injunction and are waiting the judge’s decision,” said WILL attorney Daniel Lennington during an interview with the Wisconsin Law Journal on Friday.

Although the motion was filed in the U.S. District Court for the Eastern District of Kentucky, it will have a widespread impact across the United States, Lennington noted.

“It’s going to fundamentally change how transportation dollars are spent in America,” Lennington said.

According to Lennigton, the Wisconsin Department of Transportation announcement that they are looking for minority- and women-owned businesses to bid on projects in August across the state is illegal.

According to the complaint obtained by the Wisconsin Law Journal, WILL sued the defendant, the United States Department of Transportation (USDOT) which maintains offices at its Kentucky Division Office. Defendant Pete Buttigieg, secretary of Transportation and oversees the United States Department of Transportation, was also listed in the lawsuit, among others.

The plaintiffs, Mid America Milling Co. LLC and Bagshaw Trucking, seek relief in the form of the preliminary injunction and a declaratory judgment that the race and gender-based classifications in the federal DBE program, including those set out in Sections Case: 3:23-cv-00072-GFVT Doc #: 1 Filed: 10/26/23 Page: 16 of 20 – Page ID#: 16 17 11101(e)(2)–(3) of the Infrastructure Act, the Small Business Act, 49 C.F.R. pt. 26, and 13 C.F.R. pt. 124, are unconstitutional and otherwise violate the APA.

Plaintiff also seeks an order permanently enjoining defendants from applying race and gender-based classifications in the federal DBE program, as well as attorney fees.

The transportation agency opened bids for 10 projects in all of its regions with varying Disadvantaged Business Enterprise goals, according to our sister publication, The Daily Reporter. 

DBE firms are small businesses that are at least 51% owned, operated and fully controlled by minority groups and women, according to WisDOT. DBE mandates started with the Surface Transportation Assistance Act of 1982, which aims to support emerging businesses with technical assistance and mentorship for heavy highway work.

Lennington noted that under the federal program, if a white-owned construction company bids on a project they are assessed a score of 100. If a black construction owned company bids 100 on the same project they are given a 5% advantage, and given a score of 95. The lowest amount wins the bid, so the Black-owned business would be awarded the bid even if bidding the same amount as the white-owned company.

“It’s fundamentally wrong and offensive actually,” Lennington said.

The Wisconsin Law Journal reached out to various construction firms throughout the Badger State on Friday for their respective opinions on the matter; all declined to comment.

The State of Wisconsin did not respond prior to publication.

Pursuant to Wis. Stat §16.75(3m)(b) DOA and any state agency making purchases “shall attempt to ensure that 5% of the total amount expended under this subchapter in each fiscal year is paid to minority businesses.” MBEs are certified by DOA under §16.287.

In Fiscal Year 2022, Wisconsin agencies spent $142,439,216 with certified MBEs/DVBs on general procurement, 8.17% of $1,744,466,480 total spend, according to a report obtained by the Wisconsin Law Journal.

The Wisconsin Department of Transportation (WisDOT) State Highway Program expended $29,071,227 with certified MBEs, 5.89% of the $493,554,788 they spent in FY22, according to the report.