Quotas Remedy Contracting Discrimination
False Assumption: Racial and gender quotas in federal transportation contracting effectively remedy the ongoing effects of past discrimination.
Written by FARAgent on February 10, 2026
Congress authorized the Disadvantaged Business Enterprise Program in 1983. The program earmarks at least 10 percent of federal transportation funding for minority- and women-owned firms. It serves 49,000 businesses and awards $37 billion annually.
The program ran for 42 years. Courts began challenging similar set-asides. A Tennessee judge ruled against presuming ethnic groups as disadvantaged in 2023. A Texas judge opened a minority agency to whites in 2024. The Supreme Court banned race in college admissions in 2023.
The Trump administration moved in 2025 to end the DBE quota. It sided with white-owned businesses claiming constitutional violation. Critics question its effectiveness after 50 years. Proponents warn of business failures without it.
People Involved
- In the debates over federal contracting quotas, Erec Smith, a research fellow at the Cato Institute, emerged as a critic. He argued that after 50 years, the program had proven ineffective and called for fresh approaches. [1] Meanwhile, officials in the Biden administration championed the quotas. They defended them as a necessary fix for discrimination, at least until a shift in 2025. [1] Growing evidence suggests these defenses rested on flawed assumptions, though the debate lingers.
▶ Supporting Quotes (2)
““After an unsuccessful 50 years, perhaps it’s time for a new strategy,” Smith said. “Are the perceived disadvantages of marginalized contractors inherent to their sex, race or ethnicity? Are there race-neutral alternatives that can work to remove whatever obstacles impede the upward mobility of women and minorities in contracting? These are the questions the nation should be asking.””— Trump calls for axing of $37 billion quota
“At the time of the ruling, the Biden administration argued that the DBE was necessary to help remedy the effects of past and ongoing discrimination in government contracting.”— Trump calls for axing of $37 billion quota
Organizations Involved
The Transportation Department ran the DBE program, setting aside federal funds for contractors owned by minorities and women. [1] This setup channeled billions into specific hands, year after year. On the defense side, Democracy Forward, a left-leaning nonprofit, stepped in to uphold the program. They framed it as a correction for past wrongs. [1] Increasingly, such institutional roles are seen as sustaining a flawed remedy, even as recognition of its limits grows.
▶ Supporting Quotes (2)
“The DBE program, which is funded by the U.S. government but administered by states, earmarks at least 10 percent of the federal funding for transportation infrastructure to women- and minority-owned contracting firms.”— Trump calls for axing of $37 billion quota
““This coalition intervened in this case because of what’s at stake — not just for these businesses, but for the longstanding principles of redressing past discrimination in our economy.””— Trump calls for axing of $37 billion quota
The Foundation
Backers of the DBE program pointed to histories of discrimination in contracting to build their case. They claimed quotas were essential, dismissing race-neutral options like aid based on economic need. [1] In practice, the benefits often went to well-off minorities and women. The program also assumed certain ethnic groups were always disadvantaged, a notion a 2023 Tennessee court ruling rejected for a similar SBA initiative. [1] Growing evidence suggests these foundations were shaky, increasingly recognized as flawed though not yet universally dismissed.
▶ Supporting Quotes (2)
“At the time of the ruling, the Biden administration argued that the DBE was necessary to help remedy the effects of past and ongoing discrimination in government contracting.”— Trump calls for axing of $37 billion quota
“In September 2023, a Tennessee judge ruled that a Small Business Administration 8(a) program for minority contractors could no longer presume certain ethnic groups were inherently “disadvantaged” — a key requirement to receive set-asides for government contracts.”— Trump calls for axing of $37 billion quota
How It Spread
The idea held firm through administrative defenses and legal fights. The Biden team stood by the program until 2025, insisting it addressed discrimination. [1] Left-leaning groups like Democracy Forward pushed back against challengers in court. [1] This spread the assumption across policy circles and media, but emerging critiques highlight its weaknesses, with the consensus slowly shifting.
▶ Supporting Quotes (1)
““The Trump administration won’t stick up for minority- and women-owned businesses, so we will,” Democracy Forward, the left-leaning nonprofit representing a group of contractors composed of underrepresented groups, said Wednesday on the social media site Bluesky.”— Trump calls for axing of $37 billion quota
Resulting Policies
Congress launched the DBE program in 1983, mandating a 10% quota for disadvantaged businesses in transportation deals. [1] This policy directed federal dollars along racial and gender lines for decades. Separately, the Minority Business Development Agency operated for 55 years, assuming minorities needed special help until a 2024 Texas court opened it to whites. [1] Growing evidence suggests these policies, meant to remedy discrimination, fell short, though the view is not yet settled.
▶ Supporting Quotes (2)
“First authorized by Congress in 1983, the program serves roughly 49,000 businesses designated as “disadvantaged.””— Trump calls for axing of $37 billion quota
“In March 2024, a federal judge in Texas ordered the 55-year-old Minority Business Development Agency to open its doors to all, including White entrepreneurs.”— Trump calls for axing of $37 billion quota
Harm Caused
White-owned firms lost out under the DBE quotas, missing contracts valued at $37 billion each year. [1] Since 1983, the total awards likely topped a trillion dollars, sidelining many. The system often favored upscale women and minorities, sometimes as fronts for male kin, bypassing the truly poor. [1] Increasingly seen as flawed, these harms underscore a remedy that may have deepened divisions, with debate ongoing.
▶ Supporting Quotes (2)
“In a motion filed in the U.S. District Court for the Eastern District of Kentucky, the Justice Department said that a Transportation Department program that has carved out an estimated $37 billion for minority- and women-owned businesses violates the equal protection clause of the Constitution.”— Trump calls for axing of $37 billion quota
“It’s hard for people to grasp this, but black or female beneficiaries of quotas tend to be upscale. Consider women who benefit from contracting preferences. Are they typically both female and impoverished? Of course not.”— Trump calls for axing of $37 billion quota
Downfall
The assumption started cracking in 2023, when the Supreme Court barred race-based college admissions. [1] This led the Justice Department to reassess and plan an end to the DBE quota by 2025. Two white contractors sued over the program's constitutionality, and the Trump-era Justice Department sided with them. [1] Growing evidence suggests the quotas did not effectively remedy discrimination, increasingly recognized as a flawed approach though the full consensus remains emerging.
▶ Supporting Quotes (2)
“The Justice Department, which a few months ago defended the program under President Joe Biden, wrote in Wednesday’s filing that it “reevaluated” its position in light of the June 2023 Supreme Court decision banning race-conscious college admissions.”— Trump calls for axing of $37 billion quota
“The Trump administration moved Wednesday to dismantle one of the federal government’s largest and longest-standing affirmative action programs, siding with two White-owned contracting businesses that challenged its constitutionality.”— Trump calls for axing of $37 billion quota
Sources
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[1]
Trump calls for axing of $37 billion quotareputable_journalism