After federal DEI rollback, Wisconsin DBE recertifications plummet

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After a federal ruling reset the state’s Disadvantaged Business Program, the Wisconsin Department of Transportation noted a low number of businesses this spring recertifying for the disadvantaged program. If the low trend continues, it could affect how the state sets minority contracting goals on future highway projects.

In October, the U.S. Department of Transportation published an Interim Final Rule that required DBE firms across the U.S. to certify without using race or sex as proof of disadvantage. Last fall, the state recorded around 1,300 minority- or women-owned firms working in construction or airports, but only a small fraction of firms applied for recertification.

A total of 122 of 796 eligible firms applied for recertification between Feb. 16 and April 2, WisDOT officials said. Eighty-seven applications have been preliminarily approved by the state’s Unified Certification Program, an application system managed by the transportation department, and firms will be notified after all applications will be reviewed.

The department expects its overall triennial goal will be affected and likely lower than previous years. But it also cautions it isn’t certain of the dip until the recertification process and DBE goal setting method are completed.

Project goals are set on a case-by-case basis looking at the number of DBE firms available, work type and location.

Minority contracting experts noted that recertifications have been extremely low across the U.S. and that many firms are hesitant to start the process again due to the attitude of the current administration. Some minority- and women-owned firms credited the DBE Program as a chance to show their skills to contractors and others said they have outgrown the program.

“When (state DOTs) set their goals on projects moving forward, they base those goals on available or approved firms currently within that state,” said Ugo Nwagbaraocha, president of the National Association of Minority Contractors – Wisconsin Chapter and vice president of NAMC’s national organization.

In the fiscal year of 2025, the overall state DBE goal for highway projects was 12.96%.

That percentage could be significantly lower at the current number of recertifications, Nwagbaraocha added.

The declining trend could lower goals on Wisconsin’s future megaprojects such as the John A. Blatnik Bridge replacement, a $1.8 billion project in Superior, Nwagbaraocha said.

“DBE firms, we’re critical to the economy, hiring and employment. If (low recertification) moves forward currently, this is going to affect not just (DBE firms) but the entire economy,” Nwagbaraocha said. The low turnout may also affect the status of the national DBE Program itself, he added.

The DBE Program has roots back to the Ronald Reagan administration and was intended to give small businesses access to federally assisted transportation and airport concessions projects. In 2023, two companies filed a lawsuit against the U.S. Department of Transportation alleging they lost business to DBE-certified firms based on their race and sex. The case was dismissed after U.S. DOT changed its policy.

The Infrastructure Investment and Jobs Act of 2021 mandated 10% of all new surface transportation funding – worth more than $37 billion – would be spent through the DBE Program.

In January 2025, President Donald Trump signed an executive order to end diversity, equity and inclusion programs in the public sector.

It is not clear how many DBE businesses will apply for recertification or how long the review process will take. In February, WisDOT officials said applications are reviewed as soon as they are received.

NAMC – Wisconsin Chapter will work with firms seeking access and information for the recertification process, Nwagbaraocha said.