Indiana will end race- and sex-based contracting preferences embedded in its supplier diversity programs, Gov. Mike Braun announced Wednesday, citing a legal opinion from Attorney General Todd Rokita finding those preferences unconstitutional under the Equal Protection Clause of the Fourteenth Amendment.
State ends M/WBE preferences; administration says focus will shift to merit
The components identified by Rokita are part of Indiana's broader Diversity Business Enterprises efforts and the Division of Supplier Diversity, government programs that for years have included Minority- and Women-owned Business Enterprise (M/WBE) preferences. The Indiana Department of Administration requested the Attorney General's review of M/WBE and other programs tied to race or sex in contracting.
"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 in a press release.
Braun's office said the state will replace what it called "divisive, politically-charged programs" with a new emphasis on "Merit, Excellence, and Innovation," and on creating "a level playing field" intended to let businesses compete on performance. The governor also said he will announce a separate small-business initiative aimed at helping more Indiana firms pursue state contracts.
What this means for suppliers and counties
Local governments and vendors that have relied on M/WBE designations as part of procurement strategies will now face a policy shift at the state level. The announcement does not include details on the timetable for winding down the preferences, the precise mechanics of the new small-business initiative, or interim procurement rules. State agencies will need guidance from the Department of Administration about how to implement the change and how ongoing contracts or solicitations will be handled.
- Programs named: Minority and Women's Business Enterprises (M/WBE); Diversity Business Enterprises; Division of Supplier Diversity.
- Legal basis cited: Attorney General Todd Rokita's opinion citing the Equal Protection Clause of the Fourteenth Amendment.
- Administration goal: Shift procurement focus to merit and a new small-business assistance initiative.
Officials in county governments and municipal procurement offices said they will watch for formal guidance. Changes at the state level often ripple to local purchasing policies, particularly for jurisdictions that align their supplier preferences with state frameworks. The administration's pledge of a small-business program suggests an alternative approach aimed at boosting competition without using race- or sex-based categories.
Questions that remain
Key questions remain unanswered in the governor's announcement: how the state will define a "level playing field," how existing certification processes will be handled, whether any signed contracts that used M/WBE considerations will be renegotiated or grandfathered, and how the small-business initiative will be structured or funded.
| Item | Status from announcement |
|---|---|
| M/WBE preferences | To be ended per AG opinion |
| Diversity Business Enterprises / Division of Supplier Diversity | Components affected; review requested by Department of Administration |
| Small-business initiative | To be announced; details not yet released |
The governor's office described the change as compliance with constitutional principles rather than a policy choice. Legal observers have in recent years questioned whether narrowly tailored race- or sex-based contracting preferences can survive heightened judicial scrutiny; the attorney general's opinion applies that legal view to Indiana programs.
Stakeholders — including contractors, advocacy groups and local officials — will be looking for the Department of Administration's next steps, formal rule changes and administrative guidance. For now, the announcement sets a new direction for state procurement that has implications for how Hoosier businesses compete for public contracts.
This report will be updated as state officials release further details on implementation timelines and the small-business initiative.
