Indiana contract reform
Indiana ends race- and gender-based contracting preferences, shifts to merit system.
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Key Points
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Indiana's 1983 Minority and Women’s Business Enterprises program was created to promote diversity in state contracts and included participation goals (about 8% for minority-owned businesses and 10% for women-owned businesses); the legal review covered the entire Diversity Business Enterprises program and noted a five-year diversity study was due last year.
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Attorney General Rokita’s advisory opinion is nonbinding, and he said he will work with lawmakers to repeal the 1983 statute governing the program.
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Rokita cited the 2023 Harvard decision, Students for Fair Admissions v. Harvard, as part of the rationale that race-based preferences in the program are unconstitutional.
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The Braun administration’s plan is to wind down the program and replace it with a merit-based system, with the Department of Administration tasked with discontinuing unlawful aspects of the program.
Indiana is scrapping its race- and gender-based contracting preferences, ending a program that has been in place since 1983. Governor Mike Braun announced the state will replace the Minority and Women's Business Enterprises program with a merit-based system after Attorney General Todd Rokita ruled it unconstitutional. WBIW reported that Braun called the move a shift toward "qualifications, performance, and competition" to ensure "a level playing field for all Hoosiers."
The old program set participation goals of about 8% for minority-owned businesses and 10% for women-owned businesses in state contracts. Rokita found those targets violate the Equal Protection Clause of the Fourteenth Amendment. The Department of Administration has been tasked with winding down the unlawful parts of the program, according to WTHI-TV.
A 40-Year-Old Program Comes to an End
Indiana created its Minority and Women's Business Enterprises program in 1983. The goal was to boost the share of state contracts going to minority- and women-owned businesses. For decades, those participation targets shaped how the state awarded public money. Now, Rokita says those race- and gender-based goals cross a constitutional line, according to Hoodline.
Rokita's opinion is nonbinding — meaning it does not automatically change state law. He said he will work with state lawmakers to repeal the 1983 statute that created the program. A five-year diversity study that was supposed to review the program was already overdue, adding pressure for a legal and policy review, according to WBIW.
Harvard Ruling Used to Justify Indiana's Shift
Rokita leaned on a landmark 2023 U.S. Supreme Court decision to support his opinion. In Students for Fair Admissions v. Harvard, the Court struck down race-based admissions at colleges. Rokita argued the same logic applies to Indiana's state contracting program. Race-based preferences, he said, cannot survive constitutional scrutiny under that ruling, according to Washington Examiner.
Not all parts of the diversity program are being eliminated. Rokita's opinion noted that preferences for veteran-owned businesses may still be lawful. Only the race- and gender-based components of the Diversity Business Enterprises program are being discontinued, WTHI-TV reported.
Democrat Accuses Braun of Playing Favorites
Not everyone is on board with the change. State Sen. Shelli Yoder, the Democratic leader of the Indiana Senate, pushed back hard. She accused Braun of a double standard — ending opportunities for minority and women business owners while favoring politically connected businesses in state contracts, according to The Bloomingtonian.
Yoder's criticism points to a broader debate. Supporters of the old program say it helped level a playing field that was historically tilted against minority and women entrepreneurs. Braun and Rokita frame the new system differently — as a move away from what they called "divisive, politically charged programs" toward merit, excellence, and open competition.
What Comes Next for State Contracting
The Braun administration says the transition to a merit-based system is now underway. The Department of Administration is leading the effort to phase out the race- and gender-based parts of the program. No firm timeline has been set publicly for when the new system will be fully in place, according to WBIW.
Rokita also plans to push for a legislative fix. He wants state lawmakers to formally repeal the 1983 law so the old program cannot be revived by a future administration. Until that happens, the change rests on an advisory opinion — one that carries weight but not the force of law, Washington Examiner noted.
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