Indiana Drops Diversity Policy for Government Contracts

Quick Hits

• Indiana recently announced it will discontinue a state policy requiring that a minimum percentage of spending in government contracts go to minority-owned and women-owned businesses.
• Indiana Attorney General Todd Rokita recently released an advisory opinion, concluding that the minority- and women-owned enterprise components of Indiana’s Diversity Business Enterprises (DBE) program are unconstitutional.
• These actions leave in place the state program establishing preferences for contracting with businesses owned by veterans.

Under the DBE program, created by statute in 1983, state agencies were required to allocate a minimum percentage of state contracting funds to businesses owned by members of minority groups or women. A business qualified as minority-owned if it was at least 51 percent owned, operated, and controlled by U.S. citizens who are Black, Hispanic, Asian, or Native American. Likewise, a business qualified as female-owned if it was at least 51 percent owned, operated, and controlled by one or more women.

The attorney general’s advisory opinion stated that those two components of the DBE program are discriminatory and violate the U.S. Constitution’s Equal Protection Clause and Fourteenth Amendment. As a result, the governor moved to eliminate those components. The changes do not affect the state’s preferences for contracting with businesses owned by veterans. The attorney general indicated that contracting preferences for businesses domiciled in Indiana also would be legal.

The state-level action follows recent steps by federal agencies to stop what the Trump administration considers illegal diversity, equity, and inclusion (DEI) programs in the public sector and private sector. In the last year, the U.S. Equal Employment Opportunity Commission (EEOC) has shifted enforcement priorities to emphasize discrimination claims by majority-group plaintiffs, such as white men and Christians. The U.S. Department of Justice (DOJ) has filed several lawsuits against states, universities, and public-school systems, contesting diversity programs in recruiting and hiring.

On March 26, 2026, President Donald Trump released an executive order, directing federal agencies to ensure that federal contracts include a clause prohibiting DEI programs in recruiting, employment, and resource allocation.

Next Steps

In the future, businesses in Indiana can expect the state to stop accepting applications to certify businesses as minority-owned or women-owned. The state’s policy change does not mean that minority-owned and women-owned businesses cannot win state contracts.

Ogletree Deakins’ Indianapolis office and Diversity, Equity, and Inclusion Compliance Practice Group will continue to monitor developments and will post updates on the Diversity, Equity, and Inclusion Compliance, Government Contracting and Compliance, and Indiana blogs as additional information becomes available.

This article and more information on how the Trump administration’s actions impact employers can be found on Ogletree Deakins’ Administration Resource Hub.

Lauren B. Hicks is a shareholder in Ogletree Deakins’ Indianapolis office.

Janet Q. Lewis is senior counsel in Ogletree Deakins’ Greenville office.

This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.

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