Gov. Mike Braun announced this week that Indiana will end its diversity business enterprises contracting practices and replace them with merit-based hiring practices.
The decision comes on the heels of a legal opinion from Indiana Attorney General Todd Rokita which found that race- and sex-based contracting preferences in the minority and women’s business enterprises components of the state’s diversity business enterprises are unconstitutional under the equal protection clause of the Fourteenth Amendment, according to a press release.
“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. Indiana has replaced divisive, politically-charged programs with a focus on merit, excellence and innovation: a level playing field where every single Hoosier has the chance to get ahead with hard work,” Braun said in the release.
Rokita was asked to review the legality of the governor’s commission on supplier diversity, the minority and women’s business enterprises program and related race- and sex-based contracting requirements in August 2025 by the Indiana Department of Administration, according to the release.
“This blatantly illegal program singles out some Hoosiers for disfavored treatment purely because of their sex or the color of their skin, and it insults other Hoosiers by suggesting they cannot compete on a fair playing field. The program is both un-American and unconstitutional,” Rokita said in the release.
The state created its diversity business program by statute in 1983. It required state agencies to attempt to allocate a minimum percentage of state funds spent on a given contract to businesses owned by women and minority groups. The state previously listed information about the program and participation goals on the Indiana Department of Administration website, but as of Friday, the links no longer worked. According to Indiana Public Radio, the state aimed for participation goals of 8% for minority-owned businesses and 10% for women-owned businesses.
State Rep. Earl Harris Jr., D-East Chicago, and chair of the Indiana Black Legislative Caucus, said Braun’s decision eliminates opportunities for Black Hoosiers, women and other minority business owners “who have historically been shut out of contracting — not because they lack merit or talent, but because the system was built to exclude them.”
“The DBE program is not discriminatory. It exists because ‘race-neutral’ policies failed for decades to ensure marginalized communities were given equal opportunities. Minority- and women-owned businesses still face very real barriers: limited access to capital, exclusion from professional networks and a small fraction of government contracting dollars. Removing these protections does not eliminate those barriers. It simply relieves the state of our obligation to acknowledge them,” Harris said.
The diversity business enterprises program didn’t guarantee anyone a contract based on race or sex, but aimed to broaden access to public contracting to qualified businesses from every background, Harris said.
“When more firms can bid, competition goes up, costs come down and innovation follows. And when small, minority-owned and women-owned businesses win contracts, those dollars create jobs and investments in communities that have historically seen the least economic development,” Harris said.
Braun claims to be pro-business, but his action will decrease the pool of qualified bidders and will cost the state more on contracts, weaken competition and make the state’s economy less inclusive, Harris said.
“The governor says he is replacing DEI with ‘MEI’ – merit, excellence and innovation. My question is simple: Who decides that counts as merit, and how? For generations, ‘merit’ was defined in ways that kept Black Hoosiers, women and other minority owners out of the room entirely. This latest move, like so many of the governor’s actions on diversity, equity and inclusion, will only drag Indiana backward,” Harris said.
Senate Democratic Leader Shelli Yoder, D-Bloomington, said in a statement that Braun’s action tells women and minority business owners that programs that open doors for them are unfair, while his new commerce secretary Chuck Goodrich will remain CEO of Gaylor Electric, which received more than $1 million in tax incentives from the state in 2024.
“If you are a woman or minority entrepreneur trying to break into a marketplace where Indiana’s own research documents serious disparities, the governor closes the door and calls it merit. If you are already connected to power, the door stays wide open,” Yoder said.
Hoosiers can see that state leaders are manufacturing another political spectacle while utility bills increase and affordable childcare, healthcare, and housing is hard to find, Yoder said.
“In the governor’s hands, ‘merit’ is a euphemism for preserving the status quo: closing doors on entrepreneurs who have historically been excluded while protecting access for people already connected to power. That is not a level playing field. It is a double standard,” Yoder said.
