Indiana Draws Backlash From Black Businesses After Gov. Deads Race-Based Criteria In Contracts

The policy change has drawn criticism from entrepreneurs who say the previous law helped address longstanding barriers.

Indiana business owners are raising concerns after Gov. Mike Braun announced the state will no longer consider race or gender when awarding government contracts, replacing the previous approach with what his administration calls a merit-based system, WTHR 13 reports.

Braun’s announcement follows a legal opinion issued by Indiana Attorney General Todd Rokita, who concluded that the state’s minority- and women-owned business contracting statute is unconstitutional in light of the U.S. Supreme Court’s 2023 decision ending race-conscious admissions policies in higher education. As a result, the administration said future procurement decisions will emphasize “Merit, Excellence, and Innovation,” or MEI. The policy change has drawn criticism from some entrepreneurs who say the previous law helped address longstanding barriers to accessing state business opportunities.

The debate unfolded as hundreds of entrepreneurs gathered at the Indiana Convention Center in Indianapolis July 18 for a marketplace celebrating Black-owned businesses. While the event highlighted business growth and innovation, many attendees said the governor’s decision overshadowed the celebration.

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Carmela Toler, who owns a company providing home services for Hoosiers with developmental and intellectual disabilities, said the previous contracting framework gave businesses like hers a realistic opportunity to compete for state work.

“It gave us at least some edge of getting in, because for a long time, we never got in,” Toler said to the outlet.

Dr. Michael J. Bluitt, vice president of HCO Architects, said his firm benefited from opportunities created under the Indiana law and questioned why the policy is being abandoned after decades in place.

“We’re just trying to keep the playing field even,” Bluitt said. “Why pull it now?”

U.S. Rep. André Carson also criticized the decision, saying he has heard from business owners who worry the new approach could make it more difficult for historically underrepresented companies to secure state contracts.

“In a perfect world, that would be true, but this isn’t perfect,” Carson said, referring to the state’s plan to adopt a race-neutral contracting process.

The policy marks a significant shift in Indiana’s contracting process and is expected to influence how businesses compete for future state-funded projects.