U.S. DOT Secretary Sean Duffy reminds grant recipients they are required to comply with federal laws and regulations – no DEI activities and full cooperation with Immigration and Customs Enforcement.  

On April 24^th, U.S. Department of Transportation (DOT) Secretary Sean Duffy sent a letter to all grant recipients reminding them they are required to comply with federal laws and regulations. This requirement includes that they do not engage in “discriminatory policies or practices designed to achieve so called ‘diversity, equity, and inclusion,’ or ‘DEI’ goals.” In addition, their legal obligations require “cooperating with and not impeding U.S. Immigration and Customs Enforcement (ICE)…in the enforcement of Federal immigration law.” 

So, what does this mean? Are they targeting state DOTs? Airports? Transit Systems? It is to be determined how far and wide they will go on enforcement of this notice. AGC will closely monitor how this is implemented. If you hear of any cases of this happening in your state, please let us know. 

Does this apply to discretionary grants and formula funds? As we have reported in the past, administrations have historically added their own priorities to discretionary grant programs. However, this would take things a step further, and they might not be explicit as to why a project was not actually selected. Again, we will closely monitor how this is implemented. 

From a formula fund perspective, they would likely face legal challenges. As you are probably aware, AGC has thoroughly covered the topic of impoundment, which is when the executive branch withholds funds provided by Congress. As it relates highway formula funding, Congress clearly stated that FHWA is to withhold a small percentage of funding from a state but for very specific instances – like if the state fails meet certain requirements like having a minimum drinking age, zero blood alcohol concentration (BAC) tolerance for minors, and commercial driver’s license provisions. All safety related reasons and prescribed by Congress in law.  

Is this targeting the DBE Program? The letter does not mention the Disadvantaged Business Enterprise (DBE) program. The DBE program was authorized in law by Congress and reaffirmed multiple times since then, most recently by the Infrastructure Investment and Jobs Act. Therefore, DBE requirements remain in effect. 

Is this only happening with transportation funding? No, the Trump administration appears to be doing this across government. Here are two instances where the courts blocked their efforts for withholding funds over DEI and sanctuary cities.  

For additional information, please contact Alex Etchen.