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Senate committee gives due pass to resolution urging end to DBE program after contractor testimony
Summary
The Senate Industry and Business Committee voted 5-0 to give a due-pass recommendation to Senate Concurrent Resolution 4021, which urges Congress and the governor to end the Disadvantaged Business Enterprise (DBE) program. Contractors and trade groups told the committee the program raises costs and forces use of higher-priced DBE quotes.
The North Dakota Senate Industry and Business Committee voted 5-0 to give a due-pass recommendation to Senate Concurrent Resolution 4021, a measure urging the U.S. Congress and the governor to end the federal Disadvantaged Business Enterprise program.
Senator Gerhardt, sponsor of SCR 4021 and representing District 34 in Mandan, told the committee he brought the resolution after “I've experienced over my 20 years working in the construction industry” and because he believes the program leads to waste and forces contractors to use higher-priced quotes. He asked committee members to give the resolution a due pass.
The resolution and testimony centered on how North Dakota's DBE implementation affects bids for federally funded projects. Carrie Burke, representing the Associated General Contractors of North Dakota, said the program has shifted from a “goal” to a de facto mandate and called the way some DBE supplier arrangements are used “a paperwork magic trick costing North Dakota taxpayers money.” Amber Schimborn, vice president and EEO officer at Northern Improvement Company, told the committee a recent shared-use path bid illustrated the problem: her company’s low bid was $1.9 million—$270,000 less than the next bidder—but it was about $11,000 short of the DBE goal. She said some DBE quotes were 33% to 65% higher than non-DBE competitors and that administrative reconsideration and rebidding have added time and expense; she cited a project that was rebid and cost taxpayers an additional $400,000.
Witnesses described several recurring features of the state program: NDDOT sets DBE percentage goals on federally aided projects; contractors must document ‘‘good faith efforts’’ and, in practice, often must include DBE quotes even when those quotes are materially higher. Amber Schimborn said goals are calculated as a percentage of an engineer's estimate on a project and that program changes have reduced suppliers’ eligible credit (for example, reclassifying suppliers as distributors and lowering the portion that counts toward DBE credit), while the numerical goals have not been reduced.
Representatives of the Associated General Contractors and Northern Improvement also said the construction trade association at the national level is tracking federal changes and that the implementation differences among neighboring states (some of which use race-neutral programs) demonstrate there are alternative approaches to meeting federal participation requirements.
Senator Gerhardt and several witnesses urged action at the federal level; Gerhardt cited a recent Kentucky court decision (October 2024) that found a state’s DBE process unconstitutional, and he suggested North Dakota officials explore legal and legislative options. Committee members asked clarifying questions about how goals are calculated, whether goals require direct hiring or only documented good-faith outreach, and how DBE ownership rules apply to suppliers and trucking firms.
After testimony and questions, the committee moved and seconded a due-pass recommendation. The roll call recorded five ayes and no nays, and the committee named Senator Engott as carrier for the resolution to the next stage.
Votes at a glance: the committee recorded a due-pass recommendation for SCR 4021 by a 5-0 vote (mover: Senator Klein; seconder: Senator Kessel). The committee will send the resolution forward for further consideration.
