Airports in the U.S. are largely government-owned, which isn’t how this works in much of the world. They rely heavily on federal funding, especially grants that come heavily-laden with conditions. That includes what’s come to be known as DEI but that’s actually explicit racial (and gender) quotas in contracting.
The Department of Transportation’s Disadvantaged Business Enterprise programs, including the Airport Concession Disadvantaged Business Enterprise initiative, will continue despite efforts by the Trump administration to end DEI in aviation and throughout the federal government. That’s because they’re written into law and regulation – they can’t simply be reversed by an Executive Order.
The Disadvantaged Business Enterprise Program is implemented under 49 CFR Part 26, and meant to ensure that minority-owned and women-owned businesses have equitable opportunities to participate in federally funded transportation projects.
The Airport Concession Disadvantaged Business Enterprise Program is mandated by 49 U.S.C. § 47107(e) and governed by 49 CFR Part 23, specifically focusing on airport concessionaires. Established in 1987 and most recently amended in 2012, the ACDBE program aims to ensure that concession contracts at airports are accessible to disadvantaged businesses. That means restaurants, retail shops, and even bank and independent lounges.
- Airports cumulatively receiving grants of $250,000 or more in a federal fiscal year are required to implement.
- Contracts must be analyzed for meeting 3-year targets, gathering data from companies bidding and making sure all contracts contain required legal language supporting these goals.
- Airports must monitor contractor performance with respect to agreed-upon participation levels. They must also require certifications that prime contractors are paying their subcontractors on time.
- Written permission from the airport is required before a contractor can end a DBE subcontractor’s project participation.
- Yearly reports are required which are then reviewed by the FAA Office of Civil Rights. Airports have to keep policies, procedures, and documentation ready for audit.
Businesses seeking to participate in these programs must undergo a certification process, demonstrating that they are minority or women-owned making them eligible to bid on federal contracts, with contracting agencies mandated to meet specific participation goals, typically expressed as a percentage of total project contracts. Airports receiving federal funds are required to allocate a portion of their contracts in a quota system.
In practice, meeting these quotas often involves strategic partnerships between non-minority-owned businesses and minority-owned enterprises.
- Joint Ventures: Two or more businesses combine resources to bid on large projects, ensuring that minority participation criteria are met.
- Subcontracting: A primary contractor may hire a DBE or ACDBE as a subcontractor, allowing the minority-owned business to contribute specific services or components to the project.
Often these partnerships are superficial, with non-minority businesses partnering with minority-owned companies solely to satisfy regulatory requirements. The minority business gets paid for ‘participation’.
The President has ordered the FAA not to engage in diversity hiring, which includes in the hiring of air traffic controllers. The agency has, in the past, limited entry into training programs with a focus on diversity (but all candidates were still screened for competence, there’s no indication this compromised safety). Also rescinded is President Johnson’s Executive Order 11246, enacted on September 24, 1965, focused on federal hiring broadly.
However these efforts do nothing to end FAA contracting rules that explicitly impose racial and gender diversity quotas on airport contracting.