Court Opinion

ID: 3000100
Source: CourtListenerOpinion
Date Created: 2015-09-24 20:01:08.469898+00
Date Added: 2024-06-11T09:32:59.794995
License: Public Domain

In the
 United States Court of Appeals
               For the Seventh Circuit
                          ____________

No. 05-3981
NORTHERN CONTRACTING, INC.,
                                              Plaintiff-Appellant,
                                 v.

STATE OF ILLINOIS, ILLINOIS
DEPARTMENT OF TRANSPORTATION,
KIRK BROWN, in his capacity as the
Illinois Secretary of Transportation, et al.,
                                           Defendants-Appellees.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Eastern Division.
          No. 00 C 4515—Rebecca R. Pallmeyer, Judge.
                          ____________
    ARGUED APRIL 13, 2006—DECIDED JANUARY 8, 2007
                     ____________

  Before COFFEY, KANNE, and WILLIAMS, Circuit Judges.
  WILLIAMS, Circuit Judge. The question in this case is
whether the Illinois Department of Transportation vio-
lated the United States Constitution in administering a
program designed to increase the participation of socially
and economically disadvantaged individuals in Illinois
highway construction subcontracting. After a trial, the
district court concluded that the plaintiff had failed to
prove a constitutional violation. Plaintiff Northern Con-
tracting, Inc. now appeals, arguing that the State’s
2                                               No. 05-3981

disadvantaged business enterprise program is not nar-
rowly tailored to further a compelling governmental
interest. For the reasons that follow, we affirm the judg-
ment of the district court.

                   I. BACKGROUND
   Northern Contracting, Inc. (“NCI”) is a corporation that
specializes in the construction of guardrails and fences for
highway construction projects in Illinois. Generally,
Illinois highway construction projects are awarded to a
prime contractor on the basis of the lowest qualified bid,
and then the prime contractor completes the project
through the use of subcontractors who perform work such
as the guardrails work that is the specialty of NCI. Most
of NCI’s revenue comes through successful bids as a
subcontractor in state and local highway projects.
  In 2000, NCI filed this action seeking declaratory and
injunctive relief against the State of Illinois, the Illinois
Department of Transportation (“IDOT”), the United States
Department of Transportation (“USDOT”), the Secretary
of IDOT, and IDOT’s Bureau Chief of the Bureau of Small
Business Enterprises, under 42 U.S.C. §§ 1981, 1983, and
2000(d), claiming that IDOT’s disadvantaged business
enterprise (“DBE”) program is unconstitutional. IDOT is
the state agency responsible for construction and mainte-
nance of all transportation infrastructure in Illinois,
ranging from highways to airports. It receives approxi-
mately one third of its funding from the federal govern-
ment.
  IDOT’s DBE program is an outgrowth of federal policy.
Federal law establishes a national goal that ten percent
of federal highway funds are to be spent with DBEs. See
Surface Transportation Assistance Act of 1982, Pub. L. No.
97-424, § 105(f), 96 Stat. 2097, 2100 (1983); see also
No. 05-3981                                              3

Transportation Equity Act for the 21st Century (“TEA-
21”), Pub. L. No. 105-178, § 1101(b)(1), 112 Stat. 107, 113
(1998). USDOT’s implementing regulations for TEA-21
require all recipients of federal highway funds (such as
IDOT) to have an approved DBE program. See 49 C.F.R.
§ 26.21(a).
  To qualify as a DBE, a company must be at least 51%
controlled by “individuals who are both socially and
economically disadvantaged.” See 49 C.F.R. § 26.5. “So-
cially disadvantaged individuals are those who have
been subjected to racial or ethnic prejudice or cultural
bias because of their identity as a member of a group
without regard to their individual qualities.” 15 U.S.C.
§ 637(a)(5). “Economically disadvantaged individuals are
those socially disadvantaged individuals whose ability
to compete in the free enterprise system has been im-
paired due to diminished capital and credit opportunities
as compared to others in the same business area who are
not socially disadvantaged.” 15 U.S.C. § 637(a)(6)(A). A
DBE owner’s net worth cannot exceed $750,000. 49 C.F.R.
§ 26.67(a)(2)(i). The regulations require recipients to
presume, rebuttably, that women and members of racial
minority groups are socially and economically disadvan-
taged if an individual belonging to one of these groups
attests to these qualifications in a signed and notarized
document. See 49 C.F.R. § 26.67(a)(1). The regulations do
not foreclose the classification to members of any racial
group or gender. See id. A company with gross revenue
exceeding $16.6 million cannot qualify as a DBE. See 49
C.F.R. § 26.65(b). NCI is not a DBE. It is not owned by
women or members of any racial minority group.
  A recipient of USDOT funds, such as IDOT, must take
several steps in order to assure compliance with federal
law pertaining to its required DBE program. First, the
recipient must determine at the local level the figure that
would constitute an appropriate DBE involvement goal,
4                                               No. 05-3981

based on the relative availability of DBEs. 49 C.F.R.
§ 26.45(b). The regulations detail the various methods a
recipient may use to calculate DBE availability, but
under any method selected, a recipient must begin by
calculating a “base figure” for the relative availability of
DBEs, and then must examine evidence in the local area
to determine whether any adjustments to the base figure
are needed. 49 C.F.R. §§ 26.45(c), 26.45(d). These adjust-
ments lead to the final local goal. See id.
  After a local goal is established, the recipient must
submit its DBE plan to USDOT for approval, with explana-
tions as to how it arrived at the goal. 49 C.F.R. § 26.45(f).
USDOT is not allowed to withhold funds if a recipient
later fails to meet its goal unless there is a demonstra-
tion of bad faith on the part of the recipient. 49 C.F.R.
§ 26.47(a).
  At the implementation stage, a recipient is required to
maximize the portion of its goal that can feasibly be
achieved through race-neutral means. 49 C.F.R. § 26.51(a).
The regulations provide a non-exhaustive list of race-
neutral means through which a recipient can maximize
DBE participation, including such steps as providing
bonding assistance to all subcontractors, sponsoring
informational programs, and ensuring the widest possible
distribution of the recipient’s DBE directory. See 49 C.F.R.
§ 26.51(b).
  IDOT typically adopts a new DBE plan each year. In
preparing the Fiscal Year 2005 plan, IDOT retained
National Economic Research Associates, Inc. (“NERA”), a
consulting firm, to conduct a “custom census” in order to
determine DBE availability. The NERA custom census
was ultimately conducted by Dr. Jon Wainwright, an
economist. Wainwright’s analysis involved first identify-
ing the relevant geographic market (Illinois) and the
relevant product market (transportation infrastructure
No. 05-3981                                                  5

construction). Next, Wainwright surveyed Dun & Brad-
street’s Marketplace, which is a comprehensive database
of American businesses that identifies which businesses
are minority or woman-owned. Wainwright supple-
mented this survey with IDOT’s list of DBEs in Illinois.
After arriving at this beginning list of DBEs, Wainwright
corrected for errors in the data by surveying a random
sample from the group; this survey led him to conclude
that 22.8% of the firms listed as minority or woman-owned
were actually owned by white men. He then surveyed
all of the firms listed as not being minority or woman-
owned; this survey led him to conclude that 14.5% were
actually owned by minorities or women. In light of these
two surveys, Wainwright adjusted his calculation of
DBE availability and arrived at an overall relative avail-
ability of 22.77%. Wainwright then ran a regression
analysis of Census Bureau data on earnings and business
formation, and concluded that in the absence of discrimi-
nation, relative DBE availability would be 27.5%.
  In arriving at its final goal for Fiscal Year 2005, along
with the NERA report prepared by Wainwright, IDOT
considered: (1) a study NERA conducted for Metra1; (2)
expert reports used in Builders Association of Greater
Chicago v. Chicago, 298 F. Supp. 2d 725 (N.D. Ill. 2003);
(3) anecdotal information gathered at public hearings; (4)
data on DBE involvement in construction projects in
markets without DBE goals; and (5) IDOT’s own data on
the past use of DBEs. Included in IDOT’s own data was a
“zero goal” experiment conducted in 2002 and 2003, in
which IDOT did not use DBE goals on 5% of its contracts.

1
   The Northeast Illinois Regional Commuter Railroad Corpora-
tion is commonly known as “Metra.” It is a state-created entity
that develops and administers public railway transportation in
and around the city of Chicago.
6                                               No. 05-3981

On these contracts, DBEs ended up receiving approxi-
mately 1.5% of the total value of the contracts. Also of
note, IDOT examined the system utilized by the Illinois
State Toll Highway Authority, which does not receive
federal funding; though the Tollway has a DBE goal of
15%, this goal is completely voluntary—the average DBE
usage rate in 2002 and 2003 was 1.6%. On the basis of
all of this data, IDOT adopted 22.77% as its Fiscal Year
2005 DBE goal.
  Though 22.77% was IDOT’s overall goal, it determines
individually whether each project should carry a DBE
goal, based on the type of project and the availability of
DBEs to perform the subcontracting that will be neces-
sary. After the prime contractor is selected (on the basis of
the lowest qualified bid), the prime contractor has seven
days to report its DBE utilization plan to IDOT. IDOT
awards waivers and reductions of the goal if a contractor
later demonstrates that it made a good-faith effort but
was incapable of meeting the goal.
  At the outset of this litigation, NCI’s complaint alleged
that (1) TEA-21 and USDOT’s regulations were outside of
the scope of Congressional power; (2) these federal provi-
sions violated the Fifth Amendment’s guarantee of equal
protection; (3) the Illinois statute implementing the fed-
eral DBE requirement violated 42 U.S.C. §§ 1981, 1983,
2000(d) and the Fourteenth Amendment’s Equal Protec-
tion Clause. NCI requested declaratary and injunctive
relief.
  After discovery closed in 2003, all of the parties to this
suit filed cross-motions for summary judgment. The
district court granted only USDOT’s motion for summary
judgment, concluding that the federal government had
demonstrated a compelling interest (ending effects of
current and past discrimination in highway contracting
market) and that TEA-21 and its implementing regula-
No. 05-3981                                             7

tions were sufficiently narrowly tailored. The court
concluded that a trial was necessary to determine
whether IDOT’s program was narrowly tailored.
  At the bench trial, the State introduced the testimony
of Wainwright, the testimony of owners of DBEs, and
the testimony of an IDOT employee (Colette Holt) who
explained the Fiscal Year 2005 DBE plan. NCI introduced
the testimony of non-DBE prime contractors. The parties
stipulated that: (1) the percentage of IDOT’s total con-
tracting expenditures that went to DBEs was 15.19% in
2003 and 18.05% in 2004; (2) the percentage of IDOT’s
contracting expenditures received by DBEs on contracts
with DBE goals was 19% in 2003 and 17% in 2004; and (3)
the percentage of contracting expenditures that went to
DBEs on contracts with no DBE goals was 2% in 2003
and in 2004.
  At the conclusion of the trial, Judge Pallmeyer found
that IDOT’s Fiscal Year 2005 DBE program was nar-
rowly tailored to the compelling interest identified by
the federal government—remedying the effects of racial
and gender discrimination in the highway construction
market—and granted judgment for the defendants. NCI
now appeals from that judgment.2

                    II. ANALYSIS
  The only question that we must answer in this appeal is
whether NCI can prove that IDOT’s DBE program does
not pass constitutional muster. Since the program in-
volves racial classifications, we must employ strict scru-

2
 NCI did not appeal the grant of summary judgment for
USDOT.
8                                                    No. 05-3981

tiny in making this determination.3 See Adarand Con-
structors v. Pena, 515 U.S. 200, 235 (1995). In order to
survive strict scrutiny, a government program that uses
racial classifications must be narrowly tailored to serve a
compelling governmental interest. See id. Following a
bench trial, we review the district court’s legal conclusion
that IDOT’s program is constitutional de novo and its
factual determinations for clear error. Bricklayers Local 21
of Ill. Apprenticeship & Training Program v. Banner
Restoration, Inc., 385 F.3d 761, 766 (7th Cir. 2004);
Riggins v. Walter, 279 F.3d 422, 428 (7th Cir. 1995).

A. Compelling Interest
  NCI appears to have forfeited the argument that IDOT’s
DBE program does not serve a compelling governmental
interest, focusing instead on the narrow tailoring prong
of the test. Nevertheless, we think it prudent to briefly
address the compelling interest aspect of the strict scru-
tiny analysis and we agree with the district court that

3
   As we have previously discussed, the Supreme Court has not
made clear whether a more permissive standard applies to
programs, such as this one, which also involve gender classifica-
tions, but IDOT does not argue for a more permissive standard
for its gender-based initiatives and therefore we will apply
strict scrutiny to the entire program. See Builders Ass’n of
Greater Chicago v. County of Cook, 256 F.3d 642, 644-45 (7th Cir.
2001) (“Another unresolved issue is whether a different, and
specifically a more permissive, standard is applicable to preferen-
tial treatment on the basis of sex rather than race or
ethnicity . . . . But since here, as in Milwaukee County Pavers, the
County doesn’t argue for a different standard for the minority
and women’s set-aside programs, the women’s program must
clear the same four hurdles as the minority program.”) (citing
Milwaukee County Pavers Ass’n v. Fiedler, 922 F.2d 419, 422
(7th Cir. 1991)).
No. 05-3981                                                      9

IDOT has satisfied its burden here. As a state entity
implementing a congressionally mandated program, IDOT
relies primarily on the federal government’s compelling
interest in remedying the effects of past discrimination
in the national construction market.4 In the post-Adarand
era, two other circuits have considered the question of
whether a state may properly rely on the federal gov-
ernment’s compelling interest in implementing a local
DBE plan for highway construction contracting, and both
have concluded that a state may properly do so. See
Western States Paving Co., Inc. v. Washington State Dep’t
of Transp., 407 F.3d 983, 997 (9th Cir. 2005) (“When
Congress enacted TEA-21, it identified a compelling
nationwide interest in remedying discrimination in the
transportation contracting industry. Even if such dis-
crimination does not exist in Washington, the State’s
implementation of TEA-21 nevertheless rests upon the
compelling interest identified by Congress.”), cert. denied,
126 S. Ct. 1332 (Feb. 21, 2006); Sherbrooke Turf, Inc. v.
Minn. Dep’t of Trans., 345 F.3d 964, 970 (8th Cir. 2003)
(“When the program is federal, the inquiry is (at least
usually) national in scope. If Congress or the federal
agency acted for a proper purpose and with a strong
basis in the evidence, the program has the requisite
compelling government interest nationwide, even if the
evidence did not come from or apply to every State or
locale in the Nation.”), cert. denied, 541 U.S. 1041 (2004).
  As we noted above, NCI has not articulated any rea-
son for us to break ranks with our sister circuits. Indeed,
prior to the Supreme Court’s decision in Adarand, we

4
  IDOT also argues that it has independently demonstrated
that it has a compelling interest in “not passively channeling
federal dollars into an industry still suffering the ill effects of
discrimination.” We need not determine in this case whether
this independent interest can survive constitutional scrutiny.
10                                              No. 05-3981

considered the question of whether the federal govern-
ment’s interest in remedying discrimination in highway
construction contracting provided sufficient justification
for the state to engage in a federally mandated DBE
program, and we concluded that it did. See Milwaukee
County Pavers Ass’n v. Fielder, 922 F.2d 419, 423 (7th Cir.
1991) (“Insofar as the state is merely complying with
federal law it is acting as the agent of the federal govern-
ment and is no more subject to being enjoined on equal
protection grounds than the federal civil servants who
drafted the regulations . . . . If the state does exactly
what the statute expects it to do, and the statute is
conceded for purposes of the litigation to be constitutional,
we do not see how the state can be thought to have
violated the Constitution.”). As in Milwaukee County
Pavers, NCI has not challenged the constitutionality of
the applicable federal statutes and regulations on ap-
peal. And as the more recent decisions of the Eighth and
Ninth Circuits make clear, our compelling interest analy-
sis in this context should not be altered by Adarand.
Therefore, the question of compelling interest must be
decided in favor of IDOT. The only question is whether
IDOT’s program is narrowly tailored to achieving this
compelling interest.

B. Narrow Tailoring
  We are convinced that IDOT has satisfied its burden of
demonstrating that its program is narrowly tailored. Our
holding in Milwaukee County Pavers that a state is
insulated from this sort of constitutional attack, absent a
showing that the state exceeded its federal authority,
remains applicable. See Milwaukee County Pavers, 922
F.2d at 424-25; Tennessee Asphalt Co. v. Farris, 942 F.2d
969, 975 (6th Cir. 1991) (citing Milwaukee County Pavers
for the same point); see also Western States Paving, 407
No. 05-3981 11
F.3d at 1003-04 (McKay, J., concurring in part and dis-
senting in part) (noting the continuing applicability of
Milwaukee County Pavers and concluding that the plain-
tiffs should be limited to challenging the state’s ad-
herence to its grant of federal authority).5 In Adarand, the
Supreme Court did not seize the opportunity to con-
clude that our decision in Milwaukee County Pavers,
along with the Sixth Circuit’s in Tennessee Asphalt, was
incorrect. The Court only decided that federal programs
involving racial classifications must also be subjected to
strict scrutiny. See Adarand, 515 U.S. at 235. It did not
invalidate our conclusion that a challenge to a state’s
application of a federally mandated program must be
limited to the question of whether the state exceeded its
authority. Here, because NCI has not challenged on ap-
peal the district court’s grant of summary judgment for
the federal government, it has forfeited the opportunity
to challenge the federal regulations.

5
  The Ninth Circuit in Western States Paving concluded that a
state is still susceptible to an as-applied challenge to the nar-
row tailoring of its DBE program. See Western States Paving, 407
F.3d at 997-98. The court concluded that our decision in Milwau-
kee County Pavers did not address the situation of an as-applied
challenged to such a program. See id. at 998 n.9. But as Judge
McKay’s separate opinion correctly observed, the majority in
Western States Paving misread our decision in Milwaukee County
Pavers. See id. at 1003-04. Relatedly, the Eighth Circuit, in
Sherbrooke, concluded that this portion of our decision in
Milwaukee Pavers was compromised by the fact that the chal-
lenge in our prior decision occurred “[u]nder the prior law—when
the ten percent federal set-aside was more mandatory.”
Sherbrooke, 345 F.3d at 970. We are unconvinced by this
reasoning—all recipients are still required to have compliant
DBE programs in order to be eligible for federal transportation
funds, however federal law makes more clear now that com-
pliance could be achieved even with no DBE utilization if that
were the result of a good faith use of the process.
12                                              No. 05-3981

  We note that much of NCI’s argument regarding narrow
tailoring is based on our decision in Builders Association
of Greater Chicago v. County of Cook,6 but this reliance
is misplaced. Even before Adarand expanded the ap-
plicability of strict scrutiny to federal programs, state and
local governments that independently created affirmative
action programs were subject to strict scrutiny, and we
observed in Builders Association that the State was
required to demonstrate that its program was narrowly
tailored to remedy the specific past discrimination perpe-
trated by the State. See Builders Ass’n, 256 F.3d at 646.
But as discussed above, IDOT here is acting as an instru-
ment of federal policy and NCI cannot collaterally attack
the federal regulations through a challenge to IDOT’s
program. See Milwaukee County Pavers, 922 F.2d at 424
(“Insofar as the state is merely doing what the statute
and regulations envisage and permit, the attack on the
state is an impermissible collateral attack on the statute
and regulations.”); see also Kelley v. Bd. of Trs., 35 F.3d
265, 272 (7th Cir. 1994) (citing Milwaukee County Pavers
and concluding that plaintiffs’ attempted challenge to
University’s attempt to comply with requirements of Title
IX was impermissible “collateral attack on the statute”).
  Thus, the remainder of our inquiry is limited to the
question of whether IDOT exceeded its grant of authority
under federal law. NCI presses three arguments in this
respect. First, NCI argues that IDOT violated 49 C.F.R.
§ 26.45(c) by improperly calculating the relative avail-
ability of DBEs in Illinois. Second, NCI argues that IDOT
failed to properly adjust its base figure based on local
market conditions. Third, NCI argues that IDOT vio-
lated 49 C.F.R. § 26.51 by failing to meet the maximum
feasible portion of its overall goal through race-neutral
means. All three of NCI’s arguments fail.

6
    256 F.3d 642 (7th Cir. 2001).
No. 05-3981                                              13

   49 C.F.R. § 26.45(c) describes the appropriate method
for a recipient’s calculation of the local base figure—the
first step in the goal-setting process. The regulation
gives several examples of appropriate methodology, but
states explicitly in the paragraph preceding the list
that: “[t]hese examples are not intended as an exhaustive
list. Other methods or combinations of methods to deter-
mine a base figure may be used, subject to approval by
the concerned operating administration.” Id. Indeed, the
fifth item in the list is entitled “Alternative Methods” and
states: “You may use other methods to determine a base
figure for your overall goal. Any methodology you choose
must be based on demonstrable evidence of local market
conditions and be designed to ultimately attain a goal
that is rationally related to the relative availability of
DBEs in your market.” 49 C.F.R. § 26.45(c)(5). The other
four methods in the list are (1) “Use DBE Directories and
Census Bureau Data”; (2) “Use a bidders list”; (3) “Use
data from a disparity study”; and (4) “Use the goal of
another DOT recipient.” 49 C.F.R. § 26.45(c)(1)-(4). The
regulations provide detailed descriptions of each of these
four examples that are not relevant here.
  The regulations make clear that “relative availability”
means “the availability of ready, willing and able DBEs
relative to all businesses ready, willing and able to par-
ticipate on your DOT-assisted contracts.” 49 C.F.R.
§ 26.45(b). The gravamen of NCI’s first noncompliance
argument is that IDOT miscalculated the number of DBEs
that were “ready, willing, and able” by utilizing the
NERA custom census instead of a simple count of the
number of registered and prequalified DBEs under Illinois
Law. But as the district court correctly observed, NCI
has pointed to nothing in the federal regulations indicat-
ing that a recipient must so narrowly define the scope of
ready, willing, and available firms. The NERA custom
census reflects an attempt by IDOT to arrive at more
14                                                  No. 05-3981

accurate numbers than would be possible through use of
just the list. Indeed, the method used here by NERA is the
very methodology that was used by the Minnesota De-
partment of Transportation in the unsuccessful chal-
lenge to its program in Sherbrooke. See Sherbrooke, 345
F.3d at 973. We agree with the district court that the
remedial nature of the federal scheme militates in favor
of a method of DBE availability calculation that casts a
broader net. This conclusion is bolstered by guidance
offered by USDOT on its website, where it suggests that
recipients might supplement their DBE directories, for
goal-setting purposes, with list of parties “attending [DBE
certification] outreach sessions.” See Tips for Goal-Setting
in the Disadvantaged Business Enterprise (DBE) Program,
available at http://osdbu.dot.gov/?TabId=133. Moreover, it
seems illogical that the regulations would refer to five
different methods of calculating the relative availability
of DBEs if any method other than strict reference to the
list of registered and prequalified DBEs would be consid-
ered inappropriate.7 We are unpersuaded that NCI
has demonstrated any noncompliance with 49 C.F.R.
§ 26.45(b).
  NCI’s second objection, that IDOT failed to properly
adjust its goal based on local market conditions, also fails.
As IDOT correctly responds in its brief, 49 C.F.R.
§ 26.45(d) does not require any adjustments to the base
figure after the initial calculation, but simply provides
recipients with authority to make such adjustments if
necessary. NCI’s argument is that IDOT essentially
abused its discretion under this regulation by failing to
separate prime contractor availability from subcon-

7
   The method that NCI argues for here is essentially the “bidders
list” method that the regulations list as one possible method of
calculating relative availability. See 49 C.F.R. § 26.45(c)(2).
No. 05-3981                                              15

tractor availability. However, NCI has not identified any
aspect of the regulations that requires such separation.
Indeed, as the district court observed, the regulations
require the local goal to be focused on overall DBE partici-
pation in the recipient’s DOT-assisted contracts. See 49
C.F.R. § 26.45(a)(1). It would make little sense to separate
prime contractor and subcontractor availability as sug-
gested by NCI when DBEs will also compete for prime
contracts and any success will be reflected in the recipi-
ent’s calculation of success in meeting the overall goal.
  Finally, we find meritless NCI’s argument that IDOT
violated 49 C.F.R. § 26.51 by failing to meet the maximum
feasible portion of its overall goal through race-neutral
means of facilitating DBE participation. Under 49 C.F.R.
§ 26.51:
    Race-neutral DBE participation includes any time
    a DBE wins a prime contract through customary
    competitive procurement procedures, is awarded a
    subcontract on a prime contract that does not
    carry a DBE goal, or even if there is a DBE goal,
    wins a subcontract from a prime contractor that
    did not consider its DBE status in making the
    award (e.g., a prime contractor that uses a strict
    low bid system to award subcontracts).
NCI argues that IDOT’s calculation of past levels of race-
neutral DBE participation erred by failing to include a
calculation of the instances when DBEs winning subcon-
tracts from prime contractors on goal projects where the
prime contractor did not consider DBE status. IDOT
calculated the level of past race-neutral DBE participa-
tion by assessing the rate of DBEs winning contracts on
no-goal projects. Though the regulations indicate that
where DBEs win subcontracts on goal projects strictly
through low bid this can be counted as race-neutral
participation, NCI points to no aspect of the regulations
16                                           No. 05-3981

requiring IDOT to engage in a search for this informa-
tion for the purpose of calculating past levels of race-
neutral DBE participation. As IDOT explains, this evi-
dence was not before it at the time that the Fiscal Year
2005 plan was adopted and NCI has not produced any
evidence proving that IDOT’s past participation figure
is invalid. NCI accurately points out that, under 49
C.F.R. § 26.51(f)(1), IDOT was required to implement its
program without setting contract goals if, under IDOT’s
approved projection, it estimated that it was able to meet
its goal strictly through race-neutral means. But IDOT’s
projection yielded no such conclusion.
  In any case, the record makes clear that IDOT uses
nearly all of the methods described in § 26.51(b) to maxi-
mize the portion of the goal that will be achieved through
race-neutral means. Among other methods, IDOT has
sponsored different types of informational sessions,
provided technical and financial training to DBEs and
other small businesses, and has initiated a bonding and
financing assistance program. NCI has failed to demon-
strated that IDOT has not maximized the portion of its
goal that will be met through race-neutral means. This
failure reflects NCI’s broader inability to demonstrate
that IDOT’s DBE program is in violation of the Constitu-
tion.

                  III. CONCLUSION
 The judgment of the district court is AFFIRMED.
No. 05-3981                                        17

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-02-C-0072—1-8-07