Kansas City MBE/WBE Quotas Risk Federal Funding After SCOTUS Ruling

A lot of locals might not understand that THE RULES HAVE CHANGED when it comes awarding government contracts and Kansas City has been slow to catch up to the new way of doing business. 

We've noticed that even local journalists have trouble understanding how recent Supreme Court decisions can be applied to a myriad of local endeavors.  

And so . . . With thanks to AWESOME TKC INSIDERS . . . We wanted to share an insightful think piece sent our way that might help explain the risks that KCMO confronts if we keep the old way of doing biz intact. 

The basics . . .

KANSAS CITY AWARDING MBE/WBE QUOTA CONTRACTS MIGHT SOON BE KAPUT!!!

This could be a shocker to some because the program helped to create quite a few local millionaires and a very real industry built around this program . . . The "front companies" alone spawned dozens of careers in the local construction game and on city council.

Accordingly . . . We're going to park this GROUNDBREAKING REPORT at the top of the page for awhile and then hopefully revisit as we move forward . . .  

KCMO’s Contractor Quota Program Puts Federal Funds to KC in Jeopardy 

“I’ll take City programs that could destroy our City’s finances for $2 billion, Alex.”

The City of Kansas City, MO has a program whose existence is unconstitutional, racist, sexist, and puts the City’s Federal funding at risk.  It’s a tsunami of a problem heading our way.  Trying to keep it simple.

The Problem:

The city’s Minority and Women Business Enterprise (MBE/WBE) program, is putting hundreds of millions of dollars in federal funding at risk.  The MBE/WBE program demands that businesses be 51% owned by minorities or women to qualify, then slaps race- and gender-based quotas on City projects.  Contractors must jump through hoops to meet these goals or face penalties.  Maybe even worse… large, extremely profitable companies race to the top of the heap because they have a female or a minority at the helm.  City employees who oversee projects are threatened by having their project’s canceled and their jobs threatened if they don’t meet the MBE/WBE quotas for those projects or pick the “right” contractors.  All while the City pats itself on the back for “equity” efforts.

Why is this a problem?  The program is flat-out unconstitutional. The U.S. Supreme Court’s 2023 ruling in "Students for Fair Admissions, Inc. v. Harvard" (SFFA) made it crystal clear—race-based programs face strict scrutiny, and governments must prove a compelling, narrowly tailored reason for using race, with no viable race-neutral alternatives. Kansas City’s MWBE program doesn’t even come close to meeting that standard. It’s a broad, feel-good initiative with no recent disparity study to justify its race-based quotas.

The Danger to KCMO Citizens:

Kansas City relies heavily on federal funding.  In 2024, Missouri raked in over $2 billion in transportation grants alone, with Kansas City as a major beneficiary for projects like the KC Streetcar. Add in housing and urban development grants, and the city’s exposure is staggering. If the DOJ or a court finds the MWBE program violates Title VI (and it does), federal agencies could yank funding faster than you can say “lawsuit.” We’re talking hundreds of millions in lost grants, stalled infrastructure projects, and a budget crisis that’ll hit taxpayers square in the wallet.

And it’s not just about money. The city faces crushing legal costs if sued by contractors or advocacy groups—lawsuits it’s almost guaranteed to lose given recent court trends. Reworking the program to comply with the law will burn through administrative resources, too, which is just another reason to abandon the offensive program.

Justice Department Releases Guidance for Recipients of Federal Funding Regarding Unlawful Discrimination 

https://www.justice.gov/ag/media/1409486/dl?inline

Why KCMO is at Risk:

This week U.S. Attorney General Pam Bondi dropped a bombshell memo that should’ve sent Kansas City scrambling to rewrite its MWBE program. The Department of Justice (DOJ) warned that race-based contracting programs violate the Equal Protection Clause and Title VI of the Civil Rights Act of 1964, which bars race discrimination by recipients of federal funds. The memo didn’t mince words: cities using programs like Kansas City’s risk losing federal dollars—potentially billions—for transportation, housing, and community development. It even pointed to fresh court rulings, like "City of Jacksonville v. Adams" (2024), where race-based set-asides were struck down, and ongoing DOJ lawsuits against cities like Chicago for similar violations.

The memo is so blunt even Mayor Funky would understand it:

"Prohibition on Protected Characteristics as Criteria: Using race, sex, or other protected characteristics for employment, program participation, resource allocation, or other similar activities, opportunities, or benefits, is unlawful, except in rare cases where such discrimination satisfies the relevant level ofjudicial scrutiny."

What should the City be doing… but likely won’t:

You’d think Kansas City’s Law Department, tasked with keeping the city out of legal hot water, would’ve read the DOJ memo or the Supreme Court decision and slammed the brakes on the MWBE program. Instead, they’re MIA. No public statements, no urgent memos to the Council, no push for a new disparity study or race-neutral alternatives like the Small Local Business Enterprise (SLBE) program that doesn’t use race or sex as a condition of winning a contract.  It’s as if they’re hoping the Feds won’t notice—or worse, they’re too clueless to see the trainwreck coming.
The City Council isn’t off the hook either. By clinging to a program that screams “unconstitutional,” they’re prioritizing political posturing over fiscal and legal responsibility. But the Law Department’s job is to be the grown-up in the room, not to nod along while the Council plays with fire. Their silence is a dereliction of duty, plain and simple.

The Money Line…Taxpayers Will Pay the Price:

Kansas City’s MWBE program is a legal disaster waiting to happen, and the city’s refusal to act is inexcusable. The DOJ has sounded the alarm, courts are striking down similar programs left and right, and the feds are ready to pull funding from cities that don’t comply. The city faces crushing legal costs when, NOT IF, it’s sued by contractors or advocacy groups—lawsuits it’s almost guaranteed to lose given recent court trends. Yet the Law Department sits on its hands, letting the City Council steer the city toward a financial cliff. When the federal funds dry up and the lawsuits roll in, don’t be surprised—it’s the predictable result of a city too stubborn to follow the law and a legal team too spineless and too incompetent to intervene.

Now what?  The City Council keeps pushing the MWBE program like it’s business as usual, and the Law Department won’t tell the City Council to stop breaking the law. This isn’t just negligence—it’s a reckless gamble with funds that keep this city and its projects moving forward.  When we lose that, all of our citizens will be much worse off.
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Developing . . .