Conservative Group Files Complaint Alleging Port Authority Favored Minority-Owned Firms, Allowed Overbids
America First Legal says Port Authority reserved 20% of contracts for MBEs and allowed price preferences up to 10%, warning federal funding could be at risk.
A conservative legal group filed a civil rights complaint Monday accusing the Port Authority of New York and New Jersey of unlawfully reserving one-fifth of its contracts for minority-owned businesses and allowing those vendors to bid up to 10% above the lowest price. America First Legal (AFL) said the practices amount to race-based discrimination that could put billions in federal funding at risk if found to violate anti-discrimination laws and recent executive actions curbing diversity, equity and inclusion programs.
The complaint was submitted to civil rights offices at the Department of Transportation, the Environmental Protection Agency and the White House Office of Management and Budget. AFL senior counsel Andrew Block said the authority “is going to collect and spend over $9 billion this year” and that its equity initiatives were diverting resources and raising costs for travelers, ratepayers and consumers.
The filing alleges the Port Authority guaranteed 20% of contracts to so-called minority-owned business enterprises, or MBEs, and applied a “price preference” that could result in payment of up to 10% more than the lowest bid. "This means that for every million dollars on a contract bid, the Port Authority will pay up to an extra $100,000 to engage in race-based discrimination," the complaint states, adding the practice is “illegal and simply un-American.”
AFL also targeted the authority’s “Diversity Management” portal, which it described as a program that helps MBEs get certified and connect with vendors and that is accessible to businesses based on the race or sex of the owner. The complaint cites public statements by Port Authority diversity and operations leaders as evidence of a long-standing DEI focus. Jose Febrillet, the authority’s chief diversity, equity and inclusion officer, told The American Journal of Transportation in September 2024 that the agency has “a collective commitment to equity at all levels.” Aviation Director Sarah McKeon and PATH rail director Clarelle DeGraffe are quoted in the complaint as supporting broader representation and promotion of minority professionals.
AFL argued those statements and the agency’s 2021 “comprehensive Diversity Recruitment Strategy” show the Port Authority has operated a DEI program for decades and used race in contracting and promotion decisions. "Simply put, race is being used to create an uneven playing field," Block wrote in the complaint, which frames the practices as violations of the Civil Rights Act of 1964.
The complaint underscores the scale of the Port Authority’s operations and its federal funding ties. It notes that the agency received at least $451 million from the EPA in 2024 through a Clean Ports Program and that the DOT has given the authority more than $3.6 billion since 2008. The Port Authority oversees airports, bridges, tunnels, seaports and rail facilities through which more than $200 billion in containerized goods and roughly 195 million people pass each year, the filing says. AFL warned that these federal grants could be jeopardized if the authority’s policies are found to flout federal anti-discrimination requirements or recent executive orders aimed at rolling back DEI-based hiring and contracting practices.
The complaint asks federal civil rights offices to investigate and to consider whether the Port Authority’s policies violate federal statutes and executive actions. It also asserts that price preferences waste taxpayer and ratepayer resources and undermine “safety, efficiency, and improvement” at major transportation hubs.
A Port Authority representative did not respond to a request for comment, according to reports. Representatives for the DOT, EPA and OMB did not immediately respond to requests for comment.
The complaint sets the stage for a potential federal review of the authority’s contracting and vendor-certification practices and could prompt legal challenges over whether targeted set-asides and price preferences amount to unlawful discrimination. The Port Authority’s spending and the role it plays in regional and national supply chains mean any federal action could have operational and financial implications for projects that rely on federal grants and contracts.