Exclusive: Chicago Contractors Caught in the Crossfire - How a $2.1 Billion Funding Freeze Is Rekindling the Race-Based Contracting Fight

On the ground in Chicago: contractors on both sides say the policy debate is more than legal theory — it threatens livelihoods, jobs, and long-promised transit upgrades

Natalie C. Frank, Ph.D October 4, 2025

Bill Jacobus/flickr [CC BY 2.0]

*Names changed

When Javier won his first city subcontract six years ago, it changed everything. Morales, a Latino contractor who runs a small firm on the South Side, used that project to hire two more workers, buy safer equipment, and bid on larger jobs. “No one would even return my calls,” he said. “The minority contracting program gave me my first chance. Now I employ ten people, but if the city scraps these rules, I don’t know if we’ll make it through the year.”

On Friday, the White House put $2.1 billion in federal funding for Chicago transit projects on hold, saying they need to be sure taxpayer dollars aren’t flowing through what the administration calls race-based contracting. The pause, which threatens the long-awaited Red Line extension and upgrades to the Red and Purple modernization project, immediately sent shockwaves through a local economy that had planned for years around these investments. Chicago officials called the move a politically motivated strike against a blue city.

The debate since then is often cast as an abstract legal fight about constitutional lines and federal rules. But in the neighborhoods that would benefit from the Red Line extension, predominantly Black and long underinvested, the issue is painfully concrete: it’s about job offers that pay living wages, steady work for union crews, and small firms finally getting a real chance to grow after decades of exclusion.

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