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Caltrans Asks Feds To Allow Affirmative Action |
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Thursday, 09 August 2007 |
INLAND EMPIRE
By Chris Levister
In order to protect $3 billion in federal transportation
funding, Caltrans last week petitioned the federal government to begin
considering race in awarding contracts.
The decision came after a study revealed that state and
federal transportation dollars spent in California
are not reaching disadvantaged businesses owned by women, African-Americans,
Asian-Pacific Americans and American Indians in compliance with federal
Disadvantaged Business Enterprise (DBE) Program guidelines.
The 600 page disparity study conducted by Denver-based BBC
Research and Consulting found that of the 3,398 firms deemed "available" for
prime engineering and construction contracts and subcontracts only 230, or 6.8
percent of those firms were certified to do business under the DBE. The study
found disparities in each of the 12 Caltrans districts.
For example African-American firms received only 15 cents of
every dollar expected on state-funded construction and engineering contracts.
Some minority business owners reported that it is difficult to obtain
opportunities with prime contractors who were not familiar with their work.
A number of women and minority business owners told the
study team some prime contractors openly abused state good faith DBE hiring
goals. They reported that prime contractors would frequently send notices of
subcontracting opportunities to DBE's to just be able to document that they had
done so, but were not serious about using DBE's as subcontractors.
Caltrans Director Will Kempton released the study and sent a
request to the Federal Highway Administration (FHWA) seeking federal approval
to resume considering race and gender to more effectively channel
transportation dollars to businesses not getting their fair share of contracts.
"We are looking at a history of discrimination in the
contracting industry," said Kempton "We had to show a pattern of disparity by
ethnic group. With the disparity study completed, we now have that evidence."  A new Caltrans study says African-American-owned firms received only 15 cents of every dollar expected on state-funded construction and engineering contracts after considering 3,398 available firms.
Civil right groups have blamed Proposition 209, which voters
passed in 1996 to outlaw affirmative action, and a 2005 federal court decision
for a steep decline in transportation contracts to minority and women owned
businesses.
The study according to Kempton could satisfy both the court
and the ballot measure, which allows affirmation action programs to meet
federal funding requirements. In order to qualify for federal funds, Caltrans
must meet federal requirements for hiring disadvantaged businesses.
The proposed plan which the public will have 45 days to
comment upon, would set a goal of awarding 13.5 percent of small business state
contracts or subcontracts to firms owned by women and underrepresented
minorities.
Half of those contracts, 6.75 percent, would continue to be
awarded using current race-neutral policies, under which Caltrans tries to
recruit more minority and women bidders through outreach to targeted groups.
The proposal would create a new requirement that the
remaining 6.75 percent of transportation contracts be rewarded to women and minority
owned businesses. It would penalize firms that fail to comply.
"This is significant because it demonstrates what we've been
saying all along, women, and minorities, African-Americans in particular are
not getting their fair share of California's
abundance," argues Aubry Stone,
California Black Chamber of
Commerce president.
Stone says while Governor Schwarzenegger has pressed for
greater participation from minority contractors he remains skeptical.
"Unless Caltrans is willing to hold noncompliant contractors
accountable, this is like a drop of water in the ocean." Stone says contractors
who skirt minority hiring guidelines famously hide behind 209 or claim ‘we
can't find women and minority businesses' the state in turn gives them a slap
on the hand and they all go back to business as usual. At the end of the day,
says Stone, "its blantant discrimination."
The study comes amid a building frenzy for Caltrans, which
Kempton said is working on a record 559 construction projects totaling $10.49
billion. About $37 billion in construction bonds approved by voters last fall
still waits to be doled out.
"We have an obligation to level the playing field. We are
aggressively seeking bidders," said Small Business Officer Sam Wallace. "Our
challenge is to identify and certify more contractors from disadvantaged
communities. We're working under the governor's mandate - to be inclusive. We need your help in getting
that word out," Wallace told Black publishers during a briefing by
Schwarzenegger in January.
At best the study puts a harsh light on the devastating
effects of Proposition 209 says Monique Morris, author of the 2006 study, Free
to Compete: Measuring the Impact of Proposition 209 on Minority Business
Enterprise.
"This will address whether Prop 209 was a mistake or a
failure in providing equal opportunity. Race-neutral business programs have
been proven ineffective this will determine which approach really works."
Kempton said the new program was shaped by a pivotal court
decision in 2005 by the 9th Circuit Court of Appeals, which required state
agencies to prove through disparity studies that racial and gender quotas are
needed to meet federal requirements.
That decision in Western Paving v Washington State
Department of Transportation prompted Caltrans to adopt "race neutral" efforts
to award contracts to disadvantaged businesses in May 2006, while it made an
effort to collect evidence that its earlier race conscious policy was
warranted.
Alan Foultz, an attorney for the Pacific Legal Foundation,
which lobbied for Prop 209 and continues to file legal challenges to state
hiring and contracting programs, said, "We have to look at the plan to
determine if the methodology is sound."
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