Judge Upholds Caltrans Program to Help Minority and Women-Owned Businesses
By Chris Levister –
The Riverside Branch of the NAACP is asking for an investigation into what it calls a “systemic pattern of excluding” minority and women-owned businesses from federal highway stimulus projects.
Branch president Waudieur “Woodie” Rucker-Hughes labelled “shocking and grossly unfair”, a disclosure by California transportation officials that 0.436% ($772,000) of the $450 million Interstate 215 Widening Project through downtown San Bernardino, went to minority and women contractors.
Funding includes $128 million from the American Recovery and Reinvestment Act (known as the stimulus bill) and $81 million from a 2006 voter approved transportation bond.
The roadwork is part of a larger $800 million four phase project that spans 7.5 miles from Rialto Avenue to University Parkway. The project calls for improving access to the city of San Bernardino with 17 new bridges, and adding direct connectors to State Route 210.
The project is a collaborative effort between the California Department of Transportation (Caltrans), San Bernardino Associated Governments (SANBAG) and the city of San Bernardino.
“If in fact these officials certify that the contractors on this project put up a federally mandated ‘good faith effort’ to hire disadvantaged businesses and 0.436% is the best they can do – we demand to see the due diligence.” she said.
Rucker Hughes is the South East Director of the State NAACP Executive Committee. She stated she will ask the California State Conference of the NAACP to launch a probe into the awarding of I-215 stimulus funding with the goal of sparking a federal DOT investigation.
“No matter how hard we work, without a fair public contracting system that holds all parties accountable, small business owners are at a tremendous disadvantage.”
She said the first step is recording and publicizing detailed demographic information on exactly who is winning these contracts and who is actually performing the jobs.
The NAACP effort is joined by the Inland Empire Concerned African American Churches (IECAAC). Economic development committee chair Owusu Hodari says he sees the more invidious threat of direct discrimination. “I don’t understand how SANBAG, Caltrans, and other state and federal transportation organizations that are filled with government representatives can continually hold their heads up and talk about how much their communities are suffering, when in fact they have documented evidence that these hiring inequities exist,” said Hodari.
“SANBAG claims to be powerless to control who gets hired, but then the agency turns a blind eye to the good ole’ boy network.”
Hodari points to the average 30 percent unemployment rate for minorities living in the shadow of the 215 freeway.
“I seriously question SANBAG’s claim that these contractors have put up a good faith effort to hire minority and women contractors. The results do not support their claim,” said Hodari a licensed construction contractor.
U.S. Secretary Ray LaHood's office said in a statement:
"Working to ensure nondiscrimination and diversity has long been a key objective of the U.S. Department of Transportation's federally assisted highway construction programs. The Federal Highway Administration encourages states to make good faith efforts to set and achieve their own goals for compliance with the Department's Disadvantaged Business Enterprise (DBE) Program.”
The goals the statement said are based on the availability of ready, willing and able DBEs to participate. “However, we recognize that more can be done to ensure a level playing field and we are committed to expanding opportunities for them to fairly compete for these contracts.”
Judge Upholds Caltrans Program to help Minority and Women-Owned Businesses A federal judge ruled recently that Caltrans’ DBE program was “clearly constitutional”.
The Pacific Legal Foundation had filed suit against the department on behalf of the Associated General Contractors (AGC) of San Diego, insisting that its racial quota program violated the voter-approved Proposition 209 prohibition on race-and sex-based preferences in public contracting, employment and education.
US District Court Judge John Mendez weighed the arguments, denied the plaintiff’s motion and granted summary judgment in favor of Caltrans. Caltrans implemented the program as a condition of receiving $3 billion in federal transportation funding annually.
“This decision affirms that Caltrans' efforts to level the playing field are constitutionally sound and will ensure that billions of dollars in federal transportation funds continue flowing to California,” Caltrans Director Cindy McKim said in a statement.
“We will continue to reach out to disadvantaged businesses and hope our program serves as a model for other states to follow.”
In March 2009, Caltrans announced it would implement a “mandatory race conscious Disadvantaged Business Enterprise (DBE) Program” that set aside 6.75 percent of federal-aid project contracts for Blacks, Asians and Indians -- but not Hispanics or “subcontinent Asian males.” AGC member companies -- the San Diego chapter represents 1300 firms -- complained that under the program, they lost out on business despite offering higher quality services at better prices.
A similar program had been struck down as illegal in 2006 after a federal appeals court ruled that states had to document the existence of discrimination in the awarding of contracts.
As a result, the number of women- and minority owned businesses awarded Caltrans projects plummeted — from nearly 11 percent in 2005 to just 2.2 percent in 2009.
Caltrans argued it was remedying discrimination against minorities and women with the DBE program because these groups only received three percent of the contracts under race-neutral policies.
The Pacific Legal Foundation was outraged by the decision and is considering an appeal.
“Reinstatement of the Caltrans DBE program is a must.” Hodari and Rucker Hughes agree, “It is crucial to update the data to ensure that all “significant disparities” groups have access to the program.
It is also urgent that government, at all levels, move swiftly and creatively to identify, recruit and support America’s small businesses as a vital part of a healthy domestic and global economy.
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