A new report indicates that less than a sliver of the stimulus funds spent on transportation has gone to minority contractors. A source inside the DOT has revealed that of the $48 billion in ARRA funds designated to highway projects via state DOTs thus far, only $986 million, or 2%, had been committed to Disadvantaged Business Enterprises (DBEs) as of December 11, 2009. In addition, the DOT has awarded $32 million to minority owned firms in direct federal contracts.
Laura Barrett, the executive director of the Transportation Equity Network, issued the following statement:
The USDOT has disclosed that only 2% of the $48 billion in federal stimulus funds spent on highway construction has gone to disadvantaged and minority contractors. This number is absolutely shocking. Secretary LaHood is encouraging state DOTs to increase allocations to minority and disadvantaged contractors, but this number proves that encouragement is not enough. The old boys network that locks out minority contractors was built on the state and local level, and it needs to be fought at that level to reverse this outrageous inequity.
Job one is recording and publicizing detailed demographic information on exactly who is winning these contracts and who is actually performing the jobs. We also have to apply the TEN workforce equity model, which was a huge success in Missouri, across the country. Minority and female workers performed 26% of the workforce hours on Missouri’s $500 million I-64 highway project, and the project was finished three weeks early and $11 million under budget. The Missouri DOT proved that when you make diversity a priority, everybody wins.
Finally, we need to ensure that federal stimulus funds spent on public transit—which has been proven to create twice as many jobs as highway construction—have strong workforce equity requirements as well. Public transit is not only an economic lifeline for low income and minority communities, it is a way to build lives and careers.
February 4th, 2010 at 6:52 pm
2% is a useless number without knowing what percentage of contractors are minority-owned to begin with.
February 4th, 2010 at 7:12 pm
Thanks for your comment - we addressed that question, and the difficulty in answering it, here:
http://www.infrastructurist.com/2009/12/15/has-stimulus-spending-dissed-minority-contractors/
February 4th, 2010 at 9:46 pm
Hi tozmervo, one of the many reasons 2% is an important number because Congress set a goal of 10% in 1998’s TEA-21 and 2005’s SAFETEA-LU:
“Section 1101(b) of the act (Disadvantaged Business Enterprises) states except to the extent that the Secretary determines otherwise, not less than 10% of the amounts made available for any program under Titles I, III, and V of this act shall be expended with small business concerns owned and controlled by socially and economically disadvantaged individuals.”
From USDOT website: http://www.dotcr.ost.dot.gov/asp/dbe.asp
February 4th, 2010 at 10:00 pm
Having previously worked for a minority owned, certified small business in the construction industry that employed the same percentage of minorities as it’s non minority-owned competitors, I can’t really say I’m too worked up about this. I understand that my experiences are anecdotal, but business owners who are successful enough to be bidding on multi-million dollar federal contracts are hardly the kind of people you think about when you think about racial injustice.
February 5th, 2010 at 12:44 am
Stephen,
What if only 2% of all infrastructure construction companies are women or minority owned? Setting a goal of having 10% of all contract recipients be minority or women owned is about as useful as setting a goal of having 10% of all contract recipients go to Wild Hildabeest and Flying Spaghetti Monster owned businesses.
The amount of businesses to choose from makes a difference.
February 5th, 2010 at 12:49 am
I have to fall back on what I said in the previous post on this subject which is that I have to agree with tozmervo. I understand the goal was 10%, but that’s affirmative action (which I am against) without knowing the proportion of the population that is minority owned. It’s a half story that deserves no attention until it can tell a whole story.
February 5th, 2010 at 12:49 am
oh no, my earlier comment should have the name Rip. not a huge deal though.
February 17th, 2010 at 1:10 am
The Engineering and Construction (E&C) Industries are deeply rooted in a KKK legacy. They have PACs like the Associated General Contractors that pours dump truckloads of money to political cronies and the U.S. Department of Transportation’s agency administrators to ensure the playing field remains skewed in their favor. The AGC’s longstanding entrenched, good-old-boy relationship with the U.S. Department of Transportation underscores the fact that any notion of a colorblind society is simply mythology. Hence, the idea that as long as the rules are fair, we’ll have equality. The AGC has been on a campaign to protect the wealth and power they hold via their iron clad monopoly on public and private sector contracting. They have bought off local, state and national legislators to ensure the issue of the lack of equality of opportunity, due to the lack of equality of condition is not dissected in the court of public opinion. The mission of the AGC and their redneck minions is to dismantle any semblance of a level playing field, by promoting the paradoxical idea of a colorblind society through race neutral “competitive bidding”, “training” and “inclusive subcontracting” in a society that is totally unequal by color.
I am only going to say this one time for the blissfully ignorant and the miss informed…”THERE IS NO SUCH THING AS THE LOWEST BIDDER IN THE E&C INDUSTRY”. 100 percent of all construction projects’ BUDGETED COST whether roadway, highway, potable water systems, sewer systems, rail transist, power systems and/or commercial buildings will escalate on average from 20-percent to 60-percent by the time the project is completed. About 82 percent of the lowest bids, increase on average 28 percent due to CHANGE ORDERS resulting from poor engineering, busted designs and shoddy construction. One only has to look at such E&C Lexicon Failures like Boston’s Big Dig Tunnel Project and the collapse of Minnesota’s IH-35W Bridge and then starting peeling back the layers of hype and what you will find is incompetence, corruption, greed, bribery, kickbacks, outrageous cost overruns and pay to play. None of which falls into the categories of lowest bidder and/or most highly qualified firms being selected. The raw tooth-aching truth is, 78 percent of non-minority contractors listed in the ENR receive 86 percent of all contracts in excess of 90 million dollars. And guess what it ain’t because they are always the lowest bidders, but it is because of the campaign contributions they routinely make to crony politicans. Yes, the E & C Industry which includes the U.S. Department of Transportation is redneck, racist and repulsive.