Black Firms Shut Out of Stimulus Projects

Black Firms Shut Out of Stimulus Projects

Black contractors aren’t getting their fair share of the stimulus dollars being poured into transportation and infrastructure projects around the country, according to statistics released by the Transportation Equity Network.

Based on the grassroots organization’s findings as of Dec. 1, 2009, of the $163.8 million in contracts awarded directly to firms by the U.S. Department of Transportation and Federal Highway Administration, $16.8 million went to minority-owned businesses, $9.7 million to women-owned businesses, $4.7 million to Hispanic-owned businesses and $0 to black-owned businesses. The group used data from the Federal Procurement Data System’s Federal Stimulus Contracting Report.

It is an admittedly small sampling of stimulus funding, said Transportation Equity Network executive director Laura Barrett, “But we think we see some trends around how the money has been allocated mostly to white-owned businesses. We feel that minority contractors are being left out based on anecdotal reports, and the numbers we were able to get from the procurement data system back up what we’ve been hearing from the field.”

The DOT disagrees. The agency contends that the data pool used by TEN is too small to be considered representative. In an e-mail message, DOT spokesperson Olivia Alair said that as of Dec. 11, 2009, $986 million dollars in stimulus funds have been committed to Disadvantaged Business Enterprises (DBEs) for highway projects and that the agency has awarded $32 million to minority-owned firms in direct federal contracts. She could not say, however, how many of them are black.

“Minority-owned firms have to be certified at the state level to qualify as DBEs, so we do not have national data on the percentage of DBEs that are minority-owned, broken out by race or ethnicity,” wrote Alair.

She noted that DOT has engaged in and encouraged extensive outreach to black firms. The agency has launched bonding assistance and short-term lending programs and has participated in several events that target women and minorities to highlight stimulus opportunities. In addition, in December Transportation Secretary Ray LaHood sent a letter to the nation’s 50 governors urging them to “take advantage of existing equal opportunity programs and resources and to create innovative strategies to provide opportunities for the underrepresented.”

Richard Copeland, president and CEO of THOR Construction Inc. in Minneapolis (No. 48 on the BE100s Industrial/Service Companies list with $103 million in revenues) and past president of the National Association of Minority Contractors said that efforts to include black firms in stimulus projects vary from state to state and that discriminatory practices continue to be pervasive. He believes that there needs to be a national mandate regarding inclusion to ensure that all states meet their numeric goals and sanctions when they don’t.

“We’re being bypassed by a ‘good old boy’ network that’s gobbling up the stimulus money that’s supposed to help the neediest and most fragile businesses,” said Copeland. “Black contractors are going out of business and laying off people at an alarming rate.”

Copeland, Barrett, and several organizations affiliated with TEN plan to drive that message home during a briefing with lawmakers on Capitol Hill on Jan. 27.