GDOT and minority contracting

Moderated by Tom Sabulis

The Georgia Department of Transportation is getting criticism from all sides these days. Lately, it’s been taking heat for its lack of minority contracting on projects. The NAACP has asked Attorney General Eric Holder to investigate. Today, a former board member blasts GDOT for its failure to adequately engage disadvantaged businesses. The department’s commissioner says there is room to improve, but explains that minority businesses need to be able to compete and perform for taxpayers when they get the opportunity.

GDOT fails to share work equitably

By Brad Hubbert

The Georgia NAACP recently asked U.S. Attorney General Eric Holder to investigate the state department of transportation’s contracting practices to determine if there is systematic discrimination against minority businesses.

I support the NAACP 200 percent and believe its request is long overdue.

As a former Georgia Department of Transportation board member, I have been a staunch critic of the department’s failure to ensure that minority, women-owned and disadvantaged businesses receive an equitable share of the work.

A 2012 disparity study conducted for the GDOT by BBC Research & Consulting analyzed the participation of minority, women and economically disadvantaged business enterprises (MBE, WBE and DBEs) in construction and engineering contracts from 2009 through June 2011. Of the $2 billion GDOT awarded during that period, MBEs and WBEs received a paltry 10 percent of the contracts, even though those businesses had the capacity to do 22 percent of the work. At the same time, DBEs received only 10 percent of contracts, while the GDOT’s goal was 12 percent.

That 12 percent goal, by the way, is only 2 percent higher than it was 31 years ago when I was first elected to the board, and the agency is not even meeting that.

Why is there a discrepancy between goals, capacity and actual contracts awarded? I said it then and I will say it again: discrimination. But don’t take my word for it; the facts speak for themselves.

The disparity study found “qualitative evidence of discrimination” against minority- and women-owned companies and advised the GDOT to remove the barriers that prevent them from bidding on or being awarded contracts.

Those barriers are as prevalent in the way the DOT does business as concrete is to street paving. It starts with how projects are packaged in the first place. Instead of using its discretion to let single contracts for road, highway and infrastructure improvements, the DOT often lumps major projects together, making them more advantageous for large, general contractors to bid on. However, smaller, minority, women-owned and disadvantaged firms have a difficult time securing the bonding and financing required for such projects, and it puts their firms at greater risk, so they are effectively eliminated from even bidding on the work. They are forced to either compete as a subcontractor or scramble for contracts of lesser value.

The department adopted DBE goals in 1989, under the premise that “disadvantaged” was a broad enough umbrella to cover women and minority groups equally. However, that has not been the case. Instead of providing more bid opportunities for all disadvantaged groups, the practice seems to favor one over the other.

For example, in 1987, when we had a transportation commissioner and a board committed to equity, MBEs received about 8 percent of transportation contracts and white, women-owned firms were awarded 2 percent. In 2007, firms owned by white women received 8 percent of the contracts while black-, Hispanic- and Asian-owned companies received 2 percent.

A coincidence? I think not. If everything was equal, minority firms would have experienced growth similar to that of white women-owned companies during the 20-year period.

The study further found that if discriminatory practices are removed, the availability of MBEs, WBEs and DBEs to do transportation work ranged from 21 percent to 31 percent.

I implore the GDOT to set the tone for fair and equitable contracting by setting a goal of 30 percent. That will help compensate for past wrongs and set the tone for making things right in the future as we continue to plan for regional transportation.

Brad Hubbert is the former board chairman of the Georgia Department of Transportation.

GDOT supports minority contracting

By Keith Golden

For 32 years, the Georgia Department of Transportation has maintained a vigorous program to assist minority and women-owned businesses in participating in state contracts.

Known since 1987 as the Disadvantaged Business Enterprise (DBE) program, thousands of Georgia minority and women business owners have participated, and hundreds of millions of dollars have been paid to qualified DBE firms for work on transportation infrastructure projects.

By federal law, DBE status is available to recognized minority groups and those defined as having experienced social or economic disadvantage.

DBE firms play an important role in the work of Georgia DOT each year and also are often used by other government agencies throughout the state.

DBE status does not guarantee success. Once certified, it is the responsibility of the DBE firm to compete in the marketplace for work.

Like any company, they must offer the department and Georgia’s taxpayers the best pricing, efficient work and a quality product.

The department’s current DBE participation goal is 12 percent; for the past three years, DBE firms received 9.7 percent of contract dollars. Georgia DOT’s DBE goal, which is reviewed and approved by the Federal Highway Administration and the U.S. Department of Transportation before it can become effective, is proposed to rise to 15 percent for the next three years.

Each time the department sets a new DBE participation goal, an inclusive round of public outreach is conducted to solicit input from those groups most impacted by the goal.

This year, five public meetings were held across Georgia. Public input, participation and opinions were sought as these meetings provide valuable, important information that helps us make program improvements and determine meaningful new DBE participation goals for the next three years.

Periodically, Georgia DOT, at its own initiative, sponsors what are known as DBE Disparity Studies. These are efforts to examine program performance, successes, shortcomings and areas where improvement is needed. This spring, the department concluded just such a DBE Disparity Study. It lasted for 18 months; we learned there are areas for improvement.

For instance, despite the fact that nearly $250 million in DOT business went to DBE firms from 2009-11, the study showed that businesses owned by African-Americans accounted for just 2.4 percent of that amount. So the department now will develop new efforts to engage DBE firms to ensure they are made aware of potential contracts, have the tools they need to actively bid on the work, and know contacts at other companies to forge partnerships and alliances.

Georgia DOT is committed to its DBE program and to the state’s qualified DBE firms. The department’s new 15 percent goal will be the highest in the Southeastern United States.

Within the constraints of federal regulations and Georgia’s absolute and unwavering low-bid statutory requirement, we strive each day to broaden the horizon and extend the reach of our DBE program.

There is always more that we can do. We constantly seek suggestions, input, dialogue and constructive criticism to improve our DBE efforts.

Keith Golden is the commissioner of the Georgia Department of Transportation.