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.

33 comments Add your comment

MANGLER

August 14th, 2012
2:32 pm

Ever wonder how the larger firms got to be large firms? They did a lot of small jobs for a long time and developed the skills and foresight along the way to handle ever increasing work loads. Walmart and Best Buy started with one store and grew over time. When talking about large infrastructure projects, you need companies that can do the job correctly and on budget. Forcing the acceptance of a bid simply because it came from a statistical requirement leads to mistakes and cost overruns.

But if you want to have a good look at competition, see what happens when a stretch of highway gets built in 2 parts: part 1 is by the big bad company who has 10,000 employees, equipment, and financing at it’s disposal, and part 2 would be completed by smaller companies of whatever racial or sexual or socioeconomic makeup you so desire. Let’s see which part comes in on time, on or under budget, and is of the required quality. Seriously, lets do that.

Some companies get contracts because they deserve them. Some get contracts because even though they couldn’t compete, certaon people insist that it’s not fair any other way but to legally force it.

The true disadvantages on people are those they place upon themselves.

Booger Fling

August 14th, 2012
2:05 pm

All this “commitment” to CONtractors… What about your commitment to your of friggin employees commish????????

Bernie

August 14th, 2012
2:03 pm

Out by the Pond @ 1:16 pm – Your comment is greatly appreciated,welcomed and agreed, even from the silence of many of its readers. No one is demanding, or requesting for a free ride, hand outs, special consideration, set asides or accept inferior service, wrong doings of servicing state contracts as many of the other posters have alluded.

This is part of the same old tired argument, when the the issue of fairness and equality is raised. This is just a part of the defense of retaining already established protocols. This entire issue could easily be avoided and resolved if the DOT leadership would be more open, forthcoming, fairer, demonstrating minority fairness & improvement assignments and cooperating with inquires about its contract assignment designations.

Unfortunately, History has demonstrated more times than not, State Of Georgia Leaders are unwilling to moderate their protocols and decisions without direct involvement of Federal and/or judicial rulings. This is why, it is important that we are afforded the unfiltered opinion of the NAACP on this medium.

All ANY Business desires and wants….. is a FAIR and equal chance for an opportunity to receive and get posted contracts when they are available That is ALL.

We all share in the same desires and needs just as any Man of this great Nation.

Treeshay

August 14th, 2012
1:21 pm

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

What Mr. Golden is trying to tactfully say is that being a woman/minority operated business might get you in the door, but once in the taxpayers expect you to actually do the work for which you’re paid. What he doesn’t mention is that some of these DBE participants aren’t minority owned at all. Occasionally whites will qualify by using a straw man, usually some poor black guy they’ve paid to be the fictional “CEO”.

Out by the Pond

August 14th, 2012
1:16 pm

Bernie – remember small minds can not keep on subject. But wow, Skipper was first out and was already off subject. That is a record that will stand forever.

Racial and gender bias have long been ingrained in the State Work Place Culture. The playing field after 40 years is still not level. As a white male I have felt the sting of correction more than once and before I finally give up bidding for state contracts I fully expect to feel it again. Does it hurt? Damn right it does, but how much more the pain must be for those unfairly excluded from participation in the first place.

jj

August 14th, 2012
1:11 pm

Just think of how many parking tickets, booze, braves games, expensive lodging and wedding gifts the beltline could have bought with their guaranteed piece of the T-SPLOST. Fire the ENTIRE beltway staff now.

Joe

August 14th, 2012
1:09 pm

Pompano is exactly right. Most of the DBE’s for GDOT are a liability to the contractors. For every good one, there are 100 that either do terrible work, don’t pay there bills, won’t show up when needed, can’t submit required paperwork on time, etc,etc,etc. If they want more work, then they can get qualified to bid on the work, and be the low bidder on letting day just like everyone else trying to survive in this industry that is being choked by shortsighted politicians.

middle of the road

August 14th, 2012
1:04 pm

And you wonder why T-SPLOST failed

middle of the road

August 14th, 2012
1:02 pm

The NAACP stands for National Association for the ADVANCEMENT of Colored People – not the National Association for the EQUALITY of Colored People.

SAWB

August 14th, 2012
1:02 pm

I wonder if the problem with these programs is that they still continue to exist. Maybe it is time to do away with set asides and hire the best qualified firm for the job regardless of the demographics of the owner. We have recently seen the abuse of similar programs at Hartsfield airport involving vendor contracts. These programs have become just another mechanism for cronyism and waste of tax payer dollars. If an African American can become President based on his own merit I think a company can obtain a road paving contract.