Disparity study to show minority groups awarded government contracts at astonishingly low levels

The state’s long-promised and long-awaited disparity study is expected to be released later Tuesday. The results of the study, which aims to determine if certain ethnic and gender groups get a proportionate amount of government contracts, appears to be far worse than even the most ardent advocates for Black-, Hispanic- and Asian-owned companies could imagine, as the report shows minority groups have lost billions in potential government contracts, ROI-NJ has learned.

The 221-page report, prepared by California-based Mason Tillman Associates, examined the awarding of government contracts for seven groups: Black Americans, Asian Americans, Hispanic Americans, American Indians and Alaskan natives, Caucasian females, minority business enterprises and woman business enterprises.

It examined the awarding of prime contracts for:

• Construction (valued at over $65,000 to $5.71 million);
• Professional services (valued at over $40,000 to $800,000);
• Goods and services (valued at over $40,000 to $360,000).

It also looked at subcontracts for construction and professional services.

The study, which was commissioned in December of 2020, was massive in scope. Mason Tillman reviewed more than 1.2 million records and 240,000 contracts from 61 contracting agencies, authorities, commissions, state colleges and universities.

The study examined the 60-month period between July 1, 2015, and June 30, 2020. Since Gov. Phil Murphy took office in January 2018, the study’s time period is approximately the same (30 months) for Murphy and his predecessor, former Gov. Chris Christie.

The numbers are startling.

Consider the data points in the category detailing the awards of construction prime contracts.

The study found that Black Americans represent 9.19% of the available construction businesses but received only 0.14% of the dollars on construction contracts valued over $65,000 to $5.71 million. The report estimates this potentially cost these businesses $209 million.

The report showed similar outcomes for Hispanic Americans and Asian Americans in the category. Hispanic Americans represent 11.65% of eligible construction businesses but received only 1.51% of the dollars on construction contracts. Asian Americans represent 6.43% of the available construction businesses and received 2.03%.

Caucasian females fared better. The group, which represents 19.7% of the available construction businesses, received 8.14%

The report classified all four as having “statistically significant underutilization.”

All in, the four groups lost out on an estimated $813 million, the report said.

The biggest beneficiary in that category were “nonminority males,” which made up 52.3% of the eligible companies but got 88.16% of the bids. The report said the overutilization of this group was “statistically significant.”

This is just one category.

The report determined there was a disparity for all groups in all categories (construction, professional services, goods and services) of prime contracts, with the exception of American Indians and Alaskan Natives (where the report indicated there was “insufficient data.”)

The report was a little better when it came to subcontractors.

In the category of construction, it found there was “no disparity” when it came to Hispanic Americans and Caucasian females and “underutilization” for women business enterprises.

For professional services, it found “no disparity” for Asian Americans and minority business enterprises.

In both categories, there was “insufficient data” around American Indians and Alaskan Natives.

While the study used data from a time period that ended in 2020, an administration official who was familiar with the findings said there is no reason to believe that — statistically — anything has changed in the past four years.

Moving forward, the administration is expected to announce plans (perhaps as soon as Tuesday) to meet with representatives from the Black and Hispanic caucus to discuss the study and potential legislative solutions.

How quickly that could be enacted is not known.

Also uncertain: Whether the current national backlash toward diversity, equity & inclusion initiatives and programs — or the recent U.S. Supreme Court decision on affirmative action — will have an impact on the response to the report.

One thing is clear: Based on the “anecdotal evidence” included in the report — that is, conversations with members of the classes involved in construction, professional services and good and services — there is a strong sense that many feel they have long been subject to discrimination and institutional racism.

Said one respondent: “Everybody pays taxes, but only white people can get business with the government. That is why they are the ones who have large, successful companies. The people who are in decision-making positions have the power and authority to award the (Requests for Proposals) to people who look like them, not who look like African Americans or Latinas. We know that they are getting the lion’s share of the business, and unless there are state mandates to include minority business, nothing will change.”

The report is expected to be released later Tuesday. Here are some more of its findings:

Professional services prime contracts valued at over $40,000 to $800,000

• Black Americans: Represent 12.01% of available firms, received 1.44% of the dollars;
• Asian Americans: Represent 15.71% of the available firms, received 11.92% of the dollars;
• Hispanic Americans: Represent 5.77% of the available firms, received 0.99% of the dollars;
• Caucasian females: Represent 27.66% of the available firms, received 9.01% of the dollars;
• Nonminority males: Represent 38.47% of the available firms, received 76.65% of the dollars.

Also:

• Minority business enterprises: Represent 33.87% of the available firms, received 14.34% of the dollars;
• Woman business enterprises: Represent 37.75% of the available firms received 9.91% of the dollars;

Goods and services prime contracts valued at over $40,000 to $360,000

• Black Americans: Represent 10.08% of the available businesses, received 0.46% of the dollars;
• Asian Americans: Represent 5.24% of the available businesses, received 2.42% of the dollars;
• Hispanic Americans: Represent 7.98% of the available businesses, received 1.29% of the dollars;
• Caucasian females: Represent 22.34% of the available businesses, received 8.87% of the dollars;
• Nonminority males: Represent 54.10% of the available businesses, received 86.88% of the dollars.

Also:

• Minority business enterprises: Represent 23.56% of the available businesses, received 4.24% of the dollars;
• Woman business enterprises: Represent 28.97% of the available businesses, received 11.09% of the dollars.

Read the report below.