The veteran of the construction industry was not surprised to learn that the state’s long-awaited disparity study showed minority-owned and women-owned companies in the industry are not being awarded government contracts at the same percentage as their numbers indicate they should be.
The person was not surprised that the numbers were astonishingly low, either.
“This is not a secret,” the person said. “We know this is a huge problem in our world.”
What the person said next will be challenged in some communities.
“It’s one that we have been trying to fix for a long time,” they said.
The person, who requested anonymity due the extreme sensitivity of the issue, summed it up this way: “There are no easy solutions — if there were, we would have implemented them.”
The 221-page report, compiled by California-based Mason Tillman Associates and expected to be released later Tuesday, showed just how big an issue it is.
The study examined the awarding of government contracts for seven ethnic/gender groups in three categories (construction, personal services and goods and services) over a 60-month period (2015-20).
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But, when the report is made public, it is the construction numbers that likely will get the most attention. Among other data points, it will show Black, Hispanic and Asian companies received just 3.68% of the awards of construction prime contracts despite combining to make up more than 27% of the eligible companies.
The study showed the disparity for these three groups in this one category prevented these business owners from getting more than 500 million contract dollars. (The number is well over a billion when all groups and all categories are totaled.)
“We’re trying to fix this, but it’s not as simple as saying, ‘They get that,’” the person said.
Whether any potential set-asides are legal is unclear, but the idea any such attempt would be challenged in court feels like a certainty — one that seemingly would delay any effort to address the situation legislatively.
What can be done today?
The person said construction companies and unions have been attempting to recruit minority and female workers for years, whether it has been through job fairs, vocational schools or meetings with municipal leaders.
The success has been limited.
Then, there’s the idea of hiring minority firms as subcontractors.
That also comes with issues and concerns. It’s difficult to find a minority- or women-owned business owner in the sector who feels the process of selecting (and, more importantly, paying) a subcontractor is fair or equitable.
And, it goes without saying, having more minority workers is far different than minority-owned companies getting the primary bid, which is the purpose of the study.
The industry source acknowledged that established companies have built-in advantages (both in financial resources and a book of prior business that shows they can do the work).
The person, however, pushed back, noting that race and gender are not on the application in the bidding process. And, while the person also acknowledged that it is harder for a smaller business to get bids, they noted that the state’s biggest construction companies started out small.
Here’s the catch: Most of the established large companies did not start out as small minority-owned companies.
The study appears to definitely show that minority- and women-owned business have a harder time at the start — and in the early years.
Fixing this is not a simple math problem, the person acknowledged.
“You want to give more companies an opportunity, but it’s not as easy as just saying, ‘You get 10% or 20% or 30% of this job,’” the person said. “What is required in those awards? And does the company have the experience needed to do it? Do they have the bonding that’s required?”
The answer to all these questions may come down to perception.
Big industry companies may see the study and say: “We were once small, too, and we grew. It can be done.”
Minority-owned companies may see the study and say: “It shows what we’ve said for years; we don’t get an equal chance.”
The only definitive takeaway is this: Everyone involved in the industry acknowledges there is a disparity.
Read the report below.