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America’s continued exclusion of Black-owned businesses: Open letter to DOT Secretary Elaine Chao

February 2, 2017

by Bryan Anderson, UACDC

To Secretary Elaine Chao, U.S. Department of Transportation, 1200 New Jersey Ave, SE, Washington, DC 20590

Dear Secretary Chao:

The all-Black crew of Liberty Builders, owned by Bay View publisher Dr. Willie Ratcliff, performed the concrete work to build light rail on the Embarcadero in the mid-1990s. Proposition 209, ending affirmative action in California, had not yet passed, and the Black community, led by the African American Contractors of San Francisco, which Ratcliff headed, demanded a fair share of the work. San Francisco’s Black contractors won enough contracts in the ‘90s to keep hundreds of Black families living well, supported by the high wages of public construction work that enabled one construction worker to support an extended family. That ended in 1998, when a noose was hung on Liberty Builders’ job at SFO and all the city’s Black contractors were put out of business. Since then, Black contractors and workers have been largely locked out of the construction industry, despite the city’s huge construction boom.

Given that the Federal Highway Trust Fund, which is funded by gasoline taxes, is running out of money, President Donald Trump’s proposed $1 trillion worth of investment in America’s infrastructure over 10 years is based on a financial proposal that would offer $137 billion in federal tax credits to private investors (public-private-partnerships) interested in backing mega-dollar transportation projects.

Because President Trump’s plan would subsidize investors, not projects; because it would fund tax breaks, not bridges; because there would be no requirement that the projects be otherwise unfunded, there is simply no guarantee that President Trump’s plan would produce any net new hiring. Investors may and probably would shift capital from unsubsidized projects to subsidized ones and pocket the tax breaks on projects they would have funded anyway.

Lobbyists for transportation’s engineering and construction firms previously flooded President Trump’s transition team with briefing memos, lining up meetings and privately pitching their pay to play proposals to what they hope their money-eyed Congress men and women will get hooked on.

If President Trump’s $1 trillion plan does materialize in some shape, form or fashion, highly capable Black contractors will be virtually shut out of public sector contracting as they were during George W. Bush and Barack Obama’s administrations. Qualified Black-owned businesses received a disproportionate sliver of federal stimulus contracts, creating a rising chorus of demands for President Barack Obama’s administration to be more inclusive and more closely track who receives government-financed work, which they did not.

Nationwide data on DBE contracting programs is very spotty. In 2016, The National Association of State Procurement Officials reported most procurement and contracting agencies do not effectively monitor Minority Disadvantaged Business Enterprise (DBE) Programs, particularly in the tracking of demographic information on all contracts and jobs financed by the stimulus and the fraud abuse by demographics.

Reports from the U.S. Government Accountability Office (GAO) and the U.S. Department of Transportation (DOT) Office of Inspector General (OIG), for years 2011-2013 (Report No. ZA-2013-072), found the Federal Highway Administration had weak management and oversight of their DBE programs and did not have the right tools to properly monitor states’ DBE programs for transportation construction.

Over the last 25 years, the GAO and U.S. DOT offices have published a number of reports on women- and minority-owned contracting programs with two main conclusions:

  1. Most DBE programs are riddled with corruption, discrimination, mismanagement, fraud and abuse and
  2. Most DBE programs insidiously shut out historically, economically deprived Black- and Latino-owned businesses, the very economically and socially disadvantaged contractors the programs were intended to help (OIG Reports No. ZA-2016-002 and ZA-2017-021).

Qualified and capable Asian, Black and Latino business owners have and continue to face huge walled barriers set in place to impede or prevent winning government contracts long before President Obama’s 2009 billion-dollar stimulus package. The walled barriers only got larger after President Obama signed into law his 2009 billion-dollar stimulus package.

Asian, Black and Latino families have been harder hit by the recession, and getting a fair share of public sector stimulus contracts is extremely critical to the recovery of these communities. DBE programs at local, state and federal levels have been a boon for “DBE coordinators,” “DBE consultants” and “DBE advocacy and administrators” – creating a billion dollar “DBE cottage industry.”

However, highly qualified and capable Asian, Black and Latino business owners remain systematically shut out of lucrative infrastructure contracting at local, state and federal levels, underscoring the fact that the “DBE cottage industry” is an utter and complete miserable failure. Unless local, state and federal governments invest in Asian, Black and Latino communities on a billion-dollar scale, similar to the nation’s investment to rebuild Afghanistan, Iraq and/or bail out Wall Street, Asians, Blacks and Latinos will fall further behind.

Bryan Anderson can be reached at UACDC (University of Arkansas Community Design Center), 1 E. Center St., Ste 220, Fayetteville, AR 72701, uacdc@uark.edu.

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