Minority, Women-Owned Small Businesses Seek Role in Caltrans Contracting Suit
Small business owners filed a motion today asking to intervene in a lawsuit that seeks to dismantle Caltrans’ Disadvantaged Business Enterprise Program (DBE). The group of business owners asking to intervene oppose the lawsuit and support the DBE program, which aims to give minority and women-owned businesses equal opportunity to compete for federal contracts.
“Small businesses owned by women and minorities are a vital part of our state’s economy and deserve a level playing field,” said Ingrid Merriwether, CEO of Merriwether & Williams, a small insurance services firm and a member of the Coalition for Economic Equity. “No matter how hard we work, without a fair public contracting system, small business owners will be at a tremendous disadvantage – as will the thousands of Californians we employ and the communities in which we work.”
The suit, Associated General Contractors of America v. California Department of Transportation, is pending in U.S. District Court in Sacramento.
The Lawyers’ Committee for Civil Rights of the San Francisco Bay Area (LCCR), the American Civil Liberties Union (ACLU) Foundation of Northern California, Equal Justice Society (EJS) and the law firm Bingham McCutchen LLP filed the motion on behalf of the Coalition for Economic Equity (CEE) and the San Diego Chapter of the NAACP.
“Caltrans’ federally approved contract procedures give small businesses a fair shot at competing for contracts, including for transportation projects slated to receive millions in ’stimulus funds,’” said Oren Sellstrom, Associate Director of Litigation at LCCR. “California must continue to make a focused and concerted effort to ensure that every business in the state has equal access to these public contracts, and that no group will be disproportionately excluded.”
“This lawsuit against Caltrans is a blatant attempt to dismantle equal opportunity in public contracting and goes against core constitutional values,” said Alan Schlosser, Legal Director at the ACLU of Northern California. “Caltrans’ framework to ensure fair participation is consistent with equal protection principles, and is in fact mandated by constitutional requirements.”
Caltrans’ Disadvantaged Business Enterprise program has established a framework for ensuring fair participation in federally funded public works projects in California, but has faced challenges. In 2006, Caltrans suspended the program’s race- and gender-conscious elements after a federal appeals court ruled that states had to document the existence of discrimination in the awarding of contracts. As a result, the number of women- and minority owned businesses awarded Caltrans projects plummeted — from nearly 11 percent in 2005 to just 2.2 percent in 2009.
In 2007, an extensive disparity study commissioned by Caltrans documented discrimination against small businesses owned by women and minorities in federally funded contracts. Caltrans then sought approval from the U.S. Department of Transportation (DOT) to reinstate the suspended elements as a necessary remedy to such discrimination. DOT granted its approval in August 2008, noting that Caltrans had a duty under federal law to reverse the steep decline in participation.
In June 2009, Caltrans’ procedures were challenged in the pending lawsuit filed by the Associated General Contractors of San Diego.
Calif. Transportation Dept. to Reinstate Race-Conscious Contract Goals
The Coalition for Economic Equity (CEE) on Friday announced that after a nearly three-year hiatus, the California Department of Transportation (Caltrans) is poised to reinstate race-conscious goals for federally funded transportation contracts in California.
CEE is an umbrella coalition of associations serving diverse minority- and women-owned businesses that was first formed in 1982 in response to an almost total exclusion of MBEs and WBEs from San Francisco’s public contracting system. In 1984, the Coalition succeeded in securing enactment of San Francisco’s first contracting equity ordinance introduced by Supervisors Doris M. Ward and Willie B. Kennedy. Since that time, the Coalition has worked to strengthen and defend contracting equity programs throughout the Bay Area, as well as at the state and federal levels.
CEE has confirmed with the Federal Highway Administration that the Caltrans’ Disadvantaged Business Enterprise (DBE) program needs no further approvals to set goals for improving the awarding of these contracts.
