Less Stimulus For Minority Businesses

WASHINGTON — Hispanic and black businesses are receiving a disproportionately small number of federal stimulus contracts, creating a rising chorus of demands for the Obama administration to be more inclusive and more closely track who receives government-financed work.

Latinos and blacks have faced obstacles to winning government contracts long before the stimulus. They own 6.8 and 5.2 percent of all businesses, respectively, according to census figures. Yet Latino-owned business have received only 1.7 percent of $46 billion in federal stimulus contracts recorded in U.S. government data, and black-owned businesses have received just 1.1 percent.

That pot of money is just a small fraction of the $862 billion economic stimulus law. Billions more have been given to states, which have used the money to award contracts of their own.

Although states record minority status when they award contracts to businesses, there is no central, consistent or public compilation of that data, according to Laura Barrett, director of the Transportation Equity Network. She and other minority advocates are calling for complete and publicly accessible demographic information on all contracts and jobs financed by the stimulus.

Minority businesses are often too small to compete for projects; do not have access to the necessary capital, equipment or bonding requirements; or lose bids to companies with well-established relationships. There also has been an emphasis on spending stimulus money quickly, which favors businesses that have won past contracts.

But minority advocates say that blacks and Latinos have been harder hit by the recession, and getting a fair share of stimulus contracts is key to the recovery of these communities. Unemployment among blacks and Hispanics is much higher than among whites. And although unemployment among whites increased at a faster rate during the worst of the recession than among minorities, rates of those considered underemployed – including people who have given up looking for full-time work or people working part-time because there is no full-time work available – increased faster among minorities than whites.

Figures from the Transportation Department on highway stimulus spending – at the heart of the government's effort to lift the economy – have further concerned advocacy groups.

Six percent of the $16.9 billion in Federal Highway Administration contract money spent by states has gone to disadvantaged business enterprises, which includes companies owned by minorities as well as women, veterans and the disabled, according to department press secretary Olivia Alair.

Out of $1.1 billion in state-spent Federal Aviation Administration contract money, 7.8 percent has gone to disadvantaged businesses, Alair said, and 8.6 percent of direct Transportation Department contract dollars have gone to those companies.

Alair said some minority companies might not be included in those figures because they are not small businesses or choose not to classify themselves as disadvantaged. Minority businesses also are eligible for stimulus grants, but those are not tracked by race.

Still, "these numbers are far too low," especially when compared with state and federal goals," Barrett said. "The businesses and communities that need federal dollars most are seeing the least."

The Obama administration has taken steps to address minority concerns. Transportation Secretary Ray LaHood wrote governors in December urging them to work with disadvantaged businesses. LaHood suggested unbundling large contracts to make them more accessible to small businesses, and emulating a Missouri contracting project that made community groups and openness part of the process.

LaHood's department has pledged $20 million in subsidies to help disadvantaged businesses pay bonding premiums and fees, and has established a short-term loan program that lent $4.9 million in 2009. Last month, LaHood announced $9.9 million in grants to help businesses owned by minorities and women compete for federal contracts.

Federal agencies held more than 300 events nationwide to educate minority businesses about stimulus opportunities, said White House spokesman Corey Ealons. He also said there is a backlog of awarded contracts that have not yet been entered into the tracking database.

The White House also pointed out that about $21 billion of the $46 billion is guaranteed, and the rest are options. Latino-owned businesses have received 3.7 percent of the guaranteed total, and black-owned businesses 2.4 percent.

The founder and chief executive of one of the nation's largest black-owned construction companies, Richard Copeland of THOR Construction Inc., said minority-owned companies usually employ 60 percent minorities.

"If we can't get on these jobs," he said, "we can't hire our people from our community, so poverty and drugs and crime and unemployment and welfare become habitual." His company has done a small amount of weatherization work through Minnesota stimulus contracts.

He said many minority businesses can't develop the capability to do government work because a "good old boy" network shuts them out of contracts.

Copeland's company has its headquarters in Minneapolis, and has 200 full-time employees and offices in Los Angeles, Las Vegas, New Orleans and Atlanta. He said he abandoned highway work years ago to focus on erecting buildings.

"These big highway contractors try to keep you off the project, and when you get on, they try to make sure you don't come back," he said. "We hear about this all across the country."

That's what Samuel Foley Jr., a lawyer for the black-owned construction company Holley Enterprises, says happened to his client.

Holley was subcontracted by James J. Anderson Construction to perform demolition and salvage operations on a subway station repair project in Philadelphia. This enabled Anderson to meet contract guidelines for minority participation, but about two months later Holley's contract was unfairly terminated, Foley said.

Anderson Construction said in a statement that Holley violated the terms of the contract. Anderson said it did not perform any of the work itself and gave the contract to another disadvantaged business.

Foley, chairman of the National Black Chamber of Commerce Construction Committee, said many companies "play games to get rid of the minority contractor."

"This is not a unique situation," he said. "For the past 30 years in Philadelphia it's been this way."

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Jesse Washington covers race and ethnicity for The Associated Press. He is reachable at jwashington(at)ap.org or . http://www.twitter.com/jessewashington

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On the Net:

Stimulus contracts awarded to businesses: http://tinyurl.com/ya5ogyb

White House site to track stimulus funds: http://www.recovery.gov

Comments

[randy44]

01:14 PM on 03/08/2010

Why doesn't President Obama stop his aides from stealing his presidency? He still has time to stop them.

[Biz Savings]

11:36 AM on 03/08/2010

Starting a business tips for people that are unemployeed. Starting a business while unemployed. http://bit.ly/19KOiP

[GravitonX]

10:48 AM on 03/08/2010

The business owner above said it best...

"If we can't get on these jobs," he said, "we can't hire our people from our community, so poverty and drugs and crime and unemployment and welfare become habitual."

The bottomline is that nearly ALL white firms, especially small firms, who are exempt from EEOC rules, because they employ 25 or fewer employees, are solidly white. These are those "small businesses that make America great." They simply do not hire Blacks or Latinos, and when they do, it's temporary, with less pay, and usually contractually onerous. I've seen it over and over and over again.

Minorities, especially Blacks and Latinos, MUST DEEPLY realize that most of their social ills come from having emaciated business communities and being locked out of business opportunities, both public and private. You simply will not solve the issues of unemployment, education, crime, etc. in the Black and Latino community without addressing the central issue of minority business. Being content to get nothing (Republicans) or yet another bandage welfare program (Democrats) simply will get us nowhere.

[DuganS1]

10:23 AM on 03/08/2010

We need to do what is best for the economy. Affirmative action like policy should play no role in that. s for this...

"Latinos and blacks have faced obstacles to winning government contracts long before the stimulus. They own 6.8 and 5.2 percent of all businesses, respectively, according to census figures. Yet Latino-owned business have received only 1.7 percent of $46 billion in federal stimulus contracts recorded in U.S. government data, and black-owned businesses have received just 1.1 percent."

... the logic is flawed. It says nothing about how big the businesses are that minorities own, or what line of work they are in.

[St Francis]

05:35 PM on 03/11/2010

Hi! For your information: I am a hispanic owner of a very successful manufacturer in business for over 35 years. We have a reputation for high quality and have sucessfully bidded on many government contracts were the main consideration is lowest price with a qualified vendor. Recently, we bidded for a contract over $2Million and under bidded our competitors by $700,000. However, this buying government agency had a favorite vendor and did all they could to prevent my company from being awarded the contract. They even held information from us that should have been made public - such as the date of the aware and who received it. They did this to prevent our filing a protest which would have prevented them making the award to their favorite. This is example of the "Good Old Boys" network at the cost of our tax payers and a honest minority owned manufacturer. I stopped marketing my company as a minority own business, because I learned that no big busines nor government agency really is interested in doing business with minorities. I feel sorry for all those minority owners who waste so much time at so called "opportunity for minority business" events.

[sealdadeal4me]

10:03 AM on 03/08/2010

I know many here will say that minorities should not be given any preference in contracts or any other place in life and I will agree. I would say they shouldn’t be given preference but they should be allowed to compete on an equal basis and in this country that is just not how things work. We forget about all the unequal treatment that is happening that at many times is subconscious of it even happening. When people don’t look like us or speak like us, there are discriminatory instincts that come up and we chose how we are going to deal with it, and that is an individual choice and many times it has been dealt with by isolating or prejudicing a certain group. These people deserve the same opportunity as any other in our society and we need decide whether we as a nation will make it right or continue to allow divisions to exist in our lives. But what I have seen over my life time it doesn’t matter if we like it our not the country is becoming a mixed race of people and you will not be able to deal who is in the minority or not 50 years from now

[ScarlettMocha]

09:35 AM on 03/08/2010

The whole notion of "minority" businesses receiving federal $ is a bunch of bunk!
Everyone in the industry knows the money really goes to "majority" businesses who use their wives as owners and/or token AA as front men. Outside of that sham, the money goes first to any other minority than AA and Hispanics. I've worked in the industry for a number of years and it is just a big front. The proof is in the numbers of we could get accurate data.

Another reason young people don't have hope, they can see the fraud.

[GravitonX]

11:16 AM on 03/08/2010

Since the inception of Civil Rights, the real battle has ALWAYS been about statistics and measures, because it's the only way to enforce results. In this right, white supremacists have won, and true objectives of the Civilr Rights died a long time ago. Civil Rights has pretty much amounted to "they no longer harrass you in the streets as badly anymore." Everyone knows that Affirmative Action has been dead for decades and that it's nothing but a piece of paper with no more force than the sense of "guilt" some white person behind the seen has in enforcing it.

Without statistics and measures you can have no true progress and no valid sense of how you are performing. This is why they can put a "high-profile" minority in place and call it "progress." You have no real measures, no sense of the numbers, no understanding of reality. Therefore, you can be as easily deceived as the gambler that thinks he can hit the jackpot because he saw Fred hit it last week. They know the numbers are important and that's why when you do call for the measures, they either try to bury it or call for it not to apply.

[Lordcron]

09:27 AM on 03/08/2010

I have learned to use the power of under estimation in my favor and it works. This might sting to most whites but it's been proven time and time again. A white person always thinks they are better and smarter then you so there guard is lower on you then on a white counterpart. Wait for your perfect time to strike only you'll know it. While Silly Billy is fighting with Jane over a position you move in and take it. They won't see you coming. Just like when Barack Obama was running for the senate. He got there because his white counterparts wasn't even worried about him. Wrote him off like he didn't matter and while they was busy fighting each other you shake the right hands play the right cards and you walk in without even a fight. It's in there DNA to under estimate you because that's how they are brought up. They believe that from birth they have a certain amount of intelligence you don't have. So the guard is lower. I'm gonna get all kinds of kick back from whites for saying this is (R)acist and an insult and I don't know what I'm talking about and the whole nine but at the end of the day those who truly understand what cards they have, always win because the name of the game is winner takes all.

I'm very well off and I've done it by not playing the stacked deck.

[ScarlettMocha]

09:37 AM on 03/08/2010

Hear! Hear!

[Chicagofan1]

09:44 AM on 03/08/2010

I would be surprise if many would disagree with you. You are correct on all the accounts. Fav.

[Okieborn]

08:53 AM on 03/08/2010

Take a look at Small business, poor, ill , uninsured, jobless and honestly say they are on the Presidents priority list !!!
I don't think so !!
Shameless !!

[GravitonX]

08:49 AM on 03/08/2010

Just as a matter of course, President Obama will be given his 8 years. As frustrated as I am with the Black/Latino business situation, being an owner of both, I do understand that it will take years for the system to be gutted of white business cronyism. It's absolutely epidemic. If the general public knew the corruption that lies at the heart of federal, state, and municipal contracting, they'd think the US was a 3rd world country. But, as the business owner in the article above said, it's been like this for years, since well before President Obama was even born.

[StillIRise]

09:09 AM on 03/08/2010

Good post.

I was thinking the same thing as I was reading the article. I knew some people would immediately point a finger at President Obama, blaming him for this situation.

Yet, the historical reality of systemic racism that continues to plague our nation cannot be erased by this one man in this first year of his presidency. It would take generations, well beyond President Obama's two terms, to right this wrong that has become so embedded in the very fabric of our society.

It's unfortunate that so many people are only willing to see what's in front of them, but have no desire to consider how and why it got that way, and what it will take to redress this situation. In fact, it is for this very reason that situations like this persist.

[GravitonX]

10:58 AM on 03/08/2010

There is a reason, even if Obama has not come to fully comprehend it, why (white supremacist) Republicans have sought to block nearly every staff nomination the Administration has put forth. Because, without your people in position, you effectively do not truly run the organization, in this case, the US government. You are merely passing through, while "operatives" installed in past administration quietly continue business as usual, in this case, the business of absolute white supremacy.

It's going to take years to gut this government, possibly, no, definitely, decades.

We are in the beginning phases of an Epic Reconstruction. Our children and our children's children depend on us not to fail in our resolve and patience.

[jack7576]

08:09 AM on 03/08/2010

this is what you folks get for voting for democrats

[GravitonX]

08:34 AM on 03/08/2010

This has little to do with voting Democrat or not but whether America is a racist country. Don't confuse the two. Blacks are just as unlikely to get contracts from a party that thinks of them as a bunch of .....

[keepemhonest]

08:50 AM on 03/08/2010

Jackyl

um... minorities got LESS under Republicans.

[GravitonX]

08:52 AM on 03/08/2010

Perhaps not less, but just as little.

[Cakey4814]

07:41 AM on 03/08/2010

And if this was the reverse would HP publicize it? I see they're doing their normal Monday morning criticism which will set the pace for the rest of the week..

[jerryatthebeach]

07:39 AM on 03/08/2010

If you want to start a business, you ll find a way. Start slowly, the tortoise always wins the race. I wonder if O is preparing his resignation speech???

[graffitijoe]

07:34 AM on 03/08/2010

what we need is more bureaucrats to make sure everyone gets a fair shot at the trough of taxpayer dollars.

[LostRiverLedger]

07:29 AM on 03/08/2010

Doesn't it really depend on "what" minority/women owned businesses have to sell? Most small businesses don't necessarily have a product/service that lends itself to direct government purchase. I agree that this needs to be looked into, but drilling down to the types of businesses and their current demographics make up within an industry would give a clearer picture of where the money is going. It's also important to know how government procurement and the GSA work and the FEDs have usually done a poor job in getting that information out to the small business community regardless of race or gender.

[LazarusLong]

08:42 AM on 03/08/2010

Agreed.

A significant portion of the first ARRA (stimulus) funds went to already approved road construction and paving projects. In a lot of areas, there are only one or two qualified paving companies available to do the work - quite frequently, not minority owned.

[RealisticallyOptimist]

06:13 AM on 03/08/2010

slithers, you're the racist one!