Since signing the Recovery Act last year, President Barack Obama has touted the law's funding for transportation and infrastructure as an efficient way to create jobs. And the jobs bill he signed just last week extends these transportation projects through December, which he maintains will put even more Americans back to work. But are Black contractors getting fair access to the stimulus dollars being funneled into the program?
A study released in January by the nonprofit Transportation Equity Network, says the spending has been uneven. Based on federal reports as of December 2009, the group says that of the $163.8 million in contracts given directly to firms by the U.S. Department of Transportation (DOT), $16.8 million, or 10.3 percent, went to minority-owned businesses--but zero went to Black-owned businesses.
The DOT argues that because the vast majority of stimulus money is allocated to states, the report's small sampling is misleading. The agency has no data on the racial breakdown of their complete funding, but says about $1.3 billion in transportation funds have gone to certified Disadvantaged Business Enterprises. Still, they recognize that Black contractors have complained of being shut out, and admit they've got to do better. I talked with Transportation Secretary Ray LaHood, just before the DOT commenced a conference on Wednesday about helping minority-owned firms compete. Here's what he had to say about what the agency is doing to get those numbers up.
CYNTHIA: You've advocated for states to provide opportunities for underrepresented firms, but the Transportation Department's own numbers seem to fall short of that. How are these contracts are being allocated?
TRANSPORTATION SECRETARY RAY LaHOOD: Our reporting shows that we have awarded $1.3 billion in recovery funds for undercapitalized businesses. The way the program works is, the money is allocated to the states according to projects they have. They enter into contracts with people to build roads and bridges, and then they have an obligation to seek out these businesses to make them aware. Over a period of about 14 months we've been able to get significant dollars out the door, we've traveled the country promoting this program, and we've encouraged states through the governors and through the Department of Transportation to make sure that contractors are matching up with disadvantaged and women-owned businesses. We've made some progress, but we need to do more. That's why we're having this conference on Wednesday, and the 600 people attending will get the down-in-the-weeds procedures that are needed to get involved.
CYNTHIA: Why aren't more Black-owned businesses getting access to transportation funding?
SECRETARY LaHOOD: There are a lot of moving parts. If we could just write a check to a disadvantaged business, that would be one thing. But we have to work with the states, we have to work with the state DOTs, and we also have to make sure that the building trades folks--bricklayers and laborers and other construction workers--are training people to do these kind of jobs. There are at least a half dozen different players involved, and we're trying to work with all these different organizations to make sure that this money is used properly and that disadvantaged businesses are taking advantage of it.
CYNTHIA: Have you considered establishing a national mandate that requires inclusion, to ensure that states reach these goals?
SECRETARY LaHOOD: Right now you can't have a national mandate. That is illegal. There is a lot of discussion on Capitol Hill about whether you should mandate a certain percent of these dollars, and a certain percent of people to be hired. That would have to come from Congress, and we're actually going to have a meeting with the chairman of the Transportation Committee and the Congressional Black Caucus this afternoon to discuss some of the ways forward with the legislation. The fact that so many of these disadvantaged businesses have gone to their members of Congress and said, "We don't have access," I think is something Congress will consider.
There's a program, on a bridge project between Illinois and Missouri, that we're going to use as a model to replicate in five cities. In this model, we obligated the money, but the state and the contractor sat down with disadvantaged businesses, told them what projects would be available, and matched them with their ability to provide construction people on these jobs. We're going to develop similar programs in Louisville, Kentucky; Denver, Colorado; Hartford, Connecticut; Phoenix, Arizona; and Brooklyn, New York. It's a great example of really hooking people up and telling them what opportunities are available.
We're also forming an advisory committee that will help us look at the progress we've made and make sure there are opportunities for all kinds of firms. We want to make sure that there's consistency in the way this program is being implemented.