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Government Contracting Disparities Hurting Minority Businesses


People hire who they know. The same holds true when state and local governments go looking for contractors to design and build everything from schools to bridges. White-owned businesses win most of the bids for government work, and that's despite affirmative action goals meant to make up for disparities. Chris Burrell from WGBH's New England Center for Investigative Reporting found that in many places, the numbers are actually getting worse.

CHRIS BURRELL, BYLINE: Larry Cole (ph) is a minority business owner. He runs a trucking company that hauls construction materials, most of it on jobs funded by the state. In Massachusetts and in many other states, these kind of public-sector contracts are required to hire a certain percentage of minority and women-owned businesses. But, Cole says...

LARRY COLE: Don't always work that way.

BURRELL: Over the last two decades, adjusted for inflation, the value of Massachusetts contracts going to minority businesses has fallen 24% - that's $135 million less per year paid to minority contractors. Nationwide, there are over 11 million minority-owned businesses. Federal studies show they face significant disparities and barriers when they try to do business with state and local governments.

Larry Cole saw it up close. In 2007, a construction company promised him hundreds of hours of work as a certified minority subcontractor. Cole got only a fraction of the work despite sometimes showing up on-site with trucks and drivers.

COLE: I was supposed to be doing all the trucking here. Well - and he keeps going well - and next thing you know, well, you know, I didn't plan on doing it.

BURRELL: The loss of promised work was bad timing.

COLE: You've got to feed a family. At that time, I had three kids in college plus the trucks, the insurance, payroll, taxes, whatever. You've got to keep going. You haven't had time to sit down and just argue every day about it, even though you hold your fist out this. And look, I want my share.

BURRELL: Cole's trucking company shrank, he says, partly because of his frustration of getting work in the public sector. Massachusetts leaders began decades ago trying to fix economic disparities facing minority-owned businesses. They passed laws and created agencies to even the playing field. Lieutenant Governor Karyn Polito praised recent efforts to boost minority participation in building two casinos approved by the state.

KARYN POLITO: The one thing the Mass Gaming Commission did was to be intentional to diversify their workforce - setting these goals, holding everyone accountable, measuring progress.

BURRELL: Progress? James Jennings is skeptical. He's an expert on race and politics and an emeritus professor at Tufts University. Sitting at a busy cafe, Jennings says what's lacking is the political will to increase fairness and equity for minority-owned companies.

JAMES JENNINGS: The pushing has been going on for 25, 30 years now. And at some point, I think leadership has to be more aggressive in saying, we're going to do something about this because it's the right thing to do, but it's also economically smart thing to do.


UNIDENTIFIED CHILD #1: You're not doing this...

BURRELL: Philadelphia is one place that's getting more aggressive about hiring minorities.

UNIDENTIFIED CHILD #2: Yeah, (unintelligible).

BURRELL: This city playground in North Philadelphia where kids are playing soccer on a blacktop basketball court is about to get renovated - part of a $400 million investment in parks and libraries in low-income neighborhoods like this one. The city wants to spend a third of the money hiring businesses owned by minorities. Cappy Sabir is an engineer and co-owner of a consulting firm hired for this project. He's also black.

CAPPY SABIR: In these poor communities that are mostly minority in the city of Philadelphia. And it makes a lot of sense that if you're going to sit there and have people coming in and working and fixing things and designing things, let them look like them. Now you're giving a level of motivation and pride to the community. See, oh, I can be an architect. I can be an engineer. I can be a contractor.

BURRELL: Iola Harper heads up Philadelphia's Office of Economic Opportunity. She says that underpinning the city's goal is simple economics, especially in a city with a poverty rate at 26%, one of the country's highest for a big city.

IOLA HARPER: Businesses that are owned by people of color hire people who look like them. And so the more that we can get access to jobs and opportunity, that's more people that are going to be employed, and that's going to impact the poverty rate.

BURRELL: Philadelphia is also lowering barriers that have historically favored big contractors by offering smaller, minority and women-owned firms help before they even bid on projects. Cappy Sabir's company with just 20 employees took advantage of the city's new rules and is now treated just like a big contractor by the city.

SABIR: Offering the opportunity for minority firms to be primes - to us, that's like Obama becoming president. It's huge.

BURRELL: The huge change that Sabir is welcoming in Philadelphia, though, is not happening across the country according to a federal analysis in 2016. As minorities become the majority in more cities and even states, experts say the urgency of economic equity for minority business owners is growing.

For NPR News, I'm Chris Burrell in Boston. Transcript provided by NPR, Copyright NPR.

Christopher Burrell
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