Black contractors are getting fewer federal highway dollars

July 11, 1994|By Knight-Ridder News Service

WASHINGTON -- Contrary to the intent of affirmative-action laws, the share of federal highway money going to black contractors has been shrinking for nearly a decade.

More work reserved for disadvantaged businesses is going instead to white-owned companies that are controlled -- at least in name -- by women.

The Federal Highway Administration's numbers are striking.

Since 1985, the annual share of federal highway money for African-American contractors has been cut almost in half, to $286 million, while the share for companies owned by white women more than doubled, to $879 million. Few companies are owned by black women.

About 2.4 percent of total federal highway money went to black companies in 1993, compared with 5.5 percent in 1985. Native Americans' share also has dropped somewhat, but the percentages for Hispanics and other ethnic groups have remained nearly constant.

Women owners bristle at the suggestion, but some critics say part of the problem is a fraud inadvertently fostered by the Department of Transportation and Congress: White women acting as business figureheads to satisfy the bureaucracy's quotas, while their husbands or other male relatives maintain actual control.

"There are some legitimate white women-owned businesses. But there's a great deal of fraud out there. There's no question about that," said Anthony Robinson, president of the Washington-based Minority Business Enterprise Legal Defense and Education Fund.

Mr. Robinson said minority contractors' losses "have been in direct proportion to white women's gains and opportunities in the program."

The Transportation Department's minority goals program is one of the few federal programs that directly pits women against minorities in competition for specially reserved work.

But friction could spread throughout the government as Congress considers expanding affirmative-action goals as part of Vice President Al Gore's reinventing government initiative.

The change in blacks' and women's participation in highway programs became obvious after Congress changed the law in 1987 to help women break into the construction business.

"It's kind of hard for lawmakers to say 'We're going to support women against minorities,' but that's what they've done," said Nick Rivera, who is black. He owns Cupola Construction Co. in Downingtown, Pa.

Five years earlier, Congress had enacted a mandatory goal that at least 10 percent of federal highway contracts would go to minority and ethnic contractors. But goals for women contractors were less rigorously pursued.

Some women's advocates say they believe the critical flaw when the law was changed in 1987 was in failing to set a separate and equal goal for women. Instead, female-headed companies were tossed into the ring with racial and ethnic minorities.

Joanne Payne, a Washington consultant, has continued to push for a separate women's goal, and some members of Congress were ready to add a 5 percent women-only goal in 1991. But Ms. Payne and her allies balked.

"Why should women take less? Are we less important than minorities in this country?" Ms. Payne asked.

In the end, Congress took no action and simply asked the General Accounting Office to look into the problem. Its report is expected soon. The Transportation Department also is working on new guidelines to deal with some of the disparities.

Ms. Payne said she believes the real scandal with transportation contracting isn't fraud, but an anti-woman backlash. "A woman, particularly if she's white, goes through twice as much scrutiny as a minority. We call it the 'Jane Crow' phenomenon," she said.

But some women working in highway construction also say they believe that corruption is widespread -- among their competitors.

"You pick up the phone and call the majority of these companies and they'll be managed by a man," said Linda Hale, owner of B&L Enterprises in Jefferson, N.C. "In other words, no one knows where the woman is. It's not right. It's not giving everybody the same chance."

The competition between women- and minority-owned companies is heightened because of the narrow range of work available to all disadvantaged companies.

Few big prime contracts go to women and minorities. Instead, white male prime contractors usually are required to hire a certain percentage of women and minority subcontractors.

Since they are often small and new, most women and minority firms tend to do "specialty contracting," which doesn't require much heavy equipment or bonding power -- painting, hauling, fencing, landscaping, or putting up signs, signals and guardrails are typical.

Almost forgotten in the conflict are those white men whose companies used to do almost all of the specialty contracting.

Government regulators and others involved say white male specialty contractors have largely gone out of business, diversified into other types of construction or found a way to switch their companies to the disadvantaged category -- courtesy of a female family member.

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