California high-speed rail’s race-based contracting scheme is off track

August 13, 2012 | By RALPH KASARDA

On August 2, 2012, I attended the monthly public board meeting of the California High Speed Rail Authority (CHSRA) to comment on CHSRA’s new race-based contracting goal.  For anyone who has not attended one of these meetings, they appear to have evolved into an assembly of the mutual admiration society where supporters of high-speed rail and CHSRA board members gather to praise one another.

The meetings begin with public comments.  These are often made by local politicians desperately hoping that the project will bring jobs to their struggling California communities.  The other large group of supporters consists of officials from trade associations, whose members hope to receive billions of dollars in publicly funded contracts.

Supporters tell the board members what a great job they are doing.  This makes the board members happy, so they tell their supporters that they are doing a terrific job supporting them. Then the board members publicly praise their staff, and sometimes, they even praise themselves.

The hardworking personnel of the CHSRA no doubt work long hours and deserve this recognition, but high-speed rail has its critics, too.  The construction of a new rail system across California is expected to displace thousands of homeowners and cause harm to the environment – all at taxpayers’ expense.  Sometimes people show up for a CHSRA board meeting who don’t want to be forced from their homes, or object to adverse environmental impacts, or don’t want their tax dollars going to pay for government contracts or more government jobs.  Understandably, any such vocal opposition interferes with the positive flow of energy at these meetings.  Consequently, critics of the high-speed rail are sometimes not well received.

All kidding aside, whether high-speed rail is good or bad is not for me to say.  But of one thing I am certain.  As the governing board of a California public entity, CHSRA’s board members have a duty to uphold the law.  The purpose of my attendance at the last board meeting was to caution board members that actions they were about to take – further injecting race into public contracting decisions – are prohibited by federal law and possibly the California Constitution.

On the day I attended, members of the board planned to vote on whether to set a goal that 10 percent of the work would be allocated based on race and sex.  CHSRA already has a goal that 30 percent of the work should be performed by small business owners of any race or sex.  For CHSRA and its supporters, that is not good enough.  As part of the 30% small business goal, the CHSRA’s new plan would allocate 10% of work on the basis of race and sex.

The CHRSA says it is adopting the national goal of 10% found in federal regulations.  But those regulations do not apply to funds administered by the Federal Railroad Administration, which oversees the payment of federal high-speed rail funds to CHRSA.  Worse, federal regulations specifically prohibit state agencies that are subject to these regulations from adopting the 10% figure.  Federal regulations at 49 C.F.R. section 26.41(c) make clear that the “national 10 percent goal does not authorize or require [federal-aid] recipients to set overall or contract goals at the 10 percent level. . . .”  States “cannot simply rely on  . . . the 10 percent national goal” as CHSRA wants to do.   Instead, CHSRA must determine its own goal based on “demonstrable evidence” of available ready, willing, and able contractors.  But CHSRA admits  it has not performed a disparity study.  Therefore the race- and sex-based 10 percent goal is not derived from “demonstrable evidence” of the “number of ready, willing, and able contractors.”

Rather than permitting CHSRA to simply adopt the 10 percent national goal, the federal regulations specifically prohibit CHSRA from doing so.  Why? Most everyone knows, or should know, that laws that divide and index people to measure their civil rights by race are forbidden.  Specifically, government hiring or contracting quotas on the basis of race are blatantly unconstitutional.  What about goals?  As the California Supreme Court held in Hi-Voltage Wire Works, Inc. v. City of San Josea racial participation goal differs from a quota or set-aside only in degree; by whatever label, it remains “a line drawn on the basis of race.”

There is no constitutional right for any race to be preferred.  So when CHSRA begins to make classifications on the basis of race, it may only do so in accordance with established law.  My public comments to CHSRA board members can be found here, beginning at about 19:05 into the video.  PLF’s August 2, 2012 letter to CHSRA explains the issues in even more depth.  Of course, in the end, CHSRA board members elected to adopt the national goal contrary to the federal regulations.