December 1, 2015

Disparity studies get no respect

By Disparity studies get no respect

It turns out few people trust consulting firms that conduct disparity studies.  According to an article in the New York Daily News, New York City recently entered into a contract with consulting firm MGT of America to conduct a disparity study.  The firm is to determine whether the city gave out fewer contracts by percentage to minority- and women-owned firms than to firms owned by nonminority males.  A substantial disparity could provide an inference of racial discrimination, which would likely prompt the city to begin awarding contracts by race instead of finding ways to eliminate discriminatory practices.

On the other hand, if substantial disparities are not found, then the city would have no legal basis for having a race-based contracting program.  That should be good news, because it would signify the absence of discrimination.  But one group has already criticized the yet-to-be-completed disparity study as flawed.  It claims the consulting firm conducting the study is biased, and will likely report a finding of “no” discrimination by fudging the results.

I like to find flaws in disparity studies, too.  But I generally wait until a study is completed before I begin my examination.  Maybe I’ve been going about it the wrong way.

It turns out that disparity studies often have results that no one likes or expects, regardless of the firm conducting the study.  So condemning studies before they are even performed might make sense.  In one case, the city of Cleveland paid $672,660 dollars to another consulting firm for a study that may have contained the exact same legal reviews, conclusions and recommendations copied from disparity studies on government agencies from Florida to Missouri. No one liked that.

Usually, at least one group will be displeased by the findings of a contracting disparity study.  A study for the Washington Department of Transportation provides an example.  A consulting firm analyzed more than 11,000 transportation prime contracts and subcontracts and reported that white women, as a group, received more contract dollars from the state than what would be expected given their availability for that type of work. In other words: no discrimination. Washington was compelled to seek a waiver from the U.S. Department of Transportation so it could grant race- and sex- based preferences to male and female minority-owned firms, but not to firms owned by white women.  But white women contractors threatened to sue if they were denied preferential treatment.

Often several groups dislike the findings of disparity studies.   Recently, a disparity study for Cincinnati, performed by yet another consulting firm found no statistical disparities that would justify sweeping racial preferences for all minority categories.  The only racial preferences that study could possibly justify would be a program providing preferences to firms owned by African Americans and white women, but not to firms owned by Asians, Hispanics, or Native Americans.  While there may be exceptions, few would like such a divisive program.

Based on the results of 2012 disparity study, Milwaukee planned to grant racial preferences in a similar and peculiar fashion.  On construction contracts, the city and its prime contractors were to grant preferences to businesses owned by African Americans, Asians, and women of all races, but not to Hispanic males, Native American males, and white males. The city was promptly sued by the Hispanic Chamber of Commerce and forced to abandon its discriminatory program.

So where does the push to conduct disparity studies come from? In City of Richmond v. J.A. Croson, the Supreme Court held that a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually hired, might provide an inference of discriminatory exclusion.  That formula in Croson has encouraged the use of statistical disparity studies by governmental units to justify race-based public contracting programs.  Since Croson, federal, state, and local governments have spent more than $100 million of taxpayers’ money in an effort to manufacture evidence of discrimination using statistical disparity studies.

Add approximately one more million.  According to the article above, New York City will pay MGT of America almost $920,000 to complete one study.

Rather than paying out a million dollars for a disparity study that no one will warmly receive – or believe – cities might consider spending the money to design race-neutral contracting programs to eliminate any possibility of discriminatory contracting.  Ensuring that prime contracts and subcontracts are awarded to the lowest responsible bidder in a transparent process could go a long way in that regard.

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