Is race a qualification for contractors in California? Last November, the United States Department of Transportation approved the policy of the California Department of Transportation (Caltrans) that 9.5% of the federal funds the state receives for transportation projects will go to subcontractors of preferred races. The policy is contained in a document called the Caltrans’ Disadvantaged Business Enterprise (DBE) Overall Annual Goal and Methodology for Federal Fiscal Year (FFY) 2013-2015.
As part of its approved race-conscious policy, Caltrans requires prime contractors to favor subcontractors who are African American, Asian-Pacific American, Hispanic American, Native American, and women. But prime contractors may not give preferences to male subcontractors who are Subcontinent Asian American, or white. Subcontinent Asian Americans include persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal, and Sri Lanka.
The peculiar decision by Caltrans to favor, say, Chinese Americans over Bangladeshi Americans, or Burmese (Myanmar) Americans over Bhutanese Americans, is based on a disparity study performed last year at Caltrans’ behest. That study combined all data from 2007-2010 state and local prime contracts with data from all subcontracts, including contracts from the transportation construction and engineering industries. The massed contracting data showed statistical disparities from 2009-2010 that were substantial for firms owned by African Americans, Asian-Pacific Americans, Hispanic Americans, Native Americans, and white women. Caltrans chose not to rely on the full data from 2007-2010 showing no disparities for white women.
Although Caltrans has never disbarred a single prime contractor for engaging in discriminatory conduct (or even accused any), Caltrans assumes that the statistical disparities are proof of intentional discrimination occurring industry-wide. To remedy this supposed discrimination, Caltrans imposes a one-size-fits-all racial preference for all federally assisted transportation construction and engineering projects. As I noted in an earlier post, Caltrans’ attempt to enforce one preference statewide fails the constitutional requirement for narrow tailoring. In yet another post, I discussed why it is wrong for Caltrans to mix prime contracting data with subcontracting data.
Caltrans’ new DBE program is intended to remedy combined statistical disparities, but the result is state-mandated discrimination. For instance, on engineering subcontracts, prime contractors must give preferences to engineers who are Asian-Pacific American and Hispanic American. But the disparity study showed there were no disparities for engineers from these racial groups on engineering subcontracts. On the other hand, there were substantial disparities for Subcontinent Asian American engineers, who receive no preferences. On construction subcontracts, the disparity study reveals no substantial disparities for white women, or Hispanic or Native American contractors – in other words, no inferences of discrimination against these groups. But they all continue to receive preferences on construction subcontracts. This means that if intentional discrimination is truly the cause of the disparities for African American contractors, the Caltrans DBE program offers a “business as usual” approach with no remedy. Racist prime contractors, if any exist, may continue to discriminate against African American contractors while meeting the program’s race-conscious goals at the same time!
Pitting minority group against minority group, and dividing certain minority groups by sex, but not others, is the result of Caltrans’ twin untenable assumptions that statistical disparities alone can prove discrimination, and that such disparities can be “remedied” by aggregate preferences. The Caltrans requirement that prime contractors treat businesses differently based upon the owner’s skin color or sex is discrimination in violation of the Equal Protection Clause.