GDOT’s program for DBEs benefits haulers more than service companies

Editor’s note: This is the second of two stories that examine a disparity report prepared for Georgia’s Department of Transportation. Part 1: GDOT awards pennies on the dollar to women- and minority-owned firms

By David Pendered

Efforts to improve opportunities for disadvantaged businesses to get contracts from the Georgia Department of Transportation haven’t leveled the playing field, according to comments made at meetings held around the state in 2016.

gdot, dump truck

The hauling business for road construction in Georgia is dominated by disadvantaged businesses, according to a disparity report for GDOT. Credit: hulcher.com

The biggest winners were companies that haul things for road builders. Owners of professional service firms, such as engineers and contractors, feel they are closed out of the system.

GDOT hired a consultant to conduct a diversity study of the department’s federally mandated programs to direct business to companies owned by a woman or minority who works for the company everyday. The consultant reviewed spending from July 1, 2011 through June 30, 2014.

Kim King, director of GDOT’s equal employment opportunity program, is slated to present an update on the report Wednesday to the Equal Access Committee of GDOT’s board.

The consultant’s report included responses from these DBE and MWBEs that were gathered through interviews, focus groups and informational meetings. The meetings were conducted in several cities around the state. The identity of speakers was not released.

In Atlanta, a speaker identified as ATL-FG-5 said she has “done my due diligence” to work on state road projects. However, she said, she can find work only as a subcontractor because she can’t find out where contracts are being let. The report quotes her as saying:

  • “’We want our own contracts.’ she says, shaking her head, ‘but it’s always a closed door.’
  • “’The counties will refer you back to GDOT,’” and vice versa, she states, feeling that she gets ‘the run-around’ from GDOT and the local entities.”
gdot, hauling, disparity study

Disadvantaged businesses dominate the hauling sector of Georgia’s road building industry, but owners of professional service firms have said they have little opportunity to win state contracts as prime or subcontractors, according to a report for GDOT. Credit: GDOT

One area where disadvantaged businesses over-perform is trucking and hauling.

Companies owned by blacks, Hispanics and women received 92.6 percent of all the money paid to haulers. However, companies owned by blacks, Hispanics and women represent just 60.76 percent of the companies registered to work on state projects. The figures represent an over-utilitization of these firms, according to GDOT’s consultant.

Of note, the consultant reported, no subcontracts for hauling were awarded to the five firms owned by Asians or the two firms owned by Native Americans.

By contrast, majority-owned firms were paid just 7.41 percent of all dollars spent on hauling, even though majority-owned firms represent 34.24 percent of all haulers registered to work on state project. These figures represent an under-utilization of these firms, according to the consultant.

A speaker identified as PH-ATL-7 said she attends all the outreach programs in hopes of generating business. However, she said she sees the same pattern repeatedly: “all these primes have the same work [available for disadvantaged firms] … hauling, traffic control.”

GDOT hired Atlanta-based Griffin & Strong, P.C. to conduct the disparity study. Rodney Griffin founded the company in 1992. The company practices law and consults on governmental and private matters, according to a profile of the company contained in the report.

gdot, dbe fraud

Several owners of disadvantaged businesses questioned how some vendors qualified for disadvantaged status. In 2015, Atlanta-based HD Supply Waterworks paid the federal government $4.9 million to resolve allegations it took advantage of the DBE program to win subcontracts. The photo shows an HD project at Alabama State University in 2013. Credit: hdwaterworks.com

At a public hearing in Atlanta, no majority owned company attended. The report observed that, “[t]his lack of attendance did not go unnoticed.”

A speaker identified as PH-ATL-4 contended that the absence of majority-owned firms showed their general disdain for GDOT’s federally mandated diversity program:

  • “[I]f the program was one where there was a serious commitment to it, I think the persons who you’ve charged to be part of the program, being a prime contractor, should be here to more or less express their opinion as to how they feel about the program, because it’s obvious.”

The issue of white women serving as fronts for companies to win designation as a disadvantaged business persists, several speakers contended at the public hearing in Atlanta.

A speaker identified as PH-ATL-8 observed:

“I don’t see White woman in the room … they’re not there. So I’m trying to understand how a Caucasian woman can get certified as a disadvantaged business, but you never see that person. Who is it?”

David Pendered, Managing Editor, is an Atlanta journalist with more than 30 years experience reporting on the region’s urban affairs, from Atlanta City Hall to the state Capitol. Since 2008, he has written for print and digital publications, and advised on media and governmental affairs. Previously, he spent more than 26 years with The Atlanta Journal-Constitution and won awards for his coverage of schools and urban development. David graduated from North Carolina State University and was a Western Knight Center Fellow. David was born in Pennsylvania, grew up in North Carolina and is married to a fifth-generation Atlantan.

There are no comments

What are your thoughts?