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MnDOT’s Proposed DBE Goals Are Too Low. Time to Think Creatively on ALANA Business Utilization

Chai

The University of Minnesota has produced proposed Disadvantaged Business Enterprise ( DBE) Goals for FHWA and FTA funded projects by Minnesota Department of Transportation.  The current status of the utilization of ALANA (African Latino Asian and Native American) businesses in state transportation projects is quite low.

The report summarized its findings as follows:

utilization analysis shows that 99.7 percent of prime contract dollars were awarded to non-DBE prime contractors (equivalent to $2.34 billion dollars) while 0.3 percent of prime contract dollars were awarded to DBE prime contractors ($7.22 million dollars). Of the $618 million subcontracted by prime contractors, 32.0 percent went to DBE subcontractors and 68.0 percent to non-DBE subcontractors. In total, DBE prime contractors and subcontractors received 8.75 percent of total contract dollars awarded from 2011 to 2014.

 Of the contract dollars awarded to 8 DBE prime contractors, 100 percent were awarded to white females. Among DBE subcontracts, 87.2 percent were awarded to white females, 4.8 percent to Asian Pacific Americans, 3.4 percent to Blacks, 3.0 percent to Hispanics, 1.4 percent to Native Americans and 0.1 percent to Asian Indians.

The author of the study, Dr. Samuel Myers, Jr. has a lot of credibility because his estimates are based on methodology that have withstood legal challenges and have been adopted in other states.

There are major demographic changes in Minnesota not accounted for in the Census and the Economic Census because of under-reporting of minority data.  Recent and more accurate reports show there is a large and thriving immigrant and minority business community ready, willing and qualified to compete for projects funded by MnDOT. It is in Minnesota’s interest to build the local capacity of these DBEs so that they can grow and build capacity for the future needs of the state.

MnDOT has created new and creative models for engaging these emerging minority firms. These include successful mentor-protégé programs that forge relationships to build emerging firms’ capacity to compete. The proposed goals of 11.7 percent and 6.57 for 2016-19 are barely higher than the ones proposed three years ago.

With new and creative models developed since the last goals were announced, we believe that these new goals are actually too low. The fact that it may be difficult to achieve these new goals is not a compelling reason to reject them. In fact, with vigorous enforcement of the goals and with continued development and growth of minority firms, we anticipate that higher goals will help attract more qualified minority firms to the marketplace.

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