AvailabilityandDisparityStudy

CaliforniaDepartmentofTransportation
FINALREPORT
AUGUST31,2012

FinalReport
August31,2012
AvailabilityandDisparityStudy
Preparedfor
CaliforniaDepartmentofTransportation
OfficeofBusiness&EconomicOpportunity
182314
th
Street,MS79
Sacramento,CA95811
Preparedby
BBCResearch&Consulting
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Denver,Colorado802029750
303.321.2547 fax303.399.0448
www.bbcresearch.com
bbc@bbcresearch.com

TableofContents
CHAPTERES. ExecutiveSummary
HistoryofCaltransImplementationoftheFederalDBEProgram......................................... ES2
Analysesinthe2012DisparityStudy......................................................................................ES3
OverallAnnualDBEGoal.........................................................................................................ES4
WhetherorNottheAnnualGoalCanbeAchievedThroughNeutralMeans ......................... ES6
DisparityResultsforIndividualDBEGroups..........................................................................ES10
MeasurestoImplementtheProgram................................................................................... ES12
NextSteps..............................................................................................................................ES15
CHAPTER1. Introduction
A.Background...........................................................................................................................12
B.StudyScope...........................................................................................................................14
C.StudyTeam............................................................................................................................17
CHAPTER2. CollectionandAnalysisofContractData
A.OverviewofCaltransTransportationContracts....................................................................21
B.CollectionandAnalysisofCaltransContractData................................................................22
C.CollectionofInformationonUtilizedFirms..........................................................................24
D.TypesofWorkInvolvedinCaltransContracts......................................................................25
E.LocationofBusinessesPerformingCaltransWork................................................................26
CHAPTER3. MarketplaceConditions
A.EntryandAdvancement........................................................................................................32
B.BusinessOwnership..............................................................................................................36
C.AccesstoCapital....................................................................................................................39
D.SuccessofBusinesses..........................................................................................................318
CHAPTER4. AvailabilityAnalysis
A.PurposeoftheAvailabilityAnalysis......................................................................................41
B.DefinitionsofMBE,WBEs,DBEs,PotentialDBEs,andMajorityownedBusinesses.............42
C.InformationCollectedaboutPotentiallyAvailableBusinesses.............................................45
D.BusinessesIncludedintheAvailabilityDatabase.................................................................47
E.CalculatingMBE/WBEAvailabilityonaContractbyContractBasis.....................................48
F.AvailabilityResults...............................................................................................................412
G.CaltransBaseFigureforitsOverallDBEGoal....................................................................413
H.ImplicationsforAnyDBEContractGoals............................................................................414
BBCRESEARCH&CONSULTINGFINALREPORT i

TableofContents
CHAPTER5. UtilizationAnalysis
A.OverviewoftheUtilizationAnalysis.....................................................................................51
B.OverallMBE/WBEUtilizationonCaltransandLocalAssistanceTransportation
Contracts............................................................................................................................53
C.MBE/WBEUtilizationonCaltransandLocalAssistanceTransportationContracts
withandwithoutRace andGenderconsciousGoals........................................................54
D.ChangesinMBE/WBEandDBEUtilizationonCaltransandLocalAssistance
ContractsDuringtheStudyPeriod.....................................................................................57
CHAPTER6. DisparityAnalysis
A.OverviewofDisparityAnalysisMethodology.......................................................................61
B.OverallDisparityAnalysisResultsforCaltransTransportationContracts............................66
C.DisparityAnalysisResultsforContractsIncludedintheRaceConsciousGoals
ProgramandContractsNotIncludedintheGoalsProgram..............................................68
D.ContractsAwardedDuring2007and2008andContractsAwardedDuring
2009and2010..................................................................................................................610
E.StatisticalSignificanceofDisparityAnalysisResults............................................................611
CHAPTER7. FurtherExplorationofAnyDisparities
A.Aredisparitiesfoundinsomeregionsofthestateandnotinothers?.................................71
B.AretheredisparitiesforCaltransandLocalAssistanceconstructioncontracts?.................72
C.AretheredisparitiesforCaltransandLocalAssistanceconstructioncontracts?.................72
D.AretheredisparitiesforCaltransandLocalAssistanceengineeringrelatedcontracts?.....79
E.IsthereanyevidenceofoverconcentrationofDBEsincertaintypesofwork?..............717
CHAPTER8. CaltransOverallAnnualAspirationalDBEGoal
A.EstablishingaBaseFigure .....................................................................................................81
B.ConsiderationofaStep2Adjustment ..................................................................................82
CHAPTER9. PortionofDBEGoaltobeMetthroughNeutralMeans
A.Isthereevidenceofdiscriminationwithinthelocaltransportationcontracting
marketplaceforanyracial,ethnicorgendergroups?.......................................................93
B.WhathasbeentheagencyspastexperienceinmeetingitsoverallDBEgoal?...................93
C.WhathasDBEparticipationbeenwhenCaltranshasnotappliedcontractgoals
(orotherraceconsciousremedies)?..................................................................................94
D.Whatistheextentandeffectivenessofrace andgenderneutralmeasuresthat
theagencycouldhaveinplaceforthenextfiscalyear?....................................................95
BBCRESEARCH&CONSULTINGFINALREPORT ii

TableofContents
CHAPTER10.CaltransImplementationoftheFederalDBEProgram
A.FederalRequirementsofImplementingtheFederalDBEProgram....................................101
B.MonitoringChangestotheFederalDBEProgram............................................................1011
C.CaltransStatefundedContracts......................................................................................1011
Appendices
A. DefinitionsofTerms..........................................................................................................A1
B. LegalEnvironmentforCaltransDBEProgram...................................................................B1
C. CollectionofAvailabilityInformation.................................................................................C1
D. GeneralApproachtoUtilizationAnalysis..........................................................................D1
E. EntryandAdvancementintheCaliforniaConstructionandEngineeringIndustries.........E1
F. BusinessOwnershipintheCaliforniaConstructionandEngineeringIndustries............... F1
G. AccesstoCapitalforBusinessFormationandSuccess.....................................................G1
H. Success of Businesses in the California Construction and Engineering Industries............ H1
I. DescriptionofDataSourcesforMarketplaceAnalyses......................................................I1
J. SummaryofAnecdotalInterviews.....................................................................................J1
K. DetailedDisparityResults...................................................................................................K1
L. Additional Anecdotal Information...................................................................................... L1
BBCRESEARCH&CONSULTINGFINALREPORT iii

CHAPTERES.
ExecutiveSummary
ThefederalgovernmentrequiresstateandlocalgovernmentstoimplementtheFederal
DisadvantagedBusinessEnterprise(DBE)ProgramiftheyreceiveU.S.Departmentof
Transportation(USDOT)fundsfortransportationprojects,includingFederalHighway
Administration(FHWA)funds.TheCaliforniaDepartmentofTransportation(Caltrans)receives
USDOTfundsthroughFHWAandotherUSDOTagenciesandthereforemustimplementthe
FederalDBEProgram.CaltransimplementationofthefederallyrequiredDBEProgramis
guidedbyregulationsin49CodeofFederalRegulations(CFR)Part26,USDOTguidanceand
courtdecisions.
ThisAvailabilityandDisparityStudyisintendedtoassistCaltransinitsimplementationofthe
FederalDBEProgrambyexaminingtheavailabilityandutilizationofminorityandwomen
ownedbusinessenterprises(MBEsandWBEs)inCaliforniastransportationcontracting
industry.ThestudyexaminedwhethertherearedisparitiesbetweenutilizationofMBE/WBEs
andwhatmightbeexpectedbasedontheiravailabilityfortransportationcontracts.Utilization
andavailabilityresultsreportedforMBE/WBEscombine(a)firmscertifiedasDBEs,(b)
businessespotentiallycertifiedasDBEsand(c)minorityandwomenownedfirmsthathave
graduatedfromtheDBEprogramorareotherwisetoolargetobecertifiedasDBEs.
1
CaltransimplementationoftheFederalDBEProgramincludesthefollowing:
CaltransmustsetanoverallannualgoalforDBEparticipationinCaltransFHWAfunded
contractsandexaminewhetherornottheoverallDBEgoalcanbeattainedsolelythrough
neutralmeasuresorwhetherraceorgenderbasedmeasuresareneeded.(Caltransmust
projecttheportiontobemetthroughneutralmeans.)
Ifitchoosestoimplementraceandgenderconsciousmeasures,suchasDBEcontract
goals,CaltransmustdeterminetheshareoftheoverallannualDBEgoalthatwillbemet
throughrace andgenderbasedmeasuresandthespecificrace,ethnicandgendergroups
thatwillbeeligiblefortheseelements.CaltransproposedimplementationoftheFederal
DBEProgrammustthenbereviewedandapprovedbyUSDOT.
1
Inthisstudy,certifiedDBEsmeansthosefirmscertifiedasdisadvantagedbusinessenterprisespursuanttofederal
regulations.
ThetermpotentialDBEsreferstocertifiedDBEsplusthoseMBE/WBEsthatappearthattheycouldbeDBEcertifiedbased
onrevenuerequirementsdescribedin49CFRPart26(regardlessofactualcertification).Thestudyteamdidnotcountas
potentialDBEsthosebusinessesthathavebeendecertifiedorappearthattheywillsoongraduatefromtheDBEProgram.
MBE/WBEsincludeallminority andwomenownedfirmsregardlessofwhethertheyareeligibletobe,oractuallyare,
certifiedasDBEs.SomeMBE/WBEsintheCaliforniatransportationcontractingindustryexceedthesizestandardsforDBE
certification.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE1

In2011,CaltransretainedBBCResearch&Consulting(BBC)toconductadisparitystudythat
wouldprovideinformationtohelpitimplementtheFederalDBEProgramforitsFHWAfunded
contracts.Disparitystudiesexaminetheutilizationandavailabilityofminority andwomen
ownedbusinessenterprises(MBEsandWBEs)inanagencyscontractingtodeterminewhether
therearedisparitiesbetweenactualutilizationandwhatmightbeexpectedfromtheavailability
ofMBEs,WBEsandotherfirmsforagencywork.Disparitystudiesalsoexaminequantitativeand
qualitativeinformationrelatedtolocalmarketplaceconditions.
ThisExecutiveSummaryreviews:
ThehistoryofCaltransimplementationoftheFederalDBEProgram;
Analysesprovidedinthe2012DisparityStudy;
AnanalysisassistingCaltransregardinganoverallannualDBEgoalforCaltransFHWA
fundedcontracts;
Informationconcerningwhetherornottheannualgoalcanbeachievedthroughneutral
means;
DisparityresultsforindividualDBEgroups;
Measurestoimplementtheprogram;and
Nextsteps.
HistoryofCaltransImplementationoftheFederalDBEProgram
CaltranshasbeenimplementingvariationsoftheFederalDBEProgramandtheregulationsthat
precededitsincethe1980s.
2
AfterenactmentoftheTransportationEquityActforthe21
st
Century(TEA21)in1998,theU.S.DepartmentofTransportationestablishedanewFederalDBE
ProgramtobeimplementedbystateandlocalagenciesreceivingUSDOTfunds.
WesternStatesPavingdecisionin2005.Apublicagencyimplementingraceconscious
measuresissubjecttothestrictscrutinyanalysisasappliedbythecourts.In2005,theNinth
CircuitCourtofAppealsinWesternStatesPavingv.WashingtonStateDOTheldthattheFederal
DBEProgramenactedbyCongresswasfaciallyconstitutional,butruledthatWashingtonState
DOTsimplementationoftheProgramwasunconstitutional.Thecourtheldthatinorderto
satisfyrequirementsofstrictscrutiny,apublicentityimplementingraceconsciousmeasures
musthaveevidenceofdiscriminationinitstransportationcontractingindustry.
InresponsetotheWesternStatesPavingdecision,stateandlocalagenciesaffectedbythe
decision,includingCaltrans,discontinueduseofraceandgenderconsciouselementsofthe
FederalDBEProgram.TheUSDOTrecommendedthatagenciesimplementingtheFederalDBE
Programshouldconsiderconductingdisparitystudies.
2
Caltransonceimplementedarace andgenderconsciousprogramforcertainstatefundedcontracts.Proposition209,passed
byCaliforniavotersin1996,precludestheStatefromimplementingraceandgenderconsciousprogramsrelatedtonon
federallyfundedcontracts.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE2

2007DisparityStudy.CaltransretainedBBCtoconductitsfirstdisparitystudy,whichBBC
completedin2007.Atthetimeofthe2007DisparityStudy,Caltranswasimplementingthe
FederalDBEProgramonasolelyraceandgenderneutralbasis.
2009Implementationofrace andgenderconsciouscontractgoals.InApril2009,
CaltransresumedsettingraceandgenderconsciousgoalsoncertainFHWAfundedcontracts.
3
FirmscertifiedasDBEsthatwereownedbywomen,AfricanAmericans,AsianPacificAmericans
orNativeAmericanswereeligibletomeetcontractgoals.DBEsownedbySubcontinentAsian
AmericanmenandHispanicAmericanmencouldparticipateinotherpartsoftheprogrambut
werenoteligibletomeetraceandgenderconsciouscontractgoals.Caltransimplementationof
theprogramwasbasedinpartoninformationinthe2007DisparityStudy.
Legalchallengeand2011courtreviewofCaltransimplementationoftheFederal
DBEProgram.AfterCaltransmadethesechangestoitsimplementationoftheFederalDBE
Program,AssociatedGeneralContractorsofAmerica,SanDiegoChapterchallengedCaltrans
implementationoftheFederalDBEPrograminfederaldistrictcourt.
TheUnitedStatesDistrictCourtfortheEasternDistrictofCaliforniainAGC,SanDiegoChapter,
Inc.v.CaliforniaDOT,etal.heldinApril2011thatCaltransimplementationoftheFederalDBE
Programwasconstitutional.
4
TheDistrictCourtheldthattheCaltransDBEProgramisbasedon
substantialstatisticalandanecdotalevidenceofdiscriminationintheCaliforniacontracting
industry,satisfiedthestrictscrutinystandard,andisclearlyconstitutionalandnarrowly
tailoredunderWesternStatesPavingandtheSupremeCourtcases.
5
AGCSanDiegoappealed
thedecisionanditiscurrentlypendingbeforetheNinthCircuit.
Analysesinthe2012DisparityStudy
Belowisabriefdescriptionoftheanalysesperformedbythestudyteamforthe2012Disparity
Study.
BBCexaminedthetransportationcontractingindustryinCaliforniaandrelatedcontracts
awardedbyCaltransorwithfundsadministeredbyCaltrans.BBCexamineddataformore
than15,000constructionandengineeringrelatedcontractsandsubcontractsfrom2007
through2010.BBCcollectedandanalyzedinformationforFHWAandstatefunded
contractsthatCaltransawardedandthatlocalagenciesawardedthroughtheLocal
AssistanceProgram.
Toanalyzerelativeavailabilityofminorityandwomenownedfirms(MBE/WBEs)forthis
work,morethan15,000Californiabusinessestablishmentsweresuccessfullycontactedby
thestudyteam.
3
LocalagenciesthatawardedFHWAfundedcontractsthroughtheLocalAssistanceProgramalsoimplementtheFederalDBE
Program,andtheyresumedsettingraceandgenderconsciousgoalsforcontractsawardedinJune2009.
4
AssociatedGeneralContractorsofAmerica,SanDiegoChapter,Inc.v.CaliforniaDOT,U.S.D.C.E.D.Cal.,CivilActionNo.2:09cv
01622,SlipOpinion(E.D.CalApril20,2011)appealpending,AppealNo.1116228,UnitedStatesCourtofAppealsfortheNinth
Circuit.
5
Id.,SlipOpinionTranscriptat4256.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE3

BBCexaminedquantitativeinformationconcerninglocalmarketplaceconditionsusingdata
fromfederalagencies,informationcollectedaspartofthe2012availabilityinterviewswith
localbusinesses,andothersources.
Thestudyalsoincludedqualitativeinformationfrommorethan200individualswho
participatedinindepthinterviews,providedoralorwrittentestimonyaspartofpublic
hearings,orattendedstakeholdermeetingsaspartofthisstudyorotherrecentdisparity
studiesinCalifornia.Theseindividualsincludebusinessownersandmanagers,
representativesandtradeassociationsandotherpeopleknowledgeableaboutthe
transportationcontractingindustryinCalifornia.Thisinformationwascollectedfrom
individualsthroughoutthestate.
OverallAnnualDBEGoal
CaltransmustprepareandsubmitanoverallannualDBEgoalforthenextthreefiscalyears,
supportedbyinformationaboutthestepsusedtodeveloptheoverallgoal.Whendevelopingan
overallannualgoalforDBEparticipationinfederallyfundedcontracts,federalregulations
requirethatCaltransfirstestablishabasefigureandthenconsiderstep2adjustments.
AnalysisofMBE/WBEavailability.Aboutonethirdoffirmsidentifiedasavailableasprime
contractorsandsubcontractorsonCaltransconstructionandengineeringrelatedtransportation
contractswereownedbyminoritiesorwomen,similartotheresultinthe2007DisparityStudy.
Intheavailabilityanalysis,BBCexaminedtype,contractrole,locationandsizeofworkinvolved
ineachFHWAfundedprimecontractandsubcontract,anddeterminedtherelativeavailability
ofminority,womenandmajorityownedfirmstoperformthatspecificwork.BBCdollar
weightedresultsforeachprimecontractandsubcontracttodetermineoverallavailability.
Basefigure.Establishingabasefigureisthefirststepincalculatinganoverallannualgoalfor
DBEparticipationinCaltransFHWAfundedtransportationcontracts.BBCcalculatedthebase
figureusingthesameavailabilitydatabaseandapproachdescribedabove,focusingonpotential
DBEs(includingcurrentlycertifiedDBEs).BBCsapproachtocalculatingCaltransbasefigureis
consistentwithrelevantcourtdecisions,federalregulationsandUSDOTguidance.
BBCsanalysisindicatesthattheavailabilityofpotentialDBEsforCaltransFHWAfunded
transportationcontractsis12.5percent.Caltransmightconsider12.5percentasthebasefigure
foritsoverallannualgoalforDBEparticipation.
6
6
CaltransshouldalsoconsiderwhetherthetypesofFHWAfundedcontractsexaminedinthestudyarerepresentativeofthe
typesofFHWAfundedcontractsthattheagencywillawardedfortheperiodcoveredbytheoverallannualDBEgoal.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE4

MarketplaceconditionsandadjustmentstotheoverallDBEgoal.TheFederalDBE
Programrequiresthatagenciesconsiderstep2adjustmentstothebasefigureaspartof
determininganoverallannualDBEgoal.Caltransisnotrequiredtomakeanystep2adjustments
aslongasitconsidersappropriatefactorsandexplainsitsdecisioninitsGoalandMethodology
document.Factorsthatagenciesshouldassessindeterminingwhethertomakeanystep2
adjustmentstoabasefigureinclude:
CurrentcapacityofDBEstoperformwork,asmeasuredbythevolumeofworkDBEshave
performedinrecentyears;
Informationrelatedtoemployment,selfemployment,education,training,andunions;
AnydisparitiesintheabilityofDBEstogetfinancing,bonding,andinsurance;and
Otherrelevantdata.
7
BBCanalyzedeachoftheabovestep2factorsandwasabletoquantifytheeffectofcertain
factorsonthebasefigure.
Approach1makeadownwardadjustment.CaltransmightconsideranoverallannualDBE
goalthatisadjustedtoreflectrecentDBEparticipationinFHWAfundedcontracts.
CaltransutilizationreportsforFY2007throughFY2011indicatedmedianannualDBE
participationof6.6percentforthoseyears,whichislowerthanthe12.5percentbase
figure.
USDOTguidancesuggeststhatanagencycanmakeastep2adjustmentbyaveragingthe
basefigurewithmedianpastDBEparticipation.
Approach2makeanupwardadjustment.ThereareseveralreasonswhyCaltransmight
considerahigheroverallannualDBEgoalthanthe12.5percentbasefigure:
Caltransmightconsideradjustingitsbasefigureupwardtoaccountforbarriersthat
minoritiesandwomenfaceinowningbusinessesintheCaliforniatransportation
contractingindustry.Suchanadjustmentwouldcorrespondtoadeterminationofthelevel
ofDBEparticipationyouwouldexpectabsenttheeffectsofdiscriminationthatCaltrans
mightmake.
8
Anupwardadjustmentisalsosupportedbytheevidenceofbarriersthataffectminorities,
women,andMBE/WBEsinobtainingfinancing,bonding,andinsuranceandtoaccountfor
evidencethatcertaingroupsofMBE/WBEsarelesssuccessfulthancomparablemajority
ownedbusinesses.Thecumulativeimpactofthesefactorsonthecurrentavailabilityof
minorityandwomenownedfirmscannotbequantified,butcouldbeimportantwhen
consideringwhetherornottomakeanupwardstep2adjustment.
7
49CFRSection26.45.
8
49CFRSection26.45(b).
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE5

Approach3makingnostep2adjustment.Caltransisnotrequiredtomakeanyadjustmentsas
longasitcanexplainwhatfactorsitconsideredandcanexplainitsdecisioninitsGoaland
Methodologydocument.
WhetherorNottheAnnualGoalCanbeAchievedThroughNeutralMeans
TheFederalDBEProgramrequiresCaltranstoassessthepercentageofitsoverallannualDBE
goalthatcanbeachievedthroughneutralmeans,andifnecessary,thepercentagetobeachieved
throughrace andgenderconsciousmeasures.USDOToffersguidanceconcerninghow
transportationagenciesshouldprojecttheportionsoftheiroverallannualDBEgoalsthatwillbe
metthroughraceandgenderneutralandraceandgenderconsciousmeasures.This
informationsuggestedexaminingthefourgeneralquestionsbelow:
1. Isthereevidenceofdiscriminationwithinthelocaltransportationcontractingmarketplace
foranyracial,ethnicorgendergroups?
2. WhathasbeentheagencyspastexperienceinmeetingitsoverallDBEgoal?
3. WhathasDBEparticipationbeenwhentheagencydidnotuseraceorgenderconscious
measures?
4. Whatistheextentandeffectivenessofraceandgenderneutralmeasuresthattheagency
couldhaveinplaceforthenextfiscalyear?
1.Isthereevidenceofdiscriminationwithinthelocaltransportationcontracting
marketplaceforanyracial,ethnicorgendergroups?Asdiscussedingreaterdetailin
Chapter3,BBCexaminedconditionsintheCaliforniamarketplace,including:
Entryandadvancement;
Businessownership;
Accesstocapital,bondingandinsurance;and
Successofbusinesses.
Therewasquantitativeevidenceofdisparitiesforminorityandwomenownedfirmsasawhole,
andforspecificgroups,concerningtheaboveissues.Qualitativeinformationindicatedsome
evidenceofdiscriminationaffectingthelocalmarketplace,althoughsomeminorityandfemale
businessownersinterviewedinthisandotherrecentdisparitystudiesdidnotthinktheyhad
beenaffectedbyanyraceorgenderdiscrimination.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE6

2.WhathasbeenCaltranspastexperienceinmeetingitsoverallDBEgoal?Caltrans
reportedcertifiedDBEparticipationinrecentyearsissummarizedinFigureES1.Caltranshas
notmetitsDBEgoalinrecentyearsbasedonthesereportsconcerningcommitmentsand
awards.
FigureES1.
CaltransreportedpastcertifiedDBEparticipationonFHWAfundedcontracts,
fiscalyears20072011
Federalfiscalyear DBEattainment AnnualDBEgoal Difference
2007 6.6 % 10.5 % 3.9 %
2008 4.1 13.5 9.4
2009 3.4 13.5 10.1
2010 7.4 13.5 6.1
2011 7.2 13.5 6.3
Source: Commitments/AwardsreportedonCaltransUniformReportsofDBEAwards/CommitmentsandPayments.
3.WhathasDBEparticipationbeenwhenCaltranshasnotappliedcontractgoals?
BBCanalyzedabroadrangeofinformationtoexaminecertifiedDBEparticipationwhenCaltrans
hasnotappliedcontractgoals.
CaltransreportedDBEparticipationinyearsinwhichnorace orgenderconsciousprogram
applied.CaltransreportedcertifiedDBEparticipationfortwoentirefiscalyearswhenitdidnot
applyraceorgenderconsciousprogramelementsFFY2007andFFY2008andonefiscal
yearwhenitimplementedraceandgenderconsciouselementsforaportionoftheyearFFY
2009.FigureES1showsarangeofcertifiedDBEparticipationfrom3.4percentto6.6percent
forthoseyears.
BBCcalculationofDBEparticipationfornongoalscontractsfor20072010.BBCcalculated3.9
percentutilizationofcertifiedDBEsfrom2007through2010forCaltransandLocalAssistance
contractsforwhichnoraceandgenderconsciousprogramapplied.
9
9
AsexplainedinChapter5,thesenongoalscontractsincludedstatefundedcontractsandthoseFHWAfundedcontracts
outsidethetimeperiodwhenCaltransandlocalagenciesappliedraceandgenderconsciousgoals.Goalscontractsarethose
FHWAfundedcontractsduringthetimeperiodwhenCaltransandlocalagenciesappliedDBEcontractgoals(Caltransand
localagenciessetDBEcontractgoalsformanybutnotallgoalsperiodcontracts.)
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE7

BBCalsomeasuredcertifiedDBEparticipationforFHWAfundedcontractswhenraceand
genderconsciouscontractgoalsprogramapplied(inpartsof2009andallof2010).As
presentedinFigureES2,certifiedDBEparticipationwiththeraceandgenderconscious
programinplacewas4.8percentduringthistimeperiod.FigureES2alsoshowsthatoverall
utilizationofminorityandwomenownedfirmswashigherwhengoalsdidnotapplythanon
goalscontracts(13.2%versus11.5%).
FigureES2.
MBE/WBEandcertifiedDBE
utilizationonCaltransand
LocalAssistancegoalsandnon
goalstransportationcontracts,
20072010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis
4,864forFHWAfundedcontractsinthegoals
period,10,582forstatefundedcontractsand
FHWAfundedcontractsinthenongoals
period.
SeeFiguresK5andK8andinAppendixKfor
detailedresults.
Source:
BBCResearch&Consultingfromdataon
Caltransandlocalagencycontracts.
Resultsofdisparityanalyses.TherewasasubstantialdisparitybetweenoverallMBE/WBE
utilizationonnongoalscontractsfrom2007through2010andwhatmightbeexpectedfromthe
availabilityanalysis.
10
AnalysisofgoalscontractsindicatedsubstantialdisparitiesforMBE/WBEsoverall(seeChapter
6fordetailedresults).
ParticipationofpotentialDBEsinCaltranscontracts.BBCexaminedutilizationofpotentialDBE
firms(firmsthatarecurrentlycertifiedorappeartomeettherevenuerequirementsforDBE
certification)onFHWAfundedcontracts.PotentialDBEsobtained7.9percentofthecontract
dollarsawardedonFHWAfundedcontractsthatwereissuedunderCaltransraceneutral
implementationoftheFederalDBEprogram.
Caltransmightconsiderthis7.9percentlevelofattainmentasaminimumlevelofitsoverall
annualDBEgoalthatcanbereachedthroughneutralmeansifCaltranswerehighlysuccessfulin
encouragingfirmstoapplyforDBEcertification.
10
MBE/WBEsreceived13.2percentofCaltranscontractdollarsfornongoalscontracts,substantiallybelowthe17.9percent
thatmightbeexpectedbasedontheavailabilityanalysisforthosecontracts.Thedisparityindex,whichdividesutilizationby
availabilityandmultipliestheresultsby100,was74.Basedoncertaincourtdecisions,anydisparityindexlessthan80
indicatesasubstantialdisparityinthisdisparitystudy.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE8

4.Whatistheextentandeffectivenessofrace andgenderneutralmeasuresthat
Caltranscouldhaveinplaceforthenextfiscalyear?Caltranswillneedtoreviewthe
raceandgenderneutralmeasuresthatitandotherorganizationsalreadyhaveinplace,and
thoseCaltranshasplannedorcouldbeconsideredforfutureimplementation,whendetermining
theextenttowhichCaltranscouldmeetitsoverallannualDBEgoalthroughtheuseofsuch
measures.
TheFinalRuleeffectiveFebruary28,2011addedarequirementfortransportationagenciesto
fostersmallbusinessparticipationintheircontracting.WhenimplementingtheFederalDBE
Program,Caltransmustincludeanelementtostructurecontractingrequirementstofacilitate
competitionbysmallbusinessconcerns,takingallreasonablestepstoeliminateobstaclesto
theirparticipation,includingunnecessaryandunjustifiedbundlingofcontractrequirementsthat
mayprecludesmallbusinessparticipationinprocurementsasprimecontractorsor
subcontractors.
11
ThedisparitystudyreviewedmanyofCaltranscurrentandplannedmeasuresaswellasthose
forotherorganizationsinCalifornia.TheneutralmeasuresCaltranscurrentlyhasinplaceare
extensive,asarethetechnicalassistance,outreachandothertypesofneutralprogramsoperated
byotherorganizations.Caltransplansoncontinuingtheuseofthosemeasuresinthefutureas
wellasimplementingadditionalprograms(seeChapter9ofthereport).Therewerealsoa
numberofrecommendationsforexpansionorimprovementstotheseprogramsmadeby
businessownersandmanagerswhoparticipatedinindepthinterviews,stakeholdermeetings
andpublichearingsperformedduringthisstudyandotherrecentdisparitystudies(see
AppendicesJandLfordetailedresults).
Summary.ThehighestlevelofcertifiedDBEparticipationidentifiedforCaltranscontracts
solelyapplyingraceandgenderneutralmeasureswas6.6percent,thelevelofparticipation
Caltransreportedforfederalfiscalyear2007).
IncludingfirmsthatappeartobepotentiallyDBEcertified,participationwas7.9percentonnon
goalscontracts.EvenifthesefirmshadbeenDBEcertified,Caltranswouldnothavemetits
overallgoalforDBEparticipation.
BBCalsoidentifiedsubstantialdisparitiesintheoverallutilizationofMBE/WBEsinitscontracts
for2007through2010,withorwithoutincludingraceandgenderconsciouscontractgoalsin
theprogram.Thereweresubstantialneutralmeasuresinoperationduringthistimeperiod.
Caltransshouldreviewthesesummaryresults,aswellasthecompletedisparitystudyreport,
whenprojectingwhetherornotitcanachieveitsoverallannualDBEgoalsolelythroughneutral
means,andifnot,itsprojectionsoftheportionitcanmeetthroughneutralmeansandthe
portiontobemetthroughraceandgenderconsciousmeans.
11
49CFR26.39(a).
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE9

DisparityResultsforIndividualDBEGroups
IfCaltransdeterminesthatitneedstocontinuetheuseofraceorgenderconsciousmeasures,
thenitshouldalsoevaluatewhichDBEgroupsshouldbeconsideredeligibletoparticipateinany
goalsthatmayapplytoFHWAfundedcontracts(orotherUSDOTfundedcontracts).IfCaltrans
determinestoincludespecificDBEgroups(e.g.,groupsclassifiedasunderutilizedDBEs)butnot
othergroupsinacontractgoalsprogram,itmustsubmitawaiverrequesttoFHWA.
ResultsofthedisparityanalysesforCaltranscontractsmayberelevanttoCaltrans
determinationofDBEgroupsthatcouldbeeligibleforraceorgenderconsciousmeasures.BBC
examinedwhetherthereweredisparitiesbetweentheutilizationandavailabilityofindividual
racial,ethnicandgendergroups,andpresentsresultsinChapters6and7aswellasAppendixK
ofthereport.Twokeyresultsaresummarizedhere.
CaltransandLocalAssistancecontractsfrom20072010.WhenexaminingallCaltransandLocal
Assistancecontractsfrom2007through2010,thereweresubstantialdisparitiesinthe
utilizationoffirmsownedbythefollowinggroups:
AfricanAmericans;
AsianPacificAmericans;
HispanicAmericans;and
NativeAmericans.
UtilizationofwhitewomenownedfirmsandSubcontinentAsianAmericanownedfirmswas
alsolessthanwhatmightbeexpectedfromtheavailabilityanalysis,butthedisparitiesdidnot
reachthelevelofsubstantial.
12
CaltransandLocalAssistancecontractsfrom20092010.Informationgatheredfromthe
qualitativeresearch(summarizedinChapter3)suggestedthattherecenteconomicdownturn
hadasubstantialimpactonthetransportationcontractingindustry,andthatmarketconditions
substantiallyworsenedbetweenthebeginningofthestudyperiodandtheendof2010.The
qualitativeevidenceindicatedthattheseconditionsmayhavehadanegativeimpactonsmall
businesses,particularlyminorityandwomenownedfirms.
Utilizationresultsfor20072008andfor20092010areconsistentwithdeterioratingconditions
forMBE/WBEs.FigureES3comparesMBE/WBEandDBEutilizationonCaltransandlocal
agencycontractsawardedinthe20072008periodversusthe20092010period.Overall
MBE/WBEutilizationdroppedfrom13.2percentin20072008to11.8percentin20092010.
ThisdeteriorationoccurredwhileCaltransandlocalagenciesusedraceandgenderconscious
measuresonitsFHWAfundedcontractsafterearlytomid2009(UDBEcontractgoals).
AlthoughtheUDBEcontractgoalsappearedtoincreasetheutilizationofcertifiedDBEsduring
the20092010period,overallmarketplaceconditionsresultedinanoveralldecreaseinthe
utilizationofminorityandwomenownedfirms.
12
Disparityindiceswere93forwhitewomenownedfirmsand84forSubcontinentAsianAmericanownedfirmsforall
contractsfrom20072010.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE10

FigureES3.
MBE/WBEandcertified
DBEshareof
prime/subcontractdollars
forCaltransandLocal
Assistancetransportation
contracts,20072008vs.
20092010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontracts
analyzedis7,785forthe20072008
period,7,661forthe20092010
periods.
SeeFiguresK17andK18inAppendixK
fordetailedresults.
Source:
BBCResearch&Consultingfromdata
onCaltransandlocalagencycontracts.
Therefore,thestudyteamcompareddisparityresultsforcontractsawardedduring2007and
2008withcontractsawardedduring2009and2010,whichareprovidedinFigureES4.It
appearsthatoveralldisparitiesforMBE/WBEsweremoreseverein20092010thaninthefirst
halfofthestudyperiod.TherewerenoMBE/WBEgroupsforwhichutilizationmatched
availabilityduring20092010.
Disparitiesfor20092010contractsweresubstantialforfirmsownedby:
Whitewomen;
AfricanAmericans;
AsianPacificAmericans;
HispanicAmericans;
NativeAmericans.
ThedisparityforSubcontinentAsianAmericanownedfirmsin20092010wasnotatthelevelto
beidentifiedassubstantial.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE11

FigureES4.
Disparityindiceson
CaltransandLocal
AssistanceFHWA
andstatefunded
transportation
contractsawarded
during20072008
and20092010
forallMBE/WBEs
considered
togetherand
separatelybygroup
Note:
SeeFiguresK5andK8for
correspondingdisparityresults
tables.
Source:
BBCResearch&Consulting
utilizationanalysis.
Otherinformation.Informationconcerningthelocalmarketplace,includingresultsbygroup,is
alsoexaminedinthisdisparitystudy.Caltransshouldreviewthefulldisparitystudyreport,as
wellotherinformationitmayhave,indeterminingwhetheritproposestoincludeanyraceor
genderconsciousmeasures,andifso,indeterminingtheracial,ethnicandgendergroupsthat
maybeincluded.
MeasurestoImplementtheProgram
Chapter10ofthereportreviewsUSDOTrequirementsforimplementationoftheFederalDBE
ProgramandpointsoutareasforfurtherCaltransimprovements.Threesuchareasare
highlightedinthisExecutiveSummary.
EncouragingfirmstobecomecertifiedasDBEs.Manyfirmsparticipatinginindepth
interviewsorpublichearingscommentedontheDBEcertificationprocess.
ItappearsthatmanyfirmsandlocalagenciesareconfusedaboutthemultipleSBE,MBEand
DBEprogramsoperatedbyagenciesinCalifornia.
ManyminorityandwomenownedfirmsreportedthattheywerenotDBEcertified
becausetheythoughttheprocesswouldbedifficultandthattherewouldbelittlebenefit
fromcertification.
AlthoughsomebusinessownersgavefavorablecommentsabouttheCaltranscertification
process,anumberoffirmownerswerehighlycriticalaboutthedifficultyandtime
requirementsforcertification.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE12

CaltransmightconsideradditionaleffortstoencourageeligiblefirmstoapplyforDBE
certification.AlthoughCaltransappearstofollowfederalregulationsconcerningDBE
certification,whichrequirescollectionandreviewofconsiderableinformationfromprogram
applicants,itmightresearchotherwaystomakethecertificationprocesseasierforpotential
DBEs.
Needforseparateaccountingforparticipationoffirmspotentiallycertifiedas
DBEs.BasedonguidanceintheFederalDBEProgram,BBCsanalysisoftheoverallannualDBE
goalinthisstudyisbasedonDBEsthatarecurrentlycertifiedandthatcouldpotentiallybe
certified.
OneofthereasonsthatCaltranshasnotmetitsoverallDBEgoalinpastyearsisthatits
measurementofDBEparticipationonlyincludesthosefirmsthatareDBEcertified,in
accordancewithFederalregulations.FirmsperformingCaltransworkthathavenotbeenDBE
certifiedare:
CountedinthesettingofanoverallannualDBEgoal;and
Notcounted(inaccordancewiththefederalregulations)intheparticipationreportsused
tomeasurewhethertheoverallannualDBEgoalhasbeenattained.
BasedoninstructionsfromUSDOTstaffatthe2011NationalCivilRightSymposiumheldat
USDOTofficesinWashington,D.C.onDecember8,2011,agenciessuchasCaltranscanexplore
whetheronereasontheyhavenotmettheiroverallDBEgoalisbecauseofparticipationoffirms
thatcouldpotentiallybeDBEcertifiedbutarenot.USDOTthenmightexpectanagencyto
exploremethodstofurtherencouragepotentialDBEstobecomeDBEcertifiedasonewayof
closingthegapbetweenreportedDBEparticipationanditsoverallannualDBEgoal.
ThegapbetweencurrentlycertifiedDBEsandfirmsthatarepotentiallycertifiedasDBEsis
documentedinthisreport(seeChapter9),asaresomeofthereasonsforthisgapaccordingto
businessownersandmanagersandothersintheindustry(seeAppendicesJandL).Caltrans
maywanttoconsiderdevelopingthetoolstocontinuetotrackparticipationoffirmsthatare
potentiallycertifiedasDBEs,asexplainedinChapter10.Itmightalsoexplorehowtoincrease
thenumberofminorityandwomenownedfirmsthatapplyforDBEcertification.
ExplorationofalternativeapproachestocurrentDBEcontractgoalsprogram.Some
individualsparticipatinginindepthinterviews,publichearingsandstakeholdermeetings
conductedinthestudysuggestedthatCaltransexplorenewwaysofimplementingtheFederal
DBEProgramthatbetterachievedtheobjectiveoffurtherdevelopingminorityandwomen
ownedbusinesses.
TheyreportedthattheDBEcontractgoalsencourageextensiveeffortsonthepartofprime
contractorstodocumentthattheyhavecontactedDBEsaboutsubcontractingopportunities(the
goodfaitheffortsprocess)butthatthenatureofthebiddingprocessmakesitdifficulttoensure
meaningfulandsubstantialparticipationofDBEsonthosecontracts.Issuesraisedbythese
participantsinclude:
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE13

Thechallengeofunbundlingsubcontractelementsaheadoftimeintosizessuitablefor
DBEs,especiallyoncomplexprojectswithtightbiddingschedules;
DifficultyoffittingDBEsintoabidsubmissioninthefinalminutesbeforeabiddeadline,
especiallyiftheDBEhasnotbidacompletesubcontractingpackage;
TendencyofprimecontractorstolooktoDBEsonlyforportionsoftheprojectthatare
easilyseparatedinanoverallbidpackage(e.g.,trucking);
Insufficientresponsibilityonfirsttiersubcontractorsonlargeprojectstolookforwaysto
includeDBEsassecondtiersubcontractorsintheirprojectcomponents;
Insufficientincentivestodevelopworkopportunitiesonprojectsthatwouldencourage
DBEsubcontractorstobecomeprimecontractorsonfutureprojects;and
Inahighlypricecompetitiveenvironment,thechallengeofchoosinganysubcontractorfor
aportionoftheprojectthatisnotthelowbidwhentheprimecontractorisputtingtogether
thetotalbid.
AnumberofintervieweesindicatedthatDBEcontractgoalsproduceanincentiveforprime
contractorstousehighlyautomatedgoodfaitheffortsprocessestocomplywiththeprogram
ratherthantoseekmeaningfulparticipationofDBEsinaproject.Manyintervieweeswerehighly
criticalofprogramsthatreliedongoodfaitheffortssubmissions.
Anumberofparticipantssuggestedapproachestheythoughtweresuperiortothecurrent
versionoftheDBEcontractgoals/goodfaitheffortsmeasuresinplaceforFHWAfunded
contracts.Ingeneral,theseideasfocuson:
Streamliningprocessesforprimecontractorsubcontractorcommunicationaboutspecific
bidopportunities(buildingonwhatCaltranshasrecentlyimplemented);and
ProvidingincentivesforprimecontractorstoincreaseDBEparticipationonFHWAfunded
projectsinwaysthatwouldfurtherdevelopthoseDBEs.
Caltransmightfurtherexploretheseandothertypesofopportunitiesforimprovingitscurrent
implementationoftheFederalDBEProgram.Thismayincludereviewinglegalissues,including
statecontractinglawandwhetheralternativemeasureswouldmeetUSDOTregulations.
CaltransshouldalsoreviewwhatithaslearnedinitsmoreflexibleapplicationoftheDBE
Programtoitsdesignbuildcontracts.Chapter10ofthedisparitystudyreportdiscussesthese
conceptsindetail,withsupportinginformationinAppendicesJandL.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE14

NextSteps
ThedisparitystudyreportpresentsanindependentanalysisofinformationrelatedtoCaltrans
implementationoftheFederalDBEProgram.Caltransshouldreviewreportresultsandother
relevantinformationwhenmakingdecisionsconcerningitsimplementationoftheFederalDBE
Program.CaltranswillneedtosubmitaGoalandMethodologyforathreeyearperiodbeginning
FederalFiscalYear2013.Chapter10ofthereportprovidesadditionalinformationconcerning
programcomponentsforCaltransconsideration.
USDOTperiodicallyrevisescomponentsoftheFederalDBEProgramandissuesguidance
concerningimplementationoftheProgram.Inaddition,newcourtdecisionsprovideinsightsas
toproperimplementationoftheFederalDBEProgram.Caltransshouldcloselyfollowsuch
developments.
Caltransshouldalsoexaminestaffing,trainingandinformationsystemsnecessarytoimproveits
implementationoftheFederalDBEProgram.
BBCRESEARCH&CONSULTINGFINALREPORT SECTIONES,PAGE15

CHAPTER1.
Introduction
TheCaliforniaDepartmentofTransportation(Caltrans)isresponsibleformanagingmorethan
50,000milesofCalifornia'sfederalandstatehighways.BecauseCaltransreceivesfundsfromthe
UnitedStatesDepartmentofTransportation(USDOT),itmustimplementtheFederal
DisadvantagedBusinessEnterprise(DBE)Program.TheFederalDBEProgramisdesignedto
addresspotentialdiscriminationagainstDBEsintheawardandadministrationofUSDOT
fundedcontracts.
1
CaltransretainedBBCResearch&Consulting(BBC)toconductadisparitystudythatwould
provideinformationtohelpitimplementtheFederalDBEProgram.Adisparitystudy
primarilyexamineswhetherthereareanydisparitiesbetween:
Thepercentageofcontractdollars(includingsubcontractdollars)thatanagencyandits
subrecipientsawardedtominorityandwomenownedbusinessenterprises(MBE/WBEs)
duringaparticulartimeperiod(i.e.,utilization)
2
;and
ThepercentageofcontractdollarsthatMBE/WBEsmightbeexpectedtoreceivebasedon
theiravailabilitytoperformonspecifictypes,sizesandlocationsoftheagencysprime
contractsandsubcontracts(i.e.,availability).
Disparitystudiesalsoexamineotherqualitativeandquantitativeinformationrelatedto:local
marketplaceconditionsforDBE/MBE/WBEsandforothersmallbusinesses;contracting
practicesandbusinessassistanceprogramsthattheagencycurrentlyhasinplace;andpotential
programmeasuresforconsiderationaspartoftheagencysimplementationoftheFederalDBE
Program.
USDOTrecommendsthatagenciesimplementingtheFederalDBEProgramshouldconsider
conductingdisparityforseveralreasons.
Thetypesofresearchthatareconductedaspartofadisparitystudyprovideinformation
thatisusefulforsettingoverallannualaspirationalDBEgoalsandforfinetuning
implementationoftheFederalDBEProgram.
Stateandlocalagenciesthathavesuccessfullydefendedtheirimplementationsofthe
FederalDBEProgramincourthavetypicallyreliedonthetypesofinformationcollectedas
partofadisparitystudy.
Adisparitystudyoftenprovidesinsightsintohowtoimprovecontractopportunitiesfor
localsmallbusinesses.
1
BBCconsiderscontractsthatincludeatleast$1ofUSDOTfundingasUSDOTfunded.
2
Percentageofdollarshasbeenacceptedincourtsasanappropriatewayofexaminingutilization.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE1

Anindependent,objectivereviewofMBE/WBEparticipationinanagencyscontractingis
valuabletobothagencyleadershipandtoexternalgroupsthatmaybemonitoringthe
agencyspractices.
Inthischapter,BBCintroducesCaltransdisparitystudyinthreeparts:
A. Background
B. Studyscope;and
C. BBCstudyteam.
A.Background
AsarecipientofUSDOTfunds,Caltransmustcomplywithfederalregulationsandimplementthe
FederalDBEProgram.AfterenactmentoftheTransportationEquityActforthe21
st
Century
(TEA21)in1998,USDOTestablishedanewFederalDBEProgramforfundrecipientsto
implement.
3
Federalregulationsin49CFRPart26guidehowstateandlocalgovernments
shouldimplementtheFederalDBEProgram.
4
Accordingtothoseregulations,agenciesare
requiredtodevelopandsubmitthreeyearoverallaspirationalpercentagegoalsforDBE
participation,whichmaybemetusingraceandgenderneutralmeansor,ifnecessary,raceand
genderconsciousmeans(oracombinationofbothtypesofmeasures).
5
SettinganoverallgoalforDBEparticipation.Caltransmustdevelopathreeyearoverall
goalforDBEparticipationinitsUSDOTfundedcontracts.CaltransoverallgoalforDBE
participationisaspirationalitdoesnothavetomeetthegoalandfailuretodosodoesnot
automaticallyleadtoanypenalties.TheFederalDBEProgramdescribesthestepsanagency
mustfollowinestablishingitsgoal.Tobeginthegoalsettingprocess,anagencymustdevelopa
basefigurebasedontheavailabilityoffirmsthatareDBEsorcouldbecertifiedasDBEsandon
otherinformation.Then,afterconsideringvarious,relatedfactors,theagencycanmakeupward,
downward,ornoadjustmentstoitsbasefigureasitdeterminesitsoverallaspirationalDBEgoal
(i.e.,considerationofstep2adjustments).
ProjectingtheportionoftheoverallDBEgoaltobemetthroughneutralmeans.
Accordingtoprogramregulations49CFRPart26,anagencymustmeetthemaximumfeasible
portionofitsoverallgoalforDBEparticipationthroughraceandgenderneutralmeans.
6
Neutralprogrammeasuresaremeasuresdesignedtoremovepotentialbarriersforall
businessesattemptingtodoworkwiththeagencyormeasuresdesignedtospecificallyincrease
theparticipationofsmalloremergingbusinessesingeneral(forotherexamplesofraceand
genderneutralprogrammeasures,see49CFRSection26.51(b)).Ifanagencycanmeetitsgoal
solelythroughraceandgenderneutralmeans,itcannotimplementraceorgenderconscious
3
USDOTmostrecentlyrevisedtheFederalDBEPrograminearly2011.
4
http://ecfr.gpoaccess.gov/cgi/t/text/text
idx?region=DIV1;type=boolean;c=ecfr;cc=ecfr;sid=14e071f96d5d61cb9d2410ed56c59d3d;q1=dbe;rgn1=Section%20Heading;
op2=and;rgn2=Section;op3=and;rgn3=Section;view=text;idno=49;node=49%3A1.0.1.1.20;rgn=div5
5
49CFRSections26.45,26.51.
6
49CFRSection26.51.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE2

measuresaspartofitsprogram(i.e.,measuresspecificallydesignedtoincreasetheparticipation
ofDBE/WBE/WBEs,suchasDBE/MBE/WBEcontractinggoals).
Everythreeyears,theFederalDBEProgramrequiresagenciestoprojecttheportionsoftheir
overallDBEgoalsthattheywillmeetthroughneutralmeasuresandtheportionsthattheywill
meetthroughanyraceorgenderconsciousmeasures.USDOThasoutlinedanumberoffactors
foranagencytoconsiderwhenmakingsuchdeterminations.
7
Determiningwhetherallgroupswillbeeligibleforrace orgenderconscious
programmeasures.Ifanagencydeterminesthatraceorgenderconsciousprogram
measuresareappropriateforitsimplementationoftheFederalDBEProgram,then,basedon
relevantanalyses,itmustalsodeterminewhichracial/ethnicorgendergroupsareeligiblefor
thosemeasures.USDOTprovidesawaiverprovisionifanagencydeterminesthatits
implementationoftheFederalDBEProgramdoesnotneedtoincludecertainracial/ethnicor
gendergroupsintheraceorgenderconsciousprogrammeasuresthatitimplements.For
example,inrecentyearsCaltranssetcontractinggoalsforunderutilizedDBEs(UDBEs),which
didnotincludeallDBEgroups.CaltranscountstheparticipationofallDBEstowarditsoverall
DBEgoal,butonlyUDBEscounttowardmeetingindividualcontractinggoals.Caltrans
determinedwhichDBEgroupswereUDBEsinpartbyexaminingresultsofdisparityanalysesfor
individualracial/ethnicandgendergroups.
PromotingDBEparticipationasprimecontractors.TheFederalDBEProgramcallsfor
agenciestoremoveanybarrierstoDBEparticipationasprimecontractorsbutdoesnotrequire
agenciestoimplementprogramsthatgivepreferencetoDBEprimecontractors.Quotasare
prohibited,butunderextremecircumstances,anagencycanrequestUSDOTapprovaltouse
preferenceprogramsrelatedtoDBEprimecontracting.Smallbusinesspreferenceprograms,
includingreservingcontractsonwhichonlysmallbusinessesprimecontractorscanbid,are
allowableundertheFederalDBEProgram.USDOTrecentlybeganrequiringagenciestoinclude
smallbusinessprogramsaspartoftheirimplementationoftheFederalDBEProgram.
Legalchallenges.AlthoughagenciesarerequiredtoimplementtheFederalDBEProgramin
ordertoreceiveUSDOTfunds,differentgroupshavechallengedthoseimplementationsincourt.
InadditiontoCaltrans,statetransportationdepartmentsinIllinois,Minnesota,andNebraska
havesuccessfullydefendedtheirimplementationsoftheFederalDBEProgram,ashasalocal
transportationagencyinNewJersey.TheWashingtonStateDepartmentofTransportationwas
notabletosuccessfullydefenditsimplementationoftheFederalDBEProgram.
7
Seehttp://www.dotcr.ost.dot.gov/Documents/Dbe/49CFRPART26.doc
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE3

B.StudyScope
ThedisparitystudyprovidesinformationthatwillhelpCaltranscontinueitsimplementationof
theFederalDBEProgram,including:
EstablishingathreeyearoverallaspirationalgoalforDBEparticipationinitsUSDOTfunded
contracts;
PotentiallyprojectingtheportionofitsoverallaspirationalDBEgoaltobemetthroughrace
andgenderneutralmeansandanyportiontobemetthroughrace orgenderconscious
means;
Identifyingspecificracial/ethnicorgendergroupsthatareeligibleforanyraceorgender
consciousprogrammeasures(ifapplicable);and
ChoosingspecificprogrammeasuresaspartofitsimplementationoftheFederalDBE
Program.
TheinformationwillalsobeusefultoCaltransasitcontinuestoseekfairnessinitscontracting
andprocurementprocesses,includingfornonUSDOTfundedcontracts.
Racial/ethnicandgendergroupsexaminedinthestudy.ADBEisdefinedin49Codeof
FederalRegulations(CFR)Part26asaforprofitsmallbusinessthatisownedandoperatedby
oneormoreindividualswhoarebothsociallyandeconomicallydisadvantaged.
8
Thereisalsoan
annualgrossreceiptslimit(notmorethan$22,410,000averageoverthreeyearsandlower
limitsforcertainlinesofbusiness)andapersonalnetworthlimit($1.32millionnotincluding
equityinthebusinessandinprimarypersonalresidence)thatbusinessesandbusinessowners
mustfallbelowtobeabletobecertifiedasaDBE.
TheFederalDBEProgramspecifiesthatthefollowingracial/ethnicandgendergroupsare
presumedtobedisadvantaged:
BlackAmericans(orAfricanAmericansinthisstudy);
HispanicAmericans;
NativeAmericans;
AsianPacificAmericans;
SubcontinentAsianAmericans;
Womenofanyraceorethnicity;and
Anyadditionalgroupswhosemembersaredesignatedassociallyandeconomically
disadvantagedbytheSmallBusinessAdministration(SBA).
8
49CFRSection26.5.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE4

Inaddition,agenciescanconsiderindividualstobesociallyandeconomicallydisadvantagedona
casebycasebasis.
9
Aslongasthosebusinessesandbusinessownersdonotexceedrevenueand
personalnetworthlimits,theyareeligibleforDBEcertification.
MBE/WBEs,DBEs,andPotentialDBEs.BBCincludesMBEsandWBEsregardlessof
DBEcertificationinutilization,availability,disparity,andmarketplaceanalyses.Asaresult,
thoseanalysespertaintoanypotentialbarriersrelatedspecificallytotherace,ethnicity,or
genderofbusinessowners.
10
ThestudyteamusesthetermsMBEsandWBEstorefertobusinessesthatareowned
andcontrolledbyminoritiesorwomen(accordingtotherace/ethnicitydefinitionslisted
above),regardlessofwhethertheyarecertifiedormeettherevenueandnetworth
requirementsforDBEcertification.
11
ThestudyteamusesthetermDBEtoreferspecificallytobusinessescertifiedassuch,
accordingtothedefinitionsin49CFRPart26.
ThestudyteamusesthetermpotentialDBEtorefertoMBE/WBEsthatare
DBEcertifiedorappearthattheycouldbeDBEcertifiedbasedontherevenuerequirements
specifiedaspartoftheFederalDBEProgram,regardlessofactualDBEcertification.
Analysesinthedisparitystudy.ThedisparitystudyfocusesonCaltranstransportation
relatedcontractscontractsthatinvolvedtheplanning,design,construction,maintenance,or
repairoftransportationinfrastructure.Itincludesanalysesofwhetherthereisadisparity
betweentheutilizationandavailabilityofMBE/WBEsonthosecontracts.Inaddition,itincludes
analysesrelatedtolocalmarketplaceconditionsforDBE/MBE/WBEsandforothersmall
businesses;CaltransthreeyearoverallaspirationalDBEgoal;Caltranscontractingpractices
andbusinessassistanceprograms;andpotentialprogrammeasuresforconsiderationaspartof
CaltransimplementationoftheFederalDBEProgram.
Datacollectionandanalysis.BBCreliedonmultipleCaltransdatasourcesincludingboth
electronicandhardcopydatafilestocompletetheutilizationandavailabilityanalyses.In
addition,thestudyteamconductedtelephoneinterviewswiththousandsofbusinesses
throughoutCalifornia.Thescopeofthestudyteamsdatacollectionandanalysisasitpertainsto
theutilizationandavailabilityanalysesispresentedinChapter2.
Marketplaceconditions.BBCconductedquantitativeanalysesoftherelativesuccessof
minoritiesandwomenandMBE/WBEsthroughoutCaliforniastransportationcontracting
industry.BBCcomparedbusinessoutcomesforminorities,women,andMBE/WBEstooutcomes
forwhitemalesandwhitemaleownedfirms.Inaddition,thestudyteamcollectedqualitative
informationaboutpotentialbarriersthatsmallbusinessesandMBE/WBEsfaceintheCalifornia
9
WhitemaleownedbusinessescanalsomeetthefederalcertificationrequirementsandbecertifiedasDBEs.
However,relativelyfewDBEsarewhitemaleownedbusinesses.
10
IfthedisparityanalysiswereconductedbasedonlyoncurrentlycertifiedDBEs,thestudyteamwouldbeunabletodraw
conclusionsabouttheeffectivenessorneedforprogramstoassistMBE/WBEs.
11
Forthisstudy,aWBEisafirmwithatleast51percentownershipandcontrolbynonminoritywomen.Firmsownedand
controlledbyminoritywomenarecountedasminorityownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE5

constructionandengineeringindustriesthroughindepthanecdotalinterviews,focusgroups,
andpublichearings.InformationaboutmarketplaceconditionsispresentedinChapter3and
AppendicesE,F,G,H,IandJ.
Availabilityanalysis.BBCanalyzedthepercentageofMBE/WBEsthatareready,willing,and
abletoperformonCaltranstransportationrelatedconstructionandengineeringcontracts.That
analysiswasbasedontelephoneinterviewswiththousandsofCaliforniabusinessesthatworkin
industriesrelatedtothetypesoftransportationcontractingdollarsthatCaltransawards.BBC
analyzedavailabilityforspecificMBE/WBEgroups,typesofcontracts,andfederalfiscalyears.
ResultsfromtheavailabilityanalysisarepresentedinChapter4andAppendixC.
Utilizationanalysis.BBCanalyzedcontractdollarsthatCaltransawardedtoMBE/WBEson
transportationrelatedconstructionandengineeringcontractsthatCaltransawardedbetween
January1,2007andDecember31,2010.Thosedataincludedinformationaboutassociated
subcontracts.BBCanalyzedcontractsthatwereUSDOTfundedandthosethatweresolely
fundedthroughnonfederalsources.Resultsfromtheutilizationanalysisarepresentedin
Chapter5andAppendixD.
Disparityanalysis.BBCexaminedwhethertherewereanydisparitiesbetweentheutilization
andavailabilityofMBE/WBEsforconstructionandengineeringcontractsthatCaltransawarded
duringthestudyperiod.BBCanalyzeddisparitiesforspecificMBE/WBEgroups,typesof
contracts,contractroles,andcontractsizes.Thestudyteamalsoanalyzeddisparitiesfor
contractstowhichDBEcontractinggoalsappliedandforcontractstowhichsuchgoalsdidnot
apply(e.g.,nonfederallyfundedcontracts).Thestudyteamalsoassessedwhetheranyobserved
disparitieswerestatisticallysignificant.Resultsfromthedisparityanalysisarepresentedin
Chapter6andAppendixK.
Explorationsofpossiblecausesofanydisparities.BBCexaminedpotentialcausesofany
disparitiesbetweenutilizationandavailabilityofMBE/WBEsforCaltransandLocalAssistance
contractsawardedduringthestudyperiod.Thisincludedanalysisofavailabledataonthebid
andproposalprocessforasampleofcontracts,comparisonofresultsforsubsetsofCaltrans
contractsandreviewofanyindicationsofoverconcentration.Thereviewofpotential
explanationsofanydisparitiesispresentedinChapter7.
CaltransoverallannualaspirationalDBEgoal.Basedoninformationfromtheavailabilityand
otheranalyses,BBCprovidedCaltranswithinformationthatwillhelpwithsettingitsthreeyear
overallannualaspirationalgoal,includingthebasefigureandconsiderationofanystep2
adjustments.InformationaboutCaltrans'overallannualDBEgoalispresentedinChapter8.
Projectingportionofgoaltobemetthroughneutralmeans.BBCreviewedinformation
regardingevidenceofdiscriminationintheCaliforniacontractingmarketplace,analyzed
CaltransexperiencewithmeetingitsoverallDBEgoalandprovidedinformationaboutCaltrans
pastperformanceinmeetingitsoverallDBEgoalusingraceandgenderneutralmeasures.
InformationrelatedtotheseinvestigationsispresentedinChapter9.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE6

CaltransimplementationoftheFederalDBEprogram.BBCreviewedCaltranscurrent
contractingpracticesandcurrentFederalDBEProgrammeasures.Fordifferenttypesof
programelements,BBCpresentsitemsforCaltranstoconsider.Thestudyteamsreviewis
presentedinChapter10.
C.StudyTeam
TheBBCstudyteamwascomprisedofsixfirmswithdecadesofcollectiveexperiencerelatedto
conductingdisparitystudiesinconnectionwiththeFederalDBEProgram.Keypersonnelfrom
fourfirmsonthestudyteamBBC,KeenIndependentResearch,Holland&KnightandGCAP
ServiceswerepartoftheBBCledstudyteamthatconductedthe2007Caltransdisparity
study.
BBCResearch&Consulting(BBC)primeconsultant.BBCisaDenverbasedeconomic
andpolicyresearchfirm.BBChadoverallresponsibilityforthestudyandperformedmostofthe
requiredquantitativeanalyses.
KeenIndependentResearch(KeenIndependent).KeenIndependentisaDenverbased
economicandmarketresearchfirmthatspecializesindisparitystudies.KeenIndependent
advisedonthestudyandcoauthoredthefinalreport.
Holland&Knight.Holland&Knightisanationallawfirmwithofficesthroughoutthecountry,
includinginCalifornia.Holland&Knightconductedthelegalanalysisthatprovidesthebasisfor
thisstudy.
GCAPServices(GCAP).GCAPisaminorityownedresearchfirmwithofficesinCostaMesa
andCitrusHeights,California.GCAPhelpedtocompilehardcopycontractdataatCaltransoffices
andhelpedtoreviewcurrentcontractingpracticesandbusinessassistanceprograms.
FaroConsultingandSolutions(Faro).Faroisadisabledveteranownedprofessional
servicesfirmlocatedinSacramento,California.Faroconductedindepthanecdotalinterviewsas
partofqualitativeanalysesofmarketplaceconditions.
WSCConsulting(WSC).WSCisadisabledveteranownedprofessionalservicesfirmlocated
inSacramento,California.WSCconductedindepthanecdotalinterviewsaspartofqualitative
analysesofmarketplaceconditions.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER1,PAGE7

CHAPTER2.
CollectionandAnalysisofContractData
Chapter2providesanoverviewoftheCaltranstransportationcontractsincludedinthestudy
anddescribestheprocessthatthestudyteamusedtocollectinformationonprimecontractsand
subcontracts.
Chapter2isorganizedintofiveparts:
A. OverviewofCaltranstransportationcontracts;
B. CollectionandanalysisofCaltranscontractdata;
C. CollectionofinformationonvendorsutilizedonCaltranscontracts;
D. TypesofworkinvolvedinCaltranscontracts;and
E. LocationofbusinessesperformingCaltranswork.
AppendixDprovidesadditionaldetailsaboutthemethodsBBCusedtocollectandanalyzethe
contractdata.
A.OverviewofCaltransTransportationContracts
CaltransusesFederalHighwayAdministration(FHWA)fundingandstateresourcestofund
highwayandrelatedconstructionandengineeringprojectsthroughoutCalifornia.Examplesof
suchprojectsincludeconstructingnewhighways,resurfacingroads,andimprovingbridges.
Constructioncontractstypicallyinvolveaprimecontractorandseveralsubcontractors.Caltrans
OfficeEngineer(OE)awardsconstructioncontracts.Forprojectsthatrequireanengineeringor
designphase,Caltranssometimesretainsanengineeringprimeconsultant.Engineeringprime
consultantsmayretainsubconsultantstoperformspecializedworkondesignprojectssuchas
surveyingormapping.CaltransDivisionofProcurementsandContracts(DPAC)awards
engineeringcontracts.
CaltransalsoadministerstheLocalAssistanceProgramusingFHWAandstatefunds.Through
thisprogram,CaltransDivisionofLocalAssistanceoverseesfundingtomorethan600cities,
counties,andregionalagenciesforthepurposeofimprovingtheirtransportationinfrastructure
andprovidingtransportationservices.Localagenciesthatreceivethefundingareresponsible
forawardingandadministeringtheresultingcontracts.
CaltransalsoadministerssomeFHWAandstatefundsthroughotherdivisionsincludingthe
DivisionofTransportationPlanning(DTP)andtheDivisionofMassTransportation(DMT).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE1

B.CollectionandAnalysisofCaltransContractData
ThestudyteamworkedwithCaltransstafftocollectdataonCaltransFHWAandstatefunded
transportationconstructionandengineeringprimecontractsandsubcontracts.Asapartofthis
effort,thestudyteamcollectedinformationonasampleofcontractsadministeredbylocal
agenciesasapartofCaltransLocalAssistanceProgram.
Studyperiod.BBCexaminedCaltranscontractsawardedbetweenJanuary1,2007and
December31,2010.BBCdeterminedthetimeperiodforeachcontractbasedonthedateof
contractaward.
Datasources.BBCusedseveralinformationsourcestocompileprimecontractand
subcontractinformation,asdescribedindetailinAppendixD.
Caltransstaffprovidedthestudyteamwithelectronicrecordsonprimecontractsthat
Caltransawardedduringthestudyperiod.
ThestudyteamworkedwithCaltransstafftoreviewanumberofpossibledatasourcesfor
constructionsubcontractsandconcludedthattheformCEM1201SubcontractingRequest
wasthemostcomprehensivesourceofinformation.Primecontractorsarerequiredto
submitCEM1201toCaltranspriortousingasubcontractor.Thestudyteamworkedwith
CaltransdistrictofficestocollectavailablecopiesofformCEM1201.
InformationaboutCaltransengineeringcontractscamefromacombinationofelectronic
recordsandhardcopyinvoicesrelatedtoeachcontract.BBCcollectedinformationforboth
FHWAandstatefundedcontracts.
Thestudyteamcollecteddataonasampleofcontractsthatwereawardedaspartofthe
LocalAssistanceProgramduringthestudyperiod.AppendixDdescribesthesample
methodologythatthestudyteamused.Afterselectingthesample,thestudyteam
conductedamailsurveyofthelocalagenciesthatawardedtheselectedcontractstocollect
informationontheprimecontractorsandsubcontractorsthatperformedthework.
ForDMTcontracts,Caltransstaffprovidedaspreadsheetofcontractswithinformationon
theprimecontractorsandsubcontractorsthatperformedthework.
ThestudyteamworkedwithDTPstafftocollectavailabledatafromthelargestrecipients
ofDTPfunding.AlargeportionofDTPfundingduringthestudyperiodwasusedfor
operationsbylocalagenciesandwasnotincludedinthestudy.
Caltransalsoprovidedinformationonwhethereachconstructionandengineeringcontractwas
FHWAfunded.
1
1
CaltransconsidersacontracttobeFHWAfundedifFHWAfunded$1ormoreofthecontract.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE2

TotalnumberofCaltranscontracts.Thestudyteamidentifiedmorethan1,900Caltrans
awardedconstructioncontracts,morethan170Caltransawardedengineeringcontracts,and
morethan1,000LocalAssistanceProgramcontractsadministeredduringthestudyperiod.
Thesecontractsaccountedforapproximately$12.5billionofCaltransspending.Mostofthese
contractsweresuitableforinclusioninthestudyteamsanalyses.
Contractsincludedinthestudyteamsanalyses.Thestudyteamincludedtransportation
constructionandengineeringcontractsthatCaltransawardedbetweenJanuary1,2007and
December31,2010initsanalyses.Foreachprimecontractandsubcontract,thestudyteam
determinedwhethertheutilizedvendorwasaforprofitbusinessandidentifiedtheindustry
andsubindustrythatcharacterizedthevendorsprimarylineofbusiness(e.g.,thesubindustry
ofWater,sewer,andutilitylines).BBCidentifiedsubindustriesbasedonCaltranscontractdata
andthereportedprimarylineofworkofthecontractor.Thestudyteamonlyconsideredthose
contractsonwhichaforprofitbusinessperformedthework.
Basedontheabovecriteria,thestudyteamexamined2,940constructionandengineering
contractsthatCaltransawardedduringthestudyperiod,totaling$11.4billion.Figure21
presentsthenumberofcontractsandcontractdollarsthatthestudyteamincludedinits
analysesbyfundingsource.Approximately75percentofthedollarsonthesecontracts,$8.5
billion,wereforcontractsinvolvingFHWAfunds.Thatamountincludescontractsthatwereonly
partiallyfundedthroughFHWAfunds.
Thestudyteamcollecteddataon12,506subcontractsassociatedwithCaltranscontracts
awardedduringthestudyperiod.Whenconsideringbothprimecontractsandsubcontracts,the
studyteamexamined15,446contractelements.
Figure21.
NumberofCaltrans
transportationrelated
contracts,2009June2011
Source:
BBCResearch&ConsultingfromCaltrans
contractdata.
Caltranscontracts
Dollars
(millions) Number
Caltransconstructioncontracts
FHWAfunded 652 $5,966
Statefunded 1301 2,691
Total 1953 $8,657
CaltransEngineeringrelatedcontracts
FHWAfundedcontracts 137 $244
Statefunded 40 150
Total 177 $394
Localassistancecontracts
FHWAfundedcontracts 792 $2,333
Statefunded 18 13
Total 810 $2,346
Totalcontracts
FHWAfunded 1581 $8,543
Statefunded 1359 2,854
Total 2,940 $11,397
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE3

Contractsnotincludedinthestudyteamsanalyses.Thestudyteamdidnotincludecontracts
intheutilizationanalysisthatwereawardedbeforeandafterthestudyperioddatesand
contractswheretheprimaryindustrywasnotdirectlyrelatedtotransportationcontracting
(suchasfinancialservices).
Primecontractandsubcontractamounts.Foreachconstructionandengineeringcontract,
BBCexamineddollarsthattheprimecontractorandanysubcontractorsreceived.
Ifacontractdidnotincludeanysubcontracts,thestudyteamattributedtheentireaward
amount(includinganyamendmentsorchangeorders)totheprimecontractor.
Ifacontractincludedsubcontracts,thestudyteamcalculatedsubcontractamountsasthe
totalcontractamount(atthetimeofaward)committedorbudgetedtoeachsubcontractor.
BBCthencalculatedprimecontractoramountasthetotalawardamountlessthesumof
dollarscommittedtoallsubcontractors.Whencontractawardinformationwasnot
available,BBCusedinformationonpaymentstoprimecontractorsandsubcontractors.
C.CollectionofInformationonUtilizedFirms
ThestudyteamcollectedinformationonfirmsutilizedonCaltranscontractsduringthestudy
periodfromavarietyofsources,including:
Caltranscontractdata;
TheCaliforniaUnifiedCertificationProgram(CUCP);
Dun&Bradstreet(D&B)businesslistingsandotherbusinessinformationsources;
Telephoneinterviewswithfirmownersandmanagers;and
Caltransstaffreview.
Thestudyteamcompiledthefollowinginformationabouteachutilizedvendor:
Firmlocation;
Ownershipstatus(MBE/WBE/DBE);
Primarylineofwork;
Yearofestablishment;and
Firmsize(intermsofnumberofemployeesandrevenue).
AppendixDpresentsadditionalinformationaboutthedatathatthestudyteamcollectedon
utilizedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE4

D.TypesofWorkInvolvedinCaltransContracts
Thestudyteamdeterminedthesubindustries,orworktypes,thatwereinvolvedineachprime
contractandsubcontractbasedonCaltranscontractdata,and,asasupplement,oninformation
abouteachutilizedprimecontractorandsubcontractorsprimarylineofbusiness.BBC
developedthesubindustriesbasedinpartonD&B8digitclassificationcodes.Figure22
presentsthedollarsthatthestudyteamexaminedineachsubindustryaspartofitsanalyses.
Figure22.
DollarsofCaltransprimecontractsandsubcontractsbysubindustry,
2009June2011
Industry Total(inthousands)
Construction
Highwayandstreetconstruction
Electricalwork
Asphaltandconcretesupply
Rebarandreinforcingsteel
Fencing,guardrailsandsigns
Landsiteprep
Landscapeservices
Wreckinganddemolition
Paintingandstriping
Water,sewerandutilitylines
Excavationanddrilling
Trucking
Flaggingservices
Heavyconstructionequipmentrental
Constructionsandandgravel
Otherconstruction
Otherconstructionsupplies
Totalconstruction
Engineeringrelated
Engineering
Constructionmanagement
Environmentalresearchandconsulting
Testingservices
Surveyingandmapmaking
Archeologicalexpeditions
Landscapearchitecture
Transportationconsulting
Totalengineeringrelated
Total
$8,206,625
427,881
420,308
314,417
216,548
153,399
149,238
112,100
105,671
84,126
81,345
41,326
31,474
11,070
5,724
75,293
62,772
$10,499,315
$620,201
163,177
84,712
10,726
5,880
4,919
4,782
3,317
$897,714
$11,397,030
Source: BBCResearch&ConsultingfromCaltranscontractdata.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE5

Whentypesofworkaccountedforarelativelysmallportionoftotaldollarsthatthestudyteam
examined,theywerecombined.Forexample,thecontractingdollarsthatCaltransawardedto
contractorstoinstallfences,guardrailsandsignstotaledlessthan1percentofthetotalcontract
dollarsthatthestudyteamexaminedinthestudy.Asaresult,BBCcombinedthesetypesof
work.Othertypesofworkthatweresmallordidnotfitintoothercategorieswereincludedin
otherconstruction.
E.LocationofBusinessesPerformingCaltransWork
TheFederalDBEprogramrequiresagenciestoimplementtheDBEprogrambasedon
informationfromtherelevantgeographicmarketareatheareainwhichtheagencyspends
thesubstantialmajorityofitscontractingdollars.ThestudyteamusedCaltranscontractingdata
tohelpdeterminetherelevantgeographicmarketareaforthestudy.
Thestudyteamsummedthedollarsgoingtoeachprimecontractorand
subcontractorinvolvedinCaltranscontractsduringthestudyperiod.
Foreachprimecontractorandsubcontractor,BBCdeterminedwhetherthe
companyhadabusinessestablishmentinCaliforniabasedonCaltransvendordata
andadditionalresearch.
BBCthenaddedthedollarsforfirmswithCaltranslocationsandcomparedthetotal
withthatforcompanieswithnoestablishmentswithinthestate.
Basedonthisanalysis,98percentofCaltranstransportationcontractdollarsduringthestudy
periodwenttofirmswithlocationsinCalifornia.ThisinformationindicatedthatCalifornia
shouldbeselectedastherelevantgeographicmarketareaforthestudy.BBCsanalyses,
includingtheavailabilityanalysisandquantitativeanalysesofmarketplaceconditions,focused
onCalifornia.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER2,PAGE6

CHAPTER3.
MarketplaceConditions
FederalcourtshavefoundthatCongressspentdecadescompilingevidenceofrace
discriminationingovernmenthighwaycontracting,ofbarrierstotheformationofminority
ownedconstructionbusinessesandofbarrierstoentry.
1
Congressfoundthatdiscrimination
hasimpededtheformationandexpansionofqualifiedMBE/WBEs.BBCconductedquantitative
andqualitativeanalysesofconditionsintheCaliforniamarketplacetoexaminewhetherbarriers
forMBE/WBEsthatCongressfoundonanationallevelalsoappearinCalifornia.BBCanalyzed
whetherbarriersexistintheCaliforniaconstructionandengineeringindustriesforminorities,
women,andforMBE/WBEs,andwhethersuchbarriersaffecttheutilizationandavailabilityof
MBE/WBEsforCaltranscontracting.
BBCexaminedconditionsintheCaliforniamarketplaceinfourprimaryareas:
A. Entryandadvancement;
B. Businessownership;
C. Accesstocapital;and
D. Successofbusinesses.
AppendicesEthroughIpresentquantitativeinformationconcerningconditionsintheCalifornia
marketplace.AppendixJpresentsqualitativeinformationthatthestudyteamcollectedthrough
40indepthpersonalinterviewswithbusinessownersandothersthroughoutthestate;four
focusgroupsthatBBCconductedwithCaltransstakeholders;and12publichearingsthat
Caltransconductedthroughoutthestate.
AppendixLreviewsqualitativeinformationthatBBCstudyteamscollectedaspartofa2012
BurbankGlendalePasadenaAirportAuthoritydraftdisparitystudy,
2
a2009SanDiegoCounty
RegionalAirportAuthoritydisparitystudyanda2010disparitystudyfortheSouthern
CaliforniaTransportationConsortium.
3
AppendixLsummarizesinformationfrominterviews
withmorethan130businessowners,managersandothersknowledgeableabouttheindustry.
1
SherbrookeTurf,Inc.v.MinnesotaDOT,345F.3d,970(8
th
Cir.2003)(citingAdarandConstructors,Inc.,228F.3dat116776);
WesternStatesPavingCo.v.WashingtonStateDOT,407F.3d983,992(9thCir.2005).
2
AtthetimeofthisdisparitystudyforCaltrans,theBurbankGlendalePasadenaAirportAuthoritystudywasintheformofa
draftreportthathadbeendistributedforpubliccomment.
3
TheConsortiumstudyincludedaconsortiumoffiveSouthernCaliforniatransportationagencies:LosAngelesCounty
MetropolitanTransportationAuthority(Metro),theSouthernCaliforniaRegionalRailAuthority(Metrolink),theOrange
CountyTransportationAuthority(OCTA),theSanDiegoAssociationofGovernments(SANDAG),andtheSanDiego
MetropolitanTransitSystem(MTS).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE1

A.EntryandAdvancement
IndividualsinterviewedaspartofthecurrentCaltransdisparitystudyaswellaspaststudiesin
thestateexplainthatthepeoplewhoformconstructionandengineeringfirmsworkinthe
industrybeforestartingthesebusinesses(see,forexample,discussioninAppendixK).Any
barrierstoentryintotheconstructionandengineeringindustriesmaylowerthenumberof
minoritiesandwomenwhostartconstructionandengineeringbusinessesinthestate.
AsdiscussedinAppendixE,anumberofstudiesthroughouttheUnitedStateshaveconcluded
thatraceandgenderdiscriminationhasaffectedtheemploymentandadvancementofcertain
groupsintheconstructionandengineeringindustry.TheBBCstudyteamexaminedthe
representationofminoritiesandwomenintheCaliforniaconstructionandengineering
industries.Fortheconstructionindustry,thestudyteamexaminedtheadvancementof
minoritiesandwomenintosupervisoryandmanagerialroles.
Quantitativeinformationaboutentryandadvancementinconstruction.Quantitative
analysesoftheCaliforniamarketplacebasedprimarilyondatafromthe2000U.S.Censusand
the20072009AmericanCommunitySurvey(ACS)showedthat,ingeneral,certainminority
groupsandwomenappeartobeunderrepresentedintheCaliforniaconstructionindustry
comparedtoallindustriesconsideredtogether.
4
Inaddition,minoritiesandwomenappearedto
facebarriersregardingadvancementtosupervisoryormanagerialpositions.Analysesofentry
andadvancementintheCaliforniaconstructionindustryrevealedpatternsthatweresimilarto
thosefoundfortheUnitedStatesasawhole.
Overallrepresentation.AfricanAmericans,AsianPacificAmericans,SubcontinentAsian
AmericansandwomenaccountedforasmallerpercentageofworkersintheCalifornia
constructionindustrythaninallCaliforniaindustriesin20072009.
ThreepercentofCaliforniaconstructionworkerswereAfricanAmericancomparedwith6
percentofworkersinallCaliforniaindustries.
AsianPacificAmericans(5%)andSubcontinentAsianAmericans(lessthan1%)werealso
underrepresentedintheconstructionindustryrelativetoallindustries.
NearlyonehalfofCaliforniaconstructionworkerswereHispanicAmerican(48%)compared
with34percentofworkersinallCaliforniaindustries.
NinepercentofCaliforniaconstructionworkerswerewomen,approximatelyonefifthofthe
representationofwomeninallCaliforniaindustries(45%).Manyofthewomenworkinginthe
constructionindustryholdjobsoutsidetheconstructiontrades.Inmostconstructiontradesin
California,womenwerelessthan3percentofworkers.AppendixEdescribestheseresultsin
moredetail.
4
Datafromthe2000CensuswerethemostcurrentdecennialCensusdataavailableatthetimeofthisstudy.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE2

Advancement.MinorityandwomenworkersintheCaliforniaconstructionindustrywereless
likelythannonHispanicwhitesandmalestoadvancetotheleveloffirstlinesupervisorbased
ondatafor20072009.Inaddition,minoritiesandwomenweregenerallylesslikelythannon
Hispanicwhitesandmalestoadvancetothelevelofconstructionmanager.AppendixEprovides
detailedresults.
Formaleducationbeyondhighschoolisnotaprerequisiteformostconstructionjobs.Because
theaverageeducationalattainmentofminoritiesandwomenwasgenerallyconsistentwith
educationalrequirementsforconstructionjobs,factorsotherthanformaleducationmayexplain
therelativelylowrepresentationofminoritiesandwomenintheCaliforniaconstruction
industryandtherelativelylowrepresentationofminoritiesandwomenworkinginsupervisory
andmanagerialroles(seeAppendixE).
Quantitativeinformationaboutentryintotheengineeringindustry.BBCalsoused
2000U.S.Censusdataand20072009ACSdatatoexamineemploymentandadvancementfor
minoritiesandwomenintheCaliforniaengineeringindustry.Aswithconstruction,ingeneral,
minoritiesappeartobeunderrepresentedintheCaliforniaengineeringindustry.Thestudyteam
observedsimilarpatternsfortheUnitedStatesasawhole.
Overallrepresentation.Ingeneral,minoritiesandwomenaccountedforasmallerpercentageof
workersintheCaliforniaengineeringindustrythaninallCaliforniaindustriesin20072009,
evenwhenlimitingtheanalysestoonlythoseindividualswithcollegedegrees.
ThreepercentofworkersintheCaliforniaengineeringindustrywereAfricanAmerican
comparedwith6percentofworkerswithcollegedegreesinallCaliforniaindustries.
Similartothatresult,14percentofworkersintheCaliforniaengineeringindustrywere
HispanicAmericancomparedwith34percentofworkerswithcollegedegreesinall
Californiaindustries.
AfricanAmericans,HispanicAmericansandNativeAmericansrepresentedasmallershareof
civilengineersthanofallworkers25andolderwithacollegedegreein20072009.Incontrast,
AsianPacificAmericanswere16percentofengineeringworkerswerecomparedwithonly12
percentofworkerswithcollegedegreesinallCaliforniaindustries.AsianPacificAmericans
were21percentofcivilengineersinCaliforniain20072009.
TwentysevenpercentofworkersintheCaliforniaengineeringindustrywerewomencompared
with45percentofworkerswithcollegedegreesinallCaliforniaindustries.Only13percentof
civilengineersinCaliforniawerewomenin20072009.
AppendixEpresentscomprehensiveinformationconcerningrelatededucationandemployment
intheengineeringindustry.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE3

Qualitativeinformationaboutentryandadvancement.BBCcollectedqualitative
informationaboutentryandadvancementintheCaliforniaconstructionandengineering
industriesthroughindepthinterviews,focusgroupsandpublichearings.
Severalintervieweesindicateddifficultiesassociatedwithentryandadvancementinthe
Californiaconstructionandengineeringindustriesforminoritiesandwomen.Theyindicated
thatsuchdifficultiesexistinmanyformsincludingunfavorableworkenvironments,
stereotypicalattitudes,andoffensivecommentsorbehavior.(Someminorityandfemale
intervieweesindicatedthattheyhadnotexperienceddifficultiesassociatedwithentryand
advancement.)
Anumberofintervieweesreportedadiscriminatoryworkenvironmentforminoritiesand
women:
Someintervieweesreportedthattheyweremadetofeelunwelcomeinthelocal
industry.Forexample,oneintervieweerepresentingawhitewomanownedfirm
reportedthatshestartedherownconstructionfirmbecausethefirmthatshe
workedforpreviouslymadecleartoheritsstancethatawomanshould[not]bein
management.
Otherintervieweesreportedinstancesofracialslurs,sexistcommentsandsexual
harassment,racerelatedgraffitionworksites,andotherincidentsaffectingwomen
andminorities.Forexample,anintervieweerepresentingawhitemaleownedfirm
statedthatheisawareoframpant,racerelatedgraffitibeingpresentonsomeofhis
worksites.Hereferredtotheconstructionindustryasajungleenvironment.A
Hispanicfemaleconstructionbusinessownersaidthatunfavorableenvironments
forwomenareahugeprobleminherbusiness.Menmakeoffensivecommentsall
thetimewhenthereisawomanonthejob.Sometimestheywonteventalktome
aboutjobs.Therewerealsoexamplesindicatingthatsomenonminoritiesand
mendidnotwanttoworkwithminoritiesorwomenorwouldnotrespecta
minorityorwomaninasupervisoryposition.
Somewomenintheengineeringindustrysaidthatsomemenhaveanexpectation
thatwomendonotperformcertaintypesofwork.Forexample,theAsianPacific
Americanfemaleowneraconstructionservicescompanysaidthatsheexperienced
thiswithamaleCaltransstaffmemberwhowasskepticalofherabilitytoperform
specifictypesofwork.Sheattributedthistogenderdiscrimination.
Someintervieweesreportedthattheirraceorgenderhadoncepreventedthem
frombeingapartofindustryrelatedgroupssuchasunionsandtradeassociations.
Oneintervieweesaidthat,manyyearsago,tradeunionsinhisregionofCalifornia
wereorganizedaroundethnicgroups,andtheresimplywasntaLocalforHispanic
AmericansorAfricanAmericans.Thefemaleownerofaconstructionfirm,said,
Theresbeendiscriminationintheunions. Someofourmembersthathave
comeupthroughthetradeshavethemosthorrendousstoriestotellofthethings
thattheyhavehadtoputupwith.Andifyoull lookattheunionmembershipnow,
youllseethatthereareveryfewwomenintherestill.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE4

Itisimportanttonote,however,thatrecentnationalresearchsuggeststhatthe
relationshipbetweenminoritiesandunionshasbeenchanging.Asaresult,
historicalobservationsmaynotbeindicativeofcurrentdynamicsinconstruction
unions.
Someminorityandfemaleintervieweesaswellassomewhitemenindicatedthat
thereprobablywasdiscriminationbutcouldnotidentifyspecificexamples.Many
interviewees,includingsomewhitemen,concludedthatconditionsintheindustry
weremoredifficultforwomenandminorities.
Somebusinessownersreportedthatdiscriminationwasmorepervasiveinthepast:
AnintervieweerepresentingaHispanicAmericanmaleownedfirmsaidthatwhen
hisfatherstartedthefirm30yearsagoheexperienceddiscrimination.Hewenton
tosaythattherearesuchalargenumberofHispanicAmericansintheindustry
todaythatdiscriminatingagainstthemwouldbeakintodiscriminatingagainstthe
entireindustryitwouldbetooimpractical.
Someintervieweesreportedthatsocietyhasovercomediscriminationbasedon
raceandgender,leadingtoincreasedopportunityforMBE/WBEfirms.For
example,anintervieweerepresentingalocaltradeassociationindicatedthat
racismandsexismarenotasproblematicastheywereinthepast.Withregardto
racism,shesaid,Wevecomealongway.Withregardtosexism,shecommented,
Twentyyearsagotherewasadifferentpayscale[formenandwomen],butI
believethosedaysaregone.
Someminorityandfemaleintervieweessaidthattheydidnotthinktheyhadbeenaffectedby
anyraceorgenderdiscrimination.
Effectsofentryandadvancement.Thebarriersthatminoritiesandwomenappeartoface
enteringandadvancingwithintheCaliforniaconstructionandengineeringindustriesmayhave
substantialeffectsonbusinessoutcomesforMBE/WBEs.
Typically,employmentandadvancementarepreconditionstobusinessownershipinthe
constructionandengineeringindustries.Becausecertainminoritygroupsandwomenare
underrepresentedintheCaliforniaconstructionandengineeringindustries,ingeneraland
assupervisorsandmanagers,itfollowsthatsuchunderrepresentationmaypreventsome
minoritiesandwomenfromeverstartingbusinesses,reducingoverallMBE/WBE
availabilityintheCaliforniatransportationcontractingindustry.
UnderrepresentationofcertainminoritygroupsandwomenintheCaliforniaconstruction
andengineeringindustries particularlyinsupervisoryandmanagerialrolesmay
perpetuatebeliefsandstereotypicalattitudesthatMBE/WBEsmaynotbeasqualifiedas
majorityownedbusinesses.ThosebeliefsmaymakeitmoredifficultforMBE/WBEstowin
workinCalifornia,includingworkwithCaltrans.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE5

B.BusinessOwnership
Nationalresearchandstudiesinotherstateshavefoundthatrace/ethnicityandgenderalso
affectopportunitiesforbusinessownership,evenafteraccountingforraceandgenderneutral
factors.Figure31summarizeshowcourtshaveusedinformationfromsuchstudies
particularlyfromregressionanalyseswhenconsideringthevalidityofimplementationsofthe
FederalDBEPrograminotherstates.
BBCusedregressionanalysesandsimilarsourcesof
dataasotherstudiestoanalyzebusinessownership
intheCaliforniatransportationcontractingindustry.
BBCused20072009ACSdatatoexaminewhether
therearedifferencesinbusinessownershiprates
betweenminoritiesandwomenandnonHispanic
whitesandmalesintheCaliforniaconstructionand
engineeringindustries.
Theregressionmodelsthatthestudyteam
developedshowedthatcertainminoritygroupsand
womenarelesslikelytoownbusinessesthannon
Hispanicwhitesandmales,evenafteraccountingfor
variouspersonalcharacteristicsincluding
education,age,andabilitytospeakEnglish.For
thosegroupsthatweresignificantlylesslikelyto
ownbusinesses,BBCcomparedtheiractual
businessownershiprateswithsimulatedratesif
thosegroupsownedbusinessesatthesamerateas
nonHispanicwhitesornonHispanicwhitemales
(inthecaseofnonHispanicwhitewomen)who
sharethesamepersonalcharacteristics.AppendixF
providesdetailsaboutBBCsquantitativeanalyses
ofbusinessownershiprates.
Figure31.
Useofregressionanalysesofbusiness
ownershipindefenseoftheFederalDBE
Program
Stateandfederalcourtshaveconsidered
differencesinbusinessownershiprates
betweenminoritiesandwomenandnon
Hispanicwhitesandmaleswhenreviewing
implementationsoftheFederalDBE
Program,particularlywhenconsideringDBE
goals.Forexample,disparitystudiesin
MinnesotaandIllinoisusedregression
analysestoexaminetheimpactof
race/ethnicityandgenderonbusiness
ownershipintheconstructionand
engineeringindustries.Resultsfromthose
analyseshelpeddeterminewhether
differencesinbusinessownershipexist
betweenminoritiesandwomenandnon
Hispanicwhitemalesafterstatistically
controllingforrace andgenderneutral
characteristics.Thoseanalyses,whichwere
basedon2000Censusdata,wereincludedin
materialssubmittedtothecourtsin
subsequentlitigationconcerningthe
implementationoftheFederalDBEProgram.
Quantitativeinformationaboutbusinessownershipinconstruction.Regression
analysesoftheCaliforniaconstructionindustryrevealedthatcertaingroupsweresignificantly
lesslikelythannonHispanicwhitesandmalestoownconstructionbusinesses,evenafter
accountingforvariousraceandgenderneutralpersonalcharacteristicssuchaseducation,age,
personalnetworth,andabilitytospeakEnglish.Thosegroupswere:
AfricanAmericans;
HispanicAmericans;and
Women.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE6

Foreachofthosegroups,Figure32presentsactualbusinessownershipratesandsimulated
businessownershiprates(i.e.,benchmark)ifthosegroupsownedconstructionbusinessesat
thesamerateasnonHispanicswhitesornonHispanicwhitemales(inthecaseofnonHispanic
whitewomen)whosharethesamepersonalcharacteristics.Thestudyteamcalculateda
businessownershipdisparityindexforeachgroupbydividingtheobservedbusinessownership
ratebythebenchmarkbusinessownershiprateandthenmultiplyingtheresultby100.Values
lessthan100indicatethat,inreality,thegroupislesslikelytoownbusinessesthanwhatwould
beexpectedfornonHispanicwhitesornonHispanicwhitemaleswhosharethesamepersonal
characteristics.
Figure32.
Comparisonofactualbusinessownershipratestosimulatedrates
forCaliforniaconstructionworkers,20072009
Selfemploymentrate Disparity index
Group Actual Benchmark (100 parity)
AfricanAmerican 19.1% 26.2% 73
HispanicAmerican 15.3% 21.9% 70
Whitefemale 17.2% 32.9% 52
Note: Asthebenchmarkfigurecanonlybeestimatedforrecordswithanobserved(ratherthanimputed)
dependentvariable,comparisonismadewithonlythissubsetofthesample.Forthisreason,actualself
employmentratesmaydifferslightlyfromthoseinFigureF1.
Source: BBCResearch&Consultingfromstatisticalmodelsof20072009ACSdata.Therawdataextractwas
obtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
AsshowninFigure32,AfricanAmericansandHispanicAmericansbothownconstruction
businessesatratesthataresubstantiallylowerthanthoseofnonHispanicwhiteswhosharethe
samepersonalcharacteristics.
5
AfricanAmericansownconstructionbusinessesat
approximately73percentoftheratethatwouldbeexpectedfornonHispanicwhiteswhoshare
thesamepersonalcharacteristics.HispanicAmericansownconstructionbusinessesat
approximately70percentoftheratethatwouldbeexpectedfornonHispanicwhiteswhoshare
thesamepersonalcharacteristics.ResultsweresimilarfornonHispanicwhitewomen.Non
Hispanicwhitewomenownconstructionbusinessesatabouthalftherate(disparityindexof52)
thatwouldbeexpectedbasedonthesimulatedbusinessownershipratesofnonHispanicwhite
maleswhosharethesamepersonalcharacteristics.
5
PersonalcharacteristicsthatBBCwasabletoincludeintheregressionanalysisarediscussedinAppendixF.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE7

Quantitativeinformationaboutbusinessownershipinengineering.Aswith
construction,BBCexamineddifferencesinbusinessownershipratesbetweenminoritiesand
womenandnonHispanicwhitesandmalesintheCaliforniaengineeringindustry.After
accountingforvariouspersonalcharacteristics,BBCfoundthatseveralgroupsweresignificantly
lesslikelytoownengineeringbusinessesthannonHispanicwhitesandmales.Thosegroups
were:
AsianPacificAmericans;
SubcontinentAsianAmericans;
HispanicAmericans;and
Women.
Foreachofthosegroups,Figure33presentsactualbusinessownershipratesandsimulated
businessownershipratesifthosegroupsownedengineeringbusinessesatthesamerateasnon
HispanicswhitesornonHispanicwhitemales(inthecaseofnonHispanicwhitewomen)who
sharethesamepersonalcharacteristics.
Figure33.
Comparisonofactualbusinessownershipratestosimulatedrates
forCaliforniaworkersintheengineeringindustry,20072009
Selfemploymentrate Disparity index
Group Actual Benchmark (100 parity)
AsianPacificAmerican 11.6% 16.8% 69
SubcontinentAsianAmerican 5.1% 16.4% 31
HispanicAmerican 8.4% 11.9% 71
Whitefemale 11.5% 17.7% 65
Note: Asthebenchmarkfigurecanonlybeestimatedforrecordswithanobserved(ratherthanimputed)
dependentvariable,comparisonismadewithonlythissubsetofthesample.Forthisreason,actual
selfemploymentratesmaydifferslightlyfromthoseinFigureF2.
Source: BBCResearch&Consultingfromstatisticalmodelsof20072009ACSdata.Therawdataextractwas
obtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
AsshowninFigure33,AsianPacificAmericans(disparityindexof69),SubcontinentAsian
Americans(disparityindexof31),andHispanicAmericans(disparityindexof71)own
engineeringbusinessesatratesthataresubstantiallylowerthanthoseofnonHispanicwhites
whosharethesamepersonalcharacteristics.Similartothoseresults,nonHispanicwhite
womenownengineeringbusinessesatabouttwothirdstherate(disparityindexof65)that
wouldbeexpectedbasedonthesimulatedbusinessownershipratesofnonHispanicwhite
maleswhosharethesamepersonalcharacteristics.
Qualitativeinformationaboutbusinessownership.BBCcollectedqualitative
informationaboutbusinessownershipintheCaliforniaconstructionandengineeringindustries
throughindepthinterviews,focusgroups,andpublichearings.
Accordingtomostinterviewees,thetransportationcontractingindustryinCaliforniaisdynamic
andhighlycompetitive,especiallyinrecentyears.Itisdifficulttostartandsuccessfullyoperatea
businesswithinthismarket.Potentialandcurrentbusinessownerswhoareminority,femaleor
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE8

whitemalefacemanyofthesamechallenges.Manyrepresentativesoflargemajorityowned
firmsalsoreporteddifficultiesremainingprofitableinthecurrentmarket.
Someintervieweesindicatedadditionaldisadvantagesforminoritiesandwomenstartingor
operatingbusinessesintheCaliforniatransportationcontractingindustry.Theyciteddifficulties
associatedwiththepreconditionsofstartingandmaintainingabusinesssuchasissueswith
experienceandexpertise,attractingqualifiedpersonnel,andbeingexcludedfromindustry
networks.Barriersaccessingcapitaltostartabusinesscandepressbusinessownershiprates.
Anydisadvantagesinoperatingabusinesscanalsoreducetherelativenumberofminorityand
womenownedfirms.
AppendixJandAppendixLprovidemuchmoredetailedanalysisofthequalitativeinformation
examinedinthisstudy.
Effectsofbusinessownership.Thebarriersthatcertainminoritygroupsandwomenappear
tofaceregardingbusinessownershipmayhavesubstantialeffectsonthecurrentcompositionof
thetransportationcontractingindustry.
Quantitativeandqualitativeevidenceindicatesthatcertainminoritygroupsandwomenare
lesslikelythannonHispanicwhitesandmalestoownconstructionandengineering
businessesinCalifornia.ThereisevidencethatsomeMBE/WBEsmayhaveneverformedas
aresultofdifferentbarriersrelatedtorace,ethnicityandgenderinCalifornia.
MBE/WBEsasapercentageofallCaliforniabusinessesavailablefortransportation
contractschangedverylittlebetween2007and2012(asmeasuredintheavailability
analysisforthe2007and2012AvailabilityandDisparityStudies).Minorityandfemale
ownershipoffirmsintheCaliforniatransportationcontractingindustryhasnotcaughtup
withbusinessownershipfornonminoritiesandmen.
Chapter8providesquantitativeanalysesofthepotentialeffectsofrace/ethnicityand
genderdisparitiesinbusinessownershipontheavailabilityofMBE/WBEsfor
transportationcontractingworkwithCaltrans.
C.AccesstoCapital
Accesstocapitalrepresentsoneofthekeyfactorsthatresearchershaveexaminedwhen
studyingbusinessformationandsuccess.Ifraceorgenderbaseddiscriminationexistsin
capitalmarkets,minoritiesandwomenmayhavedifficultyacquiringthecapitalnecessaryto
startorexpandabusiness.BBCexaminedwhetherMBE/WBEshaveaccesstocapitalbothfor
theirhomesandfortheirbusinessesthatiscomparabletothatofmajorityownedbusinesses.
Inaddition,thestudyteamexaminedinformationaboutwhetherminoritiesandwomenfaceany
barriersinobtainingbondingandinsurance.AppendixGprovidesdetailsaboutBBCs
quantitativeanalysesofaccesstocapital,bondingandinsurance.
Quantitativeinformationabouthomeownershipandmortgagelending.Wealth
createdthroughhomeownershipcanbeanimportantsourceoffundstostartorexpanda
business.Barrierstohomeownershiporhomeequitycanaffectbusinessopportunitiesby
limitingtheavailabilityoffundsforneworexpandingbusinesses.BBCanalyzedthepotential
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE9

effectsofrace/ethnicityonhomeownershipandmortgagelendinginCaliforniabasedon2007
2009ACSdataand2010HomeMortgageDisclosureAct(HMDA)data,respectively.
Homeownershiprates.Manystudieshavedocumentedpastdiscriminationinthenational
housingmarket.BBCreliedon20072009ACSdatatoexaminehomeownershipratesin
California.EveryminoritygroupthatthestudyteamexaminedAfricanAmericans,Asian
PacificAmericans,SubcontinentAsianAmericans,HispanicAmericans,NativeAmericans,and
otherminoritiesownedhomesinCaliforniaatalowerratethannonHispanicwhites(65%
ownhomes).Althoughthosedifferenceswereallstatisticallysignificant,thedifferencesbetween
nonHispanicwhitesandAfricanAmericans(38%ownhomes)andHispanicAmericans
(46%ownhomes)werethemostpronounced.
BBCalsoexaminedmedianhomevaluesamongCaliforniahomeownersandfoundthatAfrican
American,HispanicAmerican,andNativeAmericanhomeownerstendtohavelowerhome
valuesthannonHispanicwhitehomeowners.
Mortgagelending.Minoritiesmaybedeniedopportunitiestoownhomes,topurchasemore
expensivehomes,ortoaccessequityintheirhomesiftheyarediscriminatedagainstwhen
applyingforhomemortgages.Thestudyteamexploredmarketconditionsformortgagelending
inCaliforniausing2010HMDAdata.ThedataindicatedthatAfricanAmericans(15%),Hispanic
Americans(15%),andNativeAmericans(19%)aredeniedmortgagesathigherratesthan
nonHispanicwhites(10%).Thereisalsoevidencesuggestingthatminoritiesaregenerallymore
likelytohavesubprimeloansthannonHispanicwhites.
Quantitativeinformationaboutbusinesscredit.Businesscreditisalsoanimportant
sourceoffundsforsmallbusinesses.Anyraceorgenderbasedbarriersintheapplicationor
approvalprocessesofbusinessloanscouldaffecttheformationandsuccessofMBE/WBEs.To
examinetheeffectofrace/ethnicityandgenderinbusinesscapitalmarkets,thestudyteam
analyzeddatafromtheFederalReserveBoards1998and2003SurveyofSmallBusiness
Finances(SSBF).
6
BecauseSSBFrecordsthegeographiclocationoffirmsbyCensusDivision,
notbystate,BBCexamineddataforthePacificCensusDivision,whichincludesCalifornia,
Alaska,Washington,Oregon,andHawaii.
Businessloanapprovalrates.BBCdevelopedregressionmodelsofbusinessloanapprovals
basedonSSBFdatatoexamineoutcomesforMBEsandfemaleownedbusinessesafter
statisticallycontrollingforraceandgenderneutralfactors.
TheresultsfromthemodelindicatedthatAfricanAmericanandHispanicAmericanowned
businessesinthePacificCensusDivisionweresignificantlylesslikelythannonHispanic
whiteownedbusinessestobeapprovedforbusinessloans.
Femaleownedbusinesseswerenolesslikelythanmaleownedbusinessestobeapproved
forbusinessloans,regardlessofrace/ethnicity.
6
Datafromthe2003SSBFwerethemostcurrentSSBFdataavailableatthetimeofthisstudy.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE10

=
ForAfricanAmericanandHispanicownedbusiness,Figure34presentsactualbusinessloan
approvalratesandsimulatedloanapprovalrates(i.e.,benchmark)ifthosegroupswere
approvedforbusinessloansatthesamerateasnonHispanicswhitemaleownedbusinesses
whosharethesamebusinesscharacteristics.Thestudyteamcalculatedaloanapproval
disparityindexforeachgroupbydividingtheobservedloanapprovalratebythebenchmark
loanapprovalrateandthenmultiplyingtheresultby100.Valueslessthan100indicatethat,in
reality,thegroupislesslikelytobeapprovedforabusinessloanthanwhatwouldbeexpected
fornonHispanicwhitemaleownedbusinessesthatsharethesamebusinesscharacteristics.
Figure34.
Comparisonofactualloanapprovalratestosimulatedrates(benchmark)
inCalifornia,1998
Loanapprovalrates Disparityindex
Group Actual Benchmark (100 parity)
AfricanAmerican 46.4% 76.8% 60
HispanicAmerican 53.7% 75.9% 71
Source: BBCResearch&Consultinganalysisof1998NSSBFdata.
AsshowninFigure34,AfricanAmericanandHispanicownedbusinessesinthePacificCensus
Divisionareapprovedforbusinessloansatratesthataresubstantiallylowerthanthoseofnon
Hispanicwhitemaleownedbusinessesthatsharethesamebusinesscharacteristics.African
Americanownedbusinessesareapprovedforloansat60percentoftheratethatwouldbe
expectedfornonHispanicwhiteownedbusinessesthatsharethesamecharacteristics.Similar
tothatresult,HispanicAmericanownedbusinessesareapprovedforloansatapproximately70
percentoftheratethatwouldbeexpectedfornonHispanicwhitemaleownedbusinessesthat
sharethesamecharacteristics.
Loanvaluesandinterestrates.BBCalsoexaminedtheaveragebusinessloanvaluesfor
businessesthatreceivedloans.Datafromthe2003SSBFindicatedthatMBEsandfemaleowned
businessesinthePacificCensusDivisionreceivedbusinessloansthatwereworth,onaverage,
lessthantwothirdsoftheloansthatmajorityownedbusinessesreceived($289,000versus
$456,000).Inaddition,MBEsandfemaleownedbusinessesinthePacificCensusDivision
receivedbusinessloansthathad,onaverage,higherinterestratesthanloansthatmajority
ownedbusinessesreceived(8.5%versus6.9%).
ExperiencesofMBEs,WBEsandmajorityownedfirmsobtaininglinesofcreditandbusiness
loans.AtthecloseoftheavailabilityinterviewsconductedaspartoftheCaltransdisparitystudy,
BBCasked,Finally,wereinterestedinwhetheryourcompanyhasexperiencedbarriersor
difficultiesassociatedwithstartingorexpandingabusinessinyourindustryorwithobtaining
work.ThinkaboutyourexperiencesinCaliforniawithinthepastfiveyearsasweaskyouthese
questions.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE11

Foreachpotentialbarrier,thestudyteamexaminedwhethertheshareoffirmsthatindicated
thattheyhadexperiencedthatspecificbarrierordifficultydifferedbetweenMBEs,WBEsand
majorityownedfirms.Thestudyteamalsoexaminedifaffirmativeresponsesdifferedfor
youngerfirms(thosethatweresevenyearsoldoryounger).
7
Thefirstquestionwas,Hasyourcompanyexperiencedanydifficultiesinobtaininglinesof
creditorloans?AsshowninFigure35,ofallfirms,36percentofMBEsand27percentofWBEs
reporteddifficultiesobtaininglinesofcreditorloans.Fewermajorityownedfirms(19%)
reportedthattheyhadexperienceddifficultiesobtaininglinesofcreditorloans.
Alargershareofyoungfirmsreportedthattheyhadexperienceddifficultiesobtaininglinesof
creditorloanscomparedtoallfirms.Amongyoungfirms,alargerpercentageofminorityand
womenownedbusinessesreportedthisdifficultlycomparedwithmajorityownedfirms.
Figure35.
Hasyourcompany
MBE
(n=779)
36%
All Firms
experiencedany
difficultiesin
obtaininglinesof
WBE
(n=425)
creditorloans?
Majority-owned
(n=2,337)
Source:
27%
19%
BBCResearch&Consulting
Young Firms
from2012Availability
MBE
Interviews.
(n=206)
WBE
(n=66)
Majority-owned
(n=317)
44%
38%
28%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Attheendoftheavailabilityinterviews,respondentswereofferedtheopportunitytogive
furtherinsightsonstartingandexpandingabusinessintheirindustryorwinningworkin
California.Anumberoffirmownersrespondedbydescribingtheirdifficultiesobtainingneeded
capital.
Quantitativeinformationaboutbondingandinsurance.Toresearchwhetherbonding
representedabarrierforCaliforniabusinesses,BBCaskedfirmscompletingavailability
interviews:
Hasyourcompanyobtainedortriedtoobtainabondforaproject?
[andifso]Hasyourcompanyhadanydifficultiesobtainingbondsneededfora
project?
7
Firmsinbusinesssevenyearsorlesscompriseaboutonefifthofallcompaniesinthe2012availabilitysurveydatabasefor
theCaliforniatransportationcontractingindustry;resultsarenotedasyoungfirmsintheassociatedgraphs.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE12

Figure36presentstheseresultsfromtheavailabilityinterviews.Amongfirmsreportingthat
theyhadobtainedortriedtoobtainabond,28percentofMBEsindicateddifficultiesobtaining
bondsneededforaproject.AsmallershareofWBEs(20%)andmajorityownedfirms(16%)
reporteddifficultiesobtainingthebondingneededforaproject.
Amongyoungfirms,alargershareofMBEsthanmajorityownedfirmsreporteddifficulties
obtainingthebondingneededforaproject.Thiswasnotfoundforyoungfirmsthatwerewhite
womenowned,althoughthenumberofyoungfirmWBErespondentslimitsinterpretationof
resultsforthisgroup.
Figure36.
MBE All Firms
28%
Hasyourcompany (n=250)
hadanydifficulties
obtainingbonds WBE
(n=137)
neededfora
project?
Majority-owned
(n=688)
Source:
BBCResearch&Consultingfrom
20%
16%
2011AvailabilityInterviews.
Young Firms
MBE
(n=56)
34%
WBE
(n=19)
11%
Majority-owned
(n=68)
25%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
BBCalsoexaminedwhetherminorityandwomenownedfirmsweremorelikelythanmajority
ownedfirmswithinthestudyareatoreportthatinsurancerequirementsrepresentedabarrier
tobidding.Figure37presentstheseresults.OnequarterofMBEsinterviewedreportedsuch
difficulties.FewerWBEs(21%)andmajorityownedfirms(17%)indicatedthatinsurance
requirementspresentedabarriertobiddingonprojects.
YoungMBEsweremorelikelythanotheryoungfirmstoindicatethatinsurancerequirementson
aprojectpresentedabarriertobidding.YoungWBEswerelesslikelytoidentifyinsurance
requirementsasabarrier.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE13

Figure37.
Haveanyinsurance
requirementson
projectspresented
abarriertobidding?
Source:
BBCResearch&Consulting
from2011Availability
Interviews.
Qualitativeinformationaboutaccesstocapital.BBCcollectedqualitativeinformation
aboutaccesstocapitalforfirmsintheCaliforniatransportationcontractingindustrythroughin
depthinterviews,availabilityinterviewsconductedbytelephone,stakeholdergroupdiscussions
andpublichearings.
Manyofthefirmsinterviewedindicatedthataccesstofinancingwasabarrierfor
smallbusinessesingeneral,especiallywhenstartingandfirstgrowing.Anumberof
businessownersandmanagersobservedthatbarrierstofinancinghadworsenedin
therecenteconomicdownturn.
Thewhitefemaleownerofanengineeringcompanysaidthatcapitalaffectsthe
abilityofabusinesstobesuccessful.Availablecapitaldoesaffectbusinesses,
becauseasyoustarttogrow,asyoustarttogetcontracts,itrequiresmore
resourcestobeabletodeliverthatwork,shesaid.
Thecoownerofaconstructionfirmsaid,Thebanksarereallytoughrightnow.
Ivebeentalkingtomybankerandhesaidmostofthecontractorsheworks
withhavelosttheirlineofcredit.
Thetechnicaldirectorofawhitewomanownedengineeringfirmsaid,Ithink
rightnowthebarrier[associatedwithfinancing]isuniversal.Inthecurrent
economytheyveraisedthebaronqualifications.Itsalmostlikeyouhaveto
havethemoneyinorderforthemtoapproveyou.Itsverydifficult.Weve
actuallynotbeenabletogetanyfundinginthelastyear.Wevehadtodoour
fundingthroughcreditcards.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE14

Intervieweeshaddifferentopinionsonwhetherraceorgenderaffectedaccesstofinancing.
Manyintervieweesindicatedthatfinancingisabarrierforallsmallbusinesses,
regardlessofraceorgender.Forexample,oneinterviewee,representinganAsian
Americanmaleownedfirm,explainedthatcreditisextremelytightinthecurrent
marketandparticularlysoforsmallfirmsthatarenotwellestablished.Regarding
creditforsmallfirms,heaskedrhetorically,IfIamabank,wouldIloanmoneyto
[someone]withnoexperience?
Someintervieweesidentifiedfinancingasaparticularproblemforminoritiesand
womeninthepastbutthataccesshadimproved,sometimesthroughgovernment
programs.
Forexample,theHispanicAmericanownerofahighwaycontractingDBEsaid
thathewasawareofahistoryofdiscriminationagainstminoritiesregarding
banking.IsawthatwithmyDadsbusinessinthelate70s,butIhaventseenit
sinceIvebeeninbusiness
AnintervieweerepresentinganAfricanAmericanmaleownedfirmstatedthat
hisraceaffectedhisfirmsabilitytogetfinancingandbondingalongtimeago,
butthatnowithasopenedupsothathedoesnothaveanyproblems.Hefeels
thatthechangeoccurredgraduallyovertime.
AfewminorityandwomenintervieweesreportedthattheirMBE/WBEstatus
helpedthemobtainloansorqualifyforbonds.Forexample,oneinterviewee,
representingaHispanicmaleownedfirm,statedthathisfirmwouldnthave
beenabletogetcreditatallwithouttheDBEprogram.
Someintervieweesreportedthatraceorgenderdiscriminationaffectedaccessto
capital.
Asanexample,aHispanicAmericancontractorrepresentingtheHispanic
ContractorsandSuppliersAssociationsaidthatminoritiesdonthavethesame
wealthasnonminorities,whichhaslastingimpactsonwhoisabletostarta
businessandthesuccessofthosebusinesses.Healsosaidthatbankingdecisions
mighttakeintoaccountraceandethnicity,andthatminoritiescouldsuffer
becauseofdiscriminationinlendingdecisions.
Anintervieweerepresentingafemaleownedconstructionbusinessstated,I
thinkminoritiesandwomenhaveamuchhardertimegettingcapital,getting
bondingandgettinginsurancewomenarestillaskedtohavetheirhusbands
signatthebank,whichfloorsmeafter33years[inbusiness].
TheHispanicfemalepartnerinanoncertifiedconsultingfirmreportedthat
minoritiesandwomenareadverselyaffectedwhenattemptingtoobtain
financing.Shesaidthatshecouldnothaveobtainedfinancingifherpartnerwas
notwhite.Shestatedthatwhensheattemptedtoobtainfinancingforherfirm
shewasunsuccessfulwhileherwhitepartnerwasabletoaccessfinancing.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE15

Qualitativeinformationaboutaccesstobondingandinsurance.BBCalsocollected
qualitativeinformationaboutaccesstobondingandinsuranceintheCaliforniaconstructionand
engineeringindustries.Manyparticipantsindicateddifficultiesaccessingbondingandinsurance.
BondingandinsurancerequirementsatCaltransandotherpublicagenciescanpresentabarrier
tofirmspotentiallybiddingoncontracts.
Someintervieweesreportedthatbondingandinsurancerequirementsinthepublic
sectordissuadesomefirmsfrompursuingpublicsectorworkatleastasprime
contractors.Forexample,anintervieweerepresentingawhitemaleownedfirm
statedthatallpublicsectorworkrequiresbondscontractorscannotworkon
publicprojectswithoutobtainingasignificantbond.Hewentontosaythatifprime
contractorsdonotcarryMBE/WBEsubcontractorsundertheirbonds,itbecomesa
majorissueforthosesubcontractors.
Oneconstructionfirmownersaidthatheprefersworkingintheprivatesector
becausebondinghasbecomeverystringentrightnow,andtheresnotasbigof[a]
bondingrequirementintheprivatesector.
Someintervieweesperceivedraceandgenderdiscriminationrelatedtobonding.
AprojectmanagerofaWBEcertifiedconstructionfirmstatedthatthereis
discriminationinobtainingfinancing,bonding,materialsandsuppliesandother
productsorservices.Hesaid,Itsallaperceivedriskthing.Theydontreallylook
atthebusiness.TheyseeMBEorWBE,andtheressomepreconceivedthingthat
theyresmallandineffective,thattheyreonlytheretosatisfysomeonescheck
box.
Thefemaleownerofastripingfirmsaid,Thereisdiscriminationinbonding,becausethey
dontthink,becauseyoureawoman,thatyoucandothework,ortheymakeyoustep
throughextrahoopsforthat.
ArepresentativeofaDBEcertifiedfirmsaidaboutbonding,Itsasubtlestformof
discriminationthatIveeverruninto.Thetaskorderscouldbeonly$25,000,$30,000,and
weprovidedperformanceandpaymentsfundsforthosethings,andthecontractorsovera
twoorthreeyearperiod,butguesswhattheyaskustobond?Theyaskustobidtheline
items.Wedonthavethatkindofbondingcapacity.Soweareexcludedfrombiddingthe
project.Itsthesubtlestformofdiscrimination,butitsthere,andthis[Caltrans]
departmentherethisDBEdepartmenthasntgottenanycontroloverthecontracts
department.
Someindividualsexplainedthelinkagebetweenaccesstocapitalandtheabilitytoobtaina
bond.Eveniftherewerenoovertdiscriminationbybondingcompanies,bondingrequirements
couldstillhaveadisproportionatenegativeeffectonminorityandwomenownedbusiness
becauseofthelinkbetweenpossibleinitialundercapitalizationofMBE/WBEsandbarriersin
accessingbusinesscapitalwiththeabilityofMBE/WBEstoobtainbonds.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE16

Whentalkingaboutgettingbonding,theHispanicAmericanownerofaDBEcertified
highwaycontractingfirm,saidthatthediscrimination[bybondingcompanies]isbasedon
howcreditworthyyouare.Thenoncreditworthydontgetbonding,thecreditworthyget
bonding.Idontthinktheylookatallatwhatyouareraceorgender.
However,anotherintervieweesaidthataccesstobondingisaffectedbyfirmcapitalization,
whichmaybelowerforminorityandwomenownedfirms.Whenaskedifcapitalizationof
thefirmwasimportantintheconstructionindustry,afemalebusinessownerand
representativeoftheSouthernCaliforniaContractorsAssociation,said,Itis,nodoubt
andespeciallybecauseofthebondingrequirements.Thatsoneofthehurdlesanycompany
hastoface.Sheadded,Capitalization,especiallyforcompanythatisjuststartingout,is
key.Theresnogettingaroundit.Shecontinuedthatwhetherornotyouqualifyfor
bondingisallbasedonthosenumbers.
ArepresentativeofAssociatedProfessionalsandContractorsofCaliforniaexplainedthe
linkagebetweenequityinahome,capitalinabusiness,andthebusinessassetsthata
bondingcompanywouldconsider.Hesaidthatbondingcompaniesdonotlookatequityin
ahome,butthatbusinessownerscanborrowbasedonhomeequityandputthatcashin
thebusiness,whichisexaminedbyabondingcompany.(Asdiscussedpreviouslyinthis
Chapter,BBCidentifiedevidenceofdisparitiesinhomeequityandhomelendingin
CaliforniaforcertainMBE/WBEgroups.)
Someconstructionbusinessownerswhoprimarilyworkassubcontractorssaidthatprimes
oftenrequirethemtoprovidebondingforpublicsectorprojects.Somesubcontractorssaidthat
certainprimeswillletthemworkwithoutprovidingbonds.TheHispanicAmericanownerofa
DBEcertifiedhighwaycontractingfirmsaiditdependsontherelationshipwiththeprime
contractor.Theyeitherfeelcomfortablewiththatortheydont.Theyrequireitfromusorthey
dont.
Anumberofengineeringrelatedfirmsandsomeconstructionfirmssaidthatinsurance
requirementsarebarrierstodoingbusiness,especiallyonpublicsectorwork.Forexample,the
whitefemaleownerofanengineeringbusinesssaid,Insuranceforasmallfirmisexpensive.If
thereareissues,bigfirmshaveabigadvantage.Totheextentthatminorityandwomenowned
firmstendtobesmallfirms,insurancerequirementsmayhaveadisproportionatenegative
effectonMBE/WBEs.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE17

Effectsofaccesstocapital,bonding,andinsurance.Thedisadvantagesforcertain
groupsassociatedwithaccesstocapital,bonding,andinsurancemayaffectvariousbusiness
outcomesforMBE/WBEs.
Thereissomequantitativeandqualitativeevidenceindicatingthatitismoredifficultfor
minorities,women,andMBE/WBEsthanitisfornonHispanicwhites,males,andmajority
ownedbusinessestoobtaincapital,bonding,andinsurance,orthatbarrierstoaccess
capital,bondingandinsurancedisproportionatelyaffectMBEsandWBEs.Suchdifficulties
mayreducetherelativenumberofMBE/WBEsthatform,surviveandgrow,whichwould
reduceoverallMBE/WBEavailabilityintheCaliforniatransportationcontractingindustry.
Inaddition,accesstocapital,bonding,andinsuranceareoftenrequiredforbusinessesto
pursuecertaintypesofpublicsectorcontracts,limitingaccesstoCaltransandlocalagency
transportationcontracts.
D.SuccessofBusinesses
BBCcompletedquantitativeandqualitativeanalysesthatassessedwhetherthesuccessof
MBE/WBEsdiffersfromthatofmajorityownedbusinessesintheCaliforniatransportation
contractingindustry.Thestudyteamexaminedbusinesssuccessintermsofparticipationin
publicandprivatesector,relativebidcapacity,businessclosure,expansion,andcontraction;and
businessreceiptsandearnings.AppendixHprovidesdetailsaboutBBCsquantitativeanalysesof
successofbusinesses.BBCalsocollectedandanalyzedinformationfrominterviewswith
businessowners,managersandothersknowledgeableabouttheindustry.
Quantitativeanalysisofparticipationinpublicandprivatesectors.BBCdrewon
informationthatthestudyteamcollectedinthe2012availabilityinterviewscompletedwith
firmsintheCaliforniatransportationcontractingindustrytoexamineanypatternsofMBE/WBE
andmajorityownedfirmparticipationintheindustry.
Therewassomeindicationfromthesedatathatminorityownedconstructionfirmswereless
likelytohavebidonpublicsectorcontracts(asaprimecontractororasubcontractor)than
majorityownedfirms.Theseresultssuggestthatbarrierstopublicsectorworkmayhavea
greaterimpactonminorityownedconstructionfirmsthanotherfirms.AppendixHprovides
detailedresultsfromthisanalysis.
Quantitativeanalysisofbidcapacity.Inthisdisparitystudy,bidcapacityforafirmrefers
tothelargestcontractorsubcontractthefirmbidonorperformedinCaliforniawithinthefive
yearsprecedingthetimewhenBBCinterviewedthefirm.BBCcollectedbidcapacityinformation
fromfirmsaspartofthe2012availabilityinterviewswithbusinessownersandmanagers.
AvailabilityinterviewdatashowthatMBEsandWBEs,ingeneral,havelowerbidcapacitythan
majorityownedbusinessesinthetransportationcontractingindustry.Furtheranalyses
indicatedthatfirmspecializationwithintheindustryandlengthoftimeinbusinessexplained
thesedifferences.Inotherwords,therewasnoindicationthatMBEsorWBEshavelowerbid
capacitythanmajorityownedfirmsinthesameindustryspecializationwiththesamelengthof
timeinbusiness.(SeeAppendixHfordetailedanalyses.)
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE18

Quantitativeanalysisofbusinessclosures,expansions,andcontractions.A2010SBA
reportinvestigatedbusinessdynamicsandwhetherminorityownedcompaniesweremore
likelytoclosethanotherfirms.Thisreportincludedanalysisofbusinessclosures,contractions,
andexpansionsinCaliforniabetween2002and2006.
8
DatawereavailableforAfricanAmerican
ownedbusinesses,HispanicAmericanownedbusinesses,AsianAmericanownedbusinesses,
andnonHispanicwhiteownedbusinesses.
OnekeyresultfromanalysisofthesedataisthatAfricanAmericanownedbusinessesin
Californiaclosedatahigherrate(42%)thannonHispanicwhiteownedbusinesses(31%)
between2002and2006(seeAppendixH).
BBCalsoanalyzedtherelativenumberofMBE/WBEsintheCaliforniacontractingindustryin
basedonthe2012availabilityinterviewsandtheavailabilityinterviewedconductedaspartof
the2007Caltransdisparitystudy.Therewasverylittlechangeinthepercentageoffirmsthat
wereMBE/WBEs(seeChapter4).
Quantitativeanalysisofbusinessreceiptsandearnings.BBCexaminedseveralsources
toanalyzebusinessreceiptsandearningsforfirmsinCalifornia.Resultsaresummarizedbelow.
(AppendixHprovidesdetailedresults.)
Businessreceipts.Analysisofthe2007SurveyofBusinessOwners,partoftheU.S.Census
Bureaus2007EconomicCensus,indicatethataveragereceiptsforminorityandwomenowned
firmswerelowerthanaveragereceiptsforallfirmsinCalifornia.Thesedifferencesinbusiness
receiptsareevidentintheconstructionindustryandintheprofessional,scientific,andtechnical
servicesindustry(whichincludesengineering).
BBCalsoanalyzedrevenuedataforfirmsintheCaliforniatransportationcontractingindustry
collectedaspartofthedisparitystudys2012availabilityinterviews.Keyresultsinclude:
AgreatershareofMBEsandWBEshaveannualrevenueofonly$1millionorlesscompared
withmajorityownedfirms.
Fewminorityandwomenownedfirmsrelativetomajorityownedfirmsreachhigh
revenuelevelsbasedonavailabilityinterviewresults.
Theseandotherdatademonstratethatminorityandwomenownedfirmsaremorelikelytobe
smallbusinessesthanmajorityownedcompanies.
Businessownerearnings.The2000U.S.CensusofPopulationand20072009American
CommunitySurveyprovidedataontheearningsofincorporatedandunincorporatedbusiness
ownersage16andoverwhoreportedpositivebusinessearnings.BBCanalyzedthesedatafor
theconstructionandengineeringindustriesinCaliforniafor1999(thetimeperiodreportedin
the2000Census)andbetween2006and2009(thetimeperiodreportedintheACSdata).
8
Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOfficeof
Advocacy.WashingtonD.C.Thesedatawerethemostrecentbusinessclosure,contractions,andexpansiondataavailablefor
Californiaatthetimeofthedisparitystudy.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE19

IntheCaliforniaconstructionindustry,minorityandfemaleownersofconstructionbusinesses
tendedtoearnlessthannonminoritiesandmen.
IntheCaliforniaengineeringindustry:
AsianAmericanbusinessownershadearningsequaltoorgreaterthannonHispanicwhite
businessowners;
Businessownersforotherminoritygroupscombinedhadlowerearningsthannon
Hispanicwhitebusinessownersofengineeringfirms;and
Femalebusinessownershadlowerearningsthanmalebusinessowners.
BBCperformedregressionanalysesusing20072009ACSdatatoexaminewhethertherewere
differencesin20062009businessearningsbetweenminoritiesandnonHispanicwhitesand
betweenwomenandmenafterstatisticallycontrollingforcertainraceandgenderneutral
factors.
BeingAfricanAmericanandHispanicAmericanwasassociatedwithlowerbusiness
earningsintheCaliforniaconstructionindustryin20062009;and
BeingfemalewasassociatedwithlowerbusinessearningsintheCaliforniaconstruction
andengineeringindustriesin20062009.
AppendixHprovidesdetailedresults.
Availabilityinterviewresultsconcerningbarrierstodoingbusiness.Whenconducting
the2012availabilityinterviewswithfirmsinthetransportationcontractingindustry,BBCasked
firmownersandmanagerswhetherornottheyhadexperiencedcertaintypesofbarriersto
doingbusiness.
MBEsandWBEsweremorelikelythanmajorityownedfirmstoreportthatsizeof
contractswasabarrierfortheirfirm.Whenrestrictingtheanalysistocompaniesthathad
beeninbusinesssevenyearsorless,MBEsweremorelikelythanmajorityandwomen
ownedfirmstoindicatethatsizeofcontractswasabarrier.
MBEsandWBEswerealsomorelikelythanmajorityownedfirmstoindicatethatlearning
ofcontractopportunitieswasabarrierfortheirfirm.Thesedifferenceswereevidentacross
allfirmsandwhenexaminingyoungfirms.
Qualitativeinformationaboutsuccessofbusinesses.BBCalsocollectedqualitative
informationaboutsuccessofbusinessesintheCaliforniaconstructionandengineering
industries.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE20

Disadvantagesforsmallbusinesses.Manyintervieweesindicatedthatsmallbusinessesareata
disadvantagepursuingpublicsectorcontracts,includingCaltranscontracts.Firmownersand
managersidentifiedanumberoffactorsworkingagainstsmallbusinesses,includingthesizeof
Caltransandotherpublicsectorcontracts,bondingandinsurancerequirements,complex
biddingdocuments,certaincontractspecifications,selectioncriteriaforprofessionalservices
contractsandslowpayment.AppendicesJandLreviewthisinformationinconsiderabledetail.
Whenavailabilityinterviewrespondentswereaskedanopenendedquestionaboutdifficulties
startingandexpandingabusinessintheirindustryorwinningworkinCalifornia,manynoted
difficultregulations,largecontracts,excessivepaperworkanddifficultbidprocessesthatmade
itharderforsmallbusinessestobesuccessfulinthemarketplace.
Impactofrecenteconomicdownturn.Manyownersandmanagersoflargeandsmall
businesses,aswellasothersintheindustry,reportedthattherecenteconomicdownturnhas
hadanegativeeffectonallbusinesses,butespeciallysmallbusinesses.
Manyintervieweesindicatedthatcompetitionhasincreasedforpublicsectorworkasfirms
thatpreviouslyreliedonprivatesectorcontractswerenowconcentratingonpublic
projects.
Anumberofbusinessownersandmanagerssaidthatpricecompetitionwasveryintense,
puttingpressureonbusinessesthatwerenotthelowestcost.
Intervieweesreportedthatlargefirmswerecompetingforsmallercontracts,which
negativelyaffectedsmallbusinessesthathadreliedonthistypeofwork.
Intervieweesalsoindicatedthatprimecontractorsweresubcontractinglessworkand
keepingmoreinhouseasawayofmaintainingutilizationoftheirstaffandequipment.A
numberofsubcontractorsreportedthatprimeswereretainingtypesofworkthatthey
wouldhavesubcontractedbeforetheeconomicdownturn.
Someintervieweesindicatedthatitwasverydifficulttostayinbusinessintherecent
economicenvironment,especiallyforsmallbusinesses.
Thesetypesofresponsescamefromindepthpersonalinterviews,telephoneinterviewswith
businessownersandmanagers,stakeholdermeetingsandpublichearings.Forexample,when
giventheopportunitytoprovideopenendedcommentsaboutstartingandexpandingabusiness
intheirindustryorwinningworkinCalifornia,morethan200firmownersandmanagers
participatingintheavailabilityinterviewsmadecommentsrelatedtothedifficultbusiness
climateatpresent.
ImpactofdisadvantagesforsmallbusinessesonMBE/WBEs.Asminorityandwomenowned
firmsaremorelikelythanmajorityownedfirmstobesmallbusinesses,anybarriersforsmall
businessmayhaveadisproportionatenegativeeffectonMBEsandWBEs.Anumberofminority
andfemalebusinessownersindicatedthatthemajorbarrierstheyfaceareduetothesizeof
theirbusiness.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE21

Stereotyping,goodolboynetworkandotherfactorspotentiallyaffectingminority and
womenownedfirms.Intheinterviewsandthepublictestimonyanalyzedaspartofthisstudy,
someintervieweesindicateddifficultiesforminoritiesandwomenbeyondthoseassociatedwith
beingasmallbusiness.Twoofthemostfrequentlymentionedtypesofbarriersrelatedtorace
andgenderwerenegativestereotypesandpresenceofagoodolboynetworkinthelocal
industry.
Someintervieweesindicatedthatprimecontractorsorcustomershaddiscriminated
againstfirmsbasedonrace,ethnicityorgender.Therewassomeevidencethatsomeprime
contractorsorcustomersautomaticallyperceivedminorityandwomenownedfirmsas
inferior.
Someintervieweesreportedthattheyhadspecificexperiencesinwhichtheybelievedthey
weretreateddifferentlythannonHispanicwhitesormen.
Someminorityintervieweesandanumberoffemaleintervieweessaidthatworking
conditionsintheindustryaresometimeshostileforminoritiesandwomen.Harassmentof
womenbypeopleintheindustryisoneexample.
Afewintervieweesexplainedinstancesofwhattheybelievedtobediscriminationby
Caltransstaff.
Thepresenceofagoodolboynetworkaffectingtheconstructionandengineeringindustries
inCaliforniawaswidelyreportedacrossinterviewees.Someoftheintervieweesdiscussingthe
goodolboynetworksaidthatitmadeitmoredifficultforanyonetobreakintothebusiness,
notjustminoritiesandwomen.Someoftheminorityandfemalebusinessownersinterviewed
saidthattheypersonallyhaddifficultydevelopingrelationshipswithlargerprimecontractors,
butiftheyreceivedanopportunitytoperformwork,thosecontractorswerepleasedtousethem
onotherprojects.However,someotherintervieweesmadeitclearthatthegoodolboy
networkhadadiscriminatoryimpactonminorityandwomenownedfirms.Somesaidthatit
directlyaffectedtheirbusinesses.
Viewsastowhetherornotraceandgenderdiscriminationaffectedminorityandwomen
ownedfirmsdidnotclearlyalignaccordingtotherace,ethnicityandgenderoftheinterviewee.
Notallminorityandfemaleintervieweesindicatedthatdiscriminationaffectedthelocal
marketplacetoday,andsomewhitemensaidthatraceandgenderdiscriminationaffectedMBEs
andWBEs.AppendicesJandL,whichcombinedexceed400pagesinlength,presentviewsfrom
abroadrangeofbusinessownersandmanagersandwellasothersknowledgeableaboutthe
Californiatransportationcontractingindustry.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE22

Effectsofsuccessofbusinesses.Thedifferencesthatthestudyteamobservedbetween
MBE/WBEsandmajorityownedbusinessesregardingbusinesssuccessmayaffectbusiness
outcomesforMBE/WBEsintheCaliforniatransportationcontractingindustry.
AnumberofdifferentdatasourcesindicatethatadisproportionatenumberofMBE
andWBEconstructionandengineeringfirmsinCaliforniaaresmallbusinesses
comparedwithmajorityownedfirms.Whetherornotthisisinpartduetooneor
moreformsofraceorgenderdiscrimination,smallbusinesseshaveadditional
barrierstosuccess.Thecurrenteconomicdownturnappearstohavemadeitmore
difficultforsmallbusinessestothriveorevensurvive.Inaddition,opportunitiesfor
subcontractorsappeartobediminishingasprimecontractorsretainmoreofthe
workthattheywouldhavesubcontractedinamorefavorableeconomicclimate.
Statisticalmodelsindicatelowerrevenueforfirmsownedbycertainminority
groupsandbywomeninCaliforniaaftercontrollingforotherfactors.Thereisalso
somequalitativeinformationindicatingraceandgenderdiscriminationagainst
minorityandwomenownedfirmsthatwouldimpedetheirabilitytosucceedin
business.
Combinedwiththeinformationonentryandadvancement,businessownership,andaccessto
capital,bondingandinsurance,thesefactorsmayreducetheexistingavailabilityofMBEsand
WBEsforCaltransandlocalagencytransportationcontractsfromwhatitmightbegivenalevel
playingfieldforminoritiesandwomeninthisindustry.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER3,PAGE23

CHAPTER4.
AvailabilityAnalysis
BBCanalyzedtheavailabilityofMBE/WBEsthatareready,willing,andabletoperformon
Caltransprimecontractsandsubcontracts.Chapter4describesBBCsavailabilityanalysisin
eightparts:
A. Purposeoftheavailabilityanalysis;
B. DefinitionsofMBE,WBEs,certifiedDBEs,potentialDBEs,andmajorityownedbusinesses;
C. Informationcollectedaboutpotentiallyavailablebusinesses;
D. Businessesincludedintheavailabilitydatabase;
E. CalculatingMBE/WBEavailabilityonacontractbycontractbasis;
F. Availabilityresults;
G. CaltransbasefigureforitsoverallDBEgoal;and
H. ImplicationsforanyDBEcontractgoals.
AppendixCprovidessupportinginformation.
A.PurposeoftheAvailabilityAnalysis
BBCexaminedtheavailabilityofMBE/WBEsforCaltransandLocalAssistanceprimecontracts
andsubcontractsfortwoprimaryreasons:
Touseasaninputinthedisparityanalysis;and
TohelpdevelopCaltransbasefigureforitsoverallDBEgoal.
Inputinthedisparityanalysis.BBCsanalysisoftheavailabilityofMBE/WBEsforCaltrans
workprovidedabenchmarkagainstwhichtocompareMBE/WBEutilizationinthedisparity
analysis.Inthedisparityanalysis,BBCcomparedthepercentageofCaltranscontractdollarsthat
wenttoMBE/WBEsduringthestudyperiod(i.e.,utilization)tothepercentageofdollarsthat
mightbeexpectedtogotothosebusinessesbasedontheiravailabilityforspecifictypesand
sizesofCaltranscontracts(i.e.,availability).Comparisonsbetweenutilizationandavailability
allowedthestudyteamtodeterminewhetheranyMBE/WBEgroupswereunderutilizedduring
thestudyperiodrelativetotheiravailabilityforCaltransorsubrecipientlocalagencywork.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE1

CaltransbasefigureforitsoverallDBEgoal.CaltransimplementstheFederalDBE
Program,and,aspartoftheprogram,itmustestablishanoverallannualaspirationalgoalfor
DBEparticipationinitsUSDOTfundedcontracts.Caltransmustbeginthegoalsettingprocess
bycalculatingabasefigurefortheavailabilityofDBEs,whichcanbesimilartodetermining
MBE/WBEavailabilityinadisparityanalysis.
1
However,unlikemeasuringavailability,inwhich
thestudyteamcountedallavailableMBE/WBEs,onlythoseMBE/WBEsthatappearthatthey
wouldqualifyforDBEcertification(i.e.,potentialDBEs)arecountedinthebasefigure
calculation.TheFinalRuleeffectiveFebruary28,2011andUSDOTTipsforGoalSetting
explainthatMBE/WBEsthatarenotcurrentlycertifiedasDBEsbutthatcouldbeDBEcertified
basedonrevenueandpersonalnetworthrequirementsshouldbecountedasDBEsinthebase
figure.However,businessesthathavebeendeniedcertification,havebeendecertified,orappear
thattheywillsoongraduatefromtheDBEProgramshouldnotbecountedasDBEsinthebase
figure.
B.DefinitionsofMBE,WBEs,CertifiedDBEs,PotentialDBEs,andMajority
ownedBusinesses
Tointerprettheavailabilityanalysis,aswellasotheranalysespresentedinthedisparitystudy,
itisusefultounderstandthedifferencesbetweenMBE/WBEsandbusinessesthatarecertified,
orcouldbecertified,asDBEs.Inaddition,itisimportanttounderstandhowBBCtreated
businessesownedbyminoritywomen.
MBE/WBEs.ThedefinitionsthatthestudyteamusesforMBE/WBEgroupsinthisstudyare
consistentwiththedefinitionsspecifiedin49CFRPart26.Thestudyteamexaminedutilization,
availabilityanddisparitiesseparatelyforAfricanAmerican,AsianPacificAmerican,
SubcontinentAsianAmerican,HispanicAmerican,NativeAmericanandwomenowned
businesses.
All MBE/WBEs, not only certified DBEs. Thestudyteamcountedbusinessesasminorityor
womenownedregardlessofwhethertheywere,orcouldbe,certifiedasDBEs.Thestudyteams
analysesindicatedthatmostMBE/WBEsdoingbusinessinCaliforniaarenotcurrentlycertified.
Thestudyteamanalyzedthepossibilitythatraceorgenderbaseddiscriminationaffectedthe
participationofMBE/WBEsinCaltransworkthroughanalysesofavailabilityandutilization
basedontherace/ethnicityandgenderofbusinessownershipandnotonDBEcertification
status.AnalyzingtheavailabilityandutilizationofMBE/WBEsregardlessofDBEcertification
allowsonetoassesswhethertherearedisparitiesaffectingallMBE/WBEsandnotjust
businessesthatareDBEcertified.Businessesmaybediscriminatedagainstbecauseoftherace
orgenderoftheirownersregardlessofwhethertheyhavesuccessfullyappliedforDBE
certification.
Moreover,thestudyteamsanalysesofwhetherMBE/WBEsfacedisadvantagesincludethe
mostsuccessful,highestrevenueMBE/WBEs.AdisparitystudythatfocusesonlyonMBE/WBEs
thatare,orcouldbe,DBEcertifiedwouldimproperlycompareoutcomesforeconomically
disadvantagedbusinesseswithallotherbusinesses,includingbothwhitemaleowned
1
49CFRSection26.45(c).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE2

businessesandrelativelysuccessfulMBE/WBEs.
2
Limitingtheanalysestoagroupofbusinesses
thatonlyincludeslowrevenuebusinesseswouldhaveinappropriatelymadeitmorelikelyfor
thestudyteamtoobservedisparitiesforMBE/WBEgroups.
3
Thecourtsthathavereviewed
disparitystudieshaveacceptedanalysesbasedonrace/ethnicityandgenderofownershipand
notonDBEcertificationstatus.
CertifiedDBEs.CertifiedDBEsarebusinessesthatarecertifiedassuchinCalifornia,which
meansthattheyaresmallbusinessesthat:
Areownedandcontrolledbyoneormoreindividualswhoarepresumedtobebothsocially
andeconomicallydisadvantagedaccordingto49CFRPart26;
4
and
Meetthegrossrevenueandpersonalnetworthrequirementsdescribedin
49CFRPart26.
BecauseimplementationoftheFederalDBEProgramrequiresCaltranstotrackDBEutilization,
BBCreportscertainutilizationdataseparatelyforMBE/WBEsthatareDBEcertified.However,
BBCdoesnotreportavailabilityordisparityresultsseparatelyforMBE/WBEsthatareDBE
certified.
Businessesownedbyminoritywomen.Businessesownedbyminoritywomenpresented
adatacodingchallengeintheavailabilityanalysisaswellasintheutilizationanalysis.BBC
consideredfouroptionsforcodingbusinessesownedbyminoritywomen:
Codingthosebusinessesasbothminorityownedandwomenowned;
Creatinguniquegroupsofminoritywomenownedbusinesses;
Groupingminoritywomenownedbusinesseswithallotherwomenownedbusinesses;and
Groupingminoritywomenownedbusinesseswiththeircorrespondingminoritygroups.
BBCchosenottocodebusinessesasbothwomenownedandminorityownedtoavoidpotential
doublecountingwhenreportingtotalMBE/WBEutilizationandavailability.Creatinggroupsof
minoritywomenownedbusinessesthatweredistinctfromminoritymaleownedbusiness
(e.g.,AfricanAmericanwomenownedbusinessesversusAfricanAmericanmaleowned
businesses)wasalsounworkablebecausesomeminoritygroupshadutilizationandavailability
solowthatfurtherdisaggregationbygendermadeitevenmoredifficulttointerprettheresults.
2
Inaddition,49CFRPart26allowscertificationofwhitemaleownedbusinessesasDBEs.Thus,disparityanalysesbasedon
certifiedDBEswouldnotpurelybeananalysisofdisparitiesbasedonrace/ethnicityandgender.
3
Ananalogoussituationconcernsanalysisofpossiblewagediscrimination.Adisparityanalysisthatwouldcomparewagesof
minorityemployeestowagesofallemployeesshouldincludebothlowandhighwageminoritiesinthestatisticsforminority
employees.Iftheanalysisremovedhighwageminoritiesfromtheanalyses,anycomparisonofwagesbetweenminoritiesand
nonminoritieswouldmorelikelyshowdisparitiesinwagelevels.
4
TheFederalDBEProgramspecifiesthatAfricanAmericans;HispanicAmericans;NativeAmericans;
AsianPacificAmericans;SubcontinentAsianAmericans;womenofanyraceorethnicity;andanyadditionalgroupswhose
membersaredesignatedassociallyandeconomicallydisadvantagedbytheSBAarepresumedtobedisadvantaged.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE3

Afterrejectingthefirsttwooptions,BBCthen
consideredwhethertogroupminoritywomen
ownedbusinesseswithallotherwomenowned
businessesorwiththeircorrespondingminority
groups.BBCchosethelatter(e.g.,groupingAfrican
Americanwomenownedbusinesseswithall
AfricanAmericanownedbusinesses).Thus,WBE
inthisreportreferstoawhitewomenowned
business.Evidenceofdiscriminationagainstwhite
womenownedbusinessesshouldbeconsideredas
evidenceofdiscriminationagainstwomenofany
race/ethnicity.ThestudyteamsdefinitionofWBE
alsogivesCaltransinformationtoanswer
questionsthatoftenarisepertainingtoutilization
ofwhitewomenownedbusinesses,suchas
questionsaboutwhethertheworkthatgoesto
MBE/WBEsdisproportionatelygoestobusinesses
ownedbywhitewomen.
PotentialDBEs.PotentialDBEsareMBE/WBEs
thatareDBEcertifiedorappearthattheycouldbe
DBEcertifiedbasedonrevenuerequirements
describedin49CFRPart26(regardlessofactual
certification).Thestudyteamdidnotcount
businessesthathavebeendecertifiedorappear
thattheywillsoongraduatefromtheDBEProgram
aspotentialDBEsinthisstudy.BBCexaminedthe
availabilityofpotentialDBEsaspartofhelping
CaltranscalculatethebasefigureofitsoverallDBE
goal.Figure41providesfurtherexplanationof
BBCsdefinitionofpotentialDBEs.
Majorityownedbusinesses.Majorityowned
businessesarebusinessesthatarenotownedby
minoritiesorwomen(i.e.,businessesownedby
whitemales).Intheutilizationanalysisand
availabilityanalysis,thestudyteamcodedeach
businessasminority,women,ormajorityowned.
Majorityownedbusinessesincludedanywhite
maleownedbusinessescertifiedasDBEs.
5
Figure41.
DefinitionofpotentialDBEs
TohelpCaltranscalculateitsoverallDBEgoal,
BBCdidnotincludethefollowingtypesofnon
DBEcertifiedMBE/WBEsinitsdefinitionof
potentialDBEs:
MBE/WBEsthathadgraduatedfromtheDBE
Programandnotbeenrecertified;
MBE/WBEsthatarenotcurrentlyDBE
certifiedthathadappliedforcertificationwith
theStateofCaliforniaandhadbeendenied;
and
MBE/WBEsthatarenotcurrentlyDBE
certifiedthatappearedtohaveaverage
annualrevenuesoverthemostrecentthree
yearssohighastoprecludethemfrom
becomingDBEcertified.
Atthetimeofthisstudy,theoverallrevenuelimit
forDBEcertificationwas$22,410,000basedona
threeyearaverageofgrossreceipts.Therewere
alsolowerrevenuelimitsforspecific
subindustriesaccordingtoSBAsmallbusinesssize
standards.OnlyafewMBE/WBEsappearedto
haveexceededthoserevenuelimitsbasedon
informationthattheyprovidedaspartof
availabilityinterviews.Therevenuecategories
usedtoclassifyfirmswerefinerthanthoseused
inthe2007AvailabilityandDisparityStudyfor
CaltransandreflectrecentchangestotheTable
ofSmallBusinessSizeStandardspublishedbythe
U.S.SmallBusinessAdministration(SBA).
BusinessownersmustalsomeetUSDOTpersonal
networthlimitsfortheirbusinessestoqualifyfor
DBEcertification.Thepersonalnetworthof
businessownerswasnotavailableaspartofthis
studyandthuswasnotconsideredwhen
determiningpotentialDBEstatus.
5
TherewerenoDBEcertifiedwhitemaleownedbusinessesthatwereutilizedonorpotentiallyavailableforCaltrans
transportationcontracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE4

Allotherbusinesses.Thestudyteamcategorizedallbusinessesthatwerenotpotential
DBEsasallotherbusinessesinthebasefigureanalysis.Allotherbusinessesincludedall
MBE/WBEsthatwerenotcurrentlyDBEcertifiedandthat:
HadgraduatedfromtheDBEProgram.
HadbeendeniedDBEcertification;or
AppearedtobetoolargeforDBEcertificationbasedonrevenuesizestandardsin2012.
AllotherbusinessesalsoincludedmajorityownedbusinessesthatwerenotDBEcertified,
whichwasallmajorityownedbusinesses.
C.InformationCollectedabout
PotentiallyAvailableBusinesses
BBCsavailabilityanalysisfocusedonspecificareas
ofwork(i.e.,subindustries)relatedtothetypesof
transportationrelatedconstructionandengineering
contractsthatCaltransawardedduringthestudy
period.BBCidentifiedspecificsubindustriesfor
inclusionintheavailabilityanalysisandidentified
thegeographicmarketareasinwhichCaltrans
awardedmostofthecorrespondingcontractdollars
(i.e.,therelevantgeographicmarketarea).BBC
consideredthestateofCaliforniaastherelevant
geographicmarketareaforthestudy.Thestudy
teamthendevelopedadatabaseofpotentially
availablebusinessesthroughinterviewswithlocal
businessestablishmentswithinrelevant
subindustries.Thismethodofexaminingavailability
issometimesreferredtoasacustomcensus,and
hasbeenacceptedinfederalcourt.Figure42
summarizescharacteristicsofBBCscustomcensus
approachtoexaminingavailability.
Figure42.
SummaryofthestrengthsofBBCs
customcensusapproach
Federalcourtshavereviewedandupheld
customcensusapproachestoexamining
availability.Comparedwithsomeother
previouscourtreviewedcustomcensus
approaches,BBCaddedseverallayersof
screeningtodeterminewhichbusinessesare
potentiallyavailableforworkinthe
transportationcontractingindustry.
Forexample,theBBCanalysisincluded
discussionswithbusinessesaboutinterestin
stateandlocalgovernmentwork,contract
role,andgeographiclocationsoftheirwork
itemsnotincludedinsomeoftheprevious
courtreviewedcustomcensusapproaches.
BBCalsoanalyzedthesizesofcontractsand
subcontractsonwhichbusinesseshavebidor
performedinthepast.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE5

Overviewofavailabilityinterviews.BBCconductedtelephoneinterviewswithbusiness
ownersandmanagerstoidentifybusinessesthatarepotentiallyavailableforCaltransandlocal
agencytransportationrelatedconstructionandengineeringprimecontractsandsubcontracts.
6
BBCbegantheinterviewprocessbycollectinginformationaboutbusinessestablishmentsfrom
D&BMarketplacelistings.
7
BBCcollectedinformationaboutallbusinessestablishmentslisted
under8digitsubindustryspecializationcodes(asdevelopedbyD&B)thatweremostrelatedto
thetransportationrelatedconstructionandengineeringcontractsthatCaltransawardedduring
thestudyperiod.D&Bprovided46,196businesslistingsrelatedtothoseworkspecialization
codes.
Informationcollectedinavailabilityinterviews.BBCworkedwithCustomerResearch
International(CRI)toconducttelephoneinterviewswiththeownersormanagersofthe
identifiedbusinessestablishments.Interviewquestionscoveredmanytopicsabouteach
organization,including:
Statusasaprivatebusiness(asopposedtoapublicagencyornotforprofitorganization);
Statusasasubsidiaryorbranchofanothercompany;
Primarylineofwork;
Qualificationsandinterestinperformingtransportationrelatedworkforstateandlocal
governmentagencies;
Qualificationsandinterestinperformingtransportationrelatedworkasaprime
contractororasasubcontractor;
AbilitytoworkinspecificgeographicregionsofCalifornia;
Largestprimecontractorsubcontractbidonorperformedinthepreviousfiveyears;
Yearofestablishment;and
Race/ethnicityandgenderofownership.
AppendixCprovidesanexampleoftheavailabilityinterviewinstrumentanddetailsabout
specificinterviewquestions.
6
Thestudyteamalsoofferedbusinessrepresentativestheoptionofansweringinterviewquestionsviafaxoremailifthey
preferrednottocompleteinterviewsviatelephone.
7
D&BMarketplaceisacceptedasthemostcomprehensiveandcompletesourceofbusinesslistingsinthenation.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE6

Consideringbusinessesaspotentiallyavailable.CRIaskedbusinessesthatthey
successfullycontactedseveralquestionsconcerningthetypesofworkthattheyperformed,
theirpastbiddinghistory,andtheirqualificationsandinterestincontractsforstateandlocal
governmentagencies,amongotherinformation.BBCconsideredbusinessestobepotentially
availableforCaltransconstructionorengineeringprimecontractsorsubcontractsifthey
reportedpossessingallofthefollowingcharacteristics:
a. Beingaprivatebusiness(asopposedtoanonprofitorganization);
b. HavingperformedworkrelevanttoCaltranstransportationcontracting;
c. Havingbidonorperformedtransportationrelatedpublicorprivatesectorprimecontracts
orsubcontractsinCaliforniainthepastfiveyears;and
d. Beingqualifiedforandinterestedinworkforstateorlocalgovernments.
8
BBCalsoconsideredthefollowinginformationtodetermineifbusinesseswerepotentially
availableforspecificcontractsthatCaltransawardedduringthestudyperiod:
e. TheabilitytoworkinspecificregionsofCalifornia;
f. Thelargestcontractbidonorperformedinthepast;and
g. Theyearthebusinesswasestablished.
D.BusinessesIncludedintheAvailabilityDatabase
AfterconductingavailabilityinterviewswiththousandsofCaliforniabusinesses,thestudyteam
developedadatabaseofinformationaboutbusinessesthatarepotentiallyavailableforCaltrans
transportationcontractingwork.Thestudyteamusedtheavailabilitydatabasetoproduce
availabilitybenchmarksfor:
DeterminingwhethertherewereanydisparitiesinCaltransutilizationofMBE/WBEs
duringthestudyperiod;and
HelpingCaltranscalculateabasefigureforitsoverallDBEgoal.
DatafromtheavailabilityinterviewsallowedBBCtodeveloparepresentativedepictionof
businessesthatarequalifiedandinterestedinCaltranswork,butitshouldnotbeconsideredan
exhaustivelistofeveryMBE/WBEandmajorityownedbusinessthatcouldpossibleparticipate
inCaltransconstructionandengineeringprimecontractsorsubcontracts.AppendixCprovides
adetaileddiscussionaboutwhythedatabaseshouldnotbeconsideredasanexhaustivelistof
potentiallyavailablebusinesses.
Figure43presentsthenumberofbusinessesthatthestudyteamincludedintheavailability
databaseaswellasinformationabouttherace/ethnicityandgenderofthosebusinesses
ownerships.TheinformationinFigure43solelyreflectsasimplecountoffirmswithno
analysisofavailabilityforspecificCaltranscontracts.Thus,itrepresentsonlyafirststeptoward
analyzingtheavailabilityofMBE/WBEsinperformingonCaltranswork.
8
Thatinformationwasgatheredseparatelyforprimecontractandsubcontractwork.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE7

Figure43.
Numberofbusinessesincluded
intheavailabilitydatabase
Source:
BBCResearch&Consultingavailabilityanalysis.
Race/ethnicityandgender
Number
offirms
Percent
offirms
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
TotalMBE
WBE(whitewomenowned)
TotalMBE/WBE
Totalmajorityownedfirms
Totalfirms
74
142
46
384
55
701
416
1,117
2,260
3,377
2.2 %
4.2
1.4
11.4
1.6
20.8 %
12.3
33.1 %
66.9
100.0 %
AsshowninFigure43,thestudyteamconsidered3,377businessestobepotentiallyavailable
forspecificconstructionandengineeringcontractsthatCaltransawardedduringthestudy
period.Ofthosebusinesses,1,117(33%)wereMBEsorWBEs.TheproportionofMBEsand
WBEsisverysimilartotheproportionofMBEsandWBEsreportedinthe2007Availabilityand
DisparityStudy(32%).
E.CalculatingMBE/WBEAvailabilityonaContractbyContractBasis
BBCanalyzedinformationfromtheavailabilitydatabasetodevelopdollarweightedavailability
estimatesforuseinthedisparityanalysisandinhelpingCaltranssetitsoverallDBEgoal.Dollar
weightedavailabilityestimatesrepresentthepercentageofCaltranstransportationcontracting
dollarsthatmightgotoMBE/WBEsbasedontheiravailabilityforspecifictypesandsizesof
CaltransandLocalAssistanceconstructionandengineeringprimecontractsandsubcontracts.
BBCsapproachtocalculatingavailabilitywasabottomup,contractbycontractmatching
approachthatmeasuredavailabilityoverallandseparatelyforparticularsetsofprimecontracts
andsubcontracts.
Stepstocalculatingavailability.Onlyasubsetofthebusinessesintheavailabilitydatabase
wasconsideredpotentiallyavailableforanygivenCaltransorLocalAssistanceconstructionor
engineeringprimecontractorsubcontract(referredtomoregenerallyasacontractelement).
BBCfirstexaminedthecharacteristicsofthespecificcontractelement,includingtypeofwork,
locationofwork,contractsize,andcontractdate.BBCthenidentifiedbusinessesinthe
availabilitydatabasethatperformworkofthattype,inthatlocation,ofthatsize,andinthatrole
(i.e.,primecontractororsubcontractor),andthatwereinbusinessintheyearthatCaltransor
theassociatedlocalagencyawardedthecontractelement.
9
BBCdeterminedthespecificcharacteristicsofeachofthe15,446CaltransandLocalAssistance
primecontractsandsubcontractsthatthestudyteamexaminedaspartofthedisparitystudy
andthentookthefollowingstepstocalculateavailabilityforeachcontractelement:
9
Notethatprimecontractors,notCaltransorlocalagencies,awardsubcontractstosubcontractors.Tosimplifythe
discussion,Caltransandlocalagencyawardofcontractelementsisusedhereandthroughoutthereport.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE8

1. Foreachcontractelement,thestudyteamidentifiedbusinessesintheavailabilitydatabase
thatreportedthatthey:
Arequalifiedandinterestedinperformingtransportationrelatedcontractsin
thatparticularroleforthatspecifictypeofwork,forlocalgovernments;
Areabletoservecustomersinthatgeographiclocation;
Havebidonorperformedworkofthatsize;and
WereinbusinessintheyearthatCaltransawardedthecontractelement.
2. ThestudyteamthencountedthenumberofMBEs(byrace/ethnicity),WBEs,andmajority
ownedbusinessesamongallbusinessesintheavailabilitydatabasethatmetthecriteria
specifiedinStep1.
3. Thestudyteamtranslatedthenumericavailabilityofbusinessesforthecontractelement
intopercentageavailability.
BBCrepeatedthosestepsforeach
contractelementthatthestudyteam
examinedaspartofthedisparitystudy.
BBCmultipliedthepercentageavailability
foreachcontractelementbythedollars
associatedwiththecontractelement,
addedresultsacrossallcontractelements,
anddividedbythetotaldollarsforall
contractelements.Theresultwasadollar
weightedestimateofoverallavailabilityof
MBE/WBEsandestimatesofavailability
foreachMBE/WBEgroup.Figure44
providesanexampleofhowBBC
calculatedavailabilityforaspecific
subcontractassociatedwitha
constructionprimecontractthatCaltrans
awardedduringthestudyperiod.
Figure44.
Exampleofanavailabilitycalculationfora
Caltranssubcontract
OnacontractthatCaltransawardedin2007forworkin
District4,theprimecontractorawardedasubcontract
worth$177,800forhighwayandstreetconstructionwork.
TodeterminetheoverallavailabilityofMBE/WBEsforthat
subcontract,thestudyteamidentifiedbusinessesinthe
availabilitydatabasethat:
a. Wereinbusinessin2007;
b. Indicatedthattheyperformedhighwayandstreet
constructionwork;
c. Reportedbiddingonworkofsimilarorgreater
sizeinthepast;
d. ReportedabilitytoperformworkinDistrict4;and
d. Reportedqualificationsandinterestinworkingas
asubcontractoronlocalgovernmentagency
transportationrelatedprojects.
Thestudyteamfound161businessesintheavailability
databasethatmetthosecriteria.Ofthosebusinesses,49
wereMBEsorWBEs.Thus,MBE/WBEavailabilityforthe
subcontractwas30.4percent(i.e.,49/161X100=30.4).
Thatprocesswascompletedforallprimecontractsand
subcontractsthatthestudyteamexaminedaspartofthe
disparitystudy.Theresultsforeachprimecontractand
subcontractwereweightedbythedollarsassociatedwith
eachcontractelement.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE9

Improvementsonasimpleheadcountofbusinesses.BBCusedacustomcensus
approachtocalculatingavailabilityestimatesforCaltransandLocalAssistanceprimecontracts
andsubcontractsratherthanusingasimpleheadcountofMBE/WBEs(i.e.,simplycalculating
thepercentageofallCaliforniatransportationcontractingbusinessesthatareminorityor
womenowned).Usingacustomcensusapproachratherthanusingaheadcountapproachto
availabilitytypicallyresultsinloweravailabilityestimatesforMBEsandWBEs,dueinlargepart
toBBCsconsiderationofrelativecapacityinmeasuringavailabilityandtodollarweighting
availabilityresults.BecauseMBE/WBEstendtobesmallerthanotherbusinessesandtendto
havesmallerbidcapacity,thosebusinessesarelesslikelytobeidentifiedasavailableforthe
largestprimecontractsandsubcontracts.
ThereareseveralimportantwaysinwhichBBCscustomcensusapproachtomeasuring
availabilitywasmoreprecisethancompletingasimpleheadcount.
BBCsapproachaccountedfortypeofwork.USDOTsuggestscalculatingavailabilitybasedon
businessesabilitiestoperformspecifictypesofwork.USDOTgivesthefollowingexamplein
TipsforGoalSettingintheDisadvantagedBusinessEnterprise(DBE)Program:
If90percentofanagencyscontractingdollarsisspentonheavyconstructionand
10percentontrucking,theagencywouldcalculatethepercentageofheavy
constructionbusinessesthatareMBEsorWBEsandthepercentageoftrucking
businessesthatareMBEsorWBEs,andweightthefirstfigureby90percentand
thesecondfigureby10percentwhencalculatingoverallMBE/WBEavailability.
10
Thestudyteamtooktypeofworkintoaccountbyexamining25differentsubindustriesrelated
toconstructionandengineeringaspartofestimatingavailabilityforCaltransandLocal
Assistancework.
BBCsapproachaccountedforqualificationsandinterestintransportationrelatedprime
contractandsubcontractwork.Thestudyteamcollectedinformationonwhetherbusinesses
arequalifiedandinterestedinworkingasprimecontractors,subcontractors,orbothon
transportationrelatedworkforCaltransandonworkforsubrecipientlocalagencies.In
additiontotheconsiderationofseveralotherfactorsrelatedtoCaltransandLocalAssistance
primecontractsandsubcontracts(e.g.,contracttypes,sizes,andlocations):
Onlybusinessesthatreportedbeingqualifiedforandinterestedinworkingasprime
contractorswerecountedasavailableforprimecontracts;
Onlybusinessesthatreportedbeingqualifiedforandinterestedinworkingas
subcontractorswerecountedasavailableforsubcontracts;and
Businessesthatreportedbeingqualifiedforandinterestedinworkingasbothprime
contractorsandsubcontractorswerecountedasavailableforbothprimecontractsand
subcontracts.
10
TipsforGoalsSettingintheDisadvantagedBusinessEnterprise(DBE)Program,
http://www.osdbu.dot.gov/dbeprogram/tips.cfm.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE10

BBCsapproachaccountedforthesizeofprimecontractsandsubcontracts.BBCconsidered
thesizeintermsofdollarvalueofprimecontractsandsubcontractsthatabusinessbidon
orreceivedinthepreviousfiveyears(i.e.,relativecapacity)whendeterminingwhetherto
countthatbusinessasavailableforaparticularcontractelement.Whencountingavailable
businessesforaparticularprimecontractorsubcontract,BBCconsideredwhetherbusinesses
hadpreviouslybidonorreceivedatleastonecontractofanequivalentorgreaterdollarvalue.
ThatapproachisconsistentwithguidancefromtheU.S.CourtofAppealsfortheFederalCircuit
regardingtheconsiderationofthecapacityofbusinessestoperformoncontractsofdifferent
sizes(e.g.,seeRotheDevelopmentCorp.v.DepartmentofDefense).
11
BBCsapproachaccountedforthegeographiclocationofthework.Caltransprovided
informationonthedistrictinwhicheachcontractwasperformed.Thestudyteamcollected
informationonwhetherbusinessesindicatedthattheycouldperformworkinspecificregionsof
thestate.Thedefinitionsofregionsareasfollows:
NorthCoast(CaltransDistrict1).ThisareaincludesDelNorte,Humboldt,Lake,
andMendocinocounties.
ShastaRedding(CaltransDistrict2).ThisregionextendsfromtheRedBluffarea
throughReddingtotheOregonBorder.
SacramentoTahoe(CaltransDistrict3).ThisincludesButte,Colusa,ElDorado,
Glenn,Nevada,Place,Sacramento,Sierra,Sutter,Yolo,andYubacounties.
SanFranciscoBayArea(CaltransDistrict4).ThisregionextendsfromSanJoseto
SantaRosa.
CentralCoast(CaltransDistrict5).ThisregionextendsfromtheSantaBarbara
areatoSalinas.
CentralValley(CaltransDistrict6and10).ThisareaextendsfromBakersfieldto
Stockton.
LosAngelesBasin(CaltransDistricts7and12).ThisincludesLosAngeles,
Ventura,andOrangecounties.
SanBernardinoRiverside(CaltransDistrict8).ThisincludesSanBernardino
andRiversidecounties.
Bishop(CaltransDistrict9).ThisincludesInyoandMonocounties.
SanDiegoArea(CaltransDistrict11).ThisincludesSanDiegoandImperial
counties.
NotethatwhenBBCcombinedseveralregionstoreportdisparityresults,thecombinedresults
werestillbasedonthegeographicdetailfortheavailabilityanalysisdescribedabove.
11
RotheDevelopmentCorp.v.U.S.DepartmentofDefense,545F.3d1023(Fed.Cir.2008).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE11

BBCsapproachgenerateddollarweightsresults.BBCexaminedavailabilityonacontractby
contractbasisandthendollarweightedtheresultsfordifferentsetsofcontractelements.
Consequently,theresultsofrelativelylargecontractelementscontributedmoretooverall
availabilityestimatesthanthoseofrelativelysmallcontractelements.Thatapproachis
consistentwithUSDOTsTipsforGoalSettingintheDisadvantagedBusinessEnterprise(DBE)
Program,whichsuggestsadollarweightedapproachtocalculatingavailability.
F.AvailabilityResults
BBCusedacustomcensusapproachtoestimatetheavailabilityofMBE/WBEsandmajority
ownedbusinessesforthe15,446constructionandengineeringprimecontractsand
subcontractsthatCaltransandsubrecipientlocalagenciesawardedduringthestudyperiod.
Figure45presentsoveralldollarweightedavailabilityestimatesbygroupandbyindustryfor
thosecontracts.
Figure45.
Overalldollarweighted
availabilityestimatesby
MBE/WBEgroupandindustry
Note:
SeeFigureK2inAppendixKfor
correspondingdisparityresultstables.
Source:
BBCResearch&Consultingavailability
analysis.
Race/ethnicityandgender
Utilizationbenchmark
(availability%)
AfricanAmericanowned 0.9 %
AsianPacificAmericanowned 1.8
SubcontinentAsianAmericanowned 0.3
HispanicAmericanowned 9.8
NativeAmericanowned 1.0
TotalMBE 13.8 %
WBE(whitewomenowned) 4.3
TotalMBE/WBE 18.1 %
Overall,MBE/WBEavailabilityforCaltransandLocalAssistancetransportationcontractsis18.1
percent.HispanicAmericanownedbusinesses(9.8%)andWBEs(4.3%)accountforthelargest
proportionsofoverallMBE/WBEavailability.Inthe2007AvailabilityandDisparityStudythe
availabilityforCaltransandLocalAssistancecontractswassimilar(17.6%).Theslight
differencebetweentheresultsforthetwostudyperiodsmaybeduetoavarietyoffactors
includingthetypes,sizes,andlocationsofthespecificprimecontractsandsubcontracts
includedineachanalysis.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE12

G.CaltransBaseFigureforitsOverallDBEGoal
EstablishingabasefigureisthefirststepincalculatinganoverallannualgoalforDBE
participationinCaltransFHWAfundedtransportationcontracts.BBCcalculatedthebasefigure
usingthesameavailabilitydatabaseandapproachdescribedaboveexceptthatcalculationsonly
includedpotentialDBEs(includingcurrentlycertifiedDBEs)andonlyincludedFHWAfunded
primecontractsandsubcontracts.BBCsapproachtocalculatingCaltransbasefigureis
consistentwith:
Courtreviewedmethodologiesinseveralstates,includingCalifornia,Illinois,and
Minnesota;
InstructionsinTheFinalRuleeffectiveFebruary28,2011thatoutlinerevisionstothe
FederalDBEProgram;and
USDOTsTipsforGoalSettingintheDisadvantagedBusinessEnterprise(DBE)Program.
BBCsavailabilityanalysisindicatesthattheavailabilityofpotentialDBEsforCaltransFHWA
fundedtransportationcontractsis12.5percent.Caltransmightconsider12.5percentasthe
basefigureforitsoverallannualgoalforDBEparticipation,assumingthatthetypesofFHWA
fundedcontractsthattheagencyawardsinthetimeperiodthatthegoalwillcoveraresimilarto
thetypesofFHWAfundedcontractsthattheagencyawardedduringthestudyperiod.
Thebasefiguresuggestedinthe2007AvailabilityandDisparityStudywas13.5percent.The
differencebetweentheresultsfromthetwostudiesmaybeduetodifferencesinthetypes,sizes
andlocationsofFHWAfundedcontractsexaminedinthe2007Studyandtherelativenumberof
MBE/WBEfirmsthathadgraduatedorotherwiseappearedtonotbeeligibleforDBE
certification.
DifferencesfromoverallMBE/WBEavailability.TheavailabilityofpotentialDBEsis
lowerthantheoverallMBE/WBEavailabilitypresentedinFigure45.BBCscalculationof
overallMBE/WBEavailabilityincludesthreegroupsofMBE/WBEsthatthestudyteamdidnot
countaspotentialDBEsforpurposesofcalculatingthebasefigure:
MBE/WBEsthatgraduatedfromtheDBEProgram(thatwerenotrecertified);
MBE/WBEsthatarenotcurrentlyDBEcertifiedthathadappliedforDBEcertificationwith
theStateofCaliforniaandhadbeendenied;and
MBE/WBEsthatarenotcurrentlyDBEcertifiedthatreportedannualrevenuesoverthe
mostrecentthreeyearssohighastoappeartoprecludethemfrombecomingDBE
certified.
Inaddition,thestudyteamsanalysesforcalculatingthebasefigureonlyincludedFHWAfunded
primecontractsandsubcontracts,whereastheanalysesforcalculatingoverallMBE/WBE
availabilityincludedalltransportationrelatedprimecontractsandsubcontracts,regardlessof
fundingsource.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE13

AdditionalstepsbeforeCaltransdeterminesitsoverallannualDBEgoal.Caltrans
mustconsiderwhethertomakeanystep2adjustmentstothebasefigureaspartof
determiningitsoverallDBEgoal.Step2adjustmentscanbeupwardordownward,butthereis
norequirementforCaltranstomakeanystep2adjustmentsaslongastheagencycanexplain
whatfactorsitconsideredandwhynoadjustmentwaswarranted.Chapter8discussesfactors
thatCaltranscouldconsiderindecidingwhethertomakeanystep2adjustmentstothebase
figure.
H.ImplicationsforAnyDBEContractGoals
IfCaltranschoosestouseDBEcontractgoalsinthefuture,itmightuseinformationfromthe
availabilityanalysistoinformtheuseofanysuchgoals.Itmayalsouseinformationfroma
currentDBEdirectory,acurrentbidderslist,orothersourcesthatcouldprovideinformation
abouttheavailabilityofMBE/WBEstoparticipateinparticularcontracts.
TheFederalDBEProgramprovidesagenciesthatuseDBEcontractgoalswithsomeflexibilityin
howtheysetDBEcontractgoals.DBEgoalsonsomecontractsmightbehigherthantheoverall
annualDBEgoal.DBEgoalsonothercontractsmightbelowerthantheoverallDBEgoal.In
addition,theremaybesomefederallyfundedcontractsforwhichsettingDBEcontractgoals
wouldnotbeappropriate.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER4,PAGE14

CHAPTER5.
UtilizationAnalysis
Chapter5presentsinformationabout
Figure51.
MBE/WBEparticipationonCaltransand
Definingandmeasuringutilization
CaltransLocalAssistanceProgram
transportationprimecontractsand UtilizationofMBE/WBEsreferstotheshareofprime
contractandsubcontractdollarsthatanagency
subcontractsawardedinthestudyperiod.The
awardedtoMBE/WBEsduringaparticulartimeperiod.
disparityanalysesthatfollowinChapter6 BBCmeasurestheutilizationofallMBE/WBEs,
regardlessofcertification,andseparatelyofMBE/WBEs
compareutilizationresultswiththeavailability
thatareDBEcertified.BBCexaminesutilization
benchmarksintroducedinChapter4.Chapter2 separatelybyrace/ethnicityandgender.
andAppendixDprovideadditionalinformation
BBCmeasuresMBE/WBEutilizationaspercentageof
totalprimecontractandsubcontractdollars.For
onutilizationdatacollectionandmethodology.
example,if5percentofprimecontractandsubcontract
dollarswenttoWBEsduringthestudyperiod,WBE
Chapter5isorganizedinfiveparts: utilizationwouldbe5percent.
InformationaboutMBE/WBEutilizationisinstructiveon
A. Overviewoftheutilizationanalysis;
itsown,butitisevenmoreinstructivewhenitis
comparedwiththeutilizationthatmightbeexpected
basedontheavailabilityofMBE/WBEsforCaltrans
B. OverallMBE/WBEandcertifiedDBE
work.BBCpresentssuchcomparisonsaspartofthe
utilizationonCaltransandLocal
disparityanalysisinChapter6.
Assistancetransportationcontracts;
C. MBE/WBEandcertifiedDBEutilizationonCaltransandLocalAssistancecontractswithand
withoutrace andgenderconsciousgoals;and
D. ChangesinMBE/WBEandcertifiedDBEutilizationonCaltransandLocalAssistance
contractsduringthestudyperiod.
A.OverviewoftheUtilizationAnalysis
BBCanalyzedbothFHWAfundedandstatefundedCaltranstransportationcontractsawarded
duringtheJanuary1,2007throughDecember31,2010studyperiod.Caltrans,throughitsLocal
AssistanceProgram,alsoadministersFHWAandstatefundstolocalagenciesfortransportation
work.Thelocalagenciesindependentlyawardthesecontracts.AlthoughCaltransdoesnot
collectinformationontheindividualsubcontractorsinvolvedinlocalagencycontracts,aspartof
thisdisparitystudyBBCandCaltranswereabletoobtainsuchdataformanyofthecontractsin
thestudyperiod.
Definitionofutilization.ThestudyteammeasuredMBE/WBEparticipationintermsof
utilizationthepercentageofprimecontractandsubcontractdollarsthatCaltransand
subrecipientlocalagenciesawardedtoMBE/WBEsduringthestudyperiod.
1
Figure51presents
moreinformationaboutBBCsdefinitionofutilizationandhowthestudyteammeasuredit.
1
Notethatprimecontractors,notCaltransorlocalagencies,awardsubcontractstosubcontractors.Tosimplifythe
discussion,Caltransandlocalagencyawardofcontractelementsisusedhereandthroughoutthereport.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE1

DifferencesbetweenBBCsanalysisandCaltransUniformReportsofDBE
Commitments/AwardsandPayments.USDOTrequiresCaltranstosubmitreportsabout
itsDBEutilizationonitsFHWAfundedtransportationcontractstwiceeachyear(typicallyin
AprilandOctober).BBCsanalysisofMBE/WBEutilizationgoesbeyondwhatCaltranscurrently
reportstoFHWA,asexplainedbelow.
AllMBE/WBEs,notonlycertifiedDBEs.PerUSDOTregulations,Caltransutilizationreportsfor
FHWAfundedcontractsfocusexclusivelyoncertifiedDBEs.Caltransdoesnottrackthe
utilizationofMBE/WBEsthatarenotDBEcertified.BBCsutilizationanalysesincludedthe
utilizationofallMBE/WBEsonCaltranstransportationcontractsnotjusttheutilizationof
certifiedDBEs.BBCsanalysesincludedtheutilizationofMBE/WBEsthatmayhaveoncebeen
DBEcertifiedandgraduated(orlettheircertificationslapse)andtheutilizationofMBE/WBEs
thathaveneverbeenDBEcertified.
BBCreportsutilizationforallMBE/WBEsandseparatelyforMBE/WBEsthatwereDBEcertified
duringthestudyperiod.
2
Statefundedcontracts,notonlyFHWAfundedcontracts.FHWArequiresCaltranstoprepare
DBEutilizationreportsonlyonitsFHWAfundedtransportationcontracts.Thus,Caltranstracks
certifiedDBEutilizationonlyforthosecontracts.BBCanalyzedMBE/WBEutilizationonboth
FHWAandstatefundedCaltranstransportationcontracts.Utilizationinformationforstate
fundedcontractsisinstructive,becauseCaltransdoesnotapplyanyDBEcontractgoalsorany
otherraceorgenderconsciousprogramstothosecontracts.
3
USDOTsuggeststhatagencies
shouldexamineMBE/WBEutilizationoncontractstowhichDBEcontractgoalsdonotapply
whendesigningfutureimplementationsoftheFederalDBEProgram.
4
CaltransdidnotapplyDBEcontractinggoalstoFHWAfundedtransportationcontractsthatit
awardedbetweenJanuary1,2007andMarch31,2009.Similarly,subrecipientlocalagenciesdid
notapplyDBEcontractinggoalstoFHWAfundedtransportationcontractsthattheyawarded
throughtheLocalAssistanceProgrambetweenJanuary1,2007andJune2,2009.Examining
thosecontracts,inadditiontothestatefundedcontracts,isalsoinformativewhenimplementing
theFederalDBEProgram.(NotethatsomeFHWAfundedcontractsalsoincludedstateand/or
localfundsandthatsomestatefundedcontractsincludedlocalgovernmentfunds.)
2
Althoughbusinessesthatareownedandoperatedbysocially andeconomicallydisadvantagedwhitemencanbecome
certifiedasDBEs,BBCidentifiednoDBEcertifiedwhitemaleownedbusinessesthatCaltransutilizedduringthestudyperiod.
Inotherwords,allDBEsthatCaltransutilizedduringthestudyperiodwereMBE/WBEs.Thus,utilizationresultsforcertified
DBEsareasubsetoftheutilizationresultsforallMBE/WBEs.
3
Caltransactivelypursuessmallbusiness(SB)anddisabledveteranbusinessenterprise(DVBE)participationonallprojects
and,asofJuly2012,iscommittedtoaSBparticipationgoalof25percentandaDVBEgoalof5percentofstatefunded
contractsandprocurementopportunities.AportionofthestatefundedcontractsawardedduringthestudydidhaveDVBE
contractgoals.
4
http://www.dotcr.ost.dot.gov/Documents/Dbe/49CFRPART26.doc.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE2

B.OverallMBE/WBEUtilizationonCaltransandLocalAssistance
TransportationContracts
Figure52presentsoverallMBE/WBEutilization(asapercentageoftotaldollars)on
constructionandengineeringcontractsthatCaltransandsubrecipientlocalagenciesawarded
duringthestudyperiod,includingbothFHWAandstatefundedprimecontractsand
subcontracts.ThedarkerportionofthebarpresentsCaltransutilizationofMBE/WBEsthat
wereDBEcertified.
Figure52.
MBE/WBEandDBEshareofprime
contract/subcontractdollarsfor
CaltransandLocalAssistance
transportationrelatedconstruction
andengineeringcontracts,20072010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis15,446.
Formoredetailandresultsbygroup,seeFigureK2in
AppendixK.
Source:
BBCResearch&ConsultingfromdataonCaltransandlocal
agencycontracts.
AsshowninFigure52,overall,MBE/WBEsreceived12.6percentofCaltransandLocal
Assistancetransportationprimecontractandsubcontractdollarsduringthestudyperiod.Only
4.2percentoftheexaminedCaltransandLocalAssistancecontractdollarswenttoMBE/WBEs
thatwereDBEcertified.
Figure53onthefollowingpagepresentsCaltransandLocalAssistanceutilizationofeach
MBE/WBEgroupthatispresumedtobedisadvantagedin49CFRPart26.AsshowninFigure
53,HispanicAmericanownedbusinesses(6.9%)andWBEs(3.9%)receivedahigher
percentageofCaltransandLocalAssistancetransportationcontractdollarsduringthestudy
periodthanotherMBE/WBEgroups.AfricanAmerican(0.2%)andSubcontinentAsianowned
businesses(0.2%)wereutilizedlessthanotherMBE/WBEgroups.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE3

Figure53.
MBE/WBEandDBEshareofprimecontractandsubcontractdollarsforCaltrans
andLocalAssistancecontracts,byrace/ethnicity/gender,20072010
Total
$inthousands Percent
MBE/WBEs
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
WBE(whitewomenowned)
TotalMBE/WBE
Majorityowned
Total
DBEs
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
UnknownminorityDBE
WBE(whitewomenowned)
WhitemaleownedDBE
TotalDBE
NonDBE
Total
$20,315
115,316
30,988
924,753
63,174
525,843
$1,680,388
11,650,470
$13,330,858
$13,396
98,775
8,922
317,226
22,403
511
98,569
0
$559,802
12,771,056
$13,330,858
0.2 %
0.9
0.2
6.9
0.5
3.9
12.6 %
87.4
100.0 %
0.1 %
0.7
0.1
2.4
0.2
0.0
0.7
0.0
4.2 %
95.8
100.0 %
Note: CertifiedDBEutilization.
Numbersroundedtonearesttenthof1percent.Numbersmaynotaddtototalsduetorounding.
Numberofcontracts/subcontractsanalyzedis15,446.
SeeFigureK2inAppendixKforcorrespondingdisparityresultstable.
Source: BBCResearch&ConsultingfromdataonCaltransandlocalagencycontracts.
C.MBE/WBEUtilizationonCaltransandLocalAssistanceTransportation
ContractswithandwithoutRace andGenderconsciousGoals
Therewerethreesetsoftransportationcontractsawardedduringthestudyperiodtowhichthe
UDBEcontractinggoalsprogramdidnotapply:
StatefundedcontractsthatCaltransandlocalagenciesawardedduringthestudyperiod;
FHWAfundedcontractsthatCaltransawardedbetweenJanuary1,2007andMarch31,
2009;and
FHWAfundedcontractsthatsubrecipientlocalagenciesawardedthroughtheLocal
AssistanceProgrambetweenJanuary1,2007andJune3,2009.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE4

Together,thesecontractsarenotedasnongoalscontracts.Allothercontractsarecombinedas
goalscontracts,includingindividualFHWAfundedcontractsonwhichCaltransorlocal
agenciesdecidednottosetaDBEcontractgoal.
Figure54comparesMBE/WBEandcertifiedDBEutilizationonCaltransandLocalAssistance
nongoalsandgoalscontractsduringthestudyperiod.
Figure54.
MBE/WBEandDBEutilization
onCaltransandLocal
Assistancegoalsandnongoals
transportationcontracts,2007
2010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis
4,864forFHWAfundedcontractsinthegoals
period,10,582forstatefundedcontractsand
FHWAfundedcontractsinthenongoals
period.
SeeFiguresK5andK8andinAppendixKfor
detailedresults.
Source:
BBCResearch&Consultingfromdataon
Caltransandlocalagencycontracts.
AsshowninFigure54,overallMBE/WBEutilizationwashigheronnongoalscontracts(13.2%)
thanongoalscontracts(11.5%)duringthestudyperiod.AsshowninFigure55,thatdifference
wasduetothehigherutilizationofthreegroupsonnongoalscontractsHispanicAmerican
ownedbusinesses,SubcontinentAsianAmericanownedbusinessesandWBEs.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE5

Figure55.
MBE/WBEandDBEutilizationonCaltransandLocalAssistancegoalsandnongoals
transportationcontractsbygroup,20072010
Statefundedcontractsand
FHWAfundedcontracts FHWAfundedcontractsin
ingoalsperiod nongoalsperiod
$inthousands Percent $inthousands Percent
MBE/WBEs
AfricanAmericanowned $14,545 0.3 % $5,898 0.1 %
AsianPacificAmericanowned 42,752 0.9 72,665 0.8
SubcontinentAsianAmericanowned 7,185 0.2 23,763 0.3
HispanicAmericanowned 258,113 5.7 666,127 7.6
NativeAmericanowned 40,554 0.9 22,943 0.3
WBE(whitewomenowned) 156,319 3.5 369,524 4.2
TotalMBE/WBE $519,468 11.5 % $1,160,920 13.2 %
Majorityowned 3,999,081 88.5 7,651,389 86.8
Total $4,518,549 100.0 % $8,812,309 100.0 %
DBEs
AfricanAmericanowned $10,919 0.2 % $2,477 0.0 %
AsianPacificAmericanowned 40,967 0.9 57,808 0.7
SubcontinentAsianAmericanowned 2,504 0.1 6,418 0.1
HispanicAmericanowned 110,251 2.4 206,975 2.3
NativeAmericanowned 13,253 0.3 9,151 0.1
UnknownminorityDBE 0 0.0 511 0.0
WBE(whitewomenowned) 39,964 0.9 58,605 0.7
WhitemaleownedDBE 0 0.0 0 0.0
TotalDBE $217,858 4.8 % $341,944 3.9 %
NonDBE 4,300,691 95.2 8,470,365 96.1
Total $4,518,549 100.0 % $8,812,309 100.0 %
Note: CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis4,864forFHWAfundedcontractsinthegoalsperiodand10,582forstatefunded
contractsandFHWAfundedcontractsinthenongoalsperiod.
SeeFiguresK5andK8inAppendixKforcorrespondingdisparityresultstables.
Source: BBCResearch&ConsultingfromdataonCaltransandlocalagencycontracts.
HispanicAmerican andSubcontinentAsianAmericanownedbusinesses.Asshown
inFigure55,utilizationofHispanicAmericanownedbusinesseswashigheronnongoals
contracts(7.6%)thanongoalscontracts(5.7%).UtilizationofSubcontinentAsianAmerican
ownedbusinesseswasalsoslightlyhigheronnongoalscontracts(0.3%)thanongoalscontracts
(0.2%).ItisimportanttonotethatbothHispanicAmericanandSubcontinentAsianAmerican
ownedbusinesseswerenotincludedinCaltransUDBEcontractinggoalsprogramthatthe
DepartmentandsubrecipientlocalagenciesappliedtoFHWAfundedtransportationcontracts
beginningonApril1,2009andonJune3,2009,respectively.
BBCexploredwhetheronereasonwhyHispanicAmericanownedbusinessesandSubcontinent
AsianAmericanownedbusinessesshowedlowerutilizationongoalscontractsisthatprime
contractorsmademoreefforttoincludeonthosecontractsMBEgroupsthatwereeligibleto
meetUDBEcontractgoalswomen,AfricanAmerican,AsianPacificAmerican,andNative
AmericanownedDBEs.ThedifferenceinutilizationforHispanicAmericanandSubcontinent
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE6

AsianAmericanownedfirmsbetweengoalsandnongoalscontracts(2percentagepoints)was
muchgreaterthantheincreaseinutilizationofMBEgroupseligibletomeetUDBEcontractgoals
(0.9percentagepoints).
5
ThereappeartobefactorsotherthanDBEcontractgoalsthat
contributetolowerutilizationofHispanicAmericanandSubcontinentAsianAmericanowned
firmsforgoalscontracts.
WBEs.WomenownedfirmswerealsoeligibletomeetUDBEcontractgoals,butWBEutilization
waslowerongoalscontracts(3.5%)thanonnongoalscontracts(4.2%).Thisresultisfurther
exploredbelow.
D.ChangesinMBE/WBEandCertifiedDBEUtilizationonCaltransand
LocalAssistanceContractsDuringtheStudyPeriod
AsdiscussedinChapter3,therecenteconomicdownturnhadasubstantialimpacton
constructionandengineeringworkinCalifornia,includingthetransportationcontracting
industry.Thereareindicationsthatchangingmarketplaceconditionsmayhavehadmoreofa
negativeimpactonsmallbusinesses,especiallywomenandminorityownedfirms.Business
ownersandothersalsoreportedthatmarketconditionsgrewworseoverthecourseofthe
downturn(seeChapter3,AppendixJandAppendixL).Forthesereasons,thestudyteam
examinedMBE/WBEutilizationforcontractsawardedduring2007and2008comparedwith
contractsawardedduring2009and2010.
Figure56comparesMBE/WBEandcertifiedDBEutilizationonCaltransandlocalagency
contractsawardedinthe20072008periodversusthe20092010period.
Figure56.
MBE/WBEandDBEshare
ofprime/subcontract
dollarsforCaltransand
LocalAssistance
transportationcontracts,
20072008vs.20092010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontracts
analyzedis7,785forthe20072008
period,7,661forthe20092010
periods.
SeeFiguresK17andK18inAppendixK
fordetailedresults.
Source:
BBCResearch&Consultingfromdata
onCaltransandlocalagencycontracts.
AsshowninFigure56,overallMBE/WBEutilizationwaslowerinthe20092010period
(11.8%)thaninthe20072008period(13.2%),suggestingthatchangingmarketplace
conditionsmayhavehadmoreofanegativeeffectonMBE/WBEsthanformajorityownedfirms.
5
HispanicAmericanandSubcontinentAsianAmericanwomenownedDBEswereeligibletomeetUDBEcontractgoals.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE7

ThisdeteriorationoccurreddespiteCaltransandlocalagenciesusingaraceandgender
consciousgoalsprogramonitsFHWAfundedcontractsafterearlytomid2009(UDBEcontract
goals).AlthoughtheUDBEcontractgoalsappearedtoincreasetheutilizationofcertifiedDBEs
duringthe20092010period,overallmarketplaceconditionsresultedinanoveralldecreasein
theutilizationofminorityandwomenownedfirms..
Figure57presentsMBE/WBEandcertifiedDBEparticipationineachperiodby
racial/ethnic/gendergroup.Asnotedpreviously,certifiedDBEutilizationisasubsetoftotal
MBE/WBEutilization.
Figure57.
MBE/WBEandDBEshareofprime/subcontractdollarsforCaltransandlocalagencycontracts,
20072008vs.20092010,byrace/ethnicity/gender
20072008period
$inthousands Percent
20092010period
$inthousands Percent
MBE/WBEs
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
WBE(whitewomenowned)
TotalMBE/WBE
Majorityowned
Total
DBEs
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
UnknownminorityDBE
WBE(whitewomenowned)
WhitemaleownedDBE
TotalDBE
NonDBE
Total
$4,059 0.1 %
52,793 0.7
19,053 0.3
571,122 7.5
18,949 0.2
339,466 4.5
$1,005,443 13.2 %
6,601,269 86.8
$7,606,712 100.0 %
$1,788 0.0 %
42,864 0.6
2,695 0.0
174,410 2.3
7,163 0.1
102 0.0
50,308 0.7
0 0.0
$279,329 3.7 %
7,327,383 96.3
$7,606,712 100.0 %
$16,339 0.3 %
62,672 1.1
11,922 0.2
353,221 6.2
44,415 0.8
186,377 3.3
$674,945 11.8 %
5,049,201 88.2
$5,724,146 100.0 %
$11,608 0.2 %
55,911 1.0
6,227 0.1
142,816 2.5
15,240 0.3
410 0.0
48,261 0.8
0 0.0
$280,473 4.9 %
5,443,673 95.1
$5,724,146 100.0 %
Note: CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis7,785forthe20072008periodand7,661forthe20092010period.
SeeFiguresK17andK18inAppendixK.
Source: BBCResearch&ConsultingfromdataonCaltransandlocalagencycontracts.
Betweenthe20072008and20092010periods,utilizationdecreasedforSubcontinentAsian
Americanownedfirms(0.3%to0.2%),HispanicAmericanownedfirms(7.5%to6.2%),and
whitewomenownedfirms(4.5%to3.3%).Thedecreaseincombinedutilizationofthesethree
groupsmorethanoffsetssmallincreasesintheutilizationoftheotherMBEs.Eventhough
CaltransincludedwomenownedDBEsasUDBEsintheraceconsciousgoalsprogram,utilization
stilldeclinedforallwhitewomenownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER5,PAGE8

CHAPTER6.
DisparityAnalysis
ThedisparityanalysiscomparestheutilizationofMBE/WBEsontransportationconstruction
andengineeringcontractsthatCaltransandsubrecipientlocalagenciesawardedduringthe
studyperiodtowhatmightbeexpectedbasedontheavailabilityofMBE/WBEsforthatwork.
Chapter6presentsthedisparityanalysisinsixparts:
A. Overviewofdisparityanalysismethodology;
B. OveralldisparityanalysisresultsforCaltransandLocalAssistancetransportationcontracts;
C. DisparityanalysisresultsforcontractsincludedinCaltransraceconsciousDBEgoals
programandcontractsnotincludedintheraceconsciousgoalsprogram;
D. DisparityanalysisresultsforCaltranscontractsbytimeperiod;and
E. Statisticalsignificanceofdisparityanalysisresults.
A.OverviewofDisparityAnalysisMethodology
Aspartofthedisparityanalysis,BBCcomparedtheactualutilizationofMBE/WBEsonCaltrans
transportationprimecontractsandsubcontractswiththepercentageofcontractdollarsthat
MBE/WBEsmightbeexpectedtoreceivebasedontheiravailabilityforthatwork(availabilityis
alsoreferredtoastheutilizationbenchmark).BBCmadethosecomparisonsforeach
individualMBE/WBEgroup.BBCalsomadethosecomparisonsforallCaltranstransportation
contractsconsideredtogetherandseparatelyfordifferentsetsofcontracts(e.g.,goalsandnon
goalscontractsaswellas20072008contractsand20092010contracts).
BBCexpressedbothactualutilizationandavailabilityaspercentagesofthetotaldollars
associatedwithaparticularsetofcontracts,makingthemdirectlycomparable(e.g.,5%actual
utilizationcomparedwith4%availability).BBCthencalculatedadisparityindextohelp
compareutilizationandavailabilityresultsamongMBE/WBEgroupsandacrossdifferentsetsof
contracts.Figure61,onthenextpage,describeshowBBCcalculateddisparityindices.
Adisparityindexof100indicatesanexactmatchbetweenactualutilizationandwhatmightbe
expectedbasedonMBE/WBEavailabilityforaspecificsetofcontracts(oftenreferredtoas
parity).Adisparityindexoflessthan100mayindicateadisparitybetweenutilizationand
availability,anddisparitiesoflessthan80inthisreportaredescribedassubstantial.
1
1
Somecourtsdeemadisparityindexbelow80asbeingsubstantialandhaveaccepteditasevidenceofadverseimpacts
againstMBE/WBEs.Forexample,seeRotheDevelopmentCorpv.U.S.DeptofDefense,545F.3d1023,1041;EnggContractors
AssnofSouthFlorida,Inc.v.MetropolitanDadeCounty,122F.3dat914,923(11thCircuit1997);ConcreteWorksofColo.,Inc.v.
CityandCountyofDenver,36F.3d1513,1524(10thCir.1994).AlsoseeAppendixBforadditionaldiscussion.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE1

ThedisparityanalysisresultsthatBBC
presentsinChapter6arebasedondetailed
disparityanalysistablesprovidedinAppendix
K.EachtableinAppendixKreportsdisparity
analysisresultsforadifferentsetofCaltrans
andLocalAssistancetransportationcontracts.
Forexample,FigureK2inAppendixKreports
disparityanalysisresultsforallCaltransand
LocalAssistancetransportationcontractsthat
thestudyteamexaminedaspartofthe
disparitystudythatis,FHWAandstate
fundedtransportationrelatedconstruction
andengineeringprimecontractsand
subcontractsthatCaltransandsubrecipient
localagenciesawardedduringthestudy
period.AppendixKincludesadditionalsimilar
tablesfordifferentsetsofcontracts,including
thosethatpresentresultsseparatelyfor
FHWAandstatefundedcontracts,prime
contractsandsubcontracts,constructionand
engineeringrelatedcontracts,contractsin
differentregions,andlargeandsmallcontracts.
TheheadingofeachtableinAppendixK
providesadetaileddescriptionofthesetof
Figure61.
Calculationofdisparityindices
Thedisparityindexprovidesastraightforwardwayof
assessinghowcloselyactualutilizationofan
MBE/WBEgroupmatchesthepercentageofcontract
dollarsthatthegroupmightbeexpectedtoreceive
basedonitsavailabilityforaspecificsetofcontracts.
Oneadvantageofthedisparityindexisthatonecan
directlycompareadisparityindexforonegroupto
thatofanothergroupandcomparedisparityindices
acrossdifferentsetsofcontracts.BBCcalculates
disparityindicesusingthefollowingformula:
%actualutilizationx100
%availability
Forexample,ifactualutilizationofWBEsonasetof
Caltranscontractswas2percentandtheavailability
ofWBEsforthosecontractswas10percent,thenthe
disparityindexwouldbe2percentdividedby10
percent,whichwouldthenmultipliedby100to
equal20.Inthisexample,WBEswouldhaveactually
received20centsofeverydollarthattheymightbe
expectedtoreceivebasedontheiravailabilityforthe
work.
contractsthatthestudyteamanalyzedforthatparticulardisparityanalysistable.
FigureK2fromAppendixKispresentedasFigure62onthefollowingpage.AreviewofFigure
62helpstointroducethecalculationsandformatofallofthedisparityanalysistablesin
AppendixK.AsillustratedinFigure62,thedisparityanalysistablespresentinformationabout
eachMBE/WBEgroup(aswellasaboutallbusinesses)inseparaterows:
Allfirmsinrow(1)pertainstoinformationaboutallmajorityownedbusinessesand
MBE/WBEsconsideredtogether.
Row(2)providesresultsforallMBE/WBEs,regardlessofwhethertheywerecertifiedas
DBEs.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE2

Figure62.
ExampleofadisparityanalysistablefromAppendixK(sameasFigureK2inAppendixK)
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
15,446
4,509
1,431
3,078
110
542
287
1,661
343
135
$11,397,030
$1,434,119
$455,493
$978,626
$14,407
$82,340
$27,471
$791,296
$50,819
$12,292
$13,330,858
$1,680,388
$525,843
$1,154,545
$20,315
$115,316
$30,988
$924,753
$63,174
12.6
3.9
8.7
0.2
0.9
0.2
6.9
0.5
18.1
4.3
13.8
0.9
1.8
0.3
9.8
1.0

5.5

0.3

5.2

0.8

1.0
0.0

2.8

0.6
69.7
92.6
62.6
16.5
47.3
84.3
71.1
45.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
2,770
858
1,908
89
497
47
967
308
4
0
0
$449,206
$79,720
$368,975
$9,163
$71,691
$8,205
$262,817
$17,099
$511
$0
$0
$559,802
$98,569
$460,721
$13,396
$98,775
$8,922
$317,226
$22,403
$511
4.2
0.7
3.5
0.1
0.7
0.1
2.4
0.2
0.0
Notes: Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollarswereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotaldollarsofAfricanAmericanowned
firms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row11wouldbeaddedtocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source: BBCResearch&ConsultingDisparityAnalysis
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE3

Row(3)providesresultsforallWBEs,regardlessofwhethertheywerecertifiedasDBEs.
Row(4)providesresultsforallMBEs,regardlessofwhethertheywerecertifiedasDBEs.
Rows(5)through(10)provideresultsforbusinessesofeachindividualminoritygroup,
regardlessofwhethertheywerecertifiedasDBEs.
ThebottomhalfofFigure62reportsanalogousresultsforbusinessesthatwerecertifiedas
DBEsasofJuly6,2012.BBCincludedarowforwhitemaleownedDBEs,althoughtheanalysis
didnotidentifyanywhitemaleownedDBEsutilizedonCaltranstransportationprimecontracts
orsubcontractsduringthestudyperiod.
Utilization.Eachofthedisparitytablesincludesthesamecolumnsandrows:
Column(a)presentsthenumberofprimecontractsandsubcontracts(i.e.,contract
elements)thatthestudyteamanalyzedforthatparticularsetofcontracts.Asshowninrow
(1)ofcolumn(a)ofFigure62,thestudyteamanalyzed15,446totalcontractelements.
Thevaluepresentedincolumn(a)foreachindividualMBE/WBEgrouprepresentsthe
numberofcontractelementsonwhichbusinessesofthatparticularMBE/WBEgroupwere
utilized(e.g.,asshowninrow(5)ofcolumn(a),AfricanAmericanownedbusinesses
received110contractelements).
Column(b)presentsthedollars(inthousands)thatwereassociatedwiththesetofcontract
elements.Asshowninrow(1)ofcolumn(b)ofFigure62,thestudyteamexaminedabout
$11billionforthesetofcontractelements.Thedollartotalsincludebothprimecontract
andsubcontractdollars.
Column(c)presentsthecontractdollars(inthousands)forwhicheachMBE/WBEgroup
wasutilizedonthesetofcontractsafteradjustingtotaldollarsbythefollowingtwofactors:
LocalAssistancecontracts.BecauseBBCcollecteddataonasampleofcontracts
thatsubrecipientagenciesawardedthroughtheLocalAssistanceProgram,the
studyteamweightedthedatatoberepresentativeoftheentiresetofthose
contracts.AppendixDdescribesthesamplingandweightingprocedures.
Unidentifiedrace/ethnicity.BBCproratedthedollarsthatwenttobusinessesthat
thestudyteamidentifiedasMBEsbutforwhichspecificrace/ethnicityinformation
wasnotavailable.Asshowninrow(10)ofcolumn(b)ofFigure62,acrossall
transportationcontractsthatCaltransawardedduringthestudyperiod,therewas
approximately$12millionthatwenttobusinessesthatthestudyteamidentifiedas
MBEsforwhichnospecificrace/ethnicityinformationwasavailable.
Asshowninrow(1)ofcolumn(c)ofFigure62,thestudyteamexaminedabout$13billion
forthesetofcontractelementsafteradjustingtotaldollarsbythetwofactorsdescribed
above.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE4

Column(d)presentsthepercentageoftotaldollarsassociatedwiththesetofcontract
elementsforwhicheachMBE/WBEgroupwasutilized.Thestudyteamcalculatedeach
percentageincolumn(d)bydividingthedollarsgoingtoaparticulargroupincolumn(c)
bythetotaldollarsassociatedwiththesetofcontractelementsshowninrow(1)ofcolumn
(c),andthenexpressingtheresultasapercentage(e.g.,forAfricanAmericanowned
businesses,thestudyteamdivided$20.3millionby$13.3billionandmultipliedby100for
aresultof0.2%,asshowninrow(5)ofcolumn(d)).
Availability(utilizationbenchmark).Column(e)ofFigure62reportstheavailabilityof
eachMBE/WBEgroupforalltransportationprimecontractsandsubcontractsthatCaltrans
awardedduringthestudyperiod.Availabilityestimates,whicharerepresentedasapercentage
ofthetotalcontractingdollarsassociatedwiththesetofcontracts,serveasabenchmarkagainst
whichtocompareutilizationforaspecificgroupforaparticularsetofcontracts(e.g.,asshown
inrow(5)ofcolumn(e),availabilityofAfricanAmericanownedbusinessesis0.9%,compared
with0.2%utilizationforthosebusinesses).Inthedisparitytables,BBCdidnotseparately
calculateavailabilityfiguresforbusinessesthatwereDBEcertified.
Differencesbetweenutilizationandavailability.Thenextstepinanalyzingwhether
therewasadisparitybetweentheutilizationandavailabilityofaparticularMBE/WBEgroupis
tosubtracttheutilizationresultfromtheavailabilityresult.Column(f)ofFigure62presents
thepercentagepointdifferencebetweenutilizationandavailabilityforeachMBE/WBEgroup.
Forexample,asreportedinrow(2)ofcolumn(f)ofFigure62,MBE/WBEutilizationwas5.5
percentagepointsbelowMBE/WBEavailability.
Disparityindices.Itissometimesdifficulttointerpretabsolutepercentagedifferencesbetween
utilizationandavailability,especiallywhenthepercentagesarerelativelysmall.Therefore,BBC
alsocalculatedadisparityindexforeachMBE/WBEgroup,whichmeasuredutilizationrelative
toavailabilityandservedasametrictocompareanydisparitiesacrossdifferentMBE/WBE
groupsandacrossdifferentsetsofcontracts.BBCcalculateddisparityindicesbydividing
percentutilizationforeachgroupbypercentavailabilityandmultiplyingtheresultby100.Thus,
smallervaluesforthedisparityindicesindicatedgreaterdisparities(i.e.,agreaterdegreeof
underutilization).
Column(g)ofFigure62presentsthedisparityindexforeachMBE/WBEgroup.Forexample,as
reportedinrow(2)ofcolumn(g),thedisparityindexforallMBE/WBEsconsideredtogether
wasabout70,indicatingthatMBE/WBEsactuallyreceivedapproximately70centsofevery
dollarthattheymightbeexpectedtoreceivebasedontheiravailabilityforalltransportation
primecontractsandsubcontractsthatCaltransandsubrecipientlocalagenciesawardedduring
thestudyperiod.(BBCdidnotcalculatedisparityindicesseparatelyforbusinessesthatwere
DBEcertified.)
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE5

Resultswhendisparityindiceswereverylargeorwhenavailabilitywaszero.BBCappliedthe
followingruleswhendisparityindiceswereexceedinglylargeorcouldnotbecalculatedbecause
theavailabilitydatabasecontainednobusinessesofaparticulargroupidentifiedasavailablefor
aparticularsetofcontractelements:
WhenBBCscalculationsshowedadisparityindexexceeding200,BBCreportedanindexof
200+.Adisparityindexof200+meansthatutilizationwasmorethantwiceasmuchas
mightbeexpectedbasedontheavailabilityanalysis.
Whentherewasnoutilizationand0percentavailabilityforaparticulargroupfora
particularsetofcontracts,BBCreportedparitybetweenutilizationandavailability
(indicatedbyadisparityindexof100).
Whenutilizationforaparticulargroupforaparticularsetofcontractswasgreaterthan
0percentbutavailabilitywas0percent,BBCreportedadisparityindexof200+.
2
B.OverallDisparityAnalysisResultsforCaltransTransportationContracts
BBCusedthedisparityresultsfromFigure62(correspondingtoFigureK2inAppendixK)to
examineanydisparitiesbetweenMBE/WBEutilizationandavailabilityonalltransportation
relatedconstructionandengineeringprimecontractsandsubcontractsthatCaltransand
subrecipientlocalagenciesawardedduringthestudyperiod.Figure63presentsdisparity
indicesforallMBE/WBEsconsideredtogetherandseparatelyforeachMBE/WBEgroup.The
linedownthecenterofthegraphshowsadisparityindexlevelof100,whichindicatesparity
betweenutilizationandavailabilityforaparticulargroup.Disparityindiceslessthan100
indicatedisparitiesbetweenutilizationandavailability(i.e.,underutilization).Forreference,a
lineisalsodrawnatanindexlevelof80,becausesomecourtsuse80asathresholdforwhat
indicatesasubstantialdisparity.
2
AparticularMBE/WBEgroupcouldshowautilizationpercentagegreaterthan0percentbutanavailabilitypercentageof0
percentformanyreasons,includingthefactthatoneormoreutilizedbusinesseswereoutofbusinessbythetimeofBBCs
availabilitysurvey.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE6

Figure63.
Disparityindicesfor
FHWA andstate
fundedCaltransand
LocalAssistance
transportation
contractsforall
MBE/WBEsconsidered
togetherand
separatelybygroup,
20072010
Note:
SeeFigureK2fordetailedresults.
Source:
BBCResearch&Consulting.
AsshowninFigure63,overall,utilizationofMBE/WBEsonCaltransandLocalAssistance
transportationcontractsduringthestudyperiodwassubstantiallybelowwhatmightbe
expectedbasedontheavailabilityanalysisforthosecontracts.Thedisparityindexof70
indicatesthatallMBE/WBEsconsideredtogetherreceivedabout70percentofthecontract
dollarsthattheymightbeexpectedtoreceivebasedontheiravailabilityforthosecontracts.
OnlytwoMBE/WBEgroupsWBEs(disparityindexof93)andSubcontinentAsianAmerican
ownedbusinesses(disparityindexof84)didnotshowsubstantialdisparities(althoughboth
groupswerenonethelessunderutilized).Figure63showssubstantialdisparitiesinthe
utilizationofanumberofMBEgroups,includingfirmsownedbyAfricanAmericans(disparity
indexof17),AsianPacificAmericans(disparityindexof47),HispanicAmericans(disparity
indexof71)andNativeAmericans(disparityindexof45).Utilizationofwhitewomenowned
firmsforCaltransandLocalAssistancecontractsfor20072010wasbelowwhatmightbe
expectedfromtheavailabilityanalysis.ThedisparityindexforWBEsforthesecontracts93
indicatesthatthedisparitywasnotsubstantial.UtilizationofSubcontinentAsianAmerican
ownedfirmswasalsobelowwhatmightbeexpectedfromtheavailabilityanalysis.Becausethe
disparityindexforSubcontinentAsianAmericanownedfirmswasabove80,itdoesnotriseto
thelevelofasubstantialdisparityasdefinedbysomecourts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE7

C.DisparityAnalysisResultsforContractsIncludedintheRaceConscious
GoalsProgramandContractsNotIncludedintheGoalsProgram
BBCalsoexaminedwhetherthereweredisparitiesbetweenMBE/WBEutilizationand
availabilityoncontractsincludedintheraceconsciousDBEgoalsprogramandcontractsnot
includedinthisprogramthatCaltransandsubrecipientlocalagenciesawardedduringthestudy
period.AsexplainedinChapter5,therewerethreesetsoftransportationcontractsawarded
duringthestudyperiodtowhichtheUDBEcontractinggoalsprogramdidnotapply:
StatefundedcontractsthatCaltransandlocalagenciesawardedduringthestudyperiod;
FHWAfundedcontractsthatCaltransawardedbetweenJanuary1,2007andMarch31,
2009;and
FHWAfundedcontractsthatsubrecipientlocalagenciesawardedthroughtheLocal
AssistanceProgrambetweenJanuary1,2007andJune3,2009
Together,thesecontractsarenotedasnongoalscontracts.
CaltransincludedFHWAfundedconstructionandengineeringcontractsthatitawarded
betweenApril1,2009andDecember31,2010initsraceconsciousDBEgoalsprogram.
SubrecipientlocalagenciesincludedFHWAfundedconstructionandengineeringcontractsthat
theyawardedbetweenJune3,2009andDecember31,2010inCaltransraceconsciousgoals
programs.Together,thesetwosetsofcontractsarereferredtoasgoalscontracts.Onlyfirms
thatwereDBEcertifiedthatwereAfricanAmerican,AsianPacificAmerican,NativeAmerican
orwomenownedwereeligibletomeetcontractgoals.Thesefourgroupswerereferredtoas
UnderutilizedDisadvantagedBusinessEnterprises(UDBEs).Duringthegoalsperiod,Caltrans
reviewedindividualFHWAfundedcontractsanddeterminedwhethertoapplyacontract
specificraceconsciousgoalforacontractbasedonthesubcontractingopportunitiesonthat
contractandtheavailabilityofUDBEstoparticipateinthecontract.HispanicAmericanand
SubcontinentAsianAmericanownedDBEswerenoteligibletomeetUDBEgoals.
Figure64presentsdisparityindicesforMBE/WBEsandforindividualMBE/WBEgroupson
goalsandnongoalscontractsthatCaltransandsubrecipientlocalagenciesawardedduringthe
studyperiod.AsshowninFigure64,overall,MBE/WBEsweresubstantiallyunderutilizedon
bothgoalscontracts(disparityindexof62)andonnongoalscontracts(disparityindexof74).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE8

Figure64.
Disparityindicesfor
goalsandnongoals
CaltransandLocal
Assistance
transportation
contractsforall
MBE/WBEs
consideredtogether
andseparatelyby
group,20072010
Note:
SeeFiguresK5andK8for
correspondingdisparityresults
tables.
Source:
BBCResearch&Consulting
utilizationanalysis.
Contractsnotincludedintheraceconsciousgoalsprogram.MBE/WBEutilizationon
nongoalscontracts(13.2%)wassubstantiallylessthanwhatmightbeexpectedbasedonthe
availabilityanalysisfornongoalscontracts(17.9%).ThedisparityindexforMBE/WBEsis74.
ThereweresubstantialdisparitiesintheutilizationofAfricanAmerican,AsianPacific
American,HispanicAmericanandNativeAmericanownedfirms.
Utilizationofwomenownedfirmsonnongoalscontractswasatthelevelthatmightbe
expectedbasedontheavailabilityanalysis(disparityindexof101).UtilizationofSubcontinent
AsianAmericanownedfirmswasbelowwhatmightbeexpectedbaseduponavailabilityofthose
firms.Theresultingdisparityindexof90didnotindicateasubstantialdisparityfornongoals
contracts.FigureK5inAppendixKprovidesdetailedresults.
Contractsincludedintheraceconsciousgoalsprogram.MBE/WBEutilizationon
contractsforwhichtheraceconsciousgoalsprogramappliedwas11.5percent,whichwas
substantiallybelowwhatmightbeexpectedgiventheavailabilityanalysis(18.5%).The
resultingdisparityindexwas62.
Disparityresultsforcontractsundertheraceconsciousprogramindicatesubstantialdisparities
forWBEsandeachMBEgroup.Additionalinformationontheresultsforcontractsawarded
undertheraceconsciousgoalsprogramcanbefoundinAppendixK,FigureK8.
ApplicationofUDBEcontractgoalsbyCaltransandlocalagenciesdidnotremedythedisparities
identifiedforcertainMBEgroupswhennoraceconsciousprogramapplied.Asexaminedbelow,
theremaybereasonsotherthanapplicationoftheraceconsciousprogramcontributingtothe
lowerMBE/WBEutilizationandthedisparitiesfoundforCaltransandlocalagencygoals
contracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE9

D.ContractsAwardedDuring2007and2008andContractsAwarded
During2009and2010
Informationgatheredfromthequalitativeresearch(summarizedinChapter3)suggestedthat
recenteconomicdownturnhadasubstantialimpactonthetransportationcontractingindustry,
andthatmarketconditionssubstantiallyworsenedbetweenthebeginningofthestudyperiod
andtheendof2010.Therefore,thestudyteamcomparedresultsforcontractsawardedduring
2007and2008withcontractsawardedduring2009and2010.
Figure65presentsdisparityanalysisresultsforCaltransandLocalAssistancecontracts
awardedduringthefirsthalfofthestudyperiod(calendaryears2007and2008)andthesecond
halfofthestudyperiod(calendaryears2009and2010).Itappearsthatoveralldisparitiesfor
MBE/WBEsweremoreseverein20092010thaninthefirsthalfofthestudyperiod.Therewere
noMBE/WBEgroupsforwhichutilizationmatchedavailabilityduring20092010.
Disparitiesfor20092010contractsweresubstantialforwhitewomenownedfirmsandAfrican
American,AsianPacificAmerican,HispanicAmericanandNativeAmericanowned.The
disparitiesforSubcontinentAsianAmericanownedfirmsin20092010werenotatthelevelto
beidentifiedassubstantial.
Figure65.
Disparityindiceson
CaltransandLocal
AssistanceFHWA
andstatefunded
transportation
contractsawarded
during20072008
and20092010
forallMBE/WBEs
considered
togetherand
separatelybygroup
Note:
SeeFiguresK17andK18for
correspondingdisparityresults
tables.
Source:
BBCResearch&Consulting
utilizationanalysis.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE10

E.StatisticalSignificanceofDisparityAnalysisResults
Testingforstatisticalsignificancerelatesto
testingthedegreetowhicharesearchercan
rejectrandomchanceasanexplanationfor
anyobserveddifferences.Randomchancein
datasamplingisthefactorthatresearchers
considermostindeterminingthestatistical
significanceofresults.However,BBC
attemptedtocontacteveryfirmintherelevant
geographicmarketareathatD&Bidentified
asdoingbusinesswithinrelevant
subindustries(asdescribedinChapter4),
mitigatingmanyoftheconcernsassociated
withrandomchanceindatasamplingasthey
mayrelatetoBBCsavailabilityanalysis.Much
oftheutilizationanalysisalsoapproachesa
populationofcontracts.Therefore,one
mightconsideranydisparityidentifiedwhen
comparingoverallutilizationwithavailability
tobestatisticallysignificant.Figure66
explainsthehighlevelofstatisticalconfidence
intheutilizationandavailabilityresults.As
outlinedbelow,BBCalsousedasophisticated
statisticalsimulationtooltofurtherexamine
statisticalsignificanceofdisparityresults.
MonteCarloanalysis.Thereweremany
opportunitiesinthesetsofprimecontracts
andsubcontractsthatBBCanalyzedaspartof
thedisparitystudyforMBE/WBEstobe
awardedwork.Somecontractelements
involvedlargedollaramountsandothersinvolvedonlyafewthousanddollars.
MonteCarloanalysiswasausefultoolforthestudyteamtouseforstatisticalsignificancetesting
inthedisparitystudy,becausethereweremanyindividualchancesatwinningCaltransandlocal
agencytransportationprimecontractsandsubcontractsbetweenJanuary1,2007andDecember
31,2010,eachwithadifferentpayoff.Figure67describesBBCsuseofMonteCarloanalysis.
Figure66.
Confidenceintervalsforavailabilityand
utilizationmeasures
BBCconductedtelephoneinterviewswithmore
than15,000businessestablishmentsanumber
ofcompletedinterviewsthatisgenerally
consideredlargeenoughtobetreatedasa
population,notasample.BBCsanalysisofthe
confidenceintervalaroundtheestimateof
MBE/WBErepresentationamongallfirmsavailable
forCaltranstransportationwork,33.1percent,is
accuratewithinabout+/0.8percentagepointsat
the95percentconfidencelevel(BBCappliedthe
finitepopulationcorrectionfactorwhen
determiningconfidenceintervals).Atthislevelof
accuracyintheavailabilityanalysis,adisparity
indexof97wouldtechnicallybestatistically
significant.(Bycomparison,manysurveyresults
forproportionsreportedinthepopularpressare
+/ 5percentagepoints.)
BBCattemptedtocollectallCaltransconstruction
andengineeringcontracts.Bynecessity,BBCdrew
asampleofLocalAssistancecontractstobe
reportedonbylocalagencies.Evenwiththe
sample,BBCobtainedcontractsthatcomprisedan
estimated55percentofLocalAssistance
constructionandengineeringdollars.Therefore,
theoverallMBE/WBEutilizationfigureof12.6
percentforallcontractsisaccuratewithin+/ 0.8
percentagepointsatthe95percentconfidence
level).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE11

Figure67.
MonteCarloAnalysis
ThestudyteambegantheMonteCarloanalysisbyexaminingindividualcontractelements.Foreachcontract
element,BBCsavailabilitydatabaseprovidedinformationonindividualbusinessesthatwereavailableforthat
contractelement,basedontypeofwork,contractorrole,contractsize,andlocationofthework.
Thestudyteamassumedthateachavailablefirmhadanequalchanceofreceivingthatcontractelement.For
example,theoddsofaWBEreceivingthatcontractelementwereequaltothenumberofWBEsavailablefor
thecontractelementdividedbythetotalnumberoffirmsavailableforthework.TheMonteCarlosimulation
thenrandomlychoseabusinessfromthepoolofavailablebusinessestoreceivethatcontractelement.
TheMonteCarlosimulationrepeatedtheaboveprocessforallotherelementsinaparticularsetofcontracts.
TheoutputofasingleMonteCarlosimulationforallcontractelementsinthesetrepresentedsimulated
utilizationofMBE/WBEs,bygroup,forthatsetofcontractelements.
TheentireMonteCarlosimulationwasthenrepeated1milliontimesforeachsetofcontracts.Thecombined
outputfromall1millionsimulationsrepresentedaprobabilitydistributionoftheoverallutilizationof
MBE/WBEsifcontractswereawardedrandomlybasedontheavailabilityofbusinessesworkinginthe
Californiatransportationcontractingindustry.
TheoutputoftheMonteCarlosimulationsrepresentsthenumberofrunsoutof1millionthatproduceda
simulatedutilizationresultthatwasequalorbelowtheobservedutilizationintheactualdataforeach
MBE/WBEgroupandforeachsetofcontracts.Ifthatnumberwaslessthanorequalto25,000(i.e.,2.5%ofthe
totalnumberofruns),thenthedisparityindexisconsideredtobestatisticallysignificant.
Results.Figure68presentstheresultsfromtheMonteCarloanalysisastheyrelatetothe
statisticalsignificanceofdisparitiesthatthestudyteamobservedforMBE/WBEs.
BBCidentifieddisparitiesforMBEsoverallforallcontracts,andforMBEsandWBEsfor
contractsawardedin2009and2010theMonteCarlosimulationfocusedontheseresults.
Duetothelargenumberofcontractelementsanalyzedforallcontractsduringthestudyperiod,
BBCalsoexaminedstatisticalsignificanceforindividualMBEgroups.Theresultsallowoneto
rejectchanceasacauseforthedisparitiesforeachMBEgroupwiththeexceptionof
SubcontinentAsianAmericans.
Itisimportanttonotethatthistestmaynotbenecessarytoestablishstatisticalsignificanceof
results(seediscussioninFigure66andelsewhereinthisChapter),anditmaynotbe
appropriateforverysmallpopulationsoffirms(includingSubcontinentAsianAmericanowned
firmsintheCaliforniatransportationcontractingindustry).
3
3
Eveniftherewerezeroutilizationofaparticulargroup,MonteCarlosimulationmightnotrejectchanceincontractawardsas
anexplanationforthatresultiftherewereasmallnumberoffirmsinthatgrouporasmallnumberofcontractelements
includedintheanalysis.Resultscanalsobeaffectedbythesizedistributionofcontractelements.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE12

"

Figure68.
MonteCarloresultsforallcontractsandcontractsawardedin2009and2010
MBE/WBEGroup
Rejectchance
inawardsofcontracts
asa
causeofdisparity?
Probabilityof
observeddisparity
occurringdueto
chance"
Disparity
index
Numberofsimulation
runsoutofonemillion
thatreplicated
observedutilization
Allcontracts
MBE 63 0 <0.1 % Yes
WBE 93 153,556 15.4 No
Contractsin2009and2010
MBE 60 21 <0.1 % Yes
WBE 70 0 <0.1 Yes
Note: Numbersroundedtonearesttenthof1percent.Numbersmaynotaddtototalsduetorounding.
Source: BBCResearch&ConsultingfromdataonCaltransandlocalagencycontracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER6,PAGE13

CHAPTER7.
FurtherExplorationofAnyDisparities
FiveareasofquestionsemergefromthedisparitiesobservedinMBE/WBEutilizationon
Caltranscontracts:
A. Aredisparitiesfoundinsomeregionsofthestateandnotinothers?
B. AretheredisparitiesforCaltranscontractsandforLocalAssistancecontracts?
C. AretheredisparitiesforCaltransandLocalAssistanceconstructioncontracts?
D. AretheredisparitiesforCaltransandLocalAssistanceengineeringrelatedcontracts?
E. IsthereanyevidenceofoverconcentrationofDBEsincertaintypesofwork?
AnswerstotheabovequestionsmayberelevantasCaltransconsiderswhetherallorhowmuch
ofitsoverallannualDBEgoalcanbemetthroughraceandgenderneutralmeansandwhat
measuresmaybeneededinimplementingthefederalregulations.Inaccordancewiththe
FederalDBEProgram,resultsmayalsohelptheDepartment,ifnecessary,identifythespecific
racial/ethnic/gendergroupsthatmightbeincludedinanyfutureraceorgenderconscious
programs.
BecauseChapters5and6didnotfindthatapplicationofaraceconsciousprogramincreased
overallMBE/WBEparticipationinCaltransandLocalAssistancecontracts,theadditional
analysesinChapter7combinedFHWAandstatefundedcontractsregardlessofapplicationof
DBEcontractgoals.
A.Aredisparitiesfoundinsomeregionsofthestateandnotinothers?
Thestudyteamexaminedutilizationanddisparityanalysisresultsindividuallyforfourregions
ofCalifornia:
North(Districts1,2and3);
SanFranciscoBayArea(District4);
Central(Districts5,6,9and10);and
SouthernCalifornia(Districts7,8,11and12).
OverallMBE/WBEutilizationinFHWAandstatefundedCaltransandLocalAssistance
contractsfor2007through2010variedfrom8.4percentinCentralCaliforniato15.3percentin
SouthernCalifornia.
1
Utilizationwasbelowavailabilityineachofthefourregions.Therewere
substantialdisparitiesforMBEsoverallineachregion.ForWBEs,thereweresubstantial
1
CertifiedDBEparticipationfrom2007through2010variedfrom3.9percentinCentralCaliforniato4.4percentinSouthern
California.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE1

disparitiesinoverallutilizationintheSanFranciscoBayArea(disparityindexof76)andCentral
California(disparityindexof39).
Insum,itdoesnotappearthatdisparitiesintheutilizationofMBEsinCaltranscontractsare
foundinsomeregionsofthestateandnotinothers.OverallresultsbyregiondifferedforWBEs.
AppendixKprovidesdetailedutilizationanddisparityresultsforeachregion,beginningwith
FigureK42.
B.AretheredisparitiesforCaltransandLocalAssistanceconstruction
contracts?
SomeoftheFHWAandstatefundedcontractsBBCexaminedwereawardedbycities,counties
andotherlocalagenciesusingfundsadministeredthroughCaltrans.TheseLocalAssistance
contractswereabout$4billionofthe$13billionintotalcontractsexaminedinthedisparity
study.
2
BBCexaminedutilizationandavailabilityresultsforLocalAssistancecontractscomparedwith
contractsawardedbyCaltrans.
UtilizationofMBE/WBEsfor2007through2010wasverysimilarforLocalAssistance
contracts(12.7%)andforCaltranscontracts(12.6%).
ThereweresubstantialdisparitiesinMBE/WBEutilizationforbothsetsofcontracts
(disparityindexof63forLocalAssistancecontractsand74forCaltranscontracts).
ThereweresubstantialdisparitiesforMBEsforbothsetsofcontractsandforWBEsfor
LocalAssistancecontracts.
FiguresK20andK23inAppendixKprovidedetailedutilizationanddisparityresultsfor
CaltransawardedcontractsandLocalAssistancecontracts.
C.AretheredisparitiesforCaltransandLocalAssistanceconstruction
contracts?
BBCexaminedseveralquestionsconcerningdisparityresultsforCaltransconstruction
contracts:
1. AretheredisparitiesforMBEsandWBEsonCaltransandLocalAssistance
constructioncontracts?
2. Doresultsdifferforconstructionprimecontractsandsubcontracts?
3. AretheredisparitiesintheuseofMBE/WBEprimecontractorsforsmall
constructioncontracts?
2
The$4billionfigurereferstotheestimatedtotalofLocalAssistancetransportationcontractsusingfundsadministered
throughCaltrans.BBCbasedtheanalysesofLocalAssistancecontractsonastatisticallyreliablesampleofthosecontracts;the
sampletotaledabout$2billionincontractdollars.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE2

4. DoesanalysisofMBE/WBEbidsonconstructionprimecontractshelptoexplain
disparityresults?
1.AretheredisparitiesforMBEsandWBEsonCaltransandLocalAssistance
constructioncontracts?Ofthe$13billionincontractdollarsfor2007through2010
examinedinthedisparitystudy,allbut$0.5billionwereforconstructioncontracts.Therefore,
utilizationanddisparityresultsfocusingsolelyonconstructioncontractscloselymatchresults
forallcontractspresentedinChapters5and6.
MBE/WBEutilizationforCaltransandLocalAssistanceconstructioncontractswas12.7
percentfor2007through2010,aboutthesameresultasforallcontracts(12.6%).About7
percentofconstructioncontractdollarswenttoHispanicAmericanownedfirmsand4
percentwenttoWBEs(seeFigureK3inAppendixK).
TheoveralldisparityindexofCaltransandLocalAssistanceconstructioncontractswas73,
aboutthesameasforallcontracts(70).
Figure71presentsdisparityindicesbygroupforCaltransandLocalAssistanceconstruction
contractsfor2007through2010.
ThereweresubstantialdisparitiesforeachMBEgroupexceptforSubcontinentAsian
Americans.
For2007through2010,utilizationofWBEsonconstructioncontracts(4.0%)wasonly
slightlybelowwhatmightbeexpectedfromtheavailabilityanalysis(4.2%),witha
resultingdisparityindexof95forWBEsinconstruction.
FigureK3inAppendixKpresentsdetailedresults.
Figure71.
Disparityindicesfor
MBE/WBEutilizationas
primecontractorsand
subcontractorson
CaltransandLocal
AssistanceFHWA and
statefunded
constructioncontracts,
20072010
Note:
Numberofcontracts/subcontracts
analyzedis14,636.
Formoredetail,seeFigureK3in
AppendixK.
Source:
BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE3

BBCalsoexaminedutilizationanddisparityresultsforconstructioncontractsfor:
CombinedstatefundedcontractsandFHWAfundedcontractsforwhichnoraceconscious
programapplied(seeFigureK6);and
FHWAfundedcontractsduringthetimeperiodwhenDBEcontractgoalsappliedtosomeof
thesecontracts(seeFigureK9).
Resultswereagainverysimilartothesameanalysisforallcontracts(seeFiguresK5andK8).
MBE/WBEutilizationonconstructioncontractsforwhichnoraceconsciousprogramapplied
washigher(13.3%)thanwhentheDBEcontractgoalsprogramdidapply(11.6%),eventhough
DBEparticipationwassomewhathigheronconstructioncontractsundertheDBEcontractgoals
program.
2.Doresultsdifferforconstructionprimecontractsandsubcontracts?BBCexplored
differencesinMBE/WBEutilizationforconstructionprimecontractsandsubcontracts.
Utilization.Minorityandwomenownedfirmsreceived$0.7billionofthe$9.3billioninprime
contractdollarsforCaltransandLocalAssistanceconstructionfrom2007through2010.
MBE/WBEutilizationwas7.1percentoftotalprimecontractdollars.CertifiedDBEsaccounted
for1.6percentagepointsoftheutilizationasprimecontractors,asshownintheleftsideof
Figure72.
SubcontractdollarsonCaltransandLocalAssistanceconstructioncontractstotaledabout$3.5
billionfrom2007through2010,andminorityandwomenownedfirmsreceivedabout$1
billionofthistotal.AsshownontherightsideofFigure72,MBE/WBEsaccountedfor27.4
percentofsubcontractdollarsonCaltransandLocalAssistanceconstructioncontracts(Certified
DBEsrepresented10.6percentagepointsofthisutilization).
Figure72.
MBE/WBEandDBEshareof
FHWA andstatefundedprime
contractandsubcontractdollars
onCaltransandLocalAssistance
constructioncontracts,
20072010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis2,695for
primecontractsand11,941forsubcontracts.
FormoredetailandresultsbygroupseeFiguresK27
andK30inAppendixK.
Source:
BBCResearch&ConsultingfromCaltransandlocal
agencycontractdata.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE4

Disparityanalysis.Figure73showsdisparityindicesforconstructionprimecontracts(darker
bars)andsubcontracts(lighterbars)foreachracial/ethnic/gendergroup.Resultspertainto
CaltransandLocalAssistanceconstructioncontractsfor2007through2010.
Overall,thereweresubstantialdisparitiesforMBE/WBEsforconstructionprimecontracts
(disparityindexof56)whenexaminingcombinedFHWAandstatefundedconstruction
contracts.
UtilizationofMBE/WBEassubcontractorsonconstructioncontractswasbelowwhatmight
beexpectedfromtheavailabilityanalysis,butmuchclosertoparity(disparityindexof92).
FiguresK27andK30inAppendixKpresentdetailedresults.
Figure73.
Disparityindicesfor
MBE/WBEutilizationon
CaltransandLocal
AssistanceFHWAand
statefundedconstruction
primecontractsand
subcontracts,20072010
Note:
Numberofcontracts/subcontractsanalyzed
is2,695forprimecontractsand11.941for
subcontracts.
Formoredetailandresultsbygroupsee
FiguresK27andK30inAppendixK.
Source:
BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE5

3.AretheredisparitiesintheuseofMBE/WBEprimecontractorsforsmall
constructioncontracts?ThesizeofCaltransandlocalagencyconstructionprimecontracts
maypresentabarrierforcertainMBE/WBEgroups.Anumberofcontractorsinterviewedbythe
studyteamindicatedthatsizeofcontractswasabarriertobidding(seeAppendicesJandL).
Toexplorethisissue,BBCexaminedMBE/WBEutilizationandavailabilityasprimecontractors
for2,034constructioncontractsoflessthan$2million.(Constructioncontractslessthan$2
millionaccountforthreequartersofallconstructioncontractsexamined.)BBCcompared
resultsforsmallconstructioncontractswithcontractsthatwere$2millionandlarger.
Utilization.Figure74presentsutilizationresultsforprimecontractorsforsmallconstruction
contractswithlargerconstructioncontracts($2millionandabove).ResultspertaintoCaltrans
andLocalAssistanceconstructioncontractsfor2007through2010.
AsillustratedinFigure74,utilizationofMBE/WBEsasprimecontractorswashigherforsmall
constructioncontracts(15.3%)thanlargecontracts(5.4%).
Figure74.
MBE/WBEandDBEshareof
FHWA andstatefunded
constructionprimecontract
dollarsonCaltransandLocal
Assistanceconstructioncontracts,
bycontractsize,20072010
Note:
CertifiedDBEutilization.
Smallcontractsarethoselessthan$2million.Number
ofcontractsanalyzedis2,034forsmallcontractsand
661forlargecontracts.
FormoredetailandresultsbygroupseeFiguresK46
andK48inAppendixK.
Source:
BBCResearch&ConsultingfromCaltranscontractdata.
Disparityanalysis.Relativelymorefirmsavailableforsmallconstructionprimecontractsare
MBE/WBEscomparedwithlargeconstructionprimecontracts.ThelevelofMBE/WBE
utilizationthatmightbeexpectedforsmallconstructionprimecontractswas28.5percent(see
FigureK46inAppendixK)comparedwith9.6percentforlargeconstructionprimecontracts
(seeFigureK48).Overall,thereweredisparitiesintheutilizationofMBE/WBEsforbothsetsof
constructionprimecontracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE6

Figure75showsdisparityindicesbyracial/ethnic/gendergroupforconstructionprime
contracts.Thedarkerbarsprovideresultsforsmallconstructioncontractsandthelighterbars
presentresultsforlargeconstructioncontracts.
ThereweresubstantialdisparitiesforWBEsandforeachMBEgroupwhenexamining
resultsforprimecontractorsforsmallconstructioncontracts.
ThereweresubstantialdisparitiesforeachMBEgroupwhenexaminingresultsforprime
contractorsforlargeconstructioncontracts.
UtilizationofWBEsasprimecontractorsonlargeconstructioncontracts(1.6%)exceededwhat
mightbeexpectedfromtheavailabilityanalysis(0.8%).ThedisparityindexforWBEsasprime
contractorswas184forlargeconstructioncontracts.
Figure75.
Disparityindicesfor
MBE/WBEutilizationas
primecontractorson
FHWAandstatefunded
CaltransandLocal
Assistanceconstruction
contracts,bycontract
size,20072010
Note:
Smallcontractsarethoselessthan$2
million.Numberofcontractsanalyzedis
2,034forsmallcontractsand661for
largecontracts.
Formoredetailandresultsbygroupsee
FiguresK46andK48inAppendixK.
Source:
BBCResearch&Consulting.
TheresultsforWBEsasprimecontractorsonlargeconstructioncontractsexplainsmuchofthe
overalldisparityresultsforWBEsonCaltransandLocalAssistanceconstructioncontracts
showninFigure71.Furthermore,manyoftheWBEsthatwereprimecontractorsonlarge
constructioncontractsmightexceedtherevenuesizestandardforDBEcertification.Onevery
largeWBEgeneralcontractoraccountsfornearlyonehalfoftheWBEprimecontractor
utilizationforlargeconstructioncontracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE7

4.DoesanalysisofMBE/WBEbidsonconstructionprimecontractshelptoexplain
disparityresults?BBCanalyzedbidinformationforarandomsampleof200Caltrans
constructioncontractsfor2007through2010.Intotal,1,539bidsweresubmittedforthese200
contracts.
3
RelativenumberofbidsfromMBE/WBEs.MBE/WBEssubmitted186(12.1%)ofthe1,539bids:
Atotalof126bidsontheseprimecontracts(8.2%ofallbids)camefromminorityowned
firms(45differentfirms);and
60bids(3.9%ofallbids)camefromWBEs(18differentfirms).
BBCcomparedtheseresultstodataonMBE/WBEandmajorityownedtransportation
contractingfirmsinCaliforniabiddingasprimecontractorsonpublicsectorconstruction
projects.Basedoninformationcollectedintheavailabilityinterviews,MBEsaccountfor20
percentandWBEsare13percentofthoseprimecontractors.AppendixH(especiallyFigureH2)
providesmoreinformationonavailabilityinterviewresults.
Successofbids.AsshowninFigure76,17percentofthebidssubmittedbyMBEsresultedin
contractawards,abovethe13percentsuccessratefoundformajorityownedfirmsand8
percentsuccessrateforWBEs.
Onsixcontracts,lowbidsfromMBEsdidnotresultincontractawards.Fortwoofthesix
contracts,amajorityownedcontractorclaimedsmallbusinesspreferenceandwasawardedthe
contractasaresult.Inthreecases,thebidprioritizedashortertimeframeforcompletionofthe
work,andmajorityownedcontractorswithshorterperformanceperiodsintheirbidswere
awardedthecontracts.
Figure76.
Proportionofbidson
Caltransconstruction
contractsthatwere
winningbids,
20072010
Note:
Basedonanalysisof1,539bidson
200contracts.
Source:
BBCResearch&Consultingfrom
Caltranscontractrecords.
3
Therandomsampleof200contractsaccountfornearly$4billionworthofconstructioncontractsexaminedaspartofthis
study.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE8

D.AretheredisparitiesforCaltransandLocalAssistanceengineering
relatedcontracts?
Aswithconstructioncontracts,BBCfurtheranalyzedCaltransandLocalAssistanceengineering
relatedcontracts.QuestionsexaminedinthisChapterinclude:
1. AretheredisparitiesforCaltransandLocalAssistanceengineeringrelatedcontracts?
2. Doresultsdifferforengineeringprimecontractsandsubcontracts?
3. Aretheredifferentresultsforsmallengineeringprimecontracts?
4. DoesCaltransconsultantselectionprocessexplainanyofthedisparities?
1.AretheredisparitiesforMBEsandWBEsonCaltransandLocalAssistance
engineeringrelatedcontracts?BBCexaminedMBE/WBEutilizationfor$0.5billionin
engineeringrelatedcontractsforCaltransandlocalagenciesfrom2007through2010.
MBE/WBEutilizationforCaltransandLocalAssistanceengineeringrelatedcontractswas
9.7percentfor2007through2010,lowerthanforconstructioncontracts(12.7%).
ThedisparityindexforMBE/WBEsoverallforCaltransandLocalAssistanceengineering
relatedcontractswas29,moreseverethanforconstructioncontracts(73).
FigureK4inAppendixKpresentsdetailedresultsoftheutilization,availabilityanddisparity
analysesforengineeringrelatedcontractsfor2007through2010.Figure77summarizesthe
disparityresultsforMBE/WBEgroup.AsshowninFigure77,thereweresubstantialdisparities
forWBEsandeachMBEgroup.
Figure77.
Disparityindicesfor
MBE/WBEutilizationas
primecontractorsand
subcontractorson
CaltransandLocal
AssistanceFHWA and
statefundedengineering
contracts,20072010
Note:
Numberofcontracts/subcontracts
analyzedis810.
Formoredetail,seeFigureK4in
AppendixK.
Source:
BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE9

BBCalsoexaminedutilizationanddisparityresultsforengineeringrelatedcontractsoutsideany
raceconsciousprogram(FigureK7inAppendixK).Theseresultscombinestatefunded
contractsandtheFHWAfundedcontractsduringthetimewhennoraceconsciousprogramwas
inplace.BBCcomparedthoseresultswithMBE/WBEparticipationinFHWAfundedcontracts
whenaraceconsciousprogramwasinoperation(seeFigureK10inAppendixK).MBE/WBE
utilizationwashigherforengineeringrelatedcontractswithoutanyraceconsciousprogram
thanwiththeraceconsciousprogram:
MBE/WBEutilizationonengineeringcontractsforwhichnoraceconsciousprogram
appliedwas10.1percent;and
ForFHWAfundedcontractsduringthetimeperiodwhenraceconsciouselementssuchas
DBEcontractgoalscouldbeapplied,MBE/WBEutilizationwas7.7percent.
ThereweresubstantialdisparitiesintheutilizationofWBEsandeachMBEgroupforbothsetsof
engineeringrelatedcontracts.ConsistentwithBBCsanalysisofconstructioncontracts,itdoes
notappearthatapplicationoftheraceconsciousprogramincreasedtheutilizationof
MBE/WBEsinCaltransandLocalAssistanceengineeringrelatedcontracts.
BBCseparatelyexaminedMBE/WBEparticipationonengineeringrelatedcontractsawardedby
Caltransandbylocalagencies.TherewaslittledifferenceinMBE/WBEparticipationforthese
twosetsofengineeringrelatedcontracts:
MBE/WBEutilizationonCaltransawardedcontractswas9.5percent(seeFigureK22in
AppendixK);and
ForLocalAssistancecontracts,MBE/WBEutilizationwas10.2percent(seeFigureK25in
AppendixK).
ThereweresubstantialdisparitiesintheutilizationofMBE/WBEsforCaltransandforlocal
agencyengineeringrelatedcontractsfor2007through2010.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE10

2.Doresultsdifferforengineeringprimecontractsandsubcontracts?BBCanalyzed
MBE/WBEparticipationasprimeconsultantsandassubconsultantsonCaltransandLocal
Assistanceengineeringrelatedcontracts.
Utilization.MBEsandWBEsreceived$20millionofthe$401millioninprimecontractdollars
forCaltransandLocalAssistanceengineeringrelatedcontractsfrom2007through2010.
MBE/WBEutilizationasprimeconsultantswas5.0percent,lessthanMBE/WBEutilizationon
constructionprimecontracts(7.1%).Figure78presentstheseresults.
SubconsultantdollarsonCaltransandLocalAssistanceengineeringrelatedcontractstotaled
$109millionfrom2007through2010.About$29millionofthesubcontractdollarswentto
minorityandwomenownedfirms.MBE/WBEsutilizationassubconsultantswas26.7percent,
aboutthesameshareasforconstructionsubcontracts.UnlikeMBE/WBEutilizationin
constructionsubcontracts,AsianPacificAmericansrepresentedalargeshareoftheutilization
onengineeringrelatedcontracts.
ComparedwithCaltransandLocalAssistanceconstructioncontracts,certifiedDBEsrepresented
alargershareoftotalMBE/WBEparticipationonengineeringrelatedcontracts.CertifiedDBEs
accountedfortwothirdsoftheoverallMBE/WBEutilizationasprimeconsultantsandaneven
largerportionofthesubconsultantutilization).
Figure78.
MBE/WBEandDBEshareof
FHWAandstatefundedprime
contractandsubcontractdollars
onCaltransandLocalAssistance
engineeringcontracts,
20072010
Note:
CertifiedDBEutilization.
Numberofcontracts/subcontractsanalyzedis245for
primecontractsand565forsubcontracts.
FormoredetailandresultsbygroupseeFiguresK28
andK31inAppendixK.
Source:
BBCResearch&ConsultingfromCaltransandlocal
agencycontractdata.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE11

Disparityanalysis.Figure79examinesdisparityanalysisresultsforprimeconsultants(darker
bars)andassubconsultants(lighterbars)onCaltransandLocalAssistanceengineeringrelated
contractsfor2007through2010.
ThereweresubstantialdisparitiesforMBE/WBEsforengineeringrelatedprimecontracts.
BBCidentifiedsubstantialdisparitiesforWBEsandeachMBEgroup.
UtilizationofMBE/WBEassubconsultantsonengineeringrelatedcontractswasbelow
whatmightbeexpectedfromtheavailabilityanalysis(disparityindexforMBE/WBEsof
77).ThereweresubstantialdisparitiesforWBEsandmostMBEgroups.
FiguresK27andK30inAppendixKpresentdetailedresults.
Figure79.
Disparityindicesfor
MBE/WBEutilizationon
CaltransandLocal
AssistanceFHWAand
statefundedengineering
relatedprimecontracts
andsubcontracts,2007
2010
Note:
Numberofcontracts/subcontractsanalyzed
is245forprimecontractsand565for
subcontracts.
Formoredetailandresultsbygroupsee
FiguresK28andK31inAppendixK.
Source:
BBCResearch&ConsultingfromCaltrans
andlocalagencycontractdata.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE12

3.AretheredisparitiesintheuseofMBE/WBEprimeconsultantsforsmall
engineeringrelatedcontracts?Aswithconstructioncontracts,thesizeofCaltransandLocal
AssistanceengineeringrelatedcontractsmaypresentabarriertoMBE/WBEparticipationas
primeconsultants.Someoftheengineeringfirmsinterviewedbythestudyteamindicatedthat
sizeofcontractswasabarriertobidding(seeAppendicesJandL).
Toexplorethisissue,BBCexaminedMBE/WBEutilizationandavailabilityasprimecontractors
for120engineeringrelatedcontractsoflessthan$500,000.(Aboutonehalfofallengineering
relatedcontractsexaminedwerelessthan$500,000).BBCcomparedresultsforsmall
engineeringrelatedcontractswithcontractsthatwere$500,000andlarger.
Utilization.Figure710comparesutilizationofMBE/WBEprimeconsultantsonsmall
engineeringrelatedcontractswithlargercontracts.ResultspertaintoCaltransandLocal
Assistanceconstructioncontractsfor2007through2010.
UtilizationofMBE/WBEsasprimeconsultantswashigherforsmallcontracts(16.1%)thanlarge
contracts(4.2%).
Figure710.
MBE/WBEandDBEshareof
FHWA andstatefunded
constructionprimecontract
dollarsonCaltransandLocal
Assistanceengineeringrelated
contracts,bycontractsize,
20072010
Note:
CertifiedDBEutilization.
Smallcontractsarethoselessthan$500,000.Number
ofcontractsanalyzedis120forsmallcontractsand
125forlargecontracts.
FormoredetailandresultsbygroupseeFiguresK47
andK49inAppendixK.
Source:
BBCResearch&ConsultingfromCaltransandlocal
agencycontractdata.
Disparityanalysis.BBCidentifieddisparitiesintheutilizationofMBE/WBEsasprime
consultantsforbothlargeandsmallengineeringrelatedcontracts.Evenwiththehigher
utilizationofMBE/WBEsasprimeconsultantsforsmallcontracts,thedisparityindexof48
indicatessubstantialdisparitiesintheutilizationofthosefirms.Thedisparityindexwas13for
MBE/WBEprimeconsultantsonlargeengineeringrelatedcontracts.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE13

Figure711showsdisparityindicesbyracial/ethnic/gendergroupforCaltransandLocal
Assistanceengineeringrelatedprimecontracts.ThereweresubstantialdisparitiesforWBEsand
eachMBEgroupforbothlargeandsmallcontracts.
Figure711.
Disparityindicesfor
MBE/WBEutilizationas
primecontractorson
FHWAandstatefunded
CaltransandLocal
Assistanceengineering
relatedcontracts,by
contractsize,20072010
Note:
Smallcontractsarethoselessthan
$500,000.Numberofcontractsanalyzedis
120forsmallcontractsand125forlarge
contracts.
Formoredetailandresultsbygroupsee
FiguresK47andK49inAppendixK.
Source:
BBCResearch&ConsultingfromCaltrans
andlocalagencycontractdata.
4.DoesCaltransconsultantselectionprocessexplainanyofthedisparities?Caltranstypically
beginstheconsultantselectionprocessforaspecificengineeringrelatedcontractbyrequesting
thatconsultantsrespondtorequestsforqualifications,whichareevaluatedbyacommittee
withinCaltrans.(ResponsestoRFQsarereferredtoasproposalsinthisreport.)TheCaltrans
committeetypicallyevaluatesconsultantsbasedonthefollowingcriteria:
Professionalexcellence,demonstratedcompetenceintheservicetobeprovided,and
specializedexperienceoftheprimeandsubconsultants.
EducationandexperienceoftheProjectManagerandotherkeypersonneltobeassigned.
Staffingcapability,workload,andrecordofmeetingschedulesonsimilarprojects,including
anassessmentofthefirmsabilitytohandleadditionalwork,inviewofthefirmscurrent
workload.
Thenature,quality,andrelevanceofrecentlycompletedwork.
Feasibilityofoversight,ability,willingnesstorespondtoDepartmentrequirements,and
accessibilitytoDepartmentreviewers.
4
4
LanguagetakenfromCaltransStandard215AgreementAttachment.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE14

Fromthelistofconsultantsthatsubmitproposals,theCaltranscommitteeselectsashortlistof
consultantstobeaskedtoaninterview.Caltranstypicallyincludesatleastthethreehighest
rankingconsultantsintheinterviewprocess.Thecommitteethendeterminestheawardbased
onanevaluationoftheinterview,withevaluationcriteriabasedontheprojectteam,thefirms
capabilities,theirprojectunderstandingandapproach,thefeasibilityofoversightfromCaltrans
andreferences.Inaccordancewithregulationsregardingqualificationsbasedprocurement,
Caltransnegotiatespriceaftertheconsultantisselected.
BBCanalyzedMBEandWBEsuccesswhencompetingforengineeringrelatedcontracts.The
studyteamwasabletocollectproposalevaluationdatafor60Caltransengineeringrelated
projectsforcontractsexecutedduringthestudyperiod.BBCanalyzed52contractswith
completeevaluationdata.Ofthe360proposalssubmittedonthe52contractsanalyzed,65
(18%)weresubmittedbyMBEsand27(8%)weresubmittedbyWBEs.
TheproportionofproposalsfromWBEswaslowcomparedwiththeshareofWBEfirms
competingasprimeconsultantsonpublicsectorengineeringprojectsbasedonresponsesfrom
theavailabilityinterviews(11%forWBEsseeFigureH3).ForMBEs,theproportionof
proposalssubmittedwassimilartotheshareofMBEfirmscompetingasprimeconsultantson
publicsectorengineeringprojectsbasedonresponsesfromtheavailabilityinterviews(19%for
MBEsseeFigureH3).
ThereweredisparitiesinpercentageofproposalsthatwereshortlistedbyCaltrans.Thetop
portionofFigure712illustratesthat:
TwentythreeoftheproposalsfromMBEs(35%ofMBEproposals)resultedinshortlisting;
Seven(26%)ofproposalsfromWBEswereshortlisted;and
About53percentofmajorityownedfirmsproposalswereplacedontheshortlist.
AsshowninthelowerportionofFigure712,BBCalsocalculatedthepercentageofproposal
submissionsthatresultedincontractawards:
Sevenofthe23proposalsfromMBEsresultedinacontractaward(30%success).
OneproposalfromWBEsresultedinanaward,asuccessrateof14percent.
Fortyfouroftheanalyzedcontractawardswenttomajorityownedfirms(44awardsfrom
268proposalsubmissionsforasuccessrateof16%).
MBEsweresomewhatmoresuccessfulthanWBEandmajorityfirmsontheseprojects.WBEs
experiencedasimilarsuccessratetomajorityfirms.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE15

Figure712.
Proportionofproposalsfor
Caltransengineering
relatedcontractsthat
wereshortlistedandthat
resultedincontract
awards,20072010
Note:
Basedon52awards(360proposals).
Source:
BBCResearch&ConsultingfromCaltrans
contractrecords.
Forthe360proposalsubmissionsreceivedon52engineeringrelatedprojects,BBCcompared
theproposalevaluationscoresreceivedbymajorityownedfirmswiththosereceivedbyMBEs
andWBEs.Onaverage,MBEproposalsreceivedlowerscoresthanscoresCaltransassignedto
majorityownedfirmsinfourofthefiveevaluationcategories:
Professionalexcellence,competence,andspecializedexperience;
EducationandexperienceoftheProjectManagerandotherkeypersonnel;
Staffingcapability,workload,andrecordforcompletingworkontime;and
Nature,quality,andrelevanceofrecentlycompletedwork.
WBEsalsoscoredlower,onaverage,ineachofthecategoriesaboveinadditiontothecategory
forthefeasibilityofprojectcompletionandoversight.Thedifferencesinaveragescoreswere
largerwhencomparingscoresforWBEstoscoresformajorityfirms.
Overall,basedonthissubsetofengineeringrelatedcontracts,itappearsthatCaltransreceived
fewerproposalsfromWBEsandaboutthesameamountofproposalsfromMBEsaswhatmight
beexpectedgivenMBE/WBErepresentationamongengineeringrelatedprimeconsultants
competingforpublicsectorwork.AverageevaluationscoresCaltransawardedforMBEsandfor
WBEsappearedtobelowerthanmajorityownedfirms.Evenso,relativelymoreproposalsfrom
MBEsresultedincontractawardsthanforothergroups.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE16

E.IsthereanyevidenceofoverconcentrationofDBEsincertaintypesof
work?
TheFederalDBEProgramrequiresagenciesimplementingtheprogramtotakecertainstepsif
theydeterminethatDBEfirmsaresooverconcentratedinacertaintypeofworkastounduly
burdentheopportunityofnonDBEfirmstoparticipateinthistypeofwork(see49CFRSection
26.33(a)).
TheFederalDBEProgramdoesnotspecificallydefineoverconcentration.Forpurposesof
examiningthisissue,BBCexaminedwhetherDBEsobtainedmorethanonehalfofthe
subcontractdollarsinanyconstructionorengineeringrelatedsubindustry.
BBCfocusedonsubcontractdollarsawardedtoDBEsandallfirmsbysubindustry.All
subcontractdollarsforwhichBBChaddatawereexamined,includingFHWAandstatefunded
contractsforCaltransandlocalagencies.
ThereweretwosubindustriesforwhichDBEsobtainedmorethanonehalfofsubcontract
dollarsbaseduponCaltransandlocalcontractinformation:
DBEsaccountedfor54percentofsubcontractdollarsrelatedtotrucking;and
DBEsobtained50percentofthesubcontractdollarsgoingtotestingservices.
Basedontheseresults,Caltransmightcloselymonitoranyevidenceofoverconcentrationof
DBEsintruckingandtestingservicesforfuturecontracts(seeChapter10).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER7,PAGE17

CHAPTER8.
CaltransOverallAnnualAspirationalDBEGoal
AspartofitsimplementationoftheFederalDBEProgram,Caltransisrequiredtosetanoverall
annualgoalforDBEparticipationinitsFHWAfundedtransportationcontracts.TheFinalRule
effectiveFebruary28,2011revisedrequirementsforgoalsettingsothatagenciesthat
implementtheFederalDBEProgramonlyneedtodevelopandsubmitoverallannualDBEgoals
everythreeyears.CaltranslastsubmitteditsoverallannualDBEgoal(agoalof13.5%)infiscal
year2009andisrequiredtosubmitanewgoalin2012forfiscalyears2013through2015.
CaltransmustprepareandsubmitaGoalandMethodologydocumenttoFHWAthatpresentsits
overallannualDBEgoalforthenextthreefiscalyears,supportedbyinformationaboutthesteps
usedtodeveloptheoverallgoal.Chapter8providesinformationthatCaltransmightconsideras
partofsettingitsoverallannualDBEgoal.Chapter8isorganizedintwoparts,basedonthetwo
stepprocessthat49CFRPart26.45outlinesforCaltranstosetitsoverallgoal:
A. Establishingabasefigure;and
B. Considerationofastep2adjustment.
A.EstablishingaBaseFigure
EstablishingabasefigureisthefirststepincalculatinganoverallannualgoalforDBE
participationinCaltransFHWAfundedtransportationcontracts.AspresentedinChapter4,
potentialDBEsthatis,MBE/WBEsthatareDBEcertifiedorappearthattheycouldbeDBE
certifiedbasedonannualrevenuelimitsdescribedin49CFRPart26areavailablefor12.5
percentofCaltransFHWAfundedconstructionandengineeringprimecontractandsubcontract
dollars.Caltransmightconsider12.5percentasthebasefigureforitsoverallannualDBEgoalif
itanticipatesthatthetypesofFHWAfundedcontractsthattheagencywillawardinfiscalyears
2013through2015are,onbalance,reasonablysimilartothetypesofFHWAfundedcontracts
thattheagencyawardedduringthe20072010studyperiod.
Figure81presentstheavailabilitycomponentsofthebasefigureforCaltransoverallannual
DBEgoalbyMBE/WBEgroupandbyindustry.TheavailabilityestimatespresentedinFigure81
arebasedontheavailabilityofpotentialDBEsforFHWAfundedprimecontractsand
subcontracts.Theoverallbasefigurereflectsaweightof97percentforconstructionand
3percentforengineeringrelatedcontracts,basedonthedollarsofFHWAfundedCaltransand
LocalAssistancecontractsawardedduringthestudyperiod.IftherelativedistributionofFHWA
fundedcontractdollarsbetweenconstructionandengineeringrelatedcontractsisexpectedto
substantiallychangeinthefuture,Caltransmightconsiderapplyingdifferentweightstothe
correspondingavailabilitycomponentswhencalculatingitsbasefigure.Inaddition,Caltrans
mightevaluatewhetherthetypesofFHWAfundedconstructionorengineeringcontractsthatit
awardswillsubstantiallychangeinthefuture.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE1

Figure81.
AvailabilitycomponentsofCaltransbasefigure
(basedonavailabilityofpotentialDBEsforFHWAfundedtransportationcontracts)
PotentialDBEs Engineering Construction
Availabilitypercentage
Total
AfricanAmericanowned
AsianPacificAmericanowned
SubcontinentAsianAmericanowned
HispanicAmericanowned
NativeAmericanowned
WBE(whitewomenowned)
TotalpotentialDBEs
Sectorweight
0.6 % 5.3 %
0.9 7.0
0.2 3.7
5.2 8.5
1.0 1.1
3.9 6.1
11.8 % 31.7 %
97 % 3 %
0.8 %
1.1
0.3
5.4
1.0
4.0
12.5
Note: SeeFiguresK50,K51,andK52inAppendixKforcorrespondingdisparityresultstables.
Source: BBCResearch&Consultingavailabilityanalysis.
B.ConsiderationofaStep2Adjustment
PertheFederalDBEProgram,Caltransmustconsiderpotentialstep2adjustmentstothebase
figureaspartofdeterminingitsoverallannualDBEgoal.Caltransisnotrequiredtomakeany
step2adjustmentsaslongasitconsidersappropriatefactorsandexplainsitsdecisioninitsGoal
andMethodologydocument.TheFederalDBEProgramoutlinesfactorsthatanagencymust
considerwhenassessingwhethertomakeanystep2adjustmentstoitsbasefigure:
1. CurrentcapacityofDBEstoperformwork,asmeasuredbythevolumeofworkDBEshave
performedinrecentyears;
2. Informationrelatedtoemployment,selfemployment,education,training,andunions;
3. AnydisparitiesintheabilityofDBEstogetfinancing,bonding,andinsurance;and
4. Otherrelevantdata.
1
BBCcompletedananalysisofeachoftheabovestep2factorsandwasabletoquantifytheeffect
ofcertainfactorsonthebasefigure.OtherinformationthatBBCexaminedwasnotaseasily
quantifiablebutisstillrelevanttoCaltransasitdetermineswhethertomakeanystep2
adjustments.
1
49CFRSection26.45.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE2

1.CurrentcapacityofDBEstoperformwork,asmeasuredbythevolumeofwork
DBEshaveperformedinrecentyears.USDOTsTipsforGoalSettingsuggeststhat
agenciesshouldexaminedataonpastDBEparticipationontheirUSDOTfundedcontractsin
recentyears.USDOTfurthersuggeststhatagenciesshouldchoosethemedianlevelofannual
DBEparticipationforthoseyearsasthemeasureofpastparticipation:Yourgoalsettingprocess
willbemoreaccurateifyouusethemedian(insteadoftheaverageormean)ofyourpast
participationtomakeyouradjustmentbecausetheprocessofdeterminingthemedianexcludes
alloutlier(abnormallyhighorabnormallylow)pastparticipationpercentages.
2
Figure82presentspastDBEparticipationbasedonCaltransUniformReportsofDBEAwardsor
CommitmentsandPayments,asreportedtotheFHWA.AccordingtoCaltransUniformReports,
medianDBEparticipationontheagencysFHWAfundedcontractsfromfederalfiscalyears2007
to2011was6.6percent.
3
Figure82.
CaltransreportedpastDBEparticipationonFHWAfundedcontracts,
fiscalyears20072011
Federalfiscalyear DBEattainment AnnualDBEgoal Difference
2007 6.6 % 10.5 % 3.9 %
2008 4.1 13.5 9.4
2009 3.4 13.5 10.1
2010 7.4 13.5 6.1
2011 7.2 13.5 6.3
Source: Commitments/AwardsreportedonCaltransUniformReportsofDBEAwards/CommitmentsandPayments.
TheinformationaboutpastDBEparticipationsupportsadownwardadjustmenttotheoverall
annualDBEgoal.IfCaltransweretousetheapproachthatUSDOToutlinedinTipsforGoals
Setting,theoverallannualgoalwouldbetheaverageofthe12.5percentbasefigureandthe6.6
percentmedianpastDBEparticipation,yieldingapotentialoverallDBEgoalof9.6percent.
2.Informationrelatedtoemployment,selfemployment,education,training,and
unions.Chapter3summarizesinformationaboutconditionsintheCaliforniatransportation
contractingindustryforminorities,women,andMBE/WBEs.Detailedquantitativeanalysesof
marketplaceconditionsinCaliforniaarepresentedinAppendicesEthroughH.BBCsanalyses
indicatethattherearebarriersthatcertainminoritygroupsandwomenfacerelatedtoentry
andadvancementandbusinessownershipintheCaliforniaconstructionandengineering
industries.SuchbarriersmayaffecttheavailabilityofMBE/WBEstoobtainandperform
Caltransandlocalagencytransportationcontracts.
Althoughitmaynotbepossibletoquantifythecumulativeeffectthatbarriersinemployment,
education,andtrainingmayhavedepressedtheavailabilityofminorityandwomenowned
2
SectionIII(A)(5)(c)inUSDOT.TipsforGoalSettingintheFederalDisadvantagedEnterprise(DBE)Program.
http://www.osdbu.dot.gov/DBEProgram/tips.cfm.
3
BBCsanalysisofmeanDBEparticipationforFHWAfundedcontractsfrom2007through2010was4.2percent.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE3

firmsintheCaliforniatransportationcontractingindustry,theeffectsofbarriersinbusiness
ownershipcanbequantified,asexplainedbelow.
BBCusedregressionanalysestoinvestigatewhetherrace,ethnicityandgenderaffectedratesof
businessownershipamongworkersintheCaliforniaconstructionandengineeringindustries.
TheregressionanalysesallowedBBCtoexaminethoseeffectswhilestatisticallycontrollingfor
variouspersonalcharacteristicsincludingeducationandage(AppendixFprovidesdetailed
resultsofBBCsbusinessownershipregressionanalyses).
4
ThoseanalysesrevealedthatAfrican
Americans,HispanicAmericansandwomenwerelesslikelythannonHispanicwhitesandmales
toownconstructionbusinesses,evenafteraccountingforvariousraceandgenderneutral
personalcharacteristics.Similarly,AsianPacificAmericans,SubcontinentAsianAmericans,
HispanicAmericansandwomenwerelesslikelythannonHispanicwhitemalestoown
engineeringbusinesses.Eachofthesedisparitieswasstatisticallysignificant.
BBCanalyzedtheimpactthatbarriersinbusinessownershipwouldhaveonthebasefigureif
thegroupsofminoritiesandwomenexhibitingstatisticallysignificantlydisparitiesintherates
ofbusinessownershipownedbusinessesatthesamerateassimilarlysituatednonminorities
andmen.Theresultsofthatanalysissometimesreferredtoasabutforanalysisbecauseit
estimatestheavailabilityofMBE/WBEsbutfortheeffectsofraceandgenderbased
discriminationarepresentedinFigure83.
4
BBCexaminedU.S.Censusdataonbusinessownershipratesusingmethodssimilartoanalysesexaminedincourtcases
involvingstatedepartmentsoftransportationinCalifornia,Illinois,andMinnesota.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE4

Figure83.
Potentialstep2adjustmentconsideringdisparitiesintheratesofbusinessownership
Industryandgroup
Construction
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
WBE
PotentialDBEs
Allotherbusinesses***
Totalfirms
0.6 %
0.9
0.2
5.2
1.0
3.9
11.8 %
88.2
100.0 %
a.
Current
availability
73
n/a
n/a
70
n/a
52
n/a
n/a
n/a
b.
Disparityindex
forbusiness
ownership
0.8 %
0.9
0.2
7.4
1.0
7.5
17.9 %
88.2
106.1 %
c.
Availability
afterinitial
adjustment*
0.8 %
0.8
0.2
7.0
0.9
7.1
16.8 %
83.2
100.0 %
d.
Availability
afterscaling
to100%
16.3 %
e.
ofbasefigure**
Components
Engineering
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Whitewomen
PotentialDBEs
Allotherbusinesses
Totalfirms
5.3 %
7.0
3.7
8.5
1.1
6.1
31.7 %
68.3
100.0 %
n/a
69
31
71
n/a
65
n/a
n/a
n/a
5.3 %
10.1
11.9
12.0
1.1
9.4
49.8 %
68.3
118.1 %
4.5 %
8.6
10.1
10.1
0.9
7.9
42.2 %
57.8
100.0 %
1.3 %
Total 12.5 % n/a n/a 17.6 %
Note: *Initialadjustmentiscalculatedascurrentavailabilitydividedbythedisparityindex.
**Componentsofthebasefigurewerecalculatedasthevalueafteradjustmentandscalingto100percent,multipliedbythepercentage
oftotalFWHAfundedcontractdollarsineachindustry(construction=97%,engineering=3%).
***AllotherbusinessesincludedmajorityownedbusinessesandMBE/WBEsthatwerenotpotentialDBEs.
Source: BBCResearch&Consulting.
Theanalysisincludedthesamecontractsthatthestudyteamanalyzedtodeterminethebase
figure(i.e.,FHWAfundedconstructionandengineeringprimecontractsandsubcontractsthat
Caltransawardedduringthestudyperiod).BBCcompletedbutforanalysesseparatelyfor
constructionandengineeringcontractsandthenweightedtheresultsbasedontheproportionof
FHWAfundedcontractdollarsthatCaltransawardedineachindustryduringthestudyperiod
(i.e.,a97%weightforconstructionanda3%weightforengineering).Inthatway,BBC
determinedanoverallbasefigurethatadjustedforbarriersinbusinessownership.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE5

TherowsandcolumnsofFigure83presentthefollowinginformationfromBBCsbutfor
analyses:
a. Currentavailability.Column(a)presentsthecurrentavailabilityofpotentialDBEsby
MBE/WBEgroupandbyindustry,aspresentedinChapter4.Eachrowpresentsthe
percentageavailabilityforeachMBE/WBEgroup.Combined,thecurrentavailabilityof
potentialDBEsforCaltransFHWAfundedconstructionandengineeringcontractsis12.5
percent,asshowninbottomrowofcolumn(a).
b. Disparityindicesforbusinessownership.Foreachgroupthatissignificantlylesslikely
thansimilarlysituatednonHispanicwhitemalestoownconstructionandengineering
businesses,BBCcalculatedsimulatedbusinessownershipratesifthosegroupsowned
businessesatthesamerateasnonHispanicwhitemaleswhosharethesamepersonal
characteristics.Thestudyteamthencalculatedabusinessownershipdisparityindexfor
eachgroupbydividingtheobservedbusinessownershipratebythebenchmarkbusiness
ownershiprateandthenmultiplyingtheresultby100.Valueslessthan100indicatethat,in
reality,thegroupislesslikelytoownbusinessesthanwhatwouldbeexpectedfornon
Hispanicwhitemaleswhosharethesamepersonalcharacteristics.
Column(b)presentsdisparityindicesrelatedtobusinessownershipforthedifferent
racial/ethnicandgendergroups.Forexample,asshowninrow(1)ofcolumn(b),African
Americansownconstructionbusinessesat73percentoftheratethatwouldbeexpected
basedonthesimulatedbusinessownershipratesofnonHispanicwhitemaleswhoshare
thesamepersonalcharacteristics.
c. Availabilityafterinitialadjustment.Column(c)presentsavailabilityestimatesby
MBE/WBEgroupandbyindustryafterinitiallyadjustingforstatisticallysignificant
disparitiesinbusinessownershiprates.BBCcalculatedthoseestimatesbydividingthe
currentavailabilityincolumn(a)bythedisparityindexforbusinessownershipincolumn
(b)andthenmultiplyingby100.NotethatBBConlymadeadjustmentsforthosegroups
thataresignificantlylesslikelythansimilarlysituatednonHispanicwhitemalestoown
businesses.
d. Availabilityafterscalingto100%.Column(d)showsadjustedavailabilityestimatesthat
wererescaledsothatthesumoftheavailabilityestimatesequals100percentforeach
industry.BBCrescaledtheadjustedavailabilityestimatesbytakingeachgroupsadjusted
availabilityestimateincolumn(c)anddividingitbythesumofavailabilityestimates
shownunderTotalfirmsincolumn(c)inrow(9)forconstructionandinrow(18)for
engineeringandmultiplyingby100.Forexample,thescaledavailabilityestimatefor
HispanicAmericansshowninrow(4)ofcolumn(d)wascalculatedinthefollowingway:
(7.4%106.1%)x100=7.0%.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE6

e. Componentsofgoal.Column(e)showsthecomponentofthetotalbasefigureattributedto
theadjustedMBE/WBEavailabilityforeachindustry.BBCcalculatedeachcomponentby
takingthetotalavailabilityestimateshownunderPotentialDBEsincolumn(d)inrow
(7)forconstructionandinrow(16)forengineering andmultiplyingitbytheproportion
oftotalFHWAfundedcontractdollarsforwhicheachindustryaccounts(i.e.,97%for
constructionand3%forengineering).Forexample,BBCusedthe16.8percentshownin
row(7)ofcolumn(d)forconstructionandmultiplieditby97percentforaresultof16.3
percent(seerow(7)ofcolumn(e)).
Thevaluesincolumn(e)werethensummedtoequaltheoverallbasefigureadjustedfor
barriersinbusinessownership17.6%,asshowninthebottomrowofcolumn(e).
Basedoninformationrelatedtobusinessownership,Caltransmightconsideranupward
adjustmenttoitsoverallDBEgoal(inarangeupto17.6percent).
3.AnydisparitiesintheabilityofDBEstogetfinancing,bonding,andinsurance.
BBCsanalysisofaccesstofinancing,bonding,andinsurancerevealedquantitativeand
qualitativeevidencethatminorities,women,andMBE/WBEsdonothavethesameaccessto
thosebusinessinputsaswhitemalesandmajorityownedbusinessesinCalifornia.Anybarriers
toobtainingfinancing,bonding,andinsurancemightaffectopportunitiesforminoritiesand
womentosuccessfullyformandoperateconstructionandengineeringbusinessesinthe
Californiamarketplace.
AnybarriersthatMBE/WBEsfaceinobtainingfinancing,bonding,orinsurancewouldalsoplace
thosebusinessesatadisadvantageinobtainingCaltransandlocalagencyconstructionand
engineeringprimecontractsandsubcontracts.
Theinformationaboutfinancing,bonding,andinsurancesupportsanupwardstep2adjustment
inCaltransoverallannualgoalforDBEparticipationinFHWAfundedcontracts.
4.Otherfactors.TheFederalDBEProgramsuggeststhatfederalaidrecipientsalsoexamine
otherfactorswhendeterminingwhethertomakeanystep2adjustmentstotheirbasefigures.
5
AmongtheotherfactorsexaminedinthisdisparitystudywasthesuccessofMBE/WBEs
relativetomajorityownedbusinessesintheCaliforniamarketplace.Thereisquantitative
evidencethatcertaingroupsofMBE/WBEsarelesssuccessfulthanmajorityownedfirms,and
facegreaterbarriersinthemarketplace,evenafterconsideringneutralfactors.Chapter3
summarizesthatevidenceandAppendixHpresentssupportingquantitativeanalyses.
Thereisalsoqualitativeevidenceofbarrierstothesuccessofminorityandwomenowned
businesses,assummarizedinChapter3andfurtherexploredinAppendicesJandL.Someofthis
qualitativeinformationsuggeststhatdiscriminationonthebasisofrace,ethnicityandgender
affectsminorityandwomenownedfirmsintheCaliforniatransportationcontractingindustry.
5
49CFRSection26.45.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE7

Insum,thereisevidencethattheexistingavailabilityofMBEsandWBEsforCaltransandlocal
agencytransportationcontractsisreducedfromwhatitmightbegivenalevelplayingfieldfor
minoritiesandwomeninthisindustry.Combined,thisquantitativeandqualitativeevidence
supportsanupwardstep2adjustmentasCaltransconsidersanoverallannualDBEgoal.
Approachesformakingstep2adjustments.AsnotedinUSDOTTipsforGoalSetting,If
theevidencesuggeststhatanadjustmentiswarranted,itiscriticallyimportanttoensurethat
thereisarationalrelationshipbetweenthedatayouareusingtomaketheadjustmentandthe
actualnumericaladjustmentmade.
6
BBCsanalysisofeachfactoroutlinedintheFederalDBE
ProgramsuggeststhatCaltransmightconsideroneofthefollowingapproachesconcerningany
step2adjustments.
Approach1makeadownwardadjustment.CaltransmightconsideranoverallannualDBE
goalthatisadjustedtoreflectrecentDBEparticipationinFHWAfundedcontracts.
CaltransmustconsiderthevolumeofworkDBEshaveperformedinrecentyearswhen
determiningwhethertomakeanystep2adjustmentstoitsbasefigure.Caltransutilization
reportsforFY2007throughFY2011indicatedmedianannualDBEparticipationof6.6
percentforthoseyears,whichislowerthanthe12.5percentbasefigure.
USDOTTipsforGoalSettingsuggeststhatanagencycanmakeastep2adjustmentby
averagingthebasefigurewithmedianpastDBEparticipation.
IfCaltranschosethatapproach,the12.5percentbasefigurewouldbeaveragedwiththe6.6
percentmedianpastDBEparticipationforanoverallannualDBEgoalof9.6percent.
Approach2makeanupwardadjustment.TherealsoarereasonswhyCaltransmightconsider
ahigheroverallannualDBEgoalthanthe12.5percentbasefigure:
Caltransmightanupwardadjustmenttoitsbasefigure(inarangeupto17.6percent)to
accountforbarriersthatminoritiesandwomenfaceinowningbusinessesintheCalifornia
transportationcontractingindustry.Suchanadjustmentwouldcorrespondtoa
determinationofthelevelofDBEparticipationyouwouldexpectabsenttheeffectsof
discriminationthatCaltransmightmake.
7
Anupwardadjustmentisalsosupportedbytheevidenceofbarriersthataffectminorities,
women,andMBE/WBEsinobtainingfinancing,bonding,andinsuranceandtoaccountfor
evidencethatcertaingroupsofMBE/WBEsarelesssuccessfulthancomparablemajority
ownedbusinesses.
IfCaltranschosetoaverageitsbasefigureof12.5percentandthe17.6figuredescribed
above,itwouldyieldaresultof15percentasanoverallannualgoal(suchanaveragingis
consistentwithcertainapproachesoutlinedinTipsforGoalSetting).
6
USDOT.TipsforGoalSettingintheFederalDisadvantagedEnterprise(DBE)Program.
http://www.osdbu.dot.gov/DBEProgram/tips.cfm.
7
49CFRSection26.45(b).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE8

Approach3makingnostep2adjustment.USDOTregulationsclearlystatethatanagencysuch
asCaltransisrequiredtoreviewabroadrangeofinformationwhenconsideringwhetheritis
necessarytomakeanystep2adjustments.However,USDOTTipsforGoalSettingstatesthat
anagencysuchasCaltransisnotrequiredtomakeanyadjustmentsaslongasitcanexplain
whatfactorsitconsideredandcanexplainitsdecisioninitsGoalandMethodologydocument.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER8,PAGE9

CHAPTER9.
PortionofDBEGoaltobeMetthrough
NeutralMeans
TheFederalDBEProgramrequiresstateandlocaltransportationagenciestomeetthemaximum
feasibleportionoftheiroverallannualDBEgoalsusingraceandgenderneutralmeasures.
1
Raceandgenderneutralmeasuresareinitiativesthatencouragetheparticipationofall
businesses,orallsmallbusinesses,andarenotspecificallylimitedtoMBE/WBE/DBEs.Agencies
mustdeterminewhethertheycanmeettheiroverallannualDBEgoalssolelythroughneutral
meansorwhetherraceandgenderconsciousmeasuressuchasDBEcontractgoalsare
alsoneeded. Aspartofdoingso,agenciesmustprojecttheportionoftheiroverallannualDBE
goalsthattheyexpecttomeetthroughraceandgenderneutralmeansandwhatportionthey
expecttomeetthroughraceandgenderconsciousprograms.
IfanagencydeterminesthatitcanmeetitsoverallannualDBEgoalsolelythroughrace
andgenderneutralmeans,thentheagencywouldproposeusingonlyneutralmeasuresas
partofitsprogram.Theagencywouldprojectthat100percentofitsoverallannualDBE
goalwouldbemetthroughneutralmeansandthat0percentwouldbemetthroughrace
andgenderconsciousmeans.
Ifanagencydeterminesthatacombinationofraceandgenderneutralandraceand
genderconsciousmeasuresareneededtomeetitsoverallannualDBEgoal,thentheagency
wouldproposeusingacombinationofneutralandconsciousmeasuresaspartofits
program.TheagencywouldprojectthatsomepercentofitsoverallannualDBEgoalwould
bemetthroughneutralmeansandthattheremainderwouldbemetthroughraceand
genderconsciousmeans.
USDOToffersguidanceconcerninghowtransportationagenciesshouldprojecttheportionsof
theiroverallannualDBEgoalsthatwillbemetthroughraceandgenderneutralandraceand
genderconsciousmeasures,includingthefollowing:
USDOTQuestionsandAnswersabout49CFRPart26addressesfactorsforfederalaid
recipientstoconsiderwhenprojectingtheportionoftheiroverallDBEgoalsthattheywill
meetthroughraceandgenderneutralmeans.
2
1
49CFRSection26.51.
2
Seehttp://www.dotcr.ost.dot.gov/Documents/Dbe/49CFRPART26.doc.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE1

USDOTTipsforGoalSettingalsosuggests
factorsforfederalaidrecipientstoconsider
whenmakingsuchprojections.
3
AnFHWAtemplateforhowitconsiders
approvingDBEgoalandmethodology
submissionsincludesasectiononprojectingthe
percentageofoverallDBEgoalstobemet
throughneutralandconsciousmeans.An
excerptfromthattemplateisprovidedin
Figure91.
Basedon49CFRPart26andtheresourcesabove,
generalareasofquestionsthattransportation
agenciesmightaskrelatedtomakinganyprojections
include:
A. Isthereevidenceofdiscriminationwithinthe
localtransportationcontractingmarketplacefor
anyracial,ethnicorgendergroups?
B. Whathasbeentheagencyspastexperiencein
meetingitsoverallDBEgoal?
C. WhathasDBEparticipationbeenwhenthe
agencydidnotuseraceorgenderconscious
measures?
4
D. Whatistheextentandeffectivenessofraceand
genderneutralmeasuresthattheagencycould
haveinplaceforthenextfiscalyear?
Chapter9isorganizedaroundeachofthosegeneral
areasofquestions.
Figure91.
ExcerptfromExplanationofApproval
of[State]DBEGoalSettingProcessfor
FY[Year]
YoumustalsoexplainthebasisfortheStates
raceneutral/raceconsciousdivisionandwhy
itistheStatesbestestimateofthemaximum
amountofparticipationthatcanbeachieved
throughraceneutralmeans.Therearea
varietyoftypesofinformationthatcanbe
relieduponwhendeterminingarecipient's
raceneutral/raceconsciousdivision.
Appropriateinformationshouldgiveasound
analysisoftherecipientsmarket,therace
neutralmeasuresitemploysandinformation
oncontractingintherecipientscontracting
area.Informationthatcouldbereliedon
includes:theextentofparticipationofDBEsin
therecipientscontractsthatdonothave
contractgoals;pastprimecontractors
achievements;excessDBEachievementsover
pastgoals;howmanyDBEprimeshave
participatedinthestatesprogramsinthe
past;orinformationaboutstate,localor
privatecontractinginsimilarareasthatdonot
usecontractinggoalsandhowmanyminority
andwomensbusinessesparticipatein
programswithoutgoals.
Source:FHWA,ExplanationforApprovalof
[State]DBEProgramGoalSettingProcessfor
FY[Year].
http://www.fhwa.dot.gov/civilrights/
dbe_memo_a4.htm
3
http://www.osdbu.dot.gov/DBEProgram/tips.cfm.
4
USDOTguidancesuggestsevaluating(a)certainDBEparticipationasprimecontractorsiftheDBEcontractgoalsdidnot
affectutilization,(b)DBEparticipationasprimecontractorsandsubcontractorsforagencycontractswithoutDBEgoals,and
(c)overallutilizationforotherstate,localorprivatecontractingwherecontractgoalsarenotused.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE2

A.Isthereevidenceofdiscriminationwithinthelocaltransportation
contractingmarketplaceforanyracial,ethnicorgendergroups?
AsdiscussedinChapter3,BBCexaminedconditionsintheCaliforniamarketplace,including:
Entryandadvancement;
Businessownership;
Accesstocapital,bondingandinsurance;and
Successofbusinesses.
Therewasquantitativeevidenceofdisparitiesforminorityandwomenownedfirmsasawhole,
andforspecificgroups,concerningtheaboveissues.Qualitativeinformationindicatedsome
evidenceofdiscriminationaffectingthelocalmarketplace,althoughsomeminorityandfemale
businessownersinterviewedinthisandotherrecentdisparitystudiesdidnotthinktheyhad
beenaffectedbyanyraceorgenderdiscrimination.
Caltransshouldreviewtheinformationaboutmarketplaceconditionspresentedinthisreport,
aswellasotherinformationitmayhave,whenconsideringtheextenttoitcanmeetitsoverall
DBEgoalthroughneutralmeasures.
B.WhathasbeentheagencyspastexperienceinmeetingitsoverallDBE
goal?
CaltransreportedcertifiedDBEparticipationinrecentyearsissummarizedinFigure82in
Chapter8.Thisinformationisreportedbelow.CaltranshasnotmetitsDBEgoalinrecentyears.
Infederalfiscalyears2010and2011,DBEparticipationonFHWAfundedcontractswas6
percentagepointsbelowCaltransoverallDBEgoal.Caltransappliedaraceandgender
consciouscontractgoalsprogramforFHWAfundedcontractsforallofFFY2011.
Figure92.
CaltransreportedpastcertifiedDBEparticipationonFHWAfundedcontracts,
fiscalyears20072011
Federalfiscalyear DBEattainment AnnualDBEgoal Difference
2007 6.6 % 10.5 % 3.9 %
2008 4.1 13.5 9.4
2009 3.4 13.5 10.1
2010 7.4 13.5 6.1
2011 7.2 13.5 6.3
Source: Commitments/AwardsreportedonCaltransUniformReportsofDBEAwards/CommitmentsandPayments.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE3

C.WhathasDBEparticipationbeenwhenCaltranshasnotapplied
contractgoals(orotherraceconsciousremedies)?
BBCanalyzedabroadrangeofinformationtoexaminecertifiedDBEparticipationwhenCaltrans
hasnotappliedcontractgoals.
CaltransDBEparticipationreports.Figure92presentsCaltransreportingofcertifiedDBE
participationforthreeentirefiscalyearswhenitdidnotapplyraceorgenderconscious
programelements:FFY2007,FFY2008andFFY2009.AnnualcertifiedDBEutilizationranged
from3.4to6.6percentinthoseyears(andamedianparticipationforthosethreeyearsof4.1
percent).
BBCcalculationofcertifiedDBEparticipationfor20072010.BBCcalculated3.9percent
utilizationofcertifiedDBEsfrom2007through2010forCaltransandLocalAssistancecontracts
forwhichnoraceandgenderconsciousprogramapplied.AsexplainedinChapter5,thesenon
goalscontractsincludedstatefundedcontractsandthoseFHWAfundedcontractsoutsidethe
timeperiodwhenCaltransandlocalagenciesappliedraceandgenderconsciousgoals.Figure
K5presentstheseresults.
Resultsofthedisparityanalyses.ThedisparityindexforMBE/WBEsoverallfornongoals
contractsfrom2007through2010was74.Chapters6and7,andAppendixK,exploredisparity
analysisresultsindetail.
ParticipationofpotentialDBEsinCaltranscontracts.ParticipationofcertifiedDBEs
wouldbehigherifmoreoftheminorityandwomenownedfirmsreceivingCaltransandlocal
agencycontractsandsubcontractswouldapplyforDBEcertification.Althoughnotallofthe
presentlynonDBEcertifiedMBEsandWBEsperformingthesecontractswouldqualifyforDBE
certification,andsomeofthesefirmshavegraduatedfromtheprogramorhavebeendenied
certification,alargenumberofMBEsandWBEsappeartobeeligibleforDBEcertification,at
leastbasedontheirrevenuesoverthemostrecentthreeyears.Forexample,only21percentof
MBE/WBEsconsideredintheavailabilityanalysisforthisdisparitystudyarecertifiedasDBEs
(asofJuly2012).
5
Forthesereasons,BBCexaminedutilizationofpotentialDBEfirms(firmsthatarecurrently
certifiedorappeartomeettherevenuerequirementsforDBEcertification)onFHWAfunded
contracts.PotentialDBEsobtained7.9percentofthecontractdollarsawardedonFHWAfunded
contractsthatwereissuedunderCaltransraceneutralimplementationoftheFederalDBE
program.
Caltransmightconsiderthis7.9percentlevelofattainmentasaminimumlevelofitsoverall
annualDBEgoalthatcanbereachedthroughneutralmeansifCaltransweresuccessfulin
encouragingfirmstoapplyforDBEcertification.
5
TherearemanyreasonswhymostminorityandwomenownedfirmsinCaliforniadonotseekDBEcertification,including
perceptionsthattheprocessislengthyanddifficult,thatcertificationhaslimitedvalue,andthatDBEcertificationmightcarrya
negativestereotype.AppendicesJandLprovidefurtherinsightsaboutDBEcertificationfromnoncertifiedandcertifiedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE4

Figure93.
CertifiedDBE,potential
DBEandMBE/WBE
utilizationonCaltransand
LocalAssistanceFHWA
fundedcontractsinthe
nongoalsperiod
Note:
Formoredetailandresultsbygroupsee
FigureK14.
Source:
BBCResearch&ConsultingfromCaltrans
contractdata.
Participationwhenrace andgenderconsciousprogramsapplied.Asdiscussedin
Chapters5and6,BBCalsomeasuredcertifiedDBEparticipationforFHWAfundedcontracts
whenraceandgenderconsciouscontractgoalsprogramapplied(inpartsof2009andallof
2010).CertifiedDBEparticipationwiththeraceandgenderconsciousprograminplacewas4.8
percentduringthistimeperiod.Thedisparityindexforthesecontractswas62.
Aspreviouslydiscussed,theresultsoftheutilizationanddisparityanalysesforthesegoals
contractsindicatethat,evenwithraceandgenderconsciousefforts,certifiedDBEparticipation
wasconsiderablybelowCaltransoverallannualDBEgoalandthattherewerelargedisparities
intheoverallutilizationofMBE/WBEs.
D.Whatistheextentandeffectivenessofrace andgenderneutral
measuresthattheagencycouldhaveinplaceforthenextfiscalyear?
Caltranswillneedtoreviewtheraceandgenderneutralmeasuresthatitandother
organizationsalreadyhaveinplace,andthoseCaltranshasplannedorcouldbeconsideredfor
futureimplementation,whendeterminingtheextenttowhichCaltranscouldmeetitsoverall
annualDBEgoalthroughtheuseofsuchmeasures.Thefollowingprovidesageneraloverviewof
thesemeasures.
Currentraceandgenderneutralmeasures.Caltranscurrentlyhasabroadrangeof
neutralmeasuresinplacetoencouragetheparticipationofallsmallbusinessesincluding
DBEsinitstransportationcontracts.Theagencyplansoncontinuingtheuseofthose
measuresinthefuture.Caltransraceandgenderneutraleffortscanbeclassifiedintofour
categories:
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE5

Businessoutreachandcommunication;
Technicalassistance;
Improvedcontractingprocesses;and
Datacollection,monitoring,andreporting.
Figure94summarizescurrentneutralprogramsatCaltrans.
Figure94.
CurrentCaltransraceneutralmeasures
CaliforniaDepartmentofTransportationRaceNeutralMeasures
EXAMPLESOFCURRENTMEASURES
Host District Procurement Fairs.
Implement the SBA Surety Bond Guarantee Program.
Continue Statewide Small Business Council and subcommittee
meetings.
Host focused outreach events for small businesses, including
DBEs.
Host project-specific outreach events for small businesses,
including DBEs.
Outreach and market DBEs for participation in Caltrans
emergency contracts.
Meet routinely with construction and Architectural &
Engineering (A&E) prime contractors.
Ensure District Small Business Liaisons (DSBLs) continue to
conduct business communication, outreach events, and
training on "How to do Business with Caltrans."
Market SBA Surety Bond Guarantee Program statewide
through the DSBLs and industry partnership agreements.
Maintain flowchart of Caltrans advertising, bid opening,
awards, and approval on Caltrans program Web sites.
Increase number of DBE certifications listed in CUCP.
Provide "Look Ahead" information to small businesses,
including DBEs, for proposed construction and A&E
contracting opportunities.
Improve communication channels between Caltrans
Headquarters (HQ) and Districts for real-time information and
decision making.
Provide an "Opt-In" feature to the Caltrans Web site to allow
subcontractors or suppliers to be considered for bids without
ordering a plan set.
Maintain One-Stop Disadvantaged Business Enterprise (DBE)
certification with the California Department of Transportation
(Caltrans) and 10 other certifying agencies.
Continue paid advertisement in newspapers and trade and
focus papers to increase participations, in addition to the
Caltrans website.
Maintain Director's Policy on Race-Neutral Measures to include
and ensure District training and implementation.
Make more use of the Caltrans Emergency Contractor Interest
Registry and remove barriers for registration.
Continue administrative enforcement of prompt payment
between prime contractors and subcontractors.
Provide consistent and accurate data collection of DBE
utilization.
Track and circulate DBE usage by District and discuss monthly
at Directorate level.
Cross-train internal staff on functional contract requirements
and process.
Improve access to bid openings by teleconference, Web-based
video or Internet, in addition to electronic bid submittal.
Expand the use of mandatory pre-bid meetings in construction
contracts.
Implement Mentor-Protg Program statewide for construction
and A&E.
Produce a "How to do Business with Caltrans" brochure make
it available online to include certification packages and
marketing kits.
Provide Caltrans plans and specification for small businesses,
including DBEs statewide. The plans are available at no cost
on the Caltrans Web site.
Market Caltrans opportunities, including working with banks,
surety, and insurance companies in their districts.
Utilize a standard "Outreach Marketing Kit" for all Districts to
include a procurement fair guide, a mandatory pre-bid guide,
a project specific guide, and an outreach guide.
Continue to standardize/improve HQ/District Web sites,
connect to one another, consolidate all contract-type
information on one Web site, and redesign Caltrans main Web
page to highlight contracting opportunities.
Hold quarterly "Look Ahead" meetings for prime contractors
and subcontractors, including DBEs and any interested parties.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE6

Figure94,Continued.
CurrentCaltransraceneutralmeasures
CaliforniaDepartmentofTransportationRaceNeutralMeasures
EXAMPLESOFCURRENTMEASURES
Continue to maintain Bidder's List.
Improve DBE/Small Business Enterprise cross-registration with
other State agencies and departments.
Spread project advertising and bid openings throughout the
year to prevent overloading of prime contractors and
subcontractors.
Breakdown A&E contracts into smaller units, including dollars
and items of work.
Recognize prime contractors for hiring small businesses,
including DBEs statewide.
Continue enforcement of prime contractors who use small
businesses, including DBEs statewide, as pass-through
companies.
Institute performance measurement standards for all race-
neutral measures.
Report monthly small businesses, including DBE participation,
on State and federal-funded contracts, including local
agencies, directly into a data management system.
Collaborate with associations, such as Associated General
Contractors and Engineering & Utility Contractors Association,
to increase DBE participation.
Update business preference information in the California
Unified Certification Program database of those entities that are
"ready, willing, and able" to perform Caltrans work.
Assign all bidders an identification number for capturing all
businesses that bid Caltrans work.
Centralize tracking of all race-neutral activities District wide via
OBEO.
Appoint staff for data collection, verification, measurement,
oversight, technical assistance, and reporting.
Continue utilization data reporting of all small businesses,
including DBEs, on all State and federal-aid contracts.
Source: CaliforniaDepartmentofTransportationOfficeofBusiness&EconomicOpportunity,2012.
Businessoutreachandcommunication.Caltransconductsseveraloutreachandcommunication
effortsacrossthestateofCaliforniatoencouragetheutilizationandgrowthofsmallbusinesses
andMBE/WBEs.Districtofficesmallbusinessliaisonsareprimarilyresponsibleforfacilitating
thoseefforts,whichinclude:
RebrandingtheDBEoffice;
DBEandsmallbusinessliaisons;
Meetingsandrelationshipbuilding;
Websiteandcommunications;
Advertisementsofcontractopportunities;and
Otheroutreacheventsandworkshops.
RebrandingtheDBEoffice.In2009,CaltransrenamedtheofficeofCivilRightstotheOfficeof
BusinessandEconomicOpportunity(OBEO).Thechangeeffectivelyrebrandedtheofficeto
alignmorecloselywithitsdedicationtoincreasingtheparticipationofsmallbusiness,
disadvantagedbusinessenterprise,anddisabledveteranbusinessenterpriseonCaltrans
contracts.OBEOwillcontinuetoensurenondiscriminationincontractexecutionandinthe
Caltransworkplaceenvironmentinadditiontoitsdedicationtothedevelopmentofsmall
businesses,includingDBEsandmanyMBE/WBEsanddisabledveteranownedbusinesses.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE7

DBEandsmallbusinessliaisons.Beginningin2009,Caltranssuccessfullyappointedsmall
businessliaisonsineachofthe12districtoffices.Thesmallbusinessliaisonsactaspointsof
contactforsmallbusinesses,includingDBEsandmanyotherMBE/WBEs,andtheliaisonsassist
primecontractorsidentifypotentialsubcontractors.Theliaisonsalsoleadmorefocused
outreachsuchaslocalprocurementfairs,workshops,andsmallbusinessevents.In2011,
Caltransliaisonsconductedandattended176differenteventsthroughoutthestateofCalifornia,
servingmorethan17,000individuals.
Meetingsandrelationshipbuilding.Inanefforttoengageitsstakeholders,Caltransmeets
regularlywithawiderangeofinterestgroupsincludingconstructionandengineeringtrade
associationsaswellaswithsmallbusinessandDBErepresentatives.
Tradeassociationmeetings.Eachquarter,Caltranshostsstakeholdermeetingswithmajor
constructionandengineeringtradeassociationsincludingtheAssociationofGeneralContractors
(AGC),theAmericanCouncilofEngineeringCompanies(ACEC),UnitedContractors,andthe
InfrastructureDeliveryCouncil(IDC).CaltranshoststhosemeetingsatCaltransHeadquarters
andfacilitatestheminpartnershipwitharepresentativefromeachorganization.Thequarterly
meetingscenteraroundconstructionandengineeringcontractingandaddressvarioustopics,
includingprojectadvertisementandschedule,DBEupdates,safetytopics,projectspecifications,
andnewbusinessopportunities.TheDirectorofCaltransispresentatthesemeetingstospeak
onbehalfoftheagencyandtoprovidetheopportunitytoaskquestions.Between10and25
membersofeachorganizationtypicallyattendthemeetings.
6
SmallBusinessCouncilmeetings.CaltranshostsSmallBusinessCouncilmeetingswith
associationsrepresentingsmallbusinessesandsmallbusinessesthemselves.Associationsmust
beasmallbusinesstradeassociationrepresentingatleast35members,organizedunderthe
lawsofCaliforniaandhavingasmallbusinessinterestinCaltranscontractsandprojects
(specifically,construction,commodities,architectureandengineering).ThelocationforSmall
BusinessCouncilmeetingsalternatebetweenCaltransheadquartersinSacramentoandvarious
districtofficesthroughoutCalifornia.Caltransusesthemeetingstoprovideinformationon
futurecontractopportunitiesandtoengagesmallbusinessesandMBE/WBEsintheCaltrans
contractingprocess.Inaddition,theSmallBusinessCouncilholdscommitteemeetingsthatcover
moredetailedtopicsincludingconstruction,professionalservicesandcommodities.The
committeesareresponsiblefordiscussingthoseissuesandpresentingrecommendationstothe
mainmembershipbody.
OBEOmanagesinvitationstotheCaltransSmallBusinessCouncilmeetings.CaltransSmall
BusinessCouncilmeetingsarenotexclusivetomembersnonmemberswhoareinterestedin
themeetingsmayattend.InadditiontothestatewideSmallBusinessCouncilmeetings,other
CaltransdistrictsorganizetheirownSmallBusinessCouncilmeetingstofocusonlocalissues.
Currently,Districts4,6,7,10and11convenetheirownSmallBusinessCouncilmeetings.
SBAand8(a)BusinessDevelopmentProgrammeetings.CaltransrepresentativesattendSBAand
8(a)BusinessDevelopmentProgramoutreacheventsseveraltimesperyeartoencouragesmall
6
IndividualsmustbemembersoftheAGC,ACEC,UnitedContractors,orIDCinordertoattendthequarterlymeetings.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE8

businesses,includingmanyMBE/WBEs,toparticipateonpubliccontractingintheStateof
California.Smallbusinessesattendthosemeetingstonetworkandpartnerwithother
businesses.Recentoutreacheventshavedrawnbetween75and300individuals,dependingon
thelocationoftheevent.
Websiteandcommunications.TheOBEOwebsiteisrevisedandupdatedoften.Thewebsite
currentlyprovidesaccesstoresourcesincludinglinkstorelevantinformation,including:
DBEcertificationdatabase(CUCP);
Certificationinstructionsandapplication;
Supportiveservicesprogramsandresources;
Technicalassistanceprogramsandresources;and
Linkstoeachofthe12districtofficeswebsitesandtocontactinformationforeachDBE
liaison.
Caltransalsomaintainsacentralizedcalendarofeventstohighlightoutreachopportunities
throughoutthestate.Districtsmallbusinessliaisonsareresponsibleforenteringinformation
abouteventsintothecalendar.
Advertisementsofcontractopportunities.Inadditiontoattendingquarterlymeetingsor
accessingtheOBEOwebsite,thereareseveralotherwaysforsmallbusinesses,includingmany
MBE/WBEs,tofindoutaboutcontractopportunitieswithCaltrans.
Weeklyadvertisements.Eachweek,Caltransprovidesacompletelistofallprojectscurrentlyout
forbidaswellasalistofupcomingprojectsthatwillbeoutforbidontheOfficeEngineer
website.Advertisementsareorganizedintoseveralgroupsincludingalladvertisedprojectsand
upcomingprojects.AlladvertisementsarerefreshedeveryMondaymorningat9am.Caltrans
alsoprovidesusefullinksforcontractorsthatwanttoseecontractdocuments,orderbidbooks,
placeaprimecontractoradvertisement,optinonparticularcontracts,orseeplanholderslists.
Projectlookahead.Caltransalsoprovidesaprojectlookaheaddatabaseforinformationon
upcomingprojectsstatewide.ContractorscancreateanaccountwithCaltranstoreceive
automatedemailswhenprojectsareaddedormodifiedandtogetcustomizedviewsofprojects
inspecificareas.Smallbusinessliaisonsineachofthedistrictofficesprovidelookahead
informationatlocalworkshopsandevents.
CaltransConnect.CaltransConnectisaspecialfeatureontheOfficeofEngineerwebsitethatlets
contractorsmanagetheprojectsinwhichtheyareinterestedandonwhichtheyareadvertising
subcontractingopportunities.CaltransConnectallowscontractorstoinputbasicfirm
qualificationsandcontactinformation.Contractorscanmodifythatinformationandcanalso
downloadbiddocumentsforCaltranseadvertisedprojects.Contractorsarealsoabletooptin
usingtheCaltransConnectfeaturetocommunicatethattheyareinterestedinsubcontractingor
supplyingmaterialstoprimecontractors.RegistrationanduseofCaltransConnectisfreetoall
contractors.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE9

Planholderssearch.Planholderslistsarecomposedofcontractorswhohaveorderedbidbooks
foraparticularproject.Planholderslistsareupdatedimmediatelywhenabidderplacesitsorder
forabidbookonline.Caltransprovidesaplanholderssearchthatoffersanuptotheminute
viewofwhoisbiddingonallcurrentlyadvertisedprojects.Theplanholderssearchprovides
optionsforsearchingbyDBEorsmallbusinessstatustohelpmeetanycontractgoals.
BidSync.Contractopportunitiesarepostedonlineandaredistributedtocontractorsthatare
registeredthroughBidSync.
Otheroutreacheventsandworkshops.Caltransparticipatesinanumberofoutreacheventsand
workshops,someofwhichareorganizedbyCaltransHeadquartersandothersbyCaltranslocal
districtoffices.ThemostnotableworkshopsandoutreacheventsthatCaltranshostsinclude:
Certificationworkshops.CaltransprovidescertificationworkshopsforDBEsandpotential
DBEsacrossthestate.ThetwohourworkshopsaretypicallyhostedbyCaltrans
headquartersandcovertopicsincludingcertificationrequirementsandguidelinesfor
completingthecertificationapplication.In2011,Caltransheadquartershosted
approximately19certificationworkshops.Smallbusinessliaisonsalsoprovidecertification
workshopsinconjunctionwithlocalmockcontractworkshopsineachoftheirdistricts.
Caltransisalsocurrentlyexploringtheideaofprovidingoneononecertification
applicationassistance.
Procurementfairs.Previouslyknownasthebusinessexchangeprogram,Caltranshosted
twoprocurementfairsin2011forlocaldistricts10and11.Foreachhalfdayfair,
purchasersfromeachstatedepartmentwereinvitedtohavefacetofacediscussionswith
smallbusinessowners.Inaddition,theprocurementfairsallowedpurchasingtobedone
onsite.Approximately100smallbusinessownersattendedeachprocurementfair.
Mockcontractworkshops.UsingguidancefromaCaltransuniformpresentation,small
businessliaisonsfromlocaldistrictshostmockcontractworkshopstoeducatelocal
contractorsonhowtodobusinesswithCaltrans.Amongmanytopics,mockcontract
workshopsteachcontractorshowtobid,howtoestimate,howtosurftheCaltranswebsite,
andhowtoexecutecontractworkonceacontractisawarded.In2011,eachworkshop
lastedaboutahalfofadayandservedmorethan100people.Inadditiontomockcontract
workshops,somedistrictofficesoffercertificationbootcampstoteachpotentialDBEs
abouttheopportunitiesofDBEcertificationandhowtocompletethecertification
application.
MandatoryPrebidconferences.ForallCaltransconstructioncontractsworthmorethan
$250,000,primecontractorsarerequiredtobepresentatmandatoryprebidconferences
inordertobeeligibletobidoncontracts.Prebidconferencesprovideanopportunityfor
smallbusinesses,includingDBEsandmanyotherMBE/WBEs,tonetworkwithprime
contractorsandtoexpresstheirinterestinperformingworkasasubcontractor.
Technicalassistance.Caltransiscurrentlyintheprocessofcoordinatingthreecontractsto
providetechnicalassistanceandoutreachtosmallbusinesses,includingmanyMBE/WBEsinthe
north,south,andcentralregionsofCalifornia.Previously,Caltransprovidedtechnicalassistance
andoutreachthroughacontractwiththeCaliforniaCommunityCollegeChancellorsOfficeand
tenSmallBusinessDevelopmentCenters(SBDC)from2006to2009.In2010,Caltrans
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE10

contractedwithLosRiosCommunityCollegeinSacramentotoprovideonlinetechnical
assistancetrainingandoutreach.
Oneononeconsultations.Caltransheadquartersandlocaldistrictofficesofferoneonone
technicalassistanceoverthetelephoneandinpersontosmallbusinesses,includingmany
MBE/WBEs.Caltransprovidesassistancerelatedtonavigatingcontractingdocuments,theDBE
certificationprocess,andtheoptinprocesstomatchsubcontractorswithappropriatebidding
opportunities.
Mentorprotgprogram.CaltransofferstheCalmentorprogramforsmallengineering
businessesandthementorprotgprogramforsmallconstructionbusinesses.Those
programsprovideDBEswiththeopportunitytoparticipateinamentorprotgtype
relationshipwithlarger,moresuccessfulbusinessesworkinginsimilarindustries.In2011,
CaltranshostedsixeventsindifferentdistrictsthroughoutCaliforniatoencourageprime
contractorparticipationintheCalmentorandmentorprotgprograms.Caltranshas
initiatedabout350mentorpairingssincetheprogramsinceptions.
Improvedcontractingpractices.ConsistentwithotherpublicagenciesinCalifornia,Caltrans
usesacompetitive,lowbidsystemforselectingconstructioncontractorsandaqualifications
basedsystemforawardingmostengineeringrelatedcontracts.Manybusinessownersand
managersinterviewedaspartofthedisparitystudynotedthatpublicsectorprocurement
processeswereoverlycumbersomeandcomplex,andrecommendedsimplification.Many
intervieweesalsocommentedthatthetypicalsizeofaCaltranscontractprecludesmanysmall
businesses,includingminorityandwomenownedfirms,frombiddingonthatwork.
AsdiscussedinAppendixJ,someintervieweeshadfavorablecommentsconcerningCaltrans
effortstosimplifybidprocesses,addoutreachopportunities,andeffectivelyexplainprocessesto
potentialbidders.
Someintervieweeswereunawareoftheseeffortsordidnotfindthemtobeuseful.Caltrans
shouldreviewthesecomments,andotherinformationitmayhave,whendeterminingfurther
improvementstoitsbidprocesses.Caltransmayalsoneedtoexpandavenuestocommunicate
itsbidprocessestopotentialprimecontractorsandsubcontractors.Forexample,manyfirms
participatingintheinterviewswerenotawareoftheCaltransConnectfeatureonCaltrans
website.Itappearsfromtheindepthinterviewsandstakeholdermeetingsconductedinthe
disparitystudythatmanybusinessesdonotknowaboutthisfeature.
Datacollection,monitoring,andreporting.Caltransiscurrentlyconsideringanalternative
databasesystemtobettertracksubcontractorsandthepaymentsthattheyreceivefromprime
contractors.AlthoughthisinitiativehasbeenanongoingpriorityforCaltransforseveralyears,
thereisarenewedfocusonupgradingthecurrentdatasystemsandprocesses.
Potentialraceandgenderneutralmeasures.Inadditiontotheraceandgenderneutral
measuresthatCaltranscurrentlyhasinplace,thereareseveralraceandgenderneutral
measuresthatCaltransisplanningorhasindevelopment.Figure95presentssomeofthose
measures.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE11

Figure95.
Race andgenderneutralmeasuresthatCaltransisplanningorhasindevelopment
CaliforniaDepartmentofTransportationRaceNeutralMeasures
MEASURESINPLANNINGORDEVELOPMENT
Develop a Data Management System to capture all business
contracting activities.
Continue efforts to provide free supportive services and
technical assistance to DBEs statewide through ten Small
Business Development Centers (SBDCs).
Consider small business contract goals and good faith efforts
on federal contracts.
Continue contract administration training through the DBE
Supportive Services Consultant.
Explore Performance-Based Accountability to contracting
practices.
Explore ways to model certification queries on the Web site
after Department of General Services' Web site.
Explore use of construction management system for data
collection.
Explore a partnership with Contractor's State License Board
to provide an exchange of contractor information, Caltrans
DBE certification, and transportation construction
opportunities to licensed contractors.
Source: CaliforniaDepartmentofTransportationOfficeofBusiness&EconomicOpportunity,2012.
TherearealsoseveralorganizationsthroughoutCaliforniathatareimplementingsimilarefforts
toencouragetheparticipationofsmallbusinessesincludingDBEsinlocalcontracting.
CaltransmightconsideradoptingsomeofthosemeasurestoencouragesmallbusinessandDBE
participationinitstransportationcontracts.
Figure96providesexamplesofraceandgenderneutralprogramsthatotherorganizationsin
Californiahaveinplace.Theremaybeseveralreasonswhycertainmeasuresarenotpracticable
forCaltrans,andtheremayalsobemeasuresinadditiontothosepresentedinFigure95that
Caltransmightconsiderusing.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE12

Figure96.
Examplesofrace andgenderneutralprogramsthatorganizationsinCaliforniahaveinplace
Neutralremedies
Technicalassistance TechnicalassistanceincludingsmallbusinesstrainingiswidelyavailablethroughoutSouthernCalifornia.
Programsprimarilyprovidegeneralinformationandassistanceforbusinessstartupsandgrowing
businessesbutalsoincludeindustryspecifictraining.Examplesrangefromgeneralsupportproviders
suchasSCOREtoindustryspecifictrainingopportunitiessuchastheCaliforniaConstructionContracting
ProgramlocatedwithinexistingSBDcentersacrosstheregion.
Otherprogramsfocusonmarketdevelopmentassistanceanduseofelectronicmediaandtechnology.
TheseassistanceprogramsareavailablethroughorganizationssuchasthePaceBusinessDevelopment
CenterandProcurementTechnicalAssistanceCentersthroughoutthestate.Morelocallyfocused
programsofferedincludefreeopportunitiesprovidedbyPasadenaCityCollegesmallbusiness
entrepreneurialserviceandtrainingacademy(BEST)andtheCityofPasadena,Foothillworkforce
investmentboardandthePasadenaChamberofCommerce,ArtofSmallBusinessseminar.
Smallbusinessfinance SmallbusinessfinancingisavailablethroughseverallocalagencieswithinSouthernCalifornia.For
example,thePaceBusinessDevelopmentCenterinLosAngeles supportsstartupswithloanpackage
preparationandcapitalacquisitionthroughfinancialinstitutionsguaranteedbytheSBA.TheSouthern
CaliforniaSmallBusinessDevelopmentCorporationalsooffersfinancingassistancewiththesupportof
theStateofCaliforniawithofficeslocallylocatedinGlendaleandLosAngeles.Otherlocalorganizations
includingminorityandregionalchambersprovidetrainingandsupportonhowtoobtainfinancingand
preparefundingdocuments.
Bondingprograms Bondingprogramsofferingbondingandfinanceassistanceandtraininghavebecomemorepopular.
ProgramssuchastheSBABondGuaranteeProgramprovidebid,performanceandpaymentbond
guaranteesforindividualcontracts.TheUSDOTBondingAssistanceProgramalsoprovidesbonding
assistanceintheformofbondingfeecostreimbursementsforDBEsperformingtransportationwork.
Localagency'salsohavebondingprogramsincludingtheCityofLosAngelesBondingAssistanceProgram
andtheLosAngelesWorldAirports(LAWA)bondingprogram.Theseprogramsofferindividualcounseling
andtraininginadditiontobid,performanceandbondguarantees.
TrainingonhowtoobtainabondisalsoprovidedbyanumberofdifferentagenciesincludingtheLos
AngelesUnifiedSchoolDistrictSmallBusinessBootcampandBondWorksProgram.Theschooldistrict's
program,preparescontractorstomanagecashflowandtaxesandprovidestrainingoncreditworthiness
criteriainthebondapprovalprocess.
Mentorprotgprograms TheAssociatedGeneralContractors(AGC)ofCaliforniawiththeSmallBusinessCouncilandCaltranshave
createdajointmentorprotgprograminanefforttoincreasediversityanddevelopnewandemerging
businessesintheconstructionindustry.
Calmentorsupportsmentorprotgrelationshipsinthearchitectureandengineeringindustry.
SBA8(a)BusinessDevelopmentMentorProtgProgramisanexampleofamentorprotgprogram
thatpairssubcontractorswithprimecontractorstoassistinmanagement,financialandtechnical
assistanceandtheexplorationofjointventureandsubcontractoropportunitiesforfederalcontracts.
TheUniversityofSouthernCaliforniaisstartingamentorprotgprogramtoassistsmallbusinesses
developthecapacitytoperformassubcontractorsandsuppliers.
Source: BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER9,PAGE13

CHAPTER10.
CaltransImplementationoftheFederalDBE
Program
Chapter10reviewsinformationrelevanttoCaltransimplementationofspecificcomponentsof
theFederalDBEProgramforFHWAfundedcontracts,aswellasabriefdiscussionofprograms
forstatefundedcontracts.Chapter10isorganizedinthreeparts:
A. FederalRequirementsofImplementingtheFederalDBEProgram;
B. MonitoringChangestotheFederalDBEProgram;and
C. CaltransStatefundedContracts.
A.FederalRequirementsofImplementingtheFederalDBEProgram
Regulationspresentedin49CFRPart26andassociateddocumentsofferstateandlocalagencies
guidanceonimplementingtheFederalDBEProgram.KeyrequirementsoftheProgramare
describedbelowintheorderthattheyarepresentedin49CFRPart26.
1
ReportingtoDOT49CFR26.11(b).CaltransmustperiodicallyreportDBEparticipation
onitstransportationrelatedconstructionandengineeringcontractstoFHWA.BBCsreviewof
Caltranstransportationcontractingdataindicatedthattheagencyrequiresprimecontractorsto
submitinformationdetailingtheutilizationofDBEsattheendofeachFHWAfundedproject.
CaltransshouldcontinuetodosoandmodifyitsreportingprocesstoensurethatallDBE
utilizationiscapturedregardlessofwhetheraprimeisusingtheutilizationtosatisfyaspecific
DBEorUDBEcontractgoal.Inaddition,Caltransshouldmakemoreefforttocapturecomplete
informationaboutDBEparticipationonFHWAfundedcontractsthatsubrecipientlocalagencies
awardthroughtheLocalAssistanceProgram.
Bidderslist49CFRSection26.11(c).AspartofitsimplementationoftheFederalDBE
Program,Caltransmustdevelopabidderslistofbusinessesthatareavailableforits
transportationcontracts.Thebidderslistmustincludethefollowinginformationabouteach
availablebusiness:
Name;
Address;
DBEstatus;
Ageofbusiness;and
Annualgrossreceipts.
1
BecauseonlycertainportionsoftheFederalDBEProgramarediscussedbelow,Caltransshouldrefertothecompletefederal
regulationswhenconsideringitsimplementationoftheprogram.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE1

Useof2012availabilityinterviewinformation.BBCs2012availabilityinterviewscollectedall
oftherequiredinformationaboutlocalbusinessesthatarepotentiallyavailablefordifferent
typesofCaltransconstructionandengineeringprimecontractsandsubcontracts.Caltrans
shouldconsideruseofthe2012availabilityinterviewdatabasetoassistinbuildinga
comprehensive,currentbidderslist.
FurtherdevelopmentandcommunicationofCaltransConnect.Caltransoffersaspecialfeature
ontheOfficeofEngineeringwebsiteCaltransConnectthatallowscontractorstoenter
basicinformationabouttheirqualificationsandcontacts.CaltransConnectisafeaturethat
allowscontractorstooptintoidentifythattheyareinterestedinsubcontractingorsupplying
materialstoprimecontractbidders.RegistrationanduseofCaltransConnectisfreetoall
businesses.
Itappearsfromtheindepthinterviewsandstakeholdermeetingsconductedinthedisparity
studythatmanybusinessesdonotknowaboutthisfeature.Caltransshouldconsiderfurther
developingwebbasedopportunitiesforcommunicationbetweenprimecontractorsand
subcontractors,andfurtherinvestinpublicizingthisfeature.
Furtherdisseminationofinformationconcerningbidandproposalawards.Inaddition,Caltrans
mightconsidermoreeffortstopublicizepostawardbidder/proposerinformationavailableon
itswebsite.
Maintainingcomprehensivevendordata.Inordertoeffectivelytracktheutilizationof
minorityandwomenownedbusinessesontransportationprimecontractsandsubcontracts,
Caltransshouldcontinuetoimprovetheinformationitcollectsontheownershipstatusof
utilizedbusinesses,includingbothprimecontractorsandsubcontractors.Notonlyshould
CaltranscollectinformationaboutDBEstatus,butitshouldalsoobtaininformationonthe
race/ethnicityandgenderofbusinessowners.CaltranscanusebusinessinformationthatBBC
collectedaspartofthe2012disparitystudytoupdateandimproveitsvendordata.
Promptpaymentmechanisms49CFRSection26.29.Caltranspromptpayment
requirementsforconstructionandengineeringcontractsappeartocomplywithCaliforniastate
lawandwithfederalregulationsin49CFRSection26.29.Caltransisrequiredtomakeprogress
paymentstoprimecontractorswithin30daysofreceiptoftheirrequestsforpayment.Prime
contractorsarethenrequiredtopaysubcontractorsnolaterthan10daysafterreceiptofeach
progresspayment,unlessotherwiseagreedtoinwriting.
Caltransmightconsiderimplementingbroadercompliancereviewtoensurethattheprompt
paymentpolicyisfollowedbyCaltrans,localagenciesandprimecontractors.Severalbusiness
ownersandmanagersthatBBCinterviewedaspartofthestudyidentifieddelayedpaymentson
publicsectorprojectsingeneral,andCaltransprojectsspecifically,asabarriertobusiness
success,particularlyforsmallbusinesses(seeAppendixJ).Otherbusinessownershadfavorable
commentsabouttimelypaymentonCaltransprojects.Therealsomaybeanincorrect
assumptionbysomebusinessesthatCaltransworkisslowpay.Morecompliancereviewand
morecommunicationaboutCaltranspoliciestothecontractingcommunitymaybebeneficial.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE2

DBEDirectory49CFRSection26.31.CaltranscurrentlymaintainsaDirectoryofDBEs
certifiedinCaliforniaonitswebsiteathttp://www.dot.ca.gov/hq/bep/find_certified.htm.The
agencyshouldcontinuetodoso.
Overconcentration49CFRSection26.33.AgenciesimplementingtheFederalDBE
ProgramarerequiredtoreportandtakecorrectivemeasuresifitfindsthatDBEsaresoover
concentratedincertainworkareasastoundulyburdennonDBEsinthoseworkareas.
Inconductingthedisparityanalysis,BBCinvestigatedthepotentialoverconcentrationon
Caltranscontracts.ThereweretwosubindustriesinwhichDBEsaccountedfor50percentor
moreoftotalsubcontractdollarsfor20072010,basedonthecontractrecordsreceivedfrom
Caltransandlocalagencies:
Trucking(54%);and
Testing(50%).
Caltransshouldreviewthisinformationandcontinuetomonitortheseandothersubindustries
foroverconcentrationinthefuture.
Businessdevelopmentprograms49CFRSection26.35;Mentorprotgprogram
49CFRAppendixDtoPart26.Businessdevelopmentprograms(BDPs)areprogramsthat
aredesignedtoassistDBEcertifiedbusinessesindevelopingthecapabilitiestocompetefor
workindependentoftheDBEProgram.AspartofaBDP,orseparately,agenciesmayestablisha
mentorprotgprogram,inwhichanonDBEoranotherDBEservesasamentorandprincipal
sourceofbusinessdevelopmentassistancetoaprotgDBE.
CaltransofferstheCalmentorprogramforsmallengineeringbusinessesandthementor
protgprogramforsmallconstructionbusinesses.ThoseprogramsprovideDBEswiththe
opportunitytoparticipateinamentorprotgtyperelationshipwithlarger,moresuccessful
businessesworkinginsimilarindustries.TobeeligiblefortheCalmentorprogram,afirmmust
becertifiedasaSmallBusinessEnterprise,aDBEoraDisabledVeteranBusinessEnterprise,or
itmustdemonstratethatitcouldqualifytobecertifiedasaSmallBusinessundertheStateof
Californiaprocess.
Someofthebusinessownersinterviewedinthedisparitystudyindicatedthattheyhad
participatedintheprogramandthatitwashelpful.Somebusinessownersdidnotfindthe
programhelpfulbecausenomentorwasprovidedorthementorwasnonresponsive.Further
expansionandimprovementofthementorprotgprogramsappeartobewarrantedfromthe
qualitativeinformationcollectedinthedisparitystudy.
Inaddition,CaltransmightexploreadditionalpartnershipstoimplementotherBDPs.Such
programswouldprovidespecializedassistancethatwouldbetailoredtotheneedsofdeveloping
businesses.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE3

Responsibilitiesformonitoringtheperformanceofotherprogramparticipants
49CFRSection26.37.TheFinalRuleeffectiveFebruary28,2011revisedrequirementsfor
monitoringandenforcingthatworkprimecontractorscommittedtoDBEsatcontractaward(or
throughcontractmodifications)isactuallyperformedbythoseDBEs.Theoriginalrequirements
aredescribedin49CFRSection26.37(b).TheFinalRulestatesthatDBEscanonlybeterminated
forgoodcauseandwithwrittenconsentfromtheawardingagency.Caltransshouldcarefully
reviewtherequirementssetforthin49CFRSection26.37(b)andintheFinalRuletoensurethat
itsmonitoringandenforcementmechanismsareconsistentwithfederalregulations.
Fosteringsmallbusinessparticipation49CFRSection26.39.TheFinalRuleeffective
February28,2011addedarequirementfortransportationagenciestofostersmallbusiness
participationintheircontracting.Itrequiredagenciestosubmitaplanforfosteringsmall
businessparticipationtoUSDOTinearly2012.USDOThasbeenreviewingthesesubmitted
programs.
WhenimplementingtheFederalDBEProgram,Caltransmustincludeanelementtostructure
contractingrequirementstofacilitatecompetitionbysmallbusinessconcerns,takingall
reasonablestepstoeliminateobstaclestotheirparticipation,includingunnecessaryand
unjustifiedbundlingofcontractrequirementsthatmayprecludesmallbusinessparticipationin
procurementsasprimecontractorsorsubcontractors.
2
AsdiscussedinAppendicesJandL,size
ofcontractsisreportedtobeabarriertosmallbusinessparticipationinpublicsectorcontracts.
ThefollowingstrategiesarelistedintheFederalDBEProgram:
Establishingaraceneutralsmallbusinesssetasideforprimecontractsunderastated
amount(e.g.,$1million).
Inmultiyeardesignbuildcontractsorotherlargecontracts(e.g.,formegaprojects)
requiringbiddersontheprimecontracttospecifyelementsofthecontractorspecific
subcontractsthatareofasizethatsmallbusinesses,includingDBEs,canreasonably
perform.
OnprimecontractsnothavingDBEcontractgoals,requiringtheprimecontractorto
providesubcontractingopportunitiesofasizethatsmallbusinesses,includingDBEs,can
reasonablyperform,ratherthanselfperformingalltheworkinvolved.
Identifyingalternativeacquisitionstrategiesandstructuringprocurementstofacilitatethe
abilityofconsortiaorjointventuresconsistingofsmallbusinesses,includingDBEs,to
competeforandperformprimecontracts.
Ensuringthatareasonablenumberofprimecontractsareofasizethatsmallbusinesses,
includingDBEs,canreasonablyperform.
Chapter9ofthereportoutlinesmanyofCaltranscurrentandplannedneutralmeasures,aswell
asexamplesoftherangeofneutralprogramsimplementedbyotherorganizationsinCalifornia.
2
49CFR26.39(a).
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE4

ProhibitionofDBEquotasandprohibitionofsetasidesforDBEsunlessinlimited
andextremecircumstances49CFRSection26.43.DBEquotasareprohibitedunder
theFederalDBEProgram.DBEsetasidesareonlytobeusedinextremecircumstances.The
FederalDBEProgramdoesallowfortheimplementationofasmallbusinessprogramforsmall
businessesthatarebiddingorproposingasprimecontractors.TheStateofCaliforniaoperatesa
programthatlimitsbiddingoncertaincontractstocertifiedsmallbusinessenterprises.Caltrans
statesthatitcurrentlydoesnotusequotasinanywayintheadministrationoftheFederalDBE
Program.
SettingoverallannualDBEgoals49CFRSection26.45.IntheFinalRuleeffective
February28,2011,USDOTchangedhowoftenagenciesthatimplementtheFederalDBE
ProgramarerequiredtosubmitoverallannualDBEgoals.AsdiscussedinChapter4,agencies
suchasCaltransnowonlyneedtodevelopandsubmitoverallannualDBEgoalseverythree
years.ThatchangewaseffectiveasofMarch5,2010.
Chapter8usesdataandanalyticaltechniquesfromthedisparitystudytoprovideCaltrans
informationusefulindevelopingitsoverallannualDBEgoalforthenextthreefiscalyears.
AnalysisofthereasonsfornotmeetinganoverallDBEgoal49CFRSection
26.47(c).OneadditiontotheFederalDBEProgrammadeundertheFinalRuleeffective
February28,2011requiresagenciestodothefollowingifitsDBEparticipationforaparticular
fiscalyeararelessthantheoverallgoalforthatyear:
Analyzeindetailthereasonsforthedifference;and
Establishspecificstepsandmilestonestoaddressthedifferenceandtoenabletheagencyto
fullymeetthegoalforthenextfiscalyear.
NeedforseparateaccountingforparticipationoffirmspotentiallycertifiedasDBEs.In
accordancewithguidanceintheFederalDBEProgram,BBCsanalysisoftheoverallDBEgoalin
thisstudy(andinthe2007Study)isbasedonDBEsthatarecurrentlycertifiedandonbusiness
thatcouldpotentiallybecertified.
OneofthereasonsthatCaltranshasnotmetitsoverallDBEgoalinpastyears,andmightnot
meetitinthefuture,isthatitsmeasurementofDBEparticipationonlyincludesfirmsthatare
DBEcertified.FirmsperformingCaltransworkthathavenotbeenDBEcertifiedare:
CountedintheoverallDBEgoal;and
NotcountedintheparticipationreportsusedtomeasurewhethertheoverallDBEgoalhas
beenattained.
BasedonverbalcommunicationwithUSDOTinWashington,D.C.in2011,agenciessuchas
CaltranscanexplorewhetheronereasontheyhavenotmettheiroverallDBEgoalisbecauseof
participationoffirmsthatcouldpotentiallybeDBEcertifiedbutarenot.USDOTthenmight
expectanagencytoexplorewaystofurtherencouragepotentialDBEtobecomeDBEcertifiedas
onewayofclosingthegapbetweenreportedDBEparticipationanditsoverallDBEgoal.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE5

Inordertohavetheinformationtoexplorethatpossibility,Caltransshould:
Developasystemtocollectinformationontherace/ethnicityandgenderoftheownersof
allbusinessesnotjustcertifiedDBEsparticipatinginCaltransandLocalAssistance
contractsasprimecontractorsandsubcontractors;
Alsocollectandmaintaininformationabouttheannualrevenueforthesebusinesses
(alreadyarequirementundertheFederalDBEProgramregardingdevelopmentofa
bidderslist);
DevelopinternalparticipationreportsforMBEsandWBEs(byrace,ethnicityandgender)
andforfirmscurrentlyandpotentiallyDBEcertified(basedonrace/ethnicity/gender
ownership,annualrevenueandotherfactorssuchaswhetherthefirmhasbeendeniedDBE
certificationinthepast),forbothCaltransandLocalAssistancecontracts;and
ContinuetotrackparticipationofcertifiedDBEsonFHWAfundedCaltransandLocal
Assistancecontracts,perUSDOTreportingrequirements.
Otherstepstoevaluatehowitmightbettermeettheoverallannualgoal.Analysisofthe
utilizationofpotentialDBEsisonestepamongmanythatCaltransshouldtakewhenexamining
anydifferencesbetweenDBEutilizationindicatedinitsDBEparticipationreportssubmittedto
FHWAanditsoverallannualDBEgoal.
Basedonitscomprehensivereview,Caltransmustestablishspecificstepsandmilestonesto
correcttheproblemsitidentifiedinitsanalysisandtoenableittobettermeetitsoverallDBE
goalinthefuture,per49CFRSection26.47(c)(2).
Maximumfeasibleportionofgoalmetthroughneutralprograms49CFRSection
26.51(a).AsdiscussedinChapter9,Caltransmustmeetthemaximumfeasibleportionofits
overallannualDBEgoalthroughtheuseofraceandgenderneutralmeansoffacilitatingDBE
participation.CaltransmustprojecttheportionofitsoverallannualDBEgoalthatcouldbe
achievedthroughsuchmeans.Theagencyshouldconsidertheinformationandanalytical
approachespresentedinChapter9whenmakingsuchprojections.
UseofDBEcontractgoals49CFRSection26.51(d).TheFederalDBEProgramrequires
agenciestoestablishcontractgoalstomeetanyportionoftheiroverallDBEgoalsthattheydo
notprojectbeingabletomeetusingraceandgenderneutralmeans,asnotedin49CFR
26.51(d).CaltransshouldassesswhethertheuseofDBEcontractgoalsisnecessarytomeetany
portionofitsoverallannualDBEgoal,basedoninformationfromthe2012DisparityStudyand
otheravailableinformation.
USDOTguidanceonDBEcontractgoals.USDOTguidelinesontheuseofDBEcontractgoals,
whicharepresentedin49CFR26.51(e),includethefollowing:
Contractgoalsmayonlybeusedoncontractsthathavesubcontractingpossibilities.
AgenciesarenotrequiredtosetacontractgoaloneveryFHWAfundedcontract.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE6

OvertheperiodcoveredbytheoverallDBEgoal,anagencymustsetcontractgoalssothat
theywillcumulativelyresultinmeetingtheportionoftheoverallgoalthatagencyprojects
beingunabletomeetthroughneutralmeans.
AnagencyscontractgoalsmustprovideforparticipationbyallDBEgroupseligiblefor
raceandgenderconsciousmeasuresandmustnotbesubdividedintogroupspecificgoals.
AnagencymustmaintainandreportdataonDBEutilizationseparatelyforcontractsthat
includeandthatdonotincludeDBEgoals.
IfCaltransdeterminesthatitneedstocontinuetheuseofDBEcontractgoals,thenitshouldalso
evaluatewhichDBEgroupsshouldbeconsideredeligibletoparticipateinanygoalsthatmay
applytoFHWAfundedcontracts(orotherUSDOTfundedcontracts).IfCaltransdeterminesto
includespecificDBEgroups(e.g.,groupsclassifiedasunderutilizedDBEsorUDBEs)butnot
othergroupsinacontractgoalsprogram,itmustsubmitawaiverrequesttoFHWA.
Useofgoodfaithefforts.BBCwasabletoanalyzeOfficeEngineerAwardTrackerReports
pertainingtoFHWAfundedconstructioncontractsfromApril2009throughSeptember2010.
ForaboutonethirdofthecontractsforwhichCaltranssetDBEcontractgoals,thewinning
contractorusedgoodfaitheffortstocomplywiththeprogram.Caltransalsorejectedgoodfaith
effortssubmissionsofsomeapparentlowbidders.Theserejectionsrepresentedabout4percent
ofconstructioncontractswhereCaltranssetDBEcontractgoals.
ExplorationofalternativeapproachestocurrentDBEcontractgoalsprogram.Someindividuals
participatinginindepthinterviews,publichearingsandstakeholdermeetingssuggestedthat
CaltransexplorenewwaysofimplementingtheFederalDBEProgramthatbetterachievedthe
objectiveoffurtherdevelopingminorityandwomenownedbusinesses.
TheyreportedthattheDBEcontractgoalsencourageextensiveeffortsonthepartofprime
contractorstodocumentthattheyhavecontactedDBEsaboutsubcontractingopportunities(the
goodfaitheffortsprocess)butthatthenatureofthebiddingprocessmakesitdifficulttoensure
meaningfulandsubstantialparticipationofDBEsonthosecontracts.Issuesinclude:
Thechallengeofunbundlingsubcontractelementsaheadoftimeintosizessuitablefor
DBEs,especiallyoncomplexprojectswithtightbiddingschedules;
DifficultyoffittingDBEsintoabidsubmissioninthefinalminutesbeforeabiddeadline,
especiallyiftheDBEhasnotbidacompletesubcontractingpackage;
TendencyofprimecontractorstolooktoDBEsforportionsoftheprojectthatareeasily
separatedinanoverallbidpackage(e.g.,trucking);
Insufficientresponsibilityonfirsttiersubcontractorsonlargeprojectstolookforwaysto
includeDBEsassecondtiersubcontractorsintheirprojectcomponents;
Insufficientincentivestodevelopworkopportunitiesonprojectsthatwouldencourage
DBEsubcontractorstobecomeprimecontractorsonfutureprojects;and
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE7

Inahighlypricecompetitiveenvironment,thechallengeofchoosinganysubcontractorfor
aportionoftheprojectthatisnotthelowbidwhentheprimecontractorisputtingtogether
thetotalbid.
AnumberofintervieweesindicatedthatthecurrentDBEcontractgoalsprogramproducesan
incentiveforprimecontractorstousehighlyautomatedgoodfaitheffortsprocessestocomply
withtheprogramratherthantoseekmeaningfulparticipationofDBEsinaproject.Somesmall
primecontractors,includingMBE/WBEs,indicatedthattheyarenotsetuptoperformgoodfaith
effortsusingtheautomatedmethodsofDBEsubcontractoroutreach,whichputsthemata
disadvantagewhencompetingforFHWAfundedcontracts.Someintervieweesalsoreported
thatnonwinningprimecontractorchallengesofapparentlowbiddersgoodfaithefforts
processesisnowatypicalpartofthebidprocessformanypublicprojects,creatingdifficulties
formanystateandlocalagencies.Insum,manyintervieweeswerehighlycriticalofaprogram
thatreliedongoodfaitheffortssubmissions.
Businessesparticipatingininterviews,stakeholdermeetingsandpublichearingswere
encouragedtoprovidesuggestionsabouthowCaltranscouldimproveitsimplementationofthe
FederalDBEProgram.Anumberofparticipantssuggestedwaysthattheythoughtweresuperior
totheDBEcontractgoals/goodfaitheffortsprocessCaltranscurrentlyinplace.(Caltransreports
thatmanyoftheseideashavebeenraisedaspartofongoingcommunicationswiththeindustry.)
Withoutsubscribingtoanyonepointofview,andwithoutreviewinglegalissuesorcompliance
issueswiththeFederalDBEProgramthatmightarise,BBCprovidesthefollowingperspectives:
Oneviewiscapturedbythestatement,Whydontwejusthaveasetasideprogramand
justknock[out]allthisothernonsense.Inthisview,eachprimecontractorsubmittinga
bidonaFHWAfundedcontractwouldneedtofindawaytohaveDBEparticipationonthe
contract,andnobidderwouldbeadvantagedbysimplysubmittinggoodfaitheffortswith
noDBEparticipation.
Anotherapproachistomonitoreachprimecontractorscumulativeeffortstoencourage
utilizationofDBEsubcontractorsacrossanumberofcontracts.Caltranswouldneedto
establishcriteriatoassesstheadequacyoftheseefforts,whichmightincludefactorssuch
astherolesofDBEsonthoseprojectsinadditiontopercentageDBEparticipation.
AnotherviewisforCaltranstoexpanditsuseofCaltransConnectonitswebsiteto
electronicallylinkprimecontractorsandsubcontractorsinterestedineachCaltrans
contract.Ifproperlystructured,thissystemmightbeabletoautomatethegoodfaithefforts
processforallcontractors.Caltransmightalsorequireprimecontractorstoprovide
feedbacktoallsubcontractorsthatsubmittedpricequotes.
CreationofabiddepositorywouldbeanextensionofCaltransoperatedsubcontractor
outreach.Atseveralstakeholdermeetings,participantsdiscussedtheconceptofaCaltrans
operatedbiddepositoryforcertainsubcontractingtradesoneachCaltransproject.
Subcontractorbids,includingthosefromDBEs,wouldbecollectedinadvanceofthe
deadlineforprimecontractorbids.Eachsubcontractorbidwouldbeavailabletoallprime
contractors.Caltranswouldberesponsibleforunbundlingsubcontractedworkand
solicitingbids,essentiallyshiftingthegoodfaitheffortsprogramcomponentfromprime
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE8

contractorstoCaltransstaff.(Participantssawadvantagesandpotentialproblemsinthis
approach,asdiscussedinAppendixJ.)
AdditionalincentivestousejointventuresbetweenmajorityownedfirmsandDBEsmight
beamethodtofurtherdevelopDBEprimecontractors.
OneapproachwouldbeforCaltransandlocalagenciestoprovideanallowanceineach
FHWAfundedcontractthatprimecontractorswoulduseforDBEparticipation.The
allowanceswouldgiveprimecontractorsmoreflexibilitytocreateportionsofthecontract
thatDBEswouldperformafterbidsubmission.
AsimilarapproachwouldbeforCaltranstoincludealevelofDBEparticipationasa
contractoptionthatprimecontractorscouldchoosetosubmitabidforinadditiontotheir
basebidonacontract.Caltranscouldthenchoosetoselectthecontractorsubmittingthe
lowbasebidorthecontractorsubmittingthelowbidwiththeDBEparticipationoption.
Underthisalternative,CaltranscouldspecifynotonlythelevelofDBEparticipationbutalso
thetypesofparticipation(e.g.,meaningfulportionsofthecontract)thatwouldberequired
underthecontractoption.Thisapproachwouldeliminatetheneedforagoodfaithefforts
componenttotheprogram.
Caltransmightfurtherexploretheseandothertypesofopportunitiesforimprovingitscurrent
implementationoftheFederalDBEProgram.Itshouldreviewlegalissues,includingstate
contractinglawandwhetheraprogramoptionwouldmeetUSDOTregulations.Caltransshould
alsoreviewwhatithaslearnedinitsmoreflexibleapplicationoftheDBEProgramtoitsdesign
buildcontracts.
Certainoftheaboveapproachesareraceandgenderneutralorcouldbemodifiedtobe
implementedonaneutralbasis(e.g.,forallcertifiedsmallbusinesses).Caltransshouldconsider
theissueofraceandgenderconsciousversusneutralimplementationofcertainprogram
optionsaswell.
Flexibleuseofanyrace andgenderconsciousmeasures49CFRSection26.51(f).
Stateandlocalagenciesmustexerciseflexibilityinanyuseofraceandgenderconscious
measuressuchasDBEcontractgoals.Forexample,ifCaltransdeterminesthatitsDBEutilization
isexceedingitsoverallDBEgoalinaparticularfiscalyear,itmustreduceoreliminateanyuseof
DBEcontractgoalstotheextentnecessary.Ifitdeterminesthatitwillfallshortoftheoverall
DBEgoalinaparticularfiscalyear,thenitmustmakeappropriatemodificationsintheuseof
raceandgenderneutralandconsciousmeasurestoallowittomeettheoverallgoal.If,after
implementationofanyadditionalneutralmeasures,Caltransobservesimprovementsinits
utilizationofcertainracial/ethnicandgendergroupsonlocallyfundedcontracts(incomparison
totheavailabilityofthosegroupsonsuchcontracts),itmightconsiderchangingitsprojectionof
howmuchofitsoverallannualDBEgoalitcanachievethroughneutralmeansinfutureyears.
Goodfaitheffortprocedures49CFRSection26.53.USDOThasprovidedguidancefor
agenciestoreviewgoodfaithefforts,includingmaterialsinAppendixAof49CFRPart26.
CaltranscurrentimplementationoftheFederalDBEProgramoutlinesthegoodfaithefforts
processthatitusesforDBEcontractgoals.TheFinalRuleeffectiveFebruary28,2011updated
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE9

requirementsforgoodfaitheffortswhenagenciesuseDBEcontractgoals.Caltransshould
review49CFRSection26.53andtheFinalRule.
Caltransmightconsiderenhancingitsgoodfaitheffortsprocessbyprovidingspecificfeedback
tononwinningbiddersthatsubmittedgoodfaitheffortsdocumentation.Currently,Caltrans
focusesonwhetherornottheapparentlowbidderhasmetgoodfaithefforts(ifthebidder
meetsaDBEcontractgoalthroughgoodfaithefforts).
CountingDBEandMBE/WBEparticipation49CFRSection26.55.Section26.55of
theFederalDBEProgramdescribeshowagenciesshouldcountDBEparticipationandevaluate
whetherbiddershavemetDBEcontractgoals.TheProgramalsogivesspecificguidancefor
countingtheparticipationofdifferenttypesofDBEsuppliersandtruckingcompanies.Section
26.11discussestheUniformReportofDBEAwardsorCommitmentsandPayments.
AspreviouslydiscussedinthisChapter,BBCrecommendsthatCaltransdevelopproceduresand
databasestoconsistentlytrackparticipationofMBE/WBEsandpotentialDBEsinFHWAand
statefundedcontractsawardedbyCaltransandlocalagencies.SuchmeasureswillhelpCaltrans
tracktheeffectivenessofraceandgenderneutralprogramsinencouragingMBE/WBE/DBE
participation.Ifapplicable,Caltransshouldalsoprovideimportantinformationregardingany
shortfallsinannualDBEparticipation,includingpreparingutilizationreportsforallMBE/WBEs
(andnotjustthosethatareDBEcertified).
3
Caltransshouldcollectandusethefollowing
information:
CaltransshouldusethedatabasesthatBBCdevelopedaspartofthestudyasastarting
pointfortrackingMBE/WBEutilization.
BusinessesworkingwithCaltransasprimecontractorsorsubcontractorsshouldbe
requiredtocompletecontractor/consultantregistrationdocuments,whichshouldinclude
informationabouttherace/ethnicityandgenderoftheirowners.
Caltransshouldcollectandreportinformationforprimecontractorandsubcontractor
utilizationonbothFHWAandlocallyfundedcontracts.
CaltransshouldalsocontinuetopreparereportsontheparticipationofcertifiedDBEsin
FHWAfundedcontracts,asrequiredundertheFederalDBEProgram.
Caltransshouldconsiderimprovingitssubcontractdatacollectionandtracking.Aspartof
thatprocess,theagencyshould:
Collectsubcontractorutilizationdata(foralltiersandsuppliers)forall
businessesregardlessofrace,gender,orcertificationstatus;
Collectinvoicesforprimecontractorsandsubcontractors;
Establishatrainingprocessforallstaffthatisresponsibleformanagingand
enteringcontractdata.Trainingshouldconveydataentryrulesand
standards,andensureconsistencyinthedataentryprocess;and
3
IncludingselfidentifiedMBE/WBEs.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE10

Requirebusinessestoreporttheirsubcontractorscontactinformationand
committeddollaramountsatthetimeofcontractaward.
DBEcertification49CFRPart26SubpartD.Caltransisacertifyingmemberofthe
CUCP.BusinessesinterestedinworkingwithCaltransthatareseekingDBEcertificationcanbe
certifiedthroughCaltransorthroughanothercertifyingmemberoftheCUCP.TheCUCPis
designedtocomplywithSubpartDof49CFRPart26.Asitcontinuestocertifybusinesses,
Caltransshouldmakethefollowingconsiderations:
IfCaltransdeterminesthatcontractgoalsareappropriateforspecificDBEgroupsfor
certaincontracts,itshouldnonethelesscontinuetocertifyallgroupsthattheFederalDBE
Programpresumestobesociallyandeconomicallydisadvantaged.
Althoughtheanalysesinthedisparitystudyfocusedonmarketplaceconditionsin
California,andthestudyteamcollectedavailabilityinformationonCaliforniabusinesses,
CaltransstillneedstoallowfirmslocatedoutsideofthestatetobecertifiedasDBEs.
ManyfirmsparticipatinginindepthinterviewsorpublichearingscommentedontheDBE
certificationprocess.
ItappearsthatmanyfirmsandlocalagenciesareconfusedaboutthemultipleSBE,MBEand
DBEprogramsoperatedbyagenciesinCalifornia.
ManyminorityandwomenownedfirmsreportedthattheywerenotDBEcertified
becausetheythoughttheprocesswouldbedifficultandthattherewouldbelittlebenefit
fromcertification.
AlthoughsomebusinessownersgavefavorablecommentsabouttheCaltranscertification
process,anumberoffirmownerswerehighlycriticalaboutthedifficultyandtime
requirementsforcertification.
CaltransmightdomoretoeffectivelycommunicateinformationabouttheFederalDBEProgram
andcertificationasaDBE,especiallythebenefitsofDBEcertification.Itmightdomoreto
coordinatewithlocalagenciesthatoperatesimilarsmallbusinessprograms,andwiththeState
ofCaliforniaSBEProgram.
AlthoughCaltransappearstofollowfederalregulationsconcerningDBEcertification,which
requirescollectionandreviewofconsiderableinformationfromprogramapplicants,itmight
researchotherwaystomakethecertificationprocesseasierforpotentialDBEs.AppendicesJ
andLprovideperceptionsoffirmsthathaveconsideredDBEcertificationorhavesuccessfully,
orunsuccessfully,gonethroughthecertificationprocess.
CaltransshouldmaintainhistoricdataonDBEcertification.ThiscouldallowCaltranstoanalyze
trendsincertificationandlearnmoreaboutDBEturnover.Asimplemethodformaintaining
historicDBEcertificationdatawouldbetoperiodicallypreservealistofcertifiedDBEsinan
electronicformat.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE11

Caltransshouldalsoexaminestaffing,trainingandinformationsystemsnecessarytoimproveits
implementationtheDBEcertificationprocessaswellasotheraspectsoftheFederalDBE
Program.
B.MonitoringChangestotheFederalDBEProgram
FederalregulationsrelatedtotheFederalDBEProgramregulationschangeperiodically,and
USDOTalsoissuesnewguidanceconcerningimplementationoftheProgram.Caltransshould
continuetomonitorsuchdevelopments.Othertransportationagenciesimplementationsofthe
FederalDBEProgramareunderreviewinfederaldistrictcourts.Caltransshouldalsocontinue
tomonitorrelevantcourtdecisionsinthoseandothercases.
C.CaltransStatefundedContracts
CertainimprovementstoCaltransimplementationoftheFederalDBEProgram,especially
concerningcontractgoalsandtrackingofMBE/WBEparticipation,mightalsobeimplemented
onaraceandgenderneutralbasisforCaltransandlocalagencycontractsthatarestatefunded.
Caltransshouldreviewtheopportunitiesonitsstatefundedcontractstofurtherencourage
participationofsmallbusinesses,includingminorityandwomenownedfirms,asallowable
understatelaw.
BBCRESEARCH&CONSULTINGFINALREPORT CHAPTER10,PAGE12

APPENDIXA.
DefinitionsofTerms
AppendixAprovidesexplanationsanddefinitionsusefultounderstandingtheCaltransdisparity
studyreport.Thefollowingdefinitionsareonlyrelevantinthecontextofthisreport.
Anecdotalevidence.Anecdotalevidenceincludespersonalaccountsandperceptionsof
incidentsincludingincidentsofdiscriminationtoldfromeachindividualintervieweesor
participantsperspective.
Availabilityanalysis.Theavailabilityanalysisinthisdisparitystudyexaminestherelative
numberofminorityandwomenownedfirmsready,willing,andabletoperform
transportationrelatedconstructionandengineeringworkforCaltransorsubrecipientlocal
agencies.
Business.Abusinessisaforprofitcompany,includingallofitsestablishments(equivalentto
firm).
Businesslisting.AbusinesslistingisarecordintheDun&Bradstreetdatabase(orother
database)ofbusinessinformation.ADun&Bradstreetrecordisjustalistinguntilthestudy
teamdeterminesittoactuallybeabusinessestablishmentwithaworkingphonenumber.
Businessestablishment.Abusinessestablishment(orsimply,establishment)isaplaceof
businesswithanaddressandworkingphonenumber.Onebusinesscanhavemanybusiness
establishments.
CaliforniaDepartmentofTransportation(Caltrans).Caltrans,apartoftheStateofCalifornias
Business,TransportationandHousingAgency,istheowner/operatorofCaliforniasfederaland
statehighwaysystem.Theagencyprovidesintercityrailservices,assistancetolocalairports
andheliports,andprovidesotherprogramssuchastransportationsafety.
CaliforniaUnifiedCertificationProgram(CUCP)database.Thestatewideelectronicdirectoryof
firmscertifiedasDisadvantagedBusinessEnterprises(DBEs)inCaliforniaundertheguidelines
in49CFRPart26.
Certifiedsmallbusiness.AcertifiedsmallbusinessisabusinesscertifiedbytheStateof
Californiathat,togetherwithaffiliates,hasemploymentof100orfewerworkersandaverage
annualgrossreceiptsof$14millionorlessoverthepreviousthreeyears(or,ifamanufacturer,
simplyhas100orfeweremployees).TobecertifiedasasmallbusinessbytheStateof
California,thefirmmustalsohaveitsprincipalofficeinCaliforniaandhaveitsownersdomiciled
inCalifornia.Thefirmmustbeindependentlyownedandoperated.Itcannotbedominantinits
fieldofoperation.Formoreonthisdefinition,see
http://www.dgs.ca.gov/pd/Programs/OSDS/SBEligibilityBenefits.aspx.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE1

Contract.Acontractisalegallybindingrelationshipbetweenthesellerofgoodsorservicesand
abuyer.
Contractor.Acontractorisafirmperformingaconstructioncontract.
Controlled.Controlmeansexercisingmanagementandexecutiveauthorityforacompany,per
federalregulations,including49CFRSection26.71.
DisadvantagedBusinessEnterprise(DBE).Asmallbusinessownedandcontrolledbyoneor
moreindividualswhoarebothsociallyandeconomicallydisadvantagedaccordingtothe
guidelinesintheFederalDBEProgram(49CFRPart26),regardlessofactualDBEcertification.
Membershipincertainraceandethnicgroupsidentifiedunderminorityownedbusiness
enterpriseinthisappendixmaymeetthepresumptionofsociallyandeconomically
disadvantaged.Womenarealsopresumedtobesociallyandeconomicallydisadvantaged.
Examinationofeconomicdisadvantagealsoincludesinvestigatingthegrossrevenuesandthe
businessownerspersonalnetworth(maximumof$1.32millionexcludingequityinahomeand
inthebusiness).SomeminorityandwomenownedfirmsdonotqualifyasDBEsbecauseofthe
grossrevenueorthenetworthrequirements.Abusinessownedbyanonminoritymalecanbe
certifiedasaDBEiftheenterprisemeetstherequirementsin49CFRPart26.
Disparity.Adisparityisadifferenceorgapbetweenanactualoutcomeandareferencepoint.
Forexample,adifferencebetweenanoutcomeforonerace/ethnicgroupandanoutcomefor
nonHispanicwhitesmayconstituteadisparity.
Disparityanalysis.Adisparityanalysiscomparesactualoutcomeswithwhatmightbeexpected
basedonotherdata.Analysisofwhetherthereisadisparitybetweentheutilizationand
availabilityofminorityandwomenownedbusinessesisonetoolinexaminingwhetherthereis
evidenceconsistentwithdiscriminationagainstsuchbusinesses.
Disparityindex.Adisparityindexiscomputedbydividingpercentutilizationbypercent
availabilityandthenmultiplyingtheresultby100.Adisparityindexof100indicatesparity.
Smallerdisparityindicesindicatelargerdisparities.
Dun&Bradstreet(D&B).D&Bistheleadingglobalprovideroflistsofbusinessestablishments
andotherbusinessinformation(seewww.dnb.com).
Employerfirms.Employerfirmsarefirmswithpaidemployeesotherthanthebusinessowner
andfamilymembers.
Enterprise.Anenterpriseisaneconomicunitthatcouldbeaforprofitbusinessorbusiness
establishment;notforprofitorganization;orpublicsectororganization.
Establishment.Seebusinessestablishment.
FederalAviationAdministration(FAA).TheFAAisanagencyoftheUSDOTthatadministers
federalfundingtosupportallaspectsofcivilaviationintheUnitedStatesincludingairportsand
airtrafficcontrolcenters.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE2

FederalDBEProgram.FederalDBEProgramreferstotheDisadvantagedBusinessEnterprise
programestablishedbytheU.S.DepartmentofTransportation(USDOT)afterenactmentofthe
TransportationEquityActforthe21
st
Century(TEA21)asamendedin1998.Theregulations
promulgatedfortheFederalDBEProgramaresetforthin49CFRPart26.
FederalHighwayAdministration(FHWA).TheFHWAisanagencyoftheUSDOTthatworkswith
stateandlocalgovernmentstoconstruct,preserve,andimprovetheNationalHighwaySystem,
otherroadseligibleforfederalaid,andcertainroadsonfederalandtriballands.
FederalTransitAdministration(FTA).TheFTAisanagencyoftheUSDOTthatadministers
federalfundingtosupportlocalpublictransportationsystemsincludingbuses,subways,light
rail,passengerferryboats,andotherformsoftransportation.
Firm.Seebusiness.
Federallyfundedcontract.Forpurposesofthisstudy,afederallyfundedcontract(or,
federallyassistedcontract)isanycontractorprojectfundedinwholeorinpartwithFHWAor
FTAfinancialassistance,includingloans.Asusedinthisstudy,itissynonymouswithfederally
assistedcontract.
Goalscontracts.GoalscontractsarethoseFHWAfundedcontractsduringthetimeperiod
whenCaltransandlocalagenciesappliedDBEcontractgoals(Caltransandlocalagenciesset
DBEcontractgoalsformanybutnotallgoalsperiodcontracts.)
Industry.Anindustryisabroadclassificationforbusinessesprovidingrelatedgoodsorservices.
Localagency.AlocalagencyisalocalgovernmentinCalifornia.Manylocalagenciesreceive
moneythroughtheCaltransLocalAssistanceProgram.Morethan600municipalities,counties,
andregionalagenciesreceivefederalandstatetransportationfundingthroughtheCaltrans
LocalAssistanceProgram.
LocalAssistanceProgram.TheCaltransLocalAssistanceProgramprovidesfinancialsupportfor
localagencytransportationrelatedconstructionandengineeringcontracts.Localagencies
awardsuchcontractsusingfundsfromtheprogram.Caltransretainscertainoversightintheuse
ofthefunds,whichmayalsoinvolvefederalfunds.ContractsthatarefundedthroughtheLocal
AssistanceProgramarereferredtoaslocalassistancecontracts.
Majorityownedbusiness.Amajorityownedbusinessisaforprofitbusinessthatisnotowned
andcontrolledbyminoritiesorwomen(seedefinitionofminoritiesbelow).
Microbusiness.Amicrobusinessisabusinessthat,togetherwithaffiliates,hasaverageannual
grossreceiptsof$3,500,000orless(or,ifamanufacturer,simplyhas25orfeweremployees).
Formoreonthisdefinition,see
http://www.dgs.ca.gov/pd/Programs/OSDS/SBEligibilityBenefits.aspx.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE3

Minorities.Minoritiesareindividualswhobelongtooneoftheracialorethnicgroupsidentified
inthefederalregulationsin49CFRPart26:
BlackAmericans(orAfricanAmericansinthisstudy),whoincludepersonshavingorigins
inanyoftheblackracialgroupsofAfrica;
HispanicAmericans,whoincludepersonsofMexican,PuertoRican,Cuban,Dominican,
CentralorSouthAmerican,orotherSpanishorPortuguesecultureororigin,regardlessof
race;
NativeAmericans,whoincludepersonswhoareAmericanIndians,Eskimos,Aleutsor
NativeHawaiians;
AsianPacificAmericans,whoincludepersonswhoseoriginsarefromJapan,China,Taiwan,
Korea,Burma(Myanmar),Vietnam,Laos,Cambodia(Kampuchea),Thailand,Malaysia,
Indonesia,thePhilippines,Brunei,Samoa,Guam,HongKong,andothercountriesand
territoriesinthePacificsetforthin49CFRSection26.5;and
SubcontinentAsianAmericans,whoincludepersonswhoseoriginsarefromIndia,
Pakistan,Bangladesh,Bhutan,theMaldivesIslands,NepalorSriLanka.
Minorityownedbusiness(MBE).AMBEisafirmwithatleast51percentownershipand
controlbyminorities.Minoritygroupsaredefinedaccordingtofederalregulations,asoutlined
in49CFRSection26.5.Forpurposesofthisstudy,afirmneednotbecertifiedtobecountedasa
minorityownedfirm.FirmsownedbyminoritywomenarealsocountedasMBEsinthisstudy
(wherethatinformationisavailable).
NorthAmericanIndustryClassificationSystem(NAICS)codes.NAICScodesidentifytheprimary
lineofbusinessofabusinessenterprise.Fordetails,see
http://www.census.gov/epcd/www/naics.html.
NonDBEs.NonDBEsarefirmsthatarenotcertifiedasDBEs,regardlessoftherace/ethnicityor
genderoftheowner.
Nongoalscontracts.NongoalscontractsincludedstatefundedcontractsandthoseFHWA
fundedcontractsoutsidethetimeperiodwhenCaltransandlocalagenciesappliedraceand
genderconsciousgoals.
Nonresponsebias.Nonresponsebiasoccurswhentheobservedresponsestoasurvey
questiondifferfromwhatwouldhavebeenobtainedifnonrespondentshadalsoansweredthe
question.
Owned.Ownedindicatesatleast51percentownershipofacompany.Forexample,a
minorityownedbusinessisatleast51percentownedbyoneormoreminorities.
PotentialDBE.ApotentialDBEisminorityorwomenownedbusinessthatisDBEcertifiedor
appearsthatitcouldbeDBEcertified(regardlessofactualDBEcertification)basedonrevenue
requirementsspecifiedaspartoftheFederalDBEProgramandotherfactorssuchaswhether
thefirmhadbeendeniedDBEcertificationinthepast.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE4

Primeconsultant.Aprimeconsultantisaprofessionalservicesfirmthatperformedaprime
contractforanenduser,suchasCaltrans.
Primecontract.Aprimecontractisacontractbetweenaprimecontractororaprimeconsultant
andtheenduser,suchasCaltrans.
Primecontractor.Aprimecontractorisaconstructionfirmthatperformedaprimecontractfor
anenduser,suchasCaltrans.
Project.AprojectreferstoaconstructionorengineeringendeavorthatCaltransbidoutduring
thestudyperiod.Aprojectcouldincludeoneormultipleprimecontractsandcorresponding
subcontracts.
Raceandgenderconsciousmeasures.Raceandgenderconsciousmeasuresarecontracting
measuresthatapplytobusinessesownedbysomeracial/ethnicgroupsbutnotothers,orthat
applytobusinessesownedbywomenbutnotmen.ADBEcontractgoalisoneexampleofarace
andgenderconsciousmeasure.Notethistermismoreaccuratelyrace,ethnicity,andgender
consciousmeasures.However,foreaseofcommunication,thestudyteamhasshortenedthis
termtoraceandgenderconsciousmeasures.
Race andgenderneutralmeasures.Raceandgenderneutralmeasuresapplytobusinesses,
regardlessoftherace/ethnicityorgenderofownership.Raceandgenderneutralmeasures
mayincludeassistanceinovercomingbondingandfinancingobstacles,simplifyingbidding
procedures,providingtechnicalassistance,establishingprogramstoassiststartupfirms,and
othermethodsopentoallfirmsoranydisadvantagedbusinessregardlessofraceorgenderof
ownership.(Abroaderlistofexamplescanbefoundin49CFRSection26.51(b).)Notethatthis
termismoreaccuratelyrace,ethnicity,andgenderneutralmeasures.However,foreaseof
communication,thestudyteamhasshortenedthistermtoraceandgenderneutralmeasures.
Relevantgeographicmarketarea.Therelevantgeographicmarketareaisthegeographicarea
inthebusinessesworkingonCaltranscontractsarelocated(basedondollarsofprimecontract
andsubcontractawards).Therelevantgeographicmarketareaisalsoreferredtoasthelocal
marketplace.CaselawrelatedtoMBE/WBEprogramsrequiresdisparityanalysestofocuson
therelevantgeographicmarketarea.
1
Remedy.Aremedyisacontractingprogrammeasurethatisdesignedtoaddressbarrierstofull
participationofaparticulargroupoffirms.
Smallbusiness.Asmallbusinessisabusinesswithlowrevenuesorsize(basedonrevenueor
numberofemployees)relativetootherfirmsintheindustry.Smallbusinessdoesnot
necessarilymeanthatthefirmiscertifiedassuch.
1
See,e.g.,Croson,448U.S.at509;49C.F.R.26.35;Rothe,545F.3dat10411042;N.Contracting,473F.3dat718,72223;
WesternStatesPaving,407F.3dat995.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE5

SmallBusinessAdministration(SBA).TheSmallBusinessAdministrationreferstotheUnited
StatesSmallBusinessAdministration,whichisanindependentagencyoftheUnitedStates
government.
Statefundedcontract.Astatefundedcontractisanycontractorprojectthatisfundedinwhole
orinpartwithStateofCaliforniafundsandisadministeredthroughCaltrans.Thosecontracts
donotincludefederalfunds.
Statisticallysignificantdifference.Astatisticallysignificantdifferencereferstoaquantitative
differenceforwhichthereisarelativelyhighprobabilitythatchancecanbecorrectlyrejectedas
areasonableexplanationforthedifference.Astandardprobabilitythatiscommonlyusedasa
benchmarkinstatisticalsignificancetestingis0.95(meaningthatadifferenceisconsidered
statisticallysignificantifthereisalessthan0.05probabilitythatrandomchancecouldcorrectly
accountforthedifference).
Subconsultant.Asubconsultantisaprofessionalservicesfirmthatperformedservicesfora
primeconsultantaspartofalargercontract.
Subcontract.Asubcontractisacontractbetweenaprimecontractororprimeconsultantand
anotherfirmsellinggoodsorservicestotheprimecontractororprimeconsultantaspartofa
largercontract.
Subcontractor.Asubcontractorisaconstructionfirmthatperformedservicesforaprime
contractoraspartofalargerproject.
Subrecipient.AsubrecipientisalocalagencyreceivingUSDOTfinancialassistancedirectlyfrom
Caltrans.
Supplier.Asupplierisafirmthatsoldsuppliestoaprimecontractoraspartofalargerproject.
USDOT.USDOTreferstotheUnitedStatesDepartmentofTransportation,whichincludesthe
FederalHighwayAdministration,theFederalTransitAdministration,andtheFederalAviation
Administration.
Utilization.Utilizationreferstothepercentageoftotalcontractingdollarsofatypeofwork
goingtoagroupoffirms(e.g.,MBE/WBEsorDBEs).
Whitewomenownedbusiness(WBE).AWBEisabusinesswithatleast51percentownership
andcontrolbynonminoritywomen.Forthisstudy,businessesownedandcontrolledby
minoritywomenarecountedasminorityownedbusinesses.Abusinessneednotbecertifiedas
aWBEorDBEtobeconsideredaWBE.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXA,PAGE6

HOLLAND&KNIGHTLLP
APPENDIXB
CALTRANS20112012
LEGALENVIRONMENTFORCALTRANS
DBEPROGRAM
KeithM.Wiener
Holland&KnightLLP
OneAtlanticCenter
1201WestPeachtreeStreet,N.E.
Suite2000
Atlanta,Georgia303093473
(404)8178515

APPENDIXB.
LegalEnvironmentforCaltransDBEProgram
TheFederalDisadvantagedBusinessEnterprise(DBE)Program(FederalDBEProgram)is
implementedviaregulations
1
promulgatedbytheUnitedStatesDepartmentofTransportation
(USDOT)asauthorizedbytheTransportationEquityActforthe21stCentury(TEA21)as
amendedandreauthorized("MAP21"andSAFETEAandSAFETEALU).
2
Thissectionbriefly
outlinesrecentcasesregardingtheFederalDBEProgramapplicabletoimplementationofthis
programinCalifornia.Asarecipientofcertaintypesoffederalfunds,theCaliforniaDepartment
ofTransportation(Caltrans)isrequiredtocomplywithfederalregulations(49CFRPart26)
andimplementtheFederalDBEProgram.Caltransisrequiredtodevelopandsubmitfor
approvaltotheUSDOTitsDBEprogram,includinganoverallstatewideannualgoalforDBE
participationonfederallyfundedcontractsandaprojectionofwhatpercentageofthatoverall
annualgoalitexpectstomeetthroughraceandgenderneutralmeansor,ifnecessary,race
andgenderconsciousmeans,inaccordancewiththefederalregulations.
3
Theannualoverall
DBEgoal,dependingontheevidenceavailabletoCaltrans,willbeachievedthroughtheuseof
raceandgenderneutralmeans,and,whereappropriate,throughtheuseofraceandgender
consciousmeans,oracombinationofthesemeasures,bymeetingthemaximumfeasibleportion
oftheoverallgoalusingraceandgenderneutralmeans.
4
Inthe2012MovingAheadforProgressinthe21
st
CenturyAct("MAP21"),Congressprovides
findingsthat"discriminationandrelatedbarriers""meritthecontinuationofthe"FederalDBE
Program.
5
InanewruleamendingtheFederalDBEProgrameffectiveFebruary28,2011,
6
the
USDOTstatedthereisacontinuingcompellingneedfortheDBEprogram.
7
TheUSDOT
concludesthat,ascourtdecisionshavenoted,theUSDOTsDBEregulationsandthestatutes
authorizingthemaresupportedbyacompellingneedtoaddressdiscriminationandits
effects.
8
TheUSDOTsaysthatthebasisfortheprogramhasbeenestablishedbyCongressand
appliesonanationwidebasis,notesthatboththeHouseandSenateFAAReauthorization
Billscontainedfindingsreaffirmingthecompellingneedfortheprogram,andreferences
additionalinformationpresentedtotheHouseofRepresentativesinaMarch26,2009hearing
beforetheTransportationandInfrastructureCommittee,andaDepartmentofJusticedocument
1
Theseregulationsarefoundat49CFRPart26(ParticipationbyDisadvantagedBusinessEnterprisesinDepartmentof
TransportationFinancialAssistancePrograms(FederalDBEProgram).
2
PubL.112141,H.R.4348,1101(b),July6,2012,___Stat.__,precededbyPubL.10959,TitleI,1101(b),August10,2005,
119Stat.1156;precededbyPubL.105178,TitleI,1101(b),June9,1998,112Stat.107.
3
49CFRSection26.45.
4
49CFRSections26.45,26.51.
5
PubL.112141,H.R.4348,1101(b),July6,2012,____Stat____.
6
76Fed.Reg.5083(January28,2011)amendingtheFederalDBEProgramat49C.F.R.Part26.
7
76F.R.at5095.
8
76F.R.at5095.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXB,PAGE1

entitled,TheCompellingInterestforRaceandGenderConsciousFederalContracting
Programs:ADecadeLaterAnUpdatetotheMay23,1996ReviewofBarriersforMinorityand
WomenOwnedBusinesses.
9
Thisinformation,theUSDOTstates,confirmsthecontinuing
compellingneedforraceandgenderconsciousprogramssuchastheDOTDBEprogram.
10
InimplementingitsFederalDBEProgram,Caltransisresponsibleforserious,goodfaith
considerationofworkablerace,ethnic,andgenderneutralmeans,includingthoseidentifiedin
49CFRSection26.51(b),thatcanbeimplemented.
11
TheUSDOThasadvisedthatrecipients
shouldtakeaffirmativestepstouseasmanyraceneutralmeansofachievingDBEparticipation
identifiedat49CFRSection26.51(b)aspossible.
12
TheNinthCircuitCourtofAppealsinWestern
StatesPavingCo.v.WashingtonStateDOTfoundthattheregulationsrequireastatetomeetthe
maximumfeasibleportionof[its]overallgoalbyusingraceneutralmeans.
13
Thecourtshave
heldthatwhileastateisnotrequiredtoexhausteverypossiblerace,ethnicity,andgender
neutralalternative,itdoes"requireserious,goodfaithconsiderationofworkableraceneutral
alternatives.
14
InformulatingitsimplementationoftheFederalDBEProgram,Caltransmust
assesshowmuchoftheannualDBEgoalcanbemetthroughneutralmeansandwhat
percentage,ifany,shouldbemetthroughraceandgenderconsciousmeans.
Raceorgenderconsciousmeasuresarenotappropriateunlesstheyaretoremedyidentified
discriminationoritseffectsinthestatetransportationcontractingindustry.
15
IfCaltrans
implementsraceandgenderconsciousmeasures,itissubjecttothestrictscrutinyanalysisas
appliedbythecourts.
16
Thefirstprongofthestrictscrutinyanalysisrequiresagovernmental
entitytohaveacompellinggovernmentalinterestinremedyingpastidentifieddiscrimination.
TheNinthCircuitandotherfederalcourtshaveheldthat,withrespecttotheFederalDBE
Program,statedepartmentsoftransportation(DOTs)donotneedtoindependentlysatisfythis
prongbecauseCongresshassatisfiedthecompellinginteresttestofthestrictscrutinyanalysis.
17
9
Id.
10
Id.
11
WesternStatesPavingCompanyv.WashingtonStateDepartmentofTransportation,407F.3d983,993(9thCir.2005),cert.
denied,546U.S.1170(2006)(citing49CFRSection26.51(a)).
12
QuestionsandAnswersConcerningResponsetoWesternStatesPavingCompanyv.WashingtonStateDepartmentof
Transportation[hereinafterDOTGuidance],availableathttp://www.fhwa.dot.gov/civilrights/dbe_memo_a5.htm.See49CFR
Section26.9(January2006).
13
407F.3dat993;49CFRSection26.51.
14
WesternStatesPaving,407F.3dat993.
15
49CFRPart26(ParticipationbyDisadvantagedBusinessEnterprisesinDepartmentofTransportationFinancialAssistance
Programs(FederalDBEProgram).
16
SeeCityofRichmondv.J.A.Croson,488U.S.469(1989);AdarandConstructors,Inc.v.Pena,515U.S.200(1995);Western
StatesPaving,407F.3d983.TheNinthCircuitCourtofAppealsandothercourtshaveappliedintermediatescrutinyto
genderconsciousprograms.TheNinthCircuithasinterpretedthisstandardtorequirethatgenderbasedclassificationsbe:
(1)Supportedbybothanexceedinglypersuasivejustification;and(2)Substantiallyrelatedtotheachievementofthat
underlyingobjective.SeeWesternStatesPaving,407F.3dat990n.6;CoralConstr.Co.v.KingCounty,941F.2d910,931(9th
Cir.1991);Equal.Found.v.CityofCincinnati,128F.3d289(6thCir.1997).
17
NorthernContracting,Inc.v.IllinoisDOT,473F.3d715,721(7thCir.2007),rehgandrehgenbancdenied(7thCir.2007);
WesternStatesPaving,407F.3dat991;SherbrookeTurf,Inc.v.MinnesotaDOTandGrossSeedCo.v.NebraskaDeptofRoad,345
F.3d964,969(8thCir.2003);AdarandConstructors,Inc.v.Slater(AdarandVII),228F.3d1147,1176(10thCir.2000).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXB,PAGE2

ThesecondprongofthestrictscrutinyanalysisrequiresthatastateDOTsimplementationof
theFederalDBEProgrambenarrowlytailoredtoremedyidentifieddiscriminationina
particularstatestransportationcontractingandprocurementmarket.
18
Thenarrowtailoringrequirementhasseveralcomponents.AccordingtotheNinthCircuitin
WesternStatesPaving,astatemusthavesufficientevidenceofdiscriminationwithinthestates
owntransportationcontractingmarketplaceinordertodeterminewhetherornotthereisthe
needforraceorgenderconsciousremedialaction.
19
Thus,theNinthCircuitruledthatmere
compliancewithfederalregulationsimplementingtheFederalDBEProgramaloneisnotenough
tosatisfystrictscrutiny.
20
Second,theCourtfoundthatevenwhereevidenceofdiscriminationis
presentinastate,anarrowlytailoredprogramshouldapplyonlytothoseminoritygroupswho
haveactuallysuffereddiscrimination.Foraspecificminoritygrouptobeincludedinanyrace
consciousmeasuresinastatesimplementationoftheFederalDBEProgram,theremustbe
evidencethatthegroupsuffereddiscriminationoritseffectswithinthelocalmarketplace.
21
Federalcourtshaveheldthatadditionalfactorsmayalsobepertinentindeterminingwhethera
stateDOTsimplementationoftheFederalDBEProgramisnarrowlytailored:flexibilityand
limiteddurationofraceconsciousmeasures,includingtheavailabilityofwaiverprovisions;the
relationshipofthenumericalDBEgoalstotherelevantmarket;theeffectivenessofalternative
raceandgenderneutralremedies;andtheimpactofaraceconsciousremedyontherightsof
thirdparties.
22
InWesternStatesPaving,theUnitedStatesintervenedtodefendtheFederalDBEPrograms
facialconstitutionality,and,accordingtotheCourt,statedthat[theFederalDBEPrograms]
raceconsciousmeasurescanbeconstitutionallyappliedonlyinthosestateswheretheeffectsof
discriminationarepresent.
23
Accordingly,theUSDOThasadvisedfederalaidrecipientsthat
anyuseofraceconsciousmeasuresmustbepredicatedonevidencethattherecipienthas
concerningdiscriminationoritseffectswithinthelocaltransportationcontracting
marketplace.
24
18
WesternStatesPaving,407F3dat995998;SherbrookeTurf,345F.3dat97071.
19
WesternStatesPaving,407F.3dat99798,100203.
20
Id.at9951003.IntheNorthernContractingdecision(January8,2007),theSeventhCircuitheldthatastateisinsulated
from[anarrowtailoring]constitutionalattack,absentashowingthatthestateexceededitsfederalauthority.IDOThereis
actingasaninstrumentoffederalpolicyandNorthernContracting(NCI)cannotcollaterallyattackthefederalregulations
throughachallengetoIDOTsprogram.473F.3dat722.TheSeventhCircuitdistinguishedboththeNinthCircuitdecisionin
WesternStatesPavingandtheEighthCircuitdecisioninSherbrookeTurf,relatingtoanasappliednarrowtailoringanalysis.
ThecourtheldthatIDOTsapplicationofafederallymandatedprogramislimitedtothequestionofwhetherthestate
exceededitsgrantoffederalauthorityundertheFederalDBEProgram.Id.at722.Thecourtaffirmedthedistrictcourt
upholdingthevalidityofIDOTsDBEprogram;see,e.g.,GeodCorp.v.NewJerseyTransitCorp.,etal.,746F.Supp.2d642(D.N.J.
2010);SouthFloridaChapteroftheAssociatedGeneralContractorsv.BrowardCounty,Florida,544F.Supp.2d1336(S.D.Fla.
2008).
21
WesternStatesPaving,407F.3dat9961000.
22
See,e.g.,id.at993995;SherbrookeTurf,345F.3dat971;AdarandVII,228F.3dat1181.
23
WesternStatesPaving,407F.3dat996;seealsoBr.fortheUnitedStates,at28(April19,2004).
24
DOTGuidance,availableathttp://www.fhwa.dot.gov/civilrights/dbe_memo_a5.htm(January2006).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXB,PAGE3

FollowingWesternStatesPaving,theUSDOTrecommendedtheuseofdisparitystudiesbystate
DOTstoexaminewhetherornotthereisevidenceofdiscriminationoritseffects,andhow
remediesmightbenarrowlytailoredindevelopingtheirDBEProgramtocomplywiththe
FederalDBEProgram.
25
TheUSDOTsuggestsconsiderationofbothstatisticalandanecdotal
evidence,andthatevidenceofdiscriminationanditseffectsshouldbeexaminedseparatelyfor
eachgrouppresumedtobedisadvantagedin49CFRPart26.
26
Therefore,Caltransin20062007conductedadisparitystudyandimplementeditsDBE
Programin2009asapprovedbytheFederalHighwayAdministration.Caltransisnowengaging
inanewdisparitystudytocomplywiththefederalregulationsandtheFederalDBEProgram,
basedonthemostrecentauthorityregardingtheFederalDBEProgram.
27
OngoingReview.Theaboverepresentsabriefsummaryofthelegalframeworkpertinentto
implementationofaFederalDBEProgrambyCaltransinCalifornia.Becausethisisadynamic
areaofthelaw,theframeworkissubjecttoongoingreviewasthelawcontinuestoevolve.
25
Id.;seealso42CFRSection26.45.
26
DOTGuidance,availableathttp://www.fhwa.dot.gov/civilrights/dbe_memo_a5.htm(January2006).
27
SeeNorthernContracting,473F.3d715;WesternStatesPaving,407F.3d983;SherbrookeTurf,345F.3d964;AdarandVII,
228F.3d1147;GeodCorp.,746F.Supp.2d642;SouthFloridaChapterofAGC,544F.Supp.2d1336.SeealsoH.B.RoweCo.,Inc.v.
Tippett,615F.3d233(4
th
Cir.2010)(CourtupheldNorthCarolinaDOTMBEprogramonitsfaceandasappliedtoAfricanand
NativeAmericansubcontractorsandstruckdownprogramasappliedtoWBEsandAsianandHispanicAmerican
subcontractors);RotheDevelopmentCorp.v.U.S.DepartmentofDefense,545F.3d1023(Fed.Cir.2008)(Courtheld
unconstitutionalDepartmentofDefensesocialandeconomicdisadvantagedbusinesses("SDBs")program).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXB,PAGE4

APPENDIXC.
CollectionofAvailabilityInformation
ThestudyteamanalyzedMBE/WBEavailabilityfortransportationrelatedconstructionand
engineeringprimecontractsandsubcontractsthatCaltransawardedbetween
January1,2007andDecember31,2010.AppendixCexpandsontheanalysispresentedin
Chapter4bydescribingthestudyteams:
A. Generalapproachtocollectingavailabilityinformation;
B. Developmentofthebusinessestablishmentslist;
C. Developmentoftheinterviewinstrument;
D. Interviewexecutionandperformance;and
E. Additionalconsiderationsrelatedtomeasuringavailability.
A.GeneralApproachtoCollectingAvailabilityInformation
BBCcontractedwithCRItoconducttelephoneinterviewswiththousandsofbusiness
establishmentsinCalifornia.BusinessestablishmentsthatCRIinterviewedwerebusinesses
withlocationsinCaliforniathatthestudyteamidentifiedasdoingworkinfieldscloselyrelated
tothetypesoftransportationrelatedconstructionandengineeringcontractsthatCaltrans
awardedduringthestudyperiod.Thestudyteambegantheinterviewprocessbydetermining
relevantsubindustriesforeachrelevantCaltranscontractelementandidentifying8digitD&B
workspecializationcodesthatbestcorrespondedtothosesubindustries.
1
Thestudyteamthen
collectedinformationaboutCaliforniabusinessestablishmentsthatD&Blistedashavingtheir
primarylinesofbusinesswithinthoseworkspecializations.Ratherthandrawingasampleof
businesslistingsfromD&B,thestudyteamattemptedtocontacteverybusinessestablishment
listedunderrelevantworkspecializationcodes.
2
CRIattemptedtoreach46,196businessestablishmentsandwereabletosuccessfullycontact
15,496businessestablishments,aboutonehalfoftheestablishmentswithvalidphonelistings.
OfbusinessestablishmentsthatCRIsuccessfullycontacted,10,172establishmentscompleted
availabilityinterviews.Thistotalincluded7,431constructionestablishmentsand2,741
engineeringestablishments.
1
D&Bhasdeveloped8digitindustrycodesthatprovidemoreprecisedefinitionsoffirmspecializationsthanthe4digitSIC
codesortheNAICScodesthatthefederalgovernmenthasprepared.
2
BecauseD&Borganizesitsdatabasebybusinessestablishmentandnotbybusinessorfirm,BBCpurchasedbusiness
listingsinthatfashion.Therefore,inmanycases,thestudyteampurchasedinformationaboutmultipleCalifornialocationsof
asinglebusinessandcalledallofthoselocations.BBCsmethodforconsolidatinginformationfordifferentestablishmentsthat
wererelatedtothesamebusinessisdescribedlaterinthisappendix.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE1

B.DevelopmentoftheBusinessEstablishmentsList
Thestudyteamdidnotexpecteverybusinessestablishmentthatitcontactedtobepotentially
availableforCaltranswork.Thestudyteamsgoalwastodevelop,withahighdegreeof
precision,unbiasedestimatesoftherelativeavailabilityofMBE/WBEsforthetypesof
transportationrelatedconstructionandengineeringcontractsthatCaltransawardedduringthe
studyperiod.Infact,forsomeworkspecializations,BBCanticipatedthatrelativelyfew
businesseswouldbeavailabletoperformthattypeofworkforCaltrans.
Inthesamevein,BBCdidnotdesigntheresearcheffortsothatthestudyteamwouldcontact
everyCaliforniabusinesspossiblyperformingconstructionorengineeringwork.Todosowould
haverequiredincludingworkspecializationsthatareonlymarginallyrelatedtothetypesof
transportationrelatedconstructionandengineeringcontractsthatCaltransawardedduringthe
studyperiod.Inaddition,somebusinessestablishmentsworkinginrelevantsubindustriesmay
havebeenmissingfromcorrespondingD&Blistings.
BBCdeterminedthetypesofworkinvolvedinCaltranscontractelementsbyreviewingprime
contractandsubcontractdollarsthatwenttodifferenttypesofbusinessesduringthestudy
period.FigureC1liststhe8digitworkspecializationcodeswithinconstructionand
engineeringthatthestudyteamdeterminedweremostrelatedtothecontractdollarsthat
Caltransawardedduringthestudyperiod.BBCincludedthoseworkspecializationsaspartof
theavailability,utilization,anddisparityanalyses.Thestudyteamgroupedthosespecializations
intodistinctsubindustries,whicharealsopresentedinFigureC1.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE2

FigureC1.
Constructionandengineeringrelatedworkspecializationsandsubindustriesincludedinthe
availability,utilization,anddisparityanalyses
Industrycode Industrydescription Industrycode Industrydescription
Construction
Highwayandstreetconstruction
16110000 Highwayandstreetconstruction
16110200 Surfacingandpaving
16110202 Concreteconstruction;roads,highways,sidewalks,etc.
16110204 Highwayandstreetpavingcontractor
16110205 Resurfacingcontractor
16110207 Gravelordirtroadconstruction
16119901 Generalcontractor,highwayandstreetconstruction
16119902 Highwayandstreetmaintenance
16220000 Bridge,tunnel,andelevatedhighwayconstruction
16229901 Bridgeconstruction
16229902 Highwayconstruction,elevated
16229903 Tunnelconstruction
16229904 Viaductconstruction
16290105 Drainagesystemconstruction
16290108 Irrigationsystemconstruction
16299904 Piledrivingcontractor
17710000 Concretework
17710102 Groutingwork
17710103 Gunitecontractor
17710201 Curbconstruction
17710202 Sidewalkcontractor
17710300 Driveway,parkinglot,andblacktopcontractors
17710301 Blacktop(asphalt)work
17710303 Parkinglotconstruction
17719901 Concretepumping
17719902 Concreterepair
17999929 Signinstallationandmaintenance
Fences,guardrailsandsigns
16110100 Highwaysignsandguardrails
16110101 Guardrailconstruction,highways
16110102 Highwayandstreetsigninstallation
17999912 Fenceconstruction
Excavationanddrilling
16110203 Grading
17940000 Excavationwork
17999906 Coredrillingandcutting
Landsiteprep
16290400 Landpreparationconstruction
16299902 Earthmovingcontractor
16299903 Landcleariingcontractor
17410100 Foundationandretainingwallconstruction
17990900 Buildingsitepreparation
Water,sewer,andutilitylines
16230000 Water,sewer,andutilitylines
16230101 Gasmainconstruction
16230203 Telephoneandcommunicationlineconstruction
16230300 Waterandsewerlineconstruction
16230303 Watermainconstruction
16239903 Pipelayingconstruction
16239904 Pipelineconstruction,nsk
16239906 Undergroundutilitiescontractor
17310302 Fiberopticcableinstallation
Asphaltandconcretesupply
29510000 Asphaltpavingmixturesandblocks
29510200 Pavingmixtures
29510201 Asphaltandasphalticpavingmixtures
29510203 Concrete,asphaltic
32720303 Concreteproducts,precast,nec
32730000 Readymixedconcrete
50320100 Pavingmaterials
50320502 Concreteandcinderblock
52110502 Cement
Wreckinganddemolition
16299901 Blastingcontractor,exceptbuildingdemolition
17950000 Wreckinganddemolitionwork
17959901 Concretebreakingforstreetsandhighways
17959902 Demolition,buildingsandotherstructures
Electricalwork
17310000 Electricalwork
17310100 Electricpowersystemscontractors
17310103 Standbyoremergencypowerspecialization
17310300 Communicationsspecialization
17319903 Generalelectriccontractor
17319904 Lightingcontractor
Constructionsandandgravel
14420000 Constructionsandandgravel
14420201 Gravelmining
Paintingandstriping
17210303 Pavementmarkingcontractor
17210300 Industrialpainting
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE3

FigureC1(continued).
Constructionandengineeringrelatedworkspecializationsandsubindustriesincludedinthe
availability,utilization,anddisparityanalyses
Construction(continued)
Trucking
42120000 Localtrucking,withoutstorage
42129905 Dumptruckhaulage
42129908 Heavymachinerytransport,local
42129912 Steelhauling,local
42139905 Heavymachinerytransport
Flaggingservices
73599912
73899921 Flaggingservices(trafficcontrol)
Otherconstructionsupplies
34410201 Bridgesections,prefabricated,highway
36690200 Transportationsignalingdevices
50399912 Soilerosioncontrolfabrics
Workzonetrafficequipment(flags,cones,
barrels,etc.)
Rebarandreinforcingsteel
34490101 Bars,concretereinforcing:fabricatedsteel
17919902 Concretereinforcement,placingof
Otherconcretesupplies
50510209 Forms,concreteconstruction(steel)
Heavyconstructionequipmentandrental
73530000 Heavyconstructionequipmentrental
Landscapeservices
07820000 Lawnandgardenservices
07829903 Landscapecontractors
Other
17910000 Structuralsteelerection
17919907
Precastconcretestructuralframingorpanels,placingof
Engineering
Engineering
87110000 Engineeringservices
87110400 Constructionandcivilengineering
87110402 Civilengineering
Transportationconsulting
87420410 Transportationconsultant
87480204 Trafficconsultant
Surveyingandmapping
73890800 Mapmakingservices
73890801 Mapmakingordrafting,includingaerial
73890802 Photogrammetricmapping
87130000 Surveyingservices
Landscapearchitecture
07810000 Landscapecounselingandplanning
Archeologicalexpeditions
87330201 Archeologicalexpeditions
Constructionmanagement
87419902 Constructionmanagement
Environmentalresearch,consultingandtesting
87489905 Environmentalconsultant
Testingservices
73890200 Inspectionandtestingservices
87340300 Pollutiontesting
87340301 Hazardouswastetesting
87349909 Soilanalysis
Source: BBCResearch&ConsultingfromD&BinformationandCaltransandlocalagencycontracts.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE4

C.DevelopmentoftheInterviewInstrument
BBCdraftedanavailabilityinterviewinstrumenttocollectbusinessinformationfrom
constructionandengineeringrelatedbusinessestablishments.
3
Caltransstaffreviewedthe
interviewinstrumentbeforethestudyteamuseditinthefield.Theinterviewinstrumentthat
thestudyteamusedwithconstructionestablishmentsispresentedastheendofAppendixC.
Thestudyteammodifiedtheconstructioninterviewinstrumentslightlyforusewith
engineeringrelatedestablishmentsinordertoreflecttermsmorecommonlyusedinthelatter
industry(e.g.,thestudyteamsubstitutedthewordsprimeconsultantandsubconsultantfor
primecontractorandsubcontractorwheninterviewingengineeringestablishments).
BBCalsodevelopedafaxandemailversionoftheinterviewinstrumentforbusiness
establishmentsthatthestudyteaminitiallycontactedbytelephonebutthatreporteda
preferencetocompletetheinterviewinfaxoremailformat.Thoseestablishmentsreturned
completedinterviewstothestudyteamviafaxoremail.
Interviewstructure.Theavailabilityinterviewincluded15sections,andCRIcoveredall
sectionswitheachbusinessestablishmentthattheysuccessfullycontactedandthatwaswilling
tocompleteaninterview.Interviewersdidnotknowtherace/ethnicityorgenderofbusiness
ownerswhencallingbusinessestablishments.
1.Identificationofpurpose.TheinterviewsbeganbyidentifyingCaltransasthesurveysponsor
anddescribingthepurposeofthestudy(i.e.,developingalistofcompaniesinvolvedin
construction,maintenance,ordesignworkonawiderangeofhighwayandotherstateorlocal
governmenttransportationrelatedprojects).
2.Verificationofcorrectbusinessname.Theinterviewerverifiedthatheorshehadreachedthe
correctbusiness,andifnot,inquiredaboutthecorrectcontactinformationforthecorrect
business.Whenthebusinessnamewasnotcorrect,interviewersaskediftherespondentknew
howtocontactthebusiness.CRIfollowedupwiththedesiredcompanybasedonthenewcontact
information(seeareasXandYoftheAvailabilityInterviewInstrumentattheendofAppendix
C).
3.Verificationofworkrelatedtotransportationrelatedprojects. Theinterviewerasked
whethertheorganizationdoesworkorprovidesmaterialsrelatedtoconstruction,maintenance,
ordesignontransportationrelatedprojects(QuestionA1).Interviewerscontinuedthe
interviewwithbusinessesthatrespondedyestothatquestion.
4.Verificationofforprofitbusinessstatus.Theintervieweraskedwhethertheorganizationwas
aforprofitbusinessasopposedtoagovernmentornotforprofitentity(QuestionA2).
Interviewerscontinuedtheinterviewwithbusinessesthatrespondedyestothatquestion.
5.Confirmationofmainlineofbusiness.Businessesconfirmedtheirmainlinesofbusiness
accordingtoD&B(QuestionA3).IfD&Bsworkspecializationcodeswereincorrect,businesses
describedtheirmainlinesofbusiness(QuestionA4).Aftertheinterviewwascomplete,BBC
3
BBCusedsimilarinterviewinstrumentsinpreviousavailabilityanalyses,includingaspartofCaltrans2007disparitystudy.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE5

codednewinformationonmainlinesofbusinessintoappropriate8digitD&Bwork
specializationcodes.
6.Solelocationormultiplelocations.Becausethestudyteaminterviewedbusiness
establishmentsandnotbusinessesorfirms,theintervieweraskedbusinessownersormanagers
iftheirbusinesseshadotherlocations(QuestionA5),andwhethertheirestablishmentswere
affiliatesorsubsidiariesofotherfirms(QuestionsA8andA9).
7.Pastbidsorworkwithgovernmentagenciesandprivatesectororganizations.The
intervieweraskedaboutbidsandworkonpastgovernmentandprivatesectorcontracts.CRI
askedthosequestionsinconnectionwithbothprimecontractsandsubcontracts(QuestionsB1
throughB8).
8.Qualificationsandinterestinfuturetransportationwork.Theintervieweraskedabout
businessesqualificationsandinterestinfutureworkwithCaltransandothergovernment
agencies.CRIaskedthosequestionsinconnectionwithbothprimecontractsandsubcontracts
(QuestionsB9throughB12).
9.Geographicareas.Theintervieweraskedaseriesofquestionsaboutthegeographicregions
Californiainwhichbusinessesservecustomers(QuestionsC1athroughC1j).
10.Yearestablished.Theintervieweraskedbusinessestoidentifytheapproximateyearin
whichtheywereestablished(QuestionD1).
11.Largestcontracts.Thestudyteamaskedbusinessestoidentifythevalueofthelargest
contractonwhichtheyhadbidonorhadbeenawardedinCaliforniaduringthepastfiveyears.
CRIaskedthosequestionsforbothprimecontractsandsubcontracts(QuestionsD2through
D4).
12.Ownership.Theintervieweraskedwhetherbusinesseswereatleast51percentownedand
controlledbywomenand/orminorities.Ifbusinessesindicatedthattheywereminorityowned,
theywerealsoaskedabouttherace/ethnicityofownership(QuestionsE1throughE3).The
studyteamconfirmedthatinformationthroughseveralotherdatasources,includingCalifornia
UnifiedCertificationProgramlistsanagencyreview.
Wheninformationaboutrace/ethnicityorgenderofownershipconflictedbetweensources,the
studyteamreconciledthatinformationthroughfollowuptelephonecallswiththebusinesses.
13.Businesssize.Theintervieweraskedseveralquestionsaboutthesizeofbusinessesinterms
oftheirrevenuesandnumberofemployees.Forbusinesseswithmultiplelocations,thissection
alsoaskedabouttheirrevenuesandnumberofemployeesacrossalllocations(QuestionsF1
throughF6).
14.Potentialbarriersinthemarketplace.Theintervieweraskedaseriesofquestions
concerninggeneralinsightsonthemarketplaceandCaltranscontractingpractices(Questions
G1athroughG1j).Theinterviewalsoincludedanopenendedquestionaboutthelocal
marketplace(QuestionG2).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE6

15.Contactinformation.Theinterviewconcludedbycollectingcompletecontactinformation
fortheestablishmentandtheindividualwhocompletedtheinterview(QuestionsH1through
H6).
D.InterviewExecutionandResponses
BBCheldplanningandtrainingsessionsbothinpersonandviatelephonewithCRIexecutives
andinterviewerspriortoconductingtheavailabilityinterviews.CRIconductedtheinterviewsin
late2011andearly2012.CRIprogrammedtheinterviewsandconductedthemviatelephone.
CRIprovidedBBCwithdailyandweeklydatareports.
Tominimizenonresponse,CRImadeatleastfiveattemptstosuccessfullyreacheachbusiness
establishment.CRIidentifiedandattemptedtointerviewanavailablecompanyrepresentative
suchastheowner,manager,chieffinancialofficer,orotherkeyofficialwhocouldprovide
accurateanddetailedresponsestothequestionsincludedintheinterview.
FigureC2.
Dispositionof
attemptsto
interviewbusiness
establishments
Note:
Afteruptofiveattemptsto
completeaninterviewwith
eachestablishment.
Source:
BBCResearch&Consulting
from201112availability
Interviews.
Percentof
business
listings
Number
offirms
Beginninglist
Lessduplicatenumbers
Lessnonworkingphonenumbers
Lesswrongnumber/business
46,196
882
10,012
2,545
Uniquebusinesslistingswithworkingphonenumbers
Lessnoanswer
Lesscouldnotreachresponsiblestaffmember
Lesslanguagebarrier
Lessunreturnedfax/email
32,757
9,362
6,427
331
1,138
100.0 %
28.6
19.6
1.0
3.5
Establishmentssuccessfullycontacted 15,499 47.3 %
Establishmentsthatthestudyteamsuccessfullycontacted.FigureD2presentsthe
dispositionof46,196businessestablishmentsthatthestudyteamattemptedtocontactfor
availabilityinterviewsandhowthatnumberresultedinthe15,499establishmentsthatthe
studyteamwasabletosuccessfullycontact.
Nonworkingorwrongphonenumbers.Someofthebusinesslistingsthatthestudyteam
purchasedfromD&BandthatCRIattemptedtocontactwere:
Duplicatephonenumbers(882listings);or
Nonworkingphonenumbers(10,012listings);or
Wrongnumbersforthedesiredbusinesses(2,545listings).
Somenonworkingphonenumbersandwrongnumbersreflectedbusinessesgoingoutof
businessorchangingtheirnamesandphonenumbersbetweenthetimethatD&Blistedthem
andthetimethatthestudyteamattemptedtocontactthem.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE7

Workingphonenumbers.AsshowninFigureD2,therewere32,757businessestablishments
withworkingphonenumbersthatCRIattemptedtocontact.CRIwasunsuccessfulincontacting
manyofthosebusinessesforvariousreasons:
CRIcouldnotreachanyoneafterfiveattemptsatdifferenttimesofthedayandondifferent
daysoftheweekfor9,362establishments.
CRIcouldnotreacharesponsiblestaffmemberafterfiveattemptsatdifferenttimesofthe
dayondifferentdaysoftheweekfor6,427establishments.
CRIcouldnotconductavailabilityinterviewsduetolanguagebarriersfor331
establishments.
CRIsenthardcopyfaxoremailavailabilityinterviewsuponrequestbutdidnotultimately
receivecompletedinterviewsfor1,138establishments.
Aftertakingintoaccountthoseunsuccessfulattempts,CRIwasabletosuccessfullycontact
15,499businessestablishments,or47percentofbusinessestablishmentswithvalidphone
listings.
Establishmentsincludedintheavailabilitydatabase.FigureC3presentsthedisposition
ofthe15,499businessestablishmentsthatCRIsuccessfullycontactedandhowthatnumber
resultedinthe3,377thatthestudyteamincludedintheavailabilitydatabase.
FigureC3.
Dispositionofsuccessfullycontactedbusinessestablishments
Number
offirms
Establishmentssuccessfullycontacted
LessestablishmentsnotinterestedindiscussingavailabilityforCaltranswork
Establishmentsthatcompletedinterviewsaboutfirmcharacteristics
Lessnoroadandhighwayrelatedwork
Lessnotaforprofitbusiness
Lessmultipleestablishments
Lesslineofworkoutsidescope
Lessnopastbid/award
Lessnointerestinfuturework
Lessestablishedafterthestudyperiod(2011)
FirmsavailableforCaltranswork
15,499
5,324
10,175
5,764
158
319
117
387
34
19
3,377
Note: Eighthundredandnineestablishmentswerenotincludedintheavailabilitymarketplaceanalysis(AppendixH)becausetheydidnot
respondtoquestionD2orD4ontheavailabilitysurvey.
Source: BBCResearch&Consultingfrom20112012availabilityInterviews.
EstablishmentsnotinterestedindiscussingavailabilityforCaltranswork.Ofthe15,499
businessestablishmentsthatthestudyteamsuccessfullycontacted,5,324establishmentswere
notinterestedindiscussingavailabilityforCaltranswork.Thus,abouttwothirdsof
successfullycontactedbusinessestablishments(66%)completedavailabilityinterviews
(10,175establishments).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE8

EstablishmentsavailableforCaltranswork.Thestudyteamonlydeemedaportionofthe
businessestablishmentsthatcompletedavailabilityinterviewsaspotentiallyavailableforthe
transportationrelatedconstructionorengineeringprimecontractsandsubcontractsthat
Caltransawardedduringthestudyperiod.Thestudyteamexcludedsomeofthebusinessesthat
completedinterviewsfromtheavailabilitydatabaseforvariousreasons:
BBCexcluded5,764establishmentsthatindicatedthattheirbusinesseswerenotinvolved
inconstructionorengineeringwork.
Oftheestablishmentsthatcompletedavailabilityinterviews,158indicatedthattheywere
notaforprofitbusiness.Theinterviewendedwhenrespondentsreportedthattheir
establishmentswerenotforprofitbusinesses.
Threehundredandnineteenestablishmentswereactuallydifferentlocationsofthesame
businesses.Priortoanalyzingresults,BBCcombinedresponsesfrommultiplelocationsof
thesamebusinessintoasingledatarecord.
BBCexcluded117establishmentsthatindicatedthattheirbusinesseswereinvolvedin
constructionorengineeringworkbutreportedthattheirmainlinesofbusinesswere
outsideofthestudyscope.
BBCexcluded387firmsthatreportednothavingbidonorbeenawardedcontractsin
Californiawithinthepastfiveyears.
BBCexcluded34firmsthatreportednotbeingqualifiedorinterestedineitherprime
contractingorsubcontractingopportunitieswithCaltrans.
BBCexcluded19firmsthatreportedbeingestablishedin2011orlater.Thesefirmswould
nothavebeenavailableforcontractandsubcontractpiecesawardedduringtheCaltrans
studyperiodofJanuary1,2007throughDecember31,2010.
Afterthoseexclusions,theintervieweffortproducedadatabaseof3,377businessespotentially
availableforCaltranswork.
Codingresponsesfrommultilocationfirms.Responsesfromdifferentlocationsofthesame
businesswerecombinedintoasingle,summarydatarecordaccordingtoseveralrules:
Ifanyoftheestablishmentsreportedbiddingorworkingonacontractwithinaparticular
subindustry,thestudyteamconsideredthebusinesstohavebidorworkedonacontractin
thatsubindustry.
Thestudyteamcombinedtherolesofworkthatestablishmentsreported(i.e.,prime
contractororsubcontractor)intoasingleresponse,againcorrespondingtotheappropriate
subindustry.Forexample,ifoneestablishmentreportedthatitworksasaprimecontractor
andanotherestablishmentreportedthatitworksasasubcontractor,thenthestudyteam
consideredthebusinessasavailableforbothprimecontractsandsubcontractswithinthe
relevantsubindustry.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE9

Ifanyestablishmentreportedservingcustomerswithinanyofthe10regionsofCalifornia
(seeQuestionsCaCjoftheAvailabilityInterviewInstrument),thenthestudyteam
consideredthefirmtobeavailableforworkinthespecifiedregions.
Exceptwhentherewasalargediscrepancyamongindividualresponsesregarding
establishmentdates,BBCusedthemedianfoundingdatethattheestablishmentsprovided.
Incasesoflargediscrepancies,BBCfollowedupwiththebusinessestablishmentstoverify
establishmentdateinformation.
BBCconsideredthelargestcontractthatanyestablishmentreportedhavingbidorworked
onasthelargestcontractforwhichthebusinesscouldbeconsideredavailable.
BBCconsideredthelargestrevenuetotalthatanyestablishmentreportedastherevenue
capforthebusiness(forpurposesofdeterminingstatusasPotentialDBEs).
BBCdeterminedthenumberofemployeesforbusinessesbycalculatingthemodeorthe
meanofresponsesfromitsestablishments.
BBCcodedbusinessesaswomenorminorityownedifmostofitsestablishmentsindicated
suchstatus.
E.AdditionalConsiderationsRelatedtoMeasuringAvailability
Thestudyteammadeseveraladditionalconsiderationsrelatedtoitsapproachtomeasuring
availability,particularlyastheyrelatedtoCaltransimplementationoftheFederalDBE
program.
NotprovidingacountofallbusinessesavailableforCaltranswork.Thepurposeof
theavailabilityinterviewswastoprovidepreciseandrepresentativeestimatesofthe
percentageofMBE/WBEsavailableforCaltranswork.Theavailabilityanalysisdidnotprovidea
comprehensivelistingofeverybusinessthatcouldbeavailableforCaltransworkandshouldnot
beusedinthatway.Federalcourtshaveapprovedthecustomcensusapproachtomeasuring
availabilitythatBBCusedinthisstudy.USDOTsTipsforGoalsSettingintheDisadvantaged
BusinessEnterprise(DBE)Programalsorecommendsasimilarapproachtomeasuring
availabilityforimplementationoftheFederalDBEProgram.
4
NotusingMBE/WBEorDBEdirectories,prequalificationlists,orbidderslists.
USDOTguidancefordeterminingMBE/WBEavailabilityrecommendsdividingthenumberof
firmsinanagencysDBEdirectorybythetotalnumberoffirmsinthemarketplace,asreported
inU.S.Censusdata.Asanotheroption,theUSDOTsuggestsusingalistofprequalifiedfirmsora
bidderslisttoestimatetheavailabilityofMBE/WBEsforanagencysprimecontractsand
subcontracts.
4
USDOT.TipsforGoalsSettingintheDisadvantagedBusinessEnterprise(DBE)Program,http://osdbu.dot.gov/?TabId=133.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE10

TheprimaryreasonwhythestudyteamrejectedsuchapproacheswhenmeasuringMBE/WBE
availabilityforCaltransisthatdividingasimplecountofcertifiedDBEsbytotalfirmsdoesnot
providethedataonbusinesscharacteristicsthatthestudyteamdesiredforthedisparitystudy.
Forexample,theinterviewsprovidedataonbusinessesqualifications,bidcapacities,and
interestsinCaltranswork,whichallowedthestudyteamtotakeamorerefinedapproachto
measuringavailability.
Themethodologyappliedinthisstudytakesacustomcensusapproachandaddsseverallayers
ofrefinementtopreciselymeasureMBE/WBEavailability.Courtcasesinvolvingstate
implementationoftheFederalDBEProgramhaveapprovedtheuseofacustomcensus
approachtomeasuringavailability.
UsingD&Blistsasthesampleframe.BBCbeganitscustomcensusapproachtomeasuring
availabilitywithD&Bbusinesslists.D&Bdoesnotrequirefirmstopayafeetobeincludedinits
listingsitiscompletelyfreetolistedfirms.D&Bprovidesthemostcomprehensiveprivate
databaseofbusinesslistingsintheUnitedStates.Evenso,thedatabasedoesnotincludeall
establishmentsoperatinginCalifornia:
TherecanbealagbetweenformationofanewbusinessandinclusioninD&B,meaning
thatthenewestbusinessesmaybeunderrepresentedinthesampleframe.Basedon
informationfromBBCsintervieweffort,newlyformedbusinessesaremorelikelytobe
minorityorwomenowned,suggestingthatMBE/WBEsmightbeslightly
underrepresentedinthefinalavailabilitydatabase.
AlthoughD&Bincludeshomebasedbusinesses,thosebusinessesaremoredifficultto
identifyandarethussomewhatlesslikelythanotherbusinessestobeincludedinD&B
listings.Small,homebasedbusinessesaremorelikelythanlargefirmstobeminorityor
womenowned,whichagainsuggeststhatMBE/WBEsmightbeslightlyunderrepresented
inthefinalavailabilitydatabase.
BBCisnotabletoquantifyhowmuch,ifany,underrepresentationofMBE/WBEsexistsinthe
finalavailabilitydatabase.However,BBCconcludesthatanysuchunderrepresentationwouldbe
minorandwouldnothaveameaningfuleffectontheavailabilityanddisparityanalyses
presentedinthisreport.Inaddition,therearenosubstitutebusinesslistingsthatwouldbetter
addresssuchissues.
Selectionofspecificsubindustries.Definingsubindustriesbasedonspecificwork
specializationcodes(e.g.,NAICS,SIC,orD&Bcodes)isastandardstepinanalyzinganeconomic
sector.Governmentandprivatesectoreconomicdataaretypicallyorganizedaccordingtosuch
codes.Aswithanysuchresearch,therearelimitationswhenchoosingspecificD&Bwork
specializationcodestodefinesetsofestablishmentstobeinterviewed.Forexample,itwasnot
possibleforBBCtoincludeallfirmspossiblydoingworkrelatedtotransportationconstruction
andengineeringcontractswithoutconductinginterviewswithnearlyeveryfirminCalifornia.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE11

Inaddition,someD&Bcodesareimpreciseandoverlapwithotherbusinessspecialties,andD&B
doesnotmaintainan8digitlevelofdetailforeachfirminitsdatabase.Somebusinessesspan
severaltypesofwork,evenatthe4digitlevelofspecificity.Thatoverlapcanmakeclassifying
firmsintosinglemainlinesofbusinessdifficultandimprecise.Whenthestudyteamasked
businessownersandmanagerstoidentifymainlinesofbusiness,theyoftengavebroad
answers.Forthoseandotherreasons,BBCcombinedmanyoftheworkspecializationcodesinto
broadersubindustriestomoreaccuratelyclassifyfirmsintheavailabilitydatabase.
Nonresponsebias.Ananalysisofnonresponsebiasconsiderswhetherbusinessesthatwere
notsuccessfullyinterviewedaresystematicallydifferentfromthosethatweresuccessfully
interviewedandincludedinthefinaldataset.Thereareopportunitiesfornonresponsebiasin
anysurveyeffort.Thestudyteamconsideredthepotentialfornonresponsebiasdueto:
Researchsponsorship;
Workspecializations;and
Languagebarriers.
Researchsponsorship.InterviewersintroducedthemselvesbyidentifyingCaltransasthe
interviewsponsorbecausefirmsmaybelesslikelytoanswersomewhatsensitivebusiness
questionsiftheinterviewerwasunabletoidentifythesponsor.Inpastinterviewefforts
particularlythoserelatedtoavailabilitystudiesBBChasfoundthatidentifyingthesponsor
substantiallyincreasesbusinesseswillingnesstoparticipate.
Workspecializations.Businessesinhighlymobilefields,suchastrucking,maybemoredifficult
toreachforavailabilityinterviewsthanbusinessesmorelikelytoworkoutofafixedoffice
(e.g.,engineeringfirms).Thisfactorsuggeststhatresponseratesmaydifferbywork
specialization.Simplycountingallinterviewedfirmsacrossworkspecializationstodetermine
overallMBE/WBEavailabilitywouldleadtoestimatesthatwerebiasedinfavoroftypesof
businessesthatcouldbeeasilycontactedbytelephone.
WorkspecializationasapotentialsourceofnonresponsebiasintheBBCavailabilityanalysisis
minimalbecausetheavailabilityanalysiscomparesfirmswithinparticularworkfieldsbefore
determininganMBE/WBEavailabilityfigure.Inotherwords,thepotentialfortruckingfirmsin
particulartobelesslikelytocompleteaninterviewislessimportant,becauseMBE/WBE
truckingfirmscompletinginterviewsarecomparedwithothertruckingfirmsandnottoall
firmsacrossallspecializations.Inthisexample,workspecializationwouldbeasourceofnon
responsebiasonlyifparticularsubsetsoftruckingfirmswerelesslikelythanothersubsetsto
beeasilycontactedbytelephone.
Languagebarriers.CaltranscontractingdocumentsareinEnglishandarenotinother
languages.Thestudyteammadethedecisiontoonlyincludebusinessesabletocompletethe
interviewinEnglishintheavailabilityanalysistoeliminatelanguagebarriersasapotential
explanationforanydifferencesinoutcomesobservedbetweenMBE/WBEsandmajorityowned
firms.BBCattemptedtoovercomeanylanguagebarriersbymakingextraeffortstoreachafirm
representativewhocouldconducttheinterviewinEnglish.Firmsunabletocompletethe
interviewsduetolanguagebarriersrepresented1percentofthevalidbusinesslist.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE12

Responsereliability.Businessownersandmanagerswereaskedquestionsthatmaybe
difficulttoanswer,includingquestionsaboutrevenuesandemployment.Forthatreason,the
studyteamcollectedrelatedD&Binformationfortheirestablishmentandaskedrespondentsto
confirmthatinformationorprovidemoreaccurateestimates.Further,respondentswere
typicallynotaskedtogiveabsolutefiguresfordifficultquestionssuchasrevenueandnumberof
employees.Rather,theyweregivenrangesofdollarfiguresandemploymentlevels.
BBCexploredreliabilityofinterviewresponsesinanumberofways.Forexample:
BBCalsorevieweddatafromtheavailabilityinterviewsinlightofinformationfromother
sourcessuchastheCUCPdatabaseandinformationaboutfirmscollectedfromCaltrans
andLocalAssistancecontracts.Forexample,theCUCPincludesdataontherace/ethnicity
andgenderoftheownersofDBEcertifiedbusinesses.Thestudyteamcomparedinterview
responsesconcerningfirmownershipwiththeCUCPdata.
Caltransreviewedcertainfirmleveldatadevelopedfromtheavailabilityinterviews.
BBCalsoexaminedCaltransandlocalagencycontractdatafor2007through2010to
explorethelargestcontractsandsubcontractsawardedtocompaniesparticipatinginthe
availabilityinterviews.BBCwasabletocompareinterviewresponsesconcerninglargest
contractsreceivedsince2007withactualCaltransandlocalagencycontractdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE13

CaltransDisparityStudy
AvailabilitySurveyInstrument
[Construction]
Hello.Mynameis[interviewername]fromCustomerResearchInternational.Wearecalling
onbehalfoftheCaliforniaDepartmentofTransportation(Caltrans).
Thisisnotasalescall.Caltransisdevelopingalistofcompaniesinvolvedinconstruction,
maintenance,ordesignonawiderangeofhighwayandotherstateorlocalgovernment
transportationrelatedprojects.WhocanIspeakwithtogettheinformationweneedfrom
yourfirm?
[AFTERREACHINGANAPPROPRIATELYSENIORSTAFFMEMBER,THEINTERVIEWERSHOULD
REINTRODUCETHEPURPOSEOFTHESURVEYANDBEGINWITHQUESTIONS]
[IFASKED,THEINFORMATIONDEVELOPEDINTHESEINTERVIEWSWILLADDTOCALTRANS
EXISTINGDATAONCOMPANIESINTERESTEDINWORKINGWITHTHEDEPARTMENT]
X1.Ihaveafewbasicquestionsaboutyourcompanyandthetypeofworkyoudo.Canyou
confirmthatthisis[firmname]?
1=RIGHTCOMPANYSKIPTOA1
2=NOTRIGHTCOMPANY
99=REFUSETOGIVEINFORMATIONTERMINATE
Y1.Canyougivemeanyinformationabout[firmname]?
1=Yes,sameownerdoingbusinessunderadifferentnameSKIPTOY4
2=Yes,cangiveinformationaboutnamedcompany
3=Companybought/sold/changedownershipSKIPTOY4
98=No,doesnothaveinformationTERMINATE
99=RefusedtogiveinformationTERMINATE
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE14

Y3.Canyougivemethecompleteaddressorcityfor[firmname]? SKIP TO Y5
(NOTETOINTERVIEWERRECORDINTHEFOLLOWINGFORMAT:
.STREETADDRESS
.CITY
.STATE
.ZIP
1=VERBATIM
Y4.Andwhatisthenewnameofthebusinessthatusedtobe[firmname]?
(ENTERUPDATEDNAME)
1=VERBATIM
Y5.Canyougivemethenameoftheownerormanagerofthenewbusiness?
(ENTERUPDATEDNAME)
1=VERBATIM
Y6.CanIhaveatelephonenumberforhim/her?
(ENTERUPDATEDPHONE)
1=VERBATIM
Y7.Canyougivemethecompleteaddressorcityfor[newfirmname]?
1=VERBATIM
Y8.Doyouworkforthisnewcompany?
1=YES
2=NOTERMINATE
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE15

A1.First,Iwanttoconfirmthatyourfirmdoesworkorprovidesmaterialsrelatedto
construction,maintenance,ordesignontransportationrelatedprojects.Isthiscorrect?
(NOTETOINTERVIEWERINCLUDESANYWORKRELATEDTOCONSTRUCTION,
MAINTENENCEORDESIGNSUCHASBUILDINGANDPARKINGFACILITIES,PAVINGAND
CONCRETE,TUNNELS,BRIDGESANDROADSANDOTHERTRANSPORTATIONRELATED
PROJECTS.ITALSOINCLUDESTRUCKINGANDHAULING)
(NOTETOINTERVIEWERINCLUDESHAVINGDONEWORK,TRYINGTOSELLTHISWORK,OR
PROVIDINGMATERIALS)
1=Yes
2=No TERMINATE
A2.Letmeconfirmthat[firmname/newfirmname]isabusiness,asopposedtoanonprofit
organization,afoundation,oragovernmentoffice.Isthatcorrect?
1=Yes,abusiness
2=No,other TERMINATE
A3.Letmealsoconfirmwhatkindofbusinessthisis.TheinformationwehavefromDun&
Bradstreetindicatesthatyourmainlineofbusinessis[SICCodedescription].Isthiscorrect?
(NOTETOINTERVIEWERIFASKED,DUN&BRADSTREETORD&B,ISACOMPANYTHAT
COMPILESBUSINESSINFORMATIONTHROUGHOUTTHECOUNTRY)
1=YesSKIPTOA5
2=No
98=(DON'TKNOW)
99=(REFUSED)
A4.Whatwouldyousayisthemainlineofbusinessat[firmname/newfirmname]?
(NOTETOINTERVIEWER:IFRESPONDENTINDICATESTHATFIRMSMAINLINEOFBUSINESS
ISGENERALCONSTRUCTIONORGENERALCONTRACTOR,PROBETOFINDOUTIFMAIN
LINEOFBUSINESSISCLOSERTOINDUSTRIALBUILDINGCONSTRUCTIONORHIGHWAYAND
ROADCONSTRUCTION.)
(ENTERVERBATIMRESPONSE)
1=VERBATIM
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE16

A5.Isthisthesolelocationforyourbusiness,ordoyouhaveofficesinotherlocations?
1=Solelocation
2=Haveotherlocations
98=(DON'TKNOW)
99=(REFUSED)
A8.Isyourcompanyasubsidiaryoraffiliateofanotherfirm?
1=IndependentSKIPTOB1
2=Subsidiaryoraffiliateofanotherfirm
98=(DON'TKNOW)SKIPTOB1
99=(REFUSED)SKIPTOB1
A9.Whatisthenameofyourparentcompany?
1=ENTERNAME
98=(DON'TKNOW)
99=(REFUSED)
A9.ENTERNAMEOFPARENTCOMPANY
1=VERBATIM
B1.Next,Ihaveafewquestionsaboutyourcompanysroleintransportationrelated
construction,maintenanceordesign.Duringthepastfiveyears,hasyourcompanysubmitted
abidorapricequoteforanypartofacontractforastateorlocalgovernmentagencyin
California?
1=Yes
2=NoSKIPTOB3
98=(DON'TKNOW)SKIPTOB3
99=(REFUSED)SKIPTOB3
B2.Werethosebidsorpricequotestoworkasaprimecontractor,asubcontractor,a
trucker/hauler,orasasupplier?
[MULTIPUNCH]
1=Primecontractor 4=Supplier(ormanufacturer)
2=Subcontractor 98=(DON'TKNOW)
3=Trucker/hauler 99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE17

B3.Duringthepastfiveyears,hasyourcompanyreceivedanawardforworkonanypartofa
contractforastateorlocalgovernmentagencyinCalifornia?
1=Yes
2=NoSKIPTOB5
98=(DON'TKNOW)SKIPTOB5
99=(REFUSED)SKIPTOB5
B4.Werethoseawardstoworkasaprimecontractor,asubcontractor,atrucker/hauler,oras
asupplier?
[MULTIPUNCH]
1=Primecontractor 4=Supplier(ormanufacturer)
2=Subcontractor 98=(DON'TKNOW)
3=Trucker/hauler 99=(REFUSED)
B5.Duringthepastfiveyears,hasyourcompanysubmittedabidorapricequoteforanypart
ofacontractforaprivatesectororganizationinCalifornia?
1=Yes
2=NoSKIPTOB7
98=(DON'TKNOW)SKIPTOB7
99=(REFUSED)SKIPTOB7
B6.Werethosebidsorpricequotestoworkasaprimecontractor,asubcontractor,a
trucker/hauler,orasasupplier?
[MULTIPUNCH]
1=Primecontractor 4=Supplier(ormanufacturer)
2=Subcontractor 98=(DON'TKNOW)
3=Trucker/hauler 99=(REFUSED)
B7.Duringthepastfiveyears,hasyourcompanyreceivedanawardforworkonanypartofa
contractforaprivatesectororganizationinCalifornia?
1=Yes
2=NoSKIPTOB9
98=(DON'TKNOW)SKIPTOB9
99=(REFUSED)SKIPTOB9
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE18

B8.Werethoseawardstoworkasaprimecontractor,asubcontractor,atrucker/hauler,oras
asupplier?
[MULTIPUNCH]
1=Primecontractor 4=Supplier(ormanufacturer)
2=Subcontractor 98=(DON'TKNOW)
3=Trucker/hauler 99=(REFUSED)
B9.Pleasethinkaboutfuturetransportationrelatedworkasyouanswerthefollowingfew
questions.IsyourcompanyqualifiedandinterestedinworkingwithCaltransasaprime
contractor?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
B10.Isyourcompanyqualifiedandinterestedinworkingwithcities,counties,orotherlocal
transportationagenciesinCaliforniaasaprimecontractor?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
B11.IsyourcompanyqualifiedandinterestedinworkingwithCaltransasasubcontractor,
trucker/hauler,orsupplier?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
B12.Isyourcompanyqualifiedandinterestedinworkingwithcities,counties,orotherlocal
transportationagenciesinCaliforniaasasubcontractor,trucker/hauler,orsupplier?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE19

NowIwanttoaskyouaboutthegeographicareasyourcompanyserveswithinCalifornia.As
youanswer,thinkaboutwhetheryourcompanycouldbeinvolvedinpotentialtransportation
relatedprojectsinthatregion.
C1a.CouldyourcompanydoworkintheNorthCoastRegion,extendingfromMendocino
throughEurekatotheOregonborder?
[NOTETOINTERVIEWER:IFASKED,THENORTHCOASTAREAISCALTRANSDISTRICT1,
WHICHINCLUDESDELNORTE,HUMBOLDT,LAKE,ANDMENDOCINOCOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1b.CouldyourcompanydoworkintheShastaReddingArea,extendingfromRedBluff
throughReddingtotheOregonborder?
[NOTETOINTERVIEWER:IFASKED,THESHASTAREDDINGAREAISCALTRANSDISTRICT2,
WHICHINCLUDESLASSEN,MODOC,PLUMAS,SHASTA,SISKIYOU,TEHAMA,ANDTRINITY
COUNTIES]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1c.CouldyourcompanydoworkintheSacramentoTahoeRegion,extendingthroughthe
SacramentoValleytoLakeTahoeanduptoChico?
[NOTETOINTERVIEWER:IFASKED,THESACRAMENTOTAHOEAREAISCALTRANSDISTRICT
3,WHICHINCLUDESBUTTE,COLUSA,ELDORADO,GLENN,NEVADA,PLACER,SACRAMENTO,
SIERRA,SUTTER,YOLO,ANDYUBACOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE20

C1d.CouldyourcompanydoworkintheSanFranciscoBayArea,extendingfromSanJoseto
SantaRosa?
[NOTETOINTERVIEWER:IFASKED,THESANFRANCISCOBAYAREAISCALTRANSDISTRICT4,
WHICHINCLUDESALAMEDA,CONTRACOSTA,SONOMA,MARIN,SANFRANCISCO,SANMATEO,
SANTACLARA,SOLANO,ANDNAPACOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1e.CouldyourcompanydoworkintheCentralCoastRegion,extendingfromSantaBarbara
toSalinas?
[NOTETOINTERVIEWER:IFASKED,THECENTRALCOASTAREAISCALTRANSDISTRICT5,
WHICHINCLUDESMONTEREY,SANBENITO,SANLUISOBISPO,SANTABARBARA,ANDSANTA
CRUZCOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1f.CouldyourcompanydoworkintheCentralValley,extendingfromBakersfieldto
Stockton?
[NOTETOINTERVIEWER:IFASKED,THECENTRALVALLEYISCALTRANSDISTRICTS6AND
10,WHICHINCLUDEALPINE,AMADOR,CALAVERAS,FRESNO,KERN,KINGS,MADERA,
MARIPOSA,MERCED,SANJOAQUIN,STANISLAUS,TUOLUMNE,ANDTULARECOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE21

C1g.CouldyourcompanydoworkintheBishopRegion,extendingfromBishoptoMonoLake
alongtheNevadaborder?
[NOTETOINTERVIEWER:IFASKED,THEBISHOPAREAISCALTRANSDISTRICT9,WHICH
INCLUDESINYOANDMONOCOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1h.CouldyourcompanydoworkintheSanBernardinoRiversideRegion,includingSan
BernardinoandRiversideandextendingeasttoArizona?
[NOTETOINTERVIEWER:IFASKED,THESANBERNARDINORIVERSIDEAREAISCALTRANS
DISTRICT8,WHICHINCLUDESRIVERSIDEANDSANBERNARDINOCOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
C1i.CouldyourcompanydoworkintheLosAngelesBasin,extendingfromSanClementeto
VenturaandeasttoPomona?
[NOTETOINTERVIEWER:IFASKED,THELOSANGELESBASINISCALTRANSDISTRICTS7AND
12,WHICHINCLUDELOSANGELES,VENTURA,ANDORANGECOUNTIES.]
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE22

C1j.CouldyourcompanydoworkintheSanDiegoRegion,extendingfromSanDiegoand
OceansideeasttotheArizonaborder?
(NOTETOINTERVIEWER:IFASKEDTHESANDIEGOAREAISCALTRANSDISTRICT11,WHICH
INCLUDESSANDIEGOANDIMPERIALCOUNTIES.)
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
D1.Aboutwhatyearwasyourfirmestablished?
(RECORDFOURDIGITYEAR,e.g.,'1977')
9998=(DON'TKNOW)
9999=(REFUSED)
1=NUMERIC(16002008)
D2.Inroughdollarterms,whatwasthelargesttransportationrelatedcontractorsubcontract
yourcompanywasawardedinCaliforniaduringthepastfiveyears?
(NOTETOINTERVIEWERIFASKED,INCLUDESEITHERPRIVATESECTORORPUBLIC
SECTOR)
(NOTETOINTERVIEWERINCLUDESCONTRACTSNOTYETCOMPLETE)
(NOTETOINTERVIEWERREADCATEGORIESIFNECESSARY)
1=$100,000orless 8=Morethan$20millionto$50million
2=Morethan$100,000to$500,000 9=Morethan$50millionto$100million
3=Morethan$500,000to$1million 10=Morethan$100millionto$200million
4=Morethan$1millionto$2million 11=$200millionorgreater
5=Morethan$2millionto$5million 97=(NONE)
6=Morethan$5millionto$10million 98=(DON'TKNOW)
7=Morethan$10millionto$20million 99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE23

D3.Wasthatthelargesttransportationrelatedcontractorsubcontractthatyourcompanybid
onorsubmittedquotesforinCaliforniaduringthepastfiveyears?
1=YesSKIPTOE1
2=No
98=(DON'TKNOW)SKIPTOE1
99=(REFUSED)SKIPTOE1
D4.Whatwasthelargesttransportationrelatedcontractorsubcontractthatyourcompany
bidonorsubmittedquotesforinCaliforniaduringthepastfiveyears?
(NOTETOINTERVIEWERIFASKED,INCLUDESEITHERPRIVATESECTORORPUBLIC
SECTOR)
(NOTETOINTERVIEWERREADCATEGORIESIFNECESSARY)
1=$100,000orless 8=Morethan$20millionto$50million
2=Morethan$100,000to$500,000 9=Morethan$50millionto$100million
3=Morethan$500,000to$1million 10=Morethan$100millionto$200million
4=Morethan$1millionto$2million 11=$200millionorgreater
5=Morethan$2millionto$5million 97=(NONE)
6=Morethan$5millionto$10million 98=(DON'TKNOW)
7=Morethan$10millionto$20million 99=(REFUSED)
E1.Mynextquestionsareabouttheownershipofthebusiness.Abusinessisdefinedas
womanownedifmorethanhalfthatis,51percentormoreoftheownershipand
controlisbywomen.Bythisdefinition,is[firmname/newfirmname]awomanowned
business?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE24

E2.Abusinessisdefinedasminorityownedifmorethanhalfthatis,51percentormore
oftheownershipandcontrolisAfricanAmerican,Asian,Hispanic,NativeAmericanoranother
minoritygroup.Bythisdefinition,is[firmname||newfirmname]aminorityowned
business?
1=Yes
2=NoSKIPTOF1
3=(OTHERGROUPSPECIFY)
98=(DON'TKNOW)SKIPTOF1
99=(REFUSED)SKIPTOF1
E2.OTHERGROUP SPECIFY
1=VERBATIM
E3.WouldyousaythattheminoritygroupownershipofyourcompanyismostlyAfrican
American,AsianPacificAmerican,SubcontinentAsianAmerican,HispanicAmerican,orNative
American?
1=AfricanAmerican
2=AsianPacificAmerican(personswhoseoriginsarefromJapan,China,Taiwan,Korea,
Burma(Myanmar),Vietnam,Laos,Cambodia(Kampuchea),Thailand,Malaysia,
Indonesia,thePhilippines,Brunei,Samoa,Guam,theU.S.TrustTerritoriesofthe
PacificIslands(RepublicofPalau),theCommonwealthoftheNorthernMarianas
Islands,Macao,Fiji,Tonga,Kirbati,Juvalu,Nauru,FederatedStatesofMicronesia,or
HongKong)
3=HispanicAmerican(personsofMexican,PuertoRican,Cuban,Dominican,Centralor
SouthAmerican,orotherSpanishorPortuguesecultureororigin,regardlessofrace)
4=NativeAmerican(AmericanIndians,Eskimos,Aleuts,orNativeHawaiians)
5=SubcontinentAsianAmerican(personswhoseOriginsarefromIndia,Pakistan,
Bangladesh,Bhutan,theMaldivesIslands,NepalorSriLanka)
6=(OTHER SPECIFY)
98=(DON'TKNOW)
99=(REFUSED)
E3.OTHER SPECIFY
1=VERBATIM
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE25

F1.Dun&Bradstreetindicatesthatyourcompanyhasabout[number]employeesworkingout
ofjustyourlocation.Isthatanaccurateestimateofyourcompanysaverageemployeesfrom
2009through2011?
(NOTETOINTERVIEWERINCLUDESEMPLOYEESWHOWORKATTHATLOCATIONAND
THOSEWHOWORKFROMTHATLOCATION)
1=YesSKIPTOF3
2=No
98=(DON'TKNOW)SKIPTOF3
99=(REFUSED)SKIPTOF3
F2.Abouthowmanyemployeesdidyouhaveworkingoutofjustyourlocation,onaverage,
from2009through2011?
(RECORDNUMBEROFEMPLOYEES)
1=NUMERIC(1999999999)
F3.Dun&Bradstreetliststheaverageannualgrossrevenueofyourcompany,justconsidering
yourlocation,tobe[dollaramount].Isthatanaccurateestimateforyourcompanysaverage
annualgrossrevenuefrom2009through2011?
1=YesSKIPTOF5
2=No
98=(DON'TKNOW)SKIPTOF5
99=(REFUSED)SKIPTOF5
F4.Roughly,whatwastheaverageannualgrossrevenueofyourcompany,justconsidering
yourlocation,from2009through2011?Wouldyousay...(READLIST)
1=Lessthan$1Million 6=$16.6Million$18.5Million
2=$1Million$4.5Million 7=$18.6Million$22.4Million
3=$4.6Million$7Million 8=$22.5Millionormore
4=$7.1Million$12Million 98=(DON'TKNOW)
5=$12.1Million$16.5Million 99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE26

F5.Abouthowmanyemployeesdidyouhave,onaverage,forallofyourlocationsfrom2009
through2011?
1=(ENTERRESPONSE)
98=(DON'TKNOW)
99=(REFUSED)
F5.RECORDNUMBEROFEMPLOYEES
1=VERBATIM
F6.Roughly,whatwastheaverageannualgrossrevenueofyourcompany,forallofyour
locationsfrom2009through2011?Wouldyousay...(READLIST)
1=Lessthan$1Million 6=$16.6Million$18.5Million
2=$1Million$4.5Million 7=$18.6Million$22.4Million
3=$4.6Million$7Million 8=$22.5Millionormore
4=$7.1Million$12Million 98=(DON'TKNOW)
5=$12.1Million$16.5Million 99=(REFUSED)
Finally,we'reinterestedinwhetheryourcompanyhasexperiencedbarriersordifficulties
associatedwithstartingorexpandingabusinessinyourindustryorwithobtainingwork.
ThinkaboutyourexperiencesinCaliforniawithinthepastfiveyearsasweaskyouthese
questions.
G1a.Hasyourcompanyexperiencedanydifficultiesinobtaininglinesofcreditorloans?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1b.Hasyourcompanyobtainedortriedtoobtainabondforaproject?
1=Yes
2=No SKIPTOG1d
98=(Dontknow) SKIPTOG1d
99=(Doesnotapply)SKIPTOG1d
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE27

G1c.Hasyourcompanyexperiencedanydifficultiesobtainingbondsneededforaproject?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1d.Haveanyinsurancerequirementsonprojectspresentedabarriertobidding?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1e.Hasthesizeofprojectspresentedabarriertobidding?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1f.Hasyourcompanyexperiencedanydifficultieslearningaboutbidopportunitieswith
Caltrans?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1g.Hasyourcompanyexperiencedanydifficultieslearningaboutbidopportunitieswith
otherstateorlocalgovernmentagenciesinCalifornia?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE28

G1h.Hasyourcompanyexperiencedanydifficultieswithlearningaboutbidopportunitiesin
theprivatesectorinCalifornia?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1i.Hasyourcompanyexperiencedanydifficultieslearningaboutsubcontracting
opportunitiesinCalifornia?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G1j.Hasyourcompanyexperiencedanydifficultiesreceivingpaymentinatimelymanner?
1=Yes
2=No
98=(Dontknow)
99=(Doesnotapply)
G2.Finally,we'reaskingforgeneralinsightsonstartingandexpandingabusinessinyour
industryorwinningworkinCalifornia.Doyouhaveanythoughtstoofferonthesetopics?
1=VERBATIM(PROBEFORCOMPLETETHOUGHTS)
97=(NOTHING/NONE/NOCOMMENTS)
98=(DON'TKNOW)
99=(REFUSED)
G3.Wouldyoubewillingtoparticipateinafollowupinterviewaboutanyoftheseissues?
1=Yes
2=No
98=(DON'TKNOW)
99=(REFUSED)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE29

H1.Justafewlastquestions.Whatisyourname?
(RECORDFULLNAME)
1=VERBATIM
H2.Whatisyourpositionat[firmname/newfirmname]?
1=Receptionist
2=Owner
3=Manager
4=CFO
5=CEO
6=AssistanttoOwner/CEO
7=Salesmanager
8=Officemanager
9=President
9=(OTHER SPECIFY)
99=(REFUSED)
H2.OTHER SPECIFY
1=VERBATIM
H3.ForpurposesofreceivinginformationfromCaltrans,isyourmailingaddress[firm
address]:
1=YesSKIPTOH5
2=No
98=(DON'TKNOW)
99=(REFUSED)
H4.Whatmailingaddressshouldtheyusetogetanymaterialstoyou?
1=VERBATIM
H5.WhatfaxnumbercouldCaltransusetofaxanymaterialstoyou?
1=NUMERIC(10000000009999999999)
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE30

H6.WhatemailaddresscouldCaltransusetogetanymaterialstoyou?
1=ENTEREMAIL
97=(NOEMAILADDRESS)
98=(DON'TKNOW)
99=(REFUSED)
H6.(RECORDEMAILADDRESS)(VERIFYADDRESSLETTERBYLETTER:EXAMPLE:'John@CRI
RESEARCH.COM'SHOULDBEVERIFIEDAS:JOHNatCRIhyphenRESEARCHdotcom)
1=VERBATIM
Thankyouverymuchforyourparticipation.Ifyouhaveanyquestions,pleasecontactRobert
PadillaatCaltrans.Hisphonenumberis(916)3248384.Ifyouwouldliketocontacthimvia
email,hisemailaddressisRobert.padilla@dot.ca.gov.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXC,PAGE31

APPENDIXD.
GeneralApproachtoUtilizationAnalysis
Theutilizationanalysisexaminedthepercentageofcontractdollarsthatwenttominorityand
womenownedfirmsontransportationconstructionandengineeringcontractsthatCaltrans
awardedbetweenJanuary1,2007andDecember31,2010.ThestudyteamcountedDBEcertified
aswellasnonDBEcertifiedminorityandwomenownedbusinessesincalculatingMBE/WBE
utilizationandalsocalculatedtheutilizationofnonHispanicwhitemaleownedbusinesses
(majorityownedbusinesses).Therefore,BBCsoughtsourcesofCaltranscontractdatathat
consistentlyincludedinformationaboutprimecontractorsandsubcontractors,regardlessof
ownershipstatusorDBEcertificationstatus.
1
Thestudyteamanalyzedbothfederallyfundedand
statefundedconstructionandengineeringcontractsaspartoftheutilizationanalysis.
AppendixDdescribesthestudyteamsutilizationdatacollectionandreviewprocessesinfour
parts:
A. CollectionofCaltranscontractdata;
B. Collectionofvendorinformation;
C. CollectionofCaltransbidandproposaldata;and
D. Caltransreview.
A.CollectionofCaltransContractData
ThestudyteamcollectedcontractdatarelatedtoCaltransconstructionandengineeringcontracts.
Thestudyteamalsocollecteddatarelatedtocontractsthatlocalagenciesawardedthroughthe
LocalAssistanceProgram.
Constructioncontracts.BBCcollecteddataonconstructioncontractsthatCaltransawarded
duringtheperiodofJanuary1,2007throughDecember31,2010.BBCcollectedthesedatafrom
thefollowingsources:
PrimecontractdatafromtheOfficeEngineer(OE);
SubcontractingRequestforms(FormCEM1201);and
Substitutionofsubcontractorinformation(alsoonFormCEM1201).
1
CaltransDBEutilizationreportsalonewerenotsufficientforthisanalysisasinformationaboutnonDBEsubcontractorsare
notrecordedinthosereports.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE1

Afterextensivereviewoftheseandotherpotentialdatasources,thestudyteamdeterminedthat
theCEM1201SubcontractingRequest(CEM1201)formsprovidedthemostreliableand
comprehensiveinformationaboutCaltransconstructioncontracts.ACEM1201formincludes
informationabouttheprimecontractorandallofthesubcontractorstheprimecontractplansto
usethatwillreceivepaymentsinexcessofonehalfofonepercentofthetotalcontractamount.
Theprimecontractoralsolistsestimatesofthedollaramountbudgetedorcommittedforeach
subcontractor.CaltransusesCEM1201toensurethatprimecontractorsperformatleast50
percentofthework,asstatelawrequires.
2
BecauseallsubcontractorsneedtobelistedonCEM
1201,regardlessofDBEstatus,thisformissuitableforidentifyingthedollarvalueofprime
contractsandrelatedsubcontractsattimeofaward.
CaltransdoesnotmaintainadatabaseofinformationfromCEM1201s.Althoughsome
informationispresentatCaltransheadquarters,CEM1201saretypicallykeptinhardcopyform
inthecontractfilesforeachconstructioncontract.ThesefilesaretypicallyfoundateachCaltrans
districtoffice.Certaindistrictsthatserveasregionalheadquarterssometimesconsolidate
informationfromotherdistrictsintheirregion.
TheBBCstudyteamandCaltransstaffwenttoCaltransdistrictofficestoattempttolocateCEM
1201sforeachconstructioncontractthatCaltransawardedbetweenJanuary1,2007and
December31,2010.OncethestudyteamlocatedaCEM1201foracontract,itmadephotocopies
oranelectronicscanoftheform.Caltransstaffprovidedamasterlistofconstructioncontractsto
aidthestudyteaminlocatingtheappropriatecontractfilesandCEM1201s.Caltransstaff
assistedinlocatingcontractfilesasneeded.ThestudyteamcollectedallavailableCEM1201sand,
asnecessary,workedwithdistrictstafftoattempttolocateCEM1201sthatwerenotfoundin
districtoffices.
Accordingtostatelaw,anyprimecontractorwishingtosubstituteasubcontractorormake
substantialchangestotheworkthatthesubcontractorwillperformmustobtainCaltrans
approvalpriortomakingsuchchanges.Iftheprimecontractorwishestosubstitutea
subcontractor,theprimecontractormustsubmitaseparateCEM1201forthenewsubcontractor
inordertocomplywithstatelaw.ThestudyteamcollectedCEM1201spertainingtosubstitution
ofsubcontractorsandchangestosubcontractorworkatthesametimeandinthesamefashionas
otherCEM1201s.
FollowingthecollectionofCEM1201sfromalldistricts,thestudyteamenteredinformation
directlyfromtheseformsintoanelectronicdatabase.Thestudyteamrecordedcontractnumber,
fundingsource,andlocationofwork,aswellaseachprimecontractorandsubcontractorsname,
address,DBEstatus,andcontractamount.
2
CertainspecialtysubcontractingisnotcountedagainstthesubcontractinglimitbutisstillreportedonForm1201s.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE2

Engineeringcontracts.Thestudyteamalsocollectedinformationonprimeconsultantsand
subconsultantsthatperformedengineeringcontractsthatCaltransawardedduringthestudy
period.TheCaltransDivisionofProcurementandContracts(DPAC)maintainsprimecontract
dataonengineeringcontractsthatCaltransawardedduringthestudyperiod,butdoesnot
maintaincompleteinformationonrelatedsubcontracts.Asaresult,thestudyteamusedDPAC
dataonlyasamasterlistofengineeringcontractsthatCaltransawardedduringthestudyperiod.
Caltransdoesnotdocumentinformationforbothminorityandwomenownedsubconsultants
andmajorityownedsubconsultantsworkingonitsengineeringcontractswithinanysingleform
comparabletotheCEM1201usedfordatacollectiononconstructioncontracts.Somedistricts
maintaininformationonprimeconsultantsandsubconsultantsusingadatabaseorspreadsheet
containingdatafrominvoicesthatprimeconsultantssubmittodistrictcontractadministrators.
Becausethesourcedatacomefrominvoices,theinformationpertainstoprimeconsultantsandto
bothminorityandwomenownedsubconsultantsandmajorityownedsubconsultants.Whereas
somedistrictsmaintainthosedataelectronically,otherdistrictsmaintainthosedatainhardcopy
form.Becauseofthedifferencesinhowdistrictsmaintainsubcontractdata,thestudyteam
workedwitheachdistrictofficetocollectthatinformationinthemostappropriatemanner.
Hardcopydatacollection.Foreachdistrictthatdidnotmaintainsubcontractdataforengineering
contractsinelectronicformat(orthatdidnotmakeelectronicdataavailable),thestudyteam
collectedpaymentinformationaboutprimecontractsandrelatedsubcontractsfromavailable
taskorderinvoices.Thestudyteamconductedthisdatacollectionatdistrictofficesduringspring
2012.Thedatacollectioneffortinvolvedenteringpaymentinformationaboutprimeconsultants
andsubconsultantsfromeverytaskorderinvoicethatprimeconsultantssubmittedforeach
contract.
Electronicdatacollection.Severaldistrictsmaintainprimecontractandsubcontractdatafor
engineeringcontractsinspreadsheetsordatabasesthattrackfirmspecificpaymentinformation
thattheyobtainfromtaskorderinvoices.Theorganizationandtheformatofthesespreadsheets
varyslightlyacrossdistricts,butBBCdeterminedthatthedatarequiredfortheutilization
analysiswereavailablefornearlyallcontractsfromthesedistricts.
Centralizedadministration.EngineeringcontractsthatdistrictsintheNorthandCentralregions
awardedduringthestudyperiodareadministeredbycentralizedregionaloffices.Asaresult,for
engineeringcontractsfromtheNorthandCentralregionsitwasnotpossibleforthestudyteamto
determinetheexactdistrictsfromwhicheachcontractoriginated.
LocalAssistanceProgramcontracts.Caltransusesaportionofitsfundstosupportlocal
governmenttransportationprojects.Cities,counties,andotherlocalagenciesawardconstruction
andengineeringcontractsandthosecontractingdollarsarereimbursedbyCaltransusingfederal
andstatefunds.WhenCaltransusesfederalfunds,theFederalDBEProgramrequires
subrecipientstocomplywithCaltransUSDOTapprovedimplementationoftheprogram.
Caltransdoesnotcurrentlymaintaincomprehensivedataonthefederallyfundedconstruction
andengineeringcontractsthatlocalagenciesawardaspartoftheLocalAssistanceProgram.In
addition,firmsavailableforthesecontractsmaynotbeknowntoCaltrans,becauselocalagencies
awardandadministerthosecontracts.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE3

Thestudyteamgeneratedasampleofconstructionandengineeringcontractsthatlocalagencies
awardedthroughtheLocalAssistanceProgramduringthestudyperiod.Thestudyteamworked
withCaltranstocontacteachlocalagencydirectlyandrequestdataaboutthosecontractsand
relatedsubcontractsthroughamailsurveyeffort.
Samplingmethodology.UsinganelectronicdatabaseofgrantsthatCaltransawardedtolocal
agenciesfortransportationconstructionandengineeringworkduringthestudyperiod,theBBC
studyteamdrewasampleofLocalAssistanceProgramcontractsforanalysis.Foreachgrant,the
databaselistslistedtheagency,projectinformation,projectspecificphasesthatweresupported
throughthegrant(i.e.,design,construction,orrightofway),andthesourceofthefunds(federal
orstate).Forsomeofthegrants,thedatabasealsoprovideddollaramounts,projectdates,award
dates,andprojectlocations.
Basedoninformationfromthedatabase,BBCexcludedfromthesampleprojectswithstartdates
priortothestudyperiodandgrantsthatdidnotspecifyfinancialsupportforaconstructionor
designphase.Finally,thestudyteamsplittheprojectsintotwosamplestratadependingon
whetherthetotaldollaramountsofprojectspecificgrantswere$1millionormoreorwereless
than$1million.Thesampleincludedallprojectswherethegrantswere$1millionormoreanda
randomselectionofonethirdofprojectswherethegrantswerelessthan$1million.
FigureD1presentsthenumberofprojectphasesineachstrataandthenumberofthesethat
wereincludedinthesample.
FigureD1.
Samplingandsample
weightsforlocal
assistanceprojects
Source:
Total
Phases
Sampled
Phases
Responses
Received Weight
Contractsformorethan$1million
Contractsforlessthan$1million
809
2,576
809
936
548
655
1.48
3.93
BBCResearchandConsulting.
Datacollection.ThestudyteamandCaltransLocalAssistanceProgramstaffdevelopedaletterof
introductionandanindividualizeddatarequestformfordeliverytoeveryagencythatawarded
anyofthecontractsthatwereincludedinthesampleofLocalAssistanceProgramcontracts.The
datarequestformaskedlocalagencystafftoindicateifthelocalagencyinfactcontractedout
constructionandengineeringservicesfortheproject,andifso,theawardamountoractual
paymentamountstoallprimecontractorsandsubcontractorsinvolvedintherelevantproject
phases.Theformalsoaskedstafftoprovidecontactinformationforallprimecontractorsand
subcontractorsinvolvedwiththeproject.Thestudyteammanuallyenteredinformationfromthe
requestformsintoadatabaseofLocalAssistanceProgramcontractdata.
WithfollowupandassistancefromCaltrans,BBCreceivedvalidinformationfor1,203ofthe1745
contractsthatthestudyteamincludedintheoriginalsample.Thenumberofcompleteresponses
foreachstratumispresentedinFigureD1.TheinformationthatBBCreceivedaboutLocal
AssistanceProgramcontractsrepresentedapproximately55percentofthetotaldollarsthatlocal
agenciesawardedthroughtheprogramduringthestudyperiod.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE4

Sampleweights.FigureD1presentsthesampleweightsthatthestudyteamappliedtothedata,
basedonthesamplestratumfromwhichthestudyteamdreweachLocalAssistanceProgram
contract.Forexample,dollarinformationforacontractthatalocalagencyawardedfor$3million
receivedaweightof1.48,whereasdollarinformationforacontractthatalocalagencyawarded
for$300,000receivedaweightof3.93.
DMTcontracts.ThestudyteamalsoworkedwithCaltransstafftoidentifytransportation
constructionandengineeringcontractsthatDMTadministered.DMTstaffprovidedspreadsheets
containinginformationonprimecontractandrelatedsubcontractsthatDMTawardedduringthe
studyperiod.
DTPcontracts.DTPprovidesgrantstolocalagenciesforavarietyofpurposes,butprimarilyfor
staffingandoperations.AfewagenciesuseDTPgrantstocontractfortransportationconstruction
orengineeringservices.DTPstaffidentifiedthelocalagenciesthatusedthelargestamountofDTP
grantstocontractforconstructionandengineeringservicesduringthestudyperiod.Thestudy
teamandDTPstaffparticipatedinconferencecallswiththestaffofeachoftheseagenciesand
askedthemtoprovideinformationonprimecontractors,subcontractors,primecontractamounts,
andsubcontractamountsforcontractsthattheyawardedusingDTPgrantfunding.Someofthe
agencieswerenotabletoprovidecompletesubcontractorinformation.Thestudyteamonly
includedinitsanalysesinformationoncontractsforwhichagencystaffwereabletoprovide
completeinformationonallutilizedprimecontractorsandsubcontractors.
B.CollectionofVendorInformation
Caltransandlocalagenciesprovidedcontactandotherinformationonfirmsutilizedasprime
contractorsandsubcontractorsontransportationconstructionandengineeringcontractsduring
thestudyperiod.ThesedatawereincludedintheelectronicdataprovidedbyCaltransaswellas
thehardcopydatathatCaltransandlocalagenciescollectedduringthestudyperiod.Thestudy
teamalsousedinformationfromtheCUCPtoidentifyDBEcertifiedfirms.TheCUCPincludesdata
ontherace/ethnicityandgenderoftheownersofDBEcertifiedbusinesses.DBEutilization
reportedinthetablesinAppendixKandthegraphsinChapters5and7wascalculatedusing
CUCPcertificationdataasofJuly6,2012.
Caltransandlocalagenciesprovidedthefollowinginformationaboututilizedfirms:
Firmname;
Addressandphonenumber;and
DBEcertificationstatus.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE5

BBCobtainedadditionalinformationaboututilizedfirmsfrombusinessliststhatthestudyteam
purchasedfromD&Bandfromtelephoneinterviewsthatthestudyteamconductedwithprime
contractorsandsubcontractors.BBCobtainedthefollowingadditionalinformationaboututilized
firms:
Primarylineofwork;
Firmsize;
Yearinwhichfirmwasestablished;and
Additionalcontactinformation.
BBCreliedonseveralsourcesofinformationtodeterminewhetherfirmswereownedby
minoritiesorwomenandwhetherMBE/WBEswereDBEcertified,including:
Telephoneinterviewswithfirmownersandmanagers;
CUCPdata;
Caltransvendordata;
Caltransstaffreview;and
InformationfromD&Bandothersources.
Forthepurposesofthestudy,BBCreliedondefinitionsusedintheFederalDBEProgramto
specifyminoritygroupsthatarepresumedtobedisadvantaged:
AfricanAmerican;
AsianPacificAmerican;
SubcontinentAsianAmerican;
HispanicAmerican;and
NativeAmerican.
C.CollectionofCaltransBidandProposalData
BBCconductedacasestudyanalysisofbidsandproposalsforasampleoftransportation
constructionandengineeringcontractsthatCaltransawardedduringthestudyperiod.Caltrans
providedbid,proposal,andotherrelatedinformationtotheBBCstudyteam.Fordetailsaboutthe
casestudyanalysis,seeChapter7.
Constructioncontracts.Caltransmaintainselectronicbidtabulationsfortheconstruction
contractsthatitawards.BBCanalyzedbiddataforasampleof200contractsthatCaltrans
awardedduringthestudyperiodforwhichelectronicdatawereavailable.
Engineeringcontracts.Thestudyteamcollectedproposalinformationforasampleof60
engineeringcontractsthatCaltransawardedduringthestudyperiodandanalyzedthat
informationaspartofthecasestudyanalysis.TheinformationthatBBCcollectedabout
engineeringproposalsrepresentedallavailableproposalinformationthatCaltransmaintainedon
engineeringcontractsduringthestudyperiod.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE6

D.CaltransReview
CaltransreviewedBBCsutilizationdataduringseveralstagesofthestudyprocess.TheBBCstudy
teammetwithCaltransstafftoreviewthedatacollectionprocess,informationthatthestudyteam
gathered,andsummaryresults.Caltransstaffalsoreviewedcontractandfirmlevelinformation.
Inaddition,thestudyteamworkedwithCaltransdistrictstafftoreviewcontractinformation.BBC
incorporatedfeedbackfromCaltransstaffinthefinalcontractandfirmdatausedinthedisparity
study.
Insum,thedisparitystudycompiledandanalyzedthemostcomprehensivesetofdatathatwere
availableonprimecontractsandsubcontractsthatCaltransawardedduringthestudyperiod.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXD,PAGE7

APPENDIXE.
EntryandAdvancementintheCalifornia
ConstructionandEngineeringIndustries
FederalcourtshavefoundthatCongressspentdecadescompilingevidenceofrace
discriminationingovernmenthighwaycontracting,ofbarrierstotheformationofminority
ownedconstructionbusinesses,andofbarrierstoentry.
1
Congressfoundthatdiscrimination
hadimpededtheformationofqualifiedminorityownedbusinesses.
Inthe2007Caltransdisparitystudy,BBCexaminedwhethersomeofthebarrierstobusiness
formationthatCongressfoundforMBE/WBEsalsoappeartooccurinCalifornia.Onepotential
sourceofbarrierstoformationisbarriersassociatedwithentryandadvancementinthe
constructionandengineeringindustries.AppendixEexaminesrecentdataoneducation,
employment,andworkplaceadvancementthatmayultimatelyinfluencebusinessformationin
theCaliforniaconstructionandengineeringindustries.
2,3
AppendixEexaminesentryandadvancementofdifferentrace/ethnicandgendergroupsinthe
Californiaconstructionandengineeringindustries.Severalotherreportappendicesanalyze
otheraspectsoflocalmarketplaceconditions.AppendixFexploresbusinessownershipand
AppendixHconsidersthesuccessofbusinesses.Relatedtobothofthosetopics,AppendixG
presentsanexaminationofaccesstocapital.Together,thoseappendicespresentquantitative
informationconcerningmarketplaceconditionsintheCaliforniatransportationcontracting
industry,includingtheconstructionandengineeringindustries.AppendixIpresentsthedata
sourcesthatthestudyteamusedinthoseappendices.
Introduction
BBCexaminedwhethertherewerebarrierstotheformationofminorityandwomenowned
businessesinCalifornia.Businessownershipoftenresultsfromindividualsenteringanindustry
asanemployeeandthenadvancingwithinthatindustry.Withintheentryandadvancement
process,theremaybesomebarriersthatlimitopportunitiesforminoritiesandwomen.
AppendixEuses1980and2000Censusdataand20072009ACSdata
4
toanalyzeeducation,
employment,andworkplaceadvancementallfactorsthatmayinfluencewhetherindividuals
1
SherbrookeTurf,Inc.,345F.3dat970,(citingAdarandConstructors,Inc.,228F.3dat116776);WesternStatesPavingCo.v.
WashingtonStateDOT,407F.3d983(9thCir.2005)at992.
2
NotethatthisAppendixalsoincludesmaterialsfromAppendixFofthe2007Studyforwhichmorerecentdatawerenot
available.
3
InAppendixFandotherappendicesthatpresentinformationaboutlocalmarketplaceconditions,informationfor
engineeringreferstoarchitectural,engineeringandrelatedservices.Eachreferencetoengineeringworkpertainstothose
typesofservices.Inthe1980and2000Censusindustrialclassificationsystem,Architectural,engineeringandrelated
serviceswascodedas882and729.Inthe20072009ACS,thesameindustrywascodedas7290.
4
Itshouldbenotedthatthe20072009ACSdatawerecollectedduringtheeconomicrecessionwhichbeganinlate2007.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE1

formconstructionorengineeringbusinesses.FigureE1presentsamodelofentryand
advancementintheconstructionandengineeringindustries).
BBCseparatelystudiedbarrierstoentryforconstructionandforengineering,asentrance
requirementsandopportunitiesforadvancementdifferforthoseindustries.
FigureE1.
Modelforstudyingentry
intotheconstructionand
engineeringindustries
Source:
BBCResearch&Consulting.
Unions
Highschool
education
Apprenticeships
Employmentin
industry
Collegeeducation
Opportunitiesfor
advancement
Entrepreneurship
opportunities
Accesstocapital
andother
businessinputs
Operating
businesses
Overallrepresentationofminoritiesamongworkersandbusinessownersin
California.Asastartingpoint,thestudyteamexaminedhowbusinessownersinCaliforniaand
theUnitedStatesdifferedfromtheentirelaborforcewithrespecttotherepresentationofracial
andethnicminorities.Basedon2000and20072009data,FigureE2showsdemographicsof
thelaborforce,businessownersinallCaliforniaindustries,andbusinessownersinthe
Californiaconstructionandengineeringindustries.ResultsforCaliforniain20072009indicate
thefollowing:
AfricanAmericansaccountedforabout6percentofworkers,4percentofallbusiness
owners,and2percentofbusinessownersinconstructionandengineering;
HispanicAmericansaccountedfor34percentofworkers,25percentofallbusinessowners,
and30percentofbusinessownersinconstructionandengineering;
AsianPacificAmericansaccountedforabout12percentofallworkersand11percentof
businessownersbutonly7percentofconstructionandengineeringbusinessowners;
NativeAmericansaccountedforapproximately1percentofallworkers,businessowners,
andbusinessownersinconstructionandengineering;
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE2

SubcontinentAsianAmericansandotherminoritygroupscombinedaccountedforabout2
percentofworkersandbusinessownersinallindustriesand1percentofbusinessowners
inconstructionandengineering;and
NonHispanicwhitesaccountedforabout45percentofCaliforniaworkersand58percent
ofallCaliforniabusinessowners.NonHispanicwhitesaccountedfor59percentof
constructionandengineeringbusinessowners(59%).
PatternsthatthestudyteamobservedinCaliforniarelatedtotheracial/ethniccompositionof
workersandbusinessownersweresimilartothoseobservedintheUnitedStates,withthe
followingexceptions:
HispanicandAsianAmericansaccountedforalargershareoftheoverallworkforceandof
businessownersinCaliforniathanintheUnitedStates;and
AfricanAmericansmadeupasmallershareoftheoverallworkforceandofbusinessowners
inCaliforniathanintheUnitedStates.
RepresentationofwomenamongworkersandbusinessownersinCalifornia.Figure
E2alsopresentsthepercentageofworkersandbusinessownersthatweremadeupofwomen
in20072009,bothinCaliforniaandtheUnitedStates.In20072009,womenaccountedfor
about45percentoftheCalifornialaborforceand37percentofallbusinessowners.However,
womenonlyaccountedfor7percentofbusinessownersintheconstructionandengineering
industriesduringthoseyears.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE3

#

#

#

#

#

#

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8
9

#

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8
9

=


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= = =



FigureE2.
Demographicdistributionoftheworkforceandbusinessowners,2000and20072009
California
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
6.3 % 6.1 %
11.1 12.3
1.1 1.5
27.6 34.0
1.2 1.0
0.9 0.4
48.2 % 55.2 %
51.8 44.8
100.0 % 100.0 %
45.1 % 45.0 %
54.9 55.0
100.0 % 100.0 %
Workforceinallindustries
2000 200709
(n 788,333) (n=519,307)
3.2 % ** 3.5 % **
9.9 ** 10.7 **
1.1 1.5
17.9 ** 25.1 **
1.0 0.9 **
1.2 ** 0.4
34.4 % 42.1 %
65.6 ** 57.9 **
100.0 % 100.0 %
36.1 % ** 36.7 % **
63.9 ** 63.3 **
100.0 % 100.0 %
Businessownersin
allindustries
2000 200709
(n=86,080) (n=63,241)
2.2 % ** 2.2 % **
5.5 ** 6.5 **
0.3 ** 0.3 **
18.3 ** 30.5 **
1.6 1.2
1.2 0.4
29.2 % 41.0 %
70.8 ** 59.0 **
100.0 % 100.0 %
7.5 % ** 6.9 % **
92.5 ** 93.1 **
100.0 % 100.0 %
Businessownersin
(n 9,694)
constructionandengineering
2000 200709
(n=11,664)
UnitedStates
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
10.9 % 11.7 %
3.4 4.0
0.7 1.0
10.7 14.3
1.2 1.1
0.4 0.2
27.3 % 32.3 %
72.7 67.7
100.0 % 100.0 %
46.5 % 46.7 %
53.5 53.3
100.0 % 100.0 %
(n 6,832,970) (n=1,513,063)
Workforceinallindustries
2000 200709
4.9 % ** 5.7 % **
3.3 4.1 **
0.7 1.0
7.3 ** 12.0 **
1.0 ** 0.9 **
0.5 0.2
17.7 % 23.9 %
82.3 ** 76.1 **
100.0 % 100.0 %
33.6 % ** 34.2 % **
66.4 ** 65.8 **
100.0 % 100.0 %
Businessownersin
200709
(n=676,804) (n 159,643)
allindustries
2000
4.0 % ** 4.3 % **
1.3 ** 1.6 **
0.2 ** 0.2 **
7.7 ** 14.9 **
1.3 1.1
0.5 0.2
14.9 % 22.3 %
85.1 ** 77.6 **
100.0 % 99.9 %
7.9 % ** 7.4 % **
92.1 ** 92.6 **
100.0 % 100.0 %
2000
(n 119,227) (n=29,627)
constructionandengineering
200709
Businessownersin
Note: **Denotesthatthedifferenceinproportionsbetweenallworkersandbusinessowners(orbusinessownersinstudyindustries)forthe
givenrace/ethnicity/gendergroupisstatisticallysignificantatthe95%confidencelevel.
Source: BBCResearch&Consultingfrom2000U.S.Census5%sampleand20072009ACSPublicUseMicrosampledata.Therawdataextracts
wereobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
ConstructionIndustry
BBCfirstexaminedtheconstructionindustryandhoweducation,training,employment,and
advancementmayaffectthenumberofbusinessesthatindividualsofdifferentraces/ethnicities
andgendersownedinCaliforniain2000and20072009.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE4

Education.Formaleducationbeyondhighschoolisnotaprerequisiteformostconstruction
jobs.Forthatreason,theconstructionindustryoftenattractsindividualswhohavelowerlevels
ofeducationalattainment.MostconstructionindustryemployeesinCaliforniadonothavea
fouryearcollegedegree.Basedonthe2000Census,26percentofworkersintheCalifornia
constructionindustrywerehighschoolgraduateswithnopostsecondaryeducationand36
percenthadnotfinishedhighschool.Only7percentofthoseworkingintheCalifornia
constructionindustryhadafouryearcollegedegreeorhigher,comparedtonearly30percentof
allworkers.
Race/ethnicity.HispanicAmericansrepresentedanespeciallylargepoolofCaliforniaworkers
withnopostsecondaryeducation.In2000,only10percentofallHispanicAmericanworkers25
andolderwhoworkedinCaliforniaheldatleastafouryeardegree.Thatfigureroseto12
percentin20072009,butwasstillfarbelownonHispanicwhitesworkingintheregion(45%).
ThepercentageofAfricanAmerican(28%)andNativeAmerican(26%)workersinCalifornia
withafouryearcollegedegreewasalsosubstantiallylowerthanthatofnonHispanicwhitesin
20072009.
Basedoneducationalrequirementsofentryleveljobsandthelimitededucationbeyondhigh
schoolformanyAfricanAmericans,NativeAmericans,andHispanicAmericansinCalifornia,one
wouldexpectarelativelyhighrepresentationofthosegroupsintheCaliforniaconstruction
industry,especiallyinentrylevelpositions.
IncontrasttoAfrican,Hispanic,andNativeAmericans,amajorityofAsianPacificAmerican
workers25andolderinCalifornia(51%)andSubcontinentAsianAmericanworkers25and
olderinCalifornia(74%)hadfouryearcollegedegreesin20072009.Giventhehighlevelsof
educationforAsianPacificandSubcontinentAsianAmericansinCalifornia,therepresentation
ofthosegroupsintheCaliforniaconstructionindustrymightbelowrelativetononHispanic
whites.
Females.InCalifornia,femaleworkersage25oroverhavemoreeducation,onaverage,than
men.Basedon20072009data,36percentoffemaleworkersage25andoverhadatleastafour
yeardegree,comparedto33percentofmalesinCalifornia.
Apprenticeshipandtraining.Trainingintheconstructionindustryislargelyonthejoband
throughtradeschoolsandapprenticeshipprograms.Entryleveljobsforworkersoutofhigh
schoolareoftenforlaborers,helpers,orapprentices.Moreskilledpositionsintheconstruction
industrymayrequireadditionaltrainingthroughatechnicalortradeschoolorthroughan
apprenticeshiporotheremployerprovidedtrainingprogram.Apprenticeshipprogramscanbe
developedbyemployers,tradeassociations,tradeunions,andothergroups.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE5

Workerscanenterapprenticeshipprogramsfromhighschoolortradeschool.Apprenticeships
havetraditionallybeenthreetofiveyearprogramsthatcombineonthejobtrainingwith
classroominstruction.
5
Opportunitiesforthoseprogramsacrossrace/ethnicityarediscussed
laterinAppendixE.
Employment.Witheducationalattainmentforminoritiesandwomenascontext,thestudy
teamexaminedemploymentintheconstructionindustryinCalifornia.FigureE3presentsdata
from1980,2000,and20072009tocomparethedemographiccompositionoftheconstruction
industrywiththetotalworkforceinCaliforniaandintheUnitedStates.
Race/ethnicity.Basedon20072009ACSdata,57percentofpeopleworkingintheCalifornia
constructionindustrywereminority,upfrom45percentin2000.Almostalltheincreasein
minorityconstructionworkersbetween2000and20072009wasduetogrowthinthenumber
ofHispanicAmericanconstructionworkers.OfthepeopleworkinginconstructioninCalifornia
in20072009:
48percentwereHispanicAmericans;
3percentwereAfricanAmericans;
5percentwereAsianPacificAmericans;
1percentwereNativeAmericans;and
Lessthan1percentwereSubcontinentAsianAmericans.
InCalifornia,HispanicAmericansmadeupamuchgreatershareofworkersinconstructionthan
intheeconomyasawhole,representingnearly50percentofconstructionworkerscompared
with34percentofworkersinallindustries.Incontrast,AfricanAmericans,AsianPacific
Americans,andSubcontinentAsianAmericansworkinginCaliforniawerelesslikelytoworkin
constructionthaninotherindustries.
ThepercentageofCaliforniaconstructionworkerswhowereAfricanAmericandeclined
from2000to20072009.AverageeducationalattainmentofAfricanAmericansis
consistentwithrequirementsforconstructionjobs,soeducationdoesnotexplainthe
relativelylownumberofAfricanAmericanworkersintheconstructionindustry.Several
studiesthroughouttheUnitedStateshavearguedthatracediscriminationbyconstruction
unionshashelddownemploymentofAfricanAmericansinconstructiontrades.
6
Someof
theevidenceforandagainstthatpositionisdiscussedlaterinthissection.
AsianPacificAmericanswere5percentoftheconstructionworkforceand12percentofall
workersinCaliforniain20072009.ThefactthatAsianPacificAmericansweremorelikely
thanothergroupstogotocollegein20072009mayexplainpartofthatdifference.
5
BureauofLaborStatistics,U.S.DepartmentofLabor.200607.Construction.CareerGuidetoIndustries.
http://www.bls.gov/oco/cg/cgs003.htm(accessedFebruary15,2007).
6
Waldinger,RogerandThomasBailey.1991.TheContinuingSignificanceofRace:RacialConflictandRacialDiscriminationin
Construction.Politics&Society,19(3).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE6

UnderrepresentationofSubcontinentAsianAmericansintheconstructionworkforceis
evidentinboth2000and20072009inCalifornia.
7
Relativelyhigheducationalachievement
forSubcontinentAsianAmericansmayexplainpartofthatdifference.
ThenumberofNativeAmericansandnonHispanicwhitesworkingintheCalifornia
constructionindustryin20072009wasaboutwhatonemightanticipategiventheir
representationintheoverallworkforce.
Therefore,inCalifornia,thelowrepresentationofAfricanAmericans,AsianPacificAmericans,
andSubcontinentAsianAmericanscannotbeentirelyexplainedbythehighrepresentationof
HispanicAmericans.
Gender.Therewerealsolargedifferencesbetweenthepercentageofallworkerswhowere
womenandtherepresentationofwomenintheCaliforniaconstructionindustryin20072009.
Duringthoseyears,womenrepresented45percentofworkersinallCaliforniaindustriesbut
only9percentofCaliforniaconstructionworkers.ThatdifferencewassimilarfortheUnited
Statesasawhole.Theshareofconstructionworkerswhowerewomendeclinedbetween2000
and20072009downtolevelsobservedin1980.
7
NotethatCensusdefinitionsofraceandethnicityhavechangedovertime,whichaffectscomparabilityofstatisticsfromone
censusyeartothenext.AppendixIdiscusseshowBBCcodeddataconcerningraceandethnicityforeachCensusandforthe
20072009ACS.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE7

FigureE3.
Demographicsofworkersinconstructionandallindustries,1980,2000and20072009
California
1980
(n=580,104)
Allindustries
2000
(n=788,333)
20072009
(n=519,307)
1980
(n=33,756)
Construction
2000
(n=48,798)
20072009
(n=35,228)
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
6.8 %
5.1
0.2
17.0
0.9
0.2
30.1 %
69.8
100.0 %
42.1 %
57.9
100.0 %
6.3 %
11.1
1.1
27.6
1.2
0.9
48.2 %
51.8
100.0 %
45.1 %
54.9
100.0 %
6.1 %
12.3
1.5
34.0
1.0
0.4
55.2 %
44.8
100.0 %
45.0 %
55.0
100.0 %
3.6% **
2.0 **
0.2 **
16.1 **
1.2 **
0.1
23.2 %
76.8 **
100.0 %
9.2 % **
90.8 **
100.0 %
3.3 % **
4.0 **
0.2 **
35.0 **
1.5 **
1.0
45.1 %
54.9 **
100.0 %
9.8 % **
90.2 **
100.0 %
2.6 % **
4.6 **
0.3 **
47.9 **
1.1
0.3 **
56.7 %
43.3 **
100.0 %
9.0 % **
91.0 **
100.0 %
UnitedStates
(n=5,287,471)
1980
Allindustries
(n=6,832,970)
2000
(n=1,513,063)
20072009
(n=330,464)
1980
Construction
(n=480,280)
2000 20072009
(n=106,823)
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
10.1 %
1.4
0.2
5.7
0.6
0.1
18.1 %
81.9
100.0 %
42.2 %
57.8
100.0 %
10.9 %
3.4
0.7
10.7
1.2
0.4
27.3 %
72.7
100.0 %
46.5 %
53.5
100.0 %
11.7 %
4.0
1.0
14.3
1.1
0.2
32.3 %
67.7
100.0 %
46.7 %
53.3
100.0 %
7.4 % **
0.6 **
0.1 **
5.9 **
0.9 **
0.1
14.9 %
85.1 **
100.0 %
0.8 % **
92.1 **
92.9 %
6.2 % **
1.2 **
0.2 **
15.0 **
1.6 **
0.4
24.5 %
75.5 **
100.0 %
9.9 % **
90.1 **
100.0 %
5.8 % **
1.4 **
0.2 **
23.9 **
1.3 **
0.3
33.0 %
67.0 **
100.0 %
9.2 % **
90.8 **
100.0 %
Note: **DenotesthatthedifferenceinproportionsbetweenworkersintheconstructionindustryandallindustriesforthegivenCensus/ACS
yearisstatisticallysignificantatthe95%confidencelevel.
Source: BBCResearch&Consultingfrom1980and2000U.S.Census5%sampleand20072009ACSPublicUseMicrodatasamples.Therawdata
extractswereobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE8

Academicresearchconcerningtheaffectofraceandgenderdiscriminationon
entryintotheconstructionindustry.Thereisasubstantialacademicliteraturethathas
examinedwhetherraceandgenderdiscriminationaffectsopportunitiesofminoritiesand
womentoenterconstructiontradesintheUnitedStates.Manystudiesindicatethatraceand
genderdiscriminationaffectsopportunitiesforminoritiesandwomenintheconstruction
industry.Theliteratureconcerningwomeninconstructiontradeshasidentifiedsubstantial
barrierstoentryandadvancementduetogenderdiscriminationandsexualharassment.
8
ResearchconcerninghighwayconstructionprojectsinLosAngelesandOaklandidentified
evidenceofprevailingattitudesthatwomendonotbelonginconstruction,andthatsuch
discriminationwasworseforwomenofcolorthanforwhitewomen.
9
Importanceofunionsinenteringtheconstructionindustry.Laborresearchers
characterizeconstructionasahistoricallyvolatileindustrythatissensitivetobusinesscycles,
makingthepresenceoflaborunionsimportantforstabilityandjobsecuritywithinthe
industry.
10
Thetemporarynatureofconstructionworkresultsinuncertainjobprospects,and
therelativelyhighturnoveroflaborerspresentsadisincentiveforconstructionfirmstoinvestin
training.Someresearchershaveclaimedthatconstantturnoverhaslentitselftoinformal
recruitmentpracticesandnepotism,compellinglaborerstotapsocialnetworksfortrainingand
work.Theycredittheimportanceofsocialnetworkswiththehighdegreeofethnicsegmentation
intheconstructionindustry.
11
Unabletointegratethemselvesintotraditionallywhitesocial
networks,AfricanAmericansandotherminoritiesfacedlongstandinghistoricalbarriersto
enteringtheindustry.
12
Constructionunionsaimtoprovideareliablesourceoflaborforemployersandpreservejob
opportunitiesforworkersbyformalizingtherecruitmentprocess,coordinatingtrainingand
apprenticeships,enforcingstandardsofwork,andmitigatingwagecompetition.Theunionized
sectorofconstructionwouldseeminglybethebestroadforAfricanAmericansandother
underrepresentedgroupsintotheindustry.However,someresearchershaveidentified
discriminationbytradeunionsthathashistoricallypreventedminoritiesfromobtaining
employmentinskilledtrades.
13
Someresearchersarguethatuniondiscriminationtakesplacein
avarietyofformsincludingthefollowing:
Unionshaveusedadmissionscriteriathatadverselyaffectminorities.Inthe1970s,federal
courtsruledthatstandardizedtestingrequirementsforunionsunfairlydisadvantaged
minorityapplicantswhohadlessexposuretotesting.Inaddition,thepoliciesthatrequired
8
See,forexample,Erickson,JuliaAandDonnaE.Palladino.2009.WomenPursuingCareersinTradesandConstruction.
JournalofCareerDevelopment.36(1):6889.
9
Notethatinterviewswithwomentookplacebetween1996and1999.Price,Vivian,2002.Race,AffirmativeActionand
WomensParticipationinU.S.HighwayConstruction.FeministEconomics.8(2),87113.
10
Applebaum,Herbert.1999.ConstructionWorkers,U.S.A.Westport:GreenwoodPress.
11
Waldinger,RogerandThomasBailey.1991.TheContinuingSignificanceofRace:RacialConflictandRacialDiscrimination
inConstruction.Politics&Society,19(3).
12
Feagin,JoeR.andNikitahImani.1994.RacialBarrierstoAfricanAmericanEntrepreneurship:AnExploratoryStudy.Social
Problems.41(4):562584.
13
U.S.DepartmentofJustice.1996.ProposedReformstoAffirmativeActioninFederalProcurement.61FR26042.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE9

newunionmemberstohaverelativeswhowerealreadyintheunionperpetuatedthe
effectsofpastdiscrimination.
14
SomedisparitystudiesinCaliforniainthe1990srevealed
thatthosepracticeshadpersistedforexample,unionswerestillusingadmissionstesting
requirementsthatadverselyaffectedminorities.
15
Moreover,applicantswhowererelatives
ofexistingunionmemberswereoftenwaivedfromadmissionsrequirements.
16
Ofthoseminorityindividualswhoareadmittedtounions,adisproportionatelylownumber
areadmittedintounioncoordinatedapprenticeshipprograms.Apprenticeshipprograms
areanimportantmeansofproducingskilledconstructionlaborers,andthereported
exclusionofAfricanAmericansfromthoseprogramshasseverelylimitedtheiraccessto
skilledoccupationsintheconstructionindustry.
17
Althoughformaltrainingandapprenticeshipprogramsexistwithinunions,mosttrainingof
unionmemberstakesplaceinformallythroughsocialnetworking.Nepotismcharacterizes
theunionizedsectorofconstructionasitdoesthenonunionizedsector,andthatpractice
favorsawhitedominatedstatusquo.
18
Traditionally,whiteunionshavebeensuccessfulinresistingpoliciesdesignedtoincrease
AfricanAmericanparticipationintrainingprograms.Thepoliticalstrengthofunionsin
resistingaffirmativeactioninconstructionhashinderedtheadvancementofAfrican
Americansintheindustry.
19
Discriminatorypracticesinemployeereferralprocedures,includingapportioningwork
basedonseniority,haveprecludedminorityunionmembersfromhavingthesameaccess
toconstructionworkastheirwhitecounterparts.
20
AccordingtotestimonyfromAfricanAmericanunionmembers,evenwhenunions
implementmeritocraticmechanismsofapportioningemploymenttolaborers,white
workersareoftenallowedtocircumventproceduresandreceivepreferencefor
constructionjobs.
21
However,morerecentresearchsuggeststhattherelationshipbetweenminoritiesandunions
hasbeenchanging.Asaresult,historicalobservationsmaynotbeindicativeofcurrentdynamics
14
Ibid.SeeUnitedStatesv.IronWorkersLocal86(1971),Simsv.SheetMetalWorkersInternationalAssociation(1973),and
UnitedStatesv.InternationalAssociationofBridge,StructuralandOrnamentalIronWorkers(1971).
15
NationalEconomicResearchAssociation,Inc.1992.TheUtilizationofMinorityandWomanOwnedBusinessEnterprisesby
ContraCostaCounty.185186.
16
BPAEconomics,MasonTillmanAssociates,andBoasbergandNorton.1990.MBEWBEDisparityStudyoftheCityofSan
Jose.
17
Applebaum.1999.ConstructionWorkers,U.S.A.
18
Ibid.299.Ahighpercentageofskilledworkersreportedhavingafatherorrelativeinthesametrade.However,theauthor
suggeststhismaynotbeindicativeofcurrenttrends.
19
WaldingerandBailey.1991.TheContinuingSignificanceofRace:RacialConflictandRacialDiscriminationinConstruction.
20
U.S.DepartmentofJustice.1996.ProposedReformstoAffirmativeActioninFederalProcurement.61FR26042.SeeUnited
SteelworkersofAmericav.Weber(1979)andTaylorv.UnitedStatesDepartmentofLabor(1982).
21
FeaginandImani.1994.RacialBarrierstoAfricanAmericanEntrepreneurship:AnExploratoryStudy.SocialProblems.41(
4):562584.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE10

inconstructionunions.Recentstudiesfocusingontheroleofunionsinapprenticeshipprograms
havecomparedminorityandfemaleparticipationandgraduationratesforapprenticeshipsin
jointprograms(thatunionsandemployersorganizetogether)withratesinemployeronly
programs.Manyofthosestudiesconcludethattheimpactofunioninvolvementisgenerally
positiveorneutralforminoritiesandwomen,comparedtononHispanicwhitemales:
GloverandBilginsoy(2005)analyzedapprenticeshipprogramsintheU.S.construction
industryduringtheperiod1996through2003.Theirdatasetcoveredabout65percentof
apprenticeshipsduringthattime.Theauthorsfoundthatjointprogramshadmuchhigher
enrollmentsandparticipationofwomenandethnic/racialminoritiesandexhibited
markedlybetterperformanceforallgroupsonratesofattritionandcompletion
comparedtoemployerrunprograms.
22
Inasimilaranalysisfocusingonfemaleapprentices,BilginsoyandBerik(2006)foundthat
womenweremostlikelytoworkinhighlyskilledconstructionprofessionsasaresultof
enrollmentinjointprogramsasopposedtoemployerrunprograms.Moreover,theeffectof
unioninvolvementinapprenticeshiptrainingwashigherforAfricanAmericanwomenthan
forwhitewomen.
23
ArecentstudyonthepresenceofAfricanAmericansandHispanicAmericansin
apprenticeshipprogramsfoundthatAfricanAmericanswere8percentmorelikelytobe
enrolledinajointprogramthaninanemployerrunprogram.However,Hispanic
Americanswerelesslikelytobeinajointprogramthaninanemployerrunprogram.
24
ThosedatasuggestthatHispanicAmericansmaybemorelikelythanAfricanAmericansto
entertheconstructionindustrywithoutthesupportofaunion.
Otherdataalsoindicateamorepositiverelationshipbetweenconstructionunionsandminority
workersthanthatwhichmayhaveprevailedinthepast.Forexample,2007CurrentPopulation
Survey(CPS)dataindicatethatunionmembershipratesforAfricanAmericansaresimilarto
thoseofnonHispanicwhites.
25
TheCPSaskedparticipants,Areyouamemberofalaborunion
orofanemployeeassociationsimilartoaunion?CPSdatashowedunionmembershipfor
AfricanAmericansinconstructiontobe11percentandfornonHispanicwhitestobe12percent
notastatisticallysignificantdifference.Incontrast,theCPSshowedthatonly7percentof
HispanicAmericansareunionmembers.
Anotherstudy,whichusedU.S.DepartmentofLabordataincombinationwithdatafromthe
CaliforniaApprenticeshipAgencyfrom19952003,foundthatapprenticeshipprogramattrition
ratesandtheoccupationsforwhichstudentsweretrainingweredifferentfornonHispanic
22
Glover,RobertandBilginsoy,Cihan.2005.RegisteredApprenticeshipTrainingintheU.S.ConstructionIndustry.Education
&Training,Vol.47,4/5,p337.
23
GnseliBerik,CihanBilginsoy.2006."Stillawedgeinthedoor:womentrainingfortheconstructiontradesintheUSA",
InternationalJournalofManpower,Vol.27Iss:4,pp.321341
24
Bilginsoy,Cihan.2005.HowUnionsAffectMinorityRepresentationinBuildingTradesApprenticeshipPrograms.Journalof
LaborResearch,57(1).
25
2007CurrentPopulationSurvey(CPS),U.S.CensusBureauandBureauofLaborStatistics.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE11

whites,AfricanAmericans,andHispanicAmericans.
26
NonHispanicshadthelowestattrition
rateat47percent,followedbyHispanicAmericans(63%),andAfricanAmericans(70%). In
addition,bothAfricanAmericansandHispanicAmericansweremorelikelytoenrollintraining
programsforoccupationswithlowerlevelsofpayandprestige.Thestudydidnotexplorecausal
factorsforanyoftheobserveddifferencesbetweennonHispanicwhitesandminorities.
However,thosedifferencescouldbeexplainedbyavarietyoffactors:
Studentsinapprenticeshipprogramsmaydropoutduetodissatisfactionwiththeprogram,
training,oroccupation.
27
Theexpectedbenefitsofstayingintheapprenticeshipprogrammaybelessforlower
payingoccupations.
28
Thus,theremaybelessincentiveforapprenticesinoccupationswith
lowerpaylevelstocompletelong,arduousprograms(mostprogramsrequirebetween
6,000and8,000hoursandlastseveralyears).
29
Unobservedcharacteristicsoftheapprentices,suchasfinancialstatus,previouseducation,
Englishproficiency,age,andavarietyofothersocioeconomicfactorsmaylimittheabilityof
anindividualtocompletetheprogram.
Althoughunionmembershipandunionprogramparticipationvariesbasedonrace/ethnicity,
thecausesofthosedifferencesandtheireffectsonconstructionindustryemploymentare
unresolved.ResearchisespeciallylimitedontheimpactofunionsonAsianPacificAmerican
employment.Itisunclearfrompaststudieswhetherunionspresentlyhelporhinderequal
opportunityinconstructionandwhethereffectsinCaliforniaaredifferentfromotherpartsof
thecountry.Inaddition,thecurrentresearchindicatesthattheeffectsofunionsonentryintothe
constructionindustrymaybedifferentfordifferentminoritygroups.
Advancement.ToresearchopportunitiesforadvancementintheCaliforniaconstruction
industry,thestudyteamexaminedtherepresentationofminoritiesandwomeninconstruction
occupationsdefinedbytheU.S.BureauofLaborStatistics.
30
AppendixIprovidesfulldescriptions
ofconstructiontradeswithalargeenoughsamplesizeforanalysisinthe2000Censusand2007
2009ACS.
Racial/ethniccompositionofconstructionoccupations.FiguresE4andE5summarizethe
race/ethnicityofworkersinselectconstructionrelatedoccupationsinCalifornia,includinglow
skilloccupations,higherskillconstructiontrades,andsupervisoryroles.FigureE4andE5
presentthosedatafor2000and20072009,respectively.
26
Bilginsoy,Cihan.2003.TheHazardsofTraining:AttritionandRetentionintheConstructionIndustryApprenticeship
Programs.Industrial&LaborRelationsReview,57(1)5467.
27
Bilginsoy.2003.TheHazardsofTraining:AttritionandRetentionintheConstructionIndustryApprenticeshipPrograms.
Industrial&LaborRelationsReview,57(1)5467.
28
Bilginsoy,Cihan.2007.DeliveringSkills:ApprenticeshipProgramSponsorshipandTransitionfromTraining.Industrial
Relations,46(4):738765
29
Bilginsoy.2003.TheHazardsofTraining:AttritionandRetentionintheConstructionIndustryApprenticeshipPrograms.
Industrial&LaborRelationsReview,57(1)5467.
30
BureauofLaborStatistics,U.S.DepartmentofLabor.2001.StandardOccupationalClassificationMajorGroups.
http://www.bls.gov/soc/soc_majo.htm(accessedFebruary15,2007).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE12











FigureE4.
MinoritiesasapercentageofselectedconstructionoccupationsinCalifornia,2000
Note: **DenotesthatthedifferenceinproportionsbetweentheminoritygroupandnonHispanicwhitesisstatisticallysignificantatthe95%
confidencelevel.
Craneandtoweroperators,dredge,excavatingandloadingmachineanddraglineoperators,paving,surfacingandtampingequipment
operatorsandmiscellaneousconstructionequipmentoperatorswerecombinedintothesinglecategoryofmachineoperators.
Source: BBCResearch&Consultingfrom2000U.S.Census5%samplePublicUseMicrosampledata.Therawdataextractwasobtainedthrough
theIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE13

FigureE5.
MinoritiesasapercentageofselectedconstructionoccupationsinCalifornia,20072009
Note: **DenotesthatthedifferenceinproportionsbetweentheminoritygroupandnonHispanicwhitesisstatisticallysignificantatthe95%
confidencelevel.
Craneandtoweroperators,dredge,excavatingandloadingmachineanddraglineoperators,paving,surfacingandtampingequipment
operatorsandmiscellaneousconstructionequipmentoperatorswerecombinedintothesinglecategoryofmachineoperators.
Source: BBCResearch&Consultingfrom20072009AmericanCommunitySurveydata.TherawdataextractwasobtainedthroughtheIPUMS
programoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Basedon2000Censusand20072009ACSdata,therearelargedifferencesintheracial/ethnic
makeupofworkersinvarioustradesrelatedtoconstructioninCalifornia.Overall,minorities
comprised45percentoftheconstructionworkforcein2000and57percentin20072009.
Minoritiescomprisedarelativelylargeshareofthelocalconstructionworkforcefor:
Constructionlaborers(67%in2000and74%in20072009);
Plasterersandstuccomasons(73%in2000and92%in20072009);
Helpers(73%in2000and81%in20072009);
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE14

Cementmasonsandterrazzoworkers(69%in2000and86%in20072009);
Roofers(68%in2000and81%in20072009);
Painters(62%in2000and76%in20072009);and
Drywall,ceilingtileinstallers,andtapers(63%in2000and84%in20072009).
Someoccupationshadarelativelylowrepresentationofminorities:
Glaziers(30%in2000and47%in20072009);
Electricians(36%in2000and52%in20072009);
Machineoperators(32%in2000and44%in20072009);and
Sheetmetalworkers(31%in2000and50%in20072009).
About32percentoffirstlinesupervisorsofconstructionworkerswereminoritiesin2000,less
thanthetotalpercentageofCaliforniaconstructionworkerswhowereminorities.Minorities
madeupagreatershareoffirstlinesupervisors(42%)in20072009,butthatpercentagewas
stilllessthanthetotalpercentageofconstructionworkerswhowereminoritiesduringthose
years.
Mostoftheoveralldifferencesforminoritiesweredrivenbydifferencesintherepresentationof
HispanicAmericansinthoseoccupations.ThepercentageofnonHispanicminoritiesdecreased
orremainedthesameineachconstructionoccupationbetween2000and20072009exceptfor
constructionhelpersandglaziers.
Gendercompositionofconstructionoccupations.Thestudyteamalsoanalyzedtheproportion
ofwomeninconstructionrelatedoccupations.Overall,lessthan10percentofworkersinthe
Californiaconstructionindustrywerewomenin2000and20072009.Representationofwomen
intheCaliforniaconstructionworkforcedeclinedfrom2000to20072009downtoaboutthe
samelevelobservedin1980.
FiguresE6andE7summarizethegenderofworkersinselectconstructionrelatedoccupations.
FigureE6andE7presentthosedatafor2000and20072009,respectively.Inboth2000and
20072009,lessthan2percentofworkerswerewomeninthefollowingtrades:
Plasterersandstuccomasons;
Brickmasons,blockmasons,andstonemasons;
Cementmasonsandterrazzoworkers;
Roofers;
Sheetmetalworkers;
Carpet,floorandtileinstallersandfinishers;
Carpenters;
Drywallinstallers,ceilingtileinstallers,andtapers;
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE15

Pipelayers,plumbers,pipefitters,andstreamfitters;and
Ironandsteelworkers.
FigureE6.
Allconstructionworkers
(n=48,798)
9.8%
Womenasa
percentageof Constructionlaborers
2.4%**
(n=7,430)
construction
workersin
Plasterersandstucco
masons(n=412)
0.6%**
selected
Helpers
occupationsin 2.7%**
(n=230)
California,2000
Cementmasonsand
terrazzoworkers(n=484)
0.9%**
Note:
Roofers
0.9%**
**Denotesthatthe (n=1,086)
differenceinproportions
Painters
betweenfemalesand 4.2%**
malesisstatistically
significantatthe95% Drywallinstallers,ceilingtile
installers,andtapers(n=969)
(n=3,273)
1.8%**
confidencelevel.
Brickmasons,blockmasons
andstonemasons(n=493)
0.7%**
Craneandtoweroperators,
dredge,excavatingand Carpet,floorandtileinstallers
1.7%**
andfinishers(n=1,157)
draglineoperators,paving,
loadingmachineand
Carpenters
1.6%**
equipmentoperatorsand
miscellaneousconstruction
surfacingandtamping
(n=5,793)
Drivers,salesworkersand
truckdrivers(n=686)
3.3%**
equipmentoperatorswere
combinedintothesingle
Glaziers
2.9%**
categoryofmachine (n=154)
operators.
Pipelayers,plumbers,pipefitters
andsteamfitters(n=2,057)
1.7%**
Source:
Ironandsteelworkers
(n=317)
1.0%**
BBCResearch&Consulting
from2000U.S.Census5%
Electricians
2.6%**
samplePublicUseMicro (n=2,134)
sampledata.Therawdata
Machineoperators
extractwasobtained 1.8%**
throughtheIPUMS
programoftheMN Sheetmetalworkers
(n=391)
(n=1,352)
1.5%**
PopulationCenter:
http://usa.ipums.org/usa/.
Firstlinesupervisors
(n=4,203)
2.4%**
20% 0% 5% 10% 15% 100%
AmongalltheindividualoccupationslistedinFiguresE6andE7,thefollowingoccupations
showedanincreaseintherepresentationofwomenbetween2000and20072009:
Firstlinesupervisors;
Plasterersandstuccomasons;
Helpers;
Brickmasons,blockmasonsandstonemasons;
Ironandsteelworkers;
Sheetmetalworkers;and
Machineoperators.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE16

2009
FigureE7.
Womenasa
percentageof
construction
workersin
selected
occupationsin
California,2007
Note:
**Denotesthatthe
differenceinproportions
betweenfemalesand
malesisstatistically
significantatthe95%
confidencelevel.
Craneandtoweroperators,
dredge,excavatingand
loadingmachineand
draglineoperators,paving,
surfacingandtamping
equipmentoperatorsand
miscellaneousconstruction
equipmentoperatorswere
combinedintothesingle
categoryofmachine
operators.
Source:
BBCResearch&Consulting
from20072009American
CommunitySurveydata.
Therawdataextractwas
obtainedthroughthe
IPUMSprogramoftheMN
PopulationCenter:
http://usa.ipums.org/usa/.
Allconstructionworkers
(n=35,228)
Constructionlaborers
(n=6,371)
Plasterersandstucco
masons(n=264)
Helpers
(n=199)
Cementmasonsand
terrazzoworkers(n=291)
Roofers
(n=569)
Painters
(n=1,917)
Drywallinstallers,ceilingtile
installers,andtapers(n=614)
Brickmasons,blockmasons
andstonemasons(n=338)
Carpet,floorandtileinstallers
andfinishers(n=755)
Carpenters
(n=3,792)
Drivers,salesworkersand
truckdrivers(n=421)
Glaziers
(n=119)
Pipelayers,plumbers,pipefitters
andsteamfitters(n=1,496)
Ironandsteelworkers
(n=163)
Electricians
(n=1,674)
Machineoperators
(n=880)
Sheetmetalworkers
(n=153)
Firstlinesupervisors
(n=3,082)
9.0%
1.9% **
0.7%**
3.6%**
0.8%**
0.3%**
2.7%**
1.3%**
1.3%**
0.7%**
0.9% **
1.4% **
2.2%**
1.0% **
1.3%**
1.4% **
2.4%**
1.5%**
2.9%**
0% 5% 10% 15% 20% 100%
Percentageofminoritiesandwomenwhoaremanagers.Tofurtherassessadvancement
opportunitiesforminoritiesandwomenintheCaliforniaconstructionindustry,thestudyteam
examineddifferencesbetweendemographicgroupsintheproportionofconstructionworkers
whoweremanagers.FigureE8presentsthepercentageofconstructionworkerswhoreported
beingconstructionmanagersin2000and20072009forCaliforniaandthenation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE17

FigureE8.
Percentageof
constructionworkerswho
workedasamanager,
1980,2000and20072009
Note:
**Denotesthatthedifferencein
proportionsbetweenthe
minoritygroupandnonHispanic
whites(orbetweenfemalesand
males)forthegivenCensus/ACS
yearisstatisticallysignificantat
the95%confidencelevel.
Source:
BBCResearch&Consultingfrom
the2000U.S.Census5%sample
and20072009ACSPublicUse
Microdatasamples.Theraw
dataextractswereobtained
throughtheIPUMSprogramof
theMNPopulationCenter:
http://usa.ipums.org/usa/.
California 1980 2000 20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
1.6 %
3.8
3.9
2.1
5.3
6.0
5.9
7.4 %
4.8
5.1 %
**
**
**
**
4.9 %
9.3
11.1
2.4
8.3
8.9
11.0
5.0 %
7.9
7.6 %
**
**
**
6.0 %
10.6
16.1
3.4
10.8
7.9
14.1
7.2 %
8.7
8.6 %
**
**
**
**
**
**
**
UnitedStates 1980 2000 20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
1.5 %
4.2
5.7
2.0
2.5
4.8
4.9
5.7 %
4.4
4.5 %
**
**
**
**
**
3.1 %
7.7
11.7
2.5
4.6
6.2
7.5
4.1 %
6.7
6.5 %
**
**
**
**
**
**
4.8 %
8.2
9.3
3.0
5.4
2.7
10.0
5.8 %
8.1
7.9 %
**
**
**
**
**
**
Racial/ethniccompositionofmanagers.Overall,theproportionofconstructionworkerswho
weremanagersincreasedbetween2000and20072009.In20072009,about14percentofnon
HispanicwhitesintheCaliforniaconstructionindustryweremanagers.Comparedwithnon
Hispanicwhites,asmallerpercentageofallminoritygroupsexceptSubcontinentAsian
AmericansweremanagersintheCaliforniaconstructionindustry:
About6percentofAfricanAmericansworkingintheCaliforniaconstructionindustrywere
managers;
Lessthan4percentofHispanicAmericansweremanagers;and
ElevenpercentofAsianPacificAmericansandNativeAmericansweremanagers.
Thepercentageofworkersintheconstructionindustrywhoweremanagerswashigherin
CaliforniathantheUnitedStatesforallminoritygroups.
Gendercompositionofmanagers.Femaleconstructionworkerswerelesslikelythantheirmale
counterpartstobemanagersinboth2000and20072009.In20072009,7percentoffemale
constructionworkersweremanagersinCaliforniacomparedto9percentofmales.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE18

EngineeringIndustry
BBCnextexaminedhoweducationandemploymentmayinfluencethenumberofminorityand
femaleentrepreneurspotentiallyworkingintheCaliforniaengineeringindustry.
Education.Incontrasttotheconstructionindustry,lackofeducationalattainmentmay
precludeworkersentryintotheengineeringindustry,becausemanyoccupationsrequireat
leastafouryearcollegedegreeandsomerequirelicensure.Accordingtothe20072009ACS,65
percentofindividualsworkingintheCaliforniaengineeringindustryhadatleastafouryear
collegedegree.Eightyeightpercentofcivilengineershadatleastafouryearcollegedegree.
Therefore,barrierstoeducationcanrestrictemploymentopportunities,advancement
opportunities,and,ultimately,businessownership.Disparitiesinbusinessownershipratesin
engineeringrelatedworkmayhaveresultedfromlackofsufficienteducationacrossrace,
ethnicity,andgendergroups.
31
Basedon2000Censusdataand20072009ACSdata,FigureE9presentsthepercentageof
workersage25andolderwithatleastafouryeardegreeinCaliforniaandtheUnitedStates.The
levelofeducationnecessarytoworkintheengineeringindustrymaypartiallyrestrict
employmentopportunitiesforAfricanAmericans,HispanicAmericans,andNativeAmericans.
Foreachofthosegroups,thepercentageofworkersage25orolderwithabachelorsdegreeor
higherwassubstantiallylowerthanthatofnonHispanicwhitesinCaliforniaandtheUnited
Statesfor2000and20072009.
Race/ethnicity.InCalifornia,about45percentofallnonHispanicwhiteworkersage25and
olderhadatleastafouryeardegreein20072009.Forotherracial/ethnicgroups,20072009
ACSdataforCaliforniaindicatedthefollowing:
About28percentofAfricanAmericanshadatleastafouryearcollegedegree;
Only12percentofHispanicAmericanshadatleastafouryearcollegedegree;and
About26percentofNativeAmericanshadatleastafouryearcollegedegree.
SomeminoritygroupsinCaliforniaweremorelikelythannonHispanicwhitestobecollege
graduatesin20072009.About51percentofAsianPacificAmericansand74percentof
SubcontinentAsianAmericanshadatleastabachelorsdegree.InbothCaliforniaandtheUnited
Statesasawhole,allminoritygroupsshowedanincreasebetween2000and20072009inthe
proportionofworkerswithabachelorsdegree.
Gender.InCaliforniain2000,about32percentofwomenand33percentofmenhadatleasta
fouryearcollegedegree.In20072009,alargerpercentageofwomen(36%)hadabachelors
degreethanmen(33%).
31
Feagin,JoeR.andNikitahImani.1994.RacialBarrierstoAfricanAmericanEntrepreneurship:AnExploratoryStudy.Social
Problems.42(4):562584.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE19

FigureE9.
Percentageofallworkers25and
olderwithatleastafouryear
degree,2000and20072009
Note:
**Denotesthatthedifferenceinproportions
betweentheminorityandnonHispanicwhite
groups(orfemaleandmalegendergroups)forthe
givenCensus/ACSyearisstatisticallysignificantat
the95%confidencelevel.
Source:
BBCResearch&Consultingfrom2000U.S.Census
5%sampleand20072009ACSPublicUseMicro
sampledata.Therawdataextractswereobtained
throughtheIPUMSprogramoftheMNPopulation
Center:http://usa.ipums.org/usa/.
California 2000 20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
NonHispanicwhite
Gender
Female
Male
23.2 %
46.7
69.2
10.3
21.0
33.8
40.2
31.9 %
32.8
**
**
**
**
**
**
27.7 %
51.2
73.6
11.8
25.6
36.2
44.7
35.6 %
33.0
**
**
**
**
**
**
**
UnitedStates 2000 20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
NonHispanicwhite
Gender
Female
Male
19.1 %
45.4
68.4
13.4
17.3
30.0
32.5
29.3 %
30.2
**
**
**
**
**
**
**
22.3 %
49.3
74.2
14.8
19.0
33.5
36.3
33.4 %
31.7
**
**
**
**
**
**
**
Additionalindicesofhighschooleducationalattainment.Becauseoftheimportanceofcollege
admissionasastepinenteringtheengineeringindustry,thestudyteamexaminedadditional
informationontheeducationalachievementofminorityhighschoolstudentsinCalifornia.
CaliforniaLegislativeBlackCaucusreport.TheCaliforniaLegislativeBlackCaucuspublisheda
reportinearly2007thatincludedindicesofhighschoolachievementforAfricanAmericans,
AsianAmericans,HispanicAmericans,andnonHispanicwhitesinCalifornia.BBCtranslatedthe
reportedstatisticsintoindiceswhereavalueof100representsthehighschoolachievementrate
fornonHispanicwhitestudents.Valueslessthan100indicatelowerhighschoolachievement
ratesforminoritystudents,andvaluesgreaterthan100indicatehigherhighschoolachievement
ratesforminoritystudents.
Forexample,only25.2percentofAfricanAmericanstudentsinCaliforniahadcompleted
necessarycoursesforadmissiontoaUniversityofCalifornia(UC)orCaliforniaStateUniversity
(CSU)schoolin20042005.ThatratewasbelowtheratefornonHispanicwhitestudents
(40.9%).BBCcreatedanindexforAfricanAmericanstudentachievementforcompletionof
necessarycoursesbydividing25.2percentby40.9percent,andthenmultiplyingtheresultby
100,yieldinganindexvalueof62.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE20

AsshowninFigureE10,highschoolachievementindicesrangedfrom52to95forAfrican
AmericanstudentsinCalifornia.TherangeforHispanicAmericansinCaliforniarangedfrom59
to96.Overall,theCaliforniaLegislativeBlackCaucusreportshowededucationaloutcomesfor
AsianAmericanstudentstobesimilarorbetterthanthoseofnonHispanicwhites.
FigureE10.
IndicesofhighschoolachievementforAfricanAmericans,AsianAmericans,HispanicAmericans
andnonHispanicwhitesinCalifornia,20042005(nonHispanicwhite=100)
California
African
American
Asian
American
Hispanic
American
CompletedcoursesforUC/CSUentrance
CAT/6readingscores(11thGrade)
Highschoolexitexampassingrate:English
Highschoolexitexampassingrate:math
SATaveragescore
Highschooldropouts:1yearrate
Highschooldropouts:4yearrate
62
95
52
62
80
275
276
144
100
108
86
98
70
70
59
96
64
62
83
200
210
Note: DataforcompletedcoursesforUC/CSUentrancewerefor20042005.Datesnotprovidedinsourceforothereducationalstatistics.
Source: BBCResearch&ConsultingfromCaliforniaLegislativeBlackCaucus.2007.TheStateofBlackCalifornia,FullReport,Sacramento.
NotableindicesforAfricanAmericansincluded:
PassingthehighschoolexitexamforEnglishatarateroughlyhalfthatofnonHispanic
whitestudents;
PassingthehighschoolexitexamformathatlessthantwothirdstherateofnonHispanic
whitestudents;and
HavingahighschooldropoutratemorethantwicethatthatofnonHispanicwhitestudents
inCalifornia.
TheachievementindexwiththeleastdisparitybetweenAfricanAmericansandnonHispanic
whites(andHispanicAmericansandnonHispanicwhites)inCaliforniawasreadingscoresfrom
theStandardizedAchievementTest(SAT)administeredtostudentsinthe11thgrade.
HispanicAmericanstudents,onaverage,exhibitedsimilardisparitiesinachievementasfound
forAfricanAmericanstudents.HispanicAmericanstudentswereclosertononHispanicwhite
studentsintherateofpassingthehighschoolexitexamformath,buthadalowerindexthan
AfricanAmericansoncompletedcoursesforUCorCSUentrance.Highschooldropoutrateswere
lowerforHispanicAmericansthanforAfricanAmericans,butstilldoublethatofnonHispanic
whites.
AmericanCollegeTesting(ACT)scores.Thestudyteamalsoanalyzedmorerecenthighschool
achievementdatafromtheACTassessment.Universitiesevaluateprospectivestudentsbasedon
anumberoffactors,includinghighschoolachievementandstandardizedtestscores,suchasthe
ACT,whichmeasureseducationalattainmentinEnglish,mathematics,reading,andscience.The
sameorganizationthatadministerstheACTalsomeasurescollegereadinessusinga
benchmarkscoretheminimumscoreineachsubjectareathatindicatea50percentchanceof
obtainingaBorhigherora75percentchanceofobtainingaCorhigherincorresponding
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE21

collegelevelcourses.Eachyear,ACTpublishesitsfindingsinstatespecificreports,which
includethepercentofstudentsthatmetthecollegereadinessbenchmarkscoreby
race/ethnicity.
Usingdatafromthe2009and2011reports,BBCcreatedanattainmentindex(similartotheone
thatthestudyteamcreatedfortheCaliforniaLegislativeBlackCaucusreport)forminority
studentsbymeasuringcollegereadinessratesforeachgroupagainstthoseofnonHispanic
whitestudents.AswiththeindexfortheCaliforniaLegislativeBlackCaucusreport,avalueof
100representsthecollegereadinessbenchmarkfornonHispanicwhitestudents.Valuesless
than100indicatelowercollegereadinessbenchmarksforminoritystudents,andvaluesgreater
than100indicatehighercollegereadinessbenchmarksforminoritystudent.
AsshowninFigureE11,2011collegereadinessindicesindifferentsubjectareasrangedfrom
17to54forAfricanAmericanstudentsinCalifornia.IndicesforHispanicAmericanstudents
rangedfrom26to56.Usingthesameindexingmethod,FigureE11alsopresentsaverage
freshmangraduationratesfordifferentracial/ethnicgroupsamonghighschoolstudentsin
Californiain2009.
32
FigureE11.
IndicesofcollegereadinessandcollegefreshmangraduationratesforAfricanAmericans,Asian
Americans,HispanicAmericansandnonHispanicwhitesinCalifornia,20102011(nonHispanic
white=100)
California,20082009
African
American
Asian
American
Hispanic
American
Native
American
ACTcollegereadinessbenchmarkindexfor:
English
Math
Reading
Science
Allfour
ACTcompositescore
Averagefreshmangraduationrate
54
33
43
22
20
75
71
91
104
86
98
98
98
114
57
44
48
28
24
78
76
78
70
74
67
63
88
81
California,20102011
ACTcollegereadinessbenchmarkindexfor:
English
Math
Reading
Science
Allfour
ACTcompositescore
54
34
43
20
17
74
90
104
88
96
96
98
56
46
48
27
26
77
78
66
77
55
50
87
Note: Theaveragefreshmangraduationrate(AFGR)isanestimateofthepercentageoftheenteringhighschoolfreshmanclassgraduatingin
fouryears.Foramoredetailedexplanation,visittheUnitedStatesDepartmentofEducationwebsite.
Source: BBCResearch&ConsultingfromACT.ACTHighSchoolProfileReport.California,2009and2011&U.S.DepartmentofEducation,Common
CoreofData.PublicSchoolGraduatesandDropoutsfromtheCommonCoreofData;SchoolYear20082009.
32
Theaveragefreshmangraduationrate(AFGR)isanestimateofthepercentageoftheenteringhighschoolfreshmanclass
graduatinginfouryears.Foramoredetailedexplanation,visittheUnitedStatesDepartmentofEducationwebsite.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE22

NotableindicesforAfricanAmericansstudentsinCaliforniain2011included:
MeetingtheACTcollegereadinessbenchmarkscoreforscienceat20percentoftheratefor
nonHispanicwhitestudents;
MeetingtheACTcollegereadinessbenchmarkscoreformathatapproximatelyonethird
theratefornonHispanicwhitestudents;
MeetingtheACTcollegereadinessbenchmarkscoreinallfoursubjectareasat17percent
oftheratefornonHispanicwhitestudents;and
Havinganaveragefreshmangraduationratethatwas71percentofthatfoundfornon
Hispanicwhitestudents.
Intermsofthecollegereadinessbenchmarkscore,thesmallestdisparitybetweenAfrican
AmericansandnonHispanicwhiteswasinEnglish(indexscoreof54).
TherewerealsodisparitiesincollegereadinessandhighschoolachievementforHispanic
AmericanstudentsinCaliforniawhenmeasuringtheirscoresagainstthoseofnonHispanic
whitestudents.HispanicAmericanstudentsmetthecollegereadinessbenchmarkscoresinmath
andscienceatabout46percentand27percentofthenonHispanicwhiterates,respectively.For
thoseinthegraduatingclassof2009,HispanicAmericanshadanaveragefreshmangraduation
ratethatwas76percentofthatfoundfornonHispanicwhitestudents.
Ingeneral,NativeAmericanstudentsinCaliforniaalsometthecollegereadinessbenchmark
scoresatlowerratesthannonHispanicwhitestudentsbutaboveratesforAfricanAmericanand
HispanicAmericanstudents.ScoresforAsianAmericanstudentswerehigherthanAfrican
American,HispanicAmerican,andNativeAmericanstudentsforeachsectionoftheACTwith
collegereadinessindicesindifferentsubjectareasrangingfrom88to104.AsianAmericansalso
hadanaveragefreshmangraduationratethatwas114percentofthatfoundfornonHispanic
whitestudents.
Itappearsthatdisparitiesineducationalachievementinhighschoolorinpriorgradesare
importantinexplainingtherelativelylownumberofAfricanAmericansandHispanicAmericans
thathavecollegedegreesinCalifornia.Therearemanystudiesthroughoutthenationthat
considerwhetherthecausesofthedisparitiesineducationaloutcomesforracial/ethnic
minoritiesareaffectedbydiscrimination.Thosestudiesarenotreviewedinthisreport.
CollegeengineeringprogramsinCalifornia.Historically,collegeengineeringprogramsinthe
UnitedStateswereslowtoopendoorstominoritiessuchasAfricanAmericans.
33
Inrecentyears,
CaliforniahasstoodoutashavinglowpercentagesofAfricanAmericanengineeringstudents.
Outofthetop26engineeringschoolsinthenationin2002,fourwereUniversityofCalifornia
campuses(UCBerkeley,UCLosAngeles(UCLA),UCSantaBarbara(UCSB),andUCSanDiego
33
UnknownAuthor.2003.BlacksStrivetoBuildaBridgeheadinAcademicEngineering.TheJournalofBlacksinHigher
Education.41(Autumn):98108,98.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE23

(UCSD)).A2003studyidentifiedthoseschoolsforthelowestpercentagesofAfricanAmerican
engineeringstudentsamongthetop26:
34
Infall2002,theUniversityofCaliforniaBerkeleyhad65AfricanAmericanstudentsamong
4,941fulltimeengineeringstudents(1.4percentofengineeringstudents),similartoUCLA.
Therewere23AfricanAmericansamong2,370totalengineeringstudentsatUCSB.
UCSDhadnoAfricanAmericansamongits5,264engineeringstudentsinfall2002.
Becausetheenrollmentstatisticsforengineeringstudentswerefor2002,mostofthosestudents
enrolledincollegeafterProposition209hadgoneintoeffect.Proposition209prohibits
Californiaspubliccollegesfromgivingpreferentialtreatmenttominoritiesandwomenin
collegeadmissionsandfinancialaidexceptaspartofafederalprogram.Voterspassedthat
amendmenttotheCaliforniaconstitutionin1996,anditwentintoeffectin1998.Many
researchersblameProposition209fortherelativelylowrepresentationofAfricanAmericanand
HispanicAmericanstudentsatmoreselectivecollegesinCalifornia.
35,36
FollowingthepassingofProposition209,admissionratesofminorityapplicantsdropped
dramaticallyandintheyearsfollowinghavenotentirelyrecovered.Onearticlenotesthat
admissionratesforAfricanAmericansatmoreprestigiousUCcampuseshaveremainedlow,but
ratesattheleastselectivecampuseshavegrownsinceProposition209.
37
Oneresearcherfound
thatthepercentageofAfricanAmericanstudentsatUCLApriortoProposition209werenearly
doublethepercentagein2007.
38
AnotherresearcherwroteabouttheeffectofProposition209
ontransferstudentsandfoundthatAfricanAmericanshavemuchlowerratesofacceptance
whereasHispanicAmericansexperiencetransferadmissionratessimilartononHispanic
whites.
39
Asagroup,AsianAmericanapplicantswerenotadverselyaffectedbytheamendment.Asian
Americanstudentsaccountedforonly11percentofCaliforniahighschoolgraduatesin2006,but
accountedfor36percentofallstudentsadmittedtotheUCsystem.
40
34
Ibid.
35
Contreras,Frances.2003.TheReconstructionofMeritPostProposition209.EducationalPolicy.19(2):371395.
36
Karabel,Jerome.1999.TheRiseandFallofAffirmativeActionattheUniversityofCalifornia.TheJournalofBlacksinHigher
Education.25(Autumn):109112.
37
UnknownAuthor.2006.AffirmativeActionBanContinuestoInflictSevereDamageonBlackHigherEducational
OpportunitiesinCalifornia.TheJournalofBlacksinHigherEducation.51(Spring):44.
38
UnknownAuthor.2007.TheBanonAffirmativeActionattheUniversityofCaliforniaisNow10YearsOld:TheSevereHarm
totheEducationalOpportunitiesforAfricanAmericansPersistsTheJournalofBlacksinHigherEducation.56(Summer):34
35,34.
39
UnknownAuthor.2006.TheDevastatingImpactofProposition209onBlackHigherEducationinCalifornia.TheJournalof
BlacksinHigherEducation.59(Spring):1415,14.
40
UnknownAuthor.2006.AffirmativeActionBanContinuestoInflictSevereDamageonBlackHigherEducational
OpportunitiesinCalifornia.TheJournalofBlacksinHigherEducation.51(Spring).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE24

Tobetterunderstandthebroaderpatternsofenrollmentbyrace/ethnicityinthefourUC
schoolswiththehighestratedengineeringprograms,thestudyteamexaminedAfrican
American,HispanicAmerican,andNativeAmericanenrollmentasundergraduatesin1995,
2003,and2011.FigureE12presentsthosetrends.
Between1995and2003,theproportionofundergraduateswhoareAfricanAmerican
decreasedbyapproximatelyonethirdatUCBerkeleyandbyonehalfatUCLAandUCSD.
TheproportionofAfricanAmericanundergraduatescontinuedtodeclineatUCBerkeley
through2011butincreasedatUCLA,UCSDandUCSBfrom2003to2011.UCSBistheonly
campustohaveahigherrepresentationofAfricanAmericanundergraduatesin2011than
in1995.
TherepresentationofHispanicAmericansamongundergraduatesalsodeclinedatUC
Berkeley,UCLAandUCSanDiegofrom1995to2003.EnrollmentofHispanicAmericans
increasedoneachcampusfrom2003to2011butremainedbelowthe1995proportionat
UCBerkeley.TheproportionofHispanicundergraduatesdoubledatUCSBbetween1995
and2011.
EnrollmentofNativeAmericansdroppedatallfourcampusesfrom1995to2003.The
proportionofNativeAmericanundergraduatesincreasedfrom2003to2011,butremained
belowenrollmentpriortothepassingofProposition209,exceptatUCSB.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE25

FigureE12.
EnrollmentofundergraduatesatselectedUniversityofCaliforniacampuses,fall1995,
2003and2011
Source: UCOfficeofthePresident,StudentAffairs,Admissions,availableathttp://www.ucop.edu/sas/index.html.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE26

Employment.Afterconsiderationofeducationalopportunitiesandattainmentforminorities
andwomen,thestudyteamexaminedtherace/ethnicityandgendercompositionofworkersin
theengineeringindustryinCalifornia.FigureE13comparesthedemographiccompositionof
workersintheCaliforniaengineeringindustrytothatofallworkersinCaliforniawhoare25
yearsorolderandhaveacollegedegree.Resultsarepresentedfor1980,2000,and20072009.
Race/ethnicity.In20072009,about37percentofworkersintheCaliforniaengineering
industrywereminorities.Ofthoseworkers:
3percentwereAfricanAmericans;
16percentwereAsianPacificAmericans;
2percentwereSubcontinentAsianAmerican;and
14percentwereHispanicAmericans.
NativeAmericanscomprisedapproximately1percentofCaliforniaengineeringworkersin2007
2009.
In20072009,minoritiesasasinglegroupcomprisedasmallershareofworkersinengineering
relatedindustries(37%)thanallworkers25andolderwithafouryearcollegedegree(40%).In
particular,AsianPacificAmericansmadeup19percentofworkerswithafouryearcollege
degreebutonly16percentofworkersintheengineeringindustry.SubcontinentAsian
Americansmadeupnearly4percentofworkerswithacollegedegreeandonly2percentof
engineeringworkers.AfricanAmericansalsohadalowerrepresentationamongengineers(3%)
thanallworkerswithacollegedegree(5%).However,HispanicAmericanscomprisedalarger
shareofworkersintheengineeringindustry(14%)thanworkerswithacollegedegreeinall
industries(11%).
Gender.Comparedtotheirrepresentationamongworkers25andolderwithacollegedegreein
allindustries,relativelyfewwomenworkintheengineeringindustry.In20072009,women
represented27percentofengineeringrelatedworkersinCaliforniabutabout47percentof
workerswithafouryearcollegedegree.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE27

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= =


= =
FigureE13.
Demographicdistributionofengineeringrelatedworkersandworkersage25andolderwitha
fouryearcollegedegreeinallindustries,1980,2000and20072009
California
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
4.0 % 4.5 % 4.8 %
8.2 16.3 19.3
0.6 2.4 3.5
5.1 7.9 11.2
0.5 0.8 0.7
0.2 0.9 0.4
18.6 % 32.9 % 39.9 %
81.4 67.1 60.1
100.0 % 100.0 % 100.0 %
34.0 % 44.3 % 46.5 %
66.0 55.7 53.5
100.0 % 100.0 % 100.0 %
Workers25+withcollegedegree
1980 2000 200709
(n=109,611) (n=212,702) (n=167,342)
2.4 % ** 3.1 % ** 3.4 % **
7.7 14.4 ** 16.0 **
1.0 ** 1.5 ** 2.1 **
6.8 ** 11.0 ** 14.0 **
0.4 0.9 1.0
0.2 1.0 0.2 **
18.5 % 31.9 % 36.6 %
81.5 68.1 63.4 **
100.0 % 100.0 % 100.0 %
23.3 % ** 27.4 % ** 27.3 % **
76.7 ** 72.6 ** 72.7 **
100.0 % 100.0 % 100.0 %
Engineeringindustryworkforce
(n=6,419)
1980 2000 200709
(n 3,965) (n 7,919)
UnitedStates
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
5.3 % 6.8 % 7.7 %
2.7 5.2 6.2
0.6 1.7 2.5
2.5 4.4 6.3
0.3 0.7 0.6
0.1 0.4 0.2
11.4 % 19.1 % 23.6 %
88.6 80.9 76.4
100.0 % 100.0 % 100.0 %
34.7 % 45.6 % 47.9 %
65.3 54.4 52.1
100.0 % 100.0 % 100.0 %
1980 2000 200709
(n=858,511) (n 1,631,919) (n=445,915)
Workers25+withcollegedegree
3.1 % ** 4.2 % ** 5.0 % **
2.8 4.6 ** 4.8 **
1.1 ** 1.3 ** 1.5 **
3.5 ** 5.5 ** 6.8 **
0.3 ** 0.7 0.8
0.1 0.4 0.2
10.9 % 16.7 % 19.2 %
88.9 83.3 ** 80.8 **
99.8 % 100.0 % 100.0 %
21.1 % ** 26.0 % ** 26.8 % **
78.9 ** 74.0 ** 73.2 **
100.0 % 100.0 % 100.0 %
(n=16,737)
1980 2000 200709
(n=28,869) (n 58,221)
Engineeringindustryworkforce
Note: **DenotesthatthedifferenceinproportionsbetweenengineersandworkersinallindustrygroupsforthegivenCensus/ACSyearis
statisticallysignificantatthe95%confidencelevel.
Theengineeringrelatedindustryin2000and20072009isarchitectural,engineering,andrelatedservices,andin1980isengineering,
architecturalandsurveyingservices.Thoughcloselyrelated,thegroupsarenotexactlycomparable.
Source: BBCResearch&Consultingfrom1980and2000U.S.Census5%sampleand2009ACSPublicUseMicrosampledata.Therawdataextracts
wereobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Civilengineers.Thestudyteamalsoexaminedthenumberofminoritiesandwomenamongcivil
engineersinCaliforniain1980,2000,and20072009.FigureE14presentstheseresults.
Overall,in20072009,thepercentageofcivilengineerswhowereminorities(39%)was
consistentwiththepercentageofallCalifornianswithcollegedegreeswhowereminorities
(40%).However,AfricanAmericans,HispanicAmericansandNativeAmericansrepresenteda
smallershareofcivilengineersthanofallworkers25andolderwithacollegedegree(the
differenceforHispanicAmericanswasnotstatisticallysignificant).AsianPacificAmericans
comprised19percentofallworkerswithcollegedegreesand21percentofcivilengineers(nota
statisticallysignificantdifference).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE28








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Only13percentofcivilengineersinCaliforniawerewomenin20072009,farlessthanthe
percentageofallworkerswithcollegedegreesthatwerewomen(47%).
FigureE14.
Demographicsofcivilengineersandworkers25andolderwithacollege
degree,1980,2000and20072009
California
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
4.0 % 4.5 % 4.8 %
8.2 16.3 19.3
0.6 2.4 3.5
5.1 7.9 11.2
0.5 0.8 0.7
0.2 0.9 0.4
18.6 % 32.9 % 39.9 %
81.4 67.1 60.1
100.0 % 100.0 % 100.0 %
34.0 % 44.3 % 46.5 %
66.0 55.7 53.5
100.0 % 100.0 % 100.0 %
Workers25+withcollegedegree
1980 2000 200709
(n=109,611) (n=212,702) (n=167,342)
2.3 % ** 3.1 %
11.0 ** 19.4
2.9 ** 2.7
5.2 8.2
0.1 ** 0.9
0.1 0.9
21.6 % 35.3 %
78.3 ** 64.7
99.9 % 100.0 %
3.4 % ** 13.1 % **
96.6 ** 86.9 **
100.0 % 100.0 %
Civilengineeringworkforce
1980 2000
(n=1,567) (n 1,952)
3.1 % **
21.3
3.8
10.5
0.3 **
0.2
39.2 %
60.8
100.0 %
13.4 % **
86.6 **
100.0 %
200709
(n=1,449)
UnitedStates
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherminoritygroup
Totalminority
NonHispanicwhite
Total
Gender
Female
Male
Total
5.3 % 6.8 % 7.7 %
2.7 5.2 6.2
0.6 1.7 2.5
2.5 4.4 6.3
0.3 0.7 0.6
0.1 0.4 0.2
11.4 % 19.1 % 23.6 %
88.6 80.9 76.4
100.0 % 100.0 % 100.0 %
34.7 % 45.6 % 47.9 %
65.3 54.4 52.1
100.0 % 100.0 % 100.0 %
(n=858,511) (n=1,631,919) (n=445,915)
1980 2000 200709
Workers25+withcollegedegree
2.5 % ** 3.7 % **
4.0 ** 6.2 **
2.0 ** 2.6 **
2.9 ** 4.4
0.3 0.8
0.2 ** 0.4
11.8 % 18.2 %
88.2 81.8
100.0 % 100.0 %
3.0 % ** 10.3 % **
97.0 ** 89.7 **
100.0 % 100.0 %
(n 10,088) (n=12,912)
1980 2000
Civilengineeringworkforce
5.2 % **
6.4
3.4 **
5.9
0.7
0.3
21.9 %
78.1
100.0 %
12.3 % **
87.7 **
100.0 %
(n=3,405)
200709
Note: **Denotesthatthedifferenceinproportionsbetweencivilengineersandworkers25+withacollegedegreeforthegivenCensus/ACS
yearisstatisticallysignificantatthe95%confidencelevel.
Source: BBCResearch&Consultingfromthe1980and2000U.S.Census5%samplesand20072009ACSPublicUseMicrosampledata.Theraw
dataextractswereobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE29

Summary
BBCsanalysissuggeststhattherearebarrierstoentryforcertainminoritygroupsandfor
womenintheconstructionandengineeringindustriesinCalifornia.Fortheconstruction
industry,thereappearstobebarrierstoadvancingwithintheindustrythatcontinuethrough
occupationaladvancement.
FewerAfricanAmericansworkedintheCaliforniaconstructionindustrythanwhatmight
beexpectedbasedontheirrepresentationintheoverallworkforce.Forengineering,
barriersmaybeginwitheducationforcertainminoritygroups.
WomenaccountedforparticularlyfewworkersintheCaliforniaconstructionindustry.
LackofeducationappearstobeabarriertoentryintotheCaliforniaengineeringindustry
forAfricanAmericans,HispanicAmericans,andNativeAmericans.Workersineachof
thosegroupswerelesslikelytohaveafouryearcollegedegreecomparedtononHispanic
whites.ForAfricanAmericansandHispanicAmericans,disparitiesineducational
attainmentappearatthehighschoollevel,whichmayaffectcollegeopportunities.
In20072009,therewerefewerwomenthanmenintheengineeringindustryinCalifornia,
despitethefactthatmorewomenhadattainedfouryearcollegedegrees.
Barrierstoadvancementintheconstructionindustrymayalsobeanimportantreasonforthe
relativelylownumberofminorityandfemalebusinessowners.
Representationofminoritiesandwomenwasmuchlowerincertainconstructiontrades
(includingfirstlinesupervisors)comparedwithothers.
ComparedtononHispanicwhitesintheconstructionindustry,AfricanAmericansand
HispanicAmericanswerelesslikelytobemanagers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXE,PAGE30

APPENDIXF.
BusinessOwnershipintheCalifornia
ConstructionandEngineeringIndustries
About22percentofallworkersintheCaliforniaconstructionindustrywereselfemployed
businessownersin20072009.Fifteenpercentofworkersinthelocalengineeringindustry
wereselfemployedbusinessowners.Focusingonthosetwoindustries,BBCexaminedbusiness
ownershipfordifferentracial,ethnic,andgendergroupsinCalifornia.BBCusedPublicUse
MicrodataSamples(PUMS)fromthe1980and2000Censusandfromthe20072009ACSto
studybusinessownershipratesintheconstructionandengineeringindustries.Notethatself
employmentandbusinessownershipareusedinterchangeablyinAppendixF.
BusinessOwnershipRates
Manystudieshaveexploreddifferencesbetweenminorityandnonminoritybusiness
ownershipatthenationallevel.Althoughoverallselfemploymentrateshaveincreasedfor
minoritiesandwomenovertime,anumberofstudiesindicatethatrace/ethnicityandgender
continuetoaffectopportunitiesforbusinessownership.
1
Theextenttowhichsuchindividual
characteristicsmaylimitbusinessownershipopportunitiesdiffersacrossindustriesandfrom
statetostate.
Constructionindustry.Comparedtootherindustries,constructionhasalargenumberof
businessowners.In20072009,11percentofworkersacrossallindustrieswereselfemployed
inCalifornia(inincorporatedorunincorporatedbusinesses).Twentytwopercentofworkersin
theconstructionindustrywereselfemployed.However,ratesofselfemploymentinthe
Californiaconstructionindustryvarybyrace,ethnicity,andgender.FigureF1showsthe
percentageofworkerswhowereselfemployedintheconstructionindustrybygroupfor1980,
2000,and20072009.FigureF1alsoreportscorrespondingsamplesizesforthosepercentages.
ResultsforCaliforniaarecomparedwithnationalstatistics.
Businessownershipratesin2000.The2000Censusprovidesinformationonthelargestsample
ofconstructionworkersofanyofthedatasetsexamined.In2000,26percentofnonHispanic
whitesworkingintheCaliforniaconstructionindustrywereselfemployed.ExceptforAsian
PacificAmericans,businessownershiprateswerelowerforeachminoritygroup.
1
See,forexample,Waldinger,RogerandHowardE.Aldrich.1990.EthnicityandEntrepreneurship.AnnualReviewofSociology.
111135.;Fairlie,RobertW.andBruceD.Meyer.1996.EthnicandRacialSelfEmploymentDifferencesandPossible
Explanations.TheJournalofHumanResources,Volume31,Issue4,757793.;Fairlie,RobertW.andAliciaM.Robb.2007.Why
areBlackOwnedBusinessesLessSuccessfulthanWhiteOwnedBusinesses?TheRoleofFamilies,InheritancesandBusiness
HumanCapital.JournalofLaborEconomics,25(2),289323.;andFairlie,RobertW.andAliciaM.Robb.2006.Race,Families
andBusinessSuccess:AComparisonofAfricanAmerican,Asian,andWhiteOwnedBusinesses.RussellSageFoundation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE1

FigureF1.
Percentageofworkersintheconstructionindustrywhowereselfemployed,
1980,2000and20072009
California 1980 2000 20072009 1980 2000
Samplesize
20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
12.0 %
15.5
0.0
9.9
13.7
22.0
21.9
10.3 %
20.2
19.3 %
**
**
**
**
**
**
14.9
25.9
15.5
11.8
22.0
25.4
26.5
13.7
21.6
20.8
%
%
%
**
**
**
19.4 %
29.2
22.3
15.3
25.3
34.1
29.4
14.7 %
23.1
22.3 %
**
**
**
1,219
659
51
5,430
416
50
25,931
3,119
30,637
33,756
1,482
1,961
115
17,166
840
458
26,786
4,840
43,968
48,808
776
1,682
106
14,891
418
86
17,269
3,676
31,552
35,228
UnitedStates 1980 2000 20072009 1980 2000
Samplesize
20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
9.0 %
11.7
4.9
10.6
10.1
14.5
19.4
9.8 %
18.7
18.0 %
**
**
**
**
**
**
**
15.2
21.3
17.9
12.2
19.2
23.9
25.4
16.8
23.3
22.6
%
%
%
**
**
**
**
**
**
18.2 %
23.9
23.5
15.5
20.7
16.4
27.3
17.4 %
24.4
23.8 %
**
**
**
**
**
**
24,357
2,057
244
19,590
2,874
248
281,094
26,096
304,368
330,464
26,752
5,297
725
66,531
8,089
1,923
371,152
46,791
433,678
480,469
5,044
1,515
211
19,455
1,677
243
78,678
10,794
96,029
106,823
Note: *,**DenotesthatthedifferenceinproportionsbetweentheminorityandnonHispanicwhitegroups(orfemaleandmalegroups)for
thegivenCensus/ACSyearisstatisticallysignificantatthe90%or95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom1980and2000U.S.Census5%sampleand20072009ACSPublicUseMicrodatasamples.Theraw
dataextractwasobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
About12percentofHispanicAmericansintheconstructionindustryownedtheir
businesses,lessthanhalfoftherateofnonHispanicwhites.
AfricanAmericansintheconstructionindustryownedbusinessesatarateofonlyabout15
percent,substantiallylowerthantherateofnonHispanicwhites.
InCalifornia,16percentofSubcontinentAsianAmericansworkingintheconstruction
industrywereselfemployed,substantiallylowerthantherateofnonHispanicwhitesbut
notastatisticallysignificantdifference.
TheownershiprateofNativeAmericansintheconstructionindustrywas22percent,
lowerthanthatfornonHispanicwhitesbutnotastatisticallysignificantdifference.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE2

Comparedwithabout22percentofmen,14percentofwomenworkingintheconstruction
industryinCaliforniawereselfemployedin2000.Thatdifferencewasconsistentwithgender
trendsobservedfortheentirenation.
Changesinbusinessownershipratessince2000.Businessownershipratesintheconstruction
industryincreasedamongallgroupsbetween1980and2000andagainbetween2000and
20072009.Notethatthistrendcoverstherecessionwhichbeganinlate2007.In20072009,
29percentofnonHispanicwhitesworkingintheCaliforniaconstructionindustrywereself
employed,comparedwith26percentin2000.Althoughminoritygroupsalsohadhigherratesof
businessownershipin20072009thanin2000,businessownershipratesforminorities
continuedtobelowerthanthatfornonHispanicwhiteconstructionworkers.
In20072009,asubstantiallysmallerpercentageofHispanicAmericans(15%)thannon
HispanicwhiteswerebusinessownersintheCaliforniaconstructionindustry.
ThebusinessownershiprateofAfricanAmericanswasabout19percent,substantially
lowerthanthatfornonHispanicwhites.
AsianPacificAmericanscontinuedtoownbusinessesatasimilarratetononHispanicwhitesin
20072009.SubcontinentAsianAmericanconstructionworkersandNativeAmerican
constructionworkershadlowerbusinessownershipratesthanthatfornonHispanicwhitesbut
thosedifferenceswerenotstatisticallysignificant.
Substantialdifferencesinbusinessownershipratespersistedbetweenwomen(15%)andmen
(23%)in20072009,consistentwithnationaltrends.
Engineeringindustry.BBCalsoexaminedbusinessownershipratesintheengineering
industry.
2
FigureF2presentsthepercentage(andcorrespondingsamplesizes)ofworkerswho
wereselfemployedintheengineeringindustryin1980,2000,and20072009.
Businessownershipratesin2000.In2000,about19percentofnonHispanicwhitesworkingin
theCaliforniaengineeringindustrywereselfemployed.Mostminoritygroupshadlowerrates
ofbusinessownershipthannonHispanicwhites.
HispanicAmericanshadabusinessownershiprateofabout9percent,approximatelyhalf
therateofnonHispanicwhites.
ThebusinessownershiprateofAfricanAmericanswasabout6percent,lessthanonethird
therateofnonHispanicwhites.
About11percentofAsianPacificAmericansworkingintheengineeringindustrywereself
employed,lowerthantherateofnonHispanicwhites.
TheownershiprateofSubcontinentAsianAmericanswas15percent,lowerthantherate
ofnonHispanicwhitesbutnotastatisticallysignificantdifference.
2
InAppendixFandothermarketplaceappendices,Censusdatafortheengineeringindustryrefertoarchitectural,
engineeringandrelatedservices.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE3

FigureF2.
Percentageofworkersintheengineeringindustrywhowereselfemployed,
1980,2000and20072009
California 1980 2000 20072009 1980 2000
Samplesize
20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
7.2 %
11.6
15.0
9.3
11.1
0.0
20.6
6.7 %
22.3
18.7 %
**
**
**
**
6.4 %
10.5
15.4
8.6
21.8
22.9
18.5
9.4 %
18.4
15.9 %
**
**
**
**
6.0 %
11.4
4.8
8.3
22.2
0.0
18.5
9.2 %
17.5
15.2 %
**
**
**
**
**
97
303
40
270
18
6
3,231
925
3,040
3,965
219
1,129
122
863
87
77
5,422
2,187
5,732
7,919
174
1,044
141
791
57
16
4,196
1,755
4,664
6,419
UnitedStates 1980 2000 20072009 1980 2000
Samplesize
20072009
Race/ethnicity
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
NonHispanicwhite
Gender
Female
Male
Allindividuals
5.1 %
8.4
5.8
9.2
10.4
5.3
15.8
4.5 %
17.7
14.9 %
**
**
**
**
*
**
**
5.2 %
8.5
6.2
8.9
11.8
11.6
14.2
7.5 %
15.1
13.2 %
**
**
**
**
**
4.0 %
9.5
6.0
10.2
8.9
6.0
13.5
7.6 %
14.2
12.5 %
**
**
**
**
*
**
**
906
807
326
1,013
106
38
25,673
6,090
22,779
28,869
2,206
2,620
736
3,123
474
242
48,823
15,191
43,033
58,224
657
838
246
1,019
139
37
13,801
4,497
12,240
16,737
Note: MinorityincludesAfricanAmericans,HispanicAmericans,AsianPacificAmericans,SubcontinentAsianAmericans,NativeAmericansand
otherminoritygroups.Samplesizesfortheserace/ethnicitygroupsweretoosmalltoanalyzeindividually.Thedatapresentedinthistable
includeallworkersintheengineeringindustry.
*,**DenotesthatthedifferenceinproportionsbetweentheminorityandnonHispanicwhitegroups(orfemaleandmalegroups)forthe
givenCensus/ACSyearisstatisticallysignificantatthe90%or95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom1980and2000U.S.Census5%sampleand2009ACSPublicUseMicrodatasamples.Therawdataextract
wasobtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
TheengineeringindustrybusinessownershiprateforNativeAmericans(22%)washigherin
2000thanthatofnonHispanicwhites,butthatdifferencewasnotstatisticallysignificant.
Duringthesameyear,approximately9percentofwomenworkingintheengineeringindustry
wereselfemployedcomparedwith18percentofmeninthelocalengineeringindustry.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE4

Changesinbusinessownershipratessince2000.AsshowninFigureF2,therateofbusiness
ownershipratesforAfricanAmericans,HispanicAmericans,andSubcontinentAsianAmericans
workingintheCaliforniaengineeringindustryfellbetween2000and20072009,whereasthe
ratefornonHispanicwhitesremainedthesame(19%).
ThebusinessownershiprateforHispanicAmericansfellto8percent,lowerthantherate
ofnonHispanicwhites.
AfricanAmericanshadabusinessownershiprateof6percent,stilllessthanonethirdthe
rateofnonHispanicwhites.
About11percentofAsianPacificAmericansworkingintheengineeringindustrywere
selfemployed,lowerthantherateofnonHispanicwhites.
ThebusinessownershiprateforSubcontinentAsianAmericansdroppedto5percentin
20072009,aboutonequarteroftherateofnonHispanicwhites.
ThebusinessownershiprateforNativeAmericansincreasedbetween2000and2007
2009andremainedhigherthantherateofnonHispanicwhites.However,thatdifference
wasnotstatisticallysignificant.
BothwomenandmenworkingintheCaliforniaengineeringindustryownedbusinessesatlower
ratesin20072009thanin2000,butwomen(8%)stillownedengineeringbusinessesatalower
ratethanmen(14%).
Potentialcausesofdifferencesinbusinessownershiprates.Researchershave
examinedwhethertherearedisparitiesinbusinessownershipratesafterconsideringpersonal
characteristicssuchaseducationandage.Severalstudieshavefoundthatdisparitiesinbusiness
ownershipstillexistwhenaccountingforsuchraceandgenderneutralfactors.
Somestudieshaveconcludedthataccesstofinancialcapitalisastrongdeterminantof
businessownership.Researchershaveconsistentlyfoundapositiverelationshipbetween
startupcapitalandbusinessformation,expansion,andsurvival.
3
Inaddition,onestudy
foundthathousingappreciationmeasuredattheMetropolitanStatisticalArea(MSA)level
isapositivedeterminantofbecomingselfemployed.
4
However,unexplaineddifferences
stillexistwhenstatisticallycontrollingforthosefactors.
5
3
SeeLofstrom,MagnusandChunbeiWang.2006.HispanicSelfEmployment:ADynamicAnalysisofBusinessOwnership.
Workingpaper,ForschungsinstitutzurZukunftderArbeit(InstitutefortheStudyofLabor).;andFairlie,RobertW.andAlicia
M.Robb.2006.Race,FamiliesandBusinessSuccess:AComparisonofAfricanAmerican,Asian,andWhiteOwnedBusinesses.
RussellSageFoundation.
4
Fairlie,RobertW.andHarryA.Krashinksy.2006.LiquidityConstraints,HouseholdWealthandEntrepreneurshipRevisited.
5
Lofstrom,MagnusandChunbeiWang.2006.HispanicSelfEmployment:ADynamicAnalysisofBusinessOwnership.Working
paper,ForschungsinstitutzurZukunftderArbeit(InstitutefortheStudyofLabor).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE5

Educationhasapositiveeffectontheprobabilityofbusinessownershipinmostindustries.
However,findingsfrommultiplestudiesindicatethatminoritiesarestilllesslikelytoown
abusinessthannonminoritieswithsimilarlevelsofeducation.
6
Intergenerationallinksaffectoneslikelihoodofselfemployment.Onestudyfoundthat
experienceworkingforaselfemployedfamilymemberincreasesthelikelihoodof
businessownershipforminorities.
7
TimesinceimmigrationandassimilationintoAmericansocietyarealsoimportant
determinantsofselfemployment,butunexplaineddifferencesinbusinessownership
betweenminoritiesandnonminoritiesstillexistwhenaccountingforthosefactors.
8
BusinessOwnershipRegressionAnalysis
Race,ethnicity,andgendercanaffectopportunitiesforbusinessownership,evenwhen
accountingforotherpersonalcharacteristicssuchaseducation,age,andfamilialties.Tofurther
examinebusinessownership,BBCdevelopedmultivariatestatisticalmodelstoexplorepatterns
ofbusinessownershipinCalifornia.Thosemodelsestimatetheeffectofrace/ethnicityand
genderontheprobabilityofselfemploymentwhilecontrollingforotherpotentiallyinfluential
factors.
Anextensivebodyofliteratureexamineswhetherraceandgenderneutralfactorssuchas
accesstofinancialcapital,education,age,andfamilycharacteristics(e.g.,maritalstatus)help
explaindifferencesinbusinessownership.Thatsubjecthasalsobeenexaminedinother
disparityanalyses.Forexample,priorstudiesinMinnesotaandIllinoishaveconducted
econometricanalysesinvestigatingwhetherdisparitiesinbusinessownershipforminorities
andwomenworkinginthecombinedconstructionandengineeringindustryremainafter
statisticallycontrollingforotherpersonalcharacteristics.
9,10
Thosestudieshaveincorporated
probiteconometricmodelsusingPUMSdatafromthe2000Censusandhavebeenamong
materialssubmittedtocourtsinsubsequentlitigationconcerningstateimplementationofthe
FederalDBEProgram.
6
SeeFairlie,RobertW.andBruceD.Meyer.1996.EthnicandRacialSelfEmploymentDifferencesandPossibleExplanations.
TheJournalofHumanResources,Volume31,Issue4,757793;andButler,JohnSibleyandCedricHerring.1991.Ethnicityand
EntrepreneurshipinAmerica:TowardanExplanationofRacialandEthnicGroupVariationsinSelfEmployment.Sociological
Perspectives.7994.
7
SeeFairlie,RobertW.andAliciaM.Robb.2006.Race,FamiliesandBusinessSuccess:AComparisonofAfricanAmerican,
Asian,andWhiteOwnedBusinesses.RussellSageFoundation;andFairlie,RobertW.andAliciaM.Robb.2007.WhyareBlack
OwnedBusinessesLessSuccessfulthanWhiteOwnedBusinesses?TheRoleofFamilies,InheritancesandBusinessHumanCapital.
JournalofLaborEconomics,25(2),289323.
8
SeeFairlie,RobertW.andBruceD.Meyer.1996.EthnicandRacialSelfEmploymentDifferencesandPossibleExplanations.
TheJournalofHumanResources,Volume31,Issue4,757793;andButler,JohnSibleyandCedricHerring.1991.Ethnicityand
EntrepreneurshipinAmerica:TowardanExplanationofRacialandEthnicGroupVariationsinSelfEmployment.Sociological
Perspectives.7994.
9
NationalEconomicResearchAssociates,Inc.2000.DisadvantagedBusinessEnterpriseAvailabilityStudy.Preparedforthe
MinnesotaDepartmentofTransportation.
10
NationalEconomicResearchAssociates,Inc.2004.DisadvantagedBusinessEnterpriseAvailabilityStudy.Preparedforthe
IllinoisDepartmentofTransportation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE6

BBCusedsimilarprobitregressionmodelstopredictbusinessownershipfrommultiple
independentorexplanatoryvariables.
11
Independentvariablesincluded:
Personalcharacteristicspotentiallylinkedtothelikelihoodofbusinessownershipage,
agesquared,maritalstatus,numberofchildreninthehousehold,numberofelderlypeople
inthehousehold,andEnglishspeakingability;
Indicatorsofeducationalattainment;
Measuresandindicatorsrelatedtopersonalfinancialresourcesandconstraintshome
ownership,homevalue,monthlymortgagepayment,dividendandinterestincome,and
additionalhouseholdincomefromaspouseorunmarriedpartner;and
Variablesrepresentingtherace/ethnicityandgenderoftheindividual.
BBCdevelopedtwomodelsusingPUMSdatafromthe20072009ACS:
AprobitregressionmodelfortheCaliforniaconstructionindustryin20072009that
included33,250observations;and
AprobitregressionmodelfortheCaliforniaengineeringindustryin20072009that
included6,161observations.
ResultsspecifictotheCaliforniaconstructionindustry.FigureF3presentsthe
coefficientsandtstatisticsfortheprobitmodelforindividualsworkingintheCalifornia
constructionindustryin20072009.Themodelindicatesthatseveralneutralfactorswere
importantandstatisticallysignificantinpredictingtheprobabilityofbusinessownershipfor
workersinthisindustry:
Olderindividualsweremorelikelytobebusinessownersbutthemarginaleffectwas
lowerfortheoldestindividuals;
Althoughhomeownershipdecreasedthelikelihoodofselfemployment,thevalueofthe
homeownedbytheworkerandhighermortgagepaymentswereassociatedwithahigher
probabilityofbusinessownership;
Greaterinterestanddividendincomeaswellasincomefromaspouseorpartnerincreased
workerslikelihoodofowningabusiness;and
Attainmentofanadvanceddegreedecreasedtheprobabilityofbusinessownership.
Aftercontrollingforraceandgenderneutralfactors,statisticallysignificantdisparitiesinrates
ofbusinessownershipremainedforAfricanAmericans,HispanicAmericans,andwomen
workingintheCaliforniaconstructionindustry.
11
Probitmodelsestimatetheeffectsofmultipleindependentorpredictorvariablesintermsofasingle,dichotomous
dependentoroutcomevariableinthiscase,businessownership.Thedependentvariableisbinary,codedas1for
individualsinaparticularindustrywhoareselfemployed;0forindividualswhoarenotselfemployed.Themodelenables
estimationoftheprobabilitythataworkerinagivenestimationsampleisselfemployed.Thestudyteamexcluded
observationswheretheCensusBureauhadimputedvaluesforthedependentvariable,businessownership.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE7

FigureF3.
Californiaconstructionindustrybusinessownershipmodel,20072009
Variable Coefficient tstatistic
Constant
Age
Agesquared
Married
Numberofchildreninhousehold
Numberofpeopleover65inhousehold
Ownshome
Homevalue($000s)
Monthlymortgagepayment ($000s)
Interestanddividendincome($000s)
Incomeofspouseorpartner($000s)
SpeaksEnglishwell
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
Female
2.3601
0.0565
0.0003
0.0241
0.0061
0.0058
0.3231
0.0006
0.0397
0.0026
0.0007
0.0396
0.0512
0.0345
0.0402
0.2196
0.2775
0.0075
0.1651
0.2471
0.0709
0.2097
0.5457
20.55 **
10.73 **
5.73 **
1.05
0.72
0.22
9.20 **
11.20 **
3.73 **
4.18 **
2.43 *
1.28
1.93
1.56
1.18
4.07 **
3.97 **
0.16
0.71
10.22 **
0.82
1.22
17.51 **
Note: *,**Denotestatisticalsignificanceatthe90%and95%confidencelevels,respectively.
TheU.S.CensusBureaumadeaslightchangetothedisabilityquestiononthe2008ACSand
asaresult,disabilitystatisticsareexcludedfromthe20072009datasetandfromthisanalysis.
Source: BBCResearch&Consultingfrom20072009ACSdata.Therawdataextractwasobtained
throughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Simulationsofbusinessownershiprates.Theprobitmodelingapproachallowedfor
simulationsofbusinessownershipratesforminoritiesandwomenasiftheyhadthesame
probabilityofselfemploymentassimilarlysituatednonHispanicwhitesandmales,
respectively.Toconductthosesimulations,BBCtookthefollowingsteps:
1. BBCperformedaprobitregressionanalysispredictingbusinessownershipusingonly
nonHispanicwhite(ornonHispanicwhitemale)constructionworkersinthedataset.
12
2. Thestudyteamthenusedthecoefficientsfromthatmodelandthemeancharacteristics
ofindividualminoritygroups(orwomen)workingintheCaliforniaconstruction
industry(i.e.,personalcharacteristics,indicatorsofeducationalattainment,and
indicatorsofpersonalfinancialresourcesandconstraints)toestimatetheprobabilityof
businessownershipofsuchagroup.
12
Thatversionofthemodelexcludedtherace/ethnicityandgenderindicatorvariables,becausethevalueofallofthose
variableswouldbethesame(i.e.,0).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE8

TheresultsofthosesimulationsyieldedestimatesofbusinessownershipratesfornonHispanic
whites(ornonHispanicwhitemales)whosharedthesamecharacteristicsofminorities(or
women)workingintheCaliforniaconstructionindustry.Highersimulatedratesindicatethat,in
reality,race/ethnicityorgendermakesitlesslikelyforminorityandwomenownedfirmsto
ownbusinessesthansimilarlysituatednonHispanicwhites(ornonHispanicwhitemales).BBC
performedthosecalculationsforonlythosegroupsforwhichrace/ethnicityorgenderwasa
statisticallysignificantnegativefactorinbusinessownership(i.e.,AfricanAmericans,Hispanic
Americans,andwomen;seeFigureF3).
FigureF4presentssimulatedbusinessownershiprates(i.e.,benchmark)forAfrican
Americans,HispanicAmericans,andnonHispanicwhitewomen,andcomparesthemtothe
actual,observedmeanprobabilityofbusinessownershipforthosegroups.Thedisparityindex
wascalculatedbytakingtheactualbusinessownershiprateforeachgroupanddividingitby
eachgroupsbenchmark,andthenmultiplyingtheresultby100.Valueslessthan100indicate
that,inreality,thegroupislesslikelytoownbusinessesthanwhatwouldbeexpectedfor
similarlysituatednonHispanicwhites(ornonHispanicwhitemales)inotherwordsthat
race/ethnicity(orgender)affectsthelikelihoodofthosegroupsowningbusinessesinthe
Californiaconstructionindustry.Similarsimulationapproacheshavebeenincorporatedinother
disparitystudiesthatcourtshavereviewed.
FigureF4.
Comparisonofactualbusinessownershipratestosimulatedrates
forCaliforniaconstructionworkers,20072009
Selfemploymentrate Disparity index
Group Actual Benchmark (100 parity)
AfricanAmerican 19.1% 26.2% 73
HispanicAmerican 15.3% 21.9% 70
Whitefemale 17.2% 32.9% 52
Note: Asthebenchmarkfigurecanonlybeestimatedforrecordswithanobserved(ratherthanimputed)
dependentvariable,comparisonismadewithonlythissubsetofthesample.Forthisreason,actualself
employmentratesmaydifferslightlyfromthoseinFigureF1.
Source: BBCResearch&Consultingfromstatisticalmodelsof20072009ACSdata.Therawdataextractwas
obtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Comparisonsoftheactual,observedbusinessownershiprateofAfricanAmericansinthe
Californiaconstructionindustrywiththebenchmarkbasedonsimulatedbusinessownership
ratesofsimilarlysituatednonHispanicwhiteconstructionworkersshowedthatAfrican
Americansownbusinessesatabout73percentoftheratethatwouldbeexpectedofnon
Hispanicwhiteconstructionworkerswhosharethesamepersonal,financial,andeducational
characteristics.HispanicAmericans(disparityindexof70)alsoownedbusinessesatrates
substantiallylowerthanwhatwouldbeexpectedbasedonthesimulatedbusinessownership
ratesofsimilarlysituatednonHispanicwhiteconstructionworkers.Whitewomen(disparity
indexof52)ownbusinessesatabouthalftheratethatwouldbeexpectedbasedonthe
simulatedbusinessownershipratesofsimilarlysituatednonHispanicwhitemaleconstruction
workers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE9

ResultsspecifictotheCaliforniaengineeringindustry.BBCdevelopedaseparate
businessownershipmodelfortheCaliforniaengineeringindustrythatwassimilartothemodel
thatthestudyteamdevelopedfortheconstructionindustry.FigureF5presentsthecoefficients
andtstatisticsfromtheprobitmodelpredictingbusinessownershipintheCalifornia
engineeringindustryin20072009.Thefollowingneutralfactorswerestatisticallysignificant
predictorsofbusinessownershipfortheengineeringindustryinCaliforniain20072009:
Olderindividualsweremorelikelytobebusinessowners;
Homeownershipdecreasedthelikelihoodofselfemployment,buthigherhomevalues(for
homeowners)wereassociatedwithagreaterlikelihoodofbusinessownership;and
Alargernumberofchildreninthehomewasassociatedwithahigherlikelihoodof
businessownershipin20072009.
Whenstatisticallycontrollingforraceandgenderneutralfactors,theregressionmodelforthe
CaliforniaengineeringindustryindicatedthatHispanicAmericans,AsianPacificAmericans,
SubcontinentAsianAmericans,andwomenworkingintheindustrywerelesslikelythan
nonHispanicwhites(ormen)toownbusinesses.AfricanAmericanshadmuchlowerratesof
businessownershipthannonminorities,buttheAfricanAmericanterminthemodelwasnot
statisticallysignificant,perhapsduetosmallersamplesizesfor20072009.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE10

FigureF5.
Californiaengineeringindustrybusinessownershipmodel,20072009
Variable Coefficient tstatistic
Constant
Age
Agesquared
Married
Numberofchildreninhousehold
Numberofpeopleover65inhousehold
Ownshome
Homevalue($000s)
Monthlymortgagepayment ($000s)
Interestanddividendincome($000s)
Incomeofspouseorpartner($000s)
SpeaksEnglishwell
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
AfricanAmerican
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
NativeAmerican
Otherraceminority
Female
2.3804
0.0459
0.0002
0.0580
0.0542
0.0182
0.3066
0.0005
0.0236
0.0023
0.0005
0.4913
0.3955
0.1591
0.1859
0.2181
0.4695
0.2666
0.7764
0.2323
0.1848
0.0000
0.2906
5.33 **
3.15 **
0.99
0.81
2.29 *
0.29
2.80 **
3.87 **
1.35
1.72
1.34
1.57
1.57
1.62
2.07
2.10
1.96
3.41 **
4.13 **
2.82 **
0.66
0.00 **
5.25 **
Note: *,**Denotestatisticalsignificanceatthe90%and95%confidencelevels,respectively.
Source: BBCResearch&Consultingfrom20072009ACSdata.Therawdataextractwasobtainedthrough
theIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Simulationsofbusinessownershiprates.Thestudyteamalsosimulatedbusinessownership
ratesintheCaliforniaengineeringindustryusingthesameapproachasitusedforthe
constructionindustry.FigureF6presentsactualandsimulated(benchmark)business
ownershipratesforminoritiesandwhitewomenintheCaliforniaengineeringindustry.BBC
performedthosecalculationsforwhichrace/ethnicityorgenderwasastatisticallysignificant
negativefactorinbusinessownership(i.e.,AfricanAmericans,HispanicAmericans,andwomen;
seeFigureF5).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE11

FigureF6.
Comparisonofactualbusinessownershipratestosimulatedrates
forCaliforniaworkersintheengineeringindustry,20072009
Group
Selfemploymentrate
Actual Benchmark (100 parity)
Disparity index
AsianPacificAmerican
SubcontinentAsianAmerican
HispanicAmerican
Whitefemale
11.6% 16.8%
5.1% 16.4%
8.4% 11.9%
11.5% 17.7%
69
31
71
65
Note: Asthebenchmarkfigurecanonlybeestimatedforrecordswithanobserved(ratherthanimputed)
dependentvariable,comparisonismadewithonlythissubsetofthesample.Forthisreason,actual
selfemploymentratesmaydifferslightlyfromthoseinFigureF2.
Source: BBCResearch&Consultingfromstatisticalmodelsof20072009ACSdata.Therawdataextractwas
obtainedthroughtheIPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
SimulatedbusinessownershipratesindicatedthatHispanicAmericansworkingintheindustry
ownengineeringfirmsat71percentoftherateobservedforsimilarlysituatednonHispanic
whites(i.e.,nonHispanicwhiteswhosharethesamepersonal,financial,andeducational
characteristicsofHispanicAmericans).Therewereabout69percentasmanyAsianPacific
Americanownedbusinessesaswouldbeexpectedbasedonthesimulatedbusinessownership
ratesofsimilarlysituatednonHispanicwhites.SubcontinentAsianAmericanshadanactual
businessownershiprateof5percent,comparedtoabenchmarkof16percentlessthanone
thirdtherateofsimilarlysituatednonHispanicwhites.
Approximately12percentofnonHispanicwhitewomenintheCaliforniaengineeringindustry
werebusinessownersin20072009comparedwithabenchmarkbusinessownershiprateof
about17percent(adisparityindexof65).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE12

SummaryofBusinessOwnershipintheConstructionandEngineering
Industries
DisparitiesinbusinessownershipwerepresentintheCaliforniaconstructionindustry:
Inboth2000and20072009,businessownershipratesforAfricanAmericansandHispanic
AmericansweresubstantiallylowerthanthatofnonHispanicwhites.Businessownership
rateswerelowerforotherminoritygroupsaswell,butdifferenceswerenotstatistically
significantinpartduetosmallersamplesizesforthosegroups.
Afterstatisticallycontrollingforanumberofneutralfactorsaffectingbusinessownership,
substantiallyfewerAfricanAmericansandHispanicAmericansownedfirmsthanwouldbe
expectediftheyownedbusinessesatthesamerateassimilarlysituatednonHispanic
whitesin20072009.
In2000andin20072009,womenworkinginthelocalconstructionindustryhad
substantiallylowerratesofbusinessownershipthanmen.Aftercontrollingforanumberof
raceandgenderneutralfactorsusing20072009data,substantialdisparitiespersistedin
businessownershipratesforwomen.
BBCalsoidentifieddisparitiesinbusinessownershipratesintheCaliforniaengineeringindustry:
MostminoritiesworkingintheCaliforniaengineeringindustrywereselfemployedat
substantiallylowerratesthannonHispanicwhitesinboth2000and20072009,including
AfricanAmericans,AsianPacificAmericans,andHispanicAmericansin2000.Thosesame
groupsandSubcontinentAsianAmericanshadlowerratesofbusinessownershipthan
nonHispanicwhitesin20072009.
In2000andin20072009,womenworkingintheengineeringindustryinCaliforniahad
substantiallylowerselfemploymentratesthanmen.
BBCusedregressionmodelstoinvestigatethepresenceofrace/ethnicityandgender
baseddisparitiesinbusinessownershipratesin20072009afteraccountingfortheeffects
ofraceandgenderneutralfactors.Theresultsindicatedsubstantialdisparitiesfor
HispanicAmericans,AsianPacificAmericans,SubcontinentAsianAmericans,andwomen.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXF,PAGE13

APPENDIXG.
AccesstoCapitalforBusinessFormation
andSuccess
Accesstocapitalisoneofthefactorsresearchershaveexaminedwhenstudyingbusiness
formationandsuccess.Ifdiscriminationexistsincapitalmarkets,minoritiesandwomenmay
havedifficultyacquiringthecapitalnecessarytostart,operate,orexpandbusinesses.
1, 2
Businessownershipisaffectedbythecapitalapotentialbusinessownerhastostartabusiness,
asdiscussedinAppendixF.Researchershavealsofoundthattheamountofbusinessstartup
capitalcanaffectlongtermsuccess.
3
Minorityandwomenownedfirms,onaverage,haveless
startupcapitalthanmajorityownedfirmsandmaleownedfirms:
In2007,30percentofmajorityownedbusinessesrespondingtonationalU.S.Census
Bureausurveyindicatedthattheyhadstartupcapitalof$25,000ormore.
Only17percentofAfricanAmericanownedbusinessesindicatedthatlevelofstartup
capitalanddisparitiesinstartupcapitalwereidentifiedforeachotherrace/ethnic
minoritygroupexceptforAsianAmericans.
4
Alsoin2007,19percentoffemaleownedfirmsreportedstartupcapitalof$25,000or
morecomparedwith32percentofmaleownedfirms(notincludingfirmsthatwere
equallyownedbymenandwomen).
Disparitiesinstartupcapitalcanhavelongtermconsequences,ascananyrace,ethnicityor
genderbaseddiscriminationinaccesstobusinessloansafterafirmisstarted.
5
AppendixG
exploresaccesstobusinesscapital,whichrelatescloselytomattersdiscussedinAppendixFand
AppendixH.
1
Forexample,see:Mitchell,KarlynandDouglasK.Pearce.2005.AvailabilityofFinancingtoSmallFirmsUsingtheSurveyof
SmallBusinessFinances.U.S.SmallBusinessAdministration,OfficeofAdvocacy.57.
2
Fairlie,RobertW.andAliciaM.Robb.2010.RaceandEntrepreneurialSuccess.Cambridge:MITPress.
3
Ibid.
4
Businessownerswereasked,Whatwasthetotalamountofcapitalusedtostartoracquirethisbusiness?(Capitalincludes
savings,otherassets,andborrowedfundsofowner(s)).FromU.S.CensusBureau,StatisticsforAllU.S.FirmsbyTotalAmount
ofCapitalUsedtoStartorAcquiretheBusinessbyIndustry,Gender,Ethnicity,Race,andVeteranStatusfortheU.S.:2007
SurveyofBusinessOwners
http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=SBO_2007_00CSCB16&prodType=table.
5
Fairlie,RobertW.andAliciaM.Robb.2010.RaceandEntrepreneurialSuccess.Cambridge:MITPress.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE1

AppendixGfirstpresentsinformationabouthomeownershipandmortgagelending,because
homeequitycanbeanimportantsourceofcapitaltostartandexpandbusinesses.Theappendix
thenturnstobusinessloans,assessingwhetherminoritiesandfemalesexperiencedifficulty
acquiringbusinesscapital.
HomeownershipandMortgageLending
BBCanalyzedhomeownershipandthemortgagelendingindustrytoexploredifferencesacross
race/ethnicityandgenderthatmayleadtodisparitiesinaccesstocapital.
Homeownership.Wealthcreatedthroughhomeownershipcanbeanimportantsourceof
capitaltostartorexpandabusiness.
6
Anybarrierstohomeownershipandhomeequitygrowth
forminoritiesorwomencanaffectbusinessopportunitiesbyconstrainingtheiravailable
funding.Similarly,anybarrierstoaccessinghomeequitythroughhomemortgagescanalso
affectavailablecapitalforneworexpandingbusinesses.Insum:
Ahomeisatangibleassetthatprovidesborrowingpower;
7
Wealththataccruesfromhousingequityandtaxsavingsfromhomeownershipcontributes
tocapitalformation;
8
Nexttobusinessloans,mortgageloanshavetraditionallybeenthesecondlargestloantype
forsmallbusinesses;
9
and
Homeownershipisassociatedwithanestimated30percentreductionintheprobabilityof
loandenialforsmallbusinesses.
10
HomeequityasasourceofbusinesscapitalisespeciallyimportantinCaliforniawhere,
historically,housepriceappreciationhascausedhomevaluetobeasubstantialportionofmany
householdswealth.
11
Thestudyteamanalyzedhomeownershipratesandhomevaluesbeforeconsideringloandenial
andsubprimelending.
6
Thehousingandmortgagecrisisbeginninginlate2006hassubstantiallyimpactedtheabilityofsmallbusinessestosecure
loansthroughhomeequity.Laterinthisappendix,BBCdiscussestheconsequencestosmallbusinessesandMBE/WBEs.
7
Nevin,Allen.2006.HomeownershipinCalifornia:ACBIAEconomicTreatise.CaliforniaBuildingIndustryAssociation.2.
8
Jackman,MaryR.andRobertW.Jackman1980.RacialInequalitiesinHomeOwnership.SocialForces.58.12211234.
9
Berger,AllenN.andGregoryF.Udell.1998.TheEconomicsofSmallBusinessFinance:TheRolesofPrivateEquityandDebt
MarketsintheFinancialGrowthCycle.JournalofBankingandFinance.22.
10
Cavalluzzo,KenandJohnWolken.2005.SmallBusinessLoanTurndowns,PersonalWealthandDiscrimination.Journalof
Business.78:21532178.
11
Myers,DowellandXinGao.2004.TrajectoriesofHomeownershipinCalifornia,1980to2000,and2000to2030.
CaliforniaHousingFuturesresearchprogram.FannieMaeFoundation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE2

Homeownershiprates.Manystudiesdocumentpastdiscriminationinthenationalhousing
market.TheUnitedStateshasahistoryofrestrictiverealestatecovenantsandpropertylaws
thataffecttheownershiprightsofminoritiesandwomen.
12
Inthepast,forexample,awomans
participationinhomeownershipwassecondarytothatofherhusbandandparents.
13
BBCused
2000Censusand20072009ACSdatatoexaminehomeownershipratesinCaliforniaandinthe
UnitedStates.FigureG1presentsratesofhomeownershipforminoritygroupsandnon
Hispanicwhites.
AsshowninFigureG1,approximatelytwothirdsofnonHispanicwhitehouseholdsowned
homesinCaliforniain2000,andhomeownershipratesweremuchlowerforminorities.
Approximately39percentofAfricanAmericanhouseholdswerehomeownersin2000;
About44percentofHispanicAmericanhouseholdswerehomeownersin2000;
Thehomeownershipratesin2000forSubcontinentAsianAmericansandAsianPacific
Americanswere47percentand55percent,respectively;and
NativeAmericanhouseholdsownedhomesatarateof51percent.
Generally,ratesofhomeownershipwerelowerinCaliforniathaninthenationasawhole,in
partduetothehistoricallyhighpriceofhomesinthestate.
14
12
Ladd,HelenF.1982.EqualCreditOpportunity:WomenandMortgageCredit.TheAmericanEconomicReview.
72:166170.
13
Card,Emily.1980.Women,HousingAccess,andMortgageCredit.Signs.5:215219.
14
Quigley,JohnM.andStevenRaphael.2004.RegulationandtheHighCostofHousinginCalifornia.UniversityofCalifornia,
Berkeley.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE3

FigureG1.
Homeownership
rates,2000and
20072009
Note:
Thesampleuniverseisall
households.
**Denotesthatthe
differenceinproportions
fromnonHispanicwhitefor
thegivenyearisstatistically
significantatthe95%
confidencelevel.
Source:
BBCResearch&Consulting
from2000U.S.Censusand
20072009ACSdata.The
rawdataextractwas
obtainedthroughtheIPUMS
programoftheMN
PopulationCenter:
http://usa.ipums.org/usa/.
Disparitiesinhomeownershipratesbetweenracial/ethnicminoritiesandnonminoritieswere
alsoapparentin20072009.Althoughhomeownershipratesformostminoritygroupsrose
between2000and20072009inCalifornia,theywerestillbelowthatofnonHispanicwhites
(65%).
15
Lowerratesofhomeownershipmay,toanextent,reflectlowerincomesforminorities.
Thatrelationshipmaybeselfreinforcing,aslowwealthputsindividualsatadisadvantagein
becominghomeowners,whichhashistoricallybeenapathtobuildingwealth.Anolderstudy
foundstatisticallysignificantresultsindicatingthattheprobabilityofhomeownershipis
considerablylowerforAfricanAmericansthanitisforcomparablenonHispanicwhites
throughouttheUnitedStates.
16
A2001studyinLosAngelesfounddifferentresults.Probabilities
ofhomeownershipforAfricanAmericanhouseholdsinsouthcentralLosAngelesandSan
BernardinoCountywerefoundtobeidenticaltononHispanicwhitehouseholdsafter
accountingfortypesofincome.
17
15
Althoughnotpresentedinthisreport,thestudyteamalsoexaminedhomeownershipratesforheadsofhouseholdsworking
intheconstructionandengineeringindustries.Eachminoritygroupintheconstructionindustryandeachminoritygroup
exceptAsianAmericansintheengineeringindustryhadalowerrateofhomeownershipthannonHispanicwhitesin
California.
16
Jackman.1980.RacialInequalitiesinHomeOwnership.
17
Gabriel,StuartandGaryPainter.2001.PathwaystoHomeownership:AnAnalysisoftheResidentialLocationand
HomeownershipChoicesofBlackHouseholdsinLosAngeles.USCFinance&BusinessEcon.WorkingPaperNo.0122.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE4

Homevalues.Researchhasfoundhomeownershipandhomevaluestobedirectdeterminants
ofavailablecapitaltoformorexpandbusinesses.
18
Using2000Censusand20072009ACSdata,
BBCcomparedmedianhomevaluesbyracial/ethnicgroup.FigureG2presentsresultsfor
CaliforniaandtheUnitedStatesin2000.
FigureG2.
Medianhomevalues,2000
Note: Thesampleuniverseisallowneroccupiedhousingunits.
Source: BBCResearch&Consultingfrom2000U.S.Censusdata. TherawdataextractwasobtainedthroughtheIPUMSprogramoftheMN
PopulationCenter:http://usa.ipums.org/usa/.
In2000,themedianhomevalueofhomesownedbynonHispanicwhitesinCaliforniawas
$220,900,substantiallygreaterthanthemedianvalueofhomesownedbyAfricanAmericans
($162,800),HispanicAmericans($151,500),andNativeAmericans($145,800).Onaverage,
AsianPacificAmericansandSubcontinentAsianAmericansownedhomesofgreatervaluethan
nonHispanicwhites.
18
Fairlie,RobertW.andHarryA.Krashinky.2006.LiquidityConstraints,HouseholdWealth,andEntrepreneurship
Revisited.IZADiscussionPaper.No.2201.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE5

FigureG3presentsmedianhomevaluesbyracial/ethnicgroupsinCaliforniaandintheU.S.
basedon20072009ACSdata.Similarto2000data,AfricanAmericans,HispanicAmericans,and
NativeAmericanshadsubstantiallylowermedianhomevaluesthannonHispanicwhitesin
California.MedianhomevaluesforAsianPacificAmericansandSubcontinentAsianAmericans
werehigherthannonHispanicwhitesinCalifornia.ThesamewastruefortheUnitedStatesasa
whole.
FigureG3.
Medianhomevalues,20072009
Note: Thesampleuniverseisallowneroccupiedhousingunits.
Source: BBCResearch&Consultingfrom20072009AmericanCommunitySurveydata. TherawdataextractwasobtainedthroughtheIPUMS
programoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Mortgagelending.Minoritiesmaybedeniedopportunitiestoownhomes,topurchasemore
expensivehomes,ortoaccessequityintheirhomesiftheyarediscriminatedagainstwhen
applyingforhomemortgages.Inarecentlawsuit,BankofAmericapaid$335milliontosettle
allegationsthatitsCountrywideFinancialunitdiscriminatedagainstAfricanAmericanand
HispanicAmericanborrowersbetween2004and2008.ThecasewasbroughtbytheSecurities
andExchangeCommissionafterfindingevidenceofstatisticallysignificantdisparitiesbyrace
andethnicityamongCountrywideFinancialcustomers.
19
BBCexploredmarketconditionsformortgagelendinginCaliforniaandinthenationasawhole.
ThebestavailablesourceofinformationconcerningmortgagelendingcomesfromHMDAdata,
whichcontaininformationonmortgageloanapplicationsreceivedbyfinancialinstitutions,
19
Savage,Charlie.December22,2011.$335MillionSettlementonCountywideLendingBias.NYTimes.com.Availableonline
athttp://www.nytimes.com/2011/12/22/business/ussettlementreportedoncountrywidelending.html
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE6

savingsbanks,creditunions,andsomemortgagecompanies.
20
Thosedataincludeinformation
aboutthelocation,dollaramount,andtypesofloansmade,aswellasrace/ethnicity,income,
andcreditcharacteristicsofallloanapplicants.Thedataareavailableforhomepurchases,loan
refinances,andhomeimprovementloans.
BBCexaminedHMDAstatisticsprovidedbytheFederalFinancialInstitutionsExamination
Council(FFIEC)onconventionalloandenialratesforhighincomeborrowers.Conventional
loansareloansnotinsuredbyagovernmentprogram.Highincomeborrowersarethose
householdswith120percentormoreoftheU.S.DepartmentofHousingandUrban
Development(HUD)areamedianfamilyincome.
21
Loandenialratesarecalculatedasthe
percentageofmortgageloanapplicationsthatweredenied,excludingapplicationsterminated
bythepotentialborrowers.
BBCexaminedmortgagedenialratesfor2006,2009,and2010.Although2010wasthemost
recentyearforwhichHMDAdatawereavailable,the2006datarepresentamorecompletedata
setfrombeforetherecentmortgagecrisis.Manyoftheinstitutionsthatoriginatedloansin2006
werenolongerinbusinessbythe2010reportingdateforHMDAdata.
22
Forexample,the2006
HMDAdataincludeinformationaboutnearly5millionloanapplicationsinCaliforniaprocessed
byapproximately1,700lenders.The2010HMDAdataforCaliforniaincludeinformationabout
2millionloanapplicationsprocessedbyabout1,300lenders.Inaddition,thepercentageof
governmentinsuredloans,whichwerenotincludedinthestudyteamsanalysis,increased
dramaticallybetween2006and2010,thusdecreasingtheproportionoftotalloansthatthe
studyteamanalyzedinthe2010data.
23
FigureG4presentsloandenialresultsforCaliforniaandtheU.S.in2006,2009,and2010.
ThosedatashowhigherdenialratesforminorityhighincomehouseholdsthanfornonHispanic
whitehighincomehouseholds.AmongAfricanAmericanhighincomehouseholdsapplyingfor
mortgagesinCalifornia2010,15percenthadtheirapplicationsdenied,muchhigherthanthe10
percentfoundfornonHispanicwhitehighincomehouseholds.Loandenialratesin2010were
20
Financialinstitutionswererequiredtoreport2010HMDAdataiftheyhadassetsofmorethan$39million($35millionfor
2006),haveabranchofficeinametropolitanarea,andoriginatedatleastonehomepurchaseorrefinanceloaninthe
reportingcalendaryear.MortgagecompaniesarerequiredtoreportHMDAiftheyareforprofitinstitutions,hadhome
purchaseloanoriginationsexceeding10percentofallloanobligationsinthepastyear,arelocatedinanMetropolitan
StatisticalArea(ororiginatedfiveormorehomepurchaseloansinanMSA)andeitherhadmorethan$10millioninassetsor
madeatleast100homepurchaseorrefinanceloansinthecalendaryear.
21
Themedianfamilyincomein2010wasabout$61,000fortheUnitedStatesand$65,000forCalifornia(in2010dollars).
Medianfamilyincomefor2006wasabout$63,000fortheUnitedStatesand$70,000forCalifornia(in2010dollars).Source:
U.S.CensusBureau,2010and2006AmericanCommunitySurveys.
22
AccordingtoanarticlebytheFederalReserve,thevolumeofreportedloanapplicationsandoriginationsfellsharplyfrom
2007to2008afterpreviouslyfallingbetween2006and2007.SeeAvery,Brevoort,andCanner,The2008HMDAData:The
MortgageMarketduringaTurbulentYear.Availableonline:
http://www.federalreserve.gov/pubs/bulletin/2009/pdf/hmda08draft.pdf.
23
Loansinsuredbygovernmentprogramshavesurgedsince2006.In2006,about10percentoffirstlienhomeloanswere
insuredbyagovernmentprogram.Morethanhalfofhomeloanswereinsuredbygovernmentin2009.Source:The2009
HMDAData:TheMortgageMarketinaTimeofLowInterestRatesandEconomicDistress,FederalReserveBulletin.December
2010,ppA39A77.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE7

alsohigherforNativeAmericans(19%)andHispanicAmericans(15%)comparedwithnon
Hispanicwhites.
Datafor2006showhigherdenialratesforallgroupsinCaliforniacomparedwith2010.There
werelargedisparitiesinloandenialratesforAfricanAmerican,HispanicAmericanandNative
AmericanhighincomeapplicantscomparedwithnonHispanicwhiteapplicants.Theloan
denialrateforAsianAmericanhighincomeapplicantswasalsohigherthannonHispanicwhite
highincomehouseholdsin2006.
FigureG4.
Denialratesof
conventionalpurchase
loanstohighincome
households,
2006,2009and2010
Note:
Highincomeborrowersarethose
householdswith120%ormorethanthe
HUDareamedianfamilyincome(MFI).
Source:
FFIECHMDAdata2006,2009and2010.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE8

Additionalresearch.Severalnationalstudieshaveexamineddisparitiesinloandenialratesand
loanamountsforminoritiesinthepresenceofotherinfluences.Examplesincludethefollowing:
AstudybytheFederalReserveBankofBostonisoneofthemostcitedstudiesofmortgage
lendingdiscrimination.
24
Itwasconductedusingthemostcomprehensivesetofcredit
characteristicseverassembledforastudyonmortgagediscrimination.
25
Thestudy
providedpersuasiveevidencethatlendersintheBostonareadiscriminatedagainst
minoritiesin1990.
26
UsingtheFederalReserveBoards1983SurveyofConsumerFinancesandthe1980Census
ofPopulationandHousingdata,logitstatisticalanalysisrevealedthatminorityhouseholds
wereonethirdaslikelytoreceiveconventionalloansasnonHispanicwhitehouseholds
aftertakingintoaccountfinancialanddemographicvariables.
27
FindingsfromaMidweststudyindicatearelationshipbetweenraceandboththenumber
andsizeofmortgageloans.Datamatchedonsocioeconomiccharacteristicsrevealedthat
AfricanAmericanborrowersacross13censustractsreceivedsignificantlyfewerloansand
ofsmallsizescomparedtotheirwhitecounterparts.
28
However,otherstudieshavefoundthatdifferencesinpreferencesforFederalHousing
Administration(FHA)loansmortgageloansthatareinsuredbythegovernmentversus
conventionalloansamongracialandethnicgroupsmaypartlyexplaindisparitiesfoundin
conventionalloanapprovalsbetweenminoritiesandnonminorities.
29
Severalstudieshave
foundthat,historically,minorityborrowersarefarmorelikelytoseekFHAloansthan
comparablenonHispanicwhiteborrowersacrossdifferentincomeandwealthlevels.The
insuranceonFHAloansprotectsthelender,buttheborrowercanbedisadvantagedbyhigher
borrowingcosts.
30,31
24
Munnell,AliciaH.,GeoffreyTootell,LynnBrowneandJamesMcEneaney.1996.MortgageLendinginBoston:Interpreting
HMDAData.TheAmericanEconomicReview.86:2553.
25
Ladd,HelenF.1998.EvidenceonDiscriminationinMortgageLending.TheJournalofEconomicPerspectives.12:4162.
26
Yinger,John.1995.ClosedDoors,OpportunitiesLost:TheContinuingCostsofHousingDiscrimination.NewYork:RussellSage
Foundation,71.
27
Canner,GlennB.,StuartA.GabrielandJ.MichaelWoolley.1991.Race,DefaultRiskandMortgageLending:AStudyofthe
FHAandConventionalLoanMarkets.SouthernEconomicJournal.58:249262.
28
Leahy,PeterJ.1985.AreRacialFactorsImportantfortheAllocationofMortgageMoney?:AQuasiExperimentalApproach
toanAspectofDiscrimination.AmericanJournalofEconomicsandSociology.44:185196.
29
Canner.1991.Race,DefaultRiskandMortgageLending:AStudyoftheFHAandConventionalLoanMarkets.
30
Yinger.1995.ClosedDoors,OpportunitiesLost:TheContinuingCostsofHousingDiscrimination.80.
31
Seedefinitionofsubprimeloansdiscussedonthefollowingpage.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE9

StudiesonmortgageloandiscriminationspecifictoCaliforniaaremorelimited.
HMDAdataforCaliforniarevealeddisparitiesinprimeandsubprimelendingforAfrican
American,HispanicAmericanandNativeAmericanapplicants.Differencesextendedacross
allMSAs.
32
AnolderstudyusingHMDAdatainSacramentorevealedthatlendinglevelswerelowin
minorityconcentratedareasbuttheprimarydeterminantoflendingcouldbeexplainedby
socioeconomicstatusmeasuressuchasmedianhouseholdincome.Inastepwise
regressionmodelthatcontrolledforsocioeconomicstatusmeasures,ethnicityprovided
littleexplanationforvaryinglevelsofmortgagelending.
33
ApairedtestingapproachrevealedadversetreatmentofAfricanAmericansandHispanics
inLosAngelesinspecificloanapplicationcases.However,theoverallpatternoftreatment
observedofferedlittleevidenceofsystemicvariationinthetreatmentofAfricanAmerican
andHispanicAmericanborrowersrelativetononHispanicwhiteborrowersinLos
Angeles.ThestudyalsofoundmoreencouragementofminoritiestopursueFHAloansthan
ofnonHispanicwhites.
34
Subprimelending.Loandenialisonlyoneofseveralwaysminoritiesmightbediscriminated
againstinthehomemortgagemarket.Mortgagelendingdiscriminationcanalsooccurthrough
higherfeesandinterestrates.Thehousingmarketprovidesauniqueenvironmentforsuch
typesofdiscriminationthroughfeesassociatedwithvariousloantypes.
Untilrecentyears,oneofthefastestgrowingsegmentsofthehomemortgageindustrywas
subprimelending.From1994through2003,subprimemortgageactivitygrewby25percent
peryearandaccountedfor$330billionofU.S.mortgagesin2003,upfrom$35billionadecade
earlier.In2006,subprimeloansrepresentedaboutonefifthofallmortgagesintheUnited
States.
35
Withhigherinterestratesthanprimeloans,subprimeloanswerehistoricallymarketed
tocustomerswithblemishedorlimitedcredithistorieswhowouldnottypicallyqualifyfor
primeloans.Overtime,subprimeloansalsobecameavailabletohomeownerswhodidnotwant
tomakeadownpayment,didnotwanttoprovideproofofincomeandassets,orwantedto
purchaseahomewithacostabovethatforwhichtheywouldqualifyfromaprimelender.
36
Becauseofhigherinterestratesandadditionalcosts,subprimeloansaffectedhomeowners
abilitytogrowhomeequitywhileincreasingtheirriskofforeclosure.
32
Gee,Peter.2004.ThePriceofCredit:PrimeandSubprimeLendinginCalifornia2004.TheGreenliningInstitute.
33
Dingemans,Dennis.1979.RedliningandMortgageLendinginSacramento.AnnalsoftheAssociationofAmerican
Geographers.69:225239.
34
Ross,Stephen,MargeryAustinTurner,ErinGodfreyandRobinR.Smith.2005.MortgageLendinginChicagoandLos
Angeles:APairedTestingStudyofthePreApplicationProcess.UniversityofConnecticutDepartmentofEconomics.Working
PaperSeries.
35
Avery,Brevoort,andCanner,The2006HMDAData.FederalReserveBulletin,December2007,pp.A73A109.
36
Gerardi,Shapiro,andP.Willen.2008.SubprimeOutcomes:RiskyMortgages,HomeownershipExperiences,and
Foreclosure.FederalReserveBankofBoston.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE10

Althoughthereisnostandarddefinitionofasubprimeloan,thereareseveralcommonlyused
approachestoexaminingratesofsubprimelending.BBCusedaratespreadmethodin
whichsubprimeloansareidentifiedasthoseloanswithsubstantiallyaboveaverageinterest
ratestomeasureratesofsubprimelendingin2006,2009,and2010.
37
Becauselending
patternsandborrowermotivationsdifferdependingonthetypeofloanbeingsought,thestudy
teamseparatelyconsideredhomepurchaseloansandrefinanceloans.Patternsinsubprime
lendingdidnotdiffersubstantiallybetweenthedifferenttypesofloans.
FigureG5showsthepercentofconventionalhomepurchaseloansthatweresubprimein
CaliforniaandtheUnitedStates,basedon2006,2009,and2010HMDAdata.Theratesof
subprimelendingin2009and2010weredramaticallyloweroverallthanin2006duetothe
collapseofthemortgagelendingmarketinthelate2000s.
FigureG5.
Percentofconventional
homepurchaseloans
thatweresubprime,
2006,2009,and2010
Source:
FFIECHMDAdata2006,2009and
2010.
37
PriortoOctober2009,firstlienloanswereidentifiedassubprimeiftheyhadanAPR3.0percentagepointsorgreaterthan
thefederaltreasurysecurityrateoflikematurity.AsofOctober2009,ratespreadsinHMDAdatawerecalculatedasthe
differencebetweenAPRandAveragePrimeOfferRate,withsubprimeloansdefinedas1.5percentagepointsofratespreador
more.BBCidentifiedsubprimeloansaccordingtothesemeasuresinthecorrespondingtimeperiods.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE11

InCaliforniain2006,2009,and2010,AfricanAmerican,HispanicAmerican,andNative
Americanborrowersweremorelikelytoreceivesubprimehomepurchaseloansthannon
Hispanicwhites.
In2006,18percentofhomepurchaseloansissuedtononHispanicwhitesinwere
subprime
Incontrast,53percentofhomepurchaseloansthatwereissuedtoAfricanAmericanswere
subprime.
Similarly,48percentofhomepurchaseloansthatwereissuedtoHispanicAmericansand
33percentofhomepurchaseloansissuedtoNativeAmericansweresubprime.
Thosesubprimelendingpatternswerealsoobservedin2009and2010.In2010,1.7percentof
homepurchaseloansissuedtononHispanicwhitesweresubprimecomparedto2.3percentof
homepurchaseloansissuedtoAfricanAmericans,3.8percentofhomepurchaseloansissuedto
HispanicAmericans,and6.0percentofhomepurchaseloansissuedtoNativeAmericans.
AsianAmericanswhoappliedforhomepurchaseloansinCaliforniaweremorelikelythannon
Hispanicwhitestobeissuedsubprimeloansin2006butlesslikelytobeissuedsubprimeloans
in2009and2010.
FigureG6presentsthepercentageofhomerefinanceloansthatweresubprimeinCalifornia
andtheUnitedStates.Aswithhomepurchaseloans,theratesofsubprimelendingin2009and
2010weredramaticallylowerforrefinanceloansthanin2006duetothecollapseofthe
mortgagelendingmarketinthelate2000s.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE12

FigureG6.
Percentof
conventionalrefinance
loansthatwere
subprime,2006,2009,
and2010
Source:
FFIECHMDAdata2006,2009and
2010.
AmongborrowersreceivingrefinanceloansinCaliforniain2006,2009,and2010,African
Americans,HispanicAmericans,andNativeAmericansweremorelikelytoreceivesubprime
refinanceloansthannonHispanicwhites.In2006,about37percentofrefinanceloansissuedto
AfricanAmericans,33percentofrefinanceloansissuedtoHispanicAmericans,and27percent
ofrefinanceloansissuedtoNativeAmericansweresubprime.About20percentofrefinance
loansissuedtoAsianAmericansin2006weresubprime.Incontrast,only18percentof
refinanceloansissuedtononHispanicwhitesin2006weresubprime.
By2010,subprimeloansmadeupamuchsmallerproportionofthetotalconventionalhome
refinanceloansissuedinthatyear(inCaliforniaandtheUnitedStates).Thedecreasein
subprimerefinanceloanswasevidentforallracialandethnicgroupsinCalifornia.African
American,HispanicAmerican,andNativeAmericanhouseholdsthatreceivedrefinanceloansin
2010werestillsomewhatmorelikelythannonHispanicwhitestobeissuedasubprimeloan.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE13

Additionalresearch.Someevidencesuggeststhatlenderssoughtoutandofferedsubprime
loanstoindividualswhooftenwouldnotbeabletopayofftheloan,aformofpredatory
lending.
38
Furthermore,someresearchhasfoundthatmanyrecipientsofsubprimeloans
includinghomeownersinCaliforniacouldhavequalifiedforprimeloans.
39
Previousstudies
ofsubprimelendingsuggestthatpredatorylendershavedisproportionatelytargetedminorities.
A2001HUDstudyusing1998HMDAdatafoundthatsubprimeloansweredisproportionately
concentratedinAfricanAmericanneighborhoodscomparedwithwhiteneighborhoods,even
aftercontrollingforincome.
40
Forexample,borrowersinupperincomeAfricanAmerican
neighborhoodsweresixtimesmorelikelytorefinancewithasubprimeloanthanborrowersin
upperincomewhiteneighborhoods.
Implicationsoftherecentmortgagelendingcrisis.Theturmoilinthehousingmarketsincelate
2006hasbeenfarreaching,resultinginthelossofhomeequity,decreaseddemandforhousing,
andincreasedratesofforeclosure.
41
Muchoftheblamehasbeenplacedonriskypracticesinthe
mortgageindustryincludingsubstantialincreasesinsubprimelending.Asdiscussedabove,the
numberofsubprimemortgagesincreasedatanextraordinaryratebetweenthemid1990sand
mid2000s.Thosehighcost,highinterestloansincreasedfrom8percentoforiginationsin
2003to20percentin2005and2006.
42
In2005,subprimeloansrepresentedabout28percent
ofallmortgageloansoriginatedintheRiversideMSAandabout21percentofallmortgageloans
originatedintheLosAngelesMSA.
43
Thepreponderanceofsubprimelendingisimportant,
becausehouseholdsthatarerepayingsubprimeloanshaveahigherlikelihoodofdelinquencyor
foreclosure.A2008studyreleasedfromtheFederalReserveBankofBostonfoundthat,
homeownershipsthatbeginwithasubprimepurchasemortgageendupinforeclosurealmost
20percentofthetime,ormorethansixtimesasoftenasexperiencesthatbeginwithprime
purchasemortgages.
44
InCalifornia,homeownerswithdelinquenciesof60daysorgreaterrosefromabout52,500per
monthinthefirstquarterof2007toabout171,000permonthinthefirstquarterof2008.
45
By
38
DepartmentofHousingandUrbanDevelopment(HUD)andtheDepartmentofTreasury.2001.HUDTreasuryNational
PredatoryLendingTaskForceReport.HUD;Carr,J.andL.Kolluri.2001.PredatoryLending:AnOverview.FannieMae
Foundation;andCaliforniaReinvestmentCoalition,CommunityReinvestmentAssociationofNorthCarolina,EmpireJustice
Center,MassachusettsAffordableHousingAlliance,NeighborhoodEconomicDevelopmentAdvocacyProject,OhioFair
LendingCoalitionandWoodstockInstitute,2008.PayingMorefortheAmericanDream.
39
FreddieMac.1996,September.AutomatedUnderwriting:MakingMortgageLendingSimplerandFairerforAmerica's
Families.FreddieMac.(accessedFebruary5,2007);andLanzerotti.2006.HomeownershipatHighCost:ForeclosureRisk
andHighCostLoansinCalifornia.FederalReserveBankofSanFrancisco.
40
DepartmentofHousingandUrbanDevelopment(HUD)andtheDepartmentofTreasury.2001.
41
JointCenterforHousingStudiesofHarvardUniversity.2008.TheStateoftheNationsHousing.
42
Ibid.
43
Mayer,ChrisandKarenPerce.SubprimeMortgage:Who,WhereandtoWhom?DivisionofResearchandStatisticsand
MonetaryAffairs.Availableonlineat:http://www.federalreserve.gov/Pubs/FEDS/2008/200829/200829abs.html.
44
Gerardi,Shapiro,andP.Willen.2008.SubprimeOutcomes:RiskyMortgages,HomeownershipExperiences,and
Foreclosure.FederalReserveBankofBoston.
45
Olson,John.2008.UnderstandingtheForeclosureCrisisinCalifornia.FederalReserveBankofSanFrancisco.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE14

thefirstquarterof2010,thenumberofdelinquentloansincreasedtoover536,000permonth.
46
Furthermore,manyhomeownerslostequityintheirhomes.InDecember2010,theproportion
ofresidentialpropertiesinCaliforniawithnegativeequity(i.e.,amortgageworthmorethanthe
valueofthehome)was32percent,oneofthehighestratesinthecountry.
47
Inthelastquarter
of2008,Californialedthecountrywithamonthlyaverageof43,000borrowersfallinginto
negativeequity.Intotal,Californialostmorethan$1.2trillioninresidentialpropertyvaluein
2008,whichaccountsformorethanhalfofthenationaldeclineinhousingvaluesfrom2007to
2008.
48
Duetothehigherrateofsubprimemortgagesamongminorityhomeowners,those
homeownershavereportedlybeendisproportionatelyaffectedintermsofforeclosuresandloss
ofhomeequity.
49
Suchproblemssubstantiallyimpacttheabilityofhomeownerstosecurecapitalthroughhome
mortgagestostartorexpandsmallbusinesses.Thatissuehasbeenhighlightedinstatements
madebymembersoftheBoardofGovernorsoftheFederalReserveSystemtotheU.S.Senate
andU.S.HouseofRepresentatives:
OnApril16,2008,FredericMishkininformedtheU.S.SenateCommitteeonSmallBusiness
andEntrepreneurshipthatoneofthemostimportantconcernsaboutthefutureprospects
forsmallbusinessaccesstocreditisthatmanysmallbusinessesuserealestateassetsto
securetheirloans.Lookingforward,continuingdeclinesinthevalueoftheirrealestate
assetsclearlyhavethepotentialtosubstantiallyaffecttheabilityofthosesmallbusinesses
toborrow.Indeed,anecdotalstoriestothiseffecthavealreadyappearedinthepress.
50
OnNovember20,2008,RandallKrosznertoldtheU.S.HouseofRepresentatives
CommitteeonSmallBusinessthatsmallbusinessandhouseholdfinancesare,inpractice,
verycloselyintertwined.[T]hemostrecentSSBFindicatedthatabout15percentofthe
totalvalueofsmallbusinessloansin2003wascollateralizedbypersonalrealestate.
Becausetheconditionofhouseholdbalancesheetscanberelevanttotheabilityofsome
smallbusinessestoobtaincredit,thefactthatdeclininghousepriceshaveweakened
householdbalancesheetpositionssuggeststhatthehousingmarketcrisishaslikelyhadan
adverseimpactonthevolumeandpriceofcreditthatsmallbusinessesareabletoraise
overandabovetheeffectsofthebroadercreditmarketturmoil.
51
46
HOPENOW.2011.StateLossMitigationData(December2010).Availableonline:http://www.hopenow.com/industry
data/State%20Loss%20Mitigation%20Data%20(December)%20232011.pdf
47
CoreLogic.March8,2011.CoreLogicNegativeEquitypressrelease.
48
FirstAmericanCoreLogic.2008.FirstAmericanCoreLogicandLoanPerformanceHomePriceIndexAnalytics.
49
CaliforniaReinvestmentCoalition,CommunityReinvestmentAssociationofNorthCarolina,EmpireJusticeCenter,
MassachusettsAffordableHousingAlliance,NeighborhoodEconomicDevelopmentAdvocacyProject,OhioFairLending
CoalitionandWoodstockInstitute,2008.PayingMorefortheAmericanDream.
50
Mishkin,Frederic.2008.StatementofFredericS.Mishkin,Member,BoardofGovernorsoftheFederalReserveSystem
beforetheCommitteeonSmallBusinessandEntrepreneurship,U.S.SenateonApril16.
51
Kroszner,Randall.2008.Effectsofthefinancialcrisisonsmallbusiness.TestimonybeforetheCommitteeonSmallBusiness,
U.S.HouseofRepresentativeonNovember20.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE15

FederalReserveChairmanBenBernankerecognizedtherealityofthoseconcernsinaspeech
titledRestoringtheFlowofCredittoSmallBusinessesonJuly12,2010.
52
Bernankeindicated
thatsmallbusinesseshavehaddifficultyaccessingcreditandpointedtothedecliningvalueof
realestateasoneoftheprimaryobstacles.
Furthermore,theNationalFederationofIndependentBusiness(NFIB)conductedanational
surveyof751smallbusinessesinlate2009toinvestigatehowtherecessionimpactedaccessto
capital.
53,54
NFIBconcludedthatfallingrealestatevalues(residentialandcommercial)severely
limitsmallbusinessownercapacitytoborrowandstrainscurrentlyoutstandingcredit
relationships.Surveyresultsindicatedthat95percentofsmallbusinessemployersownedreal
estateand13percentheldupsidedownproperty.
55
Opportunitiestoobtainbusinesscapitalthroughhomemortgagesappeartobelimited
especiallyforhomeownerswithlittlehomeequity.Furthermore,theincreasingratesofdefault
andforeclosure,especiallyforhomeownerswithsubprimeloans,reflectshrinkingaccessto
capitalavailablethroughsuchloans.Thoseconsequencesarelikelytohaveadisproportionate
impactonminoritiesintermsofbothhomeownershipandtheabilitytosecurecapitalfor
businessstartupandgrowth.
Redlining.Redliningreferstomortgagelendingdiscriminationagainstgeographicareas
associatedwithhighlenderrisk.Thoseareasareoftenraciallydetermined,suchasAfrican
Americanormixedraceneighborhoods.
56
Thatpracticecanperpetuateproblemsinalready
poorneighborhoods.
57
Forexample,theCityofEastPaloAltosuedaCalifornialenderfor
redliningandhavingloanpracticesthatdiscriminatedagainstpeopleinlowincomeorminority
communities.Evidenceincludedloanofficerstellingapplicantsthatthebanksimplydidnotlend
inEastPaloAltoorinspecificminorityneighborhoods.
58
Thebankprovidedcashanda
revolvingloanfundinordertosettlethelawsuit.
Mostquantitativestudieshavefailedtofindstrongevidenceinsupportofgeographic
dimensionsoflenderdecisions.StudiesinColumbus,Ohio;Boston,Massachusetts;andHouston,
Texasfoundthatracialdifferencesinloandenialhadlittletodowiththeracialcompositionofa
52
Bernanke,Ben.2010.RestoringtheFlowofCredittoSmallBusinesses.PresentedattheFederalReserveMeetingSeries:
AddressingtheFinancingNeedsofSmallBusinessesonJuly12.
53
Thestudydefinedasmallbusinessasabusinessemployingnolessthanoneindividualinadditiontotheowner(s)andno
morethan250individuals.
54
NationalFederationofIndependentBusiness(NFIB).2010.SmallBusinessCreditinaDeepRecession.
55
Upsidedownisdefinedasamortgagethatisworthmorethantheappraisedvalueofthehouse.
56
Holloway,StevenR.1998.ExploringtheNeighborhoodContingencyofRaceDiscriminationinMortgageLendingin
Columbus,Ohio.AnnalsoftheAssociationofAmericanGeographers.88:252276.
57
Ladd,HelenF.1998.EvidenceonDiscriminationinMortgageLending.TheJournalofEconomicPerspectives.
12:4162.
58
Californiabankpays$206,000andestablishes$7millioncreditlineforcitytosettleredliningsuit.NationalFairHousing
AdvocateOnline.http://www.fairhousing.com/index.cfm?method=page.display&pagename=advocate_
october02_page5(accessedFebruary8,2007).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE16

neighborhoodbutratherwiththeindividualcharacteristicsoftheborrower.
59
Somestudies
foundtheraceofanapplicantbutnottheracialmakeupoftheneighborhoodtobeafactor
inloandenials.
Studiesofredlininghaveprimarilyfocusedonthegeographicaspectoflenderdecisions;
however,redliningcanalsoincludethepracticeofrestrictingcreditflowstominority
neighborhoodsthroughproceduresthatarenotobservableinactualloandecisions.Examples
includebranchplacement,advertising,andotherpreapplicationprocedures.
60
Suchpractices
candeterminoritiesfromstartingbusinesses.Locationsoffinancialinstitutionsareimportant
tosmallbusinessstartup,becauselocalbankingsectorsoftenfinancelocalbusiness.
61
Redlining
practiceswoulddenythatresourcetominorities.
Steeringbyrealestateagents.Historically,differencesinthetypesofloansthatareissuedto
minoritieshavealsobeenattributedtosteeringbyrealestateagents,whoserveasan
informationfilter.
62
Somestudiesclaimthatrealestatebrokersprovidedifferentlevelsof
assistanceanddifferentinformationonloanstominoritiesthantheydotononminorities.
63
Suchsteeringcanaffecttheperceptionofminorityborrowersabouttheavailabilityofmortgage
loans.Despitethefactthatsteeringhasbeenprohibitedbylawformanydecades,a2005study
foundsuchpracticesinLosAngelesandothercitiesthroughoutthecountry.
64
Genderdiscriminationinmortgagelending.Relativelylittleinformationisavailableongender
baseddiscriminationinmortgagelendingmarkets.Historically,lendingpracticesovertly
discriminatedagainstwomenbyrequiringinformationonmaritalandchildbearingstatus.Risk
associatedwithwomenofchildbearingageandunmarriedwomenresultedinincome
discounting,limitingtheavailabilityofloanstowomen.
65
TheEqualCreditOpportunityAct(ECOA)in1973suspendedsuchdiscriminatorylending
practices.AstudyinCaliforniathatusedregressionanalysisexploreddiscriminationagainst
marriedandsinglewomenin16metropolitanareasfrom1977to1978.Thestudyrevealed
littleevidenceofsexdiscriminationinthestate.However,certainbarriersaffectingwomenhave
persistedafter1973inmortgagelendingmarkets.Forexample,thereissomepastevidencethat
lendersunderappraisedpropertiesforfemaleborrowers.
66
59
SeeHolloway.1998.ExploringtheNeighborhoodContingencyofRaceDiscriminationinMortgageLendinginColumbus,
Ohio.;Tootell.1996.RedlininginBoston:DoMortgageLendersDiscriminateAgainstNeighborhoods?;andHolmes,Andrew
andPaulHorvitz.1994.MortgageRedlining:Race,Risk,andDemand.TheJournalofFinance.49:8199.
60
Yinger,John.1995.ClosedDoors,OpportunitiesLost:TheContinuingCostsofHousingDiscrimination.RussellSage
Foundation.NewYork.7879.
61
Holloway.1998.ExploringtheNeighborhoodContingencyofRaceDiscriminationinMortgageLendinginColumbus,Ohio.
62
Kantor,AmyC.andJohnD.Nystuen.1982.DeFactoRedliningaGeographicView.EconomicGeography.4:309328.
63
Yinger.1995.ClosedDoors,OpportunitiesLost:TheContinuingCostsofHousingDiscrimination.7879.
64
Galster,GeorgeandErinGodfrey.2005.RacialSteeringbyRealEstateAgentsintheU.S.in2000.JournaloftheAmerican
PlanningAssociation.71:251268.
65
Card.1980.Women,HousingAccess,andMortgageCredit.
66
Ladd,HelenF.1982.EqualCreditOpportunity:WomenandMortgageCredit.TheAmericanEconomicReview.72:166170.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE17

AccesstoBusinessCapital
Barrierstocapitalmarketscanhavesignificantimpactsonsmallbusinessformationand
expansion.Forexample,duringpublichearingsthatCaltransheldinspring2006,
discriminationinobtainingloansduetoraceandgenderwasidentifiedasanissuefor
businesses.
67
Inaddition,severalstudieshavefoundevidencethatstartupcapitalisimportant
forbusinessprofits,longevity,andotheroutcomes.
Theamountofstartupcapitalispositivelyassociatedwithsmallbusinesssalesandother
outcomes;
68
LimitedaccesstocapitalhasaffectedthesizeofAfricanAmericanownedbusinesses;
69 70
and
WeakfinancialcapitalwasidentifiedasasignificantreasonthatmoreAfricanAmerican
ownedfirmsthannonHispanicwhiteownedfirmsclosedoverafouryearperiod.
71
Bankloansareoneofthelargestsourcesofdebtcapitalforsmallbusinesses.
72
Discriminationin
theapplicationandapprovalprocessesofthoseloansandothercreditresourcescouldbe
detrimentaltothesuccessofminorityandwomenownedbusinesses.
Previousstudieshaveaddressedrace/ethnicityandgenderdiscriminationincapitalmarketsby
evaluating:
Loandenialrates;
Loanvalues;
Interestrates;
Businessownersfearthatloanapplicationswillberejected;
Sourcesofcapital;and
Relationshipsbetweenstartupcapitalandbusinesssurvival.
67
CaltransPublicHearingTestimonyandRelatedDocuments.ExaminedandsummarizedbyGCAPServices.
68
SeeFairlie,RobertW.andHarryA.Krashinsky.2006.LiquidityConstraints,HouseholdWealth,andEntrepreneurship
Revisited;andGrown.1991.CommercialBankLendingPracticesandtheDevelopmentofBlackOwnedConstruction
Companies.
69
Grown.1991.CommercialBankLendingPracticesandtheDevelopmentofBlackOwnedConstructionCompanies.
70
Fairlie,RobertW.andAliciaM.Robb.2010.RaceandEntrepreneurialSuccess.Cambridge:MITPress.
71
Grown.1991.CommercialBankLendingPracticesandtheDevelopmentofBlackOwnedConstructionCompanies.
72
Datafromthe1998SSBFindicatesthat70percentofloanstosmallbusinessarefromcommercialbanks.Thisresultis
presentacrossallgender,raceandethnicgroupswiththeexceptionofAfricanAmericans,whoserateoflendingfrom
commercialbanksisevengreaterthanotherminorities.SeeBlanchard,Lloyd,BoZhaoandJohnYinger.2005.DoCredit
MarketBarriersExistforMinorityandWomanEntrepreneurs.CenterforPolicyResearch,SyracuseUniversity.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE18

Toexaminetheroleofrace/ethnicityandgenderincapitalmarkets,thestudyteamanalyzed
datafromtheFederalReserveBoards1998and2003SSBFthemostcomprehensivenational
sourceofcreditcharacteristicsofsmallfirms(thosewithfewerthan500employees).The
surveycontainsinformationonloandenialandinterestratesaswellasanecdotalinformation
fromfirms.Sampleweightsareappliedtoproviderepresentativeestimates.Thesamplesfrom
1998and2003containrecordsfor3,521and4,240firms,respectively.
TheSSBFrecordsthegeographiclocationofthefirmbyCensusDivisionnotbycity,county,
orstate.ThePacificCensusDivision(referredtobelowasthePacificregion)containsCalifornia,
alongwithAlaska,Washington,Oregon,andHawaii.ThePacificregionisthelevelofgeographic
detailofSSBFdatamostspecifictoCalifornia,and2003isthemostrecentinformationavailable
fromtheSSBFbecausethesurveywasdiscontinuedafterthatyear.
Loandenialrates.FigureG7presentsloandenialratesfromthe1998and2003SSBFsfor
thePacificregionandfortheUnitedStates.
73
NationalSSBFdatafor1998revealthatAfrican
AmericanandHispanicAmericanownedfirmshadloandenialratesconsiderablyabovethatof
nonHispanicwhitemaleownedfirms.In2003,theloandenialrateforAfricanAmerican
ownedfirms(51%)intheUnitedStatesremainedsubstantiallyhigherthanfornonHispanic
whitemaleownedfirms.
AsshowninFigureG7,about34percentofminorityandwomenownedfirmsinthePacific
regionreportedbeingdeniedloansin1998,alargerproportionthanthe21percentofnon
Hispanicwhitemaleownedfirmsthatweredeniedloans.Accordingto2003SSBFdata,a
smallerpercentageofminorityandfemaleownedfirmsinthePacificregionweredeniedloans
comparedtononHispanicwhitemaleownedfirms,whichwasinconsistentwithnational
resultsforthatyear.(LoandenialstatisticsonindividualminoritygroupsinthePacificregion
arenotreportedinFigureG7duetorelativelysmallsamplesizes.)
73
Thedenialratesrepresenttheproportionofbusinessownerswhoseloanapplicationsoverthepreviousthreeyearswere
alwaysdenied,comparedtobusinessownerswhoseloanapplicationswerealwaysapprovedorsometimesapprovedand
sometimesdenied.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE19

FigureG7.
Businessloan
denialrates,1998
and2003
Note:
**Denotesthatthe
differenceinproportion
fromnonHispanicwhite
maleownedfirmsis
statisticallysignificantat
the95%confidencelevel.
Source:
BBCResearch&Consulting
from1998and2003Survey
ofSmallBusinessFinances.
Otherresearchersregressionanalysesofloandenialrates.Severalstudieshaveinvestigated
whetherdisparitiesinloandenialratesfordifferentracial/ethnicandgendergroupsexistafter
controllingforotherfactorsthataffectloanapprovals.Findingsfromthosestudiesinclude:
CommercialbanksarelesslikelytoloantoAfricanAmericanownedfirmsthantonon
Hispanicwhiteownedfirmsafterstatisticallycontrollingforotherfactors.
74
AfricanAmerican,HispanicAmerican,andAsianAmericanmenaremorelikelytobe
deniedaloanthannonHispanicwhitemen.However,AfricanAmericanborrowersare
morelikelytoapplyforaloan.
75
74
Cavalluzzo,Ken,LindaCavalluzzoandJohnWolken.2002.Competition,SmallBusinessFinancingandDiscrimination:
EvidencefromaNewSurvey.JournalofBusiness.75:641679.
75
Coleman,Susan.2002.CharacteristicsandBorrowingBehaviorofSmall,WomenownedFirms:Evidencefromthe1998
NationalSurveyofSmallBusinessFinances.TheJournalofBusinessandEntrepreneurship.151166.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE20

DisparitiesinloandenialratesbetweenAfricanAmericanownedandnonHispanicwhite
ownedfirmstendtodecreasewithincreasingcompetitivenessoflendermarkets.Asimilar
phenomenonisobservedwhenconsideringdifferencesinloandenialratesbetweenmale
andfemaleownedfirms.
76
Theprobabilityofloandenialdecreaseswithgreaterpersonalwealth.However,
accountingforpersonalwealthdoesnotresolvethelargedifferencesindenialratesacross
AfricanAmerican,HispanicAmerican,AsianAmerican,andnonHispanicwhiteowned
firms.Specifically,informationaboutpersonalwealthexplainedsomedifferencesbetween
HispanicandAsianAmericanownedfirmsandnonHispanicwhiteownedfirms,but
explainedalmostnoneofthedifferencesbetweenAfricanAmericanownedfirmsandnon
Hispanicwhiteownedfirms.
77
LoandenialratesarehigherforAfricanAmericanownedfirmsthanfornonHispanic
whiteownedfirmsafteraccountingforseveralfactorssuchascreditworthinessandother
characteristics.Thatresultislargelyinsensitivetodifferentmodelspecifications.
Consistentevidenceonloandenialratesandotherindicatorsofdiscriminationincredit
marketswasnotfoundforotherminoritiesorforwomen.
78
Womenownedfirmsarenolesslikelytoapplyforortobeapprovedforloansin
comparisontofirmsownedbymen.
79
CharlesRiverAssociates(CRA)incorporatedthe2003SSBFinastudypreparedforthe
SantaClaraValleyTransportationAuthority(alsolocatedinthePacificregion).Combining
datafromthe1998and2003SSBFstoincreaseprecisionofestimates,theCRAstudy
revealedpossibledisparitiesinloandenialratesbasedonrace/ethnicityandgenderusinga
probiteconometricmodelandcontrollingforotherfactors.CRAsresultsindicatethat
AfricanAmericanandHispanicAmericanownedfirmshadhigherprobabilitiesofloan
denial.TheyalsoreportedthatAsianAmericanownedfirmsweremorelikelytobedenied
loans.
80
76
Cavalluzzo,2002.Competition,SmallBusinessFinancingandDiscrimination:EvidencefromaNewSurvey.
77
Cavalluzzo,KenandJohnWolken.2002.SmallBusinessTurndowns,PersonalWealthandDiscrimination.FEDSWorking
PaperNo.200235.
78
Blanchflower,DavidG.,PhillipB.LevineandDavidJ.Zimmerman.2003.DiscriminationintheSmallBusinessCredit
Market.TheReviewofEconomicsandStatistics.85:930943.
79
Coleman.2002.CharacteristicsandBorrowingBehaviorofSmall,WomenownedFirms:Evidencefromthe1998National
SurveyofSmallBusinessFinances.
80
CRAInternational.2007.MeasuringMinorityandWomanOwnedConstructionandProfessionalServiceFirmAvailability
andUtilization.PreparedforSantaClaraValleyTransportationAuthority.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE21

BBCregressionmodelforthedenialratesintheSSBF.TheBBCstudyteamconducteditsown
analysisoftheSSBFbydevelopingamodeltoexploretherelationshipsbetweenloandenialand
therace/ethnicityandgenderoffirmownerswhilecontrollingforotherfactors.Asdiscussed
above,thereisextensiveliteratureonbusinessloandenialsthatprovidesthetheoreticalbasis
fortheregressionmodels.Manystudieshaveusedprobiteconometricmodelstoinvestigatethe
effectsofvariousowner,firmandloancharacteristicsonthelikelihoodofloandenial.The
standardmodelincludesthreegeneralcategoriesofvariables:
Theownersdemographiccharacteristics(includingraceandgender),credit,and
resources(14variables);
Thefirmscharacteristics,creditandfinancialhealth(29variables);and
Theenvironmentinwhichthefirmandlenderoperateandcharacteristicsoftheloan
(19variables).
81
BBCdevelopedtwomodels,oneforthe1998SSBFandoneforthe2003SSBF,usingthose
standardvariables.Afterexcludingasmallnumberofobservationswheretheloanoutcomewas
imputed,the1998nationalsampleincluded931firmsthathadappliedforaloanduringthe
threeyearsprecedingthe1998SSBFandthePacificregionincluded172suchfirms.The2003
nationalsampleincluded1,897firmsthathadappliedforaloanduringthethreeyears
precedingthe2003SSBFandthePacificregionincluded298suchfirms.
GiventherelativelysmallsamplesizeforthePacificregionandthelargenumberofvariablesin
themodel,thestudyteamincludedallU.S.firmsinthemodelandestimatedanyPacificregion
effectsbyincludingregionalcontrolvariablesanapproachcommonlyusedinotherstudies
thatanalyzeSSBFdata.
82
Theregionalvariablesincludeanindicatorvariableforfirmslocatedin
thePacificregionandinteractionvariablesthatrepresentfirmsownedbyminoritiesorwomen
thatarelocatedinthePacificregion.
1998SSBFregressionresults.FigureG8presentsthemarginaleffectsfromthe1998probit
modelpredictingloandenials.Theresultsfromthemodelindicatethatanumberofraceand
genderneutralfactorssignificantlyaffecttheprobabilityofloandenial.Thosefactorsinclude:
Olderbusinessownersaremorelikelytobedeniedloans;
Havingafouryearcollegedegreeoradvanceddegreelowerstheprobabilityofloandenial;
Increasedequityinthebusinessownershomeifheorsheisahomeownerreduces
thelikelihoodofloandenial;
81
See,forexample,Blanchard,Lloyd;Zao,BoandJohnYinger.2005.DoCreditBarriersExistforMinorityandWomen
Entrepreneurs?CenterforPolicyResearch,SyracuseUniversity.
82
Blanchflower,DavidG.;Levine,PhillipB.andDavidJ.Zimmerman.2003.DiscriminationintheSmallBusinessCredit
Market.TheReviewofEconomicsandStatistics.85(4):930943;NERAEconomicConsulting.2008.Race,Sex,andBusiness
Enterprise:EvidencefromtheCityofAustin.PreparedfortheCityofAustin,Texas;andCRAInternational.2007.Measuring
MinorityandWomanOwnedConstructionandProfessionalServiceFirmAvailabilityandUtilization.PreparedforSantaClara
ValleyTransportationAuthority.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE22

Businessownerswhofiledforbankruptcyinthepastsevenyearsorhavehadajudgment
againstthemaremorelikelytobedeniedaloan;
Familyownedbusinessesaremorelikelytobedeniedloans;
Businesseswithanexistinglineofcredit,anexistingmortgage,orexistingvehicleor
equipmentloansarelesslikelytobedeniedaloan;however,firmswithoutstandingloans
fromstockholdersaremorelikelytobedeniedloans;
Firmsthathavebeendelinquentinbusinesstransactionsorthatfiledforbankruptcyinthe
pastsevenyearshaveahigherprobabilityofbeingdeniedaloan;
Beingintheconstructionindustryorengineeringindustryincreasesthelikelihoodofbeing
deniedloans;
Firmsinhighlyconcentratedindustrysegments(asmeasuredbytheHerfindahlindex)are
morelikelytobedeniedloans;and
Businessmortgageapplicationsandvehicleandequipmentloanapplicationsarelesslikely
tobedeniedthanothertypesofbusinessloanapplications.
Aftercontrollingforraceandgenderneutralinfluences,firmsownedbyAfricanAmericansand
HispanicAmericansweremorelikelytohavetheirloansdeniedthanotherfirms.Theindicator
variableforthePacificregionandtheinteractiontermsforPacificregionandminorityand
womenownershipwerenotstatisticallysignificant.Thatresultindicatesthattheprobabilityof
loandenialsforminorityandwomenownedfirmswithinthePacificregionarenotsignificantly
differentfromtheU.S.asawholeaftercontrollingforotherfactors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE23

FigureG8.
Likelihoodofbusinessloandenial(probitregression)intheU.S.inthe1998SSBF,
Dependentvariable:loandenial
Variable MarginalEffect Variable MarginalEffect Variable MarginalEffect
Race/ethnicityandgender Firm'scharacteristics,creditandfinancialhealth Firmandlenderenvironmentandloancharacteristics
AfricanAmerican 0.357 **
AsianAmerican 0.015
HispanicAmerican 0.213 **
Female 0.024
Pacificregion 0.012
AfricanAmericaninPacificregion 0.064
AsianAmericaninPacificregion 0.041
HispanicAmericaninPacificregion 0.008
FemaleinPacificregion 0.093
D&Bcreditscore=moderaterisk 0.094
D&Bcreditscore=averagerisk 0.110
D&Bcreditscore=significantrisk 0.063
D&Bcreditscore=highrisk 0.066
Totalemployees 0.000
Percentofbusinessownedbyprincipal 0.000
Familyownedbusiness 0.076 **
Firmpurchased 0.039
Firminherited 0.022
Firmage 0.002
Firmhascheckingaccount 0.030
Firmhassavingsaccount 0.029
Partnership 0.015
Scorporation 0.022
Ccorporation 0.030
Constructionindustry 0.098 **
Manufacturingindustry 0.005
Transportation,communications
andutilitiesindustry 0.074
Finance,insuranceand
realestateindustries 0.022
Engineeringindustry 0.122
Otherindustry 0.035
Herfindahlindex=.10to.18 0.390 **
Owner'scharacteristics,creditandresources
Age 0.002 *
Ownerexperience 0.001 Firmhaslineofcredit 0.124 ** Herfindahlindex=.18orabove 0.369 **
Lessthanhighschooleducation 0.075 Existingcapitalleases 0.008 LocatedinMSA 0.006
Somecollege 0.017 Existingmortgageforbusiness 0.045 * Salesmarketlocalonly 0.021
Fouryeardegree 0.061 ** Existingvehicleloans 0.067 ** Loanamount 0.000
Advanceddegree 0.043 Existingequipmentloans 0.056 ** Capitalleaseapplication 0.024
LogofHomeEquity 0.010 ** Existingloansfromstockholders 0.111 ** Businessmortgageapplication 0.066 **
Bankruptcyinpast7years 0.315 ** Otherexistingloans 0.010 Vehicleloanapplication 0.093 **
Judgementagainstinpast3years 0.228 ** Firmusedtradecreditinpastyear 0.038 Equipmentloanapplication 0.072 **
Logofnetworthexcludinghome 0.001 Logoftotalsalesinprioryear 0.000 Loanforotherpurposes 0.036
Ownerhasnegativenetworth 0.025 Negativesalesinprioryear 0.073
Logofcostofdoingbusinessinprioryear 0.002
Logoftotalassets 0.005
Negativetotalassets 0.045
Logoftotalequity 0.015
Negativetotalequity 0.241
Firmbankruptcyinpast7years 0.228 *
Firmdelinquencyinbusinesstransactions 0.258 **
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
Foreaseofinterpretationthemarginaleffectsoftheprobitcoefficientsaredisplayedinthefigure.Significanceiscalculatedusingtstatisticsfromtheprobitcoefficientsassociatedwiththemarginaleffects.
"NativeAmericanorotherminority"and"Miningindustry"perfectlypredictedloanoutcomeanddroppedoutoftheregression.
Source: BBCResearch&Consultinganalysisof1998SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE24

=
Thestudyteamsimulatedloanapprovalratesforthoseminoritygroupswithstatistically
significantdisparities(i.e.,AfricanAmericanandHispanicAmericanownedbusinesses)by
comparingobservedapprovalrateswithsimulatedrates.
83
Loanapprovalmeansthata
businessowneralwaysoratleastsometimeshadhisorherbusinessloanapplicationsapproved
overthepreviousthreeyears.Ratesofloanapprovalmeanthepercentageoffirmsreceiving
loanapprovalsalwaysoratleastsometimesduringthattimeperiod.
Theprobitmodelingapproachallowedforsimulationsofloanapprovalratesforthosegroups
asiftheyhadthesameprobabilityofloanapprovalassimilarlysituatednonHispanicwhite
maleownedfirms.Toconductthosesimulations,BBCtookthefollowingsteps:
1. BBCperformedaprobitregressionanalysispredictingloanapprovalusingonlynon
Hispanicwhitemaleownedfirmsinthedataset.
84
2. Thestudyteamthenusedthecoefficientsfromthatmodelandthemeancharacteristics
ofAfricanAmericanandHispanicAmericanownedfirms(includingtheeffectsofa
businessbeinginthePacificregion)toestimatetheprobabilityofloanapprovalofsuch
groups.
TheresultsofthosesimulationsyieldedestimatesofloanapprovalratesfornonHispanic
whiteownedfirmswhosharedthesamecharacteristicsofAfricanAmericanandHispanic
Americanownedfirms.Highersimulatedratesindicatethat,inreality,AfricanAmericanand
HispanicAmericanownedfirmsarelesslikelytobeapprovedforloansthansimilarlysituated
nonHispanicwhitemaleownedfirms.FigureG9showsthesesimulatedloanapprovalrates
(benchmark)incomparisontotheactualapprovalratesobservedinthe1998SSBF.The
disparityindexwascalculatedbytakingtheactualloanapprovalrateforeachgroupand
dividingitbyeachgroupsbenchmark,andthenmultiplyingtheresultby100.Valueslessthan
100indicatethat,inreality,thegroupislesslikelytobeapprovedforaloanthanwhatwouldbe
expectedforsimilarlysituatednonHispanicwhitemaleownedfirmsinotherwordsthat
race/ethnicityaffectsthelikelihoodofthosegroupsbeingapprovedforloans.
FigureG9.
Comparisonofactualloanapprovalratestosimulatedloanapprovalrates,1998
Loanapprovalrates Disparityindex
Group Actual Benchmark (100 parity)
AfricanAmerican 46.4% 76.8% 60
HispanicAmerican 53.7% 75.9% 71
Note: ActualapprovalratespresentedhereanddenialratesinFigureG7donotsumto100%because
someobservationsweredroppedintheprobitregression.
Loanapprovalmeansthatabusinessowneralwaysoratleastsometimeshadhisorherbusinessloanapplicationsapprovedoverthe
previousthreeyears.
Source: BBCResearch&Consultinganalysisof1998NSSBFdata.
83
Theapprovalrateisequaltooneminusthedenialrate.
84
Thatversionofthemodelexcludedtherace/ethnicityandgenderindicatorvariables,becausethevalueofallofthose
variableswouldbethesame(i.e.,0).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE25

Basedon1998SSBFdata,theactualloanapprovalrateforAfricanAmericanownedfirmswas
46percent.ModelresultsshowedthatAfricanAmericanownedfirmswouldhaveanapproval
rateofabout77percentiftheywereapprovedforloansatthesamerateassimilarlysituated
nonHispanicwhitemaleownedfirms(disparityindexof60).Similarly,HispanicAmerican
ownedfirmswouldhaveanapprovalrateofabout76percentiftheywereapprovedforloansat
thesamerateassimilarlysituatednonHispanicwhitemaleownedfirms,comparedwiththe
actualloanapprovalrateof54percent(disparityindexof71).
2003SSBFregressionresults.BBCalsoconductedaregressionanalysisforthe2003SSBF.
85
Asin
the1998regressionanalysis,thedependentvariablerepresentswhetherornotafirmsloan
applicationsoverthepastthreeyearswerealwaysdenied.FigureG10presentsthemarginal
effectsfromthe2003probitmodelpredictingloandenial.Inthe2003modeltheraceand
genderneutralfactorsthatsignificantlyaffectedtheprobabilityofloandenialinclude:
LocationinthePacificregionincreasesthelikelihoodofloandenial;
Ownerexperienceincreasesthelikelihoodofloandenial;
Havinganadvanceddegreelowerstheprobabilityofloandenial;
Businessownerswhofiledforbankruptcyinthepastsevenyearsaremorelikelytobe
deniedaloan;
Businesseswithanaverageorhighriskcreditscorearemorelikelytobedeniedloans;
Inheritedbusinessesandolderbusinessesarelesslikelytobedeniedloans;
Businesseswithanexistinglineofcredit,checkingaccount,orsavingsaccountareless
likelytobedeniedaloan.
Firmswithexistingloans(otherthanmortgage,vehicle,equipmentorstockholderloans)
aremorelikelytobedeniedloans;
Highertotalsalesintheprioryearlowerstheprobabilityofbeingdeniedaloan;
SorCcorporationsaremorelikelytobedeniedloans;
Beinginthetransportation,communicationsandutilitiesindustryincreasesthelikelihood
ofbeingdeniedloans;
Firmsinmetropolitanareasaremorelikelytobedeniedloans;and
Businessmortgageapplications,vehicleloansandloansforotherpurposesarelesslikely
tobedenied.
Aftercontrollingforraceandgenderneutralinfluences,firmsownedbyAfricanAmericans
weremorelikelytohavetheirloansdeniedthanotherfirms.
85
The2003SSBFcontainsmultipleimplicates(fivecopiesofeachrecord)tobetteraddresstheissueofwithmissingvalues.
Thevaluesofallreportedvariablesremainconstantacrossthefiveimplicates,butthevaluesofimputedvariablesmaydiffer.
Only1.8percentofallvaluesweremissingandhavebeenimputed.BBCsregressionanalysisisperformedonthefirst
implicate.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE26









































FigureG10.
Likelihoodofbusinessloandenial(probitregression)intheU.S.inthe2003SSBF,
Dependentvariable:loandenial
MarginalEffect Variable MarginalEffect Variable MarginalEffect Variable
Race/ethnicityandgender Firm'scharacteristics,creditandfinancialhealth Firmandlenderenvironmentandloancharacteristics
AfricanAmerican 0.256 **
AsianAmerican 0.017
HispanicAmerican 0.011
NativeAmericanorotherminority 0.031
Female 0.019
Pacificregion 0.057 **
AfricanAmericaninPacificregion 0.032
AsianAmericaninPacificregion 0.033
HispanicAmericaninPacificregion 0.026
0.017
FemaleinPacificregion 0.030 *
NativeAmericanorotherminorityinPacificregion
D&Bcreditscore=moderaterisk 0.007
D&Bcreditscore=averagerisk 0.036 *
D&Bcreditscore=significantrisk 0.017
D&Bcreditscore=highrisk 0.059 **
Totalemployees 0.000
Percentofbusinessownedbyprincipal 0.000
Familyownedbusiness 0.023
Firmpurchased 0.002
Firminherited 0.036 **
Firmage 0.001 **
Firmhascheckingaccount 0.147 *
Firmhassavingsaccount 0.025 **
Firmhaslineofcredit 0.085 **
Existingcapitalleases 0.006
Partnership 0.006
Scorporation 0.030 **
Ccorporation 0.040 *
Constructionindustry 0.029
Manufacturingindustry 0.013
Transportation,communications
andutilitiesindustry 0.177 **
Finance,insuranceand
realestateindustries 0.016
Engineeringindustry 0.003
Otherindustry 0.003
Herfindahlindex=.10to.18 0.000
Herfindahlindex=.18orabove 0.028
LocatedinMSA 0.023 *
Owner'scharacteristics,creditandresources
Age 0.001
Ownerexperience 0.002 ** Existingmortgageforbusiness 0.021 Salesmarketlocalonly 0.014
Somecollege 0.010 Existingvehicleloans 0.018 Loanamount 0.000
Fouryeardegree 0.003 Existingequipmentloans 0.012 Capitalleaseapplication 0.017
Advanceddegree 0.026 * Existingloansfromstockholders 0.021 Businessmortgageapplication 0.032 **
Logofhomeequity 0.001 Otherexistingloans 0.030 * Vehicleloanapplication 0.051 **
Bankruptcyinpast7years 0.098 * Firmusedtradecreditinpastyear 0.000 Equipmentloanapplication 0.019
Judgementagainstinpast3years 0.017 Logoftotalsalesinprioryear 0.012 * Loanforotherpurposes 0.022 *
Logofnetworthexcludinghome 0.000 Logofcostofdoingbusinessinprioryear 0.002
Logoftotalassets 0.001
Logoftotalequity 0.001
Negativetotalequity 0.010
Firmbankruptcyinpast7years 0.026
Firmdelinquencyinbusinesstransactions 0.012
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
Foreaseofinterpretationthemarginaleffectsoftheprobitcoefficientsaredisplayedinthefigure.Significanceiscalculatedusingtstatisticsfromtheprobitcoefficientsassociatedwiththemarginaleffects.
"Lessthanhighschooleducation,""Negativesalesinprioryear"and"Miningindustry"perfectlypredictedloanoutcomeanddroppedoutoftheregression;"Ownerhasnegativenetworth"and"Negativetotalassets"
droppedbecauseofcolinearity.
Source: BBCResearch&Consultinganalysisof2003SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE27

=
FigureG10alsoindicatesthatalthoughthereislittleornooverallinfluenceofbusinessowner
genderonratesofbusinessloandenial,femalebusinessownersinthePacificregionappearto
havealowerlikelihoodofloandenialthanfemalebusinessownersnationally.
Thestudyteamalsosimulatedapprovalratesfromthe2003SSBFresultsusingthesame
approachasitusedforthe1998disparityindex.FigureG11presentsactualandsimulated
(benchmark)approvalratesforAfricanAmericanownedbusinesses,thesoleminoritygroup
withstatisticallysignificantdisparitiesinloanapprovalinthe2003data.Simulatedapproval
ratesindicatedthatAfricanAmericanownedfirmsareapprovedat71percentoftherate
observedforsimilarlysituatednonHispanicwhitemaleownedfirms(i.e.,nonHispanicwhite
maleownedfirmswiththesamedemographic,creditandfinancialhealth,lenderenvironment
andloancharacteristicsofAfricanAmericanownedfirms).
FigureG11.
Comparisonofactualloanapprovalratestosimulatedloanapprovalrates,2003
Group
Loanapprovalrates
Actual Benchmark
Disparityindex
(100 parity)
AfricanAmerican 49.1% 69.0% 71
Note: ActualapprovalratespresentedhereanddenialratesinFigureG7donotsumto100%becausesome
observationsweredroppedintheprobitregression.
Loanapprovalmeansthatabusinessowneralwaysoratleastsometimeshadhisorherbusinessloanapplicationsapprovedoverthe
previousthreeyears.
Source: BBCResearch&Consultinganalysisof2003NSSBFdata.
Applyingforloans.Fearofloandenialcanbeabarriertobusinesscreditinthesameway
thatactualloandenialpresentsabarrier.TheSSBFincludesaquestionthatgaugeswhethera
businessownerdidnotapplyforaloanduetofearofloandenial.Usingdatafromthe1998and
2003SSBF,FigureG12presentstheproportionoffirmsthatreportedneedingcreditbutdid
notapplyforloansbecauseofafearofdenial.
In1998and2003,AfricanAmericanandHispanicownedfirmsweremorelikelythannon
Hispanicwhitemaleownedfirmsinthenationtoforgoapplyingforloansduetoafearofdenial.
NonHispanicwhitewomenownedfirmswerealsomorelikelytoforgoapplyingforloansdue
toafearofdenial.In2003AsianAmericanownedfirmsweremorelikelythannonHispanic
whitemaleownedfirmstonotapplyforloansduetoafearofloandenial.InthePacificregion
inboth1998and2003,fearofdenialwasgreaterforminorityandwomenownedfirmsthan
fornonHispanicwhitemaleownedfirmsbutthedifferencewasnotstatisticallysignificant.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE28

FigureG12.
Firmsthat
neededloansbut
didnotapplydue
tofearofdenial,
1998and2003
Note:
**Denotesthatthe
differenceinproportions
fromnonHispanicwhite
maleownedfirmsis
statisticallysignificantat
the95%confidencelevel.
Source:
BBCResearch&Consulting
from1998and2003Survey
ofSmallBusinessFinances.
Otherresearchersregressionanalysesoffearofdenial.Otherstudieshaveidentifiedfactors
thatinfluencethedecisiontoapplyforaloan,suchasfirmsize,firmage,ownerage,and
educationalattainment.Accountingforthosefactorscanhelpindeterminingwhetherrace,
ethnicityorgenderofthebusinessownerexplainwhethertheownerdidnotapplyforaloan
duetofearofloandenial.Resultsindicatethat:
AfricanAmericanandHispanicAmericanbusinessownersaresignificantlylesslikelyto
applyforloans.
86
Afterstatisticallycontrollingforeducationalattainment,therewerenodifferencesinloan
applicationratesbetweennonHispanicwhite,AfricanAmerican,HispanicAmerican,and
AsianAmericanmalebusinessowners.
87
86
Cavalluzzo,2002.Competition,SmallBusinessFinancingandDiscrimination:EvidencefromaNewSurvey.
87
Coleman,Susan.2004.AccesstoDebtCapitalforSmallWomenandMinorityOwnedFirms:DoesEducationalAttainment
HaveanImpact?JournalofDevelopmentalEntrepreneurship.9:127144.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE29

AfricanAmericanownedfirmsweremorelikelythanotherfirmstoreportbeingseriously
concernedwithcreditmarketsandwerelesslikelytoapplyforcreditinfearofloan
denial.
88
InitsstudyfortheSantaClaraValleyTransportationAuthority,CRAusedaneconometric
modeltoinvestigatefirmsthatdidnotapplyforloansforfearofdenial.Themodel
exploredwhetherdifferencesbetweenrace/ethnicityandgendergroupsexistafter
statisticallycontrollingforotherfactors.CRAbaseditsanalysisoncombineddatafromthe
1998and2003SSBFs.ResultsfromCRAsmodelindicatethatAfricanAmericanand
HispanicAmericanownedbusinessesaremorelikelytonotapplyoutoffearofbeing
denied.Inaddition,resultsforfirmslocatedinthePacificregiondidnotdiffersignificantly
fromnationalresults.
89
BBCregressionmodelforfearofdenialintheSSBF.TheBBCstudyteamconducteditsown
econometricanalysisoffearofdenialbydevelopingamodeltoexploretherelationships
betweenfearofdenialandtherace/ethnicityandgenderoffirmownerswhilecontrollingfor
otherfactors.Themodelwassimilartotheprobitregressionforlikelihoodofdenialexceptthat
thefearofdenialregressionincludesfirmownerswhodidnotapplyforaloanandexcludes
loancharacteristics.
Afterexcludingasmallnumberofobservationswherefearofdenialwasimputed,the1998
nationalsampleincluded3,457firmsandthePacificregionincluded715firms.The2003
nationalsampleincluded4,231firmsandthePacificregionincluded736suchfirms.Inboth
1998and2003Pacificregioneffectsaremodeledusingregionalcontrolvariablesinthenational
model.
1998SSBFregressionresults.FigureG13presentsthemarginaleffectsfromtheprobitmodel
predictingthelikelihoodthatafirmneedscreditbutwillnotapplyduetofearofdenial.The
resultsfromthemodelindicatethatanumberofraceandgenderneutralfactorssignificantly
affecttheprobabilityofforgoingapplicationforaloanduetofearofdenial.Factorsthatindicate
astatisticallysignificantincreaseinthelikelihoodofnotapplyingforaloanduetofearofloan
denialinclude:
Filingforbankruptcyinthepastsevenyearsorhavinghadajudgmentagainstthem;
Havinganaverage,significantorhighriskcreditscore;
Havinganexistingmortgage,existingvehicleloans,existingloansfromstockholdersor
otherexistingloans;
Highertotalassets;and
Havingthefirmbedelinquentinbusinesstransactionsorfilingforbankruptcyinthepast
sevenyears.
88
Blanchfloweretal.,2003.DiscriminationintheSmallBusinessCreditMarket.
89
CRAInternational.2007.MeasuringMinorityandWomanOwnedConstructionandProfessionalServiceFirmAvailability
andUtilization.PreparedforSantaClaraValleyTransportationAuthority.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE30

Factorsthatindicateastatisticallysignificantdecreaseinthelikelihoodofbusinessownersnot
applyingforaloanduetofearofloandenialinclude:
Moreequityinthebusinessownershomeifheorsheisahomeownerandmore
businessownernetworth;
Ifthefirmwasacquiredthroughapurchase;
Havinganolderfirm;
Havingasavingsaccountoralineofcredit;and
Moresalesintheprioryear(butalsonegativesalesintheprioryear).
Aftercontrollingforraceandgenderneutralinfluences,AfricanAmericanownedfirmswere
morelikelytoforgoapplyingforaloanduetofearofdenial.Overall,fearofdenialtendstobe
higherinthePacificregion;however,bothAfricanAmericanandAsianAmericanownedfirms
inthePacificregionwerelesslikelytofeardenialthanAfricanAmericanandAsianAmerican
ownedfirmsnationwide.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE31







































FigureG13.
Likelihoodofforgoingaloanapplicationduetofearofdenial(probitregression)intheU.S.inthe1998SSBF,
Dependentvariable:neededaloanbutdidnotapplyduetofearofdenial
Race/ethnicityandgender
AfricanAmerican
AsianAmerican
HispanicAmerican
NativeAmerican
Female
Pacificregion
AfricanAmericaninPacificregion
AsianAmericaninPacificregion
HispanicAmericaninPacificregion
NativeAmericaninPacificregion
FemaleinPacificregion
Owner'scharacteristics,creditandresources
Age
Ownerexperience
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
Logofhomeequity
Bankruptcyinpast7years
Judgementagainstinpast3years
Logofnetworthexcludinghome
Ownerhasnegativenetworth
Variable
0.294 **
0.049
0.025
0.069
0.006
0.074 **
0.110 *
0.099 *
0.034
0.025
0.066
0.001
0.001
0.088
0.003
0.014
0.029
0.007 **
0.324 **
0.093 **
0.034 **
0.168
MarginalEffect
Firm'scharacteristics,creditandfinancialhealth
D&Bcreditscore=moderaterisk
D&Bcreditscore=averagerisk
D&Bcreditscore=significantrisk
D&Bcreditscore=highrisk
Totalemployees
Percentofbusinessownedbyprincipal
Familyownedbusiness
Firmpurchased
Firminherited
Firmage
Firmhascheckingaccount
Firmhassavingsaccount
Firmhaslineofcredit
Existingcapitalleases
Existingmortgageforbusiness
Existingvehicleloans
Existingequipmentloans
Existingloansfromstockholders
Otherexistingloans
Firmusedtradecreditinpastyear
Logoftotalsalesinprioryear
Negativesalesinprioryear
Logofcostofdoingbusinessinprioryear
Logoftotalassets
Negativetotalassets
Logoftotalequity
Negativetotalequity
Firmbankruptcyinpast7years
Firmdelinquencyinbusinesstransactions
Variable
0.079
0.103 **
0.163 **
0.209 **
0.001
0.000
0.022
0.070 **
0.003
0.003 **
0.050
0.056 **
0.062 **
0.037
0.105 **
0.049 **
0.034
0.097 **
0.067 **
0.016
0.022 **
0.167 **
0.002
0.020 **
0.115
0.009
0.010
0.567 **
0.237 **
MarginalEffect
Firmandlenderenvironmentandloancharacteristics
Partnership 0.008
Scorporation 0.001
Ccorporation 0.036
Miningindustry 0.078
Constructionindustry 0.034
Manufacturingindustry 0.006
Transportation,communications
andutilitiesindustry 0.048
Finance,insuranceand
realestateindustries 0.031
Engineeringindustry 0.001
Otherindustry 0.034
Herfindahlindex=.10to.18 0.000
Herfindahlindex=.18orabove 0.011
LocatedinMSA 0.031
Salesmarketlocalonly 0.017
Variable MarginalEffect
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
Foreaseofinterpretationthemarginaleffectsoftheprobitcoefficientsaredisplayedinthefigure.Significanceiscalculatedusingtstatisticsfromtheprobitcoefficientsassociatedwiththemarginaleffects.
Source: BBCResearch&Consultinganalysisof1998SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE32

2003SSBFregressionresults.FigureG14presentsthemarginaleffectsfromtheprobitmodel
predictingthelikelihoodthatafirmneedscreditbutwillnotapplyduetofearofdenial.The
resultsfromthemodelindicatethatanumberofraceandgenderneutralfactorssignificantly
affecttheprobabilityofforgoingapplicationforaloanduetofearofdenial.Factorsthatindicate
astatisticallysignificantincreaseinthelikelihoodofnotapplyingforaloanduetofearofloan
denialinclude:
Filingforbankruptcyinthepastsevenyearsorhavinghadajudgmentagainstthem;
Havingasignificantorhighriskcreditscore;
Alargerpercentageofbusinessownedbytheprincipalowner;
Havinganexistingmortgage,existingvehicleorequipmentloans,existingloansfrom
stockholdersorotherexistingloans;
Highercostofdoingbusinessintheprioryear;
Havingbeendelinquentinbusinesstransactionsorfilingforbankruptcyinthepastseven
years;and
Locationinametropolitanarea.
Factorsthatindicateastatisticallysignificantdecreaseinthelikelihoodofnotapplyingforaloan
duetofearofloandenialinclude:
Beingolderandhavingafouryearcollegedegree;
Moreequityinthebusinessownershomeifheorsheisahomeownerandmore
businessownernetworth;
Havinganolderfirm;
Moresalesintheprioryear(butalsonegativesalesintheprioryear);
Havingalocal(asopposedtoregional,nationalorinternational)salesmarket.
Aftercontrollingforraceandgenderneutralinfluences,AfricanAmericanandHispanic
Americanownedfirmsweremorelikelytoforgoapplyingforaloanduetofearofdenial
(similartoCRAsanalysis).Inaddition,BBCsmodelindicatesthatwomenownedfirmswere
alsomorelikelytoneedaloanbutchoosenottoapplyduetofearofdenial.Althoughnotfound
nationally,inthePacificregionNativeAmericanownedfirmsweremorelikelytofeardenial
thanotherfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE33







































FigureG14.
Likelihoodofforgoingaloanapplicationduetofearofdenial(probitregression)intheU.S.inthe2003SSBF,
Dependentvariable:neededaloanbutdidnotapplyduetofearofdenial
Race/ethnicityandgender
AfricanAmerican
AsianAmerican
HispanicAmerican
NativeAmericanorotherminority
Female
Pacificregion
AfricanAmericaninPacificregion
AsianAmericaninPacificregion
HispanicAmericaninPacificregion
NativeAmericanorotherminorityinPacificregion
FemaleinPacificregion
Owner'scharacteristics,creditandresources
Age
Ownerexperience
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
Logofhomeequity
Bankruptcyinpast7years
Judgementagainstinpast3years
Logofnetworthexcludinghome
Variable
0.214 **
0.049
0.071 *
0.026
0.046 **
0.037
0.081
0.000
0.047
0.424 **
0.051
0.002 **
0.002
0.041
0.002
0.036 *
0.021
0.004 **
0.227 **
0.256 **
0.025 **
MarginalEffect
Firm'scharacteristics,creditandfinancialhealth
D&Bcreditscore=moderaterisk
D&Bcreditscore=averagerisk
D&Bcreditscore=significantrisk
D&Bcreditscore=highrisk
Totalemployees
Percentofbusinessownedbyprincipal
Familyownedbusiness
Firmpurchased
Firminherited
Firmage
Firmhascheckingaccount
Firmhassavingsaccount
Firmhaslineofcredit
Existingcapitalleases
Existingmortgageforbusiness
Existingvehicleloans
Existingequipmentloans
Existingloansfromstockholders
Otherexistingloans
Firmusedtradecreditinpastyear
Logoftotalsalesinprioryear
Negativesalesinprioryear
Logofcostofdoingbusinessinprioryear
Logoftotalassets
Logoftotalequity
Negativetotalequity
Firmbankruptcyinpast7years
Firmdelinquencyinbusinesstransactions
Variable
0.011
0.040
0.046 *
0.104 **
0.000
0.001 **
0.009
0.010
0.033
0.003 **
0.010
0.010
0.005
0.030
0.050 **
0.031 *
0.043 *
0.074 **
0.106 **
0.018
0.022 **
0.092 *
0.012 *
0.005
0.008
0.033
0.210 **
0.142 **
MarginalEffect
Firmandlenderenvironmentandloancharacteristics
Partnership 0.004
Scorporation 0.014
Ccorporation 0.020
Constructionindustry 0.033
Manufacturingindustry 0.012
Transportation,communications
andutilitiesindustry 0.049
Finance,insuranceand
realestateindustries 0.041
Engineeringindustry 0.028
Otherindustry 0.010
Herfindahlindex=.10to.18

0.005
Herfindahlindex=.18orabove 0.024
LocatedinMSA 0.047 **
Salesmarketlocalonly 0.063 **
Variable MarginalEffect
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
Foreaseofinterpretationthemarginaleffectsoftheprobitcoefficientsaredisplayedinthefigure.Significanceiscalculatedusingtstatisticsfromtheprobitcoefficientsassociatedwiththemarginaleffects.
"Miningindustry"perfectlypredictedloanoutcomeanddroppedoutoftheregression;"Ownerhasnegativenetworth"and"Negativetotalassets"droppedbecauseofcolinearity.
Source: BBCResearch&Consultinganalysisof2003SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE34

Loanvalues.Thestudyteamalsoconsideredaverageloanvaluesforfirmsthatreceivedloans.
Resultsfromthe1998and2003SSBFsformeanloanvaluesissuedtodifferentracial/ethnicand
gendergroupsarepresentedinFigureG15.Comparisonsofloanamountsbetweennon
Hispanicwhitemaleownedfirmsandminorityandwomenownedfirmsindicatedthe
following:
Inboth1998and2003,minorityandwomenownedfirmsinthePacificregionwere
issuedloansworthlessonaveragethanloansissuedtononHispanicwhitemaleowned
firms.
In2003,nationalresultsshowedthatminorityandwomenownedfirmswereissuedloans
thatwereworthonaveragelessthanhalftheloanamountissuedtononHispanicwhite
maleownedfirms.However,national1998datasuggestthatminorityandwomenowned
firmswereissuedloansthatwereworthslightlymoreonaveragethanloansissuedtonon
Hispanicwhitemaleownedfirms.
FigureG15.
Meanvalueof
approvedbusiness
loans,1998
and2003
Note:
**Denotesthatthedifference
inmeansfromnonHispanic
whitemaleownedfirmsis
statisticallysignificantatthe
95%confidencelevel.
Source:
BBCResearch&Consulting
from1998and2003Surveyof
SmallBusinessFinances.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE35

PreviousnationalstudieshavefoundthatAfricanAmericanownedfirmsareissuedloansthat
areworthlessthanloansissuedtononHispanicwhiteownedfirmswithsimilarcharacteristics.
ExaminationsofconstructioncompaniesintheUnitedStateshavealsorevealedthatAfrican
Americanownedfirmsareissuedloansthatareworthlessthanloansissuedtofirmswith
otherwiseidenticalcharacteristics.
90
TheBBCstudyteamconducteditsowneconometricanalysistoexploretherelationships
betweenloanamountandtherace/ethnicityandgenderoffirmownerswhilecontrollingfor
otherfactors.Thatregressionmodeldidnotindicatestatisticallydifferentloanamounts
approvedforminoritiesorwomenthanloanamountsfornonHispanicwhitesormen.
Interestrates.Basedon1998and2003SSBFdata,FigureG16presentstheaverageinterest
ratesoncommercialloansbytherace/ethnicityoffirmowners.In1998,onaverage,minority
andwomenownedfirmsinthePacificregionwereissuedloanswithsimilarinterestratesto
loansissuedtononHispanicwhitemaleownedfirms.However,in2003,theaverageinterest
rateonloansissuedtominorityandwomenownedfirmsappearedtobehigher(1.6
percentagepointshigher)thanthemeaninterestrateofloansfornonHispanicwhitemale
ownedfirms.
FigureG16.
Meaninterestrate
forbusinessloans,
1998and2003
Note:
**Denotesthatthe
differenceinmeansfrom
nonHispanicwhitemale
ownedfirmsisstatistically
significantatthe95%
confidencelevel.
Source:
BBCResearch&Consulting
from1998and2003Survey
ofSmallBusinessFinances.
90
Grown.1991.CommercialBankLendingPracticesandtheDevelopmentofBlackOwnedConstructionCompanies.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE36

TheoverallpatterninthePacificregionforloaninterestrateswassimilartothatfoundinthe
UnitedStatesin1998and2003.
Otherresearchersregressionanalysesofinterestrates.Previousstudieshaveinvestigated
differencesininterestratesacrossrace/ethnicityandgenderwhilestatisticallycontrollingfor
factorssuchasindividualcredithistory,firmcredithistory,andDunandBradstreetcredit
scores.Findingsfromthosestudiesincludethefollowing:
HispanicAmericanownedfirmshadsignificantlyhigherinterestratesforlinesofcreditin
placeswithlesscreditmarketcompetition.However,thisstudyfoundnoevidencethat
AfricanAmericanorfemaleownedfirmsreceivedhigherrates.
91
Amongasampleoffirmswithnopastcreditproblems,AfricanAmericanownedfirmshad
significantlyhigherinterestratesonapprovedloansthanothergroups.
92
InitsstudyfortheSantaClaraValleyTransportationAuthority,CRAalsoinvestigated
differencesininterestratesbyrace/ethnicityandgenderusingalineareconometricmodel
thataccountedforotherfactorsthatmayimpactinterestrates.TheCRAstudyindicated
that,onanationallevel,AfricanAmericanandHispanicAmericanownedfirmspaya
higherinterestrateforloansthannonHispanicwhiteownedfirmsafterstatistically
controllingforotherfactors.CRAdidnotfindanyadditionaldifferencesbetweenminority
andnonminorityownedfirmslocatedinthePacificregion.
93
BBCregressionmodelforinterestratesintheSSBF.The2003SSBFdataforthePacificregion
indicatehigherinterestrates,onaverage,forminorityandwomenownedfirmscomparedwith
whitemaleownedfirms.BBCstudyteamconductedaregressionanalysisofinterestratesin
boththe1998andthe2003SSBFinordertoexploretherelationshipsbetweeninterestrates
andtherace/ethnicityandgenderoffirmownerswhilecontrollingforotherfactors.BBC
developedalinearregressionmodelusingthesamecontrolvariablesasthelikelihoodofdenial
modelalongwithadditionalcharacteristicsoftheloanreceived,suchas whetherornottheloan
wasguaranteed,ifcollateralwasrequired,thelengthoftheloanandwhethertheinterestrate
wasfixedorvariable.
Afterexcludingasmallnumberofobservationswheretheinterestratewasimputed,the1998
nationalsampleincluded719firmsthatreceivedaloaninthepastthreeyearsandthePacific
regionincluded125suchfirms.The2003nationalsampleincluded1,606firmsthatreceiveda
loaninthepastthreeyearsandthePacificregionincluded247suchfirms.Again,Pacificregion
effectsaremodeledusingregionalcontrolvariables.
91
Cavalluzzo.2002.Competition,SmallBusinessFinancingandDiscrimination:EvidencefromaNewSurvey.
92
Blanchflower.2003.DiscriminationintheSmallBusinessCreditMarket.
93
CRAInternational.2007.MeasuringMinorityandWomanOwnedConstructionandProfessionalServiceFirmAvailability
andUtilization.PreparedforSantaClaraValleyTransportationAuthority.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE37

1998SSBFregressionresults.FigureG17presentsthecoefficientsfromthe1998linearmodel.
Theresultsfromtheregressionmodelindicatethatanumberofraceandgenderneutral
factorssignificantlyaffecttheinterestratereceived,including:
Businessownerswithlessthanahighschooleducationtendtoreceivehigherinterestrates;
Firmsacquiredthroughpurchasetendtoreceivelowerinterestrates;
Firmswithexistingloans(otherthanvehicleorequipmentloansorloansfrom
stockholders)tendtoreceivehigherinterestrates;
Moresalesintheprioryear(butalsonegativesalesintheprioryear)areassociatedwith
lowerinterestrates;
Anincreaseinafirmstotalequitydecreasesinterestratesasdoeshavingnegativeequity;
Capitalleasestendtohavehigherinterestrates;and
Acollateralrequirementlowersinterestrates.
Aftercontrollingforraceandgenderneutralinfluences,theregressionanalysisusing1998
SBBFdatadoesnotindicatethatminorityorfemaleownedfirmsreceivedloanswith
significantlydifferentinterestratesthannonHispanicwhiteownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE38





































FigureG17.
Interestrate(linearregression)intheU.S.inthe1998SSBF,
Dependentvariable:interestrateonmostrecentapprovedloan
Race/ethnicityandgender
Constant
AfricanAmerican
AsianAmerican
HispanicAmerican
NativeAmerican
Female
Pacificregion
AfricanAmericaninPacificregion
AsianAmericaninPacificregion
HispanicAmericaninPacificregion
FemaleinPacificregion
Owner'scharacteristics,creditandresources
Age
Ownerexperience
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
Logofhomeequity
Bankruptcyinpast7years
Judgementagainstinpast3years
Logofnetworthexcludinghome
Ownerhasnegativenetworth
Variable
14.625 **
1.464
1.258
0.303

0.609
0.304
0.093
2.668
2.001
0.141
0.515
0.001
0.014
1.192 **
0.182
0.154
0.059
0.049
0.985
0.330
0.049
0.058
Coefficient
Firm'scharacteristics,creditandfinancialhealth
D&Bcreditscore=moderaterisk
D&Bcreditscore=averagerisk
D&Bcreditscore=significantrisk
D&Bcreditscore=highrisk
Totalemployees
Percentofbusinessownedbyprincipal
Familyownedbusiness
Firmpurchased
Firminherited
Firmage
Firmhascheckingaccount
Firmhassavingsaccount
Firmhaslineofcredit
Existingcapitalleases
Existingmortgageforbusiness
Existingvehicleloans
Existingequipmentloans
Existingloansfromstockholders
Otherexistingloans
Firmusedtradecreditinpastyear
Logoftotalsalesinprioryear
Negativesalesinprioryear
Logofcostofdoingbusinessinprioryear
Logoftotalassets
Negativetotalassets
Logoftotalequity
Negativetotalequity
Firmbankruptcyinpast7years
Firmdelinquencyinbusinesstransactions
Variable
0.270
0.161
0.145
0.502
0.002
0.005
0.305
0.404 *
0.052
0.001
0.080
0.359
0.315
0.112
0.044
0.138
0.080
0.234
0.601 **
0.200
0.206 *
3.222 **
0.019
0.027
1.990
0.173 **
2.236 **
0.597
0.430
Coefficient
Firmandlenderenvironmentandloancharacteristics
Partnership 0.060
Scorporation 0.246
Ccorporation 0.225
Miningindustry 0.079
Constructionindustry 0.064
Manufacturingindustry 0.020
Transportation,communications
andutilitiesindustry 0.131
Finance,insuranceand
realestateindustries 0.528
Engineeringindustry 0.134
Otherindustry 0.423
Herfindahlindex=.10to.18

0.099
Herfindahlindex=.18orabove 0.229
LocatedinMSA 0.060
Salesmarketlocalonly 0.165
ApprovedLoanamount 0.000
Capitalleaseapplication 1.267 **
Businessmortgageapplication 0.272
Vehicleloanapplication 0.478
Equipmentloanapplication 0.068
Loanforotherpurposes 0.452
Loanguaranteed 0.071
Collateralrequired 0.388 *
Lengthofloan(months) 0.002
Fixedrate 0.037
Variable Coefficient
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
Source: BBCResearch&Consultinganalysisof1998SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE39

2003SSBFregressionresults.FigureG18presentsthecoefficientsfromthelinearmodel.The
resultsfromtheregressionmodelindicatethatanumberofraceandgenderneutralfactors
significantlyaffecttheinterestratereceived,including:
FirmsinthePacificregiontendtoreceiveloanswithhigherinterestrates;
Businessownerswithanadvanceddegreetendtoreceivelowerinterestrates;
Increasedequityinthebusinessownershomeifheorsheisahomeownerreduces
theinterestrate;
Highriskcreditscoresincreaseinterestratesbyapproximately1percentagepoint;
Anincreaseinafirmstotalequityincreasesinterestratesasdoeshavingnegativeequity;
Beingintheconstructionindustrylowersinterestratesbutbeinginthetransportation,
communicationsandutilitiesindustryincreasesinterestrates;
Capitalleasestendtohavehigherinterestratesandvehicleloanstendtohavelower
interestrates;
Acollateralrequirementlowersinterestrates;
Longerloanstendtohavelowerinterestrates;and
Fixedrateloanshavehigherinterestratesthanvariablerateloans.
Aftercontrollingforraceandgenderneutralinfluences,theregressionanalysisindicatesthat
HispanicAmericanownedfirmsreceivedloanswithinterestrateshigherthannonHispanic
whiteownedfirms(about1percentagepointhigher).AfricanAmericanownedfirmsinthe
Pacificregionreceivedhigherinterestratesthanotherfirms.ItappearsthatAfricanAmerican
ownedfirmspaidinterestratesseveralpercentagepointshigherthanotherfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE40





































FigureG18.
Interestrate(linearregression)intheU.S.inthe2003SSBF,
Dependentvariable:interestrateonmostrecentapprovedloan
Race/ethnicityandgender
Constant
AfricanAmerican
AsianAmerican
HispanicAmerican
NativeAmericanorotherminority
Female
Pacificregion
AfricanAmericaninPacificregion
AsianAmericaninPacificregion
HispanicAmericaninPacificregion
NativeAmericanorotherminorityinPacificregion
FemaleinPacificregion
Owner'scharacteristics,creditandresources
Age
Ownerexperience
Lessthanhighschooleducation
Somecollege
Fouryeardegree
Advanceddegree
Logofhomeequity
Bankruptcyinpast7years
Judgementagainstinpast3years
Logofnetworthexcludinghome
Variable
11.993 **
1.787
0.119
1.096 *
0.437
0.212
1.224 **
2.906 *
0.235
0.139
0.972
0.403
0.013
0.011
0.284
0.239
0.324
0.572 *
0.006
0.241
0.205
0.149 **
Coefficient
Firm'scharacteristics,creditandfinancialhealth
D&Bcreditscore=moderaterisk
D&Bcreditscore=averagerisk
D&Bcreditscore=significantrisk
D&Bcreditscore=highrisk
Totalemployees
Percentofbusinessownedbyprincipal
Familyownedbusiness
Firmpurchased
Firminherited
Firmage
Firmhascheckingaccount
Firmhassavingsaccount
Firmhaslineofcredit
Existingcapitalleases
Existingmortgageforbusiness
Existingvehicleloans
Existingequipmentloans
Existingloansfromstockholders
Otherexistingloans
Firmusedtradecreditinpastyear
Logoftotalsalesinprioryear
Negativesalesinprioryear
Logofcostofdoingbusinessinprioryear
Logoftotalassets
Logoftotalequity
Negativetotalequity
Firmbankruptcyinpast7years
Firmdelinquencyinbusinesstransactions
Variable
0.241
0.192
0.279
1.013 **
0.002
0.001
0.516
0.001
0.065
0.012
0.354
0.017
0.028
0.132
0.028
0.344
0.563
0.191
0.380
0.252
0.157
2.286
0.144
0.142
0.182 *
2.132 *
0.206
0.179
Coefficient
Firmandlenderenvironmentandloancharacteristics
Partnership 0.510
Scorporation 0.142
Ccorporation 0.113
Miningindustry 0.228
Constructionindustry 0.555 *
Manufacturingindustry 0.235
Transportation,communications
andutilitiesindustry 1.367 **
Finance,insuranceand
realestateindustries 0.036
Engineeringindustry 0.515
Otherindustry 0.372
Herfindahlindex=.10to.18 0.550
Herfindahlindex=.18orabove 0.876
LocatedinMSA 0.111
Salesmarketlocalonly 0.148
ApprovedLoanamount 0.000
Capitalleaseapplication 1.221 *
Businessmortgageapplication 0.547
Vehicleloanapplication 1.062 **
Equipmentloanapplication 0.261
Loanforotherpurposes 0.369
Loanguaranteed 0.312
Collateralrequired 0.842 **
Lengthofloan(months) 0.004 **
Fixedrate 1.185 **
Variable Coefficient
Note: *Statisticallysignificantat90%confidencelevel.
**Statisticallysignificantat95%confidencelevel.
"Ownerhasnegativenetworth"and"Negativetotalassets"droppedoutoftheregressionbecauseofcolinearity.
Source: BBCResearch&Consultinganalysisof2003SSBFdata.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE41

Otherfactorsaffectingcapitalmarkets.Ethnicbankingsectorsmayalsoaffectthe
availabilityofloanstodifferentminoritygroups.Forexample,onestudyfoundthatstrengthin
theethnicbankingsectorinfluencescreditaccessibilityinethniccommunitiesinLosAngeles.A
strongAsianAmericanbankingsectorhelpedAsianAmericancommunitiestransitionto
successfulbusinessenvironments,andalackofstrongbankingsectorsinAfricanAmerican
communitiescouldhinderdevelopmentofAfricanAmericanbusinesses.
94
Arecentstudy
discountstheimportanceofrotatingcreditassociationsforAsianAmericanownedfirms.
95
ResultsfromBBCavailabilityinterviews.Atthecloseofthe2012availabilityinterviews
conductedaspartoftheCaltransdisparitystudy,BBCasked,Finally,wereinterestedin
whetheryourcompanyhasexperiencedbarriersordifficultiesassociatedwithstartingor
expandingabusinessinyourindustryorwithobtainingwork.Thinkaboutyourexperiencesin
Californiawithinthepastfiveyearsasweaskyouthesequestions.
Foreachpotentialbarrier,thestudyteamexaminedwhethertheshareoffirmsthatindicated
thattheyhadexperiencedthatspecificbarrierordifficultydifferedbetweenMBEs,WBEsand
majorityownedfirms.Thestudyteamalsoexaminedifaffirmativeresponsesdifferedfor
youngerfirms,thosethatweresevenyearsoldoryounger(correspondingtotheyoungestone
fifthofrespondentsacrossallthecompletedavailabilityinterviews).
Accesstolinesofcreditandloans.Thefirstquestionwas,Hasyourcompanyexperiencedany
difficultiesinobtaininglinesofcreditorloans?AsshowninFigureG19,ofallfirms,36percent
ofMBEsand27percentofWBEsreporteddifficultiesobtaininglinesofcreditorloans.Fewer
majorityownedfirms(19%)reportedthattheyhadexperienceddifficultiesobtaininglinesof
creditorloans.
Alargershareofyoungfirmsreportedthattheyhadexperienceddifficultiesobtaininglinesof
creditorloanscomparedtoallfirms.Youngminorityandwomenownedfirmsweremorelikely
toreportthisdifficultlythanmajorityownedfirms.
94
Dymski,GaryandLisaMohanty.1999.CreditandBankingStructure:AsianandAfricanAmericanExperienceinLos
Angeles.TheAmericanEconomicReview.89:362366.
95
Fairlie,RobertW.andAliciaM.Robb.2010.RaceandEntrepreneurialSuccess.Cambridge:MITPress.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE42

FigureG19.
Hasyourcompany
experiencedany
difficultiesin
obtaininglinesof
creditorloans?
Source:
BBCResearch&Consulting
from2012Availability
Interviews.
MBE
(n=779)
WBE
(n=425)
Majority-owned
(n=2,337)
MBE
(n=206)
WBE
(n=66)
Majority-owned
(n=317)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
36%
27%
19%
44%
38%
28%
Young Firms
All Firms
Receivingtimelypayment.Needforbusinesscreditis,inpart,linkedtowhetherfirmsarepaid
fortheirworkinatimelymanner.Intheavailabilityinterviews,BBCasked,Hasyourcompany
hadanydifficultiesreceivingpaymentinatimelymanner?FigureG20showsthatmany
minority,womenandmajorityownedfirmsreporteddifficultyreceivingtimelypayment.
Youngerfirmswerelesslikelytoreportthisdifficultycomparedwithallrespondents,however
youngfirmsownedbywomenweremorelikelythanotheryoungfirmstoindicatethisdifficulty.
FigureG20.
Hasyourcompany
experiencedany
difficultiesreceiving
paymentinatimely
manner?
Majority-owned
(n=2,497)
WBE
(n=456)
MBE
(n=842)
Source:
BBCResearch&Consultingfrom
2012AvailabilityInterviews.
MBE
(n=229)
WBE
(n=72)
Majority-owned
(n=345)
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
46%
51%
51%
41%
50%
42%
Young Firms
All Firms
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE43

BondingandInsurance
Bondingiscloselyrelatedtoaccesstocapital.Somenationalstudieshaveidentifiedbarriers
regardingMBE/WBEsandaccesstosuretybondsforpublicconstructionprojects.
96
High
insurancerequirementsonpublicsectorprojectsmayalsorepresentabarrierforcertain
constructionandengineeringrelatedfirmsattemptingtodobusinesswithgovernment
agencies.
Bonding.ToresearchwhetherbondingrepresentedabarrierforCaliforniabusinesses,BBC
askedfirmscompletingavailabilityinterviews:
Hasyourcompanyobtainedortriedtoobtainabondforaproject?
[andifso]Hasyourcompanyhadanydifficultiesobtainingbondsneededfora
project?
FigureG21presentstheseresultsfromthe2012availabilityinterviews.Amongfirmsreporting
thattheyhadobtainedortriedtoobtainabond,28percentofMBEsindicateddifficulties
obtainingbondsneededforaproject.AsmallershareofWBEs(20%)andmajorityownedfirms
(16%)reporteddifficultiesobtainingthebondingneededforaproject.
Amongyoungfirms,alargershareofMBEsthanmajorityownedfirmsreporteddifficulties
obtainingthebondingneededforaproject.Thiswasnotfoundforyoungfirmsthatwerewhite
womenowned,althoughthenumberofyoungfirmWBErespondentslimitsinterpretationof
resultsforthisgroup.
FigureG21.
MBE All Firms
28%
Hasyourcompany (n=250)
hadanydifficulties
obtainingbonds WBE
(n=137)
neededfora
project?
Majority-owned
(n=688)
Source:
BBCResearch&Consultingfrom
20%
16%
2012AvailabilityInterviews.
Young Firms
MBE
(n=56)
34%
WBE
(n=19)
11%
Majority-owned
(n=68)
25%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
96
Forexample,Enchautegui,MariaE.etal.1997.DoMinorityOwnedBusinessesGetaFairShareofGovernmentContracts?
TheUrbanInstitute:1117,p.56.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE44

Insurance.BBCalsoexaminedwhetherminorityandwomenownedfirmsweremorelikely
thanmajorityownedfirmswithinthestudyareatoreportthatinsurancerequirements
representedabarriertobidding.FigureG22presentstheseresults.OnequarterofMBEs
interviewedreportedsuchdifficulties.FewerWBEs(21%)andmajorityownedfirms(18%)
indicatedthatinsurancerequirementspresentedabarriertobiddingonprojects.
YoungMBEsandmajorityownedfirmsweremorelikelythanotheryoungfirmstoindicatethat
insurancerequirementsonaprojectpresentedabarriertobidding.YoungWBEswerelesslikely
toidentifyinsurancerequirementsasabarrier.
FigureG22.
Haveanyinsurance
MBE
(n=838)
25%
All Firms
requirementson
projectspresented WBE
abarriertobidding?
(n=458)
21%
18%
Majority-owned
Source:
(n=2,498)
BBCResearch&Consulting
from2012Availability
Interviews.
Young Firms
MBE
(n=228)
31%
WBE
(n=74)
14%
Majority-owned
(n=346)
21%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Summary
Thereisevidencethatminoritiesandwomencontinuetofacecertaindisadvantagesinaccessing
capitalthatisnecessarytostart,operateandexpandbusinessesbasedontheinformation
presentedinthisappendix.
Capitalisrequiredtostartcompanies,sobarriersaccessingcapitalcanaffectthenumberof
minoritiesandwomenwhoareabletostartbusinesses.Inaddition,minoritiesandwomenstart
businesswithlesscapital(basedonnationaldata).Anumberofstudieshavedemonstratedthat
lowerstartupcapitalnegativelyaffectsprospectsforthosebusinesses.
Homeequityisanimportantsourceoffundsforbusinessstartupandgrowth.Fewer
AfricanAmericans,HispanicAmericans,andNativeAmericansinCaliforniaownhomes
comparedwithnonHispanicwhites,andthosewhodoownhomestendtohavelower
homevalues.
AsianPacificAmericansandSubcontinentAsianAmericansarealsolesslikelytoown
homesinCaliforniacomparedwithnonHispanicwhites.However,thosewhodoown
homestendtohavehigherhomevalues.
AfricanAmericans,HispanicAmericans,andNativeAmericansapplyingforhome
mortgagesinCaliforniahavebeenmorelikelythannonHispanicwhitestohavetheir
applicationsdenied.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE45

AfricanAmerican,HispanicAmerican,andNativeAmericanmortgageborrowersin
CaliforniahavebeenmorelikelythannonHispanicwhitestobeissuedsubprimeloans.
ThereisevidencethatAfricanAmericanandHispanicAmericanbusinessownerswere
morelikelytohavebeendeniedbusinessloanapplicationsthansimilarlysituatednon
minorities.ResultsforthePacificregionappearconsistentwithnationalresults.
Amongbusinessownerswhoreportedneedingbusinessloans,thereisevidencethat
AfricanAmericans,HispanicAmericansandwomenweremorelikelytoforgoapplyingfor
loansduetofearofdenialthansimilarlysituatednonminoritiesandmen.Resultsforthe
Pacificregionappeartobeconsistentwithnationalresults.InthePacificregionin2003,
NativeAmericanbusinessownerswerealsomorelikelytoforgoapplyingforloansdueto
fearofdenialthanotherbusinessowners.
Thereisevidencefor2003thatHispanicAmericanbusinessownersreceivingbusiness
loanspaidhigherinterestsratesthansimilarlysituatednonminorities(withresultsforthe
Pacificregionconsistentwithnationalresults).InthePacificregion,itappearedthat
AfricanAmericanownedfirmsalsopaidhigherinterestratesthanotherfirms.
Inthe2012availabilityinterviewswithCaliforniatransportationcontractingfirms,
minorityandwomenownedfirmsweremorelikelytoreportdifficultieswithobtaining
linesofcreditorloansthanmajorityownedfirms.
DifficultyreceivingtimelypaymentwasfrequentlyidentifiedasanissuebyMBE,WBEand
majorityownedfirmsinthe2012availabilityinterviews.
Whenaskedwhethertheircompanyhadanydifficultiesobtainingbondsforaprojectand
whetherinsurancerequirementsonprojectspresentedabarriertobidding,relativelymore
MBEsthanmajorityownedsaidthattheyhadthesedifficultiesinthe2012availability
interviews.Therewaslittleevidencethatmorewhitewomenownedfirmshadthese
difficultiesthanmajorityownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXG,PAGE46

APPENDIXH.
SuccessofBusinessesintheCalifornia
ConstructionandEngineeringIndustries
BBCexaminedthesuccessofMBE/WBEsintheCaliforniaconstructionandengineering
industries.
1
Thestudyteamassessedwhetherbusinessoutcomesforthosefirmsdifferfrom
thoseofnonHispanicwhitemaleownedfirms.BBCresearchedoutcomesforMBE/WBEsand
nonHispanicwhitemaleownedbusinessesintermsof:
Participationinpublicandprivatesectormarkets,includingcontractorrolesandsizeof
contractsbidonandperformed;
Businessclosures;
Businessexpansionsandcontractions;
Businessreceiptsandearnings;and
Sizedistributionofgrossrevenue.
FigureH1providesaframeworkforthestudyteamsanalyses.
FigureH1.
Business
outcomes
Publicsector Privatesector
Subcontractor Primecontractor
Expansion Closure Contraction Stability
Operatingbusinesses
Source:
Availablemarkets
BBCResearch&
Consulting.
Contractroles
Outcomes
Businessearnings
1
InAppendixHandothermarketplaceappendices,theengineeringindustryfocusesonarchitectural,engineeringandrelated
services.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE1

ParticipationinPublicandPrivateSectorMarkets
BBCdrewoninformationthatthestudyteamcollectedaspartoftheavailabilityanalysisto
examinebusinessoutcomesforMBE/WBEsandnonHispanicwhitemaleownedfirmsinthe
publicandprivatesectors,includinginformationabout:
Whetherfirmshadbidonandwoncontractsinstudyindustriesandthesizesofthose
projects;and
Whetherfirmshadworkedasprimecontractors,subcontractors,orboth.
Publicsectorversusprivatesectorwork.BBCexaminedwhetherminorityandwomen
ownedtransportationcontractingfirmswerelesslikelytoworkintheprivatesectorthanthe
publicsector.
Thestudyteamseparatelyexaminedresponsesforfirmsinconstructionandengineering
industries.Resultsindicatewhetherafirmhadpursuedpublicorprivatesectortransportation
relatedwork.
2,3
Constructionfirms.ThepiechartsinFigureH2presentthedistributionofmajority,minority
andwomenownedfirmscompetingforgovernmentandprivatesectorprimecontractsand
subcontracts,basedonresponsesfromavailabilityinterviews.
Ofthe794constructionindustryfirmsthatreportedbiddingonpublicsectorprime
contractsinthepastfiveyears,67percentweremajorityowned,20percentwereMBEs
and13percentwereWBEs.
TheshareofMBE/WBEfirmsbiddingasprimes(33%)wasthesameforprivatesector
constructionwork.
TheshareofMBE/WBEsthatreportedbiddingassubcontractorswasaboutthesameas
thosethatreportedbiddingasprimes.Amongthe1,251firmsthatreportedcompetingfor
publicsectorsubcontracts,68percentweremajorityowned,19percentwereMBEsand13
percentwereWBEs.TherepresentationofMBE/WBEsamongfirmsbiddingon
subcontractworkwasaboutthesamebetweenpublicsectorandprivatesectorcontracts.
2
Afirmwasdeemedtohaveperformedorbidonpublicsectorworkifitansweredyestoeitherofthefollowingquestions:
(a)Next,Ihaveafewquestionsaboutyourcompanysroleintransportationrelatedconstruction,maintenanceordesign.
Duringthepastfiveyears,hasyourcompanysubmittedabidorapricequoteforanypartofacontractforastateorlocal
governmentagencyinCalifornia?;or(b)Duringthepastfiveyears,hasyourcompanyreceivedanawardforworkonany
partofacontractforastateorlocalgovernmentagencyinCalifornia?
3
Afirmwasdeemedtohaveperformedorbidonprivatesectorworkifitansweredyestoeitherofthefollowingquestions:
(a)Duringthepastfiveyears,hasyourcompanysubmittedabidorapricequoteforanypartofacontractforaprivate
sectororganizationinCalifornia?;or(b)Duringthepastfiveyears,hasyourcompanyreceivedanawardforworkonany
partofacontractforaprivatesectororganizationinCalifornia?
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE2

FigureH2.
MBEs,WBEsandmajorityownedconstructionfirmsbiddingonpublicsectorandprivatesector
workinCaliforniainthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Totalmaynotaddto100percentduetorounding.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
FirmscompetingforpublicsectorworkinCaliforniawerealsoaskediftheyhadbeenawarded
anypublicsectorcontracts(includingbothprimecontractsandsubcontracts).Whenaskedto
considerthepastfiveyears,about76percentofMBEsconstructionfirmsreportedthattheyhad
beensuccessfulinobtainingwork.ComparedtoMBEs,alargershareofWBEs(85%)and
majorityowned(82%)constructionfirmsbiddingonpublicsectorworksaidthattheyhadbeen
successfulinobtainingsomework.
AboutthesameshareofWBEs(85%)andmajorityowned(84%)firmsbiddingonprivate
sectorworkindicatedthattheyhadreceivedsuchwork.SeventyeightpercentofMBEs
competingforprivatesectorprimecontractsorsubcontractsreportedthattheyhadbeen
successfulinobtainingwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE3

Engineeringfirms.Thestudyteamalsoanalyzedtherepresentationofminorityandwomen
ownedengineeringfirmsamongbusinessescompetingforgovernmentandprivatesectorprime
contractsandsubcontracts.FigureH3presentsthedistributionofmajority,minorityand
womenownedengineeringfirmscompetingforgovernmentandprivatesectorprimecontracts
andsubcontracts.MBE/WBEsrepresentedabout30percentoffirmscompetingforpublic
sectorprimecontractsandprivatesectorprimecontracts.MBE/WBEsrepresentedasimilar
shareoffirmscompetingforpublicandprivatesectorsubcontracts.
FigureH3.
MBEs,WBEsandmajorityownedengineeringfirmsbiddingonpublicsectorandprivatesector
workinCaliforniainthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Totalmaynotaddto100percentduetorounding.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Engineeringfirmscompetingforpublicsectorandprivatesectorworkwerealsoaskedifthey
hadreceivedanysuchworkinthepastfiveyears.AsimilarshareofMBEandmajorityowned
firmsindicatedthattheyhadbeensuccessfulinobtainingwork.AslightlylargershareofWBE
engineeringfirmsreportedobtainingworkinthepublicsector.
EightypercentofWBEengineeringfirmsreportedobtainingpublicsectorworkinthepastfive
years.About77percentofMBEsandmajorityownedindicatedreceivingpublicsectorworkin
thepastfiveyears.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE4

Whenaskediftheyhadreceivedprivatesectorworkinthepastfiveyears,79percentofMBE
and78percentofWBEengineeringfirmsindicatedthattheyhadobtainedsuchwork.Eighty
twopercentofmajorityownedfirmsreportedreceivingprivatesectorworkinthepastfive
years.
Biddingasprimecontractorsandsubcontractors/suppliers.Thenextfourfigures
examineforMBEs,WBEsandmajorityownedfirmsthepercentageoffirmsbiddingin
differentroles(asprimecontractors,subcontractors,orboth).Theseresultsarebasedonthe
sameavailabilityinterviewquestionsdiscussedearlierinthisappendix,andpertaintobidding
withintheCaliforniatransportationcontractingindustrywithinthepastfiveyears.
Constructionfirms.FigureH4examinestheshareofmajority,minorityandwomenowned
Californiaconstructionfirmsthatreportedbiddingonpublicsectorworkasaprimecontractor,
asubcontractor,orasboth.
Overthreequarters(77%)ofmajorityownedconstructionfirmsthatreportedbeing
qualifiedandinterestedinfuturetransportationconstructionworkbidonpublicsector
workasaprimecontractororasubcontractorinthepastfiveyears(includingsubmitting
pricequotes).About13percentbidonlyasaprimecontractorand37percentbidonlyasa
subcontractor.
Asimilarpercentage(76%)ofWBEsreportedbiddingonpublicsectorworkinthepast
fiveyears.About12percenthadbidonlyasaprimecontractor,and37percentofWBEs
bidonlyasasubcontractoronpublicsectorconstructionwork.
AsmallershareofMBEsreportedbiddingonpublicsectorworkinthepastfiveyears
(64%).About14percentreportedbiddingonlyasaprimecontractor,and29percenthad
bidonlyasasubcontractor.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE5

FigureH4.
Percentofconstructionfirmsthatreportedsubmittingabidforanypartofapublicsector
projectinCaliforniainthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Thestudyteamalsoaskedfirmownersandmanagersifthefirmhadbidonaprivatesector
constructionprojectinthepastfiveyears.FigureH5presentstheshareofminority,women
andmajorityownedconstructionfirmsthatreportedbiddingonprivatesectorworkasaprime
contractor,asubcontractor,orasboth.
Likepublicsectorconstructionfirms,asimilarshareofWBEsandmajorityownedfirms
(85%)reportedbiddingonprivatesectorconstructionworkinthepastfiveyears.Thirty
eightpercentofWBEsandmajorityownedfirmsreportedbiddingasonlyasubcontractor.
NinepercentofWBEsand12percentofmajorityownedfirmshadbidasonlyaprime
contractor.
AboutthreequartersofMBEconstructionfirmsindicatedthattheyhadbidonprivate
sectorworkinthepastfiveyears.ComparedtoWBEandmajorityownedfirms,alarger
shareofMBEs(15%)reportedbiddingonlyasaprimecontractor.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE6

FigureH5.
Percentofconstructionfirmsthatreportedsubmittingabidforanypartofaprivatesector
projectinCaliforniainthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Engineeringfirms.FiguresH6andH7examineprimecontractversussubcontractbiddingfor
engineeringfirms,basedondatafromtheavailabilityinterviews.
FigureH6showsthat,overall,WBEsfirms(81%)weremorelikelytobidonpublicsector
contractsthanMBEs(74%)andmajorityownedfirms(77%).Thisdifferencewasduetoa
largerpercentageofWBEfirmsproposingassubcontractors(64%comparedto58%ofMBEs
and59%ofmajorityownedfirms).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE7

FigureH6.
Percentofengineeringindustryfirmsthatreportedsubmittingabidforanypartofapublic
sectorprojectinCaliforniainthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
FigureH7presentsresultsforengineeringrelatedfirmsbiddingonprivatesectorworkinthe
pastfiveyears.
Likepublicsectorwork,overall,MBEs(78%)werelesslikelytobidonprivatesectorworkthan
WBEs(86%)andmajorityownedfirms(88%)inthepastfiveyears.Thisdifferencewasdueto
asmallerpercentageofMBEfirms(57%)proposingassubcontractorsthanWBEs(64%)and
majorityowned(63%)engineeringfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE8

FigureH7.
Percentofengineeringindustryfirmsthatreportedsubmittingabidforanypartofaprivate
sectorprojectinthepastfiveyears
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
LargestcontractinCaliforniainthepastfiveyears.Aspartoftheavailabilityinterviews,
thestudyteamaskedfirmstoidentifythelargestcontracteachfirmwasawardedinCalifornia
inthepastfiveyears.
Constructionfirms.Amongconstructionfirmsintheavailabilityinterviews,34percentof
MBE/WBEsreportedthatthelargestcontracttheyreceivedwaslessthan$100,000(compared
with29%ofmajorityownedfirms).
Overonethirdofmajorityownedfirmsreportedthatthelargestcontracttheyreceivedwas
worth$1millionormore.AsmallershareofMBEs(26%)andWBEs(25%)reportedthatthey
hadreceivedacontractofthissize.
ComparedtoMBEs(2%)andWBEs(1%),alargershareofmajorityownedfirms(7%)reported
winningconstructionworkworth$20millionormoreinthatpastfiveyears.NoMBEsreported
receivingworkworth$100millionormoreinthatpastfiveyears.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE9

FigureH8.
LargestcontractorsubcontractthatthecompanyreceivedinCaliforniainthepastfiveyears,
constructionfirms
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Engineeringfirms.Amongengineeringindustryfirms,aslightlylargershareofmajorityowned
firms(41%)reportedthatthelargestcontracttheyhadbeenawardedinthepastfiveyearswas
worthlessthan$100,000comparedtoMBEs(38%)andWBEs(39%).
Alargershareofmajorityownedfirms(10%)reportedthatthelargestcontracttheyhadbeen
awardedwasworth$5millionormorethanMBEs(8%)andWBEs(4%).However,comparedto
majorityownedfirms(1%),aslightlylargershareofMBEs(2%)reportedthatthelargest
contracttheyhadbeenawardedinthepastfiveyearswasworth$100millionormore.No
WBEsreportedwinningworkofthissizeinthepastfiveyears.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE10

FigureH9.
LargestcontractorsubcontractthatthecompanyreceivedinCaliforniainthepastfiveyears,
engineeringfirms
Note: WBErepresentswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Bidcapacity.Somerecentlegalcasesregardingraceandgenderconsciouscontracting
programshaveconsideredtheissueoftherelativecapacityoffirmsincludedinanavailability
analysis.
4
Oneapproachtoaccountingfordifferingcapacitybetweentypesoffirmsistoexamine
relativelysmallcontracts,atechniquenotedinRothe.Inadditiontoexaminingsmallcontracts,
BBCdirectlymeasuredbidcapacityinitsavailabilityanalysis.
Measurementofbidcapacity.Bidcapacityforafirmismeasuredasthelargestcontractor
subcontractthefirmbidonorperformedinCaliforniawithinthefiveyearsprecedingwhenBBC
interviewedthefirm.BBCusesbidcapacityasonefactorindeterminingwhetherafirmwould
beavailabletobidonspecificprimecontractsandsubcontracts.
AssessmentofpossibledisparitiesinbidcapacityofMBE/WBEsandmajorityownedfirms.
Theavailabilityanalysisproducedadatabaseof3,377firmspotentiallyavailableforCalifornia
work.
5,6
Thefollowinganalysisofbidcapacityreliesontheresultsofavailabilityinterviews.
4
See,forexample,thedecisionoftheUnitedStatesCourtofappealsfortheFederalCircuitinRotheDevelopmentCorp.v.U.S.
DepartmentofDefense,545F.3d1023(Fed.Cir.2008).
5
Eighthundredandthirtyeightofthesefirmswerenotincludedintheavailabilitymarketplaceanalysisreportedinthis
sectionBidcapacity,becausetheydidnotsupplyanswerstosurveyquestionD2orD4ontheAvailabilitySurvey.
6
SeeAppendixCforfurtherdescriptionofthesurveysampleandprocess.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE11

Onefactorthataffectsbidcapacityisthespecializationsoffirmswithinthetransportation
contractingindustry.Subindustriessuchasconstructionmanagementinvolvelargerprojects.
Othersegments,suchassurveyingandmapping,typicallyinvolvesmallerassignments.Oneway
ofcontrollingforvariationinbidcapacitiesindifferentsubindustriesistoassesswhetherafirm
hasabidcapacityaboveorbelowthemedianleveloffirmsinaparticularsubindustry.BBCcan
thentestwhetherminorityandwomenownedfirmsbidonlargerorsmallercontractsor
subcontractscomparedwithotherfirmsinthesamesubindustry.
FigureH10indicatesthemedianbidcapacityamongCaliforniabasedfirmsineachofthe25
industrysegmentswithintheconstructionandengineeringrelatedsubindustriesincludedin
theavailabilitystudy.Notethatthesurveyquestionsregardingthelargestprojectthatfirmshad
bidonorbeenawardedcaptureddataindollarrangesratherthaninspecificdollaramounts.
FigureH10.
Medianbidcapacitybysubindustry
Subindustry MedianBidCapacity
Construction
Asphaltandconcretesupply
Constructionsandandgravel
Electricalwork
Excavationanddrilling
Fencing,guardrailsandsigns
Flaggingservices
Heavyconstructionequipmentandrental
Highwayandstreetconstruction
Landsiteprep
Landscapservices
Otherconstruction
Otherconstructionsupplies
Paintingandstriping
Rebarandreinforcingsteel
Trucking
Water,sewer,andutilitylines
Wreckinganddemolition
Engineeringrelated
Archeologicalexpeditions
Constructionmanagement
Engineering
Environmentalresearch,consultingandtesting
Landscapearchitecture
Surveyingandmapmaking
Testingservices
Transportationconsulting
$500,000 to $1 million
$1 million
$100,000 to $500,000
$100,000 to $500,000
$2 million
$100,000 to $500,000
$100,000 to $500,000
$500,000 to $1 million
$500,000
$100,000 to $500,000
$100,000 to $500,000
$100,000 to $500,000
$500,000 to $1 million
$2 million to $5 million
$100,000 to $500,000
$1 million to $ 2 million
$100,000 to $500,000
$500,000 to $1 million
$1 million to $ 2 million
$100,000 to $500,000
$100,000 to $500,000
$500,000 to $1 million
$100,000 or less
$100,000 to $500,000
$500,000
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE12

Firmswithbidcapacitiesabovethemedianfortheirindustrysegmentsarecountedasavailable
forlargerprojectsthanmostofthefirmsintheirlineofbusiness(aswellasbeingcountedas
availableforsmallerassignments).Thus,thesefirmsfiguremoreprominentlyintheavailability
analysisthanfirmswithsmallerbidcapacities.
Constructionfirms.Aninitialquestioniswhetherminorityandwomenownedfirmsareas
likelyasmajorityownedfirmstohaveabovemedianbidcapacityfortheirindustrysegment.
TheresultsfortransportationconstructionfirmsshowninFigureH11indicatethat,in
aggregate,fewerMBE/WBEshadanabovemedianbidcapacitycomparedwithmajorityowned
firms:
Nearlyonehalf(45%)ofmajorityownedconstructionfirmsindicatedthattheyhadabid
capacitythatwashigherthanthemedianfortheirsubindustry.
AboutfortypercentofWBEconstructionfirmshadanabovemedianbidcapacity.
Comparedtomajorityownedfirms,asmallershareofminorityownedconstructionfirms
(37%)reportedbidcapacitythatwashigherthanthemedianfortheirsubindustry.
7
Engineeringfirms.FigureH11alsoshowsthepercentageofengineeringrelatedfirms
reportingbidcapacitythatexceededthemedianfortheirsubindustry.
About39percentofmajorityownedengineeringrelatedfirmsreportedthattheyhadabid
capacitythatwashigherthanthemedianfortheirsubindustry.
Comparedtomajorityownedfirms,asimilarshareofWBEengineeringfirms(39%)and
minorityownedengineeringfirms(42%)hadanabovemedianbidcapacity
FigureH11.
Proportionoffirmswith
abovemedianbidcapacityby
ownership
Source:
BBCResearch&Consultingfrom2012
AvailabilityInterviews.
Firmownership Construction
Engineering
related
Minorityowned 37% 42%
Female 39% 39%
Majorityowned 45% 39%
7
OtherminorityincludesAfricanAmerican,AsianPacificAmerican,SubcontinentAsianAmericanandNativeAmerican
ownedfirms.Answerswerecombinedbecauseofarelativelylownumberofobservationsfortheseminoritygroups.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE13

Furtheranalysis.BBCconsideredwhetherneutralfactorscouldaccountforthedisparitiesinbid
capacityidentifiedforMBEandWBEconstruction.BBCalsoexaminedbidcapacityfor
engineeringfirms.
Thereareanumberofvariablesfromtheavailabilityinterviewsthatmaybecorrelatedwithbid
capacityforexample,annualrevenue,numberofemployees,andwhetherafirmhasmultiple
establishmentsinCalifornia.However,thedirectionofcausationforthesefactorsisunclear.Do
firmshavegreaterbidcapacitybecausetheyhavemoreemployees,ordotheyhavemore
employeesbecausetheybidonandwinlargerprojects?
Afterconsideringthearrayoffirmcharacteristicsfromtheavailabilityinterviews,thestudy
teamdeterminedthattheageoffirmswastheneutralfactorthatmightbestexplaindifferences
inbidcapacity(withinasubindustry)whilebeingtrulyexternaltothatcapacity.Theoretically,
thelongerfirmsareinbusiness,thelargerthecontractsorsubcontractstheymightpursue.
Totestthishypothesis,thestudyteamconductedseparatelogisticregressionanalysesforthe
constructionandengineeringrelatedindustriestodeterminewhetherbidcapacitycouldbeat
leastpartlyexplainedbytheageofthefirmandwhetherminorityandwomenownedfirms
differfrommajorityownedfirmsofsimilarages(aftercontrollingforsubindustry).
TheresultsfortheCaliforniaconstructionindustryareshowninFigureH12.Theresultsofthe
logisticregressionindicatedthefollowing:
Theageofthefirmwasasignificantpredictorofhavingabovemedianbidcapacity.The
olderafirm,themorelikelyitistohaveanabovemedianbidcapacity.
WBEownershiphadanegativeeffectonhavingaboveaveragebidcapacityforfirmsinthe
constructionindustry,butthateffectwasnotstatisticallysignificantaftercontrollingfor
subindustryandfirmage.
Minorityownershiphadanegativeeffectonhavingaboveaveragebidcapacityforfirmsin
theconstructionindustry,butthateffectwasnotstatisticallysignificant.
FigureH12.
Californiatransportationconstruction
industrybidcapacitymodel
Note:
**Denotesstatisticalsignificanceatthe95%confidencelevel.
Source:
BBCResearch&Consultingfrom2012AvailabilityInterviews.
Variable Coefficient ZStatistic
Constant 0.92 8.10
**
Ageoffirm 0.03 7.68 **
Minority 0.10 0.71
Female 0.16 0.94
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE14

ResultsfortheCaliforniaengineeringrelatedindustryareshowninFigureH13.Thelogistic
regressionmodelfortheindustryindicated:
Ageofthefirmwasasignificantpredictorofhavingaboveaveragebidcapacityfor
engineeringrelatedbusinesses.Theolderafirm,themorelikelyitistohaveanabove
medianbidcapacity.
Minorityownershiphadstatisticallysignificantpositiveeffectsonhavingaboveaverage
bidcapacityforfirmsintheengineeringrelatedindustry.Aftercontrollingforsubindustry
andfirmage,minorityownedfirmsweremorelikelytohaveabovemedianbidcapacity.
WBEownershipdidnothavestatisticallysignificanteffectsonabovemedianbidcapacity.
FigureH13.
Californiatransportationengineering
relatedindustrybidcapacitymodel
Note:
**Denotesstatisticalsignificanceatthe95%confidencelevel.
Source:
Variable Coefficient ZStatistic
Constant 1.16 9.28
**
Ageoffirm 0.03 7.07 **
Minority 0.43 2.78 **
Female 0.24 1.21
BBCResearch&Consultingfrom2012AvailabilityInterviews.
Summaryofmarkets,contractingrolesandbidcapacity.Thetelephoneinterview
resultsshowthatmanyMBE/WBEsattempttoworkasprimecontractorsandassubcontractors
onbothpublicandprivatesectorcontracts:
Thetelephoneinterviewresultsforfirmsinthetransportationconstructionindustryfound
thatMBE/WBEswerenomorelikelytohavepursuedworkintheprivatesectorthanthe
publicsectorwithinthepastfiveyears.
EngineeringrelatedMBE/WBEswereaboutaslikelyasconstructionMBE/WBEstopursue
workinthepastfiveyears.
Overall,MBEswherelesslikelytobidonpublicandprivatesectorworkthanWBEsand
majorityownedfirmsinthepastfiveyears.
DatafromtheavailabilityinterviewsshowedmoreindicesofsuccessforWBEsthanforMBEs:
Overall,WBEsthathadbidonpublicandprivatesectorconstructionworkweremore
successfulinobtainingatleastsomeworkcomparedwithMBEsandmajorityownedfirms.
WBEsintheengineeringindustrywerealsomoresuccessfulinreceivingatleastsome
publicsectorworkthanMBEsandmajorityownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE15

SomeresultsindicatedcertaindifferencesforMBEs:
Forbothpublicandprivatesectorwork,MBEconstructionandengineeringfirmswereless
likelytobidasaprimecontractorthanWBEsandmajorityownedfirms.
Overall,MBEswerealsolesslikelytoreportthattheyhadbeensuccessfulwhenpursuing
constructionandengineeringrelatedwork.
Thereweresomedifferencesinthelargesttransportationrelatedcontractandsubcontractthat
firmshadreceivedinCaliforniainthepastfiveyears.Amongconstructionfirms,MBE/WBEs
weremorelikelytoreportthattheirlargestcontractwasworthlessthan$100,000.Compared
toMBE/WBEs,alargershareofmajorityownedfirmsreceivedcontractsorsubcontractsworth
atleast$1million.Thiswasalsotrueforengineeringrelatedfirmswhenexaminingcontractsof
$5millionormore.
BBCalsoexaminedthelargestcontractsfirmshadbidonorreceivedinthetransportation
contractingindustryinCaliforniainthepastfiveyears(bidcapacity).
Minorityandwomenownedconstructionfirmswerelesslikelythanmajorityowned
firmstohavebidcapacityexceedingthemedianfortheirsubindustry.
Overall,MBE/WBEfirmsintheengineeringindustrywereaboutaslikelytohaveabove
averagebidcapacityasmajorityownedfirmswithsimilarspecializations.
BusinessClosures,Expansions,andContractions
BBCusedU.S.SmallBusinessAdministration(SBA)datatoexaminebusinessoutcomes
includingclosures,expansions,andcontractionsforMBE/WBEsinCaliforniaandthenation.
TheSBAanalysescomparebusinessoutcomesforminorityownedbusinesses(bydemographic
group)tobusinessoutcomesforallfirms.
Businessclosures.Highratesofbusinessclosuresmayreflectadversebusinessconditionsfor
minoritybusinessowners.
OverallratesofbusinessclosuresinCalifornia.A2010SBAreportinvestigatedbusiness
dynamicsandwhetherminorityownedcompaniesweremorelikelytoclosethanotherfirms.
Bymatchingdatafrombusinessownerswhorespondedtothe2002U.S.CensusBureauSBOto
datafromtheCensusBureaus19892006BusinessInformationTrackingSeries,theSBA
reportedonbusinessclosureratesbetween2002and2006acrossdifferentsectorsofthe
economy.
8
FigureH14presentsthosedataforAfricanAmerican,AsianAmerican,and
HispanicAmericanownedfirmsaswellasfornonHispanicwhiteownedfirms.
8
Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOfficeof
Advocacy.WashingtonD.C.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE16

AsshowninFigureH14,42percentofAfricanAmericanownedfirmsthatwereoperatingin
Californiain2002hadclosedbytheendof2006,ahigherratethanthoseofothergroups,
includingnonHispanicwhiteownedfirms(31%).HispanicAmerican(34%)andAsian
Americanownedfirms(33%)alsohadclosureratesthatwerehigherthanthatofnonHispanic
whiteownedfirms.Differencesinclosureratesbetweenminorityownedfirmsandnon
HispanicwhiteownedfirmsweresimilarinCaliforniaandintheUnitedStatesduringthattime
period.
FigureH14.
Ratesofbusinessclosure,20022006,CaliforniaandtheU.S.
Note: Datareferonlytononpubliclyheldbusinessesonly.Assamplesizesarenotreported,statisticalsignificanceofthese
resultscannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministration
OfficeofAdvocacy.WashingtonD.C.
Ratesofbusinessclosuresbyindustry.TheSBAreportalsoexaminednationalfirmclosure
ratesbyrace/ethnicityfor21differentindustryclassifications.FigureH15comparesnational
ratesoffirmclosureforthetwoindustryclassificationsmostrelatedtothetransportation
contractingindustryconstructionandprofessional,scientific,andtechnicalservices(which
includesengineering).Closureratesforallindustriesbyrace/ethnicityarealsoshowninFigure
H20forcomparison.
AfricanAmericanownedfirmsthatwereoperatingintheUnitedStatesin2002hadthehighest
rateofclosureby2006amongalltheracial/ethnicgroupsincludingnonHispanicwhite
ownedfirmsinconstruction(43%),professional,scientific,andtechnicalservices(39%),and
allindustries(39%).HispanicAmericanownedfirmsandAsianAmericanownedfirmsthat
wereoperatingin2002werebothalsomorelikelytohaveclosedby2006thannonHispanic
whiteownedfirmsinconstruction,professional,scientific,andtechnicalservices,andall
industries.Thestudyteamcouldnotexaminewhetherthosedifferencesalsoexistedin
California,becausetheSBAanalysisbyindustrywasnotavailableforindividualstates.
Unsuccessfulclosures.Notallfirmclosurescanbeinterpretedasunsuccessfulclosures.Firms
mayclosewhenanownerretiresoramoreprofitablebusinessalternativeemerges,bothof
whichrepresentsuccessfulclosures.The1992CharacteristicsofBusinessOwners(CBO)
SurveyisoneofthefewCensusBureausourcestoclassifyfirmclosuresintosuccessfuland
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE17

unsuccessfulsubsets.
9
The1996CBOsurveyaskedownersofbusinessesthathadclosed
between1992and1995,Whichitembelowdescribesthestatusofthisbusinessatthetimethe
decisionwasmadetoceaseoperations?Onlytheresponsessuccessfulandunsuccessful
werepermitted.Afirmthatreportedbeingunsuccessfulatthetimeofclosurewasunderstood
tohavefailed.
FigureH15.
Ratesofbusinessclosure,20022006,construction;professional,scientific,
andtechnicalservices;andallindustriesintheU.S.
Note: Datareferonlytononpubliclyheldbusinesses.Assamplesizesarenotreported,statisticalsignificanceoftheseresults
cannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOffice
ofAdvocacy.WashingtonD.C.
9
CBOdatafromthe1997and2002EconomicCensusesdonotincludestatisticsonsuccessfulandunsuccessfulbusiness
closures.Todate,the1992CBOistheonlyU.S.Censusdatasetthatincludessuchstatistics.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE18

FigureH16presentsCBOdataontheproportionoffirmsthatclosedduetofailurebetween
1992and1995inconstruction,professional,scientific,andtechnicalservices,andall
industries.
10,11
AccordingtoCBOdata,AfricanAmericanownedfirmswerethemostlikelyto
reportbeingunsuccessfulatthetimeatwhichtheirbusinessesclosed.About77percentof
AfricanAmericanownedfirmsinallindustriesreportedanunsuccessfulbusinessclosureinthe
1996CBO,comparedwithonly61percentofnonHispanicwhitemaleownedfirms.
UnsuccessfulclosurerateswerealsorelativelyhighforHispanicAmericanownedfirms(71%)
andforfirmsownedbyotherminoritygroups(73%).Therateofunsuccessfulclosuresfor
womenownedfirms(61%)wassimilartothatofnonHispanicwhitemaleownedfirms.
FigureH16.
Unsuccessfulclosureratesforfirmsthatclosedbetween1992and1995intheU.S.
Source: U.S. Census Bureau, 1996 Characteristics of Business Owners Survey (CBO).
10
AllCBOdatashouldbeinterpretedwithcautionasfirmsthatdidnotrespondtothesurveycannotbeassumedtohavethe
samecharacteristicsofonesthatdid.Holmes,ThomasJ.andJamesSchmitz.1996.NonresponseBiasandBusinessTurnover
Rates:TheCaseoftheCharacteristicsofBusinessOwnersSurvey.JournalofBusiness&EconomicStatistics.14(2):231241.
ThisreportdoesnotincludeCBOdataonoverallfirmclosureratesbecausefirmsnotrespondingtothesurveywerefoundto
bemuchmorelikelytohaveclosedthanonesthatdid.
11
ThisstudyincludesCBOdataonfirmsuccessbecausethereisnocompellingreasontobelievethatclosedfirmsresponding
tothesurveywouldhavereporteddifferentratesofsuccess/failurethanthoseclosedfirmsthatdidnotrespondtothesurvey.
Headd,Brian.U.S.SmallBusinessAdministration,OfficeofAdvocacy.2000.BusinessSuccess:Factorsleadingtosurvivingand
closingsuccessfully.WashingtonD.C.:12.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE19

Intheconstructionindustry,minorityandwomenownedfirmsweremorelikelytoreport
unsuccessfulbusinessclosuresthannonHispanicwhitemaleownedfirms(58%).Thosetrends
weresimilarintheprofessionalservicesindustrywithoneexceptionwomenowned
businesses(52%)werelesslikelytoreportunsuccessfulclosuresthannonHispanicwhite
maleownedfirms(59%).
Reasonsfordifferencesinunsuccessfulclosurerates.Severalresearchershaveoffered
explanationsforhigherratesofunsuccessfulclosureratesamongminorityandwomenowned
firmscomparedwithnonHispanicwhiteownedfirms:
Unsuccessfulbusinessfailuresofminorityownedfirmsarelargelyduetobarriersinaccess
tocapital.Regressionanalyseshaveidentifiedinitialcapitalizationasthemostsignificant
factorindeterminingfirmviability.Becauseminorityownedfirmssecuresmalleramounts
ofdebtequityintheformofloans,theyaremoreliabletofail.Difficultyinaccessingcapital
isfoundtobeparticularlyacuteforminorityownedfirmsintheconstructionindustry.
12
Priorworkexperienceinafamilymembersbusinessorsimilarexperiencesarefoundtobe
strongdeterminantsofbusinessviability.Becauseminoritybusinessownersaremuchless
likelytohavesuchexperience,theirfirmsarelesslikelytosurvive.
13
Similarresearchhas
beenconductedforwomenownedbusinessesandfoundsimilargendergapsinthe
likelihoodofbusinesssurvival.
14
Levelofeducationisfoundtobeastrongdeterminantofbusinesssurvival.Educational
attainmentexplainsasignificantportionofthegapinfirmclosureratesbetweenAfrican
Americanownedandnonminorityownedfirms.
15
Nonminoritybusinessownershavetheopportunitytopursueawiderarrayofbusiness
activities,whichincreasestheirlikelihoodofclosingsuccessfulbusinessestopursuemore
profitablebusinessalternatives.Minoritybusinessowners,especiallythosewhodonot
speakEnglish,havelimitedemploymentoptionsandarelesslikelytocloseasuccessful
business.
16
Thepossessionofgreaterinitialcapitalandgenerallyhigherlevelsofeducationamong
AsianAmericansdeterminethehighrateofsurvivalofAsianAmericanownedfirms
comparedtootherminorityownedfirms.
17
12
Bates,TimothyandCarenGrown.1991.CommercialLendingPracticesandtheDevelopmentofBlackOwnedConstruction
Companies.CenterforEconomicStudies,U.S.CensusBureau.
13
Robb,A.andFairlie,R.2005.WhyareBlackOwnedBusinessesLessSuccessfulthanWhiteOwnedBusinesses?TheRoleof
Families,Inheritances,andBusinessHumanCapital.UniversityofCalifornia,SantaCruz.
14
Fairlie,R.andA.Robb.2009.GenderDifferencesinBusinessPerformance:EvidencefromtheCharacteristicsofBusiness
OwnersSurvey.UniversityofCalifornia,SantaCruz.
15
Ibid.24.
16
Bates,Timothy.2002.AnalysisofYoungSmallFirmsThatHaveClosed:DelineatingSuccessfulfromUnsuccessful
Closures.CenterforEconomicStudies,U.S.CensusBureau.
17
Bates,Timothy.1993.DeterminantsofSurvivalandProfitabilityAmongAsianImmigrantOwnedSmallBusinesses.
CenterforEconomicStudies,U.S.CensusBureau.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE20

Insum,datasuggestthatclosureratesforAfricanAmericanandHispanicAmericanowned
firmsinCaliforniaarehigherthanforotherfirms.Basedonnationalresultsfortheconstruction
andprofessional,scientific,andtechnicalservicesindustries,AfricanAmericanownedfirmshad
higherratesofclosureinthoseindustriesthanotherfirms.NationaldataindicatethatAfrican
Americans,HispanicAmericans,andotherminoritieswhoownedandclosedfirmsaremore
likelythannonHispanicwhiteownedfirmstohavedonesobecausethefirmwasunsuccessful.
Severalstudieshaveexaminedwhybusinessfailureratesarehigherforfirmsownedbycertain
minoritygroupsatthenationallevel.
Expansionsandcontractions.Comparingratesofexpansionandcontractionbetween
minorityownedandnonHispanicwhitemaleownedbusinessesisalsousefulinassessingthe
relativesuccessofminorityownedbusinesses.Aswithclosuredata,onlysomeofthedataon
expansionsandcontractionsthatwereavailableforthenationwerearealsoavailableatthe
statelevel.
Expansions.The2010SBAstudyofminoritybusinessdynamicsfrom20022006examinedthe
numberofnonpubliclyheldCaliforniabusinessesthatexpandedandcontractedbetween2002
and2006.FigureH17presentsthepercentageofallbusinesses,byrace/ethnicityofownership,
thatincreasedtheirtotalemploymentbetween2002and2006.Thosedataarepresentedfor
Californiaandforthenationasawhole.AccordingtotheSBAstudy,approximately28percent
ofnonHispanicwhiteownedCaliforniabusinessesexpandedbetween2002and2006,
comparedto26percentofAfricanAmericanownedbusinesses,29percentofAsianAmerican
ownedbusinesses,and30percentofHispanicAmericanownedbusinesses.Expansionresults
weresimilarforthenationasawhole.
18
FigureH17.
Percentageoffirmsthatexpanded,20022006
Note: Datareferonlytononpubliclyheldbusinesses.Assamplesizesarenotreported,statisticalsignificanceoftheseresults
cannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOffice
ofAdvocacy.WashingtonD.C.
18
Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOfficeof
Advocacy.WashingtonD.C.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE21

FigureH18presentsthepercentageoffirmsthatexpandedinconstructionandprofessional,
scientific,andtechnicalservices,andinallindustriesintheUnitedStates.The2010SBAstudy
didnotreportresultsforfirmsinindividualindustriesatthestatelevel.Atthenationallevel,
thepatternsevidentforconstructionandprofessional,scientific,andtechnicalserviceswere
similartothoseobservedforallindustries:
AfricanAmericanownedconstructionandprofessional,scientific,andtechnicalservices
firmswerelesslikelytohaveexpandedbetween2002and2006thannonHispanicwhite
ownedfirms.
HispanicAmericanandAsianAmericanownedcompaniesinbothconstructionand
professional,scientific,andtechnicalserviceswereslightlymorelikelytohaveexpanded
between2002and2006thannonHispanicwhiteownedfirms.
FigureH18.
Percentageoffirmsexpanding,20022006,U.S.construction;professional,
scientific,andtechnicalservices;andallindustries
Note: Datareferonlytononpubliclyheldbusinesses.Assamplesizesarenotreported,statisticalsignificanceoftheseresults
cannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOffice
ofAdvocacy.WashingtonD.C.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE22

Contractions.FigureH19showsthepercentageofnonpubliclyheldbusinessesoperatingin
2002thatreducedtheiremployment(contracted)between2002and2006inCaliforniaandin
thenationasawhole.Atboththestatelevelandthenationallevel,AfricanAmerican(18%),
AsianAmerican(23%),andHispanicAmericanownedbusinesses(22%)wereslightlyless
likelytohavecontractedbetween2002and2006thannonHispanicwhiteownedbusinesses.
FigureH19.
Percentageoffirmscontracting,20022006
Note: Datareferonlytononpubliclyheldbusinesses.Assamplesizesarenotreported,statisticalsignificanceoftheseresults
cannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOffice
ofAdvocacy.WashingtonD.C.
TheSBAstudydidnotreportstatespecificresultsrelatingtocontractionsinindividual
industries.FigureH20showsthepercentageofbusinessesthatcontractedinconstruction,
professional,scientific,andtechnicalservices,andallindustriesatthenationallevel.Compared
tononHispanicwhiteownedconstructionfirmsintheUnitedStates,aslightlysmaller
percentageofAfricanAmerican,HispanicAmerican,andAsianAmericanownedconstruction
andprofessional,scientific,andtechnicalservicesfirmscontractedbetween2002and2006.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE23

FigureH20.
Ratesofbusinesscontraction,20022006,U.S.construction;professional,scientificand
technicalservices;andallindustries
Note: Datareferonlytononpubliclyheldbusinesses.Assamplesizesarenotreported,statisticalsignificanceoftheseresults
cannotbedetermined;however,statisticsareconsistentwithSBAdataqualityguidelines.
Source: Lowrey,Ying.2010.Race/EthnicityandEstablishmentDynamics,20022006.U.S.SmallBusinessAdministrationOffice
ofAdvocacy.WashingtonD.C.
Summary.The2010SBAstudyfoundofminoritybusinessdynamicsfoundthat,between2002
and2006,29percentofnonpubliclyheldU.S.businesseshadexpandedtheiremployment,24
percenthadcontractedtheiremployment,and30percenthadclosed.InCalifornia:
AfricanAmericanownedfirmsweremorelikelythannonHispanicwhiteownedfirmsand
otherfirmstoclose.AfricanAmericanownedfirmswerelesslikelythanotherfirmsto
expand.
HispanicAmericanownedfirmswerealsomorelikelythannonHispanicwhiteowned
firmstocloseortocontract.However,HispanicAmericanownedfirmswereslightlymore
likelytoexpandthannonHispanicwhiteownedfirms.
Overall,minorityownedfirmswerelesslikelytocontractthannonHispanicwhiteowned
firms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE24

BusinessReceiptsandEarnings
Annualbusinessreceiptsandearningforbusinessownersarealsoindicatorsofthesuccessof
businesses.Thestudyteamexamined:
Businessreceiptsdatafromthe2007SBO;
Businessearningsdataforbusinessownersfromthe2000Censusand20072009ACS
19
;
and
AnnualrevenuedataforCaliforniatransportationconstructionandengineeringfirmsthat
thestudyteamcollectedaspartofavailabilityinterviews.
Businessreceipts.BBCexaminedreceiptsforfirmsinCaliforniaandtheU.S.usingdatafrom
the2007SBO,conductedbytheU.S.CensusBureau.BBCalsoanalyzedreceiptsforfirmsin
individualindustries.TheSBOreportsbusinessreceiptsseparatelyforemployerfirms(i.e.,
thosewithpaidemployeesotherthanthebusinessownerandfamilymembers)andforall
firms.
20
Receiptsforallfirms.FigureH21presents2007meanannualreceiptsforemployerand
nonemployerfirms,byrace/ethnicityandgender.TheSBOdataforfirmsacrossallindustries
inCaliforniaandinthenationasawholeindicatethataveragereceiptsforminorityand
womenownedfirmsweremuchlowerthantheaverageforallfirms,withsomegroupsfaring
worsethanothers.AveragereceiptsforAfricanAmericanownedfirms($139,000),Hispanic
Americanownedfirms($142,000)andNativeHawaiianownedfirms($151,000)wereabout
onethirdthatofallfirms($420,000).AveragereceiptsforAmericanIndianandAlaskaNative
ownedfirms($123,000)were29percentoftheaverageforallfirms.AsianAmericanowned
firmshadhigheraveragereceipts($363,000)thanotherminoritygroupsin2007,althoughthey
werestillbelowtheaverageforallfirms.Averagereceiptsforwomenownedfirms($176,000)
wereabout42percentoftheaverageforallfirms.
AsshowninFigureH21,disparitiesinbusinessreceiptsforminorityandwomenowned
businessescomparedtoallfirmsinCaliforniaarebroadlyconsistentwiththoseseeninthe
UnitedStatesasawhole.However,differencesinaveragereceiptsbetweenAfricanAmerican
ownedfirms($70,000)andallfirms($416,000)werelargerintheU.S.thanCalifornia.That
patternwasalsotrueforwomenownedfirms($154,000)intheU.S.
A2007SBAstudyidentifieddifferencessimilartothosepresentedinFigureH21when
examiningfirmsinallindustriesacrosstheU.S.
21
19
Itshouldbenotedthatthe20072009ACSdatawerecollectedduringtheeconomicrecessionwhichbeganinlate2007.
20
WeuseallfirmstodenoteSBOdatausedinthisanalysis;thedataincludeincorporatedandunincorporatedfirms,butnot
publiclytradedcompaniesorotherfirmsnotclassifiablebyrace/ethnicityandgender.
21
Lowrey,Ying.2007.MinoritiesinBusiness:ADemographicReviewofMinorityBusinessOwnership.OfficeofEconomic
Research,OfficeofAdvocacy,U.S.SmallBusinessAdministration.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE25

2007
FigureH21.
Meanannualreceipts
(thousands)forall
firms,byrace/ethnicity
andgenderofowners,
Note:
Includesemployerandnonemployer
firms.Doesnotincludepubliclytraded
companiesorotherfirmsnot
classifiablebyrace/ethnicityand
gender.
Source:
2007SurveyofBusinessOwners,part
oftheU.S.CensusBureaus2007
EconomicCensus.
FigureH22presentsaverageannualreceiptsin2007foronlyemployerfirmsinCaliforniaand
intheUnitedStates.Minorityandwomenownedemployerfirmshadsubstantiallylower
averagebusinessreceiptsthanallemployerfirmsinCaliforniaandinthenationasawhole.
AverageannualreceiptsforAfricanAmerican($1.6million)andAsianAmericanowned
employerfirms($1.4million)inCaliforniaweregreaterthanfirmsownedbyotherminority
groupsbutstillbelowtheaverageforallfirms($2.0million).AveragereceiptsforAmerican
IndianandAlaskaNativeownedfirms($837,000)werelessthanhalfoftheaverageforallfirms
inCalifornia.
Averagereceiptsforwomenownedemployerfirms($1.3million)wereabouttwothirdsthatof
allfirmsinCalifornia.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE26

FigureH22.
Meanannualreceipts
(thousands)for
employerfirms,by
race/ethnicityand
genderofowners,2007
Note:
Includesonlyemployerfirms.Does
notincludepubliclytraded
companiesorotherfirmsnot
classifiablebyrace/ethnicityand
gender.
Source:
2007SurveyofBusinessOwners,
partoftheU.S.CensusBureaus
2007EconomicCensus.
Receiptsbyindustry.ThestudyteamalsoanalyzedSBOreceiptsdataseparatelyforfirmsin
constructionandprofessional,scientific,andtechnicalservices.FigureH23presentsmean
annualreceiptsin2007forall(i.e.,employerandnonemployerfirmscombined)construction
andprofessional,scientific,andtechnicalservicesfirmsandforjustemployerfirmsby
racial/ethnicandgendergroup.ResultsarepresentedforCaliforniaandforthenationasa
whole.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE27

FigureH23.
Meanannualreceipts(thousands)forfirmsintheconstructionandprofessional,scientificand
technicalservicesindustries,byrace/ethnicityandgenderofowners,2007
Allfirms
C
o
n
s
t
r
u
c
t
i
o
n
P
r
o
f
e
s
s
i
o
n
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l
,

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i
e
n
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f
i
c
&

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e
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h
n
i
c
a
l

s
e
r
v
i
c
e
s
Employerfirms
C
o
n
s
t
r
u
c
t
i
o
n
P
r
o
f
e
s
s
i
o
n
a
l
,

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i
e
n
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i
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i
c
&

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a
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s
e
r
v
i
c
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s

California
AfricanAmerican
AsianAmerican
HispanicAmerican
AmericanIndianandAlaskaNative
NativeHawaiianandotherPacificIslander
Female
Allfirms
NA
$323
$202
$254
$483
$485
$600
$92
$149
$108
$81
$246
$106
$205
NA $725
$1,655 $796
$1,146 $691
$1,232 $324
$2,378 NA
$2,179 $643
$2,174 $977
UnitedStates
AfricanAmerican
AsianAmerican
HispanicAmerican
AmericanIndianandAlaskaNative
NativeHawaiianandotherPacificIslander
Female
Allfirms
$107
$273
$167
$262
$363
$361
$447
$78
$201
$121
$116
$187
$98
$201
$1,069 $717
$1,533 $950
$1,083 $693
$1,390 $630
$1,628 $1,148
$1,625 $543
$1,789 $863
Notes: Doesnotincludepubliclytradedcompaniesorotherfirmsnotclassifiablebyrace/ethnicityandgender.
NAdenotesthatdatawerenotavailableatthetimeofpublicationandaresubjecttorevision.
Source: 2007SurveyofBusinessOwners,partoftheU.S.CensusBureaus2007EconomicCensus.
Construction.IntheCaliforniaconstructionindustry,average2007receiptsforminorityand
womenownedfirmswerelowerthantheaverageforallfirms($600,000).Resultsforallfirms
(i.e.,employerandnonemployerfirmscombined)indicatethat:
AveragereceiptsforHispanicAmericanownedconstructionfirms($202,000)were
approximatelyonethirdthatofallCaliforniaconstructionfirms.
AveragereceiptsforAmericanIndianandAlaskaNativeownedconstructionfirms
($254,000)werelessthanhalfthatofallCaliforniaconstructionfirms.
AveragereceiptsforAsianAmericanandNativeHawaiianownedconstructionfirmswere
higherthanthoseofallotherminorityownedconstructionfirms,butwerestill
substantiallybelowthatofallCaliforniaconstructionfirms.
AveragereceiptsforwomenownedconstructionfirmsinCalifornia($485,000)wereless
thantheaverageforallfirms.
DatawerenotavailableforAfricanAmericanownedconstructionfirmsinCalifornia.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE28

AlthoughSBOdataindicatedthataveragereceiptswerehigherforconstructionemployerfirms
thanforallconstructionfirms(i.e.,employerandnonemployerfirmscombined),average
receiptsforminorityandwomenownedconstructionemployerfirmswerestillsubstantially
lessthanthatofallconstructionemployerfirms($2.2million).Thatpatternwasevidentin
Californiaandinthenationasawhole.
Professional,scientific,andtechnicalservices.IntheCaliforniaprofessional,scientific,and
technicalservicesindustry,minorityownedfirmshadloweraveragereceiptsthanallfirms.
Resultsforallfirms(i.e.,employerandnonemployerfirmscombined)intheprofessional,
scientific,andtechnicalservicesindustryindicatethat:
AveragereceiptsforAfricanAmericanownedfirms($92,000)wereabout45percentofthat
ofallfirms($205,000).
AveragereceiptsforAmericanIndianandAlaskaNativeownedfirms($81,000)were
approximately39percentofthatofallfirms.
AveragereceiptsforAsianAmericanownedbusinesses($149,000)weresubstantiallyless
thanthatofallfirms.
AveragereceiptsforHispanicAmericanowned($108,000)wereabouthalfthatofallfirms.
Averagereceiptsforwomenownedfirms($106,000)werealsoabouthalfthatofallfirms.
AveragereceiptsforNativeHawaiianownedfirmswerehigherthanthatofallfirms.
Anexaminationofonlyemployerfirmsinprofessional,scientific,andtechnicalservicesyielded
similarresultsminorityandwomenownedfirmshadbetween33percentand82percentof
theaverageannualreceiptsofallCaliforniaemployerfirmsinprofessional,scientific,and
technicalservicesin2007($977,000).
Businessearnings.Inordertoassessthesuccessofselfemployedminoritiesandwomenin
thetransportationcontractingindustry,BBCexaminedearningsofbusinessownersusingPUMS
fromthe2000U.S.Censusand20072009ACS.BBCanalyzedearningsofincorporatedand
unincorporatedbusinessownersage16andoverwhoreportedpositivebusinessearnings.
Construction business owner earnings, 1999.FigureH24showsaverageearningsin1999for
businessownersintheconstructionindustryinCaliforniaandintheUnitedStates.Business
earningresultsfor1999werebasedonthe2000Census,inwhichindividualswereaskedto
givetheirbusinessincomeforthepreviousyear:
Onaverage,HispanicAmericanbusinessownersinCalifornia($26,989)earned
substantiallylessthannonHispanicwhiteconstructionbusinessowners($40,225).
AfricanAmericanconstructionbusinessowner($27,779)alsoearnedsubstantiallylessthan
nonHispanicwhitebusinessowners.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE29

NativeAmerican($39,549)andAsianAmerican($34,474)Californiaconstructionbusiness
ownersalsoearnedlessthannonHispanicwhitebusinessowners,butthosedifferences
werenotstatisticallysignificant,inpartduetosmallsamplesizes.Atthenationallevel,
differencesinearningsbetweenNativeAmerican($27,199)andnonHispanicwhite
($30,787)constructionbusinessownerswerestatisticallysignificant.
FemaleconstructionbusinessownersinCalifornia($27,445)earnedless,onaverage,than
maleconstructionbusinessowners($37,290).
FigureH24.
Meanannualbusinessownerearningsintheconstructionindustry,1999
Note: Thesampleuniverseisbusinessownersage16andoverwhoreportedpositiveearnings.Allamountsin1999dollars.
*,**DenotesstatisticallysignificantdifferencesfromnonHispanicwhites(forminoritygroups)orfrommen(forwomen)
atthe90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom2000U.S.Census5%sample.TherawdataextractwasobtainedthroughtheIPUMS
programoftheMNPopulationCenter:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE30

Constructionbusinessownerearnings,20062009.The20072009ACSalsoreportsbusiness
ownerearnings.BecauseofthewaythattheU.S.CensusBureauconductseachyearsACS,
earningsforbusinessownersreportedinthe20072009samplewerefortheprevious12
monthsbetween2006and2009.
22
However,alldollaramountsarepresentedin2009dollars.
FigureH25showsearningsin20062009forbusinessownersintheconstructionindustryin
Californiaandthenationasawhole.
FigureH25.
Meanannualbusinessownerearningsintheconstructionindustry,20062009
Note: Thesampleuniverseisbusinessownersage16andoverwhoreportedpositiveearnings.
Allamountsin2009dollars.
*,**DenotesstatisticallysignificantdifferencesfromnonHispanicwhites(forminoritygroups)orfrommen(forwomen)
atthe90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom20072009ACS.TherawdataextractwasobtainedthroughtheIPUMSprogramofthe
MNPopulationCenter:http://usa.ipums.org/usa/.
Similarto2000earningsdata,therewerelargedifferencesinearningsbetweenminority
businessownersandnonHispanicwhitebusinessowners,bothinCaliforniaandnationally.In
California,earningsdifferencesbetweenminorityandnonHispanicwhitebusinessowners
weremorepronouncedin20062009thanin2000.Incontrast,theearningsdifferencebetween
femaleandmalebusinessownerswassmallerin20062009thanin2000,andwasnot
statisticallysignificant.
22
Forexample,ifabusinessownercompletedthesurveyonJanuary1,2007,thefiguresfortheprevious12monthswould
referenceJanuary1,2006toDecember31,2006.Similarly,abusinessownercompletingthesurveyDecember31,2009would
referenceamountssinceJanuary1,2009.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE31

Engineeringbusinessownerearnings,1999.FigureH26presentsaverageearningsin1999for
businessownersintheengineeringindustryinCaliforniaandtheUnitedStates.Thoseresults
arebasedonthe2000Census.Duetosmallsamplesizesforindividualracial/ethnicgroupsin
theengineeringindustry,BBCgroupedallminoritybusinessownersexceptAsianAmericans
together:
Onaverage,nonAsianminorityengineeringbusinessownersinCalifornia($33,822)earned
lessthannonHispanicwhiteengineeringbusinessowners($49,983)in1999,butthat
differencewasnotstatisticallysignificant.
FemaleengineeringbusinessownersinCalifornia($32,883)earnedlessthanmalebusiness
owners($50,887)in1999.
FigureH26.
Meanannualbusinessownerearningsintheengineeringindustry,1999
Note: Thesampleuniverseisbusinessownersage16andoverwhoreportedpositiveearnings.MinorityincludesAfricanAmericans,
HispanicAmericans,AsianPacificAmericans,SubcontinentAsianAmericans,NativeAmericansandotherminoritygroups.
Samplesizesfortheserace/ethnicitygroupsweretoosmalltoanalyzeindividually.
Allamountsin1999dollars.
**DenotesstatisticallysignificantdifferencesfromnonHispanicwhites(forminoritygroups)orfrommen(forwomen)at
the90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom2000U.S.Census5%sample.TherawdataextractwasobtainedthroughtheIPUMSprogram
oftheMNPopulationCenter:http://usa.ipums.org/usa/.
Engineeringbusinessownerearnings,20062009.Aswithearningsdatafortheconstruction
industry,earningsforengineeringbusinessownersthatwerereportedinthe20072009ACS
samplewereforthetimeperiodbetween2006and2009.ThoseresultsareshowninFigureH
27.Alldollaramountsarepresentedin2009dollars.Duetosmallsamplesizesforindividual
racial/ethnicgroupsintheengineeringindustry,BBCgroupedallminoritybusinessowners
exceptAsianAmericanstogether.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE32

AsshowninFigureH27,in20062009,earningsfornonAsianminority($45,140)andfemale
($35,282)businessownersintheCaliforniaengineeringindustrywerelowerthanfornon
Hispanicwhite($62,508)businessownersandmalebusinessowners($67,045),respectively.
FigureH27.
Meanannualbusinessownerearningsintheengineeringindustry,20062009
Note: Thesampleuniverseisbusinessownersage16andoverwhoreportedpositiveearnings.MinorityincludesAfricanAmericans,
HispanicAmericans,AsianPacificAmericans,SubcontinentAsianAmericans,NativeAmericansandotherminoritygroups.
Samplesizesfortheserace/ethnicitygroupsweretoosmalltoanalyzeindividually.
Allamountsin2009dollars.
**DenotesstatisticallysignificantdifferencesfromnonHispanicwhites(forminoritygroups)orfrommen(forwomen)atthe
90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom20072009ACS.TherawdataextractwasobtainedthroughtheIPUMSprogramoftheMN
PopulationCenter:http://usa.ipums.org/usa/.
Regressionanalysesofbusinessearnings.Differencesinbusinessearningsamongdifferent
racial/ethnicandgendergroupsmaybeatleastpartiallyattributabletoraceandgender
neutralfactorssuchasage,maritalstatus,andeducationalattainment.BBCperformed
regressionanalysesusing20072009ACSdatatoexaminewhetherthereweredifferencesin
20062009businessearningsbetweenminoritiesandnonHispanicwhitesandbetweenwomen
andmenafterstatisticallycontrollingforcertainraceandgenderneutralfactors.
BBCappliedanordinaryleastsquares(OLS)regressionmodeltothedatathatwasverysimilar
tomodelsreviewedbycourtsafterotherdisparitystudies.
23
Thedependentvariableinthe
modelwasthenaturallogarithmofbusinessearnings.Businessownersthatreportedzeroor
negativebusinessearningswereexcluded,aswereobservationsforwhichtheU.S.Census
23
Forexample,NationalEconomicResearchAssociates,Inc.2000.DisadvantagedBusinessEnterpriseAvailabilityStudy.
PreparedfortheMinnesotaDepartmentofTransportation;andNationalEconomicResearchAssociates,Inc.2004.
DisadvantagedBusinessEnterpriseAvailabilityStudy.PreparedfortheIllinoisDepartmentofTransportation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE33

Bureauhadimputedvaluesofbusinessearnings.Alongwithvariablesfortherace/ethnicityand
genderofbusinessowners,themodelalsoincludedavailablemeasuresfromthedata
consideredlikelytoaffectearningspotential,includingage,agesquared,maritalstatus,ability
tospeakEnglishwell,andeducationalattainment.BBCcreatedseparateregressionmodelsto
examinebusinessearningsintheCaliforniaconstructionindustryandengineeringindustries.
ConstructionindustryinCalifornia,20062009.FigureH28presentstheresultsofthe
regressionmodelfor20062009businessearningsintheCaliforniaconstructionindustry
(5,484observations).Themodelindicatedthatseveralraceandgenderneutralfactors
significantlypredictedearningsofbusinessownersintheCaliforniaconstructionindustry:
Olderbusinessownerstendedtohavegreaterbusinessearningsthanyoungerbusiness
owners(agehadlessofaneffectfortheoldestindividuals);
Marriedbusinessownerstendedtohavegreaterbusinessearningsthanunmarried
businessowners;
BusinessownerswhospokeEnglishwelltendedtohavegreaterbusinessearningsthan
businessownerswhodonot;and
Businessownerswithgreatereducationalattainment(suchasafouryeardegreeoran
advanceddegree)tendedtohavegreaterbusinessearningsthanbusinessownerswhodo
not.
Afterstatisticallycontrollingforraceandgenderneutralfactors,therewerestillstatistically
significanteffectsofraceandgender.Specifically,beingAfricanAmerican,HispanicAmerican,
orfemalewasassociatedwithlowerbusinessearnings.BeingAsianAmericanorNative
Americanalsoappearedtobeassociatedwithlowerbusinessearnings,butthosedifferences
werenotstatisticallysignificant(perhapsbecauseofsmallsamplesizes).
FigureH28.
Californiaconstructionbusinessownerearningsmodel,20062009
Variable Coefficient tstatistic
Constant
Age
Agesquared
Married
SpeaksEnglishwell
Lessthanhighschool
Somecollege
Fouryeardegree
Advanceddegree
AfricanAmerican
AsianAmerican
HispanicAmerican
NativeAmericanorotherminority
Female
6.966
0.117
0.001
0.411
0.297
0.126
0.030
0.255
0.349
0.450
0.130
0.169
0.360
0.434
25.21 **
9.11 **
9.06 **
8.39 **
5.24 **
1.98
0.42
3.50 **
3.10 **
2.33 *
1.48
2.61 *
1.68
3.72 **
Note: *,**Denotesstatisticalsignificanceatthe90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom20072009ACS.Therawdataextractwasobtainedthroughthe
IPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE34

EngineeringindustryinCalifornia,20062009.FigureH29presentstheresultsofthe
regressionmodelofbusinessownerearningsspecifictotheCaliforniaengineeringindustryin
20062009(688observations).Tworaceandgenderneutralfactorswerestatistically
significantinexplainingbusinessearningsintheCaliforniaengineeringindustry:
Olderbusinessownerstendedtohavegreaterbusinessearningsthanyoungerbusiness
owners(agehadlessofaneffectfortheoldestindividuals);and
Marriedbusinessownerstendedtohavegreaterbusinessearningsthanunmarried
businessowners;
Afteraccountingforraceandgenderneutralfactors,themodeldidnotindicatestatistically
significanteffectsofrace/ethnicity.However,beingfemalewasassociatedwithlowerbusiness
earnings,andtheeffectofgenderwasstatisticallysignificant.
FigureH29.
Californiaengineeringindustrybusinessownerearningsmodel,20062009
Variable Coefficient tstatistic
Constant 7.234 7.37 **
Age 0.095 4.34 **
Agesquared 0.001 5.25 **
Married 0.325 2.78 *
SpeaksEnglishwell 1.387 1.71
Lessthanhighschool 0.005 0.01
Somecollege 0.185 0.86
Fouryeardegree 0.006 0.03
Advanceddegree 0.012 0.05
Minority 0.177 1.09
Female 0.789 6.08 **
Note: *,**Denotesstatisticalsignificanceatthe90%and95%confidencelevel,respectively.
Source: BBCResearch&Consultingfrom20072009ACS.Therawdataextractwasobtainedthroughthe
IPUMSprogramoftheMNPopulationCenter:http://usa.ipums.org/usa/.
Grossrevenueofconstructionandengineeringrelatedfirmsfromavailability
interviews.IntheavailabilitytelephoneinterviewsthatBBCconductedforthestudy,firm
ownersandmanagerswereaskedtoidentifythesizerangefortheirannualgrossrevenuefrom
2009through2011.ArelatedquestionaskedforgrossrevenueacrossallCalifornialocationsfor
multilocationfirms,whichistheresultexaminedhere.
WithintheCaliforniatransportationcontractingindustry,BBCseparatelyexaminedgross
revenueofconstructionandengineeringrelatedbusinesses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE35

Constructionfirms.FigureH30examinesthedistributionofMBEs,WBEsandmajorityowned
constructionindustryfirmsbyrevenueclass.
AlargershareofMBEs(57%)thanWBEs(40%)andmajorityownedfirms(35%)reported
averagerevenueoflessthan$1millionperyear.
AdisproportionatelysmallproportionofMBEsandWBEsreportedaveragerevenueof$4.6
millionormoreperyear(16%ofMBEsand17%ofWBEs)comparedwithresultsfor
majorityownedfirms(33%).
Alargershareofmajorityownedfirms(10%)reportedaveragerevenueof$22.5millionor
morethanMBEs(2%)andWBEs(3%).
FigureH30.
GrossrevenueofcompanyforallCalifornialocations,constructionindustry
Less than $1.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
57%
40%
35%
27%
43%
32%
11%
12%
17%
3%
3%
6%
2%
2%
10%
MBE
(n=533)
WBE
(n=295)
Majority-
owned
(n=1,565)
$1.0 - $4.5
$4.6 - $12
$12.1 - $22.4
$22.5 or more
Note: WBEiswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Engineeringrelatedfirms.Engineeringrelatedfirmswerealsoaskedtoidentifygrossrevenue
acrossallCalifornialocations.FigureH31summarizesresults.
Asmallershareofmajorityownedfirms(54%)thanMBEs(63%)andWBEs(71%)
reportedaveragerevenueoflessthan$1millionperyear.
AverysmallproportionofMBEsandWBEsreportedaveragerevenueof$12.1millionor
moreperyear(4%ofMBEsand1%ofWBEs)comparedwithresultsformajorityowned
firms(12%).
NoWBEengineeringrelatedfirmsreportedannualgrossrevenueof$12.1millionormore.
G
r
o
s
s

r
e
v
e
n
u
e

(
$

m
i
l
l
i
o
n
s
)

BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE36

FigureH31.
GrossrevenueofcompanyforallCalifornialocations,engineeringrelatedindustry
$22.5 or more
$12.1 - $22.4
$4.6 - $12
$1.0 - $4.5
Less than $1.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
G
r
o
s
s

r
e
v
e
n
u
e

(
$

m
i
l
l
i
o
n
s
)

63%
71%
54%
24%
24%
26%
9%
4%
8%
2%
1%
4%
2%
0%
8%
MBE
(n=398)
WBE
(n=217)
Majority-
owned
(n=1,259)
Note: WBEiswhitewomenownedfirms.
Source: BBCResearch&Consultingfrom2012AvailabilityInterviews.
Summary.BBCexaminedseveraldifferentdatasetstoexaminebusinessreceiptsandearnings
forfirmsinCalifornia.
Analysisof2007dataindicatedthat,inCalifornia,averagereceiptsforminorityand
womenownedfirmswerelowercomparedtothoseofallfirmsintheconstructionand
professional,scientific,andtechnicalservicesindustries.
RegressionanalysesusingCensusdataforbusinessownerearningsindicatedthatthere
werestatisticallysignificanteffectsofrace/ethnicityandgenderonbusinessearnings,after
statisticallycontrollingforcertainraceandgenderneutralfactors:
BeingAfricanAmericanandHispanicAmericanwasassociatedwithlower
businessearningsintheCaliforniaconstructionindustryin20062009;and
BeingfemalewasassociatedwithlowerbusinessearningsintheCalifornia
constructionandengineeringindustriesin20062009.
BBCalsoanalyzedrevenuedataforfirmsintheCaliforniatransportationcontracting
industrycollectedaspartofthedisparitystudysavailabilityinterviews.
Dataindicatethatalargershareofbothconstructionandengineeringrelated
MBE/WBEbusinessesreportannualrevenueof$1millionorlessthanmajority
owned.
Fewminorityandwomenownedfirmsrelativetomajorityownedfirmsreach
highrevenuelevels.Thisresultisevidentforbothconstructionand
engineeringrelatedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE37

DifficultiesandPotentialBarrierstoStartingorExpandingaBusiness
AspartoftheavailabilityinterviewswithCaliforniabusinessescompletedinthedisparitystudy,
thestudyteamaskedfirmownersandmanagersiftheyhadexperiencedbarriersordifficulties
associatedwithstartingorexpandingabusiness.BBCaskedif:
Thesizeofprojectshadpresentedabarriertobidding;
ThefirmhadexperienceddifficultieslearningaboutbidopportunitieswithCaltrans;
Thefirmhadexperienceddifficultieslearningaboutbidopportunitieswithlocal
governmentsorprivatecompanies;and
Thefirmhadexperienceddifficultieslearningaboutsubcontractingopportunitiesin
Caltrans.
FigureH32summarizesresponsestothesequestions.Responsesforconstructionand
engineeringrelatedfirmshavebeencombined.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE38

FigureH32.
Responsesto2012availabilityinterviewquestionsfromCalifornia
MBE,WBEandmajorityownedconstructionandengineeringrelatedfirms
Note: WBErepresentswhitewomenownedfirms,MBErepresentsminorityownedfirmsandMajorityownedrepresentsnonHispanic
whitemaleownedfirms.
Source: BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE39

AsshowninFigureH32,MBEsandWBEsweremorelikelythanmajorityownedfirmsto
reportthatthesizeofprojectshadbeenabarriertobidding.
MBEsandWBEswerealsomorelikelythanmajorityownedfirmstoreportdifficulties
learningabout:
Caltransbidopportunities;
Localgovernmentbidopportunities;
Privatesectorbidopportunities;and
Subcontractingopportunities.
BBCalsoaskedquestionsrelatedtoaccesstocapital,timelypayment,andbondingand
insurance;AppendixGreportsthoseresults.
Thestudyteamalsoexaminedhowthesebarriersanddifficultiesassociatedwithstartingor
expandingabusinessaffectedyoungerfirms,thosethataresevenyearsoldoryounger.
FigureH33showsthatagreatershareofyoungerMBEsandmajorityownedfirmsweremore
likelythanolderfirmstoreportthatthesizeofprojectsanddifficultiesleaningaboutbid
opportunitieswerebarrierstobidding.
YoungerMBE/WBEsweremuchmorelikelythanolderMBE/WBEfirmstoreport
difficultieslearningabout:
Caltransbidopportunities;and
Localgovernmentbidopportunities;and
Privatebidopportunities.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE40








FigureH33.
Responsesto2012availabilityinterviewquestionsfromCalifornia
MBE,WBEandmajorityownedconstructionandengineeringrelatedfirms
Note: WBErepresentswhitewomenownedfirms,MBErepresentsminorityownedfirmsandMajorityownedrepresentsnonHispanic
whitemaleownedfirms.
Source: BBCResearch&Consulting.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXH,PAGE41

APPENDIXI.
DescriptionofDataSourcesforMarketplace
Analyses
ToperformthemarketplaceanalysespresentedinAppendicesEthroughH,BBCuseddatafrom
arangeofsources,including:
U.S.CensusBureauPublicUseMicrodataSamples(PUMS)fromthe1980and2000Census;
U.S.CensusBureauPUMSdatafromthe20072009threeyearAmericanCommunity
Survey(ACS);
TheFederalReserveBoards1998and2003SurveyofSmallBusinessFinances(SSBF);
The2007SurveyofBusinessOwners(SBO),conductedbytheU.S.CensusBureau;and
HomeMortgageDisclosureAct(HMDA)dataprovidedbytheFederalFinancialInstitutions
ExaminationCouncil(FFIEC).
Thefollowingsectionsprovidefurtherdetailoneachdatasource,includinghowthestudyteam
useditinitsquantitativemarketplaceanalyses.
PUMSData
Focusingontheconstructionandengineeringindustries,BBCusedPUMSdatatoanalyze:
Demographiccharacteristics;
Measuresoffinancialresources;
Educationalattainment;and
Selfemployment(businessownership).
PUMSdataofferseveralfeaturesidealfortheanalysesreportedinthisstudy,including
historicalcrosssectionaldata,stratifiednationalandstatelevelsamples,andlargesamplesizes
thatenablemanyestimatestobemadewithahighlevelofstatisticalconfidence,evenfor
subsetsofthepopulation(e.g.,racial/ethnicandoccupationalgroups).
BBCobtainedselectedCensusandACSdatafromtheMinnesotaPopulationCentersIntegrated
PublicUseMicrodataSeries(IPUMS).TheIPUMSprogramprovidesonlineaccesstocustomized,
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE1

accuratedatasets.
1
Fortheanalysescontainedinthisreport,BBCusedthe1980and2000
Census5percentsamplesandthe20072009ACS1percentsample.
2000Censusdata.The2000U.S.Census5percentsamplecontains14,081,466observations.
WhenapplyingtheCensuspersonlevelpopulationweights,thesamplerepresents281,421,906
peopleintheUnitedStates.The2000Californiasubsamplecontains1,690,642individual
observations,weightedtorepresent33,884,660people.
Categorizingindividualrace/ethnicity.Todefinerace/ethnicityforthe2000Censusdataset,
BBCusedtheIPUMSrace/ethnicityvariablesRACEDandHISPANtocategorizeindividuals
intooneofsevengroups:
NonHispanicwhite;
HispanicAmerican;
AfricanAmerican;
AsianPacificAmerican;
SubcontinentAsianAmerican;
NativeAmerican;and
Otherminority(unspecified).
AnindividualwasconsiderednonHispanicwhiteiftheydidnotreportHispanicethnicityand
indicatedbeingwhiteonlynotincombinationwithanyotherracegroup.Allselfidentified
Hispanics(basedontheHISPANvariable)wereconsideredHispanicAmerican,regardlessof
anyotherraceorethnicityidentification.Forthefiveotherracialgroups,anindividuals
race/ethnicitywascategorizedbythefirst(oronly)racegroupidentifiedineachpossiblerace
typecombination.BBCusedarankorderingmethodologysimilartothatusedinthe2000
Censusdatadictionary.Anindividualwhoidentifiedmultipleraceswasplacedinthereported
racecategorywiththehighestrankinginBBCsordering.AfricanAmericanisfirst,followedby
NativeAmerican,AsianPacificAmerican,andthenSubcontinentAsianAmerican.Forexample,
ifanindividualidentifiedhimselforherselfasKorean,thatpersonwasplacedintheAsian
PacificAmericancategory.IftheindividualidentifiedhimselforherselfasKoreanin
combinationwithBlack,theindividualwasconsideredAfricanAmerican.
TheAsianPacificAmericancategoryincludedthefollowingrace/ethnicitygroups:
Cambodian,Chamorro,Chinese,Filipino,Guamanian,Hmong,Indonesian,Japanese,
Korean,Laotian,Malaysian,NativeHawaiian,Samoan,Taiwanese,Thai,Tongan,and
Vietnamese.ThiscategoryalsoincludedotherPolynesian,Melanesian,andMicronesian
races,aswellasindividualsidentifiedasPacificIslanders.
1
StevenRuggles,J.TrentAlexander,KatieGenadek,RonaldGoeken,MatthewB.Schroeder,andMatthewSobek.Integrated
PublicUseMicrodataSeries:Version5.0[Machinereadabledatabase].Minneapolis:UniversityofMinnesota,2011.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE2

TheSubcontinentAsianAmericancategoryincludedtheseracegroups:AsianIndian
(Hindu),Bangladeshi,Pakistani,andSriLankan.Individualswhoidentifiedthemselvesas
Asian,butwerenotclearlycategorizedasSubcontinentAsianwereplacedintheAsian
PacificAmericangroup.
AmericanIndian,AlaskaNative,andLatinAmericanIndiangroupswereconsideredNative
American.
Ifanindividualwasidentifiedwithanyoftheabovegroupsandanotherracegroup,the
individualwascategorizedintotheknowncategory.Individualsidentifiedasotherrace
orwhiteandotherracewerecategorizedasotherminority.
ForsomeanalysesthoseinwhichsamplesizesweresmallBBCcombinedminoritygroups.
Businessownership.BBCusedtheCensusdetailedclassofworkervariable(CLASSWKD)to
determineselfemployment.Individualswereclassifiedintoeightcategories.
Selfemployedforanonincorporatedbusiness;
Selfemployedforanincorporatedbusiness;
Wageorsalaryemployeeforaprivatefirm;
Wageorsalaryemployeeforanonprofitorganization;
EmployeeoftheFederalgovernment;
EmployeeofaStategovernment;
Employeeofalocalgovernment;or
Unpaidfamilyworker.
BBCcountedindividualswhoreportedbeingselfemployedeitherforanincorporatedora
nonincorporatedbusinessasbusinessowners.
Studyindustries.Themarketplaceanalysesfocusontwostudyindustries:constructionand
engineeringrelatedservices.BBCusedtheINDvariabletoidentifyindividualsasworkingin
oneortheotherindustry.Thatvariableincludesseveralhundredindustryandsubindustry
categories.FigureI1identifiestheINDcodesusedtodefineeachstudyareaforthe2000
Censusanalyses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE3

FigureI1.
2000Censusindustrycodesusedforconstructionandengineeringrelatedservices
Studyindustry 2000CensusINDcodes Description
Construction 77 Constructionindustry
Engineeringrelatedservices 729 Architectural,engineeringandrelatedservices
Source: BBCResearch&ConsultingfromtheIPUMSprogram:http://usa.ipums.org/usa/.
Industry occupations. BBC also examined workers by occupation within the construction
industryusingthePUMSvariableOCC.FigureI2summarizesthe2000Census(and20072009
ACS)OCCcodesusedinthestudyteamsanalyses.
FigureI2.
2000Censusand20072009ACSoccupationcodesusedtoexamineworkersinconstruction
Census2000and
20072009ACS
occupational
titleandcode Jobdescription
Constructionmanagers Plan,direct,coordinate,orbudget,usuallythroughsubordinatesupervisorypersonnel,
22
activitiesconcernedwiththeconstructionandmaintenanceofstructures,facilities,
andsystems.Participateintheconceptualdevelopmentofaconstructionprojectand
overseeitsorganization,scheduling,andimplementation.Includespecialized
constructionfields,suchascarpentryorplumbing.Includegeneralsuperintendents,
projectmanagers,andconstructorswhomanage,coordinate,andsupervisethe
constructionprocess.
Firstline Directlysuperviseandcoordinatetheactivitiesofconstructionorextractionworkers.
supervisors/managers
ofconstructiontrades
andextractionworkers
620
Brickmasons, Layandbindbuildingmaterials,suchasbrick,structuraltile,concreteblock,cinder
Blockmasonsand block,glassblock,andterracottablock,Constructorrepairwalls,partitions,arches,
Stonemasons sewers,andotherstructures.Buildstonestructures,suchaspiers,walls,and
622
abutmentsandlaywalks,curbstones,orspecialtypesofmasonryforvats,tanks,and
floors.
Carpenters Construct,erect,install,orrepairstructuresandfixturesmadeofwood,suchas
623
concreteforms,buildingframeworks,includingpartitions,joists,studding,rafters,
woodstairways,windowanddoorframes,andhardwoodfloors.
Carpet,floor,andtile Applyshockabsorbing,sounddeadening,ordecorativecoveringstofloors.Laycarpet
installersandfinishers onfloorsandinstallpaddingandtrimflooringmaterials.Scrapeandsandwooden
624
floorstosmoothsurfaces,applycoatsoffinish.Applyhardtile,marble,woodtile,
walls,floors,ceilings,androofdecks.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE4

FigureI2(continued).
2000Censusand20072009ACSoccupationcodesusedtoexamineworkersinconstruction
Census2000and
20072009ACS
occupational
titleandcode Jobdescription
Cementmasons, Smoothandfinishsurfacesofpouredconcrete,suchasfloors,walks,sidewalks,or
concretefinishersand curbsusingavarietyofhandandpowertools.Alignformsforsidewalks,curbsor
terrazzoworkers gutters;patchvoids;usesawstocutexpansionjoints.Terrazzoworkersapplya
625
mixtureofcement,sand,pigmentormarblechipstofloors,stairways,andcabinet
fixtures.
Constructionlaborers Performtasksinvolvingphysicallaboratbuilding,highway,andheavyconstruction
626
projects,tunnelandshaftexcavations,anddemolitionsites.Mayoperatehandand
powertoolsofalltypes:airhammers,earthtampers,cementmixers,smallmechanical
hoists,surveyingandmeasuringequipment,andavarietyofotherequipmentand
instruments.Maycleanandpreparesites,digtrenches,setbracestosupportthesides
ofexcavations,erectscaffolding,cleanuprubbleanddebris,andremoveasbestos,
lead,andotherhazardouswastematerials.Mayassistothercraftworkers.Exclude
constructionlaborerswhoprimarilyassistaparticularcraftworker,andclassifythem
under"Helpers,ConstructionTrades."
Paving,surfacingand
Operateequipmentusedforapplyingconcrete,asphalt,orothermaterialstoroad
tampingequipment
beds,parkinglots,orairportrunwaysandtaxiways,orequipmentusedfortamping
operators
gravel,dirt,orothermaterials.Includeconcreteandasphaltpavingmachine
operators,formtampers,tampingmachineoperators,andstonespreaderoperators.
630
Miscellaneous
Operateoneorseveraltypesofpowerconstructionequipment,suchasmotor
construction
graders,bulldozers,scrapers,compressors,pumps,derricks,shovels,tractors,orfront
equipmentoperators,
endloaderstoexcavate,move,andgradeearth,erectstructures,orpourconcreteor
includingpiledriver
otherhardsurfacepavement.Operatepiledriversmountedonskids,barges,crawler
operators
treads,orlocomotivecranestodrivepilingsforretainingwalls,bulkheads,and
foundationsofstructures,suchasbuildings,bridges,andpiers.
632
Drywall installers,
Applyplasterboardorotherwallboardtoceilingsorinteriorwallsofbuildings,mount
ceilingtileinstallers
acousticaltilesorblocks,strips,orsheetsofshockabsorbingmaterialstoceilingsand
andtapers
wallsofbuildingstoreduceorreflectsound.
633
Electricians
Install,maintain,andrepairelectricalwiring,equipment,andfixtures.Ensurethat
workisinaccordancewithrelevantcodes.Mayinstallorservicestreetlights,intercom
635
systems,orelectricalcontrolsystems.Exclude"SecurityandFireAlarmSystems
Installers."The2000categoryincludeselectricianapprentices.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE5

644
660
FigureI2(continued).
2000Censusand20072009ACSoccupationcodesusedtoexamineworkersinconstruction
Census2000and
20072009ACS
occupational
titleandcode Jobdescription
Glaziers
636
Painters,construction
andmaintenance
642
Pipelayers,plumbers,
pipefittersand
steamfitters
Installglassinwindows,skylights,storefronts,displaycases,buildingfronts,interior
walls,ceilings,andtabletops.
Paintwalls,equipment,buildings,bridges,andotherstructuralsurfaces,using
brushes,rollers,andsprayguns.Removeoldpainttopreparesurfacespriorto
paintingandmixcolorsoroilstoobtaindesiredcolororconsistency.
Laypipeforstormorsanitationsewers,drains,andwatermains.Performany
combinationofthefollowingtasks:gradetrenchesorculverts,positionpipe,orseal
joints.Excludes"Welders,Cutters,Solderers,andBrazers."Assemble,install,alter,and
repairpipelinesorpipesystemsthatcarrywater,steam,air,orotherliquidsorgases.
Mayinstallheatingandcoolingequipmentandmechanicalcontrolsystems.Includes
sprinklerfitters.
Plasterersandstucco Applyinteriororexteriorplaster,cement,stucco,orsimilarmaterialsandset
masons ornamentalplaster.
646
Roofers Coverroofsofstructureswithshingles,slate,asphalt,aluminum,andwood.Spray
651
roofs,sidings,andwallswithmaterialtobind,seal,insulate,orsoundproofsectionsof
structures
Ironandsteelworkers, Ironandsteelworkersraise,place,anduniteironorsteelgirders,columns,andother
includingreinforcing structuralmemberstoformcompletedstructuresorstructuralframeworks.Mayerect
ironandrebarworkers metalstoragetanksandassembleprefabricatedmetalbuildings.Reinforcingironand
653
rebarworkerspositionandsecuresteelbarsormeshinconcreteformsinorderto
reinforceconcrete.Useavarietyoffasteners,rodbendingmachines,blowtorches,
andhandtools.Includerodbusters.
Helpers,construction Allconstructiontradeshelpersnotlistedseparately.
trades
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE6

FigureI2(continued).
2000Censusand20072009ACSoccupationcodesusedtoexamineworkersinconstruction
Census2000and
20072009ACS
occupational
titleandcode Jobdescription
Driver/salesworkers Driver/salesworkersdrivetrucksorothervehiclesoverestablishedroutesorwithinan
andtruckdrivers establishedterritoryandsellgoods,suchasfoodproducts,includingrestauranttake
913
outitems,orpickupanddeliveritems,suchaslaundry.Mayalsotakeordersand
collectpayments.Includenewspaperdeliverydrivers.Truckdrivers(heavy)drivea
tractortrailercombinationoratruckwithacapacityofatleast26,000GVW,to
transportanddelivergoods,livestock,ormaterialsinliquid,loose,orpackagedform.
Mayberequiredtounloadtruck.Mayrequireuseofautomatedroutingequipment.
Requirescommercialdrivers'license.Truckdrivers(light)driveatruckorvanwitha
capacityofunder26,000GVW,primarilytodeliverorpickupmerchandiseorto
deliverpackageswithinaspecifiedarea.Mayrequireuseofautomaticroutingor
locationsoftware.Mayloadandunloadtruck.Exclude"CouriersandMessengers."
Craneandtower Operatemechanicalboomandcableortowerandcableequipmenttoliftandmove
operators materials,machines,orproductsinmanydirections.Exclude"ExcavatingandLoading
951
MachineandDraglineOperators."
Dredge,excavating Dredgeoperatorsoperatedredgetoremovesand,gravel,orothermaterialsfrom
andloadingmachine lakes,rivers,orstreams;andtoexcavateandmaintainnavigablechannelsin
operators waterways.ExcavatingandloadingmachineanddraglineoperatorsOperateortend
952
machineryequippedwithscoops,shovels,orbuckets,toexcavateandloadloose
materials.Loadingmachineoperators,undergroundmining,Operateunderground
loadingmachinetoloadcoal,ore,orrockintoshuttleorminecarorontoconveyors.
Loadingequipmentmayincludepowershovels,hoistingenginesequippedwithcable
drawnscraperorscoop,ormachinesequippedwithgatheringarmsandconveyor.
Source: 2000Censusoccupationaltitlesandcodesathttp://usa.ipums.org/usa/volii/00occup.shtml,1980,jobdescriptionsfromtheBureauofLabor
Statisticswww.bls.gov.
Educationvariables.BBCusedthevariableindicatingrespondentshighestlevelofeducational
2
attainment(EDUCD)toclassifyindividualsintofourcategories:
Lessthanhighschool;
Highschooldiploma;
Somecollegeorassociatesdegree;and
Atleastabachelorsdegree.
2
Inthe19401980samples,respondentswereclassifiedaccordingtothehighestyearofschoolcompleted(HIGRADE).Inthe
yearsafter1980,thatmethodwasusedonlyforindividualswhodidnotcompletehighschool,andallhighschoolgraduates
werecategorizedbasedonthehighestdegreeearned(EDUC99).TheEDUCDvariablemergestwodifferentschemesfor
measuringeducationalattainmentbyassigningtoeachdegreethetypicalnumberofyearsittakestoearnit.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE7

Definitionofworkers.Theuniversefortheclassofworker,industry,andoccupationvariables
includesworkers16yearsofageorolderwhoaregainfullyemployedandthosewhoare
unemployedbutseekingwork.Gainfullyemployedmeansthattheworkerreportedan
occupationasdefinedbytheCensuscodeOCC.
1980Censusdata.BBCcompared2000Censusdatawithdataforthe1980Censustoanalyze
changesinworkerdemographics,educationalattainment,andbusinessownershipovertime.
The1980Censusfivepercentsampleincludes11,343,120observationsweightedtorepresent
226,862,400people.Thesampleincludes1,186,232observationsinCalifornia,weightedto
represent23,724,640individuals.Anumberofchangesinvariablesandcodingtookplace
betweenthe1980and2000Censuses.
Changesinrace/ethnicitycategoriesbetweencensuses.FigureI3liststhesevenBBCdefined
racial/ethniccategorieswiththecorresponding1980and2000Censusracegroups.
Combinationsofracetypesareavailableinthe2000Censusbutnotinthe1980Census.TheU.S.
CensusBureauintroducedcategoriesin2000representingacombinationofracetypestoallow
individualstoselectmultipleraceswhenrespondingtothequestionnaire.
Forexample,anindividualwhoisprimarilywhitewithNativeAmericanancestrycouldchoose
thewhiteandAmericanIndian/AlaskaNativeracegroupin2000.However,ifthesame
individualreceivedthe1980Censusquestionnaire,shewouldneedtochooseasinglerace
groupeitherwhiteorAmericanIndian/AlaskaNative.Suchachoicewouldultimately
dependonunknowablefactorsincludinghowstronglytheindividualidentifieswithherNative
Americanheritage.
Inaddition,dataanalystsdonothaveinformationabouttheproportionsofindividualancestry
in2000andcanonlyknowthataparticularindividualhasmixedancestry.Thevariability
introducedbyallowingmultipleraceselectioncomplicatesdirectcomparisonsbetweenCensus
yearswithrespecttorace/ethnicity.Despitethoseissues,98percentofsurveyrespondentsin
2000indicatedasinglerace.
3
Businessownership.BBCusestheCensusclassofworkervariable(CLASSWKD)todetermine
selfemployment.Thatvariablewasthesamefor1980and2000withoneexception:the1980
variabledidnotincludeaseparatecategoryforindividualswhoworkforawageorsalaryata
nonprofitorganization.
ChangesinindustrycodesbetweenCensuses.TheCensusdefinitionsofsomeindustriesand
subindustrieschangedbetween1980and2000.Asaresult,the1980codesfortheindustry
variable(IND)werenotthesameasthe2000INDcodesinallcases.However,forthe
constructionandengineeringrelatedindustries,the1980codescorrespondeddirectlyto
equivalent2000codes.
3
Grieco,ElizabethM.&RachelC.Cassidy.OverviewofRaceandHispanicOrigin,Census2000Brief,March2001,page3.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE8

FigureI3.
BBCrace/ethniccategoriescomparedwithCensusraceandHispanicOriginsurveyquestions,
1980and2000
BBCdefinedrace/ethnic
categories 2000Census 1980Census
AfricanAmerican
Hispanicorigin:no
Race:Black/Negroaloneorin
combinationwithanyothernon
Hispanicgroup
Hispanicorigin:no
Race:Black/Negro
AsianPacificAmerican
Hispanicorigin:no
Race:Chinese,Taiwanese,
Japanese,Filipino,Korean,
Vietnamese,Cambodian,Hmong,
Laotian,Thai,Indonesian,
Malaysian,Samoan,Tongan,
Polynesian,Guamanian/Chamorro,
PacificIslander,Micronesian,
Melanesian,orotherAsian,either
aloneorincombinationwithany
nonHispanic,nonBlack,ornon
NativeAmericangroups
Hispanicorigin:no
Race:Chinese,Japanese,Filipino,
Korean,Vietnamese,PacificIslander
orotherAsian
SubcontinentAsianAmerican
Hispanicorigin:no
Race:AsianIndian,Bangladeshi,
PakistaniorSriLankan,aloneorin
combinationwithwhiteorother
groupsonly
Hispanicorigin:no
Race:AsianIndian
HispanicAmerican
Hispanicorigin:yes
Race:anyracegroups,aloneorin
combinationwithothergroups
Hispanicorigin:yes
Race:any
or
Hispanicorigin:no
Race:Spanish
NativeAmerican
Hispanicorigin:no
Race:AmericanIndianorAlaskan
NativetribeorNativeHawaiian,
identifiedaloneorincombination
withanynonHispanic,nonBlack
Hispanicorigin:no
Race:AmericanIndian/AlaskaNative
orNativeHawaiian
group
Otherminoritygroup
Hispanicorigin:no
Race:otherracealoneorin
combinationwithwhiteonly
Hispanicorigin:no
Race:otherrace
NonHispanicwhite
Hispanicorigin:no Hispanicorigin:no
Race:whitealone Race:white
Source: BBCResearch&ConsultingfromtheIPUMSprogram:http://usa.ipums.org/usa/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE9

Geographicvariables.Fortheanalysespresentedinthemarketplaceappendices,therewereno
substantialchangesingeographicvariablesbetweenthen1980Censusand2000Census.BBC
usedthesamevariable(STATEFIP)availablefor2000CensusdatatoidentifyCaliforniainthe
1980data.
ChangesineducationalvariablesbetweenCensuses.The1980CensusPUMSdataincludedthe
sameeducationalvariablefoundinthe2000Censusdata,althoughthequestionsusedforeach
Censustocaptureeducationalattainmentdifferedbetweenthetwosurveys.
4
20072009AmericanCommunitySurvey(ACS)data.BBCalsoexamined20072009ACS
datafromIPUMS.TheU.S.CensusBureauconductstheACSwhichusesmonthlysamplesto
produceannuallyupdateddataforthesamesmallareasasthe2000Censuslongform.
5
Since
2005,theACShasexpandedtoaroughly1percentsampleofthepopulation,basedonarandom
sampleofhousingunitsineverycountyintheU.S.(alongwiththeDistrictofColumbiaand
PuertoRico).The20072009ACSthreeyearestimatesrepresenttheaveragecharacteristics
overthethreeyearperiodoftime.
Applyingthepersonlevelpopulationweightstothe3,006,322observationsincludedinthe
data,the20072009ACSdatasetrepresents304,192,356peopleintheU.S.ForCalifornia,the
20072009ACSdatasetincludes1,047,182observationsrepresenting36,589,387individuals.
Withtheexceptionofafewminordifferences,thevariablesavailableforthe20072009ACS
datasetarethesameasthoseavailableforthe2000Census5percentsample.
Changesinrace/ethnicitycategoriesbetween2000Censusand20072009ACSdata.The2000
Census5percentsampleandthe20072009ACSPUMSdatauseessentiallythesamenumerical
categoriesforthedetailedracevariable(RACED).However,inbothsamples,anycategory
representingfewerthan10,000peoplewascombinedwithanothercategory.Asaresult,some
PUMSrace/ethnicitycategoriesthatoccurinonesamplemaynotexistintheother,whichcould
leadtoinconsistenciesbetweenthetwosamplesoncethedetailedrace/ethnicitycategoriesare
groupedaccordingtothesevenbroadercategories.Thatissueislikelytoaffectonlyaverysmall
numberofobservations.PUMSrace/ethnicitycategoriesthatwereavailablein2000butnotin
20072009(orviceversa)representedaverysmallpercentageofthe2000and20072009
populations.CategoriesfortheHispanicvariable(HISPAN)remainedconsistentbetweenthe
twodatasets.
Othervariables.OthervariablesthatBBCusedfromthe20072009ACSdidnotchange
between2000and20072009.ThevariablesCLASSWKD,LABFORCE,IND,OCC,PUMA,and
EDUCDwereconsistentbetweendatasets,withvariablecodesineachcaserepresentingthe
samecategories.
4
Foramoredetailedexplanation,seefootnote2.
5
U.S.CensusBureau.DesignandMethodology:AmericanCommunitySurvey.WashingtonD.C.:U.S.GovernmentPrinting2009.
Availableathttp://www.census.gov/acs/www/SBasics/desgn_meth.htm
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE10

SurveyofSmallBusinessFinances(SSBF)
ThestudyteamusedtheSSBFtoanalyzetheavailabilityandcharacteristicsofsmallbusiness
loans.TheSSBF,whichtheFederalReserveBoardconductseveryfiveyears,collectsfinancial
datafromnongovernmentalforprofitfirmswithfewerthan500employees.Thesurveyusesa
nationallyrepresentativesample,structuredtoallowforanalysisofspecificgeographicregions,
industrysectors,andracialandgendergroups.TheSSBFisuniqueasitprovidesdetaileddata
onbothfirmandownerfinancialcharacteristics.Forthepurposesofthisreport,BBCusedthe
surveysfrom1998and2003,whichareavailableattheFederalReserveBoardwebsite.
6
Datafor1998.The1998SSBFincludesinformationfrom3,561smallbusinesses.Thesurvey
oversampledminorityownedbusinesses,allowingforamorepreciseanalysisofhowraceand
ethnicitymayaffectloanandfinancialoutcomes.
Categorizingownerrace/ethnicityandgender.Definitionofraceandethnicgroupsinthe1998
SSBFareslightlydifferentthantheclassificationsusedinthe2000Censusand20072009ACS.
IntheSSBF,businessesareclassifiedintothefollowingfivegroups:
NonHispanicwhite;
HispanicAmerican;
AfricanAmerican;
AsianAmerican;
NativeAmerican;and
Other(unspecified).
AbusinesswasconsideredHispanicAmericanownedifmorethan50percentofthebusiness
wasownedbyHispanicAmericans,regardlessofrace.Allbusinessesthatreported50percent
orlessHispanicAmericanownershipwereincludedintheracialgroupthatownedmorethan
halfofthecompany.Nofirmsreportedtherace/ethnicityoftheirownersasbeingother.
Similartorace,firmswereclassifiedasfemaleownedifmorethan50percentofthefirmwas
ownedbywomen.Firmsownedhalfbywomenandhalfbymenwereclassifiedasmaleowned.
Definingselectedindustrysectors.Inthe1998SSBF,eachbusinesswasclassifiedaccordingto
SICcodeandplacedintooneofeightindustrycategories:
Construction;
Mining;
Transportation,communications,andutilities;
6
TheFederalReserveBoard.SurveyofSmallBusinessFinances,1998andSurveyofSmallBusinessFinances,2003.Available
onlineathttp://www.federalreserve.gov/pubs/.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE11

Finance,insurance,andrealestate;
Trade;
Engineering;
Services(excludingengineering);or
Agriculture,forestry,andfishing.
Regionvariables.TheSSBFdividestheUnitedStatesintonineCensusDivisions.Alongwith
Alaska,Washington,Oregon,andHawaii,CaliforniaresidesinthePacificCensusDivision
(referredtoinmarketplaceappendicesasthePacificregion).
Loandenialvariables.Inthe1998survey,firmownerswereaskediftheyhaveappliedfora
loaninthelastthreeyearsandwhetherloanapplicationswerealwaysapproved,alwaysdenied,
orsometimesapprovedandsometimesdenied.Forthepurposesofthisstudy,onlyfirmsthat
werealwaysdeniedwereconsideredwhenanalyzingloandenial.
Datafor2003.The2003SSBFdiffersfrompreviousSSBFsintermsofthepopulation
surveyed,thevariablesavailable,andthedatareportingmethodology.
Populationdifferences.Similartothe1998survey,the2003surveyrecordsdatafrom
businesseswith500orfeweremployees.Thesamplecontainsdatafrom4,240firms,butin
2003,minorityownedfirmswerenotoversampled.Inthe1998data,7.3percentofthesurvey
firmswereownedbyHispanicAmericans,butthatnumberdroppedto4percentinthe2003
data.RepresentationinthesamplealsodroppedforAfricanAmericanownedfirms(7.7%to
2.8%)andAsianAmericanownedfirms(5.7%to4.2%).Thesmallersamplesizesforminority
groupsinthe2003SSBFaffectstheabilitytoconductanalysesrelatedtodifferencesinloan
applicationoutcomesforspecificrace/ethnicgroups.
Variabledifferences.Inthe2003SSBF,businesseswereabletogiveresponsesonowner
characteristicsforuptothreedifferentowners.Thedataalsoincludedafourthvariablethatisa
weightedaverageofotheranswersprovidedforeachquestion.Inordertodefinerace/ethnicity
andgendervariablesconsistentlyforthe1998to2003surveys,BBCusedthefinalweighted
averageforvariablesonownercharacteristics.Firmswerethendividedintorace,ethnicity,and
gendergroupsaccordingtothesameguidelinesusedforthe1998data.
Industry,region,andloandenialvariablesforthe2003surveyweredefinedbythestudyteam
usingthesameguidelinesasthe1998survey,withoneexceptionthe2003surveydidnot
includeanyfirmsintheagriculture,forestry,andfishingindustry.
Datareporting.Duetomissingresponsestosurveyquestionsinboththe1998and2003
datasets,datawereimputedtofillinmissingvalues.Forthe1998SSBFdata,missingvalues
wereimputedusingarandomizedregressionmodeltoestimatevaluesbasedonresponsesto
otherquestionsinthesurvey.Asinglevariableincludesbothreportedandimputedvalues.A
separateshadowvariablecanbeusedtoidentifywheremissingvalueshavebeenimputed.
However,themissingvaluesinthe2003datasetwereimputedusingadifferentmethodthanin
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE12

previousstudies.Inthe1998surveydata,thenumberofobservationsinthedatasetmatches
thenumberoffirmssurveyed.However,the2003dataincludesfiveimplicates,eachwith
imputedvaluesthathavebeenfilledinusingarandomizedregressionmodel.
7
Thus,thereare
21,200observationsinthe2003data,fiveforeachofthe4,240firmssurveyed.Acrossthefive
implicates,allnonmissingvaluesareidentical,whereasimputedvaluesmaydiffer.Inbothdata
sets,therefore,whenafirmansweredasurveyquestion,theresponsewasnotaltered.However,
themethodforfillinginmissingvaluesdifferedbetweensurveys.
Asdiscussedinarecentpaperaboutthe2003imputationsbytheFinanceandEconomics
DiscussionSeries,missingsurveyvaluescanleadtobiasedestimatesandinaccuratevariances
andconfidenceintervals.
8
Thoseproblemscanbecorrectedthroughtheuseofmultiple
implicates.Inordertoprovidethemostaccurateanalysis,BBCutilizedallfiveimplicates
providedwiththe2003datainanalysisofthesurvey.
Multipleimplicateswerenotprovidedwiththe1998data,makingthemethodofanalysisused
forthe2003datainapplicable.Toaddressthatissue,thestudyteamperformedanalysisintwo
differentwaysfirst,onlywithobservationswhosedatawerenotimputed,andsecond,with
allobservations.Differencesinresultswereinsignificant.ForsummarystatisticsusingSSBF
data,BBCincludedobservationswithmissingvaluesintheanalyses.Fortheprobitregression
modelpresentedinAppendixG,thestudyteamdidnotincludeobservationswithimputed
valuesforloanthedependentvariable,loandenial.
SurveyofBusinessOwners(SBO)
BBCuseddatafromthe2007SBOtoanalyzemeanannualfirmreceipts.TheSBOisconducted
everyfiveyearsbytheU.S.CensusBureau.DataforthemostrecentpublicationoftheSBOwas
collectedin2007.Responsetothesurveyismandatory,whichensurescomprehensive
economicanddemographicinformationforbusinessandbusinessownersintheU.S.Alltax
filingbusinessesandnonprofitswereeligibletobesurveyed,includingfirmswithandwithout
paidemployees.In2007,almost8millionfirmsweresurveyed.BBCexaminedSBOdatarelating
tothenumberoffirms,numberoffirmswithpaidemployees,andtotalreceipts.That
informationisavailablebygeographiclocation,industry,genderandrace/ethnicity.
TheSBOusesthe2002NorthAmericanIndustryClassificationSystem(NAICS)toclassify
industries.BBCanalyzeddataforfirmsinallindustriesandforfirmsinselectedindustriesthat
correspondedcloselytoconstructionandengineeringrelatedservices.
TocategorizethebusinessownershipoffirmsreportedintheSBO,theCensusBureauuses
standarddefinitionsforwomenownedandminorityownedbusinesses.Abusinessisdefinedas
femaleownedifmorethanhalfoftheownershipandcontrolisbywomen.Firmswithjoint
male/femaleownershipweretabulatedasanindependentgendercategory.Abusinessis
7
Foramoredetailedexplanationofimputationmethods,seetheTechnicalCodebookforthe2003SurveyofSmallBusiness
Finances.
8
LieuN.Hazelwood,TraciL.MachandJohnD.Wolken.AlternativeMethodsofUnitNonresponseWeightAdjustments:An
Applicationfromthe2003SurveyofSmallBusinesses.FinanceandEconomicsDiscussionSeriesDivisionsofResearchand
StatisticsandMonetaryAffairs,FederalReserveBoard.Washington,D.C.,2007.
http://www.federalreserve.gov/pubs/feds/2007/200710/200710pap.pdf
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE13

definedasminorityownedifmorethanhalfoftheownershipandcontrolisbyAfrican
Americans,AsianAmericans,HispanicAmericans,NativeAmericans,orbyanotherminority
group.Respondentshadtheoptionofselectingoneormoreracialgroupswhenreporting
businessownership.BBCreportedbusinessreceiptsforthefollowingrace/ethnicityandgender
groups:
AfricanAmericans;
AsianAmericans;
HispanicAmericans;
NativeAmericans;and
Women.
BBCalsoreportedbusinessreceiptsforallfirms.
HomeMortgageDisclosureAct(HMDA)Data
BBCanalyzedmortgagelendinginCaliforniaandinthenationusingHMDAdatathattheFederal
FinancialInstitutionsExaminationCouncil(FFIEC)provides.HMDAdataprovideinformationon
mortgageloanapplicationsthatfinancialinstitutions,savingsbanks,creditunions,andsome
mortgagecompaniesreceive.Thosedataincludeinformationaboutthelocation,dollaramount,
andtypesofloansmade,aswellasrace/ethnicity,income,andcreditcharacteristicsofloan
applicants.Dataareavailableforhomepurchase,homeimprovement,andrefinanceloans.
Financialinstitutionswererequiredtoreport2010HMDAdataiftheyhadassetsofmorethan
$39million($35millionfor2006),hadabranchofficeinametropolitanarea,andoriginatedat
leastonehomepurchaseorrefinanceloaninthereportingcalendaryear.Mortgagecompanies
wererequiredtoreportHMDAiftheyareforprofitinstitutions,hadhomepurchaseloan
originationsexceeding10percentofallloanobligationsinthepastyear,werelocatedinanMSA
(ororiginatedfiveormorehomepurchaseloansinanMSA),andeitherhadmorethan$10
millioninassetsormadeatleast100homepurchaseorrefinanceloansinthecalendaryear.
BBCusedthosedatatoexamineloandenialratesandsubprimelendingratesfordifferentracial
andethnicgroupsin2006,2009,and2010.NotethattheHMDAdatarepresenttheentiretyof
homemortgageloanapplicationsreportedbyparticipatingfinancialinstitutionsineachyear
examined.Thosedataarenotasample.However,BBCdidnotreportloandenialratesor
subprimelendingratesincaseswheretherewerefewerthan25loansinaparticularcategory.
AppendixGprovidesadetailedexplanationofthemethodologythatthestudyteamusedfor
measuringloandenialandsubprimelendingrates.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXI,PAGE14

APPENDIXJ.
SummaryofAnecdotalInterviews
AppendixJpresentsqualitativeinformationcollectedthroughanumberofdifferentmeansas
partofthedisparitystudy.Itispresentedinnineparts:
A. IntroductionandBackground;
B. TransportationContractingIndustryinCalifornia;
C. DoingBusinesswiththeCaliforniaDepa rtmentofTransportation;
D. PotentialBarrierstoBusinessSuccess;
E. KnowledgeorExperiencesConcerningAnyDiscriminationBasedonRace,Ethnicityor
GenderintheLocalMarketplace;
F. InsightsRegardingNeutralMeasures;
G. InsightsRegardingRace,EthnicityorGenderbasedMeasures;
H. Certification;and
I. OtherRecommendationstoCaltransOfferedbyInterviewees.
A.IntroductionandBackground
AppendixJwaspreparedbyBBC,KeenIndependentResearchLLC,andHolland&KnightLLP
withassistancefromFaroConsulting&SolutionsandWSCConsulting.Itsetsforthinformation
from41interviewsconductedforCaltrans.Theseinterviewsincludeperceptionsandanecdotes
regardingtheDBEProgramandthecontractingandprocurementpolicies,practices,and
proceduresofCaltrans.TheinterviewswereconductedbyFaroConsulting&Solutions,WSC
Consulting,andBBC.
Interviewparticipantsincludedprimecontractors,subcontractors,suppliers,architects,
engineers,andtradeandbusinessassociations,havingamembershipbaseofmanyminority,
nonminority,maleandfemalebusinessowners.
Interviewparticipantswereobtainedprimarilyfromarandomsamplingofbusinesses
generatedbyBBCandstratifiedbytypeoffirm,location,therace/ethnicityandgenderof
businessownership,andtheDBEdirectory.Mostoftheinterviewswereconductedwiththe
owner,president,chiefexecutiveofficer,orotherofficerofthebusinessorassociation,andsome
wereconductedwitharepresentative.Theintervieweesareidentifiedinthisreportbytheir
randominterviewnumber.
Ofthebusinessesinterviewed,someworkexclusivelyorprimarilyasprimecontractorsor
subcontractors,andsomeworkasboth.SomebusinesseswereMBEs,somewereWBEs,and
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE1

somewerewhitemaleowned.SomebusinesseswerecertifiedasDBEsorasdisabledveteran
owned(DVBEs).AllofthebusinesseswerelocatedinCalifornia.
Thefollowingtradeassociationsandbusinessorganizationsagreedtobeinterviewedin
connectionwiththedisparitystudyandreportontheexperiences,anecdotes,andperceptionsof
theirmembers:
HispanicChamberofCommerce;
YoungBlackContractorsAssociation;and
AsianAmericanArchitectsandEngineersAssociation.
AppendixJreferstoeachintervieweebasedonanintervieweenumber.
AppendixJalsosummarizesoraltestimonygiveninpublichearingsfrom30individuals.These
individualsrespondedtorequestsforcommentsaboutcurrentmarketplaceconditionsin
California.Individualshadtheopportunitytogiveverbaltestimonyinpersonatapublic
hearingsheldinall12Caltransdistricts.
IndividualshadtheopportunitytosubmitwrittentestimonytoCaltransaswell.Caltrans
receivedwrittentestimonyviamail,electronicmailandfax.
Publichearingparticipantsrepresentedbusinessesandorganizationsthroughoutthestate.
TheircommentsareidentifiedbynumberwiththePHprefixdesignatingoraltestimonyand
theWTprefixdesignatingwrittentestimony.Forsimplicity,AppendixJreferstobothpublic
hearingparticipantsandthoseprovidingwrittentestimonyasintervieweesinthesamewayas
individualsinterviewedattheirbusinesses.
Finally,AppendixJpresentsinformationfromfourstakeholderdiscussiongroupsheldwith
representativesoftheCaliforniatransportationcontractingindustry.Caltransheldtwo
stakeholdermeetingsinFebruaryandtwomeetingsinJunewithfirmowners,industryleaders
andothers.Individualsparticipatedinpersonandviatelephone.KeenIndependentResearch
chairedafocusgroupsessionaspartofeachmeeting.Eachsessionwasmorethanonehourin
length.Certainparticipantsprovidedfollowupcommentstothestudyteamaswell,whichwere
alsoreviewedforinclusioninthisappendix.TwentyfourindividualsfromoutsideCaltrans
participatedinthesestakeholdermeetings,sometimesattendingmorethanonemeeting.
Aswithparticipantsinthepublichearings,thestudyteamnumberedeachparticipantinthe
stakeholdermeetings,usingaprefixofSM.
OneadditionalbusinessownerrequestedthattheBBCstudyteamreviewwritteninformation
thathesubmitted;thisisincludedintheanalysisoftheRCJclaimmadetoCaltransunderPartC
oftheAppendix,whichdiscussesperceptionsofCaltrans.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE2

B.TransportationContractingIndustryinCalifornia
HowBusinessesBecameEstablished.
Anumberofintervieweesexplainedthatfirmownersinthetransportationcontracting
businesscomefrompeopleworkingintheindustryorforpublicagenciesinvolvedinthat
work.Forexample,thewhitemaleownerofanengineeringcompany[IntervieweeSM#8]
explainedhowengineeringfirmsareformed.One,iseconomicdownturn,wheretheyhavetogo
makealivingthatsusuallythefieldguys.Iftheygetintoamanagementrole,theyhavea
betterunderstandingofwhatittakestorunabusinesstheyseethattheyhaveenough
clienteleintheirmanagementrolethattheclientslikethemalotandthey[theclients]
encouragethemtoleave.TheotherthingIseeisworkingbackwithagenciesifapersoncomes
fromthatagency.
MarketplaceConditions.
Manyintervieweesindicatedthatmarketplaceconditionshavebeenunfavorablesincethe
downturnintheoveralleconomy.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,reportedthatsince2008themarkethasbeentight.Itis
veryhardtostayinbusinessanditishardtomakemoneyonpublicprojects.Youlosemoney
beforeyouevenstart,hesaid.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatthemarketplaceisverydifficultandcompetitiverightnow.Hementionedthatthe
publicsectorworkisextremelycutthroat.Hestatedthatitisextremelytoughtobe
competitiveandthereisincrediblecompetition.Hestatedthatbusinessisdifficultforall
businessesrightnowandmanylargerfirmsarelowbiddingmanycontracts.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,indicatedthathercompanyhasseena50percentdropinrevenuefrom2003
topresentbecauseofmarketconditions.Weweredoing$1.5millionperyearin2003butnow
weareonlydoinghalfthatbecauseoftheeconomy,shesaid.Sheaddedthatthekeychangesin
marketplaceconditionsareprimarilyrelatedtothepriceoffuelandassociatedoverhead.The
priceoffuelhaschangedeverything.Wehavefeweremployeesandtheemployeeswedohave
arepaidless,shesaid.Wehavetogowheretheworkisandchangeourbusinesstogowhere
thereiswork,shesaid.Sheaddedthatbiggercarriershavebeguntopushoutthesmaller
carriersasaresultoftheeconomy.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthathisfirmsdeclineingrowthhasbeenduetothebadeconomy.
Thisissimilartotherestoftheindustry.Timesaretough,hesaid.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatmarketplaceconditionsareverydifficultrightnow.Shesaid,Fuelcostsare
hugeandweareatthemercyofretailfuelcosts.Allmaterialsaremoreexpensivenowandour
marginsareshrinkingasaresult.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE3

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatduetotheeconomicdownturn,theyhadtoshrinktheircompany
dramatically.Shesaid,Weusedtohave12fulltimeemployees,nowweonlyhaveonealong
withafewparttimeemployeesweuseonacontractbasis.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompany
mentionedthatthegrowthhadbeenconsistentuntilthelastfewyears.Shestated,Thisisthe
worststretchofworksinceIhavebeeninthebusinesssince1979.Sheadded,Astheeconomy
gotworse,itjustwentdownhillforusandotherslikeus.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatthemarketisnotgreatrightnow.Hesaid,Imbarelykeepingmyheadabove
waterrightnowbutthereareopportunitiesoutthere.IwouldliketomakealltheworkIdidto
getcertificationworthwhile.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatthecurrentmarketplaceconditionshavebeenbad.Hesaid,Our
workisgreatlyimpactedbytheeconomyingeneral.Becausetheeconomyhasbeensobad,we
havehadtobemuchleanerandlaysomepeopleoff.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
mentionedtheoverallmarketconditionsnowarenotstrong.Hestated,Themarketisnotgood
now.Profitmarginsarewaydownfromwheretheywereseventoeightyearsago.Ihadtomake
themoveintothehighwaymarketduetothehousingbust.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathe
hasseenchangesinthemarketplaceconditions.Hesaid,Thingsseemtobepickingupnowbut
since2008,ithasbeenreallylean.Thelackofworkandrisingcostsforeverythingfrom
materialsandequipmenttogasmakeithard.
TheHispanicAmericanownerofaDBEcertifiedengineeringfirmreportedthathiscompanyis
oneofthebiggerDBEcompanies.Hesaid,Theresmorepeople[DBEs]disappearingthan
appearing.Theresnotenoughoutreachandprogramsouttherethataregoingtodevelop[DBE]
companiesthataregoingtobeviabletosurviveinthiseconomy.
Anumberofintervieweesreportedthatlargerfirmsarekeepingmoreworkand
subcontractinglessworkout.Theyalsoreportedthatlargerfirmsarecompetingforsmaller
jobsandthatfirmsarepursuinghighwaycontractingworkthathadbeeninotherpartsofthe
constructionindustry.Thesetrendsappeartonegativelyaffectsmallercompanies.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
generalmarketplaceconditionsareliketherestoftheeconomyslow.Shesaid,Foronething,
everythingisreallyslow.Bigcompanieshavecutbackandareeithercompetingforourworkor
doingmorestuffinhousethattheyusedtosubouttous.Bigcompaniesaretryingtorunusout
ofbusiness.Sheaddedthatshehasusedalmostallofmysavingstokeepthebusinessrunning.
Wecanholdonforawhilelongerbutwecouldgobrokeifthingsdontturnaroundsoon.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE4

Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmsgrowthhasbeenstagnant.Hesaid,Itisreallytoughrightnowtogetbusinessbutwe
managetostaybusy.Hesaidthatthecurrentenvironmentisverydifficultforsmallbusinesses.
Hesaid,Wecantgetanywork,itseemslikethebigfirmsgeteverything.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthatalthoughall
constructionfirmsarefacingaweakmarket,hiscompanyhasnobusinessatthistimeandhe
hadtolayoffallhisemployees.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatlocal
marketconditionswerecharacterizedbylowdemand.Hesaidthathehadexperiencedadecline
inrevenueeveryyearoverthepastfiveyears.
TheAsianPacificAmericanownerofanengineeringcompanyandrepresentativeofthe
AmericanCouncilofEngineeringCompaniesCalifornia[IntervieweeSM#2]indicatedthatthe
engineeringindustryischanging.Theresadivergencenomoremediumfirm,youreeither
verylargeorverysmall.
IntervieweeSM#12,theHispanicAmericanownerofaDBEcertifiedhighwayconstruction
business,said,Asthemarkethasgottenhorribleinthelastthreeorfouryears,itsgotten
horriblefortheprimecontractorsbutforthesubsaswell.Whatitsforcedpeopletodo,is
peoplecomefromothermarketsintothehighwayconstructionmarketincludingCaltrans
thatusedtodo,whatever,commercialbuildingsorresidentialtheyrejusttryingtofigureout
awaytomakealiving,tosurvive.Healsosaidthat,becauseprimecontractorsaretryingto
survive,theyaretakingonworkthat,historically,wouldhavebeensubbedout.Thisfurther
reducestheamountofworkavailabletosubcontractors.
IntervieweeSM#1,aHispanicAmericancontractorandrepresentativeoftheHispanic
ContractorsandSuppliersAssociation,reportedthatmanymembersofhisorganizationhave
goneoutofbusiness.Mostoftheguyswhoarecontractorsgrewupinthetradesthat
matriculatedintobusinesses.Hewentontosaythattheyneedassistanceregardingthe
difficultiesofbeingacontractortoday.Hereportedthatbeingacontractortodayisverydifficult,
withextremecompetition.Theresalotofguysworkingouttherefornoprofitjusttryingto
breakevenandkeeppeopleworking.
Afewintervieweesnotedthatmarketconditionshavebeenpoorbutnowmightbe
improving.Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectrical
company,statedthatmarketplaceconditionshavebeenslow.Hesaid,Itsallbeenslowthelast
year.But,nowthingsdoseemtobepickingup.
Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertifiedenvironmental
consultingfirm,saidthatmarketplaceconditionsweredifficultdepressed.Sheaddedshe
sawsomesignsofhope.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE5

Afewintervieweesreportedthattheyhaveperformedwellinthesloweconomy.Interviewee
#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBEcertified
environmentalconsultingcompany,statedthatgenerallyspeaking,themarketplaceconditions
aregoodforourcompanyinourlocalarea.Shealsostatedthatthingsareslowlyturning
upwardformanycompaniesinthearea.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthatthegrowthofthecompanyisbetterthanother
similarcompanies.Hestated,Wearemovingaheadwhileothersaredownsizing.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthatthereis
moredemandforhercompanywhentheeconomyisweakandlargerfirmslayoffpersonnel.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatmarketplaceconditions
aresolidwiththesustainableenergymarketbutthatconditionsaremuchmoredifficult
elsewhere.
Someintervieweesreportedthatthemarketplaceconditionsinthepublicsectorarebetter
thanintheprivatesector.Interviewee#14,theAfricanAmericanoperationsmanagerofan
MBE/WBE/DBEcertifiedwastetransportationcompany,stated,Thepublicsectorisgrowing
fasterthantheprivatesectorforourtypeofwork.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Publicisdoingallthework.Privateisnotspendingmoneynow.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
marketplaceconditionsarebetterinthepublicsector.Hesaid,Itisthesametypeofworkbut
thereisnoprivatesectorworknow.Iprefertoworkintheprivatesectorbutitissocompetitive
andcutthroatnowbecauseofhowslowitis.Theopportunitiesjustarentthereanymore.
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,said,Marketplaceconditionsarepoorandgettingworsefortheprivate
sector.Marketplaceconditionsforthepublicsectorarebetterandimproving.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Privatesector
workhasdriedup.Noweveryoneiscompetingforpublicsectorwork.Peoplearecominghere
fromoutofstate.IdoubtthattheymeetCalifornialicensingandinsurancerequirements.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,characterized
marketconditionsintheprivatesectorasslow.Hereportedthattherewasplentyofworkinthe
publicsector,buttherewasconsiderablecompetitionforpublicsectorwork.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,Privateworkisntthere.Publicworkisavailable,but
cumbersometosubmitbids.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE6

Oneintervieweereportedthatthemarketplaceconditionsarenowbetterintheprivatesector
thaninthepublicsector.Interviewee#31,thewhitemaleowner/operatorofacertifiedsmall
majorityownedroadgradingbusiness,said,[Marketplaceconditionsare]betterintheprivate
sectorbecausethejobsaretherightsize.Thereareprobablyfivecompaniesintheareathat
dominateallthatpublicsectorwork.Theyregearedupandsizedupforit.Youdontseemany
smallpublicprojects.
Someintervieweesreportedthatthemarketplaceconditionsaresimilarintheprivatesector
andinthepublicsector.Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertified
company,reported,Themarketisfairlysimilarfortheprivateandpublicsectors.Wedontsee
muchdifferencewhenitcomestopavementgrinding.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthattherearenorealdifferencesintheprivateandpublicsectors
buthesaidthatitismuchmorepricecompetitivenowwithlargerfirms.Hesaid,Otherbig
companiescanoutbidusandcomeinsolowthatwecantcompete.Thebigguyswho
manufacturetheirownaggregateandsandcanbidalotlowerthanwecanbecauseweareatthe
mercyoftheretailmarketforthesamestufftheymanufacture.Wecantcompetewiththat.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,The
marketisverysoftandgettingslower.Itisthesameforboththepublicandprivatesectors.
KeystoSuccessinaDifficultMarket.
Manyintervieweescitedqualityandlowpriceaskeystostayinginbusiness.Interviewee#3,
thewhitemaleownerofaconcreteandconstructioncompany,saidthatinordertobe
competitiveinhislineofbusinessyouhavetohavegoodqualityandcompetitivepricing.He
said,Qualityishuge,butpriceoftenwinsout.Sometimespeoplejustwantthecheapestbid.He
addedthatyouhavetohaveagoodreputationsothatyoucanevenbeconsideredbutreiterated
thatpriceishuge.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthattobecompetitiveinthislineofbusinessyouhavetoberate
competitive.Rateshavetobewherecustomerswantthemoryouwontgetwork.Sheadded
that,Qualityiskey.Wetrytodothebestjobwecan.Ifyoudontdeliverwhatyourcustomers
wantwhentheywantit,theyllnevercallyouagain.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthattobecompetitiveinthislineofbusiness,youhavetobepricecompetitive
andprovidequalityservices.Shesaid,Ourlongtermcustomersknowthatwewilldeliverwhen
theyneedustoandthatwedoagoodjob.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
notedthatinordertobecompetitive,pricingisthemostimportantthingandhavingsolid
contactsisessential.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE7

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthattobecompetitiveinthislineofbusiness,youhavetoprovidequalitywork.
Shesaid,Wealwaystrytooverdeliver.Thatisthekeytosuccessdontjustdothebare
minimum.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,We
havetolowerourratestostaycompetitivewiththebiggercompanies.Youalsohavetodoyour
homework.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,Ittakesgoodpricing,versatilityandreliabilitytobe
competitiveinourlineofbusiness.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Tobecompetitivewehavetohavegoodchemistrywithourprimes,work
ethichastobegoodandoverallworkhastobegood.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Inallhonesty,theonlywaywecancompeteis
tolowerourpricesandtakealowermargin.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatinordertobecompetitiveinhislineofbusiness,qualityandexpertiseisthe
key.Hesaid,IprovideafairlyspecializedsetofskillsandIhavetoprovidequalityworkata
goodpricetobecompetitive.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatforhisfirmtobecompetitiveinthislineofbusinessyouhaveto
balancequalityandprice.Hesaid,Wecantcompetewithhugefirmsbecausewedonthavethe
assetstheydo.Wehaveagoodreputationwhichishugeinthisbusiness.Ourcustomersknow
thatwecanmeettheirdemandsandthatisahugedifferentiator.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Rightnowitisdifficulttobecompetitiveinthemarket.Youhavetobedetailoriented
andwillingtolowerprofitmargins.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatto
becompetitiveinhislineofbusiness,costiskey.Hesaid,Costisthebiggestdriverandyou
needfinancingtostaysolventwhencustomerslikeCaltransdontpayfast.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,said
that,inherview,tobecompetitiveinthislineofbusinessyouhavetohustle.Shesaid,You
havetobesharpandasawoman,youhavetobepushyotherwisepeoplewilltrytotake
advantageofyou.Shecontinued,Wehavehadtocutcostssothatwecancompetewiththe
manycontractorsouttherewhodonthavelicenses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE8

Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthattobe
competitiveinhislineofbusinessitisnecessarytoperformhighqualityworkandbe
dependable.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,saidtobecompetitiveabusinesshastobeontimeandon
budgetperformance.
Otherintervieweescitiedgoodcontacts,goodemployeesandgoodequipmentaskeystosuccess.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,
Knowingpeopleintherightpositionorintherightagency.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,said,A
contractorthattakescareofbusinessandhasagoodcrew.Thatstheonlywaytobecome
competitive.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompany
mentionedthatinherlineofbusinesstheequipmentisthemostimportantfactorinbeing
competitive.Shestated,Latermodeltrucksandgoodmaintenanceisthekeyforus.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saiditishardtosaywhatittakesforafirmtobecompetitivebecauseofthecurrentmarket.
Businessiscontractingbecauseoflackofrevenue.Heisoptimisticbecausehehasagoodcrew
andequipment,butitishardtokeepemployeeswithlittlework.Healsostatedthatwearand
tearonequipmentrequirescreditifyouwanttobuynewequipment,whichfurtherexacerbates
theproblem.Replacingequipmentwithoutcreditishard,hesaid.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringfirm,saidthather
pricesarecompetitivewithotherfirmsbecauseshehashadsomuchexperience.
Someintervieweespointedtoflexibilityasakeytosuccess.Interviewee#17,thewhitemale
estimatoratanoncertifiedwomanownedtruckingcompany,saidthekeytobeingsuccessfulis
thatyouhavetobeflexibleandwearalotofhatstomakeasmallbusinesswork.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthathe
believesthattobecompetitiveinhislineofbusiness,companiesmustbeflexible,malleable,and
willingtochangewithchangingconditions.
IntervieweeSM#1,aHispanicAmericancontractorandrepresentativeoftheHispanic
ContractorsandSuppliersAssociation,reportedthatsmallbusinessesarebeingselectivein
whattheybid,lookingforplaceswheretheyhaveaniche.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE9

ExperiencesinthePrivateSectorandPublicSector.
Manyfirmsreportedflexibilitytoworkonbothpublicandprivatesectorprojects.Forsome,the
mixofworkwasstable.Somefirmstendedtobeincreasingtheiramountofprivatesectorwork.
Theamountofpublicsectorworkwasgrowingforothers.Changesinthemixofworkforthese
companieswereprimarilyduetostrongerorweakerdemandforworkintheprivateorpublic
sector.
Someintervieweesreportedfairlyequalworkinthepublicandprivatesectors.Interviewee
#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,mentionedthat
hisworkisthesameregardlessofpublicandprivatesectorcontracts.Hesaid,Mydesignwork
endsupbeingsplitfairlyevenly,50/50,betweenthepublicandprivatesector.Hestatedthat
therehavebeenebbsandflowsoverthelastfewyearsbetweenpublicandprivatesectorwork
withnospecifictrendeitherway.Headded,Mymixofworkdoesvaryacrosstheyearsbut
generallydoesntchangemuch.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,
Mostyearsourworkissplit50/50betweenpublicandprivate.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompanystated,
Iwouldestimatethatitis50/50whenitcomestothesplitbetweenpublicandprivatesector
projects.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthatthefirmsmixofworkisapproximately60percentpublicand40percent
private.Shestated,Itistrendingawayfromprivate,thereisnotmuchprivatemoneyoutthere.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatthemixofpublicandprivatesectorworkisprettyequaland
thereisnotrendtowardorawayfromprivatesectorworkthathehasnoticed.
Interviewee#20,thewhitemaleownerofademolitionandloadingcompanymentionedthathis
workissplitfairlyevenlybetweenthepublicandprivatesectors.Hestated,MorerecentlyI
havedonemoreprivatesectorworkbutoverallthesplitisaboutevenandtendstobethatway
mostyears.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany;
saidthathisworkis50percentpublicsectorand50percentprivatesector.
Someintervieweesreportedthatmostoftheirworkisintheprivatesector.Anumberof
interviewees,includingminority,womenandmajorityownedfirms,indicatedthattheyare
movingmoretoprivatesectorwork.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,statedthatmostofhisworkcomesfromtheprivatesector.
Headdedthatthetrendinthemarketplacehasbeenmoretowardprivatesectorbecauseofthe
tightmarginsinthepublicsector.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE10

Interviewee#2,thewhiteprincipalofanenergycompany,statedthatcurrently90percentofhis
workcomesfromtheprivatesector.Hesaid,Ourworkistrendingtowardstheprivatesectoras
wefeellikeweareunabletocompeteforpublicsectorjobsduetothebureaucracy.Hestated
thatitiseasiertoworkintheprivatesectorandtherehasbeenmorebusinessthereinrecent
years.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthatthe
trendhasbeenmoretowardprivatesectorwork.Hesaidthatinhisfirstyearinbusiness,they
did70percentprivatesectorand30percentpublicsectorwork.Hesaidthatnowitisalmostall
residential,privatesectorwork.Hesaid,Ihavebidonsomepublicsectorworkbutmysuccess
ratehasntbeentoogood.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Thelargestportionofourworkisresidential,privatesectorwork.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltandconstruction
company,indicatedthatthetrendlatelyhasbeenmoretowardprivatesectorwork.Shesaid,I
thinkitisduetotheeconomyandthatalotofprivatebusinessesseemtobedoingbetterand
needworkdonenowthattheyputoffforthepastfewyears.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanownedelectricalcontractor,saidthathisworkis100percentprivatesector,therehas
beennotrendtowardorawayfromprivatesectorwork,andthemixofworkdoesnotvaryyear
byyear.
Someintervieweesreportedworkingpredominatelyinthepublicsector.Interviewee#4,the
AfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,statedthatthe
trendismovingtowardsthepublicsectorastheprivatesectorworkhasdriedup.Hementioned
thatthreeyearsagotherewasalotofprivateworkbutthatdevelopershavenomoney.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatthetrendhasbeenmoretowardpublicsectorwork.Shesaid,Thetypeof
workwedoseemsmoregearedtopublicsectorandwedontseethatchanging.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthat85to90percentoftheirworkisperformedinthepublicsector.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatmostofthecompanysworkcomesfrompublicsector.Hesaid,Commercialworkhas
almostcompletelydriedupandonlypublicsectorrelatedworkisavailable.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
mentionedthathedoesworksolelyinthepublicsector.Hestated,100percentofourworkisin
thepublicsector.WeuseourDVBEcertificationasoftenaspossible.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,said,Just
abouteverythingwedoispublicsectorrelated.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE11

Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwhitewomanowned
constructioncompany,said90percentofourworkispublic.Wevebeengettingmorepublic
workinthelastthreeyears.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidthattherehasbeenatrendfromprivatesectortopublicsectorwork.Hesaidthat
thecompanysworkwas90percentprivate,butisnow90percentpublicbecauseoftheweak
economy.
Someintervieweesreportedchallengesinconnectionwithpursuingorperformingworkinthe
publicsector.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidpublicsectorworkhasnotbeenagoodexperience.Hestatedthatthe
biddingprocesswashorrible.Bidsandproposalstookalotoftimeandexpense.Poormargins
ledtolosingmoneyonnearlyeverypublicsectorjob.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatinhisexperience
attemptingtogetworkinthepublicsectorislengthierandmoreworkintensive.Hestatedthat
itiseasiertogetworkintheprivatesectorasitismuchlesscumbersomeandhaslesshurdles
toovercome.Hestatedthathisfirmisunabletocompeteforpublicsectorjobsduetothe
bureaucracy.Theamountoftimerequiredforapublicsectorbidisshocking.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathe
knowstheprocessisdifferentbetweenpublicandprivatesector.Hesaid,Imstilltryingto
understandthepublicsector.Itisharderbecausethepublicsectorusuallyjusttakesthelowest
bidwhichisntalwaysthebestbid.Intheprivatesectorwejustgivethemabid,butinpublic
sector,wehavetobreakoutthecostsalotmore.ThesetakealotlongertofinishbecauseIhave
toeducatemyself[ontheprocess].
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatitiseasiertogetprivatesectorworkbecausethegovernmentwantsonlythe
cheapestfirms.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Wedontlookintomuchpublicsectorworkbecausetheawardingauthorities
donthaveagoodunderstandingofactualworkbeingdoneandwhatisrequiredfromavendor.
Hesuggestedthatthepublicsectorshouldbeaskingforreferencesandproofofworkcompleted,
notjustdecidingthewinningvendoronprice.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,said,Theworkisallthesamebutthereismoreredtapeinthepublicsector,
liketherequirementtohaveasitesupervisorwhohastosignoffoneverything.Youwont
normallyseeasupervisoratast tionwithprivatework.Itjusttakeslonger. a
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE12

Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,indicatedthatalthoughhehasnotdoneworkasasubcontractor,hisisonseveralpre
qualifiedvendorliststhathehopeswillleadtosubcontractingopportunities.Hesaid,Im
lookingtobranchouttothepublicsectorthroughtheselistsandusingmycertificationbutI
haventhadanyluckyet.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthatshe
oncehadarepresentativefromKodakflyinandtheyhadacontractthatafternoon.She
continued,Whywouldwegothroughthenonsenseofstatecontractingifwecangetasizable
contractlikethat?
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Itiseasiertogetworkintheprivatesector.Thereislessworkinvolvedingettingprivatesector
contracts.
IntervieweeSM#8,thewhitemaleownerofanengineeringfirm,saidthathehasspentseven
yearstryingtobreakintopublicagencywork,withoutsuccess.Idoalltheworkanybodyelse
does,butitshardtobreakinbecauseIdonttalkthesamelingoordonthavethesame
contacts.Headded,Someonecomingfromthepublicsectorintotheprivate[sector],theyseem
tohavebetteraccessback.IntervieweeSM#23,arepresentativeoftheNationalSocietyof
HispanicProfessionalEngineers,agreed.IfIstepoutofaCaltransorcountyorMetro
environmentafterfivetotenyearsofexperienceandstartupabusiness,amIgoingtobe
disadvantaged?Intodaysworld,inthelast30years?No,Imgoingtohaveanadvantage.Now
whatdoesthatdototheotherpopulations?
PerceivedAdvantagesofPrivateSectorWorkandDisadvantagesofPublicSector
Work.
Someintervieweesreportedthattheywereattractedtoprivatesectorworkbecauseitismore
profitable.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcrete
business,saidprofitabilityinprivatesectorworkistypicallybetterbecauseofthetightbudgets
andmarginsinthepublicsectorwork.However,hestatedthatprivatesectoropportunities
havedriedup.Hesaid,Until2008,business[intheprivatesector]wasgood.Webeganbidding
onpublicsectorworkbutthebiddingprocesswashorrible.Headded,Welosemoneyon
publicsectorwork.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatthereisadifferencein
profitability;privatesectorworkismoreprofitablethanpublicsectorwork.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatprofitabilityisstrongerintheprivatesector.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,The
privatesectorisdefinitelymoreprofitable.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE13

Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatprofitabilitydoesdifferbetweenthepublicandprivatesectors.
Hesaid,Marginsinprivatesectorworkaremuchbetterbutitdependsonthejob,though.Ifwe
arecloseby,itismoreprofitable.Ifwehavetotravelforthejob,ourmarginsgeteatenup.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
profitabilitydoesdifferbetweenprivateandpublicsectors.Hesaid,Privateworktendstohave
moremoneyandyoucanrecoupcostsbecausetheypayfaster.Youdonthavetocarrycostsand
sweatitouttogetpaidlikeyoudowithpublicsectorwork.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthegreatest
differencebetweenworkinginthepublicsectoristheneedtopayprevailingwagesforpublic
sectorwork.Headded,Thereismoreprofitinprivatesectorjobs,becauseitisnotnecessaryto
payprevailingwages.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
said,Theprivatesectorismoreprofitable.Youknowwhatyourprofitwillbe.Toomuch
bureaucracyinthepublicsectorlowersprofitability.Thereislesscostefficiencyinthepublic
sector.
However,someintervieweesreportedthatprofitabilityinthepublicsectorandtheprivate
sectoraresimilarorthatpublicsectorworkismoreprofitable.Interviewee#3,thewhitemale
ownerofaconcreteandconstructioncompany,saidthatprofitabilityinthepublicandprivate
sectorsaresimilar.Hesaid,Theworkisthesameandthemoneyissimilarbutitisharderto
findoutaboutworkinthepublicsector.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatinourindustryprofitabilityissimilar
forpublicandprivatesectorjobs.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatprofitabilitydoesnotdifferbetweentheprivateandpublicsectors.
Shesaid,Ourpricesarethesameforbothpublicandprivatesectorbutwewillworkonrates
forcustomersineithersector.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatprofitabilityisthesameineitherthepublicorprivatesectorbut
indicatedthathehadtroublebeingpaidinthefewprivatesectorjobsheworkedon.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatprofitabilitydoesnotdifferbetweenprivateandpublicsectors.Shesaid,We
knowthecostofourmaterials,ouroperationsandwhatmarginswehavetocharge.Itdoesnt
matterwhetheritispublicorprivatesectorfromthatstandpoint.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said,
ProfitabilitydoesnotdiffermuchbetweenthesectorsandthatanydifferencesIseearepurely
situational.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE14

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthattherearenosubstantialdifferencesbetweenworkinginthepublicsector
versustheprivatesector.Shesaid,Wechargethesameforourservicesregardlessoftheclient.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthattheirprofitabilitydoesnotdifferbetweenthesectors.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Profitabilityisthesameforourproducts
regardlessofthesector.Wepricejobssimilarly.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany
stated,Doingtheworkintheprivateandpublicsectorsisthesame.Ihavehadgood
experiencesinbothandtheprofitabilityisaboutthesameinboth.Ichargethesamerateto
both.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
profitabilitydoesnotreallydifferbetweentheprivateandpublicsectorsforherfirm.Shesaid,
WewillgetpublicsectorcustomerswhowilltelluswhattheirbudgetisandhowmuchIcan
bidbutwhatwewilldoforacertainamountofmoneydoesntchangejustbecauseitispublicor
privatesector.WehavecustomersinboththatwillaskusWhatcanyoudoformefor$16,000?
forexample.Butthatdoesntimpactourprofit;itjustimpactswhattheywillget.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Theresnodifferenceinprofitability.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,reportedthat
profitabilityisthesameintheprivatesectorasitisinthepublicsector.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,inresponsetoaquestionofwhichsectorwas
moreprofitable,saidthattherewasnodifferenceinprofitabilitybetweenthepublicandprivate
sectors.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,Thereismoreprofitinthepublicsector.Wehave
workedoutamodelthatmakesitmoreprofitabletodopublicsectorwork.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,reportedthatpublicsectorworkhadbeenmoreprofitable,butnowitsdifficultto
determinewhetherpublicorprivatesectorworkhasmoreprofitpotential.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,
Theresmoreprofitinpublicworkifyoucanwinandgetinline.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE15

Manyintervieweesreportedthatitiseasiertosecureworkintheprivatesector.Interviewee
#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedtrafficengineeringcompany,
statedthatthatworkistoughertogetinthepublicsector.
Interviewee#5,thesalesmanagerofanoncertifiedconcretepavingcompany,mentionedthat
gettingworkintheprivatesectorismucheasierthanthepublicsector.Hesaid,Thepublic
sectorisextremelycumbersomeandmostoftenitisntworththetimeinvestment.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Itis
aneasierprocessgettingworkintheprivatesector.Thereislesspaperwork.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
itiseasierattemptingtogetworkinprivatesectorcomparedtopublic.Shesaid,Theyboth
havethesametypeofneedsandwechargethesamewhetheritspublicorprivate.But,with
mostpublicsectorwork,youhavetobreakdowneverythinginahugeway.Youhavetoitemize
everythingwhichisapain.Publicsectorworkalsousuallypaysmoreslowlytoo.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatitis
toughinthebeginningtoknowwhatisrequiredtogetpublicsectorwork,andthatgettingwork
intheprivatesectoriseasierbecauseitismorestraightforward.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidthatsecuringworkinthepublicsectorismoredifficult.Hestated,Privateis
easier.Theythrowa[requestforbid]outthere,yougivethemanumber,anditsoverwith.You
donthavetogothroughreviewboards,thiscriteria,thatcriteria.Publicmakesitalotharder
thanithastobe.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,Online
biddingsimplifiesbiddinginthepublicsector,butattemptingtogetworkintheprivatesectoris
easierandwehaveahighersuccessrate.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saiditiseasiertosecureworkintheprivatesectorbecausemyfriendsknowmeandcallme
aboutprojects.Inthepublicsectoritsallthroughsubcontracts.
Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertifiedenvironmental
consultingfirm,said,Gettingworkintheprivatesectorismuchmoresimple.Theychoose
basedonreputationandqualityofwork.Theresnottheelaboratecontractsthatneedtobe
approvedbyeverybody.Youcanspendalotoftimeandmoneygoingafterapublicsectorjob
andnotgetit.
IntervieweesSM#8and#21,bothwhitemaleownersofengineeringfirms,broughtupthe
frustrationsmallbusinesseshavewiththelegallanguageinpublicsectorcontracts.They
perceivethatitisnearlyimpossibletohaveunfavorablecontractlanguagechanged.Interviewee
SM#15,arepresentativeoftheSouthernCaliforniaContractorsAssociation,saidthatpublic
agencieswillchangecontracts.Dontassumethateverythingisnonnegotiable.Unfortunately,
thatmayhavebeenthecaseinthepast.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE16

Receivingtimelypaymentwasanadvantageofprivatesectorworkforsomefirms.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,discussedthesubstantialdifferenceinpaymentofinvoices,statingpublicsector
agenciesaverage120dayspayment,whileprivatesectorpaysinapproximately30days.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reportedthe
substantialdifferencebetweenpublicandprivatesectoristhattheprivatesectorworkgenerally
paysquicker.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
maindifferencebetweenworkingintheprivatesectorversusthepublicsectorishowquickly
yougetpaid.Hesaid,Privateworkpaysalotfaster.Caltransdoesntpaytimelytoprimeswho
passthatalongtosubs.Itsalmostliketheyaretryingtorunyououtofbusinessbynotpaying
you.
Someintervieweesidentifiedotheradvantagestotheworkintheprivatesectorcompared
withthepublicsector.Interviewee#5,theSubcontinentAsianAmericanownerofanon
certifiedconcretepavingcompany,said,Theactualworkintheprivatesectoriseasierto
completebecausethesignoffiswiththecustomerasopposedtothepublicsectorwherethe
approvalprocessoftenhasmultipleapprovalandsignoffsteps.Overall,theworkintheprivate
sectorisbetterforbusiness.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
mentionedthattherearesomenoticeabledifferencesbetweenthepublicandprivatesectors.He
stated,Intheprivatesectorsomeofthefirmsandjobsarelessregulatedthanthesimilarpublic
sectorjobs.Generallyspeakingthepublicsectorjobsaremoreformalbutthatdoesvaryby
jurisdiction.Someofthejurisdictionsarelessregulatedthanothers.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
thebiggestdifferenceinworkingintheprivateandpublicsectorsisbonding.Shesaid,Bonding
inthepublicsectorisprohibitiveforasmallbusinesslikeours.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatpublic
sectorworkismorestructured,andthathehasmorefreedomonprivatesectorprojects.Hesaid
thatperformingworkintheprivatesectorwaseasier,becausetherearemoreissuestodeal
withinthehighlystructuredpublicsector.
Interviewee#30,thewhitefemalevicepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,reportedthatthereweresubstantialdifferencesbetweenworkinginthepublic
sectorversustheprivatesector.Shesaidthedifferenceswereduetopayment,inspectors,and
paperwork.Sheaddedthatthecompanycouldgetmoreaccomplishedwhenworkingonprivate
sectorjobs,becausepublicsectorworkinvolvedmeaninglessregulations.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,identifiedseveraldifferencesinworkingthepublicsectorversustheprivate
sector.Hesaid,[Inthepublicsector]prevailingwagesarehuge,anddoingcertifiedpayroll.You
havetofigureonabitmoreclericalwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE17

Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,notedsubstantialdifferencesbetweenworkinginthepublic
sectorversustheprivatesector.Hesaid,Publicworkinvolvesprevailingwage,certifiedpayroll,
andmorepaperwork.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,Public
sectorworkrequirescertifiedpayrollandownerinsurance.Privatesectorworkhaslower
workerscompensationrates.Healsoidentifieddifferencesinsecuringworkinthepublicand
privatesector,becausethepublicsectorisdonethroughonlinebidding:fillinnumbers.Getting
workintheprivatesectorinvolvesoldfashionednetworkingandmarketing.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,noteddifferencesbetweenworkinginthe
publicsectorandtheprivatesector.Hesaid,Usuallytheresacontract[inthepublicsector].If
youretheprime,youhaveacontractandyourelockedintocertainthings,andifyoureworking
foraconsultantwhohasacontactyourelockedintohiscontract.Intheprivatesector,thats
usuallyjusthandledoverthephone.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,
Paperwork,details,andqualificationsinthepublicsectoraremoreextensive.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saidthatonedifferencebetweenpublicsectorworkandprivatesectorworkisthatmeetings
andreviewsdriveupthecostsforpublicsectorprojects.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,said,Its
easier[towork]intheprivatesector.Imhavingtomakesomemodificationstomycompanyto
workinthepublicsectorarena.WhatImeanbythatisImhavingtobeasignatorycontractor
withtheunionsinordertodoprimarilypublicsectorwork.Theunionshaveatightgripon
everythinghere.
Greatercertaintyofbeingpaidatallwasanadvantagetopublicsectorworkforsomefirms.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,said,Ivedoneseveralresidentialprojectsinthepastfewyearswherewe
didntgetpaid.Interviewee#27,themalevicepresidentandtreasurerofanoncertified
womanownedconstructioncompany,said,Wevehadproblemsgettingpaidforprivatesector
work,butweknowthatwellgetpaidforpublicwork.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,said,
Privatesectorworkisjusttoughtoget,andhardertoforceyourhandtogetpaid.Publicsector
workiseasiertogetpaidandthereismoremoneythere.
Someintervieweesreportedthatitiseasiertosecureworkinthepublicsector.Interviewee
#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,said,Privatesector
workisjusttoughtoget,andhardertoforceyourhandtogetpaid.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE18

Someintervieweesidentifiedotheradvantagestotheworkinthepublicsector.Interviewee
#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,statedthat
theprocessisdifferentbetweenprivateandpublicsectorjobs,mainlyduetothe
DBE/MBE/WBEsetasidesinthepublicsectormarket.
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,said,Doingworkinthepublicsectoriseasierbecausetherearewell
definedrequirements.
Otherintervieweesreportedthattherearenosubstantialdifferencesintheirexperiences
pursuingandperformingworkinthepublicandprivatesectors.Interviewee#6,theAfrican
AmericandiversitymarketingmanagerofanMBE/SBE/DBEcertifiedenvironmentalconsulting
company,statedthatthereisnosubstantialdifferenceinthework,thatitisalljustbusiness
andtherearechallengesinbothpublicandprivatesectorwork.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidtherearenosubstantialdifferencesbetweenworkinginthepublicsector
versustheprivatesectorbecausetheyprovidefuelhaulingservices.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saiditishardforsmallbusinessesineithersectortofindworkorprimes
whohavemightneedsubs.Hesaid,Howdoyouidentifythepiecesthatyoumightbequalified
for?Youcantbidonthewholething[asasmallbusiness]soonlybigfirmsgetthework.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompany
mentionedthatitdoesntdifferbetweenprivateandpublicsectorwork.Shestated,Theworkis
justthesameforus,doesntmatterifitsforthecityorforaprivatecompany.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthattherearenosubstantialdifferencesbetweenworkinginthepublicsectorversusthe
privatesectorexceptthatthereisnoprivatesectorworkavailableintheirareanow.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatthereisnosubstantialdifferencebetweenworkinginthepublic
sectorversustheprivatesector.Hesaid,Thereisnotaprojectwefeelwecanthandle.Wedont
seeanybigdifferencesbetweenpublicorprivatesectorworkintermsofgettingthework.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany,
stated,Theworkisalwaysthesameduetothenatureofmywork.Itisallthesametome.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
therearenosubstantialdifferencesbetweenworkinginthepublicsectorversustheprivate
sector.Hesaid,No,itistoughineither.Somecustomerswillpayfastbutmostlagformorethan
40days.Thatistrueofpublicandprivatework.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Doingworkintheprivatesectorisaboutthesameasworkinginthepublicsector.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE19

PrimeContractandSubcontractWork.
Someofthefirmsinterviewedworkasbothaprimecontractorandasasubcontractor,andsome
primarilyasasubcontractor.Thetypesofworkperformedbythefirmsometimesinfluenced
whetherthecompanyworkedasaprimecontractor,subcontractor,orboth.
Someintervieweesreportedactingequallyasaprimeandsubcontractor.Forexample,
Interviewee#2,thewhiteprincipalofanenergycompany,statedhisfirmworksasa
subcontractoraswellasaprimevendorandthateachopportunitydictatestheroleavailable.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
theyworkbothasaprimeandsubcontractor.Hesaid,Itisamix,thereisalotofsubworkout
thereandwehavedifferentequipmentthatisneededthatalotofprimesdonthave.
Interviewee#37,theAfricanAmericanpresidentofacertifiedelectricalcompany,saidthatheis
asubcontractorabout50percentofthetimeandaprimecontractor50percentofthetime.In
explainingwhyhiscompanyservesinaparticularrole,hereplied,Thosearejustthejobsthat
becomeavailable.Itakewhatcomesalong.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatalthoughhiscompanyprimarilyworksasaprimecontractor,
Sometimesthecompanywillfocusasasubsowedonthavetopayprevailingwage.
Someoftheintervieweeswhowereprimarilyprimecontractorswereseekingmore
subcontractwork.Interviewee#1,theHispanicownerofanoncertifiedconstructionbusiness,
statedthatheismostlyaprimecontractorbutthatheistryingtogetawayfrombeingsolelya
primecontractorinordertodomoresubcontractorwork.
Interviewee#3,thewhitemaleownerofaconstructioncompany,saidthatheworks90percent
asaprimecontractor,butthatIvedonesomesubworkandwouldliketoknowabouthowto
findmore.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,indicatedthathecurrentlyworks100percentasaprimecontractorbutsaid,Iwant
tosubtolargerfirms,thatswhyIgotcertification.
Someinterviewees,includingminority andwomenownedfirms,primarilyworkedasaprime
contractor.Anumberexplainedwhy.Interviewee#5,theSubcontinentAsianAmericanowner
ofanoncertifiedconcretepavingcompany,stated,Alargeportionofourbusinessisdoneasa
primecontractorintheresidentialandprivatesectorareas.Interviewee#7,theAfrican
Americanfemalecoownerofanoncertifiedconstructionandhaulingcompany,saidthather
companyonlyprovidesservicesdirectlyforhercustomerswhoneeddeliveries.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatherfirmworksasaprime90percentofthetime.Shesaid,Thenatureofour
workisthatwearetheprime.Thereisnotalotofsubcontractorworkavailableforthespecialty
servicesweprovide.Ifyoudonthaveyourfootinthedoorasaprime,youcantgetthework.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE20

Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanownedelectricalcontractor,said,Wework100percentasaprimecontractor.Itis
easiertoworkastheprimebecausewedonthavetodealwithageneralcontractor.
Someintervieweesreportedprimarilyworkingasasubcontractor.Interviewee#9,theAfrican
AmericanfemaleownerofaDBEcertifiedconstructionandhaulingcompany,indicatedthather
companyworkssolelyasasubcontractorbecausetheyaresimplyamaterialsproviderfor
others.Shesaid,Weprovideaservicebasedonwhatourcustomersarelookingfor,soweare
alwaysasub.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Wealwaysworkasasubcontractor.Wesell
directlytogeneralcontractors.
Interviewee#20,thewhitemaleownerofademolitioncompanymentionedthathiscompanyis
mostoftenasubcontractor.Hestated,Ialmostalwaysworkasasubcontractorforthebig
brothercompany.Theysupplymostofmybusinessandthemodelworkswellforme.
Someintervieweesnotedthattheircertificationstatusinfluencedwhethertheyworkedasa
primecontractororasasubcontractor.Interviewee#21,thewhitemaleownerofaDVBE
certifiedhighwayconstructioncompany,mentionedthatthemajorityoftheirworkisdoneasa
subcontractorwithanoccasionaljobastheprime.Hestated,85percentofthetimeweactasa
subcontractor.ThisispurelyanicheplaybecauseoftheDVBEcertification.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthathiscompany
performsasasubcontractor80percentofthetimeand20percentofthetimeasaprime
contractor.
Someintervieweesreportedactingprimarilyasasubcontractorduetotheirsizeand
sometimesduetoaninabilitytosecurebonding,insurance,orfinancing,orduetoother
barriers.Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertified
concretecompany,statedthereasonthattheyactasasubisthatwecantaffordprime
insurancerequirementsorbondrequirements.Dontthinkwecandoitasaprime.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmalwaysworksasasub.Hesaid,Wehavetobeasubtobiggerfirmsbecausewecant
competeforthebigjobs.Thewayjobsarespecdmakesitimpossibleforfirmsoursizetobe
primes.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltandconstruction
company,saidthattheyworkprimarilyasasubbecausewecantcompetewiththebigguysfor
thetypeofworkweusuallydosowehavetoworkwiththemasasub.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,explainedthattheyservemoreoftenasasubcontractorbecausetheydonothavethe
necessaryworkingcapitaltobetheprimeonlargerjobs.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE21

Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedtheylargelyworkasasubcontractor.She
statedthereasonforthisisthattheprojectsareusuallysolargeanddiversethatitisrarethata
projectwilljustahaveenvironmentalstudiesfocus.
Whenaskedaboutprimecontractopportunities,IntervieweeSM#6,thefemaleownerofaDBE
certifiedconstructionfirmsaid,Theprimejobsfor[hertypeofwork]thatarecomingout,
theyretoobigforme.Icantgetabondfor$2million.Iknowtheysaytheyhavebondinghelp
opportunities,butagainthatsgoingthroughsmallbusinessstufftheresalotofpaperwork.
ThefemaleownerofaconstructionbusinessandrepresentativeofWomenBusinessOwnersand
Executives[IntervieweeSM#11]reportedthattherearemanycompaniesouttherethatcould
bidthatdonotbid.[Thesebarrierskeep]somepeoplefrombiddingthatcouldbidalotof
work.
SubcontractorRelationshipswithPrimeContractors.
Manyintervieweeswhoactassubcontractorsreportedthattheyoftensecureworkwith
primecontractorsthroughtheirpastrelationshipswiththosefirms.Interviewee#4,theAfrican
AmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,statedthattheirworkwith
primesislargelybasedonpastexperience.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Wegotonprojectsasasubcontractorbasedonpreviouscontactwithprime
vendorsthatneedspecificconcretepavingskills.Hestatedthatwordofmouthisabigdealfor
usinthisbusiness.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatthecompanygetsonprojectsbasedon
previousrelationshipswithprimes;itsthesameforprivateandpublicsectorwork.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatshemarketsherfirmtoprimesthroughphonecallsorthroughpast
experience.Shesaid,Primeswillletusknowwhentheyarebiddingonajobandaskusfora
bid.Notallofthemdobutwewillgetarequestforaquoteforasetamountofvolume.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,indicatedthattheygetonprojectsasasubcontractorbyworkingwithprevious
customers,respondingtoinvitationstobid,andthroughCaltransinvitationtobid(ITB)system.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Wegetonprojectsbecauseoftheworkwehavedonewithprevious
customers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE22

Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthathiscompanygetsonprojectsasasubcontractorthroughrelationships.Hesaid,Weare
usuallytrackingthingsprebidsothatwehaveanunderstandingofwhatscomingup.Wetryto
getindepthinformationonupcomingbidsbybeingproactiveandworkingwithourcustomers
tohelpthemsubmitthebid.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthathis
companyisselectedasasubcontractorforbothpublicsectorandprivatesectorjobsbasedon
hisworkperformanceandbusinessrelationships.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,saidhis
companygetsonprojectsasasubcontractorthroughpastrelationships.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmgetsonprojectsasasubcontractorthroughpastrelationshipsandsometimesbecausefirms
knowhehasanMBEcertification.Hesaid,Primescontactmeallthetimebecausetheyknow
thatwedeliverwhenwesaywewill.WealsogetaskedforourcertificationinformationbutI
dontknowhowtheyuseitoriftheyuseit.
TheAsianPacificAmericanownerofanengineeringbusinessandarepresentativeofthe
AmericanCouncilofEngineeringCompaniesCalifornia[IntervieweeSM#2]reported,Thelarge
firmsknowwhatwecandotheyuseusasasubconsultant.Weteamfairlyeasilywith[thebig
firms],theyknowwecandothework.Hesaidthathedoesnothaveissueswithprimeslisting
hisfirmandthennotusingit.Thedifficultywevehadinthepastisexclusivitywhichhas
goneawayatthispoint.Iwouldsayayearortwoagothatwashappening.Youhaveasmallpool
[ofprimes]tobeginwithandthenwerebeingaskedtobeexclusive,andyourchancesdissipate
ifyoucantbeonseveralteams.
Otherintervieweescitedwordofmouth,networkingandprimeinitiatedcontactsasways
theyobtainopportunitiestobidassubcontractors.Interviewee#22,theHispanicmaleowner
ofanoncertifiedconstructioncompany,saidthathiscompanygetsonprojectsasa
subcontractorthroughwordofmouthandnetworking.Hesaid,Alotofprimesknowusand
willcalluswhentheyneedus.Wealsohavepeoplecalluswhentheyseeourtrucksontheroad
oratotherjobsites.Wealsodropinonbusinessestoseeiftheyhaveworktheymightneedusto
do.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
herfirmgetsonprojectsasasubcontractorfromavarietyofsources.Shesaid,Wegetalotof
businessthroughwordofmouthandthegoodrapportwehavewithpastclients.Wealsogeta
lotofbusinessthroughtheYellowBook.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,reportedthat
theirsubcontractingworkisobt inedalmostexclusivelythroughwordofmouth. a
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE23

Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,saidhiscompanygetsonprojectsasasubcontractorthroughwordof
mouth.Hesaid,Wordofmouthisstandardforprivatesubwork.Thereisnodifferencebetween
gettingonassubswhenthereareminorityorwomangoals.
Interviewee#30,thewhitefemalevicepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,saidthattheygetonprojectsasasubcontractorwhentheprimecontactstheir
company.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,saidhe
getonprojectsasasubcontractorbecauseheissolicitedbygeneralcontractors.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathegets
onprojectsasasubcontractorthroughCraigslistandwordofmouth.Hesaid,Illposton
Craigslisteveryweektoseeifanyonebites.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
discussedthathegetonprojectsasasubcontractorthroughhisprofessionalcontacts.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,Wegetonprojectsasasubcontractorbasedonour
certificationsandonourprice.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Wegetonprojectsbysubmittingbids.Wedothisallthetime.Thelargestpartofmy
daysisspentsubmittingbids.Thisisthewaythatitworksintheindustry.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringcompany,saidthat
mostofherworkcomesfromwordofmouth.Shesaidthatitsdifficulttomakeconnections
withlargeprimecontractors.
Anumberofinterviewees,includingsomecertifiedfirms,reportedthatthesameprime
contractorssolicitthemforworkinboththepublicandprivatesectors.Interviewee#4,the
AfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,mentionedthat
theyhavedoneworkwiththesameprimesonpublicandprivatesectorwork.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatprimesusethecompanyforbothpublic
sectorandprivatesectorworkduetotheirpreviousworkexperienceandexpertiseinthe
environmentalconsultingfield.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
sameprimesusehisfirmonpublicandprivatesectorwork.Hesaid,Theyuseusbecausethey
knowwewilldeliverwhenwesaywewill.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthatprimesthatuse
hiscompanyonpublicsectorworkalsousehiscompanyonprivatesectorworkbecausethey
arepleasedwiththequalityofhiscompanyswork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE24

Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidprimecontractorsthatusetheirfirmonpublicsectorworkalsousethemon
privatesectorworkbecauseoftheirworkingrelationships.
Manyminority andwomenownedfirmsthatwerenotcertifiedasDBEs,MBE/WBEs,orSBEs
alsoreportedthatthesameprimeswillusethemonpublicandprivatesectorprojects.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatprimesthatusehercompanyonpublicsectorworkalsousethemon
privatesectorwork.Shesaidthattheworkisallthesameastheyprovidefuelhaulingservices
tocustomersregardlessofwhethertheyarepublicorprivatesector.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
mentionedthatthesameprimesusehimonpublicandprivatesectorwork.Thetypeofwork
thatheperformsisnotimpactedbypublicorprivatesectorcontracts.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,saidtheprimesusethemforpublicsectorandprivatesectorwork.Shestated,Weget
moreworkbasedonthequalityofourproductandbecauseofhowweworktheprimescome
backtous.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
primesusethemonpublicsectorworkandwillalsousethemonprivatesectorwork.Hesaid,
WehavespecialtyequipmentlikeTierIIIequipmentthatalotofprimesdont.Thatisthe
majorityofourbusiness.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
primesuseherfirmonpublicsectorworkandprivatesectorwork.Shesaid,Theworkisthe
samewhetheritispublicorprivatesector.Theyneedasphaltandweprovideitthereisno
differencetous.
Manyinterviewees,includingminority andwomenownedfirms,reportedthatprimesare
opentoreceivingbidsfromtheirfirms.Interviewees#5,13,15,16,eachrepresentingminority
orwomenownedfirms,didnotrecallanyinstanceswhentheyhadbeendeniedtheopportunity
tosubmitabidtoaprimecontractor.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidthathehasneverbeendeniedtheopportunitytosubmitabidoraquote.Hewentontosay
thatratesarereallytightsotherearesomethingswedontbidonbecauseweknowthe
marginsaretootight.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmhasneverbeendeniedtheopportunitytosubmitabidorquotetoaprimewheretheyare
qualifiedtodothework.Hesaid,Therearetimeswherewemightnothavetherightequipment
butthatisntthesameasbeingdenied.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE25

Oneintervieweepointedoutthatsubmittingabiddoesnotmeanthatthebidwouldbe
consideredbytheprime.Interviewee#37,theAfricanAmericanmalepresidentofacertified
electricalcompany,saidaboutprimecontractors,Theyllletyousendabidalldaylong.Idont
knowiftheyreadit.
Mostrepresentativesofmajorityownedfirmsalsoindicatedthattheydidnotknowofany
instanceswhentheyweredeniedtheopportunitytosubmitabidtoprimecontractors.
However,Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityowned
concreteandconstructioncompany,saidthattheyhaveneverbeendeniedtheopportunityto
submitabidorquote.Hesaid,No,weveneverbeendeniedbyacustomer,butifitisaunion
job,wemaynotbeabletobid.Unionissuesaredifficult.
Someintervieweesreportedthattheyhavebeendeniedtheopportunitytosubmitabidor
pricequotetoaprimecontractor.Interviewee#9,theAfricanAmericanfemaleownerofaDBE
certifiedconstructionandhaulingcompany,saidthatshehasbeendeniedtheopportunitytobid
orprovideaquoteforaparticularjob.Shesaid,Wehadacustomerwhowasthreatenedwith
sanctionsiftheyusedus.ItwasbasedonalicensingissuewehadwithCaltranssowewere
deniedaccessandparticipationbyCaltrans.Itwasbasedonalackofcommunicationbecause
Caltranssaidwewerentcurrentwithourlicenseswhenwewere.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reportedthat
theyhaveoccasionallybeendeniedtheopportunitytosubmitabid.Shesaid,Thisisbecausewe
arewomenowned.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthathiscompanyhasbeendeniedtheopportunitytosubmitabidorpricequotetoaprime
severaltimes.Hesaid,Wehavehadinstanceswherewewouldntdropourpricetobeat
someoneelsessowewerentallowedtosubmitabid.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,saidthathis
companyhasbeendeniedtheopportunitytosubmitabidorpricequotetoaprimecontractor.
Hesaid,TheywereafraiditwouldlooklikeasthoughmycompanywasanMBEfront
company.
Oneintervieweeindicatedthathehadbeendeniedanopportunitytosubmitabidtoaprime
becausehisfirmwaswhitemaleowned.Interviewee#30,thewhitemalepresidentofacertified
micrograding,concrete,andpavingbusiness,indicatedthathiscompanyhadbeendeniedan
opportunitytosubmitabidwhentheprimecontractorneededawomanowned,orother
category,company.Hesaid,Theyneededsomuchwomanownedorothercategoryandthey
wantedtodotheother80percent.Heindicatedthatthishappenedoften.Hesaid,Theyhadto
filltheirquota.
TheNativeAmericanownerofanengineeringrelatedcompanyindicatedthathisfirmhas
encounteredteamingchallenges.Unlessyouredoing$2.5millionormore,they[primes]dont
wanttotalktoyoutheydontwantyouontheteam.Headded,Soitgoestosizeoffirmagain
youreahobbybusinessifyoure$2millionorless.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE26

IntervieweeSM#1,aHispaniccontractorrepresentativeofHispanicContractorsandSuppliers
Association,saidthatKiewitCorporation,alargegeneralcontractor,hasitsownelectrical
company,Mass.Electric,thatitwilluseastheelectricalsubcontractor.Theydontfarmanyofit
outIvetried.
Someintervieweesreportedthatthesameprimecontractorsdonotsolicitthemforworkin
boththepublicandprivatesectors.Interviewee#21,thewhitemaleownerofaDVBEcertified
highwayconstructioncompany,stated,Therearedefinitelyfirmsthatonlyuseusonpublic
worksprojects.TheyuseusbecauseoftheDVBEcertification.Theyneedusasmuchasweneed
them.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Wehavenothadasituationwhereapublicsectorprojectprimehasaskedus
toworkwiththemonaprivatesectorproject.
SubcontractorExperiencesWorkingwithPrimeContractors.
Manyintervieweesreportedthattherearecertainprimecontractorsthattheyprefertowork
withduetoestablishedrelationshipsorforotherreasons.Thereareprimecontractorsthat
intervieweesreportedtryingtoavoid.Interviewee#5,theSubcontinentAsianAmericanowner
ofanoncertifiedconcretepavingcompany,stated,Therearealwayspeopleyoudonotwantto
dobusinesswithforavarietyofreasonsusuallyhastodowithsloworlatepayments,ortheir
overalljobmanagementstyle.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthattheyhavepreferredprimevendorsthat
theyoftenworkwithbasedonpreviousworkexperience.Shestated,Thereareprimeswewill
notworkwithbasedonbadexperienceandwordofmouth.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatthereareprimesthatshepreferstoworkwithorhasestablisheda
relationshipwith.Shesaid,Yes,theoneswhopayquicklyandontime.Wehavegoodoneon
onerelationshipswithmanyofourlongstandingcustomers.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatsome[primes]dopoorworkandIwontworkwiththem.Idont
wantmynameattachedtoshoddywork.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthattheyhaveprimestheyprefertoworkwith.Shesaid,Wehavelongstanding
relationshipswithalotofcustomerswhoweworkwithallthetime.Theyknowtheserviceswe
provideandtrustustogetthejobdone.Shewentontosay,Therearesomecustomerswho
dontpayquicklysowewontworkwiththembutgenerallywewillworkwithanyonewho
needsourservicesaslongastheypayusinatimelyfashion.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE27

Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said
thathehaspreferredprimesheworkswithandothersthathewillnotworkwith.Headded,
OvertheyearsIhavefoundotherprofessionalsthatIwanttoworkwithbecausetheydo
businesslikeIdo,othersIwontworkwithunderanyconditions.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,
Thereareprimesweprefertoworkwithbasedonoursolidrelationships.Shealsoindicated,
Duetobidshoppingandoverallcompetitionthereareprimeswejustwontdobusinesswith.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,Wehavearelationshipwithagroupofprimesthatwe
usuallyworkwith.Thecompaniesdobusinesslikewedobusinessandthatswhywestickwith
them.Hestated,Wehaveenoughsolidrelationshipsthatwedontneedtoworkwith
companieswedontlike.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Thereareprimeswealwayswanttoworkwithweknoweachothersstyles
andthechemistryisgood.[Thisintervieweedidsaytherewerenoprimesthecompanywould
neverworkwith.]
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Forthereasonsthatyoudimagine,weliketo
workwithprimesweknowandthatknowus.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatthereareprimesthathiscompanypreferstoworkwith.Hesaid,Yes,therearesome
companiesweworkwithallthetime.Itcanbeduetotheirpeople,howquicklytheypay,or
basedontheamountofworktheygiveus.Itdepends.Hesaid,Ifsomeonedoesntpayquickly,
wewontworkwiththem.Wecantaffordtodobusinesswithanyonewhentheyexpectustobe
thebank.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatthereareprimesthathiscompanypreferstoworkwithorhas
establishedarelationshipwith.Hesaid,Therearesomewehaveworkedwithoverandover
andhavegoodrapportwith.Wenaturallyworkwiththem.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
mentionedthatthereareprimesthattheyprefertoworkwithbasedontheirpaypolicies.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
thereareprimeshepreferstoworkwith.Hesaid,Theoneswhopayandwhocangetussteady
workweliketoworkwithagainandagain.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,said,
Wealwaysprefertoworkwithcontractorswhopayusinatimelymanner.Shesaid,Thereare
otherprimeswhowontpayquicklyorwanttopayininstallments.WhyshouldIgetpaidin
installmentswhenIvedoneallthework?Itisntfairtoasmallbusiness.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE28

Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,statedthatthereareprimecontractorsthathiscompanypreferstowork.
Hesaid,Theyhaveyourback,treatyoufairly,andpaytimely.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,reportedthat
thereareprimecontractorsthathiscompanypreferstoworkwithbecausetheyhave
experiencedagoodworkingrelationship.
Interviewee#30,thewhitefemalevicepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,saidthereareprimecontractorstheyprefertoworkwithbecausetheypay
promptlyorpaywithinafeasibletime.Thewhitemalepresidentofthiscompanysaidthatthere
areprimecontractorshiscompanywouldnotworkwithbecausetheydonotpaywithina
reasonabletimeperiod.Hesaid,Everybodyrightnowwantstoholdontotheirmoneyuntilthe
lastminute.TherearealotofthemIknowthatgetpaidandtheylljustholditandholdittoget
thelastbitofinterestoffit.Theyjustdontcare.Hecontinued,Icanmakesomework,butnotif
Imnotgoingtogetpaidfor90youknow100days.Bythenallmypaymentstomy
creditorsyouknowtheprofitsarecutinhalf.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,indicatedthattherearecertainprimeshepreferstoworkwith.Hesaid,
Familiarisnice.Knowingthatyouregoingtogetpaidisnice.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,saidthere
aresomeprimesthathiscompanywillnotworkwith.Hesaid,Somewontpayyou.Somelist
youintheirbid,andthenshoparoundforaweekbeforetheyturnintheirnumbers.Theyshould
notbeallowedtoshopafterbidopening.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Ivehadtochasepeopleformoneya
coupleoftimes.Illneverworkforthosepeopleagain.
However,someintervieweessaidthattherewerenoprimesthattheywouldneverworkwith
(forexample,Interviewees#15,20,26,27and28).
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,saidthereareno
primesthattheirmemberswontworkwith[eveniftheywouldprefernotto].Hesaid,We
donthavethatluxury.[Specificcompany]isoneofthemostracist,butbecausetheyhavesucha
largecompany,theygetawaywithwhatevertheycan.Wedonthavetheluxurytosaywewont
workwiththembecausetheyregoingtotreatusbad.
Otherintervieweesreportedthattherearenoprimeswithwhomtheywouldprefertowork.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthatthere
arenoprimecontractorswithwhichhewouldprefertoworkwithorwithwhichhewouldnot
work.Hesaid,Iftheopportunityisgood,Illworkwithanyone.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE29

Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said
thattherearenoprimesthathercompanypreferstoworkwithorhasestablishedarelationship
with.
MostoftheintervieweeswhohadworkedwithMBE/WBE/DBEprimecontractorsreported
havingapositiveexperience.Interviewee#20,thewhitemaleownerofamajorityowned
demolitionandloadingcompanystated,OurexperiencewithDBE/MBE/WBEprimeshasbeen
good.IwouldntsayitwasntanybetterorworsethanworkingwithnonDBE/MBE/WBE
primesthough.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saidabouthiscompanysexperienceworkingwithDBE/MBE/WBEprimecontractorsthat
DBEsaresmallerandpayfaster.NonDBEsfindexcusestodelaypayment.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,saiditisdifferent
workingforaWBE/MBEprime.Hesaid,Yes.Thedifferenceisthatyouactuallyfeellikeyoure
wanted.Youfeellikethisisgoingtobeagoodjobandwecanleavethatjobeverydaywithout
tension.Itallhastodowiththeleadership.Whenyouhaveabunchofrednecksstandingaround
talkingabouttheirfamilies,youdontknowhowtocommunicatewithpeoplethatarentinyour
community.Youhavenoideawhatthesepeoplearegoingthrough.Largerprimeshavenoidea
whatitsliketobeonourposition;theydontevenknowanyoneinourcommunity.[Thelarger
primes]donthavetimeforyou.
SomeintervieweesreportedhavinganegativeexperienceworkingwithanMBE/WBE/DBE
primecontractor.Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said
thatthepoorworkmanshipandinabilitytospeakEnglishcauseshimtobelievethatmanyMBEs
arenotqualifiedanddonotholdproperlicenses.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidhiscompanysexperienceworkingwithDBE/MBE/WBEprimeswasthatsome
WBEssubcontractout100percentoftheworkandmakeahugeprofit.Hesaid,Idoalotof
workforawomanownedbusiness.Shecontractswithmetodoherwork,anditsamazing;she
doesgood.Shedoesgood!Illbidajobfor50grandandshegets100todoit.Gosh,Idmake8
percentifIdidit.Hecontinued,Thewomanowned,andallofthem,itsmoreliketheyjustget
thejobandsubitout.Mostofthemdontevendoanyoftheworkatall.Theyreverygoodat
biddingthejobandgettingthejob.Liketheyhavemebidittothem,doubleit,andIdoit.Its
crazy.Theonesthataregoodatitaremakingverygoodmoneywithnooutput,nooverhead,and
norisk.
ContractorReportedUtilizationofDBEandNonDBESubcontractorsinthePublic
andPrivateSectors.
Manyprimecontractorsreportedthattheyutilizesubcontractorsandtendtousefirmsthat
theyknowandtrust.Althoughsomeprimecontractorsreportedthattheyneveruse
subcontractors,manyofthoseintervieweddousesubcontractors.Manyindicatedthattheytend
tousesubcontractorsthattheyknowandtrust.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE30

Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
statedthathissolicitationsforbidsaremostlyrelationshipbased.Headdedthatthereisno
differencebetweenDBE/MBE/WBEversusnonDBE/MBE/WBEsashedetermineswhohewill
workwithlargelybasedonpastrelationshipsandexperience.Hesaid,Itdoesntmatterifthey
areDBE/MBE/WBEornot,weaskforbidsandhavethemprovideestimates.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthat,weselectsubcontractors
basedonpastworkexperiences.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthereare
somesubsheusesallthetime.Hesaidhehasestablishedrelationshipswithsomeconcrete
pumpcompanies,demolitioncompanies,andothers.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedthatasinfrequentlyasweusesubcontractors,wedotrytousethesameones
whenwecan.Weknowthattheydoagoodjobandknowwhattoexpectofthem.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said
thatheusesthesamesubcontractorsoverandover.Hementioned,Iusecolleaguesand
professionalsthatIhavetrustwith,peoplethatIhavegoodworkingrelationships.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthattheyselectsubcontractorsbasedonpastexperience.Shesaid,Weusethe
sameguysagainandagainwhenweneedthem.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthathiscompanyselectssubcontractorsbasedonpastrelationshipsandnetworking.He
said,Ifweneedacertaintypeoftruckthatwedonthave,wehavealistofsubsthatwecallon.
Hewentontosaythattherearesubsthathiscompanywillnotworkwith.Hesaid,Ifthequality
oftheirworkisntgoodortheydontdeliverwhentheysaytheywill,wewontusethem.He
saidthathiscompanysexperienceworkingwithDBE/MBE/WBEsubsisnotsignificantly
differentcomparedwithnonDBE/MBE/WBEs.Hesaid,Iftheydogoodwork,wewilluse
them.Healsoreportedthathisprocessisthesameforprivatesectorjobscomparedwithpublic
sectorprojects.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
herfirmdoeshaveestablishedrelationshipswithmanysubsandwillusethemallthetime.She
said,Wehavesubsweknowwilldogoodworksoweusethemallthetime.Shealsoreported
thatthisprocessisthesameforprivatesectorjobscomparedtopublicsectorwork.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,
indicatedthathercompanyhasestablishedrelationshipswithsubcontractorstheytrytouseall
thetime.Shesaidthatsaidthatsubcontractorsareselectedbyhercompanyforprivateand
publicsectorjobsinthesamemanner.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE31

Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,said,Weselectsubcontractorsbasedonourpriorhistorywiththem.He
wentontosay,Therearesomesubswewontworkwith.Headded,Therearesomeminority
subswewontworkwithbecauseofpoorworkperformance.
Interviewee#30,thewhitefemalevicepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,saidtherearesubcontractorsthattheyhaveestablishedrelationshipswithand
trytouseallthetime.Thewhitemalepresidentofthisbusinessreportednodifferencein
workingwithDBE/MBE/WBEsandnonDBE/MBE/WBEs.Hesaid,Itsaboutthesame,you
know,theyrejustpeople.
Someintervieweesreportedthattherearenosubcontractorstheywouldnotuse.Interviewee
#3,thewhitemaleownerofaconcreteandconstructioncompany,saidtherearenosubsthathe
willnotworkwith.Hesaid,Iwouldntruleanyoneout,iftheyarequalified,Iwouldusethem
butwetypicallydoeverythingourselves.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthattherearenosubsthattheywillnotworkwith.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthathis
companywouldworkwithanysubcontractors.
Oneintervieweereportedthathelookstodifferentsubcontractorsonpublicversusprivate
sectorprojects.Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,
andpavingbusiness,saidthattheprocess[ofhiringsubcontractors]differsbetweenprivateand
publicsectorjobs.Hesaid,Youcangetthenumbersdown[intheprivatesector]becauseof[the
absenceof]prevailingwage,anditsmorecompetitive.Forprevailingwage,thewagemarketis
double.Headded,Onprivate[jobs]youcangetaguytocomeinandjustbidsomething.Hell
justdoithimselfanddoesnthavetodothepaperworkandshowtheprevailingwageevenon
himself.Itsalotlessheadache.Thingsgetjustdonebetweenhimandmewithnopapertrail.
SomeprimecontractorsreportthatDBE/MBE/SBE/DVBEgoalsaffecttheiruseof
subcontractorsforpublicsectorcontractswithgoals.Interviewee#2,thewhiteprincipalofan
energycompany,statedthewholebidprocessdiffersfromthepublicandprivatesectorandthat
hisfirmpreferstousecontractorsbasedoncomfortandpreviousexperience.HestatedWe
dohaveanetworkofDBE/MBE/WBEcontactstoincludeinpublicsectorbid/procurements,if
necessary.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthathe
frequentlysolicitsDBE/MBE/WBEsthroughtheCaltranswebsite.Headdedthatthereareno
subcontractorsthatheusesforpublicsectorprojectsthathewouldalsouseforprivatesector
projects.Heexplained,Mostpeoplethatareinpublicworksaregeareduptopayahigherrate
ofpay.Theiremployeesareusuallyunionandtheyaresetuptopayaprevailingwagethatthe
privatesectormarketcantbear.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE32

Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,statedthatthereisadifferencebetweenprojectswithgoalsandones
without.Hesaid,Projectswithgoalsencouragethesolicitationofminorities.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,
identifieddifferencesinselectingsubcontractorsintheprivatesectorversusthepublicsector
jobs.Hesaid,Intheprivatesector,itsmoreofaclosedloop.Inthepublicarena,becauseofthe
goalsthattheyhavetomeet,theyincludealotmorecontractorsthatwouldnotordinarilybe
includedintheprocess.
Interviewee#30,thewhitefemalepresidentofacertifiedmajoritymicrograding,concrete,and
pavingbusiness,saidthatifthereweregoals,thecompanywouldtryhardertohire
DBE/MBE/WBEs.
Someintervieweessaidthat,forprojectswithoutgoals,theydonottypicallymakeeffortsto
solicitbidsfromDBEs.IntervieweePH#27,arepresentativeofanengineeringmanagementand
environmentalcompany,said,WhetherornotDBEprimecontractorsfailtosolicitbids,the
simpleansweriswereallverybusy.Ifwedonthavetodoit,thenwedonthavetodoit,andI
thinktheanswerismostlikelythatoutreachisnotbeingdoneunlesstherearegoals.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
statedthatherarelysolicitsDBE/MBE/WBEsubsforbidsbecausetheyarenotrequiredin
privatesectorbids.
Interviewee#2,thewhiteprincipalofanenergycompany,statedheinfrequentlysolicits
DBE/MBE/WBEbidsasthecontractrequirementsforthejobstheypursueoftendontrequireit.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathehas
notsolicitedDBE/MBE/WBEsubsforworkbecausehewouldntknowwheretofindthem.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,WedontneedDBE/MBE/WBEsubsforthetypeofworkwedo.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said
thathedoesnotsolicitDBE/MBE/WBEforbids.Hisworkdoesnotrequirethathehavethese
typeofresourcesincludedinhiswork.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthattheydonotusuallysolicitDBE/MBE/WBEsubsforbids/quotes.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
theydonotsolicitDBE/MBE/WBEsubsforbids/quotes.Shesaid,Ididntevenknowthese
programsexistedsoIwouldntknowtospecificallyseekthemout.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,saidhedoesnotintentionallysolicitDBE/MBE/WBEbids.HesaidImsureI
haveusedpeopleinthatcategorybutIwasntspecificallytargetingthem.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE33

Interviewee#38,thewhitemalepartnerofacertifiedwomanownedenvironmentalconsulting
firm,reportedthathiscompanyrarelysolicitsDBE/MBE/WBEsubconsultantsforbidsor
quotes.Hesaid,Icanthinkofacaseortwowhereitmatteredintermsofthecontractg oals.
However,Interviewee#26,thewhitefemalepresidentofaWBEcertifiedconstruction
company,statedthatthereisnodifferenceinsolicitingcontractorsforDBE/MBE/WBEgoal
projectsversusnongoalprojects.
Someintervieweesreportedutilizationofminorityownedandfemaleownedsubcontracting
firmsinboththeprivateandpublicsector.Interviewee#6,theAfricanAmericandiversity
marketingmanagerofanMBE/SBE/DBEcertifiedenvironmentalconsultingcompany,stated,
WeoccasionallysolicitDBE/MBE/WBEsubcontractorsforbidsorquotesandwillusethe
previousrelationshipsaswellaspublicliststofindthesesubcontractors.Shealsostatedthat
thesesubcontractorsareusedforpublicsectorandprivatesectoropportunitiesalike.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthattheydosolicitDBE/MBE/WBEsubsforbidsand
quotes.Headded,WefrequentlyreachouttoDBE/MBE/WBEsubsforourprojects.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany;
statedthathisfirmdoesuseDBEsubcontractors.Hesaid,WegravitatetootherDBEs.We
solicitthemfrequently.Wesolicitfirmsthroughreferralsorwesolicitformeremployees.
Oneintervieweereporteddifficultyfindingcertifiedsubcontractorstohire.IntervieweePH#5
saidabouttheCaltranscivilrightsdatabase,Itsoutdated,itsnotuserfriendly,itsnotkept
current.Thereisnocertificationexpirationdatepostedforthefirmswedofind.That,Ithink,is
aproblembecauseitslefttotheprimetoverifytheyrecurrentlycertifiedatthetimeofbid.I
thinkitisoneofthethingsthatshouldbeonthedatabase.Iwouldliketoknowhowoftenthe
databaseismaintained,bywhom,andhowoften,becausethereisalotofinformationthatis
outdated.Everytimewedoasearch,thereisfirmsthatphonenumbersaredisconnected,e
mailsnotvalid,letterscomeback.Itishardforustofindfirmscontinuallythatareactuallyvalid.
Wespendalotoftime,wastedtime,onthefirmsthatwegetnoresponsefrom.Ithinkitcouldbe
betterspentonfirmsactuallyvalidinthedatabasewecanoutreachto.
Someintervieweesreportedpositiveexperiencesworkingwithminorityownedandfemale
ownedsubcontractingfirms.Interviewee#26,thefemalemajoritypresidentofaWBEcertified
constructioncompany,stated,Wevehadgoodexperienceworkingwithminorityandwoman
ownedsubs.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saidabouthisexperienceworkingwithDBEsthatDBEsareverygood,betterthannonDBEs.
Someintervieweesreportedmixedornegativeexperiencesworkingwithorattemptingto
workwithminorityownedorfemaleownedsubcontractingfirms.Interviewee#27,themale
vicepresidentandtreasurerofanoncertifiedwomanownedconstructioncompany,said,
Therearesomegoodwomanownedcompanies.Someminoritycompanieshavepoorquality.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE34

Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,stated,Usually
minorityownedsubsaremoreexpensiveandmyexperienceistheyrenotasqualifiedtodothe
work.HeindicatedthathisexperiencewithWBEswasthesameasworkingwithMBEs.
C.DoingBusinesswiththeCaliforniaDepartmentofTransportation
GeneralPerceptions.
SomeintervieweesreportedapositiveoverallexperienceperformingworkforCaltrans.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthathercompanyhasdoneworkwith
Caltransinthepast.Shestated,Ourexperienceshavebeengoodandtheworkdonewith
Caltransisthesameservicesweperformforotherclients.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
mentionedthatoverallworkingwithCaltransiseasierthanotherpublicworksgroups.He
stated,ItiseasiertoworkwithCaltrans.Theirplansaremorestraightforward.Theyareeasier
tounderstandandtheyaregenerallystandarddesigns.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,said,Caltransis
greattoworkwith.Theyreextremelyfairandsatisfactoryhasbeenmyexperience.
SomeintervieweesreportednegativeoverallexperiencesperformingworkforCaltrans.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatCaltransisverydifficulttoworkwith.Shesaid,Caltransisadversarialand
treatsuswithsuspicion.WhydoIhavetoconstantlydefendthatIamnotafront?Sheadded
thatCaltransissupposedtohelpleveltheplayingfieldforcompanieslikeminebuttheyare
reallyjustanotherbarriertoremainingprofitable.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthatshe
believesthatCaltransissoheavilyengineeringorientedthattheircultureisengineerdriven.She
reportedthatitisdifficulttogetthroughCaltransculturalbiasagainstwomenandminorities.
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,inexplainingwhyitwasmoredifficulttoworkwithCaltrans,said,
Caltranshadmoreinspectorsanditwasmorestressful.
IntervieweePH#17,thefemaleownerofaDBEcertifiedmaterialssupplierfirm,said,Istand
beforeyouthiseveningonthevergeof goingoutofbusiness.Thisisntbecauseofany
contractor,itsnotbecauseIdontknowwhatImdoing, anditisntbecauseoftheeconomy.I
cansaywith 100percentcertaintythatitisbecauseofCaltrans.If Isoundhostile,itisbecauseI
am. Ihavebeeninvolvedintwototallyseparate situationswithCaltransandhavebeentreated
withsuch disdainthatIwonderwhyIcontinueinthisprogram. Andtheansweris:BecauseI
haveto.IfIquit,Iwill havetosellmyhouseandgoonwelfare.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE35

IntervieweeWT#11,arepresentativeofasmallfirm,said,Irunaverysmallbusinessandwe
havehadnothingbutproblemswithCaltransprojects.SomuchsothatIrarelysayyestoprimes
whowantusontheirteams.So,needlesstosay,Iwouldnotrecommendanyonegoingafter
Caltransprojects.
IntervieweeWT#16,arepresentativeofaminorityownedconstructionfirm,said,Itallstarted
yearsprior[mycompany]wouldbidandwinawardsforthefieldofficeandtheexperiencewas
notgood.Fromtheofficemanagertothefieldinspector,[they]allwereverydifficultwithmy
companyandpickedonusduringtheentireprocessofperformingtheproject.MosttimesIdid
experienceverbalabusealongwithrightcheatingfromthisparticularoffice.SometimeIhadto
settleforlesspaymentthanmycompanyhadactuallyperformed.Thesubtitleswerenot
acceptedonthebasisofthespecificationsbutrathereitheracceptedorrejectedontheir
personalpreference.Whilehavingmycompanyperforminaveryunfriendlymannertheother
contractorswereallowedtoflourishandwaysweremadeeasyfortheacceptedorwhatthey
viewaselite.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidthatrelativetootherpublicsectorwork,Caltranswasmoredifficultbecausethere
weretoomanyinspectors,noonemakesdecisions,andthespecificationsandtolerancesaretoo
tight.Hesaid,Caltranshasspecs.Ourindustryiseverchanging.Imeanyearlyitchangesbigand
theyholdyoutospecsfromthe70s.Youknow,IcangivethemalotbetterproducttodaythanI
couldhavethen,buttheyreholdingthemtothosespecs.
ThewhitemaleownerofanSBEcertifiedengineeringcompanyreportedthathehassubmitted
withCaltransmultipletimes.Theindividualsofthefirmhaveexperience,butthefirmitselfdid
nothaveexperience,andthatwaspointsagainstthem.HeexplainedthatwithA/E,licensesgo
withtheindividual,notthefirm.Whyisthat[experienceofthefirm]evenbeingconsidered?It
shouldgowiththeindividualsinvolved.
IntervieweeSM#8,thewhitemaleownerofanengineeringfirm,saidthathehasspentseven
yearstryingtobreakintopublicagencywork,withoutsuccess.Idoalltheworkanybodyelse
does,butitshardtobreakinbecauseIdonttalkthesamelingoordonthavethesame
contacts.Headded,Someonecomingfromthepublicsectorintotheprivate[sector],theyseem
tohavebetteraccessback.IntervieweeSM#23,arepresentativeoftheNationalSocietyof
HispanicProfessionalEngineers,agreed.IfIstepoutofaCaltransorcountyorMetro
environmentafterfivetotenyearsofexperienceandstartupabusiness,amIgoingtobe
disadvantaged?Intodaysworld,inthelast30years?No,Imgoingtohaveanadvantage.Now
whatdoesthatdototheotherpopulations?
IntervieweeSM#21,thewhitemaleownerofanengineeringcompany,reportedthat,goinginto
Caltranstocompeteforwork,hewillbegoingupagainstanothercompanyownedbyaformer
Caltransemployee.Theyregoingtofeelmorecomfortableabouthiringthatpersonbecause
theyveactuallyseentheirworkandknowthem.
IntervieweeSM#8,thewhitemaleownerofanengineeringfirm,saidthatpublicagenciesdonot
understandtheregulationsconcerningpaymentsinFAR,whichhesawasunfairtosmall
businesses.Hewouldliketobeabletoworkonfixedpricecontractsratherthanrateswith
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE36

approvedoverheadunderFAR.Hereportedthatmanyprofessionalservicesfirmsdonothave
therecordstobeabletojustifyoverheadratestoanagencysuchasCaltrans.
SomeintervieweesreportedlimitedtonoexperienceworkingwithCaltransduetochallenges
insecuringworkwithCaltrans.Whenaskedifthereareprimecontractingopportunitiesforhim
atCaltrans,IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedbusiness,
indicatedthattherewere,butthathethoughtthebestapproachwastostartCalmentor,then
comegoinsubconsultant,[getexperience]andthengouptoprime.
SomeintervieweesreportedhavinglimitedtonoexperiencepursuingworkwithCaltrans.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidhehasnotspecificallyworkedwithCaltransbutotherpublicsectorworkhasnotbeena
goodexperience.Hestatedthatthebiddingprocesswashorrible.Bidsandproposalstookalot
oftimeandexpense.Poormarginsledtolosingmoneyonnearlyeverypublicsectorjob.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathehas
noexperienceinworkingwithorattemptingtoworkwithCaltransbutthathewouldbevery
interestedinlearningaboutopportunitiestoworkwiththeminthefuture.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
mentionedthathiscompanyhasdonenodirectworkwithCaltransandthatCaltransisntinthe
samehemispherewithregardstopricing.Hefurthermentionedthat,inhisopinion,current
bidsaregoingforwellundermarketvalue.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,indicatedthathercompanyhasnoexperiencewithorattemptingtowork
withCaltrans.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said,
IdontworkwithCaltrans,theydoalltheirdesignworkinhouse.Itmakesmesicktomy
stomachthinkingaboutCaltransdoingalltheworkinhouse.Caltranswouldgetbetterqualityif
theywouldallowjobstooutsidevendors.
AccordingtoIntervieweeSM#2,anAsianPacificAmericanownerofanengineeringbusiness
andarepresentativeoftheAmericanCouncilofEngineeringCompaniesCalifornia,90percentof
A/EworkatCaltransiskeptinhouseand10percentcontractedout.Imaginehowmuchmore
workwouldbecontractedoutifyouwentto20percentinsteadofjust10percent.Manyyears
ago,thatwasactuallyhappening,butallofasuddenitwentto9010.Anincrementalincreaseof
5,10percentwouldstimulatetheeconomyforallofus.HesaidthathehastalkedwithCaltrans
leadershipaboutthisissue.
IntervieweeSM#2alsosuggestedthatCaltransunbundlemoreofhistypeofengineeringwork.
Hereportedthathewouldhavemoreopportunityforworkasaprime(whichhedoesforother
publicagencies)ifCaltranswouldunbundlethatworkfromlargercontracts.IntervieweeSM#3,
theNativeAmericanownerofanengineeringrelatedfirmagreed,sayingthatitwasthesame
thingatCaltranswithhistypeofwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE37

IntervieweeSM#2,theAsianPacificAmericanownerofanengineeringfirm,furtherdiscussed
opportunitiestoworkforCaltransasaprime.Wedoalotoflocalandcityandcountywork.
WevedonealotofCaltranslikework,butnotdirectlyforCaltrans.Theonlytimeweveworked
directlyforCaltransisasasubforlargerfirms.Whenaskediftherewasworkhecouldbedoing
forCaltransasaprime,heresponded,Yes,butyoure[Caltransis]lookingforCaltrans
experience,andwedonthaveCaltransexperienceasaprime.Thatmakesitdifficultforusto
qualifyotherthanasasubconsultant.
TheAsianPacificAmericanfemaleownerofaconstructionservicesbusiness[Interviewee
SM#20]reportedthatshehastalkedwithCaltransaboutprimecontractopportunitiesforthe
typesofworkshedoes.Caltransrespondedthattheyhaveadepartmentthatdoesthattypeof
work.ShereportedthatitmightbeadvantageoustoCaltranstocontractthisworkout.Howdo
wegetthemtochangethewaytheythink?
NotificationofWorkOpportunities.
SomeintervieweesindicatedthatCaltranshasgoodnotificationproceduresinplacetonotify
individualsofopportunitiestobid.Anumberofintervieweessaidthatitwaseasytofindout
aboutCaltransbidopportunities,especiallythroughCaltranswebsiteorotherelectronic
notificationservices.OtherfirmsindicatedthattheylearnedofCaltransworkthroughprimes,
andthatthissystemworkedwellforthem.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Itis
alwaysbeeneasyformetofindoutaboutCaltranswork.IusethewebsiteandCaltransupdates
itregularly.Itworksverygoodforme.
Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertifiedenvironmental
consultingfirm,said,ItwasprettyeasytofindoutaboutCaltransworkopportunities,because
youknowitsCaltransandyoucangototheirwebsite.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,Its
easytofindoutaboutCaltranswork.ImetCaltransofficialsatameetandgreet,andIget
BidSyncnotices.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,[Relativetootherpublicsectorwork]itsaloteasiertofindoutabout
Caltranswork,wegetlotsoffaxesandemailsaboutthedifferentjobs.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatrelativetootherpublicsectorwork,thereisnodifferencefindingoutaboutCaltrans
workopportunities.Hesaid,Everythingisonlinenow.Iwillvisitcompaniesandpartnersto
findoutaboutteamingopportunitiesfordifferent[publicsector]opportunities.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatrelativetootherpublicsectorworkitisaboutthesame
findingoutaboutCaltransworkopportunities.Hesaid,Everythingisonlineandthereisusually
afairbitofnoticebeforewehavetobid.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE38

Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,said,Caltransisrealeasytofindoutaboutanything.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,stated,Itwasnotanyhardertofindoutabout
Caltransworkcomparedtootherpublicsectoragencies.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,stated
thatcomparedtootherpublicagenciesitiseasiertofindoutaboutCaltransworkopportunities.
Shesaid,Caltransiseasier.Alltheirjobsaremadepublic.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Itwaseasierto
findoutaboutCaltransworkduetotheInternetandbecauseIamknownbyCaltrans
personnel.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatitwas
easiertofindoutaboutCaltransworkopportunitiesbecauseCaltransprovidedaweeklylisting
ofprojectsthatwereouttobid.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidthatitwaseasiertolearnaboutworkfromCaltransthanfromotherpublic
agencies.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,Itis
easiertofindoutaboutCaltransworkthanforotherpublicagencies.Everyoneisawareof
availableCaltransjobs.PrimescallandaskforbidsfromMBEs.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
said,ItwaseasytofindoutaboutCaltransworkbecausetheprimecontractorcalledmy
companybasedonareferral.
SomeintervieweesreportedchallengeslearningofopportunitiestobidwithCaltrans.Some
intervieweeswerenotfamiliarwithCaltranswebsiteorthoughtthatitwasstilldifficulttolearn
ofbidopportunities.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,discussedthedifficultyindeterminingwhatbidsareavailable.Hesaid,Iimaginethat
thereisaneasierwaytofindoutaboutCaltranswork,butIdontknowwhatthatisorhowtogo
aboutit.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatitisdifficultfindingoutaboutCaltransworkopportunities.He
said,Thereshouldbeaninteractivewebsitethatprovidessmallbusinessesopportunities.They
shouldmakeitmoreclearwherewecanfitintothebiggerpicture.
IntervieweePH#23,thefemaleownerofaDBE/SBE/LSBE/CBE/MBE/WBEcertifiedresearch
firm,said,Itsstillreallyhardtofindthebids,tolocatethem.Thatsthenumberoneproblem,is
locatingthem.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE39

Evenwithbidopportunitiesonthewebsite,someintervieweesreporteddifficulty
understandinghowtopursueCaltranswork.Interviewee#23,theHispanicmaleownerofa
noncertifiedconstructioncompany,saidthatrelativetootherpublicsectorwork,itwasharder
tofindoutaboutCaltransworkopportunities.Hesaid,Itismuchhardereventhoughtheyhave
awebsitewiththejobslistedonthem.Youhavetonetworkorknowsomeonetogetthisworkit
seems.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
relativetootherpublicsectorwork,itishardertofindoutaboutCaltransworkopportunities.
Hesaid,NotknowinghowtogoafterthejobsforCaltransistherealissue.Theyareusuallybig
projectsthatareoutofourrealm.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatrelativetootherpublicsectorwork,itwashardertofindoutaboutCaltrans
workopportunities.Shesaid,Theirspecificationsaretoocomplex,taketoomuchtimeto
decipher,andoftendontmakesense.Shealsosaid,Whothinksupthisstuff?Itdoesntmake
anysense.Itisclearthatunqualifiedpeoplearedevelopingthesespecifications.Theyneedto
useexpertsinthefieldtohelpdevelopcommonsensespecifications.
SomeintervieweesrecommendedthatCaltransimproveitsnotificationofworkopportunities.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthebidandnotificationprocessescouldbe
improved.Shestated,TheBidSyncsystemcouldbemoreintuitiveandalertsshouldbebuilt
intothesystem.Thiswouldsavesmallbusinessestimeasnowwearerequiredtosearch
constantly,asopposedtohavingopportunitiespushedouttous.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,
Caltranscouldactuallynotifytheregisteredbiddersofopportunities,sothatIwouldntalways
havetocheckfornewopportunities.
Interviewee#18,theAfricanAmericanmaleownerofaDBEcertifiedelectronicsand
telecommunicationscompany,saidthathisrecommendationstoCaltranswouldbetomake
opportunitiesforDBEslikehismoretransparent.Hesaid,Theyshouldmakethebidseasierto
findormakeiteasierformetofigureouthowtoteamupwithbiggercompanieswhoare
bidding.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
recommendationsforCaltranstoimproveitsnotificationandbidprocesswouldbetohelpsmall
businesses.Hesaid,Weneedhelpinidentifyingworkthatwecanactuallybidon.Wouldbeing
certifiedhelpinthatregard?
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
recommendationsforCaltranstoimproveitsnotificationandbidprocessistomakeitmore
transparent.Hesaid,Justmakethebidprocessmoretransparentandmakeitclearhow
companieslikeminecanactuallycompete.Rightnow,thereisnoopportunityformetowork
withCaltransunlessItakewhatsomebigcompanyiswillingtogiveme.Thesystemissetup
againstme.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE40

Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,
recommendedthatCaltransshouldmakeiteasierforexistingcontractorstobidonemergency
work.SheaddedthatCaltransshouldfindouthowtogetbidopportunitiesoutfaster.Caltrans
alwaysusesBidSyncandthey[BidSync]dontprovideenoughtimetobid.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,recommendedthatCaltransstartdoingtheirownstuffinsteadoffarmingit
outtoBidSyncandalltheseotheroutfits.IfIcouldjustgotoasitethatjusthasCaltransprojects
andcouldnarrowitdownandsimplifyit.Ithinkitslousy.Theysubitouttoadifferentoutfit
andyougottopay$500ayearjusttoviewtheupcomingschedule.Ihaventeventriedtogetthe
plansfromthem.
BiddingProcess.
SomeintervieweesreportedpositiveexperienceswithCaltransbiddingprocess.Interviewee
#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,stated,Thebid
processforCaltransisgood.Idonthaveanyrecommendationsforthem.Healsoreportedthat
Caltransbidprocesswaseasierthanatotherpublicagencies.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,mentionedtheCaltransbidprocessiseasierrelativetootherpublicsectorwork,the
requirementsareless.Shealsostated,Thepaperworkismuchless.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatthe
Caltransbidprocesswaseasierthanotherpublicagenciesbecauseitwaswellstructuredand
therewasnoguessworkinvolved.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,
BiddingonCaltransjobsiseasierthanforotherpublicagenciesbecausetherearelessbiditems
tobidonandtheprocessisstraightforward.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,stated,Thebidprocesswasnodifferentthanany
otherpublicsectorproject.Wewererequiredtoprovidethenecessarypaperworktotheprime
vendorcoordinatingthebid.
SomeintervieweesreportedchallengesinconnectionwithCaltransbiddingprocess.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidthatthebiddingprocesswashorrible.Bidsandproposalstookalotoftimeandexpense.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
describedhispastexperienceswithCaltransasbadbecausethebiddingprocessiscumbersome
andthepricingisdifficult.HestatedthathehaspursuedtrafficsurveyprojectswithCaltransbut
beenlargelyunsuccessfulasaprimebidder.Healsostatedthatrelatedtootherpublicsector
work,theCaltransbidprocesswasharder.[Itis]infinitelymoredifficult.Thebidprocessisthe
barrier.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE41

Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertifiedenvironmental
consultingfirm,saidthattheCaltransbidprocesswasextremelydifficult.Inexplanation,she
said,Caltranshasitspoolofpeopleitlikestoworkwithandifyourenotinthatpoolforget
it.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,mentionedthat
thebiddingprocesswithCaltranswasabarriertoBCAmembersprimingprojects.Whenaskedif
theseissueswereuniquetoCaltrans,hesaid,Ithinkitsalotoftheagenciesbutitsmore
Caltrans.ThepoliciesthatCaltranshasputforward,liketheraceneutralandracespecificare
goodprogramsifeveryjobhadthosegoals.Everyjobcould,butCaltransallowseachcontractto
saytheyhaveperformedduediligence(goodfaithefforts)tofinddisadvantagedbusinesses.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
relativetootherpublicsectorwork,Caltransbidprocessisaboutthesameasothers.Hesaid,
Theyareallthesame.Theysqueezeoutthelittleguyandgivealltheworktobigcompanies.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthathisexperienceattemptingtogetworkwithCaltransisfromhispreviouscompany.He
said,WehaventbidonanyCaltransworksinceIvebeenherebutIknowfrompastexperience
thatthereissomuchpaperworkwithprequalifications,specifications,andotherpaperwork.
Whydoesanyonewanttodobusinessthisway?Itisjusttoocomplicatedandtimeconsuming.
WhencomparingCaltranstootherpublicagencies,hesaid,Theyareallthesamearduous.
Publicsectoringeneralhasalotofprequalificationrequirementsthattakealotoftimeto
respondto.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatrelativetootherpublicsectorwork,thebiddingprocessforCaltranswork
opportunitiesisharder.Shesaid,Theymakeyoujumpthroughsomanyhoopsbyprovidingthe
sameinformationoverandoveragain.Whydowehavetoprovidethesamelicensingand
insuranceinformationoverandoveragain?Shecontinued,Theymakeithardforsmall
businessestocompetebecauseofalltheunnecessaryandrepetitivepaperwork.Sheconcluded,
Mostcitiesandcountiesaremucheasiertoworkwithbecausetheydontrequireasmuch
paperwork.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompanystated,
WehavenotdoneworkwithCaltransandIdontthinkwewillinthefuture.Wearejustnever
giventheopportunity.
Headded,Theyaskforsomuchstuffthatjustdoesntmakesense.Thereisnopointtomostof
it.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmbidonsomeofframpworkseveralyearsago.Hesaid,Webidontheexcavationand
landscapingportion,butthebondingrequirementswereahugebarrierforussowewerent
successful.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE42

Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathe
hasattemptedtoworkwithCaltransbutthathehasnotbeensuccessfulasaprimecontractor.
Hesaid,ItisimpossibletogetworkwithCaltransonmyown.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,Wetried[towinworkwithCaltrans].Wehavenotyetbeen
successful.
IntervieweePH#28,thefemaleownerofaDBE/SBE/UDBE/WMBEcertifiedmarketingfirm,
said,Afterallthecertifications,allthistime,IstilldonthaveaCaltranscontract.Ihavebidwith
thetransportationdepartmentover15timesthisyear,andIhaventreceivedonecontract.It
takestime,andittakesmoneyforSBEstobidoncontractsandhireextrapeopletohelpthem
gettothepointthatwegettoandstillwedontgetacontract.
IntervieweeWT#15,thefemaleCEOofaSBE/SWBE/WBE/DBEcertifiedenvironmentalfirm,
said,WehaveattendednumerouseventsputonbyCaltransalongwithSBA,etc.,totryto
pursueCaltranswork.Wehavenothadanyluck.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringcompany,reported
thatcreatingelectronicformsforallsubmittalstoCaltransshouldbethehighestpriority.
SomeintervieweeshadnegativecommentsaboutthebiddingprocessatCaltransbecause
theybelievedtheywerecompetingagainstlowballbidsfromotherfirms.Interviewee#11,
thewhitefemaleownerofafederallycertifiedwomanownedengineeringbusiness,saidthat
relativetootherpublicsectorwork,Caltransbidprocesswasmuchharderthanothers.Shesaid,
Theytakelowballbidsthatanyonequalifiedknowsarentright.Thereisnowayanyonecando
whatisexpectedforthebidsthatareaccepted.Shesaid,Welostthebidtosomeonewholow
balledtowineventhoughtheydidnthavetherightqualifications.Lowballbidsthatwinlike
thatleadstopoorquality.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthatthereare
opportunitiestobid,butthathehasaproblemwithlowballbidding.
SomeintervieweesrecommendedthatCaltransimproveitsnotificationofworkopportunities,
biddingprocess,andadministrationofcontracts.Interviewee#9,theAfricanAmericanfemale
ownerofaDBEcertifiedconstructionandhaulingcompany,saidthatCaltransbidprocesscould
beimprovedbyprotectingbusinesseslikeherswhoareincompliance.Shesaid,Theyshould
enforcetheirregulationsonillegaloutofstatebusinessesandbusinessesfromMexicowho
donthavetomeetthesamerequirements.Theyundercutusoncostandmakeithardforusto
compete.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthathisrecommendationsforCaltranstoimproveitsbidprocesswouldbetomakeitmore
straightforward.Hesaid,Giveusenoughtimetogetbidscompleteifyouaregoingtoaskfor
thatmuchinformation.Also,providebetterdocumentationandmaketheexisting
documentationmoreuserfriendly.Thereistoomuchstufftowadethroughnow.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE43

Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatherecommendsthatCaltranscanimproveitsprocessesby
removingalotofthepaperworkandbureaucracy.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidhe
observedthatCaltranshadestablishedatrendtowardawardinglargercontracts,andthatthis
trendwaseliminatingabout80percentoftheavailablecontractors.Heexplainedthatthistrend
towardlargercontractsmadeitmorecostlyforthepublic.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,Caltransshouldstreamlineaccesstodrawings.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,
Caltransshouldrequireprimestoturninsubcontractorinformationonbiddayandholdthem
toit.Thiswillpreventbidshopping.HeaddedthatCaltransshouldeliminatethewhole
certifiedpayrollthing.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,recommendedthatCaltransmaketheir
biddingprocessmorepublicsoconsultantscouldeasilyseewhatsoutthere.Healsosaid,IfI
wantedtoseewhatCaltranshadtoofferwellwithwhatIknowfromwhatIveseenworking
for[thelargeconsultingfirm]Iwouldntevenwastemytime,becauseIknowifyoudont
knowsomebodyinthere,yourenotgoingtogetanything.Heelaboratedthathehadobserved
whileworkingasanemployeeforalargeconsultingcompanythatcontractswereawarded
inabackdoor,underthetable,buddybuddymannerinwhichitwasunderstoodthatyouget
allthecontracts.Hesaid,Obviouslyitswhoyouknow.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
said,Caltransshouldlistengineeringoversightasabiditem.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,whenaskedhow
Caltranscanstartalleviatingtheseproblems,said,Iwouldhopethatevenwhenitcametothe
biddingprocess,thatCaltranswouldbemoreforcefulwhenitcametotheparticipation.Caltrans
knowsthemajorityofdisadvantagedbusiness.Theyknowwhotheyare,andtheycanpartner
themandbegintoputthemintoacooperative.ButCaltransisextremelyslow.Theyaresoslow,
itsunbelievable.
IntervieweePH#11,thefemaleownerofacertifiedwebdesignfirm,said,[An]emailoption
couldbeaddedwhenrespondingtoRFPs.Its2012.Youknow,dontmakeusmake,youknow,
100pagecopiesatFedExandsendityou,whereonanaverage,$50,$100,$150,togetitin
thereontime.So,youknow,wecanimplementmoreemailoptionswhereyoucanmakeit
easierforsmallbusinesses.Wejustdonthavethestaff.
IntervieweePH#12said,WhatCaltransandthelargerprimesdontseemtorecognizeis,unlike
largecorporations,wheretheresaspecificestimationstaff,mostofthesmallUDBEs,andDBE,
andSBE,andMBE,andWBEcompaniesdonothavethoseresources.Wecannotaffordtobidon
hugeplansetsandinvestthekindofresourceswithoutsomehelp.So,youknow,its2012.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE44

Wevegottofigureoutsomewaysthatwillallowreallysmallcompaniestoisolateand
specificallyidentifytheirworkcategory,andbidefficientlyandeffectively.Notlargeplansets.
Wevegottobreakitdown.Thistheresgottobesomekindofwayorprogramputinplace
thatwillallowsmallercompaniestobemoreeffectiveatbidding.AndIdontknowhowyoudo
that,butImsuretherearegreatmindsinthisroomandgreatmindsatCaltransthatcandothat,
sothatyoucouldbemoreeffectiveandallowpeopletoworkhere.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathe
recommendsthatCaltransprovidebetteraccesstobiddingopportunitiesforsmallcompanies.
Hesaid,IfCaltranswouldmakeiteasiertoteamupwithbiggercontractors,itwouldbeeasier
toworkwiththem.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatCaltransshouldhavemoreworkshopsandbidconferencesfor
smallbusinesses.Hesaid,Theyshouldprovidebettercommunicationaboutwhatisavailable
[byspecialty]byareaandlocation.
Payments.
SomeintervieweesreportedapositiveorsuccessfulexperiencereceivingpaymentonCaltrans
projects.Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionand
haulingcompany,saidthatgettingpaidonCaltransworkhasnotbeenaparticularproblem.She
said,Weworkwithcustomerswhowehaveexistingrelationshipswithandtheypayuswhen
weprovideourservice,whetheritisonaCaltransprojectornot.
IntervieweeSM#21,thewhitemaleownerofanengineeringfirm,hadfavorablecommentson
beingpromptlypaidbyCaltranswhenheistheprime.Itsjustlikeclockwork.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saiditwasnoproblemgettingpaidbyCaltrans.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,The
primevendorsweworkwithhavetoldmethattheCaltranspaymentprocessisgood.This
meansweusuallygetpaidfairlyquickly.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,ThebestthingaboutCaltransprojectsisthatweareusuallypaidinlessthan30days.
ThisispartlyduetothecontractorsweworkwithandpartlyduetoCaltrans.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,said,Caltrans
paystheirbillsontime,andiftheydont,theypayyouinterest.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Ididnthaveanyproblemsgetting
paid.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE45

SomeintervieweesmentionedthatpaymentonCaltransprojectswasaboutthesameasfor
otherpublicsectorcontracts.Interviewee#6,theAfricanAmericandiversitymarketingmanager
ofanMBE/SBE/DBEcertifiedenvironmentalconsultingcompany,mentionedthatthepayment
fortheCaltransworkwastypicalofpublicsectorprojectsandthathercompanywasnotpaid
untiltheprimevendorwaspaid.Interviewee#27,themalevicepresidentandtreasurerofa
noncertifiedwomanownedconstructioncompany,saidtherewasnodifferenceingettingpaid
betweenCaltransandotherpublicagencies.
SomeintervieweesreportednegativeexperiencesreceivingpaymentonCaltransprojects.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,said,
Caltransdoesntpaytimelytoprimeswhopassthatalongtosubs.Itsalmostliketheyare
tryingtorunyououtofbusinessbynotpayingyou.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidabouthiscompanysexperiencesgettingpaidthatCaltransisprettyslow.He
addedthattheyputinthatyoureasmallbusinessandfasterpaymentforsmallbusiness,you
know,butthatneverhappensever.Weregoingtopaythesmallguyprogresspayments,you
know,thatneverhappensever.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,mentioned,
CaltranshadQuickPay.Itsoundedgood,butitstillreliedontheprimetopaytheirsubsfirst.
Well,theydontdothat,andCaltransdoesntdoanythingaboutit.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Youhavetowait
longerforCaltranstopaythanotherpublicagencies.TheArmyCorpsofEngineerspaidthree
daysafterthejobwascompleted.
IntervieweeSM#17,representingAssociatedProfessionalsandContractorsofCalifornia,
reportedthatlocalagenciesaroundthestaterecommendagainstbiddingonCaltranscontracts.
Theysay,DontbidCaltranscontracts,youwontgetpaid.
SomeintervieweesrecommendedthatCaltransimproveitspaymentprocess.Interviewee
#28,thewhitemalepresidentofacertifiedmajorityDVBE,recommendedthatCaltranspay
contractorswhentheCaltransregisteredengineersignsoffonthejob.HeaddedthatCaltrans
paysabout30daysafterthejobiscomplete,andrecommendedthatCaltranspaywithin15days
afterjobcompletion.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,mentioned,If
subshavenotbeenpaid,thenCaltransneedstorespond,eitherbyholdingbackpay,orby
puttingthosedollarsinthehandsofthesubsinorderforthesubstobeabletocontinuetowork
orprovidemobilityorworkingcapital.Alotofsubcontractorshaveaverylimitedamountof
workingcapital.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE46

RCJ&Associates,Inc.ClaimMadetoCaltrans.
RCJ&Associates,Inc.(RCJ)madetheBBCstudyteamawareofadisputeithadasa
subcontractoronaCaltransprojectthatapparentlywasnotresolvedtothesatisfactionofRCJ.
Thefollowingsummarizesthedispute,initialCaltransactions,andasubsequentcourtdecision
regardingthoseactions.
ItappearsthatRCJ,aDBEcertifiedfirm,onJanuary7,2011,madeaformalrequestto
investigateandauditvariousbidlineitemsofworkforCaltransDoyleDriveProjectNumberN3:
CN04163734(DoyleDrive)tofindouthowtheUDBErequirementswereachievedforthe
specificbidlineitemsatwork.RCJcomplainedthatC.C.Myers,Inc.s(CCM)violatedtheir
SubcontractAgreementbyimproperlyquantifyingthebidlineitemsofworkrelatingtostreet
sweepingfortheDoyleDriveProject.
CCMandRCJenteredintoacontractthatprovidesforCCMtopay$215,000toRCJforstreet
sweepingservicesontheCaltransDoyleDriveproject.RCJperformedstreetsweepingservices,
andonOctober31,2011,RCJfiledwithCaltransastopnoticerequestingthatCaltranswithhold
approximately$173,000fromthefundsduetoCCMthatRCJclaimsremainunpaidbyCCMto
RCJ.
1
Subsequently,CaltranswithheldfundstoCCM.
ThereisadisputeastothebasisofRCJ'sclaim,butitappearsRCJclaimsitsserviceswere
underutilizedinthatRCJwasnotpermittedtoperformworkthatitshouldhavebeenallowedto
performpursuanttothesubcontract.
2
CCMfiledacomplaintincourtcontendingthatsucha
claimisnottheproperbasisforastopnoticeandnofundsshouldbewithheld,anddemanded
thatthewithheldfundsbereleased,butCaltransrefusedtoreleasethefundstoCCM.
AtahearingheldonMarch16,2012,thecourtconsideredthecomplaintbyCCMtoorderthat
thestopnoticebedeclaredasimproperandthatCaltransremovethestopnoticeandissuethe
paymentstoCCM.
3
Thecourtpointedoutthesubcontractprovidesacontractpriceof$215,000
andthattherearereceiptsintherecordtoRCJinexcessofthatamount.TheCourtstatedthatit
isnotaddressingwhetherornottherearereasonswhyCCMmayoweRCJmoremoney,but
fromastopnoticestandpoint,thecourtisnotprovidedinthisproceedingwithawayto
determineabreachofcontractrelativetohowmuchisowed.
4
Thecourtonlyaddressedwhetherthestopnoticewasvalid.
5
ThecourtfoundthatCCMhaspaid
over$260,000toRCJ.
6
Thecourtstatedthatforpurposesofastopnotice,theremustbe
somethingthatthecourtcantracewithinthestopnoticeitselfastolaborandservicesactually
1
ComplaintforDeclarationofRightstoWithheldFunds,filedonFebruary9,2012byPlaintiffCCM.
2
ComplaintbyCCM.
3
TranscriptofProceedings,datedMarch16,2012intheSuperiorCourtoftheStateofCaliforniafortheCountyofSacramento,
CaseNo.34201200118525.
4
Tr nscript,March16,2012. a
5
Id.
6
Id.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE47

performed,notalossofopportunity,ormisrepresentationsastothebiddingprocess.
7
Thecourt
heldthisismoreaclaimforlostopportunity,underutilization.
8
Thecourtnotedthatregardless
ofwhethertheclaimofbreachofcontractmaybemeritorious,itisnotthepropersubjectfora
stopnotice,andonthatbasisthecourtorderedthereleaseorremovalofthestopnotice.
9
The
courtstatedthatitsfindingisnotbindingonanyotheraspectofthecaseandsoallremedies,
rights,duties,andobligationsrelatedtoanyotherissuesinthecasearestillinplay.
10
Thecourtsubsequentlyissuedanorderremovingthestopnotice,andaccordingtoCaltrans,
thereisnofurtheractivityintheirrecordsrelatingtotheclaimfiledbyRCJagainstCCM.
7
Id.
8
Id.
9
Id.
10
TranscriptMarch16,2012.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE48

D.PotentialBarrierstoBusinessSuccess
Theintervieweeswereaskedwhethertheywereawareoforhadexperiencedanybarriersto
pursuingworkinthelocalmarketplace,and,ifso,whethertheybelievedthatdiscrimination
basedonrace,ethnicity,orgenderhadcontributedtosuchabarrier.Theintervieweeswere
thenaskedwhethertheywereawareoforhadexperiencedcertainspecificbarriers,including:
Financing;
Bonding;
Insurance;
Equipment;
Laborandpersonnel;
Workingwithunions;
Beingaunionoranonunionemployer;
Obtaininginventoryorothermaterialsandsupplies;
Prequalificationrequirements;
Experienceandexpertiserequirements;
Licensesandpermits,
Notificationofworkopportunities/marketing;
Contractspecificationsandbiddingprocedures;
Factorspublicagenciesandothersusetomakecontractawards;
Bidshopping;
Bidmanipulation;
Treatmentbyprimecontractororcustomerduringperf ormanceofwork;
Approvalofworkbytheprimecontractororcustomer;
Paymentbytheprimecontractororcustomer;and
Otherbarriers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE49

BarriersinGeneral.
Someintervieweesidentifiedtheexistenceofbarriersingeneralforminoritiesandwomenin
pursuingworkinthelocalmarketplace.Interviewee#5,theSubcontinentAsianAmerican
ownerofanoncertifiedconcretepavingcompany,discussedthathehadnopersonalexperience
withanybarriersordiscriminationbasedonrace,ethnicity,orgenderinthepublicsectorbut
thathehadseenitoccuroccasionallyintheprivatesector.Hesaid,Intheprivatesectorwe
haveseenparticularinstanceswhereracedeterminedwhowonthework,butitisnotprevalent
inourlineofwork.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,saidthat
theresdiscriminationbasedonraceineverything.Sometimesthosebarrierscanbeovercome.
Oncetheguyswithpowerwhicharenormallythewhiteguysoncetheygetusedtoyouits
adifferentthing.But,itsjustgettinginthedoorandgettinganopportunitytoproveyourself.
Oncetheygetusedtoyouitsfine.But,initially,yougetabadrap.
IntervieweeWT#21,arepresentativeofaDBEcertifiedengineeringfirm,said,Iamconvinced
thatracialbarriersanddiscriminationstillexistandminorityfirmsareingeneralunderutilized
inpubliccontracting.AnarrowlytailoredDBEprogramwillhelptomitigatetheeffects.
IntervieweeWT#26,theownerofaDBEcertifiedengineeringandconstructionmanagement
firm,said,Hispanicownedfirmssuchas[myfirm]havefacedmanydifficultiesandhave
experienceddiscriminationbypublicagencypersonnelandlargecivilengineeringcontractors
whenbidding,proposingorseekingasubcontractonpublictransportprojects.Thepublic
agencystaffprefersthelargecontractorsoversmallfirmsandhavetheerroneousbeliefthat
smallminorityownedorDBEfirmslackresources,experiencedpersonnel,orareotherwisenot
qualified.
IntervieweeWT#17,arepresentativeofaDBE/WBE/SBEcertifiedfirm,said,Werecentlywere
solicitedtoprovideaquotationtoaprimecontractorforelectricalconstructionmaterials.Once
wereceivedtherequiredBillofMaterials,weproceededtocontactmajordistributionhousesin
Californiaforthequotation.Wewereinformedbytheseorganizationsthatourcompanywastoo
smallforthemtoquotethislargematerialrequirementandthattheywouldonlyquotedirectly
totheprimecontractor.Asasmallcompanylookingtoexpand,wefoundthisvery
disheartening.Ourcreditreferencesareverystrongandwehaveneverencounteredsucha
blatantattempttoremoveusfromapotentialopportunityasthisactiondid.
Otherintervieweesreportedthattheyweregenerallyunawareofbarrierstopursuingworkin
thelocalmarketplace.Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertified
engineeringcompany,statedheisnotconsciousofbarriersand/ordiscriminationbasedonrace,
ethnicity,orgender.Hewentontostatethathehasnothadanypersonalexperienceswith
discrimination.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatIhavenothadanypersonalexperience
withanybarriersordiscriminationbasedonrace,ethnicityorgender.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE50

Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatshehasexperiencednoissuesordiscriminationbasedonrace,
ethnicity,orgenderthatsheisawareof.Wehaveneverbeendeniedanything.Iveneverrun
intoanyracialissuesatall,shesaid.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatheisnotawareofdiscriminationbasedonrace/ethnicity/genderthathis
firmfacesinthelocalmarketplace.
Somebusinessownerssaidtherewerebarriersforanysmallbusiness.Interviewee#29,the
whitemaleownerofaconcreteandlandscapingcompany,saidthathewasnotawareof
discriminationbasedonrace,ethnicity,orgenderthataffectsminorityorwomenownedfirms
inCalifornia.HesaidNo.Wereallprettysensitivetothat,justbecause,ifyourequalified,
yourequalified.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthatheis
notawareofbarriersrelatedtodiscriminationbutthattherearebarriersforsmallcompanies.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,indicatedthatingeneral,heisnotawareofanydiscriminationinthe
marketplaceorfrompersonalexperiencebutthattherearesignificantbarriersthatany
businessfaces.
Onefemalebusinessownersaidthatshefacedbarriersbecausesheiswhite.Interviewee
WT#23,thefemaleownerofatruckingfirm,saidthatsincethisrecessionhitin2008workhas
becomeextremelydifficulttoget.Theprivatesectorhasalmostcometoastandstill.Thatleaves
thepublicworkswhichhasopenedmanyprojectstohelpstimulatetheeconomy.Thatsallfine
andwellifyouareaminority,butifyouarelikeme,awhiteCaucasianyouareoutofluck.Icant
getanynewworktosavemylife.IfIdo,Ihavetogiveittosometypeofminorityandtheytake5
to20percentoftheprofitfrommybusiness.Thatprofitiswhatkeepseverythinggoing.
BusinesshasslowedsobadthatIhavelostalotofsubhaulerswhopullmytrailers.AllmylifeI
havecommittedtohonestyandhardworkandnowIcantgetanythingcauseofthecolorofmy
skin.
Financing.
Someintervieweesidentifiedobtainingfinancingasabarriertopursuingbusiness
opportunities.Manythoughtthebarrierswerethesameforsmallfirmsingeneral.Anumber
offirmownersandmanagersindicatedthatfinancingwasimportanttooperatingandexpanding
theirbusinesses,butthatitwasdifficulttoobtaincredit,particularlyforsmallbusinesses.
Obtainingworkingcapitalandequipmentpurchasefinancingweretwoareasoffinancingoften
mentioned.Someintervieweessaidthatbarrierswerethesameforallsmallbusinesses;others
specificallypointedtodifficultiesforDBEs,MBEs,andWBEs.
IntervieweeSM#16,thewhitefemaleownerofanengineeringcompany,saidthatcapitalaffects
theabilityofabusinesstobesuccessful.Availablecapitaldoesaffectbusinesses,becauseasyou
starttogrow,asyoustarttogetcontracts,itrequiresmoreresourcestobeabletodeliverthat
work,shesaid.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE51

Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
reportedthatheneedsabout$1milliontokeepoperationsupandrunning.Hesaidthathis
companypreviouslyhadacreditlinebutgettingcreditisreallyhard.Hestated,Ratesarehigh
andrepaymenttermsaredifficultduetodecreasedrevenues.Youhavetobeabletoshowthree
yearsofprofitabilityandalineofcreditwillusuallyonlyextendfor60daysofoperations.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthat
financingisdifficult.Hesaid,Banksaretight,theyhaveslammedthedooronmebecauseIdont
havethefinancialtrackrecordneededtoobtainfinancing.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatobtainingfinancingisalwaystoughforallsmallbusinesses.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedthatobtainingcreditisdifficultanditsnotgettingeasier.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,mentionedthatobtainingfinancingisdifficultfor
mostsmallbusinesses.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatfinancingisahugebarrierandthereshouldbesomeguidance
andsupportfromCaltransregardingfinancing.Hesaid,Youknowthemoneyisgoingtobepaid
andCaltranscouldhelpmatchupsmallbusinesseswithfinancing.Weneedhelpwith
equipment,payroll,andmanagingreceivables.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatobtainingfinancingisahugebarrier.Shesaid,Interestratesalonewillkill
you.Itisprohibitivetoborrowmoneyinourbusiness.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Obtainingfinancingisabarrier,butitsbasedonthebusinessenvironment
notdiscrimination.Weareallfacingchallengesgettingmoremoney.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
financingisabarrier.Hesaid,Itisonlyaproblemwhenyouneedtoreplaceequipmentbutlean
prospectsmakeithardtomakefinancingdecisions.Ourcreditisgoodbutwerescaredtogo
intodebt.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
financingisahugebarrierforhim.Hesaid,ItisntdiscriminationbecauseImanMBE,itsjust
thatasasmallbusiness,Icanteasilygetfinancing.Youneedaccesstogoodfinancingterms
whenyourcustomerssitonyourmoneyforlongperiodsoftime.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
financingcanbeabarrier.Shesaid,Financingisdifficultandwedontliketoborrowmoney.
Manyofourcompetitorsoverboughtequipmentandwentbankruptasaresultbecausethey
couldntmakepayments.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE52

Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,reportedthat
minoritiesandwomenareadverselyaffectedwhenattemptingtoobtainfinancing.Shesaidthat
shecouldnothaveobtainedfinancingifherpartnerwasnotwhite.Interviewee#25statedthat
whensheattemptedtoobtainfinancingforherfirmshewasunsuccessfulwhileherwhite
partnerwasabletoaccessfinancing.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,saidthat
fromyearsofoppression,blacksdonthavetheabilitytoobtainfinancing.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatforserviceindustriesthe
vendorsareunabletofindfinancingandthattheprocesshasbecomemoredifficultrecentlyfor
SBEs,WBEs,andDBEs.
IntervieweeWT#26,theownerofaDBEcertifiedengineeringandconstructionmanagement
firm,said,AccesstofinancingforDBEsandminorityownedfirmsisnonexistent.Forthose
abletoobtainlinesofcreditorworkingcapitalloans,interestratesarehighandthetermsare
strict.
IntervieweeSM#8,thewhitemaleownerofanengineeringfirm,saidthatbankfinancingis
currentlyverydifficult.Nomatterifyoureevenpayingyourbillsontime,ifyourratiosarenot
inline,thebanksdontcaretheyrecomingonyourealfast,realhard.
Otherintervieweesdidnotperceiveobtainingfinancingasabarriertopursuingorobtaining
businessopportunities.Someinterviewees,includingminorityandwomenownedfirms,
reportednothavinganydifficultyobtainingfinancing.Forexample,Interviewee#7,theAfrican
Americanfemalecoownerofanoncertifiedconstructionandhaulingcompany,saidthat
obtainingfinancingisnotabarrier.Shesaid,Weveneverbeendeniedfinancing.Thebankhas
beenawesome.
Otherfirmsindicatedthattheyhavenotneededtoobtainfinancing.Forexample,Interviewee
#11,thewhitefemaleownerofacertifiedwomanownedengineeringbusiness,said,Thisisnta
barrier,wemanageourmoneyverytightlyanddonthavetoborrow.
OneintervieweefeltthatMBEsandWBEsreceivedpreferentialtreatmentwhenitcameto
financing.Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,saidthathebelievedMBE/WBEsgotpreferenceswhenitcametofinancing.He
said,Theygethelpmorethanme.
Bonding.
Someintervieweesidentifiedobtainingbondingasabarriertopursuingbusiness
opportunities.Bondingrequirementsappeartolimitbiddingopportunitiesforpublicsector
contractsforsomefirmsaccordingtointerviewees.Someintervieweesdescribedbondingasa
barrierforsmallbusinesses;someothersindicatedadditionalbarriersforminorityand
womenownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE53

Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidthatbondingrequirementsareworsethanaloanfromthebank.Hesaidthatbonding
companieslookatsuccessfulprofitabilityonpreviousprojectsandinadownmarketitis
difficulttogetbonded,whichcreatesasignificantbarriertoentry.Hesaidthatthemarkethas
madeitverydifficulttogetbonded.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthattherequirementsfor
bondingareprohibitiveandthatisthelargereasonwhythereisnopublicsectorinterestfor
me.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatbondingisabarrierforsmallbusinesseslikehis.Hesaid,
Bondingisdifficultforasmallbusinessandveryexpensive.IfCaltransactuallyenforcedreal
liquidateddamagestheywouldntneedbonds.Heasked,Howdoes$100perdayforliquidated
damagespenalizeabigfirmfordoingshoddywork?
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
bondingcanbeabarrier.Hesaid,Wedidsomeprojectswherewehadtobond.Findinga
bondingcompanyandhavingtherightcollateralwashard.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
bondingcanbeabarrier.Shesaid,Wevehadthesamebondingcompanyforyearsandtheyare
goodbutitisanaddedexpense.
IntervieweePH#15,thefemaleownerofastripingfirm,said,Thereisdiscriminationin
bonding,because theydontthink,becauseyoureawoman,thatyoucandothework,orthey
makeyoustepthroughextrahoopsforthat.
IntervieweePH#30,arepresentativeofaDBEcertifiedfirm,said,Caltransdiscriminationand
legitimatediscriminationprotestfilings,thatsasubjectIreallywanttogetintobecauseits
calledbonding.ItsasubtlestformofdiscriminationthatIveeverruninto.Thetaskorderscould
beonly$25,000,$30,000,andweprovidedperformanceandpaymentsfundsforthosethings,
andthecontractorsoveratwoorthreeyearperiod,butguesswhattheyaskustobond?They
askustobidthelineitems.Wedonthavethatkindofbondingcapacity.Soweareexcluded
frombiddingtheproject.Itsthesubtlestformofdiscrimination,butitsthere,andthis
departmenthere,thisDBEdepartmenthasntgottenanycontroloverthecontractsdepartment.
IntervieweeSM#12,theHispanicAmericanownerofanengineeringcompany,said,Primesare
havingsubcontractorsthatarentbigenoughindollarvaluesupplyabondwhentheir[primes]
bondingcompanyrequiresthat.Theresnochoiceforthem,andtheyhavetopassitdown.Itis
truethatgettingabondisalmostimpossible.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE54

TheAsianPacificAmericanfemaleownerofaDBEcertifiedconstructionservicesbusiness
[IntervieweeWM#20]reportedthatcertainagenciessuchasBARTrequiresubcontractorsto
havebondingfortheirentireportionofthecontract,includingalloptionsonthecontract,
whetherornottheyareexercised.Ifyouredoing$50,000worthofworkandyoucanbondfor
thatonthemaincontract,andtheresthreeadditionaloptions,andtheyreeach$50,000,and
youcantbondfor$200,000,youcantbid.Workneedstobedonetodetachtheseoptionsfrom
oneanother,especiallyiftheyrenotconcurrent.Thathasnothingtodowiththeprimesatall.
IntervieweeSM#1,aHispaniccontractorrepresentativeoftheHispanicContractorsand
SuppliersAssociation,saidthatbondingasubcontractlimitshisabilitytocompeteforthatwork.
Itsnotevenamatterofnotbeingabletopurchase[supplies]economically,orbeingableto
stagetheprocesseconomically,theproblemisthatIhaveabondinglimitandwecantbidthe
wholeenchiladaevenifwehavetheresources.
IntervieweeSM#12,theHispanicAmericanownerofaDBEcertifiedhighwaycontractingfirm,
disagreedwiththatassessment.Wevebidupto$8or$9million,thatsbeensubbedout,
withoutbondingandwecanhaveanotherjobfor$4millionwithoutbonding.Butthatsour
relationshipwiththeprimecontractortheyeitherfeelcomfortablewiththatortheydont.
Theyrequireitfromusortheydont.
Whentalkingaboutgettingbonding,IntervieweeSM#12,theHispanicAmericanownerofa
DBEcertifiedhighwaycontractingfirm,saidthatthediscrimination[bybondingcompanies]is
basedonhowcreditworthyyouare.Thenoncreditworthydontgetbonding,thecreditworthy
getbonding.Itdontthinkthatlookatallatwhatyouareraceorgender.
Whenaskedifcapitalizationofthefirmwasimportantintheconstructionindustry,Interviewee
SM#15,afemalebusinessownerandrepresentativeoftheSouthernCaliforniaContractors
Association,said,Itis,nodoubtandespeciallybecauseofthebondingrequirements.Thats
oneofthehurdlesanycompanyhastoface.Sheadded,Capitalization,especiallyforcompany
thatisjuststartingout,iskey.Theresnogettingaroundit.Shecontinuedthatwhetherornot
youqualifyforbondingisallbasedonthosenumbers.
IntervieweeSM#17,arepresentativeofAssociatedProfessionalsandContractorsofCalifornia,
explainedthelinkagebetweenequityinahome,capitalinabusiness,andthebusinessassets
thatabondingcompanywouldconsider.Hesaidthatbondingisnotbasedonequityinahome,
butwhatbondingisbasedoniswhatcashisavailabletogetyououtofaproblem,soifyouhave
equityinahome,andyoucloseyourbooksoutonthefirstoftheyearyougotothebankon
December25andgetaloanonyourhomeandputitinyourbankaccountthebonding
companylooksatthatcash.Yourbalancesheetisthesame,butthebondingcompanylooksat
thecashanditwillgiveyoubondingaccordingly.Headded,Afteryoucloseyour[yearend]
statementout,youpaythebankbacksothatyouhavethesameequityinthehomethats
thewayyougetbonding.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE55

Otherintervieweesdidnotperceivebarriersinconnectionwithobtainingbonding.Some
companiesreportedthattheydonotneedtoobtainbonding.Interviewee#16,thewhitemale
vicepresidentandcoownerofawomanownednoncertifiedpowerandcommunication
conduitfirm,mentionedtheydonothavetobondintheirlineofworkandthathehasnotheard
ofthisbeinganissueforothercompaniesinthemarket.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatbondingisnotanissueforthem.Hesaid,Wetypicallydonthavetobondbecausewe
aresubs.Weprovideservicestotheprimewhohastobebonded.
Insurance.
Someintervieweesidentifiedinsurancerequirementsasabarriertopursuingbusiness
opportunities,especiallyforsmallcompanies.Interviewee#1,theHispanicmaleownerofa
noncertifiedconstructionandconcretebusiness,saidthatinsurancerequirementsarevery
disadvantageousforsmallbusinesses.Sometimestherearerequirementsof$5millionumbrella
policieswhichareveryexpensive.Whywouldasmallbusinessdothis?Constructiondefect
lawsuitsrequireexpensiveinsurance.Youcangetonejobpoliciesbutthatishardand
expensive.Hereportedthatthevolumeofworkisrelativelysmallincomparisontotheexpense
ofthesepolicies.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatinsurancerequirements
areprohibitiveandthathewouldliketoseeseminarsonthesetopics.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedthatpremiumsareridiculouslyhighandinsurancerequirementsforpublic
sectorworkaretoohigh.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatinsurancerequirementsforvarious
publicsectoragenciescanbeexorbitantlyhighandthatobtaininginsurancetomeetthese
requirementscanbeahugebarrierforsmallcompanies.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatanyhighwayworkisextremelyexpensiveandprohibitive.You
havetopayhazardpayforsomeworkbutitshouldntbesoprohibitivebecauseweuselaw
enforcementtoslowdowntraffic.Thatshouldhelpuswithinsurancebutitdoesnt.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatinsuranceisahugebarrier.Shesaid,Insurancecostshavegoneupalong
withthecostofmaterialsbecausetheyarebasedongrossrevenue.Itshouldntworkthatway.
Increasingcostsformaterialsmakeitlooklikewearemakingmoremoneybecauseour
revenuesareincreasingbutthatdoesntmeanourprofitisincreasing.Shecontinued,Our
profitabilityisactuallylowerbecausemarginsaresotightandtotopitoff,ourinsurancecosts
haverisen.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE56

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatinsurancepresentsasignificantbarrier.Shesaid,Insuranceforasmallfirm
isexpensive.Ifthereareissues,bigfirmshaveabigadvantage.
IntervieweeSM#22,aHispanicAmericanownerofanengineeringcompany,saidthat
professionalliabilityinsurancewasalargeconcernforsmallengineeringbusinesses.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompanystated,
Insuranceisabarrier,especiallybecausewearerequiredtohave$1millionincoverage.There
isnodiscriminationhere,itsexpensiveforeverybody.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatinsurancecanbeabarrier.Hesaid,Wehavetohavedrivers
withcleandrivingrecordsandiftheydontitcanimpactourinsuranceratesandcosts.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
insurancerequirementsandobtaininginsuranceisabarrier.Hesaid,Insuranceisreally
expensiveforourdriversandtrucks.
IntervieweePH#1,theownerofaDBEcertifiedenvironmentalconsultingfirm,said,Nextone
isaboutcostofinsurance.Iamasmallcompany.Thenwegetabig$77millionproject,Ineed
workmenscomp,Ineedallkindsofcoverages.Nowbecauseitisahighwayproject,it
skyrockets.Thatwasverydifficult.Butonceagain,asmallbusiness,takethisuponourselves,
youhavetogetyourfunding.Thatissomethingyoucanhelpuswithpossibly,butIdontknowif
youcanhelpusoverthehurdle.Thatisamajorhurdle.
IntervieweeWT#7,thefemaleownerofaDBEcertifiedresearchfirm,said,Theinsurance
requirementscanalsobehigh.Wehavepurchasedrequiredinsuranceandspendupto$5,000a
year.Itwouldbehelpfuliftherewassomewaytohaveasubsidizedprogramorlower
requirementsforsubs.
Oneintervieweesaidthattherediscriminationdidaffectherabilitytoobtaininsuranceata
competitiveprice.IntervieweePH#15,thefemaleownerofastripingfirm,saidIninsuranceI
thinkthereisdiscrimination. Idontthinktheywanttogiveyouthebestpriceat first.Youhave
tobethereandplayhardballwiththem toevengetyouinthesameneighborhoodasyour
competitorsthataremen.
Otherintervieweesdidnotperceiveinsurancerequirementsasabarriertopursuingor
obtainingbusinessopportunities.Interviewee#7,theAfricanAmericanfemalecoownerofa
noncertifiedconstructionandhaulingcompany,indicatedthatthereisnobarrierinobtaining
insurancebutsaidthatsomecustomersandtheirlocationsarenowrequiringmoreinsurance
whichcostsmoremoney.Wehavehadtoincreaseinsuranceoverthepasttwoyears.
Interviewee#10statedthatdesigninsuranceisexpensive,butitisnotabarrier.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatobtaininginsuranceisnotabarrierbutthatitcanbeexpensivedepending
onthetypeofworkyouaredoing.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE57

Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said
shewasnotawareofanyrace/ethnicity/genderbasedbarriersordiscriminationwithrespect
toinsurancerequirements.
Equipment.
Someintervieweesidentifiedaccesstoequipmentasabarriertopursuingbusiness
opportunities.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidthatreplacingequipmentwithoutcreditisdifficultbecausefinancingis
difficulttogetnow.Heasked,Howdoyougrowyourbusinesswhenyoucantaffordtoreplace
yourequipment?
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthathehas
torentalotofequipmentbecauseofissueswithfinancing.Hesaid,Icantevengetaccounts
withsomeoftheconcretecompanies,letalonebanks.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedGettingnewequipmentishardwithoutcash.Cashisking,withoutcashitis
difficulttopurchasetheneededequipment.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatequipmentcanbeabarriertoasmallbusinesslikehers.Wehaveto
retrofitallofourtrucksbecauseofemissionlaws.Wewillhavetoupgradeourtrucks.Thiscan
beabarrierforsmallbusinesseslikeoursandisprettycostly,shesaid.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatequipmentcostshavedoubledincost.Hesaidthatevenrenting
istooexpensive.Weusedtospend$3.5to$5millionperyearonequipment.Nowwecant
affordtodothatsincetheeconomycrashed.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatequipmentisahugebarrier.Shesaid,Wehavetopurchasedesignerdiesel
fuel,retrofitequipmenttomeetnewairregulations,andpurchasematerials.Alloftheseare
expensive.Sheasked,Howcanwemaintainprofitabilitywhenwehavetospendsomuch
moneytoretrofitourequipmenttomeetalltheseregulations?Wehavetoborrowmoneyto
makethishappenandthenpayhugeinterestratesontopofthat.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatequipmentcanbeasignificantbarrier.Hesaid,Cashflowcanimpactyourabilityto
obtainequipmentormaintainit.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
equipmentcanbeabarrier.Hesaid,Wehavealotofequipmentthatweneedbutyouneedto
invest[inotherequipment]togetwork.Thisisahardbalance.Ifyoudonthavetheright
equipmentyoucantgetthework,butthereisnoguaranteeyouwillgettheworktopayforit.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE58

Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
equipmentisabarrier.Hesaid,Wehavetoretrofitorreplaceourequipmentbecauseofnew
regulationslikeAQM.Thiswilllikelyrunusoutofbusiness.Wecantgetfinancingsowere
goingtogooutofbusinessornotcomplywiththeregulations.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
equipmentcanbeabarrier.Shesaid,Weownourownequipmentandcangetnewequipmentif
neededbutitisexpensive.Wedontwanttogooutofbusinessbecausewetimedabig
equipmentpurchasewrong.
IntervieweeWT#27,theownerofaUDBEcertifiedhaulingcompany,said,RecentlyIhadto
passonaCaltransbidforhaulingspecialmaterialthatrequiresspecialtrailers.Ihaveextensive
experienceinthistypeofhaul.Wedontownourequipment;itstooexpensiveforasmall
businesstoinvestin.
Oneintervieweeindicatedthatdiscriminationaffectedherabilitytoobtainequipment.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,
indictedthatobtainingequipmentcanbeabarrier.ShesaidMenliketodealwithothermen.
Otherintervieweesindicatedthataccesstoequipmentisnotabarriertopursuingorobtaining
businessopportunities.Forexample,Interviewee#11,thewhitefemaleownerofafederally
certifiedwomanownedengineeringbusiness,saidthatequipmentisnotasignificantbarrier.
Shesaid,Ifweneedequipmentwebuyitonlyifwehavethemoneytobuyitwith.Wedont
leaseorfinanceanything.
LaborandPersonnel.
Someintervieweesperceivedaccesstolaborandpersonnel,andkeepinggoodemployees,as
achallengefortheirbusinesses.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,saidthatkeepinggoodpeopleishardwithsolittlework
availabletokeepthembusy.Hesaidthatthereisadifficultbalanceofkeepingpeopleemployed
sohecangoaftertheworkneededtokeeplightson.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatpersonnel/laborisabarrierforanysmallbusiness.Shesaid,Inour
business,alotofworkisseasonalsoitishardtokeepourpeoplebusy,payinsuranceand
providebenefits.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatpersonnel/laborisalwaysabarrier.Hesaid,[Personnel]isalwaysachallenge.When
weareslow,keepingpeoplebusyishardandkeepinggoodemployeeswhentheyarentbeing
paidisdifficult.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,indicatedthatpersonnelandlaborisabarrier.Hesaid,Wehaveto
defendourselveseverytimeaworkerisfiredandtheyfileacomplaint.Itdoesntmatterifithas
nomeritornot,wegetdisgruntledemployeeswhocostustimeandmoney.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE59

Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
personnelandlaborisahugebarrier.Hesaid,Wehadtoscalewayback.Ifyoucantkeep
peoplebusythenyoucantkeepthememployed.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
personnel/laborcanbeabigbarrier.Shesaid,Youhavetokeepthembusyoryouwilllose
them.
Oneintervieweesaidthatpersonnelandlaborchallengesareaffectedbydiscrimination.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,stated
thatpersonnelandlaborcanbeabarrier.ShesaidMendonotliketakingdirectionsfrom
women.Ofcourse,ouremployeesareallfamilymembers.
Otherintervieweesperceivednobarriersinconnectionwithaccesstolaborandpersonnel.
Forexample,Interviewee#7,theAfricanAmericanfemalecoownerofanoncertified
constructionandhaulingcompany,saidthatpersonnelandlaborisnotabarrier.Wepaypretty
wellandprovidegoodbenefits.Wehaveneverlostadriverbecauseoflackofwork,benefitsor
pay,shesaid.
WorkingwithUnions.
Someintervieweesperceivedworkingwithunionsasabarriertopursuingbusiness
opportunities.Thestudyteamdiscussedwhetherunionspresentedabarrierforfirmsdoing
business,especiallyinthepublicsector.Manyfirmownersindicatedthatworkingwithunions
didpresentabarrier,andoftendiscusseddifficultypayingprevailingwage.Ingeneral,business
ownersdidnotsuggestthatminorityandwomenownedfirmsfacedanygreaterbarriersthan
otherfirmsindealingwiththeseissues.Althoughthediscussionfocusedonbusinessowners
andmanagersperspectivesaboutworkingwithunions,someindividualsalsodiscussed
whetherunionshadbeenabarriertoentryandadvancementforminoritiesandwomen.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidthatunionsarenotconcernedwithemployersandtheirprofitability.Prevailingunion
wagesareabarrier.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatunionscanbeabarrierdependingonthearea/specialty.Hesaid,
Youcanworkwiththembutunionspecificationsdontmakesensesometimes.Thespecsfor
thejobsareclassifiedwrong.Youhaveconcreteguysdoingelectricalandtheyarentqualified.If
thespecsarewrittenwrongandyoucanuseunqualifiedandcheaperguysthenIcantcompete.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,
Workingwiththeunionscanbeabarrier.WehavehadourissueswiththeLocal12&3inthe
past.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatworkingwithunionscanbeabarrier.Hesaid,Occasionallywehavetomeetprevailing
wagerequirements.Thatmeanswehavetochargeahigherrateormakelessmoney.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE60

Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatworkingwithunionsisabarrier.Hesaid,Unionsareamajor
barrierthatkeepsusfromgettingwork.IvehadpeopletellmethatWedontwantnonunion
memberstakingfoodoutofthemouthsofourunionmembers.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany
mentionedthathehashadissuesworkingwiththeunionsmanytimesovertheyears.Hestated,
The[unions]arethedevil.Theymakeworkingwiththemverydifficult.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
unionscanbeabarrier.Hesaid,Occasionally,wevedoneworkwherewehavetohaveunion
credentialstogetthework.Wecantaffordtopayuniondueswhenyourratecantmakeupfor
theexpense.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
workingwithunionscanbeabarrier.Shesaid,Ifwegetaprevailingwagejobthenwehaveto
payunionrates.Thatusuallycutsintoourmargin.
Someintervieweespointedoutthatthoughtunionsdiscriminatedagainstwomenand
minorities.Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,
reportedissuesworkingwithunions.Shestatedthatunionsarenotshyaboutbiastoward
womenand
minorities.Sheaddedthatmenroutinelymadecruderemarkstowomenworkinginthe
constructiontradeandexpectedthewomentoadjust.
IntervieweePH#15,thefemaleownerofastripingfirm,said,Theresbeendiscriminationinthe
unions. SomeofourWCOEmembersthathavecomeupthroughthe tradeshavethemost
horrendousstoriestotellofthe thingsthattheyhavehadtoputupwith.Andifyoull lookat
theunionmembershipnow,youllseethatthere areveryfewwomenintherestill.
Manyintervieweesreportedthatworkingwithunionsdoesnotposeabarriertopursuingor
obtainingbusinessopportunities.Forexample,Interviewee#7,theAfricanAmericanfemaleco
ownerofanoncertifiedconstructionandhaulingcompany,indicatedthatworkingwithunions
isnotabarrierforhercompany.Shesaid,Wearenotunionsothathasneverbeenaproblem.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthiscanbeabarrier.Shesaid,Wepayprevailingwagesandmeetallstate
criteria.Shecontinued,Howcanunionsdictatelikethistothestate?Thisisntfairtosmall
businesses.Youhavetobecompetitivetogetthejobandownersgowithoutprofitsometimesin
ordertomeetprevailingwagerequirements.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE61

BeingaUnionoraNonUnionEmployer.
Someintervieweesfeltthatthefactthattheywerenotamemberofaunionoraunion
employeroperatedasabarriertopursuingorobtainingworkinthelocalmarketplace.Many
smallbusinessownersthatwerenonunionemployersindicatedbarriers.Interviewee#1,the
Hispanicmaleownerofanoncertifiedconstructionandconcretebusiness,saidthatnotbeing
unionhassomedrawbacksinnotbeingabletocompeteforsomeworkinthepublicsector.He
alsosaidthatbeinginaunionwouldrequirejoiningmanyunionsandpayingmultipledues.He
explainedthatdespitethosehassles,hisfirmstillwouldnotqualifyforunionbenefits.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,Becauseweareanonunionemployerwehaveadifficult
timewithharborunionsandtheirpicketing.Thisdoesnthaveanythingtodowith
discriminationjustnormalunionways.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatbeinganonunionemployerisabarrier.Hesaid,Wecantbid
onthingssometimesbecausewearenonunion.
IntervieweePH#21,theownerofaDBEcertifiedsurveyingcompany,said,Ithoughtatthe
timeIwasdoingthe[DBE]registrationandgoingthroughjumpingthroughallthosehoops
thatIwasgoingtogetsomekindofanopportunitywithCaltranstoprovidesurveyingservices.
Thebottomlineiswhiletherearealotofprojectsbeingbid,everytimeIlookatthescopeofthe
projectandinvolvemyselfwiththeprimecontractors,theresaunionaffiliationthatseemsto
getintheway.Imnotunionaffiliated,andbeingasmallfirm,Idonthavetheresourcestohave
peopleonstaffdoingallthepaperworkandwhateveritisrequiredtogettogettheunion
certification,soitreallyhasntdonemeawholelotofgood.
Thewhitemaleownerofaconstructioncompany[IntervieweeSM#10]reportedthatheis
requiredtohiresubcontractorsthatareunioncontractors.Asunioncontractorsasprimes,we
cannotsignupanybodyasanonunioncompany.
Otherintervieweesperceivednobarriersinconnectionwithbeingaunionoranonunion
employer.Asoneexample,Interviewee#15,theHispanicAmericanofficemanagerofa
SBE/DBEcertifiedconcretecompany,statedWeareanonunioncompanyandhaventhad
issueswiththelocalunion.
ObtainingInventoryorOtherMaterialsandSupplies.
Someintervieweesindicatedthatobtaininginventoryandothermaterialswasabarrier,
especiallyintermsofbeingcostcompetitiveanditsimpactoncashflow.Intervieweesdidnot
indicateadditionaldisadvantagesbasedonraceorgender.Interviewee#8,theNative
Americanownerandpresidentofanoncertifiedelectricalcontractingbusiness,saidthat
inventoryandsuppliesareexpensive.Hesaid,Itislikeequipmentcosts.Everythinghasgotten
moreexpensiveoryoucantfindsuppliesthatmeetthespecificationsatareasonablecost.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE62

Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatobtaininginventoryorothermaterialsandsuppliesisabarrier.Shesaid,We
areatthemercyofretailcostsformaterials.Sometimeswewillsubmitabidforsomethingand
costswillrisebeforethejobstartsandthateatsintoourprofit.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Gettingproductcanbeaproblem.Cashflowis
sometimesaproblemwhenbillingstake60days.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
indicatedthatobtaininginventoryorothermaterialsandsuppliescanbeabarrier.Hesaid,We
dohaveaccountsthatwecantapformaterialsbutslowcashflowcanmakethatachallenge.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
obtaininginventoryandsuppliescanbeabarrier.Hesaid,Yes,keepinginventoryandsupplies
inanuncertainmarketisrisky.Youhavetobalanceittomakesureyoudontgetover
extended.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
obtaininginventoryandothermaterialsisabarrier.Hesaid,Itsthesameasequipment,we
cantaffordalotofequipmentandwehavetodoeverythingourselvestokeepourequipment
running.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
obtaininginventoryorothermaterials/suppliescanbeabarrier.Shesaid,Ifprimesdontpay
usquickly,wehavetosweatitoutwithoursuppliers.
Mostintervieweesreportedthatobtaininginventoryandothermaterialsandsuppliesisnota
barriertopursuingorobtainingbusinessopportunities.Forexample,Interviewee#1,the
Hispanicmaleownerofanoncertifiedconstructionandconcretebusiness,saidobtaining
inventoryorothermaterialsandsuppliesisnotaproblemaslongasthebillsarebeingpaid.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatthereisnobarrierobtaininginventoryorothermaterialsand
supplies.Wehavesmallaccountswithsuppliersandthathasneverbeenaproblem,shesaid.
PrequalificationRequirements.
Someintervieweesidentifiedprequalificationrequirementsasabarriertopursuingbusiness
opportunities.Interviewee#2,thewhiteprincipalofanenergycompany,statedthatthereare
prequalificationbarriersduringtheRequestforProposalprocess.Primebidderswantspecific
smallerfirmstoparticipate.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatprequalificationrequirementscanbeabarrier.Shesaid,Wehadaproject
with[acity]recentlyanditwasverytimeconsumingtofilloutalltheforms.Theycanbevery
confusingyouhavetoresubmitqualificationsagainandagainandtheychangerequirements
onawhim.Theyshouldkeepitsimpleandnotovercomplicatetheprocess.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE63

Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatprequalificationrequirementsareasignificantbarrier.Hesaid,
Weencounterprequalificationrequirementsallthetime.Theairportjobwedidrequiredus
todotestpoursandruntestsonthemtoensurethattheymetthespecs.Thistakesuptimeand
money.Itisjustpartofdoingbusiness,though.Itismoreofachallengethanabarrierforus,but
forothersitcanbeashowstopperiftheyhavetospendmoneyonoutsidelabstogetpre
qualified.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,saidthatprequalificationrequirementscouldbeabarrier.He
said,Thereisaproblemduetobondingrequirements.
Otherintervieweesidentifiednobarriersinconnectionwithprequalificationrequirements.
Forexample,Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidtherearenoproblemswiththeprequalificationrequirements.
Everythinghehasappliedforhehassuccessfullyprequalified.
ExperienceandExpertiseRequirements.
Someintervieweesidentifiedexperienceandexpertiseasabarriertopursuingbusiness
opportunities.Someintervieweesthoughtthatexperienceandexpertiserequirements
presentedabarrier,butthatiswasthesameforsmallbusinessesingeneral.Interviewee#9,the
AfricanAmericanfemaleownerofaDBEcertifiedconstructionandhaulingcompany,saidthat
experienceandexpertisecanbeasignificantbarriertosmallbusinesseslikehers.Shesaid,It
isntbasedonraceorgender,itisbasicallydiscriminationagainstsmallbusinesses.Caltrans
doesntscopeworkinfavorofsmallbusinesses.Theydontbreakdownprojectssoasmall
businesscanbidonthemindependently.
ThewhitemaleownerofanSBEcertifiedengineeringcompany[IntervieweeSM#8]reporteda
recentexperiencetoteamwithalargerA/Efirmonaprojectwheretheprimewasscoredbased
ontheirpriorexperienceworkingwitheachsubconsultantontheteam.Allofasudden,boom
Iwasoutthedoor.Ididnthaveexperience[withtheprime].HeagreedthatitwasaCatch22
situation.
Someotherintervieweessaidthatexperienceandexpertiseofminoritiesandwomenwere
subjecttoquestionbyothersduetorace,ethnicityorgenderorthatexperiencerequirements
oncontractsputminoritiesandwomenatadisadvantage.Interviewee#38,thewhitemale
partnerofacertifiedwomanownedenvironmentalconsultingfirm,saidtheexperienceand
expertiseofhisfemalepartnerwasquestionedbased,apparently,ongender.
IntervieweePH#2,theownerofaUDBE,said,Ithinkitsveryimportantthatyouunderstand,
especiallywithHispanicsandblacks,notonlydowehavetheproblemofbeingHispanicand
blackordisadvantaged,wealsohaveaproblemofhavingthebackgroundexperienceorthe
performancebackgroundtoshowtobeabletogetonsomeofthecontractsinwhichCaltrans
putaminimumbackgroundonpastperformanceon.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE64

Otherintervieweesindicatedthatexperienceandexpertisearenotbarrierstopursuingor
engaginginbusinessopportunities.Forexample,Interviewee#7,theAfricanAmericanfemale
coownerofanoncertifiedconstructionandhaulingcompany,saidthatexperienceand
expertisearenotabarrierforhercompanybecausetheyhavebeenprovidingtheseservicesfor
alongtimeandareveryexperiencedandwellknowtotheircustomers.
LicensesandPermits.
Forsomebusinessowners,obtaininglicensesandpermitswerebarrierstodoingbusiness.In
general,businessownersdidnotidentifyadditionalbarriersforsmallbusinessesownedby
minoritiesorwomen.Interviewee#5,theSubcontinentAsianAmericanownerofanon
certifiedconcretepavingcompany,stated,Thereisnoraceorgenderbarrierforobtaining
licenses,itisjustdifficultduetothenatureofthetests.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,indicatedthatlicensesandpermitsareabarrier.Shestated,Therearealotof
permitsandlicensestokeepupwith.Wehavetokeepupwiththese.Someexpireannually,
somesemiannually,somequarterly.Thiscanbehardtokeepupwithifyoudontkeeptrackof
it.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,indicatedthatlicensesandpermitsareexpensiveandcreateasignificant
barrier.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatlicensesandpermitsareahugebarrier.Shesaid,Thecosttostaylicensedall
yearishuge.Whyshouldwepaythesecostsjusttobid?Ifwewin[abid]wecouldgetthe
licensesbeforewestart,otherwiseitisjustahugecostweincurallyearlongwhenwedomostly
seasonalwork.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatlicensesandpermitsareasignificantbarrier.Hesaid,Licensing
feesexistforeverythinginourbusiness:smallenginelicenses,airqualitycontrolpermits,heater
licensing,compressorpermits,storagecontainerinspections,waterquality,etc.Wehaveto
devoteresourcesbothpeopleandmoneytotheseinspectionsandkeeptrackoftheexpiration
foreachone.Itisexpensiveandtimeconsuming.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
licensesandpermitsareasignificantbarrier.Hesaid,Theyaresorestrictive.Youneedcity,
county,state,fire,CHPlicensesorpermits.Theyallmakeitsorestrictiveandtimeconsuming
thatitishardtokeepupwithandpayfor.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
licensesandpermitscanbeabarrier.Shesaid,Itdependsonthecustomer.Somecitieshave
specificpermitsandcertificationsyouneedthatyoudontneedanywhereelse.Thisis
potentiallyexpensiveandtimeconsuming.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE65

Otherintervieweesindicatedthatobtaininglicensingandpermitsisnotabarriertopursuingor
engaginginbusinessopportunities.
NotificationofWorkOpportunities/Marketing.
Someintervieweesidentifiednotificationofworkopportunitiesandmarketingasabarrierto
pursuingbusinessopportunities.Interviewee#8,theNativeAmericanownerandpresidentofa
noncertifiedelectricalcontractingbusiness,saidthatlearningaboutworkandmarketingcanbe
abarrierforfirmslikehis.Hesaid,ThereshouldbeawebsitewhereCaltranscanletusknow
whatspecificallywecanbidonbasedonourspecialty.
Otherintervieweesindicatedthatnotificationofworkopportunitiesandmarketingisnota
barriertopursuingorengaginginbusinessopportunities.Asoneexample,Interviewee#7,the
AfricanAmericanfemalecoownerofanoncertifiedconstructionandhaulingcompany,said
thatlearningaboutworkandmarketingarenotabarrierforherfirmbecausetheyhavebeen
providingtheseservicesforalongtimeandarewellknowntocustomers.
ContractSpecificationsandBiddingProcedures.
Ingeneral,intervieweeswhoidentifiedcontractspecificationsandbiddingproceduresas
barriersdidnotindicatethatthosebarrierswereanydifferentbetweenminority andwomen
ownedsmallbusinessesandmajorityownedsmallbusinesses.Interviewee#3,thewhitemale
ownerofaconcreteandconstructioncompany,said,Itjustseemslikesomepublicsectorbids
requirealotofdetailcomparedtoresidential.NodiscriminationthatImawareofbutitisjust
restrictiveforasmallbusiness.
Interviewee#5,thesalesmanagerofanoncertifiedconcretepavingcompany,mentionedthat
hehasalwaysthoughtthatbarriersdoexistwithregardstorestrictivecontractspecifications
forpublicsectorcontracts.Hestated,Restrictivecontractspreventusfromdoingmoreworkin
thepublicsector.Healsosaid,Thebiddingprocessoverallisbroken,themajorityofthe
contractsjustwantthelowestbidnotthebestvendor.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatthebiddingprocesscanbevery
cumbersometosmallbusinesses.Thebidsoftenrequireahighnumberofhourstocomplete.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,indicatedthatrestrictivespecificationsandbiddingproceduresareahuge
barrierforsmallbusinesses.Hesaid,Thisisoneofthebiggestproblems.Youhavepeople
writingspecificationswhodontunderstandwhattheyaredoingsotheyrequirethingsthat
dontmakesense.Theresultisthatonlybigbusinessescancompete.Healsosaid,Howdoyou
identifythepiecesthatyoumightbequalifiedfor?Youcantbidonthewholething[asasmall
business]soonlybigfirmsgetthework.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatunnecessarilyrestrictivecontractspecificationsandbiddingprocedurescan
beabarrierforsmallbusinesseslikehers.
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Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthattherequirementsandspecificationscanbeabarrier.Shesaid,Theformulas
andrequirementsoftendontmakesenseandrequirealotofpaperworkjusttobid.Shealso
saidthatthebiddingprocessisahugebarrier.Shesaid,Theyjustneedtosimplifyitandnot
requiresomuchpaperworkandrepetitiveinformation.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatunnecessarilyrestrictivecontractspecificationsandbiddingproceduresarea
significantbarrier.Hesaid,Allpublicsectorworkishardandtheyshouldstreamlinethe
biddingproceduressothatitdoesnttakesomuchtimetorespondtoabid.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,indicatedthatcontractspecificationsandbiddingproceduresarea
barrier.Hesaid,AllplantsarecertifiedandwehavetomeetCaltransspecificationsandour
materialsandequipmenthastomeettheirtolerances.Itisoverwhelmingandmaddeningthat
wehavetopaythismuchmoneytomanydifferentagenciesforcertificationjusttomeetspecs
beforeweevergetajob.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
unnecessarilyrestrictivecontractspecificationsandbiddingproceduresareabarrier.Hesaid,
Jobsbasedonunionrestrictionsunnecessarilycancreateanissue.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
contractspecificationsareasignificantbarrier.Hesaid,Wenevergetanopportunitytobidon
jobsdirectly.Itseemslikesomeoneelsealwaysgetstheworkandweonlygetthescraps.He
alsosaidthatthebiddingprocesswasabarrier.Hesaid,Thebigfirmshaveabigadvantageand
Caltransalwaysseemstousethesamefirmsoverandoverevenwhentheyscrewthingsup.
Theprocessisnotfair.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
restrictivecontractspecificationsandbiddingprocedurescanbeabarrier.Shesaid,Ourbids
areusuallyfairlysimplebutwewillsometimesgetblueprintsandiftheblueprintiswrong,we
havetodecipherthatandmakethechanges.Thiscantakealotoftime.
IntervieweeWT#7,thefemaleownerofaDBEcertifiedresearchfirm,said,Theaccounting
requirementsforsubcontractorscanbeprohibitive.Forexample,arecentRFPfromCaltrans
requiredthatbothprimesandsubswouldneedtohaveanaccountingsystemthatallowsfor
continuouslyupdatedoverheadrates.Wewerenotabletoparticipatebecauseofthis
requirement.
IntervieweePH#7,asmallbusinesscontractor,said,Itsveryhardformetodoblueprintsover
BidSync.Itriedtogetinformationfromthechiefengineer.HesaidIneedtorequestitthrough
BidSync.BidSyncwouldntrespondtomequicklyenough.Theblueprintbyontherecord,was
497pages.Thejobwasonepage.SoifthatgivesyouanyideaofwhatIhavetodealwithasjusta
metalfabricator,theresjustwaytoomanypagesthatIdidntneedatall.Imean,theycouldhave
summarizeditup.Thesketchthattheyhadwasnotaccurate,evenclose.Itwaslikeageneric
sketch.Andthemeasurementsthatwereonthatsketchwerentevenaccurate,sotheresnoway
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE67

asmallbusinessguylikemecouldaccuratelybidthatjob,evencomeclosetobiddingthatjob
withoutthecorrectmeasurementsbeingonthat.Itriedtogetthemeasurements.Imean,Ijust
neededtoknowjustgetmeclose.Givemethewidthoftheroad.Thewidthoftheroadwasnt
on497pages,norwasitonthesketch.Andthatsprettybad.Iwasreallyupsetaboutthat.There
werejustnotenoughmeasurementsthereformetoaccuratelygiveabid.
Otherintervieweesreportedthatunnecessarilyrestrictivecontractspecificationsandbidding
proceduresdonotposeabarriertopursuingorobtainingbusinessopportunities.Asan
example,Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcrete
business,saidcontractspecificationsseemprettyfair,andthatmostbiddingprocessesare
prettystraightforward,butyouhavetoreallyknowthesystem.Hestatedthatthereislotsof
paperworkinvolvedintheprocess.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatbiddingprocessesdonotpresentabarriertoherbusiness.
FactorsPublicAgenciesorOthersUsetoMakeContractAwards.
Someintervieweesidentifiedvariousfactorspublicagenciesorothersusetomakecontract
awardsasabarriertopursuingbusinessopportunities.Someintervieweesidentifiedfactors
thatfavoredlargebusinessesoversmallbusinesses,andsomesaidthatthelowbidsystem
representedabarrier.Ingeneral,intervieweesdidnotreportthatthesefactorsaffected
minorityandwomenownedsmallbusinessesdifferentlythanmajorityownedbusinesses.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthefactorsagenciesusetomakeawardsareahugebarrier.He
said,Theyaregearedtobigcompaniesonly.Theywritespecificationssoonlybigcompanies
canwin.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatfactorspublicagenciesusetomakecontractawardsareabarrier.Shesaid,
Lowbidderwinningdoesntmakesense.Justbecausethebidislowestdoesntmeanitisthe
bestvalue.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
factorspublicagenciesorothersusetomakecontractawardsisabarrier.Hesaid,Theytake
thelowbidandthenmakeupforitlaterwithchangeordersbecausetheyknowtheyare
underbidding.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,feltthatfactorspublicagenciesusetomakecontractawardscan
beabarrier.Hesaid,Openingthedoorfornewguysisdifficult.Agenciesprefertoaward
contractstofirmstheyhavebeenworkingwith.
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Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
statedthatfactorspublicagenciesorothersusetomakecontractawardscanbeabarrier.He
said,Contractsshouldbeawardedbasedonlowpricesosmallcompaniescancompetewith
largecontractors.
Otherintervieweesidentifiednobarriersposedbythefactorsthatpublicagenciesorothersuse
tomakecontractawards.
BidShopping.
Someintervieweesidentifiedbidshoppingasabarriertopursuingbusinessopportunitiesor
thatbidshoppingisafrequentoccurrence.Anumberofintervieweesreportedtheexistenceof
bidshopping.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,reportedthatwithingeneralcontractorsbidshoppinghappens,that[the
generalcontractors]solicitbidsandshowthemtotheirbuddies.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatbidshoppinghappensallthetime.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Bidshoppingevenhappensinpublicworks,butgoodluckprovingit.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatbidshoppingoccursbutshesaidthisispartofdoingbusiness.
Customerswillgiveuspricestobeatallthetime.Thisisanopportunity.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatbidshoppingisabarrier.Shesaid,Thishappensallthetime.Contractors
willaskyoutobeatsomeoneelsesbidinordertogetwork.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said,
Idontdealwithpeoplewhoshopbids.Iknowithappens,knowwhotheyare,butitisnot
worththeliabilities.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Bid
shoppingisahugebarrier.Wecantbidwithcertainprimes.Recently,wepostedabidearlyto
thewebsiteandweheardthroughthegrapevinethatourbidwasshopped.Thisisjustbusiness
thoughandhasnothingtodowithdiscrimination.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthatbidshoppinghashappenedafewtimesinthe
past.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,"[Bidshopping]happensallthetime,butithasnothingtodowith
discrimination.
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Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatbidshoppingcanbeabarrier.Hesaid,Certaincompaniesareknownforthis.They
takebidsandthenaskyoutobeatthem.Ourapproachistojustgivethemourbestnumber
wedontliketoplaythatgame.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatbidshoppingwasabarrier.Hesaid,Yes,wehavepeoplecome
touswithbidstobeatallthetime.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany
stated,Bidshoppingcertainlyoccursinthemarket.Ihavehaditcostmeafewjobsinthepast.
Somethingneedstobedoneaboutthis.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatbid
shoppingisasignificantbarrier.Hesaid,Wehaveotherbigfirmscometousallthetimetelling
uswhatthebidiswehavetobeat.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
bidshoppingisahugebarrier.Shesaid,Manyprimeswillaskyoutobeatbidstheyhave.We
havetoadjustourbidstobeatthemifwewantthework.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,isawarethatbidshoppinghappens.Hesaid,Ithappensallthetime.Iholdoff
onpriceuntilthelastminute.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Iveheardof[bidmanipulationandbid
shopping]happeningalot.WhenIworkedfor[alargeconsultingcompany],Ipickonthemalot
becausethiswasglaring.TheyhadaguywhoworkedforCaltranswhowentoverto[alarge
consultingcompany].ItwasprettyobviousthatwegotalotofcontractsfromCaltransbecause
hehadinsidepeoplegettingwork.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany;
saidthatbidshoppingisprevalentinthepublicandprivatesectors.
IntervieweePH#13,arepresentativeofaUDBEcertifiedconstructioncompany,said,Ivehad
mybidsshoppedoutbeforewiththat agency.Bidshoppingiswhereyouhave abidthatsdue
atmaybetwooclock,andaroundtwelve oclockifyouareifyouarebiddingjobsto
everybody onthelist,youstartgettingphonecalls,Youre$500 high,$200high.Youregotto
behere.Thatsbid shopping.
IntervieweePH#15,thefemaleownerofastripingfirm,said,Ivebeenbidshoppedmanytimes
recentlyona design/buildcontractwithCaltrans,wherethesubsare notlistedatthetimeof
bid.
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Whentalkingaboutdesignbuildcontracts,InterviewSM#11,afemaleownerofaconstruction
businessandrepresentativeofWomenBusinessOwnersandExecutives,said,Theresnolisting
ofsubsatbidtimeonthat.Itgives[primes]timetobidshopyourbid.Yougivethemthebestbid
atthetimeofbid,andthentheywanttocomeandworkyouover.Thatsveryhardonsmall
businessbecauseweregivingyouthebestbidatthetimeofbid.
Other interviewees indicated that bid shopping is not a barrier to pursuing or engaging in
business.
BidManipulation.
Someintervieweesidentifiedbidmanipulationasabarriertopursuingorobtainingbusiness
opportunities.Interviewee#8,theNativeAmericanownerandpresidentofanoncertified
electricalcontractingbusiness,saidthatalotofsemicrookedthingshappenallthetime.Some
bigprimeswillmanipulatebidsandspecificationsandtakeitoutontheirsubssotheycanmake
money.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatbidmanipulationisasignificantissue.Shesaid,Wehavehadcontractorsask
ustoviolateourcommerciallyusefulfunction(CUF)sothattheycangetcredit.Caltransneedsto
investigateandpunishthesepractices.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatbid
manipulationisabarrier.Hesaid,Primeswillbasicallytellyoutakeitorleaveitforabid
knowingthatwhattheywillpayyoubarelycoverscosts.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatbid
manipulationisabarrier.Hesaid,Sameasbidshopping.IthinkthatCaltransknowswhothey
wanttouseandmanipulatespecsandrequirementstomakeitfit.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
bidmanipulationisabarrier.Shesaid,Alotoffirmsunderbidonpurposeknowingthelowbid
getsthejob.Thentheymakeupforitwithchangeorders.Howisthisnotfraud?
AsmallbusinessownerandrepresentativeoftheCaliforniaSmallBusinessAssociation
[IntervieweeSM#4]reported,Twoyearsagowewerehavingproblemswiththesebigprimes
biddingbelowcost.Wegotthelossleaderlawputintoprocurementlawwhereeverybidthat
goesoutisrequiredtohavethelossleaderverbiagewhichsaysyoucantsellbelowcostinthe
StateofCalifornia.Thatsbeenalawthatsbeenonthebookssincethe50s,butweactuallygot
themtorequireittobeputonsupposedlyallstateprocurement.IntervieweeSM#4added,We
werefindingthattheywerebiddingbelowcostandthendooverruns.Oncetheressomebody
broughttotaskanddebarreditshowsthatifyoucontinuetodothis,itsgoingtohurtyou.
Whentalkingaboutunfairpracticesonthepartofaprimecontractor,IntervieweeSM#12,the
HispanicAmericanownerofaDBEcertifiedhighwaycontractingfirm,said,Theresnotmany
DBEsthataregoingrunaroundtosueacontractorforasmalljob,spendalotofmoneyover
somethingtheymayneverwin,IntervieweeSM#17disagreed,sayingthathewasawareof
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE71

manylargeDBEsthatsuedprimecontractors,andthesamecompanieswouldcallthemback.
Sometimestheguythatmakesalotofnoisegetsthegoodies.IntervieweeSM#1,aHispanic
contractorandrepresentativeoftheHispanicContractorsandSuppliersAssociationsaidthatno,
smallbusinesseswouldtypicallynotchallengeprimecontractorsincourt.Weresmall
businesses,wereveryconservative,weregoingtowatchwhatwesay.IntervieweeSM#16,the
femaleownerofanengineeringfirmagreedthatsubcontractorsareveryreluctanttotakeany
actionsagainstprimecontractors.
Someintervieweesindicatedthatbidmanipulationisnotabarriertopursuingbusiness
opportunitiesortheywereunawarethatbidmanipulationoccurred.Forexample,Interviewee
#2,thewhiteprincipalofanenergycompany,statedthatheisnotawareofbidmanipulationin
thisfield.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidsheisnotawareofbidmanipulation.
TreatmentbyPrimeContractororCustomerDuringPerformanceofWork.
Someintervieweesidentifiedtreatmentbyprimecontractorsorcustomersduringthework
performanceasabarriertopursuingorobtainingbusinessopportunities.Someinterviewees
reportedabuseofsmallfirmsingeneralandothersidentifiedspecificmistreatmentoffirms
basedontheraceorgenderoftheirownership.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatmanyprimestreatsubsreallybad.Hesaid,Someprimeswont
payyouwhattheyreallyoweyou.Ifyoukeepyourmouthshut,yougetpaidfaster.Ifyoudont
takeyourperdiemyouwillgetpaidfaster.Thereislittleintegritywithbigcontracts.
IntervieweePH#1,theownerofaDBEcertifiedenvironmentalconsultingfirm,reportedthathe
felthehadbeentreatedunfairly.Hesaid,Iwouldhavetosayasabusinessowner,Ifeelthere
havebeensomeveryparticularinstanceswhereIhavefeltIhavebeentreatedunfairly.Iwont
sayitwasdiscrimination,butdefinitelyunethicalpractices.Itshardtoprovediscriminationby
race,gender,orcolor,butifthereisanethicalpracticethatisnotconsistentthroughoutthe
differentdistrictsanddifferentprojects,wearedefinitelyavictimofthat.
IntervieweePH#25,thefemalepresidentofacertifiedDBE/UDBE/WBE/LBE/CBE/VFBE
resourcemanagementcompany,said,Theresareallybigsituationouttherewithclientabuses
fromprimecontractorsusingasmallfirm,andIvegottotellyouwhatthegentlemanbeforeme
said,ifIcouldgetamilliondollarsproject,Iwouldnotbecomplaining.Iwouldjustlike
somethingfor$20,000.Idbehappy.
Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertifiedenvironmental
consultingfirm,reportedthattreatmentbyprimeconsultantsorcustomersduringwork
performancecanbeabarrier.ShesaidTheprimegetsyoubecauseyoureaWBEorDBEand
thentheydontgiveyouthework.
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Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,mentioned,
Thatsalwaysaproblem,becauseinmostinstances,theseprimesalwayshavesomeonewhos
beingdisrespectfulorcallingsomebodynames.Ithappensalot.Itellmeguysthatwerenot
heretomakefriends.Itsracespecific.
Otherintervieweesreportedthattheyhadnoexperiencewithandwereunawareofbarriers
inconnectionwithtreatmentbyaprimecontractororcustomerduringtheworkperformance.
Forexample,Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertified
engineeringcompany,statedthathehasnothadbadexperiencesregardingtreatmentbyprime
consultantsorcustomers.
ApprovaloftheWorkbythePrimeContractororCustomer.
Someintervieweesidentifiedapprovaloftheworkbyprimecontractorsorcustomersasa
barrierthattheyhaveexperiencedorareawareexistsinthelocalmarketplace.Interviewee
#11,thewhitefemaleownerofafederallycertifiedwomanownedengineeringbusiness,said
thatapprovaloftheworkcanbeabarrier.Shesaid,Notnecessarilytheapproval,butwhat
jumpsoutatmeistheshorttimeframesformakingcorrections.Thisprocessshouldbeclearer
andmorecollaborativebetweenthecontractorandCaltrans.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthattherearesomebarrierstogettingapprovals.Hesaid,Getting
approvalscanbeabarrierbutwealwaysoverdesignsoitgenerallyisntaproblemforus.
However,gettingapprovalsoftenrequireshowinghowgoalsandstandardsaremetorexceeded
whichcanbetimeconsuming.Iftheyarentmetthenpaymentcanbewithheld.
Otherintervieweesindicatedthatapprovalofworkbyaprimecontractororcustomerisnota
barriertopursuingorengaginginworkForexample,Interviewee#7,theAfricanAmerican
femalecoownerofanoncertifiedconstructionandhaulingcompany,statedthatapprovalof
theworkbytheprimeorcustomerisnotabarrier.
PaymentbythePrimeContractororCustomer.
Manyintervieweesidentifiedissuesrelatedtopaymentbyaprimecontractororcustomeras
abarriertopursuingbusinessopportunities.Intervieweesdidnotsaythatminority and
womenownedfirmshadmoredisadvantagesthanothersmallbusinesses.Interviewee#4,the
AfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,mentionedthat
paymentisabigproblem,Idontknowhowtosolveit.Healsostatedthattheyoftensubmit
multipleinvoicestotheprimebeforebeingpaid.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthattimelypaymentisabarrierforherbusiness.Shesaid,Yes,slow
paymentisalwaysabarrier.Asasmallbusiness,youcanthaveaccountsreceivablefloatingout
theretoolong.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE73

Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthattherearesomeshadypracticesbysomeprimes.Hesaid,
Sometimesyouhavetodowhattheprimewantsinordertogetpaid,evenifitnotpartofthe
contract.Thereisnooversight.Thereshouldbeahotlineforidentifyingshadybusiness
practiceswithstaffdedicatedtofollowinguponthesetypesofcomplaints."
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthattimelypaymentisahugebarrier.Shesaid,Caltranssometimesmakes
progresspaymentstoourcustomersthatdontmatchourservices.Wewillsometimeshave
hugeasphaltdeliveriesthatwontbepaidforimmediatelybutwehavetopayoursuppliers.She
continued,WhydoesntCaltranspayforourserviceslikewehavetopayoursuppliers?
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompanystated,
Gettingpaidbythebrokersisalwaysdifficult.Thishappenstoalmosteveryonethat
subcontracts.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirm,mentionedthatcustomershavetermsandconditions
butthesedonotmatchwithgovernmenttermsandconditions.Hestated,Gettingpaidonour
scheduleisnexttoimpossiblebasedongovernmenttermsandconditions.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthattimelypaymentbythecustomerorprimeisalwaysabarrier.Hesaid,Slowpaying
customersmakeitdifficulttopayourdriversandemployersandtomaintainourequipment.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
timelypaymentsisalwaysabarrier.Hesaid,Paymentsseemtoalwaysbeanissue,especially
lately.Itseemslikethebiggerthecompany,themoretheydragtheirfeetinpayingyou.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
timelypaymentisalwaysabarrierforasmallbusiness.Hesaid,Itishardtomakepayroll,
maintainequipment,buynewequipmentorpayyourselfwhenyouhaveprimeswhopayyou
slowly.ItsliketheyaretryingtorunusoutofbusinessandtheyblameCaltransfortheslow
payment.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
treatmentbyprimeorcustomerisabarrier.Shesaid,Somepayslowly.Sometimesmorethan
90daysorevenlonger,thentheytrytogetyoutotakelessjustsoyoullgetsomething.
IntervieweeWT#6,thefemaleownerofaSWBEcertifiedtruckingfirm,said,Theproblemis,
themajorityofthebrokersnolongerpaytheirsubcontractorsontimebecausetheyarenot
gettingpaidontime.Wherewecouldpreviouslyexpectpaymentforourserviceswithin45to60
days,wenowhavetowait90plusdays.Smallbusinesseslikemyselfcannotwithstandthelag
andcontinuetosinkdeeperanddeeperintodebt.
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IntervieweeSM#11,thefemaleownerofaconstructionbusinessandrepresentativeofWomen
BusinessOwnersandExecutives,reportedthatpaymentofsubcontractorsbytheprime
contractorisaverybigproblem.
IntervieweeSM#21,thewhitemaleownerofanengineeringcompany,saidthatbanksdonot
lookfavorablyonhisaccountsreceivablesthatare60or90daysbecausehehasyettobepaid
bytheprime.
IntervieweeSM#8,thewhitemaleownerofanengineeringfirm,reportedthattheremaybelags
ingettingpaidforsubcontractworkbecausetheprimeconsultantwontinvoiceeverymonthfor
theservicesifthedollarsaretoosmall.Thiscanbeabigdisadvantageforsmallbusiness
becausetheystillneedtopayemployeesandoutsidevendorsontime.
Someintervieweesidentifiednobarriersinconnectionwithpaymentbyaprimecontractoror
customer.Forexample,Interviewee#25,theHispanicfemalepartnerinanoncertified
consultingfirm,saidthattheyhavebeenblessedwithrespecttopromptpayment.Inher
companyslonghistorytheyjusthadoneclientthatwasslowmakingpayments.
TheHispanicAmericanownerofanengineeringcompany[IntervieweeSM#12]reportedthat
hiscompanyisnothavingissuesbeingpaidbyprimes.Heindicatedthatmostoftheprimeshis
firmworkswitharegoodaboutthat.Hesaidhemaynotbehavingproblemsbecauseprompt
paymentisacontractrequirement.
OtherBarriers.
Impactofnewenvironmentalregulations.Asmallbusinessownerandrepresentativeofthe
CaliforniaSmallBusinessAssociation[IntervieweeSM#4]reportedontheburdenofnew
environmentalregulationsonsmallconstructionfirms.Unfortunately,morerecentlyitsnot
beenpositive,especiallywiththingsthataregoingonwiththe8032[newregulationsondiesel
engines].Everybodyshavingtogetnewequipment,ortheyessentiallycantgetnewequipment,
ortheyregoingtogooutofbusiness.Oneofourprimeboardmembersisastripingcompany
andshesdoesntknowwhatshesgoingtodo.Itsgettingbadfor[small]businessesoutthere.
HedescribedthesituationforonefirmthatmovedalloftheirtrucksoutofCaliforniaandbought
newtrucksforCalifornia.SmallbusinessesincludingDBEs,theydonthavethatkindofmoney.
Theycantevengetaccesstocapital.Bondingkillsthem.Alltheyredoingisdrivinganother
stakeintheheart.
IntervieweeSM#11,afemaleownerofaconstructionbusinessandrepresentativeofWomen
BusinessOwnersandExecutives,alsoreportedthatenvironmentalregulationsarehavinga
negativeimpactonsmallbusinesses.
Someintervieweesidentifiedadditionalbarrierstopursuingorengaginginbusiness.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,said,Beinga
small,unestablishedcompanymakesitdifficult.UntilImmoreestablished,itwillbehardtoget
morework.
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Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatthebiggestbarrieristhatbeingasmallbusinessputsyouatadisadvantage
relatedtobigfirms.TherearealotofjobsIknowIcantbidonbasedonthesizeandscope.
E.KnowledgeorExperienceConcerningAnyDiscriminationBasedon
Race,EthnicityorGenderintheLocalMarketplace
Theintervieweeswereaskedwhethertheywereawareoforhadexperienceddiscriminationin
thelocalmarketplacebasedrace,ethnicity,orgender.
Thefollowingpresentsresponsesforquestionsrelatingtothepotentialfor:
Pricediscriminationinobtainingfinancing,bonding,materialsandsupplies,orother
productsorservices;
Denialoftheopportunitytobid;
Stereotypicalattitudesonthepartofcustomersandbuyers;
Unfairdenialsofcontractawards;
Unfairterminationofcontract;
Doublestandardsinperformance;
Discriminationinpayments;
Otherpredatorybusinesspractices;
Unfavorableworkenvironmentforminoritiesorwomen;
Thegoodolboynetworkorotherclosednetworks;
GovernmentresistancetouseofMBE/WBEs;
MBE/WBEandDBEfrontsorfraud;
FalsereportingofMBE/WBEparticipationorfalsifyinggoodfaithefforts;and
Anyotherrelatedformsofdiscriminationagainstminoritiesorwomen.
NotethatthereissomeoverlapbetweentheabovelistandthetopicsinPartDabovethatwere
discussedinamoregeneralwayintheinterview.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE76

PriceDiscriminationinObtainingFinancing,Bonding,MaterialsandSupplies,or
OtherProductsorServices.
Someintervieweesreportedbeingawareoforhavingexperiencedpricediscriminationin
obtainingfinancing,bonding,materialsandsuppliesorotherproductsorservices.Interviewee
#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,reportedthat
pricediscriminationinobtainingfinancing,bonding,materials,andsuppliesorotherproductsor
servicesoccurs.Hesaiditisprobablybecausetheyworkonlywhotheyarecomfortablewith.
Theremightbereversediscriminationbecauseminoritiesworkforlessandthatmightbemore
attractiveforsome.
Interviewee#2,thewhiteprincipalofanenergycompany,statedthatpricediscriminationis
notovertbutitsthere.NotsureifSBE/MBEscanhandletherigidityofthebureaucracy.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,reportedthat
minoritiesandwomenareadverselyaffectedwhenattemptingtoobtainfinancing.Shesaidthat
shecouldnothaveobtainedfinancingifherpartnerwasnotCaucasian.Shecontinuedbystating
thatwhensheattemptedtoobtainfinancingforherfirmshewasunsuccessfulwhileher
Caucasianpartnerwasabletoaccessfinancing.
IntervieweeSM#1,aHispaniccontractorrepresentativeoftheHispanicContractorsand
SuppliersAssociation,saidthatminoritiesdonthavethesamewealthasnonminorities,which
haslastingimpactsonwhoisabletostartabusinessandthesuccessofthosebusinesses.Healso
saidthatbankingdecisionsmighttakeintoaccountraceandethnicity,andthatminoritiescould
sufferbecauseofdiscriminationinlendingdecisions.IntervieweeSM#12,theHispanicAmerican
ownerofahighwaycontractingDBE,agreedaboutthehistoryofdiscriminationinbanking.I
sawthatwithmyDadsbusinessinthelate70s,butIhaventseenitsinceIvebeeninbusiness
Anumberoftheparticipantsinthisstakeholdermeetingagreedthatwhethersomeone
lookedMexicanorcouldpassforaEuropeanwouldaffecthowtheyaretreated.
IntervieweeSM#16,thewhitefemaleownerofanengineeringbusiness,saidthatobtaininga
smallbusinessloanwascriticaltohersuccess.Sheindicatedthatshewasdeniedaloanbythe
firstbankshewenttobutwassuccessfulatthesecondbank.Shenotedthatshethoughtthefirst
bankwasmaleorientedandwasnotinterestedinmeetingwithherandlookingather
materials,butthesecondbankhadafemalemanagerwhowasmoreunderstandingofawomen
ownedbusinessseekingaloan.Shereported,Womenownedbusinessesareoftennotseenas
credible.Persistencepaysoff,butitisworktogetfinancing.
Oneintervieweesaidthathiscompanywasaffectedbecauseitwasasmallbusiness.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
pricediscriminationinobtainingfinancing,bondingmaterials,andsuppliesisaproblembutnot
becauseofraceorgender.Hesaid,ItisntdiscriminationonracebecauseImMexican.Itis
discriminationbecauseasasmallbusinessyoucantgetaccesstotheresourcesyouneedtohelp
youcompete.Youneedmoneytocompeteforthesejobs.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE77

Manyintervieweesreportedhavingnoawarenessoforexperiencewithpricediscriminationin
obtainingfinancing,bonding,materialsandsuppliesorotherproductsorservices.For
example,Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstruction
company,saidthathercompanyhadnotexperiencedanydiscriminationwithrespectto
obtainingfinancing,bonding,materialsandsuppliesorotherproductsorservices.
DenialoftheOpportunitytoBid.
Someintervieweesreportedanawarenessoforexperiencewithbeingdeniedtheopportunity
tosubmitabid.Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertified
constructionandhaulingcompany,saidthathercompanyhasbeendeniedtheopportunityto
bidbyCaltrans.Shesaid,Caltransdoesntunderstandthenatureofourworkandhasbeen
adversarialbymakingusfeellikewearedoingsomethingwrongforworkingwithinthe
parametersofthecertificationprogram.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
denialofopportunitytobidisabigproblembeingawomanownedfirm.Shesaid,Alotofthese
guysthinkawomancantknowthisbusiness.Theylookatmeandsay,Weexpectedaman,does
yourhusbanddotheworkorownthebusiness?
Manyintervieweesreportednoawarenessoforexperiencewithbeingdeniedtheopportunity
tosubmitabid.
StereotypicalAttitudesonthePartofCustomersandBuyers.
Someintervieweesreportedhavingexperiencedorbeenawareofstereotypicalattitudeson
thepartofcustomersandbuyers.Interviewee#24,theHispanicfemaleownerofanon
certifiedasphaltpavingcompany,saidthatstereotypicalattitudesonthepartofcustomersand
buyersareaproblem.Shesaid,Thereareveryfewwomeninthisbusinessand[men]dont
thinkIunderstandhowthebusinessworks.
IntervieweeSM#20,theAsianPacificAmericanfemaleownerofaDBEcertifiedconstruction
servicescompany,saidthatwhensheattemptedtoobtaincertificationthroughCaltrans,amale
Caltransstaffmemberwasskepticalofherabilitytoperformspecifictypesofworkanddenieda
numberofNAICScodesonherDBEcertification.Sheattributedthistogenderdiscrimination.
Thatsortofdiscriminationstilldoesexist.Shecontinued,Theresanexpectationthatthings
workacertainwayworkingacertainwaymighthavetodoaroundeducationlevels,might
havetodoaroundeconomics,mighthavetodowithgenderorethnicbackground,buttherestill
seemstobeanexpectationthatthingsworkacertainway.Youknowyoureawoman,youcant
bea[certaintradeoroccupation].
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,statedthattherearecustomersorbuyers
withstereotypicalattitudes.Hesaid,Theresnothingyoucandoaboutthat.Somepeopleare
prejudiced.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE78

IntervieweePH#12said,Inactualitytheawardscontinuetobethe same,becausethe
minority,theverysmallminority companiesareperceivedtonotbecapable,whetherornot
theyare,whetherornottheyreinpartnershipwithlarge reputablecompanies.
TheNativeAmericanownerofanengineeringrelatedfirm[IntervieweeSM#3]reported,Some
ofthelargerfirmsapproachusasthoughwereahobbybusinessbecauseweresmalloraDBE
.Iveownedthebusinessfor15years,anditsnotahobby.IvegottentothepointwhereI
resentthat.
Asdiscussedlaterinthisappendix,someintervieweessaidthatthereisanegativestigmato
beingDBEcertified.Forexample,Interviewee#6,theAfricanAmericandiversitymarketing
managerofanMBE/SBE/DBEcertifiedenvironmentalconsultingcompany,stated,Theviewin
themarketplaceisthatcompanieswiththatcertificationhavepoorqualificationsandarenot
qualified.
Manyintervieweesreportednoexperiencewithorawarenessofstereotypicalattitudeson
thepartofcustomersandbuyers.
UnfairDenialsofContractAwards.
Someintervieweesreportedawarenessoforexperiencewithhavingbeenunfairlydenieda
contractaward.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidthatunfairdenialsofcontractawardsdependonthebid.Hesaid,
Lowestbiddershouldwinbutyoucanbedeemedunqualifiedorfailareferencecheckwhichis
subjective.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany
mentionedthathehasseencontractsawardsthatweredeniedandhebelievesstronglythatit
hadtodowithdiscrimination.Hestated,Customershavediscriminatedagainstfriendsofmine
justbecauseoftheirrace.Itisridiculous.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
unfairdenialsofcontractawardsisaproblem.Shesaid,Itsthegoodolboynetwork.Theygive
jobstotheirfriendsanddofavorsforeachother.
IntervieweePH#19,theownerofaDBEcertifiedsmallbusiness,said,Wevesentoutnumerous
bids,Imean,anditsaverylengthyprocess.Alotof,youknow,timeandeffortgoesintosending
outthebids,andIhaventreceivedworkoffofonebidthatwesentout.EvenontheDBE
projects,Ineverevenhearbackfromtheestimatoronsomething.Ilookatthebidsummaries,
andIknowthatourpricesarecompetitive,andinmostcaseswerecomingunderonourprices,
soImnotsurewhatthecaseisthere.Ididtalktooneestimator.Shesaid,Wealreadyworked
withourgroupofpeople.Soitsalmostliketheyalreadyhavetheirownnetworkgoingon,and
theydontreallywanttodeviatefromthereiftheydonthaveto.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE79

Someintervieweesreportedadifficultyindiscerningwhetheradenialofacontractawardwas
infactunfair.Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,
saidthattherewerenoblatantdenialsofcontractaward.Sheindicatedthatexcuses,otherthan
raceandgender,suchasalackofexperienceweregiven.Shecontinuedbystatingthatthegood
olboysclubisafactoflife.
Manyintervieweesreportednoawarenessoforexperiencewithunfairdenialofcontract
awards.
UnfairTerminationofContract.
Therewerenointervieweeswhoreportedawarenessorexperienceofhavingacontract
terminatedunfairly.
DoubleStandardsinPerformance.
Someintervieweesreportedbeingawareoforhavingexperienceddoublestandardsin
performance.Interviewee#5,theSubcontinentAsianAmericanownerofanoncertified
concretepavingcompany,stated,Ihaveseenprimecontractorshavedoublestandards
regardingsubcontractorswhenitcomestorace.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
doublestandardsinperformanceisaproblemforawomanownedbusiness.Shesaid,Ihate
whenpeopleactlikeyouarestupidbecauseyouareawoman.TheylookatmelikeIcouldnt
possiblydotheworklikeamancan.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,saidin
regardstodoublestandardsthatprimesexpectthatyouwillnotbeabletodothework.They
useyouonlybecausetheyhaveto.
Manyintervieweesreportednoawarenessoforexperiencewithbeingheldtodouble
standardsinperformance.
DiscriminationinPayments.
Someintervieweesreportedbeingawareoforhavingexperienceddiscriminatorypractices
withrespecttopaymentincludingslowandnonpayment.Interviewee#4,theAfrican
AmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,statedthatdiscrimination
happenstoallcompetitors.Hestated,Allcompaniesdealwithdiscriminationinpaymentsand
thatisnotspecifictohiscompany.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,stated,Yes.I
thinkithingesbackontotheprime.IknowCaltransgivesdollarsoncethebidisawarded,and
thebiggestissueisthatprimesdontfeelliketheyneedtopassthosedollarsontotheirsubs.And
whenawhitegeneralcontractorgetsawhitesubcontractor,andthatwhitesubcontractortells
thegeneralthattheyneedmoney,theydontreallyhaveaproblemgettingit.Butwhenablack
contractorgoestothegeneralassaysweneedsomemobilizemoney,itturnsintoabigissue
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE80

whentheyrealreadygotthemoney.Acertainpercentageofthatmoneyshouldbegoingto
mobilizingthesubcontractor,butitdoesnthappen.
IntervieweePH#25,thefemalepresidentofacertifiedDBE/UDBE/WBE/LBE/CBE/VFBE
resourcemanagementcompany,said,TheproblemIhaveisespeciallyintransportation,isthat
theresnoteethintheregulationsatallthat,ifyourprimecontractordoesntpayyou,perthe
PromptPayment,therearepenaltiesthataresupposedtobeenacted.Theresnorepercussions
againstthatprimecontractor.IhavehadprojectsthatIhaventbeenpaidforyears,andwhenI
complain,IgetthrownoffthejobbecauseIcausetrouble.
Oneintervieweereportedhavingdifficultygettingpaid,butfeltthatthiswasnotbecauseof
discrimination.Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtrucking
companymentionedthatreceivingpaymentsisoftenoneofherbiggestchallenges.Shestated,
Gettingpaidontimeisdifficultbutitdoesnthaveanythingtodowithdiscrimination.
Otherintervieweesreportednoawarenessoforexperiencewithdiscriminationinpayment.
OtherPredatoryBusinessPractices.
Thereweresomeintervieweeswhodiscussedbeingaffectedbypredatorybusinesspractices.
IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedbusiness,said,
Anotherproblemistheendlessaccommodationsthatsmallerfirmshavetomakebecauseof
theirsizeandbecausetheyvebeengrantedUDBEonacontract.Thatmeansyouprovideus
withmorework,andwerenotgoingtopayyouforallofit.Itsalmostlike,wevedoneyoua
favorbybringingyouintothesecontractsbecauseyoureUDBEorDBE.
UnfavorableWorkEnvironmentforMinoritiesorWomen.
Someintervieweesreportedbeingawareoforhavingexperiencedanunfavorablework
environmentforminoritiesorwomen.Interviewee#24,theHispanicfemaleownerofanon
certifiedasphaltpavingcompany,saidthatunfavorableenvironmentsforwomenareahuge
probleminherbusiness.Shesaid,Menmakeoffensivecommentsallthetimewhenthereisa
womanonthejob.Sometimestheywonteventalktomeaboutjobs.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Iveexperiencedsomeoffensivecommentsandbehaviorfrommen,butitwasallbetween
familymemberswhowerealsoworkinginourcompany.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,reported
awarenessofanunfavorableworkenvironmentforminorities.Hesaid,Yes.Minoritiesgetthe
lowestpayratesandarethefirsttogo.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,reported
someawarenessofanunfavorableworkenvironmentforminoritiesorwomen.Hesaid,Oh,Ive
heardofthemsure.HaveIbecomeavictimofthem?Theywouldntletmeknow.Itsallthings
saidbehindcloseddoors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE81

IntervieweePH#24,thefemalepresidentofaUDBE/WBEcertifiedfirm,statedthatatarecent
workshopheldbyCaltransaspeakerpresentingonhowtodobusinesswithCaltranssaidall
thosepioneerswhomettheirdeathasaresultofbeingfatallyshotinthebackbyarrows
whendiscussingdemographicchangesthatoccurredintheconstructionindustryworkforceas
menandwomenretire.IntervieweePH#24said,HerclearimplicationwasthatNative
Americansareofthesortofpeoplewhowouldshootyouintheback,atrulyinflammatoryand
highlyamazingracialslur.Iwasshocked.Itookcorrectiveactionthenextdaybybringingthis
raciallyoffensiveremarktoherattentionviaemail.Itoldherhowitwasinterpreted,and
recommendedthat,ifthisexpressionisusedwithinhercompany,thattheirhumanresources
departmentneedstocorrecttheirracialsensitivityawarenesstrainingprogram.Asforme,this
remarkhasachillingeffectasIdeterminewhichcontractorsIwanttodevelopsuccessful
workingrelationships.TheimpressionIhaveisthatitwouldbealong,hardroadtotraveljustto
getrecognizedandtreatedwithrespectasavaluedenvironmentalmanagementconsultanton
anyofhercompaniesteams.
Manyintervieweesreportednoawarenessoforexperiencewithanunfavorablework
environmentforminoritiesorwomen.
TheGoodOlBoyNetworkorOtherClosedNetworks.
Manyintervieweesreportedknowledgeoforexperiencewithagoodolboynetworkor
othertypeofclosednetwork.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,reportedthatthegoodolboynetworkexistsandisa
barrier.Hesaid,Yes,therearesomegeneralcontractorswhomanipulatebids.Itsnotclearhow
theseguysmakemoneybecausetheyshopbidsandthenshowthemtotheirfriendswho
undercutbiddingprocess.Hewentontosay,Thisishowconstructionworks,guysplaygolf
together,introducethemtofriendsoffriendsandthensteerworktothem.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedthatthegoodolboynetworkexists,especiallyintheunions.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatthegoodolboynetworkisjustthewaybusinessisdone.Shesaid,
Businessrelationshipsarekeyinthisbusiness.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthegoodolboynetworkisaliveandwell.Hesaid,IfCaltrans
madethingsmoreopenandtransparentthiswouldntgoon.Thebigguyswouldntgetallthe
workifCaltransreallywantedtoeliminatethis.Thereisverylittlecompetitionandthebigfirms
dontreallycompeteorbidagainsteachother.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatthegoodolboynetworkexistsbutthatitisjustthewaybusinessisdone.
Shesaid,Imightbenave,butIdontthinkitisbasedonraceandgenderbutitisjusttheway
businessisdone.Everyoneisreluctanttobringinnewpeopletheywanttoworkwithpeople
theyknowandtrust.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE82

Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
stated,Imawarethisisaroundhardtoprovethough.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,The
goodolboynetworkisabigdealintheconstructionbusinessandweconstantlyhaveissues
withthis.Itssadbecausewedontgiveoutourpricesordoengageinthistypeofbehavior,we
arehonestwhileothersarent.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompany
mentionedthatgoodolboynetworkisoutthereallovertheconstructionindustry.Shestated,
Iknowthatwehavemissedoutonworkbecauseofthe[goodolboynetwork]butwhatcan
youdo.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmmentionedthatthishappenseverywhereinbusiness,
especiallyintheconstructionbusiness.Hestated,Itisnaturalthatcompanieswanttowork
withtheirfriends,withintheirnetwork.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatthegoodolboynetworkisaliveandwell.Itsnotwhatyouknow,itswho
youknow.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatworkoftengoesthroughclosednetworks.Hesaid,Sometimes
itswhoyouknowandnetworkingthatleadtojobs.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Iknowthatthegoodolboynetworkexists,butIgowithpeopleIknow,peopleItrust.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
goodolboynetworkisanissueforsmallbusinesses.Hesaid,Bigfirmsaretheonlyoneswho
candothebigjobsitseemslike.Imnotpartofthat[closednetwork].
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
goodolboynetworkisanissue.Hesaid,Everyoneworkswithwhotheyknowthatsthe
wayourbusinessworks.Whetheritsdiscriminationornotishardtosay.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
thegoodolboynetworkisaproblem.Shesaid,Womencantgetintotheclub.Butifyoudo
goodworkandyoucanfitinandnotcauseproblemsyoucanproveyourself.Itisnoteasy
though.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthatthe
goodolboynetworkwasafactoflifethatmadeitdifficultforDBE/MBE/WBEfirmstoget
governmentcontracts.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE83

Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,reported
awarenessofthegoodolboynetwork.Hesaid,Highdollarcontractsareawardedtothebig
contractors,andjustasmallpercentageflowsdowntosmallbusiness.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,statedthatthegoodolboynetworkisa
problem.Hesaid,Ohyes.Youcanputabigstarnexttothat.Thatsaproblem.Whoeverthe
projectmanagerforthestateorlocalgovernmentagencyis,itseemslikethesamepeople
alwaysgettheirstheygetfavoritepeopletheyalwaysgeteverything.Anybodynewdoesnt
getanything.
IntervieweeSM#3,thefemaleownerofaDBEcertifiedconstructionbusiness,wasaskedifshe
wastreatedthesameasmen.IfImsendingoveraquoteandImat$20,000andmy
competitorisat$25,000,theyrenotnoticingthatImawomanownedbusiness.Sheadded,
Whenitstartsoffthatway,thenno,IdontthinkIam[treateddifferently].Butwhenyougoto
someofthemeetings,Ithinkthatsometimesitcomesintoplay,butithasntdiscouragedmeto
stopdoingwhatImdoingandtryingtobesuccessful.Sometimesyougotthegoodolboy
mentalitywhichdoesntrecognizeawomanintheindustry.Thatdoesntalwayshappen,but
yes,ithashappened.Ijusthavetoknowthatgoinginandrecognizewithcertaincontractors
thatIknowthatthatsthewayitisIthasplayedapart.
IntervieweeSM#16,awhitefemaleownerofaDBEcertifiedengineeringfirm,reported,Often
womenorminoritiesareleftoutoftheboardroom.Shewentontogiveexamplesoftheimpact.
Figuringouthowtoreadacontractisoftenlefttotheprincipals.Withoutmentoring,thisputs
theinexperiencedbusinessownerinaweakerpositionduringnegotiations.
Someintervieweesindicatedthattheyhadnoknowledgeoforexperiencewithagoodol
boynetwork.Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertified
engineeringcompany,statedthatthegoodolboynetworkisnotapparentinthelocal
marketplace.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthatthegoodolboynetworkdoesntoccurintheir
typeofwork.Hestated,Ourreputationkeepsthingsgoing.
GovernmentalResistancetoUseofMBE/WBEs.
Someintervieweesreportedbeingawareoforhavingexperiencedgovernmentalresistanceto
theuseofMBE/WBEs.Interviewee#25,theHispanicfemalepartnerinanoncertified
consultingfirm,saidthatgovernmentalresistancetoDBE/MBE/WBEswasnotblatant,butthat
otherexcusesweregiventoavoidtheawardofcontracts.
Manyintervieweesreportednoawarenessoforexperiencewithgovernmentalresistanceto
theuseofMBE/WBEs.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE84

MBE/WBEandDBEFrontsorFraud.
SomeintervieweesreportedexperiencewithorawarenessoftheexistenceofMBE/WBEor
DBEfrontsorotherfraud.Interviewee#8,theNativeAmericanownerandpresidentofanon
certifiedelectricalcontractingbusiness,saidthatfrontsand/orfraudsarecommon.Hesaid,
Thishappensallthetime.Ivehadwomenapproachmesayingtheyareawomanowned
businessandneedmentocarryoutthework.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatshehasnodirectexperiencewithMBE/WBE/DBEfrontsorfrauds,butshe
said,Ihaveheardithappens.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,In
myestimation,oneoutofevery10MBE/WBE/DBEsarefrontsforotherbusinesses.Thereare
alsoothersthatarefishy.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthatMBE/WBE/DBEfrontsandfraudsareoutthere.
Hestated,WehaventhadanydirectexperiencewithMBE/WBE/DBEfrontsorfraudsbutwe
knowofsomewhohavehadissues.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Wehaveseenthisaroundhere,butIdontbelieveithadanythingtodowith
Caltrans.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmmentionedthathewasawareofcertifiedcompanies
thatwerefronts.Hestated,Therearemorefraudulentcompaniesouttherethanpeopleknow.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthat
MBE/WBE/DBEfrontsandfraudsareveryprevalent.Sheindicatedthatothercompanieshad
wantedtousehercompanynameandwouldpayher,butshewouldnothavetoperformany
work.Sherefusedtoparticipateinsuchanarrangement.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said[DBE/MBE/WBEfrontsorfraudsare]allover.Policingis
notthere.
IntervieweeWT#24,arepresentativeofanMBE/SBEcertifiedtruckingfirm,said,Large
companiesobtainingcertificationsbyappointanemployee/friendtostarttheirownpass
throughandusingtheequipmentandpersonnelofthelargecompanytoperformthejobwitha
supposedleaseagreement.Thisunderminesthepurposeoftheentireprogramandisactually
givingtheworktolargecompanesthatarenotdisadvantagedinanyway. i
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE85

AsmallbusinessownerandrepresentativeoftheCaliforniaSmallBusinessAssociation
[IntervieweeSM#4]reportedthattherewasabuseofstateandfederalsmallbusinessprograms.
Withthestateside,wehavefoundthat,alotofcontracts,theprimeshavefoundlessthan
scrupuloussmallbusinessesthattheycanusetheirnameandessentiallypaythemafeeora
commissionsothattheydonthavetoreallyuseasmallbusinessThefederalgovernment...is
runningintothesameproblems.Theyrelookingatdifferentvehiclestostopthepassthrough,
whichjustmakesitbadforallsmallbusinesses.Imwonderingifprimesarebecomingmuch
betteratfindingthesekindsofindividuals.IntervieweeSM#4added,[Untilmorecrackdown
onpassthrough]Idontthinkalotofsmallbusinessesaregoingtogetthechance.Interviewee
SM#4continued,Alotofthesmallbusinessesarenotrenewingtheirsmallbusiness
certification,becausetheyseenochance.
IntervieweeSM#4wentontoreportabouteffortstobetterenforcecommercialusefulfunction
requirementstoreducefraud.ThenextthingwedidistheCUFissue[commerciallyuseful
function]lastyearwegotthepenaltiesincreased,whichincludesdebarmentforsmall
business,forlyingontheirCUFcertification.Itwentfrom$1,000onfirstoffenseto$10,000to
$30,000,jailtime,civilpenalties,civilfines,perjurycharges,andthenallcoststhatareincurred.
Anditalsonowtiesbacktotheprimes.Sountilsomeoftheprimesandsmallbusinessesare
broughttotask,itsnotgoingtochangebecausetheydontfeelthereareanypenalties.Butwere
gettingthingsputinplacethat,downtheroad,wellseethingschange.
SomeintervieweesreportednoknowledgeoforexperiencewithMBE/WBEorDBEfrontsor
fraud.
FalseReportingofMBE/WBEParticipationorFalsifyingGoodFaithEfforts.
Someintervieweesreportedthattheywereawareoforhavehadpersonalexperiencewith
falsereportingofMBE/WBEorDBEparticipationorfalsifyinggoodfaithefforts.Interviewee
#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Iamawareof
falsereportingandfalsifyinggoodfaithefforts.Overall,thegoodfaithprogramisnotgood.
Caltransshouldlookintothisprogram.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Ihaveheardofgoodfaitheffortsthatwerenot
completedproperly.Itsnotfairtotheothercompaniesthatarecapableofdoingthework.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Primecontractors
dofalsifygoodfaitheffortsforDVBEs.Theycallyouupforinitialdiscussions,butneverfollow
through.Thentheysaytheymadegoodfaithefforts.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,reported
someawarenessoffalsereportingofDBE/MBE/WBEparticipationorfalsifyinggoodfaith
efforts.Hesaid,Theyreprobablyoutthere.DoIhaveevidenceofit?No,ofcoursenot.Theyre
toosharpforthat.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE86

IntervieweePH#4,arepresentativeofaDBEcertifiedprogramandprojectmanagement
company,said[Localagencies]haveUDBEandDBEgoals,buttheycallitmoreagoodfaith
effort.Soconsequentlytheyarenotholdingtheircontractors,whoalreadykindofrequireit,all
contractorshavetodoissendoutacoupleemailsandmaybeacoupleofphonecalls,saywe
triedtoreachout,wecouldntfindanybody.
IntervieweePH#8,thefemaleownerofaDBE/WBEcertifiedpublicrelationsfirm,said,Come
up withwaystoassureusthattheratesorinformation listedonCaltransDBEdatabaseisnot
beingmisusedby somecompaniestosimplyshowthattheymadea goodfaithefforttofinda
qualified underserved,namelyanAfricanAmerican,AsianAmerican, orwomanowned
company.Theyshouldberequiredtodo morethansimplytogothatdatabase.
IntervieweePH#25,thefemalepresidentofacertifiedDBE/UDBE/WBE/LBE/CBE/VFBE
resourcemanagementcompany,said,Now,myproblemwhatImseeingwithbeingaDBEis
whatmostpeoplecallthegoodfaitheffort.IhadtochangethatbecausewhatallofusDBE
peopleknowintheroomitsreallycalledagoodfakeeffortbecausetheytellyoutheywantyou
ontheirteam,andthentheyneveruse.
IntervieweeWT#1,aDBEcertifiedwireandcablemanufacturingfirm,stated,Goodfaithefforts
arethepracticeofjustsendingemails.Notrueoutreacheffortsaremadetodeterminematched
inneedofsuppliesfrommanufacturers.
IntervieweeWT#6,thefemaleownerofaSWBEcertifiedtruckingfirm,said,Ireceivedemails
andfaxesaskingformetobidwhichIdid.Itwassoamazingthateveryonewantedmetobid
jobsandIdid.Ittookmeawhiletounderstandthatthereasontheywererequestingabidfrom
mewastosupplytheirquotaforgoodfaitheffort.
IntervieweeWT#8,thefemaleownerofaUDBE/WBE/SBEcertifiedfirm,said,Ihave
experiencedproblemswithbeingutilizedafterIhavebeenawardedacontract.Itappearsthat
someofmyprojectshaveusedmeasaUDBE/WBEbuthavebeenunderutilized,sometimesnot
all,oncetheprojectgetsunderway.Itappearsasiftheyhavemettheirgoalbyusingacompany
likemine,butthendotheworkinhouse.
IntervieweeWT#9,thefemalepresidentofaDBEcertifiedecologicalconsultingfirm,said,My
experienceisthatprimesareactiveinsolicitingbidswithDBEfirms;however,iftheywinthe
bidwithourfirmincludedinthebidproposalthereisoftennoworkthatfollows.Overthepast
severalyearsIvehadtheunfortunateexperienceofbeingaskedtoparticipateinpreparingabid
foraprimecontractorforCaltransprojects.Afterspendingtimeandmoneypreparingthebid
materialsandprovidingacopyofourCaltransDBEtotheprime(astheyrequest)Ilaterfindout
theprimecontractorhaswonthebidwithourfirmincludedinthebidbutwearenever
contactedtoperformtheservices.Classicexampleofcontractorscontactingusforthepurpose
toobtainingourDBEcertificationwithnointentofactuallyusingourfirm.WhenIvecontacted
themtheyindicatethattheydecidedtouseanotherfirmortheyareperformingtheworkin
house.TheyseemtodothiswithimpunityandIdontknowwhat,ifanyrecourse,asmallfirm
suchasminewouldhaveinsuchcases.Asaresult,wehavebecomeveryreluctanttorespondto
bidrequestsfromprimecontractorsthatwehavenotworkedwithinthepast.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE87

IntervieweeWT#12,thepresidentofaDBEcertifiedengineeringfirm,said,Primecontractors
seekingDBEstoattaingoodfaitheffortareusuallyinthepracticeofseekingDBEsthrough
whatevermeanstheyhavetoprovethattheyareseriousinreachingout.Butthereisaproblem
ofloophole.Theseprimesareresponsibleonlytothepointofcontact,andthatiswheretheir
responsibilityofgoodfaitheffortterminates.
IntervieweeWT#21,arepresentativeofaDBEcertifiedengineeringfirm,said,Inmyopinion,
[DBEgoodfaithefforts]didnotworkatall.ThesocalledDBEoutreacheffortbyprime
consultantsisjustforshow.Evenworst,somemajorfirmshiredoutreachfirmstoseekpotential
DBEfirmsforteaming.Ihavereceivedseveralsuchnoticesrequestingforqualificationson
differentprojects,andIhavesubmittedourqualificationsinresponse.However,theseoutreach
firmsandmajorfirmshavenointentionofinterviewingandfollowinguponthequalificationsI
havesubmitted(exceptintheend,theysentnoticetoadvisethatwewerenotselected).Itisa
totalwasteofmytimeandeffort.
IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedfirm,wascriticalof
goodfaithefforts.Wehavegottenrequeststobidtwodaysbeforebidday.IntervieweeSM##
said,Itdoesntgivetimetodoanything.[DBEs]arereceivingnotificationbuttheresnotime
[tobid].Thatexistedfourorfiveyearsagoanditstillexiststoday.
IntervieweeSM#3wentontosaythatthereisacondescendingattitudeonthepartofprime
contractors.Wehavehadfirmscomein,takeourinformation,useourDBEstatusandnotnotify
us.IntervieweeSM#3continued,Primesarenotbeingasked[byagencies],whoareyour
UDBEsandshowusthedocumentation.
IntervieweeSM#6,thefemaleownerofaDBEcertifiedconstructionfirm,saidthatsometimes
thetimingofwhensomeprimecontractorscontactherforabiddoesnotleaveherenoughtime
forthebid.Werealreadydoingsearchesforprojectscomingupwearealreadydoingour
bidschedulesandhaveanidea[abouttheproject],butsometimessomethingcomesupthatwe
didntknowabout.Acontractorwillsendussomethingattheverylastminutetherehave
beenseveraltimesthatIcouldntbidonit.Shesaidthatittakesabouttwoweeksforherto
prepareabiddependingonwheretheyareortheplansfortheproject.Atleastaweek
minimum.
Oneintervieweereportedthattheywereawareoforhavehadpersonalexperiencewithfalse
reportingofMBE/WBEorDBEparticipationorfalsifyinggoodfaitheffortsinthepast,butthat
thiswasnolongeraproblem.Interviewee#30,thewhitemalepresidentofacertifiedmicro
grading,concrete,andpavingbusiness,said,Thereusedtobealotof[MBE/DBE/WBEfalse
reporting]goingon.[Primecontractors]hadtoshowagoodfaitheffort,butnowthatskindof
gone.Idontthinktheresaproblemthereanymore.
SeveralintervieweesdiscussedagencyenforcementofDBEparticipation.IntervieweeSM#13,
arepresentativeofthePortofLosAngeles,indicatedthatthePortperformsanendofcontract
audit,andifthatifalistedsubisnotusedthentheprimeisfinedwithwithholdingoffinal
paymentequalto10percentofwhattheydidnotcontractout.Thatisnotaverystrongpenalty
weatthePortbelievethatisnotthestrongestpenaltyandmaybeitwouldnotbetheentire
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE88

amountandifthatsdoneonce,thatwouldbethepenaltyandifitsdonetwice,yougoonthe
nonresponsivelist.
IntervieweeSM#14,arepresentativeofthePortofLongBeach,reportedthatthePortofLong
Beachmakesthecontractinformationknowntosubcontractorsandletsthesubsmakethe
complainttothePortorCaltrans.Thewhitemaleownerofanengineeringfirm[Interviewee
SM#8]reportedthat,fromtheperspectiveofthesub,youalmostshootyourselfinthefoot
whenyoudothat.Evenifyoudoitsilently,itcomesaround.Itsoundsveryeasy,butitsnot
businesswisebecauseyoullbeblackballedinyourindustryorspecialty.
OtherintervieweesreportednoawarenessoforexperiencewithfalsereportingofMBE/WBE
orDBEparticipationorfalsifyinggoodfaithefforts.
OtherPotentialFormsofDiscriminationAgainstMinoritiesorWomen.
Someintervieweesreportedknowledgeoforexperiencewithotherpossibleformsof
discriminationinthelocalmarketplace.Interviewee#35,theAfricanAmericanmaleownerofa
certifiedelectricalcompany,said,Thereislittlediversityintheworkersatpublicworksites.
IntervieweeSM#17,arepresentativeofAssociatedProfessionalsandContractorsofCalifornia,
saidthat,inthe1950s,unionstendedtorecruitpeopleofthesameethnicbackground(Irish,
Italians,Swedes,etc.)andthatHispanicswerenotrecruited.TherewasnoMexicanlocal,there
wasnoblacklocal.HesaidhewasthefirstHispanictoenterthelocalunionforhistrade.He
reportedthatentryintounionsisdifferentnow,butthatthehistoryoflimitedopportunitiesfor
minoritieshadalastingeffect.Togofromcarpentertoforemantoprojectmanagerandsoforth
takesmanyyearsandwerestillworkingonthat.Hereportedthatwerestillseeingthe
effectsofthat.IntervieweeSM#10,awhitemaleownerofaconstructioncompany,reported
thattheindustrydoesalotofoutreachnowtoallgroupsandhavedifficultyrecruitingnew
workersbecauseconstructionjobsareseenashardworkandlessdesirablethanother
occupations.
IntervieweePH#14,arepresentativeoftheHispanicContractorsandSuppliersAssociation,
said,Threeorfouryearsago,beforethefirst disparitystudywaspublished,thereweresome
300 membersthroughoutthestateintheHispanicContractors Association,andtodaywedont
haveanywherenearthat many,becausemanyofthemhavegoneoutofbusiness, havegone
under,declaredbankruptcybecauseofthe effectsofthediscriminationthathasbeenpracticed
againsttheminoritycommunities.
IntervieweePH#15,thefemaleownerofastripingfirm,said,[Womenare]50percentofthe
population,andtheres verylittleparticipationintheconstructionfield,of women.
Discriminationhasalwaysbeenaliveandwell, andIknowIvebeeninbusinessalongtime,but
itis stillthere.Wehavemovedalittlebit,butnotmuch.Sheadded,Ivebeendiscriminated
withsuppliers.Yougo totradeshowsandyougoupandtalktothesuppliers. Iftheydont
knowwhoyouare,theyllbarelytalkto you.Theywanttotalktosomeman,becausetheythink
hesgoingtobuymoreorsomething.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE89

IntervieweePH#16,arepresentativeoftheBRIDGEIndianTrainingTrust,said,Ijustseealotof
discrimination.Alotof contractorswilltalkoutofthesideoftheirmouth. Theyllgetthe
contractor,buttheyllneverfollowup. AndiftheydofollowupandhiresometokenIndianto
sweeporjusttodosomelaborwork,theyrenotonthe jobverylong.
Itschallengingforeverybody,accordingtoIntervieweeSM#10,thewhitemaleownerofa
constructionbusinesswhentalkingabouttheissuesaffectingconstructionbusinesses.Healso
reportedthatthesechallengeswerefeltmorebysmallbusinessesandminorityandwomen
ownedbusinesses.Healsosaid,Idontcarewhatcoloryourskin,tobeinbusinesstodayisan
absolutenightmareYesitsprobablyharderforminoritiesandwomen.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringcompany,saidthat
theultimateinsultfromprimecontractorsisnorecognitionforjobperformance.Shesaid,I
currentlyhaveaprojectwhereanotherengineersnamewillbelistedontheplansinmyplace.
Theprimedoesnotwanttheclienttoknowthatmyfirmprovidedservicesontheproject.
Someintervieweesreportednoknowledgeoforexperiencewithotherpossibleformsof
discriminationinthelocalmarketplace
F.InsightsRegardingNeutralMeasures
Intervieweeswereaskedwhethertheyhadanyexperiencewithorwereotherwisegenerally
awareofanyrace,ethnicityorgenderneutralprogramsormeasurestoassistsmall
businesses,includingminorityownedandfemaleownedbusinesses.Intervieweeswerethen
askedtoprovidetheirimpressionswithrespecttoanumberofspecificrace,ethnicityor
genderneutralprogramsormeasureslistedindetailbelow.
OverallCommentsaboutNeutralMeasures.
Someintervieweesindicatedthattheyhadnoknowledgeofanyrace,ethnicity,orgender
neutralprogramsormeasurestoassistsmallbusinesses,includingminorityownedand
femaleownedbusinesses.Someintervieweessaidthattheywerenotawareofthesetypesof
programsbutwouldbeinterestedinthemorwouldfindthemuseful.
Forexample,Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,
said,Iamnotawareofanyneutralmeasuresbutwouldbeinterestedinalotofthese
categories.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatsheisnotawareofanyspecificneutralmeasurebutsaidthatshewas
interestedinanyprogramsthathelpsmallbusinesseslikehers.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
sheisnotawareofanyprogramsthatwouldhelpthembutsaid,Anythingthatwillhelpus
identifyworkwouldbeappreciated.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE90

Otherintervieweesreportedgeneralawarenessofcertainrace,ethnic,orgenderneutral
programsormeasurestoassistsmallbusinesses,includingminorityownedandfemaleowned
businesses.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidthatmeasurestoencouragesmallbusinessparticipationarehelpfulbut
theymightlimittheireffectivenessorqualitybynotreachingoutfurthertononlocal
competition.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatheknowsthatsomeneutralmeasuresexist.Hestatedthathedoesnotparticipatein
anyoftheprograms.Healsosaiditwouldlikelybebeneficialtomultiplebusinessesifthe
numberofneutralmeasureswereincreasedandmorewidelypublicized.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidthat
trainingisabigchunkofmeasuresorprogramsthatarehelpfultosmallMBE/WBEs.She
indicatedthatjointtrainingthatincludesbrightpeoplefromsmallcompaniesaswellasfrom
governmentwouldhelpbuildnetworksandestablishbondingduringthetrainingsessions,and
thatthiswouldleadtoadifferenttypeofgoodolboynetworkthatwouldreducerisks.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,said,Iveheardofneutralmeasures.Headdedthathefeltthattheprograms
arehelpful,saying,Ifyouknowtheinsandoutsofanythingthatmakesyoufaster.
Someintervieweesreportedontheneutraleffortsimplementedbytheiragencies.Interviewee
SM#5,arepresentativeoftheSanMateoCountyTransitDistrict,reportedonhisagencyssmall
businessefforts.Theseeffortsincludeobtainingquotesfromonetothreesmallbusinessesfor
informalpurchases,facilitatinginteractionbetweenprimecontractorsandsubcontractors,
requiringvendorstoregisterontheirwebsiteasplanholders(sothattheycanbesentupdates),
registrationoffirmsinterestedinprimecontractsandsubcontracts,usingasmallbusiness
preference(upto5percentforbidsanduptofivepointsforconsultantevaluations).Theyare
alsolookingatSBEcontractgoals(notoperatedintandemwiththeDBEcontractgoals.)They
aresubmittingsucheffortsaspartoftheirsmallbusinessprogramtheyhavedevelopedfor
USDOT.
Someintervieweesknewofneutralprogramsanddidnotthinktheywerehelpful.Interviewee
#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacificAmericanfemale
ownedenvironmentalcompany,said,Oh,Imawareof[neutralmeasures].Idontthinktheyre
helpful.RightnowtheyregivingalotofcontractstotheveteransofIraqandAfghanistan.Itsall
politics.Itswhicheverwaythewindblows.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,mentionedthatIamawarethatthereareneutral
measureprogramsbeingdone,buttheyarenotveryhelpfulandhaveminimalimpactonthe
bottomline.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE91

TechnicalAssistanceandSupportServices.
Someintervieweesreportedawarenessoftechnicalassistanceandsupportservicesand
thoughttheywerehelpful.Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBE
certifiedcompany,reported,Iamawareofsimilarservices.IattendaclassatUSCthatteaches
estimating,insuranceandsafety.Ithinkthistypeofclassisveryhelpfultosmallbusinesses.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthathewasawareofprogramsbeingofferedatCal
StateFullertonthathelpsmallercompanieslearnhowtoworkwithprimes.Hestated,The
technicalassistancetrainingwashelpful.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Technicalassistanceandsupportservicesarehelpful.TheSBAhasaprogramthatprovides
technicalassistanceandsupportservices.
IntervieweeSM#17,arepresentativeofAssociatedProfessionalsandContractors,saidthat
Caltransusedtohaveaprogramoutthatwoulddotrainingofbusinessesandthatisstill
needed.
IntervieweeSM#23,arepresentativeoftheNationalSocietyofHispanicProfessionalEngineers,
saidthatitsverydifficultforlocalconstructionbusinessownerstomaketheleapfromlocal
andsmalltothesizeandcomplexityoftheworkthatgoesonatthestatelevel.Hesaidthat
thereneedstobemoreassistancebystateandlocalagenciestohelpthesefirms.
Someintervieweesreportedawarenessoftechnicalassistanceandsupportservicesanddid
notthinktheywerehelpful.Interviewee#30,thewhitemalepresidentofacertifiedmicro
grading,concrete,andpavingbusiness,saidthathewasawareofgovernmentprogramstohelp
contractorsinsubmittingbids,butthathiscompanydidnotfindthemparticularlyhelpful.
Otherintervieweesreportedthattheywereunawareoftechnicalassistanceandsupport
servicesforsmallbusinesses.Forexample,Interviewee#15,theHispanicAmericanoffice
managerofaSBE/DBEcertifiedconcretecompany,statedshewasnotawareoftechnical
assistanceprogramsbutthiswouldbehelpfulformeandtheadministrativeassistant.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
saidthattechnicalassistancewouldbehelpfulbecausethereisaneedforbettereducation
aboutthistypeofsupporthowtokeepyourbusinessrunning.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthese
serviceswoulddefinitelybehelpful.Smallbusinessesneedhelpinknowingtheropesand
supportforallthethingsittakestogrowasmallbusiness.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthattechnicalassistanceandsupportserviceswouldbehelpfultoa
businesssothatyoucouldfocusongettingqualityworkdone,notonpaperwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE92

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthattechnicalassistanceinitiativeswouldbehelpfulforsmallbusinesses.Shesaid,
Clarificationofthemanyformswouldbehelpful,orjustdontmakethemsocomplicatedinthe
firstplace.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthattechnicalassistancewouldbeusefultoanysmallbusinesses.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,IhaveheardofthesebutIhavenotattendedanyofthese.Ithinktheywouldbehelpful.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
assistancewithbiddingwouldbehelpful.Hesaid,Justhavinghelpunderstandingwhatsout
thereandhowtobidwouldbehelpful.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
technicalassistancewouldbehelpful.Hesaid,Yes,itwoulddefinitelyhelp.Icandomostofthis
myselfbutittookmealongtimetolearnhow.Itwouldhavebeenniceupfronttohavesome
assistancewhenIstartedmycompany.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthatassistance
preparingbidsaccordingtotheunitofmeasurewouldbehelpful.
Otherintervieweesindicatedthattheprovisionoftechnicalassistanceorsupportservices
wouldnotbebeneficialtosmallbusinesses.Interviewee#16,thewhitemalevicepresident
andcoownerofawomanownednoncertifiedpowerandcommunicationconduitfirm
mentionedthathewasnotawareofthesetypesofservicesbeingoffered.Hestated,Idont
knowthatthesewouldbethathelpful.IuseQuickBooksandeverybodyshouldbeabletodo
that.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,indicatedthat
programsorinitiativesfortechnicalassistanceandsupportservicesarenotneeded,becausehe
designshisownprogramsandishappywiththem.
OnTheJobTrainingPrograms.
Someintervieweesreportedawarenessofonthejobtrainingprogramsavailabletosmall
businessesandthoughttheywouldbehelpful.Interviewee#21,thewhitemaleownerofa
DVBEcertifiedhighwayconstructioncompany,stated,IhaveheardofthesebutIhavenot
attendedanyofthese.Ithinktheywouldbehelpful.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,indicatedthat
hewasfamiliarwithatrainingprogramfordevelopmentofaLeadCompliancePlan,andfeltthat
washelpful.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE93

Otherintervieweesreportedthattheywerenotawareofanyonthejobtrainingprograms
availabletosmallbusinesses,butthoughttheywouldbehelpful.Forexample,Interviewee#1,
theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,saidthatheis
notawareofonthejobtrainingprograms.However,hesaid,These[onthejobtraining
programs]wouldbehelpfulbecauseactualworkisthebestwaytolearn.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidheisnot
awareofanybutwouldbeinterested.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Iam
notawareofthisprogrambutitwouldbehelpful.
Otherintervieweesdidnotthinkthatonthejobtrainingprogramswouldbebeneficialto
smallbusinesses.Interviewee#5,theSubcontinentAsianAmericanownerofanoncertified
concretepavingcompany,stated,Idontthink[onthejobtraining]wouldbehelpfultome .
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidsheisnotawareofanyonthejobtrainingprogramsbutdoesnotknow
howhelpfultheywouldbe.
Mentor/ProtgRelationships.
Someintervieweesreportedthattheywereawareofmentor/protgprogramsavailableto
smallbusinessesandthoughttheywouldbehelpful.Interviewee#21,thewhitemaleownerof
aDVBEcertifiedhighwayconstructioncompany,stated,IhaveheardofthesebutIhavenot
attendedanyofthese.Ithinktheywouldbehelpful.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,saidhehadexperiencewithmentor/protg
relationships.Hesaidthathismentorgaveuponthepaperworksnowstormand,therefore,did
notgetcertified.Heexplainedthatsincehismentorwasnotcertified,Iwasnotcompliant,andI
haventgottenanyworksince.
IntervieweePH#1,theownerofaDBEcertifiedenvironmentalconsultingfirm,said,Iama
memberofCalmentorsProgram.Itsaniceprogram.Formycompanyitself,ithasnotyetbared
anyfruits.Inthelongrun,itmay.SoCalmentorsProgramisagoodprogram.
IntervieweeSM#15,afemalebusinessownerandrepresentativeoftheSouthernCalifornia
ContractorsAssociation,saidthatmentorprotgrelationshipshelpbothpartnersinthe
relationshipandtheindustryatlarge.Sherecommendedexpansionoftheseprograms.
SomeintervieweesreportedanegativeexperiencewiththeCalmentorProgram.Interviewee
PH#21,theownerofaDBEcertifiedsurveyingcompany,said,Iheardsomebodymentionthe
CalmentorProgram.ThatsanotherthingIparticipatedinorattemptedtoparticipateinwhenI
gotmycertification.Isubmittedthepaperwork,Isubmittedapplications,Isentemails,Ileft
phonemessages,anditwastotallynonresponsivetome.Icontactedthementorthatwas
assignedtomyparticularfieldandgotnoresponse.Ididthistwoorthreetimes.Aboutoncea
year,IgetaninquiryfromtheCalmentorProgramaskinghowtheCalmentorProgramishelping
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE94

me.Thefirsttime,Irespondedwithallthepoliticallycorrectphrasesandwhatnotandgotno
response.Thesecondtime,IIwasprettyclearininmylackofbeingabletoreceiveany
kindofmentoring.Itwasprettywordedstrongly,IguessIllputitthatway.Igotnothing
back.Andjusttheotherday,Igotanothermessage,howarewedoingintheCalmentorProgram
foryou,andIrespondedagainthatitsbeentotallyunresponsivetome,thatitdoesntdomeany
good,andithasntdonemeanygood.
IntervieweePH#22,theownerofanequipmentrentalcompany,said,Iheardmentionofthe
CalmentorshipProgram.TheymentionedtheCalmentorshipProgram,sowhentheworkshop
finished,I,youknow,wenttogospeaktosomebodyabouttheCalmentorshipProgram.They
said,Well,okay.Whatkindofbusinessdoyoudo?Isaid,Wewilldowehaveanequipment
rentalcompany.[They]said,Oh,okay.Weresorry,theCalmentorshipProgramisreally
servicesforengineers,forcontractors.Sinceyoureprovidingjustrentals,andwereallycant
helpyou.SoIthought,well,okay.Thatskindofadisadvantage.SoImnotsureifthats
somethingthatyouguyscanmaybeimproveorchange,because,youknow,havingamentorfor
us,eventhoughitsyouknow,werenotengineersoranythinglikethatorconsultants,it
wouldbe,youknow,verybeneficialtous.
TheAsianPacificAmericanownerofanengineeringfirmandrepresentativeoftheAmerican
CouncilofEngineeringCompaniesCalifornia[IntervieweeSM#2]said,TheCalmentorprogram,
weparticipatedinthatoverthepasttwoorthreeyears,butithasntreallyworked.Wecouldnt
findamentor,therearentenoughmentorsaround.Thatstheproblem.
Manyotherintervieweesreportedthattheywereunawareofstatelevelmentor/protg
programsavailabletosmallbusinesses.Somethoughtthatsuchprogramscouldbehelpful.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Iam
notawareofmentor/protgprogramsbuttheywouldbehelpful.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidpairingupsmallbusinesseswithlargerbusinessesmightbehelpful.
IntervieweePH#2,theownerofaUDBE,said,Thementor/protgprogramwouldbean
exceptionalprogramtohelpespeciallyunderutilizedDBEsbygivingthemapastperformance
andgettingonthecontracts,buteveryonewantstheDBEtohavepastperformancealready.To
me,howcanyougetthepastperformanceifnooneisallowingyoutogetonthecontract?
Otherintervieweesdidnotthinkthatmentorprotgprogramswouldbebeneficialtosmall
businesses.Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcrete
pavingcompany,stated,Mentor/protgrelationshipswontprovideanythingtome.
Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloadingcompany
stated,Imnotawareofthis,butIdontthinkthiswouldbehelpful.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidhedidnot
believethatmentor/protgrelationshipswerehelpful.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE95

JointVentureRelationships.
Oneintervieweereportedthattheywereawareofjointventurerelationshipsavailableto
smallbusinesses.Interviewee#5,theSubcontinentAsianAmericanownerofanoncertified
concretepavingcompany,stated,Wecurrentlyhavejointventuretypesofagreementswith
othervendors,butitwouldbeusefulifthisinformationwasmorewidelyavailabletoother
smallbusinesses.
Otherintervieweesreportedthattheywereunawareofjointventurerelationshipsavailable
tosmallbusinesses.Forexample,Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBE
certifiedcompany,reported,Iamnotawareofanyjointventureprogrambutitwouldbe
helpfulandagreatopportunityforsmallbusinesses.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatjointventurerelationshipscouldbeveryusefulinhelpingsmall
companiesidentifywheretheyfitintobigCaltranscontracts.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatjointventuresandteamingupwithothercompanieswouldbehelpful.He
said,ThisiswhyIgotmycertification,soIcouldteamupwithotherlargefirmsdoingbusiness
withCaltrans[andotheragencies].
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatjointventurerelationshipswouldbehelpful.Hesaid,Yes,ifwe
couldteamupwithotherfirms,wewouldbeabletocompetewithbiggerfirms.
Otherintervieweesreportedthatjointventurerelationshipswouldnotbebeneficialtosmall
businesses.Interviewee#20,thewhitemaleownerofamajorityowneddemolitionandloading
companystated,Imnotawareofthis,andIdontthinkthiswouldbehelpful.
FinancingAssistance.
Mostintervieweesreportedthattheywereunawareoftheavailabilityoffinancingassistance,
butthoughttheywouldbehelpful.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,saidheisnotawareofanyfinancingassistancelikeloan
guaranteesandinventoryfinancingbutindicatedthatthesetypesofprogramswouldbehelpful.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
mentionedthatheisnotawareofanyfinancingassistanceprograms.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
indicatedthatfinancingassistancewouldbehelpful.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,said,Iamnot
awareof[financingassistance],butitwouldbeveryhelpfulbecausebanksandsuppliersare
veryrestrictiveforsmallbusinesses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE96

Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
statedthatfinancingassistanceprogramswouldbeuseful.Hestated,Mostbusinessesneed
financialassistancefromtimetotime.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatfinancingassistancewouldbeagreathelptosmallbusinesses.He
said,Smallbusinessesneedhelpwithequipment,makingpayroll,andbuyingsupplies.You
knowthemoneywillgetpaidbutittakesawhilesometimeswhichmakesithardtoget
financing.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
financingassistancewouldbehelpful.Hesaid,Thekeyinthisbusinessisaccesstomoneyso
youcangetequipmenttocompete.Youneedmoneyforfuel,insurance,wagesbecause
sometimesyoudontgetpaidquickly.Youhavetohavemoneytobridgethosegaps.
Oneintervieweereportedthattheprovisionoffinancingassistancewouldnotbebeneficialto
smallbusinesses.
BondingAssistance.
Manyintervieweesreportedthattheywereunawareoftheavailabilityofbondingassistance,
butthoughtitwouldbehelpful.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusiness,saidheisnotawareofanybondingassistancebutsaid,
bondingisexpensivesoanysupportwouldbewelcome.
Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
mentionedthatheisnotawareofanybondingassistanceprograms,but,mentionedthathe
wouldfindbondingassistanceprogramsuseful.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,wasnotawareofbondingassistance.Shedid
mentionthatbondingassistancewouldbehelpfulasmanysmallbusinessesdontknowwhatit
availabletothem.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
bondingassistancewouldbehelpful.Hesaid,Wehavepeopleandequipmenttodothework
butifyoucantaffordthebondthenthatisahugebarrier.
Otherintervieweesdidnotthinkthattheprovisionofbondingassistancewouldbebeneficial
tosmallbusinesses.Interviewee#20,thewhitemaleownerofamajorityowneddemolitionand
loadingcompanystated,ImnotawareofthisandIdontthinkthiswouldbehelpful.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,indicatedthat
bondingassistancewouldnotbehelpful.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE97

AssistanceinObtainingBusinessInsurance.
Mostintervieweesreportedthattheywereunawareoftheavailabilityofassistancetoobtain
businessinsurance,butthoughtitwouldbehelpful.Interviewee#1,theHispanicmaleowner
ofanoncertifiedconstructionandconcretebusiness,saidhewouldbeinterestedinlearning
moreaboutassistanceinobtainingbusinessinsurance.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatassistanceinobtainingbusinessinsurancewouldbehelpful.Shesaid,The
stateshouldprovidesomebrokeringhelpthatcouldbenefitsmallbusinessesanddecrease
costs.Shecontinuedbysayingthat,Iftheyjusteliminatedtheneedtoprovidethesame
insuranceinformationoverandoveragainthatwouldbenice.Wehavetodosomuch
paperworkandanswerthesamequestionsoverandover.Whyisntthisstuffkeptonfile?
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,That
wouldbegoodifavailableduringthecompanysfirstyear.Assistanceinobtaining$2million
insurancecoveragewouldbehelpful.
Otherintervieweesthoughtthattheprovisionofassistancetoobtainbusinessinsurance
wouldnotbebeneficialtosmallbusinesses.Interviewee#16,thewhitemalevicepresident
andcoownerofawomanownednoncertifiedpowerandcommunicationconduitfirm
mentionedthathiscompanyhashadnoproblemsgettinginsuranceandthatthiswouldntbe
thatusefulofaprogram.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Assistanceinobtainingbusinessinsuranceisnotnecessary;however,itwouldbehelpfulifthe
$5millionumbrellainsurancecoveragewasreduced.
AssistanceinUsingEmergingTechnology.
Someintervieweeswereawareoftheprovisionofassistanceinusingemergingtechnology
andthoughtitwashelpful.Forexample,Interviewee#20,thewhitemaleownerofamajority
owneddemolitionandloadingcompanystated,Ihaveusedassistancethathelpedwith
electronicbiddinganditwasveryhelpful.
Otherintervieweesreportedthattheywereunawareoftheprovisionofassistanceinusing
emergingtechnology,butthoughtitwouldbehelpful.Anumberofintervieweespointedout
potentialassistancewithelectronicbidding.Interviewee#7,theAfricanAmericanfemaleco
ownerofanoncertifiedconstructionandhaulingcompany,saidsheisnotawareofany
assistanceinusingemergingtechnology.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthatthis
wouldbehelpful.Hesaid,Helpwithcomplexelectronicbidswouldbenice.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidanyassistanceinusingemergingtechnologywoulddefinitelybehelpful
becausewedonthavealotofexperienceinelectronicbidding,searchingforavailablebidson
line,orjustusingcomputers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE98

Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatassistanceinusingemergingtechnologywouldbehelpful.Shesaid,
ElectronicbiddingwouldbehelpfulbutunlessCaltransiswillingtositdownandreally
understandtheirownbiddingprocess,justmakingitelectronicwouldntbeabenefit.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthatanyassistancewithemergingtechnologywould
behelpfulformanysmallerbusinesses.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,said,Helpwith
electronicbidsforcomplexbidswouldbenice.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,saidwith
respecttoassistanceinusingemergingtechnologybeingprovidedforWBE/MBEs,thatwould
beideal.Sheindicatedthatinformationtechnologytrainingisrequiredthroughoutonesca reer.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Thatwouldbereallybeneficial,because
itsprettychallengingwhenyougetonthesegovernmentwebsites.
Someintervieweesdidnotthinkthattheprovisionofassistanceinusingemergingtechnology
wouldbenecessaryorbeneficial.Interviewee#31,thewhitemaleowner/operatorofa
certifiedsmallmajorityownedroadgradingbusiness,feltthatassistanceinusingemerging
technologywouldnotbehelpful.Hesaid,Imnotafan.Paperisgood.Theylltrainyou;theyll
changeit.
OtherSmallBusinessStartUpAssistance.
Most interviewees reported that they were unaware of startup assistance for small
businesses,butthoughtitwouldbehelpful.Forexample,Interviewee#25,theHispanicfemale
partnerinanoncertifiedconsultingfirm,saidthatprovidingsmallbusinessstartupassistance
orWBE/MBEswouldbewonderful.
Afewintervieweesthoughtthattheprovisionofotherbusinessstartupassistancewouldnot
bebeneficialtosmallbusinesses.
InformationonPublicAgencyContractProceduresandBiddingOpportunities.
Someintervieweesreportedthatexistinginformationonpublicagencycontractprocedures
andbiddingopportunitieswashelpful.Interviewee#17,thewhitemaleestimatoratanon
certifiedwomanownedtruckingcompany,saidthatthisinformationalreadyexistsandthat
contractingproceduresandbiddingopportunitiesarewelldocumented.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Ihaveattendedmeetingsdiscussingbiddingopportunities.Ifoundthisprogramtobe
helpfulandIthinkitwouldbehelpfultoothers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE99

Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthatthe
existingweeklypublicationonCaltransbiddingopportunitiesishelpful.
Someintervieweeswerenotawareofinformationonpublicagencycontractproceduresand
biddingopportunities,butthoughtthatthiswouldbehelpful.Interviewee#3,thewhitemale
ownerofaconcreteandconstructioncompany,said,Iwouldlovetogetinformationonwhere
theseexist.Anyonlineorothersupportwouldbehelpful.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatanyinformationonpublicagencycontractingproceduresand
biddingopportunitieswouldbehelpful.Anythingthatstreamlinestheirprocesswouldbe
helpfultous,shesaid.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthereshouldbeworkshopsforsmallbusinessestohelpthem
understandthecontractingproceduresandbiddingopportunities.Hesaid,Caltransshouldhelp
peoplewithnotificationofopportunities.Theycoulduseemailorothernotificationstoletthem
knowaboutopportunitiesbygeography.Theyarentgearedtowardssmallcontractors.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatinformationonpublicagencycontractingproceduresandbidding
opportunitieswouldbehelpful.Shesaid,Theyshouldworkwithusinsteadofagainstusbefore
theycreatethebids.Thebusinesscommunitycanreallyhelpshapethebidsinapositiveway.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidheisawarethatbiddingopportunitiesareonlinebutindicatedthatitwouldbe
helpfultoknowwhatopportunitiesareavailablethatIamqualifiedtobidonandhelpwiththe
contractingprocedures.Hesaid,Theyshouldmakeitmorerelevanttosmallbusinessessothat
itisclearwhatyouarequalifiedtobidon.Rightnowitseemsthateverythingisgearedtobig
companies."
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
additionalinformationoncontractingproceduresandbiddingopportunitieswouldbehelpful.
Hesaid,IveseentheCaltranswebsiteanditdoesntseemthatcomprehensive.Itwouldbe
helpfulforbetterguidanceandinstructionsonhowwecouldcontractdirectlywithCaltrans.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,I
wouldliketolearndetailsonwhethersubsareincludedinprimesbids.
OnlineRegistrationwithaPublicAgencyasaPotentialBidder.
Someintervieweesreportedthattheywereawareofopportunitiestobecomeregisteredto
receiveinformationasapotentialbidder.Interviewee#12,thewhitefemaleownerofa
WBE/SBE/DBEcertifiedcompany,reported,Iamawareofonlineregistrationanditishelpful.
WedothiswithCaltrans.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE100

Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Ihaveusedtheonlineregistrationopportunitiesforvariousbids.Ifoundthisoptionto
behelpfulandIthinkitwouldbehelpfultoothers.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Ivedoneonlineregistrationandthen
theynevergetbacktome.Heindicatedthatitwouldbehelpfulifitsdonewellandifit
actuallyworks.
Other interviewees reported that they were unaware of opportunities to become registered
withanagencyasapotentialbidder,butthoughtthatthiswouldbehelpful.Interviewee#18,
the African American male owner of a certified DBE telecommunications company, said that
online registration with a public agency is helpful but that it would be more helpful if it was
easiertotargetwhatyouarequalifiedtobidon.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
onlineregistrationwithpublicagenciesasapotentialbidderwouldbehelpful.Hesaid,Anyway
thatwecanfindoutaboutupcomingbidsthatwequalifyforwouldbehelpful.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
onlineregistrationwithpublicagenciesasapotentialbidderwouldbehelpful.Shesaid,Any
waywecangetournameoutthereandfindoutaboutworkwouldbehelpfultous.
HardCopyorElectronicDirectoryofPotentialSubcontractors.
Someintervieweesreportedthattheywereawareofhardcopyorelectronicdirectoriesof
potentialsubcontractors.Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBE
certifiedcompany,reported,IamawareofthisbecauseoftheworkwedowithCaltrans.Ilike
beingabletolookupothersubcontractors.
Otherintervieweesreportedthattheywereunawareofhardcopyorelectronicdirectoriesof
potentialsubcontractors,butthatthatthiscouldbebeneficialtosmallbusinesses.Interviewee
#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,saidthathard
copyorelectronicdirectoriesofpotentialsubcontractorswouldbehelpful.Hesaid,Thiscould
helpusidentifypotentialpartners.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatelectronicdirectoriesofpotentialsubcontractorsmightbe
helpful.Hesaid,Ithinkallofthisinformationispaperbasednow.Havingitonlinewouldbe
helpful.
Oneintervieweethoughtthattheprovisionofahardcopyorelectronicdirectoryofpotential
subcontractorswouldnotbebeneficialtosmallbusinesses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE101

PreBidConferencesWhereSubcontractorsCanMeetPrimeContractors.
Someintervieweesreportedthattheywereawareofprebidconferencesthatallow
subcontractorstomeetprimecontractors,andthoughttheywerehelpful.Interviewee#2,the
whiteprincipalofanenergycompany,stated,Iknow[prebidconferences]existandthatthey
arehelpfultosomefirmsdependingonthecontractandtheirpreviousrelationships.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidprebid
conferencesarehelpful,buttheyaretimeconsuming.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Wehaveattendedafewprebidconferencesandtheyhavebeenhelpfulto
identifypotentialpartners.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatshehashadexperiencewithmanypre
bidconferencesandthattheyareagreatplaceforsubstomeetprimes.Wehavemademany
contactsatthesemeetings.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatCaltransshouldhavemoreprebidconferences.Hesaid,Thereshouldbemoreprebid
conferenceswherewecanteamupwithpartners.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,stated,WehaveattendedprebidconferenceswithCaltransand
thesehavebeenveryhelpful.Iencourageotherstoattendthesetypeofconferences.
Someintervieweesreportedthattheywereawareofprebidconferencesthatallow
subcontractorstomeetprimecontractors,anddidnotthinktheywerehelpful.Interviewee
#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,saidhehas
attendedsomeprebidconferences,butnovendorfairs.Heindicatedthattheyaretime
consuming.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatprebidconferencesarenotreallyhelpful.Shesaid,Thesetakealotoftime
andexpenseandCaltranswontreallytellyouanything.Theydontreallycollaborateorprovide
goodinformation.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
sheisawareofprebidconferenceswheresubsmeetprimes.Shesaid,Ivebeentosomepre
bidmeetingsbuttheyaretimeconsumingforasmallbusiness,especiallywhenyouarent
guaranteedyoucanevenbid.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,inresponseto
thehelpfulnessofprebidconferenceswheresubsandprimesmeet,said,No.Ihatethose.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE102

Otherintervieweesreportedthattheywereunawareofanyprebidconferences,butthought
theycouldbehelpful.Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertified
company,reported,Iamnotawareofprebidconferencesbutitsoundslikeitmightbehelp ful.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthatshewasnotawareofprebidconferenceswheresubscanmeetprimes,but
shethoughtthatitwouldbehelpful.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatprebidconferenceswheresubscanmeetprimeswouldbehelpfulforhimto
identifypartneringopportunities.Hesaid,ThatiswhyIgotmycertificationsoIcould
marketmyselftobiggercompaniesandgetapieceofbiggercontracts.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,Ihaveattendedprebidconferencestomeetprimes.Ifoundthesemeetingstobehelpful
andIthinktheywouldbehelpfultoothers.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
prebidconferenceswheresubscanmeetprimeswouldbehelpful.Hesaid,Gettingsmallpieces
ofjobsfrombigfirmsisfinebutweneedhelpingettingpartneredwiththerightpeople.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,saidthatitwouldbe
helpfultohaveprebidconferenceswheresubsandprimesmeetandlistsofplanholdersor
otherlistsofpossibleprimebiddersaredistributedtopotentialsubcontractors.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,saidthathehadneverattendedaprebidconference,butfeltthattheywouldbe
helpful.
Otherintervieweesdidnotthinkthatprebidconferencestoallowsubcontractorstomeet
primecontractorswouldbebeneficialtosmallbusinesses.Interviewee#7,theAfrican
Americanfemalecoownerofanoncertifiedconstructionandhaulingcompany,saidthatpre
bidconferencesarenothelpfulbecausetheyaretootimeconsumingformostsmallbusiness
owners.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatprebidconferenceswouldbehelpfulbutthattheyshouldnotbe
limitedtohelpingsubsmeetprimes.Heasked,Whycanttheyhaveconferencesgearedfor
smallbusinessestohelpthemidentifyopportunities?
DistributionofPlanholdersListsorOtherListsofPotentialPrimeBiddersto
Subcontractors.
Someintervieweesreportedthattheywereawareofdistributionliststosubcontractorsof
planholdersconcerningpotentialprimebidders,andthoughttheywerehelpful.Interviewee
#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Iamawareof
planholderslistsbecauseofCaltransproject.Thesearehelpfulaswedeterminewhotobid
with.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE103

Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,They
alreadyhave[planholderslists].Itisusefultoknowwhototalkto.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,mentionedthattherearewebsitesandtrainingfromcontractorsassociations.He
stated,Itisveryhelpfultoknowwhoisbidding.
Otherintervieweesreportedthattheywerenotawareofanydistributiontosubcontractorsof
planholderslistsorlistsofotherpotentialprimebidders,butthoughttheywouldbehelpful.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatdistributionoflistsofplanholdersorotherlistsofpossibleprimebiddersto
potentialsubcontractorswouldbehelpful.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,said,Ithinkitshelpful.Idothinkthatitencouragesbidshoppingalittle
more.Youregoingtobefiringyournumberallovertheplacenotsecureanymore.
Someintervieweesthoughtthatthedistributiontosubcontractorsofplanholderslistsorlists
ofotherpotentialprimebidderswouldnotbebeneficialtosmallbusinesses.Interviewee#20,
thewhitemaleownerofamajorityowneddemolitionandloadingcompanystated,A
planholderlistwouldnotbethathelpfulformybusiness.Ialsoworkwiththesameprimes
almostallthetime.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,indicatedthat
shefeltthedistributionofplanholderlistsorotherlistsofpossibleprimebidderstopotential
subcontractorswasapartofthebiasandreflectedacontrolofinformation.
OtherAgencyOutreach.
Someintervieweesreportedthattheywereawareofagencyoutreachandotheroutreach.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Wehavegonetovendorfairsandmetafewpotentialpartners.This
opportunityshouldbeusedbyothersmallbusinesses.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidtheyhavedonesomevendorfairsbutwasnotsurehoweffective
theywere.Hesaid,Wevedoneafewvendorfairswherewebroughtsometruckstoattract
hiringbutImnotsurehowworthwhiletheywere.Maybeiftheydefinedwhatthebenefitwasit
wouldbehelpful.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,indicatedthatagencyoutreachcanbehelpful.Sheindicatedthatsheisa
memberoftheCaliforniaTransportationAssociationandthatshegoestosomeoftheirmeetings
tofindoutwhatisgoingonintheindustry.Shesaid,Theyhavealotofmeetingsandsummits
thathavebuyersandotherpotentialcustomers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE104

IntervieweePH#20,theownerofaUDBEcertifiedconstructionmanagementfirm,said,Were
prettyexcitedtobefinallycertifiedasadisadvantagedbusiness,andbeingaminority,we
automaticallybecomeUDBEaswell.Ourchallengeistobeinvolvedinopportunitieswherewe
cangettoseetheprimesfacetoface,gettolearnaboutupcomingprojects,formarelationship,
lettheprimesknowwereweexist,wehavethefollowingtypeofstaff,andmore
opportunitiesinthesensewhereconsultantslikeuscancomeinandhearwhatCaltransplansto
dointhefuture,sixmonths,ayear,twoyears,threeyears,andthenalsoallowusaan
outreachtypeofactivitywherewereminglingwiththeprimes,weretryingtolearnwhothese
primesare,whattypeofprojectsdotheyspecializein,andiftheyllhaveaneedtouse
companieslikeus.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatagencyoutreachwouldbehelpfulaslongastheyarenttootime
consuming.Hesaid,Smallbusinessesdonthavealotoftimetochasethesetypesofevents.
Oneintervieweesaidthathewasnolongerparticipatinginoutreachactivitiesbecausehedid
notfindthemuseful.IntervieweeSM#3,theNativeAmericanownerofanengineeringrelated
business,said,Imnotparticipatingin[agencyoutreach]meetingsanymore,becauseweve
foundthattheA/Eplayersaretheonesthathavethebiggestdrums,theyhavethebusiness
developmentteams,theyhavebusinessdevelopmentofficers,theygooutandbangthedrums
louderthananybodyelseandthosearetheonesgettingthecontracts.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringfirm,said,Alotof
timesIgotothesesmallbusinessgatheringsthathaveandtheyendupbeingmoreofthemixers
IfeelliketheygivemebottledwaterandafortunecookieandGoodluck!Ireallyfeellike,asa
businessowner,therearesomanythingsthatImresponsibleforthatIneedtoknowthatI
coulduseadditionaladvice,mentorsoradditionalresources.Thatsoneofthethingsthatthe
stateandFedscanhelpusoutwith.
Theamountoftimeyoutakefromsmallbusinessestogotoprebidmeetingsandmatchmaking
meetings,thesearebigimpacts,accordingtoIntervieweeSM#20,anAsianPacificAmerican
femaleownerofaconstructionservicesbusiness.
Otherintervieweesreportedthattheywereunawareofagencyoutreach.
StreamliningorOtherSimplificationofBiddingProcedures.
Mostintervieweesreportedthattheywereunawareofanystepstakentostreamlinethe
biddingprocess.Someintervieweesthoughtthatthestreamliningorothersimplificationof
biddingprocedurescouldbebeneficialtosmallbusinesses.Interviewee#2,thewhiteprincipal
ofanenergycompany,statedthatstreamliningthebidprocesswouldbehelpfultothebusiness
communityandwouldallowformorecompetition.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Anyprogramthatsimplifiedthebiddingprocesswouldbeusefultoanysize
business.Wehavenotheardofthistypeofneutralmeasure.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE105

Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedstreamliningbidprocedureswouldbe
helpfulasmanysmallbusinessesdonthavethecapabilitytorespondtoprocurementsdueto
thedifficultyandcomplexityoftherequiredresponses.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatsimplificationofthebidprocesswouldbeofparticularinterest.The
processistoocomplexnow,shesaid.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatstreamlining/simplifyingthebiddingprocedureswouldbehelpful.Shesaid,
Eliminatetheneedtoprovidethesameinformationoverandoveragain.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatstreamlining/simplifyingbiddingprocedureswoulddefinitelyhelp.Shesaid,
Caltransdoesntunderstandwhattheyneedorwantmostofthetimewhichrequiresustrying
totranslatetheirspecifications.Thistakesalotoftime.Theyshouldworkwithustoclarify
specificationsandrequirements.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatstreamlining/simplificationofbiddingproceduresisneeded.Hesaid,Simplifying
biddingproceduresisneededforanyonetryingtogetwork.Youcanspendallyourtimeputting
bidstogetherbecausetheyaretoocomplex.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
streamliningbiddingisneeded.Hesaid,Withthewaybidsarenow,wedonthavetimeto
respondtothemevenifwearequalified.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
streamlining/simplificationofthebiddingprocesswouldhelpher.Shesaid,Alotofpublic
sectorbidshavetobebrokendownintoalotofdetail.Anywaytosimplifytheprocesswould
makeiteasierforustobid.
Someintervieweesthoughtthatstreamliningorotherwisesimplifybiddingprocedureswould
notbebeneficialtosmallbusinesses.Interviewee#4,theAfricanAmericanownerofa
DBE/MBE/SBEcertifiedengineeringcompany,statedthattheprocessisreasonablyfairand
shouldnotbechanged.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,in
responsetothequestionregardingherexperienceandawarenessandtheusefulnessof
streamliningandsimplificationofthebiddingprocedures,said,Thatisnotneeded.
SegmentingLargerContractsintoSmallerPieces.
Mostintervieweeswereunawareofanyeffortstosegmentlargercontractsintosmaller
pieces,butthiswouldbehelpful.Interviewee#1,theHispanicmaleownerofanoncertified
constructionandconcretebusinesssaidheisnotawareofeffortstobreakuplargercontracts
intosmallerpieces,buthesaiditwouldbehelpfulforbondingandinsurancerequirements.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE106

Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidheisnot
awareofthisbutitwouldbehelpful.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Breakingupcontractsformorevendorswoulddefinitelybenefitsmall
vendors.Itwouldallowformoreparticipationinpublicsectorcontracts.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatshehasnothaddirectexperiencewith
breakinguplargecontractsintosmallerpieces,butshethoughtthatoveralltheideaofbreaking
upofthecontractshasmoreprosthancons.Ithinkifitisdonecorrectlythiscouldbenefitmany
businesses.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Imnotawareofthisbut[breakingupcontracts]wouldbeespeciallyhelpful
duringthebiddingprocess.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatbreakinguplargecontractsintosmallerpiecesiskeyforsmallbusinessesgettingwork.
Hesaid,Breakingupcontractswouldgiveyouabettershotatgettingwork,especiallyforsubs
thatprovideanarrowsetofservices.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatbreakinguplargecontractsintosmallerpieceswouldbebeneficialtosmall
businesseslikehis.Hesaid,Otherwisewecantcompetewithbigcompaniesandweareonly
goingtohelpthemmeettheirquotas.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
breakinguplargecontractsintosmallpieceswouldbehelpful.Hesaid,Youcouldbreakitup
intosmallerpieces.Thereisnoreasontokeepeverythingclosedupforbigfirmsonly.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
breakinguplargecontractsintosmallerpieceswouldbehelpful.Hesaid,Theydefinitelyneed
tobreakcontractsupotherwisewecantcompetethewaythingsaretoday.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
breakinguplargecontractsintosmallerpieceswouldbebeneficialtoherbusiness.Shesaid,
Rightnow,wecantreallycompetewithbiggercompaniesonbigjobs.Iftherewerepieceswe
couldbidonthatwedowell,thatwouldbebetter.
Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,indicatedthat
thebreakingupoflargecontractsintosmallpieceswouldbebeneficialtoWBE/MBEs.Shesaid,
Contractingisnotrocketscience.Sheexplainedthatwiththeavailabilityofwordprocessing
anddataprocessingitissimplernowtohavenumeroussmallcontractsratherthanalimited
numberoflargecontracts.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE107

Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,said,
Yes,itwouldbehelpfultobreakuplargecontractsintosmallpieces.Sheadded,Itwouldalso
behelpfultoawardcontractstolocalfirms.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Breakinguplarge
contractsintosmallpieceswouldbegood.Caltransjobsaregettingbigger.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,said,Definitely,
Ithink[breakinguplargecontracts]shouldbeanobjectiveforCaltrans.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,andpaving
business,said[Breakinguplargecontracts]wouldbehuge.Thatwouldbegoodforme.
[Caltrans]likestobundleitupandmakeitsimpleforthemselves.Nowyougot[amajor
constructioncompany],orwhoever,doingthedispatchingforthem.Theresnothingsetaside
forawhiteguy.
ThefemaleownerofaconstructionbusinessandrepresentativeofWomenBusinessOwnersand
Executives[IntervieweeSM#11]saidthatbundlingofcontractshurtssmallbusinesses.
Sometimesthey[contracts]getsobigthatwecantwrapourarmsaroundthem.
BidDepositoryorotherChangestoBiddingProcess.
InoneStakeholderGroupMeeting,participantsdiscussedtheideaofabiddepositoryfor
subcontractorbids.Usingthisconcept,Caltranswouldsegmentportionsofcontractsandthen
askforbidsfromsubcontractors,whichwouldbeavailableforallprimecontractorsbiddingthe
project.Thissystemisusedforcertaintypesofpublicworkscontractsinstatessuchas
Massachusetts.
IntervieweeSM#17,arepresentativeofAssociatedProfessionalsandContractorsofCalifornia,
reportedthatCaliforniausedtohaveabiddepositoryandnolongerdoes.Hesaidtheproblem
wasthatsubcontractors,includinghimself,wouldnotalwaysgivethesamepriceforallthe
generalcontractors.IusedtovarymybidonegeneralIdbidhigherthanthenext.Hewould
givehigherbidstogeneralcontractorsthatdidntpayontime.
IntervieweeSM#10,awhitemaleownerofaconstructionbusiness,saidthathelikedthegeneral
conceptofthebiddepository.Hetalkedabouttheideathatanagencymightdecidehowit
wantedtostructuresubcontracteditemsandthenobtainsubcontractorbidsadayortwoin
advance,whichwouldbeavailabletotheprimecontractors.Hesaidthatmostofthetraditional
subcontracteditemsonatypicalCaltransprojectaretoobigforsmallbusinesses.Wevegotto
findawayofbreakingitdownbeforebidday.
InterviewSM#10alsoreportedthat,fora2p.m.biddeadlineonaproject,hereceiveshisbid
fromasubcontractorat1:52p.m.Ivestillgottofigureoutwhoslow,writeitallout,putthose
guysin,spellitallout,andsubmitittoSacramentoandhaveitturnedinby2p.m.Headded,
Weretalkingaboutbreakingdownwork.HowamIgoingtogetanelectricalcontractorthats
biddingtometoagreetouseaminorityorSBEcompanytodigatrenchforthemifIdont
evenknowwhosgoingtobelow?
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE108

Indiscussinghowprojectownersstructureprojectsandhowprimecontractorschoose
subcontractors,IntervieweeSM#20,theAsianPacificAmericanfemaleownerofaconstruction
relatedservicescompany,saidthatchangingofthebehavioristhekeyhere.Interviewee
SM#10,thewhitemaleownerofaconstructioncompanysaid,Itsnotgoingtoworkweve
beentryingtochangecontractorsbehaviorfor30years.Itsallmandatedbythefactthatweve
gottosurvive.Ivegota[veryold]company,andIstruggletostayinbusinesseveryday.
Whenaskedwhethergettingasubsbidsoonerwouldhelpthebiddingprocessforaprime,
IntervieweeSM#10,thewhitemaleownerofaconstructioncompany,said,ThesoonestIllget
asubbidis24hours[beforebiddeadline]ifsomeonegetsmeabidearlier,itdoesntmatter
becausesomeoneelseisgoingtocomeinwithacheaperpricebetweennowandthenanyways.
IntervieweeSM#12,theHispanicAmericanownerofDBEcertifiedhighwayconstructionfirm
andrepresentativeoftheEngineeringContractorsAssociation,saidthatabiddepositorywillnot
workbecause,asasub,youdontgetthenumbersthatyouneedtosubmitabidfarenoughin
advancethatarentgoingtochangebeforebiddate.So,IneedaconcretepriceandIneeda
rebarpriceandotherthingsformyscopeofworkthatImgoingtobidtotheprime,butIdont
getituntilbidday.Idontgetuntilanhourbefore.Hesaidhehasthesameproblemsputting
togetherabidasasubthattheprimehasputtingtogethertheoverallbid.
IntervieweeSM#16,thewhitefemaleownerofaDBEcertifiedengineeringcompany,reported
that,abiddepositorywillnotworkforA&Econtracts.Sheindicatedthatthesecontractsare
awardedbasedonqualifications.
PriceorEvaluationPreferencesforSmallBusinesses.
Mostintervieweesreportedthattheywereunawareofanypriceorevaluationpreferencesfor
smallbusinesses,butthoughtitwouldbehelpfultosmallbusinesses.
Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidthatheis
notawareofthisbutthatitwoulddefinitelyhelpsmallbusinessescompetewiththebigfirms
whohaveanadvantagegoingin.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatpriceorevaluationpreferencesforsmallbusinesseswouldbebeneficial.She
said,Thisisoftentheonlywaysmallbusinessescancompetewithbiggerfirmswhowilloften
underbidjusttogettheworkandmakeupforitwithchangeorders.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
saidthatpriceorevaluationpreferencesforsmallbusinesseswouldbehelpful.Hesaid,
Contractsshouldhavegoalsforsmallbusinessessothatwecancompetewiththebigboys.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatpriceandevaluationpreferencesforsmallbusinessesareimportantbutthat
Caltransshouldmakespecificationsthat[smallbusinesses]canrespondtoratherthangearing
themonlytobigcompanies.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE109

Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
priceorevaluationpreferencesforsmallbusinessisnecessary.Hesaid,Ifyoudonthave
pricingandevaluationpreferences,whatisthepointofbeingcertified?
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompanyfeltthat
priceevaluationforsmallbusinesseswouldbehelpful,especiallysinceworkerscompis23
percentforsmallbusinessand8percentforlargebusiness.
Someintervieweesdidnotthinkthatpriceorevaluationpreferenceswouldbebeneficialtosmall
businessesorappropriate.Interviewee#26,thefemalemajoritypresidentofaWBEcertified
constructioncompany,said,Idontthink[priceorevaluationpreferencesforsmallbusinesses]
areappropriate.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,saidthathedid
notbelieveitwouldbeadvantageoustoprovidepriceorevaluationpreferencesforsmall
businesses.
SmallBusinessSetAsides.
Many interviewees reported that small business setasides could be beneficial to small
businesses. Some interviewees had comments about how setasides should be structured
Interviewee #6, the African American diversity marketing manager of an MBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatshelikestheideaofsmallbusinessset
asides but noted, I wish they would change the name of this, it has a negativeconnotations to
smallbusiness.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatsmallbusinesssetasideswouldbeagreatadvantageforsmall
businesses.Hesaid,Thatistheonlywayyoucanchangethecultureandgetawayfromonly
awardingworktothesamebigfirmswhounderperform.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatsmallbusinesssetasideswouldbehelpful.Shesaid,Ithoughtthatwasthe
purposeoftheprogram.Insteaditjustseemsliketheywanttomakeusallsubstobiggerfirm s.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
smallbusinesssetasidesareneeded.Hesaid,Otherwisebigfirmsgeteverything.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,saidthat
smallbusinesssetasideswouldbehelpful.Shesaid,Therearealotofjobsthatareperfectfor
ourcompanybutthebigcompaniescomeinandundercutus.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,said,[Small
businesssetasides]wouldbenefitme,butIdontthinkitsreallyfair.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE110

Interviewee#30,thewhitefemalevicepresidentofacertifiedmicrograding,concrete,and
pavingbusiness,saidIthinksomethinglike[smallbusinesssetasides]wouldbegoodifitwas
justsmallbusiness,ifitwasntthewomenownedandminorityownedbecauseyouputallthose
togetherasabundleallthetime,andwegetoverlookedbecauseofthat.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,[Smallbusinesssetasides]shouldbehelpful,butbigguys
arestillcomingin.Fourteenmilliondollarsinannualsalesistoolargetobeasmallbusiness.
Whentheyexceedthemaximumsales,theystartupanothersmallbusiness.
IntervieweeSM#24,arepresentativeofaDBEcertified,womanownedenvironmental
consultingfirm,saidthatsetasidesratherthanbigbundledcontractstogivemoreopportunities
directlytosmallbusinessesratherthanhavethemworkingassubcontractors.
OneintervieweesaidthatheparticipatedinthestateSBEprogrambuthasnotseenanywork.
AwhitemaleownerofanengineeringcompanythatisSBEcertified[IntervieweeSM#8]
reportedthathisfirmhasbeenawardedcontractsasanSBEbutnotgivenanywork[asa
prime].Ivebeensittingonacontractforalmosttwoandahalfyearsandnotgottenanywork
fromit.Hereportedthatheisworkingontryingtofigureoutwhyhehasntreceivedanywork.
HealsoreportedthatishardtogetSBEcertification.
MandatorySubcontractingMinimums.
Someintervieweesreportedthattheywereawareofmandatorysubcontractingminimums
andhadcommentsonhowthisprogrammightbeimproved.Interviewee#9,theAfrican
AmericanfemaleownerofaDBEcertifiedconstructionandhaulingcompany,saidsheisaware
thisalreadyexistsbutthatitisnottransparentenough.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,stated,Weareawareofsubcontractingminimums,butwebelievethattheyshouldbe
raisedtohigherthan6percent.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,Iam
infavorofraisingtheminimums.Thiswouldhelpoutmoresmallbusinesses.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,said
thatmandatorysubcontractingminimumswouldbehelpful,butmostofthesesubcontractors
arejustfacades,theprimeswouldbegivingmoremoneytotheirbuddies.
Someintervieweesreportedthatmandatorysubcontractingminimumswouldnotbe
beneficialtosmallbusinesses.Interviewee#20,thewhitemaleownerofamajorityowned
demolitionandloadingcompany,stated,SubcontractingminimumsdontapplytomesoIdont
thinkthiswouldbeuseful.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,indicatedthat
hewasnotinfavorofmandatorysubcontractingminimums.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE111

Manyintervieweesreportedthattheywerenotawareofmandatorysubcontracting
minimums.
SmallBusinessSubcontractingGoals.
Someintervieweesreportedthattheywereawareofsmallbusinesssubcontractinggoals,and
hadsuggestionsforimprovements.Interviewee#9,theAfricanAmericanfemaleownerofa
DBEcertifiedconstructionandhaulingcompany,saidthatsheisawareofsmallbusiness
subcontractinggoalsbutthatthesegoalsarenottransparentenough.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatsmallbusinesssubcontractingminimumsalreadyexistbutarenot
transparenttomost.Hesaid,Itseemslikewearediscouragedfrombiddingandthattheyonly
wanttomakeitappearthattheyaretryingtohelpusmeetgoals.
Otherintervieweesreportedthattheywerenotawareofanysmallbusinesssubcontracting
goals.
Someintervieweesthoughtthatsmallbusinesssubcontractinggoalscouldbebeneficialto
smallbusinesses.Interviewee#3,thewhitemaleownerofaconcreteandconstruction
company,saidthatsmallbusinesssubcontractinggoalswouldbehelpfulforsmallbusinesses.
Hesaid,Thiswouldbehelpfulbecauseotherwise,itishardforasmallbusinesstocompetewith
larger,moreestablishedfirms.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatsmallbusinesssubcontractinggoalswouldbebeneficial.Shesaid,Yes,this
couldhelpiftheyhadrealgoalsthattheyactuallytriedtomeet.
Otherintervieweessaidthatsmallbusinesssubcontractinggoalswouldnotbebeneficialto
smallbusinesses.Interviewee#29,thewhitemaleownerofaconcreteandlandscaping
company,saidthatsmallbusinesssubcontractinggoalswerenothelpful.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,said,Agoal
doesntmeananything.Theyrenotgoingtomeetanygoalunlessitsmandatory.
FormalComplaint/GrievanceProceduresatthePublicAgency.
Someintervieweesreportedthattheywereawareofformalcomplaintandgrievance
procedures.Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,
saidthatthereisaformalcomplaint/grievanceprocedureinplaceanditisgood.
Someintervieweeshadrecommendationsaboutformalcomplaintandgrievanceprocedures.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthereshouldbeahotlinewheresmallfirmscanreport
complaints.Hesaid,Oneofthebiggestproblemsisthelackofstandardsandqualityandnoone
seemstocare.Theyneedahotlineforidentifyingshadybusinesspractices.Thisisonewayto
improvestandardsandidentify[chronic]poorperformance.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE112

Interviewee#3,thewhitemaleownerofaconcreteandconstructioncompany,saidheisnot
awareofaformalcomplaintandgrievanceprocedurebutthatitmighthelpcreateafairer
playingfield.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthataformalcomplaint/grievanceprocedureisneeded.Shesaid,Definitely,the
natureofbusinesswithCaltransisthattheydontoftenreallyunderstandwhattheyarelooking
for.Thisrequiresalotofcollaborationwhichtheyarentwillingtoengagein.Theyneedagood
complaintorescalationprocess.
Interviewee#19,thewhitemalesafetyandtrainingmanagerofamajorityownedconcreteand
constructioncompany,saidthatacomplaint/grievanceprocesswouldbebeneficial.Hesaid,
Withalloftheinspectionsandlicenseswehave,anyoneofthemcancauseaproblemandmany
ofthemdonthaveformalprocessesforcomplaints.
Otherintervieweesindicatedthattheimplementationofformalcomplaintorgrievance
procedureswouldnotbebeneficialtosmallbusinesses.Interviewee#20,thewhitemale
ownerofamajorityowneddemolitionandloadingcompanystated,Imnotawareofthis,butI
dontthinkthiswouldbehelpful.
Interviewee#30,thewhitemalepresidentofacertifiedmicrograding,concrete,said,They
have[formalcomplaintprocedures],butIdontthinktheydoanygood.Thosebigguysaregood
atwhattheydo.
Interviewee#31,thewhitemaleowner/operatorofacertifiedsmallmajorityownedroad
gradingbusiness,didnotthinkthatformalcomplaint/grievanceprocedureswouldbehelpful.
HesaidInthisbusinessyeahnothanks.Theresnosuchthingasablacklistright?Open
yourmouthandfindout.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,[Aformalcomplaint/grievanceprocedure]wouldfallon
deafears.Whocarriestheburdenofproof?
F.InsightsRegardingRace,Ethnicity orGenderbasedMeasures
SomeintervieweesreportedapositiveexperienceinconnectionwiththeFederalDBE
Program.Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineering
company,believesthatthestateDBEprogramsaresolidprogramsandthatadditionalmeasures
canbegoodforbusinessesiftheyareproperlydeterminedandenforced.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,The
programsaregoodandusefulformybusiness.ThebestcertificationistheUDBE.Thishasledto
themostwork.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthattheytheirexperiencewiththeDBEprogramhas
beenpositiveandisasteppingstoolforMBEandWBEs.Hestated,Theprogramadministrators
shouldcontinuetobetightandstrictwithacceptanceintotheseprograms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE113

IntervieweePH#1,theownerofaDBEcertifiedenvironmentalconsultingfirm,said,Iwould
saythattheDBEprogramiseffective.Itsactuallyaffectedmycompany.Wewentfromone
individual,myself,tonow10.Wehavesevenasolidseven,pluswehaveanadditionalthree
thatkindofcomeinwhenweneedadditionalhelpandassistance.
IntervieweeWT#7,thefemaleownerofaDBEcertifiedresearchfirm,said,Overall,our
experiencewiththe[DBE]programhasbeenpositive.Largecommunicationfirmsspecially
reachouttousonstatecontractsbecauseoftheDBErequirement.
IntervieweeWT#19,theownerofaDBEcertifiedengineeringfirm,said,Iamverythankfulfor
theDBEprogram,whichprovidedmetheopportunitytoprovidemyengineeringservicesfor
Caltrans.
IntervieweeWT#21,arepresentativeofaDBEcertifiedengineeringfirm,said,FirstofallI
wouldliketocommemoratetheDepartmentforactivelyadvocatingtheDBEprograminthepast
forbothdesignandconstructioncontracts.TheDepartmenthassetupamodelthathashelped
manysmallbusinesses(likemyfirm)tosucceedandbeabletoparticipateinmanylargepublic
worksprojects.TheDBEprogramallowssmallcompetentfirmtohavetheopportunitiestobea
teammemberofmajordesignteam.Throughthedesignprocess,DBEfirms(likemine)will
learnfromtheDepartmentandmajorfirmsandeventuallybuildupsubstantialexperiencesand
capabilitiestocompleteasprimeconsultants.IlooktotheDepartmentforleadershipin
continuousimplementationofastrongDBEprogramandDBEparticipation.
TheAsianPacificAmericanownerofanengineeringcompanyandrepresentativeofthe
AmericanCouncilofEngineeringCompaniesCaliforniaindicatedthattheremaybeanincrease
inDBEcertificationapplicationsfromengineeringrelatedfirmsbecauseoftheincreaseinthe
SBAsizestandard,whichallowshigherrevenuebusinessestobecertifiedasDBEs.Healso
statedthathewouldhatetoseefirmsthathavenotappliedforDBEcertificationgetthebenefits
oftheprogram.[IntervieweeSM#2]
IntervieweeSM#6,thefemaleownerofaDBEcertifiedconstructionfirm,reportedthather
companyhaspickedaconsiderableamountofworkbecausewereaUDBE.Sheadded,The
majorityofmy[currentandrecent]contractsareUDBEcontracts.Shecontinued,Inmy
business,theresaboutsixorsevenothercompanies[inherpartofthestate].Minebyfaristhe
smallest.Soforme,theDBEandUDBEhashelpedoutalotbecausewecannowgetjobsthat
wemightnothavebeenabletogetbecausealotoftimesinourindustrythebiggercompanies
cancomeinandbidatalowerdollaramounttokeeptheoverheadgoingthroughouttheyearto
keepthecrewsgoingwecantdothatbecausewearesosmall.IntervieweeSM#6stated
further,OurUDBEstatushashelpedoutalotbecausetherearemoreprimecontractors
reachingouttomewedefinitelygettonsofemailsandfaxeswithoutreachtobidonparticular
projects,pluswedoourownresearchonprojectsweregoingtobid.Themajorityoftheprime
contractorsinthisareaarethesame.Weworkforalotofbigpavingcontractors.Wedidhavea
rapportwiththem,butIwouldsaythatoncewebecamecertifiedandpeoplemayneedDBEor
UDBEtoqualifyforthejob,wedefinitelyheardfromalotmorecontractorscontractorsthat
wedneverdealtwith.Ivedefinitelygottenalotmorecontractorscallingandwantingtodo
businesswithusbecauseofmycertification.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE114

SomeintervieweesreportedchallengesorconcernsregardingtheFederalDBEProgram.Some
intervieweessaidthattheDBEcontractgoalsportionoftheFederalDBEProgramdoesnotwork
wellbecauseofthelimitedavailabilityofDBEstobidonCaltranssubcontractsandthedynamics
ofputtingbidstogether.IntervieweeSM#10,thewhitemaleownerofaconstructioncompany,
saidthatmanyminorityandwomenownedfirms,includingDBEs,arenotavailablefor
subcontractworkonbidday.HesaidthatmanyDBEswillindicatethattheyareavailablefor
Caltransworkbutnotsubmitbids.Hesaidthattheresultisthatgoalsaresuchthattheycannot
beachieved.Healsoreportedthattheprogramdoesntachievetheobjectiveofbuilding
minorityandwomenownedfirms.Hesuggestedthatitjustcreatesaprocessofprime
contractorsdocumentinggoodfaitheffortswithoutactuallyusingminorityandwomenowned
firms.
IntervieweeSM#10,awhitemaleownerofaconstructionfirm,alsoexplainedthedifficultyof
meetingaDBEcontractgoalatbidtime.Hesaidthat,Attheendoftheday,itsnotnecessarily
discriminationgeneralcontractorsarenotsittingtheresaying,Idontwanttousethem
becausetheyresmallbusinessorUDBE.Werebiddingwork,wereinahorribleeconomy,
weredoingeverythingwecantogetwork.Whatdrivesthiswholethingismoney.Welookata
bidandsay,youknowwhat,wecantaffordnottolistthelowperson.Well,thatsnotfairtothe
UDBEorthesmallbusinessthatsputallthisworkinandtheirpricemaybealittlehigher.Of
courseitsgoingtobehigher.Theyrenotgoingtobelikeanormalsubcontractor.Wedont
makeallowancesforthat,wedonthaveawaytobuildthatintothesystem.Wedonthaveways
ofunbundling,therestoomanymovingparts.Howareweaccomplishinggoals?through
truckingforthemostpart.
IntervieweeSM#10recommendedlookingatnewwaystomeetcontractgoalsthatdonotrely
onprimecontractorschoosinglowbidsubcontractorsattimeofbid.Putalineiteminthere[in
thecontractspecifications]withanallowancethatmakesitaresponsibilityofthegeneral
contractortofulfillthatbyutilizingsmallbusinessesandunderutilizedbusinesses,andmake
thatallowance,thatnumberinthebid,theportionofthebidthatneedtogotothegoal.He
continued,Theprimecontractorgetstousethatmoney,thatallowance,asaforceaccount,so
thepersonisnotheldtolowestbid,they[thesmallbusinessorDBE]gettogetpaidafairand
reasonableamounttoperformsometaskorworkonthatjobandtodevelopandgrow
peopleinanatmospherethatsnothostileandthatssorisky.
IntervieweeSM#10,thewhitemaleownerofaconstructioncompanysaid,Weneedtocomeup
withabetterwaysomethingwecanalllookbackandsaywereapartofchangingit
fundamentallyinhowwedobusiness,andlookatallthesecompaniesthatareprospering
becauseofit.
IntervieweeSM#10explainedthatitstoomuchofalift,toobigofabattleforsmallbusiness
andDBEsubcontractorstohaveacompletebid,thatcoversalltheiritems,thattheycangiveto
theirgeneralcontractorandbepricecompetitive.Hesaidthatwerefailingmiserablyin
buildingsmallbusinesseswiththecurrentimplementationoftheDBEProgram.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE115

IntervieweeSM#1,aHispaniccontractorrepresentativeoftheHispanicContractorsand
SuppliersAssociation,saidthatIveheardtheAGCguysay,Whydontwejusthaveasetaside
programandjustknock[out]allthisothernonsense.Sotheyrereadytosupportamoreoutof
theboxtypeofapproach.
IntervieweeSM#20,theAsianPacificAmericanfemaleownerofaDBEcertifiedconstruction
servicescompany,saidWeneedtochangepeoplesbehavior,andyouusuallygetwhatyou
incent.Rightnowyoureaskingprimestotakeonawholebunchofextrawork.
IntervieweeSM#22,theHispanicAmericanownerofanengineeringcompany,saidthatDBE
goalsbecomeaceilingratherthanafloor.Herecommendedaslidingscaleforgoalsand
providingincentivestoprimecontractorstohavehigherDBEparticipationonthecontract.
IntervieweeSM#1,aHispanicAmericancontractorandrepresentativeoftheHispanic
ContractorsandSuppliersAssociation,said,Ifsettingthegoalsisgoingtobecontingentonhow
primecontractorshaveperformedtheirpartofthebargaininthepast,thenthosegoalsare
goingtobedifficulttomeet.Primecontractorshavenotreallybentoverasfarasunbundlingis
concerned.Idontthinkprimecontractorshavedoneenoughworkingwithsubs,becausethe
subcontractormarketiswherethesmallbusinesscontractorsopportunitiesare.Unlessa
primecontractorunbundles,orunlessaprimecontractorworkswithasubtounbundle,itisnt
goingtohappensIfyougotothesmallbusinessmarketandyoustartqueryingthemabout
participationonCaltranscontracts,andalltheycanthinkof,isIsawthiscontract[requestfor
bid]andIsawthebiditemsandtherewasntabiditemontherelessthan$5million,theresno
wayImgoingtohaveanyinterestinthat,theresnowayImgoingtogetinthatmarket.
IntervieweeSM#1wentontoexplainthatthemarketforminorityownedsubcontractorshas
beensomewhatdictatedbyhowprimecontractorshaveperformedoutreachinthepast.Ithink
thattheanswer,asfarasachievinggoalsisconcerned,liesintheissueofunbundling.He
explainedthatprimesdonottypicallyspecializeinthetradescoveredbysubcontractingareas
(electrical,concreteorstructural),Theyhiresubsforthat.Fortheprimetobeaskedtodothe
unbundlingisverydifficult.Whenyouunbundleyouhavediscretelinesthatoutline,precisely,
thescopeofwork.Manyoftheprimesdonthavethatcapability.Ivetalkedwiththem,Igettheir
invitationstobid.Italktothemaboutunbundling.WhenaskedwhetheraDBEcontractgoal
wouldgiveprimestheincentivetounbundle,IntervieweeSM#1said,Youwouldthinkso,but
theprimeisgoingtohavetroubleunbundlingbecausetheydonthavethewherewithal,the
knowledgetodrawthelinesaboutwherethediscretechunksofworkarethatswhatIve
beentoldanyway.
IntervieweeSM#12,theHispanicAmericanownerofaDBEcertifiedhighwayconstructionfirm
andrepresentativeoftheEngineeringContractorsAssociation,said,whentheDBEcontract
goalswentaway,hisparticipationonacontractdidntmatterasmuchasdidwiththegoals.His
businesswasnotaffectedthatmuchbecausetheycompetedasanyotherfirmforthatwork.If
thatmeansfindingtheprimecontractorsandgettingtoknowthemortheirstaffandpreparing
ourselvestoknowthevendorswhosupplyusnumberswhateveryouhavetodoyouhaveto
do,becauseitsabusinessattheendoftheday.Itsverycolorblindnowyoubetterbethelow
bidderbecausetheyrenotgoingtouseyouifyourenotthelowbidder.
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IntervieweeSM#20recommendedthatCaltranssimplifyhowDBEsubcontractorscanrespond
torequestsforsubcontractorquotesbymakingitpossiblefortheDBEsubcontractortorespond
once,online,andhaveeachprimecontractorhaveaccesstothatinformation,ratherthan
individuallyrespondingtoeachprimecontractor.Everybody[everyprime]hastohavetheir
ownforms,havetheirownlogoonit,andIfillthatoutoverandoverandoveragainjustto
findoutatthebidopeningthatthey[theprime]didntevenbid.No,thatsacolossalwasteof
timeSubcontractorscannotaffordthis.
IntervieweeSM#10describedtheoptinfeatureforprimecontractorsandsubcontractorson
theCaltranswebsitethathelpsprimesandsubscommunicatetoeachothertheirinterestand
capabilitiesconcerningaparticularupcomingbidopportunity.
ThewhitefemaleownerofaDBEcertifiedengineeringfirm[IntervieweeSM#16]reported,The
lastUDBEprogramdisallowedcreditforUDBEfirmsactingasaprime.Thecontractbudgets,
scopeandschedulearedrivenbytheprime.UDBEswereeffectivelylefttryingtodrivefromthe
backseat.AsIstatedbefore,primesdonotwanttoallowtheirsubsanyaccesstotheclient,even
ifthisputstheirprojectatadisadvantage.Ihaveoftenseentheprimedotheworkinhouse,
leavingthesuboutoftheprocess.TheUDBE/DBEsareseenaseasycompetitiontoknockoff.
OthernegativecommentsaboutimplementationoftheFederalDBEProgram.Interviewee#9,
theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhaulingcompany,stated
thatherexperiencehasmostlybeennegative.Shesaid,Wehavebeentreatedwithsuspicion
andlikewearedoingsomethingwrong.Shecontinued,Caltransshouldjustsayupfrontwhat
theyarelookingforandwhatinformationtheywant.Dontactinsuchanadversarialmanner
anddontdiscourageeveryonebyaccusingthemofbeingafront.
Interviewee#11,thewhitefemaleownerofacertifiedwomanownedengineeringbusiness,said
thatitwouldbehelpfulifCaltransandotheragencieswouldactuallyworkwithusinsteadof
treatingusliketheenemy.Shecontinuedbysaying,Therearealotofknowledgeablepeople
outtherewhocanhelpCaltranswithdevelopingspecifications.Whydonttheyusethemasthe
expertstheyare?
Interviewee#23,theHispanicmaleownerofanMBEcertifiedconstructioncompany,saidthat
inhisexperience,itisnotclearwhatadvantagethereistobeingcertified.Hesaid,Idontseea
clearadvantagetobeingacertifiedfirm.Idogetsomecallsfromprimesaskingformy
certification,butcertificationshouldntbejustgearedtowardsbeingasubcontractor.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,in
responsetoherexperiencewithDBEoranyStateprogramandcommentsorrecommendations,
saidIdontfeelitwasfairthataStatecontractwasawardedtoaDVBEfromoutofstate.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedfemaleAsian
PacificAmericanownedenvironmentalcompany,saidItsallpolitical.ItsgreatifyoureanIraq
veteran,buttherestofusarenotgettinganything.
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IntervieweePH#9,arepresentativeofaDBEcertifiedengineeringcompany,said,Untilabout
threeorfouryearsagowewereveryhappywiththeprogram,DBEprogram.Unfortunately,in
thelastthreeorfouryearstheprogramhasbeendetrimentaltoourbusinessbecauseofthe
multiplebarrierstheprogramhascreated,itself,asoneofthebarriers,aseparaterequirement
ofUDBEversusDBE.
IntervieweePH#29,anemployeeofaDBE/SBE/UDBE/WMBEcertifiedmarketingfirm,said,I
wanttomakeapointthattheDBEprogramissupposedtobefordisadvantagedbusiness
enterprises,butthisprogramactuallyaddsmoredisadvantagetothedisadvantagedbusiness
enterprisethatstryingtonotbedisadvantagedanymore.Andinsayingthat,itswhateverybody
hastalkedaboutjumpingthroughhoops,spendingmoney,spendingtime,humancapital,allthe
resourcesjusttogetinthedoor,andImaskingthattheprogramitselfactuallycheckitself
becausewhatyouredoingisyoureactuallyusingallthesmalldisadvantagedbusinessestotout
yourowneffortsofdolingouttaxpayermoneyonpublicjobsafteryoualreadypickedtheprime
contractorandyougivetheprimecontractorsolediscretiontopickwinnersandlosersafter
that.
IntervieweePH#30,arepresentativeofaDBEcertifiedfirm,said,ThenewDBEruleshave
resultedinreturningtheChicano/Latinocontractorbacktoasecondclassstatus,andImnot
goingtostandforthat.
IntervieweeSM#1,aHispaniccontractorrepresentativeofHispanicContractorsAssociationin
NorthernCalifornia,statedthatCaltranshassufferedaseveresetbackinDBEutilization.He
askedwhatextentthatthe2007DisparityStudywasresponsibleforthissetback.In2007,he
saidHispaniccontractorsweredoingsomethinglike10percentandtodayitiscloserto2
percentbecauseHispanicAmericanfirmswerenoteligibletomeetUDBEgoals.
IntervieweeWT#1,aDBEcertifiedwireandcablemanufacturingfirm,stated,Noeffortisgiven
tosupportingamanufacturer.Theprocessesinyourprogramaredesignedforcontractors.No
attentionhasbeengivenonbehalfofmanufacturers.
IntervieweeWT#2,thepresidentandCEOofaDBEcertifiedstructuralengineeringfirm,said,
Since2009,anewcategory,RaceConsciousUDBE,hasbeenintroducedasarequirementon
StateprojectsreceivingFederalAidfunds.BusinessesownedbyAsianSubcontinentAmericans
andLatino/HispanicAmericansareexcludedfromracialgroupsthatcanbecertifiedasRace
ConsciousUDBE.Inpractice,mostprimesendupusingUDBEfirmstofulfillboththeUDBEand
theDBErequirements,sinceUDBEfirmscontinuetoholdtheDBEstatus.Thissignificantly
limitsbusinessopportunitiesforRaceNeutralDBEbusinesses.Accordingly,RaceNeutralDBE
companiesfaceadefinitedisadvantageinprocuringbusinessonStatecontractsthatcanforce
suchcompaniesoutofbusiness.
IntervieweeWT#5,theownerofaDBE/SBEcertifiedengineeringfirm,statedBetween2000
and2007,DBEprogramwashelpfulinovercomingsomeofthebarriersinthebusinessworld
andhelpedusingettingsomeworkfromtheStateandLocalagencies.However,eversincethe
programchangedthreeyearsagotocreateseparateUDBEcategoryinwhichHispanicsand
SubcontinentAsianswerenotconsideredaspartoftheUDBE,wehavenotreceivedasinglenew
contractfromtheStateorLocalAgency.WhileIhadthreeemployeesin2009,Icouldnotafford
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE118

tokeepanyoneofthembecauseoflackofanynewworkloadfromthepublicagencies.Ihave
stayedinbusinessandhaveworkedonaCaltransprojectduringthelasttwoyears,butthis
projectisacontinuationofthecontractwehadsignedbeforeSubcontinentalAsianswere
removedfromthenewlycreatedUDBErequirement.WhileIhaveoftenhearfromCaltransthat
thereisstillaDBErequirementinitscontracts,thefactremainsthatcontractorshaveno
incentiveinhiringanySubcontinentAsianorHispanicDBEs.Thereissimplynorequirementfor
aDBEthatcannotbefilledbyaUDBE.Onthecontrary,aHispanicorSubcontinentAsiancannot
fulfillUDBErequirementsinCaltranscontracts.IbelievethatthetwotiersystemofDBEand
UDBEwithexclusionofcertainminoritiesfromUDBEprogramhas[reversed]theprogress
madebyHispanicandSubcontinentAsianbusinessesundertheDBEprogram.
IntervieweeWT#13,arepresentativeofaDBEcertifiedfirm,said,Ijustwantedtoletyouknow
thatafteroverthreeyearsofbeingDBEcertified,IhaveyettodoevenONEjobthroughthis
program.IgetrarenotificationsofaprojectwhereImaybeeligible,butevenafterIsend
notificationthatIwouldliketobid,Inevergetareturnnotification.
IntervieweeWT#18,theownerofaminorityownedfirm,said,IwasDBEcertifieduntilearlier
thisyear,butdecidednottorenewit.InthethreeyearsthatIhavebeencertified,Ihavenot
receivedasinglerequestforproposaloropportunityinIT.Whentheutilizationreportwas
presentedattheSBCayearago,Iquestionedthevalidityofit.ThereportsaidthattheIT
contractswonbythecompanieswereminorityownedandthereforecouldbecountedasDBEs.
MyquestionatthattimewasiftheyarecountedtowardstheDBEfulfillment,thenwhydidthose
companiesnotgetcertified?Theassumptionthattheycouldhavebeenisclearlywrong.Because
iftheywereeligible,theywouldhavebeencertified.Assumingthatsomeoneiseligibleand
countingitasencouragingtheDBEsisquestioningtheveryexistenceoftheDBEcertificationif
theDBEcertifiedcompaniesdontactuallymatter.
IntervieweeWT#20,arepresentativeofaDBEcertifiedfirm,said,Theoverridingthemehereis
thatmostpeopledontcareenoughtohelpthesmallbusiness;andtherearenoconsequences
fortheirbehaviororincentivestohelp.Thisisnottheway,Imsure,Caltransintendedon
helpingtheDisadvantagedBusinessEnterprise.Thosethatcanhelpperhapsdonothavethe
righttools.Ithinkthatiswhatyoure[sic]programistrulyupagainst.
IntervieweeWT#22,theownerofaDBEcertifiedtruckingfirm,said,Weareandhavebeena
certifiedDBEtruckingcompanyfor25yearsandtheprogramhasworkedwellforus.Wewerea
bitconfusedwhenthedistrictcameoutwithanewcategory,UDBE,whichexcludedHispanic
heritage.Wefeltasifwewere,insomeways,beingpenalizedfornotbeingofadifferent
ethnicity.Itseemsthedistricthasidentifiedminoritygroupswithinminoritygroups.Wefeel
stronglythattheUDBEcategoryshouldeitherbeabolishedormadetoincludeHispanics.
IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedbusiness,reportedthat
A/EprimeconsultantsareconfusedbyUDBEandDBEportionsoftheprogram.
WhenaskedifhewaspleasedthathegotDBEcertified,IntervieweeSM#3saidthatheisgoing
arounditnowithasnorelevanceanymore.Werecreatingothermarkets.Werenotpursuing
itasdiligentlyaswewantedtobecauseofthosethings[disadvantagesofbeingaDBE]Weve
notlandedacontractyet.
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IntervieweeSM#12,theHispanicAmericanownerofanengineeringbusiness,said,Youget
worknowbecauseyourelowtheincentivetogetworkbecauseyoureaDBEorUDBEhas
nowbeenminimizedbecauseeverybodyisjusttryingtosurvivenotjustthesmallbusinesses,
butalsotheprimes.Theyvebeenforcedintoacornerwhereasmuchastheydliketobe
magnanimousandtrytohelp,thisisnotanentitlementprogram.
SomeintervieweeswerecriticaloftheGoodFaithEffortscomponentoftheprogram.
IntervieweeSM#12,theHispanicAmericanownerofanengineeringbusiness,indicatedthat
GoodFaithEffortsresponsesarenow1,100to1,200pageslong.Itshardtonotapprovethatas
beingaGoodFaithEffortbuttheyrenotgoingtomakethegoalbecauselargelytheresources
justdontexistfromasubcontractorperspective.
IntervieweeSM#10,awhitemaleownerofaconstructionfirm,observedthattheGoodFaith
Effortsprocessishorrible.TheGoodFaithEffortsprocessispurelyafunctionofCYA.Ifyou
lookatthese800900pagesallthatenergyandtimecouldbeusedtoconnectwithDBEsand
actuallydosomethinguseful.Itsdisappointing.
AfemalebusinessownerandrepresentativeoftheSouthernCaliforniaContractorsAssociation
[IntervieweeSM#15]gavesomespecificcommentsabouttheGoodFaithEffortsprocess.You
havetwocompetingbiddersandtheystartattackingoneanothersefforts.Italmostbecomesthe
selfenforcerthebiddertakesontheroleofenforcingtheprogrambybeingabletoshowthat
yourcompetitordidntmeetthoserequirementsIdontknowthatthatswhattheProgram
wantstohave.Thesepeopleshouldbeinthebusinessofconstructing.Theyshouldnthaveto
takeontheroleenforcingthoseissuesorbecominginvestigators.
IntervieweeSM#17,representingAssociatedProfessionalsandContractorsofCalifornia,said
thatCaltransdoesnothaveenoughstafftofullyevaluateprimecontractorsGoodFaithEfforts.
IntervieweeSM#13,representingthePortofLosAngeles,agreedthat,inhisexperience,mostof
thecontestedbidsareonthebasisofMBE/WBEorDBErequirements.Theyrejustgoingafter
theGFE.
IntervieweeSM#13wentontodescribehowthePorthaschangeditsprograms.In2007,the
PortofLosAngelesimplementedasmallbusinessenterpriseprogram.Itwasourefforttoget
awayfromtheGoodFaithEffortsprogramthattherestoftheCityhadwheretherewassucha
hugeburdenonproposersandbiddersongoingthroughthatprocess,andeveniftheywent
throughit,therewasawayto,potentially,getaroundhiringanyminorityorwomenbusiness
enterprisesatall.WhenthePortstartedwiththeSBEprogram,ithadaGFEelement.Thevery
firstcontractthatwehadgothroughourboard,thecontractorwentthroughtheGoodFaith
Effort,wentaroundtoallofthesmallbusinessestheycouldfind,andawardedthesubcontracts
towhoevertheyworkedwithinitially[nonSBEs].Afterthat,thePorteliminatedtheGoodFaith
EffortcomponentoftheSBEprogram.ItnowsetsSBEcontractgoalsthatmustbemet.Ifthe
bidderdoesntmeettheminimumnumber,itsproposalorbidisnotconsidered.Interviewee
SM#13reportedthatabout11percentofcontractdollarsgoingtominorityandwomenowned
firms.
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IntervieweeSM#13alsotalkedaboutothereffortsattheCityofLosAngeles.TheCityofLos
AngeleshasmovedtoanelectronicGoodFaithEffortsprocessonitsBusinessAssistanceVirtual
Network.PrimesarerequiredtoutilizetheNetwork.Allinteractionbetweenprimesandsubsis
documentedelectronicallyontheNetwork.Electronicnotificationofwhencontracting
opportunitiescomeupisinvaluableandisahugestepintherightdirection.Theimplementation
ofanelectronicGFEsystem,ifitsrequired,isahugeimprovementovertheoldsystem.
IntervieweeSM#10,awhitemaleownerofaconstructionfirm,talkedabouttheoptinsystem
thatCaltranshasthatallowsprimecontractorstoreachouttosubcontractorsaboutthebids
theyarelookingfor.UDBEandDBEcontractorsalsogoonthedatabasetoinformprime
contractorsoftheirinterestindoingcertaintypesofwork.IntervieweeSM#10reportedthathe
hasusedthiswithhiscompany.Itsveryuseful.Hereportedthatitisnotyetwellknown
withintheindustry.Whenitsused,itsusedeffectively.
IntervieweeSM#12,theHispanicAmericanownerofaDBEcertifiedhighwaycontractingfirm,
saidthatThisisanotherhazardthatCaltransallowstohappenwehavebeenbroughttobe
substitutedwhenourquotesayswerenotgoingtoprovideabondbutafterwerenamedforthe
job,theprimethenwantsustoprovideabondanditbecomesanissue.Sowevegottogotothe
substitutionhearing,andCaltranswillletthathappenandbeareasontodisqualifyusand
substitutesomebodyelse.Withoutitbeingcountedtowardsthegoal,therewasnosearchfor
anotherDBE.
Someintervieweescautionedthatprimecontractorscannotmeetcontractgoalsiftheyare
unrealisticallyhigh.TheHispanicAmericanownerofanengineeringcompany[Interviewee
SM#12]observedduringadiscussionofthelevelofutilizationotheragencieshavereached,Its
ahugeachievementtoget10percent.Again,Idliketocautioneverybodythattheresjustnot
enoughresourcesintheformofcontractorsavailabletomakethatsortofagoalwhenitcomes
toCaltrans.Ithinktheydhavetohaveaversiontoallowittohappenorthegoalhasgottobe
lowered.Itsnotmagic.
IntervieweeSM#9,theSubcontinentAsianAmericanownerofanengineeringfirm,alsospoke
aboutwhathesawaslimitedavailabilityofUDBEs,atleastinhislineofbusiness,tomeetthe
goal.TherearentmanyUDBEfirms[inhislineofwork].Whenthegoalsaresetashighas8
percentUDBEparticipation,thecontractorswillhaveahardtimemeetingthesegoals.
TheHispanicAmericanownerofanengineeringfirm[IntervieweeSM#12]alsoreportedthat
theGoodFaithEffortsprocessisespeciallyburdensomeforDBEprimes.IfyoureeveraDBE
biddingasaprime,whichdoesnthappenalot,they[theDBE]couldnotfashionagoodfaith
effortinthesamegrandnaturethattheprimesdo.Theyspendahorrendousamountofmoney
doingit.[Speakingabouthisownfirm]Wedonthaveadepartmenttodothat.Wedonthavea
GoodFaithEffortbudgettodothat.ItputstheDBEsatadisadvantagewhentryingtocompete.
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IntervieweeSM#10,awhitemaleownerofaconstructionfirmandUnitedContractorsboard
member,commentedonwhathesawadisconnectbetweenDBEsandprimecontractors.He
reportedthattherewasarealchallengeinidentifyingDBEcompaniesthatwantedtoworkwith
primes,andviceversa.Everytimeweset[DBEcontract]goalsthatmaybeoverstated,its
damagingtheabilityoftheDBEworldtogetworkandtheprimesanditsmakingusalllook
bad.HeexplainedthathisinterestwasinfutureimplementationoftheDBEProgramthatwas
sustainableandabletoworkoverthelongterm.
IntervieweeSM#10wentontoexplainthatitisdifficulttocategorizecontractorsaccordingto
theworktheydoiftheysignupformanydifferenttypesofwork.Hedescribedthechallengeat
bidtime,Wehave10,12,15differenttypesofworkatCaltranstobidonitsnotjustsigning
upandsayingIwanttodoexcavation,itssigningupandsayingImgoingtogiveyouabidfor
stormdrainagecompleteImgoingtogiveyouanelectricalpackagecompleteIm
goingtodolandscapingcomplete.PartofthechallengethatIseeinlookingatallthisis,we
havethisbigbowlofeverybodywhosintherethatsaysIwanttodoexcavatingIwanttodo
dirtIwanttododifferentcategories,differentaspectsofwork,butwhenitcomestogivinga
priceatbidtimeonbidday,thatpoolishundredsandhundredsoftimesreduced.Interviewee
SM#10saidthatmanyfirmsjustcantgiveapricecompleteonbidday.
IntervieweeSM#10said,Thesystemrightnowdoesntworkweneedaprogramthatallows
DBEfirmstogetexperienceandgetexposuretoCaltranswithouttheriskoflosingmoneyand
withouttheprimecontractorworryingaboutlosingmoney.
AfemalebusinessownerandrepresentativeoftheSouthernCaliforniaContractorsAssociation
[IntervieweeSM#15]observed,OneofthemajorchallengesthattheProgramhasinitsentirety
isthattheconstructionindustryasawholedoesnotrespecttheProgramInonesensethey
thinkitsunrealisticpercentages,andthentheydontunderstandwhatthepurposebehinditis.
Shesaidthatthereneedstomoreeducationabouttheprogram,makingitrelevantandrealistic
andensuringmoreaccountability.Youcantjustsetrequirementsandpercentageswithout(a)
enforcingthemand(b)beingabletoknowthatthosepercentageswererealistictobeginwith
becausetheycouldhavebeenmet,inpracticalterms,notjustintheory.Whenaskedwhata
successfulProgramwouldlooklike,shesaid,Itsacceptanceandadherence.Unfortunately,right
now,Ithinktheprogramstruggleswithboth.
SomeintervieweesindicatedalackofknowledgeorexperienceregardingtheStateMBE/WBE
orFederalDBEPrograms.Interviewee#3,thewhitemaleownerofaconcreteandconstruction
company,saidheisnotawareofanyadditionalmeasureslimitedtocertifiedMBE/WBE/DBE
firmsthatwouldbeusefulorneeded.Hesaid,ImnotcertifiedsoIdonthaveanyreal
experiencehere.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,stated,Idonthaveexperiencewithanyofthestateprograms.Weareanew
businessandwillprobablylookintoprogramsinthefutureifwedecidetopursuemorepublic
sectorwork.HealsostatedthathedoesnthaveexperiencewiththeFederalDBEPrograms.
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H.Certification
TheCertificationProcess.
Someintervieweesreportedrelativelypositiveexperienceswiththecertificationprocess.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reportedthat
thecertificationprocesswasnottoodifficult.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthattheprocesstocertifyisnotthatdifficult.He
stated,Prettyeasy,notdifficultatall.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Theprocesswasnotdifficult,wefilledoutthe
paperwork,didtheinspections.Theprocessisthesameeveryfiveyears.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
stated,ThecertificationprocessisOK.Itspainfulbecauseoftheamountofpaperworkbutits
acceptable.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,
Certificationwaseasy.
Interviewee#37,theAfricanAmericanmalepresidentofacertifiedelectricalcompany,said
regardingthecertificationprocess,Itsfairlyeasy.Youwillhavetojumpthroughafewhoops.
IntervieweePH#4,arepresentativeofaDBEcertifiedprogramandprojectmanagement
company,said,First,Iwanttoacknowledgethatstaffofthecertificationoffice,aswellasyour
smallbusinessliaison,havebeenvery,verysupportiveandveryinformativeintermsofevery
timeIinteractedwiththem.
TheAsianPacificAmericanownerofanengineeringcompanyandrepresentativeofthe
AmericanCouncilofEngineeringCompaniesCaliforniacomplimentedCaltransonthe
certificationprocess.HereportedthatittooklessthantwomonthstobecomecertifiedasaDBE
byCaltrans.Withinaweekortwoofsubmittingapplications,Caltranshadquestionsbacktothe
firm[IntervieweeSM#2].
Otherintervieweesreportedchallengesandbarriersinconnectionwiththecertification
process.Thiscausedsomefirmstoforgocertification.Interviewee#4,theAfricanAmerican
ownerofaDBE/MBE/SBEcertifiedengineeringcompany,saidthatthepeopleconductingthe
certificationprocessweremakingitmoredifficultthanitshouldhavebeen.Ifthepeoplewere
bettertrainedthenitwouldbeeasierfornewapplicants.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,statedthathercompanyisnotcertifiedwiththestateoralocalagencyasan
MBE/WBEorDBE.Shesaidthattheprocesswastooconfusingandtooktoolong.Asasmall
businessowner,Ididnthavetimetowadethroughalloftherequirementsandcertification
genres,shesaid.Sheadded,IdidcontactabusinessthathelpsyougetcertifiedbutIbecame
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discouragedbecauseitwasntclearwhatthebenefitswouldbe.Shealsosaid,Ifitwaseasy,we
wouldbecertifiedIthinkitmaybeworthittogothroughtheprocessbutjustbestraightwith
meaboutwhatyouarelookingforandwhatIneedtodotoqualify.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatthecertificationprocesswasextremelydifficult.Shesaid,Itisnoteasy,we
wereinitiallydeniedcertificationbecausetheydiscountedallofmyexperience.TheysaidthatI
didnthavetherequiredexperience.Ihadtojoinalotoforganizationsandreachouttoalotof
contactstogetcredibilityandbackingbeforegettingcertification.Sheadded,Caltranshasbeen
combativeandadversarial.Theymakeusfeellikewearedoingsomethingwrongforworking
withintheparametersoftheprogram.
Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
mentioned,FromwhatIrecallthe[certification]processwasdifficult.Ittookefforttax
records,forms,notary.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatthecertificationprocesswasdifficult.Shesaid,Theprocesswasintensive.
Smallbusinessesdonthavetimetodoallthispaperworkandactuallydorealworkatthesame
time.
Interviewee#13,theAfricanAmericanfemaleownerofanoncertifiedtruckingcompanystated,
Thecertificationprocessiscumbersome.Shereportedthatthebiggestdisadvantageof
certificationwasthesignupprocess.Shestated,Wehadtomeetcertaincriteriaandgetallthe
materialstogether.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatthecertificationprocessisdifficult.Hesaid,Itisalotofpaperworkanditis
notclearwhattheadvantageis.Ihaventseenanybenefitfrommycertificationyet.Isthere
someonewhocanhelpmefindabenefittoalltheworkIdid?Hesaid,[Thecertification
process]wasextremelypaperintensiveanddifficulttomanagewhilerunningasmallbusiness.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
firmisnotcertifiedasanMBEorDBE.Hesaid,WeweretoldthatwecouldntqualifyasanMBE
becauseofeducationbutIthinkthisiswrong.Wearedefinitelyinterestedinlearningmore
abouthowtobecomecertified.saidthatthedisadvantagestobeingcertifiedwouldbe
paperwork.Hesaid,Iveheardthereisalotofpaperwork[togetcertified].Weareonthejob
sixdaysaweek.Whenwouldweeverfindtimetodothis?
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthatthe
disadvantagesofcertificationarethepaperwork.Hesaid,Itwasalotofpaperworkand
bureaucracytogetthecertification.Thefirsttimewasverydifficultbutthepaperworkhas
gotteneasierastimehasgoneonandwelearnedmoreaboutit.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE124

Interviewee#25,theHispanicfemalepartnerinanoncertifiedconsultingfirm,reportedthat
sheonceattemptedtogetthecompanycertifiedasanMBE/WBE,butabandonedthatattempt
whenthegovernmentofficialrequireddocumentationtoproveherHispanicethnicity.She
reportedthattheCaltransofficialaskedfordocumentationofhergrandmothersethnicity.This
femaleHispanicpartnerinanoncertifiedconsultingfirmsaidofthecertificationprocessthat,
Itwassohumiliating.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,felt
thatthecertificationprocesswasverydifficult!
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,statedthatthecertificationprocessisdifficult.Hesaid,Yougivethem
theinformation,andtheyaskformore.Thentheyinterpretit.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,MBEcertificationisoverlyburdensome.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Therecertificationprocessiseasy,but
theinitialcertificationprocessischallenging.Healsosaid,Thepaperworkisasnowstorm.I
justwentthroughtheCityofOaklandtogetthislocalsmallbusinesscertification.MyGodits
justridiculous.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saidaboutthecertificationprocessthatitwasdifficultformycompanybecauseofthetime
constraints.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,said,Themost
difficultoneisthestateDBE.Ittakesanumberofyearstaxreturns.Italsohasalottodowith
yourperformance,whoyouworkedfor,andthesizeofjobs.Thatonehasthemostprocedures.
IntervieweePH#10,thefemaleownerofaWBEcertifiedmanagementconsultingfirm,said,
Thefirstbarrierisjustthecertificationprocess,itself.Whathappensisthatifyouhavea
companylikemine,Iamoneperson,youaregoingtocrushmeundertheweightoftheprocess.I
cantgiveitmyfullattentionwhileImouttryingtowork,tryingtowinjobs,andthentherules,
statedin49CFR,Imean,itsays90days.IturnedinmyapplicationonJanuarythe10th.Iwas
certifiedJuly1st.
IntervieweePH#26,thefemaleownerofaDBE/SBEcertifiedadministrativeservicesprovider,
said,IamcertifiedDBE,SBE.WhydoIneedtogothroughanothercertificationprocesstoget
UDBE,XYZ,whateveracronymyouwantqualificationsyouwantmetohave.Otherwise,Im
spendingallofmytimefillingoutpaperwork.Itsjustconstant.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE125

IntervieweeWT#3,theownerofanoncertifiedtruckingfirm,stated,Halfofthereasonthere
arenotenoughcertifiedtruckersinthisareaisduetotheprocessinvolvedingettingcertifiedas
aDBEcompany.Theapplication,interviewsandfollowupdocumentationiscompletely
overwhelmingandalmostimpossibletoprovide.Thisiscausingmanycompanieslikeours,to
ultimatelybeweededoutofthecertificationprocesscompletely.
IntervieweeWT#25,theVietnameseownerofatruckingfirm,said,Iamwritingthisletter
becauseIfeelthattheDBEcertificationprocessandguidelinesareunfair.Aprogramsuchas
DBEissupposedtocreatefairnessandequalopportunitiesforsmallbusinessownerssuchas
myself.Yetbecomingcertifiedhasnearlybecomeadiscriminant[sic]actwithinitself.Muchof
theinformationrequiredtoattaincertificationforDBEisextremelypersonal.Informationthatis
insignificanttomyoriginasbeingdisadvantagedoratruesmallbusinessownerisrequestedfor
certification.Telephonebills,creditcardstatements,personaltaxinformationandproofofhowI
attainedfundstostartmybusiness,allofwhichIfeelareunnecessaryinprovidingproofofmy
beingasmallbusinessownerofVietnamesedecent.WhyhasbecomingcertifiedforDBEbecome
sodifficult?Asamatteroffact,Ihavefriendswhohaveappliedfortheircertificationthatfind
themselvesinthesamesituationwiththesamequestionsasmyself.Noneofthemhavebeen
certified.Mylastefforttobecomecertifiedresultedinaresponseletterthatrequestedeven
morethoroughinformationbesubmittedinatimeframeoflessthan14days.Thattomeseems
likeashortwindowofopportunitypurposelycreatedtomakeapplyingdifficult.
TheAsianPacificAmericanownerofanengineeringcompanyandrepresentativeofthe
AmericanCouncilofEngineeringCompaniesCaliforniaindicatedthathehastogothrougha
separateprocessforLAMetro.HesaidthatitwasthesameformastheDBEcertificationform.
PrimesseekingLAMetroworkarerequiringhisfirmtobeseparatelycertifiedwiththatagency
[IntervieweeSM#2].
IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedcompany,indicated
thatthereisaperceptioninCaliforniathateveryone[eachagency]requirestheirown
certification.HesaidthatthereisconfusionaboutwhethereachagencyhastohaveitsownDBE
certification.
ArepresentativefromSanMateoCountyTransitDistrictrespondedthatLAMetrowasoperating
asmallbusinessprogram,whichwaswhyLAMetrowasrequiringaseparatecertification
[IntervieweeSM#5].
Someminorityandfemalebusinessownerssaidthattheywerenotfamiliarwiththeprogram
orthecertificationprocess.Forexample,Interviewee#24,theHispanicfemaleownerofanon
certifiedasphaltpavingcompany,saidthatherfirmisnotcertified.Shesaid,Wewerentaware
oftheprogramorhowtoqualifyforit.
PerceivedValuetoCertification.
Someintervieweesperceivedavaluetocertification.Interviewee#1,theHispanicmaleowner
ofanoncertifiedconstructionandconcretebusiness,statedthatcertificationmightallowmeto
possiblypickupmoreworkandinthiseconomyyouneedtofindworkwhereyoucan.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE126

Interviewee#4,theAfricanAmericanownerofaDBE/MBE/SBEcertifiedengineeringcompany,
mentionedthatthebenefitsofcertificationincludethepercentageofstateandlocalcontracts
beingsetasideforthesecertifiedparties.Hedidnotmentionanydisadvantagesofcertification.
Hementionedthatapproximately30percentofhisworkresultsfromprojectswith
DBE/MBE/WBEgoals.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthatthebenefitsofcertificationarethatthe
companyisconsidered,registered,andidentifiedasadisenfranchisedcompanyandthatleadsto
opportunities.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatsheseesthebenefitsofcertificationaspossiblyleadingtomore
businessandpossiblyprovidinggreatervisibilitytohercompanywithotherbusinesses.She
statedthatitisabenefittobecertifiedbecauseitcanopenupopportunitiestoworkwiththe
governmentandCaltrans.IseeCaltranstrucksoutthereandIwanttobeapartofit.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthattheadvantagesofcertificationaresimplefortheircompany.Shesaid,We
meetalotofcontractorsatbidmeetingswhoneedqualifiedcertifiedfirmstoprovideservices
likeweprovide.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
wastetransportationcompany,mentionedthateachoftheacquiredcertificationshashelped
themgetbusiness.HeaddedThebenefitsofthecertificationcomefromthecontractswith
requiredminimumsforcertifiedcompanies.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthebenefitsofcertificationarethatwegetrequestsforbidsfrequently;it
helpsgetournameoutthere.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Oneoftheprimarybenefitsofbeingcertifiedis
thatitshowswearelegitimate.ItalsohelpswhenthebigcontractshaveWBErequirements.
Interviewee#17,thewhitemaleestimatoratanoncertifiedwomanownedtruckingcompany,
indicatedthathehadsomepastexperienceinworkingwithotherDBEfirmswithaprevious
employer.Hesaidthathethinksthebenefitswouldbethatyoumightgetsomebetter
opportunitiestocompeteforwork.Hesaid,Iknowthatwevelostbidstocertifiedfirms.
Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstructioncompany,
mentionedthatthereareafewminorbenefitsofcertificationandonemajorbenefit.Hestated,
Theonlywaytogetthe5percentsegmentinthepublicsectoristobeDVBEcertified.Thisis
thebiggestbenefitofcertificatio . n
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE127

Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthat
althoughtheyarenotcertified,hethinksthattheadvantagestocertificationwouldbemore
work.Hesaid,IknowthatthereareopportunitiesforminorityownedbusinessesthatIdliketo
tapinto.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathe
seesthebenefitsofcertificationasawaytogetexposureforjobsandthatsomeofhiscustomers
needcertifiedfirmsandhefillsthatneed.Hesaid,Weweretoldseveralyearsagothatwe
neededtobecertifiedsothatwecouldcompeteforworksowedid.Thecertificationhasledto
somegoodopportunities.
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,statedthatthecompanyisnotcertified,buttheyareworkingonit
becausecertificationshouldprovidemorebusinessopportunities.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,saidone
benefittocertificationisbidpreferencesifpricesareclose.
Interviewee#38,thewhitemalepartnerofacertifiedwomanownedenvironmentalconsulting
firm,said,Ithink[certification]increasesouropportunities,especiallyinthiseconomyand
especiallywithgoalsbecomingmoreimportant.
IntervieweePH#1,theownerofaDBEcertifiedenvironmentalconsultingfirm,said,Welike
thisprogram,theDBEprogram.Itisagoodprogram.Iseeitworkedforus.Youhavetoknow
howtonavigatethroughit,throughthesystem,andtobuildrelationshipswithcompanies.
Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionandconcretebusiness,
statedthatheisnotsurehowdifficultthecertificationprocessis,buthesaid,Iwouldliketo
becomecertifiednowbecauseofthepoorprivatesectormarket.Findingworkintheprivate
sectorishardrightnow.
Someminorityandfemalebusinessownersperceivedlimitedornovaluetocertification.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthattheyarenotcertifiedwiththestateorlocalagencyasan
MBE/WBEorDBE.Hesaid,Thereisnoadvantage.Idontseeanypayoffforthehassleof
obtainingcertification.
Interviewee#7,theAfricanAmericanfemalecoownerofanoncertifiedconstructionand
haulingcompany,saidthatonedisadvantageofcertificationisthatitisnotworththetimeit
takestocompletetheprocess.Shecontinued,Itprobablydoesntleadtotheincreasein
businessthatyouthinkitwillsoIdidntcompletetheprocess.Shefurtherstatedthatshe
soughtoutthehelpofabusinessthatspecializesinhelpingwithcertificationbutthatthis
processwasdiscouraging.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE128

Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
mentioned,IwascertifiedasanMBEwiththeStateandtheCityofFresnosevenyearsago.Idid
notfindanybenefitwithbeingcertified.Theprocesswascumbersomeanditseemedlikethe
samecertifiedvendorswerebeingchosenforeverything.Ididntseethepointinpayingto
continuecertificationasIwasntgettinganythingoutofit.Headded,Ididntgetanybenefit
fromit.Itwasmoreofahasslethananything.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatthedisadvantagetocertificationwastheamountofpaperworkrequiredto
gainandmaintaincertification.Sheadded,Weworkwithalargeengineeringfirmwhopushed
ustogetcertifiedbutwehaventseenanythingcomefromourcertification.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,statedthatthedisadvantageofcertificationisthatitdoesntreallyleadtothatmuch
work.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,in
responsetothequestionofwhatshesawasbenefitsofcertification,repliedsimply,None.
Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepaving
company,statedthathisfirmisnotcertifiedandistoonewtoknowhowadvantageousthis
mightbe.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedAsianPacific
Americanfemaleownedenvironmentalcompany,said,Idontknowifthereareanybenefits.
Peoplefindyouandtheygodownthelistandsay,Ineedtohireapersonwhoscertifiedbythe
state.
IntervieweePH#3,theownerofaDBEcertifieddatacollectioncompany,saidinthebeginning,
Ithought[myDBEcertification]wasafeatherinthecap,youshouldmentioniteverychanceyou
get,butIhavenotseenanyfruitfromtheeffort.Myquestionis,whyarewenotpromotingit?
IntervieweePH#19,theownerofaDBEcertifiedsmallbusiness,said,Myself,asasmall
businessownerandbeingpartoftheDBEcertification,atfirst,Iwasecstatic,youknow,justto
knowthatIhadgonethroughthepaperworkprocess,anditwasalldone,andIhadbeen
approvedfortheDBEcertification.Butitsbeenabout15monthsnow,anditreallyhasntdone
muchforme,unfortunately.SoIlookatit,anditslike,okay,whatdidIdowrong,orwhats
wrongwiththeprocess?
IntervieweeSM#1,aHispanicAmericancontractorandrepresentativeoftheHispanic
ContractorsandSuppliersAssociation,said,Itrytogetmyguys[Latinocontractors]toget
certified,butIcantshowthemanysuccessstories.IkeepsayingtoCaltrans,Weneedwinners
togetplayers.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE129

Someintervieweesidentifiedcertaindisadvantagestocertification.Someinterviewssaidthat
thereisanegativestigmatocertification.Interviewee#6,theAfricanAmericandiversity
marketingmanagerofanMBE/SBE/DBEcertifiedenvironmentalconsultingcompany,stated
thatthedisadvantagesofcertificationarethattherestofthefirmsthatarenotcertifiedview
yourcompanydifferently,inamorenegativelightduetothelackofeducationaroundwhata
DBEcertificationentails.Theviewinthemarketplaceisthatcompanieswiththatcertification
havepoorqualificationsandarenotqualified.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatthedisadvantagestocertificationarethatthe[agencies]seemtoactually
discourageyou.Goalsaregood,buttheyarehardtofigureout.WhatistheadvantagetomeifI
amcertified?Thisshouldbeclearer.
Interviewee#36,theAsianPacificAmericanmaleownerofacertifiedengineeringcompany,
saidonedisadvantagetocertificationisthatPeoplelookatyoulikeyougottheworkonly
becauseofyourcertification.
IntervieweeSM#3,theNativeAmericanownerofanengineeringrelatedcompany,reported,
Wevefoundanexpectationthatweshouldprovidebelownormalrates[becausewerea
UDBE].
RecommendationsRegardingtheCertificationProcess.
Someintervieweesrecommendedthatthecertificationapplicationand/orrenewalprocessbe
simplifiedand/orcondensed.Interviewee#5,theownerofanoncertifiedconcretepaving
company,statedWehaveheardfrombusinessassociatesthatthecertificationprocessisabit
difficultandrepetitive.Ifitcouldbeshortenedandsimplifiedthatwouldbebeneficialto
businesses.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthecertificationprocessisnoteasy.Hesaid,Thesystemishard
tonavigate.Theyshouldmakeiteasiertofigureouthowtodoit.Headdedthatthecertification
processcouldbeimprovedbymakingtheCaltranswebsiteeasiertonavigate.Hesaid,Allthis
informationshouldbeontheirwebsite.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatherrecommendationsforimprovingthecertificationprocessareforCaltrans
tobemoretransparent.Shesaid,Justsayupfrontwhatyouwantfordocumentationanddont
actsoadversarial.ItwasinsultingtomethattheywereimplyingthatIwassimplyafront
becauseIwasawoman.
SomeintervieweesrecommendedthattheStatesimplifythecertificationprocess.Interviewee
#5,theSubcontinentAsianAmericanownerofanoncertifiedconcretepavingcompany,stated
Wehaveheardfrombusinessassociatesthatthecertificationprocessisabitdifficultand
repetitive.Ifitcouldbeshortenedandsimplifiedthatwouldbebeneficialtobusinesses.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE130

Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthecertificationprocessisnoteasy.Hesaid,Thesystemishard
tonavigate.Theyshouldmakeiteasiertofigureouthowtodoit.Headdedthatthecertification
processcouldbeimprovedbymakingtheCaltranswebsiteeasiertonavigate.Hesaid,Allthis
informationshouldbeontheirwebsite.
Interviewee#9,theAfricanAmericanfemaleownerofaDBEcertifiedconstructionandhauling
company,saidthatherrecommendationsforimprovingthecertificationprocessareforCaltrans
tobemoretransparent.Shesaid,Justsayupfrontwhatyouwantfordocumentationanddont
actsoadversarial.ItwasinsultingtomethattheywereimplyingthatIwassimplyafront
becauseIwasawoman.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,saidIt
couldbedonequicker.Mycertificationtooksixmonths.
Interviewee#11,thewhitefemaleownerofafederallycertifiedwomanownedengineering
business,saidthatshewouldrecommendtheysimplifytheprocess.Shesaid,Itiswaytoo
complicated.Whydotheyneedtohavepersonalfinancialinformationthatisntrelevant?They
shouldbasecertificationofyourqualificationsnotonfinancialinformation.
Interviewee#15,theHispanicAmericanofficemanagerofaSBE/DBEcertifiedconcrete
company,saidthatthecertificationprocesscanbestreamlinedquiteabit,thattherearetoo
manyrepetitiveitems.
Interviewee#23,theHispanicmaleownerofanoncertifiedconstructioncompany,saidthathis
recommendationforimprovingthecertificationprocesswouldbetomaketheprocessmore
transparentandtomakethebenefitseasiertotrack.Hesaid,Makeiteasiertogetjobsasa
primeinsteadofjustasasubandmaketheprocesseasiertotrack.
Interviewee#26,thefemalemajoritypresidentofaWBEcertifiedconstructioncompany,
recommendedthatcompaniesshouldhavejustonenumberforgovernmentidentification
purposes.Wehavesomanynumberstokeeptrackofandhavetolookforallofthemwhenits
timetorecertify.
Interviewee#32,thewhitemaleseniorprojectmanagerofanoncertifiedSubcontinentAsian
Americanelectricalcontractor,said,TheyshouldstreamlinetheMBEcertificationprocessand
reduceitfromsixmonthstotwoweeks.
Interviewee#33,theAfricanAmericanmaleownerofacertifiedconcretecompany,said,It
couldbedonequicker.Mycertificationtooksixmonths.
Interviewee#38,thewhitemalepartnerofacertifiedwomanownedenvironmentalconsulting
firm,saidthatthedifficultyanddelaysingettingthefirmcertifiedasaWBEconstituteda
barrier.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE131

IntervieweePH#17,thefemaleownerofaDBEcertifiedmaterialssupplierfirm,said,Iwas
directedonwhattodoto getthecodeschanged.Thatiswhenmynightmarebegan. Neverin
my64yearshaveIbeentreatedsopoorlyasI wastreatedby[specificCaltransstaffmember]of
thecertificationunit. Even[specificCaltransstaffmember],anotheremployeeinthesame
office, hadsaidtherehadbeenseveralcomplaintsagainsther. SherecommendedthatIfilethe
complaint,whichIdid. Igotaletterbackstatingthat[she]didnothingwrong,endofstory.My
requestforchange ofcodeswasdenied.[She]evenaccusedmeof lying.Ifindithardtobelieve
thatmy livelihooddependsonsomeonewhoworkswithCaltranson adailybasis.
SomeintervieweesrecommendedthatCaltransprovidemoretrainingorassistance
concerningthecertificationprocess.Interviewee#7,theAfricanAmericanfemalecoownerofa
noncertifiedconstructionandhaulingcompany,saidthatherrecommendationsforimproving
thecertificationprocesswouldincludeensuringthatagenciesthatworkwithCaltransto
providecertificationservicesshouldnotdiscouragecompanieslikehersfromcompletingthe
process.Shesaid,Thefirmweworkedwithwasnothelpfulandactuallydiscouragedusfrom
completingthecertificationprocess.
Someintervieweesrecommendedthatthecertificationprocessshouldhavemoreoversight.
Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,reported,
Therearetoomanyfronts,itneedstostop.Thereisnotenoughinvestigationtothecompanies
applying.
Interviewee#16,thewhitemalevicepresidentandcoownerofawomanownednoncertified
powerandcommunicationconduitfirmstated,Ithinkthatthe[governingbodies]should
conductonsiteinspectionsonceinawhile.Thiswouldhelpsortoutthegoodvendorsfromthe
badvendors.
OneintervieweerecommendedthatCaltransconductedinpersoninterviewsaspartofthe
certificationprocess.Interviewee#38,thewhitefemaleprincipalandpartnerofaWBEcertified
environmentalconsultingfirm,whenaskedifshehadanyrecommendationsaboutimproving
thecertificationprocess,said,IrecallthatwhenIdidthisthefirsttimein1994thatIwas
actuallyinterviewed,andIthinkthatwouldbevaluable.Inthisparticularsituation,when
CaltransrecentlydeniedthecompanysapplicationforWBEcertification,therewasno
conversationatall.
Someintervieweesrecommendedmorecoordinationamongcertifyingagencies.The
representativeofthePortofLosAngeles[IntervieweeSM#13]recommendedcreationofastate
widedatabasewherealllocalcitiesusethesamesystem.Heindicatedthateachcityandprivate
company(suchasNorthrupGrummanorToyota)hasitsowndatabases.[Ifyoureaminority
ownedfirm]youneedafulltimeITpersontomakesureyoureonallthesedatabasesandyou
haveyourcertifications.
IntervieweeSM#15,afemalebusinessownerandrepresentativeoftheSouthernCalifornia
ContractorsAssociation,agreed.Oneofmybiggestcriticismsiswehavesomanycertifying
agencieswithdifferentrequirements.Ifitwasuniversal,itwouldbenefiteveryoneinsomany
waysDBEcompanieslookingforworkaswellasagenciescontractingthework.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE132

Oneintervieweehadnorecommendationbecausetheythoughtthecertificationprocess
workedwell.Interviewee#21,thewhitemaleownerofaDVBEcertifiedhighwayconstruction
company,stated,Ihavenorecommendationsaboutimprovingthecertificationprocess.It
appearstobeworking.
I.OtherRecommendationstoCaltransOfferedbyInterviewees
Someintervieweessuggestedreplacingthemeetinggoalsorshowinggoodfaithelementsof
theProgramwithincentivesorallowancesforprimecontractorstouseDBEs.Interviewee
SM#10,awhitemaleownerofaconstructionfirm,said,Ithinkweneedtolookatsomehowto
putallowancesincontractssothatthemoneyisintheretoachievethegoalsthatCaltranswants.
Andthenwetakeouttheissueofthelowbidderandthelowestcostandwehaveanallowance
asabiditemthatweallwanttomake.HerecommendedthatCaltranssetacontract
specificationforinclusionofDBEswithadollaramountthattheprimecontractorcouldthen
use,inaflexibleway,forthispurpose.
SomeintervieweesdiscussedencouragingDBEutilizationassecondtiersubs.Participantsin
onestakeholdermeetingsaidthatitwouldbebeneficialtoencourageDBEutilizationassecond
tiersubcontractors[workingassubcontractorstoothersubcontractors].Whenaskedwhetherit
iscommontomeetaDBEcontractgoalthroughsecondtiersubcontractors,participantsina
stakeholdersgroupmeetingsaidno.TheHispanicAmericanownerofanengineeringfirm
[IntervieweeSM#12]indicatedthatthatwasprettyrareithardlyeverhappens.Thewhite
maleownerofaconstructionfirm[IntervieweeSM#10]agreed,notingthatitsgottobea
really,reallyhugecontractthatallowsthoseguystogooutandmakethateffort,otherwiseits
nothappening.
ArepresentativeofthePortofLosAngeles[IntervieweeSM#13]saidthathewasawareofLos
AngelesWorldAirportseffortstoachieveDBEparticipationassecondtiersubsfora$1billion
terminalproject.ThatwastheonlytimehewasawareofDBEparticipationatthesecondtier
level.
ArepresentativeofthePortofLongBeach[IntervieweeSM#14]talkedabouta$700million
designbuildproject.Underthedesignbuildlaw,primesareallowedtopicksubsbasedon
eitherlowbidorbestvalueprocess.Underthebestvalueprocess,thePortofLongBeachis
expectingthatsubswillbegettingbidsfromsecondtiersubs.
IntervieweeSM#1,aHispaniccontractorandrepresentativeoftheHispanicContractorsand
SuppliersAssociation,explainedthathehashaddifficultydoingbusinessasasubcontractorto
othersubcontractorsonaproject.Hesaidthathewillaskprimecontractorsfornamesofkey
subcontractorstheyworkwith,andtheprimeswillgivehimthosenames.Illcallthosesubsup
dotheyreturnmycall?No.Why?Becausenobodysjumpingonthemtomeetanygoals.The
goalshavetotranslatedowntothesubs.Oncethegoalstranslatedowntothesubs,allkindsof
wonderfulthingsaregoingtohappen,becausethatswheretheworkis.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE133

SomeintervieweesrecommendedthattheStatehaveanadvisordedicatedsolelytoassisting
smallbusinessesordevelopasystemtosharewhatmakesfirmssuccessful.Interviewee#7,
theAfricanAmericanfemalecoownerofanoncertifiedconstructionandhaulingcompany,said
thatCaltransshouldprovideonepersonthatbusinessescancontactforguidance.Shesaid,
Thereshouldbeanadvisorforsmallbusinesseswhoisdedicatedtoansweringquestionsabout
theprocessfromstarttofinish.Onegotoperson.
AsmallbusinessownerandrepresentativeoftheCaliforniaSmallBusinessAssociation
[IntervieweeSM#4]recommendedidentifyingwhatmakessomeDBEssuccessfulandthen
sharingthosebestpracticeswithotherfirms.
SomeintervieweesrecommendedthattheStateimproveitscommunicationwithinagencies
andnotificationofworkopportunities.Interviewee#4,theAfricanAmericanownerofa
DBE/MBE/SBEcertifiedtrafficengineeringcompany,suggestedthatCaltransdoamonthly
emailpushtoqualifiedMBE/WBE/SBEs.Hestated,ItwouldbeusefulforCaltranstosendout
monthlyemailtoqualifiedbusinesses.
Interviewee#6,theAfricanAmericandiversitymarketingmanagerofanMBE/SBE/DBE
certifiedenvironmentalconsultingcompany,statedthat,Caltransshouldhaveabetteralerting
systemthatwouldallowustoknowfurtherinadvanceaboutopportunitiesandwouldallowus
tobettersetasidetimetorespondtotheseopportunities.
Interviewee#14,theAfricanAmericanoperationsmanagerofanMBE/WBE/DBEcertified
hazardouswastetransportationcompany,mentionedthathethinksthatCaltransshoulddo
moretoenhancetheprograms.Hestated,Caltransshouldsendoutinformationasopposedto
ushavingtodigforitonaweeklybasis.
SomeintervieweesrecommendedthattheStatemakeworkopportunitiesmoreaccessibleto
smallbusinesses.Interviewee#1,theHispanicmaleownerofanoncertifiedconstructionand
concretebusiness,saidCaltransshouldopenupmoreopportunitiestosupporttheworkdoneby
smallbusinesses.Hesaidtheyshouldhelpremovebarrierslikeexcessivebondingand
insurancerequirements.Costshaveincreasedbutrateshavent.HeconcludedthatCaltrans
shouldexamineratesandbudgetstoaccountforrisingcostsofequipmentandmateria ls.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthereshouldberegionalliaisonsforsmallbusinesseswhoare
dedicatedtohelpingthemfindwork.HeaddedthatCaltransshouldhavebetterwebsiteswith
accesstoinformationforsmallfirms.Hesaid,Everythingiselectronictoday.Itshouldntbethat
hardtohaveinformationgearedforsmallbusinessesrelatedtoCaltranscontracts.
Interviewee#22,theHispanicmaleownerofanoncertifiedconstructioncompany,said,We
onlywantafairshotatgettingtheworkweknowisoutthere.Bymakingitsocomplexandtime
consumingtojustbid,youareleavingoutalotofgoodsmallfirmswhocandotheworkbetter
andcheaper.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE134

Interviewee#23,theHispanicmaleownerofanMBEcertifiedconstructioncompany,saidthat
hewouldrecommendmakingfinancingmoreaccessible.Hesaid,Thethingthatwouldreally
helpisfinancingandaccesstotheworkthatonlygoestobigfirmsnow.
Interviewee#24,theHispanicfemaleownerofanoncertifiedasphaltpavingcompany,said,
Werehardworkersandjustwanttheopportunitytodowork.Giveustheopportunityandwe
willgetthejobdone.Therearealotofsmallbusinesseslikeourswhocandotheworkbetter
andcheaperthanthebigcompaniesthatcontinuallygetthework.
Interviewee#27,themalevicepresidentandtreasurerofanoncertifiedwomanowned
constructioncompany,said,Manycontractsaretoobigandsmallbusinessescantgetbonding.
Thebreakoutintosmallercontractswouldbehelpful.
Interviewee#29,thewhitemaleownerofaconcreteandlandscapingcompany,said,Thebest
waytohelpasmallbusinessistoactuallyprovideprojectsthatareattainablebyasmall
business.Whichwouldbe,Iwouldsay,contracts$500,000andless.Maybeeven$50,000
contractsthrownintherenowandthen.Butyoucantsaywereallforsmallbusinessandthen
haveeverythingthatsoutthere$12to$800millionjobs.Andthedataisreallyloopedtoward
thatdirection.InoticedlatelythatCaltransisputtingalltheselargeamountofmoneyjobsa
billiondollarjob.Whynotmakeathousandmilliondollarjobsortwothousand$500,000jobs,
orbreakthesethingsupalittlebit,andsomeofthemarejustridiculousthewaytheystructure
them.Youlookatsomeofthesecontractsaregoingtheycouldhavetotallysplitthisintoseveral
contractsandhelpedoutcontractorsinthisstateinsteadofjusthelpingjustonelargecompany
thatmightnotevenbefromCalifornia.Theyrenotdoinganygoodforanybodydoingthat.
Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedfemaleAsian
PacificAmericanownedenvironmentalcompany,saidthatitwouldbehelpfuliftheywould
sendEmailstosmallbusinesseslettingusknowtherearecontractsoutthere.
Interviewee#38,thewhitemalepartnerofacertifiedwomanownedenvironmentalconsulting
firm,said,Weliketheideaofgoals.Makingsomeofthecontractmoniesavailablelikesplitting
largecontractsisprobablyausefulthing.Makingsurethatthereisntjustasuiteofconsultants
thatgetselectedtimeandtimeagain,butthatthereisarotation.
SomeintervieweessuggestedthattheStateimprovepaymentprocesseswithinState
agencies.Interviewee#34,theAsianPacificAmericanmalepresidentofanoncertifiedfemale
AsianPacificAmericanownedenvironmentalcompany,indicatedthatprimecontractorswere
slowmakingpaymentstosubcontractors.Hesuggestedthatthegovernmentshouldrequire
documentation[fromprimecontractors]thatallsubswerepaid.
OneintervieweerecommendedthatCaltransprovidetrainingonhowtousetheirwebsite.
Interviewee#16,thewhitemalevicepresidentandcoownerofaWBEcertifiedpowerand
communicationconduitfirmmentionedthatanyformofwebsitenavigationtrainingfrom
Caltranswouldbeveryuseful.Hestated,Idontknowhowtonavigatethewebsiteverywell.I
feellikeifitwereeasierthanitmightbebeneficialtomybusiness.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE135

OneintervieweerecommendedthattheStatedomoretopreventbidshopping.Interviewee
#12,thewhitefemaleownerofaWBE/SBE/DBEcertifiedcompany,recommended,Private
auditorsshouldbearoundonbiddaystopreventbidshopping.Caltransshouldalsoreprimand
primestopreventkickbacks.Theycouldsetupstingoperations.
SomeintervieweesrecommendedthattheStateprovidegreateroversightoftheMBE/WBE
andDBEPrograms.Interviewee#12,thewhitefemaleownerofaWBE/SBE/DBEcertified
company,reported,Therearetoomanyfronts,itneedstostop.Thereisnotenough
investigationtothecompaniesapplying.
Interviewee#16,thewhitemalevicepresidentandcoownerofaWBEcertifiedpowerand
communicationconduitfirmstated,Ithinkthatthe[governingbodies]shouldconductonsite
inspectionsonceinawhile.Thiswouldhelpsortoutthegoodvendorsfromthebadvendors.He
added,Thecertifyingboardsshouldconfirmcertificationsarelegitimate.Peopleareusingshell
companiesandjusttakingthe10percent.
IntervieweePH#23,thefemaleownerofaDBE/SBE/LSBE/CBE/MBE/WBEcertifiedresearch
firm,saidIwouldliketoseetheseIwouldliketoseesomeaccountabilityandhave,you
know,therebesomeprocedures,someoversightastohowthesecompaniesarefulfillingtheir
DBEcontracts,thetransportationcompanies.
SomeintervieweesrecommendedthatCaltransshouldbetterrecognizeDVBEs.Interviewee
#16,thewhitemalevicepresidentandcoownerofaWBEcertifiedpowerandcommunication
conduitfirm,stated,TheyshouldgiveahigherpercentagetoDVBEbusinessesthatarejust
gettingbackintotheworkplace.
Interviewee#28,thewhitemalepresidentofacertifiedmajorityDVBE,said,Caltransshould
includeDVBEstoo.whenaskedaboutrace/ethnicity/genderbasedmeasures.Headded,Some
minorityownedfirmsseemtobeownedandoperatedbyimmigrantswhodontspeakEnglish.
Veteranswhohaveservedtheircountyshouldnotbepenalizedbyawardingcontractstonon
Americans.DVBEsalsoemployvets,includingthosereturningfromIraqandAfghanistan.
Immigrantownedcompaniesthatbidlowpricesarelikelynotpayingprevailingwagesor
meetinginsurancerequirements.Caltransshouldthrowoutbidsthattheyknowaretoolowto
covermandatorycostsandacceptablematerials.
SomeintervieweesrecommendedthattheStatedomoretoencourageMBE/WBE/DBE
utilization.Interviewee#5,theSubcontinentAsianAmericanownerofanoncertifiedconcrete
pavingcompany,stated,Myrecommendationistoallocatemoreworktoactualethnicgroups
withsolidbusinessqualsandtoawardmoreminoritywork.
Interviewee#8,theNativeAmericanownerandpresidentofanoncertifiedelectrical
contractingbusiness,saidthatthecommitmentbyCaltranstotheDBE/MBE/WBEprogramsis
notclear.Hesaid,Caltransshouldreallyencourageparticipationbysmall/minoritycompanies.
Dontjustgiveitlipservice.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE136

Interviewee#10,theAsianPacificAmericanownerofanoncertifiedengineeringcompany,
recommendedthattheStateandCaltransshouldusemoreoutsidefirmsfordesigningand
reviewingengineeringwork.Heindicatedthatthisshouldbedonewithmoresmallfirm
requirements,includingDBE/MBE/WBEs.
Interviewee#11,thewhitefemaleownerofacertifiedwomanownedengineeringbusiness,said
thatitwouldbeusefulifCaltranswouldhaverealgoalsandtargetsforWBEsandsmall
businesseslikeoursthatwecouldunderstand.Itseemsliketheyonlygivelipservicetousing
firmslikeours.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatCaltransshouldnotjustgivelipservicetothecertificationprocess.Hesaid,
ItseemsliketheyactuallydiscourageDBEsfromdoingwork.Goalsaregoodtohavebutunless
youhaveawaytomakesuretheyaremeasured,itdoesntwork.
Interviewee#39,arepresentativeoftheYoungBlackContractorsAssociation,said,Ireally
thinkthateachdistrictshouldbepromotedinaDBEsituation,whetherthatsquarterlyor
annually.ThesesubsshouldbecheckingintoCaltranstogiveandupdatetheirinformation.In
theformofamixerofsomesorttofindoutwhosinterestedandwhoeachotherare.Togivethe
smallercontractorsabetterchancetobegintoworktogether.Youdontneedtohelpthebigguy.
Itsthesmallerguythatcreatesmoreofataxburdenifwedontgetthemworkingandgetthem
intoapositionofleadershipatsomepoint.
IntervieweeWT#12,thepresidentofaDBEcertifiedengineeringfirm,said,Ialsorecommendthat
PrimesneedtoshowproofsthatDBEsubmittalswereseriouslyaccountedforbyincludingintheir
bidsubmittalsanystatementwhetherornottheDBEsmeetthePrimecriteria,suchasthelowest
responsiblebidoranyjustificationfornotmeetingtheircriteria.
SomeintervieweesrecommendedthatthestateprovidebetteroutreachtoMBE/WBE/DBE
firms.Interviewee#15,theHispanicAmericanofficemanagerofanMBE/WBEcertified
concretecompany,stated,ItwouldbegreatiftherewerequarterlymeetingsofDBEstodiscuss
howtobetterutilizecertificationsandmakeitworkforus.Alsootherwaystomeetcontractors
wouldbegreat.
Interviewee#18,theAfricanAmericanmaleownerofacertifiedDBEtelecommunications
company,saidthatCaltransneedstomaketheadvantagesofbeingaDBEmoretransparent.He
said,Thereshouldbeabetterpayoffforgoingthroughtheprocessofgettingcertified.
Interviewee#35,theAfricanAmericanmaleownerofacertifiedelectricalcompany,said,I
recommendthatprebidmeetingsbeheldwithDBE/MBE/WBEstoadvisethemofjobsand
providefreesetsofplans.HeaddedthatCaltransshouldhaveoutreachprogramsthatbring
businessestogetherforgovernmenttoseewhatsavailable,andawebsitewithdiversity
statistics.
IntervieweeSM#13,arepresentativeofthePortofLosAngeles,recommendedcreatingavideo
aboutprogramsandputtingitontheweb.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXJ,PAGE137


APPENDIXK.
DetailedDisparityResults

FigureK1(2pages) Page1of2
FigureK : 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
Agency
Caltransandlocalassistance
Caltrans
Localassistance
Fundingandprogram
Allfundingsources
Federalwithraceconsciousprogram
Federalwithoutraceconsciousprogram
State
Timeperiod
All
20072008
20092010
Type
Transportationconstructionandengineering
Construction
Engineering
Contractrole
Prime/Sub
Prime
Sub
Region
California
North(District1,2and3)
BayArea(District4)
Central(Districts5,6,9and10)
Southern(Districts7,8,11,12)
Contractsize
All
Under$2M
Under$500k
Over$2M
Over$500k
ComponentsofDBEgoal
AnalysisofpotentialDBEs
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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X
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X
X
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X
X
X
X

FigureK1(2pages) Page2of2
FigureK : 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52
Agency
Caltransandlocalassistance
Caltrans
Localassistance
Fundingandprogram
Allfundingsources
Federalwithraceconsciousprogram
Federalwithoutraceconsciousprogram
State
Timeperiod
All
20072008
20092010
Type
Transportationconstructionandengineering
Construction
Engineering
Contractrole
Prime/Sub
Prime
Sub
Region
California
North(District1,2and3)
BayArea(District4)
Central(Districts5,6,9and10)
Southern(Districts7,8,11,12)
Contractsize
All
Under$2M
Under$500k
Over$2M
Over$500k
ComponentsofDBEgoal
AnalysisofpotentialDBEs
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
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X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X

FigureK2.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
15,446
4,509
1,431
3,078
110
542
287
1,661
343
135
$11,397,030
$1,434,119
$455,493
$978,626
$14,407
$82,340
$27,471
$791,296
$50,819
$12,292
$13,330,858
$1,680,388
$525,843
$1,154,545
$20,315
$115,316
$30,988
$924,753
$63,174
12.6
3.9
8.7
0.2
0.9
0.2
6.9
0.5
18.1
4.3
13.8
0.9
1.8
0.3
9.8
1.0

5.5

0.3

5.2

0.8

1.0
0.0

2.8

0.6
69.7
92.6
62.6
16.5
47.3
84.3
71.1
45.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
2,770
858
1,908
89
497
47
967
308
4
0
0
$449,206
$79,720
$368,975
$9,163
$71,691
$8,205
$262,817
$17,099
$511
$0
$0
$559,802
$98,569
$460,721
$13,396
$98,775
$8,922
$317,226
$22,403
$511
4.2
0.7
3.5
0.1
0.7
0.1
2.4
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK3.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
14,636
4,285
1,365
2,920
106
471
269
1,603
342
129
$10,948,749
$1,391,861
$445,823
$946,038
$14,114
$66,061
$23,105
$780,506
$50,791
$11,461
$12,820,954
$1,631,117
$514,799
$1,116,318
$19,311
$95,331
$26,503
$912,078
$63,095
12.7
4.0
8.7
0.2
0.7
0.2
7.1
0.5
17.5
4.2
13.3
0.8
1.5
0.2
9.8
1.1

4.8

0.2

4.6

0.6

0.7
0.0

2.7

0.6
72.7
95.3
65.5
19.5
50.9
117.8
72.4
46.7
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
2,611
819
1,792
85
442
34
924
307
0
0
0
$415,185
$70,820
$344,365
$8,870
$59,136
$5,159
$254,129
$17,071
$0
$0
$0
$520,577
$88,754
$431,822
$12,419
$83,627
$5,847
$307,568
$22,361
$0
4.1
0.7
3.4
0.1
0.7
0.0
2.4
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK4.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
810
224
66
158
4
71
18
58
1
6
$448,281
$42,258
$9,670
$32,588
$293
$16,279
$4,366
$10,790
$28
$831
$509,904
$49,271
$11,043
$38,228
$1,010
$20,269
$4,546
$12,359
$43
9.7
2.2
7.5
0.2
4.0
0.9
2.4
0.0
33.0
5.4
27.6
4.8
11.0
2.8
8.0
1.0

23.3

3.3

20.1

4.6

7.1

1.9

5.5

0.9
29.3
39.8
27.2
4.1
36.0
31.9
30.4
0.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
159
39
116
4
55
13
43
1
4
0
0
$34,021
$8,900
$24,610
$293
$12,555
$3,046
$8,688
$28
$511
$0
$0
$39,225
$9,815
$28,899
$976
$15,148
$3,075
$9,658
$42
$511
7.7
1.9
5.7
0.2
3.0
0.6
1.9
0.0
0.1
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK5.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgramandState
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
10,582
2,883
817
2,066
33
345
227
1,168
206
87
$7,549,722
$1,015,586
$325,060
$690,526
$4,584
$51,541
$22,106
$587,439
$18,656
$6,201
$8,812,309
$1,160,920
$369,524
$791,396
$5,898
$72,665
$23,763
$666,127
$22,943
13.2
4.2
9.0
0.1
0.8
0.3
7.6
0.3
17.9
4.1
13.8
0.9
2.0
0.3
9.6
1.0

4.7
0.1

4.8

0.8

1.2
0.0

2.0

0.7
73.6
101.4
65.2
7.6
41.0
90.4
78.9
26.1
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,614
442
1,168
20
308
32
624
184
4
0
0
$286,250
$49,128
$236,611
$1,720
$41,278
$6,418
$179,032
$8,163
$511
$0
$0
$341,944
$58,605
$282,828
$2,477
$57,808
$6,418
$206,975
$9,151
$511
3.9
0.7
3.2
0.0
0.7
0.1
2.3
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK6.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgramandState
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
9,942
2,717
768
1,949
30
290
213
1,128
206
82
$7,188,704
$980,470
$316,674
$663,797
$4,294
$38,058
$18,597
$578,442
$18,656
$5,750
$8,403,581
$1,119,465
$359,999
$759,466
$4,909
$55,972
$20,199
$655,458
$22,928
13.3
4.3
9.0
0.1
0.7
0.2
7.8
0.3
17.2
4.1
13.2
0.7
1.6
0.2
9.7
1.0

3.9
0.2

4.1

0.7

0.9
0.1

1.9

0.7
77.3
104.9
68.7
8.1
42.8
134.1
80.4
27.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,503
415
1,088
17
268
22
597
184
0
0
0
$258,262
$41,482
$216,780
$1,430
$31,415
$4,121
$171,651
$8,163
$0
$0
$0
$309,410
$50,263
$259,147
$1,503
$45,695
$4,121
$198,677
$9,151
$0
3.7
0.6
3.1
0.0
0.5
0.0
2.4
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK7.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgramandState
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
640
166
49
117
3
55
14
40
0
5
$361,019
$35,116
$8,386
$26,729
$290
$13,483
$3,508
$8,997
$0
$451
$408,728
$41,455
$9,526
$31,929
$1,001
$16,928
$3,608
$10,392
$0
10.1
2.3
7.8
0.2
4.1
0.9
2.5
0.0
31.7
5.2
26.5
4.2
11.4
2.7
7.2
0.9

21.5

2.9

18.7

4.0

7.2

1.9

4.7

0.9
32.0
44.7
29.5
5.8
36.4
32.2
35.3
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
111
27
80
3
40
10
27
0
4
0
0
$27,988
$7,646
$19,831
$290
$9,863
$2,297
$7,381
$0
$511
$0
$0
$32,534
$8,343
$23,680
$973
$12,113
$2,297
$8,298
$0
$511
8.0
2.0
5.8
0.2
3.0
0.6
2.0
0.0
0.1
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK8.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithRaceConsciousProgram
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,864
1,626
614
1,012
77
197
60
493
137
48
$3,847,307
$418,533
$130,433
$288,100
$9,823
$30,799
$5,365
$203,858
$32,164
$6,091
$4,518,549
$519,468
$156,319
$363,149
$14,545
$42,752
$7,185
$258,113
$40,554
11.5
3.5
8.0
0.3
0.9
0.2
5.7
0.9
18.5
4.5
14.0
1.0
1.5
0.2
10.1
1.1

7.0

1.0

5.9

0.7

0.5

0.1

4.4

0.3
62.3
76.9
57.6
31.9
64.4
68.6
56.5
78.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,156
416
740
69
189
15
343
124
0
0
0
$162,956
$30,592
$132,364
$7,443
$30,412
$1,787
$83,785
$8,937
$0
$0
$0
$217,858
$39,964
$177,894
$10,919
$40,967
$2,504
$110,251
$13,253
$0
4.8
0.9
3.9
0.2
0.9
0.1
2.4
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK9.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithRaceConsciousProgram
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,694
1,568
597
971
76
181
56
475
136
47
$3,760,045
$411,390
$129,149
$282,241
$9,820
$28,003
$4,507
$202,065
$32,135
$5,711
$4,417,373
$511,652
$154,801
$356,851
$14,533
$39,501
$6,269
$256,062
$40,487
11.6
3.5
8.1
0.3
0.9
0.1
5.8
0.9
18.0
4.5
13.6
0.9
1.3
0.2
10.1
1.1

6.4

1.0

5.5

0.5

0.4
0.0

4.3

0.2
64.3
78.6
59.6
37.8
69.8
84.4
57.5
79.8
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,108
404
704
68
174
12
327
123
0
0
0
$156,923
$29,338
$127,585
$7,440
$27,721
$1,038
$82,478
$8,908
$0
$0
$0
$211,167
$38,492
$172,675
$10,916
$37,932
$1,725
$108,891
$13,211
$0
4.8
0.9
3.9
0.2
0.9
0.0
2.5
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK10.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithRaceConsciousProgram
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
170
58
17
41
1
16
4
18
1
1
$87,262
$7,142
$1,284
$5,859
$3
$2,796
$858
$1,793
$28
$380
$101,176
$7,816
$1,518
$6,298
$3
$3,341
$944
$1,965
$45
7.7
1.5
6.2
0.0
3.3
0.9
1.9
0.0
38.3
6.3
32.0
7.1
9.7
3.0
11.1
1.1

30.6

4.8

25.7

7.1

6.4

2.1

9.1

1.1
20.2
23.7
19.5
0.0
34.0
31.0
17.5
3.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
48
12
36
1
15
3
16
1
0
0
0
$6,033
$1,254
$4,779
$3
$2,692
$749
$1,307
$28
$0
$0
$0
$6,691
$1,472
$5,219
$3
$3,035
$778
$1,360
$42
$0
6.6
1.5
5.2
0.0
3.0
0.8
1.3
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK11.
Agency:CaltransandLocalAssistance
FundingandProgram:State
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
6,146
1,710
426
1,284
19
188
159
721
159
38
$2,853,857
$447,914
$147,342
$300,572
$2,582
$19,413
$13,173
$251,047
$12,510
$1,847
$2,865,226
$450,002
$147,854
$302,148
$2,598
$19,533
$13,254
$254,176
$12,587
15.7
5.2
10.5
0.1
0.7
0.5
8.9
0.4
19.7
4.6
15.1
1.1
2.3
0.3
10.2
1.2

4.0
0.5

4.6

1.0

1.6
0.2

1.3

0.8
79.6
111.7
69.8
8.1
29.3
181.3
86.9
36.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
953
234
718
11
177
26
362
142
1
0
0
$121,972
$23,730
$98,226
$1,000
$15,192
$4,747
$71,890
$5,397
$16
$0
$0
$123,236
$23,747
$99,473
$1,000
$15,192
$4,747
$73,137
$5,397
$16
4.3
0.8
3.5
0.0
0.5
0.2
2.6
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK12.
Agency:CaltransandLocalAssistance
FundingandProgram:State
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
6,009
1,672
413
1,259
17
178
153
715
159
37
$2,704,102
$438,322
$145,408
$292,914
$2,525
$16,833
$11,484
$247,729
$12,510
$1,833
$2,715,471
$440,410
$145,919
$294,490
$2,541
$16,938
$11,556
$250,867
$12,589
16.2
5.4
10.8
0.1
0.6
0.4
9.2
0.5
19.4
4.7
14.7
1.0
1.7
0.2
10.5
1.2

3.1
0.7

3.8

0.9

1.1
0.2

1.3

0.8
83.7
114.8
73.9
9.4
36.5
178.4
87.9
37.4
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
925
228
697
9
167
21
358
142
0
0
0
$113,744
$22,216
$91,528
$943
$12,611
$3,952
$68,624
$5,397
$0
$0
$0
$115,007
$22,233
$92,774
$943
$12,611
$3,952
$69,871
$5,397
$0
4.2
0.8
3.4
0.0
0.5
0.1
2.6
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK13.
Agency:CaltransandLocalAssistance
FundingandProgram:State
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
137
38
13
25
2
10
6
6
0
1
$149,755
$9,592
$1,934
$7,657
$57
$2,581
$1,689
$3,317
$0
$14
$149,755
$9,592
$1,934
$7,657
$57
$2,585
$1,692
$3,323
$0
6.4
1.3
5.1
0.0
1.7
1.1
2.2
0.0
26.1
3.5
22.7
3.5
13.6
0.6
4.7
0.3

19.7

2.2

17.5

3.4

11.9
0.6

2.5

0.3
24.5
37.3
22.6
1.1
12.7
200+
47.1
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
28
6
21
2
10
5
4
0
1
0
0
$8,228
$1,514
$6,698
$57
$2,581
$795
$3,266
$0
$16
$0
$0
$8,228
$1,514
$6,698
$57
$2,581
$795
$3,266
$0
$16
5.5
1.0
4.5
0.0
1.7
0.5
2.2
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK14.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgram
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,436
1,173
391
782
14
157
68
447
47
49
$4,695,866
$567,672
$177,718
$389,954
$2,002
$32,128
$8,933
$336,392
$6,145
$4,355
$5,947,083
$710,918
$221,671
$489,248
$3,297
$53,210
$10,469
$411,952
$10,320
12.0
3.7
8.2
0.1
0.9
0.2
6.9
0.2
17.0
3.9
13.1
0.8
1.9
0.3
9.3
0.9

5.1

0.2

4.9

0.7

1.0

0.1

2.4

0.7
70.2
95.5
62.6
7.2
48.2
55.2
74.6
19.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
661
208
450
9
131
6
262
42
3
0
0
$164,278
$25,398
$138,385
$720
$26,087
$1,671
$107,141
$2,765
$496
$0
$0
$218,709
$34,858
$183,355
$1,477
$42,616
$1,671
$133,838
$3,753
$496
3.7
0.6
3.1
0.0
0.7
0.0
2.3
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK15.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgram
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
3,933
1,045
355
690
13
112
60
413
47
45
$4,484,602
$542,148
$171,266
$370,882
$1,769
$21,226
$7,113
$330,712
$6,145
$3,917
$5,688,110
$679,055
$214,079
$464,976
$2,363
$39,073
$8,612
$404,618
$10,309
11.9
3.8
8.2
0.0
0.7
0.2
7.1
0.2
16.2
3.8
12.4
0.6
1.5
0.2
9.3
0.9

4.3
0.0

4.3

0.5

0.8
0.0

2.2

0.7
73.6
99.2
65.8
7.0
46.3
100.3
76.4
20.4
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
578
187
391
8
101
1
239
42
0
0
0
$144,518
$19,266
$125,252
$487
$18,804
$169
$103,026
$2,765
$0
$0
$0
$194,402
$28,029
$166,373
$560
$33,084
$169
$128,806
$3,753
$0
3.4
0.5
2.9
0.0
0.6
0.0
2.3
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK16.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgram
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
503
128
36
92
1
45
8
34
0
4
$211,264
$25,524
$6,452
$19,072
$233
$10,902
$1,819
$5,680
$0
$438
$258,973
$31,863
$7,591
$24,272
$951
$14,395
$1,887
$7,039
$0
12.3
2.9
9.4
0.4
5.6
0.7
2.7
0.0
34.9
6.2
28.7
4.7
10.1
4.0
8.6
1.2

22.6

3.3

19.3

4.3

4.5

3.3

5.9

1.2
35.3
47.0
32.7
7.8
55.1
18.2
31.5
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
83
21
59
1
30
5
23
0
3
0
0
$19,760
$6,132
$13,133
$233
$7,283
$1,501
$4,115
$0
$496
$0
$0
$24,306
$6,828
$16,982
$917
$9,532
$1,501
$5,032
$0
$496
9.4
2.6
6.6
0.4
3.7
0.6
1.9
0.0
0.2
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK17.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
TimePeriod:2007and2008
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
7,785
2,130
624
1,506
23
254
187
832
139
71
$6,436,279
$873,526
$296,693
$576,834
$2,766
$36,907
$17,448
$499,593
$14,964
$5,155
$7,606,712
$1,005,443
$339,466
$665,977
$4,059
$52,793
$19,053
$571,122
$18,949
13.2
4.5
8.8
0.1
0.7
0.3
7.5
0.2
17.5
4.0
13.5
0.8
2.0
0.3
9.5
0.9

4.3
0.5

4.7

0.7

1.3

0.1

2.0

0.7
75.7
112.2
64.9
6.9
34.6
82.9
79.4
26.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,187
345
840
15
230
13
456
126
2
0
0
$231,452
$40,924
$190,426
$1,031
$31,013
$2,695
$149,250
$6,438
$102
$0
$0
$279,329
$50,308
$228,919
$1,788
$42,864
$2,695
$174,410
$7,163
$102
3.7
0.7
3.0
0.0
0.6
0.0
2.3
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK18.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
TimePeriod:2009and2010
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
7,661
2,379
807
1,572
87
288
100
829
204
64
$4,960,751
$560,592
$158,800
$401,792
$11,641
$45,433
$10,023
$291,703
$35,855
$7,137
$5,724,146
$674,945
$186,377
$488,569
$16,339
$62,672
$11,922
$353,221
$44,415
11.8
3.3
8.5
0.3
1.1
0.2
6.2
0.8
18.9
4.6
14.3
1.1
1.6
0.2
10.2
1.2

7.1

1.4

5.8

0.8

0.5
0.0

4.0

0.4
62.3
70.3
59.7
25.4
68.9
86.6
60.8
65.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,583
513
1,068
74
267
34
511
182
2
0
0
$217,755
$38,796
$178,549
$8,132
$40,677
$5,510
$113,567
$10,662
$410
$0
$0
$280,473
$48,261
$231,802
$11,608
$55,911
$6,227
$142,816
$15,240
$410
4.9
0.8
4.0
0.2
1.0
0.1
2.5
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK19.
Agency:CaltransandLocalAssistance
FundingandProgram:Federal
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
(d)
%
columnc,row1)
(columnc/
Actualutilization
(e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
9,300
2,799
1,005
1,794
91
354
128
940
184
97
$8,543,173
$986,205
$308,151
$678,054
$11,825
$62,927
$14,298
$540,250
$38,309
$10,445
$10,465,632
$1,230,386
$377,989
$852,397
$17,757
$95,939
$17,659
$670,399
$50,644
11.8
3.6
8.1
0.2
0.9
0.2
6.4
0.5
17.7
4.2
13.5
0.9
1.7
0.3
9.6
1.0

5.9

0.5

5.3

0.7

0.8

0.1

3.2

0.5
66.6
86.8
60.4
19.4
54.2
60.0
66.5
47.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,817
624
1,190
78
320
21
605
166
3
0
0
$327,234
$55,990
$270,748
$8,164
$56,499
$3,458
$190,926
$11,702
$496
$0
$0
$436,566
$74,822
$361,249
$12,396
$83,584
$4,174
$244,089
$17,006
$496
4.2
0.7
3.5
0.1
0.8
0.0
2.3
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK20.
Agency:Caltrans
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
11,320
3,221
1,008
2,213
64
369
221
1,216
279
64
$9,051,314
$1,136,551
$363,640
$772,910
$8,281
$55,676
$24,884
$634,516
$43,284
$6,269
$9,051,314
$1,136,551
$363,640
$772,910
$8,349
$56,131
$25,088
$639,705
$43,638
12.6
4.0
8.5
0.1
0.6
0.3
7.1
0.5
17.1
3.6
13.4
0.9
1.7
0.3
9.8
0.8

4.5
0.4

4.9

0.8

1.0
0.0

2.8

0.3
73.6
110.3
63.6
10.5
37.3
103.6
71.9
61.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,924
604
1,316
49
339
37
636
255
4
0
0
$325,703
$58,405
$266,786
$4,576
$47,844
$7,876
$192,554
$13,937
$511
$0
$0
$325,703
$58,405
$266,786
$4,576
$47,844
$7,876
$192,554
$13,937
$511
3.6
0.6
2.9
0.1
0.5
0.1
2.1
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK21.
Agency:Caltrans
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
10,726
3,055
960
2,095
61
320
204
1,171
279
60
$8,657,316
$1,099,096
$354,922
$744,174
$8,222
$41,739
$20,579
$624,489
$43,284
$5,862
$8,657,316
$1,099,096
$354,922
$744,174
$8,287
$42,070
$20,743
$629,447
$43,628
12.7
4.1
8.6
0.1
0.5
0.2
7.3
0.5
16.3
3.6
12.7
0.7
1.2
0.1
9.9
0.8

3.6
0.5

4.1

0.6

0.7
0.1

2.7

0.3
77.7
114.0
67.5
13.8
40.4
176.1
73.3
64.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,806
577
1,229
46
300
25
603
255
0
0
0
$294,825
$50,284
$244,541
$4,516
$36,718
$4,891
$184,479
$13,937
$0
$0
$0
$294,825
$50,284
$244,541
$4,516
$36,718
$4,891
$184,479
$13,937
$0
3.4
0.6
2.8
0.1
0.4
0.1
2.1
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK22.
Agency:Caltrans
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
594
166
48
118
3
49
17
45
0
4
$393,998
$37,454
$8,718
$28,736
$60
$13,937
$4,305
$10,027
$0
$408
$393,998
$37,454
$8,718
$28,736
$61
$14,137
$4,367
$10,171
$0
9.5
2.2
7.3
0.0
3.6
1.1
2.6
0.0
33.1
4.6
28.5
4.9
11.8
3.2
7.9
0.8

23.6

2.4

21.2

4.9

8.2

2.0

5.3

0.8
28.7
47.8
25.6
0.3
30.5
35.1
32.8
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
118
27
87
3
39
12
33
0
4
0
0
$30,877
$8,121
$22,245
$60
$11,125
$2,985
$8,076
$0
$511
$0
$0
$30,877
$8,121
$22,245
$60
$11,125
$2,985
$8,076
$0
$511
7.8
2.1
5.6
0.0
2.8
0.8
2.0
0.0
0.1
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK23.
Agency:LocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,126
1,288
423
865
46
173
66
445
64
71
$2,345,716
$297,568
$91,853
$205,715
$6,125
$26,665
$2,587
$156,781
$7,535
$6,023
$4,279,544
$543,837
$162,203
$381,635
$12,106
$59,750
$5,783
$284,495
$19,500
12.7
3.8
8.9
0.3
1.4
0.1
6.6
0.5
20.3
5.6
14.7
1.0
2.2
0.3
9.6
1.6

7.6

1.8

5.8

0.7

0.8

0.2

3.0

1.1
62.7
68.1
60.7
27.5
64.2
46.2
69.3
28.4
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
846
254
592
40
158
10
331
53
0
0
0
$123,503
$21,315
$102,188
$4,587
$23,847
$329
$70,262
$3,163
$0
$0
$0
$234,099
$40,164
$193,935
$8,820
$50,931
$1,046
$124,671
$8,467
$0
5.5
0.9
4.5
0.2
1.2
0.0
2.9
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK24.
Agency:LocalAssistance
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
3,910
1,230
405
825
45
151
65
432
63
69
$2,291,432
$292,765
$90,901
$201,864
$5,892
$24,322
$2,525
$156,017
$7,507
$5,599
$4,163,638
$532,021
$159,877
$372,143
$11,141
$53,810
$5,681
$282,084
$19,428
12.8
3.8
8.9
0.3
1.3
0.1
6.8
0.5
19.9
5.5
14.4
0.9
2.0
0.3
9.6
1.6

7.1

1.7

5.5

0.7

0.7

0.1

2.9

1.1
64.1
69.9
61.9
28.8
64.8
53.0
70.3
29.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
805
242
563
39
142
9
321
52
0
0
0
$120,360
$20,536
$99,823
$4,354
$22,417
$268
$69,650
$3,134
$0
$0
$0
$225,751
$38,470
$187,281
$7,903
$46,909
$956
$123,089
$8,425
$0
5.4
0.9
4.5
0.2
1.1
0.0
3.0
0.2
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK25.
Agency:LocalAssistance
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
216
58
18
40
1
22
1
13
1
2
$54,283
$4,804
$952
$3,852
$233
$2,342
$61
$763
$28
$424
$115,906
$11,817
$2,325
$9,491
$1,008
$6,224
$99
$2,114
$46
10.2
2.0
8.2
0.9
5.4
0.1
1.8
0.0
32.5
8.2
24.4
4.6
8.6
1.6
8.3
1.3

22.3

6.2

16.2

3.7

3.3

1.5

6.4

1.3
31.3
24.5
33.6
19.0
62.1
5.5
22.1
3.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
41
12
29
1
16
1
10
1
0
0
0
$3,144
$779
$2,365
$233
$1,430
$61
$613
$28
$0
$0
$0
$8,348
$1,694
$6,654
$917
$4,023
$90
$1,582
$42
$0
7.2
1.5
5.7
0.8
3.5
0.1
1.4
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK26.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
2,940
487
125
362
1
51
32
240
29
9
$8,241,250
$587,477
$165,452
$422,024
$209
$34,162
$8,388
$361,491
$13,781
$3,994
$9,693,967
$683,697
$181,585
$502,112
$831
$46,653
$8,674
$425,007
$20,948
7.1
1.9
5.2
0.0
0.5
0.1
4.4
0.2
13.6
2.3
11.4
0.6
1.2
0.2
8.3
1.0

6.6

0.4

6.2

0.6

0.8

0.1

3.9

0.8
51.7
83.0
45.5
1.4
39.0
39.7
52.9
21.6
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
204
28
176
0
38
25
105
8
0
0
0
$118,641
$14,551
$104,090
$0
$27,707
$6,647
$67,611
$2,125
$0
$0
$0
$161,599
$19,013
$142,585
$0
$39,078
$6,677
$91,888
$4,942
$0
1.7
0.2
1.5
0.0
0.4
0.1
0.9
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK27.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
2,695
451
115
336
1
40
27
232
29
7
$7,882,241
$568,915
$161,444
$407,471
$209
$26,563
$5,409
$357,939
$13,781
$3,571
$9,292,726
$663,487
$177,149
$486,338
$830
$38,138
$5,620
$420,832
$20,919
7.1
1.9
5.2
0.0
0.4
0.1
4.5
0.2
12.8
2.2
10.7
0.4
0.8
0.1
8.3
1.0

5.7

0.3

5.4

0.4

0.4
0.0

3.8

0.8
55.7
88.0
49.1
2.0
52.3
57.1
54.4
22.5
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
184
21
163
0
33
22
100
8
0
0
0
$104,705
$10,662
$94,042
$0
$22,144
$4,672
$65,102
$2,125
$0
$0
$0
$147,329
$15,050
$132,280
$0
$33,286
$4,672
$89,380
$4,942
$0
1.6
0.2
1.4
0.0
0.4
0.1
1.0
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK28.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
245
36
10
26
0
11
5
8
0
2
$359,009
$18,562
$4,009
$14,553
$0
$7,599
$2,978
$3,552
$0
$424
$401,242
$20,210
$4,435
$15,774
$0
$8,837
$3,181
$3,757
$0
5.0
1.1
3.9
0.0
2.2
0.8
0.9
0.0
32.5
4.3
28.2
4.9
11.6
3.0
7.7
1.0

27.5

3.2

24.3

4.9

9.4

2.2

6.7

1.0
15.5
25.6
13.9
0.0
18.9
26.5
12.2
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
20
7
13
0
5
3
5
0
0
0
0
$13,936
$3,888
$10,048
$0
$5,564
$1,975
$2,509
$0
$0
$0
$0
$14,269
$3,964
$10,305
$0
$5,792
$2,005
$2,509
$0
$0
3.6
1.0
2.6
0.0
1.4
0.5
0.6
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK29.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
12,506
4,022
1,306
2,716
109
491
255
1,421
314
126
$3,155,779
$846,642
$290,041
$556,601
$14,198
$48,179
$19,083
$429,805
$37,039
$8,298
$3,636,891
$996,691
$344,258
$652,433
$19,541
$68,688
$22,349
$499,581
$42,273
27.4
9.5
17.9
0.5
1.9
0.6
13.7
1.2
30.0
9.6
20.4
1.7
3.4
0.4
13.7
1.2

2.6

0.1

2.4

1.2

1.5
0.2
0.1
0.0
91.4
98.6
88.1
31.3
55.4
150.1
100.5
98.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
2,566
830
1,732
89
459
22
862
300
4
0
0
$330,566
$65,169
$264,885
$9,163
$43,984
$1,558
$195,206
$14,974
$511
$0
$0
$398,203
$79,556
$318,136
$13,396
$59,697
$2,245
$225,338
$17,461
$511
10.9
2.2
8.7
0.4
1.6
0.1
6.2
0.5
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK30.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Construction
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
11,941
3,834
1,250
2,584
105
431
242
1,371
313
122
$3,066,508
$822,946
$284,379
$538,566
$13,905
$39,499
$17,695
$422,567
$37,010
$7,890
$3,528,229
$967,630
$337,650
$629,980
$18,546
$57,223
$20,934
$491,043
$42,233
27.4
9.6
17.9
0.5
1.6
0.6
13.9
1.2
29.8
9.6
20.2
1.6
3.2
0.4
13.8
1.2

2.4
0.0

2.4

1.1

1.6
0.2
0.1
0.0
92.0
99.7
88.3
32.3
50.0
165.5
100.8
100.5
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
2,427
798
1,629
85
409
12
824
299
0
0
0
$310,481
$60,158
$250,322
$8,870
$36,992
$488
$189,026
$14,946
$0
$0
$0
$373,247
$73,705
$299,543
$12,419
$50,341
$1,175
$218,188
$17,419
$0
10.6
2.1
8.5
0.4
1.4
0.0
6.2
0.5
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK31.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:Engineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
565
188
56
132
4
60
13
50
1
4
$89,272
$23,696
$5,662
$18,035
$293
$8,680
$1,388
$7,238
$28
$408
$108,662
$29,062
$6,608
$22,453
$994
$11,450
$1,413
$8,553
$43
26.7
6.1
20.7
0.9
10.5
1.3
7.9
0.0
34.7
9.5
25.2
4.6
8.8
2.1
9.0
0.7

8.0

3.4

4.5

3.7
1.7

0.8

1.2

0.6
77.1
63.8
82.1
19.9
119.4
62.9
87.2
6.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
139
32
103
4
50
10
38
1
4
0
0
$20,085
$5,011
$14,563
$293
$6,992
$1,070
$6,180
$28
$511
$0
$0
$24,956
$5,851
$18,594
$976
$9,356
$1,070
$7,149
$42
$511
23.0
5.4
17.1
0.9
8.6
1.0
6.6
0.0
0.5
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK32.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithoutRaceConsciousProgramandState
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
8,458
2,509
725
1,784
33
308
200
978
182
83
$2,069,839
$564,737
$193,775
$370,962
$4,584
$27,547
$15,342
$310,441
$7,783
$5,265
$2,390,100
$660,955
$228,008
$432,947
$5,937
$42,223
$16,882
$357,757
$10,147
27.7
9.5
18.1
0.2
1.8
0.7
15.0
0.4
29.7
9.4
20.3
1.6
3.7
0.4
13.4
1.1

2.0
0.1

2.2

1.3

2.0
0.3
1.5

0.7
93.1
101.1
89.4
16.0
47.4
163.4
111.3
38.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,465
426
1,035
20
284
10
543
178
4
0
0
$200,540
$36,710
$163,319
$1,720
$23,739
$1,154
$129,654
$7,052
$511
$0
$0
$238,300
$43,735
$194,053
$2,477
$34,428
$1,154
$148,503
$7,491
$511
10.0
1.8
8.1
0.1
1.4
0.0
6.2
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK33.
Agency:CaltransandLocalAssistance
FundingandProgram:FederalwithRaceConsciousProgram
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,048
1,513
581
932
76
183
55
443
132
43
$1,085,941
$281,905
$96,266
$185,640
$9,615
$20,631
$3,742
$119,364
$29,256
$3,032
$1,246,791
$335,736
$116,250
$219,486
$13,632
$26,479
$5,458
$141,720
$32,197
26.9
9.3
17.6
1.1
2.1
0.4
11.4
2.6
30.5
9.9
20.6
2.0
2.8
0.4
14.1
1.3

3.6

0.6

3.0

0.9

0.7
0.1

2.7
1.3
88.3
94.1
85.6
54.2
75.6
119.7
80.7
197.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,101
404
697
69
175
12
319
122
0
0
0
$130,025
$28,459
$101,566
$7,443
$20,245
$404
$65,552
$7,923
$0
$0
$0
$159,904
$35,820
$124,083
$10,919
$25,269
$1,091
$76,834
$9,970
$0
12.8
2.9
10.0
0.9
2.0
0.1
6.2
0.8
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK34.
Agency:CaltransandLocalAssistance
FundingandProgram:Federal
Type:ConstructionandEngineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
1,581
207
59
148
1
34
8
88
10
7
$6,124,001
$315,816
$62,023
$253,792
$209
$23,563
$3,092
$217,371
$6,075
$3,482
$7,567,244
$410,551
$78,155
$332,396
$835
$36,098
$3,327
$278,927
$13,209
5.4
1.0
4.4
0.0
0.5
0.0
3.7
0.2
12.8
2.0
10.8
0.6
1.0
0.2
8.1
1.0

7.4

1.0

6.5

0.6

0.5

0.2

4.4

0.8
42.2
51.6
40.5
1.9
48.4
18.9
45.5
18.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
96
18
78
0
26
5
42
5
0
0
0
$67,010
$6,521
$60,489
$0
$21,141
$2,802
$35,052
$1,493
$0
$0
$0
$108,813
$10,983
$97,830
$0
$32,512
$2,831
$58,175
$4,311
$0
1.4
0.1
1.3
0.0
0.4
0.0
0.8
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK35.
Agency:CaltransandLocalAssistance
FundingandProgram:Federal
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
7,719
2,592
946
1,646
90
320
120
852
174
90
$2,419,172
$670,389
$246,128
$424,262
$11,616
$39,364
$11,206
$322,878
$32,234
$6,963
$2,898,388
$819,835
$299,834
$520,002
$16,950
$59,847
$14,348
$391,390
$37,466
28.3
10.3
17.9
0.6
2.1
0.5
13.5
1.3
30.2
9.8
20.4
1.7
3.5
0.4
13.6
1.2

1.9
0.5

2.5

1.1

1.5
0.1

0.1
0.1
93.7
105.6
88.0
35.4
58.5
121.5
98.9
111.7
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,721
606
1,112
78
294
16
563
161
3
0
0
$260,224
$49,469
$210,260
$8,164
$35,358
$656
$155,874
$10,208
$496
$0
$0
$327,753
$63,839
$263,419
$12,396
$51,071
$1,343
$185,914
$12,695
$496
11.3
2.2
9.1
0.4
1.8
0.0
6.4
0.4
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK36.
Agency:CaltransandLocalAssistance
FundingandProgram:State
Type:ConstructionandEngineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
1,359
280
66
214
0
17
24
152
19
2
$2,117,249
$271,661
$103,429
$168,232
$0
$10,599
$5,295
$144,120
$7,705
$512
$2,126,724
$273,145
$103,429
$169,716
$0
$10,631
$5,311
$146,045
$7,729
12.8
4.9
8.0
0.0
0.5
0.2
6.9
0.4
16.5
3.2
13.3
0.8
2.1
0.2
9.0
1.2

3.6
1.7

5.3

0.8

1.6
0.1

2.1

0.8
78.0
153.6
60.0
0.0
23.6
125.6
76.4
31.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
108
10
98
0
12
20
63
3
0
0
0
$51,631
$8,030
$43,601
$0
$6,566
$3,845
$32,559
$631
$0
$0
$0
$52,786
$8,030
$44,756
$0
$6,566
$3,845
$33,713
$631
$0
2.5
0.4
2.1
0.0
0.3
0.2
1.6
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK37.
Agency:CaltransandLocalAssistance
FundingandProgram:State
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,787
1,430
360
1,070
19
171
135
569
140
36
$736,607
$176,253
$43,913
$132,340
$2,582
$8,814
$7,878
$106,927
$4,805
$1,335
$738,502
$176,856
$44,425
$132,431
$2,608
$8,904
$7,958
$108,108
$4,854
23.9
6.0
17.9
0.4
1.2
1.1
14.6
0.7
29.1
8.8
20.3
2.0
2.9
0.4
13.7
1.2

5.1

2.8

2.3

1.6

1.7
0.7
0.9

0.6
82.4
68.4
88.5
18.0
41.0
200+
106.8
52.8
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
845
224
620
11
165
6
299
139
1
0
0
$70,341
$15,700
$54,625
$1,000
$8,626
$902
$39,332
$4,766
$16
$0
$0
$70,450
$15,717
$54,717
$1,000
$8,626
$902
$39,424
$4,766
$16
9.5
2.1
7.4
0.1
1.2
0.1
5.3
0.6
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK38.
Agency:Caltrans
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
2,130
383
97
286
0
35
30
194
23
4
$6,537,010
$483,196
$155,746
$327,450
$0
$25,751
$8,277
$281,866
$9,178
$2,379
$6,537,010
$483,196
$155,746
$327,450
$0
$25,939
$8,337
$283,929
$9,245
7.4
2.4
5.0
0.0
0.4
0.1
4.3
0.1
12.8
1.7
11.0
0.6
1.3
0.2
8.3
0.6

5.4
0.7

6.0

0.6

0.9

0.1

4.0

0.5
57.9
137.6
45.4
0.0
31.7
52.0
52.3
22.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
157
19
138
0
26
24
82
6
0
0
0
$82,418
$12,953
$69,465
$0
$20,112
$6,586
$41,603
$1,163
$0
$0
$0
$82,418
$12,953
$69,465
$0
$20,112
$6,586
$41,603
$1,163
$0
1.3
0.2
1.1
0.0
0.3
0.1
0.6
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK39.
Agency:Caltrans
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
9,190
2,838
911
1,927
64
334
191
1,022
256
60
$2,514,304
$653,355
$207,895
$445,460
$8,281
$29,925
$16,608
$352,650
$34,106
$3,890
$2,514,304
$653,355
$207,895
$445,460
$8,354
$30,189
$16,754
$355,757
$34,407
26.0
8.3
17.7
0.3
1.2
0.7
14.1
1.4
28.3
8.6
19.7
1.6
2.7
0.3
13.8
1.2

2.3

0.3

1.9

1.3

1.5
0.3
0.3
0.2
92.0
96.1
90.2
20.8
43.9
200+
102.5
115.7
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
1,767
585
1,178
49
313
13
554
249
4
0
0
$243,285
$45,452
$197,322
$4,576
$27,732
$1,289
$150,951
$12,773
$511
$0
$0
$243,285
$45,452
$197,322
$4,576
$27,732
$1,289
$150,951
$12,773
$511
9.7
1.8
7.8
0.2
1.1
0.1
6.0
0.5
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK40.
Agency:LocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
810
104
28
76
1
16
2
46
6
5
$1,704,240
$104,281
$9,706
$94,574
$209
$8,411
$111
$79,625
$4,603
$1,615
$3,156,957
$200,501
$25,839
$174,662
$840
$20,785
$294
$140,970
$11,773
6.4
0.8
5.5
0.0
0.7
0.0
4.5
0.4
15.5
3.3
12.1
0.7
1.2
0.2
8.3
1.8

9.1

2.5

6.6

0.7

0.5

0.2

3.8

1.4
41.1
24.5
45.7
3.8
55.0
5.0
54.0
21.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
47
9
38
0
12
1
23
2
0
0
0
$36,223
$1,598
$34,625
$0
$7,595
$61
$26,007
$962
$0
$0
$0
$79,181
$6,060
$73,121
$0
$18,966
$90
$50,285
$3,779
$0
2.5
0.2
2.3
0.0
0.6
0.0
1.6
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK41.
Agency:LocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
3,316
1,184
395
789
45
157
64
399
58
66
$641,476
$193,287
$82,146
$111,141
$5,917
$18,254
$2,475
$77,155
$2,933
$4,407
$1,122,587
$343,337
$136,364
$206,973
$11,368
$39,106
$5,540
$143,293
$7,666
30.6
12.1
18.4
1.0
3.5
0.5
12.8
0.7
33.8
11.8
22.0
2.0
4.9
0.6
13.3
1.2

3.2
0.3

3.5

1.0

1.4

0.1

0.6

0.5
90.5
102.8
83.9
51.2
70.7
82.6
95.8
59.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
799
245
554
40
146
9
308
51
0
0
0
$87,281
$19,717
$67,563
$4,587
$16,252
$268
$44,255
$2,201
$0
$0
$0
$154,918
$34,104
$120,814
$8,820
$31,965
$956
$74,386
$4,687
$0
13.8
3.0
10.8
0.8
2.8
0.1
6.6
0.4
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK42.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:North(Districts1,2,and3)
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
3,135
815
345
470
20
113
4
252
62
19
$2,142,108
$221,854
$82,899
$138,955
$1,142
$7,402
$352
$115,587
$12,936
$1,535
$2,421,643
$265,048
$101,205
$163,843
$1,951
$8,162
$358
$134,717
$18,655
10.9
4.2
6.8
0.1
0.3
0.0
5.6
0.8
17.0
3.8
13.2
0.7
1.3
0.5
9.9
0.8

6.1
0.4

6.4

0.6

1.0

0.5

4.3
0.0
64.3
109.4
51.3
11.6
25.4
2.9
56.2
100.9
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
553
230
322
20
99
1
162
40
1
0
0
$76,403
$23,272
$52,737
$1,142
$6,860
$240
$40,434
$4,060
$394
$0
$0
$96,278
$31,221
$64,662
$1,919
$7,139
$240
$48,113
$7,251
$394
4.0
1.3
2.7
0.1
0.3
0.0
2.0
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK43.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:BayArea(District4)
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
2,541
635
215
420
18
77
14
257
32
22
$2,596,168
$315,944
$74,279
$241,665
$680
$12,266
$1,850
$202,017
$22,910
$1,943
$2,819,777
$338,178
$80,324
$257,854
$1,568
$15,236
$2,553
$213,279
$25,219
12.0
2.8
9.1
0.1
0.5
0.1
7.6
0.9
16.6
3.8
12.8
0.9
1.8
0.2
9.5
0.5

4.6

0.9

3.7

0.8

1.3

0.1

1.9
0.4
72.3
75.7
71.4
6.2
30.0
49.6
79.8
194.6
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
462
119
341
18
77
11
205
30
2
0
0
$109,647
$22,935
$86,610
$680
$12,266
$695
$71,524
$1,445
$102
$0
$0
$121,883
$24,979
$96,802
$1,551
$15,070
$1,370
$77,070
$1,741
$102
4.3
0.9
3.4
0.1
0.5
0.0
2.7
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK44.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:Central(Districts5,6,9,and10)
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
4,022
1,129
412
717
32
66
89
368
144
18
$1,793,067
$151,242
$32,770
$118,472
$3,230
$5,908
$6,087
$95,291
$6,924
$1,033
$2,226,292
$186,868
$43,466
$143,401
$5,055
$7,952
$6,565
$114,736
$9,094
8.4
2.0
6.4
0.2
0.4
0.3
5.2
0.4
20.6
5.0
15.6
1.1
1.7
0.2
11.2
1.4

12.2

3.1

9.2

0.9

1.3
0.1

6.0

1.0
40.7
39.0
41.3
20.4
21.1
121.6
46.2
29.3
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
811
287
524
24
63
10
286
141
0
0
0
$64,227
$11,286
$52,941
$2,482
$4,771
$2,234
$38,035
$5,419
$0
$0
$0
$86,331
$15,498
$70,833
$3,558
$6,724
$2,246
$51,495
$6,810
$0
3.9
0.7
3.2
0.2
0.3
0.1
2.3
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK45.
Agency:CaltransandLocalAssistance
FundingandProgram:AllFundingSources
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:South(Districts7,8,11,and12)
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
%
columnc,row1)
(columnc/
Actualutilization
(d) (e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
5,623
1,900
444
1,456
40
280
177
778
105
76
$4,771,082
$740,255
$262,493
$477,762
$9,354
$56,164
$19,026
$377,387
$8,050
$7,782
$5,768,543
$885,471
$297,795
$587,676
$11,751
$83,554
$21,388
$460,935
$10,048
15.3
5.2
10.2
0.2
1.4
0.4
8.0
0.2
18.1
4.4
13.8
0.9
2.0
0.2
9.3
1.3

2.8
0.8

3.6

0.7

0.6
0.1

1.3

1.1
84.6
118.2
73.9
22.7
72.3
163.6
85.6
13.2
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
926
214
711
27
254
23
310
97
1
0
0
$195,076
$19,447
$175,613
$4,859
$47,685
$5,028
$111,867
$6,175
$16
$0
$0
$251,458
$24,091
$227,351
$6,368
$69,733
$5,057
$139,591
$6,601
$16
4.4
0.4
3.9
0.1
1.2
0.1
2.4
0.1
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK46.
Agency:CaltransandLocalAssistance Contractsunder$2M
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
(d)
%
columnc,row1)
(columnc/
Actualutilization
(e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
2,034
394
96
298
1
36
27
199
28
7
$1,092,346
$181,094
$42,692
$138,402
$209
$18,759
$5,409
$98,680
$11,774
$3,571
$1,606,843
$246,351
$57,413
$188,939
$845
$29,851
$5,723
$133,283
$19,236
15.3
3.6
11.8
0.1
1.9
0.4
8.3
1.2
28.5
8.5
20.0
1.3
3.0
0.5
11.8
3.5

13.1

4.9

8.2

1.2

1.1

0.1

3.5

2.3
53.8
42.1
58.8
4.1
62.5
78.0
70.4
34.1
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
172
20
152
0
29
22
93
8
0
0
0
$69,475
$5,484
$63,991
$0
$14,340
$4,672
$42,855
$2,125
$0
$0
$0
$102,406
$9,871
$92,534
$0
$24,561
$4,672
$58,360
$4,942
$0
6.4
0.6
5.8
0.0
1.5
0.3
3.6
0.3
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK47.
Agency:CaltransandLocalAssistance Contractsunder$500k
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d)
%
(e)
Utilization
benchmark
(availability)
(f)
Difference
(columnd
columne)
% (d/e)x100
(g)
Disparityindex
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
120
23
8
15
0
5
2
6
0
2
$17,293
$3,104
$930
$2,173
$0
$403
$170
$1,177
$0
$424
$27,279
$4,386
$1,357
$3,029
$0
$1,108
$278
$1,643
$0
16.1
5.0
11.1
0.0
4.1
1.0
6.0
0.0
33.7
9.6
24.2
3.8
7.4
2.8
9.3
0.8

17.6

4.6

13.1

3.8

3.4

1.8

3.3

0.8
47.7
52.0
46.0
0.0
54.8
36.2
64.5
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
12
5
7
0
2
1
4
0
0
0
0
$1,686
$810
$875
$0
$204
$61
$611
$0
$0
$0
$0
$2,019
$885
$1,133
$0
$432
$90
$611
$0
$0
7.4
3.2
4.2
0.0
1.6
0.3
2.2
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK48.
Agency:CaltransandLocalAssistance Contractsover$2M
FundingandProgram:AllFundingSources
Type:Construction
Role:PrimeContractors
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d)
%
(e)
Utilization
benchmark
(availability)
(f)
Difference
(columnd
columne)
% (d/e)x100
(g)
Disparityindex
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
661
57
19
38
0
4
0
33
1
0
$6,789,895
$387,821
$118,751
$269,070
$0
$7,804
$0
$259,259
$2,007
$0
$7,685,883
$417,136
$119,737
$297,399
$0
$8,726
$0
$286,667
$2,007
5.4
1.6
3.9
0.0
0.1
0.0
3.7
0.0
9.6
0.8
8.7
0.3
0.3
0.0
7.6
0.5

4.1
0.7

4.8

0.3

0.2
0.0

3.9

0.5
56.8
183.8
44.4
0.0
34.7
0.0
49.1
5.5
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
12
1
11
0
4
0
7
0
0
0
0
$35,230
$5,178
$30,051
$0
$7,804
$0
$22,247
$0
$0
$0
$0
$44,924
$5,178
$39,746
$0
$8,726
$0
$31,020
$0
$0
0.6
0.1
0.5
0.0
0.1
0.0
0.4
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK49.
Agency:CaltransandLocalAssistance Contractsover$500k
FundingandProgram:AllFundingSources
Type:Engineering
Role:PrimeContractors
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d)
%
(e)
Utilization
benchmark
(availability)
(f)
Difference
(columnd
columne)
% (d/e)x100
(g)
Disparityindex
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
(6) AsianPacificAmericanowned
(7) SubcontinentAsianAmericanowned
(8) HispanicAmericanowned
(9) NativeAmericanowned
(10) UnknownMBE
125
13
2
11
0
6
3
2
0
0
$341,717
$15,458
$3,078
$12,380
$0
$7,196
$2,808
$2,375
$0
$0
$373,963
$15,823
$3,078
$12,745
$0
$7,561
$2,808
$2,375
$0
4.2
0.8
3.4
0.0
2.0
0.8
0.6
0.0
32.4
3.9
28.5
4.9
12.0
3.0
7.6
1.0

28.2

3.1

25.1

4.9

9.9

2.3

6.9

1.0
13.0
20.9
12.0
0.0
16.9
25.0
8.4
0.0
(11) DBEcertified
(12) WomanownedDBE
(13) MinorityownedDBE
(14) AfricanAmericanownedDBE
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
8
2
6
0
3
2
1
0
0
0
0
$12,251
$3,078
$9,172
$0
$5,360
$1,914
$1,898
$0
$0
$0
$0
$12,251
$3,078
$9,172
$0
$5,360
$1,914
$1,898
$0
$0
3.3
0.8
2.5
0.0
1.4
0.5
0.5
0.0
0.0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK50.
Agency:CaltransandLocalAssistance AnalysisofPotentialDBEs
FundingandProgram:Federal
Type:ConstructionandEngineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
contracts
(subcontracts)
insample
(a)
Numberof
insample
Dollars
(thousands)
(b)
(thousands)*
Estimated
(c)
totaldollars
(d)
%
columnc,row1)
(columnc/
Actualutilization
(e)
Utilization
benchmark
(availability)
%
(f)
Difference
(columnd
columne)
%
(g)
Disparityindex
(d/e)x100
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
9,300
2,799
1,005
1,794
91
$8,543,173
$986,205
$308,151
$678,054
$11,825
$10,465,632
$1,230,386
$377,989
$852,397
$17,757
12.5
4.0
8.5
0.8

0.7

0.3

0.4

0.6
(6) AsianPacificAmericanowned 354 $62,927 $95,939 1.1

0.2
(7) SubcontinentAsianAmericanowned 128 $14,298 $17,659 0.3

0.1
(8) HispanicAmericanowned 940 $540,250 $670,399 5.4 1.0
(9) NativeAmericanowned ( ) 184 $38,309 $ , $50,644 $ , 1.0 0.5
(10) UnknownMBE 97 $10,445
(11) DBEcertified 1,817 $327,234 $436,566
(12) WomanownedDBE 624 $55,990 $74,822
(13) MinorityownedDBE 1,190 $270,748 $361,249
(14) AfricanAmericanownedDBE 78 $8,164 $12,396
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
320
21
605
166
3
0
0
$56,499
$3,458
$190,926
$11,702
$496
$0
$0
$83,584
$4,174
$244,089
$17,006
$496
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

FigureK51.
Agency:CaltransandLocalAssistance AnalysisofPotentialDBEs
FundingandProgram:Federal
Type:Construction
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d)
%
(e)
Utilization
benchmark
(availability)
(f)
Difference
(columnd
columne)
% (d/e)x100
(g)
Disparityindex
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
8,627
2,613
952
1,661
89
$8,244,647
$953,539
$300,415
$653,124
$11,589
$10,105,483
$1,190,707
$368,880
$821,827
$16,805
11.8
3.9
7.9
0.6
0.0

0.2
0.2

0.4
(6) AsianPacificAmericanowned 293 $49,229 $78,506 0.9

0.1
(7) SubcontinentAsianAmericanowned 116 $11,621 $14,884 0.2 0.0
(8) HispanicAmericanowned 888 $532,777 $661,070 5.2 1.3
(9) NativeAmericanowned ( ) 183 $38,281 $ , $50,562 $ , 1.0 0.5
(10) UnknownMBE 92 $9,628
(11) DBEcertified 1,686 $301,441 $405,569
(12) WomanownedDBE 591 $48,604 $66,521
(13) MinorityownedDBE 1,095 $252,837 $339,048
(14) AfricanAmericanownedDBE 76 $7,927 $11,476
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
275
13
566
165
0
0
0
$46,525
$1,207
$185,504
$11,674
$0
$0
$0
$71,016
$1,895
$237,697
$16,964
$0
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.
$ $

FigureK52.
Agency:CaltransandLocalAssistance AnalysisofPotentialDBEs
FundingandProgram:Federal
Type:Engineering
Role:PrimeContractors,SubcontractorsandSuppliers
Region:California
FirmType
(a)
Numberof
contracts
(subcontracts)
insample
(b)
insample
Dollars
(thousands)
(c)
totaldollars
(thousands)*
Estimated
%
columnc,row1)
(columnc/
Actualutilization
(d)
%
(e)
Utilization
benchmark
(availability)
(f)
Difference
(columnd
columne)
% (d/e)x100
(g)
Disparityindex
(1) Allfirms
(2) MBE/WBE
(3) WBE
(4) MBE
(5) AfricanAmericanowned
673
186
53
133
2
$298,526
$32,666
$7,736
$24,931
$236
$360,149
$39,679
$9,109
$30,570
$959
31.7
6.1
25.6
5.3

20.7

3.6

17.1

5.0
(6) AsianPacificAmericanowned 61 $13,698 $17,744 7.0

2.0
(7) SubcontinentAsianAmericanowned 12 $2,677 $2,822 3.7

2.9
(8) HispanicAmericanowned 52 $7,473 $9,001 8.5

6.0
(9) NativeAmericanowned ( ) 1 $28 $44 1.1 1.0
(10) UnknownMBE 5 $818
(11) DBEcertified 131 $25,793 $30,997
(12) WomanownedDBE 33 $7,385 $8,301
(13) MinorityownedDBE 95 $17,912 $22,201
(14) AfricanAmericanownedDBE 2 $236 $920
(15) AsianPacificAmericanownedDBE
(16) SubcontinentAsianAmericanownedDBE
(17) HispanicAmericanownedDBE
(18) NativeAmericanownedDBE
(19) UnknownDBEMBE
(20) WhitemaleownedDBE
(21) UnknownDBE
45
8
39
1
3
0
0
$9,975
$2,251
$5,422
$28
$496
$0
$0
$12,567
$2,280
$6,392
$42
$496
Note:Spreadsheetroundsnumberstonearestthousanddollarsortenthofonepercent.WBEiswhitewomenownedfirms.
*UnknownMBE,UnknownDBEMBE,andUnknownDBEdollars wereallocatedtoMBEsubgroupsproportionaltotheknowntotaldollarsofthosegroups.Forexample,iftotal
dollarsofAfricanAmericanownedfirms(columnb,row5)accountedfor25percentoftotalMBEdollars(columnb,row4),then25percentofcolumnb,row10wouldbeadded
tocolumnb,row5andthesumwouldbeshownincolumnc,row5.
Source:BBCResearch&ConsultingDisparityAnalysis.

APPENDIXL.
AdditionalAnecdotalInformation
AppendixLprovidesasummaryofadditionalqualitativeinformationaboutmarketplace
conditionsintheCaliforniatransportationcontractingindustry.
IntroductionandBackground
AppendixLpresentsinformationfrommorethan130interviewsthatBBCandits
subconsultantsconductedaspartofthreerecentdisparitystudiesinSouthernCaliforniaa
2011disparitystudyfortheBurbankPasadenaGlendaleAirportAuthority(BGPAA),a2010
studyfortheSanDiegoCountyRegionalAirportAuthority(SDCRAA),anda2010studyfora
consortiumofSouthernCaliforniatransportationagencies(theConsortium).
1
BBCconducted
theinterviewswithlocalbusinessownersandtradeassociationrepresentatives.Theinterviews
includeddiscussionsabouttheDBEProgramandcontractingandprocurementpolicies,
practices,andproceduresoftransportationagenciesinCalifornia.
AppendixLalsoincludesinformationfromtestimonythatCaliforniabusinessesprovidedin
connectionwithpublicforumsthatwerepartofBBCs2010Consortiumdisparitystudy.
Interviews
Interviewparticipantsincludedprimecontractors,subcontractors,professionalservice
providers,andtradeassociationsandprofessionalorganizationsthathaveamembershipbaseof
numerousMBEs,WBEs,andmajorityownedbusinesses.BBCrecruitedinterviewparticipants
primarilyfromarandomsampleofbusinessesthatwasstratifiedbytypeoffirm,location,and
therace/ethnicityandgenderoftheowners.BBCandsubconsultantsconductedmostofthe
interviewswiththeowner,president,chiefexecutiveofficer,orothermanagerofeachbusiness
ororganization.TheintervieweesareidentifiedinthisAppendixbytheirinterviewnumber.
InterviewinformationforAppendixLcamefromthefollow ingsources:
18interviewsfromthe2011BGPAAdisparitystudy;
60interviewsfromthe2010SDCRAAdisparitystudy;and
60interviewsfromthe2010Consortiumdisparitystudy.
1
TheConsortiumstudyincludedaconsortiumoffiveSouthernCaliforniatransportationagencies:LosAngelesCounty
MetropolitanTransportationAuthority(Metro),theSouthernCaliforniaRegionalRailAuthority(Metrolink),theOrange
CountyTransportationAuthority(OCTA),theSanDiegoAssociationofGovernments(SANDAG),andtheSanDiego
MetropolitanTransitSystem(MTS).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE1

InterviewsfromtheBGPAAstudyarereferencedusingaBGPprefixbeforetheinterviewee
number.InterviewsfromtheSDRCAAstudyarereferencedusingaSDprefixbeforethe
intervieweenumber.InterviewsfromtheConsortiumstudyarereferencedusingaCONprefix
forConsortiuminterviews.
PublicForumsandWrittenTestimony
Inadditiontoinformationfrompersonalinterviews,AppendixLalsoincludestestimonythatthe
publicprovidedinconnectionwithpublicforumsthatBBCconductedaspartofthe2010
Consortiumdisparitystudy.Individualshadtheopportunitytosubmitwrittenorverbal
testimonyaboutcurrentmarketplaceconditionsinSouthernCaliforniaattwopublicforums
onethatwasheldinLosAngeles,California,onOctober20,2009,andonethatwasheldinSan
Diego,California,onOctober,21,2009.
IntheConsortiumsections,theAppendixalsoincludesanecdotesfromwrittentestimonyand
anecdotesfromverbalpublicforumtestimony.WrittentestimonyisreferencedusingaWT
prefixbeforetheintervieweenumberandverbalpublicforumtestimonyisreferencedusinga
PFprefixbeforetheintervieweenumber.
SummaryofAnecdotes
A.Certification
BGPAAStudyAnecdotesRegardingCertification
Thecertificationprocess.
Someintervieweesreportedapositiveexperiencewiththecertificationprocess.[Interviewees
#BGP:2,4,12,14,TA#2].Interviewee#BGP2,amanagerofanAsianAmericanowned
MBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatthecertificationprocessis
prettyeasy.
Interviewee#BGP4,amanagerofaWBEcertifiedconstructionfirm,said,Therearepartsofthe
[certification]processthatdriveyoucrazy,butyouknowitsprobablythatwaybecauseofhow
itsbeenmanipulated.So,itstough,butitsworthit.Theyalwayswantanotherinterviewora
phonecall,butitsbeenprettyeasyforusbecausetheownerissoinvolved.
Interviewee#BGP12,amanagerofaWBE/DBEcertifiedconstructionsupplyfirm,saidthatthe
companyhasbeencertifiedforaslongastheyhavebeenwiththefirm.Interviewee#12said
thattherenewalprocessisprettyclearcut.Interviewee#12said,Wevebeendoingitfora
while,soitsjustamatterofresubmittingeverything.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
statedthathehadhadamostlypositiveexperiencewiththecertificationprocess.Hesaidthat
becausethecompanyisamemberofseveralofthe[NativeAmerican]groups,suchasthe
NativeAmericanCenter,thecompanyhasaccesstoassistanceingetting[its]status.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE2

Someintervieweesreportedchallengesinconnectionwiththecertificationprocess.
[Interviewees#BGP:1,3,6,9,10,11,15].Interviewee#BGP1,theAfricanAmericanmale
ownerofanMBE/DBEcertifiedarchitecturefirm,saidthattheresoneportionofthe
certificationprocesswheretheyaskthatyouprovethatyoureaminority,andIthinkthatonce
yougetcertified,thatshouldntbeaquestion.Itshouldbeautomaticallyknownthatyourea
minoritywhenyoureupforcertificationrenewal.Otherwise,theprocessisfairandquitegood.
Interviewee#BGP3,thecoownerofawhitewomanownedconstructionfirm,statedthatithas
beendifficulttomaintainhisfirmsWBEcertification.Hesaid,ItsverydifficultForexample,
wejustfoundoutthatinourbylawsImtheDirector,eventhoughmywifehasbeentheowner
for15years.Oneofthecertifyingagenciesfoundthatoutandsaid,YourenolongeraWBE.He
saidthatthecertificationprocessishonestandstraightforward.Hesaidthatittookus
forevertogetcertified.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatthecertificationprocessistedious.Interviewee#6stated,Theinitialprocessis
cumbersome,butafteryoujumpthathurdle,itbecomesrelativeeasy.Interviewee#6said,
WhentheyputtheCUCP[CaliforniaUnifiedCertificationProgram]in,ithelpedalot.Once
yourecertified,everyoneelseacceptsit.Itwassomuchpaperworkforeveryagency,butonceI
hadthatcertification,thenitsintheStatedatabase.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,saidthatIthinkthatanythingthatrequireslengthypaperworkisgoingtobeapretty
majorturnoff.Ihavebetterthingstodo.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthecertificationprocess
wasveryburdensomeinitiallywheneachagencyhaditsowncertificationprocess,butitis
betternow.HesaidthatitisstillnottothepointofwheretheCaliforniaUnifiedCertification
Programisuniversal.Headdedthatpriorchangesweresupposedtosimplifytheprocess,and
theydidsomewhatwhensomeagenciesremovedtheirrequirementsthat[companies]
neededtobecertifiedwiththemandimplementedmorereciprocity,butanumberofagencies
stillhavetheirownrequirements,andyousubmitthesamepackagebasicallybutreformatted,
anditsathreeinchthickpackageofpaper.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,reportedthattheinitialcertificationprocessinvolvesconsiderablepaperwork,andit
tookthecompanythebetterpartofsixmonthstogetcertifiedlasttime.Hesaidthatthe
renewalprocessisnotthatlengthy.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshewasfirstcertified
throughtheCityofLosAngeles,andtheyexpedited[her]certification.Shesaidthatwhenshe
wasgoingthroughthecertificationprocess,theguythatcameouttocertifyheraskedherwhy
shewantedtobecertifiedasaMexicanbecause[her]sirnameand[her]maidennameare
English,and[shehas]greeneyes.Shesaidthatshewaskindofoffendedaboutthat.Shesaid
thatthesecondtimethatsheobtainedcertificationshewentthroughMetrosprocess,whichshe
describedasafantasticprocess,althoughthecompanyhasnevergottenanyworkoutof
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE3

them.Sheadded,TheCityofL.A.isjustvery,veryslowincertifyingsinceitsaCUCP
certificationthatsrecognizedbyallofthestateandlocalagencies.
Oneintervieweereportedhavingeitherlimitedornoexperiencewiththecertification
process.[Interviewee#BGP:8].Interviewee#BGP8,thetechnicaldirectorofawhitewoman
ownednoncertifiedengineeringfirm,saidthatheseeshisfirmgoingthroughtheWBE
certificationprocessatsomepointwhenhisfirmisnotasbusy.
Perceivedvaluetocertification.
Manyintervieweesperceivedavaluetocertification.[Interviewees#BGP:1,2,3,4,6,8,10,
12,13,15].Interviewee#BGP1,theAfricanAmericanmaleownerofanMBE/DBEcertified
architecturefirm,saidthathethinks[thatthecertificationprogramis]agoodprogram,and
thattheygetaheadsuponoutreachmeetingsandupcomingworkbecauseoftheir
certifications.
Interviewee#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBEcertified
maintenanceandrepairfirm,saidthatthecertificationshavebeenhelpful.
Interviewee#BGP3,thecoownerofawhitewomanownedconstructionfirm,saidthat
certificationopensupdoorstowork[that]wenormallywouldntbeoffered.Mostofthe
airportworknow,youhavetobecertified.allthebigcompanieswantyoutobecertifiedas
something,itdoesnthavetobe[WBE].Everybodyhasgoalstheyaretryingtoreach.Being
asmallcompany,awomanownedcompany,thatallhelps.
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthattheWBE
certificationhelpedthemostwithfederalwork.Wedidntrealizehowimportant[certification]
wasforfederalwork,butsincewevebeenbiddingsomemilitarywork,weseethatthisiswhere
weshouldhavebeenlooking.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatthefirmsWBEcertificationwasnotusefulinitiallybecausemostoftheclients
wereintheprivatesector.AsIlearnedoftheopportunity,andIpursuedit,andthathelpedme
grow.Itiscertainlyadvantageous.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatheperceivesavaluetocertification.Hesaid,ManyprojectshaveWBEand
disadvantagedbusiness,smallbusinesssetasides.So[certifiedfirms]getsomepriorityasa
smallcompanygoingupagainstthebigones.
Interviewee#BGP10,aprincipalatanengineeringfirm,statedthathedoesfeelthatthereis
valuetocertifications,andmanyoftheagenciesthatdohavegoalsorprogramsrequire
certification.Hereportedthatthefirmobtainsalargepercentageofitsbusinessbecauseitis
asmallbusiness.Interviewee#10saidmoreagenciesseemtobeusingthesmallbusinessas
opposedtotheothercategories,particularlysinceProposition209waspassedabout10years
ago,thatbasicallysaidinCaliforniayourenotsupposedtodiscriminateonthebasisofrace,
religionandallthatsortofthing.Heestimatedthatthefirmobtainsabout20to25percentof
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE4

itsbusinessbecauseofitsDBEcertification.HesaidthattheDBEpercentage[requirement]is
usuallyassociatedwithsomefederalfunding.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthattheyattributeavaluetocertificationbecauseitopensup
doorsforus,helpsusgrowthebusiness.Interviewee#12reportedthatapproximately30
percentofthecompanysbusinessisobtainedasaresultofitsDBEcertification.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatthecompanywas
notcertified,butifthecompanydidmorepublicsectorwork,itwouldprobablypursueatleast
oneofthoseclassificationstoaidthecompanyinobtainingwork.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,commentedthatsheseesavalueto
certifications,particularlyasawomanownedbusiness.Shesaid,Itallowsmetointroduce
myselftotheprime.
Otherintervieweesperceivedlimitedornovaluetocertification.[Interviewees#BGP:11,13,
14,TA#2].Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaning
servicescompany,saidthathewasunsureofhowmuchofthecompanysbusinessis
attributabletothecompanysDBEstatus.Hesaidthathethinksthecertificationplayedarolein
thecompanysbidonaBurbankcontract,buthedoesnotthinkthatithasmuchtodowith
anythingandwillnotcarrymuchweightinthefuture.Headded,Iwishitdid,butitdoesnt.
Hesaidthatheoncebelievedtherewasagreateremphasisoncertification,butthebenefitsof
certificationseemtobedeclining,andtoday,itdoesnotseemthatimportant.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidhedoesnotthinkthat
certificationisanadvantageintheprivatesector.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthathewouldattributelessandlessofthecompanysbusinesstoitsMBE/DBE
certification.Hestatedthatin2003therewereactuallybidsthatcalledforacertain
percentageuseofcertifiedcompanies,andthatwouldresultinacertifiedcompanywinningthe
bid.Hesaidthat,today,useofcertifiedcompaniesdoesnotseemtobecriteriathatisrequired
onalloftheseprojects,sotheydontgive[thecompany]anypercentagepointextraonabid
becausewereminoritybusiness,buttheyliketoknowthatwearebecausetheyhavecertain
federalrequirementsthattheyhavetoputdown.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,statedthatThecertificationprocessisprettygood,butthe
commitmentforpeopletohonorthecertificationisbelowstandard.Hestatedthattherewould
beabenefittocertificationifpeoplewouldenforceutilization.
Oneintervieweeidentifiedcertaindisadvantagestocertification.[Interviewee#BGP4:1].
Interviewee#BGP1,theAfricanAmericanmaleownerofanMBE/DBEcertifiedarchitecture
firm,saidthatthecertificationsdohavesomedisadvantages.Hesaid,Therearefirmsthatuse
mynameastheirDVBEtowintheprojects,andIneverheardfromthem.Whenthathappens
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE5

withstatework,Ireportittothestate,andthestatepaysmemyshare.Idontknowifthestate
punishesthearchitectofrecord.Someofthesamefirmscallnow,andItellthemthatIwont
workwiththem.
Recommendationsregardingthecertificationprocess.
Someintervieweesrecommendedthatthecertificationapplicationorrenewalapplicationbe
simplifiedorcondensed.[Interviewees#BGP:1,6,10,12].Interviewee#BGP1,theAfrican
AmericanmaleownerofanMBE/DBEcertifiedarchitecturefirm,saidthatafirmsminority
statusshouldnotbereevaluatedduringtherenewalprocess.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatthecertificationprocesswouldbeeasierIfmoreagenciesusedtheCUCP
(CaliforniaUnifiedCertificationProgram).
Interviewee#BGP10,aprincipalatanengineeringfirm,recommended[h]avingfewercertified
agenciesand[a]moreconsistentstandardforwhatisconsideredasmallbusinessorwhat
qualifiesforcertification.Hesaidthatsomeagencieshavenetworthcriteriaorothercriteria
thataddanotherlayerofcomplexity.Hesaidthathewouldpreferothersagenciestoadoptthe
SBAsdefinitionofasmallbusiness,whichisuniformandcanbeappliedoverawidevarietyof
businessesbecausetheyhavequiteanextensivelistofcategories[into]whichvarious
businessesfall.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthatthecertificationcouldbestreamlinedbutaddedthat
theyreprettydiligentinCalifornia.
OneintervieweerecommendedenforcingMBE/WBE/DBEutilizationonprojectswith
participationrequirements.[Interviewee#BGP:TA#2].IntervieweeBGPTA#2,thepresident
oftheSouthernCaliforniaChapteroftheNationalAssociationofMinorityContractors,stated
thathisrecommendationwouldbetoholdthedevelopersandcontractorsaccountablefor
utilizingtherequiredparticipation,whetheritsMBE,HelpFund,whateveritcouldbeand
penalizethemiftheydont.
SDCRAAAnecdotesRegardingCertification
Thefollowinganecdotesregardingcertificationwereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009SDRCAAstudy.
Thecertificationprocess.
Someintervieweesdescribedthecertificationprocessasbeinglongandtimeconsumingoras
otherwisecumbersome.Interviewee#SD4,representingawhitemaleownedfirm,statedthat
thecertificationprocessisslow.HedescribedanAfricanAmericanmaleownedfirmwith
whomhehasworkedinthepastthathasneverbeenformallycertifiedbecauseofhowmuch
timetheprocesstakes.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE6

Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,didnothavepositiveimpressionsofthecertificationprocess:[Thecertification
process]sucks!Ihadtoprovethatmywifewasblack.Hewentontosaythattheprocessis
verytimeconsuming.
SDTA#6,representinganAsianAmericantradeorganization,saidthatthecertificationprocess
canbeextremelyonerousandthatmanyoftheorganizationsmembersdonothavethe
expertisetofilloutalloftheforms.
Interviewee#SD19,representingawhitemaleownedfirm,indicatedthatitisdifficultforfirms
togetcertified,particularlythosewithmultipleowners:Atonepointourcompanywasowned
byonewomanpartner51percentbutbecauseofourstructurewecouldntcertify.Itis
toughtogetthatcertification.Certificationismoreforthosecompaniesthataresole
proprietors.ShewentontonotethattheperceptionofbeingMBEorWBEdoesntbenefit
anyone.Youneedthecertification.
Interviewee#SD17,representingawhitefemaleownedfirmthatisintheprocessofbecoming
certified,indicatedthatthecertificationprocessisdifficultandrequiresagreatdealofwork:
ImdoingthepaperworktobecomeacertifiedWBEwithCaltrans;itisalotofwork.
Interviewee#SD18,representingawhitefemaleownedfirmthatisnotcertified,saidthatthe
firmsreasonsfornotbecomingcertifiedprimarilyhavetodowiththeirreluctancetopublicize
personalassetsandfinances:Ifwepublicizedourpersonalassetsandfinancials,theunions
wouldhaveafieldday.Interviewee#SD18wentontosaythatifthefirmdidnothavetoreport
theirassetsinalineitemfashion,thentheywouldbemorethanwillingtogothroughwiththe
certificationprocess.
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatherfirmisnotyet
MBEcertified,becausetheprocessissocumbersomeandtimeconsuming:Itsadifficult
processItsjustverytimeconsuming.
Someintervieweesdescribedthecertificationprocessassimpleandstraightforward.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,remarkedthatthe
certificationprocessisrelativelyeasyanddidntcostanythingbuttime.Interviewee#SD20,
representinganAsianAmericanmaleownedfirm,characterizedtheprocessaseasy.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,statedthatthecertificationprocesswasnomoredifficultthanapplyingforaloan.She
saidthattheUnifiedPortofSanDiegoprovidedherwithassistanceingettingthroughthe
certificationprocess.
Perceivedvaluetocertification.
ManyDBEcertifiedfirmsrecognizedthebenefitsofcertification.Interviewee#SD20,
representinganAsianAmericanmaleownedfirm,attributedthegrowthofhisbusinessinpart
tohisfirmsDBEcertification:[DBEcertification]reallyhelpedtogrowthecompanyandopen
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE7

doors.However,hepointedoutthathisfirmsDBEcertificationonlyplaysaroleonfederally
fundedprojects.
Interviewee#SD9,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,saidthatallofherairportrevenuecomesasaresultofherACDBEcertification.She
wentontosaythatshestronglysupportsDBEprogramsandthatdiscontinuingthemwouldbe
harmfultobothminorityandfemaleownedbusinesses.
Similarly,Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaire
attheAirport,acknowledgedthatwithouttheACDBEprogram,herfirmwouldnothavehadthe
opportunitytoworkasaconcessionaireattheAirport.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatthefirmwouldnotbedoingbusinessattheAirportifitwerenotfortheir
ACDBEprogram:If[themasterconcessionaireattheAirport]wasmasterleaseandtherewas
noDBEprogram,wecouldkissthisleasegoodbyeHecontinued,Thecertificationhas
createdopportunitiesformeInterviewee#SD12added,For[themasterconcessionaire]to
beasuccesstheyhadtomeetthe30percent[ACDBE]goal.Theydidnotchooseusbecause[the
masterconcessionaire]isthegoodguyitisbecausetheyhadtodothistodobusiness.If[the
masterconcessionaire]didnthavetodothistheywouldnthaveusedus.
Interviewee#SD8,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthathisMBEstatuswasoneoftheprimaryreasonsthathepursuedandwona
concessionsopportunityattheSanDiegoInternationalAirport.
Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,reportedthathisfirms
DBEcertificationhascertainlybeenbeneficial:Iamacertifiedfirmthatisabenefittome
andtotheprimecontractorusingmyservicesIwouldsaythat99percentoftheagenciesor
privatecompaniesusingusareusingustomeettheir[DBE]goal.However,hecautionedthat
beingDBEcertifieddoesnotsolelydeterminesuccess:Ifyougointoabusinessthinkingthat
MBE,WBEcertification[alone]isgoingtomakeyousuccessful,itsnotthecase.
Interviewee#SD2,representingawhitefemaleownedfirm,reportedthatherfirmsWBE
certificationhasledtomorerelationshipswithprimecontractorsaswellastomorework.
However,shealsonotedthatshehaswonoverotherlocalfirmsandagenciesbecauseofthe
qualityofherwork.
Interviewee#SD28,representingawhitefemaleownedfirm,indicatedthattheprimary
advantageofbeingDBEcertifiedandofgoodfaitheffortsisthatitforcesprimecontractorstoat
leastconsiderherfirmforsubcontractingopportunities:Thecontractorshavetolookatusa
littlecloserbefore[goodfaithefforts]theymightnothaveevenlookedatusorevengivenusa
shot.Shecontinued,Inourbusiness,ifwecangetourfootinthedoor,usuallywecangetthe
dooropenandgetin.[Thecertification]helpsquiteabit.Interviewee#SD28madeclearher
beliefthatfirmsshouldnotbegivencontractsjustbecausetheyareDBEfirms,butthatthey
shouldbegiventheopportunitytodemonstratethattheycandothework:Imnotsayingyou
shouldbegiventhejobjustbecauseyoureaDBEgivethecompanyachancetodothatwork
andprovethattheyareequal[tomajorityownedfirms].
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE8

Similarly,Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,indicated
thatDBEcertificationgivessmallfirmsachancetobreakintotheindustry:Beingcertified
givesthesmall[firms]afootinthedoortoplaywiththebigboysalittlebit.
Interviewee#SD36,representinganAfricanAmericanmaleownedfirmthatisintheprocessof
becomingcertifiedindicatedthatthecertificationwillhelphisfirmgetbusiness:Certification
couldhelpusgetmorebusiness.[Certifiedfirms]getthefirstchoicetogetthecontract.
Typically,theminoritycontractordoesnotgetthebigcontractTheDBEcertificationsystem
makes[publicagencies]dowhattheydonttypicallywanttodo[andawardcontractsto
minorityownedfirms]Withcertification,theyputcompanieslikemeatthefront.Thatishow
Iseeitbenefitingme.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,reportedthatnearly
allofherbusinesscomesasaresultofherDBEcertification.Shesaidthatshespentseveral
yearsbuildingareputationforherfirmbeforebecomingDBEcertifiedandmarketingherfirm
assuch.
SomefirmsthatarenotDBEcertifiedrecognizedthebenefitsofcertification.Interviewee
#SD16,representinganAfricanAmericanmaleownedfirmthatiscurrentlyworkingthrough
thecertificationprocess,attributesgettingworkwiththeAirporttohisfirmssmallbusiness
certification:CertificationlandedmeworkherewiththeairportItmakesmevisible.
Interviewee#SD16indicatedthatheviewedDBEcertificationtobejustasusefulashissmall
businesscertification.
Interviewee#SD18,representingawhitefemaleownedfirmthatisnotcertified,saidthather
firmmissesoutoncertaincontractsbecausetheyareunabletomarktheWBEbox.
Similarly,Interviewee#SD19,representingawhitemaleownedfirm,said,Weprobablymiss
outonalotofjobsbecausewearentcertified.Shewentontoreportthatherfirmhasbeen
deniedsubcontractoropportunities,becausetheyarenotDBEcertified:Wehavebeenpassed
overatleastthreeorfourtimesbefore,becausewedont[helptheprimecontractor]meetthe
DBEorWBEcertificationgoals.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatafirmsDBEstatuslikelyplaysasubstantialrolewhenpublicagencies
awardcontracts,IthinkhavingtheDBEdesignationwouldhelp,andIthinkitwillprobably
helpthenexttime[acontract]goesouttobid.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,reportedthattheAirportgaveatleastonefirmtheopportunitytoworkasa
concessionairebecauseofitsMBE/WBEstatus:[Thefirm]probablywouldneverhaveended
upasanairportretailerifnotfor[theACDBEprogram].Interviewee#SD13wentontoassert
thatthePortAuthority(whowasinchargeatthetime)approachedtheowneroftheMBE/WBE
asapotentialsubtenantpreciselybecauseshewouldbequalifiedtobeACDBEcertified.
Interviewee#SD31,representingawhitemaleownedfirmthatisDVBEcertified,indicatedthat
hedefinitelyseesadvantagestoDVBEandMBE/WBEcertification:[Thecertification]gets
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE9

peoplesattention.Itsays,Weshouldatleastlookatthiscompany,whereasbeforewewould
justbepartoftheherd.However,Interviewee#SD31alsopointedoutthatapotential
disadvantageofcertificationisthestigmawithwhichitmightcome:Mostpeopleassumethat
certificationdoesnotequalcompetency.Sothequestionis,areyoureallyacompetentfirm,or
areyoujusttryingtorideyourcertification?
Severalfirmsarguedthatthereisnoadvantageassociatedwithcertification.Interviewee
#SD14,representingaHispanicAmericanmaleownedfirm,statedthattherearenobenefits
associatedwithbeingcertified:ThereisnoadvantageanymoreofbeingaDBEIdontgetany
ofmyworkfromDBE[goals].Hewentontosay,DBEgoalsareout.Therearenobenefitsat
all[tobeingDBEcertified].
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,said:Therearesome
seriouslowballerbidsthatknockotherbidsout.Thelowbidgetsthecontract.Similarly,
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,indicatedthat,like
othercontractors,hedoesnotconsiderminorityorgenderstatuswhenselectingsubcontractors
hesimplyselectsthesubcontractorthatsubmittedthelowestbid.
SDTA#7,representingaconstructiontradeorganization,saidthattheprimaryconsideration
thatprimecontractorsmakeinselectingsubcontractorsislowbidstatus(i.e.,primecontractors
selectthelowestbidder).Regardingthatselectionprocess,SDRCONTA#7said,Theminority
communitydoesntquiteunderstand[theselectionprocess].Thereisntanyspecialstuffgoing
on.SDRTA#7wentontosaythathisorganizationsHispanicmemberstendtonotgetcertified,
becausetheydonotseeanyadvantagesassociatedwithcertification:[Hispaniccontractors]
donttendtogetintotheprogramsandstuffasmuch.Theydonteventrytogetcertified.
TheyreallsortsofthemouttherethatjustdontpayanyattentiontotheDBEprograms,
becauseitsalotofcrap.
Interviewee#SD6,representingawhitemaleownedfirm,said,theDBEprogramdoesnthelp
anyone.
Interviewee#SD31,representingawhitemaleownedfirmthatisDVBEcertified,saidthathe
questionsthelegitimacyofMBE/WBEcertification:DVBEsaredifferentthaneverybodyelse.
Thestatemonitorsourcertificationyearly.Wedontgotosomefunkynonprofitorganization
andsay,Hey,guesswhatImaminority!Ireallyquestionsomeofthose[MBE/WBE]
certificationsandhowvalidtheyare.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,reportedthatlessthan
10percentofhisfirmssalescanbeattributedtoDBEgoals.Hesaidthatthefirmdoesnot
marketitselfasaDBEtogetwork,itreliesheavilyonthereputationithasestablishedover
thepast35years.
Interviewee#SD44,representingaHispanicmaleownedfirm,statedthathisfirmwas
previouslyMBEcertifiedasaHispanicAmericanownedfirm,butitdidnotrenewits
certificationbecauseitwasntworthit.Heindicatedthathisfirmhadnotroublegetting
certified,butworkingwithpublicagenciesasaDBEparticularlyCaltranswasdifficult:It
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wasapainallthehoopstheywantyoutojumpthroughtotryandsellthemaproductwas
toomuchofahassle.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthathisfirms
DBEcertificationonlyaccountsforapproximately5percentofhisfirmswork.Henotedthathis
firmdoesnotmarketitscertificationstatuswhenrespondingtobidsolicitationsfromprime
contractors.WhenaskedifthereareanyadvantagestobeingDBEcertified,Interviewee#SD46
said,Idontseeanybenefits.
ConsortiumAnecdotesRegardingCertification
Thefollowinganecdotesregardingcertificationwereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009Consortiumstudy.
Thecertificationprocess.
SomeintervieweesreportedapositiveexperiencewiththeConsortiumscertificationprocess.
[Interviewees#CON:9,10,11,13,14,15,19,20,21,22,23,24,28,30,35,36,38,39,43,44,
46,48,52].Interviewee#CON9,anAsianPacificAmericanmaleownedtransportation
engineeringandplanningconsultantfirmandgraduateoftheDBEProgramintheLosAngeles
area,statedthatalthoughhehasnothadexperiencewiththecertificationprocesssince1987,he
believesthattheprocessisgettingsmootherandsmoother.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,reported
thatthecertificationprocessinvolvedalotofpaperworkanditwasalongprocess;overallitwas
apositiveexperience.Interviewee#CON10statedthatittookthemapproximatelyeighthoursto
completethepaperwork.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatthe
certificationprocesswasfairlyeasyandtookherabout15minutestofillouttheformsonline.
ShestatedtheL.A.CountyMTAprocesswasmoreinvolvedincludinganinterview;shestated
thatpaperworktookacoupleofhourstocomplete.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthattheConsortiumcertificationprocessisfine.Hestated
theConsortiumdoesaprettygoodjobofsitevisits,surveys,andaudits.Hestatedthatthereare
formstofilloutandthecertificationprocessisinlinewiththecertificationprocessofother
states.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatwithrespecttotheMetrolinkcertificationprocess,theformsarechallengingbutMetrolink
hasdoneabetterjobofstreamliningtheprocess.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,statedthecertificationprocessisnottoocumbersome.Thecompanyis
currentlyinvolvedinthecertificationprocesswithL.A.CountyMTA.
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Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,feltherexperiencewiththeConsortiumcertificationprocesswas
excellent.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatherexperiencewithL.A.County
Metroscertificationprocesswaseasy.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehadnoproblemwiththeConsortiumscertificationprocess.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthathisexperiencewithcertificationoccurredalongtimeago.Herecalled
thatitrequiredalotofpaperworkbutoveralltherewasnoproblem.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatherexperiencewithcertificationwasgoodinthatitproceeded
smoothly.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthathehashadagoodexperiencewiththe
Consortiumscertificationprocess.HisadministrativeassistantstatedthattheircontactatL.A.
CountyMTAwasveryhelpfulandsupportive.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathehadafairlygoodexperiencewiththeConsortiumcertificationprocess.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatalargeprimecontractorassistedhimwithobtaininghiscertifications;
theywalkedhimthroughtheprocesswhichmadeiteasierforhimtobecomecertified.
Interviewee#CON35,anAfricanAmericanfemaleownedWBE/MBEcertifiedmanagement
consultingfirm,statedthattheConsortiumscertificationprocesswassimpleandeasy.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatthecertificationprocesswassmoothbutinvolvedalotof
paperwork.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathehadarelativelygoodexperience
goingthroughthecertificationprocess.Hestatedtheyperformedaverydiligentandthorough
investigation.Inhisopinionitwasameaningfuloperationandhewasveryhappythatthey
tookthetimetomakesurethatyouqualifyasaDBEwhenyouapplyforcertification.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thattheprocesswasadequateanddidnotnoticeanythingoutoftheordinary.
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Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthattheConsortiumcertificationprocesswassmoothwithnoproblems.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,describedthecertificationprocessasfineandsmooth.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthatL.A.CountyMTAmadethecertificationprocesseasy.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
thecertificationprocesswasquickandpainless.
SomeintervieweesreportedchallengesinconnectionwiththeConsortiumscertification
process.[Interviewees#CON:12,16,17,18,25,26,29,32,33,34,37,40,41,42,45,47,49,50,
51,CONTA#2,PF#4,12].Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertified
civilengineeringfirm,statedthathisbusinesswascertifiedthroughtheConsortiumthrough
OCTA.TheyhadoriginallytriedtogetcertifiedwiththeCityofLosAngelesbuttheytake
foreverandyoucanwaityearsbeforereceivingyourcertification.Hestatedthattheprocess
withOCTAwasexcellentandtheyreceivedtheircertificationwithinthreemonths,inpart,
becausetheeffortwasdrivenbyaproposal.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,indicatedthatthecertificationprocesswassomewhatcumbersomebecauseof
theamountofpaperwork,specificallythevolumeoffinancialdatarequiredtobeproduced;asa
smallercompany,Interviewee#CON16statedthatitdidnothavereadyaccesstoallofthe
financialinformationrequestedduringthecertificationprocess.AccordingtoInterviewee
#CON16,thereisalwaysmorepaperwork,anditisveryrepetitive.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatthecertificationprocessiscumbersome.
Interviewee#CON17statedthatveryearlyinthecertificationprocess,many,manyyearsago,
thecertifyingagenciesweresuspiciousaboutwherecertainmoniescamefromduringstartup.
TheagenciesweresuspiciousthatInterviewee#CON17wasnotactuallyrunningthebusiness
herself,butthatitwasafront.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
indicatedthatmostrecently,thecertificationprocesswaseasy,butthatacoupleyearsagoit
wasextremelyarduousandittookhermorethanayeartogetcertified.Shewassurprised
duringthelastrenewalprocesswhenitonlytookabouttwoweekstoreceivethecertification
paperworkbackaftersubmission.Interviewee#CON18notedthatthecertificationprocesshas
greatlyimprovedoveraverylongtimeframe.Inthepast,Interviewee#CON18statedthatshe
wasoftenfacedwithmanyrepetitiverequestsforinformation,andthetimeassociatedwith
certificationwasunsettling.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthattheConsortiumscertificationprocesswastedious.
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Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
foundtheConsortiumcertificationprocesstobecomplicatedandincrediblytimeconsuming.
Shealsothoughtthatitwasinvasiveintermsofthefinancialinformationrequested.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthathehas
attemptedtogetcertifiedbuthefeelsfrustratedthatafter21yearshehasnotbeenabletoget
certified.Hestatedthatthecertificationprocessisdifficult,tedious,andhardtounderstand.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthatthecertificationprocesswasnoteasy;theyhadtosubmitalotof
documents.Heunderstoodthatwastheprocesssohefollowedtheruleswiththehopethatit
wouldprovideavenuestodobusinesswiththeL.A.CountyMTA.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
feltthattherewasavaluetocertification.Shedid,however,statethatCaltranswastwoyears
behindonapprovingapplicationsforcertifications;theL.A.CountyMTAwasveryslow,andthe
stateprocessisconfusing.Shealsostatedthatsomeotheragenciescertificationprocesswasnot
verygood.Inherexperience,BART(BayAreaRapidTransit)wasthebest.Herrecommendation
wouldbetohaveaUnifiedQualificationProcess,whereoneclearinghousecanreview
applicationsandissuecertificationsthatwillbeacceptedbyalltheagencies.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatthecertificationprocesswastedious.ShestatedthatBARTs(BayArea
RapidTransit)systemisbetterbycomparison.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatthecertificationprocessinvolvedalotofunnecessaryandintrusivepaperwork.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthatthecertificationprocesswasnotcompletedinatimelymanner.
Interviewee#CON41,anAsianAmericanmaleownerofaDBE/MBEcertifiedgeneral
contractingfirm,statedthatthecertificationprocesswastediousandfilledwithalotof
paperwork.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,feltthattherewasalotofpaperworkinvolvedinthecertification
process.Shestatedthattherewassomuchpaperworkthatsheconsiderednotrenewingher
certification.Aftersomeseriousreconsideration,however,shedecidedtorenewit.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedshefeelsthattheprocesstorenewcertificationistooextensive
andextremelyinvasive.Shestatedthatitwastootimeconsumingandallaroundtoomuch.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthatthecertificationprocesswaslengthy.HestatedalsothattheL.A.CountyMTA
losthisapplicationandhehadtocompletetheprocessalloveragain.
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Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthatthecertificationprocessandtheinformationrequestedisnotrelevanttothe
actualjobthattheydo.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthattherewasalotofpaperworkalthoughhewasusedtothatgiventhenatureofhis
business.However,hestatedthatthereweretoomanyreasonstopotentiallyexcludean
applicant.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,feltasthoughthecertificationprocesswasverycumbersome.
Hestatedthatittooktoolongtocomplete,therewastoomuchpaperwork,andeventhe
renewalstakealotoftime.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathisassociations
membersfindthecertificationprocessintrusive.Manymembersdonotwanttoprovidetheir
taxinformationandareconcernedaboutwhowillseetheinformation.
PF#4,anindividualrepresentingacertifiedMBEfirmstatedthatthecertificationprocessto
becomeanMBEwasfraughtwithrequirementsthatresultedinthecertificationprocessitself
becomingarealimpedimenttoparticipationbysmallbusinessesinlargecontracts.She
suggestedthat,Therehastobeabetterway,oryourstaffneedstobebettertrainedtowork
withsmallbusinessestoobtainthecertification.(PublicForumLosAngelesheldonOctober20,
2009).
PF#12,aHispanicindividualwhoisaPrincipalofhiscompanyprovidedoraltestimonyata
publicforumheldonOctober20,2009.Hismainconcernwasthatthecertificationprocessto
becomeaDBEwaskeepingqualifiedsmallbusinessesfromparticipatingincontracts.Hestated
thatachangetothecertificationprocesswouldimprovethelotofalldisadvantagedbusinesses
inthepublicsectorcontractingprocess.(PublicForumLosAngelesheldonOctober20,2009).
SomeintervieweesreportedhavingeitherlimitedornoexperiencewiththeConsortiums
certificationprocess.[Interviewees#CON:1,2,3,6,7,8,27].Interviewee#CON1,anonDBE
HispanicAmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,doesnot
haveanyexperiencewiththeConsortiumcertificationprocess.Hehasappliedforcertification
withotheragenciesbuthedoesnotbelievethattherehasbeenanyvaluetothecertification;the
amountofpaperworkiskindofridiculous.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmaleownerofastructuralengineering
firmintheSanDiegoarea,hadnoexperienceregardingtheCertificationprocess.Hestatedthat
hehasconsideredworkingwiththeConsortiumbutheistoobusytohavetimeforthe
cumbersomecertificationprocess.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthathehasonlyremoteknowledgeabouttheConsortiumscertification
process.Between19901995oneofthefirmsthatheworkedat(priortostartinghiscurrent
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE15

business)mentoredsmallfirmssohewasalittlemoreinvolvedastotherequirementsofthose
businessesbutdoesnotcurrentlyhavemuchknowledgeabouttheprocess.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthattheircertificationisthroughCaltranssotheyhadnoexperience
withtheConsortiumscertificationprocess.
Perceivedvalueofcertification.
Mostintervieweesperceivedavaluetocertification.[Interviewees#CON:2,3,4,5,9,10,12,
13,14,15,17,19,20,22,23,24,25,26,29,30,32,33,36,38,39,40,41,42,43,44,45,46,48,
51,52,55].Interviewee#CON2,anAfricanAmericanmalestructuralengineerintheSanDiego
area,isnotcertifiedbutstatedhethinksthattherecouldbesomevaluetothecertification
processbecausetheConsortiumagenciesencourageminorityhiring.Itcouldopenadoorifthe
primeconsultantsarewillingtoworkwithDBEs.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthathedoesthinkthereisvaluetothecertificationprocess.However,
thereareproblemswithcertainfirmsobtainingDBEcertificationinappropriately(i.e.,DBE
fronts).Interviewee#CON3statedthatthecertificationprocedureusedbytheConsortium
sometimesallowsparticipationoffirmsthatdonotreallyqualify.HestatedthattheseDBE
frontsstillexisttodaybutcouldnotidentifyanyspecificprojectstheyworkedon.However,he
doesnotbelievethatthebusinessownersstatusasaminorityorwomanmattersintheend.He
stated,Ifyoudoagoodjobyougetwork,ifyoudonotyouwont.Firmsthatcontinuetogrow
dosobecausetheydotheworkproperly.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatthereisvaluetocertificationbecauseoncehemadethe
decisiontoconcentrateonpublicworksprojects,thecertificationhelped.Withoutthe
certification,hebelievesthatnoneoftheprimecontractorswouldhavecometohiscompanyto
requestproposals.HestatedthefactthathiscompanyiscertifiedasaDBEdefinitelyhelpsin
termsofgettingsolicitationsfromtheprimecontractors.WhentheDBEProgramwasdropped
byCaltranshesawadecreaseinrequestsforproposals.Bythattime,however,hehadalready
establishedthecompanyandhadworkingrelationshipswiththeprimecontractorssotheprime
contractorskeptcomingback.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,thinksthatcertificationisvaluablebecausemanyofthe
governmentalentitieshavetohaveacertainamountofDBEcontractorsontheirteams.The
primecontractorhastolookatwhatpercentageoftheRFPorproposalrequestisrequesting
DBEsandtheyhavealistofcertifiedentitiesthattheypullfrom.Also,Interviewee#CON5stated
thatelectricalengineeringisoneoftheareasinwhichtheagencieswantDBEs.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
thereisavaluetocertificationandthatiswhatstartedthecompanyandwhatgrewthe
company(hiscompanygraduatedfromtheDBEProgramin2004).
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Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thatthereisavaluetocertificationandtheywouldnotbeinbusinesswithoutit.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatunfortunatelythereisavaluetocertification.Hestatedthatinmanycaseswhen
theyteamupasaprimecontractortheysolicitorteamupwithlargerfirmsbecausetheyarea
DBE;thisselectionisbasedonqualifications.Incontrast,however,whentheirfirmisselected,
hesaiditisbasedontheirDBEstatusinsteadofontheirqualifications.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatcertificationisvaluabletoacompanythatisjuststarting
outandithashelpedhimsustainhisbusiness.Healsosaidthatthecontractsreceivedduetohis
certificationhavebeenhelpful.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatthereisavaluetocertification.
Interviewee#CON15,aHispanicAmericanmaleownerofanMBEcertifiedengineeringand
constructioncompany,feelsthatthereisvaluetocertification,butthatitismoreobviouswith
CaltransthanwiththeConsortiumentities.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatcertificationisapriorityandthatitisvery
importanttohercompany.ToInterviewee#CON17,havinghercertificationislikedoingher
homeworkandbeingreadyforopportunitytocome.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthatcertificationcouldbevaluableifhecouldgetmorework.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthateven
thoughheisnotcertifiedhefeelsthatthereisavaluetocertification.Hestatedthathebelieves
withcertificationhisbusinesswouldflourishandhewouldnotbeinthesituationheisinnow
wherehehastotraveldowntothevalleyandtoSanDiegotowherevertheworkis.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthereisavaluetobecomingcertified.Hestatedthatithelpssmallfirmsopen
relationswithlargefirmsandbuildsrelationshipsthatcanbelongstandingandprofitablefor
bothpartiesinvolved.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,perceivedavaluetocertificationthatiswhytheywentthroughtheprocess.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatthereisavaluetocertificationbutshedidnotknowtowhat
extent.Sheisnotabletodeterminetheeffectofcertificationonherbusinessabilitytoobtain
work.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE17

Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedtherewasabsolutelyavalueto
certification;hestatedthatgettingcertifiedsendsthemessagethatsmallbusinessesarereallyin
businesstodobusinessandareseriousaboutbeingcompetitive.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatthereisdefinitelyavaluetocertification;thisisthe
onlythingthatmakesgoingthroughthecertificationprocessworthwhile.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
attributed30percentofhisbusinesstohisDBEcertification,butdidnotknowwhetherthere
wasavaluetocertification.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatthereisdefinitelyavaluetocertificationwhenbidding
becauseitprovidesnecessarygovernmentdocumentation.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatthereisavaluetocertificationonfederalprojects,butnotatthelocal
level.HestatedthateversinceProposition209passed,therearenomoregoalsonprojects.He
statedthattheCityofLosAngeleshasapolicyknownasbesteffortswhichhedoesnotbelieve
iseffective.HestatedthattheCityofLosAngelesshouldhavegoalssothattheDBEscanget
work.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthatthereisabsolutelyavaluetocertification.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthatthereisavaluetocertificationalthough
sometimesitisadoubleedgedswordanddoesnotdoawholelot.Nonetheless,hefeltasthough
certificationisgoodtohaveandthegoodoutweighsthebad.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,reported
thatthereisavaluetocertificationbecausenowgovernmentjobswouldbeawardedtohisfirm.
Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthatthereisavaluetoabusinesshavingcertification
dependingonstatelaw.
Otherintervieweesperceivedlimitedornovaluetocertification.[Interviewees#CON:6,11,
18,21,27,28,31,34,35,37,47,49,50,CONTA#1,2].Interviewee#CON11,aSBEcertified
whitefemaleergonomicprimeconsultant,statedthatshehasnotseenanymonetarybenefitto
havingcertification.Interviewee#CON11didnothaveanyrecommendationsforimproving
certification;shestatedthatcertificationisnottheissuethatimpedesherabilitytodowork
withtheConsortium.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,does
notbelievethatthereisavaluetocertification,butshedoesnotthinkthatithurtstobe
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE18

certified.Interviewee#CON18isnotsurewhetherornotshehaswonorlostajobasaresultof
havinganycertification.Sheisnotsurehowithurts,buthowmuchithelpsisdifficultto
quantify.Interviewee#CON18statedthatinthepast,thecertificationprocessusedtohavemore
valuebecauseitgotyouontobidlists.Nowsheisnotsurehowthathappens.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,felttherewasabsolutelynovaluetocertification.
ShebelievesthattheCityofL.A.,ingeneral,isunfriendlytosmallbusinesses.Shefeelsthatit
shouldfollowthefederalsmallbusinessguidelinesliketheU.S.DepartmentofHousing.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatthereusedtobeavaluetocertification,butnow,hestated,itis
kindofuseless;hestatedthathiscompanyreceivesverylittlebusinessasaresultof
certification.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthathedidnotseeanyvaluetothecertification
process.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,feelsthathehasreceivedalmostnobusinessduetohismultiplecertifications.In
theyearshehasbeeninthebusiness,hefeelsthattheworkhehasreceivedhasbeenbecauseof
hisprovenrecordasopposedtoanyofthecertifications;heisstartingtoquestionthevalueof
certification.HehasdoneonejobforacontractorinLongBeachandtheydidaskabouthisSBE
HUDSection3certification.Hestatedthatmaybethereissomevaluetobeingcertifiedbecause
oftheadvertisementintheBlueBook,anditdoesresultininquiriesintohisbusinessandtheir
servicesandcanleadtowork.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,doesnotfeelthatthereisavaluetocertification.Shebelievesthatthereisanegative
connotationassociatedwithbeingacertifiedDBE/MBE/WBEwhenseekingpotentialwork.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatcertificationhelpswithrelationshipbuilding,butitdoesnotgiveyou
anedgeorhelpeconomically.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,didnotfeelasthoughtherewasavaluetocertificationandstatedthathehasnotreceived
asinglecontractasaresultofhiscertification.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthatthecertificationdoesnotcarrythesameweightorvalueasitdidinyearsp ast.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatmostofhis
membersfeelthatthecertificationprogramsareajoke.Hestatedthatmanyofhismembers
donotrenewtheircertificationsbecauseunlesstheyareversedwiththeprocess,certification
doesnotaccomplishmuchforhismembers.Hismembersbecomediscouragedwhentheydonot
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE19

receivecontractsandthenoftendonotrenewtheircertification.Hismemberscannotaffordto
diverttheirattentionforacoupleofweekstoaRFPwhentheyarenotsurethattheireffortswill
befruitful;theyneedtokeepcashflowing.Whenasmallbusinesstiesupitsassetsonapublic
project,theycannotoperateeffectivelyinotherareasandmanyofhismembersarenotwilling
todoit.Heprovidedoneexampleofatrucker,forinstance,wholosteverythingbecausehewas
unabletogrowhisbusiness.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatmemberssometimes
feelthereisvaluetothecertificationandothertimesnotanyvaluetothecertification.Hestated
thatcertificationencouragesprimecontractorstouseDBEs,however,theprimecontractors
onlyusethoseDBEswhentheyarerequiredtodosoanddonotusethemwhennotrequiredto
doso.HealsostatedthatthevalueofcertificationdiminishedafterProposition209waspassed.
HestatedthatProposition209didawaywithraceconsciousprograms,andthishashadan
impactintermsoftheavailabilityofpublicwork.Hestatedthatsomecontractorsdonotcall
DBEsubcontractorsatallanymore.
Recommendationsrelatedtothecertificationprocess.
Severalintervieweesrecommendedstreamliningthecertificationprocesssuchthat
certificationappliesfromagencytoagency.[Interviewees#CON:1,13,16,30,33,34,CONTA
#1].Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontracting
firmintheSanDiegoarea,recommendedmakingthecertificationprocesseasierandinvolving
lesspaperwork.Hestatedthatitwouldbehelpfultohaveasingleentityresponsiblefor
maintainingcertificationandthenallowotheragenciestocrossreferencetheinformation.He
statedthatthecertificationprocesshasdeterredhimfrombiddingonanumberofprojects
becauseofthetimeandresourcesinvolved.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,recommendedmorereciprocitybetweenagenciesandfromstateto
statewithrespecttocertification.Hestatedthatthecertificationprocessrequiresalotof
paperworkandredtape,butheunderstandstheneedforitandthinksthattheprocessis
reasonable.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatoneproblemwiththecertificationprocessisthatthevarious
certifyingentitiesdonotrecognizeeachotherscertificationseachyearthereisarequirement
thatchangeaffidavitsbesubmitted,inadditiontomoredocumentsandfinancialpaperwork.
ButInterviewee#CON16notedthatheunderstandsthereasoningfortheextensivepaperwork,
acknowledgingthatoneofthegoalsislikelytoeliminatenonDBE/minorityfigureheadswho
arenotactuallyrunningbusinesses.Interviewee#CON16suggestedthatthecertification
processbesimplifiedsuchthateachofthecertifyingentitiesrecognizesothercertificationsfor
thefulllengthofthecertificationperiod.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,recommendedthatthecertificationprocessbenationalizedsothattherewillbea
nationaldatabasethatcanbeaccessedbyagenciesandotherentitiesseekingsuchinformation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE20

Thiswouldeliminatetheneedtobecertifiedwithmultipleagenciesthathavediverseand
tediousprocessesinplace.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
recommendedimplementingaUnifiedQualificationProcess,whereoneclearinghousecan
reviewapplicationsandissuecertificationsthatwillbeacceptedbyalltheagencies.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,recommendedanationalizedcertificationprogramwherebycertificationwouldbe
acceptedinalljurisdictions.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatonewayof
improvingthecertificationprocessistostreamlinetheprocess.Hesuggestedeliminatingthe
needtocertifyforeachagencyandhaveonecertificationapplyforeachagency.Healsostated
thattheprogramneedstoencouragebusinessestoparticipate.Hestatedthatalthoughthe
agenciesorprimecontractorssaythereisnoavailabilityofDBEsforparticularprojects,ifthe
Consortiumcreatedmoreopportunities,thethesebusinesseswoulddevelop.Healsosuggested
betteroutreachefforts.HestatedthattheConsortiumshouldtrytobetterdispenserevenues
evenlyamonglargerandsmallerbusinesses.HealsosuggeststhattheConsortiumstop
requiringcertainspecializationsforprojectsifthecontractorhassomegeneralareaof
knowledgethatcouldapplytoprojects.HealsosuggeststhattheConsortiumstoprequiring
particularproductsthatprimecontractorshaveanexclusiveonandstateinthespecifications
thatacomparableorequalproductmaybeused.
Otherintervieweesrecommendedsimplifyingtheapplicationprocess.[Interviewees#CON:4,
14,20,25,26,27,29,30,39,41,42,50,51].Interviewee#CON4,aDBEcertifiedAsianPacific
AmericanmaleownerofanengineeringfirmintheSanDiegoarea,recommendedmakinga
changetoshortenthetimeittakesforcertificationandmakingtheprocesseasier.Henotedthat
thetimeinvestmentisdifficultforasmallbusiness.Interviewee#CON14,aLatinAmericanmale
ownerofaDBEcertifiedmarketingfirm,statedthatitishardenoughforasmallbusinesstoget
startedwithouttheaddedattentionrequiredtocompletethecertificationprocess.Hestated
thatthecertificationprocessrequirestheattentionofthepresidentofthecompany,an
additionalperson,andalotofresources.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatthesystemcanbeconfusingandtheConsortiumcould
doabetterjobofexplaininghowtogetthroughtheevaluations.Shestatedthatsitevisitsarean
impositionforsmallbusinesses.Shestatedaclassicexamplewasthatherbusinesslostits
certificationinSanFranciscobecauseofthreerandomsitevisitswhileherstaffwasoutinthe
field;shewasveryfrustratedandtherewasnothingthatshecoulddoaboutit.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthatittooksixmonthsforhiscertificationtobeapprovedafterhesubmittedhis
application.Hewastoldthedelaywasduetoabacklogofapplications.Herecommended
streamliningtheapplicationprocesssothatitdoesnottakesolong.
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Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
recommendedthattheConsortiumadjusttheamountofrequiredpaperworkaccordingtothe
sizeofthefirm;shestatedthatmanyofthequestionsdidnotapply.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatsincemostbusinessesapplyingforcertificationaresmall,itwould
bepreferabletoreducetheamountofpaperworkinvolved.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthatthe
applicationprocessshouldbeeasiertounderstandandaccessibletoeveryoneinterestedinthe
certificationprocess.Hestatedmaketheknowledgeavailable.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthereshouldbeashorterturnoverperiodforprocessingandreviewof
applications.Hestatedthatthetimingisinconvenientandittakestoolongtoreceive
certification.Hedoesnotunderstandwhyitwouldtakeover30days.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
recommendedthatpaperworkbestreamlined.Hestatedthatthecertificationapplication
requiresatremendousamountofhourstocomplete.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,
recommendedmakingtherequiredapplicationformsavailableonline.
Interviewee#CON41,anAsianAmericanmaleownerofaDBE/MBEcertifiedgeneral
contractingfirm,recommendedstreamliningtheapplicationprocess;theystatedthatittooka
longtimetopreparewhichtookawayfromtheirotherbusiness.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatthepaperworkshouldbestreamlinedandless
intrusive.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
reportedthatthecertificationprocesswasintrusiveandhadanumberofrequirementsthat
wereinvasive;hedidnotunderstandtheneedforsomeoftherequirements.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,recommendedstreamliningthecertificationprocessand
notedthatitwouldspeedupiftheagencieswerenotshortstaffed.HestatedthattheL.A.
CountyMTAneedsmorestaffinordertohandlethecertificationapplications.
Afewintervieweesrecommendedchangestothecertificationprocessortothequalifications.
[Interviewees#CON:6,26,CONTA#2].Interviewee#CON6,awhitemalecoownerofanon
DBENativeAmericanandwhiteownedrecyclingandmaterialssupplyingcompanyintheSan
Diegoarea,couldnotmakemanyrecommendationsforchangesorimprovementstothe
certificationprocessbecausehewasnotthatfamiliarwiththeprocess,butdidsuggestthatthe
thresholdamountberaisedtoincludecompanieswithvolumeunder$2millionsothatmore
businessescanqualifyfortheprogram.Interviewee#CON6alsostatedthatgovernmentshould
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE22

supportsmallbusinessesbynotplacingsomanyfinancialrestraintsonthebusiness(suchas
permittingrestraints).
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthattheConsortiumshouldmodifythequalificationstoaccommodatesmallbusinesses
andmaketherequestforfinancialinformationlessintrusive.
CONTA#2,thePresidentoftheBlackContractorsAssociation,recommendedthefollowing
changesorimprovementsforthecertificationprocess:theprocessshouldbestreamlined;
applicantsshouldnotberequiredtoprovidetaxrecords,andaswornaffidavitregardingthe
applicantsfinancialstatusshouldbesufficient.Ingeneralhesuggestedlessbureaucracy.
TwointervieweesnotedthattheprocesshaschangedandtheConsortiumshouldreevaluate
thecertificationprocess.[Interviewees#CON:24,39].Interviewee#CON24,anAfrican
AmericanfemaleownerofaDBE/MBE/WBEcertifiedprivateinvestigatingfirm,statedthatL.A.
CountyMTAhaschangedtheballgameandtheprocessshouldbeevaluated.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,
suggestedthattheConsortiumrevisittheapplicationprocess.Shefeelsthatsomeofthe
questionsareridiculoussuchasthesizeofherfirmasitrelatestoherabilitytoperformonlarge
projects.Shedoesfeel,however,thatasfarassomeoftheDBEsareconcerned,iftheycannot
completetheformsthentheydonotneedtobecertified.Shestatedthatinheropinionsomeof
thequestionshelpwiththevettingprocessassistinginsortingoutcompaniesthatcannothandle
thework.Thissavesherfirmandmanyotherfirmsfromwastingalotoftimeusingcompanies
justbecausetheyareDBEsandnotbasedoffoftheirqualifications.
Some interviewees wanted to see a more immediate benefit to certification. [Interviewees
#CON:5,28,32,36,37,47].Interviewee#CON5,anemployeeatanonDBEwhitemaleowned
electricalengineeringbusinessintheSanDiegoarea,recommendedthattheConsortiumallow
companieslikehisthatareminorityruntoqualifyasaDBEeveniftheownerisanonminority.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,recommendedthattheConsortiumincreasevendor
participation.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,wantedtoseeamoreimmediatebenefittocertification.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshebecamecertifiedtoobtainnewbusiness,butshehasnotin
factobtainedanynewbusiness.ShestatedthatthereneedstobeasystemwherebyDBEsare
monitored,andthuslevelingtheplayingfieldandmakingitfairforallcontractors,largeand
small.Shestatedtherehastobesomewaytomakesurethateveryonegetsapieceofthepie.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthattheConsortiumneedstoprovideasignificantamountofcontractsonarotatingbasis
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE23

toallowbusinesseswhohavenotyetdevelopedbeneficialconnectionstobeinvolvedin
projects.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthatitseemsasthoughallofthelargefirmsreceivethecontractsoverandover
again.HestatedthathewantsacontractwiththeConsortiumandisfrustratedthathehasnot
receivedone.
B.PublicandPrivateSectorWork
BGPAAStudyAnecdotesRegardingPublicandPrivateSectorWork
Privatesectorworkexperience.
Someintervieweesreportedworkingpredominatelyintheprivatesector,successworkingin
theprivatesectororapreferenceforworkintheprivatesector.[Interviewees#BGP:3,8,11,
13].Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,reportedthat100percentofthecompanysworkisprivateandthatallofthe
companyscontractsarewithairlines.Henotedthatthecompanydidhaveacontractwiththe
AirportAuthorityforfiveyearsbutnolongerhasthatcontract.
Someintervieweesreportedchallengesinconnectionwithpursuingorperformingworkinthe
privatesector.[Interviewees#BGP:6,7,11].Interviewee#BGP6,thepresidentandmarketing
coordinatorofaWBEcertifiedengineeringfirm,said,Thereisnoprivatework.Itscoming
back,buttheresverylittle.Interviewee#6said,Weusedtohavea50/50public/privatemix.
Thatisnolongerthecase.Imstayinginbusinessbecauseofpublicworksprojectsrightnow.
ManyfirmsIknowofareclosednowbecausetheyonlyhadprivateclients.
Interviewee#BGP7,theownerofawhitemaleownedSBEcertifiedlandscapingbusiness,
reportedthatprivatesectorworkisrelationshipdrivenandthatpublicsectorworkjustrequires
abid.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatitisgettingextremelydifficulttomakeanymoneyintheprivatesector.He
saidthatairlinesarebeingforcedtomakecutbacksbecauseoffuelprices,andthataffectsthe
amountofmoneythatsubcontractorsarepaidaswell.Hereportedthatintheprivatesector,
airlinesareputtingoutRFPsandthenaskingtheselectedcompanytotakea6percentdecrease
inincome.Hesaidthatifthecompanyrefuses,theairlineputsoutanotherRFPmidcontract.He
saidthatthisdidnotoccuronBGPAAprojects,butheknowsofatleasttwocompaniesforwhich
thishasoccurredattheLosAngelesAirport.
PublicsectornonBGPAAworkexperience.
Someintervieweesreportedsomesuccessobtainingpublicsector,nonBGPAAjobs.
[Interviewees#BGP:1,10,12,14,15,16].Interviewee#BGP10,aprincipalatanengineering
firm,statedthatlastyearmorethan80percentofthefirmsworkwasinthepublicsector.He
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE24

saidthattheamountofpublicworkhasincreasedduringthelastfewyears,butevenduring
goodeconomictimes,approximately70percentofthefirmsworkwasinthepublicsector.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,reportedthatthecompanysuppliesbothprimesandsubcontractorsin
boththepublicandprivatesector.Hesaidthatapproximately70percentofthecompanyswork
originatesinthepublicsectorand30percentoriginatesintheprivatesector.Hesaidthatthis
haschangedovertheyears,adding,Duringthebuildingboom,[itwas]prettycloseto50/50
[betweenpublicandprivatesectorwork].Whenthe[housingboom]ended,itwentbacktowhat
itstraditionallybeen,evenmoresonow.Butwevealwaysbeenorientedtowardmunicipal
projects.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthat70percentofthecompanysworkisinthepublicsectorand30percentofthe
companysworkisintheprivatesector.Headdedthatwiththedownturnintheeconomythe
companymoved[its]businessmoreintothepublicsectorbecausetheprivatesectorbusiness
hassloweddown.Hesaidthatbeforethedownturn,thecompanysworkwassplitevenly
betweenthepublicandprivatesectors.Hesaidthatrecentlyhehasnoticedalittlebitofa
pickupinworkinboththepublicandprivatesector,butthatobservationhasonlybeentruefor
justthisfirstpartoftheyear.
Interviewee#BGP15,themajorityownerofanMBE/WBE/DBEcertifiedMexicanAmerican
femaleowneddesign,consulting,architecturalengineering,andconstructionsupportservices
firm,statedthatapproximately95percentofthefirmsworkisinthepublicsector.Shesaidthat
shedoesnotnecessarilypreferpublicsectorwork.Shesaidthatshejustfellintoit.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatthecorporationpreferspublicsectorworkbecausethereislesspoliticsinvolved,
especiallyatthefederallevel.Hesaidthatthecorporationprefersfederalpublicsectorwork
becausethelocalpoliticsdontgetinvolved,[andtheyare]largerprojects,sotheyreeasierto
scheduleandkeepanevenworkflow.
Someintervieweesreporteddifficultiesinpursuingorperformingworkonpublicsector,non
BGPAAjobs.[Interviewees#BGP:1,3,5,8,9,15,TA#1].Interviewee#BGP1,theAfrican
AmericanmaleownerofanMBE/DBEcertifiedarchitecturefirm,saidthatonthepublicside,
nowthesameprojectsthatwe,asasmallbusiness,arepursuingarenowbeingpursuedbythe
bigcompanies.
Interviewee#BGP3,thecoownerofawhitewomanownedconstructionfirm,saidthathisfirm
doesverylittlepublicsectorwork.Hesaid,Toworkpublicwork,youhavetohavealotof
money.Youhavetobeabletodothewholeprojectonyourownmoney,andhopefullyyoullget
paid.Eventuallyyoullgetpaid,buttheyresofarbehindwithpay.Hesaidthatpublicsector
workistooimpersonal.Hestated,Tomecontractingisrelational.Sowhenyouworkinthe
publicsector,theresnorelation.Youdontknowwhospayingyou.Youdontknowwhosin
charge.Youdontknowanythingaboutthem.Idontlikeworkingthatway.Youdontmind
goinganextrayardforsomebodythatyouknow.Youworkharderforthosekindsofpeople.
Workingforthegovernmentislikeworkingfornobody.
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Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,said,Thebiggestproblem
withthepublicsectoriswiththelowestqualifiedbid.Itsexactlythat;youregettingthelowest
qualifiedpersontodothework.Frequentlythepeopleareincompetent.Hesaidthat
Sometimesfirmswillbeaskediftheyincludedeverythinginthebid,andtheywillimmediately
sayyeswithoutlooking.Theniftheyleftoutasubstantialportionoftheproject,theyregivena
majorchangeorder,whichwillbringthemabovethenextlowerbidder.Thesearethetypesof
pitfallsyouhaveinthepublicsectorbecauseofthemethodofbidding.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatthereisalotofcompetitioninthepublicsector.Hesaid,Rightnow,abarrieris
thatalotofpeoplearehungry,sowhenyougototheprebidmeeting,theyrepacked.Iguess
thatsagoodthingforthepublicsector,butitsnotagoodthingforeachindividual[firm].
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,saidthatinthepublicsectortherestoomuchpolitics.Theprivatesectorseemstobea
littlemorestraightforward.Whenwebidforpublicjobs,notjustworkwiththeairportbutall
publicsectorwork,theyreallydoctorupthepaperworktobetheadvantageofacertainvendor.
Thatsanorm.Theycatertoonevendor.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshehasseenfewer
jobsbeingputouttobidinthepublicsectorinthelastfiveyearsbecauseoftheeconomy.She
addedthatshehasnoticedthatnow,whenthereisaprebidmeeting;itsusuallystanding
roomonly.SheaddedthattheprimesinattendancearefromthroughoutCalifornia,where
before,itwouldbejustlocalorL.A.CityorOrangeCountyprimes.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatfewcontractdollarsareawardedtoAfricanAmericanownedfirmsinCalifornia.Hesaid,
[AfricanAmerican]peopleintheStateofCaliforniaspendabout23percentonstatetaxes.
[AfricanAmerican]contractorsinthisStateweareawardedlessthan1/17of1percentof
highways,bridges,freeways,airports,seaportswegetnoneofthosecontracts.
WorkexperiencewithBGPAA.
SomeintervieweesreportedsuccessinobtainingworkwithorperformingworkfortheAirport
Authority.[Interviewees#BGP:1,2,5,7,11,13,14,16].Interviewee#BGP1,theAfrican
AmericanmaleownerofanMBE/DBEcertifiedarchitecturefirm,saidthathisfirmhasworked
withtheAuthoritysince2000,andithasbeenexcellent.Hesaid,Whenwefirststartedthe
meetingswiththeAirport[and]theirrepresentativeswereverygood.Everyonetherehas
respectforeveryoneelse.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatthefirmhasbeen
workingwiththeAuthorityfordecades.HesaidthatworkingwiththeAuthorityismucheasier
becausetheyhaveacompetentengineeringstaffonsite.Theyhavepeoplethatactually
understandthebusiness.
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Interviewee#BGP7,theownerofawhitemaleownedSBEcertifiedlandscapingbusiness,said
thathisfirmiscurrentlydoingworkfortheAuthorityandthatpursuingworkanddoingwork
fortheAuthorityisnomoredifficultthananyotherpublicagency.Hesaid,Theyaredemanding
butitsOK.Ilikethat.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,statedthatthecompanysworkfortheAuthoritywasverypositive,andpublicsector
workisprobablythewaytogoifyoucandoit.Hesaidthatthecompanylostitscontractwith
theAuthoritybecauseitwasoutbid.Hestatedthatthecompanyhadaverypositiveexperience
workingforBGPAAfrom2004until2009.Hesaidthatwhenthecompanydidthework,hefelt
thatthefocuswasonserviceandjobquality.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatheworkedwith
theAuthorityasrecentlyasthatdayandthat,inadditiontobiddingworkthere,thecompany
hasamaintenancecontractwiththeAuthority,sothecompanyworksthereprettyoften.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
estimatedthat20percentofthecompanyspublicworkiswiththeAuthority.Hesaidthatthat
sourceofworkismorereoccurringthananybodyelse.HesaidthattheAuthorityisprobably
oneoftheeasiestpublicentitieswehavetoworkwith.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthathehashadaverypositiveexperienceworkingwiththeAuthority.Hesaidthat
Burbankhasbeenverynonpolitical,veryopen[regarding]whatthefutureworkload
mightlooklike.
Someintervieweesreporteddifficultiesinconnectionwithobtainingworkwithorperforming
workfortheAirportAuthority.[Interviewees#BGP:8,9,10,14,15,TA#1,TA#2].Interviewee
#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineeringfirm,said,We
haventbeendoingasmuchairporttypework.Maybealotof[AirportAuthorityworkhas]
beencompletedorflightsarebeingcutbacknowsomaybetheoverallnoiseissuesare
reducingabit.Hesaidthathisfirmsairportworkbeganfallingoffthreeorfouryearsago.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,saidthattheremorebackgroundchecks.Itsgottenworseoverthepasttwoyears.Thats
becauseoftheeconomy.Nowtheyrejustreallynitpickyandpennypinching,doingthingsthat
arereallyunethical.Interviewee#9wentontoexplainthat,theairportwillhaveusbidajob.
Wedesignedthejob,webidthejob,andthentheygogetotherbids,andthepersonthatsthe
lowbidderdoesntevenknowwhattoputin.Thentheyllcometousandaskiftheycantakea
picture[oftheirdesign]sotheycansellittothefirmthatwon.Interviewee#1saidthatthey
havehadthisexperiencewiththeairportauthoritytwice.Theyhaveyoudesignbuild
something,whichtakestime,thenafteryoubidit,thentheyllgoandgetthatcopyandgiveitto
someoneelseandletthemrunwithit.Thatdoesntmakeanysense.
Interviewee#BGP10,aprincipalatanengineeringfirm,statedthataverysmallpercentageof
thefirmsworkiswiththeAuthorityandestimatedthatcertainlylessthan5percent,couldbe
lessthan1percent,ofthefirmsworkiswiththeAuthority.HereportedthattheAuthorityhas
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE27

preconceivedideasregardingwhattheywantfromthefirmandhasalreadymadeadecision
astowhattheywant.Heprovidedanexamplesaying,theAuthoritymaytellthefirmthe
pavementthicknessitwants,soitasksthefirmtogoouttothesite,drillsomeholes,and
providetheresults.Interviewee#10statedthatthisprocessdiffersfromotherairportsfor
whichthefirmwouldgotothesite,drillsomeholes,analyzethesituationandthenprovidethe
airportwithapavementthickness.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedtheAuthorityselectsbiddersbaseduponbottomlineprice.Lowpricewins.Hesaid
thathehasnothadabidforBurbankthisyearyet,so[hedidnot]knowiftheyrechanging.He
saidthatelsewhereintheindustryitwasbasicallylowbidpricewins,andnowtheyvegoneto
acriteriabasedbiddingsystemwhereitsallweighted.So,theyllweighpointstoyourprice,
theyllweighpointstoyourpresentation,theyllweighpointstoyourinstallation,procedures
andpractices,andtheyllbreakthemdownintomultipleareas.Andthen,theygointo
committeeonit,andtheyllassignpointstoyou.Theyllgiveyou20pointsforthis,10
pointsandattheend,whohasthemostpointswinsthebid.Itsnotasapplestoapplesasit
usedtobe.HesaidthattheLosAngelesAirportisusingthismoreweightedsystem,andhe
commentedthathethinksthenewbiddingsystemisintendedtoallowthepublicentitytorule
[acompany]outandtakesomebodywhohasahigherbidbecausetheyhavemorepointsin
otherareas,especiallywhentheentitymaynotlikethewaythecompanywiththelowerbid
wouldactuallyputtheprojecttogether.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatthecompanyhadone
contractwiththeAuthoritythreeorfouryearsago,butshehasneverseenanyother
opportunitiestoworkthere.Shesaidthatduringherpreviouscontract,midwaythroughthe
contract[theAirportAuthority]hadalot[of]personnelchange,andafterwards,thingswere
moredifficult.ShereportedthatwhenthecompanybeganworkingwiththeAuthority,the
experiencewasverypositive,butwhentheAuthoritywentthroughastaffupheaval,the
companynolongerhadarelationshipwiththenewpeople,soitwasdifferent.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thathisorganizationrecentlywalkedoutofameetingwiththeAuthorityandexpressed
disappointmentoveranexperiencewithaprojectmanagerbecauseweaskedhimwhowas
doingaprojectoverthereandhecouldntorwouldntanswer.HesaidthattheAuthoritys
generalmessagetominoritycontractorsisthattheyaredoingalltheycandotohelp.Hesaidthe
Authoritytoldminoritycontractorsthatweregoingtodothebestwecantohelp.Hesaid
thathedoesnotbelievethatthemessageisgenuine.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,statedthathismembershavenotbeensuccessfulbidding
onAuthorityprojects.Hesaid,Yeah,wevemadealotofattempts;youknowwereaggressively
pursuing[theAirportAuthority],buttherestoomanyloopholesgoodfaithisoneofthem.He
said,Imean[themembersare]invitedtobid,butfrommypersonalexperience,theygetthe
bidstoolate;youknowthebidcouldbeoutforthreemonths,buttheywontnotifyusuntil
maybeaweekbeforeandthentheycansaythatwewerenonresponsiveandthenwewould
respondbackthatwecantbidthisproject.Weletthemknowthattheresnotenoughnotice.He
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE28

said,Ifindthatpeoplewhohave[workedfortheAirportAuthority]onlygetthesmall
portionsofwork.Theyllbelikeamajorprojectbuttherewillbelikeminoritiesgettingasmall
littleside.Theyllgiveyouacoupleofcrumbsbutyouknow,butyouwontgetapieceofthe
lionsshare.HesaidtheseexperienceswiththeAuthorityprojectsarerecent.
Differencesbetweenprivatesectorandpublicsectorworkexperience.
Manyintervieweesidentifieddifferencesinsecuringorperformingworkinthepublicand
privatesectors.[Interviewees#BGP:1,2,4,5,6,7,8,10,12,13,14,16,TA#1,TA#2].
Interviewee#BGP1,theAfricanAmericanmaleownerofanMBE/DBEcertifiedarchitecture
firm,saidthattheonlydifferenceisthat,asfarasgettingpaidasaprime,whenworkingfor
publicclients,theStatehasagoodpolicyforpayment,especiallyforcertifiedsmallbusinesses.If
aninvoicegoesbeyond30dayswithoutpayment,theStatewillpayinterest.Wevebeenpaid
thatinterestmanytimes.Interviewee#1saidthatpublicclientsmaynotbepromptinpayment,
buttheyholduptotheirendofthepaymentcontract.Hesaidthatformostprivatecontracts,
theprofitmarginisalittlebitlessthanforpubliccontracts.
Interviewee#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBEcertified
maintenanceandrepairfirm,saidthatourgoalistogomoreprivate,becauseprivateworkis
steadier.Withpublicwork,theresnoguaranteethatwellwinthebidinthenextthreetofive
yearswhenitgoesupforbid.
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthat,Inmy
experience,privateworkpaysbetter[thanpublicsectorwork].Youmakemoreprofits,and
yourepaidquicker.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,said,Whenwedo[work]
intheprivatesector,workgoesouttoselectbidderslist.Youdonthavetheincompetentpeople
there.Oneofthethingsthathappensinthepublicsectoristhatyoureconstantlyfightingover
changeorders.Intheprivatesector,thecontractorcantrytobleedeverynickeltheycanoutof
theowner,andthenetresultisthattheydontgetanotherjobinthatparticularindustry.It
forcesamorehonestrelationship.Hesaidthattherecanbeadifferenceinprofitability
betweenthesectors,dependingonthetypeofproject.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatworkinginthepublicsectorversustheprivatesectorisverydifferent:
Interviewee#6said,Itsthesamekindofwork,butitsthewaythecontractsarestructuredand
thepaperworkisquitedifferent.Intheprivatesector,ifIgivethemafee,thatsgoodenoughfor
them.Alotmorescrutinyisinvolvedinpublicworkandthingslikeinsurancerequirementshave
tobemet.Itsalotofpaperwork.Interviewee#6stated,Theneedsarequitedifferent
[betweenthetwosectors].Intheprivate[sector],peopledontneedasmuchdetail.Therearea
lotofregulationsinpublicwork.Interviewee#6saidthattheprofitabilityisslightlybetterin
theprivatesector.
Interviewee#BGP7,theownerofawhitemaleownedSBEcertifiedlandscapingbusiness,
reportedthathebelievestheprivatesectorismoreprofitablethanthepublicsector.
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Interviewee#7stated,Thereslotsofworkinmyindustrytheresneverashortageofwork.
WhereIfindashortageisinpricing.Everybody,itseemstome,isdroppingtheirprices.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,said,Thepublicsectorhastheirownestablishedprocedures.[Theprivatesectoris]
prettydependentonustotellthemwhattherequirementsaregoingtobeandwhattheyre
goingtohavetocomplywithtohaveasuccessfulproject.Thepublicsectortypicallyhasthat
awarenessalready.Hestated,[Thepublicsectorhas]budgetsthataredependentontaxesand
whentaxesgodown,theirbudgetsgodownandtheycutprojects.Theprivatesectorusually
doesntbeginaprojectuntiltheirfunding[is]inplace.Hesaid,Itmaybealittleharder[to
obtainwork]inthepublicsectorbecauseinthepublicsectortheyrequireanopenbidding
processsoyouendupwithmorecompetition.Healsosaidthatitssometimesmoredifficult
todoworkinthepublicsectorduetosecurityconstraintswhentheyexist.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatworkintheprivatesector
typicallyhashigherprofitmargins[and]significantlylesspaperwork.Hesaidthatprivate
sectorworkissignificantlymorevolatile,andthereisahighlikelihoodofnotgettingpaidif
youdontworkfortheproperclient.Hesaidpublicsectorworkinvolvessignificantlymore
paperworkandlowprofitmargins,buttheworkismorestable,andpaymentisinvariablyslow
butcertain.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthatbusinessismoreriskywith[the]private[sector]intermsof
payment,buttheydidnotthinkthattherewasasignificantdifferenceintermsofprofitability
betweenthetwosectors.Theystated,Botharerealcompetitiverightnow.Onmunicipal
projects,theinspectionandspecificationsarebetterenforced.Interviewee#12statedthatitis
easiertolearnaboutworkopportunitiesinthepublicsectorthanintheprivatesector.They
reportedthattheyreceivenotificationsconcerningbiddingopportunitiesfromtheLosAngeles
DepartmentofPublicWorks,commentingthattheirnewERSPprogramisfantastic.They
addedthatCaltransalsohasaterrificwebsiteandnotificationprogram,andeventheCounty
ofSantaRosaAlotofthemunicipalitiesarevery,verygood.Theyregettinguptospeed.They
saidthatintheprivatesectortheylearnaboutmostworkopportunitiesbecauseacontractor
willnotifythecompany,butprivateprojectsaremuchmoredifficulttofind.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatheprefers
workingintheprivatesectorbecausebondinghasbecomeverystringentrightnow,andtheres
notasbigof[a]bondingrequirementintheprivatesector,soitsgivingusalittlebitmore
accessintheprivatesectorversusthepublicsector.Idsayeversince2008into2009,
bondingcompaniesbecameverystringentontheirrequirementsasfarasbondingcapabilities,
[regardless]ofyourhistory.Hestatedthatbondingrequirementsseemtobelooseningupa
littlebitastheeconomyimproves.Hestatedthattheresalittlebitmorepaperworkonthe
publicsidethanontheprivateside.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thathepreferstoworkintheprivatesectorbecausetherearealotlesshurdlestojump
through.Hestatedthatpublic[jobsare]usuallyarelessprofitable.Theprivateonesaremore
profitable.Hereportedthatusually,[thecompanyhasnot]hadaproblemingettingpaidin
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE30

eitherthepublicorprivatesector.Hesaidthatinthepublicsectortherearesometimes
morehurdlestogettingpaid,butyouknowthatgoingin.Hesaidthatthereisnotnotice
aboutjobopportunitiesintheprivatesector.Hesaidthatcompanieslearnofopportunities
throughworkofmouthwhenacompanywillsolicitusuallythemanufacturerstorecommend
dealers.Hesaidthatthepublicsectoradvertisesopportunitiesandprovidesbidinformationon
theentitieswebsites.Headdedthatthecompanyget[s]alotofinformationfromthose
[websites].Hecontinued,Thatswhypublic[sectorwork]ismorereadilyavailablerightnow,
becauseitsposted,whereastheprivate[work],itsnotthatway.Hesaidthatprivatesector
workiscomprisedofmoredesignbuildprojects,andthepublicsectorworkiscomprisedof
workbuildingtoapredetermineddesignthatisallspelledout.Hecontinuedthatinthepublic
sector,thecompanygivestheentitywhatitwantsevenifitssomethingthatweknowcouldbe
betterin[a]certainarea.Youreallycantchangeit.Youcantryaddingchangeorderstoit,but
theydontwanttochangepricing,sothisisusuallynoteffective.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
statedthatworkinthepublicsectorisadvertisedmore.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatitmightbeeasierforminoritycontractorstoobtainworkinthepublicsectoranditmight
beeasiertoadvocateforminoritycontractorsinthepublicsector.Hesaid,Itsalwaysinthe
backofmymindthatitseasierwithpublicmoneybecausetherearesomanypeopleyouhave
toholdaccountableintheprivatesector.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,statedthatitiseasierforhismemberstoobtainworkinthe
privatesectorthanthepublicsector.Hesaid,Theprivatesector[is]builtonrelationshipssoit
woulddependontherelationshipsthattheywouldhavewiththeprivatesectorandwehavea
strongrelationshipsintheprivatesector.Hestatedthattheprivatesectorismoreprofitable
andeasiertoperformworkinthanthepublicsectorbecausetherearefewerrequirements.
Otherintervieweesreportedsimilaritiesinsecuringorperformingworkintheprivateand
publicsectors.[Interviewees#BGP:3,9,11,13,16].Interviewee#BGP3,thecoownerofa
whitewomanownedconstructionfirm,saidprofitabilityisaboutthesamebetweentheprivate
andpublicsectors.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,indicatedthattherewasnodifferencebetweenworkinginthepublicversusprivatesector
asfarasworktype,roleorprice.Interviewee#9said,Wepricethemallthesame.Wedont
careiftheyrepublicofprivate.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatpaymentdoesnotvarysignificantlybetweenthepublicandprivatesector.
Hestatedthattherearecertaincarriersthatarealittlelateintheirpayments,buthesaid
thatdidnotnoticeabigdifferencebetweenthepublicandprivatesectors.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatnotification
regardingworkopportunitiesisapproximatelythesameinthepublicandprivatesectors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE31

Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthathethinksthatcertaintyofpaymentisaboutthesameinthepublicandprivate
sectors.
Anecdotesregardingbusinessesactingasprimecontractorsandsubcontractors.
Someintervieweesreportedprincipalworkasaprimecontractorduetothenatureofthe
firmswork,ageneralpreferenceforperformingworkasaprimecontractororotherreasons.
[Interviewees#BGP:1,3,7,9,14,16].Interviewee#BGP7,theownerofawhitemaleowned
SBEcertifiedlandscapingbusiness,saidthathisfirmalwaysworksasaprimecontractorand
neverusessubcontractors.Hesaid,ingeneral,theprojectsonwhichhisfirmworksaretoosmall
toincludesubcontractors.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,saidtheyactasaprime,becauseWereinaspecialtytrade,andusuallytheyrejustasking
forthatparticularproject.Forasecuritysystem,theyregoingtogodirectlythroughus.
Interviewee#9saidthattheonlytimewearesubsiswhentheyputourworkunderagiant
constructionproject.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatthecompanyisalittletoosmalltoactasaprimeinalotofthesecasesinthe
public[sector]unless[theprojectis]basedonspecificcriteria.Hesaidthatthecompany
almostalwaysactsasaprimecontractorintheprivatesector.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatapproximately75percentofthefirmsworkisperformedasaprime.
Otherintervieweesreportedprincipalworkasasubcontractorduetothenatureofthefirms
work,ageneralpreferenceforperformingworkasasubcontractororotherreasons.
[Interviewees#BGP:2,4,8,10,11,13,15,TA#2].Interviewee#BGP8,thetechnicaldirectorof
awhitewomanownednoncertifiedengineeringfirm,saidthatthefirmworksprimarilyasa
subcontractorbecauseengineeringfirmsworkinginacousticstypicallyworkasconsulting
engineeringfirmsforrelativelysmallportionsoftheoverallproject.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthefirmactsasa
subcontractoralmostallofthetimebecauseitsworkissospecialized.Headdedthatagencies
oftenwantonecontact,butlargerarchitecturalorengineeringfirms,oftendonotperformthe
kindofveryspecializedworkthathiscompanyperforms,sothelargefirmwillsubcontractout
specializedportionsoftheproject,andtheremaybetwoto20firmsonateamworkingwiththe
primedependingonthesizeoftheproject.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthathiscompany
worksasasubcontractorapproximately75percentofthetimeandasaprimecontractor25
percentofthetime.Hestatedthatherpreferstheroleofaprimecontract,andthefirmoften
takesontheroleofprimebecausethecompanysoverheadcostsarealittlebitlowerbecause
evenwhenwereprime,werestillperformingtheelectrical.Itjustseemsthatthereisalittlebit
morecashflowwhenwereaprimeversusasubcontractorbeingtotallydependent.
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Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatsheprimarilytakesonthe
roleofasubcontractorbecauseofhercompanyssizeandbecausefortheCityofLosAngeles
thePortofLA,andtheairport,thereisnoMBE/WBErequirementifaprojectisunder
$150,000.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,statedthatitsmembersworkalmostexclusivelyas
subcontractorsbecauseofthetypeoftheirtrades.
SeveralintervieweesreportedhavingworkedwithanMBE/WBE/DBEprimecontractor.
[Interviewees#BGP:4,5,8,10,14,15,16,TA#2].Interviewee#BGP4,aprojectmanagerofa
WBEcertifiedconstructionfirm,saidthattherewasnodifferencebetweenworkingwith
MBE/WBE/DBEprimescomparedwithnonMBE/WBE/DBEprimes.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatworkingwithanMBE/WBE/DBEprimecontractorisnodifferentthanworking
withotherfirms.Hesaid,Ihaventnoticedanydifference.Theresnothingthatstandsinmy
mindasbeingsignificantlybetter,different,orrisky.Iwouldnothesitatetoworkfor
[MBE/WBE/DBEfirms].
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthefirmhasexperience
workingwithanMBE/WBE/DBEprimecontractor,andthatexperienceissimilartoworking
withothernoncertifiedfirms.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thatthecompanyhasworkedwithMBE/WBEorDBEprimesandsaidthattheexperiencewas
thesameasworkingwithanoncertifiedfirm.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshewasfamiliarwith
MBE/WBE/DBEprimecontractorsandhasalwayshadverygoodrelationshipswiththem.She
saidthatsometimesthesecompaniesareherclients,andothertimes,theyre[her]
competitors.Shesaidthatshehasalotofrespectfortheladies,andshethinksthatits
fantastic.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatheisawareofMBE/WBE/DBEprimecontractors,andalthoughhecannotremembera
particularinstance,hethinksthatthecorporationhasworkedunderanMBE/WBE/DBEprime
contractor.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatitsmembershavemostlikelyworkedfora
certifiedprimeorgeneralbuthecannotthinkofaspecificexample.
OtherintervieweesreportedhavinglimitedtonoexperienceworkingwithanMBE/WBE/DBE
primecontractor.[Interviewees#BGP:6,11,12,13].Interviewee#BGP6,thepresidentand
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE33

marketingcoordinatorofaWBEcertifiedengineeringfirm,said,Wedontknowveryoftenif
[primes]areMBEorWBE[certified].Manyoftheprimesthatweworkforarehuge
corporations,sotheyreprobablynotgoingtobeanMBE/WBE.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,reportedthathewasawareofMBE/WBE/DBEprimecontractors,andthecompany
hassubmittedbidstoworkwiththesecontractors,butsofar,thecompanyhasneverworked
withanMBE/WBE/DBEprimecontractor.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,reportedthatthecompanydoesnotaskprimeswhethertheyare
MBE/WBEorDBEcertified,sotheywouldnotknowiftheyhavedonebusinesswithacertified
primecontractor.
SDCRAAAnecdotesRegardingPublicandPrivateSectorWork
Thefollowinganecdotesregardingworkinthepublicandprivatesectorswereobtainedfrom
interviewsthatthestudyteamconductedinconnectionwithBBCs2009SDRCAAstudy.
Privatesectorworkexperience.
Someintervieweesreportedsuccessforminority andfemaleownedfirmsintheprivate
sector.Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthat
mostofhisfirmsworkcomesfromtheprivatesector.Interviewee#SD20,representinganAsian
Americanmaleownedfirm,andInterviewee#SD5,representinganAfricanAmericanmale
ownedfirm,bothalsoindicatedthattheirfirmsaresuccessfulintheprivatesector.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthatbiddingon
publicworkrequiresawelldevelopedsystemandawellestablishedsupportstafftofind
projectsandputtogetherproposals.Asaresult,hesaidthatprivateworkmightbeiseasierfor
MBEandWBEfirms(thattendtobesmall)thanpublicwork.
Someintervieweesindicatedthatthereismoreflexibilityandgreaterprofitpotentialinthe
privatesector.Interviewee#SD24,representingawhitemaleownedfirm,statedthattheprofit
potentialismuchhigherintheprivatesectorthaninthepublicsector:Privateworkismore
profitablebecausetheratesarebetter.Publicworkrequiresmoreefforttowintheworkandthe
ratesarenotasgood.Hewentontosaythatbidsaresolowinthepublicsectorinthecurrent
marketthatbeingprofitableisevenmoredifficult.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,alsosaidthatprofit
potentialishigherintheprivatesectorbutsaidthatpaymentproblemsarealsomuchmore
commoncomparedtothepublicsector.
Interviewee#SD17,representingawhitefemaleownedfirm,saidthatover60percentofher
firmsbusinesscomesfromtheprivatesector.Shesaidthatalthoughpublicworkismore
consistent,privateworktendstobemoreprofitable.
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Interviewee#SD42,representingawhitemaleownedfirm,suggestedthatworkintheprivate
sectorismoreprofitablethaninthepublicsector,buthenoted,Profitabilitydependsonthe
contract.
Interviewee#SD45,representingawhitemaleownedfirm,indicatedthatprofitabilityishigher
intheprivatesectorthaninthepublicsectorduetotherebeingfarfewercontractrequirements
intheprivatesector.
SDTA#7,representingaconstructiontradeorganization,reportedthatprivatesectorworkis
easierthanpublicsectorwork,becauseittendstobelessstructured:Ingeneral,thereismore
flexibilityforcontractorsworkingintheprivatesector.Hewentontosaythatthebureaucracy
inthepublicsectormakesitmoredifficultforfirmstomaneuver.
Otherintervieweesreportedthattherearenoconsistentdifferencesbetweenworkinginthe
privateandpublicsectors.Interviewee#SD21,representingawhitemaleownedfirm,indicated
thatprofitabilityusedtobebetterintheprivatesector,butthattodaytheprofitabilityofthe
privateandpublicsectorsiscomparable.However,hepointedoutthatdoingworkintheprivate
sectorisriskierthandoingworkinthepublicsector,primarilybecauseofnonpaymentissues.
Interviewee#SD40,representingawhitemaleownedfirm,indicatedthattheprofitabilityofthe
privateandpublicsectorschangesoften,sooneitisnotconsistentlymoreprofitabletoworkin
oneratherthantheother:ThewaySanDiegoworksisthatthepublicisneverdoingasgoodas
theprivateandthenitswitches.Ifyoucanworkonbothsidesofthefenceyoucansustain
yourselfhereIfyouarelockedintoonesector,yourrollercoasterwillhavemuchlargerdips.
SomeintervieweessaidthatMBEandWBEfirmsparticipatelessinprivatesectorwork.
Interviewee#SD2,representingawhitefemaleownedfirm,reportedthatonly10percentofher
workcomesfromtheprivatesector.Similarly,Interviewee#SD14,representingaHispanic
Americanmaleownedfirm,explainedthatonly20percentofhisbusinesscomesfromthe
privatesector.Hewentontosaythathisfirmprefersnottoworkintheprivatesectorbecause
ofanumberofbarriersthatMBEandWBEfirmsface,including:exclusionfromtheGoodOld
BoyNetwork,rampantbidshopping,andtheprivatesectorsdisregardforMBE/WBEstatus.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,saidthatMBE/WBE
firmshaveamoredifficulttimesucceedingintheprivatesectorduetoracismandstereotypical
attitudes:theprivatearenaisculturallybiased.Wethoughtwedidntfitinfromaraceand
genderperspectivewedefinitelydontfitintheprivatesector.Youlookattheselarge
corporations,thebighotelsthatyouseetheyrenottryingtosee[MBE/WBEfirmssucceed].
Ifwedonthaveatrayinourhand,ifwerenotinaservingcapacity,thenwereinvisible.
Someintervieweesreportedthatitismoredifficultforminority andfemaleownedfirmsto
besuccessfulintheprivatesectorduetothenonexistenceofDBEgoals.Interviewee#SD21,
representingawhitemaleownedfirm,remarkedthatDBEstatusdoesnotplayaroleinthe
privatesector,makingitmoredifficultforminorityandfemaleownedfirms.Whenaskedwhy
thatisthecase,Interviewee#SD21replied,Ontheprivateside,itsallstrictlylowbidtypestuff.
Itsdollardriven.
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Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthatintheprivate
sectorlowbidsandpersonalconnectionsplayamuchlargerroleinwinningcontractsthan
MBE/WBEstatus.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,explainedthathis
minoritystatusdoesnothelphisfirmgetworkintheprivatesector:Privateworkreally[comes
downto]who[theprimecontractors]know,andwhohasthebestprice.Hewentontosay,My
experienceintheprivate[sector]isthattheyreallyjustwantthebestbangfortheirbuck.They
justwantagoodproductintheend.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,indicatedthatDBE
statusdoesnotplayaroleincontractawardsintheprivatesector:Iveneverseenacontract
justbecausetheywereminorityownedoraDBEintheprivatesector.
Publicsectorworkexperience.
Severalminority andfemaleownedintervieweesreportedsuccessinthepublicsector.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireattheSan
DiegoAirport,indicatedthatshehashadgreatsuccessinthepublicsectoroperatingsix
concessionsatthere.Similarly,Interviewee#SD9,representingaminorityfemaleownedfirm
thatisaconcessionaireattheAirport,andInterviewee#SD12,representingaminoritymale
ownedfirmthatisaconcessionaireattheAirport,bothreportedsuccessworkingthere.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthat,comparedto
theprivatesector,findingoutaboutprojectsiseasierinthepublicsectorandcontractawards
arefairer:[Thepublicsectorprocess]ismoreopen,moretransparent.[Agencies]understand
thatbecauseitspublicmoney,theyhavetoselectagroupofconsultantsorcontractorsthats
qualified,basednotsolelyonprice.Theyputmoreemphasisonthequalificationsoftheteam
thatdoesthework.Interviewee#SD20wentontosaythatasaresultofthecurrentrecession,
mostofhisfirmsworkcomesfromthepublicsector.
Interviewee#SD28,representingawhitefemaleownedfirm,indicatedthatestablishing
relationshipswithprimecontractorsinthepublicsectoriscrucialtogettingworkinthefuture
andallowssmallfirmstobesuccessfulinthepublicsector:Onceyougetthatbondwith
[certainprimecontractors]alotofthemdontevencallaroundfor[otherbids].
Afewintervieweesreportedthatprojectsinthepublicsectortendtobemoreprofitablethan
projectsintheprivatesector.Interviewee#SD19,representingawhitemaleownedfirm,said
thatpublicjobsaremoreprofitable[thanprivatesectorjobs].Shewentontosaythattheone
exceptiontothatclaimisiftheprivatesectorclientisalargecompany.
Interviewee#SD31,representingawhitemaleownedfirm,saidthatpublicsectorprojectswith
prevailingwagesaremoreprofitablethanbothotherpublicsectorprojectsandprivatesector
projects(whicharecomparableinprofitability).However,Interviewee#SD31estimatedthat
prevailingwagesapplytoonlyhalfofthepublicsectorprojectsonwhichhisfirmworks.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE36

Afewintervieweesreportedthatminority andfemaleownedfirmsarenotsuccessfulinthe
publicsector.Interviewee#SD21,representingawhitemaleownedfirm,saidthatitisvery,
verydifficultforMBEandWBEfirmstoremaincompetitiveinthepublicsectorbecausethey
tendtobesmallerandlessestablishedthanmajorityownedfirms.HewentontosaythatDBE
certificationdoesnothelpeither,becauseDBEgoalsarenolongermandatory:Idontthink
[DBEstatus]comesintoplay.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedthatalthough
heusedtohavesuccessinthepublicsector,heisyettowinapublicsectorcontractsince
reopeninghisbusinessin2006.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,reportedthathisfirms
publicsectorworkisdecreasing.Anumberofagencieshavereducedthefrequencywithwhich
theyusehisfirmsservices(e.g.,thePortAuthorityandtheCityofSanDiego).
Someintervieweesindicatedthatpublicsectorworkisverycompetitiveasaresultofthe
currentrecession.SDTA#7,representingaconstructiontradeorganization,indicatedthatthere
isincreasedcompetitioninthepublicsector:Therewasonebidderslisttheotherdaythathad
43biddersonit!SDTA#7wentontosaythatincreasedcompetitionwouldaffectsmallfirms
morethanthelargerfirms,becausetheyaretheweakestfinancially.
Consistentwiththosecomments,Interviewee#SD11,representingawhitemaleownedfirm,
alsoindicatedthatpublicsectorworkhasbecomequitecompetitiverecently:Wearehaving20
to25biddersonourworkwhereweusedtohaveseven.Workhassloweddownasaresultof
theeconomicdownturn.
Interviewee#SD28,representingawhitefemaleownedfirm,explainedthatthecurrent
recessionhasresultedinincreasedcompetitioninhisfirmssector:Whereitusedtobe[that]
therewerethreemainplayers[inthefirmsindustry],nowtherearefiveorsix.
Interviewee#SD6,representingawhitemaleownedfirm,indicatedthatthepublicsectoris
extremelycompetitive.Heexplainedthathisfirmwasthesecondlowestbidderon13projects
inthepastyear,andinallcasestheirbidswerelessthan1percenthigherthanthatofthelowest
bidderandtheydidnotwinanyofthoseprojects.
Interviewee#SD18,representingawhitefemaleownedfirm,saidthatthemarketisvery
competitiveandthatpriceisveryimportant,particularlyinthepublicsector:Servicedoesnot
tendtobeavalueaddedforthisindustry.
Interviewee#SD37,representingawhitemaleownedfirm,reportedthatthecurrentmarkethas
resultedinincreasedcompetitioninhisfirmsindustry.Henotedthattheresidentialmarkethas
sloweddownandthatthecontractorswhopreviouslyworkedintheresidentialsectorarenow
enteringthecommercial,industrialandgovernmentmarkets.
Interviewee#SD41,representingawhitemaleownedfirm,explainedthatprivatesector
opportunitieshavedriedupdramaticallyandthatfirmsthatusedtobidonprivatesectorwork
arenowbiddingonpublicsectorwork,increasingtheamountofcompetitioninthepublic
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE37

sector.Hewentontosaythatmanyofthosefirmsdonothaveexperiencebiddingonpublic
sectorworkandtheirbidsaretoolowtobeprofitable:Peoplearebidding10to15percent
belowmycostsmybareminimumcosts!
Interviewee#SD38,representingaHispanicmaleownedfirm,alsoreportedthatthereismore
competitioninthecurrentmarket.Hedescribedarecentbidthathisfirmsubmitted:
CompetitionishigherWebid[aprojectatalocalhighschool]Therewere21general
contractors[bidding].
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatthecurrent
recessionhasmadeitdifficultforsmallfirms,becausetherehasbeenasteepincreasein
competition,whichhasinturnincreasedtheprobabilityofherfirmbeingoutbid.Shewentonto
saythattheincreasedcompetitionmeansthatfirmshavetoexceedclientsexpectationsinorder
tocompeteforjobswiththeminthefuture.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthat,dueto
thecurrenteconomicconditions,hisfirmnowcompetesforpublicsectorworkwithanumberof
firmswhopreviouslyonlyworkedintheprivatesector.Hesaid,Timesaretoughrightnow
itstheeconomy.
Afewintervieweescitedcomplexbidproceduresorrestrictivecontractspecificationsasa
barriertodoingworkinthepublicsector.Interviewee#SD3,representingawhitemaleowned
firm,saidthatthebiddingprocessforpublicagenciestakessomesophistication.Interviewee
#SD21,representingawhitemaleownedfirm,commentedthatthebiddingproceduresinthe
publicsectorcouldbeabarriertoaninexperiencedentity.Theyrecomplexanddifficult.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthattheprimarydifference
betweentheprivateandpublicsectorsisthatworkinginthepublicsectorrequiresfirmsto
followmorestringentguidelinesandrestrictions.Sheremarked,Youhavetojumpthrough
somedifferenthoops[inpublicsector].
Interviewee#SD31,representingawhitemaleownedfirm,statedthatthebiggestdifferences
betweenworkingintheprivatesectorandworkinginthepublicsectorarethatintheprivate
sectorfirmsdonothavetodealwithbondingnordotheyhavetodealwithidioticRFPs.
RegardingcontractsandRFPs,hesaid,Ifindthatmanyofthesethingsarewrittenbylawyers
whodontknowelectricityfromwind,andtheyputsuchstupidthingsinthecontractstheyve
gotinformedattorneysstickingtheirnosewhereitdoesntbelong.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,reportedthatdealing
withthecontractspecificationsofgovernmentprojectscanbedifficultfornewfirms:Iwould
thinkitsreallydifficultforanewemergingcompanytocomeinandmeettherequirements
thatthegovernmentsetsforth.Typically,yougetacontractandyougetabookthatsfourinches
thickfullofspecifications.Comparingpublicsectorworktoprivatesectorwork,Interviewee
#SD32saidthattherearealotmorehoopstojumpthroughinthepublicsector.
Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatcontract
specificationsinthepublicsectorcanbedifficulttodealwith.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE38

Interviewee#SD44,representingaHispanicmaleownedfirm,statedthathisfirmrarelysells
productstopublicagencieshesaidthat99percentofhisfirmsbusinesscomesfromthe
privatesector.Heindicatedthatdoingpublicagencyworkrequiresmorepersonnelandawell
establishedsystem:Itsjustadifferentanimal[workingwithpublicagencies].Werenotsetup
todothatrightnow.Wedonthavethemanpowertodoit.
Interviewee#SD45,representingawhitemaleownedfirm,statedthatthereisagreatdealof
subjectivityinhowpublicsectorstaffinterpretscontractspecificationsandregulations.
Interviewee#SD45describedanexperiencehehadworkingwithCaltrans:Whentheytookall
theirrequirementsandpunchedthemalldownhereinDistrict11,wehadpeoplethat
interpretedtherulesbytheirownmeans.Itsalmostafiefdomlikeathirdworldcountry
downhere.YouhaveaGreenCardrunningtheengineeringforminorBcontracts.Theone
underneathhimisaGreenCardfromthePhilippines.Theguyswhoareemptyingthetrashcans
arethecertifiedCaltransengineerswhocanbuildbridges.Itssoupsidedown.Hewentonto
saythatregulationsarewrittenforsomebodyintheindustrywhounderstandsthem.Itsnot
foridleinterpretation.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,reportedthatfirms
havetomeetmorerequirementstowinpublicsectorworkcomparedtoprivatesectorwork:
Thepublicsectorrequiresmorequalificationsthantheprivatesector.Youhavetobelicensed,
insuredandbonded.Intheprivatesectorsometimesthosearenotarequirement.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,saidthatthe
relationshipthatafirmhaswithacontractingofficergoesalongwayindeterminingthefirms
successwiththepublicagency.Shesaidthatmuchofthebidprocessinthepublicsectoris
subjectiveandalotofitisdependentonhowthecontractingofficerfeelsaboutaparticularfirm:
[Contractingofficers]canchangeyourlife,changeyourbusinesshelppropelittobe
successful,causeitnottobesuccessful.Theyhavesomuchpowerandauthority.Iftheyareof
poorcharacterinanycapacityiftheyareracist,orbigoted,oranything,theycandictate
whereyourbusinessisgoingtogo,andIthinkthatsunfair.
Someintervieweescitedextensivepaperworkasabarriertodoingworkinthepublicsector
butothersciteditasafeature.Interviewee#SD11,representingawhitemaleownedfirm,
indicatedthatextensivepaperworkinthepublicsectorimpedessuccess:Thebiggestbarrier
forbiddingpublicworksisthehugeamountofpaperworkthatpublicagenciesrequireAfew
ofmyfriendshavecompaniesbuttheywontdopublicworkbecauseofthepaperwork
Interviewee#SD41,representingawhitemaleownedfirm,said,Publicprojectsaremorepaper
heavy.Youhavetosubmitcutsheetsoneverythingandanythinglotsofchecksandbalances.
Thepublichasitsownspecificationsforeachjob.Youhavetoreadthespecsintheirentirety.
Thatcouldmean250to1,000pages.Thereisalotofupfrontwork.Hecontinued,Biddingon
thepublic[sector],itseparatesthemenfromtheboys
Incontrast,Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,saidthat
theextensivepaperworkisanadvantagetoworkinginthepublicsector:Ireallylikethepaper
workgamewiththepublicwork.Iteliminatesthepossibilityofdoingsomethingwrong.
Everythingisdocumented.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE39

Interviewee#SD37,representingawhitemaleownedfirm,saidthatpublicsectorprojectsare
describedinmuchmoredetailthanprivatesectorprojects,makingiteasiertocompletethe
work:Largerpublicjobsusuallyhaveamorecompletesetofplansorengineereddrawings,so
youknowexactlywhatyouregoingtobuildwhenyoubidonit.Privatejobsrarelyhave
drawingsanditwilljustbeaverbalscopeofwork.Theprivate[sector]willprovideuswith
specificationsalongtheway,butwefigureouthowweregoingtobuildit.
Interviewee#SD40,representingawhitemaleownedfirm,reportedthatpublicsectorworkis
generallymoredifficultthanprivatesectorwork:Publicprojectshavemorepoliticsandyou
havetobepatientthereisabroaderaudiencetopleaseandthingsdontgoasfastasyou
wouldlike.Hewentontosaythatthereisalsolessflexibilityinthepublicsectorthaninthe
privatesector.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,reportedthatthereisa
greatdealofpaperworkinvolvedwithpublicsectorwork,andthatitcanbedifficultforfirmsto
learn:Youlearnthepaperworkwhileyouredoingthejob.Theresnotrainingforwhatyou
haventdonepaperwise.Hecontinued,Paperworkcanbeaproblem.Thegeneralcannotget
paiduntilthesubspaperworkistogether.Thesubdoesntwanttodothepaperworkbecause
theyrebombarded.Interviewee#SD46indicatedthathisfirmoftendoespaperworkonbehalf
ofsubcontractors.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,saidthat,compared
toprivatesectorwork,thereismuchmorepaperworkassociatedwithpublicsectorwork.She
said,[Intheprivatesector]youdoajobwalk,yougivethemaquote,theygiveyouacontract,
youdothework,youbill,andyougetpaid.Thepublicsectorispaperworkandhugecontract.
Theresalwayssomekindofcode,FARregulationswiththefeds.
DBEsasprimecontractors.
AfewMBEfirmsindicatedthattheyoftenworkasprimecontractors.Interviewee#SD14,
representingaHispanicAmericanmaleownedfirm,reportedthatapproximatelyhalfofhis
workcomesasaprimecontractor.Similarly,Interviewee#SD20,representinganAsian
Americanmaleownedfirmsaidthatoverhalfofhisworkcomesasaprimecontractor.
Interviewee#SD43,representingaHispanicmaleownedfirm,saidthatherfirmworksalmost
exclusivelyasaprimecontractor.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,saidthatheprefersto
workasaprimecontractor,becauseitallowshimtocontrolhisownmoney,dealdirectlywith
agenciesandowners,andbethefirsttogetpaid.Ofhisworkasaprimecontractor,Interview
#SD5remarked,[Workingasaprimecontractoris]moreresponsibilitybutbetter
circumstancesforme.
Severalintervieweeswereabletonamesuccessfulminorityandfemaleownedfirmsthat
workasprimecontractors.Interviewee#SD21,representingawhitemaleownedfirm,
indicatedthatthereareanumberofminorityownedfirmsworkingasprimecontractorsinthe
SanDiegoarea:Therearenumeroushighlyqualified,motivated,andfinanciallyableblackand
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE40

LatinocontractorsinSouthernCalifornia.Interviewee#SD21wentontospecificallynamea
femaleownedfirmwithwhichhisfirmhasworkedinthepast.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,saidthathehas
workedwithMBE/WBEprimecontractorsandhashadgoodexperienceswiththem.
Interviewee#SD26,representingawhitemaleownedfirm,namedaSubcontinentAsian
AmericanownedfirmthathedescribedasoneofthebestprojectmanagersIhaveeverworked
with.
SDTA#6,representinganAsianAmericantradeassociation,reportedhavingatleastafew
membersthatworkasprimecontractorsandspecificallynamedaminorityownedengineering
firm.Similarly,SDTA#4,representingalocalchamberofcommerce,wasabletonamea
successfulminorityownedconstructionfirmthatworksasaprimecontractorintheSanDiego
area.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthatherfirmhasworkedwith
afewMBE/WBEprimecontractors.Shewentontosaythatworkingwiththosecontractorsis
notanydifferentfromworkingwithnonDBEprimecontractors.Shereportedthattheonly
differenceisthatMBE/WBEprimecontractorstendtobemoreunderstandingofherfirms
positionasaWBEfirm:Ithink[MBE/WBEprimecontractors]understandalittlemoreabout
whatweregoingthrough[asaDBEfirm].
Otherintervieweeshadtroublenamingminority andfemaleownedprimecontractors.When
askedifhehasworkedwithotherminorityorfemaleownedprimecontractors,Interviewee
#SD14,representingaHispanicAmericanmaleownedfirm,said,notawholelot.Similarly,
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,couldnotthinkofany
examplesofminorityorfemaleownedprimecontractorswithwhichhisfirmhadworked,and
hesaidthathewasconfidentthathisfirmhadneverworkedwithaminorityorfemaleowned
primecontractoronalargeproject.
Interviewee#SD2,representingawhitefemaleownedfirmsaidthatherfirmrarelyworksasa
primecontractor.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,indicatedthatthereare
onlyasmallnumberofminorityandwomanownedfirmsintheSanDiegoarea:Theresnot
reallyalot[ofMBE/WBEfirms]inSanDiegoImsurethathasalottodowiththesmall
percentages[ofminoritiesinSanDiego].Hewentontosaythathehasneverworkedwithan
MBE/WBEprimecontractor.
SDTA#1,representingalocalchamberofcommerce,indicatedthathecouldnotthinkofasingle
successfulminorityorfemaleownedfirmthatworkedasaprimecontractorintheSanDiego
area.
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatshecouldnotthink
ofanysuccessfulMBE/WBEprimecontractorsintheconstructionindustrybesidesherown.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE41

Someintervieweesindicatedthatfirmsizeisabarriertominority andfemaleownedfirms
workingasprimecontractors.Interviewee#SD15,representingawhitemaleownedfirmthatis
aconcessionaireattheAirport,saidthatgiventhesizeofcompetingfirms,itisunlikelythata
minorityorfemaleownedfirmcouldbesuccessfulasaprimecontractorinhisfirmsindustry.
Similarly,SDTA#1,representingalocalchamberofcommerce,expressedhisbeliefthatmost
minorityandfemaleownedfirmsaretoosmalltobesuccessfulasprimecontractors:Mybias
isthat[minorityandfemaleownedfirms]aregenerallynot[largeenough].
ConsortiumAnecdotesRegardingPublicandPrivateSectorWork
Thefollowinganecdotesregardingworkinthepublicandprivatesectorswereobtainedfrom
interviewsthatthestudyteamconductedinconnectionwithBBCs2009Consortiumstudy.
Privatesectorworkexperience.
Someoftheminority andfemaleownedbusinessesinterviewedreportedatleastsome
successintheprivatesector.[Interviewees#CON:1,2,9,11,13,1718,19,20,21,22,23,27,
28,29,30,34,35,36,37,38,39,40,42,43,44,45,46,47,49,50,51,CONTA#1,2].Interviewee
#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontractingfirmintheSan
Diegoarea,statedthattheydoverylittleadvertisingintheprivatesectorbecausetheirproduct
isbasedontheirreputation;theypridethemselvesondoingaqualityjob,payingtheir
employeesafairwage,andalwaysgettingthereferralandcallback.Hestatedthat95percentof
theirbusinessisrepeatcustomersorreferrals.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthatpeoplearemoreopenmindedandwillingtogiveminorityconsultantsashotin
theprivatesector.However,Interviewee#CON2statedthatthemarketisgoingthroughatough
economiccycleandtheindustryisreflectiveofthat.Interviewee#CON2statedthathisstatusas
aminoritybusinessownerdoesnotaffecthisbusinessintheprivatesector.Hesaidthatthe
markethasbeenthebiggestfactor.Hesaidthathisbusinessbegantofeelthemarketslowdown
in2007.Hedoesnotbelievethattheimpactofthecurrenteconomyisanydifferentforminority
ornonminoritybusinessowners.Interviewee#CON2statedhisexperienceintheprivatesector
hasbeenmixed.Hehasbeenabletoobtainafewofthekindsofprojectsthathewouldlikework
on.Hestatedthatitis5050;hereportedthatthisprimarilyhastodowithhimoperatinganew,
smallfirm.Hesaidthatitishardtobreakintothemarketandcompete.Interviewee#CON2
statedthatthemostchallengingissueisthemarketingandnetworking.Hestatedthatthebest
thingtodowouldbetohireamarketingfirm,butthatwouldcomeatahugecost.Hestatedthat
itishardtodotheworkandmarketingatthesametime.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
theyliketoworkintheprivatesector,because,ingeneral,theworkismoreprofitable.However,
theprofitabilityintheprivatesectorfluctuateswiththeeconomy.
Interviewee#CON11,anSBEcertifiedCaucasianfemaleergonomicprimeconsultant,statedthat
workinboththeprivatesectorandthepublicsectorisgreat.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE42

Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthattheactualworkintheprivatesectorandthepublic
sectordoesnotfeeldifferent.Hestatedthatintheprivatesector,thereisnotasmuchscrutiny
onhisrates.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatherexperienceintheprivatesectorhasbeen
positive.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
indicatedthatworkingintheprivatesector,herworkhasbeenlargelywithnonprofitsand
501(c)(3)organizationswithtransportationprojectcomponentsThoseexperienceshavebeen
verypositivebecausebythetimethosecompaniesfindInterviewee#CON18,theyarein
desperateneedofassistance.Herworkintheprivatesectorisnotmuchmoney,butthework
hasbeensteadyovertheyears.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,reportedthatherbusinesshasbeenverysuccessfulintheprivateand
publicsectors.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,hasworkedintheprivatesectorandshehasbeen
successful.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthatallof
hisbusinesscomesfromtheprivatesector;heworksprimarilyonresidentialandcommercial
buildings.Hestatedthathehasbeensuccessfulinbusinessforthepast21yearsandhasa
steadyflowofwork.Hestatedthathisbusinesscomesfromreferralsfromcontractors.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathehasbeensuccessfulintheprivatesector.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatshehasbeensomewhatsuccessfulintheprivatesector.Shecharacterized
herexperienceasokay.Shestatedthattheprivatesectordoesnotutilizehercompanys
services.Shestatedthattherearebigbarrierstoworkingintheprivatesectorandthepayment
policiesarehorrible.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatshehasbeensuccessfulintheprivatesector;shestatedthatafter
yearsofworkingwithaSouthernCaliforniautilitycompany,therelationshipsthatshehas
developedarestrongandleadtomorework.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshehasbeensuccessfulintheprivatesector,butnotedthatshe
mightnotgetpaid.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE43

Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathisfirst10yearsworkingintheprivatesectorwereverygood.Hestated,however,
thatrecentlyprojectopportunitieshavebeenslow.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,reportedthathehasdefinitelybeensuccessfulin
theprivatesector.Hestatedthatheisevenhappierabouttherecentchangesincludingthat
youngpeoplearegettingintopositionsofpowerandlookingatthingsdifferently.Hestatedthat
heistiredoftheGoodOldBoyNetwork.Herecalledgettingacontractandwalkingintoaroom
atatreatmentplant.Hestatedthatthewholeroombecameveryquietandthatmadehim
nervous;oneofthemenshouted:Wedonotneedanymoreminorities!Heinformedthemen
thathewasontheprojectandthatwasnotgoingtochange.Hestatedthatthishasbeenawayof
lifeforhimbutheistiredofit.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,
reportedthatshehasbeensuccessfulintheprivatesector,butnotedthathersuccessis
dependentupontheeconomy;whentheeconomyisgoodsheissuccessful.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,statedthathehashadapositiveexperienceworkingintheprivate
sector.Hereportedthatheisalwayslookingtowardthefutureandatnewcontractpossibilities.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathehashadadecentexperienceworkingintheprivatesectorbutnotedthat
thereisalwaysabattletoreceivepaymentintheprivatesector;hestatedthattheywantthe
workdonebuttheydonotwanttopayforit.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehashadsomesuccessworkingintheprivatesectorbutstatedthatprime
contractorsintheprivatesectorwanttomaketheirownrules.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
reportedthatmostofhisworkcomesfromtheprivatesector.Hestatedthathehastowork
harderinthepublicsectorthanintheprivatesectorandtheratesarenottoogoodbuthedoes
feelasthoughhehasbeensuccessful.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthathehasbeensuccessfulworkingintheprivate
sector.Heindicatedthathehasseenmoresuccessintheprivatesectoroverthepasttwoyears
thanhehasinthepublicsector.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatmostofhis
membersworkintheprivatesector.Afewofhismemberswillmixtheirprivatesectorwork
with10percentpublicwork.Generallymembershaveexperiencedmoresuccessintheprivate
sector.Membersoftenhaveabetterunderstandingoftheprivatesector,howtheycangetpaid
andworkonmorethananyonelargeproject.CONTA#1identifiedseveraldifferencesbetween
publicandprivatesectorwork.Hestatedthatprojectsintheprivatesectorcanbelargeandthat
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE44

privatesectorcontractorsorownershavenoproblemworkingwithDBEs.Thereareamultitude
ofdifferentprojectsthathismemberscandointheprivatesector.Also,memberscanget
involvedinprivatesectorprojectsmorequickly.IntervieweeCONTA#1statedthattheprivate
sectorismoreopenbecausethepeoplemakingdecisionsarenotasrestrictedasgovernment
staff.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatmembersenjoythe
privatesectorbecausetheyaretimelypaidintheprivatesector.Hestatedthatsubcontractors
arepaidaccordingtothecontractscheduleinsteadof3060daysafterscheduleandafterhaving
financedthejob.Hestatedthatmembersareplacedinabadsituationiftheyarerequiredto
financeajobbeforereceivingpayment.
Someminority andfemaleownedbusinessesreportednegativeexperiencesintheprivate
sector.[Interviewees#CON:14,25].Interviewee#CON14,aLatinAmericanmaleownerofa
DBEcertifiedmarketingfirm,statedthattheprivatesectorisdisadvantagedbybudgetingand
micromanagingandbythestakeholdersinthecommunity.Interviewee#CON14alsostated
thatthereismorevolatilityintheprivatesector.Hestatedthatthepoliticsintheprivate
sectorconsistofpeoplefromthesamebackground.Hestatedthatthereismorebackstabbing
intheprivatesector.Interviewee#CON14describedthedifferencebetweenthepublicandthe
privatesectorsbystatingthatinthepublicsectorpeoplecovertheirbuttwhereasinthe
privatesectorpeoplecovertheirback.Interviewee#CON25,anAfricanAmericanmaleowned
DBE/MBE/SBEcertifiedcivilengineer,statedthathedidsomeworkforaprivatefirmbutit
camewithalotofdifficulties.
SomeDBEintervieweesfelttheywereunsuccessfulintheprivatesectororhadlimited
experienceworkingintheprivatesector.[Interviewees#CON:4,10,15,16,24,26,31,32,41].
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,explainedthathedoesnottypicallyreceiveprivateworkfromaprime
contractorreachingouttohim,withoutsomecontacts.Forinstance,theprivatedeveloperthat
heisworkingwithnowcametohimbecausethedeveloperwasreferredtoInterviewee#CON4
bysomeonefromtheSanDiegoPortDistrictwhoalsoknewInterviewee#CON4well.
Interviewee#CON4statedthatin1979hedidworkintheprivatesector.Heinitiallybeganwith
clientsthathehadworkedwithpreviouslyinotherjobs.Inthebeginningitwasnotthatdifficult
toobtainworkintheprivatesector,butinthemid1980salotofthelargefirmsthat
traditionallyusedtobelocatedinLosAngelesstartedopeningbranchofficessotherewasalot
morecompetitionanditbecamemoredifficulttoobtainprivatesectorjobs.Interviewee#CON4
alsostatedthatmarketingforthesmallcompanywasnotonthetopofhisprioritylist,sohe
wouldtrytodobusinessdevelopmentonlywhenhehadtime.Hefounditmoredifficultto
obtainbusinessanddecidedtoswitchandconcentratemoreonthepublicsector.Interviewee
#CON4statedthathiscompanystilldoesabout1percentintheprivatesector.Interviewee
#CON4statedthathecannotreallysaywhetherthereareanydifferencesbetweenpublicsector
andprivatesectorworkbecausehedoessolittleprivatesectorwork.Interviewee#CON4stated
thathedoesnotreallypursueprivatesectorworksohehaslittleexperiencebeingusedon
privatesectorprojects.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,didnot
haveanyexperienceworkingintheprivatesector.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE45

Interviewee#CON15,aHispanicAmericanmaleownerofanMBEcertifiedengineeringand
constructioncompany,statedthatintheprivatesector,alotofhisworkdependsonthecontacts
ofhiscompanyandwhoheknows.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,notedthatworkingintheprivatesectorisnotprofitableforhisbusiness.He
alsostatedthatbecausethebusinessservesinanichecapacity,companiesintheprivatesector
donotcarewhetheryouareaDBEoraminority.AccordingtoInterviewee#CON16,workingin
theprivatesectorisbasicallyapricegame.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatshehashadverylittlesuccessintheprivatesector.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
reportedthatshedoesnotdoanyworkintheprivatesector.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatrightnowbusinessisslow.Hestatedthatcommercialliability
insuranceisextremelyhighand[itisdifficult]tobeabletopaythatwiththingsbeingas
unstableastheyarewiththecurrenteconomicsituation.Hesaiditisbeenlikethisalmostas
longashehasbeeninbusinessaftertheeconomicdeclinefollowingtheSeptember11,2001
tragedy.Hefeelsheiscapableofdoingthework,buthejustisnotgettingafairchanceat
showingthathecandothework.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthathedoesnothaveanyexperienceworkingintheprivatesector.
Mostwhitemaleownedbusinessesreportedsuccessintheprivatesector.[Interviewees
#CON:7,8,52,53,54,55,56,57,58].Interviewee#CON7,anonDBEwhitemaleownerofa
solarhydrogenfuelcellsalesandinstallationcompanyintheSanDiegoarea,statedthatinthe
privatesectorabusinessabilitytoobtainworkisallaboutcompetence.Interviewee#CON7
thoughtthatgeneralcontractorsorownersdonotcarethatabusinessisminorityownedifthe
jobisperformedright.Inthepublicsector,however,Interviewee#CON7statedthatthereare
goalsandcontractsthathingeuponwhetheryouareaminority.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthatworkingintheprivatesectorisexcellentbecausegoalsandobjectivesare
clearlydefined;deliverablesareclearlydefinedanddirectionisclearandsuccinct.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,reportedthat
theyhavehadgoodexperiencesworkingintheprivatesector.Hestatedthattheyarecontinuing
toimproveandthereistremendousroomforgrowth.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,reportedsuccess
workingintheprivatesector.Hereportedthattheyhaveofficesandconsultantsinmultiple
locationsandfeltasthoughtheyhavebeenverysuccessful.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE46

Publicsectorworkexperience.
Mostoftheminority andfemaleownedbusinessesinterviewedreportedsomesuccess
obtainingpublicsectorjobs.[Interviewees#CON:1,3,4,9,12,13,17,18,19,20,22,24,25,
26,27,28,30,33,34,35,36,37,38,39,40,42,43,44,45,46,47,49,50,WT#1].Interviewee
#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontractingfirmintheSan
Diegoarea,statedthattheydoworkforsomegovernmentalagenciesandtheseagencies
repeatedlycallthembecausetheydoqualityworkandtheydonotovercharge.Interviewee
#CON1statedthateverytimehehastriedtobidamunicipaljob,hehasrunintonumerous
obstacles.HeprovidedanexamplewhenanonConsortiumagencywasbiddingouttoolargea
scopeofworkfortheproblempresented.Inanotherinstance,Interviewee#CON1discusseda
situationwherethenonConsortiumagencywasrequiringcertainlicenserequirementsthat
werenotappropriatefortheworkrequired.Interviewee#CON1characterizedthisasalackof
knowledgeandhaspreventedhimfromtryingtobidonpublicsectorprojects.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatmostofhispublicsectorworkisforlocalagencies,including
thecityandcountyofSanDiego.Hestatedthathiscompanydoesafairamountofworkforthe
SanDiegoCountyWaterAuthorityandalittleworkforthePortDistrictandsomepublicschool
projects.Interviewee#CON4statedthathiscompanyhasbeensuccessfulinpublicsector(non
Consortiumjobs)becauseovertheyearshehasbeenabletoestablishworkingrelationships
withalotoftheprimefirms.Theprimecontractorsalreadyknowhiscompanyandwhathecan
doandtheyfeelcomfortablewithInterviewee#CON4.Interviewee#CON4statedthatafterhis
businesswascertifiedbyCaltransinthe1990shetriedtoshifthisfocustopublicsectorwork.
Whenhefirststartedin1979,hiscompanydidmoreresidentialwork.Today,however,his
companydoes99percentpublicwork.Interviewee#CON4statedthatitisaloteasiertodeal
withtheowneragenciesratherthanprivatedevelopersbecausewithprivatedevelopersyou
nevergetagoodfeelingaboutwhattheirexpectationsarewhereaswiththeowneragenciesthe
scopeofworkiswelldefinedandtheytellyouexactlywhattheywantsoyouprepareyour
proposalbasedonwhattheywant.
Interviewee#CON4statedpublicsectorworkisaloteasierandheenjoystheworkbetterthan
privatesectorwork.Interviewee#CON4statedthathiscurrentprivatesectorworkinvolves
improvementsintwoexistingmarinastoincludeputtinginlandsiteimprovements,buildings,
parkinglotsetc.Onthepublicsectorside,Interviewee#CON4statedthathiscompanyhas
developedareputationinthearenaofundergroundutilities,anddoesalotofworkrelatedto
water,wastewater,recycledwater,pipelines,pumpingstations,andallsortsofworkrelatedto
storageandtransportationofwater.Interviewee#CON4statedthatthereisnodifferenceinthe
privateorpublicsectorjobsintermsofwhetherheisasuborprime,ineithersector,heis
generallyasubcontractor.Interviewee#CON4statedthatthescopeoftheworkisgenerallythe
samewhetheritisthepublicsectororprivatesector.Hesaidthathestillhastogothroughthe
samestepsintermsofcollectingdatatoexamineandmakesamplesofthesoil,andthentest
theminthelaboratoryanddoengineeringanalysis.Heexplained,thestepsarethesamebut
whatyoumaybelookingforisdifferent.Intermsoftheamountofthecontracts,hestatedthe
privatesectorprojectsweregenerallysmallresidentialprojects(likeasinglefamilyresidenceor
subdivision)andthepublicsectorprojectscanbeahigherdollarvalueandlastlonger.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE47

Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
mostoftheirworkcomesfromthenonConsortiumpublicsector.Hestatedthatinthepublic
sector,theworkisalsogoodalthoughtheworkisgenerallynotasprofitableandpaymentcanbe
slow.Interviewee#CON9statedthat,ingeneral,hisexperienceonConsortiumprojectsisthe
sameashisexperienceonotherpublicsectorprojects.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatinthepublicsector,theirgeneralworkexperiencehasbeenverygoodbecausemost
oftheirbusinessisgeneratedbasedontheirqualificationsandtheirpastprojectdelivery.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatworkforotherpublicagenciesissimilartotheworkthat
hedoesfortheConsortium.HestatedthatheiscurrentlyworkingonaprojectfortheCityofSan
Franciscothathasalotofnewagetyperequirements.Interviewee#CON13statedthathedoes
alotofworkforsmalleragenciesandtheydonothaveasmanylengthyrequirementsasdothe
largeragencies.HestatedthatthelengthyrequirementsarenotaDBEthing,However,hedoes
nothavethesamelegalresourcesasdothelargercompaniesworkingforlargeragencies.He
suggestedimplementingalegalhelpdesktobemadeavailabletocompanies.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatherexperienceinthepublicsectoronnon
Consortiumjobshasbeenexcellenthercompanyisrespectedandshedoesgoodwork.
Interviewee#CON17statedthatthecompanysMBE/DBE/WBEstatustrulyactsasadoor
opener,anditgivesyouatoein.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,stated
thatnonConsortiumpublicsectorjobsmakeupthemostofherwork.Interviewee#CON18
indicatedthatthenotificationandqualificationprocessfornonConsortiumpublicsectorjobs
hasbeenmuchbetterandeasierthanworkingwiththeConsortium.Theseagenciesandentities
aremuchmoreaccessible.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,reportedhavingbeenverysuccessfulinthepublicandprivate
sectors.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatshehashadagoodexperienceworkingonnonConsortiumpublic
sectorprojects.Shesaidthattheyhavecertificationmoniessetaside.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthathehadbeensomewhatsuccessfulobtainingnonConsortiumpublicsectorjobs.He
statedthatforthefirstfouryearsofhisbusiness,alloftheirworkwasassubcontractorsand
withoutcertification,itwouldnothavebeenpossible.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE48

Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthat100percentofherworkexperienceisinthepublicsectorandshehasbeenvery
successful.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatsuccessinthepublicsectorvariesfromagencytoagency.Hestated
thatthereislessriskinnotgettingpaidonpublicsectorwork,butittakeslongertogetpaid,
particularlywiththeCityandCountyofL.A.Hestatedthatyoumustdevelopaleveloftrustwith
theagenciestobecomesuccessfulandthatestablishingrelationshipsiskey.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthathiscompanyhasbeenverysuccessfulinthe
nonConsortiumpublicsector.Heattributedthissuccesstoperseverance.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
feltthatshewassuccessfulobtainingworkinthenonConsortiumpublicsector.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatherworkinthenonConsortiumpublicsectorhasinvolvedschool
districtsandwaterdistrictsprojects.ShestatedthatProposition209hassupposedlyprecluded
largefirmsfromusingDBEs.Shehashadnodifficultyinobtainingworkandfeelsasthoughshe
hasbeensuccessfulinthepublicsector.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,feltthatshehasbeensuccessfulinthenonConsortiumpublicsector.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshehasbeensuccessfulinthenonConsortiumpublicsector,but
notedthatshemightnotgetpaid.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatoverallhehashadaverygoodexperienceworkinginthenonConsortiumpublic
sector.Hestatedthathehadfiveveryprofitableyearswhileworkingonapublicprojectforthe
LosAngelesWorldAirport.Hestated,however,thathefelthehadtomakecompromisesonthe
publicsectornonConsortiumjobsandethicswassometimesanissue.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathehasdonealotofworkinthepublic
sector.HehasdonepublicsectorworkfortheCityofPalmSpringsandtheSanFernandoValley
andallhaveturnedoutwell.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatherexperienceinthenonConsortiumpublicsectorisaboutthesameasintheprivate
sector;itisabouta5050splitbetweenpublicsectorandprivatesectorwork.Shestatedthat
shehasbeensuccessfulinthenonConsortiumpublicsector,butitcouldbebetter.Shesaidthat
sometimeswhenyouhaveasmallcompany,theConsortiumandbigcompaniesthinkthatyou
areinept.Interviewee#CON39statedthatshewashiredbytheDepartmentofHomeland
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE49

Securitytodoalargeprojectandshewasabletotakethelead.Shestatedthatshehadtohirea
largefirmtobeasubcontractorandthatturnedouttobeverysuccessful.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthathehasbeensuccessfulinthenonConsortiumpublicsector,butfeels
thattherelationshipbetweentheprimecontractorandthesubcontractorshouldbemonitored.
Hestatedthatoftentheprimecontractorabusesthesubcontractorandrequiresthe
subcontractortoperformadditionalworkbeyondthescopeoftheprojectwithoutadditional
compensation.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatshewassuccessfulinthenonConsortiumpublic
sectorandreferredtoalucrativeaccountwithacitygovernmentpubliclibrary.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,statedthathehasbeenextremelysuccessfulworkinginthenon
Consortiumpublicsectorwork;hecitedacontractwithacommunitycollegethatwasvery
lucrative.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,reportedthatshehashadthemostsuccessworkingforstateagencies
andthefederalgovernment.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathehasbeenverysuccessfulinnonConsortiumpublicsector;he
statedthatthesewerecompetitivebidsand8(a)contractswhicharesetasidecontractsand
noncompete.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,indicatedthathehashadapositiveexperienceworkingforschoolsbutstatedthatthereis
notenoughsteadywork.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehashadanokayexperienceworkingonpublicsectornonConsortium
projects.Hereportedthathehasrunintoissueswithpricingandstatedthatallpublicsector
contractsinvolvedbiddingwars.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthatheisdoingokayworkinginthenonConsortiumpublicsectorandheistryingto
becomemoresuccessful.Hestatedthatthereisamuchhigherdoorstepinthepublicsector
andhehastotryevenhardertogetintotheprivatenetworkinginthepublicsector.
WT#1,anindividualrepresentinganautomobilepartsstoresubmittedwrittentestimonyin
connectionwiththeConsortiumpublicforumstoreportapositiveexperienceworkingwith
LACMTA.Ihaveonlyhadperfectrelationshipswith[LACMTA]overtheyears.Theyareagreat
politegrouptoworkwith.(Writtentestimonysubmitted9/24/09).
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE50

Someminorityandfemaleownedbusinessesreporteddifficultiesinpursuingworkonpublic
sectorjobs.[Interviewees#CON:2,10,14,16,23,29,31,32,41,51,CONTA#1].Interviewee
#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiegoarea,stated
thathehasnoexperienceworkinginthepublicsector.Heisnotcertifiedwithanyofthe
Consortiumagencies.ThoughInterviewee#CON2hasbeencertifiedwithCaltransfor
approximatelyoneyear,hestatedthatthecertificationhasnotprovidedanypublicwork,
thoughheusedtobeemployedbyCaltrans.Interviewee#CON2statedthathehastriedto
obtainworkthroughCaltransbuthashadnosuccess.Hestatedthattheagenciesonlyencourage
companiestoworkwithminoritiesbuttheydonotrequireit.Interviewee#CON2statedthathe
hassentletterstoprimeconsultantsexpressinghisinterestinprojectsbuthasreceivedno
response.Interviewee#CON2statedthatallofhisworkhasbeenfromtheprivatesector
becauseitismucheasiertoobtainworkintheprivatesector.Hestated,iftheeconomyisdoing
well,hecanobtainworkintheprivatesectorwithasimplephonecallandinterview.Inthe
publicsector,however,hestatedthattherearevariousotherrequirementstofulfill.Tostart,
youhavetohavepublicsectorexperiencetoapplyforpublicsectorworkandthishasbeena
problemforthosewithnopublicsectorexperience.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thatonnontransportationpublicsectorprojects,thenegotiationprocessasbetweenthem,the
primecontractor,andthegovernmenthasbeenslowandhashelduptheprocess.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatthepublicsectorhasalotofchallengesoverall.Interviewee#CON14statedthatthepolitical
structureinthepublicsectorisprettyheavyandisnotnecessarilyconducivetoefficiency.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthathisexperienceonnonConsortiumjobshasbeenterrible.
Interviewee#CON16notedthattheseagenciesonlyusetheirlocalfavoritesandthereisno
referencecheckingaboutvariouscompaniesabilities.Interviewee#CON16indicatedthatfor
themostpart,theschedulessetfornonConsortiumjobsaregenerallyridiculous.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,reportedmixedsuccessobtainingnonConsortiumpublicsectorwork.Hestated
thattheCityofLosAngeles,inparticular,hascutbackonratesandbusinessopportunitieswith
them.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthathehas
hadonlyoneprojectinthepublicsectoratUCLA15yearsago.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatwithrespecttodoingbusinesswithnonConsortiumpublicsector
agencies,hefeelsthereneedstobesomesortofwayofnegotiatingwiththegovernmententities
asopposedtonegotiatingandputtingbidsinwiththeprimecontractholders.Thereisnowayto
judgewhoorhowthesubcontractorsarechosenandpicked.Aretheypickedbylowestbidder,
offofgutinstinctand/orfeelings,aretherelationshipsestablishedbeforehandastheproject
goesupforbidandtheprimecontractorsapplywiththatasapartoftheirpackage?Interviewee
#CON31reportedthatitishardtofigureouthowtogetinontheworkthatisoutthere.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE51

Interviewee#CON31statedthathewascapableofdoingtheworkandthathehasbeeninvolved
inonewayoranotherhiswholelifesincetheageofabout15yearsold.Heknowsthe
businessofblock/bricklayingandbuildingwallsinsideandout.Hestatedthatifthedealings
withprimecontractorswerecutout,andhecoulddealdirectlywiththegovernmentagencies,
hefeelsthegamesandquestioningwouldbeoutofthedoorandthathecouldgetmorework
andbusinesswouldbemuchbetter.Thereisnochanceforsubcontractorstocompetewhenbig
businessescandotheentireprojectandchargelessinsomeareasandmoreinothersespecially
whentheyowntheequipmentandrentalfeesareeliminated.Hestatedthathefeelshecouldbe
doingsomuchbetterintermsofworkinthenonConsortiumpublicsector.Ithasbeenacouple
ofmonthssincehislastjobofnoteandheisfeelingthepressuretogetthenextone,notonlyfor
himself,butforhisfamilyandthemenandtheirfamilieswhodependonhisprojects.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedhehadnoexperienceworkinginthepublicsector;ithasnthappenedyet.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,hasexperienceworkinginthepublicsectorandnotedthe
processofobtainingworktakesawhile.Hebelievesthatmostprimecontractorsdonotreach
outtoDBEs.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathismembers
haveexperiencedchallengesworkinginthepublicsector.Inthepublicsectormembersmust
divertattentionawayfromrevenueandspendapproximatelytwoweeksworkingonabidthat
theydonotknowtheywillwin.Therefore,rightawaymemberstieuppartofthebond.By
naturethisprocessisdiscouraging.IntervieweeCONTA#1statedthatmostofthecompanies
whobidonprojectsarestructuredsothattheyhavesomeoneinplacewhoseresponsibilityisto
bidonsuchprojects.Also,mostmembersfindthattheyneedtohavearelationshipwiththe
contractorbeforethebidding.Iftheywaituntiltheyreceiveoutreach,theoddsofparticipating
arenotgood.
Mostwhitemaleownedbusinessesreportedsuccessinthepublicsector.[Interviewees#CON:
5,8,52,53,54,55,57,58].Interviewee#CON5,anemployeeatanonDBEwhitemaleowned
electricalengineeringbusinessintheSanDiegoarea,statedpublicsectorworkpaysmuchbetter
andmorequicklythanintheprivatesector.Theamountsofthecontractaregreaterinthe
publicsector.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthatworkinthepublicsectorisverygoodbutcontractsarefuzzy;hedoesmake
money,however,becauseofthechangeorderprocess.Hestatedthatthebiddingprocess,the
directions,andthegoalsandobjectivesarecumbersome.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,reported
havingworkedonaCaltransproject.Hestatedthathehasbeensuccessfulduetohisfirms
reputationandalsobecausetheyhavearelationshipwiththeirmanufacturerwhoisasourceof
positivereferralsforthem.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE52

Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,reportedsuccess
workinginthenonConsortiumpublicsector;hecitedworkformultiplepublicagencieson
differentprojects.
Differencesbetweenprivatesectorandpublicsectorworkexperience.
Intervieweesreportedsomedifferencesbetweenpublicsectorandprivatesectorwork.
[Interviewees#CON:1,8,11,12,13,14,16,18,29,30,31,33,37,39,40,45,47,55].
Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontractingfirm
intheSanDiegoarea,statedthathiscompanyisnotthelowestpriceinthecountyorthestate
buthisclientsknowthathedoesqualityworkandisdependable.Hestatedthatthelowestbidis
notalwaysthebestvalue,butunfortunatelythestateandthemunicipalitiesalwaysgoforthe
lowestbid.
Interviewee#CON8statedthatthereisnodifferenceinthetypeofworkorpriceofthecontract
betweenthepublicsectorandtheprivatesector.Hestated,however,thattheprivatesectoris
meaner.Hestatedtheprimecontractorsintheprivatesectorlooktofindaglitchinthe
contractortheworkcompleted.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthat
boththepublicandprivatesectorspresentdifferentworkenvironmentsforherbusiness.
Interviewee#CON11saidthatherworkfortheConsortiumisverynarrowinscopeandshehas
noflexibilitytogooutsidethescopeofwork.Incontrast,Interviewee#CON11statedthatinthe
privatesector,shehasmoreleewaytomakerecommendationsandgooutsidethescopeof
work.Interviewee#CON11alsoidentifiedthescopeofworkandtrainingrequirementsas
differencesbetweenworkingintheprivatesectorandthepublicsector.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatinthepublicsectorthereisagreaterconsiderationtothesizeofthefirmand
reasonableprojectschedules.Incontrast,intheprivatesector,thereissometimesacomplete
disregardforwhoisdoingtheworkandpaymentcanbeheldup.Interviewee#CON12stated
thathisworkasasubcontractorintheprivatesectorischaracterizedbyafasterpace,
demandingschedules,andpoorpayment.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatthereisnotasmuchredtapeintheprivatesectorandit
iseasiertogetaprojectstarted.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thattheresourcesarebetterintheprivatesector.Hesaidthatthereisbetterqualifiedtalentin
theprivatesectormarketingdepartmentsandnotedthattheprivatesectorhasabetter
understandingofthemarketinginvestment.Incontrast,Interviewee#CON14statedhefeels
thatpeopleinthepublicsectorgenerallyarenotasqualified.Hesaidthatthereisless
accountabilityinthepublicsectoranditismoredifficulttofiresomeone.Interviewee#CON14
statedthatthepublicsectoragenciesdonothavethesameunderstandingofthemarketing
processasdotheprivatesectoragencies.
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Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthathisworkinthepublicandprivatesectorisdifferent.Inthepublic
sector,Interviewee#CON16functionsasmoreofasystemsintegratorandmanufacturer.Inthe
privatesector,Interviewee#CON16functionsmostlyasasupplierofproductandsometimesa
contractorifacompanyhasasmallproject,butnotonbigscaleprojects.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
indicatedthattheworkshedoesinthepublicandprivatesectorsislargelythesame,butnoted
thatthedifferencedependsonthescaleoftheproject.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatprivatesectorworkismuchmoreflexibleandnotasrigid
aspublicsectorworkintermsofregulations.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatthebiddingprocessisdifferentasbetweenthepublicandprivate
sectors.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthatthereis
asignificantdifferencebetweenworkinthepublicsectorandtheprivatesector.Hestatedthat
thereismoreresponsibilityworkinginthepublicsector;youhavetomaintainallofyour
insurancepaperworkandworkerscompensationisanotherbigone.Hesaidthatitishardfor
smallbusinessestomeettherequirementsofpublicsectorworkbecauseoftherigorous
qualificationstobeabletoobtainsuchwork.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthereisstringentcompetitionwithinthepublicsectorasitrelatestotheaward
ofcontractsandworkinginthepublicsector.Hesaidthatthereismorepaperworkand
strenuousregulationsinthepublicsectorthathavenothingtodowithincreasinghis
performanceoroutputoroutcomeoftheproject.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatsomeofthemajordifferencebetweenprivatesectorandpublicsector
workarethescaleoftheprojectsandthepoliticsthatgoonbehindthescenestogetthe
projects.Hesaidthatthepricedoesgodownsignificantlywhenconsideringthedifferences
betweenpublicandprivatesectorwork.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattherearemoreopportunitiesinthepublicsectorforhertypeofbusiness.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatprivatesectorandpublicsectorprojectsarecompletelydifferent.Hestatedthatin
theprivatesectorcontractorscanspeakdirectlytothedecisionmakerandhavetheabilityto
negotiate.Healsostatedthattheprivatesectorismoreflexible,andlargerfirmscangoafter
smallprojects.Inthepublicsector,however,theworkdirective,requirements,andpay
schedulesarefixedandslow.
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Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatthequalityofworkisthesamealthoughthedisciplineisdifferent.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthatthepublicsectorhasdifferentreportingandotherrequirements
thantheprivatesector.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatthereisamonetarydifferenceandadifferenceinthe
contractcomplianceaspectsofherworkasbetweentheprivateandpublicsectors.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthatreceivingpaymentintheprivatesectorisalwaysdifficult.Incontrast,henoted
thatpaymentbythefederalgovernmentisdifferentandmoreprompt.
Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthatalthoughthescopeofworkisthesame,theprofitmargin
inthepublicsectorismuchhigherthanitisintheprivatesector(1540percentinthepublic
sectorascomparedto58percentintheprivatesector).Hestatedthathisfirmprefersworkin
thepublicsector.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatmembersarenot
timelypaidinthepublicsector.Hesaidthatpublicsectorjobspaywellandareplentiful,butthe
jobsarealsomuchhardertoobtain.Healsostatedthatmembersfindmorediscriminationinthe
publicsector.CONTA#2statedthatthereareseveraldifferencesbetweenpublicandprivate
sectorwork.Hesaidthatmostprivatesectorworkinvolveshomebuildingwhilepublicwork
involvescommercialconstruction.Generally,thecontractamountsarelargerinthepublic
sector.HealsosaidthattherearefewerDBEprimecontractorsinthepublicsector.
Otherintervieweesreportednodifferencesbetweenprivatesectorandpublicsectorwork.
[Interviewees#CON:15,17,24,30,32,34,35,36,38,42,44,46,49,52,54,57,58].
Anecdotesregardingbusinessesactingasprimecontractorsandsubcontractors.
Intervieweesreportedreasonsbehindtheirdecisiontoactasaprimeorsubcontractor.Some
intervieweesreportedtheirdecisiontoactasaprimecontractororasubcontractoris
dependentontheproject;someintervieweesreportedapreferencetoactasaprime
contractor.Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectrical
contractingfirmintheSanDiegoarea,statedthathisbusinessactsasaprimecontractorora
subcontractorbecausethatiswheretheworkis.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthathewouldratherbeaprimecontractorthanasubcontractor.Hesaidthat
marketconditionsdictatewhichroleheplays.Hestatedthatwhenyouareasubcontractoryou
areatthemercyoftheprimecontractorbecauseofthepaymentarrangement.Interviewee
#CON2statedthathepreferstohaveadirectrelationshipwithclientsbecausetheyhonor
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE55

payments.Interviewee#CON2saidthathehashadprimeconsultantsdefaultonpaymentson
threeseparateoccasions;theprimecontractorswerearchitects.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthatmostofhisworkisasaprimecontractorbecausehehasaparticular
approachtoenvironmentalprojectshebuyscontaminatedpropertyandcleansitupand
resellsit.Hestatedthatyouhavetohavemoneytodoit,andbanksdonotloanmoneytobuy
contaminatedproperty.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattheirdecisiontoactasaprimeorasubcontractorisdependentontheworkthatis
available.
Interviewee#CON11,aSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
actsasaprimecontractorbecausethatishowshechoosestobid.Shedoesactasa
subcontractoronoccasionintheprivatesector,butshewouldratherbeaprimecontractor.She
statedthatalotofprimecontractorscallhertoparticipateonpublicsectorbidsbecausesheis
onalistofsmallbusinesses,however,becauseherworkissospecialized,theyoftencontacther
todoworkthatsheisnotqualifiedtodo.Interviewee#CON11statedthatshedoesactasa
subcontractorintheprivatesector,however,shewouldprefertoactasaprimecontractor.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthattheybasetheirdecisionwhethertoactasaprimecontractororasubcontractoron
theexpertiseinvolvedandtheirknowledgeoftheclient.Ifbothcomponentsarestrong,then
theywillactasaprimecontractor.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathepreferstoactasaprimecontractoronaproject
becausethatgiveshimmorecontrol.Hestated,however,thatalargenumberofcontractsare
toolargetoactasaprimecontractor,andactingasasubcontractorgiveshimtheopportunityto
workonalotofdifferenceprojects.Interviewee#CON13statedthatteamingisthenameofthe
game.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thattheirdecisiontoactasaprimeorasubcontractoronacontractisdependentonthetypeof
contract.Heindicatedthattheircompanywillactasaprimecontractorwhentheirspecialtyis
theprimaryfocusofthecontract.Interviewee#CON14statedthattheircompanywillactasthe
subcontractorwhenotherservicesaremoreimportantonthecontractthentheirs.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,alsonotedthathiscompanygenerallyworksasaprimecontractor
becausetheycosttheirjobsasprojectmanagerstheyreinvolvedsomewayineverysingle
project.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthathisbusinesspredominantlyfunctionsasaprimecontractorbecause
ofitslineofproductsthatitdevelops;itdoesnotusuallybuyandresellproducts.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE56

Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatthebusinessfunctionsmoreasaprime
consultantbecausethebusinessissmall.Interviewee#CON17sgoalhasbeentobuilda
reputableconsultingpractice,togrow,andtobecompetitive.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
typicallyfunctionsasaprimecontractorbecauseherworkisveryspecialized.Muchofherwork
asaprimecontractorsheundertakesbychoiceratherthaninasubcontractorarrangement.
Interviewee#CON18buildsthepartnershipthatisgoingtorunaprojectorfunctionsasapartof
ateam.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,indicatedthathisbusinessactsmostlyasasubcontractor,butitisdependent
ontheproject.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatshetypicallyactsasaprimecontractorandiftheclientaskshertotaketheleadshe
willbidaccordingly.Interviewee#CON26actsasasubcontractorwhentheworkisasmall
componentofalargerproject.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,reportedthathisbusinessworksmostlyasaprimecontractorbecauseofthe
typeofworkthattheydo.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
reportedthatherbusinesschoosestoactasaprimecontractororasubcontractordependingon
theopportunitiesavailableandwhatismoreadvantageous;itisdependentuponthesizeofthe
projectandthescopeofwork.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatherbusinessprincipallyactsasaprimecontractorbecauseshewantsto
beincontrolofherbusinessandtobepaidontime.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatherbusinessactsasaprimecontractorbecauseshehasthecapacity
toprovidetheservicesrequested.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathisdecisiontoworkasaprimecontractororsubcontractorisbasedonthesizeofthe
projectandthetypesofdesigndisciplinesrequiredfortheproject.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthatwhenheactsasasubcontractorforthe
L.A.CountyMTAitisbecauseoftheskillsetsthatareneeded.Whenheistheprimecontractor,
hewillutilizesubcontractorstocompleteothernecessaryworkontheproject.
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Interviewee#CON41,anAsianAmericanmaleownerofaDBE/MBEcertifiedgeneral
contractingfirm,statedthattheytypicallygoaftertheprojectitselfasaprimecontractorrather
thansigningonlater.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthattheytypicallyactastheprimecontractor.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthathisdecisiontoactasaprimecontractororasubcontractorisdependentuponthe
typeofcontracttheyhaveappliedforandthescopeofwork.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthathewillbidasaprimecontractoriftherequirementispurely
electrical;iftheworkrequiresotherservicesthenhewillnotbidonitbecauseitisbeyondhis
capabilities.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedprimaryworkasaprimecontractorduetothenatureofhisbusiness.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,reportedthathesometimesishiredasaprimecontractoron
smallerprojects,buttheirbusinessisnotsetuptoactasaprimecontractoronlargerprojects.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
theyactasaprimecontractoronmidsizeprojectsbutasasubcontractoronlargerprojects.He
statedthatiftheprojectrequiresabondof$1,000,000.00ormoretheywillgetalargerfirmto
actastheprimecontractor.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,reportedthathisdecisiontoactasaprimeorasubcontractorisdependentonthesizeof
theproject.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,reportedthattheyactas
aprimecontractorduetotheirsizeandcapabilities;theyfavorbeingaprimecontractorbecause
itisallinclusive.
Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthattheyactasaprimecontractorduetotheirsizeanda
preferencetobeincontroloftheproject.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
statedthattheirdecisiontoactasaprimeorsubcontractorisdependentonthescopeofwork
encompassedintheproject.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,reportedhisfirms
decisiontoactasaprimeorasubcontractordependsonthesizeoftheprojectandthe
disciplinesrequiredwithinthescopeofwork.
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Otherintervieweesreportedprimaryworkasasubcontractorduetomarketconditionsand
otherfactors.[Interviewees#CON:4,8,21,22,25,40,50,56,CONTA#1,2].Interviewee
#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirmintheSan
Diegoarea,statedthathisbusinessactsasasubcontractorbecausethereareverylimited
opportunitiesforgeotechnicalconsultantstobeaprime.Inmostprojectstheownerhireseither
acivilengineerorarchitecttobetheprimeandthenhisbusinesswouldserveasa
subcontractor.Interviewee#CON4statedthathiscompanyisasubcontractormostofthetime
andalwayshastomarketthemselvestotheprimebecausethereareneveranyRFPsorRFQsfor
geotechnicalworkers.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthatthereasonthathisbusinessactsasaprimeorasubcontractorisbasedonthe
abilitycapacityhemadetheanalogytobondingcapacityintheconstructionindustry.He
statedthatpubliccontractsoftenrequireextensiveandspecificexperience.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatwhenherbusinessactsasaprime
contractor,ithasbeenasafederalcontractor,whichsystemissetupforsmallbusinesses.When
sheworkedasasubcontractor,shefeltitwasbecauseitwasadvantageousforthelargefirmto
workwithasmallfirm.ShealsofelttheRFPsaredesignedforsmallbusinessesnottoget
business.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,reportedthatbondingistheprincipalreasonthathisfirmdoesnotbidasaprime
contractor.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthatgiventhenatureofhisbusiness,biddingasasubcontractorismorefeasibleinterms
ofobtainingwork,particularlyonlargepublicsectorprojects.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathiscompanytypicallyisusedtofulfilltheDBErequirementsplacedonlarger
majorityownedfirms;theytypicallycannotcompeteforthelargercontracts.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthathiscompanyisnotbigenoughtoactasaprimecontractor.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthathisfirmactsasasubcontractorbecausehewouldhaveadifficulttimeregulatingso
manyemployees;otherwisehewouldliketobidasaprimecontractor.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,statedthathis
firmisveryspecializedandarenotabletooverseeworkoutsideoftheirarea.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatmembersactasa
primeorsubcontractordependingonthesizeofthebusinessandthefinancialstatus.Many
clientswillnotcontractwithacompanythathasnofinancialwherewithaltohandleaproject.
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CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatmostmembersare
subcontractorsbecausemostmembersspecializeinonetradeoranother,ofteninresidentialor
truckingindustry.Heexplainedthatitisaloteasiertomanageabusinessinasmaller
specializedarea.
SeveralintervieweesreportedthatthereareDBEprimecontractorsworkingintheConsortium
transportationindustry.[Interviewees#CON:3,4,7,10,12,13,15,17,18,20,22,24,26,30,
31,32,34,39,41,42,46,51,52,54,55,56,58,CONTA#1,2].Interviewee#CON3,anonDBE
whitemaleownerofanenvironmentalservicescompanyintheSanDiegoarea,statedthatthere
areDBEprimecontractors.HestatedheisawareoftwoIndianpartnerswhobecameprime
contractors,andherecalledoneotherDBEprimecontractorwhosenamehecouldnot
remember.Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofan
engineeringfirmintheSanDiegoarea,wasawareoftwominorityownedprimecontractorsin
SanDiegoalthoughhedidnotbelievetheywereDBEcertified;oneisastructuralengineering
firmandtheotherisalargegeotechnicalfirm.Interviewee#CON4indicatedthathebelieved
thattherearenoDBEprimecontractorsbecausetoqualifyasaDBE,thereisathresholdamount
thatthefirmcanearn,andoncethefirmissuccessfultheyautomaticallyexceedthatthreshold
andcannolongerqualifyasaDBE.Interviewee#CON4statedthathebelievedthestructural
engineeringfirmlikelystartedoutasaDBE.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthatheisawareofafemaleprimecontractor
whobondsconstruction.Interviewee#CON7isalsoawareoftwoorthreeminorityprime
contractorswhoworkinsecuritiesandconstruction;however,Interviewee#CON7didnotknow
ifanyofthesebusinesseswerecertifiedasDBE.Interviewee#CON7thoughtthatifanyofthese
businesseswerecertifiedasDBEtheownerswouldnotnecessarilytellsubcontractors.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattherearequiteafewDBEprimecontractors.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatthereareDBEprimecontractorsandtheyknowwhotheircompetitionis.Hestated
thatthenumberofDBEfirmshaschangedoverthepastfiveortenyears,inpart,becausethey
eithergraduatefromtheDBEProgramorarepurchased.Hestatedthathiscompanyispartof
thenewwaveofDBEs.Interviewee#CON12statedthattheyhadprobablyworkedundera
DBEprimecontractorbutnotoften.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatthereareDBEprimecontractorsbuttherearenottoo
manyinhisfield.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatherfirmhasworkedwithtwoDBEprimecontractorsand
bothtimesitwasagoodexperience.
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Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthereareDBEprimecontractorsbutnotmany.HehasworkedunderaDBE
primecontractor.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatthereareDBEprimecontractorsworkingintheindustrybutthereare
notmanyofthem.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatsheisaDBEprimecontractoralthoughshewasnotawareofanyothers.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,reportedhavingobservedoneortwoDBEprimecontractors
overthepasttenyears.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
hehasneverpaidattentionbutthathewassurethattherewereDBEprimecontractorsworking
intheindustry.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,reportedthattheyare
awareofDBEprimecontractorsworkingintheindustryandutilizethemwhenitmakessense.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatheisawareof
approximatelyfiveDBEprimecontractorswhoareworkingonaregularbasis.Hestatedthathis
membershaveworkedwithorunderaDBEprimecontractor.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatheisawareofone
primecontractorthatoperatesasageneralcontractorandis8AcertifiedbytheSBA.Healso
statedthatheisawareoftwoprimecontractorsthatarecertifiedwithCaltrans,oneisawoman
ownedfirmspecializinginmilitaryprojectsandtheotherisaWBEengineeringfirm.Healso
statedthatheisawareofaformerprimecontractorwhoreturnedtosubcontractingbecausehe
couldnothandletheheadachesofbeingaprimecontractorandsendingothersubcontractors
work.CONTA#2wasnotsurewhetheranyofhismembershadeveryworkedwithorundera
DBEprimecontractor.
Someintervieweesreportedlimitedknowledge,ifany,ofDBEprimecontractorsworkingin
theConsortiumtransportationindustry.[Interviewees#CON:1,2,5,6,8,11,14,16,35,36,37,
38,40,43,45,47,48,49,50,53,57].Interviewee#CON2,aDBEcertifiedAfricanAmerican
malestructuralengineerintheSanDiegoarea,statedthathedoesnotknowanyMBEorDBE
primecontractors.Hebelievesitisbecausetherearenotalotofminoritiesintheengineering
fieldandhestated,typicallypeoplegooutontheirownandpursueemployment.Hestatedthat
itisachallengetominoritiestoventureoutandsometimespeopleventureoutforacoupleof
yearsandfindtheythatcannotgetwork.Interviewee#CON2statedthathehasneverworked
underaDBEprimecontractor.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedhedoesnotknowhowmanyelectricalengineeringDBEs
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE61

therearebutbelievestherearenotmanyinSanDiego.Interviewee#CON5statedthathis
companyspecializesinlightingconsultingandasheunderstandstherearenoDBEsinlighting
consulting.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,didnotknowofanyDBE
primecontractors.Hestatedthattheyarenotadvertisedasmuch.Interviewee#CON6was
awareoftwootherDBEsubcontractors:atruckingcompanyandanothercompanyinvolvedin
materialsrecycling.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,wasnotawareofDBEprimecontractorsworkingintheirlineofbusiness.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,was
awareofoneprimecontractorwhomighthavebeenaDBEbuthewasunsurewhetherthe
contractorwasDBEcertified.
Severalintervieweeshadworkedwith,orunder,aDBEprimecontractor.[Interviewees#CON:
9,10,13,15,17,18,20,22,23,24,27,29,30,31,33,46,53,54,55,56,58].Interviewee
#CON9,anAsianPacificAmericanmaleownedtransportationengineeringandplanning
consultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedhewasnot
awareofotherDBEprimecontractorsintheengineeringandarchitecturefields.Hestatedthat
mostofthecompaniesgettoobigtomeetthefederalsizestandardsfortheFederalDBE
Program.Ifafirmweretoactasaprimecontractoralotandwonalotofcontracts,theywould
graduateoutoftheDBEProgram;thatiswhathappenedtous.Interviewee#CON9did
indicate,however,thathehasworkedwithDBEprimecontractorswithinthepastfouryears,
approximatelyfourorfivetimes;allofthesewereinthepublicsector.Hestatedthatthathas
beenapositiveexperienceandnotedthatDBEprimecontractorsunderstandthesituationof
otherDBEs.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehadworkedforaDBEprimecontractorafewyears
agoinOakland,California.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatshehasproposedtogetherandevenworked
asasubcontractorwithotherDBEprimecontractors.SomeDBEprimecontractorshave
performedasubcontractorrolewithInterviewee#CON17scompany.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,has
workedwithotherDBEandWBEprimecontractors.Interviewee#CON18ismoreinclinedto
workwithsoleproprietors.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,believedthathemayhaveworkedasasecondtiersubcontractorunderaDBE
primecontractor.
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Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,workedwithaDBE
primecontractorabout15yearsago.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthattechnicallyhehadworkedwithaDBEprimecontractorinthatthe
companywaslegallyownedbyawomanandwasclassifiedasaWBE;thatisalargepartofhow
andwhytheygotthemajorityoftheircontracts.However,thecompanywasonlyownedbythe
femaleinthesensethathernamewastheoneusedasthelegalowner.Interviewee#CON31
statedthathehadneverseenheronaprojectinthetimethathehaddealingswiththat
company;thehusbandwastheonerunningthebusinessandhadworkedintheindustryhis
entirelife.Thehusbandshouldhavebeentheoneclassifiedastheowner.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
hasworkedonceortwicewithorunderaDBEprimecontractor.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,believedthathemayhaveonceworkedwithorunderaDBEprimecontractor.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,statedthatthey
arecurrentlyworkingonaprojectwithaDBEprimecontractor;theprojectisalmost80percent
completeandithasbeenanoverallpleasantexperience.
Mostintervieweeshadneverworkedwith,orunder,aDBEprimecontractor.[Interviewees
#CON:1,4,5,6,7,8,11,12,14,16,19,21,25,26,32,34,35,36,37,38,39,40,41,42,43,44,
45,47,48,49,50,51,52,57].Interviewee#CON1,anonDBEHispanicAmericanmaleownerof
anelectricalcontractingfirmintheSanDiegoarea,wasnotofhavingworkedwithorundera
DBEprimecontractor.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,wasnotsurewhetherhehadeverworkedwithorunderaDBEprime
contractor,butdidworkonceonaprojectforaminorityownedfirm.Atthattime,however,he
believesthattheminorityownedfirmhadgraduatedfromtheDBEProgram.Theprime
contractorinthatinstancewasthedesigneronaprojectfortheCityofSanDiegoand
Interviewee#CON4actedasitssubcontractor.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthathedoesnotthinkthathiscompanyhaseverworked
withorunderaDBEprimecontractorbuthewasunsure.Typically,hestated,primecontractors
arelargecorporationsandnotrequiredtobeDBEs.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,hasworkedwithaDBEprime
contractoronlyonceabout20yearsago.TheDBEwasaconstructioncompany.Hestatedthathe
couldnotrecallthenameoftheproject,butrecalledthatitwasaredevelopmentproject
someplace.
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Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshehadnotworkedwithtoomanyDBEsbutsheisalways
willingtoworkonagoodprojectanditdoesnotmatterwhethertheyareaDBE.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasneverworkedwithorunderaDBEprimecontractor.Hestatedthatheonce
hadadealintheworkstoworkwithorunderaDBEprimecontractor,butthenegotiationsdid
notworkoutafteraHispanicfirmwasproposedfortheworkinstead.Hestatedthatthe
outcomewasfrustrating,buthedidnotcomplainbecausehedidnotwanttohurthisfuture
businessopportunities.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,did
notbelievethathehadeverworkedwithorunderaDBEprimecontractor,butnotedthathe
mayhaveworkedwithsuchafirmandnotknowtheircertificationstatus.
C.DBEUtilization
BGPAAStudyAnecdotesRegardingMBE/WBE/DBEUtilization
PrimereportedutilizationofMBE/WBE/DBEsbyprimecontractorsinthepublic
andprivatesectors.
Someintervieweesreportedhiringthesamesubcontractorsforprivateandpublicsectors
jobs.[Interviewees#BGP:5,9,10,13,16].Interviewee#BGP9,theownerofanoncertified
HispanicAmericanownedsecurityservicesfirm,saidtheyveryrarelysubworkout,butwhen
theydo,theyusethesamesubcontractorsintheprivatesectorasinthepublicsector.
Interviewee#9saidthattheyhavenotworkedwithanyminority orwomenownedfirmsand
thattheydontaskiftheyareminorityorwomenowned.
Interviewee#BGP10,aprincipalatanengineeringfirm,statedthatthefirmusesthesame
secondtiersubcontractorsintheprivatesectorandpublicsector.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatthecorporationusesthesamesubcontractorsinthepublicandprivatesectorifthey
candotheworknecessary.HesaidthathebelievesthatthecompanyhasusedMBE/WBEand
DBEfirmsintheprivatesector.
Severalintervieweesreportedpositiveexperiencesworkingwithminority andwomanowned
subcontractingfirms.[Interviewees#BGP:5,6,10,14,15,16].Interviewee#BGP5,the
presidentofan8Acertifiedengineeringfirm,saidthatthefirmsisexperiencewith
MBE/WBS/DBEsisthesameasnoncertifiedfirmsbecausewerenotseekingminorityor
womenownedsubcontractors,itjustturnsoutthatway.Weretryingtoretainsomeonethat
[is]competenttodothework.
Interviewee#BGP10,aprincipalatanengineeringfirm,saidthatsomeofitssubcontractorsare
smallbusinesses,thoughmanyofthemprobablyhavenotobtainedcertification.Hesaidthathis
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experienceworkingwithMBE/WBE/DBEfirmshasbeenthesameasworkingwithnoncertified
firms.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthathisexperienceworkingwithMBE/WBE/DBEcertifiedfirmshasbeenthesameas
hisexperienceworkingwithnoncertifiedfirms.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatsheusessecondtier
subcontractorsforsomespecializedworkandwilluseMBE/WBE/DBEentitiesiftheyhave
therightskillsetsthat[sheis]lookingfor.Shesaidthatshehashadapositiveexperiencewith
certifiedsubcontractors.Shesaidthatthebiggestproblemhasbeenwhentheysaytheyre
certified,butitturnsoutthattheagenciesthattheyreregisteredthrougharenotrecognized
byCUCP(CaliforniaUnifiedCertificationProgram).Sheaddedthatshewillasktoseeproofof
claimedcertification,andshewilladvisethesubcontractorsthattheyreallyneedtogothrough
andgetcertified,buttheydontwanttogothroughtheprocess.Shesaidthatlackof
certificationhasnotprecludedherfromusing[thecompanies]becausetheyhavetheskillsets
thatsheneeds.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthatthecorporationhasusedMBE/WBE/DBEsubcontractorsonAuthorityprojects.
HereportedthathisexperienceusingMBE/WBE/DBEsubcontractorshasbeenpositiveforthe
mostpart.Hesaid,WevehadsomeDBEsthatafterwetookthetimetotrainthem[have]
notperformedwell.[W]ewastedourtimeandhaventusedtheminthefuture.ButImsure
thatcanbetrueofnoncertifiedsubsaswell.
Oneintervieweereportednodifferenceinworkingwithminorityorwomenownedfirms
[Interviewee#BGP9].Interviewee#BGP9,theownerofanoncertifiedHispanicAmerican
ownedsecurityservicesfirm,indicatedthattherewasnorealdifferenceinworkingwitha
MBE/WBE/DBE.Interviewee#9said,Theonlydifferenceisthat,hey,thisguyputhiswife
downastheowner,andnowhehasawomanownedbusiness.Intodaystimes,inLA,thewhite
guystheminority.Tosayaminorityownedbusinesshaslesschances,everyoneImbidding
againstisaminority.Imean,inCalifornia,weretalkingabouta45%Hispanicstate.Whatgood
doesminorityowneddo?
Acoupleintervieweesreportedlimitedtonoexperienceworkingwithminority orwoman
ownedfirms.[Interviewees#BGP:11,13].Interviewee#BGP13,theownerofanoncertified
constructionfirm,reportedthatthecompanymayhaveusedanMBE/WBE/DBEsubcontractor,
butitsnotarequirementforthecompany,sohedoesnotcheckforcertification.
Nointervieweereportedhavingrefusedtoworkwithaminority orwomanownedfirmbased
ontherace,ethnicityorgenderoftheowner.[Interviewees#BGP:13,14].
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Businessesperceptionofbeingutilizedbyprimecontractorsinthepublicand
privatesectors.
Someintervieweesreportedthatthesameprimecontractorssolicitthemforworkinboththe
privateandpublicsectors.[Interviewees#BGP:10,12,13,16].Interviewee#BGP10,aprincipal
atanengineeringfirm,statedthatthesameprimecontractorsusethefirmonpublicsector
projectsandprivatesectorprojects.Interviewee#10notedthatfirmprimarilyworksforprime
contractorsthatdoinfrastructureprojects,somostoftheworkispublicsectorwork.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthattheprimecontractorsandsubcontractorsusethecompany
forbothpublicandprivatesectorwork.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,statedthatprime
contractorsusehiscompanyonbothpublicandprivatesectorprojects.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
statedthatthesameprimeshirethefirmtodoworkinthepublicandprivatesectors.Hestated,
Infact,IrecallacasewhereweworkedunderaDBEprimeforaprivatesectorjob.
Otherintervieweesreportedthatthesameprimecontractorsdonotsolicitthemforworkin
boththeprivateandpublicsectors.[Interviewees#BGP:8,11,15].Interviewee#BGP8,the
technicaldirectorofawhitewomanownednoncertifiedengineeringfirm,saidthatcertain
primecontractorsworkintheprivatesectorandothersworkinthepublicsectorduetotheir
specializations,sothesameprimecontractorsthatusehisfirminthepublicsectordonotuse
hisfirmintheprivatesector.Interviewee#BGP11,amanagerofanAsianmaleownedDBE
certifiedcleaningservicescompany,reportedthattheprimecontractorsthatusethecompany
forairportcleaningwouldnotalsousethecompanyforprivatesectorworkbecausethetwo
sectorsdonotoverlap.HesaidthatthepublicsectorworkiscontrolledbytheL.A.Department
ofAirports,andthatDepartmentreleasesindividualbidsforthosecontracts.Hesaidthathe
doesnotseethesameprimecontractorsbeinghiredbytheprivateandpublicsectoratthe
airport.Hesaidthatthepublicsectorbidselectionprocessispurelyalowbidprocess,sono
considerationisgiventoacompanysexperienceintheairportorlocalconnection.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatprimecontractorsthat
usehercompanyinthepublicsectordonotusuallyuseherfirmintheprivatesectorbecause
thetypeofworkthatshedoesisprimarilywithstateandlocalagencies.
Afewintervieweesreportedthataprimecontractorhasnotandwouldnotrefusetowork
withthembecauseofthefirmsstatusasanMBE/WBE/DBEcertifiedfirm.[Interviewees
#BGP:10,14,15].Interviewee#BGP10,aprincipalatanengineeringfirm,saidthatnoprime
haseverrefusedtoworkwiththefirmbecauseofitsstatusasanMBE/DBEfirm.
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SDCRAAAnecdotesRegardingDBEUtilization
ThefollowinganecdotesregardingDBEutilizationwereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009SDCRAAstudy.
SuccessfulMBE/WBEFirms.
Severalintervieweesreportedbeingawareofsuccessfulminority andfemaleownedfirms.
SDTA#3,representingalocalchamberofcommerce,saidthatthereareanumberofsuccessful
minorityandfemaleownedfirmsintheSanDiegoarea,bothsmallandlarge.Regardingthe
successofthosefirms,SDTA#3said,Ireallydontthinkitstheirgenderorethnicityitshard
workanddetermination[thatexplainstheirsuccess.
SDTA#2,representingaHispanicAmericantradeorganization,alsoreportedthattherearea
numberofsuccessfulminorityandfemaleownedfirmsintheSanDiegoarea.However,he
indicatedthattheyonlyworkincertainindustries:SuccessfulDBEsaremostlyinjanitorialor
landscapingindustries.
WhenaskedtonamesuccessfulMBE/WBEsubcontractors,Interviewee#SD28,representinga
whitefemaleownedfirm,wasabletonametwo.Shesaidthattobesuccessfullikethosefirms,
DBEfirmshavetobeactivebeateverymixer,everyassociation[event].SheaddedthatDBE
firmshavetomakeanefforttokeep[their]nameinfrontofeverybody.Shealsoindicatedthat
smallfirmscannotturndownjobstheyhavetobewillingtobidonandacceptallavailable
contracts.
SDTA#9,representingapublicworkstradeorganization,reportedthatmanyofhis
organizationsminorityandfemaleclientshaveasenseofentitlementthatisdetrimentalto
theirsuccess:Alotofourclientshavebadattitudes.Thoseclients,weseedontdoaswellin
business.Forexample,thereisasenseofentitlementthatusedtobeamongtheminorityowned
businessesthattheyshouldhaveasuccessfulbusinessbecauseoftheirclassification.Ihaveseen
thisentitlementchangefromminorityownedbusinessestodisabledvet[eran]owned
businessesnow.
Similarly,Interviewee#SD3,representingawhitemaleownedfirm,saidthatMBEandWBE
firmswhogetintothebusinesswithasenseofentitlementdonotsucceed.Hesaidthat
minorityandfemaleownedfirmsneedastrongworkethictobesuccessful.
Severalintervieweesmadenonspecificcommentsindicatingthattheywereawareofsuccessful
minorityandfemaleownedfirmsacrossseveraldifferentindustries(e.g.,Interviewee#SD3,
Interviewee#SD11,Interviewee#SD19,Interviewee#SD27,Interviewee#SD32,Interviewee
#SD33,Interviewee#SD34,Interviewee#SD37,Interviewee#SD41,Interviewee#SD45,
Interviewee#SD46.SDTA#1,andSDTA#9).
Someintervieweeshadtroublenamingsuccessfulminority orfemaleownedfirms.When
askediftherewereanysuccessfulMBEorWBEfirmsinSanDiego,SDTA#5,representinga
governmentadvisorycommissiononminorityissues,saidthatifthereareanysheisunawareof
them.Shewentontoexplain,Whathashappenedisthatmanyofthemwhohadthemeanshave
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alreadyleftSanDiegoormanyhavegoneoutofbusiness[MBE/WBEfirms]havebeendriven
out.
Interviewee#SD38,representingaHispanicmaleownedfirm,hadtroublenamingafemale
ownedfirmandhadtroublenamingminorityownedfirmsthatwerenotHispanic:Weknow
peoplewiththeirownlandscapingordrywallcompany,butwomendontcometomind.Mostof
whatyouwillseeisHispanicduetoourgeographiclocation.
Interviewee#SD40,representingawhitemaleownedfirm,alsohadtroublenamingsuccessful
MBE/WBEfirms.Hesaid,Therearentalotof[MBE/WBEfirms].Thisisoneofourissueshere
inSanDiego.
Interviewee#SD44,representingaHispanicmaleownedfirm,couldonlynameoneother
successfullocalMBE/WBEfirminhisfirmsindustry.
ReportedutilizationofDBEsbyprimecontractorsinthepublicandprivatesectors.
Severalintervieweesindicatedthattheysolicitbidsfromminorityorfemaleownedfirmsbut
primarilyforpublicsectorwork.Interviewee#SD20,representinganAsianAmericanmale
ownedfirm,indicatedthatincludingminorityownedorfemaleownedfirmsonaproposal
makesitmorecompetitiveinthepublicsectorbutnotintheprivatesector.Interviewee#SD20
describedMBEandWBEparticipationasanonissueintheprivatesector.
Interviewee#SD11,representingawhitemaleownedfirm,indicatedthathisfirmonlysolicits
bidsfromMBEandWBEfirmswhenthosesolicitationsarerequired:When[MBEorWBE
participation]isrequiredtodoworkandcompletethedeal,wefindsomeonetodoitandpay
them23percentmoreand[we]doallthework.
Interviewee#SD4,representingawhitemaleownedfirm,reportedthatwhenmandatoryDBE
goalswereinplaceforpublicsectorprojects,hewouldsolicitbidsexclusivelyfromminority
andfemaleownedfirms.
Interviewee#SD3,representingawhitemaleownedfirm,saidthathisfirmhasrelationships
withatleastoneminorityorfemaleownedfirmineachconstructionindustrythatisoutsideof
hisfirmsexpertiseand,whennecessary,subcontractsworkouttothosefirms.However,he
wentontosaythathisfirmtriestoavoidsubcontractinganyworkatall.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,saidthatbecausehis
firmisaDBEcertifiedfirmitself,DBEgoalsusuallydonotaffecttheprocessbywhichthefirm
selectssubcontractors.However,heindicatedthathisfirmhasworkedwithanumberof
MBE/WBEsubcontractors,andtheexperienceofworkingwiththosefirmsiscomparableto
workingwithnonDBEsubcontractors.
Twointervieweesindicatedthattheirfirmssolicitbidsorpricequotesfromminorityor
femaleownedfirmsformoralreasonsandregardlessofsector.Interviewee#SD15,
representingawhitemaleownedfirmthatisaconcessionaireattheAirport,explainedthathis
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE68

firmtriestopromotediversitywheneverpossible.Thatis,whenallelseisequal,Interviewee
#SD15triestochooseminorityorfemaleownedvendors.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,saidthatherfirmfullycomplieswiththeAirportsDBEprogram:[We]compl[y]
withtheACDBEprogram,becauseitstherightthingtodoevenwithoutmandates.Interviewee
#SD13wentontosaythatapproximately30percentofherfirmsAirportrelatedrevenues
comefromminorityorfemaleownedconcessions.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthatwhenheselects
subcontractors,hetriestouselocalfirmsasmuchaspossible.Regardingthatphilosophy,
Interviewee#SD20said,WhatIbelieveisgivingbacktothecommunity.Thatswhat
distinguishesusfromtheotherfirms.
Severalintervieweesreporteddifficultiesassociatedwithsolicitingbidsfromminority and
femaleownedfirmsbecausethosefirmsarenotavailabletodotherequiredwork.
Interviewee#SD6,representingawhitemaleownedfirm,reportedanumberofdifficulties
associatedwithsolicitingbidsfromMBEandWBEfirms.Heindicatedthatthereareonlyasmall
numberofminorityorfemaleownedfirmsqualifiedtocompletetheworkthathisfirm
requires,andevenasmallernumberrespondtosolicitations.Hewentontosaythathisfirmhas
frequentlyreceivedhostileresponsesfromMBEandWBEfirms.
Interviewee#SD24reportedthatalthoughhisfirmregularlysubcontractsworkouttoMBEand
WBEfirms,sometimesitisdifficultfindingminorityandfemaleownedsubcontractorsthatdo
workinindustriesthathisfirmrequires:Givenwhatthecontractrequires,[sometimes]theres
justnotfirmsthatdo[thattypeofwork].Environmentalconsultingisaprettysmallnicheinthe
economy,andwiththosespecialties,itsdifficulttofindfirmsthatmeetthosegoals.
Similarly,Interviewee#SD7statedthattherearenotanyMBEorWBEfirmsworkinginthe
industriesthathisfirmrequires:Thereareonlyacoupleoffirmsinthecountrythatcanhandle
runwayrubberremoval,takingthedepositsofftherunwaywithoutdamagingit.
WithregardtosolicitingMBE/WBEsubcontractorsforwork,Interviewee#SD31,representinga
whitemaleownedfirmthatisDVBEcertified,said,IwouldntknowwheretofindoneifI
wantedto.
SDTA#7,representingaconstructiontradeorganization,saidthattheresimplyarenotmany
opportunitiesforprimecontractorstosuboutworktominorityandfemaleownedfirmsdueto
thesmallpopulationofminoritiesinSanDiego:TheCityofSanDiegohasterribleminority
numbers,but95to98percentoftheirprojectsareoverlayorsewerandwater.Therejust
[arent]alotof[minority]subsin[thoseindustries].Youdigaholeandputapipeinit.Whodo
yousubitto?SDTA#7saidthatinthosesituations,primecontractorsjustfilloutthe
paperwork,goodfaitheffort.Hewentontosay,Youcantgoexplainthattoablackcitycouncil
memberthatsgotaconstituencythatthinkstheyshouldgetahugeamountofworkoutofthese
things.
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Interviewee#SD7,representingawhitemaleownedfirm,reportedthatfulfillingDBEgoalscan
bechallengingbecauseminorityandfemaleownedfirmsthatappearonapprovedlistsarenot
identifiedwell.Forexample,carpetcleaningfirmsmightbelistedaspaintingfirms.
TwointervieweesindicatedthatclaimsaboutMBE/WBEfirmsbeingunavailablearebaseless.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidthatheusedtoworkonacitizenoversightcommitteerelatedtoDBEissuesanda
numberofcontractorswouldcometothecommitteeclaimingthattheycouldnotfindminority
orfemaleownedfirmsfromwhichtosolicitbids.Interviewee#SD12wentontoexplainthat
thosecontractorshadnotroublefindingminorityorfemaleownedfirmswhentheyfoundout
thattheirproposalswereabouttobedenied.
SDTA#10,representingasuppliertradeorganization,explainedthatmanypublicagenciesin
theSanDiegoareaassertthattheycannotfindminorityandfemaleownedfirmsfromwhomto
solicitbids.SDTA#10statedthatthatassertionmakesnosenseandthattheCityofSanDiego
andotherpublicagenciesarenotseriousaboutaddressingMBEandWBEissues.
Manyintervieweesreportedpositiveorneutralexperiencesworkingwithminority orfemale
ownedfirmsonpublicsectorprojects.Interviewee#SD7,representingawhitemaleowned
firm,reportedthatwhenhisfirmfindsaqualifiedminorityorfemaleownedfirm,theytryto
workwiththemagainonfutureprojects.Interviewee#SD7citedanexampleofanMBEasbestos
removalfirmwithwhichhisfirmlikedworkingandthattheycontactedagainaboutfuturework.
Interviewee#SD11,representingawhitemaleownedfirm,saidthathisfirmhasrelationships
withseveralminorityandfemaleownedsubcontractorswithwhichtheyworkregularly.
Regardinghisfirmsselectionofsubcontractors,Interviewee#SD11said,Weworkwiththe
subswhoarethelowest,qualifiedbidder.
Interviewee#SD25,representingawhitemaleownedfirm,reportedthathisfirmregularly
maintainsover20percentparticipationfromMBE,WBE,andSBEfirms.Hesaidthatevery
memberoftheircontractingteamisanMBE,WBE,oranSBE.
Interviewee#SD27,representingawhitemaleownedfirm,reportedthathisexperience
workingwithminorityandfemaleownedfirmsisnobetterornoworsethanworkingwith
majorityownedsubcontractors.
Interviewee#SD26,representingawhitemaleownedfirm,indicatedthathisfirmhasworked
withseveralMBEandWBEfirmsonpublicagencyprojects,andthat60percentofthose
experienceshavebeenpositive.Ofthepositiveexperiences,Interviewee#SD26saidthathesaw
theDBEprogrampayoffandgiveMBE/WBEfirmstheopportunitiesthattheyneededtogrow.
Interviewee#SD24,representingawhitemaleownedfirm,reportedthathisfirmhaslotsof
experienceinworkingwith[MBEandWBEsubcontractors].Henotedthatthequalityofthose
experienceswasallovertheboardandwasdependentonthequalityofeachindividualfirm.
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Twointervieweesreportednegativeexperiencesworkingwithminority orfemaleowned
firmsonpublicsectorprojects.Interviewee#SD6,representingawhitemaleownedfirm,cited
anexampleinwhichheacceptedasubcontractorbidfromaminorityownedfirmonapublic
sectorprojectwithDBEgoals.Itturnedoutthatthefirmwasnotqualifiedtodothework,and
Interviewee#SD6hadtouseadifferentDBEfirm.ThesecondDBEfirmwasmoreexpensive
thanthefirstone,andtheagencydidnotcoverthedifferenceincostitcameoutofhisfirms
profits.
Interviewee#SD4,representingawhitemaleownedfirm,recountedapublicsectorprojectin
whichhewasrequiredtouseaDBEsubcontractorfortwopiecesofworkonahistoric
preservationproject.Interviewee#SD4didnothaveapositiveopinionofthesubcontractors
work:Theykilledthejobforme.Theydidnotkeepuptoscheduleandtheywerenotproactive
inaddressingproblems.
Someintervieweesofferedcommentsaboutthedifferencesbetweenutilizingminority and
womanownedfirmsinthepublicandprivatesectors.SDTA#11,representingaveteranstrade
organization,reportedthat,comparedtotheprivatesector,thepublicsectordoesabetterjobof
addressingsomeofthebarriersthatdisadvantagedbusinessesfaceandaremoreconsciousof
thenonmandatorygoalsthatremainforMBEandWBEfirms.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,indicatedthatinthe
privatesectorMBEorWBEstatusdoesnotplaymuchofaroleinselectingsubcontractors.
Instead,thatselectionprocessislargelydependentonthedesiresoftheclients(e.g.,How
quicklydoestheclientwanttheworkcompleted?Howmuchistheclientwillingtospend?).
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,indicatedthathisfirm
hasworkedasasubcontractoronseveralnonAirport,publicsectorprojects,primarilybecause
theprimecontractorneededtomeetDBEgoals.However,Interviewee#SD5wentontosaythat
hehasworkedasasubcontractoronatleasttwopublicsectorprojectswithnomandatoryDBE
goalsinplace.
NoIntervieweesreportedthattheyhadrefusedtosolicitorutilizeaminority orfemale
ownedfirmduetorace,ethnicity,orgender.However,someintervieweessaidthattheyhave
refusedtoworkwithcertainMBEandWBEfirmsduetotheirlowqualityofwork.Interviewee
#SD2,representingawhitemaleownedfirm,explainedthatthereareanumberof
subcontractorswithwhomhewillnotwork,butthathisrefusaltoworkwiththosefirmsis
basedontheirpreviousperformanceandnottheirDBEstatus.Interviewee#SD21wentonto
saythattheonlydifferencebetweenworkingwithDBEandnonDBEfirmsisthatsometimes
DBEfirmsarefinanciallyincapableoftakingoncertainprojects.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,alsoindicatedthat
thereareanumberofminorityandfemaleownedfirmswithwhomherefuseswork,butthatit
hasnothingtodowiththeirminorityorgenderstatus:Therearebadcontractorsinanyfield,
DBEornot.
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Someminority andfemaleownedfirmsreportedseekingoutprimecontractorstobidon
projectsratherthanwaitingforsolicitations.Interviewee#SD20,representinganAsian
Americanmaleownedfirm,reportedthat,atleastinthepublicsector,hisfirmtakesaproactive
approachtowinningsubcontracts.Theyresearchavailableprojects,determinewhichprime
contractorswouldlikelybeinterestedinthoseprojects,andtrytoselltheprojectand
themselvestothoseprimecontractors.Regardinghisfirmsapproach,Interviewee#SD20
explained,Idontwaitfortheprimetoreachouttome.Thatstoolate.
Similarly,Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedthat
hisfirmfindssubcontractingopportunitiesbycallingprimecontractorsthatappearon
planholderslists.Hewentontosaythathisfirmsapproachhashelpedthembuildrelationships
intheconstructionindustry.
ReportedutilizationofDBEsbyprimecontractorsonSanDiegoAirportprojects.
Someintervieweesreportedneutralexperiencesworkingwithminority orfemaleowned
firmsonAirportprojects.Interviewee#SD14,representingaHispanicAmericanmaleowned
firm,indicatedthathehasneverworkedasaprimecontractorattheAirportbuthasdonework
asasubcontractorthere.
Interviewee#SD4,representingawhitemaleownedfirm,saidthatofthefewprojectsthathis
firmhascompletedwiththeAirport,theyhaveonlyusedoneortwominorityorfemaleowned
firms.HewentontosaythatifhisfirmcannotuseMBEorWBEfirms,theywillsometimesuse
MBEorWBEsupplierstomeetDBEgoals.
SDTA#6,representinganAsianAmericantradeorganization,reportedthatsheisawareofat
leastoneminorityownedfirmthathasdoneworkwiththeAirportasaprimecontractorand
oneminorityownedfirmthathasdoneworkthereasasubcontractor.
ThemasterconcessionaireattheSanDiegoAirportreportednegativeexperiencesworking
withminority orfemaleownedfirms.Interviewee#SD13,representingawhitemaleowned
firmthatisthemasterconcessionaireattheAirport,indicatedthatthevastmajorityofcriticism
thatherfirmreceivesfromtheAirportisrelatedtotheirminorityandfemaleowned
concessions:95percentofthecomplaintswegetfromtheAirportAuthorityreallyhavetodo
withtheACDBEsubtenants.Shewentontosay,ThefeedbackIgetfromtheairportauthority
regarding[cleanlinessorappearance]comesfromtheACDBElocations.Theydontcomefrom
[our]locations.Interviewee#SD13acknowledgedthatsomeofthoseproblemsarearesultof
thevastdifferencesinresourcesbetweenherfirmandtheMBEandWBEconcessions,andthat
theAuthorityissensitivetothosedifferences.
Twointervieweesreportedbeingunawareofanyminority orfemaleownedfirmsbeing
utilizedonSanDiegoAirportprojects.SDTA#11,representingaveteranstradeorganization,
indicatedthatheisnotawareoftheairportawardingsubstantialcontractstolocalminorityor
femaleownedfirms(asprimecontractorsorassubcontractors),andheattributespartofthat
phenomenontothebarriersthatthosebusinessesface,therestoomanypitfalls,toomany
requirements[forMBEandWBEfirms].
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Interviewee#SD7,representingawhitemaleownedfirm,reportedthathisfirmhascompleted
threeprojectsattheAirportasaprimecontractorandhavenotworkedwithanyminorityor
femaleownedsubcontractors.
DBEutilizationfollowingProposition209.
Severalintervieweesreportedadeclineinparticipationofminority andfemaleownedfirms
afterProposition209passedandprohibitedmandatoryDBEgoalsonstatefundedcontracts.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,indicatedthatthe
situationchangedsubstantiallyforminorityandfemaleownedfirmsafterProposition209
passed:Fifteenyearsago[thesituation]wasalotdifferent.Tentofifteenyearsagotherewasa
mandatorygoal[MBE/WBEfirms]wereonthebiggerprojects.[Primecontractors]used
[MBE/WBEfirms]becausetheyhadtomeetthegoal.Interviewee#SD14wentontosaythat
afterProposition209passedprimecontractorsawardedfarfewercontractstominorityand
femaleownedfirms.Hesaidthatafirmsstatusaslowbidderbecamethemostimportant
factor:Thewaytimesarenow,itsthelowbidthatwillgetyouthejob.
Interviewee#SD2,representingawhitefemaleownedfirm,indicatedthatremovingDBEgoals
afterProposition209hurtmanyminorityandfemaleownedfirms.ShesaidthatDBEprograms
gave[MBE/WBEfirmshopeafter[Proposition]209,theylosthope.Shealsostatedthat
therewouldbemoreAfricanAmericancontractorsifProposition209hadnotpassed,andthat
shesawanumberofstrong,AfricanAmericanownedfirmsgooutofbusinessasaresultof
Proposition209.Withregardtoherownfirm,Interviewee#SD2explainedthatafter
Proposition209passed,shenolongerreceivedasmanyrequestsforbidsfromprime
contractors:[Itwaslike]nightanddaythephonecallsjuststopped.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedthatafter
Proposition209,hewonfarfewercontracts.Hesaidthathehadalucrativebusinessasa
minoritysubcontractorthroughoutthefirsthalfofthe1990s,butoveraninemonthperiod
followingProposition209hisbusinessplummeted,leadinghimtoliquidateitin2000.
SDTA#2,representingaHispanicAmericantradeorganization,indicatedthathisorganization
engagedinextensiveoutreachwithminorityandfemaleownedfirmsimmediatelyfollowing
Proposition209inanattempttooffsetitseffects.However,SDTA#2saidthatdespitehis
organizationsefforts,therewasadramaticdecreaseintheparticipationofMBE/WBEfirms
afterthebillpassed.
Interviewee#SD25,representingawhitemaleownedfirm,indicatedthatpriortoProposition
209,seekingoutMBEandWBEusedtobehighlyencouraged,andhesaidthathisfirmwouldtry
togoaboveandbeyondthestatedDBEgoals.
WithregardtoDBEgoals,Interviewee#SD28,representingawhitefemaleownedfirm,
indicatedthatthosegoalshelpherfirmgetwork,andthattheeliminationofmandatoryDBE
goals(astheresultofProposition209andCaltransimplementingaraceandgenderneutral
DBEprogram)hurtherfirmssuccess:Ithink[DBEgoals]help,andIthink[mandatorygoals]
goingawayhurtus.
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SDTA#5,representingagovernmentadvisorycommissiononminorityissues,reportedthat
publicagenciesinSanDiegostoppedmakingeffortstopromotediversityfollowingProposition
209:AsaresultofProp209,[theCityofSanDiego]feelstheycantdoanythingtheCitycant
beaggressiveindemandingdiversityorcreatingstandards.
OnemajorityownedIntervieweesaidthatdoingbusinessbecameeasierafterProposition209
passed.Interviewee#SD11,representingawhitemaleownedfirm,remarked:After
Prop[osition]209passed,itwasmucheasiertodobusiness,Heindicatedthatheisnot
supportiveofDBEprogramsoroftheirintent.Hesaid,Whenyousubmitabidtheyareall
submittedonwhitepaperwithblackink.Thisisnotaracialissue.
ConsortiumAnecdotesRegardingDBEUtilization
ThefollowinganecdotesregardingDBEutilizationwereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009Consortiumstudy.
ReportedutilizationofDBEsbyprimecontractorsinthepublicandprivatesectors.
Someprimecontractorsreportedusingthesamesubcontractorsintheprivateandpublic
sectors.[Interviewees#CON:3,5,8,14,16,18,19,20,21,22,24,26,33,34,35,36,38,41,42,
46,48,49,53,54,55,58].Interviewee#CON3,anonDBEwhitemaleownerofan
environmentalservicescompanyintheSanDiegoarea,reportedthatheusesthesame
subcontractorsintheprivatesectorandinthepublicsectorbecausetherearealimitednumber
ofthemandonceyoudeveloparelationshipwiththem,ifyouarehappywiththem,you
continuetousethem.HestatedthatcompetencywasneveranissuefortheDBEsthatheused.
Interviewee#CON3recalledusingDBEsonprivatesectorprojects,mostrecently,in2007.The
projectwasaninvestigationtodeterminetheamountofcontaminationatasite.Hestatedthat
heusedaDBEanalyticalfirm.Interviewee#CON3statedthathehasusedDBEsonprivatesector
projectstensoftimes.TypicallytheDBEswouldalwaysbeanalyticalfirmsordrillersandthey
wouldbelocatedalloverSouthernCalifornia.Herecalledaprojectinwhichheuseda
demolitioncontractorwhowasaDBE.Interviewee#CON3statedthatthedemolitioncontractor
wasashamDBE.Thedemolitioncontractorrepresentedthatitwaswomanownedbutwasin
factoperatedbyawhitemale.Interviewee#CON3statedthathegenerallyfindsDBEsby
recommendationofcolleagues.OccasionallyhealsofindsDBEsthroughtheagencies.Often
whentheConsortiumputstheprojectoutforbid,theagencywillattachalistofqualifiedDBEs.
Interviewee#CON3statedthatthetypicalcostoftheprojectintheprivatesectorthatheused
DBEsonwas$50,000$100,000,andtheDBEportionmightbe$10,000to$30,000.Public
sectorjobsaremoreextensive,$4millionto$6million.Privatesectorjobstendtobesmallwith
certainexceptionslikerefinerysites.Interviewee#CON3statedintheprivatesectortheclient
alsowantstospendlessmoney,sotheywantyoutotakelesssamples,howmanyholesyouput
intheground,howmuchanalyticalworkyoudo.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthatwhenhiscompanywasaprimecontractor,the
companywouldsometimeshavetohireastructuralengineertoprovidestructuralcalculations.
Interviewee#CON5statedthathiscompanyusedthesamesubconsultantsintheprivatesector
asinthepublicsector.Interviewee#CON5statedthathethinksthestructuralengineerwasa
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DBEbutwasunsure.HestatedthatthestructuralengineerisAsianandwouldlikelyqualifyasa
DBE.Interviewee#CON5statedthathehasusedthestructuralengineerinpublicandprivate
jobs.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,usesthesamesubcontractorsintheprivatesectorasinthepublicsector.
Interviewee#CON16statedthereasonisbecauseofhissubcontractorsknowledge,experience,
andreliability.Interviewee#CON16alsonotedthecompetitivepricingofhissubcontractorsasa
reasonforusingtheminboththepublicandprivatesectors.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,does
usethesamesubcontractorsinboththeprivateandpublicsector,butshesnotverylikelytouse
subcontractorsintheprivatesector;themajorityofherprivateworkiswithsmallnonprofit
organizations
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,reportedthatheutilizes
thesamesubcontractorsintheprivatesectorandthepublicsector.Hestatedthathetriesto
ensurethatallofhissubcontractorsareminorityorfemaleowned.Hestatedthatmanyofhis
subcontractorsareDBEs.HestatedthathelocatesDBEsbywordofmouthorhealreadyknows
them.Interviewee#CON19statedthathealwaystriestoutilizeDBEsaftersolicitingthem
dependingontheneed.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatshedoesusethesamesubcontractorsinthepublicand
privatesectors;shestatedthatgoodworkandgoodrelationshipsdictatethatdecision.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,usesthesamesubcontractorsinthepublicand
privatesectors.Shestatedthatsheissmallbusinessfriendlyandshewillworkwithfirmsthat
areopentosharinginformation.Shestatedthatthesesubcontractorsareminorityorfemale
ownedbutdidnotknowwhethertheywereDBEcertified.Shestatedthatshehasattemptedto
utilizeminorityandfemaleownedsubcontractorsintheprivatesector.Shestatedthatshehas
alsoutilizedDBEsonConsortiumprojects.Shestatedthereisanadvantagetousingsmall
businessesbecausetheyareflexibleanddonothaveasmanylayersaslargercompanies.She
statedthatshelocatesDBEsviawordofmouthandusesthemallthetimeaftersoliciting
business.ShesaidtheaveragepriceofthesubcontractstoDBEsisbetween$10,000and
$100,000.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatforthemostpartsheutilizesthesamesubcontractorsinthepublic
andprivatesectors.Shestatedthatsheutilizesthesamesubcontractorsbecausetheir
relationships,experience,staffing,resourcesandqualificationshavebeenestablishedand
thoroughlyvetted.Shesaidthatsomeofhersubcontractorsarefemaleownedandsomeare
DBEs;shestatedthatalwaysattemptstouseminorityandfemaleownedandDBE
subcontractorsintheprivatesector.Interviewee#CON22statedthatshefeelsitisimportantto
workwithDBEsbecauseherfirmisaDBE;shelocatesDBEsthroughCaltrans,MTAandOCTA.
ShestatedthatsheutilizesDBEsasoftenasshecanaftertheyreachanagreementastoterms.
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Interviewee#CON22reportedthatshetypicallysubcontractsCADworkandtheaveragepriceof
subcontractssheletsis$50,000.00.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,reportedthatsheutilizesthesamesubcontractorsacrossthepublicand
privatesectorsbasedonrelationshipsandknownqualifications.Shestatedthatsomeofthese
subcontractorsarefemaleandminorityowned.Shestatedthatshehastriedtouse
female/minority/DBEsubcontractorsintheprivatesectorandonConsortiumprojects;shesaid
thatitisrequiredbutnotmandatory.ShestatedthatshelocatesDBEsusingthelistprovidedby
L.A.CountyMTAandsheoftenutilizesDBEsaftersolicitingthem.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatshedoesusethesamesubcontractorsintheprivatesectorasinthepublicsector.She
statedthatshebasesherselectionofsubcontractorsontheirqualifications.Shesaidthatsome
ofthesesubcontractorscouldhavebeenminorityorfemaleowned,but,again,thedecisionto
usethemisbasedonqualifications.ShesaidshehasusedDBEsubcontractors,especiallywhen
requiredtodosobytheagency.However,shehasnotattemptedtouseminority/female/orDBE
subcontractorsintheprivatesector.ShestatedthatonConsortiumprojects,shesolicitsprice
quotesfromDBEsaboutonceayearbecauseitisrequiredunderanRFP.Shestatedthatshe
locatesDBEsbywordofmouthandalwaysusesthemaftersolicitingapricequote;saidtheprice
rangeoftheseprojectsisbetween$20,000and$800,000.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,reportedusingthesamesubcontractorsinthepublicandprivatesectorsandstated
thatexperienceistheoverridingfactorindeterminingwhichsubcontractorstoutilize.She
statedthatthesesubcontractorsareminorityorfemaleownedandmoreoftenthannotshe
utilizesminorityorfemaleownedfirmswithwhomshehasarelationship.Shedoesnotknow
whetherthesesubcontractorsareDBEcertifiedbecauseshefocusesonthefirmsqualifications.
Shehasattemptedtoutilizeminority/female/DBEsubcontractorsintheprivatesectorbutshe
hasnothadanyassignmentsintheprivatesector.ShestatedthatsheutilizesDBEsinpublic
sectorwork100percentofthetimeaftersolicitingthem;shenotedthatshedoesnotnecessarily
utilizeDBEsbecausetheyarecertifiedbutratherbecausetheyareinhernetworkofpeople
thatsheusesbasedonthequalityoftheirwork.Shestatedthatshehasbecomefamiliarwith
certainDBEsthroughteamsonformerjobs.Whensheisseekingasubcontractortoworkona
particularspecialtyareashewilldrawfromhernetwork.Theaveragepricerangeofherprojects
toDBEsisbetween$60,000and$1,000,000.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatwhentheopportunitypresentsitselfsheusesthesame
subcontractorsintheprivateandpublicsectors.Sheindicatedthatiftheydeliverqualityservice
shewillutilizethemagain.Shestatedthatshealwaysattemptstoutilizeminoritiesinthe
privatesector.ShestatedthatshelocatesDBEsthroughorganizationsandotherreferrals.She
utilizesDBEs100percentofthetimeaftersolicitingthem.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatsheusesthesamesubcontractorsinthepublicandprivate
sectorsbecauseshewasconfidentintheirworkandknewhowtheyworked.Shestatedthat
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someofthesesubcontractorsarefemaleorminorityowned.Shedoesnotalwaysknowuntil
thestartoftheprojectwhetherhersubcontractorsareDBEs;sheismoreconcernedwiththe
qualityofthework.Shestatedshewouldalwaystrytoutilizefemaleandminorityowned
subcontractorsintheprivatesectorbutthequalityoftheworkisherpriority.Shesaidthatshe
keepsarosterofgoodpeopleandtriestoupdateitbasedonrecommendations.Shestatedthat
shelocatesDBEsbysendingoutletterstocourtreporters(herbusiness)whohavejustpassed
theexam.Theaveragecontractamounttosubcontractorsis$200to$2,000.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,reportedusingthesamesubcontractorsacrossthe
privateandpublicsectorsbecausetheyareexcellentatwhattheydo.Hereportedutilizing
minorityandfemaleownedandDBEcertifiedsubcontractors.HestatedthathesolicitsDBEs
forpricequotes100percentofthetime;hesolicitsthembecausetheyaregoodatwhattheydo
andtheyarefamiliarwiththereportingprocessesoftheindustry.HestatedthathelocatesDBEs
throughexperienceworkingwithotherbusinessesandthroughrecommendations;healso
advertises.Healsostatedthathelocatesthemthroughanorganizationofwhichheisamember:
NationalCenterforAmericanIndianEnterpriseDevelopment(NCAIED).Hestatedthathe
utilizesthefirmsthathesolicitsprettyoftendependingonthequalityofwork.Interviewee
#CON38statedthattheaveragepricerangeofsubcontractsis$100,000.
Interviewee#CON41,anAsianAmericanmaleownerofaDBE/MBEcertifiedgeneral
contractingfirm,reportedusingthesamesubcontractorsinthepublicandprivatesectors
becauseitiseasiertheyknowthequalityofworkanditiseasiertoexplainthevisionfora
projectbecauseoftheworkingrelationshiptheyhavemaintained.Theymayhaveworkedwitha
minorityownedfirmbutnotafemaleownedfirm;hewasnotsurewhetheranyofhis
subcontractorswereDBEsalthoughtheyhavetriedtoworkwithDBEsintheprivatesectorpast.
However,theydonottargetDBEfirms.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,reportedthatsheutilizesthesamesubcontractorsintheprivate
andpublicsectorsbecauseoftherelationshipsthathavedevelopedandtheknowledgeand
understandingthattheyhaveoftheservicesprovidedandtherelatedexpectations.Shestated
thatthequalityofworkisbetter.Interviewee#CON42statedthatshedoesuseminorityand
femaleownedsubcontractors,butshedidnotknowwhethertheywerecertifiedDBEs.She
statedthatinboththeprivateandpublicsectorssheutilizesthevendorsthatsheknows;
whethertheyareminorityorfemaleownedisasecondaryconsideration.Shedoesnotlookfor
DBEsinparticular.Theaveragepriceofhersubcontractsisabout$5,000.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathetriestoutilizethesamesubcontractorsintheprivateandpublic
sectorsbecauseofthequalityoftheirwork,theirhistory,andtheirdependability.Hestatedthat
allofhissubcontractorsarefemaleorminorityownedbuthedidnotknowwhethertheywere
certifiedDBEs.HestatedthathehasnotnecessarilytriedtouseDBEsintheprivatesector
becauseitisnotrequired.Hestatedthathebuildshisworkforcebasedoncapabilitiesandskills
andworkhistoryandnotonasubcontractorsDBEcertificationiftheyhappentobeaDBEso
beit.
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Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedheveryrarelyutilizessubcontractorsbutnotedthathedoesutilizethe
samesubcontractorsacrossallsectors.Hestatedthathehasutilizedafemaleownedfirmbefore
butdidnotknowifhehadeverutilizedaDBEcertifiedfirm.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedusingthesamesubcontractorsintheprivatesectoraswellasthepublicsector
becauseheisconfidentinthequalityoftheirworkandtheservicestheyprovide.Hestatedthat
noneofhissubcontractorsareDBEcertifiedalthoughtheyareminorityorfemaleowned.He
statedthathissuccessoncontractshasnothingtowithwhetherheutilizesDBEs;hestatedthat
helooksforexperiencedsubcontractorsandalotoftimesDBEsarelackinginexperience.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,statedthathemostlikelyusesthesamesubcontractorsacrossthepublicandprivate
sectorsduetothequalityoftheirwork.Hestatedthatheutilizedafemaleownedfirmandmay
haveutilizedaDBE.Hestatedthatheonlyusesfirmswithwhomheisfamiliarwiththeirwork
historyandwouldnotseekoutaminorityorfemaleownedfirmoraDBEunlesstheyhappened
tofallintohiscategoryofqualitysubcontractors.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,reportedthattheymake
apointtousethesamesubcontractorsinthepublicandprivatesectorsbecauseofthequalityof
workandservicestheyprovide.Hestatedthatsomeofthesesubcontractorsareminorityor
femaleownedorDBEs.HestatedthattheysolicitDBEsallthetimebasedonthequalityoftheir
work.HeindicatedthattheylocateDBEsthroughtheCommunityServiceDepartmentwhich
maintainsadatabaseofDBEsubcontractors.Hestatedthatthesubcontractingworkisfor
documentcontrol,scheduling,andestimating,andthepricerangeforthesubcontractsisabout
$10million.
Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthattheyusethesamecontractorswhotheyarefamiliarwith
andenjoygoodrelationships.Hestatedtheirprimaryconcernisthequalityofwork.Hereported
thatsomeoftheirsubcontractorsareminorityandfemaleowned.Hewasnotawareofhisfirm
specificallypursuingDBEsintheprivatesectorbutbelievesthatthisisthecase.Hestatedthat
theydosolicitDBEsforpricequotesoftenandtheylocateDBEsthroughanonlinecertification
vehicle.HereportedthatthepricerangeforprojectssubcontractedtoDBEsrangesbetween
$100,000to$5million.HestatedthatsincethepassageofProposition209,ifthecontractdoes
nothaveagoal,theywillselectasubcontractorbasedonworkhistoryandafirmsabilityto
handleallaspectsofthejob.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,reportedthathis
firmutilizesthesamesubcontractorsacrossthepublicandprivatesectors.Hestatedthatthe
subcontractorsdisciplines,qualityofwork,skillset,andpastrelationshipsthathavebeenbuilt
allcontributetothis.HestatedthattheyutilizeDBEfirmsandhaveattemptedtoutilizeDBE,
andminorityandfemaleownedfirmsintheprivatesector.Hestatedthatwhentheydoutilize
DBEsitisusuallyonethattheyknoworthathasbeenreferredtothem;insomeinstancesthey
haveobtainedalistofapprovedDBEs.HestatedthattypicallywhentheyuseaDBE,theydoso
becauseitisarequirementandwillusethemonadditionalprojectsasrequired.
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Someprimecontractorsreportedusingdifferentsubcontractorsintheprivateandpublic
sectorsforvariousreasons.[Interviewees#CON:9,11,15,30,37,39,43,57].Interviewee
#CON9,anAsianPacificAmericanmaleownedtransportationengineeringandplanning
consultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthathedoesnot
usethesamesubcontractorsinthepublicandprivatesectorsbecauseeveryprojectisdifferent
andtherearealotofalternativesoutthere.Interviewee#CON9statedthathehasusedaDBE
subcontractorbothinthepublicandprivatesectors.Hestatedthathehasnothadanyproblems
usingDBEsonConsortiumprojectsoronprivatesectorprojects.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
doesnotusethesamesubcontractorsintheprivatesectorandthepublicsectorbecausethe
Consortiumhasveryspecificrequirementsforthesubcontractorsthatshemayuse.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,reportedthatintheprivatesector,hiscompanygenerallyfunctionsasa
subcontractor,andhenoticesthatprimecontractorsgenerallyusemanyofthesame
subcontractors.Interviewee#CON15rarelyusesDBEsonprivatesectorprojects,buthe
reportedthatislargelyanissueofpricing.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathedoesnotusethesamesubcontractorsinthepublicandprivatesectors
becauseofthedifferentexpertiserequiredfordifferentprojects.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathedoesnotusethesamesubcontractorsintheprivatesectorandpublicsector.He
statedthathisusageofsubcontractorsisdependentonthedisciplineandthescopeofwork.For
instance,inthehighdesignsectorhegenerallyworkswithbignamefirms.Hestatedthatsome
ofthesubcontractorsareDBEs,buthedoesnotalwaysuseDBEs.ThoughDBEusageisa
priority,hestated,thathismainfocusiscredibility,workhistory,anddelivery.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatshedoesnotalwaysutilizethesamesubcontractorsacrossthepublicandprivatesectors
becausesometimesitisnotpossible(e.g.,forworkthatisabroad).Shestatedthatshehires
subcontractorsonacasebycasebasisandshehiresonlythemostqualifiedsubcontractorsthat
mayormaynotbeminorityorfemaleowned.Shestatedthatsomeofthesesubcontractorsare
DBEcertifiedbuttheyarenothiredonthatpremise;occasionallyshefindsoutafterthefactthat
asubcontractorisDBEcertifiedbutitwouldbeacoincidencebecauseshedoesnotmakean
extraefforttouseDBEs.Shestatedthatshehastriedtoutilizeminorityandfemaleowned
subcontractorsintheprivatesectorbutagainhermainfocusisthequalityofwork;shestated
thatsheismorelikelytogoafterqualityandcredibilityandifaDBEhasthosetraitsitismere
coincidence.Shestatedthattheaveragepricerangeforhersubcontractsisapproximately
$250,000.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
statedthattheydonotusethesamesubcontractorsacrossthepublicandprivatesectors
becausetheirprivatesectorsubcontractorsdonothavethenecessarypublicsectorbackground.
Hestatedthatsomeoftheirsubcontractorsareminorityorfemaleowned,buthedidnotknow
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whethertheywereDBEcertifiedbecausetheyonlypayattentiontotheprospectivefirmswork
historyandqualityofwork.Hestatedthattheirfirmdoesnotmakeanyattempttouseminority
orfemaleownedfirmsorDBEsintheprivatesectorbecausetheirfirmevaluationisbased
solelyonthequalityofwork.
Someprimecontractorsreportedhavingnoneedforsubcontractorsonprivatesector
contracts.[Interviewees#CON:12,13,17,52].Interviewee#CON12,aHispanicmaleownerofa
DBE/MBEcertifiedcivilengineeringfirm,statedthattheydonotusesubcontractorsinthe
privatesector.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathisworkisverydifferentasbetweenthepublicand
privatesectors;hecurrentlyhasoneprojectintheprivatesectorandheisactingasa
subcontractor.Interviewee#CON13statedthathehasusedaDBEonaConsortiumprojectand
itwasnodifferentfromanonDBE;hestatedthatheselectedthembecausehethoughtthey
coulddotheworkandnotbecausetheywereaDBE.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedhercompanyhasnthadtheneedtosubcontract
intheprivatesector.
MostcontractorsreportedhavinghadapositiveexperienceworkingwithDBEs.[Interviewees
#CON:3,9,12,13,14,15,17,18,19,20,21,22,24,26,30,33,34,35,36,37,38,42,46,48,49,
54,55,57,58].Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservices
companyintheSanDiegoarea,reportedthathisexperiencesworkingwithDBEhavealways
beenfine.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthatin
hisexperience,DBEsareverygoodatassistingduringtheproposalstage,whichhesurmisedis
becauseDBEsgetusedtogettingcallsatthelastminute.Hestatedthataftertheproposal
stage,thereisnonotabledifferencebetweenworkingwithDBEsandnonDBEs.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathehasnotusedaDBEsubcontractoronaConsortiumproject.HehasusedaDBE
subcontractoronanonConsortiumpublicsectorprojectandthatexperiencehasbeenvery
good.Interviewee#CON12statedthattypicallytheDBEsthattheylookatarebasedonthe
abilitytodeliver;theydonotliketojustgooutandcheckintheyellowpagestoselectaDBE
becauseyoudonotknowwhatyouaregoingtogetanditcouldputtheprojectatrisk.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehadapositiveexperienceworkingwithaDBEona
Consortiumproject.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathehashadalotofpositiveexperiencesworkingwithDBEsandMWBEs.Hestatedthathis
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companychoosestoworkwithqualifiedsubcontractors;hestatedthattheylookforfirmsthat
arequalifiedfirst,andthenconsiderwhethertheyareaDBE.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,statedthathisexperienceusingDBEsonConsortiumprojectshasbeen
fine.HestatedthathisexperiencesaregenerallypositivewithDBEs,andthatifthereisa
problem,hewillgodirectlytotheownerandgettheproblemresolved.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hasnotutilizedDBEsonConsortiumorprivatesector
projectswhenfunctioninginaprimecontractorcapacity.Interviewee#CON17sother
experienceswithDBEshasbeenverypositive,butshenotedthattheexperiencedependslargely
onanybusinessphilosophy.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,stated
herexperienceswithDBEsonConsortiumprojectshasbeenpositivebecausesheonlyworks
withpeoplethatsheknowswillgiveheragoodproductshestoosmall.Interviewee#CON18
oncehadproblemswithaDBEbusinesspartner,andthatledhertonotworkwiththeDBE
again.Interviewee#CON18doesnothavetoworkwithDBEs,sosheworkswithpeoplethatshe
needstocompleteagivenjob.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatshehasworkedwithmanyDBEsubcontractorsandstated
thathernetworkconsistsmainlyofminorityandfemaleownedfirms.Shestatedthatifshe
receivesacalltoreferagroupforaproject,shetendstoreferpeoplewithinherownnetwork.
Interviewee#CON20statedthatsheutilizesDBEsbecauseitisgoodforbusiness.Shestatedthat
afterbeinginbusinessfor15years,shejustknowswhotheDBEsareandsheutilizesthemall
thetime.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatshehashadapositiveexperienceworkingwithDBEs.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatshehashadapositiveexperienceworkingwithDBEs.Shestatedthatsherarely
solicitsDBEsunlessitisrequiredandshefindsDBEsthroughwordofmouth.Aftersoliciting
DBEssheusesthemabout80percentofthetime.Shestatedthattheaveragepriceon
subcontractsthatshegivestoDBEsisbetween$20,000and$40,000.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,reportedusingminorityandfemaleownedsubcontractors.HelocatesDBEsthrough
associationgroupsthathavesuchlistings.Hestatedthatoverallhehashadapositiveexperience
subcontractingworktoDBEs.Hetypicallysubcontractsvarioustypesofengineeringand
constructionmanagementjobstoDBEs.Hestatedthatthesearegenerallysmallerscaleprojects
andrangeinvaluefrom$5,000to$25,000.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE81

Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatherexperienceswithDBEshavebeenmostlypositive;theonlyoccasional
issuemayhavebeenmanagingthesubcontractorswork.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathisexperienceworkingwithDBEshasbeenpositive.HestatedthathesolicitedDBEs
foramajorprojectattheLosAngelesWorldAirport,notonlybecausethecontractrequiredit,
butbecausehealsowantedDBEparticipation.Hestatedthathesubcontractsengineering,cost
estimating,specifications,andmovecoordinatorworktoDBEsatanaveragepriceoffour(4)to
six(6)figuresdependingonthedisciplineandprojectduration.ThefrequencyofDBE
solicitationsdependsontheDBEsworkhistoryandprojectrequirements.
AfewprimecontractorsreportedhavinghadanegativeexperienceworkingwithDBEs.
[Interviewees#CON:13,39].Interviewee#CON13,anAsianPacificAmericanmaleownerofa
DBE/SBA/SBEcertifiedengineeringconsultingfirm,statedthathehadmajorproblemsinthe
pastwithaWBEthathehired,butitwasalongtimeago,andhedeclinedtoprovidefurther
detail.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatshehadanegativeexperienceworkingwithone(1)DBEbecauseshefeltthatthecompany
wasinept.ShedoesnotlikehavingDBEcertificationrequiredandwouldprefertofocuson
qualityofworkovercertification.
SeveralintervieweesindicatedtheyhavelittleornoexperienceworkingwithDBEsineither
thepublicorprivatesector.[Interviewees#CON:2,4,5,6,7,8,11,16,17,52].Interviewee
#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiegoarea,stated
thatheusessubcontractorsfordraftingservicesintheprivatesector,buthedoesnotperform
anyworkinthepublicsector.Therefore,heusesthesesubcontractorsonlyintheprivatesector.
Interviewee#CON2statedthathehasnotusedanyDBEsonConsortiumprojectsbecausehehas
notperformedanyworkfortheConsortium.Interviewee#CON2statedthatheisnotsure
whetherhehaseverusedanyDBEs.HestatedthathemayhaveusedaDBEfordraftingservices
butisnotsurewhetherthefirmisaDBE.Hestatedthathehasusedthisfirmonfourprojects.
Interviewee#CON2statedthathehasnotusedmanyDBEs,buthehashadapositive
relationshipwiththedraftingfirm.Hestatedthatbesidesthedraftingfirmhehasnotusedany
otherDBEsonprivatesectorprojects.Hesaidthatheusesthesamefirmbecauseheknowsthe
firmandhasdevelopedaworkingrelationshipwiththemovertheyears.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathiscompanywasawardedacontractbytheCityofSanDiego
foroncallgeotechnicalservicesinthemid1990sandwasaprimecontractoronthatproject.
Therewereoccasionsontheprojectwherehiscompanyneededasubcontractor,forinstance,to
drillholes,andhewouldlookforaDBEdrillingcontractortodrillholes.Interviewee#CON4
couldnotanswerwhetherheusedthesamesubcontractorsintheprivatesectorandthepublic
sectorbecausehisprivatesectorworkasaprimecontractorwasmuchearlier(1979).
Interviewee#CON4hasnotworkedonanyConsortiumprojectsandtherefore,hasno
experienceusingDBEsonsuchprojects.HestatedthathehasnotusedanyDBEsonprivate
sectorprojectsbecausetheopportunitynevercameup.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE82

Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthathashadnoexperienceusingDBEsonConsortium
projectsbecausehehasnotworkedonanyConsortiumprojects.Hestatedthatotherthana
structuralengineerwhomighthavebeenaDBE,hehasnotusedanyotherDBEsonprivate
sectorprojects.Hestatedthathehasusedthestructuralengineerabouttwiceamonthinallof
hisjobsforthepastfive(5)years.Interviewee#CON5statedthathehasnevertriedtofindany
otherDBEstoworkwithbutstatedthatitwouldbeagoodidea.HestatedthatheusesthisDBE
ratherthanlookingforanyothersbecausehehasknownthestructuralengineerformanyyears
andhehasalwaysusedhim.Thestructuralengineeralwaysdoesagoodjob,hisworkistimely,
fastandinexpensiveandheisreadilyavailable.Interviewee#CON5statedthathecannotsay
thatotherDBEsarenotreadilyavailablebecausehehasnevertriedtouseanother.Hestated
whensomethingworksyoudonotneedtofixit.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompany,hasreferredcustomerstoDBEs,buthashadno
occasiontohireaDBEbecauseheisasubcontractorandsellsmaterials.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthathehasusedsubcontractorsattimes
(althoughhereportedactingasasubcontractor9899percentofthetime)andhehasprobably
usedDBEsubcontractorsbeforebutdidnotknowbecauseheneverasked.Interviewee#CON7
statedthathehasnothadanyexperienceusingDBEsonConsortiumprojects.Interviewee
#CON7couldnotdescribehisexperienceswithDBEsbecausehewasnotsurewhich
subcontractorswereDBEsandwhetherhehadworkedwithany.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,hasrespondedtoanRFPwithaDBEcomponentbuthasneveractuallyworkedwithaDBE
subcontractor.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
hasneverworkedwithaDBEalthoughshedidtryoncetoworkwithaDVBE.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,hasnotreallyusedDBEsonthecompanysprojectsforConsortiumentities,
indicatingthatthereisnoneedtodoso.Interviewee#CON16worksmorewiththevarious
agenciesratherthanwithotherDBEcompanies.Interviewee#CON16hasnoexperience
workingwithDBEsinprivatesectorprojects.Interviewee#CON16hasnothadparticular
experienceswithotherDBEsofnote,butthecompanydoesusesmallbusinesseswhenever
possible,despitethattheymaynotbecertifiedasminorityownedordisadvantagedbusinesses.
Interviewee#CON16veryrarelylikestouselargecompaniesunlessthescopeofaprojectisso
bigthatasmallercompanycannothandleajob.Interviewee#CON16notesthatsmall
businessesmaynotprovidethebestprice,buttheyusuallyprovidethebestoverallwork
experienceandvalue.Smallerbusiness,notedInterviewee#CON16,tendtovaluelongterm
relationshipsthatareestablishedovertime.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE83

NoprimecontractorreportedhavingrefusedtoworkwithaDBEbecausetheywereaDBE.
However,someprimecontractorsreportedhavingdeclinedtoworkwithaDBEforreasons
otherthantheircertification.[Interviewees#CON:3,9,14,13,15,17,19,22,34,53].
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,reportedthathehasneverrefusedtoworkwithaDBE,anddoesnotspecifically
knowofthathappeningwithanyotherprime.Hestatedthatwhatmighthappenisthatthere
mightbeoneortwopeoplewithintheDBEfirmwhotheprimecontractormightnotlike.The
primecontractormayrequestthatparticularpersonnotparticipateintheproject.Hestatedthat
thisismuchmorelikelythanrefusingtoworkwiththeDBE.Hedoesnotbelievethatanyofhis
colleagues,eventhemostprejudicedwouldnotworkwithaDBEbecause,forinstance,theydo
notbelievewomenshouldbegeologists.Interviewee#CON3statedhedoesnotbelievethatkind
ofthingwouldhappen.Hedoesthinkthattherearesituationswheresomeoneinsidethefirm
wouldcauseyounottoworkwiththatperson,butnotthefirmingeneral.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
hehasdecidedtoworkwithonefirmoveranother,butitwasnotrelatedtoafirmsDBE
certification.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehadturneddownteamingopportunitieswithboth
DBEsandnonDBEsinthepast.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,couldnot
rememberwhetherhehadeverrefusedtoworkwithaDBE.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompanyhassometimesrefusedtoworkwithDBEs,butitisabusinessand
financialconcern,notbecauseoftheircertificationstatus.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatshehas,inthepast,refusedtoworkwith
DBEcompaniesbecauseoftheirbusinessethics,butnotbecauseoftheirstatusasa
disadvantagedbusiness.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatherfirmhasrefusedtoworkwithaDBEinthepastonlybecause
thecompaniescouldnotcometoterms.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatshehasneverrefusedtoworkwithaDBEbasedontheirDBEstatus.She
statedthatthedecisiontonotworkwithaDBEwouldhavebeenbasedontheirworkandnot
theircertification.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,reportedthathemayhaverefusedtoworkwithaDBEiftheydidnotproduce.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE84

Minorityandfemaleownedbusinessperceptionsofbeingutilizedbyprime
contractorsinthepublicandprivatesectors.
Someminority andfemaleownedbusinessreportedthatthesameprimecontractorsutilize
themintheprivateandpublicsectors.[Interviewees#CON:1,9,14,15,20,22,23,28,33,36,
45,49,CONTA#1,2].Interviewee#CON1,anonDBEHispanicAmericanmaleownerofan
electricalcontractingfirmintheSanDiegoarea,reportedthatthesameprimecontractorsutilize
hisbusinessinboththeprivateandthepublicsectors.Interviewee#CON1statedthathehasnot
recentlybeendirectlyimpactedbyaprimecontractorrefusingtoworkwithhimbecauseheisa
minority,butheissurethatthatconditionstillexistsinthefield.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
thesameprimecontractorsusehisbusinessbothintheprivateandthepublicsectors.
Interviewee#CON9statedthereisnonotabledifferencebetweenbeingutilizedonConsortium
andnonConsortiumpublicsectorprojectsorprivatesectorprojects.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,rarelydoesworkintheprivatesector,buthecontinuestogetregular
callsfromthesameprimecontractorsinthepublicsectorforworkhisbusinessisvery
competitive.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatshehaspursuedworkwithprimecontractorsinthe
privatesectorandreportedthatthesameprimecontractorsuseherfirminthepublicandthe
privatesectors.Shestatedthatthisisduetoherfirmsworkhistoryandpastperformance;she
instructsherteamthateveryprojectisamarketingtool.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatthesameprimecontractorsutilizeherfirminthepublicand
privatesectors.Sheattributedthistoherongoingrelationshipsandexperiencewiththework
proposed.Shestatedthatshehasattemptedtoworkwithprimecontractorsintheprivate
sector.Shestatedthatsheissolicitedforpricequotesonprivatesectorjobsapproximately30
40percentofthetime;theseprojectsdonothavegoals.Shestatedthatthesesolicitationsresult
inworkapproximately60percentofthetimeandthetypeofworkisthesameasitisinthe
privatesector.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,reportedthatthesameprimecontractorssometimesutilizetheminthepublic
andprivatesectorsduetotheirreputation,work,andperformance.Hehasattemptedtowork
withprimecontractorsintheprivatesector.Hestatedthattheyaresoliciteddailyforprice
quotesonprivatesectorprojectsthatcomeinonthefaxmachine;hedidnotknowwhetherthe
privatesectorprojectshadgoals.Hestatedthatthesesolicitationsresultinwork5percentof
thetime.Theyperformhaulinganddemolitionworkintheprivatesector.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,reportedthatsameprimecontractorsutilizehisbusiness
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE85

inthepublicandprivatesectors.Hestatedthatthisisduetohisnumberofyearsinbusiness,
credibility,relationshipsandprofessionalism.Hestatedthathiscompanyalwayspursues
projects.Hestatedthattheprivatesectorprojectsdonotgenerallyhavegoals,andsolicitations
fromprimecontractorsresultinworkapproximately50percentofthetime.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
reportedthatthesameprimecontractorsutilizeherinboththepublicandprivatesectorsand
thisutilizationisbasedonherqualifications.Shereportedhowever,thatalthoughprime
contractorsalwayssolicitherforpricequotesonprivatesectorprojects,thesesolicitations
rarelyresultinwork.Shestatedthatshehasattemptedtoworkwithprimecontractorsinthe
privatesector,however,theseattemptshavenotbeenverysuccessful.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatitdependsupontheprimecontractorwhethertheyutilizeherin
boththeprivateandpublicsectors.Shestatedthatshetriestomaintainherrelationshipssothat
shecangetworkandgoodreferrals.Shestatedthatshehasattemptedtoobtainworkwith
primecontractorsintheprivatesectorandshesendsoutlettersandanewsletterthatshehas
developed.SheisnotsolicitedveryoftenforworkonConsortiumprojects.Shestatedthatshe
hasnotreceivedmanysolicitationsorworkresultingfromsolicitationslatelyandwasnotsureif
thatwasattributabletoincreasedcompetitionorifthingswerechanging.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatthesameprimecontractorsutilizeheracrossthepublic
andprivatesectorsandstatedthatshereceivesalotofreferralsduetothequalityofherwork.
Shestatedthatintheprivatesectorsheisfrequentlysolicitedtoworkonprojectsandmanyof
theseprojectshavegoalsbecausetheyreceivefederalfunding.Shestatedthatthesesolicitations
resultinworkalmostallofthetimeandshereceivesgoodworkfromtheprimecontractor.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedthatthesameprimecontractorsutilizehisfirmacrossthepublicandprivate
sectors.Hestatedthatthisisduetothequalityofhisworkandhiscompanysreputation.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatprime
contractorswhobuildarelationshipwithasubcontractorwillusethatsubcontractorontheir
publicsectorandprivatesectorjobsbecauseofthetrustfactor.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatonceaDBE
subcontractorbreaksinandestablishesarelationshipwithaprimecontractorinthepublic
setting,thesubcontractorgenerallystaysinwiththeprimecontractor.
Someminorityandfemaleownedbusinessesreportedthatthesameprimecontractorsdonot
utilizethemintheprivateandpublicsectors.[Interviewees#CON:2,4,12,13,16,17,21,24,
26,27,29,30,31,32,35,37,38,40,47,48,50,51].Interviewee#CON2,aDBEcertifiedAfrican
AmericanmalestructuralengineerintheSanDiegoarea,statedthatthereisadifference
betweentheprimeconsultantswhousehimintheprivatesectorandthosewhousehiminthe
publicsector.Hestatedthattherearearchitectsanddeveloperswhostrictlygoafterpublic
sectorworkandtherearesomethatonlygoafterprivatesectorwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE86

Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasneverreallyconsideredwhetherthesameprime
contractorswhousehiminthepublicsectorusehimintheprivatesector.Forexample,henoted
workingwithaprimecontractorthatonlyutilizeshisfirmforpublicsectorwork,althoughheis
awarethattheprimecontractoralsodoesworkintheprivatesector.Interviewee#CON4stated
thatsomeofthelargeprimecontractorsdoprivatesectorworkbutneverusetheDBEsforthat
work.Interviewee#CON4statedthathesuspectsprimecontractorsusehimonpublicjobs
becausehiscompanyhasbeenaroundlongenoughandhasagoodrelationshipwiththepublic
agenciessotheprimemayincreaseitschancesofwinningabidifitusesInterviewee#CON4on
thepublicsectorwork;incontrast,hestatedthatthereisnobenefittotheprimecontractorfor
usingInterviewee#CON4sfirmintheprivatesector.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatthesameprimecontractorswhousehiminthepublicsectordonotusehiminthe
privatesector.Hestatedithasbeenclearlymarkedthattheyonlyworkfortheirpublicsector
primecontractorsinthepublicsectorusuallybecauseofthediscipline.Hestatedthatinthe
privatesectortheyareworkingforarchitectswhereasinthepublicsectortheyareworkingfor
engineers.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthattheprimecontractorsthatheworkswithfocustheir
activityinthepublicsector.Interviewee#CON13statedthatthereisnodifferenceastobeing
utilizedonConsortiumandprivatesectorprojects.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatwhenthecompanyfunctionsasasubcontractor,thesameprime
contractorsdonotusehiminthepublicandprivatesectorsbecausethenatureoftheworkis
different.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthattheprimecontractorsdecisiontousehis
firmacrossthepublicandprivatesectorsdependslargelyonthemercyoftheprojectmanager.
Interviewee#CON17sbiggestconcernisthatsometimestheteamswhomakeproposalsarenot
theteamsdeliveringtheprojectthismakesbusinessverydifficultasasubcontractor.
Interviewee#CON17statedthatthisdisconnectleadstobrokenpromisesandunderstandings
fromthetimeofproposaltojobexecution.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatthesameprimecontractorswho
utilizeherbusinessinthepublicsectordonotuseherbusinessintheprivatesector;she
assumesthatiftheopportunitypresentsitselftheywould.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatthesameprimecontractorswhouseherinthepublicsectordo
notuseherintheprivatesector.Shedoesnotknowwhy,butstatedthattheprimecontractors
havetheirownrelationships.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE87

Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatthesameprimecontractorsthatuseherinthepublicsectordonotuseherinthe
privatesector;shestatedthattheydonotdosobecauseitisnotrequired.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,reportedthathehastriedtoworkwithaprimecontractorintheprivate
sector,buttheseeffortshavenotbeensuccessful.Hestatedthatsomeoftheprivatesector
projectshavegoals.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthathedoes
notdoanyworkinthepublicsector,andhedoesnotknowhowtofindprimecontractorswho
needsubcontractors.Hestatedthatheissolicitedforworkeverydayonprivatesectorprojects
butbusinesshasbeenslowoverthepastyear.Hestatedthatintheprivatesectorthegoalisto
gettheprojectdoneascheaplyaspossible.Hestatedthatbecauseofhisethnicityheis,many
times,expectedtodotheworkfordirtcheap.Hegavetheexampleofaprojectthatshouldhave
cost$10,000.Atthattime,thatwasthegoingrateanditwouldhavecoveredhiscostsaswellas
paidhisemployees.TheprimecontractorcutthestaffandInterviewee#CON29eventuallycut
hispriceinhalfto$5,000justtokeepthejobandpayhismen.Hestatedthattheywanthimto
workascheaplyaspossiblewhilekeepingthecredibilityoftheprojectandthatisveryhardto
do.Hestatedthatmostofhisworkcomesthroughrelationshipsandreferrals.Hestatedthat
peoplewantthejobdonewellandhewilldiscussthepriceatthebeginningoftheproject.He
statedthatsolicitationsalmostalwaysresultinwork;itisveryrarewhenhereceivesacalland
doesnotgetthejob.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthesameprimecontractorsdonotusehisbusinessinboththepublicand
privatesectorsforasimplereason:itisnotrequired.Hestatedthatthegoalsonprivatesector
projectsaredifferentandnormallydonotrequirethataDBEbeapartoftheteam.Hestated
thathedoesnotgetmanycallstoperformworkintheprivatesector.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathedoesnotdoworkintheprivatesectorveryoften.Hestatedthat
theoverheadandtheinsurancearetooexpensivetomaintain.Hestatedthatworkinginthe
privatesectorcomeswithalotofriskandexposuretoasignificantamountofoverheadeven
whenbusinessisslow.Hestatedthathisattemptsatseekingworkwithprimecontractorsinthe
privatesectorhavenotbeensuccessful.Interviewee#CON31statedthatprimecontractorsoften
solicithimforworkintheprivatesectorbutthesesolicitationsrarelyresultinwork.Hestated
thathesubmitsresponsiblepricequotesonbidsthatinteresthim.Hestatedthatmostofhis
workcomesthroughrecommendationsfrompreviousworkandnotthroughsolicitations.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathehastriedtoworkwithprimecontractorsintheprivatesectorbuthe
keepsgettingtherunaroundandhasbeenunsuccessfulinthatregard.Hestatedthattheydo
receivesolicitationsfromprimecontractorsintheprivatesectorbutitisnotoften.Hestated
thathehadnothitthenailontheheadyetintermsofgettingworkintheprivatesectorbuthe
willkeeptrying;hedoesnotknowwhytheyhavenotreceivedworkyet.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE88

Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatthesameprimecontractorsdonotuseherinthepublicandprivate
sectors(althoughshereportedactingasaprimecontractor100percentofthetime).Shestated
thatshehastriedtoworkwithprimecontractorsintheprivatesectorbuttheseeffortshave
beenunsuccessful.Shestatedthatshehasanalliancewithalargefirmandsheisincludedin
sharepricingforRFPs.Shestatedthatontheinstanceswhenshehasbeensolicitedforworkin
theprivatesector,itwasonprojectsthatdidnothavegoals.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatthesameprimecontractorsdonotusehiminthepublicandprivatesectors.He
statedthatheassumestheprimecontractorsareutilizingdifferentfirms.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthatthesameprimecontractorsdonotuse
himacrossthepublicandprivatesectors.HebelievesitisbecauseoftheGoodOldBoy
Network.Hestatedthathewillcontinuetotrytoobtainworkintheprivatesector.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthatprimecontractorsneversolicithimforpricequotesintheprivate
sector.Hestatedthatprimecontractorshavetheirownteamandonlyutilizehisbusinessor
otherDBEswhenitisrequiredandtheyreceivepointsorothercredit.Hestatedthathehasnot
attemptedtoobtainworkwithaprimecontractorintheprivatesector.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathehastriedtoobtainworkwithprimecontractorsintheprivatesectorbutthe
sameprimecontractorsdonotutilizehisfirmacrossthepublicandprivatesectors.Hestated
thatheisnotoftensolicitedforworkonConsortiumprojects.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthattheprimecontractorswhousehiminthepublicsectordonotuse
himintheprivatesector.Hestatedthatthisisdueinlargeparttothefactthatthereisnota
[DBE]requirementintheprivatesector;hestatedthattheprimecontractorsutilizetheirown
networkofsubcontractorsforprivatesectorprojects.Hestatedthathenolongertriestoobtain
workwiththepublicsectorprimecontractorsintheprivatesector.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthattheprimecontractorswhoutilizehiminthepublicsectordonotutilizehisfirmin
theprivatesector.Hestatedthattheprimecontractorsthatusehisfirminthepublicsectordo
sobecauseofthemandatoryrequirements;hestatedthathehasstoppedtryingtoseekwork
withprimecontractorsintheprivatesectorbecauseitisnotanefficientwaytorunhisbusiness.
Hestatedthatprimecontractorsdonotsolicithisfirmintheprivatesector.Hestatedthat
privatesectorprojectsdonothavegoals,whichmakesithighlylikelythatthisistheprimary
reasonthathedoesnotgetworkintheprivatesector.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthatthesameprimecontractorsdonotutilizehisfirm
acrossthepublicandprivatesectors.Hestatedthathehastriedtoobtainworkintheprivate
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE89

sectorwiththosefirmswhohaveutilizedhiminthepublicsector,butthishasnotbeen
successful,hebelieves,becausethosefirmsarenotrequiredtousehimintheprivatesector.
Someminority andfemaleownedbusinessesreportednotseekingoutworkfromprime
contractorsintheprivatesector.[Interviewees#CON:18,25,26,30,40].Interviewee#CON18,
awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,couldnotthinkofaprivate
sectorprojectonwhichshehasfunctionedasasubcontractor.Asasubcontractoron
Consortiumprojects,though,Interviewee#CON18recountedapositiveexperience.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathehasnotreallyattemptedtogainmuchworkintheprivatesectorbasedonhis
experienceinnotreceivingtheworkandtheprimecontractorsstickingwithintheirownGood
OldBoyNetwork.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatherarelyattemptstoobtainworkfromprimecontractorsintheprivatesector.He
statedthatprimecontractorsdonothaveanyreasontosharethewealthbecausethereisno
mandatetodoso.Healsostatedthatheisrarelysolicitedbyprimecontractorsonprivatesector
projects.Hestatedthathebelievesheonlyreceivessolicitationsbecauseofsomethingspecific
thathedoes,orhebelievesitisprobablypolitical.
Mostintervieweesreportedthataprimecontractorhasnotandwouldnotrefusetowork
withthembecausetheyareaDBE,however,aprimecontractormayhaverefusedtowork
withthemforotherreasons.[Interviewees#CON:2,9,10,12,15,17,21,22,23,24,25,26,27,
28,29,30,31,32,34,35,36,38,40,42,43,44,45,47,48,49,51,CONTA#1,2].Interviewee
#CON2statedthathewouldnotsaythataprimeconsultanthasrefusedtoworkwithhim
becauseheiscertifiedwithCaltrans,butheisturneddownbyarchitectsonaroutinebasis.He
statedthatthisisnotbecauseheisaDBE;thearchitectsarenoteveninterestedinknowingifhe
isaDBE.Hestatedthatheisoftenturneddownbecauseoftherelationshipbetweenthe
architectandtheengineerthatarchitecthasbuiltarelationshipwith.Hestatedifanarchitect
hasbeenworkingwithacertainengineer,thearchitectoftenwantstocontinueworkingwith
thatengineer.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatnoonehassaiddirectlytohisfacethathewouldnotreceivea
contractorworksimplybecauseofhisDBEstatus.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathedoesnotthinkaprimecontractorhaseverrefusedtoworkwithhim
becauseheisaDBE;atleastnoonehaseversaidthatormadehimfeellikethatisthereason.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,statedthatheisconsideredforworkbecauseofhiscredibility;hedoes
notbelievethatthisconsiderationhasbeenaffectedbyhisDBEstatus.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthataprimewill
neverrefusetoworkwithaDBE,butinsteadwilluseaDBEforasmalleramountorwill
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sometimesstatethatitisusingaDBEandchangetoanothersubcontractor.Hestatedthatthis
occurredasrecentlyastwotothreeyearsago.CONTA#1statedthattheincidentwasnot
reportedbecausehedoesnotknowwhoyouwouldreportitto.
Acoupleofintervieweesreportedfeelingasthoughaprimehadrefusedtoworkwiththem
becausetheyareaDBE.[Interviewees#CON:16,37].Interviewee#CON16,aHispanic
Americanmaleownerofavalueaddedsupplyandsystemintegrationfirm,notedthatwhileno
companyhaseverspecificallytoldhimthathisDBEstatusprecludedthecompanyfromgetting
work,hehasbeenblownoffandheknowsthatisactuallythecase.Thecompanymakesstrong
efforts,butlargecompanieswillgenerallyendupusingwhoevertheywant.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathefeelsthataprimehasprobablyrefusedtoworkwithhimbecauseheisDBE,but
hedidnotknowit.Hestatedthatnoonehassaiditoutrightbutitismoreorlessafeelingthat
hehas.
Someintervieweesreportedthattheydidnotknowwhetheraprimehadeverrefusedto
workwiththembecausetheyareDBE.[Interviewees#CON:4,18,50].Interviewee#CON4,a
DBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirmintheSanDiegoarea,
statedthathehasnoideawhetheraprimehaseverrefusedtoworkwithhiscompanybecauseit
isaDBE;hestatedifso,theprimewouldneversayso.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,did
notknowwhetherprimecontractorshaverefusedtoworkwithherbecausesheisaDBE
manyprojectsfailtomaterialize.
D.TheBiddingProcess
BGPAAStudyAnecdotesRegardingtheAirportAuthoritysBidding
Process
ExperienceswiththeAirportAuthoritysbiddingprocess.
SomeintervieweesreportedneutralorpositiveexperienceswiththeAirportAuthoritys
biddingprocess.[Interviewees#BGP:1,2,5,9,11,14,16].Interviewee#BGP2,thesales
managerofanAsianAmericanownedMBE/WBE/DBEcertifiedmaintenanceandrepairfirm,
saidthattheAuthoritysbidprocessisprettyeasy.Hesaidthatthereisnodifferencebetween
theAuthoritysbidprocessandotherpublicagencies.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firm,reportedthattheAuthoritysbiddingprocessislikeanyotherpublicworksprocess.He
said,Icantsaythattheyareanybetteroranyworse.Interviewee#BGP9addedthat,The
Airportisnotasbadastheschoolsandcolleges.Whenyougettothecollegeprojects,youhave
todoallthatpaperworkforthebondandforthePLA(laboragreementwiththeunion).Thatis
crazy!
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Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthattheAuthoritysbiddingprocesswassimilartootherpublicagencies.Hesaid
thattheAuthoritysbiddingprocesswasprobablyalittlebitmorethoroughinallofthe
requirementsthanwefacedeverbefore.Headdedthattheprocesswasverylengthy,butit
wasprofessional,andhefelt[that]allofthequestionsthatwereaskedwerefair.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthattheAuthoritysbiddingprocessisprettymuchlikeanyotherentity.Hesaidthat
itisdifficultforsmallcompaniestorespondtothevoluminouspaperworkrequiredinpublic
projects,sothecompanyoftenrequestshelpfromotherentities,suchasNativeAmerican
groups.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
statedthatmostofthecorporationsworkwiththeAuthorityisobtainedthrougha
qualificationprocess,notabiddingprocess.Hesaidthathisexperiencewiththisprocesshas
beenverygoodandcommentedthathethinkstheyvebeenfair.Headdedthatthe
corporationhasbeenworkingwiththeAuthorityfor14years.
SomeintervieweesreportedchallengesinconnectionwiththeAirportAuthoritysbidding
process.[Interviewees#BGP:4,6,10,13,TA#1,TA#2].Interviewee#BGP4,aprojectmanager
ofaWBEcertifiedconstructionfirm,said,Whenwedofederalandmilitarywork,weusually
gettonsoffeedbackonabid.InregardtotheAirport,nothingeverfiltersbacktous.Theres
zerofeedbackandzeroreasonswhy[wedidntwinthebid].Wedontknowwhywerenotbeing
used.Hesaid,Thepeoplewhorunthe[acertainAirportAuthorityprogram]areinfamousfor
collectingallthebidsthenthrowingthemalloutandrebiddingthewholeproject.Itsnotfair.
Letssaythefirstfirmhasaproblemwiththeirbid,thenitshouldgotothesecondfirm,but
instead,theylldeclareeveryonenonresponsiveandthroweverybidout.ThissavestheAirport
abunchofmoney,becausetheyknowallthefirmsarejustgoingtobrowbeateachotherover
money.Allthatdoesishurtfirmslikeours.Hesaid,Therehasbeensomerealoutcryoverhow
theAirporthasdeclaredfirmsnonresponsive.Therewasawhilewhennoonewantedtobid
theAirportanymore,becausetheyfeltlikealltheyregoingtodoistakeourbidsandthrow
thembackouttosaveabunchofmoney.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatYouhavetobespecificallyontheAirport[Authoritys]list.Theyhavetheirown
SBEorWBEqualifications,andIdidnotknowthat.Thatisnotpublishedvery[clearly].
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatitsexperiencebidding
withtheAuthorityhasbeen[n]otgoodandgettingworse.HesaidthatinCalifornia
professionalserviceprovidersaresupposedtobeselectedonthebasisofqualifications,and
contractorswhoconstructthingsaresupposedtobeselectedonthebasisofprice.Interviewee
#10statedthattheAuthorityismoreandmorefrequentlyselectingprofessionalservice
providersonthebasisofpricealone,andthelowbidgetstheproject.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,statedthatinthe
Authoritysbiddingprocess,thelownumbergetsthejob,anditsbondedwork.Headdedthat
bidcompetitionhasincreasedsignificantlyrecently,butwhenheseesprojectsgoingto10,20,
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30percentbelowyourcost,youknowthatpersonisprobablynotprepared[for]thatproject,
buttheyreawardedtheproject,anditsbonded,butgenerallyyoudontseethatcontractor
again.Hestatedthatthenumberofbiddershasdoubledwithinthelastcoupleofyears.Hesaid
wherebetweenfiveandsevencontractorswerebiddingbefore,nowheisseeing15to20
contractorsbidding.HesaidthattheAuthorityhaspushedtotrytokeeptheworklocal,but
lownumbersstillrule.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thattheAuthorityseemstowritecontractspecificationsforparticularfirmsandthathis
organizationhasexpressedthisconcerntotheAuthority.Hesaid,Whatwesaidtothemisthat
thespecificationsthatarewrittenarewritten[foraparticularfirm]togetthejob.Thatsa
nono.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,describedtheAuthoritysbiddingprocessaskindof
unfavorable.Hesaid,Wellthenotificationprocess,theoutreachprogram[are]noteffective.
Hesaidthatbundledprojects,makeitharderforsmallerbusinesstohaveapartintheproject
[when]theresnorequirementfor2ndand3rdtiercontractors;itisflawedduringthedesign
process.Hesaidthatifyouhavea$20milliondollarcontractthentheresnowaythatyou
shouldjustdothewhole$20million;youshouldpartnerinandhaverelationshipswithsmaller
SBA,MBE,youknowcompanies,Ithinkthatswhatthemainproblemis,itsnotsolicited
correctlyorfavorably,youknowfairbecauseifyoudonthavethebigmoney,thebigbonding
youknowthenyoureoutandtheresnorequirementtoutilize.Theycouldsay,wewantyoutoo,
buttheyrelike,wellwecantfindanybody.
AcoupleofintervieweesreportedlimitedornoexperiencewiththeAirportAuthoritys
biddingprocess.[Interviewees#BGP:12,15].Interviewee#BGP12,ageneralmanagerandan
accountmanagerofaWBE/DBEcertifiedconstructionsupplyfirm,reportedthatthecompany
hasverylittleexperiencesupplyingorworkingwiththeAuthorityandhasnotbidsignificantly
onprojectswiththeAuthoritybecauseithasnotfoundmanyprojectsthatmatchthescopeof
workthatthecompanyusuallyperforms.Interviewee#12saidthattheydidnothaveany
experiencewiththeAuthoritysbiddingprocess.Theysaid,Iwishwehad;Iwishtherewas
more.Theysaidthattheyhavehadexperiencewiththebiddingprocessassociatedwithother
publicagenciesinthetransportationindustryintheLosAngelesarea,particularlyCaltrans,and
thatexperiencehasbeenverypositive.Theyaddedthat[d]uetobudgetconstraints,
sometimestheyareslowtoaward,butthatsunderstandable.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshedoesnotremember
anythingabouttheAuthoritysbiddingprocessbecauseshethinksthattheAuthoritygaveher
companyasolesourcecontract,soabiddingprocesswasnotrequired.Shesaidthatifshe
rememberscorrectly,thecompanyjustprovidedaquoteandthenissuedacontract.
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Notificationofopportunitiestobid.
SomeintervieweesreportedthattheAirportAuthorityhasgoodnotificationproceduresin
placetonotifyindividualsofopportunitiestobid.[Interviewees#BGP:2,4,5,9,10,13,16].
Interviewee#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBEcertified
maintenanceandrepairfirm,saidthattheAuthoritycallsthemaboutjobopportunities.
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthatInterms
ofnotificationandaccesstoplans,thatsallgreat.Itsveryaccessibletogetinvolvedinthebid
process[withtheAirportAuthority].Comparedtootherairports,thatsverygood.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatoccasionallywe
gothroughanRFPprocess,buttheAirportusuallycontactsusdirectly,andweprovidea
proposal.HesaidthattheAuthorityadvertisesbidopportunitiesandthatalsonotify
competentpeoplethattheyhaveapastrelationshipwithtonotifythemthatprojectsarecoming
upandaskthemtobidonit.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmstated,Ihaveneverbeennotifiedofanybid.Theyjustcallmeupandaskmetobid.Inever
getemailnotificationsormailornothinglikethat.IguessbecauseImtheirvendorofchoice,
theyjustcallmeupandaskforabid.
Interviewee#BGP10,aprincipalatanengineeringfirm,commentedthattheAuthorityprovides
adequatenotificationregardingopportunitiestobidorpresentproposals.Hesaidthathedoes
notrememberexactlyhowtheAuthoritynotifiesthepublic,butthefirmsubscribestoa
marketingserviceandwhenarequestforqualificationsisreleased,themarketingservice
notifiesthefirm.Hesaidthatthefirmusuallysubmitsitsqualificationsbutdeclinestosubmita
pricequotebecausethefirmisgoodatwhatitdoesandisnotthecheapestfirmaround.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatheisadequately
notifiedofopportunitiestobidwiththeAuthority.Hesaidthatthecompanyisregisteredwith
[theAirportAuthoritys]businessopportunitiesontheirwebsite,so[thecompanywill]
generallyfollowuponthattoseewhatsgoingonand[remain]uptodate.Hesaid,Wealso
readthepaperandseethingsposted[there],andbecause[thecompanyisattheairportso
often,ithas]ageneralairofwhatsgoingonattheairportandwhatscomingup.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthathewasnotifiedaboutopportunitiestoworkwiththeAuthorityeitherbywordof
mouththroughemployeesthatarecurrentlyworkingthereorbyemailsorbyadvertisements
inthetypicalvenueslikethenewspaperorjournalsorwhatever.Hesaidthathethinksthat
theseadvertisementsandemailsaredistributedbytheAuthority.
Otherintervieweesreportedchallengesinconnectionwithlearningofopportunitiestobid.
[Interviewees#BGP:1,8,12,14,TA#2].Interviewee#BGP1,theAfricanAmericanmaleowner
ofanMBE/DBEcertifiedarchitecturefirm,saidthatinregardtotheAuthoritysregistration,it
hasntbeenhelpfulyetforus.Hesaidthatinthepastsixmonths,hehasonlyreceivedtwoe
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mailsfromtheBurbankAirportregardingpotentialwork,butthatmay[be]thatsjustallthey
have,soIcantreallysaythattheyarentsendinginformationaboutprojectsthattheyhave.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatitmightbemoredifficulttolearnaboutworkopportunitieswiththeAuthority
becausethefactthatwehaventheardanythingorhaventbeencontactedandhaventseen
anythingpublicized;itprobablyis[hardertolearnaboutworkwiththeAirportAuthority].
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,reportedthatthecompanydoesnotreceivenotificationfromthe
Authorityregardingpotentialworkopportunities.Interviewee#12reportedthatsome
agenciesaremuch,muchbetterthanothersatnotifyingcompaniesaboutpotentialwork
opportunities.Theyadded,Weseemoreandmoreprojectsbeingadvertised,evenonsmall
municipalities,smallertowns.Theyregettingitright.Sometimestheirwebsitesaretoughto
navigate.Theyseemtobemakingimprovements.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thattheresnonotificationmethodconcerningjobswiththeAuthority,soyouhavetosearch
forit.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthathismembershavemissedopportunitiestobidon
Authorityprojectsandotherpublicsectorprojectsbecausetheyhavenotbeennotifiedofthe
opportunitiestobid.Hesaid,Well,itsjustlikeyouknow,youguys,youknow,itslikewe
werentevennotifiedthataboutthisprogramandwejustbroughtthistotheirattention,
likeyoudidntnotifyus,sowedidnthaveanyparticipationbutwewerentnotifiedthatthere
wasaprojectgoingonmaybetherewasnostandardtoholdthegeneralcontractortouse
minorities.
SomeintervieweesreportedhavinglimitedtonoexperiencewiththeAirportAuthoritys
notificationofbidopportunities.[Interviewees#BGP:6,11,14].Interviewee#BGP6,the
presidentandmarketingcoordinatorofaWBEcertifiedengineeringfirm,said,Wedontreally
touchtheAirport[Authoritysbids].Wemostlyworkwiththeprime.Interviewee#6saidthat
Theprimecomestousaskingustobeontheirteam,andwesendthemourqualificationsand
ourrateschedule.ThentheysendintheirqualificationsandproposaltotheAirport.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,statedthathedoesnotrememberhowtheAuthoritynotifiedpotentialbiddersof
businessopportunities.HestatedthattheL.A.Airporthasasystemfornotifyingpotential
biddersaboutrequestsforproposalseverytimetheCityofLosAngelesreleasesanewrequest
forproposal.Hesaidthattohisknowledge,theAuthoritydoesnothavethatsystem,butit
wouldbeverybeneficialifitdid.HerecommendedthattheAuthoritycouldimproveits
communicationsconcerningavailablework,notonlyworkwiththeAuthoritybutalsowith
privateentitiesthatworkattheairport,sothatcompaniesmaylearnaboutopportunitiesthere.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatheisnotawareofnotificationsdirectlyfromtheAuthorityconcerningwork
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE95

opportunities.HestatedthatthecompanyisnotifiedaboutprojectsattheAirportAuthority
throughmanufacturersreps,orthemanufacturer.Hecontinued,Themanufacturerhas
representativesforourequipmentthatweinstall,andwhateverentityisseekingtheequipment
attheairportwillaskthemtorecommenddealers,andbecausetheyrelocalinthearea,theyll
recommend[ourcompany]andthreeothercompanies,ortwoothercompanies,tobidthe
project.
Knowledgeofprimecontractorsinterestinbid.
Oneintervieweereportedthatasubcontractorcandeterminewhichprimecontractorshave
expressedinterestinaparticularRFP.[Interviewee#BGP:16].Interviewee#BGP16,amanager
ofanoncertifiedengineeringandinformationtechnologyfirm,saidthatheisnotsurewhether
theAuthorityhasthis,butinpublicsectorwork,[a]lotoftimes,theresalistofpeoplethat
attendpresubmittalconferences,[and]youcangettheregistrationlist.Hesaidthatthisis
howthecompanygenerallylearnsaboutopportunitiestoworkasasubcontractor.
Otherintervieweesreportedthatsubcontractorsareunabletodeterminewhichprime
contractorshaveexpressedinterestinaparticularRFP.[Interviewees#BGP:11,12,13,TA#2].
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatthereisnowaytoidentifyopportunitiestoworkwithprimecontractors
untilacompanyattendsapreRFPwalkaroundwhenthecompanycansignupwithallofthe
interestedprimecontractors.Hesaidthathisfirmparticipatesinthesewalkaroundsbecauseif
youdonotattend,youreexcludedfromthebid.Interviewee#BGP12,ageneralmanagerand
anaccountmanagerofaWBE/DBEcertifiedconstructionsupplyfirm,statedthatsomeprime
contractorsadvertisetonotifypotentialbiddersaboutopportunities,butsomedonot.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,statedthathedoesnot
thinkthattheresanyspecificnotificationprocessregardingopportunitiestoworkwith
primes.Hesaidthathiscompanyisonlynotifiedofopportunitiestoworkforprimeswhen
somebodyiscontacting[thecompany]specificallyrequestingabidonaproject.Headdedthat
thecommunityisprettysmall,andtheairportisnotthatbig,sothecompanyisabletowork
offofgeneralknowledgeregardingwhomightbebiddingaproject.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthereisnowayforitsmemberstoknowwhichprimes
haveexpressedaninterestinanRFPunlesstheprimescontactthemdirectly.
Denialsofbidorpricequotesubmissionopportunities.
Someintervieweesreportedneverhavingbeendeniedtheopportunitytosubmitabidona
project.[Interviewees#BGP:1,2,6,9,11,12,13,14,15,16].
Afewintervieweesreportedinstancesinwhichtheybelievetheyweredeniedtheopportunity
tosubmitabidonaproject.[Interviewees#BGP:4,5,TA#2].Interviewee#BGP4,aproject
managerofaWBEcertifiedconstructionfirm,said,Itsoddtomethattheysinglesourcethe
materials.Thelasttwojobs,IdidntevenbothertobidbecausetheAirportsaid,Ithastobethis
one[typeofmaterial].Theylimitopportunity,andthatsfrustrating.Eventhoughmy
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[materials]functionidentically,Iveprobablymissedaquarterofamilliondollarsinwork,
becauseIwastolddontevenbothertobid.HesaidthattheAuthorityisnotreasonable.They
wontevensitdowntotalkaboutit.WhenIcall,theysay,Thatsjustthewayitis.Theydont
evenwanttoaddresswhatIhavetosay.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatthefirmhasbeen
deniedtheopportunitytobidbyaprimecontractor.Hesaid,Itsgenerallywhenyouhavea
verylargefirmthatislookingforminoritycontent.Wealsolostoneprojectbecausewelostour
smallbusinesscertificationlastyear.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheisnotawarespecificallyofhismembersbeing
deniedtheopportunitytosubmitabid.HesaidIdontknowaboutdenied.Idontknowthat
theyveevenbeendeniedtheopportunity,therejustwasntenoughtimetoprepareone,soif
youcouldsay,keepingontime,wecouldhave,thenweweredeniedtheopportunitiesbasedon
thetimelinethatwewerenotifiedandreceivedbiddingdocuments.
Recommendations.
Oneintervieweerecommendedimplementingchangestothebiddingprocessinordertomake
thebiddingprocessmoreaccessibletosmallbusinessesandDBEs.[Interviewee#BGP:11].
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,recommendedthattheAuthoritygivemoreconsiderationtoacompanywhohasbeen
workingfortheAirportAuthorityforseveralyears.
SomeintervieweesrecommendedthattheAirportAuthorityimplementrace andgender
consciousgoalsandsmallbusinesssetasidesinconnectionwiththebiddingprocess.
[Interviewees#BGP:TA#1,TA#2].IntervieweeBGPTA#1,theexecutivedirectoroftheYoung
BlackContractorsAssociation,saidthattherearenoprovisionsforsmallorminorityowned
contractorsinBGPAAprojects.Hesaid,Howcanyouleta[projectmanager]putnoprovisions
inthecontractthathesgoingtobeoverseeingfor$130million?Theresnoprovisionforsmall
businesses.Theresnoprovisionfordiversebusinesses.Theresnoprovisionforminority
businesses.Theresnoprovisionforlocalbusinesses.Ithastobeinthespecifications.He
said,Myrecommendation[totheAirportAuthority]wastotakeourlocalpeopleherefrom
PasadenaandBurbankandaddthemtotheteam.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,recommendedthatthepublicagenciesestablishcriteria
thatmustbeabidedtoinregardstominorities,smallbusinessesthatwouldeliminatethe
generalcontractorfrombeingawardedthecontractifhedidntcomplyInotherwords,when
youhavethisproject,youcomeinandyoulistyoursubsbecausewhathappensisthatthey
listusbutthentheygetholdofthecontractanddontutilizeusthathappensalot.Thatisa
commonpractice,sotheymeetalloftherequirementsandthenitsoundsreallygoodbutthen
whenthejobisawardedwenevergetthecall,likeIsaid,thathappensallofthetime.
Acoupleofintervieweesmadeotherrecommendations.[Interviewees#BGP:4,10].
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,said,Iwishwe
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couldchangethebidprocessinitselfbecauseitsalowbiddollarprocess,andthatisntalways
bestfortheAirport[Authoritys]orhomeownersinterests.Someofthesebidsaretoolow,and
whentheyretoolow,theyregoingtotakeshortcuts,andthoseshortcutsaregoingtocomeout
insomeoneshome.Maybethereshouldbeaminimumonbids,ortheprocessshouldbe
changedfromlowdollartotrueevaluationofthepackageandcontractorexperience.
Interviewee#BGP10,aprincipalatanengineeringfirm,recommendedthattheAuthoritypicka
firmbasedonqualificationsandnotopenthefeeuntilthefirmisselected.Hesaidthatthe
perceptionisthattheAuthoritywantsthefeeupfrontandmakesaselectionbaseduponthatfee.
Headdedthatmanyagencies,suchastheLosAngelesWorldAirportsandtheLosAngeles
CountyMetropolitanTransportationAuthority,willgothroughtheselectionprocess,selecta
firm,andthennegotiatethescopeoftheworkandassociatedfee.Hecommentedthathethinks
thatthisisapreferableprocessfortheagencyandfortheengineeringcommunity.
SDRCAAAnecdotesRegardingtheSanDiegoInternationalAirportBid
Process
ThefollowinganecdotesregardingtheSanDiegoInternationalAirportbidprocesswere
obtainedfrominterviewsthatthestudyteamconductedinconnectionwithBBCs2009SDRCAA
study.
Bidnotification.
IntervieweesreporteddifferentwaysinwhichtheyfindoutaboutAirportbidopportunities.
Interviewee#SD2,representingawhitefemaleownedfirm,saidthatherfirmfindsoutabout
Airportbidopportunitiesthroughprimecontractorswhosolicitherfirmforabidorthrough
publishedlistings(e.g.,TheDailyTranscriptandthroughtheAssociatedGeneralContractorsof
America).
Interviewee#SD27,representingawhitemaleownedfirm,saidthathisfirmfindsoutabout
AirportprojectsthroughpersonalrelationshipsthathehasmadewithAirportpersonnel.He
wentontosaythathedevelopedthoserelationshipsthroughworkingonAirportprojects,
attendingnetworkingevents,andonsitevisits.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedthathisfirmis
madeawareofAirportprojectsthroughthirdpartyemails.
SomeintervieweesindicatedthattheyusetheAirportswebsitetofindoutaboutbid
opportunities.Interviewee#SD21,representingawhitemaleownedfirm,indicatedthathe
findsoutaboutAirportbidopportunitiesbycloselymonitoringtheirwebsite:Forairportwork,
[thewebsiteis]thebestsource.Similarly,Interviewee#SD24,representingawhitemale
ownedfirm,andInterviewee#SD28,representingawhitefemaleownedfirm,bothsaidthatthe
Airportpostsprojectsontheirwebsiteandthattheirstaffmonitorittokeepawareofpotential
projects.
SDTA#3,representingalocalchamberofcommerce,indicatedthattheorganizationsmembers
findoutaboutAirportworkbywayofitswebsite.
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Adequacyofnotification.
SomeintervieweesreportedthattheSanDiegoInternationalAirportadequatelynotifies
potentialbiddersaboutbidopportunities.Interviewee#SD3,representingawhitemaleowned
firm,saidthatitiseasytostayinformedaboutAirportprojects.Hereportedthathisfirmspends
onedayeachweekreviewinganumberofdifferentsourcesprovidinginformationaboutbid
opportunities(e.g.,ebidboard,thebluebook,tradepapers,andemailsandfaxes).
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,reportedthatfindingout
aboutAirportbidopportunitiesisrelativelyeasy,becausetheagencyislocalandtheydoagood
jobofadvertisingtheirprojects.Indescribingthatprocess,Interviewee#SD20remarkedthat,
[TheAirport]letseveryoneknow[aboutavailableprojects]andthen[localfirms]compete.
Interviewee#SD4,representingawhitemaleownedfirm,statedthathehasnotroublefinding
outaboutAirportbidopportunitiesbecausetheyareadvertisedsowell.
AfewintervieweesreportedthattheSanDiegoInternationalAirportsRequestsforQuotes
(RFQs)andRequestsforProposals(RFPs)aretoocomplex.SDTA#2,representingaHispanic
Americantradeorganization,saidthatthelanguagethatpublicagenciesuseinRFPsandRFQs
istoocomplexandtheirrequirementsaretoostringenttogarnerawidenetworkof
competition:Thelanguageistootechnical.Forexample,onacontractthat[anMBE/WBEfirm]
wasbiddingon,theagencyrequiredthebiddingcompanyownabigrigtruck.[Thefirm]wanted
thiscontractsobadthattheywentandboughta$25,000truckbecausetheydidntknowany
better.Thepublicagencyultimatelysaidthebigrigwasnotnecessarytobidonthecontract
afterthefact.Thiscompanylost$25,000justonthebiddingforthisproject.SDTA#2wenton
tosuggestthattheremightbearacialcomponenttohowagencieswriteRFPsandRFQs:RFPs
arewrittentodeterapplicationsfrompeoplelikeus[i.e.,minorityandfemaleownedfirms].
Similarly,Interviewee#SD24,representingawhitemaleownedfirm,notedthatRFPsforall
publicagenciescouldbewrittenmoreclearly.However,hewentontosaythattheyarenot
overlyrestrictive.Interviewee#SD18,representingawhitefemaleownedfirm,saidaboutthe
AirportsRFPs,TheRFPlanguageisdifficultandthepackageissothick.
ExperienceswiththeSanDiegoInternationalAirportBidprocess.
SomeintervieweesreportedpositiveorneutralexperienceswiththeAirportsbidprocess.
Interviewee#SD4,representingawhitemaleownedfirm,saidthattheAirportsbidding
processisbetterthanthatofotherpublicagencies.Interviewee#SD4wentontoremarkthatit
iseasytolearnaboutAirportprojects,anditisfairlystraightforwardtoprepareabid.Similarly,
Interviewee#SD21,representingawhitemaleownedfirm,saidthatbiddingonAirportprojects
isgenerallystraightforward.
Interviewee#SD3,representingawhitemaleownedfirm,reportedthattheAirports
specificationsandbiddingproceduresareclearandstraightforward.However,Interviewee
#SD3addedthattheAirportdoesntknowhowtoadministeracontract.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE99

Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,indicatedthatwinning
workwiththeAirportisnoeasierorharderthanwinningworkwithanyotherentity.Headded
thattheprocessislargelydependentonbeingthelowbidderandunrelatedtoafirmsDBE
status.Relatedtothosecomments,Interviewee#SD36,representinganAfricanAmericanmale
ownedfirm,andInterviewee#SD38,representingaHispanicAmericanownedfirmalso
reportedthatpublicsectorcontractsalwaysgotothelowestbidder.Interviewee#SD37said,
[Publicagencies]takethelowbidderseverytime.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,alsoindicatedthat
winningworkwiththeAirportisnoeasierorharderthanwithanyotherentity:Youwinsome,
youlosesome.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,saidthathisfirmhas
beendoingworkwiththeAirportforapproximatelyeightyears.Hecharacterizedtheagencyas
organized,ashavingabigpictureplan,andasbeingadvocatesofqualitywork.Hesaidthatit
isapleasuretoworkwiththeAirport.
Interviewee#SD42,representingawhitemaleownedfirm,reportedthattheAirportwasquite
helpfulthroughoutthebidprocessofaprojectrelatedtotheQuieterHomeProgram:The
Authoritywashelpfultousthroughoutthebiddingprocess.Wewereprequalifiedthroughthe
MATOCprogrambutwereawardedasolecontractwiththeAirporttocompleteaphaseofthe
QuieterHomeProgram.Interviewee#SD42wentontodescribeAirportstaffassupportiveand
helpfulduringthebidprocess.
OtherintervieweesreportednegativeexperienceswiththeAirportsbidprocess.Interviewee
#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthatbiddingonworkwith
theAirportismoredifficultthanwithotheragencies:Therearemorehoopstojumpthrough
andmorepaperworktodealwith.Hewentontoreportthathisfirmhasathreeyearservice
contractwiththeairport,butthathewasdisappointedthatthecontractwasalsoawardedto
threeothercontractorswithwhomhehastocompeteforeachpieceofwork.Regardingthat
arrangement,Interviewee#SD16said,Itispossibletohaveacontractandnevergetajob.Why
aretherethree[contractors]?Itismisleading.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedthatother
contractorshaveinformedhimthatcertainAirportprojectsrequirefinancialcommitmentsthat
dissuadedhisfirmfrombiddingonthem:Ihavehadconversationswithothersintheindustry.
Theysaythatbeforetheystartwork,theyhavetobuythematerials,includingwindows.Asa
result,thecontractorsarespending$250,000beforetheyhaveevenbegunworkontheproject.
Interviewee#SD4,representingawhitemaleownedfirm,indicatedthatthedetailrequiredin
theAirportsbiddingformisburdensome(e.g.,unitpricing).Hewentontosaythathewould
preferitiftheAirportwouldhavemoreconcernforcontractorsprofitsratherthanonlybeing
concernedaboutsavingmoney.
Interviewee#SD18,representingawhitefemaleownedfirm,indicatedthattheAirportsbid
processisverycumbersome:Theamountofpaperworkin[theAirports]bidpackageisover
100pages,inadditiontothesecuritycheck.Ittakesalot.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE100

Similarly,Interviewee#SD37,representingawhitemaleownedfirm,saidthatincomparisonto
otherpublicagencies,itishardertobidworkfortheAirportbecauseoftheincreasedsecurity
restrictions:WehavetogothroughTSAtogetabadge,etc.Wehavesevenmenwhoare
authorizedtogoinrestrictedaccessareaslikebehindcounters,baggageareas,etc.,butifthose
sevenguysareonapreexistingjob,thenwecantbidonthework.
Interviewee#SD17,representingawhitefemaleownedfirm,characterizedtheAirportsbid
processastimeconsumingandasoftenbeingasourceoffrustration:The[bid]processisvery
timeconsuming.Alotoftimesbidsaretimeconsumingandendupgoingnowherethisis
frustrating.
Interviewee#SD31,representingawhitemaleownedfirm,indicatedthat,inhisexperience,the
Airportisneitherhelpfulnorresponsiveinaddressingtheconcernsofcontractors:Iattended
oneoftheirDVBEoutreachprogramsmetwithallkindsofpeoplefromtheAirport,sent
emailsTheydidntevenreplytomyemails,evenafterImetthematanoutreachprogramand
theysaidContactme.Hecontinued,Ivefoundatleastwithotheragencies,eveniftherewas
nothinggoingon,Iwasatleastgivenareplytomyemail.
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatshehasattendeda
numberofoutreacheventsthattheAirporthosted,buthasnotyetsubmittedabidbecausethe
ideaofbiddingwiththeAirportisoverwhelming.Shesaid,Theygiveyoualotofpamphlets
andinformationand[haveyou]gototheirwebsite.Itseemslikeyouconstantlyhavetokeep
goingtoworkshopsandtoseminars.Itseemslikeitsdifficulttogettheprocessgoingwith
them.
SDTA#11,aveteranstradeorganization,saidthatthereistoomuchpaperworkandhassle
associatedwithbiddingonpublicsectorprojects,particularlywiththeairport.
Similarly,SDTA#1,representingalocalchamberofcommerce,hasheardspecificcomplaints
fromtheorganizationsmembersaboutwinningworkwiththeAirport:Therehavebeen
memberswhohavevoicedfrustrationwithgettingworkattheairport.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,expressedconcerns
abouttheAirportawardingQuieterHomeProgramcontractstothesamefewfirms.Hesaid,I
thinkitsnotafairandequitable[process],butImeanyoureallycantsaythatbecauseifitsthe
lowbidderwhohasbeenfortunateenoughtohavewonsixbidsinarow[but]itdoesntgive
[smallfirms]theopportunitytogetinthereedgewiseandtrytosubmitsomething.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE101

RecommendationsrelatedtotheSanDiegoInternationalAirportbidprocess.
AfewintervieweesofferedrecommendationsregardingtheSanDiegoInternationalAirports
biddingprocess.Interviewee#SD2,representingawhitefemaleownedfirm,saidthatshe
wouldliketoseeasysteminplacebywhichshecandeterminewhichfirmstheAirportactually
usesontheirprojects.
Interviewee#SD19,representingawhitemaleownedfirm,recommendedthattheAirport
simplifyitsbidprocessanditsinvoicingprocedures.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,suggestedthatthe
AirportdownsizeQuieterHomeProgrambidpackagesfroma$2.5millionrangetoa$1.5
millionrangeinordertoincreasecompetition.
SDTA#6,representinganAsianAmericantradeorganization,reportedthattheAirportcould
improvehowitdisseminatesinformationaboutavailableprojects,howfirmscanbecome
qualifiedtobidonthoseprojects,andhowfirmscanbecomeDBEcertified.
Similarly,SDTA#4,alocalchamberofcommerce,indicatedthattheAirportshouldimprove
contractorsaccesstoinformationaboutprojectguidelinesandalsoofferassistanceinputting
togetherbidsandproposals.
Anumberoftelephoneinterviewrespondentsprimarilymajorityownedfirms
recommendedthatpublicagenciesshouldconsidermorethanjustlowbidderstatuswhen
awardingcontracts.Respondentssuggestedthatafirmsqualificationsshouldplayabiggerrole
incontractawards.Forexample,amajorityownedfirmsaidthatfocusingonpriceleadstoa
disproportionatenumberofcontractsgoingtominorityownedfirms:Myexperienceisthat
[publicsectorcontracts]areusuallyonly[goingto]thelowestbid,anditsusuallygoingto
Mexicans.Mycomplaintis,letsleaveitinthecountry.
E.Partnerships
BGPAAStudyAnecdotesRegardingPartnerships
Jointventures.
Severalintervieweesreportedknowledgeoforexperiencewithajointventureprogram.
[Interviewees#BGP:2,8,10,16,TA#2].Interviewee#BGP2,thesalesmanagerofanAsian
AmericanownedMBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatsometimesa
biggercompanywillaskustogoinonaprojectwiththemthathasaDBErequirement.Thishas
beenhelpful.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatthefirmhasparticipatedinjointventures.Hesaid,Iveworkedonalotofjoint
ventureprojects.Sometimestheyarenecessarybecauseprojectsareofsuchanaturethatyou
havetobringtogetheranumberofmajorcapabilitiesthatmaynotexist[inasinglefirm].
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE102

Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthefirmhashad
experiencewithjointventurerelationships.Hesaidthatthefirmhasworkedwithtwofirmsin
additiontothejointventurewithwhichitiscurrentlyinvolved,andtheexperiencehasbeen
positive.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthathebelievesthatthecompanyhasparticipatedinajointventurewithanotherfirm.He
saidthatheheardthattheproblemwithajointventureiswhosreallyincharge.Hesaid
thatsometimesjointventurefirmspointfingersateachother,buthedidnotknowifhis
companyhadexperiencedthisproblem.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,statedthathismembershaveparticipatedinsomejoint
venturerelationships.HesaidWell,frommypersonalexperience[firms]outreachtoNAMCO
andweareabletopartnerinsomequalifiedcontractors.
Otherintervieweesreportednoknowledgeoforexperiencewithjointventures.[Interviewees
#BGP:1,6,11,12].Interviewee#BGP1,theAfricanAmericanownerofanMBE/DBEandDVBE
certifiedarchitecturefirm,saidthathehasnotbeeninnorwouldhewanttobeinanyjoint
venturerelationshipsbecauseyouarecreatinganewentity,andajointventureisnormallyonly
forverybigprojects.
Mentorprotg.
Severalintervieweesreportedknowledgeoforexperiencewithamentorprotgprogram.
[Interviewees#BGP:6,14,15,16,TA#2].Interviewee#BGP6,thepresidentandmarketing
coordinatorofaWBEcertifiedengineeringfirm,said,IknowthatCaltranshasa
mentor/protgprogram,anditcouldbeusefulinbreakinginnewfirms.Ithinkitsusefulfor
youngerfirms.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thatthecompanyparticipatesinmentorprotgrelationshipsthroughtheNativeAmerican
Center.Hesaid,Wellactuallybringindisadvantagedyouths,andtheywillcometoworkforus.
Sometimeswehaveactuallyhiredthem,keptthempastthesixmonth[training]period.Were
notunderanyrequirementto.Weusuallytrainthem,andiftheyshowalotofpromise,or
showuptowork,andeverythingisgood,andwehavetheneed,wellactuallyhirethemfull
time.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshewasmentoredby
someoftheprimecompanieswhen[she]startedout,andsheisnowsortofmentoringnew
businessesalong[and]helpingthemgetthroughtheprocess.Shesaidthatsheobtainedher
certificationonherown,buttheCityofL.A.providesalistontheirbusinesswebsiteofother
sourceswhereyoucancontactminoritybusinesses,andorganizations,suchastheLatin
BusinessAssociation[andthe]NationalAssociationofWomenBusinessOwners[do]some
degreeofmentoringandcertification.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE103

Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatthefirmhasparticipatedinmentorprotgrelationships.Hesaidthatwhenhisfirm
usessubcontractors,alotoftimes[thecorporationwill]trainthemonhow[itwants]thework
done.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatitsmembershaveparticipatedinmentorprotg
relationshipsandtheonesthathavehadit,havebeenverysuccessfulbuttheyrefarandfew
inbetween.Hesaidthatmentorprotgrelationshipsarefarandfewbetweenbecauseitcosts
companiesmoneytomentor,timeandmoney.Itslikebeingintheservice,itcostsyoutimeand
theresnotawholelotofpaybackfortheindividual.
Otherintervieweesreportednoknowledgeoforexperiencewithmentorprotg
relationships.[Interviewees#BGP:8,11,12,13].Interviewee#BGP8,thetechnicaldirectorofa
whitewomanownednoncertifiedengineeringfirm,expressedsupportformentorprotg
relationships.ShesaidIthink[mentorprotgprograms]wouldbeamajorhelpforsmall
emergingfirms.Ihaveneverheardofthathappening,butthatwouldbeagoodthing.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatheisnotfamiliar
withmentorprotgprograms,buthesaidthatthecompanyisamemberofABC,Association
ofBuildersandContractors,andparticipatesinABCsapprenticeshipprogram,whichhefeels
hasimprovedtheapprenticeshipofelectricians.
SDCRAAAnecdotesRegardingPartnerships
Thefollowinganecdotesregardingpartnershipswereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009SDRCAAstudy.
Jointventures.
Afewintervieweessharedtheirexperienceswithjointventures.Interviewee#SD9,
representingaminorityfemaleownedfirmthatisaconcessionaireattheAirport,saidthather
firmhasbeenapartoftwojointventures,bothasconcessionairesattheAirport.Currently,her
firmisinvolvedinajointventurewiththemasterconcessionaireattheAirport.Interviewee
#SD9indicatedthatthejointventureagreementhasbeenbeneficialforherfirm,asthemaster
concessionairehastaughtherfirmhowtobecompetitiveandhassavedthemagreatdealof
money(becausethemasterconcessionairecanpurchasebusinessrelatedproductsmore
cheaplythanherfirm).
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,describedherinvolvementinajointventureasaconcessionaireattheAirport.
Interviewee#SD1spartnerwasanAfricanAmericanfemaleownedfirmthatwasresponsible
forbusinessadministration.Therelationshipwasnotparticularlysuccessful,asthebusiness
dissolvedafteronly18months.
Interviewees#SD31,representingawhitemaleownedfirm,indicatedthatjointventuresare
verybeneficialtohisfirmandtoothersmallfirmsinconstruction.Regardingjointventures,he
explained:Itgivesmeaccesstoalevelof[thecompany]thatIwouldntgetotherwise.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE104

Interviewees#SD40,representingawhitemaleownedfirm,saidthatjointventuresmakesense
forhisfirmonlargeprojects:Wesometimes[participateinjointventures]onlargemega
projectsbecausewefindthattwofirmsarebetterthanone.Youcannothaveeverythingtied
intooneprojectandcancombinetheexpertiseoftwofirms.
Severalintervieweeswhoreportedhavingnodirectexperiencewithjointventureshad
positiveorneutralopinionsofthem.SDTA#1,representingalocalchamberofcommerce,
indicatedthathesupportedtheideaofjointventures,because[jointventures]couldhelptoget
someofthelocalsmallerfirmsintothegame.
SDTA#3,representingalocalchamberofcommerce,andSDTA#11,representingaveterans
tradeorganization,bothsaidthatjointventureprogramsareworthwhileendeavorsfor
minorityandfemaleownedbusinesses.Similarly,Interviewees#SD14,representingaHispanic
Americanmaleownedfirm,saidthatjointventuresareusefulforminorityandfemaleowned
firms,particularlyonlargeprojects.
Interviewees#SD20,representinganAsianAmericanmaleownedfirm,indicatedthathe
supportstheideaofjointventuresbutthattheirutilityisdependentonwhethertheteammakes
sense.Thatis,eachpartnerhastobringskillstotheprojectthattheotherpartnercannotbring
onitsown.
Interviewees#SD32,representinganAfricanAmericanmaleownedfirm,statedthatjoint
venturescanwork,particularlyonlargeprojects:Ifyourelookingatagiganticcontract
$300millionthereareveryfewcompaniesthatcandothosekindsofjobswithoutajoint
venture.
Otherintervieweeswhoreportedhavingnodirectexperiencewithjointventureshadnegative
opinionsofthem.Interviewee#SD21,representingawhitemaleownedfirm,saidthathecould
imaginejointventureworkingforminorityandfemaleownedfirms,butthatheviewsthemas
beingunfair.Hesaid,Idontbelieveitsreasonable[toofferfinancialincentivestofindajoint
venturepartner].
Interviewee#SD45,representingawhitemaleownedfirm,saidthatjointventuresaregood
toapoint,butgenerally[small]firmsdontwanttocoughupownership[tolargefirms].
SDTA#10,asuppliertradeorganization,describedjointventuresandjointventureincentivesas
atougharea.Hesaidthatveryfewsmallfirmsunderstandthemandtheirutility.Henotedthat
smallfirmsprefertoworkundertheirownbrandnames.
SDTA#7,representingaconstructiontradeorganization,reportedthatjointventuresinvolving
MBEorWBEfirmstypicallyarenotverysuccessful.Hesaidthatsuchagreementsareusuallyset
uptopacifythepoliticians,ratherthantocreatesensiblepartnerships.Heremarked,when
youreinajointventureyougottobringsomethingtothetableotherthan[being]black.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE105

Mentorprotg.
Severalintervieweessharedtheirexperienceswithmentorprotgprograms.Interviewee
#SD14,representingaHispanicAmericanmaleownedfirm,reportedthathisfirmhastaken
partinmentorprotgprogramsthroughCaltransastheprotg.Hesaidthatthoseprograms
areusefulinthattheybringprimecontractorsfacetofacewithsmaller,MBEandWBEfirms.He
reportedthatthoseprogramshelpedhisfirmintermsofnetworkingandmarketing.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,iscurrentlypartofa
mentorprotgrelationshipastheprotg.Hesaidthatthementorhasbeenveryhelpful.
Interviewees#SD20,representinganAsianAmericanmaleownedfirm,reportedthathisfirm
hastakenpartinmentorprotgprogramsseveraltimesastheprotg.Hesaidthatthe
programswereusefulbutthatthenumberofmentorprotgopportunitiesislimited.
Interviewee#SD24,representingawhitemaleownedfirm,reportedthathisfirmisworking
withtwoprotgsaspartofSANDAGsmentoringprogram.Regardinghisfirmsmotivationto
participateintheprogram,Interviewees#SD24stated,Wewereencouragedtoparticipateby
SANDAG,andwecertainlywanttobeongoodtermswiththem.Maybewereimpartinggreat
valuetothis[WBEfirm]whosewealthandincomeIwouldenvy.
Interviewee#SD4,representingawhitemaleownedfirm,participatedinamentorprotg
programtwiceasthementor.Hereportedthatthefirstprotgwithwhomhisfirmworked
wentoutofbusinessaftersubmittingabadbid,andthesecondprotghadunrealistic
expectationsregardingherfirmsgrowth.
Interviewee#SD25,representingawhitemaleownedfirm,wasinvolvedinmentorprotg
programswhenheworkedatalargenationalfirm.Heindicatedthattheywerepositive
experiences,andthathestillworkswithmostoftheprotgsfromthoseprograms.Hesaidthat
hehasseentheirfirmsgrowsubstantiallyovertheyears.Interviewees#SD25wentontosay
thatheunderstandswhyfirmsinconstruction(asopposedtofirmsinengineering)arehesitant
totakepartinmentorprotgprogramsasmentorsitisakintothosefirmsstrengthening
theirowncompetitioninalowbidenvironment.
Interviewee#SD37,representingawhitemaleownedfirm,saidthathesupportsmentor
protgprogramsandfindsthemtobemutuallybeneficial:Itshowsuswhatthesmaller
companiesaredoingandthewaytheyareapproachingwork.Butitalsoshowsthemhowwere
approachingit.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirmthatparticipatedina
mentorprotgprogramastheprotg,reportedthattheprogramhelpedhisfirmlearnabout
thebusinesssideoftheindustryandalsohelpedincreasehisfirmsbondingcapacity.
Regardingmentorprotgrelationships,Interviewee#SD47,representinganAfricanAmerican
femaleownedfirm,said,[Mentorprotgrelationships]canbehelpfulortheycanbea
hindrance.If[thementor]makesyousignsomethingsayingyoucantparticipatewithanybody
elseitcouldbethreeyearsthatyourestuckwithsomebodythatsnottryingtohelpyou
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE106

Severalintervieweeswhoreportedhavingnodirectexperiencewithmentorprotg
programshadpositiveorneutralopinionsofthem.Interviewee#SD21,representingawhite
maleownedfirm,saidthatalthoughhisfirmhasneverdirectlyparticipatedinamentorprotg
program,theyworkedwithamentorprotgpaironaproject.AccordingtoInterviewee#SD21,
thearrangementappearedtoworkwellinthatcase.Hesaid,Ibelievethementorendedup
finishingthejob.Thementorentityactuallyprovidedlaborandlaborfinancing.
Interviewee#SD27,representingawhitemaleownedfirm,saidthathisfirmisinterestedin
participatinginamentorprotgprogramthroughtheAirport.Hesaidthathisfirmconsiders
theirsubcontractorsastheiremployees,andtheyseebothamoralvalueandabusinessvaluein
supportinglocalfirms.
Interviewee#SD31,representingawhitemaleownedfirm,describedmentorprotgprograms
asexcellent,becauseitsoneofthemainwaystocoverbonding.Thatis,aspartofthose
relationships,thementorcanbondfortheprotg.Inaddition,Interviewees#SD31suggested
thatthementorcanhelptheprotgmakeconnectionswithintheindustry.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,indicatedthatmentor
protgprogramsareveryhelpful,particularlytosmallfirmstryingtogrow:Itgivesyouthe
abilitytobondhigher,getthatlargerjobthatyouwanted.But,Interviewees#SD32saidthat
hehasalsoseenafewsituationsinwhichthementorhastakenadvantageoftheprotg:
Essentially,thebigbusiness[does]thesmallbusinesssworkeventhoughitwasthesmall
businessthatgotthecontractjustusing[thesmallbusiness]asavehicletogetmorework.
Interviewee#SD40,representingawhitemaleownedfirm,reportedthattheAssociatedGeneral
ContractorsofAmerica(AGC)hasamentorprotgprogramthatisverybeneficialtolocal
MBE/WBEfirms.
SDTA#7,representingaconstructiontradeorganization,indicatedthathisorganization
supportstheideaofmentorprotgprogramsandhasoneinplaceforitsmembers.Speaking
aboutmentorprotgprogramsingeneral,SDTA#7remarked,whatagreatdeal[forthe
protgs]tobeabletohave[amentor]thatsbeeninthebusinessforyearsgetinandtellyou
whattodo.Ittakesyearsoutofthelearningcurve.Headdedthatinorderformentorprotg
programstobesuccessful,thepairhastobematchedcorrectly.
SDTA#2,representingaHispanicAmericantradeorganization,indicatedthathestrongly
supportsmentorprotgprogramsandbelievesthatpublicagenciesshouldofferfinancial
incentivestodevelopmentorprotgrelationships.SDTA#2saidthatmentorprotg
programsgivesmallerfirmstheconfidencetoprogressandteachesthemthebasicskillsneeded
tobesuccessful:Mostjobsarentrocketsciencetheyrequireachecklistandrepeat.
SDTA#13,aretiredofficialfromalocalpublicagency,statedthattheAirportshouldcontinue
encouragingparticipationinmentorprotgprogramsandshoulddomoretofacilitatefirms
meetingandenteringintothoserelationships.Shewentontosaythatbusinesseshavetostop
viewingeachotherascombatantsandinsteadvieweachotherasfriendlycompetitors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE107

SDTA#11,representingaveteranstradeorganization,saidthatmentorprotgprogramsare
excellent,butonedisadvantageofthemisthatmentorsarelegallyprohibitedfromworkingwith
theirprotgsinthefuture.
SDTA#3,representingalocalchamberofcommerce,andSDTA#10,representingasupplier
tradeorganization,bothsaidthatmentorprotgprogramscanbeusefultoMBEandWBE
firms.Interviewees#SD16,representinganAfricanAmericanmaleownedfirm,alsoindicated
thatsuchprogramsareworthwhile.
SDTA#9,representingapublicworkstradeorganization,describedmentorprotgprograms
withwhichhewasfamiliar:TheCaliforniaMentorProgramfor[architectureandengineering]
wasgreat.Thisprogramhad25[mentorprotg]pairsinitsfirstyear.Theprogramisforsmall
businesswithafocusonDBEs.TheCityProgramontheotherhandtakesontwotothreenew
teamsperyear.Theissueisfindingmentorswhoarewillingtoregularlymeetfacetoface.This
typeofprogrammingcanbeveryhelpful,buttherearenotenoughopportunitiesanditisvery
competitive.Heindicatedthatinorderformentorprotgrelationshipstobesuccessful,both
partnershavetohavesimilarexpectations:IthinkthedifficultywithDOTmentorprotg
programsisthatthementorandtheprotghavedifferentperceptionsofwhatshouldcomeout
oftherelationship.
Otherintervieweeswhoreportedhavingnodirectexperiencewithmentorprotgprograms
hadnegativeopinionsofthem.Interviewee#SD2,representinganAfricanAmericanfemale
ownedfirmindicatedthatmentorsarenotideallysuitedtogiveadvicetoprotgs:Youneedto
knowsomuchasacompanytobeabletoadviseme.Thementoronlyknowsasliceofthe
businessandcantadviseacrossallareas.OneproblemthatInterviewees#SD2described
specificallyisthatmentorfirmstendtobelargerandthuscanonlyprovideadviceabout
systemsandproceduresforlargefirmsbutnotsmallones.
Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,indicatedthattraining
programsingeneralareofnousetohisfirm:Trainingandmentoringisawasteoftimeand
money.Ihavebeenatthistoolongforthattobeofuseforme.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthatmentorprotg
relationshipsareusefulingeneral,butthattheyarenotveryapplicabletoherfirmssituation
becauseofthenicheindustryinwhichthefirmworks.Sheaddedthatthecompetitionissostiff
inherfirmsindustrythatitwouldbedifficulttoconvinceonefirmtohelpanother:Oneofour
competitorsisnotgoingtotakeusundertheirwingsandhelpus.Nobodysgoingtogive
anyadvicetohelpanyoneelseout.
SDTA#8,representinganelectricalworkerstradeorganization,reportedthatshehasheard
quiteabitofnegativefeedbackaboutmentorprotgprograms.Thecomplaintshave
predominantlybeenrelatedtothetimecommitmentandareluctancetosharetradesecrets.
SDTA#1,representingalocalchamberofcommerce,describedmentorprotgprogramsas
intriguing,butindicatedthatheisworriedaboutthementorbeinginapositiontotake
advantageoftheprotg.
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ConsortiumAnecdotesRegardingPartnerships
Thefollowinganecdotesregardingpartnershipswereobtainedfrominterviewsthatthestudy
teamconductedinconnectionwithBBCs2009Consortiumstudy.
Someofthebusinessesinterviewedreportednoknowledgeoforexperiencewith
partnerships,eitherjointventureormentorprotgarrangements.[Interviewees#CON:1,5,
6,7,9,10,11,19,28,29,40,41,43].Interviewee#CON1,anonDBEHispanicAmericanmale
ownerofanelectricalcontractingfirmintheSanDiegoarea,didnothaveanyexperiencewitha
jointventurebuthewouldbeinterestedinparticipatingwiththat;hewouldalsoliketo
participateinamentorprotgprogrambuthehadnoexperiencewithsuchaprogram.
Jointventures.
Severalintervieweesreportedknowledgeoforexperiencewithajointventureprogram.
[Interviewees#CON:2,3,4,8,13,14,17,18,20,22,23,25,26,30,31,32,33,34,35,38,39,
44,45,46,48,49,51,52,53,54,55,56,57,58,CONTA#2].Interviewee#CON2,aDBEcertified
AfricanAmericanmalestructuralengineerintheSanDiegoarea,statedthathehasheardof
jointventuresbetweenDBEsandnonDBEs.Forinstancethepublicagencies,likeSANDAG,
requireDBEstopairupwithprimecontractorstodoworkfortheagencies.SANDAGprovided
himwithcontactinformationtopairupwithaprimecontractor.However,theprime
contractorsalreadyhavetheirteams.Interviewee#CON2saidtheagencieshaveprettymuch
relegatedtheresponsibilitytotheprimecontractorstohireDBEs.Hestatedthathehasbeen
unabletopairupwithanyoftheprimecontractors.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthatjointventuresbetweenDBEsandnonDBEsarefairlyrareinthe
environmentalconsultingbusiness.Theydohappenonoccasionbutonlybetweenlargefirms
withthousandsofemployees.Hestatedthattypicallyalargefirmwouldnotjointventurewitha
smallerfirm.Rather,thelargerfirmwouldhirethesmallerfirmasasubcontractoranditwould
holdthepursestrings.Interviewee#CON3statedthathevaguelyrecalledseveralyearsago
therewassomeentitytryingtopromoteajointventurebuthedoesnotthinkiteverhappened.
Hesuspectsthatitdidnothappenbecausetheprimecontractorwantedcompletecontrolof
projects.Theotherissueismoney,everybodyhastobebillable.Dependingonfirmstheprime
maywanttheDBEtobe100percentbillable.Theprimeexpectstogetsomuchmoneyfromthe
contract.Interviewee#CON3didnothaveanyknowledgeoforexperiencewithamentor
protgprogram.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,enteredintoajointventurewithtwootherfirmsinthe1990s:alargenon
DBEfirmandanotherDBEfirm.Interviewee#CON4statedthattheentitiesformeda
partnershiptogoafterworkinSanDiego.Thepartnershiplastedsevenyears.Hestatedthat
theyweresuccessfulinobtainingbetween12and20publicprojectsinSanDiego.Thejoint
venturehassincebeendissolved.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,hasoftenconsideredenteringintoajointventurewithaDVBE;heisawareofthis
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programthroughtheStateofCalifornia.Interviewee#CON8didnothaveanyknowledgeofor
experiencewithamentorprotgprogram.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,enteredintoajointventureagreementwithanonDBEin1999or
2000forMTA;hestatedthatitwasapositiveexperience.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathehadonceparticipatedinajointventureanditwasatoughsituation.Hestatedthat
jointventuresarenoteasyrelationshipstobuild.Hestatedthathiscompanyengagedinajoint
venturewhentheyfeltitwasadvantageous,dependentuponthecontract.Hestatedthat
companiesengagemoreinjointventureswhentheyarestartingoutinordertosupplement
theirexperienceandmeettherequirementsforanRFP.Interviewee#CON14didnothaveany
knowledgeoforexperiencewithamentorprotgprogram.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hassubmittedproposalsasajointventurer,butthe
companyhasneverwonanyofthosejobs.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,has
hadpositiveexperienceswiththejointventureprogram,andhasbeeninvolvedwithjoint
venturesformanyproposals.Interviewee#CON18didnothaveanyknowledgeoforexperience
withamentorprotgprogram.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,participatedinajointventurewithaprivatesectorprimecontractor.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,hasparticipatedinjointventuresinboththepublicandprivatesectors;she
statedthattherearealwaysjointventures.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,reportedthathehasparticipatedinajointventureonaprivatesectorproject.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
wasawareofjointventureswithintheConsortiumbuthadneverparticipatedinone.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatshehasparticipatedinajointventureinthepublicsector.Sheisawareofjoint
ventureswiththeConsortiumandacrossthepublicandprivatesectors.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,hadparticipatedinajointventureinthepublicsector.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,hasnotexperiencedajointventurebetweenaDBEandnonDBE.Hestatedthat
hehasnotpartneredinthecapacityofajointventure.Hehasworkedwithotherfirmson
projectsbutnonewithinthesamescopeofworkinwhichtheywereconsideredpartners.He
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statedthathefeelsthereisnotanyincentivetoinitiateajointventuretypeofrelationship
betweenaDBEandnonDBEfirm.Hestatedthatjointventuresdoexistbuttheyaretypically
beneficialtothelargerbusinessinterests.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathehasparticipatedinajointventurewiththemanufacturerofsomeofhis
products.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
wasawareofjointventuresintheConsortium,nonConsortiumpublicsector,andtheprivate
sector.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,reportedhavingparticipatedinajointventureonapublicsectorprojectinTexas
withaDBE;shewasnotawareofanyotherjointventures.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatsheparticipatedinajointventureinthepublicsector.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,hasparticipatedinajointventureinthepublic
sector.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,participatedinajointventurethroughoneoftheConsortiummember
agencies.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatshehadexperiencewithajointventurewiththe
Consortium.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,hadexperiencewithajointventureintheprivatesector.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,reportedhavingparticipatedinajointventurewithanotherelectrical
contractor.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthathewasawareoftwoorthreejointventuresover
thepast15years.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,indicated
thathehasdiscussedparticipatinginajointventureandanticipatesparticipatinginoneinthe
nextsixmonths.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,reportedthathisfirm
hasparticipatedinjointventuresandwasawareofotherjointventuresinexistence.
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Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,wasawareofjointventuresbuthadneverparticipatedinone.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,reportedhaving
knowledgeofjointventuresintheprivatesectorbuthadnotparticipatedinone.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
reportedhavingparticipatedinajointventureintheprivatesector.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,statedthathewas
awareofjointventuresbutnotedthathisfirmhasintentionallyavoidedparticipatinginone
becauseitistootimeconsumingandrequiresonetopracticallysetupanentirenewcompany.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatheisnotawareofany
jointventuresbetweenaDBEandnonDBEintheprivatesector,butstatedthattherehavebeen
severalinthepublicsector.
Mentorprotg.
Severalintervieweesreportedknowledgeoforexperiencewithamentorprotgprogram.
[Interviewees#CON:2,4,12,13,15,16,17,21,22,23,24,26,27,30,31,33,35,36,37,42,45,
46,47,49,50,51,53,54,55,56,57,58,CONTA#1,2].Interviewee#CON2,anAfricanAmerican
structuralengineer,statedthathehasheardofmentorprotgprogramsbetweenDBEsand
nonDBEs.HestatedthatonceinawhilehereceivesanemailfromCaltransaboutsuch
programs.HestatedthatheknowsofoneDBEthatparticipatedintheprogramfiveorsixyears
agoasasubcontractorforaprime.Thisparticularsubcontractorreallylikedit,anditwasagood
project,aSANDAGrailwayproject.Interviewee#CON2statedthathehasconsidered
participatingintheprogramwhenitbeginsagain.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathewasnotawareoftheConsortiumsmentorprotgprogram
butwasawarethatCaltranshadaprotgprograminwhichheparticipatedlastyear.The
programwentprettywellandwashelpful.HismentorwasanonDBE.Heexplainedthatthe
programworksbypairinglargeprimecontractorstovolunteerasamentorandprotgwith
DBEs.Theprogramwasjustaoneyearprogram.Interviewee#CON4statedthathebegan
participatingintheprograminOctober2007andtheprogramwillendinOctober2008.
Interviewee#CON4statedthathefoundvalueintheprogram.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathedidhaveexperiencewithamentorprotgprogramthroughCaltransDistrict7.
Hestatedthatinhisexperiencetheprogramwasnonresultsoriented.Hestatedthatthefirst
mentorperhapsforgotthatweweretheirprotg.Hestatedthattheydissolvedthat
relationshipandsigneduptoreceiveasecondmentorwithwhomtheypursuedaproject;they
werenotsuccessful.Hestatedthatastheprotgtheyactuallybroughtworktothementor.
Interviewee#CON12didnothaveanyknowledgeoforexperiencewithajointventure.
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Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathebelievesamentorprotgprogramwouldbeagreat
ideabuthehasnotbeenabletofindanyonetopartnerwith.Hestatedthatthementorprotg
programwiththeSBAwasalotofworkfornotalotofbenefit.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompanystatedthathehasalotofexperienceinthementorprotgprogram,and
hasbeenverysuccessfulwithhismentor.Interviewee#CON15sworkhasbeenreferredoutby
hismentoranditisthroughtheprogramthathewasencouragedtobecomeaprimecontractor.
Interviewee#CON15didnothaveanyknowledgeoforexperiencewithajointventure.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,hasnoexperiencewiththementorprotgprogrambecausetheyhavent
foundanyonethatwantstoparticipateintheprogramwiththem.Interviewee#CON16noted
thatitsoundedlikeagreatprogramthatisntbeingrecommended.Interviewee#CON16
thinksthattherearenotenoughincentivesforthelargercompaniestoparticipateinthe
mentorprotgprogram.Interviewee#CON16didnothaveanyknowledgeoforexperience
withajointventure.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatthecompanyisnowamentor,butthatit
neverparticipatedasaprotg.Thementorprotgprogramhasbeenverypositivefor
Interviewee#CON17scompany.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,hadexperiencewithamentorprotgprogram
throughthefederalgovernment.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,hadparticipatedinapublicsectormentorprotgprogram.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,participatedinamentorprotgprogramyearsagobutwasnotawareofany
suchprogramsnow.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatshehasparticipatedinamentorprotgprogramintheprivatesectorwithUSC
throughitspublicartsprogram.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,reportedthathehadminimalexperiencewithamentorprotgprogram.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,hadparticipatedinamentorprotgprogramthroughCaltrans.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,hasheardofmentorprotgprogramsbuthasneverparticipatedinsucha
project.Hehaslearnedthatthepeoplewhodogettoparticipateinthesetypesofprogramsare
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handpicked(mostlikelyafamilymemberorrelativeorclosefriendorsomesortofotherway
thatwouldmakethemwanttotrainapotentialcompetitor),thuslimitingtheabilityforregular
firmsandtrulydisadvantagedfirmstobecomeapartofsuchprograms.Hesuggestedforcing
mentorstoworkwiththeirprotgs.Hestatedtheyshouldpositiontheminawayinwhichthey
wouldworkwiththemtogetaprojectorrisklosingtheirfunding.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
hadparticipatedinamentorprotgrelationshipintheConsortium.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,hadheardofamentorprotgprogramsbutwasnotawareofanyrealprogram.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,wasawareofMBDCCapacityBuildingsponsoredinpartbySouthernCalifornia
Edison.Shedidnothaveanyexperience,however,withamentorprotgprogram.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshewasawareofsomementoringprogramssponsoredby
privatecompaniesandthroughpublicuniversities.Shealsostatedthatshehasdevelopedher
ownmentoringprogramandthepeoplethatsheinvitedtoparticipateweregraduatesofcourt
reportingschools.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasparticipatedinamentorprotgprogramintheprivateandpublicsectors.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,wasinvolvedinamentorprotgprogramattheStateBoardof
Equalization.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatshehadexperiencewithamentorprotgprogram,but
shedidnotfeelthatitwasatruementorprotgprogram.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatthefederalgovernment,L.A.CountyMTA,andMetroallhavementor
protgprogramsandhehasbeentryingtogetinvolvedinonefor10years,buthejusthasnot
hadthetime.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,believedthatherememberedparticipatinginamentorprotgprogramthroughthe
federalgovernment.Hewasnotawareofothermentorprotgprograms.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,wasawareofmentorprotgprogramsandnotedthereusedtobeseveralprogramsinthe
past.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
wasawareofamentorprotgprogramofferedbyaprivatecompany.
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Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,hadnoknowledgeofanymentorprotgprogrambut
reportedhavingheardprimecontractorstalkaboutsuchprogramsduringprojects.Hestated
thatnosuchopportunitieshavematerializedandhefeelsthatoncemajorityfirmslearnthat
thereisnobenefittothem,theyloseinterestintheidea.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,reportedhavingparticipatedinamentoringprogramnottargetedtowardsDBEs
throughprivateorganizationsofwhichheisamember.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,statedthattheyhavean
internalmentoringprogramforsmallfirmswithinadepartmentoftheirfirm.
Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthathehasparticipatedinseveralmentorprotgprograms
andheunderstandstheimportanceofthem.Hestatedthathewouldlikemoresmalland
minorityownedbusinessestodowell.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,reportedhaving
generalknowledgeofmentorprotgprograms,butsaidhehadnoknowledgeofthespecific
details.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
reportedhavingparticipatedinamentorprotgprogramthroughalocalcollegeandwasalso
awareofprogramsinotherareas.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,notedthatanoffice
ofhisfirmhasparticipatedinamentorprotgprogramasamentortoaDBE.Hewasawareof
othermentorprotgprograms.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathehasheardof
mentorprotgprogramsbetweenDBEandnonDBEbusinessownersbutwasnotawareofany
suchprogramwithConsortiumagencies.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatheisnotawareofa
ConsortiummentorprotgprogrambetweenDBEsandnonDBEsanddidnotbelievethat
Caltranshadanysuchprogram.HedidrecallthattheCityofSanDiegohadasimilarprogram
thatwasnotverysuccessfulbecausetheprogramonlyacceptedonetwoprotgsanditwasa
veryslowprocess.
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F.Prequalification
BGPAAStudyAnecdotesRegardingPrequalification
SomeintervieweesreportedasuccessfulorpositiveexperiencewiththeAirportAuthoritys
prequalificationprocedure.[Interviewees#BGP:9,14,15,TA#2].Interviewee#BGP9,the
ownerofanoncertifiedHispanicAmericanownedsecurityservicesfirmstatedthat
prequalificationfortheAuthoritysinsurancewaseasy.Hesaid,Iveonlybeenthe
prequalificationfortheinsuranceandsoforth,andforusitseasy,becausewehaveeverything
inplace.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
statedthattherearequalificationsthatmustbemettobidonprojectswiththeAuthority,such
asbeingqualifiedasalocalbusinesscontractorormeetingcertaineducationcriteria.Hesaid
thattheseprequalificationrequirementsweretypicalandgoodbecausetheAirportneeds
tobeprotectedandbringinqualifiedfirms,andIdontthinkthattheyeverusethepre
qualificationstospecificallylimitwhobids[on]theirjobs.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshehadagoodexperience
withprequalificationwiththeBureauofEngineering.Shenotedthattheagencypre
qualificationprocessisgenerallyveryslowandverylengthy,butshesaidthatshethinks
thatsjustthewaythatagenciesworknowadays.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatitisnotaproblemfillingoutthepaperwork[for
theprequalificationprocess],buttheproblemisthatyougetprequalifiedbutthennothing
happensthere.Hesaid,Youarenotplacedonalistforexample,Ima[generalcontractor],I
gototheAirport,Ifilloutmyprequalificationsforyou,prequalify,whathappenswhena
mechanicalcontractorisawardedajob,whathappenstothat2ndand3rdopportunity,never
happens.
SeveralintervieweeshadnoexperiencewiththeAirportAuthoritysprequalificationprocess.
[Interviewees#BGP:10,11,12,13,16].Interviewee#BGP10,aprincipalatanengineeringfirm,
saidthatheisunfamiliarwiththeAuthoritysprequalificationprocessifithasone.Hereported
thatsomeotherpublicagencieshaveaprequalificationprocessfortheprofessionalservices
field,andhisfirmhasparticipatedintheprocess.Hesaidthatsomeoftheotheragencieswill
haveonewheretheywillprequalifyfirms,and,asprojectscomeup,theseagencieswillallow
prequalifiedfirmstosubmitproposals.HesaidthathedoesnotthinkthattheAuthorityworks
thatway.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthathedidnotknowiftheAuthorityhasaprequalificationprocess.Hesaidthat
theLosAngelesAirportdoesnothaveaprequalificationrequirement,andanyonecanbidon
anyrequestforproposal.HesaidthataprequalificationprocesshasbeenproposedattheLos
AngelesAirportandisunderconsideration.
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Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthattheywereunawareofwhethertheAuthorityhasa
prequalificationprocess.Interviewee#12reportedthatsomepublicagencieshavea
prequalificationprocess,butitisveryrare.Theysaidthatprequalificationrequirementsmake
thingsoverexclusive.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthathehasbeen
workingwiththeAuthorityforabout20years,andhedoesnothavearecollectionof
prequalifyingotherthanwhatourinsurancerequirementsareandeverythingbecauseofthe
maintenancecontract.
Someintervieweeshadrecommendationsforimprovingtheprequalificationprocess.
[Interviewees#BGP:10,TA#2].Interviewee#BGP10,aprincipalatanengineeringfirm,
recommendedhavingaprequalificationprocesssothattheagencyandtheengineering
communitycangothroughasingleprequalificationprocessandsothatneitherhastogo
throughatimeconsumingprequalificationprocessforeachindividualproject.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,recommendedthatthegeneralcontractorslistsofpotential
biddersforprojectsbemadeavailabletosubcontractorsbecausesomeprequalified
subcontractorsarenotbeinglistedaspotentialbidders.
SDCRAAAnecdotesRegardingPrequalification
Thefollowinganecdotesregardingprequalificationwereobtainedfrominterviewsthatthe
studyteamconductedinconnectionwithBBCs2009SDRCAAstudy.
Afewintervieweesrecommendedthatmorepublicagenciesprequalifyfirmsinparticular
industries.Interviewee#SD21,representingawhitemaleownedfirm,recommendedthat
publicagenciesprequalifysomenumberofMBEandWBEfirmswithineachconstructionsector
andrequireprimecontractorstosubcontractouttothosefirmswhentheyneedthattypeof
workcompleted.
Similarly,Interviewee#SD4,representingawhitemaleownedfirm,recommendedthattheSan
DiegoInternationalAirportprequalifyMBEandWBEfirmswithinspecifictrades.
Interviewee#SD37,representingawhitemaleownedfirm,indicatedthatprequalifyingbidders
wouldbebeneficialtoboththeAirportandtobidders:TheAirportshouldprequalifybidders.
Thiswouldbebeneficial,becauseitwouldeliminatecontractorsIdontthinkarequalified.Pre
qualifyingbidderswouldcutthecompetitiondown,andtheAirportwouldgetmorequalified
contractorsdoingtheworkforthem.
Interviewee#SD45,representingawhitemaleownedfirm,suggestedtheSanDiego
InternationalAirportshouldprovidegeneralcontractorswithalistofprequalified
subcontractors.HerecommendedthattheAirportdevelopaprequalificationprogramthat
evaluatedqualityandpriceratherthanjustprice.Hesaid,Intangiblesneedtobeconsidered.
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Twointervieweesindicatedthatprequalifyingfirmsisabarriertosmallfirmsbeingsuccessful
inthepublicandprivatesectors.SDTA#5,representingagovernmentadvisorycommissionon
minorityissues,reportedthatprequalificationdoesnothelpsmallfirms:TheCity[ofSanDiego]
hasbeenneglectfulanddysfunctional.PrequalificationisachoicethatSanDiegohasmade
theydothingswithoutthinkingaboutconsequences.Prequalificationisabarriertosmall
businesses.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,statedthat
prequalificationprocessesaretimeconsuming:Bythetimeyoucancompletethe
prequalificationprocess,thebidisover.Hewentontosaythatprequalificationshouldbe
consideredunnecessaryifafirmcangetbondedfortheproject.
Oneintervieweereportedthattheprequalificationprocessisexpensive.Interviewee#SD5,
representinganAfricanAmericanmaleownedfirm,characterizedtheprequalificationprocess
astooexpensivetobepractical:Thecityrequiresalottobeprequalified.Theyrequire
businessestodoacompilation,anaudit,andabondingletter.Manyoftheserequirementscosta
lotofmoneytogettogether.Forexample,thecompilationrequiresanauditbyaCPA.Many
smallbusinessescannotaffordthethreetofivethousanddollarsrequiredjusttogetpre
qualifiedtodoworkwiththecity.However,Interviewee#SD5pointedoutthattheSDRCAA
offersassistanceingettingthroughthecertificationprocess.
G.Licensing
BGPAAStudyAnecdotesRegardingLicensing
Mostintervieweesreportednoissuesinconnectionwithobtainingthelicensingrequiredin
theirparticularfield.[Interviewees#BGP:1,2,3,5,6,9,10,11,12,13,16,TA#2].Interviewee
#BGP10,aprincipalatanengineeringfirm,reportedthatmembersofhisfirmarelicensedas
individualprofessionals.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,statedthattheLosAngelesAirportrequirescompaniestohaveanonexclusive
operatinglicense.Hesaidthateveryfirmthatoperatesontheairportisgivenafiveyearnon
exclusivelicensetooperatethere,andattheendofthefiveyears,youhavetogobackand
reapplyagain.Hesaidthattheprocesstoobtainalicensetakesawhile,butmoreemphasisis
beingplacedonthislicensure.
Someintervieweesreportedmixedornegativeexperiencesregardinglicensing.[Interviewees
#BGP:8,14].Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertified
engineeringfirm,saidthatthefirmhadanissuewiththeCityofLosAngelesrequiringcertain
typesofengineeringfirmtobelicensedassuchintheStateofCalifornia.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatstatelicensingisnotaproblem,butitsgettingmoreandmoredifficultin
California[becauseof]thehurdlesyouhavetojumpthrough.Hesaidthatsomecitiesrequire
citybusinesslicenses,andifyouarepulledoverinabusinessvehiclewithoutacitybusiness
license,youwillreceiveaticket.
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H.ExperienceswithPayment
BGPAAStudyAnecdotesRegardingExperienceswithPayment
SomeintervieweesreportedapositiveexperienceinconnectionwithpaymentbytheAirport
Authority.[Interviewees#BGP:1,5,11,13,14,16].Interviewee#BGP1,theAfricanAmerican
maleownerofanMBE/DBEcertifiedarchitecturefirm,saidthathehashadnoissueswith
receivingpaymentsfromtheAuthority,andthatthepaymentprocessisveryclear.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatthecompanydidnthaveanyproblemswithpaymentfromtheAuthority.
Hesaidthatthepublicsectorisprettygoodaboutpayment.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthattheAuthority
hasbeenverygoodaboutpaying.HesaidthattheAuthorityusuallypayswithin30to45da ys.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatpaymentfromtheAuthorityhasbeenconsistent[and]good.Weneverhaveto
callandaskforpayment.Italwayshappensperthecontract.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatthecompanysexperienceobtainingpaymentfromtheAuthorityhasbeenverygood.
Hesaidthattheremightbealittlelaginreceivingpaymentwhenthecompanyactsasa
subcontractorinsteadofaprime,butheisnotawareofmuchofadifference.
SomeintervieweesreportedanegativeexperienceinconnectionwithpaymentbytheAirport
Authority.[Interviewees#BGP:2,4,9,10,TA#2].Interviewee#BGP2,thesalesmanagerofan
AsianAmericanownedMBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatrelative
tootherpublicagencies,itsalittlehardertoreceivepaymentsfromtheAuthority.
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthatthefirm
hasexperienceddifficultiesrelatedtopaymentbytheAuthority.Hesaid,Thecontractor
performsthework,buttheAirportwontclosetheworkso[thecontractor]cangetpaid.They
holdtheretention,andthecontractorislosingmoneyeveryday.Thatcandriveourpricesup
throughcreditreasonsbecausewedontknowhowlongitwilltaketogetpaid.Itdefinitely
drivesupfinancingcharges.Whenthathappens,youscareawaythegoodcontractors.Hesaid,
MyaverageBurbankAirportpayment,fromthedayIdelivertothedayIgetpaid,is120days.
Theaveragefinancechargeis3to4percent.SowhentheAirporttakesfourmonthstopay,the
subcontractorislosing3to4percenteverymonth.Myprofitmarginis10percentforthewhole
job,andwhenIhavetofinanceforfourmonths,itcostsmetodothesejobs.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmreportedthathisfirmhadaproblemoncewiththeAuthority,butthatitwasfixed.Hesaid,
Weranintoaproblemandonetime,buttheycorrectedWhenaskedhowtheAuthority
comparestootherpublicsectorworkintimelypayment,Interviewee#9said,Itsfair.Ona
scaleof1to10,itsaboutasixandahalf.
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Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatpaymentbytheAuthority
isslow.Hesaidthatthepublicsectorisslowgenerally,slowerthanitshouldbe.Interviewee
#10saidthatthereisadifferentpaymentprocessforengineersandothercontractors,andthe
firmsaveragepaymentwindowisusuallyalittleover90days.Hestated,Youknow,the
publicsectorcanpaytheircontractorswithin30days,buttheyfinditdifficulttopayengineers
within60to90days.HesaidthatthelawrequirestheAuthoritytopaycontractorswithin30
days,and[c]ontractorswillstopworkiftheydontgetpaid,sopaymentismadeontime.He
saidthattheproblemwithslowpaymentiswiththeAuthorityandisnottheresultoftheprime
takingtoolongtopaythesubcontractor.Hesaidthattheprimeusuallypaysasubcontractor
withinfiveor10daysofreceivingpaymentfromtheAirportAuthority.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatpaymentbytheAuthorityisslowslowtovery
slow.
Oneintervieweereportedthattimelypaymentdoesnotpresentabarriertoworkingwith
publicagenciesand/ortheprivatesector.[Interviewee#BGP:5].
Someintervieweesreportedthattimelypaymentpresentsabarriergenerallywithpublic
agenciesand/ortheprivatesector.[Interviewees#BGP:2,3,6,8,11,12,13,14,15].
Interviewee#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBEcertified
maintenanceandrepairfirm,statedthattimelypaymenthasbeenanissueforthefirm.Hesaid
thatalotofstateagenciesareslowbecauseofbudgetissues.Wehaveexperiencedpayment
delays.
Interviewee#BGP3,thecoownerofawhitewomanownedconstructionfirm,saidthat
timelinessofpaymentcanpresentabarrierforsmallcontractors.Hesaid,Cashisking,soyeah,
ifyouhaveproblemswithcashflow,yourenotgoingtostayinbusinessverylong.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthattimelypaymentisanissue.WehavethepromptpaylawintheStateofCalifornia
wherewhenaprimeispaid,thentheyhavetendaytopayus,butsomeprimesdonotdothat.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,said,Wehavenotseenaslumpinwork.Whatwehaveseenisaslumpingettingpaid.I
thinkitsageneraldelay[inpayment].Hesaidthattherearecertainfirmsthathisfirmwillnot
workwithbecausetheydontpaytheirbills.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,reportedthatthecompanyhashadproblemswithlatepaymentsfromairlinesasa
resultoftheairlinesfinancialcondition,butthathappenseverywhere.Hesaidthatpayment
issuesoccurmoreintheprivatesectorbecauseprivatecompanieshavetheirownfinancial
problems.Headdedthatcontractsoftencallforlatefeeswhenanairlineislatewithpayment,
butthecompanyusuallydoesnotenforcetheseprovisionsbecauseitisimportanttomaintain
thecompanyspositiverelationshipwiththeairline,andtheairlinedoesnotlookfavorablyupon
enforcementoftheselatefeeprovisions.
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Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,reportedthatpaymentvariesprojecttoproject.Therearesome
agenciesthatpayveryquickly.Therearesomeupfront,forexample,[that]justsay,Hey,Iwont
evensubmit[theinvoice]until55daysafterdelivery,andthenithastotouchsevenoreight
people[before]youfinallygetacheckback.Theysaidthatinthosesituations,paymentis
usuallyreceivedwithin90to120days,butonaveragethecompanyreceivespaymentin
between60and90days.Theyaddedthatitsveryslow.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthattheAuthority
usuallypayswithin30to45days.Regardingeveryoneelse,hesaid,Everybodystakingforever
topaynow,andthetypicalpaymentwindowisrunning60to120days.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatwhenthecompanyworksasasubcontractor,paymentfromtheprimemaybe
delayedifthecompanysworkistiedtoanothersubcontractorsworkthathasnotyetbeen
completed.Hereportedthatmostprivateentitiespayonceaquarter,anditdoesnotmatter
whentheinvoicegoesoutorwhenthecontractsayspaymentwillbemade.Hesaidthatthe
companywilloftenofferearlypaymentdiscounts,butsomeprivateentitiesdonottake
advantageofthisoffer.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshedoesnotrecallher
experiencewithobtainingpaymentfromtheAuthority.Shesaidthatwithpublicagencies,the
companydoesnotgetpaiduntiltheprimegetspaid,andoncetheprimegetspaid,theprimes
areusuallygoodaboutcuttingcheckstouswithinfivedays.However,itcanbe90to120
daysbeforeanagencypaystheprime,andthatsreallywaytoolongforasmallbusiness.I
mean,ithurts.Shesaidthatintheprivatesector,aprimegenerallypaysthecompanyoncea
clientapprovestheproject.Shesaidthatthistypicallytakesnet30days.
Someintervieweesidentifiedpaperworkandrelatedissuesasabarriertoreceivingpayment.
[Interviewees#BGP:12,13,TA#2].Interviewee#BGP12,ageneralmanagerandanaccount
managerofaWBE/DBEcertifiedconstructionsupplyfirm,statedthatpaymentvariesgreatly
dependinguponwhoisactingastheprimecontractorontheprojectandhowtheyturnintheir
paperwork.Theyadded,Changeorderstendtogetpaidmoreslowlybecausetheyrequire
morepaperwork.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,statedthatsubcontractors
donotgetpaiduntiltheprimecontractorhasbeenpaid,soevenifyouhavea30dayneton
yourinvoicing,itdoesntmatter,andnobodysreallychasinganytypeofpenaltiesoranything
likethat,sotheprimetakes30daysor60daystogetpaid,[and]aprettycommon
contractualagreementisyouhaveabout10daystopay[thesubcontractors]afteryouvebeen
paidasaprime.Headdedthatnobodysfinancingthejobexceptforthesubcontractors.He
saidthatifthereisabarrierconcerningpromptpayment,itisassociatedwithproperprocessing
ofpaperworkbytheprojectowneroruser.Hesaidthatoftenthepaperwork[is]sittingwith
theuserwaitingforapprovalsandsuch,buthesaidthatthisobservationisnotuniquetoa
specificentityandisjustindustrywide.
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IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatthepaycycleisabarriertopayment.Hesaid,Yes,
youhave30days,right,plusifyoutookitdownto,youcansayyoucandoitona20daycycleor
a15daycyclethenyouwouldturnovertheinvoicesfaster,soyouwouldnthavetoworkwith
30days,duringtheinvoiceafter30daysthentheresusuallyanother15daysbeforeyouget
paymentonthat,soitsactuallylike45daysto60daysbeforeyougetacheck,inthemeantime,
onthesecondcycleyourestillworkingandpayingoutofpocketsotoshortenthecycle.He
saidthatpayrollexpensespresentabigbarrierforfirmswhenpaycyclesareslow.
Mostintervieweesreportedthattheirrace,ethnicityorgenderdoesnotaffecttheirabilityto
receivepayment.[Interviewees#BGP:1,2,3,5,8,9,10,11,12,13,14,15].Interviewee
#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBEcertifiedmaintenance
andrepairfirm,saidthatIwouldntsayitisdiscrimination,butwehaveissueswithslow
payments.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatslowpaymentisageneralproblemandprobablynotabasedonraceorgender.
Hesaid,Wegetalotofslowpays,andIbet[minorityfirms]getalotofslowpays.Maybe
theyrealittleslowerwithminorityownedfirms,butIhaventheardthatcomplaint
expressed.
Someintervieweeshadrecommendationsforimprovingpayment.[Interviewees#BGP:4,10,
12,13,15,TA#2].Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,
recommendedthatthecontractorsbeprequalifiedbytheAuthoritytoensurethattheycanpay
theirsubcontractors.
Interviewee#BGP10,aprincipalatanengineeringfirm,recommendedthatthatAuthoritypay
within30days.HesaidthathethinksthatthispaymentwindowisfeasiblefortheAuthority.He
saidthatslowpaymentforcessmallfirmstofinanceworkandfinancetheairport,whichisa
significantdifficultyforsmallfirms.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,recommendedthatagenciespaymorequicklyandstreamlinethe
paymentprocesstothegeneralcontractor.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,recommendedthatthe
projectownerpayfastersothatcontractorsarenotforcedtofinancetheprojects.Hesaidthat
hehasnoticedpaymentwindowsgettinglongerandlongeroverthelastthreetofiveyears.
Hesuggestedthata10to15dayturnaroundonpaymentofinvoicesshouldbefeasible.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatinobtainingtimely
payment,itisimportanttomakesurethatthestatementofworkisclearlyidentified,thatthe
sametermsareusedinallofthedocuments,andthatallofthepartiesareonthesamepage
regardingwhatparticulartermsmean.Shesaidthatacompanyshouldnthavetosubmit
timecardswhenitisworkingonprojectsthatarenottoexceedthelumpsumbecauseits
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goingtobelumpsum,andthosearebasedonmilestonedeliverable.Shesaidthatagency
inputtingandenforcingtheserequirementscancausedelay,andtheprocessisunnecessary.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,recommendedshorteningthepaycycle.
SDCRAAAnecdotesRegardingExperienceswithPayment
Thefollowinganecdotesregardingexperienceswithpaymentwereobtainedfrominterviews
thatthestudyteamconductedinconnectionwithBBCs2009SDRCAAstudy.
Paymentbyprimecontractors,publicagencies,orprivatesectorclients.
Someintervieweesreportedpositiveexperienceswithgettingpaidbyprimecontractorsor
publicagencies.Interviewee#SD11,representingawhitemaleownedfirm,indicatedthathis
firmhasneverhadissueswithagenciespayingthem.Asanexample,hesaid,TheCityjustpaid
usinsevendays.Interviewee#SD11wentontosaythathisfirmhasneverhadanyissues
payingtheirsubcontractors,andthatitistheirpolicytopaytheirsubcontractorswithinseven
daysofgettingpaidthemselves.Hesaidthatanydelayinpayingsubcontractorsisduetodelays
inreceivingpaymentfromtheagency:Ourproblemisthatwearewaitingupto60daystoget
paidfromthepublicagencywhichmightslowdownthepaymenttime.
Interviewee#SD2,representingawhitefemaleownedfirm,alsohashadgoodexperiences
gettingpaidonprojects.Shesaidthattheonlydifficultycomeswhentheprojectgoes
considerablybeyondtheoriginalestimate.Interviewee#SD22,representingawhitemale
ownedfirm,alsoreportedexperiencingnoissuesrelatedtopayment.
Interviewee#SD45,representingawhitemaleownedfirm,saidthatreceivingpaymentina
timelymannerisalways,alwaysaproblem.Indescribingthedifferencesbetweenreceiving
paymentinthepublicandprivatesectors,Interviewee#SD45commented,Paymentmaybe
slowinthepublicsector,butitisguaranteed.Youneedaguntogetpaidintheprivatesector.
Severalintervieweescomplainedthatprimecontractorsoragenciesoftenpayslowlyinthe
publicsector.Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,saidthat
therearealwaysagenciesandprimecontractorsthatpayslowly.Heexplainedthatslow
paymentisespeciallyproblematicnowbecauseoftherecession.Interviewee#SD20,
representinganAsianAmericanmaleownedfirm,expressedasimilarsentiment:[Slow
payment]happensallthetime!Iwouldliketoseesomesortofcontractclausebetweenthe
primesandagencies[sothattheprimecontractor],within10daysofgettingpaid,hastopaythe
subs.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,reportedthatslow
paymentisanegativeaspectofdoingpublicsectorwork:Itishardtogetpaid.Hewentonto
saythatslowpaymentbecomesparticularlydifficultintimeswhenhisfirmhaslimitedcapital.
Interviewee#SD18,representingawhitefemaleownedfirm,indicatedthatpaymentsfrom
publicagenciestakebetween60and90days,longerthanpaymentsfromprivateentities:The
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differencebetweenpublicandprivateagenciesisthedecisionmakingprocess.Thepublicsector
takesalongtimetomakedecisions.
Interviewee#SD19,representingawhitemaleownedfirm,reportedthat50percentof
payments[frompublicagencies]takeover120daysShewentontosaythatwhenherfirm
worksasaprimecontractorpaymenttendstobefasterthanwhentheyworkasasubcontractor.
Regardingherfirmspaymentexperiencesasasubcontractor,Interviewee#SD19said,Wemay
havefinishedourpieceofthejob,but[if]theprimecontractorisnotonschedule,[]wedont
getpaiduntilthejobiscomplete.Shecontinued,Therearecaseswherewedidnotgetpaidat
all.
Interviewee#SD37,representingawhitemaleownedfirm,indicatedthathisfirmprefersto
workasaprimecontractor,becausetherearetoomanypaymentissuesassociatedwith
subcontractorwork:Thecompanydoesnthavetoworryaboutgettingpaidwhen[itis]the
prime.Wearecurrentlyworkingwithageneralasasubcontractorandhavebeenworkingwith
themforoverayear,andwepracticallyhavetodigourmoneyoutofthem.Hewentontosay
thatsometimeshisfirmwillsimplyforegopaymentfromgeneralcontractors,becausepursuing
legalactionagainstthemistooexpensive.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,reportedthatpayment
issuesareprevalentonconstructionprojects,becauseprimecontractorsoftendelaypayments
becauseofredosorgobacks.Hewentontosaythatsmallfirmsaremorelikelytobeaffected
byslowpaymentsandthatitssometimes6090daysoutbeforetheinitialpaymentonanew
projectisreceived.Interviewee#SD36,representinganAfricanAmericanmaleownedfirm,
said,Alwayswith[publicagencies]youcancountona60,90or120daypayperiod.Thatwill
affectyouifyoudonthavethefoundationtopaypeopleontime.
SDTA#2,representingaHispanicAmericantradeorganization,andInterviewee#SD25,
representingawhitemaleownedfirm,bothalsoreportedthatpaymentsfrompublicagencies
takeanywherefrom60to90days.SDTA#2indicatedthatpaymentdelaysthatarelongerthan
90daysareusuallytheprimecontractorsfaultandnottheagencys.
Interviewee#SD24,representingawhitemaleownedfirm,reportedthatpaymentto
subcontractorsisoftendelayedbecauseoftheprocessingthatisrequiredonthepartofthe
primecontractor,orbecausetheagencyrejectsoneormorepaymentinvoices.
Interviewee#SD3,representingawhitemaleownedfirm,explainedthatthereistypicallya10
weeklagbetweenthestartofapublicagencyprojectandthefirstpayment.Hesaidthatthetime
thatittakestogetpaidisalmosttwiceaslongforsubcontractorsthanforprimecontractors.
Interviewee#SD3remarkedthatbecauseofpaymentdelays,itiscrucialforfirmstohaveagood
lineofcredit.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthatslowpaymentisalways
anissue.Sheexplainedthatbothpublicandprivateentitiesaretypicallytakingatleast120
daysrightnowtopaycontractors.Shewentontosaythatbecauseherfirmisusuallynotthe
biggestfirmonaproject,itspaymentconcernsarenotashighontheprimecontractorspriority
list.Shesaid,Wedonthaveasmuchpull[todemandquickerpayment].
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Interviewee#SD35,representinganAsianAmericanmaleownedfirm,reportedthatheusedto
ownanotherfirmthatwentintobankruptcy,primarilybecauseprimecontractorsrefusedtopay
hisfirm:wecouldntgetpaidfromseveralofourprimes.Interviewee#SD35indicatedthat
oneprimecontractorinparticularputhisformerfirmoutofbusiness:Theywouldalwayscome
upwithsomereasonwhywewerentgettingpaidontime.Usually,itwasthepaperwork.Inthe
lastdaysof[thefirm],[theprimecontractor]owed$180,000.[Theprimecontractor]putusout
ofbusiness.Interviewee#SD35indicatedthathispreviousproblemswithpaymenthavemade
himhesitanttotakeonsubcontractorroleswithhiscurrentfirm.
Interviewee#SD43,representingaHispanicmaleownedfirm,saidthatslowpaymentisoften
anissue,butitisespeciallydifficultforfirmsworkinginthepublicsector.Sheexplainedthatin
herexperience,publicagenciescantakeanywherefromthreetofourmonthstopaycontractors.
Shesaidthatintheprivatesectoritonlytakesacoupleofweekstoreceivepayment.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,reportedthataprime
contractorwithheldpaymentformorethan60daysonapublicsectorprojectwithwhichisfirm
wasinvolved.Interviewee#SD46saidthatitwouldbehelpfulifagenciespostedprime
contractorpaymentdatasothatsubcontractorswouldknowwhentheycouldexpectpayment.
SDTA#9,representingapublicworkstradeorganization,explainedthatalthoughpayment
issuesarenotasprevalentastheywereinthepast,theycanstillposeproblemsforsmallfirms:
Thepaymentshavegottenalotbetterthantheyusedtobefrompublicagencies,[but]the60
90daysthatittakestogetpaidisdifficultforsmallbusinesses.Hewentontosaythatpayment
issuesaremuchmorecommonforsubcontractorsthantheyareforprimecontractors.
Severalintervieweesalsocomplainedofslowpaymentintheprivatesector.Interviewee
#SD21,representingawhitemaleownedfirm,indicatedthatpaymentissuesareasubstantial
barriertoworkingintheprivatesectoraswell:Oneofthetoughestpartsofthebusinessonthe
privatesideisjustgettingpaid.Hewentontosaythatnotreceivingpaymentinatimely
manner(oratall)isabarriertocontractorsprogressandgrowth.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,reportedseveral
incidentsinwhichhehadtroublereceivingpaymentsfromprimecontractorsinboththepublic
sectorandtheprivatesector.Hesaidthatinonecasehisfirmhadtowaitoversixmonthstoget
paid.
Interviewee#SD34,representingawhitemaleownedfirm,saidthatheisoftengiventhe
runaroundwhengettingpaidbyhisclients.Hesaidthathefrequentlyhastofollowupwith
themtogetpaid.
Interviewee#SD41,representingawhitemaleownedfirm,reportedthathisfirmhasover$2
millioninunpaidinvoicesfromprivatesectorclientsthathavegonebankrupt.Hesaid,Weare
incourtnowtryingtolitigate.Gettingpaidisabigriskintheprivateindustry.Iwouldbe
happygetting10centsonthedollarrightnow.
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Interviewee#SD44,representingaHispanicmaleownedfirm,remarkedthatslowpaymentis
oftenanissuewithwhichallfirmshavetodealandindicatedthattheissuedoesnotselectively
affectMBE/WBEfirms:Witheverybusinessyouhave[slowpaymentissues].
Someintervieweessuggestedthatslowpaymentdisproportionatelyaffectssmallfirms.
Interviewee#SD7,representingawhitemaleownedfirm,indicatedthatpaymentsarentgoing
tocomewhenyouthinktheyaregoingtocome.Hewentontosaythatslowpaymentsarejust
ahiccup,notashowstopperforlarge,wellestablishedfirmsbutcouldbecatastrophicfor
minorityorfemaleownedfirmsthataresmallerandlessestablished.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,reportedthatslow
paymentisabarrier,particularlyforasmallfirm.Heexplainedthatmostclientstypicallypay
contractors30daysafterreceivinganinvoice,butthatdelaymakesitdifficultforsmallfirmsto
covercostsinthemeantime.
Interviewee#SD31,representingawhitemaleownedfirm,statedthatslowpaymentisanissue
forsmallfirmsonlargeprojects,becausetheydonothavethecapitaltocoverupfrontcosts.He
said,Nobodyisgoingtoshipyouamilliondollarsworthof[materials]withoutgettingmostof
theirmoneyupfront.Andhewentontoindicatethatbridgeloansaretooexpensivetobe
practical.
Interviewee#SD40,representingawhitemaleownedfirm,reportedthatpaymentdelaysare
difficultforsmallfirmstohandle:The60to90daypaymentisdifficultforsmallbusinesses.I
loveitwhenaguycallsandsaysIneedmycheck.Interviewee#SD40reportedthathisfirm
paysitssubcontractorswithin30days.Hesaid,Wetakealotofprideinmakingsureallofour
paperworkiscorrect.Wedowhatwecallapencilcopyfivedaysbeforetheinvoiceisdueto
ensureourpaymentisontime.
Consistentwiththosecomments,SDTA#1,representingalocalchamberofcommerce,reported
thatpaymentdelaysposeasubstantialproblemforsmallfirms,because,relativetolargefirms,
theyhavelesscapital.
SDTA#4,representingalocalchamberofcommerce,saidthatshehasseengood,smallfirms
struggletomakepayrollasaresultofpaymentdelays.
Afewintervieweesexpressedapreferencetoworkinaparticularsectorbecauseofpayment
considerations.Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,stated
thathepreferstoworkforlargeprivateclients,becausehefindspaymentstobemoresecure:I
prefertoworkforalargeprivatecompanywhoIknowpaystheirbills.
Interviewee#SD35,representinganAsianAmericanmaleownedfirm,saidthatheprefersto
workintheprivatesectortoavoidpaymentdelays:Ipreferprivatework,becauseyougetpaid
soonerasopposedtothepublic.Wealsoprefertoprimeprojectsbecauseofpaymentissues.
Incontrast,Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthathe
preferstoworkinthepublicsector,because,fromalegalstandpoint,paymentsaremuchmore
secure.
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PaymentexperienceswiththeSDCRAA.
ManyintervieweessharedpositiveexperienceswithgettingpaidbytheAirport.Interviewee
#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthathehasneverhad
troublegettingpaidonAirportprojectsandthatinfacttheAirportpaysearlierthanrequired:I
havereceivedtwopaymentsfromtheairportandneitherwasheldtothethirtydays(thelimit
bywhichpublicagenciesarerequiredtopaycontractorsafterreceivinganinvoice).Similarly,
Interviewee#SD21,awhitemaleownedfirm,alsoreportedpositiveexperienceswithbeing
paidonAirportprojects.
Interviewee#SD24,representingawhitemaleownedfirm,indicatedthatwhenheworksasa
primecontractoronAirportprojects,theagencyspaymentscheduleismoreconsistentandless
challengingthanthatofotherpublicagencies.However,hewentontosaythatwhenheworked
asasubcontractoronanAirportprojecthispaymentwasmuchslower.
Interviewee#SD17,representingawhitefemaleownedfirm,reportedthat,ingeneral,herfirm
hasnotexperiencedanyproblemsreceivingpaymentfromtheAirport:WejustemailaPDFand
usuallygetpaidwithin15to20daysfromtheAirport.
Interviewee#SD42,representingawhitemaleownedfirmthatworkedonacontractrelatedto
theQuieterHomeProgram,saidthattheAirportpaidhisfirmonabiweeklybasisinatimely
manneruntiltheagencycancelledhiscontractforreasonsunrelatedtopayment.
AfewIntervieweessharednegativeexperienceswithgettingpaidbytheAirport.Interviewee
#SD28,representingawhitefemaleownedfirm,reportedthatshehasexperiencedonlyone
paymentissuewiththeAirport.Afewyearsago,theAirportbouncedacheckintryingtopayher
firm,butshewentontosaythattheAirporttookcareofthesituationimmediately.
Interviewee#SD35,representinganAsianAmericanmaleownedfirm,explainedthatthe
Airportspaymentpolicymakesitdifficultforsmallfirmstoremaincompetitive:Whenworking
withtheAirport,contractorsarerequiredtopurchasematerialsupfrontwithoutfundsfromthe
Authority.Thisisanissuebecausethewholesalesupplierswanttobepaidwithin30days,andif
youarentgettingpaidbyyourprimeortheagency,itisdifficulttohavethecapitaltokeepyou
afloat.Asasmallbusinessyoucantcarrytheoverhead.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,reportedthatinher
experience,theAirportandotherstateagenciespayquiteslowly:Weweregoingoutof
businessbecausetheydidntpay[quickly].Shecontinued,Wedonthavelines[ofcredit]and
loanswherewecanwait[forpayment].
Denialofpaymentbasedonrace,ethnicity,orgender.
TwoMBE/WBEintervieweesreportedthattheirminorityorgenderstatusplayedarolein
experiencingpaymentdelays.Interviewee#SD10,representinganAfricanAmericanmale
ownedfirm,saidthathehasfeltdiscriminatedagainstwhentryingtobepaid.Hedescribeda
situationinwhichhewasrefusedpaymentbecauseofhisminoritystatus:IhadaguyfromSan
DiegoCountycallmebecausetheywerelateforpayingmeforoneofmyaccounts.Hesaidthe
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checkwasreadybutinsistedthatIcometotheirofficestogetitevenafterIaskedmultipletimes
forhimtosendit.ThemanattheCountyinsistedthathewouldleavethecheckatthefront
deskforme.Interviewee#SD10ultimatelyagreedtopickupthecheck,butoncehearrivedat
thefrontdesktheymadehimgotoanotherofficetopickitup.Oncehearrivedatthesecond
office,awhitemalewhowasholdinghischeckaskedhim,Howdidyougetthiscontract?
Interviewee#SD10saidofthesituation,ItgottothepointthatIcouldntgetpaid.Ihadtogoto
thecitycounciltohelpmegetmymoney.OncehesawthecolorofmyskinheaskedhowIgot
thecontract.ThiswaswiththeCountyofSanDiegoaboutfiveyearsago.Hewantedtoknow
howablackmangotthisopportunity.Thisisthenatureofthebusiness.
Interviewee#SD2,representingawhitefemaleownedfirm,alsoreportedthatshehasbeen
discriminatedagainstincertainpaymentsituations,albeitseveralyearsago.Sheprovidedan
examplefrom20yearsagowhensheneededpaymentfromaprimecontractortomakepayroll.
Shesaidthatshevisitedtheprimecontractoraboutreceivingpayment,andhetoldherthathe
wasnotgoingtopayher.Shesubsequentlysentherhusbandtotalktotheprimecontractor,and
hewroteheracheckimmediately.
Recommendationsrelatedtopayment.
Afewintervieweesrecommendedthatpublicagenciesbemoreproactiveinensuringthat
subcontractorsgetpaidinatimelymanner.Interviewee#SD20,representinganAsian
Americanmaleownedfirm,statedthatpublicagenciesneedtomonitorhowquicklyprime
contractorspaytheirsubcontractors:Makesuretheprimepaysthesubs.
Interviewee#SD2,representingawhitefemaleownedfirm,suggestedthatpublicagencies
followCaltransexampleandlistwhentheypayprimecontractorsontheirwebsites.She
indicatedthataccesstopaymentinformationhasmadeasubstantialdifferenceintermsof
subcontractorsbeingpaidquickly.
Interviewee#SD35,representinganAsianAmericanmaleownedfirm,suggestedthatpublic
agencies(andtheAirportinparticular)playtheroleofwatchdogtoensurethatsubcontractors
getpaid:Ifasub[contractor]isnotgettingpaidbyagovernmentagencyortheirprime
contractor,thenthepublicagency,inthiscasetheAirport,shouldbecomeawatchdogforthose
smallsubcontractorbusinesses.Hecontinued,Notgettingpaidontimecanbreakabusiness.

SDTA#5,representingagovernmentadvisorycommissiononminorityissues,recommended
thatpublicagenciesfigureoutawaytoensurethatfirmsgetpaidquickly:Cashflowisvery
importanttosmallbusinesseswithpayroll,etc.[Publicagencies]havetocreatewaysforpeople
togetpaidquicklyandontime.If[they]arentsensitivetothoseneedsthesebusinesseswillgo
under.
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ConsortiumAnecdotesRegardingExperienceswithPayment
Thefollowinganecdotesregardingpaymentwereobtainedfrominterviewsthatthestudyteam
conductedinconnectionwithBBCs2009Consortiumstudy.
Someintervieweesreportedpositiveexperiencesbeingpaidbyprimecontractorsonprivate
sectorprojects.[Interviewees#CON:8,13,18,20,22,28,29,31,37,49,51,56,CONTA#2].
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthatpaymentbyprimecontractorsintheprivatesectorisexcellent.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehashadaverygoodexperiencebeingpaidbyaprime
contractoronprivatesectorprojects.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthathehashadagoodexperiencebeingpaidby
primecontractorsintheprivatesector,butstatedthatisduetothecaliberofprimecontractors
thathedoesbusinesswith.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthathehas
hadpositiveexperiencesbeingpaidonprivatesectorprojects.Hestatedthathemakes
arrangementstohavehismoneyavailableattheendoftheprojectorupfrontassegmentsofthe
projectarecompleted.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatintheprivatesectorhetypicallyhasgoalsonhisprojectswhich
dictatehispayschedule.Hefeelsthismakesiteasierforhimtogetpaidbecausetheprime
contractorcanseetheresults.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehashadapositiveexperiencebeingpaidbyprimecontractorsonprivatesector
projects.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedthatpaymentbyprimecontractorsintheprivatesectorisfairlyprompt;atthe
veryleasthehasbeenpaidinaccordancewiththeagreeduponterms.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthatpaymentbyprimecontractorsonprivatesector
projectshasbeengoodandprompt.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatintheprivatesector,
subcontractorsreceivetimelypaymentaccordingtotheircontractswiththeprimecontractor.
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Someintervieweesreportednegativeexperiencesbeingpaidbyprimecontractorsonprivate
sectorprojects.[Interviewees#CON:11,12,14,15,23,30,33,36,38,39,43,45,52,57,PF
#19].Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,stated
thatshedidhaveaproblematonepointintimebeingpaidbyprimecontractorsonprivate
sectorprojects;sheidentifiedalackoffundsasathesourceofthisproblem.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthepaymentintheprivatesectorhasbeenterrible,somuchsothattheyarenolonger
interestedinpursuingworkintheprivatesector.Hestatedthatwithneworquestionableclients
theyrequesta30percentretainer.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathehasnotalwayshadgoodexperiencesbeingpaidbyprimecontractorsonprivatesector
projects.Hestatedthattheyarecurrentlyworkingonacontractoutofstateandtheprime
contractoristwotothreemonthsbehindonbilling;thishascausedtheprimecontractortobe
threetofourmonthsbehindonpayingthesubcontractors.Hestatedthatwhentheprime
contractorisnotsharpthesubcontractorwillsuffer.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,reportedthatpaymentbyprimecontractorsonprivatesectorprojectsis
slowandoftenproblematic.Manytimes,Interviewee#CON15reportsrequirementsofreleases,
signatures,etc.forvendorsandpaymentthereismuchmorepaperworkintheprivatesector.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,reportedthatpaymentfromprimecontractorsintheprivatesectorisusually
late.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathisexperiencebeingpaidbyprimecontractorsintheprivatesectorisaboutthe
sameasonConsortiumprojects;hestatedthatsometimesittakesalottogethismoney.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatherexperiencebeingpaidbyprimecontractorsintheprivatesectorhasnotbeentoo
good.Shestatedthatiftheprimedoesnotgetpaid,wedonotgetpaid.Shestatedthat
paymentintheolddayswasbetterinthatyoucoulddependongettingpaidwithin60toone
hundred100days.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshehaddifficultexperiencesgettingpaidbyprimecontractors
ontwoprivatesectorprojects;theyclaimedtheyhadtowaittogetpaid.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,reportedthatpaymentintheprivatesectorhas
beenveryslowinsomeinstances,whichisverydifficultforasmallfirmtocarry.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatpaymentbyprimecontractorsintheprivatesectorhasalsobeenslow.
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Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthatinhisexperienceprimecontractorsonprivatesectorprojectshavebeenslowto
makepayments,whichisdifficultforsmallbusinesses.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatpaymentbyprimecontractorsonprivatesectorprojectsis
veryslow.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,reported
thattheyhaveexperiencedlatepaymentbyprimecontractorsintheprivatesector.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
statedthatpaymentbyprimecontractorsintheprivatesectorvariesagreatdealandis
dependentuponthecontractor;hestatedthatsomefirmsareslowandothersarejustokay.
PF#19,anindividualrepresentingaminorityownedconstructionmanagementsmallbusiness
firmprovidedoraltestimonyatapublicforumheldonOctober20,2009.Hesuggestedthatthe
paymentprocesstosmallbusinessesbechangedbecause,inhispersonalexperience,he
sometimesdidnotreceivepaymentsforuptofiveyears.Inthesecases,hismoneywasheldasa
retainerbythePrimecontractor.
Otherintervieweesreportedmixedexperiencesbeingpaidbyprimecontractorsonprivate
sectorprojects.[Interviewees#CON:1,2,4,9,27,CONTA#1].Interviewee#CON1,anonDBE
HispanicAmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,statedthat
intheprivatesector,90percentoftheprimecontractorspaythemontime;theother10percent
dragoutpaymentorstatetheywillpaywhenpaid.Hestatedthatinthepublicsector,theprime
contractorsalsoagreetopaywhenpaid.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthatarchitectsingeneralintheprivatesectoroftendefaultonpayment;developers
andownersareverygoodinpaying,andwiththeexceptionofthecurrenteconomiccrisis,
generallypayontime.Interviewee#CON2saidthathehasheardfromotherconsultantsthat
theyarepaidinatimelymanneronpublicsectorprojects.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthattheonlydifferenceinbeingpaidbytheprimecontractorson
privatesectorprojectsisthathedealtdirectlywiththedeveloperorownerorcontractorsoitis
adirectoneononerelationshipwhereasinthepublicsectorthereisanotherstepinvolved.
Interviewee#CON4hastosubmithisinvoicetotheprimecontractorandthentheprime
contractorincorporatesitintotheirinvoiceanditgoestotheclient.Asaresult,Interviewee
#CON4statedthatittakeslongertogetpaidinthepublicsectorbutontheotherside,withthe
privatesector,heexplainsthatyoualwayshavetheriskoftheclientyouareworkingforgoing
bankruptordisappearingandnevercollectingyourmoneywhereasinthepublicsectoryou
knowyouwillgetpaid;itisjustaslowprocess.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE131

paymentisthesameintheprivatesectorasitisinthepublicsector.Hestatedthatwhena
problemarisesitismoredifficulttoremedyit.Hestatedpaymentwasokayupuntilthe
beginningofthisyear;hestatedthattheeconomyhasnowaffectedpayment.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,reportedthatpaymentbyprimecontractorsonprivatesectorprojectshas
beenbothpositiveandnegativeyoueitherarepaidquicklyornotatall.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatthetrendinthe
privatesectoristhatthereisamuchtighterrelationshipbetweenthesubcontractors,prime
contractors,andowners;paymentandtimingofpaymentisnegotiatedsothattheseproblems
arenotasprevalentintheprivatesector.
Someintervieweesreportednoexperienceswithbeingpaidbyprimecontractorsonprivate
sectorprojects.[Interviewees#CON:16,40,44,47,48,50,54].
Severalsubcontractorintervieweesreportedthattimelypaymentbyprimecontractorsisan
issuethroughouttheindustryandacrosstheprivateandpublicsectors.[Interviewees#CON:
5,7,21,22,37,52,CONTA#2].Interviewee#CON5,anemployeeatanonDBEwhitemale
ownedelectricalengineeringbusinessintheSanDiegoarea,statedthatreceivingpaymentisa
problemthroughouttheindustry.Hestatedthathiscompanyiscurrentlyhavingproblemswith
primecontractorsoncityprojectsbecausetheprimecontractorswanttopaythesub
consultantswhentheprimegetspaid.Interviewee#CON5statedthatbecausehiscontractis
withtheprimecontractorandnottheprimecontractorsclient,hefeelsthathiscompanyshould
bepaidwhentheworkiscompleted.Interviewee#CON5statedthatthisisanindustrywide
problem,butithasnothingtodowithbeingaDBEortheConsortium;itisasubconsulting
issue.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthatingeneralallsubcontractorshaveatough
timeobtainingpaymentfromprimecontractorsonbothprivatesectorandpublicsector
projects.Hestatedthatmanytimesownersdonotpayontimeandinmostcasestheprime
contractorwillnotpaysubcontractorsuntiltheprimecontractorispaid.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatherexperienceswithreceiving
paymenthavevaried;shestatedthatsomeexperienceswereawfulandoneincidentalmostput
heroutofbusiness.Shestatedthatthankfullythefederalgovernmentnowhasaprompt
paymentactforsmallbusinesseswheresheispaidwithin30days.Shestatedthatthereis
similarlegislationunderCalifornialaw.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatthebarriertoreceivingpaymentislatepaymentbyaprime
contractor.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatthelackofenforcementoftheagreedpaymentscheduleisabarriertoreceiving
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE132

payment.Hestatedthatthereisnoonemakingsurethatprimecontractorspaytheir
subcontractorswithinacertaintimeperiod.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthattheexperienceof
beingpaidbyaprimecontractoronpublicprojectsvariesdependingontheprimecontractor
andtherelationshipbetweentheprimecontractorandthesubcontractor.Hestatedthatsome
subcontractorsmaybetimelypaid(withinthe30daybillingperiodorevensooner)ifthe
subcontractorhasagoodrelationshipwiththeprime.Hestatedthatitisaproblemwhenprime
contractorsgetpaidandthereisnowaythatsubcontractorsknow.Hestatedthatsomeagencies
havetriedtomakeprimecontractorsinformsubcontractorswhentheyarepaid,butthepractice
ofnotinformingthesubcontractorsisrampant.Generally,hismemberstrytostimulatetheir
owncommerceamongbusinessesintheprivatesectorratherthantorelyonpublicwork.
Someintervieweesidentifiedpaperworkandrelatedissuesasabarriertoreceivingpayment.
[Interviewees#CON:8,9,13,14,16,17,27,30,35,37,CONTA#1].Interviewee#CON8,awhite
maleownerofanenvironmentalconsultingfirmintheSanDiegoarea,statedthatinthenon
Consortiumpublicsector,thenoticeofcompletionisnotalwaysknowntothesubcontractorsor
theprojectmanager;thishesaysisabarriertoreceivingpayment.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,identifiedthe
rejectionofinvoicesfortrivialreasonslikeleavingoffanexpenseasabarriertoreceiving
payment;hewasnotsurewhetherthathadeverhappenedwithoneoftheConsortiummember
agencies.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,identifiedagenciesfailuretotimelyreviewinvoicesasabarrierto
receivingpayment.Interviewee#CON13statedthatononeoccasionL.A.CountyMTAwasinthe
processofinstallinganewbiddingsystem;paymentwasdelayedfortwomonthsbecausethe
systemdidnotwork.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatthebiggestbarriertoreceivingpaymentisthatoftentheyareworkingwithaprocurement
agentdealingwithanengineeringcontractthatisnotgearedtowardthetypeofbillingthatthey
useinthemarketingarea.Hestatedthatbillingformarketingoftencoversintangibleitems,but
theprocurementagentwillrequesthiscompanytoadapttheirbillingtoamoretangibleformat.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatsometimespaperworkissuesprecludefastpayment,andalsostated
thatallpaperworkmustbefilledoutcorrectlytoreceivepayment.
Interviewee#CON17statedthatpaymentsaresubjecttoalotofscrutinybeforetheyaremade,
andiftherewereanybarrierstopaymentitwouldbeacovertnotanovertaction.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatittakesforevertogetcontractsapproved.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE133

Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatsometimestheproceduresandpaperworkassociatedwithpaymentcanbe
quitetedious;ifoneitemismissingitcanpushbackhispaymentonprojectsandworkbeing
done.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,feltthatamajorbarriertoreceivingpaymentisthepayeeslackofpayment
technology.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
identifiedpaperworkasonebarriertoreceivingpayment.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthattherearea
numberofbarrierstoreceivingpayment,includingexcessivepaperwork,failingtocomplete
paperworkontime,notmeetingtheexpectationoftheprimecontractor,andtheclientnotbeing
satisfied.
Someintervieweesidentifiedtheowner/clientsfailuretopaytheprimecontractororfailure
toapproveaprojectasabarriertoreceivingpayment.[Interviewees#CON:12,23,33,56].
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatacommonbarriertoreceivingpaymentiswhentheultimateclientdoesnotpaythe
primecontractorandthentheprimecontractorcannotpaythesubcontractor.Interviewee
#CON12statedthatanotherbarrieriswhentheclientdoesnotapprovetheproject.Interviewee
#CON12statedthathewasrecentlyasubcontractortoanarchitectwhohadtwocontractswith
aschooldistrict;theywereattractedtoassistonthiscontractbecausetheschooldistrict
guaranteespaymentwithin30days.However,itturnedoutthatthatmeantpaymentwithin30
daysofprojectapprovalwhichtookoverayear;hestatedthiswasgutwrenching.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthattheimpedimenttoreceivingtimelypaymentintheprivatesectoris
duetothefactthattheprimecontractorisusuallywaitingtobepaid.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattheonlybarriertopaymentiswhentheprimecontractordoesnotgetpaid.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,notedthatthey
haveencounteredissuesbeingpaidbytheaveragecustomeralthoughtheyhavereceived
paymentintheend.
Someintervieweesidentifiedvariousotherissueswithrespecttotheprimecontractorthat
actasabarriertoreceivingpayment.Interviewee#CON1,anonDBEHispanicAmericanmale
ownerofanelectricalcontractingfirmintheSanDiegoarea,statedthattheprimecontractors
lackofadequatefinancingisabarriertoreceivingpayment.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthatdelayonthepartoftheprimecontractorisabarriertoreceivingpayment.
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Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathehasreadbooksandgonethroughclassesonfinancingprojectsand
hemakessurethathispeoplegetpaid.HestatedthathehadanissuegettingpaidonaHUD
projectinwhichheblewthewhistleonacrewthatwasdoinghisworkafterhours.Thiswasan
incidentinwhichhewasasubcontractor,buthetoldontheprimecontractorwhowastaking
awayhisworkafterhoursandonweekendsagainsttherulesbecausehewouldhavereceived
timeandahalfonthisworkandtheywerelikelygettingmuchless.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatpeoplearesupposedtopayyouforworkdeliveredbutthatno
oneiswatchingtheprimecontractorstomakesurethattheypaytheirsubcontractors.She
statedthatifshecomplainsthensherunstheriskoflosingfuturecontracts.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thattheonlybarriertoreceivingpaymentisunexplainedlatepayment.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatprimecontractorswanttopaytheirsubcontractorslast;
theydonotfollowthePromptPayActsetforthintheC.F.R.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthattheprocesstoreceivepaymentisslowand
cumbersome.Hestatedthatthereshouldbesomesortofchecksandbalancessysteminplace
thatwouldallowsubcontractorstoreceivepaymentdirectlyfromtheprojectownerinsteadof
havingtorelyonpaymentfromtheprimecontractor.
Mostintervieweesreportednobarrierstoreceivingpayment.[Interviewees#CON:2,3,4,6,
10,11,15,18,19,20,21,24,26,28,29,34,38,40,42,43,44,47,48,49,50,53,54,55,57,58,
CONTA#2].Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservices
companyintheSanDiegoarea,didnotthinkthattherearegenerallyanybarrierstoreceiving
payment,butnotedthatonemethodologyfordelayingapaymentistorejectaninvoice,
whetherbecauseoftheformatorotherwise.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,didnot
identifyanybarrierstoreceivingpaymentanddidnotfeelasthoughherrace,ethnicity,or
genderhaseveraffectedherabilitytoreceivepayment.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatshewasawareofbarrierstoreceiving
payment,butshecouldnotspecifyanytimeinwhichsheexperiencedsuchabarrier.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthattherearegenerallyno
barrierstoreceivingpayment.Hestatedthatifacontractorisqualified,heisusuallypaidunless
thereareissuesofnonperformanceorworkmanshipdisputes.
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Themajorityofintervieweesreportedthattheirrace,ethnicity,orgenderdoesnotaffecttheir
abilitytoreceivepayment.[Interviewees#CON:1,2,3,4,5,6,7,8,9,10,11,12,13,15,16,17,
18,19,20,21,22,23,24,26,27,28,29,30,31,33,35,38,39,42,43,44,47,48,49,52,53,54,
55,56,57,58,CONTA#1,2].Interviewee#CON5,anemployeeatanonDBEwhitemaleowned
electricalengineeringbusinessintheSanDiegoarea,statedthathecannotspecificallysaythat
race,ethnicity,orgenderhaseveraffectedanybusinesssabilitytoreceivepayment,butthought
thatallminoritiescouldsaythatithasatsomepoint.HestatedtherewouldbenoEEOCand
agenciesofthatnatureiftherewerenoproblems.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedhedoesnotfeelthattherace,ethnicity,or
genderofabusinessowneraffectsthebusinesssabilitytoreceivepayment.Hestatedthatthe
qualityofworkismuchmoreafactorthanrace,ethnicity,orgender.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatshedidnotfeelthatrace,ethnicity,orgender
hasaffectedherabilitytoreceivepayment.Sometimesitislate,butthatisnotaresultof
discrimination.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatthesizeofhisfirmaffectshisabilitytoreceivepaymentmoreso
thanraceorgender.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathisrace,ethnicity,orgendermayhaveaffectedhisabilitytoreceive
work,butnottoactuallyreceivepayment.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathedoesnotthink
thatrace,ethnicity,orgenderaffectshismembersabilitytoreceivepayment.Hestatedthat
primecontractorsplaygamesnomatterwhothesubcontractoris.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathedoesnotfeelthat
race,ethnicity,orgenderhaseveraffectedabusinessownersabilitytoreceivepayment.
Someintervieweesreportedfeelingthattheirrace,ethnicity,orgenderhasaffectedtheir
abilitytoreceivepayment.[Interviewees#CON:25,34,36,37,40,45,50,51].Interviewee
#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,reported
feelinginstinctivelythathisrace,ethnicity,orgendermayhaveaffectedhisabilitytoreceive
payment.HestatedthathedoesnotbelieveCaucasianownedfirmshavethesameproblem
beingpaid.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,doesfeelasthoughhergenderhasaffectedherabilitytoreceivepayment.She
believesthatsomelargefirmsmaynothavepaidherduetohergender.Shestatedthatshehad
noconcreteevidenceofthis,butinstinctivelyfeltittobethecase.Shebelievesthathergender
hasaffectedherbusinessrelationshipsgenerallyandinadditiontopaymentissues.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE136

Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatindirectlyshebelievesthatherraceorgenderhasaffectedher
abilitytoreceivepayment,butitisnothingthatshecanprove.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatheknowsbeyondtheshadowofadoubtthatracehasaffectedhisabilitytoreceive
payment.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
reportedfeelingasthoughhisethnicitymayhaveaffectedthetimelinessofhispaymentonone
Consortiumproject.HestatedthatheturnedinhisbillinginFebruary,butwasnotpaiduntil
Maywhiletheothersubcontractorswerepaidamonthbeforethat.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,feltthathisracehasaffectedhisabilitytoreceivepayment,
butcouldnotidentifyanyexperiencethathasleadtothisbelief.
Acoupleofintervieweesdidnotknowwhethertheirrace,ethnicity,orgenderhasaffected
theirabilitytoreceivepayment.[Interviewees#CON:14,46].Interviewee#CON14,aLatin
AmericanmaleownerofaDBEcertifiedmarketingfirm,didnotknowwhetherrace,ethnicity,
orgenderhasaffectedhisabilitytoreceivepayment.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathewouldneverknowwhetherhisrace,ethnicity,orgenderwould
affecthisabilitytoreceivepaymentbecauseyoudonotknowwhatpeoplesayaboutyouwhen
thedoorcloses.
I.ExperienceswithFinancing,Bonding
andInsurance
BGPAAStudyAnecdotesRegardingExperienceswithFinancing,Bonding
andInsurance
Someintervieweesreportedissuesrelatedtoobtainingfinancing.[Interviewees#BGP:1,3,4,
6,8,10,11,14,TA#1,TA#2].Interviewee#BGP1,theAfricanAmericanmaleownerofan
MBE/DBEcertifiedarchitecturefirm,statedthattheyhavenothadtoobtainfinancingtoruna
project,buthesaidthatcontractorsmayhavedifficultiesobtainingfinancingbecausetheyhave
20peopleoutthereworkingandtheyhavetomakepayroll.
Interviewee#BGP3,thecoownerofawhitewomanownedconstructionfirm,saidthat
obtainingfinancingisdifficultformostsmallbusinesses.Hesaid,Thebanksarereallytough
rightnow.Ivebeentalkingtomybankerandhesaidmostofthecontractorsheworkswith
havelosttheirlineofcredit.Hestatedthathisfirmhasnotexperiencedbarriersrelatedto
obtainingfinancing.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE137

Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthatobtaining
financingwasapotentialbarriertopursuingbusinessopportunities.Hesaid,LetssaythatI
wastobidajobthatstartedinSeptember.IneedtohaveallmysuppliesinbyAugust,somy
billingcycleisinAugust,butIwontgetpaidbythecontractoruntil30daysfromtheSeptember
startdate.Wheredoesanewbusinessfindthemoneytofinancethis?IftheAirportwas
proactiveandgotthesubspaidontime,youcanusuallymakeitworkwithoutneedingfinancing,
butthatsnotthereality.Hesaid,Financingisahugehurdle,anditshardtoget.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthatobtainingfinancingthefirstonetothreeyearswasdifficult,butonceIhadthe
firmsfinancialhistoryestablished,itwasntdifficult.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatfinancingisabarrier.Hesaid,Ithinkrightnowthebarrier[associatedwith
financing]isuniversal.Inthecurrenteconomytheyveraisedthebaronqualifications.Its
almostlikeyouhavetonothavetohavethemoneyinorderforthemtoapproveyou.Itsvery
difficult.Weveactuallynotbeenabletogetanyfundinginthelastyear.Wevehadtodoour
fundingthroughcreditcards.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatobtainingfinancingwasa
barrierwhenthefirmbeganwhennoonewantedtoloan[thefirm]money,anditisstill
difficultnowthatmoneyisalottighter.Hesaidthathedoesnotthinkthattheraceorethnicity
ofthefirmcontributedtothisbarrier.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatfinancingisextremelyhardtoget,andbanksarevery,veryslowto
approveanykindofafinancingarrangement.Hesaidthattheindividualownerofthecompany
isthepersonrequestingfinancing,andtherestofthecompanydoesnotreallyparticipate.He
statedthatpartofthereasonthecompanyhasnotgottenintothegroundhandlingbusinessis
becauseoftheexpenseinvolved.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatobtainingfinancingwasabarrierduringtheearlierdaysofthebusinessbutnot
recently.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatobtainingfinancingisreallyaproblem,butwedontreallyaddressthoseissues.Were
notworriedaboutthemoney;wewantthecontract.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatobtainingfinancingisdifficultinthismarketand
thatthebarrierisrelatedtoraceandethnicity.
Otherintervieweesreportednoissuesrelatedtoobtainingfinancing.[Interviewees#BGP:2,5,
9,12,13,15,16].Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanowned
securityservicesfirmindicatedtheydidnothaveanyproblemsobtainingfinancing.Hesaid,
nowisagreattimetostartaminorityorwomenownedbusiness,oranysmallbusiness,
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE138

becausetheeconomyisstruggling,interestratesarelow,anditstheperfecttimeforanysmall
business.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthathehasnot
experiencedanyspecificbarrierstoobtainingfinancing,buthestatedthatopportunitiesto
obtainfinancing,particularlycreditlines,disappearedin2008.
Someintervieweesreportedissuesrelatedtoobtainingbonding.[Interviewees#BGP:2,4,12,
13,TA#2].Interviewee#BGP2,thesalesmanagerofanAsianAmericanowned
MBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatourratingusedtobereally
good,butthenwe[performedsomework]for[apublicagency],andtheywerentallgreat
profitsforus,sooutratingwentdownalittlebit.Itsbeenalittlehardertobondhigherexpense
contractssince[then].
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,saidthatBonding
isnotanissueformostguyswithgoodcredit.Iftheirbusinesshassuffered,thenIcouldsee
bondingasatoughthingandabarrier.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,statedthatthecompanyrarelyhasbondingrequirements.Theysaid
thatwhenitisrequired,itcreatesalittlestressforthecompanyandalittlestrainonthecash
flowbecausethecompanyisnotusedtohavingtobuya$25,000bond.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatobtaining
bondingisabarriertoobtainingwork,buthedoesnotthinkthattheAuthoritysbonding
requirementsaresooutofline.Itsatypicalbidbondandperformanceandpaymentbond,
whichisfine.Itsjustthatthatmarketreallytightenedup,andifyouhavealapseinyour
bonding,wherewemightbedoingalotofprivateworkandnotalotofpublicwork,itslike
startingalloveragain.Hesaidthathethinksbondingisagoodrequirement,[and]paying
oneandonehalforupto3percentofaprojectsvaluetohavethatinsuranceisagoodidea,
butontheconstructionside,itsbecomeharderandhardertoobtainthosebonds.Hesaidthat
thecompanymayhaveshiedawayfromsomeofthepublicworkbecauseofthebonding
requirements,buthesaidthatthecompanyhasrecentlybeenabletoandrequiredtoacquire
bondingforsomeprivateprojectsthatwerentnecessarilyrequiredbefore.Headded,Idont
seealotofbidbondsintheprivatesector,butweare[seeingrequirementsfor]performance
andpaymentbonds,andalthoughthepublicsectorrequiresbondsforanything$25,000and
above,theprivatesectorusuallyonlyrequiresbondsforanythingover$100,000.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatbondingisalwaysanissuebutisrelatedto
dollarsnotrace,ethnicity,orgender.Hesaidthatbondingpresentsasignificantbarriertoits
members.Hesaid,Werelookingatjobs,likeohmanbutthebonding,wecantbonditwecan
doitbutwejustcantbondit.[Afirmcantobtainbonding]unlessyouhaveadequatecashflow.
Thebondingcompanieswantsomuch,incollateral,andtheydontwanttotouchyou,rightnow
weneedtocallsomebodyelse,somebodymoresolvent.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE139

Otherintervieweesreportednoissuesrelatedtoobtainingbonding.[Interviewees#BGP:1,3,
5,6,9,11,12,14,15].Interviewee#BGP12,ageneralmanagerandanaccountmanagerofa
WBE/DBEcertifiedconstructionsupplyfirm,saidthatthecompanyhasalwaysbeenabletoget
aroundbarrierstoobtaininginsurancebecausethecompanycarriesanofficepolicy.Theysaid
thatbusinessessometimeswantthecompanytoaddthemasanadditionalinsured.Theysaid
thatthecompanyisnotatthatpointyetbecausethatslikea$25,000ayearpolicy,whichis
alittleoutofreachfortheirsmallbusiness.Interviewee#12saidthatittakessome
negotiating,butthecompanyhasbeenabletostayawayfromthereallyhighaggregate
policiesandhasbeenabletoworkwithcontractorsandsubcontractorstomakethedealwork.
Thesaidthatsofar,thecompanyhasnotlostanycontractsorsalesbecauseofit,butthetime
maycomewhen[it]mayhavetomodifythat.
Someintervieweesreportedissuesrelatedtoobtaininginsurance.[Interviewees#BGP:2,5,8,
10].Interviewee#BGP2,thesalesmanagerofanAsianAmericanownedMBE/WBE/DBE
certifiedmaintenanceandrepairfirm,statedthathedoesnotdealdirectlywithinsurance,but
fromwhatIunderstand,itsnoteasyforasmallbusinesstogetinsured.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatobtaining
insurancemaybeabarrier.Hesaid,Largerclientsfrequentlywantustohavealeveloutofline
forthetypeofserviceswereperforming,andinmanycases,uninsurable.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatobtaininginsuranceis
veryexpensiveandisabarrierformanyfirms,especiallyfirmsthatworkprimarilyinthe
privatesectorandsmallerfirmsthatarenotinsured.Hesaidthatmostagenciesrequire
professionalerrorsandomissionsinsurance,whichcostsbetween2and4percentofthe
firmsgrossfee.Hesaidthatthatmeansthatifthefirmhiresasecondtiersubcontractorand
paysthesubcontractor$10,000,thefirmmustpaya$400insurancefeeforthatwork.He
reportedthatpublicagenciesaretendingtorequirefirmstohavehigherinsurancelimits.He
addedthatagenciespreviouslyrequireda$1millionlimitperclaimoroccurrence,andnow,
manyagenciesrequirea$2millionlimit,andsomearerequiringupto$5or$10million.Hesaid
that$5and$10millioninsurancelimitsarenotavailableforasmallbusiness,sothese
requirementsareeffectivelyexcludingsmallbusinesses.Interviewee#10saidthathedoesnot
recallwhethertheAuthorityrequirestheseextremeinsurancelimits.
Otherintervieweesreportednoissuesrelatedtoobtaininginsurance.[Interviewees#BGP:1,
6,9,11,13,14,15,16,TA#2].Interviewee#BGP11,amanagerofanAsianmaleownedDBE
certifiedcleaningservicescompany,reportedthatthecompanyhashadnoproblemobtaining
insuranceandthatthecompanyhashadagoodrelationshipwiththoseprovidinginsurance
products.Henotedthatautoinsuranceattheairportisgoingway,wayup,[and]theL.A.
Airportisincreasing[its]insurancefromatotalof$5millionto$10million;theyredoublingit.
Hesaidthattheseareexpensesthatcompanieshavetoabsorbbecauseairlineswillnot
accept[price]increases.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthathehasnot
experiencedobtaininginsurancetobeabarrier.Hesaidthathehasnotseenexcessiveinsurance
requirements,andhisonlyvendorrequiringsubstantialinsuranceistheAuthority,which
requiresthecompanytohaveaprettyhighliabilityinsurancefortheairportbecause[the
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE140

companydoes]workontherunwaysandstufflikethat.Hesaidthatbecauseofthehighcost
ofinsurance,thecompanyreallyhastowatchtomakesurethatthevalueof[its]workwiththe
Authorityissufficienttojustifythecostoftheinsurancebecausethecostoftheinsuranceis
basedon[thecompanys]grosssales,notjustitsworkwiththeAuthority,andif[thecompany
is]onlydoingsomuchworkovertherebut[is]payingforthatpolicy,ithastobesurethatthe
incomegeneratedjustifiesthecostofinsurance.Headdedthatthecompanyvaluesits
relationshipwiththeAuthority,though,andtiestodowhatitcantocontinuethatrelationship.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatobtaininginsurance
wasnotabarrier.Shesaidthattheinsurancerequirementshavebeenappropriateforthemost
part.Shesaidthatsomeagencies,particularlytheportsandtheairportauthoritieswherethey
dealwithanawfullotoftrucksandthatkindofstuff,havesomebizarrerequirements.The
CityofL.A.[requires]thatyouhaveaseparateautoridereventhoughwerenevergoingtobe
drivingourcaronthetarmac.Shesaidthatthecompanyhastriedcontestingsomeofthese
requirements,andthenitgetskickeduptoriskmanagement,anditusuallydoesntdousany
good,sowejustcarrytheadditionalridersthatweneed.Shesaidthatthiscausesafinancial
impact,butitisnotabarriertoobtainingthebusiness.
Acoupleofintervieweesreportedthatrace,ethnicity,orgendermayaffectafirmsabilityto
obtainfinancing,bondingorinsurance.[Interviewees#BGP:4,TA#2].Interviewee#BGP4,a
projectmanagerofaWBEcertifiedconstructionfirm,statedthatthereisdiscriminationin
obtainingfinancing,bonding,materialsandsuppliesorotherproductsorservices.Hesaid,Its
allaperceivedriskthing.Theydontreallylookatthebusiness.TheyseeMBEorWBE,and
theressomepreconceivedthingthattheyresmallandineffective,thattheyreonlythereto
satisfysomeonescheckbox.
Otherintervieweesreportedthattheydidnotfeelasthoughrace,ethnicity,orgender
affectedabusinessesabilitytoobtainfinancing,bondingorinsurance.[Interviewees#BGP:2,
3,6,8,9,10,11,12,13,15].
Afewintervieweesmaderecommendationsforimprovingaccesstofinancing,bondingand
insurance.[Interviewees#BGP:10,13,TA#2].Interviewee#BGP10,aprincipalatan
engineeringfirm,recommendedthatagencieswritecontractsmorefairlyandpayspecific
attentiontoCaliforniaCivilCode[Section]2782.8,whichhesaidprohibitsapublicagency
fromrequiringaprofessionaltoindemnifyanddefendthatagencyunless[itis]negligent.He
reportedthat[m]anyagencieswill[include]anindemnificationclause[inacontract]that
completelyignoresthisprohibitioncausingfirmstoputtheirfirmatriskwitheachcontract.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatbanksjustneed
toopentheirdoorsalittlebitmore.Hestatedthathepreviouslyusedacreditlinetoassistwith
thingssuchaspayroll,andothersuseittoassistwithcapitalfinancingandtoassistwhenthey
arewaitingforpayment.Hesaidthatevencompanieswithagoodhistoryarefeelingthepinch.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,suggestedthattherebebondingassistanceofferedtosmall
businesses.Hesuggestedthatthebondingpremiumcouldbeputintothecontractorscostand
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE141

thatfeecouldbeaddedtothebottomlinebutitwouldntcomeoutofthecontractorspocketup
front
SDCRAAAnecdotesRegardingExperienceswithFinancing,Bonding
andInsurance
Thefollowinganecdotesregardingexperienceswithfinancing,bonding,andinsurancewere
obtainedfrominterviewsthatthestudyteamconductedinconnectionwiththe2009SDRCAA
study.
Manyintervieweesreportedthatfinancingandbondingarebarrierstosuccessinthepublic
andprivatesectors.SpeakinggenerallyaboutdoingbusinessinCalifornia,SDTA#3,
representingalocalchamberofcommerce,indicatedthatobtainingfinancingisgenerallyvery
difficultinSanDiego,particularlyinthecurrentmarket.Shealsostatedthatoperatingexpenses
areveryhighinthestateofCalifornia:ItsexpensivetodobusinessinCalifornia.Shelisted
workmanscompensation,livingcosts,andutilitycostsassomeofthereasonswhyoperating
expensesaresohigh.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,describedfinancingas
alargebarrier.Hecontinued,Ittakesoperatingandworkingcapitaltobecompetitive.The
moneyallowsyoutobevisible.IfIhadcapital,Idbebetteroff.Interviewees#SD16
explainedthatheappliedforaloaninthepastbutwasdenied.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,saidthat,unlikelarge,wellestablishedfirms,smallfirmsdonothavethefinancialclout
toreceivepreferredratesonloans.Sheremarkedthatsmallfirmshavetotaketheloansthat
theycangetandbegrateful.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,reportedthatfinancingisasignificantbarriertobeingsuccessful.Heexplainedthatin
hisfirmslineofwork,firmshavetopayhighoperatingexpensesthattheawardingagency
reimbursesatalaterdate.Thus,firmsgenerallyhavetotakeoutloanstocoverthoseexpenses.
Interviewee#SD9,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,reportedthatobtainingaloanisverychallengingforsmallfirmsandthattheprocessis
becomingstricter.Shesaidthatwhenherfirmtriedtogetaloantheyhadtoapproachseveral
differentbanks.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,explainedthatcreditis
extremelytightinthecurrentmarketandparticularlysoforsmallfirmsthatarenotwell
established.Regardingcreditforsmallerfirms,heaskedrhetorically,IfIamabank,wouldI
loanmoneyto[someone]withnoexperience?Interviewees#SD20wentontoexplainthatthe
processofobtainingfinancingisalsotimeconsumingandrequiresagreatdealofeffort.
Interviewee#SD36,representinganAfricanAmericanmaleownedfirm,indicatedthat
obtainingloansisdifficultsoheneverattemptedtodoso:Ineverwenttothebank[foraloan].
IdidnteventrybecauseIknowhowthatworks.Itjustdoesntworkforme,soIwentaheadand
[financedmybusiness]myself.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE142

Similarly,Interviewees#SD32,representinganAfricanAmericanmaleownedfirm,reported
thatfinancingisasubstantialbarrierthatfirmsface,particularlythosefirmsthatarejust
startingout.Hesaid,Youdhavetohavealotofcashinordertobeabletogetworking,because
mostofthese[banks]arentgivingcreditlinesunlessyouvereallyestablishedyourself.
Interviewee#SD22,representingawhitemaleownedfirm,saidthatfinancingisasignificant
barriertoworkinginthepublicandprivatesectors,particularlybecauseprofitmarginsare
quitesmall.
Interviewee#SD28,representingawhitefemaleownedfirm,explainedthatfinancingis
particularlyproblematicinthecurrentmarket,becausebanksarenotloaningmoney.Shesaid,
[Financing]washardbefore.Iwouldsayitsevenharderifnotimpossibletogetfinancing
andfinancialhelpnowadays.Regardingbonding,Interviewees#SD28reportedthatbonding
canbeasubstantialbarrierinherfirmsindustry.Shesaidthatsometimesthebonding
requirementsactuallyexceedthevalueofacontract(e.g.,a$7,000contractrequiringan$8,000
bond).
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,expressedconcern
abouttightcredit.Hestatedthatitwillbedifficultforsmallercompaniestoexpandand
purchaseequipment,becauselendersaremakingitmoredifficulttoobtainloans.
SDTA#4,representingalocalchamberofcommerce,reportedthataccesstocapitalisa
significantbarrierforsmallfirms.Shesaidthatsmallerfirmstendtoperceivetheloanprocess
asverydifficultandthattheyareafraidtospendagreatdealoftimeonitonlytoberejectedin
theend.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,statedthatfirmsmust
haveagoodlineofcreditandabondtobesuccessfulbutthatthosethingsaredifficulttoobtain.
Withregardtobondinginparticular,Interviewees#SD5said,Ourbondingcapacityisonlyhalf
amilliondollars.Thisdoesntallowustobeverycompetitive.Hewentontoexplainthatpublic
agencieshavelargebondingrequirements,whichseverelylimitopportunitiesforsmallerfirms
whodonothavethebondingcapacitytobidonthatwork.
Interviewee#SD21,representingawhitemaleownedfirm,describedthebondingprocessas
arduous.Hesaidthat,inhisexperience,publicagenciesinCaliforniarequirecontractorsto
bondthefullvalueofprojectsandthusitcanbequiteexpensive.Consistentwiththose
comments,Interviewees#SD14,representingaHispanicAmericanmaleownedfirm,indicated
thatbondingisasubstantialbarriertosuccess.Hesaidthatbondsaremoredifficulttoget
butarealsomoreimportanttohaveinconstructioncomparedtoothersectors.Withregard
totheimportanceofbonding,hesaid,Withoutabond,youllnevergrow.
Interviewee#SD31,representingawhitemaleownedfirm,saidthatfinancingisaverybig
barrierinthecurrentmarket.Heindicatedthatitisverydifficulttoobtainloans,becausebanks
arenotlendingmoneytocontractorsinmostindustries,hisfirmsindustrybeinganexception:
Ifyourenotinasexyindustrydontevenbotherwalkinginthedoor.Interviewees#SD31
wentontosaythatbondingisprobablythebiggestissuefacingfirmsinSanDiego.He
explainedthathisfirmdoesnotbondtypically,thefirmteamsupwithathirdpartythatwill
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE143

bondonitsbehalf.Hesaid,Idonthave$20milliontoputasideforsuretytouseagainsttogive
meabond.Ivehadtoturndownjobsbecauseofbonding.
Interviewee#SD42,representingawhitemaleownedfirm,reportedthatfinancingisthebiggest
barrierthatfirmsfaceinSanDiego:Thebiggestbarrieriscapitalhavingmoneytodowhat
needstobedonetomakemoney.Hewentontoexplainthathisfirmhadtogetcreativewith
financing:Icomefromthespectrumofstartingwithlittlecapitalandputtingtogetheran
organization.Ihavelearnedtocreativelyfinancemypreviousbusinessesandnowhavethe
confidencetocontinuethat.
SDTA#2,representingaHispanicAmericantradeorganization,saidWorkingwiththepublic
agenciesisallaboutbondingability.Ifyoudonthaveanybondingcapacity,youcantdowork.
Hewentontoexplainthatmanyminorityandfemaleownedbusinessessimplydonothave
enoughequityandassetstoobtainbonds.
SDTA#7,representingaconstructiontradeorganization,indicatedthatmostfirmsintheSan
Diegoareaarehavingtroubleobtainingloansandbonds:Iwouldbesurprisedif[his
organizationsmembers]arenthavingtroublewiththeirbank,linesofcredit,thatsortofthing.
Withregardtobondingspecifically,SDTA#7remarked,Bondinghasbeentoughforquitea
while.Itsnotletup.Thosethathave[bonds]cantincreasethemaseasily.Gettingabond
willbemuchtougher[withtherecession].However,SDTA#7indicatedthattroubleswith
bondingareoffsettosomedegreeforsmallerfirms,becauseprimecontractorsalmostalways
bondfortheirsubcontractors,particularlyinthecurrentmarket.
SDTA#9,representingapublicworkstradeorganization,saidthatbondingservesasalarge
barriertobeingsuccessfulinthepublicsector:Publicworksrequiresthreebonds:full
performancebond,bidbond,andlaborandmaterialsbond,allofwhichtiebacktoownership
assets.Ifyouarecapablethatisnotenoughtogetabond.SDTA#9saidthathehasnotseen
discriminationinbonding,onlycasesinwhichsmallfirmsdonothavetheassetstoobtain
bonding.HedidsaythattheAirportisdoingagoodjobinhelpingsmallfirmswithbonding .
SDTA#11,representingaveteranstradeorganization,indicatedthat,alongwithbonding,
financingisthemostsubstantialbarrierfacingsmallbusinessesintheSanDiegoarea:The
biggestissuesarefinancingandbonding.Heexplainedthatfinancingproblemsstemfromthe
factthatsmallbusinesseshavelesscapitalthanlarger,moreestablishedones.SDTA#1,
representingalocalchamberofcommerce,agreedthat,comparedtolargefirms,itismuchmore
difficultforsmallfirmsinSanDiegotoobtainabondandtoraisecapitalforoperationcostsand
equipment.
Interviewees#SD38,representingaHispanicmaleownedfirm,said,Ourbiggestobstaclethat
wehaveseenisthebondingitisreallyhigh.Whenyouhavejobsinthemillionstheywanta
certainpercentageofbondingandthatismoneythatistoughforustoputout.
Interviewee#SD43,representingaHispanicmaleownedfirm,statedthatfinancingisdifficult,
particularlyforsmallfirms:Forasmallcompany,ifyoudonthavetheassetsfinancingis
difficult.Shewentontosaythatitisparticularlydifficultforminorityownedfirmstoobtain
financing.Whenaskedwhyshethoughtthatwasthecase,Interviewee#SD43responded,I
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE144

dontknowIdontiftheyreafraidthatthepeoplethat[Hispanicownedfirms]hirearent
legal.Ithinkthatcanhavesomethingtodowithit.Sheexplainedthatasaresultofthe
difficultiesassociatedwithfinancingherfirmonlytakesonjobsthattheycanaffordtodowith
thecapitalthatithasonhand.
Interviewee#SD44,representingaHispanicmaleownedfirm,remarkedthatsmallfirms
(includingMBE/WBEfirms)havetroublecompetingwithlargefirmsbecauseofcapital
restrictions:[Minorityorwomanownedfirms]arentgoingtohavethebuyingpowerofthe
bigboys.
Interviewee#SD45,representingawhitemaleownedfirm,describedbondingasabigissue.
Hestated,[Suretiesare]onlymatchingyoudollarfordollar.Youhavetohockanythingyou
have[toobtainabond].Forsubcontractors,itsprobablyimpossible[toobtainabond].
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,saidthatherfirms
bondingcapacitylimitsgrowthandsuccess.Sheindicatedthatcurrently,herfirmsgross
revenuesubstantiallyexceedsherfirmsbondingcapacity.
Severalintervieweesindicatedthatitiscrucialtodeveloprelationshipswithbankersinorder
tobesuccessful.Interviewee#SD3,representingawhitemaleownedfirm,saidthatfinancing
andbondingaretwoofthemostcriticalelementsofafirmssuccess.Heindicatedthatanumber
ofMBEandWBEfirmsfailbecausetheydonotdevelopfinancingandbondingrelationships.
Interviewees#SD3wentontoreportthatthebondingprocessismuchmoredifficultinthe
currentmarketthanitwasinthepast.
Consistentwiththosecomments,Interviewees#SD2,representingawhitefemaleownedfirm,
reportedthatitisimportantforfirmstohavearelationshipwithabondingcompany:Youhave
tohavearelationshipwiththebondingcompanytheyhavetoknowyourphilosophyinlife .
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidthatalthoughhehasnothadtroubleobtainingloansandbondshimself,mostother
minorityandfemaleownedfirmsdonothavethebankingrelationshipsthathedevelopedin
hispreviouscareerandthuslikelyfindfinancingandbondingtobemoredifficultthanhisfirm
does.
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatbondingcompanies
liketoseethatfirmshaveexperienceworkinginthepublicsectorbeforeawardingthembonds,
whichmakesbondingespeciallydifficultfornewfirms.Interviewee#SD43indicatedthatitis
importanttobuildandmaintainrelationshipswithbondingcompaniestoensurethatthe
processgoessmoothlyonfutureprojects.
Severalintervieweesindicatedthatinsuranceismoreexpensiveinparticularindustriesorin
California.Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,reported
thatconstructioncompaniesarerequiredtoholdmoreinsurancecomparedtoothersectors.
Similarly,Interviewees#SD15,representingawhitemaleownedfirmthatisaconcessionaireat
theAirport,saidthatcompaniesinhisfirmsindustryhavetocarrytwotypesofliability
insurance.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE145

Consistentwiththosecomments,SDTA#11,representingaveteranstradeorganization,
explainedthattheCityofSanDiegorequirescontractorstoholdseparateinsurancepoliciesfor
residentialandcommercialconstruction.Hearguedthatthoserequirementsmakeitdifficultfor
smallfirmstocompetewithlargefirmsthatcanaffordthoseinsurancepoliciesmoreeasily.
Interviewee#SD3,representingawhitemaleownedfirm,indicatedthatinsuranceisquite
expensiveinconstruction.Hereportedthathisfirmpaysapproximately$40,000peryearin
insurancepremiums.Similarly,Interviewees#SD5,representinganAfricanAmericanmale
ownedfirm,indicatedthathisfirmsinsurancepremiumsarealsoveryexpensive
(approximately$17,000peryear).
Interviewee#SD28,representingawhitefemaleownedfirm,said,Insurancecostsare
extremelyhigh.Weshopthemeverysixmonths.Shewentontosaythatanumberof
insurancecompanieswillnotinsurefirmsthatworkinherfirmsindustrybecauseitisso
dangerous.
Interviewee#SD36,representinganAfricanAmericanmaleownedfirm,reportedthathisfirm
holdsbothliabilityandworkmenscompensationpoliciesandthatbotharequiteexpensive:
Workmenscompandliabilitytheycostalotofmoney.Thehigheryourpayroll,thehigher
theworkmenscomp.
Interviewee#SD43,representingaHispanicmaleownedfirm,explainedthatinsurancecosts
areveryhighandinsurancerequirementsareverystringentintheconstructionindustry:Right
nowwehavegeneralliability,wehaveworkmanscomp.Butthencomesacasewhereyouneed
acertainother[typeof]insurance,andjusttheinsuranceis$500extraforjustthatonejob.
SDTA#3,representingalocalchamberofcommerce,explainedthatinsuranceisexpensivein
Californiacomparedtootherstatesandisthusabarrierforalllocalfirms.
SDTA#9,representingapublicworkstradeorganization,saidthatmanyofhisorganizations
clientshavestoppedbiddingonworkwithpublicagenciesduetotheinsurancerequirements:
Someofourclientshavenotbid[oncontracts]becauseofincreasedlevelofinsurance
requirementsonpubliccontracts.
Manyintervieweesreportedthatbonding,financing,orinsurancearenotbarrierstopursuing
workinthepublicandprivatesectors.Interviewee#SD11,representingawhitemaleowned
firm,indicatedthatobtainingaloanisrelativelyeasy,regardlessofrace,ethnicity,orgender.He
describedhisownexperienceinobtainingaloan:Ijustwentto[anationalbankchain].They
askedifIhadahouse,IsaidYesandtheysaidOK.Theygavemethelineofcreditrightthen.
Hecontinued,Raceandgenderisnotanissueinbankingandbonding[banks]areinbusiness
tryingtogetmoney,notturnyouawaybecauseofwhatyoulooklike.However,Interviewees
#SD11acknowledgedthattherearelikelyafewlendersthatarelesswillingtogiveloansto
minorityandfemaleownedfirmsbutthatultimatelythoselendersstillapprovetheloans:
Thereareprobablyafewstubborn[lenders]outthere,butwhywould[they]giveupmoney
becauseofthewaysomeonelooks?
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE146

Interviewee#SD21,representingawhitemaleownedfirm,reportedthatheisnotawareofany
barriersrelatedtofinancingbutthatprocuringequipmentcanbequiteexpensiveinthe
constructionindustry.Similarly,Interviewees#SD24,representingawhitemaleownedfirm,
saidthattherearenobarriersinconstructionassociatedwithfinancing,bonding,orinsurance.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,indicatedthatobtaining
aloanwasrelativelyeasyforhisfirm.
Interviewee#SD17,representingawhitefemaleownedfirm,reportedthatbondingisnota
barriertoherfirmssuccess:Wearenotbonded,althoughsomejobshaveaskedthatweare.
Wewouldconsidergettingbondedifitwasnecessaryandmadeadifferenceingettingajob,but
sofarithasntmattered.
Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,reportedthatfinancing
isnotnecessarytobesuccessfulinhislineofwork:Ifyourhouseisinorderyoushouldbeok
[withoutloans].Heindicatedthathehasmaintainedhisoperatingexpensesbyrelyingonhis
personalsavings.Similarly,Interviewees#SD18,representingawhitefemaleownedfirm,said
thatthefirmhasneverexperiencedanysubstantialfinancingissues,becausetheyrelyontheir
longstandingbusinessrevenuesratherthanonloans.
Interviewee#SD41,representingawhitemaleownedfirm,indicatedthatifafirmhasgood
credit,obtainingfinancingisrelativelyeasy:Ifyouhaveagoodcredithistoryandagood
bankingrelationshipIdontthinkfinancingistoobad.Rightnowitistough.Fortunately,we
haventhadanissue,evenwiththecurrenteconomicconditions.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,saidthatinsuranceis
notabarrierinhisfirmsindustry:Insurancehasnotbeenaproblem.Wehavetoshopitona
yearlybasistotrytolookforthebestprice.
Recommendationsrelatedtobondingandfinancing.
Someintervieweessuggestedthatpublicagenciesshouldprovidefinanceandbonding
assistanceforminority andfemaleownedfirms.Interviewee#SD3,representingawhitemale
ownedfirm,saidthatpublicagenciesshouldrelaxbondingrequirementsforMBEandWBE
firms,because,alongwithinsurance,bondingisasubstantialbarriertoentryintothe
constructionindustry.Interviewees#SD3alsosuggestedthatpublicagencies(andprime
contractors)shouldgranta5percentpricepreferencetoMBEandWBEfirmsforcontracts
worthupto$100,000.
Interviewee#SD4,representingawhitemaleownedfirm,recommendedthatpublicagencies
shouldrelaxinsurancerequirementsforsubcontractorsproportionaltothesizeoftheirfirm.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,recommendedthat
publicagencieshelpMBE/WBEfirmssecurelinesofcreditfrombanks,obtainliabilityinsurance
atlowerrates,andpayinitialmaterialcosts.Regardingthelatterpoint,hesaid:Agenciesshould
payformaterialsandhavethemdeliveredtothejobsite.Theyshouldbesupportingthegeneral
contractorinupfrontcostsofthejob.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE147

ConsortiumAnecdotesRegardingExperienceswithFinancing,Bonding
andInsurance
Thefollowinganecdotesregardingexperienceswithfinancingandbondingwereobtainedfrom
interviewsthatthestudyteamconductedinconnectionwithBBCs2009Consortiumstudy.
Someintervieweesreportedissuesrelatedtoobtainingfinancingandbonding.[Interviewees
#CON:2,7,8,15,16,18,20,21,23,30,31,34,35,37,40,43,46,48,51,52,53,CONTA#1,2,
PF#19].Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerinthe
SanDiegoarea,statedthathehashadabadexperienceattemptingtoobtainfinancing.Hestated
thathecouldnotobtainapprovalfora$100,000$200,000loanthoughhiscreditscoreis
excellent.Hestatedthatthefirmhadnocreditscore.Hewasonlyabletoobtaina$15,000lineof
credit.Interviewee#CON2statedhedoesnotknowwhyhisbusinessisunabletoobtain
financingotherthanthatthebusinessisnew.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthatmoneyisanissueintermsofaDBEs
abilitytoobtainfinancing.HestatedthatfinancingissuesaffectmoreDBEsbecauseyouhaveto
haveassetsavailabletoobtainaloan.Interviewee#CON7stated,however,thatbondingisan
evenbiggerissueforDBEs.Hestatedthatallpublicjobsrequirebonds.Contractorscannotwork
onConsortiumprojectswithoutobtainingasignificantbond.Hestatedifgeneralcontractorsdo
notcarryDBEsundertheirbond,itbecomesamajorissueforDBEs.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthattheexcessivenessofinsurancerequirementshasdiscouragedhimfromtrying
toworkwithSANDAG.Interviewee#CON8statedthatotherpublicsectoragenciesare
bureaucraticandyouneedtounderstandthatwhenworkingwiththem.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,reporteddifficultiesobtainingfinancingintheearlyyearsbecausehehad
nocredithistory,butnowthathesestablished,therearenoproblemstoreport.Interviewee
#CON15,alsonotedproblemswithbondingthatresultfromconstantchangesinjob
specificationswithregardtobondingamountsrequiredforvariousprojects.Interviewee
#CON15doesnotunderstandhowprojectscanbewiththesameagency,inthesamearea,with
differentbondingrequirements;thisdidnotmakesensetoInterviewee#CON15.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatobtainingfinancinghasbeenverydifficult.Interviewee#CON16
receivedacoupleofloansfromtheSBA,andthathasbeenpositive.Intheprivatesector,
Interviewee#CON16notedthatfinancingisdifficultbecausethebankswantprivateguarantees
forloans,especiallyforanythingaboutahundredthousanddollars.Interviewee#CON16hasnot
hadanybondingexperience.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,noted
difficultyobtainingbonding,butstatedthattheproblemwasrelatedtohercompanyssizeand
notduetorace,ethnicity,orgender.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE148

Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatfinancingishardasasmallbusinessownershestated
thatwhenthebusinessiswaitingforpaymentandhastocarrythebillsherFICAscorewilltake
ahitandthenfinancingbecomesevenmoredifficult.Shestatedthatunlessabusinesshas
familymoney,therearenoalternativesavailabletofillincashflow;thatistherealityofthe
marketplace.Interviewee#CON20alsoindicatedthattheConsortiumhasrecentlyrequiredE&O
Insurancewhichisveryexpensive($7,000perannum)andawaste.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatfinancingwasveryhardtoobtainbut
didnotprovidefurtherdetail.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthattherearebarrierstoobtainingbonding(butnotfinancing).Hestated
thatinsurerswillnotbondacompanyunlesstheyknowthem.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatsometimestherearebarriersinobtainingfinancingsuchasreceivingalineof
credit.Hestatedthatsometimesthesearebarriersthatwouldkeephimoffofaprojectorkeep
himfromgettingawardedaproject.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathehashaddifficultiesobtainingfinancing.Thisisapartofthereason
whyheisadisadvantagedbusiness.Hehashadpersonalissuesinthepastthathasaffectedhis
abilitytoreceivefinancingonprojects.Itdoesnotmakesensetohimwhenheistryingtomake
payrollandpaymentstorentequipmentandhasanoutstandinghistoryofmakingthose
paymentsasitrelatestohisbusiness,butwhenitcomestoobtainingfinancingforhiswork
relatedprojects,hehasdifficultyobtainingfinancingbecauseofissuesinhispersonallife.He
statedthatwithrespecttoobtainingbonding,ona$1millionbond,2.5percentisrequired.He
saidthatifhehadthatkindofcashavailable,hewouldnotqualifyfordisadvantagedstatus.He
feelsthatthisisanotherwaythatsmallbusinessesaredisqualifiedforprojects.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatinitiallyitwasdifficultforhertoobtainfinancingbecauseshehadno
credithistory.Shestatedthatithasbecomeeasierovertime.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatstartupfinancingwasdifficult,anditwasthebiggestdifficultyas
relatedtofinancing.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthatitisdifficulttoobtainbonding.Hestatedthatbondsarelargerthanyourfinancials
willallow.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthatithasbeenverydifficultforhimtoreceivebondingbecauseofallof
theapplicationsandtheenormousassetsrequired.Hestatedthatitworkedoutforhiminthe
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE149

end,butthattheassetrequirementwaswellbeyondwhatitwouldhavecosthimtodothejob,
whichhebelieveddoesnotmakesenseandisunreasonable.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
hadnotexperiencedanybarrierswithrespecttoobtainingfinancing.Hestatedthathehadto
obtainabondonceforasmallamountandthatwasdifficultbecauseoftheliquidassetsthatit
required.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatobtainingfinancingisalwaysdifficultandachallenge.Hestatedjobs
tendtobeundercapitalizedandmorecapitalisneededthanthejobistypicallyworth.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthathehadnotencounteredanyissueobtainingbondinguntilrecently.
Hestatedthathewasunsurewhetheritwaseconomyorsomeotherfactorthathascausedhim
somedifficultiesrecentlyinthisarea.Hestatedthathehashadanokayexperienceobtaining
financing.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthathehasexperiencedbarriersintryingtoobtain
financingandnotedthatthequalificationsarehardtomeetandgetapproved.Hestatedthatthe
requirementsforbondingareevenmoreoutrageousthantheonesforfinancing.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
thefinancialinstitutionsandmarketsareinruinsnowsoitisveryhardtoobtainingfinancing
andtherearealotofrequirements.Hestatedthatbondingisanotherproblemandhasbeena
nightmare.Hestatedthattherequirementofupfrontassetsisanissuewithobtainingbonding.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,reportedthathisfirmmaintainsalineofcreditandhasformanyyears.Hestatedthatonce
theygotovertheinitialpaperworkeverythingwasfine.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathismembers
abilitytoobtainfinancingisadirectlyrelatedtotheirabilitytocollateralize.Ifmembersdonot
haveassetstocollateralizeitbecomesaproblemfortheirbusiness.Sometimesmembersgeta
bidwhichtakesthemoutoftheireconomiczone.Membershavetohavecashonhandtosustain
theprojectandiftheycannotobtainmoneytheycannotbidonaproject.IntervieweeCONTA#1
statedthatfundingiscrucial.Mostmembersasawholehavebeensuccessfulobtainingloans
frombanks,however,itdependsonhowwelltheymanagetheirbusinesscreditandrelationship
withthebankinginstitution.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatmostmembershavea
hardtimeobtainingfinancingbecausemostareundercapitalizedandhavelimitedresources.He
statedthatcredit,lackofassets,lackofasteadyflowofprofitablejobs,andlackofanassetbase
tocollateralizeallaffectabusinessownersabilitytoobtainfinancing.CONTA#2statedthat
memberstrytoobtainbondingbutmanydonotqualifyforbondingbecauseoflackofcashflow,
linesofcreditandnoassetbase.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE150

PF#19,anindividualrepresentingaminorityownedconstructionmanagementsmallbusiness
firmprovidedoraltestimonyatapublicforumheldonOctober20,2009.Hesuggestedtheneed
forchangesintheprocurementprocessforinsuranceandbondingrequirements.Hesaid,Itis
practicallyimpossibleforminorityandsmallbusinessestocompeteeffectivelywhenthereare
insuranceandbondingissuesthatwouldreallybeextremeimpedimentsHebelievesLACMTA
andotherpublicagenciesshouldrevitalizetheireducationandassistancetosmallbusinesses
regardingpaperworkanddocumentpreparationforminoritycontractors.Hestated,Itseemsto
begettingtougher,tougher,andtougherasitgetsmorecompetitiveoutthere.(PublicForum
LosAngelesheldonOctober20,2009)
Someintervieweesreportedtheyfeltasthoughrace,ethnicity,orgenderaffecteda
businessesabilitytoobtainfinancingorbonding.[Interviewees#CON:7,22,23,31,37,40,46,
51,CONTA#1,2].Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcell
salesandinstallationcompanyintheSanDiegoarea,statedthathefeelsthatrace,ethnicity,or
gendercanaffectabusinessownersabilitytoobtainfinancingorbondingbecauseofthe
potentiallackofcollateral.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatrace,ethnicity,andgenderhaveaffectedherabilitytoobtain
financingorbondinganditismuchharderforminoritiestoobtainfinancingthanitisfor
Caucasianbusinessowners.Shestatedthatshehashadagoodexperienceobtainingfinancing
andbonding,especiallynow,sinceshehasbeeninthebusinessforalongtimeandknowsmany
oftheplayers.Shestatedthatforstartupcompaniestherearebarriers.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthathisraceisabigpartofhavingbeendeniedbonding.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathecannotputhisfingeronit,butbelievedthatraceorethnicityaffectshisabilityto
receivefinancingorbonding.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,didbelievethatoneormoreofthosefactorsdidaffecthisabilitytoobtain
bondingbuthedoesnotknowhowtoproveit.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathefeltthathisraceabsolutelyaffectedhisabilitytoobtainfinancing.
Hefeelsasthoughhisfinancialsandcreditaremorecloselyscrutinizedthanawhiteownedfirm
seekingcredit.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathebelievesrace,
ethnicity,orgenderisafactorinabusinessownersabilitytoreceivefinancingorbonding,but
cannotunequivocallystate.Hethinksthatitgoesbacktotheassetbase.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatrace,ethnicity,and
genderaffectsabusinessownersabilitytoreceivefinancingorbondingbecause
demographicallypeoplearediscriminatedagainstbecauseofalackofcapital.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE151

Twointervieweesstatedthattheywerenotsurewhetherrace,ethnicity,orgenderaffecteda
businessesabilitytoobtainfinancingorbonding.[Interviewees#CON:2,35].Interviewee
#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiegoarea,stated
thathedoesnotknowwhetherhisraceorethnicityhasaffectedthebusinesssabilitytoobtain
financing.Hesaiditcouldbethecaseormightnotbe.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatshedidnotknowwhetherherraceorgenderhasaffectedherability
toobtainfinancingbecausethathasneverbeenovertlyobvious.
Mostintervieweesreportedthattheydidnotfeelasthoughrace,ethnicity,orgenderaffected
abusinessesabilitytoobtainfinancingorbonding.[Interviewees#CON:1,3,5,16,20,21,24,
25,26,28,29,30,33,34,38,39,41,43,44,45,47,48,49,52,53,54,55,56,57,58].
Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontractingfirm
intheSanDiegoarea,statedthatheisnotawareofhisrace,ethnicity,orgenderhavingaffected
hisabilitytoobtainfinancingorbonding.Hestatedthatheunderstandsthatsomepeopleare
setintheirways.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,wasnotawareofanycircumstancesinwhichrace,ethnicity,orgenderhasever
affectedaDBEsabilitytoreceivefinancingorbonding.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
didnotfeelthathisrace,ethnicity,orgenderhasaffectedhisabilitytoobtainfinancingbuthe
wasntsure.Hefeltthattheeconomyaffectedhisabilitytoobtainfinancingmoresothanrace.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatherexperienceobtainingfinancingwasokayandshedidnotbelievethatitwas
affectedbyhergender.Shestatedthatgenerallyifyouhavebeeninbusinessforalongtimeand
areingoodstandingitiseasytogetfinancing.
Otherintervieweesreportednoissuesrelatedtobondingorfinancing.[Interviewees#CON:1,
3,4,9,26,28,29,37,38,41,45,49,54,55,56,57,CONTA#1].Interviewee#CON1,anonDBE
HispanicAmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,statedthat
obtainingbondingwasnottoodifficult.Interviewee#CON1didnotidentifyanybarriersto
obtainingbonding.Interviewee#CON1iscurrentlylookingintoobtainingfinancing.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,wasnotawareofanyspecificbarrierstoDBEsobtainingfinancingorbonding.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatonceacompanyhasbeeninbusinessafewyearsandhasa
relationshipwithfinancialinstitutionsandtheyknowyoutherearenoproblemsobtaining
financing.Interviewee#CON4stated,however,ifyouarenewtothebusinessitwouldbemore
difficulttoobtainfinancing.Interviewee#CON4statedthathehasnothadanyproblemsin
termsofobtainingloansfromabank.Interviewee#CON4doesnothavetoobtainbondingfor
hiswork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE152

Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthat10yearsagoitwasdifficulttoobtainfinancingbutnowithasgotteneasier.Shehas
nothadanyissuesobtainingbondingorinsurance.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthathehashadagoodexperiencetryingtoobtain
financing.Hiscompanyhasrarelyneededbonding.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,reportednoissues
relatedtofinancingorbonding.Hehasusedonlythestandardbondingof$12,500thatis
requiredasinsuranceunderthelaw.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasnotexperiencedanybarrierswhiletryingtoobtainfinancing.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathehashadanoverallgoodexperience
obtainingfinancingandbondingwithnoproblemstoreport.
Interviewee#CON41,anAsianAmericanmaleownerofaDBE/MBEcertifiedgeneral
contractingfirm,statedthathefelttheprocesstoobtainbondingwentsmoothly.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehadanokayexperienceobtainingfinancing.Hestatedthathewasaskedto
supplyabusinessplanandcollateralinordertosecurethefinancingheneeded.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,reportedthattheyhave
notexperiencedanybarriersinconnectionwithobtainingbondingorfinancing,andnotedthat
hisfirmwilloftenteamupwithdevelopersallowingthemeasieraccesstofinancing.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,statedthatbecausetheyarealargefirmtheyhavenothaddifficultysecuringalineof
credit.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,statedthat
obtainingbondingwasrelativelysimple.Hestatedthatwithoutanyblackmarksonyour
record,youshouldnothaveanyproblemswithobtainingbonding.
Interviewee#CON57,awhitemaleownerofaconstructionandlandscapearchitecturefirm,
reportedhavinganoverallgoodexperienceobtainingfinancing.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatobtaining
bondingisnotasmuchofanissueasfinancingbecauseinthelastcoupleofyearsprime
contractorsarehelpingwithbondingasaresultoftheproblemsthatsubcontractorsfaceddue
tothehighcostsofobtainingbonding.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE153

Severalintervieweeshadnoexperiencewithbondingorfinancing.[Interviewees#CON:2,8,
9,10,11,12,13,14,17,18.19,24,27,36,39,42,44,47,50].Interviewee#CON2,aDBE
certifiedAfricanAmericanmalestructuralengineerintheSanDiegoarea,statedthathedoes
nothavetoobtainbondinginhislineofwork.Hestatedthathedoeshavetoobtaininsurance
butinsurancehasnotbeenaproblem.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,doesnot
haveexperiencewithfinancingorbonding.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hasnothadmuchofaneedtoobtainfinancing.
Interviewee#CON17statedshesnotarisktakerwhenitcomestomoney,justlotsofrisks
otherwise.Therewasanissuewhenshefirststartedthecompany,Interviewee#CON17
reportedthatitwasdifficulttogetevenacreditcardinhername,butthatwasmany,many
yearsago.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,has
neverhadtoobtainfinancingbecauseallofhercostsarelaborcosts,soshesabletokeepher
overheadexperiencelow.
Recommendationsrelatedtobondingandfinancing.Oneintervieweerequestedthe
implementationoftrainingprogramstoassistwithbondingandfinancing.Interviewee
#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtruckingsubcontractor,
statedthathewouldliketoseetrainingandassistanceinreceivingbonding.Hestatedthathe
hasbeenunabletoreceivebondingevenwithusinghispropertyascollateral.Hestatedthatthe
bondingprocessneedsimprovementfromcitytostate.
J.AnecdotesRegardingtheEffectofRace,
Ethnicity,andGender,ifAny,UponaBusiness
OwnersAbilitytoObtainorEngageinBusiness
BGPAAStudyAnecdotesRegardingtheEffectofRace,Ethnicity,and
GenderuponaFirmsAbilitytoObtainorEngageinBusiness
Someintervieweesreportedthatrace,ethnicity,and/orgenderaffectedtheirabilitytoobtain
orengageinbusiness.[Interviewees#BGP:3,10,12,14,TA#2].Interviewee#BGP3,theco
ownerofawhitewomanownedconstructionfirm,saidthatmajorityownedfirmsare
discriminatedagainst,notMBE/WBEs.Hesaid,Itsquiteopposite.IfyoureaDBEoranykindof
minority[owned]company,youhaveapriorityinthiscountry,andyoucandoverywell.[Its]
almost[thecasethat]theaverage,healthyJoedoesnthaveachance.Ifyouwanttotalkabout
discrimination,itsdiscriminationagainsttheaverageguy,notminorities.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatheisawareof
discriminationoccurringamongdifferentracialandethnicgroups.HesaidthatanAsianfirm
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE154

[will]typicallyhireonlyAsiansubs,andfirmsusuallyonlyhavepeopleofthesameraceor
ethnicityworkingforthem.HesaidthatCaucasiansdonotcareandwillhireeveryone.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthatthegenderofthecompanysownerhaspositivelyaffectedthe
companysabilitytoobtainbusiness.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
statedthattheraceorethnicityofthefirmsownershasactuallyhelpedthecompanypositively.
Intheearlierdaysofthebusiness,[it]helpedusalotandprobablyhelpedtoestablishus.
[But]itslessandlessofapositiveornegative.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthattheworkenvironmentforMBE/WBE/DBEs
wouldbethecultureofwhitemaledominantandthegeneralcontractor.Hesaidthat
disadvantagedbusinessesneedtobesegmentedmorebyrace,ethnicityandgender.
Someintervieweesreportedthattheirrace,ethnicity,and/orgenderhadnoeffectontheir
abilitytoobtainorengageinbusiness.[Interviewees#BGP:13,15,16].Interviewee#BGP15,
theownerofaHispanicAmericanwomanownedMBE/WBE/DBEcertifiedengineeringand
constructionsupportservicesfirm,saidthatshedoesnotthinkthatrace,ethnicityorgenderhas
affectedherabilitytoengageinbusinesspositivelyornegatively.Shestatedthatoverthelast
fiveyearsnow,theCityofL.A.hasbeenincludingOBErequirementsinRFPs,or
requirementsthatcompaniesuseotherbusinessenterprises.Shesaidthatthisclassificationis
acategoryforthewhite,middleagedmanandthatshehasseenthischangeinagenciesacross
theState.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatheisnotawareofrace,ethnicityorgenderbeingbarrierstoengaginginbusiness,but
hesaidthatdiscriminationprobablydoeshappen.
Workenvironmentforminoritiesandwomen.
Someintervieweesreportednosignificantdifferenceintheworkenvironmentforminorities
andwomenwhencomparedtotheworkenvironmentformenandmajorityfirms.
[Interviewees#BGP:1,2,3,5,6,12,14].
Oneintervieweereporteddifferencesintheworkenvironmentforwomenandminorities
whencomparedtotheworkenvironmentformenandmajorityfirms.[Interviewee#BGP:8,
9].Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertified
engineeringfirm,saidthatoffensivecommentsandbehaviorstillexiststowardminoritiesand
womenintheconstructionandengineeringindustries.Hesaid,Ithinkyoubecomeawareof
[stereotyping]morejustinthesidecommentsandthingslikethatwhenteamsarebeingpulled
togetherorworkingtogether.Unfortunately,Ithinktherearestillsomeattitudesjust
downrightracist.Thatstillgoeson.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE155

Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmsaidTheyre[MBE/WBE/DBEs]usuallytheonesthatgetthepriority.
Stereotyping.
Someintervieweesreportedhavingheardoforexperiencedstereotypingonthejobsite.
[Interviewees#BGP:4,TA#1].Interviewee#BGP4,aprojectmanagerofaWBEcertified
constructionfirm,saidthattherearestereotypicalattitudesinthemarketplace.Hesaid,Theres
apreconceivednotionthatwhenyoureonadifficultproject,anMBEorWBEwillbealiability
becausetheyrenotgoingtobeasbigorasorganized.Theresastereotypeintheoverall
capabilities.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatthelocalcontractingindustrieshaveapoorperceptionofminorityownedcontractors,
particularlythosethatareAfricanAmericanowned.Hesaid,Theperceptionoutthereabout
[AfricanAmerican]contractorsis[AfricanAmericanpeople]arecowards,theyrelazy,and
theyrenotgoingtofightyouifyoupushthemawayalittlebit.
Manyintervieweesreportedneverhavingheardoforexperiencedstereotypingonthejob
site.[Interviewees#BGP:1,2,3,5,6,9,11,12,14,15].Interviewee#BGP11,amanagerofan
AsianmaleownedDBEcertifiedcleaningservicescompany,saidthathehasnotexperienced
anystereotypingbasedupontheracialorethniccompositionofthecompany.Hesaidthathe
thinksthateverycompanyrunsintosomekindofcommentsandsoforth,buttheseare
commentsmadebetweenpeopleinthesamecompany.Ifanythinglikethatshouldhappen
betweentwoseparatecompanies,theyredealtwithimmediately.Forexample,wecouldhave
anaircraftcleaneruptherecleaninganairplaneandacaterercomesdownandmakessome
[inappropriate]statement,thatwillbedealtwithimmediatelybetweenthetwocompanies,
butwedontseethatverymucheither.
Offensivecommentsorbehavior.
Someintervieweesreportedhavingheardoforexperiencedoffensivecommentsorbehavior
onthejobsite.[Interviewees#BGP:8,14,TA#2].Interviewee#BGP8,thetechnicaldirectorof
awhitewomanownednoncertifiedengineeringfirm,saidthatdiscriminationandoffensive
behaviorstillexists.Hesaid,Almosteveryprojectthatwevebeenoneverybodyontheteam
goesonsensitivitytraining.Ithinkthelawshaveclampeddownalotandbigcompaniesare
doingwhattheyresupposedtodo,butIstillthinkoutinthemud,some[discriminationand
racistandsexistbehavior]stillgoeson.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thathehasexperiencedinappropriatecommentsonworksitesbutthecommentsaremostly
relatedtothecompanybeingnonunion.Hestatedthathehasnotexperiencedinappropriate
commentswhileworkingonAuthorityprojects.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthathedoesnotexperienceoffensivecommentsor
behaviorsonthejobsiteasmuchashedidinthepast.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE156

Someintervieweesreportedneverhavingheardoforexperiencedoffensivecommentsor
behavioronthejobsite.[Interviewees#BGP:3,9,12,13,15].Interviewee#BGP15,theowner
ofaHispanicAmericanwomanownedMBE/WBE/DBEcertifiedengineeringandconstruction
supportservicesfirm,saidthatshehasnotexperiencedoffensivebehavioronthebasisofrace,
ethnicityorgender,andsaid,Thatwillnotbetolerated.
Discrimination.
Someintervieweesreportedneverhavingheardoforexperienceddiscriminationonthejob
site.[Interviewees#BGP:3,5,6,9,13,14].
Sexualharassment.
Someintervieweesreportedneverhavingheardoforexperiencedsexualharassmentonthe
jobsite.[Interviewees#BGP:9,12,13,14,15].
SDCRAAAnecdotesRegardingtheEffectofRace,Ethnicity,andGenderupona
FirmsAbilitytoObtainorEngageinBusiness
Thefollowinganecdotesregardingtheeffectofrace,ethnicity,andgenderuponafirmsability
toobtainorengageinbusinesswereobtainedfrominterviewsthatthestudyteamconductedin
connectionwithBBCs2009SDRCAAstudy.
Perceptionsregardingrace,ethnicity,orgendereffects.
Manyintervieweesreportedthatissuesrelatedtorace,ethnicity,andgenderhindersthe
abilityoffirmstoobtainorengageinbusiness.Interviewee#SD12,representingaminority
maleownedfirmthatisaconcessionaireattheAirport,indicatedthatalthoughracial
discriminationisnotthesameasitwasinthepast,hisfirmhasstillfaceddiscriminationinits
businessdealings:Outrightdiscriminationdoesntexistthewayitdid40yearsago.The
objectiveandgoalsarestillthesame,but[discriminationis]muchmoresophisticatedthewayit
isexecuted.Hewentontodescribenegotiationsthathisfirmhadwiththemaster
concessionaireattheAirportinwhichInterviewee#SD12feltdiscriminatedagainst:There
werenegotiationstakingplacewith[themasterconcessionaireattheAirport]whenayoung
MBAthoughtitwouldbeoktotreatusasifwewereNeanderthalsandweshouldhavenever
gotthecontract.Interviewee#SD12notedthatthemandidnotsayanythinginappropriatebut
madehimfeelveryuncomfortable.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,indicatedthathisrace
preventedhimfromjoiningaSanDiegoconstructiontrade:Until2002blackscontractorscould
notgetintotheSanDiegounion.Hecontinued,Itriedtogetintotheunion.Ipaidabout$12per
monthtostayonthelistforabouttwoyearsbeforeIwentintobusiness.Iwasneveraccepted.
Consistentwiththosecomments,SDTA#13,aretiredofficialfromalocalpublicagency,stated
thatalthoughlocalunionsdonotopenlydiscriminate,theypracticefavoritismwithregardto
membershipandtheyprefermemberswhoarewhitemales.SDTA#13describedthelocal
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unionsasbeingbasedonaGoodOldBoyNetworkandthatunionmembershipisbyinvitation
only.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthat,basedon
previousresearchandanecdotalstoriesfromotherlocalfirms,hebelievesthatdiscrimination
stillexistsinSanDiego.Hereportedthatdiscriminationgenerallytakesplaceintheformof
primecontractorsdiscriminatingagainstsubcontractorsonthebasisofrace,gender,orage.
However,thosebeliefsnotwithstanding,Interviewee#SD16indicatedthattheAirportandother
agencieshavetreatedhisfirmquitewell.
Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,saidthatracial
discriminationaffectsthewayhemarketshisfirm.Specifically,hetriesnottomentionthathis
firmisAfricanAmericanowned.Regardingthatstrategy,hesaid:IfIcomeupIwillbecomea
targettothosewhodonotwanttoseeablackmansucceed.
Interviewee#SD2,representingawhitefemaleownedfirm,saidthatfinancingismuchmore
difficultforaWBEfirmcomparedtoamaleownedfirm,becausemostbankersaremen.
Interviewee#SD2reportedthatparticularlyintheearlyyearsofherbusiness,shehaddifficulty
dealingwithbankersandexperiencedgenderdiscrimination:[Theywouldsay]bringyour
husbandintosignthepaperwork.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatshestartedherown
firm,becausethefirmsheworkedforpreviouslymadecleartoheritsstancethatawoman
should[not]beinmanagement.
Whenaskedifhisfirmhasbeendiscriminatedagainstbasedontheownersethnicity,
Interviewee#SD36,representinganAfricanAmericanmaleownedfirm,said:Tobehonest
withyou,ofcourseIhavebeendiscriminatedagainst.Theywillgiveyouthecontract,butin
ordertokeepitIhavetoputthewhitepersonouttheretobethefrontman.Hecontinued,
Oncetheyfindoutitisablackmanbehindtheoperationtheywillunfairlyterminatethe
contract.Interviewee#SD36reportedthat,TheCityandCountydontdothis,butprivate
[sectorclients]dothisallthetime.
Interviewee#SD45,representingawhitemaleownedfirm,indicatedthatwomendonot
performadequatelyaslaborersandarebettersuitedforoperatingequipment:Womenare
greatequipmentoperatorsthatsthebestplaceforthemtogo.Theymakegoodwages,andit
doesntrequiresuperhumanstrength.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,reportedthatraceisa
substantialissueinhisfirmsindustry:whetheritsleasingaspace,buyingacar,[obtaining]
alineofcreditfromsupplies,[raceis]afactorineverythingwedo.
SDTA#2,representingaHispanicAmericantradeorganization,observedthatapproximately50
percentofallconstructionworkersinSanDiegoareHispanicAmericansandyetthevast
majorityofconstructionfirmsareownedbyCaucasians:Forexample,[taketheconstructionof]
PetcoParkoveronehalfoftheworkforceisLatinoandmostoftheownersarewhite.SDTA
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE158

#2wentontosaythatevenwhenconstructionsfirmsareHispanicAmericanowned,thosefirms
usuallydonotworkasprimecontractors.
SDTA#6,representinganAsianAmericantradeorganization,estimatedthattheAsianAmerican
populationinSanDiegoiscloseto12percent.Incontrast,sheguessedthatthepercentageof
contractsthatgotoAsianAmericanownedfirmsislessthan1percent.
SDTA#4,representingalocalchamberofcommerce,saidthatthereisnotalevelplayingfield
forminorityandfemaleownedfirmsinSanDiego,despitethefactthatalargepercentageofthe
populationbelievesthatthereis.However,sheindicatedthatshebelievesthatsocietyismaking
progressinlimitingtheeffectsofdiscrimination.
SDTA#8,representinganelectricalworkerstradeorganization,reportedthatacrossall
constructionsectors,womenareseverelyunderrepresented.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,reportedthatmanylargefranchisesarenotinterestedinobtainingspaceatthe
Airportbecausetheydonotwanttodobusinesswiththesubtenantswithwhomthemaster
concessionairedoesbusiness.Whenaskedwhythatwasthecase,Interviewee#SD13replied,
[TheMBE/WBEsubtenants]aretheunknown.Franchiseswantspecificguidelinesfollowed.
Theywantthatreassurancethattheygetfrom[themasterconcessionairerunningtheirstores].
Severalintervieweesreportedthatissuesrelatedtorace,ethnicity,andgenderdoesnotaffect
theabilityofafirmtoobtainorengageinbusiness.SDTA#7,representingaconstructiontrade
organization,stated,Idonotthinkthereisdiscrimination,andImnotjustsayingthatbecause
ofmyposition.Hecontinued,Ithinkwhenthebabyboomgenerationcamein[racial
discrimination]prettywelldissipated.ThatsmeandIthinkthenextgenerationwonteven
knowwhatweretalkingabout.Wereelectingablackmanpresident.Youcanttellmetheresa
lotofprejudicedeepseededinthecountrywhenwereelectingBarackObamanow.Hewenton
tosaythatthereisagroupoforganizationsinSanDiegowhobenefitfromhavingthepublic
believethatdiscriminationexistsintheconstructionindustry.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,repeatedlymentioned
that,givenProposition209andthestateoftheeconomy,raceandgenderdonotplayarolein
winningcontractsitisallaboutbeinglowbidder.
Interviewee#SD8,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidthathedoesnothaveanyexperiencewithdiscriminationwiththeAirport,norhas
heseendiscriminationagainstanyoneotherfirms.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,saidthatwhenhis
fatherstartedthefirm30yearsagoheexperienceddiscrimination,primarilybecausehedidnot
knowagreatdealofEnglish.However,thefirmwasabletoremaincompetitiveandgrow
becauseitprovidedaqualityproduct.Hewentontosaythattherearesuchalargenumberof
HispanicAmericans(andotherminorities)inhisfirmsindustrytodaythatdiscriminating
againstthemwouldbeakintodiscriminatingagainsttheentireindustryitwouldbetoo
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE159

impractical.HewentontosaythatthecontractingindustryinSanDiegoisanevenplaying
fieldwithregardtoraceandgender.
Interviewee#SD34,representingawhitemaleownedfirm,remarkedthatMBE/WBEfirmsdo
notneedanyhelptobesuccessful.Hesaid,Iftheyarestrong,theyshouldbefine.Theycan
learnfromfirmstheyworkedwithbeforestartingtheirownbusinesses.
Interviewee#SD40,representingawhitemaleownedfirm,reportedthat,tohisknowledge,
thereisnodiscriminationbasedonraceorgenderinSanDiego.Hesaidthathehasno
knowledgeoffirmsbeingdeniedtheopportunitytobid,contractawards,financingoranyother
opportunitybasedonraceorgender.
Interviewee#SD44,representingaHispanicmaleownedfirm,speakinggenerallyaboutthe
effectofMBE/WBEstatusonafirmssuccessinhisindustry,remarked:Thepeoplethatarein
ourindustryareallveryhelpfultooneanother.Itdoesntmatterwhatyourethnicityis.He
wentontosay,Ivehadgoodexperienceinthisbusiness.
SDTA#6,representinganAsianAmericantradeorganization,indicatedthatsheisnotawareof
anyactsofdiscriminationagainstminorityorfemaleownedfirms,butthatthosefirmswould
beunlikelytofileformalcomplaintsaboutdiscriminatoryactseveniftheyoccurred.
SDTA#12,representingaworkforcetradeorganization,indicatedthathisorganizations
memberscomplainabouthiringdiscriminationbasedonagebutthathehasnotheard
complaintsaboutcontractingdiscriminationbasedonrace,ethnicity,orgender.
SDTA#13,aretiredofficialfromalocalpublicagency,indicatedthatissuesrelatedtorace,
ethnicity,orgenderdonotmakeitmoredifficulttoengageinbusinessinSanDiegowhat
mattersisfirmsize:Peopleneedtoletgoof[theideathatrace,ethnicity,orgenderaffect
success]andstopsaying,Oh,itsbecauseImblack,oritsbecauseImawoman,oritsbecause
ofthisandjustrealizethatsmallbusinesseshaveadisadvantage.
Someintervieweesreportedthatminority andfemaleownedfirmshavebeenaffordeda
numberofopportunitiesbecauseoftheirrace,ethnicity,orgender.SDTA#3,representinga
localchamberofcommerce,indicatedthat,inherview,MBE/WBEfirmshaveagreatdealof
opportunitytosucceedinthegreaterSanDiegoarea.Regardinglocalopportunitiesforthose
firms,SDTA#3said,Tome,therearesomanyresourcesouttherethatIthink[MBE/WBE
firms]actuallyhavemoreopportunities[thanmajorityownedfirms]attimes.Shewentonto
saythatraceandgendertypicallydonotplayaroleinthelocalmarketplace,andwhatmattersis
eachpersonsworkethic,Ihaventheardofanyproblems[relatedtoraceandgender].She
continued,Tomeitsnotyourgender,itsnotyourraceitsyourworkethicandwhatyou
decidetobe.Anyopportunitywecangivethemtobesuccessfulisthere.Speakingmore
generally,sheindicatedthatracismandsexismarenotasproblematicastheywereinthepast.
Withregardtoracism,shesaid,Wevecomealongway.Withregardtosexism,she
commented,Twentyyearsagotherewasadifferentpayscale[formenandwomen],butI
believethosedaysaregone.
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SDTA#7,representingaconstructiontradeorganization,expressedhisbeliefthatthereareno
barriersinconstructionspecifictominorityorfemaleownedfirms.Hesaid,Wedoallthese
nicethings[i.e.,agenciesremedies],butcuttingthroughallthat,yougottotrainpeopletobe
contractorsand[the]marketwillprobablytakecareofitsself.ThereisntarealbarrierthatI
canseeanywayforminoritiesgettingtobeacontractor.Hewentontoexplainthatthe
determiningfactorforsuccessinconstructionhasnothingtodowithraceitisabouttaking
chances:Yougottobeayoungguyandwanttorunoutandtakeachance.DoessomeAfrican
AmericanorHispanicguytakethatchancetoquitthatniceprojectmanagerjob[they]got?
Thefirstthingyougottohaveisthegutstodoit.
Interviewee#SD24,representingawhitemaleownedfirm,indicatedthathehasnotobserved
anymanifestationsofdiscriminationagainstminorityorfemaleownedfirms,andhesaidthat
insteadDBEprogramshaveaffordedthemanumberofadvantages:IfanythingIthinkitsthe
opposite[i.e.,MBE/WBEfirmsareadvantaged],becausethereareoftenDBErelated
requirements.Firmslikethattendtobecourtedmorethananythingelse.
Workenvironment.
Someintervieweesindicatedthattheworkenvironmentforminoritiesandfemalesworkingin
SanDiegoislessfavorablethanitisforwhitemales.Interviewee#SD2,representingawhite
femaleownedfirm,reportedthatitisdifficultforherfirmtodeveloprelationshipswithprime
contractors,preciselybecauseherfirmisfemaleowned.Shesaidthattherehavebeeninstances
whenshehadtobringamaleemployeefromhercompanytomeetingswithprimecontractors
sothattheywouldtreatherwithmorerespect.Sheindicatedthatthereisanaversiontowomen
intheconstructionindustry.
Interviewee#SD17,representingawhitefemaleownedfirm,reportedthatshehasbeenthe
victimofgenderdiscriminationonanumberofoccasions.Sheindicatedthatsometimesthat
discriminationhasbeensubtle,butothertimesithasbeenblatant.Regardingsubtle
discrimination,Interviewee#SD17said,Asawoman,Iamawareofunspokendiscrimination.
Forexample,contractorswillautomaticallycallandaskformyhusbandJefftocometothejob
eventhoughmynameisonthecompanyandIamthepresident.Regardingblatant
discrimination,Interviewee#SD17indictedthatsomecontractorshavebeenquiteaudacious
withheronthetelephone:Oneclientcalledandsaidhewouldgiveourcompanya[contract],
butonlyifIwashot.Shealsosaidthatherfirmhasworkedonaprojectforwhichtheforeman
toldherthatherefusestoworkwithwomen.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,indicatedthatanunfair
workenvironmentcontinuestoexistfromtimetotimeforMBEandWBEfirms.Hegavean
exampleofwomencontractorsnotcommandingasmuchrespectastheirmalecounterparts.
Interviewee#SD21,representingawhitemaleownedfirm,isawareoframpant,racerelated
graffitibeingpresentonsomeofhisworksites.Hereferredtotheconstructionindustryasa
jungleenvironment,andassuchheacknowledgedthatmorecouldbedonetohelpminority
andwomanownedcontractorsinthefield.However,healsopointedoutthatthosefirmsare
makinggoodprogressintodaysconstructionindustry.HesaidthatmanymoreMBE/WBE
contractorshavecollegedegreestodaythanindecadespast,andthosecontractorsareeither
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE161

runningconstructioncompaniesthemselvesorareplayingintegralrolesinsomeoneelses
constructioncompany.Hesaid,Thingsareevolvingsothattheplayingfieldismuchmore
[level].
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,reportedthatmany
peopleintheconstructionindustryarenotnecessarilyracist,butprejudicedingeneraland
make[discriminatory]remarks.Heindicatedthatalthoughsuchremarksareunpleasant,he
doesnotthinkhisfirmhaslostanyworkbecauseoftheownersrace.Withregardtowomen,
Interviewee#SD32said,Ithinkduetothenatureofconstructionbeingdominatedbymalesin
generalitshardforwomentocomeintoanindustrylikethisandbeacceptedaspeers.
Interviewee#SD34,representingawhitemaleownedfirm,commentedthatwomenowned
firmsencounterproblemsinthecontractingindustrybecause,therearestillmenouttherewho
thinkitsamansworld.Henotedthatminorityownedfirmsalsoencounterdifficulties.
Interviewee#SD34reportedthathehaswitnessedcontractorsmakinginappropriatecomments
towardbothminoritiesandwomenonjobsites.
Interviewee#SD39,representingaHispanicfemaleownedfirm,reportedthatthework
environmentisparticularlyunpleasantforHispanicsworkinginhisfirmsindustry:
DiscriminationisgoingonwiththedriversbecausetheydontspeakverygoodEnglish.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,statedthateightof
herownemployeeswererecentlyterminatedforusingtheNwordandmakingderogatory
commentsaboutherandherbrother,thefirmsOperationsManager.Shesaidthatherfirmhas
retainedtheservicesofawellrespecteddiversityconsultanttoaddressherfirmsracerelated
difficulties.Interviewee#SD47alsoreportedthattheNwordwasdirectedatoneofher
employeesonaworksiteintheprivatesectorduringaprojectonwhichherfirmwasworking
asasubcontractor.
SDTA#5,representingagovernmentadvisorycommissiononminorityissues,indicatedthat
publicagenciesinSanDiegoactivelypreventminorityandfemaleownedfirmsfrombeing
successful:SanDiegocreatesbarriersforpeopletogetinvolvedanddoesthesamethingover
andoveruntiltheGoodOldBoyNetworkcanprettymuchkilloffsmallandblackownedor
otherethnicownedbusinesses.Thereisnoconsequencefornotdoingoutreachorsupporting
diversityinSanDiego.ShewentontoexplainthatracismisasubstantialissueinSanDiegobut
thatthecitymakesanefforttohidethoseproblems:SanDiegoisbonafideracistthatisit!
SanDiegoreportsthemselvesasthefinestcity,butindicatorsofharshracismarehidden.
Stereotypicalattitudes.
SeveralintervieweesindicatedthatMBE/WBEfirmsaresometimesvictimtostereotypical
attitudesonthepartofprimecontractorsoragencies.SDTA#10,representingasuppliertrade
organization,saidthatsomeofthepersonnelatpublicagenciesbelievethatMBE/WBEfirmsare
lessqualifiedthanlarge,wellestablishedfirmsandthattheirparticipationgeneratesadditional
costs.SDTA#10saidthatmanyofthosepeoplebelievetherearenogoodMBEsoutthere.He
remarked,Theseindividualsshouldbeopentoacceptingthatthereare,infact,good
[MBE/WBE]firmsandthattheirutilizationdoesnotincreasecosts.
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Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,statedthatsomeofthemasterconcessionairespersonneltaketheattitudetoward
Interviewee#SD1thatYoureonlyherebecauseyoureaminority.Shewentontosaythat
thosepeopledonotappeartohaveboughtintothenotionthatminorityownedfirmsare
legitimateandareheretostay.
Interviewee#SD21,representingawhitemaleownedfirm,indicatedthatminorityandfemale
ownedfirmsstillfacestereotypicalattitudesintheconstructionindustrybutthattheproblemis
relativelysmall.Hesaid,Youllgetanoldinspectortheyrenotnecessarilytooenthusedwhen
awomanprojectmanagerrollsin.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,reportedbeingawareof
primecontractorsandagencieshavingstereotypicalattitudesaboutminorityandfemale
ownedfirmsbutonlyinsubtle,indirectways.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatshehasoftenbeen
victimtoprimecontractorshavingstereotypicalattitudesagainstwomeninwhichtheydont
thinkyouknowanythingbecauseyoureawoman.Indescribinghowshedealswiththose
situations,shesaid,IfIswallowmypride,Ijustgive[thephone]to[amalememberofthefirm]
and[he]tellsthemthesamethingthatIwouldtellthem.
Interviewee#SD43,representingaHispanicmaleownedfirm,saidthatagenciesandprime
contractorssometimesassumethatHispanicownedfirmswillhireillegalimmigrantsorcheap
labortocompletethework.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthat
sometimessubcontractorsappeartoquestionhisfirmsabilitytoactasaprimecontractordue
tohisminoritystatus.HesaidthatsomesubcontractorsseemtowonderCanthisguypayme?
Isheforreal?Hewentontosaythatwhenhegoesonjobwalks,hegetsthesensethatother
firmslookathimandwonder,Aretheregoalsonthisproject?
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,indicatedthatthereis
astigmaassociatedwithbeingDBEcertifiedthatthefirmisunqualified:Idheardsomuch
aboutthestigmaofthesecertifications[Otherfirmsintheindustry]talkabouthow
unqualified[DBEcertified]firmswereandhowtheycouldntperform.Shewentontosaythatit
isverydifficultbeinganAfricanAmericanwomanintheconstructionindustry:Inthisindustry,
ifthereisawhitemalewithme,theycouldbethedrivertheyregoingtogetmorerespect
thanIwill.IfitsaBlackmale,theyllgetmorerespect,too.Ifitsawhitefemale,theyregoingto
stillbeaddressedandinteractedwithmorethanme.Imalwaysthelowmanonthetotempole.
ConsortiumAnecdotesRegardingtheEffectofRace,Ethnicity,and
Gender,ifany,uponaFirmsAbilitytoObtainorEngageinBusiness
Thefollowinganecdotesregardingtheeffectofrace,ethnicity,andgenderwereobtainedfrom
interviewsthatthestudyteamconductedinconnectionwithBBCs2009Consortiumstudy.
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Somebusinessesinterviewedfeltthatrace,ethnicity,orgenderaffectedtheirabilitytoobtain
orengageinbusiness.[Interviewees#CON:2,4,5,10,12,13,16,17,19,20,21,22,25,26,27,
29,30,31,33,34,35,36,37,38,40,43,45,46,47,50,51,CONTA#2,WT#9,10,PF#8].
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthatraceorethnicitymayaffecthisbusinesssabilitytoobtainbusinessbecauseof
thelackoffinancingorbeingunabletoobtainfinancing.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathebelievesthatrace,ethnicity,orgenderindirectlyaffectshis
abilitytoobtainorengageinbusinessbecausehedoesnotbelievethatprimecontractorswould
contacthimifhiscompanywasnotcertifiedasaDBE.Hestated,Iknowtheonlyreasonthey
didintheverybeginningwasbecausewewerecertifiedandatthattime[theprogramsrequired
between10to15percentDBEparticipation];thatistheonlyreasonwhytheywouldcallus.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthatheisawareofonesituationinwhichtherace,
ethnicity,orgenderoftheownerofabusinesshasaffectedthebusinessesabilitytoobtainor
engageinbusiness.Interviewee#CON5statedthathiscompanycannotreceiveDBEcertification
andcannotcompeteforcertainjobs,thoughmostoftheemployeesareminorities,becausethe
ownerofthecompanyisCaucasian.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattheyhadafeelingtheirrace,ethnicity,orgenderhadaffectedtheirabilitytoobtainor
engageinbusiness.Interviewee#CON10declinedtoelaboratefurtherforpurposesofthe
report.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathecouldnotproveanyinstanceinwhichhisrace,ethnicity,orgenderhasaffected
hisabilitytoobtainorengageinbusiness;but,hestatedthathehastriedpursuitsinthepast
thathavelefthimfeelingthatmaybethatwasapartofit(e.g.,race,ethnicity,orgender).He
statedhewasleftfeelinglikehedidnotrepresentthelocalcommunity.Hestatedthatinother
cases,ithasbeenthecompleteoppositeinthathehasbenefitedtheteam,notsomuchdueto
hisethnicity,butduetothefactofwherehegrewup.Hestatedthatheknewthelocal
sensitivities,thelocalpriorities,andhecouldrelatetothelocals.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,believesthathisraceandethnicityaffecthiscompanysabilityto
obtainorengageinbusiness.Hestatedthatheusedtohaveawhitemalebusinesspartnerand
heseemedtoalwayshavealotofwork.Interviewee#CON13statedthatalthoughthedifference
intheamountofworkmaybeduetohismarketingskills,hebelievesthereisaGoodOldBoy
Networkatplay.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatrace,ethnicity,andgenderhaveaffectedthebusinessabilityto
obtainandengageinbusiness.TheDBE/MBEcertificationhasgiventhecompanyopportunities
andtheabilitytoparticipateintheworkenvironmentonalargerscale.Withoutthe
qualificationsassociatedwithInterviewee#CON16srace,ethnicity,andgender,thecompany
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wouldjustbeanotheroneofhundredstochoosefromforlargecompanies;theDBE/MBEstatus
helpstodifferentiatethebusiness.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatrace,ethnicity,andgenderhasaffectedthe
businessabilitytoobtainandengageinbusiness,notingthatthisistheresultofhumannature.
Interviewee#CON17statedaffirmativelythatcompaniesworkwithwhomtheyarecomfortable.
Interviewee#CON17reportedthatweallhaveourparadigms,andittakesalongtimetoget
overthem.
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,statedthatthereare
alwaysbarrierstopursuingwork.HestatedthatAfricanAmericanlawfirmsarenottreatedthe
sameasCaucasianlawfirms.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatifasked14yearsagoshewouldhavesaidthatherrace,
ethnicity,andgenderhaveaffectedherabilitytoobtainandengageinbusiness.Shestatedthat
todayhercompanyhasrelationshipswithmanyofthelargefirmsthattheyworkwithandthose
largefirmscomefromthesamesocialnetworkthatshedoes.Shestatedthatthereisacertain
hesitancyamongcompaniestotrustherbusinesswithlargeprojects.Shestatedthatshefeltthe
Consortiumhasencouragedprimecontractorstoworkwithminorityandfemaleowned
businesses,butitisdependentontheconstituency.Shestatedthatprimecontractorsshould
utilizefirmsthatreflecttheconstituencyofthemunicipalityandshouldbesensitivetothat
need.Shestatedthatintheprivatesectoritisachallengetoobtainworkandherfirmis
contactedwhentheprimecontractorneedsanAfricanAmericanfirm.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,feltthatherraceandgenderhasprobably
affectedherabilitytoobtainorengageinbusinesswiththeConsortiumandprimecontractors.
Shedidnotfeelasthoughthishasbeenanissueinthe(nonConsortium)publicsectoralthough
ithasbeenanissueintheprivatesector.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
feltthathisracehasplayedapositiveroleinhelpinghimtoobtainbusinesswiththe
Consortium,butthatithasnegativelyimpactedhisabilitytoworkwithprimecontractors.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
doesfeelsometimesthatbeingafemaleinamaledominatedfieldhasaffectedherabilityto
obtainorengageinbusiness.Shestatedthathergenderhasaffectedherabilitytoobtainwork
withprimecontractorsapproximately50percentofthetimewhereasinthepublicsector,
dependingonthejob,hergenderhasaffectedherabilitytoobtainorengageinbusiness
approximately30percentofthetime.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,didnotbelieveraceorgenderhasaffectedhisabilitytoobtainorengagein
workinanovertway,butstatedthatthereisatendencyforafirmtogowithpeoplewhoknow
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE165

yourwork.Hestatedthatyouhavetobreakintotheinnercircle.Itishardertodowhenyou
areaminority.Itishardtogaintheirconfidence.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthathisrace,
ethnicityorgenderhasabsolutelyaffectedhisabilitytoobtainorengageinbusiness
consideringthefactthathehasneverworkedwithahugefirmonanylargescaleprojects.
Interviewee#CON29statedthatwithrespecttopursuingworkwiththeConsortium,the
knowledgeoftheavailabilityofcontractsisnotavailabletothepublicoronthewebsitesohe
feelsthatitisaselectiveprocessandtheyselectwhotheywantbasedonfriendshipsand
relationships.Hestatedthatrelationshipsresultinthecontractsandthatminoritiesarenotable
todeveloprelationshipsbecausetheydonotsocializewiththemajorityfirms;theyaretypically
keptoutoftheinnercircle.Hestatedthathehasneverworkedinthepublicsectorotherthan
hissingleprojectwithUCLA,sohedoesfeelthatthereisabias.Hestatedthattypicallythe
workerbeeswillbeminoritiesandpossiblyoneortwoatthetop,butthereisindeedabiasas
itrelatestotheawardingofcontractsandtheknowledgeofprojects.Hestatedthathisrace,
ethnicity,orgenderhaspositivelyaffectedhisabilitytoobtainworkintheprivatesector.He
statedthateventhoughcompaniesandpeoplefeelthattheycangetoveronhim,hefeelsthatit
doesallowhimtokeephisbusinessafloat.Hestatedthatpeopledohirehimbecauseofhisrace
andthatgetshiminthedoor.Hestatedthatoncehegetsajobitisproventhatitwillleadto
moreworkeitherthroughthesamepersonorareferralandthatiswhathassustainedhis
business.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathedoesfeelasthoughhisraceandethnicityaffecthisabilitytoobtainand
engageinbusiness.Hefeelsthatthishappensininstancesinwhichhedoesnotfitintothe
mainstreamlookofotherinvestorsorcontractorsevenifhehasdonepastbusinesswiththem
andtheycanvouchforhisperformanceandhisbusinessqualityofwork.Hedoesnotfeelthatit
hasaffectedhisabilitytoobtainworkwiththeConsortiumorwithotherprimecontractors.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedbothyesandnoastowhetherhisrace,ethnicity,orgenderhasaffected
hisabilitytoobtainorengageinbusiness.Hestatedthathisbusinesshasbeenidentifiedasa
minoritybusinesseventhoughheutilizesthebestcrewthathecanassemble.Hedoesnotcareif
theyareminorities:black,white,blue,orbrown.Hejustusesthecrewthatcanperformtothe
standardswhichheplacesonthem.Interviewee#CON31saidheisthefaceofthebusinessand
asthefaceofthebusinesstherearesomestereotypesandpreconceivednotionsaboutthework
thatAfricanAmericansdo.HestatedthereisthethoughtthatAfricanAmericanworkersare
lazy,overcharge,andcutcorners.Hefeelsthatnoneoftheseexamplescharacterizedwhathe
andhiscompanyhavedoneontheircompletedjobs.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthathergenderhasabsolutelyaffectedherabilitytoobtainandengageinworkwiththe
ConsortiumandinthenonConsortiumpublicsectorandprivatesector.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,feelsthatherraceandhergenderhaveaffectedherabilitytoobtainorengagein
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE166

business.ShefeelsthattheConsortiumhasabiasagainstDBEs.Shestatedthatshehas
experiencedgenderbiaswithprimecontractorsandinthepublicsector.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatherrace,ethnicity,orgenderhasprobablyaffectedherabilityto
obtainorengageinbusinesswithprimecontractorsandintheprivatesector.Interviewee
#CON35statedthatmanytimesthingsareworkedoutaheadofanRFPevenbeingpresentedto
thepublic;shefeelsasthoughraceissometimesafactor.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshebelievesthatherraceandgenderaffectherabilitytoobtain
orengageinbusiness.ShestatedthatshehadarecentcontractwithMetrobutthentheycalled
heranddecidedtotakealltheworkback.ShefeelsthatwhenyouareAfricanAmericanyouget
questionedalotaboutyourcompanyspricestructure.Shestatedthatwithrespecttolawfirms
intheprivatesector,shebelievesthatlargenonAfricanAmericanlawfirmswillnotutilizeher
services,butwillworkwithsomeonefromtheirraceinstead(althoughitisnotsomething
someonewouldsaytoherface).ShestatedthatifsheknowsthatthelawfirmisnotAfrican
Americanshewillsendawhiteemployeetogetthebusiness.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathefeltthathisraceorethnicityaffectshisabilitytoobtainorengageinbusinesswith
theConsortium,withprimecontractors,andintheprivatesectoringeneral.Hestatedthatitis
commonknowledgethatprimecontractorsdonotwanttouseDBEs.Hestatedthat,inthe
privatesector,ifprimecontractorsdonothavetouseaminorityfirm,andtheydonotreceive
anyincentiveforusingone,theprimecontractorswillnotuseminorityfirmsbutusetheir
friendsinstead.Hestatedthathisfirmhasbeensuccessfulinthepublicsectorgenerallythough
hedidnotgeteverythingthathebidon.Hestatedthatheworkseverydaytobuildhisbusiness
andcredibility.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathisraceorethnicityhasaffectedhis
abilitytoobtainorengageinbusinessacrossallsectors.Heexplainedthatthereareveryfew
NativeAmericansinthecontractingbusiness;hestatedthattheL.A.CountyMTAandother
agenciesthenhavealotofcuriosityaboutIndians.Hestatedthattheywanttoseehis
identification,askhimhowhegothisidentification,andaskhimhowheknewthathewasan
Indian.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,feltthathisraceorgenderhasaffectedhisabilitytoobtainorengagein
businesswiththeConsortium,withprimecontractors,andintheprivatesector(butnotinthe
nonConsortiumpublicsector).Hestatedthattheonlyreasonaprimecontractorwillcontact
himisifDBEparticipationisrequired;itisonlytohelpthemmakemoney.Hestatedthatthe
ConsortiumshouldsomehowputsmallbusinessesandDBEsinapositiontomakemoneytoo.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthatitwaspossiblethathisrace,ethnicity,orgenderhasaffectedhisabilitytoobtainor
engageinbusinesswithprimecontractorsandintheprivatesector.Hedidnotbelievethese
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE167

factorsaffectedhisabilitytoobtainorengageinworkwiththeConsortiumorinthepublic
sector.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,doesnotfeelasthoughherrace,ethnicity,orgenderhaveaffectedher
abilitytoobtainorengageinbusinessbecausetheyjustdonotgivetheoffersanymore.Thishas
beenthecaseinthepublicandprivatesectors.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathebelieveshisracehasdefinitelyaffectedhisabilitytoobtainor
engageinbusinesswiththeConsortium(MTAandRTD),withprimecontractorsandinthe
privatesectortoalesserextent.Hestatedthateversincewhitefemalesbecameaprotected
classithasbeendownhill.Hestatedthatheiscompetingwithwhitefemalesasminoritiesor
whitemalesusingwhitefemalesasfrontssothattheycangettheminoritybusiness.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathisracehasprobablyaffectedhisabilitytoobtainorengageinworkwiththe
Consortium,inthenonConsortiumpublicsector,andwithprimecontractors,butstatedthathe
couldnotproveit.Hestatedthatintheprivatesector,whenyoudonotgetpickedforajobbut
knowthatyouarejustasqualifiedasthecompetitor,youhavetowonderifitisbecauseyouare
AfricanAmerican.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthatifhewereCaucasianhewouldgetmorecontracts.Hestatedthatnoonewouldhelp
himtoobtainbondingwhichhefeltwasalsoafactorinhisabilitytoobtainorengagein
business.Hestatedthatwhenheneedstogetaninsuranceclaimapprovedhewillsendawhite
employeebecausetherateforwhichtheywillreceiveapprovalishigherthanthatofother
employees.Hestatedthatlastyear,inthepublicsector,awhiteownedfirmwithnolicenseand
noinsurancereceivedacontractbasedonthefactthattheywerenotminorityowned.
Interviewee#CON50alsocitedhisraceandethnicityasabarriertopursuingworkwiththe
Consortium.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthattherace,ethnicity,or
genderofabusinessownerdoesaffectthebusinessesabilitytoobtainorengageinbusiness
becauseprimecontractorsoftenhavealackofconfidenceinnewcomersorotherswhotheyfeel
havenotmetcertainprequalificationrequirements.IntervieweeCONTA#2statedthatin
generalDBEs,women,andminoritiesareimpactedbythelackofoutreachutilizationinthe
Consortiumtransportationindustry.Hestatedthatwomenhaveaparticularlyhardtimewith
primecontractorsworkingonpubliccontracts.
WT#9,aPrincipalofasmallbusinesstransportationplanningconsultingfirm,intheprocessof
gettingcertifiedasaDBE,submittedwrittentestimonyregardingtheSouthernCalifornia
RegionalDisparityStudy.Henotedthemajorproblemistheyearofthedatausedforanalysis,
sinceduringthoseyearstheeconomywasatthehighestpointandtherewerealotofprojects
somanythatthebigfirmswerewillingtosharewithsmallerDBE/SBEs.Timeshavechanged
nowwithnotthatmanyprojectsouttobidandnumerousfirmsapplying.Hestated,theresults
of[the]studyisnotvalidtothecurrentbusinessenvironmentandnooneexpectsthatwewould
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE168

seethe2006/2007[results]againinthenearfutureorevenagaininourlifetime.Hefurther
stated,Inshort,ifyoudontmandateDBEorSBErequirements,alotofDBEfirmswontbe
aroundnextyear.(Writtentestimonynotdated)
WT#10,afemalerepresentinganSBEfirmthatisintheprocessofgettingcertificationfor
WBE/DBEsubmittedwrittentestimonythattheDisparityStudyisnotvalidtothecurrent
businessenvironment.Itwas[donewhen]theeconomywasatthehighestpointandthere
werealotofprojects.Thebigfirmshadso[many]projectsthattheywerewillingtosharewith
smallerDBE/SBEfirms.Buttimehaschangeddrastically.Therearenotthat[many]projectsout
there.Inshort,ifyoudontmandateDBErequirements,alotofDBEfirmswontbearoundnext
year.(Writtentestimonysubmitted11/03/09).
PF#8,awomanrepresentingtheminoritybusinessopportunityservicesintheMayorsoffice
providedoraltestimonyatthepublicforumheldonOctober20,2009.Sheaddressedtheneed
forchecksandbalances,[b]ecausewehavepeoplewithpersonalagendasandpersonalissues
thattheymaynotwanttoseefairnessacrosstheboard.(PublicForumLosAngelesheldon
October20,2009).
Someintervieweesfelttheirrace,ethnicity,orgenderhadnoeffectontheirabilitytoobtain
orengageinbusiness.[Interviewees#CON:1,3,6,7,8,11,14,15,18,22,23,28,32,39,41,42,
52,53,55,56,57,58,CONTA#1].Interviewee#CON1,anonDBEHispanicAmericanmale
ownerofanelectricalcontractingfirmintheSanDiegoarea,doesnotbelievethathisrace,
ethnicity,orgenderhaseveraffectedhisfirmsabilitytoobtainorengageinbusiness.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,wasnotawareofanycircumstancesinwhichtherace,ethnicity,orgenderofthe
ownerhasaffectedthebusinessesabilitytoobtainorengageinbusiness.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompany,wasnotawareofanyincidentsinwhichrace,
ethnicity,orgenderoftheownerofabusinesshasaffectedthebusinesssabilitytoobtainor
engageinbusiness.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthathedoesnotthinkthattherace,ethnicity,
orgenderoftheownerofabusinessaffectsthebusinessesabilitytoobtainorengagein
business.Hestatedthatitisgenerallyapositivebecauseongovernmentjobstherearegoalsfor
employingDBEs.Intheprivatesectorabusinessabilitytoobtainbusinessisrelatedtoits
competence;generalcontractorsjustwantthejobdone.Therefore,beingaminorityisanasset.
Hestatedthathehasneverseenasituationinwhichtherace,ethnicity,orgenderoftheowner
wasanegative.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatherrace,ethnicity,orgenderhasnotaffectedherabilitytoobtain
orengageinbusinesswiththeConsortiumorwithnonConsortiumpublicsectorwork,butit
hassometimesaffectedherabilitytoengageinbusinessintheprivatesector.
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Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthathisrace,ethnicity,orgenderhasnotaffectedhisabilitytoobtainor
engagewithbusinesswiththeConsortiumorprimecontractors.Hefeltitwashardtosay
whetherithasaffectedhisabilitytoengageinbusinessinthenonConsortiumpublicsectorand
theprivatesector.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,does
notfeelasthoughherraceorgenderhasaffectedherabilitytoobtainorengageinbusiness,but
shedoesfeelthatthereisamentalblocktowardsmallbusinesses.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,reportedthatonlythequalityofhisworkaffectedhisabilitytoobtainorengagein
business.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedgenerallya
businessesabilitytoobtainorengageinbusinessisnotbasedonrace,ethnicity,orgenderbut
onability.Hedidstate,however,thatminoritieshaveahardertimebuildingrelationships.
CONTA#1statedthatthisproblemisgenerational.Nonminoritieshavemorecontactsthan
minorities.CONTA#1statedhebelievesthatthissituationissomewhatdifferentinLosAngeles
becausetherearemorematureminorityfirmsthere.Hestatedthatincomparison,most
minorityfirmsinSanDiegoarestillintheirinfancy.
Afewintervieweesdidnotknowwhethertheirrace,ethnicity,and/orgenderhadaneffecton
theirabilitytoobtainorengageinbusiness.[Interviewees#CON:9,24,44,48,49].
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,didnotknow
whetherhisrace,ethnicity,orgenderhasaffectedhisbusinessabilitytoobtaininorengagein
business.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthatshedidnotthinkherrace,ethnicity,orgenderhasaffectedher
abilitytoobtainworkwiththeConsortium,butsometimesalightbulbcomesonandshethinks
thatmaybeitis.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,statedthathedoesnotbelievethathisrace,ethnicity,orgenderhas
affectedhisabilitytoobtainorengageinbusiness,butstatedthatitisnotsomethinghewould
everknowbecauseitisnotobvious.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,didnotfeelasthoughhisrace,ethnicity,orgenderhadaffectedhisabilityto
workwiththeConsortiumorinthenonConsortiumpublicsector.Hewasnotsurewhetherit
affectedhisabilitytoobtainworkwithprimecontractorsbutstatedthathecouldnotprove
anything.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,didnotfeelasthoughhehasbeenshutoutofopportunitieswithprimecontractors,the
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE170

Consortium,orotherpublicsectorentities.Hedidnotknowwhetherhisraceorethnicityhas
evershuthimoutofopportunitiestoobtainbusiness.
Workenvironmentforminoritiesandwomen.
Someintervieweesreportednodifferencesintheworkenvironmentforminoritiesand
womenthanfornonDBEsintheConsortiumtransportationindustry.[Interviewees#CON:3,
7,8,9,11,16,18,20,22,23,37,39,48].Interviewee#CON3,anonDBEwhitemaleownerofan
environmentalservicescompanyintheSanDiegoarea,didnotknowofanydifferencesinthe
workenvironmentforDBEs,women,andminoritiesintheConsortiumtransportationindustry.
Fromhisperspectiveasaprimecontractor,henotedthathedidnotcarewhoshowedupto
workajob;genderandminoritystatushadnoimpactonthejob.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedingeneraltherearenoissueswiththework
environmentforDBEs,women,andminoritiesintheConsortiumtransportationindustry.He
stated,ingeneral,theprivatesectorgoesoncompetence.Ifthegeneralcontractororowner
thinksthatabusinessiscompetent,theydonotcareaboutrace,ethnicity,orgender.If,however,
theythinkthatyouobtainedthejobbymeansotherthancompetence,thenitbecomesanissue.
However,iftheDBEsknowwhattheyaredoing,noonecaresthatthecompanyisaDBE.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthatthereisnosignificantdistinctionastotheworkenvironmentforwomen,
minorities,orDBEs.HespokenegativelyabouttheDBEProgram.Hestatedthatifforsome
reasonthestateneedsaquickturnaroundonaprojecttheywillwaivetheDBErequirement.He
statedthattheDBEProgramisarbitraryandasaresult,hefeelsitisworthless.Hestatedthat
theDBEsubcontractorsthathehasspokenwithindicatedtohimthatnothinghasevercomeof
theirDBEcertification.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
amongthetransportationengineeringfirms,theworkenvironmentforwomen,minorities,and
DBEsisnotsignificantlydifferentthanthatfornonDBEs;therearealotofgoodengineering
firmsoutthere.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,declinedto
describetheworkenvironmentforDBEs,women,andminoritiesintheConsortium
transportationmarket,butstatedthatherpersonalexperiencehasbeengreat.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,notedthattheworkenvironmentforDBEs,women,andminoritiesinthe
Consortiumtransportationindustryisveryinvitingandthatitisapositiveworkindustry.In
largepart,diversityisbeingenforcedandpromotedonvariousprojects.Interviewee#CON16
didstatethatpeoplearegenerallychosenbecauseoftheirabilities.
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Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,noted
thatsheshavingablast,andthattherearelotsofopportunitiesforsmallbusinessestodo
importantthingsintheConsortiumtransportationindustry.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthattheworkenvironmentforwomenandminoritiesisvery
positiveandveryintegrated;thishasbeenveryhelpfulforbusiness.Interviewee#CON20
identifiedanAfricanAmericanfemaleownedbusinesswithafleetofover7,000buses;she
thoughtthiswasveryimpressive.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehasexperiencednormalworkdays.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,statedthattheworkenvironmentforwomenandminoritiesisokay.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathedidnotrememberanythingnegativeabouttheworkenvironmentforDBEs,
women,andminoritiesintheConsortiumtransportationindustry.Hestatedthat,forthemost
part,theworkenvironmentisokay.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatshedoesnotthinktheworkenvironmentinthetransportationindustryisdifferentthan
anyoneelses;shestatedthatworkcanbedifficultandhardandthatjustcomeswiththe
territory.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthatasfarasheknowstheConsortiumworkenvironmentforDBEsand
womenownedbusinessisokay.
SomeintervieweesreportedinequalitiesintheworkenvironmentforDBEs,women,and
minoritieswhencomparedtotheworkenvironmentfornonDBEs,nonwomen,andnon
minorities.[Interviewees#CON:14,26,33,34,40,50,51].Interviewee#CON14,aLatin
AmericanmaleownerofaDBEcertifiedmarketingfirm,statedthatinequalitiesinthework
environmentoftenhappenbecausetheagencieswithwhomtheyworkdonotunderstandthe
industry.Hestatedthattheabilitytodogoodworkistieddirectlytothequalificationsofthe
projectmanagerandinthepublicsector,theprojectmanageroftendoesnothavetherequired
experience.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthattheworkenvironmentforwomenandminoritiesisnoteasy,issometimeshostile,
andisverymaledominated.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattheworkenvironmentforwomenandminoritiesisalloverthemapintermsof
howitaffectswomenandminorities.Shestatedthatitisdependentontheprimecontractorand
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thecircumstancesoftheproject.Shestatedthatinthefinalanalysis,theworkenvironment
createdbytheprimecontractorisusuallybasedontryingtosavemoney.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthereisgenerallyabiasagainstwomenintheindustryandaninstitutional
biasagainstDBEsinparticular.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,observedthatDBEsarekindoflookeddownupon.Hestatedthatthe
Consortiummakesyoufeellikeyouareonlytherebecauseyouareaminorityandyoushouldbe
happywithanyamountofmoneythatyoumake;theywanttheDBEstothinkthattheyarelucky
tobethereworking.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthattheworkenvironmentforwomenandminoritiesisverydifficult;hestatedthatthe
workenvironmentforCaucasianpeopleisveryeasy.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,statedthathehascometotheconclusionthatsmall
businessescannotcompeteinthetransportationindustry.
Someintervieweesreportedthatwomenandminoritiesarestillaffectedbywhotheyare.
[Interviewees#CON:1,4,13,17].Interviewee#CON1,anonDBEHispanicAmericanmale
ownerofanelectricalcontractingfirmintheSanDiegoarea,statedthatpeoplearestillaffected
bywhotheyare.Hestatedthathebelieveswomenwhoareaptlyqualifiedforajobarestill
discriminatedagainstandnotgiventheirfullopportunity.Hestatedhehadexperienceina
privatesectorcompanywhenanextremelygiftedapprenticewassexuallyharassedandleft
thefieldbecauseofit.Insteadofthefemaletakingaction,shejustleftthetrade.Hestatedthat
incontrasthehasalsoseensomeextremelytalentedwomenlivinguptotheirfullpotential
andrunningcrewsinthefield.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthattheworkenvironmentintheindustryforDBEs,women,and
minoritiesisnoteasybecauseyouhavetosellyourselftotheprimecontractorsandmakesure
thattheyarewillingtoputyouontheirteamasasubcontractor.Hesaidevenifyouare
successfulingettingontheteam,youhavetobeluckyenoughthattheprimecontractoractually
winsthecontract.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatwhilehecouldnotcommentongender,hedoeshavea
whitemaleassistantandsometimeshefeelsasthoughhisassistantisabletobetterrelatetohis
whitemaleclients.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,describedtheworkenvironmentforDBEs,women,and
minoritiesintheConsortiumtransportationindustryasfine.Interviewee#CON17hasbeenin
theindustryforalongtimeandknowsthepeople,andhercompanyhasearneditsreputation.
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Interviewee#CON17knowsthereareopportunitiesthatshesmissedbecauseshesnottheright
ethnicityornottherightrace,butshejustmovesontootheropportunities.
SomeintervieweesreportedadifficultyinnewDBEsabilitytoobtaincontracts.[Interviewees
#CON:12,30].Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivil
engineeringfirm,statedthatmostmembersoftheConsortium(OCTA,L.A.CountyMTA,and
SCRA)havedoneanexcellentjobofofferingopportunitiestoDBEs,WBEs,andMBEs,andthat
supporthasallowedtheindustrytodiversifyandhasforcedlargecompaniestoincreased
participationbyqualifiedfirms.Insomecases,ithasopenedupopportunitiesfornewDBEs.The
issuewiththeConsortiumagenciesisthatsomewillintroducenewDBEsalthoughotherswill
onlyusethesameold,sameoldDBEs.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathecanperformtheworkaswellasauditandaccountingprocesses,butheisnot
calledtoperformtheworkbecauseheisasmallbusiness.
Stereotypicalattitudes.
Someintervieweesreportedhavingexperiencedstereotypingfirsthand.[Interviewees
#CON:12,17,19,20,25,26,28,31,33,34,40,45,46,50,CONTA#2,WT#11].Interviewee
#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,statedthathe
hadexperiencedstereotypingwithintheConsortiumtransportationindustry.Hestatedthathe
hadonesituationwherehewastaggedasarailengineerwithouttheunderstandingor
wantingtounderstandthathedoesmorethanthat;thishappenedinaninterviewwithoneof
theConsortiumagenciesandhiscompanydidnotreceivethejob.Hestatedthatoneofthekey
membersofthepanelcalledoneofhisfriendstolearnmoreinformationaboutInterviewee
#CON12andclassifiedhimonthatbasis.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatshehasknowledgeofstereotypinginthe
Consortiumtransportationindustry,butthatwhenthisoccurstheworkisnotworthit.
Interviewee#CON17immediatelyhandlesanyreportsofthiskindofbehaviorwhenreportedby
heremployees.
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,statedthathebelieves
thathisfirmisnotgivenhighprofilecasesbecauseofstereotyping.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatshehasexperiencedstereotypingintheConsortium
transportationindustry.Shestatedthattypicallywomenarecalledwhentheprojectcallsfor
outreach;thisisinherfavorbecausethatisherfirmsfocus.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthathehasheardofstereotypingwithintheConsortiumtransportationindustry;hefelt
asthoughafirmsDBEcertificationislikeanegativelabel.
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Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthatshehasheardaboutstereotypingintheindustryandshehasoverheardmale
contractorsmakereferencesaboutcertainpeoplethatwerestereotypical.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthatstereotypingisamatterofperception;his
companyenduresandtheymoveontothenextbid.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,hasexperiencedstereotyping.AlthoughitwasnotintheConsortium
transportationindustry,hefeelsthathehasdealtwithitinthesensethatwhenhearrivesona
projectwithadiversecrewofthebestmenavailable,inhisopinion,theylookathimandexpect
lessimmediately.Theyassumethatthequalityofworkwillnotbeuptosnuffwhereaswhenhe
hasworkedonaprojectforaminorityfirmwithallwhitemen,andmaybehe,andoneother
[minority],thereisnotthesamefeelingorexpectationforfailure.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatitcanbeverydifficulttogetoutofthemoldoftheimpressionsthatprime
contractorshaveaboutDBEs.Shestatedthatevenwhenprimecontractorshavepreviously
workedwithasubcontractor,itisverydifficultforthemtounderstandthatyoumayhavethe
skillsotherthanthoseutilizedonpriorjobs.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,statedthatshehasexperiencedstereotypinginthatbecausesheisasmallfirm,she
ispresumedtobeincompetentandincapableofdoingthejob.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthathehasexperiencedstereotypingandtherearealwaysconflicts
betweentheprimecontractorsandthesubcontractors.HestatedthateveniftheConsortium
believesthathecandoacertainjobtheprimecontractorisnotconvinced.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthattheConsortiumalwaysutilizesthesamecompaniesas
opposedtoopeningopportunitiestonewcompaniesandinvitingfreshideas.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathehasexperiencedstereotypingalittlebit.Hestatedthathehas
goneoutonsomelittlemeetingstodiscussacontractandhecouldseethemeetingparticipants
surprisewhenhewalkedintotheroom.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthathehasthefeelingthatheisstereotypedanytimethathisfaceisshown.Hestated
thathisappearancehasbeenafactorinhisinabilitytoreceivethequantityofworkthatheis
capableofperforming.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasexperienced
firsthandstereotypingofAfricanAmericansintheConsortiumtransportation.Thestereotypeis
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE175

thattheyarelazyanddonotwanttowork.SimilarlytherearestereotypesthatAsianpeople
donotdoconstructionbecausetheydocomputers,andNativeAmericansdonotdoconstruction
becausetheyhavebingo.CONTA#2statedthatlastyearheapproachedaHispanicforemanand
askedtheforemanwhytherewerenoAfricanAmericansworkingontheproject.Herecorded
theresponse,theyrelazyandtheydonotwanttowork.CONTA#2statedthathealsowentto
anotherCaucasianforemanandaskedthesamequestion,whytherewerenoAfricanAmericans
onthejob,andwastoldtheydonotwanttowork.CONTA#2tapedthecommentsand
reportedittothelocalgovernment.Thejobsitewasshutdownthatday.ThenextdayCONTA
#2metwiththeowner,andtheownerhiredacoupleofAfricanAmericanswhowere
subsequentlylaidoffafterthejobwascompleted.ThecompanyhasnothiredanyotherAfrican
AmericansandtheyarestilldoingworkfortheCityofSanDiego.TheCityAttorneymetwith
CONTA#2andlistenedtotherecording.CONTA#2wastoldthattheCitywouldauditthe
companysemployeerecords.CONTA#2laterlearned,however,thattheauditwasonlyadesk
auditinwhichaquestionnairewascompleted.Thecompanywasalsodeterminedtobein
compliance.
WT#11,aHispanicindividualrepresentingaminoritywomanownedsmallbusinessITfirm
submittedwrittentestimonyinconnectionwiththeSouthernCaliforniaRegionalDisparity
StudytoreportwhathebelievesisevidenceofDiscriminationbasedonrace,genderor
ethnicityinthetransportationcontractingindustry.HestatedthathehasparticipatedinOCTA
SmallBusinessMatchMakingMeetingsandsubmittedatleastadozenrequeststotheOCTA
ContractingOfficefortheopportunitytodemonstrateanewtechnologythatcanbenefitOCTA
operationsbuthisrequestswereignored.So,yesIbelievethatbecauseofmyHispanic
backgroundImbeingignoredandnottakenseriously.(Writtentestimonysubmitted9/29/09).
Someintervieweeshadheardofstereotypingbutnotexperiencedit.[Interviewees#CON:15,
22,49,51].Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertified
engineeringandconstructioncompany,hasheardofstereotypingintheConsortium
transportationindustry,buthenotedthatthemajorityofthatconductwasintheearly1990s,
muchofwhichhasgonebythewayside.Interviewee#CON15hasspecificallyinformedhis
employeesthatkindofbehaviorisintolerableandnotallowed.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehadheardofstereotyping.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehadheardofstereotypingandwassurethatitexists.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,reportedhavingheardofstereotypingintheConsortium
transportationindustry.
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Discrimination.
Someintervieweesreportedtheexistenceofdiscriminationinthetransportationindustry.
[Interviewees#CON:2,4,13,14,15,17,19,22,24,25,27,30,34,37,38,40,46,47,49,50,51,
52,53,55,58,CONTA#1,2,WT#12,13,14,15].Interviewee#CON2,aDBEcertifiedAfrican
AmericanmalestructuralengineerintheSanDiegoarea,statedthatheexperienced
discriminationwhileemployedbyCaltransfiveorsixyearsago.Hestatedthatnonminorities
werefavoredforpromotion.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatalthoughhehasnotspecificallyheardofanyinstancesof
discriminationintheindustry,heissurethattherearesuchinstancesofdiscriminationinthe
industry,butitissohardtoprove.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehadneverheardoforexperiencedovert
discrimination,butitishardtotell.Hestatedthatthereismuchthatcouldbediscriminatorybut
everyoneispoliticallycorrect.Interviewee#CON13alsostatedthathehasobservedfavoritism
onthepartoftheagencyfavoringamaleoverafemalecounterpart.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathehadmaybeheardofdiscriminationintheConsortiumtransportationindustry;for
example,hehasheardcommentslikepeopledonotliketoworkwithwomen.Hestatedthat
hedoesnotknowthebasisfordecisions(i.e.,whetherdiscriminationisinvolved)becauseheis
nottherewhenthedecisionsaremade.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,hasheardofdiscriminationintheConsortiumtransportationindustry,
buthenotedthatthemajorityofthatconductwasintheearly1990s,muchofwhichhasgoneby
thewayside.
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,statedthathehas
experiencedsubtlediscriminationbytheConsortiuminthatheisnotgiventhequalityor
quantityofcasesthathedeserves;hestatedthattheyarenotassignedthehighvaluecases.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehasheardofdiscriminationinthetransportationindustry.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,reportedthatshehasheardofdiscriminationintheConsortium
transportationindustrybutnotasfarascontractsareconcerned.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthathefeltasthoughdiscriminationisalwayspresent.Hebelievesthathisinabilitytoget
facetimewithprimecontractorsisraciallymotivated.Hestatedthatwhitemendonotwant
tositdownandtalkwithblacks;itishard.
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Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthathehasexperienceddiscriminationinthetransportationindustryin
beingplacedonateamandthenputtotheside.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,feelsasthoughthereisalevelofdiscrimination,butnothingthathecanunequivocally
provesimplybecausethosetypesofthingsarenotstatednoraretheyputinwriting;ratherthey
aremanifestinactionsandexecution.Interviewee#CON30hasnotcomplainedaboutalleged
discriminationbecauseDBEsandsmallfirmsdonothavethemanpowernortheabilityto
exposethemwithoutconcreteevidence.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasnotobservedanyobviousdiscriminationbutheissurethatithashappened.
Hestatedthathewouldnotknowwhotocomplaintoaboutanysuchdiscriminationwithout
jeopardizingfuturecontracts.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathehasexperienceddiscriminationin
theConsortiumtransportationindustry.Hestatedthatsomeoneoncemadeacommentabout
goingbacktothereservation.Hedidnotcomplainandhehasnoconfidenceinanyonehewould
complainto;hestatedthatthishasbeengoingoneversince[Christopher]Columbus.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,reportedthathehadbeencalledaracialslurandhadbeenverballyaccostedby
aprimecontractorsemployees.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathehasheardofdiscriminationinthetransportationindustry,but
thishasbeengoingonforafewhundredyearsnothingnew.Hestated:Ihavebeendealing
withitallmylife.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathehadnotreallyheardofdiscriminationintheConsortiumtransportation
industry,butstateditishardtoputyourfingeron.Itisjustapartoflife.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedthatitwasverypossiblethathehadexperienceddiscriminationinthe
Consortiumtransportationindustry.Hefeltasthoughitmayhavehappened,buthejustdidnot
recognizeit.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
reportedfeelingdiscriminatedagainstintermsofobtainingworkwiththeConsortium,but
statedthatitwasnothingthathecouldprove.
Interviewee#CON51,aDBEcertifiedAfricanAmericanmaleownerofaconstruction
managementandcontractingfirm,reportedhavingexperienceddiscriminationinthe
Consortiumtransportationindustry.Hefeltthatbecauseofhiscolorhewastoldnottocomplain
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE178

abouthisexperiencebecausehewouldsufferretaliationintermsoffirmsnotutilizinghimon
futureprojects.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,reported
havingheardofdiscriminationintheConsortiumtransportationindustry,butagain,couldnot
identifyanyspecificexamples.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,statedthathehasheardofdiscrimination,butstatedthatitwasnothingconcrete.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,statedthathebelievesthatthereisveileddiscriminationinthetransportationindustry,
buthedoesnotknowhowtoproveit.Hefeelsthatyoucanchangesituationsbychangingthe
requirements.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,hadheardof
discriminationintheConsortiumtransportationindustry,butcouldnotidentifyanyparticular
incident.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatthereis
discriminationintheConsortiumtransportationindustryintheformofparticipationofminority
firms.Hestatedthattheindustrydoesnothavetodirectlydiscriminateagainstminoritiesto
impacttheirparticipation.CONTA#1statedthattheprogramdoesnotencourageparticipation
andtheagenciesdonotfollowtheracialbreakdownoftheirprojects.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthattherearelotsof
incidencesofdiscriminationintheConsortiumtransportationindustry.However,hestatedthat
muchofthediscriminationisbasedonnepotismanddiscriminationregardinglanguage.Hewas
told10yearsagobytheownerofaprojectthattheownercouldnothireCONTA#2smembers
becauseworkersintheownerscrewonlyspokeSpanish,CONTA#2smemberswouldnotfitin
becausetheydidnotspeakSpanish,anditwasaSpanishonlyworkforce.AccordingtoCONTA
#2,theworkerswereworkingonaprivatepublicworksprojectandtheCityofSanDiegohired
themtodosomeredevelopment.
WT#12,anindividualrepresentingasmallbusinessperformingmaildeliveryservices
submittedwrittentestimonyinresponsetoarequestforpubliccommentregardingthe
DisparityStudyregardingharassment,criticismanddisrespectofthefirmsstaffbyCaltrans
employeeswhoexhibitedwhatshecallsunprofessionalconductcausingamonumental
amountofstressforthefirmsstaff.Examplescitedinclude:Howdidyoumanagetogetthis
contract;Iwillgiveyouaonemonthtrial;Youneedtoquitthisnow,soonerthanlater,
soonerwillbebetter.Shestatedafterfacingsomanyepisodesofharassmentsheagain
informedthemanager[Caltrans]whotoldhertogiveherstafftheCaltransmanagersbusiness
cardandcall.ShestatedtherewereseveralCaltransemployeesgivinginstructionstoherstaff
concerningthejobwithnocontinuityorconsistency.Shestated,[i]nspiteofCaltrans
employee[s]limitedcommunicationprocessesandresistance,Iwillcontinuetodeliverthebest
servicepossibletobenefitCaltransdaytodaymaintenanceoperations.(Writtentestimony
submitted9/25/09and10/1/09).
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WT#13,anindividualrepresentingaminoritywomanowned,DBEcertified,smallengineering
businesssubmittedwrittentestimonyfortheSouthernCaliforniaRegionalDisparityStudy
publicforum.Shestatedthat,[b]asedonmyexperiences,withoutgoalsforBlackfirmssetby
publicagencies,Blackfirmswillnotgetcontractsfromlargewhitefirms.Shecitedanexample
ofoneprimecontractorofferingworktothemfor$600$5,000onaCaltranscontractestimated
ataround$8milliondollarsjusttomeettheGoodFaithEffort.Theyhadinformedtheprime
theywereexperiencedandcouldhandlemuchmoreworkundertheprojectbuttheprime
impliedtheonlyreasontheywerecontactedwasforasmallamountofworktofulfillDBE
compliance.Sheasks[Caltrans],[w]hateverhappenedtogivingsmallbusinessesafairshareof
Caltranscontracts?IsthistypeofbehaviormonitoredbyCaltrans,andifso,whatisCaltrans
doingaboutit?Whyisthistypeofbusinessbehaviorallowed?(Writtentestimonysubmitted
10/19/09).
WT#14,aHispanicmaleownerofanengineeringfirmthatrecentlylostitsDBEstatusprovided
writtentestimonyinresponsetoarequestforcommentsabouttheDisparityStudythathisfirm
hasbeendeniedtheopportunitytoprovidecivilengineering/surveyingservicesdespitehaving
thequalificationsandexperienceworkingonsimilarprojectsinscopeandsizeandattributes
itsnonselectionforcontractingopportunitieswith[LACMTA]/OCTAasbaseduponprejudice
anddiscrimination.(Writtentestimonysubmitted11/09/09).
WT#15,amaleprincipalofasmallHispanicownedengineeringfirmsubmittedwritten
testimonyinresponsetoarequestforpubliccommentregardingtheDisparityStudythat,there
isanapparentdiscriminationagainstsmallerfirmsandinparticularHispanics.Hisfirmhas
respondedasaprimetoafewLACMTAsolicitationsandsubmittedaproposalbuthasnever
receivedacontractfromLACMTA.(Writtentestimonysubmitted11/05/09).
Mostintervieweesreportedneverhavingheardoforexperienceddiscriminationinthe
transportationindustry.[Interviewees#CON:1,3,5,6,7,8,9,10,12,16,18,20,21,23,25,26,
28,29,31,32,33,36,39,41,42,44,45,48,54,57].Interviewee#CON3,anonDBEwhitemale
ownerofanenvironmentalservicescompanyintheSanDiegoarea,statedthathewasunaware
ofanyactsofdiscriminationintheConsortiumtransportationindustry.Theonly
discriminationthathewasawareofaredecisionsmadebaseduponabilityorthefactthat
someonecannotdothejoborthefactthatyoujustdonotlikesomeone(forinstancethe
annoyingdriller)notbasedonraceorgender.
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K.PerceivedGeneralBarrierstoParticipation
inthePublicandPrivateSectors
BGPAAStudyAnecdotesRegardingPerceivedGeneralBarriersto
ParticipationinthePublicandPrivateSectors
BarrierstopursuingworkwiththeAirportAuthority.
SomeintervieweesidentifiedtheAirportAuthoritysnotificationofworkopportunitiesor
biddingprocessasbarrierstopursuingworkwiththeAirportAuthority.[Interviewees#BGP:
4,5,10,12].Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,said
thatthecontractandbidprocedureswerenotunnecessarilyrestrictiveforsmallbusinesses,but
thattherealrestrictionisforbigbusinesses.Itsnotworthitforthebiggeneralstodoallthe
paperwork.FortheAirport,thesizesofthecontractsaresmall,andtherearesomanysmall
businessandminoritybusinessrequirementsthattheyhavebuiltintothesecontracts.Ifthey
tookthatoff,anddidsomesortofperformancemeasureorbestusepackagebidproposal,then
thebigguyswoulddominatethework.Theyhaveitsetupforsmallgenerals,butthatswhyits
soimperativetomakesurethesubsaregettingpaidbecausethesearesmallgeneralsthatare
sometimesveryshakyfirms.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatthereare
barriersrelatedtounnecessarilyrestrictivecontractspecificationsandbiddingprocedures.He
said,Itstheliabilitiesandindemnificationclausesinthose[contractsandbids].Hestatedthat
contractsawardedonthebasisofqualificationsratherthanthelowbidcanpresentabarrierfor
smallbusinessesbecauselargerfirmsaretypicallygoingtohavebetterqualifications,soits
goingtolimityouraccess.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthebiggestbarrierto
workingwiththeAirportAuthorityisthattheAuthorityappearstotakethelowestbid.Hesaid
thatinordertodealwiththisbarrier,firmstrynottogiveacompleteproposal,andifthefirm
knowsthatsomethingneedstobedone,butitisleftoutoftherequestforaproposal,then
youleaveitoutbecausethepersonwhoprovidesaproposalforthesmallerscopeofwork
willwintheworkbecauseofthelowerfee.Hereportedthatfirmshavetomanipulatetheirbid
byprovidingaproposalthatrespondssolelytorequestforproposalsandnothingmoresothat
theyhaveachanceofwinningandcanaddoncoststhatwerenotincludedintherequestfor
proposals.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,reportedthatthecompanymayhaveexperiencedabarriertoworking
withtheAirportAuthorityduetolackofnotificationconcerningopportunities.
Acoupleofintervieweesidentifiedobtainingfinancing,bondingorinsuranceasbarriersto
pursuingworkwiththeAirportAuthority.[Interviewees#BGP:6,13].Interviewee#BGP6,the
presidentandmarketingcoordinatorofaWBEcertifiedengineeringfirm,said,Sometimesthe
primeswanttoimposeflowdownproceduresthatwereimposedonthembythe[Airport]
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE181

Authorityoragencies,andsometimesthatisundulystringent.Theyreaskingusfortoomuch
insurance,butIveneverhadaproblemnegotiatingthattoareasonablelevel.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatobtaining
workingcapitalisabarriertoobtainingworkforallbusinesses.
Oneintervieweeidentifiedcertaincontractspecificationsasabarriertopursuingworkwith
theworkwiththeAirportAuthority.[Interviewee#BGP:3].Interviewee#BGP3,thecoowner
ofawhitewomanownedconstructionfirm,saidthatsafetyspecificationsarebecoming
problematic.Hesaid,Itsgettingbad.Itseemslikewhattheyretryingtodowithallthesafety
stuff[isabarrier].Theyretyingourhandssobad[withsafetyspecifications]that,tome,its
makingthingsunsafe.
Someintervieweesreportedthattheyhavenotexperiencedanybarrierstopursingworkwith
theAirportAuthority.[Interviewees#BGP:11,14,15,16].Interviewee#BGP11,amanagerof
anAsianmaleownedDBEcertifiedcleaningservicescompany,reportedthathehasnot
experiencedanybarriertopursuingworkwiththeAuthority,butthatthecompanywould
obviouslyliketohavemorebusinesswiththem.HesaidthatitmightbegoodforBurbankto
haveaprojectnotificationsystemsimilartotheoneusedbytheLosAngelesAirporttonotify
prospectivebiddersofopportunitiesbecausehiscompanywouldjumpalloverit.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thatthecompanywouldliketoworkwiththeAuthorityanddoesnotfeelunfairlyexcludedfrom
doingwork.HesaidthattheonlybarrierfordoingworkwiththeAuthorityisthattheAirport
Authorityhashireditsownverysharppeoplewhocandomuchoftheworkthemselves.He
reportedthatnegativepersonalrelationshipsmaybeabarriertodoingworkattheLosAngeles
AirportbutnotatBGPAA.
Barrierstopursuingworkwithotherpublicsectoragencies.
One interviewee identified issues related to race, ethnicity, and gender as a barrier to pursuing
work with public sector agencies. [Interviewee #BGP: TA #1].IntervieweeBGPTA#1,the
executivedirectoroftheYoungBlackContractorsAssociation,saidthatminoritycontractors
needtobemoreassertiveintryingtoobtainworkbecausethesystemisgearedtoward
preventingthemfromobtainingwork.Hesaid.[Themessagefromthecontractingindustries
seemstobe],We[arent]goingtogiveyou[anything],we[arent]goingtoletyouget[anything]
untilyouactlikeyouwanttotryandtakeit.Whateveryoudo,weregoingtotrytoheadyouoff
atthepath.[Thesystem]isgearedtokeep[AfricanAmerican]peopleout,period.
Other interviewees identified other barriers to pursuing work with other public sector agencies.
[Interviewees #BGP: 6, 13. 15, 16].Interviewee#BGP6,thepresidentandmarketing
coordinatorofaWBEcertifiedengineeringfirm,said,AmarketbarrierforanySBEtryingto
breakintothemarketisthecertificationprocess.Itslong,itstedious,itsverydifficultandit
scaresalotofSBEsoff.OrIhearIdontwantsomeonetoseemyfinancesormypersonalnet
worth.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE182

Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatbondingand
accesstoworkingcapitalweretheonlysignificantbarriersforhisfirminthepublicsector.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthattheonlyobstacleto
workinginthepublicsectorisknowledgethattheresanopportunity.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthattherearesometimespoliticalbarrierstodoingworkinthepublicsector.
Barrierstopursuingworkintheprivatesector.
Oneintervieweeidentifiedsmallprofitmarginsasabarriertopursuingworkintheprivate
sector.[Interviewee#BGP:11].Interviewee#BGP11,amanagerofanAsianmaleownedDBE
certifiedcleaningservicescompany,saidthatthemainbarriertoworkingintheprivatesectoris
thelackofprofitallowedbytheairlines.Headdedthatithasgottentoapointwheretheywant
toknowwhatyourpercentageprofitisoffofthatcontract,andthatinformationisacompanys
privateinformation,butnowtheydemandthatyoutellthemhowmuchmoneyyouregoing
tomakeandaskingquestionsthat[allowthemto]figureupwhetherornotthatistrue.
Ifyouwanttodobusinessoutthere,thatswhatyou[have]todo.
Oneintervieweereportedthathewasunawareofanybarrierstopursuingworkintheprivate
sector.[Interviewee#BGP:13].Interviewee#BGP13,theownerofanoncertifiedconstruction
firm,saidthathehasnotreallyencounteredanybarriersintheprivatesector.Hesaid,Its
becomeaverycompetitivemarketrightnowforconstruction.Ourmarginsareverysmall,but
IwouldntconsideritabarrierIguess.
Network/goodoldboynetwork.
SomeintervieweesreportedknowledgeoforexperiencewithaGoodOldBoyNetworkor
othertypeofclosednetwork.[Interviewees#BGP:3,5,6,8,9,16,TA#1,TA#2].Interviewee
#BGP3,thecoownerofawhitewomanownedconstructionfirm,saidthatthereisaGoodOld
BoyNetworkinthelocalmarketplaceanditmakesitdifficulttoobtaincertainwork.Hesaid,
TheresdefinitelyaGoodOldBoyNetworkoutthere.Youcantgetaroundthat.Thereare
somejobsyoujustcantbidthem,youdontgoanywherenearthem.Itsawasteoftime.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthattheremaybe
theremaybesomepreferentialnetworkingforpublicagencywork.Hesaid,Ifitsopenbid
workfortheStateofCalifornia,unlessyoureasmallbusinessorhaveanin,yourenotgoingto
gettheproject.Wedontevenbother.Hesaid,Tryingtogetyourfootinthedoorisalwaysthe
issue.Engineeringismostlydonebasedonreputation,andunlessyouhavesometypeof
relationshipwiththosepeopleoranetworkwheretheyknowyoufrom,youregenerallynot
goingtogetinvited.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,said,Ihearof[theGoodOldBoyNetwork]onthecontractorend.Ihearofnetworks,
butwedontknow.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE183

Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatasmallnumberoffirmsseemtowinalotofprojectsinacousticalengineeringand
thatsometimestheoutcomeofthebidprocessseemspredeterminedinfavorofthosefirms.He
said,SometimesIhavethedistinctimpressionthatthebiddingprocesswasaformalityto
complywitharequirementtogetthreeorfourbids,butthewinningpartywaspreselected.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmreportedthatthegoodoldboynetworkstillexists.Hesaid,Ofcoursethatstillgoes
around.Evenifyourethelowerbid,theylljustcancelittogivetheirboyachancetobidlower
again.Whenaskedwhetherthiswasaprobleminboththepublicandprivatesectors,
Interviewee#9said,ItsmainlyaprobleminpublicsectorworknotwiththeAirport
Authority.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthatsomegovernmentalagenciesmaywanttousetheirGoodOldBoyNetworkrather
thanthemostqualifiedconsultant.Hesaidthathehasnothadthat[problem]withBurbank.
Hesaid,TheresalwaysthepossibilitythattheGoodOldBoy[Network]existswherepeople
areworkingcomfortablytogetherandtheydotheworkfine,andthatsunderstandable.Hesaid
thatwithinthelastyearheexperiencedasituationinwhichhewasaskedtosubmitaresponse
toanRFQ,butthepublicentitytoldhimthattheyweregoingwiththeothercompanybecause
theyknewtheothercompanycouldhitthegroundrunning.Hesaidthatheknewthattheonly
reasonthathewasaskedtosubmitaresponsewasbecausethepublicagencywasrequiredto
obtainresponsesfrommorethanonecompany.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatthereisaGoodOldBoyNetworkthatmakesitmoredifficultforminoritycontractorsand
othersmallbusinessestogetwork.Hesaid,[Problems]trickledownfromthetop.Cronyism.
Nepotism.Favoritism.WecallittheGoodOldBoyNetwork.Itsstrongasever.Hesaid,
Therearepeoplegettingcontractsthattheydonthavetobidon.Therearepeoplewhoget
contractsfromthefederalgovernmentthataresolesourcedtothemupto$5million.Andonce
theygetinthere,theystaythere.Cronyism.Nepotism.Favoritism.GoodOldBoyNetwork.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthattheGoodOldBoyNetworkisabarrierto
obtainingworkinthemarketplace.Hesaid,Itsjustintheculturethecomingyearandwhen
youhavelargefirmsthatwereneverhadsuchstandard,minoritybusinesses,theyneverhadto
areasontooutreachitslikeeverything,youknowthatswhattheyreaccustomedto,thats
whattheyrecomfortablewith.HesaidthathismembershaveexperiencedtheGoodOldBoy
NetworkonAirportAuthorityprojects.
OtherintervieweesreportednoknowledgeoforexperiencewiththeGoodOldBoyNetwork
orotherclosednetworksbeingabarriertopursuingbusinessopportunities.[Interviewees
#BGP:2,10,11,12,13,14,15].Interviewee#BGP10,aprincipalatanengineeringfirm,said
thatthefirmhasnotexperiencedtheGoodOldBoyNetworkbeingabarriertoobtainingwork.
Hesaidthathehasheardotherpeoplecomplainthatitisabarrier.Hesaidthatheandhis
partnerhavebeenaroundforeverandhaveestablishedrelationships,sowereprobablya
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE184

partoftheGoodOldBoyNetwork.Hesaidthatthefirmtypicallydoesnotcarewhoithires
andhashiredfromeverygroup.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,reportedthattheGoodOldBoyNetworkisnotatallabarriertoobtainingwork.
Hesaid,TheGoodOldBoytypesofthingswereineffect[in]the60sand70s,andgoing
throughthaterawedidhavethatprocessgoingon,butnotnow.Thatsituationislonggone
fromthepublicsector,butfrom[the]privatesectortoo,everybodylooksatmoneyandhow
muchmoneyisinvolvedineverything.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,stated,ThereisaGoodOldBoyNetwork,butitsnotabarrier.And
wereactuallyseeinglessandlessofitwiththisinfluxofsmallersubcontractors,soIwouldhave
tosaythatitsnotsignificant.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthattheGoodOld
BoyNetworkisnotabarriertoobtainingworkwiththeAuthority.Hesaid,There[are]no
loyaltiestherewhatsoever.Ithinkthattheyknowyouasacontractorandyourperformance,but
nottheGoodOldBoy[Network]thing,absolutelynot.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthattheGoodOldBoy
Networkisnotabarriertoobtainingworknowthattheyhave[a]prequalifiedoncalllist
wheretherearecertaingamerules.Shesaidthattheoncalllistwascreatedabout10years
ago,and[i]thasopeneditupforeveryonetoparticipateinamoreequalenvironment.Priorto
that,wehadtheexperiencewheretheyhadanonsiteprojectmanagerthatwasaprime,andthat
primewasresponsibleformanagingallofthesubs,andatthatpoint,yes,thatwastheGood
OldBoyNetwork.Isawthatreallyinplayinthosedays.Sheaddedthat,previously,theGood
OldBoyNetworkwouldusethesamesubcontractors,ortheywouldcreateLLPsorsomething
justtoeliminateastrategicpartnerdowntheroadonanotherjob.Shealsosaidthatthere
areMBE/DBE[and]WBEfirmsthatareprimetodayandneverwouldhavebeenprime
before.
Bidshopping.
Severalintervieweesreportedknowledgeoforexperiencewithbidshopping.[Interviewees
#BGP:3,8,10,12,14,TA#2].Interviewee#BGP3,thecoownerofawhitewomanowned
constructionfirm,saidthathesuspectsbidshoppingoccurs,butthatitisdifficulttoprove.
Interviewee#BGP10,aprincipalatanengineeringfirm,saidthathehasexperiencedprimes
whoengageinbidshopping,butitsprettyrare,andoncehefindsoutthataprimeisdoing
that,hewillnotworkforthatprimeanymore.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,statedthatbidshoppingdoeshappen,butitsverylowkeyanddoes
notpresentabarriertoobtainingwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE185

Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatheexperiencesbidshoppingallthetime,andasamatteroffact,theylltellyou,
Hey,wetookyourbidtosomebodyelse.They[offeredtodoit]for$1,000lessthanyou.Can
youdothat?Hesaidthatthisoccursinboththepublicandprivatesectorsbutmore
consistentlyintheprivatesector.Hesaidthatyoullseemoreofthatwithsmallerprojects.He
saidthatheisprettysurethattheAuthorityhascheckedhispriceswithotherfirms,adding,I
dontknowifitsbidshopping.Ithinkitspricecheckingmakingsuretheyregettingagood
price.Hesaidthatthishasoccurredwithinthelastthreeyears.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatbidshoppingoccursallofthetime.
Otherintervieweesreportednoknowledgeoforexperiencewithbidshopping.[Interviewees
#BGP:1,2,5,6,9,11,13,15,16].
Bidmanipulation/differentbidcriteria.
Severalintervieweesreportedhavingheardoforexperiencedbidmanipulation.[Interviewees
#BGP:3,8,14,15,16].Interviewee#BGP3,thecoownerofawhitewomanownedconstruction
firm,saidthathesuspectsbidmanipulationoccurs,butthatitisdifficulttoprove.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thathehasheardofbidmanipulations.Hesaidthatinhisindustry,companiescantbecertified
byallofthedifferentmanufacturers.Youhavetopickthefewthatyouworkwiththebestand
youliketheequipmentthebest,butsometimesthewordinginthebid[requirestheuse
of]acertainmanufacturer[forwhich]acertaindealershipintheareaisthecertifieddealer.
Hesaid,Therearetimeswhenanarchitectoradesigncompanywillpositionabidby
utilizingmanufacturersthatonlyhaveparticularcompaniesascertifieddealers.Hesaidthathe
hasnotnotifiedtheAuthorityofthisissue.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshehasheardaboutbid
manipulation,butshehasneverexperiencedit.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthathehasheardofbidmanipulation,andhevaguelyremembersmaybefive[or
eight]yearsagothattheremayhavebeenanallegationofsomecontractorsoracontractor
engaginginbidmanipulation.HeaddedthatherememberedthattheBurbankAirport
thoroughlyinvestigatedit,andtheyfightveryhardtomakesurethatdoesntoccur.Hesaidthat
theAuthorityhasdoneaverygoodjobinpolicingit[and]makingsureitdoesnthappen.
Otherintervieweesreportedhavingneverheardoforexperiencedbidmanipulation.
[Interviewees#BGP:1,2,5,6,9,11,12,13,TA#2].Interviewee#BGP11,amanagerofanAsian
maleownedDBEcertifiedcleaningservicescompany,saidthathedoesnotknowofany
specifictimeinwhichabidhasbeenmanipulated,butsaidthatifitoccurs,itlikelyoccursata
higherlevel.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE186

Experience/expertise.
Severalintervieweesreportedthatobtainingexperienceorexpertiseisabarriertopursuing
businessopportunities.[Interviewees#BGP:8,14,16,TA#1].Interviewee#BGP14,amanager
ofanMBE/WBEcertifiedequipmentsupplierandinstaller,reportedthatobtainingexperience
andexpertiseisabarrierinhisindustry.Hesaidthatthecompanymaygoto[a]manufacturers
repandsay,Wewouldliketobecomecertifiedwiththatmanufacturer.Anddependingupon
therepresentativeandthemanufacturer,theymaynotwantanotherdealerinthearea,and
sometimesthatsgood,andsometimesthatsbad.Ifyourethedealerthathasthecertification,
thatsgoodbecauseyoudontwantabunchofpeopleinyourareatodowhatyoudo.Ifyoure
somebodywhowants[aparticular]project,itsnotgood.So,thatsthelimitationsinour
industry,soitsreallybasedonrelationships.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
statedthatheisawareofobtainingexperienceandexpertisebeingabarrier.Hesaidthatthis
hasbeenabarrierforhisfirmandsaidthatwhenhetriedtogetworkwithCaltrans,they
basicallysaid,Youdonthaveenoughexperienceinthisworklocally.SoitslikeCatch22.You
cantgettheworkifyoudonthavetheexperience,andyoucantgettheexperienceifyoucant
getthework.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said,
Alotofpeoplearesaying,Are[minorityownedcontractors]reallyoutthere?Cantheyreally
dothework?Thebiggestthingis,[minorityownedcontractors]areouttherenotgettinga
chance.Wevedoneallthelegworkthatweknowtodo.Weonlyneedafairopportunity.
Otherintervieweesreportedthatobtainingexperienceorexpertiseisnotabarriertopursuing
businessopportunities.[Interviewees#BGP:9,10,11,12,13,15,TA#2].Interviewee#BGP10,
aprincipalatanengineeringfirm,saidthathehasnotexperiencedobtainingexperienceor
expertiseasabarrier.Hesaidthatthefirmisgoodatwhatitdoes,andifitdoesnothavea
particularexpertise,thefirmusuallycontactsauniversityprofessorwhofocusesonthat
particularareaofexpertise.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatobtainingnecessary
expertiseorexperienceisnotabarrierbecauseshebelongstoareallygoodnetworkof
professionalalliances.
Accesstolabor/personnel
Someintervieweesreportedthatobtainingqualifiedlabororpersonnelisabarriertopursuing
businessopportunities.[Interviewees#BGP:3,5,6,8,14].Interviewee#BGP3,thecoownerof
awhitewomanownedconstructionfirm,saidthattherearebarriersassociatedwithfinding
qualifiedpersonnelandlabor,particularlyforunionemployers.Hesaid,Itdependsonwhether
youreunionornonunion.Inmyposition[asaunionemployer],Ihavetotakewhotheysendto
me,goodorbad.Ifhesgood,hemaystayaroundforawhile.Ifhesbad,hegoesbacktothehall
rightaway,andthenyoucallformore.Ittakesawhiletoweedthroughandfindaqualified
[worker].
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE187

Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatattracting
personnelandlaborisproblematic,especiallyinourindustry.Nobodyteachespowerelectrical
engineeringanymore.Everyonesgoingtothehightechstuff,andpowerisconsideredpass.
WerenotfindingU.S.citizensthataretrainedinthisfield.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthataccesstolaborandpersonnelwasabarrierwhentheindustrywasboomingand
Ineededmorehelp.ThenImcompetingagainstthebigguys.ItsmoredifficultbecauseIdont
haveaninternalrecruitmentagency.
Interviewee#BGP8,thetechnicaldirectorofawhitewomanownednoncertifiedengineering
firm,saidthatitcanbedifficultforsmallbusinessestotrainpersonnelandgetthemuptospeed.
Hesaid,Thebarrierinourlineofworkisfindingqualifiedpeople.Beingasmallbusiness,we
cantaffordtotakepeoplewhodontunderstandourterminologyandtrainthem.Wedbe
interestedinthosethatcanhitthegroundrunning.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thataccesstolaborcanbeabarrierbecausetherearenotalotofpeopleoutthere[withthe]
abilitytodowhatwedo.Theycouldlearnit,buttherestrainingrequired,sothecompany
usuallytriestoworkwithwhatsoutthere.
Otherintervieweesreportedthatobtainingqualifiedlabororpersonnelisnotabarrierto
pursuingbusinessopportunities.[Interviewees#BGP:1,9,10,11,12,13,16,TA#2].
Interviewee#BGP1,theAfricanAmericanmaleownerofanMBE/DBEcertifiedarchitecture
firm,saidthattherearenobarriersassociatedwithfindingqualifiedpersonnelandlaborinthe
architectureindustry,butthatitisdifficulttoretainqualifiedstaffbecauseaftersixorso
months,theyoftenreceiveoffersfromotherarchitecturefirmsforanotherdollar.
Interviewee#BGP10,aprincipalatanengineeringfirm,saidthathehasnotexperiencedaccess
toqualifiedlaborandpersonnelasabarrier.Hesaidthatwhentheeconomywasgood,itwas
hardtohireengineers,butnowthattheeconomyisweaker,itismucheasiertohirepeople.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,statedthataccessto
qualifiedlaborandpersonnelhasnotbeenabarrierrecently,butwhenunemploymentislow,
experienceishardtofindbecausethegoodguysareworking.Rightnow,itsanemployers
market.Ithinkyoucanprettymuchgetyourvaluesworthrightnow.
Learningaboutworkandmarketingopportunities.
Someintervieweesreportedthatlearningaboutworkandmarketingopportunitiesisabarrier
topursuingbusinessopportunities.[Interviewees#BGP:10,12,15,TA#2].Interviewee
#BGP10,aprincipalatanengineeringfirm,saidthatlearningaboutworkandmarketing
opportunitieshasalwaysbeenastruggle.
Interviewee#BGP12,ageneralmanagerandanaccountmanagerofaWBE/DBEcertified
constructionsupplyfirm,saidthatlearningaboutworkandmarketingisnotabarriergenerally,
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE188

butlearningaboutworkopportunitiesisprobablythebiggestbarriertoworkingwiththe
Authority.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatlearningaboutworkor
marketinghasbeenabarriertoobtainingworkbecauseshehastodependontheprimetoinvite
herinontheoncallopportunityandtofindoutaboutopportunitiesthroughtheoncalllist.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatlearningaboutworkandmarketingopportunities
hasbeenabarrieronAuthorityprojects.
Otherintervieweesreportedthatlearningaboutworkandmarketingopportunitiesisnota
barriertopursuingbusinessopportunities.[Interviewees#BGP:1,2,3,5,7,8,9,11,13,16].
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatlearning
aboutworkormarketingopportunitieshasnotbeenabarriertoobtainingwork.Hesaidthat
thecompanyhasplentyofavenuesandaccesstothemarketforconstruction.Igetemails
fromtheStateofCalifornia.Igetemailsfromtwoorthreedifferentbidmarketingfirmsthat
sentstuffover.So,wealwayshaveaprettygoodideaofwhatopportunitiesareavailable.He
saidthatthenotificationprogramswerefortheprivateandpublicsector.
Interviewee#7,theownerofawhitemaleownedSBEcertifiedlandscapingbusiness,saidthat
approximately70percentofhisfirmsworkcomesfromthepublicsector.Hesaidthathisfirm
findsoutaboutbidopportunitiesforpublicagencyworkthroughthenewspaperandvarious
agencyoutreachefforts.
Unfaircontractdenial.
Someintervieweesreportedhavingexperiencedorbeingawareofanunfaircontractdenial.
[Interviewees#BGP:2,10,14,15,16,TA#2].Interviewee#BGP2,thesalesmanagerofanAsian
AmericanownedMBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatwehavehad
someweirdexperienceswithpublicbids.Theyalwaysgiveexplanationsthatseemwithintheir
rights,buttheyseemfunny.Wehadanissuewith[anotherpublicagency]sixyearsagowhere
theydidntwantasmallcompany.Wewerethelowestbidder,andthatwasthequalification
forthecontract,butitwentoutforrebid.Theysaidthatsomethinginthebidprocesswent
wrong,sowerebid,butsomeoneelseinthebidprocesswasthelowbidder.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatthefirmhasexperienced
anunfaircontractdenial.Hesaidthatlastyear,whenhisfirmsproposalwasnotselected,he
laterreadinthenewspaperthatmembersoftheselectedteamwererelatedtoacitycouncil
person.HesaidthatthiswasnotanAuthorityproject.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatthecompanyisawareofunfaircontractdenials,likewhenapublicentityreleased
acompanyfromaprojectbasedonafinancialcrisis,butitseasyforthemtosayfinancially
thecitydoesnthavemoney,sowerenotgoingtomaintainyourcontractanymore,butthen,
wefoundoutthatsometimestheylldothat,theyllswap[thework]intoanewproject,andall
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE189

ofasuddentheresanothercompanytakingcareofthatcontract.Sometimesthatsdueto
thefactthattheywanttogetabetterpriceandthiswastheonlywayforthemtorenegotiate.
Sometimestheylljustwanttobringanotherfirminbecausetheyregoingtogetbetterpricing,
anditsawayforthemtogetoutofacontract.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshehasexperiencedan
unfaircontractdenialona15yearcontract[withtheCityofLosAngeles]tothetuneof$100
million,andtherecommendationfromtheagencywhoscontractingitwenttotheprimewho
washighbidand[had]thelowestMBE/WBEparticipation.AndtheirofficesareoutofArizona.
SheaddedthatthecontractstillhastogotoCityCouncil,[which]hastodecidewhether
theyregoingtoaccepttherecommendation.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthathehasexperiencedanunfaircontractdenial.Hesaidthathethoughtthattherewasa
contractwhere[thecompanywas]mostqualified,andthefirmthatwaspicked,theprime
consultant,hadsomeoneintheirfirmthatwenttoschoolwiththeclient.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheisawareofitsmembersbeingdeniedcontract
awardsunfairly.
Otherintervieweesreportedneverhavingexperiencedanunfaircontractdenial.
[Interviewees#BGP:1,3,5,6,8,9,11,12,13].
Doublestandardsinworkperformance.
Someintervieweesreportedexperiencingorbeingawareofdoublestandardsinwork
performance.[Interviewees#BGP:9,10,11,16].Interviewee#BGP9,theownerofanon
certifiedHispanicAmericanownedsecurityservicesfirmnotedthattherearedoublestandards
inworkperformanceoccurallthetime.Hesaid,Youaregoingtorunintothatallthetime.
Theresadoublestandard,becausewhenyouwinajob,andyouretheoutsider,theywantyou
todoalittlemorethanwhenaninsiderdoesit.Interviewee#9notedthattheyhavenot
experiencedthedoublestandardissuewiththeAuthority.
Interviewee#BGP10,aprincipalatanengineeringfirm,statedthathehadnotheardofdouble
standardsforworkperformanceintheprivatesector,buthesaidthatpublicagenciesgenerally
holdconsultantstoasignificantly[higher]standardthantheyholdtheirownemploy ees.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatheissurethatdoublestandardsinworkperformanceoccur,butheisnot
awareofanyspecificexamples.Hesaidthatitdidhappenduringhisexperienceworkingat
differentairlines,butheisnotawareofitoccurringrecently.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
saidthathehasexperienceddoublestandardsofworkperformancebutnotwiththeAirport
Authority.Hesaidthatononepublicprojectwherefourconsultantswerehired,theotherthree
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consultantswerenotheldtothesamestandard.Hesaidthathethinksthatthismaybe
becauseofsomeDBEpoliticalissues.
Otherintervieweesreportedthattheyhavenotexperienceddoublestandardsinwork
performance.[Interviewees#BGP:1,2,3,5,8,12,13,14,15].Interviewee#BGP14,amanager
ofanMBE/WBEcertifiedequipmentsupplierandinstaller,statedthathehasnotexperienced
doublestandardsinworkperformance,buthehashadcleanupotherpeoplesworkbeforehis
companycanstartitsworkonaproject.
Pricediscriminationbyasupplier.
Someintervieweesreportedexperiencingpricediscriminationbyasupplier.[Interviewees
#BGP:2,13,14].Interviewee#BGP2,thesalesmanagerofanAsianAmericanowned
MBE/WBE/DBEcertifiedmaintenanceandrepairfirm,statedthathebelievesprice
discriminationbysuppliersoccurs,butitisnothingwecanprove.Hesaidthathedoesnot
believepricediscriminationisrelatedtodiscriminationbasedonrace,ethnicityorgender.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthathehas
experiencedpricediscriminationbysuppliersinthelast20years,butnotrecently.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthathehasexperiencedpricediscriminationinvolvingrelationshipsamongdealers
andmanufactures.
Otherintervieweesreportedthattheyhavenotexperiencedpricediscriminationbya
supplier.[Interviewees#BGP:1,3,5,6,8,9,11,12,16].Interviewee#BGP11,amanagerofan
AsianmaleownedDBEcertifiedcleaningservicescompany,saidthattherearedifferentprice
levelsbaseduponhowmuchyoubuyfrom[aparticularcompany],andacompanyhasthe
opportunitytosaythatitthinksthataparticularpriceistoohigh,buthedoesnotthinkthat
thereistheopportunitytoknowifsomethingisbeingpriceddifferentlyforsomeoneelse.
Allegationsoffronts.
SeveralintervieweesreportedsomeknowledgeofallegedMBE/WBE/DBEfrontsorfrauds.
[Interviewees#BGP:1,3,5,6,9,10,11,14,15,TA#1,TA#2].Interviewee#BGP1,theAfrican
AmericanmaleownerofanMBE/DBEcertifiedarchitecturefirm,said,Ihaveworkedwith
some[MBE/WBEfronts].Itwaswomenownedbusinessesthatwerefrontedbythewifeofa
husbandwhohasthelegitimatebusiness.MostofthatwentawaywhentheStatecameupwith
thenewCaltransagreement.
Interviewee#BGP5,thepresidentofan8Acertifiedengineeringfirm,saidthatthereareissues
withMBE/WBE/DBEfrontsorfrauds.Hesaid,Thereareabunchoffirmsthatarewomenand
minorityownedbynameonly,wheretheownerswifeistheprincipalowner,buttheyarereally
notparticipants.Thereareveryfewminorityorwomenownedfirmsthatweveworkedfor
thataretrulyminorityorwomenowned.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,said,Iveheardaboutsome[MBE/WBEorDBEfrontsorfrauds]intheindustry.Idsay
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE191

thatwasmoreinthe1990s;therewerealotoffrontsandfrauds,especiallyonthecontracting
end.Idhear,Illjustgetmywifetoownthecompanyallthetime,butIdontreallyhearit
anymore.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmstatedthatregardingMBE/WBE/DBEfrontsandfrauds,thathappensalot.Itssad,butits
aloopholetheyuse,butIhaventheardofthisinAirportwork.
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthathehadheardofacouple
ofMBE/WBEorDBEfrontsorfrauds.Hesaidthathehadseentheminthemarketplacelastyear,
buthedidnotcomeintocontactwiththemwhileworkingonanAuthorityproject.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatthereisnoquestionthatMBE/WBEorDBEfrontsexist,butheisnotaware
ofanyspecificexamplescurrently.HestatedthathedoesnotthinkthattheseMBEandWBE
requirementsarethatimportantanymoretoanybody.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,
reportedthatheisnotpersonallyawareofMBE/WBEorDBEfrontsorfrauds,buthehasheard
ofitandhasheardthattheywereabletogaincontractsnotbecausetheyactuallyemployed
anyminoritiesbutbecausetheywerehiringminoritysubcontractors.Hesaidthathewasnot
awareofthisoccurringonBGPAAprojects.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshehasobserved
MBE/WBEorDBEfrontsorfrauds.Shesaidthateveryfourorfiveyearswehaveanengineer
whoputshiswifeup,andsheabsolutelyhasnoknowledgeonthedaytodaybusinessdealings
oranything,andshesjusttheresotheycangetthecontracts,whichisunfortunate.Butyes,it
doeshappen.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatheisawareofMBE/WBEorDBEfrontsandfrauds.Hesaid,Thethingthatgetsmeabout
[Caucasian]womenbeinginthesamepoolas[minorityownedfirms]isthatalltheydoishave
the[Caucasian]husbandtakehisbusinessandputitinhiswifesname.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheissurethereareMBE/WBEorDBEfrontsor
fraudsbuthedoesnothavespecificexamples.
SomeintervieweesreportedthattheyarenotawareofMBE/WBEorDBEfrontsorfrauds.
[Interviewees#BGP:2,8,12,13,16].
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AllegationsoffalseDBEreporting.
MostintervieweesreportednoknowledgeoffalseMBE/WBEorDBEreporting.[Interviewees
#BGP:2,5,6,8,9,10,11,13,14,16,TA#2].Interviewee#BGP10,aprincipalatanengineering
firm,saidthatheisnotawareoffalsereportingofMBE/WBEorDBEutilization.Hestatedthat
manyteamsareformedbeforethepreproposalmeetinginwhichgoodfaitheffortsare
required,sohewondersifprospectiveproposersareengaginginanykindoffalsification.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheisnotawareoffalsereportingofMBE/WBE
outreachefforts.Hesaid,IdontknowbecauseItalkedaboutthatearlier,wedontgettosee
whattheylistandthatsonereasonthatImentionedthatbecausewedontknowifthereis
fraudgoingon.Hesaid,Ifyoulistedme,Iwanttoseewhereyoulistedmethatshouldbe
madepublic.
Failuretousegoodfaithefforts.
Someintervieweesreportedperceptionsofinstanceswhereprimecontractorsdidnotuse
genuinegoodfaitheffortstolocatequalifiedandavailableDBEsubcontractors.[Interviewees
#BGP:1,4,9,15].Interviewee#BGP1,theAfricanAmericanmaleownerofanMBE/DBE
certifiedarchitecturefirm,saidthathehashadproblemswithfalsereportingofgoodfaith
efforts.Hesaid,PeoplewouldcallandIwilltellthemthatweareDVBEandfilloutany
appropriatedocuments.Thenwewouldgetacopyoftheprimesbiddocumentsthatclaimed
thattheydidagoodfaitheffortbutcouldntfindanyone.Butthisproblemhasgoneaway,
becausetheStatehasnowsaysthattheresnosuchthingasagoodfaitheffort.
Interviewee#BGP4,aprojectmanagerofaWBEcertifiedconstructionfirm,said,Thereare
somecontractorsthatdontreallycareaboutthewaytheprogramissetup.Theylookatthe
minimumguidelinesandsay,Okay,allIhavetodoisputtogetherthisgoodfaitheffort.They
haveacookiecuttergoodfaitheffortreadytogo,andiftheAirportactuallytookthetimetolook
backatsomebidscopes,theydseethatitstheexactsamethingeverytime.Thesegoodfaith
effortsareajoke.Theyrenotreallydoingagoodreachout.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmsaid,Noonereallytries.Theyjustsignthatpaper.Interviewee#9addedthat,People
dontreallyfalsifymaliciously.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshehasheardofprime
contractorsfalsifyinggoodfaitheffortstoutilizeMBE/WBEorDBEswithinthelastfiveyears.
ShesaidthatshehashadthemostexperiencewiththeCityofLosAngeles,andLosAngeleshas
goneafterthegoodfaitheffortrequirement.ShesaidthattheCityissupposedtobevalidating
howmanycompaniesaprimeisreachingoutto,buttheCitydoesnothavethepersonnelto
fullyfulfillthatmandate.
Otherintervieweesreportedthattheyhadneverheardoforexperiencedaprimecontractor
falsifyingitsgoodfaithefforts.[Interviewees#BGP:11,12,13,16].
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SDCRAAAnecdotesRegardingPerceivedGeneralBarrierstoParticipation
inthePublicandPrivateSectors
Thefollowinganecdotesregardingperceivedgeneralbarrierstoparticipationinthepublicand
privatesectorswereobtainedfrominterviewsthatthestudyteamconductedinconnectionwith
BBCs2009SDRCAAstudy.
Administrativeexpense/bureaucracy.
ManyintervieweesreportedthatitismoreexpensivetoworkwiththeSanDiegoAirportdue
tovariousadministrativeexpenses,andseveralintervieweesspecificallycitedinsurancecosts.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,saidthatoperatingexpensestendtobeconsiderablyhigherforbusinessesinan
airportcomparedtoothervenues.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireattheSan
DiegoAirport,saidthatinsurancecostscanbetwotothreetimeshigherinanairportthanin
othervenueslikemalls.ShesaidthattheAirportalsorequiresconcessionairestocarrya
$20,000bondincasetheyhavetroublepayingtheirrent.
Interviewee#SD7,representingawhitemaleownedfirm,reportedthatbondingandinsurance
aresignificantissuesforfirmsworkingwiththeAirport.Heindicatedthatmostpublicagencies
(includingtheAirport)requirealargebondtobidprojectsandapaymentbondtohire
subcontractors.RegardinginsuranceforAirportprojects,Interviewee#SD7said,Attheairport
youneed$3to$10milliongeneralliability.Ifyouworkoutsideyouneed$10milliongeneral
liabilityand$2millionautoinsurance.Hewentontosaythatsmallfirmshavetroublequalifying
forinsurancepoliciesofthatsize.
Interviewee#SD2,representingawhitefemaleownedfirm,alsoindicatedthattheAirports
insurancerequirementsareburdensome.ShesaidthattheAirportrequiresfirmstocarry$10
millionpolicies,avaluethatfarexceedsherfinancialcapability.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidthathisfirmisrequiredtocarryagreatdealofinsurance:Ourinsuranceisvery
expensiveitcostsabout$50,000peryear.Hewentontosaythathisfirmspreexisting
relationshipwithinsurancebrokershelpsttobringtheircostsdown.
Interviewee#SD4,representingawhitemaleownedfirm,reportedthatbidsthathereceives
fromsomesubcontractors(includingminorityandfemaleownedones)includeapremiumfor
workingonAirportprojects.Thatis,thosesubcontractorsgivehigherestimatesforAirport
projectsthanforprojectsthatarenotwiththeAirport.
Interviewee#SD26,representingawhitemaleownedfirm,reportedthattheAirportrequires
firmstohold$5millionofliabilityinsurancerequirement,whichInterviewee#SD26regardsas
excessiveforhislineofwork:Howmuchdamagecanasandblasterdo?
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SomeintervieweesindicatedthatinsurancecostsarenotabarriertoworkingwiththeSan
DiegoAirport.Interviewee#SD3,representingawhitemaleownedfirm,reportedthatthe
OwnerControlledInsuranceProgram(OCIP)coversworkerscompensationandgeneralliability
forhisfirm.HeaddedthattheAirportalsoprovidesathirdpartybrokertohelpwiththe
insurancerequirementsforprimecontractorsandsubcontractors.
Interviewee#SD8,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,said:Ifyouworkforaweek,youshouldbeablemakeenoughmoneyfortheinsurance.
Healsoaddedthathedidnotneedhelpfinancinghisconcession.Interviewee#SD9,
representingaminorityfemaleownedfirmandaconcessionaireattheAirport,indicatedthat
insurancehasnotbeenaproblemforherwhileworkingthere.Shereportedthatshecarriesher
owngeneralliabilityandhealthinsurancepolicies.
AnumberofintervieweescitedtheSanDiegoAirportsbureaucracyandrestrictivepoliciesas
abarriertoworkingthere.Interviewee#SD4,representingawhitemaleownedfirm,reported
thathehadadifficulttimemeetingDBEgoalsinthepast,becauseminorityandfemaleowned
firmsconsideredtheAirporttoughtoworkfor.Interviewee#SD4citedanexampleofa
subcontractorwhohadtoredoapowdercoatbecausethecolorwasspeckledwhiteinsteadof
plainwhite.TheIntervieweeaddedthattheinspectorexaminedtheworkwithaflashlight
andmagnifyingglass.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidofthebureaucracy,Thebureaucracyisaproblem.Forthisindustryitisimportant
tohaveasystemthatissensitivetothemarketneeds.Wehavetoasktogethotnewitemson
theshelf,butthebureaucracyistooslow.HewentontoindicatethatnooneattheAirport
wantstomakeadecision,becausetheyareworriedaboutkeepingtheirjobs:Noonewantsto
beheldaccountableThisdrivesmecrazy!
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,explainedthatsome
aspectsofAirportworkaremoredifficultcomparedtootherentities,becausetheAirportis
underhighscrutinyduetothefactthattheyarespendingpublicmoney.Asaresult,theyhaveto
makesurethatcontractorsaredoinggoodwork.However,Interviewee#SD20seemed
understandingabouttheextrapaperwork,theincreasedoversight,andthestringentstandards
associatedAirportwork.
Interviewee#SD19,representingawhitemaleownedfirm,reportedthatherfirmdoesnot
usuallybidonworkwiththeAirport,becauseofthedifficultiesassociatedwithworkingwiththe
Airportthattheyhaveheardaboutfromotherfirms.SomeofthedifficultiesthatInterviewee
#SD19citedwere:additionalinsurancerequirements,extensiveamountsofpaperwork,difficult
invoicingprocedures,andafearofbeingsuedbytheAirport.
Interviewee#SD26,representingawhitemaleownedfirm,reportedthathisfirmprefersto
workasasubcontractorratherthanasaprimecontractoronAirportprojects,becauseofthe
extensivepaperworkandstressinvolvedwithworkingasthelatter.
Interviewee#SD42,representingawhitemaleownedfirm,reportedthathisfirmhada$1
millioncontractwiththeAirportaspartoftheQuieterHomeProgramthatwassuspendeddue
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toadisagreementbetweenhisfirmandtheagency:Inanutshell,wemadeaminoradjustment
tothedeliveryofaspecificdoorthatwassupposedtobeusedforourphaseoftheproject.
Interviewee#SD42explainedthathisfirmdidnotinstallthedoorsthattheyagreedtoinstallin
itscontractwiththeAirportbecauseofaclericalerroronthepartofitssupplierthatvastly
underestimatedthematerialscosts.ThatclericalerrorledInterviewee#SD42toinstalla
modifiedversionofthedoorsthatweremorecosteffective.ThesuppliercalledtheAirportand
toldtheagencyaboutthematerialschange.Interviewee#SD42saidthattheAirportwasupset
withthematerialschangeandledtotheindefinitesuspensionofhiscontract:TheAirport
claimswehadnorighttoorderthedoorswithouttheglassandputtheglassinourselves.They
statethattheyhaveverystringentwarrantyrequirementsandthematerialsthat[Interviewee
#SD42sfirm]useddidnotmeettheirrequirements.Hecontinued,Whenworkingwiththe
Airport,itisaonewaystreet.
Interviewee#SD42statedthathisexperiencewiththeAirporthasdoneagreatdealofdamage
tohisfirm.Heexplainedthatthecontractsuspensionhaseliminatedthepossibilityofhisfirm
everobtainingbondingagain:Thefailureofthiscontracthaseliminatedanyfutureopportunity
forbonding.Iamcompletelywipedoutandwillnotbeabletogetbondedprobablyeveragain.
EvenifIcreatedanewentity,thereisjustnopossibilityofgettingbondedagainyoudont
cleanupfromthis.Bondingcompaniesaremoreconservativeandmorecreditsensitivethan
evenabankbecausetheywillberesponsibleforcompletingthework.Hewentontosaythat
hiscompanymayhavetofileforbankruptcyasaresultofthecontract:Wearehangingon,
[BUT]weareveryclosetofilingforbankruptcyandprobablywillThishasbeenavery
negativeprocessthathasbroughtourcompanytoitsknees.
SDTA#1,representingalocalchamberofcommerce,explainedthatlongapprovalprocedures
anddelaysassociatedwithworkingattheAirportareasourceoffrustrationforhis
organizationsmembers.Hesaid,Itwouldreallybeapositiveifsomeofthese[publicsector]
projectswouldmovealong.
SDTA#9,representingapublicworkstradeorganization,reportedthatthespecialrequirements
associatedwithworkingattheAirportareburdensomeforsmallfirms:Thespecial
requirementsfromtheAirportposeasabarrierandareburdensometo[ourorganizations]
smallbusinessclients.Forexample,thesecurity,bonding,andextralicensingarehardtogetfor
smallbusinesses.
Airportsecurityrestrictions.
SeveralIntervieweessaidthattheSanDiegoAirportssecurityrestrictionsmakeitmore
difficultandmoreexpensivetoworkthere.Interviewee#SD21,representingawhitemale
ownedfirm,indicatedthatsecurityrequirementsareasignificantissuewhenworkingwith
publicagenciesandparticularlywhenworkingwiththeAirport.Regardingthesecuritypolicies
attheAirport,hesaid,Itscostly,itstimeconsuming,[but]itsnecessary.
Interviewee#SD13,representingawhitemaleownedfirmandmasterconcessionaireatthe
Airport,saidthatalloftheirsubtenantsandtheiremployeesmustpassrigoroussecurity
measures(e.g.,fingerprintingandbackgroundchecks)thatnotonlymakeitmoredifficultto
findemployeesbutalsodriveupoperatingcosts.
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Interviewee#SD7,representingawhitemaleownedfirm,reportedanumberofresponsibilities
associatedwiththesecurityrestrictionsattheAirport.Forexample,heexplainedthatinorder
forafirmsworkerstoreceivesecuritybadges,theyhavetoattendseveraldaysofclassesand
learnaboutthemyriadrestrictionsthatapplytothem.Hewentontoindicatethatthesecurity
processisalsoquitecostly,andafterhelearnedofthecostshesubstantiallyincreasedthe
amountofhisbidsonAirportwork.
Interviewee#SD2,representingawhitefemaleownedfirm,reportedthattheAirportssecurity
reviewoffirmsemployeesisasignificantissue.Sheexplainedthatafterafirmwinsacontract,
theyneedtospendtimeandmoneyongettingsecuritybadgesfortheiremployees.Regarding
thatprocess,Interviewee#SD2commented:Youcanthaveanemployeewithanyblemish.
Interviewee#SD23,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,explainedthatthespecializedsecurityrequirementsattheAirportdriveupthecostsof
insuranceforfirmsdoingworkthere.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatthepost9/11
securityrestrictionsattheAirportareburdensomeintermsofbothtimeandcost.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,reportedthather
firmhadanegativeexperienceworkingwiththeAirportbecauseoftheagencyspost9/11
securityrestrictions.Shesaidthatherfirmcouldnotcompletetheprojectontime,becausethe
securityrequirementsweretoostifling.Forexample,heremployeeshadtokeeptheirtools
withinaspecifieddistancefromthemselvesandtheycouldonlyaccesstheworksiteatparticular
timeduringtheday.
AnumberofIntervieweesreportedthattheSanDiegoAirportssecurityrestrictionsalsolimit
whencontractorscanworkeachday.Interviewee#SD1,representingaminorityfemaleowned
firmthatisaconcessionaireattheAirport,reportedthatwhenrepairsneedtobemadeonher
concessions,securityguidelinesdictatethatallimprovementsbemadeatnightandthatthe
contractorsmustpassallsecurityandbadgingguidelines.Interviewee#SD1indicatedthatthose
restrictionsslowdownworkandmakeitmoreexpensivetodobusinesswiththeAirport.
Interviewee#SD4,representingawhitemaleownedfirm,reportedthattheworkhoursatthe
Airportareveryrestrictive.Heexplainedthatcontractorshavetocordonoffworkareasand
completetheirworktherebeforemovingontoanotherarea,and,asaresult,theworkbecomes
moredifficult.
Interviewee#SD2,representingawhitefemaleownedfirm,indicatedthatachallenge
associatedwithworkingattheAirportistheshortamountoftimeeachdaythatherfirmis
permittedtobeworkingontherunway.Alloftheirworkhastobedoneatnightandhastobe
completedanddrybeforetherunwayopensthenextmorning.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE197

Experienceandexpertise.
SeveralintervieweesindicatedthatafirmneedstobeexperiencedwiththeSanDiego
Airportsorganizationandpoliciesinordertobesuccessfulworkingthere.Interviewee#SD21,
representingawhitemaleownedfirm,reportedthatalthoughhisfirmdoesnotfindittobe
particularlydifficulttoworkwiththeAirport,hisfirmhasalotofexperienceworkingwiththem
andthatalessexperiencedcontractormightfindtheprocesstobemuchmoredifficult.
Similarly,Interviewee#SD4,representingawhitemaleownedfirm,saidthattheAirportisa
difficultplacetoworkforcontractorswhoareunfamiliarwithworkingthere.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,statedthatbothexperienceandfirmsizearebarrierstodoingbusinesswiththeAirport.
Sheexplainedthatifafirmistoosmallordoesnothaveenoughexperience,theAirportwillnot
beinterestedinawardingthemaconcession.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,reportedthatherfirmcarefullyevaluatespotentialsubtenantsandtheirbusiness
ideastoensurethattheirconcessionwillbeviable.Interviewee#SD13explained,Wedont
wantthemtofail.Aspartofthatevaluationprocess,themasterconcessionairestrongly
considersapotentialsubtenantspreviousexperience.
Airportusesthesamelargefirms.
AfewintervieweescommentedthattheSanDiegoAirporttendstoselectthesamelargefirms
formanyoftheirprojectsattheexpenseofsmall,lessestablishedfirms.SDTA#1,
representingalocalchamberofcommerce,reportedthatacommoncriticismoftheAirportis
thattheyarebiasedtowardawardingcontractstolarge,wellestablished,outofstatefirms
ratherthantosmall,localfirms.SDTA#1indicatedthatthattrendseemstobetrueacross
differentindustriesbutseemstobeespeciallytrueforconstructionandprofessionalservices.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,saidthattheAirport
shouldfocusonawardingworktolocalfirms:IwasreallydisturbedtohearthattheAirports
workisgoingtooutoftowners.likefromNewYorkandKentuckyitstakingthemoneyout
oftownandthatsnotgood.Ithinktheyshoulddefinitelymakeaneffortto[keepthemoney]in
state.
SDTA#2,representingaHispanicAmericantradeorganization,reportedthattheorganizations
memberssaythatitisdifficulttodoworkwiththeAirport:[TheAirportis]veryprivatein
doingbusiness.Theydontdoagoodjobofoutreachingfordiversity.Theyaredoingbetter
though[ThePortAuthority]usedtobeveryinsulated.SDTA#2wentontosaythatnoneof
theorganizationscurrentmembersaredoingworkwiththeAirport,andhebelievesthatisdue
totheAirporthavinglongstandingrelationshipswithotherconstructionfirms.
AnothertradeorganizationreportedthattheSanDiegoAirporttendstoemphasizesmall
businessparticipation.SDTA#6,representinganAsianAmericantradeorganization,statedthat
theAirportwantstodobusinesswithsmallfirmsinparticular,includingminorityandfemale
ownedones.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE198

Airporthaslimitedspace.
TwoconcessionairesindicatedthatthereislimitedspacetoworkintheSanDiegoAirport.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,reportedthatthereislimitedspaceintheAirport,thuslimitingopportunitiesfor
potentialconcessionaires.Consistentwiththatstatement,Interviewee#SD1,representinga
minorityfemaleownedfirmthatisaconcessionaireattheAirport,saidthatsheneedsmore
storagespaceforherconcessionsbutthatithasnotbeengrantedtoherduetothespace
limitationsattheAirport.Shewentontosaythatconcessionaireswhoplaythegamebetter
[thanher]havereceivedadditionalspace.
Nonspecificcomments.
Someintervieweesofferednonspecificcommentsaboutbarrierstobeingsuccessfulatthe
SanDiegoAirport.Interviewee#SD11,representingawhitemaleownedfirm,indicatedthat
workingforpublicagencies(includingtheAirport)comeswithagreatdealofscrutinythatis
difficulttomanage:Governmentworkbothersme,becauseitappearsthegovernmentthinks
thatwedosomethingthatwearentsupposedtobedoing.Theyassumethatwearethebadguy
fromthebeginning,andthenwehavetocomeupwithmountainsofpaperworktoproveweare
doingtherightthing.
Interviewee#SD13,awhitemaleownedfirmthatisthemasterconcessionaireattheAirport,
indicatedthatoperatingasmallbusinessinanairportismuchmoredifficultthanrunninga
smallbusinessinothervenues(e.g.,malls,stripmalls,etc.).Shesaid,Thisisachallenging
environment.
Incontrast,Interviewee#SD1,representingaminorityfemaleownedfirmthatisa
concessionaireattheAirport,statedthatalthoughtherearenoguaranteesinbusinessandthere
arealwayschallenges,newconcessionsinairportshavea5percentfailureratemuchlower
thanthe18percentfailurerateforothernewbusinesses.
Goodoldboynetwork
Severalintervieweesreportedthatasubstantialbarriertoobtainingworkinthepublicand
privatesectorsisthepreexistingrelationshipsbetweenagenciesandparticularprime
contractorsorbetweenprimecontractorsandparticularsubcontractors.Interviewee#SD12,
representingaminoritymaleownedfirmthatisaconcessionaireattheAirport,indicatedthat
hisfirmisexcludedfromtheGoodOldBoyNetwork.AndthattheGoodOldBoyNetwork
breedsdiscrimination:Discriminationhappensinconstructionmuchmorebecauseofthe
GoodOldBoyNetwork.DiscriminatoryattitudesmanifestthemselveswhencontractorssayI
cantfindanyonetodothework.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,reportedthattheGood
OldBoyNetworkstillaffectshisbusiness,primarilyintheprivatesector:Intheprivatesector,
[issuesrelatedtoaGoodOldBoyNetworkare]stillhappening!Hewentontosaythatthose
problemsdonotexisttothesamedegreeinthepublicsectorbecausetheworkismorevaried,
whichgeneratesopportunitiesfordifferentfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE199

Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthatthe
GoodOldBoyNetworkcausesproblemsforhisfirm:TheGoodOldBoyNetworkstillexists
anditiswrong.
Interviewee#SD34,representingawhitemaleownedfirm,indicatedthatmanypotentialclients
haveexistingrelationshipswithcompetingfirmsinhisindustryandthatitisdifficultto
convincethemtomakeachange,evenwhenhisfirmcanofferbetterprices.
SDTA#1,representingalocalchamberofcommerce,indicatedthatnetworksoflarge
contractorscertainlypresentachallengetoallsmallfirmsinSanDiego,includingthosethatare
minorityandfemaleowned.
SDTA#2,representingaHispanicAmericantradeorganization,reportedthatpublicagencies
favorcertaincontractorsoverothers:[Publicagencies]havetheirfavoritesincontracting.He
wentontosaythattheGoodOldBoyNetworkinSanDiegomotivatedthefoundingofhis
organization:Ihavebeenquestionedbyothermajorityservingchambersastowhywedont
join[them].Myanswertothemissimply.Wecreatedourownbusinessnetworkbecausewe
couldntplayinyours.
SDTA#5,representingagovernmentadvisorycommissiononminorityissues,indicatedthatthe
GoodOldBoyNetworkhasbeendetrimentaltosmallfirmsinSanDiego,includingminority
andfemaleownedones:IhaveseenhowtheGoodOldBoyNetworkisanissueindoing
businessinSanDiegoandhowthecommunitycankilloffsmallbusinessesthroughvarious
means.
WhenaskedifherfirmhaseverexperiencedexclusionfromtheGoodOldBoyNetwork,
Interviewee#SD43,representingaHispanicmaleownedfirm,stated,Definitely.She
explained,Whenwesendbidswellseethesamenamescomingupoverandoveragain[as
thewinningprimeandsubcontractors].Shewentontosaythatherfirmasattemptedtoget
moresubcontractingworkbuthasnotbeensuccessfulbecauselargeprimecontractorstendto
onlyusefirmswithwhomtheyhaveworkedinthepast:Ithinkmostofthebigconstruction
companieshavetheirestablishedsubsthattheygoto.Theyusuallygowiththe
[subcontractors]theyalreadyknow.
Anumberofintervieweesreportedthatnetworkingisparticularlydifficultforsmallfirms.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthatthebiggest
problemforsmallfirmsistheirinabilitytonetworkwithlocalagenciesandprimecontractors.
Hestressedthatthemorelocalconnectionsasmallfirmhas,thebetteroffitwillbe.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,assertedthatinorder
toestablishtheirnames,lessestablishedfirmshavetoworkwithanumberoflarge,better
establishedfirms,whichcanbedifficult.Heremarked,ThatswhyIdidntchangethenameof
[my]company[afterbuyingitfromhisuncle],becauseitwasestablishedwhenItookitover.
SDTA#6,representinganAsianAmericantradeorganization,saidthatmanyofthe
organizationsmembersdonotknowhowtomarkettheirbusinesseseffectively.Shereported
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE200

thatsomeoftheorganizationsmembersquitafteroneortwomarketingevents,becausethey
donotunderstandthatthecruxofmarketingisdevelopingrelationships.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,saidthatmarketingis
particularlydifficultforsmallfirms,becausetradeassociationsthataresupposedtohelpthem
marketdonotdoagoodjobofit.Heindicatedthatthoseorganizationsdonotaddressthe
marketingneedsofsmallfirms:Theyarenotcateringtothesmallbusinessesthatneedhelp.
Interviewee#SD17,representingawhitefemaleownedfirm,indicatedthatadvertising
effectivelyisdifficultforherfirm:Knowingwhenandwheretoadvertiseisdifficult.Ithasbeen
ahitandmissexperimentforus.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,explainedthat
networkingiscrucialtobeingsuccessfulinthecontractingindustry.Hesaidthatfindingout
aboutworkisrelativelyeasy,buttheobstacleisgetting[thework],andthatiswhenhavinga
wellestablishednetworkofclientsandcontractorshelps.Regardingtheimportanceofhaving
relationshipswithothercontractors,hesaid,Alotofgeneralcontractorsgowith
[subcontractors]whotheyrefamiliarwith,whotheyknow,whotheyvedonebusinesswith
before.Theydogoodfaithefforts,buttheystillfallrightbackintolockstepandgowith
[subcontractors]theyknowInterviewee#SD30indicatedthatthereareafewprime
contractorswithwhomhehasbeenabletobuildrelationships.
Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatmarketingand
learningaboutworkcanbeexpensiveandisabarriertosuccessfornewfirms:Itsjustdifficult
gettingyournameoutthere.Itseemslikeeverytimeyouwanttoputyournameoutthere,it
costssomekindofmoneytodoit.
SomeintervieweesreportedhavingissueswiththeSanDiegochapteroftheAGC.Interviewee
#SD2,representingawhitefemaleownedfirm,reportedbeingthreatenedatatrademeeting
becauseshepreviouslycriticizedtheAGC.Shesaidthatamanwhowasalsoattendingthe
meetingtookherasideandsaid,WhatareyousayingabouttheAGC?Youbetterbecareful!
Interviewee#SD2saidthatshedidnotreporttheincident,becauseshewasafraidthatifshedid,
membersoftheAGCwouldnotdobusinesswithher.
Relatedtothosecomments,Interviewee#SD3,representingawhitemaleownedfirm,reported
thathehadpreviouslybeenamemberoftheAGC,butlefttheorganizationbecausehewas
uncomfortablewithhowitconductedbusiness.Interviewee#SD#saidthathewaslater
blackballedbytheAGC.Hesaidthatasupplierrecentlycalledhimandtoldhimthattheywould
notsellhimmaterials,andInterviewee#SD3attributedthatrefusaltohisicyrelationshipwith
theAGC.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,statedthatcolleagues
haveadvisedhertostayawayfromtheAGCtheydontmeanyouanygoodWhenyou
pursueyourinsuranceorbonding,lookattheAGCdirectoryandmakesure[theinsurance
brokerorsuretycompany]isnotaffiliated[withtheAGC].Interviewee#SD47indicatedthat
shehasfollowedthatadvicesincetheinceptionherfirm.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE201

SDTA#11,representingaveteranstradeorganization,indicatedthatanetworkoflarge
contractingcompaniesintheSanDiegoareamakesitdifficultforsmallerfirmstocompete.He
saidthattheAGCinparticularperpetuatestheproblemsofaGoodOldBoyNetwork:[The
AGC]arethebigboys,andtheydontwantanyone[else]inthedance.
AfewintervieweesreportedthatproblemswiththeGoodOldBoyNetworkhavebeen
addressed,eitherbyagenciesorbythecurrentmarket.Interviewee#SD14,representinga
HispanicAmericanmaleownedfirm,saidthereusedtobeaGoodOldBoyNetworkthatmade
itdifficultforsmallfirmsandMBE/WBEfirmstocompeteforcontracts,particularlyinthe
privatesector.However,becauseofthesloweconomy,agenciesandprimecontractorsnolonger
relyexclusivelyonthosecontractorsandinsteadtrytofindthelowestbid,someofwhich
happentocomefromminorityandfemaleownedfirms.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,reportedthatlongstandingcontractsinthepublicsectorchangehandsquiteoftendue
toconcernsabouttheGoodOldBoyNetwork,[Somemunicipalities]dontwantonecompany
tobetherefor30yearsbecausetheyregoingtoprobablycatchalotofflakforthat.
Interviewee#SD15explainedthatpublicagenciesliketheSanDiegoInternationalAirport
arerequiredtoopenacontractupforbiddingeveryfiveyears.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,stated,Theresgoing
tobeaGoodOldBoyNetworkanywhere.Heindicatedthathisfirmhasexperiencedexclusion
fromtheGoodOldBoyNetwork,butnotsomuchinmunicipalwork.Hesaidthathisfirmhas
encounteredthatexclusionprimarilyintheprivatesector.
SDTA#10,representingasuppliertradeorganization,statedthatsomeoftheorganizations
membershaveexperiencedexclusionfromtheGoodOldBoyNetwork,butthathis
organizationworkstohelpmitigateitsimpacts.
SomeMBE/WBEfirmsreportedbeingpartoftheGoodOldBoyNetwork.Interviewee
#SD28,representingawhitefemaleownedfirm,saidthattheGoodOldBoyNetworkexists,
andanumberofsmallfirmsinSanDiegoareexcludedfromit.However,shereportedthat
becauseofherexistingrelationshipsintheindustry,herfirmisincludedinthenetwork.She
added,Wevebrokenalotofbarriers,because[firmsintheGoodOldBoyNetwork]foundthat
wecoulddothework.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,statedthatnotonlyis
thereaGoodOldBoyNetworkinSanDiegobutthathisfirmispartofthenetwork:Wereone
ofthegoodoldboys.Hesaidthathisfirmispartofthenetworkbecauseithasmarketeditself
effectivelyandbuiltareputationforperformingwell.
Interviewee#SD18,representingawhitefemaleownedfirm,indicatedthattheGoodOldBoy
NetworkexistsinSanDiego,butthatherfirmiswellacceptedwithinthenetwork,becauseit
beganasawhitemaleownedbusinessandcontinuestobethoughtofassuch.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE202

AfewintervieweessaidthattheywereunawareoftheexistenceofaGoodOldBoy
Network.SDTA#7,representingaconstructiontradeorganization,indicatedthatthereisno
GoodOldBoyNetworkinSanDiego.Hesaid,Yougottoworkyourwayinthereissomeof
that.Butalotofitisdesign,bid,build.ThereisnoCasperisademocontractorandhes10
percenthigh,butwereallylikehimbecausewehadadrinkwithhimtheothernightsoIthink
welllethimdo[thework].
Similarly,Interviewee#SD22,representingawhitemaleownedfirm,indicatedthathehadno
directknowledgeoftheexistenceofaGoodOldBoyNetworkintheSanDiegoareabuthe
wonderedaloudhowacompetingfirmrecentlywonacontractwiththeAirportwithout
Interviewee#SD22sfirmevenhearingabouttheopportunity.Hesaid,Iwonderwhythe
Airportdidntaskusdirectlywevebeeninthebusinessforsomanyyears.
Interviewee#SD21,representingawhitemaleownedfirm,reportedthathehadnoknowledge
oftheexistenceofaGoodOldBoyNetworkintheSanDiegoarea.
Interviewee#SD19,representingawhitemaleownedfirm,indicatedthatthereusedtobea
GoodOldBoyNetworkinSanDiegothatmadeitdifficultforsmallfirmstocompetefor
projects,butthatthoseproblemshavedissipated:WhenIfirststartedinthisindustrythere
wasalotofGoodOldBoyNetworksgoingon,butevennowthisisstillnotawomansfirmbut
Ifeellikemostfirmshaveatleastonewomanandaregettingmoretransparent[intheir
subcontractingprocedures].
DBEprimecontractorsprefertouseDBEsubcontractors.
SeveralintervieweesexplainedthatMBE/WBEprimecontractorsaremorelikelytouseother
MBE/WBEfirmsassubcontractors.Interviewee#SD20,representinganAsianAmericanmale
ownedfirm,saidthathisfirmactivelytriestouseotherminorityandfemaleownedfirmswhen
selectingsubcontractors:WestrivetogiveopportunitiestoMBEandWBEfirms,becausewe
werelikethembefore.HemadeclearthoughthatDBEstatusisneverthesoleconsideration.
Similarly,Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaire
attheAirport,expressedherfirmsinterestinprovidingopportunitiestootherMBE/WBEfirms
sothattheycanenjoythesamebenefitsasherfirm.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,indicatedthathetends
tousethesamesubcontractorsacrossprojects:Iknowpeople.Ihavebeenintheconstruction
industrysincethe1980s.Hewentontoreportthatthemajorityofhissubcontractorsare
AfricanAmericanandHispanicAmericanownedfirms.Similarly,Interviewee#SD16,
representinganAfricanAmericanmaleownedfirm,reportedthatmostofthesubcontractors
thathisfirmusesareHispanicAmericanownedfirms.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,saidthathisfirmspreviousownerwasanAfricanAmericanmale,andhealmost
exclusivelyusedminorityorfemaleownedvendors.Interviewee#SD15said,Iknowthat[the
previousowner]soughtafterDBEcompanies[asvendors].Asaresult,thenumberof
MBE/WBEvendorswithwhichthefirmstilldealsismorethanaverage.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE203

Naturalandunavoidable.
Someintervieweesindicatedthatagenciesorprimecontractorsusingfirmswithwhomthey
havepreexistingrelationshipsisnaturalandunavoidable.SDTA#1,representingalocal
chamberofcommerce,reportedthatitisnaturalthatlocalpublicagenciesaremorecomfortable
usinglarge,wellestablishedcontractors.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,saidthataGoodOld
BoyNetworkexistsinSanDiego,butheindicatedthatitisnaturalandunderstandableandthat
itisnotexclusivetoonerace.Hesaid,Ithinkyoudoneedtobeapartofit[tobesuccessful].
Similarly,SDTA#9,representingapublicworkstradeorganization,saidthatpreexisting
relationshipsbetweenprimecontractorsandsubcontractorsisthemostimportantfactorin
subcontractorsgettingwork:Someprimesmighthavesubopportunitiesand[ourorganization]
willthenposttheopportunityorworktogettheappropriateteamtogether.Butputting
togetherateamismostlyaboutrelationshipsandtrust.Hewentontosaythatitisdifficultfor
smallfirmstodevelopthoserelationshipsbecauseoftheirsize:Smallbusinessesareata
disadvantageofdevelopingrelationshipsbecauseoftheirsize.Theydonthavethestaffto
allocateforbusinessdevelopmentandrelationshipdevelopment.
Bidshoppingandmanipulation.
Manyintervieweesreportedthatbidshoppingorbidmanipulationarebarrierstobebeing
successfulinthepublicandprivatesectors.Interviewee#SD5,representinganAfrican
Americanmaleownedfirm,saidthataproblemwiththebiddingsystemisthattherearea
numberofprimecontractorsthatdonotwantcertainsubcontractorstowincontracts.He
explainedthattheprimecontractorwilldisclosesubcontractorsbidstoothersubcontractors
thattheywanttouse.Hesaid,[Therearetimeswhen]IknowIhavealowbidandcandothe
job.Butwhatthecompaniesdoisshopthebid.
Interviewee#SD2,representingawhitefemaleownedfirm,saidthatsheisstaunchaboutgiving
herlowestbidatthetimeofbid,butprimecontractorsstilltrytoshopit.Shereportedthather
firmhaslostsomegoodjobsbecause[we]wontplaythegame.Sheindicatedthatbid
shoppingoccursmostoftenwhenlistinglawsarenotbeingenforced:Whentherearenolaws
ortheyarenotenforced,thatswhenyouhaveaproblem.Whentheprimeshaveoneortwo
daystolist,thatswhentheybidshop.
Interviewee#SD4,representingawhitemaleownedfirm,reportedthatsubcontractorssubmit
theirbidsquitelate,becausetheyareafraidthattheprimecontractorwillshoptheirbid.
Similarly,hesaidthatsupplierssubmittheirquoteslatetosubcontractors,becausetheyare
afraidthatthesubcontractorwillshoptheirquote.Interviewee#SD4notedthathisfirmnever
shopsbids,becausetheydonotwanttodevelopabadreputationamongsubcontractors.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,reportedthatbid
shoppingoccursallthetime,particularlyintheprivatesector.Hesaidthatheoftenreceives
solicitationsforbidsfromprimecontractorsthathavenointentionofusinghim.Instead,they
shophisbidarounduntiltheycanfindacontractorthattheywanttousethatwillmatchhis
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE204

price.Heexplained,Ifyoubidaprivatesectorjobtheyllcallupsomebodyelseandchopyour
[bid]up.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,reportedthatbid
shoppingoccursmostoftenintheprivatesector,becauseitismuchmorepricedriventhanthe
publicsector.Hesaidthatbecausethepublicsectorismorefocusedonthequalificationsof
contractors,bidshoppingislesscommon.Consistentwiththosecomments,Interviewee#SD6,
representingawhitemaleownedfirm,saidthatprimecontractorsarenotrequiredtolisttheir
bidsintheprivatesectorandasaresultprimecontractorsshopbidsmoreoften.
Interviewee#SD17,representingawhitefemaleownedfirm,reportedthatitisveryimportant
forafirmtooffercompetitivepricesinordertobesuccessful:Wehavebeenlockedout[ofbid
processes]becausewewerenotthelowestbid,butwewerethelowesthourlyrate.Shewent
ontosaythat,becauseofthepressureforfirmstobelowbidder,bidshoppingoccasionally
takesplace:Certaincompaniesaresneakyandtheywillcallpretendingtobeinquiringabout
pricesforajob.Thatdoesnthappenoften,butitdoeshappen.Shewenttosaythatasaresultof
bidshopping,herfirmgenerallydoesnotsharebidinformationwithotherfirms:Wekeepour
mouthclosed.Wedontsharebidinformationbecauseweknowpeoplelike[aspecificfirmin
thearea]shopbids.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatsheknowsthat
primecontractorshavefaxedherfirmsbidstootherfirms.Sheexplainedthatoneprime
contractormistakenlyfaxedoneofherfirmsbidsbacktoher,becausehethoughthewas
sendingittoanotherfirm.However,shesaidthatshedoesnotthinkthatbidshoppingoccursall
thatoften.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,indicatedthatitiswell
knownintheindustrythatbidshoppingtakesplace.Hesaidthatsubcontractorsdotheirbestto
preventprimecontractorsfromshoppingtheirbids:ThetrainingIhadisthatwhenyousubmit
yourestimateoryourproposalyouwanttosubmititshortlybeforethedeadline,evenifyou
[have]itreadyadayortwobeforethedeadline.
Interviewee#SD31,representingawhitemaleownedfirm,statedthatbidshoppingoccursno
matterwhoyouarethebigboyswilldoittoeachother!However,hewentontoexplainthe
likelihoodofbidshoppingdecreasesasafirmbecomesbiggerandbuildsitsreputation.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,reportedthathisfirm
oftenshopsbidstofindthebestdeal:Weshopeverything.Interviewee#CON32explainedthat
althoughhisfirmshopsbids,itdoesnotmanipulatethem.
Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,indicatedthatbid
shoppingoccursregularly,andthathisfirmdoesnotsubmitbidstocertainfirmsbecausethey
shopbids:[Wedo]notbidtocertaincontractorsbecausetheyuseournumbers.Somegenerals
get[our]numbersandshoparoundorusethenumbersthemselves.
Interviewee#SD44,representingaHispanicmaleownedfirm,indicatedthatheisawareofbid
manipulationtakingplacetosomedegree.Heprovidedanexampleofcertainpublicsector
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE205

contractsrequiringsuppliesmadefromparticular,largemanufacturers(e.g.,IngersollRand),
forcingprimecontractorstobuyproductsfromthosefirms.Interviewee#SD44saidthathedid
notknowwhycertaincontractsarespecifiedinthatway.
Interviewee#SD45,representingawhitemaleownedfirm,saidhisfirmhasfrequentlybeen
victimtobidshopping:Manytimestheyhavesolicitedourbidonlytogoshoppingwithit.He
wentontosaythatbidshoppingislesscommononfederallyfundedprojects.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,indicatedthatbid
shoppingoccurssofrequentlyintheconstructionindustrythatitisalmostanaccepted
practiced:OurpricesusedtogetshoppedIveheardthatsjustthewaytheindustryworks.
Constructionisashrewd,cutthroat,hardknocktypeofindustry,andthatthatstheway
businessisdone.[Primecontractors]getyourprices,theyshoparoundandplayaroundwith
them
SDTA#9,representingapublicworkstradeorganization,saidthathisorganizationsclients
oftencomplainaboutbidshopping,butthathisorganizationisunabletoverifyitsoccurrence:
Wehearabout[bidshopping]allthetimebutareunsureifthisisactuallytakingplace.
Afewintervieweesreportedthatbidshoppingorbidmanipulationisnotasignificantissuein
theconstructionindustry.SDTA#7,representingaconstructiontradeorganization,indicated
thatbidshoppingisnotanissueintheconstructionindustry.Heexplained,[Primecontractors]
dontdothiscallingbackandforthtoomuchsayingHey,ifyouloweryourbid[by]10percent
wellgive[thecontract]toyou.[Bidshopping]usedtobeabigdeal,butnowthelistinglawtook
careofthattoacertainextent.Imsure[bidshopping]happensstill,butnotasmuchitjust
seemsliketherehasbeenaculturalchange.
Interviewee#SD21,representingawhitemaleownedfirm,reportedhavingnoknowledgeof
bidshoppingtakingplaceintheconstructionindustry.
Experienceandexpertise.
Themajorityofintervieweescitedafirmsexperienceandexpertiseasabarriertobeing
successfulinthepublicandprivatesectors.SDTA#7,representingaconstructiontrade
organization,reportedthatexperienceandexpertisearesubstantialbarrierstobeingsuccessful.
Heexplained,Youactuallyhavetolearntobuildsomethingtobeacontractor.Politicians
dontbelievethattheyjustbelieveyoucanjusttakesomeone,andtheycansomehow
magicallygetbondingandallthatstuff.Hecontinued,Theresaperceptionamongour
politicalleadersthatyoucantakepeopleoutofthegeneralpopulation,putthemthroughsome
technicalassistance,andtheycanbecontractors.Ifyouretakingsomeoneoutofthegeneral
populationandtryingtogetthemtobuildasidewalkaroundtheAirport,itsnotlikesellinghot
dogsitsmuchmorecomplicated.SDTA#7addedthatitisbecomingincreasinglycommon
forcontractorstoearncollegedegrees.Hesaid,Youcantrunthesebusinessesforthemostpart
withoutsomeacademicbackground.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,explainedthatafirms
experienceiscrucialtoitssuccess.Hesaidthatfirmshavetoknowwhattheyaredoingwhen
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE206

theytakeonacontract,andtheyalsohavetoestablishtheirbrand,becauseaccordingto
Interviewee#SD14,Constructionisabouttrust.
Interviewee#SD21,representingawhitemaleownedfirm,alsoindicatedthatexperienceand
expertisearecrucialtobeingasuccessfulfirm.Hearguedthatfirmshavetobequalifiedto
remaincompetitive.Otherwise,theyputthemselvesinthepositionofhavingtodealwith
uncontrollablerisk.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,indicatedthatitismore
difficultforlessestablished,smallfirmstocompeteforandwinfederallyfundedprojectsinthe
engineeringindustry,becausethosecontractstendtobeawardedonaqualificationbased
selectionprocess.Inotherwords,firmshavetobedeemedqualifiedinordertowincontracts
ratherthansimplysubmittingthelowestbid.
Interviewee#SD22,representingawhitemaleownedfirm,reportedthatexperienceis
definitelyabarriertostayingcompetitiveinhisfirmsindustry.Heindicatedthatpeoplehaveto
knowwhattheyaredoingtobesuccessful:[successtakes]alittlebitofsmarts[and]lotsof
perseverance.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthatpeopleneedtotake
classestolearnhowtoworkinherfirmsindustry,soexpertisecanbeabarriertosuccess.
Interviewee#SD24,representingawhitemaleownedfirmsaidthatinordertoremain
competitive,firmshavetobeexperiencedwithgoodreputations,haveahistoryofqualitywork,
andhireexcellent,experiencedpersonnel.
Interviewee#SD26,representingawhitemaleownedfirm,statedthatmanycontractorsgoout
ofbusiness,becausetheydonotknowanythingaboutrunningabusiness.Theyassumethat
contractorsmakeagreatdealofmoneywithoutconsideringoverheadcosts.Whenaskedhow
onelearnstorunabusinesssuccessfully,Interviewee#SD26replied,Surroundyourselfwith
smartpeople.
Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatmanypublic
agenciesrequirefirmstohaveexperienceworkingfortheiragenciesbeforeawardingcontracts,
whichisadifficultrequirementfornewfirmstomeet:Theyrequirethecompanytohavethe
experience[thatis]tosay[they]haveworkedinthepastinpublicworks.[But[itsvery
hardtoevengetthefirstjobandgetyourfootinthedoor.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthatalthough
manyMBE/WBEfirmsarequalifiedtoworkoncontracts,theyareoftenoverlookedbecause
theyarenotwellknown:Ifeel80percentoftheguysorcompaniesthatgoinbusinesshavethe
basicabilitytoperformthework.Theproblemisthatnotbeingknownorrecognized,youre
overlookedonseveralproject,and[primecontractors]dontwanttotakethechance.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE207

Personnel.
Someintervieweesindicatedthatfindinggoodpersonnelisabarriertobeingsuccessfulinthe
publicandprivatesectors.Interviewee#SD20,representinganAsianAmericanmaleowned
firm,explainedthatfindinggoodemployeesisdifficultintheengineeringindustry,particularly
foralessestablishedfirm.Hesaid,Whywouldagoodengineercomeworkforyouifyoujust
startedacompany?Whywouldnttheyworkforafirmthatsbeenaroundforthirtyyears?[Less
establishedfirms]aredefinitelyatadisadvantage.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,reportedthatthemostchallengingaspectofworkingwiththeAirportisfindinggood
personnel:Itisdifficulttofindstaffingandtofindpeoplewiththesamevaluesasyoubecause
theturnoverintheindustryissohighInordertoretainstaffyoumustcreateafostering
environmentandhelptodeveloptheirtransferableskillstomakethembetter.
Interviewee#SD24,representingawhitemaleownedfirm,reportedthattherecessioninthe
1990sandapostbabyboomerdipunderminedthedevelopmentofapoolofexperienced
personnelintheenvironmentalservicesindustry.Hewentontosaythattoremaincompetitive,
firmsneedgoodpersonnelwhohave10yearsormoreofexperience.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatpersonnelissuesarealsoachallengeintheparkingservicesindustry,
becausemostofthestaffearnstheminimumwageandthereisarevolvingdoortosome
degree.Asaresult,firmshavetobecreativeintheirrecruitingproceduresbecausetheyare
competingwithotherminimumwageemployers.
Interviewee#SD19,representingawhitemaleownedfirm,reportedthatherfirmsmost
substantialbarrierisrelatedtomanagementofthefirmkeepingemployeeshappywith
benefitsandpay.
Interviewee#SD29,representinganAfricanAmericanmaleownedfirm,indicatedthatitis
difficulttofindgoodemployeeswhoarewillingtoworkforhisfirm,eveninthecurrent
economy:Itshardtogetgoodpeople.Hesaidthatitisparticularlydifficulttofindpeoplewho
haveexperienceinhisfirmsindustry.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,indicatedthatalthough
hisfirmhasnotroublefindingexperiencedpersonnelinthecurrentmarket,instronger
economictimesitisdifficulttofindpersonnelwiththenecessaryexperienceworkingon
governmentprojects.Hesaidthatitiscrucialforafirmsemployeestohaveexperiencedealing
withthepaperworkandbureaucracyassociatedwithgovernmentwork.
Interviewee#SD37,representingawhitemaleownedfirm,saidthattoremaincompetitivein
themarketplace,firmshavetoestablishanexceptionalstaff:Itsapeoplebusiness.Youhaveto
havetheproperpeopleinplace.Estimatorsneedtoknowhowtoestimate,projectmanagers
needtoknowhowtomanage,foremanneedtohaveasenseofhowtocontroltheirmenwithout
beingoverbearingandgetthemostoutofthem.
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Interviewee#SD41,representingawhitemaleownedfirm,saidthatitisdifficulttofindgood
personnelinconstruction:Findingpersonnelisthebiggesthurdlethesedays.Inconstruction,
thereisnotanabundanceofkidswhowanttogetintotheindustryandgetdirty.Theyarenow
playingoncomputers.Theywanttoshowupwithalaptop,notashovel.Itishardtofindgood,
youngpeopletostartatthebottomandworktheirwayupbothinthefieldandintheoffice.
Interviewee#SD44,representingaHispanicmaleownedfirm,indicatedthatgoodpersonnel
canbedifficulttofind:Togetacompetentemployeethatistrustworthyyouprobablyhaveto
gothroughsomepeople.
Interviewee#SD45,representingawhitemaleownedfirmsaidthatfindinggoodpersonalis
thetoughestpart[ofafirmbeingsuccessful].Heexplainedthatthecurrentstateofthe
economyandthelackofworkinSanDiegohaveforcedskilledworkerstoleavethearea.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthatitis
difficultforsmallfirmstoattractgoodpersonnel:Mostsmallercompaniesdonothavethekind
ofrevenuetokeep[skilledpersonnel]onboardoreventohirethem.Hewentontosaythat
goodpersonneliscrucialtoafirmssuccess:Personnelisoneofthekeystobeingcompetitive
andalsoadvancing.
Otherintervieweesindicatedthatpersonnelissuesarenotabarriertobeingasuccessfulfirm.
Interviewee#SD21,representingawhitemaleownedfirm,saidthathewasnotawareofany
barriersrelatedtopersonnelandlaborintheconstructionindustry.Hesaidthatprevailing
wagelawsinCaliforniamakeitrelativelyeasyforconstructionfirmstoattractgoodemployees
withoutthosewagesbeingunreasonablyhigh.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthatfinding
qualifiedpersonnelisnotanissueforhisfirmamuchlargerissueforhisfirmisfinding
capitaltopaythoseemployees:IfIhadthecashflowIcoulddoverywell.
Interviewee#SD28,representingawhitefemaleownedfirm,saidthatinthecurrentmarket,it
isrelativelyeasytofindgoodlabor.Heexplainedthatinthepast,otherfirmswouldactivelytry
tostealtheiremployeesbutwiththeslowdownintheeconomy,thereareplentyofpeople
availableforwork.
Interviewee#SD43,representingaHispanicmaleownedfirm,saidthatfindingpersonnelisnot
difficultforherfirm,becauseofherfirmscontactsandbecausetherearealotofpeople
withoutworkinthecurrenteconomy.
Learningaboutwork.
Severalintervieweesindicatedthatitisdifficulttolearnaboutavailableprojects.Interviewee
#SD2,representingawhitefemaleownedfirm,reportedthatitishardtofindoutabout
availableprojectsfrommostpublicagencies.Shesaidthatshehastriedtogetherfirmon
agencylists,butthattheprocessistootimeconsuming.However,sheacknowledgedthat
agenciestrytoletcontractorsknowaboutavailableprojects.
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Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,saidthatfirmshavetodo[their]homeworkinordertolearnaboutavailableprojects.
Hewentontosaythatfirmscanlearnaboutworkopportunitiesatpublicagenciesnetworking
events,intrademagazines,andbyhavingthemselvesplacedonagencylists.
SDTA#6,representinganAsianAmericantradeassociation,reportedthatherorganization
struggleswithdisseminatinginformationaboutavailableprojectstotheirmembership.Itisher
feelingthatpublicagenciesarenotincloseenoughcontactwithherorganizationanddonot
reachouttothemwithinformationaboutworkopportunities.
SDTA#11,representingaveteranstradeorganization,saidthatdisadvantagedbusinessesdo
notlearnaboutavailablecontractssoonenough.Hesaid,Idontthink[agenciesare]getting
RFIs(RequestsforInterest)outfastenough.HesaidthatdisseminatingRFIsearlierwouldhelp
disadvantagedbusinessescompetemoreeffectivelyforcontractawards.
SDTA#2,representingaHispanicAmericantradeorganization,indicatedthathismembership
learnsaboutavailableprojectsthroughonlinelistingsandbywordofmouth.However,he
wentontosaythatsmallbusinessesneedtobeeducatedonhowtofindoutaboutavailable
projectsandonhowtobecompetitive.
SDTA#1,representingalocalchamberofcommerce,indicatedthatlearningaboutworkis
particularlydifficultforsmallfirms:Formanyofthesmallerfirms,itsachallengetobefully
awareoftheopportunitiesthatareoutthere.Hewentontosaythatthosefirmsalsoneed
assistanceintryingtomaneuveraroundtheopportunitiesandrequirementsforpublic
work.
DBEfronts.
AnumberofintervieweesreportedhavingdirectknowledgeofMBE/WBEfraudsorfronts,
includingsupplybrokers.Interviewee#SD4,representingawhitemaleownedfirm,reported
havingknowledgeofafemaleownedfirmthatservesonlyasasupplybroker.Thatis,according
toInterviewee#SD4,ifaprimecontractorhastroublemeetingDBEgoals,theyfulfillthemlast
minutebyusingasupplybroker,becauseprimecontractorsarenotrequiredtolistsupplier
informationduringthebiddingprocess.Thesupplybrokermarksupthecostsofgoodsforthe
project,allowingtheprimecontractortomeetDBEgoals.
Similarly,Interviewee#SD6,representingawhitemaleownedfirm,indicatedthatthereare
quiteafewfirmslistedasminorityorfemaleownedthatareactuallysupplybrokerstheydo
notactuallydoanywork,butratherprovidegoodsatmarkeduppricessothatprime
contractorscanmeetDBEgoals.
Interviewee#SD11,representingawhitemaleownedfirm,spokeofaminorityownedfirmthat
winscontractsbutdoesnotactuallydoanyworkorprovideanygoodsitisonlyincludedon
contractswhentheprimecontractorneedstomeetDBEgoals.Hesaid,Alotofmaterialbrokers
sprungupwiththeDBEprogram.Itishardtofigureoutwhoisadeskandwhoisarealbusiness
.Thereareillegitimatebusinessesmakingmoneyoffof[DBEgoals]Therearealotoffronts
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goingon.Hewentontoremarkthat,Using[supplybrokers]makeyoulookbetteronthe
contractbutalltheyaredoingismarkingupthecontract.
Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,reportedthathisfirmpreviouslyusedavendorthatwascertifiedasaWBEfirm,but
thatwasactuallyrunbythefemaleownershusband.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatoneofherfirms
largestcompetitorslistsitselfasaDBEfirm,butitisneitherminorityorwomanowned.She
indicatedthatitisamysterytoherhowthefirmisDBEcertified.
Interviewee#SD35,representinganAsianAmericanmaleownedfirm,indicatedhavingdirect
knowledgeofDBEfrontsandfrauds:Usually,[a]firmwouldsaytheywerewomanownedor
minority[owned],butreally,theirwifewasfrontingortheywouldsaytheirgreatgrandmawas
fromMexico.
Interviewee#SD41,representingawhitemaleownedfirm,reportedthathisfirmuses
MBE/WBEfrontsquitefrequentlytofulfillparticipationgoals,becausetherearenotenough
MBE/WBEfirmsinSanDiegotofulfillthemlegitimately:Therearealotof[frontsandfrauds]
outthereItisanicheforthemtofill,andagreatopportunity.Hewenttosay,Ioftenthought
aboutputtingmywifeontheheadtitleholderofthiscompany.Wecouldallputofourwiveson
itbecause,especiallyinthegovernmentcontracting,therearealltypesofsetasides.
SDTA#10,asuppliertradeorganization,notedthathehasencounteredseveralMBE/WBE
frontsinthepastdecade.Hestatedthatselfcertificationisdangerousandthatpeoplewilltryto
takeadvantageofthesystemintheabsenceofathoroughreviewandagencyscrutiny.
SDTA#7,representingaconstructiontradeorganization,indicatedthattheBlackContractors
AssociationperpetuatesDBEfrauds:TheBlackContractorsAssociationwillnevergiveusalist
ofblackcontractors,butmyguessistheresthreeorfour,maybefive,thatarereal.Theresa
wholebunchofmembers,buttheyareallwhitecontractors.SDTA#7alsosaidthatwhen
MBE/WBEcontractgoalshavebeeninplaceinotherpartsofthecountry,primecontractors
oftenpaidMBE/WBEsubcontractorseventhoughthosesubcontractorsdidnotdoanywork,
justsotheprimecontractorscouldmeetagencygoals:whenwehadquotaswewouldjust
findaminority.Typicallythough,[theminoritycontractor]wasntactuallydoinganything.We
wouldjustdotheworkandgivethatpersonapercentageofit.
Similarly,SDTA#5,representingagovernmentadvisorycommissiononminorityissues,said
thattheBlackContractorsAssociationinSanDiegoisafront:TheBlackContractorsAssociation
isafront.[Theyare]pimpingthesystem.Shewentontosaythatparticularcontractorshave
haditoutagainsttheBlackContractorsAssociationfortheirfraudulentbehavior.
AfewintervieweesreportedhavingnodirectknowledgeofMBE/WBEfraudsorfrontsbut
nonethelesssuspectthattheyexist.Interviewee#SD13,representingawhitemaleownedfirm
thatisalsothemasterconcessionaireattheAirport,saidthatsheisunawareofACDBEfrauds
workingwiththeAirportbutsaidthatsuchfraudsexist.Shewentontosaythatherfirmhas
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becomeincreasinglycarefulinthepastfiveyearstoensurethatMBE/WBEparticipationis
legitimateinallofthecontractswithwhichherfirmisinvolved.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatshehasnodirectknowledgeofMBE/WBEfrontsbutwondershowsome
firmswithwhichshedealsaredisadvantaged.Shestatedthatsomefirmownersappeartobe
quitewealthy.
Interviewee#SD6,representingawhitemaleownedfirm,wondered,Whatpercentageof
[SBEs]arenothingmorethanafrontforlargercompaniesthatarenot[SBEs]?Hesaidthathe
suspectsthat85percentofSBEsarejustafrontforlargercompanies.
Interviewee#SD40,representingawhitemaleownedfirm,indicatedthathehasnodirect
knowledgeofMBE/WBEfrontsbutisconfidentthattheyexist:Iamsure[MBE/WBEfronts]are
outthere.Youwouldntbeaskingiftheperceptionwasntoutthere[thattheyexist].However
wehaventeverdealtwiththis.Hecontinued,Unfortunatelytheperceptionoffrontsand
fraudsplacesanegativestigmaontheDBEprogram.
SDTA#1,representingalocalchamberofcommerce,saidthatheisawareofMBE/WBEfrauds
andfronts,butthatheisnotawareofanythatdobusinessinSanDiego.
SeveralintervieweesreportedhavingnoknowledgeofMBE/WBEfraudsorfronts[e.g.,
Interviewee#SD20,Interviewee#SD21,andSDTA#2].
FalseDBEreporting.
SomeintervieweesreportedknowledgeoffalsereportingasitrelatestoMBE/WBE
participationorgoodfaithefforts.Interviewee#SD14,representingaHispanicAmericanmale
ownedfirm,indicatedthat,inthepast,agenciesorprimecontractorswouldcallMBE/WBEfirms
forbidsandlistthemassubcontractorseveniftheydidnotultimatelyusethem.However,
Interviewee#SD14madeclearthatfalsereportingdoesnotoccuranymore,becauseDBEgoals
arenolongermandatorydeemingthepracticeunnecessary.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,describedasituationin
whichaprimecontractorusedhisfirmsresumeaspartoftheirproposalforalargepublic
projectandgotshortlisted.Afewweekslater,Interviewee#SD20heardthattheprime
contractorwonthecontract,butwhenhecontactedtheprimecontractortodiscusshisfirms
roleinthework,theprimecontractortoldhimthatitdecidednottousehisfirmafterall.Of
similarsituationsInterviewee#SD20said,Ithappens,itstillhappens.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthathe
receivedanofferfromaNorthCarolinabasedprimecontractorthatwouldpayhisfirm3
percentofthecontractwithouthavingtodoanyworktheprimecontractorwasonly
interestedinhisMBEstatus.Interviewee#SD16turneddowntheoffer.
Interviewee#SD45,representingawhitemaleownedfirmthatisDVBEcertified,describedan
experienceinwhichaprimecontractorsolicitedabidfromhisfirmtowhichhisfirmresponded.
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Interviewee#SD45laterlearnedthattheprimecontractorerasedinformationfromthebidand
reuseditonotherprojectswithoutInterviewee#SD45sknowledgeorpermission.Interviewee
#SD45alsobecameawarethattheprimecontractormadefraudulentpaymentstohisfirmto
makeitappearasifhisfirmwasinvolvedontheotherprojects.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthathisfirm
oftenreceivesbidsolicitationsaspartofgoodfaitheffortsonthedaythebidisdue,apractice
thatviolatesUSDOTcode:[Sendingsolicitationsthedaythatabidisdue]isactuallynot
legitimate.[Primecontractors]aremanipulatingthedatesontheirpaperworkbecause
[solicitationstoMBE/WBEfirmsare]supposedtobe[sent]twoweeksprior[tothebiddue
date].
SDTA#2,representingaHispanicAmericantradeorganizationsaidthatfalsereportingoccurs
oftenwithgoodfaithefforts.
Pricediscriminationbysuppliers.
Someintervieweesreportedawarenessofpricediscriminationbysuppliers.Interviewee#SD2,
representingawhitefemaleownedfirm,saidthatherfirmwasdiscriminatedagainstafew
yearsagobyasupplier.Shesaidthatthesupplierwouldnotdobusinesswithherfirmbecauseit
waswomanowned.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,saidthatitisdifficultto
disentanglepricediscriminationbasedonraceandgenderfromreceivingworsepricesasa
resultofbeingasmallerfirm:Thecostofpaintismeasuredbyvolumeofpurchase.Therefore,
smallerbusinessesfeeltheimpact.Institutionallythesmallerbusinessistheminorityowned
business.Thistypeofdiscriminationishardtoprove.
Interviewee#SD28,representingawhitefemaleownedfirm,describedasituationinwhicha
supplierrefusedtocontinuetosupplymaterialstoher,becauseoneofitslargercompetitors
threatenedtostopusingthesupplierifitcontinuedtoworkwithherfirm.
Interviewee#SD45,representingawhitemaleownedfirm,indicatedthathehasexperienced
pricediscriminationbysuppliersduetothesmallsizeofhisfirm:Ifyourenotalargeuser,
theyllsometimesjackupthepriceorwontprovideabidatall.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,reportedthather
firmcannotestablishaccountswithsuppliersduetoherethnicityandstereotypicalattitudes:
Westillcantgetaccountlikeeverybodyelse.Shewentontosaythatthesituationismade
evenmoredifficult,becausesomelargeprojectsrequireherfirmtousecertainsuppliersthatdo
nottreatherfirmwell:[Oncertainprojects],thevendorisbuiltintheyknowwehavetouse
them.
Afewintervieweesreportedthatsuppliersquotedifferentpricestodifferentfirms,butthat
thepracticehasnothingtodowithraceorgender.Interviewee#SD30,representinganAfrican
Americanmaleownedfirm,indicatedthatbiggerfirmsgetabiggerdiscountbecauseofthe
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE213

quantitythatthosefirmsbuy.Interviewee#SD30saidthatpricedifferencesbetweenfirmshave
nothingtodowithraceorgender.
Interviewee#SD31,representingawhitemaleownedfirm,indicatedthatseveralfactors
determinesupplierprices.First,firmswithareputationofdoingqualityworkgetbetterprices
fromsuppliersthanfirmswithbadornoreputation.Second,largefirmsgetbetterpricesthan
smallfirms,becausetheytendtobuyinlargerquantities.
Goodfaithefforts.
Manyintervieweesreportedthatsomeprimecontractorsdonotusegenuinegoodfaith
effortstolocatequalifiedandavailableDBEsubcontractors.Interviewee#SD16,representing
anAfricanAmericanmaleownedfirm,characterizedgoodfaitheffortsasanumbersgamefor
theprimecontractors.Hesaidthatprimecontractorsoftensolicithisfirmforbidswithno
intentofusingitinordertofulfillgoodfaithefforts.Hisfirmhasreceivedsolicitationsfor
industriesinwhichtheyhaveneverdoneworkandforprojectsthatarenotevenremotelynear
itsgeographiclocation.Interviewee#SD16saidthatheisabletorecognizewhenhisfirm
receivesabidsolicitationonlybecausetheprimecontractoristryingtofulfillgoodfaithefforts:
IknowthatifIamrequestedtobidonaprojectatthetwelfthhourwithnoaccesstoplans
thisisastrongindicatorthatsomethingisnotright.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,saidthatheisawareof
primecontractorsabusingthegoodfaitheffortsprocess.Hesaidthatsomeprimecontractors
solicitdisadvantagedfirmsforbidswithnointentionofactuallyusingthem,onlytofulfillgood
faithefforts.Hestatedthatgoodfaitheffortscannotbeeffectiveif[primecontractors]arenot
sincereaboutthem.Hewentontosaythathedoesnotsupporttheideaofsubcontractorgoals:
Imnotforquotasormandatory[requirements]IthinkthatsabadthingIwouldliketo
thinkthatthatwouldntbenecessary.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatgoodfaitheffortsdonotworkbecauseprimecontractorsdonottake
themseriously:IseethegoodfaitheffortsinSanDiego,butitdoesntworkbecausetheanswer
isalwayswecouldntfindanyone.
Interviewee#SD31,representingawhitemaleownedfirmthatisDVBEcertified,statedthathis
firmreceivesbidsolicitationsonadailybasisfromlargefirmsthatleavehimwithridiculously
shortamountsoftimetorespond.Heindicatedthatfirmssendthosesolicitationswithno
intentionofconsideringhisfirmforworkinstead,theyareonlyinterestedinfulfillinggood
faithefforts:Itsobvioustomethattheyrejustgoingthroughthemotions.
SDTA#6,representinganAsianAmericantradeorganization,saidthatshedoesnotbelievethat
DBEgoalsandgoodfaitheffortsareeffectiveandthatprimecontractorsabusetheprogram.As
anexample,shesaidthatseverallargecompanieshavefaxedherinformationaboutprojectsto
distributetohermembership,andthenconsideredthatinformationtofulfilltheirgoodfaith
efforts.
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SDTA#2,representingaHispanicAmericantradeorganizationstated,Goodfaitheffortsarea
joke.
Similarly,SDTA#9,representingapublicworkstradeorganization,saidthatthereare
circumstancesinwhichprimecontractorswillcontacthisorganizationwhentheyarelooking
forSBEorDBEcertifiedsubcontractors,andthatthepracticecansometimesbeproblematicas
itrelatestogoodfaithefforts:Theproblemwiththisisthatthoseprimecontractorsthenuse
theirphonecallasgoodfaitheffortsthataresubmittedonpubliccontracts,andtheyreally
haventtried[tofindSBEorDBEfirms].SDTA#9indicatedthatthereneedstobemore
oversightforMBE/WBEprogramsandgoodfaitheffortstobeeffective:[Ourorganization]has
beengettingnoticesonworkthatisnotdonebysubs,sotheyarebeingusedtogetthecontract
butarenotgettingthedollarsortheworkcommittedtothem.Thereneedstobeoversight.
However,SDTA#9wentontosaythatthoseagenciesthatdonothaveMBE/WBEprograms
havepoorparticipationamongminorityandfemaleownedfirms:Overall,thoseagenciesthat
donthavegoalsorprogramsarestrugglingintheirdiversitynumbers.Ifthegoalisnt
supportedbyapublicagency,theirnumbersaregoingtoreflectthatcommitmentandtheywill
notbeimpressive.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,statedthatnoremedies
wouldbeeffectiveforincreasingMBE/WBEparticipationuntilmandatorygoalsarereinstated.
Regardinggoodfaitheffortsinparticular,hesaid,You[haveto]doawaywiththegoodfaith
efforts.Hebelievesthatgoodfaitheffortsshouldonlyplayaroleonsmallercontracts(i.e.,
contractswithonlyafewpieces),becauseforthosecontractsprimecontractorsmighthavea
difficulttimefindingMBE/WBEfirmsthatareavailableforthetypeofworkthattheyrequire.
Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatinherexperience
manyprimecontractorsarenotgenuineaboutfulfillinggoodfaithefforts.Instead,shethinks
thatthosefirmsjustmakesurethattheycontactenoughMBE/WBEfirmstofulfillgoodfaith
effortsbuthavenointentionofactuallyusingthem.Shesaid,Ithinktheyrejusttryingtomeet
therequirementsmostofthetime.
Interviewee#SD45,representingawhitemaleownedfirmthatisDVBEcertified,statedhe
frequentlyreceivesbidsolicitationsoneortwodaysbeforebidsaredueorforworkthatis
outsideareasonablegeographicarea.Regardingsuchpractices,Interviewee#SD45said,Thats
thegame[someprimecontractors]playtomeettherequirements.TheysayWesolicitedthem,I
informedthem.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthatsome
primecontractorswillmisleadMBE/WBEfirmsintothinkingthattheywillbeincludedaspart
ofabidwheninfactthoseprimecontractorsareonlyinterestedinfulfillinggoodfaithefforts
andhavenointentionofincludingtheMBE/WBEfirms.Interviewee#SD46said,largefirms,
especiallyforgovernmentprojects,theysolicit[minorityownedfirms]toputapackage
together,andtheyleadyouonsayingyoureapartofthebidpackage,andoncethejobis
awardedyoufindoutyourenotapartof[thebidpackage].
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,commentedthata
numberofMBE/WBEfirms,particularlynewones,havethemisconceptionthatprime
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE215

contractorscontactthembecausetheyareinterestedinworkingwiththem.Sheindicatedthat
oftentheyareonlyinterestedinfulfillinggoodfaithefforts:Whenyoureasubcontractorand
yourenewtothegame,yourenave.Yougetallthesefaxesfromallthesecompaniesthatwant
youtobid.Yougetsillyandthink,Lookatallthesepeoplethatwanttoworkwithus.No,they
dontwanttoworkwithyou.YoureonalistTheygointothesedatabases,theydontknow
whoyouareanddontcare.Theywanttodocumentthattheyfaxedyouabidinvitationsothey
canshowtheyoutreachedtoaminorityorwomanownedfirm.
AnumberofmajorityownedfirmsindicatedthattheydonotsupportDBEgoalsorgoodfaith
efforts,becauseitistoodifficulttofindminority orfemaleownedfirmswhoareavailablefor
orinterestedinthework.SDTA#7,representingaconstructiontradeorganization,statedthat
DBEgoalsandgoodfaitheffortsdonotgenerallywork,becauseagenciesdonotspendenough
timecarefullyconsideringtheavailabilityofminorityandfemalecontractors.Withregardto
AfricanAmericancontractorsspecifically,SDTA#7indicatedthatthesmallAfricanAmerican
populationinSanDiegodoesnotjustifyraceconsciousgoalsforthatgroup.Hesaid,thereis
justasmallblackpopulationinSanDiego.Whatisit5to6percentorsomething?Soevery
timewegetintothesesquabbleswithcitycouncilitsbecausetheywant10percentofthe
contractsgiventoblacks.Wellitsjustnotgoingtohappen.Theyarent[intheconstruction
industry].IndescribinghisorganizationspositiononDBEgoals,SDTA#7said,Ithinkin
generalwearegoingtofightsituationswhere[agenciesare]tryingtodisguiseaquotaandbring
itinWithregardtogoodfaithefforts,hestatedthattheyinvolve,justpushingpaper,
everybodyknowsthatthatsjustpoliticalcover,italwayshasbeen.
Interviewee#SD11,representingawhitemaleownedfirm,reportedthattakingtheeffortto
fulfillgoodfaitheffortsisnotproblematicbutgettingresultsisdifficult.Hesaid,Wedo90
percentofourwork[ourselves],soitishardtofindsubstodothistypeofwork.Indescribing
hisfirmspositiononDBEgoalsandgoodfaithefforts,Interviewee#SD11said,IftheDBE
programisraceneutralthenIdonthaveaproblem.
Interviewee#SD7,representingawhitemaleownedfirm,describedseveralproblemswiththe
goodfaitheffortsprocess.Hesaidthatthereisnoindicationofexperiencelevelwhenfirmsfill
outMBE/WBEpaperwork,sothereareanumberoffirmsthatarenotqualifiedtodothe
necessarywork.Healsocomplainedthatmanyoftheminorityandfemaleownedfirmsthathe
solicitsforbidsarenotreceptivetohissolicitationstheywillsayQuitbuggingmeorsome
willnotevenknowwhyheissolicitingthemtobidonaproject.Interviewee#SD7indicatedthat
theprocesscanbefrustrating:Itslikebeatingyourheadagainstawall.
Interviewee#SD4,representingawhitemaleownedfirm,reportedthatthenumberofusable
bidsthathereceivesfromsolicitingMBE/WBEfirmsforbidsisverylow,makingitdifficultto
fulfillgoodfaithefforts.HeestimatedthatoftheMBE/WBEfirmsthathesolicitsforbids,only15
percentwilltypicallyrespond,35percentofwhichwillbeoutofbusinessbythetimehefollows
upwiththem.
Interviewee#SD21,representingawhitemaleownedfirm,statedthatblanket,onesizefitsall
goalsarenotveryeffective,becausedifferentindustrieshavedifferentavailabilityratesof
MBE/WBEfirms.HesaidthatDBEgoalsshouldbetailoredtofitdifferentsectorsofconstruction
workbasedonthenumberofDBEsavailabletodoworkwithineachsector(e.g.,higher
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE216

percentagegoalsshouldapplytothosesectorswithalargernumberofavailableDBEs).With
regardtothedifficultyoffulfillinggoodfaithefforts,Interviewee#SD21said,Itiseasiertomeet
orexceeda[DBE]goalthanitistomeetorexceedtherequirementsofdocumentationand
solicitationofgoodfaithefforts.
Interviewee#SD11,representingawhitemaleownedfirm,reportedthattheirdisapprovalof
DBEprogramsstemsfrompublicagenciesonlybeingconcernedwithMBE/WBEparticipation
numbers:ifyoudidntusetheDBEguy,[publicagenciesthrow]yourbidoutbecauseyou
weresupposedtousethem.Thepublicagencyisonlylookingfornumbers,theyneverpoliced
theprogram.HewentontosaythatitisverydifficulttofindMBEandWBEfirmsinhisfirms
industrythatiscertifiedandarecapableofcompletingtheworkthathisfirmrequires.
Interviewee#SD41,representingawhitemaleownedfirm,saidthathisfirmhasexperience
littlesuccessinfindingMBE/WBEfirmstoparticipateoncontracts:OursuccessinfindingDBEs
hasbeenabsolutelyterrible.Theydontexistortheycantbidthescopeofwork.Noonewill
turnabidin.Itisreallyhardtofind[MBE/WBEfirms]!
SomemajorityownedfirmsindicatedthattheydonotsupportDBEgoalsorgoodfaithefforts,
becausetheprocessistoocostlyortimeconsuming.Interviewee#SD7,representingawhite
maleownedfirm,reportedthatDBEprogramsrequiremuchmorethangoodfaithefforts.He
saidthatifhisfirmreceivesinterestfromanMBEorWBEfirm,thentheyhavetoholdtheir
handthroughtheprocess,whichcanbequitecostlyandtimeconsuming.Theprocessincludes:
copyingtheplansandspecificationsfortheMBE/WBEfirm,walkingthefirmthroughtheplans,
andensuringthatthefirmhasalltheaddendumstotheproject.Hewentontosaythat99.9
percentofthetime,theMBE/WBEfirmdoesnotevenbidontheproject,sohisfirmmightas
welltakethatcostandflushitdownthetoilet.
Interviewee#SD6,representingawhitemaleownedfirm,reportedthathisfirmspendsan
averageof$200,000peryeartofulfillgoodfaithefforts(includingDisadvantagedVeterans
BusinessEnterprisegoals).Hesaidthathisfirmspendsanywherebetween$5,000and$10,000
ongoodfaitheffortsforeachjobonwhichtheybid,andtheywinperhapsoneoutofevery15of
thosejobs.Interviewee#SD6referredtogoodfaitheffortsasanabominationofcost.
Interviewee#SD24,representingawhitemaleownedfirm,indicatedthatDBEgoalsandgood
faitheffortsareafrustratingaspectofcompetingforpublicsectorwork:Itsfrustratingwhen
[DBEgoalsandgoodfaithefforts]maketheprocesslongerandmoreexpensive.Publicworkis
alreadymoreexpensive[thanprivatework].Whenyouaddanotherlayerthatcanbea
frustration,particularlyifsomeagencieshavesomefairlyonerousrequirements.Headded,
Obviouslythefewerrequirementsthereare,theeasieritisforus.
Interviewee#SD41,representingawhitemaleownedfirm,saidthatDBEProgramsare
ineffective:[TheDBEprogram]isnotworking.Idontseethebenefit.Therehastobeabetter
way.Hecontinued,[TheDBEprogram]makesittoughertodobusiness.Iamafirmbeliever
thatifyouworkhardandarehonest,youaregoingtodowellinlife.Iamnotouttogiveanyone
helpfornoreason.ThenotworkingforitIhaveaproblemwith.Ifyouareahardworkeryou
willbeprofitable.
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Twomajorityownedfirmsreportedhavingtheirbidsthrownout,becauseofreasonsrelated
toDBEgoalsandgoodfaithefforts.Interviewee#SD3,representingawhitemaleownedfirm,
statedthathisfirmbidonaprojectinwhichtheyfailedtomeetthe15percentDBEgoalbut
fulfilledtheirgoodfaithefforts.Nonetheless,theawardingagencytriedtothrowouttheirbid.
Interviewee#SD3reportedthathisfirmhadtohirea$300perhourattorneytofightthe
decision(whichtheyultimatelywon).
Interviewee#SD4,representingawhitemaleownedfirm,reportedthathisfirmbidonaproject
onwhichtherewasanaddendumthatextendedthebiddeadlinebyoneweek.Althoughhisfirm
advertisedforMBE/WBEsubcontractorsforthefirstthreeweeks,theydidnotadvertiseduring
thefinalweek.Theawardingagencyfoundthatthefirmdidnotfulfilltheirgoodfaithefforts,
andtheirbidwasthrownout.Interviewee#SD4sfirmcontestedthedecisionbutwas
unsuccessful.
SomeintervieweesindicatedthattheysupportDBEgoalsandgoodfaithefforts.Interviewee
#SD20,representinganAsianAmericanmaleownedfirm,indicatedthatDBEgoalsandgood
faitheffortsarebeneficialtominorityandfemaleownedfirms:Those[measures]arereally
helpful.
Interviewee#SD27,representingawhitemaleownedfirm,indicatedthathisfirmsupportsDBE
goalsandgoodfaithefforts.Hesaidthatifsocietyhasoperatedinawaythathasdisadvantaged
certainminoritygroups,thenitshouldtakestepstotryandrightthosewrongs.However,
Interviewee#SD27wentontosaythathecanappreciatethefactthattherearesomepeople
whobelievethatgivingpreferentialtreatmenttominoritiesandwomenisunfair.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,saidthatwithoutaDBEprogram,therearelimitedopportunitiesforminorityand
femaleownedfirmsinSanDiego.Shenotedthatlargefirmsdonotgooutoftheirwayto
provideopportunitiestoMBEandWBEfirmsunlesstheyarerequiredtodoso.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatgoodfaithefforts
helpDBEfirmsbeconsideredforcontractopportunities:Ireallythink[goodfaithefforts]helpa
lotofcompaniesgettheirfootinthedoorandtocompetewith[largerfirms].Shewentonto
saythatanumberofprimecontractorswouldnothaveusedherfirmifnotforDBEgoals,and
nowthefirmhasstrong,workingrelationshipswithanumberofprimecontractors.
Interviewee#SD40,representingawhitemaleownedfirm,indicatedthathesupportsDBE
programsanddoesnotthinkthattheyshouldbeeliminated,particularlytheAirportsprogram:
Dontremovetheprogram.IthinktheAirporthastakenalotoftimetoseewhatfitsthe
community.Interviewee#SD40wentontonotethathisfirmimplementsinternalMBE/WBE
participationgoals.However,Interviewee#SD40saidthathedoesnotbelievethatmandatory
setasidesarefair:Ipersonallydontbelievein[raceorgenderbasedsetasides].Ithinkyou
needthebestqualifiedfirmstodothework.Ihaveahardtimeethicallysayingthatacertain
amountofworkshouldbesetasideforacertaintypeoffirm.Letsgetthebestfirmstodothe
work.
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SDTA#6,representinganAsianAmericantradeorganization,indicatedtheDBEgoalsare
helpfultominorityandfemaleownedfirms.Shesaid,Ifyouarenotasconscientiousasthe
Airportthen[raceandgenderbased]targetsareimportant.
SDTA#1,representingalocalchamberofcommerce,statedthathisorganizationsupportsDBE
goalsandgoodfaithefforts,becausetheygiveagenciesconcretetargets.Hereferredtothemas
goodpolicy.
SDTA#3,representingalocalchamberofcommerce,saidthatherorganizationalsosupports
DBEgoalsandgoodfaithefforts.Shesaidthattheyencourageastrongworkforce,andthey
encouragepeopletogetinthereandstart.
SDTA#13,aretiredofficialfromalocalpublicagency,indicatedthatDBEgoalsareuseful,
becausetheyprovideagenciesinformationaboutwhichremedieshavebeeneffectiveandwhich
havenot.Shealsosaidthatthegoalsprovideanopportunityforminorityandfemaleowned
firmstointeractdirectlywithprimecontractors.
Interviewee#SD35,representinganAsianAmericanmaleownedfirm,reportedthatDBEgoals
havebeenverybeneficialtohisfirm,especiallybeforeProposition209:BecausewewereDBE
andfederallyfundedcontractsneededminorityparticipation,theywouldcallustobid.
Interviewee#SD37,representingawhitemaleownedfirm,indicatedthathedoesnotoppose
goodfaitheffortsanddoesnotconsidergoalstobeaproblem:Ithinkanyrequiredpercentage
theywanttosetforMBE/WBEisfine.Otherwise,thebigcontractorswouldtakeoverandthere
wouldbenoworkleftforthesmallcontractors.
Recommendationsrelatedtogoodfaithefforts.
AfewintervieweesrecommendedthatpublicagenciesdoabetterjobofenforcingMBE/WBE
utilization.Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,statedthat
publicagenciesshouldmakeprimecontractorsprovethattheyareutilizingMBE/WBE
subcontractorsthattheylistduringthebiddingprocess:Everypublicsectorjobshouldbe
auditedduringandafterconstruction.IfyouuseanMBEproveit!Thisshouldbedoneduring
andafterthecontract.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,expressedasimilar
sentiment:Achallengetothecertificationprogramistoensurethatiftheprimeusesthe
certifiedsubonabidthattheyusethemonthejob.Publicagenciesshouldcontinuereporting
andfurthertheirchecksandbalancesofprograms.
Similarly,SDTA#5,representingagovernmentadvisorycommissiononminorityissues,
indicatedthatmoreinformationaboutwhichfirmsreceiveawardswouldimproveDBE/ACDBE
programs:Iwanttoknowwhatthehistoryandwhoisdoingthework.Howdoyouknowyou
arewinningthegameifyoudontknowthescore?
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,statedthatmandatory
DBEgoalsneedtobeinplaceandneedtobeenforced:Make[thegoalsmandatory].Then
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everyonesgotthesameplayingfield.Hewentontosaythatgoodfaitheffortsshouldbe
eliminated,particularlyforlargercontractsthathavemoresubcontractingopportunities.
Doublestandardsinperformance.
AfewintervieweesreportedthatprimecontractorsandagenciesholdMBE/WBEfirmstoan
unfairstandardofperformance.Interviewee#SD20,representinganAsianAmericanmale
ownedfirm,saidthathehasoftenheardfromotherfirmsthatwhensomethinggoeswrongona
project,thescrutinyismuchworseforminorityandfemaleownedfirmsthanitisformajority
ownedfirms.Regardingthoseaccounts,hesaid,Iseesometruthinit.
Interviewee#SD28,representingawhitefemaleownedfirm,indicatedthatsmallfirms
(includingMBE/WBEfirms)areheldtomorestringentstandardsthanlarger,moreestablished
firms.Shesaidthatdoublestandardswereespeciallyaproblemforherfirmwhenitwasjust
starting:Inthebeginning,Ireallyfeltlikewehadtogotheextramiletoproveourselves,
because[primecontractors]didntthinkwecoulddothejob.Idontfeelitasmuchanymore
maybeitsbecausewereprovingourselves.
Interviewee#SD2,representingawhitefemaleownedfirm,reportedthatWBEfirmshaveto
completeprojectsbetterandfasterthanmajorityownedfirmsinordertoreceivethesame
recognition.
Interviewee#SD34,representingawhitemaleownedfirm,saidthatMBE/WBEfirmsneedto
dodoubletheamountofwork[and]getitdonethefirsttime[without]beinggivenasecond
chanceinordertoreceivethesameamountofrecognitionasmajorityownedfirms
Similarly,Interviewee#SD29,representinganAfricanAmericanmaleownedfirm,reportedthat
DBEfirmshavetoworktwiceashardasmajorityownedfirmstowinthesamenumberof
contractsandtoreceivethesamerecognition.HewentontosaythatDBEfirmsalsohaveto
havelowerpricesthanmajorityownedfirmstoremaincompetitive.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,saidthatsmallerfirms
areheldtodifferentstandardsthanlargerfirms,butheindicatedthatthepracticeistobe
expected:Ifyoureasmallorminorityfirm[primecontractors]wouldprobablywouldwatch
youalittlemorecarefullyorinspectyourworkalittlemorecloselyjustbecauseitstheirfirst
timedealingwithyou.
Relatedtothosecomments,Interviewee#SD31,representingawhitemaleownedfirm,saidthat
althoughsmall,MBE/WBEfirmsarenotheldtodifferentstandardsthanlarge,majorityowned
firms,initiallyMBE/WBEfirmsmighthavetoanswermorequestionsabouttheircompetence
andtheirabilitytodothework.
SDTA#1,representingalocalchamberofcommerce,indicatedthatalthoughhedoesnothave
anydirectknowledgeaboutprimecontractorsandagenciesholdingMBE/WBEfirmsto
differentstandardsthanmajorityownedfirms,hesaid,Idontdoubtthatithappens
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Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatdoublestandards
existintheconstructionindustrysuchthatsmallfirms(includingMBE/WBEs)haveto
accomplishmoretoreceivethesameamountofrecognitionasmajorityownedfirms:[Small
firms]just[can]expecttodomoreortogowaybeyondinordertobeabletogetthejobwiththe
sameclientagain.
Unfaircontractdenials.
Severalintervieweesreportedhavingknowledgeofunfaircontractdenialsasaresultofrace,
ethnicity,orgender.Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,
describedasituationinwhichhelostaconcessionairecontractwiththeAirporttoawhite
femaleownedfirmthatwasafrontforthefemaleownershusband.Interviewee#SD10
indicatedthattheboardthatawardedthecontractconsistedofthreeminoritiesandfourwhite
males,andthatthewhitemalesoverruledtheminoritymembersoftheboardinawardingthe
contracttothewhitefemaleownedfirm.Interviewee#SD10said,Racewasanissuehere.
SDTA#10,representingasuppliertradeorganization,statedhewasawareofasituationin
whichaminorityownedfirminitiallywonacontract,butthattheawardingentityterminated
thecontractwhenitfoundoutthatthefirmwasminorityowned.SDTA#10said,Prime
contractorscansaytheytriedtoworkwithanMBE,[but]toooftentheyareunfairlytreatedand
dismissed.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,remarkedthatMBEandWBEfirmsmightbediscriminatedagainstanddenied
contracts,butthatthediscriminationistoosubtleorsophisticatedtobenoticed:Ifsomeone
doesntlikeyoubecauseyouareblack,minority,or[a]woman,youwontgettheopportunity.
Thatdiscriminationwouldneverberevealed.
Similarly,Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidthathe
suspectsthatunfaircontractdenialsoccur,butthatthediscriminationistoosubtletobe
perceived:All[primecontractors]havetodoisfindsomereason[todenyacontract].
SDTA#13,aretiredofficialfromalocalpublicagency,indicatedthatunfaircontractdenials
occurasaresultofdiscriminationonthepartofprimecontractors,butthatitwouldbedifficult
foranyonetoprove:whenyoulookatthecontractors,theprimecontractors,nooneisgoing
toadmitthattheyexcludedapersonbecauseoftheircolororgender.Itisgoingtobeveryhard
toprovethatdiscriminationhasoccurred.
Someintervieweesreportedhavingnoknowledgeofunfaircontractdenialsasaresultofrace,
ethnicity,orgender.Interviewee#SD13,representingawhitemaleownedfirmthatisthe
masterconcessionaireattheAirport,saidthatherfirmhasneverdeniedapotential
concessionairespaceattheAirportbecauseoftheirrace,ethnicity,orgender.Interviewee
#SD13wentontosaythatinfactfourconcessionairelocationswereaddedattheAirportin
ordertoincreaseACDBErevenues.
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Interviewee#SD2,representingawhitefemaleownedfirm,andInterviewee#SD21,
representingawhitemaleownedfirm,bothreportedhavingnoknowledgeofunfaircontract
denials.
ConsortiumAnecdotesRegardingPerceivedGeneralBarriersto
ParticipationinthePublicandPrivateSectors
Thefollowinganecdotesregardinggeneralbarrierstoparticipationinthepublicandprivate
sectorswereobtainedfrominterviewsthatthestudyteamconductedinconnectionwithBBCs
2009Consortiumstudy.
Barrierstopursuingworkwithpublicsectoragencies.
Acoupleofintervieweesidentifiedtheabsenceofrace,ethnic,andgenderbasedgoalsasa
barriertopursuingworkwithpublicsectoragencies.[Interviewees#CON:12,46].Interviewee
#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,statedthatwhen
Caltranswentraceneutralalotofthelocalagenciesimplementingfederalprojectsnolonger
requiredstrictcompliancewithDBEgoals.Hestatedthatonarecentcontract,hiscompanywas
thelowbidderandthehighestDBEfirm(theprimecontractor),buttheagencyawardedthe
contracttoanothercompanybasedonpreferences.Hestatedthatthattheindividualonthe
selectionpanelwasaformeremployeeofthecompanythatwonthecontract.Hestatedthatalso
duringthatinterview,theindividualleadingtheinterviewtoldthemthatDBEisnotthat
importantanymore.Tohim,itwaslikeaslapinthefacebecauseitwasafederallyfunded
contractandtheRFPclearlystatedtherewasa10percentDBEgoal.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthattheabsenceofgoalsonprojectsinSantaMonica,SanDiego,or
OrangeCountyTransitAgenciesisabarriertopursuingwork.
Otherintervieweesidentifiedmultiplemiscellaneousbarrierstopursuingworkwithpublic
sectoragencies.[Interviewees#CON:4,6,10,31,WT#16,17,PF#25].Interviewee#CON4,a
DBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirmintheSanDiegoarea,
statedthatwithrespecttootheragencies,sometimeslargescaleprojectsaresohugethateven
largescaleprimecontractorscannothandleit;theyhavetopartnerwithanotherfirmtohandle
theproject.Interviewee#CON4statedthatitwouldbehelpfuliftheowneragencieswereableto
breakuphugeprojectsintosmalleronesandtherebycreatemoreopportunitiesforsmaller
firmstoparticipate.Forexample,acountywaterauthorityisembarkingonaprojectthatwill
startin2009wherebytheywillraisethedamononeofthereservoirs;thatisahugeproject
worth$600millionormore.Itissobigthateventheprimecontractorswhogoafteritpairup
withotherprimecontractors.Heexplainedthattheproblemismostprimecontractorshave
enoughinhousecapabilitiesthattheycoulddotheworkthemselvesor95percentofthework,
andthereisverylittletosubcontractwhichmeansthatDBEsareleftout.Ifprojectsthatbig
couldbebrokenupintosmallerprojects,Interviewee#CON4statedthatwouldhelp.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,statedthatasforother
agencies,permitfeesareabarriertopursuingworkwiththecountygovernment.Thecounty
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shutdownInterviewee#CON6scompanybecauseofhisfailuretoobtainasiteplanforhis
propertyatacostof$60,000to$100,000.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thatthewaythatnonConsortiumagenciesdrafttheirRFPsisabarriertopursuingwork;the
RFPsaretargeted.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthatheisaverysmallbusinessandhasnotbeensuccessfulonhis
attemptstoworkwithprimecontractors.Hestatedthathehastherequisitelicenses,
experiences,etc.,butthereisnoonetoassisthiminobtainingwork.Hestatedthatitwouldbe
greatifsomeonecouldfindawaytostreamlineandsimplifytheprocessinordertohelpout
goodcontractors.
WT#16,amaleAsianPacificownerofacivilengineeringfirmsubmittedwrittentestimony
regardingtheDisparityStudythathefeelsmostprimeconsultantscaneasilycircumventthe
UDBEgoalsbysubcontractingoutservicestheydonthaveinhouse.[His]firm[has
unsuccessfully]triedformanymonthstoconvincethebigprimeconsultingfirmstoletouta
smallportionoftheirwork(normallydonebytheirinhouseforces).(Writtentestimony
submitted10/13/09).
WT#17,amalemanagingpartnerofafirmthatmakesaproductfromrecycledtiressubmitted
writtentestimonythatasasmallbusiness,wereallyfeelthatweareatadisadvantageto
breakinwithOCTA.(Writtentestimonysubmitted9/28/09).
PF#25,anindividualrepresentingabusinessprovidinguniformservicesdescribedhisbusiness
asalocalmomandpopshop.HelodgedacomplaintwithMTSofSanDiegothatsmall
businessesarenegativelyaffectedbytheactionsofagenciesandprimecontractorswithno
recourseorremedy.Hesharedanexampleofhowhiscompany,alocalsmallbusiness,usedto
provideuniformservicestoMTSfor33years.MTSthenendedtheircontractwithhimandhired
anoutofstateuniformservicecompany.Subsequently,hiscompanylostapproximately33
percentofitsbusiness.Heconcludedbysaying,[t]hatmeansthatthecontractmoneyfromthe
SanDiegoMTSisnowgoingtosomeoneoutsideofthecommunity.(PublicForumSanDiego
heldonOctober21,2009).
Severalintervieweesindicatedthattherearenobarrierstopursingworkwithpublicsector
agencies.[Interviewees#CON:2,5,22,23,24,26,28,33,38,39,40,41,42,44,45,48,49,52,
53,54,55,56,57,58].Interviewee#CON5,anemployeeatanonDBEwhitemaleowned
electricalengineeringbusinessintheSanDiegoarea,statedthathehasnotheardofanybarriers
orobstaclestopursuingworkwithotheragencies;hebelievesthatthosewithDBEcertification
havethebenefit.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE223

Barrierstopursuingworkintheprivatesector.
Severalintervieweesidentifiednetworkingasabarriertopursuingworkintheprivatesector;
somereportedthatintheprivatesector,receivingworkisdependentonwhoyouknow.
[Interviewees#CON:2,4,5,10,12,22,31,32,33,CONTA#2].Interviewee#CON2,aDBE
certifiedAfricanAmericanmalestructuralengineerintheSanDiegoarea,statedthatinthe
privatesector,theprimarybarrierisnetworkingandmarketing.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatintermsofprivatesector,thebarrieristhattheprime
contractorsdobusinesswiththesamecompaniesoverandover;itisalwayswhotheyknow .
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
business,statedthatalthoughhehasneverseenanybarriersorobstaclestopursuingworkin
theprivatesector,hedidstatethatworkisbasedontherelationshipthatyouhavewithpeople.
Ifhiscompanydoesthejobandtheprimecontractorlikeswhathedoes,theybringhimback.
Interviewee#CON5statedthattherearenoissuesaboutbeingasmallbusinessorDBEinthe
privatesector.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattheydonotknowwheretheprivatesectorworkisorwhotheprimecontractorsarein
ordertosolicitwork.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatobtainingworkintheprivatesectorisdependentonwhoyouknowanditisvery
hardtogetintothenetworkunlessyouhavehadpriorexperience.Hestatedobtainingworkin
theprivatesectorismorebasedonluckthananythingelse.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatthetendencytoteamwithfriendsisabarriertopursuingworkin
theprivatesector.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathesuspectsthatintheprivatesectortheprimecontractorsalready
knowwhotheyaregoingtoworkwith.Hestatedthatinaddition,unlessyoubidtheproject
extremelylow,youwillnotgetthecontract.Hestatedthathecannotfigureouthowsomefirms
areabletobidsolowunlesstheyarenotpayingdecentwagesorpayrolltaxes.Heindicatedthat
theprimecontractorsnowarefrequentlyselfperforming,whichcutsoutalotofsubcontractors.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthattherearethesameobstaclestopursuingworkintheprivatesectorasthere
arewithotheragenciescontractorswillonlyusethosesubcontractorswithwhomtheyare
familiarandhavearelationship.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattherearebarrierstopursuingworkintheprivatesectorbutoccasionallyyoucan
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE224

approachtheprimecontractor,althoughtheyalreadyhavetheirteamputtogether,andask
themtotakeanotherlookattheirteamandconsiderworkingwithyourcompany.
CONTA#2statedthatprivatesectorprojectsareprettyopen.Ownerschoosecontractorsbased
ontheircomfortzoneandfeelingthatthecontractoriscompetent.
Otherintervieweesidentifiedmultiplemiscellaneousbarrierstopursuingworkintheprivate
sector.Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthatobtainingfinancingisabarrieror
obstacletopursuingworkintheprivatesector.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatthelackofregulationintheprivatesectorcouldalsobe
seenasabarrierbecausetheevaluatorsarenotalwaysfair,buthestatedthatthatoccursinthe
publicsectoraswell.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthattheprivatesectorhasnoresponsibilityorgoal
requirementtoutilizeherfirm;theywillonlyutilizeherfirmiftheyhaveto.Shestatedthatno
matterhowhardshetriestoobtainwork,andwithallofherexperience,sheisstillunableto
obtainworkintheprivatesector.Shestatedthattheprivatesectorfirmshavetheirownteams .
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,statedthatthere
arefewopportunitiesforsmallbusinessesandpeoplewanttohirenamebrandcompanies.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatherfirmisnotabletoprovidethesameperksforherclientsas
areotherfirms;thismaybeabarriertopursuingworkintheprivatesector.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatthereare
barriersorobstaclestopursuingworkintheprivatesector,buttheyarenotasprevalentasin
thepublicsector.Hestatedthatitismorecompetitiveintheprivatesectorandtheworkismore
spreadout.
Severalintervieweeswereunawareofanybarrierstopursuingworkintheprivatesector.
[Interviewees#CON:1,6,9,23,24,26,28,38,39,40,41,42,44,45,46,49,52,53,54,55,56,
57,58].Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectrical
contractingfirmintheSanDiegoarea,statedthattherearenobarrierstopursuingworkinthe
privatesector.Hestatedthattheytrytogetwork,andiftheydonotgetthework,theytryto
figureoutwhytheydidnotgetthework.
Someintervieweesreportedtheimpactthattheunionshavehad,ifany,upontheir
businesses.Interviewee#CON9,anAsianPacificAmericanmaleownedtransportation
engineeringandplanningconsultantfirmandgraduateoftheDBEProgramintheLosAngeles
area,statedthatunionshavenothadanimpactonhisbusiness.
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Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatthe
L.A.CountyUnionhaspositivelyimpactedherbusinessbecausetheyhiredhertodoaprojectfor
them.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,did
notidentifyanyissuescausedbyunions.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,hasnothadanyissuewiththeunions.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,statedthatunionshavedirectlyimpactedhisabilitytoengageworkers
andgetcertainjobsbecauseofDavisBaconwagesandtheuseofnonunioncontractors.His
companyhasastrongsetofunioncardcarryingmembersbecauseInterviewee#CON15couldnt
opposetheunion.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,notedthatunionsdohaveanimpactonaDBEsabilitytopursue,engagein,and
obtainwork.DavisBaconpayscalesandratesaremuchbettersounionworkisfavored
accordingtoInterviewee#CON16.Interviewee#CON16hasnotexperiencedanyobstaclesor
barrierstoworkduetoaunion.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatsheknowsunionsintheconstruction
industryhavehadanimpactonsomecompanies,butnothercompanydirectly.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,had
noexperiencewithunionsaffectingherabilitytoworkinanywayintheindustry.
Someintervieweescommentedontheirexperiencesasorwithsuppliersandwhether
theirexperienceshavebeenaffectedbytheirDBEcertification.Interviewee#CON20,an
AfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertifiedcommunityoutreachfirm,
statedthatshehasnotexperiencedanybarriersregardinglicensingagreements,pricingor
distributionarrangementswithmanufacturers.Shestatedthatsheisabletoobtaincompetitive
pricesforsuppliesandwasnotawareofasuppliergivingaDBEfirmlessfavorablepricing.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedhehasexperiencedbarriersregardinglicensing
agreementsordistributionarrangementswithmanufacturersanddistributors.Hestatedthatit
wascleardiscriminationinthatcertaindistributorswillrefusetoquotepricesto
subcontractors.Heisnotabletoobtaincompetitivepricesforsuppliesallthetime;hestated
thatsometimesthesupplierrefusestoquote.Hewasawareofsituationswhensuppliershave
givenDBEslessfavorablepricesortreatment.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,doesnotfeelasthoughhehashadanyissueswithhissuppliers.Theyhavetold
himthatbusinessisslowforeveryonerightnow.Hefeelshegetsthesamepricesaseveryone
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE226

elsegetsfromhissupplier.Interviewee#CON31isnotawareofanysuppliersgivingDBEsless
favorablepricesortreatingthemunfairly,especiallywiththestateoftheeconomyandthe
industry,theyarejusttryingtostayabovewater.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathehasnothadanynegativeexperienceswiththemanufacturersofhis
cleaningproducts.Hehasbeensuccessfulinnegotiatinggoodpricesforhisproducts;heisnot
awareofsuppliersorwholesalersgivinglessfavorablepricestoDBEs.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatshehasnotexperiencedanybarriersregardinglicensingagreements,pricingor
distributionarrangementswithmanufacturerordistributors.Shestatedthatsheisableto
obtaincompetitivepricing.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthathehasbeenabletoobtaincompetitive
pricesforhissuppliesandhasnotexperiencedanybarriersregardinglicensingagreements,
pricing,ordistributionarrangements.Heisnotawareofasupplierorwholesalergivingless
favorablepricestoDBEsandstatedthatifhewashewouldreportit.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,hadneverexperiencedanybarrierswithrespecttolicensingor
distributionagreementsorpricing.Sheisabletoobtaincompetitivepricesforhersuppliesand
wasnotawareofanymanufacturerorwholesalergivingDBEslessfavorablepricesorfair
treatment.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatforthemostparthisexperienceobtainingsupplieshasbeenokay
andhepurchaseshispetroleumproductsdirectlyfromtherefineries.Inthepasthehasbeen
unabletoobtaincompetitivesuppliesforhisprices,butnowheisableto.Hewasawareof
refineriesgivingmorefavorablepricestoCaucasianownedcompanies.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,notedthat
sometimesthemanufacturerwillfilllargeordersfirstandhissmallerbusinesshastowaiton
supplies;thiswouldhurttheirbusinessandtheirreputation.Hewasnotawareofanysuppliers
orwholesalersgivinglessfavorablepricestoDBEs.
Goodoldboynetwork.
Severalintervieweesreportedhavingbeenclosedoutofanopportunitybecausetheprime
contractorutilizedasubcontractorwithinitsownnetwork.[Interviewees#CON:1,2,3,4,7,8,
9,12,13,14,16,17,18,20,21,22,27,30,31,32,33,34,35,36,37,38,45,46,48,49,52,56,
58,CONTA#1,2].Manyofthesefirmsindicatedthatithappensallthetime.Severalfirms,
however,notedthatthisisduetotheprimecontractorscomfortlevelwiththesubcontractor
basedontheirpastrelationship.Interviewee#CON1,anonDBEHispanicAmericanmaleowner
ofanelectricalcontractingfirmintheSanDiegoarea,statedthathehasbeenclosedoutofan
opportunitybecausetheprimecontractorusedasubcontractorinhisownnetwork;hestated
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thatithappensallthetime.Hestatedthatwhenaprimecontractorfindsasubcontractorthat
helikestoworkwith,hewillveryrarelydeviatefromthat.Hestatedthatathisoldcompany,
theywouldhavemembersofthecompanybidthecontractunderdifferentnamestoensurethat
someonewithintheirownnetworkwouldgetthejob.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthathefeelshehasbeenclosedoutofanopportunitytobeasubcontractorbecause
theprimeusedasubcontractorwithinitsownnetwork.Hesaysithappensallthetime.He
statedthatthisoccurredaboutsixmonthsago.Therewasaprivatewarehousedesignproject
thatcameupandInterviewee#CON2approachedthedeveloper,submittedhiscompanys
profile,anditnevercametofruition.Hestatedthatthecontractwasawardedtoanother
structuralengineerthatthedeveloperhadworkedwith.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedbusinessesareoftenclosedoutofanopportunitytobeasubcontractor
becausetheprimeusedasubcontractorwithinitsownnetwork.Hestatedthatithappensallthe
time,whetherthefirmisaDBEornot.Hestatedthatprimecontractorsuseasubcontractorwith
whomtheyhavebecomecomfortable.Interviewee#CON3statedthattheuseofDBEsisnot
requiredintheprivatesector,soifyouhaveanonDBEwhoaprimecontractorisexperienced
withandaDBEwhoitisnotexperiencedwith,theprimecontractormightusethenonDBE.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthatheissurethereareoccasionswherehisbusinesshasbeen
closedoutofanopportunitytobeasubcontractorbecausetheprimeusedasubcontractor
withinitsownnetwork,butthereisnowaytoproveit.Hedidnotknowofanyspecificoccasions
orspecificprojects.Interviewee#CON4statedhehasdoneafairamountofworkoncounty
waterauthorityprojectswithinthelastfiveyears,thelistofprojectsthathehasworkedismore
thanapagelong,sohehastheexperience.But,heexplained,certainprimecontractorsthatgo
aftertheseprojectsnevercallhiscompanyorinvitehiscompanytobeontheirteamnordoeshe
everreceiveacourtesycallfromthoseprimecontractorsrequestingthathesubmit
qualifications.Interviewee#CON4statedthathewonderswhatthereasonis,andheknowsitis
notbecauseofhiscapabilitiesorlackofexperience.Hestatedhedoesnotknowwhyhedoesnot
getthisworkotherthanthatfirmshaveaspecialrelationshipwithothersubcontractors.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthathehasknownsubcontractorswhowere
cutoutofaprojectbecausethegeneralcontractordidnothaveexperiencewiththemandchose
touseasubcontractorwithinitsownnetwork.Interviewee#CON7statedthatthishas
happenedasrecentlyasthepastfewmonthsonnonConsortiumprojects.Interviewee#CON7
statedthatmostcontractorsgowithsomeonewhoiscompetentandthequestioniswhetherto
takeariskonsomeonenewwhohasnorecord.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthathehasbeenclosedoutofanopportunitybecausetheprimecontractorused
someonewithinitsownnetwork.Intheprivatesector,hisperceptionisthattheprime
contractorhasarelationshipwithanothersubcontractorandwilltendtousetheother
subcontractorirrespectiveoflowbid.Inthepublicsector,Interviewee#CON8hashadthe
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strongfeelingthatthepublicagencystaffwouldneverselectasmallfirmlikehisoveralarge
firmbecausethestaffmembercouldthenhaveanopportunitytoworkforthelargefirmwhen
theyleavethepublicsector.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
hisbusinesshasbeenclosedoutofanopportunitybecausetheprimecontractoruseda
subcontractorwithinhisownnetwork.Hestatedthatitisusuallyunderstandablewhenthat
happensbecauseitisduetofriendshipsandpastrelationships.Interviewee#CON9statedthat
somenonConsortiumagenciesdonotlikethembutitisafreecountry.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatitiscommontobeclosedoutofanopportunitybecausetheprimecontractoruses
someonewithintheirownnetwork.Hestatedthattherearesomeaffiliationsthatyoucannot
break.Theonlywaytobreaksuchaffiliationsistobuildclosetieswiththeultimateclientwho
canthenadvisetheprimecontractorsastowhotheyshouldhire.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehasfeltclosedoutofanopportunitybecauseaprime
contractorusedasubcontractorwithintheirownnetwork.Hestatedthathehasattendedsome
procurementsandfoundoutthatcertainprimecontractorsaregoingtobidonlargecontracts.
Hestatedthathisbusinesscouldhelpthembuttheprimecontractoroftenhastheirstandard
teaminplace.Hestatedthathehasfeltlockedoutofopportunitiestoworkwiththoseprime
contractors.Interviewee#CON13statedthathedoesnotfeelasthoughheispartofanetwork.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathiscompanyhasbeenclosedoutofopportunitiesbecausetheprimeusedasubcontractor
initsownnetwork,butitgoesforeverybody.HestatedthattheConsortiumagenciesreward
companiesforhavingrelationshipswithothercompanies.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthatthebusinesshasbeenclosedoutofopportunitiestobea
subcontractorbecauseaprimecontractorusedmembersofitsownnetwork.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,notedthatshehasbeenclosedoutofopportunitiesto
subcontractbecauseofaprimecontractorfavoringothersubcontractors,butsheindicatedthat
thisistheresultofrelationships.AccordingtoInterviewee#CON17,thekeytosuccessisthe
qualityofhercompanyswork.Interviewee#CON17notesthatfavoritismisntnecessarilyabad
thing.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,stated
thatthebusinesshasbeenclosedoutofopportunitiesbecauseprimecontractorsusepreferred
providers,butnotedthatprimecontractorshaveeveryrighttodosoitisthenatureofthe
work.
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Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthatherbusinesshasbeenclosedoutofanopportunity
becausetheprimecontractorutilizedsubcontractorinitsownnetwork.Shestatedthatthisgoes
backtorelationships.Interviewee#CON20statedthatsheunderstandswhythishappens,but
doesnotfeelthatitisright.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatshehasabsolutelybeenclosedoutof
opportunitiesbecausetheprimecontractorusedasubcontractorwithinitsownnetwork.She
statedthatthisisespeciallythecaseintheconstruction,transportationandengineeringfields.
Shestatedthatsheisinthemarketingfieldandseveraloftheprimecontractorsdealonlywitha
fewCaucasianownedfirms.Shesaidthishasbeentheconsistentcaseforthepastthreeyears.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshesometimesfeelsasthoughsheisclosedoutofbidopportunities
becausetheprimecontractorusedasubcontractorwithinitsownnetwork.Shestatedthat
sometimesteamsareputtogetherlongbeforeaproposalisputoutwhichforecloses
opportunities.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthathisfirmhasbeenclosedoutofanopportunitytobidbecausethe
primecontractorusedasubcontractorwithinitsownnetwork.Henotedthattheyare
consultantandtheygetjobsbydevelopingrelationships;iftheydonotgettherefirsttheyare
shutout.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathehasbeenclosedoutofanopportunityduetotheGoodOldBoyNetwork
networkandthatitisdifficulttobreakthrough.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthatitisnoteasytobreakthroughandbeabletoworkwithotheragencies.He
feelsthatsinceheisnewandmanycompaniesdonotknowhim,theotheragenciescontinueto
usecompaniesandpeoplethattheyalreadyknowandwithwhomtheyarefamiliar.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatsherealizesthedictatesofcompetition,butteamsareusuallyformedwellbeforean
RFPissues.Shecouldnotspecifyaspecificinstance,butsheknewthatithashappened.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatwithrespecttoherworkwithothernonConsortiumpublicagencies,
shehasrespondedtomultipleRFPs,buthasnotreceivedanycontractsorreturnphonecalls.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathisfirmhasbeenclosedoutofopportunitiesbecausetheprimecontractoruseda
subcontractorwithinitsownnetwork.
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Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatshehasbeenclosedoutofopportunitiesacoupleoftimes
becausetheprimecontractorusedasubcontractorwithinitsownnetwork.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatprimecontractorsutilizesubcontractorswithintheirownnetwork
allthetime.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,reportedthathehasbeenclosedoutofanopportunitybecauseaprime
contractorusedasubcontractorwithinitsownnetwork.HestatedthatwhenCaltransstopped
theirmandatoryrequirementsforDBEutilization,alloftheprimecontractorswentbackto
usingtheirownsubcontractors.HestatedthathisworkwithL.A.CountyMTAdroppedalthough
L.A.CountyMTAusedtohaveagoodDBEandMBEProgram.Hestatedthatthereusedtobe
betteropportunitieswhencontractorswererequiredtoutilizeDBEsandMBEs.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthatovertheyearshehasbeenclosedoutofopportunitiesbecauseaprime
contractorusedasubcontractorwithinitsownnetwork;hestatedthatthishashappenedon
morethanoneoccasion.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
hisfirmhasbeenclosedoutofabusinessopportunitybecausetheprimecontractoruseda
subcontractorwithinitsownnetworkbutthishappensinbusiness.Heindicatedthatthisisthe
reasonhisfirmconsidersnetworkingtobepartofhisbusinessgrowthstrategy.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,statedthathe
hasbeenclosedoutofanopportunitybecausetheprimecontractorusedasubcontractorwithin
theirownnetwork,butstatedthatthisisanormalpartofbusinessformostfirms.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,statedthatitwas
possiblethathisfirmhadbeenclosedoutofanopportunitybecausetheprimecontractoruseda
subcontractorwithinitsownnetwork,buthedoesnotfeelasthoughthishasaffectedthe
successofhisbusinessasawhole.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatheisawarethat
businessesareoftenclosedoutofanopportunitytobeasubcontractorbecausetheprimeuseda
subcontractorwithinitsownnetwork.Hestatedthatthishappenseverydayandhethingsthat
itismorerelatedtoalevelofcomfortthattheprimecontractorshavewithsubcontractorsthat
theyknowintheirownnetwork.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathismembersoften
feelclosedoutofanopportunitytobeasubcontractorbecausetheprimeusedasubcontractor
withinitsownnetwork.Hestatedthatithappensallthetimeonpublicprojects.CONTA#2
statedthathefrequentlyhearsthiscomplaint,butcouldnotprovideanyspecificexamples.
CONTA#2statedthatinrelationtootheragencies,liketheCityofSanDiego,thereisaGood
OldBoyNetworkthatpreventshismembersfromobtainingwork.CONTA#2statedthatlast
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE231

year,theCityissued$400,000inprojectsandCONTA#2smembersreceivedonly$5,200worth
ofthosecontracts,andthisyearthereiszeroAfricanAmericanparticipation.
Otherintervieweesreportednoknowledgeofsubcontractorsbeingclosedoutof
opportunitiesbecauseprimecontractorsusedsubcontractorswithintheirownnetwork.
[Interviewees#CON:11,25,28,29,32,42,47,53,57].Interviewee#CON11,anSBEcertified
whitefemaleergonomicprimeconsultant,didnotknowwhethershehadbeenclosedoutofan
opportunityduetoanetworkbecauseshedoesnotfollowupwithprimecontractorsifshe
losesthebid.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathedoesnotknowifhehasbeenclosedoutofanopportunity.Hestatedhe
istryingtogettoknowpeoplesothathecangetinthedoorandgetacontract.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,didnotknowwhetherhehadbeenclosedoutofanopportunitybecausetheprime
contractorusedasubcontractorwithinitsownnetwork.
SomeintervieweesreportedtheexistenceofaGoodOldBoyNetworkinthetransportation
industry.[Interviewees#CON:1,2,3,10,12,13,14,15,16,17,18,19,20,21,22,26,27,28,
30,31,34,37,38,45,46,48,49,54,PF#13,24].Interviewee#CON1,anonDBEHispanic
AmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,statedthatthereis
aGoodOldBoyNetworkinexistence.Hestatedthathiscontractorssendtheirnumbersoutto
peopleandgetrepeatwork,buthewouldhopethatifsomeoneelsehadabetterpricethatthe
primecontractorwouldusetheminstead.Hestatedthatheknowsforafactothercontractorsin
thefieldhelpmanipulatetheenvironmenttobetterthemselves.
Interviewee#CON2,anAfricanAmericanstructuralengineer,statedthathefeelsthatthereisa
GoodOldBoyNetworkinthetransportationindustrybecause95percentofthefirmswhoare
offeringtheworkarenonminoritiesandtheygetthecontracts.Hestatedthatitisdifficultto
pinpointbecausemanyofthesecompanieshavebeeninbusinessforyearsandarepositionedto
obtainbusiness,buthiscompanyisnew.Hence,hestatedthatitisdifficulttotellwhetherthey
getmorebusinessbecauseofaGoodOldBoyNetworkorbecausetheyhavesimplybeenin
businesslonger.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthattheGoodOldBoyNetworkexistsonsomelevel,butthatitisreally
aboutofferingprojectstopeopleorentitiesthattheprimecontractorhasworkedwith.The
primecontractorwilloftenusethesamepeople.Thishappensintheprivatesectoraswell.
Interviewee#CON3saidcompanieswillalwayshavethosecompaniesthattheywanttowork
withandsometimesthisistothedisadvantageoftheDBE.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattherecouldbeaGoodOldBoyNetworkwithinsomeagencieswhereinthesamefirms
areconnectedandrepeatedlyselectedforwork.
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Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthereisdefinitelyaGoodOldBoyNetworkintheConsortiumtransportationindustry.
Hestatedthathebelievesthattheselectionpanelsareinfluencedbythevariousagencyboards.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathewouldguessthereisaGoodOldBoyNetwork,but
hedoesnothaveevidenceofthat.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatthereisalittlebitofaGoodOldBoyNetworkamongtheengineers,butitisnotinthe
samesenseasitisinotherindustrieswhereyouactuallyusetheterm.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthereisaGoodOldBoyNetworkintheConsortiumtransportation
industry,buthadnospecificincidentstoreport.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,saidsheknowsthereisaGoodOldBoyNetworkinthe
industry.Atfirst,Interviewee#CON17wasintimidated,butsheisnotlookeddownuponany
more;shesaidshehasearnedherreputation.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
confirmedthatthereisaGoodOldBoyNetworknetworkintheindustry,butstatedthatishow
youbecomeknownandnetwork.Interviewee#CON18thinksthesystemcanbeusedasaplace
tobeidentifiedassomeonewhodoesgoodwork.Shestatedthatthereisvaluetohavingthese
friendshipsandrelationshipswhenthefirmsknowwhattoexpectofeachother.
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,reportedthathewas
awareofaGoodOldBoyNetworknetwork,butdidnothaveanyspecificexamplesasitrelates
tothetransportationindustry.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatthereisaGoodOldBoyNetwork
withtheConsortiumtransportationindustry.Sheindicatedthatshecannotevengetan
appointmenttodiscussconstructionrelatedmarketingmaterialwithsomecontractors.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatthereisaGoodOldBoyNetworkintheConsortium
transportationindustry.Shestatedthatthereisacertainamountofworkavailableandthe
GoodOldBoyNetworktriestomakesurethattheworkisspreadamongthemselves.Shefeels
asthoughtheyconcentrateontheirrelationshipstohelpthemgetthework.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthattherearemaybesixcontractorsthatgetwork.Hestatedthatthey
haveahistoryandatrustandtherearesomeindividualsthatgetworkallthetime.
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Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedthattheGoodOldBoyNetworkisaliveandwell
andthatithasalottodowithrelationships.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,definitelyfeelsthatthereisaGoodOldBoyNetwork.Hebelievesthatitisextremely
difficulttocrackthroughthewallandgetintothenetwork.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthereisnodoubtthatthereisaGoodOldBoyNetwork.Hecommented
aboutthefactheistryingtocrackthecombinationtogetintothisnetwork.Hehiresallpeople:
AfricanAmerican,Caucasian,Hispanic,Asian,itdoesnotmattertohim.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,reportedthatthereisagroupoffirmsthattypicallygetalloftheworkandhenoted
thatitishardtocrackopenthatdoor.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthattheGoodOldBoyNetworkisaliveandwell.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthatthereisaGoodOldBoyNetworkwithintheConsortium
transportationindustry.HestatedthatwhenDBEutilizationwasmandatory,theprime
contractorswouldgooutandcompetitivelyseekDBEsubcontractors;nowthatutilizationis
voluntary,theprimecontractorsusewhotheywantontheproject.HestatedthattheMinority
BusinessOpportunityCenter(MBOC)isagoodorganizationthatperformsoutreachto
encourageprimecontractorstoworkwithminorityownedbusinessesonmajorprojects.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthatthereisdefinitelyaGoodOldBoyNetworkintheConsortiumtransportation
industry.HealsoreportedtheexistenceofaGoodOldWomanNetwork.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthathecouldnotspecificallystatethatthereisaGoodOld
BoyNetworkintheConsortiumtransportationindustry,butthoughtthattheGoodOldBoy
Networkexistseverywhere.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
confirmedthatthereisaGoodOldBoyNetworkintheindustry,butstatedthatishowyou
becomeknownandnetwork.Interviewee#CON18thinksthesystemcanbeusedasaplacetobe
identifiedassomeonewhodoesgoodwork.Shestatedthatthereisvaluetohavingthese
friendshipsandrelationshipswhentheyknowwhattoexpectofeachother.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthatthereisaGoodOldBoyNetworktosomedegree;shestatedthatallindustryislike
that.
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Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatofcoursethereisaGoodOldBoyNetworkinthetransportationindustry.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,reportedthatthereisaGoodOldBoyNetworkeverywhereinallindustries.
Shestatedthatevenwhensheiscompetitiveandgoesupagainstanonminoritycompany,she
willreceivevariousexcusesastowhyherfirmdidnotreceivethework,includingthattheyneed
moreexperienceortheotherbidwasjustabitlower.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatshewasawareofaGoodOldBoyNetworkandtheyuse
thesamepeopleontheircontracts.Shestatedthatsheknowsthisfromherownexperience
dealingwiththem.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathedidnotknowaboutaGoodOldBoyNetwork,butidentifiedabuddy
buddysystemthroughouttheindustry.Hestatedthatprivatesectorcompaniesdoenoughto
passtherules;theywillputoutasolicitationtoeveryone,butknowaheadoftimewhich
companiestheyaregoingtouse.Hestatedthatabouteightornineyearsagohecontacteda
companyaboutasecuritysolicitationandtoldthemthatitsoundedlikefromthesolicitation
thattheyintendedtogivethecontracttotheincumbent.Heindicatedtothemthathewasnot
planningonsuingthem,buthedidnotwanttospendthemoneytorespondtotheRFPifthey
hadafirminmindalready.Hestatedthefirmfinallytoldhimthattheyplannedtousethe
incumbent.HestatedthatnowheisprettygoodatlookingattheRFPanddeterminingwhether
itisgearedtotheincumbent.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,statedthatthereisaGoodOldBoyNetworkinallconstruction.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthereisaGoodOld
BoyNetworkineveryagency.Hestatedthatitisthenatureofthebusiness.Agenciesalready
knowwhotheywanttodobusinesswith.Hestatedthattheremustbemoreaccountabilityin
theindustry.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatthereisaGoodOld
BoyNetworkinthetransportationindustry.Hesaidthatalargecontractorsassociationhasa
mottothatstatesitsmembersdobusinesswithitsmembers.Healsosaidalargeengineering
contractorsassociation,whichdoesalotofConsortiumjobs,hasthesamecommitmentto
supporteachother.
PF#13,thePresidentofawomanownedITconsultingfirmprovidedoraltestimonyatapublic
forumheldonOctober20,2009.Shesaid,OurexperiencewithOCTAwasvery,veryfrustrating
primarilybecausewewatchedacontractgotoanoutofstatevendorwhenwewerea
comparablyqualifiedlocalvendor,andourrateswerecompetitive.Shealsostatedthat
wheneverherfirmseesanRFPwithashortleadtime(e.g.,twoweeks)anditisfairlycomplex
proposal,shebelievesitisanindicationthatavendorhasalreadybeenselected.Shesuggested
thatabettermonitoringanddisclosureprocessisneededsothatsmallbusinessescanlearn
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE235

fromtheirmistakes,andemulatewhatothersaredoingright.(PublicForumLosAngelesheld
onOctober20,2009).
PF#24,anindividualrepresentingaminorityandwomanownedbusinessinthefieldofhuman
capitalmanagementprovidedoraltestimonyatthepublicforumheldonOctober21,2009.He
stated,Thesamefirms(includingminorityownedandotherDBEs)alwaysseemtogetthe
contractawards.Hismainconcernwascronyism,notdiscrimination.Hewasalsoconcerned
thatthedollaramountforthefewcontractsthatareawardedtosmallbusinessesissimply,too
lowinvaluetomakealivingandgrowabusiness.Hewantsandneedscontractsthatareabove
the$3,000,$4,000and$5,000rangeinvalue.(PublicForumSanDiegoheldonOctober21,
2009).
OtherintervieweesreportednoknowledgeofaGoodOldBoyNetworkinthetransportation
industry.[Interviewees#CON:4,6,7,8,9,11,29,32,36,42,52,53,57,58].Interviewee
#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirmintheSan
Diegoarea,didnothaveanythoughtsonwhetherthereisaGoodOldBoyNetworkinthe
industry.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,didnotfeelthatthereisa
GoodOldBoyNetworkintheConsortiumtransportationindustry.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthat,tohisknowledge,thereisnoGoodOld
BoyNetworkintheConsortiumtransportationindustry.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,doesnotbelievethatthereisaGoodOldBoyNetworkintheConsortiumtransportation
industry.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,doesnot
believethereisaGoodOldBoyNetworkintheConsortiumtransportationindustry.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
doesnotbelievethereisaGoodOldBoyNetworkintheConsortiumtransportationindustry
andstatedthatthecontractspeoplearefair.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,didnotknowwhethertherewasaGoodOldBoyNetworkintheConsortium
transportationindustry;hestatedthatheisjusttryingtobuildhiscompany.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshedidnotknowwhethertherewasaGoodOldBoyNetwork
intheConsortiumtransportationindustry,butstatedthatcompaniesknowwhotheyliketo
workwithandgetthembackwhentheycan.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE236

Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,statedthat
hedidnotknoworcarewhethertherewasaGoodOldBoyNetworkintheConsortium
transportationindustry.
Bidshopping.
Severalintervieweesreportedknowledgeoforexperiencewithbidshoppingbyprime
contractors.[Interviewees#CON:1,2,5,7,8,11,12,14,15,16,20,22,26,28,31,32,33,37,
38,42,45,46,47,52,53,54,55,56,CONTA#1,2].Severalintervieweesrelayedmultiple
instancesofbidshoppinghavingoccurred.Interviewee#CON1,anonDBEHispanicAmerican
maleownerofanelectricalcontractingfirmintheSanDiegoarea,identifiedarecentcaseofbid
shoppingonanationwidecontractandtheprimecontractorwasrequiringthesubcontractorto
accepta20percentdiscountonworkperformed;hestatedthatthesubcontractorwillagreeto
dothisinordertokeepgettingworkinthefuture.Hesaidthatitisextremelydisheartening,but
ithappensallthetime.
Interviewee#CON2,anAfricanAmericanmaleownedstructuralengineer,statedthathehas
experiencedbidshoppingwithinthepastyear.Hestatedthatthisoccursintheprivatesector.
Hesaidarchitectssometimestakeproposalsfromengineersandshopthelowestbidtoits
preferredconsultant.Hestatedthatheisawareofthepracticebecauseotherengineers
sometimesdisclosethatthearchitectshaveshoppedthebidtothemandawardedthecontract.
Hestatedthathetestedanarchitectbyslashinghisproposalby50percentbut,evenafter
loweringhisprice,Interviewee#CON2didnotgetthejob.Thearchitectwenttoanother
engineerandnegotiatedthecontract.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthathecannotsaythathehasheardofinstancesofbid
shopping,butknowsthatithappensallthetimeintheindustrywhetherthesubcontractorisa
DBEornonDBE.Hestatedthatmunicipalitiesandprivatecompaniesalwaystakethreebidsin.
Interviewee#CON5statedthattheprimecontractorsgenerallycallhimbackandtellhimwhat
thelowestbidis,andaskifhewantstobeatthepriceandhegenerallysaysno.Hence,he
stated,priceshoppinghappensallthetime.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthatbidshoppingisveryprevalentinthe
industry,whetherornotthesubcontractorisaDBE.Infact,Interviewee#CON7statedthatthe
morningofthisinterview,helostabidonaprojecttosomeoneelseafterthecontractorshopped
thebid.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthathehasheardofbidshopping.Hehassuspectedthatithashappenedonseveral
occasionsinthepublicsector,butnoneofthoseinstanceswaswiththeConsortium.Hestated
thatthereisalawthatoncertaincontractstheprimecontractorsmustlistthesubcontractors
bidtopreventbidpeddling,buthiscontractsaretoosmalltomeetthethresholdforthislaw.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE237

Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
hasexperiencedbidshoppingintheprivatesectorandpeoplecallherallthetimetogetpricing.
Shestatedthattherearestrictrules,andsheisselectedbecauseoflowprice.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathehasbeenontheothersideofbidshopping.Hestatedthathereceivescallsfor
bidsandhetellshispeoplenottospendalotoftimeputtingtogetheraproposal,butratherjust
givethemanumber.
Interviewee#14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,statedthathe
hasheardofbidshopping.Hestatedthatanotherchallengeiswhenthepricingportionofthe
bidrequirestheuseofaformulathathasverylittledowiththeactualproject.Forexample,he
statedthataproposalforamarketingplanshouldbeevaluatedbasedontalentandprice.
However,themoretalentedtheindividuals,themoreexpensivetheproposal.Hestatedthatthis
requiresthetalentedcompanytounderbidtheproposal.Hestatedthatsometimesthiscauses
hiscompanytoloseaproposaltoacompanywhoislessexpensive,buthasnoideawhatthey
aredoing.Hestatedthattheseproposalsshouldbeevaluatedbyanexperiencedmarketing
plannerwithtransportationexperienceasopposedtoevaluationbasedonconstructionpricing.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,hasexperiencedandheardofbidshopping.Companieshaveaskedfor
quotesandhispricingandthenusedthatinformationtopushpreferredcontractorspricing
down.Interviewee#CON15hashadsubcontractorscallhimandsay,Howismynumber?
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthathehasheardofandexperiencedbidshopping.Interviewee#CON16
notesthatthesegamesgetplayedallthetime.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathehasexperiencedbidshopping;thisiswhyhefeelshedidnotgetsome
contracts.Hebelievesthattherehavebeeninstanceswheretheprimecontractorhastakenhis
pricesandthenfoundsomeonetosubmitalowerbid,despitethequalityoftheproject.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,wasawareofbidshopping.Shestatedthatitisprevalentin
printingandisastandardpartofthecontract.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,statedthatwithinthepasttwoyearshehashadcontractorsaskforhisprice,
whichtheywillthenpassontotheirownelectricalcompanysothatitknowsitmustcomein
underthatnumber.Hestatedthatothertimescontractorswillrequestapricethreedaysbefore
abidisdueinordertoverifythepriceoftheirchosensubcontractor.Hestatedthathenolonger
providespricequotestothesecompanies.Hestatedthathisbidisprotectedonlywhenthe
primecontractorisrequiredtohave20percentminorityparticipation;thentheywillprotecthis
quote.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE238

Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,reportedthathe
wasawareofbidshopping.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathehasheardof
bidshoppingrecently.Hestatedthatgenerallyprimecontractorsmakesubcontractorslower
theirpricesuntiltheyfinallybowout.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasheardofbid
shopping.Hestatedthathismembersoftensuspectthattheprimecontractorprovidedtheir
quotetoanothersubcontractortoreceivealowerquote.Asaresult,hestatedthatmany
subcontractors(whetherDBEornonDBE)calltheirnumbersinfiveminutesbeforethebidtime
becausetheydonotwanttheirnumbersshopped.Hestatedthatiftheytrustedtheprimethey
wouldsendtheirnumbersinaweekoradayearly.CONTA#2couldnotprovidethenamesof
anyspecificprojectsinwhichbidshoppingmayhaveoccurred.
Otherintervieweesreportednoknowledgeoforexperiencewithbidshoppingbyprime
contractors.[Interviewees#CON:3,4,6,9,10,17,18,19,21,25,27,29,30,34,35,36,47,49,
57,58].Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservices
companyintheSanDiegoarea,statedthathehadnotheardofanybidshopping.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasnotdirectlyexperiencedbidshopping,butdoesnot
knowwhetherithashappenedtoothers.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,hasneverheardofanybid
shopping.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
hehasnotexperiencedbidshoppingalthoughsometimestheirbusinesswillbetoldthattheir
pricesaretoohighandthatiswhytheprimecontractorstoppedcallingthem.
Bidmanipulation/differentbidcriteria.
Severalintervieweesreportedhavingexperiencedorheardofbidmanipulation.[Interviewees
#CON:1,2,3,4,7,8,9,13,14,15,16,20,22,26,28,31,37,45,46,47,48,53,54,55,CONTA
#1,2].Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectrical
contractingfirmintheSanDiegoarea,statedthathehasabsolutelyseenbidmanipulation
happen.Hereferencedtheexampleofsomeonewiththeprimecontractorsfirmbiddingthe
projectunderadifferentnametoensurethatoneofthepartieswillwinthecontract.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthathehasnotheardoforexperiencedanybidmanipulationdirectly,butheknows
thatitclearlyhappensintheprivatesector.Hestatedthatheknowsforafactthatanarchitect
willlookatthelowbidpriceandapproachhispreferredengineerandsayloweryourpriceto
thisoneandIllgiveyouthejob.Hestatedthathehasnotseenthisinthepublicsector.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE239

Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthatthereisalotofspeculationaboutbidmanipulationinthepublic
sector.Hecouldnotgiveanyexamples,butheardofsituationsasrecentlyas2000inwhicha
primecontractordesignatedaparticularDBEforbidandchangedtheDBEafterward.
Interviewee#CON3statedthataprimecanalwayscomeupwithareasonnottouseaDBE.For
instance,theprimemightsaythataDBEdidnothaveenoughmanpower.Interviewee#CON3
statedthathehasalsoheardofprimecontractorssatisfyingtherequirementtouseaDBEatthe
bidstageandthentheDBEwouldnotgetthework.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthathehasnotheardofbidmanipulation,but
wasgenerallyawarethatgeneralcontractorsoftensentnoticesouttosubcontractorsaskingfor
apricequote24hoursbeforethebidwasdue.Hestatedthatthislastoccurredfourmonthsago,
onaprivatesectorprojectinvolvingelectricalworkforaschooldistrict.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthathehasperceivedbidmanipulation,butitisverydifficulttoprove;this
experiencewasnotwiththeConsortium.Interviewee#CON8providedtheexampleofaStateof
CaliforniaRFPthatindicatedthatqualificationscamefirst,andpricecamesecond;hedidnot
thinkthiswastrue.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
bidmanipulationcouldhappen,buthedoesnothaveanyproof.Hestatedthatonceinawhile
therewillbeanRFPwherethepriceissupposedtobemaintainedinasealedenvelopeuntil
aftertheselectionofthefirm,butsometimesitwillbeleakedoutofignorancebytheproject
manager;theywillsayweopeneditupandsawhowlowtheotherguysweresowepicked
them.Henoted,however,thatthishasnothappenedwithaConsortiumagency.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehashadtheexperiencewherenonConsortium
agencieshavefoundsomethingthattheylikedinaproposaltheyreceived,andhavethenissued
anaddendumtotheRFPbasedonwhattheysawandwhattheyliked;hestatedthatthisisnot
fair.Interviewee#CON13statedthathehasalsobeentoldbyagenciestoteamupwithanother
contractortoavoidcompetition.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatbidmanipulationisatouchysituation,butitdefinitelyexiststosomeextent.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,statedthathehasheardofandexperiencedbidmanipulation.Interviewee
#CON16notedthatthesetypesofthingshappenallthetime.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehasheardofbidmanipulation,buthasnotexperiencedit.She
statedthatwhenteamsdonotwinaprojecttheywillcomplainofbidmanipulation.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE240

Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthatwhenlargecompaniesshoparoundforbids,evenifaminority
ownedcompanyhasthelowestbid,iftheywanttousetheirownpeopletheywillusetheterm
lowestresponsiblebidder,whichallowsthemtoawardthecontracttothefirmthathasnot
submittedthelowestbid.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,reportedthathehadexperiencedbidmanipulation.Herelayedoneinstanceinwhichhe
bidajobat$13millionwhichwasaslowashecouldgo.Theagencytheninformedhimthatthey
weregoingtoawardthecontracttoanotherbidderat$11million.Interviewee#CON47stated
thathewentbacktohisbid,andheremovedallprofit,overhead,andG&Aandgothisbiddown
tothepurecostwhichwasaround$11millionhestatedthathecouldnotfigureouthow
someonewasabletobidthecontractat$11million.Hefollowedupwithafriendwhowasa
friendofsomeoneintheagency;thisagencypersoninformedhimunofficiallythattheagency
plannedtoamendtheawardtogetitbackupto$12or$13million.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatbidmanipulation
happenseveryday.HestatedthatprimecontractorsrequestpricequotesfromDBEsforbidding
purposes,buttheydonotprovidetheDBEswithenoughtimetorespond.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasheardof
instancesofbidmanipulation,primarilybycallingDBEsubcontractorstorequestapricequote
thedaybeforeabidisduesothattheprimecansaythatitmadeagoodfaithefforttouseaDBE.
CONTA#2statedthatthisiscommonplaceandhehearsaboutitperiodically.CONTA#2stated
thathehasinthepastheardofoccasionsinwhichaprimecontractorrepresentsthatitisgoing
touseaDBE,butdoesnotinfactusetheDBE.
Severalintervieweeshadneverheardoforexperiencedbidmanipulation.[Interviewees
#CON:5,6,10,11,13,17,18,19,21,25,27,29,30,32,33,34,35,36,38,42,49,52,56,57,58].
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasneverheardoforexperiencedbidmanipulation
becauseinSanDiegomostagenciesfollowup.Interviewee#CON4statedthatsometimeshe
receivesanemailorcallsayingthathisfirmhasbeenlistedassomeonewhowascontactedand
theagencyaskshimwhetheritistrue,andwhetherhesubmittedabid.Hestatedthatheisnot
surewhethertheagenciesfollowupeverytime,butonceinawhilehedoesreceivefollowup
andknowsthatsomeoneischecking.Interviewee#CON4alsoexplainedthatwhenaprime
contractorsubmitsaproposalforaprojecttheprimecontractorissupposedtohavelettersof
commitmentfromthatsubcontractorandiftheprimecontractorwinsthecontractitisnoteasy
tochangethesubcontractor.Theprimemustobtainpriorapprovalfirstfromtheagencyand
providereasonswhyitischangingthesubcontractor.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE241

DBEfronts.
SeveralintervieweesreportedsomeknowledgeofallegedDBEfronts.[Interviewees#CON:
2,3,4,9,10,13,16,19,20,22,25,27,28,30,31,33,34,36,37,38,42,45,46,48,49,54,55,
56,CONTA#2].Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineer
intheSanDiegoarea,statedthathehearsaboutDBEfrontsallthetime.Oftentimes,he
statedthattheDBEiscertifiedbecausethewifeofthepersonwhooperatesthebusinessislisted
astheowner.HestatedthathehasheardofDBEfrontsasrecentlyasacoupleofyearsago,but
couldnotrecallanyspecificprojects.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthatthedownsideoftheDBEProgramisthatthereareoftenbusinesses
certifiedaswomanownedbutwomenhavenoinvolvementintheactualoperations.
Interviewee#CON3statedthatheisawareofadrillingsubcontractorintheenvironmental
businesscommonlyusedandcertifiedasawomanownedbusiness,butthefemaleownerdid
knowmuchabouttheareaandwasnotageologist.Hestateditwasascam.Thiscompany
obtainedprojectsthroughtheConsortiumandtheConsortiumqualifiedthem.Interviewee
#CON3statedthatwhenhewasemployedathispreviousfirm,between1990and1995,he
thoughtthathalftotwothirdsofthesubcontractorsheldtheircertificationimproperly.Itwas
notalwaysunderthecircumstancesofawomannamedtheproprietor.
Interviewee#CON3alsodescribedotherDBEfrontsincludingananalyticallaboratorythathad
awomanownedbusinessdesignation,andshamdrillersonassessmentprojects.Herecalled
thattheDBEshefeltwereshamsdidworkfortheConsortium,butcouldnotrecallanyprojects
thattheyworkedon.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasheardofDBEfronts.Hewasawareabout10yearsagoof
abusinesscertifiedasawomanownedbusiness,butthewifewhowasownerwasactually
neverinvolvedinthebusinessandthehusbandwasrunningtheshowbehindthescenes.
Interviewee#CON4statedthatheisnotawarewhetherthecompanyobtainedworkthroughthe
Consortium,andcouldnotrecallanyparticularprojectsthattheyworkedon.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,hasheardof
DBEfrontsbuthasnotdealtwithitmuchrecently.Hestatedthatsometimesthishappenswith
aWBEfirmwherethewifeissupposedlyinchargebutthatisrare.Hecouldnotthinkofany
MBEfronts.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,had
heardaboutDBEfrontsinthenews.ShestatedthattheSBAnewsletterreportedanincident
severalmonthsagoaboutafirmthatwasnotaminorityatall.Shestatedthatitisher
understandingfromtheSBAnewsletterthattheSBAnowhastogoandinvestigatefirmsto
makesurethattheyareinfactqualified.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehasheardofDBEfrontsandprovidedtheexampleof
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE242

ahusbandandwifeteamwherethewifeisthelistedpresident,butthehusbandisreallyin
chargeofthecompany.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,hasheardofDBEfrontsposingasminoritycompaniestogetvarious
contracts.Interviewee#CON16statedthatthisoftenhappenswithsuppliersandvendorswhere
itiseasiertowritecontractsaroundvariousindustrystandardsandrequirementsforminority
businessuse.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehadheardofDBEfronts,butitwasherrecollectionthatthis
occurredmoreinthe1980sand1990swhentheDBEProgramhadjustbegun.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthathehadheardofDBEfrontsalongtimeago,buthedidnothaveany
firsthandexperiencewiththis.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,hadheardofinstancesofbusinessfrontswherethe
minorityorDBEdoesnottrulyownthecompany.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathehasheardofDBEfronts,buthesnotsureaboutthem.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathehasheardofDBEfronts.HestatedthattheL.A.CountyMTAcomes
toyourhouseandlooksatwhatyouhaveandtheywanttoseethatyouaredisadvantaged;he
notedthathehadexperiencedaDBEfrontthough.Therewasaninstanceinwhichheobserveda
DBEfrontwherethewifeofthepersonrunningthebusinesswaslistedasitsprimaryowner.
Thiswasinorderfortheirbusinesstoreceivecertificationasafemaleownedentity.Hesaidthe
husbandhasbeenabricklayerhiswholelifeandhiswifewasabletogetcertificationandthey
nowqualifyforprojectsthathecouldnotgetbecausetheyarecompetingforthesametypesof
funds.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatshehasheardofDBEfronts.Sheprovidedtheexampleofthewifebeinganurseora
realestateagentandtheyopenanengineeringfirmandthehusbandisanengineer;shestated
thattheydothistotrytogetbusinessasafemale/minorityownedfirm.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,reportedthathehasheardofDBEfronts.Hestatedthatthisisusuallyintheform
ofafemaleownedbusinessthatisactuallyrunbythewomanshusbandorsomeoneelse.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,reportedthatshehadheardofDBEfrontsaboutthreeorfouryearsago;
sheheardthatmenwouldlistfemalesorminorities,likeacousin,asthebusinessownerinorder
toobtainwork.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE243

Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,statedthathewasawareofafewDBEfrontsinparticular.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehasheardofCaucasianwomenposingasabusinessownerinordertoqualify
forDBEcertification.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,reportedhaving
workedatafirminthepastthathebelievesoperatedasaDBEbutwasafront.Hestatedthat
thefirmreportedlyhadafemaleowner,butshewastheownerinnameonly;herhusbandwas
actuallythemanagingowneroftheorganization.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasheardofDBE
frontsbutcouldnotsaythatheknewofaDBEfront.Hestatedthathehassometimesseen
teamingbetweenanonDBEandDBEfirmtoobtainprojects.
SomeintervieweesreportedthattheyhadneverheardofDBEfronts.[Interviewees#CON:
1,5,6,7,8,12,14,15,17,18,21,26,29,32,35,47,52,53,57,58,CONTA#1].
FalseDBEreporting.
SomeintervieweesreportedexperiencewithorknowledgeoffalseDBEreporting.
[Interviewees#CON:3,10,19,20,22,27,28,31,35,36,37,38,45,48,49,55,CONTA#1].
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthathehadnotheardoffalseDBEreportingbutalsorelayedthefollowing
example:hestatedthathehasheardofsituationsasrecentlyas2000inwhichaprime
contractordesignatedaparticularDBEforbidandchangedtheDBEafterward.Interviewee
#CON3statedthataprimecanalwayscomeupwithareasonnottouseaDBE.Forinstance,the
primemightsaythataDBEdidnothaveenoughmanpower.Interviewee#CON3statedthathe
hasalsoheardofprimecontractorssatisfyingtherequirementtouseaDBEatthebidstageand
thentheDBEwouldnotgetthework.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,had
heardoffalseDBEreporting.Interviewee#CON10statedthatothernonConsortiumagencies
haveateamtoensurethatprimecontractorsproperlymakeagoodfaithefforttoutilizeDBE
subcontractors.Shestatedthatshehasreceivedaphonecallfromtheteamtoensurethatshe
wasaDBEandwascontactedbytheprimecontractor.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthatshehasheardoffalseDBEreporting.Shenotedthatithadbeena
while,butshehadheardofacompanyreceiving10percentoftheworkandhavingitreported
thattheyreceived25percent.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatinthe1990stheirfirmwasaDBEonarailprojectandtheprime
contractorinflatedhisfirmshoursforreportingpurposes.Hestatedonanotheroccasion,a
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE244

primecontractorusedtheirnamewithouttheirpermissiontowinwork;theyonlyfoundout
aboutitbyaccidentafterreceivingsomemail.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,wasawareofinstanceswhereprimecontractorshave
falselyreportedDBEparticipationincontracts.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,statedthatonsomenonConsortiumprojectsshehassubmittedabid,been
listedasasubcontractor,butthendoesnotreceiveanywork.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,reportedthatalotofcontractorswillbringonaDBEorMBEtobuysomething
andthenpaythem8percentabovethecostfortheireffort.Forexample,iftheprimecontractor
needstheDBEtodo15percentoftheworkandthatis$250,000.00,theprimecontractorwill
havetheDBEpurchasethematerialsfromadesignatedsupplierandwillpaythebillandpaythe
DBE8percentfortheireffort;theDBE,however,isneverphysicallyonthejob.Hestatedthat
passingworktobuythematerialstoaminoritysubcontractorinordertomeetagoalisnotthe
waytheDBEProgramwasintended.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehasheardoffalseDBEreportingasitrelatestowhitefemaleownedfirms
beingutilizedonprojects.Healsoreportedaninstanceofalargecompanydecidingnottouse
DBEsaftertheyhadincludedDBEsontheirproposal.Hestatedthatthecompanycameupwitha
numberofthinveiledexcusestogetoutofusingtheDBEs.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathehasheardof
falseDBEreporting,butcouldnotrecallanyspecificdetails.
MostintervieweesreportednoknowledgeoffalseDBEreporting.[Interviewees#CON:2,5,6,
8,9,12,13,14,15,16,17,18,21,25,26,29,30,32,34,42,46,47,52,53,54,56,57,58,CONTA
#2].Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,hadnever
heardoforexperiencedfalseDBEreportingorprimecontractorsfalsifyingtheirgoodfaith
effortstoutilizeDBEs.HestatedImnotsayingitdoesnothappenbutIhaventheardofit.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathehasnotexperiencedorheardoffalseDBEreporting,
butheisnotinapositiontoknow.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,wasnotsureifhehadheardoffalseDBEreporting.
AfewintervieweesreportedthattheyhadnodirectknowledgeoffalseDBEreporting,but
weresurethatithashappened.[Interviewees#CON:1,4,7,33].Interviewee#CON1,anon
DBEHispanicAmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,had
neverheardoffalseDBEreportingorofprimecontractorsfalsifyingtheirgoodfaitheffortsto
utilizeDBEsalthoughheissurethatithappens.
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Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasneverheardofanyfalseDBEreporting,butheissure
thatithasprobablyhappened.
Interviewee#CON7,anonDBEwhitemaleownerofasolarhydrogenfuelcellsalesand
installationcompanyintheSanDiegoarea,statedthathedoesnotspecificallyknowofanyfalse
DBEreporting,however,heissurethatithappens.
Goodfaithefforts.
Manyintervieweesreportedperceptionsofinstanceswhereprimecontractorsdidnotuse
genuinegoodfaitheffortstolocatequalifiedandavailableDBEsubcontractors.[Interviewees
#CON:3,4,7,8,11,12,13,16,18,20,21,22,26,27,28,30,31,33,37,38,45,46,47,48,49,
54,55,CONTA#1,2,PF#5,7,10,14,15,16,22,23,6].Interviewee#CON3,anonDBEwhite
maleownerofanenvironmentalservicescompanyintheSanDiegoarea,recalledsituationsin
2000whereitwasrumoredthataprimefalsifieditsgoodfaitheffortstoutilizeDBEs.He
statedthattheprimesimplyexplainedthatitcouldnotfindaDBE.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathedoesnotthinkthatprimecontractorsreallymakeaneffort
tofalsifytheirgoodfaitheffortstoutilizeDBEs.Hisimpressionisthatmostprimecontractors
arejustgoingthroughthemotionswhenitcomestogoodfaithefforts.Theyhavetodoitsothey
advertiseandsendfaxesoremailsorletters.Interviewee#CON4statedthathedoesnotthink
thattheyaredoingitinanearnestwaybecauseoftenhereceivesaRFPwithverylittletimeon
theclockleft,andthereisnowayhisfirmcanputtogetheraproposalintwodaysorso.For
example,recentlyhereceivedaRFPonafairlylargeprojectforapublicagencyandtheprime
wantedaproposalintwodays;hisfirmcouldnotputittogether.
Interviewee#CON7statedthatheisgenerallyawarethatprimecontractorsfalsifytheirgood
faitheffortstoutilizeDBEs.Thisoftenoccurswhentheprimecontractorswaituntiltwenty
fourhoursbeforeabidisduetonotifyDBEsofthebid.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedthathehasheardofprimecontractorsfalsifyingtheirgoodfaitheffortstoutilize
DBEs,butnotonConsortiumprojects.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthat
peopledofalsifytheirgoodfaitheffortsandtheyarejusttryingtosatisfytherequisitecriteria.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathedidnothaveevidencetoshowthataprimecontractorhadeverfalsifiedhisgood
faithefforts.But,hestatedthatononecontracthedidnotthinktheprimecontractorwhowon
hadmettheDBEgoalorsatisfiedthegoodfaithefforts.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthathereceivesalotofinquiriesfromprimecontractors
doingbusinesswiththeCityofLosAngelesaskingwhetherheisinterestedinparticipatingona
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE246

project;hestatedthathealwaysrespondsthattheyareinterested,buthenevergetsa
responsefromtheprimecontractor.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,thinksthatgoodfaitheffortsarethebiggestjokeoutthere.Interviewee
#CON16receivesfaxesallthetimefromcompaniesseekingtocertifythattheyhavesoughtout
minoritybusinessesassubcontractorsandmeetinggoodfaitheffortstandards.Alotoftimes
Interviewee#CON16receivesthesefaxesforservicestotallyunrelatedtohisbusinessor
sometimesadaybeforeabidisduethecompanycannotevenputabidtogetherinthatshort
amountoftime.Thesecompaniesaretryingtobypassthesystemandusealoophole.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,reportedthatshehasheardrecentlyaboutprimecontractorsfalsifyingtheir
goodfaithefforts,andthatthispracticeisongoing.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatprimecontractorswillgothroughtheeffort,butalreadyhaveafirm
inmind.Hestatedthattheyhavebeenhelpedandhurtbythis,andhebelievesthatitistheway
thesystemworks.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthathefeelsthatthishashappenedtohimwherehesreceivedinformationaboutan
opportunity,butdidnothearbackprimarilybecausetheprimecontractorwasreachingoutto
DBEsonlybecauseofthegoodfaitheffortrequirement,whichwasntenoughtoactuallygetthe
contractawardedtohim.Itwassimplyanattempttogethisinformationtobeincludedina
reportasagoodfaitheffort.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,saidthatoftenprimecontractorswillsendhiminformationtobidonprojectsfor
plumbinganddrainage,butheisamasonrycontractor.Hestatedthattheprimecontractorsare
justgoingthroughthestepofshowingasocalledgoodfaitheffort,buttheyarenotreallytrying
togetasubcontractor.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatsheperceivesprimecontractorsdofalsifytheirgoodfaithefforts.Shestatedthatshe
cameclosetofightingacompanysclaimofgoodfaitheffortsacoupleoftimes,butshedidnot
wanttospendthetimetryingtoproveit.Shewantedinsteadtoputforthhereffortatfinding
newbusiness.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasheardofcontractorsfalsifyingtheirgoodfaithefforts,butthatitisjustthe
natureofthebusinessanditisnotgoingtochangeduringhislifetime.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,indicatedthathebelievesallprimecontractorsfalsifytheirgoodfaithefforts
toutilizeDBEs.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE247

Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathehasreceivedtelephonecallsandfaxesaskinghimtobeasubcontractor;he
sendsininformation,butneverhearsbackfromthem.Hestatedthatwithinthepastsixtoeight
months,hehasprovidedinformationtofourcompanies,buthasnotheardbackfromanyof
them.HestatedthesecompaniesmaythentellthegovernmenttheysolicitedDBEsbutcouldnot
findanyone.Healsoindicatedthatprimecontractorscanhavesomeonewithintheirown
companyfilloutthepaperworktobecomeaDBE,andthentheycanawardthejobstothem.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthathehasheardofcontractorsfalsifyingtheirgoodfaitheffortstoutilizeDBEs;he
believesthatthiswasreported,butnothingwasdonetorectifythesituation.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,reportedthathehasheardallthetimeaboutprimecontractorsfalsifyingtheirgoodfaith
effortstoutilizeDBEs.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedhebelievesthat
primecontractorsdofalsifytheirgoodfaitheffortstoutilizeDBEs.Hestatedthattheyputina
littleeffortandsimplysaytherewasnoresponseandthenuseanonDBE.Hestatedthatthereis
nowayfortheagencytogobackandfindoutiftheprimecontractoractuallyrequestedany
pricequotesfromDBEs.Hestatedthatthereisnomonitoringoftheprimecontractorsgood
faitheffortsandwhatevertheprimecontractorreportsisacceptedbytheagency.Hestated
thathelastheardofthisoccurringthisyear.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatprimecontractors
oftenfalsifytheirgoodfaitheffortstoutilizeDBEsbyprovidingonlya24hournoticeofan
invitationtobidsothattheycanhaveafileletterindicatingthattheymadeagoodfaitheffortto
useaDBE.Subcontractorsthenhaveverylittletime,ifany,tosubmitthequote.CONTA#2also
statedthathehasheardmemberssaythattheyhaveseentheirnamesonbids,butwerenot
usedorthememberwassubstituted.
PF#5,anindividualrepresentingacertifiedDBE/SBEpublicrelationsfirmprovidedoral
testimonyatthepublicforumheldonOctober20,2009.Hisconcernwasthatwhenprime
contractorsmaketheirgoodfaitheffortthatitisnotactuallydoneingoodfaith.Hesaidthatthe
primecontractorsmakedemandsandrequestcertificationswithurgencyandthentheynever
followthroughwiththesubsorrarely,ifever,dotheyactuallyawardacontracttosubs.Hesaid,
Youdontrisknotsendinganythingbecausethenyoutrulygetnothing.Butthatswhatthe
ultimateresultsarenotgettingworkwhetheryourespondtoaPrimesrequest,ornot.Ithink
itisexceedinglyunprofessional.Whatcanbedoneaboutit?(PublicForumLosAngelesheldon
October20,2009).
PF#7,anAfricanAmericanwomanrepresentingacertifiedMBEenvironmentalcompanyvoiced
frustrationwiththecertificationprocessandthesolicitationprocessbyprimecontractors.She
said,IhavetoproveoverandoveragainthatImstillablackperson,forinstance.Shestated
thattheprimecontractorsaredisingenuousintheiroutreacheffortstotrulyincludeminorities
andawardcontractstominoritysubcontractors.Shestatedthattheprimesareonlycontacting
minoritybusinessestoclaimthattheyhavedonetheirduediligence,buttheireffortsarenot
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE248

genuine.Theprimessimplywanttoincludethefactthattheyhavemadetheiroutreachefforts
bycontactingusintheirproposals,buttheyhaveverylittleintentionofprovidingtheworkto
us.ShealsowantsmoreworksetasideforDBEsandtostopcronyism.Shewantstoseean
improvementandincreaseinoutreacheffortstominoritybusinesses,whichshouldincrease
theirparticipationinactualcontracts.(PublicForumLosAngelesheldonOctober20,2009).
PF#10,anindividualrepresentinganengineeringfirmstated,Imanarchitectatan
engineeringcompany,andIcanseesincewhenIfirstcamein1978theresachangeinhow
contractsaregiventominorityfirms.Itishiscontentionthatsincetheabolishingofaffirmative
action,thereisnomandateorrequirementforlargecorporationstogivecontractstosmall
minorityfirms.Itneedstobeapartofourculture.(PublicForumLosAngelesheldonOctober
20,2009).
PF#14,afemaleHispanicindividualrepresentinganonprofitorganizationofLatinbusiness
owners,statedthatherorganizationsearchesforRFPsandforwardstheinformationtotheir
members.Sheandherorganizationhaveseriousdoubtsaboutthevalidityofthegoodfaith
effortsbyprimecontractors.Shesaid,Goodfaitheffortsdoesnotworkforus,andImean,we
hearitallthetime.Itsnoteffortanymore.Ithinkweneedtogobeyondthatstepandbuildtrue
partnershipstogivetrueaccesstotheminoritybusinesses.(PublicForumLosAngelesheldon
October20,2009).
PF#15,anindividualwhorepresentsaDBEcertifiedtestingandinspectionfirmprovidedoral
testimonyatthepublicforumheldonOctober20,2009.Shehadanissuewiththelackof
genuinegoodfaitheffortsmadebyprimes.Shedescribedthegoodfaithprocessas
disingenuous,andsaiditonlyservestoprovideprimeswithvalidationthattheymadeaneffort,
butitdoesnotvalidatethattheyawardedworktoDBEsandothersmallbusinesses.Thegood
faitheffortsneedtobemandatory.(PublicForumLosAngelesheldonOctober20,2009).
PF#16,anAfricanAmericanwomanwhorepresentsacomputersupplycompanyaswellasan
AfricanAmericanChamberofCommerceprovidedoraltestimonyatapublicforumheldon
October20,2009.Shestatedthatthereisalackofanauthentic,verifiable,andenforcedgood
faitheffortbyprimes.Ihavebeeninbusinessfor11years.Thejokeaboutgoodfaithinthe
smallbusinessandminoritycommunitiesistorefertothegoodfaithastheGoodFakeeffort.
Shealsostated,Ithinkweneedtoputsometeethintheprogram.Thereshouldbeapenalty.
Thereshouldbepenaltiesintheprogrammakemandatoryrequirements,soitsnotjusta
goodfaithestimateeffort.Shestatedthattransparencyiscrucial.(PublicForumLosAngeles
heldonOctober20,2009).
PF#22,anindividualrepresentingtheinterestofblackownedfirmsprovidedoraltestimony.
Hebeganwiththestatement,Withoutgoals(hiringquotasforblackownedbusinesses),black
ownedfirmsdonotandwillnotreceivecontractsfromlargewhiteownedfirms.Hegavean
exampleofbeingofferedonly$600byaprimecontractorwhenthetotalcontractwasworth
$7.6million.Hebelievedthattheprimewasonlyofferingthisworktotheminorityownedfirm
tofulfilltheirminorityownedbusinessmandate,whichwasveryinsulting.Duringthepublic
forum,hemadearequestthatmandatorygoalsbeincludedinallcontracts.Hestatedthat,Good
faitheffortlanguageisgrosslyinsufficienttocompellargeprimestohireDBEs.(PublicForum
SanDiegoheldonOctober21,2009).
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PF#23,anindividualrepresentingawomanandAsianPacificownedfirmprovidedoral
testimonyatapublicforumheldonOctober21,2009.Herfirmwentthroughtheentireprocess
tosecureacontractwithalargeprimecontractor.Itwasagreatdealofwork,time,andcosts
thathadazeroreturnforourefforts.Shestatedthatitwasacommonexperienceforherfirm
andothersmallbusinessownerstodoallthatisrequired,andthennothearbackfromaprime
andnotbeaccepted.Shestatedthattheprimesarejustgoingthroughthemotionsoftheirdue
diligencetoconductoutreachtosmallbusiness,buthavelittleornogenuineintenttoawarda
subcontractoraportionofthework.(PublicForumSanDiegoheldonOctober21,2009).
PF#6,anindividualrepresentinghiscompanystatedthatitstheprimecontractorswhoinsist
onasubcontractorsendingcertifications,withoutdelay,andthentheprimenevergetsbackto
thesubcontractor.Thesubcontractors,hesaid,areatthemercyoftheprimes,withoutany
enforcementoroversightfortheirbusinesspracticesorlackofcontractsawarded.The
individualstated,Itisveryfrustrating.(PublicForumLosAngelesheldonOctober20,2009).
Otherintervieweesreportedthattheyhadneverheardoforexperiencedaprimecontractor
falsifyingitsgoodfaithefforts.[Interviewees#CON:2,6,14,15,17,19,25,29,32,34,36,42,
52,53,56,57].Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineer
intheSanDiegoarea,statedthathehasnotheardoforexperiencedprimecontractorsfalsifying
theirgoodfaitheffortstoutilizeDBEs.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,hasneverheardofanyprime
contractorsfalsifyingtheirgoodfaitheffortstoutilizeDBEs.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thathehasnotheardofaprimecontractorfalsifyingtheirgoodfaitheffortstoutilizeDBEs.
Interviewee#CON14statedhoweverthatnooneauditscontractstodeterminewhatwas
proposedasfarasDBEparticipation(and,presumablyactualparticipation).
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hasbeenapproachedbycompaniesregardinggood
faithefforts.Interviewee#CON17getsalotofrequeststhatshethinksareforthepurposeof
makinggoodfaitheffortsbecausethecompanyislistedincertaindirectoriesasbeinga
contractorratherthanaprofessionalservicesfirm.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshecouldnotsayforsurewhethershewasawareofprime
contractorsfalsifyingtheirgoodfaithefforts,butnotedthatprimecontractorsusethefirmsthat
theywanttouse.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE250

Recommendationsrelatedtogoodfaithefforts.
SomeintervieweesrecommendedtheConsortiummorecloselymonitorDBEutilizationand
goodfaithefforts.[Interviewees#CON:15,16,22,24,26,36,37,40,45,PF#18,20].
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,statedthatmorestringentlyenforcedgoodfaitheffortsruleswouldhelp
withcompliance.Hefeltthisislargelynonexistent.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,thinksthatgoodfaitheffortsshouldonlybeconsideredwhentheeffortsare
madeintherelevantserviceindustryandwithenoughtimeforbidstoactuallybecompleted.
Otherwise,goodfaitheffortsarecompletelymeaningless.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,statedthattheConsortiumshouldbemoreconsistentinitsvisitstoworksites.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,statedthattheConsortiumneedstomonitortheamountofthecontractthat
issupposedtogotoaDBEandthepercentagethatactuallydoes.Shestatedthatprime
contractorsneedtobeheldaccountableandshowthatmoniessetasideforDBEsareactually
usedforDBEs.ShestatedtheConsortiumshouldalsomonitorprimecontractorsuseofbest
efforts.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
statedthattheConsortiumshouldholdprimecontractorsmoreaccountableforusingDBEson
theircontractsthuspreventingthemfromusingDBEstomeetbidrequirementsandthennot
usingthemwhentheyareawardedthecontract.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthattheConsortiumshouldperformanaudittomakesureDBEsare
gettingtheworkthattheyaresupposedtoget.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
recommendedstatedthattheConsortiumshouldmonitorDBEutilizationtoensurethatthe
processisfairandbusinessdealsarenotmadebecauseofrelationships.Hestatedthatthe
Consortiumshouldnotmakesmallbusinessesandfirmsalwayscompromisetogetapieceofthe
pie.Hestatedthattheremustbesomekindofoversighttomakesuretheprocessiswhatitis
intendedtobe.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,statedthattheConsortiumshouldhaveasysteminplacetomonitorthe
worksitesandthebusinessrelationshipbetweentheprimecontractorandtheDBE.Hestated
thattheDBEsshouldnotbedoing25percentoftheworkwhenthecontractonlyreflectsthem
doing10percentofthework.Hestatedthatinordertoavoiddisputeslater,alllevelsshould
meetatthebeginningoftheprojectandcometoanunderstandingsothattheyareallonthe
samepagewhentheprojectbegins.Hestatedthattheagencyshouldstayinvolvedineach
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE251

projectandthereshouldbeamediator.Thisissothatnoonewillsuffer,especiallytheDBE;he
statedthattheDBEcannotrollthroughproblems.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,recommendedthattheConsortiummonitorprimecontractorsand
makesurethattheyareutilizingDBEswhenrequired.ShestatedthattheConsortiumshould
takeintoconsiderationthatDBEsareDBEsforareasonandtheyneedtobegivenan
opportunitytoshowcasetheirabilitiestogivethemtheabilitytograduatefromtheirDBE
status.TheyneedtomakeprimecontractorsusetheDBEs.DBEsshouldbereferredtothe
primecontractorsthatareshortlistedforprojects.[DBEs]needtobeinformedmorethanthree
daysbeforeabidisdue.Theonlyletterstheyreceiveareaboutrenewingtheircertifications,but
nothingmorethanjustthat.Thereisnowaytoensureyougettheworkafteryouaresolicited.
Youwonderif[they]wantedtouseyouinthefirstplaceordidtheyhavesomeoneelseinmind
fromthebeginning.Shestatedthatfirmsarenotbeingcompliant.
PF#18,anindividualrepresentinganAfricanAmericanownedprivateinvestigationsmall
businessprovidedoraltestimonyatapublicforumheldonOctober20,2009.Hisconcernwas
thatminorityownedbusinessesarebeingusedandmanipulatedbyprimecontractorsand
otherstosecurefederalcontracts.Hestatedthatoncethefederalcontractisawarded,thereis
noparticipationormoniesthatflowtotheminoritybusinessthathelpedtheprimelookgoodto
thefederalgovernment.Hesuggestedthatthereneedstobeenforcementtoverifyparticipation
bythesmallbusinessesidentifiedintheprimesproposals.(PublicForumLosAngelesheldon
October20,2009).
PF#20,aHispanicmanrepresentingacertifiedMBE/DBEfirmaswellasanorganizationof
HispaniccontractorsprovidedoraltestimonyatapublicforumheldonOctober21,2009.He
statedthatwhilehehasbeeninthedatabaseasaqualifiedMBE/DBEforfouryears,hisfirmhas
onlybeenselectedforoneprojectduringthattime.Heasked,Howmanycontractshavebeen
awardedtodisadvantagedcompanies?and,WhydoPrimeshavetherighttowaivecontract
goalsforminorityownedbusiness?Hefelttherighttowaivecontractgoalswasanimpediment
tosmallbusinesscontractorssecuringworkwithprimecontractors.(PublicForumSanDiego
heldonOctober21,2009).
L.ParticipationinandAwarenessofRace and
GenderNeutralProgramsorMeasures
BGPAAStudyAnecdotesRegardingParticipationinandAwarenessof
Race andGenderNeutralProgramsorMeasures
Outreachprograms.
Severalintervieweeshadparticipatedinorwereotherwiseawareofrace,ethnic,and
gender neutralprogramsoutreachefforts.[Interviewees#BGP:1,10,15].Interviewee#BGP1,
theAfricanAmericanmaleownerofanMBE/DBEcertifiedarchitecturefirm,statedthatmost
publicagenciesaredoingagreatjobwiththeiroutreach.
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Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthattheMetropolitan
TransportationAuthorityofLosAngelesCounty(Metro)hasthelargestoutreacheffortofwhich
heisawaretohelpfirmsobtainbusiness,andtheU.S.ArmyCorpsofEngineersalsohasa
program.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshewasawareof
outreacheffortstoincreaseparticipationbyMBE/WBE/DBEs.ShesaidthattheLAAirport
justrecently[held]seminarsandopen[ed]upthefloor,so[companiescould]meetallof
thebuyersandobtainalistofprimes.ShesaidthatshethoughtthattheLosAngelesAirport
Authoritywasdoingaverygoodjob.
Severalintervieweeswerenotawareofanyrace,ethnic,orgenderneutralprograms
sponsoredbytheAirportAuthorityaimedatincreasingsmallordisadvantagedbusiness
participationbyincreasingtheiropportunitiesandskills.[Interviewees#BGP:10,11,12,13,
14,15,16,TA#2].IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapterof
theNationalAssociationofMinorityContractors,saidthatheisnotawareoftheAirport
Authorityprovidingoutreacheffortstonotifybusinessesofhowtoobtainworkwiththe
Authority.Hesaidthathe,alongwithseveralotherpeople,metwithBGPAArecentlytohavea
roundtablediscussionabouthowtoobtainworkwiththeAuthority.Hesaid,Priortobegging
andpleadingforthattohappen,itneverwouldhavehappened.Hesaidthattheydiscussed
howtoutilizeoutreachprograms,howtoimplementaccountabilityfor[African]Americansand
ethnicgroupstoparticipateinthistiersubcontracting,andencouragingthemtoholdgeneral
contractorsliableandresponsibleforlistingtheirsubsandutilizingthesubslisted.Hesaidthat
hewassatisfiedwiththeresponseshereceivedfromtheAuthorityatthemeeting.
Someintervieweeswereawareoffinancing,bonding,orinsuranceassistancebeingprovided.
[Interviewees#BGP:4,6,9,10,15,16,TA#1,TA#2].Interviewee#BGP4,aprojectmanagerof
aWBEcertifiedconstructionfirm,saidthatfinancingassistanceisabsolutelyessentialfor
smallbusinesses.
Interviewee#BGP6,thepresidentandmarketingcoordinatorofaWBEcertifiedengineering
firm,saidthattheybelievetheCityofLAoffersassistanceinobtaininginsurance.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmsaidthatbonding,insuranceandfinancingprogramswouldbebeneficialforanyone.
Interviewee#BGP10,aprincipalatanengineeringfirm,saidthatheisawareofprograms
providedoutsideoftheAuthoritytoaidinobtainingbonding,insuranceorfinancing.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatElCaminoattheJunior
College[and]HarborCityCollegeholdclassesallofthetimetoassistsmallbusinessesandto
teachthemhowtoobtainbonding,financing,andinsurance.Shesaidthatinformationis
availableontheCityofL.A.BusinessNetwork.
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Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthathethinksthatthereareprogramsinthecommunitythatassistwithbonding,
insurance,orfinancing.Hesaidthathedidnotknowwhattheywere,buttherestalkofitin
someofthebidsthathavegoneout.Theyofferresourcestohelpwithbonding.
IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatfinance,bonding,andinsuranceassistanceishelpfulforsomepeople.Hesaidthatdespite
assistanceprograms,financing,bondingandinsuranceishardtogetunlessyourpaperwork
lookslike[Caucasian]folkspaperwork.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheisawareofprogramsthatassistbusinesses
withfinancing,bondingandinsurance.HeisnotawareofanyprogramsthroughtheAuthorityto
assistwithbondingandthatwasdiscussedatthemeetinghehadwiththeAirportAuthority.He
saidthatprogramstoassistwithfinancing,bondingandinsurancearebeneficialtosmall
businesses.
Otherintervieweeswerenotawareofanyprogramstoassistfirmswithfinancing,bondingor
insurance.[Interviewees#BGP:12,13].
Someintervieweeswereawareofeducationalprogramsortrainingprogramsbeingmade
availabletobusinesses.[Interviewees#BGP:6,9,13,15].Interviewee#BGP6,thepresident
andmarketingcoordinatorofaWBEcertifiedengineeringfirm,saidthatmostpeopleare
alreadytrainedbutthatprejobsitetrainings,likesafetytrainingsessions,arehelpful.
Interviewee#BGP9,theownerofanoncertifiedHispanicAmericanownedsecurityservices
firmsaidthattrainingprogramswouldhelpallbusinesses.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatABC
(AssociationofBuildersandContractors)offerscontinuingeducationforjourneymen
electriciansaswellassomeofthestaff.Someofthattrainingmightnotbenecessarilytrade
oriented.ItmightbeCPRorOSHAtrainingorsomethinglikethat,butelectriciansare
requiredtoget32hoursoftrainingandhavetorecertifyeverytwoorthreeyears.Hesaid
thatemployeespayfortheirowntraining.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatshewasawareof
educationaltrainingopportunitiesandthatSouthBayRegionalCommunityCenterandadult
schoolsadvertisecoursesonhowtostartyourownbusiness,[keep]yourbooks,Quickenfor
business,thatsortofthing.
Streamlinebidding.
SomeintervieweesreportedawarenessofeffortsbytheAirportAuthoritytostreamlinethe
biddingprocess.[Interviewees#BGP:12,16].Interviewee#BGP12,ageneralmanagerandan
accountmanagerofaWBE/DBEcertifiedconstructionsupplyfirm,statedthattheywereaware
ofeffortstosimplifyorstreamlinethebiddingprocesswithairportauthoritiesandsaidthat
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE254

ERSPhasareallyneatprogramthat[LosAngeles]justimplementedlastmonth.Theysaidthat
theprogramallowscompaniestosubscribeandthensendssubscribersemails,sometimestoo
many,butthatsfine,withinformationregardingitemsthattheyhavecomingupforbid
throughouttheirentireagency.Thethingthatmakesituniqueishowquicklythe
communicationhappensbecausetheagencyprovidesanemailaddressandatelephone
number,andtheyrevery,verygood,atleastatthispoint,ingettingbacktoyou.Theyre
terrific.Ifyoucallthemand[leavethemavoicemail],theyllcallbackusuallywithinthehour.
Oftentimes,someonepicksupthephone,anditswhoyourelookingfor.Itsexcellentsofar.Its
onlyamonthold.
Interviewee#BGP16,amanagerofanoncertifiedengineeringandinformationtechnologyfirm,
reportedthattheAuthorityhasmadeeffortstostreamlineorsimplifythebiddingprocessinthe
past,andhiscompanyactuallyassistedBGPAAinitsefforts.
MostintervieweesreportednoawarenessoforexperiencewithAirportAuthorityeffortsto
streamlinethebiddingprocess.[Interviewees#BGP:10,11,13,14,15,TA#2].Interviewee
#BGP10,aprincipalatanengineeringfirm,saidthatheisunawareofeffortsbytheAuthorityto
simplifyorstreamlinethebiddingprocess,buthesaidthathedoesthinkthatstreamliningthe
processwouldbebeneficial.Hesaidthatagenciesshouldalwayshaveapagelimitforproposals
between10and30pagessothatproposersandagencypersonneldonotuseexcessiveamounts
oftimepreparingandreadingtheproposals.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthathewasunawareofanyeffortsbytheAuthoritytosimplifyorstreamlinethe
biddingprocess.Hesaidthatwhethersimplifyingorstreamliningtheprocesswouldbe
beneficialwoulddependupontheprovisionsthattheyrestreamliningandwhatisleftafter
BGPAAeliminatessomeoftheexcess.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,reportedthatheisunaware
ofeffortsbytheAuthoritytostreamlineorsimplifyitsbiddingprocess,buthesaidthatsome
thingshavebeenstreamlinedindustrywideovertheyearswiththeuseofcomputersandthe
internet.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thathewasnotawareofanyeffortbytheAuthoritytosimplifyitsbiddingprocess.Hesaidthat
itmaytakethecompanyamonthtoputabidtogetherforLAX,andthatsfivepeoplehere
workingonitasmuchastheycan.[Toprepareabidfor]BurbankAirport,onepersoncan
handletheprojectandputtingittogether.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatsheisunawareofBGPAA
oranyotherairportauthoritiesmakinganefforttostreamlinethebiddingprocessbecause
everythingisoncallnow,anditsprequalifiedoncall.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE255

Unbundlecontracts.
Someintervieweesreportedknowledgeofeffortsbypublicagenciestounbundlelarge
contractstomakethemmoreaccessibletosmallbusinesses.[Interviewees#BGP:13,15,16,
TA#2].Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthathethinks
thatBGPAAhaspursuedeffortstounbundlelargecontractsinthepastwhereaprojectmight
behardforonecontractortobondtomakeitamorefundableproject.Hesaidthat
unbundlingtheprojectsmakestheworkalittlebitmoreaccessible.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,saidthatshewasawareofefforts
tounbundlelargecontracts.ShesaidthattheCaliforniaHighSpeedRail[is]tryingtofigure
outhowtheyregoingtobebundlingthings.Shesaidthattheyareconsideringbundlingplans
thatwouldcreateopportunityforsmallbusinessestosubmitbids.
IntervieweeBGPTA#2,thepresidentoftheSouthernCaliforniaChapteroftheNational
AssociationofMinorityContractors,saidthatheisnotawareofanyeffortbytheAuthorityto
unbundlelargeprojects.Hesaidthatheisawareofotherpublicagenciesunbundlinglarger
projectstomakethemmoreaccessibletosmallbusinesses.Hesaidthatunbundlinglarge
projectswouldbebeneficialtoitsmembers.
Mostintervieweesreportedhavingnoknowledgeoforexperiencewitheffortsbypublic
agenciestounbundlelargecontractstomakethemmoreaccessibletosmallbusinesses.
[Interviewees#BGP:10,11,12,14].Interviewee#BGP12,ageneralmanagerandanaccount
managerofaWBE/DBEcertifiedconstructionsupplyfirm,saidthattheywereunawareofan
effortbyanypublicagenciestounbundlelargeprojectsanddonotnecessarilythinkthatsuch
effortswouldbebeneficialtosmallbusinesses.
Segmentlargercontractsintosmallercontracts.
SomeintervieweesreportedknowledgeofAirportAuthorityorotherpublicagencyeffortsto
segmentlargercontractsintosmallerones.[Interviewees#BGP:10,14,TA#1].Interviewee
#BGP10,aprincipalatanengineeringfirm,saidthatsomepublicagenciessegmentlarger
projectsintosmallerones,andthisisgoodtokeeptheagenciesfromgettingtootiedtoany
individualfirm.Hestatedthatprojectsshouldnotbebrokenupintopiecesthataretoosmall
becausethatwouldcausetheagencytoomuchhasslewithadministrativecosts.Hesaidthata
largeprojectmayeffectivelybesplitintoacoupleofprojects.Interviewee#10reportedthathe
isnotawareoftheAuthorityhavingwhathewouldconsiderlargerprojectsthatwouldbe
segmented.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thattheAuthoritywillsegmentoutthecontractstosomeextentbecausetheyareabletodoa
lotoftheworkinhouse.Hesaid,thelesstheydoinhouse[themorethey]relyonprimesto
handlemoreofthosethings.
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IntervieweeBGPTA#1,theexecutivedirectoroftheYoungBlackContractorsAssociation,said
thatbreakinguplargecontractsintosmallerpiecesisagreatthing,butevenwhentheybreak
themupthebiggerguysstillgetcontrolofthem;theystillgetit.
MostintervieweesreportedhavingnoknowledgeoforexperiencewithAirportAuthority
effortstosegmentlargercontractsintosmallerones.[Interviewees#BGP:11,12,13,15,16,
TA#2].Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthathewasunawareofanyeffortsbytheAuthoritytosegmentlargercontracts
intosmallercontracts,buthethoughtthatsucheffortswouldbehelpful.Hesaidthatan
opposingefforttomakeprojectsmorecondensedandlargerseemedtobeunderwayattheLos
AngelesAirport.
Priceorevaluationpreferencesforsmallbusinesses.
Someintervieweesreportedawarenessofpriceorevaluationpreferencesforsmall
businesses.[Interviewees#BGP:2,4,5,15].Interviewee#BGP2,thesalesmanagerofanAsian
AmericanownedMBE/WBE/DBEcertifiedmaintenanceandrepairfirm,saidthatpriceand
evaluationpreferencesforsmallbusinessesareuseful.Hesaid,Weusuallygeta5percent
preferenceforbeingasmallbusiness,butitcouldbemore.
Interviewee#BGP15,theownerofaHispanicAmericanwomanownedMBE/WBE/DBE
certifiedengineeringandconstructionsupportservicesfirm,statedthatsheisawareofsome
priceorevaluationpreferencesforsmallbusinesses.ShesaidthattheCityofL.A.[has]local
agencies[thatwill]giveyoulikeapercentage.
Mostintervieweesreportednoknowledgeoforexperiencewithpriceorevaluation
preferencesforsmallbusinesses.[Interviewees#BGP:10,11,12,13,14,16,TA#2].
Interviewee#BGP10,aprincipalatanengineeringfirm,reportedthatheisnotgenerallyaware
ofanypriceorevaluationpreferencesforsmallbusinessesonprojects.HestatedthatCalifornia
hasasmallbusiness5percentpreference,buthesaidthatthatreallyappliestosupplyinggoods
andcontractingservices,andthefirmdoesnotbenefitfromthat.
Monitorutilization.
MostintervieweesreportednoawarenessofAirportAuthorityeffortstomonitor
MBE/WBE/DBEutilizationthroughoutaproject.[Interviewees#BGP:10,11,13,14,TA#2].
Interviewee#BGP10,aprincipalatanengineeringfirm,saidthatheisnotawareofmonitoring
MBE/WBE/DBEutilizationbytheAuthorityonajobsite,buthesaidthathethinksthatthe
primeisrequiredtoinformBGPAAofhowmuchoftheirfeewenttoutilizingsuchfirmssothat
theAuthoritycanusefederalfunding.
Interviewee#BGP11,amanagerofanAsianmaleownedDBEcertifiedcleaningservices
company,saidthatheneverwitnessedofficialsfromBGPAAorfromtheLosAngelesAirport
visitingaworksitetomonitortheMBEorDBEutilizationonaproject.
Interviewee#BGP13,theownerofanoncertifiedconstructionfirm,saidthatheisnotawareof
anycomplianceeffortsormonitoringbytheAuthority.Hesaidthatingeneral,notjustatthe
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE257

Authority,[t]he[only]placeIeverseeitismaybeinabidinvitation.Hesaidthatheusually
onlyseesitinthepublicsectorduringprequalificationswhenhemaybeaskedifthecompany
hasanyparticularcertification.
Interviewee#BGP14,amanagerofanMBE/WBEcertifiedequipmentsupplierandinstaller,said
thathewasunawareoftheAuthorityvisitingworksitestomonitorMBE/WBEorDBE
utilizationbutdidknowthattheywouldvisitsitestomonitorhowtheprojectisgoing.
OneintervieweereportedawarenessofAirportAuthorityeffortstomonitorMBE/WBE/DBE
utilizationonworksites.[Interviewee#BGP:16].Interviewee#BGP16,amanagerofanon
certifiedengineeringandinformationtechnologyfirm,reportedthateithertheAuthorityor
somebodythatworkswiththemmonitorsMBE/WBE/DBEutilizationonjobsites.
SDCRAAAnecdotesRegardingParticipationinandAwarenessofRaceand
GenderNeutralProgramsorMeasures
Thefollowinganecdotesregardingparticipationinandawarenessofrace,ethnic,andgender
neutralprogramsormeasureswereobtainedfrominterviewsthatthestudyteamconductedin
connectionwithBBCs2009SDRCAAstudy.
Outreachprograms.
Manyintervieweeshadpositiveorneutralopinionsaboutpublicagencieshostingoutreach
programs.Interviewee#SD20,representinganAsianAmericanmaleownedfirm,statedthat
agencyoutreachprogramsareveryusefulforminorityandfemaleownedfirms.Hewentonto
sayandthattheAirportdoesagoodjobwithsuchprograms.Interviewee#SD21,representinga
whitemaleownedfirm,saidthathebelievesthatagencyoutreachprogramsarehelpfultosmall
firms(includingMBEs/WBEs).
Interviewee#SD25,representingawhitemaleownedfirm,saidthatnetworkingopportunities
arecrucialforsmallfirmsinordertoestablishthemselves.Hewentontosaythatthe
networkingeventsthattheAirporthashostedhavebeenveryuseful.
Interviewee#SD28,representingawhitefemaleownedfirm,indicatedthatshethinksthat
outreachprogramsareoneofthemosteffectiveremediesthatagenciescanimplement.Shesaid
thatitgivessmallfirmsanopportunitytonetworkwithandlearnaboutprimecontractorsinthe
areaandviceversa.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,indicatedthathe
supportsagencyoutreachevents,particularlyiftheprimecontractorsthatareinvitedtothose
eventshaveaproventrackrecordofactuallyusing[MBE/WBE]firms.
Interviewee#SD31,representingawhitemaleownedfirm,indicatedthatoutreacheventsare
quitebeneficialtosmallfirmsthataretryingtodeveloprelationshipsandmakecontactswith
publicagenciesandprimecontractors:Itsallaboutaccess,andanythingthatgivesmeaccess
[tothedecisionmakers]isgood.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE258

Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthattheSmallBusiness
Administrationhashelpfulprogramsinplaceforsmallbusinesses,particularlyasitrelatesto
learningaboutwork:[AsaresultoftheSBAsefforts]weseealotofthejobsthatmaybewe
wouldntseethroughEBidboardorBluebookandtheyresmall,morelocaljobs.Andwhat
theylldomaybetwoorthreetimesaweeksometimestheyllsendusemailsjust[listing]
allthesmalljobsandrequestingsubs.
SDTA#3,representingalocalchamberofcommerce,indicatedthatoutreacheventsarevery
helpfulforMBEandWBEfirms,andthatsheisawareoftheSanDiegoInternationalAirport
havinghostedsucheventsinthepast.Shesaidthatifpublicagenciesinformedherorganization
aboutoutreachevents,thenherorganizationwoulddisseminatethatinformationtoits
members:Iftheyletusknow,wellemail[thatinformation]out.
SDTA#11,representingaveteranstradeorganization,saidthatagencyoutreachisveryusefulin
helpingdisadvantagedfirmsandindicatedthattheAirportisdoingitspartinhostingsuch
events:TheAirportistheonlyonetryingtodoanything.Hecontinued,Thepeoplerunning
theAirportandtheoutreachprogramsarewantingtohelp.
SDTA#7,representingaconstructiontradeorganization,statedthattheAirportdoesagoodjob
withitsoutreachprograms.Heexplainedthatsuchprogramsalloweveryonetoseewhats
availableandwhatkindofprojectitisandwhatkindofsubcontractingopportunitiestherewill
be.Headdedthatadvancenoticeaboutprojectsdoesnotsubstantiallyhelpcontractorsinthe
publicsectorbutdoeshelpintheprivatesector.
SDTA#6,representinganAsianAmericantradeorganization,indicatedthatoutreachprograms
wouldbeveryhelpfulforsmallfirms(includingMBEs/WBEs).Shewentontolistanumberof
thingsthatanagencyshoulddoinordertohaveasuccessfuloutreachprogram,including:
informingorganizationsaboutthetypesofprojectsforwhichtheyneedvendors,identifyways
inwhichtheycanbetterassistsmallfirms,andhostaneventforsmallfirmstoinformthem
aboutwhatprojectsareavailable.
SDTA#4,representingalocalchamberofcommerce,statedthatinformationalworkshopsare
someofthemostusefultoolstoincreaseawarenessofcontractingopportunities.Shesaidthat
shewouldliketoseerepresentativesfromtheAirportattendthoseworkshopstoprovide
insighttopotentialbidders.
SDTA#2,representingaHispanicAmericantradeorganization,indicatedthathisorganization
hasenteredintoagreementswithvariouspublicagenciestohostoutreachevents.Thoseevents
areintendedtoincreasecontractingopportunitiesforsmallandemergingfirms.
SDTA#13,aretiredofficialfromalocalpublicagency,indicatedthatoutreachworkshopsatthe
Airportaresomeofthemosteffectiveremedialprogramsforsmallfirms(includingMBE/WBE
firms).
SDTA#9,representingapublicworkstradeorganization,discussedlocalpublicagencies
outreacheventsforsmallanddisadvantagedbusinesses.Overall,heindicatedthatwhereas
someoutreacheffortsaredisappointing,othershavebeenquiteeffective:Thebest[agency
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE259

outreachevents]giveaccesstodecisionmakers,andtheonesthatdontwork[have]oneper
yearandnofollowupinformation.Unsuccessfuleffortsincludeconnectingbusinesseswith
thosewhodonthave[the]abilitytomakedecisions.Hewentontodiscussagencyoutreach
programsthataresuccessful,includingtheAirports:TheAirportisworkinghard.We
submittedthemforanawardforsupplierdevelopmentawardforoutreachCaltransisgood.
TheyhavebuyersonthespotattheiroutreacheventsTheNavyhasagoodoutreachprogram.
Theyholdquarterlyeventswithsmallbusinessestomakepresentationsandbuyerscomethat
day.
Otherintervieweeshadnegativeopinionsaboutpublicagencieshostingoutreachprograms.
Interviewee#SD2,representingawhitefemaleownedfirm,indicatedthatoutreachprograms
arenotveryeffective:Thereisnotanysubstancetooutreachevents.Shesaidthatlocal
agenciesshouldlistalloftheiravailablecontractsinone,centralizedlocation:Thereneedsto
beaclearinghouse.
Consistentwiththosecomments,SDTA#9,representingapublicworkstradeorganization,said,
Nomatterhowgoodtheagencyis,itishardforsubsandsmallbusinessestogetallinformation
andopportunitiesfromthem.Hesaidthathewouldlikehisorganizationandother,similar
organizationstoactasaclearinghouseforpublicagenciestomakeiteasierforlocalsmall
businesstolearnaboutavailablework.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,saidthathehas
attendedanumberofeventshostedbydifferentpublicagenciesandbelievesthattheyarenot
effective,becausewithoutmandatorygoalsagenciesareonlyconcernedwithfindingthelow
biddernetworkingcannotchangethat.
Interviewee#SD34,representingawhitemaleownedfirm,indicatedthathedoesnotconsider
agencyoutreachasimportanttothesuccessofhisfirm:[Agencyoutreach]doesntmatterits
nothowIgetbusiness.
Interviewee#SD43,representingaHispanicmaleownedfirm,reportedthatshehasattended
outreacheventsattheAirportandthattheAirportstaffprovidedagreatdealofinformation,but
thattheywerenotveryhelpfulonanindividualbasis:Forexample,theyhaddifferentpeople
speakingaboutdifferentthingsallatonetime.Buttheydidntgiveyouenoughinformationas
towhereyoufeltlikeyoucanactuallybepartofitorgetstarted.Itwasjustgeneral
informationaboutdifferentsubjects.
Interviewee#SD43wentontosaythatshehasnoticedthatmostofthepeopleattendingthe
Airportseventsknoweachother.Thatis,theprimecontractorsthatattendtheeventsseemto
havedevelopedrelationshipswiththeAirportstaff.
Interviewee#SD46,representinganAfricanAmericanmaleownedfirm,indicatedthatoutreach
eventsdonothelpMBE/WBEfirmsgetcontracts:[Outreachevents]lookgoodontheoutside,
butactuallygainingaprojectfromthose[thepotential]isnil.Hecontinued,Thebadpartis
thatifyouhaveabusinessstartingout,orabusinessthatistryingtomaintain,theyarehopeful
whentheyattendthosegatherings,butitsalotoftalk,itsalotofhype.Youdontevenhear
backfromthosevendors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE260

SDTA#1,representingalocalchamberofcommerce,saidthatoutreachprogramscouldbe
effectiveinprinciple,butinpracticethemarketingofthoseeventshavebeenquitepoor.Hesaid,
Myimpressionwouldbethatturnoutwouldberelativelylow[forsuchevents].Hewentonto
saythatagenciesneedtomakesurethattheygettheattentionofthosecompaniesthatwould
mostbenefitfromoutreachprograms,andtrytoensurethatthosecompaniesattendtheevents.
SDTA#10,representingasuppliertradeorganization,statedthatpublicagenciesaretoo
focusedonoutreachandnotfocusedenoughontangibleresults.
Educational,training,andtechnicalskillsprograms.
Severalintervieweeshadpositiveorneutralopinionsabouteducational,training,and
technicalskillsprogramsaimedatsmallfirms.Interviewee#SD21,representingawhitemale
ownedfirm,statedthattechnicalassistanceprogramsareveryhelpfultominorityandfemale
ownedfirms.However,hewouldliketoseeunionsexpandtheirtraininghorizons.Thatis,he
believesthatunionsshouldestablishbroadertrainingprogramsfortheirmembersratherthan
leavingituptoindividualagencies.
Interviewee#SD5,representinganAfricanAmericanmaleownedfirm,statedthatalarge
constructionfirmhostsa14weektrainingseminarattheAirportthathedescribedasbeing
veryhelpful.Inaddition,Interviewee#SD5attendsseminarswithvariouspublicagenciesto
gatherinformationanddeveloprelationshipswithmembersofthecertificationandbonding
communities.
Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,indicatedthattechnical
assistanceprogramswouldbehelpfulforfirmsthatarejuststartingout,particularlyinmaking
newcontacts.Hewentontosaythatonthejobtrainingprogramswouldalsobehelpfulfor
thosefirms,butthatsuchprogramsarenotverypracticalinthecurrenteconomy.
Interviewee#SD19,representingawhitemaleownedfirm,indicatedthatalthoughtechnical
assistanceprogramswouldnothelpherfirm(becauseitiswellestablishedandshehasagreat
dealofexperience),theywouldbeparticularlyusefulforlessestablishedfirms:Ifyouarejust
startingout,thismightbegood.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,saidthatherfirmprovidesitssubtenantswithsupportinmanydifferentareas,
including:recruitment,airportbadging,obtainingcontractorinformation,warehousediscounts,
rentreminders,andmerchandisingandbusinessconceptconsultation.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,reportedthatthemasterconcessionaireattheAirportprovidestrainingandsupportfor
theirsubtenants.ShehasalsoreceivedtechnicalassistancefromtheSBArelatedtofinanceand
understandingfinancialstatements,marketing,andwebsitedevelopment.Shewentontosay
thatherfirmalsoreceivesagreatdealofinformationfromtheAirportMinorityAdvisory
Council(AMAC),includingnewslettersandinformationoncoursesthattheyoffer.
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Interviewee#SD33,representingaHispanicAmericanmaleownedfirm,indicatedthattechnical
assistanceisnecessaryforsmallfirms,becausetheymayfindcontractingspecificationsand
proceduresoverwhelming.Hesaid,If[publicagencies]breakitdownandwalkthroughit,itis
helpful.
Interviewee#SD40,representingawhitemaleownedfirm,reportedthathisfirmoffersfree
classestosmallfirmsthatteachthemabroadrangeofbusinessskills,includingscheduling,
bidding,andprojectmanagement.
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,statedthattechnical
assistanceandtrainingprogramsarevitaltothesuccessofsmallfirms,becausetheycannot
affordinternaltrainingprograms:Peopledonthaveanymoneyfortraining.
SDTA#1,representingalocalchamberofcommerce,indicatedthathesupportstheideaof
technicalassistanceprogramsandonthejobtrainingprograms,butexpressedconcernabout
firmsactuallyattendingthem.HealsosaidthatheisunawareofpublicagenciesinSanDiego
implementingsuchprograms.
SDTA#7,representingaconstructiontradeorganization,saidthathisorganizationhosts
constructiontrainingclassesthatmembersandnonmembersarewelcometoattend.Hesaid,I
thinkwearethemaintrainingfacilityforthisareaandprobablypartofLAtoo.
SDTA#10,representingasuppliertradeorganization,statedthatheandhisstaffspendatleast
25percentoftheirtimeprovidingtechnicalassistancetosuppliers.
Otherintervieweeshadnegativeopinionsabouteducational,training,andtechnicalskills
programsaimedatsmallfirms.Interviewee#SD2,representingawhitefemaleownedfirm,
reportedthatpublicagenciesspendalotofmoneyontechnicalassistance,butmostofthat
assistanceisataverybasiclevel.Shesaidthatclassesatthatlevelcanhurtsmallfirmsmore
thantheycanhelp.Shesaidthattechnicalprogramscanbeimprovedifactualcontractorsthat
doactualworkteachtheclasses.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,saidthatthereistoomuchemphasisonteaching:Someoftheteachingandassistance
isgood,butatsomepointwehavetosetoutandplay.Interviewee#SD12reportedthathe
wouldliketoseemorepracticalassistanceprogramsinplace:Imnotlookingforacademic
help.Imlookingforrubbertomeettheroad,resultsorientedassistance.
SDTA#10,representingasuppliertradeorganization,reportedthatnotalltechnicalprograms
areuseful:Therearetonsoftechnicalassistanceprograms,butnotallaregoodoruseful.He
wentontosaythatpublicagenciesdonotdoagoodjobofidentifyingtheusefulprogramsand
eliminatingthebadones:Thereseemstobeawillingnesstosimplyperpetuatetheprograms
withafocusonsystemsandprocesses,butwithnoattentiongiventothebottomlineora
return.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE262

Interviewee#SD20,representinganAsianAmericanmaleownedfirm,saidabouthisownfirm:
Wedontreallyneed[technicalassistance].Healsoindicatedthattechnicalassistance
programswouldbeagreatdealofworkforpublicagencies,renderingthemimpractical.
Interviewee#SD10,representinganAfricanAmericanmaleownedfirm,statedthatthe
resourcesspentontechnicalassistanceprogramsarebetterspentinotherareas:Iamtoojaded
inthisindustryandthiscitytothinkthattechnicalassistanceworks.IneedhelpmakingsureI
amgettingtheworkthatispromisedtome.
SDTA#11,representingaveteranstradeorganization,indicatedthathedidnotthinkthat
technicalassistanceprogramswereparticularlyuseful.OnepitfallthatSDTA#11pointedout
aboutthoseprogramswasthattheyweretooshorttobeproductive,Whenyouregoingtotalk
aboutbonding,dontgiveita15minutetimeframe.Healsosaidthathewouldpreferif
agenciesspenttimeeducatingtheirownprocurementpeopleontheneedsoflocalsmall
businesses.
SDTA#5,representingagovernmentadvisorycommissiononminorityissues,reportedthatshe
considersaparticulartradeassociationsmentoringprogramtobeacompletefailure:The
mentoringprogramisafailureIbelieve.Itisnicethattheyhaveit,butwhenyouhavea
programthatissevenyearsoldandgraduatedonlyfourpeopleIdontknowhowyouconsider
thatasuccess.
Assistancewithfinancing,bonding,andinsurance.
Manyintervieweeshadpositiveorneutralopinionsaboutprogramsaimedatassistingsmall
firmswithfinancing,bonding,andinsurance.Interviewee#SD14,representingaHispanic
Americanmaleownedfirm,saidthatfinanceandbondingprogramswouldbeveryusefulfor
MBEandWBEfirms,particularlyforsmallfirmsthatarenotwellestablished.However,he
indicatedthathehasneverheardofanysuchprogramsbeingimplementedinSanDiegoand
wouldnotknowhowtogetinformationaboutthem.
Interviewee#SD21,representingawhitemaleownedfirm,indicatedthatprogramsaimedat
providingfinancingandbondingassistancewouldbeveryhelpfultoMBE/WBEfirms.Hesaid
thatheisawareofabondguaranteeprogramthroughtheSmallBusinessAssociation(SBA),but
didnotshareanyopinionsaboutit.Henotedthatbondwaiversarenotareasonableexpectation
forpublicagencywork.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,indicatedthatfinancing
andbondingprogramswoulddefinitelyhelpsmallfirms(includingMBE/WBEfirms).With
regardtofinancing,Interviewee#SD20saidthathewouldalsoliketoseesomesortofprogram
orpolicybywhichtheprimecontractorisrequiredtopayitssubcontractorsinatimelyfashion.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,reportedthatthatheis
participatinginabondingclassthroughtheAirport.Heindicatedthattheclasshasbeenvery
helpfultohisfirmandisoptimisticaboutitspositiveimpactonthepubliccontracting
community.Consistentwiththosecomments,SDTA#2,representingaHispanicAmericantrade
organization,remarked,Iheargoodthingsabouttheairportsbondingprogram.
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Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,reportedthatfinancial
assistancewouldbeveryhelpfultosmallfirms,includingMBE/WBEfirms.Regardingthe
importanceofafirmhavingitsfinancesinorder,hesaid,Alargefirmparticularlyinthe
publicsectorwantstoseethatyouarehandlingyourfinancialsproperly.Hewentonto
suggestthatpublicagenciesshouldhelpsmallfirmsbylendingthemmoneyupfrontforstartup
costsonprojects.
Interviewee#SD31,representingawhitemaleownedfirm,saidthatbondingisabsolutelythe
biggesthurdlethatfirmsfaceinconstructionandanyprogramsthathelpfirmswithbonding
wouldbebeneficial.Specifically,heindicatedhispreferenceforbondwaiversratherthanbond
guarantees:Bondwaiversarebetterthanbondguarantees,becauseintheendyoustillhaveto
findsomeonetoputupthemoney[withbondguarantees].
Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,saidthattrade
associations,particularlythoserepresentingminorityandfemaleownedfirms,shouldspend
moretimedevelopingrelationshipswithfinancialinstitutionsandsuretycompaniesonbehalfof
theirmembers:Insteadofformingallianceswithpeoplewhodontmeanminoritycontractors
anygood,[tradeassociationsshould]formthoseallianceswithsuretycompanies,insurance
companies,CPAs,accountantsandbookkeepers.
Interviewee#SD47wentontosaythatcurrentbondingprogramscanbehelpfulbutare
inaccessibletomostofthefirmsthatneedthem:IhadtogoallthewaytoWashington[toget
bondingassistancetheaveragepersonwillgiveupIthink[financeandbondingprograms]
aredesignedthatway.
SDTA#8,representinganelectricalworkerstradeorganization,indicatedthattheSanDiego
Airportsbondingprogramisawonderfulprogram.Shesaidthatbondingisoneofthebiggest
obstaclesforsmallfirmsthatarenotwellestablished.Shealsosaidthatherorganizations
membersvaluetheAirportsbondingprogramtheybelievethatitsignificantlyhelpstheir
employees.
SDTA#6,representinganAsianAmericantradeorganization,reportedthatitwouldbe
particularlyhelpfuliftheSanDiegoAirportdevelopedprogramstoassistsmallfirmswith
bonding.Shewentontosaythatherorganizationwouldliketoprovidememberswithbonding
assistance,butthattheycurrentlydonothavethecapacitytodoso.
SDTA#11,representingaveteranstradeorganization,indicatedthatprogramsaimedat
assistingsmallfirmswithfinancingandbondingareworthwhileprograms.Henotedthatsome
bondingassistanceiscurrentlyavailableforsmallfirmsthroughtheSmallBusiness
Administration,butthatmanyfirmsarenotawareofit.Hesaidthatforfinancingandbonding
programstobeeffective,financialinstitutionsanddisadvantagedbusinessesneedtobe
educatedonthem.
SDTA#3,representingalocalchamberofcommerce,indicatedthatfinancingprogramswould
certainlybeusefultominorityandfemaleownedfirms,particularlygiventhecurrentstateof
theeconomyandhowdifficultfinancingcanbeforanewbusiness.Shesaid,Thefirstthree
yearswhenyoustartabusiness[are]yourmostdifficult.Shesaidfinanceprogramswould
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE264

encouragebusinessestoopenandtocompete.SDTA#3indicatedthatbondingassistancewould
alsobebeneficialtoMBE/WBEfirms.
SDTA#7,representingaconstructiontradeorganization,saidthatfinancingassistancewould
certainlybehelpfulforsmallfirms(includingMBE/WBEfirms),butthathedoesnotthinkthat
bankswouldagreetosucharrangements,becausetheydontcarewhatcolor[thecontractors
are]theyjustlookatthenumbers.
SDTA#1,representingalocalchamberofcommerce,statedthatbothfinancingandbonding
assistancewouldbeveryhelpfultominorityandfemaleownedfirmsaswellastoothersmall
firmsinSanDiego.
Interviewee#SD9,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,saidthatshelearnsaboutinsurancepoliciesandreceivestrainingonobtainingloans
throughvariousACDBEconferencesaswellasthroughtheSmallBusinessAssociation(SBA).
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,reportedthatherfirmusedtoofferafinancingprogramthatmadeiteasierforits
subtenantstoobtainloans,butthattheprogramnolongerexists.
OneIntervieweereportedthattheSBAsbondingprogramisnothelpful.Interviewee#SD2,
representingawhitefemaleownedfirm,indicatedthattheSBAsbondingassistanceisnotvery
usefulforsmallfirms:Whenaskedwhynot,shereplied,ThereissomuchBStoit.
Simplificationandstreamliningofthebidprocess.
Afewintervieweesreportedthattheywouldliketoseepublicagenciessimplifyand
streamlinetheirbidprocesses.Interviewee#SD28,representingawhitefemaleownedfirm,
indicatedthatchangesinbidprocedureswouldhelpallfirms,notjustsmallfirmsorDBEfirms.
HethinksthatpublicagenciesinSanDiegoneedtoworktogethertomaketheirbidprocedures
moreconsistentanduniform.
Similarly,Interviewee#SD31,representingawhitemaleownedfirm,saidthatinprinciple
streamliningbidprocedureswouldbehelpful,butitwouldbedifficulttodoinpracticebecause
everyagencys[bid]proceduresaredifferent.Interviewee#SD31saidthatitwouldbehelpful
tomakebidproceduresuniformacrossagenciesiftheywereputtogetherbycompetent
people.
SDTA#11,representingaveteranstradeorganization,saidthattherewastoomuchpaperwork
andhassleassociatedwithbiddingonpublicsectorprojects,particularlywiththeSanDiego
Airport.Heindicatedthathesupportedmeasurestosimplifythebidprocess.
SDTA#1,representingalocalchamberofcommerce,indicatedthatstreamliningthebidprocess
wouldbeveryusefulinhelpingfirmsbetterunderstandavailablebidopportunities.Similarly,
Interviewee#SD21,representingawhitemaleownedfirm,saidthatstreamliningthebid
processwouldbeveryhelpfultominorityandfemaleownedfirms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE265

Otherintervieweesexpressedconcernsabouthowbidprocesseswouldbesimplifiedand
whetheritwouldbebeneficial.Interviewee#SD14,representingaHispanicAmericanmale
ownedfirm,indicatedthathedoesnotwanttoseeanychangesinbidprocedures:Ithinkyou
havetokeepthebiddingproceduresliketheyare.Hesaidthathebelievesthatthebidprocess
asitisensuresthatavailablecontractsgotoqualifiedcontractors.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,indicatedthathewould
behesitanttosimplifybidprocedures.Hewouldratherseemoreoutreachandtrainingrelated
tobidproceduresratherthanseeingthemchangeinanyway.Hewentontosaythatthathe
wouldlikeseeagenciesestimatingproceduresbecomemoretransparenttobidders:One
processIwouldliketoseechangedistheengineersestimate.Ireallydontthinkits
accurate,andIthinkithandcuffstheprimefromthegetgo.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,saidthatstreamlining
bidprocedurescouldbeproblematic,becausecertainaspectsofthemarenecessarytoensure
thatthebestcontractorswinprojects:Ithinkcertainrequirementsarenecessaryinorderto
[separate]thegoodcontractorsfromthebadcontractors.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,statedthat,intheory,
streamlinedbidprocedureswouldhelpsmall,lessestablishedfirms,buthethinksthatall
aspectsofthecurrentbidprocessseemsnecessary.Heexpressedconcernsaboutwhatthe
agencieswouldeliminate.
SDTA#3,representingalocalchamberofcommerce,reportedthatshepreferredthatpublic
agenciesprovidemoreinformationtopotentialbiddersaboutthecurrentbidproceduresrather
thanchangethoseproceduresinanyway.
Segmentinglargercontractsintosmallercontracts.
Manyintervieweesreportedthatsegmentinglargecontractsintosmallerpieceswouldhelp
smallerfirms.Interviewee#SD2,representingawhitefemaleownedfirm,reportedthat
breakingcontractsdownintosmallerpiecesisimportanttohelpingminorityandfemale
ownedfirms:Breakingupjobswouldbeagoodthing.Shewentontosaythathavinglarge
contractsdoesnotsavepublicagenciesmoney,asmanyofthemthink:Youpaysomuchfor
differentlevelsofconstructionmanagers[onlargecontracts].Youalsogetmorecompetition
withsmallerjobs.Interviewee#SD2saidthatalthoughmanylocalfirmsprefersmaller
contracts,publiccontractsappeartobegettinglarger.
Consistentwiththosecomments,Interviewee#SD21,representingawhitemaleownedfirm,
reportedthatalthoughbreakingupcontractswouldbehelpfultosmallfirms(including
MBE/WBEs),theSanDiegoAirporthasbeenmovingawayfromthatmeasure.Hesaid,The
Airporthasgonejusttheoppositeway[recently].Theyvebeenlumping[contracts]together.
Interviewee#SD20,representinganAsianAmericanmaleownedfirm,agreedthatbreakingup
largecontractsintosmallerpieceswouldhelpminorityandfemaleownedfirms:Thatwould
help[DBEsandsmallfirms].
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Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthatbreaking
uplargecontractswouldgreatlyhelphisfirm:Letsputitlikethis,babiescanteatmeat,right?
Wellbusinesseslikeminecanttakemilliondollarcontracts.Hesaidthatthemainissuefor
smallfirmsisthattheylackthecapitaltotakeonbiggerprojects.
Interviewee#SD9,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,saidthatbreakinguplargecontractsintosmallerpieceshashelpedMBE/WBEfirmsat
otherairports.Itallowedsmallfirmstobidoncontractsdirectly,increasingcompetitionand
opportunity.
Interviewee#SD28,representingawhitefemaleownedfirm,reportedthatsegmentinglarge
contractsintosmallerpieceswouldhelpbothprimecontractorsandsubcontractorsinSan
Diego:TheAirportwasgoingtohavecontractsinbigunits,andthatwouldhavemeant
companiesfromoutofstatethatwerespecializedin[thattypeofwork]wouldbecominginto
dothem,anditwouldhavebeenlessworkforthepeoplehereinSanDiego,but[theAirport]
broke[thecontractsapart].
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,saidthatwithouta
doubtpublicagenciesshouldbreakuplargecontractsintosmallerpiecestomakethem
accessibletosmallfirms.Hegavetheexampleofanewfederalcourthousethatisgoingupinthe
city:Itseasily$10millionjusttheelectricalbuttheywouldlistthat$10millionjobasa
smallbusiness[opportunity].ComeonnowIthinkthey[must]lookatmeasatinybusiness,
notasmallbusiness.
Interviewee#SD31,representingawhitemaleownedfirm,indicatedthathesupportsbreaking
uplargecontactsintosmallerpieces:Thesmallerthe[contract]pieces,theeasieritistoqualify
foraparticularpiece.Inotherwords,someonemightbewillingtogivemea$2millionjob,but
aretheygoingtogivemea$50millionjob?
Interviewee#SD40,representingawhitemaleownedfirm,reportedthathissubcontractswork
outinsmallpiecestoallowsmallfirmstheopportunitytobidonthem.Heindicatedthat
segmentingcontractsinthatwaycreatesmoreworkforhisfirm,butthatitisimportanttoallow
small,localfirmstheopportunitytocompete:Wearecreatingworkforthelocalcommunity.
Whatwedoistrytocreateworkthatfitsthelocalmarket.Wewillpackageworksosmaller
companiescancompete,sotheycangettheinsuranceandthebonding.Thebenefitisthatwe
gettokeepasmuchworklocalaspossibleandgrowthecompaniesinourlocalmarket.
Interviewee#SD40continued,ForDBEs,Ithinkthebiggestchallengeisthatiftheworkisnot
packagedintherightwaydisadvantagedfirmsareforcedtobeexcluded.Ithinkthatweneedto
knowwhattherequirementsareandnotsetthebarsohighsotheycanparticipate.Itis
sometimesmoreworkforgeneralcontractors,butthebenefitgoestotheclient.
Interviewee#SD43,representingaHispanicmaleownedfirm,statedthatsegmentinglarge
contractsintosmallerpieceswouldgoalongwayinencouragingMBE/WBEparticipation
becauseitwould(1)makethosecontractsmoreaffordableforsmallfirms;and(2)makeitso
multiplesmallfirmscouldparticipateononeprojectratherthanhavingitgotoasinglelarge
firm.
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Interviewee#SD47,representinganAfricanAmericanfemaleownedfirm,indicatedthatthe
constructionindustrysstandardforsmallcontractsisabout$30million,anamountthat
precludesmostsmallfirmsandMBE/WBEfirmsfromcompetingforthem.Sheindicatedthat
thereneedstobemoresmallcontractingopportunitiesbutthattheydonotexistbecause
bundlingcontractstogetheriseasierfor[agencies].
SDTA#2,representingaHispanicAmericantradeorganization,statedthatbreakinguplarge
contractswouldgreatlybenefitminorityandfemaleownedfirms.Hesaid,Weshouldbe
[breakinguplargecontractsso]mostcontractors[can]compete,insteadofhavingoneGoliath
getalloftheprofits.
SDTA#9,representingapublicworkstradeorganization,reportedthattheAirporthasrecently
beguntosegmentlargecontractsintosmallerpieces,andthatthatmeasurehashelpedsmall
firmscompeteforwork:TheAirporthasdoneabetterjobinbreakingprojectsinto[smaller]
piecesforsmallerbusinessestohaveabetteropportunityforbidding.
SDTA#6,representinganAsianAmericantradeorganization,reportedthatherorganizations
membershipwouldstronglypreferthatpublicagenciesbreaklargecontractsintosmaller
pieces.Sheexplainedthatanappropriateprojectsizeforhermembershipcouldbeaslowas
$10,000.
SDTA#7,representingaconstructiontradeorganization,reportedthatbreakinguplarge
contractswoulddefinitelyhelpsmallfirms.However,hepointedoutthatbreakinguplarge
contractsinvolvesagreatdealofcoordinationandplanningonthepartoftheagency.
SDTA#5,representingagovernmentadvisorycommissiononminorityissues,indicatedthatshe
playedaroleinsegmentinglargecontractswhensheusedtoworkforagovernmentagencyand
thatthoseeffortswerequitebeneficialtosmallfirms,particularlyminorityandfemaleowned
ones:Wehadonemanwhoprovidedallofourpaperneedsbecauseofthewaythecontractwas
bundled.Withsuchalargecontract,theonlywaytodoitwastohaveonelargecompanyfillthe
request.Yougetthesamepersoneverytime.[Aftersegmentingthecontract],weendedupwith
peoplewhodidcupsandanotherdidbathroomssmallercompanieswereabletoworkfor
[theagency].BreakinguptheRFPwassuccessfulandresultedinamorediversepoolofpeople
doingbusinesswithus.
Interviewee#SD38,representingaHispanicmaleownedfirm,indicatedthathesupportsefforts
tosegmentlargecontractsintosmallerpieces:Iliketheideaofbreakinguplargercontractsfor
smallerjobs.Ithinkthatisasmartwayofdoingit.Itwillalsokeeppeopleontheirtoesandkeep
generalcontractorsontopofthejob.Also,yourbracketfortheworkersgrows.
Afewintervieweesexpressedconcernthatbreakinguplargecontractswouldresultinpublic
agencieslosingtheeconomyofscale.Interviewee#SD14,representingaHispanicAmerican
maleownedfirm,saidthatbreakinguplargecontractsintosmallerpieceswouldhelpsmall
firms,particularlywithbonding,Forsmallbusinessesthatcantbond$20millioncontracts,
[they]couldbond$4or$5millioncontracts.However,heexpressedconcernsaboutagencies
andprimecontractorswillingnesstobreakupcontracts,becauseitischeaperforthemto
awardonelargecontractthanseveralsmallerones.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE268

SDTA#1,representingalocalchamberofcommerce,expressedasimilarconcern.Althoughhe
agreedthatbreakinguplargecontractswouldbehelpfultoMBE/WBEfirms,hereportedthat
agencieswouldbereluctanttodoit,becausetheywouldloseeconomyofscale.
SDTA#3,representingalocalchamberofcommerce,alsoexpressedconcernsaboutlosing
economyofscaleifpublicagenciesweretobreakuplargecontractsintosmallerpieces.She
wentontosaythatlargecontractorseffectivelybreakupcontractsontheirownanywayby
subbingoutpiecesofaproject.
Price/evaluationpreferences.
Afewairportintervieweesindicatedthattheysupportedpriceorevaluationpreferencesfor
MBE/WBEfirms.Interviewee#SD14,representingaHispanicAmericanmaleownedfirm,
statedthatpricepreferenceswoulddefinitelybehelpfulforMBEandWBEfirms,butthathewas
onlyfamiliarwiththoseprogramsastheyrelatetosmallbusinessenterprises.
Similarly,Interviewee#SD20,representinganAsianAmericanmaleownedfirm,andSDTA#2,
representingaHispanicAmericantradeorganization,bothindicatedthatpriceandevaluation
preferenceswoulddefinitelybehelpfultominorityandfemaleownedfirms.
Interviewee#SD32,representinganAfricanAmericanmaleownedfirm,remarkedthatprice
andevaluationpreferencesseemtobeagooddealforDBEfirms,butnotnecessarilyagood
dealforthemajorityownedfirmsthathavetocompetewiththem.
Otherairportintervieweessaidthattheydidnotsupportpriceorevaluationpreferencesfor
MBE/WBEfirms.SDTA#11,representingaveteranstradeorganization,statedthatprice
preferencesgenerallydonotworkandthatagenciesshouldbeconcernedwithbestvalueand
notlowestprice.
SDTA#1,representingalocalchamberofcommerce,saidthatpriceandevaluationpreferences
soundhelpfulforMBEandWBEfirms,butheisconcernedthatmajorityownedfirmsmayfeel
disadvantagedordiscriminatedagainst.
SDTA#3,representingalocalchamberofcommerce,indicatedthatshedidnotsupporttheidea
ofpriceandevaluationpreferences,Idontlikecrutcheswhereyoubidotherpeopleoutof
business[Agencies]shouldgowiththebestqualitywork.
Recommendationsrelatedtoremedies.
Someintervieweesrecommendedthatpublicagenciesengageinmoreoutreachefforts.
Interviewee#SD4,representingawhitemaleownedfirm,suggestedthatpublicagenciesshould
haveanopenforumforMBEandWBEfirmsandaskthem,HowcanIhelpyou?Particularto
theAirport,Interviewee#SD4saidthathewouldliketoseeAirportinspectorsbemorehelpful
andlesscombativewithregardtoMBE/WBEregulations.
Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,statedthatpublic
agenciesneedtoreachoutmoretominorityandfemaleownedfirms:Reachingouttothose
whohavebeenoutsideoftheplayingfieldforsolongbecauseofrace,ageorgenderis
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE269

important.Publicagenciesshouldbemoreaggressiveaboutattackingsocialillsandwecouldbe
moreeffectiveindevelopingaremedy.
Interviewee#SD25,representingawhitemaleownedfirm,recommendedthattheAirport
continuewithitsnetworkingevents.HesaidthatAirportstaffregularlyattendslocalnetworking
eventsandencouragessmallfirmstobidonavailableprojects.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,statedthatsmallfirms
arenotasbigofapartoftheSanDiegocontractingindustryastheyshouldbe:Idontthinkits
alevelplayingfield,becausesmallbusinessesorthenewstartupguysarenotnecessarilyinthe
loop.Hesaidtoimprovethesituation,publicagenciesneedtofocusondisseminatingmore
informationtosmallfirmsandneedtodomoreoutreachtohelpsmallfirmsbeawareofwork
opportunities.
Interviewee#SD43,representingaHispanicmaleownedfirm,suggestedthattheAirportshould
allowsmallfirmstointerviewoneononewithAirportstaff,becauseshethinksthatthe
Airportscurrentoutreacheventsareinaccessibletosmallfirms:Whentheressomanypeople
[atoutreachevents]anditssooverwhelming,theyrenottakingyourcompanyinto
considerationinparticular.Itsverydifficult.
SDTA#3,representingalocalchamberofcommerce,suggestedthatpublicagenciesshoulddo
moretoensurethatpotentialbiddersareinformedaboutavailableprojectsandremedial
programs.ParticulartotheAirport,SDTA#3recommendedthattheirwebsitebethoroughand
invitingtopotentialbidders,andthatrepresentativesfromtheAirportspeakateventsthatlocal
chambershost.
SDTA#5,representingagovernmentadvisorycommissiononminorityissues,suggestedthat
theAirportshouldhostvendorfairsthatwouldallowlargefirmstomeetfacetofacewith
smallfirms:TheAirportshouldbringpeopleintodobusinesswiththem.Havesmallcontracts
thatpeoplecouldgetonthespotwhile[attending]thevendorfair.Thatwouldencouragepeople
tocome.
SDTA#9,representingapublicworkstradeorganization,saidthatpublicagenciesneedtodo
moretoencouragetheparticipationofsmallfirms:Wehave65,000smallbusinessesin
California.Weshouldbeaskingthequestion,How[can]localagenciesworkbettertohelp
smallbusinessandthemselves?Thereshouldbeacooperationofpublicagenciesonbidding,
outreach,andcommunicationtorecruitthesebusinesses.
Severalintervieweesrecommendedthatpublicagenciesinstituteeducationprograms,both
forpotentialbiddersandfortheirstaff.Interviewee#SD11,representingawhitemaleowned
firm,suggestedthatpublicagenciesshouldbeinvolvedineducatingandtrainingthoseinthe
communitythatareinterestedinenteringtheconstructionindustry.Hecitedthesuccessthata
localorganizationhashadindevelopinganapprenticeshipprogramandtrainingwilling
workerstobesubcontractors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE270

Interviewee#SD16,representinganAfricanAmericanmaleownedfirm,indicatedthatpublic
agenciescouldprovidemoreinformationandmorelearningopportunitiestominorityand
femaleownedfirmsrelatedtohowtodobusiness.
Interviewee#SD1,representingaminorityfemaleownedfirmthatisaconcessionaireatthe
Airport,statedthattheAirportneedsmorebusinessorientedstaff(e.g.,staffwithbackgrounds
inbusinessorrealestatedevelopment)ratherthanstaffthatperpetuatebureaucraticproblems.
Sheindicatedthatthecurrentstaffneedsabetterunderstandingofthechallengesofbusiness
owners.
Interviewee#SD30,representinganAfricanAmericanmaleownedfirm,statedthathewould
liketoseeeducationprogramsexpandtoincludetrainingbeyondtheclassroom:[Theagencies]
offeralotofclassesandseminars[but]youreallyneedmorehandsonmentoring.
SDTA#7,representingaconstructiontradeorganization,statedthatthetargetofmostremedial
programsiswrong.Hesaidthatratherthanfocusingondiscriminationamongcontractors,
publicagenciesshouldfocusoneducatingpeopleandgettingthemintotheindustry:Almost
theirentireemphasisshouldbeongettingpeopleintothetrade,gettingpeoplethrough
constructiontech.andintotheuniversities.
SDTA#8,representinganelectricalworkerstradeorganization,reportedthatpublicagencies
needtoenforceapprenticeshiplawsthatis,theyneedtoensurethatthereareapprentices
workingoneveryproject.Sheexplainedthatmostcontractorsmoveupintheconstruction
industrythroughthetrades,andinordertoseeagreaterrepresentationofminoritiesand
femalesintheconstructionindustry,publicagencieshavetofostereducationand
apprenticeships.
SDTA#4,representingalocalchamberofcommerce,statedthatMBE/WBEfirmsstillneedhelp
withbasicindustryknowledgethatisgenerallypasseddownfromonegenerationtoanother.
SDTA#4alsosaidthatMBE/WBEfirmsalsoneedimprovedaccesstoinformationaboutbid
opportunitiesandthatlanguagebarrierscontinuetobeanissue.
SDTA#11,representingaveteranstradeorganization,recommendedthatpublicagenciesuse
moreprogramstoeducateMBEandWBEfirmsaboutbiddingproceduresandtoeducatetheir
ownstaffabouttheneedsofsmallfirmsinSanDiego.
Regardingeducationandtechnicalassistanceprograms,SDTA#9,representingapublicworks
tradeorganization,said,Iviewtechnicalassistanceassomethingthatisoneonone.Askingthe
questions,whatdoyouneedhelpwith?Basedonthisdefinitionthereisnotenoughtechnical
assistancebeingprovidedbypublicagencies.Technicalassistanceislimitedwithpublic
agencies,becausepeopleatthepublicworksarenotabletogiveinsideinformation.
Additionally,theyarebusyandtherearenotenoughpeopleforoneonone[interactions].
Afewintervieweessuggestedthatpublicagenciesshouldsegmentlargecontractsintosmaller
pieces.Interviewee#SD4,representingawhitemaleownedfirm,suggestedthatpublicagencies
shouldsegmentlargeprojectsintosmallerpiecesinordertohelpsmallfirmsbemore
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE271

competitive.Hesaid,Takeasmallprojectandbreakitupintosmallerpieces.Evenasmall
structuralmetalsubcontractof$5millionisstilltoolargeforsmallsubcontractors.
SDTA#2,representingaHispanicAmericantradeorganization,statedthatpublicagencies
shouldsegmentlargecontractstoallowsmallfirmstocompeteagainstlargerones.Hewenton
tosaythatthewaycontractsarepresentlysized,largebusinessescancrushthesmall
businesses.
RecommendationsrelatedtoDBEprograms.
SomeintervieweesrecommendedthatmandatoryDBEgoalsshouldbeinplace.Interviewee
#SD2,representingawhitefemaleownedfirm,saidthattheAirportshouldsetasidecontracts
forsmallbusinesses.
Interviewee#SD31,representingawhitemaleownedfirm,recommendedthatpublicagencies
transitionfromusingsubcontractorgoalstousingmandatoryquotas,assumingthatthereare
enoughcompetentfirmsavailableforthework:Iftherewereenoughcompetentfirms,Iwould
say[quotas]mightbesomethingtoconsider.
SDTA#11,representingaveteranstradeorganization,recommendedthatmandatorygoals
shouldbereinstated,butsaidthatalldisadvantagedfirms(e.g.,AfricanAmericanowned,Asian
Americanowned,femaleowned,andveteranowned)shouldhavethesamegoal:Makeitall
equal[fordisadvantagedfirms].
SDTA#4,representingalocalchamberofcommerce,indicatedthatmandatoryDBEgoalsare
necessaryandshouldbereinstated,becausetheplayingfieldisnotyetequalforminorityand
femaleownedfirms.
Interviewee#SD13,representingawhitemaleownedfirmthatisthemasterconcessionaireat
theAirport,saidthatapotentialsubtenantsACDBEstatusplaysasubstantialroleinwhetherhe
orsheisgrantedaconcessionaireleaseattheAirport,particularlyifthemasterconcessionaire
isnotcurrentlymeetingtheirACDBEgoal,IfImbelow30percent[MBE/WBEgoal
participation],Ithink[ACDBEcertification]wouldplayalargerole.Shewentontoexplainthat
herfirmtakesassertivemeasuresifitisbelowits30percentACDBEgoal.
OtherintervieweesrecommendedthatDBEgoalsandgoodfaitheffortsshouldbeeliminated
altogether.Interviewee#SD11,representingawhitemaleownedfirm,indicatedthatDBE
programsshouldbeeliminated:Doawaywithregulations.Makeitanopenmarket.Thesmall
guyjustcanthandleallofthepaperwork.Theyshoulddoawaywithregulations.Primesshould
advertiseandtheyshouldchoosethemostqualified,lowestbidderfortheproject.Hewenton
toaskrhetorically,CanweclosetheDBEdepartment?Itdoesntwork.
Interviewee#SD7,representingawhitemaleownedfirm,indicatedthatraceandgendershould
notplayaroleincontractingprocedures:Ifyouarequalifiedtodoajobyourexperiencelevel
shouldstandonitsown,nomatterthecolorofyourskin.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE272

Interviewee#SD15,representingawhitemaleownedfirmthatisaconcessionaireatthe
Airport,expressedconcernsthatDBEprogramsandmandatorygoalswillleadagenciesto
overemphasizerace,inturnleadingthemtoawardcontractstominorityorfemaleownedfirms
thatmaybelessqualifiedthanothermajorityownedfirms.Hesaid,Youhavetolookatthe
entirepackage.Focusingtoomuchononeaspectcouldbedetrimental.Hewentontosaythat
agencieswhooveremphasizeracemightultimatelygetworseserviceorvalue.However,
Interviewee#SD15,reportedthat,inprinciple,DBEprogramsareimportant:Ithinkitgives
peopleopportunitiesthatmightnototherwisebethereforthem,intermsofcompetingwith
largercompetitors.
SDTA#12,representingaworkforcetradeorganization,saidthatminoritiesandwomendonot
needpreferentialtreatmenttheyneedencouragementandtheopportunitytoacquire
additionalskills
Someintervieweesrecommendedthatpublicagenciespaymoreattentiontoissuesrelatedto
minority andfemaleownedfirms.SDTA#5,representingagovernmentadvisorycommission
onminorityissues,saidthattheCityofSanDiegoanditspublicagenciesdonotfocusenoughon
diversityissuesandhelpingMBEandWBEfirms:Ihaveseenwhathappenswhenthereisalack
offocustohavediversity.ThisiswhatishappeningintheCity[ofSanDiego]whichIamsure
isspillingintootheragenciesthroughoutSanDiego.Ihavenotseenacommitmenttodata
collectionoroutreachinanyseriousnessthroughouttheCitywhichIamsureisthesamehereat
theAirport.Shecontinued,Currently,thereisnowillorinteresttoaccomplishasuccessful
DBEprogram.Whenitcomesfromthetopitwillwork.
SDTA#1,representingalocalchamberofcommerce,saidthatmoreneedstobedonetohelp
minorityandfemaleownedfirms,buthewascarefultosaythatassistanceshouldnotbe
limitedtoonlythosefirmsbutshouldincludeothersmallfirmsinSanDiegoaswell.He
recommendedthatpublicagencieskeeptheissuesofalllocal,smallfirmsfrontandcenter,and
thatthoseissuesshouldntjustbeaboxtofilloutontheside.
SDTA#2,representingaHispanicAmericantradeorganization,indicatedthattheAirportneeds
totakeamoreproactiveapproachtodealingwithMBE/WBEissues:TheAirportshouldget
moreinvolvedandstepoutoftheircomfortzonehaveanattackcampaignontheground.
Twointervieweessuggestedthatpublicagenciesshouldoffermonetaryincentivestoprime
contractorstoworkwithMBE/WBEfirms.Interviewee#SD7,representingawhitemaleowned
firm,statedthatfinancialincentiveswouldencourageprimecontractorstousetheirown
resourcestohelpMBE/WBEfirmsgetthroughthebidprocess.Hesuggestedthatprime
contractorsshouldreceiveasmallpercentageofMBE/WBEsubcontractorscontractvalues.
Interviewee#SD6,representingawhitemaleownedfirm,saidthattheAirportshouldmaintain
aSmallBusinessEnterpriseProgrambuteliminateitsDBEprogram,atleasthowitispresently
structured.HesuggestedthattheAirportcouldkeepDBEgoals,butmakethemvoluntaryand
eliminategoodfaithefforts.Asanalternativetomandatorygoals,Interviewee#SD6suggested
thatprimecontractorsreceiveamonetarycreditforusingMBEorWBEsubcontractors.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE273

Oneintervieweesuggestedthatpublicagenciesshouldinstitutelimitsonhowlonga
particularfirmcanbeawardedacontract.SDTA#2,representingaHispanicAmericantrade
organization,said,Thereshouldbealimitontheamountoftimeyoucandobusinesswiththe
public.Forexample,youcantdobusinesslongerthantenyearsinarow.Heexplainedthat
withoutsuchlimits,contractstransferfromonegenerationofafirmtothenext.Hedescribed
thatpracticeasdiscriminatory:Thisisgeneralinstitutionalracismanddiscrimination.
Severalintervieweesofferednonspecificrecommendationsabouthowpublicagenciescan
improvetheircontractingproceduresandDBEprograms.Interviewee#SD21,representinga
whitemaleownedfirm,saidthatheisnotfamiliarenoughwithDBEprogramstoknowifthere
arecertaincomponentsthatareparticularlyhelpfultoMBE/WBEfirms.Hesaidthatheismuch
moreconcernedaboutwhetherasubcontractorcanhelphimcompleteajobratherthanabout
thesubcontractorsDBEstatus,Imabsolutelyadollardrivenguy.Ifsomebodycanwalkinand
helpmemakemoney,thatswhatsimportanttome.
SDTA#8,representinganelectricalworkerstradeorganization,saidthatanyprogramthat
helpssmallfirms(includingMBEandWBEfirms)isagooduseoftaxdollars.
SDTA#11,representingaveteranstradeorganization,indicatedthatremedialprogramworkas
wellforMBE/WBEfirmsastheydoforDisadvantagedVeteransBusinessEnterprise(DVBE)
firms,withthecaveatthattheworkethicofveteransfarexceedsthatofminoritiesandwomen.
Hesaid,Ifitworksforservicedisabledveterans,itwillprobablyworkforminorities[and
women],withtheexceptionofonethingtheworkethic[ofservicedisabledveteransis
better].
Relatedtothosecomments,Interviewee#SD31,representingawhitemaleownedfirmthatis
DVBEcertifiedindicatedthathesupportstheuseofremedialprogramsfordisadvantagedfirms.
However,hewentontosaythatDVBEfirmsdeservethosepreferencesmorethanMBE/WBE
firms:Quitefrankly,comparedtotheotherminoritycategories,wefeelweearneditnot
bornintoit.WithregardtoMBE/WBEfirmsbenefittingfromevaluationpreferencesin
particular,Interviewee#SD31said,Idontthinktheyveearnedit.
SDTA#7,representingaconstructiontradeorganization,indicatedthatamajorproblemwith
existingremediesisthattheyaremorepoliticalthantheyarepractical.Regardingthosepolitics,
hesaid,Apoliticiandoesntcareaboutwhoisgettingcontractsornot.Theyjustwanttocreate
aprogramthattheycantellpeoplethattheyare[addressingminorityandgenderissues].The
resultsneveraregood.Theydontcareabout[minorityandgenderissues]theyjustwantto
createtheprogram.
SDTA#3,representingalocalchamberofcommerce,indicatedthatshewasunfamiliarwiththe
termDBEandthushadnoknowledgeregardingthecertificationprocess.
Interviewee#SD12,representingaminoritymaleownedfirmthatisaconcessionaireatthe
Airport,indicatedthatthenetworthlimitsofDBEprogramsstifleadvancement:Whatdoesthe
ACDBEprogramdoformereally?ThenetworthofanACDBEcannotbemorethan$750,000.
Wewanttogrowandmakemoneytoo.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE274

Interviewee#SD43,representingaHispanicmaleownedfirm,indicatedthatinorderto
encourageMBE/WBEparticipation,primecontractorsshouldberequiredtousesubcontractors
thattheyhavenotusedinthepast,whichwouldgiveopportunitiestonewfirms:Ijustthink
biggercompaniesshouldbeabletotryoutdifferent[subcontractors]andnotjuststickwiththe
onestheyusuallydo.Ithinkitshouldbesomekindofrequirementwheretheyhavetotrynew,
smallcompaniesjustsowecangetanopportunitytoshowwhatwecando.
Twointervieweesrecommendedthatpublicagenciesshouldstopcommissioningfirmsto
completedisparitystudies.SDTA#7,representingaconstructiontradeorganization,statedthat
disparitystudiesrarelyofferanaccuratedepictionofthemarketplace.Healsoindicatedthathis
organizationwillformallydisputeanydisparitystudythattheyviewasincorrect:Assoonas[a
contractor]islow[bidder],andajobistakenfromthembecauseofwhatevercamefromthe
disparitystudyandthedisparitystudywasntrighttheresgoingtobeaconflict.Regarding
previousdisparitystudiesinCalifornia,SDTA#7remarked,Yougottogetitrightwehavent
hadoneherethatwasright.
Consistentwiththosecomments,SDTA#11,representingaveteranstradeorganization,
indicatedthatdisparitystudiesarenotparticularlyusefulandshouldbeeliminated:Donthave
adisparitystudy.
ConsortiumAnecdotesRegardingParticipationinandAwarenessofRace
andGenderNeutralProgramsorMeasures
Thefollowinganecdotesregardingparticipationinandawarenessofrace,ethnic,andgender
neutralprogramsormeasureswereobtainedfrominterviewsthatthestudyteamconductedin
connectionwithBBCs2009Consortiumstudy.
Outreachprograms.
Severalintervieweeshadparticipatedinorwereotherwiseawareofrace,ethnic,and
gender neutralprogramsprovidedbytheConsortium.[Interviewees#CON:4,5,6,9,10,11,
12,13,15,17,18,20,24,25,26,27,28,30,31,32,33,34,35,36,38,39,40,42,44,45,46,47,
48,50,52,55,CONTA#1,PF#3].Interviewee#CON4,aDBEcertifiedAsianPacificAmerican
maleownerofanengineeringfirmintheSanDiegoarea,statedthatlocallySANDAGdoes
outreacheffortsinconjunctionwithCaltranstoassistbusinessesbyincreasingtheir
opportunitiesandskillstoparticipateinConsortiumprojects.Thesearenetworkingeventswith
primecontractors.Hehasparticipatedinsomeofthesenetworkingevents.Hesometimesfound
themhelpfulandsometimesnotbecausethesameprimecontractorsusuallyattendwhoalready
knowyouandwhatyoucando.Occasionallytherearenewfirmsenablinghimtoestablishnew
contactsandrelationships.Interviewee#CON4statedthatthelastSANDAGeventoccurredlast
year.Interviewee#CON4alsorecalledthathereceivednoticethisyearfromtheOrangeCounty
TransportationAuthorityaboutanetworkingeventbutwasunabletoattend.Interviewee
#CON4suggestedthattheseoutreacheffortsshouldcontinue.Interviewee#CON4statedthathe
hasnothadanydirectexperiencewithprogramsthatassistwithbonding,insuranceand
financing,buthadseenannouncementsfromtheagenciesregardingsuchprograms.Hestated
thathehasneverseenanyeducationalortrainingprogramsorotherprogramsonhowtodo
businesswiththeConsortium.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE275

Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthatSANDAG,CCDC(CenterCityDevelopment
Corporation),PortofSanDiegoandsomeotheragencieshadanetworkingeventaboutthree
monthsagoattheConventionCentertoassistbusinessesbyincreasingtheiropportunitiesand
skillstoparticipateinConsortiumprojects,buthewasunabletoattend.Thepurposeofthe
eventwastomeetpeopleandhelpwiththecertificationprocess.Healsorecalledasimilar
networkingeventinLosAngelesrecently,butcouldnotrecallspecifics.Theseeventsare
advertised.Interviewee#CON5isalsoonamailinglistwiththeCCDCsohiscompanyreceives
informationaboutRFPs,jobs,trainingseminars,certificationprocess,etc.throughtheCCDC.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,recalledreceivinginformation
aboutoutreacheffortsbytheConsortiumtoassistbusinessesbyincreasingtheiropportunities
andskillstoparticipateinConsortiumprojectsmanyyearsago,butdidnotrecallanythingabout
theprogram.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
theL.A.CountyMTAoffersoutreachprograms.Hestatedthat20yearsagotheyhadaprogram
toassistDBEswithaccounting.Hedidnotknowwhethertheystillhadsuchaprogram,but
statedthatitwasveryhelpful.Interviewee#CON9wasnotawareofprogramstoassistwith
bonding,insurance,orfinancing.HestatedthatL.A.CountyMTAhasaprogramonhowtodo
businesswiththeConsortium.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,stated
thattheConsortiumhasavendorfair,butthatwastheonlyoutreachthatshewasawareof.She
statedthattheConsortiumdoesaskwhethersmallbusinessesneedassistancewithfinancing,
bonding,orinsurance;butshestatedthatfromaCPAstandpoint,thebusinessmustmeetthose
requirementsanywayandshedoesnotfeelthatitisuptotheConsortiumtoassistonthat.
Interviewee#CON10statedthatsomeoftheConsortiummembershaveinformationonlineon
howtodobusinesswiththeConsortium,butstatedthatbasicallyyousignuponthevendor
listandthenreceiveanautomatedemail.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthatshe
wasawareofemailsregardingdifferenteducationopportunitiesandtrainingmanualsonhowto
writeaproposalandobtaininsurance.Shenoted,however,thattheseprogramsallcostmoney.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthattheoutreacheffortbyL.A.CountyMTAisthemostimpressiveintermsof
embracingandfacilitatingparticipation.HestatedthatL.A.CountyMTAhasbeenholdinga
networkingperiodforpreproposalmeetingswhichishelpfulandprovidesforprequalification
updates.Hestatedthattheyassistthesmallerfirmswiththeirpaperworkandconnectwiththe
biggerfirms.Hestatedthattheonlyproblemisthatmostoftheteamsaresetbythatpoint,but
thatisnotanL.A.CountyMTAfault,itisjustareality.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE276

Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatL.A.CountyMTAortheSBAmayofferprograms
regardingbondingandfinancing.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,hastakenadvantageofoutreachprogramsregardingthecompletionof
paperworkassociatedwithConsortiumwork.Healsohasknowledgeofprogramsassistingwith
monetaryissues,buthehasneveractuallyusedtheseprograms.Interviewee#CON15isalso
awareofeducationalandtrainingprograms,someevenofferedbyotherprimecontractors.
Interviewee#CON15hasalsoattendedandparticipatedinConsortiumagencysponsored
vendorfairs.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hasknowledgeofandexposuretoalotofthe
Consortiumsoutreacheffortsandeffortstoassistbusinesses.Interviewee#CON17scompany
hastakenadvantageofmanyoftheseopportunities.
Interviewee#CON17isalsoawareofprogramsthatassistwithbonding,insurance,and
financing,butshehasntattendedtheseprogramsbecausehercompanyisaprofessional
servicesfirm.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,is
awareofoutreacheffortsbytheConsortiumtoassistbusinessesbyincreasingvisibility.Often
shedoesnotgotoprogramsbecauseshedoesnotthinkthatshecangetworkatthosetypesof
events.Shedoesknowofprogramstoassistwithbonding,insurance,andfinancing.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,hadknowledgeofConsortiumoutreachefforts,butstatedthat
programstoassistwithbonding,financingandinsurancearenotveryhelpful.Shehad
knowledgeofeducationalandtrainingprogramsandofprogramsonhowtodobusinesswith
theConsortium.
Interviewee#CON24,anAfricanAmericanfemaleownerofaDBE/MBE/WBEcertifiedprivate
investigatingfirm,wasawareofprogramsofferedonhowtodobusinesswiththeConsortium.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
wasawareofoutreachprogramsofferedbytheConsortium,includingprogramsonhowtodo
businesswiththeConsortium.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
wasawareofoutreacheffortsbytheConsortium(includingMTAandElCamino).Shehadheard
oforotherwiseparticipatedineducationalandtrainingprogramsandprogramsonhowtodo
businesswiththeConsortium.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,wasawareofoutreacheffortsbytheConsortiumincludingprogramstoassist
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE277

withbonding,insurance,andfinancing,educationalandtrainingprograms,andprogramson
howtodobusinesswiththeConsortium.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,wasawareofoutreacheffortsofferedbytheConsortium
includingprogramstoassistwithbonding,insurance,andfinancing.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,wasawareofoutreacheffortsofferedbyCaltransandtheL.A.CountyMTA,including
educationalandtrainingprogramsandprogramsonhowtodobusinesswiththeConsortium.
HehasparticipatedinaprogramwithCaltransinthepast.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,believedtheConsortiumofferedoutreachprograms,buthadnotparticipatedin
any.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedthathiscompanyhadparticipatedinameetthebuyersworkshopandother
educationalprogramsofferedbytheConsortium.Hehadnotparticipatedinanyprogramson
howtodobusinesswiththeConsortium,butstatedthathewasgoingtostarttakingadvantage
ofsuchprograms.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattheConsortiumhasexpendedsignificanteffortinoutreachprograms.Shenotedthat
Caltrans,incomparison,hasdonenothingintermsofoutreachandtheydonottryanything
new.Shestatedthattherearealwaysseminarsavailabletoassistwithbonding,insurance,and
financing.Shewasalsoawareofeducationalandtrainingprogramsandprogramsonhowtodo
businesswiththeConsortium.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,wasawareofanannualbusinessconference,butfeltitwasawaste.Shewasalso
awareofaprogramonhowtodobusinesswiththeConsortium,buthadasimilarnegative
perception.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,wasfamiliarwithoutreacheffortswithTBACTransportationBusiness
AdvisoryCouncil(anorganizationestablishedunderstatelawforMetrovendors).Shewas
awareofprogramstoassistwithbonding,insurance,andfinancingandwithprogramsonhow
todobusinesswiththeConsortium.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,statedthatshehadparticipatedintwoworkshopsprovidedbyMetro.She
attendedfairsthatprovidedinformationregardingprogramstoassistwithbonding,insurance,
andfinancing.ShewasawareofprogramsonhowtodobusinesswiththeConsortium,butshe
hadnotattendedanysuchprograms.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE278

Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthattheConsortiumoffersalotofoutreach
efforts,buthehasalwaysbeensuspiciousofthemandconsideredthemtobeshams.Hewas
awareofprogramsonhowtodobusinesswiththeConsortium.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,
reportedhavingheardvaguelyaboutprogramsonhowtodobusinesswiththeConsortium,
butshedidnotknowanythingaboutit.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,wasawareofprogramstoassistwithbonding,insuranceandfinancinghaving
beenofferedinthepastbutnothingrecent.Hewasawareofoneortwoeducationalandtraining
programsofferedbyL.A.CountyMTAaswellasprogramsonhowtodobusinesswiththe
Consortium.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatshehadmetpeopleintheoutreachdepartment.She
wasawareofeducationalandtrainingprogramsandprogramsonhowtodobusinesswiththe
Consortium.
Interviewee#CON44,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofafinancial
planningservicesfirm,hadexperiencewithConsortiumoutreacheffortsincludingeducational
andtrainingprogramsandprogramsonhowtodobusinesswiththeConsortium.
Interviewee#CON45,aDBE/MBE/WBE/SBEcertifiedAfricanAmericanfemaleownerofa
diversityconsultingfirm,statedthatshehadheardofConsortiumoutreacheffortsthrough
Consortiumpersonnel.Shehadheardofprogramstoassistwithbonding,insuranceand
financing,educationalandtrainingprograms(throughCaltrans),andprogramsonhowtodo
businesswiththeConsortium.ShestatedthatsheparticipatedinsuchaclasswithMetro.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,wasawareofoutreachprogramsofferedbyMetro.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthathehadparticipatedalongtimeagoinaprogramonhowtodobusinesswiththe
Consortium.Hewasnotawareofanyotheroutreachprograms.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,wasawareofoutreacheffortsofferedbytheConsortium.Hehasparticipatedin
programstoassistwithfinancingandbondingandonhowtodobusinesswiththeConsortium.
Hewasawareofothereducationalandtrainingprograms,buthadnotparticipatedinthem.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthathewasrecruitedbyanoutreachprogram.Hestatedthatthereissuchatalldoorstep
thatitmakesitextremelydifficulttoputyourhanddowntopullpeopleupwithyou.Hewas
awareofprogramstoassistwithbondingandfinancingandothereducationaltraining
programs.HewasnotawareofprogramsonhowtodobusinesswiththeConsortium.
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE279

Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,wasaware
ofConsortiumprogramstoassistbusinesseswithbonding,insurance,andfinancing.Hewasnot
awareofotheroutreacheffortsofferedbytheConsortium.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,wasawareofoutreachprogramstoassistwithbonding,financingandinsurance,andhad
knowledgeofprogramsonhowtodobusinesswiththeConsortium.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatagenciesinLos
Angelesaremoreactivewithoutreacheffortstoassistbusinessesbyincreasingtheir
opportunitiesandskillstoparticipateinConsortiumprojects.Hestatedthattheyprovide
workshopsandotheractivitiesfromcertificationinstructiontopayroll.HestatedthatSan
Diegosagenciesarenotasgoodindevelopingoutreachefforts.Hestatedthateducational
outreachishelpful,butifyoudonotaddressthewaythatbusinessesaredoingbusinessitis
futile.CONTA#1statedthathehasheardofafewprogramsthatassistwithbonding,insurance,
andfinancingandbelievesthattheseprogramsaregenerallygood.Healsostatedthathehas
heardofafeweducational/trainingprograms.CONTA#1alsostatedthatheisawareofafew
workshopssponsoredbydifferentagenciesonhowtodobusinesswiththeConsortium,but
believesthattheseprogramswillbefutileunlessConsortiumagenciesmakearealeffortto
includeDBEsontheirprojects.
PF#3,anindividualrepresentingablackbusinessassociationprovidedoraltestimonyata
publicforumheldonOctober20,2009.Hewasconcernedaboutoutreacheffortsandwhetheror
notthepeopleinattendancewererepresentativeoffirmsthathavethemostproblemswith
securingcontracts.Hethoughttheoutreachandtheeffortstoraiseawarenesstoissuesarein
question,andwithoutoutreachandawarenesstherewillbereducedparticipationbyminority
ownedbusinesses.Healsoquestionedtheeffort,andauthenticityoftheefforts,toinclude
AfricanAmericanbusinessesinprojects.Hestatedthatthequalificationsforcontractsare
sometimestoostringentandthatminoritybusinessownerscannotcomplywiththem.Healso
questionedtheenforcementprocessforverifyingthatprimecontractorswhosaythattheyhave
donetheirduediligenceand/orclaimtohaveminoritysubcontractorsundercontractare
actuallyincompliancewithwhattheysay.(PublicForumLosAngelesheldonOctober20,2009).
Severalintervieweeswerenotawareofanyrace,ethnic,orgenderneutralprograms
sponsoredbytheConsortiumaimedatincreasingsmallordisadvantagedbusiness
participationbyincreasingtheiropportunitiesandskills.[Interviewees#CON:1,2,3,5,6,7,8,
14,19,21,29,41,49,51,53,54,57,58,CONTA#2].Otherintervieweeshadverylimited
knowledgeofsuchprograms.[Interviewees#CON:16,22,23,37,39,43,56].Interviewee
#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontractingfirmintheSan
Diegoarea,wasnotawareofanyoutreachortrainingprogramsofferedbytheConsortiumor
otheragencies.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthathehasnoknowledgeofoutreacheffortsbytheConsortiumtoassistbusinessby
increasingtheiropportunitiesandskillstoparticipateinConsortiumprojects.Hestatedthathe
isawareofCaltransnetworkingconventionswhichtakeplaceattheendofOctober.Interviewee
#CON2alsostatedthathehasnotparticipatedintheseconventionsinthepast,butplansto
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE280

attendifanysimilarconventionisheldinSouthernCalifornia.Interviewee#CON2alsostated
thathehasnoexperiencewithorknowledgeofanyeffortstoassistwithbonding,insurance,and
financing,effortstoimplementanyeducational/trainingprograms,orwithprogramsonhowto
dobusinesswiththeConsortium.
Interviewee#CON7,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompany,statedthathehasnoknowledgeofanyoutreach
effortsbytheConsortiumtoassistbusinessesbyincreasingtheiropportunitiesandskillsto
participateinConsortiumprojects.Interviewee#CON7statedhehasnothadanyexperience
withprogramsthatassistwithbonding,insurance,andfinancing,butbelievedthatthereare
suchprograms.Hestatedthatheisunawareofanyeducational/trainingprogramefforts.
Interviewee#CON7alsostatedthatheisnotawareofanyprogramsofferedbytheConsortium
onhowtodobusinesswiththeConsortium,butPTAC(anorganizationfundedbyveterans)
offersprogramsabouthowtodobusinesswiththeConsortium.Theprogramissponsoredby
theWaterAuthority.
Interviewee#CON8,awhitemaleownerofanenvironmentalconsultingfirmintheSanDiego
area,statedhewasnotawareofoutreacheffortsbytheConsortiumtoincreasebusiness
opportunities,butheexpectsthatthatmightoccur.Hestatedthatprimecontractorshaveinthe
pastofferedtoassisthimwithbonding,buthehasneverpursuedthat.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,didnot
haveknowledgeofanyoutreacheffortsbytheConsortiumtoassistbusinessesbyincreasing
theiropportunitiesandskillstoparticipateinConsortiumprojects.Hedidnothaveany
knowledgeofprogramsoreffortstoassistwithbonding,insurance,financing,educationalor
trainingprograms.Interviewee#CON14notedthatL.A.CountyMTAdoespublishanewsletter.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,hasnoexperiencewithvariousoutreacheffortsbytheConsortiumentitiesor
others,exceptforasmallbusinessprogramthroughtheCityofL.A.andL.A.CountyMTAs
programsthatprovidesmallbusinessassistancewithbonding,insurance,andfinancing.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,hadnoexperiencewithoutreacheffortsbytheConsortium,butwasawareof
programstoassistwithbonding,insuranceandfinancing,educationalandtrainingprograms,
andprogramsonhowtodobusinesswiththeConsortium.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,hadseenflyersofferingeducationalandtrainingprograms,buthadnever
participatedinany.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehadheardofsomebusinessconferences,butneverattendedanyofthe
conferences.Hestatedthathewasnotawareofanyprogramstoassistwithbonding,insurance,
orfinancingoreducationalandtrainingprograms.Hestatedthathehadheardofseminarson
howtodobusinesswiththeConsortium,buthadnotparticipatedintheseseminars.
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Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,
reportedthatsheisvaguelyawareofoutreacheffortsofferedbyotheragenciesinorderto
increaseparticipationofDBEsandsmallbusinessesindoingworkwiththeConsortium.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthathehadseenaflyeradvertisingaprogramonhowtodobusinesswiththe
Consortium,buthedidnotattendtheprogram.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,reportedthatinthepasttheConsortiumofferedoutreacheffortstoassistsmallbusinesses,
buthestatedthattheseprogramsnolongerexist.
Interviewee#CON56,awhitemaleownerofasmallelectricalcontractingfirm,wasgenerally
awareofprogramstoassistwithbonding,insuranceandfinancingandothereducationaland
trainingprograms(althoughitwasnotclearwhoofferedtheseprograms).
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatheisnotawareofany
outreacheffortsbytheConsortiumtoassistbusinessesbyincreasingtheiropportunitiesand
skillstoparticipateinConsortiumprojects.HestatedthatheisawarethattheMetroWaste
WaterTreatmentPlantmayhavesuchaprogram.CONTA#2statedthathehasnotheardofany
programsrelatingtohowtodobusinesswiththeConsortium.
Someintervieweeswereawareoforhadparticipatedinoutreachprogramsofferedbynon
Consortiumagencies.[Interviewees#CON:2,3,4,5,7,9,11,12,13,15,16,17,23,25,26,30,
31,33,36,38,50,54,CONTA#1,2].Interviewee#CON2,aDBEcertifiedAfricanAmericanmale
structuralengineerintheSanDiegoarea,statedthatheisawareofoutreacheffortsbytheCity
ofSanDiegotoincreaseparticipationofDBEsandsmallbusinessesindoingworkwiththe
Consortium.HestatedthattheCitysendsoutemailsinvitingbusinessestoattendtargetevents
wherebusinessownerscanlearnaboutongoingprojectsandpairupwithprimecontractors.
Hestatedthathelastheardofoneoftheseeventsoneyearago.Hestatedthatheattendedthe
event,anditwassomewhathelpful,buthethinksthatitstillcomesdowntonetworkingwith
primecontractors.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,wasgenerallyawarethatsomeoftheagencieshaveseminarsonhowtodo
businesswiththegovernmententity.Forinstance,theMetropolitanWaterDistricthasa
program,buthehasneverattendedasession.Theobjectiveoftheprogramistofindoutabout
projectswellinadvanceofwhentheybecomepublic.Interviewee#CON3isawareofeffortsby
thefederalgovernmenttoincreaseparticipationofDBEsandsmallbusinesses.TheNavyFacility
EngineeringCommandhasdoneworktoincreaseparticipationofDBEsandsmallbusinesses.
Theworkinvolvedisallenvironmentalworkrelatingtothebaserealignmentclosure.Theyalso
developedmentoringprograms.TheCommandalsohasaminiracksprograminthe$5,000to
$10,000rangewhichwasDBEdirected,buttheprogramexperiencedlimitedsuccessbecause
manyoftheparticipatingDBEshebelievedwereDBEfronts.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,wasawareofseveraloutreacheffortsbyothers(thanConsortium)to
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE282

increaseparticipationofDBEsandsmallbusinesses.Forinstance,thePathtoPartnership
programsponsoredbytheCountyWaterAuthorityandtheStateofCaliforniaDepartmentof
GeneralServices,isnormallyheldinSeptemberorOctoberofeveryyear.Hewasalsoawarethat
theMinoritySupplierCouncilinSanDiegohasasimilaroutreacheventonceayear.Hesaid
therearegenerallyatleastthreenetworkingeventseachyearinSanDiegoandsomeofthe
individualagencies,suchasthePort,mayhavetheirownnetworkingeventforparticular
projects.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthatheisawareofoutreacheffortsbyothers(than
Consortium)toincreaseparticipationofDBEsandsmallbusinesses.Forinstance,hereceives
theHispanicNewseverymonthandthenewspaperadvertisesdifferentprogramsincluding
certificationprograms,buthiscompanydoesnotqualify.
Interviewee#CON7,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompany,statedthatheisawareofoutreacheffortsbyothers
(thanConsortium)toincreaseparticipationofDBEsandsmallbusinessesindoingworkwith
Consortium.HestatedthatanorganizationcalledEliteSDVOBprovidesoutreachprograms.
TheygenerallyholdamonthlymeetingwhichmembersofthePortAuthorityandPG&Eattend.
HestatedthatPTACalsoputsonalotofprogramsrelatingtobonding,theWaterDistrict,and
theAirport.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
L.A.CountyhasheldtradeshowsinthepastwithboothswhereDBEscancometomeetprime
contractors;hehadknowledgeofthemdoingthisatleastacoupleofyearsago.
Interviewee#CON11,anSBEcertifiedwhitefemaleownedergonomicprimeconsultantinthe
LosAngelesareastatedthatsheusesthefreeservicesofferedbythesmallbusiness
developmentcenterallthetime.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathehasseenprogramstoassistwithbonding,insurance,andfinancing,buttheydo
notrelyonthat.Hestatedthatmostofthetrainingprogramsthathehasseenareheldbynon
ConsortiumagencieslikeL.A.County.Hewasnotawareofanoutreachprogramre:howtodo
businesswiththeConsortiumalthoughhenotedtheinformationmaybeavailableonthe
Consortiumwebsites.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatheisawareofworkshopsonhowtofilloutaproposal,
buthefeltthesearenotofferedbyConsortiumagencies.Interviewee#CON13alsostatedthere
arealotofprivatecompaniesthatpromisetofindworkormarketforcompaniesforafee.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,isawarethatCaltrans,theCityofLosAngeles,andL.A.PublicWorks
havecreatedoutreacheffortstoincreaseparticipationofDBEsandsmallbusinessdoingwork
withthecontractors.
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Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,isonlyawareofoutreacheffortsfromtheSBAwithregardtoincreased
participationofDBEsandsmallbusinessindoingworkwiththeConsortium.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,statedthatsheisawareoftheGovernorsinitiativefor
smallbusinesstoincreaseparticipationwiththeConsortiumagencies.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,wasawareoftheStateofferingoutreacheffortstoincreaseparticipationofDBEs
andsmallbusinessdoingworkwiththeConsortium.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
wasawareofanorganizationcalledMBOC,ortheMinorityBusinessOutreachCounsel,thathas
anoutreachprogramcomponent.
Interviewee#CON26,aHispanicfemaleownedDBE/WBE/WDBEcertifiedartconsultingfirm,
wasawareofElCaminosoutreachprogramsaimedatincreasingparticipationofDBEsdoing
workwiththeConsortium.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,participatedinanoutreachprogramofferedbyCaltransinthepast.Hewasalsoawareof
outreacheffortsbyMWDandLAUSDwiththeintentofdoingbusinesswithDBEsandgranting
themcontractsforworkingwiththeirentities.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,wasawareofoutreachprogramsofferedbyotheragencies,butbelievesthatthe
participantsarehandpicked.
Interviewee#CON36,anAfricanAmericanfemaleownedDBE/MBE/WBE/SBE/CBEcertified
shorthandreporter,wasawareofoutreacheffortsofferedbySouthernCaliforniaEdison.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,wasawareofoutreacheffortsofferedthroughhis
organization,NCAIED.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
wasawareofoutreacheffortsbyCaltransandtheDepartmentofDefensesAirForce.
Interviewee#CON54,awhitemaleownerofageneralcontractingfirm,notedthathisownfirm
offersconstructiontrainingprogramsinordertoincreaseopportunitiesforDBEsandother
smallbusinesses.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatheisawareof
sporadicoutreacheffortsbyothers(thanConsortium)toincreaseparticipationofDBEsand
smallbusinessesindoingworkwithConsortium.Hestatedthatoccasionallyanagencywillput
onaworkshoponhowtodobusinessandhowtogetcertified.
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CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatheisawareofa
bondingassistanceprogramofferedbytheRegionalAirportAuthority.IntervieweeCONTA#2
statedthatheisnototherwisefamiliarwithanyConsortiumprogramstoassistwithbonding,
insurance,andfinancing.IntervieweeCONTA#2alsostatedthattheSanDiegoCommunity
CollegeDistricthasapartnershiporcollaborationwiththeCOC(ContractorsOpportunity
Committee)tooffereducational/trainingprograms,buttheprogramisnotofferedbythe
Consortium.
OtherintervieweeswerenotawareofoutreacheffortsbynonConsortiumagencies.
[Interviewees#CON:6,8,9,10,14,19,20,21,24,27,28,29,32,34,35,37,40,41,42,43,44,
45,46,47,48,49,51,52,53,55,56,57,58,CONTA#2].Interviewee#CON8,awhitemale
ownerofanenvironmentalconsultingfirmintheSanDiegoarea,wasnotawareofoutreach
effortsbyotheragenciesexcepttotheextentthattheyrequireprimecontractorstoreachoutto
DBEstoworkonprojects.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,wasnotawareofoutreacheffortsbynonConsortiumagencies.She
statedthatshewantedtoknowhowtodobusinesswithlargeprivateinstitutions,butcannot
figureouthowtobreakintothatmarket.
Simplificationandstreamliningofthebidprocess.
SomeintervieweeswerefamiliarwithConsortiumeffortstostreamlinethebidprocess.
[Interviewees#CON:4,12,18,22,24,32,33,38,42,44,46,48].Interviewee#CON4,aDBE
certifiedAsianPacificAmericanmaleownerofanengineeringfirmintheSanDiegoarea,stated
thatlastyearheheardofeffortstosimplifyandstreamlinethebiddingprocess,butisnotsure
whatisinvolved.Interviewee#CON4statedthathecouldnotrecallwhatheheard.Interviewee
#CON4thinksthatamoresimplifiedandstreamlinedapproachwouldbehelpful.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthattheOCTAstandsoutastheagencythattriestostreamlinethebiddingprocess
throughtheironlinesystem.Hestatedthattheyhaveanonlinesystemtorequestbidsfrom
consultingengineersforspecificsmalltasks;thisishelpfulbecauseyoudonothavetowastea
lotoftimeputtingtogetherabid,buttheprocessisnottransparentandyouhavenoideahow
thedecisionismade.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,has
someknowledgeofeffortstostreamlineandsimplifythebiddingprocess,butitdependson
eachindividualproject.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,hadknowledgeofConsortiumeffortstosimplifyandstreamlinethebiddingprocess,
buthestatedthatheiswaitingforittohappen.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatshehasheardofeffortsbytheConsortiumtostreamlinethebiddingprocess.
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Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatattheonsetoftheprojectL.A.CountyMTAwill
includethebiddingaspects.
MostintervieweeshadnoknowledgeoforexperiencewithConsortiumeffortstostreamline
thebiddingprocess.[Interviewees#CON:1,2,3,5,6,7,8,9,10,11,14,17,19,20,21,23,25,
26,27,28,29,30,31,34,35,36,37,39,40,41,43,45,47,49,50,51,52,54,55,56,57,58,
CONTA#1,2].Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservices
companyintheSanDiegoarea,wasnotspecificallyawareofeffortsbytheConsortiumto
simplifyandstreamlinethebiddingprocessbutdidrecallthathehadreadsomethingaboutiton
oneofthewebsites.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,didnotknow
whethertheConsortiumhasdoneanythinglatelytostreamlinethebiddingprocess.Herecalled
complaininginthepastabouttheConsortiumrequirementtohavedocumentsnotarized.Heis
prettysurethattheyhaveendedthenotaryrequirement.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,statedthe
hehadverylittleexperiencewiththeConsortiumeffortstostreamlinethebiddingprocess.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,wasnotawareof
effortstosimplifyorstreamlinetheConsortiumbiddingprocessandstatedthattheprocessis
extremelydifficulttounderstandortoqualifytoplaceabid.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,indicatedthatthebiddingprocessisnotstreamlined.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasnoknowledgeofConsortiumeffortstosimplifyandstreamlinethebidding
process.Hestatedthathewishesitcouldhappenbecauseitwouldsavehisfirmalotoftimeand
stress.Hestatedthatheknowsheisnotgoingtogeteverycontract,butthesoonerheknows
whetherhewillbeawardedthecontractorwillnotbeawardedthecontracthecanmoveonto
thenextbid.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,wasnotawareofConsortiumeffortstostreamlinethebiddingprocessbut
thoughtthatitwouldbeagreatideatoimplementsuchaprocess.Hestatedthatthiswouldhelp
cutbackonunnecessarypaperwork.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,wasnotawareof
Consortiumeffortstostreamlineandsimplifythebiddingprocess,butstatedthathewishedthat
theywould.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathehasnotheard
ofanyConsortiumeffortstosimplifyandstreamlinethebiddingprocess,andaddedhebelieved
thatitwouldmakenodifference.
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CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasnotheardof
anyeffortsbytheConsortiumtosimplyandstreamlinethebiddingprocess.
Segmentinglargercontractsintosmallercontracts.
SomeintervieweesreportedknowledgeofConsortiumeffortstosegmentlargercontractsinto
smallerones.[Interviewees#CON:3,5,9,13,14,18,20,22,24,33,CONTA#1].Interviewee
#CON3wasawarethatinandaround2000theConsortiumtriedtosegmentlargercontracts
intosmallercontractstopromoteopportunitiesforsmallcontractors.Hestatedthatthe
Consortiumtriedtodividetheprojectsupinternallyinsteadofgivingtheentireprojecttoone
primecontractor.Hesaidthisdidnothelpbecausetheprincipalworkisstilldonebyalimited
numberofbigcontractingfirms.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
business,statedthatherecentlyreadsomethingthathemayhavereceivedfromSANDAG
regardingConsortiumeffortstosegmentlargercontractsintosmallercontractstopromote
opportunitiesforsmallcontractors.Hestatedthatmanyoftheagenciesaretryingtobreak
largerjobsuptobringsmallercorporationsin.Interviewee#CON5statedthatthisisagood
idea.Interviewee#CON5statedthathehasalsoheardofanotherprograminwhichtheagencies
trytopullresourcesfromtheareawhereaprojectisbeingcompleted.Ifthecontractorsare
locatedinparticularzipcodes,theycouldreceiveworkontheproject.Interviewee#CON5
statedthathehasreadabouttheseprogramsonanumberofgovernmentalagencywebsites.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
helikeswhentheConsortiumsegmentslargercontractsintosmallercontractsandasfarashe
cantelltheConsortiumdoestrytodothis.HestatedthatwhentheConsortiumdoeslumpa
contracttogethertheyusuallyprovideareasonfordoingsoatthepreproposalmeeting.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,statedthatL.A.CountyMTAhasworkbenchesforprequalification
ofcompanies,buthehasnotreceivedanybusinessfrombeingonaworkbench.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,stated
thatConsortiumeffortstosegmentlargercontractsintosmalleronesisdoneforthepurposeof
controllingworkloadandnotgiveopportunitiestosmallerbusinesses.
Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,stated
sheknowsthatrecentprojectsarebeingsegmentedtomakemoreopportunitiesavailablefor
smallbusinessshefeltthatthiswaspositive.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,wasawareofConsortiumeffortstosegmentlargercontractsinto
smalleronesandpromoteopportunitiesforsmallercontractors.Shestatedthatpersonallythis
hasbeenhelpful.
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Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,hadexperiencewithConsortiumeffortstosegmentlargercontractsinto
smallerones,andshenotedthatshehelpedtowritesomeofthepolicies.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthatshehasheardofConsortiumeffortstosegmentlargerprojectsintosmallerones,but
shehasnotseenitinherbusiness.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthatheisawarethat
theCityofSanDiegoattemptedaboutfiveyearsagotosegmentlargercontractsintosmaller
contractstopromoteopportunitiesforsmallcontractors.Hestatedthatsegmentingtheselarger
contractsintosmalleronesisakeyelement,butingeneralthoughtitmightbeunhelpful
becauseagenciesneedtomakethesecontractsrealisticforsmallbusinessownerstoparticipate.
Thecontractsshouldbemorerealisticintermsofthescopeofservicestobeprovidedbysmall
businessowners.
MostintervieweesreportedhavingnoknowledgeoforexperiencewithConsortiumeffortsto
segmentlargercontractsintosmallerones.[Interviewees#CON:1,2,4,6,7,8,10,11,12,16,
17,19,21,23,25,26,27,28,29,31,32,34,35,37,38,39,40,41,42,43,44,45,46,47,48,49,
50,51,52,53,54,55,56,57,58,CONTA#2].Interviewee#CON4,aDBEcertifiedAsianPacific
AmericanmaleownerofanengineeringfirmintheSanDiegoarea,hasnotheardofanyefforts
tosegmentlargercontractsintosmallercontractstopromoteopportunitiesforsmall
contractors,butexpressedawishformoreagenciestodothat.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,did
nothavemuchexperiencewiththeConsortiumagenciessegmentinglargercontractsinto
smallerones.Hestatedthatsomepeoplecouldsaythattheoncallsareanattempttodothat
butmostoftheoncalls60to70percenttranslatetonobusinessandcreateawasteof
theirtime.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,wouldverymuchliketoseetheConsortiumsegmentlargercontractsinto
smallercontracts,butdoesnotknowofsuchefforts.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,hasseenCaltranssegmentlargecontractsintosmaller
contracts,andshewouldliketoseethesamehappenwiththeConsortiumagencies.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthathehadnoknowledgeofConsortiumeffortstosegmentlargercontractsintosmaller
ones,butstatedthattheMetropolitanWaterDistrictofSouthernCaliforniadoesunbundle
contracts.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthathewasnotawareofConsortiumeffortstosegmentlargerprojects
intosmallerones,andsometimesitistheotherwaycontractscontinuetobelargeand
unbundled.
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Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,wouldlikeasysteminwhichtheConsortiumallowedbiddingwithsmall
businesseswhereitwasactuallycompetitivebymakingitexclusivetosmallbusinesses.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,indicatedthattheConsortiumdoesnotsegmentlargercontractsintosmallerones.
Interviewee#CON35,anAfricanAmericanfemaleownedWMBE/MBEcertifiedmanagement
consultingfirm,hadnoexperiencewiththeConsortiumsegmentinglargecontractstosmaller
ones,butbelievesitwouldbehelpful.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehadneverheardofConsortiumeffortstosegmentlargercontractsintosmaller
contractstopromoteopportunitiesforsmallcontractors.Hestatedthathewishesthatthere
wassuchaneffortbecauseofhisfirmsdiscipline.
Interviewee#CON39,anAsianAmericanfemaleowned8(a)certifiedarchitecturalfirm,stated
thatinheropinionlargefirmsmonopolizethecontracts.
Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
hadnoknowledgeofConsortiumeffortstosegmentlargercontractsintosmallerones,but
statedthatwouldbefantasticpositioningforsmallerfirmstobidonindustryspecificcontracts.
Interviewee#CON46,aDBE/SBA/8(a)certifiedAfricanAmericanmaleownerofanenergy
marketingfirm,wasnotawareofConsortiumeffortstosegmentlargecontractsintosmaller
ones,andhestatedthattheyneedtodoso.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,hadnoexperiencewithorknowledgeofConsortiumeffortstosegmentlarger
contractsintosmalleronesbutfeltthattheConsortiumshouldmakethisapriority.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthattheConsortiumhasnotbeenproactiveintryingtosegmentlargerprojectsinto
smallerones.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
wasnotawareofConsortiumeffortstosegmentlargercontractsintosmallerones,andsaidhe
believesthattheyshoulddoso.
Interviewee#CON52,aDVBEcertifiedwhitemaleownerofasolarcontractingfirm,hadno
knowledgeofConsortiumeffortstosegmentlargercontractsintosmallerones,andstatedthat
hewishedthattheywoulddothatinthefuture.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthathehasnotheardof
anyConsortiumeffortstosegmentlargercontractsintosmallercontractstopromote
opportunitiesforsmallcontractors.
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MonitorDBEutilization.
MostintervieweeswerenotawareofConsortiumeffortstomonitorDBEutilization
throughoutaproject.[Interviewees#CON:1,2,3,4,5,6,7,9,10,11,12,13,15,17,19,22,23,
25,26,27,28,29,30,32,34,36,37,39,41,44,45,46,49,51,52,53,54,56,57,58,CONTA#1,
2].Interviewee#CON1,anonDBEHispanicAmericanmaleownerofanelectricalcontracting
firmintheSanDiegoarea,hadnoknowledgeastowhethertheConsortiumvisitsworksitesto
monitorDBEutilization.
Interviewee#CON2,aDBEcertifiedAfricanAmericanmalestructuralengineerintheSanDiego
area,statedthathedoesnotknowwhethertheConsortiumvisitsworksitestomonitorDBE
utilizationthroughouttheproject.
Interviewee#CON3,anonDBEwhitemaleownerofanenvironmentalservicescompanyinthe
SanDiegoarea,statedthatitisnothisexperiencenorhasheeverheardoftheConsortium
visitingworksitestomonitorDBEutilizationthroughouttheproject.
Interviewee#CON4,aDBEcertifiedAsianPacificAmericanmaleownerofanengineeringfirm
intheSanDiegoarea,statedthathehasneverheardoftheConsortiumvisitingworksitesto
monitorDBEutilizationthroughouttheproject.
Interviewee#CON5,anemployeeatanonDBEwhitemaleownedelectricalengineering
businessintheSanDiegoarea,statedthathevisitedConsortiumworksiteswhileworkingfora
differentemployer10yearsago,however,hecouldnotsaywhethertheConsortiumvisited
worksitestomonitorDBEutilizationthroughouttheproject.
Interviewee#CON6,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompanyintheSanDiegoarea,hadnoknowledgewhether
theConsortiumvisitsworksitestomonitorDBEutilizationthroughouttheproject.
Interviewee#CON7,awhitemalecoownerofanonDBENativeAmericanandCaucasianowned
recyclingandmaterialssupplyingcompany,statedthat,inhisexperience,theConsortiumdoes
notvisitworksitestomonitorDBEutilizationthroughouttheproject.
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,didnot
believehehadeverseentheConsortiumvisitaworksitetomonitorDBEutilization.
Interviewee#CON10,aDBEcertifiedAfricanAmericanfemaleownedaccountingfirm,didnot
knowwhethertheConsortiumvisitsworksitestomonitorDBEutilization.
Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,statedthathe
didnotknowwhethertheConsortiumvisitsworksitestomonitorDBEutilization.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthathedoesnothaveexperiencewiththeConsortiumvisitingworksitestomonitorDBE
utilization.
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Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,didnothaveexperiencewiththeConsortiumvisitingworksitesto
monitorDBEutilization.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,hasseentheConsortiumconductlaborcomplianceinterviews,buthas
notexperiencedvisitstoworksitestomonitorDBEutilizationthroughoutaproject.
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,isunawareoftheConsortiumvisitingworksitesto
monitorutilizationshehasonlyseentheagenciesactuallyinvolvedatthepointofproposal,
notmidstream,butshehasseenreviewandauditingofcontracts.
Interviewee#CON22,anAfricanAmericanfemaleownerofaDBE/MBEcertifiedplanning
engineeringfirm,wasnotawareoftheConsortiumvisitingworksitestomonitorDBEutilization
butsheknowsthattheyaresupposedto.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,wasnotawareofConsortiumeffortstomonitorworksites,butstatedthatthe
primecontractorsshouldberequiredtopreparereportsontheirDBEutilization.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatheisnotawareofConsortiumvisitstoworksitesinorderforthemtomonitor
utilizationofDBEsonprojects,andhefeelsthatthisissomethinglackingintheConsortium.
Interviewee#CON37,anAfricanAmericanmaleownerofaSBAcertifiedarchitecturefirm,
statedthathehasneverknownoftheConsortiumvisitingworksitestomonitorDBEutilization.
Hestatedthathethinksitwouldbeagoodfollowup.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,wasnotawareofConsortiumeffortstomonitorDBEutilization.Hestatedthatthisis
especiallyproblematicwhenaprimecontractorhassubcontractedworktoaDBE,butthendoes
notgivethemthework.
CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedthathehasnever
heardoftheConsortiumvisitingworksitestomonitorDBEutilization.
CONTA#2,thePresidentoftheBlackContractorsAssociation,hasnoinformationwhetherthe
ConsortiumvisitsworksitestomonitorDBEutilizationthroughoutaproject.
AfewintervieweeswereawareofsomeConsortiumeffortstomonitorDBEutilizationon
worksites.[Interviewees#CON:14,18,20,21,33,38,40,42,48,50,55].Interviewee#CON14,
aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,statedthattheConsortiumdoes
notvisitworksitestomonitorDBEutilizationalthoughprocurementwillsometimeskeep
trackofDBEutilization.
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Interviewee#CON18,awhitefemaleownerofaDBE/WBEcertifiedtransitplanningfirm,
experiencedafieldvisitregardingDBEutilization.L.A.CountyMTAperformedfieldvisitstwice
inthelastdecade.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,statedthattheConsortiumdoesvisitworksitestomonitorDBE
utilizationandsheknowsthatitishitormiss.Shecouldnotspeaktohowsuccessfulthisis.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatonheronecontractwithL.A.County
MTA,L.A.CountyMTAmonitoredcompliance.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
statedthattheConsortiumrarelyvisitsworksitestomonitorDBEutilization.
Interviewee#CON40,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmaintenance
andsupplyfirm,hadexperiencewiththeConsortiumvisitingworksitestomonitorDBE
utilization,butstatedthattheyshoulddoitmoreoften.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthatshehadexperiencedavisitfromtheConsortium.
Recommendationsrelatedtoremedies.
Severalintervieweesrecommendedexpansionofoutreacheffortstoencouragesmallbusiness
participationincluding:increasedadvertisingandthecoordinationandnotificationofwork
opportunitiesasbetweenprimecontractorsandsubcontractors.[Interviewees#CON:1,15,
16,20,21,23,25,28,30,42,51,CONTA#1,2].Interviewee#CON1,anonDBEHispanic
AmericanmaleownerofanelectricalcontractingfirmintheSanDiegoarea,suggestedblanket
advertisingoftheDBEProgramtocontractorsandofferassistancetosmallbusinesses;hestated
thatthatwouldincreasehisdesiretodoworkwiththeConsortium.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,hasnoticedasignificantdifferenceinoutreach,andthiswillcontinueto
helphimouttremendouslyashecontinuestobidasaprimecontractor.
Interviewee#CON16,aHispanicAmericanmaleownerofavalueaddedsupplyandsystem
integrationfirm,suggestedthattherearemoreeffortstobringsmallandlargebusinesses
together,tomonitorthoseefforts,andthatsucheffortsarenotjustentertainedforthepurpose
ofcheckingaboxforaparticularbidrequirement.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,recommendedthattheConsortiumcontinuewithduediligencefor
smallcompaniestohaveopportunitiesandtonotjustlooktothelowbidbuttoqualityaswell.
Interviewee#CON21,anAfricanAmericanfemaleownerofaDBE/MBE/SDB/Hubzone/8(a)
certifiedmarketingandcommunicationsfirm,statedthatmostagenciesandprivatecompanies
failtomakeappropriateoutreacheffortstoDBEs.Shestatedthatinordertosolvetheproblem,
BBCRESEARCH&CONSULTINGFINALREPORT APPENDIXL,PAGE292

theagenciesandprivatecompaniesmustincorporateasmallbusinesssetasideforDBEssimilar
tothefederalgovernments8(a)Program.
Interviewee#CON23,anAfricanAmericanmaleownerofaDBE/MBEcertifiedtrucking
subcontractor,recommendedimprovedoutreachtoAfricanAmericanownedbusinesses.He
believesthatotherminorityownedbusinessesarebeingutilizedtotheexclusionofAfrican
Americanownedbusinesses.
Interviewee#CON25,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedcivilengineer,
statedthatthereneedstobemorepartneringbetweensmallfirmsandprimecontractors.He
statedthatthereshouldbemorefacetimewithprimecontractorsinadditiontotheL.A.County
MTAVendorFairs.
Interviewee#CON28,anAfricanAmericanmaleownerofaDBE/MBE/SBAcertifiedheavysteel
productdistributionandsupplyfirm,statedtheL.A.CountyMTAneedstoincreaseawareness
andadvertisingaboutbiddingopportunities,RFPs,andeducationprogramsrelatedtobonding
andfinancing.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthatthereshouldbeagreaterpushformoreoutreachtosmallerbusinessessothat
theycanparticipateinthebiddingprocess.
Interviewee#CON42,aDBE/WMBE/SBEcertifiedAfricanAmericanfemaleownerofa
commercialprintingcompany,statedthattheL.A.CountyMTAshouldoffermoreDBEoutreach
programs.
CONTA#2,thePresidentoftheBlackContractorsAssociation,statedthatCaltranshas
representativeswhoprovideinformationaboutprimecontractorswhohaveexpressedan
interestinaparticularRFP;herecommendedthattheConsortiumprovidethisinformation.
CONTA#2alsorecommendedholdingworkshopsincollaborationwiththeBlackContractors
AssociationandhavingtheConsortiumofficialsandstaffintroducethemselvesandmake
themselvesknownsothatpeopleknowwhattheydo.
Severalintervieweesrecommendedchangestosimplifyandstreamlinethebiddingprocess
includingthedisseminationofmoreinformationattheinitialstageoftheprocessandthe
simplificationofpaperwork.[Interviewees#CON:9,11,13,14,17,20,29,33,34,55,58].
Interviewee#CON9,anAsianPacificAmericanmaleownedtransportationengineeringand
planningconsultantfirmandgraduateoftheDBEProgramintheLosAngelesarea,statedthat
usuallythefirstquestiontheyasktheConsortiumiswhetheragivenprojectisfederallyfunded
andwhethertheDBEgoalsareafirmrequirement.Hestatedthatsometimestheanswertothat
questionisunknownevenduringthepreproposalmeeting;hestatedthatmoreknowledgeon
thepartoftheagencywouldbehelpful.Hestatedthisinformationaffectsthewayteamsare
formed.Interviewee#CON9recommendedthattheagenciesprovidemoreinformationwith
respecttowhetheraprojectisfederallyfunded;hestatedthatfederalfundingprovidesthem
withahintastowhetherthecontracthasahardDBEgoalasopposedtoasoftDBEgoalon
thosecontractswithoutfederalfunding.
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Interviewee#CON11,anSBEcertifiedwhitefemaleergonomicprimeconsultant,recommended
makingtheRFPprocesseasierincludingrequiringlesspaperwork.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,notedthatalotoftimesConsortiumresponsestoquestionsabout
aparticularRFPcometooclosetotheduedateoftheproposalandraiseadditionalquestions
thatcouldimpacttheproposal.Hestatedthatheunderstandsthecutoffforreceiptofadditional
questionsbutnotedthatitcouldaffectanindividualsabilitytorespondtoaproposal.
Interviewee#CON13statedthatsomeRFPshavepagelimitationswhichcanbedetrimental.
Interviewee#CON13alsostatedthatsomeRFPsdonotprovideevaluationweighting
information.
Interviewee#CON14,aLatinAmericanmaleownerofaDBEcertifiedmarketingfirm,
recommendedthatthepeopledraftingtheRFPsshouldbemorequalifiedintheparticularfield.
HestatedthatoftentheRFPsarewrittenforengineeringcompaniesandthenmodifiedor
tailoredforcommunicationsprojectsbuttheyretainqualificationsthatareridiculousandnot
applicable(e.g.,aninsurancerequirement).
Interviewee#CON17,aSubcontinentAsianAmericanfemaleownerofaMBE/DBE/WBE
certifiedengineeringmanagementfirm,reportedthatherrecommendationsdealmorewiththe
deliverysideoftheprocess.Interviewee#CON17statedthatthereisadisconnectbetween
primeconsultantsandagencymanagers.Interviewee#CON17recommendedthatagenciesdoa
betterjobofinreachtoholdpersonnelaccountablewithregardtothecommitmentsmade
duringtheproposalandplanningstagesofjobandteamformation.
Interviewee#CON20,anAfricanAmericanfemaleownerofaDBE/MBE/WBE/SBAcertified
communityoutreachfirm,recommendedthattheConsortiumcutdownontheamountof
paperworkassociatedwiththebiddingprocess.Shestatedthattherearealotofredundant
formsthataskquestionsregarding,forexample,lobbying,childcarefacilities,etc.whichoften
mustberesubmittedtwenty(20)timesayear.Shestatedthatthereshouldbeoneformthat
capturesalloftheinformationsothattheyonlyhavetogothroughtheprocessonceayear.
Interviewee#CON29,anAfricanAmericanmaleownedelectricalcontractor,recommendedthat
theConsortiummaketheprocesssmallbusinessfriendly.Hesuggestedstreamliningeffortsto
makeiteasiertounderstandtheproposalsaswellasthequalificationsfortheproposalsand
makingthemobtainablegoals.Hewouldlikethecertificationprocesstobesimplified.Hestated
thatifthegovernmentreallywantedtohelpsmallbusinessestheywouldhaveachecksand
balancessysteminplaceforbusinesseswhoaresupposedtogetapercentageofthedollarsto
actuallygetthedollars.
Interviewee#CON33,awhitefemaleownedDBE/WBE/SBAcertifiedmanagementconsultant,
recommendedthattheConsortiumreducethenumberofaddendumstotheRFPswhichwould
simplifytheprocess.
Interviewee#CON34,aHispanicfemaleownedDBE/MBE/WBEcertifiedtransitandlabor
consultant,recommendedeliminatingbureaucratichurdlesinthebiddingprocess.
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Interviewee#CON55,arepresentativefromawhitemaleownedlargeconstructionservicesand
programmanagementfirm,statedthattheConsortiumshouldrewritetheparametersinthe
proposals.
Interviewee#CON58,awhitemaleownerofanengineeringconsultingfirm,indicatedthatit
maytakeaConsortiummemberagencyoneyeartoputtogetheranRFP,butwhenitisreleased
theywillrequestaresponsewithintwoweeks.Henotedthatsometimesthedeadlinesconflict
withnationalholidays,andheofferedthattheagenciescouldbemoreconsiderateofthetiming.
SeveralintervieweesrecommendedthattheConsortiumunbundle,andsegmentlarger
contractsintosmalleronesinordertoincreaseopportunitiesforsmallbusinesses.
[Interviewees#CON:2,15,30,31,32,38,43,50,53].Interviewee#CON2,aDBEcertified
AfricanAmericanmalestructuralengineerintheSanDiegoarea,recommendedthatthe
Consortiumbreaklargercontractsintosmallerones.
Interviewee#CON15,aHispanicAmericanmaleownerofaMBEcertifiedengineeringand
constructioncompany,recommendedthatthebiddingprocessreflectthebreakingdownof
contractsintosmallersegments.Interviewee#CON15notedthatthebiddingprocessandthe
contractsare,themselves,toobig.Hesaidthathewouldliketoseecontractsbrokendowninto
moremanagementsegmentssothatcompanieshissizecanbidonmoreprojects.
Interviewee#CON30,anAsianmaleMBE/SBEcertifiedownerofaconstructionmanagement
firm,statedthattheConsortiumshoulddividelargercontractsandsplitthemdownintosmaller
contractssothatthesmallerfirmscanbecomemorecompetitiveforcontracts;thiswillalsodoa
betterjobofensuringmoreminorityandsmallbusinessparticipationinbecomingprime
contractorsanddealingdirectlywiththeConsortium.
Interviewee#CON31,anAfricanAmericanmaleownedDBE/MBE/SBEcertifiedmasonry
subcontractor,statedthathethinksitwouldbeagreatideaforsmallbusinessestobeableto
negotiatedirectlywiththeConsortiumasitrelatestothebiddingprocess.Alsohethinksthat
thereshouldbesomesortofsysteminplacethatbreaksdowntherequirementsofprojectsso
thata$10millionprojectwhichmighthave$200,000worthofmasonrycanbebidoutin
smallerportions(whichiswhathewouldwanttobidon).Hestatedthathecanneverbethe
primecontractoronthattypeofprojectorbeabletobondfora$10millionprojectbutifhes
biddingona$200,000projecthebecomesmorecompetitive.
Interviewee#CON32,anAfricanAmericanmaleownedDBEcertifieddistributorofcleaning
products,statedtheConsortiumshouldenablesmallercompaniestoobtainsmallercontractsso
thattheycanestablishatrackrecordwithaprimecontractorwhichcouldleadthemtogetting
largercontracts.
Interviewee#CON38,aNativeAmericanmaleownedDBE/MBE/SBEcertifiedclosedcircuit
televisionandsurveillancesecuritybusiness,statedthatthestructuresofthecontractsshould
beunbundledallowingmorespecializedbidding.Thiswillallowbidderstobidwithintheirown
scopeofwork;hestatedthatsomeoftheRFPshaveyoulockedinacrazyperimeterofwork.He
alsosaidtheyshouldmakeitfairandcloselymonitortheGoodOldBoyNetwork.
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Interviewee#CON43,aDBE/MBE/SBEcertifiedAfricanAmericanmaleownerofasecurityfirm,
statedthattheConsortiumshoulddevelopasystemthatallowssmallbusinessestobetruly
competitiveonthebiddingprocess;thiswouldincludesomeformofsegmentinglarger
contractsintosmallerones.
Interviewee#CON50,aMBE/SBEcertifiedChineseAmericanmaleownerofanaccountingfirm,
statedthattheawardingentityshouldunbundlethecontractsothatsmallerbusinesseshavean
opportunitytobid.HestatedtheConsortiumshouldstopconsolidatingthecontractsintoone
largeallinclusivecontractthatmay,duetothescopeofworkandprice,diminishthechanceofa
smallbusinesstobeawardedthecontract.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,statedthatsomeoftheConsortiumprojectsaretoolargeandtheyarealwaysawardedto
thelargerfirms.HerecommendedthattheConsortiummakethecontractssmallersothatafirm
canrealisticallygoafteritanddothejob.
SomeintervieweesrecommendedtheConsortiumtakeeffortstoencouragegrowthofsmall
businesses.[Interviewees#CON:3,27,47,55,CONTA#1,PF#26].Interviewee#CON3,anon
DBEwhitemaleownerofanenvironmentalservicescompanyintheSanDiegoarea,madethe
followingrecommendationsforimprovementtotheConsortiumDBEProgram:spendan
adequateamountofmoneytoencourageparticipation.Forinstance,spendmoneytoallow
primecontractorstomentorandworkwithDBEswhomaybelessexperienced.
Interviewee#CON27,aChineseAmericanmaleownerofaDBE/MBEcertifiedstructural
engineeringfirm,statedthatithasbeenmoredifficulttoobtainbusinesssincethepassageof
Proposition209.Hestatedthatasaresulthehasbeenforcedtomarketinotherareas.Hestated
thatsincehisfirmisnotasmallbusiness,noralargeone,heneedsanotherstreamof
dependablework.HesaidthattheConsortiumshouldhelpsmallbusinessesbecomelarger
businessessothattheydonotremainstagnatedinthesmallbusinesscategory.
Interviewee#CON47,aDBE/MBE/8(a)certifiedAfricanAmericanmaleownerofasecurity
firm,statedthatsmallbusinessesshouldhavethesameopportunitiesaslargercompaniesand
theConsortiumshouldgivesmallcompaniesachancesothattheycangrow.Hestatedthatif
theycontinuetogiveallofthejobstothelargecompaniesthesmallcompanieswillneverhave
theopportunitytocompete.HestatedthatL.A.CountyMTAwillnotawardacontracttoasmall
companyifitdeemsittohaveinsufficientexperienceorannualrevenue;and,hestatedtheL.A.
CountyMTAwillautomaticallyassumethattobethecaseifitisasmallbusinessasallofthem
areplacedinthesamecategory.Hestatedthatthisisabadbusinessmodel.Hestatedthatjobs
arehardtofinanceanditseemsasthoughtherulesaresetinplacetoeliminatebusinessesas
opposedtoassistingthem.Heindicatedthathehaspursuedthesamecontractyearafteryear,
butitalwaysgoestotheincumbent;ithasbecomeawasteoftimeandmoney.
Interviewee#CON55,awhitemaleownerofaconstructionservicesandprogrammanagement
firm,recommendedthattheConsortiumfindawaythatcomportswithProposition209to
enablesmallandminorityownedfirmstoobtainwork.
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CONTA#1,thePresidentoftheLatinoBusinessOwnersofAmerica,statedtheagenciesshould
alsoworktocreatesteppingstonestogrowsmallbusinesses.Further,hestatedthatthe
Consortiumneedstochangetheperceptionthatthereisnogaintodoingbusinesswith
Consortiumagenciesandthattheagenciesareopentoworkingwithsmallbusinesses.CONTA
#1recommendedthattheagenciesshouldgobacktothedrawingboardandchangetheway
thattheydobusiness.Hestatedthatthecontractsshouldberealisticintermsofthescopeof
workmadeavailabletoDBEs.Healsosuggestedthattheagenciesfocusmoreongrowingsmall
businesses.Hestatedthatunlesstheagencieshelpgrowsmallbusinesses,alloftheproject
supplies,forinstance,willbeimported.
PF#26,anindividualrepresentingacertifiedMBE/DBEengineeringcompanyprovidedoral
testimonyatapublicforumheldonOctober21,2009.Hesaid,IhopethatSANDAGwilladopt
mandatorysubcontractingminimumsincontracts.Healsostatedthat,Imhopingthat
SANDAGwillconsidergivingspecialpreferencepointstosmallandlocalbusinesses,andnotjust
foreverybody.(PublicForumSanDiegoheldonOctober21,2009).
Someintervieweesrecommendedrelaxationoftheparticipationgoalsincertaininstancesand
expansionofotheropportunitiesforsmallbusinesses.[Interviewees#CONTA:1,53].CONTA
#1,thePresidentoftheLatinoBusinessOwnersofAmerica,recommendedthattheConsortium
makerealisticparticipationgoalsforsmallbusinesses.Theallocationofcontractdollarshasto
berealisticintermsofavailabilityofDBEs.IfthereisnoavailabilityofDBEsinaparticulararea,
theprogramshouldbefocusingoncreatingavailability.Additionally,theagenciesoftenwantto
dealexclusivelywithonevendorwhocansupplymultipleproducts,whichexcludessmaller
vendors.Theagenciesshouldaltertheirpracticeofhiringaonesourcevendortoincludesmaller
vendors.
Interviewee#CON53,awhitemaleownerofatraffic,transportation,andengineeringconsulting
firm,statedthathedoesnotbelievethatanygroupshouldbeforcedtouseaparticulargroup
becauseoftheirsize,race,orgender;rather,everythingshouldbeleftuptoafirmswork
history.
RecommendationsrelatedtoDBEprograms.
SomeintervieweesrecommendedthattheConsortiumavoideliminatingraceconscious
participationgoals.[Interviewees#CON:12,13,19,48,49,PF#1,2,11,21].Interviewee
#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,statedthatthe
ConsortiumshouldbeconsistentinitsimplementationoftheDBEProgramandnotdowhat
CaltransdidHestatedthatCaltranswentraceneutralandleftthelocalagenciestodo
whatevertheypleaseandtoignoreDBEparticipation,ifnecessary,becausetheyhave
somethinglinedupforsomeone.Hestatedthattheyhadadirectexperiencewithalocalpanel
whotoldthemthatDBEwasnotthatimportant.HestatedthattheConsortiumshouldcontinue
equaltreatmentofallDBEs.HestatedthatCaltransdidnottakedemographicsintoeffectand
thefactthattherearemoreHispanicAmericansinthesouthernCaliforniaarea.Hestatedthat
limitingtheDBEProgramtocertainraceswouldbeamistake.
Interviewee#CON13,anAsianPacificAmericanmaleownerofaDBE/SBA/SBEcertified
engineeringconsultingfirm,notedthatmanyprojectstodaydonothaveaDBErequirement,but
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ratherjustencourageparticipation.Hestatedthatinmanyinstancesthatisreasonablebecause
therearenotDBEsthatdothatkindofwork.Interviewee#CON13statedthatopportunitiesfor
DBEsareshrinkingandmanystateshavedoneawaywiththeDBEProgramaltogether,whichis
badforhisabilitytogetwork.Interviewee#CON13statedthatheunderstandswhystatesare
curtailingtheDBEProgram,buthedoesseevaluetotheDBEProgramtoo.Hestatedthatinthe
bigpicture,hedoesnotknowwhethertheDBEProgramisgoodorbad,butithascertainly
helpedhiscompanytosurvive.Hestatedthathiscompanyhasdonesomegreatworkforthe
ConsortiumsobothheandtheConsortiumhavebenefited.
Interviewee#CON19,anMBEcertifiedAfricanAmericanmaleattorney,statedtheplayingfield
shouldbeleveledwheretheminoritylawfirmscanfairlycompeteforbusinessandformore
desirablebusiness.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,recommendedthattheConsortiumbringbacktherequirementforthe
utilizationofDBEandMBEfirmsthatwasinexistencebeforeProposition209.Hestatedthat
oncetheConsortiumeliminatedtherequirementsinfavorofgoals,histelephonestopped
ringingfornewwork.HestatedthattheL.A.CountyMTAhadoneofthestrongestprograms,and
hehopesthattheywouldreturntothatinthefuture.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,statedthatConsortiumcontractsshouldnolongerberaceneutralandshouldrequire
utilizationofminorityownedfirms.
PF#1,anAfricanAmericanindividualrepresentinghisMBE/DBEenergycompany,aswellasa
blackbusinessassociation,providedoraltestimonyatapublicforumheldonOctober20,2009.
Since1990,hisfirmhassubmittedover80bids,however,theirrateofsuccessisverypoor.He
statedthatwithoutgoalsincludedonallpublicsectorcontracts,smallbusinessownerswillnot
betreatedfairly.Hestated,WithoutgoalsatMetro,inparticulargoalsfortheinclusionof
AfricanAmericans,anyprogramwillbedoomed.(PublicForumLosAngelesheldonOctober
20,2009).
PF#2,anindividualrepresentinganofficeproductscompany,aswellasablackbusiness
association,providedoraltestimonyatapublicforumheldonOctober20,2009.Hisfirmhas
beenbiddingoncontractssince1980andhashadverypoorresults.Othermembersoftheblack
businessassociationstatedthatfewcontractswereeverawardedtominorityownedfirms.He
statedthatthereseemstoalwaysbeanimpedimenttominorityparticipation,eventhoughthe
opportunitiesarethere.HewantsLACMTAtoincludegoalsinalloftheircontracts.Hesaid,If
therearenogoals,Ithinkitsgoingtobequitebleakfortheminorityownedbusinesses.(Public
ForumLosAngelesheldonOctober20,2009).
PF#11,afemaleindividualrepresentingarealestatecompanysaid,Wehavenoticeda
differenceinthewaythattheyhaverepresentedcontractsforminorityandbigticketholders.
Shestatedthatsheandhercompanyhavefoundthattherearenoparticipationgoalsincludedin
contracts.Thesegoalsarecrucialtohercompany,andhaveaffectedtheirbusinessinabig
way.(PublicForumLosAngelesheldonOctober20,2009).
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PF#21,anindividualrepresentingadryutilitiescompanystatedthattheyarequalifiedasa
MBE,SBA8Aandwomanownedsmallbusiness.Hebeganbyaddressingthegenuineneedfor
dryutilityworkonallpublicagencyprojects.Hestatedthathisfirmwaswillingandableto
workthroughoutCalifornia,andthattheyhavebeenconsistentintheirbusinesspursuitsto
secureworkwithprimecontractors.However,hestatedthattheyhadverylittlecontractaward
success.Hestatedthathisunderstandingisthatwithoutfederalfundingattachedtotheproject,
therearenogoalsincludedontheprojecttohireMBEs,WBEsorDBEs.Withoutsuchgoals,
WMBEsandothersarenotbeinghired,anditisahugeproblem.Itisaproblemthatpermeates
theentiresystem.(PublicForumSanDiegoheldonOctober21,2009).
OneintervieweerecommendedthattheConsortiumshouldbesuretoupdateitsprogramsto
keepthemcurrentwiththestateofbusinessoperations.[Interviewee#CON:54].Some
intervieweesofferedmixedperceptionsregardingcontinuingtheConsortiumDBEProgram
[Interviewees#CON8,12].Interviewee#CON8,awhitemaleownerofanenvironmental
consultingfirmintheSanDiegoarea,statedthatheresentstheDBEProgramandhavingto
complywithit.HestatedthatonnonConsortiumprojectsaDBErequirementwillsometimesbe
thedecidingfactorastowhetherhedecidestobidontheproject.Interviewee#CON8statedthat
theDBEProgramisatimeconsumingaddedrequirement.
Interviewee#CON12,aHispanicmaleownerofaDBE/MBEcertifiedcivilengineeringfirm,
statedthatbasedonhisexperiencewithLACountyMTAandOCTA,hedidnothaveany
recommendationsforimprovingtheDBEProgramprovidedthatitcontinuestoexist.He
statedthattheCaltransprocesshasledtosomeconfusionanddisadvantage.
SomeintervieweesrecommendedthattheConsortiumreturntomandatoryDBEgoals.
[Interviewees#CON:38,48,49].Interviewee#CON38,aNativeAmericanmaleowned
DBE/MBE/SBEcertifiedclosedcircuittelevisionandsurveillancesecuritybusiness,statedthat
theConsortiumshouldreturntothetimewhenthegoalsweremandatoryandwerestrictly
enforced.Hestatedthattheyshouldleveltheplayingfieldwherepublicmoneyisspentasit
relatestosmallbusinessesinvolvement.Herecommendedmakingtheprojectdistributionfair
byallowingallqualifyingfirmstobecomepartofthebiddingprocess.
Interviewee#CON48,aDBE/MBEcertifiedAfricanAmericanmaleownerofanelectrical
contractingfirm,indicatedthatpriortothepassageofProposition209,85percentofhis
businesswasattributabletohisDBEcertification;nowitislessthan1percent.Hestatedthathe
wouldlikethecertificationtomeansomething.
Interviewee#CON49,aMBE/SCRPCcertifiedAfricanAmericanmaleownerofajobtraining
firm,recommendedthattheConsortiumhaveaninitiativebasedonethnicstatus.Hefeelsas
thoughthiswouldhelpfightdiscrimination.
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