Manitowoc Pledges to Help Reconstruct Notre-Dame

NCDOT Changes Minority Contract Regulations to ’Goals’

Fri September 22, 2006 - Southeast Edition
Giles Lambertson



The pursuit of North Carolina Department of Transportation (NCDOT) contract goals for minorities and women in the Tar Heel State has taken a slightly different course now that Gov. Mike Easley has signed legislation approved in the last General Assembly session.

The department is directed to pursue annual “aspirational goals” rather than goals stipulated in individual transportation contracts. The change is dismissed as “minor tweaking” by some industry observers, but condemned by others.

The new rules eliminate a rigid contract-by-contract goal of 10 percent of contracts going to businesses owned by minorities and 5 percent to businesses owned by women. Instead, lawmakers ordered the department to implement a more flexible contracting process based on the needs of a project and availability of firms. Still, the new guidelines retain the 10 percent and 5 percent goals.

“The change is very, very minor,” said Bill Marshburn of D.J. Rose and Son Inc., a Rocky Mount contractor. Marshburn is chairman of the N.C. Legislative Committee of Carolinas Associated General Contractors (AGC). “It is no type of sweeping change of rules. It’s minor tweaking. You’ll never see much happen from it.”

NCDOT Assistant Secretary Jan Bryant agreed. “Any goal is an aspirational goal. I don’t see this as any sea change.”

However, some black leadership groups in the state were adamantly opposed to the governor signing the legislation into law. Opponents included the North Carolina Black Leadership Caucus and the state chapter of the NAACP.

“This bill is a start to the end of all statewide [minority contract] programs,” Sylvia L. Grier of the Charlotte business consulting firm B.I.R.S. International Inc. is quoted in The Wilmington Journal, a black newspaper.

Yet in the end, nearly all black legislators supported the bill. That support came from the understanding that a lawsuit pending against the DOT and its mandated minority participation might well succeed and leave the department with no legal contracting goals.

“The reality of it all is that if our existing statute had been overturned without this legislation in place, we would have had no program. We could have set no minority or women’s goals,” said Roberto Canales, DOT deputy secretary of transit.

The challenge for any state agency that wants to give minority-owned businesses a fair shot at state contracts is to differentiate between what Canales calls “quotas and true goals.” Legal language on goals contained in the previous statute was crafted in the 1980s and had “aged out,” the deputy secretary said. This presumably is why the governor superimposed the language of the new DOT guidelines on all state agencies, simultaneously signing the legislation and issuing an executive order calling for applying the more legally acceptable “aspirational goals” to all state contracts.

Canales said that, though it can be difficult “to show there is underutilization of minority and female representation in contracts, the experience elsewhere is that utilization of minority and women’s goals tends to drop” when such programs are not in place.

The lawsuit that sparked the legislation was filed by the Southeastern Legal Foundation on behalf of Mount Airy contractor H.B. Rowe Inc. The company lost a low-bid DOT road contract because it fell short of meeting minority contract provisions and could not prove “good faith” efforts in trying to meet them. DOT officials said the higher bidder winning the contract could prove its efforts to attract minority subcontractors, even though that company also failed to meet the 10 percent and 5 percent goals.

“DOT will probably lose that challenge,” said Barry Jenkins, director of the North Carolina highways divisions of Carolinas AGC. “The DOT kind of applied the current program like a quota system. I don’t think it was ever intended to be applied that way. Everyone knows by now that quotas are not legally defensible.”

Jenkins said DOT officials now have put in place programs to prepare minority business owners for more participation in contract work. “One of the realizations DOT came to was that it has to do a lot of supportive training,” he said.

Carol Chapman, who this month became immediate past president of the National Association of Women in Construction (NAWIC), said she has “mixed feelings” about the new DOT rules. Chapman is owner of Mobile Construction Co. in Charlotte.

Chapman said that while she believes in winning each bid on merit alone, she realizes “it is very advantageous to have big contractors do the right thing in their subcontracting” by soliciting contract work from small minority and women’s firms.

“I hope companies give ample consideration” to these small firms under the new rules, she said.

NAWIC has a diverse membership of 5,500 women, including architects, engineers, project managers, estimators and business owners. The organization’s Women Business Owners Council discussed the impact of the North Carolina rules change, Chapman said.

But that was not the major focus of conversation at the NAWIC annual convention in Kansas City, MO, earlier this month. Chapman said more people were talking about “cleaning up the image” of construction in general so that the industry can attract more young men and women. She said that reversing current demographic trends within the industry are vital to the future of all construction companies in this country. CEG