Estimation of race-neutral goals in public procurement and contracting

Abstract

Federal guidelines require that public entities receiving federal transit authority (FTA) funds take affirmative steps to allocate funds to disadvantaged business enterprises (DBEs). Business firms owned and operated by women and/or racial minority group members are presumptively classified as disadvantaged. To assure that the affirmative efforts to allocate contract dollars to DBEs don't discriminate against nonDBEs and white male-owned firms, the guidelines require that maximum use of race-neutral means be adopted to assure the inclusion of women and minority-owned firms in public contracting. The guidelines do not provide specific guidance on how to determine the size of the race-neutral portion of contracts awarded to DBEs. This article provides an empirically valid and easy to implement method for achieving race-neutral goals when a public agency or authority collects information on contracts with and without targeted goals.

Notes

¹ Although there is no penalty for failure to meet a goal, there are sanctions for noncompliance in setting goals or for failure to perform in good faith.

² Final Report to Establish New Jersey Transit's FY06 DBE Goals, Ray Wilkins Center for Human Relations and Social Justice, Hubert H. Humphrey Institute of Public Affairs, University of Minnesota, December 2005.