The National Association of Minority Contractors – Wisconsin (NAMC-WI) on Wednesday responded to the Wisconsin Department of Transportation (WisDOT) report on disadvantaged business enterprises after it found disparities for how the study addressed the distribution of state contracts.
In September, a study by WisDOT and University of Wisconsin – Milwaukee found the state transportation department had been successful overall meeting its DBE goals, while some firms believed more could be done to maximize participation and strengthen relationships.
Research goals included maximizing participation Wisconsin DBE owners and firms in federally funded construction and professional contracts that WisDOT would award, as well as identify and remove barriers for eligible DBEs.
The research highlights WisDOT’s DBE program progress over the last few years, but there was still room to grow to serve its purpose, Madalena Maestri, the DBE program chief for WisDOT, said in a statement.
“This research highlights the progress made in WisDOT’s DBE program over the last few years and points to where we still have room to grow in serving and supporting DBE firms. The technical training and business building pilot shows promise of being a very effective scaffolding tool for increasing DBE efficacy and growth,” Maestri added.
Wisconsin minority contractor association said there’s gaps in how contracting is handled, survey results and previously published research
NAMC-WI, which is a consortium of diverse-owned businesses and represents diverse business in the construction industry, reported it was concerned with several findings in WisDOT’s Maximization of Disadvantaged Business Enterprise (DBE) Participation report.
The statistics show while WisDOT meets its overall DBE goals, there was a highly disproportionate number of contractors and dollars going to DBEs owned by white women compared to Black DBE owners, who make up a larger share of registered firms but receive a smaller share of contracts.
In the study, researchers said “lack of business and management acumen” was one of the barriers for qualified DBEs. In its response, NAMC-WI officials cautioned WisDOT to avoid blaming the victim in its rationale and added that historic barriers and access to opportunities contribute to the disparity.
The report also credited a lack of access to capital, bonding and insurance as a major barrier for DBEs in the highway construction industry. Other barriers included lack of financial and human capacity and low opportunities for strategic and professional networking.
The study said most DBEs reporting positive feelings about WisDOT and the DBE program, however NAMC-WI officials said this finding appears to be biased and not a strong representative sample given the survey reached out to only 31 local DBE firms. The study group sent out 275 surveys and had a response rate of 11%, officials added.
The report concludes that the state’s DBE program’s major weakness was viewed as frequently awarding DBE contracts to the same firms, a lack of buy-in from DOT project managers and the perception there are no clear participation benefits to consultants and more established older firms, officials said. Serial contracting is a historical problem and DBEs are often excluded from this practice, officials added.
The report also lacks a literature review on DBE participation. A literature review or citing previous supporting research is common for similar research reports, officials said.
NAMC-WI will work with WisDOT to increase contracting for infrastructure projects
“For us to maximize the impact of the DBE Program, we have to be more intentional and deliberate in making sure general contractors provide access to opportunities for ethnic diverse businesses,” said Ugo Nwagbaraocha, board president of NAMC-WI and owner of Diamond Discs International.
NAMC-WI is currently working with WisDOT higher officials for a partnership to deliver diverse primary contracting on infrastructure projects, officials said. The partnership would create an initiative to have more diverse business participation on major contracting opportunities on WisDOT projects, officials added.
The association is conducting its own DBE building capacity research analysis by DEI experts, officials noted. NAMC-WI aims to collaborate with WisDOT to set new directions for the DBE program and support services for ethnically diverse DBEs, officials added.
A spokesperson for WisDOT said the agency will continue to improve its DBE program.
“WisDOT values its longstanding partnership with NAMC-WI and remains committed to continuous improvement of the Disadvantaged Business Enterprise (DBE) program. DBE firms are a vitally important part of delivering quality infrastructure to millions of people in the traveling public. The department continues to work closely with industry and the DBE firms themselves to ensure stronger relationship development that is being reflected in project bids. The department has met its DBE goal for each of the past three years. We will continue to focus on collaboration within the industry to administer a program we can all be proud of,” WisDOT officials added.
According to the study, WisDOT’s DBE program provides opportunities for disadvantaged companies to participate in federally assisted highway contracts. WisDOT is required to develop, implement and maintain the program because it receives U.S. Department of Transportation funding. The program was reauthorized in the Infrastructure Investment and Jobs Act, according to the Federal Highway Administration.