Minority-owned firms receiving fewer stimulus contracts
Hispanic and black businesses are receiving a disproportionately small number of federal stimulus contracts, creating a rising chorus of demands for the Obama administration to be more inclusive and more closely track who receives government-financed work.
Latinos and blacks have faced obstacles to winning government contracts long before the stimulus. They own 6.8 and 5.2 percent of all businesses, respectively, according to census figures. Yet Latino-owned business have received only 1.7 percent of $46 billion in federal stimulus contracts recorded in U.S. government data, and black-owned businesses have received just 1.1 percent.
That pot of money is just a small fraction of the $862 billion economic stimulus law. Billions more have been given to states, which have used the money to award contracts of their own.
Although states record minority status when they award contracts to businesses, there is no central, consistent or public compilation of that data, according to Laura Barrett, director of the Transportation Equity Network.
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Minority businesses are often too small to compete for projects; do not have access to the necessary capital, equipment or bonding requirements; or lose bids to companies with well-established relationships. There also has been an emphasis on spending stimulus money quickly, which favors businesses that have won past contracts.
But minority advocates say that blacks and Latinos have been harder hit by the recession, and getting a fair share of stimulus contracts is key to the recovery of these communities.
The Obama administration has taken steps to address minority concerns. Transportation Secretary Ray LaHood wrote governors in December urging them to work with disadvantaged businesses. LaHood suggested unbundling large contracts to make them more accessible to small businesses, and emulating a Missouri contracting project that made community groups and openness part of the process.
(Copyright 2010 by The Associated Press. All Rights Reserved.)
