Caltrans receives more than $4 billion annually in federal funds for construction projects. Nearly one half billion dollars(13.5% ) is earmarked for small, women and minority owned businesses at $540 million dollars. But these groups only receive $160million (3-4%).
Senator Curren Price, D-Los Angeles wrote SB1215 to remedy this imbalance. The bill provides access for all transportation qualified architectural and engineering firms to have an opportunity to be awarded contracts.
The bill would establish a ranked prequalified list of small, medium and large professional service firms and would have prevented large firms from dominating the categories.
Price said presently six or seven large firms do 90% of all Caltrans engineering work, while hundreds of highly qualified firms have little chance of being awarded a contract.” We must pass this work around.”
Assemblyman Furutani, D-Long Beach, supported Price and said the bill “would level the playing field for those who are professionally qualified.”
The bill failed by just one vote.
Diana LaCome, Chair, Caltrans Construction Committee, Statewide Small Business Council (SBC), expressed the statewide outrage from minority firms when she said those who voted against the bill are “helping large companies “squeeze” small firms out of the whole procurement arena.”
The American Council of Engineering Companies (ACEC) argued that 1215 would restrict market competition. The SBC countered with the claim that the market is monopolized by a small number of large firms under the Caltrans selection boards.
“The bill was expected to not only facilitate small business awards but triple the 3.5% combined minority and women business participation within two years and provide substantial cost savings to Caltrans in its selection process,” stated Fred Jordan, President of SF African American Chamber of Commerce and councilmember of the Caltrans State Small Business Council. Examples of the disproportionate amount of work awarded to larger companies included a firm that won 13 contracts totaling $147 million which averaged a new multi-million contract every 3 months, while hundreds of qualified firms go begging.
The same firm has been short listed on 2 of the 3 contracts and there is no doubt that the Selection Committee would not have a problem selecting this firm for both. A short listed firm with over 20,000 employees and another firm with over 40,000 employees, received 8 to 10 contracts in the same time period are also short-listed for a $1 to $3 million contract.
“Breaking projects down or ‘unbundling’ does not change the playing field,” said Eddy Lau, President of the Asian American Architects and Engineers. “Caltrans selections perpetuate monopolies.” Lau said.
Jordan said Caltrans cannot hide behind its “specialized understanding of the work required,” statement because the contracts are more like a “temp agency” or “body shop” where engineers are supplied to a project where they are completely managed by the Caltrans Resident Engineer.”
He said the process is unfair because,” Other firms can supply qualified personnel, but otherwise can’t buy a contract.”
The SBC expressed disappointment with Assemblywoman Galgiani, D-Tracy, who did not vote, because she is a major sponsor of the California High Speed Rail Project which has awarded most of the environmental and preliminary design work of the $442 billion State contract to only seven large firms.
By contrast, according to Jordan, a minority engineering firm that participated in the $4 billion Amtrak Project some years ago between Washington, DC and Boston, said over 100 prime consultants and 300 firms were included.
According to, Diana LaCome, a Title 6 Violations (Civil Rights)complaint filed by La Raza Roundtable of California and 18 other groups with the Federal Attorney Generals Office and USDOT in February.
The complaint included “not meeting the goals, not following federal regulations and keeping Hispanics and Subcontinent Asians out of the Disadvantaged Business Enterprise (DBE) program.
A 2005 disparity study showed discrimination against Blacks, Asians, women and American Indians as being below parity.
“Why is 90-96% of all public works dollars not enough for the large companies? Why do small minority and women owned businesses have to fight so hard just to get 3-4% of the pie? Where is the “level playing field” that DOT is promoting? Not in California, that’s for sure,” added LaCome.