Table 1.16: Prime Contracts Awarded by Public Works Department without Competitive Bidding, July 1, 2016 to June 30, 2021
Number Percent A mount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 0 0.00% $0 0.00%
Asian Americans 7 11.29% $2,580,952 7.32%
Hispanic Americans 1 1.61% $2,780,000 7.89%
Native Americans 1 1.61% $8,622 0.02%
Caucasian Females 2 3.23% $347,523 0.99%
Non-minority Males 51 82.26% $29,526,470 83.78%
TOTAL 62 100.00% $35,243,567 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 0 0.00% $0 0.00%
Asian American Females 3 4.84% $1,892,836 5.37%
Asian American Males 4 6.45% $688,117 1.95%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 1 1.61% $2,780,000 7.89%
Native American Females 1 1.61% $8,622 0.02%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 2 3.23% $347,523 0.99%
Non-minority Males 51 82.26% $29,526,470 83.78%
TOTAL 62 100.00% $35,243,567 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 4 6.45% $1,901,458 5.40%
Minority Males 5 8.06% $3,468,117 9.84%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 9 14.52% $5,369,574 15.24% Woman Business Enterprises 6 9. 68% $2,248,981 6.38%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
1-53
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
Table 1.17 shows the ethnicity of the prime contractors awarded the 62 contracts without competitive bids. The 62 contracts were received by 47 non- minority males, four Asian Americans, two Caucasian Females, one Hispanic American, and one Native American business.
The 47 non-minority businesses received 211 prime contracts during the study period with a total value of $71,055,885, or 14.6% of the total dollars awarded during the study period.
Table 1.17: Prime Contracts Awarded Using Competitive Bid Waivers by Ethnicity July 1, 2016 to June 30, 2021
Businesses Number of Prime Contracts Dollar Value
47 Non-minority Males 211 $71,055,885
4 Asian Americans 20 $6,301,398
2 Caucasian Females 9 $1,461,794
1 Hispanic American 14 $19,270,238
1 Native American 5 $47,232
The City’s use of the four discretionary procurement policies provides compelling evidence of preferential treatment afforded to non- minority males when awards are made without competitive bidding. This pattern mirrors the contractor selection made by staff when the contracts were competitively awarded.
VIII. Conclusion
The perceptions of both Oakland business owners and City staff regarding the effectiveness of the L/SLBE Program reveal significant similarities. There was consensus that the goals of fostering economic growth, creating job opportunities, and advancing equity and inclusivity are commendable, but the implementation was found lacking in promoting the utilization of L/SLBEs on City contracts.
Business owners identified several practices that hinder their participation in the program. These include a complicated and slow certification process, inadequate enforcement of payment requirements, ineffective implementation of incentives, failure to implement the MPSLB Program, and non-compliance with participation requirements. These conditions have created barriers for L/SLBEs seeking to benefit from the program.
On the other hand, interviews with City staff have shed light on policies that impede the effective implementation of the L/SLBE Program. The use of waivers to circumvent program goals, discretionary award practices, and the use of cooperative agreements that bypass competitive processes and L/SLBE requirements were identified as key concerns. Additionally, the absence of written standard operating procedures and training on the L/SLBE P rogram requirements, procurement, and contracting procedures has further hindered the successful implementation of the L/SLBE Program.
Both business owners and City staff have highlighted the need for improvement in aspects of the program. Enhanced communication, clearer procedures, stronger enforcement, streamlined processes, and increased transparency in the contracting system are a few standards identified to
1-54
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
address perceived barriers to contracting opportunities. While modifications to these policies and practices might improve L/SLBEs’ access to City contracts, there is no evidence that they would eliminate the documented statistically significant disparity in the award of prime contracts and subcontracts to minority and women-owned businesses.
This efficacy analysis of the race and gender -neutral L/SLBE Program highlighted that the program failed to achieve its stated goal of increasing economic opportunities for Oakland businesses, which has been the procurement standard for three decades. Furthermore, the disparity findings on the contracts awarded to L/SLBE-certified firms are consistent with the findings from the two previous disparity studies. Over the last 13 years, the L/SLBE Program has not been able to eliminate the disparity in the participation of L/SLBEs in the awarding of City contracts.
Statistical disparity was also found in the award of on-call, emergency, cooperative agreements, and contracts awarded without a competitive bid process. The City’s use of the four discretionary procurement policies provides compelling evidence of preferential treatment afforded to non - minority males when awards are made without competitive bidding.
A. Measures to Revamp the L/SLBE Program
The City staff and business community offered several recommendations to remediate the City’s current L/SLBE Program’s shortfalls in achieving the stated objectives and ensuring fair and equitable distribution of City contracts . The proposed remedies to improve the existing L/SLBE Program and mitigate the documented discrimination against minority and women -owned businesses include the following.
1. Structure the Certification Process
Business owners have expressed concerns regarding the complexities associated with the L/SLBE certification process. Small businesses have reported challenges in navigating the platform , compiling the necessary documentation, and the timeliness of the City’s processing of the application, resulting in delays in the certification process. To address these issues, it is crucial for the City to provide tailored administrative support and streamline the certification process to improve efficiency and reduce wait times. By implementing measures to expedite the certification process, such as dedicated staff and improved online navigation, the City can ensure that small businesses receive their certifications in a timely manner. Timely certification will enhance their ability to participate in public contracting opportunities and contribute to more inclusive contracting policies.
2. Enhance the B2Gnow Certification Application Process
The L/SLBE certification system was migrated from iSupplier to B2Gnow in 2022. The current certification standard is a two -step process. The first step requires an applicant to register on iSupplier to receive an identification number by email. The second step requires completing a digital application on B2Gnow and uploading supporting documents.
The application has four sections: General Information, Business Information, Ownership and Financial Information, and Goods/Services and Equipment. The documents that must be uploaded
1-55
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
include a current Oakland Business Tax Certificate, Form W-9, Federal Tax Returns, and Current Lease/Rental Agreement. Upon completing the application and uploading the documents, the applicant is not provided with any information regarding the status of the application.
The site does not specify the subsequent steps in the certification process. Nor is there any information regarding the timeline for the certification application review or approval process.
There is a Help & Support tab on B2Gnow for the applicant to submit a customer support request while completing the application. There is, however, no alternative method to seek needed information or clarification regarding the submitted application.
Recommendations to improve the application process include the following. C ertification review should include both a desk audit and a site visit. The review should be conducted in a timely manner in accordance with a published schedule. Incomplete applications should be flagged within seven days of receipt and returned. Complete desk audits and site visits should be performed within ten days, and the decision should be issued within ten days of receipt of a complete application.
Expedited certification should be available in the event the applicant is bidding on a contract.
3. Enhance the Notification Function of the iSupplier System
Solicitations for formal contracts are required to be posted on iSupplier. Informal solicitations, emergency contracts, and solicitations slated to be awarded as cooperative agreements should also be posted.
All formal solicitations should be posted at least 45 days before the due date. Emergency solicitations should be posted within 24 hours of declaring the emergency. The intent to award a cooperative agreement should be posted at least ten days before the i ntended award date to allow certified businesses that offer the goods or services to compete.
There is a filter to allow the visitor to review the phases of activity on each listed solicitation from publication to award. The system should be expanded to provide additional information on the procurement phase. In addition to the buyer’s name, the project manager’s name should be posted with an email address and deadline to submit questions.
Information should also be published on the contracting phase. The intent to award should be posted at the time the contract is placed on the City Council agenda for award. The evaluators’ score sheet, winning proposal, and bid ranking sheet should be post ed 24 hours after the City Council approves the contract.
4. Include Subcontracting Provisions in the L/SLBE Program
While Small Local Business Enterprises (SLBEs) may meet the full 50% L/SLBE participation requirement, Local Business Enterprises (LBEs) must meet this requirement with a minimum participation of 25% for LBEs and 25% for SLBEs. Businesses observed that there are no provisions in the L/SLBE Program to subcontract with SLBEs. Since a prime contractor would have to meet 25% of the required participation with a subcontractor, the program should include the subcontracting provisions to make the 50% participation requirement attainable for LBEs.
1-56
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
5. Establish Standard Operating Procedures
Standard Operating Procedures (SOP s) provide guidelines to ensure uniformity in departments’ procurement and contracting processes. However, only two departments had an SOP and used the same one. The managers suggested that each department should create an SOP to standardize their adherence to the requirements for procuring goods and services as specified in Chapter 2.04 – Purchasing System of the Oakland Municipal Code . The SOP should include guidance for implementing the L/SLBE and M/WBE programs.
In addition, the Department of Business and Economic Development (DBED) should prepare an SOP to standardize the implementation of the L/SLBE and M/WBE program requirements. The DBED’s SOP should be included in each department’s SOP to ensure the L/SLBE and M/WBE programs are uniformly implemented across the City departments.
The DBED’s SOP should define the program requirements and the timeline for implementation within the procurement and contracting process. Staff with responsibility for executing the requirements should be named in the SOP. The SOP should serve as a reference point for staff members involved in procurement and contracting to consistently adhere to the L/SLBE and M/WBE program requirements.
6. Eliminate the L/SLBE Waiver
A waiver provision allows a department to advertise contracts without including the L/SLBE participation requirements, thus exempting a significant number of contracts from the program requirements. The L/SLBE waiver provision should be eliminated.
7. Modify the Schedule R Subcontractor, Supplier, Trucking Listing Form
Schedule R must be submitted with each bid. The City staff suggested that t he form should be modified to include a listing of every subcontractor, regardless of contract value, and the NAICS code(s) for the type of work each subcontractor is to perform. In addition, the timeline for performing the subcontractor, supplier, or trucker’s item(s) of work should be stated by month or phase of the scope of work.
8. Modify the Schedule E Project Consultant Team Listing Form
Schedule E must be submitted with each proposal and statement of qualifications. The form should be modified to require the listing of each subcontractor to meet the L/SLBE participation requirement and include the NAICS code for the type of work each subc ontractor is proposed to perform. The timeline for the subcontract work to be performed should be stated for each subcontractor by month or phase of the work.
9. Institute a Subcontractor Payment Verification Program
Subcontractors highlighted concerns about payments. Payments that prime contractors make to subcontractors should be verified by the subcontractors to substantiate the L/SLBE Program and
1-57
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
enhance the current prompt payment policy, which requires undisputed invoices to be paid within 20 business days. DBED should ensure that any tracking system that is implemented has the capability to monitor compliance with Schedules R and E and the prompt payment policy. An effective tool should allow subcontractors to notify the City of late payments or non- payments in real time. In addition, each subcontractor listed as paid for the previous billing cycle should be contacted electronically to verify that payment was received. This verification procedure should eliminate reliance on self-reporting by the prime contractors.
If a subcontractor reports a discrepancy in the amount received from the prime contractor, the discrepancy should be resolved before any additional payments are made to the prime contractor.
The simplest resolution would be to have the prime contractor submit proof of payment with each invoice, such as an image of the canceled check written to the subcontractor to pay for the relevant invoice. The particulars of the payment verification program should be published on the DBED webpage, solicitation documents, and the contract. The prime contractor’s compliance with the payment verification program should be a mandatory provision of the prime contract.
10. Establish Complaint and Protest Procedures
Establishing complaint and protest procedures for L/SLBEs was identified by both City staff and businesses as crucial to ensure fairness and transparency in the L/SLBE Program. At present, the program lacks a mechanism for businesses to voice their concerns or challenge City decisions related to L/SLBE certification, contract solicitations, award decisions, and other pertinent issues.
Developing a comprehensive process with written standards and clearly defined procedures is recommended for businesses to submit complaints or protests. This standard should include guidelines for documentation submission, a designated review board or entity to impartially assess complaints, a timeline for resolution, and provisions for appeals if necessary.
11. Enhance Requirements for the Mandatory Preferred Small Local Business Program
The Mandatory Preferred Small Local Business Program (MPSLBP) is supposed to limit competition on construction and professional pre -construction services under $250,000 to pre - qualified small local businesses. It is reported that this standard is not being applied. Per the businesses and City managers’ recommendation, t he requirement should be extended to professional services contracts under $250,000.
The current process assumes that each department will identify solicitations with an estimated value of under $250,000 that should be advertised through the MPSLBP. To ensure that pre - qualified L/SLBEs are presented with the opportunity to bid on solicitations through the MPSLBP, the contracts valued at $250,000 and under should be identified in sufficient time to allow bids to be solicited from SLBEs.
Each department should prepare a quarterly list of solicitations for construction, architectural and engineering, and professional services projects with an estimated value of $250,000 and under.
The list should be submitted to the DBED at least 60 days before the proposed advertisement date.
The list should minimally include an annotated summary of the scope of work and an estimated cost. The DBED should notify the SLBEs in the relevant industry and request a letter of interest.
1-58
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
If two or more SLBEs in the relevant industry, trade, or profession are present on the L/SLBE certified list and express an interest, the solicitation must be advertised under the MPSLBP.
12. Apply L/SLBE Participation Requirements to Cooperative Agreements
The 50% L/SLBE participation requirement is mandatory for all construction contracts at or over $100,000, all professional services contracts at or over $50,000, and all purchases of commodities, goods, and associated services at or over $50,000. Yet, this requirement, as the contractors noted, has not been applied to cooperative agreements the City awards. The L/SLBE participation requirement should be applied to cooperative agreements to eliminate the possibility of circumventing this requirement.
13. Conduct Targeted Outreach to L/SLBEs
There is a consensus among businesses and City staff that the number of L/SLBEs awarded both prime contracts and subcontracts should reflect the availability of Oakland small businesses.
Increases in the number of contracts awarded to L/SLBEs require both an increase in the number of bidders and modifications to the procurement practices. Standardized solicitation practices were singled out as one of several strategies that might increase the number of Oakland businesses bidding. Adherence to the following steps by City departments was suggested to increase the number of bids received from Oakland businesses were recommended:
• Request lists of certified businesses from the DBED when soliciting responses to solicitations.
• Ensure that L/SLBEs with statistically significant underutilization are invited to respond to solicitations.
• Perform targeted outreach to L/SLBEs before releasing the solicitation to notify the business community of the upcoming opportunity.
• Where economically and technically feasible, encourage the formation of joint ventures, partnerships, and other similar arrangements among the L/SLBEs with a statistically significant underutilization.
• Unbundle large contracts to create more opportunities for L/SLBEs. • Limit the practice of extending contracts through no-bid change orders to conditions where the modification is necessary to complete the original scope of work.
14. Monitor L/SLBE Participation after the Contract Award
For the integrity of the program, businesses suggested that the DBED should approve any proposed change in the participation of L/SLBEs. A contractor that reduces a certified business’s scope of work without adhering to the City’s substitution provision should be subject to liquidated damages equal to the value of the scope reduction. If the reduction of participation is approved, the DBED should assist the department to find another c ertified business to maintain the participation listed on Schedules R and E.
Each prime contract should contain a project work plan or schedule of values that stipulates the phase of the work and the item of work to be performed or supplies to be delivered by each L/SLBE listed in Schedules R and E. In each invoice or request for payment, the prime contractor should
1-59
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 1: Local and Small Local Business Enterprise Program Analysis
report the L/SLBE year-to-date invoice amount and percentage of participation. The subcontractor should verify payment. Utilizing an electronic tracking system would allow the reporting to occur in real time and enable the DBED to monitor participation through the payments to L/SLBE in accordance with the project delivery schedule.
15. Track and Verify Subcontractor Participation with Each Payment Application
Tracking s ubcontractors’ participation with each payment application submitted by the prime contractor was considered a necessary best practice. The participation tracking process should require prime contractors to submit a monthly L/SLBE utilization report with their payment application through an electronic compliance monitoring module.
16. Publish Quarterly L/SLBE Utilization Reports
Publication of utilization reports was considered an effective method to measure compliance with the L/SLBE Program. Findings should be published quarterly and at a minimum include year -to- date payments made to L/SLBEs, the original award amounts, and contract modifications. For each awarding department, the report should include the number of awards to L/SLBEs.
The fourth- quarter report should include an assessment of program activities as well as the departments’ exemplary practices and achievements. The utilization report should be posted on the DBED’s webpage and provided to the City Council.
17. Create a Business Advisory Task Force
To support the City’s efforts in meeting its L/SLBE prime contract and subcontract goals, the businesses proposed that the City establish a Business Advisory Council, appointed by the Mayor and the City Council, to advocate for the L/SLBE Program. The Business Advisory Council would serve as advisors to DBED and be responsible for:
• Increasing access to contracting opportunities for L/SLBEs. • Reviewing and advancing initiatives that impact L/SLBE participation. • Enhancing the notification process regarding prospective contract opportunities.
The Business Advisory Council membership and guidelines should be published on the DBED webpage. The Business Advisory Council should include 10 members, but not more than 15, and one member should not serve more than two terms. Members should serve for staggered terms of three years.
18. Conduct an Analysis of Contracts on an Annual Basis
Transparency in contract reporting was of paramount importance to the businesses. As proposed, there should be an L/SLBE Program analysis of the previous year’s contracts. The analysis should cover the contracts awarded to L/SLBEs, waivers granted, and other program components. The analysis should be presented before the City Council.
2-1
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
CHAPTER 2: Federally Funded Contracts
Analysis
I. Introduction
This chapter analyzed the contracts awarded during the study period that were funded in whole or part by a federal grant received directly from the United States government or as a subrecipient to either a California S tate department or local agency. The City’s compliance with the affirmative action requirements associated with the federal assistance was assessed. This review did not consider the City’s spend of its federal assistance funding with not-for-profit entities.
The review of the prime contracts in the Oracle database revealed 13 federal funding sources and 442 federally assisted contracts awarded during the study period from July 1, 2016 to June 30, 2021.
These federally assisted prime contracts totaled $112,049,675 and represented 23.02% of the total prime contract dollars the City awarded during the study period.
Each federally assisted contract had an affirmative action requirement under the provisions of Title VI of the Civil Rights Act of 1964. The Act prohibits discrimination on the basis of race, color, or national origin in any program or activity that receives federal funds. Contra cts with the United States Department of Transportation (USDOT) funding assistance had an additional regulatory requirement to contract with disadvantaged business enterprises (DBE).
II. Federally Assisted Prime Contracts
Several approaches were employed to identify the 442 federally assisted prime contracts awarded to for-profit entities. This analysis did not assess agreement awards the City made to non- profit organizations. The initial method required the departments to identify their federally assisted contracts. The 28 departments with the largest contracts and highest total spend were asked to provide a list of their federally assisted prime contracts. A total of 125 contracts were identified by nine departments. Eight een departments reported having no federally assisted prime contracts.
Given the responses, an alternative approach was employed when it was determined that the Oracle financial system coded the funding source for each prime contract in a field entitled “Fund Desc.” There were 141 funding sources noted in the “Fund Desc” field. Twelve were federal agencies/departments, ten were State of California departments, and 119 were local funding sources. The California Department of Transportation (Caltrans) was the only state department the City identified as a source of federally assisted funding.
Table 2.1 lists the ten federal agencies and one state department that provided federal ly assisted funding.
2-2
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.1: Federal Assistance Funding Sources
Direct Federal Government Funding Sources
CARES Act Relief Fund
Department of Agriculture
Department of Health and Human Services
Department of Homeland Security
Department of Justice
Department of Labor
Department of Transportation
Federal Action Agency
Federal Emergency Management Agency
Housing and Urban Development Department -
Community Development Block Grants,
Emergency Solutions Grants, and Supportive
Housing Program/Housing Opportunities for
Persons with AIDS
State and Local Government Funding Sources
California Department of Transportation
Metropolitan Transportation Commission
T
he number of federally assisted prime contracts awarded and the total value of the prime contracts awarded are presented in Table 2.2.40 The federally assisted prime contracts represent 19.52% of all prime contracts the City awarded during the study period and 23.02% of all prime contract dollars awarded.
T
able 2.2: Federal Assistance Funded Prime Contracts
Contracts
Number
of
Contracts
Awarded
Percent
of All Contracts
Awarded
Amount
of All Dollars
Awarded
Percent
of All Dollars
Awarded
Federally Assisted
Prime Contracts 442 19.52% $112,049,675 23.02%
Non-Federally
Assisted Prime
Contracts
1,822 80.48% $374,656,232 76.98%
Total Prime Contract
Awards 2,264 100.00% $486,705,907 100.00%
40 T he federally assisted prime contracts awarded to non -profit entities are not included in this analysis.
2-3
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
III. Business Affirmative Action Requirements for Federal Assistance Grants
All federal assistance grants for the procurement of goods and services require compliance with Title VI of the Civil Rights Act of 1964 (42 U.S.C. § 2000d) . This law precludes recipients of federal assistance from discriminating on the basis of race, color, and national origin in funded programs and activities. Recipients of federal assistance grants from the USDOT and Department of Housing and Urban Development regulations are required to comply with additional affirmative action requirements that stipula te contracting goals for DBEs on their federal ly assisted contracts.
A. Title VI of the Civil Rights Act of 1964
To demonstrate compliance with the contracting provisions of Title VI, recipients must establish clear procedures for monitoring and addressing complaints of discrimination. This includes promptly investigating any allegations of non- compliance with the provisions of Title VI and taking appropriate corrective actions when necessary. Additionally, recipients are required to maintain records and reports related to their compliance efforts, which may be subject to review by the federal agency granting the funds.
Failure to comply with Title VI can have consequences for recipients. These may include the termination or suspension of federal funding and potential legal action. Recipients are expected to prioritize Title VI compliance to ensure fair and equitable trea tment of all businesses involved in federally assisted prime contracts.
1. The City’s Responsibilities under Title VI
Under Title VI, the City of Oakland, as a local public agency (LPA) recipient of federal funds, has specific responsibilities to ensure compliance with Title VI regulations and promote equal access to federally assisted prime contracts and services. The responsibilities and obligations include the following:
a. Employ a Title VI Coordinator
A Title VI Coordinator shall be designated and have a responsible position in the City of Oakland.
The Title VI Coordinator must have easy access to the chief executive officer, who in a municipality is the mayor. The Title VI Coordinator shall be known to the public via postings in public areas or on the City’s website.
b. Title VI Nondiscrimination Statement
The City must develop a Title VI policy statement signed by the mayor. The statement must give a reasonable guarantee that the programs administered are conducted in compliance with Title VI nondiscrimination requirements. The signed statement must be easi ly accessible to the public via postings in public areas and/or on the City’s website.
2-4
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
c. Dissemination of Title VI Information
Title VI information must be developed for dissemination to the public and, where appropriate, in languages other than English. The information minimally should include posters, brochures, flyers, “frequently asked questions” documents, and a web page.
d. Title VI Training for City Staff
Title VI training must be provided for managers, supervisors, and staff with frequent public contact. Employees must comply with Title VI in their day -to-day activities and shall minimally complete comprehensive Title VI training every two years.
The City must develop procedures for the collection of statistical data by race, color, and national origin for the participants in, and beneficiaries of, federally assisted prime contracts. The City shall analyze the data collected to determine the effectiveness of outreach methods in order to ensure that every group is included in the decision-making process and given an opportunity to voice their opinions or concerns with no exclusions.
e. Title VI Complaint Procedures
The City is required to adopt procedures that incorporate appropriate due process standards and provide for the prompt and equitable resolution of complaints alleging discrimination based on race, color, or national origin.
B. USDOT DBE Program
The USDOT DBE Program requirements are set forth in the DBE regulations, 49 Code of Federal Regulations Part 26 and Part 23. The DBE regulations require local governments that receive federal assistance directly from the USDOT or as a subrecipient to a grantee to establish goals for the participation of DBEs in all federally assisted transportation contracts. The City, as a subrecipient of USDOT funding from Caltrans, is obligated to comply with the terms of the California Department of Transportation Disadvantaged Business Enterprise Implementation Agreement to Implement the State of California, Department of Transportation DBE Program Plan (DBE Program Plan). The Agreement, which must be signed annually, stipulates the DBE requirements that the City must adhere to as a subrecipient of USDOT financial assistance.
The Agreements during the study period from July 1, 2016 to June 30, 2021, required meeting the maximum feasible portion of the overall Annual Statewide DBE Goal using race-neutral and race- conscious means.
Between the July 1, 2016, and June 30, 2021 study period the City awarded 66 contracts valued at $44,879,298 dollars with its federal assistance funds received as a subrecipient to the California Department of Transportation and the Metropolitan Transportation Commiss ion. Caltrans and
2-5
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
each of its subrecipients, including the Metropolitan Transportation Commission, were obligated to comply with the DBE regulations.
1. Caltrans’ Recipients DBE Requirements
a. Nondiscrimination
The City should never exclude any person from participation in, deny any person the benefits of, or otherwise discriminate against anyone in connection with the award and performance of any federally assisted contract on the basis of race, color, sex, or national origin.
b. Annual DBE Submittal Form
The City must provide the Caltrans District Local Assistance Engineer (DLAE) with a completed Local Agency DBE Annual Submittal Form annually. The form must include the name, telephone number, and email address of the designated DBE Liaison Officer (DBELO) and spe cify the Prompt Pay Provision to be used by the City for the subsequent fiscal year.
c. Race-Neutral Means of Meeting Caltrans Overall Statewide Annual DBE Goal
The City must meet the 17.6% Caltrans Overall Statewide Annual DBE Goal. The maximum feasible portion of the overall Annual DBE Goal must be met through race -neutral means of facilitating DBE participation. Race-neutral means minimally must include the following:
• Arranging solicitations, times for the presentation of bids, quantities, specifications, and delivery schedules in ways that facilitate the participation of DBE and other small businesses.
• Providing assistance in overcoming limitations such as the inability to obtain bonding or financing.
• Providing technical assistance and other services.
• Carrying out information and communication programs on contracting procedures and specific contract opportunities.
• Implementing a supportive services program to develop and improve immediate and long- term business management, record keeping, and financial and accounting capability for DBEs and other small businesses.
• Providing services to help DBEs and other small businesses improve long- term development, increase opportunities to participate in a variety of types of work, handle increasingly significant projects, and achieve eventual self-sufficiency. • Establishing a program to assist new start -up firms, particularly in fields in which DBE participation has historically been low.
• Ensuring distribution of the DBE directory through print and electronic means to the widest feasible universe of potential prime contractors, and
2-6
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
• Assisting DBEs and other small businesses to develop their capability to utilize emerging technology and conduct business through electronic media.
2. Race-Conscious Means of Meeting the Caltrans Overall Statewide Annual DBE Goal
The City must establish DBE contract goals to meet any portion of the Caltrans Overall 17.6% Statewide Annual DBE Goal that cannot be achieved through race -neutral means. As shown in Table 2.3, four of the 66 prime contracts with Caltrans funding assistance were awarded to DBE - certified firms. These contracts had a total value of $967,489, which was only 2.16% of the total value of the contracts awarded with Caltrans federally assisted contract dollars. Non -DBE firms received 62 of these contracts with a total value of $43,911,809, or 97.84% of the total value of awarded contracts.
Table 2.3: Caltrans Federally Assisted Prime Contracts by DBE Status
IV. Affirmative Action Program Compliance
A number of steps were undertaken to assess the City’s compliance with the Title VI program requirements and the terms of the DBE Implementation Agreement for Local Agencies. Since there were no official Title VI procedures or DBE program provisions, the a ssessment of compliance was discerned from a review of various sources.
A. Compliance with Title VI of the Civil Rights Act
In compliance with the Title VI requirement to have a nondiscrimination statement, there is a webpage on the City’s website entitled
City of Oakland | Title VI Policies & Procedures
(oaklandca.gov). The webpage sets forth the City’s policy of nondiscrimination in its programs and activities on the basis of race, color, national origin, disability, age, or sex. This statement is provided in English, Spanish, and Chinese. The signed statement must be posted on the City’s website. However, the signed statement about following the Title VI requirements is not posted on the City’s website.
There are several required provisions of Title VI omitted from the webpage. The Title VI Coordinator is not named, nor is the position even referenced. The City is required to designate a Title VI Coordinator with a responsible position in the City. The Title VI Coordinator shall be known to the public via postings in public areas or on the City’s website and report to the City Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
DBE 4 6.06% $967,489 2.16%
Non-DBE 62 93.94% $43,911,809 97.84%
Total 66 100.00% $44,879,298 100.00%
Certified Status
2-7
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Administrator. Comprehensive training must be conducted for City staff members every two years with public involvement. The Title VI webpage contains a reference to a City of Oakland Title VI brochure with basic information on the subject. However, there are no educational materials posted nor any information about Title VI training sessions for staff or the public.
Title VI also requires the City to develop procedures for collecting statistical data on prime contractors awarded federally assisted contracts by the contractors’ race, color, and national origin.
In addition, the compiled data should be adequate to evaluate the effectiveness of outreach strategies to ensure the inclusion of every group in the decision- making process. The Title VI resources provided on the City’s webpage do not contain procedures for collecting such information, nor does it provide information about Title VI outreach strategies.
The City has a nondiscrimination statement published on its website. However, the statement has not been signed as required by Title VI. The webpage clearly states the City’s policy of nondiscrimination in its programs and activities. However, there are certain key provisions of Title VI that are missing from the webpage. These include the signed nondiscrimination statement posted, the name of the Title VI Coordinator, and the acknowledgment that comprehensive training is provided to City staff members and the public. There is also no reference to procedures for collecting statistical data on prime contracts awarded to contractors based on race, color, and national origin.
B. Compliance with the Caltrans DBE Program Requirements
The DBE Implementation Agreement for Local Agencies sets forth the DBE Program requirements for Caltrans subrecipients. Subrecipients are required to sign the agreement annually.
The City signed an agreement during the study period for 2018 through 2020. A pparently, there was no DBE Implementation Agreement for Local Agencies signed in 2016, 2017, and 2021.
The signed agreements required the City to meet the maximum feasible portion of 17.6% Caltrans Overall Statewide Annual DBE Goal through race-neutral means of facilitating DBE participation in all USDOT-assisted prime contracts. In addition, the City must establish DBE contract goals to meet any portion of the 17.6% Overall Statewide Annual DBE Goal that cannot be achieved through race-neutral means.
There were no DBE goals placed on the contracts with USDOT funding assistance. Nor was there a designated DBE Liaison Officer responsible for developing, implementing, and monitoring the City’s obligations under the Caltrans DBE Program. Furthermore, there was no statistical data on DBE utilization compiled, no DBE contract goals set, and no outreach to DBEs about the contracting opportunities with the City. The City provided no evidence that its obligations under the DBE Implementation Agreement for Local Agencies were fulfilled.
2-8
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
C. Statistical Findings of DBE Goal Attainment
The statistical data on the utilization of DBE-certified companies on prime contracts with USDOT financial assistance are presented in this section. Table 2.4 shows that the City used USDOT financial assistance during the study period to award 66 contracts with a total value of $44,879,298.
Oakland-based DBEs received only 4, or 6.06%, of contracts with a dollar value of $967,489, which represents only 2.16% of all USDOT -assisted contract dollars. Non -DBE contractors, on the other hand, received 62, or 93.94%, of these contracts with a value of $43,911,809, or 97.84%, of all USDOT-assisted contract dollars. It is noteworthy that DBEs located outside of Oakland did not receive any of these contracts.
Table 2.4: Caltrans Federally Assisted Prime Contracts Awarded by DBE Status
Certification Category Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Oakland DBEs 4 6.06% $967,489 2.16%
DBEs outside of Oakland 0 0.00% $0 0.00%
Non-DBEs 62 93.94% $43,911,809 97.84%
Total 66 100.00% $44,879,298 100.00%
According to the DBE Implementation Agreement for Local Agencies, the City, when awarding USDOT financially assisted contracts, was obligated to award DBEs the maximum feasible portion of Caltrans’ USDOT-approved DBE goal of 17.6%. The data in Table 2.4 shows that only 2.16% of all dollars awarded on contracts with USDOT financial assistance were received by certified DBEs.
2-9
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
D. Utilization of Prime Contractors on Contracts with USDOT Financial Assistance
1. All Prime Contracts Awarded by Ethnicity and Gender
Table 2.5 lists all prime contracts with USDOT financial assistance awarded by the City. N on- minority male-owned business enterprises ( non-M/WBEs) received 96.01% , m inority business enterprises (MBEs) received 3.56%, and women business enterprises (WBEs) received 0.92% of the contract dollars.
African Americans received 2, or 3.03% of all prime contracts with USDOT financial assistance during the study period, representing $203,169, or 0.45%, of the contract dollars.
Asian Americans received 4, or 6.06% of all prime contracts with USDOT financial assistance during the study period, representing $949,376, or 2.12%, of the contract dollars.
Hispanic Americans received 4, or 6.06% of all prime contracts with USDOT financial assistance during the study period, representing $445,941, or 0.99%, of the contract dollars.
Native Americans received none of the prime contracts with USDOT financial assistance during the study period.
Caucasian Females received 1, or 1.52% of all prime contracts with USDOT financial assistance during the study period, representing $193,208, or 0.43% of the contract dollars.
Minority Females received 2, or 3.03% of all prime contracts with USDOT financial assistance during the study period, representing $219,853, or 0.49% of the contract dollars.
Non-minority Males received 55, or 83.33% of all prime contracts with USDOT financial assistance during the study period, representing $43,087,604, or 96.01% of the contract dollars.
Minority Business Enterprises received 10, or 15.15% of all prime contracts with USDOT financial assistance during the study period, representing $1,598,486, or 3.56% of the contract dollars.
Women Business Enterprises received 3, or 4.55% of all prime contracts with USDOT financial assistance during the study period, representing $413,061, or 0.92% of the contract dollars.
2-10
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.5: All Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 2 3.03% $203,169 0.45%
Asian Americans 4 6.06% $949,376 2.12%
Hispanic Americans 4 6.06% $445,941 0.99%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 1 1.52% $193,208 0.43%
Non-minority Males 55 83.33% $43,087,604 96.01%
TOTAL 66 100.00% $44,879,298 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 1.52% $149,985 0.33%
African American Males 1 1.52% $53,184 0.12%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 4 6.06% $949,376 2.12%
Hispanic American Females 1 1.52% $69,867 0.16%
Hispanic American Males 3 4.55% $376,073 0.84%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 1 1.52% $193,208 0.43%
Non-minority Males 55 83.33% $43,087,604 96.01%
TOTAL 66 100.00% $44,879,298 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 2 3.03% $219,853 0.49%
Minority Males 8 12.12% $1,378,633 3.07%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 10 15.15% $1,598,486 3.56% Women Business Enterprises 3 4.55% $413,061 0.92%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-11
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
2. Construction Prime Contracts Awarded by Ethnicity and Gender
Table 2.6 lists the construction prime contracts with USDOT financial assistance awarded by the City. Non-M/WBEs received 98.03% and MBEs received 1.97% of the construction prime contract dollars. WBEs received no construction prime contract dollars.
African Americans received 1, or 3.85% of all construction prime contracts with USDOT financial assistance during the study period, representing $53,184, or 0.16% of the construction prime contract dollars.
Asian Americans received 2, or 7.69% of all construction prime contracts with USDOT financial assistance during the study period, representing $262,830, or 0.78% of the construction prime contract dollars.
Hispanic Americans received 2, or 7.69% of all construction prime contracts with USDOT financial assistance during the study period, representing $349,548, or 1.03% of the construction prime contract dollars.
Native Americans received none of the construction prime contracts with USDOT financial assistance during the study period.
Caucasian Females received none of the construction prime contracts with USDOT financial assistance during the study period.
Minority Females received none of the construction prime contracts with USDOT financial assistance during the study period.
Non-minority Males received 21, or 80.77% of all construction prime contracts with USDOT financial assistance during the study period, representing $33,115,003, or 98.03% of the construction prime contract dollars.
Minority Business Enterprises received 5, or 19.23% of all construction prime contracts with USDOT financial assistance during the study period, representing $665,562, or 1.97% of the construction prime contract dollars.
Women Business Enterprises received none of the construction prime contracts with USDOT financial assistance during the study period.
2-12
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.6: Construction Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 1 3.85% $53,184 0.16%
Asian Americans 2 7.69% $262,830 0.78%
Hispanic Americans 2 7.69% $349,548 1.03%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 21 80.77% $33,115,003 98.03%
TOTAL 26 100.00% $33,780,565 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 1 3.85% $53,184 0.16%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 2 7.69% $262,830 0.78%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 2 7.69% $349,548 1.03%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 21 80.77% $33,115,003 98.03%
TOTAL 26 100.00% $33,780,565 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 0 0.00% $0 0.00%
Minority Males 5 19.23% $665,562 1.97%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 5 19.23% $665,562 1.97%
Women Business Enterprises 0 0.00% $0 0.00%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-13
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
3. Architectural and Engineering Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender
Table 2.7 lists the architectural and engineering prime contracts with USDOT financial assistance awarded by the City. Non-M/WBEs received 96.05% and WBEs received 3.95% of the architectural and engineering prime contract dollars. MBEs received no architectural and engineering prime contract dollars.
African Americans received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Asian Americans received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Hispanic Americans received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Native Americans received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Caucasian Females received 1, or 6.25% of all architectural and engineering prime contracts with USDOT financial assistance during the study period, representing $193,208, or 3.95% of the architectural and engineering prime contract dollars.
Minority Females received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Non-minority Males received 15, or 93.75% of all architectural and engineering prime contracts with USDOT financial assistance during the study period, representing $4,698,213, or 96.05% of the architectural and engineering prime contract dollars.
Minority Business Enterprises received none of the architectural and engineering prime contracts with USDOT financial assistance during the study period.
Women Business Enterprises received 1, or 6.25% of all architectural and engineering prime contracts with USDOT financial assistance during the study period, representing $193,208, or
3.95% of the architectural and engineering prime contract dollars.
2-14
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.7: Architectural and Engineering Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 0 0.00% $0 0.00%
Asian Americans 0 0.00% $0 0.00%
Hispanic Americans 0 0.00% $0 0.00%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 1 6.25% $193,208 3.95%
Non-minority Males 15 93.75% $4,698,213 96.05%
TOTAL 16 100.00% $4,891,421 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 0 0.00% $0 0.00%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 0 0.00% $0 0.00%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 0 0.00% $0 0.00%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 1 6.25% $193,208 3.95%
Non-minority Males 15 93.75% $4,698,213 96.05%
TOTAL 16 100.00% $4,891,421 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 0 0.00% $0 0.00%
Minority Males 0 0.00% $0 0.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 0 0.00% $0 0.00%
Women Business Enterprises 1 6.25% $193,208 3.95%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-15
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
4. Professional Services Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender
Table 2.8 lists the professional services prime contracts with USDOT financial assistance awarded by the City. Non-M/WBEs received 67.83%, MBEs received 32.17%, and WBEs received 5.59% of the professional services prime contract dollars.
African Americans received 1, or 11.11% of all professional services prime contracts with USDOT financial assistance during the study period, representing $149,985, or 5.59% of the professional services prime contract dollars.
Asian Americans received 2, or 22.22% of all professional services prime contracts with USDOT financial assistance during the study period, representing $686,546, or 25.59% of the professional services prime contract dollars.
Hispanic Americans received 1, or 11.11% of all professional services prime contracts with USDOT financial assistance during the study period, representing $26,525, or 0.99% of the professional services prime contract dollars.
Native Americans received none of the professional services prime contracts with USDOT financial assistance during the study period.
Caucasian Females received none of the professional services prime contracts with USDOT financial assistance during the study period.
Minority Females received 1, or 11.11% of all professional services prime contracts with USDOT financial assistance during the study period, representing $149,985, or 5.59% of the professional services prime contract dollars.
Non-minority Males received 5, or 55.56% of all professional services prime contracts with USDOT financial assistance during the study period, representing $1,819,370, or 67.83% of the professional services prime contract dollars.
Minority Business Enterprises received 4, or 44.44% of all professional services prime contracts with USDOT financial assistance during the study period, representing $863,056, or 32.17% of the professional services prime contract dollars.
Women Business Enterprises received 1, or 11.11% of all professional services prime contracts with USDOT financial assistance during the study period, representing $149,985, or 5.59% of the professional services prime contract dollars.
2-16
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.8: Professional Services Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 1 11.11% $149,985 5.59%
Asian Americans 2 22.22% $686,546 25.59%
Hispanic Americans 1 11.11% $26,525 0.99%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 5 55.56% $1,819,370 67.83%
TOTAL 9 100.00% $2,682,426 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 1 11.11% $149,985 5.59%
African American Males 0 0.00% $0 0.00%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 2 22.22% $686,546 25.59%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 1 11.11% $26,525 0.99%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 5 55.56% $1,819,370 67.83%
TOTAL 9 100.00% $2,682,426 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 1 11.11% $149,985 5.59%
Minority Males 3 33.33% $713,071 26.58%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 4 44.44% $863,056 32.17%
Women Business Enterprises 1 11.11% $149,985 5.59%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-17
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
5. Goods and Services Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender
Table 2.9 lists the goods and services prime contracts with USDOT financial assistance awarded by the City. Non-M/WBEs received 98.02% and MBEs and WBEs received 1.98% of the goods and services prime contract dollars.
African Americans received none of the goods and services prime contracts with USDOT financial assistance during the study period.
Asian Americans received none of the goods and services prime contracts with USDOT financial assistance during the study period.
Hispanic Americans received 1, or 6.67% of all goods and services prime contracts with USDOT financial assistance during the study period, representing $69,867, or 1.98% of the goods and services prime contract dollars.
Native Americans received none of the goods and services prime contracts with USDOT financial assistance during the study period.
Caucasian Females received none of the goods and services prime contracts with USDOT financial assistance during the study period.
Minority Females received 1, or 6.67% of all goods and prime contracts with USDOT financial assistance during the study period, representing $69,867, or 1.98% of the goods and services prime contract dollars.
Non-minority Males received 14, or 93.33% of all goods and services prime contracts with USDOT financial assistance during the study period, representing $3,455,019, or 98.02% of the goods and services prime contract dollars.
Minority Business Enterprises received 1, or 6.67% of all goods and services prime contracts with USDOT financial assistance during the study period, representing $69,867, or 1.98% of the goods and services prime contract dollars.
Women Business Enterprises received 1, or 6.67% of all goods and services prime contracts with USDOT financial assistance during the study period, representing $69,867, or 1.98% of the goods and services prime contract dollars.
2-18
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.9: Goods and Services Prime Contracts with USDOT Financial Assistance Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 0 0.00% $0 0.00%
Asian Americans 0 0.00% $0 0.00%
Hispanic Americans 1 6.67% $69,867 1.98%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 14 93.33% $3,455,019 98.02%
TOTAL 15 100.00% $3,524,886 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 0 0.00% $0 0.00%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 0 0.00% $0 0.00%
Hispanic American Females 1 6.67% $69,867 1.98%
Hispanic American Males 0 0.00% $0 0.00%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 14 93.33% $3,455,019 98.02%
TOTAL 15 100.00% $3,524,886 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 1 6.67% $69,867 1.98%
Minority Males 0 0.00% $0 0.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 1 6.67% $69,867 1.98%
Women Business Enterprises 1 6.67% $69,867 1.98%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-19
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
E. Disparity Analysis of Prime Contracts with USDOT Financial Assistance
1. All Prime Contracts with USDOT Financial Assistance
The disparity analysis of all prime contracts with USDOT financial assistance is described below in Table 2.10.
African Americans represented 42.74% of the available businesses in all industries and received
0.45% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Asian Americans represented 22.65% of the available businesses in all industries and received
2.12% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Hispanic Americans represented 11.11% of the available businesses in all industries and received
0.99% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is not statistically significant.
Native Americans represented 2.56% of the available businesses in all industries and received no prime contracts with USDOT financial assistance. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 20.94% of the available businesses in all industries and received
0.43% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Minority Females represented 25.64% of the available businesses in all industries and received
0.49% of the dollars on prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Non-minority Males represented none of the available businesses in all industries and received
96.01% of the dollars on all prime contracts with USDOT financial assistance. This overutilization could not be tested because there were no businesses available.
Minority Business Enterprises represented 79.06% of the available businesses in all industries and received 3.56% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Women Business Enterprises represented 46.58% of the available businesses in all industries and received 0.92% of the dollars on all prime contracts with USDOT financial assistance. This underutilization is statistically significant.
2-20
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.10: Disparity Analysis: All Prime Contracts with USDOT Financial Assistance July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $203,169 0.45% 42.74% $19,179,187 -$18,976,018 0.01 < .05 * Asian Americans $949,376 2.12% 22.65% $10, 164,969 -$9,215,593 0.09 < .05 * Hispanic Americans $445,941 0.99% 11.11% $4,986,589 -$4,540,648 0.09 not significant Native Americans $0 0.00% 2.56% $1,150,751 -$1,150,751 0.00 ---- Caucasian Females $193,208 0.43% 20.94% $9,397,802 -$9,204,594 0.02 < .05 * Non-minority Males $43,087,604 96.01% 0.00% $0 $43,087,604 ---- ---- TOTAL $44,879,298 100.00% 100.00% $44,879,298
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $149,985 0.33% 13.68% $6,137,340 -$5,987,355 0.02 < .05 * African American Males $53,184 0.12% 29.06% $13,041,847 -$12,988,663 0.00 < .05 * Asian American Females $0 0.00% 6.84% $3,068,670 -$3,068,670 0.00 ---- Asian American Males $949,376 2.12% 15.81% $7,096,299 -$6,146,923 0.13 < .05 * Hispanic American Females $69,867 0.16% 2.99% $1,342,543 -$1,272,676 0.05 not significant Hispanic American Males $376,073 0.84% 8.12% $3,644,046 -$3,267,972 0.10 not significant Native American Females $0 0.00% 2.14% $958,959 -$958,959 0.00 ---- Native American Males $0 0.00% 0.43% $191,792 -$191,792 0.00 ---- Caucasian Females $193,208 0.43% 20.94% $9,397,802 -$9,204,594 0.02 < .05 * Non-minority Males $43,087,604 96.01% 0.00% $0 $43,087,604 ---- ---- TOTAL $44,879,298 100.00% 100.00% $44,879,298
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $219,853 0.49% 25.64% $11,507,512 -$11,287,660 0.02 < .05 * Minority Males $1,378,633 3.07% 53.42% $23,973,984 -$22,595,351 0.06 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $1,598,486 3.56% 79.06% $35,481,496 -$33,883,010 0.05 < .05 * Women Business Enterprises $413,061 0.92% 46.58% $20,905,314 -$20,492,254 0.02 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-21
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
2. Construction Prime Contracts with USDOT Financial Assistance
The disparity analysis of construction prime contracts with USDOT financial assistance awarded by the City is described below in Table 2.11.
African Americans represented 51.28% of the available construction businesses and received
0.16% of the dollars on construction prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Asian Americans represented 14.10% of the available construction businesses and received 0.78% of the dollars on construction prime contracts with USDOT financial assistance. This underutilization is not statistically significant.
Hispanic Americans represented 15.38% of the available construction businesses and received
1.03% of the dollars on construction prime contracts with USDOT financial assistance. This underutilization is not statistically significant.
Native Americans represented 1.28% of the available construction businesses and received no construction prime contracts with USDOT financial assistance. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 17.95% of the available construction businesses and received no construction prime contracts with USDOT financial assistance. This underutilization is statistically significant.
Minority Females represented 8.97% of the available construction businesses and received no construction prime contracts with USDOT financial assistance. This underutilization could not be tested because there were no contracts awarded.
Non-minority Males represented none of the available construction businesses and received
98.03% of the dollars on construction prime contracts with USDOT financial assistance. This overutilization could not be tested because there were no businesses available.
Minority Business Enterprises represented 82.05% of the available construction businesses and received 1.97% of the dollars on construction prime contracts with USDOT financial assistance.
This underutilization is statistically significant.
Women Business Enterprises represented 26.92% of the available construction businesses and received no construction prime contracts with USDOT financial assistance. This underutilization is statistically significant.
2-22
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.11: Disparity Analysis: Construction Prime Contracts with USDOT Financial Assistance July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $53,184 0.16% 51.28% $17,323,367 -$17,270,183 0.00 < .05 * Asian Americans $262,830 0.78% 14.10% $4, 763,926 -$4,501,096 0.06 not significant Hispanic Americans $349,548 1.03% 15.38% $5,197,010 -$4,847,462 0.07 not significant Native Americans $0 0.00% 1.28% $433,084 -$433,084 0.00 ---- Caucasian Females $0 0.00% 17.95% $6,063,178 -$6,063,178 0.00 < .05 * Non-minority Males $33,115,003 98.03% 0.00% $0 $33,115,003 ---- ---- TOTAL $33,780,565 100.00% 100.00% $33,780,565
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 6.41% $2,165,421 -$2,165,421 0.00 ---- African American Males $53,184 0.16% 44.87% $15,157,946 -$15,104,762 0.00 < .05 * Asian American Females $0 0.00% 1.28% $433,084 -$433,084 0.00 ---- Asian American Males $262,830 0.78% 12.82% $4,330,842 -$4,068,012 0.06 not significant Hispanic American Females $0 0.00% 0.00% $0 $0 ---- ---- Hispanic American Males $349,548 1.03% 15.38% $5,197,010 -$4,847,462 0.07 not significant Native American Females $0 0.00% 1.28% $433,084 -$433,084 0.00 ---- Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $0 0.00% 17.95% $6,063,178 -$6,063,178 0.00 < .05 * Non-minority Males $33,115,003 98.03% 0.00% $0 $33,115,003 ---- ---- TOTAL $33,780,565 100.00% 100.00% $33,780,565
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $0 0.00% 8.97% $3,031,589 -$3,031,589 0.00 ---- Minority Males $665,562 1.97% 73.08% $24,685,798 -$24,020,236 0.03 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $665,562 1.97% 82.05% $27,717,387 -$27,051,825 0.02 < .05 * Women Business Enterprises $0 0.00% 26.92% $9,094,768 -$9,094,768 0.00 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-23
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
V. Statistical Findings of Federally Assisted Prime Contracts
The statistical data on the utilization of federally assisted prime contracts by ethnicity and gender and the disparity analysis of the utilization of all available M/WBEs are presented in this section.
The City awarded 442 federally assisted construction, architectural and engineering, professional services, and goods and services prime contracts. Financial assistance was received from 13 federal agencies.
A. M/WBE Utilization on All Federally Assisted Prime Contracts
1. All Federally Assisted Prime Contracts Awarded by Ethnicity and Gender
Table 2.12 lists all federally assisted prime contracts awarded by the City. MBEs received 9.87%, WBEs received 7.55%, and non-M/WBEs received 85.31% of the federally assisted prime contract dollars.
African Americans received 13, or 2.94% of all federally assisted prime contracts awarded during the study period, representing $1,082,103, or 0.97% of all contract dollars.
Asian Americans received 22, or 4.98% of all federally assisted prime contracts awarded during the study period, representing $4,044,095, or 3.61% of all contract dollars.
Hispanic Americans received 21, or 4.75% of all federally assisted prime contracts awarded during the study period, representing $5,890,663, or 5.26% of all contract dollars.
Native Americans received 5, or 1.13% of all federally assisted prime contracts awarded during the study period, representing $47,232, or 0.04% of all contract dollars.
Caucasian Females received 41, or 9.28% of all federally assisted prime contracts awarded during the study period, representing $5,398,201, or 4.82% of all contract dollars.
Minority Females received 29, or 6.56% of all federally assisted prime contracts awarded during the study period, representing $3,063,224, or 2.73% of all contract dollars.
Non-minority Males received 340, or 76.92% of all federally assisted prime contracts awarded during the study period, representing $95,587,381, or 85.31% of all contract dollars.
Minority Business Enterprises received 61, or 13.80% of all federally assisted prime contracts awarded during the study period, representing $11,064,093, or 9.87% of all contract dollars.
Women Business Enterprises received 70, or 15.84% of all federally assisted prime contracts awarded during the study period, representing $8,461,425, or 7.55% of all contract dollars.
2-24
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.12: All Federally Assisted Prime Contracts Awarded by Ethnicity and Gender July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 13 2.94% $1,082,103 0.97%
Asian Americans 22 4.98% $4,044,095 3.61%
Hispanic Americans 21 4.75% $5,890,663 5.26%
Native Americans 5 1.13% $47,232 0.04%
Caucasian Females 41 9.28% $5,398,201 4.82%
Non-minority Males 340 76.92% $95,587,381 85.31%
TOTAL 442 100.00% $112,049,675 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 9 2.04% $692,009 0.62%
African American Males 4 0.90% $390,094 0.35%
Asian American Females 4 0.90% $952,041 0.85%
Asian American Males 18 4.07% $3,092,054 2.76%
Hispanic American Females 11 2.49% $1,371,941 1.22%
Hispanic American Males 10 2.26% $4,518,721 4.03%
Native American Females 5 1.13% $47,232 0.04%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 41 9.28% $5,398,201 4.82%
Non-minority Males 340 76.92% $95,587,381 85.31%
TOTAL 442 100.00% $112,049,675 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 29 6.56% $3,063,224 2.73%
Minority Males 32 7.24% $8,000,870 7.14%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 61 13.80% $11,064,093 9.87% Women Business Enterprises 70 15.84% $8,461,425 7.55%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-25
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
2. Federally Assisted Construction Prime Contracts Awarded by Ethnicity and Gender
Table 2.13 lists the federally assisted construction prime contracts awarded by the City. MBEs received 12.69%, WBEs received 1.52%, and non- M/WBEs received 87.31% of the federally assisted construction prime contract dollars.
African Americans received 2, or 4.65% of the federally assisted construction prime contracts awarded during the study period, representing $58,184, or 0.13% of the construction prime contract dollars.
Asian Americans received 4, or 9.30% of the federally assisted construction prime contracts awarded during the study period, representing $1,302,985, or 2.96% of the construction prime contract dollars.
Hispanic Americans received 5, or 11.63% of the federally assisted construction prime contracts awarded during the study period, representing $4,224,766, or 9.60% of the construction prime contract dollars.
Native Americans received none of the federally assisted construction prime contracts awarded during the study period.
Caucasian Females received none of the federally assisted construction prime contracts awarded during the study period.
Minority Females received 1, or 2.33% of the federally assisted construction prime contracts awarded during the study period, representing $669,638, or 1.52% of the construction prime contract dollars.
Non-minority Males received 32, or 74.42% of the federally assisted construction prime contracts awarded during the study period, representing $38,443,383, or 87.31% of the construction prime contract dollars.
Minority Business Enterprises received 11, or 25.58% of the federally assisted construction prime contracts awarded during the study period, representing $5,585,935, or 12.69% of the construction prime contract dollars.
Women Business Enterprises received 1, or 2.33% of the federally assisted construction prime contracts awarded during the study period, representing $669,638, or 1.52% of the construction prime contract dollars.
2-26
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.13: Federally Assisted Construction Prime Contracts Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 2 4.65% $58,184 0.13%
Asian Americans 4 9.30% $1,302,985 2.96%
Hispanic Americans 5 11.63% $4,224,766 9.60%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 32 74.42% $38,443,383 87.31%
TOTAL 43 100.00% $44,029,318 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 2 4.65% $58,184 0.13%
Asian American Females 1 2.33% $669,638 1.52%
Asian American Males 3 6.98% $633,347 1.44%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 5 11.63% $4,224,766 9.60%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 0 0.00% $0 0.00%
Non-minority Males 32 74.42% $38,443,383 87.31%
TOTAL 43 100.00% $44,029,318 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 1 2.33% $669,638 1.52%
Minority Males 10 23.26% $4,916,297 11.17%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 11 25.58% $5,585,935 12.69% Women Business Enterprises 1 2.33% $669,638 1.52%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-27
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
3. Federally Assisted Architectural and Engineering Prime Contracts Awarded by Ethnicity and Gender
Table 2.14 lists the federally assisted architectural and engineering prime contracts awarded by the City. WBEs received 11.07%, non- M/WBEs received 88.93%, and MBEs received none of the federally assisted architectural and engineering prime contract dollars.
African Americans received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Asian Americans received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Hispanic Americans received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Native Americans received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Caucasian Females received 3, or 15.00% of the federally assisted architectural and engineering prime contracts awarded during the study period, representing $596,212, or 11.07% of the architectural and engineering prime contract dollars.
Minority Females received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Non-minority Males received 17, or 85.00% of the federally assisted architectural and engineering prime contracts awarded during the study period, representing $4,790,073, or 88.93% of the architectural and engineering prime contract dollars.
Minority Business Enterprises received none of the federally assisted architectural and engineering prime contracts awarded during the study period.
Women Business Enterprises received 3, or 15.00% of the federally assisted architectural and engineering prime contracts awarded during the study period, representing $596,212, or 11.07% of the architectural and engineering prime contract dollars.
2-28
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.14: Federally Assisted Architectural and Engineering Prime Contracts Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 0 0.00% $0 0.00%
Asian Americans 0 0.00% $0 0.00%
Hispanic Americans 0 0.00% $0 0.00%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 3 15.00% $596,212 11.07%
Non-minority Males 17 85.00% $4,790,073 88.93%
TOTAL 20 100.00% $5,386,284 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 0 0.00% $0 0.00%
Asian American Females 0 0.00% $0 0.00%
Asian American Males 0 0.00% $0 0.00%
Hispanic American Females 0 0.00% $0 0.00%
Hispanic American Males 0 0.00% $0 0.00%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 3 15.00% $596,212 11.07%
Non-minority Males 17 85.00% $4,790,073 88.93%
TOTAL 20 100.00% $5,386,284 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 0 0.00% $0 0.00%
Minority Males 0 0.00% $0 0.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 0 0.00% $0 0.00%
Women Business Enterprises 3 15.00% $596,212 11.07%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-29
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
4. Federally Assisted Professional Services Prime Contracts Awarded by Ethnicity and Gender
Table 2.15 lists the federally assisted professional services prime contracts awarded by the City.
MBEs received 40.11%, WBEs received 42.51%, and non- M/WBEs received 42.05% of the federally assisted professional services prime contract dollars.
African Americans received 9, or 15.79% of the federally assisted professional services prime contracts awarded during the study period, representing $1,013,904, or 14.12% of the professional services prime contract dollars.
Asian Americans received 4, or 7.02% of the federally assisted professional services prime contracts awarded during the study period, representing $694,111, or 9.67% of the professional services prime contract dollars.
Hispanic Americans received 11, or 19.30% of the federally assisted professional services prime contracts awarded during the study period, representing $1,171,770, or 16.32% of the professional services prime contract dollars.
Native Americans received none of the federally assisted professional services prime contracts awarded during the study period.
Caucasian Females received 11, or 19.30% of the federally assisted professional services prime contracts awarded during the study period, representing $1,281,298, or 17.84% of the professional services prime contract dollars.
Minority Females received 17, or 29.82% of the federally assisted professional services prime contracts awarded during the study period, representing $1,770,858, or 24.66% of the professional services prime contract dollars.
Non-minority Males received 22, or 38.60% of the federally assisted professional services prime contracts awarded during the study period, representing $3,019,187, or 42.05% of the professional services prime contract dollars.
Minority Business Enterprises received 24, or 42.11% of the federally assisted professional services prime contracts awarded during the study period, representing $2,879,785, or 40.11% of the professional services prime contract dollars.
Women Business Enterprises received 28, or 49.12% of the federally assisted professional services prime contracts awarded during the study period, representing $3,052,156, or 42.51% of the professional services prime contract dollars.
2-30
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.15: Federally Assisted Professional Services Prime Contracts Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 9 15.79% $1,013,904 14.12%
Asian Americans 4 7.02% $694,111 9.67%
Hispanic Americans 11 19.30% $1,171,770 16.32%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 11 19.30% $1,281,298 17.84%
Non-minority Males 22 38.60% $3,019,187 42.05%
TOTAL 57 100.00% $7,180,270 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 7 12.28% $681,994 9.50%
African American Males 2 3.51% $331,911 4.62%
Asian American Females 2 3.51% $7,565 0.11%
Asian American Males 2 3.51% $686,546 9.56%
Hispanic American Females 8 14.04% $1,081,299 15.06%
Hispanic American Males 3 5.26% $90,470 1.26%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 11 19.30% $1,281,298 17.84%
Non-minority Males 22 38.60% $3,019,187 42.05%
TOTAL 57 100.00% $7,180,270 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 17 29.82% $1,770,858 24.66%
Minority Males 7 12.28% $1,108,927 15.44%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 24 42.11% $2,879,785 40.11% Women Business Enterprises 28 49.12% $3,052,156 42.51%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-31
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
5. Federally Assisted Goods and Services Prime Contracts Awarded by Ethnicity and Gender
Table 2.16 lists the federally assisted goods and services prime contracts awarded by the City.
MBEs received 4.69%, WBEs received 7.47%, and non-M/WBEs received 88.97% of the federally assisted goods and services prime contract dollars.
African Americans received 2, or 0.62% of the federally assisted goods and services prime contracts awarded during the study period, representing $10,015, or 0.02% of the goods and services prime contract dollars.
Asian Americans received 14, or 4.35% of the federally assisted goods and services prime contracts awarded during the study period, representing $2,046,999, or 3.69% of the goods and services prime contract dollars.
Hispanic Americans received 5, or 1.55% of the federally assisted goods and services prime contracts awarded during the study period, representing $494,127, or 0.89% of the goods and services prime contract dollars.
Native Americans received 5, or 1.55% of the federally assisted goods and services prime contracts awarded during the study period, representing $47,232, or 0.09% of the goods and services prime contract dollars.
Caucasian Females received 27, or 8.39% of the federally assisted goods and services prime contracts awarded during the study period, representing $3,520,692, or 6.35% of the goods and services prime contract dollars.
Minority Females received 11, or 3.42% of the federally assisted goods and services prime contracts awarded during the study period, representing $622,727, or 1.12% of the goods and services prime contract dollars.
Non-minority Males received 269, or 83.54% of the federally assisted goods and services prime contracts awarded during the study period, representing $49,334,738, or 88.97% of the goods and services prime contract dollars.
Minority Business Enterprises received 26, or 8.07% of the federally assisted goods and services prime contracts awarded during the study period, representing $2,598,372, or 4.69% of the goods and services prime contract dollars.
Women Business Enterprises received 38, or 11.80% of the federally assisted goods and services prime contracts awarded during the study period, representing $4,143,419, or 7.47% of the goods and services prime contract dollars.
2-32
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.16: Federally Assisted Goods and Services Prime Contracts Awarded by Ethnicity and Gender, July 1, 2016 to June 30, 2021
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 2 0.62% $10,015 0.02%
Asian Americans 14 4.35% $2,046,999 3.69%
Hispanic Americans 5 1.55% $494,127 0.89%
Native Americans 5 1.55% $47,232 0.09%
Caucasian Females 27 8.39% $3,520,692 6.35%
Non-minority Males 269 83.54% $49,334,738 88.97%
TOTAL 322 100.00% $55,453,803 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 2 0.62% $10,015 0.02%
African American Males 0 0.00% $0 0.00%
Asian American Females 1 0.31% $274,838 0.50%
Asian American Males 13 4.04% $1,772,161 3.20%
Hispanic American Females 3 0.93% $290,642 0.52%
Hispanic American Males 2 0.62% $203,485 0.37%
Native American Females 5 1.55% $47,232 0.09%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 27 8.39% $3,520,692 6.35%
Non-minority Males 269 83.54% $49,334,738 88.97%
TOTAL 322 100.00% $55,453,803 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 11 3.42% $622,727 1.12%
Minority Males 15 4.66% $1,975,645 3.56%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 26 8.07% $2,598,372 4.69% Women Business Enterprises 38 11.80% $4,143,419 7.47%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
2-33
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
B. Disparity Analysis of Federally Assisted Prime Contracts
1. All Federally Assisted Prime Contracts
The disparity analysis of all federally assisted prime contracts is described below in Table 2.17.
African Americans represented 12.05% of the available businesses in all industries and received
0.97% of the dollars on all federally funded prime contracts. This underutilization is statistically significant.
Asian Americans represented 7.30% of the available businesses in all industries and received
3.61% of the dollars on all federally funded prime contracts. This underutilization is not statistically significant.
Hispanic Americans represented 4.62% of the available businesses in all industries and received
5.26% of the dollars on all federally funded prime contracts. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.21% of the available businesses in all industries and received
0.04% of the dollars on all federally funded prime contracts. This underutilization could not be tested because there were too few businesses and too few contracts awarded.
Caucasian Females represented 8.64% of the available businesses in all industries and received
4.82% of the dollars on all federally funded prime contracts. This underutilization is not statistically significant.
Minority Females represented 8.14% of the available businesses in all industries and received
2.73% of the dollars on all federally funded prime contracts. This underutilization is statistically significant.
Non-minority Males represented 67.18% of the available businesses in all industries and received
85.31% of the dollars on all federally funded prime contracts. This overutilization is statistically significant.
Minority Business Enterprises represented 24.18% of the available businesses in all industries and received 9.87% of the dollars on all federally funded prime contracts. This underutilization is statistically significant.
Women Business Enterprises represented 16.78% of the available businesses in all industries and received 7.55% of the dollars on all federally funded prime contracts. This underutilization is statistically significant.
2-34
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.17: Disparity Analysis: All Federally Assisted Prime Contracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $1,082,103 0.97% 12.05% $13,507,575 -$12,425,471 0.08 < .05 * Asian Americans $4,044,095 3.61% 7.30% $8,175,637 -$4,131,542 0.49 not significant Hispanic Americans $5,890,663 5.26% 4.62% $5,173,954 $716,709 1.14 ** Native Americans $47,232 0.04% 0.21% $236,975 -$189,743 0.20 ---- Caucasian Females $5,398,201 4.82% 8.64% $9,676,479 -$4,278,278 0.56 not significant Non-minority Males $95,587,381 85.31% 67.18% $75,279,056 $20,308,325 1.27 < .05 † TOTAL $112,049,675 100.00% 100.00% $112,049,675
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $692,009 0.62% 4.19% $4,700,004 -$4,007,995 0.15 < .05 * African American Males $390,094 0.35% 7.86% $8,807,571 -$8,417,476 0.04 < .05 * Asian American Females $952,041 0.85% 2.40% $2,685,717 -$1,733,675 0.35 < .05 * Asian American Males $3,092,054 2.76% 4.90% $5,489,921 -$2,397,867 0.56 not significant Hispanic American Females $1,371,941 1.22% 1.41% $1,579,833 -$207,892 0.87 not significant Hispanic American Males $4,518,721 4.03% 3.21% $3,594,121 $924,601 1.26 ** Native American Females $47,232 0.04% 0.14% $157,983 -$110,751 0.30 ---- Native American Males $0 0.00% 0.07% $78,992 -$78,992 0.00 ---- Caucasian Females $5,398,201 4.82% 8.64% $9,676,479 -$4,278,278 0.56 not significant Non-minority Males $95,587,381 85.31% 67.18% $75,279,056 $20,308,325 1.27 < .05 † TOTAL $112,049,675 100.00% 100.00% $112,049,675
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $3,063,224 2.73% 8.14% $9,123,537 -$6,060,314 0.34 < .05 * Minority Males $8,000,870 7.14% 16.04% $17,970,604 -$9,969,734 0.45 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $11,064,093 9.87% 24.18% $27,094,141 -$16,030,048 0.41 < .05 * Women Business Enterprises $8,461,425 7.55% 16.78% $18,800,016 -$10,338,591 0.45 < .05 * ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-35
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
2. Federally Assisted Construction Prime Contracts
The disparity analysis of the federally assisted construction prime contracts is described below in Table 2.18.
African Americans represented 19.11% of the available construction businesses and received
0.13% of the dollars on federally assisted construction prime contracts. This underutilization is statistically significant.
Asian Americans represented 7.32% of the available construction businesses and received 2.96% of the dollars on federally assisted construction prime contracts. This underutilization is not statistically significant.
Hispanic Americans represented 8.93% of the available construction businesses and received
9.60% of the dollars on federally assisted construction prime contracts. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented 0.18% of the available construction businesses and received no federally assisted construction prime contracts. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Caucasian Females represented 5.71% of the available construction businesses and received no federally assisted construction prime contracts. This underutilization could not be tested because there were too few businesses and no contracts awarded.
Minority Females represented 5.18% of the available construction businesses and received 1.52% of the dollars on federally assisted construction prime contracts. This underutilization is not statistically significant.
Non-minority Males represented 58.75% of the available construction businesses and received
87.31% of the dollars on federally assisted construction prime contracts. This overutilization is statistically significant.
Minority Business Enterprises represented 35.54% of the available construction businesses and received 12.69% of the dollars on federally assisted construction prime contracts. This underutilization is statistically significant.
Women Business Enterprises represented 10.89% of the available construction businesses and received 1.52% of the dollars on federally assisted construction prime contracts. This underutilization is not statistically significant.
2-36
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.18: Disparity Analysis: Federally Assisted Construction Prime Contracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $58,184 0.13% 19.11% $8,412,745 -$8,354,561 0.01 < .05 * Asian Americans $1,302,985 2.96% 7.32% $3,223,575 -$1,920,590 0.40 not significant Hispanic Americans $4,224,766 9.60% 8.93% $3,931,189 $293,577 1.07 ** Native Americans $0 0.00% 0.18% $78,624 -$78,624 0.00 ---- Caucasian Females $0 0.00% 5.71% $2,515,961 -$2,515,961 0.00 ---- Non-minority Males $38,443,383 87.31% 58.75% $25,867,224 $12,576,158 1.49 < .05 † TOTAL $44,029,318 100.00% 100.00% $44,029,318
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 3.21% $1,415,228 -$1,415,228 0.00 ---- African American Males $58,184 0.13% 15.89% $6,997,517 -$6,939,333 0.01 < .05 * Asian American Females $669,638 1.52% 1.07% $471,743 $197,896 1.42 ** Asian American Males $633,347 1.44% 6.25% $2,751,832 -$2,118,485 0.23 not significant Hispanic American Females $0 0.00% 0.71% $314,495 -$314,495 0.00 ---- Hispanic American Males $4,224,766 9.60% 8.21% $3,616,694 $608,072 1.17 ** Native American Females $0 0.00% 0.18% $78,624 -$78,624 0.00 ---- Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $0 0.00% 5.71% $2,515,961 -$2,515,961 0.00 ---- Non-minority Males $38,443,383 87.31% 58.75% $25,867,224 $12,576,158 1.49 < .05 † TOTAL $44,029,318 100.00% 100.00% $44,029,318
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $669,638 1.52% 5.18% $2,280,090 -$1,610,451 0.29 not significant Minority Males $4,916,297 11.17% 30.36% $13,366,043 -$8,449,746 0.37 not significant Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $5,585,935 12.69% 35.54% $15,646,133 -$10,060,197 0.36 < .05 * Women Business Enterprises $669,638 1.52% 10.89% $4,796,051 -$4,126,412 0.14 not significant ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-37
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
3. Federally Assisted Architectural and Engineering Prime Contracts
The disparity analysis of the federally assisted architectural and engineering prime contracts is described below in Table 2.19.
African Americans represented 17.44% of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization is statistically significant.
Asian Americans represented 18.60% of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization is statistically significant.
Hispanic Americans represented 5.81% of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization could not be tested because there were no contracts awarded.
Native Americans represented none of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization could not be tested because there were no businesses and no contracts awarded.
Caucasian Females represented 9.30% of the available architectural and engineering businesses and received 11.07% of the dollars on federally assisted architectural and engineering prime contracts. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 10.47% of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization could not be tested because there were no contracts awarded.
Non-minority Males represented 48.84% of the available architectural and engineering businesses and received 88.93% of the dollars on federally assisted architectural and engineering prime contracts. This overutilization is statistically significant.
Minority Business Enterprises represented 41.86% of the available architectural and engineering businesses and received no federally assisted architectural and engineering prime contracts. This underutilization is statistically significant.
Women Business Enterprises represented 19.77% of the available architectural and engineering businesses and received 11.07% of the dollars on federally assisted architectural and engineering prime contracts. This underutilization is not statistically significant.
2-38
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.19: Disparity Analysis: Federally Assisted Architectural and Engineering Prime Contracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $0 0.00% 17.44% $939,468 -$939,468 0.00 < .05 * Asian Americans $0 0.00% 18.60% $1,002,099 -$1,002,099 0.00 < .05 * Hispanic Americans $0 0.00% 5.81% $313,156 -$313,156 0.00 ---- Native Americans $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $596,212 11.07% 9.30% $501,050 $95,162 1.19 ** Non-minority Males $4,790,073 88.93% 48.84% $2,630,511 $2,159,562 1.82 < .05 † TOTAL $5,386,284 100.00% 100.00% $5,386,284
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $0 0.00% 4.65% $250,525 -$250,525 0.00 ---- African American Males $0 0.00% 12.79% $688,943 -$688,943 0.00 ---- Asian American Females $0 0.00% 3.49% $187,894 -$187,894 0.00 ---- Asian American Males $0 0.00% 15.12% $814,206 -$814,206 0.00 < .05 * Hispanic American Females $0 0.00% 2.33% $125,262 -$125,262 0.00 ---- Hispanic American Males $0 0.00% 3.49% $187,894 -$187,894 0.00 ---- Native American Females $0 0.00% 0.00% $0 $0 ---- ----
Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $596,212 11.07% 9.30% $501,050 $95,162 1.19 ** Non-minority Males $4,790,073 88.93% 48.84% $2,630,511 $2,159,562 1.82 < .05 † TOTAL $5,386,284 100.00% 100.00% $5,386,284
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $0 0.00% 10.47% $563,681 -$563,681 0.00 ---- Minority Males $0 0.00% 31.40% $1,691,043 -$1,691,043 0.00 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $0 0.00% 41.86% $2,254,724 -$2,254,724 0.00 < .05 * Women Business Enterprises $596,212 11.07% 19.77% $1,064,731 -$468,519 0.56 not significant ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-39
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
4. Federally Assisted Professional Services Prime Contracts
The disparity analysis of the federally assisted professional services prime contracts is described below in Table 2.20.
African Americans represented 20.59% of the available professional services businesses and received 14.12% of the dollars on federally assisted professional services prime contracts. This underutilization is not statistically significant.
Asian Americans represented 15.69% of the available professional services businesses and received 9.67% of the dollars on federally assisted professional services prime contracts. This underutilization is statistically significant.
Hispanic Americans represented 7.84% of the available professional services businesses and received 16.32% of the dollars on federally assisted professional services prime contracts. This study does not statistically test the overutilization of M/WBEs.
Native Americans represented none of the available professional services businesses and received no federally assisted professional services prime contracts. This underutilization could not be tested because there were no businesses and no contracts awarded.
Caucasian Females represented 11.76% of the available professional services businesses and received 17.84% of the dollars on federally assisted professional services prime contracts. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 10.78% of the available professional services businesses and received 24.66% of the dollars on federally assisted professional services prime contracts. This study does not statistically test the overutilization of M/WBEs.
Non-minority Males represented 44.12% of the available professional services businesses and received 42.05% of the dollars on federally assisted professional services prime contracts. This study does not statistically test the underutilization of non-minority males.
Minority Business Enterprises represented 44.12% of the available professional services businesses and received 40.11% of the dollars on federally assisted professional services prime contracts. This underutilization is not statistically significant.
Women Business Enterprises represented 22.55% of the available professional services businesses and received 42.51% of the dollars on federally assisted professional services prime contracts. This study does not statistically test the overutilization of M/WBEs.
2-40
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.20: Disparity Analysis: Federally Assisted Professional Services Prime Contracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $1,013,904 14.12% 20.59% $1,478,291 -$464,387 0.69 not significant Asian Americans $694,111 9.67% 15.69% $1, 126,317 -$432,205 0.62 < .05 * Hispanic Americans $1,171,770 16.32% 7.84% $563,158 $608,611 2.08 ** Native Americans $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $1,281,298 17.84% 11.76% $844,738 $436,560 1.52 ** Non-minority Males $3,019,187 42.05% 44.12% $3,167,766 -$148,579 0.95 ** TOTAL $7,180,270 100.00% 100.00% $7,180,270
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $681,994 9.50% 5.88% $422,369 $259,625 1.61 ** African American Males $331,911 4.62% 14.71% $1,055,922 -$724,012 0.31 < .05 * Asian American Females $7,565 0.11% 2.94% $211,184 -$203,619 0.04 not significant Asian American Males $686,546 9.56% 12.75% $915,133 -$228,586 0.75 not significant Hispanic American Females $1,081,299 15.06% 1.96% $140,790 $940,510 7.68 ** Hispanic American Males $90,470 1.26% 5.88% $422,369 -$331,899 0.21 not significant Native American Females $0 0.00% 0.00% $0 $0 ---- ----
Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $1,281,298 17.84% 11.76% $844,738 $436,560 1.52 ** Non-minority Males $3,019,187 42.05% 44.12% $3,167,766 -$148,579 0.95 ** TOTAL $7,180,270 100.00% 100.00% $7,180,270
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $1,770,858 24.66% 10.78% $774,343 $996,515 2.29 ** Minority Males $1,108,927 15.44% 33.33% $2,393,423 -$1,284,496 0.46 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $2,879,785 40.11% 44.12% $3,167,766 -$287,981 0.91 not significant Women Business Enterprises $3,052,156 42.51% 22.55% $1,619,081 $1,433,075 1.89 ** ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-41
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
5. Federally Assisted Goods and Services Prime Contracts
The disparity analysis of the federally assisted goods and services prime contracts is described below in Table 2.21.
African Americans represented 22.54% of the available goods and services businesses and received 0.02% of the dollars on federally assisted goods and services prime contracts. This underutilization is statistically significant.
Asian Americans represented 10.98% of the available goods and services businesses and received
3.69% of the dollars on federally assisted goods and services prime contracts. This underutilization is statistically significant.
Hispanic Americans represented 5.20% of the available goods and services businesses and received 0.89% of the dollars on federally assisted goods and services prime contracts. This underutilization is statistically significant.
Native Americans represented none of the available goods and services businesses and received
0.09% of the dollars on federally assisted goods and services prime contracts. This study does not statistically test the overutilization of M/WBEs.
Caucasian Females represented 4.62% of the available goods and services businesses and received 6.35% of the dollars on federally assisted goods and services prime contracts. This study does not statistically test the overutilization of M/WBEs.
Minority Females represented 5.20% of the available goods and services businesses and received
1.12% of the dollars on federally assisted goods and services prime contracts. This underutilization is statistically significant.
Non-minority Males represented 56.65% of the available goods and services businesses and received 88.97% of the dollars on federally assisted goods and services prime contracts. This overutilization is statistically significant.
Minority Business Enterprises represented 38.73% of the available goods and services businesses and received 4.69% of the dollars on federally assisted goods and services prime contracts. This underutilization is statistically significant.
Women Business Enterprises represented 9.83% of the available goods and services businesses and received 7.47% of the dollars on federally assisted goods and services prime contracts. This underutilization is not statistically significant.
2-42
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
Table 2.21: Disparity Analysis: Federally Assisted Goods and Services Prime Contracts July 1, 2016 to June 30, 2021
Ethnicity Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African Americans $10,015 0.02% 22.54% $12,501,146 -$12,491,131 0.00 < .05 * Asian Americans $2,046,999 3.69% 10.98% $6,090,302 -$4,043,303 0.34 < .05 * Hispanic Americans $494,127 0.89% 5.20% $2,884,880 -$2,390,753 0.17 < .05 * Native Americans $47,232 0.09% 0.00% $0 $47,232 ---- ** Caucasian Females $3,520,692 6.35% 4.62% $2,564,338 $956,354 1.37 ** Non-minority Males $49,334,738 88.97% 56.65% $31,413,137 $17,921,602 1.57 < .05 † TOTAL $55,453,803 100.00% 100.00% $55,453,803
Ethnicity and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value African American Females $10,015 0.02% 4.62% $2,564,338 -$2,554,323 0.00 < .05 * African American Males $0 0.00% 17.92% $9,936,809 -$9,936,809 0.00 < .05 * Asian American Females $274,838 0.50% 0.58% $320,542 -$45,704 0.86 ---- Asian American Males $1,772,161 3.20% 10.40% $5,769,760 -$3,997,599 0.31 < .05 * Hispanic American Females $290,642 0.52% 0.00% $0 $290,642 ---- ** Hispanic American Males $203,485 0.37% 5.20% $2,884,880 -$2,681,395 0.07 < .05 * Native American Females $47,232 0.09% 0.00% $0 $47,232 ---- ** Native American Males $0 0.00% 0.00% $0 $0 ---- ----
Caucasian Females $3,520,692 6.35% 4.62% $2,564,338 $956,354 1.37 ** Non-minority Males $49,334,738 88.97% 56.65% $31,413,137 $17,921,602 1.57 < .05 † TOTAL $55,453,803 100.00% 100.00% $55,453,803
Minority and Gender Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Females $622,727 1.12% 5.20% $2,884,880 -$2,262,153 0.22 < .05 * Minority Males $1,975,645 3.56% 33.53% $18,591,448 -$16,615,803 0.11 < .05 * Minority and Females Actual Dollars Utilization Availability Expected Dollars Dollars Lost Disp. Ratio P-Value Minority Business Enterprises $2,598,372 4.69% 38.73% $21,476,328 -$18,877,956 0.12 < .05 * Women Business Enterprises $4,143,419 7.47% 9.83% $5,449,218 -$1,305,799 0.76 not significant ( ---- ) denotes an underutilized group with no contracts awarded, too few contracts awarded, or too few available firms to test statistical significance. ( * ) denotes a statistically significant underutilization. ( † ) denotes a statistically significant overutilization. ( ** ) this study does not test statistically the overutilization of M/WBEs or the underutilization of Non-minority Males.
2-43
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 2: Federally Funded Contracts Analysis
VI. Summary
During the July 1, 2016 to June 30, 2021 study period, the City of Oakland awarded 442 federally assisted prime contracts. The total value of the federally assisted prime contracts was $112,049,675. These contracts represented 23.02% of the contract dollars the City awarded during the five-year period.
Application of the strict scrutiny standard in Adarand v. Pena to the City’s federally assiste d contracts establishes an evidentiary basis for a prima facie case of a pattern or practice of discrimination. The disparity analysis presented in this chapter documented a statistically significant disparity in the City’s award of federally assisted prime contracts to minority and women-owned businesses.
As a recipient of federal financial assistance, the City is also obligated to comply with the affirmative action provisions of Title VI. Title VI prohibits the recipients of federal funds from discriminating on the basis of race, color, and national origin. The disparity findings provide a strong basis in evidence that the City discriminated in its award of federally assisted prime contracts. There is further evidence of the City’s violation of Title VI in its passive participation in the discrimination perpetrated by its prime contractors in their award of subcontracts.
Finally, there is even statistical evidence that the City, as a subrecipient of USDOT financial assistance from Caltrans and two local agencies, failed to meet its Caltrans Overall Statewide DBE Goal of 17.6% and the documented underutilization was statistically significant.
3 -1
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
CHAPTER 3: Covid-19 M/WBE Impact
Analysis
I. Introduction
Minority and woman-owned business enterprises (M/WBEs) and residents of inner-c ity communities nationwide experienced disproportionate impacts from the COVID-19 pandemic.
This analysis examines the immediate and latent effects of COVID-19 on M/WBEs in the City of Oakland and the allocation of resources to mitigate them. Two federal programs provided the primary funding to mitigate the impact of COVID -19 on small businesses. One was the CARES Act, officially known as the Coronavirus Aid, Relief, and Economic Security Act, a $2.2 trillion stimulus bill signed into federal law on March 27, 2020. The other was the American Rescue Plan Act (ARPA), a $1.9 trillion stimulus bill signed by the President on March 11, 2021. In addition to the federal pandemic financia l relief programs, the City partnered with community development financial institutions (CDFIs) that distributed direct grants, loans, and technical assistance to small business owners located in underrepresented communities. This analysis specifically examines M/WBEs’ access to federal funding, both directly from the government and through other channels, to understand the extent of support provided and the challenges faced by these businesses.
The City of Oakland received $36.9 million in CARES Act funding from the State of California. The funds were earmarked to provide financial and technical assistance to address the impacts of COVID-19 on City of Oakland businesses and residents. A significant portion of this assistance came from the Paycheck Protection Program (PPP), funded by the CARES ACT with $800 billion and administered by the United States Small Business Administration (SBA). The PPP provided direct loans and grants to eligible busines ses, with the aim of preserving jobs and sustaining small businesses by providing forgivable loans for payroll and operational expenses. This program played a crucial role in supporting M/WBEs during the pandemic.
Two waves of loans and grants were administered . The first wave, authorized in April 2020, required an eligible business to have at least one employee, and therefore did not include sole proprietors without employees. The second wave, authorized in January 2021, expanded eligibility to businesses without employees and independent contractors. However, it was not approved until 10 months after Governor Newsom issued a Stay- At-Home order for the state of California on March 19, 2020.
The ARPA economic stimulus package aimed to provide relief to individuals, families, businesses, and state and local governments adversely affected by the pandemic. Provisions in the bill targeted minority businesses and workers. Key provisions included di rect stimulus payments to eligible individuals, extended unemployment benefits, aid to small businesses, and support to address shortfalls in state and local government budgets due to the economic downturn.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-2
The City of Oakland was allocated $188,081,700 under the ARPA. The funds were earmarked to address pandemic revenue losses and support general government services. The United States Department of the Treasury prioritized equity in its ARPA spending guidelines to encourage local governments to target minority businesses and workers disproportionately impacted by the pandemic.
CDFIs also played a significant role in mitigating the impact of COVID -19 on small and minority businesses in Oakland. CDFIs, such as Working Solutions and Main Street Launch, provided crucial financial support and technical assistance to underserved communities during the pandemic. Their grants were underwritten by CARES Act funds, the Oakland COVID -19 Relief Fund, Union Bank, and individual donors.
Funding provided under the CARES Act and ARPA were the most crucial resources available to local governments to mitigate COVID -19’s impact on minority and woman- owned businesses. While financial assistance provided to small businesses by CDFIs was another important part of the effort to mitigate the impact of the pandemic on M/WBEs, its funding source was primarily from the CARES Act as well.
The methodology employed to assess the efficacy of the available funding in mitigating the impact of COVID -19 on minority and woman -owned businesses in the City of Oakland involved several strategies. However, it is important to note that the analytical framework was constrained by the limited available data quantifying both the immediate and latent effects of COVID-19. Some data was available detailing the administration of the federal funding.
However, even less information quantified the funding’s impact on mitigating COVID -19’s adverse impacts on the City of Oakland’s minority and woman-owned businesses.
II. Study Methodology
While there has not been significant scholarly research on the impact of federal funding, there are several COVID-19-related government reports available. The City of Oakland published a report on its COVID-19-related grants and also tracked data in Oracle, its financial system, on awarded contracts with COVID-19 funding assistance. The City of Oakland’s business license data available during and after the pandemic was another source for measuring COVID -19’s impact. Consequently, the methodology applied to address COVID -19’s impact on minority and woman-owned businesses in Oakland was defined by the available data mentioned below.
A. City of Oakland Grants Funded with CARES Act Financial Assistance
The City Administrator’s Office issued a report on April 2, 2021 entitled Overview of CARES Act Expenditures and Launch of CARES Act Website.41 The report describes the grants the
41 Overview of CARES Act Expenditures and Launch of CARES Act Website. https://cao-94612.s3.amazonaws.com/documents/21- 0402-CARES-Act-Info-Memo-with-attachments_2021-04-03-004652.pdf.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-3
Mayor issued between March 1, 2020 and December 30, 2020, using CARES Act funds. The grantees were selected by the City departments.
The description of the scope of work for each grant, the grantee’s profile, and the grant amount were assessed to determine the goods and services funded with financial assistance from the CARES Act. In addition, an attempt was made using the available dat a to determine if the scope of the grant complied with the provisions of the CARES Act.
B. City of Oakland Contracts Funded with CARES Act Financial Assistance
In the Oracle financial system, contracts funded by the CARES Act were coded in either the Fund Description or the Item Description field. Contracts in Oracle were reviewed to identify the prime contractor, goods and services procured, amount of the contra ct, ethnicity, gender, and business location of the contractor. An attempt was also made to determine if the scope of the contract complied with the provisions of the CARES Act.
C. United States Small Business Administration Paycheck Protection Program Loans and Grants
Government reports were the primary data on Paycheck Protection Program (PPP) grants and loans. The PPP data made available by the Small Business Administration includes, for most records, the business type, zip code, race/ethnicity, number of employees, gender, and North American Industry Classification System (NAICS) code. Recipients’ grants and loans were coded by industry, Employee Identification Number (EIN), and business size.
The demographic data profiled PPP grant recipients and included industry, zip code, and loan amount. However, the PPP loan data only identified race if the recipient answered the optional demographic question. The demographic data was analyzed to identify trends and patterns in the distribution of funds according to the business owner’s NAICS code, ethnicity, and gender.
Since the recipient’s ethnicity and gender were self-reported and disclosure was optional, any disparities reported by ethnicity needed to be cautiously interpreted. Furthermore, the ethnicity and gender of most recipients were missing.
D. American Rescue Plan Act Financial Assistance
Research was conducted on Legistar , the City’s legislative platform containing all legislative agenda information, to identify the goods and services procured with the ARPA funds. There were no contracts identified in Legistar as funded by the ARPA.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-4
E. Community Development Financial Institution Assistance
A CDFI report entitled The Working Solutions 2020 Social Impact Report 42 provided an overview of the organization’s support of small businesses in the Bay Area, including Oakland.
The report highlighted the impact of Working Solutions’ CDFI program, which provided loans and technical assistance to small businesses that might not qualify for traditional bank loans.
F. City of Oakland Business License Records
The City of Oakland’s business license records were examined to quantify the business closure rate during the pandemic. Changes in the business registration rate during and after the mandatory shutdown were analyzed using business license data from 2019 to 2022, maintained by the City’s Finance Department.
III. Study Findings
The federal government’s financial assistance was the primary resource available to the City of Oakland to mitigate the immediate impact of COVID-19 on its business community. Below are the study findings organized by the City’s sources of relief funding, as well as an analysis of the rate of change in the business licenses the City of Oakland Business Tax Office issued.
A. City of Oakland Administered CARES Act Financial
Assistance Grants
There were $17.5 million in CARES Act funds that supported 27 grants and contracts awarded by the Office of the Mayor between March 1, 2020 and December 30, 2020. According to the April 2, 2021 report entitled, “Overview of CARES Act Expenditures and Launch of CARES Act Website” issued by the City Administrator’s Office, these CARES-funded grants primarily targeted community -based organizations that offered servic es to residents and small businesses.
The grants were grouped into four categories: 1) displacement prevention (financial and technical assistance), 2) food security and health, 3) workforce support, and 4) enhanced access and resiliency improvements. While only a few of the grants were awarded to small businesses, some grantees provided technical assistance and economic development services to small businesses. Over $12 million was expended on business displacement prevention and financial and technical assistance services. Grants were also provided to support entrepreneurs transitioning to an e -commerce platform, negotiating commercial leases, and building more resilient business models. According to the April 2021 report, the grants did direct the COVID- 19 funds to mitigate the effect of the pandemic on the business community.
42 “Believe in small business.” Accessed December 2023. 2020 Social Impact Report.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-5
B. City of Oakland Administered CARES Act Financially Assisted Contracts
The CARES Act funds were also used as financial assistance for contracts the City Council awarded to for -profit and non- profit businesses between March 1, 2020 and December 30, 2020. A total of 48 contracts in Oracle indicated “CARES Act Relief Fund” in the Fund Segment Description field. The analysis revealed that these 48 contracts were valued at $7,139,071 and awarded to 42 vendors. Ten additional contracts were found with “CARES Act” indicated as a funding source in the Item Description field in Oracle. These contracts totaled $552,882.
As detailed in Table 3.1, most of the 58 contracts were awarded to non -minority males and non-profits. Minority businesses received 10.34% of contracts; women -owned businesses received 12.07%; and non-minority male-owned businesses received 81.03% of the contracts.
In addition, the majority of the dollars were awarded to businesses located outside the City of Oakland. Oakland business received 24 contracts valued at $2,600,368, and businesses outside of Oakland received 34 contracts valued at $5,091,586 as detailed in Table 3.2.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-6
Table 3.1: CARES Act Financially Assisted Contracts Awarded by Ethnicity and Gender
Number Percent A mount Percent
of Contracts of Contracts of Dollars of Dollars
African Americans 2 3.45% $17,000 0.22%
Asian Americans 1 1.72% $82,000 1.07%
Hispanic Americans 3 5.17% $8,525 0.11%
Native Americans 0 0.00% $0 0.00%
Caucasian Females 5 8.62% $364,066 4.73%
Non-minority Males 47 81.03% $7,220,363 93.87%
TOTAL 58 100.00% $7,691,954 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
African American Females 0 0.00% $0 0.00%
African American Males 2 3.45% $17,000 0.22%
Asian American Females 1 1.72% $82,000 1.07%
Asian American Males 0 0.00% $0 0.00%
Hispanic American Females 1 1.72% $4,760 0.06%
Hispanic American Males 2 3.45% $3,765 0.05%
Native American Females 0 0.00% $0 0.00%
Native American Males 0 0.00% $0 0.00%
Caucasian Females 5 8.62% $364,066 4.73%
Non-minority Males 47 81.03% $7,220,363 93.87%
TOTAL 58 100.00% $7,691,954 100.00%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Females 2 3.45% $86,760 1.13%
Minority Males 4 6.90% $20,765 0.27%
Number Percent Amount Percent
of Contracts of Contracts of Dollars of Dollars
Minority Business Enterprises 6 10.34% $107,525 1.40%
Woman Business Enterprises 7 12. 07% $450,826 5.86%
Minority and Women
Ethnicity
Ethnicity and Gender
Minority and Gender
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-7
Table 3.2 below presents the distribution of the CARES Act financially assisted contracts by geographic area. The largest number of contracts were awarded to Oakland businesses, although the majority of the dollars were awarded to businesses outside of Oakland.
Table 3.2: CARES Act Financially Assisted Contracts Awarded by Geographic Area
City Number of
Contracts
Percent of
Contracts
Total
Dollars
Percent of
Dollars
San Jose 3 5.17% $2,836,191 36.87%
Oakland 24 41.38% $2,600,368 33.81%
Pleasanton 3 5.17% $1,125,748 14.64%
Cotati 1 1.72% $288,360 3.75%
Hayward 2 3.45% $102,525 1.33%
San Leandro 1 1.72% $90,000 1.17%
San Mateo 2 3.45% $63,175 0.82%
Milpitas 1 1.72% $55,254 0.72%
Dublin 1 1.72% $49,500 0.64%
Brisbane 1 1.72% $48,970 0.64%
Concord 1 1.72% $27,703 0.36%
Alameda 1 1.72% $26,483 0.34%
San Francisco 2 3.45% $22,860 0.30%
Livermore 2 3.45% $13,067 0.17%
Fremont 1 1.72% $6,606 0.09%
Newark 2 3.45% $4,786 0.06%
Fairfield 1 1.72% $108 0.00%
Out-of-Bay Area 5 8.62% $255,333 3.32%
Out-of-State 4 6.90% $74,918 0.97%
Total 58 100.00% $7,691,954 100.00%
C. United States Small Business Administration Paycheck Protection Program Loans and Grants
Three sources of published data described the recipients of PPP loans and grants. The Investigative Reporting Workshop, a non -profit newsroom based at American University in Washington, D.C, compiled and published Small Business Administration data on PPP loans distributed in each state according to zip code.
43 PPP loan amounts were calculated based on
the average number of employees, the average monthly cost of the employer, employees’ salaries, and the gross income of sole proprietors. PPP loans for payroll taxes were subsequently forgiven.
Non-profit organizations comprised 7.2% of the nation’s PPP recipients, yet they received the largest sum of PPP loans. At the national level, non- minority businesses received the highest percentage of PPP loans at 52.21%. Asian American businesses received the second-highest
43 Download state-by-state PPP loan data. https://archive.investigativereportingworkshop.org/news/download-state-by-state-ppp-loan- data/.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-8
percentage of loans at 33.49%. African American firms received 7.51% of loans, and Hispanic American firms received 6.73%.
The analysis of the zip codes in the City of Oakland revealed that non- minority sole proprietorships received an average of $27,517 per PPP loan; Asian American businesses received $25,641; and Hispanic American businesses received an average of $18,912. African American businesses received an average of $15,785, and Native American businesses received an average of $3,033. A sole proprietorship is a business owned by one individual who is personally liable for the company’s debts and obligations. Being self -employed refers to anyone who works for themselves, which includes sole proprietors as well as other independent workers like freelancers.
Over 38% of the total loans to businesses in the City of Oakland were awarded to sole proprietorships, self-employed individuals, and independent contractors. Sole proprietorships and corporations, including S -corporations and limited liability companies, received the highest percentages of approved loans by the City.
An article published by Adhiti Bandlamudi and Mathew Green entitled “Unequal distribution:
How Businesses in East Oakland and other Communities of Color Missed Out on PPP Loans”44 used SBA data to identify a disparity in the distribution of PPP loans between communities of color and majority-owned businesses. The data was analyzed to determine why there was an ethnic disparity in the award of the PPP loans in East Oakland. The area between 42nd and 83rd avenues is home to many sole proprietors in the hospitality and service industries.
Mexican panaderias , Vietnamese nail salons, Black barber shops, auto repair shops, restaurants, and convenience stores owned by minorities are located in this corridor, which is defined as East Oakland.
The pandemic disproportionately impacted sole proprietors in the hospitality and service industry because they were mandated to close their businesses. Those without employees were ineligible for the PPP loans and grants during the first round of loans between April and December 2020. The article reported that only about 5% of the sole proprietors in East Oakland received PPP loans, while 49% of comparable businesses in Montclair, a predominantly Caucasian business district in the Oakland Hills, received PPP loans.
Another article published by Mohamed Al Elew entitled “Map: Which Neighborhoods Were Neglected by the Paycheck Protection Program ?”45 also used SBA data and found disparities in PPP loans made to proprietors in several Oakland business districts. In this article, mapped loan data indicated the number of loans issued per location but not the number of applicants.
As a result, the approval/denial rate in the two areas could not be reliably compared. An explanation for the lower loan approval rates in the East Oakland business district which is home to more minority proprietors may have resulted from a larger percentage of businesses not applying for PPP loans when the second round opened to sole proprietors and self -
44 Adhiti Bandlamudi and Matthew Green. Unequal distribution: How businesses in East Oakland and other communities of color missed out on PPP loans, May 11, 2021.
45 Mohamed Al Elew. “Map: Which Neighborhoods Were Neglected by The Paycheck Protection Program?” Reveal, March 3, 2023.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-9
employed individuals, as opposed to a higher applications rejection rate occurring for East Oakland business owners.46 The data, however, does not report the denial rate.
D. The American Rescue Plan Act Financial Assistance
According to Council Resolution 88721, 47 passed on June 24, 2021, the City received $188,081,700 in ARPA funds. According to the American Rescue Plan Act State and Local Fiscal Recovery Funds (SLFRF) 2023 Report, published on the City’s website , 48 the funds
were granted to the City to replace revenue losses experienced during the pandemic. The report does not provide any information regarding the distribution of funds to support small and minority businesses. Thus, the impact analysis on these funds could not be conducted.
E. Community Development Financial Institution Assistance
During the pandemic, the City partnered with several CDFIs to fund loans to small businesses under G rant #1005392.
49 Working Solutions, a San Francisco- based CDFI, provided $9.3 million in loans and relief grants to small businesses in the Bay Area from March 2020 to September 2021, and $1.375 million was dispersed to 275 low-income small business owners in Oakland acco rding to the Working Solutions 2020 Social Impact Report. 50 In addition to
loans and grants, Working Solutions provided technical assistance to small businesses in areas such as marketing and financial management.
The report provides a detailed assessment of the organization’s continuing impact in the East Bay. In 2021, Working Solutions allocated 34% of their loans to small businesses in the East Bay, including the City of Oakland, which contributed to job creation and business retention.
The loans were provided to businesses in various industries, including food services, education, and commerce.
The City also partnered with Main Street Launch, an Oakland- based CDFI. Under the City of Oakland CARES Act Small Business Grant Program, Main Street Launch distributed direct grants to Oakland small businesses to help them address the negative economic im pacts of COVID-19. Grants could be used to cover day-to-day operating costs, such as worker payroll, rent, and fixed debts.
The program provided 402 small businesses with grants of $10,000 each. Of the small business grants provided, 80% were given to businesses owned by people of color, including 25% to African American businesses and 20% to Hispanic American businesses. 51 46 Adhiti Bandlamudi and Matthew Green. Unequal distribution: How businesses in East Oakland and other communities of color missed out on PPP loans, May 11, 2021.
47 Oakland City Council Resolution No. 88721. https://cao-94612.s3.amazonaws.com/documents/88721-CMS-ARPA-Amendment.pdf.
48 The American Rescue Plan Act (ARPA) State and Local Fiscal Recovery Funds (SLFRF) 2023 Report.
49 “Attachment A: CARES Act Relief Fund Status.” City of Oakland Accessed January 2024.
City of Oakland | CARES Act Informational Reports (oaklandca.gov).
50 “Believe in small business.” Accessed December 2023. 2020 Social Impact Report.
51 Memorandum on Overview of CARES Act Expenditures and Launch of CARES Act Website, the City Administrator Edward D.
Reiskin, April 2, 2021.
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-10
These two organizations , which were designated to jointly support business communities, provided outreach to more than 1,200 businesses in Oakland, 28.24% of which were African American businesses and 30.78% of which were Hispanic American; 23% of those receiving outreach were restaurants/food services.
Overall, the analysis suggests that CDFIs positively impacted small businesses in Oakland during the COVID -19 pandemic, providing financial support and technical assistance to underserved communities and helping the businesses with grants and technical ass istance to mitigate the impact of COVID-19.
F. City of Oakland Business License Change Rate
An attempt was made to quantify the rate of change in the business licenses the City of Oakland Business Tax Office issued before, during, and immediately after the pandemic as a measure of business stability. Businesses issued a business license in 2019 were tracked to determine if their license was renewed in 2020, 2021, or 2022. The data was examined by the Council District.
The 2019 data was used as the baseline since annual business licenses must be renewed in January, and Governor Newsom did not issue the Stay-At-Home order for the State until March 19, 2020. The Business Tax Office provided the data by year. Each record included a business name, NAICS code, and business address. While the data was adequate to report the change in the number of licensed businesses, it was insufficient to describe the change i n the number of licensed businesses by the City Council district . However, it was possible to track the change in the number of licensed businesses by zip codes. The data revealed that business licenses decreased over four years from 62,456 licenses in 2019 to 55,977 licenses in 2022.
Table 3.3 shows the rate of change in the number of business licenses issued by zip code in 2019 and 2022. The decrease in the number of business licenses issued ranged from 8% in zip code 94619 to 15% in zip code 94621. According to “ZIP -Code.com,” 52 an online source of
US census data, over 30% of residents in zip code 94619, which has the lowest rate of change, are non -minorities. Meanwhile, 94% of the residents in zip code 94621 are identified as a minority.
52 ZIP Code 94621 Info, Map, Demographics for Oakland, CA (zip-codes.com).
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-11
Table 3.3: Business License Rate of Change by Oakland Zip Code
Zip Code
No. of Business Licenses
Rate of Change % Non-Minority 2019 2022
94601 5642 5109 -9% 10%
94602 3360 2974 -11% 41%
94603 3341 2940 -12% 5%
94605 4160 3563 -14% 16%
94606 4453 3997 -10% 19%
94607 5566 4923 -12% 26%
94608 2945 2568 -13% 37%
94609 3777 3411 -10% 47%
94610 3750 3368 -10% 54%
94611 4037 3547 -12% 63%
94612 3776 3369 -11% 31%
94618 2374 2093 -12% 70%
94619 2348 2154 -8% 31%
94621 4382 3710 -15% 6%
94705 115 99 -14% 70%
The data indicate that the largest decrease in the number of business licenses issued during the four-year period occurred in the zip codes populated predominantly by minorities. The areas with mostly non-minority residents witnessed the lowest non-renewal rate of business licenses issued during the same period. The table above presents the percentage of the residents in each zip code that is primarily non-minority as defined by “ZIP-Codes.com.”
IV. Conclusion
Federal financial assistance from the CARES Act and the American Rescue Plan Act were the primary sources of technical assistance funding available to the City of Oakland to mitigate the impact of the COVID-19 pandemic on the City’s minority and women-owned businesses. The review of the City’s allocation of federal financial assistance funds reveals shortcomings in the effort to mitigate the adverse impact of the pandemic on the minority and woman -owned business community through the award of contract dollars. A similar pattern was evident in the City’s award of contracts to African American and women-owned businesses, examined in the statistical analysis of disparity analysis for the study period of July 1, 2016 to June 30, 2021.
This COVID- 19 impact assessment documents ethnic disparities in the City’s award of contracts with federal financial assistance from CARES Act and American Rescue Plan Act funds, as well as businesses’ access to PPP loans. The City’s financial records indi cate that most contracts awarded with financial assistance from the CARES Act were disproportionately awarded to non-Oakland businesses and primarily to non-minority businesses.
Furthermore, there is evidence that during the COVID -19 pandemic, there was a significant decrease in the number of licensed businesses in the City of Oakland. The highest rate of
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Chapter 3: Covid-19 M/WBE Impact Analysis
3-12
decline in the number of licensed businesses occurred in zip codes populated primarily by minority residents. The lingering effects of the COVID-19 pandemic on the minority business community are also evident in the slow rate of recovery indicated by the business licenses issued by the zip code in the years since the 2020 shutdown.
Overall, the findings underscore the economic necessity for the City of Oakland to be deliberate and intentional in addressing the presence of policies and practices that have sustained the underutilization of minority businesses, which has been only exasperated during the pandemic.
In the aftermath of COVID -19, the City of Oakland should be more deliberate in eliminating the disparities in the distribution of its prime contracts and subcontracts. The City should commit to continue funding programs such as the displacement prevention (financial and technical assistance) program that used the CARES Act funds to mitigate the lingering effects of the COVID-19 pandemic. In addition, targeted and unbiased contracting with minority and woman-owned businesses should be an integral step toward building a more resilient and inclusive business community in Oakland after the COVID-19 pandemic.
City of Oakland
Disparity Study
Final Report
Appendix
i
Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Table of Contents
Table of Contents
APPENDIX: LEGAL REVIEW ........................................................................................................... 1
I. INTRODUCTION .............................................................................................................. 1
II. STANDARD OF REVIEW .................................................................................................. 2
A. RACE-CONSCIOUS PROGRAMS ..................................................................................... 3 B. GENDER-CONSCIOUS PROGRAMS ................................................................................. 4
III. BURDEN OF PROOF ........................................................................................................ 7
A. STRONG BASIS IN EVIDENCE ........................................................................................ 7 B. ULTIMATE BURDEN OF PROOF ...................................................................................... 8
IV. CROSON EVIDENTIARY FRAMEWORK ......................................................................... 10
A. ACTIVE OR PASSIVE PARTICIPATION .......................................................................... 10 B. SYSTEMIC DISCRIMINATORY EXCLUSION ................................................................... 13 C. ANECDOTAL EVIDENCE .............................................................................................. 20
V. CONSIDERATION OF RACE-NEUTRAL OPTIONS .......................................................... 25
VI. UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT ................................ 27
A. ANALYSIS OF THE NINTH CIRCUIT CHALLENGES ........................................................ 27
VII. TITLE VI....................................................................................................................... 31
VIII. SECTION 31 OF THE CALIFORNIA CONSTITUTION ...................................................... 32
IX. CONCLUSION ................................................................................................................ 36
X. LIST OF AUTHORITIES ................................................................................................. 38
A. CASES ......................................................................................................................... 38 B. STATUTES ................................................................................................................... 42
1 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Appendix: Legal Review
I. Introduction
This legal analysis summarizes the constitutional standards that the federal and state courts have applied to review local governments’ affirmative action contracting programs. The United States Supreme Court decision of City of Richmond v. J.A. Croson Co. (Croson) 1 raised the standard by
which lower courts review both local and state affirmative action contracting programs. The United States Supreme Court also adopted strict scrutiny as the standard of review for the federal Disadvantaged Business Enterprise program in Adarand Constructors, Inc. v. Fredrico Pena (Adarand).2
The C ity of Oakland Disparity Study was commissioned to examine the C ity’s procurement activities and identify any statistical disparities in the award of contracts to available local, small, emerging, minority, and wom an-owned business enterprises. Contracting policies, procedures, goals, or new programs recommended to remediate the results of the Study’s statistical findings will be narrowly tailored in compliance with Croson and the California Constitution.
The United States Supreme Court decision in Croson sets forth the strict scrutiny constitutional analysis applicable to race- based remedies for public contracting programs. Since the City of Oakland is located within California, the California Constitution and the United States Court of Appeals for the Ninth Circuit decisions including Western States Paving v. Washington Department of Transportation,
3 constitute binding legal precedent and are discussed herein. Since 1989, courts in several circuits, including the Ninth Circuit, have decided cases involving challenges to affirmative action programs. Case law s pertaining to Minority and Woman- owned Business Enterprise (M/WBE) programs adjudicated outside of the Ninth Circuit are discussed because they are instructive, albeit not binding, when implementing race-based public contracting programs.
The legal review also summarizes the state constitutional standard and relevant case law for applying race and gender conscious measures in California. The California Constitution, amended in November 1996 by Proposition 209,
4 prohibits the application of preferences in contracting programs based on race or gender. The California Supreme Court articulated the standard for the application of race conscious measures in public contracting under Article I, section 31 of the California Constitution in Coral Construction, Inc. v. City and County of San Francisco et al. 5 In
another seminal decision, the Ninth Circuit Court of Appeals in Coalition for Economic Equity v.
1 City of Richmond v. J.A. Croson Co., 488 U.S. 469 (1989).
2 Adarand Constructors, Inc. v. Fredrico Pena, 515 U.S. 200 (1995).
3 Western States Paving Co. v. State of Washington Dept. of Transportation, 407 F.3d 983 (9th Cir. 2005).
4 California Constitution, Art 1, Section 31.
5 Coral Construction Inc. v. City and County of San Francisco, et. al., 50 Cal.4th 315 (2010).
2 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Pete Wilson et. al .,6 considered the constitutionality of Proposition 209 in a challenge under the equal protection clause of the Fourteenth Amendment.
II. Standard of Review
The standard of review represents the measure by which a court evaluates whether a legal claim meets a certain statute, rule, or precedent. The standard of review that the Supreme Court set in Croson for race-specific programs is applicable to meet constitutional muster. Croson, decided in 1989, dealt with non-federally funded programs and established an evidentiary standard of review for race -based programs. The Court announced that programs employing racial classification would be subject to “strict scrutiny,” the highest form of judicial review. Broad notions of equity or general allegations of historical and societal discrimination against minorities fail to meet the requirements of strict scrutiny. Local governments, as set forth in Croson , have a compelling interest in addressing both active and passive discrimination. A governmental entity may adopt race-conscious programs only as a remedy for identified statistical ly significant evidence of disparity. The remedy must be narrowly tailored to ensure a m inimal burden is imposed upon unprotected classes.
In one of the most significant affirmative action decisions since Croson in decades, on June 29, 2023, the United States Supreme Court decided in Students for Fair Admissions, Inc. (“SFFA”) v.
President and Fellows of Harvard College and University of North Carolina et. al. 7 (Harvard) the
question presented to the Supreme Court did not address public contracting but whether the admission systems used by Harvard University (Harvard) and University of North Carolina (UNC) violate the Equal Protection Clause of the Fourteenth Amendment and Title VI of the Civil Rights Act of 1964, 42 U.S.C. sec. 2000e et seq.
8 The United States Supreme Court in a six-three decision held that the Harvard and UNC admission programs cannot be reconciled with the guarantees of the Equal Protection Clause of the Fourteenth Amendment and therefore, are unconstitutional. 9 Specifically, the Court held that the Harvard and UNC consideration of race in the admission process failed to satisfy the strict scrutiny standard and violated the Equal Protection Clause of the Fourteenth Amendment and Title VI. The Court reaffirmed that Title VI applies to public and private colleges and universities that receive federal assistance. Further, the Court reaffirmed that the colleges and universities must comply with the requirements imposed by the Equal Protection Clause.
In reaching this conclusion, the Supreme Court reasoned that first, the college s’ and universities’ compelling interest is not subject to meaningful judicial review. 10 Second, the Supreme Court
6 Coalition for Economic Equity v. Pete Wilson, et al, 122 F.3d 692 (9th Cir. 1997).
7 143 S.Ct. 2141 (2023).
8 Justice Jackson took no part in the decision or consideration of the Harvard University appeal.
9 143 S.Ct. at 2175. The above styled action concerns a constitutional challenge to college admissions programs, but its reason ing has application beyond the facts discussed in the Harvard opinion.
10 143 S.Ct. at 2166-2167.
3 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
concluded that there must be a meaningful connection between the means and the goal. 11 Third, the Court held that race conscious programs must not use race as a negative. 12 Fourth, the Court also opined that race conscious admissions programs must not use race in a manner that reinforces racial stereotypes. 13 Finally, the Court concluded that race conscious admission programs must have a logical end point. 14 The Court found the Harvard and UNC college admission programs were deficient on each of these points and therefore unconstitutional.
Although the Harvard decision addresses the use of race conscious measures in college and university admissions, the implication of the opinion raises fundamental questions about the future of affirmative action and the use of the race conscious measures in public contracting . To be constitutional, a race conscious affirmative action program must meet the compelling interest prong of the strict scrutiny standard, with the clear goal of eliminating disparities attributed to discrimination in public contracti ng. The Harvard Court is clear that the only constitutional justification to use race is to address specific, identified past discrimination. The Croson 15 Court
recognized availability/disparity studies and the statistical evidence as a means of establishing the evidentiary predicate for race conscious measures. The heightened scrutiny and analytical framework in Harvard mandates that any governmental entity relying upon an availability/disparity study must ensure that the predicate evidence establishing a compelling interest is based upon identified past discrimination that violates the Constitution or a statute.
Availability/disparity must address discrimination, the predicate evidence must be clear that any use of race conscious measures is to address discrimination either by the governmental entity or that it is a passive participant in private discrimination, i.e., prime contractors. Harvard reaffirmed that racial balancing, general assertions of industry discrimination or societal discrimination will not satisfy the compelling interest prong.
16 Any race based contracting program must be
measurable and capable of judicial review. Eliminating discrimination i n public contracting, however, unlike the goal of diversity, is both objectively measurable and capable of meaningful judicial review. Further, unlike the goal of achieving diversity, which is much more subjective, the goal of eliminating a statistically significant disparity in public contracting provides an objective measure to implement race conscious affirmative relief and an end date for the race conscious public contracting.
A. Race-Conscious Programs
In Croson, the United States Supreme Court affirmed that pursuant to the Fourteenth Amendment, the proper standard of review for state and local Minority Business Enterprise (MBE) programs,
11 143 S.Ct. at 2167 -2168.
12 143 S.Ct. at 2168 - 2169.
13 143 S.Ct. at 2169-2170.
14 143 S.Ct. at 2170.
15 City of Richmond v. JA Croson, 488 U.S. 469, 109 S.Ct. 706, 102 L.Ed.2d 854 (1989).
16 Harvard, 143 S.Ct. at 2173.
4 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
which are necessarily race-based, is strict scrutiny.17 Specifically, the government must show that the classification is narrowly tailored to achieve a compelling state interest.18 The Court recognized that a state or local entity may take action, in the form of an MBE program, to rectify the effects of identified, systemic racial discrimination within its jurisdiction. 19 Speaking for the majority, Justice O’Connor articulated various methods of demonstrating discrimination and set forth guidelines for crafting MBE programs so that they are “narrowly tailored” to address systemic racial discrimination.20
B. Gender-Conscious Programs
Since Croson, the Supreme Court has remained silent with respect to the appropriate standard of review for Women Business Enterprises (WBE) programs. Croson was limited to race-conscious measures and did not consider gender conscious measures. In other situations, the Supreme Court has ruled that gender classifications are not subject to the rigorous strict scrutiny standard applied to racial classifications. Instead, the federal courts have applied “intermediate scrutiny” to gender conscious classifications.
Notwithstanding the Supreme Court’s failure thus far to rule on a WBE program, the consensus among the federal courts of appeals is that the classifications are subject to a lesser standard of review than the more exacting standard of review applied to rac e conscious programs, which is intermediate scrutiny. Intermediate scrutiny requires the governmental entity to demonstrate that the action taken furthers an important governmental objective , employing a method that bears a fair and substantial relation to the goal.
21 The courts have also described the test as requiring an exceedingly persuasive justification for classifications based on gender. 22 The Court acknowledged that in “limited circumstances a gender -based classification favoring one sex can be justified if it intentionally and directly assists the members of that sex who are disproportionately burdened.” 23 Circuit courts vary in the application of Court precedent as it relates to gender-based programs.
The Ninth Circuit in Associated General Contractors of California v. City and County of San Francisco held that classifications based on gender require an “exceedingly persuasive
17 Croson, 488 U.S. at 493-95.
18 Id. at 493.
19 Croson, 488 U.S. at 509.
20 Croson, 488 U.S. at 501 -02. Cases involving education and employment frequently refer to the principal concepts applicable to the use of race in government contracting —compelling interest and narrowly tailored remedies. The Supreme Court in Croson and subsequent cases provides detailed guidance on how those concepts are to be treated in contracting. In Harvard a college admissions case, the Supreme Court rejected the goal of diversity in college admissions as a “compelling governmental interest.” The Supreme Court's analysis is much restrictive and may have serious implications for in determining the appropriate methodology for disparity studies and the application of statistical evidence to establish a presumption of discrimination.
21 Mississippi Univ. for Women v. Hogan, 458 U.S. 718, 726 (1982); see also United States v. Virginia, 518 U.S. 515, 524 (1996).
22 Hogan, 458 U.S. at 751; see also Michigan Rd. Builders Ass’n v. Milliken, 834 F.2d 583, 595 (6th Cir. 1987).
23 Id. at 728; see also Ballard, 419 U.S. at 508.
5 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
justification.”24 The Court noted that mere recitation of a benign compensatory purpose does not shield judicial inquiry into the actual purpose of the underlying statutory scheme. The city may invoke a compensatory purpose only if members of the gender benefitted by the c lassification actually suffer a disadvantage related to the classification and the classification does not reflect or reinforce archaic and stereotyped notions of the roles and abilities of women.
The Fourth Circuit in H.B. Rowe Co. v. Tippett stated that the defender of a gender classification statute must demonstrate that the classification “serves important governmental objectives and that the discriminatory means are substantially related to the achievement of those objectives.” In applying this standard, the appellate court held that the public sector classifications based on gender require an exceedingly persuasive justification. 25 The justification is valid only if members
of the gender benefited by the classification actually suffer a disadvantage related to the classification, and the classification does not reflect or reinforce archaic and stereotyped notions of the roles and abilities of women.
26 Consistent with the Court’s finding with regard to gender classification, the United States Court of Appeals for the Third Circuit (Third Circuit) in Contractors Association of Eastern Pennsylvania v. City of Philadelphia (Philadelphia IV) ruled in 1993 that the standard of review governing WBE programs is different from the standard imposed upon MBE programs. 27 The
Third Circuit held that, whereas MBE programs must be narrowly tailored to a compelling state interest, WBE programs must be substantially related to important governmental objectives.28 In contrast, an MBE program would survive constitutional scrutiny only by demonstrating a pattern and practice of systemic racial exclusion or discrimination in which a state or local government was an active or passive participant.29
The United States Court of Appeals for the Sixth Circuit (Sixth Circuit) applies both the strict scrutiny standard and the intermediate standard of review to WBE programs depending on the application of the program’s policies. In Brunet v. City of Columbus (Brunet) , the Sixth Circuit held that the strict scrutiny standard of review is applied to an affirmative action plan based on gender classification when challenged under the Equal Protection Clause. 30 The court made a
distinction between “gender-conscious” plans and “gender -preference” plans. Pursuant to Sixth Circuit precedent, “gender -conscious” plans are subject to the intermediate standard of review, while “gender-preference” plans are subject to the strict scrutiny standard of review.31 The court classifies a program as “gender-conscious” if its policies utilize gender as a factor but are gender
24 Coalition for Economic Equity v. Pete Wilson, 122 F.3d 692, 702 (9th Cir. 1997).
25 H.B. Rowe Co., v. Tippett, 615 F.3d 233, 255, (4th Cir. 2010).
26 Schlesinger v. Ballard, 419 U.S. 498, 508 (1975).
27 Contrs. Ass’n of E. Pennsylvania v. City of Philadelphia (Philadelphia IV), 6 F. 3d 990, 1001 (3rd Cir. 1993).
28 Philadelphia IV, 6 F.3d at 1009-10.
29 Id. at 1002.
30 Brunet v. City of Columbus, 1 F.3d 390, 404 (6th Cir. 1993).
31 Brunet, 1 F.3d at 404.
6 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
neutral in their application, and have no disparate impact on individuals based on gender when the policies are applied equally to both men and women. 32 The court classifies a program as “gender-preference” if its policies contain gender -based criteria that are applied directly as a preference.33
The United States Court of Appeals for the Eleventh Circuit (Eleventh Circuit) also applied intermediate scrutiny.
34 In its review and affirmation of the district court’s holding, in Engineering Contractors Association of South Florida v. Metropolitan Dade County ( Dade County II ), the Eleventh Circuit cited the Third Circuit’s 1993 formulation in Philadelphia IV : “[T]his standard requires the [County] to present probative evidence in support of its stated rationale for the gender preference, discrimination against women- owned contractors.” 35 Although the Dade County II
appellate court ultimately applied the intermediate scrutiny standard, it queried whether the United States Supreme Court decision in United States v. Virginia (Virginia) ,36 finding the all - male program at Virginia Military Institute unconstitutional, signaled a heightened level of scrutiny.
37 In the case of Virginia, the Court held that parties who seek to defend gender -based government action must demonstrate an exceedingly persuasive justification for that action. 38 While the Eleventh Circuit echoed that speculation, it concluded that “[u]nless and until the U.S.
Supreme Court tells us otherwise, intermediate scrutiny remains the applicable constitutional standard in gender discrimination cases, and a gender preferen ce may be upheld so long as it is substantially related to an important governmental objective.”39
In Dade County II, the Eleventh Circuit C ourt noted that the United States Court of Appeals for the Third Circuit in Philadelphia IV was the only federal appellate court that explicitly attempted to clarify the evidentiary requirement applicable to WBE programs. 40 Dade County II interpreted that standard to mean that “evidence offered in support of a gender preference must not only be ‛probative’ [but] must also be ‘sufficient.’
41 It also reiterated two principal guidelines of intermediate scrutiny evidentiary analysis: (1) under this test, a local government must demonstrate some past discrimination against women, but not necessarily discrimination by the
32 Id. (citing Jacobsen v. Cincinnati Bd. of Educ., 961 F.2d 100, 102 (6th Cir. 1992)).
33 Id.
34 Ensley Branch, N.A.A.C.P. v. Seibels, 31 F. 3d 1548, 1579-80 (11th Cir. 1994).
35 Dade County II, 122 F.3d at 909 (citing Philadelphia IV, 6 F.3d at 1010; see also Saunders v. White, 191 F. Supp. 2d 95, 134 (D. D.C. 2002) (stating “[g]iven the gender classifications explained above, the initial evaluation procedure must satisfy intermediate scrutiny to be constitutional.”).
36 United States v. Virginia, 518 U.S. 515, 534 (1996).
37 Dade County II, 122 F.3d at 907-08.
38 Virginia, 518 U.S. at 534.
39 Dade County II, 122 F.3d at 908.
40 Id. at 909.
41 Id. at 910.
7 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
government itself;42 and (2) the intermediate scrutiny evidentiary review is not to be directed toward mandating that gender-conscious affirmative action is used only as a “last resort”43 but instead ensuring that the affirmative action is “a product of analysis rather than a stereotyped reaction based on habit.”44
This determination requires “evidence of past discrimination in the economic sphere at which the affirmative action program is directed.”45 The court also stated that “a gender-conscious program need not closely tie its numerical goals to the proportion of qualified women in the market.”46
III. Burden of Proof
The procedural protocol established by Croson imposes an initial burden of proof upon the government to demonstrate that the challenged MBE program is supported by a strong factual predicate, i.e., documented evidence of past discrimination. Notwithstanding this requirement, the plaintiff bears the u ltimate burden of proof to persuade the court that the MBE program is unconstitutional. The plaintiff may challenge a government’s factual predicate on any of the following grounds:
47 • Disparity exists due to race-neutral reasons.
• Methodology is flawed.
• Findings from data analysis are statistically insignificant. • Conflicting data exists.
Thus, a disparity study must be analytically rigorous, at least to the extent that the data permits, if it is to withstand legal challenge.
48 A. Strong Basis in Evidence
Croson requires defendant jurisdictions to produce a “strong basis in evidence” that the objective of the challenged MBE program is to rectify the effects of discrimination. 49 The issue of whether or not the government has produced a strong basis in evidence is a question of law.50 Because the
42 Id. (quoting Ensley Branch, 31 F.3d at 1580).
43 Id. (quoting Hayes v. N. State Law Enf’t Officers Ass’n, 10 F.3d 207, 217 (4th Cir. 1993) (racial discrimination case).
44 Id. (quoting Philadelphia IV, 6 F.3d at 1010).
45 Id. (quoting Ensley Branch, 31 F.3d at 1581).
46 Id. at 929; cf, Builders Ass’n of Greater Chicago v. City. of Cook, 256 F. 3d 642, 644 (7th Cir. 2001) (questioned why there should be a lesser standard where the discrimination was against women rather than minorities).
47 These were the issues on which the district court in Philadelphia reviewed the disparity study before it.
48 Croson, 488 U.S. 469.
49 Concrete Works of Colorado v. City and County of Denver , 36 F.3d 1513 at 1522 (10th Cir. 1994), (citing Wygant v. Jackson Board of Education, 476 U.S. 267, 292 (1986); see Croson 488 U.S. at 509 (1989)).
50 Id. (citing Associated General Contractors v. New Haven, 791 F.Supp. 941, 944 (D. Conn 1992)).
8 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
sufficiency of the factual predicate supporting the MBE program is at issue, factual determinations relating to the accuracy and validity of the proffered evidence underlie the initial legal conclusion to be drawn.
51 The adequacy of the government’s evidence is “evaluated in the context of the breadth of the remedial program advanced by the [jurisdiction].”
52 The onus is upon the jurisdiction to provide a
factual predicate that is sufficient in scope and precision to demonstrate that current disparity in utilization necessitated the adoption of the MBE program.
B. Ultimate Burden of Proof
The party challenging an MBE program will bear the ultimate burden of proof throughout the course of the litigation—despite the government’s obligation to produce a strong factual predicate to support its program.
53 The plaintiff must persuade the court that the program is constitutionally flawed by challenging the government’s factual predicate for the program or by demonstrating that the program is overly broad.
Justice O’Connor explained the nature of the plaintiff’s burden of proof in her concurring opinion in Wygant v. Jackson Board of Education (Wygant).
54 She stated that following the production of
the factual predicate supporting the program:
[I]t is incumbent upon the non- minority [plaintiffs] to prove their case; they continue to bear the ultimate burden of persuading the court that the [government’s] evidence did not support an inference of prior discrimination and thus a remedial purpose, or that the plan instituted on the basis of this evidence was not sufficiently “narrowly tailored.”
55 In Philadelphia, the Third Circuit Court of Appeals clarified this allocation of the burden of proof and the constitutional issue of whether facts constitute a “strong basis” in evidence. 56 That court
wrote that the allocation of the burden of persuasion depends on the theory of constitutional invalidity that is being considered.
57 If the plaintiff’s theory is that an agency has adopted race - based preferences with a purpose other than remedying past discrimination, the plaintiff has the burden of convincing the court that the identified remedial motivation is a pretext and that the real motivation was something else.
58 51 Concrete Works I, 36 F.3d at 1522.
52 Concrete Works I, 36 F.3d at 1522. (citing Croson 488 U.S. at 498).
53 Id. (citing Wygant, 476 U.S. at 277-278).
54 Wygant v. Jackson Board of Education, 476 U.S. 267, 293 (1986).
55 Wygant, 476 U.S. at 293.
56 Contractors Ass’n of Eastern Pennsylvania 91 F.3d 586, 596 (3rd Cir. 1996).
57 Id. at 597.
58 Contractors Association of Eastern Pennsylvania, 893 F. Supp. 419, 597 (E.D. Pa 1995) (Philadelphia V).
9 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
The situation differs if the plaintiff’s theory is that an agency’s conclusions as to the existence of discrimination and the necessity of the remedy chosen have no strong basis in evidence. In such a situation, once the agency comes forward with evidence of facts alleged to justify its conclusions, the plaintiff has the burden of persuading the court that those facts are not accurate. However, the ultimate issue of whether a strong basis in evidence exists is an issue of law, and the burden of persuasion in the traditional sense plays no role in the court’s resolution of that ultimate issue. 59 In Concrete Works II, the Tenth Circuit clearly stated that as the plaintiff’s burden is an evidentiary one, it cannot be discharged simply by argument. The court cited its opinion in Adarand Constructors Inc. v. Slater, 228 F.3d 1147 (2000): “[g]eneral criticism of disparity studies, as opposed to particular evidence undermining the reliability of the particular disparity study, is of little persuasive value.”
60 The Supreme Court’s disposition of the plaintiff’s petition for certiorari strongly supports the conclusion that the plaintiff has the burden of proof. Supreme Court review of appellate decisions is discretionary in that four justices must agree, so normally little can be inferred from its denial.
However, Concrete Works is not the typical instance. Justice Scalia concurred in Croson that strict scrutiny was required of race-conscious contracting programs. However, his antagonism there and over the years to the use of race is clear. Justice Scalia’s view is that governmental remedies should be limited to provable individual victims. That view is at the base of his written dissent, on which only Chief Justice Rehnquist joined, to the Court’s November 17, 2003, decision not to grant certiorari in Concrete Works.
61 The change in the composition of the Supreme Court to a six -three conservative majority has shifted Justice Scalia’s minority opinion to the prevailing majority. 62 Justice Scalia would place the burden of proof squarely on the defendant jurisdiction when a plaintiff pleads unequal treatment. Pursuant to Justice Scalia’s argument, the Tenth Circuit was simply wrong, because the defendant should have to prove that there was discrimination. He takes this position despite the case law in equal employment cases, from which Croson was derived, that the defendant has the burden of production. Once the defendant satisfies that, the burden of proof shifts to the plaintiff.
Contrary to Justice Scalia’s dissenting opinion, the Tenth Circuit in Concrete Works II held that the defendant must show “a strong basis” for concluding that MBEs are being discriminated against. Additionally, the plaintiff must put in evidence that negates its validity.
59 At first glance, the position of the Third Circuit does not square with what the Eleventh Circuit announced as its standard in reviewing whether a jurisdiction has established the “compelling interest” required by strict scrutiny. The Eleventh Circuit said the inquiry was factual and would be reversed only if it was “clearly erroneous.” However, the difference in formulation may have had to do with the angle from which the question was approached: If one starts with the disparity study—whether a compelling interest has been shown—factual issues are critical. If the focus is the remedy, because the constitutional issue of equal protection in the context of race comes into play, the review is necessarily a legal one.
60 Concrete Works of Colorado, Inc. v. City and County of Denver, Colorado, 321 F.3d 950, 979 (10th Cir. 2003) (quoting Adarand Constructors, Inc. v. Slater, 228 F.3d 1147 (2000)).
61 Concrete Works of Colorado, Inc. v. City and County of Denver, Colorado , 321 F.3d 950 (10th Cir. 2003), petition for cert. denied, (U.S.
Nov. 17, 2003) (No. 02-1673) (“Concrete Works IV”).
62 Harvard, 143 S.Ct. at 2173.
10 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
IV. Croson Evidentiary Framework
Government entities must construct a strong evidentiary framework to stave off legal challenges and to ensure that the adopted MBE program complies with the requirements of the Equal Protection clause of the U.S. Constitution. The framework must comply wit h the stringent requirements of the strict scrutiny standard. Accordingly, there must be a strong basis in evidence, and the race-conscious remedy must be “narrowly tailored,” as set forth in Croson. A summary of the appropriate types of evidence to satisfy the first element of the Croson standard follows.
A. Active or Passive Participation
Croson requires that the local entity seeking to adopt an MBE program must have perpetuated the discrimination to be remedied by the program. However, the local entity need not be an active perpetrator of such discrimination. Passive participation will satisfy this part of the Court’s strict scrutiny review.
63 An entity will be considered an “active” participant if the evidence shows that it has created barriers that actively exclude MBEs from its contracting opportunities. In addition to examining the government’s contracting record and process, MBEs who have c ontracted or attempted to contract with that entity can be interviewed to relay their experiences in pursuing that entity’s contracting opportunities.
64 An entity is considered to be a “passive” participant in private sector discriminatory practices if it has infused tax dollars into that discriminatory industry. 65 The Croson Court emphasized a
government’s ability to passively participate in private sector discrimination with monetary involvement, stating:
[I]t is beyond dispute that any public entity, state or federal, has a compelling interest in assuring those public dollars, drawn from tax contributions of all citizens, do not serve to finance the evil of private prejudice.
66 Until Concrete Works I , the inquiry regarding passive discrimination was limited to the subcontracting practices of government prime contractors. In Concrete Works I, the Tenth Circuit considered a purely private sector definition of passive discrimination. Since no government funds were involved in the contracts analyzed in the case, the court questioned whether purely private sector discrimination was likely to be a fruitful line of in quiry.67 On remand the district court
63 Croson, 488 U.S. at 509.
64 Wygant v. Jackson Board of Education, 476 U.S. 267 at 275 (1985).
65 Croson, 488 U.S. at 492; Coral Construction, 941 F.2d at 916.
66 Croson, 488 U.S. at 492.
67 Concrete Works I, 36 F.3d at 1529. “What the Denver MSA data does not indicate, however, is whether there is any linkage between Denver’s award of public contracts and the Denver MSA evidence of industry -wide discrimination. That is, we cannot tell whether Denver indirectly contributed to private discrimination by awarding public contracts to firms that in turn discriminated against MBE and/or WBE subcontractors in other private portions of their business or whether the private discrimination was practiced by firms who did not receive any public contracts.
11 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
rejected the three disparity studies offered to support the continuation of Denver's M/WBE program, because each focused on purely private sector discrimination. Indeed, Denver’s focus on purely private sector discrimination may account for what seemed to be a shift by the court away from the standard Croson queries of: (1) whether there was a firm basis in the entity’s contracting process to conclude that discrimination existed; (2) whether race-neutral remedies would resolve what was found; and (3) whether any race -conscious remedies had to be narrowly tailored. The court noted that in the City of Denver’s disparity studies, the chosen methodologies failed to address the following six questions:
• Was there pervasive discrimination throughout the Denver Metropolitan Statistical Area (MSA)?
• Were all designated groups equally affected?
• Was discrimination intentional?
• Would Denver’s use of such firms constitute “passive” participation? • Would the proposed remedy change industry practices?
• Was the burden of compliance—which was on white male prime contractors in an intensely competitive, low profit margin business—a fair one?
The district court concluded that the City of Denver had not documented a firm basis of identified discrimination derived from the statistics submitted.
68 However, the Tenth Circuit on appeal of
that decision completely rejected the district court’s analysis. The district court’s queries required Denver to prove the existence of discrimination. Moreover, the Tenth Circuit explicitly held that “passive” participation included private sector discrimination in the marketplace. Relying on Shaw v. Hunt,
69 a post-Croson Supreme Court decision, the court wrote as follows:
The Shaw Court did not adopt any requirement that only discrimination by the governmental entity, either directly or by utilizing firms engaged in discrimination on projects funded by the entity, was remediable. The Court, however, did set out two conditions which must be met for the governmental entity to show a compelling interest. “First, the discrimination must be identified discrimination.” Id. at 910.
The City can satisfy this condition by identifying the discrimination “public or private, with some specifici ty.” Id. (quoting Croson, 488 U.S. at 504 (emphasis added)). The governmental entity must also have a “strong basis in evidence to conclude that remedial action was necessary.” Id.
70 Neither Croson nor its progeny clearly state whether private discrimination that is in no way funded with public tax dollars can, by itself, provide the requisite strong basis in evidence necessary to justify a municipality’s affirmative action program. A plurality in Croson simply suggested that remedial measures could be justified upon a municipality’s showing that ‘it had essentially become “a passive participant” in a system of racial exclusion practiced by elements of the local construction industry’ [citing Croson ]. Although we do not read Croson as requiring the municipality to identify an exact linkage between its award of public contracts and private discrimination, such evidence would at least enhance the municipality’s factual predicate for a race- and gender-conscious program. The record bef ore us does not explain the Denver government’s role in contributing to the underutilization of MBEs and WBEs in the private construction market in the Denver MSA, and this may well be a fruitful issue to explore at trial.”
68 Id. at 61.
69 Shaw v. Hunt, 517 U.S. at 519.
70 Concrete Works IV, 321 F.3d at 975-76.
12 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
The Tenth Circuit therefore held that the City was correct in its attempt to show that it “indirectly contributed to private discrimination by awarding public contracts to firms that in turn discriminated against M/WBE subcontractors in other private porti ons of their business.” 71 The
court emphasized that its reading of Croson 72 and its own precedents supported that conclusion.
Also, the court pointed out that the plaintiff, which had the burden of proof, failed to introduce conflicting evidence, and merely argued that the private sector was out of bounds and that Denver’s data were flawed.73
The courts found that the disparities in MBE private sector participation, demonstrated with the rate of business formation and lack of access to credit that affected MBEs’ ability to expand in order to perform larger contracts, gave Denver a firm basis to conclude that there was actionable private sector discrimination. For technical legal reasons, 74 however, the court did not examine
whether the consequent public-sector remedy—i.e., one involving a goal requirement on the City of Denver’s contracts—was “narrowly tailored.” The court took this position despite the plaintiff’s contention that the remedy was inseparable from the findings and that the court should have addressed the issue of whether the program was narrowly tailored.
Ten months later, in Builders Association of Greater Chicago v. City of Chicago, 75 the question of
whether a public -sector remedy is “narrowly tailored” when it is based on purely private sector discrimination was at issue. The district court reviewed the remedies derived from private sector practices with more stringent scrutiny. It found that there was discrimination against minorities in the Chicago construction industry. However, it did not find the City of Chicago’s MBE subcontracting goal an appropriate remedy, because it was not “narrowly tailored” to address the lack of access to credit for MBEs, which was the documented private discrimination. The court also criticized the remedy because it was a “rigid numerical quota,” and there was no individualized review of MBE beneficiaries, citing Justice O’Co nnor’s opinion in Gratz v.
Bollinger.
76 The question of whether evidence of private sector practices met the Court standard also arose in Builders Ass’n of Greater Chicago v. County of Cook.
77 In this case, the Seventh Circuit cited
71 Slip opinion, pg. 20.
72 See also Shaw v. Hunt, 517 U.S. 899 (1996), which it cited.
73 Whether Denver had the requisite strong basis to conclude that there was discrimination was a question of law; it was for the Tenth Circuit to decide. The standard by which the factual record before it was reviewed was “clearly erroneous.”
74 Plaintiff had not preserved the issue on appeal; therefore, it was no longer part of the case.
75 298 F. Supp2d 725 (N.D. Ill. 2003).
76 123 S. Ct, 2411, 2431 (2003). Croson requires a showing that there was a strong basis for concluding that there was discrimination before a race-conscious remedy can be used in government contracting. In the University of Michigan cases that considered race-conscious admissions programs, a key element in the decisions is the Court acceptance of diversity as a constitutionally sufficient ground; it did not require a showing of past discrimination against minority applicants. If it had, the basis for a program would have disappeared. Discrimination is the historic concern of the 14th Amendment, while promoting diversity is of recent origin. The Court may have been disposed therefore to apply a more rigorous review of legislation based on diversity. The 14th Amendment’s prohibitions are directed against “state action.” The private sector behavior of businesses that contract with state and local governments is a conceptual step away from what it does in i ts public-sector transactions. That distinction may lead courts to apply the Gratz approach of more searching scrutiny to remedial plans based on private sector contracting.
77 256 F.3d 642 (7th Cir. 2001).
13 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Associated General Contractors of Ohio v. Drabik 78 in throwing out a 1988 County ordinance under which at least 30 percent of the value of prime contracts was to go to minority subcontractors and at least ten percent to woman -owned businesses. Appellants argued that evidence of purely private sector discrimination justified a public-sector program. The Court found that the County, in order to justify the public-sector remedy, had to demonstrate that it had been at least a passive participant in the private discrimination by showing that it had infused tax dollars into the discriminatory private industry.
B. Systemic Discriminatory Exclusion
Croson clearly established that an entity enacting a business affirmative action program must demonstrate identified, systemic discriminatory exclusion on the basis of race or any other illegitimate criteria (arguably gender).
79 Thus, it is essential to demonstrate a pattern and practice of such discriminatory exclusion in the relevant market area. 80 Using appropriate evidence of the entity’s active or passive participation in the discrimination, as discussed above, the showing of discriminatory exclusion must cover each racial group to whom a remedy would apply. 81 Mere statistics and broad assertions of purely societal discrimination will not suffice to support a race or gender-conscious program.
Croson enumerates several ways an entity may establish the requisite factual predicate. First, a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contra ctors actually engaged by an entity or by the entity’s prime contractors may support an inference of discriminatory exclusion. 82 In other words, when the relevant statistical pool is used, a showing of gross statistical disparity alone “may constitute prima facie proof of a pattern or practice of discrimination.” 83 78 214 F.3d 730 (6th Cir. 2000).
79 Croson, 488 U.S. at 469. See also Monterey Mechanical v. Pete Wilson, 125 F.3d 702 (9th Cir. 1997). The Fifth Circuit Court in W.H. Scott Construction Co. v. City of Jackson, Mississippi , 199 F.3d 206 (1999) found that the City’s MBE program was unconstitutional for construction contracts because minority participation goals were arbitrarily set and not based on any objective data. Moreover, the Court noted that had the City implemented the recommendations from the disparity study it commissioned, the MBE program may have withstood judicial scrutiny (the City was not satisfied with the study and chose not to adopt its conclusions). “Had the City adopted particular ized findings of discrimination within its various agencies and set participation goals for each accordingly, our outcome today might be different. Absent such evidence in the City’s construction industry, however, the City lacks the factual predicates required under the Equal Prot ection Clause to support the Department’s 15% DBE-participation goal.”
In 1996, Houston Metro had adopted a study done for the City of Houston whose statistics were limited to aggregate figures th at showed income disparity between groups, without making any connection between those statistics and the City's contracting policies. The disadvantages cited that M/WBEs faced in contracting with the City also applied to small businesses. Under Croson, that would have pointed to race-neutral remedies. The additional data on which Houston Metro relied was even less availing. Its own expert contended that the ratio of lawsuits involving private discrimination to total lawsuits and ratio of unskilled black wages to unskilled white wages established that the correlation between low rates of black self-employment was due to discrimination. Even assuming that nexus, there is nothing in Croson that accepts a low number of MBE business formation as a basis for a race-conscious remedy.
80 Croson, 488 U.S. at 509.
81 Croson, 488 U.S. at 506. As the Court said in Croson, “[t]he random inclusion of racial groups that, as a practical matter, may never have suffered from discrimination in the construction industry in Richmond suggests that perhaps the city’s purpose was not in fact to remedy past discrimination.” See North Shore Concrete and Assoc. v. City of New York, 1998 U.S. Dist. LEXIS 6785 (EDNY 1998), which rejected the inclusion of Native Americans and Alaskan Natives in the City’s program, citing Croson.
82 Croson, 488 U.S. at 509.
83 Id. at 501 (citing Hazelwood School District v. United States, 433 U.S. 299, 307-08 (1977)).
14 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
The Croson Court made clear that both prime contract and subcontracting data were relevant. The Court observed that “[w]ithout any information on minority participation in subcontracting, it is quite simply impossible to evaluate overall minority representation in the city’s construction expenditures.”84 Subcontracting data are also important means by which to assess suggested future remedial actions. Since the decision makers are different for the awarding of prime contracts and subcontracts, the remedies for discrimination identified at a prime contractor versus subcontractor level may also be different.
Second, “evidence of a pattern of individual discriminatory acts can, if supported by appropriate statistical proof, lend support to a local government’s determination that broader remedial relief is justified.”85 Thus, if an entity has statistical evidence that non-m inority contractors are systematically excluding minority businesses from subcontracting opportunities, it may act to end the discriminatory exclusion. 86 Once an inference of discriminatory exclusion arises, the entity may act to dismantle the closed business system.
In Coral Construction v. King County, the Ninth Circuit Court of Appeals further elaborated upon the type of evidence needed to establish the factual predicate that justifies a race-conscious remedy.
The court held that both statistical and anecdotal evidence should be relied upon in establis hing systemic discriminatory exclusion in the relevant marketplace as the factual predicate for an MBE program.87 The court explained that statistical evidence, standing alone, often does not account for the complex factors and motivations guiding contracting decisions, many of which may be entirely race-neutral.88
Likewise, anecdotal evidence, standing alone, is unlikely to establish a systemic pattern of discrimination.89 Nonetheless, anecdotal
evidence is important because the individuals who testify about their personal experiences bring “the cold numbers convincingly to life.”90
1. Geographic Market
Croson did not speak directly to how the geographic market is to be determined. In Coral Construction, the Court of Appeals held that “an MBE program must limit its geographical scope to the boundaries of the enacting jurisdiction.”91 Conversely, in Concrete Works I the Tenth Circuit 84 C roson , 488 U.S. at 502-03.
85 Id . at 509.
86 Id .
87 C oral Construction . Co. v. King County, 941 F.2d 910, 919 (9th Cir. 1919). 88 Id .
89 I d. at 919.
90 Id . (quoting International Brotherhood of Teamsters v. United States (Teamsters), 431 U.S. 324, 339 (1977)). 91 C oral Construction , 941 F.2d at 925.
15 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Court of Appeals specifically approved the Denver MSA as the appropriate market area, since 80 percent of the construction contracts were let there.92
Taken together, these cases support a definition of market area that is reasonable rather than dictated by a specific formula. Croson and its progeny did not provide a bright line rule for local market area, which determination should be fact -based. An entity may limit consideration of evidence of discrimination within its own jurisdiction. 93 Extra-jurisdictional evidence may be
permitted when it is reasonably related to where the jurisdiction contracts.94
2. Current Versus Historical Evidence
In assessing the existence of identified discrimination through demonstration of a disparity between MBE utilization and availability, it may be important to examine disparity data both prior to and after the entity’s current MBE program was enacted. This will be referred to as “pre - program” versus “post-program” data.
On the one hand, Croson requires that an MBE program be “narrowly tailored” to remedy current evidence of discrimination.
95 Thus, goals must be set according to the evidence of disparity found.
For example, if there is a current disparity between the percentage of an entity’s utilization of Hispanic construction contractors and the availability of Hispanic construction contractors in that entity’s marketplace, then that entity can set a goal to bridge that disparity.
It is not mandatory to examine a long history of an entity’s utilization to assess current evidence of discrimination. In fact, Croson indicates that it may be legally fatal to justify an MBE program based upon outdated evidence.
96 Therefore, the most recent two or three years of an entity’s utilization data would suffice to determine whether a statistical disparity exists between current M/WBE utilization and availability.
97 Pre-program data regarding an entity’s utilization of MBEs prior to enacting the MBE program may be relevant to assessing the need for the agency to keep such a program intact. A 1992 unpublished opinion by Judge Henderson of the U.S. District Court for the Northern District of
92 Concrete Works of Colorado v. City and County of Denver, 823 F.Supp. 821, 835-836 (D.Colo. 1993); rev’d on other grounds, 36 F.3d 1513 (10th Cir. 1994); 86 F. Supp. 2d 1042 (D. Colo. 2000) (Concrete Works III).
93 Cone Corporation V. Hillsborough County, 908 F.2d 908 (11th Cir. 1990); Associated General Contractors v. Coalition for Economic Equity, 950 F.2d 1401 (9th Cir. 1991).
94 There is a related question of which firms can participate in a remedial program. In Coral Construction, the Court held that the definition of “minority business” used in King County’s MBE program was over-inclusive. The Court reasoned that the definition was overbroad because it included businesses other than those who were discriminated against in the Kin g County business community. The program would have allowed, for instance, participation by MBEs who had no prior contact with the County. Hence, location within the geographic area is not enough. An MBE had to have shown that it previously sought business, or is currently doing business, in the market area.
95 See Croson, 488 U.S. at 509-10.
96 See Croson, 488 U.S. at 499 (stating that “[i]t is sheer speculation how many minority firms there would be in Richmond absent past societal discrimination”).
97 See Associated General Contractors of California v. Coalition for Economic Equity and City and County of San Francisco, 950 F .2d 1401 (9th Cir. 1991) (AGCC II). (Consultant study looked at City’s MBE utilization over a one-year period).
16 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
California, RGW Construction v. San Francisco Bay Area Rapid Transit District (BART), 98 set forth the possible significance of statistical data during an entity’s “pre -program” years. Judge Henderson opined that statistics that provide data for a period when no M/WBE goals were operative are often the most relevant data in evaluating the need for remedial action by an entity.
Indeed, “to the extent that the most recent data reflect the impact of operative DBE goals, then such data are not necessarily a reliable basis for concluding that remed ial action is no longer warranted.”
99 Judge Henderson noted that this is particularly so given the fact that M/WBEs report that they are seldom or never used by a majority prime contractor without M/WBE goals, which suggests a possibly fruitful line of inquiry—an examination of whether differ ent programmatic approaches in the same market area led to different outcomes in M/WBE participation. The Tenth Circuit came to the same conclusion in Concrete Works II: It is permissible for a study to examine programs where there were no goals.
Similarly, the Eleventh Circuit in Dade County II cautions that using post -enactment evidence (post-program data) may mask discrimination that might otherwise be occurring in the relevant market. Still, the court agreed with the district court that it was not enough to speculate on what MBE utilization w ould have been in the absence of the program. 100 Thus, an entity should look both at pre -program and post -program data in assessing whether discrimination exists currently and analyze whether it would exist in the absence of an M/WBE program.
3. Statistical Evidence
To determine whether statistical evidence is adequate to infer discrimination, courts have looked to the “disparity index,” which consists of the percentage of minority or women contractor participation in local contracts divided by the percentage of minority or women contractor availability or composition in the population of available firms in the local market area. 101
Disparity indexes have been found highly probative evidence of discrimination where they ensure that the “relevant statistical pool” of minority or women contractors is being considered.
In Philadelphia, the Third Circuit Court of Appeals ruled that the “relevant statistical pool” includes those businesses that not only exist in the marketplace but that are qualified and interested in performing the public agency’s work. In that case, the Third Circuit r ejected a statistical
98 See November 25, 1992, Order by Judge Thelton Henderson (on file with Mason Tillman Associates).
99 Id.
100 Dade County II, at 912.
101 Although the disparity index is a common category of statistical evidence considered, other types of statistical evidence have been taken into account. In addition to looking at Dade County’s contracting and subcontracting statistics, the district court also considered marketplace data statistics (which looked at the relationship between the race, ethnicity, and gender of surveyed firm owners and the reported sales and receipts of those firms), the County’s Wainwright study (which compared construction business ownership rates of M/WBEs to those of non-M/WBEs and analyzed disparities in personal income between M/WBE and non-M/WBE business owners), and the County’s Brimmer Study (which focused only on Black -owned construction firms and looked at whether di sparities existed when the sales and receipts of Black -owned construction firms in Dade County were compared with the sales and receipts of all Dade County construction firms).
The court affirmed the judgment that declared appellant's affirmative action plan for awarding county construction contracts unconstitutional and enjoined the plan's operation because there was no statistical evidence of past discrimination and appellant failed to consider race and ethic-neutral alternatives to the plan.
17 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
disparity finding in which the pool of minority businesses used in comparing utilization to availability were those that were merely licensed to operate in the City of Philadelphia. Merely being licensed to do business with the City does not indicate either a willingness or capability to do work for the City. As such, the court concluded this statistical disparity did not satisfy Croson.102
Statistical evidence demonstrating a disparity between the utilization and availability of M/WBEs can be shown in more than one way. First, the number of M/WBEs utilized by an entity can be compared to the number of available M/WBEs. This is a strict Croson “disparity” formula. A significant statistical disparity between the number of MBEs that an entity utilizes in a given product/service category and the number of available MBEs in the relevant market area specializing in the specified product/service category would infer discriminatory exclusion.
Second, M/WBE dollar participation can be compared to M/WBE availability. This comparison could show a disparity between the award of contracts by an entity in the relevant locality/market area to available majority contractors and the award of contracts to M/WBEs. Thus, in AGCC II, an independent consultant’s study compared the number of available MBE prime contractors in the construction industry in San Francisco with the amount of contract dollars awarded to San Francisco-based MBEs over a one-year period. The study found that available MBEs received far fewer construction contract dollars in proportion to their numbers than their available non-minority counterparts.103
Whether a
disparity index supports an inference that there is discrimination in the market depends not only on what is being compared, but also on whether any disparity is statistically significant.
In Croson, Justice O’Connor opined, “[w]here the gross statistical disparities can be shown, they alone, in a proper case, may constitute a prima facie proof of a pattern or practice of discrimination.”104
However, the Court has not assessed nor attempted to cast bright lines for determining if a disparity index is enough to support an inference of discrimination. Rather, the analysis of the disparity index and the finding of its significance are judged on a case-by-case basis.105 Following the dictates of Croson, courts may carefully examine whether there are data that show that MBEs are ready, willing, and able to perform. 106 Concrete Works I made the same point:
Capacity—i.e., whether the firm is “able to perform”—is a ripe issue when a disparity study is 102 Philadelphia VI, 91 F.3d 586, 586. The courts have not spoken to the non-M/WBE component of the disparity index. However, if only as a matter of logic, the “availability” of non -M/WBEs requires that their willingness to be government contractors be established. The same measures used to establish the interest of M/WBEs should be applied to non-M/WBEs. 103 AGCC II, 950 F.2d 1401 at 1414. Specifically, the study found that MBE availability was 49.5 percent for prime construction, but MBE dollar participation was only 11.1 percent; that MBE availability was 36 percent prime equipment and supplies, but MBE dollar part icipation was 17 percent; and that MBE availability for prime general services was 49 percent, but dollar participation was 6.2 percent. 104 Croson, 488 U.S. at 501 (quoting Hazelwood School District v. United States , 433 U.S. 299, 307-308 (1977)). 105 Concrete Works, 36 F.3d at 1522.
106 The P hiladelphia study was vulnerable on this issue. 18 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Capacity—i.e., whether the firm is “able to perform”—is a ripe issue when a disparity study is examined on the merits:
[P
laintiff] has identified a legitimate factual dispute about the accuracy of Denver’s data and questioned whether Denver’s reliance on the percentage of MBEs and WBEs available in the marketplace overstates “the ability of MBEs or WBEs to conduct business relative to the industry as a whole because M/WBEs tend to be smaller and less experienced than non -minority owned firms.” In other words, a disparity index calculated on the basis of the absolute number of MBEs in the local market may show greater underutilization than does data that takes into consideration the size of MBEs and WBEs.
107
N
otwithstanding that appellate concern, the disparity studies before the district court on remand did not examine the issue of M/WBE capacity to perform Denver’s public -sector contracts. As mentioned above, they were focused on the private sector, using ce nsus-based data and Dun & Bradstreet statistical extrapolations.
T
he Sixth Circuit Court of Appeals in Drabik concluded that for statistical evidence to meet the legal standard of Croson, it must consider the issue of capacity. 108 The State’s factual predicate study based its statistical evidence on the percentage of M/WBE businesses in the population.
T
he statistical evidence did not consider the number of minority businesses that were construction firms, let alone how many were qualified, willing, and able to perform state contracts.109 The court reasoned as follows:
E
ven statistical comparisons that might be apparently more pertinent, such as with the percentage of all firms qualified in some minimal sense, to perform the work in question, would also fail to satisfy the Court’s criteria. If MBEs comprise 10% of the total number of contracting firms in the State, but only get 3% of the dollar value of certain contracts that does not alone show discrimination, or even disparity. It does not account for the relative size of the firms, either in terms of their ability to do particular work or in terms of the number of tasks they have resources to complete. 110
F
urther, Drabik also pointed out that the State not only relied upon the wrong type of statistical data, but that the data was more than twenty years old. 107 C oncrete Works , 36 F.3d at 1528.
108 S ee Contractors of Ohio v. Drabik, 214 F.3d 730 (6th Cir. 2000). The Court reviewed Ohio’s 1980, pre -Croson, program, which the Sixth Circuit found constitutional in Ohio Contractors Ass’n v. Keip , 1983 U.S. App. LEXIS 24185 (6th Cir. 1983), finding the program unconstitutional under Croson.
109 D rabik , 214 F.3d at 730.
110 D rabik , 214 F.3d at 736.
19 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
The appellate opinions in Philadelphia 111 and Dade County112 regarding disparity studies involving public sector contracting are particularly instructive in defining availability. First, in Philadelphia, the earlier of the two decisions, contractors’ associations challenged a city ordinance that created set -asides for minority subcontractors on city public works contracts. Summary judgment was granted for the contractors.
113 The Third Circuit upheld the third appeal, affirming that there was no firm basis in evidence for finding that race-based discrimination existed to justify a race-based program and that the program was not narrowly tailored to address past discrimination by the City.114
The Third Circuit reviewed the evidence of discrimination in prime contracting and stated that whether it is strong enough to infer discrimination is a “close call” which the court “chose not to make.”
115 It was unnecessary to make this determination because the court found that even if there was a strong basis in evidence for the program, a subcontracting program was not narrowly tailored to remedy prime contracting discrimination.
When the court looked at subcontracting, it found that a firm basis in evidence did not exist. The only subcontracting evidence presented was a review of a random 25 to 30 percent of project engineer logs on projects more than $30,000. The consultant determined that no MBEs were used during the study period based on recollections regarding whether the owners of the utilized firms were MBEs. The court found this evidence insufficient as a basis for finding that prime contractors in the market were discriminating against subcontractors. 116
The Third Circuit has recognized that consideration of qualifications can be approached at different levels of specificity, and the practicality of the approach also should be weighed. The Court of Appeals found that “[i]t would be highly impractical to review the hundreds of contracts awarded each year and compare them to each and every MBE” and that it was a “reasonable choice” under the circumstances to use a list of certified contractors as a source for available firms. 117 Although,
theoretically, it may have been possible to adopt a more refined approach, the court found that using the list of certified contractors was a rational approach to identifying qualified firms.
Furthermore, the court discussed whether bidding was required in prime construction contracts as the measure of “willingness” and stated, “[p]ast discrimination in a marketplace may provide reason to believe the minorities who would otherwise be willing ar e discouraged from trying to secure work.”118
111 Philadelphia IV, 6 F.3d 990 (3rd Cir. 1993), on remand, 893 F. Supp. 419 (E.D. Penn. 1995), aff’d, 91 F.3d 586 (3rd Cir. 1996).
112 Dade County, 122 F.3rd. 895 (11th Cir, 1997).
113 Philadelphia, 91 F.3d at 586.
114 Id. at 586.
115 Id. at 605.
116 Another problem with the program was that the 15 percent goal was not based on data indicating that minority businesses in the market area were available to perform 15 percent of the City’s contracts. The court noted, however, that “we do not suggest tha t the percentage of the preferred group in the universe of qualified contractors is necessarily the ceiling for all set-asides.” The court also found the program flawed because it did not provide sufficient waivers and exemptions, as well as consideration of race-neutral alternatives.
117 Philadelphia, 91 F.3d at 603.
118 Id.
20 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
In addition, the court found that a program certifying MBEs for federal construction projects was a satisfactory measure of capability of MBE firms.
119 In order to qualify for certification, the
federal certification program required firms to detail their bonding capacity, size of prior contracts, number of employees, financial integrity, and equipment owned. According to the court, “the process by which the firms were certified [suggests that] those firms were both qualified and willing to participate in public work projects.”
120 The court found certification to be an adequate
process of identifying capable firms, recognizing that the process may even understate the availability of MBE firms. 121 Therefore, the court was somewhat flexible in evaluating the appropriate method of determining the availability of MBE firms in the statistical analysis of a disparity.
In Dade County, the District Court held that the County had not shown the compelling interest required to institute a race-conscious program, because the statistically significant disparities upon which the County relied disappeared when the size of the M/WBEs was considered. 122 The Dade
County district court accepted the disparity study’s limiting of “available” prime construction contractors to those that had bid at least once in the study period. However, it must be noted that relying solely on bidders to identify available firms may have lim itations. If the solicitation of bidders is biased, then the results of the bidding process will be biased. 123 In addition, a
comprehensive count of bidders is dependent on the adequacy of the agency’s record keeping.124
The appellate court in Dade County did not determine whether the County presented sufficient evidence to justify the M/WBE program. It merely ascertained that the lower court was not clearly erroneous in concluding that the County lacked a strong basis in evidence to justify race-conscious affirmative action. The appellate court did not prescribe the district court’s analysis or any other specific analysis for future cases.
C. Anecdotal Evidence
In Croson, Justice O’Connor opined that “evidence of a pattern of individual discriminatory acts can, if supported by appropriate statistical proof, lend support to a local government’s determination that broader remedial relief is justified.” 125 Anecdotal evidence should be gathered
to determine if minority contractors are systematically being excluded from contracting
119 Id.
120 Id.
121 Id.
122 Engineering Contractors Association of South Florida, Inc. et al. v. Metropolitan Dade County, 943 F. Supp. 1546 (S.D. Florida 1996).
123 Cf. League of United Latin American Citizens v. Santa Ana, 410 F.Supp. 873, 897 (C.D. Cal. 1976); Reynolds v. Sheet Metal Workers, Local 102, 498 F.Supp 952, 964 n. 12 (D. D.C. 1980), aff’d, 702 F.2d 221 (D.C. Cir. 1981) (Involving the analysis of available applica nts in the employment context).
124 Cf. EEOC v. American Nat’l Bank, 652 F.2d 1176, 1196-1197 (4th Cir.), cert. denied, 459 U.S. 923 (1981) (In the employment context, actual applicant flow data may be rejected where race coding is speculative or nonexistent).
125 Croson, 488 U.S. at 509. The Court specifically cited to Teamsters, 431 U.S. at 338.
21 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
opportunities in the relevant market area. Remedial measures fall along a sliding scale determined by their intrusiveness on non- targeted groups. At one end of the spectrum are race -neutral measures and policies, such as outreach to the M/WBE community, wh ich are accessible to all segments of the business community, regardless of race. They are not intrusive and, in fact, require no evidence of discrimination before implementation. Conversely, race-conscious measures, such as set-asides, fall at the other end of the spectrum and require a larger amount of evidence. 126
As discussed below, anecdotal evidence alone will not suffice to establish the requisite predicate for a race -conscious program. Its great value lies in pointing to remedies that are “narrowly tailored,” which is the second prong of a Croson study.
The following types of anecdotal evidence have been presented and relied upon by the Ninth Circuit, in both Coral Construction and AGCC II, to justify the existence of an M/WBE program:
• M/WBEs denied contracts despite being the low bidders—Philadelphia 127
• Prime contractors showing MBE bids to non- minority subcontractors to find a non- minority firm to underbid the MBEs—Cone Corporation v. Hillsborough County128 • M/WBEs’ inability to obtain contracts for private sector work—Coral Construction129 • M/WBEs told that they were not qualified, although they were later found to be qualified when evaluated by outside parties—AGCC130
• Attempts to circumvent M/WBE project goals—Concrete Works I131 • Harassment of M/WBEs by an entity's personnel to discourage them from bidding on an entity's contracts—AGCC132
Courts must assess the extent to which relief measures disrupt settled “rights and expectations” when determining the appropriate corrective measures.
133 Presumably, courts would look more
favorably upon anecdotal evidence, which supports a less intrusive program than a more intrusive one. For example, if anecdotal accounts related experiences of discrimination in obtaining bonds, they may be sufficient evidence to support a bonding program that assists M/WBEs. However,
126 Cf. AGCC II, 950 F.2D at 1417-18 (In finding that an ordinance providing for bid preferences was narrowly tailored, the Ninth Circuit stated that the program encompassed the required flexibility and stated that “the burdens of the bid preferences on those not entitled to them appear relatively light and well distributed. In addition, in contrast to remedial measures struck down in other cases, those biddin g have no settled expectation of receiving a contract. [Citations omitted.]”).
127 Philadelphia, 6 F.3d at 1002.
128 Cone Corporation v. Hillsborough County, 908 F.2d at 916 (11th Cir.1990).
129 For instance, where a small percentage of an MBE or WBE’s business comes from private contracts and most of its business comes from race or gender-based set-asides, this would demonstrate exclusion in the private industry. Coral Construction , 941 F.2d 910 at 933 (WBE’s affidavit indicated that less than seven percent of the firm’s business came from private contracts and that most of its business resulted from gender-based set-asides).
130 AGCC II, 950 F.2d at 1415.
131 Concrete Works, 36 F.3d at 1530.
132 AGCC II, 950 F.2d at 1415.
133 Wygant, 476 U.S. at 283.
22 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
these accounts would not be evidence of a statistical availability that would justify a racially limited program such as a set-aside.
As noted above, in Croson, the Supreme Court found that the City of Richmond’s MBE program was unconstitutional, because the City lacked proof that race -conscious remedies were justified.
However, the Court opined that “evidence of a pattern of individual discriminatory acts can, if supported by appropriate statistical proof, lend support to a local government’s determination that broader remedial relief is justified.”
134
In part, it was the absence of such evidence that proved lethal to the program. The Supreme Court stated that “[t]here was no direct evidence of race discrimination on the part of the City in letting contracts or any evidence that the City’s prime contractors had discriminated against minority - owned subcontractors.”
135
This was not the situation confronting the Ninth Circuit in Coral Construction. There, the 700- plus page appellate records contained the affidavits of “at least 57 minorities or women contractors, each of whom complain, in varying degrees of specificity, about discrimination within the local construction industry. These affidavits certainly suggest that ongoing discrimination may be occurring in much of the King County business community.” 136
Nonetheless, this anecdotal evidence, standing alone, was insufficient to justify King County’s MBE program since “[n]otably absent from the record, however, is any statistical data in support of the County’s MBE program.”
137 After noting the Supreme Court’s reliance on statistical data in Title VII employment discrimination cases and cautioning that statistical data must be carefully used, the Court elaborated on its mistrust of pure anecdotal evidence:
Unlike the cases resting exclusively upon statistical deviations to prove an equal protection violation, the record here contains a plethora of anecdotal evidence.
However, anecdotal evidence, standing alone, suffers the same flaws as statistical evidence. Indeed, anecdotal evidence may even be less probative than statistical evidence in the context of proving discriminatory patterns or practices. 138
The Court concluded its discourse on the potency of anecdotal evidence in the absence of a statistical showing of disparity by observing that “rarely, if ever, can such evidence show a systemic pattern of discrimination necessary for the adoption of an affirmative action plan.” 139
134 Croson, 488 U.S. at 509, citing Teamsters, 431 U.S. at 338.
135 Croson, 488 U.S. at 480.
136 Coral Construction, 941 F.2d at 917-18.
137 Coral Construction, 941 F.2d at 918 (emphasis added) (additional statistical evidence gathered after the program had been implemented was also considered by the court and the case was remanded to the lower court for an examination of the factual predicate).
138 Coral Construction, 941 F.2d at 919.
139 Id.
23 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Two other circuit courts also suggested that anecdotal evidence might be dispositive, while rejecting it in the specific case before them. For example, in Contractors Ass’n the Third Circuit Court of Appeals noted that the Philadelphia City Council had “received testimony from at least fourteen minority contractors who recounted personal experiences with racial discrimination,” which the district court had “discounted” because it deemed this evidence to be “impermissible” for consideration under Croson.
140 The circuit court disapproved of the district court’s actions because, in its view, the court’s rejection of this evidence betrayed the court’s role in disposing of a motion for summary judgment.141 The circuit court stated:
Yet, [g]iven Croson’s emphasis on statistical evidence, even had the district court credited the City’s anecdotal evidence, we do not believe this amount of anecdotal evidence is sufficient to satisfy strict scrutiny [quoting Coral , supra]. Although anecdotal evidence alone may, in an exceptional case, be so dominant or pervasive that it passes muster under Croson, it is insufficient here. 142
The District of Columbia Circuit Court echoed the Ninth Circuit’s acknowledgment of the rare case in which anecdotal evidence is singularly potent in O’Donnell Construction v. District of Columbia.
143 The court found that, in the face of conflicting statistical evidence, the anecdotal evidence there was not sufficient:
It is true that in addition to statistical information, the Committee received testimony from several witnesses attesting to problems they faced as minority contractors. Much of the testimony related to bonding requirements and other structural impediments any firm would have to overcome, no matter what the race of its owners. The more specific testimony about discrimination by white firms could not in itself support an industry- wide remedy [quoting Coral ]. Anecdotal evidence is most useful as a supplement to strong statistical evidence —which the Council did not produce in this case.
144
The Eleventh Circuit is also in accord. In applying the “clearly erroneous” standard to its review of the district court’s decision in Dade County , it commented that “[t]he picture painted by the anecdotal evidence is not a good one.”
145 However, it held that this was not the “exceptional case” where, unreinforced by statistics, the anecdotal evidence was enough.146
140 Philadelphia, 6 F.3d at 1002.
141 Id. at 1003.
142 Philadelphia, 6 F.3d at 1003.
143 963 F.2d at 427 (D.C. Cir.1992).
144 Id.
145 Engineering Contractors Ass’n of South Florida v. Metropolitan Dade County, 943 F. Supp 1546 (S.D. Fla. 1996), aff’d, 122 F.3d 895 (11th Cir. 1997).
146 Engineering Contractors Ass’n of South Florida v. Metropolitan Dade County, 943 F.Supp. at 926.
24 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
In Concrete Works I, the Tenth Circuit Court of Appeals described the type of anecdotal evidence that is most compelling evidence within a statistical context. In approving of the anecdotal evidence marshaled by the City of Denver in the proceedings below, the court recognized that
[w]hile a fact finder should accord less weight to personal accounts of discrimination that reflect isolated incidents, anecdotal evidence of a municipality’s institutional practices carries more weight due to the systemic impact that such institutional practices have on market conditions.
147
The court noted that the City had provided such systemic evidence.
The Ninth Circuit Court of Appeals has articulated what it deems to be permissible anecdotal evidence in AGCC II .
148 There, the court approved a “vast number of individual accounts of discrimination,” which included numerous reports of MBEs denied contracts despite being the low bidder; MBEs told they were not qualified, although they were later found qualified when evaluated by outside parties; MBEs refused work even after they were awarded the contracts as low bidder; and MBEs being harassed by city personnel to discourage them from bidding on city contracts. On appeal, the City points to numerous individual accounts of discrimination to substantiate its findings that discrimination exists in the City’s procurement processes; an “old boy’s network” still exists; and racial discrimination is still prevalent within the San Francisco construction industry. 149
Taken together, these statements constitute a taxonomy of appropriate anecdotal evidence. The cases suggest that, to be optimally persuasive, anecdotal evidence must satisfy six requirements. 150
These requirements are that the accounts:
147 Concrete Works I, 36 F.3d at 1530.
148 AGCC II, 950 F.2d at 1401.
149 AGCC II, 950 F.2d at 1415.
150 Philadelphia, 6 F.3d at 1003. The anecdotal evidence must be “dominant or pervasive.”
25 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
• Are gathered from minority contractors, preferably those that are “qualified.”151 • Concern specific, verifiable instances of discrimination.152 • Involve the actions of governmental officials.153
• Involve events within the relevant jurisdiction’s market area.154 • Discuss the harm that the improper conduct has inflicted on the businesses in question.155 • Collectively reveal that discriminatory exclusion and impaired contracting opportunities are systemic rather than isolated or sporadic.156
Given that neither Croson nor its progeny identify the circumstances under which anecdotal evidence alone will carry the day, it is not surprising that none of these cases explicate bright line rules specifying the quantity of anecdotal evidence needed to support a race -conscious remedy.
However, the foregoing cases and others provide some guidance by implication.
Philadelphia makes clear that 14 anecdotal accounts will not suffice. 157 While the matter is not
free of countervailing considerations, 57 accounts, many of which appeared to be of the type referenced above, were insufficient to justify the program in Coral Construction. The number of anecdotal accounts relied upon by the district court in approving Denver’s M/WBE program in Concrete Works I is unclear but, by one count, the number might have exceeded 139. 158 It is, of
course, a matter of speculation as to how many of these accounts were indispensable to the court’s approval of the Denver M/WBE program.
V. Consideration of Race-Neutral Options
A remedial program must address the source of the disadvantage faced by minority businesses. If it is found that race discrimination places MBEs at a competitive disadvantage, an MBE program may seek to counteract the situation by providing MBEs with a counterbalancing advantage. 159 On
151 Philadelphia, 91 F.3d at 603.
152 Coral Construction, 941 F.2d at 917 -18. But see Concrete Works II, 321 F.3d at 989. “There is no merit to [plaintiff’s] argument that the witnesses’ accounts must be verified to provide support for Denver’s burden.”
153 Croson, 488 U.S. at 509.
154 Coral Construction, 941 F.2d at 925.
155 O’Donnell, 963 F.2d at 427.
156 Coral Construction, 941 F.2d at 919.
157 Philadelphia, 6 F.3d. at 1002-03.
158 The Denver City Council enacted its M/WBE ordinance in 1990. The program was based on the results of public hearings held in 1983 and 1988 at which numerous people testified (approximately 21 people and at least 49 people, respectively), and on a disparity study performed in 1990. See Concrete Works of Colorado v. Denver, 823 F.Supp. 821, 833-34. The disparity study consultant examined all these preexisting data, presumably including the anecdotal accounts from the 1983 and 1988 public hearings, as well as the results of its own 69 interviews, in preparing its recommendat ions. Id. at 833-34. Thus, short of analyzing the record in the case, it is not possible to determine a minimum number of accounts because it is not possible to ascertain the number of consultant interviews and anecdotal accounts that ar e recycled statements or statements from the same people. Assuming no overlap in accounts, however, and also assuming that the disparity study relied on prior interviews in addition to its own, the number of M/WBEs interviewed in this case could be as high as 139, and, depen ding on the number of new people heard by the Denver Department of Public Works in March 1988 ( see id. at 833), the number might have been even greater.
159 AGCC II, 950 F.2d at 1404.
26 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
the other hand, an MBE program cannot stand if the sole barrier to minority or woman -owned business participation is a barrier that is faced by all new businesses, regardless of ownership. 160 If the evidence demonstrates that the sole barrier to M/WBE participation is that M/WBEs disproportionately lack capital or cannot meet bonding requirements, then only a race -neutral program of financing for all small firms would be justified. 161 In other words, if the barriers to minority participation are race -neutral, then the program must be race -neutral or contain race- neutral aspects.
The requirement that race- neutral measures be considered does not mean that they must be exhausted before race-conscious remedies can be employed. The district court recently wrote in Hershell Gill Consulting Engineers, Inc. v. Miami-Dade County:
The Supreme Court has recently explained that although “narrow tailoring does not require exhaustion of every conceivable race -neutral alternative” it “does require serious, good faith consideration of workable race -neutral alternatives that will achieve… diversity[.]” Gratz, 123 S.Ct, at 2344, 2345. The County has failed to show the necessity for the relief it has chosen, and the efficacy of alternative remedies has not been sufficiently explored.
162
If the barriers appear race- related but are not systemic, then the remedy should be aimed at the specific arena in which exclusion or disparate impact has been found. If the evidence shows that, in addition to capital and bonding requirements, which are ra ce-neutral, MBEs also face race discrimination in the awarding of contracts, then a race -conscious program will stand, as long as it also includes race-neutral measures to address the capital and bonding barriers. 163
The Ninth Circuit Court of Appeals in Coral Construction ruled that there is no requirement that an entity exhaust every possible race-neutral alternative.164 Instead, an entity must make a serious, good faith consideration of race-neutral measures in enacting an MBE program. Thus, in assessing MBE utilization, it is imperative to examine barriers to MBE participation that go beyond “small business problems.” T he impact on the distribution of contracts programs that have been implemented to improve MBE utilization should also be measured.165
160 Croson, 488 U.S. at 508.
161 Id. at 507.
162 Hershell Gill, 333 F.Supp. 2d 1305, 1330 (S.D.Fla. 2004) (quoting Gratz v. Bollinger, 123 S. Ct 2411 (2003)); Grutter v. Bollinger, 539 U.S. 306 (2003).
163 Hershell Gill, 333 F.Supp. 2d at 1330 (upholding MBE program where it operated in conjunction with race-neutral measures aimed at assisting all small businesses).
164 Coral Construction Co. v. King County, 941 F.2d 910 (9th Cir. 1991).
165 Dade County, 122 F.3d at 927. At the same time, the Eleventh Circuit’s caveat in Dade County should be kept in mind: “Supreme Court decisions teach that a race-conscious remedy is not merely one of many equally acceptable medications that a government may use to treat race-based problems. Instead, it is the strongest of medicines, with many potentially harmful side-effects, and must be reserved to those severe cases that are highly resistant to conventional treatment.” For additional guidance, see supra the discussion of narrow tailoring in Concrete Works, Adarand, County of Cook, and City of Chicago.
27 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
VI. United States Court of Appeals for the Ninth Circuit
The United States Court of Appeals for the Ninth Circuit defines the legal standards applied to public agencies implementing race -conscious affirmative action programs. Although the Ninth Circuit cases that adjudicate this issue apply to federally funded Disadvantaged Business Enterprise (DBE) programs, the Ninth Circuit’s analysis is instructive on the methodology that will be accepted as the legal predicate for race-conscious programs in the jurisdiction.
There have since been several challenges to the DBE regulations. A major decision was adjudicated in the Ninth Circuit, and the decision acts as binding precedent for the City, particularly as it relates to federally funded grants. The relevant decisions are discussed herein.
A. Analysis of the Ninth Circuit Challenges
The landmark Ninth Circuit cases challenging the constitutionality of race -based elements of a DBE program, Western States Paving Co. v. Washington State Department of Transportation, 166
and Associated General Contractors of America, San Diego Chapter, Inc. v. California Department of Transportation (AGC) are discussed below.
1. Western States
Western States, decided in 2005, subjected the State of Washington’s Department of Transportation DBE Program to a two- pronged analysis. One aspect of the analysis determined whether the USDOT DBE legislation was constitutional, and the other assessed whether the State of Washington’s application of the DBE regulations was valid.
a. Facial Constitutional Challenge
In Western States, the plaintiff sought a declaratory judgment, arguing that the 1998 Transportation Equity Act for the 21
st Century’s (TEA -21) preference program was in violation of the equal protection provision under the Fifth and Fourteenth Amendments of the U.S. Constitution. As applied by the State of Washington, the TEA-21 DBE Program was claimed to be unconstitutional.
In addressing Western States’ facial challenge, the Court interpreted the issue as to whether the United States met its burden of demonstrating that the federal statute and regulations satisfied the strict scrutiny’s exacting requirements.
According to Croson, the federal government has a compelling interest in ensuring that its funding is not distributed in a manner that perpetuates the effects of either public or private discrimination within the transportation contracting industry.
167 Thus, the Court evaluated the evidence that
Congress considered in enacting the DBE statute to ensure it had a “strong basis in evidence for its conclusion that remedial action was necessary.”168 The Court concluded that a substantial body
166 Western States Paving Co., v. Washington State Department of Transportation, 407 F.3d 983 (9th Cir. 2005).
167 Croson, 488 U.S. 469, 492 (1982).
168 Id. at 493.
28 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
of statistical and anecdotal evidence was considered by Congress at the time the law was enacted.
Therefore, the Court found that Congress had a strong basis in evidence for concluding that, at least in some parts of the country, there was discrimination w ithin the transportation contracting industry that hindered minorities’ ability to compete for federally funded contracts. 169
Next, the Court considered whether the DBE regulation’s racial classification was narrowly tailored as represented in the State of Washington’s DBE goals. Citing Croson, Western States decided that a minority preference program must establish utilization goals that bear a close relationship to minority firms’ availability in a particular market in order to be narrowly tailored. 170
The Court referenced Sherbrooke Turf Inc. v. Minnesota Department of Transportation, noting the Eighth Circuit holding that the DBE programs of the Minnesota and Nebraska Departments of Transportation independently satisfied the strict scrutiny’s narrow tailoring requirement by relying on two disparity studies.
171
The Minnesota Department of Transportation (MnDOT) offered statistical evidence of the highway contracting market in Minnesota. Following the goal setting methodology set forth in 49 CFR Section 26.45(c), MnDOT formulated a factual predicate that illustrated the DBE availability in MnDOT’s relevant market area. Findings from the statistical analysis of business formation statistics were used to adjust the base figure upward based on the rationale that the number of participating minority-owned businesses would be higher in a race-neutral market.
MnDOT implemented good faith efforts to encourage prime contractors to meet the DBE goal.
The availability of DBEs and the extent of subcontracting opportunities for each project were considered when setting the race -conscious portion of the overall DBE go al. The Eighth Circuit court agreed with the district court that MnDOT’s revised DBE Program served a compelling government interest and was narrowly tailored on its face and as applied in Minnesota. Similarly, the Nebraska Department of Transportation (NDOT) also set an overall DBE goal pursuant to the DBE regulations for the Nebraska highway construction market. Like Minnesota, the Eighth Circuit found that NDOT’s DBE Program was narrowly tailored. The Court notes that the DBE regulations did not establis h a mandatory nationwide minority utilization goal in transportation contracting. The Court found that the ten percent DBE utilization goal in the regulation was only “aspirational” and that the regulation provides that each state must establish a DBE utilization goal based on the proportion of ready, willing, and able DBEs in its transportation contracting industry.
172 Because the regulations require each state to set minority utilization goals that reflect the contractor availability in its own labor market, the Court found the DBE regulations to be narrowly tailored to remedy the effects of race- and sex -based discrim ination within the transportation contracting industry. The Court ultimately held that it was satisfied that TEA -21’s DBE program was narrowly tailored to remedy the effects of race- and sex-based discrimination
169 Western States Paving Co., v. Washington State Department of Transportation, 407 F.3d at 983 (9th Cir. 2005).
170 Western States, 407 F.3d at 983.
171 See generally Gross Seed Co. v. Nebraska Department of Roads, et. al. , 345 F.3d 964 (8th Cir. 2003); Sherbrook Turf Inc. v. Minnesota Department of Transportation, 345 F.3d 964 (8th Cir. 2003).
172 Western States, 407 F.3d at 983.
29 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
within the transportation contracting industry, and thus Western States’ facial challenge failed.
b. Application of the Narrowly Tailored Standard in Overall Goal Setting
The second prong of the Court’s analysis considered whether the utilization goals established by the State of Washington “as applied” were unconstitutional, because there is no evidence of discrimination within the State’s transportation industry. The State contended that its implementation of the DBE Program was constitutional, because it comported with the federal statute and regulations. The State also proffered that since the proportion of DBEs in the state was
11.17 percent and the percentage of contra cting funds awarded to them on race -neutral contracts was only nine percent, discrimination was demonstrated. 173 The Court disagreed with the rationale.
It found that this oversimplified statistical evidence is entitled to little weight, because it does not account for factors that may affect the relative capacity of DBEs to undertake contracting work.
The Ninth Circuit opined that the only other circuit to consider an applied challenge to the federal DBE program was the Eight h Circuit in Sherbrook. In discussing the Eighth Circuit’s opinion in Sherbrook, the Ninth Circuit reasoned that both Minnesota and Nebraska had hired outside consulting firms to conduct statistical analyses of the availability and capacity of DBEs in their local market. Accordingly, Western States concluded that the Eighth Circuit had relied on the statistical evidence in the studies to hold that the State’s DBE program was narrowly tailored and satisfied strict scrutiny.
Citing Croson, the Court opined that recipients of federal funds could not use race -conscious methods to meet their DBE goals without a finding of discrimination. The Ninth Circuit also concluded that, in order to satisfy the narrowly tailored requirement, even when discrimination is present, the State may only implement a remedial race- conscious program, including those minority groups that have suffered discrimination. The Ninth Circuit found insufficient evidence, suggesting that minorities c urrently or previously suffered discrimination in the Washington transportation contracting industry. Further, the Court found that the State of Washington failed to provide evidence of discrimination within its own contracting market and thus failed to me et its burden of demonstrating that its DBE program was narrowly tailored to further Congress’s compelling remedial interest.
174
The Court concluded that the District Court erred when it upheld the State’s DBE program simply because the State complied with the federal program’s requirement. Washington’s DBE program was categorized as an “unconstitutional windfall to minority contractors solely on the basis of their race or sex.”
In sum, Western States found that Washington’s DBE program met the first prong of the test and was held facially constitutional, but it did not pass the second prong because the State’s application of the DBE regulations was not narrowly tailored to a finding of statistically si gnificant underutilization of the respective minority groups. Therefore, the State’s application of the DBE
173 Western States Paving Co., v. Washington State Department of Transportation, 407 F.3d at 983 (9th Cir. 2005).
174 Western States, 407 F.3d at 983.
30 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
regulations was deemed unconstitutional.
c. Evidentiary Requirements for Overall Goal Setting
In response to Western States , the USDOT issued a Memorandum in 2005, recommending a disparity study that adheres to the evidentiary standards set forth in Croson as the appropriate method for USDOT recipients in the Ninth Circuit to formulate narrowly tailored DBE goals.175
2. Associated General Contractors
Associated General Contractors of America, San Diego Chapter, Inc. v. California Department of Transportation (AGC) , filed in 2011 in the District Court, cited civil rights violations in the application of California Department of Transportation’s (Caltrans) 2009 DBE Program. 176 AGC
charged that the Equal Protection Clause, federal DBE program regulations, and the U.S.
Constitution generally require that Caltrans’ DBE Program be predicated on evidence showing intentional discrimination. AGC argued that the remedial scheme regarding various groups based on Caltrans’ statistical evidence violates the nondiscrimination mandate of Title VI of the 1964 Civil Rights Act. Additionally, AGC argued that Caltrans, as a federal grantee, did not demonstrate that it would lose its federal funds if it did not implement the 2009 DBE program.
Specifically, AGC challenged the 2005 congressionally enacted “Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users” as applied by Caltrans. The Act requires that a minimum of ten percent of federal dollars be expended with disadvantaged bus iness enterprises (DBEs).
AGC sought an injunction against Caltrans’ DBE program, declaring the program unconstitutional.
AGC asserted that Caltrans must identify intentional acts of discrimination and that failing to identify specific acts of intentional discrimination renders its program unconstitutional. The program was also attacked on the grounds that some of the categories included in the DBE goal did not include sufficient specific statistical evidence pertaining to minority women. The statistical evidence in the disparity st udy found disparities for minorities, but the findings were not broken down by gender.
To rebut AGC’s claim, Caltrans argued that its program met the requirements set forth in Western States’ two-prong test for narrow tailoring. The presence or absence of discrimination in the State’s transportation contracting industry and the narrowly tailored remedy limited to minority groups that had suffered discrimination were the two prongs.
The court compared the probative evidence presented in Western States and AGC. It was determined that in Western States there was insufficient evidence of discrimination within the
175 We note that the USDOT regulations, as demanded in 1992 recommends the use of a disparity study among other availability sour ces for setting the DBE goals.
176 California Department of Transportation (Caltrans) in the matter, Associated General Contractors of California, San Diego Chapter v.
Caltrans (2:09-CV-01622-JAM-GGH) March 23, 2011.
31 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
department’s own contracting market. Thus, Washington failed to meet its burden of demonstrating that its DBE program was narrowly tailored to further Congress’s compelling remedial interest. To calculate a disparity in Western States , the proportion of DBE firms in the state was compared with the percentage of contracts awarded to DBEs on race -neutral contracts.
This methodology was found to be oversimplified by the Appellate Court. In contrast, the evidence Caltrans proffered was characterized by the Dist rict Court as extensive statistical and anecdotal evidence of discrimination in the California contracting industry.
On March 23, 2011, the District Court granted summary judgment in the AGC case in favor of Caltrans. The Court found that Caltrans met the standard set forth in Croson by identifying discrimination with “specificity,” and showing a pattern of “deliberate exclusion.” 177
AGC appealed the District Court’s decision to the Ninth Circuit Court of Appeals. On April 16, 2013, Judge Jerome Harris delivered the opinion for the Ninth Circuit, dismissed AGC ’s appeal, and upheld Caltrans’ DBE Program, ruling that it survived the strict scrutiny standard. 178 Judge Harris opined that Caltrans presented sufficient evidence of discrimination in the California transportation contracting industry, and that the DBE Program was narrowly tailored to remedy the identified discrimination.
179 The Ninth Circuit dismissed the appeal for lack of standing, and held that AGC did not establish that any of its members had suffered or will suffer harm as a result of Caltrans’ program.
180
VII. Title VI
Title VI of the 1964 Civil Rights Act, 42 U.S.C. Section 2000(d), provides in the relevant section that “[n]o person in the United States shall, on the grounds of race, color, or national origin, be excluded from participation in, be denied the benefits of , or be subjected to discrimination under any program or activity receiving Federal financial aid.” 181 Federal financial assistance to any
program effectuates the provisions of Title VI to any program receiving financial assistance. The Secretary of Transportation has issued regulations forbidding discrimination in federally funded projects and requiring affirmative action in certain circumstances. 182
The City of Oakland received Federal financial assistance from 13 federal spending sources and 442 federally assisted contracts awarded during the study period July 1, 2016, to June 30, 2021.
To state a claim for damages under Title VI, a plaintiff must allege that (1) the entity is engaging in intentional racial discrimination; and (2) the entity is receiving federal assistance. 183 A Plaintiff
177 Croson, 488 U.S. at 509.
178 ACG II, 713 F.3d at 1200.
179 Id.
180 Associated General Contractors of California, San Diego Chapter v. Caltrans, Case No. 11-16228 (9th Cir. April 16, 2013).
181 Title VI of the 1964 Civil Rights Act of 1964, 42 U.S.C. 2000(d).
182 Coral Construction Inc. v. City and County of San Francisco, et. al., 50 Cal.4th 315 (2010).
183 Denard M. Fobbs v. Holy Cross Health Systems, 29 F.3d 1439, 1447 (9th Cir. 1994).
32 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
may allege intentional claim of discrimination under Title VI if the Plaintiff can show that the actions of the Defendant had a discriminatory impact and that the defendant act with an intent or purpose to discriminate against an individual in the protecte d class. 184 A finder of fact should
consider all of the evidence and look to the “totality of the relevant facts” to determine whether the governmental entity defendant has engaged in intentional discrimination. 185
The Title VI caselaw also recognizes that a governmental entity’s race neutral practices may have a disparate impact upon a protected class. The federal case -law guidance provides that a plaintiff may establish a prima facie case if the defendant’s faciall y neutral practice causes a disproportionate adverse impact on a protected class. A defendant may rebut this inference by justifying the challenged practice. If the defendant can justify the challenged practice, the plaintiff may still prevail by establishing a less discriminatory alternative.186
VIII. Section 31 of the California Constitution
California Constitution, Section 31, is a constitutional amendment that precludes discrimination and the use of preferences based on race, sex, color, ethnicity, or national origin in the award of public contracts.
187 Although the amendment allows for the affirmative action requirements of a federal grant, the question of the appropriate application of a DBE program by a USDOT grantee in California has not been reviewed by the Ninth Circuit. The question of the appropriate application of the DBE program by a USDOT grantee in California was reviewed by the Ninth Circuit in AGC, and the court determined that Caltrans was required to comply with the DBE regulations.
188
The U.S. Constitution requires governmental agencies to treat all individuals and groups equally in the operation of public employment, public education, and public contracting. Section 31 does state that “if any parts are found to conflict with federal la w or the U.S. Constitution, the section shall be implemented to the maximum extent that federal law and the U.S. Constitution permit.”
The leading California cases concerning Section 31 are Hi -Voltage v. City of San Jose , 189 Ward
Connerly v. State Personnel Board and Coral Construction, Inc. v. City and County of San Francisco et al.
190 In Hi-Voltage, the California Supreme Court held that Section 31 prohibited the City of San Jose from requiring construction contractors to document their efforts to solicit M/WBEs as subcontractors. The court noted two fatal flaws: (1) Contractors were required to request bids from
184 Darensburg v. Metropolitan Transportation Commission, 636 F.3d 511, 522 (9th Cir. 2011).
185 Jun Yu v. Idaho State University, 15 F.4th 1236, 1242 (9th Cir. 2021).
186 Id. at 519.
187 Proposition 16, a California ballot proposition sought to amend the California Constitution to repeal Section 31, formerly Pr oposition 209.
On November 3, 2020, California voters rejected Proposition 16 and it failed to pass.
188 ACG II, 713 F.3d at 1200.
189 24 Cal. 4th 537 (Cal. 2000).
190 92 Cal. App. 4th 16 (Cal. 2001).
33 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
at least four M/WBEs, which the court considered a preference in favor of M/WBEs and (2) the program also failed because the extent to which M/WBEs were chosen would be measured against the City’s statistical expectation.
Ward Connerly, a subsequent appellate court opinion, determined that Section 31 applied to the five California statutory programs before that court.
191 However, neither Hi-Voltage nor Ward Connerly
speak directly to what would happen should the findings of the local government’s disparity study point to discrimination and implementation of a race-conscious remedy.
Hi-Voltage addressed the impact of Section 31 on a targeted outreach program by the City of San Jose. The California Supreme Court wrote:
…if it were determined the City had violated federal constitutional or statutory law, the supremacy clause as well as the express terms of Proposition 209 would dictate federal law prevails…
192
Crucially, it went on:
The disparity study is not part of the record in this case. Without it, the court has no basis for measuring the fit between the Program and the goal of eliminating a disparity in the amount of contract dollars awarded MBEs in comparison to non- MBEs.
193
The Supreme Court offered no guidance, however, upon the perimeters of Section 31 and whether the inclusion of a disparity study in this case may have permitted a race-conscious remedy.
In Coral Construction v. San Francisco,
194 the California Superior Court determined that
Proposition 209 barred San Francisco’s race -conscious program.195 On April 18, 2007, the First District Court of Appeals affirmed that judgment but remanded the case for a determination of whether the defendant’s evidence met the majority opinion’s test that the discrimination was intentional.
196
In a subsequent appeal following remand, t he California Supreme Court weighed in on Article I, section 31 of the California Constitution in Coral Construction, Inc. v. City and County of San Francisco et al.
197 The Supreme Court considered a challenge to the City and County of San
191 State Lottery, Professional Bond Services, State Civil Service, Community Colleges, State Contracting (reporting requirements).
192 Hi-Voltage, 24 Cal. 4th 537 at 569.
193 Id.
194 Coral Construction, Inc. v. City & County of San Francisco, See 116 Cal. App. 4th 6 (2004).
195 Coral Construction also challenged the procedural propriety of the court granting plaintiff summary judgment because the factual record did not support one.
196 149 Cal.App.4th 1218 (2007).
197 Coral Construction Inc. v. City and County of San Francisco, et. al., 50 Cal.4th 315 (2010).
34 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Francisco (“City”) M/WBE program. The Supreme Court interpreted section 31 to prohibit race and gender conscious programs permitted, but not required, by the federal equal protection clause.
Citing Hi-Voltage, the Supreme Court wrote that “section 31 categorically prohibits discrimination and preferential treatment.”198 Further, the Supreme Court wrote that the literal language of section 31 “admits no compelling interest exception. [and] we find nothing to suggest the voters intended to include one sub silentio.” 199 The California Supreme Court rejected the City’s argument that section 31 violates the political structure doctrine relying upon the reasoning in the Ninth Circuit’s decision in Wilson. The Supreme Court, however, recognized that there may be rare circumstances in which racial preferences are required by the Fourteenth Amendment’s equal protection clause.
The Supreme Court opined:
Accordingly, even in the rare case in which racial preferences are required by equal protection as a remedy for discrimination, the government body adopting such remedies must undertake an extraordinary burden of justification to assure all citizens that the deviation from the norm of equal treatment of all racial and ethnic groups is a temporary measure, a measure taken in the service of the goal of equality itself.
200
The California Supreme Court also rejected the City’s argument that the federal funding exception compelled the adoption of race conscious measures. The Coral Court concluded federal regulations permits not requires the use of race conscious measures if not prohibited by other law.
201 Finally, the California Supreme Court also considered the City’s argument in Coral Construction that the Fourteenth Amendment’s equal protection clause mandates that the City adopt an M/WBE program as a remedy for its’ own discrimination. The Supreme Court reasoned that the federal compulsion argument is largely a factual dispute and hinges upon the Board’s decision to adopt race conscious legislation and remanded the matter back to the t rial court for further proceedings.
202
In remanding the case to the trial court, the California Supreme Court provided guidance in reviewing the summary judgment evidence. To defeat the Plaintiff’s motion for summary judgment the City must establish triable issues of fact for the federal compul sion claim. The City must show the following:
• The City has purposely or intentionally discriminated against MBEs and WBEs. • The purpose of the City’s 2003 Ordinance is to provide a remedy for such discrimination. • The Ordinance is narrowly tailored to achieve that purpose.
198 Id. at 327.
199 Id.
200 Id. at 332.
201 Id. at 335.
202 Id. at 336. See also Hi-Voltage Wire Works Inc. v. City of San Jose, 24 Cal.4th 537 (2000) (The California Supreme Court held that the governmental entity may adopt race conscious remedies as a remedy for that entity’s intentional discrimination).
35 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
• A race and gender conscious remedy is necessary as the only, or at least the most likely means of rectifying the resulting injury.203
The application of Title VI to the Sacramento Municipal Utility District was also raised in C&C Construction v. Sacramento Municipal Utility District (SMUD).204 The majority Court of Appeals opinion began with the point that race-neutral programs are the only ones Proposition 209 permits in California, but also acknowledged that its provisions were subject to federal law. It viewed the regulations of the U.S. Departments of Energy, Defense, and Transportation as not requiring recipients of federal funds to use race-conscious remedial programs for identified discrimination.
Moreover, its reading of the regulations themselves was that SMUD’s actions had to be consistent with Proposition 209.
205 Also, both SMUD’s 1993 disparity study and its 1998 update found Croson-level discrimination against MBEs, but they did not look at whether race-neutral remedies would suffice to meet its federal nondiscrimination obligations. 206 Indeed, the majority observed that the disparity study update was specifically instructed not to consider this factor. Finally, the Court found that SMUD, under its reading of the federal regulations, had a burden to show that it would lose funds if it did not put in place the race -conscious program. Citing S.J. Groves & Sons v. Fulton County,207 the dissent’s view of the regulations was that, properly read, a race-conscious program is not an option where a race-neutral one will suffice. The required “affirmative action” did not refer only to race -neutral programs; it also included race -conscious programs. 208 The Department Secretary determined SMUD’s compliance with the federal regulations. What the majority did in affirming the trial court decision to enjoin the use of race interfered with that authority and SMUD’s obligation to comply with the regulations.
As such, SMUD violated the Supremacy Clause. However, the majority held that a cogent argument was raised too late to be considered during the appeal. The dissent summarized its position as follows:
Since the requirement of “affirmative action” includes both race -neutral and race- conscious action and the undisputed evidence establishes that SMUD has attempted to use race -neutral outreach and other methods and concluded in good faith that they were not sufficient to remedy the statistical underutilization reflected in the disparity studies, SMUD was left with no other alternative but to adopt a race -
203 Id. at 337 -338. The Trial Court on remand dismissed the litigation as moot and the decision was affirmed by the Court of Appeals for the California First Appellate District Division Four.
204 122 Cal. App. 4th 284 (Cal. App. 2004).
205 SMUD offers no argument or authority that the Department of Energy requires race -based discrimination [a violation of Proposition 209], either in general or specifically, in SMUD’s case, as an “appropriate remedial step.” It would appear that the Department of Energy, by using the general term “’appropriate,’ meant for the funding recipient to consider the state laws and regulations relevant to that recipient when determining what action to take. In SMUD’s case, such consideration includes the limitations of [Proposition 209].” The opinion interpreted the Department of Transportation’s regulations as also not requiring race conscious responses.
206 By implication, we note if SMUD had, it could have move to a race-conscious program.
207 920 F.2d 752 (11th Cir. 1991).
208 The applicable regulation “condone[s], and in some cases require[s], race-conscious regulations and/or action.” (italics added), S.J. Groves, 920 F.2d at 764-765.
36 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
conscious remedial plan to eliminate the effects of its own discriminatory practices.209
Finally, in Coalition for Economic Equity v. Pete Wilson et. Al ., 210 the Ninth Circuit Court of
Appeals also considered a challenge to Proposition 209. Following the adoption of Proposition 209, a challenge was initiated in federal court seeking to enjoin the implementation of Proposition 209. The Plaintiffs, a coalition of individuals and civil rights organizations filed suit alleging that Proposition 209 violated the equal protection clause of the Fourteenth Amendment and that the proposition is void under the Supremacy Clause because it conflicts with several federal st atutes.
The lower court granted a preliminary injunction enjoining the State of California from implementing or enforcing Proposition 209 in public employment, public education or contracting.
211
The Wilson Court vacated the preliminary injunction and remanded the case to the lower court. In reaching this decision, the Ninth Circuit concluded that “as a matter of conventional equal protection analysis, there is simply no doubt that Proposition 209 is constit utional.”212 The Court for the Ninth Circuit rejected the argument that Proposition 209 violated the political structure doctrine, equal protection clause or was preempted by the Civil Rights Act of 1964.213
IX. Conclusion
The decisions of the United States Supreme Court in Croson and Adarand changed the legal landscape for business affirmative action programs. These United States Supreme Court decisions imposed the highest legal standard on the government’s use of local and federal funds to institute remedial race-conscious public contracting programs.
This chapter has examined what Croson, and its progeny require for a local government to institute a constitutional race or gender -conscious public contracting program. In addition to the rigorous standard of review required under Croson, the California constitution also places restrictions on the use of race and gender in public contracting. Article 1, Section 31 of the California constitution prohibits discrimination or preferential treatment on the basis of race and gender in public contracting. Although Section 31 prohibits race and gender conscious measures, the California Supreme Court
214 acknowledged that the federal equal protection clause may, under rare circumstances, compel the use of race and gender conscious measures to remedy a public entities intentional discrimination.
209 122 Cal. App. 4th 284 at 324.
210 Coalition for Economic Equity v. Pete Wilson, et al, 122 F.3d 692 (9th Cir. 1997).
211 Id.at 697.
212 Id.at 701.
213 Id. at 710. The Ninth Circuit Court of Appeals held that Proposition 209 is not preempted by the preemption provisions of Title VII or Title IX.
214 Hi-Voltage, 24 Cal. 4th at 675.
37 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
In assessing the probative value of a disparity study, the Supreme Court stated, at best, the disparity study creates an inference of discrimination against M/WBE subcontractors by prime contractors but does not establish intentional acts by the City.
215 The California Supreme Court, however,
concurs that any race conscious measure, even remedial laws must survive strict scrutiny. Further, the California Supreme Court agrees that in rare circumstances providing a remedy for the government’s own discriminatory conduct may be appropriate. Under these circumstances the federal equal protection clause, notwithstanding Section 31 of the State constitution, may compel the use of race and gender conscious measures as a remedy for the C ity’s own discrimination. If the City has intentionally discriminated against minority and women owned businesses, it may fashion a remedy utilizing race and gender conscious measures.
The Supreme Court in Harvard did not overrule the precedent established by Croson or Adarand and it is far too early to determine the legal impact of the Harvard case on public contracting.
There is no doubt that the Harvard decision, however, will trigger additional challenges to public contracting affirmative action programs. Future federal cases and decisions applying the Harvard decision to race conscious affirmative action in public contracting will provide the road map by which to judge race and ethnicity- based classifications. The Court’s disposition of these cases as they develop will provide guidance on the evidence required to establish if “extraordinary circumstances”
216 exist that justify the use of race conscious measures. Relying on the language in Harvard, litigation has already been filed in the Eastern District of Kentucky challenging the Disadvantaged Business Enterprise Program and other challenges have also been asserted against private sector Diversity Equity and Inclusion programs. 217
This study will examine the C ity’s contracting process to determine if there is a strong basis in evidence to conclude the C ity has intentionally engaged in discriminatory conduct. In the event the findings document intentional discrimination and meet the strict scrutiny standard, race and gender conscious measures are the only or most likely means of addressing the injury, race and gender conscious measures may be appropriate under both federal and state law.
215 Id. at 675-676. The California Supreme Court stated in Hi-Voltage that the disparity study was not part of the record, and the Court made no comment on the impact of the disparity study on the analysis. Id. at 676.
216 143 S. Ct at 2162.
217 Mid-America Milling Company, LLC et al. v. U.S. Department of Transportation, et al., Case No. 23-CV. 00072, filed October 26, 2023.
38 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
X. List of Authorities
A. Cases
Cases Pages
Adarand Constructors, Inc. v. Federico Peña,
115 S.Ct. 2097 (1995) ........................................................................................... 1, 36, 37 Adarand Constructors, Inc. v. Slater,
228 F.3d 1147 (10th Cir. 2000) ........................................................................................ 9 Associated Gen. Contractors of Cal., San Diego Chapter v. Caltrans, Case No. 11-16228 (9th Cir. April 16, 2013) ................................................................. 31 Associated Gen. Contractors of Cal., San Diego Chapter v. Caltrans, 2:09-CV-01622-JAM-GGH (March 23, 2011) ......................................................... 30, 31 Associated Gen. Contractors v. Coal. for Econ. Equity (“AGCC II”), 950 F.2d 1401 (9th Cir. 1991) ................................................................................. passim Associated Gen. Contractors of Ohio, Inc. v. Drabik,
214 F.3d 730 (6th Cir. 2000) ..................................................................................... 13, 18 Associated Gen. Contractors v. New Haven,
791 F. Supp. 941 (D. Conn. 1992) .................................................................................... 7 Builders Ass’n of Greater Chi. v. City of Chi.,
298 F. Supp. 2d 725 (N.D. Ill. 2003) .............................................................................. 12 C & C Construction v. Sacramento Municipal Utility District (SMUD), 122 Cal. App. 4th 284 (Cal. App. 2004) ......................................................................... 35 City of Richmond v. J.A. Croson Co.,
488 U.S. 469 (1989) ................................................................................................. passim
Coalition for Economic Equity v. Pete Wilson, et al,
122 F.3d 692 (9th Cir. 1997) ....................................................................................... 2, 35
Concrete Works of Colo., Inc. v. City & Cnty. of Denver (“Concrete Works I”), 823 F. Supp. 821 (D. Colo. 1993) ............................................................................ passim Concrete Works of Colo., Inc. v. City & Cnty. of Denver (“Concrete Works II”), 36 F.3d 1513 (10th Cir. 1994) .............................................................................. 9, 16, 25
39 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Concrete Works of Colo., Inc. v. City & Cnty. of Denver (“Concrete Works III”), 86 F. Supp. 2d 1042 (D. Colo. 2000) .............................................................................. 15
Concrete Works of Colo., Inc. v. City & Cnty. of Denver (“Concrete Works IV”), 321 F.3d 950 (10th Cir. 2003) .................................................................................... 9, 11
Cone Corp. v. Hillsborough Cnty.,
908 F.2d 908 (11th Cir. 1990) ................................................................................... 15, 21 Contractors Ass’n of E. Pa. v. City of Philadelphia (“Philadelphia IV”), 6 F.3d 990 (3d Cir. 1993) .................................................................................... 5, 6, 7, 19 Contractors Ass’n of E. Pa. v. City of Philadelphia (“Philadelphia V”), 893 F. Supp. 419 (E.D. Pa.1995) ...................................................................................... 8 Contractors Ass’n of E. Pa v. City of Philadelphia (“Philadelphia VI”), 91 F.3d 586 (3rd Cir. 1996) ..................................................................................... passim Coral Constr. Co. v. King County,
941 F.2d 910 (9th Cir. 1991) .................................................................................... passim Coral Constr. Inc. v. City and Cnty of San-Francisco, et. al., 50 Cal.4th 315 (2010) ............................................................................................. 1, 31, 33
Darensburg v. Metropolitan Transportation Commission,
636 F.3d 511, 522 (9th Cir. 2011) .................................................................................... 32
Denard M. Fobbs v. Holy Cross Health Systems,
29 F.3d 1439, 1447 (9th Cir. 1994) .................................................................................. 31 EEOC v. Am. Nat’l Bank,
652 F.2d 1176 (4th Cir. 1981) ......................................................................................... 20 Eng’g Contractors Ass’n v. Metro. Dade Cnty. (“Dade County I”), 943 F.Supp. 1546 (S.D. Florida 1996) ..................................................................... passim Eng’g Contractors Ass’n v. Metro. Dade Cnty. (“Dade County II”), 122 F.3d 895 (11th Cir. 1997) .................................................................................. passim Gratz v. Bollinger,
123 S. Ct. 2411 (2003) .............................................................................................. 12, 26 Grutter v. Bollinger,
539 U.S. 306 (2003) ........................................................................................................ 26 40 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Gross Seed Co. v. Nebraska Department of Roads, et. al., 345 F.3d 964 (8th Cir. 2003) .......................................................................................... 28 Hazelwood Sch. Dist. v. United States,
433 U.S. 299 (1977) .................................................................................................. 13, 17 H.B. Rowe Co. v. Tippett,
615 F.3d 233 (4th Cir. 2010) ............................................................................................ 5 Hershell Gill Consulting Eng’rs, Inc. v. Miami-Dade Cnty., 333 F. Supp. 2d 1305 (S.D. Fla. 2004) ........................................................................... 26 Hi-Voltage Wire Works Inc. v. City of San Jose,
24 Cal.4th 537 (2000) ..................................................................................... 32, 33, 34, 37 Int’l Bhd. of Teamsters v. United States,
431 U.S. 324 (1977) ............................................................................................ 14, 21, 22 Jun Yu v. Idaho State University,
15 F.4th 1236, 1242 (9th Cir. 2021) ............................................................................... 32 League of United Latin Am. Citizens v. Santa Ana,
410 F. Supp. 873 (C.D. Cal. 1976) ................................................................................. 20 Monterey Mech. Co. v. Pete Wilson et al.,
125 F.3d 702 (9th Cir. 1997) .......................................................................................... 13 O’Donnell Constr. Co. v. D.C.,
963 F.2d 420 (D.C. Cir. 1992) ......................................................................................... 23 Ohio Contractors Ass’n v. Keip,
1983 U.S. App. LEXIS 24185 (6th Cir. 1983) ................................................................ 18 Reynolds v. Sheet Metal Workers, Local 102,
498 F. Supp. 952 (D.C. Cir. 1980) ................................................................................... 20 RGW Construction v. San Francisco Bay Area Rapid Transit District, No. C92-2938 THE (N.D. Cal. Sept. 18, 1992). .............................................................. 16 Shaw
v. Hunt,
517 U.S. 899 (1996) ................................................................................................... 11, 12 She
rbrooke Turf Inc. v. Minnesota Department of Transportation, 345 F.3d 964 (8th Cir. 2003) ........................................................................................... 28 41 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
Students for Fair Admissions, Inc. (“SFFA”) v. President and Fellows of Harvard College and University of North Carolina et. al. (Harvard), 143 S.C
t. 2141 (2023) .............................................................................................. passim W.H. Scott Constr. Co. v. City of Jackson,
199 F.3d 206 (5th Cir. 1999) .......................................................................................... 13 Western States Paving Co. v. State of Washington Dept. of Transportation, 407 F.3d 983 (9th Cir. 2005) ................................................................................... passim Wygant v. Jackson Bd. of Educ.,
476 U.S. 267 (1986) .......................................................................................... 7, 8, 10, 21
42 Mason Tillman Associates, Ltd., May 2024
Final Report
City of Oakland Disparity Study
Appendix: Legal Review
B. Statutes
42 U.S.C. Section 2000d et seq.
42 U.S.C. Section 14000e et seq.
49 CFR Part 26.
Cal. Const., Article I, Section 31.
Cal. Public Contracting Code, Section 2002.
www.masontillman.com