MTA contract study shows history of discrimination.

Draft report upholds agency's anti-discrimination stance

There is a history of discrimination against minority- and women-owned firms in local transportation construction contracts sufficient to justify the Metropolitan Transportation Authority's affirmative action program, according to a draft study released last week.

Under a 1989 U.S. Supreme Court ruling in the case of the City of Richmond vs. J.A. Croson Co., local government agencies must contract for such studies to justify the need for a program giving preference to minorities in contracting. The MTA's study was first contracted for two years ago.

The MTA is currently in litigation with a San Diego man who seeks to have the transit agency's disadvantaged business enterprise (DBE) program struck down. The case is based partly on the MTA's failure thus far to complete a study prior to adopting its DBE program.

Michael Cornelius, the plaintiff in the case, said he filed an appeal last week of a Superior Court ruling denying a motion for a preliminary injunction against the MTA. He said he also filed an amended complaint, challenging a new MTA rule on "good faith" efforts.

Under that rule, if a bidder wants to qualify for a contract but doesn't meet MTA goals for DBE participation, the firm must show that all bids from minority-owned subcontractors were accepted except those that exceeded non-DBE bids by more than 10 percent.

Cornelius said he does not believe his lawsuit is any less valid now that the study has been completed, since he still believes the MTA's policy constitutes a quota-based system, with price fixing now built into the equation.

David Wolds, an attorney representing Associated General Contractors in similar cases, said the MTA's new study will be "very closely looked at" to determine whether its conclusions are valid.

"People have been waiting for this study for a long time," said Wolds. "You simply can't rely on the data being correct. In many cases, disparity studies have been pure fabrication."

Wolds said he couldn't elaborate on who will be scrutinizing the study or what action may be taken because he would violate client confidentiality.

The study revealed underutilization in the awarding of contracts to all minority groups, including Asians, African-Americans, Hispanics, Native-Americans and women.

These results "prove our suspicion and thinking for many years," said Tony Wong, a member of the MTA's Transportation Business Advisory Council.

The study showed only 3 percent of construction contracts were awarded between 1984 and 1992 to Asian-American-owned firms, although these firms comprised 8 percent of the available pool. Transportation agencies awarded nearly 7 percent of their construction contracts to African-American-owned firms, although those firms comprised more than 11 percent of the available pool.

"The (MTA) board and its managers haven't had the focus called for true participation in this major national project (subway construction)," said Homer Broome, president of the African-American Chamber of Commerce. "There definitely should be a stronger outreach effort on their part."

Use of women-owned businesses in construction contracts, 4.8 percent, came close to the availability of women-owned firms, about 5 percent.

These numbers are probably pretty accurate, said Michael Gagan, a lobbyist with the downtown L.A.-based firm Rose & Kindel, which represents the Southland's Women in Transportation Coalition.

However, women-owned businesses were drastically underused when it came to awarding them architectural/engineering and professional services contracts, Gagan said.

About 1.5 percent of architectural/engineering and 2 percent of professional services contracts went to women-owned businesses between 1984 and 1992, while the availability of these firms was 9.6 percent and 9.4 percent, respectively, according to the study.

"More attention should be paid to the establishment of higher goals for women-owned firms," Gagan said.

In the past, an MTA attorney stated, because the authority is partially federally funded, a disparity study was unnecessary under Croson and was only being conducted to determine whether improvements could be made in the DBE program. However, the study text makes it clear that the report's purpose is to justify the existing program under Croson.

The draft study will be the subject of a series of public hearings in June, after which a final report will be prepared. The draft was researched and written by a joint venture between Darryl E. Greene & Associates and Triaxial Management Services Inc., but MTA staff spent about a week revising, editing and rewriting it.

The City of Los Angeles' "contract diversity outreach" program was struck down last year by the California Court of Appeal in a lawsuit filed by Domar Electric Inc.

That case, based largely on the fact that the program was established by mayoral directive and is not part of the city charter, is going before the state Supreme Court this summer. Meanwhile, the L.A. City Council is expected to vote in June to place a charter amendment on the November ballot - in case the Supreme Court ruling goes against the city.

Assistant City Attorney Pete Echeverria said the Supreme Court has agreed to accept friend-of-the-court briefs filed by the City of San Francisco, other cities, minority contractors and the National Association for the Advancement of Colored People - all in support of the city's position.

Briefs dealing with other issues - such as Croson, the economics of DBE programs and their effect on competition - were rejected, said attorney Bernard Kamine, who represents Domar.

"It seems the Supreme Court is more interested in the powers of cities and charters," said Kamine.