Women Businesses Suffer Major Drop in State Transportation Contracts

Contact: Susan Gluss, media relations director, 510.642.6936 sgluss@law.berkeley.edu

New Prop 209 Impact Study Released by Berkeley Law Research Center

Berkeley , CA —September 25, 2007… Women-owned businesses have suffered a major drop in state transportation contracts since passage of Proposition 209, the California Civil Rights Initiative, according to new study by the Thelton E. Henderson Center for Social Justice (HCSJ) at the University of California, Berkeley, School of Law. Prop 209, approved by voters in 1996, eliminated affirmative action programs in state public education, contracting and employment.

A Vision Fulfilled? The Impact of Proposition 209 on Equal Opportunity for Women Business Enterprises documents the 11-year impact of the initiative within the state’s transportation construction industry, worth over $2 billion in public contracts each year. The California Department of Transportation (Caltrans) is the largest granting agency for transportation construction statewide.

The Henderson Center examined companies certified as Women Business Enterprises (WBEs) by Caltrans and analyzed the amount and number of contracts awarded. Researchers also conducted in-depth interviews and focus groups with presidents of firms that survived and those that failed.

The results are startling.  Within the state’s transportation construction industry:

  • Real dollars awarded to Women Business Enterprises fell by 40 percent;
  • Only 36 percent of the Women Business Enterprises certified by Caltrans in 1996 are in business today;
  • Women business owners excluded from the “good old boy” network lost contract bidding opportunities;
  • African-American Women Business Enterprises were hit the hardest.

“Proposition 209 will continue to be under scrutiny until we can fully comprehend its impact on California’s diverse population,” says Christopher Edley, Jr., dean of Berkeley Law School. “The research centers at Berkeley Law are uniquely positioned not only to analyze its impact, but also to provide a framework for the public policy debate about equal opportunity throughout the state.”

The HCSJ report mirrors the results of a recent Caltrans disparity study that found similar award disparities and a perception among contractors of bias in the bidding on—and awarding of—contracts after implementation of Proposition 209.

 “Equal opportunity has to be more than a catch-phrase or political tool,” says Monique W. Morris, senior research fellow at HCSJ and former director of the Discrimination Research Center. “The true measure of our success is not how well we promise equal opportunity, as Proposition 209 did, but how well we deliver on that promise.”

A Vision Fulfilled validates concerns expressed by women business owners about the lack of fair and equal access to public contracts in California’s transportation construction industry,” says Aileen C. Hernandez, president of Aileen Hernandez and Associates and chair of the California Women’s Agenda.  “To reverse the progress we tirelessly fought for does all of us a grave disservice.”

The report recommends a number of steps Caltrans and other state agencies can take to eliminate race and gender bias in public contracting.  Steps include: 

  • Augment and enforce a robust disadvantaged business enterprise program;
  • Provide leadership training to prevent gender bias in contact awards;
  • Institute policies to enforce anti-discrimination in the workplace and on public projects.

The research for A Vision Fulfilled? began under the direction of Monique W. Morris at the Discrimination Research Center (DRC) and continued when Morris joined HCSJ in March 2007.  It is the second in a series of reports on the impact of Proposition 209. Morris’ 2006 report, Free to Compete, revealed significant reductions in the survival rate and percentage of contracts awarded to firms certified as Minority Business Enterprises.

Thelton E. Henderson Center for Social Justice at the University of California, Berkeley, School of Law fosters creative scholarship that examines the law through a lens of social justice.  Established in 1999, the Center works in partnership with communities to provide education to the general public.