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Dive brief:
- A recent study of public construction procurement in New Jersey found a stark disparity between the number of minority- and women-owned construction firms and the percentage of projects they win in the state.
- Although nearly 28 percent of the state’s construction companies are minority-owned, they received only 3.7 percent of the state’s awarded funds for major construction contracts worth up to $5.7 million of dollars, according to the New Jersey Disparity Study released this month. Similarly, women-owned firms made up nearly 38 percent of all professional services firms, but received less than 10 percent of contracts up to $800,000.
- For main goods and services contracts, minority businesses accounted for 23.6% of all businesses, but only won 4.2 percent of the contracts, according to a Jan. 23 news release from the New Jersey Department of the Treasury, which commissioned the study. The report also found what it called “statistically significant” disparities in awarding construction subcontracts to minorities, specifically businesses owned by black and Asian Americans.
Diving knowledge:
“The critical findings of this study will ensure that the state is well equipped to address the disparities in public procurement opportunities faced by women-owned, minority-owned, and disabled veteran-owned businesses,” said the Governor Phil Murphy, in the statement. .
The state reviewed more than 1.2 million records and 240,000 contracts from more than 60 contracting agencies, authorities, commissions, state colleges and universities awarded between July 2015 and June 2020. The contracts covered the hiring of goods and services, professional services and construction.
“This study illuminates a puzzling historical pattern in how minority- and women-owned businesses are affected by the state’s multibillion-dollar hiring system,” said New Jersey State Rep. Sterley Stanley in the statement
A similar study in Massachusetts in 2022 found that 95% of construction contracts in that state failed to meet inclusion goals for minorities and women.
Workforce participation by minority groups, women and veterans with disabilities has gained increased attention in major construction contracts as both public and private owners demand more diversity in the ranks of construction, an industry that is overwhelmingly white and male.
Nationally, women and black workers make up about 47 percent and 13 percent of workers in all industries, respectively, according to the Bureau of Labor Statistics. But in construction, women represent only 11% of workers and only 7% are black. Almost 88% are white.
Legal challenges
Codified goals for diversity thresholds in awarding public dollars in construction contracts, including programs by the US DOT and the Small Business Administration, have come under fire following a Supreme Court decision last year that banned indeed race-based affirmative action in institutions. of higher education.
New Jersey commissioned its study in 2020, three years before this ruling. In the statement, Murphy indicated that the state intends to act on the report’s findings.
“I look forward to the work ahead as we identify responsive state actions while launching initiatives to promote fair hiring practices with the support of our legislators and the business community,” Murphy said.
