Washington tate Airports Disparity tudy 2019 WASHINGTON STATE AIRPORTS DISPARITY STUDY 2019 Conducted for The Washington State Department of Transportation Colette Holt & Associates 16 Carriage Hills · San Antonio, TX 78257 433 West Briar Place #11C · Chicago, Illinois 60657 (773) 255-6844 [email protected] twitter.com/mwbelaw · facebook.com/mwbelaw ii © 2019 Colette Holt & Associates, All Rights Reserved Washington State Airports Disparity Study 2019 About the Study Team Colette Holt & Associates (“CHA”) is a national law and consulting firm specializing in disparity studies, affirmative action contracting programs, expert witness services, compliance monitoring and strategic development related to inclusion, diversity and affirmative action. Founded in 1994, it is led by Colette Holt, J.D., a nationally recognized attorney and expert. In addition to Ms. Holt, the firm consists of Steven C. Pitts, Ph. D., who serves as the team's economist and statistician; Ilene Grossman, B.S., CHA Chief Operating Officer; Glenn Sullivan, B.S., CHA Director of Technology; Victoria Farrell, MBA, CHA Assistant Principal Researcher; and Joanne Lubert, J.D., Special Counsel. CHA is certified as a Disadvantaged Business Enterprise, Minority-Owned Business Enterprise and a Woman-Owned Business Enterprise by numerous agencies. Blackstar Services, Inc. Daucey Brewington, owner of Blackstar Services, Inc. is an enrolled member of the Lumbee Tribe of North Carolina. Founded in 1998, Blackstar works directly with Native individuals and tribally owned businesses. Mr. Brewington works with public and private organizations to create business pathways into Indian Country, particularly by leveraging federal programs that offer advantages for tribally owned concerns. Pacific Communications Consultants, Inc. Regina Glenn, MBA, President. PCC is an award-winning M/W/DBE-certified management consulting firm, specializing in diversity and inclusion compliance. The firm provides diversity and management training; community relations; public involvement; and M/WBE development. PCC specializes in enabling its clients to communicate in an effective manner with diverse communities and neighborhoods. For over 20 years PCC has provided a full range of communication-related services. Acknowledgements We wish to express special appreciation to Earl Key, Jackie Bayne, Michael Carpenter, Larry Watkinson and Jennifer Kandel for their assistance in conducting this study. © 2019 Colette Holt & Associates, All Rights Reserved iii Washington State Airports Disparity Study 2019 iv © 2019 Colette Holt & Associates, All Rights Reserved Table of Contents I. Executive Summary ................................................ 1 A. Study Methodology and Data .................................................... 1 B. Legal Standards................................................................ 2 1. Summary of Constitutional Equal Protection Standards..................................... 2 2. Narrowly Tailoring Washington State Airports’ DBE Program ................................ 3 C. Study Findings................................................................. 4 1. Washington State Airports’ Disadvantaged Business Enterprise Programs . 4 a. Overview of the U.S. Department of Transportation DBE Program for FAA-Assisted Contracts . 4 b. Washington State Airports’ Disadvantaged Business Enterprise Programs. 7 c. Experiences with Obtaining Contracting Opportunities with Washington State Airports . 8 d. Conclusion ..................................................................... 10 2. Utilization, Availability and Disparity Analyses for Washington State Airports. 11 3. Analysis of Economy-Wide Race and Gender Disparities in the Airports’ Market . 17 4. Qualitative Evidence of Race and Gender Barriers in WSDOT’s Market ....................... 18 D. Recommendations ............................................................ 19 1. Augment Race- and Gender-Neutral Measures........................................... 19 2. Implement Narrowly Tailored DBE Programs ............................................ 22 3. Develop Performance Measures for Program Success ..................................... 23 II. Legal Standards for Washington State Airports’ Disadvantaged Business Enterprise Programs ................................................ 25 A. Summary of Constitutional Equal Protection Standards.............................. 25 B. Elements of Strict Scrutiny...................................................... 28 C. Strict Scrutiny as Applied to the Washington State Airports’ DBE Programs . 33 1. Elements of the DBE Program ......................................................... 33 2. Narrowly Tailoring Washington State Airports’ DBE Program ............................... 35 III. Disadvantaged Business Enterprise Program for Federal Aviation Administration Assisted Contracts .................................... 43 A. Overview of the U.S. Department of Transportation’s DBE Program for Federal Aviation Administration Assisted Contracts .............................................. 43 1. Policy Statement and Objectives....................................................... 44 2. Subpart A - General Requirements ..................................................... 44 3. Subpart B - Administrative Requirements ............................................... 45 4. Subpart C - Goals, Good Faith Efforts, and Counting ...................................... 46 5. Subpart D - Certification Standards .................................................... 49 © 2019 Colette Holt & Associates, All Rights Reserved v Washington State Airports Disparity Study 2019 6. Subpart E - Certification Procedures.................................................... 50 7. Subpart F - Compliance and Enforcement ............................................... 50 B. Washington State Airports’ Disadvantaged Business Enterprise Programs . 51 1. Overview .......................................................................... 51 2. Airport Staff Interviews .............................................................. 53 3. Airport Staff Survey ................................................................. 54 4. Experiences with Washington State Airports’ DBE Programs................................ 56 a. DBE Certification Policies ......................................................... 56 b. Obtaining Work on Airport Projects................................................. 57 c. Access to Networks and Information................................................ 59 d. Meeting Contract Goals .......................................................... 63 e. Mentor-Protégé Programs ........................................................ 68 C. Conclusion................................................................... 71 IV. Utilization, Availability and Disparity Analyses for Washington State Federal Aviation Administration Funded Contracts.............................. 73 A. Introduction and Overview ..................................................... 73 B. Contract Data Overview........................................................ 74 C. Washington State Airports’ Product and Geographic Markets ........................ 75 1. Washington State Airports’ Unconstrained Product Markets ............................... 75 2. Washington State Airports’ Geographic Market .......................................... 77 D. Washington State Airports’ Utilization of DBEs..................................... 78 E. Availability of DBEs in Washington State Airports’ Contracting Markets . 81 1. Methodological Framework .......................................................... 81 2. Analysis of DBE Availability in Washington State Airports’ Market ........................... 83 3. Analysis of Disparity Ratios Between DBE Utilization and Availability on Washington State Airports’ Contracts ........................................................................ 86 F. Conclusion ................................................................... 96 V. Analysis of Disparities in the Washington Economy .................... 97 A. Introduction ................................................................. 97 B. Disparate Treatment in the Marketplace: Evidence from the Census Bureau’s 2012 Survey of Business Owners............................................................. 99 C. Disparate Treatment in the Marketplace: Evidence from the Census Bureau’s 2013 - 2017 American Community Survey ................................................. 105 1. All Industries Combined in the State of Washington...................................... 107 2. The Construction Industry in the State of Washington.................................... 109 3. The Construction-Related Services Industry in the State of Washington . 111 4. Goods in the State of Washington .................................................... 114 5. The Services Industry in State of Washington ........................................... 116 6. The Information Technology Industry in State of Washington.............................. 118 vi © 2019 Colette Holt & Associates, All Rights Reserved Washington State Airports Disparity Study 2019 D. Evidence of Disparities in Access to Business Capital ............................... 120 E. Evidence of Disparities in Access to Human Capital ................................ 123 F. Conclusion .................................................................. 124 VI. Qualitative Evidence of Race and Gender Barriers in