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Federal Stimulus Contracts Inaccessible For Minority Vendors

Written by Lawrence Walker on 07 April 2010.

Stumulus Help for minoritiesA demand for more federal stimulus contracts for Hispanic and black businesses from the government is on the rise these days. Members from these minority groups who own and operate businesses are asking for an improved system that tracks those who receive government-funded work and to be more included on the list for receiving stimulus aid.

Obtaining contracts has been a major challenge for Hispanics and blacks before federal stimulus contracts were issued. Of the $46 billion in federal aid, Hispanic-owned businesses have received only 1.7 percent and black-owned businesses have received only 1.1 percent. These numbers are quite low when compared to the percentage of black and Latino-owned businesses in the nation. According to the census, Hispanics own 6.8 percent of all businesses and blacks own 5.2 percent.

Improved Data Tracking System
Data showing minority status when contracts are awarded to businesses is often inconsistent and there is no centralized system that records all the information. Additionally, the information is inaccessible to the public. Minority vendor advocates are demanding for more complete and accessible demographic data on stimulus contracts. Ultimately, minority-owned businesses need to be tracked by race in order to receive federal stimulus funding.

A Fair Share at Federal Stimulus Contracts
Aside from tracking issues, minority vendors need a more proportionate piece of the stimulus pie. Currently, the competition for stimulus contracts is intense and minority groups have a bigger challenge to face when competing for the projects. The reality is that Hispanics and blacks could use the aid more than white communities due to the fact that they have been affected by the recession more. In other words, there is higher unemployment in minority communities and the extra financial relief will help rebuild communities and improve business.

A very small percentage of minority-owned businesses actually get stimulus contracts. Only 6 percent of the $16.9 billion Federal Highway Administration contract funding was given to disadvantaged businesses owned by minorities, women, veterans and the disabled. 7.8 percent of the $1.1 billion Federal Aviation Administration and 8.6 percent of direct Transportation Department stimulus money has gone to disadvantaged businesses. Although money is being spent on these businesses, the numbers remain low.

Minorities are actually kept away from contractual work and there is an attempt to ensure that the minority workers who do get the job don't come back. They allow minority vendors to apply for government bids, but once they qualify and get the job, RFPs are sometimes terminated for no apparent reason. Winning federal stimulus contracts and actually keeping them are another challenge minorities face.

To solve the issue of disproportionate federal stimulus contracts, the Obama administration is planning on making large contracts to be more accessible. They have increased grants, provided more short-term loan programs and pledged $20 million in subsidies to small businesses owned by minority groups. There is also an effort to help spread knowledge about federal stimulus contract opportunities through nationwide events. By increasing the chance for government bids for minority vendors, there will be less poverty, drug-use, crime and unemployment in these communities.

A demand for more federal stimulus contracts for Hispanic and black businesses from the government is on the rise these days. Members from these minority groups who own and operate businesses are asking for an improved system that tracks those who receive government-funded work and to be more included on the list for receiving stimulus aid.

Obtaining contracts has been a major challenge for Hispanics and blacks before federal stimulus contracts were issued. Of the $46 billion in federal aid, Hispanic-owned businesses have received only 1.7 percent and black-owned businesses have received only 1.1 percent. These numbers are quite low when compared to the percentage of black and Latino-owned businesses in the nation. According to the census, Hispanics own 6.8 percent of all businesses and blacks own 5.2 percent.

Improved Data Tracking System
Data showing minority status when contracts are awarded to businesses is often inconsistent and there is no centralized system that records all the information. Additionally, the information is inaccessible to the public. Minority vendor advocates are demanding for more complete and accessible demographic data on stimulus contracts. Ultimately, minority-owned businesses need to be tracked by race in order to receive federal stimulus funding.

A Fair Share at Federal Stimulus Contracts
Aside from tracking issues, minority vendors need a more proportionate piece of the stimulus pie. Currently, the competition for stimulus contracts is intense and minority groups have a bigger challenge to face when competing for the projects. The reality is that Hispanics and blacks could use the aid more than white communities due to the fact that they have been affected by the recession more. In other words, there is higher unemployment in minority communities and the extra financial relief will help rebuild communities and improve business.

A very small percentage of minority-owned businesses actually get stimulus contracts. Only 6 percent of the $16.9 billion Federal Highway Administration contract funding was given to disadvantaged businesses owned by minorities, women, veterans and the disabled. 7.8 percent of the $1.1 billion Federal Aviation Administration and 8.6 percent of direct Transportation Department stimulus money has gone to disadvantaged businesses. Although money is being spent on these businesses, the numbers remain low.

Minorities are actually kept away from contractual work and there is an attempt to ensure that the minority workers who do get the job don't come back. They allow minority vendors to apply for government bids, but once they qualify and get the job, RFPs are sometimes terminated for no apparent reason. Winning federal stimulus contracts and actually keeping them are another challenge minorities face.

To solve the issue of disproportionate federal stimulus contracts, the Obama administration is planning on making large contracts to be more accessible. They have increased grants, provided more short-term loan programs and pledged $20 million in subsidies to small businesses owned by minority groups. There is also an effort to help spread knowledge about federal stimulus contract opportunities through nationwide events. By increasing the chance for government bids for minority vendors, there will be less poverty, drug-use, crime and unemployment in these communities.