The State of Minority- and Women- Owned ... - Cleveland.com

Legal Standards for Government Affirmative Action Contracting Programs
of race-conscious and race-neutral methods as the year progressed, as the DOT
regulations require. 46
ii. Northern Contracting, Inc. v. Illinois Department of Transportation
Likewise, the Seventh Circuit Court of Appeals in a highly detailed opinion relying in part on the
MnDOT case affirmed the district court’s trial verdict that the Illinois Department of
Transportation’s application of Part 26 was narrowly tailored based in large part upon NERA’s
Availability Study and expert trial testimony. 47 IDOT had a compelling interest in remedying
discrimination in the market area for federally-funded highway contracts, and its DBE Plan was
narrowly tailored to that interest and in conformance with the regulations.
To determine whether IDOT met its constitutional and regulatory burdens, the court reviewed the
evidence of discrimination against minority and women construction firms in the Illinois area.
IDOT had commissioned a NERA Availability Study to meet Part 26’s requirements. Similar to
this Study, the IDOT Study included a custom census of the availability of DBEs in IDOT’s
market area, weighted by the location of IDOT’s contractors and the types of goods and services
IDOT procures. NERA estimated that DBEs comprised 22.77 percent of IDOT’s available
firms. 48 The IDOT Study next examined whether and to what extent there are disparities between
the rates at which DBEs form businesses relative to similarly situated non-minority men, and the
relative earnings of those businesses. If disparities are large and statistically significant, then the
inference of discrimination can be made. Controlling for numerous variables such as the owner’s
age, education, and the like, the Study found that in a race- and gender-neutral market area the
availability of DBEs would be approximately 20.8 percent higher, for an estimate of DBE
availability “but for” discrimination of 27.51 percent.
In addition to the IDOT Study, the court also relied upon:
46 Id.
• A NERA Availability Study conducted for Metra, the Chicago-area commuter rail
agency;
• Expert reports relied upon by an earlier trial court in holding that the City of Chicago had
a compelling interest in its minority and women business program for construction
contracts; 49
• Expert reports and anecdotal testimony presented to the Chicago City Council in support
of the City’s revised M/WBE Procurement Program ordinance;
47 Northern Contracting, Inc. v. Illinois Department of Transportation, 473 F.3d 715 (7 th Cir. 2007) (7 th Cir. 2007)
(“Northern Contracting III”). Dr. Wainwright testified as IDOT’s expert witness at the trial. Ms. Holt authored
IDOT’s DBE goal submission and testified about that document at the trial..
48 This baseline figure of DBE availability is the “step 1” estimate U.S. DOT grant recipients must make pursuant
to 49 CFR §26.45.
49 BAGC v. Chicago, 298 F. Supp.2d 725 (N.D. Ill. 2003).
NERA Economic Consulting 28