Disparity in Pennsylvania

BBC used a custom census approach to analyze the availability of diverse businesses that are ready, willing, and able to perform on Commonwealth construction, professional services, and goods and support services prime contracts and subcontracts that DGS awards. BBC’s approach relied on information from extensive surveys that the study team conducted with potentially available businesses located in Pennsylvania that perform work within relevant subindustries. That approach allowed BBC to develop a representative, unbiased, and statistically-valid database of potentially available businesses and estimate the availability of minority-owned businesses, woman-owned businesses, and other diverse businesses in an accurate, statistically valid manner.

This section presents information about the participation of minority-owned businesses, woman-owned businesses, veteran-owned businesses, service-disabled veteran-owned, lesbian/gay/bisexual/transgender (LGBT)-owned businesses, and disabled-owned businesses (referred to collectively as small diverse businesses) in construction; professional services; and goods and support services prime contracts and subcontracts that the Department of General Services (DGS) awarded between July 1, 2011 and June 30, 2016. BBC measured the participation of diverse businesses in Commonwealth contracting in terms of utilization, the percentage of prime contract and subcontract dollars that small disadvantaged businesses received on Commonwealth prime contracts and subcontracts during the study period. For example, if 5 percent of Commonwealth prime contract and subcontract dollars went to non-Hispanic white woman-owned businesses on a particular set of contracts, utilization of non-Hispanic white woman-owned businesses for that set of contracts would be 5 percent.

BBC measured disparities between the participation and availability of diverse businesses for the construction; professional services; and goods and support services prime contracts and subcontracts that DGS awarded during the study period. As part of the disparity analysis, BBC compared the actual participation, or utilization, of diverse businesses in Commonwealth prime contracts and subcontracts with the percentage of contract dollars that those businesses might be expected to receive based on their availability for that work. BBC expressed both actual participation and availability as percentages of the total dollars associated with a particular set of contracts. BBC then calculated a disparity index to help compare participation and availability results across relevant business groups and contract sets using the following formula:

A disparity index of 100 indicates parity between actual participation and availability. That is, participation of a particular business group was largely in line with its availability. A disparity index of less than 100 indicates a disparity between participation and availability. That is, a particular business group was underutilized relative to its availability. Finally, a disparity index of less than 80 indicates a substantial disparity between participation and availability. That is, a particular business group was substantially underutilized relative to its availability.

Overall. Figure 7-2 presents disparity indices for minority- and woman-owned businesses for all relevant prime contracts and subcontracts that DGS awarded during the study period. The line down the center of the graph shows a disparity index level of 100, which indicates parity between participation and availability. Disparity indices of less than 100 indicate disparities between participation and availability (i.e., underutilization). For reference, a line is also drawn at a disparity index level of 80, because some courts use 80 as the threshold for what indicates a substantial disparity.

BBC analyzed the availability of minority- and woman-owned businesses that ready, willing, and able to perform on PennDOT horizontal construction and construction-related engineering and professional services contracts. For overall calculations, BBC examined availability on a contract-by-contract basis and then dollar-weighted the results for different sets of contract elements. Thus, the results of relatively large contract elements contributed more to overall availability estimates than those of relatively small contract elements.

Overall. Figure 5-3 presents overall dollar-weighted availability estimates by relevant business groups for PennDOT contracts. Overall, the availability of minority- and woman-owned businesses for PennDOT’s horizontal construction and construction-related engineering and professional services contracts and procurements is 10.4 percent. Put another way, one might expect minority- and woman-owned businesses to receive 10.4 percent of the contracting and procurement dollars that PennDOT awards. Non-Hispanic white woman-owned businesses (8.2%), Black American-owned business (0.8%), and Hispanic American-owned businesses (0.7%) exhibited the highest availability percentages among all groups.

This section presents information about the participation of minority- and woman-owned businesses in for PennDOT’s horizontal construction and construction-related engineering and professional services contracts and procurements that PennDOT awarded between July 1, 2011 and June 30, 2016. BBC measured the participation of diverse businesses in PennDOT contracting in terms of utilization, the percentage of prime contract and subcontract dollars that firms were awarded on PennDOT prime and subcontracts during the study period. For example, if 5 percent of PennDOT prime contract and subcontract dollars went to woman-owned businesses on a particular set of contracts, utilization of woman-owned businesses for that set of contracts would be 5 percent.

Overall. Figure 6-1 presents the percentage of contracting dollars that minority- and woman-owned businesses received on contracts that PennDOT awarded during the study period (including both prime contracts and subcontracts). As shown in Figure 6-1, overall, minority- and woman-owned businesses considered together received 11.5 percent of the relevant contracting dollars that PennDOT awarded during the study period. Most of those dollars, 7.1 percent, went to certified DBEs (as shown in the bottom panel of Figure 6.1). Non-Hispanic white woman-owned businesses (8.5%) and Hispanic American-owned businesses (0.9%) exhibited higher levels of participation on PennDOT contracts than all other relevant groups.

BBC measured disparities between the participation and availability of relevant business groups for PennDOT’s horizontal construction and construction-related engineering and professional services contracts that PennDOT awarded during the study period. As part of the disparity analysis, BBC compared the actual participation, or utilization, of minority- and woman-owned businesses in PennDOT prime contracts and subcontracts with the percentage of contract dollars that those businesses might be expected to receive based on their availability for that work. BBC expressed both actual participation and availability as percentages of the total dollars associated with a particular set of contracts (e.g. 5% participation compared with 4% availability). BBC then calculated a disparity index to help compare participation and availability results across relevant business groups and contract sets using the following formula:

A disparity index of 100 indicates parity between actual participation and availability. That is, participation of a particular business group was largely in line with its availability. A disparity index of less than 100 indicates a disparity between participation and availability. That is, a particular business group was underutilized relative to its availability. Finally, a disparity index of less than 80 indicates a substantial disparity between participation and availability. That is, a particular business group was substantially underutilized relative to its availability.

Overall. Figure 7-2 presents disparity indices for all relevant prime contracts and subcontracts that PennDOT awarded during the study period. The line down the center of the graph shows a disparity index level of 100, which indicates parity between participation and availability. Disparity indices of less than 100 indicate disparities between participation and availability (i.e., underutilization). For reference, a line is also drawn at a disparity index level of 80, because some courts use 80 as the threshold for what indicates a substantial disparity.

As shown in Figure 7-2, overall, the participation of minority- and woman-owned business in contracts that PennDOT awarded during the study period was largely in line with what one might expect based on the availability of those businesses for that work. The disparity index of 111 indicated that minority- and woman-owned businesses received approximately $1.11 for every dollar that they might be expected to receive based on their availability for the relevant prime contracts and subcontracts that PennDOT awarded during the study period. Disparity analysis results by individual racial/ethnic and gender group indicated that the only group to show a disparity was Black American-owned business (disparity index of 88) [emphasis added], but that disparity was higher than the threshold of being considered substantial. Note that PennDOT used DBE contract goals to award most of its contracts during the study period, so the results presented in Figure 7-2 are reflective of the use of those goals. It is important to examine outcomes for minority- and woman-owned businesses on PennDOT contracts to which such race- and gender- conscious program measures did not apply.