Minority-owned business groups today filed a complaint with the U.S. Department of Transportation alleging the California High-Speed Rail Authority is “largely excluding” those businesses from contracts for the project.
The groups are asking for all federal funding to be halted on the project to connect Sacramento to San Diego by high-speed rail, and for an investigation to be done into the rail authority’s contracting practices.
The civil rights complaint was made to the U.S. Department of Transportation because nearly half of the funding for the more than $40 billion project is expected to come from federal sources.
The authority’s practices “systematically exclude minority-owned businesses,” said Oren Sellstrom, an attorney with the Lawyers’ Committee for Civil Rights of the San Francisco Bay Area, which is representing the business groups in the complaint.
Rail authority spokeswoman Rachel Wall disagreed, saying the authority “is working in cooperation with our state and federal partners to ensure that we’re adhering to state and federal law.”
Frederick Jordan, the president and chairman of the San Francisco African American Chamber of Commerce, one of the groups involved in the complaint, said the high-speed rail project “is one of the most exciting projects of our time, and will usher the state into the 21st century of transportation.”
But “it doesn’t appear to be for all the citizens of California, but for the middle class and a small group of large, established companies,” Jordan said.
Sellstrom said a study done by the lawyers’ committee on the 10 largest design contracts awarded thus far for the project found only about a dozen of the 134 prime and subcontractors are minority-owned firms.
He said the complaint is asking for “aggressive outreach” to be made to minority-owned businesses, “not just the old boys network that knows about contracting opportunities.”
Valerie Martinez, the rail authority’s small business liaison, said in a statement that the “contracts are awarded in a very public and transparent manner by our Board, in public meetings.”
Jordan said one of the problems is that the projects are bundled in such large sections, so it “only allowed a few international firms to go after them…and those firms had no requirements to include minority subcontractors or even small businesses.”
He said only giving the contracts to large companies, many of whom are based outside of the country, defeats the purpose of the stimulus package passed by Congress.
“Minority-owned firms represent those minority communities in various areas of the state, and we cannot have a recovery unless we get some of those recovery dollars down into the community,” Jordan said.
Martinez said the authority is “proud of the diverse and dynamic team of Californians working hard to build this system, and generations of Californians – from every community – will prosper and benefit from it.”
The complaint asks that federal funding of the project be halted until an investigation can be completed into the authority’s contracting practices.
“With billions of dollars at stake, immediate federal government intervention is critical,” Sellstrom said. “We’re really both asking them for looking at their practices to date, and more importantly, make sure barriers to equal inclusion are torn down before more federal dollars flow.”
The California High Speed Rail Board voted last week to construct the first section of the system in the Central Valley. Construction is expected to begin in 2012, and passenger service between the Bay Area and Los Angeles is expected to begin by 2020, according to the rail authority.
Dan McMenamin, Bay City News