In a state where Black and Hispanic people make up one-third of the population, the likelihood that Delaware utilizes women-owned, Hispanic-owned, or Black-owned businesses in government-funded activities is low.
A 2022 study commissioned by the state found a lack of diversity amongst the vendors Delaware contracts with to provide goods, services and skilled labor. It said non-minority, non-women-owned businesses accounted for almost all of the vendors the state uses when conducting state business. This disparity is especially pronounced in construction and construction-related services.
A closer look at the documented disparity shows that Hispanic and Black-owned construction firms represent a little more than 2% of the vendors the state contracts with for construction services with no Black-owned firms providing construction-related services.
The state is taking steps to address the lack of diverse representation in state and federally funded construction projects. In January, Delaware lawmakers revised last year’s historic $1.4 billion bond legislation to allow for pilot projects that aim to increase participation from disadvantaged groups.
Pilot studies to evaluate union labor and DBE participation
In consideration of the disparity study, the “mini-bond,” sponsored by Sen. Jack Walsh, D-Stanton, authorized two state agencies to oversee pilot projects with the purpose of establishing guidelines, hiring goals and evaluating how to boost participation of businesses from disadvantaged community members in construction.
According to Walsh, the pilot studies and subsequent steps are supported to achieve the goal of boosting the involvement of minority-controlled construction companies. “It’s proven that it’s worked. You know, they’ve done this in several other states. They’ve done it in California, they’ve done it in Virginia and they have done it in New Jersey. So we know it works,” Walsh said.
The pilot will entail two agendas: the employment of skilled laborers under a community workforce agreement and a construction project involving a certified disadvantaged business enterprise, commonly referred to as a DBE.
A DBE is defined as a for-profit business certified by the government that at least 51% of the business is owned and operated by someone who is both socially and economically disadvantaged.
Projects in the pilots
The Office of Management and Budget pilot projects will consist of no more than four projects. Three of those projects will require contractors to hire unionized skilled laborers through a community workforce agreement. Those three projects will be:
- Delaware Hospital for the Chronically Ill
- Delaware Department of Natural Resources and Environmental Control (DNREC) Environmental Laboratory
- a state government warehouse that distributes food to the institutionalized
The fourth pilot project will involve the inclusion of a DBE. The company selected for this pilot will renovate the athletic fields at Hodgson Vocational Technical High School as a part of the $134 million plan to replace the existing school building and athletic fields.
In addition to the pilots managed by the Office of Management and Budget, the Delaware Department of Transportation, also known as DelDOT, will also oversee two pilot studies. However, those projects haven’t been identified yet. Last year, DelDOT was authorized to spend $331.4 million on road projects across the state.
Next steps
The Office of Management and Budget and DelDOT will be required to report back to the bond committee with the results from the project for the pilot program annually, Walsh said. “We will see if it works or not,” he said.
Right now, according to Walsh, the community workforce agreement still has to be worked out between state agencies and the labor unions, as well as the guidelines determining the targets for underrepresented community participation and workforce percentages.
So far, Delaware has received $800 million of the $110 billion the federal bipartisan Infrastructure Investment and Jobs Act is investing in roads, bridges and major public works projects.
FURTHER READING:Delaware Legislature passes historic bond bill of $1.4 billion
Reporter Anitra Johnson’s work focuses on actions taken to change, improve, and give back to communities in distress. Contact her at ajohnson@delawareonline.com or 302-379-5786 with tips and story ideas. Follow her on Facebook.
