Advancing Equity: The Role of Minority‑Owned Contractors in Large‑Scale Public Projects Across the Midwest

I. Introduction

Purpose and Significance

Public infrastructure investment serves as a cornerstone of economic development, facilitating commerce, connecting communities, and enhancing quality of life. Large-scale public projects, such as highways, bridges, transit systems, and airports, represent significant taxpayer expenditures and offer substantial contracting opportunities. Ensuring equitable participation for minority-owned contractors (MOCs) in these projects is not merely a matter of fairness; it is an economic imperative crucial for fostering inclusive growth and addressing historical inequities in public contracting.¹ This report examines the role, challenges, and impact of MOCs in large-scale public projects across the Midwestern United States, focusing on efforts to advance equity. The participation of MOCs can stimulate economic activity within minority communities, creating jobs, building wealth, and contributing to broader regional prosperity.²

Context: Equity in Federal Procurement

The federal government has increasingly emphasized the importance of advancing equity through its procurement activities. Executive Orders 13985 (“Advancing Racial Equity and Support for Underserved Communities Through the Federal Government”) and 14091 (“Further Advancing Racial Equity…”) mandate a whole-of-government approach to identify and redress systemic barriers that limit opportunities for historically underserved and marginalized groups, including people of color.³ This includes leveraging the immense purchasing power of the federal government—overseeing approximately $75 billion in annual contracts through the General Services Administration (GSA) alone ⁵—to create opportunities, support small business growth, and help build generational wealth within these communities.⁷ A specific target has been set to increase the share of federal contract dollars awarded to Small Disadvantaged Businesses (SDBs) to 15% by 2025.⁵ This federal focus provides a backdrop against which state and local efforts in the Midwest operate, particularly for projects receiving federal funding.

Report Scope and Structure

This report provides a comprehensive analysis of MOC participation in large-scale public projects within the 12-state Midwest region. It begins by defining the key terms—Midwest region, minority-owned contractor, large-scale public projects, and advancing equity—within the context of public contracting. Subsequently, it examines the existing policy and programmatic landscape designed to support MOCs, analyzes available data on their current participation rates, and identifies the significant barriers they face. The report then explores successful strategies and interventions implemented in the Midwest to increase MOC involvement, assesses the economic and social impacts of their participation on minority communities, and presents illustrative case studies of major regional projects. Finally, the report synthesizes these findings to offer a comprehensive overview of the current state of equity for MOCs in Midwest public contracting, evaluating the effectiveness of initiatives, persistent challenges, and potential pathways forward.

II. Defining the Landscape: Midwest Public Contracting, Minority Businesses, and Equity

The Midwest Region

Definition: For the purposes of this report, the Midwest region adheres to the definition provided by the U.S. Census Bureau. This region encompasses 12 states: Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.¹⁰ These states are further divided into the East North Central Division (Illinois, Indiana, Michigan, Ohio, Wisconsin) and the West North Central Division (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota).¹⁰

Regional Characteristics: The Midwest, often referred to as the “Heartland,” is characterized by a diverse economy blending heavy industry, agriculture (forming a large part of the U.S. Corn Belt), finance, and increasingly important service sectors like medicine and education.¹² With a population nearing 69 million as of the 2020 Census ¹², the region hosts major metropolitan areas such as Chicago, Detroit, Minneapolis-St. Paul, St. Louis, and Columbus.¹² Its central location makes it a critical transportation crossroads.¹² Demographically, according to 2023 American Community Survey (ACS) 1-year estimates for the region, the population is approximately 72% White (non-Hispanic), 10% Black, 9% Hispanic, 3% Asian, and 4% identifying as two or more races.¹⁸ This demographic context is relevant when considering the availability and participation of minority-owned businesses.

Minority-Owned Contractors (MOCs)

Core Definition: Generally, a minority-owned contractor (MOC) is understood to be a for-profit business concern that is at least 51% owned by one or more individuals who are members of designated minority groups.¹⁹ Crucially, ownership alone is insufficient; the definition typically requires that these minority owners also control the management and daily business operations.¹⁹ This control element is vital to ensure that programs designed to benefit MOCs are not exploited by “front” companies where minority ownership is nominal, but actual control rests with non-minority individuals or entities.²⁴

Specific Program Definitions: The operational definition of an MOC often varies depending on the specific governmental program or certifying body involved. Key definitions relevant to public contracting include:

• Minority Business Enterprise (MBE): This designation is often used by state and local governments and certifying bodies like the National Minority Supplier Development Council (NMSDC). The NMSDC defines minority groups eligible for MBE certification as individuals who are Asian-Indian, Asian-Pacific, Black, Hispanic, or Native American.²² Local programs, such as Chicago’s M/WBE program, may have their own certification processes and criteria.²⁷ Some definitions specify a minimum percentage of minority heritage for the owner (e.g., at least 25% for NMSDC MBE).²²
• Disadvantaged Business Enterprise (DBE): This is a federal program primarily administered through the U.S. Department of Transportation (USDOT) under regulation 49 CFR Part 26, applicable to recipients of federal transportation funds.¹ DBE certification requires that the firm be a small business (meeting Small Business Administration size standards ²⁰) that is at least 51% owned and controlled by individuals who are both socially and economically disadvantaged.²⁰ Certain groups are rebuttably presumed to be socially disadvantaged: Black Americans, Hispanic Americans, Native Americans, Asian-Pacific Americans, Subcontinent Asian Americans, and women.²⁰ Economic disadvantage is assessed via a personal net worth (PNW) cap for the owner(s), excluding equity in their primary residence and the certified firm. This cap has been adjusted over time; sources mention $1.32 million ²² and a more recent figure of $2.047 million cited by Ohio DOT.³³ Specific revenue caps may also apply depending on the funding source (e.g., FAA vs. FHWA/FTA).³³
• Small Disadvantaged Business (SDB): This is a designation primarily used by the Small Business Administration (SBA) for federal contracting purposes government-wide.⁴⁴ Like DBE, it requires 51% ownership and control by socially and economically disadvantaged individuals.⁴⁴ Firms can often self-certify as SDB in the federal System for Award Management (SAM.gov).⁸ However, participation in specific SDB-related programs, like the 8(a) Business Development program, involves a formal SBA certification process with stricter financial criteria, such as a personal net worth limit below $850,000, adjusted gross income under $400,000, and total assets under $6.5 million.²⁰
• Other Related Certifications: Discussions of equity in contracting often intersect with other programs targeting specific groups, which may include MOCs. These include Women-Owned Small Businesses (WOSB) and Economically Disadvantaged WOSBs (EDWOSB) ²⁶, Veteran-Owned Small Businesses (VOSB) and Service-Disabled Veteran-Owned Small Businesses (SDVOSB) ²⁰, businesses located in Historically Underutilized Business Zones (HUBZone) ²⁰, and potentially LGBTQ+-owned businesses.²¹ Some state programs, like Illinois’ Business Enterprise Program (BEP), also explicitly include businesses owned by Persons with Disabilities.⁴⁷

The existence of multiple certifications (MBE, DBE, SDB, WBE, VOSB, etc.), each with its own administering agency (NMSDC, state/local entities, USDOT, SBA) and specific eligibility criteria (minority group definitions, PNW caps, size standards, geographic limitations), creates a complex landscape for contractors.¹⁹ Navigating these different requirements to obtain the necessary certifications for various federal, state, and local contracting opportunities demands significant administrative effort, particularly for small MOCs with limited resources. This fragmentation and complexity may inadvertently function as a barrier, hindering participation by the very firms these programs aim to assist.

Large-Scale Public Projects

Federal Definition: A useful benchmark for defining “large-scale” public projects, particularly in the construction sector, comes from federal regulations related to the use of Project Labor Agreements (PLAs). Under Executive Order 14063 and associated Federal Acquisition Regulation (FAR) updates, a “large-scale construction project” is defined as a federal construction project within the U.S. where the total estimated cost to the federal government is $35 million or more.⁵⁰ This threshold was recently increased from a previous level of $25 million.⁵⁵ While this definition specifically applies to federal projects and PLA requirements, its monetary threshold provides a relevant scale indicator for the significant public works contracts that are the focus of this report.

State/Local Context: State and local governments may not have a uniform definition of “large-scale,” but projects involving substantial investment in public infrastructure fall within the scope. This typically includes major transportation projects like highway construction and reconstruction, bridge building and repair, transit system development (like light rail extensions), and airport modernization programs.²⁹ Large public building construction or renovation and major utility upgrades could also qualify. It is also noteworthy that the Davis-Bacon Act, requiring payment of locally prevailing wages and fringe benefits, applies to federal or federally assisted construction contracts over $2,000, covering virtually all projects of the scale considered here.⁵⁷

Advancing Equity in Public Contracting

Conceptual Framework: The concept of “advancing equity” in the context of government actions, including procurement, is explicitly framed in federal policy, notably Executive Orders 13985 and 14091.³ Equity is defined not simply as equal treatment, but as the “consistent and systematic fair, just, and impartial treatment of all individuals,” with a specific focus on those belonging to underserved communities (such as people of color and others listed in EO 13985) who have been historically denied such treatment and full participation in economic, social, and civic life.³

Goals: The overarching goal is to proactively identify and work to redress inequities embedded in government policies and programs that serve as barriers to equal opportunity.³ This involves a systematic approach to embed fairness in decision-making processes, remove systemic barriers, and create opportunities for historically underserved communities to reach their full potential, ultimately benefiting everyone.³

Application to Contracting: Applied to public contracting, advancing equity translates into deliberate efforts to make government procurement opportunities more readily available and accessible to all eligible vendors, particularly those from underserved groups.⁷ It means ensuring non-discrimination in contract awards and administration ¹, actively working to create a “level playing field” where MOCs and other disadvantaged businesses can compete fairly ¹, and removing barriers that impede their participation.⁴ Procurement becomes a strategic tool not just for acquiring goods and services, but also for addressing documented disparities and fostering economic inclusion.⁶³ This often necessitates a combination of race/gender-neutral strategies (like simplifying processes or unbundling contracts) and, where legally justifiable based on evidence of discrimination, race/gender-conscious measures (like participation goals).¹

It is crucial to recognize that advancing equity differs fundamentally from promoting equality. While equality implies treating everyone identically, equity acknowledges that historical and ongoing systemic disadvantages (explicitly referenced in EO 13985 ⁴ and documented in numerous disparity studies ²⁴) have created an uneven playing field. Therefore, achieving fair outcomes often requires proactive, sometimes targeted, interventions—such as DBE programs, supportive services, or mentorship initiatives—designed specifically to counteract these embedded barriers.¹ An approach based solely on identical treatment might fail to address, and could even perpetuate, existing inequities rooted in historical discrimination.

III. The Policy and Programmatic Environment in the Midwest

The landscape of policies and programs aimed at supporting MOC participation in large-scale public projects across the Midwest is shaped by federal mandates, state-level implementation, and local initiatives, all operating within an evolving legal context.

Federal Framework and Mandates

• USDOT DBE Program (49 CFR Part 26): This is the most prominent federal program directly impacting MOC participation in large transportation projects, as most involve federal funding from the Federal Highway Administration (FHWA), Federal Transit Administration (FTA), or Federal Aviation Administration (FAA). As a condition of receiving these funds, state and local transportation agencies must implement a DBE program compliant with 49 CFR Part 26.¹ Key requirements include:
  • DBE Program Plan: Agencies must develop and maintain an approved DBE program plan outlining their policies and procedures.³⁵
  • Overall Goal Setting: Agencies must set an overall DBE participation goal for their DOT-assisted contracts, typically on a triennial basis. This goal must be based on demonstrable evidence of the availability of ready, willing, and able DBEs in their relevant market, relative to all firms.³⁰ Disparity studies are often commissioned to inform this availability analysis.³⁶
  • Race-Neutral and Race-Conscious Measures: Agencies must meet the maximum feasible portion of their overall goal through race-neutral means (measures that benefit all small businesses, not just DBEs).¹ If the entire goal cannot likely be met through race-neutral means alone, agencies may use race-conscious measures, primarily contract-specific DBE goals on contracts with subcontracting opportunities.¹
  • Good Faith Efforts (GFE): When contract goals are set, prime contractors who fail to meet the goal are not automatically penalized if they can document that they made adequate good faith efforts to obtain DBE participation.³¹
  • Certification: Agencies must participate in or establish a Unified Certification Program (UCP) to provide “one-stop shopping” for DBE certification within the state.²⁹ Certification involves verifying ownership, control, social and economic disadvantage (including PNW limits), and small business size.³³
• SBA Programs: While the DBE program is specific to DOT funding, the Small Business Administration (SBA) oversees several government-wide programs that facilitate small and disadvantaged business participation in federal contracting, which can be relevant for large projects funded by other federal agencies (e.g., GSA, DOD, DOE). These include the 8(a) Business Development program for socially and economically disadvantaged firms ²⁰, HUBZone preferences for businesses in economically distressed areas ²⁰, WOSB/EDWOSB set-asides ²⁶, and SDVOSB preferences.²⁰ The SBA also runs the Mentor-Protégé Program, designed to help eligible small businesses gain capacity and win contracts through partnerships with experienced mentor firms.⁴⁵
• Executive Orders & Goals: As mentioned, recent Executive Orders emphasize advancing equity in federal procurement.³ This translates into agency efforts to increase spending with SDBs (targeting 15% by 2025) ⁵ and utilize tools like GSA’s Procurement Equity Tool and Supplier Base Dashboard to identify diverse vendors and track progress.⁵

Midwest State and Local Initiatives

Midwestern states and major municipalities implement these federal mandates and often supplement them with their own programs.

• State DOT DBE Programs: Each Midwest state DOT operates a DBE program for its federally funded projects. Implementation details, goal levels, and reported success rates vary:
  • Illinois (IDOT): Sets triennial FHWA goals (currently 20.27% for FFY25-27, with specific race-conscious/neutral splits).⁶⁸ However, reports indicate IDOT has historically failed to meet its goals.²⁹ The state uses the IL UCP for certification.²⁹
  • Indiana (INDOT): Operates a DBE program ⁶⁷ but faces legal hurdles after a federal court preliminarily enjoined enforcement of the DBE program’s race/gender presumptions in the state.⁷⁷ Past goals were around 10%.⁷⁹
  • Iowa (Iowa DOT): Sets separate goals for FHWA (5.72% for FFY25) and FAA (5.6% for FFY25-27) funded projects.³⁵ Actively promotes a DBE Business Development Program offering technical assistance and training.⁸⁰
  • Kansas (KDOT): Current goals are 7.62% (FHWA, FFY25-27) and 0.74% (FTA, FFY23-25).³⁷ Offers supportive services like business consulting and training.³⁸
  • Michigan (MDOT): Manages the state’s DBE program.⁸³ Local transit agencies receiving federal funds set their own goals, which can vary significantly based on local markets (e.g., Detroit 11%, Flint 1.5%, Battle Creek 0.0153%).³¹ Michigan uses the MUCP for certification.⁷³ The state also tracks spending with Geographically Disadvantaged Businesses (GDBEs).⁸⁴
  • Minnesota (MnDOT): Sets goals (around 13% mentioned in recent progress report ⁸⁵) and participates in joint state disparity studies.⁸⁶ The Met Council sets specific goals for large transit projects like the Green Line Extension (16% civil, 12% systems).⁴¹
  • Missouri (MoDOT): Current FHWA goal based on a 12.45% availability finding from recent studies.³⁶ A separate state program aiming for 10% MBE spend has rarely met its target.⁶⁶ Uses the MRCC for certification.³⁶
  • Ohio (ODOT): Manages a DBE/ACDBE program ³³ amidst significant state investment in transportation ($2.8B in new projects in FY24).⁸⁷ Maintains the Ohio Unified DBE Directory.³³
  • Wisconsin (WisDOT): Sets goals across modes: Transit (1.61% for FFY23-25) ³⁴, Highways, and Airports (goals vary by airport, e.g., 1.6% to 5.1%).⁴³ Uses the WI UCP.⁶⁹ The City of Madison set a relatively high goal of 17.89% for FFY25-27.⁶⁹
• State/Local M/WBE/BEP Programs: Beyond transportation, many states and cities have broader programs for minority, women, and sometimes other disadvantaged groups (veterans, persons with disabilities) covering general state/local procurement.
  • Illinois BEP: A prominent example, applying a 30% aspirational goal for spending with certified Minority, Women, and Persons with Disabilities-owned businesses across state agencies and public universities.⁴⁷ Despite significant growth in the dollar amount subject to the goal ($14.1B in FY22 to $33.3B in FY24) and the number of certified vendors (reaching over 5,000), the percentage achievement has declined (8.2% in FY22 to 5.5% in FY23).⁴⁸ FY24 spend was $1.31B.⁴⁷
  • Chicago/Cook County: Chicago has a long-established M/WBE program requiring city certification.²⁷ Cook County also has an M/WBE ordinance with specific goals for Goods/Services, Construction, and Professional Services (e.g., 24-25% MBE, 10% WBE).⁸⁹ Both entities utilize disparity studies to support their programs.⁹⁰
  • Other Examples: Cuyahoga County, Ohio, uses disparity study findings to implement MBE/WBE policies, including contract-specific goals and certification processes.⁹¹ Milwaukee previously had a race-conscious program (Chapter 370) but suspended it following legal challenges and analysis showing limited impact specifically for Black-owned firms.⁹² Michigan tracks spending with GDBEs, a geographically based designation.⁸⁴
• Certification: The prevalence of Unified Certification Programs (UCPs) in states like Illinois, Michigan, Missouri, and Wisconsin aims to simplify the DBE certification process for DOT-funded work.²⁹ However, businesses may still need separate certifications for non-DOT state programs (like Illinois BEP) or city-specific programs (like Chicago M/WBE), potentially increasing administrative burdens.⁹ Efforts to make diverse certifications more interoperable across jurisdictions could reduce friction for MOCs.⁹

The Role of Disparity Studies and Legal Context

• Justification for Programs: Disparity studies play a critical role in the legal justification of race- and gender-conscious contracting programs (like setting DBE or M/WBE goals). Following landmark Supreme Court cases (City of Richmond v. J.A. Croson Co. and Adarand Constructors v. Peña), such programs are subject to “strict scrutiny”.⁷⁵ To survive this high legal standard, governments must demonstrate a “compelling interest” (typically, remedying identified past or present discrimination within their specific market) and show that the program is “narrowly tailored” to address that discrimination.¹ Disparity studies provide the evidentiary basis by comparing the percentage of contract dollars awarded to MOCs (utilization) with the percentage of MOCs available, willing, and able to perform the work in the relevant geographic and industry market (availability).²⁴ Significant underutilization relative to availability is considered evidence of disparity, potentially justifying remedial measures. Numerous Midwest entities have commissioned such studies.³⁶
• Recent Legal Challenges: The legal landscape for these programs is currently tumultuous. A significant development impacting the Midwest is the Mid-America Milling Co., LLC v. U.S. Department of Transportation case, where a federal district court in Kentucky issued preliminary injunctions blocking the enforcement of the federal DBE program’s rebuttable presumption (that members of certain racial groups and women are socially disadvantaged) in Kentucky and Indiana.⁷⁷ The court found the plaintiffs were likely to succeed on their claim that this race- and gender-based presumption violates the Equal Protection Clause, arguing the government failed to provide sufficient evidence of specific, localized discrimination justifying the presumption and that the program wasn’t narrowly tailored.⁷⁸ Similar challenges have targeted the SBA’s 8(a) program and other federal initiatives.⁷⁵

The ongoing legal battles cast a shadow of uncertainty over DBE and similar M/WBE programs nationwide, including the Midwest. Agencies, facing the threat of litigation and the high bar of strict scrutiny, may become increasingly hesitant to rely on race- and gender-conscious measures like contract goals, even where disparity studies demonstrate significant underutilization of MOCs.¹⁰⁰ This could accelerate a shift towards emphasizing race-neutral strategies—such as small business set-asides (which are generally permissible ⁴²), process streamlining, technical assistance, and prompt payment enforcement ²⁴—as the primary means of promoting equity. While these race-neutral approaches are valuable components of any comprehensive strategy, a critical question arises: can they, on their own, effectively remedy the deep-seated disparities rooted in historical and potentially ongoing discrimination that disparity studies continue to uncover?²⁴ If race-conscious tools become legally unavailable or practically unusable due to litigation risk, achieving meaningful equity in public contracting may become substantially more challenging.

IV. Participation of Minority-Owned Contractors: Goals vs. Reality

Assessing the role of MOCs requires examining their actual participation levels in comparison to established goals and overall market availability. Data reveals persistent gaps and disparities, even within the context of established support programs.

National Context (Construction Employment)

Understanding the broader construction labor force provides context. National data from 2020 shows interesting patterns in racial and ethnic representation among construction employees.¹⁰¹ Hispanic workers constituted 30.0% of the construction workforce, significantly higher than their 17.6% share of total U.S. employment. Conversely, Black workers were underrepresented, holding 5.1% of construction jobs compared to 11.8% of total employment. Asian workers were also underrepresented at 1.8% versus 6.2% nationally.¹⁰¹ Furthermore, a large share of Hispanic (67.7%) and Asian (62.5%) construction workers were foreign-born, compared to only 16.7% of Black construction workers and 4.8% of non-Hispanic White construction workers.¹⁰¹

The significant presence of Hispanic workers in the construction trades stands in stark contrast to findings from numerous disparity studies regarding the utilization of Hispanic-owned businesses in government contracting. A major meta-analysis by the Urban Institute found that Latino-owned firms received only 44 cents for every dollar they would be expected to receive based on their availability in the marketplace.²⁴ This disconnect suggests that having a substantial labor pool from a particular demographic group does not automatically translate into proportional success for businesses owned by members of that group in securing public contracts. It points towards significant barriers operating at the level of business ownership, firm development, and the contracting process itself—such as access to capital, bonding, network inclusion, or discrimination—that prevent workforce representation from converting into equitable contracting outcomes.²⁴

Midwest Performance Analysis

Analysis of available data from Midwest states and major cities reveals a common pattern: actual participation rates for MOCs frequently fall short of the aspirational or mandated goals set by public agencies.

• Goal Achievement Gaps:
  • Illinois: IDOT has consistently struggled to meet its federal DBE goals. In FFY22, reported participation was 15.83%, significantly below the 20.27% goal.²⁹ The state’s broader BEP program also saw achievement drop from 8.2% in FY22 to 5.5% in FY23, despite increases in total spending subject to goals and the number of certified vendors; this was attributed to factors like the rapid growth in the denominator (total spending), shifts in procurement patterns, and exemptions.⁴⁸
  • Missouri: The state has only achieved its 10% MBE participation goal for overall state agency spending four times in the last 30 years.⁶⁶ In FY21, MBEs received 8.2% and WBEs received 3.5% of $1.5 billion in state contracts.⁶⁶ MoDOT’s specific DBE goals are based on availability studies, with the most recent base figure calculated at 12.45%.³⁶
  • Indiana: The Indianapolis Public Transportation Corporation (IPTC/IndyGo) reported meeting its 10% DBE goal in three out of five years (2017-2021), with a median achievement of 11.2% over that period.⁷⁹ They set a 12% goal for FY23-25, adjusting downward from a higher calculated availability figure due to the specifics of upcoming large projects like the Blue Line BRT.⁷⁹
  • Minnesota: A MnDOT progress report for active large projects (>$30M) showed current DBE payments at 11.7%, compared to a 12.7% commitment level and a 13.0% overall goal for those projects.⁸⁵ The METRO Green Line Extension project has specific goals of 16% (civil) and 12% (systems).⁴¹
  • Michigan: Performance varies. State-level spending with Geographically Disadvantaged Businesses (GDBEs) reached 14.64% in FY24, exceeding the goal.⁸⁴ However, local transit agency DBE goals are often very low (e.g., Flint MTA 1.5%, Battle Creek Transit 0.0153%), sometimes justified by limited local DBE availability for specific needs.³¹ Detroit DDOT’s goal was 11% for FY21-23.³²
  • Wisconsin: State transit goal is 1.61% (FFY23-25).³⁴ Airport goals range from 1.6% to 5.1%.⁴³ City of Madison set a 17.89% goal for FFY25-27.⁶⁹
  • Kansas: KDOT goals are 7.62% (FHWA) and 0.74% (FTA).³⁷ The Kansas City Area Transportation Authority (KCATA) set a notably high goal of 24.4% for FFY24-26.³⁹
  • Cook County, IL: Reported awarding 32% of contract commitments to M/WBEs in FY2022, but actual payments to M/WBEs constituted only 9% of total contract payments that year.⁸⁹ This highlights a potential discrepancy between initial awards/commitments and final payouts.

Table 1: Recent M/W/DBE Goals vs. Actual Participation in Select Midwest Jurisdictions

(Note: Data availability, reporting periods, and program specifics vary. This table provides illustrative examples based on available snippets.)

Evidence of Disparities

Beyond goal achievement, formal disparity studies consistently find evidence that MOCs receive a smaller share of public contract dollars than would be expected based on their availability in the marketplace.

• Quantitative Disparity: The Urban Institute’s synthesis of numerous state and local disparity studies concluded that, nationally, minority-owned businesses as a group received only 57 cents for every dollar they should have received based on availability.²⁴ Disparities were found for all major groups: African American-owned firms (49 cents on the dollar), Latino-owned (44 cents), Asian-owned (39 cents), Native American-owned (18 cents), and women-owned businesses (29 cents).²⁴ Studies within the Midwest region often reflect these national trends. For example, Missouri’s 2014 study found “extensive evidence that discrimination on the basis of race and gender continues to operate in Missouri’s markets”.⁶⁶ A study for Madison, WI, found that while its Small Business Enterprise (SBE) program likely improved utilization, underlying disparities for minority- and women-owned firms probably persisted.⁹⁵ A Milwaukee study showed significant underutilization of Black-owned construction firms.⁹² A study for WMATA (serving DC, MD, VA, relevant for comparison) found M/WBE utilization (23%) was less than half their availability (48%).⁹⁴
• Qualitative Evidence: Disparity studies typically supplement quantitative analysis with qualitative data from interviews, focus groups, surveys, and public testimony.⁹⁰ This anecdotal evidence often corroborates statistical findings, documenting MOCs’ experiences with barriers such as difficulty accessing capital and bonding, exclusion from informal business networks (“good old boy” systems), burdensome administrative processes, contract bundling issues, payment delays, and instances of perceived or overt discrimination.⁹⁰

The consistent finding of significant disparities across numerous jurisdictions and over time, even in places with long-standing M/W/DBE programs, strongly suggests that these programs, while potentially beneficial, have not been sufficient to fully counteract the effects of historical disadvantages and ongoing systemic barriers. The persistence of these gaps indicates that achieving true equity requires more than just the existence of a program; it demands robust implementation, effective enforcement, and strategies that address the root causes of disparity, including potential discrimination in the broader marketplace.²⁴

V. Navigating the Obstacles: Barriers Faced by Minority Contractors

Minority-owned contractors seeking to participate and succeed in large-scale public projects encounter a complex web of interconnected barriers that hinder their formation, growth, and ability to compete effectively.

Financial Hurdles

• Access to Capital: This is consistently identified as a primary obstacle.² MOCs, often stemming from communities with less generational wealth due to historical factors ², frequently lack the necessary financial capital to fund startup costs, purchase equipment, cover payroll during project execution, manage cash flow fluctuations, and finance growth.²⁴ This can be compounded by difficulties in accessing traditional business loans, potentially due to weaker financial histories, lack of collateral, or discriminatory lending practices.²⁴ A survey of Black-owned businesses in Detroit specifically highlighted unmet needs for formal bank funding and small-dollar loans (often receiving only half of what was requested), forcing reliance on personal funds or credit cards.¹⁰²
• Bonding Requirements: Securing surety bonds (bid bonds, performance bonds, payment bonds) is a standard requirement for public construction contracts, serving as a financial guarantee for the contracting agency.²⁴ However, obtaining bonding can be exceptionally difficult for MOCs, especially smaller or newer firms.⁶⁴ Bonding capacity is heavily influenced by a firm’s financial health, track record, and available capital/assets—areas where MOCs often face disadvantages.⁹² The inability to secure adequate bonding effectively bars firms from bidding on many large public projects, regardless of their technical capability.⁹²

Operational Challenges

• Capacity and Scale: Large-scale public projects demand significant operational capacity in terms of workforce size and skill, specialized equipment, project management expertise, and financial stability to handle complex logistics and potential delays.⁴⁰ Minority-owned firms tend to be smaller on average than non-minority firms in terms of both employees and revenue.²⁴ This size disparity makes it challenging for many MOCs to meet the pre-qualification requirements or successfully execute work as prime contractors on major projects.⁹² They may be better positioned for subcontracting roles, but even those can be substantial on large projects.
• Administrative Burdens: The process of competing for and managing public contracts involves significant administrative overhead. This includes navigating complex certification requirements across different agencies (federal DBE, state MBE, local WBE, etc.) ⁹, preparing detailed and often lengthy bid proposals ⁶⁴, understanding intricate contract specifications and compliance rules ⁶⁴, and managing extensive documentation and reporting requirements (e.g., payroll reporting, DBE utilization tracking).³¹ These administrative tasks can disproportionately burden smaller MOCs with limited back-office staff and resources.
• Contract Bundling: Government agencies sometimes “bundle” multiple smaller work components into a single large contract package.²⁴ While potentially offering administrative efficiencies for the agency, this practice can effectively exclude smaller firms, including many MOCs, who lack the capacity or bonding to bid on the entire package as a prime contractor.²⁴ Even if subcontracting opportunities exist within the bundle, the prime contractor controls access to them.

Market Access Issues

• Networking Limitations: The construction industry often relies heavily on established relationships and informal networks for information sharing, teaming arrangements, and subcontracting opportunities.²⁴ MOCs may face difficulties penetrating these networks, which are frequently dominated by long-standing majority-owned firms and can operate as “good old boy” systems.²⁴ This limited access restricts their visibility to prime contractors and agencies, hindering their ability to learn about upcoming projects and secure work. The Detroit survey confirmed a need among Black-owned businesses for stronger connections to minority supplier and procurement opportunities.¹⁰²
• Discrimination: Despite legal prohibitions, evidence suggests that discrimination based on race and gender persists in the construction marketplace and contracting processes.¹ This can range from overt prejudice to more subtle biases, such as prime contractors being reluctant to use unfamiliar MOCs, subjecting them to heightened scrutiny, perceiving them as higher risk, or only engaging them when required to meet diversity goals.⁹² Disparity studies often capture anecdotal accounts of such experiences.⁹⁰ Addressing this requires ongoing vigilance and enforcement, though proving specific instances of discrimination sufficient to meet legal standards can be challenging.⁷⁸
• Prime Contractor Practices: The practices of prime contractors significantly influence MOC participation, particularly at the subcontracting level. Issues can arise if primes make minimal efforts to meet MOC goals and easily obtain waivers ²⁴, engage MOCs only for superficial participation rather than meaningful work (failing the “Commercially Useful Function” test) ⁶⁷, or, in fraudulent cases, use MOCs as “pass-throughs” or fronts.²⁴ Effective oversight and enforcement by contracting agencies are crucial to mitigate these issues.

Systemic Issues

• Prompt Payment Delays: Perhaps one of the most critical systemic issues impacting MOC subcontractors is the delay in receiving payments from prime contractors.⁹ Even when MOCs complete their portion of the work satisfactorily, primes may withhold payment (including retainage) until they receive final payment from the public agency, which can be months or even years later.⁷⁴ These delays severely strain the cash flow of smaller MOCs, who often operate with tighter margins and less access to working capital.⁹ While federal DBE regulations mandate prompt payment clauses requiring payment within a set timeframe (e.g., 30 days) after the prime is paid for the subcontractor’s work, and also require prompt release of retainage ³⁴, enforcement can be inconsistent. Policies like Los Angeles County’s 15-day payment turnaround for small businesses ⁶² or Chicago Public Schools’ focus on improving payment timing ⁷² represent efforts to address this critical barrier.

These barriers do not exist in isolation; they are deeply interconnected and often reinforce one another. Limited access to capital directly impacts a firm’s ability to secure bonding and invest in the capacity needed for larger projects.⁹² Exclusion from established networks limits opportunities to build a track record and gain the experience that lenders and surety companies look for.²⁴ Experiences with discrimination can discourage firms from pursuing public contracts altogether. Crippling payment delays exacerbate the cash flow problems stemming from inadequate initial capital.⁹ Consequently, efforts to advance equity in public contracting cannot effectively focus on just one barrier. A holistic approach is necessary, simultaneously addressing access to finance, operational capacity building, market access, and systemic issues like prompt payment to create meaningful change.

VI. Building Bridges: Successful Strategies and Interventions

Despite the significant barriers, various strategies and interventions have been implemented across the Midwest and nationally to enhance the participation and success of MOCs in large-scale public projects. These range from targeted programmatic support to broader policy reforms.

Effective Programmatic Approaches

• Mentorship Programs: These programs pair experienced firms (mentors) with less experienced MOCs (protégés) to provide guidance, technical assistance, and relationship-building opportunities.
  • SBA Mentor-Protégé Program (MPP): This federal program allows approved mentors to provide various forms of assistance (technical, managerial, financial, contracting) to eligible small business protégés.⁴⁵ A key benefit is the ability for mentors and protégés to form joint ventures (JVs) that can compete for federal small business set-aside contracts, including those designated for 8(a), SDVOSB, WOSB, and HUBZone firms, leveraging the protégé’s eligibility and the mentor’s capacity.⁴⁵ The program requires SBA approval of the Mentor-Protégé Agreement (MPA) and annual evaluations to ensure the protégé receives meaningful developmental benefits.⁷⁶ The program was streamlined in 2020 by merging the previous 8(a) and All Small MPP initiatives.⁷⁶
  • Private Sector and Local Initiatives: Construction companies and industry groups also run mentorship programs. JE Dunn’s Minority Contractor Development (MCD) Program, for example, provides a structured curriculum covering business and leadership skills, facilitates networking with JE Dunn personnel, offers mentoring relationships, and aims to pre-qualify graduates for work on JE Dunn projects.¹⁰⁷ The Associated General Contractors (AGC) also promotes mentorship concepts.¹⁰⁸ These initiatives can provide valuable industry-specific knowledge and direct connections to potential contracting opportunities.
• Joint Venture Facilitation: JVs allow MOCs to partner with larger, more established firms to pursue contracts that would be unattainable on their own due to size, bonding, or experience requirements.¹⁰⁹ This structure allows for shared risk, resources, and governance, enabling the MOC partner to gain valuable experience on larger projects.¹⁰⁹ The SBA’s MPP explicitly supports JV formation.⁷⁶ Successful JVs depend on clear definition of roles, mutual trust, and cultural compatibility between the partners.¹⁰⁹ It’s important to distinguish JVs, which involve shared ownership and risk for a specific project, from simpler teaming agreements where one firm acts as a subcontractor to another.¹⁰⁹ The MGM Center City development project provides an example where a JV structure was used, incorporating support from the National Association of Minority Contractors (NAMC) to meet diversity objectives.¹⁰⁹
• Technical Assistance Programs: Various programs offer direct support to MOCs to build their business acumen and technical capabilities. The Iowa DOT’s DBE Business Development Program is a good example, providing services such as assistance with the DBE certification process, help identifying and navigating bid opportunities, bid preparation support, marketing strategy guidance, training workshops, and networking events.⁸⁰ The FHWA provides specific resources and training materials to help DBEs navigate the complexities of alternative contracting methods like design-build.¹¹⁰ Additionally, SBA’s network of resource partners, including Small Business Development Centers (SBDCs), SCORE mentors, Women’s Business Centers (WBCs), and Veterans Business Opportunity Centers (VBOCs), offer counseling and training to small businesses at various stages.⁴⁵

Policy Innovations and Best Practices

Beyond direct firm support, policy adjustments and process improvements can create a more equitable contracting environment.

• Race-Neutral Measures: These policies aim to improve access and reduce barriers for all small businesses, thereby disproportionately benefiting MOCs who are more likely to be small. Effective race-neutral strategies include:
  • Unbundling Contracts: Actively breaking down large contracts into smaller, more manageable scopes of work makes it feasible for smaller firms to bid as primes.⁶⁴
  • Streamlining Processes: Simplifying procurement procedures, reducing the complexity of applications and bid documents, providing clear instructions and centralized guidance (e.g., via websites or dedicated staff), and using user feedback to identify and eliminate bureaucratic hurdles can lower the cost and effort of participation.³ Chicago’s “Cut the Tape” initiative aims to streamline development processes, including those related to city contracting.¹¹²
  • Prompt Payment Enforcement: Establishing clear contractual requirements for timely payment from primes to subs (including retainage release) and rigorously enforcing these requirements through monitoring and penalties is critical for subcontractor financial stability.⁹ Replacing physical checks with electronic transfers can speed payments.⁶⁴
  • Reducing Onerous Requirements: Evaluating and potentially lowering excessive bonding or insurance requirements for lower-risk projects, or exploring alternative risk management strategies, can open doors for firms with limited financial capacity.⁶⁴
  • Adjusting Thresholds: Raising the dollar threshold below which agencies can make direct, non-competitive awards to certified M/WBEs (as done in New York City ⁶²) can provide easier entry points for smaller contracts.
  • Shareable/Cooperative Contracts: Designing contracts with language allowing other public entities to “piggyback” or utilize the same contract reduces redundant bidding processes for firms and agencies, lowering costs for suppliers who have already won a contract.⁹
• Targeted Outreach and Goal Setting (Race-Conscious Elements): Where legally permissible and justified by disparity data, targeted efforts remain important.
  • Proactive Outreach: Agencies should move beyond passive notification and actively conduct market research to identify potential MOC bidders for specific opportunities, engaging in targeted outreach to encourage their participation.⁶³ Holding matchmaking events or strategic pre-bid meetings can facilitate connections between primes and potential MOC subcontractors.⁶³ Making outreach a core function of the procurement office is key.⁶⁴
  • Effective Goal Setting: When using contract-specific goals, they should be based on robust, current data on the availability of qualified MOCs for the specific types and sizes of work involved in the contract, often derived from disparity studies.³⁰ Weighting availability by NAICS code based on the project’s spending distribution enhances precision.⁶⁸
  • Compliance Monitoring and Enforcement: Rigorous monitoring is essential. This includes carefully evaluating prime contractors’ Good Faith Efforts (GFE) when goals are not met ³¹, ensuring MOCs listed are actually performing a Commercially Useful Function (CUF) and not just acting as pass-throughs ⁶⁷, and having clear procedures for addressing non-compliance and handling appeals.⁷²

The most promising path towards equity appears to involve a synergistic application of both targeted, race-conscious strategies (where legally viable and evidence-based) and comprehensive race-neutral reforms. Targeted programs like mentorship and technical assistance can directly address specific capacity gaps faced by MOCs.⁷⁶ Race-conscious goals, when narrowly tailored and based on solid disparity evidence, can provide a direct incentive for inclusion.⁷² Simultaneously, robust race-neutral measures—such as simplifying processes, unbundling contracts, and ensuring prompt payment—improve the fundamental contracting environment for all small businesses, lowering systemic barriers that disproportionately affect MOCs.⁹ Relying solely on race-neutral approaches may fail to overcome specific discriminatory barriers or historical disadvantages documented in disparity studies ²⁴, while relying solely on race-conscious goals faces increasing legal vulnerability ⁷⁸ and may not address underlying capacity issues. A combined approach offers the best potential for sustainable progress.

Role of Support Organizations

External organizations play a vital role in supporting MOCs and advancing equity initiatives.

• Industry Associations: Groups like the Associated General Contractors (AGC) engage in diversity and inclusion efforts, such as the “Culture of CARE” initiative aimed at creating more welcoming and respectful worksites.¹⁰⁸ They host forums and roundtables for members to share best practices ¹⁰⁸ and offer awards recognizing D&I excellence and diverse businesses.¹¹³ AGC’s efforts often link diversity to addressing industry-wide labor shortages.¹⁰⁸
• Advocacy and Certification Groups: Organizations like the NMSDC and its regional affiliates (e.g., Mid-States MSDC serving parts of Illinois, Indiana, and Missouri ¹¹⁵) are crucial intermediaries. They certify MBEs, connect them with corporate and public sector procurement opportunities through events and databases, provide business development support, and advocate for supplier diversity policies.²² The federal Minority Business Development Agency (MBDA) also plays a key role in supporting MBE growth and competitiveness.⁴⁵
• Community-Based Organizations (CBOs): Local CBOs can be valuable partners in outreach efforts, connecting agencies and prime contractors with MOCs in specific communities, assisting with workforce development linkages, and potentially playing a role in monitoring and accountability.¹⁰⁵

VII. Impact on Minority Communities: Economic and Social Contributions

The participation of minority-owned contractors in large-scale public projects generates significant economic and social benefits that extend beyond the individual firms, contributing positively to minority communities and the broader regional economy.

Economic Engine

• Job Creation: MOCs are vital job creators, particularly within the communities where they are located and operate.² As MOCs secure contracts and grow, they hire employees, often drawing from local labor pools which may include higher proportions of minority residents facing employment barriers.² Nationally, NMSDC-certified MBEs were credited with creating or sustaining over 1 million jobs in 2023.¹¹⁶ Research suggests that if Black-owned businesses achieved employment levels proportional to their representation among all firms, nearly 600,000 new jobs could be created nationally, adding $55 billion to the U.S. economy.² Large public projects themselves are major job generators (e.g., O’Hare Modernization’s projected regional impact ⁶⁰), and ensuring MOC participation helps channel these employment benefits towards minority communities.
• Revenue Generation and GDP Contribution: MOCs contribute significantly to economic output. NMSDC-certified MBEs, for instance, generated $363.6 billion in annual revenue in 2023, demonstrating a growth rate (15%) more than double that of the overall U.S. GDP (6.3%) during the same period.¹¹⁶ This indicates strong performance and resilience. Public projects represent massive spending (e.g., Ohio DOT’s $4 billion annual enterprise ⁸⁷, Chicago’s O’Hare 21 program estimated at $12.1 billion ¹¹⁹), and MOC participation allows minority firms to capture a share of this substantial economic activity, driving revenue growth for the firms themselves.¹¹⁶
• Local Economic Development: The economic impact of MOCs ripples through the local economy. Successful MOCs purchase goods and services from other local businesses (suppliers, professional services, etc.), creating secondary economic activity.¹¹⁶ Furthermore, the wages paid to MOC employees are often spent within their local communities on housing, groceries, healthcare, and other necessities, supporting jobs in various other sectors.² This recirculation of funds strengthens the local economic base.

Wealth Generation

• Business Growth and Value: Securing and successfully executing public contracts enables MOCs to build their track record, increase revenue streams, expand their operations, and enhance the overall value of their businesses.¹¹⁶ This growth is essential for long-term sustainability and competitiveness.
• Closing Wealth Gaps: Business ownership is a powerful engine for wealth accumulation.² Studies show that Black business owners, for example, tend to have significantly higher net worth than their non-business-owning peers, and business ownership facilitates faster wealth growth compared to wage employment.² Given the persistent and substantial racial wealth gaps in the United States, often linked to historical discrimination and exclusion from wealth-building opportunities ², fostering successful minority entrepreneurship through avenues like public contracting is a critical strategy for building individual and generational wealth within minority communities.²

Community Development

• Strengthening Neighborhoods: MOCs are often deeply rooted in the communities they serve.² By providing local jobs, supporting other local businesses, and contributing to the tax base, they play a role in stabilizing and revitalizing neighborhoods, particularly underserved minority communities.² Their presence can enhance the commercial fabric and overall vitality of these areas.
• Role Models and Social Capital: Successful minority entrepreneurs serve as important role models, demonstrating pathways to economic achievement and inspiring others within the community.¹²¹ Their success can also contribute to building social capital by strengthening business networks and fostering community leadership.
• Increased Civic Participation: Economic empowerment achieved through successful business ownership can often lead to greater involvement in civic affairs and community leadership, giving minority communities a stronger voice in shaping local policies and priorities.

The impact of MOC participation in public projects is amplified beyond the direct value of the contracts they receive. A clear multiplier effect is at play: MOCs create direct jobs within their firms, support indirect jobs through their supply chains, and induce further economic activity as their employees spend earnings locally.¹¹⁶ Concurrently, their success contributes to closing persistent wealth gaps ² and strengthening the social and civic fabric of minority communities.⁶⁵ Therefore, policies and programs designed to increase MOC participation should be viewed not just as measures to ensure fairness or remedy past discrimination, but as strategic investments in broader economic development and community well-being with far-reaching positive consequences.

VIII. Midwest in Focus: Case Studies of Large-Scale Projects

Examining specific large-scale public projects undertaken in the Midwest provides concrete examples of how equity goals and strategies are implemented, the opportunities created for MOCs, and the challenges encountered.

Gordie Howe International Bridge (Detroit, Michigan / Windsor, Ontario)

• Project Scope: A major, multi-billion dollar international crossing connecting Detroit, Michigan, and Windsor, Ontario, including the bridge itself, ports of entry on both sides, and connections to the I-75 freeway in Michigan.⁵⁸ This represents a significant, long-term infrastructure investment.
• Equity Components: The project incorporates a detailed Community Benefits Plan, developed through extensive public and stakeholder consultation between 2015 and 2019.⁵⁸ This plan includes workforce development strategies targeting local residents in Windsor/Essex County and Detroit, as well as Canadian Indigenous Peoples.⁵⁸ Crucially for this report, it establishes a specific Disadvantaged Business Enterprise (DBE) goal of 2.15% applicable to the U.S. portion of the project (the Michigan Interchange and the section of the bridge in Michigan).⁵⁸ The plan also includes business outreach components like B2B information sessions and an online portal for local businesses to register their capabilities.⁵⁸
• Analysis: This case highlights the integration of DBE participation goals within a broader, bi-national community benefits framework. The 2.15% DBE goal is relatively modest compared to overall goals set by some state DOTs; this might reflect a specific availability analysis for the highly specialized work involved, the complexities of cross-border contracting, or other factors unique to the project. The explicit inclusion of workforce and local/Indigenous business engagement demonstrates a holistic approach to leveraging the project for socio-economic benefits beyond just the physical infrastructure.

O’Hare Modernization Program (OMP) / O’Hare 21 (Chicago, Illinois)

• Project Scope: A massive, multi-phase, multi-billion-dollar program ($8B initially for OMP, now estimated at $12.1B for O’Hare 21) aimed at reconfiguring and expanding Chicago O’Hare International Airport, one of the world’s busiest.⁶⁰ Components include building new runways (e.g., 9C-27C, completed 2020) and extending existing ones ¹¹⁹, constructing new terminals (e.g., Terminal 5 expansion, future Global Terminal) ¹¹⁹, and developing extensive support facilities like the consolidated rental car Multimodal Facility (MMF) ¹²⁵, deicing pads ¹²⁴, and relocating existing infrastructure.¹²⁴ The program spans decades and involves numerous large contracts.
• Equity Components: As a City of Chicago undertaking, the projects fall under the purview of the City’s long-standing Minority and Women-owned Business (M/WBE) Procurement Program, which requires city certification and typically sets participation goals on contracts.²⁷ Federally funded components would also be subject to DBE/ACDBE requirements. While the potential for M/WBE participation is immense given the project scale, specific overall participation goals or achievement data for the OMP/O’Hare 21 program as a whole are not readily available in the provided materials.⁶⁰ Notably, the recently completed Midway Airport Modernization Program reported achieving a very high Airport Concessions DBE (ACDBE) participation rate of 56% ¹²⁶, suggesting that successful strategies for diverse firm inclusion exist within the Chicago Department of Aviation’s contracting framework, though concessions differ from construction.
• Analysis: O’Hare represents the enormous scale of opportunity available on public megaprojects. The lack of easily accessible, consolidated M/WBE participation data for such a prominent and long-running program points to a potential challenge in transparency and tracking overall equity outcomes across numerous complex contracts managed over many years. The high ACDBE rate achieved at Midway offers a positive benchmark and suggests investigating the specific strategies used there could yield transferable lessons for construction contracting at O’Hare.

Minneapolis METRO Green Line & Blue Line Extensions (Minneapolis, Minnesota)

• Project Scope: These are major Light Rail Transit (LRT) expansion projects extending service from Minneapolis into surrounding suburbs.⁴¹ The Southwest LRT (Green Line Extension) and the planned Blue Line Extension involve extensive civil construction (tracks, tunnels, bridges), systems installation (signals, power), and station construction.
• Equity Components: The Metropolitan Council, the regional governing body overseeing the projects, implements the federal DBE program.⁴¹ Specific DBE goals are set for major contracts based on analysis of work types, regional DBE availability, and past performance; for the Green Line Extension, these were set at 16% for the civil construction contract and 12% for the systems contract.⁴¹ The Council emphasizes compliance monitoring, including site visits and good faith effort reviews, and has established advisory committees involving DBEs.⁴¹ Planning for the Blue Line Extension explicitly incorporates community equity concerns beyond contracting, such as anti-displacement strategies for residents and businesses near the new line, and ensuring transit-oriented development supports neighborhood needs.⁶¹
• Analysis: These transit projects exemplify the application of DBE goals in a major urban infrastructure context within the Midwest. They also demonstrate a growing trend of linking large infrastructure investments with broader community equity goals, recognizing that projects impact neighborhoods in multiple ways beyond just the construction phase. The Met Council’s approach involves setting distinct goals for different contract types (civil vs. systems), reflecting differing subcontracting opportunities and DBE availability in those sectors.

Jane Byrne Interchange Reconstruction (Chicago, Illinois)

• Project Scope: A complex, multi-year reconstruction of the Circle Interchange (now Jane Byrne Interchange), where major expressways (I-90/94, I-290) converge near downtown Chicago.¹³⁴ The project, managed primarily by the Illinois Department of Transportation (IDOT), involves rebuilding ramps, bridges, and mainline sections to improve safety and reduce congestion in one of the nation’s most critical highway bottlenecks.
• Equity Components: As a major IDOT project involving federal funds, contracts within the Jane Byrne Interchange reconstruction are subject to IDOT’s DBE program requirements, including participation goals.²⁹ Specific examples confirm goal setting on related contracts; for instance, a contract for construction management services for ITS elements on the nearby Tri-State Tollway (part of the broader regional network improvement) carried a 32.0% D/M/WBE goal and a 3.0% VOSB/SDVOSB goal.¹³⁶ However, overall DBE/M/WBE participation results specifically for the Jane Byrne Interchange project are not detailed in the provided snippets.
• Analysis: This case illustrates that even within a single massive infrastructure project like an interchange reconstruction, work is typically broken into numerous separate contracts awarded over several years. Each contract may carry its own diversity goals based on the specific scope of work and available M/W/DBEs. This highlights the complexity of tracking overall MOC participation across the lifecycle of such multi-phase projects and underscores the importance of consistent goal setting and monitoring by the lead agency (IDOT).

Table 2: Comparative Overview of Midwest Large-Scale Project Case Studies

These case studies demonstrate the varied ways equity considerations are incorporated into major Midwest public works. While DBE/M/WBE goals are common, particularly where federal funding is involved, the specific goal levels, the integration with broader community benefits or workforce development initiatives, and the transparency of reporting outcomes can differ significantly across projects and jurisdictions.

IX. Synthesis and Conclusion

This report has examined the multifaceted role of minority-owned contractors (MOCs) in large-scale public projects across the 12-state Midwest region, focusing on the policies, participation levels, barriers, successful interventions, and impacts related to advancing equity. The analysis reveals a complex landscape characterized by established support programs, persistent challenges, and an evolving legal environment.

Recap of Findings: Public contracting in the Midwest operates under a framework heavily influenced by federal programs like the USDOT’s Disadvantaged Business Enterprise (DBE) program and various SBA initiatives, supplemented by state and local M/WBE or Business Enterprise Programs (BEPs). These programs aim to create a level playing field for firms owned and controlled by minorities, women, and other disadvantaged individuals, often setting participation goals based on availability analyses informed by disparity studies.²⁹ However, despite these frameworks, data consistently shows that MOC participation rates often fall short of established goals ²⁹, and disparity studies continue to document significant underutilization of MOCs relative to their availability in the marketplace.²⁴ MOCs face formidable and interconnected barriers, including restricted access to capital and bonding ²⁴, operational challenges related to capacity and administrative burdens ⁴⁰, difficulties penetrating established networks ²⁴, potential discrimination ²⁴, and critical cash flow issues exacerbated by delayed payments from prime contractors.⁹ Encouragingly, various interventions show promise, including targeted programmatic support like mentorship, joint venture facilitation, and technical assistance ⁷⁶, alongside systemic, race-neutral policy reforms such as contract unbundling, process streamlining, and rigorous prompt payment enforcement.⁴² The participation of successful MOCs yields significant positive impacts, acting as an economic engine for job creation and revenue generation, contributing to wealth building in minority communities, and strengthening local neighborhoods.²

Effectiveness of Equity Initiatives: Current equity-focused initiatives in the Midwest have established important legal and administrative structures and have undoubtedly increased awareness and created opportunities for some MOCs. The growth in spending reported by Illinois’ BEP ⁴⁸ and the strong performance of NMSDC-certified MBEs nationally ¹¹⁶ point to potential successes within specific program contexts. However, the widespread evidence of unmet goals and persistent disparities suggests that existing programs, as currently implemented and enforced, are often insufficient to overcome the deeply entrenched barriers MOCs face.²⁴ The gap between contract awards and actual payments observed in Cook County ⁸⁹ also raises questions about whether initial commitments consistently translate into realized economic benefit for MOCs.

Persistent Obstacles vs. Promising Solutions: The most significant obstacles—access to capital/bonding, network exclusion, capacity limitations, and payment delays—are systemic and mutually reinforcing.²⁴ Addressing them effectively requires a holistic approach that combines targeted support with fundamental changes to the contracting environment. Promising solutions involve not only direct assistance programs like mentorship and technical aid to build MOC capacity ⁷⁶ but also robust implementation of race-neutral policies that benefit all small businesses, such as simplifying procurement, breaking down large contracts, and guaranteeing prompt payment.⁶² The synergy between these approaches—using targeted help to overcome specific disadvantages while improving the overall system—appears crucial for meaningful progress.

Impact of Legal Climate: The recent successful legal challenges to the foundational assumptions of the federal DBE program, particularly the Mid-America Milling case impacting Indiana and Kentucky directly ⁷⁷, introduce significant uncertainty and risk for agencies across the Midwest. This legal pressure may compel a retreat from race- and gender-conscious goal-setting, even where justified by disparity data, pushing agencies towards relying more heavily on race-neutral measures.¹⁰⁰ While race-neutral strategies are essential, their ability to single-handedly remedy documented, deep-seated disparities resulting from discrimination remains questionable.¹ Navigating this evolving legal landscape while maintaining a commitment to equity will be a major challenge for policymakers and program administrators.

Overall Assessment and Future Outlook: The state of equity for minority-owned contractors in large-scale Midwest public projects is one of incremental progress constrained by persistent systemic barriers and increasing legal headwinds. While policies and programs are in place across the region, their effectiveness varies, and significant gaps remain between aspirational goals and achieved outcomes. Creating a truly level playing field requires more than symbolic gestures; it demands sustained political will, innovative strategies that tackle root causes (especially access to capital, bonding, and fair payment practices), transparent data collection and reporting, rigorous enforcement of existing regulations, and a willingness to adapt programs to be both effective and legally defensible. Continued investment in disparity research, program evaluation, and fostering collaboration between agencies, prime contractors, MOCs, and support organizations will be essential to advancing meaningful equity in the allocation of public infrastructure investments across the Midwest. The economic and social vitality of the region’s minority communities—and indeed, the region as a whole—depends on ensuring these opportunities are genuinely accessible to all.

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