Revised City of South Bend Disparity Study Report

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City of South Bend Disparity Study 2020 contributed most recently to the successful defense of the Illinois Tollway's Disad- vantaged Business Enterprise (DBE) Program. 132 As explained by the Tenth Circuit in upholding the U.S. Department of Transportation's DBE program, this type of evidence demonstrates the existence of two kinds of discriminatory barriers to minority subcontracting enterprises, both of which show a strong link between racial disparities in the federal government's disbursements of public funds for construction contracts and the channeling of those funds due to private discrimination. The first discriminatory barriers are to the formation of qualified minority subcontracting enterprises due to private discrimination, precluding from the outset competition for public construction contracts by minority enterprises. The second discriminatory barriers are to fair competition between minority and non -minority subcontracting enterprises, again due to private discrimination, precluding existing minority firms from effectively competing for public construction contracts. The government also presents further evidence in the form of local disparity studies of minority subcontracting and studies of local subcontracting markets after the removal of affirmative action programs... The government's evidence is particularly striking in the area of the race -based denial of access to capital, without which the formation of minority subcontracting enterprises is stymied."' Business discrimination studies and lending studies are relevant and probative because they show a strong link between the disbursement of public funds and the channeling of those funds due to private discrimination. "Evidencethat private discrimination results in barriers to business formation is relevant because it demonstrates that M/WBEs are precluded of the outsetfrom competing for public construction contracts. Evidence of barriers to fair competition is also relevant because it again demonstrates that existing M/WBEs are precluded from compet- ing for public contracts." 134 Despite the contentions of plaintiffs that possibly doz- ens of factors might influence the ability of any individual to succeed in business, the courts have rejected such impossible tests and held that business formation 131. Seethe discussion in Chapter II of the legal standards applicable to contracting affirmative action programs. 132. Midwest Fence Corp. v Illinois Department of Transportation, Illinois State Toll Highway Authority et al, 840 F.3d 942 (7th Cir. 2016) (u ph old ingthe Illinois Tollways program for state -funded contracts modeled after Part 26 and based on CHA's expert testimony, including about disparities In the overall Illinois construction industry); see also Builders Assad- ation of Greater Chicogo v. City of Chicago, 298 F.Supp.2d 725 (N.D. III. 2003) (holding that City of Chicago's M/WBE pro- gram for local construction contracts met compelling interest using this framework). 133. Adarand Constructors, Inc. v. Slater, 228 F.3d 1147,1168-1169 (loth Cir. 2000), cert. granted then dismissed as improvi- dently granted, 532 U.S. 941 (2001) ("Adarand Vll"). 134. Id. 70 0 2020 Colette Holt & Associates, AN Rights Reserved.