No state or local government has ever been sanctioned under this program for not achieving its goal. Moreover, if a bidder is unable to meet a specific contract goal under the program, the recipient can waive the goal after the bidder has made a showing of good-faith effort. With that introduction, Mr. Chairman, let me explain precisely why the need for this program is clear. The sad fact is that the effects of discrimination still linger in the construction industry. While minorities make up over 20 percent of the U.S. population, minority-owned businesses are only 9 percent of construction firms, and get only 5 percent of construction receipts.
Similar inequities apply to women-owned businesses.
Women own a third of all small businesses but received less than 3 percent of federal procurement contract dollars in 1994. Discrimination in the critical ability to secure necessary capital persists as well. White business owners in the construction industry receive over 50 times as many loan dollars per dollar of equity capital as African American owners with identical borrowing characteristics. Recent studies have shown that limited access to capital has had a similarly negative effect on firms owned by women, and that due to that lessened access to capital more women than men finance business out of their own resources. In private contracting, discrimination is even more pronounced.