Opinion ID: 163083
Heading Depth: 2
Heading Rank: 1

Heading: Historical Evidence

Text: 24 At trial, Denver introduced evidence detailing its construction contracting practices before the 1990 Ordinance. In 1973, the City Council enacted an ordinance creating an Affirmative Action Office (AAO) within its Department of Public Works (DPW). 4 According to testimony from the City's first Affirmative Action Officer, Wesley Martin, the AAO sought to ensure that minority contractors were hired to participate in City construction projects. Martin further testified that minority contractors were available but the City's rules, guidelines, and biases operated to effectively bar them from participating in City contracting. In 1977, the City Council passed a resolution establishing a voluntary program aimed at increasing minority participation in City contracting. Martin testified that the resolution had very little impact on how City projects were bid, mainly because the program had no enforcement mechanism. 25 In 1977, the Department of Housing and Urban Development (HUD) commenced an investigation into a grievance filed by the Minority Association of Contractors. The grievance alleged that minority contractors were not being utilized on Denver-based, federally funded projects in violation of applicable federal statutes. HUD provided the City with a preliminary investigative report dated September 30, 1977 in which HUD concluded, 26 The [C]ity failed to take those reasonable actions to overcome the effects of conditions which resulted in limited participation in the benefits of the [Community Development Block Grant] Program, and failed to make reasonable efforts to meet the special needs of the minority contractors which in effect resulted in minority contractors not taking full advantage of the [Community Development Block Grant] Program. Martin testified that this HUD report was significant because it was the first time the City was actually told that they were in apparent non-compliance with affirmative action requirements. 27 Martin also testified that the HUD report led Congresswoman Patricia Schroeder to request an investigation by the General Accounting Office (GAO). The GAO evaluated, inter alia, the DPW's compliance with federal affirmative action requirements for minority construction contractors. In a report released on September 25, 1978 (the GAO Report), the GAO concluded that certain DPW contracting practices appeared to have a significant negative effect on minority and other categorical groups of contractors covered by [federal] affirmative action requirements. These practices included requiring contractor prequalification, advertising for most bids only on a limited basis, and providing inadequate time to submit a bid proposal. See Concrete Works II, 36 F.3d at 1524 n. 11. Appended to the GAO Report was a chart detailing the DPW's utilization of minority contractors on federally funded City projects. That chart indicates that a total of $55,477,000 was awarded for such contracts between July 1, 1975 and December 31, 1977. Of that total, $2,476,000, or 4.46% was awarded to minority firms. 28 In 1979, the United States Department of Transportation (DOT) threatened to withdraw federal financial assistance for contracting projects at Denver's Stapleton International Airport unless the City took measures to facilitate minority participation on Stapleton projects. In a letter to the City's mayor, the DOT asserted that the DPW's prequalification requirement, while neutral on its face, was unjustified and operated to bar minority contractors from obtaining DPW contracts. The letter directed the City to eliminate or modify the prequalification requirement and to develop and authorize an affirmative action plan and procedure. In 1980, the City Council adopted an affirmative action program which applied to all contracts funded by the DOT. The plan contained percentage participation goals for both MBEs and WBEs. 29 A report on the utilization by the DPW of minority and women contracting firms prepared by the AAO and dated April 2, 1983, indicates that 9.4% of all DPW contract dollars were awarded to MBEs in 1977, 5.6% in 1978, 4.3% in 1979, 17.2% in 1980, 14.7% in 1981, and 24.1% in 1982. With respect to WBEs, 1.1% of all DPW contract dollars were awarded to WBEs in 1980, 5 0.34% in 1981, and 1.9% in 1982. Martin testified that the information on MBE and WBE project participation was provided by the contractors and that the AAO had no procedure by which it could monitor actual participation. He characterized the utilization numbers as overstated. Although the AAO report estimated the total number of MBEs and WBEs in the Denver MSA, it did not estimate their availability as a percentage of all construction firms. 30 In 1983, the City began to consider expanding its affirmative action program to include all DPW construction projects, not just those receiving federal funding. The City held a public hearing at which the City Council heard testimony from minority contractors and other individuals regarding utilization of MBEs and WBEs on local construction projects. The testimony included specific examples of discrimination encountered in the Denver construction industry. Many minority contractors testified that they worked on projects that had federal requirements for minority participation but were almost completely excluded from City projects without federal affirmative action requirements. Additionally, the Director of Governmental Affairs for the Associated General Contractors of Colorado stipulated at the hearing that there was discrimination in the industry against minorities and women. The City Council subsequently enacted Ordinance 246, Series of 1983, which set goals for MBE and WBE participation in all City construction projects managed by the DPW. The annual goal for MBE participation was 20% of dollars spent. For WBE participation, the goal was 5% of dollars spent. 31 In 1984, the year after Ordinance 246 was passed, the AAO reported that MBE participation on all DPW construction contracts was 28%; WBE participation was 6%. In 1985, MBE participation was 21% and WBE participation was 7%. In 1986, the AAO reported MBE participation on all DPW projects at 20% and WBE participation at 7%. In 1987, MBE participation was 26% and WBE participation was 9%. 32 Ordinance 246 was set to expire in 1988. In that year, the DPW surveyed local contractors by soliciting written responses to questionnaires. The City Council also conducted public hearings on the utilization of MBEs and WBEs on DPW projects. The stated objective of the hearings was [t]o determine the current MBE and WBE utilization levels on [DPW] projects and to assess their overall capabilities; also, to investigate the extent and impact of any past discriminatory practices or barriers to MBE and WBE participation on [DPW] projects; and to identify any special problems affecting MBEs and WBEs in specific areas of the construction industry. Based on the responses to the questionnaires and the extensive testimony presented at the hearings, the City Council determined that Ordinance 246 should be extended with modification. It, therefore, enacted Ordinance No. 424, Series of 1988, which, inter alia, set higher annual participation goals for MBEs and WBEs. 33