Long Beach engineer and architect Domingo DeLeon used to make a nice living by accessing minority contracting programs to win bids to design elements of subways, roads and bridges.

Ten years ago, DeLeon was dealt a body blow when California voters passed Proposition 209 banning race-based contracting in most state agencies. As contract opportunities withered, DeLeon was forced to cut two-thirds of his workforce at DeLeon Consulting Engineering, leaving him with just a dozen employees. Since then, he's laid off six more employees and has barely managed to hang on.

Now DeLeon fears he will have to close his doors, due to a federal appellate ruling last year that could end the remaining minority contracting requirements in California and other Western states. The Ninth Circuit Court of Appeals ruling bars transportation agencies that receive federal funds from setting up specific contracting goals for disadvantaged businesses unless they can prove widespread discrimination.

"They say discrimination doesn't exist. That's not true. It's very difficult for me to get contracts. They don't listen to you if you have an accent. If this goes through, it will be nearly impossible to compete with the white guys. I'm probably going to have to close my business," said DeLeon, a Peruvian native who immigrated to L.A. in 1985 and started his business two years later.

DeLeon's firm is one of 1,300 in Los Angeles County and 3,300 statewide that participate in the California Department of Transportation's Disadvantaged Business Enterprise (DBE) program.

As a result of the court ruling, Caltrans is now holding hearings as it re-evaluates its 26-year-old program. Unless the agency is able to prove to the standards set forth in the court ruling that large numbers of firms are discriminated against in the awarding of contracts, the DBE program will be forced to go "race neutral," meaning race can no longer be a factor in awarding contracts. That decision could come as soon as May.

Ending discrimination
The DBE ruling comes at a time when Caltrans and other transportation agencies could be receiving billions of dollars as California embarks on a massive infrastructure spending program.

"If they stop programs designed for small minority- and women-owned firms, we're going to have a very difficult time competing with the large corporations," said Rod Garcia, who founded Century Diversified Inc., a Pasadena-based engineering and construction management firm in 1991. "The bureaucrats handing out the contracts are comfortable dealing with the name brands, the well-known companies."


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