| dc.description.abstract | Women- and Minority-Businesses (WMB) encounter persistent barriers to participate in government construction contracts in the United States. Despite longstanding policies aimed at increasing WMB participation, various factors, including bonding requirements, subcontracting programs, and payment practices tend to exclude WMBs from fully participating in government markets. This dissertation investigates these exclusionary effects at both the Federal and State levels, offering evidence that should help inform future policy decisions.
Chapter I examines the impact of bonding requirements on WMB participation in government construction projects. Analyzing a 2010 change in the minimum dollar threshold for requiring bonding requirements, I find that WMB participation increased in contracts for which the requirement was removed. Moreover, the study finds larger effects for small WMB participation. These findings provide initial empirical evidence that surety bond requirements within the construction industry act as a barrier to entry for WMBs.
Chapter II evaluates the effects of subcontracting requirements on procurement prices. I examine both California and Iowa’s use of the Department of Transportation’s Disadvantaged Enterprise Program (DBE). For California, I find that bid prices increased by 13%, in response to a large change in subcontracting goals. In Iowa, I find that bid prices were sensitive to variation in contract-level goals but not to changes in overall state goals.
Chapter III investigates WMB participation California’s Department of Transportation contracts, comparing state and federal projects. Exploiting the fact that federally funded projects use federal procurement law, and state funded projects follow state law, I find that the WMB share of bids and contracts awarded in federal projects is much higher than for state projects. I suggest that differences in payment practices and the existence of the DBE program for federal contracts is associated with higher WMB participation rates.
Overall, WMB representation in government contracts is still far lower than their presence in the economy would suggest. Identifying barriers and effective program evaluation is an essential step in improving diversity and equity in government markets. This research contributes valuable evidence to inform policy interventions designed to enhance WMB participation in government contracting. | |
