evidence, Dr. Brimmer concluded "these statistics demonstrate that the associations either totally excluded MBEs . . . or limited their participation to token levels." (Id. at P 39.)
84. Dr. Brimmer's reliance on Macklin's affidavit is misplaced. First, Macklin does not point to any provision in the associations' bylaws that act to limit or exclude blacks from membership. Second, Macklin does not identify the criteria for membership in the plaintiffs' associations. Without this information, it is impossible to objectively determine how any contractor could be refused membership in the plaintiffs' associations. Third, the 1982 OMO Directory, from which Macklin allegedly determined which MBEs were eligible for membership in the plaintiffs' associations, does not provide any information from which Macklin could have possibly made such a determination.
85. The 1982 OMO Directory is a ten page list of 241 contractors who were certified by the OMO as being "bona fide" MBEs and WBEs. (Defs.' Ex. 17.) The list contains only the name of the firm, the date its application for "bona fide" certification was heard by the OMO, the firm's certification number, and the date that its OMO certification would expire (usually one year after the date of its hearing). (Id.) The directory does not contain any information about the size of a firm; the race of its owners; the type of work it performed; a firm's location or principal place of business; whether the firm had any prior experience performing public works projects; whether the firm had any equipment or employees; or the amount of revenue generated by the firm in a given year. (Id.)
86. Among other things, the size of a firm, the type of work it performs, and its financial capabilities, are all factors that must be considered before anybody can accurately determine whether a given firm would be eligible for membership in the plaintiffs' associations. Since Macklin never considered any these factors, his opinions about MBE eligibility are unreliable. Furthermore, Dr. Brimmer's blind reliance on Macklin's observations, without any independent analysis or confirmation, is a bizarre scientific technique. Neither Macklin's unsupported opinions, nor Dr. Brimmer's untested hypotheses, are sufficient for this court to conclude that the contractors' associations discriminated against black contractors.
87. During the trial, the City did not offer any additional evidence to support its claim that the contractors' associations discriminated against black contractors. In fact, the City's claim was undermined by the uncontroverted testimony of John Smith that no black contractor who has ever applied for membership in the CAEP has been denied. (Smith, Tr. 5/31/94 at 30.) Moreover, the evidence presented at trial supports a finding that many black contractors may not have been eligible for membership in the contractors' associations simply because they lacked the resources and skill to perform large public works projects.
88. To be an active member of the CAEP in 1982, a contractor would have to perform on-site construction work of the type that CAEP members would normally perform, such as heavy and highway, utility and railroad construction, or the construction of water and sewer treatment plants. (Id. at 27.) The annual dollar volume of work performed by CAEP members in 1982 ranged from $ 200,000.00 up to millions of dollars. (Id. at 28.) Most CAEP members in 1982 had large investments in capital equipment such as heavy construction machinery, loaders, backhoes, and bulldozers. (Id. at 28-29.) Such specialized equipment costs between $ 60,000.00 for a small backhoe, to $ 250,000.00 for a bulldozer, and $ 400,000.00 for an earthmover. (Id. at 33.) By comparison, federal census data indicates that 459 out of 528, or 87 percent, of the black-owned construction companies in the Philadelphia SMSA in 1982 did not have any employees, and thus would be unable to complete public works projects. (Pls.' Ex. 5, Table 5.) The remaining 13 percent of black-owned construction companies, or a total of 69 firms, employed an average of only 3.8 employees per firm, and generated average revenues totalling just $ 291,028.00. (Pls.' Ex. 2 at 20.)
89. Based solely on a comparison of the size of the firms and the amount of revenue generated, it is highly unlikely that more than a few black contractors would be eligible for membership in the CAEP in 1982. Moreover, the City has not identified even a single black contractor who was eligible for membership in any of the plaintiffs' associations, who applied for membership, and was denied.
90. Evidence of low black membership in the contractors' associations, standing alone, is not probative of discrimination in the Philadelphia construction industry. Croson, 488 U.S. at 503. As the Supreme Court stated in Croson :
There are numerous explanations for this dearth of minority participation, including past societal discrimination in education and economic opportunities as well as both black and white career and entrepreneurial choices. Blacks may be disproportionately attracted to industries other than construction. . . . The mere fact that black membership in these trade organizations is low, standing alone, cannot establish a prima facie case of discrimination.
91. For the foregoing reasons, the court finds that the City's claim, and Dr. Brimmer's opinion, that the plaintiffs' associations discriminated against black contractors is not supported by the evidence, and it cannot form the basis for the court to conclude that the City had a compelling government interest in enacting Chapter 17-500's race-based preference.
D. Chapter 17-500's Racial Preference Is Not "Narrowly Tailored" to Remedy Identified Discrimination
92. Due to the court's previous finding that the City did not have a "compelling government interest" in enacting Chapter 17-500's racial preference, it is impossible to assess whether this preference is "narrowly tailored" to remedy prior discrimination because it is not linked to identified racial discrimination in any way. Croson, 488 U.S. at 507-08. Indeed, as noted in section D-2, infra, Chapter 17-500's racial preference is not "narrowly tailored" to even the perceived objective declared by City Council as the reason for the Ordinance in the first place. Nevertheless, because the Third Circuit found that the City created a disputed issue of fact on the "narrowly tailored" issue; see Contractors, 6 F.3d at 1009; the court makes the following findings of fact on this issue.
1. The City Failed to Consider Alternative "Race-Neutral Measures"
93. The City contends it enacted Chapter 17-500 only after race-neutral alternatives proved insufficient to improve minority participation in City contracting. To support this contention, the City points to two programs that were implemented in the late 1960s and early 1970s to assist minorities to compete more effectively in the Philadelphia construction industry. The first of these programs, the Philadelphia Plan, was instituted in the late 1960s to promote the hiring of minorities on public construction sites. (Coleman, Tr. 6/7/94 at 100-11.) The second program, the Philadelphia Urban Coalition's Minority Contractors Training and Assistance Program, was implemented in 1970 to train minority contractors and help them obtain financing and bonding so that they could proceed from one level to the next in the construction industry. (Gaskins, Tr. 6/7/94 at 137.) The City contends these two "race-neutral" programs were unsuccessful, and that City Council considered the efficacy of these programs before it enacted Chapter 17-500.
The City's position, however, is contradicted by the testimony of its own witnesses and by the defendants' exhibits.
94. First, the evidence submitted at trial suggests that at least one of these programs was successful. In its first eighteen months, the Minority Contractors Training and Assistance Program succeeded in tripling the value of construction contracts awarded to minorities, from $ 4,000,000.00 awarded to all minority contractors in 1969 to $ 12,004,268.00 awarded to the program's 144 participants in 1970 and the first half of 1971. (Defs.' Ex. 112.) Oscar Gaskins, the director of the Urban Coalition's program from 1970 until 1974, testified that the Urban Coalition succeeded in fulfilling a number of its program goals. (Gaskins, Tr. 6/7/94 at 148-80.) Between 1970 and 1974, the Urban Coalition guaranteed loans for between 40 and 50 minority contractors. (Id. at 148.) In addition, another 70 to 80 minority contractors received non-financial assistance from the Urban Coalition, including assistance with accounting, estimating, and dealing with the Internal Revenue Service, the City Procurement Department, local unions and private contractors. (Id. at 151-57.) By 1974, black contractors were obtaining work from the Procurement Department, the Redevelopment Authority, the Philadelphia School District, and the federal government. (Id. at 162.) Minority contractors received prime contracts in specialty work such as plumbing, electrical work and street lighting from the City. (Id.) Moreover, Gaskins testified that when a minority contractor submitted a bid to the City on a prime contract, and he was the lowest bidder, he got the job. (Id. at 180.)
95. Second, there is no evidence that the City considered the effectiveness of these programs when it enacted Chapter 17-500. Indeed, the only evidence that the City offered on this point was the testimony of former City Council President Joseph Coleman ("Coleman") that he was aware of these two programs when Chapter 17-500 was enacted in 1982 (but Coleman could not recall any details about the programs). (Coleman, Tr. 6/7/94 at 100-11.) Contrary to the City's position, a fair reading of the record reveals that City Council was only interested in implementing a set-aside ordinance that was modeled after certain federal legislation enacted by Congress in the late 1970s, and upheld by the Supreme Court in Fullilove v. Klutznick, 448 U.S. 448, 65 L. Ed. 2d 902, 100 S. Ct. 2758 (1980). (Joint Ex. 4 at 501-13.) City Council was not interested in considering race-neutral measures, and it did not do so.
96. The City's argument that it enacted Chapter 17-500 only after other race-neutral programs proved insufficient to improve minority participation in City contracting is further weakened by the admitted success of the City's Office of Minority Opportunity during the two years immediately preceding the enactment of Chapter 17-500.
97. The OMO was established by the City in October 1980 to certify the credentials of minority contractors who were seeking contracting opportunities from the Urban Mass Transit Authority ("UMTA").
(Robinson, Tr. 6/8/94 at 8-9.) Before a minority contractor could participate in the UMTA project, the contractor first had to demonstrate to the OMO that it was, in fact, owned and controlled by minorities (proof of ethnicity was required), and that it was qualified to perform the contract that it was seeking. (Id. at 19-23.)
98. As part of its certification process, the OMO conducted extensive on-site inspections of a prospective minority contractor's facilities to determine whether the information contained in the contractor's application for certification was accurate and truthful. (Id. at 23-24.) During these on-site inspections, OMO staff members would examine the contractor's financial and corporate records, the number of workers employed by the contractor, the amount of equipment owned by the contractor, the backgrounds of corporate officers, the contractor's prior experience, and whether the contractor kept any supplies on-site. (Id. at 23-26.) If the OMO staff determined that the contractor's credentials were in order, and after a public hearing, the OMO would certify the contractor as "bona fide" for one year. (Id. at 27-29, 85.) After a minority contractor was certified, the contractor would be given a certification number and its name would be placed on a list maintained by the OMO. (Id. at 32; Defs.' Ex. 17.) The OMO's list was included in a manual that was made available to non-minority contractors to use as a reference for "bona fide" MBEs that the non-minority contractor could use in the areas for which the MBEs had expertise. (Robinson, Tr. 6/8/94 at 32, 67.)
99. Between April 1982 and August 1983, the OMO certified 241 minority contractors as "bona fide," out of approximately 680 contractors that applied. (Id. at 85.) During fiscal year 1982, the OMO succeeded in obtaining 20 to 25 public works contracts, worth approximately $ 50 million, for OMO-certified MBEs. (Id. at 78.) In addition, in 1982 the OMO received an award from the United States Department of Transportation "in recognition of its strong and effective MBE certification procedures and for its exceptional record of MBE contracts awarded in fiscal year 1982." (Id. at 77.)
100. Despite the obvious success that the OMO and Urban Coalition had in obtaining contracting opportunities for minorities, there is no evidence that the City has ever considered implementing a program designed to expand the goals of the Urban Coalition and OMO programs to provide assistance to disadvantaged contractors of all races.
See Associated Gen. Contractors of California, Inc. v. Coalition, 950 F.2d 1401, 1417 (9th Cir. 1991), cert. denied, 503 U.S. 985, 118 L. Ed. 2d 390, 112 S. Ct. 1670 (1992).
101. In Croson, the Supreme Court stated:
States and their local subdivisions have many legitimate weapons at their disposal both to punish and prevent present discrimination and to remove arbitrary barriers to minority advancement.
. . . .
Even in the absence of evidence of discrimination, the city has at its disposal a whole array of race-neutral devices to increase the accessibility of city contracting opportunities to small entrepreneurs of all races. Simplification of bidding procedures, relaxation of bonding requirements, and training and financial aid for disadvantaged entrepreneurs of all races would open the public contracting market to all those who have suffered the effects of past societal discrimination or neglect. Many of the formal barriers to new entrants may be the product of bureaucratic inertia more than actual necessity, and may have a disproportionate effect on the opportunities open to new minority firms. Their elimination or modification would have little detrimental effect on the city's interests and would serve to increase the opportunities available to minority business without classifying individuals on the basis of race. The city may also act to prohibit discrimination in the provision of credit or bonding by local suppliers and banks. Business as usual should not mean business pursuant to the unthinking exclusion of certain members of our society from its rewards.