Minority Firms on Local Public Works Projects--Mixed Results

The Local Public Works (LPW) Program was designed to: (1) create private sector employment opportunities in areas of high unemployment through the construction or renovation of useful public facilities, and (2) promote economic recovery by stimulating national and local economies. Congress appropriated $6 billion for the LPW program which was funded in two phases: $2 billion for the first round and $4 billion for the second round. The second round contained a provision requiring that at least 10 percent of the $4 billion be spent with minority firms. GAO was asked to assess the impact of the minority provision on the LPW program and to find out whether implementation of the provision has: (1) delayed the start of construction of public works projects; (2) increased project construction costs; (3) caused problems because some geographic areas lack minority firms; (4) required the use of out-of-state minority firms to comply with the provision; and (5) resulted in establishing minority firms ineligible to participate in the program.