The Transportation Department got cautiously favorable reviews yesterday for new regulations detailing what states and transit authorities must do to guarantee that minority contractors get a share of federal highway and transit money.
The regulations, to be published in today's Federal Register, have been under discussion since the 5-cent-a-gallon rise in the gasoline tax was passed last December to finance highway and transit improvements.
That legislation contained a requirement, inserted by Rep. Parren J. Mitchell (D-Md.), that at least 10 percent of federal aid go to small businesses owned by "socially and economically disadvantaged individuals."
Interim regulations that made nobody happy have been in place since shortly after the legislation passed.
Those rules drew more than 1,600 comments, most of them negative. Contractors and states, especially those with no big cities and a small minority population, worried that they would lose federal aid, the ultimate penalty for not meeting the goals. It is a penalty that has never been invoked in the history of the federal aid highway program.
Under the new regulations, each state and transit authority must set annual goals for minority participation. If the goal is 10 percent or higher, the Federal Highway Administration (FHWA) or the Urban Mass Transportation Administration (UMTA) will approve it.
If it is lower, it may still be approved, but only after the state or transit authority has demonstrated that a lower goal is necessary. If approval is not granted, consultations will be held to resolve the problem.
A state can be found in noncompliance with the regulations if it fails to have a minority business enterprise program and an approved goal. It also can be found in noncompliance if it fails to meet its approved goal and cannot satisfactorily explain why to the DOT. The regulations do not require minority set-asides or a fixed minority percentage of each contract.
Francis B. Francois, executive director of the American Association of State Highway and Transportation Officials, said the process means "it's a question of whether you do your paper work up front or at the end. Given that choice, a state goverment trying to do the job will accept the 10 percent, try to do the best job they can, then do the paper work at the end if they can't meet the goal."
Francois called the regulations a "good-faith effort" to solve the problems of competing interests.
Dewey Thomas, executive director of the National Association of Minority Contractors, said the regulations, on first reading, "give us an adequate opportunity to get a piece of the action" and to challenge so-called "front companies," which are set up with minority figureheads to capture federal contracts.
But Mitchell, who was briefed yesterday by Transportation Secretary Elizabeth Hanford Dole, was more cautious. "I have to give these a painstaking reading and I haven't done that yet," he said.
John Sroka of the Associated General Contractors, a major player in the road-building game, said, "We still have a concern that the regulation could impede progress in the highway program, inflate costs and begin to force states to practice some type of reverse discrimination to meet goals."