Montana Pays $485K to White-Owned Firm That Claimed Discrimination

Associated Press, March 21, 2018

Montana has paid $485,000 to settle claims that a program meant to boost the number of highway contracts going to disadvantaged businesses illegally discriminated against a construction company for having rich, white male owners.

Billings-based Mountain West Holding Co. sued the state in 2013 after transportation officials set a goal to hire disadvantaged businesses on a little more than a quarter of all state highway projects between 2012 and 2014.

Company lawyers said that caused Mountain West to lose out on some contract bids, and was a violation of the federal Civil Rights Act’s prohibition on racial discrimination in programs receiving federal financial assistance.

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All states must have a disadvantaged business enterprise program in order to receive federal highway funding. The program covers small businesses owned by “socially or economically disadvantaged” individuals, including minorities, females and people worth less than $1.3 million.

Of the 105 companies in the Montana program from 2012-2014, eight were owned by white men, according to state attorneys. Mountain West did not qualify.

The state had found that less than 3 percent of all contract money was going to those small companies, far short of its goal of 5.8 percent at the time.

So transportation department officials looked to boost that number by setting a preference for disadvantaged businesses for 62 of the 237 total highway projects over those two years.

Mountain West, which specializes as a subcontractor in concrete barriers, guardrails, sign installations and traffic control, said in its lawsuit that it lost out on bids because the state would award contracts to those companies that used a certain number of disadvantaged businesses as subcontractors.

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Its revenue in all those areas increased between 2012 and 2014, casting doubt on Mountain West’s claim that it suffered damages due to the disadvantaged business enterprise program, state attorneys said in court filings.

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