Full opinion text
FINDINGS OF FACT & CONCLUSIONS OF LAW RYSKAMP, District Judge. I. INTRODUCTION Plaintiffs are six trade associations whose members regularly perform work, either as prime contractors or subcontractors, on construction contracts awarded by Dade County, Florida. Named defendants include Dade County, Florida, its County Commissioners and the County Manager: Three parties have intervened on behalf of the defendants: the Black Business Association; the Allied Minority Contractors’ Association; and the Miami branch of the National Association for the Advancement of Colored People (NAACP). Plaintiffs are challenging Dade County’s Black, Hispanic, and Women Business Enterprise Programs, which provide for the use of race, ethnicity, and gender-conscious measures in awarding County construction contracts, as unconstitutional under the Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. Plaintiffs do not contest the manner in which the MWBE programs are administered. The Court will therefore limit its review to the programs’ facial validity. Further, because plaintiffs attack the programs only with regard to construction .contracting, and each program’s enabling legislation contains a severability clause, the Order solely addresses the construction aspects of the program. Plaintiffs request a declaratory ruling from this Court that Dade County’s MBE and WBE programs are unconstitutional and seek an injunction to prevent the County from continuing to utilize race, ethnic, and- gender-conscious measures in awarding County construction contracts. A four day non-jury trial was held in this matter between December 11 and December 28, 1995, with closing arguments heard on April 11,1996. Based on the evidence admitted at trial, and the Court’s findings of fact and conclusions of law as set forth below, the Court finds that Dade County Ordinances 94-94, 94-95, and 94-96 violate the Equal Protection Clause of the U.S. Constitution. Dade County will be permanently enjoined from enforcing the race, ethnicity, and gender-conscious contract measures, as they pertain to construction projects only, contained in the aforementioned Ordinances. II. BACKGROUND Dade County first adopted a Black Business Program in 1982, by Ordinance 82-67. That program was challenged as unconstitutional by non-minority contractors. See, South Florida Chapter of Associated General Contractors of America, Inc., et al, v. Metropolitan Dade County, 552 F.Supp. 909 (S.D.Fla.1982). Under a strict scrutiny standard of review, the District Court found the “set-aside” portion of the program unconstitutional, but upheld the “goals” portion of the program. In South Florida Chapter of Associated General Contractors of America, Inc., et al, v. Metropolitan Dade County, 728 F.2d 846 (11th Cir.1984), cert. denied, 469 U.S. 871, 105 S.Ct. 220, 83 L.Ed.2d 150 (1984), the Eleventh Circuit Court of Appeals upheld the program in its entirety. Though the district court had applied a strict scrutiny standard to review the County’s BBE program, .the Court of Appeals reviewed the program under an analytical approach it described as “most closely akin to that set out in Chief Justice Burger’s opinion in Fullilove.” South Fla. Chap., 723 F.2d at 852. Under the “Fullilove ” standard, the Court of Appeals found the County’s entire BBE program constitutional. Since 1982, the Dade Board of County Commissioners amended the BBE program in 1984 (Ordinance 84-67), in 1992 (Ordinance 92-46), and most recently in 1994 (Ordinance 94-96). Defs’ Ex. U.l. In 1994 the County adopted the Women and Hispanic Business Enterprise programs for the first time. (Ordinances 94-94 and 94-95, respectively). Id., U.2 & U.3. Because of their substantial similarity, the MBE and WBE programs will be described as one. To participate in the MWBE programs, a business must demonstrate that it does not exceed the size limits for “small business concerns” as defined by the Small Business Administration of the U.S. Department of Commerce. To qualify as an MBE or a WBE the business must be owned and controlled by one or more Black individuals, Hispanic individuals, or females and must have an actual place of business in Dade County. To qualify as a joint venture, one member must be a certified MBE or WBE. The MWBE programs apply to certain classes of County contracts for which “participation goals” have been-set. For example, the County has designated Standard Industry Classification (SIC) 15, 16, and 17 for participation goals of 15% for BBEs, 19% for HBEs, and 11% for WBEs. All construction contracts in excess of $25,000 funded in whole or in part by the County are covered. The County must make every reasonable effort to meet the participation goals, and may use any of the following five “contract measures” to award contracts to MWBEs in an effort to meet the participation goals. 1) Set-asides — A particular contract is set aside for competition solely among one or more MWBEs. The County may waive competitive bidding on a contract, thereby “setting it aside,” if there are at least three MWBE businesses available to perform the contract requirements. 2) Subcontractor goals — A prime contractor is required to subcontract a certain percentage of work to MWBEs. The percentage is determined on a case-by-ease basis depending upon the type of subcontracting opportunities available in a particular contract and upon the availability of MWBE subcontractors to perform the work. A waiver is available to prime contractors which can demonstrate that MWBEs are not available to provide, the required goods or services at a competitive price. Inability of an MWBE to obtain bonding is not considered grounds for a waiver. 8) Project goals — Similar to subcontractor goals except the County creates a pool of MWBE subcontractors from which the County selects subcontractors for specified types of work under a County contract. 4) Bid preference — An MWBE bid price can be reduced by as much as ten percent when comparing that bid against other bids to determine which is the lowest bid. Bid preferences are given to MWBEs, joint ventures between non-minority contractors and MWBEs, and to contractors demonstrating significant utilization of MWBEs in purchasing goods and services in Dade County. 5) Selection factors — Similar to a bid preference except that selection factors are used only in bids where price is one of several selection factors, such as in requests for proposals. A selection factor affords an MWBE an advantage when their proposal is evaluated. Once a contract is identified as being covered by a participation goal, it is submitted to a review committee to determine whether a contract measure should be applied. The County Commission makes the final determination concerning whether a contract measure will be applied to a contract. The decision to apply a contract measure or to award a contract under the MWBE program can be appealed to the County Manager. The County Manager’s determination of the appeal is final unless the County Commission elects, at its discretion, to review the County Manager’s decision. Finally, the MWBE programs are reviewed annually by the County Commission for their efficacy. In addition, within one year of publication of the “Survey of Minority-Owned Business Enterprises” (“SMOBE” — published once every five years) by the Census Bureau, the County Commission must determine whether to continue the race, ethnic, and gender-conscious measures authorized by the Ordinances. Several non-minority contractors filed a second suit against Dade County in 1990. Capeletti Brothers, Inc., et al v. Metropolitan Dade County, 90-0678 (S.D.Fla.1990). These plaintiffs also challenged the constitutionality of the BBE program, specifically questioning whether defendants had a strong basis in evidence for the conclusion that Black contractors have suffered discrimination in the local construction industry, and whether the program was narrowly tailored. This Court held a three day bench trial in July, 1992. In August, 1992, the parties reached a settlement and stipulated to a dismissal with prejudice, before the Court rendered a final judgment. The present case was filed in September, 1994. This action challenges the constitutionality of Dade County’s MWBE programs, as they apply to the construction industry only, ie., SIC 15, 16, and 17. Plaintiffs seek a declaratory judgment and an injunction against the enforcement of the construction industry component of the MWBE programs. Plaintiffs assert that Dade County cannot demonstrate a compelling (or, with respect to the WBE program, even an important) governmental interest in using racial, ethnic, or gender classifications as a basis upon which to award County construction contracts. Nor are the programs narrowly tailored to achieve the governmental interests identified, contend plaintiffs. III. STANDING At various times during the pendency of this action, both the defendants and the intervenors have questioned whether plaintiffs have standing to bring their constitutional claims. The Supreme Court has answered this question in the affirmative. In Northeastern Fla. Chapter of the Associated Gen. Contractors of America v. City of Jacksonville, 508 U.S. 656, 665, 113 S.Ct. 2297, 2803, 124 L.Ed.2d 586 (1993), the Court determined that construction contractors, such as plaintiffs in this case, have standing to challenge a minority preference program upon a showing that they are “able and willing to bid on contracts and that a discriminatory policy prevents [them] from doing so on an equal basis.” The “injury in fact” in the context of a set-aside program “is the inability to compete on an equal footing in the bidding process, not the loss of a contract.” Id. Where, as here, an MWBE program prevents otherwise qualified contractors from bidding for a given percentage of County contracts or “stacks the odds” against them through a bid preference system based solely upon their race,- ethnicity, or gender, this results in a cognizable injury for purposes of an equal protection claim. Id.; see also, Contractors Association of Eastern Pennsylvania v. City of Philadelphia, 6 F.3d 990, 995 (3rd Cir.1993); Concrete Works of Colorado v. City & County of Denver, 36 F.3d 1513, 1518 (10th Cir.1994). The Supreme Court continues to find standing where the contractor plaintiff makes “an adequate showing that sometime in the relatively near future it will bid on another government contract....” Adarand Constructors, Inc. v. Pena, — U.S.-,-, 115 S.Ct. 2097, 2105, 132 L.Ed.2d 158 (1995). Therefore, the Court finds that plaintiffs have standing to pursue their equal protection claims. IV. LEGAL STANDARD a. Race and Ethnic-Conscious Contract Measures The Equal Protection Clause of the Fourteenth Amendment provides that “[n]o state shall ... deny to any person within its jurisdiction the equal protection of the laws.” In its landmark decision, City of Richmond v. J.A. Croson Co., 488 U.S. 469, 487, 109 S.Ct. 706, 718, 102 L.Ed.2d 854 (1989), the United States Supreme Court ruled on the constitutionality of government-sponsored minority preference programs. A majority of the Court agreed that the constitutionality of a state or local minority preference program must satisfy a strict scrutiny standard. Absent searching judicial inquiry into the justification for [] race-based measures, there is simply no way of determining what classifications are “benign” or “remedial” and what classifications are in fact motivated by illegitimate notions of racial inferiority or simple racial polities. Croson, at 493, 109 S.Ct. at 721. See also, Wygant v. Jackson Bd. of Educ., 476 U.S. 267, 273, 106 S.Ct. 1842, 1846, 90 L.Ed.2d 260 (1986) (“Racial and ethnic distinctions of any sort are inherently suspect and thus call for the most exacting judicial examination.”) Under a strict scrutiny analysis, race-conscious measures must be justified by a “compelling state interest,” Croson, at 505, 109 S.Ct. at 727, that is “narrowly tailored” to achieve the state’s compelling interest. Id. at 507-08, 109 S.Ct. at 728-29; accord, Peightal v. Metropolitan Dade County, 26 F.3d 1545, 1552 (11th Cir.1994) (Peightal II); Cone Corp. v. Hillsborough County, 908 F.2d 908, 913 (11th Cir.), cert. denied, 498 U.S. 983, 111 S.Ct. 516, 112 L.Ed.2d 528 (1990). Because the Croson decision is essential to the disposition of this case, it is worth taking a moment to reiterate exactly what it is, beyond the simple reaffirmation of the strict scrutiny standard for race-based classifications, that Croson says. The Court believes that the following guiding principles from Croson provide a road map by which to judge race and ethnicity-based classifications of the sort at issue here: 1. The Fourteenth Amendment guarantees the equal protection of laws to all citizens, regardless of race or ethnicity. Discrimination based upon race or ethnicity is prohibited whether invidious or benign. 488 U.S. at 493-94, 109 S.Ct. at 721-22. 2. The State, or local subdivision of the State, has the authority to eradicate the effects of private discrimination within its own •legislative jurisdiction so long as this authority is exercised within the constraints of Section 1 of the Fourteenth Amendment. 488 U.S. at 491-92, 109 S.Ct. at 720-21. 3. In order to justify a program of construction set-asides or goals, the local governmental authority must show that it had become a “passive participant” in a system of racial exclusion practiced by the local construction industry. The governmental agency may not induce, encourage, or promote private persons to indulge in constitutionally forbidden prejudice. 488 U.S. at 492-93, 109 S.Ct. at 721. 4. When a local governmental agency uses a race-based measure to prohibit certain citizens the right to compete for certain public contracts, solely on the basis of race or ethnicity, the court must engage in a searching judicial inquiry into the justification for such race-based measures to determine which classifications are “benign” or “remedial” and which classifications are in fact motivated by illegitimate notions of racial inferiority or simple racial politics. The purpose of this strict scrutiny is to ensure that the means used to address the compelling goal (of remedying past discrimination) “fit” so closely that there is little or no possibility that the motive for the classification was illegitimate racial prejudice or stereotype. 488 U.S. at 493, 109 S.Ct. at 721-22. 5. Local governments have a compelling interest in remedying past discrimination only after legislative or administrative findings of constitutional or statutory violations. A generalized concern regarding discrimination in society at large is not a compelling interest which will justify the use of race-based measures. 488 U.S. at 496-97, 109 S.Ct. at 723. 6. A governmental assertion that there has been past discrimination in an entire industry provides no guidance for a legislative body to determine the precise scope of the injury it seeks to remedy. Societal discrimination that has prevented minorities from following the traditional path from laborer to entrepreneur cannot justify the use of race-based measures. It is sheer speculation how many minority firms would exist absent prior past societal discrimination. 488 U.S. at 498-99, 109 S.Ct. at 724. 7. All racial classifications are suspect. A mere recitation of a legislative body that a “benign” or “remedial” purpose is in mind does not constitute a “strong basis in evidence” that the remedial plan is necessary, nor does it establish a prima facie case of constitutional violation by members of the construction industry. The local government must identify the discrimination it is seeking to remedy. 488 U.S. at 500-601, 109 S.Ct. at 725. 8. When reliance is made upon statistical disparity, and special qualifications are necessary to undertake a particular task, the relevant statistical pool must include only those minorities qualified to provide those services. These minority firms must be qualified, willing and able to provide the requested services. If the statistical analysis includes the proper pool of eligible minorities, any resulting disparity, in a proper case, may constitute prima facie proof of a pattern or practice of discrimination. 488 U.S. at 501-503, 509, 109 S.Ct. at 725-27, 730. 9. Any statistical analysis must filter out any non-social factors that may distort the final result, e.g. deficiencies in working capital, inability to meeting bonding requirements, unfamiliarity with bidding procedures, and disability caused by an inadequate track record. These problems face any new entrant .into the construction industry, regardless of race. 488 U.S. at 498-99, 109 S.Ct. at 724. 10. If the governmental agency can establish a strong basis in evidence of discrimination in the construction industry, the court must determine whether the measure used to remedy prior discrimination is narrowly tailored to meet that goal. The governmental agency must show that it considered the use of race-neutral means to increase minority participation in the construction industry and rejected such means as inadequate. The use of a percentage quota is not narrowly tailored to any goal, except, perhaps, outright racial balancing. 488 U.S. at 507, 109 S.Ct. at 729. 11. When there is a significant statistical disparity between the number of qualified minority contractors willing and able to perform a particular service and the number of such contractors actually engaged by the locality and the locality’s prime contractor, an inference of discriminatory exclusion could arise. Under such circumstances, the municipality could act to dismantle the closed business system by taking appropriate measures against those who discriminate on the basis of race or other illegitimate criteria. “In an extreme case, some form of narrowly tailored preference might be necessary to break down patterns of deliberate exclusion.” 488 U.S. at 509, 109 S.Ct. at 730. To summarize, then, the Croson Court declared racial quotas for state and local government contracting to be a presumptively illegal practice, reserved for extreme situations, where every constitutional “i” is dotted, and every constitutional “t” is crossed. b. Gender-conscious measures Plaintiffs’ assert that the County’s WBE program also should be subjected to a strict scrutiny analysis, while the defendants contend that gender preference programs are evaluated under an intermediate scrutiny standard. The Eleventh Circuit addressed this issue in the context of a Title VII action, Ensley Branch, N.A.A.C.P. v. Seibels, 31 F.3d 1548, 1579 (1994). In the Ensley Branch, N.A.A.C.P. decision, the Eleventh Circuit rejected the argument that, based on Croson, the Supreme Court intended strict scrutiny to apply to gender-conscious programs challenged under the Equal Protection Clause, thereby implicitly reversing its application of intermediate scrutiny to gender preferences as set out in Craig v. Boren, 429 U.S. 190, 197, 97 S.Ct. 451, 457, 50 L.Ed.2d 397 (1976). Since Ensley, the Supreme Court handed down its decision in United States v. Virginia, - U.S. -, 116 S.Ct. 2264, 135 L.Ed.2d 735 (1996), invalidating under the Equal Protection Clause Virginia’s maintenance of the single-sex Virginia Military Institution (VMI). . Instead of judging the constitutionality of the VMI program under traditional intermediate scrutiny, the Court held that “[p]arties who seek to defend gender-based government action must demonstrate an ‘exceedingly persuasive justification for that action.’ ” Id. at-, 116 S.Ct. at 2274 (citations omitted). The Court then applied this “exceedingly persuasive justification” standard in invalidating the VMI program. Justice Rehnquist concurred only in the judgment, noting that “the Court ... introduces an element of uncertainty respecting the appropriate test.” Id. at-, 116 S.Ct. at 2288. In dissent, Justice Scalia suggested that the majority had effectively adopted a strict scrutiny standard to judge the constitutionality of classifications that deny individuals opportunity on the basis of sex. Id. at -, 116 S.Ct. at 2294. The majority, however, neither denied nor affirmed Justice Sealia’s analysis. This Court cannot say for certain whether the Supreme Court intended that the VMI decision signal a heightening in scrutiny of gender-based classifications. That issue is not dispositive of the instant case. Because the Court finds that the WBE program fails even intermediate scrutiny, it is unnecessary to decide whether the VMI decision requires the County to meet an even more difficult burden of proof. Therefore, the Court will confine its analysis of the WBE program to traditional intermediate scrutiny, noting that if the program fails this test, it would surely fail strict scrutiny as well. Intermediate scrutiny requires that the defendants demonstrate that the gender preference is “substantially related to an important governmental objective.” Contractors Ass’n v. Philadelphia, 6 F.3d at 1009. There is no clear precedent from either the Supreme Court or the Eleventh Circuit concerning what type and amount of evidence is necessary to support a public employer’s gender-conscious program. The Third Circuit thoroughly analyzed the case law on this issue and fashioned a standard this Court finds persuasive. “[T]his standard requires the [county] to present probative evidence in support of its stated rationale for the gender preference, discrimination against women-owned contractors.” Id. at 1010. c. Burden of Proof The parties dispute which one of them has the ultimate burden of proof on the issue of the constitutionality of Dade County’s MWBE programs. While the Eleventh Circuit has not directly addressed this issue in the context of an Equal Protection claim, from its decisions, as well as those of other Circuit Courts, this Court has formulated the following approach. At the outset it must be recognized that making employment decisions on the basis of race, ethnicity, or gender is' presumptively illegal. Therefore, the County bears the initial burden of showing that the race, ethnicity, and gender-conscious measures it uses to determine contract awards is not prohibited under the Fourteenth Amendment. “Because the Fourteenth Amendment only tolerates race-conscious programs that narrowly seek to remedy identified discrimination,” the County must demonstrate a strong basis in evidénce to support its use of race and ethnicity-conscious contract measures. Concrete Works, 36 F.3d at 1522. If the County is able to do this, then the burden shifts to the plaintiffs to rebut the County’s showing. See Contractors v. Philadelphia, 6 F.3d at 1007, Howard v. McLucas, 871 F.2d 1000, 1006 (11th Cir.1989) (“[W]e emphasize that the [plaintiffs] bear the burden of proving that the affirmative action plan is unconstitutional.”). “Notwithstanding the burden of initial production that rests with the municipality, the ultimate burden of proof remains with the challenging party to demonstrate the unconstitutionality of an affirmative action program.” Concrete Works, 36 F.3d at 1522 (quoting Wygant, 476 U.S. at 277-78, 106 S.Ct. at 1849) (quotations omitted) and citing Johnson v. Transportation Agency, 480 U.S. 616, 626-27, 107 S.Ct. 1442, 1449, 94 L.Ed.2d 615. Plaintiffs have raised a second issue with regard to the admissibility of certain evidence that the Court will address here. Plaintiffs have taken pains to differentiate between “pre-enactment” and “post-enactment” evidence submitted by defendants in support of the MWBE program. Pre-enactment evidence refers to evidence developed prior to defendants enacting either the BBE, HBE, or WBE programs, and could therefore have been relied upon by the County Commission in adopting the affirmative action programs. Conversely, post-enactment evidence is that which has been developed since the County’s affirmative action programs were enacted and therefore was not specifically relied upon as a rationale for the County’s affirmative action efforts. The Eleventh Circuit has clearly pronounced that post-enactment evidence is properly introduced in the record and relied upon by district courts in determining the constitutionality of government affirmative, action programs. Although Croson requires that a public employer show strong evidence of discrimination when defending an affirmative action plan, the Supreme Court has never required that, before implementing affirmative action, the employer must have proved that it has discriminated. On the contrary, formal findings of discrimination need neither precede nor accompany the adoption of affirmative action. Ensley Branch, N.A.A.C.P., 31 F.3d at 1565 (citing Wygant, 476 U.S. at 286, 106 S.Ct. at 1853; Howard, 871 F.2d at 1007; Contractors Ass’n v. Philadelphia, 6 F.3d at 1004; and Harrison & Burrowes Bridge Constructors, Inc. v. Cuomo, 981 F.2d 50, 60 (2nd Cir.1992)). The Third Circuit’s perspective on this issue is also noteworthy: Consideration of post-enactment evidence is especially appropriate here, where the principal relief sought and the' only relief granted by the district court, was an injunction. Because injunctions are prospective only, it makes sense to consider all available evidence before the district court, including the post-enactment evidence, which the district court did. Although we recognize the risk of insincerity associated with post-enactment evidence, we believe the risk is minimal here because the [evidence] consists essentially of an evaluation and re-ordering of pre-enactment evidence — contracts awarded to minority owned businesses in the three years preceding the Ordinance. Contractors Ass’n, 6 F.3d at 1004. Although post-enactment evidence may be probative of discrimination, the Court finds that much of the statistical evidence regarding BBE contracting after 1982 is severely skewed by the challenged affirmative action program. The program at once allocated more contracts to BBEs, and provided incentives for more blacks to enter the contracting business and bid on County contracts. Thus, the ordinance artificially inflated the demand for County contracts among BBEs and the number of BBEs being awarded contracts. The converging phenomena of increasing BBE demand for contracts and increasing BBE success in bidding make it difficult to determine the underlying issue — -whether the County was guilty of discrimination during the years in question. Additionally, the use of data not merely organized and studied post-enactment, but actually culled from years while the ordinance was in effect, creates the following dilemma for defendants: if the data prove the existence of discrimination, then they also prove that the set-aside program is not achieving its goal of ending discrimination. If the set-aside program is ineffective, it can hardly be considered necessary to promote the County’s compelling interest in ending discrimination. This reasoning may appear tautological, but it is a tautology created by defendants’ principal reliance on data culled from the years 1989 through 1991, years while the ordinance was in effect. At least as to BBEs, the Court would prefer to rely on the data from 1982, the last year prior to the enactment of the ordinance, which seems to offer the best window on the County’s treatment of black contractors apart from the set-aside program. However, since much of the trial centered upon statistical data culled from years while the BBE program was in effect, the Court will consider that data as well. V. DISCUSSION a. Strict scrutiny requires compelling interest to support race and ethnicity-conscious contract measures Requiring a state government to demonstrate a compelling interest “was designed to ‘smoke out’ illegitimate uses of race by assuring that the legislative body is pursuing a goal important enough to warrant use of a highly suspect tool.” Ensley Branch, N.A.A.C.P., et al, v. Seibels, 31 F.3d 1548, 1565-66 (11th Cir.1994) (quoting Croson, 488 U.S. at 493, 109 S.Ct. at 721). The Eleventh Circuit has determined that “a compelling state interest unquestionably exists where race-conscious relief is aimed at past and present discrimination by a state actor.” Peightal II, 26 F.3d at 1552 (citing United States v. Paradise, 480 U.S. 149, 167, 107 S.Ct. 1053, 1064, 94 L.Ed.2d 203 (1987)) (internal quotations omitted); see also, Ensley Branch, N.A.A.C.P., 31 F.3d at 1565 (Remedying past or present discrimination is widely accepted as compelling.) Thus, the Eleventh Circuit has explained that “the true test of an affirmative action program is usually not the nature of the government’s interest, but rather the adequacy of the evidence of discrimination offered to show that interest.” Ensley Branch, N.A.A. C.P., 31 F.3d at 1565 (citations and internal quotations omitted). “[A] district court must make a factual determination that the public employer has a strong basis in evidence for its conclusion that racial discrimination necessitates affirmative action.” Id. “The exact quantum of evidence required eludes precise definition” but “the proffered evidence must approach a prima facie ease of a constitutional or statutory violation” Peightal II, 26 F.3d at 1553 (citing Croson, 488 U.S. at 500, 109 S.Ct. at 725) (internal quotations omitted). “Evidence of “gross statistical disparities” between the number of MWBEs being utilized in Dade County construction contracts and the number of MWBEs available to do the work required under the County contracts “may constitute prima facie proof of a pattern or practice of discrimination.” Id. (citing Croson, 488 U.S. at 501, 109 S.Ct. at 725-26). Dade County must therefore demonstrate that gross statistical disparities exist between the proportion of MBEs awarded County construction contracts and the proportion of MBEs in the local construction industry “willing and able to do the work” in order to justify its use of race and ethnicity-conscious contract measures. Ensley Branch, N.A.A.C.P., 31 F.3d at 1565; see also Croson, 488 U.S. at 501-02, 109 S.Ct. at 726 (“[WJhere special qualifications are necessary, the relevant statistical pool for purposes of demonstrating discriminatory exclusion must be the number of minorities qualified to undertake the particular task.”) “To adequately assess statistical data, there must be evidence identifying the basic qualifications” of an MBE “willing and able to do the job” and the Court must make a “determination, based upon these qualifications, of the relevant statistical pool with which to make the appropriate, [statistical] comparisons.”- Peightal II, 26 F.3d at 1553-54 (citations omitted). The Croson Court recognized the utility of a type of statistical analysis known as a disparity index for purposes of comparing the proportion of MWBEs qualified to perform the contracts at issue with the proportion of MWBEs actually being awarded the contracts in order to demonstrate the existence of past or present discrimination in the local construction industry. Croson, 488 U.S. at 501-02, 109 S.Ct. at .726. Accordingly, Dade County has conducted disparity analy-ses for BBEs, HBEs, and WBEs in an effort to show that the proportion of qualified MWBES being utilized in County-funded construction is significantly lower than the proportion of qualified MWBEs available in the local construction industry to do the work. A disparity index is calculated by dividing the percentage of MWBEs participating in city contracts by the percentage of qualified MWBEs in the relevant population of local construction firms. Concrete Works, 36 F.3d at 1523 n. 10. The resulting percentage is then multiplied by 100 to yield a number between 0 and 100, with 100 indicating parity, or full participation by MWBEs, given their proportion in the total population of available, qualified contractors. Contractors Ass’n, 6 F.3d at 1005. The number calculated via the disparity analysis, the disparity index, is then tested for its validity through the application of a standard deviation analysis. The Eleventh Circuit has directed that “where the difference between the expected value and the observed number is greater than two or three standard deviations” a presumption of discriminatory conduct is raised. Peightal II, 26 F.3d at 1556 (citing Hazelwood School Dist. v. United States, 433 U.S. 299, 308 n. 13, 97 S.Ct. 2736, 2742 n. 13, 53 L.Ed.2d 768 (1977)). In order to be probative, the “numerical disparities” presented by the defendants must “result from a comparison of the number of qualified MBEs in the particular industry and geographic area with the number of MBEs actually utilized in government contracts.” . Cone Corp., 908 F.2d at 914. Affirmative action programs can be justified by “demonstrating gross statistical disparities between- the proportion of minorities hired by the public employer and the proportion of minorities willing and able to do the work.” Ensley Branch, N.A.AC.P., 31 F.3d at 1565; see also Croson, 488 U.S. at 501, 109 S.Ct. at 726. “At a minimum, howéver, the government entity must consider the number of qualified MBEs in the relevant market and the percentage of total city doEars minority firms receive.” Id. Defendants have proffered several statistical analyses of County construction contracting trends that they claim provide them a strong basis in evidence to show that discrimination occurs in the local construction industry and thus supports the use of race, ethnicity, and gender-conscious measures by the County in awarding contracts. 1. Defendants’ Statistical Analyses— The MRD Study Defendants’ most eompelEng data, and that which they focused on most heavüy at trial, are presented in “A Minority- and Women-Owned Business Discrimination Study” done for the County by MRD Consulting, Inc., and discussed at trial by Dr. Manuel Carvajal, the co-author. Defendant’s Exhibit D (composite), Volumes 1-6 (hereinafter “MRD study”). The bulk of the statistical analysis contained in the MRD study focuses on Dade County procurement contracts. Possibly because construction contracts only comprise ten percent of procurement contracts, at trial the statistical evidence defendants presented focused almost exclusively on nonprocurement contracting, which was a smaE part of the MRD study completed after the main study. ' Tr. 242— 34. Defendants’ expert, Dr. Carvajal, testified that the results of the nonprocurement statistical analysis were the most probative of discrimination that the defendants had. As a result, the Court wiE focus its analysis on the nonprocurement data commensurate with defendants’ evidence and testimony at trial. The MRD study presents the nonprocurement contract data aggregated for all capital construction contracts (ie., SIC 15,16 and 17 together) and disaggregated by SIC category: SIC 15 — general buflding construction; SIC 16 — heavy construction other than budding construction; and SIC 17 — specialty trade construction, which includes electrical, plumbing, heating, ventdating, and air conditioning (HVAC), among others. The Court wiE focus primarily on statistical analyses of the disaggregated data because these data are more likely to reflect the readties of competition in the construction industry. Firms that budd hospitals (SIC 15) do not compete for County contracts with firms that lay asphalt (SIC 16) or firms that install plumbing (SIC 17), therefore comparisons between these disparate entities would not produce a redable portrait of County contracting trends. The MRD statistical analysis evaluates County contracting trends for discrimination in the award of County contracts to BBEs, HBEs, and WBEs. The Court wiE discuss each in turn. A. BBE Utilization in Dade County Construction Contracting i Prime Contracting The MRD study analyzes two pools of Black-owned prime contracting firms, those BBEs that bid at least once for a County capital construction contract (SIC 15, 16, & 17) during the relevant time period (bidders), and those BBEs that were awarded at least one County capital construction contract over the relevant time period (awardees). Defendants’ and Intervenors’ Post Trial Proposed Findings of Fact and Conclusions of Law, 12-13 (hereinafter Defs’ Prop. Findings); Defs’ Ex. L-l. The MRD study looked at two distinct time periods, 1989-1991, and 1993. The proportion of BBEs that bid on at least one County construction contract within each SIC category is compared to the proportion of contract dollars awarded to BBEs within that SIC category. This is done for each SIC category and for 1989-1991 and for 1993. Comparing the proportion of BBEs to the proportion of contract dollars awarded results in a disparity index. This figure is then evaluated through the use of standard deviation analyses to determine whether the figure has statistical significance, that is, whether the standard deviation is greater than two. When the BBE bidder and awardee data are disaggregated by type of construction contract: SIC 15 — general building construction; SIC 16 — heavy construction other than building construction; and SIC 17 — specialty trade construction; and compared to the proportion of contract dollars awarded to BBEs during 1989 to 1991, the results are as follows: BBE Bidders(%) 'w O) CD -73 1 H PQ M SIC 15 SIC 16 SIC 17 H-L 1 — 1 Oi CR CO co co oo ^OH bo cn bo otpio ui ai có Defs’ Prop. Findings 13; Defs’ Trial Exhibit L-l. For SIC 15, the disparity between BBE bidders (13.8) and contract dollars awarded to BBEs (1.8) is 12.6, which is statistically significant at a level of three standard deviations. The disparity between BBE awardees (15.0) ánd contract dollars (1.8) is 11.6, also significant at three standard deviations. The disparity between BBE bidders in SIC 16 (5.2) and contract dollars awarded in SIC 16 (0.5) is 10.1, at 2.6 standard deviations of statistical significance. The disparity for awardees in SIC 16 (3.2) versus contract dollars awarded in SIC .16 (0.5) is 15.5- with statistical significance of 1.9 standard deviations. Finally, for SIC 17, the disparity between BBE bidders (16.2) and contract dollars awarded (4.8) is 29.7, with a standard deviation of 2.3, and for BBE awardees (13.5) versus contract dollars (4.8) is 35.6, at 1.8 standard deviations. In 1993, when disaggregated, the County contracting awards looked like this: BBE Awardees(%) O 1 o O W W M W Si S3 ¡» 24.6 24.1 20.0 SIC 15 SIC 16 SIC 17 4*. «O -4 b boo iq cq co l>OH T — I 1 — 1 C'Q Defs’ Prop. Findings 13-14; Defs’ Trial Exhibit L-3. For SIC 15, the disparity between BBE bidders (17.5) and contract dollars awarded to BBEs in SIC 15 (7.8) is 44.9, which is statistically significant at a level of 1.8 standard deviations. The disparity between BBE awardees in SIC 15 (24.6) and contract dollar’s (7.8) is 31.9, significant at 2.6 standard deviations. The disparity between BBE bidders (16.6) and contract dollars awarded (9.9) in SIC 16 is 59.3, at 1.4 standard deviations of statistical significance, and for awardees in SIC 16 (24.1) versus contract dollars (9.9) is 40.9 with significance of 2.5 standard deviations. Finally, for SIC 17, the disparity between BBE bidders (21.3) and contract dollars awarded (14.0) is 65.6, with no statistical significance, and for BBE awar-dees in SIC 17 (20.0) versus contract dollars (14.0) is 69.9, with no statistical significance. What stands out about data in this part of the MRD study is that the proportion of minority firms that bid on County contracts is not remarkably different than the proportion of minority firms awarded County contracts. For example, in 1993 in SIC categories 15 and 16, BBEs were awarded proportionately more County contracts than .would be expected given their proportion in the population of construction firms bidding for those contracts. This is also the case for SIC 15 in the years between 1989 and 1991. Thus, in half of the SIC categories analyzed, the disparity indices are greater than one when comparing number of BBEs bidding to number of BBEs being awarded contracts, indicating no disparities exist in the proportion of contracts awarded to Black-owned firms for these categories and time periods. The remaining three SIC categories do indicate disparities exist between the number of BBEs bidding on County contracts and the number of contracts awarded to BBEs. However, there are several factors that must be considered in determining the significance of these disparities. First, in two of the SIC categories the disparities are not substantial. In SIC 17, for the years 1989 through 1991, ■ 16.5% of the bidders were BBEs, and they received 13.5% of the contracts awarded. This results in a disparity index of 83.3%. For 1993, BBEs comprised 21.3% of the firms bidding for contracts in SIC 17, and they received 20% of the contracts awarded, for a disparity index of approximately 94%. For SIC 16, BBEs made up 5.2% of the firms bidding on County contracts and received 3.4% of the contracts awarded. This results in a disparity index of 65.4. In general, disparity indices of greater than 80% are not considered substantial. In addition, it is not clear to the Court that the denominator used in the disparity analysis, that is the number of BBEs that bid on a Dade County contract within a certain SIC category, accurately reflects the relevant pool of willing, able and qualified minority firms. Dade County does not have a pre-qualification process through which the County determines whether a particular firm is qualified to do the work required under a specific contract. The only pre-bid qualification the County requires a contractor to meet is that the firm be a licensed contractor able to satisfy the bonding and insurance requirements for the contract being bid upon. This, of course, does not reflect a firm’s ability to perform the work required under the contract. In three of the six SIC categories analyzed, BBEs were getting proportionately more contract awards than non-MWBEs. Of the three categories in which there were disparities between the number of BBEs bidding and the number of contracts awarded BBEs, two categories had nominal disparity indices of 83% and 94%. This does not provide a strong basis in evidence to conclude that discrimination exists in the process by which the County awards contracts, nor that there is discrimination in the local construction industry that results in BBEs being prevented from successfully bidding for County contracts. This leaves one SIC category in which there is a substantial disparity between the number of BBE bidders and the number of contracts awarded. For SIC 16 over the years 1989 — 1991, an analysis of the numbers results in a disparity index of 65.4%. The relevance of this number is unclear for two reasons. First, the underlying data set is relatively small. Only about eight firms out of the 155 that bid on County contracts in SIC 16 over the period 1989-1991 were Black-owned. These eight firms were awarded approximately six contracts out of the 178 the County let over that period. To be strictly proportionate with the percentage of BBE bidders, BBEs should have been awarded nine County contracts oyer that time period rather than six. There are a myriad of possible reasons for this discrepancy. It could be that, though there were eight BBEs' bidding, not all of these firms were actually qualified to do the, work. Perhaps, given that SIC 16 is heavy construction (except for building), the BBEs bidding were too small for the typical size contract awarded for highway construction or bridge construction. Conceivably, the BBEs were simply not competitive in their bids. And, possibly, the failure to receive three contract awards could be due to discrimination, either within the County government or in the local construction industry as a whole. The second reason the disparity in SIC 16 for 1989-1991 is suspect is because in 1993 the disparity index is positive for BBEs, at 1.45. Thus, BBEs actually received significantly more contract awards than would be expected given their proportionate share. This is not to say that the Black-owned firms did not deserve or were not qualified for the contracts they were awarded. The Court merely observes that the phenomenon whereby a firm successfully bids upon and is awarded a contract at any given time is dependent on a multitude of factors in a competitive and dynamic system, including the availability of suppliers, subcontractors, other contract commitments the firm may have, and the firm’s ability to obtain the financing and bonding required to do the work. While a firm may be an unsuccessful bidder at one time for any one of these reasons, the same firm may well be successful at the next bid opportunity because of changed circumstances. Because of the lack of convincing evidence that there is any discernable discrimination occurring in the award of contracts to BBEs, the defendants understandably have focused on the^ disparity between the proportion of BBE bidders and the proportion of contract dollars these firms receive. Essentially, defendants are asserting that, despite the fact that BBEs áre getting their fair share of County construction contracts, the County award process is biased in a way that results in BBEs getting a disproportionate share of lower-dollar contracts. Plaintiffs contend that the disparities defendants point to in contract dollars awarded do not necessarily mean that discrimination is occurring in the award of Dade County construction contracts. Defendants’ experts agree that disparities alone do not prove that discrimination is in fact occurring. Tr. 34, 40, 142. Plaintiffs’ argue that the disparities depicted by the MRD study simply reflect the fact that MWBEs tend to be newer, smaller, and less experienced firms — the majority having entered the construction industry in the last ten years — and thus are more often successful bidders on lower dollar contracts rather than higher dollar contracts. The MRD study notes, and defendants’ expert testified to at trial, MWBEs tend to be smaller and less established. Tr. 158; Defs’ Ex. D, vol. 1, p. 81 & vol. 3, p. 1. The MRD study also states that the majority of non-MWBEs have been in business more than ten years. Defs’ Ex. D, vol. 1, p. 65. That MWBEs are on average smaller is buttressed by Dade County census and survey data. The evidence plaintiffs introduced suggests that, as of the 1987 Business Census, BBEs had 3.1 employees on average, HBEs had an average of 4.3 employees, WBEs had 6.6 employees on average, and non-MWBEs had an average of 14.1 employees. Plntfs’ Ex. 67. The tables developed pursuant to the MRD study .are further evidence that MWBEs tend to be smaller in size than non-MWBEs. For example, the MRD study estimated the size of firms by détermining the largest County contract award a firm had bid upon. For this purpose, the study broke down contract awards into three categories: awards under $500,000, awards between $500,000 and $2,999,999, and awards over $3 million. Of the 20 BBEs that bid for County contracts under SIC 15 — general building construction — between 1989-1991, 14, or 70 percent, submitted bids no larger than $500,-000. The largest bid submitted for the remaining 30 percent is between $500,000 and $2,999,999. No BBEs bid on County contracts over $3 million during the three year period. Defs’ Ex. A-l, Table C-42, pp. 3-4. For the same SIC category and time period, there were 77 non-MWBE bidders. Nineteen had largest bids of less that $500,000 (25%), thirty had largest bids between $500,-000 — $2,999,999 (39%), and twenty-eight had largest bids of over $3 million (36%). Id. Of the eight BBEs bidding for contracts awarded under SIC 16 — heavy construction (except building) — the largest bid submitted for four of the eight is under $500,000 (50%). Three BBEs submitted their largest bid between $500,000 and $2,999,999 (37%). One BBE bid on an award of over $3 million (13%). Id. at 5-6. Non-MWBEs bidding for contracts in SIC 16 from 1989-1991 totaled 107 firms. Thirty non-MWBEs submitted maximum bids of under $500,000 (28%), while 32 submitted largest bids between $500,000 and $2,999,999 (30%), and 45 had maximum bids over $3 million (42%). Id. The trend is similar for SIC 17 — specialty trade construction. Of the 17 BBEs that bid on these contracts between 1989 and 1991,13 had largest bids under $500,000 (76%), 4 had largest bids between $500,000 (24%), and there were no BBE bidders for contracts over $3 million. Id. at 7-8. Non-MWBEs comprised 53 of the firms bidding overall, 31 with a maximum bid of less than $500,000 (59%), 14 with maximum bids between $500,-000 and $2,999,999 (26%), and 8 with maximum bids over $3 million (15%). Id. The totality of this evidence clearly supports the conclusion that BBEs tend to be smaller contractors, the majority competing for contract awards of under $500,000. Conversely, non-MWBEs are almost evenly distributed over the range of County contracts awarded. It is important to note that the average capital construction contract let by Dade County is worth approximately $3 million. Defs’ Ex. D, vol. 6, p. 2. In order to bid and win a large contract, it is reasonable to assume that a firm must be sufficiently large and established to achieve the financing, bonding and insurance requisites necessary to put forth a successful bid. Given this, it is likewise reasonable to conclude that larger firms may, on average, have higher dollar contract awards. Concomitantly, smaller firms would be expected to have smaller average dollar awards. If, as the evidence indicates, MWBEs tend to be, on average, smaller, and non-MWBEs tend to be larger, this could account for disparities in the average size of the County contract awarded. The strength of this logic has not been lost on the defendants. Recognizing that the size and experience of a firm can impact both the likelihood of being awarded a contract and the dollar value of the contract awarded, defendants attempted to account for these factors by performing regression analyses. Regression analysis is a statistical model used to estimate both the nature and magnitude of the relationship that exists between a dependent variable Y and one or more independent or explanatory variables X. For example, a dependent variable could be dollar value of a contract award and an explanatory variable could be the size of the firm. A regression using these variables attempts to assess whether the size of the firm correlates to the dollar value of a contract a firm is awarded. Defs’ Ex. D, vol. 3, p. 101. As defendants’ expert explained, a regression analysis evaluates whether an event is happening due to chance or random occurrences, or whether the event is occurring as a result of a systematic pattern that is not attributable to chance. Tr. 140,159. Defendants argue that their statistical analyses show that the disparity between the proportion of BBEs awarded County contracts and the proportion of contract dollars received by BBEs is not the result of the size or experience differential between BBEs and non-MWBEs, nor is it the result of chance, rather it is the result of a pattern and practice of discrimination against BBEs in the award of Dade County contract dollars. Whether a regression analysis indeed shows that the award disparities are due to discrimination is determined by the level of statistical significance of the regression equation. The higher the level of statistical significance, the less likely an event is random. By regressing for an explanatory variable such as size of firm, defendants are attempting to show that the disparity in contract dollars awarded to BBEs is not a result of the size of the firm, rather, it is attributable to the fact that the firm" is minority-owned versus non-minority owned. Tr. 159. In order for this explanation to be persuasive, the statistical significance of the regression equation must be between two and three standard deviations. Defendants’ study utilizes two explanatory variables to account for firm size: total awarded value of all contracts bid on; and largest single contract awarded. Tr. 1-52; Defs’ Ex. L-2. When controlling for firm size by regressing for total awarded value of all contracts for the years 1989-1991, the only SIC category in which the award disparity appears to be statistically significant is SIC 15, heavy building construction, at 2.5 standard deviations. Defs’ Ex. L-2. The same regression for SIC 16 results in a standard deviation of 1.3. Id. For SIC 17, the regression indicates that there is no statistically significant disparity in contract dollars awarded. Id.; Tr. 161-62. The results are substantially the same when controlling for firm size by regressing for largest contract awarded in the years 1989-1991. Again, the only SIC category in which the award disparity appears to be statistically significant is SIC 15, at 2.8 standard deviations. Defs’ Ex. L-2. This time the regression, for SIC 16 results in no statistically significant disparities in contract dollars awarded. Id. For SIC 17 the regression suggests a statistical significance of 1.8 standard deviations. Id. The MRD study also presents the results of these same regression analyses run for the year 1993. Defs’ Ex. L-4. None of the SIC categories analyzed for total awarded value of all contracts or for largest contract awarded demonstrate statistically significant disparities of two standard deviations or more. Id. For total awarded value of contracts bid in 1993, SIC 15 shows no statistical significance. The regressions for SIC 16 and 17 both result in 1.2 standard deviations. Id. The regression analysis for largest contract awarded in 1993 indicates that the disparities in SIC 15 are at 1.2 standard deviations, while SIC 16- and 17 demonstrate no statistically significant disparities at all. The Court does not find this evidence particularly persuasive. The only SIC category for which there appeared a statistically significant disparity between the dollars awards going to BBEs versus dollar awards going to non-MWBEs is SIC 15 over the time period from 198.9-1991. By 1993, the regression analyses no longer indicates that the disparities in SIC 15 are statistically significant. The results of the regression analyses appear' to be problematic for other reasons. For example, at trial defendants’ expert admitted that there are instances in which their regression analyses indicate that the more experience and success a firm has had in bidding on Dade County contracts, the less likely that firm is win a County contract in the future. Tr. 231-235. This conclusion would seem counterintuitive, especially since the testimony from experts on both sides and the studies submitted by both sides exhibits a general consensus that the more experience a firm has, and the larger a firm is, the greater the number and dollar value of contracts a firm can successfully bid upon. In addition, the Court is not convinced of the reliability of the data underlying this portion of the MRD study. Although the bulk of the statistical analysis contained in the MRD study focuses on Dade County procurement contracts, at trial defendants statistical evidence focused almost exclusively on a small part of the MRD study completed after the main study which dealt with non-procurement contracting. Tr. 242-34. Defendants’ expert testified that the results of the nonprocurement statistical analysis were the most probative of discrimination, Tr. 240, but the MRD study itself offers the following caveat regarding the reliability of the non-procurement data: [T]he [nonprocurement data] cannot be nearly as accurate as the estimates derived from the procurement file for several reasons. First, the nonprocurement data set is a sample, whereas the procurement data set represents the universe. Second, eon-tractor-related information gathered for the nonprocurement analysis is derived from telephone interviews; answers are subject to contractors’ availability and willingness to respond, as well as the accuracy of their response ... And third, nonpro-curement activities are far more hetroge-neous than procurement activities. Defs’ Ex. D, vol. 6, p. 1. Nonetheless, defendants did not utilize any of the procurement data at trial, relying instead upon the non-procurement data as the foundation of their case, despite their acknowledged weaknesses. For these reasons, the Court finds that the statistical data presented to show discrimination in the award of prime contracts to BBEs fall short of providing a strong basis in evidence for the BBE program. ii BBE Subcontracting Defendants also presented disparity and regression analyses for a pool of firms described as subcontractors. The firms evaluated in this portion of the MRD study were identified as subcontracting firms because each of them has filed a subcontractors release of lien on at least one Dade County contract over the period 1991-1994. The statistical analyses were performed for each SIC category and for BBEs, HBEs and WBEs. See, Defs’ Tr. Ex. L-5, L-6, M-5, M-6, N-5, N-6 (“X” files). Defendants’ analysis compares the proportion of BBEs that filed a county release of lien with the proportion of sales and receipts claimed by BBEs. Defs’ Tr. Ex. L-5. For SIC 15, between 1991 and 1994, 11.6% of the firms that filed a release of lien were BBEs, while the sales and receipts of these BBEs comprised 1.3% of total sales and receipts claimed by all firms which had filed a release of lien with the County. This results in a disparity index of 11, at 1.8 standard deviations, which is not statistically significant to a level of two standard deviations. The disparity index calculated for SIC 16 had no calculated statistical significance whatsoever. For SIC 17, the disparity index between BBEs and sales receipts is 54.9. Again, the statistical significance is low, at 1.3 standard deviations. Because the size of a firm impacts the size of its sales and receipts, defendants performed regression analyses using number of employees as an explanatory variable to control for the impact of size of firm on the dependent variable sales and receipts. The regressions for all of the SIC categories were below 2 standard deviations of statistical significance. Defs’ Ex. L-6. In addition to the striking fact that none of the disparity or regression analyses resulted in a statistical significance of two standard deviations, the data relied upon do not lend themselves to developing accurate conclusions about subcontracting trends in Dade County. The first problem is that the pool of identified subcontractors being evaluated may not in fact derive their primary source of income from subcontracting. The fact that a firm has filed a subcontractors release of lien does not preclude that firm from deriving most of its income from other sources, such as prime contracting. More importantly, the sales and receipts data used in the statistical analyses come from all sources, and is not limited to sources within Dade County. A subcontractor that does the majority of its work in Broward or Palm Beach County, or perhaps outside the state of Florida, but has done one job in Dade County, would have all of its sales and receipts included in this evaluation. The Supreme Court has made it clear that an appropriate statistical evaluation must confine itself to the geographic boundaries of the jurisdiction to which the affirmative action program applies. The Croson Court found Richmond’s justification for its subcontracting measures unpersuasive because, inter alias there was no evidence of the proportion of contract dollars minorities received as subcontractors. Croson, 488 U.S. at 502, 109 S.Ct. at 726. Dade County has likewise been unable to produ