On a North Carolina public construction project, who has to do the work of finding and using minority businesses: the contractor, the city or county, or both?

Plain-English summary

North Carolina's Special Assistant to the Governor for Minority Affairs asked whether separate-prime public construction contracts were exempt from the minority-business participation goal, and who had to make a good-faith recruitment effort under each contracting system. The AG said separate-prime contracts were covered. The opinion quotes G.S. 143-128(c): the State had a verifiable ten percent goal for each project under that section, while each city, county, or other public body had to adopt its own verifiable percentage goal after notice and a public hearing.

For a single-prime contract, the AG said the prime contractor had to make the good-faith effort to recruit and select minority businesses. The awarding authority had to adopt written guidelines specifying the contractor's actions; the statute required the contractor to document those actions in writing to the authority. For a separate-prime contract, the AG said the separate prime contractors had to make the good-faith effort, while the authority had to adopt written guidelines specifying the actions those contractors should take.

The opinion identifies who has those responsibilities. It does not address bid rejection, breach, penalties, or any other result when the percentage goal is missed.

Currency note

This opinion interprets G.S. 143-128 as quoted in 1991. Check the current statute and project requirements before relying on its description of a present contract.

Background and statutory framework

The statute quoted in the opinion applies the participation goal to projects awarded under G.S. 143-128. The questions distinguished the single-prime and separate-prime systems. The AG's answers did not exempt the separate-prime system: the statutory provision describes a goal for contracts awarded under the section, and subsection (c)(3) expressly addresses separate-prime contracts.

The opinion explains the written-guideline duty for the awarding authority and the recruitment duty for contractors under both systems. It does not set out a test for whether a particular contractor's effort is sufficient or decide the consequence of falling short of a goal.

Common questions

Are separate-prime contracts exempt from the participation goal?

No. The AG read G.S. 143-128(c) to include contracts awarded by the State and other public bodies under that section, including the separate-prime system.

Who makes the good-faith effort under a single-prime contract?

The single-prime contractor. The awarding authority must adopt written guidelines for the contractor's actions, and the contractor must document the required actions in writing to the authority.

Who makes that effort under a separate-prime contract?

The separate prime contractors. The awarding authority must adopt written guidelines specifying the actions they should take to seek minority participation.

Does the opinion say what happens if a contractor misses the percentage goal?

No. It answers who has the recruitment and guideline duties, without deciding whether a shortfall affects the bid or contract.

Citations

• N.C.G.S. § 143-128 (public construction contracting)
• N.C.G.S. § 143-128(c) (verifiable percentage goal)
• N.C.G.S. § 143-128(c)(3) (separate-prime good faith)
• N.C.G.S. § 143-128(c)(4) (single-prime good faith)

Source

• Landing page: https://ncdoj.gov/opinions/minority-business-selections/

Original opinion text

Subject: Minority Business Selections Under G.S. 143-128

Requested By: James K. Polk, Special Assistant to the Governor for Minority Affairs

Questions:

(1) Under G.S. 143-128, are contracts awarded by the State, city, county, or other public body pursuant to the separate prime contractor system exempt from the "verifiable percentage goal for participation by minority businesses" requirement as set forth in G.S. 143-128(c)?

(2) Under G.S. 143-128(c)(4), who is required to make the good faith effort to recruit and select minority businesses for participation in contracts awarded under this section, the single prime contractor or the awarding authority?

(3) Under G.S. 143-128(c)(3), who is required to make the good faith effort to recruit and select minority businesses for participation in contracts awarded under this section, the separate prime contractor or the awarding authority?

Conclusions:

(1) No.
(2) Single prime contractor.
(3) The separate prime contractor is required to make the "good faith" effort, but the awarding authority is required to adopt guidelines.

(1) Contracts awarded by the State, city, county or other public body are specifically included for verifiable percentage purposes as clearly stated in G.S. 143-128(c) as follows:

(c) The State shall have a verifiable ten percent (10%) goal for participation by minority businesses in the total value of work for each project for which a contract or contracts are awarded pursuant to this section. Each city, county or other public body shall adopt, after a notice and public hearing, an appropriate verifiable percentage goal for participation by minority businesses in the total value of work for which a contract or contracts are awarded pursuant to this section.

(2) G.S. 143-128(c)(4) provides that "'verifiable goal' means for purposes of the single-prime contract system, that the awarding authority has adopted written guidelines specifying the actions that the prime contractor must take to ensure a good faith effort in the recruitment and selection of minority businesses for participation in contracts awarded under this section; the required actions must be documented in writing by the contractor to the appropriate awarding authority." This section clearly states that the single-prime contractor is the one who is required to make a good faith effort to recruit and select minority businesses for participation in contracts under this particular section. The awarding authority must adopt written guidelines which specify the actions that the prime contractor must take.

(3) G.S. 143-128(c)(3) provides that "'verifiable goal' means for purposes of the separate prime contract system, that the awarding authority has adopted written guidelines specifying the actions that will be taken to ensure a good faith effort in the recruitment and selection of minority businesses for participation in contracts awarded under this section." These written guidelines should specify actions which must be taken by the separate prime contractors to seek minority participation.

Lacy H. Thornburg, Attorney General
D. David Steinbock, Assistant Attorney General