FRANKFORT — Western Kentucky's biggest road contractor faced a problem when he needed women and minority subcontractors for highway work.

        Jim “Scotty” Scott, chairman of Scotty's Contracting and Stone in Bowling Green, said there weren't enough minority-owned subcontractors in his part of the state to meet the federal government's requirement to give disadvantaged companies a share of federally funded road jobs.

        So the wives of Scotty's four top officials formed Contractors Corp., which handles landscaping and seeding on some of Scotty's projects. The state certified Contractors Corp. as a Disadvantaged Business Enterprise (DBE) in August 2000, allowing the company to take part in the federal set-aside program.

        Kentucky's 67 certified disadvantaged road contractors were paid about $37 million for state highway work in the fiscal year that ended June 30. Of that, about $27.5 million went to firms owned by white women, including some well-connected women like those at Contractors Corp., which has done more than $3.3 million in road work under the program.

        Critics say prime contractors have defeated the program's goal of helping minority and women business owners break into a construction industry dominated by white men, and they blame the state for lax oversight.

        “What has happened was rather than people trying to figure out how to make the program work, they (prime contractors) spend the same time trying to figure out how to work around the program,” Maurice Sweeney, who headed the program for the cabinet from 1992 to 1996, told The Courier-Journal.

        The program “has done more for well-to-do women and for general contractors than it's done for anybody,” said Mr. Sweeney, who now heads a company that hauls construction materials and has done some work under the program.

        Marvin Gateskill, president of G&G Paving & Construction Co. Inc. of Lexington and who is black, said he built his business largely without the federal program, although he has been certified about 10 years.

        “I don't do a lot of DBE work,” said Mr. Gateskill, who said the program is “set up for appearances.” Mainly, he works only with prime contractors he already knows.

        Two weeks ago, the FBI and the state attorney general's office announced they are jointly investigating Kentucky's program. The announcement came after a special report commissioned by the Transportation Cabinet concluded the program was mismanaged and had certified one company even though it was often just a “middleman” that didn't perform any work.

        The cabinet has since taken steps to remove that company, GECO Enterprises of London, from the program.

        The Disadvantaged Business Enterprise program, established in 1983, requires awarding a percentage of federally funded construction contracts, mostly road work, to companies certified as being owned and operated by minorities or women.

        The federal government has set a goal that 10 percent of work on federally funded road contracts awarded by the Kentucky Transportation Cabinet be handled by such companies.

        Subcontractors get work by either contacting a prime contractor after a project is advertised, or by being asked by the prime contractor to bid for a piece of a project.

        State Sen. Gerald Neal, a Lou isville Democrat and the Senate's only black, said he's concerned about whether the program works as it should.

        “The idea was to put women and minorities in a position to be competitive for this kind of business where they have been historically locked out,” Mr. Neal said. “It's kind of hard to believe that a wife to a major contractor doing the same kind of work would need that kind of leverage at all.”'

        Joseph Famularo, the former federal prosecutor recently named by Gov. Paul Patton to investigate the program and other Transportation Cabinet problems, said his initial look at the program shows it needs “very, very serious revamping.”

        Mr. Scott, the Bowling Green contractor, said he agrees with the program's goals but it's hard to find qualified subcontractors in rural areas for particular types of work.

        “Where do you find them?” he asked. “That's my problem.”

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