Summary: GAO responded to letters questioning the definition of minorities used in assessing eligibility for participation as a minority business enterprise under contracts for the construction of the Fort McHenry Highway Tunnel. The tunnel project is partially funded by a grant from the Federal Highway Administration (FHwA). The letters indicated that FHwA required that a more restrictive definition of minorities be used than would have been applicable under Maryland law. It was suggested that FHwA imposed its own definition of minorities which violates the terms of the regulations of the Office of Management and Budget (OMB). In 1975, FHwA established a minority business preference program embodying the general principles of the Executive Order which promote minority business participation in federal-aid highway projects. GAO believes that this Executive Order does not either mandate or require the adoption of the minority definition contained in the order, but instead establishes the principles upon which agencies may base their own minority business programs. GAO believes that the regulations issued by FHwA are a product of an authorized exercise of judgment and discretion by FHwA in its effort to effect the national policy of promoting minority business efforts. FHwA imposition of a more restrictive definition of minorities than that which would have been applicable under Maryland law does not conflict with OMB regulations. GAO found no basis to conclude that the failure of FHwA to defer to Maryland's minority business program was otherwise unlawful or improper.
