Equal Opportunity:

Ownership by Minority, Female, and Disadvantaged Firms in the Pipeline Industry

GAO-12-896R: Published: Aug 2, 2012. Publicly Released: Aug 2, 2012.

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Contact:

Susan A. Fleming
(202) 512-2834
flemings@gao.gov

 

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What GAO Found

Minority- or female-owned, minority-owned, and female-owned firms represented 15 percent, 6 percent and 10 percent, respectively, of firms in the U.S. pipeline industry in 2007. In terms of market share, minority- or female-owned firms are estimated to have accounted for a total of 13 percent of industry receipts, with minority-owned firms having accounted for 3 percent and female-owned firms having accounted for 11 percent of receipts.

Additionally, minority- or female-owned firms accounted for about $484 million out of $3 billion—or 16 percent—of federal contract obligations to the pipeline industry from 2007 to 2011. The majority of these obligations went to minority-owned firms for pipeline construction contracts. About $246 million—or 8 percent—of federal contract obligations went to disadvantaged pipeline firms, which may be minority-owned or female-owned firms, from 2007 to 2011. These obligations were also primarily for construction contracts.

Why GAO Did This Study

The U.S. pipeline industry is large and dynamic. In 2007, the most recent year for which industry-wide data are available, approximately 2,500 firms operated and constructed natural gas and hazardous liquid pipelines in the United States. These firms generated almost $200 billion in receipts and employed approximately 275,000 workers. There are currently more than 2.5 million miles of pipeline across the country, and recent shale oil and gas exploration has spurred construction of new pipeline infrastructure, as some firms take advantage of improved drilling technologies to access large volumes of oil and gas found in fine-grain sedimentary rocks.

The Pipeline Safety, Regulatory Certainty, and Job Creation Act of 2011 mandated that GAO assess—based on available information—the levels and types of participation of minority-owned, woman-owned, and disadvantaged firms in the construction and operation of pipeline facilities in the United States. Accordingly, this report presents available data on (1) the representation of these firms in the pipeline industry and (2) federal funding obligated to firms in these categories.

For more informatin, contact Susan Fleming at (202) 512-2834 or flemings@gao.gov.

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