Businesses opposed to programs that set aside chunks of work on government contracts for companies owned by women, blacks or Hispanics are getting more outspoken in their campaign against the policy.
They will be voicing their views this week at yet another forum, part of the wide-ranging hearings the Civil Rights Commission is holding to look into affirmative action. On Wednesday and Thursday, three separate panels will explore the set-aside question.
Some government procurement is open only to bids from companies run by members of groups that are deemed to have been historically discriminated against -- disadvantaged business enterprises (DBEs), in the current unfortunate jargon. Other, bigger, contracts are awarded only to prime contractors who submit plans to channel at least 10 percent of the job to DBE subcontractors.
"The scheme has made it easier for members of disadvantaged groups to create new companies and enter the mainstream of construction, but there is also controversy," Engineering News-Record notes in its current issue. The construction industry newsmagazine published by McGraw-Hill says that under the program, "while many new DBEs have been created, many white-owned firms have stopped bidding government work, some subcontractors have folded because they could not compete against DBE subs awarded jobs at any price, and 'sham' DBEs have appeared."
The opposition is heating up just as local governments increasingly are opting to follow the federal set-aside program -- and even to push it well beyond Washington standards. Associated General Contractors, the prime contractors trade association, reports that 22 states and 50 local governments now run their own DBE set-aside programs on construction projects, and that the trend is to increase the percentage of work covered.
Dallas, for instance, is upping the goal from the federal norm of 10 percent to 15 percent. The figure is 11.3 percent in New Mexico, 12 percent in New York, 13 percent in California, 35 percent here in the District, and 50 percent in Puerto Rico.
AGC has been the leader in the fight against the concept. "All special preference programs are wrong legally and morally," insists association President Doug Pitcock. Last summer, the group distributed on Capitol Hill a compilation of letters from contractors complaining of being overcharged by DBEs or receiving substandard work -- a packet that bore the explosive title, "Discriminatory Impact of Racist and Other Special Preference Procurement Programs."
Other construction industry groups side with AGC in the controversy. For instance, a policy statement by the Associated Specialty Contractors says, "It is time that this matter be corrected and that people realize that it is the preferential regulations that are racist and not the attitude of contractors, who want to be able to compete on a local level with all competitors, minority or otherwise."
Government agencies admit the truth of one persistent charge from the opponents: that many DBE subcontracts go to companies in which the woman or black nominally in charge has little managerial responsibility and is merely fronting for the real white male owners. But they say that new screening procedures -- and tougher actions by the states in refusing to certify sham operations -- are reducing the abuse considerably.
Big money is involved. In fiscal 1984, Uncle Sam bought almost $6 billion worth of goods and services directly from DBEs. Such companies got, in addition, a sizable slice of the federal money passed on to the states under grant programs: They took in $1.2 billion on Federal Highway Administration programs alone. "The federal government is making significant progress in increasing opportunities for minority-owned businesses in the federal marketplace," the head of the Commerce Department DBE effort, James H. Richardson, told Engineering News-Record.
Some local business organizations also are reaching out to include women- and minority-owned businesses, offering, for instance, dues discounts and seminars geared to their particular managerial problems. In fact, at this week's Civil Rights Commission hearings, the National Association of Manufacturers will speak out in favor of the set-aside program. Pointing to the same results that Richardson cites, the NAM will say that the concept seems to be doing what it was meant to do: speed the entry of such businesses into the mainstream of American commerce.
The split in the business community merely reflects the split in the general population over whether national policies should ignore race and sex, or be structured to counter the effects of past prejudice. That split ensures that the issue of business set-asides will continue to be a contentious one.