The federal government has underway the first intensive review of the programs it initiated a decade ago to nourish minority businesses.
Predating last week's Bakke decision in the Supreme Court, the review reflects widespread dissatisfaction with the programs on the part of participants, Congress, and people who are now excluded but want in.
The programs, which began with Richard N. Nixon's "black capitalism" proposal in 1968, have provided either contracts or management assistance to minority-owned firms. But they are generally regarded as failures.
Minority business receipts today are about $16.4 billion, or about 1 percent of the gross receipts of all businesses.
The review is taking place in Congress, the Small Business Administration, the Commerce Department, and several other executive agencies. It was sparked by House passage in March of a bill to redirect the most significant of the programs, SBA's contract set-aside program.
The vote by the House has led to:
Vigorous efforts by women's groups to define eligibility for programs in terms that would cover women:
Attempts by at least three federal agencies to arrive at a single definition of "minority";
Action on three other minority business bills that have lain fallow for months; and
Lobbying by Commerce Secretary Juanita Kreps, Undersecretary Sidney Harman and others against proposals to shift functions of the department's Office of Minority Business Enterprise to the Small Business Administration.
The House bill, sponsored by Rep. Joseph A. Addabbo (D-N.Y.), would require companies that bid on major federal contracts to agree in advance to subcontract portions of the work to minority firms, and authorize the government to set aside contracts best suited for minority firms.
And to counter a criticism of existing programs, the Addabbo bill and a companion bill would require that companies in the program be given management, accounting and technical assistance.
But the most contentious issue is elibilitiy and the strongest opposition comes from women's groups, who fear the bill would make it difficult for women to qualify for federal assistance.
The Addabbo bill indirectly finds that blacks and Hispanics suffer from racial discrimination and singles them out as beneficiaries.
The carefully drafted language in effect, puts the burden on women and others who wish to qualify for assistance, to prove they are "socially and economically disadvantaged," and on the government to prove that blacks and Hispanics are not.
But women's groups disagree.
"Basically, we believe the program should be one tool in business development, and should be available to all persons, regardless of race, color, creed, or sex," said Dona O'Bannon, president of the National Association of Women Business Owners.
Added a White House official deeply involved in women's business issues, "We strongly feel that because some women have the same social and economic disadvantages as minorities, it's important to have eligibility determined on a case-by-case basis."
A presidentially appointed task force as women business owners seconded that view last week, recommending that eligibility be determined on a case-by-case basis, with no special advantage for blacks or other minorities.
The Senate Small Business Committee gutted the Addabbo bill in a markup last week, striking the subcontracting language and Addabbo's eligibility formula. In the Senate version, the bill would provide more management assistance for fewer companies than are now in the program.
Because of the absence of interested senators from the markup session, however, another markup will be held later this month, with all of the bill's provisions again open to change.
The Addabbo bill's definition of what qualifies as a minority business could solve one problem, however.
"What rankles contractors is the lack of uniformity" in the way various government agencies define minority, said Richard Chastain, chairman of the equal opportunity committee of the Associated General Contractors, the nation's largest organization of major construction companies.
At present a multiagency working group, the Interagency Council, is working on a uniform definition, and the Addabbo definition is seen as the most feasible alternative available.
The final fight now under way affects the future of the Commerce Department's Office of Minority Business Enterprise, but it could scuttle everything else.
The Senate Small Business Committee, which plans to mark up the Addabbo bill on June 22, also has before it legislation that would shift OMBE's functions to the Small Business Administration. It is possible that the second bill could be merged with the Addabbo bill.
"SBA is the logical place for this," said Sen. Sam Nunn (D-Ga.). a member of the committee and sponsor of the proposal. "They're handling the [contract] money and they should handle the management assistance."
But the Commerce Department opposes the move, and OMBE, which distributed $37 million in services in 1976, has a vocal constituency.
Commerce has proposed legislation that would make OMBE a statutory subagency.
If the Senate Small Business Committee votes to shift OMBE's funcations to SBA, the Commerce Department may ask that the bill be referred to the Senate Commerce Committee, which could let the whole issue die.
If that happens, supporters of a revamped government effort to support minority businesses fear there will be little chance to try again soon.