Several government agencies have violated the law by awarding at least $140 million worth of federal contracts without a required provision for minority or small business participation.
The violations -- blamed in part on the newness of the law -- were revealed yesterday by Rep. Joseph P. Addabbo (D-N.Y.), author of the legislation requiring all federal contracting agencies to provide for minority and small business participation in major contracts. The law went into effect in May.
Addabbo learned of the violations after writing all contracting agencies asking how they were complying. Although only a handful of agencies have reported so far, the Department of Health, Education and Welfare said it has awarded approximately 99 contracts worth $133.9 million without the required minority or small business provision. The Department of Housing and Urban Development reported it has awarded $7.5 million in contracts without the provision.
Addabbo called the performances by the two agencies "very shabby" and denounced the "business-as-usual" attitude of the federal contracting officials.
Contracting officials blamed the noncompliance on start-up problems, vague regulations for implementing the law and the fact that some of the contracts in question were in the pipeline long before the law was implemented. c
"Our figures are not so bad as they look," said Richard Clinkscales, director of the office responsible for crrying out the law at HEW. "The important thing is that we needed additional guidelines" before the law could be put into effect at HEW, he said. Clinkscales said he expected theprogram to be fully implemented by mid-December.
The first account of potential problems in carrying out the law surfaced last month in a national business publication, Electronic Buyers News. According to that account, "hundreds of millions of dollars of federal contracts awarded . . . since July have been ruled 'legally deficient'" by the General Accounting Office.
The GAO said so in an Oct. 19 letter to Addabbo and also said that in those cases contracts might be modified, allowed to proceed, or be terminated and resolicited. Addabbo and others said they do not expect wholesale cancellation of contracts.
The GAO said Congress clearly didn't intend for the law to be implemented immediately but that federal agencies should have begun abiding by it as soon as implementing regulations were issued.
Addabbo's office said that in the case of civilian departments, that date was May 22, when the General Services Administration sent a telegram to all agencies directing them to use regulations written by the Office of Federal Procurement Policy. The telegram was published in the Federal Register in July, and several agencies are still working on their own regulations, federal officials said yesterday.
"There were regulations there and they were told to use them and, in fact, they did not," said Thomas Trimboli, majority counsel to the House Small Business Committee. "There's no excuse for not implementing the law, especially when we spend about $2 billion a week in federal contracts."
The law, which was enacted in 1978 requires the government to tell contenders for major construction and procurement contracts that it intends to encourage minority and small business subcontracting and for the offerer or bidder to submit an acceptable small business subcontracting plan. Those plans are to be made part of the final contract. The law covers contracts of more than $1 million for construction and more than $500,000 for goods and services.
Eugene Baker, president of the National Association of Black Manufacturers, said yesterday that government agencies have failed to comply with the law "because of closet racists and institutional racism" in the bureaucracy. Baker said he believes the Carter administration is committed to increasing minority and small business participation but that progress is held up by bureaucrats.