The big talk among the power brokers in town is about equity for blacks. White developers are making noises that sound as if they were being strong-armed in the name of affirmative action and equal rights for blacks. They say some blacks demand a free share of their million-dollar projects, no money invested. The black people getting in on the deals say, "No one here but us previously oppressed black people, doing what white businessmen have been doing for years." On the sidelines black and white people nod and are quick to ask, "Who are the black people getting in on the big deals? (How can I?)"
The city government holds the key to the whole debate. It is a stated goal of the Barry administration to help black businessmen prosper and become a a permanent part of the city's business elite. For many people -- black and white, but especially black -- there is the idea that white businessmen, through the board of trade; run this town. The businessmen are helped to keep control, the theory goes, by the mostly white Congress.
The premier effort by the mayor has been to get blacks included in the development teams for the multimillion-dollar downtown redevelopment. But there is a far dirtier dogfight on the black-white business front in the District among small businessmen. As in the equity story, the city government is the moving force. This fight has to do with who gets millions of dollars in city contracts: white businessmen who have held the contract for years and have generally done a god job or blacks who are looking for a break to get their businesses off the ground.
Here is a sample of the action:
Kellogg's, the cereal company, has been selling cartons of its cereals to District public schools through a local white businessman for several years. The contract is worth about a million dollars. This year, however, the city's Minority Business Opportunity Commission found a black-owned firm to bid on the cereal contract. That firm offered to sell cereal to the schools -- including distribution -- for about $13.82 a carton. The white businessman had been selling and distributing the cereal for about $14 a carton.
When the white businessman learned he was losing the contract, according to Courtland Cox, director of the MBOC, he went to Kellogg's. The white businessman tried to get Kellogg's not to sell its cereal to the black businessman at the same low price at which they sold it to him.
When Kellogg's heard of the fight over the D.C. schools contract, it decided to try to undersell both local businessmen. It put in a bid with the D.C. schools to deliver the cereal to one central location for about $8 a carton. It would cost the schools about $2.50 to distribute each carton, so the total Kellogg's bid was $10.50 -- the lowest bid.
The school system was happy and ready to sign with Kellogg's.But Cox and the MBOC said no. The contract must go to the black businessman, Cox said, because the original specification in the contract required the lowest bid on the cereal, including delivery to all schools. That low bid belonged to the black businessman.
That decision cost Cox some friends at the school system. Strapped for money and fighting against budget cuts, school officials did not like the idea of passing up a low bid in order to make sure a black got a city contract. "They're making one black man rich off the money it takes to run a school system for black children, to buy books . . . " said one school official.
Since 1976, the law in the District has been that the city gives "at least" 25 percent of its business to minorities. When the city council wrote the 25 percent law, it said it was doing so because a "persistent pattern of racial discrimination in our society has prevented minority business enterprises from gaining a fair share of contracts . . . Difficulty in the financing and bond markets has kept minority businesses from entering into full participation in public contracts in the District of Columbia."
But since the law was written, most city agencies have ignored it. Cox says agency heads tell him that they can't find blacks to do the job, that blacks can't handle the job or that they once gave a black a job and the job was messed up. The result was that (excluding construction jobs) in 1978, nearly 74 percent of city agencies had not complies with the law.
Enter a new mayor, Marion Barry, and his friend from days of black militance, Courtland Cox. Barry said giving 25 percent of city business to blacks was a minimum in a 70 percent black city. From the distributor of breakfast cereal for schoolchildren to the tailor who makes police uniforms, white businessmen started losing city contracts and money.
The grumbling from white contractors was expected. But just as much came from black officials at city agencies. They say, in confidence, that they do not have complete faith in black businessmen whom they have never dealt with before and who may be just getting started in business. At stake is about $44 million a year, not including the city's construction contracts.
So far, the biggest fight resulting from the drive to give city contracts to blacks has come over a trash pickup contract. The contract to collect garbage at Lorton, housing projects, some fire stations and schools was held by a white contractor, Shayne Brothers, Inc., for four years. This year Shayne was informed that the contract was being held for "sheltered" bidding among minority trash companies only.
Shayne initially argued no minority firm could handle the contract, according to Cox. But when one minority firm, Urban Services Unified Refuse, was found to do the job, several other black firms appeared and entered bids. One of those minority firms was Callaham Refuse Hauling, a subcontractor for Shayne. Callaham said it could do the job by leasing some equipment from Shayne. Callaham entered the low bid. But Cox gave the contract to Urban. He said he based his decision on Urban's better management ability. Normally, the low bid is 80 percent of the qualification for a contract. But in the case, Cox said the low bid counted for only half the qualification. Management counted for the other half.
Cox added that he suspected Callaham of being a front for Shayne. Callaham and Shayne took the city and the MBOC to court. They sought a restraining order and a temporary injunction against the city but lost on both. Cox said Shayne then tried to get nasty with the city. Shayne removed its trash bins from the city sites before new trash receptacles could be put in place.
"I feel I got shafted," said John J. Callaham, the black man who heads the Callaham firm. "We're no front for anybody white . . . The mayor did a good job getting the job set aside for blacks, but my argument is with the way his people handled it. That contract didn't go out by the normal bid procedures . . . Courtland Cox changed the system overnight so Urban could get it. They acted like they wanted Urban to get it."
To keep the whole thing from exploding, it might help if the mayor set standards for how to qualify for a city contract or how to become a partner in any deal the city oversees. But the city can't set standards for everything. The city has to be free to decide if the black business with the low bid can handle the job. At some point the intelligence of city officials must be trusted.
But trust brings us back to the question from the white businessman with a pleading, confused look on his face: "I do my job; I've given you a fair price. Why do I have to give up my contract to the blacks?" Black businessmen who don't get the contract ask a similar question: "Why didn't I get the contract?" The whole question for the businessmen is: who gets the money? And the answer lies in the image of the Greater Washington Board of Trade as the group that really runs this town. That image is reality for lots of people because relatively few blacks belong to the board of trade in this mostly black city.
For black and white businessmen unhappy over a lost contract, this boils down to a hard truth: businessmen and contracts are secondary to what the city government is trying to do to bring blacks into prominence in the economic life of the city. It is secondary because the primary objective is to bring true home rule to the city: that means all citizens, black and white, making the big-money political contributions and sitting in the big board rooms.
This is a case of what is unfair to one man being the right thing for many men.