I have never been a big fan of the Minority and Women’s Business Enterprise program, mainly because I have always said that it was designed to discriminate against people who look like me. City Councilmembers and city staff have not agreed and often told me it was not designed to discriminate against anyone.
So it was somewhat refreshing to hear the report by Rodney Strong of Griffin & Strong on the recently completed MWBE disparity study prepared for the City of Greensboro because he made no bones about the program being a program that discriminates.
The report was given at the City Council work session held in the Council Chambers last week.
As Strong noted, MWBE programs are legal discrimination. The federal courts have ruled that because of discrimination and disparity in awarding contracts it is legal to discriminate in favor of those who have been discriminated against. It seems obvious that if a program gives special privileges based on race and gender that it discriminates, but local officials don’t like to admit that the program discriminates in favor of minorities and females and against white males.
The purpose of the disparity study is to prove that there is disparity in the way Greensboro does business, which provides the legal justification for Greensboro to encourage discrimination in favor of minorities and women.
The disparity study, of course, proved that there was discrimination in the marketplace against black and women owned businesses, but they had to include a 24-county area that went as far east as Warren County (more than 100 miles from Greensboro )to do it. The city’s MWBE program only covers a 10-county area. So if Greensboro does business with a minority owned company outside that 10-county area, it doesn’t count in the MWBE percentages. The disparity study included 14 counties that are not included in the Greensboro MWBE program, which doesn’t seem to make sense. However, the folks from Griffin & Strong said that it did.
Although much has been made of the new disparity study, the main reason to have the disparity study is so the city could defend itself if a lawsuit were ever brought challenging the legality of discriminating against companies owned by white males. The disparity study provides that legal cover to allow discrimination based on race and gender, which would otherwise be illegal.
With the disparity study proving that a disparity does exist, the city can continue to legally discriminate in favor of companies owned by minorities and women.
If Griffin & Strong had found that no disparity existed then it would eventually put itself out of business because there would be no more need for disparity studies, which is not to say that disparity doesn’t exist but simply to point out that the company itself had a strong, verifiable through statistics and anecdotal evidence, incentive to prove that a disparity did exist.
Using both statistical and anecdotal evidence is how Griffin & Strong determined that disparity does exist. One comment that was noted several times as proving that disparity does exist was the comment made by several minorities interviewed that they didn’t feel comfortable in downtown Greensboro.
City Councilmember Justin Outling said he disagreed with that remark. And as someone who spends a lot of my time downtown, I would disagree also because of the number of minorities who are downtown. On an average weekday afternoon I see a fairly diverse group on downtown sidewalks. I don’t know how people feel – maybe a lot of the minorities I see downtown feel uncomfortable – but it certainly doesn’t appear that way.
Here is another way to look at the MWBE program, along with the disparity study that proves that the city continues to discriminate against minority and female owned businesses: Since 1986, Greensboro has had an MWBE program to attempt to remedy this discrimination. In 32 years, and after countless millions of dollars have been spent – according to the $300,000 disparity study – Greensboro has not been able to eliminate this significant disparity except in one small area. The study found parity in prime contracts for less than $300,000.
And that raises a question that was brought up by Outling at the work session: If there is parity in contracts for less than $300,000, can the city legally continue to implement the MWBE program for those contracts? Outling’s question was not answered. Presumably if the study had found no disparity then the city would have to end its MWBE program, which would be a good thing because it would prove that the playing field as far as contracts go was level in terms of race and gender.
But since the MWBE program is over 30 years old and disparity still exists, perhaps the current method of attempting to fix the problem is not the best way to do it. If the goal is to increase the amount of business that Greensboro does with minority and women owned companies, it is possible that instead of setting MWBE goals there is a better method to encourage the city’s use of MWBE contractors.
Instead of the current MWBE program, perhaps a program to help finance minority businesses to help them grow, or a more extensive mentor protégée program, would be more effective.
One thing the disparity study proves is that what the City of Greensboro is doing isn’t working. The way the current system works is that the city is required to award contracts of over $300,000 to the lowest responsible and responsive bidder. One of the requirements to be considered a responsible bidder is that either the prime contractor has met the MWBE percentages for subcontractors set by the city based on availability or has made a verified “good faith effort” to do so. The city is prohibited by law from setting quotas, but it can set goals and require a “good faith effort” to meet those goals.
If what the city has been doing for 32 years hasn’t had a significant impact, except in one small area, doesn’t it seem reasonable to try a different method?
At one time the Greensboro MWBE office mainly certified that firms claiming to be MWBE firms were actually MWBE firms. But the state took over certification of MWBE contractors, so that MWBE contractors don’t have to go through the hassle of being certified in every jurisdiction where they work. Currently the MWBE office does a lot of work on outreach, finding MWBE subcontractors that a prime contractor can hire.
Since Greensboro is going to spend millions on its MWBE program, it seems that sticking with a program that hasn’t worked so far is throwing good money after bad.
Councilmember Sharon Hightower asked about companies that purported to be owned by a woman but were really owned and run by the woman’s husband.
Strong, in answering that question, also noted that there are “sham” companies, but didn’t elaborate. It is well known in the construction industry that there are minority and women contractors that don’t do any work themselves. The company consists of a minority or a woman with a contractors license who is hired by the prime contractor to meet the MWBE goals. The sham contractor then subs out all the actual work to any subcontractor he or she chooses. The prime contractor gets credit for the MWBE contractor, who takes a percentage of the contract for his own company, which does none of the actual work. But there wasn’t much discussion of these sham contractors that provide prime contractors a way to meet goals but actually only provides work for the sham contractor.
The City Council agreed to appoint an MWBE committee that will study the disparity report and make recommendations on what should be done with the program. Assistant City Manager Barbara Harris said that it would take 30 days to form the committee and then 90 days to meet and develop recommendations. She said that she expected to have those recommendations to the City Council in four months.
Let’s hope that the committee looks at the entire program and comes up with some solutions that will work better than doing the same old thing.
The City Council spends an inordinate amount of its time discussing MWBE issues and on the Steven Tanger Center for the Performing Arts agreed to accept a bid that was $1.4 million higher than the low bid because the contractor had a higher percentage of MWBE subcontractors.
So there is no doubt the city is willing to spend money on the MWBE program. What the City Council should determine is if the money is being well spent. The goal should be to get to the point that the program is no longer necessary.
