Seven years after I-200, disadvantaged businesses struggle for contracts
Small-business owners may never have it easy, but for minority- and women-owned businesses, the hurdles can be even higher. In recent years, state programs aimed at leveling the playing field were forced to scale back regulations benefiting disadvantaged businesses.
In 1998 voters passed Initiative 200, which prohibited local jurisdictions and state agencies from awarding contracts based on race or gender. And in May it was found that the Washington State Department of Transportation cannot favor minority- or women-owned businesses in awarding road construction contracts under a federal law allowing it, because the state hasn’t proven they have experienced discrimination here in the past.
"As a result of it becoming voluntary, the level of participation has drastically reduced," said Brenda Nnambi, director of the Office of Equal Opportunity for the WSDOT.
Through its Disadvantaged Business Enterprise program, WSDOT is mandated by the USDOT to set goals to promote a level playing field and foster equal opportunity for firms owned by disadvantaged individuals. The program also offers services to minority- and women-owned businesses.
Shareefah Abdullah, an African American business owner and founder of Black Entrepreneurs of Clark County, said there may be several factors contributing to the disadvantages of minority- and women-owned businesses.
"Minority entrepreneurs are just as talented, resourceful, expert and professional as other contractors and entrepreneurs," she said. "So if they are not substantially represented in the economy, I know it is not because of lack of skill. And I believe it’s a combination of discrimination, racism, exclusionary practices and also not being aware of the opportunities that are available."
BECC is one way Abdullah hopes to improve networking and mentoring for all businesses in the county. Without diversity in business, the economy suffers, she said.
"When people who are contributing to the economy as taxpayers are also feeling included as business owners and entrepreneurs, they are able to better enrich the economy through a substantial boost in morale," said Abdullah.
Carolyn Crowson, director of the Washington State Office of Minority and Women’s Business Enterprises agrees the health of disadvantaged businesses is vital to the economy.
"I believe if minority- and women-owned businesses in this state are robust, I think everybody benefits," said Crowson. "You need a good small-business economy for the state to flourish. Usually, minority- and women-owned businesses hire more minorities and women than any other segment and have a large set of the labor."
The Washington State Office of Minority and Women’s Business Enterprises provides certification to prove ownership and control of minority- and women-owned businesses. The agency works with other state agencies, local jurisdictions and private companies to assist them in locating certified businesses. The OMWBE has 43 certified businesses listed in its database for Clark County. According to 1997 census data, the latest available, of about 6,700 businesses with paid employees in Clark County, 372 were owned by minorities and 962 were owned by women.
Following approval of I-200, the number of firms seeking certification dropped. Coupled with economic declines, disadvantaged business took a double hit, said Crowson. In 1998, 4,917 firms were certified, and in 2002, the number dropped to 2,184. Expenditures by state agencies and educational institutions with certified firms dropped from about 4 percent to less than one percent between 2000 and 2004.
Despite outlawing race- or gender-based contract awarding, state laws designed to increase opportunities for minority- and women-owned firms in public contracting and the state’s authority and duty to identify and remove barriers to equal participation in contracting were not removed. The state still requires agencies to set and monitor goals for the utilization of minority- and women-owned firms. Jurisdictions must show a good-faith effort to conduct outreach and recruitment of minority- and women-owned businesses.
Clark County Director of General Services Doug Johnston said the county successfully meets its goal of 10 percent participation by minority- and women-owned businesses in its public works contracts each year without much difficulty. Projects with a large number of sub-contractors or breaking up large projects into smaller jobs helps meet goals.
Johnston would like to improve the county’s ability to perform outreach to increase the pool of disadvantaged businesses bidding on county contracts. It discontinued attending minority business events that failed to attract new contractors in the past. And Johnston encourages firms to actively market themselves to the county, as the relationship is mutually beneficial.
"Competition," said Johnston. "That is what purchasing departments are all about. The more competition we have the better service we get, the less public money we spend and the further we can make our services go."
The WSDOT is in the process of establishing goals for next year and is planning meetings across the state to receive public input. The agency recently completed an availability analysis to determine the availability of business to work on projects. And it plans to gather anecdotal data through focus group discussions in an effort to get back to race-conscious goals.