Many minority-owned firms have suffered in the wake of the Supreme Court’s decision. In Atlanta, the percentage of construction spending won by minority firms has fallen sharply in the last two years (chart). Dozens of other cities simply dismantled their programs, which typically set aside 10 percent of construction spending for minority firms. Now, as the administration and Congress play politics with the issue of quotas, Atlanta is trying to revive its affirmative-action program. What happens in Atlanta, home of the granddaddy of minority-contracting programs, will be watched keenly by other municipalities. And the stakes are especially high now, with more than $1 billion in construction expected before Atlanta hosts the Summer Olympics in 1996.
Next week, Atlanta Mayor Maynard Jackson is expected to propose a plan intended to satisfy the standards set down in the Supreme Court’s ruling. The 6-3 decision in Richmond v. Croson said a program that denies contracts to white-owned companies would be constitutional only if the city shows detailed evidence of past discrimination - and shows that a remedy to correct it is “narrowly tailored.” Constructing such a plan won’t be easy for many cities, but Atlanta has taken up the challenge.
To prove past discrimination, the city spent $500,000 for a 1,100-page, eight-volume report by former Federal Reserve governor Andrew Brimmer and former labor secretary F. Ray Marshall that stretches from Civil War times to the present. The new proposal attempts a “narrowly tailored” remedy: while shooting to give minority companies a 35 percent share of city contracts, it recognizes that some specialties (such as paving airport runways) lack minority firms while others (general contracting) have many. In the original Croson ruling, Justice Sandra Day O’Connor suggested looking at the number of minority firms ready, willing and qualified to work, compared with the overall contracts awarded. The city study did that and found that while minority firms constitute 33 percent of all companies pursuing business with the city, they got only 23 percent of municipal contracts last year.
Opponents contend Atlanta’s minority firms already get a large share of contracts without set-asides, citing the 23 percent figure. “Just that in itself would not justify what they’re trying to do,” says J. Ben Shapiro, general counsel for the Georgia chapter of the American Subcontractors Association, which is poised to attack Jackson’s plan. But without an affirmative action plan, Brimmer argues, the minority share of contracts will continue to drop to pre-1980 levels.
The most potentially explosive part of Jackson’s program would reward white-owned contractors that gave business to minority companies. The provision is aimed at addressing the fact that few minority firms get private-sector contracts. In Atlanta, minority firms got nearly 93 percent of their business from public-sector jobs. Carolyn Stradley, owner of C&S Paving Co., says that her paving contracts virtually stopped in “midstream” when the set-aside program was suspended. She hopes the new plan will make it harder for whites to use minority “fronts” to win contracts, a charge sometimes leveled at her.
To its supporters, the set-aside notion is a valid tool that helped create a black, entrepreneurial middle class in Atlanta. The old program, says city consultant Thomas Boston, was the “driving force” behind a surge in the city’s black business sector in the 1980s. Shapiro says minorities can be helped with economic aid rather than by discriminating against whites. If Jackson’s program is approved, expect to see the matter end up in the courts once again.
The share of Atlanta contracts won by minority firms has dropped sharply.
Atlanta Municipal Minority Firms’ Share Contracts in Percent 1988: $58 million 34.6% 1989: $50.7 million 28.1% 1990: $40.5 million 23%
SOURCE: ATLANTA OFFICE OF CONTROL COMPLIANCE SOTOODEH–NEWSWEEK
