Mending Government Contracting
Times: Administration to change minority contracting rules to please courts, constituencies
WASHINGTON (AllPolitics, May 6) -- The Clinton Administration will announce dramatic changes later this week in the way the government awards contracts to minority firms, according to today's New York Times.
In an effort to accommodate court rulings which have restricted affirmative action programs as well as the administration's desire to maintain the programs, the new Justice Department contracting guidelines may end some race-based preferences.
But the shift will also make available billions of dollars in federal contracts for others, the Times reports. The government awards some $200 billion a year in federal contracts.
An intense industry-by-industry review is underway at the Commerce Department that is intended to show where minority contractors are under-represented or experiencing discrimination, and also where minority groups are currently over-represented.
Preferences given to contractors in industries where minority contractors have saturated the market will be cut back or eliminated under the new provisions, according to the Times. Commerce expects to complete its survey in October.
The Clinton Administration has been trying for the past two years to reconcile strong Democratic support for affirmative action programs from blacks, Hispanics and women, and a 1995 Supreme Court decision, Adarand Construction v. Pena, which dramatically limited the granting of contracts based on race or sex.
In a 1995 speech, Clinton vowed to "mend" affirmative action, not "end" it and to establish guidelines that would help disadvantaged firms compete more readily with their better-established counterparts without imposing "reverse discrimination" on white-owned businesses.
Minority-owned businesses and others that qualify as economically disadvantaged account for $11 billion, or 6.6 percent, of the federal contracts awarded annually for goods and services.
The Commerce Department is analyzing contracting practices in 80 industries to determine discrepancies between "capacity" -- or the number and size of qualified minority-owned business -- and "utilization" -- or the dollar values of federal contracts that those businesses win, the Times reports.
The Clinton Administration will view significant differences between the two as discrimination. Where it finds discrimination, the government will give minority businesses or contractors who employ minorities some form of credit such as a bidding bonus, the Times said.
The new rules will cap a minority bonus at 10 percent, meaning the company's bid would be lowered by 10 percent to determine which bidder gets the contract.
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