by Jock Yellott
Affirmative action is unconstitutional, said the U .S. Supreme Court last June.
But we’ll keep doing it until somebody tells us not to, says Virginia’s Department of Transportation. In some quarters, it seems we’re seeing Massive Resistance to the Supreme Court’s ruling.
An especially absurd, and ongoing, affirmative action boondoggle called the Disadvantaged Business Enterprise program magnifies the cost of Virginia roadbuilding … and causes minority lay-offs. Yes: it’s hurting the minorities it is supposed to help.
Recently, a Charlottesville small business won a city contract to build a bike path. But the Virginia Department of Transportation told the City: deny them the contract. Not enough “good faith effort” to go find minority subcontractors, they opined.
Losing the contract means laying off the small business’s employees. Nearly half of whom are minorities.
How can this be? Get ready for some acronyms. The government loves acronyms.
The U.S. Department of Transportation’s Federal Highway Administration [“FHWA”] allocates grant money to the Virginia Department of Transportation [“VDOT”] with a string attached: Disadvantaged Business Enterprise [“DBE”] requirements. VDOT grants to localities using federal money, come with the DBE string attached.
The DBE program requires localities — in this case the City of Charlottesville — to prefer minority-owned and -managed small businesses in contract awards.
But if there are no minority bidders? Then the City’s DBE goal gets passed down to the contractor to find minority subcontractors.
The City’s Local Contract Administrator [“LCA”] “must set an overall goal for DBE participation.” The ‘goal’ is mandated in the Invitation for Bids [“IFB”].
The bidder must make a “good faith effort”: must “actively and aggressively” seek as subcontractors small business owners who are women, or of Black, Hispanic, Native American, Asian-Pacific, or Subcontinent Asian origin to perform a Commercially Useful Function [“CUF”].
A CUF subcontractor often means in practice, standing around the jobsite just being a minority, I am reliably informed. Something like reparations. Your ancestor had to work without getting paid. So descendants are entitled to get paid without working. This is all about ancestry, as we’ll soon see.
“I can tell you that we have hired DBE contractors to perform work at a cost of [three times] what it would have cost us to perform the work so that we could meet the ‘goal’,” one contractor told me.
Does increasing contract costs by three times matter to VDOT? Not in the least. A direct quote from a recent IFB: “the fact that there may be some additional costs involved in finding and using DBE’s is not sufficient reason for a bidder’s failure to meet the contract goal for DBE participation.”
If the contractor didn’t find DBE subcontractors for CUF under VDOT’s FHWA requirements, cost be damned — then the LCA at the behest of VDOT denies the contract for failure to meet the IFB’s DBE clause.
FU — contractors increasingly are saying. Playing this losing game costs too much time and money.
What VDOT considers a “good faith effort” is arbitrary. Anonymous staffers in VDOT’s Office of Civil Rights decide how much good faith is enough. Contacted three local firms on the list of certified DBE firms? Why did you not look elsewhere, call four, five, six, seven? There’s one on the far side of the state. Cost be damned. And competence is in the eye of the beholder.
So we’re disqualifying your bid, even though it was the low bid. Even though you didn’t need subcontractors. Even though there are no DBE firms capable of the work. You didn’t met your statistical percentage “goal.”
Now here’s the constitutional problem: this DBE program is flagrant discrimination. It excludes white male small business owners. Denies them contract awards because of their race and gender.
The eye-opening federal DBE regulations at 49 CFR Part 26 define a Disadvantaged Business Enterprise as a small business concern which is both 51% owned, and managed, by individuals “in the following groups, members of which are rebuttably presumed to be socially and economically disadvantaged” [emphasis added]:
(i) “Black Americans,” which includes persons having origins in any of the Black racial groups of Africa;
(ii) “Hispanic Americans,” which includes persons of Mexican, Puerto Rican, Cuban, Dominican, Central or South American, or other Spanish or Portuguese culture or origin, regardless of race;
(iii) “Native Americans,” which includes persons who are enrolled members of a federally or State recognized Indian tribe, Alaska Natives, or Native Hawaiians;
(iv) “Asian-Pacific Americans,” which includes persons whose origins are from Japan, China, Taiwan, Korea, Burma (Myanmar), Vietnam, Laos, Cambodia (Kampuchea), Thailand, Malaysia, Indonesia, the Philippines, Brunei, Samoa, Guam, the U.S. Trust Territories of the Pacific Islands (Republic of Palau), Republic of the Northern Marianas Islands, Samoa, Macao, Fiji, Tonga, Kirbati, Tuvalu, Nauru, Federated States of Micronesia, or Hong Kong;
(v) “Subcontinent Asian Americans,” which includes persons whose origins are from India, Pakistan, Bangladesh, Bhutan, the Maldives Islands, Nepal or Sri Lanka;
(vi) Women . . . (see 49 CFR §26.5 (definitions: “Socially and Economically Disadvantaged Individuals” at (2) (i-vii).)
Race, gender, and nationality. When a law or regulation does that, it is subject to the most rigorously skeptical review that constitutional law affords: strict scrutiny. Presumed invalid.
And look at the categories. On their face (in practice the interpretation of them is less simplistic) but just looking at what they say: they stereotype as economically and socially disadvantaged all American small business owners and managers who are women, or “whose origins” can be traced to China, Japan, Taiwan, and Korea; all Hispanic Americans of Central, South American, Spanish or Puerto Rican “origins or culture”; all “having origins in any of the Black racial groups of Africa”.
Every human being on earth has origins in the Black racial groups of Africa.
Even if one confines the ancestry to a few generations there is no justification for presuming all descendants of whole nations; entire continents are socially and economically disadvantaged.
Why is a small business owner whose parents are from Peshawar, Pakistan socially and economically disadvantaged, but not one whose parents migrated from 80 miles away in Jalalabad, Afghanistan? This point was raised in a federal Complaint against the DBE program recently filed.
A small business is eligible for DBE certification if its woman president owns 51% of the stock. But not if she owns 49% and the rest is split among brothers and cousins. The arbitrary figure has nothing to do with social or economic disadvantage, or functional control of the business. Or being a woman.
And as we’ve already seen, if the purpose is to boost minorities, the DBE program is self-defeating.
A white male contractor with a fifty person minority workforce will lose a contract award to a DBE shell company, even with just one minority person: the owner. That one guy need do no actual work. Only marks up the contract for his cut. Then subcontracts out 100% of the actual work to white firms. Again, I am told by those in the know: it happens.
Also, Asians? We must presume disadvantaged every Asian-American?
Recall a recent U.S. Supreme Court affirmative action case against Harvard called Students for Fair Admissions. Harvard lost. Their affirmative action in effect discriminated against Asians. Because otherwise, Asians get into Harvard in droves. That’s a disadvantage?
A case filed last summer in federal district court in Tennessee ruled the Small Business Administration minority set-aside program unconstitutional, based on the same ‘presumptions’ of disadvantage. Another case filed about a month ago, also in Tennessee, directly challenges the federal DBE program.
Here’s the thing: if our Attorney General orders VDOT to quit the DBE affirmative action program — the state stands to lose federal grants.
One anticipates a lawsuit, for Virginia to retain federal grant eligibility. Captioned Commonwealth of Virginia v. United States. The Constitution gives the Supreme Court original jurisdiction. Rather than waiting two or three years for those other federal cases to wend their way up through appeals to the Supreme Court.
On the other hand, speedy change is not always a good thing (I am lucky to have a friend who tells me the truth, in this case: my Tucker-like diatribe needs balance).
Brown v. Board of Education, the Supreme Court case that outlawed separate but equal after 50 years of it, was implemented only with “all deliberate speed.” It took what — ten, twenty more years? And Martin Luther King, Jr. And Lyndon Johnson. Took us a while to get used to desegregation.
Now we’ve had affirmative action for 50 years. And we’re used to that. Affirmative action may be no longer constitutional under Students for Fair Admissions, which like Brown is limited to education at least at first — but is it no longer necessary? When will affirmative action be unnecessary?
“I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character,” said Martin Luther King, Jr.
Dream on.
Jock Yellott is an attorney in Charlottesville and an occasional contributor to Bacon’s Rebellion.
