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Op-Ed: Chicago renews controversial racial
preferences in city contracting
That’s bad news for equal rights
[The Center Square] Wen Fa | Pacific
Legal Foundation
Proponents of racial
preferences typically pitch them as temporary measures – in place only
as long as needed to remedy past discrimination. Yet in practice, such
preferences are anything but temporary. Since the 1980s, for instance,
the city of Chicago has had some form of racial preference in its city
contracting program. Far from ending the program, the Chicago City
Council in September moved to extend it for another six years. |
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 The program sets aside a percentage of taxpayer money for
“minority-owned businesses.” The city has long proclaimed that these set-asides
are necessary to increase opportunities for minority-owned businesses doing
business with Chicago. But in reality, Chicagoans should brace themselves for at
least six more years of failure in a program that has never delivered on its
promise to one day allow contractors full opportunity to compete for public
projects in a system without racial set-asides.
The Chicago set-aside program works by directing a set
percentage of public contracting dollars to firms owned by designated
minorities, which the city defines as having “at least 51 percent of their
business controlled by one or more minority groups.” In practice, this usually
means a larger primary contractor receives a contract to handle a city project
(say, building a new school building extension); that primary contractor then
subcontracts a percentage of the work to a subcontractor certified as
“minority-owned” by the city.
Failing to satisfy the city’s racial preference demand means a primary
contractor can face penalties of hundreds of thousands of dollars and lose the
opportunity for future city contract opportunities. So, contractors have a
powerful incentive to go along with the scheme. And this burdens non-minority
subcontractors, particularly those who work in fields where general contractors
typically go to satisfy the minority business set-asides in each particular
project. In some places, this may be trucking. In others, paving.
No matter the project, these set-asides discriminate against small businesses
for no other reason than the race of their owner. In this way, minority business
set asides are incompatible with the constitutional and moral principle of
equality before the law.
This venerable principle is embedded in the Constitution’s Fourteenth Amendment.
In the Supreme Court’s influential decision in the case of Richmond v. J.A.
Crosson Company (1989), the Court affirmed that mandating set asides for
minority-owned businesses is wrong and unconstitutional.
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In that decision, Justice Sandra Day O’Connor
suggested that various race-neutral alternatives might be employed
to help disadvantaged businesses compete more fully in the public
contracting process. She suggested, as a start, “simplification of
bidding procedures, relaxation of bonding requirements, training,
financial aid, elimination or modification of formal barriers caused
by bureaucratic inertia, and the prohibition of discrimination in
the provision of credit or bonding by local suppliers and banks.”
Any of these approaches would be preferable to the existing racial
preferences approach and would likely lead to better outcomes for
both taxpayers and great opportunities for all small businesses:
minority-owned or not.
Think of it this way: when you hire a construction
contractor to renovate your kitchen or a plumber to clear your
clogged sewer line, you don’t care much about the color of their
skin. You want to hire someone who can get the job done right, on
schedule, and at a reasonable cost. There is no reason to think that
these commonsense principles should no longer apply just because it
is the government doing the contracting.
A race-neutral approach to awarding contracts would also have the
benefit of boosting public confidence in the city’s contracting
processes. It’s no secret that many citizens have grown cynical
about the fairness of government contracting, believing that it’s an
“insiders’ game” rigged by special interests. Minority set-asides
were intended to break that negative perception by opening
opportunities more widely but have instead served to reinforce it by
distributing contracts not based on objective criteria but based on
set-asides adopted through lobbying efforts.
Racial preferences in public contracting were wrong
from the beginning. But, although these measures were intended to be
time-limited, the last four decades have revealed that Chicago does
not intend to scrap this discriminatory regime anytime soon. Over
those years, many non-minority-owned subcontractors have been pushed
out of the system. Those who remain may need to take matters into
their own hands by challenging the policy in court.
Wen Fa is a senior attorney with Pacific Legal Foundation, a
nonprofit legal organization that defends Americans’ liberties when
threatened by government overreach and abuse.
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