Latino Contracting Falls

Government contracting with California’s Latino-owned firms fell 17.5% in the fiscal year ended September, 1985, even though overall contracting with Latino firms rose nearly 19% nationwide during the same period, according to a study by the National Assn. of Latino Elected and Appointed Officials.

Contracts awarded to the state’s Latino-owned firms under the Small Business Administration’s so-called 8(a) program fell to $173.1 million in fiscal 1985 from $209.8 million the previous fiscal year, the study by the Washington group reported. Nationwide, contracts under that program with Latino firms rose to $831 million in fiscal 1985 from $700 million the year before. The 8(a) program is the principal way that government contracts are earmarked for minority firms.

“NALEO is concerned that the federal government is overlooking California’s dynamic Hispanic business community,” said Harry Pachon, the group’s executive director. “These entrepreneurs can provide many of the goods and services sought by the federal agencies under the 8(a) program.”

A spokesman for the association said reasons for the decline aren’t easy to find. But a “natural evening out” of the previous year’s 153% increase in 8(a) contracting in the state and a “slight lowering of awareness” of minority firms by procurement officers during a non-election year probably contributed, he said. Contracts awarded to Latino-owned companies under that program in fiscal 1985 accounted for only 0.5% of all federal contracting, the association said. Pachon said that total 8(a) contracting with Latino firms during fiscal 1985 equaled less than 48 hours worth of contracting done by the Defense Department.

While government contracting with Latino firms rose nationwide during fiscal 1985, overall contracting under the 8(a) program declined after adjustment for inflation. Using constant 1984 dollars, total procurements under the 8(a) program fell to $2.65 billion in fiscal 1985 from $2.71 billion the previous fiscal year.