City Council Panel Urges Study of Minority Contract Program

Frustrated over mounting complaints about a program that steers city contracts to firms owned by minorities and women, a San Diego City Council committee Wednesday recommended approval of at least $500,000 for an evaluation study.

By a unanimous vote, the council’s Public Services and Safety Committee proposed that the city conduct a “disparity” study intended to document the need of its Minority and Women Business Enterprise Program.

In so doing, the council panel rejected the advice of City Manager Jack McGrory’s staff, which warned that the study would be costly, time-consuming and conceivably could make the program more susceptible to a legal challenge from opponents who view it as an unconstitutional race-based quota system.

“That’s a very big risk,” McGrory said after the meeting. “We think we have a very aggressive set of goals, and that could be jeopardized by going into a study where you’re not sure how it’s going to turn out.”

However, after listening to minority and female business owners complain that the program has done little to enhance their chances of obtaining city contracts, the council members argued that the study was necessary to evaluate its effectiveness and allegations about abuses.

During Wednesday’s hearing, minority and women business owners repeated oft-heard charges that their firms have sometimes been used unknowingly as fronts by white-owned companies to attract city contracts. In the past, it has been difficult to verify or refute such allegations, in part because they do not have enough staff investigators, council members said.

“This study is something we’ve neglected to do for many years,” Councilwoman Abbe Wolfsheimer said. “It’s necessary to eliminate the guesswork and all the shilly-shallying around. And $500,000 is a heck of a lot less than what it could ultimately cost in litigation, other studies down the road and jobs.”

The full council is expected to decide whether to approve the study within several weeks.

At Councilman George Stevens’ request, Wednesday’s action also would establish a special task force, consisting primarily of minority business representatives, to review the program and recommend changes to the council within 90 days.

The primary purpose of the disparity study is to show that the program’s goal of directing varying percentages of city consulting, vending and construction business to minority- and women-owned firms has helped correct past discrimination in city contracts. The council members also requested that the study examine the program’s effect on giving a share of city contracts to firms run by the disabled.

Although opponents argue that the program effectively prevents some non-minority firms from competing for city contracts solely on the basis of race or sex, city attorneys have described the policy as “legally defensible,” noting that it sets goals, not requirements.

“It’s more a program of persuasion than . . . a quota,” Deputy City Manager Bruce Herring told the council committee.

Although the program’s advocates argue that the study could bolster the city’s legal position, city administrators caution that the review could reach an opposite conclusion, perhaps encouraging opponents to challenge the policy in court.

Both council members and an array of women and minority business officials also swept aside city administrators’ concerns over the study’s estimated $500,000 to $750,000 cost.

Harold Brown, chairman of a coalition of black, Asian, Indian and Latino groups called Communities United for Economic Justice, pointed out that the council allocated a similar sum earlier this week for a series of economic studies. Failure to approve the disparity study, he suggested, could raise questions about the city’s commitment to minorities.

“It seems to us that every time, when it comes down to the ethnic community, there’s always (questions) of the cost,” Brown said. “If you wanted to find $500,000, you could find $500,000.”