Despite Wilson Order, Goals for Diversity Thrive Elsewhere

Just a day after Gov. Pete Wilson abolished a key state affirmative action program, the agency in charge of the massive Alameda Corridor rail project voted to award nearly a quarter of the contracts on the $2-billion transportation link to minority- and women-owned businesses.

The goal to grant at least 22% of those dollars to small “disadvantaged” firms--more than double the requirement for federally funded projects--illustrates that affirmative action continues to thrive in other levels of government and the private sector, despite California’s passage of Proposition 209 eliminating gender and racial preferences in state programs.

“We don’t need laws to tell us how to do what’s right,” said Alameda Corridor Transportation Authority Chairman John Kellogg. “We realize we have a responsibility to help those communities that this project is going to impact.”

In a related move lauded by community groups and local lawmakers, the corridor authority’s governing board required contractors to train and hire workers from the depressed and predominantly minority neighborhoods along the route of the behemoth public works project.

The action stands in stark contrast to Wilson’s move Wednesday to eliminate race- and gender-based goals from state contracting. His executive order was the first step in implementing Proposition 209, which would dismantle preferences in everything from college admissions to state hiring.

Critics and supporters alike have declared that the new state law will end affirmative action as we know it. But the “historic” event the governor trumpeted Wednesday is more like a nonevent in other arenas where affirmative action is alive and well.

City and county initiatives to help small “disadvantaged” firms remain untouched by the new state law. Ditto for outreach programs for federal contracts. At a time when “quotas,” “set-asides” and “affirmative action” have become dirty words to some, private companies are aggressively seeking diversity among their suppliers, with an eye to the nation’s changing demographics--and the bottom line.

“There’s politics, and then there is business,” said Rich Wilkins, vice president of Atlanta-based Procurement Resources Inc., which helps companies and municipalities expand their network of women and minority vendors. “These companies see the handwriting on the wall. They know the country is changing, and they can’t continue to do business the same way, no matter what the politicians say.”

Project Bound by Federal Rules

The policies approved Thursday by the corridor authority’s governing board require prime contractors to actively pursue women- and minority-owned subcontractors if they wish to bid on the so-called “mid-corridor project”--the segment of the 20-mile rail link with the largest dollar value. That standard will be applied to all other portions of the Alameda Corridor as they go to bid.

The massive public works undertaking is expected to speed the movement of goods from the region’s ports to rail yards near downtown Los Angeles, creating 10,500 jobs during the three-year construction.

Since the $2-billion project contains federal funding, it must meet U.S. Department of Transportation requirements that 10% of contracts go to disadvantaged businesses.

But the corridor authority has already far exceeded that. In the design phase of the project, nearly 21% of the contracts have been granted to disadvantaged firms, most of which are minority- and women-owned. Thursday’s vote raises that goal to 22% for the big-dollar construction contracts.

“We feel it’s achievable, doable and the right thing to do,” said corridor authority General Manager Gill V. Hicks.

The authority’s new targets match those of the city of Los Angeles, which likewise attempts to grant 22% of city contracts to disadvantaged business. Because those goals are part of an “outreach” program, rather than hard and fast quotas, they have withstood previous court challenge and are unaffected by Proposition 209.

The city recently prepared a list of 1,400 disadvantaged firms that could bid for work on the Alameda Corridor. A contract for demolition work went to three businesses owned, respectively, by an African American, a woman and a Latino.

“That team [of the three firms] came in and blew everyone’s socks off,” said Karen Blackwell, who heads the Alameda Corridor Business Outreach Program for the mayor’s Minority Business Opportunity Committee. “People said that this would make the process less competitive. Well, we’re making it more competitive by including small business.”

While some minority- and women-owned firms worry that opportunities to bid on state contracts will dry up in the wake of Wilson’s executive order Wednesday, diversity continues to be a mainstay in federal contracting-- and it’s getting a boost from a visible ally.

The U.S. Small Business Administration is planning an initiative to increase women-owned businesses’ share of federal contracting dollars from about $3.6 billion, or 1.8%, at present, to 5%, or $10 billion, of the $200-billion annual federal contracting pie.

The agency has led the fight against “bundling,” a practice in which government business is let out for bid in big-volume contracts that small fry have no shot at competing for. The SBA also recently unveiled a pact with the Big Three auto makers that will boost minority supplier contracts by $3 billion over three years--a 50% increase over current levels.

“They realize their work force and customer base is more diverse,” said SBA spokeswoman Debra Silimeo. “They know that it’s good for their business.”

Indeed, while affirmative action is under siege in political circles, private firms are scurrying to expand their base of vendors and suppliers.

Minorities and women obtained about $30 billion in business from the 500 largest U.S. companies in 1996, compared with $22 billion in 1990, according to Procurement Resources.

In addition, nearly 75% of Fortune 500 companies now have some type of supplier-diversity outreach programs. That’s up from 50% in 1992, according to the consulting firm.

Activists Urged to Redouble Efforts

Whether those efforts are merely good public relations or will translate into more contracting opportunities remains to be seen, according to Jeanie Barnett, editor in chief of Minority Business Entrepreneur, which focuses on companies that do government and corporate contracting.

She said Wilson’s action sounds the call for business associations to push advocacy to a new level. The National Assn. of Women Business Owners, the Black Business Assn. and other activist organizations should step up their lobbying on behalf of small-business contracting and serve as contracting information centers, she said.

Meanwhile, the Alameda Corridor authority’s new policies take diversity goals beyond just contracting opportunities for minorities and women. Thursday’s actions likewise call for job training for 1,000 residents, and for local residents to make up 30% of new hires. Lawmakers and leaders from the affected communities have been calling for a share of anticipated new jobs for several years.

Unemployment and underemployment in the corridor’s so-called gateway communities is as high as 34%, compared to a 6% overall jobless rate for the county.

“This is the largest local hiring plan of any public works project in the history of the United States,” said Dennis Rockway, senior counsel with the Legal Aid Foundation of Long Beach.

“It’s our victory, but we have a lot of work to do from this point on,” added Benetta Johnson, chairwoman of the Alameda Corridor Jobs Coalition.

The coalition has already crafted a database of prospective local employees and plans to meet with the project’s prime contractors within the next few weeks, she said.

State Sen. Tom Hayden (D-Los Angeles), however, called the jobs plan “an overdue response to growing pressure.”

“I look on it with caution,” said Hayden, who has introduced state legislation that would require 30% of the project’s entire payroll to go to local earners--not just 30% of new jobs.

Rep. Juanita Millender-McDonald (D-Carson) also pushed for the local hiring policy and the inclusion of minority- and women-owned businesses.