The court said the city couldn’t demonstrate that its program met “compelling interests” in controlling discrimination. Supreme Court case, Richmond, Va.’s existing system for allocating bids to women- and minority-owned businesses was shuttered. The lack of clear, legal definitions as to how these programs need to be structured is another fly in the ointment. According to a recent audit in Pittsburgh, the city doesn’t actually look at anything beyond predictions of those percentages and doesn’t examine whether the goals are met. For example, some simply rely on the “expected” percentage of women- and minority-owned participation in projects, rather than the actual figures. Local governments frequently don’t have enough staff, time, money or computer systems.
Unfortunately, this can sometimes be like building a sailboat without a sail. Naturally, governments need a great deal of data to be effective in running a program aimed at helping women and minorities in this way. The steps the state is taking include making sure that it is following the right regulations, collecting the correct evidence, ensuring that one person is not making that decision and putting an appeal process in place, says Chris Liu, the director of the state’s Office of Minority and Women’s Business. In the wake of past problems, Washington state is tightening up its certification process, in part by having more central control. It’s messy work at best, and can allow for the perception - if not the reality - that a city or state is trying to maintain a status quo of hiring too few women- and minority-owned businesses - exactly the problem that these programs were put in place to avoid. Ultimately, nobody likes to decertify a company. There’s even a wrinkle that seems to echo a Gertrude Stein-like take on government management: “When is a business really a business?” If a company uses a minority-owned subcontractor exclusively as a pass-through - to purchase inventory and then hand it over to the parent firm, for example - then is the subcontractor really the kind of integral part of the business to which these laws apply? “We don’t know what kind of research goes into seeing if it really is a woman-owned company, but you can’t do everything.” “That in and of itself is a problem,” Kurland says. Philadelphia and others don’t do their own certification they rely on other entities. For one thing, some cities and states accept certification from other cities or states, which may or may not have similar laws in place to govern the selection of eligible firms. It wouldn’t seem tricky to figure out if a company meets the local definition of a woman- or minority-owned business. It turned out that the prison contractor had only paid a subcontractor for the use of its name and then, according to The Philadelphia Inquirer, “gave the work to companies that do not meet the city’s standards for minority-, female- or disabled-owned vendors.” A Philadelphia prison contractor received nearly $200 million from the city, which believed it was handing 40 percent of a contract over to a female-owned business. The first big problem goes to the very core of this policy: Are the businesses actually owned by women or members of minority groups? Or are they just Potemkin companies that look one way on the outside and another on the inside? It’s a “meeting point of legal considerations, practical considerations, and the need to have good data for both justifying public policy and for implementing it as well,” says professor Maureen Berner of the School of Government at the University of North Carolina. Leaving aside any political issues revolving around this process, it’s a field in which a widely acceptable social policy can run head on into management problems. It’s a fairly common practice: When they purchase goods or services, states and cities offer preferential bidding treatment to businesses that are in whole or in part owned by women or minority group members.
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