Vast disparity in contracts proves need for set-asides
Government contracting in Palm Beach County has a color-gender problem. If a recent racial disparity study of the county’s Solid Waste Authority is any indication, the odds of obtaining a local government contract almost always favor male, white-owned firms.
The findings of the Mason Tillman Associates study show that a favored few firms are awarded SWA contracts, leaving aspiring minority-owned and femaleowned bidders with the proverbial procurement crumbs — a much smaller number of contracts than their presence in the marketplace suggested they should have received.
Between 2009 and 2013, the SWA awarded more than $318 million in contracts to private firms. Of that amount, the Mason Tillman study found that almost $312 million went to white, male-owned businesses.
Over the period, the SWA awarded 98 percent of its construction contracts, 84 percent of its professional services contracts, 94 percent of its commodities contracts and 77 percent of its trade service contracts to male, white-owned businesses.
“I think that there is a good ol’ boy network, business as usual,” said Mack Bernard, the only minority on the Palm Beach County Commission, who first raised concerns about the study’s results.
Indeed. That any government agency’s awarding of contracts was allowed to become so obviously unfair is both disconcerting and dismaying. We thought these battles had been fought and won for the good of all.
The question of where was the County Commission, which doubles as the governing board of the SWA, while this was going on must be asked by taxpayers. Second, can a board that’s been asleep at the wheel for years now be trusted to fix the problem?
Since the SWA report’s completion in March, the agency responsible for garbage collection and recycling has been accused of impeding the study by quietly hiring a consultant who has testified against racial disparity studies and set-aside contracts for minority- and women-owned firms. SWA officials deny this, and insist the hiring was done to make sure the report and any recommendations to fix the disparities pass legal muster. But, given the report’s findings, that explanation rings a bit hollow.
The disparity numbers are pathetic, particularly for a community that prides itself on being so business-friendly. Unfortunately, the study also may be a precursor of more bad news. Mason Tillman Associates is conducting a similar review of county government contracting, and the results aren’t expected to be much better than SWA’s dismal record.
To some, the SWA racial disparity study may be one more example of overindulgence or, worse, reverse discrimination. The Associated General Contractors of America’s Florida East Coast Chapter has already described the study as “too flawed” to meet legal standards. Such are the distractions to the growing evidence that too much money in local government contracts are going to too few businesses.
Taxpayers should demand better — before the county begins doling out about $810 million in contracts from its share of the one-cent increase in the sales tax passed in November 2016. That goes, too, for the balance of the estimated $2.7 billion that’s going to the 39 municipalities and school district.
Serious consideration must be given to the SWA re-establishing a race- and gender-based set-aside program to give disenfranchised business owners a fair chance at winning a share of contracts. Though not a panacea, set-aside programs were once popular remedies that guaranteed these firms a portion of government largess. And many programs provided incentives during the bidding process to larger, white-owned firms that shared their contracts with these smaller firms.
In response to legal challenges, the U.S. Supreme Court ruled in Richmond v. Croson in 1989 that local governments had to show that selected businesses received disparate treatment in the awarding of government contracts to operate legally justifiable setaside programs.
Is 98 percent a legitimate disparity? Palm Beach County replaced its set-aside program in 2002. The SWA followed suit in 2012. According to the county’s Office of Small Business Assistance, female- and minority-owned firms got 2.5 percent of county work in 2014, and just 2.2 percent in 2015.
We’ve seen and heard enough. The County Commission should withhold awarding any new SWA contracts until a new set-aside program, or other remedy, is in place.
Can a board that’s been asleep at the wheel for years now be trusted to fix the problem?