Legacy of discrimination taints contracting world

“We therefore hold that the City has failed to demonstrate a compelling interest in apportioning public contracting opportunities on the basis of race.”

The above quote comes from the 6-3 majority decision of the U.S. Supreme Court in the case J.A. Croson v. the city of Richmond in 1989. The case involved the city of Richmond, Va., that in 1983 instituted a program to “set aside” 30 percent of city contracts to minority business enterprises, or MBEs, in a city that at the time was majority Black.

The Croson decision effectively overturned the 1977 Fullilove decision of the Warren Burger Court that stated the affirmative actions could be taken to ameliorate past discrimination. Because of the Croson decision, MBE programs across the entire United States, including here in Connecticut, had to redesign their MBE programs to comply with the banning of set-aside efforts unless the contracting authority could specifically demonstrate past discrimination. No Supreme Court case has had a more deleterious impact on Black and brown wealth creation than the Croson case.

Connecticut followed the Croson decision by completing a disparity study that showed that ethnic, racial and women-owned enterprises suffered from past discrimination. The Croson decision went further in its requirements to design MBE programs to say that the contracting authorities also had to base their goals on the availability of MBEs in the relevant market. As a result of that Connecticut disparity study conducted almost 40 years ago, the state of Connecticut established a goal of 6.25 percent for small “minority” owned businesses.

Connecticut, however, deviated from almost every other state in the country by not making the distinction between white women owned enterprises and Black, brown, Asian and Native American owned enterprises. In effect, white women owned enterprises were treated the same as racial and ethnic owned businesses and the state could meet its 6.25 percent goal by buying only from white women-owned enterprises because of how minority in Connecticut is defined.

State, local, and many private sector buying organizations often has less of a problem finding white womenowned businesses than ethnic minority businesses, particularly in in the construction industry, where there are strong incentives to have white men turn their businesses into white womanowned businesses to take advantage of this program by naming a wife or daughter as the owner.

As a result of this Connecticut anomaly on how minorities are defined, Black and brown businesses have received almost no support from the state of Connecticut to build Black and brown businesses, particularly in construction. The excuse for those 40 years of failure is the Croson decision emphasize no “compelling interest.”

The Croson decision directly impacted Connecticut towns and cities, as well. One year after Croson, in the Associated General Contractors of Connecticut v. The City of

New Haven case, the courts ruled the New Haven program to set aside fifteen 15 percent of contracts for Black and brown construction companies was illegal because of the Croson decision. The Connecticut courts ruled New Haven discriminated against white contractors, who made up the entirety of the Associated General Contractors of Connecticut organization. The white contractors were happy with the status quo, which allowed them to continue monopolizing the construction industry in the state.

This legal history is important because the federal government is making a severalbillion-dollar investment in Connecticut’s road, transportation, internet, water and other infrastructure. Because of these past laws and the negligence of the state of Connecticut, I am afraid that this massive generational investment is going to go primarily and overwhelmingly to whiteowned enterprises. There will be many white women-owned businesses that will participate in these opportunities, but Black and brown businesses and consequently,

Black and brown communities, will not be financially transformed by the federal dollars coming into the state.

When the state of Connecticut and the major cities have designed programs like the ones that have been in effect since 1990, is it any wonder that Black and brown businesses (and communities) have faced an uphill battle in this state? Other states like Michigan, Maryland, California and Massachusetts have found ways to promote Black and brown businesses in the past and as a result, Black and brown businesses in those states will benefit from the infrastructure bill in ways similar businesses will not in Connecticut.

To the state of Connecticut’s credit, there is finally a new disparity being conducted that will establish new goals, but even these new goals will have to fit within the constraints of Croson and the AGC of Connecticut ruling. This new study needs to be done, but the legislature and governor need to do what has been done in Michigan recently and in Maryland and say that there is a compelling interest in having aggressive MBE goals that also distinguish between white women-owned enterprises (which do need help) and racial and ethnic owned enterprises.

Thurgood Marshall in his Croson dissent stated the court’s decision “signals the court views racial discrimination as largely a phenomenon of the past, and that government bodies need no longer preoccupy themselves with rectifying racial injustice.”

How prophetic these words were. Black and brown businesses in this state continue to suffer from racial discrimination from AGC contractors, the state of Connecticut, and towns and cities throughout the state. In order to fix this for future generations, we must proclaim today that there is a compelling interest to develop Black and brown businesses. Public sector organizations must set aside meaningful percentages of public contracts for Black and brown businesses. If we do not do this, we will be having this conversation again 10 years from now.