In today’s business world in general, and the government contracting world in particular, the recent Supreme Court decision in Students for Fair Admissions, Inc. v. President and Fellows of Harvard College, 600 U. S. __ (2023), came – not as a shock – but as a warning shot across the bow. The Court’s ruling, impacting affirmative action in college admissions, was absolute, immediate, clear, and broad reaching. Like the Dobbs decision addressing reproduction rights, the decision was immediate and permitted no phase out timeframes. Both decisions were overnight game changers. And unfortunately, game changers create a lot of anxiety and confusion, because their rapidity prevents the type of mindful attention typically required to reverse course.
The death is not immediate for all programs. Students for Fair Admissions only dealt with the use of race and gender in college admissions and thus its constitutional dictates limited to that sphere. However – there’s a persuasive policy impact on other programs. In deciding race and gender goals in admissions were unconstitutional, the Court noted that the remedial programs (i.e. past affirmative action programs), were never intended to operate indefinitely. The decision then declared that ANY program based on race and gender is unconstitutional under the 5th and 14th amendments.
This perspective ignores the depth of our prejudices, and the continued ongoing barriers to certain groups. But – this is law propounded by the highest court in the land, by justices who will be sitting this bench for a long time. In declaring race and gender programs of any kind unconstitutional, they’re scribbled the writing on the wall. Accordingly, the impacted groups – all of them – need to accept this is now the law of the land. That requires our proactive rethinking of all of our affirmative action programs.
As a certified WBE (woman business enterprise) and DBE (disadvantaged business enterprise), as well as a construction attorney with an emphasis in this area, I’m grateful for the benefits provided by the old programs. However, the prior programs were largely directed towards goal based initiatives, i.e. “hitting the numbers”, and often ignored the equally important goals of education, training, outreach and mentoring. The old programs also addressed in a side bar manner the important race/gender neutral programs required by the 1989 City of Richmond vs J.A. Croson decision1. We may have missed the boat up to this point, ignoring powerful programs that remedy disparity through simply addressing the issue of “small” versus “large”.
All minority and women owned certified businesses must qualify as “small” under SBA size standards. And the fact is, a small business in most instances finds it difficult to go head-to-head with the manpower, buying power, advertising power, and political power of the big players at the table. This is particularly true at the federal level, where bundled contracts by agency often exceed multi-million dollar thresholds. Most small businesses simply cannot service a contract of that size.
While size is one major issue, affirmative action, while beneficial, also has a dark side. The programs can limit how the business community views a solid, reputable business. The programs also force most of its MBE/WBE players into competing in an artificial landscape. Instead of being hired to perform full scope of what you do, you are often backed into a percentage of job – price and scope – simply to meet a goal. I challenge any company to put its best foot forward under those constraints! Finally, being labeled as a WBE or DBE can hurt your reputation. Instead of being hired because you’re good, you’re being hired as a label to meet a goal. And like it or not, your hiring companies are thinking of you in that respect and it’s a limiting perspective. There is a stigma to being certified as “disadvantaged”. It’s a label that sits, and SHOULD sit, uncomfortably. It incorrectly implies your disadvantaged status is your only access to the playing table.
So, I’m going out on a limb here. Maybe, just maybe, his decision can potentially be a powerful catalyst to the minority and female communities, forcing us to change OUR game and OUR dialogue.
Let’s begin by demanding an immediate legislative focus on relevant race and gender-neutral programs. Some suggestions are:
1. All government entities currently using an M/W/DBE program need to determine if they ALSO have a race/gender neutral Small Business program? If not, this is critically needed and should be top priority.
Why? If any existing M/W/DBE programs are legally declared “unconstitutional”, then existing contract awards under an M/W/DBE system will be deemed “unconstitutional” and immediately void. Owners and upper-tier contractors will be forced to terminate those contracts and find replacement contractors and suppliers. This creates logistical and legal nightmares in the contracting and warranty arenas where no replacement contractor is willing to warrant someone else’s work.
In contrast, where all minority and women owned businesses must first be “small” by SBA standards, and if all M/W/DBE firms are co-registered in both programs, all existing M/W/DBE contracts can immediately convert into Small Business award goals and thus bypass the voided contract scenario above.
2. Government entities should also consider how M/W/DBE goals can be met in a race and gender neutral manner.
- Education and Outreach. Government and business/civic entities should increase education and outreach programs focused on early education exposure, career placement, and further training in business practices and procedures, business management, business formation and governance, workforce training, community outreach and development, bonding, insurance access and public policy advocacy.
- Local Hubzone Programs. Government entities should create local contract award programs similar to the federal Hubzone program. Hubzone contract awards are made to those businesses which have a principal office in a designated HubZone area (i.e. a “Historically Underutilized Business area”. This means the area is typically a disadvantaged, poorer neighborhood). The business, to be certified, must ALSO employ a certain percentage of persons who live in that area. The local governments analyze their budgets to create sole source bidding opportunities only for HubZone certified companies. The program is thus a race and gender neutral awards program, any business can participate if it meets the criteria, but it funnels contract awards and thus business growth opportunities and employment to areas and residents needing that economic development potential.
3. Minorities and Women Need to Statistically YELL Their Relevance.
Finally, as the most important factor in my opinion, minority and women need to now YELL THEIR RELEVANCE to their government entities, and corporate contacts. We need to change our dialogue from: “You have to have us at the table”, to “You’d better invite us to your table”. In other words, we can point out the strategical importance of including minorities and women at the table, but only if you’re interested in power wielding economic and political blocks. So let’s look at some statistics:
For the ladies: the number of women-owned businesses in the USA has increased significantly in recent years. In 2019, there were 5.7 million employer businesses where women accounted for 1.2 million or 20.9% of these businesses. Women-employer firms grew 16.7% between 2012 and 2019 compared to the 5.2% growth rate for men-owned firms during this period. Gross receipts for women-owned employer businesses increased exponentially (51.9%) between 2012 and 2019 while revenues for men rose 34.2%. Women-owned firms employed 10.8 million workers in 2019 and grew their workforce by 28%, more than double that of male-owned firms (10.8%) between 2012 and 2019. Women-owned non-employer firms (i.e. single owner / employee company), totaled 10.9 million in 2018, a share of 41% of all non-employer businesses in the U.S. These businesses generated $1.3 trillion in revenue, where women accounted for $299.7 billion of these receipts. On the consumer side, a recent articles in Forbes Magazine identified women as controlling 80% of the consumer products market, urging ALL markets to pay attention to the growing financial impact clout wielded by women.3 4
For the minorities (including the minority ladies): The minority community carries impressive economic clout that for some reason is rarely discussed. The 2022 Economic Impact Report for Minority Business, which reports the impact of the “certified” MBE business market, showed: $316.2 billion in total annual revenues for certified MBEs (a 21% increase from 2021); $482.1 billion in total economic activity. 1.8 million U.S. jobs supported; $136.4 billion in total wages.
In 2022, annual revenue for MBES increased across each of the communities of color NMSDC serves: Asian Pacific revenue totaled $94.4 billion, a 34.9% increase from 2021; Hispanic revenue totaled $77.7 billion, a 23.3% increase from 2021; Asian Indian revenue totaled $71 billion, a 20.3% increase from 2021; Black revenue totaled $59.6 billion, a 4.6% increase from 2021. Native American revenue totaled $13.5 billion, a 12.5% increase from 2021.5
Along these same lines, a 2021 McKinsey Group report found that measuring 2019 statistics, consumer expenditures by Black households totaled approximately $835 billion. Combined spending by all Black households is increasing 5 percent annually, outpacing the growth rate of combined spending by White households (3 percent). The report concludes that serving the Black community is key, where it represents a $300 billion opportunity! 6 These are just the economic overviews, but the numbers are compelling.
For the Politicians: Bear in mind the equally increasing political clout wielded by both groups. The Center for Women and Politics reports that have registered and voted at higher rates than men in every presidential election since 1980, with the turnout gap between women and men growing slightly larger with each successive presidential election. The number of female voters has exceeded the number of male voters in every presidential election since 1964. Minority women are flexing their political muscles as well. Among Asian American/Pacific Islander, Black, Hispanic, and white voters, the number of women voters has exceeded the number of male voters.7
For the minority groups, a 2020 study by the Pew Center noted that the non-white voting population has played a large role in driving the nation’s electorate. From 2000 to 2018, the nation’s eligible voter population grew from 193.4 million to 233.7 million – an increase of 40.3 million. Voters who are Hispanic, Black, Asian or another race or ethnicity accounted for more than three-quarters (76%) of this growth.
So my point is this: ignore us at your own risk; you might see some unintended results at the purchasing table and voting booth! And it’s up to US to spread this message!
CONCLUSION:
So the Supreme Court has spoken and all existing race and gender based programs are potentially at risk. Complaining about the decision isn’t going to do much good.
Which brings me to my final thought. As I was mourning the demise of affirmative action, I experienced a vivid memory of me learning to ride a bicycle. At first I used training wheels and thought I couldn’t ride without them. Then at some point, after I’d gotten my initial balance, I realized the training wheels were holding me back. They KEPT me from peddling as far and as fast as I wanted.
Maybe it’s time to view affirmative action like my old bicycle training wheels. I don’t need the training wheels of M/W/DBE programs for myself. I certainly have the business size, strength and expertise to reach out a hand to help others learn how to ride the business and political bicycle. I know the various minority and women organizations possess equally outstanding resources to do the same within their own communities. Collectively we can work with our government agencies to incorporate some of the race-gender neutral programs which help all stakeholders and areas, simply through the concept of small business development and community economic development.
Most importantly, the absence of affirmative action programs now forces me to change my self perception and my outward presentation. I don’t want you to hire me because you have to. I don’t want you to hire me because I’m a woman or a minority. I don’t want to perform only to meet a “goal”.
Instead, hire me because I’m IMPORTANT economically and politically. Hire me because doing so economically builds my – and your – neighborhood, city, and state. Hire me because I provide a great product or service at a competitive price and can deliver it in a timely and workmanlike manner. Hire me! Because I’m GOOD at what I do!
1. City of Richmond v. J. A. Croson Co., 488 U.S. 469 (1989).
2. https://www.sba.gov/federal-contracting/contracting-assistance-programs/hubzone-program
3. https://www.forbes.com/sites/bridgetbrennan/2022/10/20/what-every-marketer-should-know-about-womens-economic-power/?sh=47ceee224d4c
4. https://www.forbes.com/sites/bridgetbrennan/2022/10/20/what-every-marketer-should-know-about-womens-economic-power/?sh=47ceee224d4c
5. https://nmsdc.org/nmsdc-releases-its-yearly-minority-businesses-economic-impact-report/?gclid=CjwKCAjw-vmkBhBMEiwAlrMeF-NorRzIV91FYVQvvm5lQwxBYBlSUYyjX9KO2tKNEOvzAkA3VOGoSBoCPGsQAvD_BwE
6. https://www.mckinsey.com/featured-insights/diversity-and-inclusion/a-300-billion-dollar-opportunity-serving-the-emerging-black-american-consumer
7. https://cawp.rutgers.edu/facts/voters/gender-differences-voter-turnout
© Denise E. Farris, Esq. (January 25 2022) This article may not be reprinted or reproduced in any manner without the consent of the author. Contact: Denise Farris, Farris Legal Services LLC. Email: [email protected]. Telephone: (913) 220-6203.
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