Derailing Affirmative Action

Randy Pech says the government's disadvantaged business programs discriminated against his company. This fall, the U.S. Supreme Court will decide if he's right.

"It nullifies the program," agrees Lacey.

The biggest beneficiaries of disadvantaged business programs may not be minority-owned businesses, but women-owned businesses, particularly traffic-control ventures -- the businesses that direct traffic at construction sites. "I think it's helped some," says Cruz. "I think it's probably helped women a lot."

As part of its own efforts to meet strict scrutiny, in 1998 the State of Colorado performed a disparity study of all its agencies to gauge how DBEs were doing. "It was clear we had to narrowly tailor the program," says Gallegos. The study found that between 1990 and 1996, Hispanic- and women-owned subcontracting businesses had been overutilized in highway-construction jobs, while African-American, Asian and Native-American businesses, as well as those owned by white men, were underutilized.

Brett Amole
Val Pech urged her husband to protest the unfair nature of affirmative-action programs.
Brett Amole
Val Pech urged her husband to protest the unfair nature of affirmative-action programs.

So in October 1998, the state took Hispanic- and women-owned businesses off its goals list. No longer would it make an effort to use those businesses more. The impact on those businesses was huge. "How can they tell me I'm not a minority?" asks Doris Quintana of DQ Construction, who's upset that other groups are still included on the disadvantaged list. As for the guardrail companies, all five were removed from the goals list.

"If you make the [state] disadvantaged enterprise goal, it shouldn't matter what your gender is or race is," says Laurie Gallegos, co-manager of Cone Zone, a Greeley-based traffic-control company. The DBE program helped Cone Zone get started in 1998, but the company's sales diminished in 2000.

In fiscal year 1997, $35.1 million was awarded to DBE prime- and subcontractors, out of an available total of $374 million -- about 9 percent. In 2000, DBEs received $31.2 million out of a possible $598 million, only 5 percent of the total available. (Through May of this year, DBEs have received 6.8 percent.)

A second disparity study, completed this past April, covered DBE participation from October 1, 1996, to March 30, 2000, a period during which $1.9 billion in state transportation work was put out to bid. The study determined that women- and Hispanic-owned businesses were now being underutilized, along with those companies owned by other minority groups. Construction businesses owned by white men were being overutilized.

"In the two years since they changed that," says attorney Jean Dubofsky, who represented the state in its suit against Adarand, "the numbers have dropped precipitously."

From now on, the state will be monitoring DBE progress on a quarterly basis. And just last month, Hispanic- and women-owned groups were returned to the state's goals list. This year's target for DBEs is 10.39 percent participation -- which is almost identical to the 10 percent goal set by the Public Works Act nearly 25 years and many court cases ago.

Cruz received three big state jobs in 2000 (his DBE status was not responsible for any of them, he insists), which have kept his coffers full. But this year he hasn't gotten any state work, nor has C&K.

Ideal has pulled in $1 million in subcontracting jobs but nothing in prime bids. "We're getting beat," says Bockelmann. "Cruz beat us, Adarand beat them. There were a couple of jobs over by Gonzales, they got them."

"If you're gonna get guardrail, you have to get tough," he adds. "The margins are pretty thin."

This past January, the Pechs got a call from Rob Corry, an attorney they'd met when they testified before the U.S. Senate in 1997. Corry was creating a Colorado ballot initiative that would be similar to California's Proposition 206, the 1996 measure that outlawed affirmative-action programs in that state. Corry invited the Pechs to a meeting in Denver.

From that meeting came the start of a new group: Unite Colorado. Val Pech was asked to be co-chair, and she collected the business cards of the meeting's other participants and researched them. "I didn't want to be involved with anyone who was racist or bigoted," she says. "I wanted to make sure they had the right reasons for doing this. Everybody checked out."

In April the group approached State Representative Shawn Mitchell, an Adams County Republican, who agreed to sponsor a bill that would end racial and gender preferences in government contracts and eliminate race and gender as factors in college admissions.

Her colleagues at first wanted to leave gender out of the language, Val Pech remembers, but she balked. She didn't know how she could take a public stand against affirmative action while being "this little white girl," she says, "and I need preference." The others eventually relented.

The group wanted the legislature to approve the measure for the 2002 ballot. The proposal passed the House State Veterans and Military Affairs Committee but died in the House itself. So Unite Colorado is now working on a new initiative that it plans to petitition onto the ballot.

What the Supreme Court decides this fall could make a big difference. "I think they've been trying to take a case to get rid of affirmative action for some time," says Dubofsky. "Maybe this case is it."

The judges' ruling could affect hundreds of programs across the country. Over the last generation, people of color and women have become stakeholders in businesses that deal with the government. Now "those policies are at risk," Robinson says. "When you don't have a public-policy mandate to create opportunities for ethnic minorities and women, those opportunities cease to exist."

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