Prize and Prejudice

Amid the current national backlash against affirmative-action programs, Colorado is taking what could be the first step toward instituting a state procurement system that would favor female- and minority-owned businesses.

The state's Department of General Support Services has quietly submitted a request to the General Assembly's Joint Budget Committee to approve the expenditure of $750,000 to study "disparity" in state procurement--the state's contracting for goods and services, a $1 billion annual industry. Governor Roy Romer approved the department's budget, including the request, last November. The Joint Budget Committee isn't expected to vote on the issue until March 5; committee chairman Tony Grampsas, an Evergreen Republican, says there's been little or no criticism of the idea, although the price tag does give him some pause.

Others are more troubled.
Because Colorado has no race- or gender-based program for state procurement at this time, many people, including Colorado Women's Economic Development Council member Cathy Walsh, speculate that the study indicates an affirmative-action program isn't far off. "I don't see any other reason that people would be promoting it," says Walsh.

Even state budget director George Delaney says, "It's fair to say that this is a first step before you take any action." He argues that the study will serve to more "precisely direct affirmative-action efforts," if any are needed.

Walsh is unconvinced. "Spending $750,000 to study a problem we all know intuitively exists is just wasteful," she says.

Instead of doing the study, or establishing gender- and race-based quotas, Walsh says, a better, cheaper alternative would be more outreach and training for all small businesses interested in getting involved in the state procurement system.

"This kind of money could be spent so much more effectively on outreach to teach businesses the ropes about how you get into the procurement system," she says. "Once you know the maze for answering an RFP [request for proposal], you can do it again, you're in, you don't have the same disadvantage anymore, regardless of your demographics."

Attorney General Gale Norton, an ardent opponent of existing Colorado affirmative-action programs, concurs. "It's not enough to prove statistical disparity," she says. "You also have to prove actual discrimination. So you can use your resources to research the past for discrimination and taking disparity studies, or you can focus on making opportunities for all small businesses."

But despite their critics, disparity studies are growing in popularity nationwide. Florida, Massachusetts, Texas, Illinois, Missouri, Maryland and New Mexico have had them done--at a cost ranging from $300,000 to $1 million. In Colorado alone, the City of Denver and the Regional Transportation District have conducted disparity studies. And the Colorado Department of Transportation has asked for bids on a statewide disparity study on highway construction contracts.

The $750,000 for the state's General Support Services study would pay a consultant to determine how many mino-rity- and female-owned businesses exist in Colorado, and whether they're being underutilized by the state. The study is necessary, says department director Andre Pettigrew, because a landmark Supreme Court case, Richmond v. Croson, requires this sort of data before any "remedial" action is taken.

The impetus for even considering such remedial action came from a recent study of purchase-order records by the department's Division of Purchasing. According to the department's budget request, that study found "consistently low levels of participation, usually ranging well below 6 percent," by minority- and female-owned businesses.

Still, Pettigrew says, the request for a study doesn't guarantee the state will institute an affirmative-action procurement process. In fact, says Pettigrew, it could go the other way. "It's always been a question whether or not we're discriminating," the administrator says. "Both sides ask the question. Women and minorities say, 'We're not being treated fairly.' Businesses say they don't want to do anything more than they have to. According to the Supreme Court, a disparity study is necessary to answer the questions."

But others think the disparity study may well prove to be more of a legal liability than an asset. "A study like that would create all the backup anyone would need to sue the state," says Walsh. Statistically valid evidence of discrimination, regardless of whether it applied to an individual case, could indeed be a boon to the litigious. That take on the study, however, wasn't considered by Romer, says budget director Delaney. "I guess you open the door for that," he says when questioned about the study's legal downside. "It's like you're damned if you do, and you're damned if you don't.


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