Minority contractors struggle since passage of Initiative 200
Leajak Concrete Construction did mostly government work since its founding in 1992, fitting into the "minority" slot created by programs to ensure opportunity for those historically left out of the "old-boy network."
A sheaf of letters from satisfied general contractors attest to Leajak's efforts.
But three years after Washington voters approved Initiative 200, which eliminated state preference for women and minorities in education, hiring and contracting, Leajak is struggling to bring in $1 million a year. Its payroll has been slashed to three: Anderson, a supervisor and a part-time bookkeeper.
When he calls now about bidding a job, he's often told, "Gee, Fred, we don't need a minority contractor on this job."
Before I-200 took effect in 1998, the state encouraged use of minority outfits — usually subcontractors — on state construction projects.
The program "helped us grow," said Reginald Frye of Seattle, whose Three A Industries predates affirmative action.
The state's goal was to hand off 9.6 percent of the work to minority-owned companies.
In fiscal 2001, just 3.1 percent of the $884.6 million in contracts from executive agencies — $27.6 million — went to minority-owned businesses, down from 4.9 percent — $56 million of $1.15 billion — in 1999. The program's best showing was 1998's 10.8 percent.
While I-200's goal was to eliminate preferences, "the preference for big business hasn't gone away," Frye says.
That's the key point in a federal lawsuit filed last summer by the Pacific Northwest Chapter of the National Black Chamber of Commerce, which cites I-200 in alleging blacks are being illegally shut out.
"I think everyone is struggling to try to figure out how do you continue to have this participation by minority-owned businesses," said James Kelly, head of the Urban League of Metropolitan Seattle.
Getting started in construction is tough. Big companies offer economies of scale that start-ups can't match. Longtime firms have relationships that ensure them a piece of the action.
These factors were part of the equation that produced national and local affirmative-action programs.
Affirmative-action programs helped minority contractors get started — "but it's not enough" to counter the advantages of more established operations, said William Bradford with the University of Washington's business-school program. And the only recourse now is "moral suasion."
Anderson looked into Seattle's new Boost program, intended to help bridge the gap with help for businesses at an economical disadvantage. But the earnings cutoff for eligible firms is $15 million a year.
"How can I compete with a 15-million-dollar-a-year company?" Anderson said.
City officials say the fledgling program is still being fine-tuned. It's one of several efforts being made to keep minorities in the loop.
While the city can't require use of minority contractors, there are still mandatory goals for federal projects. Kathy Canorro of the state's Office of Women and Minority Business Enterprises said her agency steers business owners to the Small Business Administration and the U.S. Transportation Department.
INFORMATION
On the Web
State Office of Minority and Women's Business Enterprises: www.omwbe.wa.gov
Seattle's Boost program: www.cityofseattle.net/contract/boost.htm