Winning Bid?

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BidsWhen President Obama took office, he vowed to help small and minority-owned businesses. Now he has signed a new law that will assist minority and women contractors by opening up the government bidding process. 



“The new law is a step in the right direction. When counting minorities under federal guidelines, white women are also counted as minorities. Asians receive the majority of all government contracts that minorities receive,” explains business expert Mike Pittman, founder and former president of the Springfield Black Chamber of Commerce. “Unfortunately, Black businesses will continue to be at the bottom of the barrel as it relates to these types of contracts, be it financial or any other type of contracting opportunity. The climate is often created but only “certain minorities” seem to benefit substantially.”



The new federal law aids minority and women contractors when dealing with regulators. The new financial reform law, or Dodd-Frank Act, oversees diversity among in-house staff and businesses that contract with the Federal Reserve as well as, various agencies including the Treasury Department, Federal Deposit Insurance Corporation and the Securities and Exchange Commission. Under the new law, office directors must terminate contracts with vendors who have “failed to make a good faith effort to include minorities and women in their workforce.”



“This bill as well as other bills that have been passed chips away at a system which has historically and systematically excluded minorities from contracting opportunities. Additionally, as with any bill of this nature, the key to its success is enforcement,” says Pittman, but warns, “The jury is still out on this bill to eliminate any cases of subterfuge which allow loopholes for majority firms to bypass the system and keep the “spoils” for themselves.”



In all, there are about 30 agencies that oversee the financial system. The law also included the launch of the Office of Minority and Women Inclusion (OMWI), which is charged with tracking diversity within and the pool of contractors who sell the government goods and services. So far, the country’s 12 Federal Reserve banks have opened OMWI offices, through which the banks will seek out minority and women contractors in areas ranging from janitorial services to information technology services.



While the new law will not end disparity in the bidding process, it is a move forward, notes Pittman. “As with all contracts along this nature, minorities – most notably Blacks – have not had and continue to not have access to the capital and the capacity to receive many of these contracts. Because of waivers that are often granted to the majority of firms, especially in the construction industries, that allow them to bypass minority firms, aids in the reason that minority firms, again most notably Black ones, don’t fare well,” says Pittman. “Also, front companies made up of white females but are controlled by white men receive an enormous share of these dollars. Bid shopping by majority firms of minority subcontractor bids allow them to bypass qualified minority bidders and give these contracts to their white counterparts.  Often times when minorities do receive these contracts, the profit margins are so narrow making it hard for them to complete the project let alone make a profit, thereby giving minorities a “black eye” (no pun intended) in the eyes of those who monitor these projects and thereby give majority firms fuel in which to have waivers granted to bypass these minority-owned firms.”