The Clinton administration Thursday set in motion changes in one of its premier affirmative action programs that would make it easier for white-owned firms to qualify for government contracts that have been reserved almost exclusively for minorities.
The planned changes in the Small Business Administration program, announced Thursday, are part of the administration’s effort to modify federal affirmative action policies after a 1995 Supreme Court ruling restricted the use of race as a consideration in awarding federal contracts.
Administration officials and others who follow the issue say the changes in regulations could mean that an additional 3,000 companies will become eligible to apply for contracts under the program. Most of them are likely to be owned by white women.
That distressed members of minority groups who said Thursday they feared the effect would be to give them a smaller share of federal contracting dollars.
The program, known bureaucratically as 8(a), is the federal government’s largest effort to use affirmative action in awarding government contracts.
In the last fiscal year, 6,115 companies — all but 27 of them owned by members of racial or ethnic minorities — were awarded federal contracts totaling $6.4 billion as a result of the program.
The changes in the program are expected to be effected later this year after a period of public comment.
Although the administration’s main purpose in devising the new rules was to comply with the Supreme Court’s ruling in Adarand Constructors Inc. vs. Pena, administration officials say that by allowing more whites into the 8(a) program, they will increase the size of the political constituency supporting affirmative action at a time when such programs are under increasing attack.
Aida Alvarez, administrator of the small-business agency, said it was “fair to say” that the administration “looked to strengthen the program by expanding the definition of who might be eligible.”
A company can now enroll in the program if it meets several criteria: It must be small; its owner must have a personal net worth of less than $250,000; and he or she must be “socially disadvantaged,” a designation the law automatically bestows on blacks, Hispanics, Indians, Asians, Eskimos and Native Hawaiians.
Whites must prove they are socially disadvantaged by showing such things as a history of discrimination, or unfair denial of credit.
Under the proposed changes, whites could prove social disadvantage through a “preponderance of evidence” rather than the more stringent legal standard of “clear and convincing evidence.”
Some students of the program say the main beneficiaries of the change will be white women who will be able to prove a history of discrimination much more easily than white men.
“You still have to prove that you are socially disadvantaged,” said Jeanie Barnett, executive editor of Minority Business Entrepreneur magazine. “I don’t think this is going to allow an influx of white males into the program.”
Others are not so sure.
“It’s a big question mark,” said one administration official. “It could mean that we find a lot of white women who make the claim they are socially disadvantaged and get in this program. But we could find a lot of people who are disabled, or who are white men in Appalachia. So as to what will happen, we don’t have the foggiest idea.”
Representatives of minority-owned businesses are concerned that whoever owns the newly eligible companies, fewer federal dollars will be awarded to minority-owned firms through the program.
“My feeling is that although white, female-owned businesses historically have had disadvantages, it’s very difficult to absorb them into that program without having a negative impact on minority businesses because the overall amount of resources has not been increased,” said Sam Carradine, executive director of the National Association of Minority Contractors.
