Let’s Set Aside Set-Asides (in government contracting)

Weekly Standard ^ | June 16, 2014 | Terry Eastland

[reaganaut1]

In our episodic “national conversation about race,” perhaps it is time to take notice of Rothe Development Corporation of San Antonio, Texas, which, you could say, has been having its own conversation about race—in the federal courts. Rothe is a government contractor that has now brought two lawsuits challenging racial preferences in federal contracting, winning the first, which was filed in 1998 and decided in 2008, and hoping, of course, to win the second, which was filed in 2012 and could go to the Supreme Court while President Obama is in office. At stake, ultimately, is whether the government will quit the business of preferring certain citizens to others on the basis of race—and thus discriminating against some—in awarding contracts.

A small business of roughly 120 employees, Rothe does contract work for the Department of Defense, the government’s principal contracting agency, with about 67 percent of federal contracting dollars. Rothe specializes in work involving computers, among them custom programming and systems design, as well as their operation and maintenance.

Starting in the late 1980s, Rothe had a contract to manage the computer systems at Columbus Air Force Base in Columbus, Mississippi. But when the business was up for bid in 1998, International Computer and Telecommunications, Inc. (ICT) got the job, even though Rothe’s bid was the lowest. The reason had to do with race. Indeed, as Rothe’s vice president, Dale Patenaude, told me, “the only reason we lost that contract was because of race.”

The statute under which the contract was let sets a numerical “goal”—that 5 percent of federal defense contracting dollars be awarded to certain entities, including small businesses owned by “socially disadvantaged” individuals. The statute incorporated the Small Business Act’s presumption that black Americans, Asian Americans, Hispanic Americans, and native Americans are socially disadvantaged.

[reaganaut1]

When Republicans have controlled the presidency and Congress, have they tried to do away with set-asides?

[Gen.Blather]

“When Republicans have controlled the presidency and Congress, have they tried to do away with set-asides? “

I don’t know that they tried, but they have been a feature of government contractors through both Bushes at least. I’d guess, no.

[MadIsh32]

Not at all.

There are many more set asides besides on race.

Small business
Women owned
Veteran owned
Minority owned
Alaska Native (google the stories on Alaska Native Corps)

They all end up serving essentially as “front” companies on major procurements to the big boys and cost tax payers extra money

[cripplecreek]

A couple of years back it was determined that our local post office needed 2 handicapped parking spaces on a concrete pad.

Rather than hiring the contractor down the street who could have done it on a weekend they had to bring in multiple diversity contractors from Detroit. It took 3 weeks to do what the local guy could have done on a weekend.

[Oldexpat]

The set asides are vehicles of corruption. Lots of so-called minority or female owned companies are just dummy companies set up just to take advantage of the set asides.
These, along with prevailing wage laws should be repealed.

[KC Burke]

You forgot few others.

Service Disabled Vertern Owned
HUBZone Businesses (10% advantage when bidding Prime for these businesses operating in economically disadvantaged central city areas)

[dsc]

“The set asides are vehicles of corruption.”

Our entire government is corrupt. All three branches.

In many cases the corruption is intellectual, as the bureaucrat or judge suffers from leftard dystopia disorder.

[SoothingDave]

So let’s help elect more Democrats?

[JHL]

I agree - Alaska Native corporations are at the absolute top of the pecking order. We have several such entities operating here in small town Virginia, and they are pulling in money hand over fist.

And don't forget the newest category of set-asides: Economically Disadvantaged Woman-Owned Small Business. (as opposed to the standard Woman-Owned, which has been around for years).

[MadIsh32]

Forgot about those!

HUBzones I actually think are a good idea, this comes from Jack Kemp’s “enterprise zones”

All of the others you can toss in the trash can and are a big pain in the ass to deal with when it comes to submission time.

[Some Fat Guy in L.A.]

The set-asides most definitely add cost and no value.