The Center Square: In public contracting, fixing discrimination with more discrimination isn’t the answer

Since the Supreme Court put an end to college affirmative action programs last summer, many have been wondering what’s next. Employment? Military academies? Public contracting?

All three, it turns out. But nothing highlights the absolute failures of racial preferences more than a new lawsuit in Houston challenging the city’s nearly 40-year-old minority business enterprise (MBE) program.

From the beginning, Houston touted its MBE program as a remedy to racial discrimination that kept minority-owned companies from winning contracts with the city. The idea was that by forcing every bidder on city contracts to give a portion of the job away to small businesses owned by women or certain racial groups, those minority-owned small businesses would become successful, hire other minority-owned small businesses, and eventually there would be no need for the city’s thumb on the bidding scale.

That the MBE program has been in place since 1984 will tell you something about how that idea panned out. When something is broken, you don’t wait 40 years for the fix to work. You wouldn’t wait four decades for the patch on your roof to finally stop water leaks during thunderstorms, or for a head football coach to have a winning season.

So why, then, when the City decided its system for awarding public contracts was broken, has it stuck with the same failed fix since 1984?

Because, despite the City of Houston’s “best efforts,” it turns out that you can’t fix racial discrimination against some racial groups by discriminating against other racial groups.

Minority set-aside programs don’t work because they are rotten at their core. Minority set-aside programs don’t remedy discrimination—they don’t even really attempt it. Nor do they grow successful, thriving companies that can stand on their own merit. If they did, Houston’s program wouldn’t be needed anymore. Instead, set-asides send the message that minority-owned companies can’t hack it without government help.

Houston’s MBE program in particular creates ridiculously unfair outcomes. Take what happened to my client, Jerry Thompson, for example. Jerry is the owner of a small landscaping company that regularly bids on public contracts to maintain Houston-area parks, school yards, and playgrounds. Almost all of Jerry’s employees are Hispanic, yet his company doesn’t qualify as an MBE because Jerry is not a minority. That means that if Jerry’s company wins a landscaping contract with the City of Houston, he’s required to give away a certain percentage of that contract – often over $100K – to a competitor that is minority-owned. In other words, Houston forces Jerry to take work away from his Hispanic employees and give it to another company’s Hispanic employees, all because of Jerry’s skin color.

This blatantly unconstitutional program isn’t limited to the City of Houston. In recent years, Harris County, the Port of Houston Authority, METRO, Harris Health System, and Houston Independent School District have either implemented MBE programs of their own or are in the process of doing so. Everywhere companies like Jerry’s turn, they’re being penned in by policies that value racial identity over who can do the best job at the best price.

Like any successful small business owner, Jerry doesn’t give up without a fight. With pro bono legal assistance from Pacific Legal Foundation, he filed a federal lawsuit challenging Houston’s MBE program as a violation of his right to equal protection under the law. As the Supreme Court indicated in its affirmative action ruling in June, the days of laws prioritizing membership in a racial group over individual talents, skills, or accomplishments are numbered.

For small businesses like Jerry’s, that day can’t come soon enough. It’s time for Houston to finally learn the lesson that the Constitution guarantees every individual has the right to equal protection of the laws.