CT Contracting System “Not Legally Defensible”


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By Wayne Jebian
Saying that the state of Connecticut needed to change how it awards work to outside contractors, the Connecticut Academy of Science and Engineering presented its report on Phase I of its Disparity Study at the Legislative Office Building of the state Capitol. CASE Executive director Richard H. Strauss called the current system “not legally defensible.” However, he stopped short of saying that the system discriminated against minority contractors because the full Disparity Study was incomplete.
State senators and representatives from the Government Administration and Elections Committee agreed that change is needed; the only matter up for debate was which parts of the system could be changed sooner rather than later. A wholesale overhaul would not be possible right now, argued Strauss, because in order to change the law affecting minority contractors, the state would have to demonstrate a “compelling need,” otherwise, any new law would not be able to hold up in court.
Phases II, III and IV of the study are designed to demonstrate the extent of that need, producing a guideline for writing a new law. These phases would not be complete until Fiscal Year 2018, if the study moves forward and a new data-gathering system can be put in place as quickly as possible. “For the next five years, we’re in a kind of limbo,” said Sen. Anthony Musto, D-Trumbull. “The sooner we can get this done, the better.” 
 Dr. Fred McKinney, president of the Greater New England Minority Supplier Development Council, who has been one of the most vocal critics of the state’s current contracting system  (Article: http://ctln.local/blog/2012/11/13/critics-cry-foul-at-states-minority-set-aside-program/) was quick to criticize the projected time reported to correct the current contracting system. “That’s a time frame that is unnecessarily lengthy,” said McKinney, adding,” It’s unfortunately that blacks, Hispanics and Native Americans are not a priority in this state.”
 It appeared that many people present in the LOB chamber, legislators and audience alike, shared McKinney’s concerns. At one point, Strauss qualified his statements about racial discrimination by saying, “if there is found to be discrimination,” but was interrupted by an audience member who shouted,  “oh, there is!”
Ironically, Phase I of the study revealed that there were several measures that the Legislature could take even without having waited for the Disparity Study.  Among the biggest complaints leveled by McKinney and other critics has been that, under the current formula, the women-owned and minority-owned contractors competed against one another for the same pool of set-aside contracts, and that these had to compete against non-minority small businesses.
Strauss said that this formula could be changed by taking small businesses out of that pool, avoiding the legal headaches of changing the part of the law dealing with minority contractors. Doing so would likely increase the share of business going to woman-owned and minority-owned companies. Strauss also said that taking women-owned businesses out of competition with minority-owned businesses might also be possible in the interim before the full study is complete.
“Gender-based and race-based programs are held to a different judicial standard in a court of law, so why not separate them out?” proposed Alissa DeJonge, Vice president of the Connecticut Economic Research Center Inc., who was presenting the study results with Strauss.
Outside the chamber, Werner Oyanadal, acting director of the Latino and Puerto Rican Affairs Commission, said that he has been calling for just such a change.
“We would like to see the program separated between women-owned businesses and the regular minority-owned businesses,” he said. “At this moment, we have many small companies that are Latino-owned that are going to go belly-up if there are no remedies to the amount of contracts that they are getting. They cannot wait any longer. This is what they have been calling for the past five years.”
Sen. Michael McLachlan, R-Danbury,  addressed the idea that minority-owned businesses could be given better access to credit and bonding, which would increase their ability to compete without raising troublesome legislative and constitutional issues.
“That’s something we can do to jump-start this,” he said.
McLaughlin raised another issue that has been a concern for minorities and non-minorities alike: how to police the contracting process to catch “phony” women-owned and minority-owned companies that use various means to pose as eligible for set-asides that should be going to legitimate minority-owned businesses. DeJonge said that on-site visits were one measure recommended by the study that should be used to keep participating businesses honest on this point.
In the room for most of the presentation was Sen. Toni Harp, D-New Haven, who introduced the session and gave the history of the contracting set-aside programs. She told CTLatinoNews that she supported making whatever immediate changes would make the process more fair, including separating women-owned and minority-owned businesses from competition with each other. Although as the current frontrunner in the New Haven mayoral race, she might not be present to introduce legislation in the 2014 session, she urged her colleagues to act: “I would recommend that we develop whatever kinds of systems will provide the race-neutral support, such as access to bonding, that are in here. We can do that for all of the small businesses, and that will help minority businesses as well.”