Clinton's 8(a) Two-Step

Watch what he does, not what he says, is the best advice for minority-owned companies

P> The White House has announced that it has no plans to significantly alter the $4.8 billion 8(a) program for minority-owned companies, but minority business advocates don't believe a word.


A pair of confusing articles in The Washington Post and The New York Times caused the latest tremor. They described the long-awaited conclusions of the White House's review of affirmative action programs.


A March 7 Post article said the administration, "is preparing new rules for all federal departments that would impose limits on race-based government contracting and require proof of discrimination before such contracts can be awarded." The report also quoted George Stephanopoulos, an aide to President Bill Clinton, as saying, "We want to do everything we can to promote minority contracting."

But a March 8 New York Times article quoted an unnamed official as saying, "As a practical matter, set-asides are gone."

The news reports showed that "the administration is determined to eliminate set-asides," such as the program for small, disadvantaged businesses, said Anthony Robinson, president of the Washington-based Minority Business Enterprise Legal Defense and Education Fund. The program awarded $9 billion in contracts during 1995 to companies that certify that they are owned by minority entrepreneurs.

The articles were confusing partly because they included statements contradicting White House policy, said Babielyn Trabbic, chief of The Presidio Corp., Lanham, Md., and president of the National Federation of 8(a) Companies, based at The Centech Group Inc., Arlington, Va. "Depending on who we've spoken to [in the administration], and what comes across our desks, we get conflicting reports" on the details, said Trabbic.

Dorothy Jackson, who tracks affirmative action issues for Rep. Donald Payne, D-N.J., chairman of the Congressional Black Caucus, said, "There's all kinds of double talk that we have to be careful of," she said.

The conflicting reports have caused the minority business community to fear the administration will quietly roll back minority contracts, even as it publicly defends them.

But other observers believe the opposite -- that the administration is quietly securing the contracting programs, even as it publicly calls for rollbacks. "The administration is playing games [with news releases].... I don't think Deval Patrick, [the assistant attorney general for civil rights,] will give an inch unless he is forced" by repeated court decisions to reduce affirmative action contracts, said Abigail Thernstrom, a senior analyst at the New York-based Manhattan Institute.

Still, Thernstrom's argument does not carry much weight with minority contractors. Many say the administration is trying to please white voters and minority contractors by fudging its position.

"There is a continuing desire to appease the Angry White Man on the part of this administration," said Robinson.

"It is tied into politics.... It boils down to [election] politics," said Trabbic.

Jackson said, "The confusion is on purpose so no one can say [administration officials] are doing anything against [minority businesses, and it is intended] to keep as many people as possible complacent until after the election."

"They are trying to be all things to all people and those [Washington Post and New York Times] articles were part of that.... We thought we had a friend in the White House, and now we don't know," said Marine Laverdy, director of the Washington-based Latin American Management Association.

The reporters denied that they had been exploited by the White House. "No, I don't believe I was being spun," said Steven Holmes, the New York Times reporter.

Ann Devroy, the Washington Post reporter, said administration officials briefed her to prevent a misrepresentation of the review.

In response to mixed signals from the White House, minority business advocates are uniting to preserve the programs. "We can be the swing vote that either votes to put them in office or not," said Trabbic. Laverdy's group is considering marches and sit-ins.

One major indicator of the White House intentions is a March 8 paper prepared by the Small Business Administration, titled "Administration Review of Affirmative Action." To save the affirmative action programs from court challenges, small, disadvantaged business contractors should prove their eligibility for the set-aside program, and the 8(a) program should allow more non-minority entrepreneurs who can "establish by a preponderance of evidence...that they are socially and economically disadvantaged," said the paper.

The cumulative value of annual SDB and 8(a) contracts will be limited by benchmark analyses showing the level of contracts that would likely be received by minority contractors, absent discrimination. If minority contracts fall below the benchmark, then "a price or evaluation credit will be authorized" for SDBs, said the paper.

Also, the government will not try to restart for at least three years the "rule of two." Until its elimination last year by a court challenge, the rule-of-two set aside for SDB competition any contract where at least two qualified SDB companies wished to bid. The measure created roughly $1 billion in minority set-aside contracts per year. The 8(a) program will not be affected by the moratorium, said the paper.

Another sign of the administration's intentions is how it defends the 8(a) program in court. One lawsuit challenging the 8(a) program was heard in March in Albuquerque, N.M. Another is scheduled for April 18 in Washington, D.C. Administration officials defended the 8(a) program as a reasonable method to boost the number of minority contractors, and said that non-minority business owners are free to join if they can prove past discrimination.


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