Richmond enacts new set-aside law - Virginia city's minority contract set-aside ordinance

Black Enterprise, August, 1993 by Cliff Hocker

Four years after Richmond, Va.'s contracting laws were struck down by the Supreme Court, the city has approved a new minority set-aside ordinance designed to address historic racial discrimination in the city's construction industry. These hotly contested rules adopted by the Richmond City Council in April are intensifying the national debate over minority set-asides of government work.

The new measure replaces the city's original set-aside ordinance that reserved 30% of city construction contracts for minorities. The U.S. Supreme Court decision in City of Richmond v. Croson overturned that law in 1989, finding that the city failed to establish a history of disparity between actual and potential minority participation in contracts.

Under the new law, when awarding contracts the city is required to give preference to prime contractors who have at least 20% minority involvement at all levels, including management. The 20% goal is to be achieved through "good faith efforts" by contractors and the city. Contractors will be given a "prequalification score" based on their past minority hiring efforts and future proposed efforts. Those found misrepresenting minority participation can be barred from conducting Richmond contracting for two years.

"Adopted unanimously, the ordinance is perhaps the beginning of addressing the concerns of minority contractors and legal aspects of the Croson case," says Mayor Walter T. Kenney. "Hopefully, it will meet the test."

The test has come swiftly as both white and black contractors line up against the new law. White contractors charge that the law is unfair. Critics in the black community feel more time should have been taken to develop minority contracting rules similar to those adopted by Atlanta, Philadelphia or Tampa.

"Someone will decide that 'this is enough' and take it to court," says Steven Vermillion, executive director of the mostly white Associated General Contractors of Virginia Inc. He maintains that committing to 20% minority involvement before reviewing project plans would make it hard to do business with the city. He also says reaching that level of minority involvement is impractical for small family-owned businesses in the industry. If they structure their case right, the person who takes this to court will win," Vermillion predicts.

James E. Sheffield, lawyer for the Central Virginia Business and Construction Association, a black contractors group, says that the Richmond plan's vagueness makes it ripe for a court challenge. He also says the new law is hard to enforce.

"It's a good faith' plan," says Sheffield. "Historically, white prime contractors have not exerted their best efforts to hire minorities, even when mandated to do so. Since they are not under any mandate here, I don't see any reason for them to change."

Mayor Kenney is betting that scheduled July bidding for capital improvement projects worth millions of dollars will encourage both white and black contractors to embrace the new law. By press time, no contractors had yet challenged its constitutionality. But stay tuned.