Certified WBE Heppner Hardwoods – Flooring and Molding

Why has the WBE program continued after the passage of I-200? Didn't I-200 repeal affirmative action?

The WBE program continues because its objectives are consistent with the policy set forth in I-200. In relevant part, the initiative refined California's existing anti-discrimination law to prohibit discrimination against, or the grant of preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in public contracting.

What are some examples of the "preferential treatment" prohibited by I-200?

I-200 did not define the term "preferential treatment" for M / WBE {a.k.a. woman owned business } and the term has yet to be defined by the courts or the legislature. However, when I-200 was passed state agencies and educational institutions reviewed their administrative regulations, programs and practices to identify and discontinue any that might be considered to constitute preferential treatment in order to ensure they were not in violation of I-200.

M / WBE {a.k.a. woman owned business } Doesn't Affirmative Action create an environment where less qualified businesses are selected over more qualified businesses?

No. Implicitly, this question presumes an unproven correlation between a M / WBE {a.k.a. woman owned business } business' ability to provide a quality product or service and the race, ethnicity, or gender of its owner(s). Affirmative action assures equitable opportunities for those businesses that have been excluded because of the owner(s) race, ethnicity or gender to compete. Clearly, not all white male owned and operated businesses are more qualified than businesses owned by non-white individuals. California's WBE program has never included any form of "set aside" or other provision requiring that award of a contract be made without regard to the business' ability to provide the product or service according to requested specifications; e.g., price, workmanship, quality, delivery time, etc.

Isn't Affirmative Action reverse discrimination against white males?

No. Historically and currently, the majority of award decisions are made by white males. The purpose of affirmative action is to counteract the effects of past and present discrimination of M / WBE {a.k.a. woman owned business } and/or preferential treatment, practices that have effectively excluded firms owned and controlled by persons who are not white and male. Further, it is incorrect to presume that white males are excluded by the operation of the state's WBE program. White males can own up to 49 percent of an WBE and, in fact, approximately 12 percent of certified WBE firms have at least one white male owner. Additionally, over 24 percent of certified Women Business Enterprises (WBE) have community property ownership, meaning the businesses are owned by women whose spouses are white and male.

Doesn't the State have to pay more whenever it contracts with a minority or woman owned and controlled firm because of the time it takes to find an WBE firm?

No. The state has not observed any disproportionate increase in contract costs that can be attributed solely to the time required to find a minority or woman-owned business. Further, OMWBE has made it relatively easy to find M / WBE {a.k.a. woman owned business } firms by maintaining a directory of certified businesses on-line and conducting research for agencies upon request. Except for those situations where an agency can simply call one firm or show evidence of limited informal competition, which is how a significant percentage of state contracts are awarded, it should not take any longer to find a minority or woman-owned business than it does to find any other firm.

CONTRACTING/PROCUREMENT GUIDELINES

Are state agencies and educational institutions required to have WBE goals on their contracts/procurements?

State agencies and educational institutions have never been "required" to set goals on all of their contracts/procurements. Goals to utilize WBE firms should be set on specific contracts/procurements only when it is determined that there are available certified firms to provide the product or service being sought. This was true prior to the passage of I-200 and has not changed since its passage. Prior to December 1998, some agencies and institutions set participation goals on the contracts/procurements they administered and rejected bids/proposals that did not reflect participation at or above those levels. This practice was discontinued with the passage of the initiative.

Currently, each state agency/educational institution has the authority to establish voluntary goals on individual contracts/procurements. When they do, prospective bidders/proposers are alerted that a specific level of WBE utilization has been deemed achievable on a specific contract/procurement. However, meeting the goal(s) is not a requirement or even a factor to be considered in determining who is awarded the contract/procurement.

Does OMWBE hold state agencies/educational institutions accountable for meeting annual WBE goals?

OMWBE reports the annual M / WBE {a.k.a. woman owned business } WBE goal achievement to the Governor, Legislature and State Auditor. While OMWBE itself has no authority to sanction state agencies and educational institutions if they fail to meet their annual WBE goals, these entities are responsible for carrying out all duties and responsibilities prescribed by statute and regulations, including the duty to meet annual WBE goals set by OMWBE regulations. The regulations apply to all state agencies and educational institutions that make discretionary expenditures for products and services covered by the WBE program. The goals enable the agencies/educational institutions' efforts to be tracked. Agencies can then be held accountable for the results of their efforts and OMWBE can design narrowly-tailored programs to ensure all sectors of the State's business community have access to State contracting and procurement without regard to preference or discrimination.

What WBE bid/solicitation clauses are not permissible?

Provisions that condition award of a contract upon attainment of the WBE goals established for a specific contract/procurement cannot be used, nor can clauses indicating points will be awarded to a bidder whose proposal includes WBE utilization equal to the stated goals. Provisions that allow a contract/procurement to be awarded to a bidder whose proposal included WBE utilization equal to the state goals, notwithstanding that the bid was not the lowest dollar amount.

What practices other than goal setting on individual contracts can state agencies and educational institutions use to encourage utilization of WBE firms on state contracts/procurements?

Include WBE firms on lists of vendors to be notified of their contracting/procurement opportunities.

Avoid bundling of contract/procurement work scopes, unless project feasibility is jeopardized.

Is there anything wrong with purchasing agents using the same vendor year after year?

With the passage of I-200, this could be viewed as "preferential treatment;" particularly, if there is evidence that there are certified businesses ready, willing and able to provide the product or service. This practice does not encourage competition - meaning existing firms have little or no incentive to pass on to their customers in the form of lower prices the improvements in product quality and production efficiencies occurring in their industry. Vendors are typically motivated to make their product or service more attractive, in terms of pricing and quality, to a customer when that customer has multiple sources from which to acquire the product or service. Unless the purchasing agent periodically determines that there are no new vendors who can supply a better quality product or service at a lower price, then the public is not assured it is getting the best value for its money. Indeed, when purchasing agents do not solicit new vendors, choosing instead to purchase from the same supplier year after year, all other businesses (including those new businesses owned by non-minority male vendors), have no opportunity to introduce their products and services to the State.