White Companies Nab "Minority" Contracts

This story appalls me to my core. A few years back in the Detroit area, bids went out for work on metro Detroit's airport (located in the suburbs), with official procedures calling for some paving work reserved for "minority-owned" businesses. Only one black-owned paving company -- based in Detroit -- applied, got certified to perform the work if it won a bid, but it won no work. Instead, all the paving work reserved for "minority-owned" companies went to a single outfit, which filed as "Hispanic-owned." Turns out that this company was a phony front for two other real white paving companies HQ'd in the suburbs. The feds uncovered the scam, got the two companies to officially admit to it, and fined them collectively $12 mill, about 20% of their collective annual income.

Those companies continue to thrive, while the black company flounders, with no government contracts. The owner of that company asks a very interesting question: Since the fraud of the white companies cost him business, why does that fine go to the federal govt instead of to his company?

As a general rule, I oppose Affirmative Action. However, had this affair worked out as intended, a significant contract would have gone to an authentic, home-grown Detroit business, employing people and spending money in a place that the rest of us tsk-tsk for its civic and business leaders making so many poor choices. Well, here's a business leader making smart choices, and now he's going down the tubes, while cheaters in the suburbs merely get a fine, paid to the government that should have prevented this in the first place.

What a disgusting shame.


Nadir said...

There's another point in this story that adds insult to injury: The unethical companies that fronted, pretending to be minority-owned are now working on The Lodge Freeway project where they employ few if any of Detroit's Black residents.

So not only does the Black contractor get squeezed out of work, the infringing companies thrive and squeeze Black construction workers out as well.

Paul Hue said...

I'm fully with you on this. With all of us suburbanites righteously and rightfully criticizing the poor choices of Detroit residents and officials, here is a case where some Detroit residents are making all the right choices, and they get pushed out of the way by suburbanites.

Who are the people who made the Lodge frwy contracting selections? I will support any effort to address and remedy this very clear outrage. Those two cheater companies should be the ones to get excluded from govt contracts, not the Detroit company that played by the rules.