President Obama Solution; Kill Minority Owned Businesses…

by Staff October 30, 2011 4 Comments Business Misc. News Opinion Politics Weekly Columns

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(ThyBlackMan.com) It all looked so good in the beginning. There has been a change, but not what we expected. Unemployment is higher than ever for African-Americans. While there are many reasons, there is one direct correlation.

The amount of contracting by Black-owned firms at the federal government level has drastically been reduced to less than one percent – an all-time low. And instead of exhausting all avenues to improve the amount of Black contracting, the Obama administration is now taking formal action to end all minority goals from the agencies.

Serious decrease

There was a time a few years ago that the federal Department of Housing and Urban Development was enjoying a 40 percent level for minority contracting and most of that was with Black firms. Even the Congressional Black Caucus awarded HUD Secretary Alphonso Jackson for that accomplishment.

Today, that level is below four percent and it fell with lightning speed. The following is an open letter that I received from American Small Business League (ASBL) President Lloyd Chapman last week:

“On Friday, September 9, the Obama administration proposed a policy to end one of the most successful federal programs to create jobs and stimulate growth among minority-owned small businesses.

Will end program

“The policy, announced in the Federal Register, aims to end a program that established a five percent minority-owned small business federal contracting goal for the Department of Defense, NASA and the U.S. Coast Guard. I estimate that this change will have a significant, negative economic impact on a substantial number of minority-owned small businesses, costing millions of jobs.

“It is difficult to understand why, in the middle of one of the worst economic downturns in U.S. history, and when unemployment has hit minority communities especially hard, the Obama administration would end one of the most successful programs to create jobs for minorities.

“According to the U.S. Department of Labor, the jobless figure for African-Americans is 16 percent and 11.3 percent among Hispanics. Close to 35 percent of the U.S. population is made up of ethnic minorities and 5.8 million businesses are minority-owned. According to U.S. Census Bureau data, small businesses create 90 percent of all net new jobs in America. I estimate that this change will divert billions of dollars in federal contracts away from minority-owned small businesses, thwarting the power of those businesses to expand and hire.

“I have been a small business advocate for two decades and have rarely seen policies as detrimental as this latest proposal from the Obama administration. I have launched a national campaign to block its implementation. Minority-owned small businesses have until November 8, 2011 to comment on the proposed change in the Federal Register.

Impact not ‘minimal’

“The administration will tell you that the impact of this policy will be minimal and that you have been misinformed. Nothing could be further from the truth. I need you to help tell President Obama, Congress, the U.S. Justice Department and the media that there is indeed discrimination in federal contracting, and this program needs to be saved.”

We certainly agree with the ASBL. We are calling out to all groups, associations and individuals to actively protest the above. We all should write letters to our senators, congresspersons and the Congressional Black Caucus. This is a call for action to all of us who want to see our businesses grow and increase the amount of jobs they produce.

The end of the comment period for the Federal Register’s Request for Comment is November 9. Please comment in the name of the African Diaspora. If you need details on how to formally comment, go to the NBCC website, http://www.nationalbcc.org, and look under “Latest News.” There is no time to wait.

Written By Harry Alford

Official website; http://www.nationalbcc.org

4 Comments

Joe says:

February 9, 2012 at 5:26 pm

It’s racist to reserve a percentage of contracts for minority owned businesses. Racism against whites is still racism.

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honestly says:

November 1, 2011 at 1:51 pm

It’s not just HUD, the entire construction industry is a sham! Unions give big bucks to politicians and Obama’s policy ensures that Unions keep this industry on lock and not even crumbs are shared with a peasant!

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C. Harrison-Smith says:

November 1, 2011 at 9:05 am

I think that this a good thing. Why? I operated a small female minority owned contracting firm for 13 years providing a range of products and staff to the federal government as well as to city, county and state governments, primarily in Illinois but some contracts were in other states.

I can tell you from first hand experience that the programs are constantly abused through fraud.
I can tell you that on a number of occasions I was asked to serve as a “pass through” and take a cut off the top in order to meet Minority Business goals. A pass through does no work. And the prime vendors want it this way. They don’t want the minority vendors working with them. It’s a forced arrangement. The funds merely “pass through the minority firm and go straight back to the prime vendor with a “cut” to the minority business owner”. Each time I refused to participate in these schemes I was punished in one way or another. The programs can never work unless the minority owned business has a direct relationship with the government and this means submitting invoices to the government and being paid from the government instead of through the prime vendor.

I have never had a minority vendor’s contract that I didn’t have to fight like hell for or hire an attorney. On one occassion, after my firm had been designated as the female vendor on a contract at the county, I had the prime vendor tell me that they would speak with the Mayor to get an exemption from utilizing me and that they would hire an attorney to waive the requirement. It was only after I hired an attorney that we were able to settle on my receiving participation, and that was purely in the delivery of equipment because the prime demanded that under no circumstances was I to have any staff on the project. And this is one of the more “Tame” occurrences. We made a small profit before legal fees after fighting over the contract for 18 months.

The only way an 8a firm can become a big company in federal contracting is to play the game of pass through. 8A firms owned by African Americans get 9 years of preferriental treatment in federal contracting. 8A firms owned by American Indians get a LiFETIME of preferriental treatment in federal contracting. Hence, there are a slew of American Indian Owned 8a firms that are $800 million to over $1 billion in size and……and a large percentage of that growth is due to acting as a pass through. And these firms do nothing to help their “breathern” on the reservations. In most cases, these firms are run by greedy sellouts. Of course there are a small number of them that are reputable.

Once you do one pass through, they or should I say “the prime vendor contracting community” has the goods on you to blackmail you for the rest of your existence because everyone knows its against the law to take money without doing the work.

This is the dirty little secret that no one likes to talk about in federal contracting. Examine the staff of any one of those 8A firms that play the game and their people have little to no skills to warrant the type of work that “passes through” their firms. It’s a sham.

And since the minority business needs to get paid directly from the government then why have the designation? The designation should be based upon economic standing for disadvantage regardless of color and the relationship should be direct. Otherwise, it’s just a wasteful program.

Just look at the abuse of the minority and female vendor programs in Chicago contracting. We all know how these programs were abused under the Daley administration with White Owned firms fronting through their wives and compliant “minorities” willing to play the game of pass through.

A lot of Black people are going to be angry over this one but any honest contractors out there would agree with it.

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Nicholas says:

November 1, 2011 at 12:19 am

The National Black Chamber of Commerce. With a prestigious sounding name like The National Black Chamber of Commerce, who would think that it is just a arm of the United States Chamber of Congress (not afiliated with the United States government), I certainly would’nt, since I have always believed the US Chamber was a direct advocate of Big Business, Wall Street, shipping jobs overseas and the top 1% of the wealth in the USA. Be aware of any members of the US Chambers of Commerce Board of Directors.

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