Goals and Set Asides

The DOT goals program required that the DOT and its funding recipients use their best efforts to include women- and minority-owned businesses in the solicitation, bidding and performance of federal contracts.  The DOT has one of the most successful outreach programs of any federal agency with over 10% participation of DVBEs and also exceeds the individual 5% procurement goal for women-owned businesses.  This is not a set aside program but instead an agency which recognizes that increased competition will bring  more competitive pricing to the contracting process without compromising the quality of work. 

Agencies frequently require general contractors or prime bidders to document that they have contacted and solicited a bid or price from a women- or minority-owned company as part of the bidding process. Now, women- and minority-owned contractors still have to be qualified and capable of performing the work in order to be awarded or participate in the contract. However, the additional outreach is what opens the door to women- and minority-owned businesses. Most businesses do not want to be handed a contract only because they fit into a specific box due to their race or gender. What they DO want is equal access to contract opportunities and bidding.

Why are goals better than set asides?
A set aside program only allocates an extremely small part of the procurement dollar to this small elite group of bidders. Why should women and minorities be relegated to less than 1/4 of 1% of all procurement? Rather, they should have an opportunity to fairly compete for 100% of the procurement dollars.

As set aside programs are usually for fairly small contracts, it does not provide sufficient depth to grow a company. Implementing a goals program creates greater competition and more competitive pricing.

Goals create a level playing field for all qualified contractors to compete while still requiring those who are targeted by the goals program to be qualified, competent and submit a competitive bid.

So are goals still needed?
When women and minorities make up a substantial number of small business owners, yet their participation in the state and federal contracting arena are drastically less, goals are still a good way to open the market and increase competition.

The US Department of Transportation is requiring California (Caltrans) to reinstate race-based goals. A requirement of providing fair opportunity for contracting to all is of important state and national interest. Prop 209 was faulty in that it sought to do away with goals as well as quotas (set-asides). Quotas restrict trade and competition and goals/affirmative action creates greater competition and opportunity.

Deborah Wilder is the president of Women Construction Owners and Executives, USA (www.wcoeusa.org), an attorney licensed in California and Oregon, and the owner of a construction consulting company.