Questions of Fairness 

Unafraid, Phil faces a new business study

Unafraid, Phil faces a new business study

A soon-to-be-released $600,000 study, undertaken to determine whether Metro discriminates against minority businesses, isn’t likely to show disparate treatment, Mayor Phil Bredesen predicts.

The mayor also anticipates that, if he is right, some Metro Council members will be disappointed. It was Council that originally pushed for the study, and some Council members were hoping the study would support the longheld notion that Metro discriminates against minorities when assigning contracts for public projects.

If the study indicates that a pattern of discrimination exists, Bredesen says, Metro could legally begin giving types of preferences for minority involvement in city contracts. Metro Council members who were hoping to set up quotas will also be upset, Bredesen says, because, without a documented pattern of unfair treatment, Metro can’t legally funnel business to minority companies in a discriminate way.

Disparity studies such as the one that is expected to be released in a few weeks are used “to show a continuing, current pattern of discrimination in an industry group,” Bredesen says, so that “you can then push the envelope constitutionally in terms of what you can do to right that problem.” However, Bredesen says he’s long been convinced that it would be “real tough” to find a consistent pattern of discrimination in Metro. “There are just too many things that we’ve done over the last few years to try and break through that stuff,” he says.

The mayor cites, for example, aggressive efforts to include minority businesses in the construction of the Oilers stadium in East Nashville. With nearly all of the work on the project already contracted out, the project claims an impressive 22.1 percent minority participation. Another 8.4 percent of the work is being performed by women-owned businesses.

The disparity study was actually prompted by another of Nashville’s megaprojects. In the wake of a paltry 1 percent minority participation in the arena project, and amid a highly politicized debate over the stadium, Metro Council funded—and got the mayor’s support for—the study in 1996.

Council wanted to determine whether Metro offers the same opportunities to minority-owned businesses as it does to other companies when government contracts are awarded. The study uses data from 1992 to 1996, although the local chapter of the National Association for the Advancement of Colored People (NAACP) and several Metro Council members had wanted to include information from before 1992.

“I suspect that if you look back over the history of the city one would have seen some inadequacies and inequities,” says Council member-at-large Ronnie Steine. But, Steine says, even if the study finds no disparity in the more recent years it covers, “it’s important to this city to have an objective analysis” of the issue.

Current data

Bredesen concedes that white-owned businesses have gotten the upper hand historically by receiving the bulk of Metro contracts. But he says disparity studies need a more narrow. “I wouldn’t argue for a second that there wasn’t some preference granted in the past,” the mayor says. “We don’t need a $600,000 disparity study to tell us that.”

The question that has to be answered, Bredesen says, is whether “there is a continuing pattern, which is demonstrable” of minority companies that are competitive in offering services to Metro but “that are not getting business in a disparate way.”

Bredesen and other Metro officials point out that Metro has made aggressive efforts over the last few years to educate “small and disadvantaged” companies—including businesses owned by minorities and women—about how to bid successfully for Metro contracts. Metro’s Division of Purchases even files periodic reports about the collective value of government contracts that have been awarded to businesses outside the mainstream. Between July 1997 and April 1998, for example, Metro awarded almost $18 million worth of purchase orders, contracts, and subcontracts to small businesses. Of that total, slightly more than $7 million went to minority-owned small businesses and $5.8 million went to small businesses owned by women.

Early on, Bredesen made it clear that he would only support funding for the disparity study if it was something more than a “political document” used simply to justify handing out contracts to minority companies. He pledged that Metro would make an honest effort to find out if local government had, in fact, treated minority businesses unfairly. Ultimately, Metro hired Oakland, Calif.-based Mason Tillman Associates Ltd., which has conducted similar studies in two dozen other cities. In its studies in other cities, Mason Tillman hasn’t typically found justification for cities to institute quotas. The project also involves University of Maryland at Baltimore County professor George LaNoue, a controversial consultant who has openly opposed affirmative action.

LaNoue predicts that the Nashville study will result in a more accurate assessment of discrimination than studies in some other cities have. He notes, for example, that the Nashville study will measure how often minority-owned businesses bid on contracts and then calculate how often those contracts are granted. Studies in some other cities have simply measured how many minority contractors exist in the community and then compared that number to the number of contracts granted to minorities—even if no minority contractors bid on a government project.

LaNoue says that methodology has led to a “false disparity” in other cities. In some cases, he says, cities have tried to institute some kinds of preferences or quotas for minority contractors but have lost constitutional battles in court because the disparity studies they used for justification weren’t solid.

Bredesen says he has no special knowledge about what the Nashville study will show, since he doesn’t have any results yet. But if his prediction is accurate and if the study shows no disparity in Nashville, he says, the effort may be, to some extent, wasted because “we tried and we don’t have anything to show for it.” On the other hand, he says, “It’s a little more than that—in the sense that we can put some of the current issues to rest.”

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