Two groups representing Asian and Native American businesses want the city to change its definition of minority back to its original wording so that they can be eligible for the Small, Disadvantaged, Minority and Women Owned Business (SDMWOB) program.
Asian and Native Americans were dropped from the city’s “minority” definition last fall.
Steve Rao and Tony Hayes, representing the Council of American Minority Professionals and the North Carolina Indian Economic Development Initiative, respectively, asked the city council this month to reinstate the two groups to the program.
Last year the city council voted unanimously and without debate to go with a 2009 North Carolina Department of Transportation disparity study that did not include Asian and Native Americans in its definition for disadvantaged business programs.
“We feel like it’s totally unconstitutional,” Hayes said. “It affects not only the 300 folks in your program, but it affects thousands of Native Americans and Asian Americans that really want to do business with the City of Raleigh.”
The intent of the SDMWOB program is to include and encourage more small, women- and minority-owned businesses in the bidding process for city contracts. According to Luther Williams, the city’s business assistance program manager, there are 475 SDMWOB businesses listed with the city. Of those, Asian-owned businesses account for 20 and there are five Native American-owned businesses.
“The city has not done its own disparity study because of the expense,” explained Mayor Charles Meeker. “So we just followed what the DOT had done and included their categories per staff recommendation.”
The DOT conducts a disparity study every five years to ascertain if minority- and women-owned business are being utilized according the goals set by their own program.
Terry Canales, state contractual services engineer for the DOT, said the last study found that Asian and Native American businesses did not have a high availability rate. Those that were available — or ready, willing and able to work — were working at their full capacity.
“With that, our program removed Asian and Native Americans,” she said.
But Canales explained that the program requirements are constantly changing and it is possible that Asian and Native Americans could be reinstated after the completion of the next study in 2014.
Rao told the Record these businesses are primarily in construction, engineering and consulting and by excluding these two categories, the city would no longer give them an advantage that could be necessary for them to be competitive.
Rao said the state’s Office of Historically Underutilized Business policy and federal and Wake County laws all include Asian and Native Americans in definitions for disadvantaged business programs. Rao said he doesn’t understand why the city doesn’t follow the state law, but follows the DOT recommendation.
“The rationale was that the DOT does similar kinds of business in some ways,” said City Manager Russell Allen. “We’re a capital intensive business.”
He explained that like the DOT, the city does a lot of construction and engineering.
“We were trying to be as close to something, that would hold up — if challenged legally — and we felt like that was the best we could do,” he said.
Allen said that the new policy is much more aggressive than the old policy, which was just for women and minorities.
“We needed to have a better rationale for getting to the truly disadvantaged,” he said. “Not just that you’re a minority, but that you’re disadvantaged and that there’s some basis for that disadvantage.”
Rao said that data shows that only a small percentage of contracts were given to these groups and by excluding them from the program, it would result in even fewer contracts.
“I think it has a cascading affect,” Hayes said. “Not only does it affect the folks that are in the diversity program for the city, but also folks that are outside Wake County that work for those contractors.”
Both Hayes and Rao expressed concerns that the change would have a rippling effect and that other municipalities might follow Raleigh’s lead and exclude Asian and Native Americans from the disadvantaged business programs.
“Discriminating against American Indians and Asian Americans, two of the smallest ethnic groups in the state, does not set a shining example for Raleigh and the rest of North Carolina,” Hayes said.
Rao and Hayes gave the city 30 days to respond to their complaint.
Rao said that his group wants to see a fair solution that includes Asian Americans in the program.
Hayes said his group members will decide their next step after hearing from city officials.