Affirmative Action With the Realms of Procurement and Contracting Research Paper

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Affirmative Action in Procurement/Contracting

Affirmative action programs in procurement are amongst the more significant government programs proposed to progress self-employment prospects for minorities as well as women. In essence, the policy on affirmative action with regard to procurement or contracting necessitates that business concerns owned by women or the minorities, shall have the utmost gaining prospect to take part as supplies for goods and services. This also takes into account construction, irrespective of whether bought with a grant, contract or organizational funds. In accordance to Marion (2011), statistics indicate that in the year 2002, about 7% of federal procurement funds were granted to underprivileged enterprises and initiatives, through the Small Business Administration (SBA). In addition, it is a prevalent feature for numerous national and local government agencies to offer preferential treatment to organizations that are minorities (Marion, 2011). In recent periods, the decisions made by the law courts and the different measures undertaken by the state have decreased the scope of, as well as in a number of settings gotten rid of, affirmative action programs on the basis of sexual category and racial background. This in turn has rejuvenated the significance of comprehending the important role in which affirmative action plays in the accomplishment of women and minorities who own their businesses and are self-employed (Marion, 2011).

Affirmative Action in Procurement / Contracting in the Highway and Construction Industry

The application of affirmative action is for the most part prevalent in the construction and highway procurement industries. From the 1970s and 1980s period, majority of the states in the United States have made use of affirmative action to reward contracts and deals to minority owned companies. In addition, from the year 1982, the Federal Highway Administration has obligated the states to make use of affirmative action in granting projects by means of federal funds. For instance, towards the outset of the century, statistics indicate that states granted just about $14.6 billion in total of construction and repair contracts via federal funds. From this particular figure, roughly $2 billion was granted to companies that were owned by women and minorities.

In the prevailing number of years, states have had more capability to employ measures that are neutral to all racial backgrounds in meeting objectives. This in turn had had a disparaging impact on the utilization of businesses owned by minorities. Gaining an apprehension of the impacts of affirmative action in the highway, procurement industry is made significant by the importance and impact that the public sector has. In the two preceding census undertaken for industries, nearly 75$ of the revenue generated by companies operating and based in the construction, highway and street industry was from projects owned by the government. For this reason, the alterations made in the public procurement policy will have a significant impact on the companies that operate in the highway and construction industries (Blanchflower and Wainright, 2005).

At the outset of the year 1982, the United States Department of Transportation mandated states to execute and enact affirmative action programs for minorities in the granting of road and highway construction contracts that are financed with federal aid. In particular, across the nation, states were obligated to grant ten percent on the minimum, of the total value of the contracts bestowed upon small businesses that were owned as well as operated by minority groups. However, the states were allowed to entreaty and establish an objective for minority involvement below the ten percent mark that was instituted. Six years later, these affirmative action programs were extended out to encompass businesses enterprises that are owned and operated by women. The main purpose of this was so that states were able to gratify the ten percent obligation by granting contract monies to companies owned by women on top of procurements from minority-owned business enterprises (MBEs).

The effectiveness of affirmative action in public highway construction is one of the significant policies that are largely not taken into consideration. In the course of the developed years of the affirmative action program, more aggressively employed affirmative action at the national level considerably upturns purchases from businesses owned by minorities. However, this had had very minimal impact on the procurements from businesses owned by women (Holzer and Neumark, 2000). By raising the Disadvantaged Business Enterprise (DBE) objective, there is a greater effectiveness at increasing the level of utilization of DBEs across the states with stronger implementation administrations and when the amplified objective is probable to be binding.

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At the outset periods of the affirmative action program, more often than not, states alter their objectives. This is probably owing to initial modification to program factors, perchance to make them more fitting and suitable for state circumstances. According to Marion (2011), as a result, several peculiar outcomes come about. Seemingly, stronger implementation administrations, in point of fact, have a lower Disadvantaged Business Enterprise utilization-goal slope, and altering the state objective has a greater effect in the course of this time when states are effortlessly meeting or extensively missing their Disadvantaged Business Enterprise objective.

A great deal of analysis has been made regarding the influence that affirmative action has on the utilization of DBEs and the effect that affirmative action has on minority firms. In accordance to a research study undertaken by Blanchflower and Wainwright (2005), results show that in numerous instances, local affirmative action programs in procurement were stopped, owing to the alteration in the utilization of such programs in numerous cities and counties. In addition, Blanchflower and Wainwright (2005) also point out other instances where there was the termination of affirmative action by states in the highway procurement programs being undertaken. On the other hand, research study undertaken by Myers and Chan (1996) takes into account the procurement and contracting in the state of New Jersey. In particular, this takes into consideration prior to and subsequent to the execution of set-aside contracts placed for companies owned by females and minority groups. In overall, the researches undertaken have shown in their results that the termination of affirmative action programs has an enormous adversative effect on procurements from minority companies, and on the other hand, executing affirmative action considerably develops procurements from businesses owned by minority groups.

In public procurement and contracting where businesses incessantly battle for federal, national, and local contracts, valued at billions of dollars for projects, such as highway construction, massive inequalities and discrepancies are present between companies owned by white males and business enterprises that are owned by women and minority groups. Owing to the ascertainment that a great extent of urban unrest and unease was associated to obstacles to ownership of business amongst minority groups, the United States Congress ratified and passed Public Law in the year 1978, calling for all federal agencies to set percentage goals for procurement contract grants to small minority-owned businesses (Lovaton Davila and Myers, 2012). Research undertaken by Lovaton Davila and Myers (2012) offer a projection of the effects of a race-neutral program that is referred to as Emerging Small Business Enterprise (ESBE). This particular program is set in the state of New Jersey and was established in the year 2003 with the purpose of enabling the procurement and contracting of women and minority owned contractors. The results of the study indicate that despite the fact that companies, which are owned and operated by women and monitory groups abstractly benefit from monies set aside from Emerging Small Business Enterprise (ESBE), they do not profit as much as non-Disadvantaged Business Enterprises (DBEs). Therefore, the implication of this is that it brings about a reduced fraction of the total contract funds that are granted to Disadvantaged Business Enterprises (Lovaton Davila and Myers, 2012).

There is no extensive research and literature on the impacts of affirmative action on the success of business, the formation of companies and their survival rates. For instance, according to research undertaken by Bates and Williams (1996), data from the individualities of the owners of businesses is scrutinized. The results from the study indicate that minority business operators and owners who are largely reliant on government contracts are more probable to be unsuccessful. This implies that it dents the rate of survival of these businesses. In the same manner, the research undertaken by Blanchflower and Wainwright (1995) make the most of data obtained from population surveys to assess and make a determination as to whether there were lower rates of self-employment amongst women and minority groups subsequent to the weakening of the federal affirmative action programs. This is after the Supreme Court made the ruling that it is mandatory for programs are that race-conscious to meet stringent examination requirements instituting a convincing need for the program that is barely custom-made. Outcomes attained from the study by Blanchflower and Wainwright (1995) indicate that the rate of self-employment amongst women and minority groups were not considerably different subsequent to the Supreme Court ruling. This is regardless of the fact.....

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