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A new, but still risky, city contract program

A decade ago, in the face of legal action, Charlotte abandoned a program aimed at helping women- and minority-owned firms get city business. Some Charlotte City Council members, however, have longed to start a new race- and gender-based hiring program, so much so that when a consultant recommended in 2011 that the city avoid doing so, the council instead hired a new consultant that provided an answer the council liked more.

The inevitable result came Monday, when the council approved the Charlotte Business Inclusion program, a new effort that mandates hiring goals for city contracts. Officials are confident the CBI, which takes effect July 1, would hold up to a new court challenge.

We hope so. The city is right to want more of its business to go to minority- and women-owned firms, which often face disadvantages when bidding against larger and more established competition. But since 1989, when the U.S. Supreme Court ruled against a Richmond, Va., race-based program, dozens of cities and states have abandoned similar programs or had them struck down in costly lawsuits.

What is the difference in Charlotte’s new program? A narrower scope, say city attorney Bob Hagemann and senior assistant attorney Cindy White. While Charlotte’s previous race- and gender-based program targeted city contracts in a blanket fashion, the new program targets disciplines – such as architectural, engineering or surveying contracts – where statistics have shown a previous disparity in hiring. That precision could help the CBI meet the Supreme Court threshold that such programs remedy past discrimination in hiring, Hagemann and White told the editorial board Wednesday.

But there’s a difference between disparity and discrimination, and proving the latter is where the hurdle gets higher for cities. If Charlotte’s program is challenged, the city would not only need to show that women- and minority-owned firms weren’t hired as frequently, but that the numbers were the product of discriminatory behavior. In 2011, Tallahassee-based consultant MGT told Charlotte that while minorities got far less city business than other groups, there wasn’t enough evidence of discrimination for Charlotte to start a new hiring program.

“Municipalities have a hard time proving there was enough discrimination,” said Todd Young, policy director at the Southeastern Legal Foundation, which has challenged several minority- and gender-based hiring programs, including the effort Charlotte disbanded in 2003. Young, who told the editorial board Wednesday that he’ll be taking a look at Charlotte’s new program, said proving discrimination in court often turns into a battle of experts. “A very costly battle,” he said.

While Hagemann and White acknowledged that gray area of discrimination, they’re confident in the CBI’s legal soundness, and they noted that the program also includes race-neutral measures such as lowering bid thresholds to attract smaller contractors.

Other cities and states have opted to use such race-neutral approaches exclusively – and successfully. In Atlanta, women- and minority-owned firms gained tens of millions of dollars in contracts from a policy that required firms to partner with another from a different ethnic or gender group on projects over $10 million.

Charlotte officials say the race-neutral approach wasn’t working here, but instead of exhausting innovative approaches, the council decided on the riskier route it wanted all along. We hope Hagemann and White are right, and that the CBI is a successful, legal approach to city contracts – not a costly, failed example of City Council stubbornness.

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