Contracting in a Post I-200 Environment

In 1998, the voters of Washington state approved Initiative 200 that prohibits, among other things, public agencies from granting preference or discriminating in the award of public contracts based on race or gender.

Prior to the passage in I-200 many public agencies applied “set-asides” to their contracts, meaning that a certain percentage of the total dollar amount of a contract was required to be performed by (either by the contractor or subcontractor) businesses owned and controlled by minorities (MBE – Minority Business Enterprises) or women (WBE – Women’s Business Enterprises).

In a post I-200 environment, it is difficult for public agencies to demonstrate that MBEs and WBEs are being used on public contracts in percentages anywhere near what they were prior to the passage of I-200. Agencies often do significant outreach to MBEs and WBEs, but the nature of public bidding laws (for construction, consulting, and purchase of goods and services) makes it difficult to actually improve the percentage utilization of MBEs and WBEs.

Ultimately, it seems to me, public agencies may be more helpful in providing MBEs and WBEs with appropriate tools to help them complete successfully in the private sector where there are not the same kinds of bidding constraints and where contracting is more often based on relationships and effective business partnerships.

Public agencies can provide resources to help mentor MBEs and WBEs, facilitate the development of relationships with other contractors and consultants and larger private businesses, and help MBEs and WBEs build strategic partnerships. It’s a difficult problem of how to ensure that our region creates a vibrate economy that embraces the wide diversity of business ownership that is reflective of the diversity of our population.