Sue Lani Madsen: Saying one thing, doing another

The Washington Department of Enterprise Services has a new draft Supplier Diversity policy out for public comment until October 31. The stated purpose is to use “race and gender neutral strategies to increase the amount of contracts that are awarded to small, diverse, and veteran-owned businesses.” It then goes on to rationalize surreptitious ways of using race and gender to award contracts, in violation of the will of the voters.

The new DES policy is an attempt to implement recommendations from the Office of Minority & Women’s Business Enterprises. OMWBE was created in 1983 to manage a traditional affirmative action set aside program to encourage new business enterprises owned by the right kind of entrepreneurs. When initiative 200 passed in 1998 prohibiting preferential treatment based on race and gender, there was an expectation the office would be closed. Washington voters reaffirmed our commitment to neutrality in 2018.

The current agenda is driven from the governor’s office and by a solidly Democrat controlled legislature. During the last recession, they neglected to take my advice and cut OMWBE under the priorities of government budgeting process. From my first newspaper column, published in the Seattle Post-Intelligencer when it still had a print edition in March 2010:

“OMWBE has continued for the past ten years to gather statistics, duly reporting each year that a shrinking share of state contracts go to minority and women owned businesses. This is no surprise, as there is ABSOLUTELY NO incentive for a minority or women owned business to bother with the certification process, time better spent building your business. We now have strong minority and women owned businesses in the marketplace. OMWBE no longer serves a useful purpose, duplicating outreach programs already aimed at supporting small business.”

A decade later and nothing has changed except the OMWBE budget has increased every year since. Part of that budget paid for publishing the Washington State Disparity Study in 2019, now used to justify their continued existence. Ironically for a state agency directed at strengthening the purchase of goods and services from Washington businesses, the study was contracted out to a California firm.

No disrespect to the experts from out of state, but it’s a perfect example of one barrier for new businesses of any size or ownership seeking to do business with the state. Bureaucracies are loath to take chances, preferring long track records over new vendors. The disparity study prologue touts the experience of the California study team. Fair enough, awarding a contract on merit is a good thing. And it’s a bonus for OMWBE to have a consulting team with all the right diversity credentials.

Or maybe it’s not a bonus or merit, but an example of preferential treatment based on race and sex. Hard to tell. For qualified minority and women owned businesses and individuals, the most exasperating unintended consequence of formal or informal affirmative action is the spoken or unspoken questioning of their competence.

Buried in the report is the statement from the California consultant: “Certification as a M/WBE by the State was reported to confer few benefits, especially in relation to the time required to go through the process.” The report goes on to collect quotes from state agency staff and vendors:

“OMWB is there only to make a list … I haven’t really seen the benefits”

“I’ve just got to build my business. I’m not relying on these programs.”

“We pay all of our money to provide for this certification that does us absolutely no good.”

“It’s not been helpful for me in any way, shape or form, and now I’m beginning to wonder if it is hurtful.”

Following up on that last thought, the report summarizes “Some M/WBEs felt that certification was actually a detriment because it can be viewed by other firms and agencies as a stigma,” a conclusion supported by additional interviews:

“[Certification] itself is a stigma.”

“I found out real quick not even to mention the program or that I’m certified. [Being a certified firm in and of itself] has been [a stigma] for us”

Not a resounding affirmation for the existence of OMWBE. Still have to dig into the report to see if there are positive results after over 38 years in operation.

DES and OMWBE held a workshop for public comment on August 18 via Zoom, which made it convenient for participation across the state. Several Zoom polls were used to gauge participants reactions. Asking poll questions without allowing for a neither or none vote can make it appear a proposed course of action has public support. It’s one of those subtle ways public comment collection can be used to mislead with impressive sounding statistics.

Undoubtedly there will be glowing reports on the results of the workshop. Read them with a grain of salt and read the original documents for yourself on-line. Anyone can play, regardless of race, sex, age, veteran status and geographic location. No need to show up in Olympia to make your voice heard.

Contact Sue Lani Madsen at rulingpen@gmail.com.