Small Business Owner Writes to the Civil Rights Commission
Fay Communications, Inc. SUPPORTS Race Neutral Alternatives
On September 1, 2005 Fay Communications, Inc. sent the following letter to all the members
of the U.S. Civil Rights Commission indicating his firm's strong support for use of race
neutral federal contracting policies. In this letter, Mr. Fay points out the
severe and unremitting collateral damage that so-called "race
sensitive" policies inflict upon tiny and equally disadvantaged white owned
FAY COMMUNICATIONS, INC.
802 Argyle Road
Silver Spring, MD 20901
1 September 2005
U.S. Commission on Civil Rights
As a very small government contractor, I wish to thank you for your long overdue report "Federal Procurement After Adarand".
My tiny firm has repeatedly been turned away from federal contracting opportunities because of race-conscious policies such as SBA's 8(a) set-aside program.
I was forced to sue the SBA in 1987 after being denied the opportunity to bid on a lucrative contract which had been set aside for a "disadvantaged" firm. At the time my presumably "privileged" firm had four employees and $640,000 in annual revenue. According to discovery documents, the "disadvantaged" firm was owned by an Asian family and had over 100 employees and over $10 million in annual revenue at the time -- all of which, also according to discovery documents, was from set asides. None of my contracts were set asides.
Of course, I lost the law suit and my firm's annual revenue plunged to less than $100,000 within the year. I was forced to close my offices and lay off my staff. [Complete legal documentation of this entire saga is available.]
During the next 12 months I received perhaps fifteen telephone calls from federal agencies who knew of my firm's work and wanted to know if we could submit a price quotation. Every single one of those callers lost interest when they learned that FayComm was not a minority-owned firm.
Fast forward to 1997. The U.S. DOT telephoned me in October of that year and was very excited about an interactive CD-ROM I had made for the trucking industry. They wanted to know if I was available to do similar work for them. Their need was quite urgent, the caller explained, because -- in her words -- their current contractor had "really hosed us".
At this point I want to re-emphasize that DOT was very impressed with my work, and was convinced beyond any doubt of my technical qualifications as well as my extensive experience in transportation-related issues.
Then the woman from DOT asked the fateful question: Was I a minority-owned firm? The contract was a set aside, and therefore I was suddenly not qualified to do the work because of my skin color.
So I partnered with a black man who was certified as an 8(a) firm. Together, we went back to DOT and the contract was signed without competition. The "disadvantaged", black-owned firm had never produced an interactive CD-ROM and my technical qualifications were key to obtaining the contract.
Over the course of the next two miserable years, my tiny firm earned about $73,000 in subcontracting fees on the DOT projects while the "disadvantaged" firm earned $417,000 and subsequently went on to be awarded several hundred thousand dollars more in sole source / very limited competition contracts based upon the same work -- without my firm, of course. [I have copies of the three DOT contracts involved in this case.]
In particular I would direct Commissioner Michael Yaki's attention to the above facts and circumstances, since he dissented from the Commission's conclusions in "Beyond Adarand".
To all members of the Commission I would emphatically state that so-called race-conscious procurement programs directly result in massive collateral damage to innocent, hard working and, in every relevant aspect, equally disadvantaged, tiny white-owned businesses just like my own.
Federal procurement officers, of course, have a strong incentive to "gift" smaller contracts to members of the 8(a), SDB, and MBE clubs because these programs allow them to bypass the lengthy and tedious competitive bidding process, thus getting the contract underway much more quickly than if fair and race-neutral procurement policies were followed.
There was no mechanism in 1987, 1997 or even today by which I and others similarly situated could seek redress for the years of lost revenue -- deliberate economic privation based solely upon our skin color. And, if you care to look you won't have to scratch the surface too deeply to find literally thousands if not tens of thousands of stories just like mine, complete with sterling silver documentation.
Furthermore, as you are undoubtedly aware, virtually every private corporation with whom I might do business has also adopted the same "racialist" procurement policies, often times simply duplicating the language of the SBA's 8(a) program in their company policies. They generally use the euphemism "supplier diversity program". (I have correspondence from white-owned vendors who are no longer able to do business with Lockheed, Kodak, Boeing, or any of the big three automakers -- just to name a few -- because of these "racialist" policies.)
Here is my wager to the "racialists": If I were to be given nine years worth of the same level of preferences and privileges as an 8(a) firm [i.e., a non-white-owned firm] -- nine years being, I believe, the maximum length of participation in the program -- I would be able to retire comfortably at the end of those nine years while paying off all of my considerable debts.
Instead, I and many others face continued exclusion not only from the federal marketplace but from private corporations who have been forced by the requirements of their own federal, state or local contracts to emulate the government's racially exclusionary procurement policies.