Minority firms hold tight to fed business

While minority firms generally have more difficulty landing federal business information technology contracts are finding their way to small and disadvantaged companies according to minority business owners.

At a hearing of the House Judiciary Committee's Subcommittee on the Constitution executives of minority- and woman-owned businesses said procurement reform rules adopted last year have made it more difficult to win federal contracts because government streamlining has given procurement officials more freedom to choose vendors to buy goods and services.

But small and minority-owned IT businesses are hanging on to their share of government business according to Weldon Latham a witness at last week's hearing and general counsel for the National Coalition of Minority Businesses. That is especially true in the Washington D.C. area he said where a larger than average percentage of minority-owned IT companies are located and where a lot of federal IT dollars are spent.

IT dollars tend to be flowing to minority-owned IT services firms more than hardware firms because hardware requires larger amounts of capital which minority-owned hardware businesses historically have had trouble acquiring Latham told FCW after the hearing. Discrimination in the private sector continues to prevent minority- and woman-owned businesses from getting the resources they need to do business with the government. "Without an access to a bond there are no contracts " Latham said.

William Davis chief executive officer of the minority firm Pulsar Data Systems Inc. Lanham Md. said minority IT firms are losing federal business.

Davis said with government streamlining initiatives and procurement reform he has seen heightened competition from large companies that can and must sell products on lower margins on the General Services Administration schedules to help support costly bids on large lucrative contracts. "As I look at it today the opportunities [for minority businesses] are significantly less...than two or three years ago " he said.

The idea of building more affirmative-action mechanisms into the government procurement process to ensure minorities' share of business does not seem to make sense to many in Congress.

"I don't believe we will overcome discrimination by practicing discrimination " said subcommittee chairman Rep. Charles Canady (R-Fla.).

An economist testified that directing business to minority firms was a secondary concern to the value the federal government receives. "The purpose of federal contracting is to buy things and it should be at the lowest possible cost to the government " testified Lawrence M. Stratton research fellow at the Institute for Political Economy Washington D.C.