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Alameda County sued by anti-affirmative action group over public contracts policy

Mercury News logo Mercury News 7/31/2022 Joseph Geha, Bay Area News Group
A construction crew works on a 290-unit transit-oriented mixed use affordable housing community with 7,200 sq. ft. of non-residential leasing space, seen to the right, in Fremont, Calif., on Wednesday, April 22, 2020. © Anda Chu/Bay Area News Group/TNS A construction crew works on a 290-unit transit-oriented mixed use affordable housing community with 7,200 sq. ft. of non-residential leasing space, seen to the right, in Fremont, Calif., on Wednesday, April 22, 2020.

Alameda County’s efforts to ensure minority-owned and women-owned businesses get a share of public construction contracts violate the U.S. and California’s constitution, according to a lawsuit filed in court against the county this week.

Attorneys for a San Diego group called Californians for Equal Rights Foundation say Alameda County’s Public Works Agency and its General Services Agency both oversee similar programs that “force general contractors to discriminate against subcontractors” if they are not minority-owned.

“The government should not be picking winners and losers on the basis of race or color,” said Chunhua Liao in a statement. Liao, an Alameda County resident and activist, is a plaintiff in the case.

The county programs — which push contractors working on many Alameda County projects to have at least 15% of the work done by minority-owned businesses and at least 5% done by women-owned businesses — amount to “government-sanctioned racial discrimination,” according to the July 25 lawsuit.

Wen Fa, an attorney for the Pacific Legal Foundation who filed the complaint, said the programs violate the equal protection clause of the 14th Amendment to the U.S. Constitution and California’s constitutional ban on racial preferences.

Though the county refers to the programs as “participation goals,” Fa said in an interview they act more like set-asides for minorities, and bring “racial quotas” into public contracting.

“If a prime contractor is not able to meet these goals, then that prime contractor will be at risk to have its bid thrown out,” Fa said.

The county allows contractors to obtain a contract if they don’t meet the thresholds, though only if they can prove they made “good faith efforts” to find minority-owned contractors in the process, which Fa said can open the door for fraud.

He also said not meeting the thresholds is a risky bet general contractors usually don’t want to take.

“That will compel the prime contractor to choose a subcontractor not because of the subcontractor’s qualifications to do the work, but simply because the subcontractor is a minority-owned business and their participation will help the prime contractor meet the goals,” Fa said.

He said that keeps subcontractors from being able to “compete fairly in the public contracting arena.”

Fa said the aim of the lawsuit is to push Alameda County to scrap the participation goal programs altogether and build a “transparent, fair and open contracting process.”

Bisa Grant, the CEO of Anchor, an Oakland construction management and engineering firm that does business with Alameda County, said she thinks the participation goals should be kept in place.

“Thank goodness they exist,” she said in an interview Thursday.

Grant, a Black woman, took over the business after working there for more than a decade in an executive role. She said the county programs help level a playing field that’s long been tilted.

“Otherwise we’d be like a youth football team that’s starting up from scratch compared to a private college that’s been historically well-funded and they have a great network and all the resources. We would not have a chance, a leg to stand on,” she said.

“A lot of the time, organizations like this are saying, ‘It’s not fair because we have to turn people away,’ ” Grant said of longstanding companies who have established networks of subcontractors they work with.

“You turn us away anyway — we’re always turned away. We’ve historically been turned away, there’s just not any mandate to avoid that. So for me, thank goodness” for the county programs, she said.

“That gives a lot more light to shine on us, and gives us an opportunity to build a business, a viable business where we can employ people. People who can support families. Because I have a leg to stand on when it comes to competing against people who’ve been in this industry a long time,” she said.

The directors of the county’s General Services Agency and Public Works Agency, and Alameda County attorney’s office did not respond to requests for comment regarding the lawsuit. Alameda County Board of Supervisors President Keith Carson declined to comment because of the ongoing litigation.

“I hope that these policies are legally compliant. If they’re not, we’ll have to make adjustments,” Supervisor David Haubert said in an interview.

He said Alameda is a “majority-minority county” and the percentages the county pushes for in public contracting seem like “reasonable goals” to him.

“I stand by the intent, which is to help grow jobs for people that reflect the people in our community,” he said.

Fa said that in addition to Liao, an activist, the other plaintiff in the case is Deborah Ferrari, a trucking industry consultant. Both Liao and Ferrari are Alameda County residents.

Californians for Equal Rights is a group that was started in 2020 to oppose California Proposition 16, which would have rolled back the ban on affirmative action in California. Proposition 209, which passed in 1996, prohibits affirmative action in public employment, public education and public contracting.

“Proposition 16 was struck down in 2020, that’s a big victory for us, but many public agencies are still trying to skirt Proposition 209,” Wenyuan Yu, the group’s executive director, said in an interview.

She said there isn’t “real empirical evidence” that women-owned businesses and minority-owned businesses have been harmed or outcompeted in public contracting since Proposition 209 went into effect.

“You can not fight discrimination with more discrimination, and you cannot fight fire with fire,” she said.

Grant, the engineering firm owner, said she appreciates Alameda County’s efforts to support minority-owned and women-owned businesses, even if the policies are not perfect.

“I think any system is going to have its challenges, but instead of suing over it and getting rid of it, my experience says there are some things that should be mandated,” she said.

“I think the system should be strengthened, not weakened or dispelled,” she said.

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