A Citizen's Guide to Initiative 200: The Washington State Civil Rights Initiative
"An act relating to prohibiting government entities from discriminating or granting preferential treatment based on race, sex, color, ethnicity, or national origin..."
"The state shall not discriminate against, or grant preferential treatment to, any individual or groups on the basis of race, sex, color, ethnicity or national origin in the operation of public employment, public education or public contracting."
On November 3, the people of Washington will be asked to decide whether this statement should be made part of state law. At issue is whether state and local governments should continue the extensive race- and gender-based programs that have been put in place over the last three decades.
Supporters and opponents of Initiative 200 share the same goal; fair and equal treatment for every person in our diverse society. Opinions differ, however, over whether existing race and gender policies are helping to heal the deeply-felt rifts in our communities, or only serving to perpetuate them.
The principal Washington State programs, "Plus 3" for hiring and OMWBE programs for state contracting, which are discussed in this report, have been in place for a generation, yet, as their advocates acknowledge, they have not yet achieved their goals.
Should they be extended and expanded, or should the equality which supporters and opponents alike seek be pursued by other means? That question is what the voters are called upon to answer.
The purpose of this Citizen’s Guide is to provide fair, accurate and useful facts to help inform the public debate about Initiative 200. The Guide does not take a position for or against the Initiative.
"An act relating to prohibiting government entities from discriminating or granting preferential treatment based on race, sex, color, ethnicity, or national origin..."
On November 3, the people of Washington state will be asked to decide whether state and local governments should continue unchanged the race- and gender-based programs that have been put in place over the last three decades.
The use of race and gender distinctions in government programs is a sensitive and complex issue. Our country has a long history of working to improve race relations and to expand equal opportunities for women. While the nation has made much progress in overcoming racism and sex discrimination, there are concerns that serious and sustained efforts are still needed to ensure that wrongful discrimination is not tolerated.
Supporters and opponents of Initiative 200 share the same goal: fair and equal treatment for every person in our diverse society, regardless of race, sex, color, ethnicity or national origin. Thirty years ago, Washington state embarked on an official policy of granting, under defined programs, preferential treatment to members of certain groups that had suffered past discrimination. Today, while tensions over perceived racial and gender inequality continue, and in fact have taken new forms, these long-established policies are being re-assessed. More than a generation of government programs targeted to assist minorities and women has failed to put to rest disturbing questions of injustice and discrimination.
The difficult, and sometimes contentious, question is how to achieve this goal. Opinions differ over whether the state’s traditional race- and gender-based policies are helping to heal the deeply-felt rifts in our communities, or only serving to perpetuate them. This November, Washington voters will be called upon to decide whether the old policies of separate treatment for certain race and gender groups should be replaced by a public standard of strict non-discrimination.
In this Guide, we will describe how Initiative 200 was placed on the ballot, and what historical and legal sources inspired its wording. Next, we will analyze the text of Initiative 200 to examine just what would and would not be covered if it becomes law. We will then look at two primary areas in which the state’s current race- and gender-based programs are carried out: the Supplemental Certification program, called "Plus 3," used in state hiring, and the Minority and Women’s Business Enterprises program, used in state contracting. Finally, we will look at some of the options under consideration to expand the present scope of the state’s race- and gender-based programs.
This paper will not address a third major area that would be affected by Initiative 200: the race- and gender-based admissions policies used at Washington’s colleges and universities. In September, the Center for Equal Opportunity in Washington, D.C., a non-profit research organization, will publish an extensive report on the use of these policies in Washington higher education. Nor does this Guide examine how Initiative 200 would affect counties, cities, school, port and fire districts and the many smaller units of government across the state. If passed, the measure would apply in the same way to these local entities as it would to the state government.
The purpose of this Citizen’s Guide is to provide fair, accurate and useful facts to help inform the public debate about Initiative 200. Our goal is to help provide the kind of information the people of Washington will need as they cast their votes on this important and far-reaching public issue. The outcome will decide whether voters believe Initiative 200, or the status quo, will best move Washington toward the ideal advocates on both sides of the issue seek: a society in which all people are free to develop their talents and reach for their goals with respect, liberty and equal opportunity.
II. Initiative 200 Placed on the Ballot
A. Ballot Title and Summary Challenged
The petition drive to place Initiative 200 on the ballot began in March 1997, giving organizers a little under 10 months to gather the required number of signatures. Upon initial filing, the Attorney General assigned the Initiative its formal ballot title and summary:
"Shall government be prohibited from discriminating or granting preferential treatment based on race, sex, color, ethnicity, or national origin in public employment, education and contracting?"
"This measure would prohibit state and local government entities from discriminating against or granting preferential treatment to any individual or group based on race, sex, color, ethnicity, or national origin in public employment, public education, and public contracting. It would not affect otherwise lawful classifications necessary for sexual privacy, medical treatment, undercover law enforcement, theatrical casting, and separate-sex athletic teams. The measure would not prohibit actions necessary to maintain eligibility for federal funds."
The signature-gathering effort was delayed at the start when the Washington chapter of the American Civil Liberties Union filed suit in Superior Court. The ACLU maintained that the ballot title and summary written by the state Attorney General were unfair and misleading to voters.
The ACLU argued before the court that the ballot title and summary should declare that Initiative 200 would prohibit the state from granting "affirmative action" (instead of "preferential treatment") based on race, sex, etc., because they felt that Initiative 200 could effectively end all state affirmative action programs.
Judge Daniel Berschauer decided the case against the ACLU. In an April 28, 1997 opinion he ruled that statements in the ballot title and summary that described Initiative 200 as ending preferential treatment "are an impartial and accurate summary of the language of the initiative." His opinion further stated that the Attorney General had taken the "appropriate course" by describing Initiative 200 as a measure to end preferential treatment.
In support of his decision, Judge Berschauer cited a California court’s response to a similar challenge filed two years earlier against Proposition 209, the California Civil Rights Initiative. In that case, the court rejected the use of the phrase "affirmative action" as "an amorphous value-laden term" which "may cause...confusion and inaccuracy."
Once the challenge to the ballot title and summary was resolved, Initiative 200 supporters began their petition drive in earnest. By the December 31, 1997 deadline, supporters filed 280,511 signatures gathered statewide, over 100,000 more than needed to qualify. Secretary of State Ralph Munro used a statistical sampling method to remove invalid and duplicate signatures, and on January 21, 1998, certified that the measure had gained well over the 179,248 valid signatures needed to qualify for the November ballot.
B. Initiative 200 Alternative Considered
At this point the state legislature had the option of enacting the measure into law, forwarding it directly to the voters, or passing its own civil rights measure to appear on the ballot along with the original. Opponents of Initiative 200 introduced a bill, SB 6689, to implement the third option. If approved by the legislature, voters would have been asked on election day to choose between Initiative 200 and the legislature’s alternative.
SB 6689 did not directly address government race- and gender-based programs as Initiative 200 does. Instead, the measure confirmed that "the state is prohibited from using quotas that require hiring or selecting persons in public employment, education, and contracting based on race, sex, color, ethnicity or national origin." Since several court decisions have made clear that quotas are illegal, many legislators felt the alternative bill would have made no change in existing law. Initiative 200 opponents sought to create a choice which would enable voters to express support for a strong non-discrimination principle, while at the same time reaffirming current law. When the question arose of whether placing the alternative on the ballot would prove distracting to voters, NO! 200 Campaign treasurer Edsonya Charles responded, "confusion does not hurt us."
SB 6689 was not approved by the legislature and so will not appear on the November ballot, and since Initiative 200 it was not passed or altered by the legislature, it will appear before the voters as originally drafted. Anti-Initiative 200 leaders briefly considered their own signature campaign to put SB 6689 on the ballot anyway. But they ultimately decided against that strategy in favor of working to defeat the original measure outright.
III. Sources of the Text of Initiative 200
A. America’s Civil Rights Tradition
The ideas embodied in Initiative 200 are based on a fundamental tradition of precedents in American law and history. The first and most obvious source is the cardinal principle enshrined in our nation’s birth certificate, the Declaration of Independence, that "all men are created equal," that they "are endowed by their Creator with certain unalienable rights," and that "to secure these rights, governments are instituted among men...."
From the beginning, American political philosophy has recognized that basic rights are inherent in individuals, do not come from and cannot be taken away by the government, and exist equally among all people. Americans depend on the government as the protector, not the creator, of their natural rights and no citizen is born with more rights than another. Obviously, American social conditions at the Founding fell well short of this standard, and the enduring challenge facing our nation throughout its history has been ever more perfectly to put this ideal into practice.
A milestone in the nation’s effort to treat all citizens equally in fact as well as in theory came with the passage of the Fourteenth Amendment after the Civil War. This far-reaching enactment sought to ensure that no person, especially one recently bound in slavery, would be denied "the equal protection of the laws." While the Fourteenth Amendment is not a direct source for the wording of Initiative 200, the two measures are grounded in the same commitment of reaffirming the equal application of the law to all citizens.
But even constitutional changes could not defuse centuries of racial antagonism overnight. Passage of the Fourteenth Amendment did not prevent the rapid growth after Reconstruction of state and local Jim Crow laws designed to hamper and restrict black Americans and other minority groups. These color-based laws asserted that public facilities separated by race could still be equal, a view sanctioned in 1896 by the Supreme Court’s Plessy v. Ferguson decision.
Only in the years after World War II did our society finally begin its long march away from formalized racial discrimination toward the fulfillment of the ideals of 1776. A series of Supreme Court cases culminated in Brown v. Board of Education, which overruled Plessy, and ended legal support for school segregation. Throughout the 1950s and into the 1960s, the effort to incorporate equal protection into our laws led to a series of court cases, executive actions and civil rights acts.
B. The 1964 Civil Rights Act
As part of the continuing effort against racial discrimination, Congress enacted the Civil Rights Act of 1964 with strong bipartisan support. The Act for the first time explicitly barred discrimination on the grounds of race, color, religion, and national origin. The phrasing of the 1964 Civil Rights Act is a direct legal source for the wording of Initiative 200.
When critics charged the new law would inevitably lead to mandatory race quotas, one of the bill’s most ardent defenders, Senator Hubert Humphrey (D-MN), stated in debate that if the Act led to quotas he would "start eating the pages one after the other." He assured the Senate that, "Nothing contained in [Title VII] shall be interpreted to require any employer to grant preferential treatment to any individual or to any group because of race...on account of an imbalance which may exist with respect to the total number or percentage of persons employed...in comparison with the available work force."
With the passage of the 1964 Civil Rights Act, the thrust of efforts to eliminate discrimination shifted as some proponents argued that the government should take a more activist role in redressing the harm wrought by past discrimination. The idea behind the new approach was expressed by President Johnson in a speech he gave at Howard University in 1965: "You do not take a person who for years has been hobbled by chains and liberate him, bring him up to the starting line of a race and then say, ‘You are free to compete with all the others,’ and still justly believe that you have been completely fair."
C. Johnson’s Affirmative Action Executive Order
Johnson’s Executive Order 11246, issued the same year, required federal contractors for the first time to "take affirmative action to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, creed, color, or national origin." Initially, these programs required increased outreach and recruiting to historically excluded groups. Gradually, through, government agencies developed "targets" or "goals" to measure participation by members of select groups. In addition, some federal programs provided explicit "set asides" in government contracting for preferred groups. Johnson’s order initiated the era of "affirmative action" on which Washington state’s own race- and gender-based policies are based.
With the advent of these government color- and sex-conscience programs, questions arose about the appropriateness of an official policy which explicitly favored citizens of one race or gender over another. The structure of these programs appeared to run counter to the fundamental principle of the equality of all citizens before the law.
To address this concern in Washington State, Rep. Scott Smith (R-Graham) introduced legislation in 1995 to bar government entities from practicing discrimination or preferences based on race or gender. His bill, HB 1999, stated that, "neither the state of Washington nor any of its political subdivisions or agents shall use race, sex, color, ethnicity, or national origin as a criterion for either discriminating against, or granting preferential treatment to, any individual or group in the operation of public employment, public education, or public contracting." HB 1999 did not pass the legislature and did not become law. Its language, though, serves as a source for the present text of Initiative 200. Today, Rep. Smith is a co-chairman of the Yes on Initiative 200 Campaign.
A further source for the language of Initiative 200 is recent experience in California. In November, 1996, by a vote of 54% to 46%, the people of that state approved Proposition 209. That measure, now part of California law, states, "The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting." This language is identical to that used in Initiative 200, and is itself derived from the Civil Rights Act of 1964.
IV. What Initiative 200 Says
Initiative 200 is written in simple, concise language. The full text appears on the opposite page. The first provision would place in state law the general principle discussed above:
"The state shall not discriminate against, or grant preferential treatment to, any individual or group on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment, public education, or public contracting."
The Initiative then lays out a list of exceptions to this general principle by specifically listing what the law would not cover. Initiative 200 would have no effect on:
- Any state law or program that is not based on gender or race discrimination
- Any legal requirement for medical or psychological privacy based on gender
- Any police undercover operation
- Casting for any film, video, audio or theater production
- Any sports program that maintains separate teams based on sex
- Any existing court order or consent decree
- Any action needed to be eligible for any federal program, if ineligibility would result in a loss of federal funds to the state.
Except for these exceptions, the broad non-discrimination principle in Initiative 200 would apply to every "political subdivision" or "governmental instrumentality" in Washington state. The measure would apply only to government entities and programs.
Initiative 200 states explicitly that its provisions would apply equally to all citizens regardless of sex or color, and that penalties for violations would be the same as those under existing state anti-discrimination law.
Finally, Initiative 200 states that it is self-executing. If approved by the voters, it will automatically become law as a new section under Chapter 49.60 of the Revised Code of Washington. All existing laws, regulations or programs that are in conflict with Initiative 200 would be superseded. If any part of the new law is later found by the courts to be in violation of the Washington or United States Constitutions, the rest of the law will remain in force.
V. Legal Authority for Race- and Gender-based Policies in Washington State
Note on Terminology
As pointed out by Judge Berschauer and the California court, the exact meaning of the term "affirmative action" is difficult to determine. It can refer to general recruiting and outreach efforts to traditionally underrepresented groups, as well as to making specific policy decisions based on the race or sex identities of citizens. For that reason this Guide uses the more precise term "race- and gender-based policies" to indicated specific state programs that are involved in government hiring and contracting decisions based on the color or sex of job applicants or business owners. The term "affirmative action" is used when quoted in the law, and the title "Affirmative Action Plan" is used when discussing the official state program of that name.
A. Affirmative Action Begun in Washington State
The new race-specific policy created by President Johnson was mirrored in Washington state by an executive order issued by Governor Dan Evans creating the state’s own affirmative action plan. Washington’s affirmative action policy has been confirmed, and sometimes expanded, by every governor of either party up to the present day.
In addition to executive orders, the legal authority for the state’s race- and gender-based system is found in the Revised Code of Washington under Title 41, which requires each state agency to adopt rules, using "the best standards of personnel administration," to implement "affirmative action in appointment, promotion, transfer, recruitment, training, and career development; development and implementation of affirmative action goals and timetables, and monitoring of progress against those goals and timetables."
The programs that have grown out of this authority over the years are detailed, enforceable and mandatory for every state agency. They involve 374 work classifications spread among 42 agencies. Apart from certain exceptions, affirmative action rules involve every employee in the state’s workforce and every job applicant seeking work with the state.
B. Affirmative Action Exceptions
The exceptions are specified in the law and include members of the legislature and their staffs, state judges and their staffs, members of boards, commissions and committees appointed by the governor, and a long list of other government entities. Under the law, these employees are exempt from the state’s race- and gender-based policies.
Under Title 41 and other statutes, the state’s race- and gender-based policies are implemented primarily through two programs: Supplemental Certification, known as "Plus 3," and the Office of Minority and Women’s Business Enterprises.
VI. Supplemental Certification: Race- and Gender-based Policies in State Hiring
A. The "Plus 3" Hiring Process
The Supplemental Certification ("Plus 3") program is designed to implement the state’s race- and gender-based policies in state hiring. To fill a vacancy, the agency’s director of personnel is authorized to select the best seven candidates from employment registers or eligibility lists on which names are listed by test scores, with the highest scorer at the top. The top seven candidates are "certified" to be considered for the open position.
"Supplemental Certification" then allows three more candidates who are "protected group members" to be added to the list. If one of these candidates is chosen for the job, the appointment is counted toward fulfilling the agency’s affirmative action goal. If a member of a "protected group" is not selected, the supervisor responsible must explain in writing why this decision was made.
B. Program Definitions
The program recognizes six categories of people as members of "protected groups:" 1) women; 2) racial and ethnic minorities; 3) disabled people; 4) Vietnam-era veterans; 5) disabled veterans; and 6) people over 40 years old.
The first category is self-explanatory. In fact, the state’s pamphlet on workforce diversity defines this classification with one word: "women." The meaning of the sixth grouping, based on age, is similarly self-evident.
"Vietnam-era veteran" is defined as anyone who served honorably anywhere more than 180 days on active duty between August 5, 1964 and May 7, 1975.
The definition for a "person with disabilities" is more vague, but relies on the common sense meaning of "a person with a permanent physical, mental or sensory impairment which substantially limits one or more major life activities."
For the meaning of "disabled veteran," the state relies on the federal definition: "A person entitled to disability compensation under...the Veterans Administration for disability rated at 30 percent or more," or a person discharged from the military for a "disability incurred or aggravated in the line of duty."
The racial and ethnic groupings used are: White, African American, Asian or Pacific Islander, American Indian, Eskimo or Aleut, and Hispanic origin. A person assigned to any one of these categories except "white" is eligible for participation under the race and ethnic category of the Supplemental Certification program.
African American is defined for the program’s purposes as "a person with origins in any of the black racial groups of Africa who is not of Hispanic origin."
Hispanic origin means "a person of Mexican, Puerto Rican, Cuban, Central or South American or other Spanish culture or origin regardless of race." Persons from Brazil, Guyana, Surinam, or Trinidad are not "necessarily" considered Hispanic and are classified by race. The same is true of persons from Portugal. A person from Spain is not considered Hispanic but is counted as white.
American Indian, Eskimo or Aleut refers to "a person with origins in any of the original peoples of North America and who maintains cultural identification through tribal affiliation or community recognition." This is the only state classification that adds the requirement of a formal tribal or community membership to that of race.
Asian or Pacific Islander means "a person with origins in any of the original people of the Far East, Southeast Asia, the Indian Subcontinent, or the Pacific Islands."
C. Measuring Ancestry
The official regulations do not establish a percentage of ancestry needed to show membership in one of these race categories. The lack of precise measurement sometimes leads to confusion about just who is eligible for the program. The Department of Social and Health Services withdrew a job offer from Elizabeth Lake when a supervisor felt she did not visually fit the "American Indian" category she had marked on her application. She later demonstrated that her ancestry included 1/128th Chickasaw Indian, sufficient to qualify for a tribal-affiliation card. The tribal card would have satisfied the program’s definition for the "American Indian, Eskimo or Aleut" category. Ms. Lake is currently suing the state for wrongful dismissal.
To further illustrate how involved government race classifications can become, current census data recognizes 19 official groupings under the heading "Asian or Pacific Islander." The term "Asian" can mean Chinese, Filipino, Japanese, Asian Indian, Korean, Vietnamese, Cambodian, Hmong, Laotian, Thai and "other Asian." Pacific Islanders are defined as either Polynesians (Hawaiians, Samoans, Tongans and "other Polynesian") or Micronesian (Guamanians and "other Micronesians), plus the two further classes of Melanesian and "Pacific Islander, not specified"
While minute cataloging of individuals may seem awkward and arbitrary, the need for precise race identification of Washington citizens is driven by the internal logic of the program. Without exact ancestry identifications, the color-conscience component of Supplemental Certification could not operate.
Passage of Initiative 200 would affect only two of the six categories used by the program; women and racial and ethnic minorities. The state would be barred from discriminating against, or granting preferential treatment to, members of these groups under "Plus 3" or any other program. Initiative 200 would make no change, though, in the way the program uses the remaining four categories for disabled people, Vietnam-era veterans, disabled veterans and people over 40.
D. Race and Gender Breakdown of the State Population
As discussed above, the Supplemental Certification regulations apply differently to different citizens in the state, depending on their race, ethnic or gender identities. Recent census data shows how many Washington residents are eligible for the program.
According to 1995 census estimates, there are 3,758,637 adults in the state below retirement age. Of these, 1,860,524 (49.5%) are women and 1,898,110 (50.5%) are men. The further breakdown of the adult population under 65 along racial, ethnic and gender lines is shown in figure 1.
Washington State Adult Population Under 65 by
American Indian, Eskimo and Aleut
Asian-American and Pacific Islander
These figures show that out of the total adult population under 65, state law recognizes 2,165,419 people (57.6%), as qualified under the race and gender portions of the Supplemental Certification hiring program, the parts affected by Initiative 200. The remaining 1,593,218 people, or 42.4% of working-age adults, are by statutory definition denied access to the program by reason of their race, ethnicity or gender.
E. Race and Gender Breakdown and State Government Workforce
An examination of the state government workforce shows how many employees are covered by "Plus 3" as it is administered by the Department of Personnel. Today, there are approximately 56,866 such employees. This number includes permanent, probationary, trial, service, emergency, exempt, temporary, seasonal, intermittent and Washington Management Service workers. This figure does not include those working in K-12 schools (who are hired by local school districts), state higher education or who serve on state boards or commissions. Initiative 200 would cover them, as it would all government entities, but they do not fall under the parts of the race- and gender-based policies discussed here.
Of these 56,866 employees, 27,631 (48.6%) are women and 29,235 (51.4%) are men. State employment records also give the workforce’s racial and ethnic breakdown as shown in figure 2.
Race and Ethnicity of Covered State Government Workforce, 1998
American Indian, Eskimo and Aleut
Asian and Pacific Islander
F. The Scope of Supplemental Certification
The Supplemental Certification program is used by agencies to help fulfill the requirements of their Affirmative Action Plans. Every state agency is required to have such a plan and to update it every year. The goal of each Plan is to achieve parity for every job group of employees within each agency. "Parity" is reached when "representation of an affected group equals the availability of that affected group." "Underutilization" exists "whenever an affected group’s representation in the job group is lower than the availability computed by the agency."
The administrative complexity and extent of the program is revealed by the "State Agencies Parity Summaries Report" issued by the Governor’s Affirmative Action Policy Committee (GAAPCom) for the 1993-1995 Affirmative Action Plan Cycle.
The overall Plan applies the state’s race- and gender-based policies to the 374 job groups administered by 42 participating state agencies. GAAPCom tracks the progress or retrogression of each agency for all members of "protected groups" in each job category. During its five general meetings in 1996, GAAPCom reviewed 87 agency and higher education Affirmative Action Plans and updates for 1993 - 1995. The results revealed that many agencies were failing to meet the goal of achieving "parity" within monitored job groups.
G. Number of Job Groups "at Parity"
GAAPCom found that the number of job groups reaching "parity" during the reporting period ranged from a low of 37 job groups for "American Indian, Eskimo and Aleut," to a high of 80 job groups for "African Americans." This left job groups identified as "underutilized" by protected group members ranging from 131 for "American Indian, Eskimo and Aleut" to 190. The results from GAAPCom’s report for all race and gender categories under Supplemental Certification are shown in figure 3.
Job Groups at Parity or Underutilized for Race and Gender Categories Under the Supplemental Certification Program, 1993 - 1995
American Indian, Eskimo and Aleut
Asian-American and Pacific Islander
Underutilized Job Groups
As shown, workers in the category for African Americans, with 51% underutilized job groups, came closest to the employment goal laid out by the Plan. The Plan was most lacking in the category for American Indian, Eskimos and Aleuts, which shows a 72% deficit in job groups at parity. Results for other groups indicate a shortfall in job groups at parity of 68% for Asian and Pacific Islanders, 64% for employees of Hispanic origin, and 61% for women. In no category did members of the targeted group reach even half the participation rate called for by the race and gender plan. On average, 63% of the job groups for all categories failed to reach parity by the end of the reporting period.
Despite initial hopes that affirmative action efforts would only be needed as a temporary expedient to allow, in President Johnson’s metaphor, everyone a fair start in the race, that goal has yet to be realized. The state’s figures demonstrate that after a generation in place, official race- and gender-based policies are falling well short of even their own minimum standards of success. GAAPCom itself concedes that "there are state agencies and institutions that still have substantial work to do in achieving satisfactory affected group representation."
GAAPCom’s assessment impels Washington citizens to consider whether continuing indefinitely and unchanged the race- and gender-based portions of the Supplemental Certification hiring program offers a practical path toward a society which treats all members as equal.
VII. The Office of Minority and Women’s Business Enterprises: Race- and Gender-based Policies in State Contracting
A. Structure of the Program
The Office of Minority and Women’s Business Enterprises (OMWBE) was created in 1983 to oversee the state’s race- and gender-based policies in procurement and contracting. It does so in two ways. First, the Office runs a certification program to accurately identify qualified minority- and women-owned firms that are seeking work from the state. Second, the Office operates a reporting system to monitor whether state agencies are participating in the program and making progress toward their affirmative action goals.
The OMWBE’s program applies only to state purchases of goods and services for which government managers have a choice among private suppliers. This activity accounts for about 15% of all state expenditures each year. The remaining 85% of state spending, such as employee benefits and salaries, debt servicing, utilities, payments among agencies, payments to counties, cities and other local jurisdictions, and direct grants to individuals, are not part of the budget used for race- and gender-based contracting purposes.
The centerpiece of OMWBE’s certification program is the "Directory of Certified Minority, Women’s and Disadvantaged Business Enterprises." The Directory is recognized by other state agencies and by county and local governments for purposes of carrying out their race- and gender-based programs when contracting with the private sector.
B. The Application Process
For a nonrefundable $20 fee, a business owner can ask to be listed in the Directory. The application runs 10 pages, requires extensive detailed information, and must be accompanied by a signed affidavit. All information provided on the form becomes a matter of public record.
To apply, a business owner must first meet all of the following qualifications:
- Be a woman or member of a minority group as defined by the state
- Be a United States citizen or lawful resident
- Own at least 51% of the business in question
- Own a business that is established for profit and legally permitted to operate in the state
- Own a business that is a "small business" as defined by the state
- Own a business that performs a commercially useful function.
Applicants must provide "official and documentary evidence" that they fall into one or more of the government’s defined gender, racial or ethnic categories. These groupings are similar to those used by the Supplemental Certification program. On the form applicants are given a choice of "African/Black American," "Hispanic American," "Native American," "Asian-Pacific American," "Caucasian," and "Other."
Minority applicants who are "visibly identifiable" must submit a photograph with their application. A minority applicant who cannot be identified by race or ethnicity based on looks alone "shall submit a copy of his or her birth certificate, tribal enrollment papers or other document." Notwithstanding this personal documentation, the regulations make clear that the decision of whether one qualifies as a minority rests with the government: "The final determination will be in the sole discretion of the [OMWBE] office."
The same legal strictures apply to women applicants. Each such applicant "shall submit...a copy of her birth certificate, valid driver’s license, or other document which shows that the [business] owner is a woman." Again, the final determination of a business owner’s gender rests in the sole discretion of the certifying government office.
Along with general descriptive information about the business itself, the certification process requires specific race and gender identification of the business owner and his or her associates. Business owners seeking special certification must list the number of minorities and women they employ, the race and gender of all current officers, the race and gender of all officers for the past three years, the race and gender of all members of the board of directors, and the race and gender of all former board members for the past three years. The firm must also identify by name, race and gender all company officers who make policy decisions or manage day-to-day operations.
C. Race and Gender Certification for Federal Programs
OMWBE uses a companion system to certify businesses for the Federal Highway Administration’s mandatory "Disadvantaged Business Enterprises" program. The Office’s DBE certification is used for dispensing funding on federal road projects in the state. It is also used by other federal agencies that operate similar race- and gender-based programs. As noted above, Initiative 200 would have no impact on eligibility for federal funds in Washington, so this part of OMWBE’s certification system would remain unaffected if the measure becomes law.
Washington state has 462,474 registered businesses, and of these 3,876 (less than 1%), are listed in OMWBE’s Directory and are entitled to the benefits of the program. The Office’s elaborate certification procedure demonstrates that some system of accurate classification for applicants is essential to any race- and gender-based program. Government procurement officials keeping count under their agency’s Affirmative Action Plan must be sure that firms claiming a specific race or gender identity really are who they say they are.
A major part of OMWBE’s work, therefore, is to insure that those of an ineligible race or gender do not create front companies to improperly solicit business from the state. One kind of fraud recognized in the regulations is known as a "switch business." This is defined as a firm that was "previously owned and controlled by a man, men or non-minorities" which has made cosmetic changes in its structure to falsely gain state certification as a minority- or women-owned business. Another artifice is the practice of "intertwinement," in which a business owned by one or more white men improperly shares ownership, equipment, employees or interests with a minority- or woman-owned firm.
Enforcement of the state’s race and gender rules involves a significant portion of OMWBE staff time and resources. Violations are taken seriously. Legal penalties for race or gender fraud include debarment from doing business with the state, plus civil penalties of up to $5,000 or 10% of the contract in question. In fiscal year 1995, OMWBE staff decertified 1,434 firms, most because they did not return application forms, but many were rejected because they "did not currently meet program eligibility criteria."
E. Program Benefits
While the state’s race and gender certification process may appear cumbersome, for a qualified firm it can bring significant benefits. OMWBE’s application makes clear that "certification status may provide a company a competitive advantage when doing business in the public sector." Under this system, a firm seeking profitable business with the state and officially certified as minority- or woman-owned may gain a marked edge over a rival company that is not certified.
An example of how OMWBE’s certification program can directly benefit participating firms is Request For Proposal No. 12-97 issued by the recently-formed Regional Transit Authority. The RTA’s mission is to manage and implement a $3.9 billion program over 10 years to build a rapid transit system for the Seattle area. RFP No. 12-97 offered a contract worth $15,000 for "Public Involvement Facilitation Services" (public relations) to companies interested in bidding for the work. The advertisement specifies that "responses only from firms certified as Minority Business Enterprises" would be accepted [emphasis in original]. In its public notice the RTA made clear that bids from non-certified, non-minority firms would not be considered. The full text of the advertisement appears opposite.
In fiscal year 1995, $205,294,023 in state contracts were awarded among the 3,876 companies possessing OMWBE certification. This figure represents 11.3 % of the $1,815,595,412 in state money that was subject to the program that year. These funds were paid out by 117 state agencies and educational institutions.
F. Program Not Meeting Goals
Yet according to the latest annual report, after 15 years of effort, the program has not met the goals it has set for itself. OMWBE measures participation by minority-owned businesses and women-owned businesses separately in each of four contract areas: 1) Construction, 2) Engineering and Architecture, 3) Professional Services, and 4) Goods and Services.
In fiscal 1995, the state achieved its race and gender contracting goals in only two of the eight assessment areas, falling short in the remaining six. OMWBE estimates an additional $107,865,644 in state spending should have been directed to minority- and women-owned firms if state agencies had met all of their race- and gender-contracting goals. This means of course that the firms that did win these contracts would have been deprived of $107,865,644 worth of earnings gained from doing business with the state.
G. Program Costs
The enforcement and regulatory work of the OMWBE is itself not without cost. OMWBE’s budget for the current 1997-1999 biennium is $2,440,977, a 9.6% increase over the previous two-year budget, to support a full time staff equivalent of 20 people. A steady upward funding trend is also revealed in the two previous budget cycles. OMWBE operations cost $1,997,658 in 1993-1995, and $2,226,569 in 1995-1997, representing increases of more than 10% in both instances.
The further costs of operating the state’s race- and gender-based programs is extensive but impossible to measure accurately. Every state agency, board and commission, with certain exceptions, is required to appoint an affirmative action officer. State entities must also develop a lengthy affirmative action plan each year and lay out specific race and gender goals and timetables, detracting time and effort away from their core missions.
VIII. Planned Expansion of Race- and Gender-based Policies
Even as the people of Washington weigh the merits or shortcomings of Initiative 200 for decision in the Fall, the state’s extensive affirmative action machinery is considering options for expanding the current race- and gender-based system.
There are at least five proposals under consideration for augmenting current policies:
Create multi-racial categories. These would be added to the five race and ethnic classifications currently used. As more Americans claim a multi-cultural ancestry, there are a "growing number of state employees who insist on designating their multi-racial status on employment forms," thereby creating "the challenges of tracking multi-racial designation for affirmative action purposes." Understandably, some job applicants are checking more than one race-identification box if they think it will help them in getting hired. Adding multi-racial categories is intended to formalize this choice. Unfortunately, it could also provide one more set of issues that lead to employee complaints or litigation.
Expand Applicant Flow Data. Expanded collection of "Applicant Flow Data" would track job seekers by race and gender through the state’s complex hiring and promotion employment system.
Increase Adverse Impact Analysis. An expansion of "Adverse Impact Analysis" by more state agencies would be intended to, "identify, based on statistical analysis, areas of possible discrimination."
Require Race Verification. The state has considered whether "applicants should be required to verify their affected group status" in order to prove they belong in the race category they have chosen. Currently, the Department of Labor and Industries uses a "verification process" for affirmative action purposes, while the Department of Personnel does not. An expansion of race- and gender-based policies could require that the Labor and Industries practice be extended to all agencies.
Executive Agency Diversity Plans. Created under executive order in 1993, these plans are designed to "go beyond the scope of affirmative action." In 1995, Governor Lowry recognized eight agencies for "outstanding achievement" in implementing parts of their Diversity Plans. The state is now working to encourage other state agencies to expand implementation of their own Plans, which are monitored by the Diversity Manager at the Department of Personnel.
The scope and cost of government programs are seldom static. They tend to be either growing or shrinking in size. Washington State’s race- and gender-based programs have grown enormously in complexity and size since their inception in the mid-1960s. The Supplemental Certification Program, OMWBE’s certification process, and agency Affirmative Action Plans now pervade nearly all aspects of state government hiring, promotion and contracting. Current trends indicate that expansion of these programs will likely continue based on the new race and gender policies now being considered.
Yet, in spite of years of effort in this direction, racial and gender disparities in the state workforce and in the companies hired by the state remain. Research into the programs’ structure and results shows that by their own standards they have not achieved their stated, measurable goal of proportional representation for women and minorities in the areas of state employment and contracting where they operate.
One conclusion that can be drawn from the present status of Washington’s race- and gender-based programs is that what is need is more of the same. The governments targeted, color- and sex-conscience policies have not been in place long enough, or been applied widely enough, to achieve their original goals. This view argues for re-enforcing and extending the status quo.
An alternative conclusion is that these programs are not working as well as their originators intended and are unlikely, based on experience since then, to ever achieve the results they intended. Racial and gender tensions still exist in our society and the race- and sex-conscience policies of the state government have failed to alleviate them. This view argues for a shift in direction in the way the state treats minority and women citizens. Fair and equal treatment for all, combined with rigid enforcement of the state’s anti-discrimination laws, offers the best route to the kind of society both supporters and opponents of Initiative 200 envision.
Initiative 200 takes this approach. It’s passage would dramatically redirect the state’s current race- and gender-based programs. Recognizing the objective distinctions among the state’s diverse government workforce and business community would still be allowed, as the U.S. Census makes note of citizens’ race and gender, in addition to compiling a numerical count. Recruiting and outreach efforts based on these distinctions would be allowed, as long as no person or groups were discriminated against or received preferential treatment. This has been the case in California. There, recruiting and outreach efforts to minorities and women have continued since the passage of Proposition 209 and the resolution of the court challenges against it.
Initiative 200 presents the voters with a clear choice. If the measure is defeated, the state’s race- and gender-based programs will likely continue on the path they have followed over three decades, with the implementation of at least some of the proposed expansions now being considered. If Initiative 200 passes, the structure of the current race- and gender-based programs would be redesigned so they do not discriminate against, or grant preferences to, citizens based on their color, ethnicity or gender. If this turns out to be the case, the people of Washington will have made clear they want the state to reaffirm the fundamental principle of equal treatment for all citizens before the law.
About the Author
Paul Guppy is a graduate of Seattle University and holds graduate degrees in government and political science from Claremont Graduate School and the London School of Economics. He completed 12 years as a legislative aide in Washington, D.C., seven as a Legislative Director in the United States Congress, before joining the Foundation this year as Vice President for Research. He is the author of "Property Tax Relief in Washington: Is Referendum 47 Working?" and "A Citizen's Guide to Initiative 200," both published earlier this year by the Foundation.
Mariah Burke and Sarah Singer served as Research Assistants for this study through the Foundation’s internship program. Ms. Burke is studying for a degree in political science at the University of Washington in Seattle. Ms. Singer is studying for a degree in economics and sociology at Bucknell University in Pennsylvania.
Dennis Lisk and Tim Nank of the Foundation’s staff also assisted with research.