Minorities, women get bigger slice of Chicago construction pie

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Minority and women-owned contractors demanding a bigger piece of Chicago’s construction pie will get it, but not quite as much as they would have liked.

The City Council’s Budget Committee on Tuesday approved Mayor Rahm Emanuel’s stalled plan to extend Chicago’s construction set-aside program for five more years after the mayor agreed to raise the bar for both disadvantaged groups.

Instead of a 24-percent set-aside for companies owned by minorities, Emanuel raised the bar to 26 percent. Companies owned by women would get a 6-percent share of city construction contracts, up from a current level of four percent.

Both groups wanted more and came away with a little less. But, they were OK with it and fully understood the reasons.

“We have to look at the legalities of this. We have to have availability that can be supported to the goals that we have. You can’t have low availability and high goals. It’s not constitutional,” said Mary Kay Minaghan, a spokesperson for the Women Construction Owners and Executives.

Setting levels at “26 and 6 is higher than this program has ever been in the history of the ordinance and the history of Mayor [Harold] Washington’s executive order. So, we’re very happy with that,” Minaghan added.

She has no doubt a 6-percent share for women can pass legal muster.

“We’ve been building our businesses. We’ve been growing new businesses. There’s more of us to do the work and we should have the opportunity. This isn’t a giveaway to anybody. We have to bid this work just like anybody else. Our numbers have to be low to be utilized…But we want the opportunity to actually be invited to the table. Without this program, we’re never invited to the table,” she said.

Budget Committee Chairman Carrie Austin (34th) replaced her husband, Lemuel, who championed minority set-asides during the administration of former Mayor Harold Washington.

On Tuesday, Austin said she would have loved to push the envelope for minority contractors to 30 percent. But, she, too, is satisfied with the mayor’s offer.

“We have to be able to defend it in court as well. If we take it any higher, we may not be able to defend that number in court,” Austin said.

“Even if we have to move incrementally — a little bit more and a little bit more — I think it would be more safer for us so that we don’t lose the program at all.”

Two months ago, the demands of minority and female contractors for a bigger bite temporarily derailed Emanuel’s plan to extend until December, 2020 a construction set-aside program tailor-made to satisfy a federal judge.

At the time, Austin said she had approached Emanuel about raising the bar for minorities and women and hinted strongly that the mayor was inclined to go along to “rebuild trust in the African-American community” so alienated by his handling of the Laquan McDonald shooting video.

Ald. Carrie Austin (34th), chairman of the City Council’s Budget Committee, talks to reporters after the committee voted to raise construction set-asides for minorities and women and extend the program for five more years. | Fran Spielman/Sun-Times

Ald. Carrie Austin (34th), chairman of the City Council’s Budget Committee, talks to reporters after the committee voted to raise construction set-asides for minorities and women and extend the program for five more years. | Fran Spielman/Sun-Times

On Tuesday, the mayor did just that. Chief Procurement Officer Jamie Rhee said she is confident that higher percentages can be defended.

It’s the latest in a series of attempts by Emanuel to get back into the good graces of African-American voters who elected him in 2011 and re-elected him in 2015, even after he closed a record 50 public schools. Now, Emanuel is asking black voters to give him a third chance.

“We have worked very closely with our partners in the Law Department to see how other jurisdictions are using the numbers and the goals. And we believe this is a solid foundation we can build our program upon,” Rhee said.

West Side Ald. Jason Ervin (28th) said the increase will help in “communities of color” struggling with high unemployment and violent crime. But he questioned why the construction set-aside program tailor-made to satisfy a federal judge was not being extended for even longer than five years.

Rhee replied: “When you have an MBE-WBE or affirmative program, you use a study to support the numbers. Every five years or so, you want to refresh the data. That’s why we’ll do an interim review as well [in 2017] to make sure we’re still staying on track with our goals.”

Ald. Gilbert Villegas (36th) said he introduced an ordinance that would have raised the bar to 30 percent for minorities and ten percent for women knowing full well that it wouldn’t fly.

“If you sold a house, you’re not going to list it at the sale price,” he said. “In the interim review, we can see if there’s room for an increase in the goal.”

Ald. Willie Cochran (20th) complained about white contractors who continue to “fight” the objectives of the construction set-aside program by cutting minority sub-contractors “so close that they’re never able to move up in terms of profit…. The amount of money you will make will be miniscule.”

“You can keep your people working. But as far as your minority firm advancing, you’ll never do it… We need to start looking at how we can ensure that a minority firm or a women’s firm can be guaranteed a certain level of profit,” Cochran said.

In 2003, a federal judge responded to a lawsuit filed by the Builders Association of Greater Chicago by outlining a series of legal deficiencies in the existing set-aside law and gave the city six months to correct the problems.

The City Council followed the legal roadmap to the letter. Under the revamped ordinance, Asian-Americans were no longer automatically included in a “presumptively socially disadvantaged” group that includes African-Americans, Hispanics and women.

They were forced to apply individually and sign affidavits documenting past discrimination. Generalities and mere anecdotes were not enough. They had to cite specific incidents of discrimination, including names, dates, places and amounts of money denied.

The redrawn ordinance also included a five-year sunset provision; an economic cap that amounts to a personal net worth of $750,000 — not counting the owner’s equity in a personal residence or the business seeking certification — and revised set-aside levels of 24 percent for minority contractors and 4 percent for women, down from 25 percent and 5 percent.

A groundbreaking “Target Market” program that allows minorities to compete against each other for the more lucrative role of prime contractor was revised to include all small businesses, including those owned by whites.

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