Small businesses brace for wave of anti-affirmative action legislation.

Small businesses would be affected dramatically by bills that would abolish the state's affirmative action public contracting program, state leaders agreed. But those leaders disagree on whether the proposed legislation would increase or decrease opportunities for minority-and women-owned businesses.

Currently, prime contractors on state and municipal government contracts must make a "good faith effort" to award a certain percentage of subcontracts to minority- and women-owned businesses. Prime contractors on state-funded contracts must attempt to award 15 percent to minority-owned businesses, 5 percent to women-owned businesses and 3 percent to businesses owned by disabled veterans.

One bill, Assembly Bill 384, would repeal those requirements. It also would repeal provisions regarding certification of minority, women and disadvantaged business enterprises and repeal requirements on bidders to meet minority and women business enterprise goals. AB 384, which was introduced by Assemblyman Bernie Richter, R-Chico, has an exact replica, SB 938, that was introduced in the state Senate by Sen. Tom Campbell, R-Stanford.

"Affirmative action basically works on establishing a preference on race and gender with specific percentages of the contracts awarded to companies in those categories," said Jon Glidden, a legislative consultant to Campbell. "While it may be a desirable social policy, it's not a policy that promotes higher quality or lower price. The gender or ethnicity of the owners of the company is irrelevant to whether the state (uses it)."

Opposing views

Critics said the bills would hurt small businesses by limiting competition for public contracts, which include contracts for construction, commodities and professional and legal services.

"It's bad for business," said Clifford Tong, chief executive officer of The Small Business Connection, a Lafayette, Calif.-based company that offers consulting to small businesses on how to obtain state contracts. "It will result in taxpayers paying more for goods and services, because it will reduce the incentive for prime contractors to subcontract and (reduce the incentive) for minority and women business owners to bid on public contracts." In addition, minority- and women-owned businesses would be discouraged from entering the often-expensive bidding procedure for state contracts, Tong said.

Richter said state contracts should be awarded only to those who are the most qualified. Preferential treatment of minorities and women is "dangerous," and government should not intervene by dictating proportionality, he said.

"Last time I looked at the National Football League or the National Basketball Association, I didn't think the players matched up to the population either, but I thought the best people were hired to play," Richter said. "That's the breaks of the game. I would say the same thing applies to any public endeavor."

Large-company bias

But critics of the bills said their passage would cause state agencies to favor larger firms or "firms with a name," whether or not they are the most qualified.

"Agencies are in love with the big guys," Tong said. "The most qualified contractors bidding should get the contracts. But in reality, you and I both know ifs not always the most qualified firm or person. It's the individual or the company or the group of people who historically have always had an advantage in that process."

With a third of all minority businesses in the country located in California and the overwhelming passage last November of Proposition 187 limiting services to illegal immigrants, California has become a battleground over affirmative action.

"It's a strategy by the Republicans to use the affirmative action issue to split up the Democrats to win the presidential election in '96," Tong said. "If they can win it here, they can win it (elsewhere)."

Richter, however, said he is not so confident.

"I thought I knew - now I don't know," Richter said. "There's so much demagoguery. For some people, this (affirmative action) is such a vested right or interest. But one way or another, two years from now, this (anti-affirmative action legislation) will be the law of the land. Governmental decision making based on race and gender and national origin will not be allowed."

Legislative avalanche 

Other anti-affirmative action bills recently introduced in Sacramento include:

* Assembly Constitutional Amendment 2 - This would effectively abolish affirmative action programs by amending the state constitution to prohibit the state and its political subdivisions from using race, sex, color, ethnicity or national origin as a criterion for either discriminating against or granting preferential treatment to individuals or groups with regard to public employment, education or contracting. It has a companion bill in the state Senate, Senate Constitutional Amendment 10.

* AB 211 - This would repeal the existing requirement that state agencies, school districts and community college districts establish affirmative action plans for hiring and promoting under-represented minorities and women. It would prohibit preferential hiring or promoting on the basis of race, sex, color, ethnicity or national origin. It would, however, allow consideration of socioeconomic factors in hiring for entry-level positions. But promotions and hiring for professional positions would be based solely on merit. It would hold public officers and employees personally liable for any injuries caused by failure to enforce provisions. Its replica bill in the state Senate is SB 939.

* AB 727 - This would prohibit any K-12 public school, state community college, California State University or University of California institution from considering race in connection with admission, financial assistance or academic performance evaluation decisions - except as ordered by a court to comply with federal law or California constitutional law. Its companion bill in the state Senate is SB 940.

* AB 833 - This would prohibit the California Community Colleges, California State University and University of California systems from using race, color, religion, sex or national origin as a criterion for either discriminating against or providing preferential treatment to anyone regarding faculty appointments, retentions, tenures, promotions, compensation or other conditions of employment. It would also makes public employees liable for any injuries caused by failure to enforce its provisions. Its companion bill in the state Senate is SB 983.