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Ladies and gentlemen, my name is Tom Stewart. I am the President of Frank Gurney, Inc., a small subcontracting firm in Spokane, Washington.
My firm specializes in the construction of highway guardrails and signs. More than 95% of this work is for the government agencies that construct and maintain our highways and other roads. The federal government does not award much of this work, but it does provide the funding. And in doing so, it mandates that state and local governments implement special preference programs.
I am here today to talk to you about those programs and how they have affected my company. As you may have gathered, Frank Gurney is not a minority business enterprise. Nor is it owned by a woman. It is just another small non-minority firm owned by a fairly ordinary American family. My stepfather, Frank Gurney, stirted the business in 1959. My brothers and I worked with him to build the business from nothing. We all worked very hard, for a lot of years. Nothing fancy, just a lot of hard work, and over time, we managed to make a good, sound company.
My stepfather passed away in 1989. It was not only a sad but also an ironic time for me and my.brothers. It was sad because my stepfather had to take a great deal of frustration with him to his grave. Special preference programs were his worst nightmare, and the one obstacle that he could not overcome. It was ironic because that same year, the Supreme Court decided the Croson case, promising to protect everyone -- including me and my family --from racial discrimination.
Almost seven years later, after much public debate, and another Supreme Court ruling, I regret to inform you that the discrimination continues. The government has been slow to respond either to the public sentiment or the Court's rulings. I suppose that litigation will eventually bring it all to an end. But litigation is slow. And it's very expensive.
In theory, I could sue the government myself. But that's not realistic. A small firm like mine cannot begin to finance a lawsuit against the federal government. The U.S. Department of Justice is the largest law firm in the world. For all practical purposes, its resources are unlimited. By the time my firm won a lawsuit, it would be in bankruptcy.
Thus, I turn to you, to the members of Congress, and I ask you to fulfill the promise of fair and equal treatment for all Americans. Unless Congress acts, the nightmare of discrimination will continue for some time to come. It will go on, every week, at the bidding table, just as it has for the last fourteen years.
Attached to my statement are letters that we have collected since 1981. In them you will find the unvarnished truth of what is happening to me and too many other Americans. You will find, for example:
þ A letter from the Associated Sand and Gravel Company, confirming that it had rejected our bid because it was "obligated to use [a] higher quotation to satisfy [a) 6% minority business enterprise goal";
þ A letter from the NPC Company informing us that it could not use our low bid because it had to "use an Indian contractor or ... be considered nonresponsive";
þ A letter from the Max J. Cooney Company explaining that, as it entered the 1985 season, it would "not be able to subcontract work to [Frank Gurney], as (Cooney had] for the past several years," because of the MBE quotas for all highway projects;
A letter from the Washington Construction Company stating that, "due to the requirements imposed to subcontract 12% of the total cost of [another] project to a DBE or WBE firm," it was "unable" to use my firm;
þ A letter from the TransState Paving Company, explaining that, "had [it] not been restricted by DBE requirements, [it] most certainly would have used" my firm.
On and on the letters go. I invite you to read them.
And in doing so, please note that the discrimination continues, to this very day. The Croson case came down seven years ago. The Adarand case came down on June 12. But the discrimination continues. It just goes on and on for people like me and my brothers. Also attached to my statement is a letter dated June 28, 1995, from West Way Construction, expressing its "regret" that it could not use our quotation because, "although [Frank Gurney's] price for the guardrail items was $2,000 lower than Peterson Brothers, [West Way] needed Peterson to meet [its] DBE goal." You will also find:
þ A letter from North Central Construction, dated July 11, 1995, explaining that it was "again disappointed that even though [Frank Gurney had] submitted the low quote, "it" could not use [my firm], but instead used the next low quote from Junlo Corporation in order to satisfy the DBE goal"; and
þ A letter from Riverside Contracting, dated August 28, 1995, informing me that I had submitted the low quote for yet another job, but that Riverside had to use a different firm, "to help meet the 12% goal for the project."
We don't blame the general contractors. It's not their fault. They're good and decent business people. They'rejust doing what they have to do to get the work.
The problem is our government. I'm not here to whine. Nor am I here to claim some kind of compensation for what has happened in the past. I am, however, here to ask for fundamental fairness, in the future. Like most other Americans, I want no more than the chance to succeed -- or even fail -- on my individual merits. It's really as simple as that. It's just not fair to punish my firm because neither minorities nor women own it.
Most general contractors don't want to write the kind of letters that you will find attached to my statement. They know that they are in the middle of a discriminatory system, and they know that it is morally wrong, but they fear litigation, and in today's world, who could really blame them.
Everyone in the construction industry also knows that the set-aside programs do not work. Race and gender are not proxies for economic disadvantage, and with all due respect, there are few government officials either capable of guiding fragile firms, or interested in doing so. Our major competitors are two strong and well run firms that were in business long before the government started mandating quotas. One is Junlo Corporation, a subcontracting firm owned by an Asian-American. The other is Peterson Corporation, a firm owned by a woman. We compete with these firms at the bidding table nearly every week. And we welcome them as competitors. But on an equal footing, and not when they have the advantage of federal and state quotas. Both of these firms are larger than our own, and quite frankly, they need no help. Yet they continue to enjoy the advantage of being awarded work on which they are not the low bidder, simply because they are owned by certain people.
We realize that affirmative action is deeply rooted in American society. I am told and I believe that the vast majority of Americans continue to support affirmative action. They want it to continue. So do I. But I urge you in the strongest possible terms to put affirmative action back on its original course. It was never intended to give special preferences to a favored few. It was never intended to require a general contractor to reject a lower bid from a subcontractor simply because that subcontractor is someone like me.
Affirmative action just "seems so right." And indeed it is. But special preferences are equally wrong. Like all conscientious Americans, we are very much in favor of helping the truly disadvantaged, but reverse discrimination, quotas, and other special preferences based on race or gender, are simply NOT THE WAY.
The government has paid thousands of extra dollars for work that just our firm could have performed. The total could have easily paid for an extra teacher to give disadvantaged children the economic, social and academic headstart that they really need, to become responsible, mainstream American citizens. But instead, those dollars have lined the pockets of a few that did not need help at all.
I encourage you to look at the numbers for the Washington State Department of Transportation. I do not have access to the exact numbers, but I am confident that, if you were informed of the truth, you would find that less than five percent of the certified minority and women business enterprises are doing more than 95% of the quota dollars, and that most of the firms doing the work should have graduated from the program long ago.
They remain in the program for one simple reason: the government has to meet its quotas. The history of special preference procurement in the construction industry is a history of ever higher quotas for minority and women business participation. The better the construction industry has performed, the higher the numbers have gone. If the government were to start graduating firms, the quotas would have to go down. And heaven forbid that the quotas should ever go down.
I am not insinuating that any one in the Washington Department of Transportation or any other agency wants to hurt me or my family. In fact, they are simply doing their jobs, carrying out the wishes of the federal government. The problem is that Congress has yet to recognize and respond to the problem that it has created. Special preference programs are fundamentally unfair and a poor way to direct the investment of tax dollars.
In my part of the country, we still believe that God created us all equal. We also believe that the Constitution of the United States expresses that basic proposition. It follows that the government must treat all Americans like the individuals that they are. It is wrong to do otherwise.
As I said earlier, I support affirmative action and I hope that it does continue. But it must rid itself of preferential treatment for certain citizens, based exclusively on their race or their gender. I would suggest that the government simply require its prime contractors (1) to solicit bids from minority and women business enterprises, and (2) to submit the resulting quotations to the relevant government agency.
The government should continue to require its prime contractors to use certain subcontractors, because of their race or sex. A prime contractor should not be refused the award of a prime contract, or otherwise found nonresponsive, if in fact it used the lowest responsible subcontractor without regard to the race, gender, or ethnic origin of the owner of that firm.
We love our country. We pay our taxes. And we play by the rules. We do believe in helping the truly disadvantaged. We would and do very much support programs that will really help such people. But goals, quotas, bid preferences, and other forms of preferential treatment are simply not the way to advance our nation's interest in civil rights.
There is no single solution to the complex problems that face our country, but we will all be closer to the fair and equal treatment from each other once we get fair and equal treatment from our own government.
Thank you.