Rather than just let all qualified companies bid for jobs on an equal footing, the federal government and some states and cities instead use the bidding process for fishy social purposes.
Various government programs give preference in certain contracts to minority- or female-owned companies. The programs even limit how successful those contractors may be in getting contracts. If they have made “too much” money in the past, they may be passed over in favor of a contractor that the government designates as “struggling.”
That’s unjust and absurd. It’s unjust to pass over a company simply because it is not owned by a woman or a member of a minority group. And it’s absurd to seek out a struggling company to reward with a contract: The company may be “struggling” because it does bad work!
Such practices amount to social experimentation and corporate welfare – neither of which should be conducted with taxpayer dollars.
Such “affirmative action” programs also may promote fraud. Federal investigations are under way in New York state after reports that minority- or female-owned companies may have served merely as “pass-throughs” for funds awarded through affirmative action programs. The companies “officially” were awarded government jobs, but some other firm not owned by women or minorities actually did the work and got most of the money. The minority firms just collected a fee, perhaps for handling payrolls.
The trouble is, the affirmative action rules can make it hard to find qualified companies to do the work.
“Several law enforcement officials … acknowledged that the goals for the participation of minority- and women-owned contractors and disadvantaged businesses often did not accurately reflect the universe of qualified companies,” The New York Times reported.
The paper reported it is now common to find illegal ways to get around the “often limited options” of companies that can actually get the job done.
The solution is neither to discriminate against qualified companies owned by women and minorities, nor to give them preference. They and other businesses should compete for contracts on a level playing field. Tax dollars should not be used to promote dubious social causes.