Settlement’s OK may hurt female contractors

As reported in the Chronicle

By CAROLYN FEIBEL
March 24, 2009, 7:13PM

The city is poised to approve a legal settlement that would eliminate contracting set-asides for women-owned businesses.

“It’s going to hurt women contractors,” said Judy Aiello, executive vice president of Sun Builders. “They’re going to be lumped with white male contractors.”

If approved, the settlement would end a federal lawsuit brought in 1996 by a white business owner.

Robert Kossman, who owns a seed and sod company, alleged that the city’s affirmative action program discriminated against him because he was white.

“We need to take a deep breath and get this lawsuit behind us,” said Councilwoman Melissa Noriega. “It’s been hanging around and hanging around and the judge is getting impatient.”
U.S. District Judge Lynn Hughes gave Houston until April 3 to take action, according to City Attorney Arturo Michel. The council could vote next week.

Some councilmembers said they feared Hughes would significantly gut the program if they did not approve the proposed settlement.

The settlement would eliminate the current construction subcontracting goal of 3 percent for women-owned businesses.

Female-owned firms still could apply for subcontracting work under the small business category; that set-aside is expanding from 5 to 8 percent under the settlement. The goal for minority-owned businesses will stay at 14 percent.

While known as “goals,” the subcontracting percentages are not strict quotas. Companies must document a good-faith effort that they tried to hire women-owned or minority-owned subs on a city project.

The city must pay Kossman $50,000 in damages and $125,000 for his legal fees, according to the settlement. Michel said the settlement would create an interim program, but the city would conduct a new “disparity study” to see which minorities and genders are having trouble getting city contracts. Then, the city will use the data to redesign the program for the long term.

Councilwoman Anne Clutterbuck said she would vote against the settlement and wants to do away with an identity-based system.

“I think we should be looking more at helping small and disadvantaged businesses than have a race or gender based system,” she said.