Minority Contracts Studied

November 1, 1996
THE DAILY FED

Minority Contracts Studied

A new study by the Urban Institute study concludes that minority- and female-owned businesses receive a smaller percentage of government contracts than their numbers would suggest.

According to a report in The Washington Post, the study found that minority firms win just 57 percent of the contracts that they would be expected to achieve based on the number of such firms that are in business, despite the effects of various set-aside programs.

Urban Institute researcher Michael Fix said the study shows the need for maintaining affirmative action programs. "And I think it throws a lot of assumptions people have about widespread reverse discrimination into doubt," he added.

The report comes out in the midst of a string of attacks on affirmative action programs in the courts and in ballot intitiatives in California and other states.

Clint Bolick, litigation director for the Institute for Justice, a conservative think tank, told the Post that the report's findings weren't surprising. "Minority firms tend to be smaller and have less capital than nonminority firms, so it is not surprising that they receive proportionately fewer contracts," he said.

The Urban Institute's study was based on "disparity studies" done by several state and local government entities.

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