Soundings

Fine Print
Spring 1994

Mayor Giuliani has eliminated a key portion of New York City’s affirmative action program for city contracting. The provision, which dated from 1992, allowed female- or minority-owned companies to win contracts even if their bids were up to 10 percent higher than the lowest bid submitted. Predictably, Giuliani came under fire from minority advocates. But as Newsday columnist Sheryl McCarthy reports, the biggest beneficiaries of the scrapped “price preference” program turn out to have been—white men.

Under the program, a business owned by a white man could qualify for a price preference by forming a joint venture with a smaller female- or minority-headed firm. In 1993, six out of ten of the program’s beneficiaries were joint ventures. That is why, as McCarthy reports, businesses owned by white men collected $22.8 million of the $59 million the city awarded in 1993 under the price-preference program. Their female or minority partners collected only $12.2 million, and outside of joint ventures, firms owned by blacks received only $2.9 million.

In any case, the price-preference program seems to be gone for good. A few days after Giuliani terminated it, a New York state judge ruled the program invalid under a state law requiring government agencies to accept the lowest bids in awarding contracts.

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