This has been going on for almost half a century. Google Kathy's Kranes. The woman "running" that business was having sex with a Small Business Administration officer to win 8a contracts from the federal government. The company was run by white guys and passed-thru entire contracts to real contracting businesses who did the actual work-- also run by white guys. A bunch of them went to jail, but I'm surprised that a program so prone to scams like this is still in existence after so many years of obvious corruption.
I agree with this however Joe and Palantir are hypocrites. Last year Palantir offered TWO HUNDRED JOBS EXCLUSIVELY FOR JEWS, that IS equivalent if not worse than minority contracting. It’s clear Joe and his cabal want no minority rights… unless it’s for Jews of course. Sorry whites. Sorry blacks. Sorry Asians. You’re simply not Jewish.
This piece gave a lot of clarity into this issue. Thanks for the awesome article and the information. Hopefully this can be DOGED out at the federal level anyway!
A friend had an engineering firm and submitted bids through a "front" man company. He pleaded with that individual to not change anything. Sometimes it worked, sometimes it did not. I suspected that it was pervasive. Thanks for all of your common-sense commentary.
From the other side of the coin, I and another woman engineer started a consulting company in 1993. We did not promote it as a woman-owned business. We just happened to be women. We had no control over whether or not our customers used us to meet some minority goal but some did. All of a sudden we started getting government forms that would require us to complete and submit within 30 days on penalty of going to jail. We were busy doing work. We didn’t want to have to hire a lawyer. These programs aren’t good for real “minorities” it just reduces their productivity.
At one time, imo, there was a place for minority set asides, but I believe it's time to move on. "Since minority contract programs are often awarded outside of typical bidding processes, they are an easy way for politicians to reward political allies." This is true with all contract awards outside the bidding process as shown with "The Department of Transportation Inspector General said in 2016 that over a third of its procurement fraud cases involved disadvantaged businesses." That means the other 2/3 of fraud cases are not minority owned businesses. Fraud is fraud. Get rid of the set asides and go after all of the fraud. It doesn't take a woman or racial minority being involved for fraud to happen and for politicians to reward allies.
Wow. 45 years in public works contracting. Your article is so spot on how terrible these programs are. You’re too much emphasis on fraud (although fraud is prevalent). Not enough emphasis they simply don’t do anything they intend to do and not enough emphasis deep the taxpayer dollars are wasted.
I could tell you so many stories of 45 years. Every minority firm I have known succeeded because they were good at what they did not from a government program. Other than a very few, the majority benefiting from these programs are pass through entities, who add no value, just middleman adding an unnecessary percentage to the cost.
Forget that waste. Add up every county city state school district public utility, etc. that has a full-time staff of public or employee to oversee these programs and make the quote. The costs are beyond what you can fathom.
I retired as Director of Procurement for a public ivy. The state imposed aspirational goals of 40% of dollars be spent with SWAM (Small, woman owned and Minority) businesses. The effect was that if you were SWAM as certified by the state and the purchase was less than $50,000, normal procurement procedures did not need to apply. Lot of pressure from university administration and state politicians to meet the goals. Cost of goods and services were a minimal consideration.
Thank you for this effort. This type of reform is badly needed. I have an ownership stake in an IT company that is Veteran owned (myself and my partner). Unfortunately, we are both straight white males and were not wounded during our service. Moreover, the government no longer considers us a "small business" since we have passed the stated thresholds for that status. Even though we are a veteran owned company, we are not considered a small business, and veteran status without also being a small business or some form of racial or gender minority is absolutely worthless in the hierarchy of government contracting preferences. As such, we are simply not ever able to submit a successful bid for government work. There have been occasions where I know our bid was the best one on the table, but we lose out because we just can't overcome the preferences enjoyed by competing bidders. It got so frustrating that we literally stopped bothering to bid for government work.
I have told colleagues that the current system, which requires a MWBE company to be included with the bid to be competitive, does nothing more than cost the government 25-30% more, so I found it interesting that you agreed that the need to include MWBE subs in the bid does nothing but force the costs to be inflated 25%. Our government could save billions if we just stopped the preference game.
Do you dislike these programs because they give advantages based on race and gender; because they give advantages at all; or because they have been abused?
If the first, would you be equally upset if advantages were given to new businesses, or businesses owned by persons who were the first in their family to attend college? That would more directly effectuate policy goals, but may not be legal given SCOTUS precedent that such groups do not constitute a suspect class.
If the second, that seems like a fundamental disagreement with government function. Many laws aim to make our society more stable and financially equal (e.g., our mathematically progressive tax code). If you argue that no company should ever be awarded an advantage in government contracts, that treats government as a business - which it’s not. You also run the risk of the government creating or bolstering monopolies it later must prosecute under antitrust law.
If the third… we can all agree that Fraud Is Bad. Without oversight, however, it’s inevitable in such large systems. (Consider Medicare/ Medicaid fraud.) The simplest solution would be to hire more staff to audit these contracts. But that solution is at odds with the current administration’s efforts to gut the federal workforce.
The complaint about "fraud" in these set-aside programs is a secondary or even tertiary problem. Either way, while the fakery is appalling and interesting, it's the abject racist practices that should be the end of these programs.
Thank God for you, Joe. I pray for you every night. You're addressing things that no one else will touch. You give me hope.
This has been going on for almost half a century. Google Kathy's Kranes. The woman "running" that business was having sex with a Small Business Administration officer to win 8a contracts from the federal government. The company was run by white guys and passed-thru entire contracts to real contracting businesses who did the actual work-- also run by white guys. A bunch of them went to jail, but I'm surprised that a program so prone to scams like this is still in existence after so many years of obvious corruption.
I agree with this however Joe and Palantir are hypocrites. Last year Palantir offered TWO HUNDRED JOBS EXCLUSIVELY FOR JEWS, that IS equivalent if not worse than minority contracting. It’s clear Joe and his cabal want no minority rights… unless it’s for Jews of course. Sorry whites. Sorry blacks. Sorry Asians. You’re simply not Jewish.
That’s a pretty bold allegation. Do you have proof to support it?
No, he's a troll.
I know. Sometimes politely pointing out a lack of evidence encourages the troll to return to his bridge.
This piece gave a lot of clarity into this issue. Thanks for the awesome article and the information. Hopefully this can be DOGED out at the federal level anyway!
A friend had an engineering firm and submitted bids through a "front" man company. He pleaded with that individual to not change anything. Sometimes it worked, sometimes it did not. I suspected that it was pervasive. Thanks for all of your common-sense commentary.
Good work and important article. Now let’s get this in front of those who can take further actions to address.
From the other side of the coin, I and another woman engineer started a consulting company in 1993. We did not promote it as a woman-owned business. We just happened to be women. We had no control over whether or not our customers used us to meet some minority goal but some did. All of a sudden we started getting government forms that would require us to complete and submit within 30 days on penalty of going to jail. We were busy doing work. We didn’t want to have to hire a lawyer. These programs aren’t good for real “minorities” it just reduces their productivity.
At one time, imo, there was a place for minority set asides, but I believe it's time to move on. "Since minority contract programs are often awarded outside of typical bidding processes, they are an easy way for politicians to reward political allies." This is true with all contract awards outside the bidding process as shown with "The Department of Transportation Inspector General said in 2016 that over a third of its procurement fraud cases involved disadvantaged businesses." That means the other 2/3 of fraud cases are not minority owned businesses. Fraud is fraud. Get rid of the set asides and go after all of the fraud. It doesn't take a woman or racial minority being involved for fraud to happen and for politicians to reward allies.
Wow. 45 years in public works contracting. Your article is so spot on how terrible these programs are. You’re too much emphasis on fraud (although fraud is prevalent). Not enough emphasis they simply don’t do anything they intend to do and not enough emphasis deep the taxpayer dollars are wasted.
I could tell you so many stories of 45 years. Every minority firm I have known succeeded because they were good at what they did not from a government program. Other than a very few, the majority benefiting from these programs are pass through entities, who add no value, just middleman adding an unnecessary percentage to the cost.
Forget that waste. Add up every county city state school district public utility, etc. that has a full-time staff of public or employee to oversee these programs and make the quote. The costs are beyond what you can fathom.
I retired as Director of Procurement for a public ivy. The state imposed aspirational goals of 40% of dollars be spent with SWAM (Small, woman owned and Minority) businesses. The effect was that if you were SWAM as certified by the state and the purchase was less than $50,000, normal procurement procedures did not need to apply. Lot of pressure from university administration and state politicians to meet the goals. Cost of goods and services were a minimal consideration.
Thank you for this effort. This type of reform is badly needed. I have an ownership stake in an IT company that is Veteran owned (myself and my partner). Unfortunately, we are both straight white males and were not wounded during our service. Moreover, the government no longer considers us a "small business" since we have passed the stated thresholds for that status. Even though we are a veteran owned company, we are not considered a small business, and veteran status without also being a small business or some form of racial or gender minority is absolutely worthless in the hierarchy of government contracting preferences. As such, we are simply not ever able to submit a successful bid for government work. There have been occasions where I know our bid was the best one on the table, but we lose out because we just can't overcome the preferences enjoyed by competing bidders. It got so frustrating that we literally stopped bothering to bid for government work.
I have told colleagues that the current system, which requires a MWBE company to be included with the bid to be competitive, does nothing more than cost the government 25-30% more, so I found it interesting that you agreed that the need to include MWBE subs in the bid does nothing but force the costs to be inflated 25%. Our government could save billions if we just stopped the preference game.
It’s hard not to like a guy named Judge Glock.
Hey @Joe - I was a USG services contractor for about 15 years and dealt with all manner of 8a’s and their fraud. If you ever need to find out HMU.
Do you dislike these programs because they give advantages based on race and gender; because they give advantages at all; or because they have been abused?
If the first, would you be equally upset if advantages were given to new businesses, or businesses owned by persons who were the first in their family to attend college? That would more directly effectuate policy goals, but may not be legal given SCOTUS precedent that such groups do not constitute a suspect class.
If the second, that seems like a fundamental disagreement with government function. Many laws aim to make our society more stable and financially equal (e.g., our mathematically progressive tax code). If you argue that no company should ever be awarded an advantage in government contracts, that treats government as a business - which it’s not. You also run the risk of the government creating or bolstering monopolies it later must prosecute under antitrust law.
If the third… we can all agree that Fraud Is Bad. Without oversight, however, it’s inevitable in such large systems. (Consider Medicare/ Medicaid fraud.) The simplest solution would be to hire more staff to audit these contracts. But that solution is at odds with the current administration’s efforts to gut the federal workforce.
The complaint about "fraud" in these set-aside programs is a secondary or even tertiary problem. Either way, while the fakery is appalling and interesting, it's the abject racist practices that should be the end of these programs.
We should also be killing federal IDIQ contracts!