Recently federal, state and local authorities are investigating and increasing scrutiny over minority contracting programs as a Times Investigation found that companies received more than 300 million in government contract based on claims by firms having Native American owners. The certification process was often spotty, with officials accepting flimsy documentation of Native American heritage. They even accepted unverified accounts that the contractors suffered discrimination because of their ethnicity. Additionally, many state/local officials told the Times that it did not need a proof of tribal enrollment when certifying Native American businesses as minority-owned.
Government responses have been slow going but increasing with states like California stripping minority status from a number of companies. In addition, “city officials in St. Louis said they have decertified five firms that received contracts set aside for minority-owned businesses. State contracting officials in Oklahoma and Kansas said they have removed the minority certification from two companies or intend to do so. As of this week, the two firms were still listed as certified in Kansas’ minority contractor database.” Also, the US Department of Transportation sent an official memo to check all companies classified as Native American owned the memo mentioned that a 2014 rule change required contractor claiming to be Native American must belong to a government recognized tribe. The memo stated that “It has come to the department’s attention that some certified DBE firms may have relied on the owner(s)’ membership in Indian tribes that are not federally or state-recognized,” the memo states. “It is important to the integrity of the DBE Program that only firms meeting all eligibility standards of the regulation, including social disadvantage, are allowed to take part in the program.” This new scrutiny marks a new phase of government intervention in the world of small businesses. However, this intervention is necessary to curb the unfair and fraudulent actions being taken by certain companies. Hopefully in the future companies that actually identify as one will be able to have a fair chance in obtaining a bid and those that try to use this shady tactic would receive the proper punishment.
Author: Larry Pan