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Vernellia R. Randall
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  The Small Business Act requires each federal agency to set goals for contracting with "small and disadvantaged businesses." Under its so-called "Section 1207" authority, the Defense Department is permitted to provide a ten percent bid price preference and to employ reduced-competition systems when necessary to meet its "small and disadvantaged businesses" contracting goals. The Omnibus Diplomatic Security and Anti-Terrorism Act requires that a minimum of ten percent of funds appropriated for diplomatic security projects be allocated to minority business enterprises. Certain small education grant programs (e.g., those under the Patricia Roberts Harris Fellowship, 20 U.S.C. sec. 1134d-g, and the Women and Minorities in Graduate Education Program, 20 U.S.C. sec. 1134a) target minorities in graduate education. The Department of Agriculture gives preferences to "socially disadvantaged" persons in the sale of farm properties and sets aside loan funds for farmers in this group. The Department of the Treasury administers a "minority-owned bank deposit" program in which designated banks receive special consideration to act as depositary institutions holding cash for federal agencies, so long as no increased cost or risk results to the government. The Department of Transportation gives preferences to small businesses owned and controlled by socially and economically disadvantaged individuals in Department of Transportation-assisted contracts.

The Clinton Administration has placed substantial emphasis on increasing educational opportunities for minorities in the United States. For instance, the Hispanic Education Action Plan is designed to provide targeted assistance to raise the educational achievement of Hispanic students and to close the achievement gap. The Plan incorporates a number of other programs, such as the State Agency Migrant Program and "GEAR UP."

Enacted in 1998 and administered by the Department of Education, GEAR UP funds partnerships of high-poverty middle schools, colleges and universities, community organizations, and businesses. The partnerships provide tutoring, mentoring, information on college preparation and financial aid, an emphasis on core academic preparation, and, in some cases, scholarships. In its first year, GEAR UP is serving nearly 450,000 students nationwide. Over 1,000 organizations are GEAR UP partners, including colleges and universities, libraries, arts organizations, local chambers of commerce, the YMCA, Boys and Girls Clubs, Wal-Mart, Unisys, and the New York Times Education Program. In the upcoming year, GEAR UP is expected to serve over 750,000 students.

The U.S. Small Business Administration (SBA) administers several programs that could be considered "special measures' under article 2(2):

The 8(a) Business Development Program and the Small Disadvantaged Business Certification and Eligibility Program (SDB Certification Program) assist small businesses owned and controlled by one or more individuals determined by SBA to be socially and economically disadvantaged. Socially disadvantaged individuals are those who have suffered chronic and substantial discrimination during their education, employment or business operation as a result of their membership in a particular group of people, rather than as a result of their individual characteristics. While people in certain minority ethnic groups are presumed to be socially disadvantaged, others who individually prove their social disadvantage also meet this criterion. The reasons cited for discrimination against individuals not in presumed groups include, in part, gender, age and disabilities. A finding of individual social disadvantage must also be related to unequal business opportunities as a result of discrimination suffered.

Another criterion the SBA reviews is the economic net worth of the disadvantaged owners. Net worth, after exclusion of an individual's equity in his or her primary residence and the applicant business, may not exceed $250,000 and $750,000, respectively, for the 8(a) Business Development Program and the Small Disadvantaged Business (SDB) Certification Program.

The 8(a) Program offers a broad scope of assistance to the socially and economically disadvantaged firms, including both business development assistance and eligibility for set-aside federal contracts. The 8(a) Program, which has been in existence since 1969, has become an essential instrument in helping socially and economically disadvantaged entrepreneurs gain access to the economic mainstream of American society. SBA has helped thousands of aspiring entrepreneurs over the years gain a foothold in government contracting. Participation is divided into two phases over nine years: a four-year developmental stage and a five-year transition stage. In fiscal year 1998, more than 6,100 firms participated in the 8(a) Program and were awarded $6.4 billion in Federal contracts.

While the 8(a) and the SDB Certification Programs are, perhaps, SBA's most recognized programs, additional agency initiatives have been developed making business opportunities and economic independence a reality to minorities heretofore denied access to the mainstream economy. In 1997, the SBA began its Welfare to Work Initiative to link small business owners looking for job-ready workers with organizations that train welfare recipients and provide entrepreneurial training to those who wish to start their own businesses. The goal was 200,000 pledges to hire job-ready welfare recipients and/or provide entrepreneurial training. The Initiative has been very successful, with the latest number of pledges and training reaching more than 215,000. Most of the recipients were either socially or economically disadvantaged or both, with minorities overwhelmingly represented.

Another SBA Initiative reaches out to the Native American community to help combat a history of being discriminated against as a result of maintaining ties to a traditional lifestyle. One of the primary responsibilities of SBA's Office of Native Affairs, in partnership with SBA's Office of Business Initiatives, is to support and manage seventeen Tribal Business Information Centers (TBICs). TBICs are partnerships between SBA and Native American Tribes or Tribal Colleges and are located in seven states (Arizona, California, Montana, Minnesota, North Carolina, North Dakota and South Dakota). They offer access to up-to-date technology and resources libraries as well as practical, culturally appropriate guidance at accessible reservation locations. In 1999, the TBICs provided entrepreneurial development assistance to 3,951 clients, provided 8,433 hours of counseling, held 291 workshops, assisted in the completion of 196 business plans and 136 loan applications, and were instrumental in the start-up of 212 new businesses.

Individuals experiencing racial discrimination or social and economic discrimination are often located in distressed areas. SBA's One Stop Capital Shops target these areas of high unemployment and pervasive poverty whose inhabitants are usually members of minority groups. SBA's One Stop Capital Shops provide a broad range of services to these highly underutilized business zones (HUB Zones) and Empowerment Zones including credit counseling and business development assistance. In 1999, One Stop Capital Shops served over 53,000 clients, including 18,000 Hispanic and 12,000 Black clients. Government assistance through the use of incentives to revitalize these "New Markets" areas is essential to break down continuing decay and offer hope for economic growth and prosperity for residents of these communities. The elimination of racism and discrimination takes more than outreach to those experiencing this form of prejudice. There must also be outreach to the established institutions to assist in bringing about change. The SBA Office of Capital Access has been working with lenders participating in the 7(j) Small Business Loan Guaranty Program and the Microloan Program. By targeting non-bank lenders who have a more accommodating posture towards the small business market, particularly lenders who are located in or near economically distressed areas, SBA expects to facilitate an increase in the number of minority, low-income, and women small business borrowers. In addition, this effort will promote further economic revitalization and development in low and moderate-income communities and rural area across the United States.

Illustrative proof is the Microloan program, where nonprofit organizations have been making SBA-guaranteed micro-loans from under $100 to $25,000 to women, low income individuals, minority entrepreneurs and other small businesses that need small amounts of financial assistance. Nonprofit organizations have also served as intermediaries to assist women borrowers in developing viable loan application packages and securing loans.



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Race, Racism and American Law