Prop 16 facts on contracting

Prop 16 Lies on Public Contracting:

  1. “California ended its Minority and Women-Owed Business Enterprise (MWBE) program due to Prop 209 and only a few MWBEs regained public contracts. Many MWBEs closed and most procurement and subcontracting processes remain effectively closed to them due to Prop. 209.”
  2. “MWBEs have lost $1 billion annually in public contract awards.”

The truth:

1. The State is allowed to engage in good-faith affirmative action to promote MWBEs:

Ho-Voltage v. San Jose (2000): outreach programs that promote competitive bidding, bring down public costs, and help avoid discrimination are permissible under Prop 209.

Coral Construction v. San Francisco (2010): Prop 209 doesn’t categorically ban race-based affirmative action measures to help MWBE as required by the federal equal protection clause.

Prop 209 permits: race-neutral contracting preferences; inclusive outreach to MWBEs and OBESs; public credit for contracting officers and prime contractors who voluntarily increase MWBE utilization.

2. California has saved extra costs associated with preferential contracting:

A peer-reviewed study on CA Dept. of Transportation: saved $64 million ($1+ billion in 2020) from 98’ to 99’ due to Prop 209.

“After Proposition 209, the prices on state funded contracts fell by 5.6% relative to federally funded projects, for which preferences still applied.

The “$1 billion” of losses per year are not actually losses, but taxpayer dollars saved by avoiding preferential treatment.