Overlooked The Asian American Contractor Experience by alicejenny


the AsiAn AmericAn contrActor experience
          DiscRiminatiOn can bE
          subtLE but PERVasiVE
   As an Asian American business owner, I face
challenges that many other business owners do not.
    My company has been in business for over
   twenty–five years. Over those years, I have on
 numerous occasions experienced racial comments,
condescending looks and conversations, hundreds of
   unreturned phone calls to general contractors,
  not being notified of bid opportunities, and not
   being awarded work even though I knew my
         company was the lowest bidder…

  …taken together, these experiences represent a
   pattern of subtle, but persistent discrimination.


                  ISBN 1–932526–46–3
                                   abOut us

      he Asian American Center for Advancing Justice (Advancing Justice) is a
      leading Asian American civil rights and social justice organization comprising
      four equal and independent affiliates: the Asian American Justice Center
(AAJC), Asian Pacific American Legal Center (APALC), Asian American Institute (AAI),
and Asian Law Caucus (ALC). Its mission is to promote a fair and equitable society
for all by working for civil and human rights and empowering Asian Americans and
Native Hawaiians and Pacific Islanders (NHPIs) and other underserved communities.

Each affiliate’s staff has valuable expertise and deep experience. AAJC is one
of the nation’s leading experts on issues of importance to the Asian American
community and has enacted a sweeping range of programs on critical national
concerns. APALC is the nation’s largest legal organization addressing the needs of
Asian Americans and NHPIs by advocating for civil rights, providing legal services
and education, and building coalitions. AAI is the Midwest’s leading pan–Asian
organization dedicated to empowering the Asian American community through
advocacy, research, education, and coalition building. ALC is the oldest legal
organization in the country defending the civil rights of Asian American and
NHPI communities and focuses on the needs of low–income, immigrant,
and underserved communities.

While well known in their individual spheres for their work and expertise,
the affiliates of Advancing Justice have come together to build a stronger, more
cohesive regional and national civil and human rights infrastructure for the Asian
American community. We use our resources to provide valuable information to the
community, work to address more issues in more places, impact a greater number
of public debates, and help the voices of Asian Americans, NHPIs, and other
marginalized and underserved communities be heard.

Please email any questions regarding the report to:

This publication is available on the Asian American Justice Center website
(www.aajc.advancingjustice.org) and the Asian American Institute website
(www.aai.advancingjustice.org). Printed copies are also available upon request.
To receive printed copies, please send an email to publications@advancingequality.org.


      sian American businesses are among the strongest contributors to our nation’s
      economy. According to the U.S. Census Bureau’s 2007 Survey of Business
      Owners, the number of Asian–owned businesses increased 40.4 percent to
1.5 million between 2002 and 2007, increasing at more than twice the national
rate. Asian–owned businesses also generated $507.6 billion in receipts, a 55.4
percent increase from 2002.1

Despite these gains, Asian Americans continue to experience barriers to entry
and unequal access to business opportunities, particularly in the world of
government contracting.

To support Asian American participation in government contracting, the Asian
American Justice Center and the Asian American Institute have created the Asian
American Contractor Empowerment Project (AACEP), which seeks to strengthen
Asian American participation in public and private minority contracting programs
and build a record of evidence that accurately depicts Asian American participation
in these programs. To build this record of evidence, AACEP has commissioned
statistical research on Asian American participation and has uncovered real–life
stories of Asian American business owners to bring experiences of unequal treatment
and racial disparity to light.

This publication focuses on the real–life stories of Asian American business owners
in public and private contracting and highlights the diverse experiences of Asian
Americans in this industry. Minority contracting programs are increasingly under
attack and Asian American inclusion in these programs is sometimes questioned due
to the misperception that Asian American business owners do not face discrimination
or are not disadvantaged. Although not alone sufficient, testimonials are crucial
to illustrate the quantitative findings, to identify sources of discrimination, and to
counter race–neutral explanations for disparities in minority contacting programs.
Together, statistical research and anecdotal evidence show policy makers that
minority contracting programs are critical tools to level the playing field and help
minority entrepreneurs overcome barriers to full participation in our nation’s
economy. These stories range from experiences of outright racism and blatant
discrimination to examples of barriers to entry and ideas for improving the
government contracting process.

It is important to note that because speaking out on issues of racial disparity can
endanger their livelihoods, Asian Americans and other minorities are often wary of
offering stories of their experiences.

    “Census Bureau Reports the Number of Asian–Owned Businesses Increased at More Than Twice
    the National Rate,” U.S. Census Bureau, last modified April 28, 2011, http://www.census.gov/

     ii    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
Business owners fear being blacklisted in their industry, and because most
contractors are small businesses, they cannot afford a mark against their reputation
for fear of losing clientele. In creating this publication, AAJC and AAI conducted
nationwide outreach to create a level of comfort among Asian American business
owners so that they could feel safe sharing their stories with us. Many stories are
anonymous so that businesses can remain protected.

AAJC and AAI encourage Asian Americans, and all minority business owners,
to speak out about the challenges, barriers to entry, and discrimination that they
have faced. Without stories from the community to supplement statistical evidence,
the decision–makers who determine the fate of minority contracting programs will not
have all of the facts and may ultimately make decisions that adversely affect
our communities.

To that end, AAJC and AAI commend the Asian American business owners whose
voices are expressed in the following stories. We hope that by that by showcasing
their courage, others will be inspired to tell their stories as well.

For more information about the affirmative action programs at the Asian American
Justice Center and Asian American Institute, please visit our websites:

Asian American Justice Center: www.aajc.advancingjustice.org
Asian American Institute: www.aai.advancingjustice.org

The views expressed herein are solely the personal opinions and experiences of the
story collection participants, not of AAJC, AAI, or any of their affiliates.


     AJC would like to thank all of the courageous business owners who contributed
     their stories to this publication as well as the following individuals for their
     valuable assistance in collecting stories and preparing this publication:
Aarathi Haig, Alexandra Kogan, Alisha Saville, Ami Gandhi, Andrew Kang,
Bryan Hara, Jeanette Lee, and Viveka Ray–Mazumder.

This publication was made possible through the generous support of
the Ford Foundation.

                               tabLE Of cOntEnts
Asian Americans Experience
Discrimination in the Workplace . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Language and Cultural Discrimination Persists . . . . . . . . . . . . . . . . . . . . . . 3

Advocacy for Equality Still Needed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Difficulties in Obtaining Financing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Asians Not Considered the “Right” Minority . . . . . . . . . . . . . . . . . . . . . . . 7

Judged on Our Minority Status, Not on Our Merits. . . . . . . . . . . . . . . . . . . 9

Commitment from Top Management Needed to
Achieve Real Diversity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

The “Old Boy Network” Remains a Significant Barrier . . . . . . . . . . . . . . . 12

Enforcement of Minority Contracting
Percentage Goals is Needed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Disingenuous Prime Contractors Abound . . . . . . . . . . . . . . . . . . . . . . . . 17

Changes in Agency Practices and Public Policies are
Hurting Small Minority Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Implementation of Minority Contracting
Programs Needs Improvement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Unequal Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Politics Plays a Role in Who Gets Contracts . . . . . . . . . . . . . . . . . . . . . . 27

Severe Discrimination Against Afghan Americans in
Government Contracting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

  1     OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
              asian amERicans ExPERiEncE
            DiscRiminatiOn in thE wORKPLacE
Name: Eric Mah • Company: Gim Electric Co., Inc.
Industry: Specialty trades • Location: Midwest

        y name is Eric Mah, and I am the
        owner of Gim Electric Co., Inc.
        We are an Asian American–owned                 During one of my
electrical contractor founded in 1981. I will         weekly jobsite visits,
touch on a few experiences I have had in the
course of my business dealings that made clear
                                                       I was greeted by
to me that Asian Americans are not immune             stickers throughout
from discrimination.
                                                        the site that said
An occurrence that still troubles me to this day         ‘Japan Sucks.’
happened during the construction of the USG
building in Chicago. During one of my weekly
jobsite visits, I was greeted by stickers throughout the site that said
“Japan Sucks.” This made for an extremely hostile work site from that day on.
Although the stickers were eventually removed, I was subjected to racial epithets
and verbal harassment throughout the course of the project.

We are also locked out of projects that do not have any minority goals.
Most of our invitations are based on goal fulfillment, whether in the public or
private sector. In an informal survey of bid requests received in a two week
period in 2004, out of approximately twenty–two requests, all but three were for
projects that had goals.

Lastly, when we are invited to submit bids, we are sometimes impeded by late
drawings or no drawings. For example, I was once bidding for a large Chicago
institution. After three requests for drawings in two weeks, I was grudgingly given
the drawings for a bid on a Friday. After working through the weekend and
wrapping up the bid on the following Wednesday, I was told that the bid had
already been awarded.

These are just a few examples of barriers that we face on a daily basis.
I very much believe that Asian American business owners continue to
face discrimination.

                     LanguagE anD cuLtuRaL
                     DiscRiminatiOn PERsists
Name: Anonymous
Industry: Professional and technical services • Location: West

  n 2002, we started a financial systems implementation firm that is a minority–and–
  woman–owned business doing financial systems in California. We tried to get
  prime contracts, but the financial obstacles and competition were too much. We
would have to lower our price to a third of what we normally can ask for when
competing with the big companies. The only way to compete is to be a subcontractor.

In California, we no longer have the MBE programs, but in one city, we have
contacts – they know our business and sometimes give our name to prime
contractors when there are contracts that they want us to be a part of. Even though
the city recommends us to someone, the prime contractors still treat us differently.
We have to use a white male as president because when they hear our accent, they
don’t want to work with us.

About three months ago, a woman from a prime contractor called and left a
message for our president – a white male – to talk to us about being a subcontractor
for a city project. Our president is really just part–time now, so I called her to talk
about this subcontracting opportunity. When I talked to the woman, the first thing she
said to me was, “Oh, you have an accent.” When she heard my accent, it kind of
threw her. She didn’t want to tell me where she was from or the company’s name.

I didn’t even want to continue the conversation with her because the first thing she
said was, “Oh, you have an accent.” I still asked her what I can do for her, and she
said they were looking for a subcontractor, but that she had to get back to me later.
That’s all she said, and we never talked to each other again.

After I talked to her, I felt so bad – so degraded. I called our president and told him
that I don’t even want to pursue it as I don’t care for the money. The first thing they
see is that you’re a woman and you have an accent.

                                    After the call, I did my own research, and I found
     We have to                     out why she called. I called our contacts and asked
  use a white male                  what was going on. That’s when I found out that
                                    the city put out an RFP for a multi–million dollar
    as president                    system implementation for the city, which is the work
 because when they                  that we do. They know us and gave our name
                                    because they wanted us to be a part of it. But once
  hear our accent,                  the prime calls us, we have to have a white male
 they don’t want to                 representing us. Why do I have to hide behind
                                    somebody to run our business, when we are the
    work with us.                   ones who do the work? I don’t think that’s right.

  3    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
          aDVOcacy fOR EquaLity stiLL nEEDED
Name: Anonymous
Industry: Professional and technical services • Location: West

        couple of years ago, I was at a
        conference in Las Vegas at a mixer
        during a national supplier diversity
                                                       Equality is something
tradeshow. It was a national conference with                  that people in
corporates,federal agency representatives,             advocacy will have to
and large and small business owners. I was
talking to a supplier diversity representative          continue to push for.
from a corporate utility company. We were
having a great conversation about what
each of us was doing and started talking about the utility company’s marketing
initiatives for the upcoming year. At this point, one of his colleagues abruptly
stopped her conversation with some other folks, turned around, and pulled this
gentleman away from me. I was so speechless, I couldn’t understand it. She didn’t
say “excuse me, I need this person to answer a question,” or anything like that.
I was left with a very distinct impression that she didn’t want him talking to me
because I was Asian American. He left, he didn’t return or apologize, and that
was it. End of discussion. I can’t reconcile it. It was just so starkly different from
any other experience I’ve ever had.

While it hurt, I’ve moved on. Reflecting on the opportunities and successes
that I have had with other corporations in supplier diversity programs, it isn’t
one that I’m going to linger on. We do business on our merits, and we’ve built
great relationships.

Nevertheless, I can’t help wonder if some of these attitudes carry across the
general corporate space based on social and cultural backgrounds. It’s not
something that will change anytime soon unfortunately. These disparities are part
of our history and go back to the time our country was born. Because we are
a melting pot of so many different ethnicities and cultural backgrounds, these
incidents are going to occur. While it’s noble and valiant to say we want to
do away with discrimination, want equality across policies, and opportunities
for small businesses to grow, it’s something that we’ll have to keep monitoring.
Equality is something that people in advocacy will have to continue to push for.

           DifficuLtiEs in Obtaining financing
Name: Nyein Min, president • Company: Wunna Contracting Corporation
Industry: Professional and technical services • Location: Mid–Atlantic

       y name is Nyein Min and I am the president of Wunna Contracting
       Corporation (Wunna). I wish to share the following experiences to help draw
       attention to the discrimination that Asian American business owners such as
myself continue to face.

I am a civil engineer. Wunna is a contracting company that I started in 2007.
I came to the United States in 1986 from my native country of Burma, also known
as Myanmar.

I am a certified Disadvantaged Business Enterprise (DBE) through the Commonwealth
of Virginia’s Department of Transportation (VDOT). I worked for VDOT for eighteen
years. I decided to start my own company in 2007 because I saw how many
contracting opportunities there are through VDOT. I formalized a group of Burmese
engineers to do research work together and apply for government grants. I have
done some projects for the airport and highways.

As a business owner, I have faced discrimination in trying to get bank loans.
I feel that I am not getting the loans because I am Asian American. I show the loan
officers my balance sheets and accounting statements. Everything they need to
know is in my accounting statements and balance sheets, but they still won’t give
me a loan. I know my balance sheets and accounting statements are all accurate
because I have multiple accountants examine them for me. I know white business
owners who have the same qualifications as I do but they still manage to get the
loans. Without a bank loan I cannot perform more contracts I have received through
VDOT. To obtain and perform contracts there are manpower, equipment, bonding,
and management requirements. These requirements can be very costly and will
require financing. Right now I am able to get some loans from the Small Business
Administration (SBA). Without the SBA loan I wouldn’t have any financing at all.
The Department of Transportation also has a short term loan assistance program
that helped me start my business. I do not have any other connections for accessing
working capital.

One difficulty that minority contractors face is that large federal highway contracts
are often given to large unqualified corporations, such as Lockheed Martin and other
engineering firms. Lockheed then gives lots of subcontracts to small minority firms, but
these contracts are for very small amounts of money. Even minority firms that have the
capability to perform these contracts don’t get prime contracts.

  5    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
I had to apply for financing through the SBA
because I was unable to get loans from banks.             I know white
My white friends looked at the value of my
contracts and advised me that I shouldn’t have
                                                        business owners
any problems getting the necessary loans.              who have the same
When I went to the bank, I provided all of
                                                      qualifications as I do
the required paperwork but was still denied           but they still manage
the loan. I was told because I did not have             to get the loans.
enough years in the business, I did not have
enough equity in my business, and I did not
have enough cash in my balance sheet. The bank told me that they thought I was
trying to expand my business too quickly, and I responded that I see a lot of business
opportunities and thought it was a realistic time to expand my business.

The bank also told me that I don’t have enough cash flow in my business,
but I do not think white businesses would have the same problem with the same
cash flow as mine.

Because I am Asian American, I feel that the white companies don’t want me in
their territory. They often ask why I am bidding on these contracts, and I answer,
“Because I am qualified.” White firms with more contacts, more resources, and more
family businesses who have the same qualifications as me get a lot more contracts
than I do. The only time I am approached by white companies is if the project has a
DBE requirement.

I also felt discrimination on the Smithsonian Zoo project. I bid $620,000,
but Fort Myer, a white–owned firm, won the project with a bid of $820,000.
A bid depends on the technical proposal and the price proposal. The Smithsonian
told me that Fort Meyer’s technical proposal was better. I rebid with a revised
technical proposal, but was told the same reason. Fort Myer got a contract of
more than $1 million.

I believe my technical proposal was good enough. The person who created my
technical proposal has a Ph.D., and Fort Meyer doesn’t have anyone like that.
I was very surprised by the rejection and so was my lawyer. It is very expensive for
me to fight, especially because I will probably lose anyways.

Sometimes I am told that I should change the name of my company. But I tell those
people that Wunna is a Burmese name, and most importantly it is my son’s name.
Even if people don’t know what Wunna means, they can look and see that I have a
good business and that I am very qualified.

  asians nOt cOnsiDERED thE “Right” minORity
Name: Anonymous
Industry: Professional and technical services • Location: Midwest

        hen I started my firm in 2004, I got involved in the minority program.
        I did all the paperwork, checked all the boxes, started to attend the pre–
        bids, and started to talk to folks about it. What I realized during this process
was that while Asians were a presumptive minority, in the public’s eye, we were not
the “right” minority, especially not in the Chicago area. Along the way, I would go
to a bidder’s conference and talk to people about the leadership within the buying
departments and at the project levels and began to realize that there is a void of
Asian Americans at these levels – within state and local government, elected and
appointed officials, and department heads. We are not very well represented.
The general feeling becomes that you are statutorily a minority, but not the “right”
minority in this program.

It was less of me wanting an advantage and more about me not wanting to be at
a disadvantage because of a lack of representation on the decision making side.
It paints the picture that when you bid on work, the buyers, department heads, and
people who make decisions belong to a different minority group, so your bid is not
considered as it should be. In my experience while this is an issue, there are more
barriers on the partnering side.

Let’s say there’s a scenario where there’s a big deal with larger consulting firms.
They make partnering decisions on all the minority set aside program components
as to who they are going to partner with (which professional services firms), and
break it down into percentages. For example, to each of the professional services
firms they say, “You are going to do a certain type of work, and you are going to
get a certain percentage of the deal.” But then the bigger firms conclude that they
would like more Hispanic or African American minority representation over Asian
American representation because it would present better to the group awarding
the contract that is typically comprised of minorities other than Asians. So, we were
discriminated against more due to the structure of the selection process by big firms
from the beginning. So, if we got on the bidding team we would only get three,
four, or five percent. Or, we would have ten percent then find out later on that they
would come back to us and say they want to add a Hispanic or African American
firm and give them a piece of our percentage. Wait a minute, isn’t a minority a
minority? Apparently we aren’t the “right” minority.

  7    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
In 2005 and 2006 there was a program with
Chicago Public Schools (CPS) that we were a
part of. There were different documented goals for
different ethnic groups in the bidding process. African       Isn’t a minority
Americans had twenty–two percent, Hispanics had
around ten percent, and Asians had only two percent.             a minority?
When we went in on the CPS deal, we were given                   Apparently
the Asian component of two percent. The Hispanics
got ten percent and the African Americans received              we aren’t the
twenty–two percent. This was CPS as a whole and not           ‘right’ minority.
determined by school demographics. This put our firm
at a complete disadvantage and is another example of
Asian American discrimination.

Barriers within the minority program still exist to this day. Recently, we were on a
deal where our piece was literally cut in half because the prime contractor felt they
needed to have a Hispanic firm represented. It happens, and it has happened
pretty frequently. We feel disadvantaged from these partnering firms and how they
perceive the team makeup should be.

Lastly, there were times where we would just not get on a team because they
already had an Asian firm represented and did not need another one. Race is never
a positive for Asian–owned firms in the selection process. We actually get reduced
or bumped out because of it. We are perceived to not have any decision making
power within influential positions. It all ties together to the central theme of lack of
representation. I am giving a very different view of how lack of representation affects
an Asian–owned business. It’s obvious when you hear it, but it’s not obvious how the
mechanics work. We are successful as individuals, so no one wants to rock the boat
or jeopardize their success. Just because we have been successful in the face of
these struggles, this does not minimize these hurdles that do exist.

              JuDgED On OuR minORity status,
                    nOt On OuR mERits
Name: Ernie Wong • Company: Site Design Group, Ltd.
Industry: Professional and technical services • Location: Midwest

  am the founder and principal of Site Design Group, Ltd., a landscape
  architecture and urban design firm in Chicago, Illinois. As a professional services
  firm, eighty–five percent of our contracts come from the City of Chicago and
surrounding municipalities. The minority contracting program has served us well;
however, over the last few years I’ve noticed a particular trend. Though we have
won numerous national and local awards for our work, Site Design Group is
solicited for governmental contracts only when the quota needs to be met. We are
solicited for our minority–owned business status, not for our accolades.

This reality comes into sharp focus when the topic turns to private contracting work.
Non–governmental, private contractors – who have no minority goals – don’t
include us in their pool of potential professional services firms, though many other
businesses included in the pool are in our peer group. When we call to try and get
in the pool for private contracts, we seldom get a call back.

I would love to have a better balance in Site Design Group’s work – not only would
diversifying our portfolio expose us to new opportunities, but it would make our
                                        business more financially sustainable.
                                        The often extensive governmental payment
       My hope is that                  timeline means we often struggle to balance
  minority and women–                   our books. For example, we are still waiting
                                        for payment on a job completed in 2008.
      owned business
      programs pave                      There isn’t much external support for minority–
                                         owned professional services firms in the
     the way for more                    City of Chicago. Such support would allow
    minority inclusion in                minority businesses to not only gain jobs,
                                         but to thrive. My hope is that minority and
     private and public                  women–owned business programs pave the
    opportunities alike.                 way for more minority inclusion in private and
                                         public opportunities alike.

 9     OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
           cOmmitmEnt fROm tOP managEmEnt
            nEEDED tO achiEVE REaL DiVERsity
Name: Clarence Low, president • Company: Byte Technology
Industry: Professional and technical services • Location: West

     yte Technology is a web design and development company with offices in
     Monterey, California and Denver, Colorado. Since 2001, we have worked
     primarily in the private commercial sector, with small businesses, start–ups,
non–profits, academic institutions, and corporate divisions such as the University of
California and General Electric Analytical Instruments (GEAI).

Our Experiences
Within my own experiences, the Asian business community hasn’t had the track
record in legislation and policy as other minorities have had, like the African
American and Hispanic business community, and so in many ways, I think we’re still
in that space where we continue to face challenges as being perceived as a “model
minority.” Overall, in terms of general affirmative action, I think it’s still something that’s
incredibly important to maintain. Having said that, I believe that the opportunities
and successes in contracts that we’ve gotten from larger corporations are a direct
reflection of the relationships we have built, our professionalism, and our capabilities.

For example, when GEAI was looking for a web developer that specialized in
building Chinese websites, the Marketing Director reached out to the Denver
Asian Chamber of Commerce, and through a referral from the Chamber, we were
able to get a meeting with the Marketing Director for the project. At the meeting,
we showed her our content management system for Chinese websites and other
multilingual sites, and shortly afterwards, we secured a contract for the Chinese
website. This opportunity later expanded to other languages and other projects.
It has been a great fit, and we really enjoy working with GEAI. It is this cultivation
of the relationship that is really rewarding for us to be a part of. A small job turned
into a much greater relationship which grew from that one meeting.

We have had a similar experience working with the Naval Post–Graduate School
(NPS) in Monterey, California. Over the years, we have done quite a few projects
with them. They typically have been spot purchases by the procurement agents.
Spot purchases are sole source awards that can be given if the purchase falls
under a certain dollar threshold. We have a very strong brand in central coastal
California, so a lot of people know us and the quality of work that we do. NPS
called us because they knew us from other academic circles. We continue to
maintain our relationship with NPS, so whenever they need anything, they call us.

Challenges in Public Contracting and Recommendations for Outreach
Despite these specific successes, we have still struggled with working directly with
procurement agents at federal agencies. Those relationships take a lot of time and
financial investment to develop. For a small business, that’s a really hard nut to crack

because of the time and expense needed to do so. It takes almost a dedicated
resource to pursue that route – especially if you don’t have an office in DC to
engage with the agency folks. We still have to keep payroll going, keep the lights
on, and keep cash flow going. So, while we have looked into it in the last couple
of years, it still isn’t a realistic or feasible strategy to go after new business in that
federal space.

With regard to outreach to the Asian business community from the federal agencies,
I think there is still value in outreach from agencies, and for many of us, we can look
at the agency websites and FedBizOps and sign up for notifications, but that doesn’t
help navigate how to get your foot in the door. If an agency is genuinely interested
in getting Asian American businesses into the federal space, there has to be follow
up and follow through. Businesses that are new to this space do not have past
performance to demonstrate federal experience. If you can’t show past performance,
you can’t get your foot in the door. So instead of just outreach where information
is provided, making an extra effort to help businesses build past performance
would be better. Maybe it looks like a protégé/mentor program where the agency
provides mentorship for a handful of companies that can do a few discrete projects
to demonstrate performance. Businesses can take on a discrete executable in order
to get experience, demonstrate past performance, and eventually take on bigger
projects. I would love to see opportunities that wouldn’t take more than thirty to forty
percent of a company’s resources. Over the course of four or five years of developing
relationships and referrals, the company can grow and add value to the agencies as
well. Developing relationships on a granular almost 1– to –1 level takes commitment
and resources too, but by being able to start small like that, to develop credibility
and success stories on both sides, I think both parties would greatly benefit.

Why Diversity Falters Without Government Mandates
I’ve looked into doing sub–contracting work with prime contractors as well,
but haven’t found a fit. In the private sector, the challenge is how to work as a
sub for a large prime. A large prime has a full spectrum of resources to do large
campaigns, so I haven’t figured out how a small business partners with the prime to
do a piece of the work that they already do. Why would they work with us other
than the fact that we may be able to satisfy the
client’s goals of working with minorities?
But private industry has to have that goal.                If top management
Private companies are less beholden to
minority contracting requirements than public             believes in working
agencies because they don’t have to report                     with minority
how they spend their money. Over the years,
I haven’t seen that it is important to the                    businesses and
private corporations to develop their diversity             diversity is part of
programs because it’s not a mandate.
If top management believes in working with                the corporate belief
minority businesses and diversity is part of the             system, then we
corporate belief system, then we would have
more opportunities. This is something that I’ve             would have more
only seen in rare cases, but I’d love to see                   opportunities.
more of it.

 11    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
             thE “OLD bOy nEtwORK” REmains
                  a significant baRRiER
Name: Anonymous
Industry: Professional and technical services • Location: Mid–Atlantic

       e are a small minority–owned and SDB certified business in Maryland.
       We provide information technology products and services mainly to the
       federal government, the State of Maryland, and some local governments.

I strongly believe that relationships are a very important factor to be successful
in government contracting, both at the federal and state level, especially at the
beginning when you initiate business. Compared to the majority of white Americans
who have had relatives and friends in the government sector and professional fields,
we don’t have those kinds of relationships. Our parents and community have been
more “mom and pop shops” and are not involved in the professional field.

We have the same capabilities and qualifications. We perform well, but without
the relationship, it’s very difficult to get our foot in the door. Once we have our
foot in the door, then we can develop the relationship and be successful. The SBA
8(a) program and state and local MBE programs have helped us get our foot in
the door. For us, however, it takes time to build relationships because so many of
the government contracting people are ex–government employees or ex–military
personnel. They all know each other. They have that old buddy network; that’s the
kind of relationship we’re talking about.

For example, a couple of years ago a large prime contractor was awarded a
government contract and because one of my friends was on the proposal team
for the contract, I became a subcontractor. Without the relationship of this friend,
we would have never known who the prime contractor’s team members were.
Unfortunately, this friend later got into a fight with the prime, and he was taken
off the proposal team. I didn’t have my own relationship with the prime, so as the
contract continued, I had less of a say. Originally, we had fifteen positions on the
contract, but by the time of award, we got reduced to ten positions. Then, because
I wasn’t involved that much with the actual players at the prime company or the
government agency, we only ended up getting six positions.

I don’t blame anyone but myself because I didn’t have a relationship. I went to the
award party and all the subcontractors were all the prime’s friends and buddies.
Without my friend, who was in the old buddy network, I only got minimum
opportunities. By the time my friend got kicked out, we already had teaming
agreements and subcontracting agreements, they couldn’t get rid of us, so they just
gave us minimum opportunities. Those old buddies have been around so many
years, they know each other by first name, and I just met them a few times – that is
the relationship difference. They have a much tighter relationship than me, so they’re
going to get more of the work.

Now we are trying to rebuild the relationship. It will take time. Currently, I’ve
assigned this relationship mostly to my project manager and customer service
manager – two white women with government relations experience – who can
create a better relationship than me. I put them in charge of building the relationship
with the primes. The old buddy network is hard to penetrate. It’s better for me to
walk away so I can focus on what I’m good at and leave it up my project managers
to develop the relationship. I don’t want to feel discriminated against and made to
feel like I am socially disadvantaged.

Asian American Business Owners Still Face Language and Cultural Barriers
In addition, there are a lot of cultural and language barriers that inhibit Asian
Americans from fully participating in the government contracting world. That’s why
the 8(a) and MBE programs are important to us.

I came to the United States from Korea when I was nineteen, and I still experience
language barriers and cultural differences that I have to work on every day.
Based on that, compared to majority white American society, we are still socially
disadvantaged. It’s not that people can’t speak English. English is not their native
language, so it is hard to communicate comfortably at a high professional and
social level. In American business, you have to do the socializing to make the
relationship; go to happy hours, conferences, and events. We don’t speak the
language that well, so we don’t do the socializing well. I try to educate other Asian
business owners on how to be a better communicator. But it’s not easy to teach.
Somehow, in my culture, people have come to view sales and business development
as negative. Learning confidence, communications skills, and the art of sales and
business development is not easy for them.

                                  I have been fortunate because Maryland has a
                                  very strong MBE program that has a mandatory
     I know I need                goal. If there is a mandatory goal, they have no
    to stand up for               choice but to pick the MBE certified company,
                                  and I have a much better chance. Without that
      what’s right,               program I probably couldn’t have gotten into
     but I just walk              government contracting. I know there are some that
   away sometimes                 abuse the program, but the program really does
                                  help us. Compared to commercial industry, Asians
   because it is too              and others have a better chance in government
      expensive to                contracting. Commercial is much worse and is much
                                  more relationship driven. In the commercial sector
        stand up.                 there is no regulation, they don’t have to go to a
                                  minority–owned firm; it’s all about the relationships.

 13    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
Small Businesses Lack Support
As a small company doing business with the federal government, if something
goes wrong, there is not much we can do. Large business can protest and
the agency doesn’t care very much, but when small companies protest,
they remember. I’ve never protested, but if I do it, it means I don’t want to do
business with that customer anymore.

I have a claim from several years ago with the Department of Justice (DOJ)
for not paying us for work we completed on a contract. We had a form fixed
contract, and we were getting monthly pay by hours expended. We did all the
work and provided everything requested, but we were running late on the
project report. Because of this delay, DOJ did not give us our final payment
for close to $100,000.

However, it was a mutual delay because DOJ was moving the schedule. We tried
to get the issue resolved on our own but we couldn’t. The Alternate Contracting
Officer’s Technical Representative (COTR), who was in charge, left the agency.
Also at this time, the agency was being reorganized. I felt that if my report was
late, then deduct the amount of the damage due to the delay from the final amount
and pay us the difference. I tried to talk to them but they wouldn’t respond to me.
We sent an invoice, but they said nothing. They didn’t issue a contract default
or any other legal statement. All we received was a letter from the contracting
specialist that we didn’t fulfill the requirement. We finished the project, and they’re
using our product right now. They didn’t come up with any resolution or say that
we defaulted, they just ignored us.

I tried to talk to GAO, and I contacted the SBA. Then, someone from SBA
introduced me to an SBA Customer Service Representative. These are retired SBA
people assigned to an agency to act as a mediator. Our representative set up
a meeting with DOJ and their legal counsel, but the DOJ person didn’t show up.
After a couple of meetings, that was the end of it. The representative couldn’t do
anything. The SBA wasn’t able to help me any further. I was going to contact an
attorney, but I didn’t because it was too expensive to pursue (since the amount
was less than $100,000). I know that our three engineers finished the work,
and we confirmed it, but nobody wanted to do anything about it. Also, if I took
legal action, I would be on their “blacklist,” so I just walked away. I know I need
to stand up for what’s right, but I just walk away sometimes because it is too
expensive to stand up.

Nevertheless, despite all this, I’m still optimistic and happy with my business
because federal contracting is an exciting and challenging field. I really enjoy it.

        EnfORcEmEnt Of minORity cOntRacting
             PERcEntagE gOaLs is nEEDED
  Name: Anonymous
  Industry: Professional and technical services • Location: West

        e are an engineering consulting firm established in 1987. Since 1991,
        we have worked in federal contracting, with the majority of our business
        dealing directly with federal government or indirectly as subcontractors.

The majority of our contracts are with DOE and DOD. We also have contracts with
EPA and FHWA. We are a minority–owned business that graduated from the SBA
8(a) program in 1999. Over the years, we have relied on our reputation to continue
to win contracts. Currently, we are in a bit of an awkward place because we are
too big to be a small business but too small to be considered a large business.

As far as being Asian American, as long as we are included in the minority
category, I think the minority contracting programs are very helpful. Asians are really
small in number, and we are still being discriminated against.

There are a couple of issues that small and minority–owned businesses face in
federal contracting that need to be addressed. First, even though the government
puts percentage goals for small and minority–owned businesses in the large open
competition contracts, large contractors will usually use small or minority–owned
businesses to get a contract, but once they win the contract, they’ve never given the
small or minority–owned business any real work. There is no measure to enforce
the percentage of goals to be met during contract performance. This has happened
quite often to us and other small minority–owned businesses. A prime contractor will
bring us in on teaming to win the contract, but then after they win, we’ll never see
them again.

Unless we know the company and know that they are honest and sincere, we are
always very careful teaming up with other businesses. Even other small businesses
have done this to us. We teamed with a veteran–owned business to win a contract;
they kept us on the contract for only one year and then took over the contract and
pushed us out. In talking to other small businesses, this is a very prevalent occurrence.

 15    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
This is an area where the federal government could help us – somehow enforce the
percentage goals throughout the contract performance period. Currently, there is no
one in government that you can talk to. Despite the percentage requirement, there is no
penalty for not fulfilling that requirement. Thus, there is no consequence and no way to
enforce. In the end, large businesses are only using small businesses to get in the door.

      This is an area where the federal government could
       help us – somehow enforce the percentage goals
          throughout the contract performance period.

Second, when the federal government cuts back on its contracting staff, they will
lump many smaller contracts together into a larger contract to be bid out to a larger
contractor instead of having those available for small or minority–owned businesses.
They give the contract to a large contractor and expect the prime to share it with
small and minority–owned businesses. For example, ten contracts for $5 million
each get lumped into one $50 million contract to give to a large business. It saves
the contracting office time, but then it’s up to the large business to give some portion
to the small and minority–owned businesses. But, because there is no enforcement of
that obligation, small and minority–owned businesses lose that opportunity, and we’ll
never get it back. Ultimately, the portion of contracts that go to small and minority–
owned businesses gets smaller.

Some agencies are better at monitoring than others, but overall these incidents
happen today on a regular basis, and they haven’t been addressed. We need
enforcement and monitoring from the top.

      DisingEnuOus PRimE cOntRactORs abOunD
Name: Anonymous
Industry: Specialty trades • Location: Midwest

       y company is an Asian American, woman–owned, electrical contractor,
       certified minority–and–women–owned business enterprise by the City
       of Chicago.

The type of electrical work that we perform for public agencies is exactly the same
type of work that is required for private sector projects. We find it difficult to obtain
these private sector jobs, however, even though we are well qualified to perform
the work. Approximately five percent of our bids are for private, non–goal work.
Since there are no affirmative action goals in the private sector, general contractors
typically do not even contact us to give us an opportunity to bid on projects. If we
are contacted, the first question that we are asked is, “Are you certified?” which
indicates they are only calling us on goal–oriented work.

Sometimes developers and general contractors will conduct outreach and invite us to
bid on projects. This can take the form of an official outreach networking workshop,
or it might be a fax, email, or letter requesting bidders on a project. In the past few
years, I have found that my firm has received an increased number of solicitations
which I do not believe are bona fide. My firm will often be asked to submit a bid for
a project a day or a few days before it is due, or will be solicited for nonelectrical
work that my firm obviously does not even perform. I believe that these are mass
solicitations, and are an attempt by general contractors to disingenuously claim
that they reached out to minority and/or women–owned firms. These supposed
outreach efforts provide these general contractors with the pretext to choose different
subcontractors by claiming that they did not receive any adequate responses to their
“widespread” solicitation efforts.

On one occasion we picked up plans for a rehab project that was taking place
down the street from our office location. The developer had solicited bids in the
form of a fax to the Association of Asian Construction Enterprises (AACE), and since
it was in the area, we thought it would be a good job to bid on. We provided a
quote, and when following up with the project manager, were told that they were
still reviewing bids. We then never heard back from anyone on the status of the bid
even after numerous calls. We assumed we weren’t the successful bidder because
just a short time later we saw workers on the project. This leads me to believe that
the entire project had already been awarded by the time we received the plans to
bid and that the solicitation letter was just for show, after the fact, to demonstrate
how this company reached out for minority bidders.

 17    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
I was once contacted by a majority–
owned contractor to provide work on
a goal–oriented project. Instead of              Since there are no
providing plans and specifications to
provide a bid on even just a portion of
                                              affirmative action goals
the work, I was asked if it would be            in the private sector,
okay to just provide a labor rate with
a five percent markup. This contractor
                                                 general contractors
would even provide the employees to be         typically do not even
put on my payroll. We are a contractor          contact us to give us
that is ready, willing and able, yet, not
only are we not being called on the               an opportunity to
no–goals work, even on some of the                 bid on projects.
goal oriented work, we are offered only
pass–through deals.

On another occasion, we were contacted to bid on a private job. When I asked
when the bid was due, I was told it was due by the end of the next day. I said
there was no way we could provide a quote since at that point we didn’t even
have the plans in hand. We were then given an additional week to bid the job
by the president of the company. Apparently he didn’t tell his project manager,
because by the time we turned in the bid, they already had an electrical
contractor working on the job.

Though we are a prepared and capable contractor, I find that not only are
there few opportunities for my firm, but the opportunities we are sometimes
offered are disingenuous and are offered for spurious purposes. These are just
a few examples of the kind of attitudes and practices that Asian American and
other minority–owned firms have to face every day. To me, it is apparent that
discrimination remains a serious problem for Asian American–owned businesses.

changEs in agEncy PRacticEs anD PubLic POLiciEs
    aRE huRting smaLL minORity businEssEs
Name: Albert Shen • Company: Shen Consulting, Inc.
Industry: Construction • Location: Northwest

      hen Consulting is a program and project, design and construction management
      company, specializing in project/construction management services as well as
      civil, airfield, electrical, transportation engineering, and quality assurance and
control services. We specialize in private, institutional, and government programs
and have extensive experience in project delivery of large public works capital
infrastructure projects. Shen Consulting is a Washington state certified Minority
Business Enterprise (MBE).

Minority Businesses Suffer from Elimination of Affirmative Action Programs
In 1998 Washington State Initiative 200 (I–200), also known as the WA State
Civil Rights Initiative, eliminated all race and gender based preferences in state
and local government. This wiped out all affirmative action programs and there
are now even greater disparities with minority contracting during this economic
recession. Government agencies that actually want to see more minority business
contracts have no leverage to get primes to achieve any diversity goals, let alone
a ten percent minority business goal. As a minority–owned business, when you
propose on projects, you just cannot compete with the big white–owned companies.
I’m fortunate enough to have relationships, but other minority–owned engineering
companies that I know have to kick and scream to get attention and the big primes
just don’t care because they are trying to keep their own employees busy.

There was one instance where a company asked us to provide them with a
scheduling expert. I agreed, and finalized someone with that expertise.
The company then told me that they actually wanted to just hire the expert as their
own employee. This was my employee and they wanted to hire him away from
me. The company said that they didn’t want the contracting agency to see another
sub–consultant on the invoice. I was very familiar with the agency and knew that
they actually wanted to see more small and minority businesses brought in. When I
told the company this, and that bringing us in would only help their case, they said
no. They just wanted to hire our employee. I reported them to the city, and they got
some flak for it, but no serious reprimand. This is a prevalent occurrence nationwide.
This has happened to me at least twice where large firms blatantly told me they
want to hire my employee away from me and not subcontract with my firm.
Because there aren’t any requirements, they can basically do whatever they
want. So first, small and minority–owned businesses cannot compete because big
companies are competing for smaller projects, and second, primes aren’t really
putting in effort to hire us. They say they want to use more minority–owned,
woman–owned businesses, but it is a lot of lip service.

 19    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
In place of mandates, they now have “meet and greets” where the big players put
on programs about upcoming projects and invite the minority business community to
come out. I’ve gone to these things and 200 plus companies show up. But, in the
end they tell us that their teams are filled already – so what is the point? Why are
we here? I don’t go to those anymore. I get around this by going to contacts that I
already have, and they make introductions for me. Going to these large meet and
greets are really pointless unless you have an “in” with the firm. Our company has
built up a name finally, but I see so many other companies struggle to get onto these
large teams with no success. They sit there and give the primes their qualifications
and talk about their capabilities – and all the primes do is take the resume and
company name and nothing happens.

I can understand from the government side that they just don’t have enough work,
but the disparities are apparent. In Washington, the state DOT is the biggest budget
holder and when you visit the Washington State Office of Minority and Women’s
Business Enterprises website, you can see the data on utilization – out of a $600
million budget in 2010, only two percent of that work went to MBEs. Less than that
went to woman–owned businesses. Everywhere I go I hear horror stories about how
primes work around the system because there is no mandate for them to hire minority
contractors/consultants; only a legal mandate will make them do it. When you have
these initiatives that wipe out affirmative action, we are hurt even more.

Public Agency Processes and Procurement Practices are Not Sensitive to
Small and Minority Business Needs and Favor Larger Firms
Shen Consulting was fortunate enough as a small MBE
business to win a large prime contract ($4 million) from
a local agency to be the project management firm to
manage the final build out of a new $400 million rental
car facility for the Seattle Tacoma International Airport.       As a minority–
After we won the contract, the new Central Procurement
Office (CPO) of the agency began instituting new                     owned
procurement practices that had an adverse effect on              business, when
my business. Specifically, during contract negotiations
the CPO officer would not grant me the ability to bill            you propose
a mark–up on my sub consultants. I had three large                on projects,
firm subs on my team, and a standard markup of three
percent to five percent is standard industry practice.
                                                                 you just cannot
The CPO officer would not grant me any type of                      compete
markup whatsoever for my various subs with no specific
reasoning. As I learned later, the CPO officer granted
                                                                  with the big
mark–up allowances to other larger primes, but as a               white–owned
small minority business, I do not have the legal capacity          companies.
to fight legal battles with the large agency. The net
result for me was a potential loss of $120,000 –
$160,000 in total revenue.

During the peak of the recession, this same agency began asking all its hired
consultants via a written letter to “voluntarily” agree to a five percent hourly rate
reduction or discount on professional services. The CPO officer then took very

intimidating practices by threatening my firm and many other large/small firms who
had existing contracts. He threatened that their contracts would not get renewed
unless they agreed to the five percent reduction. Many firms acquiesced to the
agency’s request out of fear of losing their contracts. However, I decided to stand my
ground and told the agency they can try, but I’m not going to agree as we already
had a signed contract and that they would be putting their own project schedule at
risk in the event this disrupts my services to the agency. The agency did not seem
to care and told me that they would be willing to temporarily shut down the project
until these negotiations and analysis were complete.

Increased Competition from Larger Firms and Changes in Contracting
Methodology Hurt Minority Businesses
Due to the economic recession, many larger companies began pursuing the
smaller projects that were typically pursued by small and minority–owned businesses.
As a result, small and minority–owned businesses are out–competed and out–priced.
So, although the government benefits from competitive pricing, this makes it even
harder for small and minority businesses to get work.

The agency mentioned above started issuing smaller requests for future work –
three $750,000 Indefinite Delivery/Indefinite Quantity (IDIQ) contracts.2 Big firms
asked me if we’d like to be on their team to bid for the projects. I considered it,
but knowing that they were only for $750,000 and we would only get maybe ten
percent of that, I felt that we had built up enough of a reputation that we could bid
on these projects on our own.

Nineteen firms submitted, six were short–listed, and we didn’t even get on the short
list. I asked one of the project managers who I worked with whether we screwed
something up or missed a technicality on the proposal. He said we did not; our
proposal was fine. He said that we were just up against bigger companies with
guys that are much older and more experienced. Granted, I had people with thirty
years of experience on my team, and we’ve been managing projects of up to
$400 million, so I don’t really understand where they were coming from. I was left
with the take–away that it’s only a fair process if you’re a big business. In the end,
the agency picked the same five big companies they always use with not one of
the selected firms utilizing any MBE firms. The same companies keep getting the
same contracts, even though they’ve tried to diversify the process and diversify the
people coming in. If I–200 did not exist and these firms were required to have MBE
utilization then we would see more MBE utilization on these types of contracts.

In addition to increased competition, it is very difficult for small businesses to break
into the large mega projects because of changes in contracting methodology. In the
construction and engineering industry, many agencies are now pursuing Design/
Build contracts for mega projects instead of using the typical “low bid” method.3

     An IDIQ contract calls for an indefinite quantity of supplies or services during a fixed period of time.
    Low Bid Method: The agency hires an engineering company to design the project. Once the design
    is complete, the agency bids the project out for a contractor. In this method, the agency would have
    small business and minority business (DBE) goals in both the design and the build phases of work –
    unlike Design/Build where there is only one goal. Switching to the Design/Build method takes away
    another source of revenue for minority businesses.

    21     OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
In the Design/Build format, the agency will hire a designer to design up to
thirty percent of a project and bid out the rest of the design and construction.
For example, if an agency wants to build a massive bridge, they’ll design it
up to thirty percent and then bid that to a “design build team” that requires a
large–scale contractor to team with an engineering firm. Although this is typically
cheaper for the agency, there is only one minority business goal for the entire
contract which typically will be fulfilled in the construction phase of work.
Thus, minority businesses providing professional services are essentially shut
out of these large scale public works contract opportunities. I always see primes
send out advertisements that they have DBE opportunities for jobs like waste haul,
traffic control, and dust control, but not for professional services.

With regard to these types of contracts, Shen Consulting has been fortunate
because we’ve laid the groundwork and have gotten to know a lot of big
businesses from our work, so we have achieved to the point where large firms will
call me and want us on their team, but I see many other companies struggle.

Unreasonable Insurance Requirements on Small and Minority Businesses
Another hostility I’ve seen is in insurance requirements. Each government agency
puts huge amounts of insurance bonding on contractors and the engineering
community that makes it very cost prohibitive to pursue a project. For example,
I bid on a program for project management services where we helped the agency
manage the design and the construction. We did not design the project, therefore
we don’t have the liability, but the agency still forced us to get $5 million in
professional liability coverage. When I talked to the insurance industry, they had
never heard of this type of coverage, but the agency forced me to find it. I had a
hard time finding it, but at least I was able to get them to agree to cover the cost
of the insurance – $25,000 – $30,000 per year. I felt that they were inflexible
knowing that I was a small Asian–owned business and they were just not willing
to negotiate their terms and conditions.

The End Game
In the end, you have to get to know an agency project manager in order for
them to grant you the work. As Asian Americans, we’re still often perceived
as foreigners and are not taken seriously. When government agencies and
primes talk about minority businesses they have to think that it encompasses all
the minority groups, not just one. Changes have to be made among staff and
procurement people; they have to diversify too. It’s not an easy market.
Small and minority–owned firms are struggling and because of initiatives like
I–200 and increased competition from larger firms, doors are closing for us
and keeping new companies from even wanting to go through the public
contracting process.

      imPLEmEntatiOn Of minORity cOntRacting
           PROgRams nEEDs imPROVEmEnt
Name: Anonymous
Industry: Professional and technical services • Location: South

      minority–and woman–owned business based in Texas has concerns with
      the way some minority– and women–owned business enterprise (M/WBE)
      development programs work:

Many prime contractors have a PR/Marketing program rather than a
serious small business subcontracting program that involves real purchases from
M/WBE. Companies have opted to mentor M/WBEs with the caveat that there is
no intention/expectation of doing business between the mentor and mentee,
so this sets up the stage for avoiding transacting business with the minority and
women contractors. In addition, many front companies exist that get the subcontracts
instead of “real” certified M/WBEs. When the real M/WBE companies try to
do business with the large corporations, we are put into a database never to be
contacted again until the anniversary of updating the database. Trade shows
and conferences are another PR/Marketing program that have people sitting
in a booth, or sometimes no one is sitting in the booth, with no one wanting to
take brochures and business cards anymore; they prefer you send information
electronically. We know “B to B” business is based on building relationships,
so where are the opportunities to meet with the actual decision makers?
Many times the people manning a booth don’t know who to refer you to, and if
they do, there are no opportunities available when you contact the person.
When you build a relationship, two–way communication exists to share information
about the purchasing strategy, purchasing philosophy of the decision maker, and
providing the end user with market information and updates on new technology.

When M/WBEs graduate from the 8A or Small Disadvantaged Business (SDB)
program, some prime contracting companies stop doing business with us.
Our quality of product, price, and delivery services are stellar, but they need SDB
businesses to report their spending. They say, sorry, just being a minority or
woman–owned business doesn’t help our report as a prime contractor to the
government. The $750,000 net worth ceiling needs to raised or we will only
continue to spawn small businesses and never allow minorities and women–owned
businesses to grow to any substantial size. That is why 8A contractors partner to
sell their business to the next small business to stay in the game; to still make some
money or consult after graduation, if they were not able to diversify their business.

 23    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
Also, in some cases, prime contractors identify a specialty item with a high dollar
value to make available for bidding and then tell five companies, each meeting
different categories: SDB, Minority, Woman, Disabled, Veterans, etc., to go to the
only producer of the product to get a quote on the item. We all get the same price,
so whichever company marks up the product the least gets the business. This really
does not help develop or grow M/WBE businesses or further the intent of SDB and
M/WBE programs.

Access to more and affordable startup capital, working capital, contract financing,
capital for land and equipment, insurance and bonds, and real contract
opportunities to help grow M/WBEs are needed.

The government should require the prime contractors to report from one quarter
to the next:
• Number of M/WBEs they are doing business with;
• Dollar amount by each M/WBE, and explain if the dollars went up or down
  and why;
• Status of the M/WBE, sales, employees, number of locations, new products,
  or services; and
• M/WBE to M/WBE business transactions (drilling down the dollars from first tier,
  to second tier, and third tier level, for direct and indirect dollars spent).

I would suggest that the government unbundle appropriate contracts to give more
opportunities to M/WBEs instead of prime contracts that are global who are getting
most of the business. This is how to create jobs and boost the economy. Do business
with large companies that maintain
dollars and jobs here in the United
States and help their M/WBE suppliers
grow and expand their businesses. SBA,           I would suggest that the
SCORE, MBDA, and Department of                     government unbundle
Commerce should be doing more for
small businesses to work one–on–one              appropriate contracts to
with primes and government purchasing            give more opportunities
people. Business education is extremely
important, however if the major emphasis          to M/WBEs instead of
is on educational development and not            prime contracts that are
on purchasing, then we set M/WBEs up
for eventual failure. Putting the buyer and       global who are getting
end user with the sellers to identify mutual       most of the business.
areas of interest to do business will go
a long way in building relationships that
                                                This is how to create jobs
will spur business growth, increase taxes,       and boost the economy.
and promote real economic growth.

                           unEquaL stanDaRDs
Name: Anonymous
Industry: Professional and technical services • Location: Midwest

    am the owner of an engineering firm which provides engineering,
    construction management, and surveying services. We have been in
    business in Illinois since 1987.

We are a Minority Business Enterprise and have done several projects
over the past two decades for various city and state agencies, including
the Chicago Transit Authority, the Chicago Housing Authority, the Chicago
Park District, the Illinois State Tollway Highway Authority, and the Illinois
Department of Transportation (IDOT).

                                 We have done over fifty projects for IDOT in
                                 the past twenty years. After each IDOT project,
                                 IDOT assigns a quality rating to the businesses
   I believe that                with which it works. There are five possible
   as a minority                 ratings – “excellent,” “good,” satisfactory,”
  business owner                 “unsatisfactory,” and “poor” – and ratings
                                 previously given to a business by IDOT are an
   my work was                   important factor in whether or not to select that
   judged on a                   business for future IDOT projects.

  different, more                We completed a design project for a bridge
 severe standard                 for IDOT in June 2009. My firm received a
                                 rating of “poor” in September 2009 for its
 and that my firm                work with IDOT on this particular project.
  was evaluated                  Though I acknowledge that the work quality
                                 on this particular project suffered as a result of
   more harshly                  time constraints, I believe that a “poor” rating
     than other                  was unfairly harsh given the circumstances.
                                 I had fixed the problems as IDOT requested,
    firms would                  and believe that an “unsatisfactory” rating
     have been                   would have been warranted, and not a “poor”
   under similar                 rating. My firm has done over fifty projects
                                 for IDOT over the past twenty years and has
  circumstances.                 always received “good” and “satisfactory”
                                 ratings, and has never even received an
                                 “unsatisfactory” rating.

 25     OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
Based on my extensive experience working with IDOT and familiarity with IDOT’s
ratings, I believe that the “poor” rating my firm received on this particular project
was unwarranted. I believe that as a minority business owner my work was judged
on a different, more severe standard and that my firm was evaluated more harshly
than other firms would have been under similar circumstances. Furthermore, in my
experience, IDOT almost never gives “poor” ratings, and such a rating is effectively
punitive in nature because the ratings given to a business affect its chances of being
selected for future projects.

The consequences of the “poor” rating received by my firm for this project have
been severe. Approximately fifty percent of our projects are IDOT projects, and my
firm has done an average of one IDOT project every year. However, since receiving
the “poor” rating in September 2009, my firm has been unsuccessful in receiving
any additional projects from IDOT. We have been effectively shut out of IDOT
projects, and I believe that my firm was treated unfairly.

    POLitics PLays a ROLE in whO gEts cOntRacts
Name: Joseph W. Zhou, president
Company: Community College Student Insurance
Industry: Professional and technical services • Location: South

   n 2009, minority–owned businesses provided corporate America with
   $100 billion in products and services, of which sixty percent are sold through
   federal and state government agencies, or large corporations with federal
contracts and who are obligated to have set side “ten percent” business with
minority–owned businesses. All federal and many state governments also have
designated service offices whose purpose is to assist minority businesses to
work with federal and state government agencies. Often, these agencies call
themselves Small Minority Business Offices or Small Minority Business Advocates
within federal agencies.4 Ideally, if minority–owned businesses working with
large corporations or with federal and state governments go through these
offices, then everyone would be on the same level playing field to compete
fairly for the opportunities. Unfortunately in the business world, success is often
determined by who you know and your level of influence relative to everybody
else. For African American businesses, their strong supporters are often well–
placed in government agencies and have strong political support at local and
state levels, while other minorities like Asians and Latinos do not. So, we are
often left out of minority contracting opportunities.5

Many large national corporations often ask minority firms to register with
them as vendors to show how much diversity exists in their supplier base.
The registration process is often obscure, and small minority firms have to
jump through so many hoops in order to be registered, such as providing
information on previous experience, three to five years of CPA–audited financial
statements, proof of bonding, and certain amounts of business account cash
balances. This registration is what I call a “fishing license.” Theoretically, after
the minority vendor registration is received, all the vendors can supposedly go
to the river to cast their fishing lines and start fishing. In the corporate business
world, it is all about the RFP. Many large national corporations and large state
governments all have WBE/MBE coordinators, who are supposedly employed

  In many cases, management at these offices are consulted by government agencies, prior to issuing
  Requests for Proposal (RFP), on how to identify quality minority businesses that can participate in the
  bid process. Private corporations also consult these agencies for information on specific government
  requirements for minority business participation in order to win government contracts.
   Legally, a large private corporation must set aside a percentage of work (such as ten percent) for
   minority participation in order to secure federal or state contracts. In many instances, federal, state
   or municipal governments often set aside a certain percentage of contracts for small minority–owned
   businesses only. Where minority firms lack technical expertise, the government can encourage a
   “marriage” between a small minority firm and a large corporation to partner on a contract. However,
   in reality, minority firms are often pre–selected to join certain projects by the political establishment.
   Using Washington, DC as an example, some firms have exclusive contracts with the district, so
   that other construction companies must “marry” one of these companies in order to get bidding
   opportunities with the DC government. This is another way that Asian businesses are kept out of the
   process because of fewer pre–existing relationships with those in power.

    27   OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
to assist minority firms, help them explore opportunities to do business with
their respective companies, and at least to have these minority firms receive
the RFP.6 In reality, the WBE/MBE coordinator is barely interested in assisting
Asian minority firms seeking business opportunities with their company. In some
cases, they lack authority and resources. In other cases, their primary goal is to
bring in only certain minority companies with political influence in order to assist
their company to win more federal or state contracts. Whether or not an Asian
American firm has business opportunities with their company isn’t their priority.

Many small businesses, not just Asian American firms, often dream of doing
business with federal and state governments. In their eyes, a federal or state
government contract is like a Wild Alaska Chinook – fat and with a lot
of benefits. So, these small businesses register with the Central Contractor
Registration (CCR) or their state government. Unfortunately, without guides,
it is very difficult to find the right spot for fishing. The federal government can
give sole–source contracts to companies they believe can do the work,
meaning there will be no–bid contracts.

Asian American firms face so many barriers
when it comes to business opportunities,
partially due to their language skills – many
Asian business owners are first–generation
immigrants from non–native English speaking
countries – as well as cultural and linguistic                         Asians are often
barriers. Asian business enterprises often                           viewed as technical,
face a more uphill battle than other ethnic
groups. Additionally, outside of New Jersey,
New York, and California, Asian Americans                              and hardworking
lack political representation in most states.
In many states we do not have any elected
                                                                      employees, but are
Asian Americans in government, not even                                 often excluded
on city or school district boards. Asians are                         from management
often viewed as technical, dependable,
and hardworking employees, but are                                    or other leadership
often excluded from management or other                                    positions.
leadership positions. Even when one or two
individuals reach middle level management
positions, too often they are too concerned
that their non–Asian colleagues may think that
they are biased towards Asians.

    Many of the people working in these positions are African American. Theoretically, their mission is
    to advocate for minority business interests and help minority businesses do work with their respective
    organizations. In reality, it can appear that their function is to promote African American business
    interests only since they work heavily within the communities where they have strong existing
    relationships. Asian American and Latino firms are not as connected to, or sought out by, these
    coordinators and thus suffer in being awarded minority business contracts.

To protect their job security, they purposely give business opportunities to
others instead. When it comes down to business contract opportunities,
Asians are voiceless.

From a government buyer’s perspective, as long as they can pick up one or two
minority firms with strong ties to the political establishment to satisfy their political
superiors, there is no need to bring in an Asian American firm regardless of their
qualification. Sadly, we see this kind of behavior across the country in all levels
of government. It is not in the true spirit of the MBE/WBE program – it is political
cronyism and bribery.

My advice to Asian American business owners is to continue looking for
opportunities to do business with federal and state governments or large private
corporations. You may get a great business opportunity, and once the contract is in
place, you are assured to get paid. It is also good on your resume so you can go
looking for other business opportunities. But it’s like the Bandit Angelfish, or winning
a mega–million dollar lottery; you may not see an opportunity in your lifetime.
I would start to look in my neighborhood pond to see where I can catch many
smaller fish to feed my family first.

 29    OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
         sEVERE DiscRiminatiOn against afghan
         amERicans in gOVERnmEnt cOntRacting
Name: Anonymous
Industry: Professional and technical services • Location: Mid–Atlantic

Note: Although Afghan Americans are not classified as “Asian” with regard to
minority contracting programs, we include this story to highlight the difficulty in
proving social and economic disadvantage, despite individual experiences of
blatant and pervasive discrimination.

   am sharing this story in an effort to shed some light on the conflicting policies/
   programs within the federal government pertaining to the classification of Afghan
   Americans, and other Subcontinent Asian Americans, and how this has adversely
affected my business as an Afghan American female business owner, particularly
with regard to the SBA 8(a) program. I think this is a good case study showing that
legitimate small businesses are not able to participate and grow via the SBA 8(a)
set–aside program because of outdated social and economically disadvantaged
ethnic designations under the Small Business Act.

At the beginning of this year, my business partners and I applied for the SBA 8(a)
program in an effort to gain better access to the federal government contracting
market. “The 8(a) Program is an essential instrument for helping socially and
economically disadvantaged entrepreneurs gain access to the economic mainstream
of American society. The program helps thousands of aspiring entrepreneurs to gain
a foothold in government contracting.”7 As a minority (African American and Asian
American) and woman–owned small business, we were sure that we would not have
any challenges meeting the requirements for this program. The program states that:
    Under the Small Business Act, certain individuals are presumed socially
    disadvantaged: African Americans, Hispanic Americans, Asian Pacific
    Americans, Native Americans, and Subcontinent Asian Americans. An
    individual who is not a member of one of the groups listed can be admitted to
    the program if he/she shows -– through a “preponderance of the evidence” –
    that he/she is socially disadvantaged. For instance, an individual may show
    social disadvantage due to race, ethnic origin, gender, physical handicap,
    long–term residence in an environment isolated from the mainstream of American
    society; or other similar causes.8
At first review, we felt certain that Afghanistan was part of this list because we are part
of Subcontinent Asia; however, after we submitted our application, we were notified
that is not the case. According to the SBA, “Subcontinent Asian Americans are
persons with origins from India, Pakistan, Bangladesh, Sri Lanka, Bhutan, Maldives
Islands, or Nepal”9 and since Afghanistan is not part of this list, I would have to

   “8(a) Business Development,” U.S. Small Business Administration, accessed March 29, 2012,
   Preponderance of Evidence, 8(a) Program, Small Business Administration Letter, on file with business owner.

provide a preponderance of evidence to show that I am socially disadvantaged.
During this process, we conducted research to see exactly how Afghanistan is
geographically designated throughout the federal government. What we uncovered
was shocking because it appears that there are disparate lists of designations
throughout the government rendering Afghanistan in a grey area of countries without
clear regional designation.

                                                                                Small Business
     CIA World Factbook                 Department of State
 South Asia: Afghanistan,              South and Central Asia:               Subcontinent Asian:
   Bangladesh, Bhutan,                Afghanistan, Bangladesh,                  India, Pakistan,
    British Indian Ocean                     Bhutan, India,                 Bangladesh, Sri Lanka,
 Territory, India, Maldives,          Kyrgyzstan, Kazakhstan,                 Bhutan, Maldives
       Nepal, Pakistan,                   Maldives, Nepal,                   Islands, or Nepal12
        and Sri Lanka                    Pakistan, Sri Lanka,
                                       Tajikistan, Turkmenistan,
                                           and Uzbekistan11

Since my ethnic origin was not on the SBA “presumed” list of socially and
economically disadvantaged countries, I was faced with providing a preponderance
of evidence (to include personal experience and statistical data as supporting
evidence) to prove that I qualify as a socially disadvantaged individual: discrimination
in education, employment and business history as a result of my race, ethnicity,
and gender.

I provided a thorough narrative outlining situations of discrimination that I have faced
during my education and career which included discrimination against my gender,
ethnicity (particularly after 9/11), and race, and supported my personal experiences
with statistical data and facts showing that this is a widespread issue. Below is an
account of my experience post 9/11:

On September 11, 2001, I worked as a contractor for the Department of Army and
was on my way to the Army/Navy wing of the Pentagon for a 9:30 a.m. meeting.
I was fortunate to be running late that morning, and was waiting in traffic on the
highway, but I didn’t know that the ramp that I was awaiting to exit was completely
backed up because of the attack on the Pentagon, which destroyed the Army/Navy
wing of the Pentagon, the exact location where I was heading.

By the time I reached our main office in Rosslyn and learned of the attacks, I was
shocked and scared along with everyone else in my office. I prayed for my
colleagues’ safety and did my part to notify family members and friends of those
colleagues who were with me that they were safe. I left the office that day with
several of my colleagues whom I drove home since public transportation was shut
down. As I drove home, I felt scared, but also felt a sense of togetherness as a

   “South and Central Asian Affairs: Countries and Other Areas,” U.S. Department of State, accessed on
   March 29, 2012, http://www.state.gov/p/sca/ci/index.htm.
   Preponderance of Evidence, 8(a) Program, Small Business Administration Letter, on file with business owner.

 31      OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE
country – my country – in a time of crisis. Unfortunately, two days later, I was faced
with the horrible reality that this event had raised a sense of prejudice toward
people of Afghani descent and the Muslim religion.

When I returned to the office on September 13th, our office had tripled in capacity.
We were crammed together but were happy to share our space with our colleagues
who had gone through so much. Everyone was very friendly and helpful to one
another, and I felt like we were a family, until one of my colleagues let it be known
that I had originated from Afghanistan. By that afternoon, I began to notice random
people passing by my cubicle and whispering, “That’s her, she’s the one; she’s the
one from Afghanistan.” Whenever I would turn around to talk to them, they would
quickly leave and/or simply ignore my efforts to talk with them. Later that day,
a Lt. Colonel, with whom I had worked for two years, approached my desk
and asked me to take a walk with him.

We went outside of the building and around the corner to a spot on the wall where
there was graffiti written in Arabic letters. He asked me to translate what it said
because he feared that the building was tagged for an attack. I told him I didn’t
know because I don’t read or write Arabic or Farsi. He gave me a skeptical look and
asked me, “If you could read it, would you tell me what it said?” I was completely
shocked, but said to him “of course.” I then replied, “Wouldn’t I at the very least want
to save my own life and the life of the people with whom I work and have come to
call friends?” The whole experience was so sad, and it made me think how quickly
everyone had turned on me because of my ethnicity, even though I had nothing to do
with the attacks of 9/11. It was as if my relationship with everyone for the past four
years, and who I was as a person, had been forgotten and all that my colleagues
saw when they looked at me now was a person from Afghanistan, a terrorist.

The following Monday, I was leaving the office and as the elevator opened,
there was a Caucasian man in the elevator who must have assumed that I was
Hispanic, because as I entered, he said, “¿Cómo estás?” I told him I don’t speak
Spanish, and he asked me where I was from. For the very first time, I actually
paused and considered whether to
say that I was from Afghanistan, out of
fear for his reaction. But I decided that
                                                  …legitimate small
I wasn’t going to be ashamed of who              businesses are not
I am and told him that I’m American
but my family was originally from
                                               able to participate and
Afghanistan. As soon as I said that,           grow via the SBA 8(a)
he said, “Where is your badge?” It               set–aside program
was cold out, and I had my coat on.
My badge was tucked in my coat. I               because of outdated
showed him my badge and mentioned             social and economically
to him that I couldn’t see his either. I also
thought it was of note that he didn’t ask       disadvantaged ethnic
for my badge when he clearly thought           designations under the
I was Hispanic. His response was
“Let’s just put it this way, I’ll be a happy     Small Business Act.
person when you leave this building

and never return again.” I was so shaken and taken aback that I couldn’t speak.
I simply walked down the stairs to the garage and started crying. At the time, I
couldn’t understand where all this hate was coming from, and what I had done to
deserve such prejudicial treatment. As a result of this backlash, I was disheartened
but determined to turn this situation around. So, for the next few years I worked
very hard to prove that I was a valuable asset to the mission, but by 2004, I was
exhausted having witnessed little to no change in the attitudes of my colleagues, and
I made the decision to leave.

I substantiated my narrative with evidence showing that according to other federal
government departments, Afghan Americans face additional challenges due to
post 9/11 backlash. I provided evidence showing that as a result of the way
Afghan Americans and other people of Muslim origin were treated after 9/11,
the Department of Justice, Civil Rights Division launched the Initiative to Combat
Post–9/11 Discriminatory Backlash, created an assistance program for Federal
Protections Against National Origin Discrimination and Religion,13 with a focus on
people from Afghanistan and South Asian origins, and that in an effort to combat
this backlash, the U.S. Equal Employment Opportunity Commission (EEOC) released
reminders to employers stating:
      Anger at those responsible for the tragic events of September 11 should not be
      misdirected against innocent individuals because of their religion, ethnicity,
      or country of origin. Employers and labor unions have a special role in
      guarding against unlawful workplace discrimination.
      Title VII of the Civil Rights Act of 1964 prohibits workplace discrimination
      based on religion, national origin, race, color, or sex. At this time, employers
      and unions should be particularly sensitive to potential discrimination or
      harassment against individuals who are – or are perceived to be – Muslim,
      Arab, Afghani, Middle Eastern or South Asian (Pakistani, Indian, etc.).14
Sadly, after a grueling eleven–month process, we were notified that our 8(a)
application could not be processed with my application since I had failed to provide
enough evidence to demonstrate my individual social disadvantage based upon
ethnicity, religion, and gender. In summary, because my country of origin was not
on the “presumed” disadvantaged list, I had to provide an eleven page narrative
outlining severe discrimination that I faced as a woman, as an Afghan American
and as a Muslim. But, according to the SBA, it wasn’t enough. This entire process
has been disheartening, resource intensive, and very costly for a small business
such as ours, particularly in today’s economy. This has left me wondering how many
other small businesses have found themselves in this grey area and how long it will
take lawmakers to address how Afghan Americans and other Central Asians are
classified, especially in light of backlash since 9/11. Without presumed socially
disadvantaged status, proving social disadvantage is a very daunting hurdle to cross
for small businesses.

    “Federal Protections Against National Origin Discrimination,” U.S. Department of Justice, last modified
    August 2010, http://www.justice.gov/crt/publications/natorigin2.pdf.
   “Employment Discrimination Based on Religion, Ethnicity, or Country of Origin,” U.S. Equal
   Employment Opportunity Commission, last modified March 21, 2005, http://www.eeoc.gov/facts/

 33      OVERLOOKED: thE asian amERican cOntRactOR ExPERiEncE

     s illustrated through the voices of these courageous business owners,
     Asian Americans continue to face discrimination and other barriers to
     participation in government contracting. Asian Americans face both subtle
and blatant discrimination in public and private sectors, and are often overlooked
and underutilized. The “old boy network” remains a barrier to entry, as Asian
American businesses do not have the historical relationships that the larger majority–
owned companies in the public sector enjoy. In addition, Asian American business
owners continue to face language and cultural barriers that impede their ability to
compete effectively with majority–owned firms.

Asian American business owners also expressed that public agency procurement
practices have not been sensitive to small and minority businesses and that they tend
to favor large firms. This is evidenced by increased competition from larger firms due
to tough economic times, inflexible insurance requirements, and the persistence of
contract bundling.

Because most Asian American businesses are small businesses, they do not have the
capacity or the resources to legally challenge unfair treatment by prime contractors
or large government entities. Due to a lack of enforcement, minority businesses
are taken advantage of or dropped from projects once contracts are awarded.
These and other practices to exclude Asian Americans and other minorities from
effectively participating in public and private contracting are further exacerbated by
the fact that California, Washington, and Michigan have banned, or are seeking
to ban, affirmative action programs in their states. Legal mandates, enforcement
of mandates, and prioritizing of diversity initiatives at all levels are needed for
government agencies and prime contractors to truly commit to diversifying the
contracting industry and to ensure that small and minority businesses are hired and
retained to carry out the work to their full capacity.


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