Case Studies
THE CASE OF THE UNCIVIL SERVANTS
I'm a building contractor and my firm is on the verge of being awarded a major contract by a large Southern city. But there's a catch-we were told by the city that we must become partners with a minority firm in order to get the business. It's common knowledge that many of the minority-member politicians who control the city government have close ties to minority-owned contracting firms. Oftentimes these politicians receive kickbacks from their contracting "buddies." My fear is that I'll be expected to seek out the minority firm with the closest "connection" to City Hall (not the one that's most qualified) in order to land the job.
What's worse, because many of these minority firms exist on what amounts to handouts from the government, they have no incentive to develop competent building skills.
To turn this job down would threaten my livelihood. But to accept it would offend my conscience as a craftsman and Christian both. -J.B.
Christian Solution:
Our first reply comes from Marketplace Mentor Charles Tribbett, a partner with Abraham and Sons assets management firm in Chicago:
First of all, there's absolutely nothing unethical about city government requiring a certain portion of a contract to be set aside for minority businesses. This is a form of affirmative action that has become very prevalent in the last few years, not just in the South, but in major cities across the country.
In the past, minority businesses have had very little chance of getting a share of the work that flows through large, white-owned corporations. And this program is going a long way towards correcting that problem.
The other thing to remember is that you can't always believe the things you hear through the rumor mill. In most cases the minority-member politicians in "City Hall" administer these affirmative action programs out of principle, not out of greed.
Having said all that however, it is true that abuses do exist. Many minority firms have sprung up who do 100% of their business through "set-aside" money. And it's obvious that if you have to rely on set-asides, if you're incapable of winning business on your own merit, then chances are you're not very good at your job.
What's more, some of these minority enterprises are actually fronts, or "shell companies" organized by white corporations. Hire one of them and you won't be helping minorities out at all-you'll be lining the pockets of your biggest competitors.
If you suspect that any of this is going on in your particular situation-and if you have more to go on than local gossip-then stay away from it. I believe God honors those who avoid even the appearance of impropriety. And I can tell you that more than one company has been indicted in recent months for participating in the very situation you've described.
Besides, working with an illegitimate minority firm does a profound disservice to the ones who are on the up-and-up.
On the other hand, the fact remains that if you want to do any government contracting in the future, you're going to have to learn how to play the affirmative action game. So let me lay down some guidelines for playing it fair and square.
First, hire a legitimate minority company. It's ridiculous to think that competent, experienced minority companies don't exist-every city has them. You just need to get out there and find them. Look for companies who do a good percentage of their business with clients in the private sector.
Secondly, find one that's well-connected with City Hall. I'm not talking about "connections" in the sense of hiring the mayor's nephew. I'm talking about "connections" in terms of previous experience. If you can link up with a minority company that has completed successful projects for the city in the past, then it's obvious that they're likely to land more projects in the future. There's nothing unethical about that-it makes sense to give a good supplier repeat business.
If you can find a minority firm that meets those two criteria, then go ahead and work with them. The results may surprise you. You may find yourself entering into a relationship that is profitable and rewarding for all concerned.
Our next response comes from Steve Vasen, an Atlanta real estate developer who specializes in upgrading undervalued properties:
In 2 Corinthians 6:14, Paul tells us "do not be yoked together with unbelievers. For what do righteousness and wickedness have in common? Or what fellowship can light have with darkness?" I believe that this command refers not only to marriages-where it is most often applied-but to our business relationships as well. And that's why I would advise you to stay away from this contract.
As a real estate developer I've run into this situation many times, particularly with reference to zoning changes. Often a city council member will offer to be our advocate in the zoning hearings, but only if there's something in it for him and if he can do it behind closed doors. My experience has been that there is just no way to salvage a situation like that. As a Christian, there are certain opportunities you can't step up to. Period.
It's no different than what you tell our kids before a date-God wants us to enjoy ourselves, but only within the context of proper Christian behavior.
If I were in your situation, and if a joint venture partner had been recommended to me, I'd sit down with them and have a serious talk about objectives, about profits, about how the company operates. I'd want to make sure we're a team of horses pulling together, not in different directions. And if I didn't get the right answers, I would not do a deal with them.
If I suspected anything questionable, I would want an agreement in writing (a separate document from the joint venture agreement) that clearly stated what our ethical standards were. If I couldn't get a clear agreement, I wouldn't do the deal.
Now let's put the ethical ramifications of this situation aside for a moment. You are also worried about being compromised as a "craftsman." That's a separate issue, and it calls for a different kind of solution.
I happen to feel that just because your partner is not quite up to the job is no reason t back away from him. One of the objectives of these minority-hiring programs is to take people without training and skills and teach them what they need to climb the economic ladder. By identifying the strengths of your partner-and by compensating for his weakness-you can do our fellow man a genuine service.
For example, let's suppose I had a construction firm and was working on a mid-rise with a minority partner. It might well be that no one in his company has enough experience to supervise the actual construction. In that case, I would cover the supervisory duties with my own people. But I would ask the minority guy to select an assistant for training. That way, on the next project that comes along, he'll be able to pull his own, equal share of the yoke.
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