Over the last 2 or 3 years, the amount of State and municipal work that is “Set a Side” has gotten out of control. “Set A Side” simply means that you cannot bid on the project unless your business is “small”, minority owned, female owned, owned by a handicapped person or a veteran. In theory this sounds very noble and altruistic to award business to such suppliers. After all, it’s a good thing – right?
Here is who these policies harm when they get so out of control and QUOTAS are mandated by the politicos:
1. They harm the TAXPAYERS. Why ? Because the taxpayer pays much more for printing. There are not enough “set-a-side” suppliers that can provide the thousands of types of printed products without them also sub-contracting and putting a mark up on it. Or, even if the business has the equipment, they operate in a non-competitive environment, which always results in higher prices! Price is no object when quotas need to be filled, and yet in the meantime 42 of 50 States are operating in the red this year-and considering how to make bankruptcy legal.
2. They harm society by BREEDING CORRUPTION. We once lost a nice multi-year contract that was converted to a set-a-side contract when it expired. I was told by the State Procurement official, that “there are quotas to fill”. We had done a great job for over 5 years and yet were left with no chance to bid. A week prior to bid opening, I received a phone call from a “set-a-side qualified” print broker who wanted to subcontract the job to us. I refused, since that was illegal according to the bid specs. He laughed and said he would certainly find 10 printers that would print for him. I told him to enjoy his stay in the state penitentiary.
3. They harm all the employees who work for “non-set-a-side” owned companies.
What about the employees who are not working for a “set a side” company? What about their desire and willingness to work hard and earn a living? They get harmed by enjoying less overtime, having to work reduced work weeks or having wages frozen: because revenue has decreased at their company.
Projects from the private sector are always awarded on the basis of price, performance, value added and quality. It is ludicrous to award them on the basis of class, race, gender. It is another example of a good intention gone awry. It provides no societal or economic redeeming value/benefit, it harms legitimate businesses, and breeds corruption. Our state and federal governments are in crisis situations with their budgets. It’s about time time we got rid of this wasteful and corrupt practice.