How the Port of Seattle is Working Around I-200

by Hanna Brooks Olsen

Diversity remains a challenge for the Port—but the Commission wants you to know they haven’t given up

For nearly 20 years, Washington’s government agencies have been legally limited in their ability to actively pursue contracts and partnerships with small businesses based on the race, gender, or religion of their owners. Submitted by Tim Eyman and passed by the voters of the state in 1998, I-200—billed as a method of leveling the playing field by criminalizing affirmative action—has been an oppressive force that further undermines the state’s glaring equity gaps.

One of the state’s most robust governing bodies—the Port of Seattle, an agency which, by its own numbers, generates “216,271 jobs, including 129,744 direct jobs,” and “$894.4 million in state and local taxes”—has been deeply impacted by I-200. Without the ability to openly and transparently go out of their way to correct historical inequalities, the Port has had a difficult time giving some of that wealth back to marginalized communities.

A disparity study commissioned by the Port in 2013 “not surprisingly showed low minority contracting numbers compared to the number of minority contractors in the region available to do work,” said Commissioner John Creighton, who’s currently up for re-election, in an email.

“The buck stops with the commission so I understand the argument that I have been here 12 years so the lack of progress is on me,” Creighton explained, “but I have been a constant voice on this issue and I believe that fact would be backed up by many in the minority business community.”

The Port’s struggles with diversity are not, Creighton says, for a total lack of trying—there’s a latent kind of bias that persists, in large part because Port staffers tend to be spread thin as it is.

“Yes, I-200 hinders us, but I also think there is institutional inherent bias (for lack of a better term),” he stated, adding that for busy staffers, it’s often simplest to go “back to the same old firms you’ve been contracting with as opposed to breaking new ground, taking a chance on new firms you don’t have a history with or smaller firms you might be concerned might not have the heft to deliver.”

So what is the Port doing to address these biases in the face of a law which makes it so difficult to do? In part, they’ve had to get creative with their programs—though whether they’re effective, or not, remains to be seen.

Finding Loopholes, Finding Workarounds

It would be both unfair and untrue to say that the Port is doing nothing to address its racial and gender disparities with regards to contracts. At the behest of the Commission, Port staff has been actively trying to find ways to connect with communities of color, creating and hosting numerous programs and events directed at this exact issue.

But because of the limitations of I-200, they have to do it in a slightly different way—specifically; they have to reach out directly to communities to incentivize participation and partnership without actually offering specific preferential or preferred hiring and contract work. This includes prioritizing characteristics that aren’t included in the initiative, and leaning on Title VI of the Civil Rights Act.

One I-200 workaround is to focus on the size of a company or contractor, the personal wealth of the ownership, and the community they come from. King County’s Small Contractor and Supplier Certification, for example, helps create an advantage for those who apply to the program. Certification eligibility is based on criteria like the net worth of the business owners and the size of the business, not the owner’s race or gender. However, this kind of indirect effort, which still

The Port and other agencies can then choose to work with SCS-certified contractors and suppliers knowing that they’re supporting small, local businesses. Port staffers looking for a contractor can then search the directory using an NCAIS code that the U.S. Small Business Association gives to businesses owned by women and people of color. And, starting this year, they can also turn to a directory which indicates that the business is owned by a member of the LGBTQ community.

Unfortunately, upon searching by these codes, there were few contractors to be located in the SCS directory—and King County doesn’t have much available data about who’s actually represented in there.

The City of Seattle’s community workforce agreement (CWA) is another approach, which prioritizes hiring based on ZIP code. That seems to be slightly more effective at elevating those who have traditionally been kept out of government work.

“At 12 percent, women on CWA projects are working more than double the percentage of hours compared to past City projects,” according to a report from the City of Seattle.  Additionally, “women- and minority-owned business (WMBE) utilization, which was 15.9 percent through December 2016, represents more than $59 million paid to-date.”

Priority hiring in this way has been effective in construction and other contracts with the City of Seattle—but success is relative. WMBE utilization is still just 16 percent.

Another useful tool in working around I-200 has been Title VI of the Civil Rights Act. Standing in stark contrast to I-200, Title IV states that no person, “on the ground of race, color, or national origin [shall] be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”

Title VI is often applied to education funding, though a number of organizations and government agencies have taken it to mean that any federally-funded programs and bodies can exclude people based on race or gender. And looking at the Port of Seattle’s numbers—and the numbers for the state on the whole—a case can be made that people are being excluded by the virtue of not being actively included.

This isn’t a new angle, either. Since the voters approved I-200 in the 1990s, its conflicts with Title VI have been the subject of action and activism.

Take this 1999 story from The Stranger, which detailed the National Black Chamber of Commerce’s complaint about I-200:

The passage of I-200 has forced the state to look for new ways to abide by civil rights principles. It’s no coincidence that the only other state facing a Title VI complaint is California–also the only other state with an anti-affirmative action law.

It’s hard to find ways to meld anti-affirmative action laws with other state and federal requirements. For instance, Washington state legislators proposed a 12 percent cut (amounting to $315,000) from the Office of Women and Minority Business Enterprises (OWMBE). They argue that due to I-200, the office no longer has to work on state programs. Never mind that the state study that found discrimination in contractor hiring partly blamed the disparities on an underfunded OWMBE.

Since that time, the Port of Seattle and the rest of the government have had plenty of time to find new ways to work around the initiative that just can’t seem to be repealed. However, those attempts haven’t seemed to move the needle noticeably. That same 1999 Stranger piece noted that “from 1994 to 1996, African Americans represented 4.76 percent of available firms, but received only .33 percent of “construction prime contract dollars” and 3.16 percent of subcontractor dollars.”

According to the Results Washington program, the state’s goal for 2017 is to reach 10 percent utilization of minority-owned businesses. In 2016, just 1.65 percent of fiscal year dollars went to certified minority-owned businesses.

Emphasis on the Airport

One specific arm of the Port of Seattle has been particularly targeted for diversity in contracting. The Airport Dining & Retail group (ADR), who have some of the most direct contract with contractors, stands to make a salient impact on the equity gap. Airport concessions tend to have lower overhead than, say, construction companies, and already include more ethnically and economically diverse staffers and managers. Getting into the restaurant business has long been a common entry for new Americans, and the airport is looking to take mutual advantage of that; ADR has been concretely pursuing partnerships with WMBE.

What, exactly, does that look like?

Consider a summit in January which sought to court new minority- and female-owned airport concessions vendors. A combination seminar and networking event, the summit was designed to help potential business owners determine whether working with Seatac Airport as a vendor was feasible.

The half-day event wasn’t perfect—it was entirely in English and held at the airport’s conference center during the middle of a Friday shortly after the holidays which, one source told the Emerald, made it difficult for many small business owners to attend—but it was an attempt to increase awareness of potential opportunities.

Seatac, specifically, has been one of the hubs of diversity outreach for the Port, in large part because it offers some of the most workable arrangements for small businesses. Though leasing an airport concessions location is certainly pricey, it’s within reach for a number of local entrepreneurs. As of June, 22 of the airport’s 86 dining and retail units will be owned by small business firms.

However, just 16 of the 86 are “minority and women owned businesses (Airport Concession Disadvantaged Business Enterprise program or ACDBEs),” according to a report from this summer.

There are no shortage of reasons why contracting with an agency like the airport can be difficult—and that’s not a local problem. Access to capital has long been a challenge for immigrant- and Black-owned businesses, making it harder to commit to expensive upfront costs, like management systems, retail locations, and long-term contracts. Nationally, businesses owned by women make up just 5 percent of government contracts for similar reasons.

Perry Cooper, Sr. Manager of Media Relations for the Port, says they’re working on “intensive outreach” in the last several years, particularly focusing on the hurdles that smaller businesses face.

“We have created new introductory and intermediate kiosk programs here at the airport to provide small businesses with the opportunity to experience operating here with less financial risk and lower barriers to entry than full in-line locations,” he explained in an email, noting that these efforts, among others, have “resulted in over 700 firms registered on our ADR leasing website (a 41 percent increase).”

Small businesses, particularly those owned by folks in marginalized communities, certainly seem interested in working with the Port—however, without the ability to offer them any kind of priority status, getting them in the door can still be a struggle.

This year, the Port Commission voted unanimously to support the repeal of I-200, in large part because it would make pursuits of equity both easier and more apparent. The overwhelming message is: We’re never going to get this right without it. But we sure will keep trying.

Neither the Port nor any other government agency is pursuing goals of inclusion and equity out of their own personal kindness; as of 2013, it’s literally the law that they must work toward established goals set out by the state, including target numbers for hiring. And the state does, indeed, have clear (albeit not particularly lofty) goals about how to bring more POCs and specifically women of color into the fold.

And to be clear, some agencies are doing a much better job than others—statewide offices like the Superintendent of Public Instruction, which spent just .12 percent of its 2016 dollars on OWMBE-certified firms, certainly seem to be struggling to work within the established structures.

There are ample directories for agencies to use and programs to work with and pools of talent to tap from. There are dozens of summits and conversations and info-fairs and luncheons for potential businesses to attend. There are even potential legal challenges ahead.

These are all commendable steps in the face of a law which makes it so difficult to even attempt to achieve equity. But it seems clear that even with herculean attempts to work around I-200, these efforts are a drop in the bucket.

Hanna Brooks Olsen is a co-founding editor of Seattlish and has written for the Atlantic, CityLab, and Seattle Met. When not stringing together words or making sounds she enjoys music on vinyl, bourbon, college football, making impulse purchases at second-hand stores, ballet, and sitting in dark bars with friends. She also sings a mean rendition of Walking in Memphis.