From the June 1998 issue of Entrepreneur

Although more than two months have passed, countless minority- and women-owned businesses in California are still reeling from Gov. Pete Wilson's executive order that terminated all affirmative action programs and regulations guiding state contracting opportunities. But entrepreneurs nationwide will also feel the impact, as other states are expected to follow California's lead.

"It's devastating to businesses," says Mary Ann Mitchell, chairman of the National Black Business Council and founder of Computer Consulting-Operations Specialists (CC-OPS) Inc. in Culver City, California. "Working for the state, even when we had affirmative action, was a nightmare. Can you imagine what it's going to be like now?" Since its inception in 1985, CC-OPS has landed several government jobs--one of which turned sour after Wilson's decision.

The emotions shared by Mitchell and other small-business owners failed to dissuade the governor. His decision is backed by the 1996 majority passage of anti-affirmative action Proposition 209, and the March rejection by a federal court to reevaluate its ruling regarding contracting preferences.

"The 9th Circuit Court of Appeals ruled the contracting provisions regarding minority- and women-owned businesses in the state contracting codes were unconstitutional," explains Lisa Kalustian of Gov. Wilson's office. "Instead of granting preferences based on membership in a group, we need to be sure everyone has the kind of health care, education and access to opportunities they need to be able to compete and win on merit."

Between 1994 and 1995, California state contracts totaled $2.7 billion. Of that, affirmative action programs secured only $310 million (11 percent) for minorities and $210 million (7.5 percent) for women. Many entrepreneurs now worry that without a mandatory threshold, such figures will slump in coming years.

But Gov. Wilson, confident that equal opportunity exists without affirmative action, hopes to quell nationwide outcries by implementing an aggressive outreach program. "Everyone will have the same opportunity to bid and know what's available," Kalustian contends.

That's of little comfort to entrepreneurs like Mitchell. "It would be fair if the economic conditions were the same," she says. "It would be fair if we were all on the same, level playing field."

Contact Sources

Computer Consulting Operations Specialists Inc., (310) 417-5170, http://www.ccops.com

Meckleburg County Work Release and Restitution Center, 901 Elizabeth Ave., Charlotte, NC 28204, fax: (704) 336-3533

Office of Gov. Pete Wilson, (916) 445-1455, http://www.ca.gov/