Lindsay Watkins, Ahlers, Cressman & Sleight PLLC and Chair, AGC Legal Affairs Committee
During the final hours of the past legislative session, the Legislature passed I-1000, an initiative amending the previously enacted I-200, which banned affirmative action efforts in Washington. As background, I-200, passed in 1998, states as follows:
The state shall not discriminate against, or grant preferential treatment to, any individual or group
on the basis of race, sex, color, ethnicity, or national origin in the operation of public employment,
public education, or public contracting.
Codified into RCW 49.60.400(1), the Washington Supreme Court has construed the statute to “prohibit reverse discrimination where race or gender is used by government to select a less qualified applicant over a more qualified applicant.” Parents Involved in Cmty. Schs. v. Seattle Sch. Dist. 1, 149 Wn.2d 660, 689-90, 72 P.3d 151 (2003). In other words, banning affirmative action in public employment, college admissions, and public contracting. State officials have stated that, as a result of I-200, the use of woman and minority owned businesses in state public projects significantly decreased.
With I-1000, the Legislature expanded I-200 and clarified that the State can employ affirmative action efforts provided a valid disparity study is in place. Specifically, in addition to the protected groups already included in I-200 (race, sex, color, ethnicity, national origin, and age), I-1000 adds the following: sexual orientation, the presence of any sensory, mental, or physical disability, and honorably discharged veteran or military status. I-1000 also allows the state to remedy “discrimination against, or under-representation of, disadvantaged groups as documented in a valid disparity study or proven in a court of law.” Finally, the initiative creates a “Governor’s Commission on Diversity, Equity, and Inclusion” that is “responsible for planning, directing, monitoring, and enforcing each state agency’s compliance with this act.”
The new disparity study requirement is based upon similar federal regulations and requirements. A disparity study is an attempt to statistically measure past “discrimination” in the marketplace, i.e., the level of participation by a particular group or protected class that would be expected in that state, absent the effects of discrimination. Based on these findings, the state then, under I-1000, can employ contract required goals or other measures in an attempt to balance out or reduce “disparity.”
Is this a big change for contractors? Not necessarily. Though solely state-funded construction projects (as opposed to federally-funded construction projects) have generally not included mandatory race or gender conscious goals as a condition of award since I-200, in 2017, Washington’s Attorney General issued an opinion setting forth the State’s position that race or sex-conscious goals based on a valid disparity study was, in certain circumstances, already permitted by I-200. Presumably based on this opinion, the Washington State Department of Transportation (“WSDOT”) and other state agencies have indicated that, even without passage of I-1000, they intend, at some unidentified time, to begin implementing mandatory race and gender conscious goals (as well as goals for small businesses and veteran-owned businesses) for state-funded projects as well as federally-funded projects. The biggest hurdle for state agencies will be conducting the required disparity study and ensuring it is “valid” (which is notably not defined in the regulation and can be challenged). WSDOT has completed a disparity study, and the Governor’s Business Diversity Subcabinet will soon be completing a statewide disparity study involving 33 state agencies including UW.
Thus, while I-1000 does provide a clearer statutory framework and will likely result in the increased use of mandatory goals on public works projects regardless of funding, I-1000 does not represent a material change in Washington’s agencies’ position or intended use of mandatory small, minority, woman, and veteran-owned business goals on construction projects. Contractors, however, should keep an eye out for these goal requirements as well as closely review the documentation and other proposal requirements that may be included in project specifications. Unfortunately, compliance with the specified goals and documentation requirements is an area rife with bid protests. Whether or not a state agency has performed or is relying upon a broader disparity study will also provide a good indication as to whether the agency intends to implement mandatory goals.
If there are any further questions on I-1000 or compliance with DBE/MBE/WBE/SBE requirements, feel free to contact Lindsay Watkins at Ahlers, Cressman, and Sleight, PLLC.
Editor’s note: A referendum has been filed that, should the requisite number of signatures be gathered, would put I-1000 on the November ballot.