City Is Urged to Finance Minority Contracts Study : Government: Groups hope it would prove the need for a program that steers city contracts to minorities.

Hoping to protect a San Diego program that steers city contracts to firms owned by minorities and women, a coalition of minority groups urged city leaders Wednesday to finance a study documenting its need.

Top city officials, however, warned that the estimated $500,000 study could make the program more susceptible to a legal challenge from opponents who view it as an unconstitutional race-based quota system.

“When you combine the expense with the risk of not knowing what a study might show, we don’t think it’s worth it,” City Manager Jack McGrory said. “We already have a very effective program that’s moving toward the goal of providing better economic diversity in our contracts. This kind of study could jeopardize that.”

The coalition of black, Asian, Indian and Latino groups, called Communities United for Economic Justice, supports the city program’s goal of directing at least 15% of city contracts to minority- and women-owned businesses.

At a news conference Wednesday, spokesmen for the coalition said the city might be able to ward off a lawsuit by funding a so-called “disparity study” intended to show that the policy has helped correct past discrimination in city contracts. A San Diego City Council committee could make a recommendation on that proposal when it reviews the overall program next week.

“Even if the study would cost as much as $500,000, that has to be weighed against the cost of doing nothing,” said Harold Brown, president of the Black Economic Development Task Force and the coalition’s chairman. “If this whole program were dismantled, there would be a very high human cost to that. A lawsuit would cost something too.”

Opponents have questioned the legality of the program, arguing that it unfairly prevents some non-minority firms from competing for city contracts solely on the basis of race. In a letter sent to McGrory earlier this year, an attorney for several consulting engineering firms described the program as “constitutionally flawed” and urged that it be terminated, threatening a lawsuit if that did not occur.

Although city attorneys have advised McGrory that the program is “legally defensible,” minority leaders said Wednesday that the disparity study could bolster the city’s position.

“It’s a precautionary approach that could strengthen the city’s hand if it ever has to defend the program in court,” said lawyer Michael Aguirre, an adviser to the coalition.

However, McGrory cautioned that such a study could reach an opposite conclusion, perhaps encouraging opponents to pursue a legal challenge.

As an example of the program’s success, McGrory said that, when it began in fiscal 1986, 12% of city construction contracts went to minority firms. Last year, that figure rose to 42%, he said.

“The program we have is working, and we don’t want to do anything to endanger that,” McGrory said.

Brown, however, accused the city of “playing a numbers game” to prove the program’s effectiveness.

“I don’t want to spend any time debating what those numbers are or should be,” Brown said. “I only want to ensure that there are adequate opportunities for minority contracting. And our concern is that there’s a lawsuit in the making that could threaten those opportunities.”