MEND IT, DON'T END IT: Debra Gallegos of Colorado's Department of Transportation hopes minority-contracting programs can be saved.
Still, Pech contends that he's had to battle for his jobs, a fight he claims has been much tougher because he's a white male. Starting in the mid 1980s, Pech says, he began hearing that jobs that Adarand had been the low bidder on were going to minority- and woman-owned competitors, thanks to an affirmative-action program at the CDOT. Under the program, the state sets a goal of giving roughly 10% of total contracting dollars to companies that are run by minority or female owners, and prime contractors are typically required to show a good-faith effort to hire such companies as subcontractors; otherwise, they risk not being awarded contracts. At first, Pech says, he was stunned that his race was a factor. "I said, 'We didn't get the job because of me? Run that by me again. I thought it was illegal to discriminate because of race," says Pech. Then he got worried, because all four of his main competitors at the time were Hispanic- or woman-owned companies. "We're talking about half a dozen to a dozen times a year when I'm low and I don't get the work because of my race," says Pech. "I really thought that it could ruin my business."
Pech complained repeatedly about the problem to his wife, Val, who urged him to take action. "I tend to be the more feisty one," says Val, the daughter of a conservative Republican rancher. "My philosophy is, if you don't like something, do something or shut up about it."
The two drove up to Denver for hearings at the state highway commission. They also lobbied their state senator to try to stop the program, but those efforts went nowhere. Then Val's father, Jack Orr, who used to head the Colorado Cattlemen's Association, suggested that Pech talk to lawyers at the Mountain States Legal Foundation, in Denver.
Mountain States, a well-known bastion of conservatism, has long battled the federal government over grazing rights, environmental rules, and other states-rights issues. Lawyers there were immediately interested in Adarand's plight. In late 1989, Pech offered them the instance of alleged discrimination they were looking for to test racial preferences in federal contracting.
That year a prime contractor had awarded a guardrail job on a federal highway in southern Colorado to Gonzales Construction, a Hispanic-owned company, even though Adarand's bid was at least $1,000 lower. The reason: the prime contractor had received a $10,000 bonus from a division of the U.S. Department of Transportation to hire Gonzales Construction.
Mountain States agreed to handle the case pro bono, though Pech has been picking up the tab for copying and printing costs along with his lawyers' travel expenses. Since 1990, when the suit was filed, Pech estimates he has laid out from $25,000 to $30,000 to cover legal costs. As for the time expended, Pech says that he can't begin to estimate the number of hours he's spent going to hearings and talking to his lawyers about the case. And nothing prepared him for the media blitz that started in 1994, when the Supreme Court agreed to hear his case. "I was flabbergasted," he says. "I was talking with people in Australia and Canada for radio shows all over the world." Pech recalls that a BBC crew even came out to film one of Adarand's job sites, while NBC's Today show sent a limo to bring him to its local studio for a 5 a.m. interview.
Friends and Foes
For all the distractions of the case, Pech insists that it hasn't hurt his ability to run Adarand. He's been fortunate, he says, to have good managers in Gary Strauss, who oversees the work crews, and in vice-president Steve Goeglein, who's in charge of preparing all the company's bids for contracts.
Pech says his main responsibilities -- hiring, tracking financials, dealing with bankers and insurance companies, and handling general management matters -- are not particularly time sensitive. So even during the busiest stretches of his court fight, he's managed to make up the lost work time. "It's like going on vacation," he says. "You come back and you've got a lot of work to catch up on."
Adarand's revenues certainly don't seem to have suffered. Since 1990 the company's sales have more than doubled, from $2.5 million to nearly $5.5 million last year. Pech, though, insists that the company has never made a conscious push to grow. "The business was there, and we were in a position to take advantage of it," says Pech, who credits a Colorado road-construction boom for fueling growth. The company has been profitable since the early 1980s, he says, with average margins of 8% to 10%.
Adarand's office staff and road crew, meanwhile, have grown to roughly 40, including half a dozen Hispanics. Occasionally, during job interviews, Pech gets questions from prospective hires about all the lawsuit-related news clippings and photos (such as the shot of Pech and his wife with Gingrich) on his office wall. But Pech insists that within the company the suit has been a nonissue. He says that he has heard from plenty of contractors who support his lawsuit. Indeed, Jay Lower, head of the Colorado Contractors Association, says Pech's willingness to take a stand is admired. "We're an overregulated industry," says Lower, who complains that affirmative-action goals have given contractors all kinds of extra paperwork. "If we can get rid of some of those regulations, it's a positive."
Not that Pech's war against affirmative action has been entirely cost-free. Adarand VP Goeglein says that in at least two instances, general contractors have told him flat out that they wouldn't be hiring Adarand because of Pech's lawsuit. In one case Adarand had already been assured it had gotten the job. But after the original contractor turned the prime-contract work over to a minority-owned business, Goeglein claims, he was told that the minority contractor had insisted that they find another guardrail company.
