Black History Month – The Man Responsible for More Black Millionaires
BLACK HISTORY MONTH
THE MAN RESPONSIBLE FOR MORE BLACK MILLIONAIRES
“THE FATHER OF THE 8(a) PROGRAM”
CONGRESSMAN PARREN J. MITCHELL
By Abraham Xiong
Unlike most Asian men, I didn’t marry within my own race. I fell in love with a beautiful Nubian queen from Grand Rapids, Michigan. We met at church and our friendship blossomed into an unlikely romance. Seventeen years later, we have two beautiful teenagers.
As the father of black teenagers, I often think as to how I can make their generation a little better than the one I was born into. They will face different challenges than I did. What can I do to inspire them and to empower the African American Community?
It is mainly with this mindset as to why I founded the Government Contractors Association (GCA). Each year, there are over $500 billion in government contracting opportunities, yet less than 5% are awarded to the Black small business community. GCA’s vision is to “create access.” We want to open doors for disadvantaged entrepreneurs to have more access to government contracting dollars.
I firmly believe that the greatest voting power any person or community can have is the power to vote with our money. When we spend a dollar bill, we are deploying one George Washington to work on our behest. When we spend a $100 bill, that is 100 Benjamin Franklins carrying out our mission.
My work with GCA, as a small business advocate, is my way of following in the footprint of a little-known giant in the African American community. So, in honor of Black History month, I have a question to everyone, who is Parren J. Mitchell?
The power to give access to billions of federal dollars was given to the African American community largely by Congressman Parren Mitchell. But before I get into that… let’s take a quick look at who he is.
CONGRESSMAN PARREN JAMES MITCHELL
Parren James Mitchell was born on April 29, 1922 in Baltimore, Maryland. His parents were of humble beginnings. His father, Clarence M. Mitchell, Sr., was a waiter, and his mother, Elsie Davis Mitchell, was a homemaker.
As a young man, Parren Mitchell served as an officer in the 92nd Infantry Division during World War II and was wounded in Italy. He returned as a war hero and received the Purple Heart medal for jumping on a live grenade to save the lives of three other soldiers. His selfless effort should have merited a Silver Star or Medal of Honor, but Blacks could not receive such medals at that time.
In 1950, Parren Mitchell applied to graduate school at the University of Maryland, the President of the College Park campus rebuffed him by saying it was “inadvisable for Blacks to attend the College Park campus.” Mitchell and the NAACP sued for admission and prevailed becoming the first African American to receive a post graduate degree from the main campus of the University of Maryland. He was a champion of civil rights and led local activists during the civil rights era. Today, the University of Maryland graduates more African Americans per year than any other state university system in the nation. This was the start of his long productive life in fighting for the underserved communities.
In 1968, Mitchell decided to run for Congress and challenged nine-term Democratic incumbent Samuel Friedel in the Democratic primary and lost. He sought a rematch in 1970, and this time he narrowly defeated Friedel by only 38 votes. He won the general election in November, becoming the first African American to represent the state of Maryland in Congress.
Mitchell was one of the 13 founding members of the Congressional Black Caucus (CBC), playing a significant role in crafting the identity of the new organization. As of 2019, CBC has 55 members.
During his sixteen years in Congress, he served on multiple committees, among them, he was Chairman of the House Small Business Committee. Through this committee and as chair to the Congressional Black Caucus he won a reputation as a staunch supporter of black-owned businesses. In 1978, Public Law 95-507 created a pilot program for contracts to be set-aside to socially disadvantaged businesses, which Black-owned firms would fall under. Because of this, Mitchell has been called the father of the federal set-aside program, allowing ten percent of federal business contracts to be awarded to minority owned businesses.
It is this landmark legislation which paved the way for today’s 8(a) Program and every other small business program. “I worked very hard in Congress to get laws on the books to benefit minority business,” Mitchell told Sonny Goldreich in the Baltimore Business Journal. “Everywhere I speak, I say, ‘This is the second phase of the civil rights movement. We cannot expect to be full-fledged citizens until we fully participate in the economy.’”
A Brief History of the 8(a) Program
To fully appreciate the magnitude of Parren Mitchell’s impact in society, we’ll need to better understand the 8(a) Business Development Program. The 8(a) Program allows for minority business owners with control of 51% or more of a small business to obtain admission as a certified 8(a) company. Through this certification, 8(a) companies can win set-aside contracts which other non-8(a) companies are excluded from. The greatest benefit of the 8(a) certification is Sole Source Contracts (SSC). Sole Source Contracts are direct award projects to one company. There is no bidding or a competitive procurement process. It is awarded purely on the capabilities of the company and the trust from the contracting officer. Most importantly, SSC’s have a high ceiling of $4 million. A certified 8(a) company can receive a direct award up to $4 million without having to compete with any other companies.
Below is a brief history of the 8(a) Program.
The creation of the current 8(a) Program evolved through multiple stages. It’s genesis rests in the cradle of World War II. In 1942, Congress first authorized a federal agency to enter into prime contracts with other agencies and subcontract with small businesses. This was to support the procurement of goods and services to support the war efforts from small businesses which often didn’t understand procurement regulations and policies. This agency was called Smaller War Plants Corporation (SWPC). The SWPC’s subcontracting authority expired along with the SWPC at the end of the World War II.
In 1951, at the start of the Korean War, Congress created the Small Defense Plants Administration (SDPA), given the same powers that the SWPC. In 1953, Congress transferred the SDPA’s subcontracting authorities to the newly created SBA, with the intent that the SBA would exercise these powers in peacetime, as well as in wartime.
When the Small Business Act of 1958 transformed the SBA into a permanent agency, the authority of subcontracting small businesses to the SBA acting as the prime was included in Section 8(a) of the act, thus the name, 8(a) Certification Program.
In 1967, Presidents Lyndon Johnson created the President’s Test Cities Program (PTCP), which involved a small-scale use of the SBA’s authority under Section 8(a) to award contracts to firms willing to locate in urban areas and hire unemployed individuals, largely African Americans, or sponsor minority-owned businesses by providing capital or management assistance. However, under the PTCP, small businesses did not have to be minority-owned to receive subcontracts under Section 8(a).
In 1968, the Small Business Administration’s 8(a) Program was enhanced to allow for federal purchases from socially or economically disadvantaged owners of small businesses. However, the 8(a) Program was not effective and rarely utilized. The SBA mainly focused on supporting loans and not contracting.
On March 5th, 1969, President Richard Nixon, with advice from Robert J. Brown, established the Office of Minority Business Enterprise. Today, it has transformed to become the Minority Business Development Agency (MBDA).
In 1977, The Public Works Employment Act as amended by Congressman Parren J. Mitchell required that 10% of each Federal Construction project be awarded to minority businesses. This set the stage for the use of set-aside programs.
In 1978, Public Law 95-507 mandated that bidders for federal contracts in excess of $500,000 for goods and services and $1,000,000 for construction must submit a small business utilization plan which includes percentage goals for minority businesses. Today, large firms have taken this cue and formed diversity programs and small business programs.
Also, in 1978, Congress amended the Small Business Act to give the SBA express statutory authority to support subcontracting with social and economically disadvantaged firms, which specifically include Black owned businesses and other minority owned businesses.
The Father of the 8(a) Program.
Many hands went into the establishment of set-asides and the 8(a) Program, but no other had a louder voice and more profound effort to see that contracting dollars were set-aside to the Black community. As a Congressman, Parren Mitchell aggressively insisted that the billions of federal contracts be made accessible to Black owned companies.
It is through these and many other legislations which Parren Mitchell fought for that I dubbed him with the moniker as the “Father of the 8(a) Program.” He is a GIANT through the countless regulations which he sponsored and supported. Parren Mitchell’s service in Congress paved the way for the most powerful entrepreneurial program for the Black community and other socially disadvantaged groups. Every small business program which came after owes its roots to Parren Mitchell.
Set-aside programs, sole source contracts, minority certifications, women business enterprise programs, Alaskan and Tribally owned corporations, Vet First contracting initiatives, Ability One, HUBzone certification, DBE, MBE, WBE, diversity programs and many other such small business initiatives can be traced to the work which Parren Mitchell and his peers fought for.
For the magnitude of impact which Parren Mitchell has accomplished, he is an unsung hero in the annals of American history and in the Black community. Very few people know who he is or the impact he has made. So are the entrepreneurs who he has helped. They are the millionaires next door. They quietly go about their business of providing value and services to government agencies. They grow their companies from a few employees to millions in revenue and in some cases, billions in revenue.
MORE BLACK MILLIONAIRES
Through the groundwork which Parren Mitchell initiated and laid, Secretary of HUD Alphonso Jackson often says,
“There is no other program that has produced more Black millionaires in this nation than the 8(a) program.”
As an example, one of the most successful 8(a) Program graduate is World Wide Technology, Inc. WWT was founded by Dave Steward and has grown from a few staff to over 4,000 employees. WWT made Fortune’s 2018 “100 Best Companies to Work For” list. Additionally, WWT appeared on the 2018 “Best Workplace in Technology” list by Great Place to Work and Forbes’ Largest Private Companies list. WWT has an estimated revenue of $11 billion annually. Celebrity Net worth ranked Dave Steward as the 2nd richest Black man in the US, with a net worth of $4 billion, higher than:
- Oprah Winfrey: $2.8 billion
- Michael Jordan: $1.9 billion
- JayZ: $1 billion
- Tyler Perry: $600 million
- Denzel Washington: $220 million
In comparison, think about what Dr. Martin Luther King, Jr. did for civil rights and social justice. Think about how Oprah Winfrey changed the landscape of media and entertainment. Think about what Jackie Robinson did for professional sports. That is what Congressman Parren Mitchell did for small businesses and economic justice. He is an unrecognized hero for the magnitude of impact which he has made.
Let’s do a quick economic impact comparison to other industries.
This chart compares the set-aside program which Mitchell fought for with other industries.
The 8(a) Program has 6,000 companies. These companies won approximately $25 billion in contracts annually. All companies in federal set-aside programs, such as WOSB, HUBZone or SDVOSB, won a total of $44 billion in contracts. (Source: usaspending.gov)
National Football League (NFL):
32 teams x 53 man roster = 1696 total players
68% or 1153 NFL Players are African America
Estimated Total NFL Salary: $6 billion x 68% = $4 billion going to African America Players
In 2017, Goldman Sachs reported that R&B and hip-hop lead the music industry with live music streaming, publishing and recorded songs with an estimated $26 billion in revenue.
THE SECOND PHASE OF THE CIVIL RIGHTS MOVEMENT
It seems that we’ve come a long way from the bus boycott and civil rights marches of the 1960’s, but upon deeper reflection, those who marched back then knew that ending segregationist laws in the South would be just the first step in the long journey for true equality.
Martin Luther King, Jr. stated, “The first phase had been a struggle to treat the Negro with a degree of decency, not of equality.” He further explained during the last few years of his life that “I have felt my dreams falter as I have traveled through the rat-infested slums of our big city ghettos and watched our jobless and hopeless poor sweltering in an air-tight cage of poverty in the midst of an affluent society.”
It is with this thought that King and other activists in the black freedom struggle came together to support an economic proposal. This initiative was a unified vision from King, the Southern Christian Leadership Conference, Stokely Carmichael (Kwame Ture), and the NAACP. From this dream to bridge the nation’s racial inequality through economic equality, the Freedom Budget emerged in 1967.
In 1968, the Poor People’s Campaign, or Poor People’s March on Washington was organized by Martin Luther King, Jr. and the Southern Christian Leadership Conference (SCLC). Later that year, on April 4, 1968, Dr. King would be assassinated, and Ralph Abernathy led the march with 3,000 people in Washington. The Poor People’s Campaign ended shortly after King’s death along with the economic demands of the second phase of the civil rights movement.
However, when Parren Mitchell was elected to Congress, he took on this mantle to use legislations, instead of marches, to create economic equality. He sponsored 241 bills and co-sponsored 3,863 bills. Mitchell remarked, “If this democracy should ever fail it will come from within because of the enormous disparity between the rich and the poor.”
On May 28, 2007, the Honorable Parren J. Mitchell passed away. He left behind a legacy of legislative work which empowered the “second phase of the civil rights movement.” If Martin Luther King, Jr. is akin to a Moses figure, then Parren Mitchell is akin to Joshua.
Today, some of us may feel that we’re living in the promised land, but we’re far from the promise of economic equality. In terms of Black wealth compared to White wealth, the median family wealth for white people is $171,000, compared with just $17,600 for Black people. According to the Economic Policy Institute, 19 percent of Black households have zero or negative net worth.
Who will be the torch bearers of King and Mitchell? Who will fight tenaciously for Black economic empowerment? Who will move the second phase of the civil rights movement to become a dream realized?
Congressman Parren J. Mitchell opened the door to make our generation a little better. We must carry on the struggle more diligently so that the next generation may realize what our current generation does not have.
“If you believe in fighting racism, you make a commitment for the rest of your life. There’s no getting off that train. You can’t say I’ve put five years in fighting racism and now I’m finished. No, you are not finished. Our job is to fight it every day, to continue to shove it down and when it rises up to shove it down even harder.”
– Parren J. Mitchell, 1922 – 2007
ABOUT THE AUTHOR:
Abraham Xiong is President of Government Contractors Association, Inc., a professional association dedicated to supporting businesses in the contracting market. He is a social entrepreneur, a business coach, and an avid advocate for small and disadvantaged businesses.
Mr. Xiong is the Co-Founder of the software program called www.GovGenie.com which is a full-lifecycle government contracting tool.
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