January 9, 2004 -- In December, a federal judge gave the city of Chicago six months to make changes in the law aimed at curbing discrimination by the construction industry against minority-owned businesses.

But Judge James Moran refused to strike down the law -- as urged by the Builders Association of Greater Chicago -- because he said it is needed to remedy past and ongoing discrimination.

"The city has a compelling interest in not having its construction projects slip back to near-monopoly domination by white firms," Moran said.

Mara Georges, the city's corporation counsel, said, "This decision greatly strengthens our program, particularly in light of the fact that programs around the country have been struck down."

City law says at least 25 percent of the work on construction projects must be given to firms owned and managed by minorities.

Moran said the city "has been too aggressive in denying waivers" to contractors who are unable to find qualified subcontractors.

He also said the amount a minority- or woman-owned company makes in a year that indicates it no longer needs assistance is set too high. He recommended lowering it from the present $27.5 million to $17 million a year.

Moran gave the city six months to make those and other changes. He could terminate the program if it is not modified to his satisfaction.

He cited "a dramatic decline" in the use of minority firms when affirmative action programs are scrapped, "and the paucity of use of such firms when no affirmative action program was ever initiated."

The group's share of the business fell from 23 percent to 10.8 percent when Metropolitan Water Reclamation District regulations were thrown out in 1989, Moran said.

When the county's law was set aside in 2000, participation by minority-owned firms plummeted from 30 percent to 5.7 percent, he added.

The city's ordinance was passed in 1989 after a blue-ribbon panel appointed by Mayor Daley reviewed a history of discrimination against the firms and urged reform.

In 1996, the builders association sued, arguing there was no need for an ordinance because past discrimination had been remedied.