Economic Inclusion in City Awarded Contracts

This post was authored by D. Joy McGee, EDD's newest division volunteer blogger!

Small business enterprises (SBE) are critical to our economy, they create employment opportunities, and help the United States compete in today’s global market. Government at all levels is heavily invested in making sure SBEs succeed. Yet, even in the current recession there are prime government contracting opportunities for which minority- and women-owned businesses often are not utilized. Acknowledging the disparity of city contracts awarded to minority- and women-owned businesses, some cities have created task forces, city departments and programs to foster minority economic inclusion. To create this economy of inclusion, a procurement plan must include goals to expand the number of small- minority- and women-business enterprises (SBE/ MBE/WBE) to do business with the city by removing obstacles.

Why is minority inclusion a challenge? Some of the challenges that SBEs, MBEs and WBEs face include, but are not limited to, marketplace discrimination, obtaining certifications, bonding and insurance, technical expertise and capacity, and believing that opportunities are tangible. What can be done to close the gap and to make sure that significant disparities don’t continue to persist? Best practices include but are not limited to:

• executive buy-in;
• streamlining the process of certifications;
• technology used to promote outreach and diversity;
• training and promoting staff;
• building partnerships among the public and private sector and outreach;
• strategic use of under threshold contracts, and;
• preparing minority and women-owned businesses to bid for large contracts.

Should cities adopt a race based or a race neutral program or a combination of both? In 2009, Cincinnati, OH and San Antonio, TX made commitments to improve their current procurement policies and SBE programs.

The City of Cincinnati has a race neutral SBE program. The task force, Open Cincinnati Action Team, was commissioned by Mayor Mark Mallory to make recommendations aimed at accelerating minority firms doing business with the City. If economic inclusion has not improved within 18 months of implementing the 27 task force recommendations, the Action Team recommends that the City commission a disparity study to examine if a race based program with goals and/or set asides will work in its jurisdiction.

The City of San Antonio commissioned a study in 2006 to determine what, if any, evidence of disparities exist in procurement practices related to the ethnicity, race, or gender of the business owner. As a result of MGT of America, Inc. findings and recommendations, City Council determined that a combination of race- and gender-neutral and race- and gender-conscious remedies and programs will aid in the effort to remedy past marketplace discrimination. City government’s economic power can be employed to create an economic inclusion program that is committed to breaking down barriers. A disparity study can be conducted to analyze procurement practices and to determine which economic inclusion program should be utilized.

City government’s economic power can be employed to create an economic inclusion program that is committed to breaking down barriers. A disparity study can be conducted to analyze procurement practices and to determine which economic inclusion program should be utilized.