Have minority and women-owned businesses gotten a fair share of ACC government contracts in the past? How has local government spending affected the racial wealth gap? A disparity study being considered by the mayor and commission at their meeting this Tuesday may help us find out.
This study will take a careful look at the local government’s contracting and procurement policies to see if they’ve worsened any racial or gender-based disparities and, if so, to decide how these disparities might be addressed. If approved by the commission, MGT Consulting will perform this study at a cost of $400,000.
The disparity study will examine essentially all of the local government’s spending in recent years, from large construction contracts down to everyday office supplies. Next, it will examine the regional market for these items to find out how many of the contracts could have gone to minority or women-owned businesses, taking into account price and other factors.
Currently, the local government’s procurement policies are color-blind as required by law. Even so, MGT argues that the government may have been passively participating in practices that worsen racial or gender disparities. If the study finds that a disproportionate number of contracts have been awarded in the past to white over Black-owned businesses, for example, the local government would then legally be able to take action to reduce the disparity by changing their procurement policies.
These changes could include setting goals when putting contracts for certain large projects up for bidding. The local government could ask the construction firm winning the bid on, for example, the new judicial center to hire 20% or more Black-owned firms as subcontractors. If this was impossible due to market conditions, the developer would at least have to demonstrate that they made a good faith effort.
This kind of race-conscious contracting would only be legal if the local government first establishes that a racial disparity exists by doing a disparity study.
It’s also possible that disparities may exist within the market itself which aren’t the result of government action. If this kind of disparity is found, the local government could step in and start assisting minority and women-owned businesses to build capacity and become more competitive for government contracts in the future.
Paid for by the American Rescue Plan, this study will involve a full year of effort to gather and analyze both market data and information on government procurement. But it will go beyond a mere crunching of numbers. MGT’s approach includes in-depth interviews with local business owners about their experiences contracting with the local government. It will also include a survey of vendors, two community forums and a website to keep us up-to-date on the study’s progress.
The commission seems sure to approve MGT Consulting to carry out the study at their meeting on Tuesday. Even so, this item won’t be present on the commission’s “consent agenda,” which is a list of items all commissioners agree on which are passed with only one vote. That’s because Commissioner Jesse Houle asked for the disparity study to remain off consent as a way of emphasizing its importance.
Houle praised the study’s concept, but was worried that it seemed to have very little focus on LGTBQ-owned businesses. According to ACC Manager Blaine Williams, this is due to a lack of good data on LGBTQ-owned firms. If MGT is able to generate quality data regarding these firms, then sexual orientation and other protected characteristics would be included in the study, along with the data on race and gender, which are more easily gathered.