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Council may move forward with study of minority business contracting disparities

Monday, January 13, 2020 by Chad Swiatecki

City Council will decide at its Jan. 23 meeting whether to approve a study – first requested in late 2018 – examining how well small businesses owned by women and minorities are represented in the city’s contract procurement process. The resolution will authorize the Small and Minority Business Resources Department to spend up to $1 million on the study, which will be conducted by Colette Holt & Associates and will take approximately a year to complete.

The expected approval comes roughly a year after Council members first expected to take action on the item following three public feedback sessions and presentations early last year to some of the city’s minority quality-of-life commissions.

The delay was caused in part because the department spent the summer looking for as many qualified firms as possible to bid on conducting the study, with only three responses received. Not among the respondents was New York-based NERA Economic Consulting, which conducted the last disparity study that was completed in 2015 in accordance with city policy that data on participation by minority- and women-owned businesses be completed every five years.

The last study found “statistical evidence consistent with the presence of business discrimination against M/WBEs in the private sector of the city of Austin market area” and that “minorities and women are substantially and significantly less likely to own their own businesses as the result of discrimination than would be expected based upon their observable characteristics, including age, education, geographic location and industry.”

On Tuesday the city’s MBE/WBE and Small Business Enterprise Procurement Program Advisory Committee voted 7-0 to recommend Council move forward with the contract for the study.

Edward Campos, interim director of the SMBR Department, said the next study is certain to find ongoing underrepresentation by minority- and women-owned businesses despite an increase in applicants for subcontractor and primary contractor roles for all purchasing categories.

“Whenever you talk about an affirmative action program and the barriers that have been persisting for decades … access to capital and discrimination in the marketplace are still something that we’re struggling with right now,” he said. “We’re making progress in small increments when it comes to more participation on contracts, not just from the perspective of subcontracting firms but having minority- and women-owned businesses serving as prime firms for the city.”

Campos said the study will include a look at best practices from other cities’ minority- and women-owned business contracting processes, which to date have not been part of the analysis. Another new feature the study will include are recommendations for how Austin can improve its program, in addition to measuring performance and participation levels.

At the 2018 Council meeting where the study was initially discussed, publicist and activist Paul Saldaña pushed for the quality-of-life commissions to be included in the input process to decide how the study would be carried out. At the time, Saldaña was critical of the plan to award the contract to Colette Holt & Associates without a formal bid process because the pool of qualified vendors was thought to be too small.

Saldaña said there is a clear gap between the city’s stated goals for using minority- and women-owned businesses and what is being achieved, and it could be reduced if Council would start delaying or rejecting contracts that don’t meet those requirements.

“One of the ongoing challenges and concerns from the local small minority- and women-owned businesses has been that when you look at what the participation has been on city-awarded contracts where there are goals, there are ongoing challenges to meet those goals,” he said. “There are several reasons why that is happening, and a very important one is I don’t know that the city has done a good job of making this a priority known to anyone who wants to do business with the city – that utilizing small minority- and women-owned businesses is a priority.”

Photo by John Flynn.

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