City-funded study examines disparities in minority business contracting

A disparity study aimed at examining the effectiveness of Austin’s women and minority business enterprise procurement program found it to be largely successful. But while the program – intended to create more opportunities for minority- and women-owned firms – has had success, the study also found that in Austin, women- and minority-owned businesses still face hardships.

The disparity study, which was set into motion after City Council approved a resolution in early 2020, was conducted by Colette Holt & Associates and took two years to complete.

“Looking at the concrete data and having an outside consultant looking at your program (and) saying, this really works well – I think that was one of the big takeaways for me,” Edward Campos, the director of Austin’s Small and Minority Business Resources Department, told the Austin Monitor. “Certainly, that doesn’t mean we’re done with conquering all the disparities that exist,” he added.

The study examined Austin’s contract data from 2013 to 2018. The researchers randomly selected 1,069 from all the city contracts available and ultimately included 1,002 contracts in their analysis. Examples of these types of contracts would be agreements between the city and construction, architectural and engineering firms.

“Although the city’s (minority-owned and women-owned business enterprise) program has been quite successful in creating opportunities for minority and woman firms, these benefits have not been spread evenly across all groups or subindustries. We find the data as a whole support the conclusion that minority and woman firms have not reached parity in all aspects of the city’s local contracting activities compared with (white male-owned business enterprises),” the study concluded.

Another aspect of the project involved researchers going into the community and interviewing women and minority business owners about the specific challenges they face. Campos said the researchers found that “access to capital, access to bonding and access to insurance … all those things that have plagued our minority and women-owned businesses, unfortunately, are still in play.”

To address some of the concerning findings, the consultant released some key recommendations. These recommendations along with the study findings will be taken to the public and the MBE/WBE and Small Business Enterprise Procurement Program Advisory Committee to gather more input. Campos and his team will present recommendations for program improvement and ways to reduce business disparities to City Council for adoption later this year.

The first iteration of the current women and minority business enterprise procurement program was established by City Council in 1987 in an effort to reduce discrimination and promote equal access to contracting opportunities. Since the original program was created, it has been reviewed and revised multiple times. The city tries to organize a disparity study to examine the program’s effectiveness every five years.

Photo made available through a Creative Commons license.

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