Changes expected for city’s minority business hiring ordinances

Proposed changes to the city’s procedures for hiring minority- and women-owned businesses will likely come before City Council this spring or early summer, with consultants and a working group recommending 21 adjustments or substantial revisions to the hiring practices.

A memo published last week details the results of the two-year review of the city’s Minority-Owned and Women-Owned Business Enterprise (MBE/WBE) Procurement Program Ordinance. Central to those findings were the results of a 2022 disparity study conducted by Colette Holt & Associates that found the city’s minority business hiring practices are mostly successful and well structured, with some adjustments suggested.

Among the recommended ordinance changes: decrease the number of ordinances from four to two; eliminate numerical goals cited in the ordinance to address confusion; certify firms in the local program using North American Industry Classification System (NAICS) codes; implement a more extensive and detailed industry code review process when it is time for a firm to seek recertification; and adopt the federal approach to revise the policy so that a firm remains certified until its eligibility is removed rather than having a firm’s certification “expire.”

Also among the recommendations from staff made in December were strategies to refine the MBE/WBE hiring program. Those recommendations included developing written criteria to determine when to set ethnic-specific goals, considering bidding some contracts without goals that are determined to have significant opportunities for MBE or WBE participation, dropping the requirement that bidders must place advertisements in newspapers, and clarifying the standards for counting the participation of certified firms in joint venture agreements.

The February report from the city’s Small and Minority Business Resources Department also presented 20 recommendations from the working group focused on existing city procedures that either need to have better communication practices or undergo minor or major modifications.

In September, Council extended the sunset date of the current ordinance until Aug. 31 of this year. That extension gives staff more time to improve the communication around the five existing practices specified, and begin the planning to make the minor adjustments to six other practices.

The major changes may be longer in coming, with the report noting those adjustments “will take more time, effort and cross departmental coordination and may require external agency collaboration to implement. Staff has begun connecting with key partners and looks forward to developing a more conclusive timeline of necessary planning efforts and steps for implementation. It is important to note that the recommendations specified as Major Modifications may require additional funding and personnel to fully implement and administer.”

Changes to the ordinances and practices covering minority business hiring have been long in coming, with Council first requesting a study in late 2018 and approving $1 million for its funding in early 2020 just before the onset of the Covid-19 pandemic.

That initial delay came in part because there were only three firms that submitted bids to conduct the disparity study required every five years, with the last one completed in 2015 by New York-based NERA Economic Consulting.

That work found evidence of business discrimination against MBEs and WBEs in the city’s private sector and said that discrimination was likely behind the finding that women and minorities were less likely to own their own businesses.

In January, the Mayor’s Committee for People with Disabilities pushed to have the city amend the MBE/WBE criteria to add people with disabilities to the preferred class of vendors considered for contract opportunities. In October, at a meeting of Council’s Audit and Finance Committee, Council Member Alison Alter pushed to have disabilities included in minority business hiring, though leaders from the Small and Minority Business office said those considerations would have to be handled by the city’s procurement office.

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