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Report: Minority participation in city contracts falling

Posted by: Eric Roper Updated: June 16, 2014 - 9:46 PM

Updated at 9:34 p.m.

A recent performance management report pertaining to the city's Civil Rights Department shows that minority participation in city contracts has fallen steadily since 2010.

The decline was highlighted in a recent meeting discussing the report, said Council Member Cam Gordon, who wrote in an e-mail that he was "disappointed and curious" by the figures.

The Small and Underutilized Business Participation program aims to ensure that women- and minority-owned businesses ("M/WBEs") get a fair shot to participate in city contracts. Goals are set for projects depending partly on the contractorss that are available, and bidders are asked to make a good faith effort to meet them.

In the fourth quarter of 2013, active SUBP contracts totaled about $383 million, according to a monthly report from the department (page 23). But the Results Minneapolis report shows that minority participation has fallen from 8.7 percent in 2010 to 5.3 percent in 2013.

The Star Tribune reached out to the department's director, Velma Korbel, as to why this number would be falling so steadily. She said it is partly the result of a stricter certification methodology implemented in 2011-2012 that impacted the number of eligible businesses.

"We also know that the economy took a toll on many small businesses previously certified to do business in Minneapolis, and some just no longer exist," Korbel wrote in an e-mail. "The numbers are also a factor of the increase in construction work in the Metro and not a lot of increase in the numbers of new M/WBEs where all agencies draw from the same pool of M/WBE businesses."

Korbel added that large public projects like the Vikings stadium, where everyone wants to work, "can also have a toll on the inclusion performance on smaller, less visible projects."

The city plans to increase outreach and assistance to the minority- and women-owned businesses to get them certified, according to the Results Minneapolis report. They also hope to boost numbers by unbundling contracts monitoring them more closely.

UPDATE: Lennie Chism, a former City Council candidate who founded the nonprofit Springboard Economic Development Corp., called MPLS to note that ordinances allow the city to directly purchase raw materials for projects -- sidestepping the participation goals. He is pushing the council to change that.

"When the city purchases the materials directly, the civil rights department ... does not set any goals," Chism said. "And so the purchasing manager can buy from anybody and they don't have to buy from anybody that's a registered participant in the SUBP program."

Correction: This post has been revised to correct an earlier version which said in the lede that female participation in city contracts has also steadily declined since 2010.

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