The city of Minneapolis finally has the evidence it's been waiting for to justify continuing to require that contractors and vendors it buys from make good-faith efforts to subcontract business with minority- or female-owned firms.
A disparity study that's the first look for the city in 15 years at metro-wide contracting patterns by race and gender was unveiled Thursday. The city has been increasingly at legal risk because its preference program for businesses owned by women or minorities is based on discrimination data from 1995, according to study co-author Jon Wainwright. That legal risk is the result of courts requiring strong current evidence of discrimination and remedies specifically tailored to offset that.
The latest study, which cost about $500,000, finds significant financial differences in the metro area between minority- and woman-owned firms and the larger pool businesses. It attributes those to business discrimination. The differences exist by race and gender in wages for workers and earnings of business owners. They persist even after adjustment for potential factors such as geography, experience and education, Wainwright said.
Even the city's efforts at balancing that situation have fallen short, the study by NERA Economic Consulting found. From 2003 to 2007, firms owned by women or minorities got just 5.5 percent of the dollar value of city purchasing contracts, while they make up nearly 22 percent of the available pool. The city released data Thursday suggesting its percentages have improved more recently for construction projects, although they still fall well short of the market supply of female or minority contractors.
Council Member Robert Lilligren, who has been pushing for the study's completion, called the data disappointing. The city's goal requirements apply to contracts for goods and services of more than $50,000 or to construction contracts of more than $100,000.
A copy of the study has been placed on the city's website for public comment. Civil Rights Director Velma Korbel said she'll set priorities among the study's recommendations before returning to the council on Dec. 9. The city's current program expires March 31; Korbel said some recommended changes require rewriting the law while others can be handled administratively.
Among the recommendations is adding a race- and gender-blind program that sets aside smaller contracts for bidding only by firms under a certain size. That would still help most minority- and female-owned businesses, Wainwright said.
The report also called for city departments to monitor progress by contractors toward minority subcontracting goals throughout the length of contracts. Lilligren said the contracting departments too often wait until the end of a contract, when it's too late to intervene, turning responsibilities over to the city's civil rights contract-compliance workers. Contracting departments need to be more aggressive in holding contractors and suppliers to goals earlier during contracts, he said.
The city established its program in 1997. It has been extended several times since about 2005. That's when the city started trying to work cooperatively to commission a new disparity study with several other large metro public jurisdictions to share the cost of updating disparity data. Korbel said that differing needs for data posed by their varying programs derailed joints efforts.
Steve Brandt • 612-673-4438