FREQUENTLY ASKED QUESTIONS
What is an Economic Disparity Study?
Economic disparity studies:
Examine whether minority- and women-owned firms are unfairly denied access to government contracts.
Allow government agencies to determine whether programs are needed to assist small businesses and/or minority and women-owned businesses in government contracting and purchasing. This is accomplished in part by examining whether there are disparities between:
The percentage of dollars that minority- and women-owned businesses received on an agency’s prime contracts and subcontracts during a particular time period (referred to as a “utilization analysis”)
The percentage of dollars that those firms might be expected to receive based on their availability to perform on the agency’s prime contracts and subcontracts (referred to as an “availability analysis”)
Studies also consider circumstantial evidence of disparity
Why is New Orleans conducting an Economic Disparity Study?
The City of New Orleans Disparity Study is analyzing whether there is a level playing field for minority- and women-owned firms when competing for City contracts.
The study team, led by Keen Independent Research, is assessing what the City might do to increase opportunities for minority- and women-owned firms, as well as other small businesses.
Compelling economic census data already indicates that race-based business disparity and income inequality have widened in our city at a higher rate than the United States as a whole. This disparity can begin to be addressed by implementing specific programs to address African American employment and business exclusion.
Why is an Economic Disparity Study necessary?
In 1989, the U.S. Supreme Court ruled in City of Richmond v. J.A. Croson that jurisdictions must establish a “compelling interest” to support the creation of contracting programs that specifically target minority and/or women-owned businesses.
To ensure any set-aside or other race-based economic programs will withstand all legal challenges, a disparity study must be conducted.
Additionally, in order for any program that is created as a result of the city’s disparity study to remain legally viable, the study must be updated every 3 to 5 years.
Evidence from other cities demonstrates that studies need to remain in place for a minimum of twenty years in order to have a generational impact on economic disparity in minority communities.
Has New Orleans ever had an Economic Disparity Study?
The last economic disparity studies in New Orleans were conducted more than twenty years ago.
New Orleans Sewerage and Water Board – "Disparity in Contracting Opportunities," Dillard Consortium, New Orleans, LA., 1992.
New Orleans – "Disparity in the City of New Orleans, Louisiana," Metro Consulting, May 1992.
New Orleans – "Discrimination in New Orleans: An Analysis of the Effects of Discrimination on Minority and Female Employees and Business Owners," NERA, September 1994.
Set-aside programs have been established in the city as a result of past studies; however, each was discontinued because none of the disparity studies were updated.
Had there been an updated disparity study in the city of New Orleans at the time of Katrina, disadvantaged groups would have had access to specific construction contracts and professional service contracts set aside for them as part of the $93 billion in recovery efforts. Instead, disadvantaged businesses had to compete with large, well-funded firms, both local and national.
What factors are considered in determining whether disparity exists?
The study will collect and examine quantifiable data such as (but not limited to):
The size of minority populations in New Orleans
City contracting policies and procedures
The magnitude of any differences between the availability of minority owned-firms and their participation in contracts
The city’s recent contracting activity
The aggregate and average value of city contracts awarded to different groups.
The study will also collect and examine anecdotal information obtained through focus groups, public hearings, surveys, and interviews. This will incorporate complaint evidence of unintended disproportionate impact, which may include (but is not limited to):
Race or sex related barriers to obtaining bonding and insurance
Market conditions for minority and women-owned businesses
Limits on access to capital, which can result in disparities in business formation, business opportunities, and earnings.
What can local businesses and individuals do to get involved with the Disparity Study?
There are a number of ways interested members of the public can be involved. Anyone can:
Give them your name and contact information as someone interested in participating in an in-depth interview or focus group.
Participate in the survey of New Orleans businesses via phone or email that will be launched in late spring.
Participate in a public meeting.
Keen Independent Research
100 Fillmore Street, 5th Floor
Denver, CO 80206
Provide comments on the draft report when it is distributed to the public in late 2017.
Statement from the Collaborative
The Collaborative has advocated for and supports an updated Disparity Study for the City of New Orleans because we know that the business and income inequality can only be overcome with programs that remedy our economic exclusion. These programs will not only help rebuild the African-American middle class, but the resiliency and prosperity of New Orleans as a whole.