Racial disparity study has been a long time coming, minority businesses say
When New Orleans Mayor Mitch Landrieu announced Thursday (Oct. 15) that he planned to fund a study of racial disparities in the award of lucrative city contracts, it sent shockwaves through the minority-owned-business community.
The response was particularly keen among members of The Collaborative, a group of black business owners that has long pushed for such a study. "The Collaborative is very proud and appreciative of Mayor Landrieu and his administration for honoring his promise to get this Disparity Study on the budget," said Iam Tucker, a Collaborative member who owns a civil engineering firm. "This study will take some time, but it is time well spent addressing the inequities that Afro-American citizens of New Orleans have been enduring."
Landrieu included $500,000 for the study in his 2016 budget, which he presented to the City Council this morning.
For years, many black business owners have complained that they feel shut out of the city's public procurement process, despite a Disadvantaged Business Enterprise program that requires 35 percent of big public contracts to go to certified DBE firms. Although many DBEs are owned by racial minorities, the program is nominally race-neutral, open to anyone who can demonstrate that they are "socially and economically disadvantaged." As a result, some DBE firms are owned by white women or partnerships that include white shareholders.
Members of The Collaborative say those kinds of DBEs get an outsized share of the business.
Since the program doesn't even record the racial identity of the owners, it's impossible to tell whether that's the case.
Typically, a disparity steady looks at whether the award of contracts reflects the diversity of the market place. Landrieu said in an interview that's why he's funding one for New Orleans. He wants to know if the city's DBE program is reaching black-owned businesses.
While he pitched the study as a fact-finding operation, it could also have legal implications.
Absent clear data, the kind a disparity study is designed to provide, contracting programs that explicitly set race-based hiring targets are vulnerable to legal challenge. If Landrieu's study shows there are disparities, it could potentially clear the way for the creation of a DBE program that does take race into account.
Landrieu said that wasn't the purpose of his funding the study, but he did not rule out changes to the DBE law if the results show the program isn't reaching the black community as intended.
Tracy Riley, another Collaborative member, said that the insertion of specific race-based targets is not her goal, though she acknowledged that others in her organization may disagree. "It sounds too much like affirmative action to me," she said. "We want to compete."
Instead, she said, she wants to have the study so it will show, definitively, the profile of the business owners who are getting work and the profile of the overall market. Riley said the goal should be for the city's contracting partners to reflect the complexion of the community, which is 60 percent black.
When it comes to how that can be achieved, absent setting specific targets or restricting the definition of DBEs so only black-owned businesses qualify, Riley's said she's unsure of how that could be done from a policy standpoint. She is sure of one thing, though, the status quo is unacceptable.