10 Conclusions from the New Orleans Disparity Study
Updated: Apr 9, 2019
1. There was a strong need to conduct the 2018 City of New Orleans Disparity Study.
2. Because there is substantial availability of minority- and women-owned businesses in the New Orleans metropolitan area, one would expect high utilization of minority- and women-owned businesses (MBE/WBEs) in the marketplace and in City procurement.
44 percent of local businesses available for City work are MBE/WBEs.
MBE/WBEs might be expected to receive 41 percent of City contract dollars if there were a level playing field for minority- and women-owned firms.
3. Analysis of the New Orleans marketplace suggests that there is not a level playing field for minority- and women-owned businesses.
There is evidence of disparities for people of color and women in entry and advancement, business ownership, access to capital and business success.
There are substantial disparities in the utilization of MBE/WBEs.
There is qualitative evidence of discrimination against minority and female business owners.
Without City action, there would be disparities in MBE/WBE utilization in City contracts.
4. To avoid being a passive participant in marketplace discrimination, there is a need for City efforts to assist minority- and women-owned companies in its procurement.
However, race-conscious programs are subject to legal challenge based on the equal protection clause in U.S. and state constitutions. Gender-conscious programs can be challenged as well.
5. The City currently operates a program that determines eligibility based on factors other than race or gender.
To achieve its overall goals for MBE/WBE participation, the City operates the State and Local Disadvantaged Business Enterprise (SLDBE) Program.
To be certified as an SLDBE, a firm must show that it is socially and economically disadvantaged. Determination of social disadvantage is not based solely on race, ethnicity or gender.
The City’s current operation of the SLDBE Program is relatively new.
6. In recent years, overall MBE/WBE utilization on City contracts roughly matched what would be expected based on the availability analysis. This was due in part to some very large contracts going to a few MBE/WBEs.
7. Digging deeper, there were disparities in utilization in City contracts for some MBE/WBE groups for some types of work, including Asian American- and Hispanic American-owned firms, overall, and African American-owned construction firms.
8. On types of City contracts where the subcontracting goals program was not typically applied, there were substantial disparities between utilization and availability for each minority group and for white women-owned firms.
9. The City might consider adding stronger measures to its SLDBE Program, including programs focused on vendors, prime contractors and consultants.
The City should change the name of the program to the Socially Disadvantaged Business Enterprise Program (SDBE), the Historically Underutilized Business (HUB) Program, or other name.
As much as possible, there should be centralized, unified certification of firms eligible for other local programs using these same criteria.
The City should consider additional measures that specifically assist vendors, consultants, prime contractors and others directly bidding on procurements.
The City should further expand its outreach to groups that showed disparities in its contracts, especially Asian American- and Hispanic American-owned companies and African American-owned construction firms.
10. To maintain defensibility of the Program, the City will need to closely monitor its operation and results in the future, and make additional changes if needed.
(Source: 2018 City of New Orleans Disparity Study Final Report)