Study finds City of Minneapolis deficient in minority contracting

By Charles Hallman
Staff Writer

Business owners Mariaha and Korey Dean helped prioritize the needs and concerns of small businesses.

-Photo by Charles Hallman

A City of Minneapolis disparity study released last November found that the City of Minneapolis should do more to create equal opportunity for businesses owned by people of color and women to compete for contracts.

There is “significant room for improvement” in using more Black-owned businesses and businesses owned by other people of color, noted NERA Economic Consulting Vice-President Jon Wainwright in his presentation to the city council last November. His firm co-authored the disparity study.

“Minneapolis is not alone in this — it has gotten worse rather than better [nationwide],” he surmised. Wainwright suggested that U.S. cities should do disparity studies every five years; the last Minneapolis disparity study was done in 1994, more than 16 years ago.

A number of recommendations to remedy the problem also were included in the 2010 study (see sidebar on front page).

A video of Wainwright’s 45-minute presentation was shown to nearly 30 local small business owners March 15 at the Minneapolis Central Library, invited by Minneapolis Civil Rights Director Verma Korbel.

“This is not a hearing,” she told the audience before participants broke into small groups to discuss and “prioritize” the 13 study recommendations.  “The purpose is to gather information to take back to the Minneapolis City Council as they are deliberating about the disparity study recommendations,” Korbel explained.

Business owners Mariaha and Korey Dean, who own Eden Resources, a local construction management firm, were among the participants in the breakout session. “The unbundling of contracts” and the “target market program” were among the top prioritized recommendations in her group, said Mariaha Dean. “If planned accordingly, those two specifically seem to offer the most opportunities.”

“It’s good to see the outreach effort by the Department of Civil Rights to the local business community,” added Korey.

City Contract Compliance Manager Johnnie Burns said, “It was very informative to see the different perspectives” that were expressed in the small groups. Yet some skepticism was expressed during the breakout sessions as to whether or not the City really will listen to business owners and really improve how it does business in contract procurement.

“This is the same old runaround,” said a Black man. “If improvement is needed, do something about it,” added a Black woman.

Korbel pledged afterwards that, as far as her department is concerned, when it comes to working with enterprises owned by women, Blacks, and other people of color, it’s no longer business as usual.

“I’m sure this isn’t the first time that people had meetings like this, and they wonder what’s going to change or [be done] differently,” Korbel said. “I think that we have some good stability and leadership at the city council level and at the civil rights level and can actually put some of these things that folk identify for us today in place.

“They’re small businesses — they are the ones who support the community. They have really great ideas,” admitted Korbel. “I think this is the perfect time to be talking with them.”

The 13 recommendations in the study were divided into two categories: six “race and gender conscious” and seven “race and gender neutral,” the director pointed out. However, Korbel added, “I can’t guarantee that all 13 [recommendations] will be in place and implemented” by the city council.

“They are the policy setters, and they decide which one of these things we are going to do.”

Nonetheless, a main purpose of last week’s meeting was to get community input, and another such meeting is scheduled for late June. “It’s my job to take that back to the city council working group and tell them what the people in the room thought were the priorities,” said Korbel.

“We are working with civil rights, helping to advise them on their steps as they do more engagement with the community,” said City Council Member Elizabeth Glidden, one of four council members on the working group. The others are Don Samuels, Betsy Hodges and Meg Tuthill.

“There are so many things that we need to do that is part of that disparity study on how to improve how our practices work in the City of Minneapolis,” said Glidden.

“I think the engagement effort is half of the battle,” said Mariaha Dean. “If they are improving plans and processes and changing goals, that means the work is already in progress.”

Charles Hallman welcomes reader responses to challman@spokesman-recorder.com.

Disparity study recommendations

The 2010 City of Minneapolis disparity study presented the following recommendations:

1. Increase vendor communication and outreach, including conducting seminars on how to do business with Minneapolis.

2. “Unbundle” contracts — reduce the size and complexity of City contracts to permit smaller firms to submit bids not only as subcontractors but also as prime contractors [i.e., dividing larger contracts into smaller units so that smaller businesses have a greater opportunity to compete and win bids].

3. Adopt a small underutilized business target market program.

4. Collaborate with other local agencies to provide supportive services for small firms, such as a mentor-protégé program for large City prime contractors and subcontractors; a bonding and contract financing program for certified firms seeking work as prime contractors; and other types of training.

Appoint a contracting task force to develop a regular process for firms to “talk” to the City about concerns.

Improve subcontract, sub-consultant and supplier data collection and retention procedures.

This would include requiring prime contractors, consultants and vendors to submit all pertinent information on a standardized form.

Monitor contract performance compliance. Currently Minneapolis does not actively monitor contractors’ compliance with their commitments to utilize certified small firms.

Adopt new race- and gender-conscious policies and procedures.

Revise the City program that insures that racial and ethnic groups are fully included in seeking City prime contracts and subcontracts.

Adopt overall annual City goals for Black-owned businesses, businesses owned by other people of color, and women-owned businesses.

Set contract-specific goals based on the disparity study.

Continue policies and procedures for good-faith efforts, reviews and waivers of contract goals.

Monitor contract performance and commitments to utilize Black-owned businesses, businesses owned by other people of color, and women-owned businesses.