Kansas City Council approves revisions to MWBE program

MO News - Published Nov 01, 2018

The Kansas City Council has unanimously approved a slate of changes to the city's minority- and woman-owned business (MWBE) program, in areas related to certification, contract goals, and self-performance. The changes come after a 2016 disparity study conducted for the city recommended that the program specifications be more "narrowly tailored," in order to avoid legal challenges.

Foremost among the changes is a rise in the MWBE participation goals - they will now stand at 14.7 percent MBE participation and 14.4 percent WBE participation. In addition, certain procedures related to certification will now make more allowances for the different circumstances of businesses: a business that is owned by a woman who is a minority, for example, will now be able to register as both an MBE and a WBE, instead of having to choose a single certification. Also, a business is only required to be established in Kansas City for six months prior to certification, rather than for a year, as it was before. There is now, in addition, a net worth requirement; an eligible contractor, to be certified as an MWBE, must have a personal net worth of no more than $1.32 million (excluding equity in the business or a home).

One new practice added to the program provoked some controversy - MWBEs are now eligible for "self-performance", meaning that any MWBE that is acting as prime contractor can use their own business as a way of fulfilling participation goals, rather than reaching out to other MWBEs. Some smaller MWBEs warned that this would disadvantage them; however the self-performance procedures are now part of the MWBE program.

Another change that attracted controversy in the drafting phase was related to oversight of the good-faith effort primes must make in fulfilling MWBE participation requirements. There had been a dispute as to whether the final word on who has fulfilled a good-faith effort should belong to awarding agencies or to the MWBE program itself. For now, on city projects, the MWBE program has the final say, and agencies have the final say on projects that are incentivized with tax abatements, with disputes to be brought before a Fairness in Construction Board appointed by the mayor.

A new category of certification has also been added for socially disadvantaged businesses: businesses owned by people who are disabled or are LGBT, for example. No goals have yet been specified for this category of business.