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City of Columbus completes disparity study

OH News - Published Jul 26, 2019

The City of Columbus has published a disparity study examining whether minority- and women-owned businesses (MWBEs) were underutilized on city contracts between 2012 to 2015. This is the first such study conducted by the city since 1992 and is expected to form the basis for proposed revisions involving race- and gender-conscious methods for remedying utilization disparities to the city's contracting programs.

"The completion of the disparity study serves as a first step in helping us to evaluate where we’ve been with respect to our engagement of minority- and women-owned companies," said Damita Brown, the city's Interim Director of the Office of Diversity and Inclusion. "More importantly, it serves as a blueprint for us in advancing policies, programs, and services that uplift MWBE companies; transforming the lives of our residents, neighborhoods, and growing local economy."

The study found that businesses owned by black men and black women in particular were among the most underutilized businesses across the board. The executive summary of the study listed black-owned businesses as having a 5.58 percent utilization rate in construction, 8.69 percent rate in professional services, and 3.18 percent rate in goods and services, despite the fact the availability of such firms in said fields were 19.83 percent, 22.41 percent, and 17.94 percent, respectively. Disparities and findings of underutilization were also noted for the other categories of businesses analyzed (those being Asian Americans, Hispanic Americans, Native Americans, and Caucasian women), in at least one or more of the fields of construction, professional services, and goods and services, and taking into account both prime contracts and subcontracts.

The study recommended bid discounts for the categories of construction and of goods and services, as well as incentive credits for professional services, as a means of remedying the disparities and underutilizations for prime contracts discovered by the study. In the field of subcontracting, the study recommended placing MWBE participation goals on construction and professional services purchase orders. Further recommendations were made for enhancing the city's supplier diversity program, including but not limited to hiring more staff, creating a business advisory council appointed by the mayor which would advocate for MWBEs, offer more training, conduct more outreach, revise prequalification requirements to be less onerous for MWBEs, modernize the city's financial management system to avoid payment delays, and centralize the process of registering as a vendor and getting certified.

Richard Hobbs, president of the Associated General Contractors of Ohio, however, spoke negatively of the usage of race- and gender-conscious remedies, and some expect that the results of the study will be challenged. The basis of such a challenge may come from a delay the study encountered in 2018, when it was discovered that the city had initially provided bad data to the consultants conducting the study, and was effectively double-counting certain contracts due to tracking techniques that were incommensurable between different departments. While the study was delayed to take account of corrected data, adding to the eventual price tag for the city, the development may result in intensified scrutiny of the methods and conclusions adopted by the study.

The executive summary of the study may be downloaded via a link in the city's press release, available at https://www.columbus.gov/Templates/Detail.aspx?id=2147511190.