The city of Chattanooga is looking to boost diversity in its use of contracted vendors after a study showed just 10.78% of business awarded over four years went to minority- and women-owned companies.
The study presented to the City Council this past summer assessed the city's contract spending in construction, architecture and engineering, professional services, other services and goods to analyze the availability and use of African American, Hispanic, Asian American, Native American and Caucasian woman-owned businesses and enterprises.
"If you kind of put all of these comments together, what you're really getting is a sense of being marginalized, not being heard, not being given an opportunity, that there's a 'good ole boy' network," Michele Jenkins, project manager for consultant Griffin & Strong told the council in June. "And a lot of that ultimately comes down to needing to do a lot more outreach, a lot more incentives, a lot more pulling in that ... community."
Over a five-year study of contracts by the city in the relevant market, anywhere from 0.23% to 8.59% of business went to companies in each category studied.
The study compared Chattanooga's use of each type of vendor to the percentage of eligible businesses in the market owned by that demographic group.
In 25 categories — five minority groups across the five industries — 21 showed statistically significant under-utilization, three showed some under-utilization and one showed over-utilization.
"It pretty much is in every area, in every category, except in other services, Hispanic American-owned firms were over-utilized," Jenkins said.
The report found that under-utilization of women- and minority-owned contractors was not a result of a lack of bidding or capacity for performance, but showed discrimination against such contractors.
"Disparity analysis results are consistent with disparities in winning prime contracts with the city of Chattanooga, and are being driven by discrimination," Jenkins said.
Now, the city is looking for ways to combat the problems highlighted this summer.
"What our team has been trying to do is look at that holistically," city Deputy Administrator Tony Sammons said Tuesday. "Meaning, look at those things that we can compartmentalize in to low-, mid- and long-range strategic goals for us."
According to Sammons, the goal is to create more operational changes than one-time fixes, in hopes to level the procurement playing field beyond the end of the current administration.
"We're looking to develop strategic plans that will allow them to be woven into what we do on a daily basis," he said. "And even beyond our terms serving in our various roles serving the city.
According to Karen McReynolds, director of the city's Office of Multicultural Affairs, just 10.78% of total contract awards in the disparity study went to women and minority-owned vendors, despite 22% of eligible businesses being women or minority owned.
"That was found to be a significant under-utilization of minority and female-owned businesses," McReynolds said, outlining a three-stage plan to close the gap between these and white male-owned businesses.
To start, she said that the city has been culling feedback from local businesses, including virtual vendor fairs, surveys, and other events before the pandemic began.
"We have to listen to our constituents and find out who is being most affected by what we're doing in the city," McReynolds said. "So we did a lot of work in and around this."
IN THE SHORT TERM
Over the next three to six months, the city wants to begin to address the study by building on existing city programs and services to help engage more diverse vendors, including:
— Renaming the current Supplier Diversity Initiative to be called Minority- and Women-Owned Business Enterprises to "become more inclusionary" and provide a "strength-based description."
— Proposing a council resolution to acknowledge the findings of the disparity study.
— Presenting a draft implementation plan.
— Enhancing the city's reciprocal certification process by helping vendors get third-party certifications, enhancing vendor access to social capital and provide training on doing business with the city.
— Improving coordinated vendor outreach, as recommended by the study, with coordinated events and ongoing supplier portal registration services.
IN THE MID TERM
Over the next year, the city will focus on attracting new bids from diverse vendors, by:
— Utilizing contract forecasting to identify and publish expiring blanket contracts and host events to alert minority- and women-owned businesses of upcoming opportunities.
— Using language in prime contractor agreements to ensure prompt payment of subcontractors.
— Using data to monitor spending, certifications and verification, and make bidder data more accessible
IN THE LONG TERM
Eventually, the city wants to:
— Unbundle large existing contracts to allow small businesses more opportunities to take on smaller projects.
— Track utilization of subcontractors.
— Set subcontracting goals to encourage the use of a diversity of subcontractors.
Over time, the city was also recommended to hire an equity officer and a contract compliance officer, provide compliance training for purchasing personnel, work to develop small businesses and explore initiatives to help women- and minority-owned companies to pursue non-city contracts.
But according to McReynolds, those items will require significant outside partnerships and budgeting and won't be on the immediate plan.
"This is kind of where we landed in terms of what we can do," McReynolds said. "But we certainly wanted to share with you the remaining strategies and let you digest that as you would."
Contact Sarah Grace Taylor at email@example.com or 423-757-6416. Follow her on Twitter @_sarahgtaylor.