County may return to race-, gender-based contracting

Study finds large gaps still exist for women-, minority-owned firms.

WEST PALM BEACH — Sixteen years ago, when Palm Beach County was considering ending its genderand race-based contracting assistance program, women and minority business owners warned against the move, documents obtained by The Palm Beach Post show.

Women and minority business owners said their opportunities to get county contracts — already limited by what they described as a pervasive good ol’ boy system that saw most work going to firms owned by white men —

would shrink.

Despite those fears and despite survey data indicating that some of the program’s goals weren’t being met consistently, the county ended the program, moving away from a focus on race and gender to a new program designed to

help small businesses.

Now, after a new study found large gaps still exist in the number and value of county contracts awarded to women- and minority-owned firms and those awarded to white-owned firms, the county is considering the re-establishment of a raceand gender-based program.

The county is asking for public input on the $750,000 disparity study through 5 p.m. Monday.

Commissioners voted to accept the study last month after an acrimonious debate featuring black and female business owners pleading for the re-establishment of a gender- and race-based program and the Associated General Contractors of America’s Florida East Coast chapter questioning the validity of the study and arguing against it as justification for a new program.

The county study was the second to indicate that firms owned by women and minorities got far fewer contracts than their presence in the local marketplace suggests they should have received. A study conducted for the county’s Solid Waste Authority reached that conclusion, too.

Mason Tillman Associates of California conducted both studies.

Whether and how the county implements a raceand gender-based contracting assistance program could have major implications.

In 2019, the Solid Waste Authority is expected to award seven-year garbage hauling contracts worth as much as $450 million. And the county is in the midst of what is expected to be a $700 million-plus public works program, paid for with money from an increase in the county’s sales tax.

Some female and minority business owners have said that, without a race- and gender-based contracting assistance program, they are likely to get little of that work.

Their concerns now echo concerns women and minority business owners expressed in 2002, when the county was considering ending a race- and gender-based contracting assistance program that had been in place since 1991.

A 2002 review of the program found that it “significantly increased participation of women and minority business enterprises in the County’s procurement of goods and services. However, the annual goal for professional services was not met in several fiscal years. In addition, African-American, Hispanics and women-owned businesses in professional services and Hispanics in procurement were underutilized in several fiscal years.”

The program called for the county to set goals for procurement from women- and minority-owned firms and for contracts awarded to them.

Some of those goals were extremely limited. For example, the county’s goal for construction contracts going to women-owned firms was 2.1 percent in the 1991-92 fiscal year and 2.8 percent from 1992-93 through 2000-01. The goals were met in each of those years.

The goal for procurement from black-owned firms was 1.07 percent in 1991-92 and 1.42 percent from 1992-93 through 2000-01. Those goals were also met each year.

Tonya Johnson, director of the county’s Office of Small Business Assistance, said the goals were set “based on the availability” of women- and minority-owned firms. “In some areas, goals were set as high as 15-25 percent,” she said. “Some were zero when there was no availability.”

In professional service contracts to women- and black-owned firms, the goals — 4.05 percent for women-owned firms and 2.4 percent for black-owned firms — weren’t met consistently.

The county failed to hit its procurement target for women-owned firms in 199192, 1992-93, 1994-95, 199899 and again in 2000-01, county documents show.

The county failed to hit its procurement target for black-owned firms in 199293, 1993-94, 1994-95, 199697 and 1998-99.

Despite not hitting those marks, Johnson disputed the notion that the program was not successful.

“The characterization of limited success with the former program is not quite accurate,” she said. “Overall, the program increased participation and utilization of minorities and women in the county’s procurement process.”

A sunset provision called for the program to be ended on Sept. 30, 2002.

The temporary nature of the program was in keeping with common practice, given the legal climate. White business owners frequently sued governments over raceand gender-based programs, arguing that they amounted to reverse discrimination.

Federal court rulings determined that, to have a legally justifiable program, a government had to show that disparities existed in contracting opportunities between those afforded to womenand minority-owned firms and those afforded to whiteowned firms. Only then could a race- and gender-based program be permitted, and it could operate only as long as disparities existed.

As the county was considering whether to end or extend its contracting assistance program, legal concerns were top of mind, county documents show.

Minutes from a March 26, 2002 County Commission meeting indicate that Assistant County Attorney Tammy Fields told commissioners “a compelling government interest” was necessary to maintain a race- and gender-based contracting assistance program and “conceded that might be difficult to establish since the goals of the program had been substantially met.”

The minutes indicate Fields told commissioners that “any extension past September 30 might be challenged and an extension would require an ordinance amendment.”

Women and minority business owners, meanwhile, disagreed with the notion that the program had been so successful it could be terminated.

Using industry terminology to describe minority business enterprises (MBE) and women business enterprises (WBE), a survey found:

■ “The majority of MBEs (60%) and WBEs (51%) strongly agreed or agreed with the statement that a good-ole boy network of contractors, subcontractors and suppliers exist in Palm Beach County, compared to only a small percent of non-minority men-owned firms (18 percent).”

■ “Seventy-two percent of MBE business owners and 60 percent of women business owners strongly agreed or agreed with the statement that the good old-boy network negatively affects large numbers of small businesses but the effects are felt the greatest among M/WBEs. In contrast, only 13 percent of non-minority men-owned business owners strongly agreed or agreed with this statement.”

And women and minority business owners were clear on what they thought would happen if the contracting assistance program ended.

“An overwhelming majority of MBEs (81%) and WBEs (74%) strongly agreed or agreed with the statement that if the Palm Beach County’s M/WBE Program were to end, the participation of M/WBEs in County procurement activities would be significantly reduced, compared to less than one-quarter (23%) of non-minority men-owned businesses,” the survey reported.

That was also the conclusion of the consultant the county hired to review its contracting assistance program.

Still, commissioners voted 5-1 to end the program.

Then-Commissioner Addie Greene, the only black member of the County Commission, cast the lone vote against ending the program.

Greene said she is astonished that the same debate is taking place today, nearly three decades after the county first moved to address disparities in contracting.

“For 30 years — 30 years — we’ve been talking about minorities being treated fairly,” she said. “It’s really embarrassing that we are still going back and forth. It is ridiculous that we are still fighting for the same thing.”

The AGC’s Florida East Coast Chapter has pressed its case against using the Mason Tillman studies as justification for the re-establishment of a race- and gender-based contracting assistance programs.

The chapter’s chief executive officer, Michelle Anaya DePotter, pointed to a review ASG paid for showing the Solid Waste Authority study to be “too flawed” to be relied upon as the basis for a raceand gender-based program.

DePotter said the county violated its own procedures in hiring a consultant to review the disparity study and that The Post’s reporting on the issue has been “narrow and one-sided.”

DePotter said discrimination is not the reason for disparities in county contracting. The problem, she said, is that too few women and minority business bid for county work.

“Reality is, we have an availability, capacity issue, lack of qualified and willingness issue in this county of contractors pursuing work,” she said. “That doesn’t equal rampant, nor intentional discrimination, which would call for racial conscious programs, an extreme remedy. The produced study does not line up with the reality of public contracting in this county.”