CINCINNATI – Cincinnati City Council voted unanimously Wednesday to change the city's contracting program in an effort to steer more business to local companies owned by black men and women and white women.
The voting marked the most sweeping effort in recent years to address the fact that the city of Cincinnati has awarded a tiny fraction of its hundreds of million of contracting dollars to businesses owned by women and minorities.
A so-called Croson Study unveiled this week showed just how small those fractions have been.
Thomas Corey, director of the city's Department of Economic Inclusion, on Wednesday showed a pie chart to the council's Economic Growth & Infrastructure Committee. The chart illustrated the tiny slivers of dollars that were awarded to women- and minority-owned businesses between 2009 and 2013. That's the five-year period covered by the study, and it examined how more than $1.2 billion in contract dollars were spent.
Thomas Corey
"When you look at the pie and the percentage of the dollars going to African-American businesses, you can hardly get a bite of that pie," Corey said. "It's abysmal."
Now the city is going to change that, Mayor John Cranley said after the vote.
Corey and City Manager Harry Black asked City Council to adopt the Croson Study's recommendations and create a program to steer more contracts to women- and black-owned businesses, specifically.
Read more about the Croson Study and its recommendations here.
Subcontracting goals for the new program are: 17 percent for black-owned businesses in construction; 10 percent for white women-owned businesses in construction; 14 percent for black-owned businesses in professional services; and 16 percent for white women-owned businesses in professional services.
The goals are based on the number of businesses in Hamilton County that are owned by women and minorities and are able and willing to do the work, said Eleanor Mason Ramsey, CEO of Mason Tillman Associates, the Oakland, California, consulting firm that conducted the study.
Councilman Christopher Smitherman, chairman of the Economic Growth & Infrastructure Committee, asked conservative Cincinnati voters to view the recommendations as an issue of fairness.
Mayor John Cranley announces findings of the Croson study. Photo courtesy City of Cincinnati
"You cannot be a conservative and say that you don't support fairness," he said. "Nobody here in the 21st century is looking for a handout. This is not about affirmative action. This is about a level playing field."
Council members acted quickly this week: They received the Croson Study on Monday; Smitherman's committee heard a presentation on it during a meeting that lasted right up until the full council meeting was scheduled to begin.
After a brief discussion, Council voted unanimously to pass Black's recommendations, which also include changes to the city's race-neutral Small Business Program. That's the program that the city has used in recent years to try to help women and minority business owners win more city contracts.
A Few Businesses Have Gotten Most of the Money
The city hired Mason Tillman to conduct the study to find any patterns of disparity in how the government has awarded contracts. The study is named after the U.S. Supreme Court's 1989 decision in City of Richmond v. J.A. Croson Co. That decision required documentation of disparities in order for any city to create a program steering more work specifically to women- and minority-owned companies and withstand legal challenges.
Cincinnati's Croson study found that a small number of businesses – just 96 – won contracts that accounted for 70 percent of the dollars the city spent.
An even smaller number – 38 businesses owned by white men – accounted for half the city's spending.
The study documented how those dollars were spent in three categories: Construction, professional services and supplies and services.
The study found that there are far more black- and women-owned companies that are willing and able to do work for the city than have been winning contracts.
The proposed subcontracting goals are designed to address that.
Councilmembers Chris Seelbach and Yvette Simpson questioned why the study didn't recommend similar goals for the city itself when awarding prime contracts.
The recommendations will set targets for local companies to hire women- and minority-owned companies as subcontractors to do smaller pieces of city jobs. But the city doesn't have goals for how many women- and minority-owned businesses it should hire for the larger, prime contracts.
Ramsey said that's because cities can't set specific goals for prime contractors. Courts have viewed such goals as set-asides, she said, and set-asides are now illegal.
In other words, if the city tries to set goals for itself in how it awards prime contracts, it would be far more likely to lose a legal challenge.
Simpson said if that's the case, the city should find ways to do better because of its own dismal track record when it comes to awarding prime contracts to women- and minority-owned businesses.
"The proof will be in the pudding," Simpson said. "And I'm not prepared to celebrate until contracts are awarded."
Smitherman said the city should be braced for a legal challenge, even with the Croson study. And he said he hopes that, if and when the city is sued, the local regional and ethnic chambers of commerce with join with the city to defend the new programs.
"I want them enjoining and being part of the fight," he said.
Cranley said he's confident that once the new programs are in place and contracts are awarded more equitably, Cincinnati residents of all races will benefit.
"Everybody wins when everyone does better," he said.
Lucy May writes about the people, places and issues that define our region – to celebrate what makes the Tri-State great and also shine a spotlight on issues we need to address. She has been writing about women- and minority-owned businesses in Greater Cincinnati for more than 17 years. To read more stories by Lucy, go to www.wcpo.com/may. To reach her, email lucy.may@wcpo.com. Follow her on Twitter @LucyMayCincy.
