Changes expected for city’s minority business hiring ordinances

Proposed changes to the city’s procedures for hiring minority and women-owned businesses are likely to come before city council this spring or early summer, with advisers and a working group recommending 21 adjustments or major overhauls to hiring practices.

A memo released last week describes the findings of the city’s biennial review of the procurement program regulation for minority and women-owned businesses (MBE/WBE). Central to these findings were the results of a 2022 disparity study conducted by Colette Holt & Associates, which found that the hiring practices of minority firms in the city are mostly successful and well-structured, with some adjustments suggested.

Among the recommended changes to ordinances: reducing the number of ordinances from four to two; eliminate numeric targets mentioned in the regulation to eliminate confusion; Certify companies in the local program using North American Industry Classification System (NAICS) codes; implement a more comprehensive and detailed process for reviewing industry codes when it comes time for a company to seek recertification; and adopt the federal approach to overhaul the policy so that a company remains certified until revoked, rather than a company’s certification “expiring”.

Staff recommendations made in December included strategies for refining the MBE/WBE hiring program. These recommendations included developing written criteria for establishing ethnically specific targets, considering bidding for some contracts without targets that present significant opportunities for MBE or WBE participation, removing the requirement for bidders to place advertisements in newspapers, and the clarification of the standards for counting the participation of certified companies in joint venture arrangements.

The February report from the city’s Department of Small and Minority Business Resources also presented 20 recommendations from the working group, which focused on existing city processes that either have better communication practices or need to undergo minor or major changes.

In September, the Council extended the expiry date of the current regulation to August 31 of this year. This enhancement gives employees more time to improve communication around the five specified practices and begin planning to make the minor adjustments to six other practices.

The bigger changes could be longer in coming, with the report noting that these adjustments “will require more time, effort and cross-departmental coordination, and may require working with outside agencies to implement them.” Staff have begun networking with key partners and look forward to developing a more meaningful timeline for the necessary planning efforts and implementation steps. It is important to note that the recommendations identified as “Major Modifications” may require additional funding and human resources to fully implement and manage them.”

Changes to regulations and practices affecting the hiring of minority businesses have been a long time coming, with the council first requesting a study in late 2018 and $1 million in early 2020, just before the outbreak of the Covid-19 pandemic approved for its funding.

Part of the reason for this initial delay is that only three companies submitted bids to conduct the disparity study required every five years, with the most recent being completed in 2015 by New York-based NERA Economic Consulting.

This work found evidence of corporate discrimination against MBEs and WBEs in the city’s private sector, stating that discrimination is likely behind the finding that women and minorities are less likely to own their own businesses.

In January, the Mayor’s Committee on Persons with Disabilities urged that the city change the MBE/WBE criteria to include persons with disabilities in the preferred class of providers being considered for contract opportunities. In October, at a meeting of the council’s audit and finance committee, Council member Alison Alter urged that disabilities be considered when hiring minority businesses, although executives from the Office of Small and Minority Businesses said those considerations are being handled by the city’s procurement office would have to.

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