Black ExperienceLocal Business

Task Force Questions Racial Disparity in City Contracts

An ad hoc group of African-American entrepreneurs have organized to request the D.C. government produce a study on how many Black businesses and firms are getting city government contracts.

The DC Black Business Task Force called for the study to determine whether the government has been meeting its goals in regard to awarding contracts to Black-, minority- and women-owned businesses, as well as to identify potential contracting opportunities.

The purpose would be to examine whether there are disparities between the contracting dollars the government’s contract awards to Black-, minority- and women-owned businesses and the amount they might be expected to receive based on the number of such businesses available to perform the work among the total pool of eligible contractors.

Disparity studies has a factual foundation that the District government can use to help ensure that all of its agencies are using procurement processes that result in fair and equitable outcomes.

Local governments are not required to have disparity studies but they may work to support the constitutionality of a minority/women’s program. In the District, the vehicle would be the certified business enterprise program.

Alfred D. Swailes, owner of A&A Premium Paint Distributor in Northeast and spokesman for the task force, said a disparity study of the District’s Certified Business Enterprise (CBE) needs to take place. The CBE program offers preferences in contracting opportunities for firms operating in the District that participate in it.

Swailes said he and other Black businesses leaders in the District sense that they aren’t getting their fair share of city government contracts but can’t quantify that claim.

“The CBE program is race and gender neutral, meaning that getting city business cannot be based on race or gender preferences,” Swailes said. “We don’t know how many Black businesses are getting city business, but it isn’t enough. I have talked to a number of Black business owners and they say they aren’t getting any business from the city but they can’t prove it because there is no data to back that up. We want to make sure that the CBE process is fair and equitable to Black businesses.”

Michael Smith, who owns a business in the District, echoed the need for a disparity study.

“I have been in business for over 30 years and I have heard anecdotes from other Black businesses about this issue,” Smith said. “It is hard to put your finger on it. I have gone after opportunity after opportunity and I have dotted I’s and crossed t’s.”

Smith admits to being puzzled about why he hasn’t gotten business lately.

“The city does give you a chance for review as to why you didn’t get the contract,” he said. “When I went through the process, you can just feel things and you hear similar stories.”

Smith said the process becomes irritating when new businesses that are not likely not African-American-owned come to the city and get contracts.

“What is their background?” Smith said. “Why are they able to get the contract? You can sense when something is not right.”

At one time, the District had one of the most robust Black set-aside programs in the country. Marion S. Barry, who served as mayor of the District from 1979-1991 and 1995-1999, made it a point to advocate that Black businesses get District government contracts.
At one point, in the 1980s, the District received national attention when 35 percent of all the city’s business went largely to Black businesses and professional firms.

However, that preference changed when the U.S. Supreme Court ruled in the case of City of Richmond vs. Croson in 1989 that Richmond’s minority set-aside program, which gave preference to minority business enterprises (MBE) in the awarding of municipal contracts, lacked constitutionality under the Equal Protection Clause of the U.S. Constitution. The court found that the city failed to identify both the need for remedial action and that other non-discriminatory remedies would be insufficient.

On the basis of Richmond vs. Croson, the District government went to court when O’Donnell Construction sued it in 1990 over its set-aside program for Black businesses. The U.S. Court of Appeals for the District of Columbia ultimately took the side of the construction company, saying the District “must have a strong basis in evidence” to support its racially-based program.

“The District cannot simply rely on broad expressions of purpose or general allegations of historical or societal racism,” Judge A. Raymond Randolph wrote in his opinion. “Rather, its legislation must rest on evidence at least approaching a prima facie case of racial discrimination in the relevant industry. The District’s response to the problems of the past — if these have been satisfactorily demonstrated-must be narrowly tailored to achieve its end.”

The O’Donnell decision eventually led to the creation of the District’s CBE program.

D.C. Council member Kenyan McDuffie (D-Ward 5), who chairs the council’s Committee on Business & Economic Development, said that he’s not familiar with the task force and could not comment on its efforts but noted that he has supported what he refers to as disparity studies by the District Department of Local and Small Business Development (DLSBD).

The office of fellow Council member Trayon White (D-Ward 8), however, supports the efforts of the disparity study dealing with Black businesses and wanted to move forward earlier this year but was rebuffed by McDuffie.

McDuffie called his efforts and White’s duplicative, and White’s staff decided to wait for the Ward 5 lawmaker’s next move.

Kristi Whitfield, director of the DLSBD, said she is aware of the task force’s concerns and has been in contact with them.

“In fact, we already have some studies in progress focusing on minority- and women-owned businesses, prime contractors and/or subcontractors,” she said.

Whitfield notes that her department conducts a triennial review of the programs and “will be looking at a lot of data regarding the state of the program through the lens of equality which is near and dear to my heart and to the heart” of Mayor Muriel Bowser (D).

Swailes said Black businesses aren’t well-organized in the District and that needs to change in order to get the disparity study done and for progress in getting government contracts to take place. He said he would like a town hall meeting in the District to take place in September or October so that the topic can be addressed.

“People need to vent their frustrations on this and it needs to be on the record,” he said.

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