The city of Durham and Durham County have longstanding policies to encourage contracting with minority- and women-owned businesses, but those policies aren’t working very well.
While such companies are regularly hired as subcontractors in some fields, they are “underutilized” in others, and significantly underutilized as prime contractors for construction, architecture and engineering, and purveyors of services and goods, according to a Disparity Study ( nando.com/disparity) jointly commissioned by the two local governments.
“We’ve got a lot of work to do,” City Manager Tom Bonfield said.
The city and county paid the Atlanta law firm Griffin & Strong $150,000 each to look at contracts from 2007-12 and at firms qualified for goods and services in the regions the city and county do their business.
A Griffin & Strong representative was scheduled for a presentation on the study at Thursday’s City Council work session, but due to illness the presentation was postponed until March 5.
County commissioners heard the presentation earlier in February, Commissioner Ellen Reckhow said. They were pressed for time and did not have the full written report, so they put off an extended discussion of it.
“One of the main recommendations to the county is that we consider adding additional staff, because we just have a half-time position allocated” to the MWBE program, Reckhow said.
“That’s something we need to look at during the budget process,” she said.
“We have some work to do,” said commissioners Chairman Michael Page. “This is something we’ve been dealing with for a long time and ... we need to try to address how we can improve.”
The study found of the $206.1 million the city spent in the five-year study period, only $5.5 million, or 2.66 percent, went to minority- or women-owned prime contractors. Of the county’s $313.6 million, $19 million, or 6.07 percent, went to such firms.
City Councilman Steve Schewel, who frequently raises questions about gender and racial equity when contracts come up for council approval, said that finding was “dismaying.”
“This is a hot topic of conversation at our work sessions, often. We have known that minority contractors are under-represented,” Schewel said.
“When we do large contracts it’s often said there’s not a qualified minority firm that can do the work,” he said. “The people who did this study felt that there are in our region enough contractors and providers large enough to carry the weight of our large contracts."
Among other things, Griffin & Strong recommended revising policies and oversight and creating steering committees in each government to monitor contracting practices.
It suggested that some contracts too large for many MWBEs to handle could be broken into several smaller ones, opening more opportunity for underused firms, and that the city and county encourage joint ventures between MWBE and “nonminority” firms on big jobs.
Another suggestion was a program for established and relatively large minority and female companies to mentor newer and smaller firms.
The study further noted that both programs focus exclusively on black and female contractors, leading to the under-use of Hispanic-, Asian-American- and American Indian-owned companies. It recommended broadening the programs’ scope to include those groups.
“I would think for Durham that would mainly mean Hispanics, because we have so many Hispanic businesses here,” Schewel said.
Together or separate?
“Based on the information and recommendations we’re going to go back and re-write our disparity ordinance as well as the policies and practices,” Bonfield said. In a memo to council members, he proposes to have an “implementation strategy” ready for council review in September.
“That’s our goal, and there’s a lot of work to be done,” he said. “Obviously (with) some public comment and participation as well. ... there’s some legal considerations, too.”
Bonfield said he expected the city and county would decide what to do about the findings separately.
“A lot of the background and research data was going to be the same so we felt like it made sense to jointly fund the study,” he said, “but I never really felt like we were going to realistically jointly develop a policy.”
Reckhow, though, said there could be advantages in working on some issues together.
“What jumps out at me ... is whether there’d be any merit to looking at merging the function across city and county or at least having much greater coordination,” she said.
In interviews for the Disparity Study, “Very often the contractors referenced working with both the city and the county and appeared at times to complain about the paperwork, the lack of training, things of that nature. The need for mentorship,” Reckhow said.
“If we have firms that are working with both the city and the county, couldn’t we help these firms by having a unified process so that it’s the same paperwork and we have the same training sessions and arrange for mentorships together? I would also think there would be economies of scale,” she said.