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Minority contracting: a look at the numbers

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

Following on last week’s outpouring of support for Superintendent Arlene Ackerman, six more speakers addressed the School Reform Commission Wednesday in defense of the superintendent against recent critical comments from elected officials and reports in the Inquirer – and urging more efforts to direct business to minority business enterprises (MBEs).

But how is the District actually doing in its efforts to direct a share of its contracts to MBEs?

The most recent available public information on this question is from a mostly upbeat presentation from an SRC meeting March 10. It was delivered by John Byars of the procurement department – one of the six employees that Ackerman put on administrative leave and placed under investigation. This action was apparently in connection with the leak of confidential information to the Inquirer about a no-bid contract awarded on an emergency basis to a minority firm to install security cameras in schools after a White-owned company had reportedly started work on the job.

Byars’ March presentation, the positive spin of which largely went unchallenged by the SRC, highlighted the progress made by District staff under an anti-discrimination policy adopted in 2003. Byars reported that minority and woman-owned business (MWBE) participation in contracting grew dramatically from 2 percent in 2003 to 27 percent by the end of 2009, thanks in part to the establishment and enforcement of a 20 percent goal. The presentation said that the District’s results compared favorably against minority business participation rates achieved by the city and by SEPTA.

The 27 percent participation figure, which was for the second half of 2009, reflected a sharp increase from the previous year. The best results for the period were in design and construction, with 41 percent MWBE participation. For the same period, 21 percent of District contracting dollars for professional services and 17 percent of procurement dollars went to MWBE businesses.

However, a further breakdown of the MWBE dollars from the second half of 2009 (see page 13-14 of the pdf – the column headings are missing but the fourth column is the totals), shows that slightly less than half of the total MWBE contracting dollars went to African American businesses – $25 million or about 13 percent of the total contracts that July through December.

While the District was exceeding most of its MWBE goals, looking exclusively at the percentages for African American businesses, one sees participation rates in contracting that still lag far behind the African American share of the city’s or District’s population. And there are large parts the District’s contracting business that are not covered by the MWBE participation plan – areas such as utilities (see pages 7-8 of the presentation), which represent a majority of contracting dollars.

Given that total contract dollars to African American businesses in the second half of 2009 were just $25 million, a $7.5 million dollar job to a Black contractor is apparently a rare occurrence. Putting aside the crucial issue of whether Ackerman and her team flouted proper procedure in awarding it, the job given to IBS Communications to install the cameras in this fall would likely represent a major boost in the overall dollar share for African American businesses.

W. Cody Anderson, a longtime owner and operator of radio stations, raised another point to the SRC on Wednesday. "I have been directly affected by a culture that has long existed in our city and state – a culture that relegates African Americans and other ethnic minorities to subcontractor status.

"We have been forced to ask for small pieces of contracts, because a closed network of decision-makers has never viewed our businesses as competent to compete for prime contractor status," Anderson said.

Anderson and the speakers after him applauded Ackerman, proclaiming that her action in the IBS case reverses a history of bias. He emphasized that no-bid contracts have historically been used to exclude minority businesses from District work, and questioned why there has been no investigation of that side of the coin.

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