By Macy Meinhardt, Voice and Viewpoint Staff Writer
The City of San Diego spends millions of dollars on goods and services through city contracts on an annual basis, generating a vast market opportunity for businesses. However, the process to compete for and ultimately secure a city contract continues to preclude women and minority business owners.
In July 2022 the San Diego City Council unanimously agreed that they were dedicated to making city contract procurement figures reflect the diverse population of the city, after a disparity study identified historical exclusion of minority businesses. Now a year and a half later, data exposes a stale progress-report for the city.
Data disclosed to Voice and Viewpoint for fiscal years 2022 and 2023 reveal an ongoing prominent gap between contracts being awarded to Black-owned businesses versus white-owned businesses.
In 2022, 314 construction contracts were granted to caucasian companies, while only four were awarded to African-American businesses. For architecture and engineering consultants, 308 caucasian firms were awarded contracts, whereas zero were awarded to identified African American firms.
“The city, and the county is not much better, does not award contracts to minority businesses, particularly Black businesses, the way they should,” said Councilmember Pro tem Monica Montgomery Steppe at the Rolando City Council Supervisor forum, in regards to how racism is baked into the city.
Minority business owners in the fields of construction, professional services, and goods and services face substantial inequalities when it comes to securing contracts with the city. Largely, this can be traced back to a historical lack of strong working relationships between the city and businesses of color.
“The reality is that there isn’t a long history of women and minority owned businesses having secured those contracts and being utilized for the city,” Council President Sean Elo-Rivera explained in an interview with Voice and Viewpoint.
“That in itself presents a barrier because there isn’t the kind of ongoing business relationship that might otherwise exist. And nor are there the ongoing practices of knowing the kind of rituals and routines that go with wanting to do business with any sort of entity.”
Barriers such as these were analytically identified in a 2020 Disparity Study the city paid approximately $500,000 for BBC Research and Consulting to conduct.
Results of the study substantiated claims that the city’s business dealings are not reflective of San Diego’s diverse local market. Findings from the report state that African-American owned, Native-American owned, and woman-owned contractors are awarded between 20 to 36 cents to every dollar that they should have been awarded based on market availability.
“For every dollar the market estimates would make it into the pocket of those workers to support their families in our professional services contracts, those families got nothing,” said Councilmember Raul Campillo, in a previous city council meeting.
“The data in the study is so far from what is expected, it cannot be explained as a natural consequence of the market,” Councilmember Campillo remarked, “We have to ask ourselves, how can the data be so skewed?”
Utilizing this report, the City Council passed numerous measures at the July 2022 meeting intended to create a more inclusive process for small and minority business owners looking to get a government contract. However, impact or any difference at all has yet to be reflected in today’s numbers.
Data accumulated from the Equal Opportunity Contracting Department (EOC) for 2023 so far shows that the City has awarded over $642 million dollars in contracts to 426 Caucasian firms, yet has only awarded $4 million dollars to 4 African American firms.
In speaking with the EOC Program Manager Christian Silva, he noted that since the city can’t legally require contractors to report demographics, the category “Caucasian” was assigned as a default if information on race or ethnicity wasn’t reported.
Meanwhile, the absence of improvement among the data may be attributed to San Diego’s legally cited resistance to implement race and gender conscious programs into their contract procurement. Race and gender conscious measures are specifically designed to encourage the participation of minority- and women-owned businesses in government contracting. However, due to Prop. 209, a 1996 amendment to the California Constitution that largely bars discrimination or preferential treatment based on race, sex, and gender, the city faces challenges trying to go against it.
As a result, the city has instead been continuing along the path of race and gender neutral measures and have incorporated plans to make limited adjustments that do not explicitly target race and gender but still aim to help minority owned contractors.
Some of these additions include adding more staff to equal opportunity contracting, and periodically providing updates to the Council and the community on their diversity implementation progress. Again, that was agreed on a year and half ago.
When asked on the status of these implementations today, Silva said that the department has not been able to produce any publicly available progress to the council or the public.
“We’ve been struggling here. We’ve had limited staff at EOC. And we’ve had a lot of staff turnover for various reasons. So we weren’t able to go to [the] council last year, however, we are going this fiscal year.”
While Council president Elo Rivera doesn’t believe these race and gender neutral measures are entirely “worthless”, he notes that “ they will never get to the core of the matter in the same way that racial race conscious programs will.”
Voice and Viewpoint will be continuing to investigate this matter for additional follow up stories in future issues. In the meantime we encourage readers and organizations to reach out to our paper with any comments, concerns and perspectives on the topic of equal contracting. [email protected]
