The City of San Diego recently conducted a disparity study, their first in more than 25 years, revealing the lack of city contracts being awarded to W/MBEs (Women/Minority Business Enterprises). In the past about 36 percent of the contracts were awarded to businesses owned by white women, while minority owned businesses only received about 20 percent. 

San Diego already has the SLBE/ELBE (Small Local Business Enterprise/ Emergent Local Business Enterprise) program, but some local small business owners say more needs to be done.

Currently, preferential treatment in contracting is banned by State law which can make it difficult to review policies in order to benefit women- and minority-owned businesses. Council member Monica Montgomery Steppe, who has fought for this specific type of policy revision, expressed her determination to take the risk and “fight to be fair and equitable”. 

The City of San Diego will have to take risks and test the legal boundaries of Proposition 209, a California ballot measure that does not allow racial or gender preferences unless they are narrowly tailored and there is government interest in these preferences. Council member Sean Elo-Rivera expressed the necessity for a legal fight when the economic prosperity for the city of San Diego residents that have been excluded for many years from city contracts that create thriving communities and businesses, is what is at stake.

Several remedies have been suggested by city consultants which focus on assisting small businesses get more contracts, including women- and minority-owned businesses. One strategy includes splitting large contracts in order for smaller businesses to have the capacity of filling them. In addition to the splitting of large contracts, there is another proposal to ensure that city officials pay contractors promptly; the speed of payment impacts small businesses because they usually have more narrow bottom lines, making it difficult to to wait months for payments. 

It is also recommended that the city revise and expand its Small Business Local Enterprise (SLBE) Program to include women- and minority-owned businesses. Although this is the recommendation, there has not been a California agency to successfully use race- and gender-conscious measures as part of awarding contracts since Proposition 209 passed. 

San Diego’s deputy director of contracts, Claudia Abarca stated that city officials plan to propose a list of remedies to present to the council’s Budget and Government Efficiency Committee. Council members stated that San Diego aims to move quickly in order to make change.