A “sheltered market program” has been approved by Boston's city council.

With backing from the council, Mayor Michelle Wu’s proposal for a program will now allow the city to make some contracts only available to disadvantaged businesses. 

Boston’s Chief Procurement Officer and Chief Financial Officer Justin Sterritt has been tasked with developing procedures for the program.

“The City of Boston spends approximately $560 million annually in discretionary dollars for the procurement of goods and services,” wrote Mayor Wu to the City Council earlier this month.

She went on to cite a 2020 study that found that the city was drastically under-awarding contracts to minority-owned businesses, with just 1.2 percent of contracts going to black and Latino-owned businesses during the term of Mayor Marty Walsh between 2014 and 2019. Walsh is now the Labor Secretary for the Biden Administration.

Black-owned businesses had the highest rate of firms available to work with the city, but during this time, they got just 0.4 percent of prime contracts.

“The City is committed to addressing the historic and structural barriers that have contributed to inequitable economic investment in businesses across Boston, using every tool at its disposal to increase the diversity of its contractors and suppliers, promote equitable access to city contracts  and build a more inclusive economy,” Wu wrote.

The program will set aside six contracts to be awarded to disadvantaged businesses to be awarded by June 30, 2022.

“The challenges surrounding procurement are complex, and require using every tool available to help close persistent gaps and inequities in City contracting,” Chief Procurement Officer Justin Sterritt said. “This sheltered market program builds on a series of reforms and Council orders to improve the procurement process and increase opportunity for new and diverse vendors.”