LA's Mayor Signs New M/WBE Directive

LA spends $4.5 billion annually on products and services.

Source : Contractor News

September 29, 2022

Author : Alex Bustillos

Los Angeles is home to more than 1.3 million small businesses. For that reason city officials regularly seek out ways to support small businesses.

In the latest example, Los Angeles Mayor Eric Garcetti issued an executive directive (ED 35), a day before Women’s Equality Day. The purpose is to improve the city's contracting and procurement process for women and minority-owned businesses. The order was based on the recommendation of a study conducted by the LA County Economic Development Corp.

It directs city departments to collect certain data about the procurement process for public contracts. Collecting additional data will pave the way for greater inclusion of small businesses in the procurement process. According to Garcetti, the directive also expedites contractors' payment procedures, gives subcontractors resources, and streamlines business support and outreach.

“Women strengthen our economy, families, communities, workplaces, and city, and yet they face obstacles and inequities every day,” Garcetti explained. “This directive, guided by our study, will provide a sturdy foundation for future equality in economic growth.”

The LAEDC study examined the rates of contracts awarded to women and minority-owned prime contracting firms and the percentages of subcontract expenditures allocated to women and minority-owned businesses for numerous city agencies.

 “The City of Los Angeles made great strides to reform and improve its procurement environment. Despite these positive steps, the city still trails other major cities when it comes to implementing a strategic approach for women-owned businesses to be better represented in the share of procurement dollars,” said Bill Allen, President, and CEO of LAEDC.

Los Angeles World Airports, which handles the LAX and Van Nuys airports, was one of the worst-performing city agencies. From 2017 to 2021, female-owned prime contractors received 2% of contracts, but female-owned subcontractors received only 6% of payments.

The city's Public Works department ranked among the best, with 22% of prime contractor payments going to women-owned businesses. 

Women own more than 20% of all enterprises in the LA metropolitan area. Women-owned businesses account for over half of all minority-owned firms, while women-owned businesses account for fewer than 10% of all businesses in the Los Angeles Regional Alliance Marketplace for Procurement (RAMP), the city's platform for contracting opportunities. Women-owned firms are disproportionately underrepresented in the City's procurement process regarding the share of allotted procurement spending awards.

“With the Mayor’s executive directive and the delivery of RAMP, the City is improving the procurement process and data collection while ensuring equal access to the City’s procurement and contracting opportunities,” said Shannon Hoppes, the City of Los Angeles’ Chief Procurement Officer.

LA spends $4.5 billion annually on products and services. This spending power affects the local economy, contracting businesses, and workers. Strategic procurement is crucial to a transparent and economically responsible government. Officials say it can help to achieve the city's equity, economic, and environmental goals.

Garcetti explained furthermore that women and small businesses make up the backbone of California’s economy. He added that "this directive, guided by our study, will provide a sturdy foundation for future equality in economic growth." He opined when a woman is thriving; it helps the City to thrive as well. 

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Category : Minority Business Enterprises Minority Women Business Enterprises Small Business Enterprises Women Business Enterprises Local Government

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