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Source : Contractor News
February 1, 2024
Author : Patty Allen
The City of Milwaukee has taken a significant step towards addressing disparities in city contracts and services, particularly involving minority- and women-owned business enterprises (MWBEs). This move comes after the Common Council’s formal adoption of the findings and recommendations of a crucial disparity study, which revealed substantial under-participation of MWBEs in city contracts.
Conducted by Griffin & Strong, PC (GSPC), the study was commissioned in 2021 to assess the extent of disparity between MWBEs and majority-owned entities in securing contracts government contracts. It covered a five-year period from January 1, 2015, to December 31, 2019, examining prime contractor contracting and subcontracting activities in various sectors such as construction, architecture, engineering, professional services, and goods.
The study’s findings indicated that despite implementing race- and gender-neutral measures, these efforts were insufficient in significantly reducing or resolving the identified disparities.
The disparity study revealed that between 2015 and 2019, the City of Milwaukee paid $500.3 million in prime construction spending within the four-county metro area, with only 8.55% of this amount awarded to MWBEs as prime contractors. The percentages were slightly higher in architectural and engineering services and lower in other service areas and goods procurement. Additionally, the underutilization of MWBEs in prime contracts was evident in all groups except for Black Americans in goods and Native Americans in construction services.
One of the significant concerns raised during the study was the issue of prime contractors using pass-throughs and fronts, undermining the city’s 25% small business enterprise (SBE) hiring goals.
Anecdotal evidence suggested that more than one-third of firms involved in the study had experiences with prime contractors manipulating subcontractor use to circumvent participation goals or simulate good faith efforts in securing city contracts.
In response to these findings, GSPC has made several recommendations to remedy these disparities. These suggestions include