Disparity Study: A tool towards equitable procurement
Reversing decades of inequity requires thoughtful, collaborative, rigorous work.
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The City of Boston is focused on strengthening business opportunities for people of color and women.
We have focused on rooting out the systemic barriers that over many years have created deep economic inequities. An essential part of that work has been to increase the diversity of businesses that the City contracts with. We have been committed to setting the example for equity at City Hall, by tackling this issue with transparency and urgency--that’s why we decided to do the Disparity Study, to ensure that we had a proven methodology to show the full extent of any existing disparities.
The actions called for by the Disparity Study and Executive Order represent the most important structural reforms to city contracting in a generation. But it would not have been possible without foundational work we’ve been doing over the last several years, together as a City:
- We created our Office of Economic Development, by putting diverse local businesses at the heart of our vision for growth. We created a new Small Business Unit and Equity and Inclusion Unit within the department to drive this work.
- We expanded everything from technical assistance to capital access, targeted to all the cultures and languages in our city.
- We created an Economic Development Center to bring business resources and training to our neighborhoods and ethnic communities.
- During COVID-19, we set up Small Business relief funds and directed millions of dollars to help businesses stay afloat and access needed PPE and other essential resources.
- We have taken steps to make contracting with the city a more equitable and convenient process.
- We established Equitable Procurement Plans for City departments as a required step of the budget process for City departments to show how they will make efforts to spend resources with certified businesses through all discretionary spend.
- We directed departments to consult the Certified Business Directory for procurements at all levels of spending.
- We trained City of Boston employees to do proactive marketing and outreach.
- And we created a Pathways to City Contracting series, to help residents learn about opportunities to do business with the City. Last year, we engaged nearly 600 businesses with workshops, training, and certifications.
At the same time, we have been working toward deep, structural change. In 2018, the City launched a comprehensive Disparity Study to compile the data and the community input needed to understand the structural gaps, and achieve that change. This multi-year process was conducted by BBC Research and Consulting and guided by the Supplier Diversity Council as well as the many voices of residents and business owners who contract with the City.
The City of Boston still has a lot of work to do in increasing equitable access to city contracting and in growing business opportunities in the Black community, the Latino community, the Asian community, and for women. The steps outlined by the Disparity Study and Executive Order puts in place the steps we must take to eliminate the root causes of inequity, wherever they exist, as well as unlock more opportunities for positive change as our City moves forward.
What is a Disparity Study?
The City aims to create an equitable contracting process for MBEs and WBEs. We've contracted with BBC Research and Consulting to design and conduct an independent study to review our efforts.
A disparity study examines whether there are differences between:
- the percentage of dollars that minority- and woman-owned businesses received in contracts during a specific time period, and
- the percentage of dollars that those businesses would be expected to receive based on their availability to perform those contracts.
Comparing the participation and availability of businesses is referred to as a disparity analysis.
Disparity studies also typically examine information about:
- legal considerations around putting in place of M/WBE programs
- conditions in the local marketplace for minorities, women, and M/WBEs
- contracting practices and business assistance programs currently in place, and
- potential changes to existing M/WBE programs.
Disparity Study Report
The first disparity study in 18 years is an effort to identify and address gaps, and ultimately strengthen the City's procurement practices across all departments and provide an enhanced platform for future equity-based policies.
As part of the disparity study, BBC assessed whether there were any disparities between:
- The percentage of contract and procurement dollars that the City awarded to minority- and woman-owned businesses between July 1, 2014 and June 30, 2019 (i.e., utilization); and
- The percentage of contract and procurement dollars that minority- and woman-owned businesses might be expected to receive based on their availability to perform specific types and sizes of City prime contracts and subcontracts (i.e., availability)
BBC also assessed other quantitative and qualitative information related to:
- The legal framework of the Small Local Business Enterprise Program;
- Local marketplace conditions for minority- and woman-owned businesses; and
- Contracting practices and business assistance programs that the City currently has in place.
Additionally, BBC in coordination with the City’s Equity and Inclusion Unit, engaged over 570 local businesses. Many of these businesses were minority- and woman-owned. We learned about their experience with City contracting and local marketplace conditions through:
- seven public forums held in-person in Codman Square, Copley, East Boston, Fields Corner, Jamaica Plain, Mattapan, and Roxbury where oral or written testimony was collected
- in-depth interviews and availability surveys
- electronically submitted written testimony, and
- quarterly meetings with the Supplier Diversity Advisory Council, comprised of 24 local advocates and business owners.
The Executive Order will enact several key reforms to enhance equity and accountability in the procurement process. The order will:
Immediately establish overall City goals for contracting with minority- and woman-owned businesses based on the disparity study findings. The City of Boston will make it a goal to utilize at least 25% minority- and woman-owned businesses across all contracts awarded in any fiscal year, with a goal of 15% utilization for woman-owned businesses and a goal of 10% utilization for minority-owned businesses. The City will seek to achieve these goals through the implementation of uniform procedures that apply to all procurements as well as contract-specific goals regarding the participation of such businesses in specific contracts.
Require goal tracking and reporting as part of the annual budget process. Beginning with the Fiscal Year 2023 process (using data from Fiscal Year 2022), the Office of Budget Management will require each department that engages in procurement to submit a written report summarizing its procurement activity of the prior fiscal year, whether the department met the contracting goals, and how it plans to meet said goals going forward. This will be in addition to the required Equitable Procurement Plan and will be developed and reviewed by staff from the Office of Budget Management, the Equity and Inclusion Unit, and each department itself.
Institute a Supplier Diversity Program to oversee the implementation of this Executive Order along with a 2019 Executive order related to equitable procurement. The Supplier Diversity Program will work with City departments to ensure policies, practices and processes foster the full participation of minority- and woman-owned businesses in pursuing contracting opportunities. Additionally, the program will improve and expand technical assistance, business development, training, and mentoring programs for these businesses.
The City hosted three community briefings to share the results of the Disparity Study and to discuss immediate next steps to address barriers identified by local minority- and woman-owned businesses during the study. All community briefings were held virtually on Zoom with simultaneous interpretation provided in Cantonese, Cape Verdean Creole, Haitian Creole, Portuguese, Spanish, and Vietnamese.