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West Palm Beach adopts ordinance making small-business participation mandatory at 18% for construction contracts after heated debate
Summary
On second reading the commission amended the procurement code to require small-business participation—set at a maximum 18% for construction and master contracts—by changing ordinance language to reflect the city's existing practice; the vote passed 3–2 after industry groups urged retaining a goal instead of a mandate.
The West Palm Beach City Commission on Feb. 3, 2025 adopted Ordinance No. 5118-24, revising the city procurement code to clarify the office name, redefine “small business,” and establish small-business participation as required when a level is set. The ordinance sets the maximum small-business participation at 18% for construction and master contracts and reorganizes and clarifies several related provisions.
City procurement director Frank Hayden told the commission the change primarily updates ordinance language to match a policy the commission approved in 2020 and city practice since then. Hayden said staff evaluates availability of certified subcontractors before setting a participation level for each solicitation and retains discretion to lower the participation target or set it to zero if there is inadequate local capacity.
Hayden provided participation figures and program details: “Our number of certified SBEs is close to a little over 400,” and the city’s pool of certified minority and women-owned firms is “about 300, over 300.” He told commissioners the city typically exceeds the stated goal on a cumulative basis and that the county’s comparable target is 20 percent.
Michelle Depotter, CEO of the Associated General Contractors (AGC) of Palm Beach County, said the AGC learned of the second-reading language shortly before the hearing and urged the commission not to convert the city’s goal into a mandate. “We are in opposition to a mandate,” Depotter told commissioners, citing capacity and workforce constraints in the local construction market and asking for more stakeholder engagement before a change to mandatory language.
Commissioners split on whether to convert the city’s longstanding practice into formal ordinance language. Supporters said the change brings the code into alignment with current procurement operations and reinforces the city’s commitment to opportunity for local small, minority and women-owned businesses; opponents said the industry needed more direct input and that setting a requirement—rather than a goal—could create unnecessary burdens on prime contractors without increasing local capacity.
The commission voted 3–2 to approve the ordinance on second reading. The mayor and staff said the change will be followed by a city-funded disparity study this year that will analyze local market capacity and inform any future adjustments to participation thresholds.
Votes at a glance - Action: Adopt Ordinance No. 5118-24 (second reading) — procurement code amendments on small-business participation - Mover: not specified; second: not specified - Outcome: Approved 3–2 - Key change: Establishes small-business participation as required in solicitations when a participation level is set; sets maximum small-business participation at 18% for construction and master contracts.
Why it matters The ordinance affects how the city structures contracting requirements for public works and master agreements. Staff said the change is meant to formalize a practice the city has applied in recent years; opponents warned that requiring participation could produce unintended cost or scheduling impacts if local subcontractor capacity is limited.
Implementation and next steps Staff said waiver procedures already exist in the code and noted that the city may reduce or waive participation on a per-project basis if availability is insufficient. Commissioners and staff also committed to a follow-up process that includes a disparity study and additional stakeholder meetings.
Clarifying details - City-certified SBEs: “a little over 400” (Frank Hayden) - City-certified MWBE/WBE firms: “about 300, over 300” (Frank Hayden) - County target cited by staff: 20% (noted as comparison) - Staff retains discretion to lower or waive participation on a project-by-project basis if availability is limited.
Public reaction and industry input The AGC asked for earlier and fuller involvement in the drafting process and identified capacity and bonding as practical concerns for prime and subcontractors. Commissioners agreed to schedule additional stakeholder briefings and to use the forthcoming disparity study to inform any future policy changes.
