Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Mbe Disparity Study topic
No spam. Unsubscribe anytime.
City disparity study finds significant underutilization of minority‑owned firms; staff to draft legislation to adopt recommendations
Summary
Consultants told the Finance and Economic Development Standing Committee May 21 that Richmond substantially underutilized minority‑owned firms in city contracting between FY2017 and FY2021, awarding MBEs 3.43% of contracting dollars while estimating 17.93% availability in the market.
The Finance and Economic Development Standing Committee received a presentation May 21 on the City of Richmond's disparity study and the consulting team's findings that minority‑owned businesses (MBEs) are substantially underutilized in the city's contracting.
Nam (Bernetta) Mitchell of MGT Consulting presented the study, which analyzed five fiscal years (FY2017–FY2021) of city procurement data alongside qualitative interviews and private-sector comparisons. "In our analysis of that data, we identified that 3.43% of the total dollar spent both at the prime and subcontracting level, was awarded or paid to MBE firms, during that study period," Mitchell said. The consultants estimated MBEs make up roughly 17.93% of firms available in the city's 14‑county relevant market, producing a utilization‑to‑availability disparity in several procurement categories.
Mitchell and the study team reported subgroup details: Hispanic‑owned firms accounted for about 1.77% of total dollars spent and African American‑owned firms about 1.43% during the study period. The qualitative research included interviews with local firms and professional organizations; consultants said Black‑owned firms reported the highest rates of direct discrimination in the marketplace. The private‑sector analysis also indicated MBEs generated lower revenues and self‑employment earnings than comparable non‑MBE firms.
The study quantified economic contributions from MBE contracting during the period: consultants reported approximately 476 jobs tied to MBE contracts, roughly $33 million in labor income, about $49 million in value added (GDP), and over $9 million in local, state and federal taxes paid.
Based on findings, the consultants recommended a package of remedies including adopting an anti‑discrimination ordinance, expanding data collection and contract management, establishing departmental MBE goals and liaisons, adopting contract‑audit clauses, expanding contract‑specific subcontracting goals, increasing MBE program staff and implementing a program sunset. The Office of Minority and Women‑Owned Business (presentation staff) said its current capacity is six staff (three compliance, one technical assistance, an administrator and the director) and that prior staffing had been as many as 10 before budget freezes.
Councilmembers expressed support and concern about capacity and capital access. Councilmember Lynch pressed for replenishing the family crisis fund and for better capital access for MBEs; staff said the office had used ARPA funds to seed a loan fund and is exploring software and regional cooperation to improve data and outreach but lacks resources to implement all recommendations. Committee leadership said staff will draft legislation for the council to receive and adopt the disparity study and its recommendations and asked for a strategic, budgeted plan to implement the recommendations over time.
Ending: Staff committed to share a draft ordinance to have the council receive and adopt the study and its recommendations; committee members said the step is necessary to link the study to budget and staffing requests.
