Tacoma committee reviews 2024 Equity in Contracting report, outlines phased implementation of disparity-study recommendations

The Tacoma Economic Development Committee on April 22 heard a briefing on the 2024 performance of the city's Equity in Contracting (EIC) program and a plan to implement recommendations from a recent disparity study, staff said.

Casey Woods, business and economic development manager in the City of Tacoma’s Community and Economic Development Department, told the committee the 2024 report summarizes program outcomes, summarizes the city’s second-generation disparity study and lays out priorities for 2025.

The disparity study, completed in October 2024 after a competitive solicitation, reviewed city contracting from 2017 through 2022 and presented eight recommendations, Woods said. The study’s final report was published after a September 2024 study-session review and revisions following council and stakeholder input.

Why it matters: The EIC program replaces the former Small Business Enterprise program and uses race- and gender-conscious tools for public-works and improvement contracting. Committee members said the recommendations and the staff implementation plan could affect how the city sets project-by-project goals, how smaller contracts are structured and how the city engages with minority- and women-owned firms.

Background and 2024 outcomes

Woods told the committee the EIC ordinance was approved in November 2019 and replaced prior programs that trace to an MWBE program formed after hearings in 1989 and a 1993 disparity study. He said the EIC currently applies only to the city’s Public Works and Improvement contracts and that the municipal code requires department-level goals.

Staff presented preliminary performance figures and said the numbers remain under validation in the city’s compliance system. Woods reported an increase in awards to certified firms from 62 awards in 2023 to 96 awards in 2024, and said payments rose from about $5,460,000 in 2023 to about $5,900,000 in 2024. Of the latter figure, Woods said roughly $1.9 million went to Tacoma-based minority- and women-owned firms — about 32 percent of the total dollar value — but he cautioned that staff are still validating the figures before publishing the formal annual report.

Woods also said the city hired a contracting program auditor focused on outreach and business development in 2024, which coincided with a reported 50 percent increase in both the number of workshops and workshop attendance. Staff said they strengthened ties with local affinity and business groups including the Tacoma Anchor Network, Tacoma Urban League, the Black Collective and other organizations.

Disparity study recommendations and 2025 workplan

Woods summarized the study’s eight recommendations: (1) refine an overall aspirational MBE/WBE goal for the city, (2) continue contract goals and consider expansion into professional services, (3) implement SBE evaluation and price preferences, (4) further develop a small-contracts program (including unbundling large projects), (5) expand outreach and relationship-building, (6) participate in MBE/WBE capacity-building efforts, (7) pursue additional steps to encourage small-business utilization and (8) allocate sufficient program resources (staffing and funding).

Woods said the city will not implement all recommendations in 2025. Planned 2025 actions include updating program regulations to refine aspirational goals, continuing training and outreach, beginning selected elements of a small-contracts program (including further unbundling of some capital projects and promoting delegated authority), and developing compliance dashboards with the city’s IT team. He said the city will need further legal and operational work to expand EIC requirements into professional services contracting because those procurements differ from public-works estimating and require change management across legal and finance teams.

Staff highlighted several specific items: the purchasing policy was updated to allow departments to directly negotiate with firms certified through the Washington State Office of Minority and Women’s Business Enterprises (OMWBE) up to $200,000 (previously $50,000); the city intends to promote that delegated authority internally and educate certified businesses externally; and the next full disparity study must occur within five years (targeted for 2028), so staff plan budget work next year to support that analysis.

Data questions and certification distinctions

Committee members asked for more granular demographic data and for an analysis of the “delta” between the number of businesses that exist in a demographic category and the number receiving city contracts. Woods said staff are analyzing both the count of awards and total payments and that some results appear anomalous (for example, awards increased from 62 to 96 while total payments rose only about $400,000), which is one reason the figures are pending validation in the compliance software. Woods said staff can expand analysis to include certifications outside OMWBE and to break out subcategories within ethnic groups if requested.

Woods noted the city’s published performance counts firms certified through OMWBE; the compliance system also tracks firms certified through Washington’s Department of Enterprise Services (DES), and staff said they can add DES-certified firms as a filter in dashboards so the public can see broader counts and payment histories.

Coordination, capacity-building and next steps

Staff told the committee they plan to coordinate EIC metrics with capital-project dashboards so project-level pages can show equity and LEAP performance alongside budget and schedule information. Woods said staff are working with the Anchor Network and regional partners (including the Department of Enterprise Services and Washington Apex Accelerator) and intend to promote working-capital loan programs and other capacity-building resources to certified businesses. Staff also said they will continue outreach events (including a regional engagement planned for September with Tacoma Public Schools and Parks Tacoma) and will expand advisory-committee engagement.

Committee members suggested coupling capital-access products with procurement goals (for example, loans or working-capital solutions to help small contractors carry payroll during city projects) and asked staff to consider adding fair-labor practices into capacity-building criteria; Woods said he would follow up on that request.

Staff reiterated that validated 2024 data will be added to updated slides and the formal annual report once compliance checks are complete. Woods closed the briefing by saying staff will return with additional detail and recommended regulatory updates as they proceed with staged implementation of the study recommendations.

The committee did not take substantive legislative action on the EIC briefing at the meeting; staff described next steps and scheduled follow-ups to report validated data and regulatory changes.