Disparity study finds substantial underutilization of minority- and women-owned firms in Brooklyn Park procurement

Consultants from Keane Independent Research presented results of a joint Minnesota disparity study at a Brooklyn Park City Council special work session, saying the city shows substantial underutilization of minority- and women-owned businesses in its procurement.

Dr. Joseph Broad, a senior consultant with Keane Independent Research, told the council that across the analyzed contracts the city’s utilization figures were low: “about 1% of city dollars is going to minority-owned businesses and about 4% was going to white woman-owned businesses.” He said the study used city procurement data from fiscal years 2017 through 2023 and a large availability survey of businesses in Minnesota and western Wisconsin.

The disparity study compares utilization (the share of dollars the city awarded to firms in demographic groups) with weighted availability (the share of firms in the relevant market able to do the same work). Haley Adams, a consultant with Keane, explained the analysis method and the disparity index: “Anything below an index score of 80 is considered a substantial disparity, and this has been held by courts.” For Brooklyn Park the study reported a combined MBE/WBE disparity index of 31, with an index of 19 for MBEs alone and 39 for WBEs alone.

Why it matters: the consultants framed the study as a legal and technical prerequisite for any race- or gender-conscious contract equity measures. Keane’s presentation noted legal precedent, including the U.S. Supreme Court decision that guides strict-scrutiny review for race-conscious procurement programs, and cited more recent case law confirming the need for evidentiary support before adopting remedial measures.

Key findings and methods - Data period and exclusions: Keane analyzed city procurement records for fiscal years 2017–2023 and excluded purchases judged not relevant to a disparity study (utilities, payments to other governments, and national-market purchases). - Survey and marketplace data: the team purchased business listings, combined bidders’ lists from the 16 participating entities in the joint study, and conducted an availability survey (October 2024) with telephone and online options. The firm attempted up to five contact attempts and said it reached about 33% of firms on the initial list; roughly one-third of contacted firms indicated they were minority- or woman-owned and interested in public-sector work. Keane reported calling roughly 76,000 businesses for the joint study. - Utilization and availability comparison: the report uses a dollar-weighted availability measure that controls for contract type, contractor role (prime/sub), contract size and the geographic area the contractor serves so that the availability measure aligns to the types and sizes of contracts the city awards.

Marketplace barriers and qualitative findings The consultants supplemented statistical results with interviews and survey questions about marketplace barriers. They reported that minority-owned firms were more likely to report difficulty obtaining loans and lines of credit, and that respondents described barriers including bonding and insurance requirements, prompt-payment problems, and exclusion from informal networks. The consultants said these business-level barriers limit the ability of firms to grow and to compete for larger public contracts.

Peer examples and tools Keane highlighted Hennepin County as an example of an entity that increased MBE/WBE utilization after adopting program tools. The consultants said Hennepin County doubled its reported MBE/WBE utilization in the most recent comparison and attributed improvement to investments in program staff, statutory or procurement authority for higher direct-purchase thresholds, and other administrative tools. Keane provided a menu of options the city could consider, including a citywide small-business enterprise (SBE) program, targeted subcontracting goals on large public works projects, certification recognition, registries and additional certification types such as a socially and economically disadvantaged business enterprise (SEDBE) pathway.

Council questions and next steps At the end of the presentation council members asked questions about intersectionality and how the analysis distinguished white women from women of color. A council member asked, “How did you know for certain that this group is not?” to clarify WBE classification; Keane responded that their statistical split in the report is for analysis but that program implementation can and does allow a woman-owned firm that is also a person of color to qualify for both sets of program remedies. Keane said the underlying data used for the analysis will be provided to the city for follow-up work on intersectionality.

The council did not take a formal vote. Mayor Winston and staff indicated that questions should be channeled to Director Green and suggested a follow-up procurement work session to discuss how to apply the study’s recommendations to Brooklyn Park’s procurement processes.

Ending Keane said the public comment period for the joint study would close at the end of the week and that the consulting team planned to finalize reports by the end of the month. The council recessed after the presentation to proceed to its regular meeting.