City of Boston spent $2.1 billion in contracts over five years. Only 1.2 percent went to Black-owned and Latino-owned businesses

From the Boston Globe:

A new report adds much more detail on how little Boston spends in businesses run by people of color

By Shirley Leung Globe Columnist

Sheldon Lloyd, chief executive of City Fresh Foods in Roxbury, said he could do much more business if big contracts were broken into smaller jobs so a local player like him could compete against a bigger corporation.JONATHAN WIGGS/GLOBE STAFF

Black- and Latino-owned firms landed just 1.2 percent of the $2.1 billion in contracts for construction and professional goods and services that the City of Boston awarded during the first term of the Walsh administration, according to a new report the city commissioned.

The study — aimed at uncovering disparities in the way the city spends its dollars — analyzed 47,801 contracts from 2014 to 2019 and found that businesses owned by white women and people of color were considerably underrepresented, according to a 703-page report obtained by the Globe.

For example, the city spent $185 million, or 8.5 percent of its contract and procurement dollars, with businesses owned by white women. With businesses owned by people of color, the city spent $53 million, or around 2.5 percent.

Black-owned businesses were awarded only $9.4 million, or 0.4 percent of total spending, while Latino-owned businesses garnered $18.2 million, or 0.8 percent. Asian-American-owned businesses received $22.7 million, or 1.1 percent of city contract dollars.

The study also analyzed the potential population of firms owned by women and people of color that could have done business with the city and found that hundreds more could have been available for these contracts. Black-owned businesses experienced the starkest gap, with the study finding that Boston could have steered 3.6 percent of its contract and procurement dollars to them.

“We should never use lack of capacity as an excuse as to why we’re not building wealth in communities of color in Boston,” said City Councilor and mayoral candidate Michelle Wu, who cosponsored a 2017 ordinance requiring the city to collect more data on these contracts. “The numbers clearly back up we are well below where we could be.”

The pending release of the report comes as Mayor Martin J. Walsh, who took office in 2014, is about to leave. He is expected to be confirmed as labor secretary by the Senate and could depart City Hall by the end of February.

It also emerges amid a renewed focus on systemic racism, in light of nationwide protests over the police killing of George Floyd last year.

The new report confirms in much greater detail, and for over a longer period of time, what previous analyses of city contracts have found. Walsh has previously issued executive orders to create a more equitable contracting process, but the city continues to lag its peers.

In a statement, Walsh spokesman Nicholas Martin said the mayor plans “actionable items” in the coming days to get “to the root of the issues around disparities in city contracting.”

“While the results of this study are not surprising, they reaffirm our belief that more work needs to be done to institutionalize these practices into the everyday business of city government, and reaffirm our commitment to getting the work done,” Martin said.

The new study indicates that Boston spent about $238 million, or 11 percent of its contracting dollars, on firms owned by white women and people of color. That overall figure is higher than previously reported.

Even so, Boston remains well behind other cities on the participation rates of diverse contractors: New York (19 percent), the Chicago area (29 percent), and Philadelphia (31 percent), according to an analysis done in 2019 by a coalition of activist groups, including Lawyers for Civil Rights, Massachusetts Minority Contractors Association, and the Greater Boston Latino Network.

The Boston study recommended a series of improvements including: setting participation goals, unbundling large contracts, expanding advertising and outreach, and increasing the minimum number of quotes for purchase orders. The study also highlighted how the city could hire more staff in its procurement office, create programs to further build capacity of diverse suppliers, and collect comprehensive data on subcontracts.

The city does not have race- or gender-conscious measures to help steer contracts to diverse suppliers because of legal concerns they would not hold up to a court challenge. The disparity study, which Walsh launched in 2018, was seen as a way to provide data and analysis to create new contracting policies that could stand legal challenge.

Segun Idowu, executive director of the Black Economic Council of Massachusetts, said he is not surprised by the dismal findings. Idowu, however, criticized Walsh for not doing more sooner to make the contracting process welcoming to people of color.

“The unfortunate thing to me is we have been waiting for this disparity study to act,” said Idowu.

Idowu called on Walsh to address the problems before he departs and not leave it to City Council president Kim Janey, who will become acting mayor, to handle. “This happened under his watch,” Idowu added. “I hope we see some action before he heads out to DC.”

Walsh, according to a person briefed on the matter, is drafting an executive order based on recommendations from the study.

Sheldon Lloyd, chief executive of City Fresh Foods in Roxbury, who has city contracts to provide to schools and senior centers, said he could do much more business if big contracts were broken into smaller jobs so a local player like him could compete against a bigger corporation.

Lloyd, who is Black, said refining the procurement process can help Boston businesses of color grow, an effort that ultimately is about “keeping jobs and money in the city.”

“The gap is getting wider, the city of Boston is changing, and communities of color are getting pushed out of the process,” said Lloyd.

COVID has created a low tide in America...

In his annual State of the State address , NY Governor Andrew Cuomo focused on eradicating the COVID-19 epidemic, and stressed that the federal government must do more help to heal a devastated economy and address systemic inequality.

 “COVID created low tide in America, and the ugliness that lurked below the surface was exposed and became visible for all to see… the racial divisions, the religious tensions, the government incompetence, the health care disparities, the social injustice and the danger of hateful leadership.”   “The problems don’t just go away. They mount.”

President Biden has also leveraged the low tide analogy to speak about how the economic contraction brought on by COVID has revealed the devastation that has disproportionately ravaged small diverse businesses.  

In particular, these businesses lack the critical banking relationships necessary to access the Federal economic relief secured to help preserve their businesses.  The reason is simple yet stark, small diverse businesses generally have bank accounts, but rarely have bankers. 

The Banking industry can remedy this condition by intentionally engaging diverse businesses by leveraging the same branches that have failed to reach small diverse businesses with COVID relief programs. 

Bankers can apply intentionality to how they secure vendors to satisfy their operational requirements.  In short, bankers can leverage the community-based “operational footprints” of their branches to target, engage and preserve the small diverse businesses that make up, support and enrich the very communities each branch serves.

As McKinsey recently noted: “The time has come”

Today’s crises, like the deaths that fuel the calls for racial equity, are not new; however, the responses to the crises are unprecedented. People in more than 4,200 cities and towns around the world have staged protests.

Fifteen to 25-plus million people in America have participated in them, and not just people from Black communities.

Over half of protestors (54 percent) are white, marking a notable difference from racial protests of the past.

By contrast, the US civil rights movement had hundreds of thousands of protesters. In addition, the largest group taking to the streets represents America’s newest generations, with the majority of protesters under the age of 35.

The statistics suggest that we are in the midst of the largest equity and justice movement of our time. It’s big. It’s powerful. And it will shape the future for consumer-centric businesses.

VeraCloud has successfully leveraged its diversity access and inclusion programs across private industries and throughout Government, making it easier to deliver on this kind of intentionality.  VeraCloud brings transparency and clarity into diverse vendor marketplaces, facilitates access and connection for clients to easily accelerate and advance diversity inclusion initiatives across the board. 

VeraCloud works with existing procurement infrastructure, technology and personnel achieving dramatic results without disrupting existing procedures and protocols.

Today’s business, cultural, and political environment requires that employers make Diversity and Inclusion a priority. Big business and government need to evolve beyond legislated compliance and the diversity requirements attached to public projects.

COVID has further exposed the need to adopt a community-forward intentionality to help save small businesses and combat a pervasive inequity in economic opportunity that has been laid bare by the economic fallout from the Pandemic.

MA Governor Launches Plan To Expand State Contract Opportunities For Minority-Owned Businesses

FROM WGBH:

Massachusetts Gov. Charlie Baker proposed sweeping changes to the state’s program for contracting with minority-owned businesses, including provisions to directly address criticisms raised in a year-long investigative series by the GBH News Center for Investigative Reporting.

GBH News reported this year that the value of state contracts won by minority-owned businesses has declined by more that 24% over the past two decades, and that the state was padding its results by taking credit for payments that non-minority state contractors made to minority-owned businesses and nonprofits that had no direct connection to a state project.

Baker’s legislative proposal, unveiled Monday evening in advance of the election, essentially confirms that the state’s Supplier Diversity Office has not had enough independent authority to ensure that other state agencies are making minority contracting a priority.

Baker’s office announced that his bill would elevate the state Supplier Diversity Office into a stand-alone agency “with tools and resources to ensure accountability and compliance with diversity goals, oversee agency diversity spending, and audit and review spending data.” The new agency would have a “Supplier Diversity Compliance Unit … which will systematically audit and review direct and indirect spending data to ensure compliance and accuracy.” GBH News reported in September that state agency documentation of minority businesses contracts was riddled with errors and inconsistencies.

Baker also announced that in the future, the state’s annual supplier diversity report will separate state contracts with minority businesses from payments made to minority businesses by non-minority contractors. The reports will also itemize minority businesses spending by race and ethnicity. GBH News had requested this data from the state but was told it was not being tracked.

The state will also boost the advantage given to bidders on state contracts to those that include strong minority business participation in their proposals.

“In launching these new initiatives, we have worked closely with leaders in the minority business community, Black and Latino Caucus, and Black Advisory Commission and Latino Advisory Commission,” Baker said in a statement Monday. “We look forward to continuing our work with these partners to strengthen the state contracting process with greater diversity, transparency and accountability.”

Deborah Enos, chair of the Black Advisory Commission, said in the same statement, “Expanding opportunities for minority-owned businesses working with state government is a crucial way that we can expand economic opportunity for people of color, and I am glad to see the Baker-Polito Administration take further steps to advance that goal.”

Segun Idowu, executive director of the Black Economic Council of Massachusetts, said Baker’s announcement was “all the things that we called for. The governor has literally done everything that we presented and requested that his office make happen in order to make some kind of headway on this issue.”

In September, Idowu had demanded a meeting with Baker in response to the GBH News series and outlined many of the reforms included in Baker’s announcement.

But Idowu pointed out that Baker’s new plan “is roughly the beginning of making important updates.” The legislature will still need to approve creation of the new agency, and other provisions will take time to implement.

“We're happy that that the governor moved forward with all of this,” Idowu said. “But, you know … what matters are results. And so that's the next step, is making sure that this actually amounts to something positive for our communities.”

Recalling another strange, historic election

From The Harvard Gazette:

She was to be first woman president; he the first Black VP.

This year’s riven, pandemic-complicated election has been unusual on many fronts and undeniably historic, marking the first time a woman of color has been nominated for vice president by a major political party. But there have been other surprising contests in the nation’s history.

American saw its first woman presidential nominee and its first Black vice presidential pick in 1872, just seven years after the end of the Civil War. All of it was owing in large part to the women’s suffrage movement and radical feminist Victoria Woodhull, who ran for president against the incumbent, Ulysses S. Grant, as the nominee of the Equal Rights Party and chose (without his knowledge or consent) abolitionist Frederick Douglass as her running mate. For Woodhull, a polarizing political activist who was considered an eccentric by many, it would be the latest of many firsts — a self-declared clairvoyant, she had already been the first woman in the country to own a brokerage firm and to start a weekly newspaper.

“She was a fascinating celebrity and well-known character,” said Susan Ware, an independent scholar who is helping curate an upcoming exhibit at Radcliffe’s Schlesinger Library on women and office-holding in the U.S. “I’m sure that women as well as men were following her career with interest and excitement and sometimes horror, but she definitely was very good at getting her name out there.”

It was Woodhull’s support of “free love” — the idea that women and men should be able to freely choose their sexual partners without interference from the state — that many found most controversial. But those beliefs were in keeping with her support for women’s rights more broadly, and her run for the presidency was more than a publicity stunt, said Ware.

“I’m sure that women as well as men were following [Victoria Woodhull’s] career with interest and excitement and sometimes horror,” said Susan Ware. Photo by Tony Rinaldo

Woodhull’s candidacy was designed to highlight the argument made by suffragists that women already had the right to cast a ballot thanks to the recent passage of the 14th and 15th Amendments to the U.S. Constitution, which affirmed that everyone born in the country was a citizen and that no citizen should be denied the right to vote. But government authorities rarely agreed with that interpretation. After Susan B. Anthony cast a vote in Rochester, N.Y., for Grant that November, she was arrested, tried, found guilty, and issued a fine that she refused to pay. (Earlier this year President Trump pardoned Anthony, a move that angered many women who argued that the famous social reformer would have wanted her conviction to stand as a symbol of women’s rights.)

Anthony’s effort was “part of a larger strategy of the suffrage movement to basically say, ‘Women already have the right to vote. We just need to seize it,’” said Ware. “Woodhull is part of that … and what better way to make that point than to run for president?” (In a twist that seems oddly predictable, Woodhull wasn’t able to vote for herself on Election Day, having been jailed for publishing obscene material in her newspaper: a feature on the adulterous affair of influential clergyman, social reformer, and Congregational minister Henry Ward Beecher.)

But while Woodhull was clear about her presidential intentions, she never informed her running mate, Douglass, who never even acknowledged he had been nominated. Many have speculated that Douglass didn’t want to recognize the nomination for fear of being associated with Woodhull, who was seen as “a loose cannon and controversial even among radical feminists and abolitionists,” said Harvard historian John Stauffer.

“For Douglass, so much was about the specific context. ‘What can I accomplish?’ He was a prudent revolutionary. If he decided to do something, he always analyzed what potential progress” could be made, said Stauffer, Harvard professor of English and African and African American studies and author of two books on Douglass. “That’s probably the best way to describe his refusal to attend Woodhull’s convention or even respond, because the potential good or progress he could gain from acknowledging and participating in this vice presidential [bid] is basically nil, and possibly it might have had negative effects.”

“Douglass’ influence, and frankly, his brilliance is that he understood the difference between being a radical activist and being a politician with access to the seats of power,” said John Stauffer. Kris Snibbe/Harvard file photo

While Douglass may have harbored higher political aspirations, he never officially held an elected office, though he would go on to became federal marshal for the District of Columbia, recorder of deeds, and minister resident and consul general to the Republic of Haiti, as well as an influential presidential adviser.

“Douglass’ influence, and frankly, his brilliance is that he understood the difference between being a radical activist and being a politician with access to the seats of power,” said Stauffer. “He advises every president from Lincoln until his death and 1895. So, he has access to these levers of power.”

Douglass also likely didn’t recognize the vice presidential nomination in 1872 because he was already supporting a different presidential candidate, said Kenneth Mack, a historian and Lawrence D. Biele Professor of Law at Harvard Law School. A loyal Republican, Douglass had backed Grant’s run for a second term. During his first four years in the White House, Grant had proven himself a champion of the rights of freed African Americans, having supported several Civil Rights acts in 1870 and 1871, including one designed to the end Ku Klux Klan’s reign of terror against Black people in the former confederate states. “And President Grant had supported sending in the Union army to protect the lives and the votes of Black people in the south. So, for Douglass, there was no real choice other than to support Grant.”

“President Grant had supported sending in the Union army to protect the lives and the votes of Black people in the south. So, for Douglass, there was no real choice other than to support Grant,” said Ken Mack. Lorin Granger/Harvard Law School

Douglass was a lifelong supporter of women’s suffrage despite splitting with activists in his support of the 15th Amendment, which gave Black men the vote but left women disenfranchised. “Thousands of Black people were being murdered across the South. And Douglass gave his famous speech saying, ‘This is a matter of life and death,’ and he really meant life and death,” said Mack.

The rift highlights another driving force in the woman’s suffrage movement involving Black women whose efforts to help women secure the right to vote have long been overlooked. As a recent piece in the New York Times noted, Black women’s rights and access to power have continued to lag behind those of other groups.

What would Douglass have thought of the country’s recent elections? “It’s impossible to translate from the 19th century to today … but certainly the principle that Douglass stood for, that the most vulnerable people in our society should have access to the ballot in order to protect their interests, that ballot access should be expanded rather than contracted, was his position all the way through. And he supported women’s suffrage because he thought that women needed the ability to look out for their own interests rather than to supposedly have men look out for them,” said Mack.

He sees Woodhull as a 19th-century version of a “kind of radical libertarian reformer who believes that people deserve autonomy and the ability to look out for their own interests.”

COVID Health and Economic Equity Considerations

From the CDC:

Long-standing systemic health and social inequities have put many people from racial and ethnic minority groups at increased risk of getting sick and dying from COVID-19. The term “racial and ethnic minority groups” includes people of color with a wide variety of backgrounds and experiences. But some experiences are common to many people within these groups, and social determinants of health have historically prevented them from having fair opportunities for economic, physical, and emotional health. [1]

There is increasing evidence that some racial and ethnic minority groups are being disproportionately affected by COVID-19. [2], [3], [4], [5], [6] Inequities in the social determinants of health, such as poverty and healthcare access, affecting these groups are interrelated and influence a wide range of health and quality-of-life outcomes and risks.[1] To achieve health equity, barriers must be removed so that everyone has a fair opportunity to be as healthy as possible.

To achieve economic equity, barriers must be removed so that Diverse/minority-owned (MWBE, SVDOB, DBE) and/or Local businesses get access to economic on public projects. COVID has further exposed the need to adopt a community-forward intentionality to help save small, diverse businesses and combat the systemic inequity that has been laid bare by the economic fallout from the Pandemic.

Only with intentionality will public and private sector customers increase the number of contracts being awarded to Diverse businesses.

The New York State Association of Counties has partnered with VeraCloud to help diverse businesses during COVID-19

The New York State Association of Counties (NYSAC) represents New York counties before Federal, State and Local officials on matters of county governments. In response to COVID-19, NYSAC is pioneering an initiative that will help Counties leverage their existing recurring resources, (annual procurement spending) to support and financially engage their small, local and diverse businesses (MWBEs) supporting and helping sustain the communities they serve.   By focusing economic opportunity and shifting the resulting economic benefit to the marginalized businesses and their host communities, this NYSAC-led initiative will enable Counties to proactively jumpstart small local and diverse businesses and facilitate a strong post COVID-19 recovery. 
 
NYSAC has partnered with VeraCloud Technologies to bring this capability to member Counties. VeraCloud enables Counties to extend the reach and benefit of their procurement opportunities and focus procurement spending on the small local and diverse MWBE businesses within their jurisdictions.  This shift of economic opportunity and benefit inspires, activates, and sustains MWBE's and small local business with annual County opportunity/spending, establishing many "first time” public contracts with their small local and diverse businesses. This initiative supports County business, enables new hiring within small local and MWBE businesses, supports diverse and local supply chains, and returns tax dollars to the communities from which they are collected helping revitalize neighborhoods, support families and create the much needed jobs critical to support recoveries within communities most impacted by COVID-19. 
 
The procurement dollars focused through the NYSAC/VeraCloud initiative ultimately have a compounding effect helping preserve and rejuvenate small local diverse businesses, the communities in which they are located, and the diverse and local people they employ and sustain.  In this COVID-19 recovery environment this is a high-impact grass roots initiative to help Counties focus their spending into small local diverse businesses,  driving sustainable economic benefit and a much needed social impact to the communities and constituents most negatively affected by this pandemic.

Join us Fri, Jun 12, 2020 10:00 AM - 11:00 AM EDT to learn more. Register here: https://register.gotowebinar.com/register/2681813721211349776

2018 Annual Report: NYC has increased its M/WBE spending, but continues to fall short on M/WBE utilization

NYC’s Annual report on Diversity, Access, and Inclusion of Minority- and women-owned business enterprises (M/WBEs) in the City’s public economy is out and the the City continues to lag in execution on its mandated goals.

Minority- and women-owned business enterprises are critical to the country’s job market, employing millions of Americans and contributing more than $1 billion to the national economy each day.

Nevertheless, these businesses continue to confront disparities that deny them the opportunity to compete on a level playing field. In New York City, people of color and women account for 84 percent of the population and 64 percent of business owners.

The City’s recently published disparity study showed that while more M/WBEs are available to contract with the City, there was persistent underutilization of these firms in the last six years of City contracting.

MWBE fraud: $Billions in lost economic opportunity for diverse businesses and the families & communities they support.

A Manhattan federal jury has convicted Canadian contractor DCM Erectors and its owner Larry Davis for minority- and woman-owned (MWBE) business fraud during the execution of almost $1 billion of steel work at the Freedom Tower and World Trade Center Transportation Hub projects, according to Reuters.

Prosecutors alleged that DCM and Davis enlisted two minority firms to be administrative fronts on the projects while DCM, trying to avoid paying tens of millions of dollars to minority firms, did all the work itself.

Until the 1970’s, federal procurement dollars virtually bypassed Minority and Women-owned businesses.  Presidents Kennedy, Johnson, and Nixon signed executive orders to increase women and minority participation in the US public contracting market.

President Carter’s Public Works Employment Act of 1977 mandated for the first time that “at least 10% of federal funds granted for local public work projects” be used to procure services and products from MWBEs.

Cities and states have long since joined in, seeking to level the playing field via mandate, legislation, and compliance enforcement. BUT: all of these efforts have lacked effective tools & technologies to match opportunities with diverse businesses that are ready, willing, and able to work.  As a result, inefficiencies and fraud like that at NYC's sacred Freedom Tower cheat diverse businesses out of their fair share of economic opportunity.

@veracloudtech we’ve built our technology platform to efficiently enable private contractors to better collaborate with diverse businesses to fuel greater access, opportunity and inclusion in public sector contracting work.  When barriers are broken down, the market becomes stronger, competition ensues, and tangible progress is made on critical issues: diversity, access, financial inclusion, economic opportunity, and ongoing support for diverse businesses across the US.