Some local business owners and their advocates raised concerns about the low number of city contracts that go to Black-owned businesses and offered suggestions for ways to increase Black business participation during a virtual public hearing on Thursday.
The hearing on professional service small purchase regulations was held by the Office of the Administrator.
The city made a charter change initiated by City Councilman Derek Green that carves out a preference for local businesses when awarding city contracts under $100,000.
Blane Stoddart, a small business advocate and president of BFW Construction Project Management says said that all contracts under $100,000 should be treated the same way in terms of procurement. He says these vending opportunities should first be shown to Office of Economic Opportunity s registry of minority business enterprises and then to the general public.
“I want to make it clear, my proposal for these regulations is that we have a uniform type of behavior as it relates to vendors (contracts) under $100,000,” he said.
“I’m asking the chief administrative officer of the city to go back and work with the Commerce Department and go back and work with procurement, so that these rules for under $100,000 contracts are cleaned up and streamlined.”
Stoddart suggested that the procurement commissioner and Philadelphia Commerce Department conduct a disparity study to see the level of Black and Latino participation in city contract opportunities.
“I’m bringing this up because of the social unrest,” Stoddart said.
“I’m bringing this up because of George Floyd. Every major corporation and city in America is trying to figure out how we can increase participation because of historic discrimination particularly against African Americans and Blacks.”
Marla Hamilton, vice president and director, Client Engagement, PIDC, suggested that opportunities under $100,000 be limited to companies headquartered in Philadelphia with a certain revenue threshold.
“If the city is committed to trying to increase opportunities for Black and brown businesses and you make a certification for LBEs (local business entities) that will do a number of things. It will limit contracts under $100,000 to businesses according to their annual revenue,” she said.
Hamilton was a previous director of the Philadelphia Minority Business Enterprise Council, the predecessor of the OEO. During the hearing, she spoke about the city’s process of certifying minority-owned businesses.
“That process was perverted by white males who then put ownership on their wives as a means to take advantage of the city’s initiatives to get more participation by Black and brown business owners,” she explained.
She said once Philadelphia tax structures became too onerous for some of those businesses, they moved out of the city, while Black and brown businesses remained, providing support to the city’s tax base and still had to jump through hoops to get part of the city’s contracting resources.
Hamilton said Black and brown businesses can provide anecdotal evidence that is dismissed but is always confirmed through disparity studies.
“It is time to start taking the anecdotal evidence of Black and brown businesses and not wait for a disparity study that is going to take a year or two or longer, while the very businesses that have historically generated wealth for generations through contracting with the city continue to do that,” Hamilton continued.
Philadelphia Chief Administrative Office Stephanie Tipton said the tier for certified local businesses of up to $100,000 allows for an expedited contracting process that can amended and renewed.
“This tier is what makes Philadelphia an innovator and a leader in municipal procurement,” she said.
“While other cities already offer a local preference of bid price, Philadelphia is at the forefront of incentivizing local purchasing with a new tier specifically for local businesses.”
