According to a report recently released by the St. Louis Development Corporation, the city's minority- and women-owned businesses (M/WBEs) were largely left out of the public contracting process between 2007 and 2012.
During the five-year study period, non-M/WBEs received 90 percent of all prime contracts awarded by the City of St. Louis, with 70 percent of all contract dollars going to the same 44 vendors. By contrast, businesses owned by African Americans received 6.43 percent of all contracts. In fact, with the exception of Native American-owned businesses, the study found that M/WBEs experienced "Underutilization" or "Statistically Significant Underutilization" as either prime contractors, subcontractors, or both.
To encourage greater M/WBE participation as prime contractors, the report recommended that the city provide incentive credits for professional services contracts and bid discounts. For subcontractors, it suggested that the city set an overall construction subcontracting goal and individual contract goals, which would require prime contractors to conduct a good faith effort to include M/WBEs in their bid.
Specifically related to good faith efforts, the study encouraged the use of a point system to evaluate prime contractors' outreach to M/WBEs prior to bid. Points would be awarded for outreach steps such as advertising opportunities to M/WBEs and soliciting their participation through written notifications, such as fax and email, and telephone calls.
More information about the City of St. Louis disparity study can be found at https://www.stlouis-mo.gov/government/departments/sldc/post-disparity-study-hearing-4-28-2015.cfm.
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