Item 2. Disparity Study - Small & Minority Business Resources Department — original pdf

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City of Austin Small and Minority Business Resources Overview 2022 Disparity Study Edward Campos, Director, SMBR Tamela Saldana, Ph.D., Assistant Director, SMBR Objectives Background Disparity Study Purpose and Objectives Quantitative & Qualitative Analysis Key Findings Study Recommendations Next Steps City of Austin | SMBR 2 Background • Jan. 2020 – Colette Holt & Associates (CHA) was contracted to conduct the 2022 Disparity Study • April 2020 – Two virtual Public Kick-off webinars were held • 2020 – Launched disparity study website and e-mail account City of Austin | SMBR 3 Disparity Study Purpose and Objectives • Complies with constitutional mandate to regularly review evidence supporting race- and gender-based programs • Provides a legal defense if the programs are challenged • Develops accurate data for annual and contract goal setting • Gathers feedback for program improvements City of Austin | SMBR 4 Quantitative Analysis CHA analyzed the following information: FY 2013 – FY 2018 contract data files 4,741 contract records -1,069 contracts were analyzed for the sample file -*96 % Prime and Subcontractor validation of contract files SMBR’s MBE/WBE Program; and Financial Services Departments’ (Purchasing, Capital Contracting), Public Works’ and Economic Development’s processes and procedures More than 75 documents and information resources City of Austin | SMBR 5 Study Contract Data Contract Type Total Contracts Prime Contracts Subcontracts TOTAL 1,002 842 1,844 Share of Total Contracts 54.3% 45.7% 100.0% Final Contract Data File Net Dollar Value Business Type Total Contract Dollars Prime Contracts $826,453,073.73 $249,783,337.28 Subcontracts Share of Total Contract Dollars 76.8% 23.2% Source: CHA analysis of City of Austin data City of Austin | SMBR 6 Distribution of Contract Dollars Distribution of Contract Dollars by Race and Gender (total dollars) MBE Asian Native American NAICS Black Hispanic White Women M/WBE Total Non- M/WBE TOTAL $15,368,481 $51,392,913 $17,411,303 $754,775 $84,927,473 $60,325,355 $145,252,828 $747,078,317 $892,331,145 Distribution of Contract Dollars by Race and Gender (share of total dollars) Native American White Women MBE Asian NAICS Black Hispanic M/WBE Total Non- M/WBE TOTAL 1.7% 5.8% 2.0% 0.1% 9.5% 6.8% 16.3% 83.7% 100.% Source: CHA analysis of City of Austin data City of Austin | SMBR 7 Weighted Availability Aggregated Weighted Availability for City Contracts Black Hispanic 1.5% 4.7% Asian 1.4% Native American 0.4% MBE 8.0% White Women 6.5% MBE/WBE 14.4% Non- MBE/WBE 85.6% Total 100.0% Source: CHA analysis of City of Austin data City of Austin | SMBR 8 Disparity Ratios Black 118.0% Disparity Ratios by Demographic Group White Hispanic Women 104.4% Native American 20.0%‡ 142.5% 119.5% Asian MBE 122.1% MBE/WBE 112.7% Non- MBE/WBE 97.9% Disparity Ratio ‡ Indicates substantive significance Formula: DR = U/WA DR – Disparity Ratio U – Utilization Rate WA – Weighted Availability Source: CHA analysis of City of Austin data City of Austin | SMBR 9 ‡ Courts have ruled the disparity ratio less or equal to 80% represent disparities that substantively significant. Qualitative Data City of Austin | SMBR 10 Qualitative Public Sessions Stakeholder/Public Introduction Meetings: 312 Participants Public Engagement Sessions: 185 Participants Business Owner Surveys: 198 Participants One on One Interviews: 17 Participants SMBR Staff Session: 27 Participants Department Executive Staff Sessions: 8 Departments COA Internal Input Sessions: 117 Participants MBE/WBE Advisory Committee: 7 out of 8 Members City of Austin | SMBR 11 Qualitative Evidence • Systemic Racial Exclusion Many minorities reported that fair opportunities to compete for contracts were not available because of systemic racial barriers. • Discriminatory Attitudes and Negative Perceptions of Competence Many minority and woman interview participants reported that they still encounter biases, stereotypes and negative assumptions about their qualifications and competency. • Gender Bias and Hostile Work Environments Regardless of their industry, many women reported that stereotypical assumptions about their role and authority are common. • Exclusion from Industry Networks Many M/WBEs found it difficult to penetrate the industry networks necessary for entrepreneurial success. Source: CHA analysis of City of Austin data City of Austin | SMBR 12 Qualitative Evidence cont. • Access to Contract Opportunities Some minority and woman respondents felt that prime bidders often use them only to meet affirmative action goals. • Financial Barriers to Contract Opportunities Many minority and woman owners reported difficulties with obtaining financing and bonding that would allow them to take on more work and successfully compete. • Barriers to Equal Contract Terms Some minority and woman respondents reported being charged higher pricing for materials based on their race, ethnicity and gender. Source: CHA analysis of City of Austin data City of Austin | SMBR 13 Study Recommendations • Use additional Race-Neutral measures • Develop an Annual Procurement Forecast • Centralize the Program’s data collection and reporting in the • Enhance strategies on professional services contracting B2Gnow system process • Use the study availability data to assist in setting MBE and WBE contract goals • Implement a Comprehensive Supportive Services Program • Adopt a Mentor-Protégé Program City of Austin | SMBR 14 Key Findings MBE/WBE Program has proven successful. Contracts awarded to firms located in Texas, accounted for 90% of all dollars during the study period. Austin, San Antonio, Dallas-Fort Worth, and Houston captured 92.2% of the State dollars and 82.9% of the entire FCDF. MBE and WBE weighted availability: MBE – 8.0% and WBE – 6.5% Source: CHA analysis of City of Austin data City of Austin | SMBR 15 Key Findings cont. Disparity Ratio showing a significant disparity for Native Americans. Despite the City’s success, disparities still exist in the marketplace. Source: CHA analysis of City of Austin data City of Austin | SMBR 16 Key Findings cont. Compared to non-MBEs/WBEs, minority- and woman-owned firms were concentrated in a different subset of industries. Three NAICS codes that provide the most contract dollars to each MBE/WBE capture a larger share of the overall City spending received by the group than the share of overall City spending captured by the top three NAICS codes for the City; and The three NAICS codes that provide the most contract dollars to MBEs/WBEs are different from the three NAICS codes that provide non-MBE/WBE firms their most contract dollars. Source: CHA analysis of City of Austin data City of Austin | SMBR 17 Next Steps – Anticipated Milestone Dates July July - Aug Sept Oct Nov Brief MBE/WBE Advisory Committee Conduct Community Engagement Sessions Potential RCA extension of Sunset date Council adoption of New Ordinance Finalize Inclusive Procurement Working Group (IPWG) Recommendat ions Council adoption of Disparity Study Source: CHA analysis of City of Austin data City of Austin | SMBR 18 City of Austin Small and Minority Business Resources Questions DisparityStudy@austintexas.gov City of Austin | SMBR 19