Minority and women-owned businesses are underutilized in city contracts. This is according to the findings of the 2019 City of Indianapolis Disparity Study conducted by Colorado-based BBC Research and Consulting.
The study assessed the effectiveness of the Minority-, Women-, Veteran-, and Disabled-Owned Business Enterprise (M/W/V/DOBE) Program. Implemented by Mayor William Hudnut in 1984, the program was created to enhance opportunities for M/W/V/DOBE businesses in city contracting.
Mayor Joe Hogsett released the findings in a press conference held Jan. 23. According to Hogsett, tens of thousands of city-county contracts were studied.
“We have work to do,” he said.
When it comes to minority participation in the city’s contracting process, the study found minority and female-owned businesses face significant barriers such as lack of mentorship, less encouragement, and lack of capital.
BBC used data from Jan. 1, 2014 to Dec. 31, 2019. During that five-year period, the city of Indianapolis awarded $128.1 million out of $876 million to minority-owned businesses. Women and minority-owned businesses were eligible to bid on $169 million, or 19.3%, of contracts.
Companies owned by white women were awarded the majority of those funds, $74.4 million, and African American-owned businesses received the second highest percentage of funds, $53.4 million, or 6.1%.
Sameer Bawa, managing director for BBC, said the disparity index was measured by dividing the dollars received by businesses by the dollars available, or what businesses were expected to receive based on population size. Any group with a disparity index of .80 or less is considered to face substantial underutilization. Hispanic American and Native American-owned businesses were the only two demographics to be above the .80 threshold. Because the funding set aside for these two groups is smaller than other demographics, it was easier to reach parity.
These disparities highlight the need for the M/W/V/DOBE Program, run by the Office of Minority & Women Business Development. Bawa looked at survey responses from business owners that suggested the city should work to encourage mentorship and protegee programs for small business owners.
This study is the first of many steps toward parity in local business, according to Camille Blunt, director of the Office of Minority and Women Business Development.
The office will accept public comment on the disparity study through Feb. 29, and Blunt plans to use those comments and ideas to decide what changes can be made to the contracting process to benefit business owners.
“We’re ready to get to work,” Blunt said.
The full study can be found at the Office of Minority and Women Business Development.
Contact staff writer Breanna Cooper at 317-762-7848. Follow her on Twitter @BreannaNCooper.
Disparity analysis of city contracts awarded to women- and minority-owned businesses.
Source: BBC Research and Consulting