The data behind the city’s boost in MWBE contracting goals

May. 8, 2013Houston Chronicle

Houston City Council on Wednesday unanimously passed changes to the city’s affirmative action program, increasing small, minority- and women-owned businesses target share of construction work from 22 percent to 34 percent, and adding women back to the program (they’d been removed in a 2009 lawsuit settlement).

Here is today’s story for more background, and here is a story explaining the 2009 settlement. There are three items we didn’t have space for in the story that are worth noting here.

First, some numbers. Those around the council table praised the goal increase as a big deal today, but Houston already exceeded that goal, reaching 34.4 percent in fiscal year 2011, when the stated goal for construction was still 22 percent. The city also reached 32.4 percent participation last fiscal year.

Mayor Annise Parker has said repeatedly that small and minority firms were awarded more work during the last fiscal year (FY2012, which ended last June) than ever before. It turns out that’s not only true in construction work ($229 million) but overall ($340 million) and as an overall percentage of total work performed (25.7 percent). This is true at least back to 2005, the oldest year for which I have data. (Click here for a spreadsheet showing all the data.)

Also worth mentioning: Of the $229 million awarded in FY2012, certified firms were prime contractors for $105.8 million, or 46 percent, of the work, and were subcontractors on $123 million, or 54 percent, of the work. The substantial prime contracting share proves the program does not impede competition, said Carlecia Wright, director of the city’s Office of Business Opportunity, adding that subcontractors also must be qualified.

Second, the disparity study. The 2009 lawsuit settlement required a disparity study of city contracting to determine whether the city was justified in including women. After analyzing $2.82 billion in contracts over more than five years, the study showed that Hispanic and Native American business owners were receiving a parity of work but that firms owned by blacks, Asians and women were underrepresented (and that women’s share of city construction business was cut in half following the 2009 settlement). See slides 3-5 of this presentation, they’re really interesting.

After the City Council vote today, Women Contractors Association president Lenora Sorola-Pohlman said it was unfortunate her members had to wait five years to reenter the program.

“We’re happy women are back on the program. We’ll flourish like we did before,” she said. “Hopefully we don’t flourish so well they remove us again. It was only because of the goal they were hiring us. I was happy to see it was a unanimous vote, which doesn’t happen very often.”