PHILADELPHIA — The City’s Office of Economic Opportunity today released its Annual Disparity Study for Fiscal Year 2020 (FY20), using data from July 2019 to June 2020. The Disparity Study examines the availability and utilization of minority-, women-, and disabled-owned business enterprises (M/W/DSBEs) on City contracts. To supplement the Disparity Study, an Availability Study was also commissioned to examine the availability of M/W/DSBEs to do business with the City against the City’s actual utilization of such businesses.
“We are committed to closing the opportunity gap experienced by minority-, women-, and disabled-owned businesses,” said Mayor Kenney. “I am proud of what we have accomplished so far, but we also recognize there is still a great deal more we must do. These studies will help guide our efforts to increase the participation of diverse entrepreneurs in doing business with the City.”
“The FY20 Disparity Study shows that, while we’ve made significant progress during the last six years of this administration, we have more work to do to provide contracting opportunities for minority-, women-, and disabled-owned businesses,” said Commerce Director Michael Rashid. “I am encouraged that the Availability Study shows there is a sufficient supply of diverse businesses in Philadelphia for us to meet our ambitious goal of 35 percent participation. The findings and recommendation in these studies are a critical step in living up to our commitment to expanding supplier diversity and ensuring more M/W/DSBEs are engaged in City contracts.”
The FY20 Disparity Study analyzed the inclusion of M/W/DSBEs on $901 million in City and quasi-public contracts. The study determined that 30 percent of City for-profit spending went to M/W/DSBEs. Recommendations to improve the total M/W/DSBEs contracting included expanding programming geared towards economic inclusion, such as the Emerging Vendors Program, and increasing the number of businesses registered with the City by paying for M/W/DSBE certifications.
The FY20 Availability Study was performed by Econsult Solutions, Inc., a Philadelphia-based firm selected through an open RFP process earlier this year. One of the key takeaways for the study is that there is a sufficient supply of minority and women-owned businesses to meet the administration’s goal of 35 percent participation. As part of the study, Econsult Solutions, Inc. surveyed businesses in the region and several responses were tailored around providing M/W/DSBE businesses with more assistance navigating the City’s procurement system.
Several efforts have been undertaken to increase the participation of M/W/DSBE firms, including the creation of the Mentor-Protege Program. The program connects small minority-owned firms with larger firms to receive mentoring and guidance. The program allows small firms to hone skills, strengthen their back-end, secure introductions to key people in their industry, and potentially even work with their mentor on a contract.
To increase opportunities for small businesses, particularly M/W/DSBE firms, the City is working to reduce barriers to entry for contracts thanks to the Local Business Purchasing Initiative (LBPI). In September 2020, the threshold requiring formal bids for City contracts rose from $34,000 to $75,000—and to $100,000 for local businesses. Philadelphia-based businesses must register as a Local Business Entity (LBE) to take advantage of the new local business threshold.
The Disparity Study’s companion report on workforce composition includes the distillation of 1,836,477 employment hours worked by various trades on construction contracts from July 1, 2019 to June 30, 2020. Overall minority workforce participation was 39 percent for FY20, less than a percentage below the stated 40 percent goal. With this year’s positive outcome, the recommended goal for minority participation in the workforce remains at 40 percent for FY21.
The FY20 Disparity Study and Availability Study can be found online.