Authorities ask Berkeley to change contracts amid ‘shocking’ disparities

A new analysis has revealed significant racial disparities in Berkeley’s contracts for construction and other services. Credit: Supriya Yelimeli

Businesses owned by people of color and women lost more than $ 20 million in business with the city of Berkeley between 2016 and 2019, according to new analysis that found the city disproportionately awarded contracts to businesses owned by white men.

City leaders are currently working on potential contracting policy changes that aim to rectify widespread disparities identified in a report released by Mason Tillman Associates last week.

The report found that if the black and white women-owned businesses had been awarded contracts at a rate proportional to their share of bidders, they would have received $ 37.9 million in contracts over the four years covered by the to analyse. Instead, the total value of contracts for these companies was $ 16.2 million.

Businesses owned by white men, on the other hand, received just over 80% of the city’s contract dollars, while a proportional distribution would have given these businesses 57.5% of the spend.

“We are indeed made aware of what appears to be a fairly significant case of continuing discrimination,” said board member Ben Bartlett, who commissioned the procurement study in 2017, after a presentation of the data at the meeting. Tuesday city council meeting.

The researchers divided the contracts into three categories – goods and services, construction and professional services – which were then divided according to their value, between “formal” contracts worth at least $ 25,000 and contracts. Smaller “informal”.

Black-owned businesses were “underutilized,” meaning they were awarded contracts at a lower rate than their presence among bidders, at statistically significant levels across all six categories, according to the report. With large construction contracts, for example, only 2.7% of the city’s spending went to black-owned businesses, who would have expected to receive 16.2% of the contract dollars if they were distributed. proportionately. As a result, the study estimated that black-owned construction companies lost more than $ 4.2 million.

The situation was even more dire for local black businesses, despite a program in place since 1983 giving Berkeley-based businesses a head start in municipal contracting. Black-owned businesses in Berkeley got no contracts in the four years covered by the study, while 7% of spending went to local businesses as a whole.

Other racial groups and white women also experienced disparities, as the report found that businesses owned by white men were “over-utilized” to statistically significant levels across categories.

Presenting the findings Tuesday, Mason Tillman Associates CEO Eleanor Mason Ramsey told the board, “This analysis gives us evidence of intentional discrimination and systemic practices that explain, or (are) associated with, the findings of the disparity.

Mayor Jesse Arreguín called the data “shocking”, while city council member Sophie Hahn said she felt “ashamed and frustrated” that the city did not act more urgently to change its practices .

Others have described the data as valid. Bartlett said this confirmed what he “knew to be anecdotally true” after hearing from local black business owners who felt left out of city contracts, despite Berkeley’s reputation for progress.

“People have been complaining about it from day one,” Bartlett said in an interview. “They just feel like no one is on their side, and in this city of all cities.”

Mason Tillman Associates conducted similar studies on public markets across the country who also documented racial disparities; Oakland leaders made several changes to their contracting programs earlier this year, following a 2017 report of the firm. Oakland-based Mason Tillman Associates also investigated workplace discrimination complaints filed by City of Berkeley employees in 2014.

In his latest report, Mason Tillman presents Berkeley with a long list of recommendations for action to address contractual disparities, some of which would give businesses owned by people of color and white women a slight edge in some appeal processes. ‘offers. Many of these efforts are expected to be narrowly tailored to comply with federal court rulings that limit the scope of affirmative action programs, as well as California Proposition 209, Voters State Constitutional Amendment approved in 1996 and confirmed last year, which broadly prohibits consideration of race or gender in local public procurement and other public functions.

Arreguín said he would work with Bartlett and City Manager Dee Williams-Ridley to develop a set of policy changes in response to the report.

“We are committed to following through on this,” Williams-Ridley told city council.

Bartlett was particularly interested in the report’s recommendation that Berkeley create an office of racial equity – an idea he and board member Rashi Kesarwani proposed last year – saying the office could oversee efforts to resolve the issues. disparities in contracts. It also supports the provision of additional training to women-owned businesses and people of color on how to navigate the procurement process and improve their offerings.

Addressing these disparities is a step towards realizing the economic component of racial justice, Bartlett said.

“Coming out of the racial calculus, as they call it, last year, people understand that we have to put corrective measures in place – and that’s more than the police,” he said. “This is where the rubber meets the road.”

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