Government
BY KEVIN VU
Houston officials conducted a disparity study in 2023 for the first time since 2006 to determine the fate of the Minority & Women-Owned Business Enterprise program, which allows minority- and women-owned businesses an equal opportunity to work on city government contracts. A disparity study determines whether a government entity engages in practices that exclude minority, women-owned businesses when awarding work contracts, according to the Office of Business Opportunity. Cylenthia Hoyrd, director of the office, said the study provides actionable results that can be used to “narrowly” change parts of the program. The study looked at whether these businesses faced disparities in business categories such as construction. The study found no disparity for Hispanic- or Asian-owned businesses in the construction and professional services categories. Houston reviews contract awards Breakdown of Houston contract awards A 2023 disparity study found that the city utilized 28.5% of businesses classified as minority- or women-owned from Fiscal Year 2018 to 2022.
The background
What’s next?
The Office of Business Opportunity has offered the MWBE program since 1984. However, a lawsuit filed in 2023 against the city by a white couple from Spring who own two landscaping companies states the program violates the equal protection clause of the 14th Amendment of the Constitution. The couple claims their companies were in a five-year, $1.3 million contract with the city; however, under the program’s rules, they were forced to pay $143,000 to a minority-owned competitor to finish part of the work, according to the lawsuit. The trial will determine whether or not the program is unconstitutional, and, if so, the pro- gram could be forced to shut down, Hoyrd said. City Attorney Arturo Michel said the disparity study, conducted by MGT, a global solutions company, will help the city defend itself in the lawsuit. Michel said if the city doesn’t adopt the recom- mendations from the study, the trial will proceed under the outdated 2006 study without recent data to back up the program. “I’d like to say without adopting the updated ordinance that supports the findings in the study, we do risk a 40-year setback,” Hoyrd said. Laura Murillo, the president and CEO of the Houston Hispanic Chamber of Commerce, said she believes sample size matters and the study needs more participants to make an accurate assessment. Vernetta Mitchell, an economic inclusion leader with MGT, said while the study reached out to over 30,000 entities, only 800, or 2%, responded.
Michel said the U.S. District Court for the Southern District of Texas has given Houston until the second week of April to decide whether or not to accept the recommendations from the disparity study, which includes the groups that faced no disparity to be moved into a race-neutral, small- business enterprise category. Houston City Council decided to push back the vote on the disparity study to May 7, after press time, which Council member Mario Castillo said would allow the administration more time to engage with stakeholders and hear their ideas. “While the data collected provided a snapshot, a lot of stakeholders, for whatever reason, weren’t a part of that process and had ideas to share that we need to consider,” Castillo said. Michel said the delay will give the council the flexibility to bring the proposed changes back sooner for the court case if needed. “I understand we’re in a rock and a hard place, but we’ve got to work out a way to make this work for everybody. We cannot take this program that has been so successful for all different races.”
Unclassified: 71.5% Hispanic Americans: 12.6% Nonminority women: 6.2% Black Americans: 5.5% Asian American: 3.5% Native Americans: 0.6%
GREGG REYES, CEO OF REYTEC CONSTRUCTION RESOURCES
SOURCES: CITY OF HOUSTON, MGT/ COMMUNITY IMPACT
NOTE: BUSINESSES DETERMINED AS UNCLASSIFIED ARE NOT IDENTIFIED OR CERTIFIED AS MWBE OR COULD NOT BE DETERMINED AS SUCH.
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