Black- and minority-owned businesses lose out on the majority of city contracts even though people of color make up the majority of Philadelphia’s population.
Voters will determine whether to give them a boost to better compete for future contracts.
A November ballot question will ask whether to change the city’s Home Rule Charter to increase the threshold that triggers a request for proposal (RFP) and formal bids from businesses for most city contracts to $75,000 from the current level of $34,000. City Council approved a resolution with the question on Thursday.
At-large City Councilman Derek Green, the main sponsor of the resolution, said the RFP process was time-consuming and cumbersome.
“Many businesses, especially local minority businesses, don’t believe they can compete in getting work with the city of Philadelphia” due to the RFP process, Green told The Tribune in April when he proposed the resolution.
So larger companies have won contracts again and again.
A change to the charter could attract more Black- and minority-business owners to compete for city contracts and allow the city to use its procurement process as an economic engine to help reduce Philadelphia’s 26% poverty rate, Green said.
“We need to grow out of poverty,” he said.
The resolution also would carve out a preference for local businesses to allow them to skip the RFP process for city contracts under $100,000.
Minority-, women- and disabled-owned enterprises have received 33.9% of all city contracts through the second quarter of fiscal year 2019, falling short of the administration’s 35% goal.
However, Blacks and people of color make up 65% of the city’s population, compared with whites who make up 35%.
Two years ago, voters approved a ballot question to allow the city to consider factors beyond cost when awarding some contracts, including workforce diversity. The city has used this “best value” approach only a few times since its passage.