One of the most vital missions of any disadvantaged business program is increasing the capacity of minority and women business enterprises. But in the St. Louis Disadvantaged Business Enterprise (DBE) Office, capacity-building has become unorthodox and borders on interference.
Over the past year, the DBE office’s capacity-building methodology has centered on subjective matchmaking, threats of holding up project approvals that would result in costly delays and favoritism.
The DBE office has fostered an atmosphere in which both minority and majority contractors dare not disagree with the advice and counsel of the compliance officer for fear of reprisal. The most powerful link for minority subcontractors in landing a contract is a sign-off from the compliance officer, and the same applies to a developer or contractor wishing to proceed with a project.
In one instance, a minority company was the low bidder on a project, but when the company’s bid was submitted for approval to the DBE office, the office withheld approval and suggested to the majority firm to find another minority company due to the fact that this particular minority company had too much work and it was the opinion of the DBE office that this company could not handle any more work. The company in questioned had no idea it was being subjected to the additional scrutiny.
In another instance, a minority general contractor was being considered for a considerable project and the DBE office objected, fearing that the minority firm would grow too fast. This opinion was given in the absence of any empirical data or analysis of the company’s condition.
In some instances, when a minority subcontractor is failing on the job the DBE office has blocked the majority firm from switching minority subcontractors, despite the fact that both were certified and all parties agreed on the switch. In this instance, a minority subcontractor was facing failure and the DBE office would not allow for a saving grace.
The DBE office lacks any industry-standard assessment tools that analyze the condition of companies and assess their business model for growth and their existing capacity. They rely solely on the number of known projects a company is working on and previous experiences of interaction with the company in question.
Outside of being a certified minority- or women-owned enterprise (M/WBE) with Central Business Index clearance, there exist no other criteria that a company is obligated to meet under the Mayor’s Executive Order to secure sign-off for participation on a project and be counted towards the M/WBE goals.
Over the past 10 years, the DBE office has had $3.5 billion worth of opportunities to build the capacity of M/WBEs, utilizing the goals established by the Mayor’s Executive Order. According to the DBE office, they have never met the goal.
To be successful in the new economy, minority firms must build greater scale and capacity. Policies targeted to increase the growth and performance of the minority business sector are likely to have an impact on job creation, especially among African Americans and Hispanics – which will result in a profound impact on our regional economy. The city’s DBE office is failing its minority contractors and, thereby, preventing the region from growing along with them.
Pruitt is president of the St. Louis city branch of the NAACP.
