The City of St. Louis failed to award contracts to a fair amount of minority- and women-owned businesses in construction projects from 2007 to 2012, according to a disparity study released April 28 at the St. Louis Development Corporation office.
Mason Tillman Associates, who conducted the study, specifically found a disparity in how the city awards construction contracts to African American-owned businesses, both as prime contractors and subcontractors.
It also showed that black businesses earn a small portion of the city’s contracts overall, including for goods and services. During the five-year period, black businesses received 6.43 percent of all prime contract dollars, or $30.4 million. However, businesses owned by non-minority males garnered almost 90 percent of the prime contracts, or $424 million.
In fact, 44 vendors received 70 percent of all prime contract dollars, or $332 million, even though the city awarded contracts to 969 vendors during that time.
In her presentation of the study, firm president Eleanor Mason Ramsey said that this was typical among cities. They often develop relationships with a small group of vendors and award them large contracts year after year. Ramsey strongly urged the City of St. Louis to change this practice.
“That’s the pattern,” she said, “and we will look at some recommendations intended to spread those dollars around so more vendors can see dollars and larger contracts.”
The firm also found that there are enough black subcontractors in the local construction field that they should receive 21.35 percent of the dollar amount of city construction contracts. Women subcontractors should receive 11.25 percent of construction work.
These percentages differ from the city’s current minority participation goals on construction contracts, which are 25 percent for minority subs overall – not just African Americans – and five percent for women subs.
The disparity study gives the city the power to actually enforce its minority participation goals. Many local governments and public agencies started conducting disparity studies after the 1989 U.S. Supreme Court ruling in the case of City of Richmond v. J.A. Croson Co. The U.S. Supreme Court ruled that the City of Richmond’s minority participation program for municipal contracts was unconstitutional, after finding that the city failed to identify a substantial need to level the playing field for minorities and women business owners.
Now if cities want to set penalties for contractors who fail to abide by their minority participation goals, they have to conduct disparity studies to provide this “substantial need” that the court requires. Without a study, contractors can sue the cities for enforcing goals.
The study also gives supportive data to advocacy groups who have been fighting to ensure that minority construction businesses stay afloat in a white-dominated field.
Adolphus M. Pruitt II, president of the St. Louis City NAACP, said now that the firm has calculated the disparity, the city’s projects must comply with the goals outlined in the study. And if city leaders try to waive the minority participation requirements for contractors – as they have in the past – it gives the advocacy groups the ability to seek injunctive relief, he said.
“We would basically sue to stop projects to enforce the goals if they are not doing it the way that they are supposed to,” Pruitt said.
The study also shows how poorly the minority subcontractors are doing growing their businesses, Pruitt said. The 25 percent minority participation goal was set nearly 20 years ago, and the needle hasn’t moved.
“The prime contractor community has had a monopoly on everything and artificially keeping the minority contract community where it’s at,” Pruitt said. “If they don’t hire you as a sub, you don’t do business. This demonstrates that they have been keeping the growth down.”
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