The New Orleans office that determines whether firms seeking public contracts are truly “disadvantaged business enterprises” will unveil a new certification process in January that shortens the waiting period and clearly identifies what makes a firm “disadvantaged.”
Those were goals outlined Wednesday by Mayor Mitch Landrieu’s administration, as it continues to expand its economic opportunity strategy, launched last year in response to a report that showed a black male unemployment rate of 52 percent in the city.
Disadvantaged business enterprises, or DBEs, are typically small, minority- or women-owned businesses that meet certain socio-economic criteria, and those that qualify can benefit from a city goal of awarding 35 percent of city contracts. But the city has not publicly stated the reason each firm is considered disadvantaged.
That will change next year in an effort to make the program more transparent, said Ashleigh Gardere, the mayor’s senior adviser for economic opportunity. “Now we will be able to say, ‘This is why they were certified; this is how they met that definition of social and economic disadvantage,’ ” she said.
The certification process also will be shortened from 45 to 15 business days after a completed application is received, city spokesman Hayne Rainey said.
It once took a business as long as a year to get certified.
Also starting in January, officials will train local contractors and city departments on the city’s new local hiring ordinance and revised DBE policy.
The local hiring ordinance and the rules that govern it, which the City Council approved in October and December, respectively, require businesses in 2016 to make a “good-faith effort” to funnel 30 percent of all work hours on certain city contracts to New Orleans residents, and 10 percent of such hours to “disadvantaged local workers,” or local residents whose income is less than half of the area’s median income or who face other employment challenges.
The goals will increase by 5 percent annually until 2020, when half of all work hours are to go to locals and 30 percent to disadvantaged locals.
Separately, the new DBE rules, which will also be applied next year, are intended to give city’s goals some teeth. They require DBEs to perform 51 percent of the value of their subcontracts themselves. They may assign the rest of their work to other companies, but only work completed by other certified DBEs will count toward the overall participation goals.
That’s a crucial step that bans a scenario where a larger firm hires a DBE to meet a participation goal, only to have that DBE pass its contract work to other non-DBEs or back to the larger firm.
Such was the case on the $600 million Iberville redevelopment, The New Orleans Advocate reported this month: Construction firm Woodward Design + Build hired Nolmar Corp., a DBE, to meet its DBE obligation. Nolmar later subcontracted its work to two Woodward subdivisions and other non-DBEs.
Also coming in 2016:
A long-awaited disparity studywill examine the gap between the availability of DBEs and the city’s use of them, with an eye toward determining whether the DBE program is reaching minority-owned businesses. That study, which Landrieu pledged to conduct in 2010, will take a year to complete and cost $500,000.
The city’s new living wage goes into effect Jan. 1, requiring that employees working for companies that receive city contracts be paid a minimum of $10.55 an hour and receive seven paid sick days. Contractors with $25,000 or more in annual city contracts must pay their employees at this rate, as must any recipient of financial assistance from the city worth $100,000 or more over any annual period.
The city will partner with the hospitality and tourism industry to help connect job seekers with work opportunities. Thus far, it has partnered only with large employers in the health care, infrastructure and information technology industries.
Follow Jessica Williams on Twitter, @jwilliamsNOLA.