East Baton Rouge Parish leaders are looking at a proposed new ordinance that would give local small businesses and firms owned by women, minorities and veterans better access to municipal contracts — and perhaps save taxpayers money.
The idea is still in draft form but it could give the city-parish the power to invalidate bids from contractors who don't make a "good faith effort" to work with "socially or economically disadvantaged" sub-contractors.
It's one of several recommendations that grew out of a $300,000 disparity study commissioned by the city-parish from Keen Independent Research, a Denver-based agency which presented findings to the Metro Council in November 2019.
At the time, council members were disappointed — but not shocked — to learn that only 4% of the approximately $2.4 billion in city-parish contract dollars between January 2013 and September 2017 went to minority- or women-owned firms. And only 1% went to veteran-owned businesses. Small businesses received just 10% of all city-parish expenditures.
Those percentages were substantially lower than the 21% that researchers said should be expected considering the number of business locally that fit into those categories and are eligible for municipal contracts.
"Without additional action, the city-parish is at risk of being linked to a marketplace that perpetuates unequal outcomes for minority- and women-owned firms," the report states. "The health of those small businesses is critical to the local economy."
The city-parish can't avoid public bid law, which says that on invitations to bid, the municipality has to go with the lowest responsive offer.
But the parish's purchasing director Kris Goranson said an ordinance could allow the city-parish to add a stipulation that contractors dedicate a certain percentage of their business to disadvantaged sub-contractors. If a contractor can't meet the threshold set by the city-parish, they'll have to certify that they made an effort to meet it or risk losing out on future contracts.
“It’s going to be an overall goal. It's not a quota. It’s not a mandate. It’s not a set-aside,” Goranson noted.
To identify disadvantaged firms, the city-parish will soon roll-out a joint certification program with BREC and the Baton Rouge Metropolitan Airport, which will vet businesses to determine if they qualify for the designation.
Mayor-President Sharon Weston Broome originally promised that the program would start in December, but Goranson said coordinating with the various agencies involved in the joint certification took longer than expected and he now anticipates its completion by the end of March.
Unlike the federal government, the city-parish can't automatically decide a firm is disadvantaged based on the owner's race or gender. Instead, Goranson said, the city-parish will likely ask businesses to supply financial documents to qualify, but the city's attorneys are still refining the exact requirements.
Goranson said that if the program works as intended, the city-parish will help develop a larger pool of local contractors to draw on, creating a more competitive environment that could lower costs and save taxpayers money in the long-run.
The requirements for certification locally will be less stringent than that required by the state or federal government, but Goranson said the city-parish will help businesses get that advanced certification if they're interested.