City leaders work to increase business diversity

Despite the potential for legal challenges, St. Petersburg city officials are moving forward with an ordinance to increase supplier diversity and support for minority and women-owned businesses.

During Thursday’s Committee of the Whole meeting, council members heard the third update on implementing recommendations of the city’s Disparity Study. The discussion’s purpose was to highlight progress toward ensuring equitable business opportunities and a framework for an ordinance.

David Malone, director of procurement, began the presentation by relaying steps city leadership has made to increase inclusivity among St. Petersburg’s contractors. The Office of Supplier Diversity (OSD) is now open, and Latisha Binder will serve as its first manager. Recruitment efforts to fill additional key roles are underway.

Administrators have also established an Equity in Contracting advisory group comprised of community leaders with a vested interest in business diversity. Members include representatives from Deuces Live Main Street, Foundation for a Health St. Pete, Pinellas County government, Tampa Bay Black Business Investment Corp. and The Network of Gifted Consultants (NGC Team).

“Formalizing equitable business opportunities and policies demonstrates our intentional commitment to creating a diverse and inclusive culture,” said Mayor Ken Welch in a statement. “I’m proud of our procurement department for making informed decisions based on best practices in this space.”

Malone said the city needs an ordinance to properly address disparities through a Minority and Women-owned Business Enterprise (MWBE) program. He relayed that program officials are working closely with partners at the St. Petersburg Greenhouse to propel the initiative.

However, Malone noted that municipalities nationwide must often overcome legal battles regarding similar programs. “And in many cases, those challenges have been successful,” he added.

Malone said changing the local government’s culture is critical to the program’s success.

“As we present the consent agenda with millions and millions of dollars of contracts, there should be questions about the equity component,” he said. “This program will not be successful if it relies solely on the Office of Supplier Diversity. It is important for every department to have skin in the game.”

Malone said “unbundling” large contracts into smaller subsets could increase opportunities, and administrators must empower the OSD to set goals and make decisions. He expressed that personal accountability for achieving results is also a critical aspect.

National consultant Collette Holt, J.D., then walked council members through the many potential pitfalls of increasing MWBE opportunities through a city ordinance.

“The federal courts are extraordinarily hostile to race and gender-based public contracting programs,” she said.

Holt explained that the Supreme Court struck down previous attempts to establish minority business quotas because municipal attorneys did not sufficiently prove discrimination impacts. Unlike with most litigation, she added, the plaintiff – theoretically the City of St. Petersburg – has the ultimate burden of proof.

Some people believe ordinances meant to increase diversity are impossible to implement due to those precedents, but she said there is a path forward.

“You absolutely can with a solid disparity study that meets all those criteria. And that will support your ability to argue that if you don’t do something – if you don’t take intentional action – then you will be a passive participant in the market failure of discrimination.”

She elaborated that highlighting societal discrimination is not enough. City attorneys must use concrete statistical evidence of bias in business opportunities. In addition, Holt said the program must remain flexible and not include race-based quotas.

Ascertaining success metrics, providing a way for firms to graduate from the program and setting a conclusion date will also help the MWBE initiative withstand legal challenges.

“So, certainly, the ordinance needs to refer back to your disparity study,” she added. “That is the basis for you doing anything that has any race or gender-conscious elements.”

Malone used an analogy of a kid learning how to ride a bicycle to describe moving forward with the program despite its challenges. He explained that the ordinance could serve as training wheels, helping to establish new behaviors.

Once those methodologies are in place, he believes the newfound culture will continue to help the city achieve its goals – even after the program’s sunset date.

“I think we’re seeing a tone coming from the court that suggests some of these things will be sort of taken away,” said Malone. “But if we change the culture, we can still have the same effect. And that, to me, is what it’s all about.”

Tom Greene, assistant administrator for St. Petersburg, said officials now have a legislative outline, and the “hard work” with the legal team will commence in the next few weeks. He said they would bring a draft ordinance to the city council early next year.

For more information about the Disparity Study or the Office of Supplier Diversity, visit the website here.