West Palm Beach postponed a final decision on major changes to its minority small business program, which would include increasing the number of businesses eligible to participate and requiring prime contractors to partner with smaller businesses rather than having that as a goal.
Changes to the schedule were expected to receive final approval at Monday’s City Council meeting, but Mayor Keith James said he wants the agenda item to continue until February.
“This will give staff the opportunity to sit down with industry representatives and hear any questions and concerns they may have,” the mayor said.
West Palm Beach is considering these changes at a time when diversity, equity and inclusion programs in government, academia and business have been established. to be attacked by political conservatives who denounce them as reverse discrimination. Some professional groups have long viewed aid programs for small businesses and minorities in the same light, despite studies that have shown that small businesses and minorities get a disproportionate amount of government contracts.
In 2018, Associated General Contractors, a trade group, challenged the work from a company that was conducting a disparity study on behalf of the Solid Waste Authority of Palm Beach County. The county was considering reinstating its minority small business assistance program and, because court rulings have prohibited such programs unless they are put in place to address disparities identified in a particular market, l The study on disparities was a necessary first step. stage.
The county and its Solid Waste Authority ultimately reinstated assistance programs for small and minority-owned businesses.
AGC will have the opportunity to weigh in on the proposed changes in West Palm Beach.
“I understand there have already been meetings planned with the MCO in January,” James said.
This year, West Palm Beach decided to spend up to $300,000 on a study to show whether minority-owned small businesses were still receiving a disproportionate amount of government contracts. That study has not yet been undertaken, but after the county changed its aid program for small and minority-owned businesses, West Palm Beach is considering changes to its own program.
In the absence of City Commission members Cathleen Ward and Christina Lambert, the commission gave preliminary approval to the changes on November 25.
These changes include renaming the city’s Office of Economic Opportunity to the Office of Small Business and Minority Programs. The amount of gross revenue a business could make and be considered a small business would be increased.
What is considered a “small business” in West Palm Beach?
In the construction industry, a business with annual gross revenue of no more than $13 million would be considered a small business. The old gross revenue limit for construction companies was $9 million.
The gross revenue threshold would increase from $5 million to $7 million for goods and services businesses and professional services businesses.
“Small businesses have contacted us to consider increasing these numbers,” said Frank Hayden, director of the city’s Office of Economic Opportunity. “When we increase it, it will increase the number of businesses that can participate in our program.”
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Another change that could have an even greater impact on the program is moving small business participation in contract work from a goal to a requirement. Many cities and counties have resisted such a policy in the face of complaints — and potential legal challenges — over the quotas.
In 2020, the city set a goal that 15% of government contract work would be awarded to small businesses. The city wants to change this figure to reach 18%.
This would mean that a large company bidding for a large contract would have to explain how it will partner with a smaller company to allow it to handle at least 18% of the work. The main contractor or “project manager” could no longer simply state his objective of entrusting one or more small companies with 15% of the work.
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The program director would have the authority to change the small business participation requirement, but Hayden said prime contractors have met and exceeded the 15 percent goal. If the changes get final approval in February, they will have to continue doing so.
An offer must first be deemed to meet the city’s expectations before it can be accepted.
“If we say it’s an 18% stake, we expect the premiums to hit that target,” Hayden said. “If they do not meet these criteria, we have determined that they will be deemed ineligible.”
Commissioner Shalonda Warren, who supports the city’s business assistance programs, said she was particularly pleased with some of the planned changes.
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“I believe it is important that we increase the threshold because, if the cost of goods increases, the cost of labor has increased, so it is only natural that their total revenues will increase, even if the net income does not increase.” really changed a lot,” she said.
Wayne Washington is a reporter who covers West Palm Beach, Riviera Beach and race relations for the Palm Beach Post. You can reach him at wwashington@pbpost.com. Help support our work; subscribe today.