OPEN works to increase minority contracts in public spending
Special to The Cincinnati Herald
Opportunities for Public Engagement Network (OPEN) Cincinnati is an initiative of the African American Chamber and the City of Cincinnati aimed at accelerating inclusion outcomes for the City’s SBE program in a manner that more fully engages minority businesses in the City of Cincinnati’s public spending contracts. Over the past several months there has been a lot of discussion and dissatisfaction with the rate at which minority businesses contract with the city.
“Close to 7,000 entities are part of the African American small business sector and there are nearly 800 Hispanic business owners in Greater Cincinnati,” says African American Chamber of Commerce President Sean Rugless.
“It is our intent to reach and grow our region’s largest minority segments. While African Americans make up a significant portion of the city’s population, they have not had significant participation in the city spending on projects and procurement opportunities.” There are many figures floating around. Is it $656 million or a billion dollars? Does the city have a set aside program and if so, what percentage goes to minority businesses? Who is accountable for outcomes?
“Minority business owners are facing the outcomes of a failed program. The question now is how can OPEN Cincinnati respond to these disparities in a manner that institutes real change and a more open and inclusive City of Cincinnati SBE program,” Rugless adds.
Cincinnati Mayor Mark Mallory has indicated that he and his administration are unhappy with this trend. “No one is satisfied with the results of the current SBE program,” says Mallory. “The desired outcome is to create opportunities for minority businesses to engage more fully in the City of Cincinnati’s public spending contracts. It is expected that this initiative will accelerate opportunities for minority and small business inclusion in responding to city contracting offers.” The City Council voted unanimously to create the OPEN Cincinnati Action Team.
OPEN Cincinnati is co-chaired by Rugless and Rea Waldon, senior vice president of Economic Empowerment and Entrepreneurship at the Urban League of Greater Cincinnati. It is a coalition of three Chambers of Commerce, several minority business organizations, minority business enterprises, representatives of the faith community and inclusion experts. Jose Guerra, president of L5 Source and Simon Sotelo, vice president-community development consultant, PNC Bank represent the Hispanic Chamber on the OPEN Cincinnati Action Team. “We are very excited to join the African American Chamber in this important effort,” says Guerra. “We have a vibrant, diverse economy in Greater Cincinnati and all of us are looking for ways to leverage the talents and expertise of minority business owners in expanding the current City SBE program. No one is looking for a handout; but rather an opportunity to participate fully in the City’s contract bidding process.”
The desired outcome from the OPEN Cincinnati process is to make specific and practical recommendations for short-term changes to the City of Cincinnati’s Small Business Enterprise program aimed at accelerating substantive participation of minority owned firms. Given the scope of the process, the Open Cincinnati Action Team began an extensive policy review of the City’s SBE program mindful of the reaction and outcomes of a history of legal challenges that influenced inclusion policies nationwide.
In the review of the established policy and the legal history of the City’s SBE program Rugless states, “The results of our investigation show a long pattern of local and national legal challenges to race based programs has resulted in a complicated minority contracting process for the City of Cincinnati.” Rugless adds, “ With an overriding caution toward future lawsuits surrounding minority contracts and the legal limitations on having race-based directives in the existing policy, makes it extremely difficult for this program to achieve proportionate minority participation in a race neutral way.” .
Understanding these challenges, OPEN Cincinnati benchmarked the City of Cincinnati’s SBE program against similar-sized, race-based and race-neutral programs in Atlanta, Cleveland and Pittsburgh, among ten others. The purpose was to identify the components in other programs that could help increase minority owned business participation or eliminate gaps that lead to institutionalized exclusion.
OPEN Cincinnati also reviewed the administration of the program. One major learning was that effective programs are found to have strong management oversight and processes that are conducive to small business participation. Guerra of the Hispanic Chambers comments, “Right now, the barriers to participation for minority businesses are high and require an extensive understanding the bid process, contract size, and the rigorous, sometimes invasive process of submission. Rugless adds, “We must also keep in mind that some of those minority businesses that have successfully completed the process to be certified experienced little value in the way of new contracts. Internal management and accountability are keys to program success.”
One question that the action team tackled was trying to understand just how much money is being spent under the auspices of the SBE Program. “With over 20 city departments seeking services and awarding contracts, in the short time we have been involved in this project, it is unclear how much money is being spent and whether or not the city’s inclusion levels are low in every area,” states Rugless. The focus of OPEN Cincinnati at this point is on the procurement activity. The current SBE policy also covers spending in other areas including the Metropolitan Sewer District, the Banks project or community development initiatives; this spending may not be included in the existing reports.
“The opportunity for the City to strengthen its communication and interaction with minority businesses is virtually untapped, “says Rugless. “We have thousands of African American and Hispanic businesses in the region, but only several hundred total small businesses registered in the SBE program. Additionally, while the city’s inclusion efforts in the construction industry have been present, OPEN Cincinnati feels there is a stronger level of business engagement and tangible opportunities for professional services and non-construction expertise.
The OPEN Cincinnati Action Team is researching the current capacity of minority businesses and how to move them into a state of “ready-to-do business” with the city. An outcome of OPEN Cincinnati is to proactively accelerate access to major corporate markets for minority and small businesses by increasing business opportunities and developing strategic partnerships and alliances.
“The outcomes of our investigative process can help shape the business opportunities for minority and small businesses throughout the Greater Cincinnati area. We are grateful that the mayor, city administration, and City Council have made this a priority and have been a willing partner in getting to the right answer. They have been open to a data driven, evidence based approach that will yield short and long term outcomes.”
The complete action plan will be delivered to City Council in early June.
“We are exploring ways that are feasible and can be implemented with deliberate speed. A reasonable outcome from this process is that the City of Cincinnati’s SBE program will one day be viewed as a best practice for minority inclusion. It will take time to work through an issue that has been in place for a decade, but positive steps are being taken and this is the first one.” Waldon adds, “All of us are working together to ensure that minority businesses have a place at the economic table,” she continues. “We are committed to providing a voice for business owners and this is a proactive endeavor that will have positive outcomes for everyone.”
“If we are to become the region that is envisioned in Agenda 360, where growing businesses, developing a qualified workforce and building an inclusive environment are some of its priorities, then OPEN Cincinnati is an important enabler in helping achieve those priorities,” concludes Guerra.
For more information about OPEN Cincinnati or the African American Chamber, please visit the Chamber website at www.gcaacc.com
The African American Chamber’s mission is to establish, cultivate, and strengthen business relationships in Cincinnati.
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