Three Black and Latino organizations filed a federal civil rights complaint Wednesday against the City of Boston, alleging its public contracting system engages in a pattern of discrimination against Black- and Latino-owned businesses.
The Black Economic Council of Massachusetts, the Greater Boston Latino Network, and Amplify Latinx filed the complaint with the Department of Justice and Department of Transportation, days after Mayor Martin J. Walsh’s administration completed a study showing that just 1.2 percent of nearly $2.2 billion in procurement from 2014 to 2019 went to Black- and Latino-owned businesses.
The complaint, coming in the closing days of Walsh’s tenure, noted that had the city contracted with all available Black and Latino businesses, it could have steered an additional $76 million to them.
The groups allege the contracting practices violate federal civil rights law, as well as regulations that prohibit recipients of federal funding, such as the City of Boston, from “unjustified practices that create a disparate impact and exclude minorities.”
A spokesperson for Walsh declined to comment on the complaint.
The legal challenge came a day before Walsh is expected to issue an executive order to establish specific goals to steer more city contracting dollars to businesses owned by people of color and white women. The order Walsh is expected to sign Thursday would require at least 11 percent of city spending on construction and professional goods and services to go to businesses owned by white women, and 6 percent to those owned by people of color, according to a person who has been briefed on the contents.
The targets are based on the pool of businesses available for such work, according to the new city study; currently, about 11 percent of city contracting goes to businesses run by people of color and white women.
Segun Idowu, president of BECMA, the lead plaintiff in the civil rights case, said the goals in the proposed executive order were “low,” given that in Boston people of color make up more than half the population. He would like to see the city set a target of 40 percent for businesses owned by people of color and women, including 15 percent for Black-owned firms.
“The time for papering over gaping disparities with hollow statements and weak action is over,” said Idowu at a news conference.
This would be the third executive order Walsh has issued to improve participation rates. But it also comes just days before the mayor is expected to leave his position to become labor secretary in the Biden administration.
Fearing that Walsh is rushing to get the executive order out before his departure, Lawyers for Civil Rights last week sent a cease-and-desist letter to the mayor urging him not to make any changes to the procurement process until there is a robust public discussion about the study. The plaintiffs, which are being represented by Lawyers for Civil Rights, also urged the mayor to forgo another executive order. Instead, they want federal agencies to launch an investigation into their claims and convene local stakeholders to determine remedies to the ongoing contracting problems.
How the city creates a more equitable contracting process is likely to become a major mayoral campaign issue. City Council President Kim Janey, who is set to become acting mayor, has pressed the Walsh administration on the matter.
In a statement Wednesday, Janey said “racial disparities in public contracting are unacceptable and will not stand when I assume the powers of Mayor” and pledged to convene meetings with affected groups to ”implement solutions in City Hall.”
Three other city councilors who are running for mayor are also promising to make changes. One candidate, City Councilor Andrea Campbell, said Wednesday that the complaint demonstrates the frustration residents and advocates have over what she called “the lack of accountability and transparency from the Walsh administration” on efforts to close the city’s racial wealth gap.
“They don’t want another executive order, they want action and intentionality,” said Campbell.
Another councilor running for mayor, Michelle Wu, sponsored a 2017 city ordinance that was intended to provide more transparency and community outreach on contracts. In a statement Wednesday, Wu said she was “outraged at the lack of progress” and said Boston needs ”leadership and political will to recognize the urgency of connecting city resources to building wealth in Boston’s neighborhoods and closing the racial wealth gap.”
Annissa Essaibi George, another city councilor and mayoral candidate, has advocated for a home rule petition that would allow Boston to break larger contracts into smaller orders “to ensure minority- and female-owned businesses can fairly compete.”
“We need to change the system that keeps leading to these inequitable outcomes,” she said in a statement.
Walsh commissioned the disparity study in 2018 after reports showed his administration’s poor track record on spending with firms owned by people of color and by women. It was also intended to provide a legal groundwork for race-conscious and gender-conscious policies that could withstand a court challenge.
But now the 703-page study is being used against the Walsh administration to allege structural discrimination against entrepreneurs of color.
City officials “did the disparity study to make sure they didn’t get sued by white contractors,” said Ivan Espinoza-Madrigal, executive director of Lawyers for Civil Rights in Boston. “But maintaining the stark levels of disparities against minority-owned businesses exposes them to significant liability from those businesses.”
Lawyers for Civil Rights has been working with advocates to pressure the Walsh administration to diversify its suppliers and has noted how Boston lags other cities. Last February the lawyers filed a federal civil rights complaint against the Boston Planning & Development Agency, alleging it did not do enough to engage non-English speakers in the public process around the massive redevelopment of Suffolk Downs. The city resolved the case by agreeing to establish language rules for all large projects going forward and to provide additional translation services.
The city disparity study recommended a series of improvements including: setting participation goals, unbundling large contracts, expanding advertising and outreach, and increasing the minimum number of quotes for purchase orders.
Rosario Ubiera-Minaya, executive director of Amplify Latinx, said the contracting process in Boston favors white-owned businesses and deprives the Black and Latino communities of economic opportunities.
“The city must act immediately to correct these inequities,” she said. “Our businesses are ready and available, and are very capable of taking these contracts on.”