Marty Walsh has come under fire over the city’s abysmal record of spending with Black- and Latino-owned businesses. But lost in the uproar is that the mayor, in one of his last acts in office, has ushered in a new era that could finally make the system more equitable.
An executive order Walsh signed Thursday requires that at least 10 percent of the money the city spends annually on outside contracts for construction and professional services and goods goes to companies owned by people of color.
To put that in context, consider that the city spent about $53 million with businesses owned by people of color from 2014 to 2019. If the 10 percent target had been in place during that period, about $216 million would have been steered to these firms, based on figures from the city’s new disparity study.
It’s a meaningful difference of more than $160 million; money that could have ― and now will ― go to entrepreneurs who have been left behind, putting them on a path to building wealth for themselves and for communities of color.
This kind of shift, however, would never happen through good intentions alone ― setting race-conscious spending targets was necessary, and long overdue.
“If you don’t do that, you can’t move the needle,” said Colette Holt, a Texas lawyer who specializes in affirmative action and contract compliance.
Up for debate is whether 10 percent is the right number, but it’s more than what the city does now. And if City Council President Kim Janey wants to futz with the percentage, that’s her prerogative. She will become acting mayor when Walsh departs to join the Biden administration as labor secretary.
And of course, there is room to further refine Walsh’s order. For starters, it’s important we don’t lump all people of color together under a singular goal based on that 10 percent benchmark.
From the city’s study, we know that Black-owned businesses have fared the worst when it comes to getting city work ― they were awarded only 0.4 percent, or $9.4 million, of contracting dollars from 2014 to 2019. Latino-owned firms received 0.8 percent, or $18.2 million. Businesses owned by Asian-Americans got 1.1 percent, or $22.7 million worth of work from the city.
To put that in perspective, the Black and Latino populations in Boston are each more than twice the size of the Asian-American population. The takeaway: The city has done a little bit better in figuring out how to reach Asian-American businesses as suppliers, but not Black- and Latino-owned firms.
It’s understandable why three Black and Latino groups this week filed a federal civil rights complaint against the City of Boston alleging a pattern of discrimination against Black- and Latino-owned businesses. The lead plaintiff, the Black Economic Council of Massachusetts, would like the city to set a goal of spending 15 percent of its contracting dollars with Black-owned businesses.
Tanisha Sullivan, president of the Boston branch of the NAACP who worked with the city on formulating the new goals, called them a “significant mile marker in advancing racial equity in contracting.”
Still, she said, more work needs to be done, such as creating separate goals by race to reflect different challenges. That will require legislation from the City Council and state Legislature to create the legal framework for such a system. Without specific goals, Black- and Latino-owned businesses may still be woefully underrepresented.
“Not all businesses experience the disparity in the same way,” Sullivan added.
If setting clear goals is step one, step two is making sure City Hall is held accountable if those goals aren’t met. Walsh’s executive order is a bit fuzzy on consequences and enforcement, though city departments will be required to produce annual reports showing whether they met the spending goals.
“The accountability is what will give you confidence in the process to even apply in the first place,” said Greg Minott, who is Black and cofounder of Boston architecture firm Dream Collaborative and president of the Boston Society of Architecture.
Minott said he began pursuing city contracts over the last couple of years but so far has come up short. Like other business owners of color I spoke to, he has found more success dealing with private companies than public agencies. He’s hopeful the study and goals will shift the landscape for companies like his.
He believes his firm’s biggest hurdle in securing a Boston contract is its lack of experience working with the city. Which, of course, the company doesn’t have because it has yet to win a contract. As Minott points out, renovating a privately owned building isn’t a whole lot different from doing the same kind of work on one owned by the city.
“That knowledge should be transferable,” he said.
If the city fails to meet its new contract-spending goals, we know the excuse can’t be that there aren’t enough qualified businesses owned by people of color.
One of the most eye-opening parts of the 703-page disparity study the city formally released this week is that there is no talent shortage in communities of color. Plenty of businesses owned by Black, Latino, and Asian entrepreneurs could potentially land city contracts, but many are not willing to participate in the application process because the odds of winning have historically been so bad.
Had participation rates been higher, the disparity study indicated, the city easily could have spent twice as much with businesses owned by people of color.
Let’s be clear: Entrepreneurs of color I talk to aren’t sitting around waiting for a city contract. They find work in the private sector, often outside of Boston or Massachusetts. The study, which included in-depth interviews and surveys with business owners, backs that up.
For example, the study quotes an unnamed Black owner of a professional services firm as saying: “Ironically, for a City of Boston-certified [Minority Business Enterprise], we have done more business in Georgia and California than we have done in the city that is home to our corporate offices.”
Cesar DaSilva, owner of Design Construction & Consulting Services in Dorchester, can relate. About 80 percent of his business comes from outside Boston, where he grew up.
For years he has applied for modest city contracts, but has hit a dry spell during the Walsh administration. After three decades in business and annual revenue of about $1.5 million, DaSilva said what he really wants is a shot at securing a public contract large enough to help his company grow to the next level.
“Thirty years we are still here, but we have not scaled up,” said DaSilva, who is Cape Verdean and has eight employees. “The inequality is still here. ... We feel it in the day-to-day when we see all this construction going around us, but we are not in it. Why is this?”
The truth is we know why. Righting decades of wrongs hasn’t been a priority. But the new spending goals are quantifiable, not aspirational. And in the end, what gets measured gets done.
Shirley Leung is a Business columnist. She can be reached at email@example.com.