In an effort to boost racial and gender diversity in city contracting, Boston Mayor Michelle Wu announced Thursday she is relaunching a fund aimed at helping small businesses compete in the bidding process for public projects.
A study released last year showed businesses owned by people of color and white women were massively underrepresented in contracts awarded by the city. Specifically, companies owned by people of color landed just 2.5 percent of the $2.1 billion in contracts for construction and professional goods and services that the City of Boston awarded between 2014 and 2019, according to the city-commissioned report. Fewer than half of the city’s residents are white, according to US census data.
Wu said she is injecting $800,000 into a fund launched last year to aid local businesses that are underrepresented in the city’s contracts, including those working in construction building and design, professional and support services, and goods and supplies. The money is designed to help small businesses “build their capacity” to bid on contracts.
“We must use every tool possible to ensure equity in City contracting and build wealth in our communities,” Wu said in a statement. “As Boston continues to grow and recover from this pandemic, the reopening of the Contracting Opportunity Fund will help support and expand opportunity for our minority-owned and women-owned small businesses participating in the bidding process.”
To receive funding from the program, businesses must show how it will increase their capacity to bid on city contracts and provide supporting documents for their expenditures. According to Wu’s office, businesses must be certified and registered with a city program in specific categories: minority-owned, women-owned, veteran-owned small business, or a “small local business enterprise.” Businesses have until May 20 to apply for such certification for this round of funding.
Last spring, the program provided grants of up to $15,000 to dozens of certified businesses, according to Wu’s office. All told, $820,000 was awarded to 56 businesses — 71 percent were certified minority-owned and 20 percent were women-owned, according to the city.
“By prioritizing equity, this program will bridge the gap and assist our small business community in the bidding process,” Segun Idowu, the city’s chief of economic opportunity and inclusion, said in a statement.
Priscilla Flint, a community advocate, welcomed Wu’s announcement as a “good thing.” Access to city contracts continues to be a problem for minority-owned businesses, she said, and improvement is long overdue.
“A lot of our businesses are suffering, have been suffering for a long time,” she said.
Last year’s study, which was aimed at uncovering disparities in city spending — analyzed 47,801 contracts. It showed the city spent $185 million, or 8.5 percent of its contract and procurement dollars, on businesses owned by white women. Black-owned businesses were awarded only 0.4 percent of total spending, while Latino-owned businesses garnered 0.8 percent. Asian-American-owned businesses received 1.1 percent of contract dollars.
After the study was released, then-Mayor Martin J. Walsh signed an executive order that set a goal for the city to use businesses owned by people of color and women for at least 25 percent of its contracting. Other goals outlined in that order include rewarding at least 15 percent of city contracts to women-owned businesses and at least 10 percent to businesses owned by people of color.
The lack of diversity in city contracting became a campaign issue during last year’s mayoral contest, with Wu saying at one point that a study “doesn’t get us to where we need to go. We need to see actionable changes.”
Wu’s announcement comes weeks after she filed a home rule petition with the City Council aiming to make it easier for minority- and women-owned businesses to apply for contracts. That proposal requires council and Beacon Hill approval.