City of Milwaukee
Disparity Study Update
Background
The purpose of the 2009/2010 disparity study was to determine if a statistically significant disparity exists for minority and women owned emerging firms working on City of Milwaukee construction, professional services and goods & services contracts.
A disparity exists when there are more available emerging firms ready, willing and able to conduct work on City of Milwaukee contracts than are utilized. The study included four years of contracting activity from January 2005 through December 2008.
In addition, the 2007 Emerging Business Enterprise (EBE) Program Evaluation Report revealed an underutilization of African-American owned firms in various city contracts. As a result of these findings, a full-blown Disparity Study was commissioned to evaluate the impact that the City’s contracting policies and procedures had on minority and women owned firms during the study period.
What is a Disparity Study?
A disparity study provides an agency with the evidence, in accordance with current case law, to determine whether or not, and to what extent, race and gender conscious programs are appropriate. A disparity study must be conducted in order for a governmental entity to establish a valid race and gender conscious contracting requirements.
The 1989 U.S. Supreme Court decision in City of Richmond v. J.A. Croson Company established the standard of review for state and local governments that take race into account when awarding contracts. In Croson, the Court ruled that the strict scrutiny standard be applied to race-conscious programs. The strict scrutiny standard requires minority business programs to be predicated upon two factors.
- First, an owner must establish a "compelling governmental interest", as evidenced by ongoing effects of past or present discrimination against minority-owned businesses.
- Second, race-conscious programs must be "narrowly tailored" to remedy the effects of such discrimination. In other words, programs must not be overly broad; rather, they should be narrowly designed to address the specific forms of discrimination identified by the agency.
Program History
The Emerging Business Enterprise (EBE) Program was enacted in 1989, through Chapter 360 of the Milwaukee Code of Ordinances. The EBE Program, formerly known as the DBE program, was created to assist and protect the interests of individuals who are disadvantaged and small business concerns in order to promote and encourage full and open competition in the City of Milwaukee. Chapter 360 of the Milwaukee Code of Ordinances was revised in 2002 to utilize city-certified EBEs in all contracting activities by approving an annual 18 percent EBE utilization requirement for each contracting department, and all other operating departments.
Next Steps
In an effort to keep you fully informed of the City's progress, the Office of Small Business Development office will do the following in the first quarter of the year:
- Present an opportunity for the public to review and comment on the Disparity Study and recommendations (Completed on 12/20/10)
- Purchase and begin implementing monitoring compliance software (To be completed by 1/31/11)
- Present a new proposed S/M/WBE Program (To be completed by 3/31/11)
Check back frequently for updates on the relevant dates and times of upcoming events and discussions.
For additional information, please feel free to contact us at (414) 286-5553.