The City of San Antonio’s program to contract with minority- and woman-owned businesses is working well, but not all groups have felt the benefits evenly, according to a recent city study.
Businesses owned by Hispanic people and white women have been the biggest beneficiaries of the city’s Small Business Economic Development Advocacy Program (SBEDA), while businesses owned by Black, Asian, Native American and non-minority owners have not fared as well, the study found.
The city spent 53% of its contracting dollars with minority- and woman-owned businesses from 2014 through 2020, compared to 23% during the previous study period. San Antonio’s last study of the program was completed in 2015.
The formulas for determining ongoing disparities are complicated, but in general terms Hispanic- and white woman-owned businesses were overrepresented in contracts compared to their percentages in San Antonio. Meanwhile, the other groups, although smaller in number, were proportionally underrepresented compared to their availability in the community.
“You run an excellent program,” said Colette Holt, a nationally recognized expert in designing and studying business diversity programs whose firm oversaw the 2023 study. A draft of the study, released in May, was presented to City Council’s Economic and Workforce Development Committee on Wednesday.
“Overall you’re doing extraordinarily well,” she told committee members, but the benefits have been “a little lumpy.”
The study recommends the city continue its program with a few tweaks, including more targeted outreach to certain business populations.
The full council will be briefed on Aug. 9, and is expected to vote to begin a process to amend the SBEDA program at the end of August, with a goal of adopting amendments by the end of 2023. Implementing the changes is estimated to take place in March 2024.
That timeline allows for the city’s Economic Development Department to gather feedback on any proposed amendments. Already the department has held more than a dozen meetings with more than 20 business-related organizations to share the results of the study and hear how the program is working — or not — for small businesses.
Many reported that the city’s procurement process remains difficult, as does the process to be bonded and insured, a necessary step to seeking city contracts.
The city is seeking a consultant to help streamline its procurement process, said Michael Sindon, an administrator with the economic development department, and it started a bonding assistance pilot program last year.
Holt recommended fully funding the bond assistance program. “The good ones are expensive,” she said, but, like simplifying procurement, can end up helping all small businesses seeking government contracts.
Since a 1989 Supreme Court decision found that race- and gender-conscious programs are subject to “strict scrutiny” — the highest level of judicial review — disparity studies are used to show the necessary “compelling interest” in maintaining these programs.
They do that by gathering statistical and anecdotal evidence of continued disparities and barriers. Programs must then be narrowly tailored to address those disparities.
San Antonio has “the single most important thing you need” to have a successful program, Holt said. “Commitment to do something from the top. The results speak for themselves.”
The full disparity study can be found online, and residents can share feedback at the same website.
