African-American businesses in Nashville are not receiving their fair share of Metropolitan Nashville Government contracting, which could help play a role for business growth. Only 2% of the Nashville Metropolitan procurement budget goes to African-American businesses. City Councilman and District 54 candidate, Scott Davis is changing that.
Davis recently introduced legislation to help fix Metro’s procurement and non-discrimination program. Davis says his goal is to help eliminate barriers and create economic development opportunities for the African-American community.
“Since 1999, Metro government of Nashville has conducted two disparities studies which concluded that Minority owned Businesses have been ‘significantly underutilized’ within its procurement practices,” said Davis.
In 2008, the Nashville Metropolitan Government enacted procurement non-discrimination legislation. The legislation was designed to solve the problem by requiring prime contractors on bids awarded by the city to actively seek minority participation. According to Davis, that legislation has resulted in only 2.18% of all sub-contractor awards and 1.88% of all prime awards, over the last 5 years, being awarded to African-American businesses.
According to Davis, the problem is that current legislation only relies on a “good faith effort”, and many prime contractors are actively working around that requirement.
“That’s what got us involved,” said Don Majors, Chairman of the NAACP Economic Development Committee, who helped write the legislation.
“We’ve had a number of minority businesses come to the NAACP office to complain about how the prime contractors were getting around it by doing things like calling people who did not have the expertise in the work that was called for. So, what we did was tighten up the legislation to make it virtually impossible for prime contractors to avoid not using a minority contractor.”
According to Majors, “This legislation is a result of at least a year’s worth of work that the NAACP economic development committee has done in bringing to light the past discrimination against African-American and minority businesses over the last 10 years in Metro Nashville”
Major says that the NAACP reviewed the records of minority participation in business with the city over the last 5 years and what was found is indicative of “passive discrimination on the part of the city.”
“One of the major parts of this bill is that it amends the” good faith efforts” that a company must do to list an African-American or other minority businesses,” said Majors.
The NAACP committee looked at the current non-discrimination ordinance and decided that amendments were needed to encourage the city to provide better opportunities for minority businesses. Those include: segmenting the totality of the work into smaller portions where feasible, having prime contractors attend conferences and forums that allow interested minority and women owned firms to market their goods and services, sending letters/emails and other direct communication to minority and women owned firms, and advertising in publications that target diverse populations.
The new legislation also gives the Nashville Business Assistance Office, that oversees purchasing, the ability to penalize those entities that do not comply with the law.
“The main problem with current program is that has no teeth,” said Davis. “With the new legislation, bidders or participants who fail to comply will be subjected to sanctions and penalties for non-compliance, and the Business Assistance Office will have the authority and power to enforce those provisions. “
Penalties include: Cancellation of contract, withholding of payments, disbarment and suspension.
The ordinance also helps with assistance with bonding, insurance and technical matters; requires paying subcontractors within 15-30 days; and allows sub-contractors to participate in any upgrade, change or contract extension.