CINCINNATI — Of the nearly $16 million in city tax funding that the Cincinnati Park Board spent to build the most recent phase of Smale Riverfront Park, less than 2 percent of the money went to businesses owned by women or minorities.
To be clear, city officials weren’t judging the Park Board on its contracting with women- and minority-owned businesses. At the time Smale Park was built, the city had a Small Business Enterprise contracting program that was race- and gender-neutral. That means the program didn't favor women or minorities in any way. And the Park Board was quite successful by those standards.
But even as the Park Board was racing to finish Smale Park in advance of Major League Baseball's All-Star Game last summer, Mayor John Cranley and other city leaders were touting the importance of awarding more city contracts to companies owned by minorities and women. And critics say the system the Park Board used to finish the park more quickly made it more difficult for women- and minority-owned companies to compete for the work.
“At some point, to get over this hump, people have got to do the right thing,” said Monroe Barnes, the founder and president of MBJ Consulting, a Downtown-based construction management firm.
Added Cincinnati City Councilman Christopher Smitherman: "I think the system was setting itself up for some exclusion."
WCPO's review of 187 invoices submitted for Smale-related work between November 2014 and December 2015 found 119 listed payment to subcontractors. Of those, only 22 listed payments to subcontractors that are known to be owned by either women or minorities.
City officials who spoke with WCPO declined to criticize the Park Board specifically for the contracting results, saying that the department was following the rules that existed at the time and was successful by those measures.
But the tiny number of contracts that went to women- and minority-owned businesses proved that the city's former system was broken and needed to be fixed, Mayor John Cranley told WCPO.
"That's exactly why we've changed the program from being race- and gender-neutral to being race- and gender-conscious," Cranley said. "I think if you look at the history of this country, if you look at the history of this city, we have to be aware of our own biases."
Access and Opportunity
Here's how the numbers broke down, according to figures provided by the Park Board and the city of Cincinnati:
• The Park Board used $15,975,000 in city capital improvement funds to help build the most recent phase of Smale Riverfront Park from 2012 through the present.
• Of that amount, the Park Board awarded $10 million in contracts to companies certified as small business enterprises — or SBEs — under the city's old contracting program. That's 63 percent of all contracts awarded. And that's more than double the city's former goal of spending 30 percent of total dollars with SBEs on construction projects.
• Of that $10 million, $37,000 went to Security Fence, a woman-owned business, according to Park Board data.
• Data obtained from the city's Department of Economic Inclusion showed that Rod-Techs, Inc., got $167,760 in business through a subcontract with Prus Construction Company.
• Invoices reviewed by WCPO showed $5,859.99 paid to Accent Signs, a woman-owned business, and $1,850 to Custom Glass & Glazing, a woman-owned business.
• The money that went to all those businesses added up to less than 2 percent of the city capital dollars spent.
To get the most recent phase of Smale Riverfront Park completed more quickly — before last summer's All-Star Game — the Park Board used so-called Master Service Agreements to select companies for the work instead of requiring competitive bids for each piece of the project.
Barnes said he thinks that strategy made it more difficult for minority business owners like himself to get an opportunity to compete for contracts.
"I think everybody should have an equal opportunity and access to work on the job," he said. "All of us should have been notified and had a chance to work on the project."
Steven Schuckman, the superintendent for planning, design & facilities for Cincinnati Parks, wrote in an email response to WCPO that he couldn't "speak to whether or not the use of Master Service Agreements was a factor in the number of women-owned or minority-owned companies who were subcontractors" on the Smale Park project.
Schuckman answered questions in writing, but said he and Cincinnati Parks Director Willie Carden were too busy to meet with WCPO for an interview.
Understanding Master Service Agreements
The city of Cincinnati and city departments award Master Service Agreements to companies that are pre-approved to do work that must be completed quickly. In the past, agreements have been signed for as many as three years, which could give an advantage to companies that are part of the agreements.
In light of revelations about the way the Park Board and other city departments have used the Master Service Agreements, however, the city has changed the way it awards them, said Thomas Corey, the city's director of economic inclusion.
City Manager Harry Black has established a selection committee that reviews all companies under consideration for Master Service Agreements. And after companies are part of those agreements, the same committee looks at spending to determine whether the same businesses are used over and over again instead of expanding opportunities, Corey said.
The city also is limiting the length of time a Master Service Agreement can be in place, he said. Instead of three years, new agreements now are typically for one year with an option to renew for another year.
"Before the current city manager and team came on, there was too much decentralization, and agencies had too much authority on how MSAs were drafted and executed and carried out," Corey said. "Now the city manager's office has absolute input on MSAs. In some instances where he thought there shouldn't be an MSA, it was done away with."
Keeping the control centralized also gives top city officials the ability to spot patterns if some companies are getting lots of work through Master Service Agreements while others are ignored, Corey said.
But those weren't the only problems with Master Service Agreements that have made it difficult for women and minority business owners to get work with city departments, Smitherman said.
Throughout, the city agreements have tended to go to companies that have experience doing business with the city, he said. Companies that have sought to be part of a Master Service Agreement have gotten extra points in the city's competitive process if they have worked for the city in the past, Smitherman said.
"In all of that, you had the same people getting the same business, which excluded people," he said. "The system that we have in place isn't set up for new relationships to be built."
That's not to say companies owned by women or minorities have never won Master Service Agreements. Security Fence, in fact, had a Master Service Agreement with the Park Board and secured its work on Smale park through that agreement.
But the city for years has had a dismal track record when it comes to awarding contracts to women- and minority-owned businesses. So opening up the opportunity for new relationships is critical, he said.
Those criteria would not have impacted the Master Service Agreements used by the Park Board, however, because the Park Board awarded the agreements based strictly on the "lowest and best" bids for the work. That's according to an email from Patrick Duhaney, the city's chief procurement officer, in response to questions from WCPO.
No matter what role Master Service Agreements played in the construction of Smale Riverfront Park, though, the work was a boon for one local minority-owned business.
Then and Now
Rod-Techs President Chris Packer said his company was grateful for the iron work it did as a subcontractor for Prus Construction on the Smale Park project.
"I applaud Prus," Packer said. "I stand behind Prus every day of the week."
Packer estimated that his company earned even more than the $167,760 that the city's records reflect because the scope of the project changed several times.
"There were a lot of minority people working down there under Rod-Techs," he said.
But Rod-Techs' success on the project would represent a small fraction of the work even if the company earned double what the city's records reflect.
And such disparities are part of the reason the city has instituted major changes in its contracting program, Corey and Cranley told WCPO.
Cranley made the city's dismal minority contracting record a centerpiece of his campaign for mayor. A council majority voted before the 2013 mayoral election to commission a so-called Croson study. The city then hired a California-based firm to conduct the study to find any patterns of disparity in how the government has awarded contracts.
Those changes took effect in January 2016, and they allow the city to steer more contracts to women- and black-owned businesses, specifically.
"The evidence is clear that the only way to make meaningful progress on women and minority inclusion is to have conscious effort consistent with market capacity to make sure that the dollars that are spent really reflect the diversity of the city," Cranley said.
The Park Board results on the most recent part of the Smale Park project were similar to the minority-contracting results that the city as a whole had been seeing for years, Cranley said.
Now that the system has changed, Cranley said he expects Carden and his staff will meet or exceed the city's new minority-contracting goals.
"They were very good at what the official program was," Cranley said. "And I suspect and believe that they'll be the best at the new effort, which is focused on minority- and women- owned businesses."
Ensuring that more women- and minority-owned businesses have the opportunity to win city contracts is the bottom line — for the Park Board and throughout the city, Corey said.
"That's the only way we're going to grow the economy — if everyone's involved in it," he said. "It's just vitally important."
Lucy May writes about the people, places and issues that define our region – to celebrate what makes the Tri-State great and also shine a spotlight on issues we need to address. She has been writing about women- and minority-owned businesses in Greater Cincinnati for more than 18 years. To read more stories by Lucy, go to www.wcpo.com/may. To reach her, email email@example.com. Follow her on Twitter @LucyMayCincy.
Joe Rosemeyer is a web editor at WCPO. Follow him on Twitter @joe_rosemeyer.