CINCINNATI — It's official: The city of Cincinnati has a new way of doing business with local companies owned by women and minorities.
Now, the challenge will be getting those local business owners to give it a try.
"There are opportunities coming out of the city of Cincinnati," said Thomas Corey, the city's director of economic inclusion. "Folks need to turn their attention to Cincinnati and what the city manager has put in place."
Those opportunities amount to hundreds of millions of dollars in contracts each year. And the new Minority and Women Business Enterprise Program that took effect Jan. 1 aims to ensure a sizeable portion of those contracts are awarded to companies owned by women and minorities.
The program's annual participation goals are for the city to award:
• 17 percent of construction contracts to black-owned companies
• 10 percent of construction contracts to woman-owned companies
• 14 percent of professional services contracts to black-owned companies
• 16 percent of professional services contracts to woman-owned companies
The contracts in question are those valued at $50,000 or more. The goals are based on the number of businesses in Hamilton County that are owned by women and minorities and are able and willing to do the work. Women and black business owners were singled out in those categories because a study of city contracting practices found patterns of past discrimination against them in those areas.
If the whole thing works as planned, the program should help local businesses grow and create new jobs, Corey said.
Even getting halfway to those goals in 2016 would signal major progress for the city, Cincinnati Mayor John Cranley said. He pledged during his 2013 campaign to work to give minority and women business owners a better shot at winning city contracts.
"The cities that have invested in inclusion have led to greater riches for everybody," Cranley said. "And not just African-Americans are wealthier, but white residents are, too."
The program also is designed to help increase the number of companies competing for city work, which should reduce costs, City Manager Harry Black said.
"Competition is good," he said. "It's all about market forces and market dynamics."
Certification Designed to Prevent Fraud
The changes are the result of a study of Cincinnati's business contracts and history of dealing with minority-owned businesses. The so-called Croson study — named after a 1989 U.S. Supreme Court case that dealt with the Equal Protection Clause and municipal contracts — was conducted by a California-based consulting firm and released in September.
The study found that a small number of businesses — just 96 — won contracts that accounted for 70 percent of the dollars the city spent.
An even smaller number — 38 businesses owned by white men — accounted for half the city's spending.
City officials already have identified 97 women- and minority-owned businesses that are eligible to do work for the city, Corey said.
To get certified as a minority business enterprise or women business enterprise companies must submit detailed financial data and information about how the businesses are structured and who has control of day-to-day operations and major decisions.
Although some business owners have complained that those requirements are invasive, Black said such steps are necessary to ensure only legitimate women- and minority-owned companies get certified.
Before a company can become certified, a city official also visits the business to see the operations and ask questions there, Corey said.
"If someone else is coming in from another office answering all the questions, it can tell you a lot," Corey said.
The certification process typically takes between two and three weeks, he said.
On Jan. 26, the city will have a one-day certification event so companies can complete the process more quickly. If business owners have all their documentation in order, city officials will complete everything but the site visit that day. For more information, call (513) 352-3144.
"We're going to try to do at least 24 or 25 companies that day," Corey said. "We already have six folks that have signed up."
The city also has signed an agreement with the state of Ohio allowing minority businesses that already are certified through the state's Department of Administrative Services to be certified more quickly by the city.
A similar deal is in the works with the Ohio River Valley Women's Business Council for woman-owned businesses, according to a memo from Black dated Tuesday.
Contracts, Not Doughnuts
Even after companies are certified by the city, though, they still will have to compete to win city contracts.
City officials have tried to make it easier to do that by posting dozens of city contracts on the city's Open Data Portal. The city began posting all contracts for jobs worth $50,000 or more online on Nov. 17. Since then, the listing has received more than 5,400 pageviews, which is more than any other data set on the portal.
But the city's new Minority and Women Business Enterprise Program recognizes that small businesses owned by women and minorities often can't get the same pricing discounts much larger companies can.
Because of that, the program permits the city to spend more with women and minority business owners.
Under the new policies, city officials can award a contract for services and supplies to companies owned by blacks, Asians or women that submit a response to a city bid that is no more than 5 percent higher than the lowest and best bid as long as:
• The contract total isn't $25,000 or more higher per year than the lowest and best bid;
• And the contract awarded to the woman- or minority-owned company isn't more than the amount of money the city had budgeted for the contract.
Eric Ruffin, co-owner of ABEL Building Systems, said that policy could be a big help for small business owners.
"The issue is not that we can't do the work," Ruffin said. "The issue is that when you're a small business, you have to pay more for the things that you do because you're smaller. It's a fact."
Ruffin spent more than a decade trying to win a contract to monitor city alarm systems. His company finally won it last year, but it took countless meetings, trips to City Hall, emails and letters to get to the point where he felt like the bid document gave his company a fair shot.
Ruffin admitted he hasn't attended any recent meetings to hear about the changes in the city's policies because, as he put it, "I don't want to be fed doughnuts, I want to be fed contracts."
Still, Ruffin said he and other local business owners should be willing to give the new system a chance.
"I look forward to seeing how it works, and I'm glad that they're doing it," he said. "I can sit on my hands and say I'm not coming back, or I can try it out. It's up to me."
And although some white company owners might be worried about how the changes will impact their businesses, Cranley stressed they shouldn't be.
"There's enough work and business for everybody to have success in this," he said. "At the end of the day, nobody is entitled to a government contract."
For more information about the city's contracting program and how a company can become certified as a woman- or minority-owned business, click here.
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 17 years. To read more stories by Lucy, go to www.wcpo.com/may. To reach her, email firstname.lastname@example.org. Follow her on Twitter @LucyMayCincy.