Program aims to increase opportunities and engage firms owned by Blacks, people of color and women for 30 percent of county business
Harris County contracting with businesses is, literally, a pennies-on-the-Benjamin proposition for Black-led firms.
That means for every $100 the county spends, $9 goes to businesses owned by women or people of color. Hispanic firms get half of that and for Black-owned businesses, it’s just 50 cents or less than 1 percent.
It’s a glaring inequity in a “majority-minority” county that led Precinct 1 Commissioner Rodney Ellis to push for more information through a disparity study followed by a proposal to change who wins county business.
In a 4-1 vote this month, the Harris County Commissioners Court approved a new minority and women-owned business enterprises program with a 30 percent participation goal. The MWBE policy will be administered by the Harris County Office of Economic Equity and Opportunity and its new director, Pamela Chan.
All three Democrats – Harris County Judge Lina Hidalgo, Commissioner Adrian Garcia and Ellis – approved the proposal along with Commissioner Jack Cagle, a Republican supported the measure after securing a commitment from Garcia to formulate a business opportunity program for veterans. Commissioner Steve Radack, a Republican, voted no.
“When it comes to women and minorities, there is a wrong that needs to be corrected,” Hidalgo said.
During a two-hour discussion on Nov. 10, Ellis said it’s far beyond time to dispense with the status quo.
“Obviously, we do have a problem,” he said. “We are the last diverse urban area in America to do anything.”
As a Houston City Council member, Ellis pushed the passage of a 1984 ordinance establishing goals for contracts with businesses owned by women and people of color. As a state senator, he played a part in the 1991 Texas program for “historically underutilized businesses” or HUBs to increase contracting opportunities.
After winning a seat on Commissioners Court in 2016, he found that the county didn’t keep a central database of contract data or relevant demographic information to evaluate equity.
The county disparity study, which began in 2018 and took two years to complete, was unveiled amid the COVID-19 pandemic and social uprisings about valuing Black lives focused on inequities ranging from policing and the wealth gap to more support for Black businesses.
Colette Holt, a San Antonio-based lawyer who provides legal counsel and consulting to businesses and governments on procurement and contracting with a specialty in minority, women and disadvantaged business initiatives, prepared the study.
Harris County disparity ratios for women and people of color reflect that “very few county dollars were going to these groups and they were more available than the dollars than they received,” Hold told commissioners.
“The disparity study results for the county certainly do support your ability to have some type of race- and gender-conscious program where you are deliberately and intentionally trying to ensure that women and minority firms have equal opportunities for your work,” Holt said.
She also helped create the framework for the county’s program designed to offer MWBEs “full and fair” opportunities to compete.
“The point is to remedy and identify race and sex discrimination,” she said. “These are by and large relatively small firms … that still have not been able to get over those barriers.”
Holt’s framework recommends setting an annual aspirational goal of awarding at least 30 percent of county contracts and associated subcontracts to MWBEs, developing performance standards and review timetables, implementing a mentor-protégé aspect between prime contractors and subcontractors as well as establishing the Office of Economic Equity and Opportunity to administer the program.
She emphasized that 30 percent as an aspirational goal is not a quota or set-aside, but “an overall target for what the county would like to see in terms of its spending. It’s not the goal for every contract; it probably isn’t the goal for most contracts. … This is something to strive for.”
This type of analysis and action is important because a wide gulf remains between Black and White families in terms of business development, home ownership, investments and other assets that can be passed to future generations. According to the Brookings Institution, “at $171,000, the net worth of a typical White family is nearly ten times greater than that of a Black family ($17,150) in 2016. Gaps in wealth between Black and White households reveal the effects of accumulated inequality and discrimination, as well as differences in power and opportunity that can be traced back to this nation’s inception.”
More than a dozen speakers, including representatives from business and advocacy organizations such as the Houston Area Urban League and the Houston Hispanic Chamber of Commerce, expressed support for the program during public comment.
Congresswoman Sheila Jackson Lee and Congressman Al Green, both Houston Democrats in the U.S. House of Representatives, commented during the virtual meeting and urged commissioners to approve the program.
Jackson Lee said the new goal would create an “economic engine” for the county and that “MWBE policies effectively help train and energize the small business community.”
Green said the program would begin to right the wrongs of centuries of discrimination.
“Let’s set the goal and let’s do it right away,” he said before the vote. “It’s long overdue.”